Texas Roadhouse, Inc. Announces Second Quarter 2010 Results
LOUISVILLE, Ky., (BUSINESS WIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 week periods ended June 29, 2010.
Second Quarter Year to Date
($000's) 2010 2009 % Change 2010 2009 % Change
------- ------- -------- ------- ------- --------
Total revenue 255,162 242,423 5 514,786 488,496 5
Income from operations 23,329 21,494 9 53,435 43,777 22
Net income 15,036 13,741 9 34,277 28,075 22
Diluted EPS $0.21 $0.19 7 $0.47 $0.40
Results for the quarter included:
- Comparable restaurant sales increased 1.4% at company restaurants and 2.0% at franchise restaurants;
- One company restaurant and one franchise restaurant opened while one company restaurant closed;
- Restaurant margins increased 45 basis points to 18.8%;
- Diluted earnings per share increased 7% to $0.21 from $0.19 in the prior year period.
Results year-to-date included:
- Comparable restaurant sales increased 0.9% at company restaurants and 1.4% at franchise restaurants;
- Four company restaurants and one franchise restaurant opened while one company restaurant closed;
- Restaurant margins increased 132 basis points to 19.5%;
- Diluted earnings per share increased 19% to $0.47 from $0.40 in the prior period.
G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, "We are pleased to report another quarter of diluted earnings per share growth led by both positive comparable restaurant sales and continued restaurant-level margin expansion. Positive guest counts drove the increase in comparable restaurant sales, while lower commodity costs continued to pave the way for margin expansion. In addition, sales at our newer restaurants continue to perform at or above our expectations and we are experiencing lower new unit investment costs. Our goal is to continue driving positive traffic growth through our continued commitment to legendary food and service."
Outlook for 2010
The Company reported that comparable restaurant sales for the first four weeks of the third quarter of fiscal 2010 increased 3.0% compared to the same period a year ago.
The Company estimates 2010 diluted earnings per share growth will be approximately 16% to 20% compared to 2009. This estimate is based, in part, on the following assumptions:
- Comparable restaurant sales growth of approximately 1.0%;
- 14 to 15 company restaurant openings;
- Food cost deflation of approximately 2.5% to 3.0%; and
- Total capital expenditures of approximately $50 million.
Conference Call
The Company is hosting a conference call today, August 2, 2010, at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 723-9517 or (719) 325-4819 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (888) 203-1112 or (719) 457-0820 for international calls, and use 8534928 as the pass code.
There will be a simultaneous Web cast conducted at www.texasroadhouse.com.
About the Company
Texas Roadhouse is a casual dining concept that first opened in 1993 and today operates over 330 restaurants system-wide in 46 states. For more information, please visit the Company's Web site at www.texasroadhouse.com.
Forward-looking Statements
Certain statements in this release that are not historical facts, including, without limitation, those relating to our anticipated financial performance, are forward-looking statements that involve risks and uncertainties. Such statements are based upon the current beliefs and expectations of the management of the Company. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, the actual number of restaurants opening, the sales at these and our other company and franchise restaurants, changes in restaurant development or operating costs, our ability to acquire franchise restaurants, our ability to integrate the franchise restaurants we acquire or other concepts we develop, strength of consumer spending, conditions beyond the Company's control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting the Company's customers or food supplies, acts of war or terrorism and other factors disclosed from time to time in the Company's filings with the U.S. Securities and Exchange Commission. Investors should take such risks into account when making investment decisions. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statements.
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
13 Weeks Ended 26 Weeks Ended
------------------------------- ----------------------------------
June 29, 2010 June 30, 2009 June 29, 2010 June 30, 2009
--------------- --------------- --------------- ------------------
Revenue:
Restaurant sales $ 252,835 $ 240,301 $ 510,177 $ 484,391
Franchise royalties and fees 2,327 2,122 4,609 4,105
------- ------- ------- -------
Total revenue 255,162 242,423 514,786 488,496
------- ------- ------- -------
Costs and expenses:
Restaurant operating costs:
Cost of sales 82,660 80,314 165,459 163,355
Labor 74,497 71,074 149,406 142,573
Rent 5,287 4,929 10,557 9,841
Other operating 42,767 39,812 85,365 80,672
Pre-opening 1,307 933 2,412 3,217
Depreciation and amortization 10,262 10,616 20,599 21,087
Impairment and closure 100 14 258 (72 )
General and administrative 14,953 13,237 27,295 24,046
------- ------- ------- -------
Total costs and expenses 231,833 220,929 461,351 444,719
------- ------- ------- -------
Income from operations 23,329 21,494 53,435 43,777
Interest expense, net 704 876 1,434 1,733
Equity income from investments in unconsolidated affiliates 92 64 200 149
------- ------- ------- -------
Income before taxes 22,717 20,682 52,201 42,193
Provision for income taxes 7,049 6,436 16,655 13,151
------- ------- ------- -------
Net income including noncontrolling interests $ 15,668 $ 14,246 $ 35,546 $ 29,042
Less: Net income attributable to noncontrolling interests 632 505 1,269 967
------- ------- ------- -------
Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 15,036 $ 13,741 $ 34,277 $ 28,075
====== ======= ====== ======= ====== ======= ==== =======
Net income per common share attributable to Texas Roadhouse, Inc.
and subsidiaries:
Basic $ 0.21 $ 0.20 $ 0.48 $ 0.40
====== ======= ====== ======= ====== ======= ==== =======
Diluted $ 0.21 $ 0.19 $ 0.47 $ 0.40
====== ======= ====== ======= ====== ======= ==== =======
Weighted average shares outstanding:
Basic 71,471 69,909 71,076 69,666
======= ======= ======= =======
Diluted 72,961 71,361 72,587 70,948
======= ======= ======= =======
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(in thousands)
June 29, 2010 December 29, 2009
--------------- ------------------
Cash and cash equivalents $ 60,235 $ 46,858
Other current assets 27,763 27,458
Property and equipment, net 453,365 456,281
Goodwill 113,465 113,465
Intangible asset, net 10,656 11,194
Other assets 7,103 6,817
Total assets $ 672,587 $ 662,073
====== ======= ======== ========
Current maturities of long-term debt and obligations under capital 260 247
leases
Other current liabilities 91,416 107,956
Long-term debt and obligations under capital leases, excluding 79,046 101,179
current maturities
Other liabilities 36,342 29,741
Texas Roadhouse, Inc. and subsidiaries stockholders' equity 462,835 420,372
Noncontrolling interests 2,688 2,578
Total liabilities and equity $ 672,587 $ 662,073
====== ======= ======== ========
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands, except per share data)
(unaudited)
26 Weeks Ended
-------------------------------------
June 29, 2010 June 30, 2009
------------------ ------------------
Cash flows from operating activities:
Net income including noncontrolling interests $ 35,546 $ 29,042
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and amortization 20,599 21,087
Share-based compensation expense 3,736 3,814
Other noncash adjustments 300 1,497
Change in working capital (11,853 ) (8,914 )
------- ---- ------- ----
Net cash provided by operating activities 48,328 46,526
------- -------
Cash flows from investing activities:
Capital expenditures - property and equipment (17,967 ) (22,526 )
Acquisition of franchise restaurants, net of cash acquired - 50
Proceeds from sale of property and equipment, including insurance 51 120
proceeds
------- -------
Net cash used in investing activities (17,916 ) (22,356 )
------- ---- ------- ----
Cash flows from financing activities:
Repayments of revolving credit facility, net (22,000 ) (6,000 )
Other financing activities 4,965 1,551
------- -------
Net cash used in financing activities (17,035 ) (4,449 )
------- ---- ------- ----
Net increase in cash and cash equivalents 13,377 19,721
Cash and cash equivalents - beginning of year 46,858 5,258
------- -------
Cash and cash equivalents - end of year $ 60,235 $ 24,979
==== ======= ==== =======
Supplemental Financial and Operating Information
($ amounts in thousands)
(unaudited)
Second Quarter Change Year to Date Change
2010 2009 vs LY 2010 2009 vs LY
-------------- -------------- --------- -------------- -------------- ----------
Restaurant openings
Company 1 2 (1 ) 4 11 (7 )
Franchise 1 1 0 1 1 0
Total 2 3 (1 ) 5 12 (7 )
Restaurant closures
Company (1 ) 0 (1 ) (1 ) 0 (1 )
Franchise 0 (1 ) 1 0 (1 ) 1
Total (1 ) (1 ) 0 (1 ) (1 ) 0
Restaurants open at the end of the quarter
Company 264 256 8
Franchise 71 69 2
Total 335 325 10
Company-owned restaurants
Restaurant sales $ 252,835 $ 240,301 5.2 % $ 510,177 $ 484,391 5.3 %
Store weeks 3,432 3,313 3.6 % 6,844 6,562 4.3 %
Comparable restaurant sales growth (1) 1.4 % (3.7 ) % 0.9 % (2.4 ) %
Average unit volume (2) $ 952 $ 939 1.4 % $ 1,925 $ 1,914 0.6 %
Restaurant operating costs (as a % of restaurant sales)
Cost of sales 32.7 % 33.4 % (73 ) bps 32.4 % 33.7 % (129 ) bps
Labor 29.5 % 29.6 % (11 ) bps 29.3 % 29.4 % (15 ) bps
Rent 2.1 % 2.1 % 4 bps 2.1 % 2.0 % 4 bps
Other operating 16.9 % 16.6 % 35 bps 16.7 % 16.7 % 8 bps
Total 81.2 % 81.6 % (45 ) bps 80.5 % 81.8 % (132 ) bps
Restaurant margins (3) 18.8 % 18.4 % 45 bps 19.5 % 18.2 % 132 bps
Franchise-owned restaurants
Franchise royalties and fees $ 2,327 $ 2,122 9.7 % $ 4,609 $ 4,105 12.3 %
Store weeks 911 897 1.6 % 1,821 1,794 1.5 %
Comparable restaurant sales growth (1) 2.0 % (3.5 ) % 1.4 % (2.7 ) %
Average unit volume (2) $ 951 $ 927 2.6 % $ 1,900 $ 1,873 1.4 %
Pre-opening expense $ 1,307 $ 933 40.1 % $ 2,412 $ 3,217 (25.0 ) %
Depreciation and amortization $ 10,262 $ 10,616 (3.3 ) % $ 20,599 $ 21,087 (2.3 ) %
As a % of revenue 4.0 % 4.4 % (36 ) bps 4.0 % 4.3 % (32 ) bps
Impairment and closure $ 100 $ 14 NM $ 258 $ (72 ) NM
As a % of revenue 0.0 % 0.0 % 3 bps 0.1 % (0.0 ) % 6 bps
General and administrative expenses $ 14,953 $ 13,237 13.0 % $ 27,295 $ 24,046 13.5 %
As a % of revenue 5.9 % 5.5 % 40 bps 5.3 % 4.9 % 38 bps
(1) Comparable restaurant sales growth includes sales from restaurants
open 18 months as of the beginning of the measurement period.
(2) Average unit volume includes sales from restaurants open six
months as of the beginning of the measurement period. For
comparative purposes, average unit volumes for Q2 2009 and 2009
YTD were adjusted to reflect restaurant sales of any acquired
franchise restaurants as part of Company-owned restaurants average
unit volume and were excluded from franchise-owned restaurants
average unit volume.
(3) Restaurant margins represent restaurant sales less restaurant
operating costs (as a percentage of restaurant sales).
NM - Not meaningful
Amounts may not foot due to rounding.
SOURCE: Texas Roadhouse, Inc.
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