Texas Roadhouse Inc : Texas Roadhouse, Inc. Announces First Quarter 2012 Results
04/30/2012| 04:05pm US/Eastern
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Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial
results for the 13 week period ended March 27, 2012.
First Quarter
($000's)
2012
2011
% Change
Total revenue
324,869
283,785
14
Income from operations (1)
29,402
30,209
(3
)
Net income (1)
18,869
19,793
(5
)
Diluted EPS (1)
$
0.27
$
0.27
(1
)
(1) includes a charge related to a legal settlement discussed below
Results for the first quarter included:
Before a one-time charge, diluted earnings per share increased 15.3%
to $0.31 from $0.27 in the prior year period;
The Company recorded a one-time, pre-tax charge of $5.0 million ($3.1
million after-tax) for a legal settlement, which had a $0.04 impact on
diluted earnings per share;
Comparable restaurant sales increased 6.0% at company restaurants and
6.9% at franchise restaurants;
Eight company restaurants were opened;
Restaurant margins, as a percentage of restaurant sales, decreased 13
basis points to 19.1%.
Kent Taylor, Chief Executive Officer of Texas Roadhouse, commented, "We
were pleased with our performance during the period and believe that
Texas Roadhouse remains very well poised for continued growth. Our sales
momentum continued throughout the quarter for both existing and new
restaurants, and we remain on track to open 25 restaurants in 2012.
Additionally, we continue to work toward at least 25 new restaurant
openings in 2013. Finally, our balance sheet remains strong and we will
continue to evaluate ways to return capital to shareholders through
dividends and share repurchases."
2012 Outlook
The Company reported that comparable restaurant sales at company
restaurants for the first four weeks of its second quarter of fiscal
2012 increased approximately 4.8% compared to the prior year period.
The Company currently anticipates that GAAP diluted earnings per share
for 2012, which includes the legal settlement charge discussed below,
will be $0.91 to $0.93. This compares to diluted earnings per share of
$0.88 in 2011. The updated guidance is based, in part, on the following
assumptions:
Comparable restaurant sales growth of 4.0% to 5.0%;
25 company restaurant openings;
Food cost inflation of 7.0% to 7.5%, slightly lower than previously
expected;
A pre-tax charge of $5.0 million ($3.1 million after-tax) for a legal
settlement. This charge is expected to negatively impact 2012 diluted
earnings per share by approximately $0.04;
An income tax rate of 32.5% to 33.0%, which is much higher than the
prior year rate of 29.5% as a result of the expiration of certain
federal tax credits at the end of 2011. The increased tax rate is
expected to negatively impact 2012 diluted earnings per share by
approximately $0.04; and
Total capital expenditures of $80.0 to $85.0 million.
Settlement of a Legal Matter
The Company reached a settlement agreement, subject to court approval,
of a previously disclosed legal matter relating to Massachusetts wage
law. Accordingly, a pre-tax charge of $5.0 million, or $0.04 per diluted
earnings per share, is included in the Company's financial results for
the first quarter. A reconciliation of GAAP and non-GAAP information for
the first quarter of fiscal 2012 is included with this release.
Conference Call
The Company is hosting a conference call today, April 30, 2012, at 5:00
p.m. Eastern Time to discuss these results. The dial-in number is (888)
811-5436 or (913) 312-0947 for international calls. A replay of the call
will be available for one week following the conference call. To access
the replay, please dial (877) 870 -5176 or (858) 384-5517 for
international calls, and use 8483988 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 370 restaurants system-wide in 47 states and one
foreign country. 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, such as food and labor, 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
March 27, 2012
March 29, 2011
Revenue:
Restaurant sales
$
322,012
$
281,320
Franchise royalties and fees
2,857
2,465
Total revenue
324,869
283,785
Costs and expenses:
Restaurant operating costs:
Cost of sales
109,655
93,541
Labor
93,347
82,720
Rent
6,252
5,657
Other operating
51,229
45,281
Pre-opening
3,585
1,890
Depreciation and amortization
11,347
10,600
Impairment and closure
19
26
General and administrative (1)
20,033
13,861
Total costs and expenses
295,467
253,576
Income from operations
29,402
30,209
Interest expense, net
605
565
Equity income from investments in
unconsolidated affiliates
41
103
Income before taxes
28,838
29,747
Provision for income taxes
9,085
9,272
Net income including noncontrolling interests
$
19,753
$
20,475
Less: Net income attributable to noncontrolling interests
884
682
Net income attributable to Texas Roadhouse, Inc. and subsidiaries
$
18,869
$
19,793
Net income per common share attributable to Texas Roadhouse, Inc.
and subsidiaries:
Basic
$
0.27
$
0.27
Diluted
$
0.27
$
0.27
Weighted average shares outstanding:
Basic
69,405
72,052
Diluted
70,830
73,727
(1) Results for the 13 weeks ended March 27, 2012 include a $5.0
million pre-tax charge relating to the settlement of a legal
matter.
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
March 27, 2012
December 27, 2011
Cash and cash equivalents
$
77,322
$
73,731
Other current assets
35,497
38,243
Property and equipment, net
507,873
497,217
Goodwill
110,946
110,946
Intangible assets, net
8,773
9,042
Other assets
12,329
11,491
Total assets
$
752,740
$
740,670
Current maturities of long-term debt
and obligations under capital leases
312
304
Other current liabilities
137,333
136,068
Long-term debt and obligations under
capital leases, excluding current maturities
51,520
61,601
Other liabilities
47,959
46,875
Texas Roadhouse, Inc. and subsidiaries stockholders' equity
510,568
491,904
Noncontrolling interests
5,048
3,918
Total liabilities and equity
$
752,740
$
740,670
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
13 Weeks Ended
March 27, 2012
March 29, 2011
Cash flows from operating activities:
Net income including noncontrolling interests
$
19,753
$
20,475
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and amortization
11,347
10,600
Share-based compensation expense
3,053
2,960
Other noncash adjustments
(1,781
)
172
Change in working capital
6,388
(2,071
)
Net cash provided by operating activities
38,760
32,136
Cash flows from investing activities:
Capital expenditures - property and equipment
(22,839
)
(12,458
)
Proceeds from sale of property and equipment, including insurance
proceeds
98
49
Net cash used in investing activities
(22,741
)
(12,409
)
Cash flows from financing activities:
Proceeds (repayments) of revolving credit facility, net
(10,000
)
-
Repurchase shares of common stock
-
(25,269
)
Dividends paid
(5,535
)
-
Other financing activities
3,107
747
Net cash used in financing activities
(12,428
)
(24,522
)
Net (decrease) increase in cash and cash equivalents
3,591
(4,795
)
Cash and cash equivalents - beginning of year
73,731
82,215
Cash and cash equivalents - end of year
$
77,322
$
77,420
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)
First Quarter
Change
2012
2011
vs LY
Restaurant openings
Company - Texas Roadhouse
8
2
6
Company - Aspen Creek
0
0
0
Franchise - Texas Roadhouse
0
0
0
Total
8
2
6
Restaurants open at the end of the quarter
Company - Texas Roadhouse
299
273
26
Company - Aspen Creek
3
3
0
Franchise - Texas Roadhouse
72
71
1
Total
374
347
27
Company-owned restaurants
Restaurant sales
$
322,012
$
281,320
14.5
%
Store weeks
3,851
3,568
7.9
%
Comparable restaurant sales growth (1)
6.0
%
4.6
%
Texas Roadhouse restaurants only:
Comparable restaurant sales growth (1)
6.0
%
4.6
%
Average unit volume (2)
$
1,081
$
1,022
5.7
%
Weekly sales by group (3):
Comparable restaurants (263 units)
$
83,395
Average unit volume restaurants (13 units)
$
77,678
Restaurants less than 6 months old (23 units)
$
95,927
Restaurant operating costs (as a % of restaurant sales)
Cost of sales
34.1
%
33.3
%
80
bps
Labor
29.0
%
29.4
%
(42
)
bps
Rent
1.9
%
2.0
%
(7
)
bps
Other operating
15.9
%
16.1
%
(19
)
bps
Total
80.9
%
80.8
%
13
bps
Restaurant margins (4)
19.1
%
19.2
%
(13
)
bps
Franchise-owned restaurants
Franchise royalties and fees
$
2,857
$
2,465
15.9
%
Store weeks
936
923
1.4
%
Comparable restaurant sales growth (1)
6.9
%
3.8
%
Average unit volume (2)
$
1,062
$
994
6.8
%
Pre-opening expense
$
3,585
$
1,890
89.7
%
Depreciation and amortization
$
11,347
$
10,600
7.0
%
As a % of revenue
3.5
%
3.7
%
(24
)
bps
General and administrative expenses (5)
$
20,033
$
13,861
44.5
%
As a % of revenue
6.2
%
4.9
%
128
bps
(1) Comparable restaurant sales growth includes sales from
restaurants open 18 months as of the beginning of the measurement
period, excluding sales from restaurants closed during the period.
(2) Average unit volume includes sales from Texas Roadhouse
restaurants open six months as of the beginning of the measurement
period, excluding sales from restaurants closed during the period.
(3) Weekly sales by group (Texas Roadhouse restaurants only)
includes sales from comparable restaurants, sales from average unit
restaurants and sales from restaurants which were open less than six
months as of the beginning of the measurement period. Average unit
volume restaurants includes sales from restaurants open less than 18
months, but more than six months, as of the beginning of the
measurement period, excluding sales from restaurants closed during
the period.
(4) Restaurant margins represent restaurant sales less restaurant
operating costs (as a percentage of restaurant sales).
(5) Results for the 13 weeks ended March 27, 2012 include a $5.0
million pre-tax charge for the settlement of a legal matter.
Amounts may not foot due to rounding.
Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information
(in thousands, except per share data)
(unaudited)
In addition to the results provided in accordance with U.S.
Generally Accepted Accounting Principles ("GAAP") throughout this
document, the Company has provided non-GAAP measurements which
present operating results on a basis before the impact of a
settlement of a legal matter. This item is described in detail
throughout this document.
The Company used earnings before the impact of the proposed legal
settlement as a key performance measure of results of operations
for purposes of evaluating performance internally. This non-GAAP
measurement is not intended to replace the presentation of our
financial results in accordance with GAAP. Rather, the Company
believes that the presentation of results before the legal
settlement provides additional information to facilitate the
comparison of past and present operations, excluding items that
the Company does not believe are indicative of our ongoing
operations in the quarter ended March 27, 2012.
For the 13 weeks Ended
March 27, 2012
March 29, 2011
Net income attributable to Texas Roadhouse, Inc. and subsidiaries,
excluding settlement charge
$
21,931
$
19,793
Amount reserved for settlement of a legal matter, net of tax (1)
$
(3,062
)
$
-
Net income attributable to Texas Roadhouse, Inc. and subsidiaries
$
18,869
$
19,793
Weighted average diluted shares outstanding
70,830
73,727
Diluted earnings per share, excluding settlement charge
$
0.31
$
0.27
Impact of settlement charge on diluted earnings per share
$
(0.04
)
$
-
Diluted earnings per share
$
0.27
$
0.27
(1) Amount reserved in the first quarter of fiscal 2012 for the
settlement of a legal matter was $5.0 million before the statutory
income tax rate. The settlement amount was included in general and
administrative costs on the Company's Condensed Consolidated
Statements of Income and Comprehensive Income.
Texas Roadhouse, Inc. Investor Relations Tonya Robinson,
502-515-7300 or Media Travis Doster, 502-638-5457
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