Thursday, March 4, 2010

Texas Roadhouse Franchise System Results

Feb. 22, 2010, 4:01 p.m. EST · Recommend · Post:

Texas Roadhouse, Inc. Announces Fourth Quarter 2009 Results
LOUISVILLE, Ky., Feb 22, 2010 (BUSINESS WIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 52 week periods ended December 29, 2009.


Fourth Quarter Year to Date
($000's) 2009 2008 % Change 2009 2008 % Change
Total revenue 227,368 234,202 (3 ) 942,331 880,461 7
Income from operations 14,803 10,866 36 75,861 62,027 22
Net income 8,709 6,139 42 47,479 38,168 24
Diluted EPS $0.12 $0.09 40 $0.67 $0.52 29
NOTE> Q4 2008 and 2008 YTD include 14 and 53 weeks, respectively,
compared to 13 and 52 weeks in Q4 2009 and 2009 YTD. The extra
week in 2008 added $18.0 million to total revenues and
approximately $0.03 to diluted earnings per share for Q4 2008 and
2008 YTD.



Results for the fourth quarter:

-- Comparable restaurant sales decreased 2.6% at company restaurants and 1.2% at franchise restaurants;

-- Five company restaurants opened and one franchise restaurant was acquired;

-- Restaurant margins increased 237 basis points to 17.4%;

-- Diluted earnings per share increased 40% to $0.12 from $0.09 in the prior year period.

Results for the full year:

-- Comparable restaurant sales decreased 2.8% at company restaurants and 2.5% at franchise restaurants;

-- 17 company restaurants and 3 franchise restaurants opened and one franchise restaurant was acquired;

-- Restaurant margins increased 71 basis points to 17.7%;

-- Diluted earnings per share increased 29% to $0.67 from $0.52 in the prior year period.

G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, "Sales trends continued to improve throughout the fourth quarter and, combined with a favorable commodities environment, we were able to generate our third consecutive quarter of year-over-year restaurant margin improvement. This drove profitability for the period and capped off a year where earnings per diluted share increased 29%, solidly exceeding our expectations. Looking to 2010 and beyond, we continue to believe Texas Roadhouse is well-positioned to gain market share based on our ongoing commitment to the basics of providing Legendary Food and Legendary Service. In addition, we remain committed to maintaining a conservative balance sheet."

Outlook for 2010

The Company reported that comparable restaurant sales for the first seven weeks of fiscal 2010 decreased approximately 1.2% compared to the same period a year ago.

The Company estimates 2010 diluted earnings per share growth will be 5% to 10% compared to 2009. This estimate is based, in part, on the following assumptions:

-- Comparable restaurant sales of negative 2% to flat;

-- Approximately 15 company restaurant openings;

-- Food cost deflation of approximately 2.5% to 3.0%; and

-- Total capital expenditures of between $50-55 million.

Extension of Executive Officer Employment Contracts

On February 18, 2010, the Company amended the employment agreements of W. Kent Taylor, Chairman; G.J. Hart, President and Chief Executive Officer; Steven L. Ortiz, Chief Operating Officer; Scott M. Colosi, Chief Financial Officer; and Sheila C. Brown, General Counsel and Corporate Secretary. The amendments extended the term of each officer's employment from January 7, 2011 until January 7, 2012 during which time each officer's annual base salary and target bonuses will remain unchanged.

James F. Parker, Chair of the Compensation Committee of the Board of Directors commented, "The Board is delighted that the executive officers have agreed to extend the terms of their contracts for another year. This management team has functioned extremely well together for many years, and the Board believes the Company will be well-served by having the team remain together. Additionally, by maintaining salaries and bonuses at current levels, the Board of Directors and officers have shown a commitment to shareholders through sound fiscal practices."

Conference Call

The Company is hosting a conference call today, February 22, 2010, at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 856-1965 or (719) 325-4793 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 7946126 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 300 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 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 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 14 Weeks Ended 52 Weeks Ended 53 Weeks Ended
December 29, 2009 December 30, 2008 December 29, 2009 December 30, 2008
Revenue:
Restaurant sales $ 225,292 $ 232,429 $ 934,100 $ 871,556
Franchise royalties and fees 2,076 1,773 8,231 8,905
Total revenue 227,368 234,202 942,331 880,461
Costs and expenses:
Restaurant operating costs:
Cost of sales 74,956 82,918 312,800 308,123
Labor 66,423 69,136 276,626 253,132
Rent 5,148 4,741 20,018 15,879
Other operating 39,511 40,651 158,961 146,019
Pre-opening 1,402 2,631 5,813 11,604
Depreciation and amortization 10,340 10,638 41,822 37,694
Impairment and closure 3,273 1,398 3,000 2,175
General and administrative 11,512 11,223 47,430 43,808
Total costs and expenses 212,565 223,336 866,470 818,434
Income from operations 14,803 10,866 75,861 62,027
Interest expense, net 756 1,508 3,273 3,844
Equity income from investments in
unconsolidated affiliates 36 31 221 215
Income before taxes 14,083 9,389 72,809 58,398
Provision for income taxes 4,909 2,891 23,491 19,389
Net income including noncontrolling interests $ 9,174 $ 6,498 $ 49,318 $ 39,009
Less: Net income attributable to noncontrolling interests 465 359 1,839 841
Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 8,709 $ 6,139 $ 47,479 $ 38,168
Net income per common share attributable to Texas Roadhouse, Inc.
and subsidiaries:
Basic $ 0.12 $ 0.09 $ 0.68 $ 0.53
Diluted $ 0.12 $ 0.09 $ 0.67 $ 0.52
Weighted average shares outstanding:
Basic 70,341 69,923 69,967 72,672
Diluted 71,709 70,915 71,298 74,079




Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(in thousands)
December 29, 2009 December 30, 2008
Cash and cash equivalents $ 46,858 $ 5,258
Other current assets 27,458 29,550
Property and equipment, net 456,281 456,132
Goodwill 113,465 114,807
Intangible asset, net 11,194 12,807
Other assets 6,817 4,109
Total assets $ 662,073 $ 622,663
Current maturities of long-term debt
and obligations under capital leases 247 228
Other current liabilities 107,956 99,415
Long-term debt and obligations under
capital leases, excluding current maturities 101,179 132,482
Other liabilities 29,741 27,741
Texas Roadhouse, Inc. and subsidiaries stockholders' equity 420,372 359,990
Noncontrolling interests 2,578 2,807
Total liabilities and equity $ 662,073 $ 622,663




Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands, except per share data)
(unaudited)
Fiscal Year Ended
December 29, December 30,
2009 2008
Cash flows from operating activities:
Net income including noncontrolling interests $ 49,318 $ 39,009
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and amortization 41,822 37,694
Share-based compensation expense 7,493 7,745
Other noncash adjustments 4,453 5,157
Change in working capital 12,043 11,609
Net cash provided by operating activities 115,129 101,214
Cash flows from investing activities:
Capital expenditures - property and equipment (45,516 ) (102,536 )
Acquisition of franchise restaurants, net of cash acquired 25 (17,835 )
Proceeds from sale of property and equipment, including insurance 2,357 250
proceeds
Investment in equity investees - (95 )
Net cash used in investing activities (43,134 ) (120,216 )
Cash flows from financing activities:
(Repayments)/proceeds from revolving credit facility, net (31,000 ) 67,000
Repurchase of shares of common stock - (56,974 )
Other financing activities 605 2,670
Net cash (used in)/provided by financing activities (30,395 ) 12,696
Net increase (decrease) in cash 41,600 (6,306 )
Cash and cash equivalents - beginning of year 5,258 11,564
Cash and cash equivalents - end of year $ 46,858 $ 5,258




Supplemental Financial and Operating Information
($ amounts in thousands)
(unaudited)
Fourth Quarter Change Year to Date Change
2009 2008 vs LY 2009 2008 vs LY
Restaurant openings
Company 5 6 (1) 17 29 (12)
Franchise 0 0 0 3 1 2
Total 5 6 (1) 20 30 (10)
Restaurant acquisitions
Company 1 1 0 1 13 (12)
Franchise (1) (1) 0 (1) (13) 12
Total 0 0 0 0 0 0
Restaurant closures
Company 0 0 0 (2) (1) (1)
Franchise 0 0 0 (1) 0 (1)
Total 0 0 0 (3) (1) (2)
Restaurants open at the end of the quarter
Company 261 245 16
Franchise 70 69 1
Total 331 314 17
Company-owned restaurants
Restaurant sales $ 225,292 $ 232,429 (3.1 ) % $ 934,100 $ 871,556 7.2 %
Store weeks 3,362 3,389 (0.8 ) % 13,255 11,861 11.8 %
Comparable restaurant sales growth (1) (2.6 ) % (4.7 ) % (2.8 ) % (2.3 ) %
Average unit volume (2) $ 864 $ 893 (3.2 ) % $ 3,660 $ 3,823 (4.3 ) %
Restaurant operating costs (as a % of restaurant sales)
Cost of sales 33.3 % 35.7 % (240 ) bps 33.5 % 35.4 % (187 ) bps
Labor 29.5 % 29.7 % (26 ) bps 29.6 % 29.0 % 57 bps
Rent 2.3 % 2.0 % 25 bps 2.1 % 1.8 % 32 bps
Other operating 17.5 % 17.5 % 5 bps 17.0 % 16.8 % 26 bps
Total 82.6 % 84.9 % (237 ) bps 82.3 % 83.0 % (71 ) bps
Restaurant margins (3) 17.4 % 15.1 % 237 bps 17.7 % 17.0 % 71 bps
Franchise-owned restaurants
Franchise royalties and fees $ 2,076 $ 1,773 17.1 % $ 8,231 $ 8,905 (7.6 ) %
Store weeks 919 966 (4.9 ) % 3,613 4,007 (9.8 ) %
Comparable restaurant sales growth (1) (1.2 ) % (5.5 ) % (2.5 ) % (3.6 ) %
Average unit volume (2) $ 849 $ 860 (1.3 ) % $ 3,529 $ 3,618 (2.5 ) %
Pre-opening expense $ 1,402 $ 2,631 (46.7 ) % $ 5,813 $ 11,604 (49.9 ) %
Depreciation and amortization $ 10,340 $ 10,638 (2.8 ) % $ 41,822 $ 37,694 11.0 %
As a % of revenue 4.5 % 4.5 % 1 bps 4.4 % 4.3 % 16 bps
Impairment and closure $ 3,273 $ 1,398 134.1 % $ 3,000 $ 2,175 37.9 %
As a % of revenue 1.4 % 0.6 % 84 bps 0.3 % 0.2 % 7 bps
General and administrative expenses $ 11,512 $ 11,223 2.6 % $ 47,430 $ 43,808 8.3 %
As a % of revenue 5.1 % 4.8 % 27 bps 5.0 % 5.0 % 6 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. Q4 2008 and 2008 YTD were adjusted to include 13 and 52 weeks, respectively. For comparative purposes, average unit volumes for Q4 2008 and 2008 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).

Amounts may not foot due to rounding.

SOURCE: Texas Roadhouse, Inc.


Texas Roadhouse, Inc.
Investor Relations
Price Cooper, 502-515-7300
or
Media
Travis Doster, 502-638-5457

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