Company to Discuss Long-Term Strategy During
Today’s Conference Call
The Cheesecake Factory Incorporated (NASDAQ: CAKE) today
reported financial results for the fourth quarter of fiscal 2014,
which ended on December 30, 2014.
Total revenues were $499.7 million in the fourth quarter of
fiscal 2014 as compared to $475.1 million in the prior year fourth
quarter. Net income and diluted net income per share were $24.5
million and $0.48, respectively, in the fourth quarter of fiscal
2014.
Operating Results
Comparable restaurant sales at The Cheesecake Factory
restaurants increased 1.4% in the fourth quarter of fiscal
2014.
“We continued to achieve a consistent level of sales at our
existing Cheesecake Factory restaurants, with the fourth quarter
completing our fifth consecutive year of delivering positive
quarterly comparable sales. In addition, our newer restaurants
continue to outperform our Company average in sales per square
foot, which speaks to the strength of our brand and
multi-generational appeal,” said David Overton, Chairman and Chief
Executive Officer.
“Looking back on 2014, there were many high points during the
year, including our first restaurant opening in Mexico, continued
expansion in the Middle East and execution of a licensing agreement
for growth in Asia, in addition to a strong slate of domestic
openings. However, the operating environment was challenging and
the fourth quarter was another in which we were impacted by cost
pressures. As we look forward to this year and beyond, we believe
our future is bright with multiple opportunities for us to continue
our leadership in casual dining and continue to grow our Company
with the best talent in the industry to successfully execute our
strategy,” concluded Overton.
Development
The Company opened five new restaurants in the fourth quarter of
fiscal 2014, delivering on its objective to open 10 Company-owned
restaurants during fiscal 2014.
Internationally, one new Cheesecake Factory restaurant opened in
the Middle East in the fourth quarter of fiscal 2014, for a total
of four new international locations opened during the year under
licensing agreements.
In fiscal 2015, the Company continues to expect to open as many
as 11 Company-owned restaurants domestically. In addition, the
Company also continues to expect as many as four restaurants to
open in the Middle East and Mexico under licensing agreements.
Capital Allocation
In fiscal 2014, the Company repurchased 3.1 million shares of
its common stock at a cost of $140.5 million, including 3,232
shares repurchased in the fourth quarter of fiscal 2014. The
Company returned $170.8 million in cash to shareholders in fiscal
2014 in the form of share repurchases and dividends.
The Company’s Board of Directors declared a quarterly cash
dividend of $0.165 per share on the Company’s common stock. The
dividend is payable on March 10, 2015 to shareholders of record at
the close of business on February 25, 2015.
For fiscal 2015, the Company continues to expect that it will
return its free cash flow to shareholders in the form of share
repurchases and dividends.
Financial Reporting Dates for Fiscal 2015
The Company plans to announce quarterly financial results and
hold conference calls to discuss its results for the first three
quarters of fiscal 2015 as outlined below. The earnings press
releases will be issued at approximately 1:15 p.m. Pacific Time and
the conference calls will follow at 2:00 p.m. Pacific Time on the
same day. Dates and times could be subject to change.
Quarter
Ending
Earnings Release and
Conference Call Dates
March 31, 2015 April 22, 2015 June 30, 2015 July 22, 2015 September
29, 2015 October 21, 2015
Conference Call and Webcast
The Company will hold a conference call to review its results
for the fourth quarter of fiscal 2014 and discuss its long-term
strategy today at 2:00 p.m. Pacific Time. The conference call will
be webcast live on the Company’s website at
investors.thecheesecakefactory.com and a replay of the webcast will
be available through March 11, 2015. Supplemental material will be
made available on the Company’s website prior to the start of the
conference call.
About The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated created the upscale casual
dining segment in 1978 with the introduction of its namesake
concept. The Company operates 189 full-service, casual dining
restaurants throughout the U.S. and Puerto Rico, including 177
restaurants under The Cheesecake Factory® mark; 11 restaurants
under the Grand Lux Cafe® mark; and one restaurant under the
RockSugar Pan Asian Kitchen® mark. Internationally, eight The
Cheesecake Factory® restaurants operate under licensing agreements.
The Company also operates two bakery production facilities in
Calabasas Hills, CA and Rocky Mount, NC that produce quality
cheesecakes and other baked products. In 2014, the Company was
named to Fortune magazine’s “100 Best Companies to Work For” list.
To learn more about the Company, visit
thecheesecakefactory.com.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by forward-looking statements, including
uncertainties related to: the Company’s ability to deliver
consistent and dependable comparable sales results over a sustained
period of time; the Company’s ability to successfully open new
restaurants with sales performance above the Company’s average; the
Company’s ability to remain relevant to consumers, to maintain high
quality standards and provide guests with an exceptional
experience; the Company’s ability to operate efficiently and
effectively; the Company’s ability to expand its concepts
domestically and work with its licensees to expand its concept
internationally; the Company’s ability to execute its long-term
strategy; the Company’s ability to utilize its capital effectively
and increase shareholder value through dividends and share
repurchases; factors outside of the Company’s control that impact
consumer confidence and spending; current and future macroeconomic
conditions; acceptance and success of The Cheesecake Factory in
international markets; changes in unemployment rates; the economic
health of the Company’s landlords and other tenants in retail
centers in which its restaurants are located; the economic health
of suppliers, licensees, vendors and other third parties providing
goods or services to the Company; adverse weather conditions in
regions in which the Company’s restaurants are located; factors
that are under the control of government agencies, landlords and
other third parties; and other risks and uncertainties detailed
from time to time in the Company’s filings with the Securities and
Exchange Commission (“SEC”), as set forth below. Investors are
cautioned that forward-looking statements are not guarantees of
future performance and that undue reliance should not be placed on
such statements. Forward-looking statements speak only as of the
dates on which they are made and the Company undertakes no
obligation to publicly update or revise any forward-looking
statements or to make any other forward-looking statements, whether
as a result of new information, future events or otherwise, unless
required to do so by securities laws. Investors are referred to the
full discussion of risks and uncertainties associated with
forward-looking statements and the discussion of risk factors
contained in the Company’s latest Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K as
filed with the SEC, which are available at www.sec.gov.
The Cheesecake Factory Incorporated and
Subsidiaries Consolidated Financial Statements
(unaudited; in thousands, except per share and statistical
data) 13 Weeks Ended 13 Weeks
Ended 52 Weeks Ended 52 Weeks Ended
Consolidated Statements of Operations December 30,
2014 December 31, 2013 December 30, 2014
December 31, 2013
Amounts
Percent of
Revenue
Amounts
Percent of
Revenue
Amounts
Percent of
Revenue
Amounts
Percent of
Revenue
Revenues $ 499,673 100.0 %
$ 475,075 100.0 % $
1,976,624 100.0 % $ 1,877,910
100.0 % Costs and expenses: Cost of
sales 126,249 25.3 % 116,015
24.4 % 490,306 24.9 %
455,685 24.2 % Labor expenses
162,596 32.5 % 150,014 31.6
% 646,102 32.7 % 603,069
32.1 % Other operating costs and expenses
120,199 24.1 % 113,833 24.0
% 478,504 24.2 % 452,571
24.1 % General and administrative expenses
29,169 5.8 % 29,323 6.2 %
119,094 6.0 % 114,728 6.1
% Depreciation and amortization expenses
21,120 4.2 % 20,452 4.3 %
82,835 4.2 % 78,558 4.2 %
Impairment of assets and lease terminations -
0.0 % (3,807 ) (0.8 )%
696 0.0 % (561 ) (0.0
)% Preopening costs 5,548
1.1 % 4,879
1.0 % 14,356 0.7
% 12,906 0.7 %
Total costs and expenses 464,881
93.0 % 430,709
90.7 % 1,831,893
92.7 % 1,716,956
91.4 % Income from operations 34,792
7.0 % 44,366 9.3 %
144,731 7.3 % 160,954 8.6
% Interest and other (expense)/income, net
(1,871 ) (0.4 )%
(1,196 ) (0.2 )%
(6,187 ) (0.3 )%
(4,504 ) (0.3 )% Income
before income taxes 32,921 6.6 %
43,170 9.1 % 138,544 7.0
% 156,450 8.3 % Income tax
provision 8,435 1.7
% 10,170 2.2
% 37,268 1.9 %
42,094 2.2 % Net
income $ 24,486 4.9
% $ 33,000 6.9
% $ 101,276 5.1 %
$ 114,356 6.1 %
Basic net income per share $ 0.50
$ 0.64 $ 2.04 $
2.19 Basic weighted average shares outstanding
49,198 51,352
49,567 52,229 Diluted
net income per share $ 0.48 $
0.62 $ 1.96 $ 2.10
Diluted weighted average shares outstanding
51,207 53,604
51,584 54,377 Selected
Segment Information Revenues: The Cheesecake Factory
restaurants $ 450,465 $ 425,556
$ 1,792,796 $ 1,688,036 Other
49,208 49,519
183,828 189,874 $
499,673 $ 475,075 $
1,976,624 $ 1,877,910
Income from operations: The Cheesecake Factory
restaurants $ 58,524 $ 66,589
$ 240,774 $ 250,230 Other
3,550 5,652 14,983 19,985
Corporate (27,282 )
(27,875 ) (111,026 )
(109,261 ) $ 34,792 $
44,366 $ 144,731 $
160,954
Selected Consolidated Balance Sheet
Information
December 30, 2014
December 31, 2013
Cash and cash equivalents $ 58,018 $
61,751 Total assets 1,176,452 1,124,114
Total liabilities 619,942 546,761
Stockholders' equity 556,510 577,353
13 Weeks Ended 13 Weeks Ended 52 Weeks Ended
52 Weeks Ended Supplemental Information
December 30, 2014 December 31, 2013 December 30,
2014 December 31, 2013 The Cheesecake Factory
comparable restaurant sales 1.4 % 1.1
% 1.5 % 1.1 % Restaurants
opened during period 5 6 10 9
Restaurants open at period-end 189 180
189 180 Restaurant operating weeks
2,425 2,315 9,510 9,156
Reconciliation of Non-GAAP Results to GAAP Results
In addition to the results provided in accordance with Generally
Accepted Accounting Principles ("GAAP") in this press release, the
Company is providing non-GAAP measurements which present net income
and diluted net income per share excluding the impact from certain
items.
The non-GAAP measurements are intended to supplement the
presentation of the Company’s financial results in accordance with
GAAP. The Company believes that the presentation of these items
provides additional information to facilitate the comparison of
past and present financial results.
13 Weeks Ended 13 Weeks Ended
52 Weeks Ended 52 Weeks Ended
December 30, 2014 December 31, 2013 December 30,
2014 December 31, 2013 (unaudited; in thousands,
except per share data) Net income (GAAP)
$
24,486
$
33,000
$ 101,276 $ 114,356 After-tax impact
from: - Impairment of assets and lease terminations (1)
-
(2,284 ) 418 (337
) Net income (non-GAAP)
$
24,486
$ 30,716 $ 101,694 $
114,019 Diluted net income per share
(GAAP)
$
0.48
$
0.62
$
1.96
$
2.10
After-tax impact from:
- Impairment of assets and lease
terminations (1)
-
(0.04 ) 0.01 (0.01
) Diluted net income per share (non-GAAP) (2)
$
0.48
$ 0.57 $ 1.97 $
2.10
(1)
The pre-tax amounts associated with these
items in fiscal 2014 were $510 in the second quarter and $186 in
the first quarter. The pre-tax amounts associated with these
items in fiscal 2013 were $(3,807) in the fourth quarter, $1,097 in
the third quarter, $1,505 in the second quarter and $644 in the
first quarter. All items were recorded in impairment of assets
and lease terminations.
(2)
Diluted net income per share may not add
due to rounding.
The Cheesecake Factory IncorporatedJill Peters,
818-871-3000investorrelations@thecheesecakefactory.com
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