The Cheesecake Factory Incorporated (NASDAQ: CAKE) today
reported financial results for the third quarter of fiscal 2015,
which ended on September 29, 2015.
Total revenues were $526.7 million in the third quarter of
fiscal 2015 as compared to $499.1 million in the prior year third
quarter. Net income and diluted net income per share were $26.2
million and $0.52, respectively, in the third quarter of fiscal
2015.
The Company recorded a pre-tax, non-cash charge of $6.0 million
related to the impairment of RockSugar Pan Asian Kitchen during the
third quarter of fiscal 2015. Excluding this item, net income was
$29.8 million and diluted net income per share was $0.59.
Operating Results
Comparable restaurant sales at The Cheesecake Factory
restaurants increased 2.2% in the third quarter of fiscal 2015.
“The consistency of our results continues to be evident as we
delivered our 23rd consecutive quarter of positive comparable
sales. We successfully lapped our most difficult sales comparison
of the year and continued to exceed the performance of the casual
dining industry overall during this past quarter,” said David
Overton, Chairman and Chief Executive Officer.
“We experienced similar cost dynamics to the second quarter,
with favorability in costs that affected our results last year
helping to offset some of the wage inflation that many restaurants
and retailers are experiencing. Our solid sales growth combined
with healthy four-wall and total operating margin expansion drove
earnings per share growth in excess of 20 percent. As we look ahead
to 2016, we remain focused on the long-term drivers of our business
– innovation, hospitality and operational excellence – and are
firmly committed to utilizing our capital to produce the highest
returns and maximize total shareholder return,” concluded
Overton.
Development
The Company continues to expect to open as many as 11
Company-owned restaurants domestically in fiscal 2015. During the
remainder of the fourth quarter, the Company expects to open five
restaurants, one of which is scheduled to open this week.
Internationally, the Company anticipates as many as three
restaurants will open in the Middle East and Mexico under licensing
agreements in fiscal 2015, consistent with its prior expectations.
Year to date, one international location has opened in Mexico.
Capital Allocation
The Company’s Board of Directors declared a quarterly cash
dividend of $0.20 per share on the Company’s common stock. The
dividend is payable on November 23, 2015 to shareholders of record
at the close of business on November 9, 2015.
During the third quarter of fiscal 2015, the Company repurchased
59,522 shares of its common stock at a cost of $3.2 million. Year
to date, the Company repurchased 1.8 million shares of its common
stock at a cost of $87.4 million. The Company repaid the balance on
its revolving credit facility in the third quarter of fiscal 2015,
earlier than planned, and exited the quarter with no funded debt on
its balance sheet.
Conference Call and Webcast
The Company will hold a conference call to review its results
for the third quarter of fiscal 2015 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 November 26, 2015.
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, through its subsidiaries, owns and operates
195 full-service, casual dining restaurants throughout the U.S.A.
and Puerto Rico, including 182 restaurants under The Cheesecake
Factory® mark; 12 restaurants under the Grand Lux Cafe® mark; and
one restaurant under the RockSugar Pan Asian Kitchen® mark.
Internationally, nine The Cheesecake Factory® restaurants operate
under licensing agreements. The Company’s bakery division operates
two bakery production facilities, in Calabasas Hills, CA and Rocky
Mount, NC, that produce quality cheesecakes and other baked
products for its restaurants, international licensees and
third-party bakery customers. In 2015, the Company was named to the
FORTUNE Magazine “100 Best Companies to Work For®” list for the
second consecutive year. To learn more about the Company, visit
www.thecheesecakefactory.com.
FORTUNE and 100 Best Companies to Work For® are registered
trademarks of Time Inc. and are used under license. From FORTUNE
Magazine, March 15, 2015 ©2015 Time Inc. FORTUNE and Time Inc. are
not affiliated with, and do not endorse products or services of,
The Cheesecake Factory Incorporated.
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: consistently
deliver dependable comparable sales increases over a sustained
period of time; outperform the casual dining industry; leverage
sales increases and manage flow through to increase its
restaurant-level margins; manage expenses to expand operating
margins; deliver earnings per share growth; continue to execute on
its strategy focused on innovation, hospitality and operational
excellence; utilize capital effectively and achieve an acceptable
level of returns; maximize total shareholder return. In addition,
forward-looking statements made in the press release include
uncertainties related to: 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
39 Weeks Ended 39 Weeks Ended
Consolidated Statements of Operations September
29, 2015 September 30, 2014 September 29, 2015
September 30, 2014
Amounts
Percent
ofRevenue
Amounts
Percent
ofRevenue
Amounts
Percent
ofRevenue
Amounts
Percent
ofRevenue
Revenues $ 526,688 100.0 % $
499,114 100.0 % $ 1,573,768
100.0 % $ 1,476,951 100.0
% Costs and expenses: Cost of sales
125,605 23.9 % 124,028 24.9
% 378,840 24.1 % 364,057
24.7 % Labor expenses 172,101
32.7 % 163,279 32.7 %
511,765 32.5 % 483,506 32.7
% Other operating costs and expenses 128,427
24.4 % 123,095 24.7 %
375,537 23.9 % 358,305 24.3
% General and administrative expenses 33,277
6.3 % 29,641 5.9 %
101,697 6.5 % 89,925 6.1
% Depreciation and amortization expenses
21,317 4.0 % 20,930 4.2 %
63,652 4.0 % 61,715 4.2 %
Impairment of assets and lease terminations 6,011
1.1 % - - 6,011 0.4
% 696 - Preopening costs 4,306
0.8 % 3,966
0.8 % 9,815 0.6 %
8,808 0.6 % Total costs and
expenses 491,044 93.2 %
464,939 93.2 %
1,447,317 92.0 %
1,367,012 92.6 % Income from
operations 35,644 6.8 % 34,175
6.8 % 126,451 8.0 %
109,939 7.4 % Interest and other
(expense)/income, net (722 ) (0.2
)% (1,381 ) (0.2
)% (4,049 ) (0.2 )%
(4,316 ) (0.2 )% Income
before income taxes 34,922 6.6 %
32,794 6.6 % 122,402 7.8
% 105,623 7.2 % Income tax
provision 8,746 1.6 %
8,571 1.7 % 33,079
2.1 % 28,833 2.0
% Net income $ 26,176 5.0
% $ 24,223 4.9 %
$ 89,323 5.7 % $
76,790 5.2 % Basic net income
per share $ 0.54 $ 0.49
$ 1.83 $ 1.55 Basic
weighted average shares outstanding 48,848
48,981 48,841
49,690 Diluted net income per share
$ 0.52 $ 0.48 $
1.76 $ 1.48 Diluted weighted
average shares outstanding 50,637
50,963 50,660
51,722 Selected Segment Information
Revenues: The Cheesecake Factory restaurants $
481,076 $ 454,271 $ 1,437,178
$ 1,342,331 Other 45,612
44,843 136,590
134,620 $ 526,688 $
499,114 $ 1,573,768 $
1,476,951 Income from operations:
The Cheesecake Factory restaurants (1) $ 67,473
$ 59,214 $ 211,466 $
182,250 Other (2) (725 ) 2,418
10,601 11,433 Corporate (31,104
) (27,457 ) (95,616
) (83,744 ) $ 35,644
$ 34,175 $ 126,451
$ 109,939
Selected Consolidated Balance Sheet
Information
September 29, 2015
December 30, 2014
Cash and cash equivalents $ 29,607 $
58,018 Total assets 1,175,856 1,176,452
Total liabilities 596,317 619,942
Stockholders' equity 579,539 556,510
13 Weeks Ended 13 Weeks Ended 39 Weeks Ended
39 Weeks Ended Supplemental Information
September 29, 2015 September 30, 2014 September
29, 2015 September 30, 2014 The Cheesecake Factory
comparable restaurant sales 2.2 % 2.1
% 3.0 % 1.6 % Restaurants
opened during period 2 2 5 5
Restaurants open at period-end 194 184
194 184 Restaurant operating weeks
2,505 2,383 7,428 7,085
(1) Includes $696 in the 39 weeks ended September 30, 2014 of
lease termination expenses related to the relocation of one The
Cheesecake Factory restaurant.(2) Includes $6.0 million in the 13
and 39 weeks ended September 29, 2015 of impairment expense related
to RockSugar Pan Asian Kitchen.
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 of 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 39 Weeks Ended 39 Weeks Ended September
29, 2015 September 30, 2014 September 29, 2015
September 30, 2014 (unaudited; in thousands, except per
share data) Net income (GAAP) $ 26,176
$ 24,223 $ 89,323 $
76,790 After-tax impact from:
- Impairment of assets and lease
terminations (1)
3,607
-
3,607
418 Net income (non-GAAP) $ 29,783
$ 24,223 $ 92,930 $
77,208 Diluted net income per share (GAAP)
$ 0.52 $ 0.48 $ 1.76
$ 1.48 After-tax impact from:
- Impairment of assets and lease
terminations
0.07 - 0.07 0.01
Diluted net income per share (non-GAAP)
$
0.59
$ 0.48 $ 1.83 $ 1.49
(1) The pre-tax amount associated with the item in fiscal 2015
was $6.0 million. The pre-tax amount associated with the item in
fiscal 2014 was $696.
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version on businesswire.com: http://www.businesswire.com/news/home/20151026006336/en/
The Cheesecake Factory IncorporatedJill Peters, (818)
871-3000investorrelations@thecheesecakefactory.com
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