Increases Quarterly Dividend 13% to $0.17
per Share
Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced
financial results for the 13 and 52 week periods ended December 30,
2014.
Fourth Quarter Year to Date ($000's)
2014
2013
% Change
2014
2013
% Change
Total revenue $ 404,425 $ 376,020 8 $ 1,582,148 $ 1,422,585
11 Income from operations 27,043 26,054 4 130,449 119,715 9 Net
income 18,595 17,119 9 87,022 80,423 8 Diluted EPS $0.26 $0.24 11
$1.23 $1.13 9
NOTE: Fourth quarter and full year 2014 results include 13 and
52 weeks, respectively, compared to 14 and 53 weeks in the fourth
quarter and full year of 2013.
Results for the fourth quarter included the following
highlights:
- Diluted earnings per share increased
10.9% to $0.26 from $0.24 in the prior year. Diluted earnings per
share in the prior year period was positively impacted by an
estimated $0.03 to $0.04 as a result of the 14th week;
- Comparable restaurant sales increased
7.0% at company restaurants and 5.7% at franchise restaurants on a
comparable 13-week basis;
- Seven Texas Roadhouse and two Bubba’s
33 company-owned restaurants were opened, along with five Texas
Roadhouse franchise-owned restaurants;
- Restaurant margin, as a percentage of
restaurant sales, decreased 47 basis points to 16.5%, primarily due
to food cost inflation of approximately 4.5%;
- Income tax rate decreased 156 basis
points to 27.7%, primarily due to the retroactive reinstatement of
certain federal tax credits during the current year quarter;
and
- The Company repurchased 100,000 shares
of its common stock for $2.8 million.
Results for the full year included the following highlights:
- Diluted earnings per share increased
9.4% to $1.23 from $1.13 in the prior year. Diluted earnings per
share in the prior year was positively impacted by an estimated
$0.03 to $0.04 as a result of the 53rd week;
- Comparable restaurant sales increased
4.7% at company restaurants and 4.9% at franchise restaurants on a
comparable 52-week basis;
- 22 Texas Roadhouse and two Bubba’s 33
company-owned restaurants were opened along with six
franchise-owned restaurants;
- Restaurant margin, as a percentage of
restaurant sales, decreased 26 basis points to 17.6%;
- Income tax rate increased 112 basis
points to 30.0%, primarily due to the retroactive reinstatement of
certain federal tax credits in 2013; and
- The Company repurchased 1,675,000
shares of its common stock for $42.7 million.
Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc.,
commented, "We are very pleased with our 2014 results and the fact
that we achieved our fifth consecutive year of positive comparable
restaurant sales growth. We reported double digit revenue growth
and strong diluted earnings per share growth for the year, despite
continued commodity cost pressures and the impact of lapping an
extra week last year. At the same time, our healthy balance sheet
and cash flow enabled us to return $74.1 million of capital to
shareholders through share repurchases and quarterly dividend
payments."
Taylor continued, "Looking ahead to 2015, our development
pipeline is in great shape and we expect to open 25 to 30 company
restaurants, as well as four to six franchise restaurants. Although
we expect to face continued cost pressures in the near term, we
remain excited by the ongoing momentum in our top-line and will
continue to focus on our long-term brand positioning and growth
potential."
2015 Outlook
The Company reported that comparable restaurant sales at company
restaurants for the first seven weeks of fiscal 2015 increased
approximately 12% compared to the prior year period.
Management reiterated the following expectations for 2015:
- Positive comparable restaurant sales
growth; and
- 25 to 30 company restaurant openings,
including as many as five Bubba's 33 restaurants.
Management updated the following expectations for 2015:
- Food cost inflation of 3% to 4%;
- An income tax rate of approximately
30.0% to 31.0% depending on the reinstatement of certain federal
tax credits; and
- Total capital expenditures of $135
million to $145 million.
Cash Dividend Payment
On February 18, 2015, the Company’s Board of Directors
authorized the payment of a quarterly cash dividend of $0.17 per
share of common stock. This payment, which will be distributed on
April 3, 2015 to shareholders of record at the close of business on
March 18, 2015, represents a 13% increase from the cash dividend of
$0.15 per share of common stock declared during each quarter of
2014.
Conference Call
The Company is hosting a conference call today, February 23,
2015 at 5:00 p.m. Eastern Time to discuss these results. The
dial-in number is (877) 719-9791 or (719) 325-4765 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 7805752 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 450 restaurants system-wide in 49
states and four foreign countries. 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; our ability to continue to generate the
necessary cash flows to fund our new restaurant growth, continue
our share repurchase program and pay a quarterly cash dividend;
strength of consumer spending; pending or future legal claims;
conditions beyond our control such as weather, natural disasters,
disease outbreaks, epidemics or pandemics impacting our customers
or food supplies; acts of war or terrorism and other factors
disclosed from time to time in our filings with the U.S. Securities
and Exchange Commission. Investors should take such risks into
account when making investment decisions. Shareholders 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. We undertake 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 and 14 Weeks Ended 52 and 53 Weeks Ended
December 30,
2014
December 31,
2013
December 30,
2014
December 31,
2013
Revenue: Restaurant sales $ 400,790 $ 372,879 $ 1,568,556 $
1,410,118 Franchise royalties and fees 3,635 3,141
13,592 12,467 Total revenue
404,425 376,020 1,582,148
1,422,585 Costs and expenses: Restaurant operating
costs (excluding depreciation and amortization shown separately
below): Cost of sales 143,592 130,972 553,144 492,306 Labor 116,744
109,007 459,119 411,394 Rent 8,624 7,588 33,174 28,978 Other
operating 65,848 62,166 246,339 224,882 Pre-opening 5,775 6,081
18,452 17,891 Depreciation and amortization 15,497 14,698 59,179
51,562 Impairment and closure 626
212
636 399 Gain on sale of other concept - (1,800 ) (1,800 ) General
and administrative 20,676 21,042 81,656
77,258 Total costs and expenses 377,382
349,966 1,451,699 1,302,870
Income from operations 27,043 26,054 130,449 119,715
Interest expense, net 520 514 2,084 2,201
Equity income from investments in
unconsolidated affiliates
627
142 1,602 713 Income
before taxes 27,150 25,682 129,967 118,227 Provision for income
taxes 7,528 7,523 38,990 34,140
Net income including noncontrolling interests $
19,622 $ 18,159 $ 90,977 $ 84,087 Less: Net income attributable to
noncontrolling interests 1,027 1,040
3,955 3,664 Net income attributable to Texas
Roadhouse, Inc. and subsidiaries $ 18,595 $ 17,119 $ 87,022
$ 80,423
Net income per common share attributable
to Texas Roadhouse, Inc. and subsidiaries:
Basic $ 0.27 $ 0.24 $ 1.25 $ 1.15 Diluted $ 0.26 $
0.24 $ 1.23 $ 1.13 Weighted average shares
outstanding: Basic 69,500 70,581 69,719
70,089 Diluted 70,359 71,813
70,608 71,362
Texas
Roadhouse, Inc. and Subsidiaries Condensed Consolidated
Balance Sheets (in thousands) (unaudited)
(As Adjusted) (1) December 30, 2014 December 31, 2013
Cash and cash equivalents $ 86,122 $ 94,874 Other
current assets 61,604 50,869 Property and equipment, net 649,637
586,212 Goodwill 116,571 117,197 Intangible assets, net 6,203 7,876
Other assets 23,005 20,616 Total assets $ 943,142 $
877,644 Current maturities of long-term debt 129 243
Other current liabilities 215,842 175,609 Long-term debt, excluding
current maturities 50,693 50,990 Other liabilities 61,522 56,942
Texas Roadhouse, Inc. and subsidiaries stockholders' equity 607,892
587,659 Noncontrolling interests 7,064 6,201 Total
liabilities and equity $ 943,142 $ 877,644
(1)
December 31, 2013 revised to reflect the
impact of adjustments to purchase price accounting related to 2013
acquisitions in accordance with generally accepted accounting
principles ("GAAP").
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (in
thousands) (unaudited) 52
and 53 Weeks Ended December 30, 2014 December 31, 2013
Cash flows from operating activities: Net
income including noncontrolling interests $ 90,977 $ 84,087
Adjustments to reconcile net income to net cash provided by
operating activities Depreciation and amortization 59,179 51,562
Share-based compensation expense 14,883 14,740 Other noncash
adjustments 4,078 1,142 Change in working capital 22,596
22,305 Net cash provided by operating
activities 191,713 173,836
Cash flows from investing activities: Capital expenditures -
property and equipment (125,445 ) (111,478 ) Investment in
unconsolidated affiliates - (1,180 ) Proceeds from sale of other
concept, net - 1,387 Proceeds from sale of property and equipment,
including insurance proceeds 1,205 23
Net cash used in investing activities (124,240 )
(111,248 )
Cash flows from financing activities:
Repurchase shares of common stock (42,744 ) (12,761 ) Dividends
paid (31,333 ) (46,877 ) Other financing activities (2,148 )
10,178 Net cash used in financing activities
(76,225 ) (49,460 ) Net (decrease) increase in cash
and cash equivalents (8,752 ) 13,128 Cash and cash equivalents -
beginning of period 94,874 81,746 Cash
and cash equivalents - end of period $ 86,122 $ 94,874
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information ($
amounts in thousands, except weekly sales by group)
(unaudited)
Fourth Quarter Change Year to Date Change
2014
2013
vs LY
2014
2013
vs LY
Restaurant openings Company - Texas Roadhouse 7 12 (5 ) 22
25 (3 ) Company - Bubba's 33 2 0 2 2 1 1 Company - Other 1 0 1 1 0
1 Franchise - Texas Roadhouse 5 1 4 6 4 2 Total 15 13 2 31 30 1
Restaurant acquisitions/dispositions Company - Texas
Roadhouse 1 2 (1 ) 1 2 (1 ) Company - Bubba's 33 0 0 0 0 0 0
Company - Other 0 (2 ) 2 0 (2 ) 2 Franchise - Texas Roadhouse (1 )
(2 ) 1 (1 ) (2 ) 1 Total 0 (2 ) 2 0 (2 ) 2 Restaurants open
at the end of the quarter Company - Texas Roadhouse 368 345 23
Company - Bubba's 33 3 1 2 Company - Other 1 0 1 Franchise - Texas
Roadhouse 79 74 5 Total 451 420 31 Company-owned restaurants
Restaurant sales $ 400,790 $ 372,879 7.5 % $ 1,568,556 $ 1,410,118
11.2 % Store weeks 4,766 4,744 0.5 % 18,565 17,426 6.5 % Comparable
restaurant sales growth (1) 7.0 % 2.1 % 4.7 % 3.4 % Texas Roadhouse
restaurants only: Comparable restaurant sales growth (1) 7.0 2.1
4.7 3.4 % Average unit volume (2) $ 1,083 $ 1,015 6.7 % $ 4,355 $
4,186 4.0 % Weekly sales by group: Comparable restaurants (324
units) $ 83,563 Average unit volume restaurants (28 units) (3) $
80,659 Restaurants less than 6 months old (16 units) $ 102,811
Restaurant operating costs (as a % of restaurant sales) Cost
of sales 35.8 % 35.1 % 70 bps 35.3 % 34.9 % 35 bps Labor 29.1 %
29.2 % (11 ) bps 29.3 % 29.2 % 10 bps Rent 2.2 % 2.0 % 12 bps 2.1 %
2.1 % 6 bps Other operating 16.4 % 16.7 % (24 ) bps 15.7 % 15.9 %
(24 ) bps Total 83.5 % 83.1 % 47 bps 82.4 % 82.1 % 26 bps
Restaurant margin (4) 16.5 % 16.9 % (47 ) bps 17.6 % 17.9 % (26 )
bps Restaurant margin ($ in thousands) $ 65,982 $ 63,148 4.5 % $
276,782 $ 252,559 9.6 % Restaurant margin $/Store week $ 13,844 $
13,311 4.0 % $ 14,909 $ 14,493 2.9 % Franchise-owned
restaurants Franchise royalties and fees $ 3,635 $ 3,141 15.7 % $
13,592 $ 12,467 9.0 % Store weeks 998 1,051 (5.0 ) % 3,910 3,937
(0.7 ) % Comparable restaurant sales growth (1) 5.7 % 4.5 % 4.9 %
4.3 % Average unit volume (2) $ 1,171 $ 1,094 7.0 % $ 4,627 $ 4,346
6.5 % Pre-opening expense $ 5,775 $ 6,081 (5.0 ) % $ 18,452
$ 17,891 3.1 % Depreciation and amortization $ 15,497 $
14,698 5.4 % $ 59,179 $ 51,562 14.8 % As a % of revenue 3.8 % 3.9 %
(8 ) bps 3.7 % 3.6 % 12 bps General and administrative
expenses $ 20,676 $ 21,042 (1.7 ) % $ 81,656 $ 77,258 5.7 % As a %
of revenue 5.1 % 5.6 % (48 ) bps 5.2 % 5.4 % (27 ) bps (1)
Comparable restaurant sales growth reflects the change in
year-over-year sales for restaurants open a full 18 months before
the beginning of the period measured, excluding sales from
restaurants closed during the period. (2) Average unit
volume includes sales from Texas Roadhouse restaurants open for a
full six months before the beginning of the period measured,
excluding any sales at restaurants closed during the period. Q4
2013 and 2013 YTD were adjusted to include 13 and 52 weeks,
respectively. (3) Average unit volume restaurants include
restaurants open a full six to 18 months before the beginning of
the period measured. (4) Restaurant margin represents
restaurant sales less cost of sales, labor, rent and other
operating costs (as a percentage of restaurant sales). Restaurant
margin is widely regarded in the restaurant industry as a useful
metric by which to evaluate restaurant-level operating efficiency
and performance. Restaurant margin is not a measurement determined
in accordance with GAAP and should not be considered in isolation,
or as an alternative, to income from operations or other similarly
titled measures of other companies. Amounts may not foot due
to rounding.
Texas Roadhouse, Inc.Investor Relations:Tonya Robinson,
502-515-7269orMedia:Travis Doster, 502-638-5457
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