UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)  February 23, 2015

 

TEXAS ROADHOUSE, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

000-50972

 

20-1083890

(State or other jurisdiction

 

(Commission

 

(IRS Employer

of incorporation)

 

File Number)

 

Identification No.)

 

6040 Dutchmans Lane, Louisville, KY

 

40205

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code  (502) 426-9984

 

N/A

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o              Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o              Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o              Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o              Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

ITEM 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On February 23, 2015, Texas Roadhouse, Inc. (the “Company”) issued a press release announcing its financial results for the quarter and year ended December 30, 2014.  Attached to this Current Report on Form 8-K as Exhibit 99.1 is a copy of the press release.

 

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

 

(d)                                 EXHIBITS

 

99.1                         Press Release issued by the company on February 23, 2015.

 

The information in this Current Report on Form 8-K at Item 2.02 and the Exhibit attached hereto shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.  Such information will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.

 

2



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

TEXAS ROADHOUSE, INC.

 

 

 

 

 

 

Date: February 23, 2015

By:

/s/ Scott M. Colosi

 

 

Scott M. Colosi

 

 

President and Chief Financial Officer

 

3



 

INDEX TO EXHIBITS

 

Exhibit No.

 

 

 

 

 

99.1

 

Press Release issued by the Company on February 23, 2015.

 

4




Exhibit 99.1

 

Texas Roadhouse, Inc. Announces Fourth Quarter 2014 Results

Increases Quarterly Dividend 13% to $0.17 per Share

 

LOUISVILLE, KY. (February 23, 2015) — 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 companyowned 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.

 

# # #

 

Contacts:

 

Investor Relations

Tonya Robinson

502-515-7269

 

Media

Travis Doster

502-638-5457

 



 

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 has been adjusted 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.

 


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