TXRH Texas Roadhouse Inc

Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 week period ended March 29, 2016.

      First Quarter ($000's)

2016

   

2015

   

% Change

  Total revenue $ 515,559 $ 460,230 12 Income from operations 52,811 48,600 9 Net income 35,593 32,292 10 Diluted EPS $ 0.50 $ 0.46 10  

Results for the first quarter included the following highlights:

• Comparable restaurant sales growth of 4.6% at company restaurants and 3.1% at franchise restaurants;
• Restaurant margin, as a percentage of restaurant sales, increased 116 basis points to 20.1%, primarily driven by lower food costs;
• Diluted earnings per share increased 9.8% to $0.50 from $0.46 in the prior year;
• The Company recorded a pre-tax charge of $5.5 million ($3.4 million after-tax) related to a pending legal settlement which had a $0.05 impact on diluted earnings per share and a 10.0% impact on diluted earnings per share growth;
• Seven company-owned restaurants were opened, including two Bubba’s 33 restaurants; and,
• The Company repurchased 114,700 shares of its common stock for $4.1 million.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We are pleased that our top-line momentum continued in the first quarter, driven by solid traffic growth. Strong comp sales, along with commodity deflation driven by lower beef costs helped us deliver near double digit earnings growth this quarter. As of today, we have opened ten company restaurants, as well as two international franchise openings, including our first in the Philippines. Beyond restaurant development, our balance sheet and cash flow remain healthy and we believe we are well-positioned for long-term growth."

2016 Outlook

The Company reported that comparable restaurant sales growth at company restaurants for the first four weeks of its second quarter of fiscal 2016 was approximately 5.1% compared to the prior year period.

Management reiterated the following expectations for 2016:

• Positive comparable restaurant sales growth;
• Approximately 30 company restaurant openings, including approximately seven Bubba’s 33 restaurants;
• 1.0% to 2.0% food cost deflation;
• An income tax rate of approximately 30.0%; and,
• Total capital expenditures of $165.0 million to $175.0 million.

Conference Call

The Company is hosting a conference call today, May 2, 2016 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 675-4756 or (719) 325-4940 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 4379719 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 495 restaurants system-wide in 49 states and five 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; breaches of security; conditions beyond our control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting our customers or food supplies; food safety and food borne illness concerns; 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 Weeks Ended March 29, 2016   March 31, 2015   Revenue: Restaurant sales $ 511,284 $ 456,293 Franchise royalties and fees   4,275   3,937   Total revenue   515,559   460,230   Costs and expenses: Restaurant operating costs (excluding depreciation and amortization shown separately below):   Cost of sales 173,128 159,980 Labor 147,546 131,404 Rent 10,027 8,979 Other operating 77,612 69,317 Pre-opening 4,825 3,818 Depreciation and amortization 19,539 16,335 Impairment and closure 11 - General and administrative   30,060   21,797   Total costs and expenses   462,748   411,630   Income from operations 52,811 48,600   Interest expense, net 305 515

Equity income from investments in unconsolidated affiliates

  352   372   Income before taxes 52,858 48,457 Provision for income taxes   15,857   14,876   Net income including noncontrolling interests $ 37,001 $ 33,581 Less: Net income attributable to noncontrolling interests   1,408   1,289 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 35,593 $ 32,292  

Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:

Basic $ 0.51 $ 0.46 Diluted $ 0.50 $ 0.46   Weighted average shares outstanding: Basic   70,169   69,841 Diluted   70,764   70,528               Texas Roadhouse, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) (unaudited)           March 29, 2016 December 29, 2015     Cash and cash equivalents $ 95,992 $ 59,334 Other current assets 51,218 74,479 Property and equipment, net 766,331 751,288 Goodwill 116,571 116,571 Intangible assets, net 4,488 4,827 Other assets 27,014 26,207     Total assets $ 1,061,614 $ 1,032,706     Current maturities of long-term debt 147 144 Other current liabilities 233,097 256,498 Long-term debt, excluding current maturities 50,512 25,550 Other liabilities 78,566 73,332 Texas Roadhouse, Inc. and subsidiaries stockholders' equity 691,537 669,662 Noncontrolling interests 7,755 7,520     Total liabilities and equity $ 1,061,614 $ 1,032,706               Texas Roadhouse, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)               13 Weeks Ended March 29, 2016 March 31, 2015     Cash flows from operating activities: Net income including noncontrolling interests $ 37,001 $ 33,581 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 19,539 16,335 Share-based compensation expense 5,788 4,904 Other noncash adjustments 802 (41 ) Change in working capital   1,758     2,913   Net cash provided by operating activities   64,888     57,692     Cash flows from investing activities: Capital expenditures - property and equipment (34,179 ) (33,437 ) Proceeds from sale of property and equipment, including insurance proceeds   -     9   Net cash used in investing activities   (34,179 )   (33,428 )   Cash flows from financing activities: Proceeds from revolving credit facility 25,000 - Repurchase shares of common stock (4,110 ) - Dividends paid (11,919 ) (10,443 ) Other financing activities   (3,022 )   (1,431 ) Net cash provided by (used in) financing activities   5,949     (11,874 )   Net increase in cash and cash equivalents 36,658 12,390 Cash and cash equivalents - beginning of period   59,334     86,122   Cash and cash equivalents - end of period $ 95,992   $ 98,512                 Texas Roadhouse, Inc. and Subsidiaries Supplemental Financial and Operating Information ($ amounts in thousands, except weekly sales by group) (unaudited)             First Quarter     Change

2016

   

2015

vs LY

  Restaurant openings Company - Texas Roadhouse 5 2 3 Company - Bubba's 33 2 1 1 Company - Other 0 0 0 Franchise - Texas Roadhouse 1 0 1 Total 8 3 5   Restaurants open at the end of the quarter Company - Texas Roadhouse 397 370 27 Company - Bubba's 33 9 4 5 Company - Other 2 1 1 Franchise - Texas Roadhouse 83 79 4 Total 491 454 37   Company-owned restaurants Restaurant sales $ 511,284 $ 456,293 12.1

%

 

Store weeks 5,262 4,857 8.3

%

 

Comparable restaurant sales growth (1) 4.6 % 8.9 % Texas Roadhouse restaurants only: Comparable restaurant sales growth (1) 4.6 % 8.8 % Average unit volume (2) $ 1,270 $ 1,220 4.1

%

 

Weekly sales by group: Comparable restaurants (358 units) $ 98,156 Average unit volume restaurants (18 units) (3) $ 88,094 Restaurants less than 6 months old (21 units) $ 98,583   Restaurant operating costs (as a % of restaurant sales) Cost of sales 33.9 % 35.1 % (120 ) bps Labor 28.9 % 28.8 % 6 bps Rent 2.0 % 2.0 % (1 ) bps Other operating 15.2 % 15.2 % (1 ) bps Total 79.9 % 81.0 % (116 ) bps   Restaurant margin (4) 20.1 % 19.0 % 116 bps   Restaurant margin ($ in thousands) $ 102,970 $ 86,613 18.9

%

 

Restaurant margin $/Store week $ 19,569 $ 17,833 9.7

%

 

  Franchise-owned restaurants Franchise royalties and fees $ 4,275 $ 3,937 8.6

%

 

Store weeks 1,070 1,027 4.2

%

 

Comparable restaurant sales growth (1) 3.1 % 8.0 % Average unit volume (2) $ 1,317 $ 1,306 0.8

%

 

  Pre-opening expense $ 4,825 $ 3,818 26.4

%

 

  Depreciation and amortization $ 19,539 $ 16,335 19.6

%

 

As a % of revenue 3.8 % 3.5 % 24 bps   General and administrative expenses $ 30,060 $ 21,797 37.9

%

 

As a % of revenue 5.8 % 4.7 % 109 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. (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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Texas Roadhouse, Inc.Investor Relations:Tonya Robinson, 502-515-7269orMedia:Travis Doster, 502-638-5457