Texas Roadhouse, Inc. Announces First Quarter 2017 Results
May 01 2017 - 3:03PM
Texas Roadhouse, Inc. (Nasdaq:TXRH), today announced financial
results for the 13-week period ended March 28, 2017.
|
|
First Quarter |
($000's) |
|
2017 |
|
2016 |
|
% Change |
|
|
|
|
|
|
Total
revenue |
$ |
567,686 |
|
$ |
515,559 |
|
10% |
Income from
operations |
49,022 |
52,811 |
|
(7%) |
Net
income |
34,313 |
35,593 |
|
(4%) |
Diluted
EPS |
$ |
0.48 |
|
$ |
0.50 |
|
(4%) |
|
|
|
|
|
|
Results for the first quarter included the
following highlights:
- Comparable restaurant sales increased 3.1% at company
restaurants and 3.8% at domestic franchise restaurants;
- Restaurant margin, as a percentage of restaurant sales,
decreased 21 basis points to 19.9%, primarily driven by wage rate
inflation, partially offset by the benefit of lower food
costs;
- Results for the quarter included a pre-tax charge of $14.9
million ($9.2 million after-tax), or $0.13 per diluted share,
related to a previously disclosed legal matter which was settled
during March 2017. The impact of the legal charge was
partially offset by a pre-tax charge recorded in the first quarter
of 2016 of $5.5 million ($3.4 million after-tax) related to a
separate legal matter which had an impact of $0.05 on diluted
earnings per share in that quarter;
- Diluted earnings per share decreased 4.4% to $0.48 from $0.50
in the prior year; and,
- Six company-owned restaurants and two franchise restaurants
were opened.
Kent Taylor, Chief Executive Officer of Texas
Roadhouse, Inc., commented, "We are pleased with our top-line
momentum and operating performance in the first quarter of 2017
with positive comparable restaurant sales and traffic growth, which
continued through the first four weeks of the second quarter.
We credit our success to our operators’ ability to execute on our
mission of Legendary Food and Legendary Service every single
shift. In addition, we remain committed to investing in new
restaurant growth that generates solid returns and allows us to
maintain a conservative capital structure."
Franchise Acquisition
Effective December 28, 2016, we acquired four
franchise restaurants in Florida and Georgia for an aggregate
purchase price of $16.5 million. The purchase price was paid
in cash. Going forward, two of the restaurants are
wholly-owned, while two are majority-owned. The acquisitions
are expected to have an accretive impact in 2017.
2017 Outlook
Comparable restaurant sales at company
restaurants for the first four weeks of our second quarter of
fiscal 2017 increased approximately 2.6% compared to the prior year
period.
Management reiterated the following expectations
for 2017:
- Positive comparable restaurant sales growth;
- Approximately 30 company restaurant openings, including
approximately six Bubba’s 33 restaurants;
- Food cost deflation of approximately 1.0% to 2.0%;
- Mid-single digit labor inflation;
- An income tax rate of 29.0% to 30.0%; and
- Total capital expenditures of approximately $170.0 million,
excluding any cash used for franchise acquisitions.
Conference Call
The Company is hosting a conference call today, May
1, 2017 at 5:00 p.m. Eastern Time to discuss these results.
The dial-in number is (888) 300-2343 or (719) 325-2323 for
international calls. A replay of the call will be available
for one week following the conference call. To access the
replay, please dial (844) 512-2921 or (412) 317-6671 for
international calls, and use 8307466 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 525 restaurants
system-wide in 49 states and six 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 28, 2017 |
|
March 29, 2016 |
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
Restaurant
sales |
$ |
563,320 |
|
|
$ |
511,284 |
|
|
Franchise
royalties and fees |
4,366 |
|
|
4,275 |
|
|
|
|
|
|
|
|
|
Total
revenue |
567,686 |
|
|
515,559 |
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
Restaurant operating costs (excluding depreciation and
amortization shown separately below): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
184,193 |
|
|
173,128 |
|
|
|
Labor |
170,347 |
|
|
147,546 |
|
|
|
Rent |
10,869 |
|
|
10,027 |
|
|
|
Other operating |
85,660 |
|
|
77,612 |
|
|
Pre-opening |
4,740 |
|
|
4,825 |
|
|
Depreciation and amortization |
22,596 |
|
|
19,539 |
|
|
Impairment
and closure |
11 |
|
|
11 |
|
|
General and
administrative |
40,248 |
|
|
30,060 |
|
|
|
|
|
|
|
|
|
Total costs
and expenses |
518,664 |
|
|
462,748 |
|
|
|
|
|
|
|
|
|
Income from
operations |
49,022 |
|
|
52,811 |
|
|
|
|
|
|
|
|
|
Interest
expense, net |
332 |
|
|
305 |
|
Equity
income from investments in |
|
|
|
|
|
unconsolidated affiliates |
320 |
|
|
352 |
|
|
|
|
|
|
|
|
|
Income
before taxes |
49,010 |
|
|
52,858 |
|
Provision
for income taxes |
12,987 |
|
|
15,857 |
|
|
|
|
|
|
|
|
|
Net income
including noncontrolling interests |
36,023 |
|
|
37,001 |
|
Less: Net
income attributable to noncontrolling interests |
1,710 |
|
|
1,408 |
|
Net income
attributable to Texas Roadhouse, Inc. and subsidiaries |
$ |
34,313 |
|
|
$ |
35,593 |
|
|
|
|
|
|
|
|
|
Net income
per common share attributable to Texas Roadhouse, Inc. |
|
|
|
|
|
and
subsidiaries: |
|
|
|
|
|
|
Basic |
$ |
0.48 |
|
|
$ |
0.51 |
|
|
Diluted |
$ |
0.48 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
Basic |
70,779 |
|
|
70,169 |
|
|
Diluted |
71,334 |
|
|
70,764 |
|
|
|
|
|
|
|
|
|
Cash
dividends declared per share |
$ |
0.21 |
|
|
$ |
0.19 |
|
|
|
Texas Roadhouse, Inc. and
Subsidiaries |
Condensed Consolidated Balance
Sheets |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 28, 2017 |
|
December 27, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
137,512 |
|
|
$ |
112,944 |
|
|
|
Other
current assets |
|
49,192 |
|
|
87,315 |
|
|
|
Property
and equipment, net |
|
855,027 |
|
|
830,054 |
|
|
|
Goodwill |
|
121,040 |
|
|
116,571 |
|
|
|
Intangible
assets, net |
|
3,392 |
|
|
3,622 |
|
|
|
Other
assets |
|
31,725 |
|
|
29,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
1,197,888 |
|
|
$ |
1,179,971 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
maturities of long-term debt and obligation under capital
lease |
|
172 |
|
|
167 |
|
|
|
Other
current liabilities |
|
276,986 |
|
|
279,360 |
|
|
|
Long-term
debt and obligation under capital lease, excluding current
maturities |
52,336 |
|
|
52,381 |
|
|
|
Other
liabilities |
|
86,772 |
|
|
89,821 |
|
|
|
Texas
Roadhouse, Inc. and subsidiaries stockholders' equity |
|
769,463 |
|
|
750,226 |
|
|
|
Noncontrolling interests |
|
12,159 |
|
|
8,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity |
|
$ |
1,197,888 |
|
|
$ |
1,179,971 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas Roadhouse, Inc. and
Subsidiaries |
Condensed Consolidated Statements of Cash
Flows |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
|
|
|
March 28, 2017 |
|
March 29, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from operating activities: |
|
|
|
|
|
Net income
including noncontrolling interests |
|
$ |
36,023 |
|
|
$ |
37,001 |
Adjustments
to reconcile net income to net cash provided by operating
activities |
|
|
|
|
|
|
Depreciation and amortization |
|
22,596 |
|
|
19,539 |
|
Share-based
compensation expense |
|
6,218 |
|
|
5,788 |
|
Other
noncash adjustments |
|
(3,973) |
|
|
802 |
Change in
working capital |
|
33,473 |
|
|
1,758 |
|
|
Net cash provided by
operating activities |
|
94,337 |
|
|
64,888 |
|
|
|
|
|
|
|
|
Cash flows
from investing activities: |
|
|
|
|
|
Capital
expenditures - property and equipment |
|
(36,063) |
|
|
(34,179) |
Acquisition
of franchise restaurants, net of cash acquired |
|
(16,528) |
|
|
- |
|
|
Net cash used in
investing activities |
|
(52,591) |
|
|
(34,179) |
|
|
|
|
|
|
|
|
Cash flows
from financing activities: |
|
|
|
|
|
Proceeds
from revolving credit facility, net |
|
- |
|
|
25,000 |
Repurchase
shares of common stock |
|
- |
|
|
(4,110) |
Dividends
paid |
|
(13,418) |
|
|
(11,919) |
Other
financing activities |
|
(3,760) |
|
|
(3,022) |
|
|
Net cash (used in)
provided by financing activities |
|
(17,178) |
|
|
5,949 |
|
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents |
|
24,568 |
|
|
36,658 |
Cash and
cash equivalents - beginning of period |
|
112,944 |
|
|
59,334 |
Cash and
cash equivalents - end of period |
|
$ |
137,512 |
|
|
$ |
95,992 |
|
|
|
|
|
|
|
|
Texas Roadhouse, Inc. and
Subsidiaries |
Supplemental Financial and Operating
Information |
($ amounts in thousands, except weekly sales
by group) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter |
|
Change |
|
|
|
|
|
2017 |
|
2016 |
|
vs LY |
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant
openings |
|
|
|
|
|
|
|
|
Company -
Texas Roadhouse |
6 |
|
5 |
|
1 |
|
|
|
Company -
Bubba's 33 |
0 |
|
2 |
|
(2) |
|
|
|
Company -
Other |
0 |
|
0 |
|
0 |
|
|
|
Franchise -
Texas Roadhouse - U.S. |
1 |
|
0 |
|
1 |
|
|
|
Franchise -
Texas Roadhouse - International |
1 |
|
1 |
|
0 |
|
|
|
Total |
8 |
|
8 |
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant
acquisitions/dispositions |
|
|
|
|
|
|
|
|
Company -
Texas Roadhouse |
4 |
|
0 |
|
4 |
|
|
|
Company -
Bubba's 33 |
0 |
|
0 |
|
0 |
|
|
|
Company -
Other |
0 |
|
0 |
|
0 |
|
|
|
Franchise -
Texas Roadhouse |
(4) |
|
0 |
|
(4) |
|
|
|
Total |
0 |
|
0 |
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
Restaurants
open at the end of the quarter |
|
|
|
|
|
|
|
|
Company -
Texas Roadhouse |
423 |
|
397 |
|
26 |
|
|
|
Company -
Bubba's 33 |
16 |
|
9 |
|
7 |
|
|
|
Company -
Other |
2 |
|
2 |
|
0 |
|
|
|
Franchise -
Texas Roadhouse - U.S. |
70 |
|
72 |
|
(2) |
|
|
|
Franchise -
Texas Roadhouse - International |
14 |
|
11 |
|
3 |
|
|
|
Total |
525 |
|
491 |
|
34 |
|
|
|
|
|
|
|
|
|
|
|
|
Company-owned restaurants |
|
|
|
|
|
|
|
|
Restaurant
sales |
$ |
563,320 |
|
$ |
511,284 |
|
10.2 |
% |
|
|
Store
weeks |
5,681 |
|
5,262 |
|
8.0 |
% |
|
|
Comparable
restaurant sales growth (1) |
3.1 |
% |
4.6 |
% |
|
|
|
Texas
Roadhouse restaurants only: |
|
|
|
|
|
|
|
|
|
Comparable restaurant
sales growth (1) |
3.2 |
% |
4.6 |
% |
|
|
|
|
Average unit volume
(2) |
$ |
1,299 |
|
$ |
1,271 |
|
2.3 |
% |
|
|
|
Weekly sales by
group: |
|
|
|
|
|
|
|
Comparable restaurants (380 units) |
$ |
100,840 |
|
|
|
|
|
|
|
|
Average
unit volume restaurants (27 units) (3) |
$ |
87,331 |
|
|
|
|
|
|
|
|
Restaurants less than 6 months old (16 units) |
$ |
103,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant
operating costs (as a % of restaurant sales) |
|
|
|
|
|
|
|
Cost of
sales |
32.7 |
% |
33.9 |
% |
(116) |
bps |
Labor |
30.2 |
% |
28.9 |
% |
138 |
bps |
Rent |
|
1.9 |
% |
2.0 |
% |
(3) |
bps |
Other
operating |
15.2 |
% |
15.2 |
% |
3 |
bps |
Total |
80.1 |
% |
79.9 |
% |
21 |
bps |
|
|
|
|
|
|
|
|
|
|
|
Restaurant
margin (4) |
19.9 |
% |
20.1 |
% |
(21) |
bps |
|
Restaurant
margin $ ($ in thousands) (4) |
$ |
112,251 |
|
$ |
102,970 |
|
9.0 |
% |
|
|
Restaurant
margin $ (4)/Store week |
$ |
19,760 |
|
$ |
19,569 |
|
1.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Franchise-owned restaurants |
|
|
|
|
|
|
|
|
Franchise
royalties and fees |
$ |
4,366 |
|
$ |
4,275 |
|
2.1 |
% |
|
|
Store
weeks |
1,080 |
|
1,070 |
|
0.9 |
% |
|
|
Comparable
restaurant sales growth (1) |
3.0 |
% |
3.1 |
% |
|
|
|
U.S.
franchise restaurants only: |
|
|
|
|
|
|
|
|
|
Comparable restaurant
sales growth (1) |
3.8 |
% |
4.1 |
% |
|
|
|
|
Average unit volume
(2) |
$ |
1,333 |
|
$ |
1,287 |
|
3.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Pre-opening
expense |
$ |
4,740 |
|
$ |
4,825 |
|
(1.8) |
% |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
$ |
22,596 |
|
$ |
19,539 |
|
15.6 |
% |
|
|
As a % of
revenue |
4.0 |
% |
3.8 |
% |
19 |
bps |
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses |
$ |
40,248 |
|
$ |
30,060 |
|
33.9 |
% |
|
|
As a % of
revenue |
7.1 |
% |
5.8 |
% |
126 |
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 (in dollars and as a percentage of restaurant
sales) represents restaurant sales less restaurant operating costs,
including cost of sales, labor, rent and other operating
costs. Depreciation and amortization expense, substantially
all of which relates to restaurant-level assets, is excluded from
restaurant operating costs. 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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contacts:
Investor Relations
Tonya Robinson
(502) 515-7269
Media
Travis Doster
(502) 638-5457
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