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Texas Roadhouse, Inc. Announces First Quarter 2010 Results

May 3, 2010

Texas Roadhouse, Inc. Announces First Quarter 2010 Results

LOUISVILLE, Ky., May 03, 2010 (BUSINESS WIRE) --Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 week period ended March 30, 2010.

First Quarter
($000's) 2010 2009 % Change
Total revenue 259,624 246,073 6
Income from operations 30,106 22,283 35
Net income 19,241 14,334 34
Diluted EPS $0.27 $0.20 31

Results for the first quarter:

  • Comparable restaurant sales increased 0.4% at company restaurants and 0.9% at franchise restaurants;
  • Three company restaurants opened;
  • Restaurant margins increased 218 basis points to 20.1%;
  • Diluted earnings per share increased 31% to $0.27 from $0.20 in the prior year period.

G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, "We were very pleased with our first quarter results. Our results were driven by positive comparable restaurant sales and continued restaurant-level margin expansion led by favorable commodity costs. For the balance of 2010, we anticipate a continued favorable commodities environment and we remain focused on providing legendary food and service to our guests in an effort to continue driving positive sales. In addition, we remain committed to investing in new restaurant growth that generates a solid return on invested capital and allows us to maintain a conservative capital structure."

Outlook for 2010

The Company reported that comparable restaurant sales for the first four weeks of the second quarter of fiscal 2010 decreased 0.3% compared to the same period a year ago.

The Company estimates 2010 diluted earnings per share growth will be 14% to 18% compared to 2009. This estimate is based, in part, on the following assumptions:

  • Comparable restaurant sales of flat to up 1.0%;
  • 14 to 15 company restaurant openings;
  • Food cost deflation of approximately 2.5% to 3.0%; and
  • Total capital expenditures of approximately $50 million.

Conference Call

The Company is hosting a conference call today, May 3, 2010, at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (888) 352-6806 or (719) 457-2650 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (888) 203-1112 or (719) 457-0820 for international calls, and use 1576405 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 325 restaurants system-wide in 46 states. 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 operating costs, our ability to acquire franchise restaurants, our ability to integrate the franchise restaurants we acquire or other concepts we develop, strength of consumer spending, conditions beyond the Company's control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting the Company's customers or food supplies, acts of war or terrorism and other factors disclosed from time to time in the Company's filings with the U.S. Securities and Exchange Commission. Investors should take such risks into account when making investment decisions. Stockholders 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. The Company undertakes 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 30, 2010 March 31, 2009
Revenue:
Restaurant sales $ 257,342 $ 244,090
Franchise royalties and fees 2,282 1,983
Total revenue 259,624 246,073
Costs and expenses:
Restaurant operating costs:
Cost of sales 82,799 83,041
Labor 74,909 71,499
Rent 5,270 4,912
Other operating 42,598 40,860
Pre-opening 1,105 2,284
Depreciation and amortization 10,337 10,471
Impairment and closure 158 (86 )
General and administrative 12,342 10,809
Total costs and expenses 229,518 223,790
Income from operations 30,106 22,283
Interest expense, net 730 857
Equity income from investments in
unconsolidated affiliates 108 85
Income before taxes 29,484 21,511
Provision for income taxes 9,606 6,715
Net income including noncontrolling interests $ 19,878 $ 14,796
Less: Net income attributable to noncontrolling interests 637 462
Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 19,241 $ 14,334
Net income per common share attributable to Texas Roadhouse, Inc.
and subsidiaries:
Basic $ 0.27 $ 0.21
Diluted $ 0.27 $ 0.20
Weighted average shares outstanding:
Basic 70,690 69,426
Diluted 72,226 70,506
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(in thousands)
March 30, 2010 December 29, 2009
Cash and cash equivalents $ 53,743 $ 46,858
Other current assets 29,203 27,458
Property and equipment, net 453,752 456,281
Goodwill 113,465 113,465
Intangible asset, net 10,925 11,194
Other assets 6,505 6,817
Total assets $ 667,593 $ 662,073
Current maturities of long-term debt
and obligations under capital leases 253 247
Other current liabilities 97,085 107,956
Long-term debt and obligations under
capital leases, excluding current maturities 89,113 101,179
Other liabilities 32,702 29,741
Texas Roadhouse, Inc. and subsidiaries stockholders' equity 445,786 420,372
Noncontrolling interests 2,654 2,578
Total liabilities and equity $ 667,593 $ 662,073
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands, except per share data)
(unaudited)
13 weeks ended
March 30, 2010 March 31, 2009
Cash flows from operating activities:
Net income including noncontrolling interests $ 19,878 $ 14,796
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 10,337 10,471
Share-based compensation expense 1,830 1,961
Other noncash adjustments 316 1,982
Change in working capital (9,677 ) (9,032 )
Net cash provided by operating activities 22,684 20,178
Cash flows from investing activities:
Capital expenditures - property and equipment (7,822 ) (13,430 )
Acquisition of franchise restaurants, net of cash acquired - 13
Proceeds from sale of property and equipment, including insurance proceeds 21 67
Net cash used in investing activities (7,801 ) (13,350 )
Cash flows from financing activities:
Repayments of revolving credit facility, net (12,000 ) (3,000 )
Other financing activities 4,002 (1,333 )
Net cash used in financing activities (7,998 ) (4,333 )
Net increase in cash and cash equivalents 6,885 2,495
Cash and cash equivalents - beginning of year 46,858 5,258
Cash and cash equivalents - end of year $ 53,743 $ 7,753
Supplemental Financial and Operating Information
($ amounts in thousands)
(unaudited)
First Quarter Change
2010 2009 vs LY
Restaurant openings
Company 3 9 (6 )
Franchise 0 0 0
Total 3 9 (6 )
Restaurants open at the end of the quarter
Company 264 254 10
Franchise 70 69 1
Total 334 323 11
Company-owned restaurants
Restaurant sales $ 257,342 $ 244,090 5.4 %
Store weeks 3,412 3,249 5.0 %
Comparable restaurant sales growth (1) 0.4 % (1.3 ) %
Average unit volume (2) $ 974 $ 972 0.2 %
Restaurant operating costs (as a % of restaurant sales)
Cost of sales 32.2 % 34.0 % (185 ) bps
Labor 29.1 % 29.3 % (18 ) bps
Rent 2.0 % 2.0 % 4 bps
Other operating 16.6 % 16.7 % (19 ) bps
Total 79.9 % 82.1 % (218 ) bps
Restaurant margins (3) 20.1 % 17.9 % 218 bps
Franchise-owned restaurants
Franchise royalties and fees $ 2,282 $ 1,983 15.1 %
Store weeks 910 897 1.4 %
Comparable restaurant sales growth (1) 0.9 % (1.7 ) %
Average unit volume (2) $ 964 $ 946 1.8 %
Pre-opening expense $ 1,105 $ 2,284 (51.6 ) %
Depreciation and amortization $ 10,337 $ 10,471 (1.3 ) %
As a % of revenue 4.0 % 4.3 % (27 ) bps
Impairment and closure $ 158 $ (86 ) (283.7 ) %
As a % of revenue 0.1 % (0.0 ) % 10 bps
General and administrative expenses $ 12,342 $ 10,809 14.2 %
As a % of revenue 4.8 % 4.4 % 36 bps
(1) Comparable restaurant sales growth includes sales from restaurants open 18 months as of the beginning of the measurement period.
(2) Average unit volume includes sales from restaurants open six months as of the beginning of the measurement period. For comparative purposes, average unit volumes for Q1 2009 were adjusted to reflect restaurant sales of any acquired franchise restaurants as part of Company-owned restaurants average unit volume and were excluded from franchise-owned restaurants average unit volume.
(3) Restaurant margins represent restaurant sales less restaurant operating costs (as a percentage of restaurant sales).
Amounts may not foot due to rounding.

SOURCE: Texas Roadhouse, Inc.

Texas Roadhouse, Inc.
Investor Relations
Price Cooper, 502-515-7300
or
Media
Travis Doster, 502-638-5457
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