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Texas Roadhouse, Inc. Announces Fourth Quarter 2020 Results and Provides Business Update
ソース: Nasdaq GlobeNewswire / 18 2 2021 15:01:00 America/Chicago
LOUISVILLE, Ky., Feb. 18, 2021 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 52 week periods ended December 29, 2020 and provided a business update in response to the continued COVID-19 pandemic.
Fourth Quarter Year to Date ($000's) 2020 2019 % Change 2020 2019 % Change Total revenue $ 637,989 $ 725,238 (12.0 %) $ 2,398,123 $ 2,756,163 (13.0 %) Income from operations 20,396 53,411 (61.8 %) 23,844 212,023 (88.8 %) Net income 19,549 42,686 (54.2 %) 31,255 174,452 (82.1 %) Diluted earnings per share $ 0.28 $ 0.61 (54.3 %) $ 0.45 $ 2.46 (81.8 %) Note: Fourth quarter and full year 2020 results include 13 and 52 weeks, respectively, compared to 14 and 53 weeks in the fourth quarter and full year of 2019, respectively.
Results for the fourth quarter included the following:
- Total revenue was negatively impacted by lapping the $59.5 million benefit of the 14th week in 2019, which represented 7.9% of the decrease in total revenue for the quarter. Diluted earnings per share in the prior year quarter benefitted by $0.10 to $0.11 as a result of the 14th week;
- For the October, November, and December periods, comparable restaurant sales at domestic company restaurants increased 0.8%, decreased 6.3%, and decreased 18.2%, respectively. Sales during the period were negatively impacted by dining room closures and capacity restrictions throughout the country. For the quarter, comparable restaurant sales decreased 8.9% at domestic company restaurants and decreased 11.2% at domestic franchise restaurants;
- Nine company restaurants, including one Jaggers restaurant, our fast-casual concept, were opened and two franchise restaurants were opened;
- Restaurant margin, as a percentage of restaurant and other sales, was 13.3% and restaurant margin dollars were $84.1 million. Restaurant margin was impacted by a decrease in comparable restaurant sales and higher costs related to the pandemic. These costs included $0.5 million of costs incurred for relief pay and enhanced benefits for hourly restaurant employees, net of employee retention payroll tax credits of $2.5 million; and,
- The Company ended the quarter with debt of $240.0 million and $363.2 million of cash on hand.
Results for the year-to-date period included the following:
- Comparable restaurant sales decreased 14.2% at domestic company restaurants and 15.5% at domestic franchise restaurants;
- 22 company restaurants, including three Bubba’s 33 restaurants and one Jaggers restaurant, were opened and four franchise restaurants were opened. One company restaurant and two international franchise restaurants were closed;
- Restaurant margin, as a percentage of restaurant and other sales, was 11.2% and restaurant margin dollars were $265.6 million. Restaurant margin was impacted by a decrease in comparable restaurant sales and higher costs related to the pandemic. These costs included $13.2 million of costs incurred for relief pay and enhanced benefits for hourly restaurant employees, net of employee retention payroll tax credits of $7.0 million; and,
- The Company repurchased 252,409 shares of common stock for $12.6 million, the last of which occurred on March 17th. No proceeds from the revolving credit facility were utilized to repurchase shares.
Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, “This past year has been without question the most challenging I’ve ever experienced in the restaurant business. Despite these challenges, our operators quickly adapted and found ways to continue to serve our guests, many times in ways they never had before. This sustained our cashflows at a level that allowed us to continue to grow by opening 22 restaurants during the year. While we expect continued headwinds in the first half of 2021, we remain well-positioned for future growth.”
Business Update
For the quarter, the Company continued to operate under various capacity restrictions in the dining rooms along with enhanced To-Go, which included a curbside and/or drive-up operating model, as permitted by local guidelines. Comparable restaurant sales during the fourth quarter were impacted by dining room closures at a number of company restaurants. At the beginning of the quarter, nearly all company restaurants had their dining rooms open under various limited capacity restrictions. At the end of the quarter, 82% of company restaurants had their dining rooms open. By period, the comparable restaurant sales, average weekly sales, and To-Go sales for all company restaurants were as follows:
October November December Q4 2020 All restaurants Comparable restaurant sales 0.8 % (6.3 %) (18.2 %) (8.9 %) Average weekly sales $ 98,797 $ 93,946 $ 84,184 $ 91,644 To-Go sales as a % of average weekly sales 20.0 % 22.4 % 26.5 % 23.1 % Number of restaurants - end of period 528 533 537 537 Limited capacity restaurants (1) Comparable restaurant sales 1.1 % (3.4 %) (9.1 %) (4.0 %) Average weekly sales $ 99,139 $ 96,841 $ 93,894 $ 96,568 To-Go sales as a % of average weekly sales 19.9 % 21.1 % 21.4 % 20.8 % Number of restaurants - end of period 519 452 440 440 (1) Includes the full weekly sales for all restaurants with dining rooms re-opened at limited capacity as of the end of a week and excludes those restaurants that were operating as To-Go or outdoor dining only. For the fourth quarter, the Company’s cash on hand position increased approximately $34.5 million due to operating cashflows and working capital inflows, partially offset by cash used for capital expenditures. In addition, the Company acquired two franchise locations for a total purchase price of $10.6 million. As of the end of the year, the Company had opened 22 company restaurants across all concepts and an additional ten company restaurants were under construction.
For the January period and the first seven weeks of the first quarter of fiscal 2021, the comparable restaurant sales, average weekly sales, and To-Go sales for all company restaurants were as follows:First 7 weeks January Q1 2021 All restaurants Comparable restaurant sales (0.3 %) (2.0 %) Average weekly sales $ 105,595 $ 105,505 To-Go sales as a % of average weekly sales 25.9 % 24.8 % Number of restaurants - end of period 537 538 Limited capacity restaurants (1) Comparable restaurant sales 3.8 % 0.3 % Average weekly sales $ 110,587 $ 108,374 To-Go sales as a % of average weekly sales 23.7 % 23.4 % Number of restaurants - end of period 504 530 (1) Includes the full weekly sales for all restaurants with dining rooms re-opened at limited capacity as of the end of a week and excludes those restaurants that were operating as To-Go or outdoor dining only. 2021 Outlook
As previously announced, due to the uncertainty surrounding the pandemic, the Company had not yet provided a financial outlook for the fiscal year ending December 28, 2021. However, based on improved cashflow and stabilizing operations at company restaurants, the Company is providing the following expectations for 2021:
- 25 to 30 company restaurant openings across all concepts;
- Store week growth of 4.0% to 5.0%;
- Commodity cost inflation of approximately 3.0%; and
- Total capital expenditures of $210 million to $220 million.
To the extent that state and local guidelines begin to significantly reduce capacity and/or re-close dining rooms, the Company could pull back on development and reduce capital spend accordingly.
Non-GAAP Measures
The Company prepares the consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). Within the press release, the Company makes reference to restaurant margin (in dollars and as a percentage of restaurant and other sales). Restaurant margin represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent and other operating costs. Restaurant margin should not be considered in isolation, or as an alternative, to income from operations. This non-GAAP measure is not indicative of overall company performance and profitability in that this measure does not accrue directly to the benefit of shareholders due to the nature of the costs excluded. Restaurant margin is widely regarded as a useful metric by which to evaluate restaurant-level operating efficiency and performance. In calculating restaurant margin, the Company excludes certain non-restaurant-level costs that support operations, including pre-opening and general and administrative expenses, but do not have a direct impact on restaurant-level operational efficiency and performance. The Company also excludes depreciation and amortization expense, substantially all of which relates to restaurant-level assets, as it represents a non-cash charge for the investment in restaurants. The Company also excludes impairment and closure expense as it believes this provides a clearer perspective of ongoing operating performance and a more useful comparison to prior period results. Restaurant margin as presented may not be comparable to other similarly titled measures of other companies in the industry. A reconciliation of income from operations to restaurant margin is included in the accompanying financial tables.
Conference Call
Texas Roadhouse is hosting a conference call today, February 18, 2021 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 699-0953 or (647) 689-5456 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (800) 585-8367 or (416) 621-4642 for international calls, and use 6659886 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 has grown to over 630 restaurants system-wide in 49 states and ten foreign countries. For more information, please visit the Company’s Web site at www.texasroadhouse.com.
Forward-looking Statements
Certain statements in this release are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to the potential impact of the COVID-19/Coronavirus outbreak and other non-historical statements. Such statements are based upon the current beliefs and expectations of the management of Texas Roadhouse. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, conditions beyond its control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting customers or food supplies; food safety and food-borne illness concerns; and other factors disclosed from time to time in its filings with the U.S. Securities and Exchange Commission. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors include but are not limited to those described under “Part I—Item 1A. Risk Factors” of the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in the Current Report on Form 8-K filed on February 18, 2021. These factors should not be construed as exhaustive and should be read in conjunction with other filings with the 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. The Company undertakes no obligation to update any forward-looking statements, except as required by applicable law.
Contacts:
Investor Relations
Michael Bailen
(502) 515-7298Media
Travis Doster
(502) 638-5457Texas 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 29,
2020December 31,
2019December 29,
2020December 31,
2019Revenue: Restaurant and other sales $ 633,032 $ 719,457 $ 2,380,177 $ 2,734,177 Franchise royalties and fees 4,957 5,781 17,946 21,986 Total revenue 637,989 725,238 2,398,123 2,756,163 Costs and expenses: Restaurant operating costs (excluding depreciation and amortization shown separately below): Food and beverage 205,117 233,221 780,646 883,357 Labor 222,788 237,902 875,764 905,614 Rent 13,956 13,358 54,401 52,531 Other operating 107,111 112,093 403,726 418,448 Pre-opening 5,803 7,355 20,099 20,156 Depreciation and amortization 30,443 30,970 117,877 115,544 Impairment and closure, net 1,392 (1,293) 2,263 (899) General and administrative 30,983 38,221 119,503 149,389 Total costs and expenses 617,593 671,827 2,374,279 2,544,140 Income from operations 20,396 53,411 23,844 212,023 Interest expense (income), net 1,490 12 4,091 (1,514) Equity income (loss) from investments in unconsolidated affiliates 97 278 (500) 378 Income before taxes 19,003 53,677 19,253 213,915 Income tax (benefit) expense (1,673) 9,066 (15,672) 32,397 Net income including noncontrolling interests 20,676 44,611 34,925 181,518 Less: Net income attributable to noncontrolling interests 1,127 1,925 3,670 7,066 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 19,549 $ 42,686 $ 31,255 $ 174,452 Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: Basic $ 0.28 $ 0.61 $ 0.45 $ 2.47 Diluted $ 0.28 $ 0.61 $ 0.45 $ 2.46 Weighted average shares outstanding: Basic 69,525 69,431 69,438 70,509 Diluted 70,052 69,888 69,893 70,916 Cash dividends declared per share $ - $ 0.30 $ 0.36 $ 1.20 Texas Roadhouse, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) (unaudited) December 29, 2020 December 31, 2019 Cash and cash equivalents $ 363,155 $ 107,879 Other current assets, net 147,496 140,020 Property and equipment, net 1,088,623 1,056,563 Operating lease right-of-use assets, net 530,625 499,801 Goodwill 127,001 124,748 Intangible assets, net 2,271 1,234 Other assets 65,990 53,320 Total assets $ 2,325,161 $ 1,983,565 Current maturities of long-term debt 50,000 - Other current liabilities 456,318 417,220 Operating lease liabilities, net of current portion 572,171 538,710 Long-term debt, excluding current maturities 190,000 - Other liabilities 113,621 96,466 Texas Roadhouse, Inc. and subsidiaries stockholders' equity 927,505 915,994 Noncontrolling interests 15,546 15,175 Total liabilities and equity $ 2,325,161 $ 1,983,565 Texas Roadhouse, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) 52 and 53 Weeks Ended December 29, 2020 December 31, 2019 Cash flows from operating activities: Net income including noncontrolling interests $ 34,925 $ 181,518 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 117,877 115,544 Share-based compensation expense 29,431 35,500 Deferred income taxes (19,932) 6,335 Other noncash adjustments, net 6,262 6,039 Change in working capital 61,875 29,362 Net cash provided by operating activities 230,438 374,298 Cash flows from investing activities: Capital expenditures - property and equipment (154,401) (214,340) Acquisition of franchise restaurants, net of cash acquired (10,580) (1,536) Proceeds from sale of property and equipment 1,709 1,056 Proceeds from sale leaseback transaction 2,167 - Net cash used in investing activities (161,105) (214,820) Cash flows from financing activities: Proceeds from revolving credit facility 240,000 - Repurchase of shares of common stock (12,621) (139,849) Dividends paid (24,989) (102,366) Other financing activities, net (16,447) (19,509) Net cash provided by (used in) financing activities 185,943 (261,724) Net increase (decrease) in cash and cash equivalents 255,276 (102,246) Cash and cash equivalents - beginning of period 107,879 210,125 Cash and cash equivalents - end of period $ 363,155 $ 107,879 Texas Roadhouse, Inc. and Subsidiaries Reconciliation of Income from Operations to Restaurant Margin (in thousands) (unaudited) 13 and 14 Weeks Ended 52 and 53 Weeks Ended December 29, 2020 December 31, 2019 December 29, 2020 December 31, 2019 Income from operations $ 20,396 $ 53,411 $ 23,844 $ 212,023 Less: Franchise royalties and fees 4,957 5,781 17,946 21,986 Add: Pre-opening 5,803 7,355 20,099 20,156 Depreciation and amortization 30,443 30,970 117,877 115,544 Impairment and closure, net 1,392 (1,293 ) 2,263 (899 ) General and administrative 30,983 38,221 119,503 149,389 Restaurant margin $ 84,060 $ 122,883 $ 265,640 $ 474,227 Restaurant margin (as a percentage of restaurant and other sales) 13.3 % 17.1 % 11.2 % 17.3 % 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 2020 2019 vs LY 2020 2019 vs LY Restaurant openings Company - Texas Roadhouse 8 9 (1 ) 18 19 (1 ) Company - Bubba's 33 0 2 (2 ) 3 3 0 Company - Jaggers 1 0 1 1 0 1 Franchise - Texas Roadhouse - U.S. 1 0 1 2 1 1 Franchise - Texas Roadhouse - International 1 3 (2 ) 2 8 (6 ) Total 11 14 (3 ) 26 31 (5 ) Restaurant acquisitions/dispositions Company 2 1 1 2 1 1 Franchise (2 ) (1 ) (1 ) (2 ) (1 ) (1 ) Total 0 0 0 0 0 0 Restaurant closures Company - Texas Roadhouse 0 0 0 (1 ) 0 (1 ) Company - Bubba's 33 0 0 0 0 0 0 Company - Jaggers 0 0 0 0 0 0 Franchise - Texas Roadhouse - International 0 0 0 (2 ) (2 ) 0 Total 0 0 0 (3 ) (2 ) (1 ) Restaurants open at the end of the quarter Company - Texas Roadhouse 503 484 19 Company - Bubba's 33 31 28 3 Company - Jaggers 3 2 1 Franchise - Texas Roadhouse - U.S. 69 69 0 Franchise - Texas Roadhouse - International 28 28 0 Total 634 611 23 Company restaurants Restaurant and other sales $ 633,032 $ 719,457 (12.0 ) % $ 2,380,177 $ 2,734,177 (12.9 ) % Store weeks 6,908 7,118 (3.0 ) % 27,181 26,473 2.7 % Comparable restaurant sales (1) (8.9 ) % 4.4 % (14.2 ) % 4.7 % Texas Roadhouse restaurants only: Comparable restaurant sales (1) (9.0 ) % 4.3 % (14.1 ) % 4.6 % Average unit volume (2) $ 1,208 $ 1,435 (15.8 ) % $ 4,649 $ 5,555 (16.3 ) % Average unit volume, as adjusted (3) $ 1,208 $ 1,336 (9.5 ) % $ 4,649 $ 5,427 (14.3 ) % Weekly sales by group: Comparable restaurants (470 units) $ 93,530 Average unit volume restaurants (19 units) (4) $ 78,402 Restaurants less than 6 months old (14 units) $ 90,994 Restaurant operating costs (as a % of restaurant and other sales) Food and beverage costs 32.4 % 32.4 % (1 ) bps 32.8 % 32.3 % 49 bps Labor 35.2 % 33.1 % 213 bps 36.8 % 33.1 % 367 bps Rent 2.2 % 1.9 % 35 bps 2.3 % 1.9 % 36 bps Other operating 16.9 % 15.6 % 134 bps 17.0 % 15.3 % 166 bps Total 86.7 % 82.9 % 380 bps 88.8 % 82.7 % 618 bps Restaurant margin 13.3 % 17.1 % (380 ) bps 11.2 % 17.3 % (618 ) bps Restaurant margin ($ in thousands) $ 84,060 $ 122,883 (31.6 ) % $ 265,640 $ 474,227 (44.0 ) % Restaurant margin $/Store week $ 12,169 $ 17,264 (29.5 ) % $ 9,773 $ 17,914 (45.4 ) % Franchise restaurants Franchise royalties and fees $ 4,957 $ 5,781 (14.3 ) % $ 17,946 $ 21,986 (18.4 ) % Store weeks 1,260 1,330 (5.2 ) % 5,048 4,953 1.9 % Comparable restaurant sales (1) (10.7 ) % 3.0 % (17.3 ) % 3.0 % U.S. franchise restaurants only: Comparable restaurant sales (1) (11.2 ) % 3.4 % (15.5 ) % 3.8 % Average unit volume (2) $ 1,242 $ 1,491 (16.7 ) % $ 4,779 $ 5,749 (16.9 ) % Average unit volume, as adjusted (3) $ 1,242 $ 1,387 (10.5 ) % $ 4,779 $ 5,617 (14.9 ) % Pre-opening expense $ 5,803 $ 7,355 (21.1 ) % $ 20,099 $ 20,156 (0.3 ) % Depreciation and amortization $ 30,443 $ 30,970 (1.7 ) % $ 117,877 $ 115,544 2.0 % As a % of revenue 4.8 % 4.3 % 50 bps 4.9 % 4.2 % 72 bps General and administrative expenses $ 30,983 $ 38,221 (18.9 ) % $ 119,503 $ 149,389 (20.0 ) % As a % of revenue 4.9 % 5.3 % (41 ) bps 5.0 % 5.4 % (44 ) bps (1) Comparable restaurant sales 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 permanently 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 sales from restaurants permanently closed during the period. Q4 2020 and 2020 YTD include 13 and 52 weeks, respectively, while Q4 2019 and 2019 YTD include 14 and 53 weeks, respectively. (3) For comparative purposes, Q4 2019 and 2019 YTD were adjusted to include 13 and 52 weeks, respectively. (4) Average unit volume restaurants include restaurants open a full six and up to 18 months before the beginning of the period measured. Amounts may not foot due to rounding. 