Texas Roadhouse, Inc 8-K, filed Mar 19, 2020
Texas Roadhouse, Inc. (TXRH)
About this 8-K
Texas Roadhouse, Inc filed this 8-K on March 19, 2020, reporting on events of March 16, 2020.
Items reported
- Item 2.03: New debt or off-balance-sheet obligation
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
As previously disclosed, Texas Roadhouse, Inc. and certain of its subsidiaries are parties to that certain Amended and Restated Credit Agreement dated August 7, 2017 (the “Amended Credit Agreement”). The Amended Credit Agreement is a revolving credit agreement under which we can borrow up to $200.0 million with the option to increase the credit facility by an additional $200.0 million (subject to certain limitations set forth in the Amended Credit Agreement). The material terms of the Amended Credit Agreement are described under “Note 5 – Long-term Debt” of the Notes to Consolidated Financial Statements for Texas Roadhouse, Inc. and its subsidiaries, which Note 5 is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission on February 28, 2020, and which description is incorporated herein by reference.
As of December 31, 2019, we had $191.8 million of availability under the Amended Credit Agreement, net of $8.2 million of outstanding letters of credit.
On March 9, 2020 and as a precautionary measure, we provided notice to the lenders under the Amended Credit Agreement of our desire to borrow $50.0 million available under the credit facility, which amounts were deposited with us on March 12, 2020. Additionally, on March 16, 2020, we provided an additional notice to the lenders under the Amended Credit Agreement of our desire to borrow $140.0 million available under the credit facility so that a total of $198.2 million will be outstanding (including $8.2 million of outstanding letters of credit) following receipt of such additional $140.0 million draw down. The current interest for such borrowings under the Amended Credit Agreement is a blended rate of approximately 1.64%. With the draw down, and existing cash, we will have over $300 million in cash on hand with an option to increase the credit facility by an additional $200 million. As of the date of this Current Report on Form 8-K, we remain in compliance with all financial covenants set forth in the Amended Credit Agreement.
In light of the current uncertainty in the global markets resulting from the COVID-19 outbreak and notwithstanding our healthy cash balance previously described in our Annual Report on Form 10-K for fiscal year ended December 31, 2019, we increased our borrowing as a precautionary measure in order to bolster our cash position and enhance financial flexibility. The proceeds from these borrowings are being held on our balance sheet and may in the future be used for general corporate purposes, including, without limitation, working capital, capital expenditures in the ordinary course of business, or other lawful corporate purposes, all in accordance with and subject to the terms and conditions of the Amended Credit Agreement.
| Item 7.01 | Regulation FD Disclosure |
Due to the current unprecedented global market and economic conditions in the United States and around the world, we are withdrawing financial guidance for the fiscal year ended December 29, 2020. We plan to provide an update on the business on our First Quarter earnings call and will provide updated financial guidance to the extent we can reasonably estimate the impact of the outbreak and changing market conditions. For additional information, see the Press Release issued on March 19, 2020, and furnished as Exhibit 99.1 hereto.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits 99.1 | Press Release Issued by the Company on March 19, 2020 |
Forward-looking Statements
This Current Report on Form 8-K includes 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 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 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; and other factors disclosed from time to time in our 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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Current Report on Form 8-K and in our 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. We undertake no obligation to update any forward-looking statements, except as required by applicable law.
2
INDEX TO EXHIBITS
| Exhibit No. 99.1 | Press Release issued by the Company on March 19, 2020 |
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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: March 19, 2020 | By: | /s/ Tonya Robinson | |
| Tonya Robinson | |||
| Chief Financial Officer | |||
4
Exhibit 99.1
Texas Roadhouse offers expanded To-Go and Curbside service options in response to the COVID-19/Coronavirus outbreak
Company withdrawing financial guidance for 2020 and drawing down revolving credit facility
LOUISVILLE, KY. (March 19, 2020) – Texas Roadhouse, Inc. (NasdaqGS: TXRH), announced today that it has expanded its “To-Go” program for its company-owned restaurants to include “curbside” and/or “drive-up” operating models as many states implement limited or no in-restaurant dining. At this time, Texas Roadhouse has no domestic restaurants closed due to the COVID-19/Coronavirus outbreak and is operating restaurants in a full, limited, or To-Go capacity depending on the store location.
“In the areas where our dining rooms are temporarily closed, we are committed to serving our communities across America with ramped-up To-Go, Family Value Packs, and curbside service,” said Kent Taylor, Founder and CEO of Texas Roadhouse. “As we know, Texas Roadhouse and the entire foodservice industry play a vital role in our nation’s food supply and you can count on us to do our part to support our communities.”
Increasing Cash Reserves
The Company has increased its cash position by drawing down $190 million under its revolving credit facility to bolster its already strong cash position. With the draw down, and existing cash, the Company will have over $300 million in cash on hand with an option to increase its credit facility by an additional $200 million.
The increased borrowing was taken as a precautionary measure to provide enhanced financial flexibility considering the uncertain market conditions arising from the COVID-19/Coronavirus pandemic.
2020 Outlook
Due to the current unprecedented global market and economic conditions in the United States and around the world, the Company is withdrawing financial guidance for the fiscal year ending December 29, 2020. The Company plans to provide an update on the business on its First Quarter earnings call and will provide updated financial guidance to the extent it can reasonably estimate the impact of the outbreak and changing market conditions.
About the Company
Texas Roadhouse is a casual dining concept that first opened in 1993 and today has grown to over 610 restaurants system-wide in 49 states and ten foreign countries. For more information, please visit the Company’s Website 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 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; and other factors disclosed from time to time in our 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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. These factors should not be construed as exhaustive and should be read in conjunction with our 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. We undertake no obligation to update any forward-looking statements, except as required by applicable law.
Contacts:
Investor Relations
Tonya Robinson
(502) 515-7269
Media
Travis Doster
(502) 638-5457