8-K
Texas Roadhouse, Inc. (TXRH)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 3, 2020
TEXAS ROADHOUSE, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-50972 | 20-1083890 |
|---|---|---|
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |
| 6040 Dutchmans Lane, Louisville, KY | 40205 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code
(502) 426-9984
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading<br><br> Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.001 per share | TXRH | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| ITEM 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
|---|
On August 3, 2020, Texas Roadhouse, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2020. Attached to this Current Report on Form 8-K as Exhibit 99.1 is a copy of the press release.
| ITEM 8.01. | OTHER EVENTS |
|---|
SupplementalRisk Factor
The Company is supplementing the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, with the following risk factor. Careful consideration should be given to the risks described below. If any of the risks and uncertainties described below actually occurs, our business, financial condition and results of operations, and the trading price of our common stock could be materially and adversely affected.
Thenovel coronavirus ("COVID-19")pandemic has disrupted and is expected to continue to disrupt our business, which has and could continue to materially affect ourbusiness, financial condition, and results of operations, for an extended period of time.
On March 13, 2020, the COVID-19 pandemic (the "pandemic") was declared a National Public Health Emergency. Shortly after the national emergency declaration, state and local officials began placing restrictions on restaurants, some of which allowed To-Go or curbside service only, while others limited capacity in the dining room. By March 31, 2020, the last day of our Q1 2020 fiscal quarter, all of our domestic company and franchise restaurants were under state or local order which only allowed for To-Go or curbside service. Beginning in early May 2020, state and local guidelines began to allow dining rooms to re-open, typically at a limited capacity. By June 30, 2020, the last day of our Q2 2020 fiscal quarter, 499 of our 521 company-owned restaurants had re-opened their dining rooms under various limited capacity restrictions. Our remaining restaurants, with the exception of one that is temporarily closed, are limited to outdoor dining and/or To-Go or curbside service only. As of August 3, 2020, 499 of our 523 company-owned restaurants had re-opened their dining rooms under various limited capacity restrictions.
We continue to monitor state and local plans as they move along their phased approach to re-open their economies. We have developed a hybrid operating model that accommodates our limited capacity dining rooms together with enhanced To-Go, which includes a curbside and/or drive-up operating model, as permitted by local guidelines. This includes design changes to our building to better accommodate the increased To-Go sales and the expansion of outdoor seating areas where allowed. We also installed booth partitions in all of our restaurants as an added safety measure for our guests. In addition, we have increased our already strict sanitation requirements, are conducting daily health and temperature checks for all employees before they begin their shift and are requiring personal protective equipment to be worn by all restaurant employees at all times. As we work through the re-opening phases at each of our locations, the safety of our employees and guests remains our top priority.
As a result of the temporary dining room closures and the subsequent limited capacity restrictions for in-person dining, we have experienced a significant decrease in traffic which has impacted our operating results. While many of our dining rooms have re-opened, the capacity restrictions severely limit the number of guests we can serve. In addition, while we have seen significant sales growth in our To-Go program, even in those stores with dining rooms re-opened, we currently do not expect these sales will generate a similar profit margin to our normal operating model. We expect our operating results to continue to be impacted until at least such time that state and local restrictions are lifted, and our dining rooms can re-open at full capacity. We cannot predict how long the pandemic will last, how long it will take until all state and local restrictions will be lifted, or if dining rooms will be required to close again in areas severely impacted by the pandemic. In addition, we cannot predict the overall impact on the economy or consumer spending habits.
2
The pandemic has also adversely affected our ability to open new restaurants. At the onset of the pandemic, we delayed construction on all restaurants that were not substantially complete. As of June 30, 2020, 14 restaurants, including one relocation site, had either resumed construction or were approved to resume construction. These changes may have a material adverse effect on our ability to grow our business, particularly if we delay construction on these sites again in future periods.
In March 2020, we borrowed $190.0 million under our Amended Credit Agreement in order to enhance our financial flexibility. The Amended Credit Agreement also provides us the option to increase the credit facility by $200.0 million subject to certain limitations, including approval by the syndicate of lenders, set forth in the Amended Credit Agreement. On May 11, 2020, as a precautionary measure to further enhance financial flexibility, we amended the revolving credit facility to increase the amount available under the facility by $82.5 million and drew down $50.0 million of this amount. If the pandemic continues to adversely impact our business for a significant period of time, we may need to further increase the credit facility and/or seek other sources of liquidity. There is no guarantee that we can increase the credit facility or that additional liquidity will be readily available or available at favorable terms.
Our suppliers could be adversely impacted by the pandemic. If our supplier’s employees are unable to work, whether because of illness, quarantine, limitations on travel or other government restrictions in connection with the pandemic, we could face shortages of food items or other supplies at our restaurants and our operations and sales could be adversely impacted by such interruptions.
The temporary closure of our dining rooms and subsequent re-opening at limited capacity has resulted in decreased staffing levels at our restaurants. We have taken compensation actions to support certain restaurant employees during the pandemic, but those actions may not be enough to compensate them until such time that our dining rooms can re-open at full capacity. Those restaurant employees might seek and find other employment during the interruption, which could have a material adverse effect on our ability to properly staff our restaurants with experienced team members once we resume our normal operations.
Our restaurant operations could be further disrupted if a significant number of restaurants have employees diagnosed with COVID-19 resulting in some or all of the restaurant’s employees being quarantined and our restaurant facilities having to be disinfected. If a significant percentage of our workforce is unable to work, whether because of illness or required quarantine, our operations may be negatively impacted which could have a material adverse effect on our business.
| ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS |
|---|
(d) EXHIBITS
| 99.1 | Press Release issued by the company on August 3, 2020. |
|---|
The information in this Current Report on Form 8-K at Item 2.02 and the Exhibit attached hereto shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Such information will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.
3
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: August 3, 2020 | By: | /s/ Tonya Robinson |
| Tonya Robinson | ||
| Chief Financial Officer |
4
Exhibit 99.1
Texas Roadhouse, Inc. AnnouncesSecond Quarter 2020 Results and Provides Business Update
LOUISVILLE, KY. (August 3, 2020) – Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 week periods ended June 30, 2020 and provided a business update in response to the continued COVID-19 pandemic.
Statement from Kent Taylor, Founderand CEO
Let me start by thanking our operators and support teams for their hard work, dedication, courage, and commitment during the most challenging times we’ve experienced. Our operators were able to quickly transition nearly 600 full-service restaurants to a To-Go only model in March and then transition the majority of those same restaurants back to a hybrid operating model of limited capacity dining rooms together with enhanced To-Go service in May and June. Along the way, they came up with creative ways to drive traffic through increased outdoor dining, executing To-Go, managing wait times and other initiatives, with a priority of keeping our employees and guests safe.
As we began re-opening our dining rooms in May, it was clear that our guests were excited to return. Since then, we have been encouraged to see our sales trend favorably through a solid combination of re-opened dining rooms, outdoor dining, and strong To-Go sales. With these increased sales, we have also seen our cashflows steadily improve. While we know there are challenges that remain relating to the pandemic and its impact on our business, I know that our operators will continue to face them head on.
Financial Results
Financial results for the 13 and 26 week periods ended June 30, 2020 were as follows:
| Second Quarter | Year to Date | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($000's) | 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||
| Total revenue | $ | 476,425 | $ | 689,828 | (30.9 | )% | $ | 1,128,949 | $ | 1,380,436 | (18.2 | )% | ||||
| (Loss) income from operations | (47,318 | ) | 53,283 | (188.8 | )% | (31,528 | ) | 113,728 | (127.7 | )% | ||||||
| Net (loss) income | (33,553 | ) | 44,845 | (174.8 | )% | (17,524 | ) | 95,235 | (118.4 | )% | ||||||
| Diluted (loss) earnings per share | $ | (0.48 | ) | $ | 0.63 | (177.4 | )% | $ | (0.25 | ) | $ | 1.32 | (119.1 | )% |
Results for the second quarter included the following:
| · | For the April, May, and June periods, comparable restaurant sales at company restaurants decreased<br>46.7%, 41.9%, and 14.1%, respectively. Sales during the June period were positively impacted by the re-opening of dining rooms<br>in a limited capacity in the majority of company restaurants. For the quarter, comparable restaurant sales decreased 32.8% at company<br>restaurants and 32.1% at domestic franchise restaurants; |
|---|---|
| · | Three company restaurants were opened. One company restaurant and two international franchise restaurants<br>were permanently closed. In addition, one company restaurant and five international franchise locations remain temporarily closed; |
| --- | --- |
| · | Restaurant margin, as a percentage of restaurant and other sales, was 2.5% and restaurant margin<br>dollars were $11.8 million. Restaurant margin was impacted by a decrease in comparable restaurant sales and higher costs related<br>to the pandemic. These costs included $4.7 million incurred for relief pay and benefits for hourly restaurant employees; and, |
| --- | --- |
| · | The Company increased the capacity of its revolving credit facility by $82.5 million to further<br>enhance financial flexibility and subsequently drew down $50 million of this amount. The Company ended the quarter with debt of<br>$240.0 million and $282.5 million of cash on hand. |
| --- | --- |
Results for the year-to-date period included the following highlights:
| · | Comparable restaurant sales decreased 20.5% at company restaurants and 20.2% at domestic franchise<br>restaurants; |
|---|---|
| · | Eight company restaurants and one domestic franchise restaurant were opened. One company restaurant<br>and two international franchise restaurants were permanently closed; |
| --- | --- |
| · | Restaurant margin, as a percentage of restaurant and other sales, was 8.1% and restaurant margin<br>dollars were $90.4 million. Restaurant margin included $15.4 million of costs incurred for relief pay and benefits for hourly restaurant<br>employees; and, |
| --- | --- |
| · | The Company repurchased 252,409 shares of common stock for $12.6 million. These repurchases continued<br>through mid-March and no proceeds from the revolving credit facility were utilized. |
| --- | --- |
Business Update
Comparable restaurant sales during the second quarter were impacted by the re-opening of dining rooms across the country. For the April period, the Company operated under a fully To-Go model, while the May and June periods included various capacity restrictions in the dining rooms. By period, the comparable restaurant sales and average weekly sales for all company restaurants were as follows:
| April | May | June | Q2 2020 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| All restaurants | ||||||||||||
| Comparable restaurant sales | (46.7 | )% | (41.9 | )% | (14.1 | )% | (32.8 | )% | ||||
| Average weekly sales | $ | 54,937 | $ | 62,343 | $ | 88,874 | $ | 70,281 | ||||
| Number of restaurants - end of period | 518 | 519 | 521 | 521 | ||||||||
| Limited capacity restaurants (1) | ||||||||||||
| Comparable restaurant sales | (28.0 | )% | (8.2 | )% | (13.7 | )% | ||||||
| Average weekly sales | N/A | $ | 80,235 | $ | 96,623 | $ | 92,227 | |||||
| To-Go sales as a % of average weekly sales | 41.9 | % | 25.9 | % | 29.7 | % | ||||||
| Number of restaurants - end of period | 340 | 499 | 499 |
(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 July period, comparable restaurant sales at company restaurants decreased 13.0% and average weekly sales at all restaurants were $86,062. The decrease in average weekly sales was impacted by the decision of some states to further limit capacity or require dining rooms to be re-closed, the negative impact of the shift in the Fourth of July holiday, and normal seasonality. As of the end of July, over 95% of company restaurants had dining rooms operating in a limited capacity. For the July period, comparable restaurant sales per week and the average weekly sales for all company restaurants were as follows:
| Week Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 7/7/2020 | 7/14/2020 | 7/21/2020 | 7/28/2020 | July | |||||||||||
| All restaurants | |||||||||||||||
| Comparable restaurant sales | (16.9 | )% | (12.3 | )% | (13.1 | )% | (9.9 | )% | (13.0 | )% | |||||
| Average weekly sales | $ | 79,630 | $ | 86,704 | $ | 87,835 | $ | 90,080 | $ | 86,062 | |||||
| Number of restaurants - end of period | 523 | 523 | 523 | 523 | 523 | ||||||||||
| Limited capacity restaurants (1) | |||||||||||||||
| Comparable restaurant sales | (14.9 | )% | (10.2 | )% | (11.4 | )% | (8.4 | )% | (11.2 | )% | |||||
| Average weekly sales | $ | 81,725 | $ | 89,063 | $ | 89,377 | $ | 91,364 | $ | 87,882 | |||||
| To-Go sales as a % of average weekly sales | 25.4 | % | 25.3 | % | 25.7 | % | 25.0 | % | 25.3 | % | |||||
| Number of restaurants - end of period | 497 | 490 | 497 | 499 | 499 |
(1) Includes the full weekly sales for all restaurants with dining rooms re-opened at limited capacity as of the end of the week and excludes those restaurants that were operating as To-Go or outdoor dining only.
For the second quarter, the Company’s cash on hand position increased approximately $51.9 million due to working capital inflows, proceeds from the revolving credit facility and increased sales performance, partially offset by cash used for capital expenditures. At the current level of restaurant sales, the Company expects to continue to generate cash from operations and continue restaurant development. As of today, the Company has opened 10 restaurants and has resumed construction on an additional 12 restaurants. The Company currently expects to open as many as six restaurants in the third quarter, with two of these already opened. To the extent that state and local guidelines begin to further reduce capacity and/or re-close dining rooms, the Company will evaluate further development and reduce capital expenditures accordingly.
2020 Outlook
As previously announced, due to the current unprecedented global market and economic conditions, the Company withdrew the financial outlook for the fiscal year ending December 29, 2020. The Company cannot yet reasonably estimate the impact to the business and therefore cannot provide an updated outlook.
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 cost of sales, 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, August 3, 2020 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 8064639 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 620 restaurants system-wide in 49 states and ten foreign countries. For more information, please visit the 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 August 3, 2020. 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
Tonya Robinson
(502) 515-7269
Media
Travis Doster
(502) 638-5457
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements ofIncome (Loss)
(in thousands, except per share data)
(unaudited)
| 13 Weeks Ended | 26 Weeks Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2020 | June 25, 2019 | June 30, 2020 | June 25, 2019 | |||||||||
| Revenue: | ||||||||||||
| Restaurant and other sales | $ | 473,090 | $ | 684,373 | $ | 1,120,716 | $ | 1,369,490 | ||||
| Franchise royalties and fees | 3,335 | 5,455 | 8,233 | 10,946 | ||||||||
| Total revenue | 476,425 | 689,828 | 1,128,949 | 1,380,436 | ||||||||
| Costs and expenses: | ||||||||||||
| Restaurant operating costs (excluding depreciation and amortization shown separately below): | ||||||||||||
| Cost of sales | 164,041 | 221,266 | 374,221 | 444,978 | ||||||||
| Labor | 194,622 | 225,490 | 435,701 | 449,370 | ||||||||
| Rent | 13,251 | 13,051 | 26,722 | 26,179 | ||||||||
| Other operating | 89,348 | 103,811 | 193,637 | 205,613 | ||||||||
| Pre-opening | 4,290 | 4,197 | 9,402 | 8,065 | ||||||||
| Depreciation and amortization | 29,016 | 28,454 | 58,070 | 56,227 | ||||||||
| Impairment and closure, net | (440 | ) | 316 | 155 | 333 | |||||||
| General and administrative | 29,615 | 39,960 | 62,569 | 75,943 | ||||||||
| Total costs and expenses | 523,743 | 636,545 | 1,160,477 | 1,266,708 | ||||||||
| (Loss) income from operations | (47,318 | ) | 53,283 | (31,528 | ) | 113,728 | ||||||
| Interest expense (income), net | 1,030 | (691 | ) | 1,099 | (1,445 | ) | ||||||
| Equity (loss)<br> income from investments in unconsolidated affiliates | (90 | ) | 141 | (598 | ) | 254 | ||||||
| (Loss) income before taxes | (48,438 | ) | 54,115 | (33,225 | ) | 115,427 | ||||||
| Income tax (benefit) expense | (15,132 | ) | 7,427 | (17,071 | ) | 16,546 | ||||||
| Net (loss) income including noncontrolling interests | (33,306 | ) | 46,688 | (16,154 | ) | 98,881 | ||||||
| Less: Net income attributable to noncontrolling interests | 247 | 1,843 | 1,370 | 3,646 | ||||||||
| Net (loss) income attributable to Texas Roadhouse, Inc. and subsidiaries | $ | (33,553 | ) | $ | 44,845 | $ | (17,524 | ) | $ | 95,235 | ||
| Net (loss) income per common share attributable to<br> Texas Roadhouse, Inc. and subsidiaries: | ||||||||||||
| Basic | $ | (0.48 | ) | $ | 0.63 | $ | (0.25 | ) | $ | 1.33 | ||
| Diluted | $ | (0.48 | ) | $ | 0.63 | $ | (0.25 | ) | $ | 1.32 | ||
| Weighted average shares outstanding: | ||||||||||||
| Basic | 69,361 | 71,362 | 69,391 | 71,558 | ||||||||
| Diluted | 69,361 | 71,733 | 69,391 | 71,961 | ||||||||
| Cash dividends declared per share | $ | - | $ | 0.30 | $ | 0.36 | $ | 0.60 |
Texas Roadhouse, Inc.and Subsidiaries
Condensed Consolidated BalanceSheets
(in thousands)
(unaudited)
| June 30, 2020 | December 31, 2019 | |||
|---|---|---|---|---|
| Cash and cash equivalents | $ | 282,493 | $ | 107,879 |
| Other current assets, net | 76,884 | 140,020 | ||
| Property and equipment, net | 1,072,173 | 1,056,563 | ||
| Operating lease right-of-use assets, net | 517,260 | 499,801 | ||
| Goodwill | 124,748 | 124,748 | ||
| Intangible assets, net | 993 | 1,234 | ||
| Other assets | 55,933 | 53,320 | ||
| Total assets | $ | 2,130,484 | $ | 1,983,565 |
| Current liabilities | 402,242 | 417,220 | ||
| Operating lease liabilities, net of current portion | 557,543 | 538,710 | ||
| Long-term debt, excluding current maturities | 190,000 | - | ||
| Other liabilities | 97,980 | 96,466 | ||
| Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 868,021 | 915,994 | ||
| Noncontrolling interests | 14,698 | 15,175 | ||
| Total liabilities and equity | $ | 2,130,484 | $ | 1,983,565 |
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| 26 Weeks Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2020 | June 25, 2019 | |||||
| Cash flows from operating activities: | ||||||
| Net (loss) income including noncontrolling interests | $ | (16,154 | ) | $ | 98,881 | |
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||
| Depreciation and amortization | 58,070 | 56,227 | ||||
| Share-based compensation expense | 14,490 | 16,873 | ||||
| Deferred income taxes | (10,926 | ) | (2,734 | ) | ||
| Other noncash adjustments, net | 3,052 | 2,707 | ||||
| Change in working capital | 13,313 | 15,062 | ||||
| Net cash provided by operating activities | 61,845 | 187,016 | ||||
| Cash flows from investing activities: | ||||||
| Capital expenditures - property and equipment | (81,833 | ) | (87,782 | ) | ||
| Proceeds from sale leaseback transaction | 2,167 | - | ||||
| Net cash used in investing activities | (79,666 | ) | (87,782 | ) | ||
| Cash flows from financing activities: | ||||||
| Proceeds from revolving credit facility | 240,000 | - | ||||
| Repurchase of shares of common stock | (12,621 | ) | (112,050 | ) | ||
| Dividends paid | (24,989 | ) | (39,452 | ) | ||
| Other financing activities, net | (9,955 | ) | (13,018 | ) | ||
| Net cash provided by (used in) financing activities | 192,435 | (164,520 | ) | |||
| Net increase (decrease) in cash and cash equivalents | 174,614 | (65,286 | ) | |||
| Cash and cash equivalents - beginning of period | 107,879 | 210,125 | ||||
| Cash and cash equivalents - end of period | $ | 282,493 | $ | 144,839 |
Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of (Loss) Income from Operations to Restaurant Margin
(in thousands)
(unaudited)
| 13 Weeks Ended | 26 Weeks Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2020 | June 25, 2019 | June 30, 2020 | June 25, 2019 | |||||||||
| (Loss) income from operations | $ | (47,318 | ) | $ | 53,283 | $ | (31,528 | ) | $ | 113,728 | ||
| Less: | ||||||||||||
| Franchise royalties and fees | 3,335 | 5,455 | 8,233 | 10,946 | ||||||||
| Add: | ||||||||||||
| Pre-opening | 4,290 | 4,197 | 9,402 | 8,065 | ||||||||
| Depreciation and amortization | 29,016 | 28,454 | 58,070 | 56,227 | ||||||||
| Impairment and closure, net | (440 | ) | 316 | 155 | 333 | |||||||
| General and administrative | 29,615 | 39,960 | 62,569 | 75,943 | ||||||||
| Restaurant margin | $ | 11,828 | $ | 120,755 | $ | 90,435 | $ | 243,350 | ||||
| Restaurant margin (as a percentage of restaurant and other sales) | 2.5 | % | 17.6 | % | 8.1 | % | 17.8 | % |
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)
| Second Quarter | Change | Year to Date | Change | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | vs LY | 2020 | 2019 | vs LY | |||||||||||||
| Restaurant openings | ||||||||||||||||||
| Company - Texas Roadhouse | 2 | 3 | (1 | ) | 6 | 7 | (1 | ) | ||||||||||
| Company - Bubba's 33 | 1 | 0 | 1 | 2 | 0 | 2 | ||||||||||||
| Company - Other | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
| Franchise - Texas Roadhouse - U.S. | 0 | 1 | (1 | ) | 1 | 1 | 0 | |||||||||||
| Franchise - Texas Roadhouse - International | 0 | 1 | (1 | ) | 0 | 3 | (3 | ) | ||||||||||
| Total | 3 | 5 | (2 | ) | 9 | 11 | (2 | ) | ||||||||||
| Restaurant closures | ||||||||||||||||||
| Company - Texas Roadhouse | (1 | ) | 0 | (1 | ) | (1 | ) | 0 | (1 | ) | ||||||||
| Company - Bubba's 33 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
| Company - Other | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
| Franchise - Texas Roadhouse - International | (2 | ) | (2 | ) | 0 | (2 | ) | (2 | ) | 0 | ||||||||
| Total | (3 | ) | (2 | ) | (1 | ) | (3 | ) | (2 | ) | (1 | ) | ||||||
| Restaurants open at the end of the quarter (1) | ||||||||||||||||||
| Company - Texas Roadhouse | 489 | 471 | 18 | |||||||||||||||
| Company - Bubba's 33 | 30 | 25 | 5 | |||||||||||||||
| Company - Other | 2 | 2 | 0 | |||||||||||||||
| Franchise - Texas Roadhouse - U.S. | 70 | 70 | 0 | |||||||||||||||
| Franchise - Texas Roadhouse - International | 26 | 23 | 3 | |||||||||||||||
| Total | 617 | 591 | 26 | |||||||||||||||
| Company restaurants | ||||||||||||||||||
| Restaurant and other sales | $ | 473,090 | $ | 684,373 | (30.9 | )% | $ | 1,120,716 | $ | 1,369,490 | (18.2 | )% | ||||||
| Store weeks | 6,742 | 6,460 | 4.4 | % | 13,463 | 12,846 | 4.8 | % | ||||||||||
| Comparable restaurant sales growth (2) | (32.8 | )% | 4.7 | % | (20.5 | )% | 5.0 | % | ||||||||||
| Texas Roadhouse restaurants only: | ||||||||||||||||||
| Comparable restaurant sales growth (2) | (32.4 | )% | 4.6 | % | (20.2 | )% | 4.9 | % | ||||||||||
| Average unit volume (3) | $ | 935 | $ | 1,384 | (32.5 | )% | $ | 2,218 | $ | 2,786 | (20.4 | )% | ||||||
| Weekly sales by group: | ||||||||||||||||||
| Comparable restaurants (454 units) | $ | 72,005 | ||||||||||||||||
| Average unit volume restaurants (20 units) (4) | $ | 69,174 | ||||||||||||||||
| Restaurants less than 6 months old (15 units) | $ | 61,781 | ||||||||||||||||
| Restaurant operating costs (as a % of restaurant and other sales) | ||||||||||||||||||
| Cost of sales | 34.7 | % | 32.3 | % | 234 | bps | 33.4 | % | 32.5 | % | 90 | bps | ||||||
| Labor | 41.1 | % | 32.9 | % | 819 | bps | 38.9 | % | 32.8 | % | 606 | bps | ||||||
| Rent | 2.8 | % | 1.9 | % | 89 | bps | 2.4 | % | 1.9 | % | 47 | bps | ||||||
| Other operating | 18.9 | % | 15.2 | % | 372 | bps | 17.3 | % | 15.0 | % | 226 | bps | ||||||
| Total | 97.5 | % | 82.4 | % | 1,514 | bps | 91.9 | % | 82.2 | % | 970 | bps | ||||||
| Restaurant margin | 2.5 | % | 17.6 | % | (1,514 | )bps | 8.1 | % | 17.8 | % | (970 | )bps | ||||||
| Restaurant margin ($ in thousands) | $ | 11,828 | $ | 120,755 | (90.2 | )% | $ | 90,435 | $ | 243,350 | (62.8 | )% | ||||||
| Restaurant margin $/Store week | $ | 1,754 | $ | 18,692 | (90.6 | )% | $ | 6,717 | $ | 18,943 | (64.5 | )% | ||||||
| Franchise restaurants | ||||||||||||||||||
| Franchise royalties and fees | $ | 3,335 | $ | 5,455 | (38.9 | )% | $ | 8,233 | $ | 10,946 | (24.8 | )% | ||||||
| Store weeks | 1,248 | 1,208 | 3.3 | % | 2,511 | 2,403 | 4.5 | % | ||||||||||
| Comparable restaurant sales growth (2) | (38.2 | )% | 3.7 | % | (23.4 | )% | 3.3 | % | ||||||||||
| U.S. franchise restaurants only: | ||||||||||||||||||
| Comparable restaurant sales growth (2) | (32.1 | )% | 4.3 | % | (20.2 | )% | 4.3 | % | ||||||||||
| Average unit volume (3) | $ | 980 | $ | 1,432 | (31.6 | )% | $ | 2,314 | $ | 2,880 | (19.7 | )% | ||||||
| Pre-opening expense | $ | 4,290 | $ | 4,197 | 2.2 | % | $ | 9,402 | $ | 8,065 | 16.6 | % | ||||||
| Depreciation and amortization | $ | 29,016 | $ | 28,454 | 2.0 | % | $ | 58,070 | $ | 56,227 | 3.3 | % | ||||||
| As a % of revenue | 6.1 | % | 4.1 | % | 197 | bps | 5.1 | % | 4.1 | % | 107 | bps | ||||||
| General and administrative expenses | $ | 29,615 | $ | 39,960 | (25.9 | )% | $ | 62,569 | $ | 75,943 | (17.6 | )% | ||||||
| As a % of revenue | 6.2 | % | 5.8 | % | 42 | bps | 5.5 | % | 5.5 | % | 4 | bps |
(1) Includes one domestic company-owned and five international franchise locations that are temporarily closed.
(2) 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 permanently closed during the period.
(3) 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.
(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.