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Exhibit 99.1
Texas Roadhouse, Inc. Announces Third Quarter 2021 Results
LOUISVILLE, KY. (October 28, 2021) – Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 39 weeks ended September 28, 2021.
Financial Results
Financial results for the 13 and 39 weeks ended September 28, 2021, September 29, 2020, and September 24, 2019 were as follows:
| Third Quarter | ||||||||||||||||||||
| ($000's) | % change | |||||||||||||||||||
| 2021 | 2020 | 2019 | vs. 2020 | vs. 2019 | ||||||||||||||||
| Total revenue | $ | 868,943 | $ | 631,185 | $ | 650,489 | 37.7 | % | 33.6 | % | ||||||||||
| Income from operations | 61,698 | 34,976 | 44,884 | 76.4 | % | 37.5 | % | |||||||||||||
| Net income | 52,606 | 29,230 | 36,531 | 80.0 | % | 44.0 | % | |||||||||||||
| Diluted earnings per share | $ | 0.75 | $ | 0.42 | $ | 0.52 | 79.3 | % | 43.6 | % | ||||||||||
| Year to Date | ||||||||||||||||||||
| % change | ||||||||||||||||||||
| 2021 | 2020 | 2019 | vs. 2020 | vs. 2019 | ||||||||||||||||
| Total revenue | $ | 2,568,360 | $ | 1,760,134 | $ | 2,030,925 | 45.9 | % | 26.5 | % | ||||||||||
| Income from operations | 232,353 | 3,448 | 158,612 | 6638.8 | % | 46.5 | % | |||||||||||||
| Net income | 192,236 | 11,706 | 131,766 | 1542.2 | % | 45.9 | % | |||||||||||||
| Diluted earnings per share | $ | 2.74 | $ | 0.17 | $ | 1.85 | 1535.1 | % | 48.3 | % | ||||||||||
Results for the third quarter included the following:
| · | Comparable restaurant sales at company restaurants increased 30.2% and 22.3% compared to 2020 and 2019, respectively1. Comparable restaurant sales at domestic franchise restaurants increased 33.5% and 20.4% compared to 2020 and 2019, respectively; | |
| · | Average weekly sales at company restaurants were $120,094 of which 15.1% were to-go sales; | |
| · | Seven company restaurants, including one Bubba’s 33 were opened; | |
| · | Restaurant margin, as a percentage of restaurant and other sales, increased 111 basis points to 15.7% compared to the prior year as the increase in comparable restaurant sales was partially offset by higher food and beverage costs. The higher costs were driven by commodity inflation of 13.9% primarily related to higher beef costs. Restaurant margin dollars increased to $135.1 million from $91.1 million in the prior year; |
1 Comparable restaurant sales reflect the change in year-over-year sales for restaurants open a full 18 months before the beginning of the period measured for comparison to 2020 and for restaurants open a full 30 months before the beginning of the period measured for comparison to 2019.
| · | Diluted earnings per share increased to $0.75 from $0.42 in the prior year due to the increase in restaurant margin dollars partially offset by an increase in general and administrative expenses; | |
| · | The Company resumed the repurchase of shares under the stock repurchase program, purchasing 161,034 shares of common stock for $14.7 million; and, | |
| · | The Company ended the quarter with $436.6 million of cash on hand and continued to maintain debt of $190.0 million. |
Results for the year-to-date period included the following highlights:
| · | Comparable restaurant sales at company restaurants increased 39.5% and 17.3% compared to 2020 and 2019, respectively1. Comparable restaurant sales at domestic franchise restaurants increased 38.5% and 14.8% compared to 2020 and 2019, respectively; | |
| · | Average weekly sales at company restaurants were $120,271 of which 18.0% were to-go sales; | |
| · | 18 company restaurants, including four Bubba’s 33, and two franchise restaurants were opened; | |
| · | Restaurant margin, as a percentage of restaurant and other sales, increased 690 basis points to 17.3% compared to the prior year as the increase in comparable restaurant sales was partially offset by higher food and beverage costs as well as the prior year impact of the pandemic. Restaurant margin dollars increased to $440.9 million from $181.6 million in the prior year; and, | |
| · | Diluted earnings per share increased to $2.74 from $0.17 in the prior year due to the increase in restaurant margin dollars partially offset by an increase in general and administrative expenses and income tax expense. |
Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “The demand for our brands has never been stronger, as our operators continue to provide a legendary experience to a historic number of guests. There is no doubt that our industry is being challenged in a number of ways including higher food costs, supply chain shortages, and a tight labor market. We are managing through these pressures and staying committed to our long-term fundamentals. I want to thank our entire team for their legendary dedication and commitment.”
Morgan continued, “Our strong cashflow continues to solidify our financial position and allowed us to resume the repurchase of common stock this quarter, continue our payment of quarterly dividends, open new restaurants, and grow our development pipeline. In addition, we signed the first franchise development agreement for our fast-casual Jaggers concept this quarter. We remain excited about our growth opportunities across all three of our brands.”
Franchise acquisitions
The Company has tentatively agreed to acquire seven franchise restaurants with a targeted close date as of the beginning of our 2022 fiscal year. These acquisitions are subject to the completion of customary negotiations and due diligence.
2021 Outlook
Comparable restaurant sales at company restaurants for the first four weeks of our fourth quarter of fiscal 2021 increased 22.6% and 23.6% compared to our 2020 and 2019 periods, respectively. In addition, the Company recently implemented a menu price increase of 4.2%.
Management updated the following expectations for 2021:
| · | Commodity cost inflation of approximately 10%. |
Management reiterated the following expectations for 2021:
| · | 26 to 29 company restaurant openings across all concepts; | |
| · | Store week growth of approximately 5.0%; and, | |
| · | Total capital expenditures of approximately $200 million. |
2022 Outlook
Management provided the following initial expectations for 2022:
| · | Positive comparable restaurant sales growth including the benefit of 2021 menu pricing actions; | |
| · | 25 to 30 Texas Roadhouse and Bubba’s 33 company restaurant openings; | |
| · | Store week growth of 5% to 6%, excluding the impact of potential franchise acquisitions; |
| · | Commodity cost inflation in the high teens in the first half of 2022; | |
| · | Wage and other inflation of approximately 6%; | |
| · | An effective income tax rate of approximately 15% excluding the impact of any legislative changes enacted; and, | |
| · | Total capital expenditures of approximately $230 million including as many as six relocations. |
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, Inc. is hosting a conference call today, October 28, 2021 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (844) 200-6205 or (929) 526-1599 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (866) 813-9403 or (929) 458-6194 for international calls, and use 963633 as the pass code. There will be a simultaneous Web cast conducted at www.texasroadhouse.com.
About the Company
Texas Roadhouse, Inc. is a growing restaurant company operating predominantly in the casual dining segment that first opened in 1993 and today has grown to over 650 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 pandemic, including reinstated dining room capacity restrictions or closures, 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 29, 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
Michael Bailen
(502) 515-7298
Media
Travis Doster
(502) 638-5457
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
| 13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
| September 28, 2021 | September 29, 2020 | September 28, 2021 | September 29, 2020 | |||||||||||||
| Revenue: | ||||||||||||||||
| Restaurant and other sales | $ | 862,757 | $ | 626,429 | $ | 2,550,124 | $ | 1,747,145 | ||||||||
| Franchise royalties and fees | 6,186 | 4,756 | 18,236 | 12,989 | ||||||||||||
| Total revenue | 868,943 | 631,185 | 2,568,360 | 1,760,134 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Restaurant operating costs (excluding depreciation and amortization shown separately below): | ||||||||||||||||
| Food and beverage | 298,164 | 201,308 | 845,150 | 575,529 | ||||||||||||
| Labor | 286,593 | 217,275 | 832,776 | 652,976 | ||||||||||||
| Rent | 15,089 | 13,723 | 44,497 | 40,445 | ||||||||||||
| Other operating | 127,769 | 102,978 | 386,754 | 296,615 | ||||||||||||
| Pre-opening | 6,740 | 4,894 | 17,327 | 14,296 | ||||||||||||
| Depreciation and amortization | 31,627 | 29,364 | 94,146 | 87,434 | ||||||||||||
| Impairment and closure, net | 29 | 716 | 550 | 871 | ||||||||||||
| General and administrative | 41,234 | 25,951 | 114,807 | 88,520 | ||||||||||||
| Total costs and expenses | 807,245 | 596,209 | 2,336,007 | 1,756,686 | ||||||||||||
| Income from operations | 61,698 | 34,976 | 232,353 | 3,448 | ||||||||||||
| Interest expense, net | 604 | 1,502 | 3,039 | 2,601 | ||||||||||||
| Equity income (loss) from investments in unconsolidated affiliates | 266 | 1 | 288 | (597 | ) | |||||||||||
| Income before taxes | 61,360 | 33,475 | 229,602 | 250 | ||||||||||||
| Income tax expense (benefit) | 7,144 | 3,072 | 31,031 | (13,999 | ) | |||||||||||
| Net income including noncontrolling interests | 54,216 | 30,403 | 198,571 | 14,249 | ||||||||||||
| Less: Net income attributable to noncontrolling interests | 1,610 | 1,173 | 6,335 | 2,543 | ||||||||||||
| Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ | 52,606 | $ | 29,230 | $ | 192,236 | $ | 11,706 | ||||||||
| Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: | ||||||||||||||||
| Basic | $ | 0.75 | $ | 0.42 | $ | 2.76 | $ | 0.17 | ||||||||
| Diluted | $ | 0.75 | $ | 0.42 | $ | 2.74 | $ | 0.17 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 69,808 | 69,446 | 69,745 | 69,410 | ||||||||||||
| Diluted | 70,146 | 69,898 | 70,148 | 69,830 | ||||||||||||
| Cash dividends declared per share | $ | 0.40 | $ | - | $ | 0.80 | $ | 0.36 | ||||||||
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
| September 28, 2021 | December 29, 2020 | |||||||
| Cash and cash equivalents | $ | 436,563 | $ | 363,155 | ||||
| Other current assets, net | 101,352 | 147,496 | ||||||
| Property and equipment, net | 1,139,661 | 1,088,623 | ||||||
| Operating lease right-of-use assets, net | 558,452 | 530,625 | ||||||
| Goodwill | 127,001 | 127,001 | ||||||
| Intangible assets, net | 1,701 | 2,271 | ||||||
| Other assets | 77,823 | 65,990 | ||||||
| Total assets | $ | 2,442,553 | $ | 2,325,161 | ||||
| Current maturities of long-term debt | - | 50,000 | ||||||
| Other current liabilities | 443,854 | 456,318 | ||||||
| Operating lease liabilities, net of current portion | 603,964 | 572,171 | ||||||
| Long-term debt, excluding current maturities | 190,000 | 190,000 | ||||||
| Other liabilities | 124,128 | 113,621 | ||||||
| Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 1,065,174 | 927,505 | ||||||
| Noncontrolling interests | 15,433 | 15,546 | ||||||
| Total liabilities and equity | $ | 2,442,553 | $ | 2,325,161 | ||||
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| 39 Weeks Ended | ||||||||
| September 28, 2021 | September 29, 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income including noncontrolling interests | $ | 198,571 | $ | 14,249 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
| Depreciation and amortization | 94,146 | 87,434 | ||||||
| Share-based compensation expense | 30,797 | 22,070 | ||||||
| Deferred income taxes | (435 | ) | (15,572 | ) | ||||
| Other noncash adjustments, net | 3,268 | 3,717 | ||||||
| Change in working capital | 22,362 | 34,137 | ||||||
| Net cash provided by operating activities | 348,709 | 146,035 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures - property and equipment | (139,001 | ) | (117,521 | ) | ||||
| Proceeds from sale of property and equipment | - | 32 | ||||||
| Proceeds from sale leaseback transactions | 5,588 | 2,167 | ||||||
| Net cash used in investing activities | (133,413 | ) | (115,322 | ) | ||||
| Cash flows from financing activities: | ||||||||
| (Payments on) proceeds from revolving credit facility, net | (50,000 | ) | 240,000 | |||||
| Repurchase of shares of common stock | (14,683 | ) | (12,621 | ) | ||||
| Dividends paid | (55,849 | ) | (24,989 | ) | ||||
| Other financing activities, net | (21,356 | ) | (12,346 | ) | ||||
| Net cash (used in) provided by financing activities | (141,888 | ) | 190,044 | |||||
| Net increase in cash and cash equivalents | 73,408 | 220,757 | ||||||
| Cash and cash equivalents - beginning of period | 363,155 | 107,879 | ||||||
| Cash and cash equivalents - end of period | $ | 436,563 | $ | 328,636 | ||||
Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of Income from Operations to Restaurant Margin
(in thousands)
(unaudited)
| 13 Weeks Ended | ||||||||||||
| September 28, 2021 | September 29, 2020 | September 24, 2019 | ||||||||||
| Income from operations | $ | 61,698 | $ | 34,976 | $ | 44,884 | ||||||
| Less: | ||||||||||||
| Franchise royalties and fees | 6,186 | 4,756 | 5,259 | |||||||||
| Add: | ||||||||||||
| Pre-opening | 6,740 | 4,894 | 4,736 | |||||||||
| Depreciation and amortization | 31,627 | 29,364 | 28,347 | |||||||||
| Impairment and closure, net | 29 | 716 | 61 | |||||||||
| General and administrative | 41,234 | 25,951 | 35,225 | |||||||||
| Restaurant margin | $ | 135,142 | $ | 91,145 | $ | 107,994 | ||||||
| Restaurant margin (as a percentage of restaurant and other sales) | 15.7 | % | 14.5 | % | 16.7 | % | ||||||
| 39 Weeks Ended | ||||||||||||
| September 28, 2021 | September 29, 2020 | September 24, 2019 | ||||||||||
| Income from operations | $ | 232,353 | $ | 3,448 | $ | 158,612 | ||||||
| Less: | ||||||||||||
| Franchise royalties and fees | 18,236 | 12,989 | 16,205 | |||||||||
| Add: | ||||||||||||
| Pre-opening | 17,327 | 14,296 | 12,801 | |||||||||
| Depreciation and amortization | 94,146 | 87,434 | 84,574 | |||||||||
| Impairment and closure, net | 550 | 871 | 394 | |||||||||
| General and administrative | 114,807 | 88,520 | 111,168 | |||||||||
| Restaurant margin | $ | 440,947 | $ | 181,580 | $ | 351,344 | ||||||
| Restaurant margin (as a percentage of restaurant and other sales) | 17.3 | % | 10.4 | % | 17.4 | % | ||||||
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)
| Third Quarter | Change | Year to Date | Change | |||||||||||||||||||||
| 2021 | 2020 | vs 2020 | 2021 | 2020 | vs 2020 | |||||||||||||||||||
| Restaurant openings | ||||||||||||||||||||||||
| Company - Texas Roadhouse | 6 | 4 | 2 | 14 | 10 | 4 | ||||||||||||||||||
| Company - Bubba's 33 | 1 | 1 | 0 | 4 | 3 | 1 | ||||||||||||||||||
| Company - Jaggers | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
| Franchise - Texas Roadhouse - U.S. | 0 | 0 | 0 | 0 | 1 | (1 | ) | |||||||||||||||||
| Franchise - Texas Roadhouse - International | 0 | 1 | (1 | ) | 2 | 1 | 1 | |||||||||||||||||
| Total | 7 | 6 | 1 | 20 | 15 | 5 | ||||||||||||||||||
| Restaurants open at the end of the quarter | ||||||||||||||||||||||||
| Company - Texas Roadhouse | 517 | 493 | 24 | |||||||||||||||||||||
| Company - Bubba's 33 | 35 | 31 | 4 | |||||||||||||||||||||
| Company - Jaggers | 3 | 2 | 1 | |||||||||||||||||||||
| Franchise - Texas Roadhouse - U.S. | 69 | 70 | (1 | ) | ||||||||||||||||||||
| Franchise - Texas Roadhouse - International | 30 | 27 | 3 | |||||||||||||||||||||
| Total | 654 | 623 | 31 | |||||||||||||||||||||
| Third Quarter | Change | Change | ||||||||||||||||
| 2021 | 2020 | 2019 | vs 2020 | vs 2019 | ||||||||||||||
| Company restaurants | ||||||||||||||||||
| Restaurant and other sales | $ | 862,757 | $ | 626,429 | $ | 645,230 | 37.7 | % | 33.7 | % | ||||||||
| Store weeks | 7,164 | 6,810 | 6,509 | 5.2 | % | 10.1 | % | |||||||||||
| Comparable restaurant sales (1) | 30.2 | % | (6.3 | )% | 4.4 | % | ||||||||||||
| Texas Roadhouse restaurants only: | ||||||||||||||||||
| Comparable restaurant sales (1) | 30.6 | % | (6.5 | )% | 4.2 | % | ||||||||||||
| Average unit volume (2) | $ | 1,580 | $ | 1,211 | $ | 1,302 | 30.5 | % | 21.4 | % | ||||||||
| Weekly sales by group: | ||||||||||||||||||
| Comparable restaurants (485, 464, and 441 units respectively) | $ | 121,633 | $ | 93,659 | $ | 100,578 | ||||||||||||
| Average unit volume restaurants (3) (18, 19, and 23 units, respectively) | $ | 118,703 | $ | 80,556 | $ | 95,324 | ||||||||||||
| Restaurants less than 6 months old (14, 10, and 10 units, respectively) | $ | 128,001 | $ | 93,616 | $ | 107,347 | ||||||||||||
| Restaurant operating costs (as a % of restaurant and other sales) | ||||||||||||||||||
| Food and beverage costs | 34.6 | % | 32.1 | % | 31.8 | % | 242 | bps | 276 | bps | ||||||||
| Labor | 33.2 | % | 34.7 | % | 33.8 | % | (147 | )bps | (62 | )bps | ||||||||
| Rent | 1.7 | % | 2.2 | % | 2.0 | % | (44 | )bps | (26 | )bps | ||||||||
| Other operating | 14.8 | % | 16.4 | % | 15.6 | % | (163 | )bps | (80 | )bps | ||||||||
| Total | 84.3 | % | 85.5 | % | 83.3 | % | (111 | )bps | 107 | bps | ||||||||
| Restaurant margin | 15.7 | % | 14.5 | % | 16.7 | % | 111 | bps | (107 | )bps | ||||||||
| Restaurant margin ($ in thousands) | $ | 135,142 | $ | 91,145 | $ | 107,994 | 48.3 | % | 25.1 | % | ||||||||
| Restaurant margin $/Store week | $ | 18,865 | $ | 13,384 | $ | 16,591 | 41.0 | % | 13.7 | % | ||||||||
| Franchise restaurants | ||||||||||||||||||
| Franchise royalties and fees | $ | 6,186 | $ | 4,756 | $ | 5,259 | 30.1 | % | 17.6 | % | ||||||||
| Store weeks | 1,287 | 1,259 | 1,220 | 2.2 | % | 5.5 | % | |||||||||||
| Comparable restaurant sales (1) | 31.2 | % | (11.2 | )% | 2.4 | % | ||||||||||||
| U.S. franchise restaurants only: | ||||||||||||||||||
| Comparable restaurant sales (1) | 33.5 | % | (9.6 | )% | 3.2 | % | ||||||||||||
| Average unit volume (2) | $ | 1,638 | $ | 1,228 | $ | 1,350 | 33.3 | % | 21.3 | % | ||||||||
| Pre-opening expense | $ | 6,740 | $ | 4,894 | $ | 4,736 | 37.7 | % | 42.3 | % | ||||||||
| Depreciation and amortization | $ | 31,627 | $ | 29,364 | $ | 28,347 | 7.7 | % | 11.6 | % | ||||||||
| As a % of revenue | 3.6 | % | 4.7 | % | 4.4 | % | (101 | )bps | (72 | )bps | ||||||||
| General and administrative expenses | $ | 41,234 | $ | 25,951 | $ | 35,225 | 58.9 | % | 17.1 | % | ||||||||
| As a % of revenue | 4.7 | % | 4.1 | % | 5.4 | % | 63 | bps | (67 | )bps | ||||||||
(1) Comparable restaurant sales reflect 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.
(3) 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.
