Texas Roadhouse, Inc. Announces Fourth Quarter 2021 Results

2/22, 10:03 PM (Source: GlobeNewswire)

LOUISVILLE, Ky., Feb. 22, 2022 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 52 weeks ended December 28, 2021.

Financial Results

Financial results for the 13 and 52 weeks ended December 28, 2021 and December 29, 2020, and 14 and 53 weeks ended December 31, 2019 were as follows:

 Fourth Quarter
($000's)      % change
 2021
 2020
 2019
 vs. 2020 vs. 2019
Total revenue$895,586  $637,989  $725,238  40.4% 23.5%
Income from operations 64,839   20,396   53,411  217.9% 21.4%
Net income 53,058   19,549   42,686  171.4% 24.3%
Diluted earnings per share$0.76  $0.28  $0.61  171.7% 24.1%
          
          
 Year to Date
       % change
 2021
 2020
 2019
 vs. 2020 vs. 2019
Total revenue$3,463,946  $2,398,123  $2,756,163  44.4% 25.7%
Income from operations 297,192   23,844   212,023  1146.4% 40.2%
Net income 245,294   31,255   174,452  684.8% 40.6%
Diluted earnings per share$3.50  $0.45  $2.46  682.5% 42.2%

Note: The 53rd week in 2019 resulted in additional revenue of $59.5 million and diluted earnings per share of $0.10 to $0.11.

Results for the fourth quarter included the following:

  • Comparable restaurant sales at company restaurants increased 33.1% and 21.2% compared to 2020 and 2019, respectively1. Comparable restaurant sales at domestic franchise restaurants increased 34.8% and 18.8% compared to 2020 and 2019, respectively;
  • Average weekly sales at company restaurants were $121,976 of which 14.4% were to-go sales;
  • 11 company restaurants, including one Bubba’s 33 and one Jaggers, were opened and two franchise restaurants were opened;
  • Restaurant margin, as a percentage of restaurant and other sales, was 15.8% and restaurant margin dollars were $140.8 million. Restaurant margin benefited by an increase in comparable restaurant sales partially offset by commodity inflation of 17.6% primarily due to higher beef costs;
  • Diluted earnings per share increased to $0.76 from $0.28 in the prior year due to a significant increase in restaurant margin dollars partially offset by an increase in general and administrative expenses and income tax expense;
  • The Company repurchased 423,898 shares of common stock for $37.0 million; and,
  • The Company ended the quarter with $335.6 million of cash on hand and reduced outstanding debt to $100 million.

Results for the year-to-date period included the following highlights:

  • Comparable restaurant sales at company restaurants increased 37.8% and 18.3% compared to 2020 and 2019, respectively1. Comparable restaurant sales at domestic franchise restaurants increased 37.5% and 15.8% compared to 2020 and 2019, respectively;
  • Average weekly sales at company restaurants were $120,706 of which 17.1% were to-go sales;
  • 29 company restaurants, including five Bubba’s 33 and one Jaggers, were opened and four franchise restaurants were opened;
  • Restaurant margin, as a percentage of restaurant and other sales, was 16.9% and restaurant margin dollars were $581.7 million. Restaurant margin benefited by an increase in comparable restaurant sales partially offset by commodity inflation of 10% primarily due to higher beef costs;
  • Diluted earnings per share increased to $3.50 from $0.45 in the prior year due to a significant increase in restaurant margin dollars partially offset by an increase in general and administrative expenses and income tax expense; and,
  • The Company repurchased 584,932 shares of common stock for $51.6 million.

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “We had a historic year in terms of the number of guests that we served and the operating results that we generated. This is all due to the hard work and commitment of our operators and their ability to continue to deliver on our legendary standards in these challenging times. Looking ahead, I am excited about the leadership that we have in place throughout the organization and their ability to keep growing and developing all of our brands.”

Morgan continued, “Our strong cashflow generation allowed us to continue opening new stores as well as getting back to our normal strategy of quarterly cash dividends and share repurchases. In addition, we repaid a significant portion of our outstanding debt during the year. As we transition into 2022, we are well positioned to continue to grow sales, build new restaurants and handle the current inflationary environment.”

_____________________________
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.

Franchise acquisitions

On December 29, 2021, the first day of the 2022 fiscal year, the Company completed the acquisition of seven franchise restaurants in South Carolina and Georgia for an aggregate purchase price of approximately $27 million.

2022 Outlook

Comparable restaurant sales at company restaurants for the first seven weeks of our first quarter of fiscal 2022 increased 20.6% compared to 2021.  

Management updated the following expectations for 2022:

  • Store week growth of approximately 6.5%, including the impact of the seven franchise locations acquired;
  • Approximately 25 Texas Roadhouse and Bubba's 33 company restaurant openings;
  • Commodity cost inflation of approximately 17% in the first half of 2022 and 12% to 14% for the year; and,
  • Wage and other labor inflation of approximately 7%.

Management reiterated the following expectations for 2022:

  • Positive comparable restaurant sales growth including the benefit of 2021 menu pricing actions;
  • 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.

Cash Dividend Payment

On February 17, 2022, our Board of Directors authorized the payment of a quarterly cash dividend of $0.46 per share of common stock. This payment will be distributed on March 25, 2022, to shareholders of record at the close of business on March 9, 2022.

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, February 22, 2022, at 5:00 p.m. Eastern Time to discuss these results. The call will be webcast live from the investor relations portion of the Company's website at www.texasroadhouse.com. Listeners may also access the call by dialing (888) 440-5667 or (646) 960-0476 for international calls and referencing the Texas Roadhouse, Inc. Fourth Quarter 2021 Earnings. A replay of the call will be available until March 3, 2022, by dialing (800) 770-2030 or (647) 362-9199 for international calls.

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 660 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; labor or supply chain shortages or limited availability of staff to meet our business standards; 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 52 Weeks Ended
   December 28, 2021 December 29, 2020 December 28, 2021 December 29, 2020
              
Revenue:           
 Restaurant and other sales$ 889,052  $ 633,032  $ 3,439,176  $ 2,380,177 
 Franchise royalties and fees6,534  4,957  24,770  17,946 
              
Total revenue895,586  637,989  3,463,946  2,398,123 
              
Costs and expenses:           
 Restaurant operating costs (excluding depreciation and amortization shown separately below):           
              
  Food and beverage311,478  205,117  1,156,628  780,646 
  Labor290,227  222,788  1,123,003  875,764 
  Rent15,508  13,956  60,005  54,401 
  Other operating131,054  107,111  517,808  403,726 
 Pre-opening7,008  5,803  24,335  20,099 
 Depreciation and amortization32,615  30,443  126,761  117,877 
 Impairment and closure, net184  1,392  734  2,263 
 General and administrative42,673  30,983  157,480  119,503 
              
Total costs and expenses830,747  617,593  3,166,754  2,374,279 
              
Income from operations64,839  20,396  297,192  23,844 
              
Interest expense, net624  1,490  3,663  4,091 
Equity (loss) income from investments in unconsolidated affiliates(925) 97  (637) (500)
              
Income before taxes63,290  19,003  292,892  19,253 
Income tax expense (benefit)8,547  (1,673) 39,578  (15,672)
              
Net income including noncontrolling interests54,743  20,676  253,314  34,925 
Less: Net income attributable to noncontrolling interests1,685  1,127  8,020  3,670 
Net income attributable to Texas Roadhouse, Inc. and subsidiaries$ 53,058  $ 19,549  $ 245,294  $ 31,255 
              
Net income per common share attributable to Texas Roadhouse, Inc.           
and subsidiaries:           
 Basic$ 0.76  $ 0.28  $ 3.52  $ 0.45 
 Diluted$ 0.76  $ 0.28  $ 3.50  $ 0.45 
              
Weighted average shares outstanding:           
 Basic69,601  69,525  69,709  69,438 
 Diluted69,969  70,052  70,098  69,893 
              
Cash dividends declared per share$ 0.40  $ -  $ 1.20  $ 0.36 
              


 
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
     
     
     
  December 28, 2021 December 29, 2020
     
     
Cash and cash equivalents $335,645  $363,155 
Other current assets, net 227,880  147,496 
Property and equipment, net 1,162,441  1,088,623 
Operating lease right-of-use assets, net 578,413  530,625 
Goodwill 127,001  127,001 
Intangible assets, net 1,520  2,271 
Other assets 79,052  65,990 
         
Total assets $2,511,952  $2,325,161 
         
         
Current maturities of long-term debt -  50,000 
Other current liabilities 602,144  456,318 
Operating lease liabilities, net of current portion 622,892  572,171 
Long-term debt, excluding current maturities 100,000  190,000 
Other liabilities 113,432  113,621 
Texas Roadhouse, Inc. and subsidiaries stockholders' equity 1,058,124  927,505 
Noncontrolling interests 15,360  15,546 
         
Total liabilities and equity $2,511,952  $2,325,161 
     


           
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
         
         
    52 Weeks Ended
    December 28, 2021 December 29, 2020
         
         
Cash flows from operating activities:      
Net income including noncontrolling interests $ 253,314  $ 34,925 
Adjustments to reconcile net income to net cash provided by operating activities      
 Depreciation and amortization 126,761  117,877 
 Share-based compensation expense 38,139  29,431 
 Deferred income taxes 8,896  (19,932)
 Other noncash adjustments, net 5,555  6,262 
Change in working capital 36,161  61,875 
  Net cash provided by operating activities 468,826  230,438 
         
Cash flows from investing activities:      
Capital expenditures - property and equipment (200,692) (154,401)
Acquisition of franchise restaurants, net of cash acquired -  (10,580)
Proceeds from sale of property and equipment -  1,709 
Proceeds from sale leaseback transactions 5,588  2,167 
  Net cash used in investing activities (195,104)  (161,105)
         
Cash flows from financing activities:      
(Payments on) proceeds from revolving credit facility, net (140,000)  240,000 
Repurchase of shares of common stock (51,634)  (12,621)
Dividends paid (83,658)  (24,989)
Other financing activities, net (25,940)  (16,447)
  Net cash (used in) provided by financing activities (301,232)  185,943 
         
  Net (decrease) increase in cash and cash equivalents (27,510)  255,276 
Cash and cash equivalents - beginning of period 363,155  107,879 
Cash and cash equivalents - end of period $ 335,645  $ 363,155 
         


             
Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of Income from Operations to Restaurant Margin
(in thousands)
(unaudited)
          
  13 & 14 Weeks Ended
  December 28, 2021 December 29, 2020 December 31, 2019
          
Income from operations $64,839  $20,396  $53,411 
          
Less:         
Franchise royalties and fees 6,534  4,957  5,781 
          
Add:         
Pre-opening 7,008  5,803  7,355 
Depreciation and amortization 32,615  30,443  30,970 
Impairment and closure, net 184  1,392  (1,293)
General and administrative 42,673  30,983  38,221 
          
Restaurant margin $140,785  $84,060  $122,883 
          
Restaurant margin (as a percentage of restaurant and other sales) 15.8% 13.3% 17.1%
          
          
  52 & 53 Weeks Ended
  December 28, 2021 December 29, 2020 December 31, 2019
          
Income from operations $297,192  $23,844  $212,023 
          
Less:         
Franchise royalties and fees 24,770  17,946  21,986 
          
Add:         
Pre-opening 24,335  20,099  20,156 
Depreciation and amortization 126,761  117,877  115,544 
Impairment and closure, net 734  2,263  (899)
General and administrative 157,480  119,503  149,389 
          
Restaurant margin $581,732  $265,640  $474,227 
          
Restaurant margin (as a percentage of restaurant and other sales) 16.9% 11.2% 17.3%
          


                 
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)
                 
   Fourth QuarterChangeYear to DateChange
   20212020vs 202020212020vs 2020
Restaurant openings              
 Company - Texas Roadhouse98123185
 Company - Bubba's 33101532
 Company - Jaggers110110
 Franchise - Texas Roadhouse - U.S.11012(1)
 Franchise - Texas Roadhouse - International110321
 Total1311233267
                 
                 
Restaurants open at the end of the quarter              
 Company - Texas Roadhouse52650323     
 Company - Bubba's 3336315     
 Company - Jaggers431     
 Franchise - Texas Roadhouse - U.S.70691     
 Franchise - Texas Roadhouse - International31283     
 Total66763433     
                 
   Fourth QuarterChangeChange 
   202120202019vs 2020vs 2019 
                 
Company restaurants (all concepts)              
 Restaurant and other sales$889,052 $633,032 $719,457 40.4%23.6% 
 Store weeks 7,288  6,908  7,118 5.5%2.4% 
 Comparable restaurant sales (1) 33.1% (8.9)% 4.4%     
                 
 Restaurant operating costs (as a % of restaurant and other sales)              
 Food and beverage costs 35.0% 32.4% 32.4%263bps262bps 
 Labor 32.6% 35.2% 33.1%(255)bps(42)bps 
 Rent 1.7% 2.2% 1.9%(46)bps(11)bps 
 Other operating 14.7% 16.9% 15.6%(218)bps(84)bps 
 Total 84.2% 86.7% 82.9%(256)bps124bps 
                 
  Restaurant margin 15.8% 13.3% 17.1%256bps(124)bps 
                 
  Restaurant margin ($ in thousands)$140,785 $84,060 $122,883 67.5%14.6% 
  Restaurant margin $/Store week$19,318 $12,169 $17,264 58.7%11.9% 
                 
 Texas Roadhouse restaurants only:              
  Store weeks 6,779  6,476  6,714 4.7%1.0% 
  Comparable restaurant sales (1) 33.3% (9.0)% 4.3%     
  Average unit volume (2)$1,606 $1,208 $1,336 32.9%20.2% 
  Weekly sales by group:              
  Comparable restaurants (489, 470, and 448 units)$123,860 $93,530 $102,824      
  Average unit volume restaurants (2) (16, 19, and 21 units)$113,657 $78,402 $94,379      
  Restaurants less than 6 months old (21, 14, and 15 units)$130,295 $90,994 $106,328      
                 
 Bubba's 33 restaurants only:              
  Store weeks 463  403  377 15.0%23.0% 
  Comparable restaurant sales (1) 30.8% (7.8)% 5.7%     
  Average unit volume (2)$1,279 $989 $1,093 29.3%17.0% 
  Weekly sales by group:              
  Comparable restaurants (29, 25, and 21 units)$99,465 $77,534 $86,549      
  Average unit volume restaurants (2) (3, 4, and 4 units)$87,844 $66,892 $71,122      
  Restaurants less than 6 months old (4, 2, and 3 units)$136,579 $48,997 $76,778      
                 
Franchise restaurants              
 Franchise royalties and fees$6,534 $4,957 $5,781 31.8%13.0% 
 Store weeks 1,301  1,260  1,330 3.2%(2.2)% 
 Comparable restaurant sales (1) 30.6% (10.7)% 3.0%     
 U.S. franchise restaurants only:              
  Comparable restaurant sales (1) 34.8% (11.2)% 3.4%     
  Average unit volume (2)$1,658 $1,242 $1,387 33.5%19.5% 
                 
(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, excluding sales from restaurants permanently closed during the period.
(2) Average unit volume includes sales from restaurants open for a full six months before the beginning of the period, excluding sales from restaurants permanently closed during the period. For comparative purposes, Q4 2019 was adjusted to include 13 and 52 weeks, respectively.
 
Amounts may not foot due to rounding.
                 


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