8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)   October 28, 2019

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 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 October 28, 2019, Texas Roadhouse, Inc. (the “Company”) issued a press release announcing its financial results for the quarter and year ended September 24, 2019.  Attached to this Current Report on Form 8-K as Exhibit 99.1 is a copy of the press release.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

(d)         EXHIBITS

99.1                 Press Release issued by the company on October 28, 2019.

104                  Cover Page lnteractive Data File (the cover page XBRL tags are embedded in the lnline XBRL document).

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.

2

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: October 28, 2019	By:	/s/ Tonya Robinson
		Tonya Robinson
		Chief Financial Officer

3

EX-99.1

Exhibit 99.1

Texas Roadhouse, Inc. Announces Third Quarter 2019 Results

LOUISVILLE, KY. (October 28, 2019) – Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 39 week periods ended September 24, 2019.

	Third Quarter							Year to Date
($000's)	2019		2018		% Change			2019		2018		% Change
Total revenue	$	650,489	$	594,595		9.4	%	$	2,030,925	$	1,851,537		9.7	%
Income from operations		44,884		35,444		26.6	%		158,612		154,582		2.6	%
Net income		36,531		29,125		25.4	%		131,766		127,893		3.0	%
Diluted EPS	$	0.52	$	0.40		29.1	%	$	1.85	$	1.78		3.9	%

Results for the third quarter included the following highlights:

· Comparable restaurant sales increased 4.4% at company restaurants and 3.2% at domestic franchise restaurants;

· Restaurant margin, as a percentage of restaurant and other sales, increased 49 basis points to 16.7%, as lower cost of sales due to the benefit of a higher average check was partially offset by higher labor costs driven by wage rate and other inflation. Restaurant margin dollars increased 12.7% to $108.0 million from $95.8 million in the prior year;

· Diluted earnings per share increased 29.1% to $0.52 from $0.40 in the prior year as higher restaurant margin dollars and a decrease in certain general and administrative expenses were partially offset by higher depreciation and amortization expense;

· Four company restaurants, including one Bubba’s 33 restaurant, and two international franchise restaurants were opened; and

· The Company repurchased 358,381 shares of common stock for $18.9 million.

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

· Comparable restaurant sales increased 4.8% at company restaurants and 4.0% at domestic franchise restaurants;

· Restaurant margin, as a percentage of restaurant and other sales, decreased 46 basis points to 17.4%, as higher labor costs driven by wage rate and other inflation was partially offset by lower cost of sales due to the benefit of a higher average check. Restaurant margin dollars increased 6.9% to $351.3 million from $328.6 million in the prior year;

· Diluted earnings per share increased 3.9% to $1.85 from $1.78 in the prior year;

· 11 company restaurants, including one Bubba’s 33 restaurant, and six, primarily international, franchise restaurants were opened; and

· The Company repurchased 2,455,058 shares of common stock for $131.0 million.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, “We are pleased to deliver a solid quarter of results driven by improved restaurant margins and comparable restaurant sales growth of 4.4%.  Our operators continue to execute on our core strategy of getting guests in the door and providing a legendary experience.”

Taylor continued, “On the development front, our restaurant pipeline is as strong as it has ever been.  In 2020 we are targeting at least 30 company restaurant openings and our franchise partners are targeting an additional eight restaurant openings.  As we head into 2020, we are excited about the growth opportunities and the strength of our business.”

2019 Outlook

Comparable restaurant sales at company restaurants for the first four weeks of our fourth quarter of fiscal 2019 increased 5.3% compared to the prior year period.

Management updated the following expectations for 2019:

· Approximately 22 company restaurant openings, including as many as three Bubba’s 33 restaurants;

· Commodity cost inflation of 1.5% to 2.0%;

· Growth in total labor dollars per store week of 6.0% to 7.0%; and

· Total capital expenditures of approximately $200 million.

Management reiterated the following expectations for 2019:

· Positive comparable restaurant sales growth; and

· An income tax rate of 14.0% to 15.0%.

2020 Outlook

Management provided the following initial expectations for 2020:

· Positive comparable restaurant sales growth;

· At least 30 company restaurant openings, including as many as eight Bubba’s 33 restaurants;

· Store week growth of 3.5% to 4.5%, including the negative impact of lapping the 53^rd week from 2019;

· Commodity cost inflation of 1.0% to 2.0%;

· Mid-single digit growth in labor dollars per store week;

· An income tax rate of 14.0% to 15.0%; and

· Total capital expenditures of $190 million to $200 million.

Non-GAAP Measures

We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). Within our press release, we make reference to restaurant margin (in dollars and as a percentage of 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, we exclude 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. We also exclude depreciation and amortization expense, substantially all of which relates to restaurant-level assets, as it represents a non-cash charge for the investment in our restaurants. We also exclude impairment and closure expense as we believe 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 our 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, October 28, 2019 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 5096392 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 600 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 that are not historical facts, including, without limitation, those relating to our anticipated financial performance, are forward-looking statements that involve risks and uncertainties. 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, the actual number of restaurants opening; the sales at these and our other company and franchise restaurants; changes in restaurant development or operating costs, such as food and labor; our ability to acquire franchise restaurants; our ability to integrate the franchise restaurants we acquire or other concepts we develop; our ability to continue to generate the necessary cash flows to fund our new restaurant growth, continue our share repurchase program and pay a quarterly cash dividend; strength of consumer spending; pending or future legal claims; breaches of security; 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; acts of war or terrorism and other factors disclosed from time to time in our filings with the U.S. 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

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)

	13 Weeks Ended						39 Weeks Ended
	September 24, 2019			September 25, 2018			September 24, 2019		September 25, 2018
Revenue:
Restaurant and other sales	$	645,230		$	589,704		$	2,014,720	$	1,836,179
Franchise royalties and fees		5,259			4,891			16,205		15,358
Total revenue		650,489			594,595			2,030,925		1,851,537
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Cost of sales		205,158			191,990			650,136		598,824
Labor		218,342			197,621			667,712		593,298
Rent		12,994			12,330			39,173		36,300
Other operating		100,742			91,946			306,355		279,182
Pre-opening		4,736			4,378			12,801		13,529
Depreciation and amortization		28,347			25,843			84,574		75,492
Impairment and closure		61			20			394		128
General and administrative		35,225			35,023			111,168		100,202
Total costs and expenses		605,605			559,151			1,872,313		1,696,955
Income from operations		44,884			35,444			158,612		154,582
Interest income (expense), net		81			(168	)		1,526		(810	)
Equity income from investments in unconsolidated affiliates		(154	)		381			100		1,150
Income before taxes		44,811			35,657			160,238		154,922
Provision for income taxes		6,785			5,398			23,331		22,321
Net income including noncontrolling interests		38,026			30,259			136,907		132,601
Less: Net income attributable to noncontrolling interests		1,495			1,134			5,141		4,708
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	$	36,531		$	29,125		$	131,766	$	127,893
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
Basic	$	0.53		$	0.41		$	1.86	$	1.79
Diluted	$	0.52		$	0.40		$	1.85	$	1.78
Weighted average shares outstanding:
Basic		69,573			71,508			70,896		71,429
Diluted		69,939			72,006			71,287		71,906
Cash dividends declared per share	$	0.30		$	0.25		$	0.90	$	0.75

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

	September 24, 2019		December 25, 2018
Cash and cash equivalents	$	99,540	$	210,125
Other current assets, net		65,122		134,894
Property and equipment, net		1,020,167		956,676
Operating lease right-of-use asset, net		495,419		-
Goodwill		123,220		123,220
Intangible assets, net		1,375		1,959
Other assets		50,718		42,402
Total assets	$	1,855,561	$	1,469,276
Other current liabilities		332,272		385,142
Operating lease liabilities, net of current portion		532,480		-
Other liabilities		82,112		123,426
Texas Roadhouse, Inc. and subsidiaries stockholders' equity		893,975		945,569
Noncontrolling interests		14,722		15,139
Total liabilities and equity	$	1,855,561	$	1,469,276

Note:  Beginning in 2019, we adopted Accounting Standards Codification 842, Leases, which requires the recognition of an operating lease right-of-use asset and operating lease liability for virtually all leases.

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	39 Weeks Ended
	September 24, 2019			September 25, 2018
Cash flows from operating activities:
Net income including noncontrolling interests	$	136,907		$	132,601
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		84,574			75,492
Share-based compensation expense		25,016			24,820
Other noncash adjustments, net		881			6,872
Change in working capital		(5,381	)		(14,206	)
Net cash provided by operating activities		241,997			225,579
Cash flows from investing activities:
Capital expenditures - property and equipment		(144,917	)		(110,906	)
Proceeds from sale of property and equipment		351			-
Net cash used in investing activities		(144,566	)		(110,906	)
Cash flows from financing activities:
Principal payments on long-term debt and capital lease obligation		-			(50,007	)
Repurchase shares of common stock		(130,963	)		-
Dividends paid		(60,675	)		(50,666	)
Other financing activities, net		(16,378	)		(13,728	)
Net cash used in financing activities		(208,016	)		(114,401	)
Net (decrease) increase in cash and cash equivalents		(110,585	)		272
Cash and cash equivalents - beginning of period		210,125			150,918
Cash and cash equivalents - end of period	$	99,540		$	151,190

Texas Roadhouse, Inc. and Subsidiaries

Reconciliation of Income from Operations to Restaurant Margin

(in thousands)

(unaudited)

	13 Weeks Ended						39 Weeks Ended
	September 24, 2019			September 25, 2018			September 24, 2019			September 25, 2018
Income from operations	$	44,884		$	35,444		$	158,612		$	154,582
Less:
Franchise royalties and fees		5,259			4,891			16,205			15,358
Add:
Pre-opening		4,736			4,378			12,801			13,529
Depreciation and amortization		28,347			25,843			84,574			75,492
Impairment and closure		61			20			394			128
General and administrative		35,225			35,023			111,168			100,202
Restaurant margin	$	107,994		$	95,817		$	351,344		$	328,575
Restaurant margin (as a percentage of restaurant and other sales)		16.7	%		16.2	%		17.4	%		17.9	%

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
	2019			2018			vs LY			2019			2018			vs LY
Restaurant openings
Company - Texas Roadhouse		3			3			0			10			13			(3	)
Company - Bubba's 33		1			0			1			1			4			(3	)
Company - Other		0			0			0			0			0			0
Franchise - Texas Roadhouse - U.S.		0			0			0			1			0			1
Franchise - Texas Roadhouse - International		2			1			1			5			4			1
Total		6			4			2			17			21			(4	)
Restaurant closures
Franchise - Texas Roadhouse - International		0			0			0			(2	)		0			(2	)
Total		0			0			0			(2	)		0			(2	)
Restaurants open at the end of the quarter
Company - Texas Roadhouse		474			453			21
Company - Bubba's 33		26			24			2
Company - Other		2			2			0
Franchise - Texas Roadhouse - U.S.		70			70			0
Franchise - Texas Roadhouse - International		25			21			4
Total		597			570			27
Company restaurants
Restaurant and other sales	$	645,230		$	589,704			9.4	%	$	2,014,720		$	1,836,179			9.7	%
Store weeks		6,509			6,196			5.0	%		19,355			18,386			5.3	%
Comparable restaurant sales growth (1)		4.4	%		5.5	%					4.8	%		5.4	%
Texas Roadhouse restaurants only:
Comparable restaurant sales growth (1)		4.2	%		5.5	%					4.7	%		5.3	%
Average unit volume (2)	$	1,304		$	1,254			4.0	%	$	4,118		$	3,953			4.2	%
Weekly sales by group:
Comparable restaurants (441 units)	$	100,578
Average unit volume restaurants (23 units) (3)	$	95,324
Restaurants less than 6 months old (10 units)	$	107,347
Restaurant operating costs (as a % of restaurant and other sales)
Cost of sales		31.8	%		32.6	%		(76	)bps		32.3	%		32.6	%		(34	)bps
Labor		33.8	%		33.5	%		33	bps		33.1	%		32.3	%		83	bps
Rent		2.0	%		2.1	%		(8	)bps		1.9	%		2.0	%		(3	)bps
Other operating		15.6	%		15.6	%		2	bps		15.2	%		15.2	%		0	bps
Total		83.3	%		83.8	%		(49	)bps		82.6	%		82.1	%		46	bps
Restaurant margin		16.7	%		16.2	%		49	bps		17.4	%		17.9	%		(46	)bps
Restaurant margin ($ in thousands)	$	107,994		$	95,817			12.7	%	$	351,344		$	328,575			6.9	%
Restaurant margin $/Store week	$	16,591		$	15,464			7.3	%	$	18,153		$	17,871			1.6	%
Franchise restaurants
Franchise royalties and fees	$	5,259		$	4,891			7.5	%	$	16,205		$	15,358			5.5	%
Store weeks		1,220			1,175			3.8	%		3,623			3,478			4.2	%
Comparable restaurant sales growth (1)		2.4	%		1.8	%					3.0	%		2.0	%
U.S. franchise restaurants only:
Comparable restaurant sales growth (1)		3.2	%		4.2	%					4.0	%		4.1	%
Average unit volume (2)	$	1,346		$	1,304			3.2	%	$	4,243		$	4,081			4.0	%
Pre-opening expense	$	4,736		$	4,378			8.2	%	$	12,801		$	13,529			(5.4	)%
Depreciation and amortization	$	28,347		$	25,843			9.7	%	$	84,574		$	75,492			12.0	%
As a % of revenue		4.4	%		4.3	%		1	bps		4.2	%		4.1	%		9	bps
General and administrative expenses	$	35,225		$	35,023			0.6	%	$	111,168		$	100,202			10.9	%
As a % of revenue		5.4	%		5.9	%		(48	)bps		5.5	%		5.4	%		6	bps

(1)  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 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 any sales at restaurants 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.

XML

Cover	Oct. 28, 2019
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 28, 2019
Entity File Number	000-50972
Entity Registrant Name	TEXAS ROADHOUSE, INC.
Entity Central Index Key	0001289460
Entity Tax Identification Number	20-1083890
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	6040 Dutchmans Lane
Entity Address, City or Town	Louisville
Entity Address, State or Province	KY
Entity Address, Postal Zip Code	40205
City Area Code	502
Local Phone Number	426-9984
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	TXRH
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false