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):
July 22, 2013
THE CHEESECAKE FACTORY INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
Delaware |
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0-20574 |
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51-0340466 |
(State or other jurisdiction |
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(Commission File Number) |
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(IRS Employer Identification |
26901 Malibu Hills Road
Calabasas Hills, California 91301
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code:
(818) 871-3000
Not Applicable
(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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14.d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following information is intended to be furnished under Item 2.02 of Form 8-K, Results of Operations and Financial Condition. This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this report, regardless of any general incorporation language in the filing.
In a press release dated July 24, 2013, The Cheesecake Factory Incorporated (the Company) announced financial results for the Companys second quarter of fiscal 2013, which ended on July 2, 2013. The full text of the press release is furnished herewith as Exhibit 99.1 to this Report.
ITEM 8.01 OTHER EVENTS
On July 22, 2013, the Board of Directors of the Company approved the terms of a share repurchase plan with J.P. Morgan Securities LLC (J.P. Morgan) pursuant to which the Company is authorized to repurchase shares of its common stock in open market transactions in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, such plan to be effective from July 29, 2013 through August 15, 2013. In conjunction with the Companys 10b5-1 Plan (as defined below), the Company expects to allocate as much as $125 million toward share repurchases in the second half of fiscal 2013.
The Company previously disclosed on Form 8-K, filed on May 29, 2013, that it entered into a prearranged stock repurchase plan with J.P. Morgan intended to qualify for the safe harbor under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (10b5-1 Plan). The 10b5-1 Plan became effective on July 5, 2013 and will terminate on December 31, 2013, unless terminated sooner in accordance with its terms.
On July 22, 2013, the Board of Directors of the Company increased the existing authorization to repurchase shares of the Companys common stock from 41 million shares to 48.5 million shares. The share repurchase authorization does not have an expiration date, does not require us to purchase a specific number of shares and may be modified, suspended or terminated at any time.
On July 22, 2013, the Board of Directors of the Company declared a quarterly cash dividend to its stockholders. A dividend of $0.14 per share will be paid on August 20, 2013 to the stockholders of record on August 7, 2013 of each share of the Companys common stock. Future dividends, if any, will be subject to Board approval. On July 24, 2013, the Company included in its press release, attached hereto as Exhibit 99.1 and described in Item 2.02 above, an announcement of the declaration of the dividend. The full text of the press release is furnished as Exhibit 99.1 to this Report and is hereby incorporated by reference.
The information furnished in Item 8.01 of this Report, including the exhibits incorporated by reference, will not be treated as filed for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. This information will not be deemed incorporated by reference into a filing under the Securities Act of 1933, or into another filing under the Exchange Act, unless that filing expressly refers to specific information in this Report.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
99.1 Press release dated July 24, 2013 entitled, The Cheesecake Factory Reports Results for Second Quarter of Fiscal 2013
SIGNATURES
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 hereunto duly authorized.
Date: July 24, 2013 |
THE CHEESECAKE FACTORY INCORPORATED | |
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By: |
/s/ W. Douglas Benn |
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W. Douglas Benn |
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Executive Vice President and Chief Financial Officer |
Exhibit 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE |
Contact: Jill Peters |
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(818) 871-3000 |
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investorrelations@thecheesecakefactory.com |
THE CHEESECAKE FACTORY REPORTS RESULTS FOR
SECOND QUARTER OF FISCAL 2013
Company Announces 17 Percent Increase In Quarterly Dividend and
Increase In Share Repurchase Authorization
Calabasas Hills, CA July 24, 2013 The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported financial results for the second quarter of fiscal 2013, which ended on July 2, 2013.
Total revenues were $470.1 million in the second quarter of fiscal 2013 as compared to $454.7 million in the prior year second quarter. Net income and diluted net income per share were $28.6 million and $0.52, respectively, in the second quarter of fiscal 2013.
The Company recorded a pre-tax charge during the second quarter of fiscal 2013 related to the planned relocation of two The Cheesecake Factory restaurants. The amount of the charge was approximately $1.5 million, which decreased diluted net income per share by approximately $0.02. Excluding this item, net income was $29.5 million and diluted net income per share was $0.54.
Operating Results
Comparable restaurant sales at The Cheesecake Factory and Grand Lux Cafe increased 0.8% in the second quarter of fiscal 2013.
By concept, comparable restaurant sales grew 0.9% at The Cheesecake Factory and grew 0.1% at Grand Lux Cafe.
We delivered our 14th consecutive quarter of positive comparable sales in the second quarter, and we continued to outperform the industry. Our strategy is to leverage the strength of our brand to drive sales at full margins. We can accomplish this because our concept is highly differentiated, relevant to consumer tastes and preferences, and we execute very well on food and service, said David Overton, Chairman and Chief Executive Officer. We increased our operating margins, as we make ongoing progress toward recapturing our peak margin levels. Our improvement in profitability was accomplished while maintaining excellent guest satisfaction scores, delivering the high quality, consistent dining experience that we are known for, continued Overton.
26901 Malibu Hills Road, Calabasas Hills, CA 91301 · Telephone (818) 871-3000 · Fax (818) 871-3100
Development
The Company continues to expect to open as many as eight to ten new restaurants in fiscal 2013, of which one new restaurant opened in the second quarter in Knoxville, Tennessee.
Internationally, the Company now expects one new The Cheesecake Factory restaurant to open in the Middle East during fiscal 2013 under a licensing agreement.
Capital Allocation
The Company also announced today that its Board of Directors approved an increase in its quarterly dividend equating to 17%. The Companys Board of Directors declared a quarterly cash dividend of $0.14 per share on the Companys common stock. The dividend is payable on August 20, 2013 to shareholders of record at the close of business on August 7, 2013.
During the second quarter of fiscal 2013, the Company repurchased 87 thousand shares of its common stock at a cost of $3.3 million. Year-to-date, the Company repurchased 1.3 million shares of its common stock at a cost of $45.3 million.
The Company now expects to allocate as much as $125 million toward share repurchases in the second half of fiscal 2013. In addition, the Companys Board of Directors increased its share repurchase authorization by 7.5 million shares to 48.5 million shares.
With industry-leading average restaurant volumes above $10 million per year, our restaurants generate a substantial amount of cash. The increase in our quarterly dividend and significant amount of planned share repurchases over the next six months reflect our commitment to effectively utilize our capital to increase shareholder value, concluded Overton.
Conference Call and Webcast
A conference call to review the Companys results for the second quarter of fiscal 2013 will be held today at 2:15 p.m. Pacific Time. The conference call will be broadcast live over the Internet and a replay will be available shortly after the call and continue through August 24, 2013. To listen to the conference call, please go to the Companys website at www.thecheesecakefactory.com at least 15 minutes prior to the start of the call to register and download any necessary audio software. Click on the Investors link on the home page and select the conference call link at the top of the page.
About The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated created the upscale casual dining segment in 1978 with the introduction of its namesake concept. The Company operates 175 full-service, casual dining restaurants throughout the U.S., including 163 restaurants under The Cheesecake Factory® mark; 11 restaurants under the Grand Lux Cafe® mark; and one restaurant under the RockSugar Pan Asian Kitchen® mark. Internationally, three The Cheesecake Factory® restaurants operate under a licensing agreement. The Company also operates two bakery production facilities in Calabasas Hills, CA and Rocky Mount, NC that produce over 70 varieties of quality cheesecakes and other baked products. To learn more about the Company, visit www.thecheesecakefactory.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements, including uncertainties related to: the Companys ability to deliver comparable sales increases and leverage those sales increases; the Companys ability to outperform the casual dining industry; the Companys ability to increase sales at full margins; the Companys ability to maintain its relevance to consumers; the Companys ability to deliver operating margin and earnings per share growth; the Companys ability to increase its guest satisfaction scores; the Companys ability to continue to expand domestically and internationally; the Companys ability to increase shareholder value through dividends and share repurchases; factors outside of the Companys control that impact consumer confidence and spending; current and future macro national and regional economic and credit market conditions; changes in national and regional unemployment rates; the economic health of the Companys landlords and other tenants in retail centers in which its restaurants are located; the economic health of suppliers, vendors and other third parties providing goods or services to the Company; adverse weather conditions in regions in which the Companys restaurants are located; factors that are under the control of government agencies, landlords and other third parties; and other risks and uncertainties detailed from time to time in the Companys filings with the Securities and Exchange Commission (SEC), as set forth below. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. Forward-looking statements speak only as of the dates on which they are made and the Company undertakes no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by securities laws. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements and the discussion of risk factors contained in the Companys latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K as filed with the SEC, which are available at www.sec.gov.
The Cheesecake Factory Incorporated and Subsidiaries
Consolidated Financial Statements
(unaudited; in thousands, except per share and statistical data)
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13 Weeks Ended |
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13 Weeks Ended |
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26 Weeks Ended |
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26 Weeks Ended |
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July 2, 2013 |
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July 3, 2012 |
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July 2, 2013 |
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July 3, 2012 |
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Consolidated Statements of Operations |
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Amounts |
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Percent of |
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Amounts |
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Percent of Revenue |
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Amounts |
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Percent of |
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Amounts |
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Percent of |
| ||||
Revenues |
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$ |
470,118 |
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100.0 |
% |
$ |
454,749 |
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100.0 |
% |
$ |
933,136 |
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100.0 |
% |
$ |
890,503 |
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100.0 |
% |
Costs and expenses: |
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Cost of sales |
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112,947 |
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24.0 |
% |
111,019 |
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24.4 |
% |
227,240 |
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24.3 |
% |
218,617 |
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24.5 |
% | ||||
Labor expenses |
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151,162 |
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32.2 |
% |
146,086 |
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32.1 |
% |
302,145 |
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32.4 |
% |
289,066 |
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32.5 |
% | ||||
Other operating costs and expenses |
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113,805 |
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24.2 |
% |
108,870 |
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23.9 |
% |
224,783 |
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24.1 |
% |
214,758 |
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24.1 |
% | ||||
General and administrative expenses |
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27,811 |
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5.9 |
% |
26,278 |
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5.8 |
% |
56,600 |
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6.1 |
% |
54,943 |
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6.2 |
% | ||||
Depreciation and amortization expenses |
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19,215 |
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4.1 |
% |
18,509 |
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4.1 |
% |
38,445 |
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4.1 |
% |
36,807 |
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4.1 |
% | ||||
Impairment of assets and lease terminations |
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1,505 |
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0.3 |
% |
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0.0 |
% |
2,149 |
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0.2 |
% |
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0.0 |
% | ||||
Preopening costs |
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2,503 |
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0.5 |
% |
3,017 |
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0.7 |
% |
3,817 |
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0.4 |
% |
5,123 |
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0.6 |
% | ||||
Total costs and expenses |
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428,948 |
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91.2 |
% |
413,779 |
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91.0 |
% |
855,179 |
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91.6 |
% |
819,314 |
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92.0 |
% | ||||
Income from operations |
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41,170 |
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8.8 |
% |
40,970 |
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9.0 |
% |
77,957 |
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8.4 |
% |
71,189 |
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8.0 |
% | ||||
Interest and other (expense)/income, net |
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(1,271 |
) |
(0.3 |
)% |
(838 |
) |
(0.2 |
)% |
(2,581 |
) |
(0.3 |
)% |
(1,986 |
) |
(0.2 |
)% | ||||
Income before income taxes |
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39,899 |
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8.5 |
% |
40,132 |
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8.8 |
% |
75,376 |
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8.1 |
% |
69,203 |
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7.8 |
% | ||||
Income tax provision |
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11,316 |
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2.4 |
% |
11,733 |
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2.6 |
% |
21,501 |
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2.3 |
% |
20,082 |
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2.3 |
% | ||||
Net income |
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$ |
28,583 |
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6.1 |
% |
$ |
28,399 |
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6.2 |
% |
$ |
53,875 |
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5.8 |
% |
$ |
49,121 |
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5.5 |
% |
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Basic net income per share |
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$ |
0.54 |
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$ |
0.53 |
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$ |
1.02 |
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$ |
0.92 |
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Basic weighted average shares outstanding |
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52,892 |
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53,155 |
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52,574 |
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53,417 |
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Diluted net income per share |
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$ |
0.52 |
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$ |
0.52 |
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$ |
0.99 |
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$ |
0.89 |
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Diluted weighted average shares outstanding |
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55,073 |
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55,091 |
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54,692 |
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55,376 |
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Selected Segment Information |
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Revenues: |
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| ||||
The Cheesecake Factory restaurants |
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$ |
424,845 |
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$ |
408,933 |
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$ |
837,396 |
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$ |
799,680 |
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Other |
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45,273 |
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45,816 |
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95,740 |
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90,823 |
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| ||||
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$ |
470,118 |
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$ |
454,749 |
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$ |
933,136 |
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$ |
890,503 |
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Income from operations: |
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The Cheesecake Factory restaurants |
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$ |
62,718 |
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$ |
64,820 |
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$ |
121,955 |
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$ |
118,631 |
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Other |
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5,106 |
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3,218 |
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9,606 |
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6,729 |
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Corporate |
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(26,654 |
) |
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(27,068 |
) |
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(53,604 |
) |
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|
(54,171 |
) |
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| ||||
|
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$ |
41,170 |
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|
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$ |
40,970 |
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$ |
77,957 |
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|
|
$ |
71,189 |
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Selected Consolidated Balance Sheet Information |
|
July 2, 2013 |
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January 1, 2013 |
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| ||
Cash and cash equivalents |
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$ |
130,623 |
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$ |
83,569 |
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Total assets |
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1,124,887 |
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1,092,167 |
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Total liabilities |
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490,591 |
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512,441 |
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| ||
Stockholders equity |
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634,296 |
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579,726 |
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|
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| ||
|
|
13 Weeks Ended |
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13 Weeks Ended |
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26 Weeks Ended |
|
26 Weeks Ended |
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Supplemental Information |
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July 2, 2013 |
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July 3, 2012 |
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July 2, 2013 |
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July 3, 2012 |
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Comparable restaurant sales percentage change |
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0.8 |
% |
1.7 |
% |
1.1 |
% |
2.0 |
% |
Restaurants opened during period |
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1 |
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1 |
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1 |
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2 |
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Restaurants open at period-end |
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175 |
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172 |
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175 |
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172 |
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Restaurant operating weeks |
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2,263 |
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2,225 |
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4,554 |
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4,437 |
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Reconciliation of Non-GAAP Results to GAAP Results
In addition to the results provided in accordance with Generally Accepted Accounting Principles (GAAP) in this press release, the Company is providing non-GAAP measurements which present the second quarter and year-to-date fiscal 2013 and fiscal 2012 net income and diluted net income per share excluding the impact from certain items. Additional detail regarding the second quarter fiscal 2013 item can be found on the first page of this press release.
The non-GAAP measurements are intended to supplement the presentation of the Companys financial results in accordance with GAAP. The Company believes that the presentation of these items provides additional information to facilitate the comparison of past and present financial results.
|
|
13 Weeks Ended |
|
13 Weeks Ended |
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26 Weeks Ended |
|
26 Weeks Ended |
| ||||
|
|
July 2, 2013 |
|
July 3, 2012 |
|
July 2, 2013 |
|
July 3, 2012 |
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(unaudited; in thousands, except per share data) |
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Net income (GAAP) |
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$ |
28,583 |
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$ |
28,399 |
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$ |
53,875 |
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$ |
49,121 |
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After-tax impact from: |
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|
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|
|
|
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| ||||
- Impairment of assets and lease terminations (1) |
|
903 |
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|
1,289 |
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| ||||
- Proceeds from variable life insurance contract (2) |
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|
|
(419 |
) |
|
|
(419 |
) | ||||
Net income (non-GAAP) |
|
$ |
29,486 |
|
$ |
27,980 |
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$ |
55,164 |
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$ |
48,702 |
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|
|
|
|
|
|
|
|
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| ||||
Diluted net income per share (GAAP) |
|
$ |
0.52 |
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$ |
0.52 |
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$ |
0.99 |
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$ |
0.89 |
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After-tax impact from: |
|
|
|
|
|
|
|
|
| ||||
- Impairment of assets and lease terminations (1) |
|
0.02 |
|
|
|
0.02 |
|
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| ||||
- Proceeds from variable life insurance contract (2) |
|
|
|
(0.01 |
) |
|
|
(0.01 |
) | ||||
Diluted net income per share (non-GAAP) |
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$ |
0.54 |
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$ |
0.51 |
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$ |
1.01 |
|
$ |
0.88 |
|
(1) The pre-tax amounts associated with this item were $1,505 in the second quarter of fiscal 2013 and $644 in the first quarter of fiscal 2013, and were recorded in impairment of assets and lease terminations.
(2) This item was non-taxable and was recorded in interest and other (expense)/income, net.
###
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