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):
February 10, 2014
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 February 12, 2014, The Cheesecake Factory Incorporated (the Company) announced financial results for the Companys fourth quarter of fiscal 2013, which ended on December 31, 2013. The full text of the press release is furnished herewith as Exhibit 99.1 to this Report.
ITEM 8.01 OTHER EVENTS
On February 10, 2014, 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 March 11, 2014 to the stockholders of record on February 26, 2014 of each share of the Companys common stock. Future dividends, if any, will be subject to Board approval. On February 12, 2014, 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 February 12, 2014 entitled, The Cheesecake Factory Reports Results for Fourth 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: February 12, 2014 |
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 |
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Contact: Jill Peters |
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(818) 871-3000 |
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investorrelations@thecheesecakefactory.com |
THE CHEESECAKE FACTORY REPORTS RESULTS FOR
FOURTH QUARTER OF FISCAL 2013
Calabasas Hills, CA February 12, 2014 The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported financial results for the fourth quarter of fiscal 2013, which ended on December 31, 2013.
Total revenues were $475.1 million in the fourth quarter of fiscal 2013 as compared to $464.7 million in the prior year fourth quarter. Net income and diluted net income per share were $33.0 million and $0.62, respectively, in the fourth quarter of fiscal 2013.
The Company recorded a net pre-tax credit during the fourth quarter of fiscal 2013 primarily related to the relocation of two The Cheesecake Factory restaurants. The amount of this credit was $3.8 million, which increased diluted net income per share by approximately $0.04. Excluding this item, net income was $30.7 million and diluted net income per share was $0.57.
Operating Results
Comparable restaurant sales at The Cheesecake Factory and Grand Lux Cafe increased 0.9% in the fourth quarter of fiscal 2013, but were negatively impacted by approximately 0.7% due to severe winter storms. Excluding this weather impact, comparable restaurant sales increased 1.6%.
By concept, comparable restaurant sales grew 1.1% at The Cheesecake Factory and declined 1.1% at Grand Lux Cafe.
Our comparable sales in the fourth quarter were again competitively strong relative to the industry. Underlying business trends at The Cheesecake Factory remain consistentwith particular strength in California, our largest marketas we continue to steadily increase our market share, said David Overton, Chairman and Chief Executive Officer. We ended 2013 with a positive tone. Sales at our newer restaurants are performing well ahead of our company average and we successfully completed three restaurant relocations during the year. Our strategy of selecting premier sites for our restaurants continues to produce dependable results.
26901 Malibu Hills Road, Calabasas Hills, CA 91301 · Telephone (818) 871-3000 · Fax (818) 871-3100
We are honored to be named to Fortune magazines 100 Best Companies to Work For list, which marks a great start to 2014. We believe this recognition will help us to further attract and retain the best talent in the restaurant business, positioning us for success today and into the future. Overall, we expect 2014 to be another year of growth, both domestically and internationally, with expectations for a fifth straight year of higher comparable sales and continuing to deliver earnings per share growth, continued Overton.
Development
The Company opened three new restaurants and relocated three restaurants in the fourth quarter of fiscal 2013, delivering on its objective to open nine Company-owned restaurants during fiscal 2013.
Internationally, one new The Cheesecake Factory restaurant opened in Jeddah, Kingdom of Saudi Arabia in the fourth quarter of fiscal 2013 under a licensing agreement.
In fiscal 2014, the Company continues to expect to open as many as 10 to 12 Company-owned restaurants. Internationally, the Company expects as many as three to five restaurants to open in the Middle East and Mexico under licensing agreements.
Capital Allocation
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 March 11, 2014 to shareholders of record at the close of business on February 26, 2014.
During the fourth quarter of fiscal 2013, the Company repurchased 1.0 million shares of its common stock at a cost of $48.1 million. For the full year of fiscal 2013, the Company repurchased 4.5 million shares of its common stock at a cost of $183.7 million. Including dividends, the Company returned $210.9 million in cash to shareholders in fiscal 2013.
For fiscal 2014, the Company expects that it will return substantially all of its free cash flow to shareholders in the form of dividends and share repurchases.
We continue to allocate capital effectively by investing in new restaurant development, maintaining our existing restaurants, and returning excess cash to shareholders. We are achieving our capital objectives and increasing total shareholder returns at the same time, concluded Overton.
Financial Reporting Dates for Fiscal 2014
The Company plans to announce quarterly financial results and hold conference calls to discuss its results for the first three quarters of fiscal 2014 as outlined below. The earnings press releases will be issued at approximately 1:15 p.m. Pacific Time and the conference calls will follow at 2:00 p.m. Pacific Time on the same day. Dates and times could be subject to change.
Quarter Ending |
Earnings Release and Conference Call Dates |
April 1, 2014 |
April 23, 2014 |
July 1, 2014 |
July 23, 2014 |
September 30, 2014 |
October 22, 2014 |
Conference Call and Webcast
A conference call to review the Companys results for the fourth quarter of fiscal 2013 will be held today at 2:00 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 March 12, 2014. 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 181 full-service, casual dining restaurants throughout the U.S. and Puerto Rico, including 169 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, four 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. In 2014, the Company was named to Fortune magazines 100 Best Companies to Work For list. 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 continue to outperform the casual dining industry; the Companys ability to deliver consistent results; the Companys ability to perform well in its larger markets; the Companys ability to sustain strong performance at its newer restaurants; the Companys ability to identify premier sites for its restaurants; the Companys ability to attract and retain employees; the Companys ability to expand its concepts domestically and internationally, deliver higher comparable sales and earnings per share growth; the Companys ability to continue to generate high levels of cash flow; the Companys ability to utilize its capital effectively and 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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52 Weeks Ended |
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52 Weeks Ended |
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December 31, 2013 |
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January 1, 2013 |
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December 31, 2013 |
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January 1, 2013 |
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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 |
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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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$ |
475,075 |
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100.0 |
% |
$ |
464,695 |
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100.0 |
% |
$ |
1,877,910 |
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100.0 |
% |
$ |
1,809,017 |
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100.0 |
% |
Costs and expenses: |
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Cost of sales |
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116,015 |
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24.4 |
% |
119,916 |
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25.8 |
% |
455,685 |
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24.2 |
% |
450,153 |
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24.9 |
% | ||||
Labor expenses |
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150,014 |
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31.6 |
% |
145,496 |
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31.3 |
% |
603,069 |
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32.1 |
% |
580,192 |
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32.1 |
% | ||||
Other operating costs and expenses |
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113,833 |
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24.0 |
% |
111,101 |
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23.9 |
% |
452,571 |
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24.1 |
% |
439,559 |
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24.3 |
% | ||||
General and administrative expenses |
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29,323 |
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6.2 |
% |
26,763 |
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5.8 |
% |
114,728 |
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6.1 |
% |
104,156 |
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5.7 |
% | ||||
Depreciation and amortization expenses |
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20,452 |
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4.3 |
% |
18,893 |
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4.1 |
% |
78,558 |
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4.2 |
% |
74,433 |
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4.1 |
% | ||||
Impairment of assets and lease terminations |
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(3,807 |
) |
(0.8 |
)% |
9,536 |
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2.0 |
% |
(561 |
) |
(0.0 |
)% |
9,536 |
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0.5 |
% | ||||
Preopening costs |
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4,879 |
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1.0 |
% |
4,804 |
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1.0 |
% |
12,906 |
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0.7 |
% |
12,289 |
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0.7 |
% | ||||
Total costs and expenses |
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430,709 |
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90.7 |
% |
436,509 |
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93.9 |
% |
1,716,956 |
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91.4 |
% |
1,670,318 |
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92.3 |
% | ||||
Income from operations |
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44,366 |
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9.3 |
% |
28,186 |
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6.1 |
% |
160,954 |
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8.6 |
% |
138,699 |
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7.7 |
% | ||||
Interest and other expense, net |
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(1,196 |
) |
(0.2 |
)% |
(1,029 |
) |
(0.3 |
)% |
(4,504 |
) |
(0.3 |
)% |
(4,725 |
) |
(0.3 |
)% | ||||
Income before income taxes |
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43,170 |
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9.1 |
% |
27,157 |
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5.8 |
% |
156,450 |
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8.3 |
% |
133,974 |
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7.4 |
% | ||||
Income tax provision |
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10,170 |
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2.2 |
% |
5,018 |
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1.0 |
% |
42,094 |
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2.2 |
% |
35,551 |
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2.0 |
% | ||||
Net income |
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$ |
33,000 |
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6.9 |
% |
$ |
22,139 |
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4.8 |
% |
$ |
114,356 |
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6.1 |
% |
$ |
98,423 |
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5.4 |
% |
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Basic net income per share |
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$ |
0.64 |
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$ |
0.42 |
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$ |
2.19 |
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$ |
1.85 |
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Basic weighted average shares outstanding |
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51,352 |
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52,948 |
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52,229 |
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53,185 |
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Diluted net income per share |
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$ |
0.62 |
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$ |
0.40 |
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$ |
2.10 |
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$ |
1.78 |
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Diluted weighted average shares outstanding |
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53,604 |
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55,079 |
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54,377 |
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55,211 |
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Selected Segment Information |
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Revenues: |
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The Cheesecake Factory restaurants |
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$ |
425,556 |
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$ |
402,652 |
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$ |
1,688,036 |
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$ |
1,604,825 |
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Other |
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49,519 |
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62,043 |
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189,874 |
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204,192 |
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$ |
475,075 |
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$ |
464,695 |
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$ |
1,877,910 |
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$ |
1,809,017 |
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Income from operations: |
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|
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The Cheesecake Factory restaurants |
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$ |
66,589 |
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$ |
51,518 |
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$ |
250,230 |
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$ |
225,920 |
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Other |
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5,652 |
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1,367 |
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19,985 |
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10,857 |
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Corporate |
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(27,875 |
) |
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(24,699 |
) |
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(109,261 |
) |
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|
(98,078 |
) |
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| ||||
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$ |
44,366 |
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|
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$ |
28,186 |
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$ |
160,954 |
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|
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$ |
138,699 |
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Selected Consolidated Balance Sheet Information |
|
December 31, 2013 |
|
January 1, 2013 |
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Cash and cash equivalents |
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$ |
61,751 |
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$ |
83,569 |
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Total assets |
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1,124,114 |
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1,092,167 |
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Total liabilities |
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546,761 |
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512,441 |
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Stockholders equity |
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577,353 |
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579,726 |
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|
13 Weeks Ended |
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13 Weeks Ended |
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52 Weeks Ended |
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52 Weeks Ended |
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Supplemental Information |
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December 31, 2013 |
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January 1, 2013 |
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December 31, 2013 |
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January 1, 2013 |
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Comparable restaurant sales percentage change |
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0.9 |
% |
0.9 |
% |
1.0 |
% |
1.9 |
% |
Restaurants opened during period |
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6 |
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4 |
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9 |
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8 |
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Restaurants open at period-end |
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180 |
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177 |
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180 |
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177 |
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Restaurant operating weeks |
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2,315 |
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2,271 |
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9,156 |
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8,957 |
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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 fourth quarter and full year fiscal 2013 and fiscal 2012 net income and diluted net income per share excluding the impact from certain items. Additional detail regarding the fourth 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.
|
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13 Weeks Ended |
|
13 Weeks Ended |
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52 Weeks Ended |
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52 Weeks Ended |
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|
|
December 31, 2013 |
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January 1, 2013 |
|
December 31, 2013 |
|
January 1, 2013 |
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(unaudited; in thousands, except per share data) |
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Net income (GAAP) |
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$ |
33,000 |
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$ |
22,139 |
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$ |
114,356 |
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$ |
98,423 |
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After-tax impact from: |
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|
|
|
|
|
|
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| ||||
- Impairment of assets and lease terminations (1) |
|
(2,284 |
) |
5,722 |
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(337 |
) |
5,722 |
| ||||
- Proceeds from variable life insurance contract (2) |
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|
|
|
|
|
|
(419 |
) | ||||
Net income (non-GAAP) |
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$ |
30,716 |
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$ |
27,861 |
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$ |
114,019 |
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$ |
103,726 |
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|
|
|
|
|
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| ||||
Diluted net income per share (GAAP) |
|
$ |
0.62 |
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$ |
0.40 |
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$ |
2.10 |
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$ |
1.78 |
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After-tax impact from: |
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|
|
|
|
|
|
|
| ||||
- Impairment of assets and lease terminations (1) |
|
(0.04 |
) |
0.10 |
|
(0.01 |
) |
0.10 |
| ||||
- Proceeds from variable life insurance contract (2) |
|
|
|
|
|
|
|
(0.01 |
) | ||||
Diluted net income per share (non-GAAP) (3) |
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$ |
0.57 |
|
$ |
0.51 |
|
$ |
2.10 |
|
$ |
1.88 |
|
(1) The pre-tax amounts associated with these items were ($3,807) in the fourth quarter of fiscal 2013, and $1,097, $1,505 and $644 in the third, second and first quarters of fiscal 2013, respectively, as well as $9,536 in the fourth quarter of fiscal 2012. These items were recorded in impairment of assets and lease terminations.
(2) This item was non-taxable and was recorded in interest and other expense, net.
(3) Diluted net income per share may not add due to rounding.
###