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 21, 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 July 23, 2014, The Cheesecake Factory Incorporated (the Company) announced financial results for the Companys second quarter of fiscal 2014, which ended on July 1, 2014. The full text of the press release is furnished herewith as Exhibit 99.1 to this Report.
ITEM 8.01 OTHER EVENTS
On July 21, 2014, the Board of Directors of the Company declared a quarterly cash dividend to its stockholders. A dividend of $0.165 per share will be paid on August 19, 2014 to the stockholders of record on August 6, 2014 of each share of the Companys common stock. Future dividends, if any, will be subject to Board approval. On July 23, 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.
On July 21, 2014, the Board of Directors of the Company approved the terms of a share repurchase plan with Goldman Sachs & Co. (Goldman Sachs ) 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, as amended (10b-18 Plan). The 10b-18 Plan will become effective on July 28, 2014 and terminate on August 12, 2014 unless terminated sooner in accordance with its terms.
On July 21, 2014, the Board of Directors of the Company also approved the adoption of a prearranged stock repurchase plan with Wells Fargo Securities LLC (Wells Fargo ) 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 will become effective on September 5, 2014 and terminate on December 31, 2014, unless terminated sooner in accordance with its terms. Purchases may be made in the open market or through privately negotiated transactions in support of the Companys share repurchase plan. Purchases in the open market will be made in compliance with Rule 10b-18 under the Securities Exchange Act of 1934.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
99.1 |
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Press release dated July 23, 2014 entitled, The Cheesecake Factory Reports Results for Second Quarter of Fiscal 2014 |
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 23, 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: W. Douglas Benn |
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(818) 871-3000 |
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investorrelations@thecheesecakefactory.com |
THE CHEESECAKE FACTORY REPORTS RESULTS FOR
SECOND QUARTER OF FISCAL 2014
Company Announces 18 Percent Increase In Quarterly Dividend
Calabasas Hills, CA July 23, 2014 The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported financial results for the second quarter of fiscal 2014, which ended on July 1, 2014.
Total revenues were $496.4 million in the second quarter of fiscal 2014 as compared to
$470.1 million in the prior year second quarter. Net income and diluted net income per share were
$30.0 million and $0.59, respectively, in the second quarter of fiscal 2014.
The Company recorded a $510,196 pre-tax charge during the second quarter of fiscal 2014 related to the relocation of one The Cheesecake Factory restaurant. Excluding this item, net income was $30.4 million and diluted net income per share remained $0.59.
Operating Results
Comparable restaurant sales at The Cheesecake Factory and Grand Lux Cafe increased 1.2% in the second quarter of fiscal 2014. By concept, comparable restaurant sales grew 1.5% at The Cheesecake Factory and declined 2.7% at Grand Lux Cafe.
Our business is stable and our performance remains consistent, as we delivered our 18th consecutive quarter of positive comparable sales in the second quarter of 2014. We continue to meaningfully outperform the casual dining industry, as we have done each quarter for nearly three years, by staying relevant to consumer tastes and trends, maintaining high standards for quality and providing guests with an exceptional experience, said David Overton, Chairman and Chief Executive Officer. In addition, our key performance indicators, including food efficiencies, guest satisfaction scores, restaurant management retention and labor productivity, are tracking at strong levels, as a result of solid operational execution, continued Overton.
26901 Malibu Hills Road, Calabasas Hills, CA 91301 · Telephone (818) 871-3000 · Fax (818) 871-3100
Development
The Company opened one new restaurant and relocated one restaurant during the second quarter of fiscal 2014. The Company continues to expect to open as many as ten Company-owned restaurants in fiscal 2014.
Internationally, the first The Cheesecake Factory restaurant opened in Mexico last week under a licensing agreement. The Company continues to expect as many as three to four restaurants to open in the Middle East and Mexico under licensing agreements in fiscal 2014.
Capital Allocation
The Company also announced today that its Board of Directors approved an increase in its quarterly dividend equating to 18%. The Companys Board of Directors declared a quarterly cash dividend of $0.165 per share on the Companys common stock. The dividend is payable on August 19, 2014 to shareholders of record at the close of business on August 6, 2014.
During the second quarter of fiscal 2014, the Company repurchased 528,377 shares of its common stock at a cost of $24.2 million. Year-to-date, the Company repurchased 2.6 million shares of its common stock at a cost of $123.2 million. The Company continues to expect that it will return substantially all of its free cash flow to shareholders in fiscal 2014 in the form of dividends and share repurchases.
We are attaining our major milestones this year with successful new Company-owned restaurant openings and execution on international expansion, with the opening of our first restaurant in Mexico and the signing of our third licensing agreement, to expand The Cheesecake Factory in Asia. The confidence we have in our business is high, which led us to significantly increase our quarterly dividend again this year, concluded Overton.
Conference Call and Webcast
A conference call to review the Companys results for the second quarter of fiscal 2014 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 August 23, 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 182 full-service, casual dining restaurants throughout the U.S. and Puerto Rico, including 170 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, five The Cheesecake Factory® restaurants operate under licensing agreements. The Company also operates two bakery production facilities in Calabasas Hills, CA and Rocky Mount, NC that produce approximately 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.
26901 Malibu Hills Road, Calabasas Hills, CA 91301 · Telephone (818) 871-3000 · Fax (818) 871-3100
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 consistent and dependable comparable sales results over a sustained period of time; the Companys ability to continue to outperform the casual dining industry; the Companys ability to remain relevant to consumers, to maintain high quality standards and provide guests with an exceptional experience; the Companys ability to operate efficiently and effectively; the Companys ability to expand its concepts domestically and work with its licensees to expand its concept internationally; 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 macroeconomic conditions; changes in 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.
26901 Malibu Hills Road, Calabasas Hills, CA 91301 · Telephone (818) 871-3000 · Fax (818) 871-3100
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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Consolidated Statements of Operations |
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July 1, 2014 |
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July 2, 2013 |
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July 1, 2014 |
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July 2, 2013 |
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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 |
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Revenues |
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$ |
496,406 |
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100.0% |
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$ |
470,118 |
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100.0% |
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$ |
977,837 |
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100.0% |
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$ |
933,136 |
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100.0% |
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Costs and expenses: |
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Cost of sales |
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120,667 |
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24.3% |
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112,947 |
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24.0% |
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240,029 |
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24.5% |
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227,240 |
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24.3% |
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Labor expenses |
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160,777 |
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32.4% |
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151,162 |
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32.2% |
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320,227 |
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32.7% |
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302,145 |
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32.4% |
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Other operating costs and expenses |
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119,577 |
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24.1% |
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113,805 |
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24.2% |
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235,210 |
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24.1% |
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224,783 |
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24.1% |
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General and administrative expenses |
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29,042 |
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5.9% |
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27,811 |
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5.9% |
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60,284 |
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6.2% |
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56,600 |
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6.1% |
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Depreciation and amortization expenses |
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20,534 |
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4.1% |
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19,215 |
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4.1% |
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40,785 |
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4.2% |
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38,445 |
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4.1% |
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Impairment of assets and lease terminations |
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510 |
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0.1% |
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1,505 |
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0.3% |
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696 |
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0.1% |
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2,149 |
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0.2% |
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Preopening costs |
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2,608 |
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0.5% |
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2,503 |
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0.5% |
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4,842 |
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0.5% |
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3,817 |
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0.4% |
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Total costs and expenses |
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453,715 |
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91.4% |
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428,948 |
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91.2% |
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902,073 |
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92.3% |
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855,179 |
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91.6% |
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Income from operations |
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42,691 |
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8.6% |
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41,170 |
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8.8% |
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75,764 |
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7.7% |
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77,957 |
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8.4% |
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Interest and other (expense)/income, net |
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(1,544) |
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(0.3)% |
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(1,271) |
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(0.3)% |
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(2,935) |
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(0.3)% |
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(2,581) |
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(0.3)% |
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Income before income taxes |
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41,147 |
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8.3% |
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39,899 |
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8.5% |
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72,829 |
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7.4% |
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75,376 |
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8.1% |
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Income tax provision |
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11,098 |
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2.2% |
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11,316 |
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2.4% |
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20,262 |
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2.0% |
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21,501 |
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2.3% |
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Net income |
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$ |
30,049 |
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6.1% |
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$ |
28,583 |
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6.1% |
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$ |
52,567 |
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5.4% |
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$ |
53,875 |
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5.8% |
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Basic net income per share |
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$ |
0.61 |
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$ |
0.54 |
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$ |
1.05 |
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$ |
1.02 |
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Basic weighted average shares outstanding |
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49,349 |
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52,892 |
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50,044 |
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52,574 |
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Diluted net income per share |
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$ |
0.59 |
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$ |
0.52 |
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$ |
1.01 |
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$ |
0.99 |
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Diluted weighted average shares outstanding |
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51,358 |
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55,073 |
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52,098 |
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54,692 |
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Selected Segment Information |
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Revenues: |
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The Cheesecake Factory restaurants |
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$ |
451,454 |
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$ |
424,845 |
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$ |
888,060 |
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$ |
837,396 |
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Other |
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44,952 |
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45,273 |
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89,777 |
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95,740 |
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$ |
496,406 |
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$ |
470,118 |
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$ |
977,837 |
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$ |
933,136 |
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Income from operations: |
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The Cheesecake Factory restaurants |
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$ |
65,046 |
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$ |
62,718 |
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$ |
123,036 |
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$ |
121,955 |
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Other |
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4,589 |
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5,106 |
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9,015 |
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9,606 |
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Corporate |
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(26,944) |
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(26,654) |
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(56,287) |
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(53,604) |
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$ |
42,691 |
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$ |
41,170 |
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$ |
75,764 |
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$ |
77,957 |
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Selected Consolidated Balance Sheet Information |
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July 1, 2014 |
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December 31, 2013 |
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Cash and cash equivalents |
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$ 25,577 |
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$ 61,751 |
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Total assets |
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1,080,521 |
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1,124,114 |
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Long-term debt |
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25,000 |
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- |
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Total liabilities |
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571,383 |
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546,761 |
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Stockholders equity |
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509,138 |
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577,353 |
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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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Supplemental Information |
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July 1, 2014 |
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July 2, 2013 |
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July 1, 2014 |
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July 2, 2013 |
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Comparable restaurant sales percentage change |
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1.2% |
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0.8% |
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1.0% |
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1.1% |
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Restaurants opened during period |
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2 |
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1 |
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3 |
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1 |
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Restaurants open at period-end |
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182 |
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175 |
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182 |
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175 |
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Restaurant operating weeks |
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2,355 |
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2,263 |
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4,702 |
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4,554 |
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26901 Malibu Hills Road, Calabasas Hills, CA 91301 · Telephone (818) 871-3000 · Fax (818) 871-3100
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 2014 and fiscal 2013 net income and diluted net income per share excluding the impact from certain items. Additional detail regarding the second quarter fiscal 2014 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 |
|
26 Weeks Ended |
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26 Weeks Ended |
|
|
|
July 1, 2014 |
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July 2, 2013 |
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July 1, 2014 |
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July 2, 2013 |
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(unaudited; in thousands, except per share data) |
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Net income (GAAP) |
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$30,049 |
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$28,583 |
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$52,567 |
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$53,875 |
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After-tax impact from: |
|
|
|
|
|
|
|
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- Impairment of assets and lease terminations (1) |
|
306 |
|
903 |
|
418 |
|
1,289 |
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Net income (non-GAAP) |
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$30,355 |
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$29,486 |
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$52,985 |
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$55,164 |
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Diluted net income per share (GAAP) |
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$ 0.59 |
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$ 0.52 |
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$ 1.01 |
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$ 0.99 |
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After-tax impact from: |
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|
|
|
|
|
|
|
|
- Impairment of assets and lease terminations (1) |
|
0.01 |
|
0.02 |
|
0.01 |
|
0.02 |
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Diluted net income per share (non-GAAP) (2) |
|
$ 0.59 |
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$ 0.54 |
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$ 1.02 |
|
$ 1.01 |
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(1) The pre-tax amounts associated with these items were $510 in the second quarter of fiscal 2014, $186 in the first quarter of fiscal 2014, $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) Diluted net income per share may not add due to rounding.
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26901 Malibu Hills Road, Calabasas Hills, CA 91301 · Telephone (818) 871-3000 · Fax (818) 871-3100
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