EX-99.1 2 a4684102ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 The Cheesecake Factory Reports Record Financial Results for the Second Quarter Ended June 29, 2004 CALABASAS HILLS, Calif.--(BUSINESS WIRE)--July 20, 2004--The Cheesecake Factory Incorporated (Nasdaq: CAKE) today reported record net income for the fiscal quarter ended June 29, 2004 of $17.8 million or $0.34 per diluted share, compared to net income of $15.3 million or $0.30 per diluted share for the same quarter last year. Additional highlights for the second quarter, compared to the same quarter last year, were as follows: -- Total revenues increased 25% to $234.9 million -- Operating income increased 21% to $26.6 million -- Comparable restaurant sales gained 4.5% -- Average sales per restaurant operating week increased 3.2% "We were very pleased with our record financial results for the second quarter," said David Overton, Chairman and CEO. "The strength of our upscale casual dining concept and our continued focus on operational excellence helped us achieve a 4.5% increase in comparable restaurant sales. We also managed to achieve record net income by leveraging our strong sales to help offset a very challenging cost environment, particularly in poultry and dairy commodities." "We are on track with our stated goal of opening as many as 16 restaurants in the current year, including two Grand Lux Cafes," stated Overton. Four new Cheesecake Factory restaurants have opened so far this fiscal year, including two in the second quarter (Sacramento, CA and Alpharetta, GA). Seven restaurant openings, including one Grand Lux Cafe in Dallas, are currently planned for the second half of the third quarter and five openings are currently scheduled for the fourth quarter. "As most of our investors know, it is not easy to predict, by quarter, the exact timing of our restaurant openings and their associated preopening costs due to the nature of the leased spaces that we select for our upscale restaurants and their highly customized layouts," commented Overton. "However, we are confident in our ability to achieve our full-year restaurant growth plan for 2004 and we are operationally ready to successfully execute those openings." "Our restaurants are operating more efficiently and effectively than ever," said Overton. "And we have taken steps to help mitigate some of the commodity cost pressure going forward, including a recently executed six-month contract for fresh poultry and a 1% menu price increase that is rolling out as part of our regularly scheduled summer menu change." Bakery sales to other foodservice operators, retailers and distributors increased 21% to $11.9 million during the second quarter, compared to the same quarter last year. Sales to warehouse clubs continued to be very strong and sales of The Dream Factory(R) and private label product lines continue to build. The Cheesecake Factory Incorporated operates 77 upscale, casual dining restaurants under The Cheesecake Factory(R) name that offer an extensive menu of more than 200 items with an average check of approximately $16.09. The Company also operates a bakery production facility that produces over 50 varieties of quality cheesecakes and other baked products for the Company's restaurants and for other leading foodservice operators, retailers and distributors. Additionally, the Company operates three upscale casual dining restaurants under the Grand Lux Cafe(R) name in Los Angeles, Chicago and Las Vegas; one self-service, limited menu "express" foodservice operation under The Cheesecake Factory Express(R) mark inside the DisneyQuest(R) family entertainment center in Orlando, Florida; and licenses three bakery cafe outlets to another foodservice operator under The Cheesecake Factory Bakery Cafe(R) name. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking 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. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. In particular, forward-looking statements regarding the Company's restaurant sales trends are subject to risks and uncertainties due to national and regional economic and public safety conditions that impact consumer confidence and spending, as well as weather and other factors outside of the Company's control. Forward-looking statements regarding the number and timing of the Company's planned new restaurant openings, and the amount and timing of their associated preopening costs, are subject to risks and uncertainties due to factors outside of the Company's control, including factors that are under the control of government agencies, landlords and others. Forward-looking statements regarding bakery sales are subject to a number of risks and uncertainties, including (but not limited to) unforeseen changes in the purchasing plans of the Company's large-account bakery customers and inherent difficulties in predicting the timing of product orders and shipments. Forward-looking statements speak only as of the dates on which they were made. 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 the securities laws. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements contained in the Company's filings with the Securities and Exchange Commission. The Cheesecake Factory Incorporated and Subsidiaries Consolidated Financial Statements (unaudited; in thousands, except per share and statistical data) Consolidated Statements of 13 Weeks Ended 13 Weeks Ended Operations June 29, 2004 July 1, 2003 ---------------------------------------------------- ----------------- Revenues: Amounts Percents Amounts Percents ----------------- ----------------- Restaurant sales $223,062 95.0% $178,816 94.8% Bakery sales to other foodservice operators, retailers and distributors 11,858 5.0% 9,804 5.2% ----------------- ----------------- Total revenues 234,920 100.0% 188,620 100.0% ----------------- ----------------- Costs and expenses: Restaurant cost of sales (1) 57,506 24.5% 42,785 22.7% Bakery cost of sales (2) 6,176 2.6% 4,465 2.4% Labor expenses 71,659 30.5% 58,318 30.9% Other operating expenses 52,754 22.5% 43,456 23.0% General and administrative expenses 9,874 4.2% 9,098 4.8% Depreciation and amortization expenses 8,256 3.5% 6,720 3.6% Preopening costs 2,047 0.9% 1,784 0.9% ----------------- ----------------- Total costs and expenses 208,272 88.7% 166,626 88.3% ----------------- ----------------- Income from operations 26,648 11.3% 21,994 11.7% Interest income, net 673 0.3% 1,065 0.6% Other income, net 124 0.1% 687 0.3% ----------------- ----------------- Income before income taxes 27,445 11.7% 23,746 12.6% Income tax provision 9,633 4.1% 8,477 4.5% ----------------- ----------------- Net income $17,812 7.6% $15,269 8.1% ================= ================= Basic net income per share $0.34 $0.30 ========= ========= Basic weighted average shares outstanding 51,818 50,287 ========= ========= Diluted net income per share $0.34 $0.30 ========= ========= Diluted weighted average shares outstanding 52,941 51,665 ========= ========= Consolidated Statements of 26 Weeks Ended 26 Weeks Ended Operations June 29, 2004 July 1, 2003 ----------------------------------- ---------------- ----------------- Revenues: Amounts Percents Amounts Percents ---------------------------------- Restaurant sales $434,278 95.4% $343,992 95.2% Bakery sales to other foodservice operators, retailers and distributors 21,176 4.6% 17,488 4.8% ---------------- ----------------- Total revenues 455,454 100.0% 361,480 100.0% ---------------- ----------------- Costs and expenses: Restaurant cost of sales (1) 110,015 24.2% 81,629 22.6% Bakery cost of sales (2) 10,733 2.3% 8,104 2.2% Labor expenses 140,697 30.9% 114,162 31.6% Other operating expenses 102,744 22.6% 83,233 23.0% General and administrative expenses 19,644 4.3% 17,784 4.9% Depreciation and amortization expenses 16,443 3.6% 13,266 3.7% Preopening costs 4,068 0.9% 3,302 0.9% ---------------- ----------------- Total costs and expenses 404,344 88.8% 321,480 88.9% ---------------- ----------------- Income from operations 51,110 11.2% 40,000 11.1% Interest income, net 1,293 0.3% 1,922 0.5% Other income, net 705 0.2% 1,481 0.4% ---------------- ----------------- Income before income taxes 53,108 11.7% 43,403 12.0% Income tax provision 18,641 4.1% 15,495 4.3% ---------------- ----------------- Net income $34,467 7.6% $27,908 7.7% ================ ================= Basic net income per share $0.67 $0.56 ========= ========= Basic weighted average shares outstanding 51,607 50,160 ========= ========= Diluted net income per share $0.65 $0.54 ========= ========= Diluted weighted average shares outstanding 52,895 51,538 ========= ========= Notes: ----------- (1) Consists of restaurant food, beverage and dessert costs. (2) Consists of bakery ingredient, packaging and supply costs. Selected Consolidated Balance Sheet Information June 29, 2004 December 30, 2003 ---------------------------------------------------------------------- Cash and cash equivalents $8,012 $15,167 Investments and marketable securities 128,218 121,840 Total assets 637,009 584,808 Total liabilities 127,960 126,906 Stockholders' equity 509,049 457,902 13 Weeks 13 Weeks 26 Weeks 26 Weeks Ended Ended Ended Ended Supplemental Information June 29, July 1, June 29, July 1, 2004 2003 2004 2003 ---------------------------------------------------------------------- Comparable restaurant sales % change 4.5% 0.3% 5.2% -0.8% Restaurant cost of sales % of restaurant sales 25.8% 23.9% 25.3% 23.7% Bakery cost of sales % of bakery sales 52.1% 45.5% 50.7% 46.3% Restaurants opened during period 2 2 4 4 Restaurants open at period-end 81 67 81 67 Restaurant operating weeks 1,029 851 2,045 1,686 CONTACT: The Cheesecake Factory Incorporated Jane Vallaire, 818-871-3000