CALABASAS HILLS, Calif.--(BUSINESS WIRE)--Jul. 23, 2009--
The Cheesecake Factory Incorporated (NASDAQ:CAKE) today reported
financial results for the second quarter of fiscal 2009, which ended on
June 30, 2009.
Total revenues were $407.9 million in the second quarter of fiscal 2009
as compared to $407.1 million in the prior year second quarter. Net
income and diluted net income per share were $16.6 million and $0.28,
respectively.
In the second quarter of fiscal 2009, the Company recorded a $2.6
million pre-tax, non-cash charge resulting from a change in the amount
and the structure of the employment agreement with the Company’s
Chairman and CEO. The employment agreement was effective as of June 30,
2009 and replaced a previous agreement. In addition, the Company
recorded a $3.3 million pre-tax charge resulting from a payment to
unwind an interest rate collar on a portion of the outstanding balance
on the Company’s revolving credit facility. These charges were partially
offset by the realization of $0.7 million in proceeds from a variable
life insurance contract, which the Company uses to support its
non-qualified deferred compensation plan. Collectively, these items
reduced reported diluted net income per share by approximately $0.04.
Excluding these non-recurring items, net income and diluted net income
per share were $19.4 million and $0.32, respectively.
Operating Results
Comparable restaurant sales decreased 3.2% in the second quarter of
fiscal 2009 from the second quarter of the prior year. By concept,
comparable restaurant sales decreased 3.0% and 5.4% at The Cheesecake
Factory and Grand Lux Cafe, respectively, in the second quarter of
fiscal 2009 from the second quarter of the prior year.
“We saw continuing stabilization in comparable restaurant sales in the
second quarter and experienced a slight improvement in our guest traffic
levels relative to the first quarter,” said David Overton, Chairman and
CEO. “Our team is executing well on our key areas of focus—guest
satisfaction, menu development, cost controls and debt reduction—and we
made progress in each of these areas during the quarter.
“Of particular note is our ongoing, steady improvement in guest
satisfaction scores at a time when we are streamlining our cost
structure. We are carefully balancing our cost containment efforts so as
not to reduce the experience that guests have in our restaurants, and we
are pleased with the results that we are delivering in both areas. We
continue to focus on ways to better align our operations with current
sales volumes and identified a second round of cost management
initiatives that we are already rolling out. Ultimately, these efforts
should aid in our goal of rebuilding margins back toward historical
levels over time,” concluded Overton.
Development
The Company believes it is unlikely to open any additional new
restaurants during the remainder of fiscal 2009 due to postponements by
developers of planned opening dates for sites. The Company anticipates
addressing its preliminary development plans for fiscal 2010 when it
reports financial results for the third quarter of fiscal 2009 in
October, 2009.
Debt Repayment
During the second quarter of fiscal 2009, the Company reduced the
balance on its revolving credit facility by $50 million and repaid an
additional $25 million early in the third quarter of fiscal 2009. The
current outstanding balance on the Company’s revolving credit facility
is $175 million.
Conference Call and Webcast
A conference call to review the Company’s results for the second quarter
of fiscal 2009 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,
2009. To listen to the conference call, please go to the Company’s
website at 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 146 restaurants throughout the U.S. under The
Cheesecake Factory® name with an extensive menu of more than 200 items
and fiscal 2008 average annual unit sales of approximately $9.8 million.
Grand Lux Cafe®, the Company’s second concept, has 13 units in operation
across the U.S. offering a broad menu of more than 150 items and average
annual unit sales of approximately $10.6 million in fiscal 2008. The
Company also operates one unit of its newest concept, RockSugar Pan
Asian Kitchen®, and two bakery production facilities in Calabasas Hills,
CA and Rocky Mount, NC that produce over 70 varieties of quality
cheesecakes and other baked products. For more information, please visit thecheesecakefactory.com.
Safe Harbor Statement
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements in this release are generally identified by
words such as "believes," "anticipates," "plans," "expects," "will" and
"would," and similar expressions that are intended to identify
forward-looking statements. 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, continued progress in guest satisfaction, menu
development, cost control and debt reduction, the impact of cost
containment efforts on guest satisfaction, and the effectiveness of
additional cost management initiatives are subject to risks and
uncertainties due to macro national and regional economic and credit
market conditions, unemployment rates, public safety conditions, adverse
weather and other factors outside of the Company’s control that impact
consumer confidence and spending. Forward-looking statements regarding
the number and timing of the Company’s planned new restaurant openings
are subject to additional risks and uncertainties due to the conditions
discussed above and other factors outside of the Company’s control,
including factors that are under the control of government agencies,
landlords and others. The Company is also subject to risks and
uncertainties related to the economic condition of suppliers, vendors
and other third parties providing goods or services to the Company.
Forward-looking statements speak only as of the dates on which they are
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 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 Company’s filings with the Securities and Exchange
Commission, which are available at sec.gov.
|
|
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The Cheesecake Factory Incorporated and Subsidiaries
|
|
Consolidated Financial Statements
|
|
(unaudited; in thousands, except per share and statistical data)
|
|
|
|
|
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
26 Weeks Ended
|
|
26 Weeks Ended
|
|
Consolidated Statements of Operations
|
|
June 30, 2009
|
|
July 1, 2008
|
|
June 30, 2009
|
|
July 1, 2008
|
|
|
|
|
Amounts
|
|
Percent of Revenue
|
|
Amounts
|
|
Percent of Revenue
|
|
Amounts
|
|
Percent of Revenue
|
|
Amounts
|
|
Percent of Revenue
|
|
Revenues
|
|
$407,944
|
|
|
100.0
|
%
|
|
$
|
407,134
|
|
|
100.0
|
%
|
|
$
|
800,738
|
|
|
100.0
|
%
|
|
$
|
800,937
|
|
|
100.0
|
%
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
99,284
|
|
|
24.3
|
%
|
|
|
104,540
|
|
|
25.7
|
%
|
|
|
197,370
|
|
|
24.6
|
%
|
|
|
205,279
|
|
|
25.6
|
%
|
|
Labor expenses
|
|
135,143
|
|
|
33.1
|
%
|
|
|
133,192
|
|
|
32.7
|
%
|
|
|
268,383
|
|
|
33.5
|
%
|
|
|
265,715
|
|
|
33.2
|
%
|
|
Other operating costs and expenses
|
|
99,259
|
|
|
24.3
|
%
|
|
|
96,243
|
|
|
23.6
|
%
|
|
|
201,013
|
|
|
25.1
|
%
|
|
|
192,141
|
|
|
24.0
|
%
|
|
General and administrative expenses
|
|
26,075
|
|
|
6.5
|
%
|
|
|
20,211
|
|
|
5.0
|
%
|
|
|
47,485
|
|
|
5.9
|
%
|
|
|
40,554
|
|
|
5.1
|
%
|
|
Depreciation and amortization expenses
|
|
18,755
|
|
|
4.6
|
%
|
|
|
18,361
|
|
|
4.5
|
%
|
|
|
37,358
|
|
|
4.7
|
%
|
|
|
36,454
|
|
|
4.5
|
%
|
|
Preopening costs
|
|
469
|
|
|
0.1
|
%
|
|
|
4,619
|
|
|
1.1
|
%
|
|
|
2,189
|
|
|
0.3
|
%
|
|
|
7,105
|
|
|
0.9
|
%
|
|
Total costs and expenses
|
|
378,985
|
|
|
92.9
|
%
|
|
|
377,166
|
|
|
92.6
|
%
|
|
|
753,798
|
|
|
94.1
|
%
|
|
|
747,248
|
|
|
93.3
|
%
|
|
Income from operations
|
|
28,959
|
|
|
7.1
|
%
|
|
|
29,968
|
|
|
7.4
|
%
|
|
|
46,940
|
|
|
5.9
|
%
|
|
|
53,689
|
|
|
6.7
|
%
|
|
Interest expense
|
|
(7,459
|
)
|
|
(1.8
|
)%
|
|
|
(4,080
|
)
|
|
(1.0
|
)%
|
|
|
(12,489
|
)
|
|
(1.6
|
)%
|
|
|
(7,619
|
)
|
|
(0.9
|
)%
|
|
Interest income
|
|
101
|
|
|
–
|
|
|
|
596
|
|
|
0.1
|
%
|
|
|
309
|
|
|
–
|
|
|
|
1,118
|
|
|
0.1
|
%
|
|
Other (expense)/income, net
|
|
630
|
|
|
0.1
|
%
|
|
|
61
|
|
|
–
|
|
|
|
455
|
|
|
0.1
|
%
|
|
|
(114
|
)
|
|
–
|
|
|
Income before income taxes
|
|
22,231
|
|
|
5.4
|
%
|
|
|
26,545
|
|
|
6.5
|
%
|
|
|
35,215
|
|
|
4.4
|
%
|
|
|
47,074
|
|
|
5.9
|
%
|
|
Income tax provision
|
|
5,662
|
|
|
1.3
|
%
|
|
|
7,444
|
|
|
1.8
|
%
|
|
|
8,627
|
|
|
1.1
|
%
|
|
|
13,644
|
|
|
1.7
|
%
|
|
Net income
|
|
|
$ 16,569
|
|
|
4.1
|
%
|
|
$
|
19,101
|
|
|
4.7
|
%
|
|
$
|
26,588
|
|
|
3.3
|
%
|
|
$
|
33,430
|
|
|
4.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share
|
|
$ 0.28
|
|
|
|
|
$
|
0.29
|
|
|
|
|
$
|
0.45
|
|
|
|
|
$
|
0.50
|
|
|
|
|
Basic weighted average shares outstanding
|
|
59,337
|
|
|
|
|
|
65,474
|
|
|
|
|
|
59,326
|
|
|
|
|
|
66,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
$ 0.28
|
|
|
|
|
$
|
0.29
|
|
|
|
|
$
|
0.44
|
|
|
|
|
$
|
0.50
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
60,069
|
|
|
|
|
|
65,916
|
|
|
|
|
|
59,795
|
|
|
|
|
|
67,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Segment Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurants
|
|
|
|
$
|
393,582
|
|
|
|
|
$
|
392,604
|
|
|
|
|
$
|
773,241
|
|
|
|
|
$
|
771,288
|
|
|
|
|
Bakery
|
|
|
|
|
26,606
|
|
|
|
|
|
26,736
|
|
|
|
|
|
51,540
|
|
|
|
|
|
53,819
|
|
|
|
|
Intercompany bakery sales
|
|
|
|
(12,244
|
)
|
|
|
|
|
(12,206
|
)
|
|
|
|
|
(24,043
|
)
|
|
|
|
|
(24,170
|
)
|
|
|
|
|
|
|
|
$
|
407,944
|
|
|
|
|
$
|
407,134
|
|
|
|
|
$
|
800,738
|
|
|
|
|
$
|
800,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurants
|
|
|
|
$
|
51,470
|
|
|
|
|
$
|
46,510
|
|
|
|
|
$
|
88,530
|
|
|
|
|
$
|
88,575
|
|
|
|
|
Bakery
|
|
|
|
|
3,808
|
|
|
|
|
|
2,963
|
|
|
|
|
|
6,112
|
|
|
|
|
|
6,046
|
|
|
|
|
Corporate
|
|
|
|
|
(26,319
|
)
|
|
|
|
|
(19,505
|
)
|
|
|
|
|
(47,702
|
)
|
|
|
|
|
(40,932
|
)
|
|
|
|
|
|
|
|
$
|
28,959
|
|
|
|
|
$
|
29,968
|
|
|
|
|
$
|
46,940
|
|
|
|
|
$
|
53,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Consolidated Balance Sheet Information
|
|
June 30, 2009
|
|
December 30, 2008
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
95,582
|
|
|
|
$
|
80,365
|
|
|
|
|
|
|
|
|
Investments and marketable securities
|
|
|
|
–
|
|
|
|
|
996
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
1,099,327
|
|
|
|
|
1,142,630
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
200,000
|
|
|
|
|
275,000
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
610,578
|
|
|
|
|
690,064
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
488,749
|
|
|
|
|
452,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
26 Weeks Ended
|
|
26 Weeks Ended
|
|
Supplemental Information
|
|
June 30, 2009
|
|
July 1, 2008
|
|
June 30, 2009
|
|
July 1, 2008
|
|
Comparable restaurant sales percentage change
|
|
|
|
(3.2
|
)%
|
|
|
|
(4.1
|
)%
|
|
|
(3.3
|
)%
|
|
|
(3.1
|
)%
|
|
Restaurants opened during period
|
|
|
|
–
|
|
|
|
|
5
|
|
|
|
1
|
|
|
|
5
|
|
|
Restaurants open at period-end
|
|
|
|
160
|
|
|
|
|
157
|
|
|
|
160
|
|
|
|
157
|
|
|
Restaurant operating weeks
|
|
|
|
2,080
|
|
|
|
|
2,005
|
|
|
|
4,153
|
|
|
|
3,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 2009 changes to net income and diluted
net income per share excluding the impact from three non-recurring items
recorded in the second quarter of fiscal 2009, which are explained on
the first page of this press release.
The non-GAAP measurements are intended to supplement the presentation of
the Company’s 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
|
|
26 Weeks Ended
|
|
|
|
June 30, 2009
|
|
July 1, 2008
|
|
June 30, 2009
|
|
July 1, 2008
|
|
|
|
(unaudited; in thousands, except per share data)
|
|
Net income (GAAP)
|
|
$
|
16,569
|
|
|
$
|
19,101
|
|
$
|
26,588
|
|
|
$
|
33,430
|
|
Chairman and CEO employment agreement, after-tax (1)
|
|
|
1,530
|
|
|
|
–
|
|
|
1,530
|
|
|
|
–
|
|
Unwinding of interest rate collar, after-tax (2)
|
|
|
1,950
|
|
|
|
–
|
|
|
1,950
|
|
|
|
–
|
|
Realization of investment in variable life insurance contract
(3)
|
|
|
(668
|
)
|
|
|
–
|
|
|
(668
|
)
|
|
|
–
|
|
Net income (non-GAAP)
|
|
$
|
19,381
|
|
|
$
|
19,101
|
|
$
|
29,400
|
|
|
$
|
33,430
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share (GAAP)
|
|
$
|
0.28
|
|
|
$
|
0.29
|
|
$
|
0.44
|
|
|
$
|
0.50
|
|
Chairman and CEO employment agreement, after-tax
|
|
|
0.02
|
|
|
|
–
|
|
|
0.02
|
|
|
|
–
|
|
Unwinding of interest rate collar, after-tax
|
|
|
0.03
|
|
|
|
–
|
|
|
0.03
|
|
|
|
–
|
|
Realization of investment in variable life insurance contract
|
|
|
(0.01
|
)
|
|
|
–
|
|
|
(0.01
|
)
|
|
|
–
|
|
Diluted net income per share (non-GAAP)
|
$
|
0.32
|
|
|
$
|
0.29
|
|
$
|
0.48
|
|
|
$
|
0.50
|
(1) The pre-tax amount associated with this item is $2,550 and is
recorded in general and administrative expenses.
(2) The pre-tax
amount associated with this item is $3,250 and is recorded in interest
expense.
(3) The item is non-taxable and is recorded in other
(expense)/income, net.
Source: The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated
Jill Peters, 818-871-8342
jpeters@thecheesecakefactory.com