CALABASAS HILLS, Calif., Oct 21, 2010 (BUSINESS WIRE) --
The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported
financial results for the third quarter of fiscal 2010, which ended on
September 28, 2010.
Total revenues were $418.4 million in the third quarter of fiscal 2010
as compared to $400.6 million in the prior year third quarter. Net
income and diluted net income per share were $22.0 million and $0.37,
respectively.
Operating Results
"We are experiencing increasing momentum in our business, with solidly
positive guest traffic, expanding margins and strong earnings growth.
Our restaurants remain competitively well positioned and we are clearly
capturing market share," said David Overton, Chairman and CEO.
In the third quarter of fiscal 2010 comparable restaurant sales at The
Cheesecake Factory and Grand Lux Cafe increased 2.8% from the third
quarter of the prior year. By concept, comparable restaurant sales in
the third quarter of fiscal 2010 increased 2.9% at The Cheesecake
Factory and 1.4% at Grand Lux Cafe.
"We just recorded our third consecutive quarter of positive comparable
sales, each time driven primarily by growing guest traffic. We believe
that our continuing ability to raise the bar with menu innovation and
food quality, coupled with a high level of guest service and value, keep
our restaurants on our guests' list of favorite dining destinations. As
a result, our sales productivity remains among the strongest in the
entire restaurant industry.
"As planned, we opened a Cheesecake Factory in Bridgewater, New Jersey
in the third quarter of fiscal 2010, meeting our target of opening three
new restaurants during the year. We remain committed to growing our
company. The financial returns from the restaurants we opened this year
are exceeding our targets, and we continue to pursue an increasing
number of prime locations that have the potential for great capital
returns.
"While we are pleased with our top line trends, we are also pleased by
the improvements in our operating efficiency. Our expanding profit
margins are helping us generate a significant amount of free cash flow
which we will use to strengthen our balance sheet and increase
shareholder value through flexible capital allocation alternatives that
complement our restaurant expansion," concluded Overton.
Capital Allocation
The Company repurchased 911,724 shares of its common stock during the
third quarter of fiscal 2010 at a cost of $21.2 million. Year-to-date,
the Company has repurchased 2,068,882 shares of its common stock at a
total cost of $51.2 million.
Additionally, the Company repaid $30 million of debt under its revolving
credit facility in the third quarter of fiscal 2010. Following this
repayment, the Company's revolving credit facility balance was $40
million, and the Company ended the third quarter with a cash balance of
$59.8 million.
Conference Call and Webcast
A conference call to review the Company's results for the third quarter
of fiscal 2010 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 November
21, 2010. To listen to the conference call, please go to the Company's
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 163 full-service, casual dining restaurants throughout
the U.S., including 149 restaurants under The Cheesecake Factory(R) mark;
13 restaurants under the Grand Lux Cafe(R) mark; and one restaurant under
the RockSugar Pan Asian Kitchen(R) mark. 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. For more information, please 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 Company's ability to
remain relevant to consumers; the Company's ability to retain the
savings realized through its cost management initiatives; the Company's
ability to continue to improve its operating margins; factors outside of
the Company's 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 Company's 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 Company's 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
Company's 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 Company's 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)
|
|
|
|
13 Weeks Ended |
|
13 Weeks Ended |
|
39 Weeks Ended |
|
39 Weeks Ended |
| Consolidated Statements of Operations |
|
September 28, 2010 |
|
September 29, 2009 |
|
September 28, 2010 |
|
September 29, 2009 |
|
|
Amounts
|
|
Percent of Revenue |
|
Amounts
|
|
Percent of Revenue |
|
Amounts
|
|
Percent of Revenue |
|
Amounts
|
|
Percent of Revenue |
| Revenues |
|
$ |
418,352 |
|
|
|
100.0 |
% |
|
$ |
400,640 |
|
|
|
100.0 |
% |
|
$ |
1,242,694 |
|
|
100.0 |
% |
|
$ |
1,201,378 |
|
|
100.0 |
% |
| Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of sales |
|
|
102,073 |
|
|
|
24.4 |
% |
|
|
95,777 |
|
|
|
23.9 |
% |
|
|
303,428 |
|
|
24.4 |
% |
|
|
293,147 |
|
|
24.4 |
% |
| Labor expenses |
|
|
137,268 |
|
|
|
32.8 |
% |
|
|
131,987 |
|
|
|
32.9 |
% |
|
|
408,475 |
|
|
32.9 |
% |
|
|
400,370 |
|
|
33.3 |
% |
| Other operating costs and expenses |
|
|
104,208 |
|
|
|
24.9 |
% |
|
|
102,341 |
|
|
|
25.5 |
% |
|
|
303,910 |
|
|
24.5 |
% |
|
|
303,354 |
|
|
25.3 |
% |
| General and administrative expenses |
|
|
23,957 |
|
|
|
5.7 |
% |
|
|
23,917 |
|
|
|
6.0 |
% |
|
|
71,147 |
|
|
5.7 |
% |
|
|
71,402 |
|
|
5.9 |
% |
| Depreciation and amortization expenses |
|
|
17,902 |
|
|
|
4.3 |
% |
|
|
18,688 |
|
|
|
4.7 |
% |
|
|
54,083 |
|
|
4.4 |
% |
|
|
56,046 |
|
|
4.7 |
% |
| Preopening costs |
|
|
1,535 |
|
|
|
0.4 |
% |
|
|
594 |
|
|
|
0.2 |
% |
|
|
4,270 |
|
|
0.3 |
% |
|
|
2,783 |
|
|
0.2 |
% |
| Total costs and expenses |
|
|
386,943 |
|
|
|
92.5 |
% |
|
|
373,304 |
|
|
|
93.2 |
% |
|
|
1,145,313 |
|
|
92.2 |
% |
|
|
1,127,102 |
|
|
93.8 |
% |
| Income from operations |
|
|
31,409 |
|
|
|
7.5 |
% |
|
|
27,336 |
|
|
|
6.8 |
% |
|
|
97,381 |
|
|
7.8 |
% |
|
|
74,276 |
|
|
6.2 |
% |
| Interest expense |
|
|
(1,748 |
) |
|
|
(0.4 |
)% |
|
|
(5,594 |
) |
|
|
(1.4 |
)% |
|
|
(15,304 |
) |
|
(1.2 |
)% |
|
|
(18,083 |
) |
|
(1.5 |
)% |
| Interest income |
|
|
20 |
|
|
|
-
|
|
|
|
40 |
|
|
|
-
|
|
|
|
188 |
|
|
-
|
|
|
|
349 |
|
|
-
|
|
| Other (expense)/income, net |
|
|
(391 |
) |
|
|
(0.1 |
)% |
|
|
236 |
|
|
|
0.1 |
% |
|
|
146 |
|
|
-
|
|
|
|
691 |
|
|
0.1 |
% |
| Income before income taxes |
|
|
29,290 |
|
|
|
7.0 |
% |
|
|
22,018 |
|
|
|
5.5 |
% |
|
|
82,411 |
|
|
6.6 |
% |
|
|
57,233 |
|
|
4.8 |
% |
| Income tax provision |
|
|
7,337 |
|
|
|
1.8 |
% |
|
|
5,760 |
|
|
|
1.4 |
% |
|
|
22,563 |
|
|
1.8 |
% |
|
|
14,387 |
|
|
1.2 |
% |
| Net income |
|
$ |
21,953 |
|
|
|
5.2 |
% |
|
$ |
16,258 |
|
|
|
4.1 |
% |
|
$ |
59,848 |
|
|
4.8 |
% |
|
$ |
42,846 |
|
|
3.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic net income per share |
|
$ |
0.38 |
|
|
|
|
$ |
0.27 |
|
|
|
|
$ |
1.01 |
|
|
|
|
$ |
0.72 |
|
|
|
| Basic weighted average shares outstanding |
|
|
58,427 |
|
|
|
|
|
59,359 |
|
|
|
|
|
59,057 |
|
|
|
|
|
59,337 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted net income per share |
|
$ |
0.37 |
|
|
|
|
$ |
0.27 |
|
|
|
|
$ |
0.99 |
|
|
|
|
$ |
0.71 |
|
|
|
| Diluted weighted average shares outstanding |
|
|
59,743 |
|
|
|
|
|
60,328 |
|
|
|
|
|
60,453 |
|
|
|
|
|
60,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selected Segment Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Restaurants |
|
$ |
403,025 |
|
|
|
|
$ |
386,546 |
|
|
|
|
$ |
1,201,494 |
|
|
|
|
$ |
1,159,787 |
|
|
|
| Bakery |
|
|
30,306 |
|
|
|
|
|
27,877 |
|
|
|
|
|
82,836 |
|
|
|
|
|
79,417 |
|
|
|
| Intercompany bakery sales |
|
|
(14,979 |
) |
|
|
|
|
(13,783 |
) |
|
|
|
|
(41,636 |
) |
|
|
|
|
(37,826 |
) |
|
|
|
|
$ |
418,352 |
|
|
|
|
$ |
400,640 |
|
|
|
|
$ |
1,242,694 |
|
|
|
|
$ |
1,201,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Restaurants |
|
$ |
52,349 |
|
|
|
|
$ |
47,545 |
|
|
|
|
$ |
160,076 |
|
|
|
|
$ |
136,075 |
|
|
|
| Bakery |
|
|
2,437 |
|
|
|
|
|
3,797 |
|
|
|
|
|
7,171 |
|
|
|
|
|
9,909 |
|
|
|
| Corporate |
|
|
(23,377 |
) |
|
|
|
|
(24,006 |
) |
|
|
|
|
(69,866 |
) |
|
|
|
|
(71,708 |
) |
|
|
|
|
$ |
31,409 |
|
|
|
|
$ |
27,336 |
|
|
|
|
$ |
97,381 |
|
|
|
|
$ |
74,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selected Consolidated Balance Sheet Information |
|
September 28, 2010
|
|
December 29, 2009
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
|
|
$ |
59,794 |
|
|
|
|
$ |
73,715 |
|
|
|
|
|
|
|
|
|
| Investments and marketable securities |
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
| Total assets |
|
|
|
|
1,000,712 |
|
|
|
|
|
1,046,751 |
|
|
|
|
|
|
|
|
|
| Long-term debt |
|
|
|
|
40,000 |
|
|
|
|
|
100,000 |
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
|
|
|
448,837 |
|
|
|
|
|
530,638 |
|
|
|
|
|
|
|
|
|
| Stockholders' equity |
|
|
|
|
551,875 |
|
|
|
|
|
516,113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
13 Weeks Ended |
|
39 Weeks Ended |
|
39 Weeks Ended |
| Supplemental Information |
|
September 28, 2010 |
|
September 29, 2009
|
|
September 28, 2010 |
|
September 29, 2009 |
| Comparable restaurant sales percentage change |
|
|
|
|
2.8 |
% |
|
|
|
|
(2.8 |
)% |
|
|
|
2.4 |
% |
|
|
|
(3.1 |
)% |
| Restaurants opened during period |
|
|
|
|
1 |
|
|
|
|
|
-
|
|
|
|
|
3 |
|
|
|
|
1 |
|
| Restaurants open at period-end |
|
|
|
|
163 |
|
|
|
|
|
160 |
|
|
|
|
163 |
|
|
|
|
160 |
|
| Restaurant operating weeks |
|
|
|
|
2,111 |
|
|
|
|
|
2,080 |
|
|
|
|
6,307 |
|
|
|
|
6,233 |
|
|
|
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 third
quarter and year-to-date fiscal 2010 and fiscal 2009 net income
and diluted net income per share excluding the impact of certain
items.
|
|
|
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 |
|
39 Weeks Ended |
|
|
September 28, |
|
September 29, |
|
September 28, |
|
September 29, |
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
(unaudited; in thousands, except per share data) |
| Net income (GAAP) |
|
$ |
21,953 |
|
$ |
16,258 |
|
$ |
59,848 |
|
$ |
42,846 |
|
| After-tax impact from: |
|
|
|
|
|
|
|
|
| - Unwinding of interest rate collar (1) |
|
|
- |
|
|
1,208 |
|
|
4,426 |
|
|
3,158 |
|
| - Chairman and CEO employment agreement (2) |
|
|
- |
|
|
- |
|
|
- |
|
|
1,530 |
|
| - Realization of investment in variable life insurance contract
(3) |
|
|
- |
|
|
- |
|
|
- |
|
|
(668 |
) |
| Net income (non-GAAP) |
|
$ |
21,953 |
|
$ |
17,466 |
|
$ |
64,274 |
|
$ |
46,866 |
|
|
|
|
|
|
|
|
|
|
| Diluted net income per share (GAAP) (4) |
|
$ |
0.37 |
|
$ |
0.27 |
|
$ |
0.99 |
|
$ |
0.71 |
|
| After-tax impact from: |
|
|
|
|
|
|
|
|
| - Unwinding of interest rate collar |
|
|
- |
|
|
0.02 |
|
|
0.07 |
|
|
0.05 |
|
| - Chairman and CEO employment agreement |
|
|
- |
|
|
- |
|
|
- |
|
|
0.03 |
|
| - Realization of investment in variable life insurance contract |
|
|
- |
|
|
- |
|
|
- |
|
|
(0.01 |
) |
| Diluted net income per share (non-GAAP) |
|
$ |
0.37 |
|
$ |
0.29 |
|
$ |
1.06 |
|
$ |
0.78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The pre-tax amounts associated with this item were $7,376 in the 39
weeks ended September 28, 2010, and $2,014 and $5,264 in the 13 and
39 weeks ended September 29, 2009, respectively, and were recorded
in interest expense.
|
|
(2)
|
|
The pre-tax amount associated with this item was $2,550 and was
recorded in general and administrative expenses.
|
|
(3)
|
|
This item was non-taxable and was recorded in other income, net.
|
|
(4)
|
|
Diluted net income per share amounts may vary slightly from quarter
to quarter due to rounding.
|
SOURCE: The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated
W. Douglas Benn, 818-871-3000