CALABASAS HILLS, Calif.--(BUSINESS WIRE)--Apr. 23, 2014--
The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported
financial results for the first quarter of fiscal 2014, which ended on
April 1, 2014.
Total revenues were $481.4 million in the first quarter of fiscal 2014
as compared to $463.0 million in the prior year first quarter. Net
income and diluted net income per share were $22.5 million and $0.43,
respectively, in the first quarter of fiscal 2014. The Company’s diluted
net income per share was affected by a greater than expected impact from
both inclement weather and a holiday shift during the first quarter of
fiscal 2014, as well as costs associated with a pending settlement of a
legal claim.
The Company recorded a $186,000 pre-tax charge during the first quarter
of fiscal 2014 related to the planned relocation of one The Cheesecake
Factory restaurant. Excluding this item, net income was $22.6 million
and diluted net income per share remained $0.43.
Operating Results
Comparable restaurant sales at The Cheesecake Factory and Grand Lux Cafe
increased 0.9% in the first quarter of fiscal 2014, but were negatively
impacted by approximately 2.0% due to severe winter storms and the
effect of a holiday shift relative to the prior year.
By concept, comparable restaurant sales grew 1.2% at The Cheesecake
Factory and declined 2.9% at Grand Lux Cafe.
“The Cheesecake Factory is a highly differentiated concept defined by an
extensive menu, outstanding food quality and high service levels, which
collectively contribute to a unique dining experience for our guests.
These competitive advantages and the strong brand appeal they create
among consumers ultimately drive our ability to deliver consistent and
dependable comparable sales results over a sustained period of time.
This was the case again in the first quarter of 2014 where we continued
to significantly outpace overall casual dining trends,” said David
Overton, Chairman and Chief Executive Officer.
“Notably, the strength of our sales performance was broad-based, with
positive comparable sales in each of our markets, outside of the areas
impacted by the harsh winter storms, with exceptional strength in the
three states that represent our largest markets—California, Florida and
Texas. In addition, the strength of our brand also contributed to strong
gift card sales this past holiday season, and we saw healthy growth in
gift card usage during the first quarter,” continued Overton.
Development
The Company opened one restaurant in the first quarter of fiscal 2014,
in line with its plans, and now expects to open as many as ten
Company-owned restaurants in fiscal 2014. Internationally, the Company
expects as many as three to four restaurants to open in the Middle East
and Mexico under licensing agreements, based on visibility the Company
now has on the timing of openings.
Capital Allocation
The Company’s Board of Directors declared a quarterly cash dividend of
$0.14 per share on the Company’s common stock. The dividend is payable
on May 20, 2014 to shareholders of record at the close of business on
May 7, 2014.
During the first quarter of fiscal 2014, the Company repurchased 2.1
million shares of its common stock at a cost of $99.0 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.
“In addition to ongoing solid business trends, we also continue to
effectively utilize our capital to invest in growth and simultaneously
return a substantial amount of cash to shareholders. We strategically
accelerated our repurchase activity in the first quarter of 2014, which
should help to drive a higher level of total shareholder returns this
year,” concluded Overton.
Conference Call and Webcast
A conference call to review the Company’s results for the first 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 May 23,
2014. 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 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 approximately 70
varieties of quality cheesecakes and other baked products. In 2014, the
Company was named to Fortune magazine’s “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 Company’s ability to
protect its competitive advantages and continue to deliver a unique
guest experience; consumer demand for the Company’s brand; the Company’s
ability to deliver consistent and dependable comparable sales results
over a sustained period of time; the Company’s ability to continue to
outperform the casual dining industry; the Company’s ability to drive
gift card sales and restaurant sales across geographies; the Company’s
ability to expand its concepts domestically and work with its licensees
to expand its concept internationally; the Company’s ability to utilize
its capital effectively and increase shareholder value through dividends
and share repurchases; factors outside of the Company’s control that
impact consumer confidence and spending; current and future
macroeconomic conditions; changes in 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.
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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
|
|
Consolidated Statements of Operations
|
|
April 1, 2014
|
|
April 2, 2013
|
|
|
|
Amount
|
Percent of
Revenues
|
|
Amount
|
Percent of
Revenues
|
|
Revenues
|
|
$
|
481,431
|
|
|
100.0
|
%
|
|
$
|
463,018
|
|
|
100.0
|
%
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
119,362
|
|
|
24.8
|
%
|
|
|
114,293
|
|
|
24.7
|
%
|
|
Labor expenses
|
|
|
159,450
|
|
|
33.1
|
%
|
|
|
150,983
|
|
|
32.6
|
%
|
|
Other operating costs and expenses
|
|
|
115,633
|
|
|
24.0
|
%
|
|
|
110,978
|
|
|
24.0
|
%
|
|
General and administrative expenses
|
|
|
31,242
|
|
|
6.5
|
%
|
|
|
28,789
|
|
|
6.2
|
%
|
|
Depreciation and amortization expenses
|
|
|
20,251
|
|
|
4.2
|
%
|
|
|
19,230
|
|
|
4.2
|
%
|
|
Impairment of assets and lease terminations
|
|
|
186
|
|
|
0.0
|
%
|
|
|
644
|
|
|
0.1
|
%
|
|
Preopening costs
|
|
|
2,234
|
|
|
0.5
|
%
|
|
|
1,314
|
|
|
0.3
|
%
|
|
Total costs and expenses
|
|
|
448,358
|
|
|
93.1
|
%
|
|
|
426,231
|
|
|
92.1
|
%
|
|
Income from operations
|
|
|
33,073
|
|
|
6.9
|
%
|
|
|
36,787
|
|
|
7.9
|
%
|
|
Interest and other (expense)/income, net
|
|
|
(1,391
|
)
|
|
(0.3
|
)%
|
|
|
(1,310
|
)
|
|
(0.2
|
)%
|
|
Income before income taxes
|
|
|
31,682
|
|
|
6.6
|
%
|
|
|
35,477
|
|
|
7.7
|
%
|
|
Income tax provision
|
|
|
9,164
|
|
|
1.9
|
%
|
|
|
10,185
|
|
|
2.2
|
%
|
|
Net income
|
|
$
|
22,518
|
|
|
4.7
|
%
|
|
$
|
25,292
|
|
|
5.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share
|
|
$
|
0.44
|
|
|
|
$
|
0.48
|
|
|
|
Basic weighted average shares outstanding
|
|
|
50,745
|
|
|
|
|
52,255
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
$
|
0.43
|
|
|
|
$
|
0.47
|
|
|
|
Diluted weighted average shares outstanding
|
|
52,844
|
|
|
|
|
54,305
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Segment Information
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
The Cheesecake Factory restaurants
|
|
$
|
436,606
|
|
|
|
$
|
412,551
|
|
|
|
Other
|
|
|
|
44,825
|
|
|
|
|
50,467
|
|
|
|
|
|
$
|
481,431
|
|
|
|
$
|
463,018
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations:
|
|
|
|
|
|
|
|
The Cheesecake Factory restaurants
|
|
$
|
57,990
|
|
|
|
$
|
59,237
|
|
|
|
Other
|
|
|
|
4,426
|
|
|
|
|
4,500
|
|
|
|
Corporate
|
|
|
(29,343
|
)
|
|
|
|
(26,950
|
)
|
|
|
|
|
$
|
33,073
|
|
|
|
$
|
36,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Consolidated Balance Sheet Information
|
|
April 1, 2014
|
|
December 31, 2013
|
|
Cash and cash equivalents
|
|
|
$
|
31,465
|
|
|
|
$
|
61,751
|
|
|
Total assets
|
|
|
|
|
1,073,756
|
|
|
|
|
1,124,114
|
|
|
Long-term debt
|
|
|
|
|
25,000
|
|
|
|
|
-
|
|
|
Total liabilities
|
|
|
|
|
571,238
|
|
|
|
|
546,761
|
|
|
Stockholders' equity
|
|
|
|
502,518
|
|
|
|
|
577,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
Supplemental Information
|
|
April 1, 2014
|
|
April 2, 2013
|
|
Comparable restaurant sales percentage change
|
|
|
|
0.9
|
%
|
|
|
|
1.4
|
%
|
|
Restaurants opened during period
|
|
|
|
1
|
|
|
|
|
-
|
|
|
Restaurants open at period-end
|
|
|
|
181
|
|
|
|
|
174
|
|
|
Restaurant operating weeks
|
|
|
|
2,347
|
|
|
|
|
2,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 first
quarter fiscal 2014 and 2013 net income and diluted net income per share
excluding the impact from certain items. Additional detail regarding the
first 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 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
|
|
13 Weeks Ended
|
|
|
|
April 1, 2014
|
|
April 2, 2013
|
|
|
|
(unaudited; in thousands, except per share data)
|
|
Net income (GAAP)
|
|
$
|
22,518
|
|
$
|
25,292
|
|
After-tax impact from:
|
|
|
|
|
|
- Impairment of assets and lease terminations (1)
|
|
|
112
|
|
|
386
|
|
Net income (non-GAAP)
|
|
$
|
22,630
|
|
$
|
25,678
|
|
|
|
|
|
|
|
|
Diluted net income per share (GAAP)
|
|
|
|
|
|
After-tax impact from:
|
|
$
|
0.43
|
|
$
|
0.47
|
|
- Impairment of assets and lease terminations (1)
|
|
|
0.00
|
|
|
0.01
|
|
Diluted net income per share (non-GAAP) (2)
|
|
$
|
0.43
|
|
$
|
0.47
|
(1) The pre-tax amounts associated with these items were $186 in the
first quarter of fiscal 2014, 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.
Source: The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated
Jill Peters, (818) 871-3000
investorrelations@thecheesecakefactory.com