Cheesecake Factory 2Q Net Up 14 Percent

The Cheesecake Factory Incorporated (Nasdaq: CAKE) 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® and private label product lines continue to build.

The Cheesecake Factory Incorporated operates 77 upscale, casual dining restaurants under The Cheesecake Factory® 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® name in Los Angeles, Chicago and Las Vegas; one self-service, limited menu "express" foodservice operation under The Cheesecake Factory Express® mark inside the DisneyQuest® family entertainment center in Orlando, Florida; and licenses three bakery cafe outlets to another foodservice operator under The Cheesecake Factory Bakery Cafe® name.


Logos, product and company names mentioned are the property of their respective owners.

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