Texas Roadhouse, Inc. Announces Fourth Quarter 2008 Results

Results for the quarter:

• Comparable restaurant sales decreased 4.7% at company restaurants and 5.5% at franchise restaurants,

• Six company restaurants opened,

• One restaurant was acquired from a franchisee,

• Restaurant operating costs, as a percentage of restaurant sales, increased 201 basis points,

• The Company recorded an impairment charge of $0.8 million, net of tax, on one under-performing restaurant in Q4 2008. The fourth quarter of 2007 included an impairment charge of $1.1 million, net of tax, on one under-performing restaurant,

• The Company repurchased 807,900 shares of its Class A common stock for a total purchase price of $4.4 million, and

• Diluted earnings per share decreased 8.0% compared to the prior year period. Diluted earnings per share were positively impacted by an estimated $0.02 to $0.03 as a result of the extra week in Q4 2008.

Results for the full year:

• Comparable restaurant sales decreased 2.3% at company restaurants and 3.6% at franchise restaurants,

• Twenty-nine company restaurants and one franchise restaurant opened while one company restaurant closed,

• Thirteen restaurants were acquired from franchisees,

• Restaurant operating costs, as a percentage of restaurant sales, increased 168 basis points,

• The Company repurchased 6,512,807 shares of its Class A common stock for a total purchase price of $56.8 million. As of the end of 2008, $18.2 million worth of Class A common stock remains authorized for repurchase, and

• Diluted earnings per share increased 1.0% to $0.52 from $0.51 in the prior year period. Diluted earnings per share were positively impacted by an estimated $0.02 to $0.03 as a result of the extra week discussed above.

G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, 'The unprecedented economic environment affected our fourth quarter performance and has continued into early 2009. Although we believe these headwinds will continue, we remain committed to doing what we believe are the right things for the long-term success of the Texas Roadhouse brand. On the operational front, we are focused on providing legendary food and legendary service to each and every guest and remain committed to the overall guest experience by providing quality, fun and value. From a financial perspective, we are managing the business to the current environment and are committed to maintaining a conservative balance sheet and generating adequate returns on the capital we deploy. In addition, we look forward to 2009 as a turning point for us as we anticipate generating a significant amount of free cash flow for the first time in our history as a public company.'

Franchise Acquisitions

Effective September 24, 2008, the first day of the Company's fourth fiscal quarter of 2008, the Company acquired one franchise restaurant in Florida for a purchase price of $1.5 million. The purchase price was paid in cash, funded through borrowings under the Company's credit facility.

Outlook for 2009

The Company reported that comparable restaurant sales for the first seven weeks of fiscal 2009 decreased approximately 1.0% compared to the same period of the prior year although management estimates that these results include a benefit of an estimated 2.0-2.5% due to the timing of the New Year's holiday.

While the Company acknowledges the uncertain state of the economy, it also notes that it is targeting 2009 diluted earnings per share to be approximately flat with that of 2008 despite the fact that fiscal 2008 contained an extra week that positively impacted diluted earnings per share by approximately $0.02 to $0.03.

In addition, the Company provided the following details as they relate to 2009:

• Plans include approximately 15 company and two franchise restaurant openings,

• Total capital expenditures are estimated to be $50-60 million,

• Food cost deflation is estimated to be approximately 2.0% to 3.0% for 2009,

• Based on the lower number of openings in 2009 as compared to 2008, the Company anticipates much lower pre-opening costs over the prior periods, and

• As previously announced, the Company will incur an estimated $1.5 million in incremental expense in 2009 for enhancements made to the bonus plans for its Managing Partners.





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