The Cheesecake Factory Reports Results for Third Quarter of Fiscal 2009

In the third quarter of fiscal 2009, the Company recorded an approximate $2.0 million pre-tax charge. The charge resulted from a payment to partially unwind an interest rate collar on a portion of the outstanding balance on the Company's revolving credit facility. This item reduced reported diluted net income per share by approximately $0.02. Excluding this item, net income was $17.5 million, an increase of 48.2% from the prior year third quarter, and diluted net income per share was $0.29, an increase of 52.6% from the prior year period.

Operating Results

Comparable restaurant sales decreased 2.8% in the third quarter of fiscal 2009 from the third quarter of the prior year. By concept, comparable restaurant sales decreased 2.4% and 6.0% at The Cheesecake Factory and Grand Lux Cafe, respectively, in the third quarter of fiscal 2009 from the third quarter of the prior year.

'We achieved significant year-over-year growth in net income and earnings per share in the third quarter, driven by a third consecutive quarter of moderate gains in comparable restaurant sales and solid execution on our cost management initiatives,' said David Overton, Chairman and CEO.

'In the third quarter, we extended the progress that we made in the first half of the year across our key priorities. We realized over $8 million in cost savings this quarter, yet saw another step up in guest satisfaction scores, as guests continued to recognize our commitment to them. During our summer menu change, we rolled out an expanded Small Plates & Snacks menu, a Kid's menu and introduced one of the most successful new cheesecakes in our history. Quality, innovation, relevance and choice define our menu and guests are responding positively to this.

'Financial discipline is also a top priority and we further reduced our outstanding debt balance during the third quarter, which we believe will provide us with greater financial flexibility. In all, our team is doing a very good job of managing our business in a consistent way through the ongoing difficult economic environment and strongly positioning our Company for the future,' concluded Overton.

Debt Repayment

During the third 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 fourth quarter of fiscal 2009. The current outstanding balance on the Company's revolving credit facility is $125 million.

Reader Comments:

Be the first to leave a comment for this article