The Cheesecake Factory Reports Results for First Quarter of Fiscal 2013
Total revenues were $463.0 million in the first quarter of fiscal 2013 as compared to $435.8 million in the prior year first quarter.
The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported financial results for the first quarter of fiscal 2013, which ended on April 2, 2013.
“Our performance in the first quarter demonstrates the strength of our restaurants domestically, as well as globally, with the initial licensed Cheesecake Factory restaurants in the Middle East performing at very high levels”
Total revenues were $463.0 million in the first quarter of fiscal 2013 as compared to $435.8 million in the prior year first quarter. Net income and diluted net income per share were $25.3 million and $0.47, respectively, in the first quarter of fiscal 2013.
The Company recorded a pre-tax charge related to discontinuing operations of three Grand Lux Cafe restaurants during the first quarter of fiscal 2013, as previously disclosed. The amount of the charge was approximately $644 thousand, which decreased diluted net income per share by approximately $0.01. Excluding these items, net income was $25.7 million and diluted net income per share remained $0.47.
Operating Results
Comparable restaurant sales at The Cheesecake Factory and Grand Lux Cafe increased 1.4% in the first quarter of fiscal 2013, but were negatively impacted by approximately 0.6% due to storms in the Northeast. Excluding this weather impact, comparable restaurant sales increased 2.0%.
By concept, comparable restaurant sales grew 1.6% at The Cheesecake Factory and declined 0.9% at Grand Lux Cafe.
“Our performance in the first quarter demonstrates the strength of our restaurants domestically, as well as globally, with the initial licensed Cheesecake Factory restaurants in the Middle East performing at very high levels,” said David Overton, Chairman and Chief Executive Officer. “We are now into our fourth year of delivering positive, quarterly comparable restaurant sales. And once again, our sales solidly outpaced the industry, coming in at the top end of our expectations. Our brand is strong and relevant, with ongoing menu innovation and high service levels as key sales drivers, creating an exceptional dining experience. Operationally, we are executing very well, maintaining excellent food quality and guest satisfaction scores. We are well positioned to deliver on our goals of returning to peak operating margins and averaging ‘mid-teens’ earnings growth, with multiple levers in place to achieve these objectives and drive shareholder value even higher.”
Capital Allocation
The Company’s Board of Directors declared a quarterly cash dividend of $0.12 per share on the Company’s common stock. The dividend is payable on May 21, 2013 to shareholders of record at the close of business on May 8, 2013.
During the first quarter of fiscal 2013, the Company repurchased 1.2 million shares of its common stock at a cost of $42.0 million. The Company continues to expect that it will return the majority of its free cash flow to shareholders in fiscal 2013 in the form of dividends and share repurchases.
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 174 full-service, casual dining restaurants throughout the U.S., including 162 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, three 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 over 70 varieties of quality cheesecakes and other baked products.
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 2, 2013 | April 3, 2012 | ||||||||||||||||||||||||||
| Percent of | | Percent of | |||||||||||||||||||||||||
Amount | Revenues | Amount | Revenues | |||||||||||||||||||||||||
Revenues | $ | 463,018 | 100.0 | % | $ | 435,754 | 100.0 | % | ||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||||
Cost of sales | 114,293 | 24.7 | % | 107,598 | 24.7 | % | ||||||||||||||||||||||
Labor expenses | 150,983 | 32.6 | % | 142,980 | 32.8 | % | ||||||||||||||||||||||
Other operating costs and expenses | 110,978 | 24.0 | % | 105,888 | 24.3 | % | ||||||||||||||||||||||
General and administrative expenses | 28,789 | 6.2 | % | 28,665 | 6.6 | % | ||||||||||||||||||||||
Depreciation and amortization expenses | 19,230 | 4.2 | % | 18,298 | 4.2 | % | ||||||||||||||||||||||
Impairment of assets and lease terminations | 644 | 0.1 | % | - | 0.0 | % | ||||||||||||||||||||||
Preopening costs | 1,314 | 0.3 | % | 2,106 | 0.5 | % | ||||||||||||||||||||||
Total costs and expenses | 426,231 | 92.1 | % | 405,535 | 93.1 | % | ||||||||||||||||||||||
Income from operations | 36,787 | 7.9 | % | 30,219 | 6.9 | % | ||||||||||||||||||||||
Interest and other (expense)/income, net | (1,310 | ) | (0.2 | )% | (1,148 | ) | (0.2 | )% | ||||||||||||||||||||
Income before income taxes | 35,477 | 7.7 | % | 29,071 | 6.7 | % | ||||||||||||||||||||||
Income tax provision | 10,185 | 2.2 | % | 8,349 | 1.9 | % | ||||||||||||||||||||||
Net income | $ | 25,292 | 5.5 | % | $ | 20,722 | 4.8 | % | ||||||||||||||||||||
Basic net income per share | $ | 0.48 | $ | 0.39 | ||||||||||||||||||||||||
Basic weighted average shares outstanding | 52,255 | 53,680 | ||||||||||||||||||||||||||
Diluted net income per share | $ | 0.47 | $ | 0.37 | ||||||||||||||||||||||||
Diluted weighted average shares outstanding | 54,305 | 55,699 | ||||||||||||||||||||||||||
Selected Segment Information | ||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
The Cheesecake Factory restaurants | $ | 412,551 | $ | 390,747 | ||||||||||||||||||||||||
Other | 50,467 | 45,007 | ||||||||||||||||||||||||||
$ | 463,018 | $ | 435,754 | |||||||||||||||||||||||||
Income from operations: | ||||||||||||||||||||||||||||
The Cheesecake Factory restaurants | $ | 59,237 | $ | 53,811 | ||||||||||||||||||||||||
Other | 4,500 | 3,511 | ||||||||||||||||||||||||||
Corporate | (26,950 | ) | (27,103 | ) | ||||||||||||||||||||||||
$ | 36,787 | $ | 30,219 | |||||||||||||||||||||||||
Selected Consolidated Balance Sheet Information | April 2, 2013 | January 1, 2013 | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 87,140 | $ | 83,569 | ||||||||||||||||||||||||
Total assets | 1,071,108 | 1,092,167 | ||||||||||||||||||||||||||
Total liabilities | 489,266 | 512,441 | ||||||||||||||||||||||||||
Stockholders' equity | 581,842 | 579,726 | ||||||||||||||||||||||||||
13 Weeks Ended | 13 Weeks Ended | |||||||||||||||||||||||||||
Supplemental Information | April 2, 2013 | April 3, 2012 | ||||||||||||||||||||||||||
Comparable restaurant sales percentage change | 1.4 | % | 2.4 | % | ||||||||||||||||||||||||
Restaurants opened during period | - | 1 | ||||||||||||||||||||||||||
Restaurants open at period-end | 174 | 171 | ||||||||||||||||||||||||||
Restaurant operating weeks | 2,291 | 2,212 |
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 2013 net income and diluted net income per share excluding the impact from a certain item. Additional detail regarding this 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 2, 2013 | April 3, 2012 | ||||||||
(unaudited; in thousands, except per share data) | |||||||||
Net income (GAAP) | $ | 25,292 | $ | 20,722 | |||||
After-tax impact from: | |||||||||
- Impairment of assets and lease terminations (1) | 386 | - | |||||||
Net income (non-GAAP) | $ | 25,678 | $ | 20,722 | |||||
Diluted net income per share (GAAP) | |||||||||
After-tax impact from: | $ | 0.47 | $ | 0.37 | |||||
- Impairment of assets and lease terminations (1) | 0.01 | - | |||||||
Diluted net income per share (non-GAAP) (2) | $ | 0.47 | $ | 0.37 |
(1) | The pre-tax amount associated with this item was $644 in the first quarter of fiscal 2013 and was recorded in impairment of assets and lease terminations. | ||
(2) | Diluted net income per share may not add due to rounding. |