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.

Apr 25, 2013 - 08:59

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.