Cheesecake Factory Results

The Cheesecake Factory Reports Results for First Quarter of Fiscal 2016

Total revenues were $553.7 million in the first quarter of fiscal 2016 as compared to $518.0 million in the prior year first quarter. Net income and diluted net income per share were $34.0 million and $0.68, respectively, in the first quarter of fiscal 2016.

Cheesecake Factory

The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported financial results for the first quarter of fiscal 2016, which ended on March 29, 2016.

Total revenues were $553.7 million in the first quarter of fiscal 2016 as compared to $518.0 million in the prior year first quarter. Net income and diluted net income per share were $34.0 million and $0.68, respectively, in the first quarter of fiscal 2016.

Operating Results

Comparable restaurant sales at The Cheesecake Factory restaurants increased 1.7% in the first quarter of fiscal 2016.

“We effectively kicked off 2016 with another quarter of positive comparable sales, our 25th in a row. Consistent and predictable performance is a hallmark of The Cheesecake Factory and is representative of the highly differentiated guest experience our operations team delivers every day. Our share of wallet continues to increase as we delivered dependable competitive performance and again outpaced the casual dining industry,” said David Overton, Chairman and Chief Executive Officer.

“Operational excellence and the sustained demand for our brand, as illustrated by our recent recognition as the No. 1 casual dining concept in Nation’s Restaurant News’ Consumer Picks Survey, both contributed to our strong start to the year. With solid overall sales growth and effective management of our expenses throughout the income statement, we captured measurable gains in operating margins and earnings per share. Our returns-focused growth demonstrates our commitment to increase shareholder value,” concluded Overton.

Development

The Company continues to expect to open as many as eight Company-owned restaurants domestically in fiscal 2016. The first Company-owned restaurant opened in Albuquerque, New Mexico in February and the next location is expected to open in the second quarter of this year.

Internationally, the Company is still expecting as many as four to five restaurants to open under licensing agreements in fiscal 2016. This includes the first The Cheesecake Factory in China, which is scheduled to open mid year in Disneytown, part of the Shanghai Disney resort.

Capital Allocation

The Company’s Board of Directors declared a quarterly cash dividend of $0.20 per share on the Company’s common stock. The dividend is payable on May 24, 2016 to shareholders of record at the close of business on May 11, 2016.

During the first quarter of fiscal 2016, the Company repurchased 1.0 million shares of its common stock at a cost of $50.0 million. The Company continues to expect that it will return its free cash flow to shareholders in fiscal 2016 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, through its subsidiaries, owns and operates 201 full-service, casual dining restaurants throughout the U.S.A. and Puerto Rico, including 188 restaurants under The Cheesecake Factory® mark; 12 restaurants under the Grand Lux Cafe® mark; and one restaurant under the RockSugar Pan Asian Kitchen® mark. Internationally, 11 The Cheesecake Factory® restaurants operate under licensing agreements. The Company’s bakery division operates two bakery production facilities, in Calabasas Hills, CA and Rocky Mount, NC, that produce quality cheesecakes and other baked products for its restaurants, international licensees and third-party bakery customers. In 2016, the Company was named to the FORTUNE Magazine “100 Best Companies to Work For®” list for the third consecutive year. 

The Cheesecake Factory Incorporated and Subsidiaries

Condensed Consolidated Financial Statements

(unaudited; in thousands, except per share and statistical data)

 
13 Weeks Ended 13 Weeks Ended
Consolidated Statements of Operations March 29, 2016 March 31, 2015

Amount

Percent of

Revenues

Amount

Percent of

Revenues

Revenues $ 553,693 100.0 % $ 517,973 100.0 %
Costs and expenses:
Cost of sales 130,773 23.6 % 126,612 24.4 %
Labor expenses 185,658 33.5 % 171,169 33.0 %
Other operating costs and expenses 129,557 23.4 % 123,435 23.8 %
General and administrative expenses 35,337 6.4 % 33,075 6.4 %
Depreciation and amortization expenses 21,464 3.9 % 21,177 4.1 %
Preopening costs   2,310     0.4 %   1,451     0.4 %
Total costs and expenses   505,099     91.2 %   476,919     92.1 %
Income from operations 48,594 8.8 % 41,054 7.9 %
Interest and other (expense)/income, net   (2,304 )   (0.4 )%   (1,895 )   (0.3 )%
Income before income taxes 46,290 8.4 % 39,159 7.6 %
Income tax provision   12,336     2.3 %   10,736     2.1 %
Net income $ 33,954     6.1 % $ 28,423     5.5 %
 
Basic net income per share $ 0.70   $ 0.58  
Basic weighted average shares outstanding   48,518     49,225  
 
Diluted net income per share $ 0.68   $ 0.56  
Diluted weighted average shares outstanding   50,037     51,102  
 
Selected Segment Information
Revenues:
The Cheesecake Factory restaurants $ 506,316 $ 472,817
Other   47,377     45,156  
$ 553,693   $ 517,973  
 
Income from operations:
The Cheesecake Factory restaurants $ 74,292 $ 66,701
Other 6,912 6,063
Corporate   (32,610 )   (31,710 )
$ 48,594   $ 41,054  
 
 
Selected Consolidated Balance Sheet Information March 29, 2016 December 29, 2015
Cash and cash equivalents $ 53,922 $ 43,854
Total assets 1,192,651 1,233,346
Total liabilities 607,091 644,807
Stockholders’ equity 585,560 588,539
 
 
 
13 Weeks Ended 13 Weeks Ended
The Cheesecake Factory Supplemental Information March 29, 2016 March 31, 2015
Comparable restaurant sales 1.7 % 4.2 %
Restaurants opened during period 1 -
Restaurants open at period-end 188 177
Restaurant operating weeks 2,436 2,301



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