Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 29, 2020 | Oct. 28, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 29, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-50972 | |
Entity Registrant Name | Texas Roadhouse, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-1083890 | |
Entity Address, Address Line One | 6040 Dutchmans Lane, Suite 200 | |
Entity Address, City or Town | Louisville | |
Entity Address, State or Province | KY | |
Entity Address, Postal Zip Code | 40205 | |
City Area Code | 502 | |
Local Phone Number | 426-9984 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | TXRH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 69,482,522 | |
Entity Central Index Key | 0001289460 | |
Current Fiscal Year End Date | --12-29 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 29, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 328,636 | $ 107,879 |
Receivables, net of allowance for doubtful accounts of $21 at September 29, 2020 and $12 at December 31, 2019 | 32,015 | 99,305 |
Inventories, net | 19,889 | 20,267 |
Prepaid income taxes | 3,968 | 2,015 |
Prepaid expenses | 15,033 | 18,433 |
Total current assets | 399,541 | 247,899 |
Property and equipment, net of accumulated depreciation of $744,378 at September 29, 2020 and $678,988 at December 31, 2019 | 1,076,924 | 1,056,563 |
Operating lease right-of-use asset, net | 526,501 | 499,801 |
Goodwill | 124,748 | 124,748 |
Intangible assets, net of accumulated amortization of $14,122 at September 29, 2020 and $14,141 at December 31, 2019 | 890 | 1,234 |
Other assets | 59,407 | 53,320 |
Total assets | 2,188,011 | 1,983,565 |
Current liabilities: | ||
Current portion of operating lease liabilities | 18,635 | 17,263 |
Current maturities of long-term debt | 50,000 | |
Accounts payable | 65,843 | 61,653 |
Deferred revenue-gift cards | 146,470 | 209,258 |
Accrued wages | 34,825 | 39,699 |
Income taxes payable | 1,116 | |
Accrued taxes and licenses | 28,289 | 30,433 |
Other accrued liabilities | 51,224 | 58,914 |
Total current liabilities | 396,402 | 417,220 |
Operating lease liabilities, net of current portion | 567,480 | 538,710 |
Long-term debt | 190,000 | |
Restricted stock and other deposits | 8,172 | 8,249 |
Deferred tax liabilities, net | 7,138 | 22,695 |
Other liabilities | 100,316 | 65,522 |
Total liabilities | 1,269,508 | 1,052,396 |
Texas Roadhouse, Inc. and subsidiaries stockholders' equity: | ||
Preferred stock ($0.001 par value, 1,000,000 shares authorized; no shares issued or outstanding) | ||
Common stock ($0.001 par value, 100,000,000 shares authorized, 69,482,522 and 69,400,252 shares issued and outstanding at September 29, 2020 and December 31, 2019, respectively) | 69 | 69 |
Additional paid-in-capital | 140,659 | 140,501 |
Retained earnings | 762,366 | 775,649 |
Accumulated other comprehensive loss | (178) | (225) |
Total Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 902,916 | 915,994 |
Noncontrolling interests | 15,587 | 15,175 |
Total equity | 918,503 | 931,169 |
Total liabilities and equity | $ 2,188,011 | $ 1,983,565 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 29, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 21 | $ 12 |
Property and equipment, accumulated depreciation (in dollars) | 744,378 | 678,988 |
Intangible assets, accumulated amortization (in dollars) | $ 14,122 | $ 14,141 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 69,482,522 | 69,400,252 |
Common stock, shares outstanding | 69,482,522 | 69,400,252 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2020 | Sep. 24, 2019 | Sep. 29, 2020 | Sep. 24, 2019 | |
Revenue: | ||||
Revenue | $ 631,185 | $ 650,489 | $ 1,760,134 | $ 2,030,925 |
Restaurant operating costs (excluding depreciation and amortization shown separately below): | ||||
Cost of sales | 201,308 | 205,158 | 575,529 | 650,136 |
Labor | 217,275 | 218,342 | 652,976 | 667,712 |
Rent | 13,723 | 12,994 | 40,445 | 39,173 |
Other operating | 102,978 | 100,742 | 296,615 | 306,355 |
Pre-opening | 4,894 | 4,736 | 14,296 | 12,801 |
Depreciation and amortization | 29,364 | 28,347 | 87,434 | 84,574 |
Impairment and closure, net | 716 | 61 | 871 | 394 |
General and administrative | 25,951 | 35,225 | 88,520 | 111,168 |
Total costs and expenses | 596,209 | 605,605 | 1,756,686 | 1,872,313 |
(Loss) income from operations | 34,976 | 44,884 | 3,448 | 158,612 |
Interest expense (income), net | 1,502 | (81) | 2,601 | (1,526) |
Equity (loss) income from investments in unconsolidated affiliates | 1 | (154) | (597) | 100 |
(Loss) income before taxes | 33,475 | 44,811 | 250 | 160,238 |
Income tax (benefit) expense | 3,072 | 6,785 | (13,999) | 23,331 |
Net (loss) income including noncontrolling interests | 30,403 | 38,026 | 14,249 | 136,907 |
Less: Net income attributable to noncontrolling interests | 1,173 | 1,495 | 2,543 | 5,141 |
Net (loss) income attributable to Texas Roadhouse, Inc. and subsidiaries | 29,230 | 36,531 | 11,706 | 131,766 |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustment, net of tax of ($25), $40, ($16) and $35, respectively | 74 | (118) | 47 | (103) |
Total comprehensive (loss) income | $ 29,304 | $ 36,413 | $ 11,753 | $ 131,663 |
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: | ||||
Basic | $ 0.42 | $ 0.53 | $ 0.17 | $ 1.86 |
Diluted | $ 0.42 | $ 0.52 | $ 0.17 | $ 1.85 |
Weighted average shares outstanding: | ||||
Basic | 69,446 | 69,573 | 69,410 | 70,896 |
Diluted | 69,898 | 69,939 | 69,830 | 71,287 |
Cash dividends declared per share | $ 0.30 | $ 0.36 | $ 0.90 | |
Restaurant and other sales | ||||
Revenue: | ||||
Revenue | $ 626,429 | $ 645,230 | $ 1,747,145 | $ 2,014,720 |
Franchise royalties and fees | ||||
Revenue: | ||||
Revenue | $ 4,756 | $ 5,259 | $ 12,989 | $ 16,205 |
Consolidated Statements of In_2
Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2020 | Sep. 24, 2019 | Sep. 29, 2020 | Sep. 24, 2019 | |
Consolidated Statements of Income and Comprehensive Income | ||||
Foreign currency translation adjustment, (tax)/benefit | $ (25) | $ 40 | $ (16) | $ 35 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Cumulative Effect, Period of Adoption, Adjustment [Member]Total Texas Roadhouse, Inc. and Subsidiaries | Cumulative Effect, Period of Adoption, Adjustment [Member]Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment [Member] | Total Texas Roadhouse, Inc. and Subsidiaries | Common Stock | Additional Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total |
Balance at Dec. 25, 2018 | $ 945,569 | $ 72 | $ 257,388 | $ 688,337 | $ (228) | $ 15,139 | $ 960,708 | |||
Balance (in shares) at Dec. 25, 2018 | 71,617,510 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net (loss) income | 131,766 | 131,766 | 5,141 | 136,907 | ||||||
Other comprehensive income (loss), net of tax | (103) | (103) | (103) | |||||||
Distributions to noncontrolling interest holders | (4,885) | (4,885) | ||||||||
Acquisition of noncontrolling interest | (70) | (70) | (673) | (743) | ||||||
Dividends declared | (63,634) | (63,634) | (63,634) | |||||||
Shares issued under share-based compensation plans including tax effects (in shares) | 527,927 | |||||||||
Indirect repurchase of shares for minimum tax withholdings | (10,926) | (10,926) | (10,926) | |||||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (182,616) | |||||||||
Repurchase of shares of common stock | (130,965) | $ (2) | (130,963) | $ (130,965) | ||||||
Repurchase of shares of common stock (in shares) | (2,455,058) | (2,455,058) | ||||||||
Share-based compensation | 25,016 | 25,016 | $ 25,016 | |||||||
Balance (ASU 2016-02 (Topic 842)) at Sep. 24, 2019 | $ (2,678) | $ (2,678) | $ (2,678) | |||||||
Balance at Sep. 24, 2019 | 893,975 | $ 70 | 140,445 | 753,791 | (331) | 14,722 | 908,697 | |||
Balance (in shares) at Sep. 24, 2019 | 69,507,763 | |||||||||
Balance at Jun. 25, 2019 | 890,852 | $ 70 | 152,872 | 738,123 | (213) | 14,766 | 905,618 | |||
Balance (in shares) at Jun. 25, 2019 | 69,801,550 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net (loss) income | 36,531 | 36,531 | 1,495 | 38,026 | ||||||
Other comprehensive income (loss), net of tax | (118) | (118) | (118) | |||||||
Distributions to noncontrolling interest holders | (1,539) | (1,539) | ||||||||
Dividends declared | (20,863) | (20,863) | (20,863) | |||||||
Shares issued under share-based compensation plans including tax effects (in shares) | 94,010 | |||||||||
Indirect repurchase of shares for minimum tax withholdings | (1,657) | (1,657) | (1,657) | |||||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (29,416) | |||||||||
Repurchase of shares of common stock | (18,913) | (18,913) | $ (18,913) | |||||||
Repurchase of shares of common stock (in shares) | (358,381) | (358,381) | ||||||||
Share-based compensation | 8,143 | 8,143 | $ 8,143 | |||||||
Balance (ASU 2016-02 (Topic 842)) at Sep. 24, 2019 | $ (2,678) | $ (2,678) | $ (2,678) | |||||||
Balance at Sep. 24, 2019 | 893,975 | $ 70 | 140,445 | 753,791 | (331) | 14,722 | 908,697 | |||
Balance (in shares) at Sep. 24, 2019 | 69,507,763 | |||||||||
Balance at Dec. 31, 2019 | 915,994 | $ 69 | 140,501 | 775,649 | (225) | 15,175 | $ 931,169 | |||
Balance (in shares) at Dec. 31, 2019 | 69,400,252 | 69,400,252 | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net (loss) income | 11,706 | 11,706 | 2,543 | $ 14,249 | ||||||
Other comprehensive income (loss), net of tax | 47 | 47 | 47 | |||||||
Distributions to noncontrolling interest holders | (2,131) | (2,131) | ||||||||
Dividends declared | (24,989) | (24,989) | (24,989) | |||||||
Shares issued under share-based compensation plans including tax effects (in shares) | 501,930 | |||||||||
Indirect repurchase of shares for minimum tax withholdings | (9,291) | (9,291) | (9,291) | |||||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (167,251) | |||||||||
Repurchase of shares of common stock | (12,621) | (12,621) | $ (12,621) | |||||||
Repurchase of shares of common stock (in shares) | (252,409) | (252,409) | ||||||||
Share-based compensation | 22,070 | 22,070 | $ 22,070 | |||||||
Balance at Sep. 29, 2020 | 902,916 | $ 69 | 140,659 | 762,366 | (178) | 15,587 | $ 918,503 | |||
Balance (in shares) at Sep. 29, 2020 | 69,482,522 | 69,482,522 | ||||||||
Balance at Jun. 30, 2020 | 868,021 | $ 69 | 135,068 | 733,136 | (252) | 14,698 | $ 882,719 | |||
Balance (in shares) at Jun. 30, 2020 | 69,403,969 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net (loss) income | 29,230 | 29,230 | 1,173 | 30,403 | ||||||
Other comprehensive income (loss), net of tax | 74 | 74 | 74 | |||||||
Distributions to noncontrolling interest holders | (284) | (284) | ||||||||
Shares issued under share-based compensation plans including tax effects (in shares) | 113,453 | |||||||||
Indirect repurchase of shares for minimum tax withholdings | (1,989) | (1,989) | (1,989) | |||||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (34,900) | |||||||||
Share-based compensation | 7,580 | 7,580 | 7,580 | |||||||
Balance at Sep. 29, 2020 | $ 902,916 | $ 69 | $ 140,659 | $ 762,366 | $ (178) | $ 15,587 | $ 918,503 | |||
Balance (in shares) at Sep. 29, 2020 | 69,482,522 | 69,482,522 |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | |
Sep. 24, 2019 | Sep. 29, 2020 | Sep. 24, 2019 | |
Consolidated Statement of Stockholders' Equity | |||
Dividends declared (in dollars per share) | $ 0.30 | $ 0.36 | $ 0.90 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 29, 2020 | Sep. 24, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income including noncontrolling interests | $ 14,249 | $ 136,907 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 87,434 | 84,574 |
Deferred income taxes | (15,572) | (3,660) |
Loss on disposition of assets | 2,107 | 4,138 |
Impairment and closure costs | 799 | 26 |
Equity loss (income) from investments in unconsolidated affiliates | 597 | (100) |
Distributions of income received from investments in unconsolidated affiliates | 205 | 495 |
Provision for doubtful accounts | 9 | (18) |
Share-based compensation expense | 22,070 | 25,016 |
Changes in operating working capital: | ||
Receivables | 67,281 | 59,002 |
Inventories | 378 | 1,629 |
Prepaid expenses | 5,045 | 2,408 |
Other assets | (6,185) | (9,297) |
Accounts payable | (771) | (5,854) |
Deferred revenue-gift cards | (62,788) | (85,042) |
Accrued wages | (4,874) | 1,552 |
Prepaid income taxes and income taxes payable | (837) | 14,600 |
Accrued taxes and licenses | (2,144) | 2,440 |
Other accrued liabilities | 504 | (1,772) |
Operating lease right-of-use assets and lease liabilities | 3,519 | 4,367 |
Other liabilities | 35,009 | 10,586 |
Net cash provided by operating activities | 146,035 | 241,997 |
Cash flows from investing activities: | ||
Capital expenditures-property and equipment | (117,521) | (144,917) |
Proceeds from sale of property and equipment | 32 | 351 |
Proceeds from sale leaseback transaction | 2,167 | |
Net cash used in investing activities | (115,322) | (144,566) |
Cash flows from financing activities: | ||
Proceeds from revolving credit facility | 240,000 | |
Debt issuance costs | (641) | |
Distributions to noncontrolling interest holders | (2,131) | (4,885) |
Acquisition of noncontrolling interest | (743) | |
Proceeds from restricted stock and other deposits, net | (283) | 176 |
Indirect repurchase of shares for minimum tax withholdings | (9,291) | (10,926) |
Repurchase of shares of common stock | (12,621) | (130,963) |
Dividends paid to shareholders | (24,989) | (60,675) |
Net cash provided by (used in) financing activities | 190,044 | (208,016) |
Net increase (decrease) in cash and cash equivalents | 220,757 | (110,585) |
Cash and cash equivalents-beginning of period | 107,879 | 210,125 |
Cash and cash equivalents-end of period | 328,636 | 99,540 |
Supplemental disclosures of cash flow information: | ||
Interest paid, net of amounts capitalized | 1,654 | 238 |
Income taxes paid | 2,419 | 12,391 |
Capital expenditures included in current liabilities | $ 12,164 | $ 16,934 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 29, 2020 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Texas Roadhouse, Inc. ("TRI"), our wholly-owned subsidiaries and subsidiaries in which we have a controlling interest (collectively the "Company," "we," "our" and/or "us") as of September 29, 2020 and December 31, 2019 and for the 13 and 39 weeks ended September 29, 2020 and September 24, 2019. As of September 29, 2020, we owned and operated 526 restaurants and franchised an additional 97 restaurants in 49 states and ten foreign countries. Of the 526 company restaurants that were operating at September 29, 2020, 506 were wholly-owned and 20 were majority-owned. Of the 97 franchise restaurants, 70 were domestic restaurants and 27 were international restaurants. Included within these restaurant totals are three international franchise restaurants that remain temporarily closed due to the global COVID-19 pandemic (the "pandemic"). These stores continue to be included in the above totals as we believe they will re-open once it is considered safe to do so. As of September 24, 2019, we owned and operated 502 restaurants and franchised an additional 95 restaurants in 49 states and ten foreign countries. Of the 502 company restaurants that were operating at September 24, 2019, 482 were wholly-owned and 20 were majority-owned. Of the 95 franchise restaurants, 70 were domestic restaurants and 25 were international restaurants. As of September 29, 2020 and September 24, 2019, we owned a 5.0% to 10.0% equity interest in 24 domestic franchise restaurants. Additionally, as of September 29, 2020 and September 24, 2019, we owned a non-Texas Roadhouse restaurants as part of a joint venture agreement with a casual dining restaurant operator in China. The unconsolidated restaurants are accounted for using the equity method. Our investments in these unconsolidated affiliates are included in other assets in our unaudited condensed consolidated balance sheets, and we record our percentage share of net income earned by these unconsolidated affiliates in our unaudited condensed consolidated statements of income and comprehensive income under equity income from investments in unconsolidated affiliates. All significant intercompany balances and transactions for these unconsolidated restaurants as well as the entities whose accounts have been consolidated have been eliminated. We have made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reporting of revenue and expenses during the periods to prepare these unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP"). Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill, obligations related to insurance reserves, leases and leasehold improvements, legal reserves, gift card breakage and third-party fees and income taxes. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position, results of operations and cash flows for the periods presented. The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, except that certain information and footnotes have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission (the "SEC"). Operating results for the 13 and 39 weeks ended September 29, 2020 are not necessarily indicative of the results that may be expected for the year ending December 29, 2020. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. Risks and Uncertainties The Company is subject to risks and uncertainties as a result of the pandemic. On March 13, 2020, the pandemic was declared a National Public Health Emergency. Shortly after the national emergency declaration, state and local officials began placing restrictions on restaurants, some of which allowed To-Go or curbside service only while others limited capacity in the dining room. By March 31, 2020, the last day of our Q1 2020 fiscal quarter, all of our domestic company and franchise restaurants were under state or local order which only allowed for To-Go or curbside service. Beginning in early May 2020, state and local guidelines began to allow dining rooms to re-open, typically at a limited capacity. By September 29, 2020, the last day of our Q3 2020 fiscal quarter, nearly all of our 526 company-owned restaurants had re-opened their dining rooms under various limited capacity restrictions. We continue to monitor state and local plans as they move along their phased approach to allow restaurants to re-open at full capacity. We have developed a hybrid operating model that accommodates our limited capacity dining rooms together with enhanced To-Go, which includes a curbside and/or drive-up operating model, as permitted by local guidelines. This includes design changes to our building to better accommodate the increased To-Go sales and the expansion of outdoor seating areas where allowed. We also have installed booth partitions in all of our restaurants as an added safety measure for our guests. In addition, we have increased our already strict sanitation requirements, are conducting daily health and temperature checks for all employees before they begin their shift and are requiring personal protective equipment to be worn by all restaurant employees at all times. As we work through the various limited capacity phases at each of our locations, the safety of our employees and guests remains our top priority. As a result of the temporary dining room closures and the subsequent limited capacity restrictions for in-person dining, we have experienced a significant decrease in traffic which has impacted our operating results. While nearly all of our dining rooms have re-opened, a significant portion continue to operate under capacity restrictions that severely limit the number of guests we can serve. In addition, while we have seen significant sales growth in our To-Go program, even with dining rooms re-opened, we currently do not expect these sales will generate a similar profit margin and cash flows to our normal operating model. We expect our operating results to continue to be impacted until at least such time that state and local restrictions are lifted, and our dining rooms can re-open at full capacity. We cannot predict how long the pandemic will last, how long it will take until all state and local restrictions will be lifted, or if dining rooms will be required to close again in whole or in part in areas severely impacted by the pandemic. In addition, we cannot predict the overall impact on the economy or consumer spending habits. The extent of this re-opening process will determine the significance of the impact to our financial condition, financial results, and liquidity in future periods. In addition, significant items subject to estimates and assumptions including the carrying amount of property and equipment, goodwill, and lease related assets could be impacted. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 29, 2020 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | (2) Recent Accounting Pronouncements Financial Instruments (Accounting Standards Update 2016-13, "ASU 2016-13") In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Goodwill (Accounting Standards Update 2017-04, "ASU 2017-04") In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, We adopted ASU 2017-04 as of the beginning of our 2020 fiscal year. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements. Fair Value Measurement (Accounting Standards Update 2018-13, "ASU 2018-13") In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which changes disclosure requirements for fair value measurements. We adopted ASU 2018-13 as of the beginning of our 2020 fiscal year. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements. Income Taxes (Accounting Standards Update 2019-12, "ASU 2019-12") In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions related to the approach for intraperiod tax allocations, the calculation of income taxes in interim periods, and the recognition of deferred taxes for investments. This guidance also simplifies aspects of accounting for recognizing deferred taxes for taxable goodwill. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 (our 2021 fiscal year) and for interim periods within those years, with early adoption permitted. We are currently assessing the impact of this new standard on our consolidated financial statements. Reference Rate Reform (Accounting Standards Update 2020-04, "ASU 2020-04") In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting. These changes are intended to simplify the market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This guidance is effective upon issuance to modifications made as early as the beginning of the interim period through December 31, 2022. We are currently assessing the impact of this new standard on our consolidated financial statements. |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 29, 2020 | |
Long-term Debt | |
Long-term Debt and Obligation Under Capital Lease | (3) Long-term Debt On August 7, 2017, we entered into the Amended and Restated Credit Agreement (the "Amended Credit Agreement") with respect to our revolving credit facility with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A., PNC Bank, N.A., and Wells Fargo Bank, N.A. The revolving credit facility remains an unsecured, revolving credit agreement under which we may borrow up to $200.0 million with the option to increase the revolving credit facility by an additional $200.0 million subject to certain limitations, including approval by the syndicate of lenders. On May 11, 2020, we amended the revolving credit facility to provide for an incremental revolving credit facility of up to million. This amount reduced the additional million that was available under the revolving credit facility. The maturity date for the incremental revolving credit facility is May 10, 2021. The maturity date for the original revolving credit facility remains August 5, 2022. The terms of the amendment require us to pay interest on outstanding borrowings of the original revolving credit facility at LIBOR plus a margin of 1.50% and to pay a commitment fee of 0.25% per year on any unused portion of the revolving credit facility through the end of our Q1 2021 fiscal quarter. The amendment also provides an Alternate Base Rate that may be substituted for LIBOR. depending on our consolidated net leverage ratio. million of outstanding letters of credit. This outstanding amount is included as long-term debt on our condensed consolidated balance sheet. The terms of the amendment also require us to pay interest on outstanding borrowings of the incremental revolving credit facility at LIBOR, which is subject to a floor of 1.0%, plus a margin of 2.25% and to pay a commitment fee of 0.50% per year on any unused portion of the incremental revolving credit facility through the maturity date. As of September 29, 2020, we had million of availability on the incremental revolving credit facility. This outstanding amount is included as current maturities of long-term debt on our condensed consolidated balance sheet. The weighted-average interest rate for the $240.0 million of combined borrowings on our revolving credit facility as of September 29, 2020 was 1.98%. The lenders’ obligation to extend credit pursuant to the Amended Credit Agreement depends on us maintaining certain financial covenants. The amendment to the revolving credit facility also modified the financial covenants through the end of our Q1 2021 fiscal quarter. We were in compliance with all financial covenants as of September 29, 2020. |
Revenue
Revenue | 9 Months Ended |
Sep. 29, 2020 | |
Revenue | |
Revenue | (4) Revenue The following table disaggregates our revenue by major source (in thousands): 13 weeks ended 39 weeks ended September 29, 2020 September 24, 2019 September 29, 2020 September 24, 2019 Restaurant and other sales $ 626,429 $ 645,230 $ 1,747,145 $ 2,014,720 Franchise royalties 4,141 4,645 11,195 14,316 Franchise fees 615 614 1,794 1,889 Total revenue $ 631,185 $ 650,489 $ 1,760,134 $ 2,030,925 We record deferred revenue for gift cards which includes cards that have been sold but not yet redeemed, a breakage adjustment for a percentage of gift cards that are not expected to be redeemed, and fees paid on gift cards sold through third-party retailers. When the gift cards are redeemed, we recognize restaurant sales and reduce deferred revenue. We amortize breakage and third-party fees consistent with the historic redemption pattern of the associated gift card or on actual redemptions in periods where redemptions do not align with historic redemption patterns. We recognize these amounts as a component of other sales. As of September 29, 2020 and December 31, 2019, our deferred revenue balance related to gift cards was million, respectively. We recognized sales of million for the 13 and 39 weeks ended September 29, 2020, respectively, related to the amount in deferred revenue as of December 31, 2019. We recognized sales of |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 29, 2020 | |
Income Taxes | |
Income Taxes | (5) Income Taxes For the 13 week periods ended September 29, 2020 and September 24, 2019, we recognized income tax expense of 9.2% and 15.1 %, respectively. For the 39 week periods ended September 29, 2020 and September 24, 2019, we recognized income tax benefit of $14.0 million and income tax expense of $23.3 million, respectively. For the 39 week period ended September 29, 2020, due to the impact of tax credits on near break-even pre-tax income, the effective tax rate is not meaningful. For the 13 and 39 week periods ended September 29, 2020, we recognized income tax expense (benefit) using a discrete tax calculation as we were unable to reliably estimate our full year effective income tax rate. This was primarily due to the inability to estimate the increased impact of the FICA tip and Work opportunity tax credits on our effective tax rate as a result of the significant decrease in pre-tax income. The effective tax rate decreased for the 13 and 39 week periods ended September 29, 2020 primarily due to the impact of FICA tip and Work opportunity tax credits as a higher percentage of pre-tax income. In addition, the impact of these credits was the primary driver of the difference between our statutory and effective tax rates in both periods. Additionally, these credits exceeded our federal tax liability for the 39 week period ended September 29, 2020, but we expect to utilize these credits in the current or future years or by carrying back to our 2019 tax year. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 29, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | (6) Commitments and Contingencies The estimated cost of completing capital project commitments at September 29, 2020 and December 31, 2019 was $110.5 million and $119.0 million, respectively. At the onset of the pandemic, we delayed construction on all restaurants that were not substantially complete. As of September 29, 2020, restaurants had either resumed construction or were approved to resume construction. The estimated cost of completing these As of September 29, 2020 and December 31, 2019, we were contingently liable for $13.3 million and $13.9 million, respectively, for seven lease guarantees, listed in the table below. These amounts represent the maximum potential liability of future payments under the guarantees. In the event of default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover damages incurred. No material liabilities have been recorded as of September 29, 2020 and December 31, 2019 as the likelihood of default was deemed to be less than probable and the fair value of the guarantees is not considered significant. Lease Current Lease Everett, Massachusetts (1)(2) September 2002 February 2023 Longmont, Colorado (1) October 2003 May 2029 Montgomeryville, Pennsylvania (1) October 2004 March 2021 Fargo, North Dakota (1) February 2006 July 2021 Logan, Utah (1) January 2009 August 2024 Irving, Texas (3) December 2013 December 2024 Louisville, Kentucky (3)(4) December 2013 November 2023 (1) Real estate lease agreements for restaurant locations which we entered into before granting franchise rights to those restaurants. We have subsequently assigned the leases to the franchisees, but remain contingently liable under the terms of the lease if the franchisee defaults . (2) As discussed in note 7, this restaurant is owned, in part, by our founder. (3) Leases associated with non-Texas Roadhouse restaurants which were sold. The leases were assigned to the acquirer, but we remain contingently liable under the terms of the lease if the acquirer defaults. (4) We may be released from liability after the initial contractual lease term expiration contingent upon certain conditions being met by the acquirer. During the 13 and 39 weeks ended September 29, 2020, we bought most of our beef from three suppliers. We have no material minimum purchase commitments with our vendors that extend beyond a year. Occasionally, we are a defendant in litigation arising in the ordinary course of our business, including "slip and fall" accidents, employment related claims, claims related to our service of alcohol, and claims from guests or employees alleging illness, injury or food quality, health or operational concerns. None of these types of litigation, most of which are covered by insurance, has had a material adverse effect on us during the periods covered by this report and, as of the date of this report, we are not party to any litigation that we believe could have a material adverse effect on our business. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 29, 2020 | |
Related Party Transactions | |
Related Party Transactions | (7) Related Party Transactions As of September 29, 2020 and September 24, 2019, we had six franchise restaurants and one majority-owned company restaurant owned in part by certain officers of the Company. For both the 13 week periods ended September 29, 2020 and September 24, 2019, these franchise entities paid us fees of September 29, 2020 and September 24, 2019, these franchise entities paid us fees of $0.8 million and $1.0 million, respectively. As disclosed in note 6, we are contingently liable on a lease related to of these franchise restaurants. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 29, 2020 | |
Earnings Per Share | |
Earnings Per Share | (8) Earnings Per Share The share and net income per share data for all periods presented are based on the historical weighted-average shares outstanding. The diluted earnings per share calculations show the effect of the weighted-average restricted stock units from our equity incentive plans, except during loss periods as the effect would be anti-dilutive. Performance stock units are not included in the diluted earnings per share calculation until the performance-based criteria have been met. For the 13 week periods ended September 29, 2020 and September 24, 2019, there were 4,570 and 22,302 shares of nonvested stock, respectively, that were outstanding but not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect. For the 39 week periods ended September 29, 2020 and September 24, 2019, there were The following table sets forth the calculation of earnings per share and weighted-average shares outstanding (in thousands) as presented in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended 39 Weeks Ended September 29, 2020 September 24, 2019 September 29, 2020 September 24, 2019 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 29,230 $ 36,531 $ 11,706 $ 131,766 Basic EPS: Weighted-average common shares outstanding 69,446 69,573 69,410 70,896 Basic EPS $ 0.42 $ 0.53 $ 0.17 $ 1.86 Diluted EPS: Weighted-average common shares outstanding 69,446 69,573 69,410 70,896 Dilutive effect of nonvested stock 452 366 420 391 Shares-diluted 69,898 69,939 69,830 71,287 Diluted EPS $ 0.42 $ 0.52 $ 0.17 $ 1.85 |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 29, 2020 | |
Fair Value Measurement | |
Fair Value Measurement | (9) Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures ("ASC 820"), establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 establishes a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. Level 1 Inputs based on quoted prices in active markets for identical assets. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the assets, either directly or indirectly. Level 3 Inputs that are unobservable for the asset. There were no transfers among levels within the fair value hierarchy during the 13 and 39 weeks ended September 29, 2020. The following table presents the fair values for our financial assets and liabilities measured on a recurring basis: Fair Value Measurements Level September 29, 2020 December 31, 2019 Deferred compensation plan—assets 1 $ 49,175 $ 44,623 Deferred compensation plan—liabilities 1 (49,150) (44,679) The Second Amended and Restated Deferred Compensation Plan of Texas Roadhouse Management Corp (as amended, the "Deferred Compensation Plan") is a nonqualified deferred compensation plan which allows highly compensated employees to defer receipt of a portion of their compensation and contribute such amounts to one or more investment funds held in a rabbi trust. We report the amounts of the rabbi trust in other assets and the corresponding liability in other liabilities in our unaudited condensed consolidated financial statements. These investments are considered trading securities and are reported at fair value based on quoted market prices. The realized and unrealized holding gains and losses related to these investments, as well as the offsetting compensation expense, are recorded in general and administrative expense in the unaudited condensed consolidated statements of income and comprehensive income. The following table presents the fair value of our assets measured on a nonrecurring basis: Fair Value Measurements Total gain (loss) 13 Weeks Ended 39 Weeks Ended September 29, December 31, September 29, September 29, Level 2020 2019 2020 2020 Long-lived assets held for use 1 $ — $ 1,684 $ — $ — Long-lived assets held for sale 3 $ 1,645 $ — $ (432) $ (432) Operating lease right-of-use assets 3 $ — $ 611 $ — $ (501) Investments in unconsolidated affiliates 3 $ 2,000 $ — $ — $ (528) Long-lived assets held for use include leasehold improvements for one restaurant that was subject to a forced relocation. This restaurant was relocated in February 2020 at which time the contractually negotiated amount for these assets was received. Long-lived assets held for sale include land and building at a site that was relocated. These assets are included in prepaid expenses and other current assets in our condensed consolidated balance sheets. These assets are valued using a Level 3 input, i.e., information from broker listings discounted for estimated selling costs. This resulted in a loss of Operating lease right-of-use assets include the lease related assets for one underperforming store that was permanently closed in April 2020 and one store that was relocated in February 2020. Both of these assets were reduced to a fair value of zero in Q1 2020. This resulted in a loss of million which is included in impairment and closure, net in our unaudited condensed consolidated statements of income and comprehensive income for the 39 weeks ended September 29, 2020. At December 31, 2019, operating lease right-of-use assets include the lease related assets for the underperforming store noted above. Investments in unconsolidated affiliates include a 40% equity interest in a China joint venture that was reduced to fair value. This asset is valued using a Level 3 input, i.e., the amount we expect to receive upon the sale of this investment. This resulted in a loss of million which is included in equity income from investments in unconsolidated affiliates in our unaudited condensed consolidated statements of income and comprehensive income for the 39 weeks ended September 29, 2020. At September 29, 2020 and December 31, 2019, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values based on the short-term nature of these instruments. At September 29, 2020, the fair value of our revolving credit facility approximated its carrying value since it is a variable rate credit facility (Level 2). |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Sep. 29, 2020 | |
Share-based Compensation | |
Share-based Compensation | (10) Share Based Compensation On May 16, 2013, our stockholders approved the Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan (the "Plan"). The Plan provides for the granting of various forms of equity awards including options, stock appreciation rights, full value awards, and performance based awards. The Company provides restricted stock units ("RSUs") to employees as a form of share-based compensation. An RSU is the conditional right to receive one share of common stock upon satisfaction of the vesting requirement. In addition to RSUs, the Company provides performance stock units ("PSUs") to executives as a form of share-based compensation. A PSU is the conditional right to receive one share of common stock upon meeting a performance obligation along with the satisfaction of the vesting requirement. The following table summarizes the share-based compensation recorded in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended 39 Weeks Ended September 29, 2020 September 24, 2019 September 29, 2020 September 24, 2019 Labor expense $ 2,480 $ 2,164 $ 7,400 $ 6,513 General and administrative expense 5,100 5,979 14,670 18,503 Total share-based compensation expense $ 7,580 $ 8,143 $ 22,070 $ 25,016 We grant PSUs to all of our executives subject to a one-year vesting and the achievement of certain earnings targets, which determine the number of units to vest at the end of the vesting period. Share-based compensation expense is recognized for the number of units expected to vest at the end of the period and is expensed beginning on the grant date and through the performance period. For each grant, PSUs vest after meeting the performance and service conditions. There were no PSUs that vested during the 13 week periods ended September 29, 2020 and September 24, 2019. The total intrinsic value of PSUs vested during the 39 week periods ended September 29, 2020 and September 24, 2019 was $5.4 million and $8.8 million, respectively. On January 8, 2020, 95,946 shares vested related to the January 2019 PSU grant and were distributed during the 13 weeks ending March 31, 2020. This included 77,000 granted shares and 18,946 incremental shares due to the grant exceeding the initial 100% target. With respect to unvested PSUs, we recognized expense of $0.4 million during the 13 and 39 weeks ended September 29, 2020. At September 29, 2020, with respect to unvested PSUs, there was $0.1 million of unrecognized compensation cost that is expected to be recognized over a weight ed-average period of 0.3 years . |
Stock Repurchase Program
Stock Repurchase Program | 9 Months Ended |
Sep. 29, 2020 | |
Stockholders' Equity | |
Stock Repurchase Program | (11) Stock Repurchase Program On May 31, 2019, our Board of Directors approved a stock repurchase program under which we may repurchase up to $250.0 million of our common stock. This stock repurchase program has no expiration date and replaced a previous stock repurchase program which was approved on May 22, 2014. All repurchases to date under our stock repurchase programs have been made through open market transactions. The timing and the amount of any repurchases are determined by management under parameters established by our Board of Directors, based on an evaluation of our stock price, market conditions and other corporate considerations. For the 13 week period ended September 29, 2020, we did not repurchase any shares of our common stock. For the 39 week period ended September 29, 2020, we paid shares of our common stock. For the 13 week period ended September 24, 2019, we paid $18.9 million to repurchase 358,381 shares of our common stock. For the 39 week period ended September 24, 2019, we paid $131.0 million to repurchase 2,455,058 shares of our common stock. On March 17, 2020, we suspended all share repurchase activity. As of September 29, 2020, we had million remaining under our authorized stock repurchase program. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 29, 2020 | |
Summary of Significant Accounting Policies | |
Financial Instruments | Financial Instruments (Accounting Standards Update 2016-13, "ASU 2016-13") In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Goodwill | Goodwill (Accounting Standards Update 2017-04, "ASU 2017-04") In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, We adopted ASU 2017-04 as of the beginning of our 2020 fiscal year. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements. |
Fair Value Measurement | Fair Value Measurement (Accounting Standards Update 2018-13, "ASU 2018-13") In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which changes disclosure requirements for fair value measurements. We adopted ASU 2018-13 as of the beginning of our 2020 fiscal year. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements. |
Income Taxes | Income Taxes (Accounting Standards Update 2019-12, "ASU 2019-12") In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions related to the approach for intraperiod tax allocations, the calculation of income taxes in interim periods, and the recognition of deferred taxes for investments. This guidance also simplifies aspects of accounting for recognizing deferred taxes for taxable goodwill. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 (our 2021 fiscal year) and for interim periods within those years, with early adoption permitted. We are currently assessing the impact of this new standard on our consolidated financial statements. |
Reference Rate Reform | Reference Rate Reform (Accounting Standards Update 2020-04, "ASU 2020-04") In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting. These changes are intended to simplify the market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This guidance is effective upon issuance to modifications made as early as the beginning of the interim period through December 31, 2022. We are currently assessing the impact of this new standard on our consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 29, 2020 | |
Revenue | |
Schedule of disaggregated revenue | The following table disaggregates our revenue by major source (in thousands): 13 weeks ended 39 weeks ended September 29, 2020 September 24, 2019 September 29, 2020 September 24, 2019 Restaurant and other sales $ 626,429 $ 645,230 $ 1,747,145 $ 2,014,720 Franchise royalties 4,141 4,645 11,195 14,316 Franchise fees 615 614 1,794 1,889 Total revenue $ 631,185 $ 650,489 $ 1,760,134 $ 2,030,925 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 29, 2020 | |
Commitments and Contingencies | |
Schedule of real estate lease agreements for franchises | Lease Current Lease Everett, Massachusetts (1)(2) September 2002 February 2023 Longmont, Colorado (1) October 2003 May 2029 Montgomeryville, Pennsylvania (1) October 2004 March 2021 Fargo, North Dakota (1) February 2006 July 2021 Logan, Utah (1) January 2009 August 2024 Irving, Texas (3) December 2013 December 2024 Louisville, Kentucky (3)(4) December 2013 November 2023 (1) Real estate lease agreements for restaurant locations which we entered into before granting franchise rights to those restaurants. We have subsequently assigned the leases to the franchisees, but remain contingently liable under the terms of the lease if the franchisee defaults . (2) As discussed in note 7, this restaurant is owned, in part, by our founder. (3) Leases associated with non-Texas Roadhouse restaurants which were sold. The leases were assigned to the acquirer, but we remain contingently liable under the terms of the lease if the acquirer defaults. (4) We may be released from liability after the initial contractual lease term expiration contingent upon certain conditions being met by the acquirer. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 29, 2020 | |
Earnings Per Share | |
Schedule of calculation of earnings per share and weighted average shares outstanding | The following table sets forth the calculation of earnings per share and weighted-average shares outstanding (in thousands) as presented in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended 39 Weeks Ended September 29, 2020 September 24, 2019 September 29, 2020 September 24, 2019 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 29,230 $ 36,531 $ 11,706 $ 131,766 Basic EPS: Weighted-average common shares outstanding 69,446 69,573 69,410 70,896 Basic EPS $ 0.42 $ 0.53 $ 0.17 $ 1.86 Diluted EPS: Weighted-average common shares outstanding 69,446 69,573 69,410 70,896 Dilutive effect of nonvested stock 452 366 420 391 Shares-diluted 69,898 69,939 69,830 71,287 Diluted EPS $ 0.42 $ 0.52 $ 0.17 $ 1.85 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 29, 2020 | |
Fair Value Measurement | |
Schedule of fair values for our financial assets and liabilities measured on a recurring basis | Fair Value Measurements Level September 29, 2020 December 31, 2019 Deferred compensation plan—assets 1 $ 49,175 $ 44,623 Deferred compensation plan—liabilities 1 (49,150) (44,679) |
Schedule of fair value of assets and liabilities measured on a nonrecurring basis | The following table presents the fair value of our assets measured on a nonrecurring basis: Fair Value Measurements Total gain (loss) 13 Weeks Ended 39 Weeks Ended September 29, December 31, September 29, September 29, Level 2020 2019 2020 2020 Long-lived assets held for use 1 $ — $ 1,684 $ — $ — Long-lived assets held for sale 3 $ 1,645 $ — $ (432) $ (432) Operating lease right-of-use assets 3 $ — $ 611 $ — $ (501) Investments in unconsolidated affiliates 3 $ 2,000 $ — $ — $ (528) |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Sep. 29, 2020 | |
Share-based Compensation | |
Summary of allocation of share-based compensation expense | 13 Weeks Ended 39 Weeks Ended September 29, 2020 September 24, 2019 September 29, 2020 September 24, 2019 Labor expense $ 2,480 $ 2,164 $ 7,400 $ 6,513 General and administrative expense 5,100 5,979 14,670 18,503 Total share-based compensation expense $ 7,580 $ 8,143 $ 22,070 $ 25,016 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 9 Months Ended | |
Sep. 29, 2020restaurantitem | Sep. 24, 2019restaurantitem | |
Description of Business | ||
Number of restaurants | 526 | |
Number of states in which restaurants operate | item | 49 | 49 |
Number of countries in which restaurants operate | item | 10 | 10 |
Company | ||
Description of Business | ||
Number of restaurants | 526 | 502 |
Company | Wholly-owned | ||
Description of Business | ||
Number of restaurants | 506 | 482 |
Company | Majority-owned | ||
Description of Business | ||
Number of restaurants | 20 | 20 |
Franchise | ||
Description of Business | ||
Number of restaurants | 97 | 95 |
Franchise | Domestic | ||
Description of Business | ||
Number of restaurants | 70 | 70 |
Franchise | International | ||
Description of Business | ||
Number of restaurants | 27 | 25 |
Number of restaurants closed | 3 | |
Franchise | Unconsolidated | Domestic | ||
Description of Business | ||
Number of restaurants | 24 | 24 |
Franchise | Minimum | Unconsolidated | ||
Description of Business | ||
Ownership percentage | 5.00% | 5.00% |
Franchise | Maximum | Unconsolidated | ||
Description of Business | ||
Ownership percentage | 10.00% | 10.00% |
Non-Texas Roadhouse restaurants | Unconsolidated | ||
Description of Business | ||
Number of restaurants | 4 | 4 |
Ownership percentage | 40.00% | 40.00% |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Millions | May 11, 2020 | Aug. 07, 2017 | Sep. 29, 2020 |
Revolving Credit Facility | |||
Weighted-average interest rate (as a percent) | 1.98% | ||
Amount borrowed | $ 240 | ||
Revolving Credit Facility [Member] | |||
Revolving Credit Facility | |||
Revolving credit facility, maximum borrowing capacity | $ 200 | ||
Revolving credit facility contingent increase in maximum borrowing capacity | $ 200 | 200 | |
Line Of Credit Facility, Increase In Borrowing Capacity | $ 82.5 | ||
Percentage of commitment fee on unused credit facility | 0.25% | ||
Revolving credit facility, amount outstanding | 50 | ||
Revolving credit facility, remaining borrowing capacity | 32.5 | ||
Revolving Credit Facility [Member] | Minimum | |||
Revolving Credit Facility | |||
Percentage of commitment fee on unused credit facility | 0.125% | ||
Revolving Credit Facility [Member] | Maximum | |||
Revolving Credit Facility | |||
Percentage of commitment fee on unused credit facility | 0.40% | ||
Revolving Credit Facility [Member] | LIBOR | |||
Revolving Credit Facility | |||
Interest rate added to base rate (as a percent) | 1.50% | ||
Revolving Credit Facility [Member] | LIBOR | Minimum | |||
Revolving Credit Facility | |||
Interest rate added to base rate (as a percent) | 0.875% | ||
Weighted-average interest rate (as a percent) | 1.00% | ||
Revolving Credit Facility [Member] | LIBOR | Maximum | |||
Revolving Credit Facility | |||
Interest rate added to base rate (as a percent) | 2.25% | ||
Percentage of commitment fee on unused credit facility | 0.50% | ||
Original Revolving Credit Facility [Member] | |||
Revolving Credit Facility | |||
Revolving credit facility, amount outstanding | 190 | ||
Revolving credit facility, remaining borrowing capacity | 1.8 | ||
Letters of credit outstanding | $ 8.2 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2020 | Sep. 24, 2019 | Sep. 29, 2020 | Sep. 24, 2019 | |
Revenue | ||||
Total revenue | $ 631,185 | $ 650,489 | $ 1,760,134 | $ 2,030,925 |
Restaurant and other sales | ||||
Revenue | ||||
Total revenue | 626,429 | 645,230 | 1,747,145 | 2,014,720 |
Franchise royalties | ||||
Revenue | ||||
Total revenue | 4,141 | 4,645 | 11,195 | 14,316 |
Franchise fees | ||||
Revenue | ||||
Total revenue | $ 615 | $ 614 | $ 1,794 | $ 1,889 |
Revenue - Other (Details)
Revenue - Other (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2020 | Sep. 24, 2019 | Sep. 29, 2020 | Sep. 24, 2019 | Dec. 31, 2019 | |
Revenue | |||||
Deferred revenue-gift cards | $ 146,470 | $ 146,470 | $ 209,258 | ||
Gift cards | |||||
Revenue | |||||
Deferred revenue-gift cards | 146,500 | 146,500 | $ 209,300 | ||
Deferred revenue recognized | $ 15,200 | $ 15,800 | $ 101,300 | $ 120,800 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2020 | Sep. 24, 2019 | Sep. 29, 2020 | Sep. 24, 2019 | |
Reconciliation of the statutory federal income tax rate to our effective tax rate: | ||||
Tax Benefit (tax expense), as a percent | 9.20% | (15.10%) | ||
Income tax (benefit) expense | $ 3,072 | $ 6,785 | $ (13,999) | $ 23,331 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 29, 2020USD ($)item | Sep. 29, 2020USD ($)itemrestaurant | Dec. 31, 2019USD ($) | |
Commitments and Contingencies | |||
Estimated cost to complete capital project commitments (in dollars) | $ 110.5 | $ 110.5 | $ 119 |
Number of continuing construction of restaurants. | restaurant | 18 | ||
Estimated cost of completion | $ 46.3 | ||
Number of suppliers providing most of the company's beef | item | 3 | 3 | |
Lease Agreements | |||
Commitments and Contingencies | |||
Number of leases guarantees entity contingently liable | item | 7 | ||
Lease Agreements | Maximum | |||
Commitments and Contingencies | |||
Contingently liable amount | $ 13.3 | $ 13.3 | $ 13.9 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 29, 2020USD ($)restaurant | Sep. 29, 2020USD ($)restaurant | Sep. 24, 2019USD ($)restaurant | |
Related Party Transactions | |||
Number of restaurants | 526 | 526 | |
Franchise | |||
Related Party Transactions | |||
Number of restaurants | 97 | 97 | 95 |
Officers, directors and shareholders | Majority-owned | |||
Related Party Transactions | |||
Number of restaurants | 1 | 1 | 1 |
Officers, directors and shareholders | Franchise | |||
Related Party Transactions | |||
Number of restaurants | 6 | 6 | 6 |
Fees received from franchise and license restaurants | $ | $ 0.3 | $ 0.8 | $ 1 |
Number of restaurants for which the entity is contingently liable on the lease | 1 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2020 | Sep. 24, 2019 | Sep. 29, 2020 | Sep. 24, 2019 | |
Earnings per share | ||||
Net (loss) income attributable to Texas Roadhouse, Inc. and subsidiaries | $ 29,230 | $ 36,531 | $ 11,706 | $ 131,766 |
Basic EPS: | ||||
Weighted-average common shares outstanding (in shares) | 69,446,000 | 69,573,000 | 69,410,000 | 70,896,000 |
Basic EPS (in dollars per share) | $ 0.42 | $ 0.53 | $ 0.17 | $ 1.86 |
Diluted EPS: | ||||
Weighted-average common shares outstanding (in shares) | 69,446,000 | 69,573,000 | 69,410,000 | 70,896,000 |
Dilutive effect of nonvested stock (in shares) | 452,000 | 366,000 | 420,000 | 391,000 |
Shares-diluted (in shares) | 69,898,000 | 69,939,000 | 69,830,000 | 71,287,000 |
Diluted EPS (in dollars per share) | $ 0.42 | $ 0.52 | $ 0.17 | $ 1.85 |
Nonvested stock | ||||
Antidilutive securities | ||||
Anti-dilutive securities (in shares) | 4,570 | 22,302 | 21,957 | 5,384 |
Fair Value Measurement - Financ
Fair Value Measurement - Financial Assets and Liabilities (Details) $ in Thousands | 9 Months Ended | |
Sep. 29, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Fair value of financial instruments | ||
Transfer of asset levels within the fair value hierarchy | $ 0 | |
Minimum number of investment funds in rabbi trust for deferred compensation plan | item | 1 | |
Fair value measured on a recurring basis | Level 1 | ||
Fair value of financial instruments | ||
Deferred compensation plan - assets | $ 49,175 | $ 44,623 |
Deferred compensation plan - liabilities | $ (49,150) | $ (44,679) |
Fair Value Measurement - Assets
Fair Value Measurement - Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2020 | Sep. 24, 2019 | Sep. 29, 2020 | Sep. 24, 2019 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Operating lease right-of-use asset, net | $ 526,501 | $ 526,501 | $ 499,801 | ||
Investments in unconsolidated affiliates , total gain (loss) | $ 1 | $ (154) | (597) | $ 100 | |
China Joint Venture | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Investments in unconsolidated affiliates , total gain (loss) | $ (500) | ||||
Ownership percentage | 40.00% | 40.00% | |||
Level 1 | Fair value measured on a nonrecurring basis | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Long-lived assets held for use, fair value measurements | 1,684 | ||||
Level 3 | Fair value measured on a nonrecurring basis | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Long-lived assets held for sale | $ 1,645 | $ 1,645 | |||
Operating lease right-of-use asset, net | $ 611 | ||||
Long-lived assets held for sale, total gain (loss) | (432) | (432) | |||
Operating lease right-of-use assets, total gain (loss) | (501) | ||||
Investments in unconsolidated affiliates, fair value measurements | $ 2,000 | 2,000 | |||
Investments in unconsolidated affiliates , total gain (loss) | $ (528) |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2020 | Sep. 24, 2019 | Sep. 29, 2020 | Sep. 24, 2019 | |
Share-based Compensation | ||||
Share-based compensation expense | $ 7,580 | $ 8,143 | $ 22,070 | $ 25,016 |
Labor expense | ||||
Share-based Compensation | ||||
Share-based compensation expense | 2,480 | 2,164 | 7,400 | 6,513 |
General and administrative expense | ||||
Share-based Compensation | ||||
Share-based compensation expense | $ 5,100 | $ 5,979 | $ 14,670 | $ 18,503 |
Share-based Compensation, PSU (
Share-based Compensation, PSU (Details) - USD ($) $ in Thousands | Jan. 08, 2020 | Sep. 29, 2020 | Sep. 24, 2019 | Sep. 29, 2020 | Sep. 24, 2019 |
Share-based Compensation | |||||
Intrinsic value of awards vested (in dollars) | $ 5,400 | $ 8,800 | |||
Expense compensation | $ 7,580 | $ 8,143 | $ 22,070 | $ 25,016 | |
PSUs | |||||
Share-based Compensation | |||||
Vesting period | 1 year | ||||
Vested (in shares) | (95,946) | 0 | 0 | ||
Granted (in shares) | 77,000 | ||||
Incremental Performance Shares (in shares) | 18,946 | ||||
Target percentage relating to shares granted (as a percent) | 100.00% | ||||
Expense compensation | $ 400 | ||||
Unrecognized compensation cost of unvested stock awards (in dollars) | $ 100 | $ 100 | |||
Unrecognized Compensation Cost Recognization Weighted Average Period | 3 months 18 days |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2019 | Sep. 29, 2020 | Sep. 24, 2019 | May 31, 2019 | |
Stockholders' Equity | ||||
Repurchase of common stock authorized by board of directors | $ 250,000 | |||
Payments to repurchase common stock | $ 18,900 | $ 12,621 | $ 130,963 | |
Number of shares repurchased | 358,381 | 252,409 | 2,455,058 | |
Amount remaining under authorized stock repurchase program | $ 147,800 |