Texas Roadhouse, Inc. Announces Second Quarter 2014 Results

Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 week periods ended July 1, 2014.

Results for the second quarter included:

• Diluted earnings per share increased 16.7% to $0.33 from $0.28 in the prior year;
• Lower costs associated with the Company's annual managing partner conference positively impacted year-over-year operating results for the quarter as costs were $2.4 million lower compared to the prior year period;
• Comparable restaurant sales increased 2.9% at company restaurants and 3.5% at franchise restaurants;
• Six company restaurants were opened;
• Restaurant margin, as a percentage of restaurant sales, decreased 45 basis points to 18.1%; and
• The Company repurchased 300,000 shares of its common stock for $7.6 million.

Results for the year-to-date included:

• Diluted earnings per share increased 7.6% to $0.70 from $0.65 in the prior year;
• As previously stated, costs associated with the Company’s annual managing partner conference were $2.4 million lower compared to the prior year period;
• Comparable restaurant sales increased 2.9% at company restaurants and 3.6% at franchise restaurants;
• 12 company restaurants and one franchise restaurant were opened;
• Restaurant margin, as a percentage of restaurant sales, decreased 10 basis points to 18.7%;
• Income tax rate increased 185 basis points to 30.3%, primarily due to the expiration of certain federal tax credits at the end of 2013; and
• The Company repurchased 1,260,000 shares of its common stock for $31.8 million.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We are pleased to report another quarter of double-digit revenue growth led by strong operating week growth and positive comparable restaurant sales, including solid traffic growth. Our restaurant development included six new restaurants during the quarter, including our first restaurant in Alaska and we now operate in 49 states and three foreign countries. Looking forward, we will continue to focus on opening restaurants in new and existing markets and driving traffic growth and market share gains through our ongoing commitment to legendary food and service. This philosophy, along with our ongoing dividend and share repurchase programs, will continue to drive shareholder value."

2014 Outlook

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its third quarter of fiscal 2014 increased approximately 4.0% compared to the prior year period.

Management reiterated the following expectations for 2014:

• Positive comparable restaurant sales growth;
• Low single digit food cost inflation;
• Total capital expenditures of $100.0 to $110.0 million; and
• An income tax rate of approximately 30.0% to 31.0% which is higher than the 2013 income tax rate primarily as a result of the expiration of certain federal tax credits at the end of 2013.

Management updated the following expectation for 2014:

• Approximately 25 company restaurant openings.

Conference Call

The Company is hosting a conference call today, August 4, 2014 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 627-6582 or (719) 325-4820 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (877) 870 -5176 or (858) 384-5517 for international calls, and use 9936831 as the pass code. There will be a simultaneous Web cast conducted at www.texasroadhouse.com.

About the Company

Texas Roadhouse is a casual dining concept that first opened in 1993 and today operates over 430 restaurants system-wide in 49 states and three foreign countries. For more information, please visit the Company’s Web site at www.texasroadhouse.com.

Forward-looking Statements

Certain statements in this release that are not historical facts, including, without limitation, those relating to our anticipated financial performance, are forward-looking statements that involve risks and uncertainties. Such statements are based upon the current beliefs and expectations of the management of the Company. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, the actual number of restaurants opening; the sales at these and our other company and franchise restaurants; changes in restaurant development or operating costs, such as food and labor; our ability to acquire franchise restaurants; our ability to integrate the franchise restaurants we acquire or other concepts we develop; our ability to continue to generate the necessary cash flows to fund our new restaurant growth, continue our share repurchase program and pay a quarterly cash dividend; strength of consumer spending; pending or future legal claims; conditions beyond our control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting our customers or food supplies; acts of war or terrorism and other factors disclosed from time to time in our filings with the U.S. Securities and Exchange Commission. Investors should take such risks into account when making investment decisions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update any forward-looking statements.