10-Q 1 txrh-20150929x10q.htm 10-Q txrh_Current_Folio_10Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 29, 2015

 

OR

 

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from           to

 

Commission File Number 000-50972

 

Texas Roadhouse, Inc.

(Exact name of registrant specified in its charter)

 

Delaware

 

20-1083890

(State or other jurisdiction of

 

(IRS Employer

incorporation or organization)

 

Identification Number)

 

6040 Dutchmans Lane, Suite 200

Louisville, Kentucky 40205

(Address of principal executive offices) (Zip Code)

 

(502) 426-9984

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes     No  .

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes     No  .

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

 

Large accelerated filer  

Accelerated filer  

Non-accelerated filer  

Smaller reporting company  

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes    No  .

 

The number of shares of common stock outstanding were 70,144,492 on October 28, 2015.

 

 

 


 

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION 

 

 

 

 

 

Item 1 — Financial Statements (Unaudited) — Texas Roadhouse, Inc. and Subsidiaries 

 

Condensed Consolidated Balance Sheets — September 29, 2015 and December 30, 2014 

 

Condensed Consolidated Statements of Income and Comprehensive Income — For the 13 and 39 Weeks Ended September 29, 2015 and September 30, 2014 

 

Condensed Consolidated Statement of Stockholders’ Equity — For the 39 Weeks Ended September 29, 2015 

 

Condensed Consolidated Statements of Cash Flows — For the 39 Weeks Ended September 29, 2015 and September 30, 2014 

 

Notes to Condensed Consolidated Financial Statements 

 

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations 

 

17 

Item 3 — Quantitative and Qualitative Disclosures About Market Risk 

 

30 

Item 4 — Controls and Procedures 

 

31 

 

 

 

PART II. OTHER INFORMATION 

 

 

 

 

 

Item 1 — Legal Proceedings 

 

32 

Item 1A — Risk Factors 

 

32 

Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds 

 

32 

Item 3 — Defaults Upon Senior Securities 

 

33 

Item 4 — Mine Safety Disclosures 

 

33 

Item 5 — Other Information 

 

33 

Item 6 — Exhibits 

 

33 

 

 

 

Signatures 

 

34 

 

 

2


 

PART I — FINANCIAL INFORMATION

 

ITEM 1 — FINANCIAL STATEMENTS

 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

    

September 29, 2015

    

December 30, 2014

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

72,616

 

$

86,122

 

Receivables, net of allowance for doubtful accounts of $51 at September 29, 2015 and $10 at December 30, 2014

 

 

22,957

 

 

34,023

 

Inventories, net

 

 

13,763

 

 

14,256

 

Prepaid expenses

 

 

8,473

 

 

10,552

 

Deferred tax assets, net

 

 

3,779

 

 

2,773

 

Total current assets

 

 

121,588

 

 

147,726

 

Property and equipment, net of accumulated depreciation of $384,712 at September 29, 2015 and $347,222 at December 30, 2014

 

 

723,294

 

 

649,637

 

Goodwill

 

 

116,571

 

 

116,571

 

Intangible assets, net

 

 

5,171

 

 

6,203

 

Deferred tax assets, net

 

 

575

 

 

 

Other assets

 

 

25,272

 

 

23,005

 

Total assets

 

$

992,471

 

$

943,142

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

20,140

 

$

129

 

Accounts payable

 

 

41,956

 

 

43,585

 

Deferred revenue—gift cards

 

 

42,309

 

 

79,462

 

Accrued wages

 

 

34,027

 

 

30,375

 

Income taxes payable

 

 

7,813

 

 

1,583

 

Accrued taxes and licenses

 

 

19,423

 

 

17,592

 

Dividends payable

 

 

11,929

 

 

10,443

 

Other accrued liabilities

 

 

37,665

 

 

32,802

 

Total current liabilities

 

 

215,262

 

 

215,971

 

Long-term debt, excluding current maturities

 

 

50,587

 

 

50,693

 

Stock option and other deposits

 

 

6,774

 

 

6,005

 

Deferred rent

 

 

30,369

 

 

26,964

 

Deferred tax liabilities, net

 

 

 

 

6,004

 

Other liabilities

 

 

23,969

 

 

22,549

 

Total liabilities

 

 

326,961

 

 

328,186

 

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, 70,180,015 and 69,628,781 shares issued and outstanding at September 29, 2015 and December 30, 2014, respectively)

 

 

70

 

 

70

 

Additional paid-in-capital

 

 

200,858

 

 

189,168

 

Retained earnings

 

 

457,615

 

 

419,436

 

Accumulated other comprehensive loss

 

 

(234)

 

 

(782)

 

Total Texas Roadhouse, Inc. and subsidiaries stockholders’ equity

 

 

658,309

 

 

607,892

 

Noncontrolling interests

 

 

7,201

 

 

7,064

 

Total equity

 

 

665,510

 

 

614,956

 

Total liabilities and equity

 

$

992,471

 

$

943,142

 

 

 

See accompanying notes to condensed consolidated financial statements.

3


 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13 Weeks Ended

 

39 Weeks Ended

 

 

    

September 29, 2015

    

September 30, 2014

    

September 29, 2015

    

September 30, 2014

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

433,932

 

$

381,991

 

$

1,340,917

 

$

1,167,766

 

Franchise royalties and fees

 

 

4,157

 

 

3,227

 

 

12,100

 

 

9,957

 

Total revenue

 

 

438,089

 

 

385,218

 

 

1,353,017

 

 

1,177,723

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant operating costs (excluding depreciation and amortization shown separately below):

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

156,643

 

 

137,658

 

 

484,700

 

 

409,552

 

Labor

 

 

129,198

 

 

112,521

 

 

392,686

 

 

342,375

 

Rent

 

 

9,325

 

 

8,380

 

 

27,442

 

 

24,550

 

Other operating

 

 

66,848

 

 

59,276

 

 

204,523

 

 

180,491

 

Pre-opening

 

 

5,749

 

 

3,945

 

 

14,476

 

 

12,677

 

Depreciation and amortization

 

 

17,843

 

 

15,164

 

 

50,994

 

 

43,682

 

Impairment and closure

 

 

 

 

(16)

 

 

 

 

10

 

General and administrative

 

 

21,927

 

 

19,469

 

 

67,344

 

 

60,980

 

Total costs and expenses

 

 

407,533

 

 

356,397

 

 

1,242,165

 

 

1,074,317

 

Income from operations

 

 

30,556

 

 

28,821

 

 

110,852

 

 

103,406

 

Interest expense, net

 

 

470

 

 

492

 

 

1,480

 

 

1,564

 

Equity income from investments in unconsolidated affiliates

 

 

(449)

 

 

(410)

 

 

(1,288)

 

 

(975)

 

Income before taxes

 

$

30,535

 

$

28,739

 

$

110,660

 

$

102,817

 

Provision for income taxes

 

 

9,141

 

 

9,017

 

 

33,419

 

 

31,462

 

Net income including noncontrolling interests

 

$

21,394

 

$

19,722

 

$

77,241

 

$

71,355

 

Less: Net income attributable to noncontrolling interests

 

 

912

 

 

841

 

 

3,329

 

 

2,928

 

Net income attributable to Texas Roadhouse, Inc. and subsidiaries

 

$

20,482

 

$

18,881

 

$

73,912

 

$

68,427

 

Other comprehensive income (expense), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on derivatives, net of tax of $140,  $144 , $402 and $381, respectively

 

 

223

 

 

228

 

 

639

 

 

604

 

Foreign currency translation adjustment, net of tax of ($68), ($-), ($57) and ($-), respectively

 

 

(109)

 

 

 

 

(91)

 

 

 

Total other comprehensive income, net of tax

 

 

114

 

 

228

 

 

548

 

 

604

 

Total comprehensive income

 

$

20,596

 

$

19,109

 

$

74,460

 

$

69,031

 

Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.29

 

$

0.27

 

$

1.06

 

$

0.98

 

Diluted

 

$

0.29

 

$

0.27

 

$

1.05

 

$

0.97

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

70,117

 

 

69,544

 

 

69,995

 

 

69,793

 

Diluted

 

 

70,735

 

 

70,395

 

 

70,639

 

 

70,639

 

Cash dividends declared per share

 

$

0.17

 

$

0.15

 

$

0.51

 

$

0.45

 

 

 

See accompanying notes to condensed consolidated financial statements.

4


 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statement of Stockholders' Equity

(in thousands, except share and per share data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

 

 

    

 

 

    

Accumulated

    

Total Texas

    

 

 

    

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

Roadhouse, Inc.

 

 

 

 

 

 

 

 

 

 

 

Par

 

Paid-in-

 

Retained

 

Comprehensive

 

and

 

Noncontrolling

 

 

 

 

 

 

Shares

 

Value

 

Capital

 

Earnings

 

Loss

 

Subsidiaries

 

Interests

 

Total

 

Balance, December 30, 2014

 

69,628,781

 

$

70

 

$

189,168

 

$

419,436

 

$

(782)

 

$

607,892

 

$

7,064

 

$

614,956

 

Net income

 

 

 

 

 

 

 

73,912

 

 

 

 

73,912

 

 

3,329

 

 

77,241

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

548

 

 

548

 

 

 

 

548

 

Distributions to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,192)

 

 

(3,192)

 

Noncontrolling interests liquidation adjustments

 

 

 

 

 

22

 

 

 

 

 

 

22

 

 

 

 

22

 

Dividends declared and paid ($0.34 per share)

 

 

 

 

 

 

 

(23,804)

 

 

 

 

(23,804)

 

 

 

 

(23,804)

 

Dividends declared ($0.17 per share)

 

 

 

 

 

 

 

(11,929)

 

 

 

 

(11,929)

 

 

 

 

(11,929)

 

Shares issued under share-based compensation plans including tax effects

 

894,884

 

 

1

 

 

8,183

 

 

 

 

 

 

8,184

 

 

 

 

8,184

 

Repurchase of shares of common stock

 

(132,089)

 

 

 

 

(4,741)

 

 

 

 

 

 

(4,741)

 

 

 

 

(4,741)

 

Indirect repurchase of shares for minimum tax withholdings

 

(211,561)

 

 

(1)

 

 

(7,423)

 

 

 

 

 

 

(7,424)

 

 

 

 

(7,424)

 

Share-based compensation

 

 

 

 

 

15,649

 

 

 

 

 

 

15,649

 

 

 

 

15,649

 

Balance, September 29, 2015

 

70,180,015

 

$

70

 

$

200,858

 

$

457,615

 

$

(234)

 

$

658,309

 

$

7,201

 

$

665,510

 

 

 

See accompanying notes to condensed consolidated financial statements.

5


 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

39 Weeks Ended

 

 

    

September 29, 2015

    

September 30, 2014

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

$

77,241

 

$

71,355

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

50,994

 

 

43,682

 

Deferred income taxes

 

 

(8,189)

 

 

(4,311)

 

Loss on disposition of assets

 

 

4,038

 

 

3,461

 

Equity income from investments in unconsolidated affiliates

 

 

(1,288)

 

 

(975)

 

Distributions of income received from investments in unconsolidated affiliates

 

 

414

 

 

424

 

Provision for doubtful accounts

 

 

(41)

 

 

9

 

Share-based compensation expense

 

 

15,649

 

 

10,937

 

Changes in operating working capital:

 

 

 

 

 

 

 

Receivables

 

 

11,106

 

 

9,924

 

Inventories

 

 

493

 

 

(39)

 

Prepaid expenses

 

 

2,079

 

 

2,150

 

Other assets

 

 

(1,519)

 

 

(891)

 

Accounts payable

 

 

(2,115)

 

 

(3,499)

 

Deferred revenue—gift cards

 

 

(37,153)

 

 

(30,013)

 

Accrued wages

 

 

3,652

 

 

1,554

 

Excess tax benefits from share-based compensation

 

 

(4,253)

 

 

(2,236)

 

Prepaid income taxes and income taxes payable

 

 

10,482

 

 

7,114

 

Accrued taxes and licenses

 

 

1,831

 

 

450

 

Other accrued liabilities

 

 

1,886

 

 

4,770

 

Deferred rent

 

 

3,405

 

 

2,361

 

Other liabilities

 

 

2,796

 

 

1,078

 

Net cash provided by operating activities

 

 

131,508

 

 

117,305

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Capital expenditures—property and equipment

 

 

(125,100)

 

 

(89,645)

 

Proceeds from sale of property and equipment, including insurance proceeds

 

 

272

 

 

1,197

 

Net cash used in investing activities

 

 

(124,828)

 

 

(88,448)

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from revolving credit facility

 

 

20,000

 

 

 

Repurchase of shares of common stock

 

 

(4,741)

 

 

(39,966)

 

Proceeds from noncontrolling interest contributions and other

 

 

 

 

487

 

Distributions to noncontrolling interest holders

 

 

(3,192)

 

 

(3,064)

 

Excess tax benefits from share-based compensation

 

 

4,253

 

 

2,236

 

Proceeds from (repayments of) stock option and other deposits, net

 

 

1,069

 

 

(382)

 

Indirect repurchase of shares for minimum tax withholdings

 

 

(7,424)

 

 

(5,638)

 

Principal payments on long-term debt and capital lease obligations

 

 

(95)

 

 

(380)

 

Proceeds from exercise of stock options

 

 

4,191

 

 

3,206

 

Dividends paid to shareholders

 

 

(34,247)

 

 

(20,923)

 

Net cash used in financing activities

 

 

(20,186)

 

 

(64,424)

 

Net decrease in cash and cash equivalents

 

 

(13,506)

 

 

(35,567)

 

Cash and cash equivalents—beginning of year

 

 

86,122

 

 

94,874

 

Cash and cash equivalents—end of year

 

$

72,616

 

$

59,307

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

Interest paid, net of amounts capitalized

 

$

1,744

 

$

1,774

 

Income taxes paid

 

$

31,122

 

$

28,659

 

Capital expenditures included in current liabilities

 

$

3,944

 

$

4,090

 

Receivable from minority interest in joint venture

 

$

 

$

243

 

 

 

See accompanying notes to condensed consolidated financial statements.

6


 

Texas Roadhouse, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(tabular amounts in thousands, except share and per share data)

(unaudited)

(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 own more than a 50 percent interest (collectively the "Company," "we," "our" and/or "us") as of September 29, 2015 and December 30, 2014 and for the 13 and 39 weeks ended September 29, 2015 and September 30, 2014. All significant balances and transactions between the consolidated entities have been eliminated. 

 

As of September 29, 2015, we owned and operated 394 restaurants and franchised an additional 81 restaurants in 49 states and four foreign countries.  Of the 394 company-owned restaurants that were operating at September 29, 2015, 378 were wholly-owned and 16 were majority-owned.

 

As of September 30, 2014, we owned and operated 361 restaurants and franchised an additional 75 restaurants in 49 states and three foreign countries.  Of the 361 company-owned restaurants that were operating at September 30, 2014, 345 were wholly-owned and 16 were majority-owned.

 

As of September 29, 2015 and September 30, 2014, we owned 5.0% to 10.0% equity interests in 24 and 23 franchise restaurants, respectively.  While we exercise significant control over these Texas Roadhouse franchise restaurants, we do not consolidate their financial position, results of operations or cash flows as it is immaterial to our consolidated financial position, results of operations and cash flows.  Additionally, as of September 29, 2015 and September 30, 2014, we owned a 40% equity interest in four 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 have been eliminated. 

 

We have made a number of estimates and assumptions relating to the reporting of assets and liabilities, 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, 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 ("SEC").  Operating results for the 13 and 39 weeks ended September 29, 2015 are not necessarily indicative of the results that may be expected for the year ending December 29, 2015.  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 30, 2014.

 

Certain prior year amounts have been reclassified in our unaudited condensed consolidated financial statements to conform to current year presentation.

 

Our significant interim accounting policies include the recognition of income taxes using an estimated annual effective tax rate.

7


 

 

(2)   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 incentive and non-qualified stock options to purchase shares of common stock, stock appreciation rights, and full value awards, including restricted stock, restricted stock units ("RSUs"), deferred stock units, performance stock and performance stock units ("PSUs").  As a result of the approval of the Plan, no future awards will be made under the Texas Roadhouse, Inc. 2004 Equity Incentive Plan.

 

Beginning in 2008, we changed the method by which we provide share-based compensation to our employees by granting primarily RSUs as a form of share-based compensation rather than stock option grants.  An RSU is the conditional right to receive one share of common stock upon satisfaction of the vesting requirement.

 

The following table summarizes the share-based compensation expense recorded in the accompanying unaudited condensed consolidated statements of income and comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13 Weeks Ended

 

39 Weeks Ended

 

 

    

September 29, 2015

    

September 30, 2014

    

September 29, 2015

    

September 30, 2014

 

Labor expense

 

$

1,387

 

$

1,282

 

$

3,937

 

$

4,052

 

General and administrative expense

 

 

4,047

 

 

2,256

 

 

11,712

 

 

6,885

 

Total share-based compensation expense

 

$

5,434

 

$

3,538

 

$

15,649

 

$

10,937

 

 

Share-based compensation activity by type of grant as of September 29, 2015 and changes during the 39 weeks then ended are presented below.

 

Summary Details for RSUs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

Weighted-Average

    

Weighted-Average

    

 

 

 

 

 

 

 

Grant Date Fair

 

Remaining Contractual

 

Aggregate

 

 

 

Shares

 

Value

 

Term (years)

 

Intrinsic Value

 

Outstanding at December 30, 2014

 

978,124

 

$

22.52

 

 

 

 

 

 

Granted

 

648,152

 

 

35.86

 

 

 

 

 

 

Forfeited

 

(30,292)

 

 

27.30

 

 

 

 

 

 

Vested

 

(622,290)

 

 

20.69

 

 

 

 

 

 

Outstanding at September 29, 2015

 

973,694

 

$

32.42

 

1.3

 

$

36,105

 

 

As of September 29, 2015, with respect to unvested RSUs, there was $19.1 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 1.3 years.  The vesting terms of the RSUs range from approximately 1.0 to 5.0 years.  The total intrinsic value of RSUs vested during the 13 weeks ended September 29, 2015 and September 30, 2014 was $4.4 million and $3.1 million, respectively.  For the 39 weeks ended September 29, 2015 and September 30, 2014, the total intrinsic value of RSUs vested was $21.9 million and $17.3 million, respectively. 

 

Summary Details for PSUs

 

In 2015, we granted PSUs to two 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 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 meeting the performance criteria will vest as of the end of our fiscal year.  The distribution of vested performance stock units as common stock will occur in the first quarter of 2016.

 

We granted 115,000 PSUs with a grant date fair value per share of $34.77.  As of September 29, 2015, with respect to unvested PSUs, there was $1.1 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 0.3 years.

 

8


 

Summary Details for Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

Weighted-

    

Weighted-Average

    

 

 

 

 

 

 

 

Average Exercise

 

Remaining Contractual

 

Aggregate

 

 

 

Shares

 

Price

 

Term (years)

 

Intrinsic Value

 

Outstanding at December 30, 2014

 

636,930

 

$

14.20

 

 

 

 

 

 

Granted

 

 

 

 

 

 

 

 

 

Forfeited

 

(2,286)

 

 

17.94

 

 

 

 

 

 

Exercised

 

(272,594)

 

 

15.38

 

 

 

 

 

 

Outstanding at September 29, 2015

 

362,050

 

$

13.28

 

1.4

 

$

8,616

 

Exercisable at September 29, 2015

 

362,050

 

$

13.28

 

1.4

 

$

8,616

 

 

The total intrinsic value of options exercised during the 13 weeks ended September 29, 2015 and September 30, 2014 was $2.3 million and $1.3 million, respectively. For the 39 weeks ended September 29, 2015 and September 30, 2014, the total intrinsic value of options exercised was $5.9 million and $3.6 million, respectively.  No stock options vested during the 13 or 39 weeks ended September 29, 2015 or September 30, 2014. 

 

(3)   Long-term Debt

 

Long-term debt consisted of the following:

 

 

 

 

 

 

 

 

 

 

    

September 29,

    

December 30,

 

 

 

2015

 

2014

 

Installment loans, due 2015 - 2020

 

$

727

 

$

822

 

Revolver

 

 

70,000

 

 

50,000

 

 

 

 

70,727

 

 

50,822

 

Less current maturities

 

 

20,140

 

 

129

 

 

 

$

50,587

 

$

50,693

 

 

The interest rate for our installment loan outstanding at both September 29, 2015 and December 30, 2014 was 10.46%.  The debt is secured by certain land and building assets and is subject to certain prepayment penalties.

 

On November 1, 2013, we entered into Omnibus Amendment No. 1 and Consent to Credit Agreement and Guaranty with respect to our revolving credit facility dated as of August 12, 2011 with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A., PNC Bank, N.A., and Wells Fargo, N.A. The amended revolving credit facility, which has a maturity date of November 1, 2018, remains an unsecured, revolving credit agreement under which we may borrow up to $200.0 million. The amendment provides us with the option to increase the revolving credit facility by $200.0 million, up to $400.0 million, subject to certain limitations.

 

The terms of the amended revolving credit facility require us to pay interest on outstanding borrowings at the London Interbank Offered Rate ("LIBOR") plus a margin of 0.875% to 1.875%, depending on our leverage ratio, or the Alternate Base Rate, which is the higher of the issuing bank’s prime lending rate, the Federal Funds rate plus 0.50% or the Adjusted Eurodollar Rate for a one month interest period on such day plus 1.0%. We are also required to pay a commitment fee of 0.125% to 0.30% per year on any unused portion of the amended revolving credit facility, depending on our leverage ratio. The weighted-average interest rate for the revolving credit facility at September 29, 2015 and December 30, 2014 was 3.13% and 3.96%, respectively, including the impact of interest rate swaps. At September 29, 2015, we had $70.0 million outstanding under the revolving credit facility and $124.2 million of availability, net of $5.8 million of outstanding letters of credit.

 

The lenders’ obligation to extend credit under the amended revolving credit facility depends on us maintaining certain financial covenants, including a minimum consolidated fixed charge coverage ratio of 2.00 to 1.00 and a maximum consolidated leverage ratio of 3.00 to 1.00.  The amended revolving credit facility permits us to incur additional secured or unsecured indebtedness outside the facility, except for the incurrence of secured indebtedness that in the aggregate exceeds 15% of our consolidated tangible net worth or circumstances where the incurrence of secured or

9


 

unsecured indebtedness would prevent us from complying with our financial covenants.  We were in compliance with all covenants as of September 29, 2015.

 

(4)     Income Taxes

 

A reconciliation of the statutory federal income tax rate to our effective tax rate for the 13 and 39 weeks ended September 29, 2015 and September 30, 2014 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13 Weeks Ended

   

 

39 Weeks Ended

 

 

 

   

September 29, 2015

   

September 30, 2014

   

 

September 29, 2015

   

September 30, 2014

 

 

Tax at statutory federal rate

 

35.0

%  

35.0

%  

 

35.0

%  

35.0

%

 

State and local tax, net of federal benefit

 

3.5

 

3.5

 

 

3.5

 

3.5

 

 

FICA tip tax credit

 

(7.9)

 

(6.2)

 

 

(7.3)

 

(6.8)

 

 

Work opportunity tax credit

 

 

(0.3)

 

 

(0.5)

 

(0.7)

 

 

Incentive stock options

 

(0.3)

 

(0.2)

 

 

(0.2)

 

(0.1)

 

 

Nondeductible officer compensation

 

0.1

 

0.3

 

 

0.1

 

0.3

 

 

Net income attributable to noncontrolling interests

 

(0.9)

 

(0.9)

 

 

(1.0)

 

(0.9)

 

 

Other

 

0.4

 

0.2

 

 

0.6

 

0.3

 

 

Total

 

29.9

%  

31.4

%  

 

30.2

%  

30.6

%

 

 

 

(5)Derivative and Hedging Activities

 

We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 815, Derivatives and Hedging ("ASC 815")We use interest rate-related derivative instruments to manage our exposure to fluctuations of interest rates.  By using these instruments, we expose ourselves, from time to time, to credit risk and market risk.  Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us.  We attempt to minimize the credit risk by entering into transactions with high-quality counterparties whose credit rating is evaluated on a quarterly basis.  Our counterparty in the interest rate swaps is JPMorgan Chase Bank, N.A.  Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates.  We attempt to minimize market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be taken.

 

Interest Rate Swaps

 

On October 22, 2008, we entered into an interest rate swap, starting on November 7, 2008, with a notional amount of $25.0 million to hedge a portion of the cash flows of our variable rate borrowings.  We have designated the interest rate swap as a cash flow hedge of our exposure to variability in future cash flows attributable to interest payments on a $25.0 million tranche of floating rate debt borrowed under our amended revolving credit facility.  Under the terms of the swap, we pay a fixed rate of 3.83% on the $25.0 million notional amount and receive payments from the counterparty based on the one month LIBOR for a term ending on November 7, 2015, effectively resulting in a fixed rate on the LIBOR component of the $25.0 million notional amount.

 

On January 7, 2009, we entered into an interest rate swap, starting on February 7, 2009, with a notional amount of $25.0 million to hedge a portion of the cash flows of our variable rate borrowings.  We have designated the interest rate swap as a cash flow hedge of our exposure to variability in future cash flows attributable to interest payments on a $25.0 million tranche of floating rate debt borrowed under our amended revolving credit facility.  Under the terms of the swap, we pay a fixed rate of 2.34% on the $25.0 million notional amount and receive payments from the counterparty based on the one month LIBOR for a term ending on January 7, 2016, effectively resulting in a fixed rate on the LIBOR component of the $25.0 million notional amount.

 

10


 

We entered into the above interest rate swaps with the objective of eliminating the variability of our interest cost that arises because of changes in the variable interest rate for the designated interest payments.  Changes in the fair value of the interest rate swaps will be reported as a component of accumulated other comprehensive income or loss ("AOCI").  Additionally, amounts related to the yield adjustment of the hedged interest payments are subsequently reclassified into interest expense in the same period during which the related interest affects earnings.  We will reclassify any gain or loss from AOCI, net of tax, in our unaudited condensed consolidated balance sheet to interest expense in our unaudited condensed consolidated statement of income and comprehensive income when an interest rate swap expires or at the time we choose to terminate a swap.  See note 10 for fair value discussion of these interest rate swaps.

 

The following table summarizes the fair value and presentation in the unaudited condensed consolidated balance sheets for derivatives designated as hedging instruments under FASB ASC 815:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Assets

 

Derivative Liabilities

 

 

    

Balance Sheet

    

September 29,

    

December 30,

    

September 29,

    

December 30,

 

 

 

Location

 

2015

 

2014

 

2015

 

2014

 

Derivative Contracts Designated as Hedging Instruments under ASC 815

 

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps

 

 

 

$

 

$

 

$

334

 

$

1,375

 

Total Derivative Contracts

 

 

 

$

 

$

 

$

334

 

$

1,375

 


(1) As of September 29, 2015, derivative liabilities are included in other accrued liabilities on the balance sheet.  As of December 30, 2014, the current portion of derivative liabilities is included in other accrued liabilities and the long-term portion is included in other liabilities.

 

The following table summarizes the effect of our interest rate swaps in the unaudited condensed consolidated statements of income and comprehensive income for the 13 and 39 weeks ended September 29, 2015 and September 30, 2014:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13 Weeks Ended

 

39 Weeks Ended

 

 

   

September 29, 2015

   

September 30, 2014

   

September 29, 2015

   

September 30, 2014

 

Gain recognized in AOCI, net of tax (effective portion)

 

$

223

 

$

228

 

$

639

 

$

604

 

Loss reclassified from AOCI to income (effective portion)

 

$

370

 

$

370

 

$

1,107

 

$

1,110

 

 

The loss reclassified from AOCI to income was recognized in interest expense on our unaudited condensed consolidated statements of income and comprehensive income. For each of the 13 and 39 weeks ended September 29, 2015 and September 30, 2014, we did not recognize any gain or loss due to hedge ineffectiveness related to the derivative instruments in the unaudited condensed consolidated statements of income and comprehensive income.

 

(6)Recent Accounting Pronouncements

 

Revenue Recognition

(Accounting Standards Update 2014-09, "ASU 2014-09")

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.  The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective.  In July 2015, the FASB approved a one-year deferral of the effective date of the new revenue standard.  ASU 2014-09 is now effective for fiscal years beginning on or after December 15, 2017 (our 2018 fiscal year) with early adoption permitted in the first quarter of 2017.  The standard permits the use of either the retrospective or cumulative effect transition method.  We are evaluating the effect that ASU 2014-09 will have on our consolidated financial position, results of operations, cash flows and related disclosures.  We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

 

11


 

Going Concern

(Accounting Standards Update 2014-15, “ASU 2014-15”)

 

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires the management of the Company to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern.  ASU 2014-15 is effective for annual periods ending after December 15, 2016 (our 2016 fiscal year) and early adoption is permitted.  We do not expect this standard to have an impact on our consolidated financial position, results of operations or cash flows upon adoption.

 

Consolidation

(Accounting Standards Update 2015-02, "ASU 2015-02")

 

In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis, which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities.  ASU 2015-02 is effective for annual and interim periods beginning after December 15, 2015 (our 2016 fiscal year).  Early adoption is permitted, including adoption in an interim period.  A reporting entity may apply the amendments using a modified retrospective approach or a full retrospective application.   We have not selected a transition method or determined the effect, if any, of the standard on our consolidated financial position, results of operations or cash flows.

 

Software Licenses

(Accounting Standards Update 2015-05, "ASU 2015-05")

 

In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which provides guidance about whether a cloud computing arrangement includes a software license.  ASU 2015-05 is effective for annual and interim periods beginning after December 15, 2015 (our 2016 fiscal year).  Early adoption is permitted.  We have not yet determined the effect, if any, of the standard on our consolidated financial position, results of operations or cash flows.

 

Inventory

(Accounting Standards Update 2015-11, "ASU 2015-11")

 

In July 2015, the FASB issued ASU 2015-11, Inventory, which simplifies the measurement principle of inventories valued under the First-In, First-Out ("FIFO") or weighted average methods from the lower of cost or market to the lower of cost and net realizable value.  ASU 2015-11 is effective for reporting periods beginning after December 15, 2016 (our 2017 fiscal year).  We do not expect the standard to have a material impact on our consolidated financial position, results of operations or cash flows upon adoption.

 

(7)Commitments and Contingencies

 

The estimated cost of completing capital project commitments at September 29, 2015 and December 30, 2014 was approximately $146.9 million and $153.2 million, respectively.

 

Effective December 31, 2013, we sold two restaurants, which operated under the name Aspen Creek, located in Irving, Texas and Louisville, Kentucky. We assigned the leases associated with these restaurants to the acquirer, but remain contingently liable under the terms of the leases if the acquirer defaults. We are contingently liable for the initial terms of the leases and any renewal periods. The Irving lease has an initial term that expires December 2019, along with three five-year renewals. The Louisville lease has an initial term that expires November 2023, along with three five-year renewals. The assignment of the Louisville lease releases us from liability after the initial lease term expiration contingent upon certain conditions being met by the acquirer.

 

12


 

We entered into real estate lease agreements for five franchises, listed in the table below, before granting franchise rights for those restaurants. We have subsequently assigned the leases to the franchisees, but remain contingently liable if a franchisee defaults, under the terms of the lease.

 

 

 

 

 

 

 

 

    

Lease
Assignment Date

    

Initial Lease
Term Expiration

 

Everett, Massachusetts(1)

 

September 2002

 

February 2018

 

Longmont, Colorado(1)

 

October 2003

 

May 2019

 

Montgomeryville, Pennsylvania

 

October 2004

 

June 2021

 

Fargo, North Dakota(1)

 

February 2006

 

July 2016

 

Logan, Utah

 

January 2009

 

August 2019

 

 

(1)  As discussed in note 8, these restaurants are owned, in whole or part, by certain officers, directors and 5% shareholders of the Company.

 

We are contingently liable for the initial terms of the leases and any renewal periods. All of the leases have three five-year renewals.

 

As of September 29, 2015 and December 30, 2014, we are contingently liable for $17.4 million and $18.0 million, respectively, for the seven leases discussed above.  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, 2015 and December 30, 2014 as the likelihood of default was deemed to be less than probable and the fair value of the guarantees is not considered significant.

 

During the 13 and 39 weeks ended September 29, 2015, we bought most of our beef from four suppliers. Although there are a limited number of beef suppliers, we believe that other suppliers could provide a similar product on comparable terms. A change in suppliers, however, could cause supply shortages, higher costs to secure adequate supplies and a possible loss of sales, which would affect operating results adversely. We have no material minimum purchase commitments with our vendors that extend beyond a year.

 

On September 30, 2011, the U.S. Equal Employment Opportunity Commission (“EEOC”) filed a lawsuit styled Equal Employment Opportunity Commission v. Texas Roadhouse, Inc., Texas Roadhouse Holdings LLC and Texas Roadhouse Management Corp. in the United States District Court, District of Massachusetts, Civil Action Number 1:11-cv-11732. The complaint alleges that applicants over the age of 40 were denied employment in our restaurants in bartender, host, server and server assistant positions due to their age.  The EEOC is seeking injunctive relief, remedial actions, payment of damages to the applicants and costs.  We have filed an answer to the complaint, and the case is in discovery.  We deny liability; however, in view of the inherent uncertainties of litigation, the outcome of this case cannot be predicted at this time.  We cannot estimate the amount or range of loss, if any, associated with this matter.

 

Occasionally, we are a defendant in litigation arising in the ordinary course of our business, including "slip and fall" accidents, employment related claims and claims from guests or employees alleging illness, injury or food quality, health or operational concerns.  In the opinion of management, the ultimate disposition of these matters, most of which are covered by insurance, will not have a material effect on our consolidated financial position, results of operations or cash flows.    

 

(8)   Related Party Transactions

 

We have 10 franchise restaurants owned in whole or part, by certain of our officers, directors and 5% stockholders of the Company as of September 29, 2015. These entities paid us fees of approximately $0.4 million and $1.4 million for the 13 and 39 weeks ended September 29, 2015, respectively.  As of September 30, 2014 we had 15 franchise restaurants owned in whole or part, by certain of our officers, directors and 5% stockholders of the Company.  These entities paid us fees of approximately $0.6 million and $1.9 million for the 13 and 39 weeks ended September 30, 2014, respectively. As disclosed in note 7, we are contingently liable on leases which are related to three of these restaurants.

 

13


 

On November 26, 2014, we acquired the remaining ownership interests of a franchise restaurant owned in part by us and certain officers or stockholders of the Company.  Prior to this acquisition, we owned 5% interest in the franchise restaurant which we accounted for using the equity method.  While we did exercise significant control over the restaurant prior to our acquisition of the remaining ownership interests, we did not consolidate their financial position, results of operations and/or cash flows as it was immaterial to our financial position, results of operations and/or cash flows.

 

(9)   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 stock options and RSUs outstanding from our equity incentive plans as discussed in note 2.

 

The following table summarizes the options and nonvested stock that were outstanding but not included in the computation of diluted earnings per share because their inclusion would have had an anti-dilutive effect:

 

 

 

 

 

 

 

 

 

 

 

 

 

13 Weeks Ended

 

39 Weeks Ended

 

 

    

September 29, 2015

    

September 30, 2014

    

September 29, 2015

    

September 30, 2014

 

Nonvested stock

 

61

 

 

5,330

 

 

Options

 

 

 

 

 

Total

 

61

 

 

5,330

 

 

 

PSUs have been excluded from the diluted earnings per share calculation because the performance-based criteria have not yet been met.

 

The following table sets forth the calculation of 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, 2015

    

September 30, 2014

    

September 29, 2015

    

September 30, 2014

 

Net income attributable to Texas Roadhouse, Inc. and subsidiaries

 

$

20,482

 

$

18,881

 

$

73,912

 

$

68,427

 

Basic EPS:

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

70,117

 

 

69,544

 

 

69,995

 

 

69,793

 

Basic EPS

 

$

0.29

 

$

0.27

 

$

1.06

 

$

0.98

 

Diluted EPS:

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

70,117

 

 

69,544

 

 

69,995

 

 

69,793

 

Dilutive effect of stock options and nonvested stock

 

 

618

 

 

851

 

 

644

 

 

846

 

Shares-diluted

 

 

70,735

 

 

70,395

 

 

70,639

 

 

70,639

 

Diluted EPS

 

$

0.29

 

$

0.27

 

$

1.05

 

$

0.97

 

 

 

14


 

 

(10)  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 1Inputs based on quoted prices in active markets for identical assets.

Level 2Inputs other than quoted prices included within Level 1 that are observable for the assets, either directly or indirectly.

Level 3Inputs 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, 2015.

 

The following table presents the fair values for our financial assets and liabilities measured on a recurring basis:

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

    

Level

    

September 29, 2015

    

December 30, 2014

 

Interest rate swaps

 

2

 

$

(334)

 

$

(1,375)

 

Deferred compensation plan—assets

 

1

 

 

16,655 

 

 

14,963 

 

Deferred compensation plan—liabilities

 

1

 

 

(16,688)

 

 

(14,974)

 

 

The fair values of our interest rate swaps were determined based on industry-standard valuation models.  Such models project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves.  See note 5 for discussion of our interest rate swaps.

 

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 accounts of the rabbi trust in our unaudited condensed consolidated financial statements. These investments are considered trading securities and are measured at fair value using 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.

 

 

At September 29, 2015 and December 30, 2014, 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. The fair value of our revolving credit facility at September 29, 2015 and December 30, 2014 approximated its carrying value since it is a variable rate credit facility (Level 2).  The fair value of our installment loan is estimated based on the current rates offered to us for instruments of similar terms and maturities. The carrying amounts and related estimated fair values for our installment loan are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 29, 2015

 

December 30, 2014

 

 

    

Carrying

    

Fair

    

Carrying

    

Fair

 

 

 

Amount

 

Value

 

Amount

 

Value

 

Installment loan—Level 2

 

$

727

 

$

870

 

$

822

 

$

955

 

 

 

15


 

(11)  Accumulated Other Comprehensive Loss

 

The components of the changes in accumulated other comprehensive loss for the 39 weeks ended September 29, 2015 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow Hedges

 

Foreign Currency Translation

 

Accumulated Other Comprehensive Loss

 

Balance as of December 30, 2014

    

$

(844)

    

$

62

    

$

(782)

  

Other comprehensive loss before reclassifications

 

 

(66)

 

 

(148)

 

 

(214)

 

Reclassification adjustments to income (1)

 

 

1,107

 

 

 

 

1,107

 

Income taxes

 

 

(402)

 

 

57

 

 

(345)

 

Balance as of September 29, 2015

 

$

(205)

 

$

(29)

 

$

(234)

 

 

(1) For further discussion of amounts reclassified to income, see note 5. 

 

(12)  Stock Repurchase Program

 

On May 22, 2014, our Board of Directors approved a stock repurchase program under which we may repurchase up to $100.0 million of our common stock.  This stock repurchase program has no expiration date and replaced a previous stock repurchase program which was approved on February 16, 2012. All repurchases to date under our stock repurchase program have been made through open market transactions.  The timing and the amount of any repurchases will be determined by management under parameters established by our Board of Directors, based on its evaluation of our stock price, market conditions and other corporate considerations.

 

For the 13 and 39 week periods ended September 29, 2015 we paid approximately $1.6 million and $4.7 million to repurchase 44,000 and 132,089 shares of our common stock, respectively. As of September 29, 2015, we had approximately $80.7 million remaining under our authorized stock repurchase program. For the 13 and 39 week periods ended September 30, 2014 we paid approximately $8.2 million and $40.0 million to repurchase 315,000 and 1,575,000 shares of our common stock, respectively. 

16


 

 

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

CAUTIONARY STATEMENT