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 24, 2024

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

Louisville, Kentucky 40205

(Address of principal executive offices) (Zip Code)

(502) 426-9984

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	TXRH	NASDAQ Global Select Market

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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   ☒  No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  ☒	Accelerated Filer  ☐	Non-accelerated Filer  ☐	Smaller Reporting Company  ☐
			Emerging Growth Company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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 66,714,069 on October 23, 2024.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1 — Financial Statements (Unaudited) — Texas Roadhouse, Inc. and Subsidiaries	3
Condensed Consolidated Balance Sheets — September 24, 2024 and December 26, 2023	3
Condensed Consolidated Statements of Income — For the 13 and 39 Weeks Ended September 24, 2024 and September 26, 2023	4
Condensed Consolidated Statements of Stockholders’ Equity — For the 13 and 39 Weeks Ended September 24, 2024 and September 26, 2023	5
Condensed Consolidated Statements of Cash Flows — For the 39 Weeks Ended September 24, 2024 and September 26, 2023	7
Notes to Condensed Consolidated Financial Statements	8
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3 — Quantitative and Qualitative Disclosures About Market Risk	28
Item 4 — Controls and Procedures	28
PART II. OTHER INFORMATION
Item 1 — Legal Proceedings	29
Item 1A — Risk Factors	29
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3 — Defaults Upon Senior Securities	29
Item 4 — Mine Safety Disclosures	29
Item 5 — Other Information	30
Item 6 — Exhibits	30
Signatures	31

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 24, 2024		December 26, 2023
Assets
Current assets:
Cash and cash equivalents	$	189,205	$	104,246
Receivables, net of allowance for doubtful accounts of $13 at September 24, 2024 and $35 at December 26, 2023		52,341		175,474
Inventories, net		39,842		38,320
Prepaid income taxes		—		3,262
Prepaid expenses and other current assets		26,013		35,172
Total current assets		307,401		356,474
Property and equipment, net of accumulated depreciation of $1,182,014 at September 24, 2024 and $1,078,855 at December 26, 2023		1,574,465		1,474,722
Operating lease right-of-use assets, net		747,799		694,014
Goodwill		169,684		169,684
Intangible assets, net of accumulated amortization of $22,733 at September 24, 2024 and $20,929 at December 26, 2023		1,679		3,483
Other assets		112,787		94,999
Total assets	$	2,913,815	$	2,793,376
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of operating lease liabilities	$	28,476	$	27,411
Accounts payable		130,850		131,638
Deferred revenue-gift cards		226,626		373,913
Accrued wages		88,698		68,062
Income taxes payable		2,775		112
Accrued taxes and licenses		49,158		42,758
Other accrued liabilities		100,981		101,540
Total current liabilities		627,564		745,434
Operating lease liabilities, net of current portion		802,576		743,476
Restricted stock and other deposits		9,468		8,893
Deferred tax liabilities, net		12,395		23,104
Other liabilities		138,568		114,958
Total liabilities		1,590,571		1,635,865
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, 66,713,823 and 66,789,464 shares issued and outstanding at September 24, 2024 and December 26, 2023, respectively)		67		67
Retained earnings		1,308,223		1,141,595
Total Texas Roadhouse, Inc. and subsidiaries stockholders’ equity		1,308,290		1,141,662
Noncontrolling interests		14,954		15,849
Total equity		1,323,244		1,157,511
Total liabilities and equity	$	2,913,815	$	2,793,376

See accompanying notes to condensed consolidated financial statements.

3

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)

	13 Weeks Ended				39 Weeks Ended
	September 24, 2024		September 26, 2023		September 24, 2024		September 26, 2023
Revenue:
Restaurant and other sales	$	1,265,279	$	1,115,224	$	3,913,073	$	3,447,192
Franchise royalties and fees		7,720		6,528		22,345		20,119
Total revenue		1,272,999		1,121,752		3,935,418		3,467,311
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Food and beverage		424,566		386,184		1,305,658		1,198,099
Labor		427,470		378,814		1,293,229		1,155,970
Rent		20,162		18,177		59,543		54,001
Other operating		191,011		169,225		581,515		507,846
Pre-opening		7,282		8,663		21,579		19,711
Depreciation and amortization		44,510		39,124		128,918		112,764
Impairment and closure, net		844		(2)		1,135		131
General and administrative		55,131		47,708		165,874		148,573
Total costs and expenses		1,170,976		1,047,893		3,557,451		3,197,095
Income from operations		102,023		73,859		377,967		270,216
Interest income, net		1,916		496		5,007		2,730
Equity income from investments in unconsolidated affiliates		235		139		778		1,181
Income before taxes	$	104,174	$	74,494	$	383,752	$	274,127
Income tax expense		17,400		8,870		57,913		35,474
Net income including noncontrolling interests		86,774		65,624	$	325,839	$	238,653
Less: Net income attributable to noncontrolling interests		2,362		1,836		8,080		6,207
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	$	84,412	$	63,788	$	317,759	$	232,446
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
Basic	$	1.27	$	0.96	$	4.76	$	3.47
Diluted	$	1.26	$	0.95	$	4.74	$	3.46
Weighted average shares outstanding:
Basic		66,704		66,779		66,777		66,923
Diluted		66,943		67,014		67,023		67,179
Cash dividends declared per share	$	0.61	$	0.55	$	1.83	$	1.65

See accompanying notes to condensed consolidated financial statements.

4

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except share and per share data)

(unaudited)

	For the 13 Weeks Ended September 24, 2024
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, June 25, 2024	66,727,898	$	67	$	—	$	1,262,569	$	1,262,636	$	15,054	$	1,277,690
Net income	—		—		—		84,412		84,412		2,362		86,774
Distributions to noncontrolling interest holders	—		—		—		—		—		(2,485)		(2,485)
Acquisition of noncontrolling interest, net of deferred taxes	—		—		(23)		—		(23)		23		—
Dividends declared ($0.61 per share)	—		—		—		(40,696)		(40,696)		—		(40,696)
Shares issued under share-based compensation plans including tax effects	60,735		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(18,562)		—		(3,198)		—		(3,198)		—		(3,198)
Repurchase of shares of common stock, including excise tax as applicable	(56,248)		—		(11,555)		1,938		(9,617)		—		(9,617)
Share-based compensation	—		—		14,776		—		14,776		—		14,776
Balance, September 24, 2024	66,713,823	$	67	$	—	$	1,308,223	$	1,308,290	$	14,954	$	1,323,244
	For the 13 Weeks Ended September 26, 2023
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, June 27, 2023	66,843,456	$	67	$	—	$	1,082,915	$	1,082,982	$	15,268	$	1,098,250
Net income	—		—		—		63,788		63,788		1,836		65,624
Distributions to noncontrolling interest holders	—		—		—		—		—		(1,894)		(1,894)
Dividends declared ($0.55 per share)	—		—		—		(36,731)		(36,731)		—		(36,731)
Shares issued under share-based compensation plans including tax effects	68,248		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(21,101)		—		(2,360)		—		(2,360)		—		(2,360)
Repurchase of shares of common stock, including excise tax as applicable	(107,593)		—		(6,162)		(6,083)		(12,245)		—		(12,245)
Share-based compensation	—		—		8,522		—		8,522		—		8,522
Balance, September 26, 2023	66,783,010	$	67	$	—	$	1,103,889	$	1,103,956	$	15,210	$	1,119,166

See accompanying notes to condensed consolidated financial statements.

5

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except share and per share data)

(unaudited)

	For the 39 Weeks Ended September 24, 2024
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, December 26, 2023	66,789,464	$	67	$	—	$	1,141,595	$	1,141,662	$	15,849	$	1,157,511
Net income	—		—		—		317,759		317,759		8,080		325,839
Distributions to noncontrolling interest holders	—		—		—		—		—		(8,110)		(8,110)
Acquisition of noncontrolling interest, net of deferred taxes	—		—		(3,297)		—		(3,297)		(865)		(4,162)
Dividends declared ($1.83 per share)	—		—		—		(122,205)		(122,205)		—		(122,205)
Shares issued under share-based compensation plans including tax effects	295,519		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(92,246)		—		(14,027)		—		(14,027)		—		(14,027)
Repurchase of shares of common stock, including excise tax as applicable	(278,914)		—		(15,830)		(28,926)		(44,756)		—		(44,756)
Share-based compensation	—		—		33,154		—		33,154		—		33,154
Balance, September 24, 2024	66,713,823	$	67	$	—	$	1,308,223	$	1,308,290	$	14,954	$	1,323,244
	For the 39 Weeks Ended September 26, 2023
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, December 27, 2022	66,973,311	$	67	$	13,139	$	999,432	$	1,012,638	$	15,024	$	1,027,662
Net income	—		—		—		232,446		232,446		6,207		238,653
Distributions to noncontrolling interest holders	—		—		—		—		—		(6,021)		(6,021)
Dividends declared ($1.65 per share)	—		—		—		(110,429)		(110,429)		—		(110,429)
Shares issued under share-based compensation plans including tax effects	324,415		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(100,397)		—		(10,599)		—		(10,599)		—		(10,599)
Repurchase of shares of common stock, including excise tax as applicable	(414,319)		—		(27,806)		(17,560)		(45,366)		—		(45,366)
Share-based compensation	—		—		25,266		—		25,266		—		25,266
Balance, September 26, 2023	66,783,010	$	67	$	—	$	1,103,889	$	1,103,956	$	15,210	$	1,119,166

See accompanying notes to condensed consolidated financial statements.

6

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	39 Weeks Ended
	September 24, 2024		September 26, 2023
Cash flows from operating activities:
Net income including noncontrolling interests	$	325,839	$	238,653
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		128,918		112,764
Deferred income taxes		(9,592)		2,707
Loss on disposition of assets		2,842		4,315
Impairment and closure costs		826		41
Equity income from investments in unconsolidated affiliates		(778)		(1,181)
Distributions of income received from investments in unconsolidated affiliates		799		493
Provision for doubtful accounts		(22)		4
Share-based compensation expense		33,154		25,266
Changes in operating working capital, net of acquisitions:
Receivables		123,155		102,068
Inventories		(1,522)		1,835
Prepaid expenses and other current assets		10,394		5,821
Other assets		(15,566)		(12,680)
Accounts payable		3,166		14,188
Deferred revenue—gift cards		(147,287)		(135,251)
Accrued wages		20,636		13,469
Prepaid income taxes and income taxes payable		5,923		2,443
Accrued taxes and licenses		6,849		7,041
Other accrued liabilities		(98)		(10,117)
Operating lease right-of-use assets and lease liabilities		4,845		4,702
Other liabilities		23,608		14,158
Net cash provided by operating activities		516,089		390,739
Cash flows from investing activities:
Capital expenditures—property and equipment		(246,539)		(243,895)
Acquisitions of franchise restaurants, net of cash acquired		—		(39,153)
Proceeds from sale of investments in unconsolidated affiliates		—		632
Proceeds from sale of property and equipment		197		1,800
Proceeds from sale leaseback transactions		9,126		7,097
Net cash used in investing activities		(237,216)		(273,519)
Cash flows from financing activities:
Payments on revolving credit facility		—		(50,000)
Distributions to noncontrolling interest holders		(8,110)		(6,021)
Acquisition of noncontrolling interest		(5,279)		—
Proceeds from restricted stock and other deposits, net		396		485
Indirect repurchase of shares for minimum tax withholdings		(14,027)		(10,599)
Repurchase of shares of common stock		(44,689)		(45,193)
Dividends paid to shareholders		(122,205)		(110,429)
Net cash used in financing activities		(193,914)		(221,757)
Net increase (decrease) in cash and cash equivalents		84,959		(104,537)
Cash and cash equivalents—beginning of period		104,246		173,861
Cash and cash equivalents—end of period	$	189,205	$	69,324
Supplemental disclosures of cash flow information:
Interest paid, net of amounts capitalized	$	669	$	877
Income taxes paid	$	61,804	$	30,323
Capital expenditures included in current liabilities	$	42,641	$	51,556

See accompanying notes to condensed consolidated financial statements.

7

Texas Roadhouse, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(tabular amounts in thousands, except per share data)

(unaudited)

(1)  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Texas Roadhouse, Inc., our wholly owned subsidiaries and subsidiaries in which we have a controlling interest (collectively, the "Company," "we," "our" and/or "us") as of September 24, 2024 and December 26, 2023 and for the 13 and 39 weeks ended September 24, 2024 and September 26, 2023.

The Company maintains three restaurant concepts operating as Texas Roadhouse, Bubba’s 33, and Jaggers. As of September 24, 2024, we owned and operated 657 restaurants and franchised an additional 115 restaurants in 49 states, one U.S. territory, and ten foreign countries. Of the 115 franchise restaurants, there were 59 domestic restaurants and 56 international restaurants, including one in a U.S. territory. As of September 26, 2023, we owned and operated 623 restaurants and franchised an additional 99 restaurants in 49 states and ten foreign countries. Of the 99 franchise restaurants, there were 55 domestic restaurants and 44 international restaurants.

As of September 24, 2024 and September 26, 2023, we owned a majority interest in 19 and 20 company restaurants, respectively. The operating results of these majority-owned restaurants are consolidated and the portion of income attributable to noncontrolling interests is reflected in the line item net income attributable to noncontrolling interests in our unaudited condensed consolidated statements of income.

As of September 24, 2024 and September 26, 2023, we owned a 5.0% to 10.0% equity interest in 20 domestic franchise restaurants. These 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 under equity income from investments in unconsolidated affiliates in our unaudited condensed consolidated statements of income. 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, 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 valuation of property and equipment, goodwill, lease liabilities and right-of-use assets, obligations related to insurance reserves, legal reserves, income taxes, and gift card breakage. 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 unaudited condensed consolidated financial statements 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. Operating results for the 13 and 39 weeks ended September 24, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024. 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 fiscal year ended December 26, 2023.

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

8

(2) Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure. This ASU primarily requires enhanced disclosures about significant segment expenses including requiring segment disclosures to include a description of other segment items by reportable segment and any additional measures of a segment’s profit or loss used by the chief operating decision maker ("CODM") when deciding how to allocate resources. The ASU also requires all annual disclosures currently required by Topic 280 to be included in interim periods as well as the title of the CODM and an explanation of how the CODM uses the reported measure of segment profit or loss in assessing performance and allocating resources. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are currently assessing the impact of this new standard on our segment reporting disclosures and expect to provide additional detail and disclosures under this new guidance.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU primarily requires enhanced disclosures about an entity’s income tax including requiring consistent categories and greater disaggregation of the information included in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The amendments in this update are effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. We are currently assessing the impact of this new standard on our income tax disclosures and expect to provide additional detail and disclosures under this new guidance.

(3)   Long-term Debt

We maintain a revolving credit facility (the "credit facility") with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A. and PNC Bank, N.A. The credit facility is an unsecured, revolving credit agreement and has a borrowing capacity of up to $300.0 million with the option to increase by an additional $200.0 million subject to certain limitations, including approval by the syndicate of commercial lenders. The credit facility has a maturity date of May 1, 2026.

We are required to pay interest on outstanding borrowings at the Term Secured Overnight Financing Rate ("SOFR"), plus a fixed adjustment of 0.10% and a variable adjustment of 0.875% to 1.875% depending on our consolidated leverage ratio.

As of September 24, 2024 and December 26, 2023, we had no outstanding borrowings under the credit facility and had $295.3 million of availability, net of $4.7 million of outstanding letters of credit.

The interest rate for the credit facility as of September 24, 2024 and September 26, 2023 was 5.72% and 6.19%, respectively. ​

The lenders’ obligation to extend credit pursuant to the credit facility depends on us maintaining certain financial covenants, including a minimum consolidated fixed charge coverage ratio and a maximum consolidated leverage ratio. The credit facility permits us to incur additional secured or unsecured indebtedness, except for the incurrence of secured indebtedness that in the aggregate is equal to or greater than $125.0 million and 20% of our consolidated tangible net worth. We were in compliance with all financial covenants as of September 24, 2024.

9

(4) Revenue

The following table disaggregates our revenue by major source:

	13 Weeks Ended				39 Weeks Ended
	September 24, 2024		September 26, 2023		September 24, 2024		September 26, 2023
Restaurant and other sales	$	1,265,279	$	1,115,224	$	3,913,073	$	3,447,192
Franchise royalties		6,808		5,832		20,601		17,896
Franchise fees		912		696		1,744		2,223
Total revenue	$	1,272,999	$	1,121,752	$	3,935,418	$	3,467,311

The following table presents a rollforward of deferred revenue-gift cards:

	13 Weeks Ended				39 Weeks Ended
	September 24, 2024		September 26, 2023		September 24, 2024		September 26, 2023
Beginning balance	$	250,485	$	226,130	$	373,913	$	335,403
Gift card activations, net of third-party fees		56,527		48,824		191,409		167,378
Gift card redemptions and breakage		(80,386)		(73,638)		(338,696)		(301,465)
Ending balance	$	226,626	$	201,316	$	226,626	$	201,316

We recognized restaurant sales of $26.1 million and $210.1 million for the 13 and 39 weeks ended September 24, 2024, respectively, related to amounts in deferred revenue as of December 26, 2023. We recognized restaurant sales of $26.5 million and $191.7 million for the 13 and 39 weeks ended September 26, 2023, respectively, related to amounts in deferred revenue as of December 27, 2022.

(5) Income Taxes

The effective tax rate was 16.7% and 11.9% for the 13 weeks ended September 24, 2024 and September 26, 2023, respectively. The effective tax rate was 15.1% and 12.9% for the 39 weeks ended September 24, 2024 and September 26, 2023, respectively. The increase in our tax rate for the 13 and 39 weeks ended September 24, 2024 as compared to the prior year periods was primarily due to a decrease in the impact of the FICA tip tax credit, which was driven by increased profitability.

(6) Commitments and Contingencies

The estimated cost of completing capital project commitments at September 24, 2024 and December 26, 2023 was $256.3 million and $237.4 million, respectively.

As of September 24, 2024 and December 26, 2023, we were contingently liable for $9.7 million and $10.4 million, respectively, for seven lease guarantees. 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 24, 2024 and December 26, 2023, 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 24, 2024 and September 26, 2023, we bought our beef primarily 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. We have no material minimum purchase commitments with our vendors that extend beyond a year.

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Occasionally, we are a defendant in litigation arising in the ordinary course of 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 at varying retention levels, has had a material adverse effect on us 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.

(7)   Acquisitions

On December 28, 2022, the first day of the 2023 fiscal year, we completed the acquisition of eight franchise Texas Roadhouse restaurants located in Maryland and Delaware, including four in which we previously held a 5.0% equity interest. Pursuant to the terms of the acquisition agreements, we paid a total purchase price of $39.1 million, net of cash acquired, for 100% of the entities. The transactions in which we held an equity interest were accounted for as step acquisitions, and we recorded a gain of $0.6 million on our previous investments in equity income from investments in unconsolidated affiliates in the unaudited condensed consolidated statements of income.

These transactions were accounted for using the acquisition method as defined in Accounting Standards Codification 805, Business Combinations. These acquisitions are consistent with our long-term strategy to increase net income and earnings per share.

The following table summarizes the consideration paid for these acquisitions and the estimated fair value of the assets acquired and the liabilities assumed at the acquisition date, which are adjusted for final measurement-period adjustments.

Inventory	$	410
Other assets		293
Property and equipment		17,763
Operating lease right-of-use assets		4,775
Goodwill		20,067
Intangible assets		1,700
Deferred revenue-gift cards		(1,164)
Current portion of operating lease liabilities		(110)
Operating lease liabilities, net of current portion		(4,665)
	$	39,069

Intangible assets represent reacquired franchise rights which are being amortized over a weighted-average useful life of 2.2 years. We expect all of the goodwill will be deductible for tax purposes and believe the resulting amount of goodwill reflects the benefit of sales and unit growth opportunities as well as the benefit of the assembled workforce of the acquired restaurants.

(8)   Related Party Transactions

As of September 24, 2024 and September 26, 2023, we had four franchise restaurants and one majority-owned company restaurant owned in part by a current officer of the Company. We recognized revenue of $0.5 million for each of the 13 weeks ended September 24, 2024 and September 26, 2023 related to the four franchise restaurants. We recognized revenue of $1.5 million for each of the 39 weeks ended September 24, 2024 and September 26, 2023 related to the four franchise restaurants.

(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 restricted stock units from our equity incentive plans. Performance stock units are not included in the diluted earnings per share calculation until the performance-based criteria have been met.

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For all periods presented, the weighted-average shares of nonvested stock units that were outstanding but not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect were not significant.

The following table sets forth the calculation of earnings per share and weighted-average shares outstanding as presented in the accompanying unaudited condensed consolidated statements of income: