The Cheesecake Factory Reports Results for Fourth Quarter of Fiscal 2012

  The Cheesecake Factory Reports Results for Fourth Quarter of Fiscal 2012

Business Wire

CALABASAS HILLS, Calif. -- February 20, 2013

The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported financial
results for the fourth quarter of fiscal 2012, which ended on January 1, 2013.

Total revenues were $464.7 million in the fourth quarter of fiscal 2012 as
compared to $477.7 million in the prior year fourth quarter (13 weeks vs. 14
weeks). Net income and diluted net income per share were $22.1 million and
$0.40, respectively, in the fourth quarter of fiscal 2012.

The Company recorded a pre-tax charge of $9.5 million related to discontinuing
operations of three Grand Lux Cafe restaurants and impairing one The
Cheesecake Factory restaurant during the fourth quarter of fiscal 2012. These
items decreased diluted net income per share by approximately $0.11. Excluding
these items, net income was $27.9 million and diluted net income per share was
$0.51.

Operating Results

Comparable restaurant sales at The Cheesecake Factory and Grand Lux Cafe
increased 0.9% in the fourth quarter of fiscal 2012, but were negatively
impacted by approximately 0.6% due to Hurricane Sandy. Excluding this weather
impact, comparable restaurant sales increased 1.5%.

By concept, comparable restaurant sales grew 1.3% at The Cheesecake Factory
and declined 3.2% at Grand Lux Cafe.

“The fourth quarter marks the twelfth consecutive quarter in which we
delivered positive comparable restaurant sales. Our sales were competitively
quite strong and within our expected range, absent the hurricane. Our
operators did a great job of maintaining high guest satisfaction scores while
managing their cost structures to deliver higher year-over-year
restaurant-level margins. Our fourth quarter results are the culmination of
strong performance this year, including a solid increase in comparable
restaurant sales, a significant step forward in returning to peak operating
margins and execution of our longer-term earnings per share growth goal,” said
David Overton, Chairman and Chief Executive Officer.

“We expect 2013 to be another year of growth, through the expansion of our
restaurants, both domestically and internationally. Strategically, we will
continue to focus on food quality and service as key differentiators and
business drivers, contributing to our expectation for higher comparable
restaurant sales, higher earnings per share and increasing shareholder value,”
concluded Overton.

Development

The Company opened four new restaurants in the fourth quarter of fiscal 2012,
executing on its objective to open eight new restaurants for the full year.

Internationally, two new The Cheesecake Factory restaurants opened in the
Middle East in the fourth quarter of fiscal 2012, for a total of three new
international locations opened during the year under a licensing agreement.

In fiscal 2013, the Company continues to expect it will open as many as eight
to ten new restaurants. Internationally, the Company expects as many as three
new restaurants to open under a licensing agreement.

Capital Allocation

The Company’s Board of Directors declared a quarterly cash dividend of $0.12
per share on the Company’s common stock. The dividend is payable on March 19,
2013 to shareholders of record at the close of business on March 6, 2013.

During the fourth quarter of fiscal 2012, the Company repurchased 787,995
shares of its common stock at a cost of $26.4 million. For the full year of
fiscal 2012, the Company repurchased 3,218,094 shares at a cost of $101.4
million. Including dividends, the Company returned $114.3 million in cash to
shareholders in fiscal 2012, exceeding its plan for the year.

The Company expects that it will return the majority of its free cash flow to
shareholders in fiscal 2013 in the form of dividends and share repurchases.

Financial Reporting Dates for Fiscal 2013

The Company plans to announce quarterly financial results and hold conference
calls to discuss its results for the first three quarters of fiscal 2013 as
outlined below. The earnings press releases will be issued at approximately
1:15 p.m. Pacific Time and the conference calls will follow at 2:00 p.m.
Pacific Time on the same day. Dates and times could be subject to change.

                              
          Quarter Ending                      Earnings Release and Conference
                                              Call Dates
          April 2, 2013                       April 24, 2013
          July 2, 2013                        July 24, 2013
          October 1, 2013                     October 23, 2013
                                              

Conference Call and Webcast

A conference call to review the Company’s results for the fourth quarter of
fiscal 2012 will be held today at 2:00 p.m. Pacific Time. The conference call
will be broadcast live over the Internet and a replay will be available
shortly after the call and continue through March 20, 2013. To listen to the
conference call, please go to the Company’s website at
www.thecheesecakefactory.com at least 15 minutes prior to the start of the
call to register and download any necessary audio software. Click on the
“Investors” link on the home page and select the conference call link at the
top of the page.

About The Cheesecake Factory Incorporated

The Cheesecake Factory Incorporated created the upscale casual dining segment
in 1978 with the introduction of its namesake concept. The Company operates
177 full-service, casual dining restaurants throughout the U.S., including 162
restaurants under The Cheesecake Factory® mark; 14 restaurants under the Grand
Lux Cafe® mark; and one restaurant under the RockSugar Pan Asian Kitchen®
mark. Internationally, three The Cheesecake Factory® restaurants operate under
a licensing agreement. The Company also operates two bakery production
facilities in Calabasas Hills, CA and Rocky Mount, NC that produce over 70
varieties of quality cheesecakes and other baked products. To learn more about
the Company, visit www.thecheesecakefactory.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements involve
known and unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed or
implied by forward-looking statements, including uncertainties related to:
future charges associated with discontinuing operations at three Grand Lux
Cafe restaurants; the Company’s ability to deliver comparable sales increases;
the Company’s ability to outperform the casual dining industry; the Company’s
ability to maintain or increase its food quality and overall guest
satisfaction scores; the Company’s ability to manage its cost structure; the
Company’s ability to expand domestically and internationally; the Company’s
ability to deliver higher comparable sales, higher earnings per share and
increase shareholder value in the future; factors outside of the Company’s
control that impact consumer confidence and spending; current and future macro
national and regional economic and credit market conditions; changes in
national and regional unemployment rates; the economic health of the Company’s
landlords and other tenants in retail centers in which its restaurants are
located; the economic health of suppliers, vendors and other third parties
providing goods or services to the Company; adverse weather conditions in
regions in which the Company’s restaurants are located; factors that are under
the control of government agencies, landlords and other third parties; and
other risks and uncertainties detailed from time to time in the Company’s
filings with the Securities and Exchange Commission (“SEC”), as set forth
below. Investors are cautioned that forward-looking statements are not
guarantees of future performance and that undue reliance should not be placed
on such statements. Forward-looking statements speak only as of the dates on
which they are made and the Company undertakes no obligation to publicly
update or revise any forward-looking statements or to make any other
forward-looking statements, whether as a result of new information, future
events or otherwise, unless required to do so by securities laws. Investors
are referred to the full discussion of risks and uncertainties associated with
forward-looking statements and the discussion of risk factors contained in the
Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K as filed with the SEC, which are available at
www.sec.gov.

                                                                                                               
The Cheesecake Factory Incorporated and Subsidiaries

Consolidated Financial Statements

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

                       13 Weeks Ended                   14 Weeks Ended                   52 Weeks Ended                53 Weeks Ended
Consolidated
Statements of        January 1, 2013                  January 3, 2012                  January 1, 2013               January 3, 2012
Operations
                                        Percent of                     Percent of                          Percent                        Percent
                        Amounts                        Amounts                       Amounts        of          Amounts         of
                                        Revenue                        Revenue
                                                                                                           Revenue                        Revenue
Revenues                $ 464,695       100.0     %      $               100.0     %      $1,809,017       100.0 %      $ 1,757,624       100.0 %
                                                         477,696
Costs and
expenses:
Cost of sales             119,916       25.8      %      124,606         26.1      %      450,153          24.9  %        448,468         25.5  %
Labor expenses            145,496       31.3      %      151,306         31.7      %      580,192          32.1  %        567,358         32.3  %
Other operating
costs and                 111,101       23.9      %      115,266         24.1      %      439,559          24.3  %        428,442         24.3  %
expenses
General and
administrative            26,763        5.8       %      24,348          5.1       %      104,156          5.7   %        96,263          5.5   %
expenses
Depreciation and
amortization              18,893        4.1       %      19,434          4.1       %      74,433           4.1   %        71,958          4.1   %
expenses
Impairment of
assets and lease          9,536         2.0       %      1,547           0.3       %      9,536            0.5   %        1,547           0.1   %
terminations(1)
Preopening costs         4,804      1.0       %      3,006       0.6       %      12,289        0.7   %       10,138       0.6   %
Total costs and          436,509    93.9      %      439,513     92.0      %      1,670,318     92.3  %       1,624,174    92.4  %
expenses
Income from               28,186        6.1       %      38,183          8.0       %      138,699          7.7   %        133,450         7.6   %
operations
Interest and
other                    (1,029  )   (0.3      )%     (610    )    (0.1      )%     (4,725     )   (0.3  )%      (4,307    )   (0.3  )%
(expense)/income,
net
Income before             27,157        5.8       %      37,573          7.9       %      133,974          7.4   %        129,143         7.3   %
income taxes
Income tax               5,018      1.1       %      7,631       1.6       %      35,551        2.0   %       33,423       1.9   %
provision
Net income              $ 22,139     4.8       %      $           6.3       %      $ 98,423      5.4   %      $ 95,720       5.4   %
                                                         29,942
                                                                                                                                          
Basic net income        $ 0.42                          $ 0.55                          $ 1.85                       $ 1.70      
per share
Basic weighted
average shares           52,948                        54,267                          53,185                        56,378    
outstanding
                                                                                                                                          
Diluted net             $ 0.40                          $ 0.54                          $ 1.78                       $ 1.64      
income per share
Diluted weighted
average shares           55,079                        55,894                          55,211                        58,190    
outstanding
                                                                                                                                          
Selected Segment   
Information
Revenues:
Restaurants             $ 437,998                        $                                $1,743,806                    $ 1,685,037
                                                         448,270
Bakery                    41,411                         44,301                           129,122                         131,264
Intercompany             (14,714 )                      (14,875 )                        (63,911    )                   (58,677   )
bakery sales
                        $ 464,695                       $                               $1,809,017                   $ 1,757,624 
                                                         477,696
                                                                                                                                          
Income from
operations:
Restaurants(1)          $ 48,088                         $                                $ 225,993                     $ 215,803
                                                         56,566
Bakery                    4,797                          3,496                            10,784                          8,670
Corporate                (24,699 )                      (21,879 )                        (98,078    )                   (91,023   )
                        $ 28,186                        $                               $ 138,699                    $ 133,450   
                                                         38,183
                                                                                                                                          
                                                                                                                                          
Selected
Consolidated         January 1, 2013                  January 3, 2012
Balance Sheet
Information
Cash and cash             $             83,569                         $ 48,211
equivalents
Total assets                            1,092,167                        1,022,570
Total liabilities                       512,441                          479,817
Stockholders'                           579,726                          542,753
equity
                                                                                                                                          
                                                                                                                                          
                        13 Weeks Ended                   14 Weeks Ended                   52 Weeks Ended                53 Weeks Ended
Supplemental         January 1, 2013                  January 3, 2012                  January 1, 2013               January 3, 2012
Information
Comparable
restaurant sales                        0.9       %                      2.7       %                       1.9   %                        1.8   %
percentage change
Restaurants
opened during                           4                                2                                 8                              7
period
Restaurants open                        177                              170                               177                            170
at period-end
Restaurant                              2,271                            2,367                             8,957                          8,777
operating weeks
                                                                                                                                          

        Includes impairment of one The Cheesecake Factory restaurant in the
        fourth quarter of fiscal 2012 and two The Cheesecake Factory
        restaurants and one Grand Lux Cafe in the fourth quarter of fiscal
        2011. The amounts associated with these items were $5,469 and $1,547,
(1)   respectively. Also includes partial reimbursement to landlords of
        tenant improvement allowances and broker fees for three Grand Lux Cafe
        locations where the Company is discontinuing operations in March 2013.
        The amount associated with this item was $4,067 and was recorded in
        the fourth quarter of fiscal 2012.
        
        

Reconciliation of Non-GAAP Results to GAAP Results

In addition to the results provided in accordance with Generally Accepted
Accounting Principles ("GAAP") in this press release, the Company is providing
non-GAAP measurements which present the fourth quarter and full year fiscal
2012 and fiscal 2011 net income and diluted net income per share excluding the
impact from certain items. Additional detail regarding the fourth quarter
fiscal 2012 items can be found on the first page of this press release and in
the footnote to the Consolidated Financial Statements on the previous page.

The non-GAAP measurements are intended to supplement the presentation of the
Company’s financial results in accordance with GAAP. The Company believes that
the presentation of these items provides additional information to facilitate
the comparison of past and present financial results.

                                                           
                      13 Weeks       14 Weeks         52 Weeks          53 Weeks
                      Ended          Ended            Ended             Ended
                      January        January 3,       January 1,        January 3,
                      1, 2013        2012             2013              2012
                      (unaudited; in thousands, except per share data)
Net income            $ 22,139       $ 29,942         $ 98,423          $ 95,720
(GAAP)
After-tax
impact from:
- Impairment of
assets and              5,722          928              5,722             928
lease
terminations(1)
- Proceeds from
variable life           -              -                (419    )         -
insurance
contract(2)
- Partial IRS          -             (1,506 )        -               (1,506 )
settlement(3)
Net income            $ 27,861       $ 29,364        $ 103,726        $ 95,142 
(non-GAAP)
                                                                        
Diluted net
income per            $ 0.40         $ 0.54           $ 1.78            $ 1.64
share (GAAP)
After-tax
impact from:
- Impairment of
assets and              0.11           0.02             0.11              0.02
lease
terminations(1)
- Proceeds from
variable life           -              -                (0.01   )         -
insurance
contract(2)
- Partial IRS          -             (0.03  )        -               (0.03  )
settlement(3)
Diluted net
income per           $ 0.51         $ 0.53          $ 1.88           $ 1.64   
share
(non-GAAP)(4)
                                                                        

        The pre-tax amounts associated with this item were $9,536 in the
(1)   fourth quarter of fiscal 2012 and $1,547 in the fourth quarter of
        fiscal 2011, and were recorded in impairment of assets and lease
        terminations.
(2)     This item is non-taxable and is recorded in interest and other
        (expense)/income, net.
        The pre-tax amounts associated with this item were $719 and $1,075 and
(3)     were recorded in interest and other (expense)/income, net and income
        tax provision, respectively.
(4)     Diluted net income per share may not add due to rounding.

Contact:

The Cheesecake Factory Incorporated
Jill Peters, (818) 871-3000
investorrelations@thecheesecakefactory.com
 
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