The Cheesecake Factory Incorporated · NASDAQ:CAKE
The Cheesecake Factory — Cheesecake Factory — Investor Presentation (May 2020)
33 slides from The Cheesecake Factory's investor presentation, May 13, 2020
Slide 1: Investor Presentation May 13, 2020
Investor Presentation May 13, 2020
Slide 2: Forward-looking statements
This presentation contains forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended . This includes, without limitation, financial guidance and projections and statements with resp
Slide 3: Managing Through COVID-19
Managing Through COVID - 19 3 • Pivoted very quickly to maximize sales, manage costs, and preserve cash • Shifted to an off - premise only model – have seen sales accelerate – Cheesecake Factory restaurants off - premise average weekly sales have nearly doubled since 1Q20 level - on an annualized ba
Slide 4: Our Anticipated Dining Room Reopening Plan
Our Anticipated Dining Room Reopening Plan 4 • Proactively positioning the Company for an anticipated gradual return to normal operations • By maintaining restaurant management teams, field leadership and adequate corporate support infrastructure, we believe we are well positioned for a strong resta
Slide 5: Investment Highlights
• Experiential dining category leader with diversified growth drivers • Leveraging the Company’s strong foothold in the off - premise channel to support the business in the COVID - 19 environment • Durable business over time - sustained track record of consistent financial performance • Historically
Slide 6: The Cheesecake Factory - Global Footprint
The Cheesecake Factory - Global Footprint 6 High quality, high profile locations worldwide Company - Owned: 206 Toronto International – Licensed: 26 Mexico City (3) Guadalajara Saudi Arabia (4) UAE (6) Kuwait (3) Qatar (3) Bahrain (1) Shanghai Hong Kong Beijing Monterrey Macau
Slide 7: The Cheesecake Factory - A Highly Differentiated Concept
Breadth of Menu & Innovation Ambiance, Service and Hospitality The Cheesecake Factory - A Highly Differentiated Concept Best - in - Class Operational Execution Integrated Bakery 7
Slide 8: Breadth of Menu & Innovation are Key Competitive Advantages
Breadth of Menu & Innovation are Key Competitive Advantages 250 Menu Items - Made Fresh, From Scratch 8
Slide 9: Dining With Us Is an Experience
Dining With Us Is an Experience Ambiance, Service and Hospitality Drive Sales 9
Slide 10: Integrated Bakery – The Cheesecake Magic
Integrated Bakery – The “Cheesecake” Magic • Produces over 70 cheesecakes and other baked desserts • Enables creativity, quality control and supply chain efficiencies Industry - Leading Dessert Sales FY19 16% 10
Slide 11: Cult Status & Strong Consumer Engagement
Cult Status & Strong Consumer Engagement 900K followers 5M+ fans 370K followers Millions of Viewers 11 A division of Vice Media LLC Note: Statistics as of May 12, 2020
Slide 12: Broad Consumer Demographic and Appeal With a Moderate Average Check
Broad Consumer Demographic and Appeal With a Moderate Average Check Highest Unit Volumes ($ in millions) Source: Latest pre - COVID - 19 SEC 10 - K filings and company presentations 2019 #2 Top Large Chain 12 2019 CONSUMER PICKS #1 Food Quality #1 Ambiance Casual Dining $10.7 $8.3 $8.1 $5.5 $5.2 $5.
Slide 13: Leveraging This Differentiation in the Off-Premise Channel
9% 12% 14% 16% 22% 2013 2017 2018 2019 1Q20 Off - Premise Sales (% of Total Revenue) Leveraging This Differentiation in the Off - Premise Channel ~$2 million per restaurant * New Takeout Packaging 13 April 2020: ~$4 million per restaurant * *Annualized unit volume equivalent based on average weekly
Slide 14: Further Leaning in to Convenience
Further Leaning in to Convenience 14
Slide 15: Increasing Unaided Awareness to Drive Comparable Sales Growth
Increasing Unaided Awareness to Drive Comparable Sales Growth 15 Attain Top of Mind Status
Slide 16: Capitalizing on the Power of the Brand
Capitalizing on the Power of the Brand The Cheesecake Factory At Home ® 16
Slide 17: Best-in-Class Operational Execution and Industry-Leading Retention
Best - in - Class Operational Execution and Industry - Leading Retention Average Tenure by Position 31 years 22 years 19 years 18 years 13 years 13 years Senior VP of Operations Regional Vice Presidents Area Directors of Operations Area Kitchen Operations Managers General Managers Executive Kitchen
Slide 18: Looking Ahead: Post-COVID-19
Looking Ahead: Post - COVID - 19 Diversified growth drivers once the restaurant industry operating environment normalizes 18 18 *The following targets assume full capacity conditions are ultimately permitted by state and local jurisdictions
Slide 19: An Experiential Dining Category Leader
An Experiential Dining Category Leader 19 Culinary forward. First class hospitality. Concepts like no other.
Slide 20: Returns-Focused Growth Opportunity for The Cheesecake Factory
The Cheesecake Factory – Returns - Focused Growth Opportunity for 300 Domestic & 8 - 10 Canadian Locations Over Time Average Unit Economics* ($ millions) Sales $10.7 Restaurant - Level Margin % ~18% Cash Capex Investment $8+ Cash - on - Cash Return 20% - 25% * Illustrative example of target returns
Slide 21: Expanding International Licensed Presence
The Cheesecake Factory – Expanding International Licensed Presence • Anticipated continued expansion within current geographies • Potential for additional geographies with current licensees • Opportunity to add licensees and territories +1 ¢ Per Restaurant in EPS, on Average $0 Capital Expenditure S
Slide 22: North Italia: Filling White Space for Contemporary Italian
Filling White Space for an On - Trend, Contemporary Italian Offering 22 • Potential for 200 domestic locations over time - 23 locations in 11 states & Washington D.C. currently • All dishes handmade from scratch daily • Serving lunch, dinner, weekend brunch & weekday happy hour • Average check: $25
Slide 23: Fox Restaurant Concepts Will Serve as an Incubation Engine
Fox Restaurant Concepts Will Serve as an Incubation Engine Innovating Concepts of the Future 23 Potential Growth Boutique Brands
Slide 24: The Future CAKE: Post-COVID-19
The Future CAKE: Post - COVID - 19 Target Size (sq. ft.) 7,500 – 10,000 5,000 - 6,500 3,500 – 15,000 Average Unit Volume $10.7M ~$7M Avg. $5M+ Sales/sq. ft. ~$1,000 ~$1,200 ~$1,000 Target Long - Term Unit Growth ~3% ~20%+ ~15% Top - Line Unit Growth Contribution ~3% ~2% ~2% Target Restaurant - Level
Slide 25: Track Record of Consistent Financial Performance
Track Record of Consistent Financial Performance 25
Slide 26: History of Outperforming the Industry
(4.2)% (6.8)% (0.6)% 4.0% 4.2% 3.3% 2.6% 4.1% 3.8% 0.4% 0.9% 2.5% (4.3)% (8.7)% (6.1)% 1.0% 2.0% (0.9)% (1.6)% 0.8% (0.4)% (2.2)% 0.5% 1.4% History of Outperforming the Industry 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Knapp - Track Index Comparable Sales - Historical 2 - year Sta
Slide 27: Capital Allocation Detail
27 $0.84 $1.07 $1.42 $1.64 $1.88 $2.10 $1.97 $2.37 $2.83 $2.60 $2.51 $2.61 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Capital Allocation Detail $85 $163 $128 $120 $112 $107 $135 $94 $158 $100 $163 $119 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ¹Free cash flow defin
Slide 28: Stable, Agile Brands With Scale Will Be Best Equipped to Weather Volatility
$2.9 $2.8 $2.1 $2.1 $1.8 $1.5 $1.4 $0.8 ~$4 1.4% 1.8% 2.1% 1.3% 1.5% 1.5% 1.8% 2.5% 2.2% 2.4% 0.8% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.6% 0.5% 0.5% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Annual Restaurant Unit Growth US Population Growth We Believe Stable, Agile Brands With Scale Will Be Best
Slide 29: Investment Highlights
• Experiential dining category leader with diversified growth drivers • Leveraging the Company’s strong foothold in the off - premise channel to support the business in the COVID - 19 environment • Durable business over time - sustained track record of consistent financial performance • Historically
Slide 30: Appendix
Appendix
Slide 31: Non-GAAP Reconciliations
Non - GAAP Reconciliations In addition to the results provided in accordance with the Generally Accepted Accounting Principles (“GAAP”) in this presentation, the Company is providing non - GAAP measurements which present diluted net income per share excluding the impact of certain items and free cas
Slide 32: Non-GAAP Reconciliation
Non - GAAP Reconciliation (1) The tax effect assumes a tax rate based on the federal statutory rate and an estimated blended state tax rate. (2) Fiscal 2017 includes a $38.5 million benefit to the income tax provision related to tax reform enacted in December 2017. (3) Adjusted diluted net income pe
Slide 33: Non-GAAP Reconciliation
Non - GAAP Reconciliation (1) The excess tax benefit related to stock options exercised is no longer reclassified from cash flows from operating activi tie s to cash flows from financing activities in the consolidated statements of cash flows. The consolidated statements of cash flows for fiscal 201
Cheesecake Factory — Investor Presentation (May 2020) on 6ix