The Cheesecake Factory Incorporated · NASDAQ:CAKE
The Cheesecake Factory — Cheesecake Factory — Investor Presentation (February 2021)
34 slides from The Cheesecake Factory's investor presentation, Feb 17, 2021
Slide 1: Investor Presentation February 17, 2021
Investor Presentation February 17, 2021
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: An Experiential Dining Category Leader
An Experiential Dining Category Leader 3 Culinary forward. First class hospitality. Concepts like no other.
Slide 4: 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 5: Initial Response to COVID-19
Initial Response to COVID - 19 5 • Pivoted very quickly to maximize sales, manage costs and preserve cash • Shifted to an off - premise only model in March – began reopening dining rooms in mid - May • Eliminated non - essential spending and suspended new unit development – resumed new unit developm
Slide 6: Managing Through COVID-19
Managing Through COVID - 19 6 • Have taken a deliberate approach in our dining room reopening strategy as the health and safety of our teams and guests remain our top priority. • Secured PPE; implemented additional safety protocols; and made a number of operational changes and technology upgrades, i
Slide 7: Managing Through COVID-19: Recent sales trends
Managing Through COVID - 19 7 Leveraging our large restaurant footprints, patio space, flexible seating layouts, and strong position in the off - premise channel, we have recaptured meaningful sales levels at Cheesecake Factory restaurants despite capacity restrictions: • For locations with reopened
Slide 8: Sustained Off-Premise Sales Strength
0% 5% 10% 15% Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 US Unemployment Rate Sustained Off - Premise Sales Strength 5 (AUV $ millions) ~$4 2019 Early COVID QTD Through February 16th ~$1.7 ~$4 ~$6
Slide 9: The Cheesecake Factory - Global Footprint
The Cheesecake Factory - Global Footprint 9 High quality, high profile locations worldwide Company - Owned: 206 Toronto International – Licensed: 27 Mexico City (4) Guadalajara Saudi Arabia (4) UAE (6) Kuwait (3) Qatar (3) Bahrain (1) Shanghai Hong Kong Beijing Monterrey Macau
Slide 10: The Cheesecake Factory - A Highly Differentiated Concept
Breadth of Menu & Innovation – 250 Items Made Fresh, From Scratch Ambiance, Service and Hospitality The Cheesecake Factory - A Highly Differentiated Concept Best - in - Class Operational Execution Integrated Bakery 10
Slide 11: 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 FY19 16% 11 FY20 21% Differentiated positioning has been a key sales driver during COVID - 19 Industry - Leading Dessert Sales
Slide 12: Performance During COVID-19 Reinforced Destination Status
Performance During COVID - 19 Has Reinforced That The Cheesecake Factory is a Destination • FY20 average sales per square foot adjusted for interior capacity restrictions related to the COVID - 19 pandemic was $1,127, a 14% increase over FY19. Reflecting the impact of COVID - 19 dining restrictions,
Slide 13: Cult Status & Strong Consumer Engagement
Cult Status & Strong Consumer Engagement 965K followers 5M+ fans 360K followers Millions of Viewers 13 Note: Statistics as of February 12, 2021
Slide 14: Broad Consumer Demographic and Appeal; Highest Unit Volumes
Broad Consumer Demographic and Appeal With a Moderate Average Check Highest Unit Volumes ($ in millions) Source: Latest pre - COVID - 19 SEC 10 - K filings and company presentations 14 Casual Dining $10.7 $8.3 $8.1 $5.5 $5.2 $5.0 $3.7 $3.6 $3.0 $2.9 Maggianos Yard House BJ's Texas Roadhouse Olive Ga
Slide 15: Leveraging Differentiation in the Off-Premise Channel
9% 12% 14% 16% 22% 79% 43% 2013 2017 2018 2019 1Q20 2Q20 3Q20 4Q20 Off - Premise Sales (% of Total Revenue) Leveraging This Differentiation in the Off - Premise Channel New Takeout Packaging 15 *Annualized unit volume equivalent based on total system average weekly sales ~$3.7 million per restaurant
Slide 16: Further Leaning in to Convenience
Further Leaning in to Convenience 16
Slide 17: On-Brand Marketing Campaigns
On - Brand Marketing Campaigns Leveraging Brand Identity as a Dessert Leader and Menu Breadth to Drive Sales 17 Attain Top of Mind Status
Slide 18: The Cheesecake Factory At Home
Capitalizing on the Power of the Brand The Cheesecake Factory At Home ® 18
Slide 19: Best-in-Class Operational Execution and Industry-Leading Retention
Best - in - Class Operational Execution and Industry - Leading Retention Average Tenure by Position 32 years 23 years 20 years 19 years 14 years 13 years Senior VP of Operations Regional Vice Presidents Area Directors of Operations Area Kitchen Operations Managers General Managers Executive Kitchen
Slide 20: CSR – Contributing to Staff, Communities and Environment
CSR – Contributing to the Well - Being of Our Staff, Local Communities and the Environment We All Share 20 Source: The Cheesecake Factory Incorporated 2019 Corporate Social Responsibility Report *Free from recombinant bovine somatotropin ( rbST ) or a recombinant bovine growth hormone ( rbGH ), ofte
Slide 21: Looking Ahead: Post-COVID Diversified growth drivers
Looking Ahead: Post - COVID - 19 Diversified growth drivers once the restaurant industry operating environment normalizes 21 21 *The following targets assume full capacity conditions are ultimately permitted by state and local jurisdictions
Slide 22: Returns-Focused Growth Opportunity for 300 Domestic Locations
The Cheesecake Factory – Returns - Focused Growth Opportunity for 300 Domestic Locations Over Time Average Unit Economics* ($ millions) Sales $10.7 Restaurant - Level Margin % ~18% Cash Capex Investment $8+ Cash - on - Cash Return 20% - 25% * Illustrative example of target returns for new restaurant
Slide 23: 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 24: North Italia: Filling White Space for Contemporary Italian
Filling White Space for an On - Trend, Contemporary Italian Offering 24 • 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 25: Fox Restaurant Concepts as Incubation Engine
Fox Restaurant Concepts Expected to Serve as an Incubation Engine Innovating Concepts of the Future 25 Potential Growth Boutique Brands
Slide 26: The Future CAKE: Anticipated Unit Growth Roadmap
The Future CAKE: Post - COVID - 19 Target Size (sq. ft.) 7,000 – 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% - 20% Top - Line Unit Growth Contribution ~3% ~2% ~2% Target Restaurant -
Slide 27: Track Record of Consistent Financial Performance
Track Record of Consistent Financial Performance 27
Slide 28: 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% (27.4)% (4.3)% (8.7)% (6.1)% 1.0% 2.0% (0.9)% (1.6)% 0.8% (0.4)% (2.2)% 0.5% 1.4% (24.0)% History of Outperforming the Industry 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* Knapp - Track Index Comparable Sales - H
Slide 29: Capital Allocation Detail
29 $0.84 $1.07 $1.42 $1.64 $1.88 $2.10 $1.97 $2.37 $2.83 $2.60 $2.51 $2.61 ($1.49) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Capital Allocation Detail $85 $163 $128 $120 $112 $107 $135 $94 $158 $100 $163 $119 ($47) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20
Slide 30: 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 31: Gheate
Gheate —_ PF
Slide 32: 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 33: 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 34: 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
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