The Cheesecake Factory Incorporated · NASDAQ:CAKE
The Cheesecake Factory — Cheesecake Factory — Investor Presentation (October 2020)
33 slides from The Cheesecake Factory's investor presentation, Oct 29, 2020
Slide 1: Investor Presentation October 29, 2020
Investor Presentation October 29, 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: Initial Response to COVID-19
Initial Response to COVID - 19 3 • 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 4: Managing Through COVID-19
Managing Through COVID - 19 4 • 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, in
Slide 5: Sustained Off-Premise Sales Strength
Sustained Off - Premise Sales Strength 5 ($ millions) ~$4 2019 Early COVID Off-Prem QTD Through October 27th Off - Premise Only $1.7 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
Slide 6: 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 7: The Cheesecake Factory - Global Footprint
The Cheesecake Factory - Global Footprint 7 High quality, high profile locations worldwide Company - Owned: 205 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 8: 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 8
Slide 9: Breadth of Menu & Innovation are Key Competitive Advantages
Breadth of Menu & Innovation are Key Competitive Advantages 250 Menu Items - Made Fresh, From Scratch 9
Slide 10: Dining With Us Is an Experience
Dining With Us Is an Experience Ambiance, Service and Hospitality Drive Sales 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 Industry - Leading Dessert Sales FY19 16% 11
Slide 12: Cult Status & Strong Consumer Engagement
Cult Status & Strong Consumer Engagement 940K followers 5M+ fans 360K followers Millions of Viewers 12 Note: Statistics as of October 29, 2020 The Cheesecake Factory’s Latest Cheesecake Flavor is Stuffed With Snickers It’s also made with BROWNIE CRUST By Megan Schaltegger I’m sure you’ve heard once
Slide 13: 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 13 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
Slide 14: Leveraging Differentiation in the Off-Premise Channel
9% 12% 14% 16% 22% 79% 45% 2013 2017 2018 2019 1Q20 2Q20 3Q20 Off - Premise Sales (% of Total Revenue) Leveraging This Differentiation in the Off - Premise Channel New Takeout Packaging 14 *Annualized unit volume equivalent based on average weekly sales ~$3.7 million per restaurant* Majority of dini
Slide 15: Further Leaning in to Convenience
Further Leaning in to Convenience 15
Slide 16: On-Brand Marketing Campaigns
On - Brand Marketing Campaigns Leveraging Brand Identity as a Dessert Leader and Menu Breadth to Drive Sales 16 Attain Top of Mind Status
Slide 17: The Cheesecake Factory At Home
Capitalizing on the Power of the Brand The Cheesecake Factory At Home ® 17
Slide 18: Best-in-Class Operational Execution and Industry-Leading Retention
Best - in - Class Operational Execution and Industry - Leading Retention Average Tenure by Position 31 years 22 years 19 years 18 years 13 years 13 years Senior VP of Operations Regional Vice Presidents Area Directors of Operations Area Kitchen Operations Managers General Managers Executive Kitchen
Slide 19: Looking Ahead: Post-COVID
Looking Ahead: Post - COVID - 19 Diversified growth drivers once the restaurant industry operating environment normalizes 19 19 *The following targets assume full capacity conditions are ultimately permitted by state and local jurisdictions
Slide 20: An Experiential Dining Category Leader
An Experiential Dining Category Leader 20 Culinary forward. First class hospitality. Concepts like no other.
Slide 21: Returns-Focused Growth Opportunity for The Cheesecake Factory
The Cheesecake Factory – Returns - Focused Growth Opportunity for 300 Domestic & 8 - 10 Canadian Locations Over Time Average Unit Economics* ($ millions) Sales $10.7 Restaurant - Level Margin % ~18% Cash Capex Investment $8+ Cash - on - Cash Return 20% - 25% * Illustrative example of target returns
Slide 22: 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 23: North Italia: Filling White Space for Contemporary Italian
Filling White Space for an On - Trend, Contemporary Italian Offering 23 • 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 24: Fox Restaurant Concepts as an Incubation Engine
Fox Restaurant Concepts Expected to Serve as an Incubation Engine Innovating Concepts of the Future 24 Potential Growth Boutique Brands
Slide 25: The Future CAKE: Post-COVID
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 26: Track Record of Consistent Financial Performance
Track Record of Consistent Financial Performance 26
Slide 27: 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 28: Capital Allocation Detail
28 $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 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
Grate —_ PF
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
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