Texas Roadhouse, Inc. Announces Fourth Quarter 2009 Results

Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 52 week periods ended December 29, 2009.

Results for the fourth quarter:

• Comparable restaurant sales decreased 2.6% at company restaurants and 1.2% at franchise restaurants;
• Five company restaurants opened and one franchise restaurant was acquired;
• Restaurant margins increased 237 basis points to 17.4%;
• Diluted earnings per share increased 40% to $0.12 from $0.09 in the prior year period.

Results for the full year:

• Comparable restaurant sales decreased 2.8% at company restaurants and 2.5% at franchise restaurants;
• 17 company restaurants and 3 franchise restaurants opened and one franchise restaurant was acquired;
• Restaurant margins increased 71 basis points to 17.7%;
• Diluted earnings per share increased 29% to $0.67 from $0.52 in the prior year period.

G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, "Sales trends continued to improve throughout the fourth quarter and, combined with a favorable commodities environment, we were able to generate our third consecutive quarter of year-over-year restaurant margin improvement. This drove profitability for the period and capped off a year where earnings per diluted share increased 29%, solidly exceeding our expectations. Looking to 2010 and beyond, we continue to believe Texas Roadhouse is well-positioned to gain market share based on our ongoing commitment to the basics of providing Legendary Food and Legendary Service. In addition, we remain committed to maintaining a conservative balance sheet.”

Outlook for 2010

The Company reported that comparable restaurant sales for the first seven weeks of fiscal 2010 decreased approximately 1.2% compared to the same period a year ago.

The Company estimates 2010 diluted earnings per share growth will be 5% to 10% compared to 2009. This estimate is based, in part, on the following assumptions:

• Comparable restaurant sales of negative 2% to flat;
• Approximately 15 company restaurant openings;
• Food cost deflation of approximately 2.5% to 3.0%; and
• Total capital expenditures of between $50-55 million.

Extension of Executive Officer Employment Contracts

On February 18, 2010, the Company amended the employment agreements of W. Kent Taylor, Chairman; G.J. Hart, President and Chief Executive Officer; Steven L. Ortiz, Chief Operating Officer; Scott M. Colosi, Chief Financial Officer; and Sheila C. Brown, General Counsel and Corporate Secretary. The amendments extended the term of each officer’s employment from January 7, 2011 until January 7, 2012 during which time each officer’s annual base salary and target bonuses will remain unchanged.

James F. Parker, Chair of the Compensation Committee of the Board of Directors commented, "The Board is delighted that the executive officers have agreed to extend the terms of their contracts for another year. This management team has functioned extremely well together for many years, and the Board believes the Company will be well-served by having the team remain together. Additionally, by maintaining salaries and bonuses at current levels, the Board of Directors and officers have shown a commitment to shareholders through sound fiscal practices.”

Conference Call

The Company is hosting a conference call today, February 22, 2010, at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 856-1965 or (719) 325-4793 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (888) 203-1112 or (719) 457-0820 for international calls, and use 7946126 as the pass code.

There will be a simultaneous Web cast conducted at www.texasroadhouse.com.

About the Company

Texas Roadhouse is a casual dining concept that first opened in 1993 and today operates over 300 restaurants system-wide in 46 states. For more information, please visit the Company’s Web site at www.texasroadhouse.com.

Forward-looking Statements

Certain statements in this release that are not historical facts, including, without limitation, those relating to our anticipated financial performance, are forward-looking statements that involve risks and uncertainties. Such statements are based upon the current beliefs and expectations of the management of the Company. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, the actual number of restaurants opening, the sales at these and our other company and franchise restaurants, changes in restaurant operating costs, our ability to acquire franchise restaurants, our ability to integrate the franchise restaurants we acquire or other concepts we develop, strength of consumer spending and other factors disclosed from time to time in the Company's filings with the U.S. Securities and Exchange Commission. Investors should take such risks into account when making investment decisions. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statements.

(1) Comparable restaurant sales growth includes sales from restaurants open 18 months as of the beginning of the measurement period.

(2) Average unit volume includes sales from restaurants open six months as of the beginning of the measurement period. Q4 2008 and 2008 YTD were adjusted to include 13 and 52 weeks, respectively. For comparative purposes, average unit volumes for Q4 2008 and 2008 YTD were adjusted to reflect restaurant sales of any acquired franchise restaurants as part of Company-owned restaurants average unit volume and were excluded from franchise-owned restaurants average unit volume.

(3) Restaurant margins represent restaurant sales less restaurant operating costs (as a percentage of restaurant sales).

Amounts may not foot due to rounding.