The Cheesecake Factory Reports Results for Third Quarter of Fiscal 2008

CALABASAS HILLS, Calif.--(Business Wire)--
The Cheesecake Factory Incorporated (NASDAQ:CAKE) today reported
financial results for the third quarter of fiscal 2008, which ended on
September 30, 2008.

Total revenues increased approximately 8% to $405.1 million in the
third quarter of fiscal 2008 from $375.5 million in the prior year
third quarter. Net income and diluted net income per share were $11.8
million and $0.19, respectively.

Operating Results

Comparable restaurant sales decreased approximately 4.8% in the
third quarter of fiscal 2008 from the third quarter of the prior year,
in-line with the Company's previously announced expectations.

By concept, comparable restaurant sales decreased an estimated
4.7% and 5.1% at The Cheesecake Factory and Grand Lux Cafe,
respectively, in the third quarter of fiscal 2008 from the third
quarter of the prior year.

"Guest traffic remained stable during the third quarter relative
to the second quarter despite a significantly more difficult period
for most of the restaurant industry stemming from high viewership
events taking place during the quarter--including the Olympics,
political conventions and presidential debate--coupled with the
hurricanes and the impact on consumer sentiment from developments in
the global financial markets," said David Overton, Chairman and CEO.
"Our earnings were also pressured by spikes in commodity and utility
costs, which have begun to moderate as food and energy costs come off
of the highest levels we have seen this year."

"With a strong balance sheet, significant amount of free cash flow
and concepts that are both relevant and appealing to guests, we are
well positioned to weather the challenging operating environment. We
will continue to manage our business for the long-term, with a
near-term focus on stimulating sales and controlling costs," concluded
Overton.

Stock Repurchases

The Company repurchased approximately 4.3 million shares of its
common stock during the third quarter of fiscal 2008 at a total cost
of approximately $66 million, as part of its previously announced
fiscal 2008 business plan, which included planned share repurchases of
between $150 million and $200 million. The Company temporarily
suspended its stock repurchase authorization and terminated its stock
repurchase plan on October 16, 2008. In aggregate, the Company
repurchased 9.6 million shares of its common stock at a total cost of
approximately $172 million in fiscal 2008.

Targeted New Restaurant Openings

The Company anticipates opening two Cheesecake Factory restaurants
in the fourth quarter of fiscal 2008, one of which opens today in
Towson, Maryland. In total, the Company will open seven new
restaurants in fiscal 2008, in-line with its expectations.

Conference Call and Webcast

A conference call to review the results for the third quarter of
fiscal 2008 will be held on Thursday, October 23, 2008 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 November 22, 2008. To listen to the conference call,
please go to the Company's website at 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 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
and continues to define it today with the two highest productivity
concepts in the industry. The Company operates 144 restaurants
throughout the U.S. under The Cheesecake Factory(R) name with an
extensive menu of more than 200 items and fiscal 2007 average annual
unit sales of approximately $10.4 million. Grand Lux Cafe(R), the
Company's second concept, has 13 units in operation across the U.S.
offering a broad menu of more than 150 items and average annual unit
sales of approximately $12.7 million in fiscal 2007. The Company also
operates one unit of its newest concept, RockSugar Pan Asian
Kitchen(TM), and two bakery production facilities in Calabasas Hills,
CA and Rocky Mount, NC that produce over 60 varieties of quality
cheesecakes and other baked products. Additionally, the Company
licenses two bakery cafe outlets to another foodservice operator under
The Cheesecake Factory Bakery Cafe(R) mark. For more information,
please visit thecheesecakefactory.com.

Safe Harbor Statement

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements in this release are generally identified by
words, such as "believes," "anticipates," "plans," "expects," "will,"
and "would," and similar expressions that are intended to identify
forward-looking statements. Forward-looking 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.
Investors are cautioned that forward-looking statements are not
guarantees of future performance and that undue reliance should not be
placed on such statements. In particular, forward-looking statements
regarding the Company's restaurant sales trends are subject to risks
and uncertainties due to macro national and regional economic and
credit market conditions, rising unemployment, public safety
conditions, adverse weather and other factors outside of the Company's
control that impact consumer confidence and spending . Forward-looking
statements regarding the number and timing of the Company's planned
new restaurant openings are subject to additional risks and
uncertainties due to conditions discussed above and other factors
outside of the Company's control, including factors that are under the
control of government agencies, landlords and others. Forward-looking
statements speak only as of the dates on which they were made. 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 the 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 filings with the Securities and
Exchange Commission. These filings are available on a website
maintained by the Securities and Exchange Commission at www.sec.gov.

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The Cheesecake Factory Incorporated and Subsidiaries
Consolidated Financial Statements
(unaudited; in thousands, except per share and statistical data)

Consolidated Statements of Operations
----------------------------------------------------------------------

13 Weeks Ended 13 Weeks Ended
September 30, 2008 October 2, 2007
------------------ ------------------
Percent Percent
of of
Amounts Revenue Amounts Revenue
--------- -------- --------- --------
Revenues $405,116 100.0% $375,536 100.0%
Costs and expenses:
Cost of sales 104,177 25.7% 92,849 24.7%
Labor expenses 134,724 33.2% 120,798 32.2%
Other operating costs and
expenses 103,664 25.6% 89,551 23.9%
General and administrative
expenses 21,360 5.3% 19,993 5.3%
Depreciation and amortization
expenses 18,055 4.5% 15,844 4.2%
Preopening costs 2,113 0.5% 8,668 2.3%
------------------ ------------------
Total costs and expenses 384,093 94.8% 347,703 92.6%
------------------ ------------------
Income from operations 21,023 5.2% 27,833 7.4%
Interest expense (3,880) (1.0)% (2,988) (0.8)%
Interest income 410 0.1% 1,151 0.3%
Other (expense)/income, net (142) 0.0% 277 0.1%
------------------ ------------------
Income before income taxes 17,411 4.3% 26,273 7.0%
Income tax provision 5,628 1.4% 7,749 2.1%
------------------ ------------------
Net income $ 11,783 2.9% $ 18,524 4.9%
================== ==================

Basic net income per share $ 0.19 $ 0.26
========= =========
Basic weighted average shares
outstanding 62,339 71,395
========= =========

Diluted net income per share $ 0.19 $ 0.26
========= =========
Diluted weighted average shares
outstanding 62,490 72,336
========= =========

Selected Segment Information
--------------------------------
Revenues:
Restaurants $390,849 $362,435
Bakery 27,457 26,096
Intercompany bakery sales (13,190) (12,995)
--------- ---------
$405,116 $375,536
========= =========

Income from operations:
Restaurants $ 40,069 $ 45,105
Bakery 2,744 3,897
Corporate (21,790) (21,169)
--------- ---------
$ 21,023 $ 27,833
========= =========

39 Weeks Ended 39 Weeks Ended
September 30, 2008 October 2, 2007
-------------------- --------------------
Percent Percent
of of
Amounts Revenue Amounts Revenue
----------- -------- ----------- --------
Revenues $1,206,053 100.0% $1,105,286 100.0%
Costs and expenses:
Cost of sales 309,456 25.7% 274,692 24.9%
Labor expenses 400,439 33.2% 360,334 32.6%
Other operating costs and
expenses 295,805 24.5% 259,544 23.5%
General and administrative
expenses 61,914 5.1% 59,702 5.4%
Depreciation and
amortization expenses 54,509 4.5% 46,867 4.2%
Preopening costs 9,218 0.8% 15,476 1.4%
-------------------- --------------------
Total costs and
expenses 1,131,341 93.8% 1,016,615 92.0%
-------------------- --------------------
Income from operations 74,712 6.2% 88,671 8.0%
Interest expense (11,499) (1.0)% (7,093) (0.7)%
Interest income 1,528 0.1% 4,181 0.4%
Other (expense)/income, net (256) 0.0% 816 0.1%
-------------------- --------------------
Income before income taxes 64,485 5.3% 86,575 7.8%
Income tax provision 19,272 1.6% 25,937 2.3%
-------------------- --------------------
Net income $ 45,213 3.7% $ 60,638 5.5%
==================== ====================

Basic net income per share $ 0.69 $ 0.83
=========== ===========
Basic weighted average shares
outstanding 65,308 73,401
=========== ===========

Diluted net income per share $ 0.69 $ 0.81
=========== ===========
Diluted weighted average
shares outstanding 65,591 74,483
=========== ===========

Selected Segment Information
-----------------------------
Revenues:
Restaurants $1,162,137 $1,064,797
Bakery 81,276 76,536
Intercompany bakery sales (37,360) (36,047)
----------- -----------
$1,206,053 $1,105,286
=========== ===========

Income from operations:
Restaurants $ 128,644 $ 140,464
Bakery 8,790 11,700
Corporate (62,722) (63,493)
----------- -----------
$ 74,712 $ 88,671
=========== ===========

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Selected Consolidated Balance Sheet Information
----------------------------------------------------------------------

September 30, 2008 January 1, 2008
------------------------------------------------------ ---------------
Cash and cash equivalents $ 55,011 $ 36,867
Investments and marketable
securities 949 12,362
Total assets 1,092,876 1,145,753
Long-term debt 275,000 175,000
Total liabilities 634,451 582,827
Stockholders' equity 458,425 562,926

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Supplemental Information
----------------------------------------------------------------------

13 Weeks Ended 13 Weeks Ended
September 30, 2008 October 2, 2007
----------------------------------------------------- ---------------
Comparable restaurant sales
percentage change (1) -4.8% 1.2%
Restaurants opened during period 0 7
Restaurants open at period-end (2) 157 142
Restaurant operating weeks (2) 2,041 1,780

39 Weeks Ended 39 Weeks Ended
September 30, 2008 October 2, 2007
------------------------------------------------------ ---------------
Comparable restaurant sales
percentage change (1) -3.7% 0.9%
Restaurants opened during period 5 10
Restaurants open at period-end (2) 157 142
Restaurant operating weeks (2) 6,034 5,240

(1) Includes The Cheesecake Factory and Grand Lux Cafe
(2) Includes The Cheesecake Factory, Grand Lux Cafe and RockSugar Pan
Asian Kitchen
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The Cheesecake Factory Incorporated
Jill Peters
(818) 871-8342
jpeters@thecheesecakefactory.com

Copyright Business Wire 2008