Net cash provided by operating activities was $352.9 million in 2018 compared to $286.4 million in 2017. The
increase was primarily due to an increase in net income and non-cash items such as deferred income taxes, depreciation
and amortization expense and share-based compensation expense along with an increase in working capital. The increase
in net income was primarily driven by a decrease in income tax expense due to new tax legislation that was enacted in
late 2017. The increase in working capital was primarily due to an increase in deferred revenue related to gift cards and
an increase in accounts payable partially offset by an increase in prepaid income taxes.
Our operations have not required significant working capital and, like many restaurant companies, we can operate
with negative working capital. Sales are primarily for cash, and restaurant operations do not require significant
inventories or receivables. In addition, we receive trade credit for the purchase of food, beverages and supplies, thereby
reducing the need for incremental working capital to support growth.
Net cash used in investing activities was $214.8 million in 2019 compared to $158.1 million in 2018 and $178.2
million in 2017. The increase in 2019 was primarily due to an increase in capital expenditures from the relocation of
existing restaurants, the remodeling of our support center office and the continued opening of new restaurants.
We require capital principally for the development of new company restaurants, the refurbishment or relocation of
existing restaurants and the acquisition of franchise restaurants, if any. We either lease our restaurant site locations under
operating leases for periods of five to 30 years (including renewal periods) or purchase the land when appropriate. As of
December 31, 2019, 146 of the 514 company restaurants have been developed on land which we own.
The following table presents a summary of capital expenditures (in thousands):2019 2018 2017
New company restaurants ...................................... $ 99,957 $ 83,633 $ 104,819
Refurbishment of existing restaurants ............................ 63,548 58,125 49,344
Relocation of existing restaurants ............................... 25,131 6,100 4,807
Capital expenditures related to Support Center office ............... 25,704 8,122 2,658
Total capital expenditures ...................................... $ 214,340 $ 155,980 $ 161,628
Our future capital requirements will primarily depend on the number of new restaurants we open, the timing of
those openings and the restaurant prototypes developed in a given fiscal year. These requirements will include costs
directly related to opening new restaurants and relocating existing restaurants and may also include costs necessary to
ensure that our infrastructure is able to support a larger restaurant base. In 2020, we expect our capital expenditures to be
$210.0 million to $220.0 million, the majority of which will relate to planned restaurant openings, including at
least 30 company restaurant openings in 2020, the refurbishment of existing restaurants and the relocation of existing
company restaurants. This amount excludes any cash used for franchise acquisitions. We intend to satisfy our capital
requirements over the next 12 months with cash on hand, net cash provided by operating activities and, if needed, funds
available under our amended credit facility. For 2020, we anticipate net cash provided by operating activities will exceed
capital expenditures, which we currently plan to use to pay dividends, as approved by our Board of Directors and/or
repurchase common stock.
Net cash used in financing activities was $261.7 million in 2019 compared to $135.5 million in 2018. The increase
is primarily due to share repurchases of $139.8 million in 2019 as well as higher dividend payments in 2019. As a result
of the 53rd week, 2019 had five dividend payments versus four payments in 2018. These increases were partially offset
by the repayment of our revolving credit facility in Q2 2018.
Net cash used in financing activities was $135.5 million in 2018 compared to $70.2 million in 2017. The increase
is primarily due to the $50.0 million repayment of our revolving credit facility in Q2 2018 along with an increase in
dividends paid.
On May 31, 2019, our Board of Directors approved a stock repurchase program under which we may repurchase up
to $250.0 million of our common stock. This stock repurchase program has no expiration date and replaced a previous
stock repurchase program which was approved on May 22, 2014. All repurchases to date under our stock repurchase
programs have been made through open market transactions. The timing and the amount of any repurchases are
determined by management under parameters established by our Board of Directors, based on an evaluation of our stock
price, market conditions and other corporate considerations. During 2019, we repurchased 2,625,245 shares for $139.8
million and had $160.4 million remaining under our authorized stock repurchase program as of December 31, 2019.