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Jul 31, 2019

Bloomin’ Brands Announces 2019 Q2 Diluted EPS of $0.32 and Adjusted Diluted EPS of $0.36

Q2 Comparable Restaurant Sales Growth of 1.3% at Outback Steakhouse

Q2 GAAP Operating Margin Expansion of 110 bps and 80 bps on a Comparable Adjusted Basis

Reaffirms Full-Year 2019 Guidance, Including Adjusted Diluted EPS, U.S. Comparable Sales, and Margins

TAMPA, Fla.--(BUSINESS WIRE)--Jul. 31, 2019-- Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for the second quarter 2019 (“Q2 2019”) compared to the second quarter 2018 (“Q2 2018”).

Highlights for Q2 2019 include the following:

  • Comparable restaurant sales increased 1.3% at U.S. Outback Steakhouse
  • Combined U.S. comparable restaurant sales increased 0.6%
  • Comparable restaurant sales increased 3.5% for Outback Steakhouse in Brazil

Diluted EPS and Adjusted Diluted EPS

Our Q2 2019 results include the impact of the new lease accounting standard adopted in Q1 2019. Among its impacts, we no longer recognize the benefit of deferred gains on sale-leaseback transactions, resulting in an increase to Other restaurant operating expense which represents a two cent reduction in earnings per share. The following table includes both a reported and a comparable basis that adjusts for this lease accounting change.

The following table reconciles Diluted earnings per share to Adjusted diluted earnings per share for the periods as indicated below.

 

Q2

 

 

 

2019

 

2018

 

CHANGE

Diluted earnings per share

$

 

0.32

 

 

$

 

0.28

 

 

$

 

0.04

 

Adjustments

 

0.04

 

 

 

0.10

 

 

 

(0.06

)

Adjusted diluted earnings per share

$

 

0.36

 

 

$

 

0.38

 

 

$

 

(0.02

)

Remove new lease accounting standard impact (1)

 

 

 

(0.02

)

 

 

0.02

 

Adjusted diluted earnings per share on a comparable basis (1)(2)

$

 

0.36

 

 

$

 

0.36

 

 

$

 

 

 

 

 

 

 

 

______________
See Non-GAAP Measures later in this release.

(1)

In Q2 2018 both GAAP and adjusted diluted earnings per share include the benefit of deferred gains on sale-leaseback transactions of approximately $0.02. For comparability, we have presented adjusted diluted earnings per share excluding this benefit that we no longer recognize in 2019 as a result of the adoption of the new lease accounting standard.

(2)

The effective income tax rate in Q2 2019 and Q2 2018 includes $1.0 million and $6.2 million, respectively, of tax benefit driven primarily by exercises of certain legacy stock options. These exercises benefited Q2 2019 and Q2 2018 diluted earnings per share by approximately $0.01 and $0.07, respectively.

CEO Comments

“Q2 was a good quarter for Bloomin’ Brands,” said David Deno, CEO. “We were particularly pleased with the healthy sales growth, reduction in discounting, and corresponding strong operating profit and margin expansion. Our positive momentum continued as we took additional market share and at Outback, sales exceeded the industry for the 10th consecutive quarter. In addition, we continue to capitalize on our growth opportunities and expect to achieve our comparable adjusted EPS growth range of 10% to 15% for the year.”

Second Quarter Financial Results

As described above, our Q2 2019 results include the impact from adopting the new lease accounting standard which reduces operating margins by 30 basis points. The following table includes both a reported and a comparable basis that adjusts for the lease accounting change:

 

AS REPORTED

 

COMPARABLE BASIS (1)

(dollars in millions)

Q2 2019

 

Q2 2018

 

CHANGE

 

Q2 2018

 

CHANGE

Total revenues

$

 

1,021.9

 

 

$

 

1,031.8

 

 

(1.0

)%

 

$

 

1,031.8

 

 

(1.0

)%

 

 

 

 

 

 

 

 

 

 

GAAP restaurant-level operating margin

 

15.0

%

 

 

15.0

%

 

%

 

 

14.7

%

 

0.3

%

Adjusted restaurant-level operating margin (2)

 

15.0

%

 

 

14.9

%

 

0.1

%

 

 

14.6

%

 

0.4

%

 

 

 

 

 

 

 

 

 

 

GAAP operating income margin

 

4.3

%

 

 

3.2

%

 

1.1

%

 

 

2.9

%

 

1.4

%

Adjusted operating income margin (2)

 

4.6

%

 

 

4.1

%

 

0.5

%

 

 

3.8

%

 

0.8

%

___________________

(1)

To improve comparability in this table, we removed the benefit of deferred gains on sale-leaseback transactions from our Q2 2018 results.

(2)

See Non-GAAP Measures later in this release.

  • The decrease in total revenues was primarily due to foreign currency translation and domestic refranchising, partially offset by higher comparable restaurant sales and the net impact of restaurant openings and closures.
  • The increase in reported GAAP and Adjusted operating income margin was primarily due to higher comparable restaurant sales and the impact of certain cost savings initiatives. These increases were partially offset by labor and commodity inflation, and the impact from adopting the new lease accounting standard as described above.

Second Quarter Comparable Restaurant Sales

THIRTEEN WEEKS ENDED JUNE 30, 2019

 

COMPANY-OWNED

Comparable restaurant sales (stores open 18 months or more):

 

 

U.S.

 

 

Outback Steakhouse

 

1.3

%

Carrabba’s Italian Grill

 

(1.6

)%

Bonefish Grill

 

0.1

%

Fleming’s Prime Steakhouse & Wine Bar

 

1.6

%

Combined U.S.

 

0.6

%

 

 

 

International

 

 

Outback Steakhouse - Brazil

 

3.5

%

Dividend Declaration and Share Repurchases

On July 23, 2019, our Board of Directors declared a quarterly cash dividend of $0.10 per share to be paid on August 21, 2019 to all stockholders of record as of the close of business on August 12, 2019.

On February 12, 2019, our Board of Directors approved a $150.0 million share repurchase program. As of July 31, 2019, we repurchased 5.5 million shares for a total of $107.0 million and had $43.0 million remaining under this authorization. This authorization will expire on August 12, 2020.

Fiscal 2019 Financial Outlook

We are reaffirming all aspects of our full-year financial guidance as previously communicated in our February 14, 2019 earnings release.

Conference Call

The Company will host a conference call today, July 31st at 9:00 AM EDT. The conference call can be accessed live over the telephone by dialing (877) 407-9039 or (201) 689-8470 for international participants. A replay will be available beginning two hours after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers. The replay will be available until Wednesday, August 14, 2019. The conference ID for the live call and replay is 13692414. The call will also be webcast live from the Company’s website at http://www.bloominbrands.com under the Investors section. A replay of this webcast will be available on the Company’s website after the call.

Non-GAAP Measures

In addition to the results provided in accordance with GAAP, this press release and related tables include certain non-GAAP measures, which present operating results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with GAAP and include the following: (i) Adjusted restaurant-level operating margin, (ii) Adjusted income from operations and the corresponding margin, (iii) Adjusted net income, (iv) Adjusted diluted earnings per share, (v) Adjusted segment restaurant-level operating margin and (vi) Adjusted segment income from operations and the corresponding margin. For purposes of improving comparability, we have also presented Adjusted diluted earnings per share and Adjusted operating income margin excluding the impact of the new lease accounting standard in the table above.

We believe that our use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies. However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur. We believe that the disclosure of these non-GAAP measures is useful to investors as they form part of the basis for how our management team and Board of Directors evaluate our operating performance, allocate resources and administer employee incentive plans.

These non-GAAP financial measures are not intended to replace GAAP financial measures, and they are not necessarily standardized or comparable to similarly titled measures used by other companies. We maintain internal guidelines with respect to the types of adjustments we include in our non-GAAP measures. These guidelines endeavor to differentiate between types of gains and expenses that are reflective of our core operations in a period, and those that may vary from period to period without correlation to our core performance in that period. However, implementation of these guidelines necessarily involves the application of judgment, and the treatment of any items not directly addressed by, or changes to, our guidelines will be considered by our disclosure committee. You should refer to the reconciliations of non-GAAP measures in tables four, five, and six included later in this release for descriptions of the actual adjustments made in the current period and the corresponding prior period.

About Bloomin’ Brands, Inc.

Bloomin’ Brands, Inc. is one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. The Company has four founder-inspired brands: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. The Company operates more than 1,450 restaurants in 48 states, Puerto Rico, Guam and 20 countries, some of which are franchise locations. For more information, please visit www.bloominbrands.com.

Forward-Looking Statements

Certain statements contained herein, including statements under the headings “CEO Comments” and “Fiscal 2019 Financial Outlook” are not based on historical fact and are “forward-looking statements” within the meaning of applicable securities laws. Generally, these statements can be identified by the use of words such as “guidance,” “believes,” “estimates,” “anticipates,” “expects,” “on track,” “feels,” “forecasts,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” “should,” “could,” “would” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the Company’s forward-looking statements. These risks and uncertainties include, but are not limited to: consumer reaction to public health and food safety issues; competition; increases in labor costs; government actions and policies; increases in unemployment rates and taxes; local, regional, national and international economic conditions; consumer confidence and spending patterns; price and availability of commodities; the effects of changes in tax laws; challenges associated with our remodeling, relocation and expansion plans; interruption or breach of our systems or loss of consumer or employee information; political, social and legal conditions in international markets and their effects on foreign operations and foreign currency exchange rates; our ability to preserve the value of and grow our brands; the seasonality of the Company’s business; weather, acts of God and other disasters; changes in patterns of consumer traffic, consumer tastes and dietary habits; the effectiveness of our strategic actions; the cost and availability of credit; interest rate changes; compliance with debt covenants and the Company’s ability to make debt payments and planned investments; and our ability to continue to pay dividends and repurchase shares of our common stock. Further information on potential factors that could affect the financial results of the Company and its forward-looking statements is included in its most recent Form 10-K and subsequent filings with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statement, except as may be required by law. These forward-looking statements speak only as of the date of this release. All forward-looking statements are qualified in their entirety by this cautionary statement.

Note: Numerical figures included in this release have been subject to rounding adjustments.

TABLE ONE

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(in thousands, except per share data)

JUNE 30, 2019

 

JULY 1, 2018

 

JUNE 30, 2019

 

JULY 1, 2018

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

1,005,687

 

 

$

1,015,484

 

 

$

2,117,329

 

 

$

2,114,487

 

Franchise and other revenues

16,243

 

 

16,330

 

 

32,732

 

 

33,792

 

Total revenues

1,021,930

 

 

1,031,814

 

 

2,150,061

 

 

2,148,279

 

Costs and expenses

 

 

 

 

 

 

 

Cost of sales

312,679

 

 

322,790

 

 

664,790

 

 

674,922

 

Labor and other related

301,213

 

 

301,921

 

 

620,228

 

 

612,983

 

Other restaurant operating

240,895

 

 

238,379

 

 

491,749

 

 

491,724

 

Depreciation and amortization

49,788

 

 

50,782

 

 

99,270

 

 

100,902

 

General and administrative

71,955

 

 

76,129

 

 

142,544

 

 

144,825

 

Provision for impaired assets and restaurant closings

1,940

 

 

8,889

 

 

5,526

 

 

11,628

 

Total costs and expenses

978,470

 

 

998,890

 

 

2,024,107

 

 

2,036,984

 

Income from operations

43,460

 

 

32,924

 

 

125,954

 

 

111,295

 

Other income (expense), net

12

 

 

(6

)

 

(156

)

 

(5

)

Interest expense, net

(12,448

)

 

(11,319

)

 

(23,629

)

 

(21,629

)

Income before provision (benefit) for income taxes

31,024

 

 

21,599

 

 

102,169

 

 

89,661

 

Provision (benefit) for income taxes

1,215

 

 

(5,124

)

 

6,711

 

 

(3,199

)

Net income

29,809

 

 

26,723

 

 

95,458

 

 

92,860

 

Less: net income attributable to noncontrolling interests

788

 

 

2

 

 

2,137

 

 

741

 

Net income attributable to Bloomin’ Brands

$

29,021

 

 

$

26,721

 

 

$

93,321

 

 

$

92,119

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

0.32

 

 

$

0.29

 

 

$

1.03

 

 

$

1.00

 

Diluted

$

0.32

 

 

$

0.28

 

 

$

1.02

 

 

$

0.97

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

90,194

 

 

92,120

 

 

90,805

 

 

92,194

 

Diluted

90,953

 

 

94,361

 

 

91,807

 

 

95,072

 

TABLE TWO

BLOOMIN’ BRANDS, INC.

SEGMENT RESULTS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

U.S. Segment

JUNE 30, 2019

 

JULY 1, 2018

 

JUNE 30, 2019

 

JULY 1, 2018

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

 

900,616

 

 

$

 

908,937

 

 

$

 

1,901,429

 

 

$

 

1,893,281

 

Franchise and other revenues

 

13,603

 

 

 

13,418

 

 

 

27,297

 

 

 

27,781

 

Total revenues

$

 

914,219

 

 

$

 

922,355

 

 

$

 

1,928,726

 

 

$

 

1,921,062

 

Restaurant-level operating margin

 

14.5

%

 

 

14.5

%

 

 

15.6

%

 

 

15.4

%

Income from operations

$

 

78,814

 

 

$

 

76,913

 

 

$

 

191,849

 

 

$

 

186,047

 

Operating income margin

 

8.6

%

 

 

8.3

%

 

 

9.9

%

 

 

9.7

%

International Segment

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

 

105,071

 

 

$

 

106,547

 

 

$

 

215,900

 

 

$

 

221,206

 

Franchise and other revenues

 

2,640

 

 

 

2,912

 

 

 

5,435

 

 

 

6,011

 

Total revenues

$

 

107,711

 

 

$

 

109,459

 

 

$

 

221,335

 

 

$

 

227,217

 

Restaurant-level operating margin

 

18.4

%

 

 

17.7

%

 

 

20.4

%

 

 

18.6

%

Income (loss) from operations

$

 

6,909

 

 

$

 

(2,049

)

 

$

 

20,629

 

 

$

 

6,276

 

Operating income (loss) margin

 

6.4

%

 

 

(1.9

)%

 

 

9.3

%

 

 

2.8

%

Reconciliation of Segment Income (Loss) from
Operations to Consolidated Income from Operations

 

 

 

 

 

 

 

Segment income (loss) from operations

 

 

 

 

 

 

 

U.S.

$

 

78,814

 

 

$

 

76,913

 

 

$

 

191,849

 

 

$

 

186,047

 

International

 

6,909

 

 

 

(2,049

)

 

 

20,629

 

 

 

6,276

 

Total segment income from operations

 

85,723

 

 

 

74,864

 

 

 

212,478

 

 

 

192,323

 

Unallocated corporate operating expense

 

(42,263

)

 

 

(41,940

)

 

 

(86,524

)

 

 

(81,028

)

Total income from operations

$

 

43,460

 

 

$

 

32,924

 

 

$

 

125,954

 

 

$

 

111,295

 

TABLE THREE

BLOOMIN’ BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

(UNAUDITED)

(in thousands)

JUNE 30, 2019

 

DECEMBER 30, 2018

Cash and cash equivalents (excluding restricted cash)

$

 

 

64,653

 

 

$

 

 

71,823

 

Net working capital (deficit) (1)

$

 

 

(552,685

)

 

$

 

 

(455,556

)

Total assets (2)

$

 

 

3,511,726

 

 

$

 

 

2,464,774

 

Total debt, net

$

 

 

1,148,895

 

 

$

 

 

1,094,775

 

Total stockholders’ equity (3)

$

 

 

158,593

 

 

$

 

 

54,817

 

Common stock outstanding (3)

 

86,827

 

 

 

91,272

 

_________________

(1)

During the twenty-six weeks ended June 30, 2019 net working capital (deficit) was negatively impacted by the recognition of approximately $170 million of current lease liabilities as a result of the adoption of the new lease accounting standard. We have, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies). We operate successfully with negative working capital because cash collected on Restaurant sales is typically received before payment is due on our current liabilities, and our inventory turnover rates require relatively low investment in inventories. Additionally, ongoing cash flows from restaurant operations and gift card sales are used to service debt obligations and to make capital expenditures.

(2)

The change in total assets during the twenty-six weeks ended June 30, 2019 includes the addition of $1.3 billion of lease right-of-use assets as a result of the adoption of the new lease accounting standard.

(3)

During the twenty-six weeks ended June 30, 2019, we repurchased 5.5 million shares of our outstanding common stock and issued 0.6 million shares of our common stock through the exercise of stock options.

TABLE FOUR

BLOOMIN’ BRANDS, INC.

RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATION

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

THIRTEEN WEEKS ENDED

 

(UNFAVORABLE) FAVORABLE CHANGE IN ADJUSTED

QUARTER TO DATE

 

JUNE 30, 2019

 

JULY 1, 2018

 

 

AS REPORTED

 

AS REPORTED

 

COMPARABLE ADJUSTED BASIS (2)

 

Consolidated:

GAAP

 

ADJUSTED

 

GAAP

 

ADJUSTED (1)

 

 

AS REPORTED

 

COMPARABLE BASIS (2)

Restaurant sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

31.1

%

 

31.1

%

 

31.8

%

 

31.8

%

 

31.8

%

 

0.7

%

 

0.7

%

Labor and other related

30.0

%

 

30.0

%

 

29.7

%

 

29.7

%

 

29.7

%

 

(0.3

)%

 

(0.3

)%

Other restaurant operating

24.0

%

 

23.9

%

 

23.5

%

 

23.6

%

 

23.9

%

 

(0.3

)%

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant-level operating margin (3)

15.0

%

 

15.0

%

 

15.0

%

 

14.9

%

 

14.6

%

 

0.1

%

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segments - Restaurant-level operating margin (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

14.5

%

 

14.5

%

 

14.5

%

 

14.4

%

 

 

 

0.1

%

 

 

International

18.4

%

 

18.4

%

 

17.7

%

 

17.1

%

 

 

 

1.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TWENTY-SIX WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

 

(UNFAVORABLE) FAVORABLE CHANGE IN ADJUSTED
YEAR TO DATE

 

JUNE 30, 2019

 

JULY 1, 2018

 

 

AS REPORTED

 

AS REPORTED

 

COMPARABLE ADJUSTED BASIS (2)

 

Consolidated:

GAAP

 

ADJUSTED

 

GAAP

 

ADJUSTED (1)

 

 

AS REPORTED

 

COMPARABLE BASIS (2)

Restaurant sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

31.4

%

 

31.4

%

 

31.9

%

 

31.9

%

 

31.9

%

 

0.5

%

 

0.5

%

Labor and other related

29.3

%

 

29.3

%

 

29.0

%

 

29.0

%

 

29.0

%

 

(0.3

)%

 

(0.3

)%

Other restaurant operating

23.2

%

 

23.2

%

 

23.3

%

 

23.4

%

 

23.7

%

 

0.2

%

 

0.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant-level operating margin (3)

16.1

%

 

16.1

%

 

15.8

%

 

15.7

%

 

15.4

%

 

0.4

%

 

0.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segments - Restaurant-level operating margin (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

15.6

%

 

15.6

%

 

15.4

%

 

15.3

%

 

 

 

0.3

%

 

 

International

20.4

%

 

20.4

%

 

18.6

%

 

18.3

%

 

 

 

2.1

%

 

 

_________________

(1)

The table set forth below titled “Restaurant-level Operating Margin Adjustments” provides additional information regarding the adjustments for each period presented.

(2)

During the thirteen and twenty-six weeks ended July 1, 2018 both GAAP and adjusted restaurant-level operating margin included the benefit of deferred gains on sale-leaseback transactions of $3.0 million and $6.1 million, respectively. For comparability, we presented adjusted restaurant-level operating margin excluding this benefit that we no longer recognize in 2019 as a result of the adoption of the new lease accounting standard.

(3)

The following categories of our revenue and operating expenses are not included in restaurant-level operating margin because we do not consider them reflective of operating performance at the restaurant-level within a period:

(i)

Franchise and other revenues, which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income.

(ii)

Depreciation and amortization which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants.

(iii)

General and administrative expense which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices.

(iv)

Asset impairment charges and restaurant closing costs which are not reflective of ongoing restaurant performance in a period.

Restaurant-level Operating Margin Adjustments - Following is a summary of unfavorable restaurant-level operating margin adjustments recorded in Other restaurant operating for the following activities, as described in table five of this release:

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in millions)

JULY 1, 2018

 

JULY 1, 2018

Restaurant and asset impairments and closing costs (1)

$

 

1.4

 

 

$

 

2.2

 

Restaurant relocations and related costs

 

0.2

 

 

 

0.4

 

 

$

 

1.6

 

 

$

 

2.6

 

_________________

(1)

Includes $0.6 million of adjustments for the thirteen and twenty-six weeks ended July 1, 2018, recorded in the International segment. All other adjustments were recorded within the U.S. segment.

TABLE FIVE

BLOOMIN’ BRANDS, INC.

INCOME FROM OPERATIONS, NET INCOME AND DILUTED EARNINGS PER SHARE NON-GAAP RECONCILIATIONS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(in thousands, except per share data)

JUNE 30, 2019

 

JULY 1, 2018

 

JUNE 30, 2019

 

JULY 1, 2018

Income from operations

$

 

 

43,460

 

 

$

 

 

32,924

 

 

$

 

 

125,954

 

 

$

 

 

111,295

 

Operating income margin

 

4.3

%

 

 

3.2

%

 

 

5.9

%

 

 

5.2

%

Adjustments:

 

 

 

 

 

 

 

Restaurant and asset impairments and closing costs (1)

 

2,039

 

 

 

7,886

 

 

 

4,170

 

 

 

9,181

 

Restaurant relocations and related costs (2)

 

952

 

 

 

1,353

 

 

 

1,984

 

 

 

3,078

 

Severance (3)

 

748

 

 

 

 

 

3,603

 

 

 

965

 

Legal and contingent matters

 

 

 

288

 

 

 

 

 

758

 

Total income from operations adjustments

$

 

 

3,739

 

 

$

 

 

9,527

 

 

$

 

 

9,757

 

 

$

 

 

13,982

 

Adjusted income from operations

$

 

 

47,199

 

 

$

 

 

42,451

 

 

$

 

 

135,711

 

 

$

 

 

125,277

 

Adjusted operating income margin

 

4.6

%

 

 

4.1

%

 

 

6.3

%

 

 

5.8

%

 

 

 

 

 

 

 

 

Net income attributable to Bloomin’ Brands

$

 

 

29,021

 

 

$

 

 

26,721

 

 

$

 

 

93,321

 

 

$

 

 

92,119

 

Adjustments:

 

 

 

 

 

 

 

Income from operations adjustments

 

3,739

 

 

 

9,527

 

 

 

9,757

 

 

 

13,982

 

Total adjustments, before income taxes

 

3,739

 

 

 

9,527

 

 

 

9,757

 

 

 

13,982

 

Adjustment to provision for income taxes (4)

 

(413

)

 

 

(438

)

 

 

(1,232

)

 

 

(2,119

)

Net adjustments

 

3,326

 

 

 

9,089

 

 

 

8,525

 

 

 

11,863

 

Adjusted net income

$

 

 

32,347

 

 

$

 

 

35,810

 

 

$

 

 

101,846

 

 

$

 

 

103,982

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

 

 

0.32

 

 

$

 

 

0.28

 

 

$

 

 

1.02

 

 

$

 

 

0.97

 

 

 

 

 

 

 

 

 

Adjusted diluted earnings per share

$

 

 

0.36

 

 

$

 

 

0.38

 

 

$

 

 

1.11

 

 

$

 

 

1.09

 

Remove new lease accounting standard impact (5)

 

 

 

(0.02

)

 

 

 

 

(0.05

)

Adjusted diluted earnings per share on a comparable basis (5)

$

 

 

0.36

 

 

$

 

 

0.36

 

 

$

 

 

1.11

 

 

$

 

 

1.04

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding

 

90,953

 

 

 

94,361

 

 

 

91,807

 

 

 

95,072

 

_________________

(1)

Represents asset impairment charges and related costs primarily associated with approved closure and restructuring initiatives, and the restructuring of certain international markets.

(2)

Represents asset impairment charges and accelerated depreciation incurred in connection with our relocation program.

(3)

Relates to severance expense incurred as a result of restructuring activities.

(4)

Represents income tax effect of the adjustments for the periods presented.

(5)

During the thirteen and twenty-six weeks ended July 1, 2018 both GAAP and adjusted diluted earnings per share were positively impacted by the benefit of deferred gains on sale-leaseback transactions by approximately $0.02 and $0.05, respectively. For comparability, we have presented adjusted diluted earnings per share excluding this benefit that we no longer recognize in 2019 as a result of the adoption of the new lease accounting standard.

Following is a summary of the financial statement line item classification of the net income adjustments:

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 30, 2019

 

JULY 1, 2018

 

JUNE 30, 2019

 

JULY 1, 2018

Other restaurant operating

$

65

 

 

$

(1,560

)

 

$

43

 

 

$

(2,518

)

Depreciation and amortization

607

 

 

1,523

 

 

1,172

 

 

3,111

 

General and administrative

1,075

 

 

1,533

 

 

4,330

 

 

3,090

 

Provision for impaired assets and restaurant closings

1,992

 

 

8,031

 

 

4,212

 

 

10,299

 

Provision (benefit) for income taxes

(413

)

 

(438

)

 

(1,232

)

 

(2,119

)

Net adjustments

$

3,326

 

 

$

9,089

 

 

$

8,525

 

 

$

11,863

 

TABLE SIX

BLOOMIN’ BRANDS, INC.

SEGMENT INCOME FROM OPERATIONS NON-GAAP RECONCILIATION

(UNAUDITED)

U.S. Segment

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 30, 2019

 

JULY 1, 2018

 

JUNE 30, 2019

 

JULY 1, 2018

Income from operations

$

78,814

 

 

$

76,913

 

 

$

191,849

 

 

$

186,047

 

Operating income margin

8.6

%

 

8.3

%

 

9.9

%

 

9.7

%

Adjustments:

 

 

 

 

 

 

 

Restaurant relocations and related costs (1)

952

 

 

1,353

 

 

1,984

 

 

3,078

 

Restaurant and asset impairments and closing costs (2)

246

 

 

(181

)

 

2,081

 

 

(797

)

Severance (3)

 

 

 

 

700

 

 

888

 

Adjusted income from operations

$

80,012

 

 

$

78,085

 

 

$

196,614

 

 

$

189,216

 

Adjusted operating income margin

8.8

%

 

8.5

%

 

10.2

%

 

9.8

%

 

 

 

 

 

 

 

 

International Segment

 

 

 

 

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

Income (loss) from operations

$

6,909

 

 

$

(2,049

)

 

$

20,629

 

 

$

6,276

 

Operating income (loss) margin

6.4

%

 

(1.9

)%

 

9.3

%

 

2.8

%

Adjustments:

 

 

 

 

 

 

 

Restaurant and asset impairments and closing costs (2)

1,793

 

 

8,067

 

 

2,089

 

 

9,978

 

Adjusted income from operations

$

8,702

 

 

$

6,018

 

 

$

22,718

 

 

$

16,254

 

Adjusted operating income margin

8.1

%

 

5.5

%

 

10.3

%

 

7.2

%
_________________

(1)

Represents asset impairment charges and accelerated depreciation incurred in connection with our relocation program.

(2)

Represents asset impairment charges and related costs primarily associated with approved closure and restructuring initiatives, and the restructuring of certain international markets.

(3)

Relates to severance expense incurred as a result of restructuring activities.

TABLE SEVEN

BLOOMIN’ BRANDS, INC.

COMPARATIVE RESTAURANT INFORMATION

(UNAUDITED)

Number of restaurants (at end of the period):

MARCH 31, 2019

 

OPENINGS

 

CLOSURES

 

JUNE 30, 2019

U.S.

 

 

 

 

 

 

 

Outback Steakhouse

 

 

 

 

 

 

 

Company-owned

579

 

 

1

 

 

(1

)

 

579

 

Franchised

153

 

 

 

 

(5

)

 

148

 

Total

732

 

 

1

 

 

(6

)

 

727

 

Carrabba’s Italian Grill

 

 

 

 

 

 

 

Company-owned

205

 

 

 

 

 

 

205

 

Franchised

21

 

 

 

 

 

 

21

 

Total

226

 

 

 

 

 

 

226

 

Bonefish Grill

 

 

 

 

 

 

 

Company-owned

189

 

 

1

 

 

 

 

190

 

Franchised

7

 

 

 

 

 

 

7

 

Total

196

 

 

1

 

 

 

 

197

 

Fleming’s Prime Steakhouse & Wine Bar

 

 

 

 

 

 

 

Company-owned

70

 

 

 

 

(1

)

 

69

 

Other

 

 

 

 

 

 

 

Company-owned

2

 

 

1

 

 

 

 

3

 

U.S. Total

1,226

 

 

3

 

 

(7

)

 

1,222

 

International

 

 

 

 

 

 

 

Company-owned

 

 

 

 

 

 

 

Outback Steakhouse—Brazil (1)

95

 

 

2

 

 

 

 

97

 

Other

34

 

 

1

 

 

(8

)

 

27

 

Franchised

 

 

 

 

 

 

 

Outback Steakhouse - South Korea

72

 

 

 

 

(2

)

 

70

 

Other

54

 

 

 

 

(3

)

 

51

 

International Total

255

 

 

3

 

 

(13

)

 

245

 

System-wide total

1,481

 

 

6

 

 

(20

)

 

1,467

 

____________________

(1)

The restaurant counts for Brazil are reported as of February 28, 2019 and May 31, 2019 to correspond with the balance sheet dates of this subsidiary.

TABLE EIGHT

BLOOMIN’ BRANDS, INC.

COMPARABLE RESTAURANT SALES INFORMATION

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

 

JUNE 30, 2019

 

JULY 1, 2018

 

JUNE 30, 2019

 

JULY 1, 2018

Year over year percentage change:

 

 

 

 

 

 

 

Comparable restaurant sales (stores open 18 months or more) (1):

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

Outback Steakhouse

1.3

%

 

4.0

%

 

2.4

%

 

4.2

%

Carrabba’s Italian Grill

(1.6

)%

 

(0.6

)%

 

(0.6

)%

 

0.3

%

Bonefish Grill

0.1

%

 

1.5

%

 

1.0

%

 

0.7

%

Fleming’s Prime Steakhouse & Wine Bar

1.6

%

 

0.3

%

 

1.1

%

 

1.6

%

Combined U.S.

0.6

%

 

2.4

%

 

1.6

%

 

2.7

%

International

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (2)

3.5

%

 

(6.1

)%

 

3.6

%

 

(2.6

)%

 

 

 

 

 

 

 

 

Traffic:

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

Outback Steakhouse

(1.6

)%

 

0.6

%

 

(1.0

)%

 

1.5

%

Carrabba’s Italian Grill

(1.4

)%

 

(5.8

)%

 

(1.4

)%

 

(5.7

)%

Bonefish Grill

(1.5

)%

 

(1.2

)%

 

(1.7

)%

 

(1.9

)%

Fleming’s Prime Steakhouse & Wine Bar

3.6

%

 

(7.7

)%

 

0.8

%

 

(4.9

)%

Combined U.S.

(1.4

)%

 

(1.2

)%

 

(1.2

)%

 

(0.6

)%

International

 

 

 

 

 

 

 

Outback Steakhouse - Brazil

1.2

%

 

(7.7

)%

 

(0.7

)%

 

(4.7

)%

 

 

 

 

 

 

 

 

Average check per person (3):

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

Outback Steakhouse

2.9

%

 

3.4

%

 

3.4

%

 

2.7

%

Carrabba’s Italian Grill

(0.2

)%

 

5.2

%

 

0.8

%

 

6.0

%

Bonefish Grill

1.6

%

 

2.7

%

 

2.7

%

 

2.6

%

Fleming’s Prime Steakhouse & Wine Bar

(2.0

)%

 

8.0

%

 

0.3

%

 

6.5

%

Combined U.S.

2.0

%

 

3.6

%

 

2.8

%

 

3.3

%

International

 

 

 

 

 

 

 

Outback Steakhouse - Brazil

2.1

%

 

1.9

%

 

4.4

%

 

2.4

%

____________________

(1)

Comparable restaurant sales exclude the effect of fluctuations in foreign currency rates. Relocated international restaurants closed more than 30 days and relocated U.S. restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.

(2)

Includes trading day impact from calendar period reporting.

(3)

Average check per person includes the impact of menu pricing changes, product mix and discounts.

 

Source: Bloomin’ Brands, Inc.

Mark Graff
Vice President, IR & Finance
(813) 830-5311

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