Delaware | 001-35625 | 20-8023465 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry Into a Material Definitive Agreement |
Item 2.02 | Results of Operations and Financial Condition |
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
Item 2.05 | Costs Associated with Exit or Disposal Activities |
Item 9.01 | Financial Statements and Exhibits |
Exhibit Number | Description | ||
99.1 | Press Release of Bloomin’ Brands, Inc. dated February 17, 2016 |
BLOOMIN’ BRANDS, INC. | |||
(Registrant) | |||
Date: | February 17, 2016 | By: | /s/ David J. Deno |
David J. Deno | |||
Executive Vice President and Chief Financial and Administrative Officer (Principal Financial and Accounting Officer) |
NEWS | Exhibit 99.1 | |||
Chris Meyer | ||||
Group Vice President, IR & Finance | ||||
(813) 830-5311 |
• | Adjusted restaurant margin was 16.5% versus 15.7% in Q4 2014 and U.S. GAAP restaurant margin was 16.1% versus 16.3% in Q4 2014 |
• | Added 11 new restaurants, including eight in international markets |
• | Comparable sales for Outback Steakhouse in Brazil increased 7.3% |
• | Adjusted restaurant margin was 16.5% versus 15.9% in Fiscal Year 2014 and U.S. GAAP restaurant margin was 16.5% versus 16.1% in Fiscal Year 2014 |
• | Added 49 new restaurants, including 29 in international markets |
• | The Company repurchased approximately 7.6 million shares of common stock for a total of $170 million |
• | Extinguished the 2012 CMBS Loan using proceeds from a new $300.0 million bridge loan and borrowings from our revolving credit facility. We anticipate interest savings of approximately $12.0 million in 2016. |
• | The Company’s Board of Directors authorized a new $250.0 million share repurchase program. |
Q4 | FISCAL YEAR | ||||||||||||||||||||||
2015 | 2014 | CHANGE | 2015 | 2014 | CHANGE | ||||||||||||||||||
Adjusted diluted earnings per share | $ | 0.30 | $ | 0.28 | $ | 0.02 | $ | 1.27 | $ | 1.10 | $ | 0.17 | |||||||||||
Adjustments | (0.16 | ) | (0.11 | ) | (0.05 | ) | (0.26 | ) | (0.39 | ) | 0.13 | ||||||||||||
Diluted earnings (loss) per share | $ | 0.14 | $ | 0.17 | $ | (0.03 | ) | $ | 1.01 | $ | 0.71 | $ | 0.30 | ||||||||||
(dollars in millions) | Q4 2015 | Q4 2014 | % Change | |||||||
Total revenues | $ | 1,049.3 | $ | 1,108.5 | (5.3 | )% | ||||
Adjusted restaurant-level operating margin | 16.5 | % | 15.7 | % | 0.8 | % | ||||
U.S. GAAP restaurant-level operating margin | 16.1 | % | 16.3 | % | (0.2 | )% | ||||
Adjusted operating income margin | 6.0 | % | 5.2 | % | 0.8 | % | ||||
U.S. GAAP operating income margin | 3.0 | % | 3.7 | % | (0.7 | )% |
• | The decrease in Total revenues was primarily due to the effect of foreign currency translation, lower comparable restaurant sales and lower revenue due to the sale of Roy’s, partially offset by the net benefit of new restaurant openings and closings. |
• | The increases in Adjusted restaurant-level operating margin and Adjusted operating income margin were primarily due to productivity savings, lower advertising expense and menu pricing. These increases were partially offset by commodity and wage inflation. |
• | The difference between Adjusted and U.S. GAAP restaurant-level operating margins was due to legal settlement expenses in Q4 2015 and a legal settlement gain in Q4 2014. |
• | The decrease in U.S. GAAP operating income margin in Q4 2015 was due to lower U.S. GAAP restaurant-level operating margin as described above and costs related to the Bonefish Restructuring, partially offset by the lapping of costs related to the International Restaurant Closure Initiative and impairment costs related to the sale of Roy’s. |
THIRTEEN WEEKS ENDED DECEMBER 27, 2015 | COMPANY- OWNED | ||
Comparable restaurant sales (stores open 18 months or more) (1) (2): | |||
U.S. | |||
Outback Steakhouse | (2.2 | )% | |
Carrabba’s Italian Grill | (4.0 | )% | |
Bonefish Grill | (5.4 | )% | |
Fleming’s Prime Steakhouse & Wine Bar | (0.3 | )% | |
Combined U.S. (3) | (2.8 | )% | |
International | |||
Outback Steakhouse - Brazil | 7.3 | % | |
Outback Steakhouse - South Korea | 0.0 | % |
(1) | Comparable restaurant sales exclude the effect of fluctuations in foreign currency rates. |
(2) | 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. |
(3) | U.S. Comparable restaurant sales were negatively impacted by approximately 90 basis points as a result of the holiday shift due to the timing of Halloween and Christmas. |
(dollars in millions) | Q4 2015 | Q4 2014 | % Change | |||||||
U.S. | ||||||||||
Total revenues | $ | 932.3 | $ | 961.2 | (3.0 | )% | ||||
Adjusted restaurant-level operating margin | 15.8 | % | 15.3 | % | 0.5 | % | ||||
U.S. GAAP restaurant-level operating margin | 15.8 | % | 15.3 | % | 0.5 | % | ||||
Adjusted operating income margin | 9.2 | % | 8.9 | % | 0.3 | % | ||||
U.S. GAAP operating income margin | 6.5 | % | 8.1 | % | (1.6 | )% |
• | The decrease in Total revenues was primarily due to lower comparable restaurant sales and lower revenue due to the sale of Roy’s, partially offset by the net benefit of new restaurant openings and closings. |
• | The increases in Adjusted restaurant-level operating margin, U.S. GAAP restaurant-level operating margin, and Adjusted operating income margin were primarily due to productivity savings, lower advertising expense and menu pricing. These increases were partially offset by commodity and wage inflation. |
• | The decrease in U.S. GAAP operating income margin in Q4 2015 was primarily due to costs related to our Bonefish Restructuring. These decreases were partially offset by the lapping of impairment costs related to Roy’s. |
(dollars in millions) | Q4 2015 | Q4 2014 | % Change | |||||||
International | ||||||||||
Total revenues | $ | 117.0 | $ | 147.3 | (20.6 | )% | ||||
Adjusted restaurant-level operating margin | 20.0 | % | 19.5 | % | 0.5 | % | ||||
U.S. GAAP restaurant-level operating margin | 20.0 | % | 20.0 | % | — | % | ||||
Adjusted operating income margin | 9.4 | % | 10.3 | % | (0.9 | )% | ||||
U.S. GAAP operating income margin | 8.7 | % | 2.4 | % | 6.3 | % |
• | The decrease in Total revenues is primarily due to foreign currency translation and the impact of the International Restaurant Closure Initiative, partially offset by new restaurant openings and higher comparable restaurant sales. |
• | The increase in Adjusted restaurant-level operating margin was primarily due to higher average unit volumes, menu pricing and productivity savings, partially offset by higher commodity and wage inflation and product mix. |
• | The decrease in Adjusted operating income margin was primarily due to higher depreciation and amortization and higher investment spending for Abbraccio and China in Q4 2015. |
• | The increase in U.S. GAAP operating income margin was driven by the lapping of expenses related to our International Restaurant Closure Initiative. |
• | Foreign currency translation negatively impacted adjusted operating income by $4.0 million. |
SEPTEMBER 27, 2015 | OPENINGS | CLOSURES | DECEMBER 27, 2015 | ||||||||
U.S.: | |||||||||||
Outback Steakhouse—Company-owned | 649 | 1 | — | 650 | |||||||
Bonefish Grill—Company-owned | 208 | 2 | — | 210 | |||||||
International: | |||||||||||
Company-owned | |||||||||||
Outback Steakhouse—South Korea | 75 | 1 | (1 | ) | 75 | ||||||
Outback Steakhouse—Brazil | 71 | 4 | — | 75 | |||||||
Other | 14 | 2 | — | 16 | |||||||
Franchised | 57 | 1 | — | 58 | |||||||
System-wide development | 11 | (1 | ) |
• | On February 11, 2016, the Company closed a $300.0 million bridge loan. We used the proceeds from the bridge loan and cash drawdowns from our revolving credit facility to facilitate an extinguishment of the 2012 CMBS Loan. In connection with the extinguishment, the Company anticipates recognizing a loss of $26.0 million to $29.0 million during the first quarter of 2016. These charges will be excluded from our adjusted results. |
• | The Company expects to generate annual interest savings of approximately $12.0 million from this transaction. These savings are included in our 2016 adjusted diluted earnings per share growth guidance presented below. |
Other Selected Financial Data (in millions, or as otherwise indicated): | Current Outlook | |
Comparable sales for Company-owned core domestic concepts | Positive | |
Commodity inflation | Approximately 0.5% | |
U.S. GAAP and Adjusted Operating Income Margin | Increase | |
Effective income tax rate* | 26% - 28% | |
U.S. GAAP and Adjusted diluted earnings per share growth | At Least 10% | |
U.S. GAAP and Adjusted diluted earnings per share growth in Constant Currency | At Least 13% | |
Number of new system-wide restaurants | 40 - 50 | |
Capital expenditures | $235 - $255 | |
Unfavorable Foreign Currency Translation Impact on Adjusted Operating Income | $10 |
TABLE ONE | |||||||||||||||
BLOOMIN’ BRANDS, INC. | |||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||||||
(UNAUDITED) | |||||||||||||||
THIRTEEN WEEKS ENDED | FISCAL YEAR ENDED | ||||||||||||||
(dollars in thousands, except per share data) | DECEMBER 27, 2015 | DECEMBER 28, 2014 | DECEMBER 27, 2015 | DECEMBER 28, 2014 | |||||||||||
Revenues | |||||||||||||||
Restaurant sales | $ | 1,042,221 | $ | 1,101,604 | $ | 4,349,921 | $ | 4,415,783 | |||||||
Other revenues | 7,078 | 6,882 | 27,755 | 26,928 | |||||||||||
Total revenues | 1,049,299 | 1,108,486 | 4,377,676 | 4,442,711 | |||||||||||
Costs and expenses | |||||||||||||||
Cost of sales | 335,766 | 354,574 | 1,419,689 | 1,435,359 | |||||||||||
Labor and other related | 293,957 | 309,539 | 1,205,610 | 1,218,961 | |||||||||||
Other restaurant operating | 244,844 | 257,776 | 1,006,772 | 1,049,053 | |||||||||||
Depreciation and amortization | 49,083 | 47,369 | 190,399 | 190,911 | |||||||||||
General and administrative | 68,782 | 82,649 | 287,614 | 304,382 | |||||||||||
Provision for impaired assets and restaurant closings | 24,952 | 15,911 | 36,667 | 52,081 | |||||||||||
Total costs and expenses | 1,017,384 | 1,067,818 | 4,146,751 | 4,250,747 | |||||||||||
Income from operations | 31,915 | 40,668 | 230,925 | 191,964 | |||||||||||
Loss on extinguishment and modification of debt | (318 | ) | — | (2,956 | ) | (11,092 | ) | ||||||||
Other income (expense), net | 417 | (1,415 | ) | (939 | ) | (1,244 | ) | ||||||||
Interest expense, net | (15,260 | ) | (14,114 | ) | (56,176 | ) | (59,658 | ) | |||||||
Income before provision for income taxes | 16,754 | 25,139 | 170,854 | 119,970 | |||||||||||
(Benefit) provision for income taxes | (2,263 | ) | 1,205 | 39,294 | 24,044 | ||||||||||
Net income | 19,017 | 23,934 | 131,560 | 95,926 | |||||||||||
Less: net income attributable to noncontrolling interests | 1,315 | 1,525 | 4,233 | 4,836 | |||||||||||
Net income attributable to Bloomin’ Brands | $ | 17,702 | $ | 22,409 | $ | 127,327 | $ | 91,090 | |||||||
Net income | $ | 19,017 | $ | 23,934 | $ | 131,560 | $ | 95,926 | |||||||
Other comprehensive income: | |||||||||||||||
Foreign currency translation adjustment | (10,393 | ) | (42,700 | ) | (96,194 | ) | (31,731 | ) | |||||||
Unrealized losses on derivatives, net of tax | 1,019 | (1,907 | ) | (6,033 | ) | (2,393 | ) | ||||||||
Reclassification of adjustment for loss on derivatives included in net income, net of tax | 1,120 | — | 2,235 | — | |||||||||||
Comprehensive income (loss) | 10,763 | (20,673 | ) | 31,568 | 61,802 | ||||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests | 122 | 1,525 | (8,934 | ) | 4,836 | ||||||||||
Comprehensive income (loss) attributable to Bloomin’ Brands | $ | 10,641 | $ | (22,198 | ) | $ | 40,502 | $ | 56,966 | ||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.15 | $ | 0.18 | $ | 1.04 | $ | 0.73 | |||||||
Diluted | $ | 0.14 | $ | 0.17 | $ | 1.01 | $ | 0.71 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 119,398 | 125,484 | 122,352 | 125,139 | |||||||||||
Diluted | 122,273 | 128,822 | 125,585 | 128,317 | |||||||||||
Cash dividends declared per common share | $ | 0.06 | $ | — | $ | 0.24 | $ | — |
TABLE TWO | |||||||||||||||
BLOOMIN’ BRANDS, INC. | |||||||||||||||
SEGMENT RESULTS | |||||||||||||||
(UNAUDITED) | |||||||||||||||
(dollars in thousands) | THIRTEEN WEEKS ENDED | FISCAL YEAR ENDED | |||||||||||||
U.S. Segment | DECEMBER 27, 2015 | DECEMBER 28, 2014 | DECEMBER 27, 2015 | DECEMBER 28, 2014 | |||||||||||
Revenues | |||||||||||||||
Restaurant sales | $ | 926,518 | $ | 955,408 | $ | 3,857,162 | $ | 3,832,373 | |||||||
Other revenues | 5,780 | 5,767 | 22,581 | 21,906 | |||||||||||
Total revenues | $ | 932,298 | $ | 961,175 | $ | 3,879,743 | $ | 3,854,279 | |||||||
Restaurant-level operating margin | 15.8 | % | 15.3 | % | 15.8 | % | 15.4 | % | |||||||
Income from operations | $ | 60,660 | $ | 77,658 | $ | 342,224 | $ | 320,561 | |||||||
Operating income margin | 6.5 | % | 8.1 | % | 8.8 | % | 8.3 | % | |||||||
International Segment | |||||||||||||||
Revenues | |||||||||||||||
Restaurant sales | $ | 115,703 | $ | 146,196 | $ | 492,759 | $ | 583,410 | |||||||
Other revenues | 1,298 | 1,115 | 5,174 | 5,022 | |||||||||||
Total revenues | $ | 117,001 | $ | 147,311 | $ | 497,933 | $ | 588,432 | |||||||
Restaurant-level operating margin | 20.0 | % | 20.0 | % | 19.3 | % | 18.4 | % | |||||||
Income from operations | $ | 10,221 | $ | 3,481 | $ | 34,597 | $ | 25,020 | |||||||
Operating income margin | 8.7 | % | 2.4 | % | 6.9 | % | 4.3 | % | |||||||
Reconciliation of Segment Income from Operations to Consolidated Income from Operations | |||||||||||||||
Segment income from operations | |||||||||||||||
U.S. | $ | 60,660 | $ | 77,658 | $ | 342,224 | $ | 320,561 | |||||||
International | 10,221 | 3,481 | 34,597 | 25,020 | |||||||||||
Total segment income from operations | 70,881 | 81,139 | 376,821 | 345,581 | |||||||||||
Unallocated corporate operating expense - Cost of sales, Labor and other related and Other restaurant operating | (1,928 | ) | 4,770 | 13,067 | 14,452 | ||||||||||
Unallocated corporate operating expense - Depreciation and amortization and General and administrative | (37,038 | ) | (45,241 | ) | (158,963 | ) | (168,069 | ) | |||||||
Unallocated corporate operating expense | (38,966 | ) | (40,471 | ) | (145,896 | ) | (153,617 | ) | |||||||
Total income from operations | $ | 31,915 | $ | 40,668 | $ | 230,925 | $ | 191,964 |
TABLE THREE | |||||||
BLOOMIN’ BRANDS, INC. | |||||||
SUPPLEMENTAL BALANCE SHEET INFORMATION | |||||||
(UNAUDITED) | |||||||
(dollars in thousands) | DECEMBER 27, 2015 | DECEMBER 28, 2014 | |||||
Cash and cash equivalents (1) | $ | 132,337 | $ | 165,744 | |||
Net working capital (deficit) (2) (3) | $ | (395,522 | ) | $ | (239,559 | ) | |
Total assets | $ | 3,032,569 | $ | 3,338,240 | |||
Total debt, net | $ | 1,316,864 | $ | 1,309,797 | |||
Total stockholders’ equity | $ | 421,900 | $ | 556,449 |
(1) | Excludes restricted cash. |
(2) | The Company has, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies). The Company operates successfully with negative working capital because cash collected on Restaurant sales is typically received before payment is due on its current liabilities and its 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. |
(3) | The Company adopted ASU No. 2015-17, with prospective application, resulting in the classification of deferred tax assets and liabilities as noncurrent in the Consolidated Balance Sheet as of December 27, 2015. |
TABLE FOUR | ||||||||||||||
BLOOMIN’ BRANDS, INC. | ||||||||||||||
RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATION | ||||||||||||||
(UNAUDITED) | ||||||||||||||
THIRTEEN WEEKS ENDED | (UNFAVORABLE) FAVORABLE CHANGE IN ADJUSTED | |||||||||||||
DECEMBER 27, 2015 | DECEMBER 28, 2014 | |||||||||||||
U.S. GAAP | ADJUSTED (1) | U.S. GAAP | ADJUSTED (2) | QUARTER | ||||||||||
Restaurant sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Cost of sales | 32.2 | % | 32.2 | % | 32.2 | % | 32.2 | % | — | % | ||||
Labor and other related | 28.2 | % | 28.2 | % | 28.1 | % | 28.1 | % | (0.1 | )% | ||||
Other restaurant operating | 23.5 | % | 23.1 | % | 23.4 | % | 24.0 | % | 0.9 | % | ||||
Restaurant-level operating margin | 16.1 | % | 16.5 | % | 16.3 | % | 15.7 | % | 0.8 | % | ||||
FISCAL YEAR ENDED | (UNFAVORABLE) FAVORABLE CHANGE IN ADJUSTED | |||||||||||||
DECEMBER 27, 2015 | DECEMBER 28, 2014 | |||||||||||||
U.S. GAAP | ADJUSTED (3) | U.S. GAAP | ADJUSTED (2) | YEAR | ||||||||||
Restaurant sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Cost of sales | 32.6 | % | 32.6 | % | 32.5 | % | 32.5 | % | (0.1 | )% | ||||
Labor and other related | 27.7 | % | 27.8 | % | 27.6 | % | 27.6 | % | (0.2 | )% | ||||
Other restaurant operating | 23.1 | % | 23.1 | % | 23.8 | % | 24.0 | % | 0.9 | % | ||||
Restaurant-level operating margin | 16.5 | % | 16.5 | % | 16.1 | % | 15.9 | % | 0.6 | % |
(1) | Includes legal settlement costs of $4.0 million, primarily related to the Cardoza litigation. The legal settlement was recorded in Other restaurant operating. |
(2) | Includes adjustments primarily related to a $6.1 million legal settlement gain and the reversal of $0.8 million and $2.9 million of deferred rent liabilities associated with the International and Domestic Restaurant Closure Initiatives for the thirteen weeks and fiscal year ended December 28, 2014, respectively, which were recorded in Other restaurant operating. |
(3) | Includes adjustments for the favorable resolution of payroll tax audit contingencies of $5.6 million, offset by legal settlement costs of $4.0 million, primarily related to the Cardoza litigation. The payroll audit adjustment was recorded in Labor and other related. |
TABLE FIVE | ||||||||||||||
BLOOMIN’ BRANDS, INC. | ||||||||||||||
SEGMENT RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATION | ||||||||||||||
(UNAUDITED) | ||||||||||||||
THIRTEEN WEEKS ENDED | (UNFAVORABLE) FAVORABLE CHANGE IN ADJUSTED | |||||||||||||
DECEMBER 27, 2015 | DECEMBER 28, 2014 | |||||||||||||
Restaurant-level operating margin: | U.S. GAAP | ADJUSTED | U.S. GAAP | ADJUSTED | QUARTER | |||||||||
U.S. | 15.8 | % | 15.8 | % | 15.3 | % | 15.3 | % | 0.5 | % | ||||
International (1) | 20.0 | % | 20.0 | % | 20.0 | % | 19.5 | % | 0.5 | % | ||||
FISCAL YEAR ENDED | (UNFAVORABLE) FAVORABLE CHANGE IN ADJUSTED | |||||||||||||
DECEMBER 27, 2015 | DECEMBER 28, 2014 | |||||||||||||
Restaurant-level operating margin: | U.S. GAAP | ADJUSTED | U.S. GAAP | ADJUSTED | YEAR | |||||||||
U.S. (2) | 15.8 | % | 15.8 | % | 15.4 | % | 15.4 | % | 0.4 | % | ||||
International (1) | 19.3 | % | 19.3 | % | 18.4 | % | 18.4 | % | 0.9 | % |
(1) | Includes an adjustment for the write-off of $0.8 million of deferred rent liabilities associated with the International Restaurant Closure Initiative for the thirteen weeks and fiscal year ended December 28, 2014. Also includes adjustments of $0.1 million of Brazil non-cash intangible amortization for the thirteen weeks ended December 27, 2015 and December 28, 2014 and $0.3 million and $0.4 million for the fiscal year ended December 27, 2015 and December 28, 2014, respectively. |
(2) | Includes an adjustment for the write-off of $2.1 million of deferred rent liabilities associated with the Domestic Restaurant Closure Initiative for the fiscal year ended December 28, 2014. |
TABLE SIX | |||||||||||||||
BLOOMIN’ BRANDS, INC. | |||||||||||||||
INCOME FROM OPERATIONS, NET INCOME AND DILUTED EARNINGS PER SHARE NON-GAAP RECONCILIATION | |||||||||||||||
(UNAUDITED) | |||||||||||||||
THIRTEEN WEEKS ENDED | FISCAL YEAR ENDED | ||||||||||||||
(in thousands, except per share data) | DECEMBER 27, 2015 | DECEMBER 28, 2014 | DECEMBER 27, 2015 | DECEMBER 28, 2014 | |||||||||||
Income from operations | $ | 31,915 | $ | 40,668 | $ | 230,925 | $ | 191,964 | |||||||
Operating income margin | 3.0 | % | 3.7 | % | 5.3 | % | 4.3 | % | |||||||
Adjustments: | |||||||||||||||
Restaurant impairments and closing costs (1) | 24,515 | 10,339 | 33,507 | 26,841 | |||||||||||
Payroll tax audit contingency (2) | — | — | (5,587 | ) | — | ||||||||||
Purchased intangibles amortization (3) | 881 | 1,417 | 4,334 | 5,952 | |||||||||||
Restaurant relocations, remodels and related costs (4) | 462 | 249 | 3,625 | 249 | |||||||||||
Asset impairments and related costs (5) | — | 7,538 | 746 | 24,490 | |||||||||||
Transaction-related expenses (6) | 229 | 229 | 1,294 | 1,347 | |||||||||||
Legal and contingent matters (7) | 4,604 | (6,070 | ) | 5,843 | (6,070 | ) | |||||||||
Severance (8) | — | 3,683 | — | 9,045 | |||||||||||
Total income from operations adjustments | 30,691 | 17,385 | 43,762 | 61,854 | |||||||||||
Adjusted income from operations | $ | 62,606 | $ | 58,053 | $ | 274,687 | $ | 253,818 | |||||||
Adjusted operating income margin | 6.0 | % | 5.2 | % | 6.3 | % | 5.7 | % | |||||||
Net income attributable to Bloomin’ Brands | $ | 17,702 | $ | 22,409 | $ | 127,327 | $ | 91,090 | |||||||
Adjustments: | |||||||||||||||
Income from operations adjustments | 30,691 | 17,385 | 43,762 | 61,854 | |||||||||||
Loss on disposal of business and disposal of assets (9) | — | 770 | 1,328 | 770 | |||||||||||
Loss on extinguishment and modification of debt (10) | 318 | — | 2,956 | 11,092 | |||||||||||
Total adjustments, before income taxes | 31,009 | 18,155 | 48,046 | 73,716 | |||||||||||
Adjustment to provision for income taxes (11) | (12,069 | ) | (5,094 | ) | (15,314 | ) | (23,996 | ) | |||||||
Net adjustments | 18,940 | 13,061 | 32,732 | 49,720 | |||||||||||
Adjusted net income | $ | 36,642 | $ | 35,470 | $ | 160,059 | $ | 140,810 | |||||||
Diluted earnings per share | $ | 0.14 | $ | 0.17 | $ | 1.01 | $ | 0.71 | |||||||
Adjusted diluted earnings per share | $ | 0.30 | $ | 0.28 | $ | 1.27 | $ | 1.10 | |||||||
Diluted weighted average common shares outstanding | 122,273 | 128,822 | 125,585 | 128,317 |
(1) | Represents expenses incurred for the Bonefish Restructuring and the International and Domestic Restaurant Closure Initiatives. |
(2) | Relates to a payroll tax audit contingency adjustment, for the employer’s share of FICA taxes related to cash tips allegedly received and unreported by our employees during calendar years 2011 and 2012, which is recorded in Labor and other related expenses. In addition, a deferred income tax adjustment has been recorded for the allowable income tax credits for the employer’s share of FICA taxes expected to be paid, which is included in Provision (benefit) for income taxes and offsets the adjustment to Labor and other related expenses. As a result, there is no impact to Net income from this adjustment. See footnote 11 to this table. |
(3) | Represents non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations. |
(4) | Represents asset impairment charges and accelerated depreciation incurred in connection with our relocation and remodel programs. |
(5) | Represents asset impairment charges and related costs associated with our decision to sell the Roy’s concept and corporate aircraft. |
(6) | Relates primarily to the following: (i) costs incurred with the secondary offerings of our common stock in March 2015, November 2014 and March 2014 and (ii) costs incurred in 2015 with our sale-leaseback initiative. |
(7) | Fees and expenses related to certain legal and contingent matters, including the Cardoza litigation, in fiscal year 2015. During fiscal year 2014, we recognized a gain on a legal settlement. |
(8) | Relates to severance expense incurred as a result of our organizational realignment. |
(9) | Primarily represents loss on the sale of: (i) our Roy’s business in fiscal 2015 and (ii) one Company-owned Outback Steakhouse location in Mexico in fiscal 2014. |
(10) | Relates to the refinancing of our Senior Secured Credit Facility in December 2015, March 2015 and May 2014. |
(11) | Income tax effect of adjustments for fiscal year 2015 and 2014, respectively, are calculated based on the statutory rate applicable to jurisdictions in which the above non-GAAP adjustments relate. Additionally, for fiscal year 2015, a deferred income tax adjustment has been recorded for the allowable income tax credits for the employer’s share of FICA taxes expected to be paid. See footnote 2 to this table. |
THIRTEEN WEEKS ENDED | FISCAL YEAR ENDED | ||||||||||||||
(dollars in thousands) | DECEMBER 27, 2015 | DECEMBER 28, 2014 | DECEMBER 27, 2015 | DECEMBER 28, 2014 | |||||||||||
Labor and other related | $ | — | $ | — | $ | (5,587 | ) | $ | — | ||||||
Other restaurant operating expense | 3,991 | (6,811 | ) | 3,891 | (8,593 | ) | |||||||||
Depreciation and amortization | 1,309 | 1,573 | 5,111 | 5,812 | |||||||||||
General and administrative | 998 | 7,071 | 5,015 | 14,620 | |||||||||||
Provision for impaired assets and restaurant closings | 24,393 | 15,552 | 35,332 | 50,015 | |||||||||||
Other expense, net | — | 770 | 1,328 | 770 | |||||||||||
Provision for income taxes | (12,069 | ) | (5,094 | ) | (15,314 | ) | (23,996 | ) | |||||||
Loss on extinguishment and modification of debt | 318 | — | 2,956 | 11,092 | |||||||||||
Net adjustments | $ | 18,940 | $ | 13,061 | $ | 32,732 | $ | 49,720 |
TABLE SEVEN | |||||||||||||||
BLOOMIN’ BRANDS, INC. | |||||||||||||||
SEGMENT INCOME FROM OPERATIONS NON-GAAP RECONCILIATION | |||||||||||||||
(UNAUDITED) | |||||||||||||||
U.S. Segment | THIRTEEN WEEKS ENDED | FISCAL YEAR ENDED | |||||||||||||
(dollars in thousands) | DECEMBER 27, 2015 | DECEMBER 28, 2014 | DECEMBER 27, 2015 | DECEMBER 28, 2014 | |||||||||||
Income from operations | $ | 60,660 | $ | 77,658 | $ | 342,224 | $ | 320,561 | |||||||
Operating income margin | 6.5 | % | 8.1 | % | 8.8 | % | 8.3 | % | |||||||
Adjustments: | |||||||||||||||
Restaurant impairments and closing costs (1) | 24,632 | — | 25,948 | 4,929 | |||||||||||
Restaurant relocations, remodels and related costs (2) | 462 | 249 | 3,625 | 249 | |||||||||||
Asset impairments and related costs (3) | — | 7,396 | — | 13,508 | |||||||||||
Adjusted income from operations | $ | 85,754 | $ | 85,303 | $ | 371,797 | $ | 339,247 | |||||||
Adjusted operating income margin | 9.2 | % | 8.9 | % | 9.6 | % | 8.8 | % | |||||||
International Segment | |||||||||||||||
(dollars in thousands) | |||||||||||||||
Income from operations | $ | 10,221 | $ | 3,481 | $ | 34,597 | $ | 25,020 | |||||||
Operating income margin | 8.7 | % | 2.4 | % | 6.9 | % | 4.3 | % | |||||||
Adjustments: | |||||||||||||||
Restaurant impairments and closing costs (4) | (118 | ) | 10,339 | 7,558 | 21,912 | ||||||||||
Purchased intangibles amortization (5) | 882 | 1,417 | 4,335 | 5,952 | |||||||||||
Adjusted income from operations | $ | 10,985 | $ | 15,237 | $ | 46,490 | $ | 52,884 | |||||||
Adjusted operating income margin | 9.4 | % | 10.3 | % | 9.3 | % | 9.0 | % |
(1) | Represents expenses incurred for the Bonefish Restructuring and the Domestic Restaurant Closure Initiative. |
(2) | Represents asset impairment charges and accelerated depreciation incurred in connection with our relocation and remodel programs. |
(3) | Represents asset impairment charges and related costs associated with our decision to sell the Roy’s concept. |
(4) | Represents expenses incurred for the International Restaurant Closure Initiative. |
(5) | Represents non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations. |
TABLE EIGHT | |||||
BLOOMIN’ BRANDS, INC. | |||||
IMPACT OF FOREIGN CURRENCY | |||||
(UNAUDITED) | |||||
FISCAL YEAR 2015 | |||||
ADJUSTED (1) | CONSTANT CURRENCY (2) | ||||
Adjusted income from operations growth | 8.2 | % | 13.3 | % | |
Adjusted net income growth | 13.7 | % | 19.5 | % | |
Adjusted Diluted earnings per share growth (3) | 15.5 | % | 21.8 | % |
(1) | See reconciliation to U.S. GAAP results in Table Six of this release. |
(2) | Results excluding the effect of foreign currency translation, also referred to as constant currency, are calculated by translating current year results at prior year average exchange rates. The Company is primarily exposed to foreign currency fluctuations for the Brazil Real and South Korea Won. |
(3) | Adjusted Diluted earnings per share and constant currency growth includes 3.6% from two additional operating days due to the change in the Company’s year-end. |
TABLE NINE | |||||
BLOOMIN’ BRANDS, INC. | |||||
COMPARATIVE STORE INFORMATION | |||||
(UNAUDITED) | |||||
Number of restaurants (at end of the period): | DECEMBER 27, 2015 | DECEMBER 28, 2014 | |||
U.S. | |||||
Outback Steakhouse | |||||
Company-owned | 650 | 648 | |||
Franchised | 105 | 105 | |||
Total | 755 | 753 | |||
Carrabba’s Italian Grill | |||||
Company-owned | 244 | 242 | |||
Franchised | 3 | 1 | |||
Total | 247 | 243 | |||
Bonefish Grill | |||||
Company-owned | 210 | 201 | |||
Franchised | 5 | 5 | |||
Total | 215 | 206 | |||
Fleming’s Prime Steakhouse & Wine Bar | |||||
Company-owned | 66 | 66 | |||
Roy’s (1) | |||||
Company-owned | — | 20 | |||
International | |||||
Company-owned | |||||
Outback Steakhouse - Brazil (2) | 75 | 63 | |||
Outback Steakhouse - South Korea (3) | 75 | 91 | |||
Other | 16 | 11 | |||
Franchised | 58 | 55 | |||
Total | 224 | 220 | |||
System-wide total | 1,507 | 1,508 |
(1) | On January 26, 2015, we sold our Roy’s concept. |
(2) | The restaurant counts for Brazil are reported as of November 30, 2015 and 2014, respectively, to correspond with the balance sheet dates of this subsidiary. |
(3) | In the first quarter of 2015, we adopted a policy that relocated international restaurants closed more than 30 days and relocated U.S. restaurants closed more than 60 days are considered a closure. Prior periods for South Korea have been revised to conform to the current year presentation. |