Bloomin’ Brands Provides Business Update Related to the COVID-19 Pandemic
Reports Strengthening Sales Trends
Announces 2020 Q1 Financial Results
Statement from
Our priorities remain unchanged as we continue to navigate these challenging times. We are focused on taking care of our people and serving food in a safe environment that protects both our Team Members and customers.
We have leveraged our strong off-premises business since the pandemic required the closure of our dining rooms. As a result, we have tripled our average off-premises sales per restaurant since the beginning of March. This is a testament to the strong affinity for our brands, and our decision to invest significantly over a number of years into building a robust delivery network to complement our take-out business. These outstanding off-premises results have allowed us to keep substantially all of our locations open during this time.
We have also recently begun the process of reopening our dining rooms as state and local governments allow. For perspective, we had 23
As these dining rooms reopen, we are adhering to the strongest of safety measures, including additional sanitation and disinfecting practices, enhanced hand-washing protocols, use of gloves and facial protection for our employees, and we are providing contactless payment options for our customers. In addition, each dining room seating configuration has been modified to adhere to social distancing and reduced capacity standards, and we are leveraging our table management notification system to allow guests to wait in their cars for their table.
We are tightly managing our cash usage. We have stopped non-essential spending, significantly reduced marketing expenses and deferred nearly all of our capital expenditures. These efforts have allowed us to minimize our ongoing cash burn. Also, our decision not to terminate or furlough any of our employees will allow us to reopen dining rooms quickly with no re-hiring or training expenses.
As it relates to our first quarter results, we were on track to deliver a strong quarter prior to the impact of the pandemic. The strategies to enhance Total Shareholder Return that we outlined on our Q4 earning’s call were working. Through February all of our concepts were positive in sales and traffic. We achieved meaningful expansion of our adjusted operating margins during those eight weeks, and we had begun to see the benefits of our expected
Cash Utilization and Liquidity Update
As of
At recent sales levels, we expect our ongoing weekly cash burn rate to be approximately
Recent Sales Results
The following table includes estimated comparable restaurant sales by concept for our
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WEEK ENDED |
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Comparable restaurant sales (stores open 18 months or more): |
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|
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(63.7 |
)% |
|
(63.5 |
)% |
|
(60.6 |
)% |
|
(52.2 |
)% |
|
(40.3 |
)% |
|
(41.0 |
)% |
|
(38.4 |
)% |
Carrabba’s |
(67.5 |
)% |
|
(68.7 |
)% |
|
(64.7 |
)% |
|
(53.0 |
)% |
|
(54.0 |
)% |
|
(50.3 |
)% |
|
(47.2 |
)% |
|
(83.4 |
)% |
|
(82.7 |
)% |
|
(79.2 |
)% |
|
(68.2 |
)% |
|
(74.3 |
)% |
|
(72.6 |
)% |
|
(70.7 |
)% |
Fleming’s |
(82.3 |
)% |
|
(85.6 |
)% |
|
(82.7 |
)% |
|
(63.9 |
)% |
|
(77.9 |
)% |
|
(73.7 |
)% |
|
(74.1 |
)% |
Combined |
(69.1 |
)% |
|
(69.5 |
)% |
|
(66.1 |
)% |
|
(55.9 |
)% |
|
(51.9 |
)% |
|
(50.3 |
)% |
|
(48.0 |
)% |
_________________ | ||
(1) |
The week ended |
The following table includes estimated average off-premises weekly sales per comparable restaurant for our
|
WEEK ENDED |
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Average off-premises weekly sales per restaurant (stores open 18 months or more): |
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Carrabba’s |
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Fleming’s |
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_________________ | ||
(1) |
The week ended |
Credit Agreement Amendment
On
First Quarter Preliminary Diluted EPS and Adjusted Diluted EPS
The following table reconciles Preliminary Diluted earnings per share attributable to common stockholders to Preliminary Adjusted diluted earnings per share for the first quarter 2020 (“Q1 2020”) compared to the first quarter 2019 (“Q1 2019”).
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Q1 |
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2020 |
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2019 |
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CHANGE |
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Diluted earnings per share attributable to common stockholders |
$ |
(0.44 |
) |
|
$ |
0.69 |
|
|
$ |
(1.13 |
) |
|||
Adjustments |
0.58 |
|
|
0.06 |
|
|
0.52 |
|
||||||
Adjusted diluted earnings per share |
$ |
0.14 |
|
|
$ |
0.75 |
|
|
$ |
(0.61 |
) |
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_________________ |
See Preliminary Data and Non-GAAP Measures later in this release. |
For additional context, our first quarter adjusted diluted earnings per share results included
First Quarter Preliminary Comparable Restaurant Sales
Comparable Restaurant Sales information in the following table remains unchanged from the information provided in our
|
EIGHT WEEKS |
|
FIVE WEEKS |
|
THIRTEEN |
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Comparable restaurant sales (stores open 18 months or more): |
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2.2 |
% |
|
(28.1 |
)% |
|
(9.5 |
)% |
Carrabba’s |
4.5 |
% |
|
(29.9 |
)% |
|
(8.7 |
)% |
|
2.0 |
% |
|
(38.6 |
)% |
|
(13.9 |
)% |
Fleming’s |
2.4 |
% |
|
(40.0 |
)% |
|
(13.2 |
)% |
Combined |
2.6 |
% |
|
(31.0 |
)% |
|
(10.4 |
)% |
|
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International |
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NM |
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NM |
|
6.8 |
% |
_________________ | ||
NM |
Not meaningful. |
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(1) |
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Strategic Alternatives Review Update
In
Conference Call
The Company will host a conference call
Preliminary Data
The unaudited data presented in this release is preliminary, based upon certain management estimates and subject to the completion of our procedures for the preparation and review of our quarterly financial statements. We have not completed our final closing procedures related to our analysis of goodwill, intangible assets and certain other long-lived assets for impairment and the related income tax provision adjustments that may result from completion of such procedures. In addition, estimated weekly sales and cash burn data has been provided to help investors understand and assess the near-term impacts of the COVID-19 pandemic, but is subject to variability and may not be indicative of our results or trends for any full reporting period.
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 income from operations and the corresponding margin, (ii) Adjusted net income and (iii) Adjusted diluted earnings per share.
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 the table included later in this release for descriptions of the actual adjustments made in the current period and the corresponding prior period.
About Bloomin’
Bloomin’
Forward-Looking Statements
Certain statements contained herein, including statements under the headings “Statement from
Note: Numerical figures included in this release have been subject to rounding adjustments.
BLOOMIN’ BRANDS, INC. |
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INCOME FROM OPERATIONS, NET INCOME AND DILUTED EARNINGS PER SHARE NON-GAAP RECONCILIATIONS |
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(UNAUDITED) |
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THIRTEEN WEEKS ENDED |
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(in thousands, except per share data) |
(PRELIMINARY) |
|
|
||||
(Loss) income from operations |
$ |
(41,568 |
) |
|
$ |
82,494 |
|
Operating (loss) income margin |
(4.1 |
)% |
|
7.3 |
% |
||
Adjustments: |
|
|
|
||||
COVID-19 related costs (1) |
48,876 |
|
|
— |
|
||
Severance and other transformational costs (2) |
22,232 |
|
|
2,855 |
|
||
Restaurant relocations and related costs (3) |
592 |
|
|
1,032 |
|
||
Legal and other matters |
178 |
|
|
— |
|
||
Restaurant and asset impairments and closing costs (4) |
(2,797 |
) |
|
2,131 |
|
||
Total income from operations adjustments |
$ |
69,081 |
|
|
$ |
6,018 |
|
Adjusted income from operations |
$ |
27,513 |
|
|
$ |
88,512 |
|
Adjusted operating income margin |
2.7 |
% |
|
7.8 |
% |
||
Net (loss) income attributable to common stockholders |
$ |
(38,107 |
) |
|
$ |
64,300 |
|
Adjustments: |
|
|
|
||||
Income from operations adjustments |
69,081 |
|
|
6,018 |
|
||
Total adjustments, before income taxes |
69,081 |
|
|
6,018 |
|
||
Adjustment to provision for income taxes (5) |
(21,995 |
) |
|
(819 |
) |
||
Redemption of preferred stock in excess of carrying value (6) |
3,496 |
|
|
— |
|
||
Net adjustments |
50,582 |
|
|
5,199 |
|
||
Adjusted net income |
$ |
12,475 |
|
|
$ |
69,499 |
|
|
|
|
|
||||
Diluted (loss) earnings per share attributable to common stockholders |
$ |
(0.44 |
) |
|
$ |
0.69 |
|
Adjusted diluted earnings per share |
$ |
0.14 |
|
|
$ |
0.75 |
|
|
|
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|
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Basic weighted average common shares outstanding |
87,129 |
|
|
91,415 |
|
||
Diluted weighted average common shares outstanding (7) |
87,963 |
|
|
92,661 |
|
_________________ | ||
Note: The unaudited data presented in this table is preliminary, based upon certain management estimates and subject to the completion of our procedures for the preparation and review of our quarterly financial statements. We have not completed our final closing procedures related to our analysis of goodwill, intangible assets and certain other long-lived assets for impairment and the related income tax provision adjustments that may result from completion of such procedures. | ||
(1) Represents costs incurred in connection with the economic impact of the COVID-19 pandemic, primarily consisting of fixed asset and right-of-use asset impairments, inventory obsolescence and spoilage, contingent lease liabilities and current expected credit losses. |
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(2) Relates to severance and other costs incurred as a result of transformational and restructuring activities. |
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(3) Represents asset impairment charges and accelerated depreciation incurred in connection with our relocation program. |
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(4) Includes a lease buyout gain of |
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(5) Represents income tax effect of the adjustments for the periods presented. |
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(6) Represents consideration paid in excess of the carrying value for the redemption of preferred stock of our Abbraccio subsidiary. |
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(7) Due to the GAAP net loss, the effect of dilutive securities was excluded from the calculation of GAAP diluted (loss) earnings per share for the thirteen weeks ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200505005534/en/
Group Vice President, IR & Finance
(813) 830-5311
Source: Bloomin’