UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Date
of Report (Date of earliest event reported) April 26,
2019
BLOOMIN’ BRANDS, INC.
(Exact name of registrant as
specified in its
charter)
Delaware |
001-35625 |
20-8023465 |
(State or other jurisdiction of
incorporation) |
(Commission File Number) |
(IRS
Employer Identification No.) |
2202 North West Shore Boulevard, Suite 500, Tampa,
Florida 33607
(Address of principal executive offices) (Zip
Code)
Registrant’s
telephone number, including area code (813)
282-1225
N/A
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act
of 1934 (§240.12b-2 of this chapter).
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
Item 2.02 |
Results of Operations and Financial Condition
|
On April 26, 2019, the Company issued a press release reporting its financial results
for the thirteen weeks ended March 31, 2019. A copy of the release is attached as Exhibit
99.1.
The information contained in Item 2.02 of this report, and the exhibit attached hereto, is being furnished and shall not be deemed “filed” for any purpose, and shall not be deemed incorporated
by reference in any document whether or not filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, regardless of any general incorporation language in any such document.
Item 9.01 |
Financial Statements and
Exhibits |
(d)
Exhibits.
Exhibit Number |
Description | ||
99.1 |
|||
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
BLOOMIN’ BRANDS,
INC. | |||
(Registrant) | |||
Date: |
April 26, 2019 |
By: |
/s/ Christopher
Meyer |
Christopher Meyer | |||
Executive Vice President and Chief Financial
Officer (Principal Financial and Accounting Officer) | |||
3
|
NEWS |
Exhibit
99.1 | ||
Mark Graff |
||||
Vice President, IR &
Finance |
||||
(813) 830-5311 |
||||
Bloomin’ Brands Announces
2019 Q1 Diluted EPS of $0.69 and
Adjusted Diluted EPS of
$0.75
Q1 Comparable Restaurant Sales Growth of 3.5% at Outback Steakhouse
Q1 GAAP Operating
Margin Expansion of 30 bps and 70 bps on a Comparable Adjusted Basis
Reaffirms Full-Year 2019 Guidance,
Including Adjusted Diluted EPS, U.S. Comparable Sales, and
Margins
TAMPA, Fla., April 26, 2019 - Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for the first quarter
2019 (“Q1
2019”) compared to the first quarter 2018 (“Q1
2018”).
Highlights for Q1 2019 include the
following:
• |
Comparable restaurant sales increased
3.5% at U.S. Outback Steakhouse |
• |
Combined U.S. comparable restaurant sales increased 2.4% |
• |
Comparable restaurant sales increased
3.7% for Outback Steakhouse in Brazil |
• |
Opened six new restaurants, including five in international
markets |
Diluted EPS and Adjusted Diluted
EPS
Our Q1 2019 results include the impact of
adopting the new lease accounting standard. 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 of approximately $3.1 million. This represents a three 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.
Q1 |
|||||||||||
2019 |
2018 |
CHANGE | |||||||||
Diluted earnings per share |
$ |
0.69 |
$ |
0.68 |
$ |
0.01 |
|||||
Adjustments
|
0.06 |
0.03 |
0.03 |
||||||||
Adjusted diluted earnings per share |
$
|
0.75 |
$
|
0.71 |
$
|
0.04 |
|||||
Remove new lease
accounting standard impact (1) |
— |
(0.03 |
) |
0.03 |
|||||||
Adjusted diluted earnings per share on a comparable basis (1) |
$
|
0.75 |
$
|
0.68 |
$
|
0.07 |
|||||
________________
See Non-GAAP Measures later in this release.
(1) |
In Q1 2018 both GAAP and adjusted diluted earnings per share were positively impacted by the benefit of
deferred gains on sale-leaseback transactions by approximately $0.03. 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. |
1
CEO
Comments
“The first quarter was a strong start to the year, and sets us up well to achieve our 2019 goals,” said David Deno, CEO. “Outback continues its strong sales momentum marking the ninth
consecutive quarter of meaningful outperformance versus the industry. In addition, we continue to make progress against our growth platforms and this is showing up in increased sales and margin expansion across the portfolio. In the first quarter,
operating margin grew on a comparable basis versus last
year.”
First Quarter Financial
Results
As described above, our Q1 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) |
Q1
2019 |
Q1
2018 |
CHANGE |
Q1
2018 |
CHANGE | ||||||||||||
Total
revenues |
$ |
1,128.1 |
$ |
1,116.5 |
1.0 |
% |
$ |
1,116.5 |
1.0 |
% | |||||||
GAAP restaurant-level
operating margin |
17.1 |
% |
16.6 |
% |
0.5 |
% |
16.3 |
% |
0.8 |
% | |||||||
Adjusted restaurant-level operating margin
(2) |
17.1 |
% |
16.5 |
% |
0.6 |
% |
16.2 |
% |
0.9 |
% | |||||||
GAAP operating income margin |
7.3 |
% |
7.0 |
% |
0.3 |
% |
6.7 |
% |
0.6 |
% | |||||||
Adjusted operating income
margin (2) |
7.8 |
% |
7.4 |
% |
0.4 |
% |
7.1 |
% |
0.7 |
% | |||||||
___________________
(1) |
To improve comparability in this table, we removed the benefit of deferred gains on sale-leaseback
transactions from our Q1 2018 results. |
(2) |
See Non-GAAP Measures later in this
release. |
• |
The increase in total revenues was primarily due to higher U.S. comparable restaurant sales and the
net impact of restaurant openings and closures, partially offset by foreign currency translation. |
• |
The increase in reported GAAP operating income margin was primarily due to increases in U.S.
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. |
First Quarter Comparable Restaurant
Sales
THIRTEEN
WEEKS ENDED MARCH 31, 2019 |
COMPANY-OWNED | ||
Comparable restaurant
sales (stores open 18 months or more): |
|||
U.S.
|
|||
Outback
Steakhouse |
3.5 |
% | |
Carrabba’s Italian Grill |
0.3 |
% | |
Bonefish
Grill |
1.9 |
% | |
Fleming’s Prime Steakhouse & Wine
Bar |
0.6 |
% | |
Combined
U.S. |
2.4 |
% | |
International |
|||
Outback Steakhouse - Brazil |
3.7 |
% | |
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.
2
Conference
Call
The Company will host a conference call today, April 26th 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 Friday, May 10, 2019. The conference ID for the live call and replay is 13689766. 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 approximately 1,500 restaurants in 48 states, Puerto Rico, Guam and 20 countries, some of which are franchise locations. For more information, please
visit
www.bloominbrands.com.
3
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.
4
TABLE
ONE | |||||||
BLOOMIN’
BRANDS, INC. | |||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS | |||||||
(UNAUDITED) | |||||||
THIRTEEN
WEEKS ENDED | |||||||
(in thousands, except per share
data) |
MARCH 31, 2019 |
APRIL 1, 2018 | |||||
Revenues |
|||||||
Restaurant sales |
$ |
1,111,642 |
$ |
1,099,003 |
|||
Franchise and other
revenues |
16,489
|
17,462
|
|||||
Total revenues |
1,128,131 |
1,116,465 |
|||||
Costs and
expenses |
|||||||
Cost of sales |
352,111 |
352,132 |
|||||
Labor and other
related |
319,015 |
311,062 |
|||||
Other restaurant operating |
250,854 |
253,345 |
|||||
Depreciation and
amortization |
49,482 |
50,120 |
|||||
General and administrative |
70,589 |
68,696 |
|||||
Provision for impaired
assets and restaurant closings |
3,586
|
2,739
|
|||||
Total costs and expenses |
1,045,637 |
1,038,094 |
|||||
Income from
operations |
82,494 |
78,371 |
|||||
Other (expense) income, net |
(168 |
) |
1 |
||||
Interest expense,
net |
(11,181
|
)
|
(10,310
|
)
| |||
Income before provision for income
taxes |
71,145 |
68,062 |
|||||
Provision for income
taxes |
5,496
|
1,925
|
|||||
Net income |
65,649 |
66,137 |
|||||
Less: net income
attributable to noncontrolling interests |
1,349
|
739
|
|||||
Net income attributable to Bloomin’
Brands |
$ |
64,300 |
$ |
65,398 |
|||
Earnings per share: |
|||||||
Basic |
$
|
0.70 |
$
|
0.71 |
|||
Diluted |
$ |
0.69 |
$ |
0.68 |
|||
Weighted average common shares
outstanding: |
|||||||
Basic |
91,415
|
92,268
|
|||||
Diluted |
92,661 |
95,782 |
|||||
5
TABLE
TWO | |||||||
BLOOMIN’ BRANDS,
INC. | |||||||
SEGMENT
RESULTS | |||||||
(UNAUDITED) | |||||||
(dollars in
thousands) |
THIRTEEN WEEKS ENDED | ||||||
U.S. Segment |
MARCH 31, 2019 |
APRIL 1, 2018 | |||||
Revenues |
|||||||
Restaurant sales |
$ |
1,000,813 |
$ |
984,344 |
|||
Franchise and other
revenues |
13,694
|
14,363
|
|||||
Total revenues |
$ |
1,014,507 |
$ |
998,707 |
|||
Restaurant-level
operating margin |
16.7 |
% |
16.3 |
% | |||
Income from operations |
$ |
113,035 |
$ |
109,134 |
|||
Operating income
margin |
11.1 |
% |
10.9 |
% | |||
International
Segment |
|||||||
Revenues |
|||||||
Restaurant sales |
$ |
110,829 |
$ |
114,659 |
|||
Franchise and other
revenues |
2,795
|
3,099
|
|||||
Total revenues |
$ |
113,624 |
$ |
117,758 |
|||
Restaurant-level
operating margin |
22.3 |
% |
19.4 |
% | |||
Income from operations |
$ |
13,720 |
$ |
8,325 |
|||
Operating income
margin |
12.1 |
% |
7.1 |
% | |||
Reconciliation of Segment Income
from Operations to Consolidated Income from Operations |
|||||||
Segment income from
operations |
|||||||
U.S. |
$ |
113,035 |
$ |
109,134 |
|||
International
|
13,720
|
8,325
|
|||||
Total segment income from
operations |
126,755 |
117,459 |
|||||
Unallocated corporate
operating expense |
(44,261
|
)
|
(39,088
|
)
| |||
Total income from operations |
$ |
82,494 |
$ |
78,371 |
|||
TABLE
THREE | |||||||
BLOOMIN’
BRANDS, INC. | |||||||
SUPPLEMENTAL BALANCE
SHEET INFORMATION | |||||||
(UNAUDITED) | |||||||
(in thousands) |
MARCH 31, 2019 |
DECEMBER 30, 2018 | |||||
Cash and cash
equivalents |
$ |
82,766 |
$ |
71,823 |
|||
Net working capital (deficit) (1) |
$ |
(572,151 |
) |
$ |
(455,556 |
) | |
Total
assets |
$ |
3,552,547 |
$ |
2,464,774 |
|||
Total debt, net |
$ |
1,064,310 |
$ |
1,094,775 |
|||
Total stockholders’
equity |
$ |
252,363 |
$ |
54,817 |
|||
Common stock outstanding |
91,647 |
91,272 |
|||||
_________________
(1) |
The change in net working capital (deficit) during the thirteen weeks ended March 31, 2019 is primarily due to current lease liabilities recognized 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. |
6
TABLE
FOUR | ||||||||||||||||||||
BLOOMIN’
BRANDS, INC. | ||||||||||||||||||||
RESTAURANT-LEVEL
OPERATING MARGIN NON-GAAP RECONCILIATION | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
THIRTEEN
WEEKS ENDED |
THIRTEEN
WEEKS ENDED |
(UNFAVORABLE) FAVORABLE CHANGE IN ADJUSTED YEAR TO DATE | ||||||||||||||||||
MARCH 31,
2019 |
APRIL 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 |
31.7 |
% |
31.7 |
% |
32.0 |
% |
32.0 |
% |
32.0 |
% |
0.3 |
% |
0.3 |
% | ||||||
Labor and other related |
28.7 |
% |
28.7 |
% |
28.3 |
% |
28.3 |
% |
28.3 |
% |
(0.4 |
)% |
(0.4 |
)% | ||||||
Other restaurant
operating |
22.6 |
% |
22.6 |
% |
23.1 |
% |
23.1 |
% |
23.4 |
% |
0.5 |
% |
0.8 |
% | ||||||
Restaurant-level operating
margin (3) |
17.1 |
% |
17.1 |
% |
16.6 |
% |
16.5 |
% |
16.2 |
% |
0.6 |
% |
0.9 |
% | ||||||
Segments - Restaurant-level operating margin (3): |
||||||||||||||||||||
U.S. |
16.7 |
% |
16.7 |
% |
16.3 |
% |
16.2 |
% |
0.5 |
% |
||||||||||
International |
22.3 |
% |
22.3 |
% |
19.4 |
% |
19.4 |
% |
2.9 |
% |
||||||||||
_________________
(1) |
The table set forth below titled
“Restaurant-level Operating Margin Adjustments” provides additional information regarding the adjustments for each period
presented. |
(2) |
In Q1 2018 both GAAP and adjusted restaurant-level operating margin were positively impacted by the
benefit of deferred gains on sale-leaseback transactions by approximately $3.1 million. 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 | |||
(dollars in
millions) |
APRIL 1, 2018 (1) | ||
Restaurant and asset
impairments and closing costs |
$ |
0.8 |
|
Restaurant relocations and related
costs |
0.2 |
||
$
|
1.0 |
||
_________________
(1) |
All adjustments were recorded within the U.S.
segment. |
7
TABLE
FIVE | |||||||
BLOOMIN’
BRANDS, INC. | |||||||
INCOME FROM
OPERATIONS, NET INCOME AND DILUTED EARNINGS PER SHARE NON-GAAP RECONCILIATIONS | |||||||
(UNAUDITED) | |||||||
THIRTEEN
WEEKS ENDED | |||||||
(in thousands, except per share
data) |
MARCH 31, 2019 |
APRIL 1, 2018 | |||||
Income from
operations |
$ |
82,494 |
$ |
78,371 |
|||
Operating income
margin |
7.3 |
% |
7.0 |
% | |||
Adjustments: |
|||||||
Severance (1) |
$ |
2,855 |
$ |
965 |
|||
Restaurant and asset
impairments and closing costs (2) |
2,131 |
1,295 |
|||||
Restaurant relocations and related costs
(3) |
1,032 |
1,725 |
|||||
Legal and contingent
matters |
— |
470 |
|||||
Total income from operations
adjustments |
$
|
6,018 |
$
|
4,455 |
|||
Adjusted income from
operations |
$
|
88,512 |
$
|
82,826 |
|||
Adjusted operating income
margin |
7.8 |
% |
7.4 |
% | |||
Net income attributable to Bloomin’
Brands |
$ |
64,300 |
$ |
65,398 |
|||
Adjustments: |
|||||||
Income from operations
adjustments |
6,018 |
4,455 |
|||||
Total adjustments, before income
taxes |
6,018 |
4,455 |
|||||
Adjustment to provision for income taxes (4) |
(819 |
) |
(1,681 |
) | |||
Net
adjustments |
5,199
|
2,774
|
|||||
Adjusted net income |
$ |
69,499 |
$ |
68,172 |
|||
Diluted earnings per share |
$ |
0.69 |
$ |
0.68 |
|||
Adjusted diluted earnings per
share |
$ |
0.75 |
$ |
0.71 |
|||
Remove new lease
accounting standard impact (5) |
—
|
(0.03
|
)
| ||||
Adjusted diluted earnings per share on a comparable
basis (5) |
$ |
0.75 |
$ |
0.68 |
|||
Diluted weighted average common shares
outstanding |
92,661 |
95,782 |
|||||
_________________
(1) |
Relates to severance expense incurred as a result of restructuring activities. |
(2) |
Represents asset impairment charges and related costs primarily associated with approved closure initiatives. |
(3) |
Represents asset impairment charges and accelerated depreciation incurred in connection with our relocation program. |
(4) |
Represents income tax effect of the adjustments for the periods presented. |
(5) |
In Q1 2018 both GAAP and adjusted diluted earnings per share were positively impacted by the benefit of
deferred gains on sale-leaseback transactions by approximately $0.03. 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 | |||||||
(in thousands) |
MARCH 31, 2019 |
APRIL 1, 2018 | |||||
Other restaurant
operating |
$ |
(22 |
) |
$ |
(958 |
) | |
Depreciation and amortization |
565 |
1,588 |
|||||
General and
administrative |
3,255 |
1,557 |
|||||
Provision for impaired assets and restaurant
closings |
2,220 |
2,268 |
|||||
Provision for income
taxes |
(819
|
)
|
(1,681
|
)
| |||
Net adjustments |
$
|
5,199 |
$ |
2,774 |
|||
8
TABLE
SIX | |||||||
BLOOMIN’
BRANDS, INC. | |||||||
SEGMENT INCOME FROM
OPERATIONS NON-GAAP RECONCILIATION | |||||||
(UNAUDITED) | |||||||
U.S. Segment |
THIRTEEN
WEEKS ENDED | ||||||
(dollars in
thousands) |
MARCH 31, 2019 |
APRIL 1, 2018 | |||||
Income from operations |
$ |
113,035 |
$ |
109,134 |
|||
Operating income
margin |
11.1 |
% |
10.9 |
% | |||
Adjustments: |
|||||||
Restaurant and asset impairments and closing costs
(1) |
$ |
1,835 |
$ |
(616 |
) | ||
Restaurant relocations
and related costs (2) |
1,032 |
1,725 |
|||||
Severance (3) |
700 |
888 |
|||||
Adjusted income from
operations |
$ |
116,602
|
$ |
111,131
|
|||
Adjusted operating income
margin |
11.5 |
% |
11.1 |
% | |||
International
Segment |
|||||||
(dollars
in thousands) |
|||||||
Income from operations |
$ |
13,720 |
$ |
8,325 |
|||
Operating
income margin |
12.1 |
% |
7.1 |
% | |||
Adjustments: |
|||||||
Restaurant and asset
impairments and closing costs (1) |
296 |
1,911 |
|||||
Adjusted income from operations |
$
|
14,016 |
$
|
10,236 |
|||
Adjusted operating
income margin |
12.3 |
% |
8.7 |
% | |||
_________________
(1) |
Represents asset impairment charges and related costs primarily associated with approved closure
initiatives. |
(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. |
9
TABLE
SEVEN | ||||||||||||||
BLOOMIN’
BRANDS, INC. | ||||||||||||||
COMPARATIVE
RESTAURANT INFORMATION | ||||||||||||||
(UNAUDITED) | ||||||||||||||
Number of restaurants (at end of
the period): |
DECEMBER 30, 2018 |
OPENINGS |
CLOSURES |
OTHER |
MARCH 31, 2019 | |||||||||
U.S. |
||||||||||||||
Outback Steakhouse |
||||||||||||||
Company-owned
|
579 |
1 |
(1 |
) |
— |
579 |
||||||||
Franchised |
154 |
— |
(1 |
) |
— |
153 |
||||||||
Total |
733
|
1
|
(2
|
)
|
—
|
732
|
||||||||
Carrabba’s Italian Grill |
||||||||||||||
Company-owned
(1) |
224 |
— |
(1 |
) |
(18 |
) |
205 |
|||||||
Franchised (1) |
3 |
— |
— |
18 |
21 |
|||||||||
Total |
227
|
—
|
(1
|
)
|
—
|
226
|
||||||||
Bonefish Grill |
||||||||||||||
Company-owned
|
190 |
— |
(1 |
) |
— |
189 |
||||||||
Franchised |
7 |
— |
— |
— |
7 |
|||||||||
Total |
197
|
—
|
(1
|
)
|
— |
196
|
||||||||
Fleming’s Prime Steakhouse & Wine
Bar |
||||||||||||||
Company-owned
|
70
|
—
|
—
|
—
|
70
|
|||||||||
Other |
||||||||||||||
Company-owned
|
5
|
—
|
(3
|
)
|
—
|
2
|
||||||||
U.S. Total |
1,232
|
1
|
(7
|
)
|
— |
1,226
|
||||||||
International |
||||||||||||||
Company-owned |
||||||||||||||
Outback
Steakhouse—Brazil (2) |
92 |
3 |
— |
— |
95 |
|||||||||
Other |
33 |
1 |
— |
— |
34 |
|||||||||
Franchised |
||||||||||||||
Outback Steakhouse - South Korea |
76 |
— |
(4 |
) |
— |
72 |
||||||||
Other |
55 |
1 |
(2 |
) |
—
|
54 |
||||||||
International Total |
256
|
5
|
(6
|
)
|
—
|
255
|
||||||||
System-wide
total |
1,488
|
6
|
(13
|
)
|
— |
1,481
|
||||||||
____________________
(1) |
In March 2019, we sold 18 Carrabba’s Italian Grill locations, which are now operated as
franchises. |
(2) |
The restaurant counts for Brazil are reported as of November 30, 2018 and February 28, 2019 to
correspond with the balance sheet dates of this
subsidiary. |
10
TABLE
EIGHT | |||||
BLOOMIN’
BRANDS, INC. | |||||
COMPARABLE
RESTAURANT SALES INFORMATION | |||||
(UNAUDITED) | |||||
THIRTEEN
WEEKS ENDED | |||||
MARCH 31, 2019 |
APRIL 1, 2018 | ||||
Year over year percentage
change: |
|||||
Comparable restaurant sales (stores open 18 months or
more) (1): |
|||||
U.S. |
|||||
Outback Steakhouse |
3.5 |
% |
4.3 |
% | |
Carrabba’s Italian
Grill |
0.3 |
% |
0.9 |
% | |
Bonefish Grill |
1.9 |
% |
(0.1 |
)% | |
Fleming’s Prime
Steakhouse & Wine Bar |
0.6 |
% |
2.9 |
% | |
Combined U.S. |
2.4 |
% |
2.8 |
% | |
International
|
|||||
Outback Steakhouse - Brazil (2) |
3.7 |
% |
1.1 |
% | |
Traffic: |
|||||
U.S. |
|||||
Outback Steakhouse |
(0.5 |
)% |
2.2 |
% | |
Carrabba’s Italian
Grill |
(1.3 |
)% |
(5.6 |
)% | |
Bonefish Grill |
(1.9 |
)% |
(2.4 |
)% | |
Fleming’s Prime Steakhouse &
Wine Bar |
(1.6 |
)% |
(2.4 |
)% | |
Combined U.S. |
(0.9 |
)% |
(0.2 |
)% | |
International
|
|||||
Outback Steakhouse - Brazil |
(2.4 |
)% |
(1.6 |
)% | |
Average check per person (3): |
|||||
U.S. |
|||||
Outback Steakhouse |
4.0 |
% |
2.1 |
% | |
Carrabba’s Italian
Grill |
1.6 |
% |
6.5 |
% | |
Bonefish Grill |
3.8 |
% |
2.3 |
% | |
Fleming’s Prime
Steakhouse & Wine Bar |
2.2 |
% |
5.3 |
% | |
Combined U.S. |
3.3 |
% |
3.0 |
% | |
International
|
|||||
Outback Steakhouse - Brazil |
6.5 |
% |
3.0 |
% | |
____________________
(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.
11