SEC Filing | Bloomin’ Brands, Inc.

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blmn-20200628

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2020

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-35625

https://cdn.kscope.io/87f132256ec2124c51f4df28554c2577-blmn-20200628_g1.jpg

BLOOMIN’ BRANDS, INC.

(Exact name of registrant as specified in its charter)


Delaware						20-8023465
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

2202 North West Shore Boulevard, Suite 500, Tampa, FL 33607

(Address of principal executive offices) (Zip Code)

(813) 282-1225

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

$0.01 par value

BLMN

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐

Smaller reporting company ☐ Emerging growth company ☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 28, 2020, 87,546,678 shares of common stock of the registrant were outstanding.

Table of Contents

BLOOMIN’ BRANDS, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the Quarterly Period Ended June 28, 2020

(Unaudited)

TABLE OF CONTENTS


	PART I — FINANCIAL INFORMATION	Page No.

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Financial Statements:

	Consolidated Balance Sheets — June 28, 2020 and December 29, 2019	3

	Consolidated Statements of Operations and Comprehensive (Loss) Income — For the Thirteen and Twenty-Six Weeks Ended June 28, 2020 and June 30, 2019	4

	Consolidated Statements of Changes in Stockholders’ Equity — For the Thirteen and Twenty-Six Weeks Ended June 28, 2020 and June 30, 2019	5

	Condensed Consolidated Statements of Cash Flows — For the Twenty-Six Weeks Ended June 28, 2020 and June 30, 2019	7

	Notes to Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55

Item 4.	Controls and Procedures	55

	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	56

Item 1A.	Risk Factors	56

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59

Item 6.	Exhibits	59

	Signature	61

Table of Contents

BLOOMIN’ BRANDS, INC.

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA, UNAUDITED)


	JUNE 28, 2020		DECEMBER 29, 2019
ASSETS
Current assets
Cash and cash equivalents	$	181,432	$	67,145
Restricted cash and cash equivalents	1,099		—
Inventories	63,563		86,861

Other current assets, net	81,489		186,462
Total current assets	327,583		340,468


Property, fixtures and equipment, net	930,032		1,036,077
Operating lease right-of-use assets	1,212,916		1,266,548
Goodwill	271,395		288,439
Intangible assets, net	463,036		470,615
Deferred income tax assets, net	129,507		73,426
Other assets, net	99,106		117,110
Total assets	$	3,433,575	$	3,592,683


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	104,808	$	174,877
Accrued and other current liabilities	380,049		391,451
Unearned revenue	293,627		369,282

Current portion of long-term debt	32,354		26,411
Total current liabilities	810,838		962,021

Non-current operating lease liabilities	1,248,941		1,279,051
Deferred income tax liabilities	3,262		13,777

Long-term debt, net	1,178,438		1,022,293
Other long-term liabilities, net	162,898		138,060
Total liabilities	3,404,377		3,415,202
Commitments and contingencies (Note 20)


Stockholders’ equity
Bloomin’ Brands stockholders’ equity
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of June 28, 2020 and December 29, 2019	—		—
Common stock, $0.01 par value, 475,000,000 shares authorized; 87,533,599 and 86,945,869 shares issued and outstanding as of June 28, 2020 and December 29, 2019, respectively	875		869
Additional paid-in capital	1,123,613		1,094,338
Accumulated deficit	(886,248)		(755,089)
Accumulated other comprehensive loss	(217,130)		(169,776)
Total Bloomin’ Brands stockholders’ equity	21,110		170,342
Noncontrolling interests	8,088		7,139
Total stockholders’ equity	29,198		177,481
Total liabilities and stockholders’ equity	$	3,433,575	$	3,592,683

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)


	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
	JUNE 28, 2020		JUNE 30, 2019		JUNE 28, 2020		JUNE 30, 2019
Revenues
Restaurant sales	$	576,261	$	1,005,687	$	1,572,498	$	2,117,329
Franchise and other revenues	2,198		16,243		14,298		32,732
Total revenues	578,459		1,021,930		1,586,796		2,150,061
Costs and expenses
Cost of sales	180,758		312,679		500,451		664,790
Labor and other related	205,537		301,213		514,806		620,228
Other restaurant operating	177,846		240,895		424,401		491,749
Depreciation and amortization	45,784		49,788		94,052		99,270
General and administrative	55,487		71,955		140,289		142,544
Provision for impaired assets and restaurant closings	24,959		1,940		66,277		5,526
Total costs and expenses	690,371		978,470		1,740,276		2,024,107
(Loss) income from operations	(111,912)		43,460		(153,480)		125,954
Loss on modification of debt	(237)		—		(237)		—
Other income (expense), net	581		12		(212)		(156)
Interest expense, net	(16,639)		(12,448)		(28,347)		(23,629)
(Loss) income before (benefit) provision for income taxes	(128,207)		31,024		(182,276)		102,169
(Benefit) provision for income taxes	(35,779)		1,215		(55,434)		6,711
Net (loss) income	(92,428)		29,809		(126,842)		95,458
Less: net (loss) income attributable to noncontrolling interests	(172)		788		25		2,137
Net (loss) income attributable to Bloomin’ Brands	(92,256)		29,021		(126,867)		93,321
Redemption of preferred stock in excess of carrying value	—		—		(3,496)		—
Net (loss) income attributable to common stockholders	$	(92,256)	$	29,021	$	(130,363)	$	93,321

Net (loss) income	$	(92,428)	$	29,809	$	(126,842)	$	95,458
Other comprehensive (loss) income:
Foreign currency translation adjustment	(29,146)		(8,476)		(37,107)		(2,721)

Unrealized loss on derivatives, net of tax	(1,556)		(7,239)		(14,892)		(11,620)
Reclassification of adjustment for loss (gain) on derivatives included in Net (loss) income, net of tax	2,585		130		3,981		(234)
Comprehensive (loss) income	(120,545)		14,224		(174,860)		80,883
Less: comprehensive (loss) income attributable to noncontrolling interests	(172)		896		(639)		2,153
Comprehensive (loss) income attributable to Bloomin’ Brands	$	(120,373)	$	13,328	$	(174,221)	$	78,730

(Loss) earnings per share attributable to common stockholders:
Basic	$	(1.05)	$	0.32	$	(1.49)	$	1.03
Diluted	$	(1.05)	$	0.32	$	(1.49)	$	1.02
Weighted average common shares outstanding:
Basic	87,496		90,194		87,312		90,805
Diluted	87,496		90,953		87,312		91,807

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)


	BLOOMIN’ BRANDS, INC.
	COMMON STOCK					ADDITIONAL PAID-IN CAPITAL		ACCUM- ULATED DEFICIT		ACCUMULATED OTHER COMPREHENSIVE LOSS		NON-CONTROLLING INTERESTS		TOTAL
	SHARES	AMOUNT
Balance, March 29, 2020	87,417	$	874	$	1,074,081	$	(793,992)	$	(189,013)	$	8,193	$	100,143

Net loss	—	—		—		(92,256)		—		(172)		(92,428)
Other comprehensive loss, net of tax	—	—		—		—		(28,117)		—		(28,117)


Stock-based compensation	—	—		5,071		—		—		—		5,071

Common stock issued under stock plans (1)	117	1		(356)		—		—		—		(355)

Distributions to noncontrolling interests	—	—		—		—		—		(27)		(27)
Contributions from noncontrolling interests	—	—		—		—		—		94		94
Equity component value of convertible note issuance, net of tax of $650	—	—		64,367		—		—		—		64,367
Sale of common stock warrant	—	—		46,690		—		—		—		46,690
Purchase of convertible note hedge	—	—		(66,240)		—		—		—		(66,240)



Balance, June 28, 2020	87,534	$	875	$	1,123,613	$	(886,248)	$	(217,130)	$	8,088	$	29,198

Balance, December 29, 2019	86,946	$	869	$	1,094,338	$	(755,089)	$	(169,776)	$	7,139	$	177,481
Cumulative-effect from a change in accounting principle, net of tax	—	—		—		(4,292)		—		—		(4,292)
Net (loss) income	—	—		—		(126,867)		—		25		(126,842)
Other comprehensive loss, net of tax	—	—		—		—		(47,871)		(147)		(48,018)
Cash dividends declared, $0.20 per common share	—	—		(17,480)		—		—		—		(17,480)

Stock-based compensation	—	—		8,360		—		—		—		8,360
Consideration for preferred stock in excess of carrying value, net of tax	—	—		(3,496)		—		517		1,261		(1,718)
Common stock issued under stock plans (1)	588	6		(2,868)		—		—		—		(2,862)
Purchase of noncontrolling interests	—	—		(58)		—		—		1		(57)
Distributions to noncontrolling interests	—	—		—		—		—		(338)		(338)
Contributions from noncontrolling interests	—	—		—		—		—		147		147
Equity component value of convertible note issuance, net of tax of $650	—	—		64,367		—		—		—		64,367
Sale of common stock warrant	—	—		46,690		—		—		—		46,690
Purchase of convertible note hedge	—	—		(66,240)		—		—		—		(66,240)


Balance, June 28, 2020	87,534	$	875	$	1,123,613	$	(886,248)	$	(217,130)	$	8,088	$	29,198

Table of Contents

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)


	BLOOMIN’ BRANDS, INC.
	COMMON STOCK					ADDITIONAL PAID-IN CAPITAL		ACCUM- ULATED DEFICIT		ACCUMULATED OTHER COMPREHENSIVE LOSS		NON-CONTROLLING INTERESTS		TOTAL
	SHARES	AMOUNT
Balance, March 31, 2019	91,647	$	916	$	1,099,346	$	(714,425)	$	(141,653)	$	8,179	$	252,363
Net income	—	—		—		29,021		—		788		29,809
Other comprehensive (loss) income, net of tax	—	—		—		—		(