SEC Filing | Bloomin’ Brands, Inc.

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blmn-20210926

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 September 26, 2021
			or
☐			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/249cae5e122b24576bbfaa889b182917-blmn-20210926_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 November 1, 2021, 89,249,167 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 September 26, 2021

(Unaudited)

TABLE OF CONTENTS


	PART I — FINANCIAL INFORMATION	Page No.

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Financial Statements:

	Consolidated Balance Sheets — S eptember 2 6 , 2021 and December 27, 2020	3

	Consolidated Statements of Operations and Comprehensive Income (Loss) — For the Thirteen and T hirty -Ni ne Weeks Ended September 2 6 , 202 1 and September 2 7 , 2 02 0	4

	Consolidated Statements of Changes in Stockholders’ Equity — For the Thirteen and T hirty -Nine Weeks Ended September 2 6 , 202 1 and September 2 7 , 2 02 0	5

	Condensed Consolidated Statements of Cash Flows — For the T hirty -Nine Weeks Ended September 2 6 , 2021 and September 2 7 , 2020	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	56



Item 6.	Exhibits	57

	Signature	58

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)


	SEPTEMBER 26, 2021		DECEMBER 27, 2020
ASSETS
Current assets
Cash and cash equivalents	$	76,337	$	109,980
Restricted cash and cash equivalents	4,247		428
Inventories	72,433		61,928

Other current assets, net	87,642		151,518
Total current assets	240,659		323,854


Property, fixtures and equipment, net	852,105		887,687
Operating lease right-of-use assets	1,152,268		1,172,910
Goodwill	273,490		271,164
Intangible assets, net	456,058		459,983
Deferred income tax assets, net	161,903		153,883
Other assets, net	82,119		92,626
Total assets	$	3,218,602	$	3,362,107


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	157,410	$	141,457
Accrued and other current liabilities	444,591		388,321
Unearned revenue	284,128		381,616

Current portion of long-term debt	11,086		38,710
Total current liabilities	897,215		950,104

Non-current operating lease liabilities	1,196,604		1,217,921


Long-term debt, net	828,065		997,770
Other long-term liabilities, net	130,382		185,355
Total liabilities	3,052,266		3,351,150
Commitments and contingencies (Note 19)


Stockholders’ equity
Bloomin’ Brands stockholders’ equity
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of September 26, 2021 and December 27, 2020	—		—
Common stock, $0.01 par value, 475,000,000 shares authorized; 89,248,056 and 87,855,571 shares issued and outstanding as of September 26, 2021 and December 27, 2020, respectively	892		879
Additional paid-in capital	1,115,464		1,132,808
Accumulated deficit	(758,870)		(918,096)
Accumulated other comprehensive loss	(197,670)		(211,446)
Total Bloomin’ Brands stockholders’ equity	159,816		4,145
Noncontrolling interests	6,520		6,812
Total stockholders’ equity	166,336		10,957
Total liabilities and stockholders’ equity	$	3,218,602	$	3,362,107

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

Table of Contents

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)


	THIRTEEN WEEKS ENDED				THIRTY-NINE WEEKS ENDED
	SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020
Revenues
Restaurant sales	$	996,718	$	766,487	$	3,031,396	$	2,338,985
Franchise and other revenues	13,745		4,773		43,906		19,071
Total revenues	1,010,463		771,260		3,075,302		2,358,056
Costs and expenses
Food and beverage costs	304,300		230,547		908,272		730,998
Labor and other related	290,246		246,861		859,883		761,667
Other restaurant operating	299,788		207,301		762,531		631,702
Depreciation and amortization	40,827		43,417		122,592		137,469
General and administrative	58,880		57,443		182,590		197,732
Provision for impaired assets and restaurant closings	1,585		(54)		8,962		66,223
Total costs and expenses	995,626		785,515		2,844,830		2,525,791
Income (loss) from operations	14,837		(14,255)		230,472		(167,735)
Loss on extinguishment and modification of debt	—		—		(2,073)		(237)
Other income (expense), net	5		1		26		(211)
Interest expense, net	(14,245)		(18,300)		(43,863)		(46,647)
Income (loss) before (benefit) provision for income taxes	597		(32,554)		184,562		(214,830)
(Benefit) provision for income taxes	(4,454)		(14,776)		24,827		(70,210)
Net income (loss)	5,051		(17,778)		159,735		(144,620)
Less: net income (loss) attributable to noncontrolling interests	1,602		(141)		4,879		(116)
Net income (loss) attributable to Bloomin’ Brands	3,449		(17,637)		154,856		(144,504)
Redemption of preferred stock in excess of carrying value	—		—		—		(3,496)
Net income (loss) attributable to common stockholders	$	3,449	$	(17,637)	$	154,856	$	(148,000)

Net income (loss)	$	5,051	$	(17,778)	$	159,735	$	(144,620)
Other comprehensive income (loss):
Foreign currency translation adjustment	1,673		(4,095)		5,113		(41,202)

Unrealized (loss) gain on derivatives, net of tax	(153)		261		(323)		(14,631)
Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax	1,519		2,962		6,036		6,943
Amortization of terminated interest rate swaps, net of tax	1,479		—		2,950		—
Comprehensive income (loss)	9,569		(18,650)		173,511		(193,510)
Less: comprehensive income (loss) attributable to noncontrolling interests	1,602		(141)		4,879		(780)
Comprehensive income (loss) attributable to Bloomin’ Brands	$	7,967	$	(18,509)	$	168,632	$	(192,730)

Earnings (loss) per share attributable to common stockholders:
Basic	$	0.04	$	(0.20)	$	1.74	$	(1.69)
Diluted	$	0.03	$	(0.20)	$	1.42	$	(1.69)
Weighted average common shares outstanding:
Basic	89,229		87,558		88,890		87,394
Diluted	107,783		87,558		109,410		87,394

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, June 27, 2021	89,211	$	892	$	1,109,904	$	(762,319)	$	(202,188)	$	6,618	$	152,907

Net income	—	—		—		3,449		—		1,602		5,051
Other comprehensive income, net of tax	—	—		—		—		4,518		—		4,518


Stock-based compensation	—	—		5,593		—		—		—		5,593

Common stock issued under stock plans (1)	37	—		(42)		—		—		—		(42)
Purchase of noncontrolling interests	—	—		9		—		—		(12)		(3)
Distributions to noncontrolling interests	—	—		—		—		—		(2,062)		(2,062)
Contributions from noncontrolling interests	—	—		—		—		—		374		374






Balance, September 26, 2021	89,248	$	892	$	1,115,464	$	(758,870)	$	(197,670)	$	6,520	$	166,336

Balance, December 27, 2020	87,856	$	879	$	1,132,808	$	(918,096)	$	(211,446)	$	6,812	$	10,957
Cumulative-effect from a change in accounting principle, net of tax	—	—		(47,323)		4,370		—		—		(42,953)
Net income	—	—		—		154,856		—		4,879		159,735
Other comprehensive income, net of tax	—	—		—		—		13,776		—		13,776


Stock-based compensation	—	—		20,100		—		—		—		20,100

Common stock issued under stock plans (1)	1,392	13		9,870		—		—		—		9,883
Purchase of noncontrolling interests	—	—		9		—		—		(12)		(3)
Distributions to noncontrolling interests	—	—		—		—		—		(6,203)		(6,203)
Contributions from noncontrolling interests	—	—		—		—		—		1,044		1,044





Balance, September 26, 2021	89,248	$	892	$	1,115,464	$	(758,870)	$	(197,670)	$	6,520	$	166,336

										(CONTINUED...)

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, June 28, 2020	87,534	$	875	$	1,123,613	$	(886,248)	$	(217,130)	$	8,088	$	29,198
Net loss	—	—		—		(17,637)		—		(141)		(17,778)
Other comprehensive loss, net of tax	—	—		—		—		(872)		—		(872)


Stock-based compensation	—	—		2,712		—		—		—		2,712

Common stock issued under stock plans (1)	39	—		(179)		—		—		—		(179)



Distributions to noncontrolling interests	—	—		—		—		—		(745)		(745)
Contributions from noncontrolling interests	—	—		—		—		—		219		219




Balance, September 27, 2020	87,573	$	875	$	1,126,146	$	(903,885)	$	(218,002)	$	7,421	$	12,555

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	—	—		—		(144,504)		—		(116)		(144,620)
Other comprehensive loss, net of tax	—	—		—		—		(48,743)		(147)		(48,890)
Cash dividends declared, $0.20 per common share	—	—		(17,480)		—		—		—		(17,480)

Stock-based compensation	—			11,072		—		—		—		11,072

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)	627	6		(3,047)		—		—		—		(3,041)

Purchase of noncontrolling interests	—	—		(58)		—		—		1		(57)

Distributions to noncontrolling interests	—	—		—		—		—		(1,083)		(1,083)
Contributions from noncontrolling interests	—	—		—		—		—		366		366
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, September 27, 2020	87,573	$	875	$	1,126,146	$	(903,885)	$	(218,002)	$	7,421	$	12,555

________________

(1)Net of forfeitures and shares withheld for employee taxes.

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

Table of Contents

BLOOMIN’ BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS, UNAUDITED)


	THIRTY-NINE WEEKS ENDED
	SEPTEMBER 26, 2021		SEPTEMBER 27, 2020

Cash flows provided by operating activities:
Net income (loss)	$	159,735	$	(144,620)
Adjustments to reconcile Net income (loss) to cash provided by operating activities:
Depreciation and amortization	122,592		137,469
Amortization of debt discounts and issuance costs	3,441		6,504
Amortization of deferred gift card sales commissions	19,277		15,553
Provision for impaired assets and restaurant closings	8,962		66,223
Amortization of unrealized loss on terminated interest rate swaps	3,973		—
Non-cash operating lease costs	57,791		55,401
Provision for expected credit losses and contingent lease liabilities	937		7,420
Inventory obsolescence and spoilage	—		6,835
Stock-based and other non-cash compensation expense	20,100		11,072
Deferred income tax expense (benefit)	3,842		(80,201)





(Gain) loss on disposal of property, fixtures and equipment	(1,218)		1,055
Other, net	1,408		(2,223)
Change in assets and liabilities	(96,594)		(25,517)






Net cash provided by operating activities	304,246		54,971
Cash flows used in investing activities:
Proceeds from disposal of property, fixtures and equipment	7,052		2,088


Capital expenditures	(85,339)		(66,956)
Other investments, net	9,202		8,706
Net cash used in investing activities	$	(69,085)	$	(56,162)

	(CONTINUED...)

Table of Contents

BLOOMIN’ BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS, UNAUDITED)


	THIRTY-NINE WEEKS ENDED
	SEPTEMBER 26, 2021		SEPTEMBER 27, 2020

Cash flows (used in) provided by financing activities:
Proceeds from issuance of long-term debt	$	200,000	$	—

Repayments of long-term debt and finance lease obligations	(428,364)		(19,798)
Proceeds from borrowings on revolving credit facilities	378,000		505,000
Repayments of borrowings on revolving credit facilities	(701,000)		(549,000)

Financing fees	(5,868)		(3,096)
Proceeds from issuance of senior notes	300,000		—
Proceeds from issuance of convertible senior notes	—		230,000
Proceeds from issuance of warrants	—		46,690
Purchase of convertible note hedge	—		(66,240)

Issuance costs related to senior notes