SEC Filing | Bloomin’ Brands, Inc.

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blmn-20220626

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 26, 2022
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/0e3a28cb3c8cfd162a478efabdd75dc2-blmn-20220626_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, 2022, 89,297,078 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 26, 2022

(Unaudited)

TABLE OF CONTENTS


	PART I — FINANCIAL INFORMATION	Page No.

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Financial Statements:

	Consolidated Balance Sheets — June 2 6 , 2022 and December 26, 2021	3

	Consolidated Statements of Operations and Comprehensive (Loss) Income — For the Thirteen and Twenty-Six Weeks Ended June 2 6 , 202 2 and June 2 7 , 2 021	4

	Consolidated Statements of Changes in Stockholders’ Equity — For the Thirteen and Twenty -Six Weeks Ended June 2 6 , 202 2 and June 2 7 , 2 021	5

	Condensed Consolidated Statements of Cash Flows — For the T wenty-Six Weeks Ended Ju ne 2 6 , 2022 and June 2 7 , 2021	7

	Notes to Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48

Item 4.	Controls and Procedures	48

	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	49

Item 1A.	Risk Factors	49

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49



Item 6.	Exhibits	50

	Signature	51

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 26, 2022		DECEMBER 26, 2021
ASSETS
Current assets
Cash and cash equivalents	$	95,346	$	87,585
Restricted cash and cash equivalents	101		1,472
Inventories	80,482		79,112

Other current assets, net	116,997		184,623
Total current assets	292,926		352,792


Property, fixtures and equipment, net	852,155		842,012
Operating lease right-of-use assets	1,122,317		1,130,873
Goodwill	278,780		268,444
Intangible assets, net	452,654		453,412
Deferred income tax assets, net	158,110		168,068
Other assets, net	73,053		78,670
Total assets	$	3,229,995	$	3,294,271


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	185,645	$	167,978
Accrued and other current liabilities	412,831		406,894
Unearned revenue	309,863		398,795

Current portion of long-term debt	1,511		10,958
Total current liabilities	909,850		984,625

Non-current operating lease liabilities	1,168,692		1,179,447


Long-term debt, net	800,222		782,107
Other long-term liabilities, net	88,490		125,242
Total liabilities	2,967,254		3,071,421
Commitments and contingencies (Note 15)


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 26, 2022 and December 26, 2021	—		—
Common stock, $0.01 par value, 475,000,000 shares authorized; 90,151,164 and 89,252,823 shares issued and outstanding as of June 26, 2022 and December 26, 2021, respectively	902		893
Additional paid-in capital	1,169,697		1,119,728
Accumulated deficit	(733,723)		(698,171)
Accumulated other comprehensive loss	(176,054)		(205,989)
Total Bloomin’ Brands stockholders’ equity	260,822		216,461
Noncontrolling interests	1,919		6,389
Total stockholders’ equity	262,741		222,850
Total liabilities and stockholders’ equity	$	3,229,995	$	3,294,271

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 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Revenues
Restaurant sales	$	1,108,918	$	1,055,227	$	2,232,493	$	2,034,678
Franchise and other revenues	16,244		22,139		33,204		30,161
Total revenues	1,125,162		1,077,366		2,265,697		2,064,839
Costs and expenses
Food and beverage costs	364,459		312,102		723,829		603,972
Labor and other related	308,759		294,999		621,270		569,637
Other restaurant operating	263,529		233,450		522,639		462,743
Depreciation and amortization	41,257		40,539		83,032		81,765
General and administrative	59,246		66,462		117,920		123,710
Provision for impaired assets and restaurant closings	193		5,177		2,032		7,377
Total costs and expenses	1,037,443		952,729		2,070,722		1,849,204
Income from operations	87,719		124,637		194,975		215,635
Loss on extinguishment and modification of debt	(107,630)		(2,073)		(107,630)		(2,073)
Loss on fair value adjustment of derivatives, net	(17,685)		—		(17,685)		—
Other income, net	—		—		—		21
Interest expense, net	(12,548)		(14,990)		(26,181)		(29,618)
(Loss) income before provision for income taxes	(50,144)		107,574		43,479		183,965
Provision for income taxes	11,536		22,688		27,465		29,281
Net (loss) income	(61,680)		84,886		16,014		154,684
Less: net income attributable to noncontrolling interests	1,955		2,341		4,138		3,277
Net (loss) income attributable to Bloomin’ Brands	$	(63,635)	$	82,545	$	11,876	$	151,407



Net (loss) income	$	(61,680)	$	84,886	$	16,014	$	154,684
Other comprehensive (loss) income:
Foreign currency translation adjustment	11,940		10,015		23,223		3,440

Unrealized (loss) gain on derivatives, net of tax	—		(128)		573		(170)
Reclassification of adjustments for loss on derivatives included in Net (loss) income, net of tax	273		1,514		954		4,517
Impact of terminated interest rate swaps included in Net (loss) income, net of tax	2,164		1,471		5,185		1,471
Comprehensive (loss) income	(47,303)		97,758		45,949		163,942
Less: comprehensive income attributable to noncontrolling interests	1,955		2,341		4,138		3,277
Comprehensive (loss) income attributable to Bloomin’ Brands	$	(49,258)	$	95,417	$	41,811	$	160,665

(Loss) earnings per share:
Basic	$	(0.72)	$	0.93	$	0.13	$	1.71
Diluted	$	(0.72)	$	0.75	$	0.12	$	1.38
Weighted average common shares outstanding:
Basic	88,898		89,075		89,127		88,721
Diluted	88,898		109,805		102,045		110,223

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 27, 2022	89,185	$	892	$	1,115,458	$	(634,356)	$	(190,431)	$	1,694	$	293,257

Net (loss) income	—	—		—		(63,635)		—		1,955		(61,680)
Other comprehensive income, net of tax	—	—		—		—		14,377		—		14,377
Cash dividends declared, $0.14 per common share	—	—		(12,418)		—		—		—		(12,418)
Repurchase and retirement of common stock	(1,761)	(17)		—		(35,732)		—		—		(35,749)
Stock-based compensation	—	—		4,959		—		—		—		4,959

Common stock issued under stock plans (1)	414	4		1,118		—		—		—		1,122
Purchase of noncontrolling interests, net of tax of $1,142	—	—		(3,301)		—		—		539		(2,762)
Distributions to noncontrolling interests	—	—		—		—		—		(2,513)		(2,513)
Contributions from noncontrolling interests	—	—		—		—		—		244		244





Retirement of convertible senior note hedges	—	—		112,956		—		—		—		112,956
Retirement of warrants	—	—		(97,617)		—		—		—		(97,617)
Issuance of common stock from repurchase of convertible senior notes	2,313	23		48,542		—		—		—		48,565
Balance, June 26, 2022	90,151	$	902	$	1,169,697	$	(733,723)	$	(176,054)	$	1,919	$	262,741

Balance, December 26, 2021	89,253	$	893	$	1,119,728	$	(698,171)	$	(205,989)	$	6,389	$	222,850

Net income	—	—		—		11,876		—		4,138		16,014
Other comprehensive income, net of tax	—	—		—		—		29,935		—		29,935
Cash dividends declared, $0.28 per common share	—	—		(24,977)		—		—		—		(24,977)
Repurchase and retirement of common stock	(2,312)	(23)		—		(47,428)		—		—		(47,451)
Stock-based compensation	—	—		9,802		—		—		—		9,802

Common stock issued under stock plans (1)	897	9		1,998		—		—		—		2,007
Purchase of noncontrolling interests, net of tax of $254	—	—		(735)		—		—		(3,915)		(4,650)
Distributions to noncontrolling interests	—	—		—		—		—		(5,154)		(5,154)
Contributions from noncontrolling interests	—	—		—		—		—		461		461




Retirement of convertible senior note hedges	—	—		112,956		—		—		—		112,956
Retirement of warrants	—	—		(97,617)		—		—		—		(97,617)
Issuance of common stock from repurchase of convertible senior notes	2,313	23		48,542		—		—		—		48,565
Balance, June 26, 2022	90,151	$	902	$	1,169,697	$	(733,723)	$	(176,054)	$	1,919	$	262,741

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 28, 2021	88,855	$	889	$	1,097,639	$	(844,864)	$	(215,060)	$	6,801	$	45,405
Net income	—	—		—		82,545		—		2,341		84,886
Other comprehensive income, net of tax	—	—		—		—		12,872		—		12,872


Stock-based compensation	—	—		9,781		—		—		—		9,781

Common stock issued under stock plans (1)	356	3		2,484		—		—		—		2,487



Distributions to noncontrolling interests	—	—		—		—		—		(2,683)		(2,683)
Contributions from noncontrolling interests	—	—		—		—		—		159		159




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

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	—	—		—		151,407		—		3,277		154,684
Other comprehensive income, net of tax	—	—		—		—		9,258		—		9,258


Stock-based compensation	—			14,507		—		—		—		14,507


Common stock issued under stock plans (1)	1,355	13		9,912		—		—		—		9,925



Distributions to noncontrolling interests	—	—		—		—		—		(4,141)		(4,141)
Contributions from noncontrolling interests	—	—		—		—		—		670		670



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

________________

(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)


	TWENTY-SIX WEEKS ENDED
	JUNE 26, 2022		JUNE 27, 2021

Cash flows provided by operating activities:
Net income	$	16,014	$	154,684
Adjustments to reconcile Net income to cash provided by operating activities:
Depreciation and amortization	83,032		81,765
Amortization of debt discounts and issuance costs	2,025		2,396
Amortization of deferred gift card sales commissions	13,458		14,436
Provision for impaired assets and restaurant closings	2,032		7,377

Non-cash interest expense from terminated interest rate swaps	6,980		1,981
Non-cash operating lease costs	41,336		38,073


Stock-based and other non-cash compensation expense	9,802		14,507
Deferred income tax expense	8,329		10,300


Loss on extinguishment and modification of debt	107,630		2,073



Loss on fair value adjustment of derivatives, net	17,685		—
Other, net	4,935		(1,343)
Change in assets and liabilities	(94,440)		(43,067)






Net cash provided by operating activities	218,818		283,182
Cash flows used in investing activities:
Proceeds from disposal of property, fixtures and equipment	163		4,828


Capital expenditures	(76,901)		(51,398)
Other investments, net	1,000		3,945
Net cash used in investing activities	$	(75,738)	$	(42,625)

	(CONTINUED...)

Table of Contents

BLOOMIN’ BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS, UNAUDITED)


	TWENTY-SIX WEEKS ENDED
	JUNE 26, 2022		JUNE 27, 2021

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

Repayments of long-term debt and finance lease obligations	(195,733)		(425,564)
Proceeds from borrowings on revolving credit facilities	624,500		286,000
Repayments of borrowings on revolving credit facilities	(304,500)		(599,000)

Financing fees	(853)		(5,868)
Proceeds from issuance of senior notes	—		300,000




Issuance costs related to senior notes	—		(5,546)
Repurchase of convertible senior notes	(196,919)		—
Proceeds from retirement of convertible senior note hedges	131,869		—
Payments for retirement of warrants	(114,825)		—
Proceeds from share-based compensation, net	2,007		9,925
Distributions to noncontrolling interests	(5,154)		(4,141)
Contributions from noncontrolling interests	461		670
Purchase of noncontrolling interests	(4,904)		—
Payments for partner equity plan	(5,743)		(4,494)
Repurchase of common stock	(46,151)		—



Cash dividends paid on common stock	(24,977)		—

Net cash used in financing activities	(140,922)		(248,018)
Effect of exchange rate changes on cash and cash equivalents	4,232		128

Net increase (decrease) in cash, cash equivalents and restricted cash	6,390		(7,333)
Cash, cash equivalents and restricted cash as of the beginning of the period	89,057		110,408
Cash, cash equivalents and restricted cash as of the end of the period	$	95,447	$	103,075
Supplemental disclosures of cash flow information:
Cash paid for interest	$	18,862	$	23,748
Cash paid for income taxes, net of refunds	$	17,191	$	11,883
Supplemental disclosures of non-cash investing and financing activities:

Leased assets obtained in exchange for new operating lease liabilities	$	26,415	$	28,261
Leased assets obtained in exchange for new finance lease liabilities	$	2,417	$	48
Increase (decrease) in liabilities from the acquisition of property, fixtures and equipment	$	2,545	$	(203)

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

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Description of the Business and Basis of Presentation

Description of the Business - Bloomin’ Brands (“Bloomin’ Brands” or the “Company”) owns and operates casual, upscale casual and fine dining restaurants. The Company’s restaurant portfolio has four concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. Additional Outback Steakhouse, Carrabba’s Italian Grill and Bonefish Grill restaurants in which the Company has no direct investment are operated under franchise agreements.

Basis of Presentation - The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements. In the opinion of the Company, all adjustments necessary for fair financial statement presentation for the periods presented have been included and are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 26, 2021.

Recently Issued Financial Accounting Standards Not Yet Adopted - In November 2021, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU No. 2021-10”), which requires financial statement footnote disclosure regarding government assistance accounted for by applying a grant or contribution accounting model by analogy. ASU No. 2021-10 is effective for the Company for the fiscal year ending December 25, 2022. Upon adoption of ASU No. 2021-10 during the fourth quarter of 2022, the Company anticipates government assistance financial statement footnote disclosures within the 2022 Form 10-K, primarily in connection with employee retention credits provided under the Coronavirus, Aid, Relief and Economic Security (“CARES”) Act.

Recent accounting guidance not discussed herein is not applicable, did not have, or is not expected to have a material impact to the Company.

Reclassifications - The Company reclassified certain items in the accompanying consolidated financial statements for prior periods to be comparable with the classification for the current period, including, but not limited to, presentation of certain items within the condensed consolidated statements of cash flows and certain notes to the consolidated financial statements. These reclassifications had no effect on previously reported net income.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

2. Revenue Recognition

The following table includes the categories of revenue included in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the periods indicated:


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Revenues
Restaurant sales	$	1,108,918	$	1,055,227	$	2,232,493	$	2,034,678
Franchise and other revenues
Franchise revenues	12,596