SEC Filing | Bloomin’ Brands, Inc.

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blmn-20230625

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 25, 2023
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/f4ed09d5e5049f8caf393dcd257b5aff-blmnlogov3.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 27, 2023, 87,097,283 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 25, 2023

(Unaudited)

TABLE OF CONTENTS


	PART I — FINANCIAL INFORMATION	Page No.

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Financial Statements:

	Consolidated Balance Sheets — June 25 , 2023 and December 25, 2022	3

	Consolidated Statements of Operations and Comprehensive Income (Loss) — For the Thirteen and Twenty-Six Weeks Ended June 25 , 2023 and June 26 , 2022	4

	Consolidated Statements of Changes in Stockholders’ Equity — For the Thirteen and Twenty-Six Weeks Ended June 25 , 2023 and June 26 , 2022	5

	Condensed Consolidated Statements of Cash Flows — For the Twenty-Six Weeks Ended June 25 , 2023 and June 26 , 2022	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41

Item 4.	Controls and Procedures	41

	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	42

Item 1A.	Risk Factors	42

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42



Item 6.	Exhibits	43

	Signature	44

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)


	JUNE 25, 2023		DECEMBER 25, 2022
	(UNAUDITED)
ASSETS
Current assets
Cash and cash equivalents	$	88,794	$	84,735

Inventories	62,327		78,124

Other current assets, net	96,770		183,718
Total current assets	247,891		346,577


Property, fixtures and equipment, net	975,986		914,142
Operating lease right-of-use assets	1,089,218		1,103,083
Goodwill	274,629		273,032
Intangible assets, net	445,630		448,326
Deferred income tax assets, net	152,387		153,118
Other assets, net	87,391		82,147
Total assets	$	3,273,132	$	3,320,425


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	202,207	$	183,715
Current operating lease liabilities	185,362		183,510
Accrued and other current liabilities	211,481		217,427
Unearned revenue	312,556		394,215


Total current liabilities	911,606		978,867

Non-current operating lease liabilities	1,132,015		1,148,607


Long-term debt, net	763,998		828,507
Other long-term liabilities, net	93,645		90,535
Total liabilities	2,901,264		3,046,516
Commitments and contingencies (Note 13)


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 25, 2023 and December 25, 2022	—		—
Common stock, $0.01 par value, 475,000,000 shares authorized; 87,339,455 and 87,696,200 shares issued and outstanding as of June 25, 2023 and December 25, 2022, respectively	873		877
Additional paid-in capital	1,132,732		1,161,912
Accumulated deficit	(582,738)		(706,109)
Accumulated other comprehensive loss	(181,943)		(185,311)
Total Bloomin’ Brands stockholders’ equity	368,924		271,369
Noncontrolling interests	2,944		2,540
Total stockholders’ equity	371,868		273,909
Total liabilities and stockholders’ equity	$	3,273,132	$	3,320,425

The accompanying notes are an integral part of these unaudited 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				TWENTY-SIX WEEKS ENDED
	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Revenues
Restaurant sales	$	1,137,330	$	1,108,918	$	2,365,564	$	2,232,493
Franchise and other revenues	15,364		16,244		31,876		33,204
Total revenues	1,152,694		1,125,162		2,397,440		2,265,697
Costs and expenses
Food and beverage	351,226		364,459		735,440		723,829
Labor and other related	325,934		308,759		667,476		621,270
Other restaurant operating	273,338		263,529		556,265		522,639
Depreciation and amortization	47,565		41,257		93,867		83,032
General and administrative	63,358		59,246		129,162		117,920
Provision for impaired assets and restaurant closings	1,827		193		5,151		2,032
Total costs and expenses	1,063,248		1,037,443		2,187,361		2,070,722
Income from operations	89,446		87,719		210,079		194,975
Loss on extinguishment and modification of debt	—		(107,630)		—		(107,630)
Loss on fair value adjustment of derivatives, net	—		(17,685)		—		(17,685)

Interest expense, net	(12,961)		(12,548)		(25,405)		(26,181)
Income (loss) before provision for income taxes	76,485		(50,144)		184,674		43,479
Provision for income taxes	6,483		11,536		21,244		27,465
Net income (loss)	70,002		(61,680)		163,430		16,014
Less: net income attributable to noncontrolling interests	1,725		1,955		3,842		4,138
Net income (loss) attributable to Bloomin’ Brands	$	68,277	$	(63,635)	$	159,588	$	11,876



Net income (loss)	$	70,002	$	(61,680)	$	163,430	$	16,014
Other comprehensive income (loss):
Foreign currency translation adjustment	4,502		11,940		3,368		23,223

Unrealized gain on derivatives, net of tax	—		—		—		573
Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax	—		273		—		954
Impact of terminated interest rate swaps included in Net income (loss), net of tax	—		2,164		—		5,185
Comprehensive income (loss)	74,504		(47,303)		166,798		45,949
Less: comprehensive income attributable to noncontrolling interests	1,725		1,955		3,842		4,138
Comprehensive income (loss) attributable to Bloomin’ Brands	$	72,779	$	(49,258)	$	162,956	$	41,811

Earnings (loss) per share:
Basic	$	0.77	$	(0.72)	$	1.80	$	0.13
Diluted	$	0.70	$	(0.72)	$	1.63	$	0.12
Weighted average common shares outstanding:
Basic	88,559		88,898		88,838		89,127
Diluted	97,401		88,898		97,706		102,045

The accompanying notes are an integral part of these unaudited 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 26, 2023	87,465	$	875	$	1,141,017	$	(635,451)	$	(186,445)	$	2,845	$	322,841

Net income	—	—		—		68,277		—		1,725		70,002
Other comprehensive income	—	—		—		—		4,502		—		4,502
Cash dividends declared, $0.24 per common share	—	—		(20,990)		—		—		—		(20,990)
Repurchase and retirement of common stock, including excise tax of $31	(619)	(6)		—		(15,564)		—		—		(15,570)
Stock-based compensation	—	—		5,138		—		—		—		5,138

Common stock issued under stock plans (1)	493	4		7,567		—		—		—		7,571


Distributions to noncontrolling interests	—	—		—		—		—		(2,085)		(2,085)
Contributions from noncontrolling interests	—	—		—		—		—		459		459








Balance, June 25, 2023	87,339	$	873	$	1,132,732	$	(582,738)	$	(181,943)	$	2,944	$	371,868

Balance, December 25, 2022	87,696	$	877	$	1,161,912	$	(706,109)	$	(185,311)	$	2,540	$	273,909

Net income	—	—		—		159,588		—		3,842		163,430
Other comprehensive income	—	—		—		—		3,368		—		3,368
Cash dividends declared, $0.48 per common share	—	—		(42,004)		—		—		—		(42,004)
Repurchase and retirement of common stock, including excise tax of $48	(1,482)	(15)		—		(36,217)		—		—		(36,232)
Stock-based compensation	—	—		8,042		—		—		—		8,042

Common stock issued under stock plans (1)	1,125	11		4,782		—		—		—		4,793


Distributions to noncontrolling interests	—	—		—		—		—		(4,640)		(4,640)
Contributions from noncontrolling interests	—	—		—		—		—		1,202		1,202







Balance, June 25, 2023	87,339	$	873	$	1,132,732	$	(582,738)	$	(181,943)	$	2,944	$	371,868

										(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, 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

________________

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

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

Table of Contents

BLOOMIN’ BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS, UNAUDITED)


	TWENTY-SIX WEEKS ENDED
	JUNE 25, 2023		JUNE 26, 2022

Cash flows provided by operating activities:
Net income	$	163,430	$	16,014
Adjustments to reconcile Net income to cash provided by operating activities:
Depreciation and amortization	93,867		83,032
Amortization of debt discounts and issuance costs	1,532		2,025
Amortization of deferred gift card sales commissions	13,180		13,458
Provision for impaired assets and restaurant closings	5,151		2,032

Non-cash interest expense from terminated interest rate swaps	—		6,980
Non-cash operating lease costs	42,884		41,336


Stock-based compensation expense	8,042		9,802
Deferred income tax (benefit) expense	(1,164)		8,329


Loss on extinguishment and modification of debt	—		107,630



Loss on fair value adjustment of derivatives, net	—		17,685
Other, net	(3,515)		4,935
Change in assets and liabilities	(36,114)		(94,440)






Net cash provided by operating activities	287,293		218,818
Cash flows used in investing activities:




Capital expenditures	(142,153)		(76,901)
Other investments, net	1,502		1,163
Net cash used in investing activities	(140,651)		(75,738)



Cash flows used in financing activities:


Repayments of long-term debt and finance lease obligations	(816)		(195,733)
Proceeds from borrowings on revolving credit facilities	448,000		624,500
Repayments of borrowings on revolving credit facilities	(513,000)		(304,500)

Financing fees	—		(853)






Principal settlements and repurchase of convertible senior notes	(214)		(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	4,793		2,007
Distributions to noncontrolling interests	(4,640)		(5,154)
Contributions from noncontrolling interests	1,202		461
Purchase of noncontrolling interests	(100)		(4,904)
Payments for partner equity plan	—		(5,743)
Repurchase of common stock	(36,435)		(46,151)



Cash dividends paid on common stock	(42,004)		(24,977)

Net cash used in financing activities	(143,214)		(140,922)
Effect of exchange rate changes on cash and cash equivalents	631		4,232

Net increase in cash, cash equivalents and restricted cash	4,059		6,390
Cash, cash equivalents and restricted cash as of the beginning of the period	84,735		89,057
Cash, cash equivalents and restricted cash as of the end of the period	$	88,794	$	95,447
Supplemental disclosures of cash flow information:
Cash paid for interest	$	16,951	$	18,862
Cash paid for income taxes, net of refunds	$	15,356	$	17,191
Supplemental disclosures of non-cash investing and financing activities:

Leased assets obtained in exchange for new operating lease liabilities	$	30,249	$	26,415
Leased assets obtained in exchange for new finance lease liabilities	$	5,367	$	2,417
Increase in liabilities from the acquisition of property, fixtures and equipment	$	7,522	$	2,545

The accompanying notes are an integral part of these unaudited 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 25, 2022.

Recently Issued Financial Accounting Standards Not Yet Adopted - 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, finance lease liabilities presented within other liabilities that were formerly presented within long-term debt, the separate presentation of current operating lease liabilities on the face of the Consolidated Balance Sheets and the presentation of certain items within the Condensed Consolidated Statements of Cash Flows. These reclassifications had no effect on previously reported net income.

2. Revenue Recognition

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


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Revenues
Restaurant sales	$	1,137,330	$	1,108,918	$	2,365,564	$	2,232,493
Franchise and other revenues
Franchise revenues	12,568		12,596		26,091		26,002
Other revenues	2,796		3,648		5,785		7,202
Total Franchise and other revenues	15,364		16,244		31,876		33,204
Total revenues	$	1,152,694	$	1,125,162	$	2,397,440	$	2,265,697

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The following tables include the disaggregation of Restaurant sales and franchise revenues, by restaurant concept and major international market, for the periods indicated:


	THIRTEEN WEEKS ENDED
	JUNE 25, 2023				JUNE 26, 2022
(dollars in thousands)	RESTAURANT SALES		FRANCHISE REVENUES		RESTAURANT SALES		FRANCHISE REVENUES
U.S.
Outback Steakhouse	$	576,989	$	8,219	$	573,563	$	8,156
Carrabba’s Italian Grill	176,666		758		170,190		797
Bonefish Grill	143,458		95		145,472		173
Fleming’s Prime Steakhouse & Wine Bar	92,851		—		93,933		—
Other	3,474		10		2,769		8
U.S. total	993,438		9,082		985,927		9,134
International
Outback Steakhouse - Brazil (1)	119,295		—		100,647		—
Other (1)(2)	24,597		3,486		22,344		3,462
International total	143,892		3,486		122,991		3,462
Total	$	1,137,330	$	12,568	$	1,108,918	$	12,596

	TWENTY-SIX WEEKS ENDED
	JUNE 25, 2023				JUNE 26, 2022
(dollars in thousands)	RESTAURANT SALES		FRANCHISE REVENUES		RESTAURANT SALES		FRANCHISE REVENUES
U.S.
Outback Steakhouse	$	1,205,172	$	16,763	$	1,168,956	$	16,615
Carrabba’s Italian Grill	364,708		1,553		345,818		1,458
Bonefish Grill	301,147		266		296,888		350
Fleming’s Prime Steakhouse & Wine Bar	195,624		—		191,595		—
Other	7,356		25		6,305		13
U.S. total	2,074,007		18,607		2,009,562		18,436
International
Outback Steakhouse - Brazil (1)	241,311		—		185,948		—
Other (1)(2)	50,246		7,484		36,983		7,566
International total	291,557		7,484		222,931		7,566
Total	$	2,365,564	$	26,091	$	2,232,493	$	26,002

________________

(1)Restaurant sales in Brazil increased $9.6 million and $19.2 million during the thirteen and twenty-six weeks ended June 25, 2023, respectively, in connection with value added tax exemptions resulting from tax legislation. See Note 12 - Income Taxes for details regarding the Brazil tax legislation.

(2)Includes Restaurant sales for Company-owned Outback Steakhouse restaurants outside of Brazil and Abbraccio restaurants in Brazil. Franchise revenues primarily include revenues from franchised Outback Steakhouse restaurants.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The following table includes a detail of assets and liabilities from contracts with customers included on the Company’s Consolidated Balance Sheets as of the periods indicated:


(dollars in thousands)	JUNE 25, 2023		DECEMBER 25, 2022
Other current assets, net
Deferred gift card sales commissions	$	12,694	$	17,755

Unearned revenue
Deferred gift card revenue	$	304,942	$	386,495
Deferred loyalty revenue	5,391		5,628
Deferred franchise fees - current	472		460
Other	1,751		1,632
Total Unearned revenue	$	312,556	$	394,215

Other long-term liabilities, net
Deferred franchise fees - non-current	$	4,132	$	4,126

The following table is a rollforward of deferred gift card sales commissions for the periods indicated:


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Balance, beginning of the period	$	13,403	$	13,033	$	17,755	$	17,793
Deferred gift card sales commissions amortization	(5,383)		(5,441)		(13,180)		(13,458)
Deferred gift card sales commissions capitalization	5,340		5,436		9,743		9,605
Other	(666)		(690)		(1,624)		(1,602)
Balance, end of the period	$	12,694	$	12,338	$	12,694	$	12,338

The following table is a rollforward of unearned gift card revenue for the periods indicated:


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Balance, beginning of the period	$	314,096	$	314,974	$	386,495	$	387,945
Gift card sales	65,338		65,174		118,343		115,454
Gift card redemptions	(70,175)		(72,428)		(188,458)		(189,050)
Gift card breakage	(4,317)		(4,176)		(11,438)		(10,805)
Balance, end of the period	$	304,942	$	303,544	$	304,942	$	303,544

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

3. Earnings (Loss) Per Share

The following table presents the computation of basic and diluted earnings (loss) per share for the periods indicated:


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(in thousands, except per share data)	JUNE 25, 2023		JUNE 26, 2022 (1)		JUNE 25, 2023		JUNE 26, 2022
Net income (loss) attributable to Bloomin’ Brands	$	68,277	$	(63,635)	$	159,588	$	11,876





Basic weighted average common shares outstanding	88,559		88,898		88,838		89,127

Effect of dilutive securities:
Stock options	395		—		398		305
Nonvested restricted stock units	132		—		201		192
Nonvested performance-based share units	—		—		143		143
Convertible senior notes (2)	5,002		—		4,917		8,253
Warrants (2)	3,313		—		3,209		4,025
Diluted weighted average common shares outstanding	97,401		88,898		97,706		102,045

Basic earnings (loss) per share	$	0.77	$	(0.72)	$	1.80	$	0.13
Diluted earnings (loss) per share	$	0.70	$	(0.72)	$	1.63	$	0.12

______________

(1)Due to the Company’s net loss during the thirteen weeks ended June 26, 2022, the effect of dilutive securities was excluded from the computation of diluted earnings per share as their effect would be antidilutive.

(2)During the thirteen weeks ended June 26, 2022, the Company repurchased $125.0 million of the convertible notes due in 2025 and settled the corresponding portion of the related note hedges and warrants (the “2025 Notes Partial Repurchase”).

Share-based compensation-related weighted average securities outstanding not included in the computation of earnings (loss) per share because their effect was antidilutive were as follows for the periods indicated:


	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
(shares in thousands)	JUNE 25, 2023	JUNE 26, 2022	JUNE 25, 2023	JUNE 26, 2022
Stock options	689	2,563	707	1,870
Nonvested restricted stock units	21	485	70	299
Nonvested performance-based share units	581	596	463	475

4. Stock-based Compensation Plans

The Company recognized stock-based compensation expense, net of capitalized expense, as follows for the periods indicated:


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Performance-based share units	$	2,297	$	2,840	$	3,220	$	5,459
Restricted stock units	1,985		2,027		3,948		3,837
Stock options	835		55		835		432

Total stock-based compensation expense, net	$	5,117	$	4,922	$	8,003	$	9,728

In February 2023, the Company granted performance-based share units (“PSUs”) subject to final payout modification by a Relative Total Shareholder Return (“Relative TSR”) modifier. This Relative TSR modifier can adjust the final payout outcome by 75%, 100% or 125% of the achieved performance metric, with the overall payout capped at 200% of the annual target grant. These PSUs have a three-year cliff vesting period and their fair value was estimated using the Monte Carlo simulation model.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The following table presents a summary of the Company’s PSU activity:


(in thousands, except per unit data)	PERFORMANCE-BASED SHARE UNITS	WEIGHTED AVERAGE GRANT DATE FAIR VALUE PER UNIT		AGGREGATE INTRINSIC VALUE (1)
Outstanding as of December 25, 2022	874	$	24.83	$	18,323
Granted	301	$	29.01
Performance adjustment (2)	154	$	19.84
Vested	(470)	$	19.84
Forfeited	(32)	$	26.39
Outstanding as of June 25, 2023	827	$	26.92	$	21,308
Expected to vest as of June 25, 2023 (3)	1,067			$	27,486

________________

(1)Based on the $20.96 and $25.76 share price of the Company’s common stock on December 23, 2022 and June 23, 2023, the last trading day of the year ended December 25, 2022 and the twenty-six weeks ended June 25, 2023, respectively.

(2)Represents adjustment to 148% payout for PSUs granted during 2020.

(3)Estimated number of units to be issued upon the vesting of outstanding PSU awards based on Company performance projections of performance criteria set forth in the 2021, 2022 and 2023 PSU award agreements.

Assumptions used in the Monte Carlo simulation model and the grant date fair value of PSUs granted were as follows for the periods indicated:


	TWENTY-SIX WEEKS ENDED
	JUNE 25, 2023			JUNE 26, 2022
Assumptions:
Risk-free interest rate (1)	4.26		%	1.64		%
Dividend yield (2)	3.47		%	2.31		%

Volatility (3)	51.02		%	49.11		%

Grant date fair value per unit (4)	$	29.01		$	26.10

________________

(1)Risk-free interest rate is the U.S. Treasury yield curve in effect as of the grant date for the performance period of the unit.

(2)Dividend yield is the level of dividends expected to be paid on the Company’s common stock over the expected term.

(3)Based on the historical volatility of the Company’s stock over the last seven years.

(4)Represents a premium above the grant date per share value of the Company’s common stock for the Relative TSR modifier of 2.7% and 7.9% during the twenty-six weeks ended June 25, 2023 and June 26, 2022, respectively.

The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of June 25, 2023:


	UNRECOGNIZED COMPENSATION EXPENSE (dollars in thousands)		REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years)
Performance-based share units	$	14,306	1.7
Restricted stock units	$	11,917	2.0

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

5. Other Current Assets, Net

Other current assets, net, consisted of the following as of the periods indicated:


(dollars in thousands)	JUNE 25, 2023		DECEMBER 25, 2022
Prepaid expenses	$	24,387	$	29,343
Accounts receivable - gift cards, net	15,754		85,606
Accounts receivable - vendors, net	15,638		25,385
Accounts receivable - franchisees, net	3,993		2,550
Accounts receivable - other, net	18,094		18,408
Deferred gift card sales commissions	12,694		17,755


Other current assets, net	6,210		4,671
	$	96,770	$	183,718

6. Goodwill and Intangible Assets, Net

Annual Goodwill and Intangible Assets Impairment Assessment - The Company performs its annual assessment for impairment of goodwill and other indefinite-lived intangible assets during its second fiscal quarter. The Company’s 2023 assessment was quantitative and the 2022 assessment was qualitative. In connection with these assessments, the Company did not record any impairment charges.

7. Long-term Debt, Net

Following is a summary of outstanding Long-term debt, net, as of the periods indicated:


	JUNE 25, 2023				DECEMBER 25, 2022
(dollars in thousands)	OUTSTANDING BALANCE		INTEREST RATE		OUTSTANDING BALANCE		INTEREST RATE
Senior secured credit facility - revolving credit facility (1)	$	365,000	6.77	%	$	430,000	5.79	%
2025 Notes	104,786		5.00	%	105,000		5.00	%
2029 Notes	300,000		5.13	%	300,000		5.13	%


Less: unamortized debt discount and issuance costs	(5,788)				(6,493)



Long-term debt, net	$	763,998			$	828,507

________________

(1)Interest rate represents the weighted average interest rate as of the respective periods.

Debt Covenants - As of June 25, 2023 and December 25, 2022, the Company was in compliance with its debt covenants.

8. Convertible Senior Notes

2025 Notes - In connection with dividends paid during the twenty-six weeks ended June 25, 2023, the conversion rate for the Company’s remaining convertible senior notes due 2025 (the “2025 Notes”) decreased to approximately $11.37 per share, which represents 87.962 shares of common stock per $1,000 principal amount of the 2025 Notes, or a total of approximately 9.217