TAMPA, Fla., Oct. 28, 2016 /PRNewswire/ -- Bloomin'
Brands, Inc. (Nasdaq: BLMN) today reported results for the third
quarter ended September 25, 2016 ("Q3 2016") compared to the
third quarter ended September 27, 2015 ("Q3 2015").
Key highlights for Q3 2016 include the following:
- Repurchased 7.1 million shares of common stock for a total of
$135 million;
- Reported combined U.S. comparable restaurant sales down
0.7%;
- Reported comparable restaurant sales for Outback Steakhouse in
Brazil up 7.3%;
- Opened 10 new restaurants, including eight in international
markets; and
- Updated 2016 financial outlook as follows:
- U.S. comparable restaurant sales guidance of -1.0% to
-1.5%;
- GAAP diluted earnings per share of $0.70
to $0.75 and adjusted diluted earnings per share of
$1.30 to $1.35;
- See Fiscal 2016 Financial
Outlook later in this release for additional detail.
Since the beginning of the fiscal third quarter, the Company has
generated $350 million in gross
proceeds from sale-leaseback transactions.
Diluted EPS and Adjusted Diluted EPS
The following table reconciles Diluted earnings per share to
Adjusted diluted earnings per share for the periods as indicated
below.
|
Q3
|
|
|
|
2016
|
|
2015
|
|
CHANGE
|
Diluted earnings per
share
|
$
|
0.18
|
|
|
$
|
0.13
|
|
|
$
|
0.05
|
|
Adjustments
|
0.02
|
|
|
0.02
|
|
|
—
|
|
Adjusted diluted
earnings per share
|
$
|
0.20
|
|
|
$
|
0.15
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
___________________
|
|
|
See Non-GAAP Measures
later in this release.
|
|
|
CEO Comments
"Our Q3 diluted earnings per share was up significantly from
last year," said Liz Smith, CEO.
"Sales in the quarter were softer than expected consistent with a
weak casual dining industry. Internationally, we were pleased
with our strong performance in Brazil and our progress in Asia. We will
continue to prioritize spending on the core guest experience to
strengthen our domestic performance while expanding our business
internationally."
Third Quarter Financial Results
(dollars in
millions)
|
Q3
2016
|
|
Q3
2015
|
|
%
Change
|
Total
revenues
|
$
|
1,005
|
|
|
$
|
1,027
|
|
|
(2.1)%
|
|
|
|
|
|
|
U.S. GAAP
restaurant-level operating margin
|
14.4%
|
|
|
14.8%
|
|
|
(0.4)%
|
Adjusted
restaurant-level operating margin (1)
|
14.4%
|
|
|
14.5%
|
|
|
(0.1)%
|
|
|
|
|
|
|
U.S. GAAP operating
income margin
|
3.2%
|
|
|
3.8%
|
|
|
(0.6)%
|
Adjusted operating
income margin (1)
|
3.8%
|
|
|
4.0%
|
|
|
(0.2)%
|
___________________
|
|
(1) See Non-GAAP
Measures later in this release.
|
- The decrease in Total revenues was primarily due to the sale of
Outback Steakhouse South Korea restaurants in July 2016, partially offset by the net benefit of
new restaurant openings and closings.
- The decreases in U.S. GAAP and Adjusted restaurant-level
operating margin and operating income margin were primarily due to:
(i) wage inflation, (ii) service and product investments at Outback
and (iii) operating expense inflation. These decreases were
partially offset by increases in average check and productivity
savings.
Third Quarter Comparable Restaurant Sales
THIRTEEN WEEKS
ENDED SEPTEMBER 25, 2016
|
|
COMPANY-OWNED
|
Comparable restaurant
sales (stores open 18 months or more) (1) (2):
|
|
|
U.S.
|
|
|
Outback
Steakhouse
|
|
(0.7)%
|
Carrabba's
Italian Grill
|
|
(2.1)%
|
Bonefish
Grill
|
|
1.7%
|
Fleming's
Prime Steakhouse & Wine Bar
|
|
(1.9)%
|
Combined
U.S.
|
|
(0.7)%
|
|
|
|
International
|
|
|
Outback Steakhouse -
Brazil
|
|
7.3%
|
_________________
|
(1)
|
Comparable restaurant
sales exclude the effect of fluctuations in foreign currency
rates.
|
(2)
|
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.
|
Sale Leaseback Initiative
Since the beginning of the fiscal third quarter, the Company
entered into sale-leaseback transactions in which the Company sold
101 restaurant properties at fair market value for gross proceeds
of $350 million. We used a portion of
these proceeds to pay down a significant amount of the Company's
bridge loan of which $51 million
remains outstanding as of October 28,
2016.
Dividend Declaration and Share Repurchases
The Company's Board of Directors declared a quarterly cash
dividend of $0.07 per share to be
paid on November 22, 2016 to all stockholders of record as of
the close of business on November 9, 2016.
The Company repurchased 7.1 million shares of common stock in Q3
2016 for a total of $135 million,
which leaves $165 million remaining
under our existing repurchase authorization, which expires on
January 26, 2018.
Fiscal 2016 Financial Outlook
The Company updated several metrics in its financial outlook for
fiscal 2016 driven primarily by lower U.S. comparable restaurant
sales.
The following table presents the Company's updated expectations
for selected fiscal 2016 financial reporting and operating results
as compared to the financial outlook provided in the Company's
July 29, 2016 earnings release. These
updated expectations supersede the previously provided financial
outlook.
Financial Results
(in millions, except per share data or as otherwise
indicated):
|
|
Outlook on Jul.
29
|
|
Current
Outlook
|
U.S. GAAP diluted
earnings per share (1)
|
|
At Least
$0.75
|
|
$0.70 to
$0.75
|
|
|
|
|
|
Adjusted diluted
earnings per share (2)
|
|
At Least
$1.35
|
|
$1.30 to
$1.35
|
|
|
|
|
|
U.S. GAAP operating
income margin (3) (4)
|
|
Decrease
|
|
Decrease
|
|
|
|
|
|
Adjusted operating
income margin (3) (4)
|
|
Flat
|
|
Decrease
|
|
|
|
|
|
Unfavorable foreign
currency translation impact on adjusted operating income
|
|
$3
|
|
$3
|
|
|
|
|
|
U.S. GAAP effective
income tax rate (5) (6)
|
|
30% - 31%
|
|
28% - 29%
|
|
|
|
|
|
Adjusted effective
income tax rate (5) (6)
|
|
25% - 26%
|
|
23% - 24%
|
|
|
|
|
|
Other Selected
Financial Data (in millions, or as otherwise
indicated):
|
|
|
|
|
Combined U.S.
comparable restaurant sales
|
|
Flat
|
|
-1.0% to
-1.5%
|
|
|
|
|
|
Commodity
inflation
|
|
Approximately
0.5%
|
|
Approximately
0.5%
|
|
|
|
|
|
Capital
expenditures
|
|
$235 -
$255
|
|
$235 -
$255
|
|
|
|
|
|
Number of new
system-wide restaurants
|
|
40 - 50
|
|
40 - 50
|
___________________
|
(1)
|
Change driven by
profit risk from lower U.S. comparable restaurant sales.
|
(2)
|
The Adjusted diluted
earnings per share outlook includes: (i) adjustments incurred
through September 25, 2016 (as reflected in Table Five of this
release) and (ii) $5.3 million of forecasted pre-tax adjustments
for the fiscal fourth quarter of 2016, primarily related to
anticipated expenses associated with the remodel and relocation
programs, the Bonefish Grill Restructuring Initiative and
amortization for intangibles acquired in connection with the Brazil
acquisition. Refer to "Non-GAAP Measures" for additional
information.
|
(3)
|
The primary
difference between U.S. GAAP and Adjusted operating income margin
is due to the South Korea impairment charges in Q2.
|
(4)
|
Includes the impact
of rent increases, net, resulting from sale-leasebacks. The Jul.
29th Outlook excluded these expenses.
|
(5)
|
The primary
differences between U.S. GAAP and Adjusted effective income tax
rate are due to lower U.S. GAAP pre-tax income from South Korea
impairment charges and $2.4 million of tax expense associated with
the repatriation of proceeds from the sale.
|
(6)
|
Change driven by
lower domestic income which carries a higher statutory tax
rate.
|
Selected Preliminary 2017 Financial Outlook
The Company has provided the following context for the full-year
2017:
- The Company expects that it will incur an incremental
$9 million of expense related to
regulations enacted by the Department of Labor that raises the
salary threshold for employees exempted from overtime. These
regulations go into effect on December 1,
2016;
- The Company expects commodities to range from flat to down 1%;
and
- Fiscal 2017 is a 53 week fiscal year
The Company will provide detailed 2017 guidance on the fourth
quarter earnings call in February
2017.
Conference Call
The Company will host a conference call today, October 28th 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 (877)
870-5176 or (858) 384-5517 for international callers; the
conference ID is 13647310. The replay will be available through
Friday, November 4, 2016. 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 U.S.
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 U.S. 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.
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 U.S. 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
establish employee incentive plans.
These non-GAAP financial measures are not intended to replace
U.S. 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 later in this release for descriptions of the actual
adjustments made in the current period and the corresponding prior
period.
In this release, we have also included forward-looking non-GAAP
information under the caption "Fiscal 2016 Financial Outlook". This
information relates to our current expectations for fiscal 2016
adjusted operating income margin, adjusted diluted EPS and adjusted
effective income tax rate. We have also provided information with
respect to our expectations for the corresponding GAAP
measures.
The differences between our disclosed GAAP and non-GAAP
expectations are described and quantified to the extent available
without unreasonable efforts under "Fiscal 2016 Financial
Outlook". However, in addition to the general cautionary
language regarding all forward-looking statements included
elsewhere in this release, we note that, because the items we
adjust for in our non-GAAP measures may vary from period to period
without correlation to our core performance, they are by nature
more difficult to predict and estimate, so we cannot guarantee that
additional adjustments will not occur in the remainder of the
fiscal year or that they will not significantly impact our GAAP
results.
For reconciliations of the non-GAAP measures used in this
release, refer to tables four, five and six included later in this
release.
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.
Forward-Looking Statements
Certain statements contained herein, including statements under
the headings "CEO Comments," "Fiscal 2016 Financial Outlook"
and "Selected Preliminary 2017 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: our
ability to preserve the value of and grow our brands; local,
regional, national and international economic conditions; consumer
confidence and spending patterns; the cost and availability of
credit; interest rate changes; competition; consumer reaction to
public health and food safety issues; government actions and
policies; increases in unemployment rates and taxes; increases in
labor costs; price and availability of commodities; challenges
associated with our expansion, remodeling and relocation plans;
interruption or breach of our systems or loss of consumer or
employee information; foreign currency exchange rates; 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, including acquisitions and dispositions; 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.
TABLE
ONE
|
BLOOMIN' BRANDS,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
(dollars in
thousands, except per share data)
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
Revenues
|
|
|
|
|
|
|
|
Restaurant
sales
|
$
|
998,806
|
|
|
$
|
1,020,131
|
|
|
$
|
3,229,377
|
|
|
$
|
3,307,700
|
|
Other
revenues
|
6,581
|
|
|
6,590
|
|
|
18,786
|
|
|
20,677
|
|
Total
revenues
|
1,005,387
|
|
|
1,026,721
|
|
|
3,248,163
|
|
|
3,328,377
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
Cost of
sales
|
322,080
|
|
|
339,000
|
|
|
1,044,179
|
|
|
1,083,923
|
|
Labor and other
related
|
290,032
|
|
|
286,628
|
|
|
921,992
|
|
|
911,653
|
|
Other restaurant
operating
|
243,175
|
|
|
243,609
|
|
|
747,189
|
|
|
761,928
|
|
Depreciation and
amortization
|
48,551
|
|
|
47,455
|
|
|
145,206
|
|
|
141,316
|
|
General and
administrative
|
65,072
|
|
|
69,623
|
|
|
208,663
|
|
|
218,832
|
|
Provision for
impaired assets and restaurant closings
|
4,743
|
|
|
1,682
|
|
|
49,183
|
|
|
11,715
|
|
Total costs and
expenses
|
973,653
|
|
|
987,997
|
|
|
3,116,412
|
|
|
3,129,367
|
|
Income from
operations
|
31,734
|
|
|
38,724
|
|
|
131,751
|
|
|
199,010
|
|
Loss on defeasance,
extinguishment and modification of debt
|
(418)
|
|
|
—
|
|
|
(26,998)
|
|
|
(2,638)
|
|
Other income
(expense), net
|
2,079
|
|
|
(266)
|
|
|
2,059
|
|
|
(1,356)
|
|
Interest expense,
net
|
(10,217)
|
|
|
(14,851)
|
|
|
(33,394)
|
|
|
(40,916)
|
|
Income before
provision for income taxes
|
23,178
|
|
|
23,607
|
|
|
73,418
|
|
|
154,100
|
|
Provision for income
taxes
|
1,950
|
|
|
6,202
|
|
|
24,372
|
|
|
41,557
|
|
Net income
|
21,228
|
|
|
17,405
|
|
|
49,046
|
|
|
112,543
|
|
Less: net income
attributable to noncontrolling interests
|
495
|
|
|
594
|
|
|
3,015
|
|
|
2,918
|
|
Net income
attributable to Bloomin' Brands
|
$
|
20,733
|
|
|
$
|
16,811
|
|
|
$
|
46,031
|
|
|
$
|
109,625
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.19
|
|
|
$
|
0.14
|
|
|
$
|
0.41
|
|
|
$
|
0.89
|
|
Diluted
|
$
|
0.18
|
|
|
$
|
0.13
|
|
|
$
|
0.40
|
|
|
$
|
0.87
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
109,399
|
|
|
121,567
|
|
|
113,553
|
|
|
123,337
|
|
Diluted
|
112,430
|
|
|
124,733
|
|
|
116,516
|
|
|
126,610
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
$
|
0.07
|
|
|
$
|
0.06
|
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
TABLE
TWO
|
BLOOMIN' BRANDS,
INC.
|
SEGMENT
RESULTS
|
(UNAUDITED)
|
(dollars in
thousands)
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
U.S.
Segment
|
SEPTEMBER
25,
2016
|
|
SEPTEMBER
27,
2015
|
|
SEPTEMBER
25,
2016
|
|
SEPTEMBER
27,
2015
|
Revenues
|
|
|
|
|
|
|
|
Restaurant
sales
|
$
|
889,350
|
|
|
$
|
897,280
|
|
|
$
|
2,882,091
|
|
|
$
|
2,930,644
|
|
Other
revenues
|
4,556
|
|
|
5,173
|
|
|
14,575
|
|
|
16,801
|
|
Total
revenues
|
$
|
893,906
|
|
|
$
|
902,453
|
|
|
$
|
2,896,666
|
|
|
$
|
2,947,445
|
|
Restaurant-level operating margin
|
14.1%
|
|
|
13.8%
|
|
|
15.7%
|
|
|
16.0%
|
|
Income from
operations
|
$
|
61,905
|
|
|
$
|
63,476
|
|
|
$
|
268,754
|
|
|
$
|
287,936
|
|
Operating
income margin
|
6.9%
|
|
|
7.0%
|
|
|
9.3%
|
|
|
9.8%
|
|
International
Segment
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
Restaurant
sales
|
$
|
109,456
|
|
|
$
|
122,851
|
|
|
$
|
347,286
|
|
|
$
|
377,056
|
|
Other
revenues
|
2,025
|
|
|
1,417
|
|
|
4,211
|
|
|
3,876
|
|
Total
revenues
|
$
|
111,481
|
|
|
$
|
124,268
|
|
|
$
|
351,497
|
|
|
$
|
380,932
|
|
Restaurant-level operating margin
|
18.2%
|
|
|
18.0%
|
|
|
17.9%
|
|
|
19.0%
|
|
Income (loss) from
operations
|
$
|
8,277
|
|
|
$
|
9,770
|
|
|
$
|
(14,947)
|
|
|
$
|
24,376
|
|
Operating
income (loss) margin
|
7.4%
|
|
|
7.9%
|
|
|
(4.3)%
|
|
|
6.4%
|
|
Reconciliation of
Segment Income from Operations
to Consolidated Income (Loss) from Operations
|
|
|
|
|
|
|
|
Segment income (loss)
from operations
|
|
|
|
|
|
|
|
U.S.
|
$
|
61,905
|
|
|
$
|
63,476
|
|
|
$
|
268,754
|
|
|
$
|
287,936
|
|
International
|
8,277
|
|
|
9,770
|
|
|
(14,947)
|
|
|
24,376
|
|
Total segment income
from operations
|
70,182
|
|
|
73,246
|
|
|
253,807
|
|
|
312,312
|
|
Unallocated
corporate operating expense
|
(38,448)
|
|
|
(34,522)
|
|
|
(122,056)
|
|
|
(113,302)
|
|
Total income from
operations
|
$
|
31,734
|
|
|
$
|
38,724
|
|
|
$
|
131,751
|
|
|
$
|
199,010
|
|
TABLE
THREE
|
BLOOMIN' BRANDS,
INC.
|
SUPPLEMENTAL
BALANCE SHEET INFORMATION
|
(UNAUDITED)
|
(dollars in
thousands)
|
SEPTEMBER 25,
2016
|
|
DECEMBER 27,
2015
|
Cash and cash
equivalents (1)
|
$
|
91,474
|
|
|
$
|
132,337
|
|
Net working capital
(deficit)
(2)
|
$
|
(423,652)
|
|
|
$
|
(395,522)
|
|
Total
assets
|
$
|
2,660,024
|
|
|
$
|
3,032,569
|
|
Total debt,
net
|
$
|
1,225,608
|
|
|
$
|
1,316,864
|
|
Total stockholders'
equity
|
$
|
239,558
|
|
|
$
|
421,900
|
|
_________________
|
(1)
|
Excludes restricted
cash.
|
(2)
|
The Company has, and
in the future may continue to have, negative working capital
balances (as is common for many restaurant companies). The Company
operates successfully with negative working capital because cash
collected on Restaurant sales is typically received before payment
is due on its current liabilities and its 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.
|
TABLE
FOUR
|
BLOOMIN' BRANDS,
INC.
|
RESTAURANT-LEVEL
OPERATING MARGIN NON-GAAP RECONCILIATION
|
(UNAUDITED)
|
|
THIRTEEN WEEKS
ENDED
|
|
(UNFAVORABLE)
FAVORABLE
CHANGE
IN
ADJUSTED
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
|
Consolidated:
|
U.S.
GAAP
|
|
ADJUSTED
|
|
U.S.
GAAP
|
|
ADJUSTED
(1)
|
|
QUARTER TO
DATE
|
Restaurant
sales
|
100.0%
|
|
|
100.0%
|
|
|
100.0%
|
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
32.2%
|
|
|
32.2%
|
|
|
33.2%
|
|
|
33.2%
|
|
|
1.0%
|
|
Labor and other
related
|
29.0%
|
|
|
29.0%
|
|
|
28.1%
|
|
|
28.4%
|
|
|
(0.6)%
|
|
Other restaurant
operating
|
24.3%
|
|
|
24.4%
|
|
|
23.9%
|
|
|
23.9%
|
|
|
(0.5)%
|
|
|
|
|
|
|
|
|
|
Restaurant-level
operating margin
|
14.4%
|
|
|
14.4%
|
|
|
14.8%
|
|
|
14.5%
|
|
|
(0.1)%
|
|
|
|
|
|
|
|
|
|
Segments:
|
|
|
|
|
|
|
|
Restaurant-level
operating margin - U.S.
|
14.1%
|
|
|
14.1%
|
|
|
13.8%
|
|
|
13.8%
|
|
|
0.3%
|
|
Restaurant-level
operating margin -
International
|
18.2%
|
|
|
18.3%
|
|
|
18.0%
|
|
|
18.1%
|
|
|
0.2%
|
|
|
|
|
|
|
THIRTY-NINE WEEKS
ENDED
|
|
(UNFAVORABLE)
FAVORABLE
CHANGE
IN
ADJUSTED
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
|
Consolidated:
|
U.S.
GAAP
|
|
ADJUSTED
(2)
|
|
U.S.
GAAP
|
|
ADJUSTED
(1)
|
|
YEAR TO
DATE
|
Restaurant
sales
|
100.0%
|
|
|
100.0%
|
|
|
100.0%
|
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
32.3%
|
|
|
32.3%
|
|
|
32.8%
|
|
|
32.8%
|
|
|
0.5%
|
|
Labor and other
related
|
28.6%
|
|
|
28.6%
|
|
|
27.6%
|
|
|
27.7%
|
|
|
(0.9)%
|
|
Other restaurant
operating
|
23.1%
|
|
|
23.2%
|
|
|
23.0%
|
|
|
23.0%
|
|
|
(0.2)%
|
|
|
|
|
|
|
|
|
|
Restaurant-level
operating margin
|
16.0%
|
|
|
15.9%
|
|
|
16.6%
|
|
|
16.5%
|
|
|
(0.6)%
|
|
|
|
|
|
|
|
|
|
Segments:
|
|
|
|
|
|
|
|
Restaurant-level
operating margin - U.S.
|
15.7%
|
|
|
15.7%
|
|
|
16.0%
|
|
|
16.0%
|
|
|
(0.3)%
|
|
Restaurant-level
operating margin -
International
|
17.9%
|
|
|
18.0%
|
|
|
19.0%
|
|
|
19.0%
|
|
|
(1.0)%
|
|
_________________
|
(1)
|
Includes adjustments
for payroll tax audit contingencies of $2.9 million and $5.6
million for the thirteen and thirty-nine weeks ended September 27,
2015, respectively, which were recorded in Labor and other
related.
|
(2)
|
Includes adjustments,
primarily the write-off of $1.9 million of deferred rent
liabilities associated with the Bonefish Restructuring for the
thirty-nine weeks ended September 25, 2016, which were recorded in
Other restaurant operating.
|
TABLE
FIVE
|
BLOOMIN' BRANDS,
INC.
|
INCOME FROM
OPERATIONS, NET INCOME AND DILUTED EARNINGS PER SHARE NON-GAAP
RECONCILIATIONS
|
(UNAUDITED)
|
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
(in thousands,
except per share data)
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
Income from
operations
|
$
|
31,734
|
|
|
$
|
38,724
|
|
|
$
|
131,751
|
|
|
$
|
199,010
|
|
Operating income
margin
|
3.2%
|
|
|
3.8%
|
|
|
4.1%
|
|
|
6.0%
|
|
Adjustments:
|
|
|
|
|
|
|
|
Asset impairments and
related costs (1)
|
3,208
|
|
|
—
|
|
|
43,231
|
|
|
746
|
|
Restaurant
relocations, remodels and related costs (2)
|
1,808
|
|
|
1,872
|
|
|
3,572
|
|
|
3,163
|
|
Transaction-related
expenses (3)
|
1,047
|
|
|
750
|
|
|
1,513
|
|
|
1,065
|
|
Purchased intangibles
amortization (4)
|
1,032
|
|
|
1,047
|
|
|
2,841
|
|
|
3,453
|
|
Severance
(5)
|
—
|
|
|
—
|
|
|
1,872
|
|
|
—
|
|
Restaurant
impairments and closing costs (6)
|
(685)
|
|
|
185
|
|
|
1,435
|
|
|
8,992
|
|
Legal and contingent
matters (7)
|
—
|
|
|
1,239
|
|
|
—
|
|
|
1,239
|
|
Payroll tax audit
contingency (8)
|
—
|
|
|
(2,916)
|
|
|
—
|
|
|
(5,587)
|
|
Total income from
operations adjustments
|
6,410
|
|
|
2,177
|
|
|
54,464
|
|
|
13,071
|
|
Adjusted income from
operations
|
$
|
38,144
|
|
|
$
|
40,901
|
|
|
$
|
186,215
|
|
|
$
|
212,081
|
|
Adjusted operating
income margin
|
3.8%
|
|
|
4.0%
|
|
|
5.7%
|
|
|
6.4%
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Bloomin' Brands
|
$
|
20,733
|
|
|
$
|
16,811
|
|
|
$
|
46,031
|
|
|
$
|
109,625
|
|
Adjustments:
|
|
|
|
|
|
|
|
Income from
operations adjustments
|
6,410
|
|
|
2,177
|
|
|
54,464
|
|
|
13,071
|
|
Loss on defeasance,
extinguishment and modification of
debt (9)
|
418
|
|
|
—
|
|
|
26,998
|
|
|
2,638
|
|
(Gain) loss on
disposal of business (10)
|
(2,084)
|
|
|
298
|
|
|
(2,084)
|
|
|
1,328
|
|
Total adjustments,
before income taxes
|
4,744
|
|
|
2,475
|
|
|
79,378
|
|
|
17,037
|
|
Adjustment to
provision for income taxes (8) (11)
|
(2,930)
|
|
|
(665)
|
|
|
(11,107)
|
|
|
(3,245)
|
|
Net
adjustments
|
1,814
|
|
|
1,810
|
|
|
68,271
|
|
|
13,792
|
|
Adjusted net
income
|
$
|
22,547
|
|
|
$
|
18,621
|
|
|
$
|
114,302
|
|
|
$
|
123,417
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
|
0.18
|
|
|
$
|
0.13
|
|
|
$
|
0.40
|
|
|
$
|
0.87
|
|
Adjusted diluted
earnings per share
|
$
|
0.20
|
|
|
$
|
0.15
|
|
|
$
|
0.98
|
|
|
$
|
0.97
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares outstanding
|
112,430
|
|
|
124,733
|
|
|
116,516
|
|
|
126,610
|
|
_________________
|
(1)
|
Represents asset
impairment charges and related costs associated with our Puerto
Rico subsidiary and sale of Outback Steakhouse South Korea in 2016
and our Roy's concept and corporate aircraft in 2015.
|
(2)
|
Represents asset
impairment charges and accelerated depreciation incurred in
connection with our relocation and remodel programs.
|
(3)
|
Relates primarily to
the following: (i) costs incurred with our sale-leaseback
initiative in 2016 and 2015 and (ii) costs incurred with the
secondary offering of our common stock in March 2015. For the
thirty-nine weeks ended September 25, 2016, includes an adjustment
of $0.3 million for amortization of deferred gains related to our
sale-leaseback initiative from our second fiscal quarter.
Subsequent to the second quarter, based on an ongoing review of our
non-GAAP presentations, we determined not to adjust for this item
on a prospective basis commencing with the thirteen weeks ended
September 25, 2016. We do not consider this change material to the
historical periods presented.
|
(4)
|
Represents intangible
amortization recorded as a result of the acquisition of our Brazil
operations.
|
(5)
|
Relates primarily to
the following: (i) as a result of the relocation of our Fleming's
operations center to the corporate home office in 2016 and (ii) our
organizational realignment in 2015.
|
(6)
|
Represents expenses
incurred for the Bonefish Restructuring and the International and
Domestic Restaurant Closure Initiatives.
|
(7)
|
Fees and expenses
related to certain legal and contingent matters, including the
Cardoza litigation.
|
(8)
|
Relates to a payroll
tax audit contingency adjustment for the employer's share of FICA
taxes related to cash tips allegedly received and unreported by our
employees during calendar year 2011, which is recorded in Labor and
other related expenses. In addition, a deferred income tax
adjustment has been recorded for the allowable income tax credits
for the employer's share of FICA taxes expected to be paid, which
is included in Provision for income taxes and offsets the
adjustment to Labor and other related expenses. As a result, there
is no impact to Net income from this adjustment.
|
(9)
|
Relates to the
amendment of the PRP Mortgage Loan in July 2016, defeasance of the
2012 CMBS loan in February 2016 and the refinancing of our Senior
Secured Credit Facility in 2015.
|
(10)
|
Primarily relates to
the sale of Outback Steakhouse South Korea in 2016 and Roy's in
2015.
|
(11)
|
Represents income tax
effect of the adjustments, on a jurisdiction basis, for the
thirteen and thirty-nine weeks ended September 25, 2016 and
September 27, 2015, respectively. Included in the adjustments for
the thirteen weeks and thirty-nine weeks ended September 25, 2016
is ($1.1) million and $2.4 million, respectively, for taxes related
to the Outback Steakhouse South Korea sale.
|
Following is a
summary of the financial statement line item classification of the
net income adjustments:
|
|
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
(dollars in
thousands)
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
Labor and other
related
|
$
|
—
|
|
|
$
|
(2,916)
|
|
|
$
|
—
|
|
|
$
|
(5,587)
|
|
Other restaurant
operating
|
(169)
|
|
|
16
|
|
|
(1,940)
|
|
|
(100)
|
|
Depreciation and
amortization
|
2,768
|
|
|
1,310
|
|
|
6,599
|
|
|
3,802
|
|
General and
administrative
|
1,047
|
|
|
2,129
|
|
|
3,958
|
|
|
4,017
|
|
Provision for
impaired assets and restaurant closings
|
2,764
|
|
|
1,638
|
|
|
45,847
|
|
|
10,939
|
|
Loss on defeasance,
extinguishment and modification of debt
|
418
|
|
|
—
|
|
|
26,998
|
|
|
2,638
|
|
Other income
(expense), net
|
(2,084)
|
|
|
298
|
|
|
(2,084)
|
|
|
1,328
|
|
Provision for income
taxes
|
(2,930)
|
|
|
(665)
|
|
|
(11,107)
|
|
|
(3,245)
|
|
Net
adjustments
|
$
|
1,814
|
|
|
$
|
1,810
|
|
|
$
|
68,271
|
|
|
$
|
13,792
|
|
TABLE
SIX
|
BLOOMIN' BRANDS,
INC.
|
SEGMENT INCOME
FROM OPERATIONS NON-GAAP RECONCILIATION
|
(UNAUDITED)
|
U.S.
Segment
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
(dollars in
thousands)
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
Income from
operations
|
$
|
61,905
|
|
|
$
|
63,476
|
|
|
$
|
268,754
|
|
|
$
|
287,936
|
|
Operating income
margin
|
6.9%
|
|
|
7.0%
|
|
|
9.3%
|
|
|
9.8%
|
|
Adjustments:
|
|
|
|
|
|
|
|
Asset impairments and
related costs (1)
|
3,208
|
|
|
—
|
|
|
3,208
|
|
|
—
|
|
Restaurant
relocations, remodels and related costs (2)
|
1,808
|
|
|
1,872
|
|
|
3,572
|
|
|
3,163
|
|
Severance
(3)
|
—
|
|
|
—
|
|
|
1,276
|
|
|
—
|
|
Transaction-related
expenses (4)
|
530
|
|
|
—
|
|
|
675
|
|
|
—
|
|
Restaurant
impairments and closing costs (5)
|
(685)
|
|
|
(20)
|
|
|
1,539
|
|
|
1,316
|
|
Adjusted income from
operations
|
$
|
66,766
|
|
|
$
|
65,328
|
|
|
$
|
279,024
|
|
|
$
|
292,415
|
|
Adjusted operating
income margin
|
7.5%
|
|
|
7.2%
|
|
|
9.6%
|
|
|
9.9%
|
|
|
|
|
|
|
|
|
|
International
Segment
|
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
$
|
8,277
|
|
|
$
|
9,770
|
|
|
$
|
(14,947)
|
|
|
$
|
24,376
|
|
Operating income
(loss) margin
|
7.4%
|
|
|
7.9%
|
|
|
(4.3)%
|
|
|
6.4%
|
|
Adjustments:
|
|
|
|
|
|
|
|
Asset impairments and
related costs (6)
|
—
|
|
|
—
|
|
|
40,023
|
|
|
—
|
|
Purchased intangibles
amortization (7)
|
1,032
|
|
|
1,047
|
|
|
2,841
|
|
|
3,453
|
|
Transaction-related
expenses (8)
|
161
|
|
|
—
|
|
|
161
|
|
|
—
|
|
Restaurant
impairments and closing costs (9)
|
—
|
|
|
205
|
|
|
(103)
|
|
|
7,676
|
|
Adjusted income from
operations
|
$
|
9,470
|
|
|
$
|
11,022
|
|
|
$
|
27,975
|
|
|
$
|
35,505
|
|
Adjusted operating
income margin
|
8.5%
|
|
|
8.9%
|
|
|
8.0%
|
|
|
9.3%
|
|
_________________
|
(1)
|
Represents asset
impairment charges and related costs associated with our Puerto
Rico subsidiary.
|
(2)
|
Represents asset
impairment charges and accelerated depreciation incurred in
connection with our relocation and remodel programs.
|
(3)
|
Relates primarily to
the relocation of our Fleming's operations center to the corporate
home office in 2016.
|
(4)
|
Relates to costs
incurred with our sale-leaseback initiative. For the
thirty-nine weeks ended September 25, 2016, includes an adjustment
of $0.3 million for amortization of deferred gains related to our
sale-leaseback initiative from our second fiscal quarter.
Subsequent to the second quarter, based on an ongoing review of our
non-GAAP presentations, we determined not to adjust for this item
on a prospective basis commencing with the thirteen weeks ended
September 25, 2016. We do not consider this change material to the
historical periods presented.
|
(5)
|
Represents expenses
incurred for the Bonefish Restructuring in 2016 and the Domestic
Restructuring Initiative in 2016 and 2015.
|
(6)
|
Represents asset
impairment charges and related costs associated with the decision
to sell Outback Steakhouse South Korea.
|
(7)
|
Represents intangible
amortization recorded as a result of the acquisition of our Brazil
operations.
|
(8)
|
Represents expenses
incurred in connection with our sale of Outback Steakhouse South
Korea.
|
(9)
|
Represents expenses
incurred primarily for the International Restaurant Closure
Initiative.
|
TABLE
SEVEN
|
BLOOMIN' BRANDS,
INC.
|
COMPARATIVE
RESTAURANT INFORMATION
|
(UNAUDITED)
|
Number of
restaurants (at end of the period):
|
JUNE 26,
2016
|
|
OPENINGS
|
|
CLOSURES
|
|
OTHER
|
|
SEPTEMBER 25,
2016
|
U.S.
|
|
|
|
|
|
|
|
|
|
Outback
Steakhouse
|
|
|
|
|
|
|
|
|
|
Company-owned
|
650
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
651
|
|
Franchised
|
105
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105
|
|
Total
|
755
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
756
|
|
Carrabba's Italian
Grill
|
|
|
|
|
|
|
|
|
|
Company-owned
|
244
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
243
|
|
Franchised
|
3
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
2
|
|
Total
|
247
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
245
|
|
Bonefish
Grill
|
|
|
|
|
|
|
|
|
|
Company-owned
|
204
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
204
|
|
Franchised
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
Total
|
210
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
210
|
|
Fleming's Prime
Steakhouse & Wine Bar
|
|
|
|
|
|
|
|
|
|
Company-owned
|
66
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
67
|
|
International
|
|
|
|
|
|
|
|
|
|
Company-owned
|
|
|
|
|
|
|
|
|
|
Outback
Steakhouse—Brazil (1)
|
78
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
81
|
|
Outback
Steakhouse—South Korea (2)
|
74
|
|
|
—
|
|
|
(2)
|
|
|
(72)
|
|
|
—
|
|
Other
|
19
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
24
|
|
Franchised
|
|
|
|
|
|
|
|
|
|
Outback
Steakhouse - South Korea (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|
72
|
|
Other
|
52
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
Total
|
223
|
|
|
8
|
|
|
(2)
|
|
|
—
|
|
|
229
|
|
System-wide
total
|
1,501
|
|
|
10
|
|
|
(4)
|
|
|
—
|
|
|
1,507
|
|
____________________
|
(1)
|
The restaurant counts
for Brazil are reported as of August 31, 2016 and 2015,
respectively, to correspond with the balance sheet dates of this
subsidiary.
|
(2)
|
On July 25, 2016, we
sold our restaurant locations in South Korea, converting all
restaurants in that market to franchised locations.
|
TABLE
EIGHT
|
BLOOMIN' BRANDS,
INC.
|
COMPARABLE
RESTAURANT SALES INFORMATION
|
(UNAUDITED)
|
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 27,
2015
|
Year over year
percentage change:
|
|
|
|
|
|
|
|
Comparable restaurant
sales (stores open 18 months or
more) (1):
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
|
|
|
|
Outback
Steakhouse
|
(0.7)%
|
|
|
0.1%
|
|
|
(1.6)%
|
|
|
3.1%
|
|
Carrabba's
Italian Grill
|
(2.1)%
|
|
|
(2.0)%
|
|
|
(2.9)%
|
|
|
0.4%
|
|
Bonefish
Grill
|
1.7%
|
|
|
(6.1)%
|
|
|
(0.1)%
|
|
|
(2.8)%
|
|
Fleming's
Prime Steakhouse & Wine Bar
|
(1.9)%
|
|
|
(0.6)%
|
|
|
(0.3)%
|
|
|
2.0%
|
|
Combined
U.S.
|
(0.7)%
|
|
|
(1.3)%
|
|
|
(1.5)%
|
|
|
1.6%
|
|
International
|
|
|
|
|
|
|
|
Outback
Steakhouse - Brazil (2)
|
7.3%
|
|
|
6.1%
|
|
|
6.9%
|
|
|
4.9%
|
|
|
|
|
|
|
|
|
|
Traffic:
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
|
|
|
|
Outback
Steakhouse
|
(6.5)%
|
|
|
(0.9)%
|
|
|
(5.1)%
|
|
|
(0.4)%
|
|
Carrabba's
Italian Grill
|
(4.5)%
|
|
|
(3.7)%
|
|
|
(2.5)%
|
|
|
0.5%
|
|
Bonefish
Grill
|
(2.0)%
|
|
|
(8.5)%
|
|
|
(3.3)%
|
|
|
(5.5)%
|
|
Fleming's
Prime Steakhouse & Wine Bar
|
(2.9)%
|
|
|
(2.3)%
|
|
|
(1.6)%
|
|
|
0.9%
|
|
Combined
U.S.
|
(5.4)%
|
|
|
(2.6)%
|
|
|
(4.2)%
|
|
|
(1.0)%
|
|
International
|
|
|
|
|
|
|
|
Outback
Steakhouse - Brazil
|
1.4%
|
|
|
0.6%
|
|
|
0.2%
|
|
|
0.1%
|
|
|
|
|
|
|
|
|
|
Average check per
person increases (decreases) (3):
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
|
|
|
|
Outback
Steakhouse
|
5.8%
|
|
|
1.0%
|
|
|
3.5%
|
|
|
3.5%
|
|
Carrabba's
Italian Grill
|
2.4%
|
|
|
1.7%
|
|
|
(0.4)%
|
|
|
(0.1)%
|
|
Bonefish
Grill
|
3.7%
|
|
|
2.4%
|
|
|
3.2%
|
|
|
2.7%
|
|
Fleming's
Prime Steakhouse & Wine Bar
|
1.0%
|
|
|
1.7%
|
|
|
1.3%
|
|
|
1.1%
|
|
Combined
U.S.
|
4.7%
|
|
|
1.3%
|
|
|
2.7%
|
|
|
2.6%
|
|
International
|
|
|
|
|
|
|
|
Outback
Steakhouse - Brazil
|
6.0%
|
|
|
6.2%
|
|
|
6.6%
|
|
|
5.1%
|
|
____________________
|
(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 the trading
day impact from calendar period reporting of (0.1%) and (0.7%) for
the thirteen weeks ended September 25, 2016 and September 27, 2015,
respectively and 0.1% and (0.3%) for the thirty-nine weeks ended
September 25, 2016 and September 27, 2015, respectively.
|
(3)
|
Average check per
person increases (decreases) includes the impact of menu pricing
changes, product mix and discounts.
|
Chris Meyer
Group Vice President, IR & Finance
(813) 830-5311
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/bloomin-brands-announces-2016-q3-diluted-eps-of-018-and-adjusted-diluted-eps-of-020-repurchases-71-million-shares-of-common-stock-for-135-million-300353097.html
SOURCE Bloomin' Brands, Inc.