TAMPA, Fla., Nov. 3, 2017 /PRNewswire/ -- Bloomin'
Brands, Inc. (Nasdaq: BLMN) today reported results for the third
quarter 2017 ("Q3 2017") compared to the third quarter 2016 ("Q3
2016").
Highlights for Q3 2017 include the following:
- Comparable restaurant sales were up 0.6% at U.S. Outback
Steakhouse with traffic up 0.1%;
- Combined U.S. comparable restaurant sales were down
(1.0)%;
- Combined negative impact of Hurricanes Harvey and Irma was
estimated to be 1.0% to comp sales and $0.04 to Diluted EPS;
- Comparable restaurant sales were up 4.8% for Outback Steakhouse
in Brazil; and
- Opened eight new restaurants including six in international
markets.
Subsequent to the fiscal second quarter earnings call, we
repurchased $40 million of common
stock, bringing the total year-to-date share repurchases to
$273 million through November 3,
2017.
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
|
|
|
|
2017
|
|
2016
|
|
CHANGE
|
Diluted earnings per
share
|
$
|
0.05
|
|
|
$
|
0.18
|
|
|
$
|
(0.13)
|
|
Adjustments
|
0.07
|
|
|
0.01
|
|
|
0.06
|
|
Adjusted diluted
earnings per share
|
$
|
0.12
|
|
|
$
|
0.19
|
|
|
$
|
(0.07)
|
|
|
|
|
|
|
|
___________________
|
See Non-GAAP Measures
later in this release.
|
CEO Comments
"We were pleased with how we performed in a challenging third
quarter," said Liz Smith, CEO. "In
particular, Outback's positive response to investments in the
customer experience returned us to traffic growth in Q3. We have
seen further strengthening across the portfolio in October;
however, we maintain a cautious outlook on the industry as we enter
the holiday season, and this is reflected in our updated
guidance."
Third Quarter Financial Results
(dollars in
millions)
|
Q3
2017
|
|
Q3
2016
|
|
CHANGE
|
Total
revenues
|
$
|
948.9
|
|
|
$
|
1,005.4
|
|
|
(5.6)%
|
|
|
|
|
|
|
|
U.S. GAAP
restaurant-level operating margin
|
13.3
|
%
|
|
14.4
|
%
|
|
(1.1)%
|
|
Adjusted
restaurant-level operating margin (1)
|
13.3
|
%
|
|
14.3
|
%
|
|
(1.0)%
|
|
|
|
|
|
|
|
U.S. GAAP operating
income margin
|
0.3
|
%
|
|
3.2
|
%
|
|
(2.9)%
|
|
Adjusted operating
income margin (1)
|
2.4
|
%
|
|
3.6
|
%
|
|
(1.2)%
|
|
|
Costs associated with
hurricanes Harvey and Irma had a 40 basis point negative impact on
GAAP and adjusted restaurant margin and operating margin in Q3
2017.
|
___________________
|
(1)
See Non-GAAP Measures later in this release.
|
- The decrease in Total revenues was primarily due to
refranchising internationally and domestically and the net impact
of restaurant closings and new restaurant openings, partially
offset by an increase in franchise and other revenues.
- The decrease in U.S. GAAP and adjusted restaurant-level
operating margin was primarily due to: (i) higher labor costs, (ii)
unfavorable seafood and dairy costs, (iii) operating expense
inflation and (iv) higher net rent expense due to the
sale-leaseback of certain properties. These decreases were
partially offset by: (i) the impact of certain cost savings
initiatives, (ii) lower advertising expense, (iii) increases in
average check and (iv) lower beef costs.
- The decrease in U.S. GAAP operating income margin was primarily
due to a decrease in restaurant-level operating margin and
impairment charges. This decrease was partially offset by increases
primarily in franchise and other revenues.
- Adjusted operating income margin excludes certain impairment
charges and restaurant closing costs. See table five later in this
release for more information.
Third Quarter Comparable Restaurant Sales
THIRTEEN WEEKS
ENDED SEPTEMBER 24, 2017
|
|
COMPANY-OWNED
|
Comparable restaurant
sales (stores open 18 months or more):
|
|
|
U.S.
|
|
|
Outback
Steakhouse
|
|
0.6%
|
|
Carrabba's
Italian Grill
|
|
(2.8)%
|
|
Bonefish
Grill
|
|
(4.3)%
|
|
Fleming's
Prime Steakhouse & Wine Bar
|
|
(1.0)%
|
|
Combined
U.S.
|
|
(1.0)%
|
|
|
|
|
International
|
|
|
Outback
Steakhouse - Brazil
|
|
4.8%
|
|
Lost operating days from Hurricanes Harvey and Irma are included
in our calculation of comparable restaurant sales. These lost
operating days had an estimated 1.0% negative impact on third
quarter combined U.S. comp sales results.
Dividend Declaration and Share Repurchases
In October 2017, our Board of
Directors declared a quarterly cash dividend of $0.08 per share to be paid on November 22,
2017 to all stockholders of record as of the close of business on
November 13, 2017.
On April 21, 2017, our Board of Directors approved a new
$250 million share repurchase
program. As of November 3, 2017, we repurchased 9.6 million
shares of common stock for a total of $195
million and there is $55
million remaining under this authorization, which expires on
October 21, 2018.
Fiscal 2017 Financial Outlook
We have updated several of the metrics in our financial outlook
for fiscal 2017 primarily due to the negative impact of Hurricanes
Harvey and Irma as well as higher commodity expenses than planned.
In addition, although comp sales across the portfolio have improved
in October, we remain cautious on future industry sales trends
given the severity of industry declines in the third quarter and
uncertainty surrounding consumer behavior during the upcoming
holiday season.
The following table presents our updated expectations for
selected fiscal 2017 financial reporting and operating results as
compared to the financial outlook provided in our July 26, 2017 earnings release. These updated
expectations supersede the previously provided financial outlook.
Expectations for combined U.S. comparable restaurant sales, capital
expenditures, and number of new system-side restaurants are
unchanged from the July 26, 2017
outlook.
Financial
Results:
|
|
Outlook on Jul.
26
|
|
Current
Outlook
|
U.S. GAAP diluted
earnings per share (1)
|
|
$1.34 to
$1.41
|
|
$1.09 to
$1.14
|
|
|
|
|
|
Adjusted diluted
earnings per share (1)
|
|
$1.40 to
$1.47
|
|
$1.31 to
$1.36
|
|
|
|
|
|
U.S. GAAP effective
income tax rate
|
|
21% to 22%
|
|
15% to 16%
|
|
|
|
|
|
Adjusted effective
income tax rate
|
|
24% to 25%
|
|
23% to 24%
|
|
|
|
|
|
Other Selected
Financial Data:
|
|
|
|
|
|
|
|
|
|
Commodity inflation /
(deflation)
|
|
Flat to
(1%)
|
|
Flat to
(0.5%)
|
___________________
|
(1) The
difference between our U.S. GAAP and Adjusted diluted earnings per
share outlook is due to adjustments
to year-to-date results (as described in Table 5 later in this
release), as well as the estimated impact of certain
income adjustments on fiscal fourth quarter results.
|
Conference Call
The Company will host a conference call today, November 3rd at 9:00 AM
ET. 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 (844)
512-2921 or (412) 317-6671 for international callers. The replay
will be available through Friday, November
10th, 2017. The conference ID for the live call and replay
is 13672251. 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
administer 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 in tables four, five and six included later in this
release for descriptions of the actual adjustments made in the
current period and the corresponding prior period.
As previously announced, based on a review of our non-GAAP
presentations, we determined that, commencing with our results for
the first fiscal quarter of 2017, when presenting non-GAAP
measures, we will no longer adjust for expenses incurred in
connection with our remodel program or intangible amortization
recorded as a result of the acquisition of our Brazil operations. We recast historical
comparable periods to conform to the revised presentation.
In this release, we have also included forward-looking non-GAAP
information under the caption "Fiscal 2017 Financial Outlook". This
relates to our current expectations for fiscal 2017 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 to the extent practicable under "Fiscal
2017 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 additional
adjustments may occur in the remainder of the fiscal year and they
may significantly impact our GAAP results.
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 19
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" and "Fiscal 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: consumer reaction to public health and food
safety issues; competition; increases in labor costs; government
actions and policies; increases in unemployment rates and taxes;
local, regional, national and international economic conditions;
consumer confidence and spending patterns; 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; political,
social and legal conditions in international markets and their
effects on foreign operations and foreign currency exchange rates;
our ability to preserve the value of and grow our brands; 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; the cost and availability of credit; interest rate
changes; 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
|
(in thousands,
except per share data)
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
Revenues
|
|
|
|
|
|
|
|
Restaurant
sales
|
$
|
937,852
|
|
|
$
|
998,806
|
|
|
$
|
3,093,297
|
|
|
$
|
3,229,377
|
|
Franchise and other
revenues
|
11,047
|
|
|
6,581
|
|
|
32,407
|
|
|
18,786
|
|
Total
revenues
|
948,899
|
|
|
1,005,387
|
|
|
3,125,704
|
|
|
3,248,163
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
Cost of
sales
|
296,632
|
|
|
322,080
|
|
|
984,510
|
|
|
1,044,179
|
|
Labor and other
related
|
285,325
|
|
|
290,032
|
|
|
907,580
|
|
|
921,992
|
|
Other restaurant
operating
|
231,293
|
|
|
243,175
|
|
|
723,357
|
|
|
747,189
|
|
Depreciation and
amortization
|
47,826
|
|
|
48,551
|
|
|
142,479
|
|
|
145,206
|
|
General and
administrative
|
66,063
|
|
|
65,072
|
|
|
215,059
|
|
|
208,663
|
|
Provision for
impaired assets and restaurant closings
|
18,578
|
|
|
4,743
|
|
|
38,253
|
|
|
49,183
|
|
Total costs and
expenses
|
945,717
|
|
|
973,653
|
|
|
3,011,238
|
|
|
3,116,412
|
|
Income from
operations
|
3,182
|
|
|
31,734
|
|
|
114,466
|
|
|
131,751
|
|
Loss on defeasance,
extinguishment and modification of debt
|
—
|
|
|
(418)
|
|
|
(260)
|
|
|
(26,998)
|
|
Other income,
net
|
7,531
|
|
|
2,079
|
|
|
14,761
|
|
|
2,059
|
|
Interest expense,
net
|
(10,705)
|
|
|
(10,217)
|
|
|
(29,389)
|
|
|
(33,394)
|
|
Income before
(benefit) provision for income taxes
|
8
|
|
|
23,178
|
|
|
99,578
|
|
|
73,418
|
|
(Benefit) provision
for income taxes
|
(4,038)
|
|
|
1,950
|
|
|
14,280
|
|
|
24,372
|
|
Net income
|
4,046
|
|
|
21,228
|
|
|
85,298
|
|
|
49,046
|
|
Less: net (loss)
income attributable to noncontrolling
interests
|
(290)
|
|
|
495
|
|
|
1,422
|
|
|
3,015
|
|
Net income
attributable to Bloomin' Brands
|
$
|
4,336
|
|
|
$
|
20,733
|
|
|
$
|
83,876
|
|
|
$
|
46,031
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.05
|
|
|
$
|
0.19
|
|
|
$
|
0.85
|
|
|
$
|
0.41
|
|
Diluted
|
$
|
0.05
|
|
|
$
|
0.18
|
|
|
$
|
0.83
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
92,485
|
|
|
109,399
|
|
|
98,137
|
|
|
113,553
|
|
Diluted
|
95,655
|
|
|
112,430
|
|
|
101,497
|
|
|
116,516
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
$
|
0.08
|
|
|
$
|
0.07
|
|
|
$
|
0.24
|
|
|
$
|
0.21
|
|
TABLE
TWO
|
BLOOMIN' BRANDS,
INC.
|
SEGMENT
RESULTS
|
(UNAUDITED)
|
(dollars in
thousands)
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
U.S.
Segment
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
Revenues
|
|
|
|
|
|
|
|
Restaurant
sales
|
$
|
823,916
|
|
|
$
|
889,350
|
|
|
$
|
2,758,165
|
|
|
$
|
2,882,091
|
|
Franchise and other
revenues
|
8,157
|
|
|
4,556
|
|
|
23,895
|
|
|
14,575
|
|
Total
revenues
|
$
|
832,073
|
|
|
$
|
893,906
|
|
|
$
|
2,782,060
|
|
|
$
|
2,896,666
|
|
Restaurant-level operating margin
|
12.2
|
%
|
|
14.1
|
%
|
|
14.7
|
%
|
|
15.7
|
%
|
Income from
operations
|
$
|
28,139
|
|
|
$
|
61,905
|
|
|
$
|
204,153
|
|
|
$
|
268,754
|
|
Operating
income margin
|
3.4
|
%
|
|
6.9
|
%
|
|
7.3
|
%
|
|
9.3
|
%
|
International
Segment
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
Restaurant
sales
|
$
|
113,936
|
|
|
$
|
109,456
|
|
|
$
|
335,132
|
|
|
$
|
347,286
|
|
Franchise and other
revenues
|
2,890
|
|
|
2,025
|
|
|
8,512
|
|
|
4,211
|
|
Total
revenues
|
$
|
116,826
|
|
|
$
|
111,481
|
|
|
$
|
343,644
|
|
|
$
|
351,497
|
|
Restaurant-level operating margin
|
20.7
|
%
|
|
18.2
|
%
|
|
20.7
|
%
|
|
17.9
|
%
|
Income (loss) from
operations
|
$
|
8,442
|
|
|
$
|
8,277
|
|
|
$
|
26,923
|
|
|
$
|
(14,947)
|
|
Operating
income (loss) margin
|
7.2
|
%
|
|
7.4
|
%
|
|
7.8
|
%
|
|
(4.3)
|
%
|
Reconciliation of
Segment Income (Loss) from
Operations to Consolidated Income from
Operations
|
|
|
|
|
|
|
|
Segment income (loss)
from operations
|
|
|
|
|
|
|
|
U.S.
|
$
|
28,139
|
|
|
$
|
61,905
|
|
|
$
|
204,153
|
|
|
$
|
268,754
|
|
International
|
8,442
|
|
|
8,277
|
|
|
26,923
|
|
|
(14,947)
|
|
Total segment
income from operations
|
36,581
|
|
|
70,182
|
|
|
231,076
|
|
|
253,807
|
|
Unallocated
corporate operating expense
|
(33,399)
|
|
|
(38,448)
|
|
|
(116,610)
|
|
|
(122,056)
|
|
Total income
from operations
|
$
|
3,182
|
|
|
$
|
31,734
|
|
|
$
|
114,466
|
|
|
$
|
131,751
|
|
TABLE
THREE
|
BLOOMIN' BRANDS,
INC.
|
SUPPLEMENTAL
BALANCE SHEET INFORMATION
|
(UNAUDITED)
|
(in
thousands)
|
SEPTEMBER 24,
2017
|
|
DECEMBER 25,
2016
|
Cash and cash
equivalents (1)
|
$
|
98,697
|
|
|
$
|
127,176
|
|
Net working capital
(deficit) (2)
|
$
|
(458,052)
|
|
|
$
|
(432,889)
|
|
Total
assets
|
$
|
2,472,954
|
|
|
$
|
2,642,279
|
|
Total debt,
net
|
$
|
1,200,692
|
|
|
$
|
1,089,485
|
|
Total stockholders'
equity (3)
|
$
|
36,634
|
|
|
$
|
195,353
|
|
Common stock
outstanding (3)
|
91,164
|
|
|
103,922
|
|
_________________
|
(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.
|
(3) During
the thirty-nine weeks ended September 24, 2017, we repurchased 13.8
million shares of our
outstanding
common stock.
|
TABLE
FOUR
|
BLOOMIN' BRANDS,
INC.
|
RESTAURANT-LEVEL
OPERATING MARGIN NON-GAAP RECONCILIATION
|
(UNAUDITED)
|
|
THIRTEEN WEEKS
ENDED
|
|
(UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
|
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
|
Consolidated:
|
U.S.
GAAP
|
|
ADJUSTED
(1)
|
|
U.S.
GAAP
|
|
ADJUSTED
(1)
|
|
QUARTER TO
DATE
|
Restaurant
sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
31.6
|
%
|
|
31.6
|
%
|
|
32.2
|
%
|
|
32.2
|
%
|
|
0.6
|
%
|
Labor and other
related
|
30.4
|
%
|
|
30.4
|
%
|
|
29.0
|
%
|
|
29.0
|
%
|
|
(1.4)
|
%
|
Other restaurant
operating
|
24.7
|
%
|
|
24.7
|
%
|
|
24.3
|
%
|
|
24.4
|
%
|
|
(0.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
Restaurant-level
operating margin (2)
|
13.3
|
%
|
|
13.3
|
%
|
|
14.4
|
%
|
|
14.3
|
%
|
|
(1.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
Segments:
|
|
|
|
|
|
|
|
|
|
Restaurant-level
operating margin -
U.S. (2)
|
12.2
|
%
|
|
12.1
|
%
|
|
14.1
|
%
|
|
14.1
|
%
|
|
(2.0)
|
%
|
Restaurant-level
operating margin -
International (2)
|
20.7
|
%
|
|
20.7
|
%
|
|
18.2
|
%
|
|
18.2
|
%
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
THIRTY-NINE WEEKS
ENDED
|
|
(UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
|
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
|
Consolidated:
|
U.S.
GAAP
|
|
ADJUSTED
(3)
|
|
U.S.
GAAP
|
|
ADJUSTED
(4)
|
|
YEAR TO
DATE
|
Restaurant
sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
31.8
|
%
|
|
31.8
|
%
|
|
32.3
|
%
|
|
32.3
|
%
|
|
0.5
|
%
|
Labor and other
related
|
29.3
|
%
|
|
29.3
|
%
|
|
28.6
|
%
|
|
28.6
|
%
|
|
(0.7)
|
%
|
Other restaurant
operating
|
23.4
|
%
|
|
23.6
|
%
|
|
23.1
|
%
|
|
23.2
|
%
|
|
(0.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
Restaurant-level
operating margin (2)
|
15.4
|
%
|
|
15.3
|
%
|
|
16.0
|
%
|
|
15.9
|
%
|
|
(0.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
Segments:
|
|
|
|
|
|
|
|
|
|
Restaurant-level
operating margin -
U.S. (2)
|
14.7
|
%
|
|
14.5
|
%
|
|
15.7
|
%
|
|
15.7
|
%
|
|
(1.2)
|
%
|
Restaurant-level
operating margin -
International (2)
|
20.7
|
%
|
|
20.7
|
%
|
|
17.9
|
%
|
|
17.9
|
%
|
|
2.8
|
%
|
_________________
|
(1) Includes
adjustments for the write-off of $0.2 million of deferred rent
liabilities associated with our relocation program, recorded in
Other restaurant
operating.
|
(2) The
following categories of our revenue and operating expenses are not
included in restaurant-level operating margin because we do not
consider
them reflective of operating performance at the restaurant-level
within a period:
|
(i) Franchise and other
revenues, which are earned primarily from franchise royalties and
other non-food and beverage revenue streams, such
as rental and sublease income.
|
(ii) Depreciation and
amortization which, although substantially all of which is related
to restaurant-level assets, represent historical sunk costs
rather than cash outlays for the restaurants.
|
(iii) General and administrative
expense which includes primarily non-restaurant-level costs
associated with support of the restaurants and other
activities at our corporate offices.
|
(iv) Asset impairment charges
and restaurant closing costs which are not reflective of ongoing
restaurant performance in a period.
|
(3) Includes
adjustments for the write-off of $5.5 million of deferred rent
liabilities associated with the 2017 Closure Initiative and our
relocation program,
recorded in Other restaurant operating.
|
(4) Includes
adjustments for the write-off of $1.9 million of deferred rent
liabilities, primarily associated with the Bonefish Restructuring,
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 24,
2017
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
Income from
operations
|
$
|
3,182
|
|
|
$
|
31,734
|
|
|
$
|
114,466
|
|
|
$
|
131,751
|
|
Operating income
margin
|
0.3
|
%
|
|
3.2
|
%
|
|
3.7
|
%
|
|
4.1
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
Asset impairments and
related costs (1)
|
10,566
|
|
|
3,208
|
|
|
10,566
|
|
|
43,231
|
|
Restaurant
impairments and closing costs (2)
|
4,726
|
|
|
(685)
|
|
|
20,925
|
|
|
1,435
|
|
Restaurant
relocations and related costs (3)
|
3,743
|
|
|
1,141
|
|
|
8,101
|
|
|
2,047
|
|
Severance
(4)
|
1,015
|
|
|
—
|
|
|
1,015
|
|
|
1,872
|
|
Transaction-related
expenses (5)
|
—
|
|
|
1,047
|
|
|
1,447
|
|
|
1,513
|
|
Total income from
operations adjustments
|
20,050
|
|
|
4,711
|
|
|
42,054
|
|
|
50,098
|
|
Adjusted income from
operations
|
$
|
23,232
|
|
|
$
|
36,445
|
|
|
$
|
156,520
|
|
|
$
|
181,849
|
|
Adjusted operating
income margin
|
2.4
|
%
|
|
3.6
|
%
|
|
5.0
|
%
|
|
5.6
|
%
|
|
|
|
|
|
|
|
|
Net income
attributable to Bloomin' Brands
|
$
|
4,336
|
|
|
$
|
20,733
|
|
|
$
|
83,876
|
|
|
$
|
46,031
|
|
Adjustments:
|
|
|
|
|
|
|
|
Income from
operations adjustments
|
20,050
|
|
|
4,711
|
|
|
42,054
|
|
|
50,098
|
|
Gain on disposal of
business and other costs (6)
|
(7,570)
|
|
|
(2,084)
|
|
|
(14,854)
|
|
|
(2,084)
|
|
Loss on defeasance,
extinguishment and modification of
debt (7)
|
—
|
|
|
418
|
|
|
260
|
|
|
26,998
|
|
Total adjustments,
before income taxes
|
12,480
|
|
|
3,045
|
|
|
27,460
|
|
|
75,012
|
|
Adjustment to
provision for income taxes (8)
|
(5,074)
|
|
|
(2,338)
|
|
|
(14,018)
|
|
|
(9,382)
|
|
Net
adjustments
|
7,406
|
|
|
707
|
|
|
13,442
|
|
|
65,630
|
|
Adjusted net
income
|
$
|
11,742
|
|
|
$
|
21,440
|
|
|
$
|
97,318
|
|
|
$
|
111,661
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
|
0.05
|
|
|
$
|
0.18
|
|
|
$
|
0.83
|
|
|
$
|
0.40
|
|
Adjusted diluted
earnings per share
|
$
|
0.12
|
|
|
$
|
0.19
|
|
|
$
|
0.96
|
|
|
$
|
0.96
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares outstanding
|
95,655
|
|
|
112,430
|
|
|
101,497
|
|
|
116,516
|
|
_________________
|
(1)
Represents asset impairment charges and related costs primarily
associated with: (i) the remeasurement of certain surplus
properties currently leased
to the owners of our former restaurant concepts in 2017, (ii) our
Puerto Rico subsidiary in 2016 and (iii) the decision to sell
Outback Steakhouse South
Korea in 2016.
|
(2)
Represents expenses incurred for approved closure and restructuring
initiatives.
|
(3)
Represents asset impairment charges and accelerated depreciation
incurred in connection with our relocation program.
|
(4)
Relates to severance expense incurred primarily as a result of: (i)
restructuring of certain functions in 2017 and (ii) the relocation
of our Fleming's
operations center to the corporate home office in 2016.
|
(5)
Relates primarily to the following: (i) professional fees related
to certain income tax items in which the associated tax benefit is
adjusted in Adjustments
to provision for income taxes in 2017, as described in footnote 8
to this table, and (ii) costs incurred in connection with our
sale-leaseback initiative in
2017 and 2016.
|
(6)
Primarily relates to: (i) the sale of 54 U.S. Company-owned
restaurants to existing franchisees in the second quarter of 2017,
(ii) a gain of the sale of
one Carrabba's Italian Grill restaurant during the third quarter of
2017, (iii) expenses related to certain surplus properties during
the third quarter of 2017
and (iv) the sale of Outback Steakhouse South Korea during the
third quarter of 2016.
|
(7)
Relates to modification of our Credit Agreement in 2017 and
amendments of the PRP Mortgage loan and the defeasance of the 2012
CMBS loan in
2016.
|
(8)
Represents income tax effect of the adjustments for the thirteen
and thirty-nine weeks ended September 24, 2017 and September 25,
2016.
Adjustments include the impact of excluding $4.6 million of
discrete income tax items for the thirty-nine weeks ended September
24, 2017.
|
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 24,
2017
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
Other restaurant
operating
|
$
|
(194)
|
|
|
$
|
(220)
|
|
|
$
|
(5,481)
|
|
|
$
|
(2,084)
|
|
Depreciation and
amortization
|
1,777
|
|
|
1,121
|
|
|
5,109
|
|
|
2,377
|
|
General and
administrative
|
1,015
|
|
|
1,047
|
|
|
5,409
|
|
|
3,958
|
|
Provision for
impaired assets and restaurant closings
|
17,452
|
|
|
2,764
|
|
|
37,017
|
|
|
45,847
|
|
Loss on defeasance,
extinguishment and modification of debt
|
—
|
|
|
418
|
|
|
260
|
|
|
26,998
|
|
Other income,
net
|
(7,570)
|
|
|
(2,085)
|
|
|
(14,854)
|
|
|
(2,084)
|
|
Provision for income
taxes
|
(5,074)
|
|
|
(2,338)
|
|
|
(14,018)
|
|
|
(9,382)
|
|
Net
adjustments
|
$
|
7,406
|
|
|
$
|
707
|
|
|
$
|
13,442
|
|
|
$
|
65,630
|
|
TABLE
SIX
|
BLOOMIN' BRANDS,
INC.
|
SEGMENT INCOME
(LOSS) FROM OPERATIONS NON-GAAP RECONCILIATION
|
(UNAUDITED)
|
U.S.
Segment
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
(dollars in
thousands)
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
Income from
operations
|
$
|
28,139
|
|
|
$
|
61,905
|
|
|
$
|
204,153
|
|
|
$
|
268,754
|
|
Operating income
margin
|
3.4
|
%
|
|
6.9
|
%
|
|
7.3
|
%
|
|
9.3
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
Asset impairments and
related costs (1)
|
10,566
|
|
|
3,208
|
|
|
10,566
|
|
|
3,208
|
|
Restaurant
impairments and closing costs (2)
|
3,071
|
|
|
(685)
|
|
|
19,270
|
|
|
1,539
|
|
Restaurant
relocations and related costs (3)
|
3,743
|
|
|
1,142
|
|
|
8,101
|
|
|
2,047
|
|
Severance
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,276
|
|
Transaction-related
expenses (5)
|
—
|
|
|
530
|
|
|
347
|
|
|
675
|
|
Adjusted income from
operations
|
$
|
45,519
|
|
|
$
|
66,100
|
|
|
$
|
242,437
|
|
|
$
|
277,499
|
|
Adjusted operating
income margin
|
5.5
|
%
|
|
7.4
|
%
|
|
8.7
|
%
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
International
Segment
|
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
$
|
8,442
|
|
|
$
|
8,277
|
|
|
$
|
26,923
|
|
|
$
|
(14,947)
|
|
Operating income
(loss) margin
|
7.2
|
%
|
|
7.4
|
%
|
|
7.8
|
%
|
|
(4.3)
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
Restaurant
impairments and closing costs (2)
|
1,655
|
|
|
—
|
|
|
1,655
|
|
|
(103)
|
|
Severance
|
290
|
|
|
—
|
|
|
290
|
|
|
—
|
|
Asset impairments and
related costs (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
40,023
|
|
Transaction-related
expenses (6)
|
—
|
|
|
161
|
|
|
—
|
|
|
161
|
|
Adjusted income from
operations
|
$
|
10,387
|
|
|
$
|
8,438
|
|
|
$
|
28,868
|
|
|
$
|
25,134
|
|
Adjusted operating
income margin
|
8.9
|
%
|
|
7.6
|
%
|
|
8.4
|
%
|
|
7.2
|
%
|
_________________
|
(1)
Represents asset impairment charges and related costs primarily
associated with: (i) the remeasurement of certain surplus
properties in 2017 and (ii) our
Puerto Rico subsidiary in 2016.
|
(2)
Represents expenses incurred for approved closure and restructuring
initiatives.
|
(3)
Represents asset impairment charges and accelerated depreciation
incurred in connection with our relocation program.
|
(4)
Relates to severance expense primarily resulting from the
relocation of our Fleming's operations center to the corporate home
office.
|
(5)
Represents costs incurred in connection with our sale-leaseback
initiative.
|
(6)
Represents asset impairment charges and related costs primarily
associated with the decision to sell Outback Steakhouse South
Korea.
|
TABLE
SEVEN
|
BLOOMIN' BRANDS,
INC.
|
COMPARATIVE
RESTAURANT INFORMATION
|
(UNAUDITED)
|
Number of
restaurants (at end of the period):
|
JUNE 25,
2017
|
|
OPENINGS
|
|
CLOSURES
|
|
SEPTEMBER 24,
2017
|
U.S.
|
|
|
|
|
|
|
|
Outback
Steakhouse
|
|
|
|
|
|
|
|
Company-owned
|
584
|
|
|
—
|
|
|
—
|
|
|
584
|
|
Franchised
|
158
|
|
|
—
|
|
|
(2)
|
|
|
156
|
|
Total
|
742
|
|
|
—
|
|
|
(2)
|
|
|
740
|
|
Carrabba's Italian
Grill
|
|
|
|
|
|
|
|
Company-owned
|
227
|
|
|
—
|
|
|
(1)
|
|
|
226
|
|
Franchised
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Total
|
230
|
|
|
—
|
|
|
(1)
|
|
|
229
|
|
Bonefish
Grill
|
|
|
|
|
|
|
|
Company-owned
|
196
|
|
|
—
|
|
|
(1)
|
|
|
195
|
|
Franchised
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
Total
|
203
|
|
|
—
|
|
|
(1)
|
|
|
202
|
|
Fleming's Prime
Steakhouse & Wine Bar
|
|
|
|
|
|
|
|
Company-owned
|
67
|
|
|
1
|
|
|
—
|
|
|
68
|
|
Express
|
|
|
|
|
|
|
|
Company-owned
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
International
|
|
|
|
|
|
|
|
Company-owned
|
|
|
|
|
|
|
|
Outback
Steakhouse—Brazil (1)
|
85
|
|
|
2
|
|
|
—
|
|
|
87
|
|
Other
|
33
|
|
|
3
|
|
|
—
|
|
|
36
|
|
Franchised
|
|
|
|
|
|
|
|
Outback
Steakhouse - South Korea
|
74
|
|
|
—
|
|
|
—
|
|
|
74
|
|
Other
|
54
|
|
|
1
|
|
|
(1)
|
|
|
54
|
|
Total
|
246
|
|
|
6
|
|
|
(1)
|
|
|
251
|
|
System-wide
total
|
1,488
|
|
|
8
|
|
|
(5)
|
|
|
1,491
|
|
____________________
|
(1) The
restaurant counts for Brazil are reported as of May 31, 2017 and
August 31, 2017 to correspond with the
balance sheet dates of this subsidiary.
|
TABLE
EIGHT
|
BLOOMIN' BRANDS,
INC.
|
COMPARABLE
RESTAURANT SALES INFORMATION
|
(UNAUDITED)
|
|
THIRTEEN WEEKS
ENDED
|
|
THIRTY-NINE WEEKS
ENDED
|
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
|
SEPTEMBER 24,
2017
|
|
SEPTEMBER 25,
2016
|
Year over year
percentage change:
|
|
|
|
|
|
|
|
Comparable restaurant
sales (stores open 18 months or
more) (1):
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
|
|
|
|
Outback
Steakhouse
|
0.6
|
%
|
|
(0.7)
|
%
|
|
0.8
|
%
|
|
(1.6)
|
%
|
Carrabba's
Italian Grill
|
(2.8)
|
%
|
|
(2.1)
|
%
|
|
(2.1)
|
%
|
|
(2.9)
|
%
|
Bonefish
Grill
|
(4.3)
|
%
|
|
1.7
|
%
|
|
(2.4)
|
%
|
|
(0.1)
|
%
|
Fleming's
Prime Steakhouse & Wine Bar
|
(1.0)
|
%
|
|
(1.9)
|
%
|
|
(1.8)
|
%
|
|
(0.3)
|
%
|
Combined U.S.
(2)
|
(1.0)
|
%
|
|
(0.7)
|
%
|
|
(0.5)
|
%
|
|
(1.5)
|
%
|
International
|
|
|
|
|
|
|
|
Outback
Steakhouse - Brazil (3)
|
4.8
|
%
|
|
7.3
|
%
|
|
6.9
|
%
|
|
6.9
|
%
|
|
|
|
|
|
|
|
|
Traffic:
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
|
|
|
|
Outback
Steakhouse
|
0.1
|
%
|
|
(6.5)
|
%
|
|
(1.1)
|
%
|
|
(5.1)
|
%
|
Carrabba's
Italian Grill
|
(4.2)
|
%
|
|
(4.5)
|
%
|
|
(4.5)
|
%
|
|
(2.5)
|
%
|
Bonefish
Grill
|
(5.7)
|
%
|
|
(2.0)
|
%
|
|
(3.5)
|
%
|
|
(3.3)
|
%
|
Fleming's
Prime Steakhouse & Wine Bar
|
(6.5)
|
%
|
|
(2.9)
|
%
|
|
(6.6)
|
%
|
|
(1.6)
|
%
|
Combined
U.S.
|
(1.9)
|
%
|
|
(5.4)
|
%
|
|
(2.3)
|
%
|
|
(4.2)
|
%
|
International
|
|
|
|
|
|
|
|
Outback
Steakhouse - Brazil
|
(1.5)
|
%
|
|
1.4
|
%
|
|
(0.1)
|
%
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
Average check per
person increases (decreases) (4):
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
|
|
|
|
Outback
Steakhouse
|
0.5
|
%
|
|
5.8
|
%
|
|
1.9
|
%
|
|
3.5
|
%
|
Carrabba's
Italian Grill
|
1.4
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
|
(0.4)
|
%
|
Bonefish
Grill
|
1.4
|
%
|
|
3.7
|
%
|
|
1.1
|
%
|
|
3.2
|
%
|
Fleming's
Prime Steakhouse & Wine Bar
|
5.5
|
%
|
|
1.0
|
%
|
|
4.8
|
%
|
|
1.3
|
%
|
Combined
U.S.
|
0.9
|
%
|
|
4.7
|
%
|
|
1.8
|
%
|
|
2.7
|
%
|
International
|
|
|
|
|
|
|
|
Outback
Steakhouse - Brazil
|
6.2
|
%
|
|
6.0
|
%
|
|
6.8
|
%
|
|
6.6
|
%
|
____________________
|
(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)
Combined U.S. comparable restaurant sales for the thirteen weeks
ended September 24, 2017 includes an estimated (1.0%)
impact related to hurricanes that occurred during the
quarter.
|
(3)
Includes trading day impact from calendar period
reporting.
|
(4)
Average check per person increases (decreases) include the impact
of menu pricing changes, product mix and discounts.
|
Mark Graff
Vice President, IR & Finance
(813) 830-5311
View original
content:http://www.prnewswire.com/news-releases/bloomin-brands-announces-2017-q3-diluted-eps-of-005-and-adjusted-diluted-eps-of-012-posts-comparable-restaurant-sales-of-06-at-outback-with-positive-traffic-updates-fiscal-2017-financial-outlook-300548774.html
SOURCE Bloomin' Brands, Inc.