Reports Strengthening Sales Trends and Cash
Flow
Announces 2020 Q2 Financial Results
Bloomin’ Brands, Inc. (Nasdaq: BLMN) today announced a business
update related to COVID-19 as well as second quarter 2020 financial
results.
Statement from David Deno, Chief
Executive Officer
Our priorities remain unchanged as we continue to address these
challenging times. We are focused on taking care of our people and
serving food in a safe environment that protects both our Team
Members and customers.
The investments made over the past several years to enhance the
customer experience and rapidly pursue the emerging delivery
opportunity have been critical to our success in navigating this
pandemic. At the onset of this pandemic in March, we were able to
quickly pivot to an off-premises only business model as dining
rooms were forced to close. The rapid growth we experienced in
off-premises sales allowed us to keep substantially all of our
locations open during this time.
Starting in May, states began the process of partially
re-opening their economies. Our decision to not furlough any
employees during this pandemic has allowed us to quickly prepare
our restaurants to re-open dining rooms in a safe and efficient
manner. As of July 19, 2020, 928 company-operated restaurants
(approximately 92% of U.S. restaurants) have reopened with limited
in-restaurant dining capacity. At Outback Steakhouse, we had 527
restaurants open for dine-in service at limited capacity during the
full week ended July 19, 2020. Comparable restaurant sales at these
locations were down 10.7% from the prior year. Across our U.S.
portfolio, we experienced consistent weekly sales momentum
throughout the second quarter as we adapted to this evolving
environment. This improved sales recovery, coupled with disciplined
cost management, enabled us to generate positive cash flow for the
month of June.
Recently, there has been a significant increase in reported
COVID cases in certain states, including Florida and Texas, where
we have a total of 286 company-owned locations. This has resulted
in some local governments responding by taking additional measures,
including implementing a further reduction of in-restaurant
capacity in certain locations. Although this is a developing
situation, to this point these capacity reductions have had a
minimal impact on our overall sales trends. We continue to monitor
and adhere to local restrictions and are maintaining elevated
safety measures, including additional sanitation and disinfecting
practices, use of gloves and facial protection for our employees,
as well as contactless payment options for our consumers.
Despite these recent developments and the challenging
environment that remains, we are looking forward to emerging as a
better, stronger, operations-focused company. I am more convinced
than ever of the important role that full-service restaurants will
continue to play in the lives of our customers and our
communities.
Recent Sales Results
The following table includes U.S. company-owned comparable
restaurant sales metrics for both restaurants open for
in-restaurant dining and restaurants with off-premises only dining
for the full weekly periods ended as indicated:
RESTAURANTS WITH
RESTAURANTS WITH
OPEN IN-RESTAURANT
DINING
OFF-PREMISES DINING
ONLY
WEEK ENDED
WEEK ENDED
Comparable restaurant sales (stores
open 18 months or more):
JUNE 21, 2020 (1)
JUNE 28, 2020
JULY 5, 2020
JULY 12, 2020
JULY 19, 2020
JUNE 21, 2020 (1)
JUNE 28, 2020
JULY 5, 2020
JULY 12, 2020
JULY 19, 2020
Outback Steakhouse
Average sales volumes
$70,007
$57,048
$54,741
$59,309
$60,095
$42,140
$39,361
$33,604
$39,316
$43,462
Comparable restaurant sales
6.8%
(11.6)%
(13.6)%
(9.7)%
(10.7)%
(36.4)%
(41.9)%
(48.6)%
(42.2)%
(38.6)%
Number of Restaurants
464
491
530
525
527
99
72
33
38
36
Carrabba’s Italian Grill
Average sales volumes
$53,049
$45,579
$39,975
$44,355
$44,704
$37,431
$33,073
$25,759
$30,315
$31,347
Comparable restaurant sales
(0.7)%
(16.5)%
(17.3)%
(15.0)%
(16.5)%
(32.4)%
(38.5)%
(40.2)%
(33.5)%
(33.0)%
Number of Restaurants
180
183
193
191
191
19
16
6
8
8
Bonefish Grill
Average sales volumes
$48,132
$39,866
$35,442
$38,553
$39,358
$32,106
$34,354
$29,823
$28,101
$30,346
Comparable restaurant sales
(14.6)%
(31.8)%
(29.4)%
(28.9)%
(32.4)%
(49.4)%
(47.0)%
(48.0)%
(51.2)%
(51.9)%
Number of Restaurants
155
156
167
162
162
26
25
14
19
19
Fleming’s Prime Steakhouse & Wine
Bar
Average sales volumes
$80,957
$57,131
$42,193
$45,546
$46,944
$44,888
$32,101
$43,838
$43,377
$49,769
Comparable restaurant sales
14.9%
(26.3)%
(9.6)%
(24.2)%
(27.4)%
(50.0)%
(68.3)%
(44.6)%
(55.3)%
(51.0)%
Number of Restaurants
56
58
52
48
48
9
7
13
17
17
Combined U.S.
Average sales volumes
$63,189
$51,671
$47,602
$51,880
$52,627
$40,012
$37,056
$34,104
$36,681
$40,476
Comparable restaurant sales
2.5%
(17.0)%
(16.5)%
(14.4)%
(16.1)%
(39.2)%
(44.9)%
(47.0)%
(47.2)%
(44.6)%
Number of Restaurants
855
888
942
926
928
153
120
66
82
80
_________________
(1) The week ended June 21, 2020 includes
the benefit of Father’s Day.
The following table includes estimated comparable restaurant
sales by concept for our U.S. company-owned restaurants for the
periods indicated:
WEEK ENDED
Comparable restaurant sales (stores
open 18 months or more):
JUNE 21, 2020 (1)
JUNE 28, 2020
JULY 5, 2020
JULY 12, 2020
JULY 19, 2020
Outback Steakhouse
(0.8)
%
(15.7)
%
(15.7)
%
(12.0)
%
(12.6)
%
Carrabba’s Italian Grill
(3.9)
%
(18.3)
%
(17.9)
%
(15.7)
%
(17.1)
%
Bonefish Grill
(20.1)
%
(34.1)
%
(31.0)
%
(31.4)
%
(34.6)
%
Fleming’s Prime Steakhouse & Wine
Bar
3.8
%
(32.0)
%
(20.0)
%
(35.5)
%
(35.8)
%
Combined U.S.
(4.2)
%
(20.6)
%
(18.8)
%
(17.4)
%
(18.7)
%
_________________
(1) The week ended June 21, 2020 includes
the benefit of Father’s Day.
Cash Utilization and Liquidity
Update
As of yesterday, our total liquidity position was $502 million,
which includes approximately $138 million of domestic cash and $364
million of capacity on our revolving credit facility. Our liquidity
position over the last several weeks has improved due to increased
sales performance and working capital inflows.
Second Quarter Diluted EPS and Adjusted
Diluted EPS
The following table reconciles Diluted (loss) earnings per share
attributable to common stockholders to Adjusted diluted (loss)
earnings per share for the second quarter 2020 (“Q2 2020”) compared
to the second quarter 2019 (“Q2 2019”).
Q2
2020
2019
CHANGE
Diluted (loss) earnings per share
attributable to common stockholders
$
(1.05)
$
0.32
$
(1.37)
Adjustments
0.31
0.04
0.27
Adjusted diluted (loss) earnings per
share
$
(0.74)
$
0.36
$
(1.10)
______________
See Non-GAAP Measures later in this
release.
Our second quarter results on a GAAP and adjusted basis included
$11 million of relief pay (net of credits) provided to hourly
employees impacted by the closure of our dining rooms.
Second Quarter Financial
Results
(dollars in millions)
Q2 2020
Q2 2019
CHANGE
Total revenues
$
578.5
$
1,021.9
(43.4)%
GAAP restaurant-level operating margin
2.1
%
15.0
%
(12.9)%
Adjusted restaurant-level operating margin
(1)
2.7
%
15.0
%
(12.3)%
GAAP operating (loss) income margin
(19.3)
%
4.3
%
(23.6)%
Adjusted operating (loss) income margin
(1)
(13.7)
%
4.6
%
(18.3)%
___________________
(1) See Non-GAAP Measures later in this
release.
- The decrease in total revenues was primarily due to: (i)
significantly lower comparable restaurant sales principally
attributable to the COVID-19 pandemic, (ii) the net impact of
restaurant closures and openings, (iii) lower franchise revenue and
(iv) the effect of foreign currency translation of the Brazil Real
relative to the U.S. dollar.
- GAAP and Adjusted restaurant-level operating margin decreased
due to: (i) significantly lower comparable restaurant sales and
costs incurred in connection with the COVID-19 pandemic, including
incremental delivery related costs and relief pay net of tax
credits and (ii) higher labor costs and commodity inflation. These
decreases are partially offset by: (i) reduced operating,
advertising and utilities expense and (ii) cost savings from waste
reduction initiatives.
- GAAP operating income margin decreased due to: (i) a decline in
restaurant-level operating margin discussed above, (ii) sales
deleveraging in connection with the COVID-19 pandemic across
depreciation and amortization and general and administrative
expense and (iii) asset impairment charges related to the COVID-19
pandemic. These decreases are partially offset by cost savings from
our restructuring and transformation initiatives. Item (iii) from
above was excluded from our adjusted operating income margin.
Second Quarter Comparable Restaurant
Sales
THIRTEEN WEEKS ENDED JUNE 28,
2020
COMPANY-OWNED
Comparable restaurant sales (stores
open 18 months or more):
U.S.
Outback Steakhouse
(32.9)%
Carrabba’s Italian Grill
(36.7)%
Bonefish Grill
(56.8)%
Fleming’s Prime Steakhouse & Wine
Bar
(56.3)%
Combined U.S.
(39.4)%
International
Outback Steakhouse - Brazil (1)
(63.9)%
______________
(1) Brazil comparable restaurant sales are
on a one-month lag and are presented on a calendar basis.
Represents results through May 31, 2020.
2020 Financial Outlook
As announced on March 20, 2020, the Company withdrew its 2020
financial guidance for the fiscal year ending December 27, 2020.
Due to the current global market and economic conditions as a
result of COVID-19, the Company will not provide guidance for the
remainder of the year.
Conference Call
The Company will host a conference call today, July 24, 2020 at
8:30 AM EDT. The conference call will 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 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 GAAP and include the
following: (i) Adjusted restaurant-level operating margin, (ii)
Adjusted (loss) income from operations and the corresponding
margin, (iii) Adjusted net (loss) income, (iv) Adjusted diluted
(loss) earnings per share, (v) Adjusted segment restaurant-level
operating margin and (vi) Adjusted segment (loss) 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 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
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.
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 more than 1,450 restaurants in 47 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 “Statement from David Deno, Chief Executive Officer”
and “Cash Utilization and Liquidity Update” 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: the
effects of the COVID-19 pandemic and uncertainties about its depth
and duration, as well as the impacts to economic conditions and
consumer behavior, including, among others: the inability of
workers, including delivery drivers, to work due to illness,
quarantine, or government mandates, temporary restaurant closures
and capacity restrictions due to reduced workforces or government
mandates, the unemployment rate, the extent, availability and
effectiveness of any COVID-19 stimulus packages or loan programs,
the ability of our franchisees to operate their restaurants during
the pandemic and pay royalties, and trends in consumer behavior and
spending during and after the end of the pandemic; 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; the
effects of changes in tax laws; challenges associated with our
remodeling, relocation and expansion 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 cost and availability of credit;
interest rate changes; and compliance with debt covenants and the
Company’s ability to make debt payments and planned investments.
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
TWENTY-SIX WEEKS ENDED
(in thousands, except per share
data)
JUNE 28, 2020
JUNE 30, 2019
JUNE 28, 2020
JUNE 30, 2019
Revenues
Restaurant sales
$
576,261
$
1,005,687
$
1,572,498
$
2,117,329
Franchise and other revenues
2,198
16,243
14,298
32,732
Total revenues
578,459
1,021,930
1,586,796
2,150,061
Costs and expenses
Cost of sales
180,758
312,679
500,451
664,790
Labor and other related
205,537
301,213
514,806
620,228
Other restaurant operating
177,846
240,895
424,401
491,749
Depreciation and amortization
45,784
49,788
94,052
99,270
General and administrative
55,487
71,955
140,289
142,544
Provision for impaired assets and
restaurant closings
24,959
1,940
66,277
5,526
Total costs and expenses
690,371
978,470
1,740,276
2,024,107
(Loss) income from operations
(111,912)
43,460
(153,480)
125,954
Loss on modification of debt
(237)
—
(237)
—
Other income (expense), net
581
12
(212)
(156)
Interest expense, net
(16,639)
(12,448)
(28,347)
(23,629)
(Loss) income before (benefit) provision
for income taxes
(128,207)
31,024
(182,276)
102,169
(Benefit) provision for income taxes
(35,779)
1,215
(55,434)
6,711
Net (loss) income
(92,428)
29,809
(126,842)
95,458
Less: net (loss) income attributable to
noncontrolling interests
(172)
788
25
2,137
Net (loss) income attributable to Bloomin’
Brands
(92,256)
$
29,021
(126,867)
93,321
Redemption of preferred stock in excess of
carrying value
—
—
(3,496)
—
Net (loss) income attributable to common
stockholders
$
(92,256)
$
29,021
$
(130,363)
$
93,321
(Loss) earnings per share attributable to
common stockholders:
Basic
$
(1.05)
$
0.32
$
(1.49)
$
1.03
Diluted
$
(1.05)
$
0.32
$
(1.49)
$
1.02
Weighted average common shares
outstanding:
Basic
87,496
90,194
87,312
90,805
Diluted
87,496
90,953
87,312
91,807
TABLE TWO
BLOOMIN’ BRANDS, INC.
SEGMENT RESULTS
(UNAUDITED)
(dollars in thousands)
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
U.S. Segment
JUNE 28, 2020
JUNE 30, 2019
JUNE 28, 2020
JUNE 30, 2019
Revenues
Restaurant sales
$
536,767
$
900,616
$
1,421,656
$
1,901,429
Franchise and other revenues
313
13,603
9,921
27,297
Total revenues
$
537,080
$
914,219
$
1,431,577
$
1,928,726
Restaurant-level operating margin
3.2
%
14.5
%
8.4
%
15.6
%
(Loss) income from operations
$
(62,921)
$
78,814
$
(51,542)
$
191,849
Operating (loss) income margin
(11.7)
%
8.6
%
(3.6)
%
9.9
%
International Segment
Revenues
Restaurant sales
$
39,494
$
105,071
$
150,842
$
215,900
Franchise and other revenues
1,885
2,640
4,377
5,435
Total revenues
$
41,379
$
107,711
$
155,219
$
221,335
Restaurant-level operating margin
(21.8)
%
18.4
%
8.0
%
20.4
%
(Loss) income from operations
$
(17,070)
$
6,909
$
(10,283)
$
20,629
Operating (loss) income margin
(41.3)
%
6.4
%
(6.6)
%
9.3
%
Reconciliation of Segment (Loss) Income
from Operations to Consolidated (Loss) Income from
Operations
Segment (loss) income from operations
U.S.
$
(62,921)
$
78,814
$
(51,542)
$
191,849
International
(17,070)
6,909
(10,283)
20,629
Total segment (loss) income from
operations
(79,991)
85,723
(61,825)
212,478
Unallocated corporate operating
expense
(31,921)
(42,263)
(91,655)
(86,524)
Total (loss) income from operations
$
(111,912)
$
43,460
$
(153,480)
$
125,954
TABLE THREE
BLOOMIN’ BRANDS, INC.
SUPPLEMENTAL BALANCE SHEET
INFORMATION
(UNAUDITED)
(in thousands)
JUNE 28, 2020
DECEMBER 29, 2019
Cash and cash equivalents (1)
$
181,432
$
67,145
Net working capital (deficit) (2)
$
(483,255)
$
(621,553)
Total assets
$
3,433,575
$
3,592,683
Total debt, net (1)
$
1,210,792
$
1,048,704
Total stockholders’ equity
$
29,198
$
177,481
Common stock outstanding
87,534
86,946
_________________
(1)
During the twenty-six weeks ended June 28,
2020, we issued $230.0 million of senior convertible notes.
(2)
We have, and in the future may continue to
have, negative working capital balances (as is common for many
restaurant companies). We operate successfully with negative
working capital because cash collected on Restaurant sales is
typically received before payment is due on our current
liabilities, and our inventory turnover rates require relatively
low investment in inventories. Additionally, ongoing cash flows
from restaurant operations and gift card sales are typically 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 QUARTER TO DATE
JUNE 28, 2020
JUNE 30, 2019
Consolidated:
GAAP
ADJUSTED (1)
GAAP
ADJUSTED
Restaurant sales
100.0
%
100.0
%
100.0
%
100.0
%
Cost of sales
31.4
%
31.2
%
31.1
%
31.1
%
(0.1)
%
Labor and other related
35.7
%
35.7
%
30.0
%
30.0
%
(5.7)
%
Other restaurant operating
30.9
%
30.4
%
24.0
%
23.9
%
(6.5)
%
Restaurant-level operating margin (2)
2.1
%
2.7
%
15.0
%
15.0
%
(12.3)
%
Segments - Restaurant-level operating
margin:
U.S. (2)
3.2
%
3.9
%
14.5
%
14.5
%
(10.6)
%
International (2)
(21.8)
%
(21.4)
%
18.4
%
18.4
%
(39.8)
%
TWENTY-SIX WEEKS ENDED
(UNFAVORABLE) FAVORABLE CHANGE
IN ADJUSTED YEAR TO DATE
JUNE 28, 2020
JUNE 30, 2019
Consolidated:
GAAP
ADJUSTED (1)
GAAP
ADJUSTED
Restaurant sales
100.0
%
100.0
%
100.0
%
100.0
%
Cost of sales
31.8
%
31.4
%
31.4
%
31.4
%
—
%
Labor and other related
32.7
%
32.7
%
29.3
%
29.3
%
(3.4)
%
Other restaurant operating
27.0
%
27.0
%
23.2
%
23.2
%
(3.8)
%
Restaurant-level operating margin (2)
8.4
%
8.9
%
16.1
%
16.1
%
(7.2)
%
Segments - Restaurant-level operating
margin:
U.S. (2)
8.4
%
8.7
%
15.6
%
15.6
%
(6.9)
%
International (2)
8.0
%
9.3
%
20.4
%
20.4
%
(11.1)
%
_________________
(1)
The table set forth below titled “ Restaurant-level Operating
Margin Adjustments” provides additional information regarding the
adjustments for each period presented.
(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:
(a)
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.
(b)
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.
(c)
General and administrative expense which
includes primarily non-restaurant-level costs associated with
support of the restaurants and other activities at our corporate
offices.
(d)
Asset impairment charges and restaurant
closing costs which are not reflective of ongoing restaurant
performance in a period.
Restaurant-level Operating Margin Adjustments - Following is a
summary of unfavorable (favorable) adjusted restaurant-level
operating margin adjustments recorded in Other restaurant operating
expense (unless otherwise noted below) for the following
activities, as described in table five of this release:
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
(dollars in millions)
JUNE 28, 2020
JUNE 28, 2020
Restaurant and asset impairments and
closing costs
$
—
$
2.8
Restaurant relocations and related
costs
—
(0.1)
COVID-19 related costs (1)
(3.7)
(9.9)
$
(3.7)
$
(7.2)
_________________
(1)
Includes $1.2 million and $7.3 million of
adjustments for the thirteen and twenty-six weeks ended June 28,
2020, respectively, recorded in Cost of sales, including $0.2
million and $2.0 million of adjustments, respectively, recorded in
the international segment. All other adjustments were recorded
within the U.S. segment.
TABLE FIVE
BLOOMIN’ BRANDS, INC.
(LOSS) INCOME FROM OPERATIONS,
NET (LOSS) INCOME AND DILUTED (LOSS) EARNINGS PER SHARE NON-GAAP
RECONCILIATIONS
(UNAUDITED)
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
(in thousands, except per share
data)
JUNE 28, 2020
JUNE 30, 2019
JUNE 28, 2020
JUNE 30, 2019
(Loss) income from operations
$
(111,912)
$
43,460
$
(153,480)
$
125,954
Operating (loss) income margin
(19.3)
%
4.3
%
(9.7)
%
5.9
%
Adjustments:
COVID-19 related costs (1)
30,342
—
79,218
—
Severance and other transformational costs
(2)
2,415
748
24,647
3,603
Restaurant relocations and related costs
(3)
—
952
592
1,984
Legal and other matters
—
—
178
—
Restaurant and asset impairments and
closing costs (4)
—
2,039
(2,797)
4,170
Total income from operations
adjustments
$
32,757
$
3,739
$
101,838
$
9,757
Adjusted (loss) income from operations
$
(79,155)
$
47,199
$
(51,642)
$
135,711
Adjusted operating (loss) income
margin
(13.7)
%
4.6
%
(3.3)
%
6.3
%
Net (loss) income attributable to common
stockholders
$
(92,256)
$
29,021
$
(130,363)
$
93,321
Adjustments:
(Loss) income from operations
adjustments
32,757
3,739
101,838
9,757
Amortization of debt discount (5)
1,379
—
1,379
—
Total adjustments, before income taxes
34,136
3,739
103,217
9,757
Adjustment to provision for income taxes
(6)
(6,474)
(413)
(28,469)
(1,232)
Redemption of preferred stock in excess of
carrying value (7)
—
—
3,496
—
Net adjustments
27,662
3,326
78,244
8,525
Adjusted net (loss) income
$
(64,594)
$
32,347
$
(52,119)
$
101,846
Diluted (loss) earnings per share
attributable to common stockholders (8)
$
(1.05)
$
0.32
$
(1.49)
$
1.02
Adjusted diluted (loss) earnings per share
(8)
$
(0.74)
$
0.36
$
(0.60)
$
1.11
Diluted weighted average common shares
outstanding (8)
87,496
90,953
87,312
91,807
_________________
(1)
Represents costs incurred in connection
with the economic impact of the COVID-19 pandemic, primarily
consisting of fixed asset and right-of-use asset impairments,
restructuring charges, inventory obsolescence and spoilage,
contingent lease liabilities and current expected credit
losses.
(2)
Relates to severance and other costs
incurred as a result of transformational and restructuring
activities.
(3)
Represents asset impairment charges and
accelerated depreciation incurred in connection with our relocation
program.
(4)
Includes a lease termination gain of $2.8
million during the twenty-six weeks ended June 28, 2020 and asset
impairment charges and related costs primarily related to approved
closure and restructuring initiatives in 2019.
(5)
Represents the amortization of the debt
discount related to the issuance of senior convertible notes.
(6)
Represents income tax effect of the
adjustments for the periods presented.
(7)
Represents consideration paid in excess of
the carrying value for the redemption of preferred stock of our
Abbraccio subsidiary.
(8)
Due to the net loss, the effect of
dilutive securities was excluded from the calculation of diluted
(loss) earnings per share for the thirteen and twenty-six weeks
ended June 28, 2020.
Following is a summary of the financial statement line item
classification of the net (loss) income adjustments:
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
(dollars in thousands)
JUNE 28, 2020
JUNE 30, 2019
JUNE 28, 2020
JUNE 30, 2019
Cost of sales
$
1,163
$
—
$
7,345
$
—
Other restaurant operating
2,467
65
(176)
43
Depreciation and amortization
—
607
407
1,172
General and administrative
3,632
1,075
27,856
4,330
Provision for impaired assets and
restaurant closings
25,495
1,992
66,406
4,212
Interest expense, net
1,379
—
1,379
—
Provision for income taxes
(6,474)
(413)
(28,469)
(1,232)
Redemption of preferred stock in excess of
carrying value
—
—
3,496
—
Net adjustments
$
27,662
$
3,326
$
78,244
$
8,525
TABLE SIX
BLOOMIN’ BRANDS, INC.
SEGMENT INCOME FROM OPERATIONS
NON-GAAP RECONCILIATION
(UNAUDITED)
(dollars in thousands)
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
U.S. Segment
JUNE 28, 2020
JUNE 30, 2019
JUNE 28, 2020
JUNE 30, 2019
(Loss) income from operations
$
(62,921)
$
78,814
$
(51,542)
$
191,849
Operating (loss) income margin
(11.7)
%
8.6
%
(3.6)
%
9.9
%
Adjustments:
COVID-19 related costs (1)
29,805
—
72,784
—
Restaurant relocations and related costs
(2)
—
952
592
1,984
Severance (3)
—
—
—
700
Restaurant and asset impairments and
closing costs (4)
—
246
(2,797)
2,081
Adjusted (loss) income from operations
$
(33,116)
$
80,012
$
19,037
$
196,614
Adjusted operating (loss) income
margin
(6.2)
%
8.8
%
1.3
%
10.2
%
International Segment
(Loss) income from operations
$
(17,070)
$
6,909
$
(10,283)
$
20,629
Operating (loss) income margin
(41.3)
%
6.4
%
(6.6)
%
9.3
%
Adjustments:
COVID-19 related costs (1)
459
—
5,651
—
Restaurant and asset impairments and
closing costs (4)
—
1,793
—
2,089
Adjusted (loss) income from operations
$
(16,611)
$
8,702
$
(4,632)
$
22,718
Adjusted operating (loss) income
margin
(40.1)
%
8.1
%
(3.0)
%
10.3
%
_________________
(1)
Represents costs incurred in connection
with the economic impact of the COVID-19 pandemic, primarily
consisting of fixed asset and right-of-use asset impairments,
restructuring charges, inventory obsolescence and spoilage,
contingent lease liabilities and current expected credit
losses.
(2)
Represents asset impairment charges and
accelerated depreciation incurred in connection with our relocation
program.
(3)
Relates to severance costs incurred as a
result of restructuring activities.
(4)
Includes a lease termination gain of $2.8
million during the twenty-six weeks ended June 28, 2020 and asset
impairment charges and related costs primarily related to approved
closure and restructuring initiatives in 2019.
TABLE SEVEN
BLOOMIN’ BRANDS, INC.
COMPARATIVE RESTAURANT
INFORMATION
(UNAUDITED)
Number of restaurants (at end of the
period):
MARCH 29, 2020
OPENINGS
CLOSURES
JUNE 28, 2020
U.S.:
Outback Steakhouse
Outback Steakhouse—Company-owned
575
1
(9)
567
Franchised
145
—
(4)
141
Total
720
1
(13)
708
Carrabba’s Italian Grill
Company-owned
204
—
(5)
199
Franchised
21
—
—
21
Total
225
—
(5)
220
Bonefish Grill
Company-owned
190
—
(8)
182
Franchised
7
—
—
7
Total
197
—
(8)
189
Fleming’s Prime Steakhouse and Wine
Bar
Company-owned
67
—
(2)
65
Other
Company-owned
4
1
—
5
U.S. total
1,213
2
(28)
1,187
International:
Company-owned
Outback Steakhouse - Brazil (1)
103
—
—
103
Other (2)
29
2
(1)
30
Franchised
Outback Steakhouse - South Korea (2)
72
14
(1)
85
Other (3)
55
—
—
55
International total
259
16
(2)
273
System-wide total
1,472
18
(30)
1,460
____________________
(1)
The restaurant counts for Brazil are
reported as of February 29, 2020 and May 31, 2020 to correspond
with the balance sheet dates of this subsidiary.
(2)
As of June 30, 2019, the Company had 11
international “dark kitchen” locations that offer delivery and
carry-out only. One of these locations was included within
Company-owned Other and the remaining 10 were included in
Franchised Outback Steakhouse - South Korea.
(3)
Includes two and one fast-casual Aussie
Grill locations as of June 28, 2020 and June 30, 2019,
respectively.
TABLE EIGHT
BLOOMIN’ BRANDS, INC.
COMPARABLE RESTAURANT SALES
INFORMATION
(UNAUDITED)
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
JUNE 28, 2020
JUNE 30, 2019
JUNE 28, 2020
JUNE 30, 2019
Year over year percentage change:
Comparable restaurant sales (stores open
18 months or more):
U.S. (1)
Outback Steakhouse
(32.9)
%
1.3
%
(20.6)
%
2.4
%
Carrabba’s Italian Grill
(36.7)
%
(1.6)
%
(22.2)
%
(0.6)
%
Bonefish Grill
(56.8)
%
0.1
%
(34.7)
%
1.0
%
Fleming’s Prime Steakhouse & Wine
Bar
(56.3)
%
1.6
%
(33.6)
%
1.1
%
Combined U.S.
(39.4)
%
0.6
%
(24.2)
%
1.6
%
International
Outback Steakhouse - Brazil (2)
(63.9)
%
3.5
%
(27.4)
%
3.6
%
Traffic:
U.S.
Outback Steakhouse
(31.0)
%
(1.6)
%
(20.2)
%
(1.0)
%
Carrabba’s Italian Grill
(28.1)
%
(1.4)
%
(16.7)
%
(1.4)
%
Bonefish Grill (3)
(29.8)
%
(1.5)
%
(20.6)
%
(1.7)
%
Fleming’s Prime Steakhouse & Wine
Bar
(43.5)
%
3.6
%
(28.0)
%
0.8
%
Combined U.S. (3)
(30.6)
%
(1.4)
%
(19.8)
%
(1.2)
%
International
Outback Steakhouse - Brazil
(48.5)
%
1.2
%
(19.0)
%
(0.7)
%
Average check per person (4):
U.S.
Outback Steakhouse
(1.9)
%
2.9
%
(0.4)
%
3.4
%
Carrabba’s Italian Grill
(8.6)
%
(0.2)
%
(5.5)
%
0.8
%
Bonefish Grill
(27.0)
%
1.6
%
(14.1)
%
2.7
%
Fleming’s Prime Steakhouse & Wine
Bar
(12.8)
%
(2.0)
%
(5.6)
%
0.3
%
Combined U.S.
(8.8)
%
2.0
%
(4.4)
%
2.8
%
International
Outback Steakhouse - Brazil
(15.2)
%
2.1
%
(8.4)
%
4.4
%
____________________
(1)
Relocated restaurants closed more than 60
days are excluded from comparable restaurant sales until at least
18 months after reopening.
(2)
Excludes the effect of fluctuations in
foreign currency rates. Includes trading day impact from calendar
period reporting.
(3)
In Q2 2020, Bonefish Grill replaced guest
count with entrée count to measure restaurant traffic. Bonefish
Grill and Combined U.S. traffic for the twenty-six weeks ended June
28, 2020 were calculated using the entrée count methodology for
Bonefish Grill as if the new methodology was in effect at the start
of the fiscal year, which would have increased traffic for Bonefish
Grill and Combined U.S. for the thirteen weekend ended March 29,
2020 by 3.1% and 0.5%, respectively.
(4)
Average check per person includes the
impact of menu pricing changes, product mix and discounts.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200724005054/en/
Mark Graff Group Vice President, IR & Finance (813)
830-5311
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