DALLAS, Jan. 29, 2020 /PRNewswire/ -- Brinker
International, Inc. (NYSE: EAT) today announced results for the
second quarter of fiscal 2020 ended December 25, 2019.
Highlights include the following:
- Earnings per diluted share, on a GAAP basis, in the second
quarter of fiscal 2020 decreased 12.0% to $0.73 compared to $0.83 in the second quarter of fiscal 2019
primarily due to changes in special items, partially offset by
improved operating performance
- Earnings per diluted share, excluding special items, in the
second quarter of fiscal 2020 increased 13.5% to $1.01 compared to $0.89 in the second quarter of fiscal 2019
primarily due to improved operating performance (see non-GAAP
reconciliation below)
- Operating income, as a percentage of Total revenues, was 5.0%
in the second quarter of fiscal 2020 compared to 6.3% in the second
quarter of fiscal 2019 primarily due to changes in special items,
partially offset by improved operating performance
- Restaurant operating margin, as a percentage of Company sales,
was 12.7% in the second quarter of fiscal 2020 compared to 12.4% in
the second quarter of fiscal 2019 (see non-GAAP reconciliation
below)
- Brinker International's Company sales in the second quarter of
fiscal 2020 increased 11.3% to $847.5
million compared to the second quarter of fiscal 2019
primarily due to increased capacity from the 116 Chili's
restaurants acquired in the first quarter of fiscal 2020 and
increased comparable restaurant sales. Total revenues in the second
quarter of fiscal 2020 increased 9.9% to $869.3 million compared to the second quarter of
fiscal 2019
- Chili's company-owned comparable restaurant sales increased
2.0% in the second quarter of fiscal 2020 compared to the second
quarter of fiscal 2019
- Maggiano's company-owned comparable restaurant sales decreased
1.4% in the second quarter of fiscal 2020 compared to the second
quarter of fiscal 2019
- Chili's international franchise comparable restaurant sales
decreased 0.9% in the second quarter of fiscal 2020 compared to the
second quarter of fiscal 2019
- Cash flows provided by operating activities in the twenty-six
week period ended December 25, 2019
were $142.3 million and capital
expenditures totaled $51.4 million
resulting in free cash flow of $90.9
million (see non-GAAP reconciliation below)
- The Company's Board of Directors approved a quarterly dividend
of $0.38 per share on the common
stock of the Company. The dividend will be payable March 26, 2020 to shareholders of record as of
March 6, 2020
"Our second quarter of fiscal 2020 combined positive top line
growth and effective P&L management, which resulted in double
digit adjusted EPS growth," said Wyman
Roberts, CEO and President. "Our strategic focus on core
execution, value and convenience allows us to build positive
results on top of previous positive results."
QUARTERLY OPERATING PERFORMANCE
Company Sales and Company Restaurant Expenses
Chili's Company sales in the second quarter of fiscal 2020
increased 13.7% to $728.4 million
from $640.6 million in the second
quarter of fiscal 2019 primarily due to revenues generated from the
116 Chili's restaurants acquired in the first quarter of fiscal
2020, and a 2.0% increase in comparable restaurant sales.
As compared to the second quarter of fiscal 2019, Chili's
restaurant operating margin(1) increased. Restaurant
expenses, as a percentage of Company sales, decreased compared to
the second quarter of fiscal 2019 primarily due to sales leverage,
partially offset by expenses related to growth in off-premise. Cost
of sales, as a percentage of Company sales, decreased compared to
the second quarter of fiscal 2019 primarily due to increased menu
pricing, partially offset by unfavorable commodity pricing and menu
item mix. Restaurant labor, as a percentage of Company sales,
increased compared to the second quarter of fiscal 2019 due to
higher hourly labor wage rates, partially offset by sales
leverage.
Maggiano's Company sales in the second quarter of fiscal 2020
decreased to $119.1 million from
$120.9 million in the second quarter
of fiscal 2019 primarily due to a 1.4% decrease in comparable
restaurant sales that included 0.5% of negative weather impact. As
compared to the second quarter of fiscal 2019, Maggiano's
restaurant operating margin(1) decreased. Restaurant
labor, as a percentage of Company sales, increased primarily due to
higher hourly labor wage rates. Restaurant expenses and Cost of
sales, as a percentage of Company sales, were both flat compared to
the second quarter of fiscal 2019.
(1)
|
Restaurant operating
margin is defined as Company sales less Cost of sales, Restaurant
labor and Restaurant expenses and excludes Depreciation and
amortization expenses (see non-GAAP reconciliation
below).
|
Franchise and Other Revenues
Franchise and other revenues in the second quarter of fiscal
2020 decreased 25.3% to $21.8 million
from $29.2 million in the second
quarter of fiscal 2019 primarily due to a decrease in royalties and
franchise marketing contributions related to the 116 Chili's
restaurants acquired from a franchisee during the first quarter of
fiscal 2020. In the second quarter of fiscal 2020, Brinker
franchisees generated approximately $247.4
million in sales.(2)
(2)
|
Royalty revenues are
recognized based on the sales generated and reported to the Company
by franchisees.
|
Income Taxes
On a GAAP basis, the effective income tax rate in the second
quarter of fiscal 2020 decreased to 3.8% compared to 8.6% in the
second quarter of fiscal 2019. The decrease was primarily driven by
the impact of additional expense related to special items during
the second quarter of fiscal 2020. Excluding the impact of special
items (see non-GAAP reconciliation below for details), the
effective income rate increased to 10.5% in the second quarter of
fiscal 2020 compared to 10.2% in the second quarter of fiscal
2019.
Fiscal 2020 Outlook and Guidance Policy
Brinker now increases our financial outlook with the following
guidance changes based on year-to-date performance and estimates
for the remainder of fiscal 2020:
- Earnings per diluted share, excluding special items, is
estimated to be in the range of $4.25
to $4.45
- Restaurant operating margin is expected to be flat to fiscal
2019
- Free cash flow is expected to be $175.0
million to $190.0 million
We reaffirm the other aspects of our full-year fiscal 2020
financial guidance as previously communicated in our August 13, 2019 earnings release and provided
below for reference.
- Revenues are expected to be up approximately 9.0% to 10.0%
primarily due to the acquisition of the 116 Chili's
restaurants
- Comparable restaurant sales at company-owned restaurants are
expected to be up 1.75% to 2.50%
- Capital expenditures are expected to be $140.0 million to $150.0
million
- General and administrative expense is expected to remain
flat
- Effective income tax rate, excluding the impact of special
items, is expected to be approximately 10.5% to 11.5%
We are unable to reliably forecast special items such as
restaurant impairments, restaurant closures, reorganization charges
and legal settlements without unreasonable effort. As such, we do
not present a reconciliation of forecasted non-GAAP measures to the
corresponding GAAP measures. If special items are reported during
fiscal 2020, reconciliations to the appropriate GAAP measures will
be provided.
COMPARABLE RESTAURANT SALES
The table below presents the percentage change in company-owned
and franchise comparable restaurant sales in the quarter
comparative periods as described below:
|
Comparable
Restaurant
Sales(1)
|
|
Price
Impact
|
|
Mix-Shift(2)
|
|
Traffic
|
|
Q2: 20 vs
19
|
|
Q2: 19 vs
18
|
|
Q2: 20 vs
19
|
|
Q2: 19 vs
18
|
|
Q2: 20 vs
19
|
|
Q2: 19 vs
18
|
|
Q2: 20 vs
19
|
|
Q2: 19 vs
18
|
Company-owned
|
1.5
|
%
|
|
2.7
|
%
|
|
1.4
|
%
|
|
1.0
|
%
|
|
0.3
|
%
|
|
(1.1)
|
%
|
|
(0.2)
|
%
|
|
2.8
|
%
|
Chili's
|
2.0
|
%
|
|
2.9
|
%
|
|
1.4
|
%
|
|
0.9
|
%
|
|
0.5
|
%
|
|
(0.9)
|
%
|
|
0.1
|
%
|
|
2.9
|
%
|
Maggiano's
|
(1.4)
|
%
|
|
1.8
|
%
|
|
1.4
|
%
|
|
1.2
|
%
|
|
0.0
|
%
|
|
(0.7)
|
%
|
|
(2.8)
|
%
|
|
1.3
|
%
|
Chili's
franchise(3)
|
(0.4)
|
%
|
|
(0.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
0.2
|
%
|
|
3.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
(0.9)
|
%
|
|
(6.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Chili's
domestic(4)
|
1.7
|
%
|
|
3.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide(5)
|
1.0
|
%
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Comparable Restaurant
Sales include all restaurants that have been in operation for more
than 18 months, except restaurants acquired by the Company from
franchisees are not included until they have been Company-owned for
more than 12 months. Amounts are calculated based on comparable
current period versus same period a year ago.
|
|
|
(2)
|
Mix-Shift is
calculated as the year-over-year percentage change in Company sales
resulting from the change in menu items ordered by
guests.
|
|
|
(3)
|
Chili's Franchise
sales generated by franchisees are not included in revenues in the
Consolidated Statements of Comprehensive Income; however, we
generate royalty revenues and advertising fees based on franchisee
revenues, where applicable. We believe including franchise
comparable restaurant sales provides investors information
regarding brand performance that is relevant to current
operations.
|
|
|
(4)
|
Chili's Domestic
Comparable Restaurant Sales percentages are derived from sales
generated by Company-owned and franchise-operated Chili's
restaurants in the United States.
|
|
|
(5)
|
System-wide
Comparable Restaurant Sales are derived from sales generated by
Company-owned Chili's and Maggiano's restaurants in addition to the
sales generated at franchise-operated Chili's
restaurants.
|
NON-GAAP MEASURES
Brinker management uses certain non-GAAP measures in analyzing
operating performance and believes that the presentation of these
measures in this release provides investors with information that
is beneficial to gaining an understanding of the Company's
financial results. Non-GAAP disclosures should not be viewed as a
substitute for financial results determined in accordance with
GAAP, nor are they necessarily comparable to non-GAAP performance
measures that may be presented by other companies. Reconciliations
of these non-GAAP measures are included in the tables below.
Reconciliation of Net Income and Net Income Per Share
Excluding Special Items
Brinker believes excluding special items from its financial
results provides investors with a clearer perspective of the
Company's ongoing operating performance and a more relevant
comparison to prior period results. The following reconciliation is
presented in millions, except per diluted share amounts.
|
Q2
20
|
|
EPS Q2
20
|
|
Q2
19
|
|
EPS Q2
19
|
Net income
|
$
|
27.9
|
|
|
$
|
0.73
|
|
|
$
|
32.0
|
|
|
$
|
0.83
|
|
Special
items(1)
|
13.8
|
|
|
0.36
|
|
|
3.2
|
|
|
0.08
|
|
Income tax effect
related to special items(2)
|
(3.3)
|
|
|
(0.08)
|
|
|
(0.8)
|
|
|
(0.02)
|
|
Special items, net of
taxes
|
10.5
|
|
|
0.28
|
|
|
2.4
|
|
|
0.06
|
|
Adjustment for
special tax items(3)
|
0.0
|
|
|
0.0
|
|
|
(0.1)
|
|
|
0.0
|
|
Net income excluding
special items
|
$
|
38.4
|
|
|
$
|
1.01
|
|
|
$
|
34.3
|
|
|
$
|
0.89
|
|
|
|
(1)
|
Special items in the
second quarter of fiscal 2020 consist of $12.3 million in Other
(gains) and charges and $1.5 million of incremental depreciation
expenses associated with a change in estimated useful life of
certain restaurant-level long-lived assets.
|
|
|
|
Special items in the
second quarter of fiscal 2019 consist of charges of $2.2 million in
Other (gains) and charges and $1.0 million of incremental
depreciation expense associated with a change in estimated useful
life of certain restaurant-level long-lived assets.
|
|
|
|
Footnote "(2)" to the
Consolidated Statements of Comprehensive Income contains additional
details on the composition of Other (gains) and charges for each
period presented.
|
|
|
(2)
|
Income tax effect
related to special items is based on the statutory tax rate in
effect at the end of each period presented.
|
|
|
(3)
|
Adjustment for
special tax items in the second quarter of fiscal 2020 was
negligible. Adjustment for special tax items in the second quarter
of fiscal 2019 are primarily related to the tax impact of excess
tax windfalls associated with stock-based compensation.
|
Reconciliation of Restaurant Operating Margin
Restaurant operating margin is not a measurement determined in
accordance with GAAP and should not be considered in isolation, or
as an alternative to operating income as an indicator of financial
performance. Restaurant operating margin is widely regarded in the
restaurant industry as a useful metric by which to evaluate
restaurant-level operating efficiency and performance of ongoing
restaurant-level operations. This non-GAAP measure is not
indicative of overall company performance and profitability because
this measure does not directly accrue benefit to the shareholders
due to the nature of costs excluded. We define Restaurant operating
margin as Company sales less Company restaurant expenses, including
Cost of sales, Restaurant labor and Restaurant expenses. We believe
this metric provides a more useful comparison between periods and
enables investors to focus on the performance of restaurant-level
operations by excluding revenues not related to food and beverage
sales at company-owned restaurants, corporate General and
administrative expenses, Depreciation and amortization, and Other
(gains) and charges.
Restaurant operating margin excludes Franchise and other
revenues which are earned primarily from franchise royalties,
advertising fees, and other non-food and beverage revenues streams
such as banquet service charges, digital entertainment revenues and
gift card breakage. Depreciation and amortization expenses,
substantially all of which are related to restaurant-level assets,
are excluded because such expenses represent historical costs which
do not reflect current cash outlays for the restaurants. General
and administrative expenses include primarily non-restaurant-level
costs associated with support of the restaurants and other
activities at our corporate offices and are therefore excluded. We
believe that excluding special items, included within Other (gains)
and charges, from Restaurant operating margin provides investors
with a clearer perspective of the Company's ongoing operating
performance and a more useful comparison to prior period results.
Restaurant operating margin as presented may not be comparable to
other similarly titled measures of other companies in our
industry.
The following reconciliation is presented in millions, except
percentages:
|
Q2
20
|
|
Q2
19
|
Operating income -
GAAP
|
$
|
43.5
|
|
|
$
|
49.6
|
|
Operating income as a
percentage of Total revenues
|
5.0
|
%
|
|
6.3
|
%
|
|
|
|
|
Operating income -
GAAP
|
$
|
43.5
|
|
|
$
|
49.6
|
|
Less: Franchise
and other revenues
|
(21.8)
|
|
|
(29.2)
|
|
Plus:
Depreciation and amortization
|
39.3
|
|
|
36.1
|
|
General and
administrative
|
34.6
|
|
|
35.4
|
|
Other (gains) and
charges
|
12.3
|
|
|
2.2
|
|
Restaurant operating
margin - non-GAAP
|
$
|
107.9
|
|
|
$
|
94.1
|
|
Restaurant operating
margin as a percentage of Company sales
|
12.7
|
%
|
|
12.4
|
%
|
Reconciliation of Free Cash Flow
Brinker believes presenting free cash flow provides a useful
measure to evaluate the cash flow available for reinvestment after
considering the capital requirements and expenditures of our
business operations (in millions).
|
Twenty-Six
Week
Period Ended
December 25,
2019
|
Cash flows provided
by operating activities - GAAP
|
$
|
142.3
|
|
Capital
expenditures
|
(51.4)
|
|
Free cash flow -
non-GAAP
|
$
|
90.9
|
|
WEBCAST INFORMATION
Investors and interested parties are invited to listen to
today's conference call, as management will provide further details
of the quarter. The call will broadcast live on Brinker's website
today, January 29, 2020 at 9 a.m.
CST:
http://investors.brinker.com/events/event-details/q2-2020-brinker-international-earnings-conference-call
For those who are unable to listen to the live broadcast, a
replay of the call will be available shortly thereafter and will
remain on Brinker's website until the end of the day February
12, 2020.
Additional financial information, including statements of income
which detail operations excluding special items, franchise and
other revenues, and comparable restaurant sales trends by brand, is
also available on Brinker's website under the Financial Information
section of the Investor tab.
FORWARD CALENDAR
- SEC Form 10-Q for the second quarter of fiscal 2020 filing on
or before February 3, 2020
- Earnings release call for the third quarter of fiscal 2020 on
April 29, 2020
ABOUT BRINKER
Brinker International, Inc. is one of the world's leading casual
dining restaurant companies. Based in Dallas, Texas, as of December 25, 2019,
Brinker owned, operated, or franchised 1,675 restaurants under the
names Chili's® Grill & Bar (1,622 restaurants) and
Maggiano's Little Italy® (53 restaurants).
FORWARD-LOOKING STATEMENTS
The statements and tables contained in this release that are not
historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements are
based on our current plans and expectations and involve risks and
uncertainties which could cause actual results to differ materially
from our historical results or from those projected in
forward-looking statements. The forward-looking statements in the
press release are based on information available to us as of the
date any such statements are made and we assume no obligation to
update these forward-looking statements except as required by law.
These risks and uncertainties are, in many instances, beyond our
control. Such risks and uncertainties include, among other things,
the impact of competition, changes in consumer preferences,
consumer perception of food safety, reduced disposable income,
unfavorable publicity, increased minimum wages, governmental
regulations, the impact of mergers, acquisitions, divestitures and
other strategic transactions, the Company's ability to meet its
business strategy plan, third party delivery risks, loss of key
management personnel, failure to hire and retain high-quality
restaurant management, the impact of social media, failure to
protect the security of data of our guests and team members,
product availability, regional business and economic conditions,
litigation, franchisee success, downgrades in our credit ratings,
inflation, changes in the retail industry, technology failures,
failure to protect our intellectual property, outsourcing,
impairment of goodwill or assets, failure to maintain effective
internal control over financial reporting, actions of activist
shareholders, adverse weather conditions, terrorist acts, health
epidemics or pandemics, and tax reform, as well as the risks
described under the caption "Risk Factors" in our Annual Report on
Form 10-K and future filings with the Securities and Exchange
Commission.
BRINKER
INTERNATIONAL, INC.
|
Consolidated
Statements of Comprehensive Income (Unaudited)
|
(In millions,
except per share amounts)
|
|
|
Thirteen Week
Periods Ended
|
|
Twenty-Six Week
Periods Ended
|
|
December 25,
2019
|
|
December 26,
2018
|
|
December 25,
2019
|
|
December 26,
2018
|
Revenues
|
|
|
|
|
|
|
|
Company
sales
|
$
|
847.5
|
|
|
$
|
761.5
|
|
|
$
|
1,611.4
|
|
|
$
|
1,489.8
|
|
Franchise and other
revenues(1)
|
21.8
|
|
|
29.2
|
|
|
43.9
|
|
|
54.7
|
|
Total
revenues
|
869.3
|
|
|
790.7
|
|
|
1,655.3
|
|
|
1,544.5
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Company restaurants
(excluding depreciation and amortization)
|
|
|
|
|
|
|
|
Cost of
sales
|
223.1
|
|
|
200.9
|
|
|
426.9
|
|
|
392.8
|
|
Restaurant
labor
|
291.8
|
|
|
260.8
|
|
|
560.3
|
|
|
517.1
|
|
Restaurant
expenses
|
224.7
|
|
|
205.7
|
|
|
432.0
|
|
|
404.7
|
|
Company restaurant
expenses
|
739.6
|
|
|
667.4
|
|
|
1,419.2
|
|
|
1,314.6
|
|
Depreciation and
amortization
|
39.3
|
|
|
36.1
|
|
|
77.4
|
|
|
73.1
|
|
General and
administrative
|
34.6
|
|
|
35.4
|
|
|
72.6
|
|
|
69.2
|
|
Other (gains) and
charges(2)
|
12.3
|
|
|
2.2
|
|
|
11.4
|
|
|
(8.9)
|
|
Total operating costs
and expenses
|
825.8
|
|
|
741.1
|
|
|
1,580.6
|
|
|
1,448.0
|
|
Operating
income
|
43.5
|
|
|
49.6
|
|
|
74.7
|
|
|
96.5
|
|
Interest
expenses
|
15.0
|
|
|
15.4
|
|
|
29.9
|
|
|
31.0
|
|
Other (income),
net
|
(0.5)
|
|
|
(0.8)
|
|
|
(1.0)
|
|
|
(1.6)
|
|
Income before
provision for income taxes
|
29.0
|
|
|
35.0
|
|
|
45.8
|
|
|
67.1
|
|
Provision for income
taxes
|
1.1
|
|
|
3.0
|
|
|
3.0
|
|
|
8.7
|
|
Net income
|
$
|
27.9
|
|
|
$
|
32.0
|
|
|
$
|
42.8
|
|
|
$
|
58.4
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
$
|
0.75
|
|
|
$
|
0.84
|
|
|
$
|
1.14
|
|
|
$
|
1.49
|
|
|
|
|
|
|
|
|
|
Diluted net income
per share
|
$
|
0.73
|
|
|
$
|
0.83
|
|
|
$
|
1.12
|
|
|
$
|
1.46
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
37.4
|
|
|
38.1
|
|
|
37.4
|
|
|
39.2
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
38.1
|
|
|
38.8
|
|
|
38.1
|
|
|
39.9
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments(3)
|
$
|
0.1
|
|
|
$
|
(0.6)
|
|
|
$
|
(0.1)
|
|
|
$
|
(0.3)
|
|
Other comprehensive
income (loss)
|
0.1
|
|
|
(0.6)
|
|
|
(0.1)
|
|
|
(0.3)
|
|
Comprehensive
income
|
$
|
28.0
|
|
|
$
|
31.4
|
|
|
$
|
42.7
|
|
|
$
|
58.1
|
|
|
|
|
|
(1)
|
Franchise and other
revenues include Royalties and Franchise fees and other revenues.
Franchise fees and other revenues include Maggiano's banquet
service charge income, advertising fees, gift card breakage, gift
card equalization, gift card discount costs from third-party gift
card sales, digital entertainment revenues, delivery fee income,
franchise and development fees, retail royalty revenues, and
merchandise income.
|
(2)
|
Other (gains) and
charges included in the Consolidated Statements of Comprehensive
Income included (in millions):
|
|
|
|
Thirteen Week
Periods Ended
|
|
Twenty-Six Week
Periods Ended
|
|
December 25,
2019
|
|
December 26,
2018
|
|
December 25,
2019
|
|
December 26,
2018
|
Restaurant impairment
charges
|
$
|
4.6
|
|
|
$
|
1.0
|
|
|
$
|
4.6
|
|
|
$
|
1.0
|
|
Restaurant closure
charges
|
2.9
|
|
|
2.1
|
|
|
3.1
|
|
|
3.8
|
|
Acquisition of
franchise restaurants costs, net of (gains)
|
2.0
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
Remodel-related
costs
|
0.8
|
|
|
2.6
|
|
|
1.5
|
|
|
3.1
|
|
Lease modification
net charge (gain)
|
—
|
|
|
—
|
|
|
(3.1)
|
|
|
—
|
|
Sale leaseback
(gain), net of transaction charges
|
—
|
|
|
(4.4)
|
|
|
—
|
|
|
(17.7)
|
|
Other
|
2.0
|
|
|
0.9
|
|
|
3.8
|
|
|
0.9
|
|
|
$
|
12.3
|
|
|
$
|
2.2
|
|
|
$
|
11.4
|
|
|
$
|
(8.9)
|
|
|
|
(3)
|
Foreign currency
translation adjustment included in our Comprehensive income in the
Consolidated Statements of Comprehensive Income represents the
unrealized impact of translating the financial statements of our
Canadian restaurants from Canadian dollars to U.S. dollars. This
amount is not included in Net income and would only be realized
upon disposition of these restaurants.
|
BRINKER
INTERNATIONAL, INC.
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In
millions)
|
|
|
December 25,
2019(1)
|
|
June 26,
2019
|
ASSETS
|
|
|
|
Total current
assets
|
$
|
224.3
|
|
|
$
|
177.0
|
|
Net property and
equipment(2)
|
823.0
|
|
|
755.1
|
|
Operating lease
assets(3)
|
1,175.9
|
|
|
—
|
|
Deferred income
taxes, net(3)(4)
|
40.3
|
|
|
112.0
|
|
Other
assets
|
240.2
|
|
|
214.2
|
|
Total
assets
|
$
|
2,503.7
|
|
|
$
|
1,258.3
|
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
Total current
liabilities(3)(4)
|
$
|
552.4
|
|
|
$
|
421.6
|
|
Long-term debt and
finance leases, less current installments
|
1,290.2
|
|
|
1,206.6
|
|
Long-term operating
lease liabilities, less current portion(3)
|
1,172.1
|
|
|
—
|
|
Deferred gain on sale
leaseback transactions(4)
|
—
|
|
|
255.3
|
|
Other
liabilities
|
57.9
|
|
|
153.0
|
|
Total shareholders'
deficit(3)(4)
|
(568.9)
|
|
|
(778.2)
|
|
Total liabilities and
shareholders' deficit
|
$
|
2,503.7
|
|
|
$
|
1,258.3
|
|
|
|
(1)
|
The Condensed
Consolidated Balance Sheet at December 25, 2019 includes the
preliminary purchase price allocation for the 116 Chili's
restaurants assets acquired and liabilities assumed on September 5,
2019.
|
|
|
(2)
|
Of the 1,117
company-owned restaurant locations, at December 25, 2019, we
own both building and land for 43 restaurant locations. The related
book values associated with these restaurants included land of
$34.1 million and buildings of $15.8 million.
|
|
|
(3)
|
Effective June 27,
2019, we adopted ASC 842, the new lease accounting standard that
required us to recognize operating lease assets and liabilities in
the balance sheet. Under our historical accounting, operating
leases were not recognized in the balance sheet. Prior results have
not been restated for the impact of this accounting change. The
impact of the new lease accounting standard did not significantly
impact our results of operations or cash flows.
|
|
|
(4)
|
Deferred gain on sale
leaseback transactions balance of $255.3 million, the related
short-term deferred gain balance recorded within Total current
liabilities of $19.3 million, and the associated Deferred income
taxes, net balance of $68.6 million, were eliminated upon adoption
of ASC 842 into Total shareholders' deficit as required by ASC
842.
|
BRINKER
INTERNATIONAL, INC.
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(In
millions)
|
|
|
Twenty-Six Week
Periods Ended
|
|
December 25,
2019
|
|
December 26,
2018
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
|
42.8
|
|
|
$
|
58.4
|
|
Adjustments to
reconcile Net income to Net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
77.4
|
|
|
73.1
|
|
Stock-based
compensation
|
9.7
|
|
|
7.2
|
|
Restructure charges
and other impairments
|
6.1
|
|
|
8.4
|
|
Net loss (gain) on
disposal of assets
|
0.5
|
|
|
(18.3)
|
|
Other
|
1.3
|
|
|
1.3
|
|
Changes in assets and
liabilities
|
4.5
|
|
|
(73.9)
|
|
Net cash provided by
operating activities
|
142.3
|
|
|
56.2
|
|
Cash flows from
investing activities
|
|
|
|
Payments for property
and equipment
|
(51.4)
|
|
|
(78.7)
|
|
Payments for
franchise restaurant acquisitions
|
(96.2)
|
|
|
—
|
|
Proceeds from sale of
assets
|
0.3
|
|
|
1.2
|
|
Proceeds from note
receivable
|
1.4
|
|
|
1.3
|
|
Insurance
recoveries
|
—
|
|
|
1.4
|
|
Proceeds from sale
leaseback transactions, net of related expenses
|
—
|
|
|
458.0
|
|
Net cash (used in)
provided by investing activities
|
(145.9)
|
|
|
383.2
|
|
Cash flows from
financing activities
|
|
|
|
Borrowings on
revolving credit facility
|
463.0
|
|
|
479.0
|
|
Payments on revolving
credit facility
|
(416.0)
|
|
|
(713.0)
|
|
Purchases of treasury
stock
|
(11.3)
|
|
|
(167.6)
|
|
Payments of
dividends
|
(29.0)
|
|
|
(31.6)
|
|
Payments on long-term
debt
|
(5.0)
|
|
|
(3.7)
|
|
Proceeds from
issuances of treasury stock
|
1.5
|
|
|
2.8
|
|
Payments for debt
issuance costs
|
(1.0)
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
2.2
|
|
|
(434.1)
|
|
Net change in cash
and cash equivalents
|
(1.4)
|
|
|
5.3
|
|
Cash and cash
equivalents at beginning of period
|
13.4
|
|
|
10.9
|
|
Cash and cash
equivalents at end of period
|
$
|
12.0
|
|
|
$
|
16.2
|
|
BRINKER
INTERNATIONAL, INC.
|
Restaurant
Summary
|
|
|
Total
Restaurants
Open at
December 25,
2019
|
|
Fiscal
2020
|
|
|
Second Quarter
Openings
|
|
Fiscal Year
Openings
|
|
Full Year
Projected
Openings
|
New
Openings
|
|
|
|
|
|
|
|
Company-owned
restaurants
|
|
|
|
|
|
|
|
Chili's
domestic
|
1,060
|
|
|
4
|
|
|
5
|
|
|
9-11
|
|
Chili's
international
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Maggiano's
|
52
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
company-owned
|
1,117
|
|
|
4
|
|
|
5
|
|
|
9-11
|
|
|
|
|
|
|
|
|
|
Franchise
restaurants
|
|
|
|
|
|
|
|
Chili's
domestic
|
180
|
|
|
1
|
|
|
2
|
|
|
2-3
|
|
Chili's
international
|
377
|
|
|
5
|
|
|
16
|
|
|
27-32
|
|
Maggiano's
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total
franchise
|
558
|
|
|
6
|
|
|
18
|
|
|
30-36
|
|
|
|
|
|
|
|
|
|
Total company-owned
and franchise restaurants
|
|
|
|
|
|
|
|
Chili's
domestic
|
1,240
|
|
|
5
|
|
|
7
|
|
|
11-14
|
|
Chili's
international
|
382
|
|
|
5
|
|
|
16
|
|
|
27-32
|
|
Maggiano's
|
53
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total
|
1,675
|
|
|
10
|
|
|
23
|
|
|
39-47
|
|
|
|
|
|
|
|
|
|
Relocation
Openings
|
|
|
|
|
|
|
|
Chili's domestic
company-owned relocations
|
|
|
0
|
|
|
0
|
|
|
0-2
|
|
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SOURCE Brinker International, Inc.