OSI Osiris Acquisition Corp

TAMPA, Fla., Feb. 22 /PRNewswire-FirstCall/ -- OSI Restaurant Partners, Inc. (NYSE:OSI) today reported that net income for the three months ended December 31, 2006 was $21,829,000, equal to $0.29 per share (diluted), compared with $27,389,000 or $0.36 per share (diluted) for the same period in 2005. For the year ended December 31, 2006, net income was $100,160,000, equal to $1.31 per share (diluted), compared with $146,746,000 or $1.92 per share (diluted) for the same period in 2005. Revenues for the quarter increased by 9.1% to $1,005,938,000 compared with $922,290,000 during the same quarter last year. For the year, revenues increased by 9.1% to $3,940,959,000 compared with $3,612,717,000 for the same period in 2005. * For the three months and year ended December 31, 2006, adjusting for the conversion costs related to the implementation of the Company's new Partner Equity Program, diluted earnings per share on an adjusted basis were $0.29 and $1.48, respectively. While adjusted diluted earnings per share is adjusted for implementation costs, it does not eliminate what the Company considers to be the ongoing expenses resulting from the implementation of the new Partner Equity Program nor does it eliminate stock-based compensation expenses resulting from the first quarter implementation of a new accounting standard. For the three months and year ended December 31, 2005, diluted earnings per share on an adjusted basis were $0.37 and $1.83, respectively, after adjusting for certain impairment charges and including expenses for the ongoing costs of the Partner Equity Program as if it had been in place and stock-based compensation charges as if the new stock-based compensation rules had been in effect in 2005. This comparison of adjusted results is intended to provide comparability between the periods and a reconciliation of reported and adjusted results is included in the accompanying tables. * The Company adopted a new accounting standard titled SFAS No. 123 (Revised), "Share-Based Payment" during the first quarter of 2006. SFAS No. 123R requires the fair value measurement of all stock-based payments to employees, including grants of employee stock options, and recognition of those expenses in the statement of operations. * During the first quarter of 2006, all managing partners were given an opportunity to elect participation in a new Partner Equity Program ("PEP" or the "Plan"), more fully described in the Company's 2005 Form 10-K/A. This new Plan became effective for approximately 96% of all managing partners in current employment agreements and for all new managing partner employment agreements signed after March 1, 2006. The PEP replaces the issuance of stock options with a deferred compensation program. Certain statements in this news release are forward-looking statements. Forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, price and availability of commodities, such as beef, chicken, shrimp, pork, seafood, dairy, potatoes, onions and energy supplies, which are subject to fluctuation and could increase or decrease more than the Company expects; inflation; increased labor and insurance costs; changes in consumer tastes and the level of acceptance of the Company's restaurant concepts (including consumer acceptance of price increases); consumer perception of food safety; local, regional, national and international economic conditions; the seasonality of the Company's business; demographic trends; the cost of advertising and media; and government actions and policies. Forward-looking statements regarding stock-based compensation and the Partner Equity Program include estimates and assumptions, including but not limited to, restaurant operating performance and outstanding share calculations which may differ materially from actual results. Additionally, the Company has previously disclosed a proposed merger transaction and there are risks and uncertainties associated with the transaction that could cause actual future results to differ materially from historical results. In particular, (1) the Company may be unable to obtain shareholder approval required for the transaction, (2) conditions to the closing of the transaction may not be satisfied, (3) the transaction may involve unexpected costs, unexpected liabilities or unexpected delays, (4) the businesses of the Company may suffer as a result of uncertainty surrounding the transaction, and (5) the financing required to complete the transaction may be delayed or may not be available. Further information on potential factors that could affect the financial results of OSI Restaurant Partners, Inc. is included in its 2005 Annual Report on Form 10-K/A, current reports on Form 8-K and other filings with the Securities and Exchange Commission. The Company assumes no obligation to update the information in this press release. The Company's restaurant system operates in 50 states and 20 countries internationally. STATEMENTS OF INCOME (in thousands, except for per share data) Three months ended Years ended December 31, December 31, 2006 2005 2006 2005 Revenues Restaurant sales $1,000,666 $916,212 $3,919,776 $3,590,869 Other revenues 5,272 6,078 21,183 21,848 Total revenues 1,005,938 922,290 3,940,959 3,612,717 Costs and expenses Cost of sales 356,118 334,031 1,415,459 1,315,340 Labor and other related 274,619 239,064 1,087,258 930,356 Other restaurant operating 233,531 213,774 885,562 783,745 Depreciation and amortization 40,664 34,607 151,600 127,773 General and administrative 66,838 49,515 234,642 197,135 Hurricane property and inventory losses - 1,689 - 3,101 Provision for impaired assets and restaurant closings 607 17,144 14,154 27,170 Contribution for "Dine Out for Hurricane Relief" - - - 1,000 Income from operations of unconsolidated affiliates (150) (814) (5) (1,479) 972,227 889,010 3,788,670 3,384,141 Income from operations 33,711 33,280 152,289 228,576 Other income (expense), net 2,785 (972) 7,950 (2,070) Interest income 1,190 611 3,312 2,087 Interest expense (5,352) (2,329) (14,804) (6,848) Income before provision for income taxes and elimination of minority interest 32,334 30,590 148,747 221,745 Provision for income taxes 8,931 9,480 41,812 73,808 Income before elimination of minority interest 23,403 21,110 106,935 147,937 Elimination of minority interest 1,574 (6,279) 6,775 1,191 Net income $21,829 $27,389 $100,160 $146,746 Basic earnings per share $0.30 $0.37 $1.35 $1.98 Basic weighted average shares outstanding 73,950 73,839 73,971 73,952 Diluted earnings per share $0.29 $0.36 $1.31 $1.92 Diluted weighted average shares outstanding 76,278 75,864 76,213 76,541 SUPPLEMENTAL BALANCE SHEET INFORMATION As of December 31, 2006 (in millions): Cash $95 Working capital deficit (249) Current portion of long-term debt 60 Long-term debt (1) 210 (1) Long-term debt in the Company's Consolidated Balance Sheet includes: (i) $32.1 million of debt owed by a consolidated franchisee- affiliated entity for which the Company provides a guarantee, and (ii) a $2.5 million fair value debt guarantee on amounts owed by an unconsolidated affiliate of the Company (and for which the Company provides a total guarantee of $17.6 million). System-wide Sales System-wide sales grew by 8.0% for the quarter and by 7.9% for the year ended December 31, 2006 compared with the respective periods in 2005. System- wide sales is a non-GAAP financial measure that includes sales of all restaurants operating under the Company's brand names, whether the Company owns them or not. The two components of system-wide sales - sales of OSI Restaurant Partners, Inc. and sales of franchisees and unconsolidated development joint ventures - are provided in the following supplemental tables. Three months ended Years ended December 31, December 31, OSI RESTAURANT PARTNERS, INC. 2006 2005 2006 2005 RESTAURANT SALES (in millions): Outback Steakhouse restaurants Domestic $566 $555 $2,260 $2,238 International 82 65 308 258 Total 648 620 2,568 2,496 Carrabba's Italian Grills 168 152 649 580 Bonefish Grills 80 62 311 224 Fleming's Prime Steakhouse and Wine Bars 54 44 188 150 Other restaurants 51 38 204 141 Total Company-owned restaurant sales $1,001 $916 $3,920 $3,591 The following information presents sales for franchised and unconsolidated development joint venture restaurants. These are restaurants that are not owned by the Company and from which the Company only receives a franchise royalty or a portion of their total income. Management believes that franchise and unconsolidated development joint venture sales information is useful in analyzing Company revenues because franchisees and affiliates pay service fees and/or royalties that generally are based on a percent of sales. Management also uses this information to make decisions about future plans for the development of additional restaurants and new concepts as well as evaluation of current operations. These sales do not represent sales of OSI Restaurant Partners, Inc., and are presented only as an indicator of the changes in the restaurant system, which management believes is important information regarding the health of the Company's restaurant brands. Three months ended Years ended December 31, December 31, FRANCHISE AND DEVELOPMENT JOINT 2006 2005 2006 2005 VENTURE SALES (in millions): Outback Steakhouse restaurants Domestic $88 $92 $359 $362 International 29 29 106 113 Total 117 121 465 475 Bonefish Grills 4 2 16 11 Total franchise and development joint venture sales (1) $121 $123 $481 $486 Income from franchise and development joint ventures (2) $5 $5 $21 $20 (1) Franchise and development joint venture sales are not included in Company revenues as reported in the Consolidated Statements of Income. (2) Represents the franchise royalty and portion of total income included in the Consolidated Statements of Income in the line items Other revenues or Income from operations of unconsolidated affiliates. Fourth Quarter Comparative Store Information RESTAURANTS IN OPERATION AS OF DECEMBER 31: 2006 2005 Outback Steakhouses Company-owned - domestic 679 670 Company-owned - international 118 88 Franchised and development joint venture - domestic 107 105 Franchised and development joint venture - international 44 52 Total 948 915 Carrabba's Italian Grills Company-owned 229 200 Bonefish Grills Company-owned 112 86 Franchised 7 4 Total 119 90 Fleming's Prime Steakhouse and Wine Bars Company-owned 45 39 Roy's Company-owned 23 20 Cheeseburger in Paradise Company-owned 38 27 Lee Roy Selmon's Company-owned 5 3 Blue Coral Seafood and Spirits Company-owned 1 - Paul Lee's Chinese Kitchens Company-owned - 4 System-wide total 1,408 1,298 Reconciliation of Adjusted Results The following table sets forth a reconciliation of the Company's results reported in accordance with generally accepted accounting principles ("GAAP") to the adjusted results, which include non-GAAP financial measures. Although management encourages readers to rely on the Company's results reported in accordance with GAAP, management believes that adjusted results may be useful to investors' understanding of the Company's core operations and the comparability of financial information from period to period. The following table presents reported net income as adjusted for the following after-tax items for the three months and years ended December 31, 2006 and 2005 (in thousands): Three months ended Years ended December 31, December 31, 2006 2005 2006 2005 Net income, as reported $21,829 $27,389 $100,160 $146,746 Stock-based compensation, net of taxes PEP conversion costs (1) 2,018 - 15,018 - Options / 123R (2) - (1,600) - (6,367) Restricted stock (3) - (671) - (1,948) Partner equity program (PEP) (4) - (2,532) - (10,090) 2,018 (4,803) 15,018 (18,405) Special items, net of taxes Gain on restaurant disposal and sale of land (5) (1,707) - (4,858) - Provision for impaired assets, net (6) 292 4,537 2,489 9,154 Hurricane-related items (7) - 1,029 - 2,498 (1,415) 5,566 (2,369) 11,652 Adjusted net income $22,432 $28,152 $112,809 $139,993 Adjusted diluted earnings per share $0.29 $0.37 $1.48 $1.83 (1) The PEP "conversion costs" represent a portion of the costs of the PEP that would have been recorded in prior years if the Company had to expense all stock-based compensation and the new program had been in place at the inception of all existing manager partner contracts. (2) Effect on earnings had existing Company management and managing partner employment grants of stock options been expensed in 2005. Stock options were not required to be expensed under accounting guidance in 2005 but are expensed beginning in 2006 upon adoption of a new accounting standard. (3) Incremental expense for 2005 grants of restricted stock to the Company's Chief Executive Officer, Chief Financial Officer and Senior Vice President of Real Estate and Development to reflect an annualized expense as if these grants were outstanding the entire year. (4) Estimation of PEP expenses had the Plan been in place in 2005. (5) Net gain recorded during the second quarter of 2006 in Other income in the Consolidated Income Statement for closing an Outback Steakhouse in accordance with a lease termination agreement and net gain recorded during the fourth quarter of 2006 in Other income for the sale of approximately 41.5 acres of land in Tampa, Florida. (6) Net impairment charges include the closing of two restaurants as a result of a landlord prematurely terminating the leases and a write- off of a note receivable in the third quarter of 2006, the closing of one restaurant as a result of a fire in the fourth quarter of 2006 and an impairment charge recorded against a deferred license fee receivable related to certain non-restaurant operations in the second quarter of 2005. Ordinarily, impairment charges for closed stores or impaired restaurant assets are not considered special items as those charges occur from time to time in normal restaurant operations. (7) Impact of hurricane property and inventory losses and the Company's contribution for "Dine Out for Hurricane Relief." Additional Information and Where to Find It In connection with the proposed transaction, a definitive proxy statement of OSI Restaurant Partners and other materials will be filed with the SEC. WE URGE INVESTORS TO READ THE DEFINITIVE PROXY STATEMENT AND THESE OTHER MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT OSI RESTAURANT PARTNERS AND THE PROPOSED TRANSACTION. Investors will be able to obtain free copies of the definitive proxy statement (when available) as well as other filed documents containing information about OSI Restaurant Partners at http://www.sec.gov/, the SEC's free internet site. Free copies of OSI Restaurant Partners' SEC filings are also available on OSI Restaurant Partners' internet site at http://www.osirestaurantpartners.com/. Participants in the Solicitation OSI Restaurant Partners and its executive officers and directors may be deemed, under SEC rules, to be participants in the solicitation of proxies from OSI Restaurant Partners' stockholders with respect to the proposed transaction. Information regarding the officers and directors of OSI Restaurant Partners is included in its definitive proxy statement for its 2006 annual meeting filed with the SEC on March 30, 2006. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by securities, holdings or otherwise, will be set forth in the definitive proxy statement and other materials to be filed with SEC in connection with the proposed transaction. DATASOURCE: OSI Restaurant Partners, Inc. CONTACT: Dirk Montgomery or Lisa Hathcoat, both of OSI Restaurant Partners, Inc., +1-813-282-1225 Web site: http://www.osirestaurantpartners.com/

Copyright