BLOOMIN' BRANDS, INC. TAMPA, Fla., July 29, 2016 /PRNewswire/ -- Bloomin' Brands, Inc. (Nasdaq:BLMN) today reported results for the second quarter ("Q2 2016") ended June 26, 2016 compared to the second quarter ("Q2 2015") ended June 28, 2015.
Key highlights for Q2 2016 include the following:
-- Repurchased 3.4 million shares of common stock for a total of $65
million;
-- Reported combined U.S. comparable restaurant sales down 2.3%;
-- Reported comparable restaurant sales for Outback Steakhouse in Brazil up
3.9%;
-- Opened six new restaurants, including four in international markets; and
-- Updated 2016 financial outlook, including updated U.S. GAAP diluted
earnings per share guidance of "At Least $0.75" and Adjusted diluted
earnings per share guidance of "At Least $1.35"
Subsequent to Q2 2016, the Company sold the Outback South Korea business for approximately $50.0 million.
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.
Q2
---
2016 2015 CHANGE
---- ---- ------
Diluted
(loss)
earnings
per
share $(0.08) $0.26 $(0.34)
Adjustments 0.38 0.02 0.36
Adjusted
diluted
earnings
per
share $0.30 $0.28 $0.02
===== ===== =====
See Non-GAAP Measures later in this release.
CEO Comments
"Q2 performance for our brands and the industry was softer than expected," said Liz Smith, CEO. "However, we made significant progress elevating the core guest experience, which will return the portfolio to sales growth in the second half of 2016. In addition, we made meaningful advances to optimize our portfolio for long-term growth and improve total shareholder return. These actions included the sale of Outback South Korea, progress on our sale-leaseback program and investing ahead of growth internationally."
Second Quarter Financial Results
(dollars in millions) Q2 2016 Q2 2015 % Change
------- ------- --------
Total revenues $1,078.6 $1,099.6 (1.9)%
U.S. GAAP restaurant-level operating margin 15.5% 16.5% (1.0)%
Adjusted restaurant-level operating margin (1) 15.5% 16.2% (0.7)%
U.S. GAAP operating income margin 1.2% 5.7% (4.5)%
Adjusted operating income margin (1) 5.2% 5.6% (0.4)%
(1) See Non-GAAP Measures later in this release.
-- The decrease in Total revenues was primarily due to lower comparable
restaurant sales and the effect of foreign currency translation,
partially offset by the net benefit of new restaurant openings and
closings.
-- The decreases in U.S. GAAP and Adjusted restaurant-level operating
margin were primarily due to: (i) higher labor expense resulting from
wage inflation and investments in our service model, (ii) unfavorable
product mix and (iii) higher commodity costs driven by product
enhancements at Outback and inflation in Brazil. These decreases were
partially offset by productivity savings and menu pricing.
-- The decrease in U.S. GAAP operating income margin was due to: (i) $39.6
million of asset impairment charges in connection with the decision to
sell our South Korean business and (ii) lower restaurant-level operating
margin as described above. This decrease was partially offset by lower
expense associated with the timing of the Company's annual managing
partner conference.
-- The difference between U.S. GAAP and Adjusted operating income margin
was primarily due to the $39.6 million of pre-tax asset impairment
charges described above.
Second Quarter Comparable Restaurant Sales
THIRTEEN WEEKS ENDED JUNE 26, 2016 COMPANY-
OWNED
---------------------------------- ---------
Comparable restaurant sales (stores
open 18 months or more) (1) (2):
U.S.
----
Outback Steakhouse (2.5)%
Carrabba's Italian Grill (4.8)%
Bonefish Grill 0.9%
Fleming's Prime Steakhouse & Wine Bar (0.8)%
Combined U.S. (2.3)%
International
-------------
Outback Steakhouse - Brazil 3.9%
Outback Steakhouse - South Korea 10.8%
Comparable
restaurant
sales exclude
the effect of
fluctuations
in foreign
currency
(1) rates.
(2) Relocated
international
restaurants
closed more
than 30 days
and relocated
U.S.
restaurants
closed more
than 60 days
are excluded
from
comparable
restaurant
sales until
at least 18
months after
reopening.
Dividend Declaration and Share Repurchases
The Company's Board of Directors declared a quarterly cash dividend of $0.07 per share to be paid on August 25, 2016 to all stockholders of record as of the close of business on August 10, 2016.
The Company repurchased 3.4 million shares of common stock in Q2 2016 for a total of $65 million, which left $110 million remaining under our existing authorization. On July 26, 2016, the Company's Board of Directors canceled the remaining authorization and approved a new $300 million authorization. The authorization will expire on January 26, 2018.
Outback South Korea
On July 25, 2016, we sold Outback South Korea for approximately $50.0 million in cash. The Company's restaurant locations in South Korea will be operated as franchises under an agreement with the buyer.
We expect the sale to negatively impact Bloomin' Brands diluted earnings per share by approximately $0.01 in the second half of 2016, excluding the impact of any additional impairments, fees and expenses related to the transaction.
Fiscal 2016 Financial Outlook
The Company has updated several of the metrics in its financial outlook for fiscal 2016 driven primarily by: (i) lower U.S. comparable restaurant sales and (ii) the impact of the sale of Outback South Korea, as described above.
The following table presents the Company's updated expectations for selected fiscal 2016 financial reporting and operating results as compared to the financial outlook provided in the Company's February 17, 2016 earnings release. These updated expectations supersede the previously provided financial outlook.
Financial Results (in millions, except per share data or as otherwise indicated): Outlook on Feb. 17 Current Outlook
------------------ ---------------
U.S. GAAP diluted earnings per share (1) (2) At Least 10% growth At Least $0.75
Adjusted diluted earnings per share (2) (3) At Least 10% growth At Least $1.35
U.S. GAAP operating income margin (4) Increase Decrease
Adjusted operating income margin (4) (5) Increase Flat
Unfavorable foreign currency translation impact on adjusted operating income $10 $3
U.S. GAAP effective income tax rate (6) 26% - 28% 30% - 31%
Adjusted effective income tax rate (6) 26% - 28% 25% - 26%
Other Selected Financial Data (in millions, or as otherwise indicated):
Combined U.S. comparable restaurant sales Positive Flat
Commodity inflation Approximately 0.5% Approximately 0.5%
Capital expenditures $235 - $255 $235 - $255
Number of new system-wide restaurants 40 - 50 40 - 50
(1) Decrease
driven by
$39.6 million
of pre-tax
asset
impairment
charges in
connection to
the decision
to sell our
South Korean
business and
$26.6 million
of costs
related to
the
defeasance of
the 2012 CMBS
loan.
(2) We expect the
South Korea
sale to
negatively
impact
Bloomin'
Brands
diluted
earnings per
share by
approximately
$0.01 in the
second half
of 2016,
excluding the
impact of any
additional
impairments,
fees and
expenses
related to
the
transaction.
(3) The Adjusted
diluted
earnings per
share outlook
includes: (i)
adjustments
incurred
through June
26, 2016 (as
reflected in
table six of
this release)
and (ii) $4.8
million of
forecasted
pre-tax
adjustments
for the
second half
of the year,
primarily
related to
anticipated
expenses
associated
with the
remodel and
relocation
programs, the
Bonefish
Grill
Restructuring
Initiative
and
amortization
for
intangibles
acquired in
connection
with the
Brazil
acquisition.
Refer to
"Non-GAAP
Measures" for
additional
information.
(4) The primary
difference
between U.S.
GAAP and
adjusted
operating
income margin
is due to the
South Korea
impairment
charges in
Q2.
(5) Excludes the
impact of any
additional
rent
increases
resulting
from future
sale-
leasebacks.
(6) The primary
differences
between U.S.
GAAP and
adjusted
effective
income tax
are due to
lower U.S.
GAAP pre-tax
income from
the South
Korea
impairment
charges noted
in footnote 1
and $3.5
million of
tax expense
associated
with the
repatriation
of proceeds
from the
sale.
Conference Call
The Company will host a conference call today, July 29th at 9:00 AM EDT. The conference call can be accessed live over the telephone by dialing (877) 407-9039, or (201) 689-8470 for international participants. A replay will be available beginning two hours after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 13640047. The replay will be available through Friday, August 5, 2016. The call will also be webcast live from the Company's website at http://www.bloominbrands.com under the Investors section. A replay of this webcast will be available on the Company's website after the call.
Non-GAAP Measures
In addition to the results provided in accordance with U.S. GAAP, this press release and related tables include certain non-GAAP measures, which present operating results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with U.S. GAAP and include the following: (i) Adjusted restaurant-level operating margin, (ii) Adjusted income from operations and the corresponding margin, (iii) Adjusted net income, (iv) Adjusted diluted earnings per share, (v) Adjusted segment restaurant-level operating margin and (vi) Adjusted segment income from operations and the corresponding margin.
We believe that our use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies. However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur. We believe that the disclosure of these non-GAAP measures is useful to investors as they form part of the basis for how our management team and Board of Directors evaluate our operating performance, allocate resources and establish employee incentive plans.
These non-GAAP financial measures are not intended to replace U.S. GAAP financial measures, and they are not necessarily standardized or comparable to similarly titled measures used by other companies. We maintain internal guidelines with respect to the types of adjustments we include in our non-GAAP measures. These guidelines endeavor to differentiate between types of gains and expenses that are reflective of our core operations, and those that vary from period to period without correlation to our core performance in that period. However, implementation of these guidelines necessarily involves the application of judgment, and the treatment of any items not directly addressed by, or changes to, our guidelines will be considered by our disclosure committee. You should refer to the reconciliations of non-GAAP measures later in this release for descriptions of the actual adjustments made in the current period and the corresponding prior period.
In this release, we have also included forward-looking non-GAAP information under the caption "Fiscal 2016 Financial Outlook." This information relates to our current expectations for fiscal 2016 adjusted operating income margin, adjusted diluted EPS growth and adjusted effective income tax rate. We have also provided information with respect to our expectations for the corresponding GAAP measures.
The differences between our disclosed GAAP and non-GAAP expectations are described and quantified to the extent practicable under "Fiscal 2016 Financial Outlook". However, in addition to the general cautionary language regarding all forward-looking statements included elsewhere in this release, we note that, because the items we adjust for in our non-GAAP measures may vary from period to period without correlation to our core performance, they are by nature more difficult to predict and estimate, so we cannot guarantee that additional adjustments will not occur in the remainder of the fiscal year or that they will not significantly impact our GAAP results.
For reconciliations of the non-GAAP measures used in this release, refer to tables four, five, six and seven included later in this release.
About Bloomin' Brands, Inc.
Bloomin' Brands, Inc. is one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. The Company has four founder-inspired brands: Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill and Fleming's Prime Steakhouse & Wine Bar. The Company operates approximately 1,500 restaurants in 48 states, Puerto Rico, Guam and 20 countries, some of which are franchise locations. For more information, please visit bloominbrands.com.
Forward-Looking Statements
Certain statements contained herein, including statements under the headings "CEO Comments," and "Fiscal 2016 Financial Outlook" are not based on historical fact and are "forward-looking statements" within the meaning of applicable securities laws. Generally, these statements can be identified by the use of words such as "guidance," "believes," "estimates," "anticipates," "expects," "on track," "feels," "forecasts," "seeks," "projects," "intends," "plans," "may," "will," "should," "could," "would" and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the Company's forward-looking statements. These risks and uncertainties include, but are not limited to: our ability to preserve the value of and grow our brands; local, regional, national and international economic conditions; consumer confidence and spending patterns; the cost and availability of credit; interest rate changes; competition; consumer reaction to public health and food safety issues; government actions and policies; increases in unemployment rates and taxes; increases in labor costs; price and availability of commodities; challenges associated with our expansion, remodeling and relocation plans; interruption or breach of our systems or loss of consumer or employee information; foreign currency exchange rates; the seasonality of the Company's business; weather, acts of God and other disasters; changes in patterns of consumer traffic, consumer tastes and dietary habits; the effectiveness of our strategic actions, including acquisitions and dispositions; compliance with debt covenants and the Company's ability to make debt payments and planned investments; and our ability to continue to pay dividends and repurchase shares of our common stock. Further information on potential factors that could affect the financial results of the Company and its forward-looking statements is included in its most recent Form 10-K and subsequent filings with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statement, except as may be required by law. These forward-looking statements speak only as of the date of this release. All forward-looking statements are qualified in their entirety by this cautionary statement.
Note: Numerical figures included in this release have been subject to rounding adjustments.
TABLE ONE
BLOOMIN' BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
----------
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
-------------------- ----------------------
(dollars in thousands, except per share data) JUNE 26, 2016 JUNE 28, 2015 JUNE 26, 2016 JUNE 28, 2015
------------- ------------- ------------- -------------
Revenues
Restaurant sales $1,072,519 $1,092,759 $2,230,571 $2,287,569
Other revenues 6,069 6,838 12,205 14,087
----- ----- ------ ------
Total revenues 1,078,588 1,099,597 2,242,776 2,301,656
--------- --------- --------- ---------
Costs and expenses
Cost of sales 346,811 357,455 722,099 744,923
Labor and other related 309,155 301,039 631,960 625,025
Other restaurant operating 250,443 254,281 504,014 518,319
Depreciation and amortization 49,004 47,375 96,655 93,861
General and administrative 68,566 75,962 143,591 149,209
Provision for impaired assets and restaurant closings 41,276 900 44,440 10,033
------ --- ------ ------
Total costs and expenses 1,065,255 1,037,012 2,142,759 2,141,370
--------- --------- --------- ---------
Income from operations 13,333 62,585 100,017 160,286
Loss on defeasance, extinguishment and modification of debt - (2,638) (26,580) (2,638)
Other (expense) income, net (1) 57 (20) (1,090)
Interest expense, net (10,302) (12,867) (23,177) (26,065)
------- ------- ------- -------
Income before provision for income taxes 3,030 47,137 50,240 130,493
Provision for income taxes 11,095 14,081 22,422 35,355
------ ------ ------ ------
Net (loss) income (8,065) 33,056 27,818 95,138
Less: net income attributable to noncontrolling interests 1,112 830 2,520 2,324
----- --- ----- -----
Net (loss) income attributable to Bloomin' Brands $(9,177) $32,226 $25,298 $92,814
======= ======= ======= =======
Net (loss) income $(8,065) $33,056 $27,818 $95,138
Other comprehensive income:
Foreign currency translation adjustment 19,965 (26,182) 12,680 (51,644)
Unrealized (losses) gains on derivatives, net of tax (2,187) 844 (4,922) (3,168)
Reclassification of adjustment for loss on derivatives included in net income, net of tax 967 - 1,955 -
--- --- ----- ---
Comprehensive income 10,680 7,718 37,531 40,326
Less: comprehensive income attributable to noncontrolling interests 2,820 830 4,926 2,324
----- --- ----- -----
Comprehensive income attributable to Bloomin' Brands $7,860 $6,888 $32,605 $38,002
====== ====== ======= =======
(Loss) earnings per share:
Basic $(0.08) $0.26 $0.22 $0.75
====== ===== ===== =====
Diluted $(0.08) $0.26 $0.21 $0.73
====== ===== ===== =====
Weighted average common shares outstanding:
Basic 113,330 123,046 115,630 124,174
======= ======= ======= =======
Diluted 113,330 126,242 118,560 127,501
======= ======= ======= =======
Cash dividends declared per common share $0.07 $0.06 $0.14 $0.12
===== ===== ===== =====
TABLE TWO
BLOOMIN' BRANDS, INC.
SEGMENT RESULTS
(UNAUDITED)
----------
(dollars in thousands) THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
-------------------- ----------------------
U.S. Segment JUNE 26, 2016 JUNE 28, 2015 JUNE 26, 2016 JUNE 28, 2015
------------- ------------- ------------- -------------
Revenues
Restaurant sales $953,992 $977,260 $1,992,741 $2,033,364
Other revenues 4,989 5,718 10,019 11,628
----- ----- ------ ------
Total revenues $958,981 $982,978 $2,002,760 $2,044,992
Restaurant-level operating margin 15.5% 15.9% 16.5% 17.0%
Income from operations $89,010 $96,192 $206,849 $224,460
Operating income margin 9.3% 9.8% 10.3% 11.0%
International Segment
Revenues
Restaurant sales $118,527 $115,499 $237,830 $254,205
Other revenues 1,080 1,120 2,186 2,459
----- ----- ----- -----
Total revenues $119,607 $116,619 $240,016 $256,664
Restaurant-level operating margin 16.2% 16.8% 17.8% 19.5%
(Loss) income from operations $(34,573) $5,727 $(23,224) $14,606
Operating (loss) income margin (28.9)% 4.9% (9.7)% 5.7%
Reconciliation of Segment Income (Loss) from Operations to Consolidated Income from Operations
Segment income (loss) from operations
U.S. $89,010 $96,192 $206,849 $224,460
International (34,573) 5,727 (23,224) 14,606
------- ----- ------- ------
Total segment income from operations 54,437 101,919 183,625 239,066
Unallocated corporate operating expense (41,104) (39,334) (83,608) (78,780)
------- ------- ------- -------
Total income from operations $13,333 $62,585 $100,017 $160,286
======= ======= ======== ========
TABLE THREE
BLOOMIN' BRANDS, INC.
SUPPLEMENTAL BALANCE SHEET INFORMATION
(UNAUDITED)
----------
(dollars
in
thousands) JUNE 26, 2016 DECEMBER 27, 2015
------------- -----------------
Cash
and
cash
equivalents
(1) $102,074 $132,337
Net
working
capital
(deficit)
(2) $(428,697) $(395,522)
Total
assets $2,784,379 $3,032,569
Total
debt,
net $1,238,658 $1,316,864
Total
stockholders'
equity $309,264 $421,900
(1) Excludes
restricted
cash.
(2) The Company
has, and in
the future
may continue
to have,
negative
working
capital
balances (as
is common for
many
restaurant
companies).
The Company
operates
successfully
with negative
working
capital
because cash
collected on
Restaurant
sales is
typically
received
before
payment is
due on its
current
liabilities
and its
inventory
turnover
rates require
relatively
low
investment in
inventories.
Additionally,
ongoing cash
flows from
restaurant
operations
and gift card
sales are
used to
service debt
obligations
and to make
capital
expenditures.
TABLE FOUR
BLOOMIN' BRANDS, INC.
RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATION
(UNAUDITED)
----------
THIRTEEN WEEKS ENDED (UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
--------------------
JUNE 26, 2016 JUNE 28, 2015
------------- -------------
U.S. GAAP ADJUSTED (1) U.S. GAAP ADJUSTED (3) QUARTER TO DATE
--------- ----------- --------- ----------- ---------------
Restaurant sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 32.3% 32.3% 32.7% 32.7% 0.4%
Labor and other related 28.8% 28.8% 27.5% 27.8% (1.0)%
Other restaurant operating 23.4% 23.3% 23.3% 23.3% -%
Restaurant-level operating margin 15.5% 15.5% 16.5% 16.2% (0.7)%
TWENTY-SIX WEEKS ENDED (UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
----------------------
JUNE 26, 2016 JUNE 28, 2015
------------- -------------
U.S. GAAP ADJUSTED (1,2) U.S. GAAP ADJUSTED (3) YEAR TO DATE
--------- ------------- --------- ----------- ------------
Restaurant sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 32.4% 32.4% 32.6% 32.6% 0.2%
Labor and other related 28.3% 28.3% 27.3% 27.4% (0.9)%
Other restaurant operating 22.6% 22.7% 22.7% 22.7% -%
Restaurant-level operating margin 16.7% 16.6% 17.5% 17.3% (0.7)%
(1) Includes
adjustments,
primarily for
a loss of
$0.3 million
on the sale
of certain
properties
related to
our sale
lease-back
initiative,
recorded in
Other
restaurant
operating for
the thirteen
and twenty-
six weeks
ended June
26, 2016.
(2) Includes
adjustments,
primarily for
the write-
off of $1.9
million of
deferred rent
liabilities
associated
with the
Bonefish
Restructuring
recorded in
Other
restaurant
operating for
the twenty-
six weeks
ended June
26, 2016.
(3) Includes a
$2.7 million
adjustment
for payroll
tax audit
contingencies,
which was
recorded in
Labor and
other related
for the
thirteen and
twenty-six
weeks ended
June 28,
2015.
TABLE FIVE
BLOOMIN' BRANDS, INC.
SEGMENT RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATION
(UNAUDITED)
----------
THIRTEEN WEEKS ENDED (UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
--------------------
JUNE 26, 2016 JUNE 28, 2015
------------- -------------
Restaurant-level operating margin: U.S. GAAP ADJUSTED U.S. GAAP ADJUSTED QUARTER TO DATE
--------- -------- --------- -------- ---------------
U.S. 15.5% 15.5% 15.9% 15.9% (0.4)%
International (1) 16.2% 16.2% 16.8% 16.9% (0.7)%
TWENTY-SIX WEEKS ENDED (UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
----------------------
JUNE 26, 2016 JUNE 28, 2015
------------- -------------
Restaurant-level operating margin: U.S. GAAP ADJUSTED U.S. GAAP ADJUSTED YEAR TO DATE
--------- -------- --------- -------- ------------
U.S. (2) 16.5% 16.4% 17.0% 17.0% (0.6)%
International (1) 17.8% 17.9% 19.5% 19.5% (1.6)%
(1) Includes
adjustments
of $0.1
million of
Brazil
amortization
for the
thirteen
weeks ended
June 28, 2015
and the
twenty-six
weeks ended
June 26,
2016,
respectively.
(2) Includes
adjustments
primarily for
losses of
$0.3 million
on the sale
of certain
properties
related to
our sale
lease-back
initiative
for the
thirteen
weeks ended
June 26,
2016.
TABLE SIX
BLOOMIN' BRANDS, INC.
INCOME FROM OPERATIONS, NET (LOSS) INCOME AND DILUTED EARNINGS PER SHARE NON-GAAP RECONCILIATIONS
(UNAUDITED)
----------
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
-------------------- ----------------------
(in thousands, except per share data) JUNE 26, 2016 JUNE 28, 2015 JUNE 26, 2016 JUNE 28, 2015
------------- ------------- ------------- -------------
Income from operations $13,333 $62,585 $100,017 $160,286
Operating income margin 1.2% 5.7% 4.5% 7.0%
Adjustments:
Asset impairments and related costs (1) 39,677 746 40,023 746
Restaurant relocations, remodels and related costs (2) 1,124 122 1,764 1,291
Purchased intangibles amortization (3) 949 1,123 1,809 2,406
Severance (4) 737 - 1,872 -
Restaurant impairments and closing costs (5) 335 (63) 2,120 8,807
Transaction-related expenses (6) 242 40 814 315
Payroll tax audit contingency (7) - (2,671) - (2,671)
Amortization of deferred gains from sale-leaseback transactions (8) (348) - (348) -
---- --- ---- ---
Total income from operations adjustments 42,716 (703) 48,054 10,894
------ ---- ------ ------
Adjusted income from operations $56,049 $61,882 $148,071 $171,180
------- ------- -------- --------
Adjusted operating income margin 5.2% 5.6% 6.6% 7.4%
Net (loss) income attributable to Bloomin' Brands $(9,177) $32,226 $25,298 $92,814
Adjustments:
Income from operations adjustments 42,716 (703) 48,054 10,894
Loss on defeasance, extinguishment and modification of debt (9) - 2,638 26,580 2,638
Loss on disposal of business and disposal of assets (10) - (121) - 1,030
--- ----
Total adjustments, before income taxes 42,716 1,814 74,634 14,562
Adjustment to provision for income taxes (11) 1,525 1,047 (8,177) (2,580)
----- ----- ------ ------
Net adjustments 44,241 2,861 66,457 11,982
------ ----- ------ ------
Adjusted net income $35,064 $35,087 $91,755 $104,796
======= ======= ======= ========
Diluted (loss) earnings per share $(0.08) $0.26 $0.21 $0.73
====== ===== ===== =====
Adjusted diluted earnings per share $0.30 $0.28 $0.77 $0.82
===== ===== ===== =====
Basic weighted average common shares outstanding 113,330 123,046 115,630 124,174
======= ======= ======= =======
Diluted weighted average common shares outstanding (12) 116,343 126,242 118,560 127,501
======= ======= ======= =======
(1) Represents
asset
impairment
charges and
related costs
associated
with the
decision to
sell our
Outback South
Korea
subsidiary in
2016 and our
corporate
aircraft in
2015.
(2) Represents
asset
impairment
charges and
accelerated
depreciation
incurred in
connection
with our
relocation
and remodel
programs.
(3) Represents
intangible
amortization
recorded as a
result of the
acquisition
of our Brazil
operations.
(4) Relates to
severance
expense
incurred
primarily as
a result of
the
relocation of
our Fleming's
operations
center to the
corporate
home office.
(5) Represents
expenses
incurred for
the Bonefish
Restructuring
and the
International
and Domestic
Restaurant
Closure
Initiatives.
(6) Relates
primarily to
the
following:
(i) costs
incurred with
our sale-
leaseback
initiative in
2016 and (ii)
costs
incurred with
the secondary
offering of
our common
stock in
March 2015.
(7) Relates to a
payroll tax
audit
contingency
adjustment
for the
employer's
share of FICA
taxes related
to cash tips
allegedly
received and
unreported by
our employees
during
calendar year
2011, which
is recorded
in Labor and
other related
expenses. In
addition, a
deferred
income tax
adjustment
has been
recorded for
the allowable
income tax
credits for
the
employer's
share of FICA
taxes
expected to
be paid,
which is
included in
Provision for
income taxes
and offsets
the
adjustment to
Labor and
other related
expenses. As
a result,
there is no
impact to Net
income from
this
adjustment.
(8) Represents
amortization
of deferred
gains related
to our sale-
leaseback
initiative.
(9) Relates to the
defeasance of
the 2012 CMBS
loan in 2016
and the
refinancing
of our Senior
Secured
Credit
Facility in
2015.
(10) Primarily
represents
loss on the
sale of our
Roy's
business in
2015.
(11) Represents
income tax
effect of the
adjustments,
on a
jurisdiction
basis, for
the thirteen
and twenty-
six weeks
ended June
26, 2016 and
June 28,
2015,
respectively.
Included in
the
adjustments
for the
thirteen
weeks and
twenty-six
weeks ended
June 26, 2016
is $3.5
million
related to
deferred tax
liabilities
for the
Outback South
Korea sale.
(12) Due to the
GAAP net
loss, the
effect of
dilutive
securities
was excluded
from the
calculation
of GAAP
diluted
(loss)
earnings per
share for the
thirteen
weeks ended
June 26,
2016. For
adjusted
diluted
earnings per
share, the
calculation
includes
dilutive
shares of
3,013 for the
thirteen
weeks ended
June 26,
2016.
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 26, 2016 JUNE 28, 2015 JUNE 26, 2016 JUNE 28, 2015
------------- ------------- ------------- -------------
Labor and other related $ - $(2,671) $ - $(2,671)
Other restaurant operating expense 199 20 (1,771) (116)
Depreciation and amortization 2,286 1,226 3,831 2,492
General and administrative 259 286 2,911 1,888
Provision for impaired assets and restaurant closings 39,972 436 43,083 9,301
Other expense, net - (121) - 1,030
Provision for income taxes 1,525 1,047 (8,177) (2,580)
Loss on defeasance, extinguishment and modification of debt - 2,638 26,580 2,638
--- ----- ------ -----
Net adjustments $44,241 $2,861 $66,457 $11,982
======= ====== ======= =======
TABLE SEVEN
BLOOMIN' BRANDS, INC.
SEGMENT INCOME FROM OPERATIONS NON-GAAP RECONCILIATION
(UNAUDITED)
----------
U.S. Segment THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
-------------------- ----------------------
(dollars in thousands) JUNE 26, 2016 JUNE 28, 2015 JUNE 26, 2016 JUNE 28, 2015
------------- ------------- ------------- -------------
Income from operations $89,010 $96,192 $206,849 $224,460
Operating income margin 9.3% 9.8% 10.3% 11.0%
Adjustments:
Restaurant relocations, remodels and related costs (1) 1,124 122 1,764 1,291
Severance (2) 737 - 1,276 -
Transaction-related expenses (3) 159 - 493 -
Restaurant impairments and closing costs (4) - - 2,224 1,336
Amortization of deferred gains from sale-leaseback transactions (5) (348) - (348) -
---- --- ---- ---
Adjusted income from operations $90,682 $96,314 $212,258 $227,087
------- ------- -------- --------
Adjusted operating income margin 9.5% 9.8% 10.6% 11.1%
International Segment
(dollars in thousands)
(Loss) income from operations $(34,573) $5,727 $(23,224) $14,606
Operating (loss) income margin (28.9)% 4.9% (9.7)% 5.7%
Adjustments:
Asset impairments and related costs (6) 39,677 - 40,023 -
Purchased intangibles amortization (7) 949 1,123 1,809 2,406
Restaurant impairments and closing costs (8) 335 (63) (103) 7,471
--- --- ---- -----
Adjusted income from operations $6,388 $6,787 $18,505 $24,483
------ ------ ------- -------
Adjusted operating income margin 5.3% 5.8% 7.7% 9.5%
(1) Represents
asset
impairment
charges and
accelerated
depreciation
incurred in
connection
with our
relocation
and remodel
programs.
(2) Relates to
severance
expense
incurred
primarily as
a result of
the
relocation of
our Fleming's
operations
center to the
corporate
home office.
(3) Relates to
costs
incurred with
our sale-
leaseback
initiative.
(4) Represents
expenses
incurred for
the Bonefish
Restructuring
in 2016 and
the Domestic
Restructuring
Initiative in
2015.
(5) Represents
amortization
of deferred
gains related
to our sale-
leaseback
initiative.
(6) Represents
asset
impairment
charges and
related costs
associated
with the
decision to
sell Outback
South Korea.
(7) Represents
intangible
amortization
recorded as a
result of the
acquisition
of our Brazil
operations.
(8) Represents
expenses
incurred
primarily for
the
International
Restaurant
Closure
Initiative.
TABLE EIGHT
BLOOMIN' BRANDS, INC.
COMPARATIVE RESTAURANT INFORMATION
(UNAUDITED)
----------
Number of restaurants (at end of the period): MARCH 27, 2016 OPENINGS CLOSURES JUNE 26, 2016
-------------- -------- -------- -------------
U.S.
Outback Steakhouse
Company-owned 649 1 - 650
Franchised 105 1 (1) 105
--- --- --- ---
Total 754 2 (1) 755
--- --- --- ---
Carrabba's Italian Grill
Company-owned 244 - - 244
Franchised 3 - - 3
--- --- --- ---
Total 247 - - 247
--- --- --- ---
Bonefish Grill
Company-owned 205 - (1) 204
Franchised 6 - - 6
--- --- --- ---
Total 211 - (1) 210
--- --- --- ---
Fleming's Prime Steakhouse & Wine Bar
Company-owned 66 - - 66
--- --- --- ---
International
Company-owned
Outback Steakhouse-Brazil (1) 76 2 - 78
Outback Steakhouse-South Korea (2) 74 1 (1) 74
Other 17 1 - 18
Franchised 57 - (5) 52
Total 224 4 (6) 222
--- --- --- ---
System-wide total 1,502 6 (8) 1,500
===== === === =====
(1) The restaurant
counts for
Brazil are
reported as
of May 31,
2016 and
2015,
respectively,
to correspond
with the
balance sheet
dates of this
subsidiary.
(2) Subsequent to
June 26,
2016, we
entered into
an agreement
to sell our
restaurant
locations in
South Korea,
converting
all
restaurants
in that
market to
franchised
locations.
TABLE NINE
BLOOMIN' BRANDS, INC.
COMPARABLE RESTAURANT SALES INFORMATION
(UNAUDITED)
----------
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
-------------------- ----------------------
JUNE 26, 2016 JUNE 28, 2015 JUNE 26, 2016 JUNE 28, 2015
------------- ------------- ------------- -------------
Year over year percentage change:
Comparable restaurant sales (stores open 18 months or more) (1):
U.S.
Outback Steakhouse (2.5)% 4.0% (1.9)% 4.5%
Carrabba's Italian Grill (4.8)% 0.9% (3.3)% 1.4%
Bonefish Grill 0.9% (4.6)% (1.0)% (1.7)%
Fleming's Prime Steakhouse & Wine Bar (0.8)% 3.2% 0.3% 3.1%
Combined U.S. (2.3)% 2.0% (1.9)% 2.9%
International
Outback Steakhouse - Brazil (2) 3.9% 3.4% 6.4% 4.8%
Outback Steakhouse - South Korea 10.8% (11.8)% 1.4% (7.0)%
Traffic:
U.S.
Outback Steakhouse (5.9)% (0.8)% (4.4)% (0.1)%
Carrabba's Italian Grill (4.8)% 1.4% (1.6)% 2.4%
Bonefish Grill (2.8)% (7.8)% (4.0)% (4.8)%
Fleming's Prime Steakhouse & Wine Bar (3.7)% 3.1% (1.2)% 1.9%
Combined U.S. (5.2)% (1.1)% (3.7)% (0.2)%
International
Outback Steakhouse - Brazil (1.5)% (0.7)% (0.4)% 0.3%
Outback Steakhouse - South Korea 20.7% (12.6)% 6.8% (8.3)%
Average check per person increases (decreases) (3):
U.S.
Outback Steakhouse 3.4% 4.8% 2.5% 4.6%
Carrabba's Italian Grill -% (0.5)% (1.7)% (1.0)%
Bonefish Grill 3.7% 3.2% 3.0% 3.1%
Fleming's Prime Steakhouse & Wine Bar 2.9% 0.1% 1.5% 1.2%
Combined U.S. 2.9% 3.1% 1.8% 3.1%
International
Outback Steakhouse - Brazil 6.3% 4.5% 6.7% 4.6%
Outback Steakhouse - South Korea (9.9)% 0.8% (5.4)% 1.3%
(1) Comparable
restaurant
sales exclude
the effect of
fluctuations
in foreign
currency
rates.
Relocated
international
restaurants
closed more
than 30 days
and relocated
U.S.
restaurants
closed more
than 60 days
are excluded
from
comparable
restaurant
sales until
at least 18
months after
reopening.
(2) Includes the
trading day
impact from
calendar
period
reporting of
(0.9%) and
(0.4%) for
the thirteen
weeks ended
June 26, 2016
and June 28,
2015,
respectively
and 0.1% and
(0.1%) for
the twenty-
six weeks
ended June
26, 2016 and
June 28,
2015,
respectively.
(3) Average check
per person
increases
(decreases)
includes the
impact of
menu pricing
changes,
product mix
and
discounts.
Chris Meyer
Group Vice President, IR & Finance
(813) 830-5311
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/bloomin-brands-announces-2016-q2-diluted-eps-of-008-and-adjusted-diluted-eps-of-030-300306096.html
SOURCE Bloomin' Brands, Inc.
