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Bloomin’ Brands Announces 2020 Q1 Financial Results

Company Prices $200 Million Convertible Notes
Expects Sales to Strengthen As Dining Rooms Re-Open

Bloomin’ Brands, Inc. (Nasdaq: BLMN) today announced a business update related to COVID-19 as well as first 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.

Since the beginning of the pandemic and closing of our dining rooms on March 20th, we have leveraged our strong off-premises business. As a result, we have tripled our average off-premises sales per restaurant since the beginning of March. We have begun reopening dining rooms as state and local governments allow. We have 355 restaurant dining rooms opened with limited seating capacity across multiple states as of Thursday evening. Early results have been promising.

As these dining rooms reopen, we are adhering to the strongest of safety measures, including additional sanitation and disinfecting practices, enhanced hand-washing protocols, use of gloves and facial protection of our employees, and we are providing contactless payment options for our customers. In addition, each dining room seating configuration has been modified to adhere to social distancing and reduced capacity standards, and we are leveraging our table management notification system to allow guests to wait in their cars for their table.

Concurrently, we took steps to further strengthen our liquidity position through the issuance of $200 million convertible notes. In addition, we expect our weekly cash burn rate of $6 million to $8 million to improve as dining rooms continue to open. These funds and our reduced burn rate provide us with additional flexibility to navigate economic uncertainty over the medium to long-term.

As it relates to our first quarter results, we were on track to deliver a strong quarter prior to the impact of the pandemic. The strategies to enhance Total Shareholder Return that we outlined on our Q4 earning’s call were working. Through February all of our concepts were positive in sales and traffic. We achieved meaningful expansion of our adjusted operating margins during those eight weeks, and we had begun to see the benefits of our expected $40 million of cost savings that we outlined in February. Once we have successfully navigated the ongoing crisis, we believe that we will be well positioned to build on our early 2020 success and emerge a stronger company.

Convertible Notes Offering

On May 6, 2020, we announced the pricing of a $200 million convertible senior notes offering. In connection with the pricing of the notes, we entered into convertible note hedge and warrant transactions to mitigate future dilution of our common shares. We expect to close the transaction today subject to customary closing conditions.

First Quarter Preliminary Diluted EPS and Adjusted Diluted EPS

The following table reconciles Preliminary Diluted earnings per share attributable to common stockholders to Preliminary Adjusted diluted earnings per share for the first quarter 2020 ("Q1 2020") compared to the first quarter 2019 ("Q1 2019"). EPS information in the following table remains unchanged from the information provided in our May 5, 2020 press release.

 

Q1

 

 

 

2020

 

2019

 

CHANGE

Diluted earnings per share attributable to common stockholders

$

(0.44

)

 

$

0.69

 

 

$

(1.13

)

Adjustments

0.58

 

 

0.06

 

 

0.52

 

Adjusted diluted earnings per share

$

0.14

 

 

$

0.75

 

 

$

(0.61

)

 

 

 

 

 

 

______________

See Preliminary Data and Non-GAAP Measures later in this release.

For additional context, our first quarter adjusted diluted earnings per share results included $16 million of relief pay provided to hourly employees impacted by the closure of our dining rooms.

First Quarter Preliminary Financial Results

(dollars in millions)

Q1 2020

 

Q1 2019

 

CHANGE

Total revenues

$

1,008.3

 

 

$

1,128.1

 

 

(10.6)%

 

 

 

 

 

 

GAAP restaurant-level operating margin

12.1%

 

17.1%

 

(5.0)%

Adjusted restaurant-level operating margin (1)

12.5%

 

17.1%

 

(4.6)%

 

 

 

 

 

 

GAAP operating income margin

(4.1)%

 

7.3%

 

(11.4)%

Adjusted operating income margin (1)

2.7%

 

7.8%

 

(5.1)%

___________________
(1)

See Preliminary Data and Non-GAAP Measures later in this release.

  • The decrease in total revenues was primarily due to: (i) lower U.S. comparable restaurant sales driven by the COVID-19 pandemic, (ii) domestic refranchising, (iii) foreign currency translation and (iv) the decrease in franchise revenues driven by the COVID-19 pandemic, partially offset by the net impact of restaurant openings and closures.
  • GAAP restaurant-level operating margin decreased due to: (i) lower comparable restaurant sales and costs in connection with the COVID-19 pandemic, including relief pay, inventory obsolescence and incremental operating costs, and (ii) commodity and labor inflation.
  • The primary difference between GAAP and Adjusted restaurant-level operating margin is that adjusted restaurant-level operating margin excludes the negative impact of inventory obsolescence and spoilage costs associated with COVID-19.
  • GAAP operating income margin decreased due to: (i) restaurant-level operating margin discussed above, (ii) asset impairment charges related to the COVID-19 pandemic and (iii) the impact of restructuring and transformation initiatives. These costs were excluded from our adjusted operating income margin.

First Quarter Preliminary Comparable Restaurant Sales

Comparable Restaurant Sales information in the following table remains unchanged from the information provided in our May 5, 2020 Press Release.

Comparable restaurant sales (stores open 18 months or more):

EIGHT WEEKS ENDED
FEBRUARY 23, 2020

 

FIVE WEEKS ENDED
MARCH 29, 2020

 

THIRTEEN

WEEKS ENDED
MARCH 29, 2020

U.S.

 

 

 

 

 

Outback Steakhouse

2.2

%

 

(28.1

)%

 

(9.5

)%

Carrabba’s Italian Grill

4.5

%

 

(29.9

)%

 

(8.7

)%

Bonefish Grill

2.0

%

 

(38.6

)%

 

(13.9

)%

Fleming’s Prime Steakhouse & Wine Bar

2.4

%

 

(40.0

)%

 

(13.2

)%

Combined U.S.

2.6

%

 

(31.0

)%

 

(10.4

)%

 

 

 

 

 

 

International

 

 

 

 

 

Outback Steakhouse - Brazil (1)

NM

 

NM

 

6.8

%

_________________

NM

Not meaningful.

(1)

Brazil comparable restaurant sales are on a one-month lag and are presented on a calendar basis. Represents results through February 29, 2020. Brazil’s First Quarter comparable restaurant sales do not include any material impact from the COVID-19 pandemic. Most of our Brazil restaurants are currently open for off-premises only.

Strategic Alternatives Review Update

In November 2019, we announced that we were exploring and evaluating strategic alternatives that have the potential to maximize value for our stockholders. In February 2020, in connection with our year-end earnings release and conference call, we provided an update on that process and discussed certain actions that we planned to take. While we have implemented the 2020 cost savings measures described at the time and remain committed to our plan to support a growth-focused, operations centric organization over the long term, we have suspended further activity with respect to the strategic review process as we prioritize our response to the COVID-19 pandemic. This includes a suspension of discussions with interested parties with respect to our Brazil business.

Conference Call

The Company will host a conference call today, May 8, 2020 at 8:30 AM EST. 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.

Preliminary Data

The unaudited data presented in this release is preliminary, based upon certain management estimates and subject to the completion of our procedures for the preparation and review of our quarterly financial statements. We have not completed our final closing procedures related to our analysis of goodwill, intangible assets and certain other long-lived assets for impairment and the related income tax provision adjustments that may result from completion of such procedures. In addition, estimated cash burn data has been provided to help investors understand and assess the near-term impacts of the COVID-19 pandemic, but is subject to variability and may not be indicative of our results or trends for any full reporting period.

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 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 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 48 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 "Strategic Alternatives Review 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 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; the outcome of our review of strategic alternatives, including the impact on our ongoing business, our stock price and our ability to successfully implement any alternatives that we pursue including our ability to achieve the cost savings described in this release; 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

 

MARCH 29, 2020

 

MARCH 31, 2019

(in thousands, except per share data)

(PRELIMINARY)

 

 

Revenues

 

 

 

Restaurant sales

$

996,237

 

 

$

1,111,642

 

Franchise and other revenues

12,100

 

 

16,489

 

Total revenues

1,008,337

 

 

1,128,131

 

Costs and expenses

 

 

 

Cost of sales

319,693

 

 

352,111

 

Labor and other related

309,269

 

 

319,015

 

Other restaurant operating

246,555

 

 

250,854

 

Depreciation and amortization

48,268

 

 

49,482

 

General and administrative

84,802

 

 

70,589

 

Provision for impaired assets and restaurant closings

41,318

 

 

3,586

 

Total costs and expenses

1,049,905

 

 

1,045,637

 

(Loss) income from operations

(41,568

)

 

82,494

 

Other expense, net

(793

)

 

(168

)

Interest expense, net

(11,708

)

 

(11,181

)

(Loss) income before (Benefit) provision for income taxes

(54,069

)

 

71,145

 

(Benefit) provision for income taxes

(19,655

)

 

5,496

 

Net (loss) income

(34,414

)

 

65,649

 

Less: net income attributable to noncontrolling interests

197

 

 

1,349

 

Net (loss) income attributable to Bloomin’ Brands

(34,611

)

 

64,300

 

Redemption of preferred stock in excess of carrying value

(3,496

)

 

 

Net (loss) income attributable to common stockholders

$

(38,107

)

 

$

64,300

 

 

 

 

 

(Loss) earnings per share attributable to common stockholders:

 

 

 

Basic

$

(0.44

)

 

$

0.70

 

Diluted

$

(0.44

)

 

$

0.69

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

Basic

87,129

 

 

91,415

 

Diluted

87,129

 

 

92,661

 

_________________

Note: The unaudited data presented in this table is preliminary, based upon certain management estimates and subject to the completion of our procedures for the preparation and review of our quarterly financial statements. We have not completed our final closing procedures related to our analysis of goodwill, intangible assets and certain other long-lived assets for impairment and the related income tax provision adjustments that may result from completion of such procedures.

TABLE TWO

BLOOMIN’ BRANDS, INC.

SEGMENT RESULTS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

(dollars in thousands)

MARCH 29, 2020

 

MARCH 31, 2019

U.S. Segment

(PRELIMINARY)

 

 

Revenues

 

 

 

Restaurant sales

$

884,889

 

 

$

1,000,813

 

Franchise and other revenues

9,608

 

 

13,694

 

Total revenues

$

894,497

 

 

$

1,014,507

 

Restaurant-level operating margin

11.5

%

 

16.7

%

Income from operations

$

11,379

 

 

$

113,035

 

Operating income margin

1.3

%

 

11.1

%

International Segment

 

 

 

Revenues

 

 

 

Restaurant sales

$

111,348

 

 

$

110,829

 

Franchise and other revenues

2,492

 

 

2,795

 

Total revenues

$

113,840

 

 

$

113,624

 

Restaurant-level operating margin

18.5

%

 

22.3

%

Income from operations

$

6,787

 

 

$

13,720

 

Operating income margin

6.0

%

 

12.1

%

Reconciliation of Segment Income from Operations to Consolidated (Loss) Income from Operations

 

 

 

Segment income from operations

 

 

 

U.S.

$

11,379

 

 

$

113,035

 

International

6,787

 

 

13,720

 

Total segment income from operations

18,166

 

 

126,755

 

Unallocated corporate operating expense

(59,734

)

 

(44,261

)

Total (loss) income from operations

$

(41,568

)

 

$

82,494

 

_________________

Note: The unaudited data presented in this table is preliminary, based upon certain management estimates and subject to the completion of our procedures for the preparation and review of our quarterly financial statements. We have not completed our final closing procedures related to our analysis of goodwill, intangible assets and certain other long-lived assets for impairment and the related income tax provision adjustments that may result from completion of such procedures.

TABLE THREE

BLOOMIN’ BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

(UNAUDITED)

 

MARCH 29, 2020

 

DECEMBER 29, 2019

(in thousands)

(PRELIMINARY)

 

 

Cash and cash equivalents (1)

$

403,395

 

 

$

67,145

 

Net working capital (deficit) (1)(2)

$

(265,584

)

 

$

(621,553

)

Total assets

$

3,766,601

 

 

$

3,592,683

 

Total debt, net (1)

$

1,418,640

 

 

$

1,048,704

 

Total stockholders’ equity

$

100,143

 

 

$

177,481

 

Common stock outstanding

87,417

 

 

86,946

 

_________________

Note: The unaudited data presented in this table is preliminary, based upon certain management estimates and subject to the completion of our procedures for the preparation and review of our quarterly financial statements. We have not completed our final closing procedures related to our analysis of goodwill, intangible assets and certain other long-lived assets for impairment and the related income tax provision adjustments that may result from completion of such procedures.

(1)

During the thirteen weeks ended March 29, 2020, we borrowed $376.0 million, net of repayments, on our revolving credit facility.

(2)

The change in net working capital (deficit) during the thirteen weeks ended March 29, 2020 is primarily due to cash proceeds from borrowings on our revolving credit facility with the corresponding liability recorded as Long-term debt, net on the Company’s Balance Sheet. 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
YEAR TO DATE

 

MARCH 29, 2020

 

MARCH 31, 2019

 

 

(PRELIMINARY)

 

 

 

Consolidated:

GAAP

 

ADJUSTED (1)

 

GAAP

 

ADJUSTED

 

Restaurant sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

32.1

%

 

31.5

%

 

31.7

%

 

31.7

%

 

0.2

%

Labor and other related

31.0

%

 

31.0

%

 

28.7

%

 

28.7

%

 

(2.3

)%

Other restaurant operating

24.7

%

 

25.0

%

 

22.6

%

 

22.6

%

 

(2.4

)%

 

 

 

 

 

 

 

 

 

 

Restaurant-level operating margin (2)

12.1

%

 

12.5

%

 

17.1

%

 

17.1

%

 

(4.6

)%

 

 

 

 

 

 

 

 

 

 

Segments - Restaurant-level operating margin:

 

 

 

 

 

 

 

 

 

U.S. (2)

11.5

%

 

11.7

%

 

16.7

%

 

16.7

%

 

(5.0

)%

International (2)

18.5

%

 

20.2

%

 

22.3

%

 

22.3

%

 

(2.1

)%

_________________

Note: The unaudited data presented in this table is preliminary, based upon certain management estimates and subject to the completion of our procedures for the preparation and review of our quarterly financial statements. We have not completed our final closing procedures related to our analysis of goodwill, intangible assets and certain other long-lived assets for impairment and the related income tax provision adjustments that may result from completion of such procedures.

(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:

 

(i)

 

Franchise and other revenues, which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income.

 

(ii)

 

Depreciation and amortization which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants.

 

(iii)

 

General and administrative expense which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices.

 

(iv)

 

Asset impairment charges and restaurant closing costs which are not reflective of ongoing restaurant performance in a period.

Restaurant-level Operating Margin Adjustments - Following is a summary of unfavorable (favorable) 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

 

MARCH 29, 2020

(dollars in millions)

(PRELIMINARY)

Restaurant and asset impairments and closing costs

$

2.8

 

Restaurant relocations and related costs

(0.1

)

COVID-19 related costs (1)

(6.2

)

 

$

(3.5

)

_________________
(1)

Adjustments recorded in Cost of sales. Includes $1.8 million of adjustments 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

 

MARCH 29, 2020

 

MARCH 31, 2019

(in thousands, except per share data)

(PRELIMINARY)

 

 

(Loss) income from operations

$

(41,568

)

 

$

82,494

 

Operating (loss) income margin

(4.1

)%

 

7.3

%

Adjustments:

 

 

 

COVID-19 related costs (1)

48,876

 

 

 

Severance and other transformational costs (2)

22,232

 

 

2,855

 

Restaurant relocations and related costs (3)

592

 

 

1,032

 

Legal and other matters

178

 

 

 

Restaurant and asset impairments and closing costs (4)

(2,797

)

 

2,131

 

Total income from operations adjustments

$

69,081

 

 

$

6,018

 

Adjusted income from operations

$

27,513

 

 

$

88,512

 

Adjusted operating income margin

2.7

%

 

7.8

%

 

 

 

 

Net (loss) income attributable to common stockholders

$

(38,107

)

 

$

64,300

 

Adjustments:

 

 

 

Income from operations adjustments

69,081

 

 

6,018

 

Total adjustments, before income taxes

69,081

 

 

6,018

 

Adjustment to provision for income taxes (5)

(21,995

)

 

(819

)

Redemption of preferred stock in excess of carrying value (6)

3,496

 

 

 

Net adjustments

50,582

 

 

5,199

 

Adjusted net income

$

12,475

 

 

$

69,499

 

 

 

 

 

Diluted (loss) earnings per share attributable to common stockholders

$

(0.44

)

 

$

0.69

 

Adjusted diluted earnings per share

$

0.14

 

 

$

0.75

 

 

 

 

 

Basic weighted average common shares outstanding

87,129

 

 

91,415

 

Diluted weighted average common shares outstanding (7)

87,963

 

 

92,661

 

_________________

Note: The unaudited data presented in this table is preliminary, based upon certain management estimates and subject to the completion of our procedures for the preparation and review of our quarterly financial statements. We have not completed our final closing procedures related to our analysis of goodwill, intangible assets and certain other long-lived assets for impairment and the related income tax provision adjustments that may result from completion of such procedures.

(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, 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 buyout gain of $2.8 million in 2020 and asset impairment charges and related costs primarily related to approved closure and restructuring initiatives in 2019.

(5)

 

Represents income tax effect of the adjustments for the periods presented.

(6)

 

Represents consideration paid in excess of the carrying value for the redemption of preferred stock of our Abbraccio subsidiary.

(7)

 

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 March 29, 2020. For adjusted diluted earnings per share, the calculation includes 834 dilutive shares for the thirteen weeks ended March 29, 2020.

Following is a summary of the financial statement line item classification of the net income adjustments:

 

THIRTEEN WEEKS ENDED

(dollars in thousands)

MARCH 29, 2020

 

MARCH 31, 2019

Cost of sales

$

6,182

 

 

$

 

Other restaurant operating

(2,643

)

 

(22

)

Depreciation and amortization

407

 

 

565

 

General and administrative

24,224

 

 

3,255

 

Provision for impaired assets and restaurant closings

40,911

 

 

2,220

 

Provision for income taxes

(21,995

)

 

(819

)

Redemption of preferred stock in excess of carrying value

3,496

 

 

 

Net adjustments

$

50,582

 

 

$

5,199

 

TABLE SIX

BLOOMIN’ BRANDS, INC.

SEGMENT INCOME FROM OPERATIONS NON-GAAP RECONCILIATION

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

(dollars in thousands)

MARCH 29, 2020

 

MARCH 31, 2019

U.S. Segment

(PRELIMINARY)

 

 

Income from operations

$

11,379

 

 

$

113,035

 

Operating income margin

1.3

%

 

11.1

%

Adjustments:

 

 

 

COVID-19 related costs (1)

42,979

 

 

 

Restaurant relocations and related costs (2)

592

 

 

1,032

 

Severance (3)

 

 

700

 

Restaurant and asset impairments and closing costs (4)

(2,797

)

 

1,835

 

Adjusted income from operations

$

52,153

 

 

$

116,602

 

Adjusted operating income margin

5.8

%

 

11.5

%

 

 

 

 

International Segment

 

 

 

Income from operations

$

6,787

 

 

$

13,720

 

Operating income margin

6.0

%

 

12.1

%

Adjustments:

 

 

 

COVID-19 related costs (1)

5,192

 

 

 

Restaurant and asset impairments and closing costs (4)

 

 

296

 

Adjusted income from operations

$

11,979

 

 

$

14,016

 

Adjusted operating income margin

10.5

%

 

12.3

%

_________________

Note: The unaudited data presented in this table is preliminary, based upon certain management estimates and subject to the completion of our procedures for the preparation and review of our quarterly financial statements. We have not completed our final closing procedures related to our analysis of goodwill, intangible assets and certain other long-lived assets for impairment and the related income tax provision adjustments that may result from completion of such procedures.

(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, 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 buyout gain of $2.8 million in 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):

DECEMBER 29, 2019

 

OPENINGS

 

CLOSURES

 

MARCH 29, 2020

U.S.

 

 

 

 

 

 

 

Outback Steakhouse

 

 

 

 

 

 

 

Company-owned

579

 

 

 

 

(4

)

 

575

 

Franchised

145

 

 

 

 

 

 

145

 

Total

724

 

 

 

 

(4

)

 

720

 

Carrabba’s Italian Grill

 

 

 

 

 

 

 

Company-owned

204

 

 

 

 

 

 

204

 

Franchised

21

 

 

 

 

 

 

21

 

Total

225

 

 

 

 

 

 

225

 

Bonefish Grill

 

 

 

 

 

 

 

Company-owned

190

 

 

 

 

 

 

190

 

Franchised

7

 

 

 

 

 

 

7

 

Total

197

 

 

 

 

 

 

197

 

Fleming’s Prime Steakhouse & Wine Bar

 

 

 

 

 

 

 

Company-owned

68

 

 

 

 

(1

)

 

67

 

Other

 

 

 

 

 

 

 

Company-owned

4

 

 

 

 

 

 

4

 

U.S. total

1,218

 

 

 

 

(5

)

 

1,213

 

International

 

 

 

 

 

 

 

Company-owned

 

 

 

 

 

 

 

Outback Steakhouse—Brazil (1)

99

 

 

4

 

 

 

 

103

 

Other

29

 

 

 

 

 

 

29

 

Franchised

 

 

 

 

 

 

 

Outback Steakhouse - South Korea

72

 

 

2

 

 

(2

)

 

72

 

Other

55

 

 

2

 

 

(2

)

 

55

 

International total

255

 

 

8

 

 

(4

)

 

259

 

System-wide total

1,473

 

 

8

 

 

(9

)

 

1,472

 

____________________
(1)

The restaurant counts for Brazil are reported as of November 30, 2019 and February 29, 2020 to correspond with the balance sheet dates of this subsidiary.

 

TABLE EIGHT

BLOOMIN’ BRANDS, INC.

COMPARABLE RESTAURANT SALES INFORMATION

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

MARCH 29, 2020

 

MARCH 31, 2019

Year over year percentage change:

 

 

 

Comparable restaurant sales (stores open 18 months or more):

 

 

 

U.S. (1)

 

 

 

Outback Steakhouse

(9.5

)%

 

3.5

%

Carrabba’s Italian Grill

(8.7

)%

 

0.3

%

Bonefish Grill

(13.9

)%

 

1.9

%

Fleming’s Prime Steakhouse & Wine Bar

(13.2

)%

 

0.6

%

Combined U.S.

(10.4

)%

 

2.4

%

International

 

 

 

Outback Steakhouse - Brazil (2)

6.8

%

 

3.7

%

 

 

 

 

Traffic:

 

 

 

U.S.

 

 

 

Outback Steakhouse

(10.4

)%

 

(0.5

)%

Carrabba’s Italian Grill

(6.2

)%

 

(1.3

)%

Bonefish Grill

(15.1

)%

 

(1.9

)%

Fleming’s Prime Steakhouse & Wine Bar

(13.6

)%

 

(1.6

)%

Combined U.S.

(10.4

)%

 

(0.9

)%

International

 

 

 

Outback Steakhouse - Brazil

8.4

%

 

(2.4

)%

 

 

 

 

Average check per person (3):

 

 

 

U.S.

 

 

 

Outback Steakhouse

0.9

%

 

4.0

%

Carrabba’s Italian Grill

(2.5

)%

 

1.6

%

Bonefish Grill

1.2

%

 

3.8

%

Fleming’s Prime Steakhouse & Wine Bar

0.4

%

 

2.2

%

Combined U.S.

%

 

3.3

%

International

 

 

 

Outback Steakhouse - Brazil

(2.7

)%

 

6.5

%

____________________

(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)

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/20200508005070/en/

Contacts

Mark Graff
Group Vice President, IR & Finance
(813) 830-5311