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Bloomin’ Brands Reports Strengthening Q1 2021 Sales Trends

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·12 min read
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Generating Strong Cash Flow with Enhanced Liquidity Position

Announces 2020 Q4 Financial Results

Provides Selective 2021 Financial Guidance

Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for the fourth quarter 2020 ("Q4 2020") and fiscal year ended December 27, 2020 ("Fiscal Year 2020") compared to the fourth quarter 2019 ("Q4 2019") and fiscal year ended December 29, 2019 ("Fiscal Year 2019").

CEO Comments

"Our priorities and focus remain on taking care of our people and providing a great and safe experience for guests in the restaurant or in the convenience of their home," said David Deno, Chief Executive Officer. "The fourth quarter showed our continued resilience in navigating through a rapidly changing environment. We are making great progress across key initiatives to improve margins, increase cash flow, and pay down debt, while taking market share. Thus far in 2021 we have seen sales momentum and volume increases relative to Q4 with U.S. comp sales of (12.9)% through the first seven weeks of the fiscal year."

Diluted EPS and Adjusted Diluted EPS

The following table reconciles Diluted (loss) earnings per share attributable to common stockholders to Adjusted diluted earnings (loss) per share for the periods indicated:

Q4

FISCAL YEAR

2020

2019

CHANGE

2020

2019

CHANGE

Diluted (loss) earnings per share attributable to common stockholders

$

(0.16

)

$

0.32

$

(0.48

)

$

(1.85

)

$

1.45

$

(3.30

)

Adjustments (1)

0.18

0.18

1.16

0.09

1.07

Adjusted diluted earnings (loss) per share (1)

$

0.02

$

0.32

$

(0.30

)

$

(0.69

)

$

1.54

$

(2.23

)

___________________

(1) See Non-GAAP Measures later in this release.

Fourth Quarter Financial Results

(dollars in millions)

Q4 2020

Q4 2019

CHANGE

Total revenues

$

812.5

$

1,022.2

(20.5

)%

GAAP restaurant-level operating margin

11.8

%

14.4

%

(2.6

)%

Adjusted restaurant-level operating margin (1)

12.4

%

13.9

%

(1.5

)%

GAAP operating (loss) income margin

(0.9

)%

4.2

%

(5.1

)%

Adjusted operating income margin (1)

1.3

%

4.2

%

(2.9

)%

___________________

(1) See Non-GAAP Measures later in this release.

  • The decrease in Total revenues was primarily due to: (i) significantly lower comparable restaurant sales and franchise revenues principally attributable to the COVID-19 pandemic, (ii) the effect of foreign currency translation of the Brazil Real relative to the U.S. dollar and (iii) the net impact of restaurant closures and openings.

  • Restaurant-level operating margin decreased due to: (i) significantly lower comparable restaurant sales and costs incurred in connection with the COVID-19 pandemic, including incremental delivery related costs and (ii) higher labor costs. These decreases were partially offset by: (i) reduced advertising expense, (ii) a reduction in prep labor hours and (iii) cost savings from waste reduction initiatives. COVID-19 related charges are excluded from Adjusted restaurant-level operating margin.

  • GAAP operating (loss) income margin decreased due to: (i) a decline in restaurant-level operating margin discussed above, (ii) sales deleveraging in connection with the COVID-19 pandemic across general and administrative expense, depreciation and amortization and (iii) asset impairment charges related to the COVID-19 pandemic. COVID-19 related charges are excluded from Adjusted operating income margin.

Fourth Quarter Comparable Restaurant Sales

THIRTEEN WEEKS ENDED DECEMBER 27, 2020

COMPANY-OWNED

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

U.S.

Outback Steakhouse

(15.2)

%

Carrabba’s Italian Grill

(11.4)

%

Bonefish Grill

(27.1)

%

Fleming’s Prime Steakhouse & Wine Bar

(29.7)

%

Combined U.S.

(17.7)

%

International

Outback Steakhouse - Brazil

(14.8)

%

Liquidity Update and Recent Sales Results

As of this morning, our total available liquidity was $675 million. Our liquidity position has improved over the last several weeks due to increased sales performance, holiday gift card sales and working capital inflows.

As of February 14, 2021, approximately 99% of our U.S. restaurants are open with limited in-restaurant dining capacity (vs. 85% as of December 27, 2020) in accordance with local mandates.

The following table includes quarter-to-date U.S. company-owned comparable restaurant sales for the seven-week period ended February 14, 2021:

SEVEN WEEKS ENDED FEBRUARY 14, 2021

COMPANY-OWNED (1)

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

Outback Steakhouse

(10.8)

%

Carrabba’s Italian Grill

(6.1)

%

Bonefish Grill

(21.3)

%

Fleming’s Prime Steakhouse & Wine Bar

(26.1)

%

Combined U.S.

(12.9)

%

_________________

(1) Includes comparable restaurant sales for the seven-week period December 28, 2020 through February 14, 2021.

2021 Financial Outlook

The Company remains committed to making decisions to achieve its long-term growth framework and maximize shareholder value. However, ongoing uncertainties related to the COVID-19 pandemic and evolving in-restaurant dining capacity restrictions across the country have made it difficult to forecast sales. Despite this uncertainty, we are focused on the following initiatives to emerge a better, stronger, operations-focused company:

  • Pursue previously announced transformational cost savings initiatives representing $40 million over two years. We achieved $25 million of these cost savings in 2020 and expect approximately $15 million of these savings to be realized in 2021

  • Capitalize on additional margin opportunities learned during the pandemic

  • Prioritize capital allocation towards debt pay down while maintaining flexibility to reinvest back in the business

The following table presents our expectations for selected fiscal 2021 financial reporting and operating results:

Selected Financial Data:

2021 Guidance (1)

Commodity inflation

Flat

Labor inflation

3.0% - 3.5%

General and administrative expenses

$225M - $230M

Depreciation and amortization

$165M - $175M

Capital expenditures

$170M - $185M

Number of new system-wide restaurants

20 - 25

_________________

(1) This 2021 guidance excludes the effects of any prospective legislative and regulatory changes.

Conference Call

The Company will host a conference call today, February 18, 2021 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.

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 (loss) from operations and the corresponding margin, (iii) Adjusted net income (loss), (iv) Adjusted diluted earnings (loss) per share, (v) Adjusted segment restaurant-level operating margin and (vi) Adjusted segment income (loss) 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, six and seven included later in this release for descriptions of the actual adjustments made in the current period and the corresponding prior period.

About Bloomin’ Brands, Inc.

Bloomin’ Brands, Inc. is one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. The Company has four founder-inspired brands: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. The Company operates more than 1,450 restaurants in 47 states, 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 heading "CEO Comments" 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: consumer reaction to public health and food safety issues; the effects of the COVID-19 pandemic and uncertainties about its depth and duration, as well as the impacts to economic conditions and consumer behavior, including, among others: the inability of workers, including delivery drivers, to work due to illness, quarantine, or government mandates, temporary restaurant closures and capacity restrictions due to reduced workforces or government mandates, the unemployment rate, the extent, availability and effectiveness of any COVID-19 stimulus packages or loan programs, the ability of our franchisees to operate their restaurants during the pandemic and pay royalties, and trends in consumer behavior and spending during and after the end of the pandemic; 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

FISCAL YEAR ENDED

(in thousands, except per share data)

DECEMBER 27,
2020

DECEMBER 29,
2019

DECEMBER 27,
2020

DECEMBER 29,
2019

Revenues

Restaurant sales

$

805,651

$

1,005,869

$

3,144,636

$

4,075,014

Franchise and other revenues

6,854

16,315

25,925

64,375

Total revenues

812,505

1,022,184

3,170,561

4,139,389

Costs and expenses

Food and beverage costs

251,704

312,659

982,702

1,277,824

Labor and other related

243,628

298,509

1,005,295

1,207,289

Other restaurant operating

214,864

249,930

846,566

982,051

Depreciation and amortization

42,792

49,615

180,261

196,811

General and administrative

56,624

66,125

254,356

275,239

Provision for impaired assets and restaurant closings

10,131

2,168

76,354

9,085

Total costs and expenses

819,743

979,006

3,345,534

3,948,299

(Loss) income from operations

(7,238

)

43,178

(174,973

)

191,090

Loss on modification of debt

(237

)

Other income (expense), net

342

2

131

(143

)

Interest expense, net

(17,795

)

(12,372

)

(64,442

)

(49,257

)

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

(24,691

)

30,808

(239,521

)

141,690

(Benefit) provision for income taxes

(10,516

)

1,522

(80,726

)

7,573

Net (loss) income

(14,175

)

29,286

(158,795

)

134,117

Less: net income (loss) attributable to noncontrolling interests

36

1,282

(80

)

3,544

Net (loss) income attributable to Bloomin’ Brands

(14,211

)

28,004

(158,715

)

130,573

Redemption of preferred stock in excess of carrying value

(3,496

)

Net (loss) income attributable to common stockholders

$

(14,211

)

$

28,004

$

(162,211

)

$

130,573

(Loss) earnings per share attributable to common stockholders:

Basic

$

(0.16

)

$

0.32

$

(1.85

)

$

1.47

Diluted

$

(0.16

)

$

0.32

$

(1.85

)

$

1.45

Weighted average common shares outstanding:

Basic

87,689

86,903

87,468

88,839

Diluted

87,689

88,188

87,468

89,777

TABLE TWO

BLOOMIN’ BRANDS, INC.

SEGMENT RESULTS

(UNAUDITED)

(dollars in thousands)

FISCAL YEAR ENDED

U.S. Segment

DECEMBER 27,
2020

DECEMBER 29,
2019

DECEMBER 27,
2020

DECEMBER 29,
2019

Revenues

Restaurant sales

$

728,485

$

897,486

$

2,869,547

$

3,634,668

Franchise and other revenues

3,742

13,262

15,995

53,250

Total revenues

$

732,227

$

910,748

$

2,885,542

$

3,687,918

Restaurant-level operating margin

11.1

%

13.4

%

9.8

%

14.2

%

Income (loss) from operations

$

20,338

$

69,499

$

(1,630

)

$

311,666

Operating income (loss) margin

2.8

%

7.6

%

(0.1

)%

8.5

%

International Segment

Revenues

Restaurant sales

$

77,166

$

108,383

$

275,089

$

440,346

Franchise and other revenues

3,112

3,053

9,930

11,125

Total revenues

$

80,278

$

111,436

$

285,019

$

451,471

Restaurant-level operating margin

14.9

%

21.9

%

8.3

%

20.3

%

Income (loss) from operations

$

4,730

$

13,249

$

(13,479

)

$

44,428

Operating income (loss) margin

5.9

%

11.9

%

(4.7

)%

9.8

%

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

Segment income (loss) from operations

U.S.

$

20,338

$

69,499

$

(1,630

)

$

311,666

International

4,730

13,249

(13,479

)

44,428

Total segment income (loss) from operations

25,068

82,748

(15,109

)

356,094

Unallocated corporate operating expense

(32,306

)

(39,570

)

(159,864

)

(165,004

)

Total (loss) income from operations

$

(7,238

)

$

43,178

$

(174,973

)

$

191,090

TABLE THREE

BLOOMIN’ BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

(UNAUDITED)

(in thousands)

DECEMBER 27, 2020

DECEMBER 29, 2019

Cash and cash equivalents

$

109,980

$

67,145

Net working capital (deficit) (1)

$

(626,250

)

$

(621,553

)

Total assets

$

3,362,107

$

3,592,683

Total debt, net

$

1,036,480

$

1,048,704

Total stockholders’ equity

$

10,957

$

177,481

Common stock outstanding

87,856

86,946

_________________

(1)

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

FAVORABLE
(UNFAVORABLE)
CHANGE IN ADJUSTED

QUARTER TO DATE

DECEMBER 27, 2020

DECEMBER 29, 2019

Consolidated:

GAAP

ADJUSTED (1)

GAAP

ADJUSTED (1)

Restaurant sales

100.0

%

100.0

%

100.0

%

100.0

%

Food and beverage costs

31.2

%

30.8

%

31.1

%

31.4

%

0.6

%

Labor and other related

30.2

%

30.2

%

29.7

%

29.7

%

(0.5

)%

Other restaurant operating

26.7

%

26.6

%

24.8

%

25.0

%

(1.6

)%

Restaurant-level operating margin (2)

11.8

%

12.4

%

14.4

%

13.9

%

(1.5

)%

Segments - Restaurant-level operating margin:

U.S. (2)

11.1

%

11.7

%

13.4

%

13.4

%

(1.7

)%

International (2)

14.9

%

14.9

%

21.9

%

17.7

%

(2.8

)%

FISCAL YEAR ENDED

FAVORABLE
(UNFAVORABLE)
CHANGE IN ADJUSTED

YEAR TO DATE

DECEMBER 27, 2020

DECEMBER 29, 2019

Consolidated:

GAAP

ADJUSTED (1)

GAAP

ADJUSTED (1)

Restaurant sales

100.0

%

100.0

%

100.0

%

100.0

%

Food and beverage costs

31.3

%

30.9

%

31.4

%

31.4

%

0.5

%

Labor and other related

32.0

%

32.0

%

29.6

%

29.6

%

(2.4

)%

Other restaurant operating

26.9

%

26.9

%

24.1

%

24.2

%

(2.7

)%

Restaurant-level operating margin (2)

9.9

%

10.2

%

14.9

%

14.7

%

(4.5

)%

Segments - Restaurant-level operating margin:

U.S. (2)

9.8

%

10.2

%

14.2

%

14.1

%

(3.9

)%

International (2)

8.3

%

9.0

%

20.3

%

19.3

%

(10.3

)%

_________________

(1)

The table set forth below titled "Restaurant-level Operating Margin Adjustments" provides additional information regarding the adjustments for each period presented.

(2)

The following categories of our revenue and operating expenses are not included in restaurant-level operating margin because we do not consider them reflective of operating performance at the restaurant-level within a period:

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

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

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

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

Restaurant-level Operating Margin Adjustments - Following is a summary of unfavorable (favorable) adjusted restaurant-level operating margin adjustments recorded in Other restaurant operating expense (unless otherwise noted below) for the following activities, as described in table six of this release:

THIRTEEN WEEKS ENDED

FISCAL YEAR ENDED

(dollars in millions)

DECEMBER 27,
2020

DECEMBER 29,
2019

DECEMBER 27,
2020

DECEMBER 29,
2019

COVID-19 related costs (1)

$

(4.5

)

$

$

(14.3

)

$

Restaurant and asset impairments and closing costs

0.3

2.8

4.3

Restaurant relocations and related costs

(0.2

)

(0.1

)

(0.6

)

Legal and other matters (2)

4.6

4.6

$

(4.5

)

$

4.7

$

(11.6

)

$

8.3

_________________

(1)

Includes $3.7 million and $11.0 million of adjustments recorded in Food and beverage costs during the thirteen weeks and fiscal year ended December 27, 2020, respectively, including $2.0 million of adjustments recorded in the international segment during fiscal year ended December 27, 2020. All other adjustments were recorded within the U.S. segment.

(2)

Includes adjustments of $2.7 million and $1.9 million recorded in Food and beverage costs and Other restaurant operating expense, respectively, within the international segment.

TABLE FIVE

BLOOMIN’ BRANDS, INC.

RESTAURANT-LEVEL OPERATING MARGIN RECONCILIATIONS

(UNAUDITED)

Consolidated

THIRTEEN WEEKS ENDED

FISCAL YEAR ENDED

(dollars in thousands)

DECEMBER 27,
2020

DECEMBER 29,
2019

DECEMBER 27,
2020

DECEMBER 29,
2019

(Loss) income from operations

$

(7,238

)

$

43,178

$

(174,973

)

$

191,090

Operating (loss) income margin

(0.9

)%

4.2

%

(5.5

)%

4.6

%

Less:

Franchise and other revenues

6,854

16,315

25,925

64,375

Plus:

Depreciation and amortization

42,792

49,615

180,261

196,811

General and administrative

56,624

66,125

254,356

275,239

Provision for impaired assets and restaurant closings

10,131

2,168

76,354

9,085

Restaurant-level operating income

$

95,455

$

144,771

$

310,073

$

607,850

Restaurant-level operating margin

11.8

%

14.4

%

9.9

%

14.9

%

U.S.

THIRTEEN WEEKS ENDED

FISCAL YEAR ENDED

(dollars in thousands)

DECEMBER 27,
2020

DECEMBER 29,
2019

DECEMBER 27,
2020

DECEMBER 29,
2019

Income (loss) from operations

$

20,338

$

69,499

$

(1,630

)

$

311,666

Operating income (loss) margin

2.8

%

7.6

%

(0.1

)%

8.5

%

Less:

Franchise and other revenues

3,742

13,262

15,995

53,250

Plus:

Depreciation and amortization

34,293

38,510

144,298

152,882

General and administrative

19,581

24,296

88,536

101,374

Provision for impaired assets and restaurant closings

10,098

1,200

66,487

4,703

Restaurant-level operating income

$

80,568

$

120,243

$

281,696

$

517,375

Restaurant-level operating margin

11.1

%

13.4

%

9.8

%

14.2

%

International

THIRTEEN WEEKS ENDED

FISCAL YEAR ENDED

(dollars in thousands)

DECEMBER 27,
2020

DECEMBER 29,
2019

DECEMBER 27,
2020

DECEMBER 29,
2019

Income (loss) from operations

$

4,730

$

13,249

$

(13,479

)

$

44,428

Operating income (loss) margin

5.9

%

11.9

%

(4.7

)%

9.8

%

Less:

Franchise and other revenues

3,112

3,053

9,930

11,125

Plus:

Depreciation and amortization

5,408

7,085

23,722

27,491

General and administrative

4,503

6,229

18,916

26,540

Provision for impaired assets and restaurant closings

243

3,640

2,083

Restaurant-level operating income

$

11,529

$

23,753

$

22,869

$

89,417

Restaurant-level operating margin

14.9

%

21.9

%

8.3

%

20.3

%

TABLE SIX

BLOOMIN’ BRANDS, INC.

(LOSS) INCOME FROM OPERATIONS, NET (LOSS) INCOME AND DILUTED (LOSS) EARNINGS PER SHARE NON-GAAP RECONCILIATIONS

(UNAUDITED)

THIRTEEN WEEKS ENDED

FISCAL YEAR ENDED

(in thousands, except per share data)

DECEMBER 27,
2020

DECEMBER 29,
2019

DECEMBER 27,
2020

DECEMBER 29,
2019

(Loss) income from operations

$

(7,238

)

$

43,178

$

(174,973

)

$

191,090

Operating (loss) income margin

(0.9

)%

4.2

%

(5.5

)%

4.6

%

Adjustments:

COVID-19 related costs (1)

14,593

93,811

Severance and other transformational costs (2)

3,557

32,404

5,511

Restaurant relocations and related costs (3)

747

592

3,208

Legal and other matters (4)

(3,811

)

178

(2,996

)

Restaurant and asset impairments and closing costs (5)

2,452

(2,797

)

3,550

Total income (loss) from operations adjustments

$

18,150

$

(612

)

$

124,188

$

9,273

Adjusted income (loss) from operations

$

10,912

$

42,566

$

(50,785

)

$

200,363

Adjusted operating income (loss) margin

1.3

%

4.2

%

(1.6

)%

4.8

%

Net (loss) income attributable to common stockholders

$

(14,211

)

$

28,004

$

(162,211

)

$

130,573

Adjustments:

Income (loss) from operations adjustments

18,150

(612

)

124,188

9,273

Amortization of debt discount (6)

2,489

6,275

Total adjustments, before income taxes

20,639

(612

)

130,463

9,273

Adjustment to provision for income taxes (7)

(4,497

)

440

(32,526

)

(1,263

)

Redemption of preferred stock in excess of carrying value (8)

3,496

Net adjustments

16,142

(172

)

101,433

8,010

Adjusted net income (loss)

$

1,931

$

27,832

$

(60,778

)

$

138,583

Diluted (loss) earnings per share attributable to common stockholders (9)

$

(0.16

)

$

0.32

$

(1.85

)

$

1.45

Adjusted diluted earnings (loss) per share (9)

$

0.02

$

0.32

$

(0.69

)

$

1.54

Diluted weighted average common shares outstanding (9)

88,393

88,188

87,468

89,777

_________________

(1)

Costs incurred in connection with the economic impact of the COVID-19 pandemic, primarily consisting of fixed asset and right-of-use asset impairments, restructuring charges, inventory obsolescence and spoilage, contingent lease liabilities and current expected credit losses.

(2)

Severance, professional fees and other costs incurred as a result of transformational and restructuring activities.

(3)

Asset impairment charges and accelerated depreciation incurred in connection with our relocation program.

(4)

For 2019, includes the recognition of certain value-added tax credits in Brazil of $4.6 million related to prior years, offset by fees and expenses related to certain legal matters.

(5)

Asset impairment charges and related costs during 2019 primarily related to approved closure and restructuring initiatives and the restructuring of certain international markets. Amount also includes a lease termination gain of $2.8 million during 2020 and gains on the sale of certain surplus properties of $3.8 million during 2019.

(6)

Amortization of the debt discount related to the issuance of convertible senior notes.

(7)

Income tax effect of the adjustments for the periods presented.

(8)

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

(9)

Due to the GAAP net loss, the effect of dilutive securities was excluded from the calculation of GAAP diluted loss per share for the thirteen weeks and fiscal year ended December 27, 2020. For adjusted diluted earnings per share, the calculation includes dilutive shares of 475,815 and 228,356 related to the diluted effect of stock-based compensation and outstanding warrants, respectively, for the thirteen weeks ended December 27, 2020. However, we exclude from our adjusted diluted shares outstanding calculation the dilutive impact of the convertible notes based on the bond hedge contracts in place that will deliver shares to offset the dilution.

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

THIRTEEN WEEKS ENDED

FISCAL YEAR ENDED

(dollars in thousands)

DECEMBER 27,
2020

DECEMBER 29,
2019

DECEMBER 27,
2020

DECEMBER 29,
2019

Food and beverage costs

$

3,703

$

(2,683

)

$

11,048

$

(2,683

)

Other restaurant operating

752

(1,982

)

576

(5,624

)

Depreciation and amortization

593

407

2,376

General and administrative

3,652

1,561

35,708

8,667

Provision for impaired assets and restaurant closings

10,043

1,899

76,449

6,537

Interest expense, net

2,489

6,275

(Benefit) provision for income taxes

(4,497

)

440

(32,526

)

(1,263

)

Redemption of preferred stock in excess of carrying value

3,496

Net adjustments

$

16,142

$

(172

)

$

101,433

$

8,010

TABLE SEVEN

BLOOMIN’ BRANDS, INC.

SEGMENT INCOME (LOSS) FROM OPERATIONS NON-GAAP RECONCILIATION

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

FISCAL YEAR ENDED

U.S. Segment

DECEMBER 27,
2020

DECEMBER 29,
2019

DECEMBER 27,
2020

DECEMBER 29,
2019

Income (loss) from operations

$

20,338

$

69,499

$

(1,630

)

$

311,666

Operating income (loss) margin

2.8

%

7.6

%

(0.1

)%

8.5

%

Adjustments:

COVID-19 related costs (1)

14,593

87,377

Restaurant relocations and related costs (2)

748

592

3,209

Severance (3)

759

Restaurant and asset impairments and closing costs (4)

1,484

(2,797

)

401

Adjusted income from operations

$

34,931

$

71,731

$

83,542

$

316,035

Adjusted operating income margin

4.8

%

7.9

%

2.9

%

8.6

%

International Segment

Income (loss) from operations

$

4,730

$

13,249

$

(13,479

)

$

44,428

Operating income (loss) margin

5.9

%

11.9

%

(4.7

)%

9.8

%

Adjustments:

COVID-19 related costs (1)

5,651

Restaurant and asset impairments and closing costs (4)

242

2,422

Legal and other matters (5)

(4,583

)

(4,583

)

Adjusted income (loss) from operations

$

4,730

$

8,908

$

(7,828

)

$

42,267

Adjusted operating income (loss) margin

5.9

%

8.0

%

(2.7

)%

9.4

%

_________________

(1)

Costs incurred in connection with the economic impact of the COVID-19 pandemic, primarily consisting of fixed asset and right-of-use asset impairments, restructuring charges, inventory obsolescence and spoilage, contingent lease liabilities and current expected credit losses.

(2)

Asset impairment charges and accelerated depreciation incurred in connection with our relocation program.

(3)

Severance costs incurred as a result of restructuring activities.

(4)

Includes a lease termination gain of $2.8 million within the U.S. segment during 2020 and asset impairment charges and related costs primarily related to approved closure and restructuring initiatives during 2019. Amount also includes gains on the sale of certain surplus properties of $3.8 million within the U.S. segment during 2019.

(5)

Amount includes the recognition of certain value-added tax credits in Brazil of $4.6 million in Q4 2019 related to prior years.

TABLE EIGHT

BLOOMIN’ BRANDS, INC.

COMPARATIVE RESTAURANT INFORMATION

(UNAUDITED)

Number of restaurants (at end of the period):

SEPTEMBER 27, 2020

OPENINGS

CLOSURES

DECEMBER 27, 2020

U.S.:

Outback Steakhouse

Outback Steakhouse—Company-owned

567

2

(1)

568

Franchised

140

(2)

138

Total

707

2

(3)

706

Carrabba’s Italian Grill

Company-owned

199

199

Franchised

21

21

Total

220

220

Bonefish Grill

Company-owned

181

(1)

180

Franchised

7

7

Total

188

(1)

187

Fleming’s Prime Steakhouse and Wine Bar

Company-owned

65

(2)

63

Other

Company-owned (1)

5

5

U.S. total

1,185

2

(6)

1,181

International:

Company-owned

Outback Steakhouse - Brazil (2)

104

5

109

Other (3)

31

2

33

Franchised

Outback Steakhouse—South Korea (3)

88

8

(1)

95

Other (1)

56

1

(1)

56

International total

279

16

(2)

293

System-wide total

1,464

18

(8)

1,474

____________________

(1)

U.S. Company-owned and International Franchised Other each include three fast-casual Aussie Grill locations as of December 27, 2020.

(2)

The restaurant counts for Brazil are reported as of August 31, 2020 and November 30, 2020 to correspond with the balance sheet dates of this subsidiary.

(3)

As of December 27, 2020, the Company had 20 international dark kitchens that offer delivery only. One of these locations was included within Company-owned Other and 19 were included in Franchised Outback Steakhouse - South Korea.

TABLE NINE

BLOOMIN’ BRANDS, INC.

COMPARABLE RESTAURANT SALES INFORMATION

(UNAUDITED)

THIRTEEN WEEKS ENDED

FISCAL YEAR ENDED

DECEMBER 27,
2020

DECEMBER 29,
2019

DECEMBER 27,
2020

DECEMBER 29,
2019

Year over year percentage change:

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

U.S. (1)

Outback Steakhouse

(15.2

)%

2.7

%

(16.9

)%

2.0

%

Carrabba’s Italian Grill

(11.4

)%

1.4

%

(16.4

)%

0.1

%

Bonefish Grill

(27.1

)%

0.5

%

(30.1

)%

0.1

%

Fleming’s Prime Steakhouse & Wine Bar

(29.7

)%

0.9

%

(29.5

)%

0.7

%

Combined U.S.

(17.7

)%

1.9

%

(19.9

)%

1.2

%

International

Outback Steakhouse - Brazil (2)

(14.8

)%

4.9

%

(31.4

)%

5.8

%

Traffic:

U.S.

Outback Steakhouse

(16.1

)%

0.6

%

(17.6

)%

(0.7

)%

Carrabba’s Italian Grill

(13.2

)%

3.1

%

(14.6

)%

0.2

%

Bonefish Grill (3)

(22.0

)%

(0.2

)%

(20.0

)%

(1.7

)%

Fleming’s Prime Steakhouse & Wine Bar

(27.8

)%

(0.3

)%

(26.7

)%

0.1

%

Combined U.S. (3)

(16.6

)%

0.9

%

(17.6

)%

(0.6

)%

International

Outback Steakhouse - Brazil

(9.0

)%

8.2

%

(21.5

)%

3.9

%

Average check per person (4):

U.S.

Outback Steakhouse

0.9

%

2.1

%

0.7

%

2.7

%

Carrabba’s Italian Grill

1.8

%

(1.7

)%

(1.8

)%

(0.1

)%

Bonefish Grill

(5.1

)%

0.7

%

(10.1

)%

1.8

%

Fleming’s Prime Steakhouse & Wine Bar

(1.9

)%

1.2

%

(2.8

)%

0.6

%

Combined U.S.

(1.1

)%

1.0

%

(2.3

)%

1.8

%

International

Outback Steakhouse - Brazil

(5.9

)%

(3.3

)%

(9.9

)%

1.8

%

____________________

(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)

During 2020, Bonefish Grill replaced guest count with entrée count to measure restaurant traffic. Bonefish Grill and Combined U.S. traffic for 2020 was calculated using the entrée count methodology for Bonefish Grill as if the new methodology was in effect at the start of the fiscal year.

(4)

Average check per person includes the impact of menu pricing changes, product mix and discounts.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210218005267/en/

Contacts

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