-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KnCaygxrcC/s5B/+rlzwhHFLN9KaHm48Hhc3PAPx0zpsGY5J+SZJjrB9n12Xxocz mo5pW7qMlBasl0GfrAG/XA== 0000703351-02-000029.txt : 20021108 0000703351-02-000029.hdr.sgml : 20021108 20021108152905 ACCESSION NUMBER: 0000703351-02-000029 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020925 FILED AS OF DATE: 20021108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRINKER INTERNATIONAL INC CENTRAL INDEX KEY: 0000703351 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 751914582 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10275 FILM NUMBER: 02814176 BUSINESS ADDRESS: STREET 1: 6820 LBJ FREEWAY CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 9729809917 MAIL ADDRESS: STREET 1: 6820 LBJ FREEWAY CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: CHILIS INC DATE OF NAME CHANGE: 19910528 10-Q 1 form10q1q03.txt FORM 10Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 25, 2002 Commission File Number 1-10275 BRINKER INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) DELAWARE 75-1914582 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6820 LBJ FREEWAY, DALLAS, TEXAS 75240 (Address of principal executive offices) (Zip Code) (972) 980-9917 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _____ Number of shares of common stock of registrant outstanding at September 25, 2002: 96,865,910 BRINKER INTERNATIONAL, INC. INDEX Part I - Financial Information Page Item 1. Financial Statements Consolidated Balance Sheets - September 25, 2002 (Unaudited) and June 26, 2002 3 Consolidated Statements of Income (Unaudited) - Thirteen-week periods ended September 25, 2002 and September 26, 2001 4 Consolidated Statements of Cash Flows (Unaudited) - Thirteen-week periods ended September 25, 2002 and September 26, 2001 5 Notes to Consolidated Financial Statements (Unaudited) 6 - 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 - 12 Item 3. Quantitative and Qualitative Disclosures About Market Risk 12 Item 4. Controls and Procedures 12 Part II - Other Information Item 6. Exhibits and Reports on Form 8-K 15 Signatures 16 Certifications 17 - 19 PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS BRINKER INTERNATIONAL, INC. Consolidated Balance Sheets (In thousands, except per share amounts) September 25, June 26, 2002 2002 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 10,992 $ 10,091 Accounts receivable 27,557 22,613 Inventories 24,037 25,190 Prepaid expenses and other 66,960 66,727 Income taxes receivable - 15,673 Deferred income taxes 749 1,660 Total current assets 130,295 141,954 Property and Equipment, at Cost: Land 260,721 254,000 Buildings and leasehold improvements 1,123,954 1,091,434 Furniture and equipment 644,941 635,403 Construction-in-progress 70,025 57,015 2,099,641 2,037,852 Less accumulated depreciation and (702,696) (682,435) amortization Net property and equipment 1,396,945 1,355,417 Other Assets: Goodwill 193,899 193,899 Other 95,682 92,066 Total other assets 289,581 285,965 Total assets $1,816,821 $1,783,336 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current installments of long-term debt $ 17,334 $ 17,292 Accounts payable 104,207 118,418 Accrued liabilities 139,689 166,510 Income taxes payable 25,521 - Total current liabilities 286,751 302,220 Long-term debt, less current installments 439,246 426,679 Deferred income taxes 19,458 17,295 Other liabilities 68,146 60,046 Shareholders' Equity: Common stock - 250,000,000 authorized shares; $0.10 par value; 117,499,541 shares issued and 96,865,910 shares outstanding at September 25, 2002, and 117,500,054 shares issued and 97,440,391 shares outstanding at June 26, 2002 11,750 11,750 Additional paid-in capital 332,111 330,191 Retained earnings 999,705 954,701 1,343,566 1,296,642 Less: Treasury stock, at cost (20,633,631 shares at September 25, 2002 and 20,059,663 shares (337,107) (317,674) at June 26, 2002) Unearned compensation (3,239) (1,872) Total shareholders' equity 1,003,220 977,096 Total liabilities and shareholders' equity $1,816,821 $1,783,336 See accompanying notes to consolidated financial statements.
BRINKER INTERNATIONAL, INC. Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited) Thirteen-Week Periods Ended September 25, September 26, 2002 2001 Revenues $ 773,892 $ 672,655 Operating Costs and Expenses: Cost of sales 210,426 185,824 Restaurant expenses 423,606 366,820 Depreciation and amortization 37,157 28,186 General and administrative 32,545 27,559 Total operating costs and expenses 703,734 608,389 Operating income 70,158 64,266 Interest expense 3,971 3,784 Other, net (1,590) (213) Income before provision for income taxes 67,777 60,695 Provision for income taxes 22,773 21,061 Net income $ 45,004 $ 39,634 Basic net income per share $ 0.46 $ 0.40 Diluted net income per share $ 0.45 $ 0.39 Basic weighted average shares outstanding 97,177 98,963 Diluted weighted average shares outstanding 99,235 101,572 See accompanying notes to consolidated financial statements.
BRINKER INTERNATIONAL, INC. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Thirteen-Week Periods Ended September 25, September 26, 2002 2001 Cash Flows from Operating Activities: Net income $ 45,004 $ 39,634 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 37,157 28,186 Amortization of deferred costs 3,271 348 Deferred income taxes 3,074 2,844 Changes in assets and liabilities: Receivables (5,066) 4,149 Inventories 1,153 1,263 Prepaid expenses and other 1,139 (519) Other assets 5,086 5,467 Current income taxes 41,194 16,357 Accounts payable (14,211) (9,957) Accrued liabilities (24,553) (8,551) Other liabilities (488) 1,157 Net cash provided by operating activities 92,760 80,378 Cash Flows from Investing Activities: Payments for property and equipment (79,989) (49,162) Payments for purchases of restaurants - (6,580) Investment in equity method investees - (12,250) Net payments from (advances to) affiliates 122 (675) Net cash used in investing activities (79,867) (68,667) Cash Flows from Financing Activities: Net borrowings on credit facilities 10,045 26,788 Proceeds from issuances of treasury stock 1,511 1,849 Purchases of treasury stock (23,548) (39,739) Net cash used in financing activities (11,992) (11,102) Net change in cash and cash equivalents 901 609 Cash and cash equivalents at beginning of period 10,091 13,312 Cash and cash equivalents at end of period $ 10,992 $ 13,921
See accompanying notes to consolidated financial statements. BRINKER INTERNATIONAL, INC. Notes to Consolidated Financial Statements (Unaudited) 1. Basis of Presentation The consolidated financial statements of Brinker International, Inc. and its wholly-owned subsidiaries (collectively, the "Company") as of September 25, 2002 and June 26, 2002 and for the thirteen-week periods ended September 25, 2002 and September 26, 2001, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial statements. The Company owns, operates, or franchises various restaurant concepts under the names of Chili's Grill & Bar ("Chili's"), Romano's Macaroni Grill ("Macaroni Grill"), On The Border Mexican Grill & Cantina ("On The Border"), Maggiano's Little Italy ("Maggiano's"), Cozymel's Coastal Grill ("Cozymel's"), Corner Bakery Cafe ("Corner Bakery"), and Big Bowl Asian Kitchen ("Big Bowl"). In addition, the Company owns an approximately 40% interest in the legal entities owning and developing Rockfish Seafood Grill ("Rockfish"). The information furnished herein reflects all adjustments (consisting only of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly state the interim operating results for the respective periods. However, these operating results are not necessarily indicative of the results expected for the full fiscal year. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to SEC rules and regulations for interim financial statements. The notes to the consolidated financial statements (unaudited) should be read in conjunction with the notes to the consolidated financial statements contained in the June 26, 2002 Form 10-K. Company management believes that the disclosures are sufficient for interim financial reporting purposes. Certain prior year amounts in the accompanying consolidated financial statements have been reclassified to conform with fiscal 2003 classifications. These reclassifications have no effect on the Company's net income or financial position as previously reported. 2. Shareholders' Equity Pursuant to the Company's stock repurchase plan, the Company repurchased approximately 828,000 shares of its common stock for $23.5 million during the first quarter of fiscal 2003, resulting in a cumulative repurchase total under the current plan of approximately 16.9 million shares of its common stock for $351.1 million. The Company's stock repurchase plan is used by the Company to increase shareholder value, offset the dilutive effect of stock option exercises, satisfy obligations under its savings plans, and for other corporate purposes. The repurchased common stock is reflected as a reduction of shareholders' equity. 3. Supplemental Cash Flow Information Cash paid for interest and income taxes is as follows (in thousands): Sept. 25, Sept. 26, 2002 2001 Interest, net of amounts capitalized $ 664 $ 2,880 Income tax (refunds) payments, net (21,495) 1,860 Non-cash financing activities are as follows (in thousands): Sept. 25, Sept. 26, 2002 2001 Restricted common stock issued, net of forfeitures $ 4,524 $ 2,354 Increase in fair value of interest rate swaps and debt 938 1,958 Decrease in fair value of forward rate agreements included in other comprehensive income - 344 Increase in fair value of interest rate swaps on real estate leasing facility 8,588 -
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table sets forth selected operating data as a percentage of total revenues for the periods indicated. All information is derived from the accompanying consolidated statements of income. 13-Week Periods Ended Sept. 25, Sept. 26, 2002 2001 Revenues 100.0 % 100.0 % Operating Costs and Expenses: Cost of sales 27.2 % 27.6 % Restaurant expenses 54.7 % 54.5 % Depreciation and amortization 4.8 % 4.2 % General and administrative 4.2 % 4.1 % Total operating costs and expenses 90.9 % 90.4 % Operating income 9.1 % 9.6 % Interest expense 0.5 % 0.6 % Other, net (0.2)% 0.0 % Income before provision for income taxes 8.8 % 9.0 % Provision for income taxes 2.9 % 3.1 % Net income 5.9 % 5.9 %
The following table details the number of restaurant openings during the first quarter and total restaurants open at the end of the first quarter. First Quarter Total Open at End Openings of First Quarter Fiscal Fiscal Fiscal Fiscal 2003 2002 2003 2002 Chili's: Company-owned 19 9 648 551 Franchised 2 6 193 213 Total 21 15 841 764 Macaroni Grill: Company-owned 2 3 179 162 Franchised - - 6 6 Total 2 3 185 168 On The Border: Company-owned 1 2 112 104 Franchised 1 - 19 20 Total 2 2 131 124 Corner Bakery: Company-owned 2 4 76 66 Franchised - - 2 2 Total 2 4 78 68 Cozymel's - - 16 14 Maggiano's - 1 20 15 Big Bowl 2 - 14 9 Rockfish Partnership 3 - 15 8 Grand Total 32 25 1,300 1,170
REVENUES Revenues for the first quarter of fiscal 2003 increased to $773.9 million, 15.0% over the $672.7 million generated for the same quarter of fiscal 2002. The increase was primarily attributable to a net increase of 144 company-owned restaurants since September 27, 2001 and an increase in comparable store sales for the first quarter of fiscal 2003 compared to the same quarter of fiscal 2002. The Company increased its capacity (as measured in sales weeks) for the first quarter of fiscal 2003 by 15.2% compared to the respective prior year quarter. Comparable store sales increased 0.8% for the first quarter of fiscal 2003 as compared to the same period of fiscal 2002. Menu prices in the aggregate increased 1.6% in fiscal 2003 as compared to fiscal 2002. COSTS AND EXPENSES (as a Percent of Revenues) Cost of sales decreased for the first quarter of fiscal 2003 as compared to the respective period of fiscal 2002 primarily due to menu price increases and favorable commodity price variances for meat, seafood and dairy, partially offset by unfavorable commodity price variances for poultry and beverages. Restaurant expenses increased for the first quarter of fiscal 2003 compared to the respective period of fiscal 2002 primarily due to higher labor and health insurance costs. These increases were partially offset by increased sales leverage and decreases in utility costs. Depreciation and amortization increased for the first quarter of fiscal 2003 as compared to the respective period of fiscal 2002. The increase resulted from new unit construction, ongoing remodel costs, the acquisition of previously leased equipment and real estate assets and restaurants acquired during fiscal 2002. These increases were partially offset by increased sales leverage and a declining depreciable asset base for older units. General and administrative expenses increased for the first quarter of fiscal 2003 compared to the respective period of fiscal 2002. The increase was primarily due to increased labor and health insurance costs. Interest expense decreased for the first quarter of fiscal 2003 compared with the respective period of fiscal 2002. The decrease was primarily due to a decrease in interest expense on the revolving lines-of-credit resulting from a lower average outstanding balance, lower interest rates on floating rate debt and an increase in interest capitalization related to new restaurant construction activity. These decreases were partially offset by the amortization of debt issuance costs and debt discounts on the Company's $431.7 million convertible debt. Other, net decreased for the first quarter of fiscal 2003 as compared to the respective period of fiscal 2002 due to an approximately $2.2 million gain from insurance proceeds, partially offset by increased equity losses related to the Company's share in equity method investees. INCOME TAXES The Company's effective income tax rate decreased to 33.6% from 34.7% for the first quarter of fiscal 2003 as compared to the respective period of fiscal 2002. The decrease is primarily due to a decrease in the effective state income tax rate and a non-taxable gain from insurance proceeds. NET INCOME AND NET INCOME PER SHARE Net income for the first quarter of fiscal 2003 increased 13.5% compared to the same period of fiscal 2002. Diluted net income per share increased for the first quarter of fiscal 2003 by 15.4% compared to the same period of fiscal 2002. The increase in both net income and diluted net income per share was primarily due to increasing revenues driven by increases in sales weeks and comparable store sales and decreases in cost of sales, partially offset by increases in restaurant, depreciation and amortization, and general and administrative expenses as a percent of revenues. LIQUIDITY AND CAPITAL RESOURCES The working capital deficit decreased from $160.3 million at June 26, 2002 to $156.5 million at September 25, 2002. Net cash provided by operating activities increased to $92.8 million for the first quarter of fiscal 2003 from $80.4 million during the same period in fiscal 2002 due to increased profitability and the timing of operational receipts and payments. The Company believes that its various sources of capital, including availability under existing credit facilities and cash flow from operating activities, are adequate to finance operations as well as the repayment of current debt obligations. Long-term debt outstanding at September 25, 2002 consisted of the following (in thousands): Convertible debt $ 256,710 Senior notes 46,891 Credit facilities 74,200 Capital lease obligations 35,806 Mortgage loan obligations 42,973 456,580 Less current installments (17,334) $ 439,246 The Company has credit facilities totaling $375.0 million. At September 25, 2002, the Company had $300.8 million in available funds from these facilities. Capital expenditures consist of purchases of land for future restaurant sites, new restaurants under construction, purchases of new and replacement restaurant furniture and equipment, and ongoing remodeling programs. Capital expenditures, net of amounts funded under the respective equipment and real estate leasing facilities during the first quarter of fiscal 2002, were $80.0 million for the first quarter of fiscal 2003 compared to $49.2 million, for the same period of fiscal 2002. The increase was due to an increase in the number of new store openings and the elimination of the equipment and real estate leasing facilities in the third quarter of fiscal 2002. The Company estimates that its capital expenditures during the second quarter of fiscal 2003 will approximate $88.0 million. These capital expenditures will be funded entirely from operations and existing credit facilities. Pursuant to the Company's stock repurchase plan, approximately 828,000 shares of its common stock were repurchased for $23.5 million during the first quarter of fiscal 2003. As of September 25, 2002, approximately 16.9 million shares had been repurchased under the current plan for $351.1 million. The Company repurchases common stock to increase shareholder value, offset the dilutive effect of stock option exercises, satisfy obligations under its savings plans, and for other corporate purposes. The repurchased common stock is reflected as a reduction of shareholders' equity. The Company financed the repurchase of its common stock through a combination of cash provided by operations and drawdowns on its available credit facilities. The Company is not aware of any other event or trend which would potentially affect its liquidity. In the event such a trend develops, the Company believes that there are sufficient funds available under its lines-of-credit and from its strong internal cash generating capabilities to adequately manage the expansion of business. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in the quantitative and qualitative market risks of the Company since the prior reporting period. Item 4. CONTROLS AND PROCEDURES Within the 90-day period prior to the filing of this report, an evaluation was carried out under the supervision and with the participation of the Company's management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective. There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. FORWARD-LOOKING STATEMENTS The Company wishes to caution readers that the following important factors, among others, could cause the actual results of the Company to differ materially from those indicated by forward- looking statements made in this report and from time to time in news releases, reports, proxy statements, registration statements and other written communications, as well as oral forward-looking statements made from time to time by representatives of the Company. Such forward-looking statements involve risks and uncertainties that may cause the Company's or the restaurant industry's actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Factors that might cause actual events or results to differ materially from those indicated by these forward-looking statements may include matters such as future economic performance, restaurant openings, operating margins, the availability of acceptable real estate locations for new restaurants, the sufficiency of the Company's cash balances and cash generated from operating and financing activities for the Company's future liquidity and capital resource needs, and other matters, and are generally accompanied by words such as "believes," "anticipates," "estimates," "predicts," "expects" and similar expressions that convey the uncertainty of future events or outcomes. An expanded discussion of some of these risk factors follows. Competition may adversely affect the Company's operations and financial results. The restaurant business is highly competitive with respect to price, service, restaurant location and food quality, and is often affected by changes in consumer tastes, economic conditions, population and traffic patterns. The Company competes within each market with locally-owned restaurants as well as national and regional restaurant chains, some of which operate more restaurants and have greater financial resources and longer operating histories than the Company. There is active competition for management personnel and for attractive commercial real estate sites suitable for restaurants. In addition, factors such as inflation, increased food, labor and benefits costs, and difficulty in attracting hourly employees may adversely affect the restaurant industry in general and the Company's restaurants in particular. The Company's sales volumes generally decrease in winter months. The Company's sales volumes fluctuate seasonally, and are generally higher in the summer months and lower in the winter months, which may cause seasonal fluctuations in the Company's operating results. Changes in governmental regulation may adversely affect the Company's ability to open new restaurants and the Company's existing and future operations. Each of the Company's restaurants is subject to licensing and regulation by alcoholic beverage control, health, sanitation, safety and fire agencies in the state and/or municipality in which the restaurant is located. The Company has not encountered any difficulties or failures in obtaining the required licenses or approvals that could delay or prevent the opening of a new restaurant and although the Company does not, at this time, anticipate any occurring in the future, there can be no assurance that the Company will not experience material difficulties or failures that could delay the opening of restaurants in the future. The Company is subject to federal and state environmental regulations, and although these have not had a material negative effect on the Company's operations, there can be no assurance that there will not be a material negative effect in the future. More stringent and varied requirements of local and state governmental bodies with respect to zoning, land use and environmental factors could delay or prevent development of new restaurants in particular locations. The Company is subject to the Fair Labor Standards Act, which governs such matters as minimum wages, overtime and other working conditions, along with the Americans With Disabilities Act, family leave mandates and a variety of other laws enacted by the states that govern these and other employment law matters. Although the Company expects increases in payroll expenses as a result of federal and state mandated increases in the minimum wage, and although such increases are not expected to be material, there can be no assurance that there will not be material increases in the future. However, the Company's vendors may be affected by higher minimum wage standards, which may result in increases in the price of goods and services supplied to the Company. Inflation may increase the Company's operating expenses. The Company has not experienced a significant overall impact from inflation. As operating expenses increase, the Company, to the extent permitted by competition, recovers increased costs by increasing menu prices, by reviewing, then implementing, alternative products or processes, or by implementing other cost- reduction procedures. There can be no assurance, however, that the Company will be able to continue to recover increases in operating expenses due to inflation in this manner. Increased energy costs may adversely affect the Company's profitability. The Company's success depends in part on its ability to absorb increases in utility costs. Various regions of the United States in which the Company operates multiple restaurants, particularly California, experienced significant increases in utility prices during the 2001 fiscal year. If these increases should recur, they will have an adverse effect on the Company's profitability. If the Company is unable to meet its growth plan, the Company's profitability in the future may be adversely affected. The Company's ability to meet its growth plan is dependent upon, among other things, its ability to identify available, suitable and economically viable locations for new restaurants, obtain all required governmental permits (including zoning approvals and liquor licenses) on a timely basis, hire all necessary contractors and subcontractors, and meet construction schedules. The costs related to restaurant and concept development include purchases and leases of land, buildings and equipment and facility and equipment maintenance, repair and replacement. The labor and materials costs involved vary geographically and are subject to general price increases. As a result, future capital expenditure costs of restaurant development may increase, reducing profitability. There can be no assurance that the Company will be able to expand its capacity in accordance with its growth objectives or that the new restaurants and concepts opened or acquired will be profitable. Unfavorable publicity relating to one or more of the Company's restaurants in a particular brand may taint public perception of the brand. Multi-unit restaurant businesses can be adversely affected by publicity resulting from poor food quality, illness or other health concerns or operating issues stemming from one or a limited number of restaurants. In particular, since the Company depends heavily on the "Chili's" brand for a majority of its revenues, unfavorable publicity relating to one or more Chili's restaurants could have a material adverse effect on the Company's business, results of operations and financial condition. Other risk factors may adversely affect the Company's financial performance. Other risk factors that could cause the Company's actual results to differ materially from those indicated in the forward-looking statements include, without limitation, changes in economic conditions, consumer perceptions of food safety, changes in consumer tastes, governmental monetary policies, changes in demographic trends, availability of employees, terrorist acts, and weather and other acts of God. PART II. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 99(1) Certification by Ronald A. McDougall, Chairman of the Board and Chief Executive Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99(2) Certification by Charles M. Sonsteby, Executive Vice President and Chief Financial Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K A current report on Form 8-K, dated September 24, 2002 was filed with the Securities and Exchange Commission on September 24, 2002. This Form 8-K contained the statements under oath of the Principal Executive Officer and Principal Financial Officer issued in accordance with the Securities and Exchange Commission's order issued June 27, 2002 requiring the filing of sworn statements pursuant to Section 21(a)(1) of the Securities Exchange Act of 1934. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BRINKER INTERNATIONAL, INC. Date: November 8, 2002 By: /s/ Ronald A. McDougall Ronald A. McDougall, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) Date: November 8, 2002 By: /s/ Charles M. Sonsteby Charles M. Sonsteby, Executive Vice President and Chief Financial Officer (Principal Financial Officer) CERTIFICATIONS I, Ronald A. McDougall, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Brinker International, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 8, 2002 By: /s/ Ronald A. McDougall Ronald A. McDougall, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) I, Charles M. Sonsteby, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Brinker International, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 8, 2002 By: /s/ Charles M. Sonsteby Charles M. Sonsteby, Executive Vice President and Chief Financial Officer (Principal Financial Officer) EX-99 3 form10q1q03ex99a.txt EXHIBIT 99(1) EXHIBIT 99(1) CERTIFICATION Pursuant to 18 U.S.C. Section 1350, the undersigned officer of Brinker International, Inc. (the "Company"), hereby certifies that the Company's Quarterly Report on Form 10-Q for the quarter ended September 25, 2002 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 8, 2002 By: /s/ Ronald A. McDougall Ronald A. McDougall, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) EX-99 4 form10q1q03ex99b.txt EXHIBIT 99(2) EXHIBIT 99(2) CERTIFICATION Pursuant to 18 U.S.C. Section 1350, the undersigned officer of Brinker International, Inc. (the "Company"), hereby certifies that the Company's Quarterly Report on Form 10-Q for the quarter ended September 25, 2002 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 8, 2002 By: /s/ Charles M. Sonsteby Charles M. Sonsteby, Executive Vice President and Chief Financial Officer (Principal Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----