Delaware | 1-10275 | 75-1914582 | ||
(State of Incorporation) | (Commission File Number) | (IRS Employment Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425). |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12). |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)). |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). |
BRINKER INTERNATIONAL, INC. | |||
Dated: October 21, 2014 | By: | /s/ Wyman T. Roberts | |
Wyman T. Roberts, | |||
Chief Executive Officer and | |||
President and President of Chili’s Grill and Bar | |||
(Principal Executive Officer) |
Contacts: Greg Artkop, Media Relations | Jill Cuthbertson, Investor Relations | ||
(800) 775-7290 | (972) 980-9917 |
• | Earnings per diluted share, excluding special items, increased 16.3 percent to $0.50 compared to $0.43 for the first quarter of fiscal 2014 |
• | On a GAAP basis, earnings per diluted share increased 16.7 percent to $0.49 compared to $0.42 for the first quarter of fiscal 2014 |
• | Brinker International company sales increased 3.4 percent to $686.9 million and comparable restaurant sales at company-owned restaurants increased 2.4 percent |
• | Chili’s company-owned comparable restaurant sales increased 2.6 percent and traffic increased 0.1 percent |
• | Maggiano’s comparable restaurant sales increased 0.6 percent, representing the 19th consecutive quarterly increase and traffic increased 0.9 percent |
• | Chili's franchise comparable restaurant sales increase of 1.0 percent includes a 1.7 percent increase for U.S. franchise restaurants, partially offset by a 0.5 percent decrease for international franchise restaurants |
• | Brinker's operating income, excluding special items,1 as a percentage of total revenues improved 50 basis points from 7.3 percent to 7.8 percent |
• | For the first three months of fiscal 2015, cash flows provided by operating activities were $70.9 million and capital expenditures totaled $40.2 million |
• | The company repurchased approximately 1.1 million shares of its common stock for $53.3 million in the first quarter |
• | The company paid a dividend of 24 cents per share in the first quarter, an increase of 20 percent over the prior year first quarter, and declared a dividend of 28 cents per share to be paid in the second quarter |
Q1 15 | Q1 14 | |||||
Brinker International | 2.4 | (1.3 | ) | |||
Chili’s Company-Owned1 | ||||||
Comparable Restaurant Sales | 2.6 | (1.6 | ) | |||
Pricing Impact | 1.8 | 0.9 | ||||
Mix-Shift | 0.7 | 0.9 | ||||
Traffic | 0.1 | (3.4 | ) | |||
Maggiano’s | ||||||
Comparable Restaurant Sales | 0.6 | 0.6 | ||||
Pricing Impact | 1.5 | 0.6 | ||||
Mix-Shift | (1.8 | ) | 2.1 | |||
Traffic | 0.9 | (2.1 | ) | |||
Chili's Franchise2 | 1.0 | (1.0 | ) | |||
U.S. Comparable Restaurant Sales | 1.7 | (2.6 | ) | |||
International Comparable Restaurant Sales | (0.5 | ) | 2.7 | |||
Chili's Domestic3 | 2.3 | (1.9 | ) | |||
System-wide4 | 1.9 | (1.2 | ) |
1 | Chili's company-owned comparable restaurant sales do not include sales generated by the 12 Canadian restaurants. Acquired or newly opened restaurants are not included in this calculation until 18 months of operations are completed. | |
2 | Revenues generated by franchisees are not included in revenues on the consolidated statements of comprehensive income; however, we generate royalty revenue and advertising fees based on franchisee revenues, where applicable. We believe including franchisee comparable restaurant sales provides investors information regarding brand performance that is relevant to current operations and may impact future restaurant development. | |
3 | Chili's Domestic comparable restaurant sales percentages are derived from sales generated by company-owned and franchise operated Chili's restaurants in the United States. | |
4 | System-wide comparable restaurant sales are derived from sales generated by company-owned Chili’s and Maggiano’s restaurants in addition to the sales generated at franchise operated restaurants. |
Q1 15 | EPS Q1 15 | Q1 14 | EPS Q1 14 | |||||||||
Net Income | 32.7 | 0.49 | 29.2 | 0.42 | ||||||||
Other (Gains) and Charges, net of taxes1 | 0.6 | 0.01 | 0.6 | 0.01 | ||||||||
Net Income excluding Special Items | 33.3 | 0.50 | 29.8 | 0.43 |
1 | Pre-tax Other gains and charges were $0.9 million and $1.0 million in the first quarter of fiscal 2015 and 2014, respectively. |
Thirteen Week Period Ended | ||||||||
Sept. 24, 2014 | Sept. 25, 2013 | |||||||
Revenues: | ||||||||
Company sales | $ | 686,864 | $ | 664,502 | ||||
Franchise and other revenues (a) | 24,154 | 20,158 | ||||||
Total revenues | 711,018 | 684,660 | ||||||
Operating costs and expenses: | ||||||||
Company restaurants (excluding depreciation and amortization) | ||||||||
Cost of sales | 184,785 | 180,658 | ||||||
Restaurant labor | 227,276 | 218,716 | ||||||
Restaurant expenses | 175,538 | 167,690 | ||||||
Company restaurant expenses | 587,599 | 567,064 | ||||||
Depreciation and amortization | 35,542 | 33,156 | ||||||
General and administrative | 32,634 | 34,421 | ||||||
Other gains and charges | 933 | 1,006 | ||||||
Total operating costs and expenses | 656,708 | 635,647 | ||||||
Operating income | 54,310 | 49,013 | ||||||
Interest expense | 6,999 | 7,013 | ||||||
Other, net | (503 | ) | (582 | ) | ||||
Income before provision for income taxes | 47,814 | 42,582 | ||||||
Provision for income taxes | 15,076 | 13,370 | ||||||
Net income | $ | 32,738 | $ | 29,212 | ||||
Basic net income per share | $ | 0.51 | $ | 0.44 | ||||
Diluted net income per share | $ | 0.49 | $ | 0.42 | ||||
Basic weighted average shares outstanding | 64,668 | 66,693 | ||||||
Diluted weighted average shares outstanding | 66,263 | 68,802 | ||||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustment (b) | $ | (807 | ) | $ | 65 | |||
Other comprehensive income (loss) | (807 | ) | 65 | |||||
Comprehensive income | $ | 31,931 | $ | 29,277 | ||||
(a) | Franchise and other revenues primarily includes royalties, development fees and franchise fees, banquet service charge income, gift card activity (breakage and discounts), tabletop device revenue, Chili's retail food product royalties and delivery fee income. Beginning in fiscal 2015, income primarily related to Maggiano's delivery is included in Franchise and other revenues on the consolidated statement of comprehensive income. This income was previously included in Restaurant expenses. The prior year consolidated statement of comprehensive income has been adjusted to conform to the fiscal 2015 presentation. This adjustment has no effect on net income previously reported. |
(b) | The company’s Canadian operation uses the Canadian dollar as its functional currency. The foreign currency translation adjustment included in the company’s comprehensive income represents the unrealized impact of translating the financial statements of the Canadian entity to U.S. dollars. This amount is not included in net income and would only be realized upon disposition of the business. |
Sept. 24, 2014 | June 25, 2014 | |||||||
ASSETS | ||||||||
Current assets | $ | 201,107 | $ | 210,854 | ||||
Net property and equipment (a) | 1,050,476 | 1,056,454 | ||||||
Total other assets | 224,628 | 223,296 | ||||||
Total assets | $ | 1,476,211 | $ | 1,490,604 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current installments of long-term debt | $ | 27,959 | $ | 27,884 | ||||
Current liabilities | 412,938 | 438,226 | ||||||
Long-term debt, less current installments | 865,272 | 832,302 | ||||||
Other liabilities | 131,861 | 129,098 | ||||||
Total shareholders’ equity | 38,181 | 63,094 | ||||||
Total liabilities and shareholders’ equity | $ | 1,476,211 | $ | 1,490,604 |
(a) | At Sept. 24, 2014, the company owned the land and buildings for 189 of the 886 company-owned restaurants. The net book values of the land and buildings associated with these restaurants totaled $142.2 million and $120.8 million, respectively. |
Thirteen Week Period Ended | ||||||||
Sept. 24, 2014 | Sept. 25, 2013 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ | 32,738 | $ | 29,212 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 35,542 | 33,156 | ||||||
Stock-based compensation | 3,788 | 5,000 | ||||||
Restructure charges and other impairments | 933 | 640 | ||||||
Net loss on disposal of assets | 714 | 1,199 | ||||||
Changes in assets and liabilities | (2,817 | ) | (13,791 | ) | ||||
Net cash provided by operating activities | 70,898 | 55,416 | ||||||
Cash Flows from Investing Activities: | ||||||||
Payments for property and equipment | (40,183 | ) | (29,844 | ) | ||||
Proceeds from sale of assets | 1,216 | — | ||||||
Net cash used in investing activities | (38,967 | ) | (29,844 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Purchases of treasury stock | (53,316 | ) | (66,301 | ) | ||||
Borrowings on revolving credit facility | 40,000 | 60,000 | ||||||
Payments on revolving credit facility | — | (20,000 | ) | |||||
Payments of dividends | (17,198 | ) | (15,281 | ) | ||||
Excess tax benefits from stock-based compensation | 9,376 | 13,924 | ||||||
Payments on long-term debt | (6,669 | ) | (6,630 | ) | ||||
Proceeds from issuances of treasury stock | 1,882 | 4,953 | ||||||
Net cash used in financing activities | (25,925 | ) | (29,335 | ) | ||||
Net change in cash and cash equivalents | 6,006 | (3,763 | ) | |||||
Cash and cash equivalents at beginning of period | 57,685 | 59,367 | ||||||
Cash and cash equivalents at end of period | $ | 63,691 | $ | 55,604 |
First Quarter Openings Fiscal 2015 | Total Restaurants Sept. 24, 2014 | Projected Openings Fiscal 2015 | |||||||
Company-Owned Restaurants: | |||||||||
Chili’s Domestic | 1 | 824 | 8-10 | ||||||
Chili’s International | — | 14 | 1 | ||||||
Maggiano’s | 2 | 48 | 3 | ||||||
3 | 886 | 12-14 | |||||||
Franchise Restaurants: | |||||||||
Chili’s Domestic | 3 | 439 | 5 | ||||||
Chili's International | 6 | 297 | 34-38 | ||||||
9 | 736 | 39-43 | |||||||
Total Restaurants: | |||||||||
Chili’s Domestic | 4 | 1,263 | 13-15 | ||||||
Chili's International | 6 | 311 | 35-39 | ||||||
Maggiano’s | 2 | 48 | 3 | ||||||
12 | 1,622 | 51-57 |
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