Florida | 59-3305930 | |
(State or other jurisdiction of incorporation) | (IRS Employer 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)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit Number | Description | |
99 | News release dated June 21, 2013, entitled “Darden Restaurants Reports Decreases In Fourth Quarter and Fiscal Year 2013 Diluted Net Earnings Per Share and Increases Its Quarterly Dividend 10 Percent.” |
DARDEN RESTAURANTS, INC. | |
By: | /s/ C. Bradford Richmond |
C. Bradford Richmond | |
Senior Vice President and Chief Financial Officer |
Exhibit Number | Description of Exhibit | |
99 | News release dated June 21, 2013, entitled “Darden Restaurants Reports Decreases In Fourth Quarter and Fiscal Year 2013 Diluted Net Earnings Per Share and Increases Its Quarterly Dividend 10 Percent.” |
NEWS/INFORMATION | ||
Corporate Relations | ||
P.O. Box 695011 | ||
Orlando, FL 32869-5011 |
FOR RELEASE | Contacts: | |
June 21, 2013 | (Analysts) Matthew Stroud | (407) 245-6458 |
7:00 AM ET | (Media) Rich Jeffers | (407) 245-4189 |
• | Fourth quarter diluted net earnings per share from continuing operations were $1.01, a 12% decrease from $1.15 per diluted share in the fourth quarter of last year. Net earnings from continuing operations in this year's fourth quarter were $133.3 million, which compares to net earnings from continuing operations of $151.6 million in the fourth quarter last year. This year's fourth quarter results include costs and purchase accounting adjustments associated with the Company's August 29, 2012 acquisition of Yard House USA, Inc. that reduced diluted net earnings per share for the quarter by one cent and net earnings by $1.9 million. |
• | Fourth quarter total sales from continuing operations were $2.30 billion, an 11.3% increase from the $2.07 billion generated in the fourth quarter of last year. The increase reflects blended same-restaurant sales growth of 2.2% for Olive Garden, Red Lobster and LongHorn Steakhouse, same restaurant-sales growth of 2.3% for the Company's Specialty Restaurant Group, the addition of 44 Yard House restaurants (including the 40 restaurants that were acquired and four that were opened following acquisition) and the operation of another 100 net new restaurants compared to the fourth quarter last year. In the fourth quarter, U.S. same-restaurant sales increased 3.5% at LongHorn Steakhouse, 3.2% at Red Lobster and 1.1% at Olive Garden. |
• | The Company reported that the effective tax rate for the fourth quarter was lower than its previously communicated expectation. The Company marked to market the fair value of certain securities-based employee benefit plans, which increased selling, general and administrative expenses as a percentage of sales for the fourth quarter this year by 20 basis points compared to the fourth quarter last year. Because these plans are hedged economically on an after-tax basis, the Company's effective tax rate for this year's fourth quarter was favorably affected by over 300 basis points. The Company also reported that the higher expenses and lower effective tax offset one another on a diluted net earnings per share from continuing operations basis. |
• | For fiscal year 2013, diluted net earnings per share from continuing operations were $3.14, a 12% decrease from last year's $3.58. Net earnings from continuing operations in fiscal 2013 were $412.6 million, which compares to net earnings from continuing operations of $476.5 million last year. For the fiscal year, costs and purchase accounting adjustments associated with the Yard House acquisition reduced diluted net earnings per share from continuing operations by nine cents and net earnings by $12.3 million. |
• | For fiscal year 2013, total sales from continuing operations were $8.55 billion, a 6.9% increase from the $8.0 billion generated last year. The increase reflects same-restaurant sales growth of 2.1% for the Company's Specialty Restaurant Group and 7.9% of growth in sales for the year due to new restaurants, including the acquisition of 40 Yard House restaurants, offset partially by a combined same-restaurant sales decline of 1.3% for Olive Garden, Red Lobster and LongHorn Steakhouse. |
• | Darden's Board of Directors declared a quarterly dividend of 55 cents per share, a 10% increase from the Company's previous quarterly dividend. |
Olive Garden | March | April | May | |||
Same-Restaurant Sales | -0.2 | % | 1.3 | % | 2.4 | % |
Same-Restaurant Traffic | 1.4 | % | 2.5 | % | 3.4 | % |
Pricing | 1.2 | % | 1.2 | % | 1.2 | % |
Menu-mix | -2.8 | % | -2.4 | % | -2.2 | % |
Red Lobster | March | April | May | |||
Same-Restaurant Sales | 7.1 | % | 1.3 | % | -0.9 | % |
Same-Restaurant Traffic | 5.9 | % | 4.7 | % | 1.4 | % |
Pricing | 1.1 | % | 1.2 | % | 1.2 | % |
Menu-mix | 0.1 | % | -4.6 | % | -3.5 | % |
LongHorn Steakhouse | March | April | May | |||
Same-Restaurant Sales | 5.7 | % | 1.4 | % | 2.0 | % |
Same-Restaurant Traffic | 6.3 | % | 2.7 | % | 1.5 | % |
Pricing | 1.6 | % | 1.4 | % | 1.4 | % |
Menu-mix | -2.2 | % | -2.7 | % | -0.9 | % |
05/26/13 | 05/27/12 | |||||
678 | Red Lobster USA | 677 | ||||
27 | Red Lobster Canada | 27 | ||||
705 | Total Red Lobster | 704 | ||||
822 | Olive Garden USA | 786 | ||||
6 | Olive Garden Canada | 6 | ||||
828 | Total Olive Garden | 792 | ||||
430 | LongHorn Steakhouse | 386 | ||||
49 | The Capital Grille | 46 | ||||
33 | Bahama Breeze | 30 | ||||
31 | Seasons 52 | 23 | ||||
12 | Eddie V's | 11 | ||||
44 | Yard House | — | ||||
6 | Other | 2 | ||||
2,138 | Total Restaurants | 1,994 |
Three Months Ended | Twelve Months Ended | ||||||||||||||
5/26/2013 | 5/27/2012 | 5/26/2013 | 5/27/2012 | ||||||||||||
Sales | $ | 2,299.0 | $ | 2,065.6 | $ | 8,551.9 | $ | 7,998.7 | |||||||
Costs and expenses: | |||||||||||||||
Cost of sales: | |||||||||||||||
Food and beverage | 707.1 | 632.1 | 2,628.6 | 2,460.6 | |||||||||||
Restaurant labor | 726.5 | 637.4 | 2,698.0 | 2,502.0 | |||||||||||
Restaurant expenses | 356.6 | 299.3 | 1,334.4 | 1,200.6 | |||||||||||
Total cost of sales (1) | $ | 1,790.2 | $ | 1,568.8 | $ | 6,661.0 | $ | 6,163.2 | |||||||
Selling, general and administrative | 213.8 | 178.7 | 847.8 | 746.8 | |||||||||||
Depreciation and amortization | 102.0 | 90.3 | 394.8 | 349.1 | |||||||||||
Interest, net | 33.2 | 27.1 | 125.9 | 101.6 | |||||||||||
Total costs and expenses | $ | 2,139.2 | $ | 1,864.9 | $ | 8,029.5 | $ | 7,360.7 | |||||||
Earnings before income taxes | 159.8 | 200.7 | 522.4 | 638.0 | |||||||||||
Income taxes | 26.5 | 49.1 | 109.8 | 161.5 | |||||||||||
Earnings from continuing operations | $ | 133.3 | $ | 151.6 | $ | 412.6 | $ | 476.5 | |||||||
Losses from discontinued operations, net of tax benefit of $0.1, $0.3, $0.4 and $0.7, respectively | (0.1 | ) | (0.4 | ) | (0.7 | ) | (1.0 | ) | |||||||
Net earnings | $ | 133.2 | $ | 151.2 | $ | 411.9 | $ | 475.5 | |||||||
Basic net earnings per share: | |||||||||||||||
Earnings from continuing operations | $ | 1.03 | $ | 1.18 | $ | 3.20 | $ | 3.66 | |||||||
Losses from discontinued operations | — | — | (0.01 | ) | (0.01 | ) | |||||||||
Net earnings | $ | 1.03 | $ | 1.18 | $ | 3.19 | $ | 3.65 | |||||||
Diluted net earnings per share: | |||||||||||||||
Earnings from continuing operations | $ | 1.01 | $ | 1.15 | $ | 3.14 | $ | 3.58 | |||||||
Losses from discontinued operations | — | — | (0.01 | ) | (0.01 | ) | |||||||||
Net earnings | $ | 1.01 | $ | 1.15 | $ | 3.13 | $ | 3.57 | |||||||
Average number of common shares outstanding: | |||||||||||||||
Basic | 129.8 | 128.5 | 129.0 | 130.1 | |||||||||||
Diluted | 132.2 | 131.6 | 131.6 | 133.2 | |||||||||||
(1) Excludes restaurant depreciation and amortization as follows: | $ | 96.5 | $ | 84.7 | $ | 373.7 | $ | 326.9 |
5/26/2013 | 5/27/2012 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 88.2 | $ | 70.5 | |||
Receivables, net | 85.4 | 71.4 | |||||
Inventories | 356.9 | 404.1 | |||||
Prepaid income taxes | 6.4 | 12.2 | |||||
Prepaid expenses and other current assets | 83.4 | 74.9 | |||||
Deferred income taxes | 144.6 | 124.5 | |||||
Total current assets | $ | 764.9 | $ | 757.6 | |||
Land, buildings and equipment, net | 4,391.1 | 3,951.3 | |||||
Goodwill | 908.3 | 538.6 | |||||
Trademarks | 573.8 | 464.9 | |||||
Other assets | 298.8 | 231.8 | |||||
Total assets | $ | 6,936.9 | $ | 5,944.2 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 296.5 | $ | 260.7 | |||
Short-term debt | 164.5 | 262.7 | |||||
Accrued payroll | 150.5 | 154.3 | |||||
Accrued income taxes | 16.5 | — | |||||
Other accrued taxes | 67.6 | 60.4 | |||||
Unearned revenues | 270.5 | 231.7 | |||||
Current portion of long-term debt | — | 349.9 | |||||
Other current liabilities | 450.3 | 454.4 | |||||
Total current liabilities | $ | 1,416.4 | $ | 1,774.1 | |||
Long-term debt, less current portion | 2,496.2 | 1,453.7 | |||||
Deferred income taxes | 356.4 | 312.9 | |||||
Deferred rent | 230.5 | 204.4 | |||||
Obligations under capital leases, net of current installments | 52.5 | 54.4 | |||||
Other liabilities | 325.4 | 302.7 | |||||
Total liabilities | $ | 4,877.4 | $ | 4,102.2 | |||
Stockholders’ equity: | |||||||
Common stock and surplus | $ | 1,207.6 | $ | 2,518.8 | |||
Retained earnings | 998.9 | 3,172.8 | |||||
Treasury stock | (8.1 | ) | (3,695.8 | ) | |||
Accumulated other comprehensive income (loss) | (132.8 | ) | (146.6 | ) | |||
Unearned compensation | (6.1 | ) | (7.2 | ) | |||
Total stockholders’ equity | $ | 2,059.5 | $ | 1,842.0 | |||
Total liabilities and stockholders’ equity | $ | 6,936.9 | $ | 5,944.2 |
Twelve Months Ended | |||||||
5/26/2013 | 5/27/2012 | ||||||
Cash flows—operating activities | |||||||
Net earnings | $ | 411.9 | $ | 475.5 | |||
Losses from discontinued operations, net of tax benefit | 0.7 | 1.0 | |||||
Adjustments to reconcile net earnings from continuing operations to cash flows: | |||||||
Depreciation and amortization | 394.8 | 349.1 | |||||
Stock-based compensation expense | 49.3 | 56.1 | |||||
Change in current assets and liabilities and other, net | 92.8 | (119.5 | ) | ||||
Net cash provided by operating activities of continuing operations | $ | 949.5 | $ | 762.2 | |||
Cash flows—investing activities | |||||||
Purchases of land, buildings and equipment | (685.6 | ) | (639.7 | ) | |||
Proceeds from disposal of land, buildings and equipment | 0.4 | 3.3 | |||||
Cash used in business acquisitions, net of cash acquired | (577.4 | ) | (58.5 | ) | |||
Increase in other assets | (27.8 | ) | (26.7 | ) | |||
Net cash used in investing activities of continuing operations | $ | (1,290.4 | ) | $ | (721.6 | ) | |
Cash flows—financing activities | |||||||
Proceeds from issuance of common stock | 64.4 | 70.2 | |||||
Income tax benefits credited to equity | 13.6 | 17.9 | |||||
Dividends paid | (258.2 | ) | (223.9 | ) | |||
Purchases of treasury stock | (52.4 | ) | (375.1 | ) | |||
ESOP note receivable repayment | 1.1 | 2.1 | |||||
Proceeds from issuance of short-term debt, net | (98.1 | ) | 77.2 | ||||
Repayment of long-term debt | (355.9 | ) | (2.1 | ) | |||
Proceeds from issuance of long-term debt | 1,050.0 | 400.0 | |||||
Payment of debt issuance costs | (7.4 | ) | (5.1 | ) | |||
Principal payments on capital leases | (1.7 | ) | (1.6 | ) | |||
Net cash provided by (used in) financing activities of continuing operations | $ | 355.4 | $ | (40.4 | ) | ||
Cash flows—discontinued operations | |||||||
Net cash used in operating activities of discontinued operations | (0.2 | ) | (0.5 | ) | |||
Net cash provided by investing activities of discontinued operations | 3.4 | 0.3 | |||||
Net cash provided by (used in) discontinued operations | $ | 3.2 | $ | (0.2 | ) | ||
Increase in cash and cash equivalents | 17.7 | — | |||||
Cash and cash equivalents - beginning of period | 70.5 | 70.5 | |||||
Cash and cash equivalents - end of period | $ | 88.2 | $ | 70.5 |
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