Bloomin' Brands Announces 2015 Second Quarter Adjusted Diluted EPS of $0.28 and Diluted EPS of $0.26;

Posts U.S. Comparable Sales Increase of 2.0%;

Reaffirms 2015 Guidance for Adjusted Diluted EPS of At Least $1.27;

Authorizes Additional $100 Million Share Repurchase Program;

Aug 04, 2015, 07:00 ET from Bloomin' Brands, Inc.

TAMPA, Fla., Aug. 4, 2015 /PRNewswire/ -- Bloomin' Brands, Inc. (Nasdaq: BLMN) today reported financial results for the second quarter ("Q2 2015") ended June 28, 2015 compared to the second quarter ("Q2 2014") ended June 29, 2014.

Key highlights for Q2 2015 include the following:

  • Comparable sales for Company-owned U.S. concepts increased 2.0%
  • Comparable sales for Outback Steakhouse restaurants in Brazil increased 3.4%
  • System-wide development was 14 new restaurants including nine International restaurants
  • Adjusted restaurant margin was 16.2% versus 16.1% in Q2 2014 and U.S. GAAP restaurant margin was 16.5% versus 16.1% in Q2 2014

Subsequent to Q2 2015:

  • The Company's Board of Directors approved a new $100.0 million share repurchase program
  • Moody's upgraded the Company's Corporate Family Rating two notches to Ba2

Adjusted Diluted EPS and Diluted EPS

The following table reconciles Adjusted diluted earnings per share to Diluted earnings per share for the periods as indicated below.

Q2 2015

Q2 2014

CHANGE

Adjusted diluted earnings per share

$

0.28

$

0.27

$

0.01

Adjustments

(0.02)

(0.06)

0.04

Diluted earnings per share

$

0.26

$

0.21

$

0.05

_______________________ See Non-GAAP Measures later in this release.

CEO Comments

"We are pleased with the results for the quarter driven by continued strong performances at Outback, Fleming's and Brazil, and positive momentum at Carrabba's," said Elizabeth Smith, CEO.  "The strength of our portfolio more than offsets traffic declines at Bonefish Grill which is returning to their polished casual roots.  We are well-positioned to deliver on our 2015 EPS guidance of at least $1.27."

Second Quarter Financial Results

The following summarizes the Company's results for Q2 2015 and Q2 2014:

(dollars in millions)

Q2 2015

Q2 2014

% Change

Total revenues

$

1,099.6

$

1,110.9

(1.0)

%

Adjusted restaurant level operating margin

16.2

%

16.1

%

0.1

%

U.S. GAAP restaurant level operating margin

16.5

%

16.1

%

0.4

%

Adjusted operating income margin

5.6

%

5.8

%

(0.2)

%

U.S. GAAP operating income margin

5.7

%

5.6

%

0.1

%

 

  • The decrease in Total revenues was primarily due to the effect of foreign currency translation and was partially offset by the net benefit of new restaurant openings and closings.
  • The increase in Adjusted restaurant-level operating margin was primarily due to productivity savings and higher U.S. average unit volumes.  These increases were partially offset by commodity and wage rate inflation.
  • The decrease in Adjusted operating income margin was driven by higher general and administrative expense primarily related to the lapping of lower incentive compensation in Q2 2014.
  • The difference between Adjusted and U.S. GAAP restaurant-level operating margins and operating income margins in Q2 2015 was primarily due to the favorable resolution of the 2011 payroll tax audit contingency in 2015.  

Second Quarter Comparable Restaurant Sales

THIRTEEN WEEKS ENDED JUNE 28, 2015

COMPANY- OWNED

Comparable restaurant sales (stores open 18 months or more) (1) (2):

U.S.

Outback Steakhouse

4.0

%

Carrabba's Italian Grill

0.9

%

Bonefish Grill

(4.6)

%

Fleming's Prime Steakhouse & Wine Bar

3.2

%

Combined U.S.

2.0

%

International

Outback Steakhouse - Brazil

3.4

%

Outback Steakhouse - South Korea

(11.8)

%

_______________________

(1)

Comparable restaurant sales exclude the effect of fluctuations in foreign currency rates.

(2)

Relocated international restaurants closed more than 30 days and relocated U.S. restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.

U.S. Segment Operating Results

(dollars in millions)

Q2 2015

Q2 2014

% Change

U.S.

Total revenues

$

983.0

$

967.0

1.6

%

Adjusted restaurant-level operating margin

15.6

%

15.2

%

0.4

%

U.S. GAAP restaurant-level operating margin

15.6

%

15.2

%

0.4

%

Adjusted operating income margin

9.5

%

8.4

%

1.1

%

U.S. GAAP operating income margin

9.5

%

8.4

%

1.1

%

 

  • The increases in Adjusted and U.S. GAAP operating income margin were primarily due to productivity savings, higher average unit volumes, and lower general and administrative expenses due to the Company's organizational realignment in the second half of 2014.

International Segment Operating Results

(dollars in millions)

Q2 2015

Q2 2014

% Change

International

Total revenues

$

116.6

$

143.9

(18.9)

%

Adjusted restaurant-level operating margin

16.9

%

17.3

%

(0.4)

%

U.S. GAAP restaurant-level operating margin

16.8

%

17.2

%

(0.4)

%

Adjusted operating income margin

5.8

%

6.8

%

(1.0)

%

U.S. GAAP operating income margin

4.9

%

5.8

%

(0.9)

%

 

  • The decrease in Total revenues is primarily due to foreign currency translation and the impact of the International Restaurant Closure Initiative.
  • The decrease in Adjusted and U.S. GAAP operating income margin was primarily due to commodity and labor inflation as well as investment spending related to the launching of Abbraccio in Brazil.  This decrease was partially offset by new restaurant openings, productivity savings and pricing.
  • Foreign currency translation negatively impacted adjusted income from operations by $2.4 million.

Unallocated Corporate Operating Expense

Certain expenses are managed centrally and are not allocated to the U.S. or International segment. In total, Q2 2015 unallocated expenses were $36.4 million, which was $9.2 million higher than Q2 2014.  The increase is primarily due to the lapping of lower incentive compensation expense in Q2 2014, which is included in consolidated operating margins.

System-wide Development

The following summarizes our system-wide development for the thirteen weeks ended June 28, 2015:

MARCH 29, 2015

OPENINGS

CLOSURES

JUNE 28, 2015

U.S.:

Outback Steakhouse—Company-owned

649

2

(2)

649

Bonefish Grill—Company-owned

204

3

207

International:

Company-owned

Outback Steakhouse—South Korea

75

2

(1)

76

Outback Steakhouse—Brazil

64

5

69

Other

10

2

12

System-wide development

14

(3)

 

Dividend Declaration and Share Repurchases

The Company's Board of Directors declared a quarterly cash dividend of $0.06 per share to be paid on August 28, 2015 to all stockholders of record as of the close of business on August 18, 2015.

During Q2 2015, the Company repurchased $30.0 million of common stock, which completes the December 2014 share repurchase program.  On August 3, 2015, the Company's Board of Directors approved a new $100.0 million share repurchase program. The authorization will expire on February 3, 2017. 

Other Events

On July 21, 2015, Moody's upgraded the Company's Corporate Family Rating to Ba2, two steps below investment grade rating.  This upgrade reflects the improved operating performance and lower funded debt levels at the operating company.

Fiscal 2015 Financial Outlook

The Company is reaffirming its full-year Adjusted diluted earnings per share guidance of at least $1.27.

The Company has revised guidance on the following items for the full year 2015:

  • Blended U.S. comparable restaurant sales growth is expected to be approximately 1.5% versus prior guidance of "at least" 1.5%.  This change is primarily due to lower sales expectations at Bonefish. 
  • Total Revenues are expected to be approximately $4.43 billion versus prior guidance of "at least" $4.43 billion.   
  • Commodity inflation range is now expected to be 3.5% to 4.0% versus prior guidance of 4.0% to 6.0%.  This change reflects continued improvement in seafood and dairy. 
  • Capital expenditures are now expected to be between $225 million to $235 million versus prior guidance of $235 million to $255 million.

All other elements of the fiscal 2015 guidance included in the February 19, 2015 release remain intact.

Non-GAAP Measures

In addition to the results provided in accordance with U.S. 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 U.S. GAAP and include the following: (i) Adjusted restaurant-level operating margin, (ii) Adjusted income from operations and the corresponding margin, (iii) Adjusted net income, (iv) Adjusted diluted earnings per share, (v) Adjusted segment restaurant-level operating margin and (vi) Adjusted segment income from operations and the corresponding margin.

Although we believe these non-GAAP measures enhance investors' understanding of our business and performance, these non-GAAP financial measures are not intended to replace U.S. GAAP financial measures. These metrics are not necessarily comparable to similarly titled measures used by other companies. The use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that 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. We believe that the disclosure of these non-GAAP measures is useful to investors as they form the basis for how our management team and Board of Directors evaluate our operating performance, allocate resources and establish employee incentive plans.

For reconciliations of the non-GAAP measures used in this release, refer to tables four, five, six, and seven included later in this release.

Conference Call

The Company will host a conference call today, August 4, 2015 at 9:00 AM ET. The conference call can be accessed live over the telephone by dialing (888) 455-2263, or (719) 325-2144 for international participants. A replay will be available beginning two hours after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 8090188. The replay will be available through Tuesday, August 11, 2015. The call will also 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.

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 approximately 1,500 restaurants in 48 states, Puerto Rico, Guam and 22 countries, some of which are franchise locations. For more information, please visit bloominbrands.com.

Forward-Looking Statements

Certain statements contained herein, including statements under the headings "CEO Comments" and "Fiscal 2015 Financial Outlook," 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: local, regional, national and international economic conditions; consumer confidence and spending patterns; challenges associated with new restaurant development; our ability to preserve the value of our brands; price and availability of commodities; weather, acts of God and other disasters; the seasonality of the Company's business; increases in unemployment rates and taxes; increases in labor costs; competition; changes in patterns of consumer traffic, consumer tastes and dietary habits; consumer reaction to public health and food safety issues; government actions and policies; foreign currency exchange rates; interruption or breach of our systems or loss of consumer or employee information; interest rate changes, compliance with debt covenants and the Company's ability to make debt payments; the cost and availability of credit; and our ability to continue to pay dividends. 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 filed 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 AND COMPREHENSIVE INCOME

(UNAUDITED)

THIRTEEN WEEKS ENDED

TWENTY-SIX WEEKS ENDED

(dollars in thousands, except per share data)

JUNE 28, 2015

JUNE 29, 2014

JUNE 28, 2015

JUNE 29, 2014

Revenues

Restaurant sales

$

1,092,759

$

1,104,437

$

2,287,569

$

2,254,962

Other revenues

6,838

6,475

14,087

13,809

Total revenues

1,099,597

1,110,912

2,301,656

2,268,771

Costs and expenses

Cost of sales

357,455

358,856

744,923

732,470

Labor and other related

301,039

302,472

625,025

613,890

Other restaurant operating

254,281

265,279

518,319

521,797

Depreciation and amortization

47,375

48,627

93,861

94,792

General and administrative

75,962

72,262

149,209

146,316

Provision for impaired assets and restaurant closings

900

1,025

10,033

7,089

Total costs and expenses

1,037,012

1,048,521

2,141,370

2,116,354

Income from operations

62,585

62,391

160,286

152,417

Loss on extinguishment and modification of debt

(2,638)

(11,092)

(2,638)

(11,092)

Other income (expense), net

57

317

(1,090)

153

Interest expense, net

(12,867)

(15,109)

(26,065)

(31,707)

Income before provision for income taxes

47,137

36,507

130,493

109,771

Provision for income taxes

14,081

8,785

35,355

26,949

Net income

33,056

27,722

95,138

82,822

Less: net income attributable to noncontrolling interests

830

1,331

2,324

2,698

Net income attributable to Bloomin' Brands

$

32,226

$

26,391

$

92,814

$

80,124

Net income

$

33,056

$

27,722

$

95,138

$

82,822

Other comprehensive income:

Foreign currency translation adjustment

(26,182)

19,088

(51,644)

13,723

Unrealized gains (losses) on derivatives, net of tax

844

(3,168)

Comprehensive income

7,718

46,810

40,326

96,545

Less: comprehensive income attributable to noncontrolling interests

830

1,331

2,324

2,698

Comprehensive income attributable to Bloomin' Brands

$

6,888

$

45,479

$

38,002

$

93,847

Earnings per share:

Basic

$

0.26

$

0.21

$

0.75

$

0.64

Diluted

$

0.26

$

0.21

$

0.73

$

0.63

Weighted average common shares outstanding:

Basic

123,046

125,229

124,174

124,889

Diluted

126,242

128,378

127,501

128,115

Cash dividends declared per common share

$

0.06

$

$

0.12

$

 

 

 

TABLE TWO

BLOOMIN' BRANDS, INC.

SEGMENT RESULTS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

TWENTY-SIX WEEKS ENDED

U.S. Segment

JUNE 28, 2015

JUNE 29, 2014

JUNE 28, 2015

JUNE 29, 2014

Revenues

Restaurant Sales

$

977,260

$

961,608

$

2,033,364

$

1,966,483

Other Revenues

5,718

5,435

11,628

11,186

Total revenues

$

982,978

$

967,043

$

2,044,992

$

1,977,669

Restaurant-level operating margin

15.6

%

15.2

%

16.8

%

16.4

%

Income from operations

$

93,265

$

81,268

$

220,673

$

188,169

Operating income margin

9.5

%

8.4

%

10.8

%

9.5

%

International Segment

Revenues

Restaurant sales

$

115,499

$

142,829

$

254,205

$

288,479

Other revenues

1,120

1,040

2,459

2,623

Total revenues

$

116,619

$

143,869

$

256,664

$

291,102

Restaurant-level operating margin

16.8

%

17.2

%

19.5

%

18.6

%

Income from operations

$

5,727

$

8,282

$

14,606

$

24,507

Operating income margin

4.9

%

5.8

%

5.7

%

8.4

%

Reconciliation of Segment Income from Operations to Consolidated Income from Operations

Segment income from operations

U.S.

$

93,265

$

81,268

$

220,673

$

188,169

International

5,727

8,282

14,606

24,507

Total segment income from operations

98,992

89,550

235,279

212,676

Unallocated corporate operating expense - Cost of sales, Labor and other related and Other restaurant operating

7,977

6,728

7,689

11,322

Unallocated corporate operating expense - Depreciation and amortization and General and administrative

(44,384)

(33,887)

(82,682)

(71,581)

Unallocated corporate operating expense

(36,407)

(27,159)

(74,993)

(60,259)

Total income from operations

$

62,585

$

62,391

$

160,286

$

152,417

 

TABLE THREE

BLOOMIN' BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

(UNAUDITED)

(dollars in thousands)

JUNE 28, 2015

DECEMBER 28, 2014

Cash and cash equivalents (1)

$

132,772

$

165,744

Net working capital (deficit) (2)

$

(256,015)

$

(239,559)

Total assets

$

3,144,735

$

3,344,286

Total debt, net

$

1,320,917

$

1,315,843

Total stockholders' equity

$

495,948

$

556,449

_______________________

(1)

Excludes restricted cash.

(2)

The Company has, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies). The Company operates successfully with negative working capital because cash collected on Restaurant sales is typically received before payment is due on its current liabilities and its inventory turnover rates require relatively low investment in inventories. Additionally, ongoing cash flows from restaurant operations and gift card sales are used to service debt obligations and to make capital expenditures.

 

TABLE FOUR

BLOOMIN' BRANDS, INC.

RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATION

(UNAUDITED)

THIRTEEN WEEKS ENDED

(UNFAVORABLE) FAVORABLE CHANGE IN ADJUSTED

JUNE 28, 2015

JUNE 29, 2014

U.S. GAAP

ADJUSTED (1)

U.S. GAAP

ADJUSTED (2)

QUARTER TO DATE

Restaurant sales

100.0

%

100.0

%

100.0

%

100.0

%

Cost of sales

32.7

%

32.7

%

32.5

%

32.5

%

(0.2)

%

Labor and other related

27.5

%

27.8

%

27.4

%

27.4

%

(0.4)

%

Other restaurant operating

23.3

%

23.3

%

24.0

%

24.0

%

0.7

%

Restaurant-level operating margin

16.5

%

16.2

%

16.1

%

16.1

%

0.1

%

TWENTY-SIX WEEKS ENDED

(UNFAVORABLE) FAVORABLE CHANGE IN ADJUSTED

JUNE 28, 2015

JUNE 29, 2014

U.S. GAAP

ADJUSTED (1)

U.S. GAAP

ADJUSTED (3)

YEAR TO DATE

Restaurant sales

100.0

%

100.0

%

100.0

%

100.0

%

Cost of sales

32.6

%

32.6

%

32.5

%

32.5

%

(0.1)

%

Labor and other related

27.3

%

27.4

%

27.2

%

27.2

%

(0.2)

%

Other restaurant operating

22.7

%

22.7

%

23.1

%

23.2

%

0.5

%

Restaurant-level operating margin

17.5

%

17.3

%

17.2

%

17.1

%

0.2

%

_______________________

(1)

Includes a $2.7 million adjustment for payroll tax audit contingencies, which was recorded in Labor and other related.

(2)

No adjustments impacted Restaurant-level operating margins during the thirteen weeks ended June 29, 2014.

(3)

Includes an adjustment for the deferred rent liability write-off associated with the Domestic Restaurant Closure Initiative, which was recorded in Other restaurant operating during the twenty-six weeks ended June 29, 2014.

 

TABLE FIVE

BLOOMIN' BRANDS, INC.

SEGMENT RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATION

(UNAUDITED)

THIRTEEN WEEKS ENDED

(UNFAVORABLE) FAVORABLE CHANGE IN ADJUSTED

JUNE 28, 2015

JUNE 29, 2014

Restaurant-level operating margin:

U.S. GAAP

ADJUSTED

U.S. GAAP

ADJUSTED

QUARTER TO DATE

U.S. (1)

15.6

%

15.6

%

15.2

%

15.2

%

0.4

%

International (2)

16.8

%

16.9

%

17.2

%

17.3

%

(0.4)

%

TWENTY-SIX WEEKS ENDED

(UNFAVORABLE) FAVORABLE CHANGE IN ADJUSTED

JUNE 28, 2015

JUNE 29, 2014

Restaurant-level operating margin:

U.S. GAAP

ADJUSTED

U.S. GAAP

ADJUSTED

YEAR TO DATE

U.S. (1)

16.8

%

16.8

%

16.4

%

16.3

%

0.5

%

International (2)

19.5

%

19.5

%

18.6

%

18.7

%

0.8

%

_______________________

(1)

The twenty-six weeks ended June 29, 2014 includes an adjustment for the write-off of $2.1 million of deferred rent liabilities associated with the Domestic Restaurant Closure Initiative.

(2)

Includes adjustments of $0.1 million of Brazil non-cash intangible amortization for the thirteen weeks ended June 28, 2015 and June 29, 2014, respectively, and $0.2 million for the twenty-six weeks ended June 29, 2014.

 

 

TABLE SIX

BLOOMIN' BRANDS, INC.

INCOME FROM OPERATIONS, NET INCOME AND DILUTED EARNINGS PER SHARE NON-GAAP RECONCILIATION

(UNAUDITED)

THIRTEEN WEEKS ENDED

TWENTY-SIX WEEKS ENDED

(in thousands, except per share data)

JUNE 28, 2015

JUNE 29, 2014

JUNE 28, 2015

JUNE 29, 2014

Income from operations

$

62,585

$

62,391

$

160,286

$

152,417

Operating income margin

5.7

%

5.6

%

7.0

%

6.7

%

Adjustments:

Restaurant impairments and closing costs (1)

(63)

8,807

4,929

Payroll tax audit contingency (2)

(2,671)

(2,671)

Purchased intangibles amortization (3)

1,123

1,532

2,406

2,990

Restaurant relocations and related costs (4)

122

1,291

Asset impairments and related costs (5)

746

746

Transaction-related expenses (6)

40

315

1,118

Total income from operations adjustments

(703)

1,532

10,894

9,037

Adjusted income from operations

$

61,882

$

63,923

$

171,180

$

161,454

Adjusted operating income margin

5.6

%

5.8

%

7.4

%

7.1

%

Net income attributable to Bloomin' Brands

$

32,226

$

26,391

$

92,814

$

80,124

Adjustments:

Income from operations adjustments

(703)

1,532

10,894

9,037

Loss on disposal of business (7)

(121)

1,030

Loss on extinguishment and modification of debt (8)

2,638

11,092

2,638

11,092

Total adjustments, before income taxes

1,814

12,624

14,562

20,129

Adjustment to provision for income taxes (9)

1,047

(4,847)

(2,580)

(7,542)

Net adjustments

2,861

7,777

11,982

12,587

Adjusted net income

$

35,087

$

34,168

$

104,796

$

92,711

Diluted earnings per share

$

0.26

$

0.21

$

0.73

$

0.63

Adjusted diluted earnings per share

$

0.28

$

0.27

$

0.82

$

0.72

Diluted weighted average common shares outstanding

126,242

128,378

127,501

128,115

_______________________

(1)

Represents expenses incurred in the thirteen and twenty-six weeks ended June 28, 2015 for the International and Domestic Restaurant Closure Initiatives and expenses incurred for the Domestic Restaurant Closure Initiative during the twenty-six weeks ended June 29, 2014.

(2)

Relates to a payroll tax audit contingency adjustment for the employer's share of FICA taxes related to cash tips allegedly received and unreported by our employees during calendar year 2011, which is recorded in Labor and other related expenses. In addition, a deferred income tax adjustment has been recorded for the allowable income tax credits for the employer's share of FICA taxes expected to be paid, which is included in (Benefit) provision for income taxes and offsets the adjustment to Labor and other related expenses. As a result, there is no impact to Net income from this adjustment.

(3)

Represents non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations.

(4)

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

(5)

Represents asset impairment charges and related costs associated with the decision to sell our corporate aircraft.

(6)

Relates primarily to costs incurred with the secondary offerings of our common stock in March 2015 and March 2014, respectively, and other transaction costs.

(7)

Primarily represents the sale of our Roy's business.

(8)

Relates to the refinancing of our Senior Secured Credit Facility in March 2015 and May 2014, respectively.

(9)

Income tax effect of adjustments for the thirteen and twenty-six weeks ended June 28, 2015 and June 29, 2014, respectively, are calculated based on the statutory rate applicable to jurisdictions in which the above non-GAAP adjustments relate. For the thirteen and twenty-six weeks ended June 28, 2015, a deferred income tax adjustment has been recorded for the allowable income tax credits for the employer's share of FICA taxes expected to be paid. See footnote 2 to this table.

 

Following is a summary of the financial statement line item classification of the net income adjustments in the Consolidated Statements of Operations and Comprehensive Income:

THIRTEEN WEEKS ENDED

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 28, 2015

JUNE 29, 2014

JUNE 28, 2015

JUNE 29, 2014

Cost of sales

$

$

$

$

Labor and other related

(2,671)

(2,671)

Other restaurant operating expense

20

100

(116)

(1,883)

Depreciation and amortization

1,226

1,432

2,492

2,795

General and administrative

286

1,888

2,153

Provision for impaired assets and restaurant closings

436

9,301

5,972

Other expense, net

(121)

1,030

Provision for income taxes

1,047

(4,847)

(2,580)

(7,542)

Loss on extinguishment and modification of debt

2,638

11,092

2,638

11,092

Net adjustments

$

2,861

$

7,777

$

11,982

$

12,587

 

TABLE SEVEN

BLOOMIN' BRANDS, INC.

SEGMENT INCOME FROM OPERATIONS NON-GAAP RECONCILIATION

(UNAUDITED)

U.S. Segment

THIRTEEN WEEKS ENDED

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 28, 2015

JUNE 29, 2014

JUNE 28, 2015

JUNE 29, 2014

Income from operations

$

93,265

$

81,268

$

220,673

$

188,169

Operating income margin

9.5

%

8.4

%

10.8

%

9.5

%

Adjustments:

Restaurant impairments and closing costs (1)

1,336

4,929

Restaurant relocations and related costs (2)

122

1,291

Adjusted income from operations

$

93,387

$

81,268

$

223,300

$

193,098

Adjusted operating income margin

9.5

%

8.4

%

10.9

%

9.8

%

International Segment

(dollars in thousands)

Income from operations

$

5,727

$

8,282

$

14,606

$

24,507

Operating income margin

4.9

%

5.8

%

5.7

%

8.4

%

Adjustments:

Restaurant impairments and closing costs (3)

(63)

7,471

Purchased intangibles amortization (4)

1,123

1,532

2,406

2,990

Adjusted income from operations

$

6,787

$

9,814

$

24,483

$

27,497

Adjusted operating income margin

5.8

%

6.8

%

9.5

%

9.4

%

_______________________

(1)

Represents expenses incurred for the Domestic Restaurant Closure Initiative.

(2)

Represents asset impairment charges and accelerated depreciation incurred in connection with the Company's relocation program.

(3)

Represents expenses incurred for the International Restaurant Closure Initiative.

(4)

Represents non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations.

 

 

TABLE EIGHT

BLOOMIN' BRANDS, INC.

COMPARATIVE STORE INFORMATION

(UNAUDITED)

JUNE 28,

JUNE 29,

2015

2014

Number of restaurants (at end of the period):

U.S.

Outback Steakhouse

Company-owned

649

650

Franchised

105

104

Total

754

754

Carrabba's Italian Grill

Company-owned

244

240

Franchised

2

1

Total

246

241

Bonefish Grill

Company-owned

207

193

Franchised

5

5

Total

212

198

Fleming's Prime Steakhouse & Wine Bar

Company-owned

66

66

Roy's (1)

Company-owned

20

International

Company-owned

Outback Steakhouse - South Korea

76

106

Outback Steakhouse - Brazil (2)

69

54

Other

12

12

Franchised

57

51

Total

214

223

System-wide total

1,492

1,502

_______________________

(1)

On January 26, 2015, we sold our Roy's concept.

(2)

The restaurant counts for Brazil are reported as of May 2015 and 2014, respectively, to correspond with the balance sheet dates of this subsidiary.

 

 

Chris Meyer Group Vice President, IR & Finance (813) 830-5311

 

SOURCE Bloomin' Brands, Inc.



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