DALLAS, Aug 08, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Brinker International, Inc. (NYSE: EAT) announced fiscal 2007 fourth quarter earnings per diluted share from continuing operations increased to $0.71 from $0.57 in the prior year. Before special items, earnings per diluted share from continuing operations increased to $0.57 from $0.46 in the prior year (reconciliation included in Table 5). For the full-year fiscal 2007, earnings per diluted share from continuing operations increased to $1.85 from $1.63 in the prior year. Before special items, earnings per diluted share from continuing operations increased to $1.76 from $1.48 in the prior year (reconciliation included in Table 6).
Doug Brooks, Brinker Chairman and CEO, said, "During fiscal 2007, we not only generated 19 percent EPS growth, exceeding our stated 15 percent goal, but also made significant progress with long term strategies focused on building guest loyalty, redeploying capital and increasing overall shareholder returns. We will continue to drive the business forward in fiscal 2008 with further implementation of these growth strategies as we work towards our vision of being a globally dominant restaurant portfolio company."
Highlights for fiscal year 2007:
-- Increased income from continuing operations, before special items,
13.2 percent over the prior year;
-- Increased quarterly dividend in November by 35 percent and paid out
$40.9 million in dividends during the year;
-- Repurchased 18.6 million common shares for approximately $569.3
million;
-- Opened 149 company-owned and 46 franchised restaurants, including 30
international restaurants;
-- Sold 95 company-owned Chili's restaurants to Pepper Dining, Inc.
("PDI"), a new franchisee, with commitments to develop an additional
14-38 new franchised Chili's locations;
-- Sold 15 Chili's and two On the Border restaurants to franchisees, with
commitments to develop an additional 31 new franchised Chili's and 10
On The Border locations;
-- Signed agreement with an existing franchisee, ERJ Dining IV, LLC
("ERJ"), to sell 76 company-owned Chili's restaurants with commitments
to develop an additional 49 new franchised Chili's locations;
-- In total, the company entered into 18 development agreements with new
or existing franchisees with commitments to build 130-154 restaurants
over time;
-- Increased investment in team members, particularly at the hourly and
restaurant management levels, to improve the overall guest experience,
increase restaurant employee tenure and reduce future restaurant
training and hiring costs;
-- Sold a record $254.7 million in gift cards system wide, redeemable
across Brinker's portfolio of restaurant brands; and
-- Piloted a new customer engagement survey with a system wide rollout
beginning in fiscal 2008.
Table 1: Q4 comparable restaurant sales
Q4 07 and Q4 06, company and four reported brands; percentage
Q4 07 Q4 06 Q4 07
Comparable Comparable Pricing Q4 07
Sales Sales Impact Mix-Shift
Brinker International (2.0) (2.0) 0.8 0.4
Chili's (1.6) (1.6) 0.7 0.3
Macaroni Grill (2.1) (4.5) 1.8 2.1
On The Border (4.7) (2.5) 0.2 (0.1)
Maggiano's (1.3) 1.1 0.9 (1.4)
Table 2: FY comparable restaurant sales
FY 07 and FY 06, company and four reported brands; percentage
FY 07 FY 06 FY 07
Comparable Comparable Pricing FY 07
Sales Sales Impact Mix-Shift
Brinker International (2.7) 1.5 1.6 0.1
Chili's (2.4) 2.5 1.7 (0.3)
Macaroni Grill (3.2) (1.5) 1.6 0.6
On The Border (4.1) (0.4) 1.1 2.0
Maggiano's (1.7) 2.8 1.5 (0.7)
Table 3: Month of June comparable restaurant sales
June 07 and June 06; percentage
June 07 June 06 June 07
Comparable Comparable Pricing June 07
Sales Sales Impact Mix-Shift
Brinker International (1.9) (1.4) 1.0 1.4
Chili's (1.4) (1.4) 0.8 1.7
Macaroni Grill (2.0) (3.5) 1.9 3.2
On The Border (6.4) (0.2) 0.1 (0.8)
Maggiano's (1.4) 1.1 1.5 (2.3)
Table 4: Month of July comparable restaurant sales
July 08 and July 07; percentage
July 08 July 07 July 08
Comparable Comparable Pricing July 08
Sales Sales Impact Mix-Shift
Brinker International (0.1) (2.7) 1.8 1.2
Chili's 2.0 (2.8) 1.9 1.9
Macaroni Grill (4.6) (2.7) 2.0 1.0
On The Border (6.5) (2.8) 0.8 (1.0)
Maggiano's 0.9 (0.9) 1.9 (1.2)
EPS EPS
Income Per Per
Statement $ Share $ Share
Item Line Q4 07 Q4 07 Q4 06 Q4 06
Income from Continuing
Operations 83.6 0.71 73.0 0.57
Other Gains and
Other Gains and Charges Charges (11.0) (0.09) (5.3) (0.04)
Tax Benefit Income Taxes (5.4) (0.05) (8.1) (0.07)
Total Special Items (16.4) (0.14) (13.4) (0.11)
Income from Continuing
Operations, before Special
Items 67.2 0.57 59.6 0.46
EPS EPS
Income Per Per
Statement $ Share $ Share
Item Line FY 07 FY 07 FY 06 FY 06
Income from Continuing
Operations 230.0 1.85 214.0 1.63
Other Gains &
Other Gains and Charges Charges (5.6) (0.05) (12.5) (0.09)
Tax Benefit Income Taxes (5.4) (0.04) (8.1) (0.06)
Total Special Items (11.0) (0.09) (20.6) (0.15)
Income from Continuing
Operations, before Special
Items 219.0 1.76 193.4 1.48
Key assumptions for fiscal 2008 outlook include:
-- Revenue growth of over 1.0 percent based primarily on:
-- Comparable restaurant sales growth of 2.0 to 2.5 percent;
-- Franchise revenue growth of about 44 percent, bringing the total to
about $68 million;
-- Company restaurants sold to franchisees in fiscal 2007 negatively
impact revenue growth in fiscal 2008 by approximately 5.0 to 6.0
percent;
-- Restaurant capacity decline (as measured by average-weighted sales
weeks) of about 2.0 percent; and
-- 148-175 new system restaurant openings (see Table 7 for brand and
ownership detail).
-- General and administrative expenses are expected to be about $200
million;
-- Operating income improvement, including general and administrative
expenses, of about 50 to 60 basis points based on sales leverage,
increased percent of franchise restaurants and higher average
company-operated restaurant margins that will more than offset
expected increased commodity and labor costs of about 90 to 100 basis
points;
-- Interest expense of about $60 million;
-- Effective tax rate of about 30 percent;
-- Diluted weighted average shares of 108 to 110 million; and
-- Capital expenditures of $380-$405 million, including new restaurant
development of $250-275 million and up to $80 million to re-image
Chili's restaurants.
Table 7: FY 08 New development summary
Ownership type; restaurants; percentage
FY 07 Company
Total Owned Franchise Total Restaurant
Restaurants Restaurants Restaurants Restaurants Growth %
Brinker
International 1,801 80-93 68-82 148-175 8-10%
Chili's 1,220 70-75 20-25 90-100 7-8%
Macaroni Grill 230 3-4 7-9 10-13 4-6%
On The Border 158 6-8 6-8 12-16 8-10%
Maggiano's 41 1-3 - 1-3 2-7%
International 152 0-3 35-40 35-43 23-28%
Forward Calendar
-- SEC Form 10-K for fiscal year 2007 filing on or before Aug. 27, 2007;
and
-- First quarter earnings release, before market opens, on Oct. 23,
2007.
BRINKER INTERNATIONAL, INC.
Consolidated Statements of Income
(In thousands, except per share amounts)
Thirteen Week Periods Ended Fifty-Two Week Periods Ended
June 27, June 28, June 27, June 28,
2007 2006 2007 2006
(Unaudited) (Unaudited) (Unaudited)
Revenues $1,142,954 $1,073,522 $4,376,904 $4,151,291
Operating Costs
and Expenses:
Cost of sales 318,616 291,263 1,222,198 1,160,931
Restaurant
expenses (a) 627,200 586,964 2,435,866 2,283,737
Depreciation and
amortization 46,072 47,536 189,162 190,206
General and
administrative 52,691 54,540 194,349 207,080
Other gains and
charges (a) (17,646) (8,532) (8,999) (17,262)
Total operating
costs and
expenses 1,026,933 971,771 4,032,576 3,824,692
Operating income 116,021 101,751 344,328 326,599
Interest expense 11,632 5,662 30,929 22,857
Other, net (2,444) (533) (5,071) (1,656)
Income before
provision for
income taxes 106,833 96,622 318,470 305,398
Provision for
income taxes (b) 23,186 23,615 88,421 91,448
Income from
continuing
operations 83,647 73,007 230,049 213,950
Loss from
discontinued
operations, net
of taxes - - - (1,555)
Net income $83,647 $73,007 $230,049 $212,395
Basic net income
per share:
Income from
continuing
operations $0.73 $0.58 $1.90 $1.66
Loss from
discontinued
operations $0.00 $0.00 $0.00 $(0.01)
Net income
per share $0.73 $0.58 $1.90 $1.65
Diluted net
income per share:
Income from
continuing
operations $0.71 $0.57 $1.85 $1.63
Loss from
discontinued
operations $0.00 $0.00 $0.00 $(0.01)
Net income
per share $0.71 $0.57 $1.85 $1.62
Basic weighted
average shares
outstanding 114,606 126,521 121,062 128,766
Diluted weighted
average shares
outstanding 118,032 128,352 124,116 130,934
(a) Current and prior year gains on the sale of restaurants to
franchisees and gains on the sale of other assets have been
reclassified out of restaurant expenses and into other gains and
charges. Current year other gains and charges includes:
a. Franchising gains of $17.4 million in the fourth quarter and
$19.1 million year-to-date.
b. Gain on the termination of swaps of $3.2 million year-to-date
c. Gain on the sale of real estate of $0.5 million in the fourth
quarter and year-to-date
d. Restructuring and impairment charges totaling $0.3 million for
the fourth quarter and $13.8 million year-to-date.
Prior year other gains and charges includes:
e. Franchising gains of $8.5 million for the fourth quarter and
$15.9 million year-to-date
f. Gain on the sale of real estate of $3.3 million year-to-date
g. Net restructuring and impairment charges of $1.9 million
year-to-date
(b) The provision for income taxes includes income tax benefits
associated with the favorable settlement of certain tax audits of
$6.8 million and $8.1 million in the current and prior year,
respectively.
BRINKER INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 27, June 28,
2007 2006
(Unaudited)
ASSETS
Current assets $270,839 $232,733
Assets held for sale 93,342 216,342
Net property and equipment(a) 1,770,575 1,592,351
Total other assets 183,265 180,353
Total assets $2,318,021 $2,221,779
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities $522,068 $490,038
Liabilities associated with
assets held for sale 3,014 7,860
Long-term debt, less current installments 826,918 500,515
Other liabilities 160,932 147,534
Total shareholders' equity 805,089 1,075,832
Total liabilities and shareholders' equity $2,318,021 $2,221,779
(a) At June 27, 2007, the company owned the land and buildings for 312 of
the 1,312 company-owned restaurants. The net book values of the land
and buildings associated with these restaurants totaled $264.8 million
and $260.4 million, respectively.
BRINKER INTERNATIONAL, INC.
RESTAURANT SUMMARY
Fourth Fourth
Quarter Quarter
Total Openings/ Closings/ Total Projected
Restaurants Acquisitions(a) Sales Restaurants Openings
March 28, Fiscal Fiscal June 27, Fiscal
2007 2007 2007 2007 2008
Company-Owned
Restaurants:
Chili's 977 37 (97) 917 70-75
Macaroni Grill 216 1 - 217 3-4
On The Border 131 3 (2) 132 6-8
Maggiano's 40 1 - 41 1-3
International(b) 5 - - 5 0-3
1,369 42 (99) 1,312 80-93
Franchise
Restaurants:
Chili's 206 97 - 303 20-25
Macaroni Grill 13 - - 13 7-9
On The Border 25 1 - 26 6-8
International(b) 141 7 (1) 147 35-40
385 105 (1) 489 68-82
Total Restaurants:
Chili's 1,183 134 (97) 1,220 90-100
Macaroni Grill 229 1 - 230 10-13
On The Border 156 4 (2) 158 12-16
Maggiano's 40 1 - 41 1-3
International 146 7 (1) 152 35-43
1,754 147 (100) 1,801 148-175
(a) During the fourth quarter of fiscal 2007, the company sold 95 Chili's
and one On The Border restaurant to a franchisee. The company and
its franchisees opened a total of 51 new restaurants during the
quarter ended June 27, 2007.
(b) At the end of the fourth quarter of fiscal year 2007, international
company-owned restaurants by brand were four Chili's and one Macaroni
Grill. International franchise restaurants by brand were 137 Chili's
and 10 Macaroni Grill's.
Brinker International, Inc. is one of the world's leading casual dining restaurant companies.