DALLAS, Oct 23, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Brinker International, Inc. (NYSE: EAT) announced fiscal 2008 first quarter earnings per diluted share from continuing operations increased to $0.35 from $0.32 in the prior year. Before special items, earnings per diluted share from continuing operations increased to $0.35 from $0.30 in the prior year (reconciliation included in Table 3).
In August, the company announced that it had begun exploring the potential sale of the Romano's Macaroni Grill restaurant chain. During the first quarter of 2008, the company made significant progress in its search for a buyer, which allowed management to commit to a plan to sell the brand. A deal is expected to close in late fiscal 2008. Therefore, Macaroni Grill has been presented as discontinued operations in the company's financial statements beginning in the first quarter of fiscal 2008. Before special items, earnings per diluted share from discontinued operations decreased 33 percent from $0.06 in the first quarter of fiscal 2007 to $0.04 in the current quarter (reconciliation included in Table 4). All amounts presented in this release are related to continuing operations unless otherwise stated.
Highlights for the first quarter 2008:
-- Revenues increased 3 percent;
-- Company-owned and franchise restaurants, or system restaurants,
increased 12 percent;
-- New company restaurant growth was partially offset by selling company
restaurants to franchisees resulting in net capacity growth of 3
percent (as measured by average-weighted sales weeks);
-- Revenues from franchisees increased 33 percent;
-- Operating income before special items from continuing operations
increased 10 percent (reconciliation included in Table 2);
-- Five million common shares were repurchased by the company for
approximately $140 million; and
-- The company entered into two development agreements with new or
existing franchisees with commitments to build 57 restaurants over the
next several years.
Table 1: Q1 comparable restaurant sales
Q1 08 and Q1 07, company and three reported brands; percentage
Q1 08 Q1 07 Q1 08
Comparable Comparable Pricing Q1 08
Sales Sales Impact Mix-Shift
Brinker
International(1) 0.0 (2.2) 1.9 0.9
Chili's 0.7 (2.3) 2.0 1.5
On The Border (5.3) (2.2) 1.2 (0.9)
Maggiano's 0.5 (1.5) 2.0 (1.9)
(1) Brinker International comparable restaurant sales exclude the impact
of Macaroni Grill.
Special Items
Table 2: Reconciliation of operating income from continuing operations,
before special items Q1 08 and Q1 07; $ millions
$ $
Item Q1 08 Q1 07
Operating Income from Continuing Operations 67.3 64.7
Other Gains and Charges 0.5 (3.2)
Operating Income from Continuing Operations,
before Special Items 67.8 61.5
Table 3: Reconciliation of income from continuing operations, before
special items Q1 08 and Q1 07; $ millions and $ per diluted share after-
tax
EPS EPS
Per Per
$ Share $ Share
Item Q1 08 Q1 08 Q1 07 Q1 07
Income from Continuing Operations 38.5 0.35 40.1 0.32
Other Gains and Charges 0.3 0.00 (2.0) (0.02)
Income from Continuing Operations,
before Special Items 38.8 0.35 38.1 0.30
EPS EPS
Per Per
$ Share $ Share
Item Q1 08 Q1 08 Q1 07 Q1 07
Income (Loss) from Discontinued
Operations (0.9) (0.01) 7.5 0.06
Other Gains and Charges 5.1 0.05 0.0 0.00
Income from Discontinued
Operations, before Special Items 4.2 0.04 7.5 0.06
Table 5: Reconciliation of net income, before special items
Q1 08 and Q1 07; $ millions and $ per diluted share after-tax
EPS EPS
Per Per
$ Share $ Share
Item Q1 08 Q1 08 Q1 07 Q1 07
Net Income 37.6 0.34 47.6 0.38
Other Gains and Charges 5.4 0.05 (2.0) (0.02)
Net Income, before Special Items 43.0 0.39 45.6 0.36
BRINKER INTERNATIONAL, INC.
Consolidated Statements of Income
(In thousands, except per share amounts)
Thirteen Week Periods Ended
Sept 26, Sept 27,
2007 2006
(Unaudited) (Unaudited)
Revenues $895,086 $869,283
Operating Costs and Expenses:
Cost of sales 245,618 238,415
Restaurant expenses 502,153 481,002
Depreciation and
amortization 38,535 40,230
General and
administrative 40,938 48,140
Other gains and
charges (a) 512 (3,241)
Total operating costs and
expenses 827,756 804,546
Operating income 67,330 64,737
Interest expense 12,915 6,237
Other, net (1,257) (837)
Income before provision for
income taxes 55,672 59,337
Provision for income taxes 17,136 19,265
Income from continuing
operations 38,536 40,072
(Loss) income from
discontinued operations, (936) 7,567
net of taxes (b)
Net income $37,600 $47,639
Basic net income per share:
Income from continuing
operations $0.36 $0.32
(Loss) income from
discontinued operations $(0.01) $0.06
Net income per share $0.35 $0.38
Diluted net income per share:
Income from continuing
operations $0.35 $0.32
(Loss) income from
discontinued operations $(0.01) $0.06
Net income per share $0.34 $0.38
Basic weighted average
Shares outstanding 106,464 124,280
Diluted weighted average
Shares outstanding 109,155 126,098
(a) Prior quarter other gains and charges includes a gain on the
termination of swaps of $3.2 million.
(b) (Loss)income from discontinued operations, net of taxes, includes
other gains and charges of $(5.1) million, primarily related to
impairment charges and stock-based compensation expense resulting from
the expected sale of Macaroni Grill. As a result, income from
operations before special items was $4.2 million during the first
quarter of fiscal 2008.
BRINKER INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Sept 26, June 27,
2007 2007
(Unaudited)
ASSETS
Current assets of continuing
operations $235,330 $250,478
Assets held for sale 407,172 417,842
Net property and equipment(a) 1,469,586
1,482,133
Total other assets 189,148 180,115
Total assets $2,313,783 $2,318,021
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities of continuing
operations $480,551 $521,136
Liabilities associated with assets
held for sale 21,416 21,046
Long-term debt, less current
installments 952,995 826,918
Other liabilities 162,471 143,832
Total shareholders' equity 696,350 805,089
Total liabilities and $2,313,783 $2,318,021
shareholders' equity
(a) At September 26, 2007, the company owned the land and buildings for
258 of the 1,110 company-owned restaurants (excluding Macaroni Grill).
The net book values of the land and buildings associated with these
restaurants totaled $203.6 million and $214.2 million, respectively.
BRINKER INTERNATIONAL, INC.
RESTAURANT SUMMARY
First First Total Projected
Total Quarter Quarter Restaurants Openings
Restaurants Openings Closings Sept 26, Fiscal
June 27, 2007 Fiscal 2008 Fiscal 2008 2007 2008
Company-Owned
Restaurants:
Chili's 917 13 - 930 64-67
Macaroni Grill 217 - (1) 216 3
On The Border 132 2 - 134 7-9
Maggiano's 41 - - 41 1-3
International(a) 5 - - 5 0-3
1,312 15 (1) 1,326 75-85
Franchise
Restaurants:
Chili's 303 5 - 308 24-29
Macaroni Grill 13 1 - 14 8-10
On The Border 26 2 - 28 6-8
International(a) 147 4 - 151 40-45
489 12 - 501 78-92
Total System
Restaurants:
Chili's 1,220 18 - 1,238 88-96
Macaroni Grill 230 1 (1) 230 11-13
On The Border 158 4 - 162 13-17
Maggiano's 41 - - 41 1-3
International 152 4 - 156 40-48
1,801 27 (1) 1,827 153-177
(a) At the end of the first quarter of fiscal year 2008, international
company-owned restaurants by brand were four Chili's and one Macaroni
Grill. International franchise restaurants by brand were 141 Chili's
and 10 Macaroni Grill's.
Contacts: Stacey Calbert Lynn Schweinfurth
Media Relations Investor Relations
(800) 775-7290 (972) 770-7228
Brinker International, Inc. is one of the world's leading casual dining restaurant companies.