DALLAS, Aug. 12, 2020 /PRNewswire/ -- Brinker
International, Inc. (NYSE: EAT) today provided a business update
related to the first quarter of fiscal 2021 and announced results
for the fourth quarter and fiscal year 2020 ended June 24,
2020.
"Our continued strategic focus on value, off-premise, digital
and scale is allowing us to successfully navigate through the
pandemic," said Wyman Roberts, Chief
Executive Officer and President of Brinker International. "Leaning
into these existing strategies with a clear focus and continually
prioritizing the safety of our Team Members and Guests has allowed
us to accelerate our performance and deliver industry leading
results."
Fiscal 2021 First Quarter-to-Date Highlights
During the first quarter of fiscal 2021 Chili's and Maggiano's
continue to operate with reduced dining room capacities due to
state and local mandates related to COVID-19. The following
represents a business update from our first period of fiscal 2021
ended July 29, 2020, related to Company-owned restaurants:
- As of July 29, 2020, there were
885 Chili's and 52 Maggiano's Company-owned restaurants with dining
rooms or patios open, representing 84.0% of total Company-owned
restaurants. Capacities are limited in accordance with state and
local mandates
- Comparable restaurant sales for the first period of fiscal
2021, ended July 29, 2020, compared
to the prior year are as follows:
|
Comparable
Restaurant Sales
|
|
Opened Dining
Rooms
|
|
Off-Premise
Only
|
|
Total
Comparable
Restaurant Sales
|
Chili's
|
(3.8)
|
%
|
|
(46.3)
|
%
|
|
(10.9)
|
%
|
Maggiano's
|
(44.6)
|
%
|
|
N/A
|
|
|
(44.6)
|
%
|
- It's Just Wings™, a
virtual brand offering through our partnership with Doordash,
launched nationally in 1,050 of our Company-owned restaurants on
June 23, 2020. It's Just Wings sales are included in comparable
restaurant sales for restaurants operating the virtual brand
- Brinker had total liquidity of $576.2
million as of July 29,
2020
Fiscal 2021 Outlook
We are providing a financial outlook for the first quarter of
fiscal 2021 quarter instead of our usual practice of providing an
annual outlook. Forecasting longer term business performance is not
reliable given the uncertainties created by the ongoing COVID-19
pandemic. We plan to update our financial outlook on a quarterly
basis until such time we can reliably forecast on a longer term
basis.
First Quarter of Fiscal 2021 Guidance
- Adjusted net loss per diluted share is expected to be in the
range of $0.40 to $0.25
- Comparable restaurant sales are expected to be down low to
mid-teens
- Operating cash flow is expected to be positive
- Weighted average diluted shares is expected to be 45.0 million
to 46.0 million
Fiscal 2021 is a 53-week year, and includes an extra operating
week in the fourth quarter.
We are unable to reliably forecast special items such as
restaurant impairments, restaurant closures, reorganization charges
and legal settlements without unreasonable effort. As such, we do
not present a reconciliation of forecasted non-GAAP measures to the
corresponding GAAP measures. If special items are reported during
fiscal 2021, reconciliations to the appropriate GAAP measures will
be provided.
Fiscal 2020 Highlights - Fourth Quarter and Fiscal
Year
Financial metrics of the fourth quarter of fiscal 2020 compared
to the fourth quarter of fiscal 2019, and fiscal year 2020 compared
to fiscal year 2019, were negatively impacted due to the COVID-19
pandemic, partially offset by the acquisition of 116 Chili's
restaurants in the first quarter of fiscal 2020 and increased
off-premise sales. For non-GAAP information and related
reconciliations, refer to the tables and information at the end of
this earnings release.
- Reported earnings per diluted share was a loss of $1.20 in the fourth quarter of fiscal 2020, and
earnings of $0.63 in fiscal 2020
- Adjusted earnings per diluted share was a loss of $0.88 in the fourth quarter of fiscal 2020, and
earnings of $1.71 in fiscal 2020
- Cash flows from operating activities in the full fiscal year
2020 were $245.0 million, and capital
expenditures totaled $104.5 million
resulting in free cash flow of $140.5
million
|
Fourth
Quarter
|
|
Fiscal
Year
|
Financial
Metrics
|
2020
|
|
2019
|
|
%
Change
|
|
2020
|
|
2019
|
|
%
Change
|
Company
sales
|
$
|
553.1
|
|
|
$
|
804.8
|
|
|
(31.3)
|
%
|
|
$
|
3,004.9
|
|
|
$
|
3,106.2
|
|
|
(3.3)
|
%
|
Total
revenues
|
$
|
563.2
|
|
|
$
|
834.1
|
|
|
(32.5)
|
%
|
|
$
|
3,078.5
|
|
|
$
|
3,217.9
|
|
|
(4.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
(53.2)
|
|
|
$
|
64.0
|
|
|
(183.1)
|
%
|
|
$
|
62.6
|
|
|
$
|
230.7
|
|
|
(72.9)
|
%
|
Operating income
(loss) as a percentage of Total revenues
|
(9.4)
|
%
|
|
7.7
|
%
|
|
(17.1)
|
%
|
|
2.0
|
%
|
|
7.2
|
%
|
|
(5.2)
|
%
|
Restaurant operating
margin, non-GAAP(1)
|
$
|
35.2
|
|
|
$
|
119.8
|
|
|
(70.6)
|
%
|
|
$
|
335.0
|
|
|
$
|
411.2
|
|
|
(18.5)
|
%
|
Restaurant operating
margin as a percentage of Company sales, non-GAAP
|
6.4
|
%
|
|
14.9
|
%
|
|
(8.5)
|
%
|
|
11.1
|
%
|
|
13.2
|
%
|
|
(2.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
diluted share
|
$
|
(1.20)
|
|
|
$
|
1.22
|
|
|
(198.4)
|
%
|
|
$
|
0.63
|
|
|
$
|
3.96
|
|
|
(84.1)
|
%
|
Earnings (loss) per
diluted share, adjusted, non-GAAP
|
$
|
(0.88)
|
|
|
$
|
1.36
|
|
|
(164.7)
|
%
|
|
$
|
1.71
|
|
|
$
|
3.93
|
|
|
(56.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Restaurant Sales - Company Owned
|
Q4: 20 vs
19
|
|
Q4: 19 vs
18
|
|
|
|
FY: 20 vs
19
|
|
FY: 19 vs
18
|
|
|
Brinker
|
(36.7)
|
%
|
|
1.2
|
%
|
|
|
|
(10.1)
|
%
|
|
2.1
|
%
|
|
|
Chili's
|
(32.2)
|
%
|
|
1.5
|
%
|
|
|
|
(8.6)
|
%
|
|
2.3
|
%
|
|
|
Maggiano's
|
(66.7)
|
%
|
|
(0.2)
|
%
|
|
|
|
(19.9)
|
%
|
|
0.6
|
%
|
|
|
|
|
(1)
|
Restaurant operating
margin is defined as Company sales less Company restaurant expenses
that includes Food and beverage costs, Restaurant labor and
Restaurant expenses, and excludes Depreciation and amortization,
General and administrative and Other (gains) and charges (see
non-GAAP reconciliation below)
|
Fiscal 2020 Quarterly Operating Performance
Segment Performance
|
Chili's
|
|
Maggiano's
|
|
Fourth
Quarter
|
|
Favorable
(Unfavorable)
Variance
|
|
Fourth
Quarter
|
|
Favorable
(Unfavorable)
Variance
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
Company
sales
|
$
|
518.9
|
|
|
$
|
701.9
|
|
|
$
|
(183.0)
|
|
|
$
|
34.2
|
|
|
$
|
102.9
|
|
|
$
|
(68.7)
|
|
Franchise and other
revenues
|
9.7
|
|
|
23.5
|
|
|
(13.8)
|
|
|
0.4
|
|
|
5.8
|
|
|
(5.4)
|
|
Total
revenues
|
528.6
|
|
|
725.4
|
|
|
(196.8)
|
|
|
34.6
|
|
|
108.7
|
|
|
(74.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company restaurant
expenses
|
478.2
|
|
|
595.3
|
|
|
117.1
|
|
|
39.5
|
|
|
89.6
|
|
|
50.1
|
|
Company restaurant
expenses as a % of Company sales
|
92.2
|
%
|
|
84.8
|
%
|
|
(7.4)
|
%
|
|
115.5
|
%
|
|
87.1
|
%
|
|
(28.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(4.2)
|
|
|
82.0
|
|
|
(86.2)
|
|
|
(14.2)
|
|
|
12.1
|
|
|
(26.3)
|
|
Operating income
(loss) as a % of Total revenues
|
(0.8)
|
%
|
|
11.3
|
%
|
|
(12.1)
|
%
|
|
(41.0)
|
%
|
|
11.1
|
%
|
|
(52.1)
|
%
|
Restaurant operating
margin - non-GAAP
|
40.7
|
|
|
106.6
|
|
|
(65.9)
|
|
|
(5.3)
|
|
|
13.3
|
|
|
(18.6)
|
|
Restaurant operating
margin as a % of Company sales - non-GAAP
|
7.8
|
%
|
|
15.2
|
%
|
|
(7.4)
|
%
|
|
(15.5)
|
%
|
|
12.9
|
%
|
|
(28.4)
|
%
|
Chili's
- Chili's Company sales and Total revenues decreased primarily
due to the COVID-19 pandemic that impacted restaurant sales due to
guests dining out less, temporary dining room closures and capacity
limitations, partially offset by the acquisition of 116 Chili's
restaurants in the first quarter of fiscal 2020 and increased
off-premise sales
- Chili's Company restaurant expenses, as a percentage of Company
sales, increased primarily due to sales deleverage as a result of
COVID-19, higher expenses primarily related to delivery fees and
supplies in connection with the growth in off-premise sales, and
unfavorable commodity pricing. These increases were partially
offset by lower advertising expenses, lower manager and hourly
labor expenses as a result of COVID-19 decreased sales and
closures, lower repairs and maintenance expenses, and favorable
menu item mix
Maggiano's
- Maggiano's Company sales and Total revenues decreased due to
lower comparable restaurant sales driven by guests dining out less,
temporary dining and banquet room closures and limited capacity of
reopened locations from the COVID-19 pandemic, partially offset by
increased off-premise sales
- Maggiano's Company restaurant expenses, as a percentage of
Company sales increased primarily due to sales deleverage as a
result of COVID-19, higher expenses primarily related to delivery
fees and supplies in connection with the growth in off-premise
sales, and unfavorable commodity pricing. These increases were
partially offset by lower manager and hourly labor expenses as a
result of COVID-19 decreased sales and closures, lower repairs and
maintenance expenses, favorable menu item mix primarily related to
seafood, lower utilities expenses, and favorable menu pricing
Franchise and other revenues
- Franchise and other revenues include royalties and advertising
fees that are based on franchise sales. Our franchisees generated
sales of approximately $82.4 million
in the fourth quarter of fiscal 2020 compared to $331.7 million in the fourth quarter of fiscal
2019. This decrease is primarily due to the adverse impact of the
COVID-19 pandemic on our domestic and global franchise restaurants,
and the acquisition of 116 Chili's restaurants from a franchisee in
the first quarter of fiscal 2020
- Maggiano's Franchise and other revenues decreased primarily due
to lower banquet fee income as a result of the COVID-19
pandemic
Income Taxes
- On a GAAP basis, the effective income tax rate was a benefit of
27.8% in the fourth quarter of fiscal 2020 compared to an expense
of 5.1% in the fourth quarter of fiscal 2019 primarily driven by
the impact of a net loss before income taxes, due to reduced
profitability related to the COVID-19 pandemic, and the leverage on
the FICA tax credit relative to the net loss before income taxes in
fiscal 2020. Excluding the impact of special items (see non-GAAP
reconciliation below for details), the effective income rate was a
benefit of 26.9% in the fourth quarter of fiscal 2020 compared to
an expense of 10.1% in the fourth quarter of fiscal 2019
Webcast Information
Investors and interested parties are invited to listen to
today's conference call, as management will provide further details
of the quarter. The call will broadcast live on Brinker's website
today, August 12, 2020 at 9 a.m.
CDT:
http://investors.brinker.com/events/event-details/q4-2020-brinker-international-earnings-conference-call
For those who are unable to listen to the live broadcast, a
replay of the call will be available shortly thereafter and will
remain on Brinker's website until the end of the day August
26, 2020.
Additional financial information, including statements of income
which detail operations excluding special items, franchise and
other revenues, and comparable restaurant sales trends by brand, is
also available on Brinker's website under the Financial Information
section of the Investor tab.
Forward Calendar
- SEC Form 10-K for fiscal 2020 filing on or before August 24, 2020
- Earnings release call for the first quarter of fiscal 2021 on
October 28, 2020
Non-GAAP Measures
Brinker management uses certain non-GAAP measures in analyzing
operating performance and believes that the presentation of these
measures in this release provides investors with information that
is beneficial to gaining an understanding of the Company's
financial results. Non-GAAP disclosures should not be viewed as a
substitute for financial results determined in accordance with
GAAP, nor are they necessarily comparable to non-GAAP performance
measures that may be presented by other companies. Reconciliations
of these non-GAAP measures are included in the tables below.
About Brinker
Brinker International, Inc. is one of the world's leading casual
dining restaurant companies. Based in Dallas, Texas, as of June 24, 2020,
Brinker owned, operated, or franchised 1,663 restaurants under the
names Chili's® Grill & Bar (1,610 restaurants) and
Maggiano's Little Italy® (53 restaurants).
Forward-Looking Statements
The statements and tables contained in this release that are not
historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements are
based on our current plans and expectations and involve risks and
uncertainties which could cause actual results to differ materially
from our historical results or from those projected in
forward-looking statements, and are currently, or in the future
could be, amplified by the novel strain of the coronavirus
("COVID-19") pandemic. Such risks and uncertainties include, among
other things, uncertainty of the magnitude, duration, geographic
reach and impact of the COVID-19 pandemic on local, national and
global economies; the current, and uncertain future, impact of the
COVID-19 pandemic and governments' responses to it on our industry,
business, growth, reputation, projections, prospects, financial
condition, operations, cash flows, and liquidity; the adequacy or
effectiveness of steps we take to respond to the COVID-19 crisis,
including cost reduction or other mitigation programs; the impact
of competition; changes in consumer preferences; consumer
perception of food safety; reduced disposable income; unfavorable
publicity; increased minimum wages; governmental regulations; the
impact of mergers, acquisitions, divestitures and other strategic
transactions; the Company's ability to meet its business strategy
plan; loss of key management personnel; failure to hire and retain
high-quality restaurant management; the impact of social media;
failure to protect the security of data of our guests and team
members; product availability; regional business and economic
conditions; litigation; franchisee success; inflation; changes in
the retail industry; technology failures; failure to protect our
intellectual property; outsourcing; impairment of goodwill or
assets; failure to maintain effective internal control over
financial reporting; actions of activist shareholders; adverse
weather conditions; terrorist acts; health epidemics or pandemics
(such as COVID-19); and tax reform; as well as the risks and
uncertainties described in "Risk Factors" in our Annual Report on
Form 10-K and future filings with the Securities and Exchange
Commission.
BRINKER
INTERNATIONAL, INC.
|
Consolidated
Statements of Comprehensive Income (Unaudited)
|
(In millions,
except per share amounts)
|
|
|
Thirteen Week
Periods Ended
|
|
Fifty-Two Week
Periods Ended
|
|
June 24,
2020
|
|
June 26,
2019
|
|
June 24,
2020
|
|
June 26,
2019
|
Revenues
|
|
|
|
|
|
|
|
Company
sales
|
$
|
553.1
|
|
|
$
|
804.8
|
|
|
$
|
3,004.9
|
|
|
$
|
3,106.2
|
|
Franchise and other
revenues(1)
|
10.1
|
|
|
29.3
|
|
|
73.6
|
|
|
111.7
|
|
Total
revenues
|
563.2
|
|
|
834.1
|
|
|
3,078.5
|
|
|
3,217.9
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Food and beverage
costs
|
145.0
|
|
|
213.5
|
|
|
798.6
|
|
|
823.0
|
|
Restaurant
labor
|
199.3
|
|
|
268.6
|
|
|
1,045.5
|
|
|
1,059.7
|
|
Restaurant
expenses
|
173.6
|
|
|
202.9
|
|
|
825.8
|
|
|
812.3
|
|
Depreciation and
amortization
|
41.4
|
|
|
38.1
|
|
|
162.3
|
|
|
147.6
|
|
General and
administrative
|
40.4
|
|
|
39.1
|
|
|
136.3
|
|
|
149.1
|
|
Other (gains) and
charges(2)
|
16.7
|
|
|
7.9
|
|
|
47.4
|
|
|
(4.5)
|
|
Total operating costs
and expenses
|
616.4
|
|
|
770.1
|
|
|
3,015.9
|
|
|
2,987.2
|
|
Operating income
(loss)
|
(53.2)
|
|
|
64.0
|
|
|
62.6
|
|
|
230.7
|
|
Interest
expenses
|
15.4
|
|
|
15.3
|
|
|
59.6
|
|
|
61.6
|
|
Other (income),
net
|
(0.5)
|
|
|
(0.5)
|
|
|
(1.9)
|
|
|
(2.7)
|
|
Income (loss) before
income taxes
|
(68.1)
|
|
|
49.2
|
|
|
4.9
|
|
|
171.8
|
|
Provision (benefit)
for income taxes
|
(18.9)
|
|
|
2.5
|
|
|
(19.5)
|
|
|
16.9
|
|
Net income
(loss)
|
$
|
(49.2)
|
|
|
$
|
46.7
|
|
|
$
|
24.4
|
|
|
$
|
154.9
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
$
|
(1.20)
|
|
|
$
|
1.25
|
|
|
$
|
0.64
|
|
|
$
|
4.04
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share
|
$
|
(1.20)
|
|
|
$
|
1.22
|
|
|
$
|
0.63
|
|
|
$
|
3.96
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
40.9
|
|
|
37.5
|
|
|
38.2
|
|
|
38.3
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
40.9
|
|
|
38.3
|
|
|
38.9
|
|
|
39.1
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments(3)
|
$
|
0.5
|
|
|
$
|
0.3
|
|
|
$
|
(0.6)
|
|
|
$
|
0.2
|
|
Other comprehensive
income (loss)
|
0.5
|
|
|
0.3
|
|
|
(0.6)
|
|
|
0.2
|
|
Comprehensive income
(loss)
|
$
|
(48.7)
|
|
|
$
|
47.0
|
|
|
$
|
23.8
|
|
|
$
|
155.1
|
|
|
|
(1)
|
Franchise and other
revenues include Royalties and Franchise fees and other revenues.
Franchise fees and other revenues include gift card breakage,
Maggiano's banquet service charge income, franchise advertising
fees, delivery fee income, digital entertainment revenues, gift
card equalization, franchise and development fees, merchandise
income, retail royalty revenues, and gift card discount costs from
third-party gift card sales.
|
|
|
(2)
|
Other (gains) and
charges included in the Consolidated Statements of Comprehensive
Income (Unaudited) included (in millions):
|
|
|
|
Thirteen Week
Periods Ended
|
|
Fifty-Two Week
Periods Ended
|
|
June 24,
2020
|
|
June 26,
2019
|
|
June 24,
2020
|
|
June 26,
2019
|
Restaurant impairment
charges
|
$
|
14.5
|
|
|
$
|
9.8
|
|
|
$
|
19.1
|
|
|
$
|
10.8
|
|
COVID-19 related
charges, net of (credits)
|
(3.9)
|
|
|
—
|
|
|
12.2
|
|
|
—
|
|
Restaurant closure
charges
|
0.4
|
|
|
0.3
|
|
|
3.8
|
|
|
4.3
|
|
Remodel-related
costs
|
1.1
|
|
|
2.9
|
|
|
3.2
|
|
|
7.7
|
|
Severance and other
benefit charges
|
2.7
|
|
|
0.7
|
|
|
3.2
|
|
|
0.9
|
|
Corporate
headquarters relocation charges
|
0.2
|
|
|
0.1
|
|
|
1.1
|
|
|
6.3
|
|
Property damages, net
of (insurance recoveries)
|
(0.1)
|
|
|
(0.2)
|
|
|
(0.7)
|
|
|
(0.7)
|
|
(Gain) on sale of
assets, net
|
(0.2)
|
|
|
(0.1)
|
|
|
(0.2)
|
|
|
(6.9)
|
|
Sale leaseback
(gain), net of transaction charges
|
—
|
|
|
(5.3)
|
|
|
—
|
|
|
(27.3)
|
|
Other
|
2.0
|
|
|
(0.3)
|
|
|
5.7
|
|
|
0.4
|
|
|
$
|
16.7
|
|
|
$
|
7.9
|
|
|
$
|
47.4
|
|
|
$
|
(4.5)
|
|
|
|
(3)
|
Foreign currency
translation adjustment included in our Comprehensive income in
the Consolidated Statements of Comprehensive Income (Unaudited)
represents the unrealized impact of translating the financial
statements of our Canadian restaurants from Canadian dollars to
U.S. dollars. This amount is not included in Net income and would
only be realized upon disposition of these restaurants.
|
BRINKER
INTERNATIONAL, INC.
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In
millions)
|
|
|
June 24, 2020
|
|
June 26, 2019
|
ASSETS
|
|
|
|
Total current
assets
|
$
|
224.4
|
|
|
$
|
177.0
|
|
Net property and
equipment
|
805.3
|
|
|
755.1
|
|
Operating lease
assets
|
1,054.6
|
|
|
—
|
|
Deferred income
taxes, net
|
38.2
|
|
|
112.0
|
|
Other
assets
|
233.5
|
|
|
214.2
|
|
Total
assets
|
$
|
2,356.0
|
|
|
$
|
1,258.3
|
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
Total current
liabilities
|
$
|
497.9
|
|
|
$
|
421.6
|
|
Long-term debt and
finance leases, less current installments
|
1,208.5
|
|
|
1,206.6
|
|
Long-term operating
lease liabilities, less current portion
|
1,061.6
|
|
|
—
|
|
Deferred gain on sale
leaseback transactions
|
—
|
|
|
255.3
|
|
Other
liabilities
|
67.1
|
|
|
153.0
|
|
Total shareholders'
deficit
|
(479.1)
|
|
|
(778.2)
|
|
Total liabilities and
shareholders' deficit
|
$
|
2,356.0
|
|
|
$
|
1,258.3
|
|
The Condensed Consolidated Balance Sheets (Unaudited) at
June 24, 2020 included the final purchase price allocation for
the 116 Chili's restaurants acquired on September 5, 2019. Of the 1,116 Company-owned
restaurant locations, at June 24, 2020, we own both building
and land for 43 restaurant locations. The related book values
associated with these restaurants included land of $34.1 million and buildings of $13.9 million.
Additionally, effective fiscal 2020, we adopted ASC 842, the new
lease accounting standard that required us to recognize operating
lease assets and liabilities in the balance sheet. Upon adoption,
we eliminated the remaining deferred balance associated with the
fiscal 2019 sale leaseback transactions gain and related deferred
tax asset. Under our historical accounting, operating leases were
not recognized in the balance sheet. Prior results have not been
restated for the impact of this accounting change.
BRINKER
INTERNATIONAL, INC.
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(In
millions)
|
|
|
Fifty-Two Week
Periods Ended
|
|
June 24,
2020
|
|
June 26,
2019
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
|
24.4
|
|
|
$
|
154.9
|
|
Adjustments to
reconcile Net income to Net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
162.3
|
|
|
147.6
|
|
Stock-based
compensation
|
14.8
|
|
|
16.4
|
|
Restructure charges
and other impairments
|
28.9
|
|
|
26.5
|
|
Net loss (gain) on
disposal of assets
|
1.2
|
|
|
(33.1)
|
|
Other
|
2.8
|
|
|
3.0
|
|
Changes in assets and
liabilities
|
10.6
|
|
|
(102.6)
|
|
Net cash provided by
operating activities
|
245.0
|
|
|
212.7
|
|
Cash flows from
investing activities
|
|
|
|
Payments for property
and equipment
|
(104.5)
|
|
|
(167.6)
|
|
Payments for
franchise restaurant acquisitions
|
(94.6)
|
|
|
(3.1)
|
|
Proceeds from note
receivable
|
2.8
|
|
|
2.8
|
|
Proceeds from sale of
assets
|
1.2
|
|
|
1.6
|
|
Insurance
recoveries
|
1.1
|
|
|
1.7
|
|
Proceeds from sale
leaseback transactions, net of related expenses
|
—
|
|
|
485.9
|
|
Net cash (used in)
provided by investing activities
|
(194.0)
|
|
|
321.3
|
|
Cash flows from
financing activities
|
|
|
|
Payments on revolving
credit facility
|
(858.8)
|
|
|
(1,150.0)
|
|
Borrowings on
revolving credit facility
|
808.4
|
|
|
853.0
|
|
Payments of
dividends
|
(57.4)
|
|
|
(60.3)
|
|
Purchases of treasury
stock
|
(32.4)
|
|
|
(167.7)
|
|
Payments on long-term
debt
|
(17.8)
|
|
|
(9.5)
|
|
Payments for common
stock issuance costs
|
(7.8)
|
|
|
—
|
|
Payments for debt
issuance costs
|
(3.2)
|
|
|
—
|
|
Proceeds from
issuance of common stock
|
146.9
|
|
|
—
|
|
Proceeds from
issuance of treasury stock
|
1.6
|
|
|
3.0
|
|
Net cash used in
financing activities
|
(20.5)
|
|
|
(531.5)
|
|
Net change in cash
and cash equivalents
|
30.5
|
|
|
2.5
|
|
Cash and cash
equivalents at beginning of period
|
13.4
|
|
|
10.9
|
|
Cash and cash
equivalents at end of period
|
$
|
43.9
|
|
|
$
|
13.4
|
|
BRINKER
INTERNATIONAL, INC.
|
Restaurant
Summary
|
|
|
|
|
|
|
New
Openings
|
|
|
|
|
|
Fiscal
2020
|
|
Fiscal
2021
|
|
Total
Restaurants
Open at June 24,
2020
|
|
Total
Restaurants
Open at June 26,
2019
|
|
Fourth Quarter
Openings
|
|
Fiscal Year
Openings
|
|
Full Year
Projected
Openings
|
Company-owned
restaurants
|
|
|
|
|
|
|
|
|
|
Chili's
domestic
|
1,059
|
|
|
944
|
|
|
0
|
|
|
6
|
|
|
7
|
|
Chili's
international
|
5
|
|
|
5
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Maggiano's
domestic
|
52
|
|
|
52
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Total
Company-owned
|
1,116
|
|
|
1,001
|
|
|
0
|
|
|
6
|
|
|
7
|
|
Franchise
restaurants
|
|
|
|
|
|
|
|
|
|
Chili's
domestic
|
174
|
|
|
298
|
|
|
0
|
|
|
2
|
|
|
1-3
|
|
Chili's
international
|
372
|
|
|
365
|
|
|
0
|
|
|
23
|
|
|
6-9
|
|
Maggiano's
domestic
|
1
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
1
|
|
Total
franchise
|
547
|
|
|
664
|
|
|
0
|
|
|
25
|
|
|
8-13
|
|
Total Company-owned
and franchise
|
|
|
|
|
|
|
|
|
|
Chili's
domestic
|
1,233
|
|
|
1,242
|
|
|
0
|
|
|
8
|
|
|
8-10
|
|
Chili's
international
|
377
|
|
|
370
|
|
|
0
|
|
|
23
|
|
|
6-9
|
|
Maggiano's
domestic
|
53
|
|
|
53
|
|
|
0
|
|
|
0
|
|
|
1
|
|
Total
|
1,663
|
|
|
1,665
|
|
|
0
|
|
|
31
|
|
|
15-20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relocation
Openings
|
Chili's domestic
Company-owned relocations
|
|
|
|
|
0
|
|
0
|
|
2
|
|
Included in the Total Restaurants Open at June 24, 2020 are
locations that have been temporarily closed due to the COVID-19
pandemic which include 9 Company-owned Chili's restaurants located
within a closed structure or closed due to local regulations, 18
domestic Chili's franchise locations, and 89 Chili's international
franchise locations.
NON-GAAP
INFORMATION AND RECONCILIATIONS
|
Comparable
Restaurant Sales
|
|
Q4 20 and Q4
19
|
|
|
Comparable
Restaurant
Sales(1)
|
|
Price
Impact
|
|
Mix-Shift(2)
|
|
Traffic
|
|
Q4: 20 vs
19
|
|
Q4: 19 vs
18
|
|
Q4: 20 vs
19
|
|
Q4: 19 vs
18
|
|
Q4: 20 vs
19
|
|
Q4: 19 vs
18
|
|
Q4: 20 vs
19
|
|
Q4: 19 vs
18
|
Company-owned
|
(36.7)
|
%
|
|
1.2
|
%
|
|
0.9
|
%
|
|
3.6
|
%
|
|
(8.0)
|
%
|
|
(1.8)
|
%
|
|
(29.6)
|
%
|
|
(0.6)
|
%
|
Chili's
|
(32.2)
|
%
|
|
1.5
|
%
|
|
0.8
|
%
|
|
3.9
|
%
|
|
(5.4)
|
%
|
|
(1.9)
|
%
|
|
(27.6)
|
%
|
|
(0.5)
|
%
|
Maggiano's
|
(66.7)
|
%
|
|
(0.2)
|
%
|
|
2.1
|
%
|
|
1.6
|
%
|
|
(15.1)
|
%
|
|
(0.5)
|
%
|
|
(53.7)
|
%
|
|
(1.3)
|
%
|
Chili's
franchise(3)
|
(49.5)
|
%
|
|
0.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
(39.9)
|
%
|
|
0.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
(66.1)
|
%
|
|
(0.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Chili's
domestic(4)
|
(33.0)
|
%
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide(5)
|
(38.6)
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 20 and FY
19
|
|
|
Comparable
Restaurant
Sales(1)
|
|
Price
Impact
|
|
Mix-Shift(2)
|
|
Traffic
|
|
FY: 20 vs
19
|
|
FY: 19 vs
18
|
|
FY: 20 vs
19
|
|
FY: 19 vs
18
|
|
FY: 20 vs
19
|
|
FY: 19 vs
18
|
|
FY: 20 vs
19
|
|
FY: 19 vs
18
|
Company-owned
|
(10.1)
|
%
|
|
2.1
|
%
|
|
1.3
|
%
|
|
1.7
|
%
|
|
(2.0)
|
%
|
|
(1.7)
|
%
|
|
(9.4)
|
%
|
|
2.1
|
%
|
Chili's
|
(8.6)
|
%
|
|
2.3
|
%
|
|
1.3
|
%
|
|
1.7
|
%
|
|
(1.1)
|
%
|
|
(1.7)
|
%
|
|
(8.8)
|
%
|
|
2.3
|
%
|
Maggiano's
|
(19.9)
|
%
|
|
0.6
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|
(4.0)
|
%
|
|
(0.5)
|
%
|
|
(17.4)
|
%
|
|
(0.4)
|
%
|
Chili's
franchise(3)
|
(14.4)
|
%
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
(10.1)
|
%
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
(23.1)
|
%
|
|
(3.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Chili's
domestic(4)
|
(8.8)
|
%
|
|
2.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide(5)
|
(10.8)
|
%
|
|
1.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Comparable Restaurant
Sales include all restaurants that have been in operation for more
than 18 months except acquired restaurants which are included after
more than 12 months ownership. Restaurants temporarily closed 14
days or more are excluded from comparable restaurant sales.
Percentage amounts are calculated based on the comparable periods
year-over-year.
|
|
|
(2)
|
Mix-Shift is
calculated as the year-over-year percentage change in Company sales
resulting from the change in menu items ordered by
guests.
|
|
|
(3)
|
Chili's Franchise
sales generated by franchisees are not included in revenues in the
Consolidated Statements of Comprehensive Income (Unaudited);
however, we generate royalty revenues and advertising fees based on
franchisee revenues, where applicable. We believe including
franchise comparable restaurant sales provides investors
information regarding brand performance that is relevant to current
operations.
|
|
|
(4)
|
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.
|
|
|
(5)
|
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 Chili's
restaurants.
|
Reconciliation of Net Income (Loss) and Adjusted Net
Income (Loss) Per Share (in millions, except per share)
Brinker believes excluding special items from its financial
results provides investors with a clearer perspective of the
Company's ongoing operating performance and a more relevant
comparison to prior period results.
|
Fourth
Quarter
|
|
Fiscal
Year
|
|
Q4
20
|
|
EPS Q4
20
|
|
Q4
19
|
|
EPS Q4
19
|
|
FY
20
|
|
EPS FY
20
|
|
FY
19
|
|
EPS FY
19
|
Net income
(loss)
|
$
|
(49.2)
|
|
|
$
|
(1.20)
|
|
|
$
|
46.7
|
|
|
$
|
1.22
|
|
|
$
|
24.4
|
|
|
$
|
0.63
|
|
|
$
|
154.9
|
|
|
$
|
3.96
|
|
Special
items(1)
|
19.1
|
|
|
0.46
|
|
|
8.7
|
|
|
0.22
|
|
|
57.2
|
|
|
1.47
|
|
|
(1.1)
|
|
|
(0.03)
|
|
Income tax effect
related to special items(2)
|
(4.8)
|
|
|
(0.12)
|
|
|
(2.1)
|
|
|
(0.05)
|
|
|
(14.3)
|
|
|
(0.37)
|
|
|
0.3
|
|
|
0.01
|
|
Special items, net of
taxes
|
14.3
|
|
|
0.34
|
|
|
6.6
|
|
|
0.17
|
|
|
42.9
|
|
|
1.10
|
|
|
(0.8)
|
|
|
(0.02)
|
|
Adjustment for
special tax items(3)
|
(0.9)
|
|
|
(0.02)
|
|
|
(1.2)
|
|
|
(0.03)
|
|
|
(0.7)
|
|
|
(0.02)
|
|
|
(0.6)
|
|
|
(0.01)
|
|
Adjusted net income
(loss)
|
$
|
(35.8)
|
|
|
$
|
(0.88)
|
|
|
$
|
52.1
|
|
|
$
|
1.36
|
|
|
$
|
66.6
|
|
|
$
|
1.71
|
|
|
$
|
153.5
|
|
|
$
|
3.93
|
|
|
|
(1)
|
Special items in the
fourth quarter of fiscal 2020 consist of a charge of $16.7 million
in Other (gains) and charges that included charges related to the
COVID-19 pandemic, and $2.4 million of incremental depreciation
expenses associated with a change in estimated useful life of
certain restaurant-level long-lived assets. Special items in the
fourth quarter of fiscal 2019 consist of a $7.9 million charge in
Other (gains) and charges, and $0.8 million of incremental
depreciation expenses associated with a change in estimated useful
life of certain restaurant-level long-lived assets.
|
|
|
|
Special items in
fiscal 2020 consist of a charge of $47.4 million in Other (gains)
and charges that included charges related to the COVID-19 pandemic,
and $9.8 million of incremental depreciation expenses associated
with a change in estimated useful life of certain restaurant-level
long-lived assets. Special items in fiscal 2019 consist of a gain
of $4.5 million in Other (gains) and charges, partially offset by
$3.4 million of incremental depreciation expenses associated with a
change in estimated useful life of certain restaurant-level
long-lived assets. Footnote "(2)" to the Consolidated Statements of
Comprehensive Income (Unaudited) contains additional details on the
composition of Other (gains) and charges for each period
presented.
|
|
|
(2)
|
Income tax effect
related to special items is based on the statutory tax rate in
effect at the end of each period presented.
|
|
|
(3)
|
Adjustment for
special tax items in the fourth quarter of fiscal 2020 primarily
related to additional tax benefit of prior year return claim
amendments as allowed by the CARES Act. Adjustment for special tax
items in the fourth quarter of fiscal 2019 primarily related to
favorable resolution of liabilities established for uncertain tax
positions and realization of tax benefits not previously
recognized.
|
|
|
|
Adjustment for
special tax items in fiscal 2020 primarily related to additional
tax benefit of prior year return claim amendments as allowed by the
CARES Act. Adjustment for special tax items in fiscal 2019
primarily related to favorable resolution of liabilities
established for uncertain tax positions, realization of tax
benefits not previously recognized and tax shortfalls associated
with stock based compensation.
|
Reconciliation
of Restaurant Operating Margin (in millions, except
percentages)
|
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
|
Q4
20
|
|
Q4
19
|
|
FY
20
|
|
FY
19
|
Operating income
(loss) - GAAP
|
$
|
(53.2)
|
|
|
$
|
64.0
|
|
|
$
|
62.6
|
|
|
$
|
230.7
|
|
Operating income
(loss) as a percentage of Total revenues
|
(9.4)
|
%
|
|
7.7
|
%
|
|
2.0
|
%
|
|
7.2
|
%
|
|
|
|
|
|
|
|
|
Operating income
(loss) - GAAP
|
$
|
(53.2)
|
|
|
$
|
64.0
|
|
|
$
|
62.6
|
|
|
$
|
230.7
|
|
Less: Franchise
and other revenues
|
(10.1)
|
|
|
(29.3)
|
|
|
(73.6)
|
|
|
(111.7)
|
|
Plus:
Depreciation and amortization
|
41.4
|
|
|
38.1
|
|
|
162.3
|
|
|
147.6
|
|
General and
administrative
|
40.4
|
|
|
39.1
|
|
|
136.3
|
|
|
149.1
|
|
Other (gains) and
charges
|
16.7
|
|
|
7.9
|
|
|
47.4
|
|
|
(4.5)
|
|
Restaurant operating
margin - non-GAAP
|
$
|
35.2
|
|
|
$
|
119.8
|
|
|
$
|
335.0
|
|
|
$
|
411.2
|
|
Restaurant operating
margin as a percentage of Company sales
|
6.4
|
%
|
|
14.9
|
%
|
|
11.1
|
%
|
|
13.2
|
%
|
Restaurant operating margin is not a measurement determined in
accordance with GAAP and should not be considered in isolation, or
as an alternative to operating income as an indicator of financial
performance. Restaurant operating margin is widely regarded in the
restaurant industry as a useful metric by which to evaluate
restaurant-level operating efficiency and performance of ongoing
restaurant-level operations. This non-GAAP measure is not
indicative of overall Company performance and profitability because
this measure does not directly accrue benefit to the shareholders
due to the nature of costs excluded. We define Restaurant operating
margin as Company sales less Food and beverage costs, Restaurant
labor and Restaurant expenses. We believe this metric provides a
more useful comparison between periods and enables investors to
focus on the performance of restaurant-level operations by
excluding revenues not related to food and beverage sales at
Company-owned restaurants, corporate General and administrative
expenses, Depreciation and amortization, and Other (gains) and
charges.
Restaurant operating margin excludes Franchise and other
revenues which are earned primarily from franchise royalties,
advertising fees, and other non-food and beverage revenues streams
such as gift card breakage, banquet service charges, delivery fee
income, and digital entertainment revenues. Depreciation and
amortization expenses, substantially all of which are related to
restaurant-level assets, are excluded because such expenses
represent historical costs which do not reflect current cash
outlays for the restaurants. General and administrative expenses
include primarily non-restaurant-level costs associated with
support of the restaurants and other activities at our corporate
offices and are therefore excluded. We believe that excluding
special items, included within Other (gains) and charges, from
Restaurant operating margin provides investors with a clearer
perspective of the Company's ongoing operating performance and a
more useful comparison to prior period results. Restaurant
operating margin as presented may not be comparable to other
similarly titled measures of other companies in our industry.
Reconciliation of Free Cash Flow (in millions)
Brinker believes presenting free cash flow provides a useful
measure to evaluate the cash flow available for reinvestment after
considering the capital requirements and expenditures of our
business operations.
|
Fifty-Two Week
Period Ended
June 24, 2020
|
Cash flows provided
by operating activities - GAAP
|
$
|
245.0
|
|
Capital
expenditures
|
(104.5)
|
|
Free cash flow -
non-GAAP
|
$
|
140.5
|
|
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SOURCE Brinker International, Inc.