Bloomin’ Brands Announces 2015 First Quarter Adjusted Diluted EPS

TAMPA, Fla., May 5, 2015 (hospitalitybusinessnews.com) — Bloomin’ Brands, Inc. today reported financial results for the first quarter (“Q1 2015”) ended March 29, 2015 compared to the first quarter (“Q1 2014”) ended March 30, 2014.

Key highlights for Q1 2015 include the following:

  • Comparable sales for Company-owned U.S. concepts increased 3.6% with a traffic increase of 0.7%
  • Comparable sales for our Brazilian Outback Steakhouse restaurants increased 6.2%
  • System-wide development was 14 new restaurants. In March 2015, we opened our first International Carrabba’s Italian Grill in Brazil, known as Abbraccio
  • Adjusted operating income margin was 9.1% versus 8.4% in Q1 2014 and U.S. GAAP operating income margin was 8.1% versus 7.8% in the Q1 2014
  • Adjusted net income was $69.7 million versus $58.5 million in Q1 2014 and U.S. GAAP Net income attributable to Bloomin’ Brands was $60.6 million versus $53.7 million in Q1 2014

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. Due to our conversion to a 52-53 week fiscal year in 2014, there were two more days in the first quarter in fiscal 2015, which had an impact of $0.04 to adjusted diluted EPS.

Q1 2015

Q1 2014

CHANGE

Adjusted diluted earnings per share

$

0.54

$

0.46

$

0.08

Adjustments

(0.07)

(0.04)

(0.03)

Diluted earnings per share

$

0.47

$

0.42

$

0.05

____________________

See Non-GAAP Measures later in this release.

CEO Comments

“The first quarter was a strong start to the year.  We were pleased with our sales performance and margin delivery. These results set us up to deliver our 2015 goals,” said Elizabeth Smith, CEO. “In addition, we continue to make great progress in our International business as it becomes a larger part of our portfolio and growth plans.”

First Quarter Financial Results

The following summarizes our results for Q1 2015 and Q1 2014:

(dollars in millions)

Q1 2015

Q1 2014

% Change

Total revenues

$

1,202.1

$

1,157.9

3.8

%

Adjusted restaurant level operating margin

18.3

%

18.0

%

0.3

%

U.S. GAAP restaurant level operating margin

18.4

%

18.2

%

0.2

%

Adjusted operating income margin

9.1

%

8.4

%

0.7

%

U.S. GAAP operating income margin

8.1

%

7.8

%

0.3

%

  • The increase in Total revenues was primarily due to additional revenues from new restaurant openings, an increase in U.S. comparable restaurant sales and the gain of two operating days due to the 2014 change to a 52-53 week fiscal year. The increase in Total revenues was partially offset by the closing of 73 restaurants since December 31, 2013, the sale of 20 Roy’s restaurants and the effect of foreign currency translation.
  • The increases in Adjusted and U.S. GAAP restaurant-level operating margin were primarily due to productivity savings and higher U.S. average unit volumes. These increases were partially offset by commodity and wage rate inflation as well as lunch expansion rollout costs.
  • The increase in Adjusted operating income margin was driven primarily by higher Adjusted restaurant-level operating margin as described above and lower compensation expenses due to our organizational realignment in the second half of fiscal 2014.
  • U.S. GAAP operating income margin is lower than Adjusted operating income margin primarily due to restaurant closing costs related to our International Restaurant Closure Initiative. This decrease was partially offset by the lapping of our Domestic Restaurant Closure Initiative.

First Quarter Comparable Restaurant Sales

THIRTEEN WEEKS ENDED MARCH 29, 2015

COMPANY- OWNED

Comparable restaurant sales (stores open 18 months or more) (1) (2) (3):

U.S.

Outback Steakhouse

5.0

%

Carrabba’s Italian Grill

1.9

%

Bonefish Grill

0.9

%

Fleming’s Prime Steakhouse & Wine Bar

3.0

%

Combined U.S.

3.6

%

International

Outback Steakhouse – South Korea

(3.0)

%

Outback Steakhouse – Brazil

6.2

%

_________________

(1) Due to our conversion to a 52-53 week fiscal year in 2014, there were two more days in Q1 2015 as compared to Q1 2014. These additional days increased total revenues by $24.3 million and have been excluded from our comparable restaurant sales calculation.

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

(3) 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)

Q1 2015

Q1 2014

% Change

U.S.

Total revenues

$

1,062.0

$

1,010.6

5.1

%

Adjusted restaurant-level operating margin

17.9

%

17.2

%

0.7

%

U.S. GAAP restaurant-level operating margin

17.9

%

17.4

%

0.5

%

Adjusted operating income margin

12.2

%

11.1

%

1.1

%

U.S. GAAP operating income margin

12.0

%

10.6

%

1.4

%

  • The increase in U.S. GAAP operating income margin was primarily due to higher average unit volumes, productivity savings, the lapping of the Domestic Restaurant Closure Initiative and lower compensation and benefits driven by our organizational realignment in the second half of fiscal 2014.

International Segment Operating Results

(dollars in millions)

Q1 2015

Q1 2014

% Change

International

Total revenues

$

140.0

$

147.2

(4.9)

%

Adjusted restaurant-level operating margin

21.7

%

20.1

%

1.6

%

U.S. GAAP restaurant-level operating margin

21.7

%

20.0

%

1.7

%

Adjusted operating income margin

12.6

%

12.0

%

0.6

%

U.S. GAAP operating income margin

6.3

%

11.0

%

(4.7)

%

  • The decrease in Total revenues is primarily due to the impact of the International Restaurant Closure Initiative and foreign currency translation.
  • The increase in Adjusted operating income margin was primarily due to higher restaurant-level operating margin, partially offset by general and administrative expenses due to investment spending.
  • U.S. GAAP operating income margin is lower than Adjusted operating income margin primarily due to restaurant closing costs related to our International Restaurant Closure Initiative.
  • Foreign currency translation negatively impacted income from operations by $2.0 million

Unallocated Corporate Operating Expense

Certain expenses are managed centrally and are not allocated to the U.S. or International segment. In total, Q1 2015 unallocated expenses were $38.6 million, which was $5.5 million higher than Q1 2014.  $4.9 million of this variance  is primarily due to an increase in insurance expenses, which are included in consolidated restaurant-level operating margin.

System-wide Development

The following summarizes our system-wide development for the thirteen weeks ended March 29, 2015:

DECEMBER 28, 2014

OPENINGS

CLOSURES (1)

MARCH 29, 2015

U.S.:

Outback Steakhouse—Company-owned

648

1

649

Carrabba’s Italian Grill

Company-owned

242

2

244

Franchised

1

1

2

Bonefish Grill—Company-owned

201

4

(1)

204

International:

Outback Steakhouse

Company-owned—South Korea (2)

91

2

(18)

75

Company-owned—Brazil

63

1

64

Company-owned—Other

11

1

(2)

10

Franchised

55

2

57

System-wide development

14

(21)

____________________

(1) Excludes 20 Roy’s restaurants sold in January 2015.

(2) In Q1 2015, we adopted a policy that relocated international restaurants closed more than 30 days and relocated U.S. restaurants closed more than 60 days are considered a closure. Prior periods have been revised to conform to the current year presentation.

Dividend Declaration and Share Repurchases

On April 29, 2015, our Board of Directors declared a quarterly cash dividend of $0.06 per share to be paid on May 27, 2015 to all stockholders of record as of the close of business on May 15, 2015.

In December 2014, our Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $100.0 million of our outstanding common stock. The authorization will expire on June 12, 2016. During the thirteen weeks ended March 29, 2015, $70.0 million of outstanding stock was repurchased under the program. As of March 29, 2015, $30.0 million remains authorized under the share repurchase program.

Other Events

Q1 2015 adjusted results reflect the following items:

  • In our November 4, 2014 earnings release, we announced our intention to close 36 underperforming international locations as part of the International Restaurant Closure Initiative. In Q1 2015, we incurred $7.5 million of restaurant closing costs associated with this initiative.
  • In January 2015, we sold our Roy’s business and recognized a loss on sale of $1.1 million.

Fiscal 2015 Financial Outlook

We are reaffirming our full-year guidance for blended domestic comparable restaurant sales growth of at least 1.5% and Adjusted diluted earnings per share to be at least $1.27 as previously communicated in our February 19, 2015 earnings release.

Total Revenues are now expected to be at least $4.43 billion. The reduction from $4.49 billion is due to expected additional impact from foreign currency translation. All other elements of the fiscal 2015 guidance included in the February 19, 2015 release remain intact.

 

 

TABLE ONE

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(UNAUDITED)

THIRTEEN WEEKS ENDED

(dollars in thousands, except per share data)

MARCH 29, 2015

MARCH 30, 2014

Revenues

Restaurant sales

$

1,194,810

$

1,150,525

Other revenues

7,249

7,334

Total revenues

1,202,059

1,157,859

Costs and expenses

Cost of sales

387,468

373,614

Labor and other related

323,986

311,418

Other restaurant operating

264,038

256,518

Depreciation and amortization

46,486

46,165

General and administrative

73,247

74,054

Provision for impaired assets and restaurant closings

9,133

6,064

Total costs and expenses

1,104,358

1,067,833

Income from operations

97,701

90,026

Other expense, net

(1,147)

(164)

Interest expense, net

(13,198)

(16,598)

Income before provision for income taxes

83,356

73,264

Provision for income taxes

21,274

18,164

Net income

62,082

55,100

Less: net income attributable to noncontrolling interests

1,494

1,367

Net income attributable to Bloomin’ Brands

$

60,588

$

53,733

Net income

$

62,082

$

55,100

Other comprehensive income:

Foreign currency translation adjustment

(25,462)

(5,365)

Unrealized losses on derivatives, net of tax

(4,012)

Comprehensive income

32,608

49,735

Less: comprehensive income attributable to noncontrolling interests

1,494

1,367

Comprehensive income attributable to Bloomin’ Brands

$

31,114

$

48,368

Earnings per share:

Basic

$

0.48

$

0.43

Diluted

$

0.47

$

0.42

Weighted average common shares outstanding:

Basic

125,302

124,542

Diluted

128,759

127,851

Cash dividends declared per common share

$

0.06

$

 

 

TABLE TWO

BLOOMIN’ BRANDS, INC.

SEGMENT RESULTS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

U.S. Segment

MARCH 29, 2015

MARCH 30, 2014

Revenues

Restaurant Sales

$

1,056,104

$

1,004,875

Other Revenues

5,910

5,751

Total revenues

$

1,062,014

$

1,010,626

Restaurant-level operating margin

17.9

%

17.4

%

Income from operations

$

127,408

$

106,901

Operating income margin

12.0

%

10.6

%

International Segment

Revenues

Restaurant sales

$

138,706

$

145,650

Other revenues

1,339

1,583

Total revenues

$

140,045

$

147,233

Restaurant-level operating margin

21.7

%

20.0

%

Income from operations

$

8,879

$

16,225

Operating income margin

6.3

%

11.0

%

Reconciliation of Segment Income from Operations to Consolidated Income from Operations

Segment income from operations

U.S.

$

127,408

$

106,901

International

8,879

16,225

Total segment income from operations

136,287

123,126

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

(288)

4,594

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

(38,298)

(37,694)

Unallocated corporate operating expense

(38,586)

(33,100)

Total income from operations

$

97,701

$

90,026

 

 

TABLE THREE

BLOOMIN’ BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

(UNAUDITED)

(dollars in thousands)

MARCH 29, 2015

DECEMBER 28, 2014

Cash and cash equivalents (1)

$

135,648

$

165,744

Net working capital (deficit) (2)

$

(251,128)

$

(239,559)

Total assets

$

3,198,644

$

3,344,286

Total debt, net

$

1,311,310

$

1,315,843

Total stockholders’ equity

$

518,847

$

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

MARCH 29, 2015

MARCH 30, 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

32.4

%

32.4

%

32.5

%

32.5

%

0.1

%

Labor and other related

27.1

%

27.1

%

27.1

%

27.1

%

%

Other restaurant operating

22.1

%

22.1

%

22.3

%

22.5

%

0.4

%

Restaurant-level operating margin

18.4

%

18.3

%

18.2

%

18.0

%

0.3

%

_________________

(1) Includes adjustments of $0.2 million of expenses from the International Restaurant Closure Initiative, partially offset by $0.1 million of non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations. All adjustments were recorded in Other restaurant operating.

(2) Includes adjustments related to the write-off of deferred rent liabilities of $2.1 million associated with the Domestic Restaurant Closure Initiative, partially offset by $0.1 million of non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations. All adjustments were recorded in Other restaurant operating.

 

 

TABLE FIVE

BLOOMIN’ BRANDS, INC.

SEGMENT RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATION

(UNAUDITED)

THIRTEEN WEEKS ENDED

(UNFAVORABLE)
FAVORABLE CHANGE

IN ADJUSTED

MARCH 29, 2015

MARCH 30, 2014

U.S. GAAP

ADJUSTED

U.S. GAAP

ADJUSTED

QUARTER TO DATE

U.S. (1)

17.9

%

17.9

%

17.4

%

17.2

%

0.7

%

International (2)

21.7

%

21.7

%

20.0

%

20.1

%

1.6

%

_________________

(1) The thirteen weeks ended March 30, 2014 includes adjustments for the write-off of $2.1 million of deferred rent liabilities associated with the Domestic Restaurant Closure Initiative.

(2) The thirteen weeks ended March 30, 2014 includes an adjustment of $0.1 million of non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations.

 

 

TABLE SIX

BLOOMIN’ BRANDS, INC.

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

(UNAUDITED)

THIRTEEN WEEKS ENDED

(in thousands, except per share data)

MARCH 29, 2015

MARCH 30, 2014

Income from operations

$

97,701

$

90,026

Operating income margin

8.1

%

7.8

%

Adjustments:

Restaurant impairments and closing costs (1)

8,870

4,929

Purchased intangibles amortization (2)

1,283

1,458

Restaurant relocations and related costs (3)

1,169

Transaction-related expenses (4)

275

1,118

Total income from operations adjustments

11,597

7,505

Adjusted income from operations

$

109,298

$

97,531

Adjusted operating income margin

9.1

%

8.4

%

Net income attributable to Bloomin’ Brands

$

60,588

$

53,733

Adjustments:

Income from operations adjustments

11,597

7,505

Loss on disposal of business (5)

1,151

Total adjustments, before income taxes

12,748

7,505

Adjustment to provision for income taxes (6)

(3,627)

(2,695)

Net adjustments

9,121

4,810

Adjusted net income

$

69,709

$

58,543

Diluted earnings per share

$

0.47

$

0.42

Adjusted diluted earnings per share

$

0.54

$

0.46

Diluted weighted average common shares outstanding

128,759

127,851

_________________

(1) Represents expenses incurred in the thirteen weeks ended March 29, 2015 for the International and Domestic Restaurant Closure Initiatives and expenses incurred for the Domestic Restaurant Closure Initiative during the thirteen weeks ended March 30, 2014.

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

(3) Represents asset impairment charges and accelerated depreciation incurred in connection with the Company’s relocation program.

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

(5) Represents loss on sale of the Roy’s business.

(6) Income tax effect of adjustments for the thirteen weeks ended March 29, 2015 and March 30, 2014, respectively, are calculated based on the statutory rate applicable to jurisdictions in which the above non-GAAP adjustments relate.

 

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

(dollars in thousands)

MARCH 29, 2015

MARCH 30, 2014

Other restaurant operating expense

$

(136)

$

(1,983)

Depreciation and amortization

1,266

1,363

General and administrative

1,602

2,153

Provision for impaired assets and restaurant closings

8,865

5,972

Other expense, net

1,151

Provision for income taxes

(3,627)

(2,695)

Net adjustments

$

9,121

$

4,810

 

 

TABLE SEVEN

BLOOMIN’ BRANDS, INC.

SEGMENT INCOME FROM OPERATIONS NON-GAAP RECONCILIATION

(UNAUDITED)

U.S. Segment

THIRTEEN WEEKS ENDED

(dollars in thousands)

MARCH 29, 2015

MARCH 30, 2014

Income from operations

$

127,408

$

106,901

Operating income margin

12.0

%

10.6

%

Adjustments:

Restaurant impairments and closing costs (1)

1,336

4,929

Restaurant relocations and related costs (2)

1,169

Adjusted income from operations

$

129,913

$

111,830

Adjusted operating income margin

12.2

%

11.1

%

International Segment

(dollars in thousands)

Income from operations

$

8,879

$

16,225

Operating income margin

6.3

%

11.0

%

Adjustments:

Restaurant impairments and closing costs (3)

7,534

Purchased intangibles amortization (4)

1,283

1,458

Adjusted income from operations

$

17,696

$

17,683

Adjusted operating income margin

12.6

%

12.0

%

_________________

(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

MARCH 29,

MARCH 30,

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

204

192

Franchised

5

5

Total

209

197

Fleming’s Prime Steakhouse & Wine Bar

Company-owned

66

66

Roy’s (1)

Company-owned

20

International

Outback Steakhouse

Company-owned – South Korea

75

108

Company-owned – Brazil (2)

64

51

Company-owned – Other

10

12

Franchised

57

51

Total

206

222

System-wide total

1,481

1,500

____________________

(1) On January 26, 2015, we sold our Roy’s concept.

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

 

 

TABLE NINE

BLOOMIN’ BRANDS, INC.

SELECTED SEGMENT INFORMATION

(UNAUDITED)

THIRTEEN WEEKS ENDED

FISCAL YEAR

MARCH 30,

JUNE 29,

SEPTEMBER 28,

DECEMBER 28,

2014

2014

2014

2014

2014

Selected Operating Data:

Comparable restaurant sales

(restaurants open 18 months or more) (1):

Outback Steakhouse – South Korea

(18.8)

%

(14.3)

%

(21.4)

%

(15.8)

%

(17.7)

%

Outback Steakhouse – Brazil (2)

6.8

%

12.2

%

8.9

%

4.2

%

7.6

%

Menu price (decreases) increases (3):

Outback Steakhouse – South Korea

(0.1)

%

0.9

%

1.9

%

1.9

%

1.1

%

Outback Steakhouse – Brazil

6.6

%

7.8

%

7.3

%

6.8

%

7.1

%

Average restaurant unit volumes (weekly):

Outback Steakhouse – South Korea (4)

$

48,102

$

40,523

$

42,330

$

43,528

$

43,621

Outback Steakhouse – Brazil (5)

$

111,261

$

112,479

$

110,982

$

100,645

$

108,527

Operating weeks:

Outback Steakhouse – South Korea

1,386

1,387

1,385

1,316

5,474

Outback Steakhouse – Brazil

638

692

732

797

2,859

Selected Financial Data (dollars in thousands):

U.S.

Restaurant sales

$

1,004,875

$

961,608

$

910,482

$

955,408

$

3,832,373

Other revenues

5,751

5,435

4,953

5,767

21,906

Total revenues

$

1,010,626

$

967,043

$

915,435

$

961,175

$

3,854,279

Restaurant-level operating margin

17.4

%

15.2

%

13.5

%

15.4

%

15.4

%

Income from operations

$

106,901

$

81,268

$

54,734

77,658

$

320,561

Operating income margin

10.6

%

8.4

%

6.0

%

8.1

%

8.3

%

International

Restaurant sales

$

145,650

$

142,829

$

148,735

$

146,196

$

583,410

Other revenues

1,583

1,040

1,284

1,115

5,022

Total revenues

$

147,233

$

143,869

$

150,019

$

147,311

$

588,432

Restaurant-level operating margin

20.0

%

17.2

%

16.6

%

20.0

%

18.4

%

Income (loss) from operations

$

16,225

$

8,282

$

(2,968)

$

3,481

$

25,020

Operating income (loss) margin

11.0

%

5.8

%

(2.0)

%

2.4

%

4.3

%

Segment income (loss) from operations

U.S.

$

106,901

$

81,268

$

54,734

$

77,658

$

320,561

International

16,225

8,282

(2,968)

3,481

25,020

Total segment income from operations

$

123,126

$

89,550

$

51,766

$

81,139

$

345,581

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

4,594

6,728

(1,641)

4,770

14,451

Unallocated corporate operating expense – Depreciation and amortization, General and administrative and Provision for impaired assets and restaurant closings

(37,694)

(33,887)

(51,246)

(45,241)

(168,068)

Total unallocated corporate operating expense

(33,100)

(27,159)

(52,887)

(40,471)

(153,617)

Total income (loss) from operations

$

90,026

$

62,391

$

(1,121)

$

40,668

$

191,964

____________________

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

(2) Prior to November 1, 2013, sales from the acquired restaurants in Brazil were reported as income from unconsolidated joint ventures. Subsequent to November 1, 2013, the sales of these restaurants are reported as Company-owned. Calculation of comparable restaurant sales and general menu price increases for company-owned operations in Brazil include all restaurants that were open at least 18 months at the beginning of each respective period. Brazil results are reported on a one-month calendar lag.

(3) The stated menu price changes exclude the impact of product mix shifts to new menu offerings.

(4) Translated at an average exchange rate of 1,069.41, 1,028.98, 1,025.85 and 1,088.53 for the thirteen weeks ended March 30, 2014, June 29, 2014, September 28, 2014 and December 28, 2014, respectively. Translated at an average exchange rate of 1,053.78 for the fiscal year ended December 28, 2014.

(5) Translated at an average exchange rate of 2.37, 2.26, 2.24 and 2.45 for the thirteen weeks ended March 30, 2014, June 29, 2014, September 28, 2014 and December 28, 2014, respectively. Translated at an average exchange rate of 2.33 for the fiscal year ended December 28, 2014.

 

 

TABLE TEN

BLOOMIN’ BRANDS, INC.

SELECTED SEGMENT INFORMATION – NON-GAAP RECONCILIATION

(UNAUDITED)

THIRTEEN WEEKS ENDED

MARCH 30,

JUNE 29,

SEPTEMBER 28,

DECEMBER 28,

FISCAL YEAR

(dollars in thousands)

2014

2014

2014

2014

2014

Reconciliation of adjusted income from operations:

U.S.

Income from operations

$

106,901

$

81,268

$

54,734

$

77,658

$

320,561

Operating income margin

10.6

%

8.4

%

6.0

%

8.1

%

8.3

%

Adjustments:

Restaurant impairments and closing costs (1)

4,929

4,929

Asset impairments and related costs (2)

6,112

7,396

13,508

Restaurant relocations and related costs (3)

249

249

Adjusted income from operations

$

111,830

$

81,268

$

60,846

$

85,303

$

339,247

Adjusted operating income margin

11.1

%

8.4

%

6.6

%

8.9

%

8.8

%

International

Income (loss) from operations

$

16,225

$

8,282

$

(2,968)

$

3,481

$

25,020

Operating income margin

11.0

%

5.8

%

(2.0)

%

2.4

%

4.3

%

Adjustments:

Purchased intangibles amortization (4)

1,458

1,532

1,545

1,417

5,952

Restaurant impairments and closing costs (5)

11,573

10,339

21,912

Adjusted income from operations

$

17,683

$

9,814

$

10,150

$

15,237

$

52,884

Adjusted operating income margin

12.0

%

6.8

%

6.8

%

10.3

%

9.0

%

Unallocated corporate operating expense

$

(33,100)

$

(27,159)

$

(52,887)

$

(40,471)

$

(153,617)

Adjustments:

Transaction-related expenses (6)

1,118

229

1,347

Severance (7)

5,362

3,683

9,045

Asset impairments and related costs (8)

10,840

142

10,982

Legal settlement

(6,070)

(6,070)

Adjusted unallocated corporate operating expense

$

(31,982)

$

(27,159)

$

(36,685)

$

(42,487)

$

(138,313)

Adjustment line item classifications:

U.S.

Other restaurant operating expense

$

(2,078)

$

$

$

$

(2,078)

Depreciation and amortization

249

249

General and administrative

1,035

1,035

Provision for impaired assets and restaurant closings

5,972

6,112

7,396

19,480

$

4,929

$

$

6,112

$

7,645

$

18,686

International

Other restaurant operating expense

$

95

$

100

$

101

$

(741)

$

(445)

Depreciation and amortization

1,363

1,432

1,444

1,324

5,563

General and administrative

2,855

2,855

Provision for impaired assets and restaurant closings

11,573

8,318

19,891

$

1,458

$

1,532

$

13,118

$

11,756

$

27,864

Unallocated corporate operating expense

Other restaurant operating expense

$

$

$

$

(6,070)

$

(6,070)

General and administrative

1,118

5,726

4,216

11,060

Provision for impaired assets and restaurant closings

10,476

(162)

10,314

$

1,118

$

$

16,202

$

(2,016)

$

15,304

_________________

(1) Represents impairments and expenses incurred for the Domestic Restaurant Closure Initiative.

(2) Represents asset impairment charges and related costs associated with our decision to sell the Roy’s business.

(3) Represents accelerated depreciation incurred in connection with the Company’s relocation program.

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

(5) Represents impairments and expenses incurred for the International Restaurant Closure Initiative.

(6) Transaction-related expenses primarily relate to secondary offerings of our common stock completed in November 2014 and March 2014, the refinancing of the Senior Secured Credit Facility in May 2014, and other transaction costs.

(7) Relates to severance incurred as a result of our organizational realignment.

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

 

 

TABLE ELEVEN

BLOOMIN’ BRANDS, INC.

SELECTED SEGMENT INFORMATION – NON-GAAP RECONCILIATION

(UNAUDITED)

THIRTEEN WEEKS ENDED

FISCAL

YEAR ENDED

MARCH 30, 2014

JUNE 29, 2014

SEPTEMBER 28, 2014

DECEMBER 28, 2014

DECEMBER 28, 2014

Restaurant-level
operating margin:

U.S
GAAP

ADJUSTED

U.S
GAAP

ADJUSTED

U.S
GAAP

ADJUSTED

U.S
GAAP

ADJUSTED

U.S
GAAP

ADJUSTED

U.S. (1)

17.4

%

17.2

%

15.2

%

15.2

%

13.5

%

13.5

%

15.4

%

15.4

%

15.4

%

15.4

%

International (2)

20.0

%

20.1

%

17.2

%

17.3

%

16.6

%

16.6

%

20.0

%

19.5

%

18.4

%

18.4

%

_________________

(1) Includes adjustments for the write-off of $2.1 million of deferred rent liabilities associated with the Domestic Restaurant Closure Initiative for the thirteen weeks ended March 30, 2014 and fiscal year ended December 28, 2014.

(2) Includes: (i) an adjustment of $0.1 million for each thirteen week period presented for non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations and (ii) the write-off of $0.8 million of deferred rent liabilities associated with the International Restaurant Closure Initiative for the thirteen weeks and fiscal year ended December 28, 2014.

 

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