Bloomin' Brands Reports Strengthening Q1 2021 Sales Trends
Generating Strong Cash Flow with Enhanced Liquidity Position - Announces 2020 Q4 Financial Results - Provides Selective 2021 Financial Guidance
Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for the fourth quarter 2020 and fiscal year ended December 27, 2020 compared to the fourth quarter 2019 and fiscal year ended December 29, 2019 (“Fiscal Year 2019”).
CEO Comments
“Our priorities and focus remain on taking care of our people and providing a great and safe experience for guests in the restaurant or in the convenience of their home,” said David Deno, Chief Executive Officer. “The fourth quarter showed our continued resilience in navigating through a rapidly changing environment. We are making great progress across key initiatives to improve margins, increase cash flow, and pay down debt, while taking market share. Thus far in 2021 we have seen sales momentum and volume increases relative to Q4 with U.S. comp sales of (12.9)% through the first seven weeks of the fiscal year.”
Diluted EPS and Adjusted Diluted EPS
The following table reconciles Diluted (loss) earnings per share attributable to common stockholders to Adjusted diluted earnings (loss) per share for the periods indicated:
|
| Q4 |
|
|
| FISCAL YEAR |
|
| ||||||||||||||||
|
| 2020 |
| 2019 |
| CHANGE |
| 2020 |
| 2019 |
| CHANGE | ||||||||||||
| Diluted (loss) earnings per share attributable to common stockholders | $ | (0.16 | ) |
| $ | 0.32 |
|
| $ | (0.48 | ) |
| $ | (1.85 | ) |
| $ | 1.45 |
|
| $ | (3.30 | ) |
| Adjustments (1) | 0.18 |
|
| — |
|
| 0.18 |
|
| 1.16 |
|
| 0.09 |
|
| 1.07 |
| ||||||
| Adjusted diluted earnings (loss) per share (1) | $ | 0.02 |
|
| $ | 0.32 |
|
| $ | (0.30 | ) |
| $ | (0.69 | ) |
| $ | 1.54 |
|
| $ | (2.23 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
| ___________________ | |||||||||||||||||||||||
| (1) See Non-GAAP Measures later in this release. | |||||||||||||||||||||||
Fourth Quarter Financial Results
| (dollars in millions) | Q4 2020 |
| Q4 2019 |
| CHANGE | |||||
| Total revenues | $ | 812.5 |
|
| $ | 1,022.2 |
|
| (20.5 | )% |
|
|
|
|
|
|
| |||||
| GAAP restaurant-level operating margin | 11.8 | % |
| 14.4 | % |
| (2.6 | )% | ||
| Adjusted restaurant-level operating margin (1) | 12.4 | % |
| 13.9 | % |
| (1.5 | )% | ||
|
|
|
|
|
|
| |||||
| GAAP operating (loss) income margin | (0.9 | )% |
| 4.2 | % |
| (5.1 | )% | ||
| Adjusted operating income margin (1) | 1.3 | % |
| 4.2 | % |
| (2.9 | )% | ||
| ___________________ | ||||||||||
| (1) See Non-GAAP Measures later in this release. | ||||||||||
- The decrease in Total revenues was primarily due to: (i) significantly lower comparable restaurant sales and franchise revenues principally attributable to the COVID-19 pandemic, (ii) the effect of foreign currency translation of the Brazil Real relative to the U.S. dollar and (iii) the net impact of restaurant closures and openings.
- Restaurant-level operating margin decreased due to: (i) significantly lower comparable restaurant sales and costs incurred in connection with the COVID-19 pandemic, including incremental delivery related costs and (ii) higher labor costs. These decreases were partially offset by: (i) reduced advertising expense, (ii) a reduction in prep labor hours and (iii) cost savings from waste reduction initiatives. COVID-19 related charges are excluded from Adjusted restaurant-level operating margin.
- GAAP operating (loss) income margin decreased due to: (i) a decline in restaurant-level operating margin discussed above, (ii) sales deleveraging in connection with the COVID-19 pandemic across general and administrative expense, depreciation and amortization and (iii) asset impairment charges related to the COVID-19 pandemic. COVID-19 related charges are excluded from Adjusted operating income margin.
Fourth Quarter Comparable Restaurant Sales
| THIRTEEN WEEKS ENDED DECEMBER 27, 2020 |
| COMPANY-OWNED | |
| Comparable restaurant sales (stores open 18 months or more): |
|
| |
| U.S. |
|
| |
| Outback Steakhouse |
| (15.2) | % |
| Carrabba’s Italian Grill |
| (11.4) | % |
| Bonefish Grill |
| (27.1) | % |
| Fleming’s Prime Steakhouse & Wine Bar |
| (29.7) | % |
| Combined U.S. |
| (17.7) | % |
| International |
|
| |
| Outback Steakhouse - Brazil |
| (14.8) | % |
Liquidity Update and Recent Sales Results
As of this morning, our total available liquidity was $675 million. Our liquidity position has improved over the last several weeks due to increased sales performance, holiday gift card sales and working capital inflows.
As of February 14, 2021, approximately 99% of our U.S. restaurants are open with limited in-restaurant dining capacity (vs. 85% as of December 27, 2020) in accordance with local mandates.
The following table includes quarter-to-date U.S. company-owned comparable restaurant sales for the seven-week period ended February 14, 2021:
| SEVEN WEEKS ENDED FEBRUARY 14, 2021 |
| COMPANY-OWNED (1) | |
| Comparable restaurant sales (stores open 18 months or more): |
|
| |
| Outback Steakhouse |
| (10.8) | % |
| Carrabba’s Italian Grill |
| (6.1) | % |
| Bonefish Grill |
| (21.3) | % |
| Fleming’s Prime Steakhouse & Wine Bar |
| (26.1) | % |
| Combined U.S. |
| (12.9) | % |
| _________________ | |||
| (1) Includes comparable restaurant sales for the seven-week period December 28, 2020 through February 14, 2021. | |||
2021 Financial Outlook
The Company remains committed to making decisions to achieve its long-term growth framework and maximize shareholder value. However, ongoing uncertainties related to the COVID-19 pandemic and evolving in-restaurant dining capacity restrictions across the country have made it difficult to forecast sales. Despite this uncertainty, we are focused on the following initiatives to emerge a better, stronger, operations-focused company:
- Pursue previously announced transformational cost savings initiatives representing $40 million over two years. We achieved $25 million of these cost savings in 2020 and expect approximately $15 million of these savings to be realized in 2021
- Capitalize on additional margin opportunities learned during the pandemic
- Prioritize capital allocation towards debt pay down while maintaining flexibility to reinvest back in the business
The following table presents our expectations for selected fiscal 2021 financial reporting and operating results:
| Selected Financial Data: | 2021 Guidance (1) |
| Commodity inflation | Flat |
|
|
|
| Labor inflation | 3.0% - 3.5% |
|
|
|
| General and administrative expenses | $225M - $230M |
|
|
|
| Depreciation and amortization | $165M - $175M |
|
|
|
| Capital expenditures | $170M - $185M |
|
|
|
| Number of new system-wide restaurants | 20 - 25 |
| _________________ | |
| (1) This 2021 guidance excludes the effects of any prospective legislative and regulatory changes. | |
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 more than 1,450 restaurants in 47 states, Guam and 20 countries, some of which are franchise locations.
Note: Numerical figures included in this release have been subject to rounding adjustments.
| TABLE ONE | |||||||||||||||
| BLOOMIN’ BRANDS, INC. | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
|
| THIRTEEN WEEKS ENDED |
| FISCAL YEAR ENDED | ||||||||||||
| (in thousands, except per share data) | DECEMBER 27, |
| DECEMBER 29, |
| DECEMBER 27, |
| DECEMBER 29, | ||||||||
| Revenues |
|
|
|
|
|
|
| ||||||||
| Restaurant sales | $ | 805,651 |
|
| $ | 1,005,869 |
|
| $ | 3,144,636 |
|
| $ | 4,075,014 |
|
| Franchise and other revenues |
| 6,854 |
|
|
| 16,315 |
|
|
| 25,925 |
|
|
| 64,375 |
|
| Total revenues |
| 812,505 |
|
|
| 1,022,184 |
|
|
| 3,170,561 |
|
|
| 4,139,389 |
|
| Costs and expenses |
|
|
|
|
|
|
| ||||||||
| Food and beverage costs |
| 251,704 |
|
|
| 312,659 |
|
|
| 982,702 |
|
|
| 1,277,824 |
|
| Labor and other related |
| 243,628 |
|
|
| 298,509 |
|
|
| 1,005,295 |
|
|
| 1,207,289 |
|
| Other restaurant operating |
| 214,864 |
|
|
| 249,930 |
|
|
| 846,566 |
|
|
| 982,051 |
|
| Depreciation and amortization |
| 42,792 |
|
|
| 49,615 |
|
|
| 180,261 |
|
|
| 196,811 |
|
| General and administrative |
| 56,624 |
|
|
| 66,125 |
|
|
| 254,356 |
|
|
| 275,239 |
|
| Provision for impaired assets and restaurant closings |
| 10,131 |
|
|
| 2,168 |
|
|
| 76,354 |
|
|
| 9,085 |
|
| Total costs and expenses |
| 819,743 |
|
|
| 979,006 |
|
|
| 3,345,534 |
|
|
| 3,948,299 |
|
| (Loss) income from operations |
| (7,238 | ) |
|
| 43,178 |
|
|
| (174,973 | ) |
|
| 191,090 |
|
| Loss on modification of debt |
| — |
|
|
| — |
|
|
| (237 | ) |
|
| — |
|
| Other income (expense), net |
| 342 |
|
|
| 2 |
|
|
| 131 |
|
|
| (143 | ) |
| Interest expense, net |
| (17,795 | ) |
|
| (12,372 | ) |
|
| (64,442 | ) |
|
| (49,257 | ) |
| (Loss) income before (benefit) provision for income taxes |
| (24,691 | ) |
|
| 30,808 |
|
|
| (239,521 | ) |
|
| 141,690 |
|
| (Benefit) provision for income taxes |
| (10,516 | ) |
|
| 1,522 |
|
|
| (80,726 | ) |
|
| 7,573 |
|
| Net (loss) income |
| (14,175 | ) |
|
| 29,286 |
|
|
| (158,795 | ) |
|
| 134,117 |
|
| Less: net income (loss) attributable to noncontrolling interests |
| 36 |
|
|
| 1,282 |
|
|
| (80 | ) |
|
| 3,544 |
|
| Net (loss) income attributable to Bloomin’ Brands |
| (14,211 | ) |
|
| 28,004 |
|
|
| (158,715 | ) |
|
| 130,573 |
|
| Redemption of preferred stock in excess of carrying value |
| — |
|
|
| — |
|
|
| (3,496 | ) |
|
| — |
|
| Net (loss) income attributable to common stockholders | $ | (14,211 | ) |
| $ | 28,004 |
|
| $ | (162,211 | ) |
| $ | 130,573 |
|
|
|
|
|
|
|
|
|
| ||||||||
| (Loss) earnings per share attributable to common stockholders: |
|
|
|
|
|
|
| ||||||||
| Basic | $ | (0.16 | ) |
| $ | 0.32 |
|
| $ | (1.85 | ) |
| $ | 1.47 |
|
| Diluted | $ | (0.16 | ) |
| $ | 0.32 |
|
| $ | (1.85 | ) |
| $ | 1.45 |
|
|
|
|
|
|
|
|
|
| ||||||||
| Weighted average common shares outstanding: |
|
|
|
|
|
|
| ||||||||
| Basic |
| 87,689 |
|
|
| 86,903 |
|
|
| 87,468 |
|
|
| 88,839 |
|
| Diluted |
| 87,689 |
|
|
| 88,188 |
|
|
| 87,468 |
|
|
| 89,777 |
|
| TABLE TWO | |||||||||||||||
| BLOOMIN’ BRANDS, INC. | |||||||||||||||
| SEGMENT RESULTS | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| (dollars in thousands) | THIRTEEN WEEKS ENDED |
| FISCAL YEAR ENDED | ||||||||||||
| U.S. Segment | DECEMBER 27, |
| DECEMBER 29, |
| DECEMBER 27, |
| DECEMBER 29, | ||||||||
| Revenues |
|
|
|
|
|
|
| ||||||||
| Restaurant sales | $ | 728,485 |
|
| $ | 897,486 |
|
| $ | 2,869,547 |
|
| $ | 3,634,668 |
|
| Franchise and other revenues |
| 3,742 |
|
|
| 13,262 |
|
|
| 15,995 |
|
|
| 53,250 |
|
| Total revenues | $ | 732,227 |
|
| $ | 910,748 |
|
| $ | 2,885,542 |
|
| $ | 3,687,918 |
|
| Restaurant-level operating margin |
| 11.1 | % |
|
| 13.4 | % |
|
| 9.8 | % |
|
| 14.2 | % |
| Income (loss) from operations | $ | 20,338 |
|
| $ | 69,499 |
|
| $ | (1,630 | ) |
| $ | 311,666 |
|
| Operating income (loss) margin |
| 2.8 | % |
|
| 7.6 | % |
|
| (0.1 | )% |
|
| 8.5 | % |
| International Segment |
|
|
|
|
|
|
| ||||||||
| Revenues |
|
|
|
|
|
|
| ||||||||
| Restaurant sales | $ | 77,166 |
|
| $ | 108,383 |
|
| $ | 275,089 |
|
| $ | 440,346 |
|
| Franchise and other revenues |
| 3,112 |
|
|
| 3,053 |
|
|
| 9,930 |
|
|
| 11,125 |
|
| Total revenues | $ | 80,278 |
|
| $ | 111,436 |
|
| $ | 285,019 |
|
| $ | 451,471 |
|
| Restaurant-level operating margin |
| 14.9 | % |
|
| 21.9 | % |
|
| 8.3 | % |
|
| 20.3 | % |
| Income (loss) from operations | $ | 4,730 |
|
| $ | 13,249 |
|
| $ | (13,479 | ) |
| $ | 44,428 |
|
| Operating income (loss) margin |
| 5.9 | % |
|
| 11.9 | % |
|
| (4.7 | )% |
|
| 9.8 | % |
| Reconciliation of Segment Income (Loss) from Operations to Consolidated (Loss) Income from Operations |
|
|
|
|
|
|
| ||||||||
| Segment income (loss) from operations |
|
|
|
|
|
|
| ||||||||
| U.S. | $ | 20,338 |
|
| $ | 69,499 |
|
| $ | (1,630 | ) |
| $ | 311,666 |
|
| International |
| 4,730 |
|
|
| 13,249 |
|
|
| (13,479 | ) |
|
| 44,428 |
|
| Total segment income (loss) from operations |
| 25,068 |
|
|
| 82,748 |
|
|
| (15,109 | ) |
|
| 356,094 |
|
| Unallocated corporate operating expense |
| (32,306 | ) |
|
| (39,570 | ) |
|
| (159,864 | ) |
|
| (165,004 | ) |
| Total (loss) income from operations | $ | (7,238 | ) |
| $ | 43,178 |
|
| $ | (174,973 | ) |
| $ | 191,090 |
|
| TABLE THREE | |||||||
| BLOOMIN’ BRANDS, INC. | |||||||
| SUPPLEMENTAL BALANCE SHEET INFORMATION | |||||||
| (UNAUDITED) | |||||||
| (in thousands) | DECEMBER 27, 2020 |
| DECEMBER 29, 2019 | ||||
| Cash and cash equivalents | $ | 109,980 |
|
| $ | 67,145 |
|
| Net working capital (deficit) (1) | $ | (626,250 | ) |
| $ | (621,553 | ) |
| Total assets | $ | 3,362,107 |
|
| $ | 3,592,683 |
|
| Total debt, net | $ | 1,036,480 |
|
| $ | 1,048,704 |
|
| Total stockholders’ equity | $ | 10,957 |
|
| $ | 177,481 |
|
| Common stock outstanding |
| 87,856 |
|
|
| 86,946 |
|
| _________________ | ||
| (1)
|
| We have, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies). We operate successfully with negative working capital because cash collected on Restaurant sales is typically received before payment is due on our current liabilities, and our inventory turnover rates require relatively low investment in inventories. Additionally, ongoing cash flows from restaurant operations and gift card sales are typically 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 |
| FAVORABLE | |||||||||||
|
| DECEMBER 27, 2020 |
| DECEMBER 29, 2019 |
| ||||||||||
| Consolidated: | GAAP |
| ADJUSTED (1) |
| GAAP |
| ADJUSTED (1) |
| ||||||
| Restaurant sales | 100.0 | % |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % |
|
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Food and beverage costs | 31.2 | % |
| 30.8 | % |
| 31.1 | % |
| 31.4 | % |
| 0.6 | % |
| Labor and other related | 30.2 | % |
| 30.2 | % |
| 29.7 | % |
| 29.7 | % |
| (0.5 | )% |
| Other restaurant operating | 26.7 | % |
| 26.6 | % |
| 24.8 | % |
| 25.0 | % |
| (1.6 | )% |
|
|
|
|
|
|
|
|
|
|
| |||||
| Restaurant-level operating margin (2) | 11.8 | % |
| 12.4 | % |
| 14.4 | % |
| 13.9 | % |
| (1.5 | )% |
|
|
|
|
|
|
|
|
|
|
| |||||
| Segments - Restaurant-level operating margin: |
|
|
|
|
|
|
|
|
| |||||
| U.S. (2) | 11.1 | % |
| 11.7 | % |
| 13.4 | % |
| 13.4 | % |
| (1.7 | )% |
| International (2) | 14.9 | % |
| 14.9 | % |
| 21.9 | % |
| 17.7 | % |
| (2.8 | )% |
|
|
|
|
|
|
|
|
|
|
| |||||
|
| FISCAL YEAR ENDED |
| FAVORABLE | |||||||||||
|
| DECEMBER 27, 2020 |
| DECEMBER 29, 2019 |
| ||||||||||
| Consolidated: | GAAP |
| ADJUSTED (1) |
| GAAP |
| ADJUSTED (1) |
| ||||||
| Restaurant sales | 100.0 | % |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % |
|
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Food and beverage costs | 31.3 | % |
| 30.9 | % |
| 31.4 | % |
| 31.4 | % |
| 0.5 | % |
| Labor and other related | 32.0 | % |
| 32.0 | % |
| 29.6 | % |
| 29.6 | % |
| (2.4 | )% |
| Other restaurant operating | 26.9 | % |
| 26.9 | % |
| 24.1 | % |
| 24.2 | % |
| (2.7 | )% |
|
|
|
|
|
|
|
|
|
|
| |||||
| Restaurant-level operating margin (2) | 9.9 | % |
| 10.2 | % |
| 14.9 | % |
| 14.7 | % |
| (4.5 | )% |
|
|
|
|
|
|
|
|
|
|
| |||||
| Segments - Restaurant-level operating margin: |
|
|
|
|
|
|
|
|
| |||||
| U.S. (2) | 9.8 | % |
| 10.2 | % |
| 14.2 | % |
| 14.1 | % |
| (3.9 | )% |
| International (2) | 8.3 | % |
| 9.0 | % |
| 20.3 | % |
| 19.3 | % |
| (10.3 | )% |
| _________________ | ||
| (1) |
| The table set forth below titled “Restaurant-level Operating Margin Adjustments” provides additional information regarding the adjustments for each period presented. |
| (2) |
| The following categories of our revenue and operating expenses are not included in restaurant-level operating margin because we do not consider them reflective of operating performance at the restaurant-level within a period: |
|
|
| (a) Franchise and other revenues, which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income. |
|
|
| (b) Depreciation and amortization which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants. |
|
|
| (c) General and administrative expense which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices. |
|
|
| (d) Asset impairment charges and restaurant closing costs which are not reflective of ongoing restaurant performance in a period. |
Restaurant-level Operating Margin Adjustments - Following is a summary of unfavorable (favorable) adjusted restaurant-level operating margin adjustments recorded in Other restaurant operating expense (unless otherwise noted below) for the following activities, as described in table six of this release:
|
| THIRTEEN WEEKS ENDED |
| FISCAL YEAR ENDED | ||||||||||||
| (dollars in millions) | DECEMBER 27, |
| DECEMBER 29, |
| DECEMBER 27, |
| DECEMBER 29, | ||||||||
| COVID-19 related costs (1) | $ | (4.5 | ) |
| $ | — |
|
| $ | (14.3 | ) |
| $ | — |
|
| Restaurant and asset impairments and closing costs |
| — |
|
|
| 0.3 |
|
|
| 2.8 |
|
|
| 4.3 |
|
| Restaurant relocations and related costs |
| — |
|
|
| (0.2 | ) |
|
| (0.1 | ) |
|
| (0.6 | ) |
| Legal and other matters (2) |
| — |
|
|
| 4.6 |
|
|
| — |
|
|
| 4.6 |
|
|
| $ | (4.5 | ) |
| $ | 4.7 |
|
| $ | (11.6 | ) |
| $ | 8.3 |
|
| _________________ | ||
| (1)
|
| Includes $3.7 million and $11.0 million of adjustments recorded in Food and beverage costs during the thirteen weeks and fiscal year ended December 27, 2020, respectively, including $2.0 million of adjustments recorded in the international segment during fiscal year ended December 27, 2020. All other adjustments were recorded within the U.S. segment. |
| (2)
|
| Includes adjustments of $2.7 million and $1.9 million recorded in Food and beverage costs and Other restaurant operating expense, respectively, within the international segment. |
| TABLE FIVE | |||||||||||||||
| BLOOMIN’ BRANDS, INC. | |||||||||||||||
| RESTAURANT-LEVEL OPERATING MARGIN RECONCILIATIONS | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| Consolidated | THIRTEEN WEEKS ENDED |
| FISCAL YEAR ENDED | ||||||||||||
| (dollars in thousands) | DECEMBER 27, |
| DECEMBER 29, |
| DECEMBER 27, |
| DECEMBER 29, | ||||||||
| (Loss) income from operations | $ | (7,238 | ) |
| $ | 43,178 |
|
| $ | (174,973 | ) |
| $ | 191,090 |
|
| Operating (loss) income margin | (0.9 | )% |
| 4.2 | % |
| (5.5 | )% |
| 4.6 | % | ||||
| Less: |
|
|
|
|
|
|
| ||||||||
| Franchise and other revenues | 6,854 |
|
| 16,315 |
|
| 25,925 |
|
| 64,375 |
| ||||
| Plus: |
|
|
|
|
|
|
| ||||||||
| Depreciation and amortization | 42,792 |
|
| 49,615 |
|
| 180,261 |
|
| 196,811 |
| ||||
| General and administrative | 56,624 |
|
| 66,125 |
|
| 254,356 |
|
| 275,239 |
| ||||
| Provision for impaired assets and restaurant closings | 10,131 |
|
| 2,168 |
|
| 76,354 |
|
| 9,085 |
| ||||
| Restaurant-level operating income | $ | 95,455 |
|
| $ | 144,771 |
|
| $ | 310,073 |
|
| $ | 607,850 |
|
| Restaurant-level operating margin | 11.8 | % |
| 14.4 | % |
| 9.9 | % |
| 14.9 | % | ||||
|
|
|
|
|
|
|
|
| ||||||||
| U.S. | THIRTEEN WEEKS ENDED |
| FISCAL YEAR ENDED | ||||||||||||
| (dollars in thousands) | DECEMBER 27, |
| DECEMBER 29, |
| DECEMBER 27, |
| DECEMBER 29, | ||||||||
| Income (loss) from operations | $ | 20,338 |
|
| $ | 69,499 |
|
| $ | (1,630 | ) |
| $ | 311,666 |
|
| Operating income (loss) margin | 2.8 | % |
| 7.6 | % |
| (0.1 | )% |
| 8.5 | % | ||||
| Less: |
|
|
|
|
|
|
| ||||||||
| Franchise and other revenues | 3,742 |
|
| 13,262 |
|
| 15,995 |
|
| 53,250 |
| ||||
| Plus: |
|
|
|
|
|
|
| ||||||||
| Depreciation and amortization | 34,293 |
|
| 38,510 |
|
| 144,298 |
|
| 152,882 |
| ||||
| General and administrative | 19,581 |
|
| 24,296 |
|
| 88,536 |
|
| 101,374 |
| ||||
| Provision for impaired assets and restaurant closings | 10,098 |
|
| 1,200 |
|
| 66,487 |
|
| 4,703 |
| ||||
| Restaurant-level operating income | $ | 80,568 |
|
| $ | 120,243 |
|
| $ | 281,696 |
|
| $ | 517,375 |
|
| Restaurant-level operating margin | 11.1 | % |
| 13.4 | % |
| 9.8 | % |
| 14.2 | % | ||||
|
|
|
|
|
|
|
|
| ||||||||
| International | THIRTEEN WEEKS ENDED |
| FISCAL YEAR ENDED | ||||||||||||
| (dollars in thousands) | DECEMBER 27, |
| DECEMBER 29, |
| DECEMBER 27, |
| DECEMBER 29, | ||||||||
| Income (loss) from operations | $ | 4,730 |
|
| $ | 13,249 |
|
| $ | (13,479 | ) |
| $ | 44,428 |
|
| Operating income (loss) margin | 5.9 | % |
| 11.9 | % |
| (4.7 | )% |
| 9.8 | % | ||||
| Less: |
|
|
|
|
|
|
| ||||||||
| Franchise and other revenues | 3,112 |
|
| 3,053 |
|
| 9,930 |
|
| 11,125 |
| ||||
| Plus: |
|
|
|
|
|
|
| ||||||||
| Depreciation and amortization | 5,408 |
|
| 7,085 |
|
| 23,722 |
|
| 27,491 |
| ||||
| General and administrative | 4,503 |
|
| 6,229 |
|
| 18,916 |
|
| 26,540 |
| ||||
| Provision for impaired assets and restaurant closings | — |
|
| 243 |
|
| 3,640 |
|
| 2,083 |
| ||||
| Restaurant-level operating income | $ | 11,529 |
|
| $ | 23,753 |
|
| $ | 22,869 |
|
| $ | 89,417 |
|
| Restaurant-level operating margin | 14.9 | % |
| 21.9 | % |
| 8.3 | % |
| 20.3 | % | ||||
| TABLE SIX | |||||||||||||||
| BLOOMIN’ BRANDS, INC. | |||||||||||||||
| (LOSS) INCOME FROM OPERATIONS, NET (LOSS) INCOME AND DILUTED (LOSS) EARNINGS PER SHARE NON-GAAP RECONCILIATIONS | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
|
| THIRTEEN WEEKS ENDED |
| FISCAL YEAR ENDED | ||||||||||||
| (in thousands, except per share data) | DECEMBER 27, |
| DECEMBER 29, |
| DECEMBER 27, |
| DECEMBER 29, | ||||||||
| (Loss) income from operations | $ | (7,238 | ) |
| $ | 43,178 |
|
| $ | (174,973 | ) |
| $ | 191,090 |
|
| Operating (loss) income margin | (0.9 | )% |
| 4.2 | % |
| (5.5 | )% |
| 4.6 | % | ||||
| Adjustments: |
|
|
|
|
|
|
| ||||||||
| COVID-19 related costs (1) | 14,593 |
|
| — |
|
| 93,811 |
|
| — |
| ||||
| Severance and other transformational costs (2) | 3,557 |
|
| — |
|
| 32,404 |
|
| 5,511 |
| ||||
| Restaurant relocations and related costs (3) | — |
|
| 747 |
|
| 592 |
|
| 3,208 |
| ||||
| Legal and other matters (4) | — |
|
| (3,811 | ) |
| 178 |
|
| (2,996 | ) | ||||
| Restaurant and asset impairments and closing costs (5) | — |
|
| 2,452 |
|
| (2,797 | ) |
| 3,550 |
| ||||
| Total income (loss) from operations adjustments | $ | 18,150 |
|
| $ | (612 | ) |
| $ | 124,188 |
|
| $ | 9,273 |
|
| Adjusted income (loss) from operations | $ | 10,912 |
|
| $ | 42,566 |
|
| $ | (50,785 | ) |
| $ | 200,363 |
|
| Adjusted operating income (loss) margin | 1.3 | % |
| 4.2 | % |
| (1.6 | )% |
| 4.8 | % | ||||
|
|
|
|
|
|
|
|
| ||||||||
| Net (loss) income attributable to common stockholders | $ | (14,211 | ) |
| $ | 28,004 |
|
| $ | (162,211 | ) |
| $ | 130,573 |
|
| Adjustments: |
|
|
|
|
|
|
| ||||||||
| Income (loss) from operations adjustments | 18,150 |
|
| (612 | ) |
| 124,188 |
|
| 9,273 |
| ||||
| Amortization of debt discount (6) | 2,489 |
|
| — |
|
| 6,275 |
|
| — |
| ||||
| Total adjustments, before income taxes | 20,639 |
|
| (612 | ) |
| 130,463 |
|
| 9,273 |
| ||||
| Adjustment to provision for income taxes (7) | (4,497 | ) |
| 440 |
|
| (32,526 | ) |
| (1,263 | ) | ||||
| Redemption of preferred stock in excess of carrying value (8) | — |
|
| — |
|
| 3,496 |
|
| — |
| ||||
| Net adjustments | 16,142 |
|
| (172 | ) |
| 101,433 |
|
| 8,010 |
| ||||
| Adjusted net income (loss) | $ | 1,931 |
|
| $ | 27,832 |
|
| $ | (60,778 | ) |
| $ | 138,583 |
|
|
|
|
|
|
|
|
|
| ||||||||
| Diluted (loss) earnings per share attributable to common stockholders (9) | $ | (0.16 | ) |
| $ | 0.32 |
|
| $ | (1.85 | ) |
| $ | 1.45 |
|
| Adjusted diluted earnings (loss) per share (9) | $ | 0.02 |
|
| $ | 0.32 |
|
| $ | (0.69 | ) |
| $ | 1.54 |
|
|
|
|
|
|
|
|
|
| ||||||||
| Diluted weighted average common shares outstanding (9) | 88,393 |
|
| 88,188 |
|
| 87,468 |
|
| 89,777 |
| ||||
| _________________ | ||
| (1) |
| Costs incurred in connection with the economic impact of the COVID-19 pandemic, primarily consisting of fixed asset and right-of-use asset impairments, restructuring charges, inventory obsolescence and spoilage, contingent lease liabilities and current expected credit losses. |
| (2) |
| Severance, professional fees and other costs incurred as a result of transformational and restructuring activities. |
| (3) |
| Asset impairment charges and accelerated depreciation incurred in connection with our relocation program. |
| (4) |
| For 2019, includes the recognition of certain value-added tax credits in Brazil of $4.6 million related to prior years, offset by fees and expenses related to certain legal matters. |
| (5) |
| Asset impairment charges and related costs during 2019 primarily related to approved closure and restructuring initiatives and the restructuring of certain international markets. Amount also includes a lease termination gain of $2.8 million during 2020 and gains on the sale of certain surplus properties of $3.8 million during 2019. |
| (6) |
| Amortization of the debt discount related to the issuance of convertible senior notes. |
| (7) |
| Income tax effect of the adjustments for the periods presented. |
| (8) |
| Consideration paid in excess of the carrying value for the redemption of preferred stock of our Abbraccio subsidiary. |
| (9) |
| Due to the GAAP net loss, the effect of dilutive securities was excluded from the calculation of GAAP diluted loss per share for the thirteen weeks and fiscal year ended December 27, 2020. For adjusted diluted earnings per share, the calculation includes dilutive shares of 475,815 and 228,356 related to the diluted effect of stock-based compensation and outstanding warrants, respectively, for the thirteen weeks ended December 27, 2020. However, we exclude from our adjusted diluted shares outstanding calculation the dilutive impact of the convertible notes based on the bond hedge contracts in place that will deliver shares to offset the dilution. |
Following is a summary of the financial statement line item classification of the net (loss) income adjustments:
|
| THIRTEEN WEEKS ENDED |
| FISCAL YEAR ENDED | ||||||||||||
| (dollars in thousands) | DECEMBER 27, |
| DECEMBER 29, |
| DECEMBER 27, |
| DECEMBER 29, | ||||||||
| Food and beverage costs | $ | 3,703 |
|
| $ | (2,683 | ) |
| $ | 11,048 |
|
| $ | (2,683 | ) |
| Other restaurant operating | 752 |
|
| (1,982 | ) |
| 576 |
|
| (5,624 | ) | ||||
| Depreciation and amortization | — |
|
| 593 |
|
| 407 |
|
| 2,376 |
| ||||
| General and administrative | 3,652 |
|
| 1,561 |
|
| 35,708 |
|
| 8,667 |
| ||||
| Provision for impaired assets and restaurant closings | 10,043 |
|
| 1,899 |
|
| 76,449 |
|
| 6,537 |
| ||||
| Interest expense, net | 2,489 |
|
| — |
|
| 6,275 |
|
| — |
| ||||
| (Benefit) provision for income taxes | (4,497 | ) |
| 440 |
|
| (32,526 | ) |
| (1,263 | ) | ||||
| Redemption of preferred stock in excess of carrying value | — |
|
| — |
|
| 3,496 |
|
| — |
| ||||
| Net adjustments | $ | 16,142 |
|
| $ | (172 | ) |
| $ | 101,433 |
|
| $ | 8,010 |
|
| TABLE SEVEN | |||||||||||||||
| BLOOMIN’ BRANDS, INC. | |||||||||||||||
| SEGMENT INCOME (LOSS) FROM OPERATIONS NON-GAAP RECONCILIATION | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| (dollars in thousands) | THIRTEEN WEEKS ENDED |
| FISCAL YEAR ENDED | ||||||||||||
| U.S. Segment | DECEMBER 27, |
| DECEMBER 29, |
| DECEMBER 27, |
| DECEMBER 29, | ||||||||
| Income (loss) from operations | $ | 20,338 |
|
| $ | 69,499 |
|
| $ | (1,630 | ) |
| $ | 311,666 |
|
| Operating income (loss) margin | 2.8 | % |
| 7.6 | % |
| (0.1 | )% |
| 8.5 | % | ||||
| Adjustments: |
|
|
|
|
|
|
| ||||||||
| COVID-19 related costs (1) | 14,593 |
|
| — |
|
| 87,377 |
|
| — |
| ||||
| Restaurant relocations and related costs (2) | — |
|
| 748 |
|
| 592 |
|
| 3,209 |
| ||||
| Severance (3) | — |
|
| — |
|
| — |
|
| 759 |
| ||||
| Restaurant and asset impairments and closing costs (4) | — |
|
| 1,484 |
|
| (2,797 | ) |
| 401 |
| ||||
| Adjusted income from operations | $ | 34,931 |
|
| $ | 71,731 |
|
| $ | 83,542 |
|
| $ | 316,035 |
|
| Adjusted operating income margin | 4.8 | % |
| 7.9 | % |
| 2.9 | % |
| 8.6 | % | ||||
|
|
|
|
|
|
|
|
| ||||||||
| International Segment |
|
|
|
|
|
|
| ||||||||
| Income (loss) from operations | $ | 4,730 |
|
| $ | 13,249 |
|
| $ | (13,479 | ) |
| $ | 44,428 |
|
| Operating income (loss) margin | 5.9 | % |
| 11.9 | % |
| (4.7 | )% |
| 9.8 | % | ||||
| Adjustments: |
|
|
|
|
|
|
| ||||||||
| COVID-19 related costs (1) | — |
|
| — |
|
| 5,651 |
|
| — |
| ||||
| Restaurant and asset impairments and closing costs (4) | — |
|
| 242 |
|
| — |
|
| 2,422 |
| ||||
| Legal and other matters (5) | — |
|
| (4,583 | ) |
| — |
|
| (4,583 | ) | ||||
| Adjusted income (loss) from operations | $ | 4,730 |
|
| $ | 8,908 |
|
| $ | (7,828 | ) |
| $ | 42,267 |
|
| Adjusted operating income (loss) margin | 5.9 | % |
| 8.0 | % |
| (2.7 | )% |
| 9.4 | % | ||||
| _________________ | ||
| (1)
|
| Costs incurred in connection with the economic impact of the COVID-19 pandemic, primarily consisting of fixed asset and right-of-use asset impairments, restructuring charges, inventory obsolescence and spoilage, contingent lease liabilities and current expected credit losses. |
| (2) |
| Asset impairment charges and accelerated depreciation incurred in connection with our relocation program. |
| (3) |
| Severance costs incurred as a result of restructuring activities. |
| (4)
|
| Includes a lease termination gain of $2.8 million within the U.S. segment during 2020 and asset impairment charges and related costs primarily related to approved closure and restructuring initiatives during 2019. Amount also includes gains on the sale of certain surplus properties of $3.8 million within the U.S. segment during 2019. |
| (5) |
| Amount includes the recognition of certain value-added tax credits in Brazil of $4.6 million in Q4 2019 related to prior years. |
| TABLE EIGHT | ||||||||
| BLOOMIN’ BRANDS, INC. | ||||||||
| COMPARATIVE RESTAURANT INFORMATION | ||||||||
| (UNAUDITED) | ||||||||
| Number of restaurants (at end of the period): | SEPTEMBER 27, 2020 |
| OPENINGS |
| CLOSURES |
| DECEMBER 27, 2020 | |
| U.S.: |
|
|
|
|
|
|
| |
| Outback Steakhouse |
|
|
|
|
|
|
| |
| Outback Steakhouse—Company-owned | 567 |
| 2 |
| (1) |
| 568 | |
| Franchised | 140 |
| — |
| (2) |
| 138 | |
| Total | 707 |
| 2 |
| (3) |
| 706 | |
| Carrabba’s Italian Grill |
|
|
|
|
|
|
| |
| Company-owned | 199 |
| — |
| — |
| 199 | |
| Franchised | 21 |
| — |
| — |
| 21 | |
| Total | 220 |
| — |
| — |
| 220 | |
| Bonefish Grill |
|
|
|
|
|
|
| |
| Company-owned | 181 |
| — |
| (1) |
| 180 | |
| Franchised | 7 |
| — |
| — |
| 7 | |
| Total | 188 |
| — |
| (1) |
| 187 | |
| Fleming’s Prime Steakhouse and Wine Bar |
|
|
|
|
|
|
| |
| Company-owned | 65 |
| — |
| (2) |
| 63 | |
| Other |
|
|
|
|
|
|
| |
| Company-owned (1) | 5 |
| — |
| — |
| 5 | |
| U.S. total | 1,185 |
| 2 |
| (6) |
| 1,181 | |
| International: |
|
|
|
|
|
|
| |
| Company-owned |
|
|
|
|
|
|
| |
| Outback Steakhouse - Brazil (2) | 104 |
| 5 |
| — |
| 109 | |
| Other (3) | 31 |
| 2 |
| — |
| 33 | |
| Franchised |
|
|
|
|
|
|
| |
| Outback Steakhouse—South Korea (3) | 88 |
| 8 |
| (1) |
| 95 | |
| Other (1) | 56 |
| 1 |
| (1) |
| 56 | |
| International total | 279 |
| 16 |
| (2) |
| 293 | |
| System-wide total | 1,464 |
| 18 |
| (8) |
| 1,474 | |
| ____________________ | ||
| (1) | U.S. Company-owned and International Franchised Other each include three fast-casual Aussie Grill locations as of December 27, 2020. | |
| (2) | The restaurant counts for Brazil are reported as of August 31, 2020 and November 30, 2020 to correspond with the balance sheet dates of this subsidiary. | |
| (3)
| As of December 27, 2020, the Company had 20 international dark kitchens that offer delivery only. One of these locations was included within Company-owned Other and 19 were included in Franchised Outback Steakhouse - South Korea. | |
| TABLE NINE | |||||||||||
| BLOOMIN’ BRANDS, INC. | |||||||||||
| COMPARABLE RESTAURANT SALES INFORMATION | |||||||||||
| (UNAUDITED) | |||||||||||
|
| THIRTEEN WEEKS ENDED |
| FISCAL YEAR ENDED | ||||||||
|
| DECEMBER 27, |
| DECEMBER 29, |
| DECEMBER 27, |
| DECEMBER 29, | ||||
| Year over year percentage change: |
|
|
|
|
|
|
| ||||
| Comparable restaurant sales (stores open 18 months or more): |
|
|
|
|
|
|
| ||||
| U.S. (1) |
|
|
|
|
|
|
| ||||
| Outback Steakhouse | (15.2 | )% |
| 2.7 | % |
| (16.9 | )% |
| 2.0 | % |
| Carrabba’s Italian Grill | (11.4 | )% |
| 1.4 | % |
| (16.4 | )% |
| 0.1 | % |
| Bonefish Grill | (27.1 | )% |
| 0.5 | % |
| (30.1 | )% |
| 0.1 | % |
| Fleming’s Prime Steakhouse & Wine Bar | (29.7 | )% |
| 0.9 | % |
| (29.5 | )% |
| 0.7 | % |
| Combined U.S. | (17.7 | )% |
| 1.9 | % |
| (19.9 | )% |
| 1.2 | % |
| International |
|
|
|
|
|
|
| ||||
| Outback Steakhouse - Brazil (2) | (14.8 | )% |
| 4.9 | % |
| (31.4 | )% |
| 5.8 | % |
|
|
|
|
|
|
|
|
| ||||
| Traffic: |
|
|
|
|
|
|
| ||||
| U.S. |
|
|
|
|
|
|
| ||||
| Outback Steakhouse | (16.1 | )% |
| 0.6 | % |
| (17.6 | )% |
| (0.7 | )% |
| Carrabba’s Italian Grill | (13.2 | )% |
| 3.1 | % |
| (14.6 | )% |
| 0.2 | % |
| Bonefish Grill (3) | (22.0 | )% |
| (0.2 | )% |
| (20.0 | )% |
| (1.7 | )% |
| Fleming’s Prime Steakhouse & Wine Bar | (27.8 | )% |
| (0.3 | )% |
| (26.7 | )% |
| 0.1 | % |
| Combined U.S. (3) | (16.6 | )% |
| 0.9 | % |
| (17.6 | )% |
| (0.6 | )% |
| International |
|
|
|
|
|
|
| ||||
| Outback Steakhouse - Brazil | (9.0 | )% |
| 8.2 | % |
| (21.5 | )% |
| 3.9 | % |
|
|
|
|
|
|
|
|
| ||||
| Average check per person (4): |
|
|
|
|
|
|
| ||||
| U.S. |
|
|
|
|
|
|
| ||||
| Outback Steakhouse | 0.9 | % |
| 2.1 | % |
| 0.7 | % |
| 2.7 | % |
| Carrabba’s Italian Grill | 1.8 | % |
| (1.7 | )% |
| (1.8 | )% |
| (0.1 | )% |
| Bonefish Grill | (5.1 | )% |
| 0.7 | % |
| (10.1 | )% |
| 1.8 | % |
| Fleming’s Prime Steakhouse & Wine Bar | (1.9 | )% |
| 1.2 | % |
| (2.8 | )% |
| 0.6 | % |
| Combined U.S. | (1.1 | )% |
| 1.0 | % |
| (2.3 | )% |
| 1.8 | % |
| International |
|
|
|
|
|
|
| ||||
| Outback Steakhouse - Brazil | (5.9 | )% |
| (3.3 | )% |
| (9.9 | )% |
| 1.8 | % |
| ____________________ | ||
| (1) |
| Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening. |
| (2) |
| Excludes the effect of fluctuations in foreign currency rates. Includes trading day impact from calendar period reporting. |
| (3) |
| During 2020, Bonefish Grill replaced guest count with entrée count to measure restaurant traffic. Bonefish Grill and Combined U.S. traffic for 2020 was calculated using the entrée count methodology for Bonefish Grill as if the new methodology was in effect at the start of the fiscal year. |
| (4) |
| Average check per person includes the impact of menu pricing changes, product mix and discounts. |
