Brinker International Reports First Quarter Of Fiscal 2022 Results

Fiscal 22 vs Fiscal 21

Fiscal 22 vs Fiscal 20⁽²⁾

Q1

Q1

MTD October
through Oct 27

Brinker

17.0

%

5.7

%

5.5

%

Chili's

13.4

%

6.5

%

6.5

%

Maggiano's

62.6

%

(0.2)

%

(0.9)

%

⁽¹⁾ 

Comparable Restaurant Sales include restaurants that have been in operation for more than 18 months except
acquired restaurants which are included after 12 months of 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⁾ 

Represents comparable restaurant sales for the periods presented to the same operating periods prior to the
COVID-19 pandemic.

First Quarter

2022

2021

2020

Company sales

$

859.6

$

728.2

$

763.9

Total revenues

$

876.4

$

740.1

$

786.0

Operating income

$

25.6

$

24.4

$

31.2

Operating income as a percentage of Total revenues

2.9

%

3.3

%

4.0

%

Restaurant operating margin, non-GAAP⁽²⁾

$

89.1

$

84.2

$

84.3

Restaurant operating margin as a percentage of Company sales, non-
GAAP⁽²⁾

10.4

%

11.6

%

11.0

%

Adjusted EBITDA, non-GAAP⁽²⁾

$

69.4

$

65.6

$

68.4

Net income per diluted share

$

0.28

$

0.23

$

0.39

Net income per diluted share, excluding special items, non-GAAP⁽²⁾

$

0.34

$

0.28

$

0.41

⁽¹⁾

Includes the results of It's Just Wings, launched in June 2020 and Maggiano's Italian Classics, launched in
August 2021. They are reflected in the results of our Chili's and Maggiano's brands based on the restaurants
that prepared and processed the food orders.

⁽²⁾

See Non-GAAP Information and Reconciliations section below for more details.

Chili's

Maggiano's

First Quarter

Variance

First Quarter

Variance

2022

2021

2022

2021

Company sales

$

773.3

$

675.0

$

98.3

$

86.3

$

53.2

$

33.1

Franchise and other revenues

14.3

11.5

2.8

2.5

0.4

2.1

Total revenues

$

787.6

$

686.5

$

101.1

$

88.8

$

53.6

$

35.2

Company restaurant expenses⁽¹⁾

$

691.5

$

590.4

$

101.1

$

78.9

$

53.3

$

25.6

Company restaurant expenses as a %
of Company sales

89.4

%

87.5

%

1.9

%

91.4

%

100.2

%

(8.8)

%

Operating income (loss)

$

52.3

$

56.5

$

(4.2)

$

4.3

$

(4.7)

$

9.0

Operating income (loss) as a % of
Total revenues

6.6

%

8.2

%

(1.6)

%

4.8

%

(8.8)

%

13.6

%

Restaurant operating margin - non-
GAAP

$

81.8

$

84.6

$

(2.8)

$

7.4

$

(0.1)

$

7.5

Restaurant operating margin as a % of
Company sales - non-GAAP

10.6

%

12.5

%

(1.9)

%

8.6

%

(0.2)

%

8.8

%

⁽¹⁾ 

Company restaurant expenses includes Food and beverage costs, Restaurant labor and Restaurant expenses,
and excludes Depreciation and amortization, General and administrative and Other (gains) and charges.

BRINKER INTERNATIONAL, INC.
Consolidated Statements of Comprehensive Income (Unaudited)
(In millions, except per share amounts)

Thirteen Week Periods Ended

September 29,
2021

September 23,
2020

Revenues

Company sales

$

859.6

$

728.2

Franchise and other revenues⁽¹⁾

16.8

11.9

Total revenues

876.4

740.1

Operating costs and expenses

Food and beverage costs

234.3

193.5

Restaurant labor

304.9

248.0

Restaurant expenses

231.3

202.5

Depreciation and amortization

39.3

37.4

General and administrative

36.5

30.5

Other (gains) and charges⁽²⁾

4.5

3.8

Total operating costs and expenses

850.8

715.7

Operating income

25.6

24.4

Interest expenses

12.5

14.6

Other income, net

(0.3)

(0.4)

Income before income taxes

13.4

10.2

Provision (benefit) for income taxes

0.2

(0.5)

Net income

$

13.2

$

10.7

Basic net income per share

$

0.29

$

0.24

Diluted net income per share

$

0.28

$

0.23

Basic weighted average shares outstanding

45.9

45.1

Diluted weighted average shares outstanding

47.0

45.7

Other comprehensive income (loss)

Foreign currency translation adjustments⁽³⁾

$

(0.4)

$

0.3

Other comprehensive income (loss)

(0.4)

0.3

Comprehensive income

$

12.8

$

11.0

⁽¹⁾

Franchise and other revenues include franchise royalties, delivery service income, gift card breakage,
Maggiano's banquet service charge income, digital entertainment revenues, franchise advertising fees,
franchise and development fees, merchandise income 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

September 29,
2021

September 23,
2020

Remodel-related costs

$

1.5

$

0.2

Loss from natural disasters, net of (insurance recoveries)

0.6

—

Enterprise system implementation

0.6

—

COVID-19 related charges

0.3

1.2

Restaurant closure charges

0.2

1.5

Other

1.3

0.9

$

4.5

$

3.8

⁽³⁾   

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)

September 29,
2021

June 30,
2021

ASSETS

Total current assets

$

217.3

$

207.2

Net property and equipment

799.4

774.8

Operating lease assets

1,041.0

1,007.4

Deferred income taxes, net

42.6

50.9

Other assets

239.1

234.6

Total assets

$

2,339.4

$

2,274.9

LIABILITIES AND SHAREHOLDERS' DEFICIT

Total current liabilities

$

547.2

$

571.6

Long-term debt and finance leases, less current installments

999.7

917.9

Long-term operating lease liabilities, less current portion

1,037.2

1,006.7

Other liabilities

80.8

82.0

Total shareholders' deficit

(325.5)

(303.3)

Total liabilities and shareholders' deficit

$

2,339.4

$

2,274.9

Of the 1,145 Company-owned restaurants, at September 29, 2021, we own both the building and land for 46
restaurants. The related book values associated with these restaurants included land of $38.3 million and buildings of
$13.2 million.

BRINKER INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)

Thirteen Week Periods Ended

September 29,
2021

September 23,
2020

Cash flows from operating activities

Net income

$

13.2

$

10.7

Adjustments to reconcile Net income to Net cash provided by operating activities:

Depreciation and amortization

39.3

37.4

Stock-based compensation

4.3

3.9

Restructure and impairment charges

1.9

0.5

Net loss on disposal of assets

0.7

0.4

Other

1.5

0.8

Changes in assets and liabilities

(20.7)

29.1

Net cash provided by operating activities

40.2

82.8

Cash flows from investing activities

Payments for property and equipment

(37.3)

(13.6)

Payments for franchise restaurant acquisitions

(47.5)

—

Proceeds from sale leaseback transactions, net of related expenses

20.5

—

Proceeds from note receivable

—

0.6

Net cash used in investing activities

(64.3)

(13.0)

Cash flows from financing activities

Borrowings on revolving credit facility

285.0

28.4

Payments on revolving credit facility

(205.0)

(75.0)

Purchases of treasury stock

(39.6)

(3.9)

Payments on long-term debt

(5.5)

(4.6)

Payments for debt issuance costs

(3.0)

(1.5)

Payments of dividends

(0.8)

(1.3)

Proceeds from issuance of treasury stock

0.3

3.0

Net cash provided by (used in) financing activities

31.4

(54.9)

Net change in cash and cash equivalents

7.3

14.9

Cash and cash equivalents at beginning of period

23.9

43.9

Cash and cash equivalents at end of period

$

31.2

$

58.8

BRINKER INTERNATIONAL, INC.
Restaurant Summary

Fiscal 2022 New Openings

Total Restaurants
Open at
September 29,
2021

Total Restaurants
Open at
September 23,
2020

First Quarter
Openings

Full Year
Projected
Openings

Company-owned restaurants

Chili's domestic⁽¹⁾

1,088

1,059

1

8

Chili's international

5

5

—

—

Maggiano's domestic

52

52

—

—

Total Company-owned

1,145

1,116

1

8

Franchise restaurants

Chili's domestic⁽¹⁾

146

172

—

3

Chili's international

357

371

3

9-12

Maggiano's domestic

2

1

—

0

Total franchise

505

544

3

12-15

Total Company-owned and franchise

Chili's domestic

1,234

1,231

1

11

Chili's international

362

376

3

9-12

Maggiano's domestic

54

53

—

0

Total

1,650

1,660

4

20-23

⁽¹⁾  

During the first quarter of fiscal 2022, we acquired 23 Chili's restaurants located in the Mid-Atlantic region
of the United States owned by a franchisee. The acquisition of these restaurants is not reflected in the First
Quarter Openings or Full Year Projected Openings totals as these are existing restaurant locations
transitioning ownership. These acquired restaurants are included in Total Restaurants Open at September 29,
2021 within the total for Company-owned restaurants Chili's domestic.

NON-GAAP INFORMATION AND RECONCILIATIONS

Comparable Restaurant Sales

Q1 22 and Q1 21

Comparable Restaurant
Sales⁽¹⁾

Price Impact

Mix-Shift⁽²⁾

Traffic

Q1:22 vs 21

Q1:21 vs 20

Q1:22 vs 21

Q1:21 vs 20

Q1:22 vs 21

Q1:21 vs 20

Q1:22 vs 21

Q1:21 vs 20

Company-owned

17.0

%

(10.9)

%

0.6

%

0.4

%

5.6

%

(6.3)

%

10.8

%

(5.0)

%

Chili's

13.4

%

(7.2)

%

0.6

%

0.2

%

3.4

%

(4.2)

%

9.4

%

(3.2)

%

Maggiano's

62.6

%

(38.6)

%

0.2

%

3.0

%

23.3

%

(12.7)

%

39.1

%

(28.9)

%

Chili's franchise⁽³⁾

23.1

%

(11.5)

%

U.S.

17.8

%

(5.6)

%

International

32.0

%

(21.9)

%

Chili's domestic⁽⁴⁾

13.8

%

(7.0)

%

System-wide⁽⁵⁾

17.8

%

(11.0)

%

⁽¹⁾       

Comparable Restaurant Sales include all restaurants that have been in operation for more than 18 months
except acquired restaurants which are included after 12 months of 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 Total 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 presenting Chili's franchise comparable
restaurant sales provides investors relevant information regarding total brand performance.

⁽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 and sales generated at franchise-operated Chili's restaurants.

Q1 22

EPS

Q1 22

Q1 21

EPS

Q1 21

Net income - GAAP

$

13.2

$

0.28

$

10.7

$

0.23

Special items - Other (gains) and charges⁽¹⁾

4.5

0.10

3.8

0.08

Special items - Depreciation

0.1

0.00

0.2

0.01

Special items - Interest⁽²⁾

0.7

0.01

—

—

Income tax effect related to special items⁽³⁾

(1.3)

(0.03)

(1.0)

(0.02)

Special items, net of taxes

4.0

0.08

3.0

0.07

Adjustment for special tax items⁽⁴⁾

(1.1)

(0.02)

(0.8)

(0.02)

Net income, excluding special items - Non-GAAP

$

16.1

$

0.34

$

12.9

$

0.28

⁽¹⁾         

Special items - Other (gains) and charges represents Other (gains) and charges for each period presented. See
Footnote "(2)" to the Consolidated Statements of Comprehensive Income (Unaudited) for additional details
on the composition of Other (gains) and charges.

⁽²⁾       

Special items - Interest represents the write-off of unamortized debt issuance costs related to the restructuring
of our new revolving credit facility in the first quarter of fiscal 2022.

⁽³⁾      

Income tax effect related to special items is based on the statutory tax rate in effect at the end of each period
presented.

⁽⁴⁾      

Adjustment for special tax items in the first quarter of fiscal 2022 primarily related to a decrease in
unrecognized tax benefits and excess tax windfalls associated with stock-based compensation. Adjustment
for special tax items in the first quarter of fiscal 2021 primarily related to excess tax windfalls associated with
stock-based compensation.

Reconciliation of Restaurant Operating Margin (in millions, except percentages)

Q1 22

Chili's

Maggiano's

Brinker

Q1 22

Q1 21

Q1 22

Q1 21

Q1 22

Q1 21

Operating income (loss) - GAAP

$

52.3

$

56.5

$

4.3

$

(4.7)

$

25.6

$

24.4

Operating income (loss) as a percentage of Total revenues

6.6

%

8.2

%

4.8

%

(8.8)

%

2.9

%

3.3

%

Operating income (loss) - GAAP

$

52.3

$

56.5

$

4.3

$

(4.7)

$

25.6

$

24.4

Less:  Franchise and other revenues

(14.3)

(11.5)

(2.5)

(0.4)

(16.8)

(11.9)

Plus:  Depreciation and amortization

33.0

30.6

3.4

3.6

39.3

37.4

General and administrative

8.0

5.4

2.0

1.3

36.5

30.5

Other (gains) and charges

2.8

3.6

0.2

0.1

4.5

3.8

Restaurant operating margin - non-GAAP

$

81.8

$

84.6

$

7.4

$

(0.1)

$

89.1

$

84.2

Restaurant operating margin as a percentage of
Company sales

10.6

%

12.5

%

8.6

%

(0.2)

%

10.4

%

11.6

%

Q1 22

Q1 21

Q1 20

Operating income - GAAP

$

25.6

$

24.4

$

31.2

Depreciation and amortization

39.3

37.4

38.1

Other (gains) and charges

4.5

3.8

(0.9)

Adjusted EBITDA, non-GAAP

$

69.4

$

65.6

$

68.4

Thirteen Week
Period Ended
September 29,
2021

Cash flows provided by operating activities - GAAP

$

40.2

Capital expenditures

(37.3)

Free cash flow - non-GAAP

$

2.9