DALLAS, March 26 /PRNewswire-FirstCall/ -- Brinker
International, Inc. (NYSE: EAT) today estimates earnings per
diluted share, before special items, of $0.41 to $0.44 for the company's third quarter
ended Mar. 24, 2010 as compared to
earnings per diluted share, before special items, of $0.45 for the third quarter of fiscal 2009
(reconciliation included in Table 2). On a GAAP basis, earnings per
diluted share are estimated to be $0.38 to
$0.41 for the third quarter of fiscal 2010 as compared to
$0.34 for the third quarter of fiscal
2009. Comparable restaurant sales are estimated to decline between
3.5 to 4.5 percent for the third quarter (see Table 1). For the
third quarter of fiscal 2010, special items of approximately
($0.03) per diluted share consist
primarily of lease termination charges related to the company's
decision in the second quarter of fiscal 2010 to close
underperforming restaurants. For the third quarter of fiscal 2009,
special items of ($0.11) per diluted
share were primarily related to lease termination charges and
severance.
For the third quarter of fiscal 2010, earnings before special
items were impacted by costs related to the rollout of the new menu
at Chili's, significant weather events and lower than expected tax
expense. The costs associated with implementing the new Chili's
menu lowered earnings by approximately $5.0
million before tax, weather negatively impacted comparable
restaurant sales by approximately 100 basis points, mostly in the
month of February, and the resolution of certain tax positions
resulted in a positive impact of approximately $3.0 million to tax expense. Excluding the impact
of weather, the company experienced an improvement of approximately
150 basis points in March comparable restaurant sales as compared
to January and February combined.
Brinker previously announced that it has entered into a purchase
agreement with OTB Acquisition LLC, an affiliate of Golden Gate
Capital, to sell its On The Border Mexican Grill & Cantina®
brand. The company expects the transaction to close by the end of
fiscal 2010 and anticipates recording a gain upon completion of the
transaction. Due to the pending sale, the results of On The Border
will be presented as discontinued operations in the company's
financial statements beginning with the third quarter fiscal 2010
Form 10-Q filing. Brinker has agreed to provide transitional
corporate support services to On The Border through the end of
fiscal 2011 which will generate additional fees to offset the
internal cost of providing the services.
Earnings per diluted share, before special items and On The
Border, are estimated to be $0.36 to
$0.39 for the third quarter of fiscal 2010 as compared to
earnings per diluted share, before special items and On The Border,
of $0.40 for the third quarter of
fiscal 2009 (reconciliation included in Table 2). Comparable
restaurant sales excluding On The Border are estimated to decline
between 3.5 to 4.5 percent for the third quarter.
Quarterly
Revenues
Table 1: Q3 comparable
restaurant sales
Q3 10 estimated and
Q3
09 actual, company and three reported brands;
percentage
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Q3 10
Comparable
Sales
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Q3 09
Comparable
Sales
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Brinker
International(1)
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(3.5) – (4.5)
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(5.6)
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Chili's
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(4.5) – (5.5)
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(5.2)
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On The
Border
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(2.5) – (3.5)
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(5.0)
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Maggiano's
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1.5 – 2.5
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(9.5)
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(1)
Brinker International comparable restaurant sales
excluding On The Border are estimated at (3.5) to (4.5) for Q3 10
and (5.7) for Q3 09 actual.
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Special Items
Table 2:
Reconciliation of preliminary earnings per share, before special
items(1)
Q3
10
and Q3 09;
$ per diluted share after-tax
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Item
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EPS
Q3 10
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EPS
Q3 09
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Net Income
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0.38 – 0.41
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0.34
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Other (Gains) and Charges
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0.03 – 0.03
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0.11
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Net Income before Special Items
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0.41 – 0.44
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0.45
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On The Border Net Income before Special Items
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(0.05 – 0.05)
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(0.05)
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Adjusted Net Income before Special Items
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0.36 – 0.39
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0.40
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(1) The
company believes excluding other gains and charges and On The
Border 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.
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Fiscal 2010 Outlook
For the full-year fiscal 2010, the company estimates earnings
per diluted share, before special items, to range from a
three percent decline to flat compared to fiscal 2009, or
$1.40 to $1.44 as compared to
$1.44 in the prior year, before
special items and excluding Macaroni Grill. Current expectations of
fiscal 2010 earnings per diluted share, before special items, are
higher than the previous guidance of a range of $1.15 to $1.30 presented in connection with the
release of the company's fourth quarter fiscal 2009 results. The
revised outlook is based on a projected decrease in comparable
restaurant sales of approximately one to two percent for fiscal
2010. This compares to the company's previous estimate of a
decrease of two to four percent. Fiscal 2010 includes a 53rd week
versus 52 weeks in fiscal 2009.
Earnings per diluted share, before special items and On The
Border, are projected to range from a six to three percent decline
compared to fiscal 2009, before special items and excluding On The
Border and Macaroni Grill, or $1.20 to
$1.24 for fiscal 2010 compared to $1.28 in the prior year. Excluding On The Border,
comparable restaurant sales are expected to decline one to two
percent for the fiscal year.
The company believes that providing fiscal 2010 earnings per
diluted share guidance excluding other gains and charges and On The
Border from its financial results provides a clearer perspective
for investors into the company's ongoing operating performance.
Capital Allocation
The company remains committed to returning capital to
shareholders through the payment of quarterly dividends and ongoing
share repurchases while maintaining an investment grade rating.
Effective with the fourth quarter fiscal 2010 payment, the company
will increase the quarterly dividend by 27 percent from
$0.11 to $0.14 per share. Brinker
will use a 40 percent dividend payout ratio as a guideline to
provide additional return to shareholders. The fourth quarter
dividend will be paid on July 1, 2010
to shareholders of record as of June 17,
2010. Brinker's Board of Directors has also authorized an
additional $250 million of share
repurchases, which brings the total available authorization to
$310 million. Management will
repurchase shares with the proceeds stemming from the On The Border
divestiture as well as with excess free cash flow over time as the
business results permit.
Forward Calendar
- Third quarter earnings release, prior to market open on
April 20, 2010.
- Third quarter conference call, via a live webcast at
9 a.m. on April 20, 2010.
- SEC Form 10-Q for third quarter fiscal 2010 filing on or before
May 3, 2010.
Forward-Looking Statements
The statements contained in this release that are not historical
facts are forward-looking statements. These forward-looking
statements involve risks and uncertainties and, consequently, could
be affected by general business and economic conditions, financial
and credit market conditions, reduced disposable income, the impact
of competition, the impact of mergers, acquisitions, divestitures
and other strategic transactions, the seasonality of the company's
business, adverse weather conditions, future commodity prices,
product availability, fuel and utility costs and availability,
terrorists acts, consumer perception of food safety, changes in
consumer taste, health epidemics or pandemics, changes in
demographic trends, availability of employees, unfavorable
publicity, the company's ability to meet its growth plan, acts of
God, governmental regulations, and inflation.
About Brinker International
Brinker, International Inc. is one of the world's leading casual
dining restaurant companies. Founded in 1975 and based in
Dallas, Texas, Brinker currently
owns, operates, or franchises 1704 restaurants under the names
Chili's® Grill & Bar (1,499 restaurants), On The Border Mexican
Grill & Cantina® (160 restaurants) and Maggiano's Little Italy®
(45 restaurants). Brinker also holds a minority investment in
Romano's Macaroni Grill®.
FOR
ADDITIONAL INFORMATION, CONTACT:
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MEDIA
RELATIONS
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(800)
775-7290
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or
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MARIE
PERRY
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INVESTOR
RELATIONS
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BOTH OF
BRINKER INTERNATIONAL
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(972)
770-1276
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6820 LBJ
FREEWAY
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DALLAS,
TEXAS 75240
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SOURCE Brinker International, Inc.