EAT
$41.98
Brinker International
$.98
2.39%
Earnings Details
3rd Quarter March 2019
Tuesday, April 30, 2019 6:45:00 AM
Tweet Share Watch
Summary

Brinker International (EAT) Recent Earnings

Brinker International (EAT) reported 3rd Quarter March 2019 earnings of $1.26 per share on revenue of $839.3 million. The consensus earnings estimate was $1.20 per share on revenue of $833.4 million. Revenue grew 3.3% on a year-over-year basis.

Brinker International Inc is a dining restaurant company. The Company is engaged in the ownership, operation, development, and franchising of the Chili’s Grill & Bar and Maggianos Little Italy restaurant brands.

Results
Reported Earnings
$1.26
Earnings Whisper
-
Consensus Estimate
$1.20
Reported Revenue
$839.3 Mil
Revenue Estimate
$833.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Brinker International Reports Third Quarter Results

DALLAS, April 30, 2019 /PRNewswire/ -- Brinker International, Inc. (NYSE: EAT) today announced results for the fiscal third quarter ended March 27, 2019.

Brinker International, Inc. (PRNewsfoto/Brinker International, Inc.)

Highlights include the following:

  • Earnings per diluted share, on a GAAP basis, in the third quarter of fiscal 2019 increased 28.4% to $1.31 compared to $1.02 in the third quarter of fiscal 2018
  • Earnings per diluted share, excluding special items, in the third quarter of fiscal 2019 increased 16.7% to $1.26 compared to $1.08 in the third quarter of fiscal 2018 (see non-GAAP reconciliation below)
  • Brinker International's Company sales in the third quarter of fiscal 2019 increased 2.7% to $811.6 million compared to the third quarter of fiscal 2018. Total revenues in the third quarter of fiscal 2019 increased 3.3% to $839.3 million compared to the third quarter of fiscal 2018
  • Chili's company-owned comparable restaurant sales increased 2.9% in the third quarter of fiscal 2019 compared to the third quarter of fiscal 2018. Chili's U.S. franchise comparable restaurant sales increased 2.0% in the third quarter of fiscal 2019 compared to the third quarter of fiscal 2018
  • Maggiano's company-owned comparable restaurant sales increased 0.4% in the third quarter of fiscal 2019 compared to the third quarter of fiscal 2018
  • Chili's international franchise comparable restaurant sales decreased 3.9% in the third quarter of fiscal 2019 compared to the third quarter of fiscal 2018
  • Operating income, as a percent of Total revenues, was 8.4% in the third quarter of fiscal 2019 compared to 8.9% in the third quarter of fiscal 2018 representing a decrease of approximately 50 basis points
  • Restaurant operating margin, as a percent of Company sales, was 14.3% in the third quarter of fiscal 2019 which included the impact of the sale leaseback transactions and adopting the new revenue accounting standard ("ASC 606"), compared to 16.1% in the third quarter of fiscal 2018 (see non-GAAP reconciliation below). Excluding the impact of the sale leaseback transactions and ASC 606, Restaurant operating margin would have been flat year-over-year
  • Cash flows provided by operating activities in the thirty-nine week period ended March 27, 2019 was $150.6 million and capital expenditures totaled $128.0 million resulting in free cash flow of $22.6 million (see non-GAAP reconciliation below) which was reduced by $75.0 million in cash tax payments related to the gain on the sale leaseback transactions. Proceeds from sale leaseback transactions of $468.8 million are included in Cash flows provided by investing activities
  • The Company's Board of Directors approved a quarterly dividend of $0.38 per share on the common stock of the Company. The dividend will be payable June 27, 2019 to shareholders of record as of June 7, 2019

"Brinker posted strong comp sales growth and industry leading traffic again in the third quarter," said Wyman Roberts, CEO and President. "This marked our 5th consecutive quarter of significantly outperforming the category in traffic. Our focus continues to be on elevating our guest experiences and providing true every day value to increase the frequency and loyalty of our guests."

QUARTERLY OPERATING PERFORMANCE

Company Sales and Company Restaurant Expenses

Chili's Company sales in the third quarter of fiscal 2019 increased 3.0% to $709.8 million from $688.9 million in the third quarter of fiscal 2018 primarily due to an increase in comparable restaurant sales. As compared to the third quarter of fiscal 2018, Chili's restaurant operating margin(1) declined. Chili's Restaurant expenses, as a percent of Company sales, increased compared to the third quarter of fiscal 2018 primarily due to higher rent expense associated with the new operating leases entered into as part of the sale leaseback transactions and the impact of adopting ASC 606, partially offset by sales leverage. Cost of sales, as a percent of Company sales, increased compared to the third quarter of fiscal 2018 primarily due to unfavorable menu item mix and commodity pricing, partially offset by increased menu pricing. Restaurant labor, as a percent of Company sales, increased compared to the third quarter of fiscal 2018 due to higher wage rates and incentive compensation, partially offset by sales leverage and lower employee health insurance expenses.

Maggiano's Company sales in the third quarter of fiscal 2019 increased 0.2% to $101.8 million from $101.6 million in the third quarter of fiscal 2018 primarily due to an increase in comparable restaurant sales. As compared to the third quarter of fiscal 2018, Maggiano's restaurant operating margin(1) declined. This was primarily driven by Restaurant expenses, as a percent of Company sales, that increased compared to the third quarter of fiscal 2018, primarily due to higher rent and repairs and maintenance expenses. Cost of sales, as a percent of Company sales, also increased compared to the third quarter of fiscal 2018 primarily due to unfavorable menu item mix and commodity pricing, partially offset by increased menu pricing. This was partially offset by a decrease in Restaurant labor, as a percent of Company sales, primarily due to lower incentive compensation, partially offset by higher wages.

(1)

Restaurant operating margin is defined as Company sales less Cost of sales, Restaurant labor and Restaurant expenses and excludes Depreciation and amortization expenses (see non-GAAP reconciliation below).

Franchise and Other Revenues

Franchise and other revenues in the third quarter of fiscal 2019 increased 25.9% to $27.7 million from $22.0 million in the third quarter of fiscal 2018 primarily due to the adoption of ASC 606 during the first quarter of fiscal 2019. Please refer to "REVENUE RECOGNITION UPDATE" section below for more details on the new revenue standard. Brinker franchisees generated approximately $335.0 million in sales(2) in the third quarter of fiscal 2019.

(2)

Royalty revenues are recognized based on the sales generated and reported to the Company by franchisees.

Other

Depreciation and amortization expense in the third quarter of fiscal 2019 decreased $1.1 million compared to the third quarter of fiscal 2018 primarily due to an increase in fully depreciated assets, sale leaseback transactions and restaurant closures, partially offset by additions for existing restaurants primarily related to Chili's remodels and new restaurants.

General and administrative expense in the third quarter of fiscal 2019 increased $4.1 million compared to the third quarter of fiscal 2018 primarily due to higher incentive compensation and stock compensation expenses.

Income Taxes

On a GAAP basis, the effective income tax rate in the third quarter of fiscal 2019 decreased to 10.3% compared to 20.4% in the third quarter of fiscal 2018. The Tax Act lowered the federal statutory tax rate from 35.0% to 21.0% effective January 1, 2018. Additionally, our fiscal 2019 effective income tax rate is further lowered due to an increase in the FICA tax credit benefit, partially offset by the impact of sale leaseback transactions.

Guidance Policy

Brinker provides annual guidance as it relates to comparable restaurant sales, earnings per diluted share, excluding special items, and other key line items in the consolidated statements of comprehensive income and will only provide updates if there is a material change versus the original guidance. 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 in the remainder of fiscal 2019, reconciliations to the appropriate GAAP measures will be provided.


COMPARABLE RESTAURANT SALES

The table below presents the percent change in company-owned and franchise comparable restaurant sales in the third quarter of fiscal 2019 compared to the third quarter of fiscal 2018, and the third quarter of fiscal 2018 compared to the third quarter of fiscal 2017:


Comparable Sales (1)


Price Impact


Mix-Shift (2)


Traffic


Q3: 19 vs 18


Q3: 18 vs 17


Q3: 19 vs 18


Q3: 18 vs 17


Q3: 19 vs 18


Q3: 18 vs 17


Q3: 19 vs 18


Q3: 18 vs 17

Company-owned

2.6

%


(0.3)

%


1.5

%


1.2

%


(1.7)

%


0.6

%


2.8

%


(2.1)

%

Chili's

2.9

%


(0.4)

%


1.6

%


1.1

%


(1.7)

%


0.6

%


3.0

%


(2.1)

%

Maggiano's

0.4

%


0.5

%


0.8

%


1.3

%


(0.4)

%


0.6

%


0.0

%


(1.4)

%

Chili's franchise (3) (4)

(0.2)

%


(2.2)

%













U.S. (4)

2.0

%


(3.3)

%













International

(3.9)

%


(0.2)

%













Chili's domestic (5)

2.7

%


(1.1)

%













System-wide (6)

1.8

%


(0.8)

%















(1)

Comparable restaurant sales include all restaurants that have been in operation for more than 18 months. Amounts are calculated based on comparable current period versus same period a year ago.



(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; 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 and may impact future restaurant development.



(4)

Chili's franchise comparable sales in the U.S. for the Q3: 18 vs 17 period were restated due to a change in franchise reported sales. Chili's domestic and System-wide comparable sales were not affected by this restatement.



(5)

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.



(6)

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.


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.

Reconciliation of Net Income and Earnings Per Share Excluding Special Items

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. The following reconciliation is presented in millions, except per share amounts.


Q3 19


EPS Q3 19


Q3 18


EPS Q3 18

Net income

$

49.8



$

1.31



$

46.9



$

1.02


Special items (1)

(2.5)



(0.07)



2.7



0.06


Income tax effect related to special items (2)

0.6



0.02



(0.8)



(0.02)


Special items, net of taxes

(1.9)



(0.05)



1.9



0.04


Adjustment for special tax items (3)





0.8



0.02


Net income excluding special items

$

47.9



$

1.26



$

49.6



$

1.08




(1)

Special items in the third quarter of fiscal 2019 consist of a $3.5 million gain in Other (gains) and charges, partially offset by $1.0 million of incremental depreciation expense associated with a change in estimated useful life of certain restaurant-level long-lived assets. Special items in the third quarter of fiscal 2018 consist of a $2.7 million charge primarily related to lease termination expenses. Footnote "(2)" to the Consolidated Statements of Comprehensive Income contains additional details on the composition of Other (gains) and charges.



(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 third quarter of fiscal 2018 primarily relates to deferred taxes pursuant to prior year tax return adjustments.

Reconciliation of Restaurant Operating Margin

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 in that 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 Company restaurant expenses, including Cost of sales, 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 expense, Depreciation and amortization, and Other (gains) and charges.

Restaurant operating margin excludes Franchise and other revenues which are earned primarily from franchise royalties and other non-food and beverage revenue streams such as banquet service charges, digital entertainment revenues and gift card breakage. Depreciation and amortization expense, substantially all of which is related to restaurant-level assets, is excluded because such expense represents historical costs which do not reflect current cash outlays for the restaurants. General and administrative expense includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices and is 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.

The adoption of the new revenue standard, ASC 606, in first quarter of fiscal 2019 changed the presentation and recording of certain items contained within Franchise and other revenues, Operating income, and Restaurant operating margin. The adoption did not have a significant impact. For more details about the impact of adopting the new revenue standard please refer to the "REVENUE RECOGNITION UPDATE" section below. The following reconciliation is presented in millions, except percentages.


Q3 19


Q3 18

Operating income - GAAP

$

70.2



$

72.7


Operating income, as a percent of Total revenue

8.4

%


8.9

%





Operating income

70.2



72.7


Less:  Franchise and other revenues

(27.7)



(22.0)


Plus:  Depreciation and amortization

36.4



37.5


General and administrative

40.8



36.7


Other (gains) and charges

(3.5)



2.7


Restaurant operating margin - non-GAAP

$

116.2



$

127.6


Restaurant operating margin, as a percent of Company sales

14.3

%


16.1

%

Reconciliation of Free Cash Flow

Brinker believes presenting free cash flow provides a useful measure to evaluate the cash flow available for reinvestment after considering the capital requirements of our business operations (in millions).


Q3 19

Cash flows provided by operating activities - GAAP

$

150.6


Capital expenditures

(128.0)


Free cash flow - non-GAAP

$

22.6


During the thirty-nine week period ended March 27, 2019, Cash flows provided by operating activities - GAAP were reduced by $75.0 million of cash tax payments related to the gain on the sale leaseback transactions. The cash proceeds received from the sale leaseback transactions of $468.8 million are recorded in Cash flows provided by investing activities during the thirty-nine week period ended March 27, 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, April 30, 2019 at 9 a.m. CDT:

http://investors.brinker.com/events/event-details/q3-2019-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 May 28, 2019.

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-Q for the third quarter of fiscal 2019 filing on or before May 6, 2019; and
  • Fourth quarter earnings release on August 13, 2019.

ABOUT BRINKER

Brinker International, Inc. is one of the world's leading casual dining restaurant companies. Based in Dallas, Texas, as of March 27, 2019, Brinker owned, operated, or franchised 1,676 restaurants under the names Chili's® Grill & Bar (1,623 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. These risks and uncertainties are, in many instances, beyond our control. Such risks and uncertainties include, among other things, 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, and tax reform, as well as the risks described under the caption "Risk Factors" in our fiscal 2018 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


Thirty-Nine Week Periods Ended


March 27, 2019


March 28, 2018


March 27, 2019


March 28, 2018

Revenues








Company sales

$

811.6



$

790.5



$

2,301.4



$

2,250.1


Franchise and other revenues (1)

27.7



22.0


82.4



68.2


Total revenues

839.3



812.5



2,383.8



2,318.3


Operating costs and expenses








Company restaurants (excluding depreciation and amortization)








Cost of sales

216.7



207.3



609.5



587.8


Restaurant labor

274.0



265.4



791.1



766.9


Restaurant expenses (1)

204.7



190.2



609.4



566.9


Company restaurant expenses

695.4



662.9



2,010.0



1,921.6


Depreciation and amortization

36.4



37.5



109.5



113.7


General and administrative

40.8



36.7



110.0



102.1


Other (gains) and charges (2)

(3.5)



2.7



(12.4)



25.2


Total operating costs and expenses

769.1



739.8



2,217.1



2,162.6


Operating income

70.2



72.7



166.7



155.7


Interest expense

15.3



14.6



46.3



42.8


Other (income), net

(0.6)



(0.8)



(2.2)



(2.3)


Income before provision for income taxes

55.5



58.9



122.6



115.2


Provision for income taxes

5.7



12.0



14.4



33.1


Net income

$

49.8



$

46.9



$

108.2



$

82.1










Basic net income per share

$

1.33



$

1.03



$

2.80



$

1.76










Diluted net income per share

$

1.31



$

1.02



$

2.75



$

1.74










Basic weighted average shares outstanding

37.5



45.4



38.6



46.7










Diluted weighted average shares outstanding

38.1



46.0



39.3



47.2










Other comprehensive income (loss)








Foreign currency translation adjustments (3)

$

0.2



$

(0.2)



$

(0.1)



$

0.6


Other comprehensive income (loss)

0.2



(0.2)



(0.1)



0.6


Comprehensive income

$

50.0



$

46.7



$

108.1



$

82.7




(1)

Franchise and other revenues and Restaurant expenses in the thirteen and thirty-nine week periods ended March 27, 2019 includes the impact from adoption of ASC 606, whereas the thirteen and thirty-nine week periods ended March 28, 2018 was not restated. Please see "REVENUE RECOGNITION UPDATE" section for further details. Franchise and other revenues include royalties, advertising fees (effective in the first quarter of fiscal 2019), gift card breakage, Maggiano's banquet service charge income, digital entertainment revenues, gift card equalization, gift card discount costs from third-party gift card sales, franchise and development fees, delivery fee income, merchandise income and retail royalty revenues.



(2)

Other (gains) and charges included in the Consolidated Statements of Comprehensive Income include (in millions):

 


Thirteen Week Periods Ended


Thirty-Nine Week Periods Ended


March 27, 2019


March 28, 2018


March 27, 2019


March 28, 2018

(Gain) on sale of assets, net

$

(6.0)



$



$

(6.8)



$

(0.3)


Sale leaseback (gain), net of transaction charges

(4.3)





(22.0)




Foreign currency transaction (gain)

(0.5)



(1.0)



(0.6)



(0.1)


Corporate headquarters relocation charges

5.2





5.2




Remodel-related costs

1.7





4.8




Restaurant closure charges

0.2



2.8



4.0



7.3


Property damages, net of (insurance recoveries)

0.1



0.3



(0.5)



5.4


Restaurant impairment charges





1.0



9.2


Accelerated depreciation



0.5



1.0



1.5


Cyber security incident charges





0.4




Lease guarantee charges



0.5





1.9


Other

0.1



(0.4)



1.1



0.3


Total

$

(3.5)



$

2.7



$

(12.4)



$

25.2




(3)

Foreign currency translation adjustment included within Comprehensive income in the Consolidated Statements of Comprehensive Income represents the unrealized impact of translating the financial statements of the Canadian restaurants and the Mexican joint venture (prior to divestiture in the second quarter of fiscal 2018) from their respective functional currencies to U.S. dollars. This amount is not included in Net income and would only be realized upon disposition of the businesses.

REVENUE RECOGNITION UPDATE

Effective in the first quarter of fiscal 2019, we adopted ASC 606 and did not elect to restate the prior year financial statements to reflect the application of the standard. The primary impact of the adoption is the change in presentation of advertising fees received from franchisees and the timing of recognition for franchise related revenues and gift card breakage. Under ASC 606, advertising fees are now presented on a gross basis as a component of Franchise and other revenues. Under the previous revenue accounting guidance ("Legacy GAAP"), the advertising fees were recorded as a reduction to advertising expenses within Restaurant expenses in the Consolidated Statements of Comprehensive Income. The recognition timing change for franchise related fees and gift card breakage, both recorded in Franchise and other revenues, did not have a significant impact to our results of operations during the third quarter of fiscal 2019.

The following table presents a comparative view of the thirteen and thirty-nine week period ended March 27, 2019 results prepared in accordance with ASC 606 versus Legacy GAAP.


Thirteen Week Period Ended


Thirty-Nine Week Period Ended


March 27, 2019


March 27, 2019


ASC 606
Amounts


Adjustments


Legacy
GAAP
Amounts


ASC 606
Amounts


Adjustments


Legacy
GAAP
Amounts

Revenues












Company sales

$

811.6



$



$

811.6



$

2,301.4



$



$

2,301.4


Franchise and other revenues

27.7



(6.9)



20.8



82.4



(17.7)



64.7


Total revenues

839.3



(6.9)



832.4



2,383.8



(17.7)



2,366.1


Operating costs and expenses












Company restaurants (excluding depreciation and amortization)












Cost of sales

216.7





216.7



609.5





609.5


Restaurant labor

274.0





274.0



791.1





791.1


Restaurant expenses

204.7



(5.5)



199.2



609.4



(15.8)



593.6


Company restaurant expenses

695.4



(5.5)



689.9



2,010.0



(15.8)



1,994.2


Depreciation and amortization

36.4





36.4



109.5





109.5


General and administrative

40.8





40.8



110.0





110.0


Other (gains) and charges

(3.5)





(3.5)



(12.4)





(12.4)


Total operating costs and expenses

769.1



(5.5)



763.6



2,217.1



(15.8)



2,201.3


Operating income

70.2



(1.4)



68.8



166.7



(1.9)



164.8


Operating income as a percent of Total revenue

8.4

%


(0.1)

%


8.3

%


7.0

%


0.0

%


7.0

%













Interest expense

15.3





15.3



46.3





46.3


Other (income), net

(0.6)





(0.6)



(2.2)





(2.2)


Income before provision for income taxes

55.5



(1.4)



54.1



122.6



(1.9)



120.7


Provision for income taxes

5.7



(0.3)



5.4



14.4



(0.5)



13.9


Net income

$

49.8



$

(1.1)



$

48.7



$

108.2



$

(1.4)



$

106.8














Basic net income per share

$

1.33



$

(0.03)



$

1.30



$

2.80



$

(0.03)



$

2.77


Diluted net income per share

$

1.31



$

(0.03)



$

1.28



$

2.75



$

(0.03)



$

2.72



 

BRINKER INTERNATIONAL, INC.

Condensed Consolidated Balance Sheets

(In millions)



(Unaudited)




March 27,
2019


June 27,
2018

ASSETS




Current assets

$

168.6



$

156.3


Net property and equipment (1)

758.6



938.9


Deferred income taxes, net (1)

119.8



33.6


Total other assets

217.1



218.5


Total assets

$

1,264.1



$

1,347.3


LIABILITIES AND SHAREHOLDERS' DEFICIT




Current installments of long-term debt

$

7.9



$

7.1


Other current liabilities (1)

445.6



427.2


Long-term debt, less current installments

1,219.3



1,499.6


Deferred gain on sale leaseback transactions (1)

250.7




Other liabilities

154.8



131.7


Total shareholders' deficit

(814.2)



(718.3)


Total liabilities and shareholders' deficit

$

1,264.1



$

1,347.3




(1)

We executed sale leaseback transactions during the thirty-nine week period ended March 27, 2019 for gross consideration of $477.4 million, and removed the related Net property and equipment totaling $178.6 million from our Consolidated Balance Sheets, resulting in a net gain. Of the gain, as of March 27, 2019, $269.4 million remains deferred and is included within Other current liabilities and Deferred gain on sale leaseback transactions. The total gain is immediately taxable, resulting in $76.0 million of tax on the gain, of which $75.0 million was paid during the thirty-nine week period ended March 27, 2019.




Of the 997 company-owned restaurants locations, at March 27, 2019, we continue to own property for 47 restaurant locations. The related book value of the land totaled $37.4 million and the net book value of buildings totaled $22.3 million for these locations.

 

BRINKER INTERNATIONAL, INC.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)



Thirty-Nine Week Periods Ended


March 27, 2019


March 28, 2018

Cash flows from operating activities




Net income

$

108.2



$

82.1


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




Depreciation and amortization

109.5



113.7


Stock-based compensation

13.0



11.0


Restructure charges and other impairments

14.4



16.1


Net (gain) loss on disposal of assets

(27.6)



1.4


Changes in assets and liabilities

(66.9)



13.4


Net cash provided by operating activities

150.6



237.7


Cash flows from investing activities




Payments for property and equipment

(128.0)



(69.5)


Payments for franchise restaurant acquisitions

(1.3)




Proceeds from sale of assets

1.4



14.8


Proceeds from note receivable

2.0



1.2


Insurance recoveries

1.4



1.7


Proceeds from sale leaseback transactions, net of related expenses

468.8




Net cash provided by (used in) investing activities

344.3



(51.8)


Cash flows from financing activities




Borrowings on revolving credit facility

626.0



524.0


Payments on revolving credit facility

(903.0)



(484.0)


Purchases of treasury stock

(167.7)



(162.0)


Payments of dividends

(46.0)



(53.1)


Payments on long-term debt

(5.7)



(7.8)


Proceeds from issuances of treasury stock

2.8



1.3


Net cash used in financing activities

(493.6)



(181.6)


Net change in cash and cash equivalents

1.3



4.3


Cash and cash equivalents at beginning of period

10.9



9.1


Cash and cash equivalents at end of period

$

12.2



$

13.4


 

BRINKER INTERNATIONAL, INC.

Restaurant Summary



Fiscal 2019


March 27, 2019


Third Quarter
Openings


YTD Openings


Full Year
Projected
Openings


Total Restaurants

New Openings








Company-owned restaurants








Chili's domestic

2



2



2-4



940


Chili's international







5


Maggiano's







52


Total company-owned

2



2



2-4



997










Franchise restaurants








Chili's domestic

1



4



4-5



308


Chili's international

4



14



21-24



370


Maggiano's



1



1



1


Total franchise

5



19



26-30



679










Chili's domestic

3



6



6-9



1,248


Chili's international

4



14



21-24



375


Maggiano's



1



1



53


Grand total

7



21



28-34



1,676










Relocation Openings








Chili's domestic company-owned relocations

2



5



5




 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/brinker-international-reports-third-quarter-results-300840382.html

SOURCE Brinker International, Inc.