UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| | | | | | | | | | | |
(Mark One) | |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended SeptemberJune 25, 20222023 |
or |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from ______ to ______ |
Commission File Number: 001-35625
BLOOMIN’ BRANDS, INC.
(Exact name of registrant as specified in its charter)
| | | | | | | | |
Delaware | | 20-8023465 |
(State or other jurisdiction of incorporation or organization) | | (IRS Employer Identification No.) |
2202 North West Shore Boulevard, Suite 500, Tampa, FL 33607
(Address of principal executive offices) (Zip Code)
(813) 282-1225
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | | | | |
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Common Stock | $0.01 par value | | BLMN | | The Nasdaq Stock Market LLC (Nasdaq Global Select Market) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐
Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of OctoberJuly 27, 2022, 87,793,6442023, 87,097,283 shares of common stock of the registrant were outstanding.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
For the Quarterly Period Ended SeptemberJune 25, 20222023
(Unaudited)
TABLE OF CONTENTS
| | | | | | | | |
| | Page No. |
| | |
Item 1. | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Item 2. | | |
| | |
Item 3. | | |
| | |
Item 4. | | |
| | |
| | |
Item 1. | | |
| | |
Item 1A. | | |
| | |
Item 2. | | |
| | |
| | |
| | |
Item 6. | | |
| | |
| | |
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA, UNAUDITED)DATA)
| | | | | | | | | | | | | JUNE 25, 2023 | | DECEMBER 25, 2022 |
| | SEPTEMBER 25, 2022 | | DECEMBER 26, 2021 | | (UNAUDITED) | |
ASSETS | ASSETS | | | | ASSETS | | | |
Current assets | Current assets | | | | Current assets | | | |
Cash and cash equivalents | Cash and cash equivalents | $ | 90,678 | | | $ | 87,585 | | Cash and cash equivalents | $ | 88,794 | | | $ | 84,735 | |
Restricted cash and cash equivalents | 143 | | | 1,472 | | |
| Inventories | Inventories | 83,250 | | | 79,112 | | Inventories | 62,327 | | | 78,124 | |
| Other current assets, net | Other current assets, net | 101,639 | | | 184,623 | | Other current assets, net | 96,770 | | | 183,718 | |
Total current assets | Total current assets | 275,710 | | | 352,792 | | Total current assets | 247,891 | | | 346,577 | |
| Property, fixtures and equipment, net | Property, fixtures and equipment, net | 875,567 | | | 842,012 | | Property, fixtures and equipment, net | 975,986 | | | 914,142 | |
Operating lease right-of-use assets | Operating lease right-of-use assets | 1,115,004 | | | 1,130,873 | | Operating lease right-of-use assets | 1,089,218 | | | 1,103,083 | |
Goodwill | Goodwill | 273,100 | | | 268,444 | | Goodwill | 274,629 | | | 273,032 | |
Intangible assets, net | Intangible assets, net | 449,975 | | | 453,412 | | Intangible assets, net | 445,630 | | | 448,326 | |
Deferred income tax assets, net | Deferred income tax assets, net | 158,883 | | | 168,068 | | Deferred income tax assets, net | 152,387 | | | 153,118 | |
Other assets, net | Other assets, net | 70,962 | | | 78,670 | | Other assets, net | 87,391 | | | 82,147 | |
Total assets | Total assets | $ | 3,219,201 | | | $ | 3,294,271 | | Total assets | $ | 3,273,132 | | | $ | 3,320,425 | |
| | LIABILITIES AND STOCKHOLDERS’ EQUITY | LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
Current liabilities | Current liabilities | | | | Current liabilities | | | |
Accounts payable | Accounts payable | $ | 187,825 | | | $ | 167,978 | | Accounts payable | $ | 202,207 | | | $ | 183,715 | |
Current operating lease liabilities | | Current operating lease liabilities | 185,362 | | | 183,510 | |
Accrued and other current liabilities | Accrued and other current liabilities | 430,185 | | | 406,894 | | Accrued and other current liabilities | 211,481 | | | 217,427 | |
Unearned revenue | Unearned revenue | 291,831 | | | 398,795 | | Unearned revenue | 312,556 | | | 394,215 | |
| Current portion of long-term debt | 1,481 | | | 10,958 | | |
| Total current liabilities | Total current liabilities | 911,322 | | | 984,625 | | Total current liabilities | 911,606 | | | 978,867 | |
| Non-current operating lease liabilities | Non-current operating lease liabilities | 1,160,657 | | | 1,179,447 | | Non-current operating lease liabilities | 1,132,015 | | | 1,148,607 | |
| Long-term debt, net | Long-term debt, net | 820,225 | | | 782,107 | | Long-term debt, net | 763,998 | | | 828,507 | |
Other long-term liabilities, net | Other long-term liabilities, net | 86,852 | | | 125,242 | | Other long-term liabilities, net | 93,645 | | | 90,535 | |
Total liabilities | Total liabilities | 2,979,056 | | | 3,071,421 | | Total liabilities | 2,901,264 | | | 3,046,516 | |
Commitments and contingencies (Note 15) | | | | |
Commitments and contingencies (Note 13) | | Commitments and contingencies (Note 13) | | | |
| Stockholders’ equity | Stockholders’ equity | | Stockholders’ equity | |
Bloomin’ Brands stockholders’ equity | Bloomin’ Brands stockholders’ equity | | Bloomin’ Brands stockholders’ equity | |
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of September 25, 2022 and December 26, 2021 | — | | | — | | |
Common stock, $0.01 par value, 475,000,000 shares authorized; 88,449,929 and 89,252,823 shares issued and outstanding as of September 25, 2022 and December 26, 2021, respectively | 884 | | | 893 | | |
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of June 25, 2023 and December 25, 2022 | | Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of June 25, 2023 and December 25, 2022 | — | | | — | |
Common stock, $0.01 par value, 475,000,000 shares authorized; 87,339,455 and 87,696,200 shares issued and outstanding as of June 25, 2023 and December 25, 2022, respectively | | Common stock, $0.01 par value, 475,000,000 shares authorized; 87,339,455 and 87,696,200 shares issued and outstanding as of June 25, 2023 and December 25, 2022, respectively | 873 | | | 877 | |
Additional paid-in capital | Additional paid-in capital | 1,159,722 | | | 1,119,728 | | Additional paid-in capital | 1,132,732 | | | 1,161,912 | |
Accumulated deficit | Accumulated deficit | (735,268) | | | (698,171) | | Accumulated deficit | (582,738) | | | (706,109) | |
Accumulated other comprehensive loss | Accumulated other comprehensive loss | (186,840) | | | (205,989) | | Accumulated other comprehensive loss | (181,943) | | | (185,311) | |
Total Bloomin’ Brands stockholders’ equity | Total Bloomin’ Brands stockholders’ equity | 238,498 | | | 216,461 | | Total Bloomin’ Brands stockholders’ equity | 368,924 | | | 271,369 | |
Noncontrolling interests | Noncontrolling interests | 1,647 | | | 6,389 | | Noncontrolling interests | 2,944 | | | 2,540 | |
Total stockholders’ equity | Total stockholders’ equity | 240,145 | | | 222,850 | | Total stockholders’ equity | 371,868 | | | 273,909 | |
Total liabilities and stockholders’ equity | Total liabilities and stockholders’ equity | $ | 3,219,201 | | | $ | 3,294,271 | | Total liabilities and stockholders’ equity | $ | 3,273,132 | | | $ | 3,320,425 | |
| The accompanying notes are an integral part of these consolidated financial statements. | |
The accompanying notes are an integral part of these unaudited consolidated financial statements. | | The accompanying notes are an integral part of these unaudited consolidated financial statements. |
BLOOMIN’ BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
| | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Revenues | Revenues | | | | | | | | Revenues | | | | | | | |
Restaurant sales | Restaurant sales | $ | 1,040,375 | | | $ | 996,718 | | | $ | 3,272,868 | | | $ | 3,031,396 | | Restaurant sales | $ | 1,137,330 | | | $ | 1,108,918 | | | $ | 2,365,564 | | | $ | 2,232,493 | |
Franchise and other revenues | Franchise and other revenues | 15,388 | | | 13,745 | | | 48,592 | | | 43,906 | | Franchise and other revenues | 15,364 | | | 16,244 | | | 31,876 | | | 33,204 | |
Total revenues | Total revenues | 1,055,763 | | | 1,010,463 | | | 3,321,460 | | | 3,075,302 | | Total revenues | 1,152,694 | | | 1,125,162 | | | 2,397,440 | | | 2,265,697 | |
Costs and expenses | Costs and expenses | | | | | | | | Costs and expenses | | | | | | | |
Food and beverage costs | 332,939 | | | 304,300 | | | 1,056,768 | | | 908,272 | | |
Food and beverage | | Food and beverage | 351,226 | | | 364,459 | | | 735,440 | | | 723,829 | |
Labor and other related | Labor and other related | 303,244 | | | 290,246 | | | 924,514 | | | 859,883 | | Labor and other related | 325,934 | | | 308,759 | | | 667,476 | | | 621,270 | |
Other restaurant operating | Other restaurant operating | 267,944 | | | 299,788 | | | 790,583 | | | 762,531 | | Other restaurant operating | 273,338 | | | 263,529 | | | 556,265 | | | 522,639 | |
Depreciation and amortization | Depreciation and amortization | 42,171 | | | 40,827 | | | 125,203 | | | 122,592 | | Depreciation and amortization | 47,565 | | | 41,257 | | | 93,867 | | | 83,032 | |
General and administrative | General and administrative | 56,089 | | | 58,880 | | | 174,009 | | | 182,590 | | General and administrative | 63,358 | | | 59,246 | | | 129,162 | | | 117,920 | |
Provision for impaired assets and restaurant closings | Provision for impaired assets and restaurant closings | 2,067 | | | 1,585 | | | 4,099 | | | 8,962 | | Provision for impaired assets and restaurant closings | 1,827 | | | 193 | | | 5,151 | | | 2,032 | |
Total costs and expenses | Total costs and expenses | 1,004,454 | | | 995,626 | | | 3,075,176 | | | 2,844,830 | | Total costs and expenses | 1,063,248 | | | 1,037,443 | | | 2,187,361 | | | 2,070,722 | |
Income from operations | Income from operations | 51,309 | | | 14,837 | | | 246,284 | | | 230,472 | | Income from operations | 89,446 | | | 87,719 | | | 210,079 | | | 194,975 | |
Loss on extinguishment and modification of debt | Loss on extinguishment and modification of debt | — | | | — | | | (107,630) | | | (2,073) | | Loss on extinguishment and modification of debt | — | | | (107,630) | | | — | | | (107,630) | |
Loss on fair value adjustment of derivatives, net | Loss on fair value adjustment of derivatives, net | — | | | — | | | (17,685) | | | — | | Loss on fair value adjustment of derivatives, net | — | | | (17,685) | | | — | | | (17,685) | |
Other income, net | — | | | 5 | | | — | | | 26 | | |
| Interest expense, net | Interest expense, net | (12,696) | | | (14,245) | | | (38,877) | | | (43,863) | | Interest expense, net | (12,961) | | | (12,548) | | | (25,405) | | | (26,181) | |
Income before provision (benefit) for income taxes | 38,613 | | | 597 | | | 82,092 | | | 184,562 | | |
Provision (benefit) for income taxes | 5,563 | | | (4,454) | | | 33,028 | | | 24,827 | | |
Net income | 33,050 | | | 5,051 | | | 49,064 | | | 159,735 | | |
Income (loss) before provision for income taxes | | Income (loss) before provision for income taxes | 76,485 | | | (50,144) | | | 184,674 | | | 43,479 | |
Provision for income taxes | | Provision for income taxes | 6,483 | | | 11,536 | | | 21,244 | | | 27,465 | |
Net income (loss) | | Net income (loss) | 70,002 | | | (61,680) | | | 163,430 | | | 16,014 | |
Less: net income attributable to noncontrolling interests | Less: net income attributable to noncontrolling interests | 1,064 | | | 1,602 | | | 5,202 | | | 4,879 | | Less: net income attributable to noncontrolling interests | 1,725 | | | 1,955 | | | 3,842 | | | 4,138 | |
Net income attributable to Bloomin’ Brands | $ | 31,986 | | | $ | 3,449 | | | $ | 43,862 | | | $ | 154,856 | | |
Net income (loss) attributable to Bloomin’ Brands | | Net income (loss) attributable to Bloomin’ Brands | $ | 68,277 | | | $ | (63,635) | | | $ | 159,588 | | | $ | 11,876 | |
| | Net income | $ | 33,050 | | | $ | 5,051 | | | $ | 49,064 | | | $ | 159,735 | | |
Other comprehensive income: | | |
Net income (loss) | | Net income (loss) | $ | 70,002 | | | $ | (61,680) | | | $ | 163,430 | | | $ | 16,014 | |
Other comprehensive income (loss): | | Other comprehensive income (loss): | |
Foreign currency translation adjustment | Foreign currency translation adjustment | (13,041) | | | 1,673 | | | 10,182 | | | 5,113 | | Foreign currency translation adjustment | 4,502 | | | 11,940 | | | 3,368 | | | 23,223 | |
| Unrealized (loss) gain on derivatives, net of tax | — | | | (153) | | | 573 | | | (323) | | |
Reclassification of adjustments for loss on derivatives included in Net income, net of tax | — | | | 1,519 | | | 954 | | | 6,036 | | |
Impact of terminated interest rate swaps included in Net income, net of tax | 2,255 | | | 1,479 | | | 7,440 | | | 2,950 | | |
Comprehensive income | 22,264 | | | 9,569 | | | 68,213 | | | 173,511 | | |
Unrealized gain on derivatives, net of tax | | Unrealized gain on derivatives, net of tax | — | | | — | | | — | | | 573 | |
Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax | | Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax | — | | | 273 | | | — | | | 954 | |
Impact of terminated interest rate swaps included in Net income (loss), net of tax | | Impact of terminated interest rate swaps included in Net income (loss), net of tax | — | | | 2,164 | | | — | | | 5,185 | |
Comprehensive income (loss) | | Comprehensive income (loss) | 74,504 | | | (47,303) | | | 166,798 | | | 45,949 | |
Less: comprehensive income attributable to noncontrolling interests | Less: comprehensive income attributable to noncontrolling interests | 1,064 | | | 1,602 | | | 5,202 | | | 4,879 | | Less: comprehensive income attributable to noncontrolling interests | 1,725 | | | 1,955 | | | 3,842 | | | 4,138 | |
Comprehensive income attributable to Bloomin’ Brands | $ | 21,200 | | | $ | 7,967 | | | $ | 63,011 | | | $ | 168,632 | | |
Comprehensive income (loss) attributable to Bloomin’ Brands | | Comprehensive income (loss) attributable to Bloomin’ Brands | $ | 72,779 | | | $ | (49,258) | | | $ | 162,956 | | | $ | 41,811 | |
| Earnings per share: | | |
Earnings (loss) per share: | | Earnings (loss) per share: | |
Basic | Basic | $ | 0.36 | | | $ | 0.04 | | | $ | 0.49 | | | $ | 1.74 | | Basic | $ | 0.77 | | | $ | (0.72) | | | $ | 1.80 | | | $ | 0.13 | |
Diluted | Diluted | $ | 0.34 | | | $ | 0.03 | | | $ | 0.44 | | | $ | 1.42 | | Diluted | $ | 0.70 | | | $ | (0.72) | | | $ | 1.63 | | | $ | 0.12 | |
Weighted average common shares outstanding: | Weighted average common shares outstanding: | | | | | | | | Weighted average common shares outstanding: | | | | | | | |
Basic | Basic | 89,192 | | | 89,229 | | | 89,149 | | | 88,890 | | Basic | 88,559 | | | 88,898 | | | 88,838 | | | 89,127 | |
Diluted | Diluted | 94,736 | | | 107,783 | | | 99,609 | | | 109,410 | | Diluted | 97,401 | | | 88,898 | | | 97,706 | | | 102,045 | |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
BLOOMIN’ BRANDS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| BLOOMIN’ BRANDS, INC. | | | | |
| COMMON STOCK | | ADDITIONAL PAID-IN CAPITAL | | ACCUM- ULATED DEFICIT | | ACCUMULATED OTHER COMPREHENSIVE LOSS | | NON-CONTROLLING INTERESTS | | TOTAL |
| SHARES | | AMOUNT | | | | | |
Balance, June 26, 2022 | 90,151 | | | $ | 902 | | | $ | 1,169,697 | | | $ | (733,723) | | | $ | (176,054) | | | $ | 1,919 | | | $ | 262,741 | |
| | | | | | | | | | | | | |
Net income | — | | | — | | | — | | | 31,986 | | | — | | | 1,064 | | | 33,050 | |
Other comprehensive loss, net of tax | — | | | — | | | — | | | — | | | (10,786) | | | — | | | (10,786) | |
Cash dividends declared, $0.14 per common share | — | | | — | | | (12,475) | | | — | | | — | | | — | | | (12,475) | |
Repurchase and retirement of common stock | (1,746) | | | (18) | | | — | | | (33,531) | | | — | | | — | | | (33,549) | |
Stock-based compensation | — | | | — | | | 2,013 | | | — | | | — | | | — | | | 2,013 | |
| | | | | | | | | | | | | |
Common stock issued under stock plans (1) | 45 | | | — | | | 487 | | | — | | | — | | | — | | | 487 | |
| | | | | | | | | | | | | |
Distributions to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | (1,477) | | | (1,477) | |
Contributions from noncontrolling interests | — | | | — | | | — | | | — | | | — | | | 141 | | | 141 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Balance, September 25, 2022 | 88,450 | | | $ | 884 | | | $ | 1,159,722 | | | $ | (735,268) | | | $ | (186,840) | | | $ | 1,647 | | | $ | 240,145 | |
| | | | | | | | | | | | | |
Balance, December 26, 2021 | 89,253 | | | $ | 893 | | | $ | 1,119,728 | | | $ | (698,171) | | | $ | (205,989) | | | $ | 6,389 | | | $ | 222,850 | |
| | | | | | | | | | | | | |
Net income | — | | | — | | | — | | | 43,862 | | | — | | | 5,202 | | | 49,064 | |
Other comprehensive income, net of tax | — | | | — | | | — | | | — | | | 19,149 | | | — | | | 19,149 | |
Cash dividends declared, $0.42 per common share | — | | | — | | | (37,452) | | | — | | | — | | | — | | | (37,452) | |
Repurchase and retirement of common stock | (4,058) | | | (41) | | | — | | | (80,959) | | | — | | | — | | | (81,000) | |
Stock-based compensation | — | | | — | | | 11,815 | | | — | | | — | | | — | | | 11,815 | |
| | | | | | | | | | | | | |
Common stock issued under stock plans (1) | 942 | | | 9 | | | 2,485 | | | — | | | — | | | — | | | 2,494 | |
Purchase of noncontrolling interests, net of tax of $254 | — | | | — | | | (735) | | | — | | | — | | | (3,915) | | | (4,650) | |
Distributions to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | (6,631) | | | (6,631) | |
Contributions from noncontrolling interests | — | | | — | | | — | | | — | | | — | | | 602 | | | 602 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Retirement of convertible senior note hedges | — | | | — | | | 112,956 | | | — | | | — | | | — | | | 112,956 | |
Retirement of warrants | — | | | — | | | (97,617) | | | — | | | — | | | — | | | (97,617) | |
Issuance of common stock from repurchase of convertible senior notes | 2,313 | | | 23 | | | 48,542 | | | — | | | — | | | — | | | 48,565 | |
Balance, September 25, 2022 | 88,450 | | | $ | 884 | | | $ | 1,159,722 | | | $ | (735,268) | | | $ | (186,840) | | | $ | 1,647 | | | $ | 240,145 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| BLOOMIN’ BRANDS, INC. | | | | |
| COMMON STOCK | | ADDITIONAL PAID-IN CAPITAL | | ACCUM- ULATED DEFICIT | | ACCUMULATED OTHER COMPREHENSIVE LOSS | | NON-CONTROLLING INTERESTS | | TOTAL |
| SHARES | | AMOUNT | | | | | |
Balance, March 26, 2023 | 87,465 | | | $ | 875 | | | $ | 1,141,017 | | | $ | (635,451) | | | $ | (186,445) | | | $ | 2,845 | | | $ | 322,841 | |
| | | | | | | | | | | | | |
Net income | — | | | — | | | — | | | 68,277 | | | — | | | 1,725 | | | 70,002 | |
Other comprehensive income | — | | | — | | | — | | | — | | | 4,502 | | | — | | | 4,502 | |
Cash dividends declared, $0.24 per common share | — | | | — | | | (20,990) | | | — | | | — | | | — | | | (20,990) | |
Repurchase and retirement of common stock, including excise tax of $31 | (619) | | | (6) | | | — | | | (15,564) | | | — | | | — | | | (15,570) | |
Stock-based compensation | — | | | — | | | 5,138 | | | — | | | — | | | — | | | 5,138 | |
| | | | | | | | | | | | | |
Common stock issued under stock plans (1) | 493 | | | 4 | | | 7,567 | | | — | | | — | | | — | | | 7,571 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Distributions to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | (2,085) | | | (2,085) | |
Contributions from noncontrolling interests | — | | | — | | | — | | | — | | | — | | | 459 | | | 459 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Balance, June 25, 2023 | 87,339 | | | $ | 873 | | | $ | 1,132,732 | | | $ | (582,738) | | | $ | (181,943) | | | $ | 2,944 | | | $ | 371,868 | |
| | | | | | | | | | | | | |
Balance, December 25, 2022 | 87,696 | | | $ | 877 | | | $ | 1,161,912 | | | $ | (706,109) | | | $ | (185,311) | | | $ | 2,540 | | | $ | 273,909 | |
| | | | | | | | | | | | | |
Net income | — | | | — | | | — | | | 159,588 | | | — | | | 3,842 | | | 163,430 | |
Other comprehensive income | — | | | — | | | — | | | — | | | 3,368 | | | — | | | 3,368 | |
Cash dividends declared, $0.48 per common share | — | | | — | | | (42,004) | | | — | | | — | | | — | | | (42,004) | |
Repurchase and retirement of common stock, including excise tax of $48 | (1,482) | | | (15) | | | — | | | (36,217) | | | — | | | — | | | (36,232) | |
Stock-based compensation | — | | | — | | | 8,042 | | | — | | | — | | | — | | | 8,042 | |
| | | | | | | | | | | | | |
Common stock issued under stock plans (1) | 1,125 | | | 11 | | | 4,782 | | | — | | | — | | | — | | | 4,793 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Distributions to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | (4,640) | | | (4,640) | |
Contributions from noncontrolling interests | — | | | — | | | — | | | — | | | — | | | 1,202 | | | 1,202 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Balance, June 25, 2023 | 87,339 | | | $ | 873 | | | $ | 1,132,732 | | | $ | (582,738) | | | $ | (181,943) | | | $ | 2,944 | | | $ | 371,868 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | (CONTINUED...) |
BLOOMIN’ BRANDS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
| | | BLOOMIN’ BRANDS, INC. | | | BLOOMIN’ BRANDS, INC. | |
| | COMMON STOCK | | ADDITIONAL PAID-IN CAPITAL | | ACCUM- ULATED DEFICIT | | ACCUMULATED OTHER COMPREHENSIVE LOSS | | NON-CONTROLLING INTERESTS | | TOTAL | | COMMON STOCK | | ADDITIONAL PAID-IN CAPITAL | | ACCUM- ULATED DEFICIT | | ACCUMULATED OTHER COMPREHENSIVE LOSS | | NON-CONTROLLING INTERESTS | | TOTAL |
| | SHARES | | AMOUNT | | | SHARES | | AMOUNT | |
Balance, June 27, 2021 | 89,211 | | | $ | 892 | | | $ | 1,109,904 | | | $ | (762,319) | | | $ | (202,188) | | | $ | 6,618 | | | $ | 152,907 | | |
Net income | — | | | — | | | — | | | 3,449 | | | — | | | 1,602 | | | 5,051 | | |
Balance, March 27, 2022 | | Balance, March 27, 2022 | 89,185 | | | $ | 892 | | | $ | 1,115,458 | | | $ | (634,356) | | | $ | (190,431) | | | $ | 1,694 | | | $ | 293,257 | |
| Net (loss) income | | Net (loss) income | — | | | — | | | — | | | (63,635) | | | — | | | 1,955 | | | (61,680) | |
Other comprehensive income, net of tax | Other comprehensive income, net of tax | — | | | — | | | — | | | — | | | 4,518 | | | — | | | 4,518 | | Other comprehensive income, net of tax | — | | | — | | | — | | | — | | | 14,377 | | | — | | | 14,377 | |
| Cash dividends declared, $0.14 per common share | | Cash dividends declared, $0.14 per common share | — | | | — | | | (12,418) | | | — | | | — | | | — | | | (12,418) | |
Repurchase and retirement of common stock | | Repurchase and retirement of common stock | (1,761) | | | (17) | | | — | | | (35,732) | | | — | | | — | | | (35,749) | |
Stock-based compensation | Stock-based compensation | — | | | — | | | 5,593 | | | — | | | — | | | — | | | 5,593 | | Stock-based compensation | — | | | — | | | 4,959 | | | — | | | — | | | — | | | 4,959 | |
| Common stock issued under stock plans (1) | Common stock issued under stock plans (1) | 37 | | | — | | | (42) | | | — | | | — | | | — | | | (42) | | Common stock issued under stock plans (1) | 414 | | | 4 | | | 1,118 | | | — | | | — | | | — | | | 1,122 | |
| Purchase of noncontrolling interests | — | | | — | | | 9 | | | — | | | — | | | (12) | | | (3) | | |
Purchase of noncontrolling interests, net of tax of $1,142 | | Purchase of noncontrolling interests, net of tax of $1,142 | — | | | — | | | (3,301) | | | — | | | — | | | 539 | | | (2,762) | |
| Distributions to noncontrolling interests | Distributions to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | (2,062) | | | (2,062) | | Distributions to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | (2,513) | | | (2,513) | |
Contributions from noncontrolling interests | Contributions from noncontrolling interests | — | | | — | | | — | | | — | | | — | | | 374 | | | 374 | | Contributions from noncontrolling interests | — | | | — | | | — | | | — | | | — | | | 244 | | | 244 | |
Retirement of convertible senior note hedges | | Retirement of convertible senior note hedges | — | | | — | | | 112,956 | | | — | | | — | | | — | | | 112,956 | |
Retirement of warrants | | Retirement of warrants | — | | | — | | | (97,617) | | | — | | | — | | | — | | | (97,617) | |
Issuance of common stock from repurchase of convertible senior notes | | Issuance of common stock from repurchase of convertible senior notes | 2,313 | | | 23 | | | 48,542 | | | — | | | — | | | — | | | 48,565 | |
| Balance, June 26, 2022 | | Balance, June 26, 2022 | 90,151 | | | $ | 902 | | | $ | 1,169,697 | | | $ | (733,723) | | | $ | (176,054) | | | $ | 1,919 | | | $ | 262,741 | |
| Balance, September 26, 2021 | 89,248 | | | $ | 892 | | | $ | 1,115,464 | | | $ | (758,870) | | | $ | (197,670) | | | $ | 6,520 | | | $ | 166,336 | | |
Balance, December 26, 2021 | | Balance, December 26, 2021 | 89,253 | | | $ | 893 | | | $ | 1,119,728 | | | $ | (698,171) | | | $ | (205,989) | | | $ | 6,389 | | | $ | 222,850 | |
| Balance, December 27, 2020 | 87,856 | | | $ | 879 | | | $ | 1,132,808 | | | $ | (918,096) | | | $ | (211,446) | | | $ | 6,812 | | | $ | 10,957 | | |
Cumulative-effect from a change in accounting principle, net of tax | — | | | — | | | (47,323) | | | 4,370 | | | — | | | — | | | (42,953) | | |
Net income | Net income | — | | | — | | | — | | | 154,856 | | | — | | | 4,879 | | | 159,735 | | Net income | — | | | — | | | — | | | 11,876 | | | — | | | 4,138 | | | 16,014 | |
Other comprehensive income, net of tax | Other comprehensive income, net of tax | — | | | — | | | — | | | — | | | 13,776 | | | — | | | 13,776 | | Other comprehensive income, net of tax | — | | | — | | | — | | | — | | | 29,935 | | | — | | | 29,935 | |
| Cash dividends declared, $0.28 per common share | | Cash dividends declared, $0.28 per common share | — | | | — | | | (24,977) | | | — | | | — | | | — | | | (24,977) | |
Repurchase and retirement of common stock | | Repurchase and retirement of common stock | (2,312) | | | (23) | | | — | | | (47,428) | | | — | | | — | | | (47,451) | |
Stock-based compensation | Stock-based compensation | — | | | 20,100 | | | — | | | — | | | — | | | 20,100 | | Stock-based compensation | — | | | — | | | 9,802 | | | — | | | — | | | — | | | 9,802 | |
| Common stock issued under stock plans (1) | Common stock issued under stock plans (1) | 1,392 | | | 13 | | | 9,870 | | | — | | | — | | | — | | | 9,883 | | Common stock issued under stock plans (1) | 897 | | | 9 | | | 1,998 | | | — | | | — | | | — | | | 2,007 | |
| Purchase of noncontrolling interests | — | | | — | | | 9 | | | — | | | — | | | (12) | | | (3) | | |
Purchase of noncontrolling interests, net of tax of $254 | | Purchase of noncontrolling interests, net of tax of $254 | — | | | — | | | (735) | | | — | | | — | | | (3,915) | | | (4,650) | |
| Distributions to noncontrolling interests | Distributions to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | (6,203) | | | (6,203) | | Distributions to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | (5,154) | | | (5,154) | |
Contributions from noncontrolling interests | Contributions from noncontrolling interests | — | | | — | | | — | | | — | | | — | | | 1,044 | | | 1,044 | | Contributions from noncontrolling interests | — | | | — | | | — | | | — | | | — | | | 461 | | | 461 | |
Retirement of convertible senior note hedges | | Retirement of convertible senior note hedges | — | | | — | | | 112,956 | | | — | | | — | | | — | | | 112,956 | |
Retirement of warrants | | Retirement of warrants | — | | | — | | | (97,617) | | | — | | | — | | | — | | | (97,617) | |
Issuance of common stock from repurchase of convertible senior notes | | Issuance of common stock from repurchase of convertible senior notes | 2,313 | | | 23 | | | 48,542 | | | — | | | — | | | — | | | 48,565 | |
| Balance, September 26, 2021 | 89,248 | | | $ | 892 | | | $ | 1,115,464 | | | $ | (758,870) | | | $ | (197,670) | | | $ | 6,520 | | | $ | 166,336 | | |
Balance, June 26, 2022 | | Balance, June 26, 2022 | 90,151 | | | $ | 902 | | | $ | 1,169,697 | | | $ | (733,723) | | | $ | (176,054) | | | $ | 1,919 | | | $ | 262,741 | |
|
________________
(1)Net of forfeitures and shares withheld for employee taxes.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
BLOOMIN’ BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS, UNAUDITED)
` | | | | | | | | | | | |
| THIRTY-NINE WEEKS ENDED |
| SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
| | | |
Cash flows provided by operating activities: | | | |
Net income | $ | 49,064 | | | $ | 159,735 | |
Adjustments to reconcile Net income to cash provided by operating activities: | | | |
Depreciation and amortization | 125,203 | | | 122,592 | |
Amortization of debt discounts and issuance costs | 2,779 | | | 3,441 | |
Amortization of deferred gift card sales commissions | 18,213 | | | 19,277 | |
Provision for impaired assets and restaurant closings | 4,099 | | | 8,962 | |
| | | |
Non-cash interest expense from terminated interest rate swaps | 10,014 | | | 3,973 | |
Non-cash operating lease costs | 62,539 | | | 57,791 | |
| | | |
| | | |
Stock-based and other non-cash compensation expense | 11,815 | | | 20,100 | |
Deferred income tax expense | 6,604 | | | 3,842 | |
| | | |
| | | |
Loss on extinguishment and modification of debt | 107,630 | | | 2,073 | |
| | | |
| | | |
| | | |
Loss on fair value adjustment of derivatives, net | 17,685 | | | — | |
Other, net | 5,381 | | | (946) | |
Change in assets and liabilities | (128,447) | | | (96,594) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Net cash provided by operating activities | 292,579 | | | 304,246 | |
Cash flows used in investing activities: | | | |
Proceeds from disposal of property, fixtures and equipment | 207 | | | 7,052 | |
Proceeds received on life insurance policies | 14,598 | | | 9,270 | |
| | | |
| | | |
Capital expenditures | (137,260) | | | (85,339) | |
Other investments, net | 1,000 | | | (68) | |
Net cash used in investing activities | $ | (121,455) | | | $ | (69,085) | |
| | | |
| (CONTINUED...) |
| | | |
BLOOMIN’ BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS, UNAUDITED)
| | | THIRTY-NINE WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
| | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | JUNE 25, 2023 | | JUNE 26, 2022 |
| Cash flows provided by operating activities: | | Cash flows provided by operating activities: | | | |
Net income | | Net income | $ | 163,430 | | | $ | 16,014 | |
Adjustments to reconcile Net income to cash provided by operating activities: | | Adjustments to reconcile Net income to cash provided by operating activities: | | | |
Depreciation and amortization | | Depreciation and amortization | 93,867 | | | 83,032 | |
Amortization of debt discounts and issuance costs | | Amortization of debt discounts and issuance costs | 1,532 | | | 2,025 | |
Amortization of deferred gift card sales commissions | | Amortization of deferred gift card sales commissions | 13,180 | | | 13,458 | |
Provision for impaired assets and restaurant closings | | Provision for impaired assets and restaurant closings | 5,151 | | | 2,032 | |
| Non-cash interest expense from terminated interest rate swaps | | Non-cash interest expense from terminated interest rate swaps | — | | | 6,980 | |
Non-cash operating lease costs | | Non-cash operating lease costs | 42,884 | | | 41,336 | |
| Stock-based compensation expense | | Stock-based compensation expense | 8,042 | | | 9,802 | |
Deferred income tax (benefit) expense | | Deferred income tax (benefit) expense | (1,164) | | | 8,329 | |
| Loss on extinguishment and modification of debt | | Loss on extinguishment and modification of debt | — | | | 107,630 | |
| Loss on fair value adjustment of derivatives, net | | Loss on fair value adjustment of derivatives, net | — | | | 17,685 | |
Other, net | | Other, net | (3,515) | | | 4,935 | |
Change in assets and liabilities | | Change in assets and liabilities | (36,114) | | | (94,440) | |
| Net cash provided by operating activities | | Net cash provided by operating activities | 287,293 | | | 218,818 | |
Cash flows used in investing activities: | | Cash flows used in investing activities: | | | |
| Capital expenditures | | Capital expenditures | (142,153) | | | (76,901) | |
Other investments, net | | Other investments, net | 1,502 | | | 1,163 | |
Net cash used in investing activities | | Net cash used in investing activities | (140,651) | | | (75,738) | |
| | | Cash flows used in financing activities: | Cash flows used in financing activities: | | Cash flows used in financing activities: | | | |
Proceeds from issuance of long-term debt | $ | — | | | $ | 200,000 | | |
| | Repayments of long-term debt and finance lease obligations | Repayments of long-term debt and finance lease obligations | (196,076) | | | (428,364) | | Repayments of long-term debt and finance lease obligations | (816) | | | (195,733) | |
Proceeds from borrowings on revolving credit facilities | Proceeds from borrowings on revolving credit facilities | 929,500 | | | 378,000 | | Proceeds from borrowings on revolving credit facilities | 448,000 | | | 624,500 | |
Repayments of borrowings on revolving credit facilities | Repayments of borrowings on revolving credit facilities | (589,500) | | | (701,000) | | Repayments of borrowings on revolving credit facilities | (513,000) | | | (304,500) | |
| Financing fees | Financing fees | (1,205) | | | (5,868) | | Financing fees | — | | | (853) | |
Proceeds from issuance of senior notes | — | | | 300,000 | | |
| Issuance costs related to senior notes | — | | | (5,546) | | |
Repurchase of convertible senior notes | (196,919) | | | — | | |
| Principal settlements and repurchase of convertible senior notes | | Principal settlements and repurchase of convertible senior notes | (214) | | | (196,919) | |
Proceeds from retirement of convertible senior note hedges | Proceeds from retirement of convertible senior note hedges | 131,869 | | | — | | Proceeds from retirement of convertible senior note hedges | — | | | 131,869 | |
Payments for retirement of warrants | Payments for retirement of warrants | (114,825) | | | — | | Payments for retirement of warrants | — | | | (114,825) | |
Proceeds from share-based compensation, net | Proceeds from share-based compensation, net | 2,494 | | | 9,883 | | Proceeds from share-based compensation, net | 4,793 | | | 2,007 | |
Distributions to noncontrolling interests | Distributions to noncontrolling interests | (6,631) | | | (6,203) | | Distributions to noncontrolling interests | (4,640) | | | (5,154) | |
Contributions from noncontrolling interests | Contributions from noncontrolling interests | 602 | | | 1,044 | | Contributions from noncontrolling interests | 1,202 | | | 461 | |
Purchase of noncontrolling interests | Purchase of noncontrolling interests | (4,904) | | | (3) | | Purchase of noncontrolling interests | (100) | | | (4,904) | |
Payments for partner equity plan | Payments for partner equity plan | (7,813) | | | (7,135) | | Payments for partner equity plan | — | | | (5,743) | |
Repurchase of common stock | Repurchase of common stock | (79,900) | | | — | | Repurchase of common stock | (36,435) | | | (46,151) | |
| Cash dividends paid on common stock | Cash dividends paid on common stock | (37,452) | | | — | | Cash dividends paid on common stock | (42,004) | | | (24,977) | |
| Net cash used in financing activities | Net cash used in financing activities | (170,760) | | | (265,192) | | Net cash used in financing activities | (143,214) | | | (140,922) | |
Effect of exchange rate changes on cash and cash equivalents | Effect of exchange rate changes on cash and cash equivalents | 1,400 | | | 207 | | Effect of exchange rate changes on cash and cash equivalents | 631 | | | 4,232 | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | 1,764 | | | (29,824) | | |
Net increase in cash, cash equivalents and restricted cash | | Net increase in cash, cash equivalents and restricted cash | 4,059 | | | 6,390 | |
Cash, cash equivalents and restricted cash as of the beginning of the period | Cash, cash equivalents and restricted cash as of the beginning of the period | 89,057 | | | 110,408 | | Cash, cash equivalents and restricted cash as of the beginning of the period | 84,735 | | | 89,057 | |
Cash, cash equivalents and restricted cash as of the end of the period | Cash, cash equivalents and restricted cash as of the end of the period | $ | 90,821 | | | $ | 80,584 | | Cash, cash equivalents and restricted cash as of the end of the period | $ | 88,794 | | | $ | 95,447 | |
Supplemental disclosures of cash flow information: | Supplemental disclosures of cash flow information: | | | | Supplemental disclosures of cash flow information: | | | |
Cash paid for interest | Cash paid for interest | $ | 23,050 | | | $ | 28,787 | | Cash paid for interest | $ | 16,951 | | | $ | 18,862 | |
Cash paid for income taxes, net of refunds | Cash paid for income taxes, net of refunds | $ | 25,354 | | | $ | 23,449 | | Cash paid for income taxes, net of refunds | $ | 15,356 | | | $ | 17,191 | |
Supplemental disclosures of non-cash investing and financing activities: | Supplemental disclosures of non-cash investing and financing activities: | | | | Supplemental disclosures of non-cash investing and financing activities: | | | |
| Leased assets obtained in exchange for new operating lease liabilities | Leased assets obtained in exchange for new operating lease liabilities | $ | 44,556 | | | $ | 38,154 | | Leased assets obtained in exchange for new operating lease liabilities | $ | 30,249 | | | $ | 26,415 | |
Leased assets obtained in exchange for new finance lease liabilities | Leased assets obtained in exchange for new finance lease liabilities | $ | 2,417 | | | $ | 1,229 | | Leased assets obtained in exchange for new finance lease liabilities | $ | 5,367 | | | $ | 2,417 | |
Increase in liabilities from the acquisition of property, fixtures and equipment | Increase in liabilities from the acquisition of property, fixtures and equipment | $ | 14,961 | | | $ | 3,006 | | Increase in liabilities from the acquisition of property, fixtures and equipment | $ | 7,522 | | | $ | 2,545 | |
|
The accompanying notes are an integral part of these unaudited consolidated financial statements.
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Description of the Business and Basis of Presentation
Description of the Business - Bloomin’ Brands (“Bloomin’ Brands” or the “Company”) owns and operates casual, upscale casual and fine dining restaurants. The Company’s restaurant portfolio has four concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. Additional Outback Steakhouse, Carrabba’s Italian Grill and Bonefish Grill restaurants in which the Company has no direct investment are operated under franchise agreements.
Basis of Presentation - The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements. In the opinion of the Company, all adjustments necessary for fair financial statement presentation for the periods presented have been included and are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 26, 2021.25, 2022.
Recently Issued Financial Accounting Standards Not Yet Adopted - In November 2021, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU No. 2021-10”), which requires financial statement footnote disclosure regarding government assistance accounted for by applying a grant or contribution accounting model by analogy. ASU No. 2021-10 is effective for the Company for the fiscal year ending December 25, 2022. Upon adoption of ASU No. 2021-10 during the fourth quarter of 2022, the Company anticipates government assistance financial statement footnote disclosures within the 2022 Form 10-K, primarily in connection with employee retention credits provided under the Coronavirus, Aid, Relief and Economic Security (“CARES”) Act.
Recent accounting guidance not discussed herein is not applicable, did not have or is not expected to have a material impact to the Company.
Reclassifications - The Company reclassified certain items in the accompanying consolidated financial statements for prior periods to be comparable with the classification for the current period, including, but not limited to, finance lease liabilities presented within other liabilities that were formerly presented within long-term debt, the separate presentation of current operating lease liabilities on the face of the Consolidated Balance Sheets and the presentation of certain items within the condensed consolidated statementsCondensed Consolidated Statements of cash flows and certain notes to the consolidated financial statements.Cash Flows. These reclassifications had no effect on previously reported net income.
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
2. Revenue Recognition
The following table includes the categories of revenue included in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | | | | | |
(dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | | | | | |
Revenues | | | | | | | | | | | | | |
Restaurant sales | $ | 1,040,375 | | | $ | 996,718 | | | $ | 3,272,868 | | | $ | 3,031,396 | | | | | | | |
Franchise and other revenues | | | | | | | | | | | | | |
Franchise revenues | 11,826 | | | 12,908 | | | 37,828 | | | 31,918 | | | | | | | |
Other revenues (1) | 3,562 | | | 837 | | | 10,764 | | | 11,988 | | | | | | | |
Total Franchise and other revenues | 15,388 | | | 13,745 | | | 48,592 | | | 43,906 | | | | | | | |
Total revenues | $ | 1,055,763 | | | $ | 1,010,463 | | | $ | 3,321,460 | | | $ | 3,075,302 | | | | | | | |
________________
(1)The thirteen and thirty-nine weeks ended September 26, 2021 include an adjustment of $(3.2) million to reduce the Company’s initial recorded estimate and net $3.1 million benefit, respectively, within other revenues in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base of Program of Social Integration (“PIS”) and Contribution for the Financing of Social Security (“COFINS”) taxes. The net amount recognized as a result of the favorable court rulings primarily represents refundable PIS and COFINS taxes for prior years, including accrued interest. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED | | | | | | |
(dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 | | | | | | |
Revenues | | | | | | | | | | | | | |
Restaurant sales | $ | 1,137,330 | | | $ | 1,108,918 | | | $ | 2,365,564 | | | $ | 2,232,493 | | | | | | | |
Franchise and other revenues | | | | | | | | | | | | | |
Franchise revenues | 12,568 | | | 12,596 | | | 26,091 | | | 26,002 | | | | | | | |
Other revenues | 2,796 | | | 3,648 | | | 5,785 | | | 7,202 | | | | | | | |
Total Franchise and other revenues | 15,364 | | | 16,244 | | | 31,876 | | | 33,204 | | | | | | | |
Total revenues | $ | 1,152,694 | | | $ | 1,125,162 | | | $ | 2,397,440 | | | $ | 2,265,697 | | | | | | | |
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
The following tables include the disaggregation of Restaurant sales and franchise revenues, by restaurant concept and major international market, for the periods indicated:
| | | THIRTEEN WEEKS ENDED | | THIRTEEN WEEKS ENDED |
| | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | JUNE 25, 2023 | | JUNE 26, 2022 |
(dollars in thousands) | (dollars in thousands) | RESTAURANT SALES | | FRANCHISE REVENUES | | RESTAURANT SALES | | FRANCHISE REVENUES | (dollars in thousands) | RESTAURANT SALES | | FRANCHISE REVENUES | | RESTAURANT SALES | | FRANCHISE REVENUES |
U.S. | U.S. | | | | | | | | U.S. | | | | | | | |
Outback Steakhouse | Outback Steakhouse | $ | 536,793 | | | $ | 7,447 | | | $ | 523,142 | | | $ | 9,335 | | Outback Steakhouse | $ | 576,989 | | | $ | 8,219 | | | $ | 573,563 | | | $ | 8,156 | |
Carrabba’s Italian Grill | Carrabba’s Italian Grill | 159,728 | | | 738 | | | 159,147 | | | 482 | | Carrabba’s Italian Grill | 176,666 | | | 758 | | | 170,190 | | | 797 | |
Bonefish Grill | Bonefish Grill | 130,669 | | | 163 | | | 134,603 | | | 169 | | Bonefish Grill | 143,458 | | | 95 | | | 145,472 | | | 173 | |
Fleming’s Prime Steakhouse & Wine Bar | Fleming’s Prime Steakhouse & Wine Bar | 80,748 | | | — | | | 79,687 | | | — | | Fleming’s Prime Steakhouse & Wine Bar | 92,851 | | | — | | | 93,933 | | | — | |
Other | Other | 2,741 | | | 17 | | | 2,211 | | | 3 | | Other | 3,474 | | | 10 | | | 2,769 | | | 8 | |
U.S. total | U.S. total | 910,679 | | | 8,365 | | | 898,790 | | | 9,989 | | U.S. total | 993,438 | | | 9,082 | | | 985,927 | | | 9,134 | |
International | International | | International | |
Outback Steakhouse Brazil | 105,932 | | | — | | | 74,020 | | | — | | |
Other (1) | 23,764 | | | 3,461 | | | 23,908 | | | 2,919 | | |
Outback Steakhouse - Brazil (1) | | Outback Steakhouse - Brazil (1) | 119,295 | | | — | | | 100,647 | | | — | |
Other (1)(2) | | Other (1)(2) | 24,597 | | | 3,486 | | | 22,344 | | | 3,462 | |
International total | International total | 129,696 | | | 3,461 | | | 97,928 | | | 2,919 | | International total | 143,892 | | | 3,486 | | | 122,991 | | | 3,462 | |
Total | Total | $ | 1,040,375 | | | $ | 11,826 | | | $ | 996,718 | | | $ | 12,908 | | Total | $ | 1,137,330 | | | $ | 12,568 | | | $ | 1,108,918 | | | $ | 12,596 | |
| | | | TWENTY-SIX WEEKS ENDED |
| | | JUNE 25, 2023 | | JUNE 26, 2022 |
| (dollars in thousands) | | (dollars in thousands) | RESTAURANT SALES | | FRANCHISE REVENUES | | RESTAURANT SALES | | FRANCHISE REVENUES |
U.S. | | U.S. | | | | | | | |
Outback Steakhouse | | Outback Steakhouse | $ | 1,205,172 | | | $ | 16,763 | | | $ | 1,168,956 | | | $ | 16,615 | |
Carrabba’s Italian Grill | | Carrabba’s Italian Grill | 364,708 | | | 1,553 | | | 345,818 | | | 1,458 | |
Bonefish Grill | | Bonefish Grill | 301,147 | | | 266 | | | 296,888 | | | 350 | |
Fleming’s Prime Steakhouse & Wine Bar | | Fleming’s Prime Steakhouse & Wine Bar | 195,624 | | | — | | | 191,595 | | | — | |
Other | | Other | 7,356 | | | 25 | | | 6,305 | | | 13 | |
U.S. total | | U.S. total | 2,074,007 | | | 18,607 | | | 2,009,562 | | | 18,436 | |
International | | International | |
Outback Steakhouse - Brazil (1) | | Outback Steakhouse - Brazil (1) | 241,311 | | | — | | | 185,948 | | | — | |
Other (1)(2) | | Other (1)(2) | 50,246 | | | 7,484 | | | 36,983 | | | 7,566 | |
International total | | International total | 291,557 | | | 7,484 | | | 222,931 | | | 7,566 | |
Total | | Total | $ | 2,365,564 | | | $ | 26,091 | | | $ | 2,232,493 | | | $ | 26,002 | |
________________
(1)Restaurant sales in Brazil increased $9.6 million and $19.2 million during the thirteen and twenty-six weeks ended June 25, 2023, respectively, in connection with value added tax exemptions resulting from tax legislation. See Note 12 - Income Taxes for details regarding the Brazil tax legislation.
(2)Includes Restaurant sales for Company-owned Outback Steakhouse restaurants outside of Brazil and Abbraccio restaurants in Brazil. Franchise revenues primarily includesinclude revenues from franchised Outback Steakhouse restaurants.
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
| | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| THIRTY-NINE WEEKS ENDED |
| SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
(dollars in thousands) | RESTAURANT SALES | | FRANCHISE REVENUES | | RESTAURANT SALES | | FRANCHISE REVENUES |
U.S. | | | | | | | |
Outback Steakhouse | $ | 1,705,749 | | | $ | 24,062 | | | $ | 1,649,433 | | | $ | 20,709 | |
Carrabba’s Italian Grill | 505,546 | | | 2,196 | | | 488,241 | | | 1,764 | |
Bonefish Grill | 427,557 | | | 513 | | | 410,613 | | | 473 | |
Fleming’s Prime Steakhouse & Wine Bar | 272,343 | | | — | | | 234,099 | | | — | |
Other | 9,046 | | | 30 | | | 6,756 | | | 3 | |
U.S. total | 2,920,241 | | | 26,801 | | | 2,789,142 | | | 22,949 | |
International | | | | | | | |
Outback Steakhouse Brazil | 291,880 | | | — | | | 178,178 | | | — | |
Other (1) | 60,747 | | | 11,027 | | | 64,076 | | | 8,969 | |
International total | 352,627 | | | 11,027 | | | 242,254 | | | 8,969 | |
Total | $ | 3,272,868 | | | $ | 37,828 | | | $ | 3,031,396 | | | $ | 31,918 | |
________________
(1)Includes Restaurant sales for Company-owned Outback Steakhouse restaurants outside of Brazil and Abbraccio restaurants in Brazil. Franchise revenues primarily includes revenues from franchised Outback Steakhouse restaurants.
The following table includes a detail of assets and liabilities from contracts with customers included on the Company’s Consolidated Balance Sheets as of the periods indicated:
| (dollars in thousands) | (dollars in thousands) | SEPTEMBER 25, 2022 | | DECEMBER 26, 2021 | | (dollars in thousands) | JUNE 25, 2023 | | DECEMBER 25, 2022 | |
Other current assets, net | Other current assets, net | | | | | Other current assets, net | | | | |
Deferred gift card sales commissions | Deferred gift card sales commissions | $ | 10,798 | | | $ | 17,793 | | | Deferred gift card sales commissions | $ | 12,694 | | | $ | 17,755 | | |
| Unearned revenue | Unearned revenue | | | Unearned revenue | | |
Deferred gift card revenue | Deferred gift card revenue | $ | 283,559 | | | $ | 387,945 | | | Deferred gift card revenue | $ | 304,942 | | | $ | 386,495 | | |
Deferred loyalty revenue | Deferred loyalty revenue | 5,226 | | | 9,386 | | | Deferred loyalty revenue | 5,391 | | | 5,628 | | |
Deferred franchise fees - current | Deferred franchise fees - current | 457 | | | 443 | | | Deferred franchise fees - current | 472 | | | 460 | | |
Other | Other | 2,589 | | | 1,021 | | | Other | 1,751 | | | 1,632 | | |
Total unearned revenue | $ | 291,831 | | | $ | 398,795 | | | |
Total Unearned revenue | | Total Unearned revenue | $ | 312,556 | | | $ | 394,215 | | |
| Other long-term liabilities, net | Other long-term liabilities, net | | | Other long-term liabilities, net | | |
Deferred franchise fees - non-current | Deferred franchise fees - non-current | $ | 4,244 | | | $ | 4,280 | | | Deferred franchise fees - non-current | $ | 4,132 | | | $ | 4,126 | | |
The following table is a rollforward of deferred gift card sales commissions for the periods indicated:
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | (dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | (dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Balance, beginning of the period | Balance, beginning of the period | $ | 12,338 | | | $ | 12,548 | | | $ | 17,793 | | | $ | 19,300 | | Balance, beginning of the period | $ | 13,403 | | | $ | 13,033 | | | $ | 17,755 | | | $ | 17,793 | |
Deferred gift card sales commissions amortization | Deferred gift card sales commissions amortization | (4,755) | | | (4,841) | | | (18,213) | | | (19,277) | | Deferred gift card sales commissions amortization | (5,383) | | | (5,441) | | | (13,180) | | | (13,458) | |
Deferred gift card sales commissions capitalization | Deferred gift card sales commissions capitalization | 3,836 | | | 3,698 | | | 13,441 | | | 12,494 | | Deferred gift card sales commissions capitalization | 5,340 | | | 5,436 | | | 9,743 | | | 9,605 | |
Other | Other | (621) | | | (573) | | | (2,223) | | | (1,685) | | Other | (666) | | | (690) | | | (1,624) | | | (1,602) | |
Balance, end of the period | Balance, end of the period | $ | 10,798 | | | $ | 10,832 | | | $ | 10,798 | | | $ | 10,832 | | Balance, end of the period | $ | 12,694 | | | $ | 12,338 | | | $ | 12,694 | | | $ | 12,338 | |
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
The following table is a rollforward of unearned gift card revenue for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
Balance, beginning of the period | $ | 303,544 | | | $ | 293,955 | | | $ | 387,945 | | | $ | 373,048 | |
Gift card sales | 46,692 | | | 45,036 | | | 162,146 | | | 153,126 | |
Gift card redemptions | (63,041) | | | (61,189) | | | (252,091) | | | (237,988) | |
Gift card breakage | (3,636) | | | (3,598) | | | (14,441) | | | (13,982) | |
Balance, end of the period | $ | 283,559 | | | $ | 274,204 | | | $ | 283,559 | | | $ | 274,204 | |
3. Impairments and Exit Costs
The components of Provision for impaired assets and restaurant closings are as follows for the period indicated:
| | | | | | | | | | | |
| | | | | | | THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | | | | | | | SEPTEMBER 26, 2021 |
Impairment losses | | | | | | | |
U.S. | | | | | | | $ | 8,289 | |
International | | | | | | | 180 | |
Corporate | | | | | | | 257 | |
Total impairment losses | | | | | | | 8,726 | |
Restaurant closure charges (benefits) | | | | | | | |
U.S. | | | | | | | 389 | |
International | | | | | | | (153) | |
Total restaurant closure charges | | | | | | | 236 | |
Provision for impaired assets and restaurant closings | | | | | | | $ | 8,962 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Impairment and closure charges during the period presented resulted primarily from locations identified for closure.
Annual Goodwill and Intangible Asset Impairment Assessment - The Company performs its annual assessment for impairment of goodwill and other indefinite-lived intangible assets during its second fiscal quarter. The Company’s 2022 and 2021 assessments were qualitative. In connection with these assessments, the Company did not record any impairment charges.
Accrued Facility Closure and Other Costs Rollforward - The following table is a rollforward of the Company’s closed facility lease liabilities and other accrued costs associated with the closure and restructuring initiatives for the period indicated:
| | | | | |
| THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | SEPTEMBER 25, 2022 |
Balance, beginning of the period | $ | 8,485 | |
| |
Cash payments | (2,813) | |
Accretion | 434 | |
Adjustments | (272) | |
Balance, end of the period (1) | $ | 5,834 | |
| |
| |
________________
(1)As of September 25, 2022, the Company had exit-related accruals related to certain closure and restructuring initiatives of $1.5 million recorded in Accrued and other current liabilities and $4.3 million recorded in Non-current operating lease liabilities on its Consolidated Balance Sheet. | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Balance, beginning of the period | $ | 314,096 | | | $ | 314,974 | | | $ | 386,495 | | | $ | 387,945 | |
Gift card sales | 65,338 | | | 65,174 | | | 118,343 | | | 115,454 | |
Gift card redemptions | (70,175) | | | (72,428) | | | (188,458) | | | (189,050) | |
Gift card breakage | (4,317) | | | (4,176) | | | (11,438) | | | (10,805) | |
Balance, end of the period | $ | 304,942 | | | $ | 303,544 | | | $ | 304,942 | | | $ | 303,544 | |
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
4.3. Earnings (Loss) Per Share
In February 2021, the Company provided the trustee of its convertible senior notes due in 2025 (the “2025 Notes”) notice of the Company’s irrevocable election to settle the principal portion of the 2025 Notes in cash and any excess in shares. As a result, subsequent to the election, only the amounts in excess of the principal amount are considered in diluted earnings per share. The amount of the 2025 Notes settled in shares of common stock will have a dilutive impact on diluted earnings per share when the average market price of the Company’s common stock for a given period exceeds the conversion price, which was initially $11.89 per share of common stock.
In connection with the offering of the 2025 Notes, the Company entered into warrant transactions (the “Warrant Transactions”), which have a dilutive effect on the Company’s common stock to the extent the price of its common stock exceeds the strike price of the Warrant Transactions, which was initially $16.64.
The following table presents the computation of basic and diluted earnings (loss) per share for the periods indicated:
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(in thousands, except per share data) | (in thousands, except per share data) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | (in thousands, except per share data) | JUNE 25, 2023 | | JUNE 26, 2022 (1) | | JUNE 25, 2023 | | JUNE 26, 2022 |
Net income attributable to Bloomin’ Brands | $ | 31,986 | | | $ | 3,449 | | | $ | 43,862 | | | $ | 154,856 | | |
Net income (loss) attributable to Bloomin’ Brands | | Net income (loss) attributable to Bloomin’ Brands | $ | 68,277 | | | $ | (63,635) | | | $ | 159,588 | | | $ | 11,876 | |
| Convertible senior notes if-converted method interest adjustment, net of tax (1) | — | | | — | | | — | | | 460 | | |
Diluted net income attributable to Bloomin’ Brands | $ | 31,986 | | | $ | 3,449 | | | $ | 43,862 | | | $ | 155,316 | | |
| | Basic weighted average common shares outstanding | Basic weighted average common shares outstanding | 89,192 | | | 89,229 | | | 89,149 | | | 88,890 | | Basic weighted average common shares outstanding | 88,559 | | | 88,898 | | | 88,838 | | | 89,127 | |
| Effect of dilutive securities: | Effect of dilutive securities: | | Effect of dilutive securities: | |
Stock options | Stock options | 173 | | | 864 | | | 261 | | | 913 | | Stock options | 395 | | | — | | | 398 | | | 305 | |
Nonvested restricted stock units | Nonvested restricted stock units | 117 | | | 286 | | | 167 | | | 380 | | Nonvested restricted stock units | 132 | | | — | | | 201 | | | 192 | |
Nonvested performance-based share units | Nonvested performance-based share units | — | | | — | | | 96 | | | 31 | | Nonvested performance-based share units | — | | | — | | | 143 | | | 143 | |
Convertible senior notes (1)(2) | 3,690 | | | 10,476 | | | 6,732 | | | 12,300 | | |
Convertible senior notes (2) | | Convertible senior notes (2) | 5,002 | | | — | | | 4,917 | | | 8,253 | |
Warrants (2) | Warrants (2) | 1,564 | | | 6,928 | | | 3,204 | | | 6,896 | | Warrants (2) | 3,313 | | | — | | | 3,209 | | | 4,025 | |
Diluted weighted average common shares outstanding | Diluted weighted average common shares outstanding | 94,736 | | | 107,783 | | | 99,609 | | | 109,410 | | Diluted weighted average common shares outstanding | 97,401 | | | 88,898 | | | 97,706 | | | 102,045 | |
| Basic earnings per share | $ | 0.36 | | | $ | 0.04 | | | $ | 0.49 | | | $ | 1.74 | | |
Diluted earnings per share | $ | 0.34 | | | $ | 0.03 | | | $ | 0.44 | | | $ | 1.42 | | |
Basic earnings (loss) per share | | Basic earnings (loss) per share | $ | 0.77 | | | $ | (0.72) | | | $ | 1.80 | | | $ | 0.13 | |
Diluted earnings (loss) per share | | Diluted earnings (loss) per share | $ | 0.70 | | | $ | (0.72) | | | $ | 1.63 | | | $ | 0.12 | |
|
______________________________
(1)Adjustment for interest related to the 2025 Notes weighted for the portion of the period priorDue to the Company’s election undernet loss during the 2025 Notes indenture to settlethirteen weeks ended June 26, 2022, the principal portioneffect of dilutive securities was excluded from the 2025 Notes in cash. Effective with the Company’s election, there willcomputation of diluted earnings per share as their effect would be no further numerator adjustments for interest or denominator adjustments for shares required to settle the principal portion.antidilutive.
(2)During the thirty-ninethirteen weeks ended September 25,June 26, 2022, the Company repurchased $125.0 million of the convertible notes due in 2025 Notes and retiredsettled the corresponding portion of the related warrants. See Note 8 - Convertible Seniornote hedges and warrants (the “2025 Notes for additional details. Partial Repurchase”).
Share-based compensation-related weighted average securities outstanding not included in the computation of earnings (loss) per share because their effect was antidilutive were as follows for the periods indicated:
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED | |
(shares in thousands) | (shares in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | (shares in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Stock options | Stock options | 2,297 | | | — | | | 2,012 | | | 455 | | Stock options | 689 | | | 2,563 | | | 707 | | | 1,870 | | |
Nonvested restricted stock units | Nonvested restricted stock units | 150 | | | 77 | | | 249 | | | 53 | | Nonvested restricted stock units | 21 | | | 485 | | | 70 | | | 299 | | |
Nonvested performance-based share units | Nonvested performance-based share units | 771 | | | 376 | | | 574 | | | 424 | | Nonvested performance-based share units | 581 | | | 596 | | | 463 | | | 475 | | |
|
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
5.4. Stock-based Compensation Plans
The Company recognized stock-based compensation expense, net of capitalized expense, as follows for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
Performance-based share units (1) | $ | 67 | | | $ | 3,026 | | | $ | 5,526 | | | $ | 11,813 | |
Restricted stock units | 1,872 | | | 2,043 | | | 5,709 | | | 6,373 | |
Stock options | 38 | | | 495 | | | 470 | | | 1,829 | |
| | | | | | | |
| $ | 1,977 | | | $ | 5,564 | | | $ | 11,705 | | | $ | 20,015 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
________________
(1)The thirteen and thirty-nine weeks ended September 25, 2022 include a cumulative life-to-date adjustment to decrease expense for PSUs granted in fiscal year 2020 based on revised Company projections of performance criteria set forth in the award agreements. The thirty-nine weeks ended September 26, 2021 includes a cumulative life-to-date adjustment to increase expense for PSUs granted in fiscal years 2019, 2020 and 2021 based on revised Company projections of performance criteria set forth in the award agreements. | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Performance-based share units | $ | 2,297 | | | $ | 2,840 | | | $ | 3,220 | | | $ | 5,459 | |
Restricted stock units | 1,985 | | | 2,027 | | | 3,948 | | | 3,837 | |
Stock options | 835 | | | 55 | | | 835 | | | 432 | |
| | | | | | | |
Total stock-based compensation expense, net | $ | 5,117 | | | $ | 4,922 | | | $ | 8,003 | | | $ | 9,728 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
In February 2022,2023, the Company granted 0.5 million performance-based share units (“PSUs”) subject to final payout modification by a Relative Total Shareholder Return (“Relative TSR”) modifier. This Relative TSR modifier can adjust the final payout outcome by 75%, 100% or 125% of the achieved performance metric, with the overall payout capped at 200% of the annual target grant. These PSUs have a three-year cliff vesting period and their fair value was estimated using the Monte Carlo simulation model.
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
The following table presents a summary of the Company’s PSU activity:
| | | | | | | | | | | | | | | | | |
(in thousands, except per unit data) | PERFORMANCE-BASED SHARE UNITS | | WEIGHTED AVERAGE GRANT DATE FAIR VALUE PER UNIT | | AGGREGATE INTRINSIC VALUE (1) |
Outstanding as of December 25, 2022 | 874 | | | $ | 24.83 | | | $ | 18,323 | |
Granted | 301 | | | $ | 29.01 | | | |
Performance adjustment (2) | 154 | | | $ | 19.84 | | | |
Vested | (470) | | | $ | 19.84 | | | |
Forfeited | (32) | | | $ | 26.39 | | | |
Outstanding as of June 25, 2023 | 827 | | | $ | 26.92 | | | $ | 21,308 | |
Expected to vest as of June 25, 2023 (3) | 1,067 | | | | | $ | 27,486 | |
________________
(1)Based on the $20.96 and $25.76 share price of the Company’s common stock on December 23, 2022 and June 23, 2023, the last trading day of the year ended December 25, 2022 and the twenty-six weeks ended June 25, 2023, respectively.
(2)Represents adjustment to 148% payout for PSUs granted during 2020.
(3)Estimated number of units to be issued upon the vesting of outstanding PSU awards based on Company performance projections of performance criteria set forth in the 2021, 2022 and 2023 PSU award agreements.
Assumptions used in the Monte Carlo simulation model and the grant date fair value of PSUs granted were as follows for the periods indicated:
| | | THIRTY-NINE WEEKS ENDED | | TWENTY-SIX WEEKS ENDED | |
| | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | JUNE 25, 2023 | | JUNE 26, 2022 | |
Assumptions: | Assumptions: | | | | Assumptions: | | | | |
Risk-free interest rate (1) | Risk-free interest rate (1) | 1.64 | % | | 0.20 | % | Risk-free interest rate (1) | 4.26 | % | | 1.64 | % | |
Dividend yield (2) | Dividend yield (2) | 2.31 | % | | — | % | Dividend yield (2) | 3.47 | % | | 2.31 | % | |
| Volatility (3) | Volatility (3) | 49.11 | % | | 48.45 | % | Volatility (3) | 51.02 | % | | 49.11 | % | |
| Grant date fair value per unit (4) | Grant date fair value per unit (4) | $ | 26.10 | | | $ | 29.73 | | Grant date fair value per unit (4) | $ | 29.01 | | | $ | 26.10 | | |
________________
(1)Risk-free interest rate is the U.S. Treasury yield curve in effect as of the grant date for the performance period of the unit.
(2)Dividend yield is the level of dividends expected to be paid on the Company’s common stock over the expected term.
(3)Based on the historical volatility of the Company’s stock over the last seven years.
(4)Represents a premium above the grant date per share value of the Company’s common stock for the Relative TSR modifier as of the grant date of2.7% and 7.9% and 14.3% for grants during the thirty-ninetwenty-six weeks ended SeptemberJune 25, 20222023 and SeptemberJune 26, 2021,2022, respectively.
The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of SeptemberJune 25, 2022:2023:
| | | UNRECOGNIZED COMPENSATION EXPENSE (dollars in thousands) | | REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years) | | UNRECOGNIZED COMPENSATION EXPENSE (dollars in thousands) | | REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years) |
Performance-based share units | Performance-based share units | $ | 14,620 | | | 1.4 | Performance-based share units | $ | 14,306 | | | 1.7 |
Restricted stock units | Restricted stock units | $ | 9,673 | | | 1.8 | Restricted stock units | $ | 11,917 | | | 2.0 |
|
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
6.5. Other Current Assets, Net
Other current assets, net, consisted of the following as of the periods indicated:
| (dollars in thousands) | (dollars in thousands) | SEPTEMBER 25, 2022 | | DECEMBER 26, 2021 | (dollars in thousands) | JUNE 25, 2023 | | DECEMBER 25, 2022 | |
Prepaid expenses | Prepaid expenses | $ | 31,468 | | | $ | 21,194 | | Prepaid expenses | $ | 24,387 | | | $ | 29,343 | | |
Accounts receivable - gift cards, net | Accounts receivable - gift cards, net | 8,584 | | | 91,248 | | Accounts receivable - gift cards, net | 15,754 | | | 85,606 | | |
Accounts receivable - vendors, net | Accounts receivable - vendors, net | 18,348 | | | 11,793 | | Accounts receivable - vendors, net | 15,638 | | | 25,385 | | |
Accounts receivable - franchisees, net | Accounts receivable - franchisees, net | 2,124 | | | 1,701 | | Accounts receivable - franchisees, net | 3,993 | | | 2,550 | | |
Accounts receivable - other, net | Accounts receivable - other, net | 17,322 | | | 18,353 | | Accounts receivable - other, net | 18,094 | | | 18,408 | | |
Deferred gift card sales commissions | Deferred gift card sales commissions | 10,798 | | | 17,793 | | Deferred gift card sales commissions | 12,694 | | | 17,755 | | |
| Company-owned life insurance policies | 7,420 | | | 17,244 | | |
| Other current assets, net | Other current assets, net | 5,575 | | | 5,297 | | Other current assets, net | 6,210 | | | 4,671 | | |
| | $ | 101,639 | | | $ | 184,623 | | | $ | 96,770 | | | $ | 183,718 | | |
6. Goodwill and Intangible Assets, Net
Annual Goodwill and Intangible Assets Impairment Assessment - The Company performs its annual assessment for impairment of goodwill and other indefinite-lived intangible assets during its second fiscal quarter. The Company’s 2023 assessment was quantitative and the 2022 assessment was qualitative. In connection with these assessments, the Company did not record any impairment charges.
7. Long-term Debt, Net
Following is a summary of outstanding Long-term debt, net, as of the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| SEPTEMBER 25, 2022 | | DECEMBER 26, 2021 |
(dollars in thousands) | OUTSTANDING BALANCE | | INTEREST RATE | | OUTSTANDING BALANCE | | INTEREST RATE |
Senior Secured Credit Facility: | | | | | | | |
Term loan A (1) | $ | — | | | | | $ | 195,000 | | | 1.60 | % |
Revolving credit facility (2) | 420,000 | | | 4.26 | % | | 80,000 | | | 3.75 | % |
Total Senior Secured Credit Facility | 420,000 | | | | | 275,000 | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
2025 Notes (3) | 105,000 | | | 5.00 | % | | 230,000 | | | 5.00 | % |
2029 Notes | 300,000 | | | 5.13 | % | | 300,000 | | | 5.13 | % |
Finance lease liabilities | 3,816 | | | | | 2,376 | | | |
| | | | | | | |
Less: unamortized debt discount and issuance costs (4) | (6,836) | | | | | (14,157) | | | |
Less: finance lease interest | (274) | | | | | (154) | | | |
Total debt, net | 821,706 | | | | | 793,065 | | | |
Less: current portion of long-term debt | (1,481) | | | | | (10,958) | | | |
Long-term debt, net | $ | 820,225 | | | | | $ | 782,107 | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| JUNE 25, 2023 | | DECEMBER 25, 2022 |
(dollars in thousands) | OUTSTANDING BALANCE | | INTEREST RATE | | OUTSTANDING BALANCE | | INTEREST RATE |
Senior secured credit facility - revolving credit facility (1) | $ | 365,000 | | | 6.77 | % | | $ | 430,000 | | | 5.79 | % |
2025 Notes | 104,786 | | | 5.00 | % | | 105,000 | | | 5.00 | % |
2029 Notes | 300,000 | | | 5.13 | % | | 300,000 | | | 5.13 | % |
| | | | | | | |
| | | | | | | |
Less: unamortized debt discount and issuance costs | (5,788) | | | | | (6,493) | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Long-term debt, net | $ | 763,998 | | | | | $ | 828,507 | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
________________
(1)Interest rate represents the weighted average interest rate as of December 26, 2021.the respective periods.
(2)Interest rate represents the weighted average interest rate as of September 25, 2022 and the base rate option elected in anticipation of impending repayment as of December 26, 2021.
(3)Debt Covenants - During the thirty-nine weeks ended SeptemberAs of June 25, 2023 and December 25, 2022, the Company repurchased $125.0 million of the 2025 Notes. See Note 8 - was in compliance with its debt covenants.
8. Convertible Senior Notes
for additional details.
(4)2025 Notes - In connection with dividends paid during the Amended Credit Agreement andtwenty-six weeks ended June 25, 2023, the partial repurchaseconversion rate for theCompany’s remaining convertible senior notes due 2025 (the “2025 Notes”) decreased to approximately $11.37 per share, which represents 87.962 shares of common stock per $1,000 principal amount of the 2025 Notes, $5.7or a total of approximately 9.217 million of debt issuance costs were written off during the thirty-nine weeks ended September 25, 2022. See Note 8 - Convertible Senior Notes for additional details.
Credit Agreement Amendment - On April 16, 2021, the Company and its wholly-owned subsidiary, OSI Restaurant Partners, LLC (“OSI”), as co-borrowers, entered into the Second Amended and Restated Credit Agreement (the “Credit Agreement”), which provides for senior secured financing of up to $1.0 billion consisting of a $200.0 million Term loan A and an $800.0 million revolving credit facility (the “Senior Secured Credit Facility”), maturing on April 16, 2026.shares.
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
On April 26, 2022, the Company and OSI entered into the First Amendment to the Second Amended and Restated Credit Agreement and Incremental Amendment (the “Amended Credit Agreement”), which included an increase of the Company’s existing revolving credit facility from $800.0 million to $1.0 billion and a transition from London Inter-Bank Offered Rate (“LIBOR”) to Secured Overnight Financing Rate (“SOFR”) as the benchmark rate for purposes of calculating interest under the Senior Secured Credit Facility. At closing, an incremental $192.5 million was drawn on the revolving credit facility to fully repay the outstanding balance of Term loan A. The total indebtedness of the Company remained unchanged as a result of the Amended Credit Agreement.
Under the Amended Credit Agreement, the Company may elect an interest rate at each reset period based on the Base Rate or Adjusted Term SOFR, plus an applicable spread. The Base Rate option is the highest of: (i) the prime rate of Wells Fargo Bank, National Association, (ii) the federal funds effective rate plus 0.5 of 1.0% or (iii) the Adjusted Term SOFR with a one-month interest period plus 1.0% (the “Base Rate”). The Adjusted Term SOFR option is the 30, 90 or 180-day SOFR, plus a term SOFR adjustment of 0.10%, subject to a 0% floor (the “Adjusted Term SOFR”). The interest rate spreads are as follows:
| | | | | | | | | | | |
| BASE RATE ELECTION | | ADJUSTED TERM SOFR ELECTION |
Revolving credit facility | 50 to 150 basis points over the Base Rate | | 150 to 250 basis points over the Adjusted Term SOFR |
| | | |
The transition to SOFR did not materially impact the interest rate applied to the Company’s borrowings. No other material changes were made to the terms of the Company’s Credit Agreement as a result of the Amended Credit Agreement.
As of September 25, 2022 and December 26, 2021, the Company was in compliance with its debt covenants.
Following is a summary of principal payments of the Company’s total consolidated debt outstanding as of the period indicated:
| | | | | |
(dollars in thousands) | SEPTEMBER 25, 2022 |
Year 1 | $ | 1,250 | |
Year 2 | 1,202 | |
Year 3 | 105,662 | |
Year 4 | 420,350 | |
Year 5 | 220 | |
Thereafter | 300,132 | |
Total payments | 828,816 | |
Less: unamortized debt discount and issuance costs | (6,836) | |
Less: finance lease interest | (274) | |
Total principal payments | $ | 821,706 | |
| |
| |
8. Convertible Senior Notes
2025 Notes - On May 25, 2022, the Company entered into exchange agreements (the “Exchange Agreements”) with certain holders (the “Noteholders”) of the 2025 Notes. The Noteholders agreed to exchange $125.0 million in aggregate principal amount of the Company’s outstanding 2025 Notes for $196.9 million in cash, plus accrued interest, and approximately 2.3 million shares of the Company’s common stock (the “2025 Notes Partial Repurchase”). Under the Exchange Agreements, the total amount of cash paid and number of shares of common stock issued by the Company were based upon the volume-weighted average price per share of the Company’s common stock during a ten-trading day averaging period ending on June 14, 2022. Upon entering into the Exchange Agreements, the conversion feature related to the 2025 Notes repurchased, as well as the settlements of the related
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
convertible senior note hedges and warrants, were subject to derivative accounting. In connection with the 2025 Notes Partial Repurchase, the Company recognized a loss on extinguishment of debt of $104.7 million and a loss on fair value adjustment of derivatives, net of $17.7 million, and recorded a $48.5 million increase to Additional paid-in capital during the thirty-nine weeks ended September 25, 2022.
The initial conversion rate applicable to the 2025 Notes was 84.122 shares of common stock per $1,000 principal amount of 2025 Notes, or a total of approximately 19.348 million shares for the total $230.0 million principal amount. This initial conversion rate was equivalent to an initial conversion price of approximately $11.89 per share. In connection with dividends paid during the thirty-nine weeks ended September 25, 2022, the conversion rate for the remaining 2025 Notes decreased to approximately $11.66 per share, which represents 85.743 shares of common stock per $1,000 principal amount of the 2025 Notes, or a total of approximately 9.003 million shares.
The following table includes the outstanding principal amount and carrying value of the 2025 Notes as of the periods indicated:
| | | | | | | | | | | |
(dollars in thousands) | SEPTEMBER 25, 2022 | | DECEMBER 26, 2021 |
Long-term debt, net | | | |
Principal | $ | 105,000 | | | $ | 230,000 | |
Less: debt issuance costs (1) | (2,132) | | | (5,898) | |
Net carrying amount | $ | 102,868 | | | $ | 224,102 | |
________________
(1)Debt issuance costs are amortized to Interest expense, net using the effective interest method over the 2025 Notes’ expected life. During the thirty-nine weeks ended September 25, 2022, the Company wrote off $2.8 million of debt issuance costs as a result of the 2025 Notes Partial Repurchase. | | | | | | | | | | | |
(dollars in thousands) | JUNE 25, 2023 | | DECEMBER 25, 2022 |
Principal | $ | 104,786 | | | $ | 105,000 | |
Less: debt issuance costs | (1,542) | | | (1,939) | |
Net carrying amount | $ | 103,244 | | | $ | 103,061 | |
Following is a summary of interest expense for the 2025 Notes by component for the periods indicated:
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | (dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | (dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Coupon interest | Coupon interest | $ | 1,313 | | | $ | 2,875 | | | $ | 6,785 | | | $ | 8,625 | | Coupon interest | $ | 1,310 | | | $ | 2,597 | | | $ | 2,622 | | | $ | 5,472 | |
Debt issuance cost amortization | Debt issuance cost amortization | 190 | | | 392 | | | 963 | | | 1,159 | | Debt issuance cost amortization | 198 | | | 370 | | | 394 | | | 774 | |
Total interest expense (1) | Total interest expense (1) | $ | 1,503 | | | $ | 3,267 | | | $ | 7,748 | | | $ | 9,784 | | Total interest expense (1) | $ | 1,508 | | | $ | 2,967 | | | $ | 3,016 | | | $ | 6,246 | |
________________
(1)The effective rate of the 2025 Notes over their expected life is 5.85%. The decrease in interest expense during the thirteen and twenty-six weeks ended June 25, 2023 relates to the 2025 Notes Partial Repurchase in May 2022.
Based on the daily closing prices of the Company’s stock during the quarter ended SeptemberJune 25, 2022,2023, the remaining holders of the 2025 Notes are eligible to convert their 2025 Notesnotes during the fourththird quarter of 2022.
Convertible Note Hedge and Warrant Transactions - In connection with the 2025 Notes Partial Repurchase, the Company entered into partial unwind agreements with certain financial institutions relating to a portion of the convertible note hedge transactions (the “Note Hedge Early Termination Agreements”) and a portion of the Warrant Transactions (the “Warrant Early Termination Agreements”) that were previously entered into by the Company in connection with the issuance of the 2025 Notes. Upon settlement, the Company received $131.9 million for the Note Hedge Early Termination Agreements and paid $114.8 million for the Warrant Early Termination Agreements during the thirty-nine weeks ended September 25, 2022. In connection with the Note Hedge Early Termination Agreements and the Warrant Early Termination Agreements the Company recorded a $113.0 million increase and a $97.6 million decrease, respectively, to Additional paid-in capital during the thirty-nine weeks ended September 25, 2022.
The remaining Warrant Transactions have a dilutive effect on the Company’s common stock to the extent that the price of its common stock exceeds the strike price of the Warrant Transactions. The strike price was initially $16.64 per share and is subject to certain adjustments under the terms of the Warrant Transactions. In connection with
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
dividends paid during the thirty-nine weeks ended September 25, 2022, the strike price for the remaining Warrant Transactions decreased to $16.33.2023.
9. Other Long-term Liabilities, Net
Other long-term liabilities, net, consisted of the following as of the periods indicated:
| | | | | | | | | | | |
(dollars in thousands) | SEPTEMBER 25, 2022 | | DECEMBER 26, 2021 |
Accrued insurance liability | $ | 30,419 | | | $ | 31,517 | |
| | | |
Deferred payroll tax liabilities (1) | — | | | 27,302 | |
Deferred compensation obligations | 28,351 | | | 37,514 | |
Other long-term liabilities | 28,082 | | | 28,909 | |
| $ | 86,852 | | | $ | 125,242 | |
_______________
(1)During the thirty-nine weeks ended September 25, 2022, the Company reclassified $27.3 million of payroll taxes deferred under the CARES Act to current.
10. Stockholders’ Equity
Share Repurchases - On February 8, 2022,7, 2023, the Company’s Board of Directors (the “Board”) approved a share repurchase program (the “2022“2023 Share Repurchase Program”) under which the Company wasis authorized to repurchase up to $125.0 million of its outstanding common stock. The 20222023 Share Repurchase Program will expire on August 9, 2023.7, 2024. As of SeptemberJune 25, 2022, $44.02023, $103.8 million remained available for repurchase under the 20222023 Share Repurchase Program.
Following is a summary of the shares repurchased under the 2022 Share Repurchase Program during fiscal year 2022:2023:
| (in thousands, except per share data) | (in thousands, except per share data) | NUMBER OF SHARES | | AVERAGE REPURCHASE PRICE PER SHARE | | AMOUNT | (in thousands, except per share data) | NUMBER OF SHARES | | AVERAGE REPURCHASE PRICE PER SHARE | | AMOUNT |
First fiscal quarter | First fiscal quarter | 551 | | | $ | 21.26 | | | $ | 11,702 | | First fiscal quarter | 863 | | | $ | 23.92 | | | $ | 20,645 | |
Second fiscal quarter | Second fiscal quarter | 1,761 | | | $ | 20.30 | | | 35,749 | | Second fiscal quarter | 619 | | | $ | 25.11 | | | 15,539 | |
Third fiscal quarter | 1,746 | | | $ | 19.21 | | | 33,549 | | |
| Total common stock repurchases (1) | Total common stock repurchases (1) | 4,058 | | | $ | 19.96 | | | $ | 81,000 | | Total common stock repurchases (1) | 1,482 | | | $ | 24.42 | | | $ | 36,184 | |
________________
(1)Excludes excise tax on share repurchases. Subsequent to SeptemberJune 25, 2022,2023, the Company repurchased 682269 thousand shares of its common stock for $13.8$7.3 million under a Rule 10b5-1 plan through October 28, 2022.plan.
Dividends - The Company declared and paid dividends per share during fiscal year 20222023 as follows:
| | (dollars in thousands, except per share data) | (dollars in thousands, except per share data) | | DIVIDENDS PER SHARE | | | AMOUNT | (dollars in thousands, except per share data) | | DIVIDENDS PER SHARE | | | AMOUNT |
First fiscal quarter | First fiscal quarter | | $ | 0.14 | | | | $ | 12,559 | | First fiscal quarter | | $ | 0.24 | | | | $ | 21,014 | |
Second fiscal quarter | Second fiscal quarter | | 0.14 | | | | 12,418 | | Second fiscal quarter | | 0.24 | | | | 20,990 | |
Third fiscal quarter | | 0.14 | | | | 12,475 | | |
| | Total cash dividends declared and paid | Total cash dividends declared and paid | | $ | 0.42 | | | | $ | 37,452 | | Total cash dividends declared and paid | | $ | 0.48 | | | | $ | 42,004 | |
|
In October 2022,July 2023, the Board declared a quarterly cash dividend of $0.14$0.24 per share, payable on November 23, 2022August 25, 2023 to shareholders of record at the close of business on November 9, 2022.August 14, 2023.
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
Accumulated Other Comprehensive Loss (“AOCL”) -Following are the components AOCL consisted of AOCLforeign currency translation adjustments as of the periods indicated:June 25, 2023 and December 25, 2022.
| | | | | | | | | | | |
(dollars in thousands) | SEPTEMBER 25, 2022 | | DECEMBER 26, 2021 |
Foreign currency translation adjustment | $ | (185,298) | | | $ | (195,480) | |
Unrealized loss on derivatives, net of tax | (1,542) | | | (10,509) | |
Accumulated other comprehensive loss | $ | (186,840) | | | $ | (205,989) | |
| | | |
| | | |
| | | |
Following are the components of Other comprehensive (loss) income attributable to Bloomin’ Brands for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
Foreign currency translation adjustment | $ | (13,041) | | | $ | 1,673 | | | $ | 10,182 | | | $ | 5,113 | |
| | | | | | | |
Unrealized (loss) gain on derivatives, net of tax | — | | | (153) | | | 573 | | | (323) | |
Reclassification of adjustments for loss on derivatives included in Net income, net of tax (1) | — | | | 1,519 | | | 954 | | | 6,036 | |
Impact of terminated interest rate swaps included in Net income, net of tax (1) | 2,255 | | | 1,479 | | | 7,440 | | | 2,950 | |
Total gain on derivatives, net of tax | 2,255 | | | 2,845 | | | 8,967 | | | 8,663 | |
| | | | | | | |
Other comprehensive (loss) income attributable to Bloomin’ Brands | $ | (10,786) | | | $ | 4,518 | | | $ | 19,149 | | | $ | 13,776 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
________________
(1)See Note 11 - Derivative Instruments and Hedging Activities for the tax impact of reclassifications and the terminated swaps. | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Foreign currency translation adjustment | $ | 4,502 | | | $ | 11,940 | | | $ | 3,368 | | | $ | 23,223 | |
| | | | | | | |
Unrealized gain on derivatives, net of tax | — | | | — | | | — | | | 573 | |
Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax | — | | | 273 | | | — | | | 954 | |
Impact of terminated interest rate swaps included in Net income (loss), net of tax | — | | | 2,164 | | | — | | | 5,185 | |
Total gain on derivatives, net of tax | — | | | 2,437 | | | — | | | 6,712 | |
| | | | | | | |
Other comprehensive income attributable to Bloomin’ Brands | $ | 4,502 | | | $ | 14,377 | | | $ | 3,368 | | | $ | 29,935 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
11. Derivative Instruments and Hedging Activities
Cash Flow Hedges of Interest Rate Risk -In October 2018, the Company entered into variable-to-fixed interest rate swap agreements with 12 counterparties to hedge a portion of the cash flows of the Company’s variable rate debt. The swap agreements had an aggregate notional amount of $550.0 million and mature on November 30, 2022. Under the terms of the swap agreements, the Company paid a weighted average fixed rate of 3.04% on the notional amount and received payments from the counterparty based on one-month LIBOR. During 2021, the Company terminated its variable-to-fixed interest rate swap agreements with certain counterparties and as a result, as of December 26, 2021 had interest rate swap agreements remaining with twocounterparties for an aggregate notional amount of $125.0 million.
In connection with the Amended Credit Agreement, on April 26, 2022 the Company terminated its remaining variable-to-fixed interest rate swap agreements. Following these terminations, the unrealized loss related to the terminated swap agreements included in Accumulated other comprehensive loss is amortized to Interest expense, net during 2022.
The Company’s swap agreements were designated and qualified as cash flow hedges, recognized on its Consolidated Balance Sheet at fair value as of December 26, 2021 and classified based on the instruments’maturity dates. As of September 25, 2022, the Company estimated $2.2 million of interest expense from the terminated swap agreements will be reclassified to Interest expense, net through the November 2022 maturity date of the swaps.
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
The following table presents the fair value and classification of the Company’s swap agreements as of the period indicated:
| | | | | | | | | | | | | |
(dollars in thousands) | | | DECEMBER 26, 2021 | | CONSOLIDATED BALANCE SHEET CLASSIFICATION |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Interest rate swaps - liability (1) | | | $ | 3,056 | | | Accrued and other current liabilities |
| | | | | |
| | | | | |
| | | | | |
Accrued interest | | | $ | 276 | | | Accrued and other current liabilities |
| | | | | |
| | | | | |
| | | | | |
____________________
(1)See Note 13 - Fair Value Measurements for fair value discussion of the interest rate swaps.
The following table summarizes the effects of the swap agreements on Net income for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
Interest rate swap agreements: | | | | | | | |
Interest rate swap expense recognized in Interest expense, net | $ | — | | | $ | (2,045) | | | $ | (1,284) | | | $ | (8,127) | |
Income tax benefit recognized in Provision (benefit) for income taxes | — | | | 526 | | | 330 | | | 2,091 | |
Net effects of interest rate swap agreements | $ | — | | | $ | (1,519) | | | $ | (954) | | | $ | (6,036) | |
Terminated interest rate swap agreements: | | | | | | | |
Terminated interest rate swap expense recognized in Interest expense, net | $ | (3,034) | | | $ | (1,992) | | | $ | (10,014) | | | $ | (3,973) | |
Income tax benefit recognized in Provision (benefit) for income taxes | 779 | | | 513 | | | 2,574 | | | 1,023 | |
Net effects of terminated interest rate swap agreements | $ | (2,255) | | | $ | (1,479) | | | $ | (7,440) | | | $ | (2,950) | |
Total net effects on Net income | $ | (2,255) | | | $ | (2,998) | | | $ | (8,394) | | | $ | (8,986) | |
12.10. Leases
The following table includes a detail of lease assets and liabilities included on the Company’s Consolidated Balance Sheets as of the periods indicated:
| (dollars in thousands) | (dollars in thousands) | CONSOLIDATED BALANCE SHEET CLASSIFICATION | | SEPTEMBER 25, 2022 | | DECEMBER 26, 2021 | (dollars in thousands) | CONSOLIDATED BALANCE SHEET CLASSIFICATION | | JUNE 25, 2023 | | DECEMBER 25, 2022 |
Operating lease right-of-use assets | Operating lease right-of-use assets | Operating lease right-of-use assets | | $ | 1,115,004 | | | $ | 1,130,873 | | Operating lease right-of-use assets | Operating lease right-of-use assets | | $ | 1,089,218 | | | $ | 1,103,083 | |
Finance lease right-of-use assets (1) | Finance lease right-of-use assets (1) | Property, fixtures and equipment, net | | 3,404 | | | 2,074 | | Finance lease right-of-use assets (1) | Property, fixtures and equipment, net | | 10,045 | | | 4,679 | |
Total lease assets, net | Total lease assets, net | | $ | 1,118,408 | | | $ | 1,132,947 | | Total lease assets, net | | $ | 1,099,263 | | | $ | 1,107,762 | |
| Current operating lease liabilities (2) | Current operating lease liabilities (2) | Accrued and other current liabilities | | $ | 181,427 | | | $ | 177,028 | | Current operating lease liabilities (2) | Current operating lease liabilities | | $ | 185,362 | | | $ | 183,510 | |
Current finance lease liabilities | Current finance lease liabilities | Current portion of long-term debt | | 1,481 | | | 958 | | Current finance lease liabilities | Accrued and other current liabilities | | 2,508 | | | 1,636 | |
Non-current operating lease liabilities (2) | Non-current operating lease liabilities (2) | Non-current operating lease liabilities | | 1,160,392 | | | 1,178,998 | | Non-current operating lease liabilities (2) | Non-current operating lease liabilities | | 1,131,843 | | | 1,148,379 | |
Non-current finance lease liabilities | Non-current finance lease liabilities | Long-term debt, net | | 2,061 | | | 1,264 | | Non-current finance lease liabilities | Other long-term liabilities, net | | 8,037 | | | 3,149 | |
Total lease liabilities | Total lease liabilities | | $ | 1,345,361 | | | $ | 1,358,248 | | Total lease liabilities | | $ | 1,327,750 | | | $ | 1,336,674 | |
________________
(1)Net of accumulated amortization of $3.4$3.5 million and $3.3$3.6 million as of SeptemberJune 25, 20222023 and December 26, 2021,25, 2022, respectively.
(2)Excludes current accrued contingent percentage rent of $3.3 million and $3.5 million, as of September 25, 2022 and December 26, 2021, respectively, and immaterial current and non-current COVID-19-related deferred rent accruals.
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
Following is a summary of expenses and income related to leases recognized in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for the periods indicated:
| | | CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME CLASSIFICATION | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) CLASSIFICATION | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | (dollars in thousands) | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | (dollars in thousands) | | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Operating leases (1) | Other restaurant operating | | $ | 45,817 | | | $ | 44,807 | | | $ | 136,757 | | | $ | 133,362 | | |
Operating lease cost (1) | | Operating lease cost (1) | Other restaurant operating | | $ | 46,237 | | | $ | 45,579 | | | $ | 91,984 | | | $ | 90,940 | |
Variable lease cost (2) | Variable lease cost (2) | Other restaurant operating | | 1,519 | | | 1,574 | | | 5,021 | | | 3,082 | | Variable lease cost (2) | Other restaurant operating | | 1,629 | | | 1,619 | | | 3,353 | | | 3,502 | |
Finance leases: | | |
Finance lease costs: | | Finance lease costs: | |
Amortization of leased assets | Amortization of leased assets | Depreciation and amortization | | 355 | | | 280 | | | 1,048 | | | 800 | | Amortization of leased assets | Depreciation and amortization | | 549 | | | 356 | | | 1,037 | | | 693 | |
Interest on lease liabilities | Interest on lease liabilities | Interest expense, net | | 44 | | | 34 | | | 120 | | | 101 | | Interest on lease liabilities | Interest expense, net | | 174 | | | 44 | | | 310 | | | 76 | |
Sublease revenue | Sublease revenue | Franchise and other revenues | | (2,455) | | | (3,276) | | | (7,449) | | | (6,936) | | Sublease revenue | Franchise and other revenues | | (1,635) | | | (2,436) | | | (3,343) | | | (4,994) | |
Lease costs, net | Lease costs, net | | $ | 45,280 | | | $ | 43,419 | | | $ | 135,497 | | | $ | 130,409 | | Lease costs, net | | $ | 46,954 | | | $ | 45,162 | | | $ | 93,341 | | | $ | 90,217 | |
________________
(1)Excludes rent expense for office facilities and Company-owned closed or subleased properties of $3.1$3.0 million and $3.2$3.1 million for the thirteen weeks ended SeptemberJune 25, 20222023 and SeptemberJune 26, 2021,2022, respectively, and $9.1$6.0 million and $9.9$6.1 million for the thirty-ninetwenty-six weeks ended SeptemberJune 25, 20222023 and SeptemberJune 26, 2021,2022, respectively, which is included in General and administrative expense.
(2)Includes COVID-19-related rent abatements for the thirteen and thirty-nine weeks ended September 26, 2021.
The following table is a summary of cash flow impacts to the Company’s Consolidated Financial Statements related to its leases for the periods indicated:
| | | THIRTY-NINE WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | (dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | (dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 |
| Cash flows from operating activities: | Cash flows from operating activities: | | | | Cash flows from operating activities: | | | |
Cash paid for amounts included in the measurement of operating lease liabilities | Cash paid for amounts included in the measurement of operating lease liabilities | $ | 145,797 | | | $ | 155,661 | | Cash paid for amounts included in the measurement of operating lease liabilities | $ | 97,804 | | | $ | 97,255 | |
|
13.11. Fair Value Measurements
Fair value is the price that would be received for an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants on the measurement date. Fair value is categorized into one of the following three levels based on the lowest level of significant input:
| | | | | | | | |
Level 1 | | Unadjusted quoted market prices in active markets for identical assets or liabilities |
Level 2 | | Observable inputs available at measurement date other than quoted prices included in Level 1 |
Level 3 | | Unobservable inputs that cannot be corroborated by observable market data |
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
Fair Value Measurements on a Recurring Basis - The following table summarizes the Company’s financial assets and liabilities measured at fair value by hierarchy level on a recurring basis as of the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| SEPTEMBER 25, 2022 | | | | DECEMBER 26, 2021 | | |
(dollars in thousands) | TOTAL | | LEVEL 1 | | | | | | TOTAL | | LEVEL 1 | | LEVEL 2 | | |
Assets: | | | | | | | | | | | | | | | |
Cash equivalents: | | | | | | | | | | | | | | | |
Fixed income funds | $ | 6,277 | | | $ | 6,277 | | | | | | | $ | 6,714 | | | $ | 6,714 | | | $ | — | | | |
Money market funds | 10,254 | | | 10,254 | | | | | | | 9,039 | | | 9,039 | | | — | | | |
Restricted cash equivalents: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Money market funds | 143 | | | 143 | | | | | | | 1,472 | | | 1,472 | | | — | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total asset recurring fair value measurements | $ | 16,674 | | | $ | 16,674 | | | | | | | $ | 17,225 | | | $ | 17,225 | | | $ | — | | | |
| | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | |
Accrued and other current liabilities: | | | | | | | | | | | | | | | |
Derivative instruments - interest rate swaps | $ | — | | | $ | — | | | | | | | $ | 3,056 | | | $ | — | | | $ | 3,056 | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Fair value of each class of financial instrument is determined based on the following:
| | | | | | | | |
FINANCIAL INSTRUMENT | | METHODS AND ASSUMPTIONS |
Fixed income funds and Money market funds | | Carrying value approximates fair value because maturities are less than three months. |
Derivative instruments | | The Company’s derivative instruments include interest rate swaps. Fair value measurements are based on the contractual terms of the derivatives and use observable market-based inputs. The interest rate swaps are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads. The Company also considers its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. As of December 26, 2021, the Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. |
| | |
Fair Value Measurements on a Nonrecurring Basis - Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to property, fixtures and equipment, operating lease right-of-use assets, goodwill and other intangible assets, which are remeasured when carrying value exceeds fair value. Carrying value after impairment approximates fair value. The following table summarizes the Company’s assets measured at fair value by hierarchy level on a nonrecurring basis for the period indicated:
| | | | | | | | | | | | | | | |
| | | |
| | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | THIRTY-NINE WEEKS ENDED |
| | | SEPTEMBER 26, 2021 |
(dollars in thousands) | | | | | REMAINING CARRYING VALUE (1) | | TOTAL IMPAIRMENT |
| | | | | | | |
Operating lease right-of-use assets | | | | | $ | 7,651 | | | $ | 1,466 | |
Property, fixtures and equipment | | | | | 8,928 | | | 7,260 | |
| | | | | | | |
| | | | | $ | 16,579 | | | $ | 8,726 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| JUNE 25, 2023 | | | | DECEMBER 25, 2022 | | |
(dollars in thousands) | TOTAL | | LEVEL 1 | | | | | | TOTAL | | LEVEL 1 | | | | |
Assets (1): | | | | | | | | | | | | | | | |
Cash equivalents: | | | | | | | | | | | | | | | |
Fixed income funds | $ | 11,715 | | | $ | 11,715 | | | | | | | $ | 3,301 | | | $ | 3,301 | | | | | |
Money market funds | 8,880 | | | 8,880 | | | | | | | 4,786 | | | 4,786 | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total asset recurring fair value measurements | $ | 20,595 | | | $ | 20,595 | | | | | | | $ | 8,087 | | | $ | 8,087 | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
________________
(1)All asset carrying values measured using discounted cash flow models (Level 3).Carrying value approximates fair value because maturities are less than three months.
Interim Disclosures about Fair Value of Financial Instruments - The Company’s non-derivative financial instruments consist of cash equivalents, accounts receivable, accounts payable and current and long-term debt. The fair values of cash equivalents, accounts receivable and accounts payable approximate their carrying amounts reported on its Consolidated Balance Sheets due to their short duration.
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
Debt is carried at amortized cost; however, the Company estimates the fair value of debt for disclosure purposes. The following table includes the carrying value and fair value of the Company’s debt by hierarchy level as of the periods indicated:
| | | SEPTEMBER 25, 2022 | | DECEMBER 26, 2021 | | | | | | | | | | | | | | | | | | | | | | | |
| | CARRYING VALUE | | FAIR VALUE LEVEL 2 | | CARRYING VALUE | | FAIR VALUE LEVEL 2 | | JUNE 25, 2023 | | DECEMBER 25, 2022 |
(dollars in thousands) | (dollars in thousands) | | (dollars in thousands) | CARRYING VALUE | | FAIR VALUE LEVEL 2 | | | CARRYING VALUE | | FAIR VALUE LEVEL 2 | |
Senior Secured Credit Facility: | | | | | | | | | | |
Term loan A | $ | — | | | $ | — | | | | $ | 195,000 | | | $ | 190,125 | | | |
Revolving credit facility | $ | 420,000 | | | $ | 409,500 | | | | $ | 80,000 | | | $ | 76,926 | | | |
| Senior secured credit facility - revolving credit facility | | Senior secured credit facility - revolving credit facility | $ | 365,000 | | | $ | 365,000 | | | | $ | 430,000 | | | $ | 430,000 | | |
| 2025 Notes | 2025 Notes | $ | 105,000 | | | $ | 178,869 | | | | $ | 230,000 | | | $ | 447,615 | | | 2025 Notes | $ | 104,786 | | | $ | 241,722 | | | | $ | 105,000 | | | $ | 198,843 | | |
2029 Notes | 2029 Notes | $ | 300,000 | | | $ | 252,471 | | | | $ | 300,000 | | | $ | 304,395 | | | 2029 Notes | $ | 300,000 | | | $ | 269,343 | | | | $ | 300,000 | | | $ | 260,265 | | |
14. 12. Income Taxes
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
Income before provision (benefit) for income taxes | $ | 38,613 | | | $ | 597 | | | $ | 82,092 | | | $ | 184,562 | |
Provision (benefit) for income taxes | $ | 5,563 | | | $ | (4,454) | | | $ | 33,028 | | | $ | 24,827 | |
Effective income tax rate | 14.4 | % | | (NM) | | 40.2 | % | | 13.5 | % |
________________
NM Not meaningful.
The provision for income taxes for the thirteen weeks ended September 25, 2022 increased primarily due to higher pre-tax book income across the Company’s U.S. and international subsidiaries. The benefit for income taxes for the thirteen weeks ended September 26, 2021 includes the impact of changes to the estimate of the forecasted full-year effective tax rate relative to prior quarters in 2021. | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Income (loss) before provision for income taxes | $ | 76,485 | | | $ | (50,144) | | | $ | 184,674 | | | $ | 43,479 | |
Provision for income taxes | $ | 6,483 | | | $ | 11,536 | | | $ | 21,244 | | | $ | 27,465 | |
Effective income tax rate | 8.5 | % | | (23.0) | % | | 11.5 | % | | 63.2 | % |
The effective income tax rate for the thirty-ninethirteen weeks ended SeptemberJune 25, 2022 increased2023 changed by 26.731.5 percentage points as compared to the thirty-ninethirteen weeks ended SeptemberJune 26, 2021. The increase was2022. This change is primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase which, relative to the Loss before provision for income taxes during the thirteen weeks ended June 26, 2022, resulted in a negative effective income tax rate. This change was partially offset by a reduction in the effective tax rate during the thirteen weeks ended June 25, 2023 from benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34% to 0% and the revaluation of Brazilian deferred tax assets and liabilities as a result of the May 2023 Brazil tax legislation, as defined and further discussed below.
The effective income tax rate for the twenty-six weeks ended June 25, 2023 decreased by 51.7 percentage points as compared to the twenty-six weeks ended June 26, 2022. This decrease was primarily due to the benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34% to 0% for the twenty-six weeks ended June 25, 2023, and the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the thirty-ninetwenty-six weeks ended September 25,June 26, 2022.
OnIn September 16, 2022, the Company’s Brazilian subsidiary was grantedreceived a preliminary injunction grantingauthorizing it eligibility to benefit from a recent law in Brazilthe exemptions enacted by Law 14,148/2021 which provides for emergency and temporary actions that established several emergency actions by the government to offset the economic effects of the COVID-19 pandemic for the tourism and events sector. The new law introducedgrant certain industries a 100% exemption from Brazilian corporate income tax (IRPJ and CSLL) and federal value-addedvalue added taxes (PIS and COFINS) for a period of 5 years.five-year period. The injunction was issued as part of an ongoing lawsuit initiated by the Company’s Brazilian subsidiary due to the uncertainty regarding the restaurant industry’s eligibility for the exemptions under this exemption. The Company has not recognized a financial impactlegislation.
In May 2023, Brazil enacted tax legislation that prospectively limits the Company’s ability to benefit from the 100% exemption from income tax (IRPJ and CSLL) and federal value added taxes (PIS and COFINS) for the thirteen-weekfull five-year period ended September 25, 2022 as(the “May 2023 Brazil tax legislation”). As a result of this legislation, the Company continuesexpects to evaluatebe subject to PIS and COFINS and CSLL beginning in the exemption, the uncertaintyfourth quarter of 2023 and impacts of the injunction, and the best courses of action moving forward.IRPJ beginning in 2024.
A restaurant company employer may claim a credit against its federal income taxes for FICA taxes paid on certain tipped wages (the “FICA tax credit”). The level of FICA tax credits is primarily driven by U.S. Restaurant sales and is not impacted by costs incurred that may reduce pre-tax income.
The effectiveIncome before provision for income tax rate for the thirteen weeks ended September 25, 2022 was lower than the Company’s blended federal and state statutory rate of approximately 26% primarily due to the benefit of FICA tax credits on certain tipped wages.taxes.
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
The effective income tax rates for the thirteen and twenty-six weeks ended June 25, 2023 were lower than the Company’s blended federal and state statutory rate of approximately 26% primarily due to the benefit of FICA tax credits on certain tipped wages, benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34% to 0%, and the revaluation of Brazilian deferred tax assets and liabilities as a result of the May 2023 Brazil tax legislation.
The effective income tax rate for the thirty-ninethirteen weeks ended September 25,June 26, 2022 was lower than the Company’s blended federal and state statutory rate of approximately 26%. The income tax rate includes the impact of non-deductible losses associated with the 2025 Notes Partial Repurchase which, relative to the Loss before provision for income taxes during the quarter, resulted in a negative effective income tax rate.
The effective income tax rate for the twenty-six weeks ended June 26, 2022 was higher than the statutory rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the thirty-ninetwenty-six weeks ended September 25,June 26, 2022.
The effective income tax rates for the thirteen and thirty-nine weeks ended September 26, 2021 were lower than the statutory rate primarily due to the benefit of FICA tax credits on certain tipped wages.
On December 28, 2021, the U.S. Treasury and the Internal Revenue Service released final regulations that, among other things, provide guidance on several aspects of the foreign tax credit rules. As part of the guidance issued, these regulations change longstanding foreign tax credit regulations that now make foreign taxes paid to certain countries no longer creditable in the United States. The Company expects that a portion of post-2022 foreign taxes paid will not be creditable in the United States. Furthermore, the impact of these regulations will result in the utilization of existing prior year foreign tax credit carryforwards for which the Company had previously recorded a valuation allowance. The valuation allowance related to the credits expected to be utilized has been released during the thirty-nine weeks ended September 25, 2022.
15.13. Commitments and Contingencies
Litigation and Other Matters - The Company is subject to legal proceedings, claims and liabilities, such as liquor liability, slip and fall cases, wage-and-hourwage and hour and other employment-related litigation, which arise in the ordinary course of business. A reserve is recorded when it is both: (i) probable that a loss has occurred and (ii) the amount of loss can be reasonably estimated. There may be instances in which an exposure to loss exceeds the recorded reserve. The Company evaluates, on a quarterly basis, developments in legal proceedings that could cause an increase or decrease in the amount of the reserve that has been previously recorded, or a revision to the disclosed estimated range of possible losses, as applicable.
The Company’s legal proceedings range from cases brought by a single plaintiff to threatened class actions with many putative class members. While some matters pending against the Company specify the damages claimed by the plaintiff or class, many seek unspecified amounts or are at very early stages of the legal process. Even when the amount of damages claimed against the Company are stated, the claimed amount may be exaggerated, unsupported or unrelated to possible outcomes, and as such, are not meaningful indicators of the Company’s potential liability or financial exposure. As a result, some matters have not yet progressed sufficiently through discovery or development of important factual information and legal issues to enable the Company to estimate an amount of loss or a range of possible loss.
The Company recorded reserves of $8.6 million and $7.1 million for certain of its outstanding legal proceedings as of September 25, 2022 and December 26, 2021, respectively, within Accrued and other current liabilities and Other long-term liabilities on its Consolidated Balance Sheets. While the Company believes that additional losses beyond these accruals are reasonably possible, it cannot estimate a possible loss contingency or range of reasonably possible loss contingencies beyond these accruals.
The Company intends to defend itself in legal matters. Some of these matters may be covered, at least in part, by insurance if they exceed specified retention or deductible amounts. However, it is possible that claims may be denied by the Company’s insurance carriers, the Company may be required by its insurance carriers to contribute to the payment of claims, or the Company’s insurance coverage may not continue to be available on acceptable terms or in sufficient amounts. The Company records receivables from third party insurers when recovery has been determined to be probable. The Company believes that the ultimate determination of liability in connection with legal claims pending against the Company, if any, in excess of amounts already provided for such matters in the consolidated financial statements, will not have a material adverse effect on its business, annual results of operations, liquidity or financial position. However, it is possible that the Company’s business, results of operations,
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
liquidity, or financial condition could be materially affected in a particular future reporting period by the unfavorable resolution of one or more matters or contingencies during such period.
The Company recorded reserves of $16.4 million and $15.1 million for certain of its outstanding legal proceedings as of June 25, 2023 and December 25, 2022, respectively, within Accrued and other current liabilities on its Consolidated Balance Sheets. While the Company believes that additional losses beyond these accruals are
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
reasonably possible, it cannot estimate a possible loss contingency or range of reasonably possible loss contingencies beyond these accruals.
Lease Guarantees - The Company assigned its interest, and is contingently liable, under certain real estate leases. These leases have varying terms, the latest of which expires in 2032. As of SeptemberJune 25, 2022,2023, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $22.4$21.9 million. The present value of these potential payments discounted at the Company’s incremental borrowing rate as of SeptemberJune 25, 20222023 was approximately $15.7$16.5 million. In the event of default, the indemnity clauses in the Company’s purchase and sale agreements generally govern its ability to pursue and recover damages incurred. As of SeptemberJune 25, 20222023 and December 26, 2021,25, 2022, the Company’s recorded contingent lease liability was $7.5$5.6 million and $8.7$6.2 million, respectively.
Royalty Termination - In August 2021, wholly-owned subsidiaries of the Company entered into the Purchase and Sale of Royalty Payment Stream and Termination of Royalty Agreement (the “Royalty Termination Agreement”) with the Carrabba’s Italian Grill founders (the “Carrabba’s Founders”), pursuant to which the Company’s obligation to pay future royalties on U.S. Carrabba’s Italian Grill restaurant sales and lump sum royalty fees on Carrabba’s Italian Grill (and Abbraccio) restaurants opened outside the U.S. was terminated. Upon execution of the Royalty Termination Agreement, the Company made a cash payment of $61.9 million to the Carrabba’s Founders, which was recorded in Other restaurant operating expense in its Consolidated Statements of Operations and Comprehensive Income during the thirteen weeks ended September 26, 2021.
16.14. Segment Reporting
The following is a summary of reporting segments:
| | | | | | | | | | | | | | |
REPORTABLE SEGMENT (1) | | CONCEPT | | GEOGRAPHIC LOCATION |
U.S. | | Outback Steakhouse | | United States of America |
| Carrabba’s Italian Grill | |
| Bonefish Grill | |
| Fleming’s Prime Steakhouse & Wine Bar | |
International | | Outback Steakhouse | | Brazil, Hong Kong/China |
| Carrabba’s Italian Grill (Abbraccio) | | Brazil |
_________________
(1)Includes franchise locations.
Segment accounting policies are the same as those described in Note 2 - Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 26, 2021.25, 2022. Revenues for all segments include only transactions with customers and exclude intersegment revenues. Excluded from Income from operations for U.S. and international are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses, certain insurance expenses and certain bonus expenses.
The following table is a summary of Total revenues by segment for the periods indicated:
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | (dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | (dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Total revenues | | | | | | | | |
Revenues | | Revenues | | | | | | | |
U.S. | U.S. | $ | 922,521 | | | $ | 912,733 | | | $ | 2,957,555 | | | $ | 2,820,709 | | U.S. | $ | 1,005,229 | | | $ | 998,627 | | | $ | 2,098,225 | | | $ | 2,035,034 | |
International | International | 133,242 | | | 97,730 | | | 363,905 | | | 254,593 | | International | 147,465 | | | 126,535 | | | 299,215 | | | 230,663 | |
Total revenues | Total revenues | $ | 1,055,763 | | | $ | 1,010,463 | | | $ | 3,321,460 | | | $ | 3,075,302 | | Total revenues | $ | 1,152,694 | | | $ | 1,125,162 | | | $ | 2,397,440 | | | $ | 2,265,697 | |
|
BLOOMIN’ BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
The following table is a reconciliation of segment income from operations to Income (loss) before provision (benefit) for income taxes for the periods indicated:
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | (dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | (dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Segment income from operations | Segment income from operations | | | | | | | | Segment income from operations | | | | | | | |
U.S. | U.S. | $ | 68,501 | | | $ | 47,294 | | | $ | 305,347 | | | $ | 334,326 | | U.S. | $ | 103,008 | | | $ | 104,620 | | | $ | 236,251 | | | $ | 236,846 | |
International | International | 15,849 | | | 1,412 | | | 38,859 | | | 7,419 | | International | 20,486 | | | 14,126 | | | 44,994 | | | 23,010 | |
Total segment income from operations | Total segment income from operations | 84,350 | | | 48,706 | | | 344,206 | | | 341,745 | | Total segment income from operations | 123,494 | | | 118,746 | | | 281,245 | | | 259,856 | |
Unallocated corporate operating expense | Unallocated corporate operating expense | (33,041) | | | (33,869) | | | (97,922) | | | (111,273) | | Unallocated corporate operating expense | (34,048) | | | (31,027) | | | (71,166) | | | (64,881) | |
Total income from operations | Total income from operations | 51,309 | | | 14,837 | | | 246,284 | | | 230,472 | | Total income from operations | 89,446 | | | 87,719 | | | 210,079 | | | 194,975 | |
Loss on extinguishment and modification of debt | Loss on extinguishment and modification of debt | — | | | — | | | (107,630) | | | (2,073) | | Loss on extinguishment and modification of debt | — | | | (107,630) | | | — | | | (107,630) | |
Loss on fair value adjustment of derivatives, net | Loss on fair value adjustment of derivatives, net | — | | | — | | | (17,685) | | | — | | Loss on fair value adjustment of derivatives, net | — | | | (17,685) | | | — | | | (17,685) | |
Other income, net | — | | | 5 | | | — | | | 26 | | |
| Interest expense, net | Interest expense, net | (12,696) | | | (14,245) | | | (38,877) | | | (43,863) | | Interest expense, net | (12,961) | | | (12,548) | | | (25,405) | | | (26,181) | |
Income before provision (benefit) for income taxes | $ | 38,613 | | | $ | 597 | | | $ | 82,092 | | | $ | 184,562 | | |
Income (loss) before provision for income taxes | | Income (loss) before provision for income taxes | $ | 76,485 | | | $ | (50,144) | | | $ | 184,674 | | | $ | 43,479 | |
The following table is a summary of Depreciation and amortization expense by segment for the periods indicated:
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | (dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | (dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Depreciation and amortization | Depreciation and amortization | | | | | | | | Depreciation and amortization | | | | | | | |
U.S. | U.S. | $ | 34,432 | | | $ | 33,422 | | | $ | 102,735 | | | $ | 100,645 | | U.S. | $ | 39,375 | | | $ | 33,544 | | | $ | 77,538 | | | $ | 68,303 | |
International | International | 5,882 | | | 5,842 | | | 17,438 | | | 17,128 | | International | 6,126 | | | 6,019 | | | 12,045 | | | 11,556 | |
Corporate | Corporate | 1,857 | | | 1,563 | | | 5,030 | | | 4,819 | | Corporate | 2,064 | | | 1,694 | | | 4,284 | | | 3,173 | |
Total depreciation and amortization | Total depreciation and amortization | $ | 42,171 | | | $ | 40,827 | | | $ | 125,203 | | | $ | 122,592 | | Total depreciation and amortization | $ | 47,565 | | | $ | 41,257 | | | $ | 93,867 | | | $ | 83,032 | |
|
Geographic Areas - International assets are defined as assets residing in a country other than the U.S. The following table details long-lived assets, excluding goodwill, operating lease right-of-use assets, intangible assets and deferred tax assets, by major geographic area as of the periods indicated:
| | | | | | | | | | | |
(dollars in thousands) | JUNE 25, 2023 | | DECEMBER 25, 2022 |
U.S. | $ | 945,616 | | | $ | 891,379 | |
International | | | |
Brazil | 108,791 | | | 93,972 | |
Other | 8,970 | | | 10,938 | |
Total long-lived assets | $ | 1,063,377 | | | $ | 996,289 | |
International revenues are defined as revenues generated from restaurant sales originating in a country other than the U.S. The following table details Total revenues by major geographic area for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
U.S. | $ | 1,005,229 | | | $ | 998,627 | | | $ | 2,098,225 | | | $ | 2,035,034 | |
International | | | | | | | |
Brazil | 126,245 | | | 106,505 | | | 265,239 | | | 196,605 | |
Other | 21,220 | | | 20,030 | | | 33,976 | | | 34,058 | |
Total revenues | $ | 1,152,694 | | | $ | 1,125,162 | | | $ | 2,397,440 | | | $ | 2,265,697 | |
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the related notes. Unless the context otherwise indicates, as used in this report, the term the “Company,” “we,” “us,” “our” and other similar terms mean Bloomin’ Brands, Inc. and its subsidiaries.
Cautionary Statement
This Quarterly Report on Form 10-Q (the “Report”) includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “feels,” “seeks,” “forecasts,” “projects,” “intends,” “plans,” “may,” “will,” “should,” “could” or “would” or, in each case, their negative or other variations or comparable terminology, although not all forward-looking statements are accompanied by such terms. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and industry developments may differ materially from statements made in or suggested by the forward-looking statements contained in this Report. In addition, even if our results of operations, financial condition and liquidity, and industry developments are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause actual results to differ materially from statements made or suggested by forward-looking statements include, but are not limited to, the following:
(i)Consumer reactions to public health and food safety issues;
(ii)The severity, extent and duration of the COVID-19 pandemic, its impacts on our business and results of operations, financial condition and liquidity, including any adverse impact on our stock price and on the other factors listed below, and the responses of domestic and foreign federal, state and local governments to the pandemic;
(iii)Minimum wage increases, additional mandated employee benefits and fluctuations in the cost and availability of employees;
(iii)Our ability to recruit and retain high-quality leadership, restaurant-level management and team members;
(iv)Fluctuations inEconomic conditions and their effects on consumer confidence and discretionary spending, consumer traffic, the pricecost and availability of commodities, including supplier freight chargescredit and restaurant distribution expenses, and other impacts of inflation;interest rates;
(v)Our ability to compete in the highly competitive restaurant industry with many well-established competitors and new market entrants;
(vi)Our ability to protect our information technology systems from interruption or security breach, including cyber security threats, and to protect consumer data and personal employee information;
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
(vi)(vii)Economic conditions and their effects on consumer confidence and discretionary spending, consumer traffic,Fluctuations in the costprice and availability of creditcommodities, including supplier freight charges and interest rates;
(vii)Our abilityrestaurant distribution expenses, and other impacts of inflation and our dependence on a limited number of suppliers and distributors to recruitmeet our beef, chicken and retain high-quality leadership, restaurant-level management and team members;other major product supply needs;
(viii)The severity, extent and duration of a health pandemic, its impacts on our business and results of operations, financial condition and liquidity, including any adverse impact on our stock price and on the other factors listed in this Report, and the responses of domestic and foreign federal, state and local governments to the pandemic;
(ix)Our ability to preserve and grow the reputation and value of our brands, particularly in light of changes in consumer engagement with social media platforms and limited control with respect to the operations of our franchisees;
(ix)Our ability to protect our information technology systems from interruption or security breach, including cyber security threats, and to protect consumer data and personal employee information;
(x)Dependence on a limited number of suppliers and distributors to meet our beef, chicken and other major product supply needs;
(xi)The effects of international economic, political and social conditions and legal systems on our foreign operations and on foreign currency exchange rates;
(xi)Our ability to comply with new environmental, social and governance (“ESG”) requirements or our failure to achieve any goals, targets or objectives with respect to ESG matters;
(xii)Our ability to effectively respond to changes in patterns of consumer traffic, consumer tastes and dietary habits, including by maintaining relationships with third party delivery apps and services;
(xiii)Our ability to comply with governmental laws and regulations, the costs of compliance with such laws and regulations and the effects of changes to applicable laws and regulations, including tax laws and unanticipated liabilities, and the impact of any litigation;
(xiii)Our ability to effectively respond to changes in patterns of consumer traffic, consumer tastes and dietary habits, including by maintaining relationships with third party delivery apps and services;
(xiv)Our ability to implement our remodeling, relocation and expansion plans, due to uncertainty in locating and acquiring attractive sites on acceptable terms, obtaining required permits and approvals, recruiting and training necessary personnel, obtaining adequate financing and estimating the performance of newly opened, remodeled or relocated restaurants;restaurants, and our cost savings plans to enable reinvestment in our business, due to uncertainty with respect to macroeconomic conditions and the efficiency that may be added by the actions we take;
(xv)Seasonal and periodic fluctuations in our results and the effects of significant adverse weather conditions and other disasters or unforeseen events;
(xvi)The effects of our leverage and restrictive covenants in our various credit facilities on our ability to raise additional capital to fund our operations, to make capital expenditures to invest in new or renovate restaurants and to react to changes in the economy or our industry;
(xvii)Any impairment in the carrying value of our goodwill or other intangible or long-lived assets and its effect on our financial condition and results of operations; and
(xviii)Such other factors as discussed in Part I, Item IA. Risk Factors of our Annual Report on Form 10-K for the year ended December 26, 2021.25, 2022.
Given these risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this Report speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events or developments. Comparisons of results for current and any prior
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Overview
We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of SeptemberJune 25, 2022,2023, we owned and operated 1,1761,187 full-service restaurants and off-premises only kitchens and franchised 332298 full-service restaurants and off-premises only kitchens across 47 states, Guam and 1513 countries. We have four founder-inspired concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.
Financial HighlightsOverview - Our financial highlightsoverview for the thirteen weeks ended SeptemberJune 25, 2022 include2023 includes the following:
•U.S. combined and Outback Steakhouse comparable restaurant sales of 1.4%0.8% and 2.3%0.6%, respectively;
•Increase in Total revenues of 4.5%2.4%, as compared to the thirdsecond quarter of 2021;2022;
•Operating income and restaurant-level operating margins of 4.9%7.8% and 13.1%16.4%, respectively, as compared to 1.5%7.8% and 10.3%15.5%, respectively, for the thirdsecond quarter of 2021;2022;
•Operating income of $51.3$89.4 million, as compared to $14.8$87.7 million in the thirdsecond quarter of 2021;2022; and
•Diluted earnings per share of $0.34$0.70 as compared to $0.03diluted loss per share of $(0.72) for the thirdsecond quarter of 2021.2022.
Key Financial Performance Indicators - Key measures that we use in evaluating our restaurants and assessing our business include the following:
•Average restaurant unit volumes—average sales (excluding gift card breakage)breakage and the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the brand;brand.
•Comparable restaurant sales—year-over-year comparison of the change in sales volumes (excluding gift card breakage)breakage and the benefit of value added tax exemptions in Brazil) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants;restaurants.
•System-wide sales—total restaurant sales volume for all Company-owned and franchise restaurants, regardless of ownership, to interpret the overall health of our brands;brands.
•Restaurant-level operating margin, Income from operations, Net income (loss) and Diluted earnings (loss) per share—financial measures utilized to evaluate our operating performance.
Restaurant-level operating margin is a non-GAAP financial measure widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes, overall and particularly within our two segments. Our restaurant-level operating margin is expressed as the percentage of our Restaurant sales that Food and beverage costs, Labor and other related expenses and Other restaurant operating expenses (including advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations and Comprehensive Income.Income (Loss). The following categories of our revenue and operating expenses
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
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:
(i)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;
(ii)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;
(iii)General and administrative expense which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices; and
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
(iv)Asset impairment charges and restaurant closing costs which are not reflective of ongoing restaurant performance in a period.
Restaurant-level operating margin excludes various expenses, as discussed above, that are essential to support the operations of our restaurants and may materially impact our Consolidated Statements of Operations and Comprehensive Income.Income (Loss). As a result, restaurant-level operating margin is not indicative of our consolidated results of operations and is presented exclusively as a supplement to, and not a substitute for, Net income (loss) or Income from operations. In addition, our presentation of restaurant-level operating margin may not be comparable to similarly titled measures used by other companies in our industry;industry.
•Adjusted restaurant-level operating margin, Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share—non-GAAP financial measures utilized to evaluate our operating performance.
We believe that our use of these non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies. However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur. We believe that the disclosure of these non-GAAP measures is useful to investors as they form part of the basis for how our management team and Board evaluate our operating performance, allocate resources and administer employee incentive plans.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Selected Operating Data - The table below presents the number of our full-service restaurants in operation as of the periods indicated:
| Number of restaurants (at end of the period): | Number of restaurants (at end of the period): | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | Number of restaurants (at end of the period): | JUNE 25, 2023 | | JUNE 26, 2022 |
U.S. | U.S. | | | | U.S. | | | |
Outback Steakhouse | Outback Steakhouse | | | | Outback Steakhouse | | | |
Company-owned | Company-owned | 564 | | | 564 | | Company-owned | 562 | | | 563 | |
Franchised | Franchised | 128 | | | 130 | | Franchised | 127 | | | 130 | |
Total | Total | 692 | | | 694 | | Total | 689 | | | 693 | |
Carrabba’s Italian Grill | Carrabba’s Italian Grill | | | | Carrabba’s Italian Grill | | | |
Company-owned | Company-owned | 199 | | | 199 | | Company-owned | 199 | | | 198 | |
Franchised | Franchised | 19 | | | 20 | | Franchised | 19 | | | 19 | |
Total | Total | 218 | | | 219 | | Total | 218 | | | 217 | |
Bonefish Grill | Bonefish Grill | | | | Bonefish Grill | | | |
Company-owned | Company-owned | 173 | | | 178 | | Company-owned | 170 | | | 174 | |
Franchised | Franchised | 7 | | | 7 | | Franchised | 5 | | | 7 | |
Total | Total | 180 | | | 185 | | Total | 175 | | | 181 | |
Fleming’s Prime Steakhouse & Wine Bar | Fleming’s Prime Steakhouse & Wine Bar | | | | Fleming’s Prime Steakhouse & Wine Bar | | | |
Company-owned | Company-owned | 64 | | | 64 | | Company-owned | 64 | | | 64 | |
Aussie Grill | Aussie Grill | | | | Aussie Grill | | | |
Company-owned (1) | Company-owned (1) | 5 | | | 4 | | Company-owned (1) | 7 | | | 5 | |
U.S. total | U.S. total | 1,159 | | | 1,166 | | U.S. total | 1,153 | | | 1,160 | |
International | International | | | | International | | | |
Company-owned | Company-owned | | Company-owned | |
Outback Steakhouse - Brazil (2)(1) | Outback Steakhouse - Brazil (2)(1) | 137 | | | 113 | | Outback Steakhouse - Brazil (2)(1) | 148 | | | 129 | |
| Other (3)(2) | Other (3)(2) | 33 | | | 33 | | Other (3)(2) | 36 | | | 33 | |
Franchised | Franchised | | Franchised | |
Outback Steakhouse - South Korea (1) | Outback Steakhouse - South Korea (1) | 83 | | | 77 | | Outback Steakhouse - South Korea (1) | 92 | | | 77 | |
Other (3)(2) | Other (3)(2) | 50 | | | 54 | | Other (3)(2) | 46 | | | 50 | |
International total | International total | 303 | | | 277 | | International total | 322 | | | 289 | |
System-wide total | System-wide total | 1,462 | | | 1,443 | | System-wide total | 1,475 | | | 1,449 | |
System-wide total - Company-owned | System-wide total - Company-owned | 1,175 | | | 1,155 | | System-wide total - Company-owned | 1,186 | | | 1,166 | |
System-wide total - Franchised | System-wide total - Franchised | 287 | | | 288 | | System-wide total - Franchised | 289 | | | 283 | |
|
____________________
(1)Previously presented restaurant counts as of September 26, 2021 have been adjusted to exclude off-premises only locations included in the table below.
(2)The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of AugustMay 31, 20222023 and 2021,2022, respectively, to correspond with the balance sheet dates of this subsidiary.
(3)(2)International Company-owned Other included four and two Aussie Grill locations as of SeptemberJune 25, 2023 and June 26, 2022, and September 26, 2021.respectively. International Franchised Other included three Aussie Grill locations as of SeptemberJune 25, 20222023 and SeptemberJune 26, 2021.2022.
The table below presents the number of our off-premises only kitchens in operation as of the periods indicated:
| Number of kitchens (at end of the period) (1): | Number of kitchens (at end of the period) (1): | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | Number of kitchens (at end of the period) (1): | JUNE 25, 2023 | | JUNE 26, 2022 |
U.S. | U.S. | | | | U.S. | | | |
Company-owned | Company-owned | 1 | | | 3 | | Company-owned | 1 | | | 2 | |
| International | International | | International | |
Company-owned | Company-owned | — | | | 1 | | Company-owned | — | | | 1 | |
Franchised - South Korea | Franchised - South Korea | 45 | | | 37 | | Franchised - South Korea | 9 | | | 49 | |
| System-wide total | System-wide total | 46 | | | 41 | | System-wide total | 10 | | | 52 | |
____________________
(1)Excludes virtual concepts that operate out of existing restaurants and sports venue locations.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Results of Operations
The following table sets forth the percentages of certain items in our Consolidated Statements of Operations in relation to Restaurant sales or Total revenues or Restaurant sales for the periods indicated:
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
| | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Revenues | Revenues | | | | | | | | Revenues | | | | | | | |
Restaurant sales | Restaurant sales | 98.5 | % | | 98.6 | % | | 98.5 | % | | 98.6 | % | Restaurant sales | 98.7 | % | | 98.6 | % | | 98.7 | % | | 98.5 | % |
Franchise and other revenues | Franchise and other revenues | 1.5 | | | 1.4 | | | 1.5 | | | 1.4 | | Franchise and other revenues | 1.3 | | | 1.4 | | | 1.3 | | | 1.5 | |
Total revenues | Total revenues | 100.0 | | | 100.0 | | | 100.0 | | | 100.0 | | Total revenues | 100.0 | | | 100.0 | | | 100.0 | | | 100.0 | |
Costs and expenses | Costs and expenses | | | | | | | Costs and expenses | | | | | | |
Food and beverage costs (1) | 32.0 | | | 30.5 | | | 32.3 | | | 30.0 | | |
Food and beverage (1) | | Food and beverage (1) | 30.9 | | | 32.9 | | | 31.1 | | | 32.4 | |
Labor and other related (1) | Labor and other related (1) | 29.1 | | | 29.1 | | | 28.2 | | | 28.4 | | Labor and other related (1) | 28.7 | | | 27.8 | | | 28.2 | | | 27.8 | |
Other restaurant operating (1) | Other restaurant operating (1) | 25.8 | | | 30.1 | | | 24.2 | | | 25.2 | | Other restaurant operating (1) | 24.0 | | | 23.8 | | | 23.5 | | | 23.4 | |
Depreciation and amortization | Depreciation and amortization | 4.0 | | | 4.0 | | | 3.8 | | | 4.0 | | Depreciation and amortization | 4.1 | | | 3.7 | | | 3.9 | | | 3.7 | |
General and administrative | General and administrative | 5.3 | | | 5.8 | | | 5.2 | | | 5.9 | | General and administrative | 5.5 | | | 5.3 | | | 5.4 | | | 5.2 | |
| Provision for impaired assets and restaurant closings | Provision for impaired assets and restaurant closings | 0.2 | | | 0.2 | | | 0.1 | | | 0.3 | | Provision for impaired assets and restaurant closings | 0.2 | | | * | | 0.2 | | | 0.1 | |
| Total costs and expenses | Total costs and expenses | 95.1 | | | 98.5 | | | 92.6 | | | 92.5 | | Total costs and expenses | 92.2 | | | 92.2 | | | 91.2 | | | 91.4 | |
Income from operations | Income from operations | 4.9 | | | 1.5 | | | 7.4 | | | 7.5 | | Income from operations | 7.8 | | | 7.8 | | | 8.8 | | | 8.6 | |
Loss on extinguishment and modification of debt | Loss on extinguishment and modification of debt | — | | | — | | | (3.1) | | | (0.1) | | Loss on extinguishment and modification of debt | — | | | (9.6) | | | — | | | (4.7) | |
Loss on fair value adjustment of derivatives, net | Loss on fair value adjustment of derivatives, net | — | | | — | | | (0.5) | | | — | | Loss on fair value adjustment of derivatives, net | — | | | (1.6) | | | — | | | (0.8) | |
Other income, net | — | | | * | | — | | | * | |
| Interest expense, net | Interest expense, net | (1.2) | | | (1.4) | | | (1.3) | | | (1.4) | | Interest expense, net | (1.2) | | | (1.1) | | | (1.1) | | | (1.2) | |
Income before provision (benefit) for income taxes | 3.7 | | | 0.1 | | | 2.5 | | | 6.0 | | |
Provision (benefit) for income taxes | 0.6 | | | (0.4) | | | 1.0 | | | 0.8 | | |
Net income | 3.1 | | | 0.5 | | | 1.5 | | | 5.2 | | |
Income (loss) before provision for income taxes | | Income (loss) before provision for income taxes | 6.6 | | | (4.5) | | | 7.7 | | | 1.9 | |
Provision for income taxes | | Provision for income taxes | 0.5 | | | 1.0 | | | 0.9 | | | 1.2 | |
Net income (loss) | | Net income (loss) | 6.1 | | | (5.5) | | | 6.8 | | | 0.7 | |
Less: net income attributable to noncontrolling interests | Less: net income attributable to noncontrolling interests | 0.1 | | | 0.2 | | | 0.2 | | | 0.2 | | Less: net income attributable to noncontrolling interests | 0.2 | | | 0.2 | | | 0.1 | | | 0.2 | |
Net income attributable to Bloomin’ Brands | 3.0 | % | | 0.3 | % | | 1.3 | % | | 5.0 | % | |
Net income (loss) attributable to Bloomin’ Brands | | Net income (loss) attributable to Bloomin’ Brands | 5.9 | % | | (5.7) | % | | 6.7 | % | | 0.5 | % |
|
________________
(1)As a percentage of Restaurant sales.
*Less than 1/10th of one percent of Total revenues.revenues
REVENUES
Restaurant sales
Sales -
Following is a summary of the change in Restaurant sales for the periods indicated:
| | | | | | | | | | | |
(dollars in millions) | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
For the periods ended September 26, 2021 | $ | 996.7 | | | $ | 3,031.4 | |
Change from: | | | |
Comparable restaurant sales (1) | 34.9 | | | 212.6 | |
Restaurant openings (1) | 18.0 | | | 46.0 | |
Restaurant closures (1) | (8.2) | | | (24.7) | |
Effect of foreign currency translation | (1.0) | | | 7.6 | |
| | | |
For the periods ended September 25, 2022 | $ | 1,040.4 | | | $ | 3,272.9 | |
| | | |
| | | |
| | | |
____________________ | | | | | | | | | | | |
(dollars in millions) | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
For the periods ended June 26, 2022 | $ | 1,108.9 | | | $ | 2,232.5 | |
Change from: | | | |
Restaurant openings (1) | 18.0 | | | 37.6 | |
Comparable restaurant sales (1) | 11.9 | | | 87.2 | |
Brazil value added tax exemptions (2) | 9.6 | | | 19.2 | |
Restaurant closures (1) | (6.6) | | | (12.0) | |
Effect of foreign currency translation | (4.5) | | | 1.1 | |
| | | |
For the periods ended June 25, 2023 | $ | 1,137.3 | | | $ | 2,365.6 | |
| | | |
| | | |
| | | |
________________(1)Summation of quarterly changes for restaurant openings, closures and comparable restaurant sales will not total to annual amounts as the restaurants that meet the definition of each will differ each period based on when the restaurant opened or closed.
(2)See Note 12 - Income Taxes of the Notes to Consolidated Financial Statements for details regarding value added tax exemptions in connection with Brazil tax legislation.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
The increase in Restaurant sales during the thirteen weeks ended SeptemberJune 25, 2022 was primarily due to higher comparable restaurant sales and the opening of 42 new restaurants not included in our comparable restaurant sales base. The increase in Restaurant sales was partially offset by the closure of 22 restaurants since June 27, 2021.
The increase in Restaurant sales during the thirty-nine weeks ended September 25, 20222023 was primarily due to: (i) higher comparable restaurant sales, (ii) the opening of 5450 new restaurants not included in our comparable restaurant sales base, (ii) higher comparable restaurant sales, primarily driven by increases in menu pricing, and (iii) value added tax exemptions in Brazil. The increase was partially offset by the closure of 18 restaurants since March 27, 2022 and the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar.
The increase in Restaurant sales during the twenty-six weeks ended June 25, 2023 was primarily due to: (i) higher comparable restaurant sales, primarily driven by increases in menu pricing, (ii) the opening of 55 new restaurants not included in our comparable restaurant sales base and (iii) value added tax exemptions in Brazil. The increase in Restaurant sales was partially offset by the closure of 2524 restaurants since December 27, 2020.26, 2021.
Average Restaurant Unit Volumes and Operating Weeks
Following is a summary of the average restaurant unit volumes and operating weeks for the periods indicated:
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
| | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | | JUNE 25, 2023 | | JUNE 26, 2022 | | | JUNE 25, 2023 | | JUNE 26, 2022 | |
Average restaurant unit volumes (weekly): | Average restaurant unit volumes (weekly): | | | | | | | | | | Average restaurant unit volumes (weekly): | | | | | | | | | |
U.S. | U.S. | | | | | U.S. | | | | |
Outback Steakhouse | Outback Steakhouse | $ | 72,834 | | | $ | 70,849 | | | | $ | 77,106 | | | $ | 74,163 | | | Outback Steakhouse | $ | 78,321 | | | $ | 77,941 | | | | $ | 81,421 | | | $ | 79,246 | | |
Carrabba’s Italian Grill | Carrabba’s Italian Grill | $ | 62,010 | | | $ | 61,518 | | | | $ | 65,309 | | | $ | 62,910 | | | Carrabba’s Italian Grill | $ | 68,290 | | | $ | 66,016 | | | | $ | 70,489 | | | $ | 66,954 | | |
Bonefish Grill | Bonefish Grill | $ | 57,998 | | | $ | 57,844 | | | | $ | 62,811 | | | $ | 58,626 | | | Bonefish Grill | $ | 64,671 | | | $ | 64,113 | | | | $ | 67,427 | | | $ | 65,193 | | |
Fleming’s Prime Steakhouse & Wine Bar | Fleming’s Prime Steakhouse & Wine Bar | $ | 97,053 | | | $ | 95,777 | | | | $ | 109,112 | | | $ | 94,064 | | | Fleming’s Prime Steakhouse & Wine Bar | $ | 109,882 | | | $ | 112,900 | | | | $ | 115,754 | | | $ | 115,141 | | |
International | International | | | | | International | | | | |
Outback Steakhouse - Brazil (1) | Outback Steakhouse - Brazil (1) | $ | 60,711 | | | $ | 49,841 | | | | $ | 58,722 | | | $ | 40,848 | | | Outback Steakhouse - Brazil (1) | $ | 58,306 | | | $ | 61,210 | | | | $ | 60,670 | | | $ | 57,645 | | |
| Operating weeks: | Operating weeks: | | | | | | | Operating weeks: | | | | | | |
U.S. | U.S. | | | | | U.S. | | | | |
Outback Steakhouse | Outback Steakhouse | 7,331 | | | 7,344 | | | | 21,968 | | | 22,089 | | | Outback Steakhouse | 7,321 | | | 7,317 | | | | 14,679 | | | 14,637 | | |
Carrabba’s Italian Grill | Carrabba’s Italian Grill | 2,576 | | | 2,587 | | | | 7,741 | | | 7,761 | | | Carrabba’s Italian Grill | 2,587 | | | 2,578 | | | | 5,174 | | | 5,165 | | |
Bonefish Grill | Bonefish Grill | 2,253 | | | 2,327 | | | | 6,807 | | | 7,004 | | | Bonefish Grill | 2,218 | | | 2,269 | | | | 4,466 | | | 4,554 | | |
Fleming’s Prime Steakhouse & Wine Bar | Fleming’s Prime Steakhouse & Wine Bar | 832 | | | 832 | | | | 2,496 | | | 2,489 | | | Fleming’s Prime Steakhouse & Wine Bar | 845 | | | 832 | | | | 1,690 | | | 1,664 | | |
International | International | | | | | International | | | | |
Outback Steakhouse - Brazil | Outback Steakhouse - Brazil | 1,745 | | | 1,485 | | | | 4,971 | | | 4,362 | | | Outback Steakhouse - Brazil | 1,891 | | | 1,644 | | | | 3,679 | | | 3,226 | | |
|
____________________
(1)Translated at average exchange rates of 5.185.06 and 5.154.89 for the thirteen weeks ended SeptemberJune 25, 20222023 and SeptemberJune 26, 2021,2022, respectively, and 5.165.14 and 5.275.15 for the thirty-ninetwenty-six weeks ended SeptemberJune 25, 2023 and June 26, 2022, and September 26, 2021, respectively. Excludes the benefit of the Brazil value added tax exemptions discussed in Note 12 - Income Taxes of the Notes to Consolidated Financial Statements.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Comparable Restaurant Sales, Traffic and Average Check Per Person Increases (Decreases)
Following is a summary of comparable restaurant sales, traffic and average check per person increases (decreases) for the periods indicated:
| | | | THIRTEEN WEEKS ENDED | | | THIRTY-NINE WEEKS ENDED | | | THIRTEEN WEEKS ENDED | | | TWENTY-SIX WEEKS ENDED |
| | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | | JUNE 25, 2023 | | JUNE 26, 2022 | | | JUNE 25, 2023 | | JUNE 26, 2022 |
| Year over year percentage change: | Year over year percentage change: | | | | | | | | | | Year over year percentage change: | | | | | | | | | |
Comparable restaurant sales (stores open 18 months or more): | | | | | |
Comparable restaurant sales (restaurants open 18 months or more): | | Comparable restaurant sales (restaurants open 18 months or more): | | | | |
U.S. (1) | U.S. (1) | | | | | U.S. (1) | | | | |
Outback Steakhouse | Outback Steakhouse | | 2.3 | % | | 18.3 | % | | | 3.4 | % | | 25.3 | % | Outback Steakhouse | | 0.6 | % | | (1.1) | % | | | 2.8 | % | | 3.9 | % |
Carrabba’s Italian Grill | Carrabba’s Italian Grill | | 0.7 | % | | 28.8 | % | | | 3.6 | % | | 35.1 | % | Carrabba’s Italian Grill | | 3.5 | % | | (1.0) | % | | | 5.1 | % | | 5.0 | % |
Bonefish Grill | Bonefish Grill | | (0.9) | % | | 36.6 | % | | | 5.9 | % | | 41.2 | % | Bonefish Grill | | 0.5 | % | | (1.1) | % | | | 3.4 | % | | 9.2 | % |
Fleming’s Prime Steakhouse & Wine Bar | Fleming’s Prime Steakhouse & Wine Bar | | 1.3 | % | | 59.6 | % | | | 15.7 | % | | 56.9 | % | Fleming’s Prime Steakhouse & Wine Bar | | (2.5) | % | | 6.0 | % | | | 0.4 | % | | 23.1 | % |
Combined U.S. | Combined U.S. | | 1.4 | % | | 25.5 | % | | | 4.8 | % | | 31.4 | % | Combined U.S. | | 0.8 | % | | (0.4) | % | | | 3.1 | % | | 6.4 | % |
International | International | | | | | International | | | | |
Outback Steakhouse - Brazil (2) | Outback Steakhouse - Brazil (2) | | 30.1 | % | | 109.8 | % | | | 48.7 | % | | 29.4 | % | Outback Steakhouse - Brazil (2) | | 4.1 | % | | 95.7 | % | | | 9.1 | % | | 61.1 | % |
| | Traffic: | Traffic: | | | | | | Traffic: | | | | | | |
U.S. | U.S. | | | | | U.S. | | | | |
Outback Steakhouse | Outback Steakhouse | | (6.8) | % | | 14.8 | % | | | (5.5) | % | | 19.6 | % | Outback Steakhouse | | (5.4) | % | | (8.7) | % | | | (3.5) | % | | (5.0) | % |
Carrabba’s Italian Grill | Carrabba’s Italian Grill | | (8.4) | % | | 27.1 | % | | | (4.4) | % | | 27.0 | % | Carrabba’s Italian Grill | | (0.8) | % | | (7.5) | % | | | 0.5 | % | | (2.5) | % |
Bonefish Grill | Bonefish Grill | | (8.3) | % | | 25.6 | % | | | (3.3) | % | | 23.4 | % | Bonefish Grill | | (4.4) | % | | (8.6) | % | | | (2.0) | % | | (1.0) | % |
Fleming’s Prime Steakhouse & Wine Bar | Fleming’s Prime Steakhouse & Wine Bar | | (4.8) | % | | 48.4 | % | | | 5.8 | % | | 38.1 | % | Fleming’s Prime Steakhouse & Wine Bar | | (2.3) | % | | (2.9) | % | | | (1.1) | % | | 11.1 | % |
Combined U.S. | Combined U.S. | | (7.2) | % | | 19.3 | % | | | (4.7) | % | | 21.9 | % | Combined U.S. | | (4.2) | % | | (8.3) | % | | | (2.4) | % | | (3.5) | % |
International | International | | | | | International | | | | |
Outback Steakhouse - Brazil | Outback Steakhouse - Brazil | | 16.7 | % | | 62.5 | % | | | 32.1 | % | | 25.2 | % | Outback Steakhouse - Brazil | | (4.0) | % | | 57.8 | % | | | (0.9) | % | | 42.0 | % |
| | Average check per person (3): | Average check per person (3): | | | | | Average check per person (3): | | | | |
U.S. | U.S. | | | | | U.S. | | | | |
Outback Steakhouse | Outback Steakhouse | | 9.1 | % | | 3.5 | % | | | 8.9 | % | | 5.7 | % | Outback Steakhouse | | 6.0 | % | | 7.6 | % | | | 6.3 | % | | 8.9 | % |
Carrabba’s Italian Grill | Carrabba’s Italian Grill | | 9.1 | % | | 1.7 | % | | | 8.0 | % | | 8.1 | % | Carrabba’s Italian Grill | | 4.3 | % | | 6.5 | % | | | 4.6 | % | | 7.5 | % |
Bonefish Grill | Bonefish Grill | | 7.4 | % | | 11.0 | % | | | 9.2 | % | | 17.8 | % | Bonefish Grill | | 4.9 | % | | 7.5 | % | | | 5.4 | % | | 10.2 | % |
Fleming’s Prime Steakhouse & Wine Bar | Fleming’s Prime Steakhouse & Wine Bar | | 6.1 | % | | 11.2 | % | | | 9.9 | % | | 18.8 | % | Fleming’s Prime Steakhouse & Wine Bar | | (0.2) | % | | 8.9 | % | | | 1.5 | % | | 12.0 | % |
Combined U.S. | Combined U.S. | | 8.6 | % | | 6.2 | % | | | 9.5 | % | | 9.5 | % | Combined U.S. | | 5.0 | % | | 7.9 | % | | | 5.5 | % | | 9.9 | % |
International | International | | | | | International | | | | |
Outback Steakhouse - Brazil | Outback Steakhouse - Brazil | | 13.1 | % | | 45.5 | % | | | 16.5 | % | | 5.5 | % | Outback Steakhouse - Brazil | | 8.5 | % | | 37.3 | % | | | 10.0 | % | | 19.2 | % |
|
____________________
(1)Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.
(2)Includes trading day impact from calendar period reporting. Excludes the effect of fluctuations in foreign currency rates. Includes trading day impact from calendar period reporting.rates and the benefit of the Brazil value added tax exemptions discussed in Note 12 - Income Taxes of the Notes to Consolidated Financial Statements.
(3)Includes the impact of menu pricing changes, product mix and discounts.
Franchise and other revenues
The thirteen weeks ended December 25, 2022 will include the impact of Hurricane Ian which is estimated to be 0.3% to U.S. comparable sales and approximately $0.03 to diluted earnings per share, inclusive of storm-related costs. | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in millions) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 | | |
Franchise revenues | $ | 12.6 | | | $ | 12.6 | | | $ | 26.1 | | | $ | 26.0 | | | |
Other revenues | 2.8 | | | 3.6 | | | 5.8 | | | 7.2 | | | |
Franchise and other revenues | $ | 15.4 | | | $ | 16.2 | | | $ | 31.9 | | | $ | 33.2 | | | |
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Franchise and other revenues
| | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(dollars in millions) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | |
Franchise revenues | $ | 11.8 | | | $ | 12.9 | | | $ | 37.8 | | | $ | 31.9 | | | |
Other revenues (1) | 3.6 | | | 0.8 | | | 10.8 | | | 12.0 | | | |
Franchise and other revenues | $ | 15.4 | | | $ | 13.7 | | | $ | 48.6 | | | $ | 43.9 | | | |
____________________
(1)The thirteen and thirty-nine weeks ended September 26, 2021 include an adjustment of $(3.2) million to reduce our initial recorded estimate and net $3.1 million benefit, respectively, from the recognition of recoverable PIS and COFINS taxes within other revenues recognized in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base for prior years.
COSTS AND EXPENSES
Food and beverage costs
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED | |
(dollars in millions) | (dollars in millions) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE | (dollars in millions) | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE | | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE |
Food and beverage costs | $ | 332.9 | | | $ | 304.3 | | | | | $ | 1,056.8 | | | $ | 908.3 | | | | |
Food and beverage | | Food and beverage | $ | 351.2 | | | $ | 364.5 | | | | | $ | 735.4 | | | $ | 723.8 | | | |
% of Restaurant sales | % of Restaurant sales | 32.0 | % | | 30.5 | % | | 1.5 | % | | 32.3 | % | | 30.0 | % | | 2.3 | % | % of Restaurant sales | 30.9 | % | | 32.9 | % | | (2.0) | % | | 31.1 | % | | 32.4 | % | | (1.3) | % |
Food and beverage costs increaseddecreased as a percentage of Restaurant sales during the thirteen weeks ended SeptemberJune 25, 20222023 as compared to the thirteen weeks ended SeptemberJune 26, 20212022 primarily due to 3.5% from commodity inflation and 0.5% from product mix. These increases were partially offset by decreases as a percentage of Restaurant sales of 2.2%2.4% from increases in average check per person primarily driven by an increase in menu pricing and 0.3% from the impact of certain cost saving initiatives.
Food and beverage costs increased as a percentage of Restaurant sales during the thirty-nine weeks ended September 25, 2022as compared to the thirty-nine weeks ended September 26, 2021 primarily due to 4.0% from commodity inflation, partially offset by a decrease as a percentage of Restaurant sales of 1.8% from increases in average check per person, primarily driven by an increase in menu pricing.
In aggregate, menu pricing increases during 2022 have trailed the current level of commodity inflation.
Labor and other related expenses
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | | | THIRTY-NINE WEEKS ENDED | | |
(dollars in millions) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE |
Labor and other related | $ | 303.2 | | | $ | 290.2 | | | | | $ | 924.5 | | | $ | 859.9 | | | |
% of Restaurant sales | 29.1 | % | | 29.1 | % | | — | % | | 28.2 | % | | 28.4 | % | | (0.2) | % |
Labor and other related expenses were flat as a percentage of Restaurant sales during the thirteen weeks ended September 25, 2022 as compared to the thirteen weeks ended September 26, 2021 primarily due to decreases of 1.7% from leveraging increased restaurant sales due to increases in average check per person and lapping the impact of COVID-19, primarily in Brazil. These decreases were partially offset by an increase as a percentage of Restaurant sales of 1.8%0.9% from higher labor costs primarily due to wage ratecommodity inflation.
LaborFood and other related expensesbeverage costs decreased as a percentage of Restaurant sales during the thirty-ninetwenty-six weeks ended SeptemberJune 25, 20222023 as compared to the thirty-ninetwenty-six weeks ended SeptemberJune 26, 20212022 primarily due to 2.0%2.3% from increases in average check per person driven by an increase in menu pricing and 0.3% from the impact of certain cost saving initiatives. These decreases were partially offset by an increase as a percentage of Restaurant sales of 1.5% from commodity inflation.
Labor and other related expenses
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | | | TWENTY-SIX WEEKS ENDED | | |
(dollars in millions) | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE | | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE |
Labor and other related | $ | 325.9 | | | $ | 308.8 | | | | | $ | 667.5 | | | $ | 621.3 | | | |
% of Restaurant sales | 28.7 | % | | 27.8 | % | | 0.9 | % | | 28.2 | % | | 27.8 | % | | 0.4 | % |
Labor and other related expenses increased as a percentage of Restaurant sales during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 primarily due to an increase of 1.9% from higher hourly and field management labor costs, primarily due to wage rate inflation. This increase was partially offset by decreases as a percentage of Restaurant sales of 1.0% from leveraging increased comparable restaurant sales and 0.2% from the impact of certain cost saving initiatives.
Labor and other related expenses increased as a percentage of Restaurant sales during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 primarily due to an increase of 1.7% from higher hourly and field management labor costs, primarily due to wage rate inflation. This increase was partially offset by decreases as a percentage of Restaurant sales of 1.2% from leveraging increased comparable restaurant sales and 0.2% from the impact of certain cost saving initiatives.
Other restaurant operating expenses
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | | | TWENTY-SIX WEEKS ENDED | | |
(dollars in millions) | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE | | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE |
Other restaurant operating | $ | 273.3 | | | $ | 263.5 | | | | | $ | 556.3 | | | $ | 522.6 | | | |
% of Restaurant sales | 24.0 | % | | 23.8 | % | | 0.2 | % | | 23.5 | % | | 23.4 | % | | 0.1 | % |
Other restaurant operating expenses increased as a percentage of Restaurant sales during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 primarily due to 1.1% from higher operating expenses including utilities, primarily due to inflation, and 0.3% from higher advertising expense. These increases were offset by decreases as a percentage of Restaurant sales of 0.7% from leveraging increased comparable restaurant sales and 0.2% from the impact of certain cost saving initiatives.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
leveraging increased restaurant sales due to increases in average check per person and lapping the impact of COVID-19, primarily in Brazil. These decreases were offset by an increase as a percentage of Restaurant sales of 2.0% from higher labor cost primarily due to wage rate inflation.
Other restaurant operating expenses
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | | | THIRTY-NINE WEEKS ENDED | | |
(dollars in millions) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE |
Other restaurant operating | $ | 267.9 | | | $ | 299.8 | | | | | $ | 790.6 | | | $ | 762.5 | | | |
% of Restaurant sales | 25.8 | % | | 30.1 | % | | (4.3) | % | | 24.2 | % | | 25.2 | % | | (1.0) | % |
During the thirteen weeks ended September 26, 2021, we entered into the Royalty Termination Agreement with the Carrabba’s Founders for $61.9 million in cash. See Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional details.
Other restaurant operating expenses decreasedincreased as a percentage of Restaurant sales during the thirteentwenty-six weeks ended SeptemberJune 25, 20222023 as compared to the thirteentwenty-six weeks ended SeptemberJune 26, 20212022 primarily due to 6.2% from lapping the Carrabba’s Italian Grill royalty termination and 0.9% from leveraging increased restaurant sales due to lapping the impact of COVID-19, primarily in Brazil, and increases in average check per person. These decreases were partially offset by increases as a percentage of Restaurant sales of 1.5%1.3% from higher operating expenses including utilities, primarily due to inflation, and 1.1%0.3% from higher advertising expense.
Other restaurant operating expenses decreased as a percentage of Restaurant sales during the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 primarily due to 2.0% from lapping the Carrabba’s Italian Grill royalty termination, and 1.5% from leveraging increased restaurant sales due to These increases in average check per person and lapping the impact of COVID-19, primarily in Brazil. These decreases were partially offset by increasesdecreases as a percentage of Restaurant sales of 1.5%1.1% from higher operating expenses including utilities,leveraging increased comparable restaurant sales and 0.2% from the impact of certain cost saving initiatives.
Depreciation and amortization
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | | | TWENTY-SIX WEEKS ENDED | | |
(dollars in millions) | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE | | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE |
Depreciation and amortization | $ | 47.6 | | | $ | 41.3 | | | $ | 6.3 | | | $ | 93.9 | | | $ | 83.0 | | | $ | 10.9 | |
| | | | | | | | | | | |
Depreciation and amortization increased during the thirteen and twenty-six weeks ended June 25, 2023 as compared to the thirteen and twenty-six weeks ended June 26, 2022 primarily due to inflation,additional depreciation expense related to technology projects and 0.8% from higher advertising expense.restaurant development.
General and administrative
General and administrative expense includes salaries and benefits, management incentive programs, related payroll tax and benefits, other employee-related costs and professional services. Following is a summary of the change in General and administrative expense for the periods indicated:
| (dollars in millions) | (dollars in millions) | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | (dollars in millions) | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
For the periods ended September 26, 2021 | $ | 58.9 | | | $ | 182.6 | | |
For the periods ended June 26, 2022 | | For the periods ended June 26, 2022 | $ | 59.2 | | | $ | 117.9 | |
Change from: | Change from: | | Change from: | |
| Employee stock-based compensation | (3.6) | | | (8.3) | | |
Incentive compensation | Incentive compensation | (2.8) | | | (10.4) | | Incentive compensation | 2.2 | | | 3.7 | |
Compensation, benefits and payroll tax | | Compensation, benefits and payroll tax | 0.8 | | | 3.4 | |
Travel and entertainment | | Travel and entertainment | 0.5 | | | 1.7 | |
Legal and professional fees | | Legal and professional fees | 0.3 | | | 3.3 | |
| Compensation, benefits and payroll tax | 2.3 | | | 6.0 | | |
Travel and entertainment | 1.1 | | | 4.1 | | |
| Other | 0.2 | | | — | | |
For the periods ended September 25, 2022 | $ | 56.1 | | | $ | 174.0 | | |
| | Other | | Other | 0.4 | | | (0.8) | |
For the periods ended June 25, 2023 | | For the periods ended June 25, 2023 | $ | 63.4 | | | $ | 129.2 | |
|
Income from operations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | | | TWENTY-SIX WEEKS ENDED | | |
(dollars in millions) | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE | | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE |
Income from operations | $ | 89.4 | | | $ | 87.7 | | | $ | 1.7 | | | $ | 210.1 | | | $ | 195.0 | | | $ | 15.1 | |
% of Total revenues | 7.8 | % | | 7.8 | % | | — | % | | 8.8 | % | | 8.6 | % | | 0.2 | % |
The increase in Income from operations generated during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 was primarily due to: (i) leveraging increased comparable restaurant sales, (ii) the impact of certain cost saving initiatives and (iii) value added tax exemptions in Brazil. These increases were partially offset by: (i) higher labor costs, primarily due to wage rate inflation, (ii) higher operating expenses including utilities, primarily due to inflation, (iii) commodity inflation and (iv) higher depreciation and advertising expense.
The increase in Income from operations generated during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 was primarily due to: (i) leveraging increased comparable restaurant sales, (ii) the impact of certain cost saving initiatives and (iii) value added tax exemptions in Brazil. These increases were partially offset by: (i) higher labor costs, primarily due to wage rate inflation, (ii) commodity inflation, (iii)
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
higher operating expenses including utilities, primarily due to inflation, and (iv) higher depreciation and advertising expense.
Operating income margin during the thirteen and twenty-six weeks ended June 25, 2023 includes net increases of approximately 0.4% and 0.3%, respectively, attributable to exemptions from Brazil federal value added taxes (PIS and COFINS) provided by Brazil tax legislation. See Note 12 - Income Taxes of the Notes to Consolidated Financial Statements for further discussion regarding Brazil tax legislation.
Loss on extinguishment and modification of debt and Loss on fair value adjustment of derivatives, net
In connection with the partial repurchase of our 2025 Notes, we recognized a loss on extinguishment of debt of $104.7 million and a loss on fair value adjustment of derivatives, net, of $17.7 million during the thirteen weeks ended June 26, 2022.
Provision for income taxes
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | | | TWENTY-SIX WEEKS ENDED | | |
(dollars in millions) | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE | | JUNE 25, 2023 | | JUNE 26, 2022 | | CHANGE |
Income (loss) before provision for income taxes | $ | 76.5 | | | $ | (50.1) | | | $ | 126.6 | | | $ | 184.7 | | | $ | 43.5 | | | $ | 141.2 | |
Provision for income taxes | $ | 6.5 | | | $ | 11.5 | | | $ | (5.0) | | | $ | 21.2 | | | $ | 27.5 | | | $ | (6.3) | |
Effective income tax rate | 8.5 | % | | (23.0) | % | | 31.5 | % | | 11.5 | % | | 63.2 | % | | (51.7) | % |
The effective income tax rate for the thirteen weeks ended June 25, 2023 changed by 31.5 percentage points as compared to the thirteen weeks ended June 26, 2022. This change is primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase which, relative to the Loss before provision for income taxes during the thirteen weeks ended June 26, 2022, resulted in a negative effective income tax rate. This change was partially offset by a reduction in the effective income tax rate during the thirteen weeks ended June 25, 2023 from benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34% to 0% and the revaluation of Brazilian deferred tax assets and liabilities as a result of the May 2023 Brazil tax legislation.
The effective income tax rate for the twenty-six weeks ended June 25, 2023 decreased by 51.7 percentage points as compared to the twenty-six weeks ended June 26, 2022. The decrease was primarily due to the benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34% to 0% for the twenty-six weeks ended June 25, 2023, and the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the twenty-six weeks ended June 26, 2022.
See Note 12 - Income Taxes of the Notes to Consolidated Financial Statements for further discussion regarding Brazil tax legislation.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Provision for impaired assets and restaurant closings
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | | | THIRTY-NINE WEEKS ENDED | | |
(dollars in millions) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE |
Provision for impaired assets and restaurant closings | $ | 2.1 | | | $ | 1.6 | | | $ | 0.5 | | | $ | 4.1 | | | $ | 9.0 | | | $ | (4.9) | |
Impairment and closure charges during the periods presented resulted primarily from locations identified for closure.
Income from operations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | | | THIRTY-NINE WEEKS ENDED | | |
(dollars in millions) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE |
Income from operations | $ | 51.3 | | | $ | 14.8 | | | $ | 36.5 | | | $ | 246.3 | | | $ | 230.5 | | | $ | 15.8 | |
% of Total revenues | 4.9 | % | | 1.5 | % | | 3.4 | % | | 7.4 | % | | 7.5 | % | | (0.1) | % |
The increase in Income from operations generated during the thirteen weeks ended September 25, 2022 as compared to the thirteen weeks ended September 26, 2021 was primarily due to: (i) lapping the Carrabba’s Italian Grill royalty termination, (ii) increases in average check per person, (iii) lapping the impact of COVID-19, primarily in Brazil, and (iv) lower share-based and incentive compensation. These increases were partially offset by: (i) commodity inflation, (ii) higher labor cost primarily due to wage rate inflation, (iii) higher operating expenses including utilities, primarily due to inflation, and (iv) an increase in advertising costs.
The increase in Income from operations generated during the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 was primarily due to: (i) increases in average check per person, (ii) lapping the Carrabba’s Italian Grill royalty termination, (iii) lapping the impact of COVID-19, primarily in Brazil, and (iv) lower share-based and incentive compensation. These increases were partially offset by: (i) commodity inflation, (ii) higher labor cost primarily due to wage rate inflation, (iii) higher operating expenses including utilities, primarily due to inflation, and (iv) an increase in advertising costs.
Loss on extinguishment and modification of debt and Loss on fair value adjustment of derivatives, net
In connection with the 2025 Notes Partial Repurchase, we recognized a loss on extinguishment of debt of $104.7 million and a loss on fair value adjustment of derivatives, net, of $17.7 million during the thirty-nine weeks ended September 25, 2022.
See Note 8 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details.
Interest expense, net
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | | | THIRTY-NINE WEEKS ENDED | | |
(dollars in millions) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE |
Interest expense, net | $ | 12.7 | | | $ | 14.2 | | | $ | (1.5) | | | $ | 38.9 | | | $ | 43.9 | | | $ | (5.0) | |
The decrease in Interest expense, net for the thirteen weeks ended September 25, 2022 as compared to the thirteen weeks ended September 26, 2021 was primarily due to: (i) the 2025 Notes Partial Repurchase in May 2022, (ii) repayment of the Term loan A in April 2022 and (iii) the impact of our April 2021 interest rate swap terminations. These decreases were partially offset by increases in interest expense from higher balances and interest rates on revolver debt.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
The decrease in Interest expense, net for the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 was primarily due to the repayment of Term loan A in April 2022 and the 2025 Notes Partial Repurchase in May 2022. These decreases were partially offset by increases from the issuance of the 2029 Notes in April 2021.
Provision (benefit) for income taxes
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | | | THIRTY-NINE WEEKS ENDED | | |
(dollars in millions) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | CHANGE |
Income before provision (benefit) for income taxes | $ | 38.6 | | | $ | 0.6 | | | $ | 38.0 | | | $ | 82.1 | | | $ | 184.6 | | | $ | (102.5) | |
Provision (benefit) for income taxes | $ | 5.6 | | | $ | (4.5) | | | $ | 10.1 | | | $ | 33.0 | | | $ | 24.8 | | | $ | 8.2 | |
Effective income tax rate | 14.4 | % | | (NM) | | NM | | 40.2 | % | | 13.5 | % | | 26.7 | % |
________________
NM Not meaningful.
The provision for income taxes for the thirteen weeks ended September 25, 2022 increased primarily due to higher pre-tax book income across our U.S. and international subsidiaries. The benefit for income taxes for the thirteen weeks ended September 26, 2021 includes the impact of changes to the estimate of the forecasted full-year effective tax rate relative to prior quarters in 2021.
The effective income tax rate for the thirty-nine weeks ended September 25, 2022 increased by 26.7 percentage points as compared to the thirty-nine weeks ended September 26, 2021. The increase was primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the thirty-nine weeks ended September 25, 2022.
SEGMENT PERFORMANCE
The following is a summary of reporting segments:
| | | | | | | | | | | | | | |
REPORTABLE SEGMENT (1) | | CONCEPT | | GEOGRAPHIC LOCATION |
U.S. | | Outback Steakhouse | | United States of America |
| Carrabba’s Italian Grill | |
| Bonefish Grill | |
| Fleming’s Prime Steakhouse & Wine Bar | |
International | | Outback Steakhouse | | Brazil, Hong Kong/China |
| Carrabba’s Italian Grill (Abbraccio) | | Brazil |
_________________
(1)Includes franchise locations.
Revenues for both segments include only transactions with customers and exclude intersegment revenues. Excluded from Income from operations for U.S. and international are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses, certain insurance expenses and certain bonus expenses.
Refer to Note 1614 - Segment Reporting of the Notes to Consolidated Financial Statements for reconciliations of segment income from operations to the consolidated operating results.
Restaurant-level operating margin is widely regarded in the industry as a useful non-GAAP measure to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
purposes, overall and particularly within our two segments. See the Overview-Key Financial Performance Indicators and Non-GAAP Financial Measures sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional details regarding the calculation of restaurant-level operating margin.
U.S. Segment
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED | |
(dollars in thousands) | (dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | (dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 | |
Revenues | Revenues | | | | | | | | Revenues | | | | | | | | |
Restaurant sales | Restaurant sales | $ | 910,679 | | | $ | 898,790 | | | $ | 2,920,241 | | | $ | 2,789,142 | | Restaurant sales | $ | 993,438 | | | $ | 985,927 | | | $ | 2,074,007 | | | $ | 2,009,562 | | |
Franchise and other revenues | Franchise and other revenues | 11,842 | | | 13,943 | | | 37,314 | | | 31,567 | | Franchise and other revenues | 11,791 | | | 12,700 | | | 24,218 | | | 25,472 | | |
Total revenues | Total revenues | $ | 922,521 | | | $ | 912,733 | | | $ | 2,957,555 | | | $ | 2,820,709 | | Total revenues | $ | 1,005,229 | | | $ | 998,627 | | | $ | 2,098,225 | | | $ | 2,035,034 | | |
| Restaurant-level operating margin | 12.7 | % | | 10.0 | % | | 15.2 | % | | 17.1 | % | |
Income from operations | Income from operations | $ | 68,501 | | | $ | 47,294 | | | $ | 305,347 | | | $ | 334,326 | | Income from operations | $ | 103,008 | | | $ | 104,620 | | | $ | 236,251 | | | $ | 236,846 | | |
Operating income margin | Operating income margin | 7.4 | % | | 5.2 | % | | 10.3 | % | | 11.9 | % | Operating income margin | 10.2 | % | | 10.5 | % | | 11.3 | % | | 11.6 | % | |
Restaurant-level operating income | | Restaurant-level operating income | $ | 154,856 | | | $ | 149,304 | | | $ | 342,664 | | | $ | 327,019 | | |
Restaurant-level operating margin | | Restaurant-level operating margin | 15.6 | % | | 15.1 | % | | 16.5 | % | | 16.3 | % | |
|
Restaurant sales
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Restaurant sales - Following is a summary of the change in U.S. segment Restaurant sales for the periods indicated:
| | | | | | | | | | | |
(dollars in millions) | THIRTEEN WEEKS ENDED (1) | | THIRTY-NINE WEEKS ENDED (1) |
For the periods ended September 26, 2021 | $ | 898.8 | | | $ | 2,789.1 | |
Change from: | | | |
Comparable restaurant sales | 12.8 | | | 135.1 | |
Restaurant openings | 7.3 | | | 20.7 | |
Restaurant closures | (8.2) | | | (24.7) | |
| | | |
For the periods ended September 25, 2022 | $ | 910.7 | | | $ | 2,920.2 | |
| | | |
| | | |
| | | |
____________________ | | | | | | | | | | | |
(dollars in millions) | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED (1) |
For the periods ended June 26, 2022 | $ | 985.9 | | | $ | 2,009.6 | |
Change from: | | | |
Restaurant openings | 8.1 | | | 19.4 | |
Comparable restaurant sales | 6.0 | | | 57.0 | |
Restaurant closures | (6.6) | | | (12.0) | |
| | | |
For the periods ended June 25, 2023 | $ | 993.4 | | | $ | 2,074.0 | |
| | | |
| | | |
| | | |
________________(1)Summation of quarterly changes will not total to annual amounts as the restaurants that meet the definition of each change category will differ each period based on when the restaurant opened or closed.
The increase in U.S. Restaurant sales during the thirteen weeks ended SeptemberJune 25, 20222023 was primarily due to higher comparable restaurant sales and the opening of 1315 new restaurants not included in our comparable restaurant sales base.base and higher comparable restaurant sales, primarily driven by increases in menu pricing. The increase was partially offset by the closure of 2117 restaurants since JuneMarch 27, 2021.2022.
The increase in U.S. Restaurant sales during the thirty-ninetwenty-six weeks ended SeptemberJune 25, 20222023 was primarily due to higher comparable restaurant sales, primarily driven by increases in menu pricing, and the opening of 1617 new restaurants not included in our comparable restaurant sales base. The increase in U.S. Restaurant sales was partially offset by the closure of 2423 restaurants since December 27, 2020.26, 2021.
Income from operations
The increase in U.S. Income from operations generated during the thirteen weeks ended SeptemberJune 25, 20222023 as compared to the thirteen weeks ended SeptemberJune 26, 2021 was2022 decreased slightly primarily due to: (i) higher labor costs, primarily due to lapping the Carrabba’s Italian Grill royalty terminationwage rate inflation, (ii) higher operating expenses including utilities, primarily due to inflation, (iii) commodity inflation and increases in average check per person.(iv) higher depreciation and advertising expense. These increasesdecreases were partially offset by: (i) commodity inflation,an increase in comparable restaurant sales and (ii) the impact of certain cost saving initiatives.
U.S. Income from operations generated during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 was flat primarily due to: (i) higher labor costcosts, primarily due to wage rate inflation, (ii) commodity inflation, (iii) higher operating expenses including utilities, primarily due to inflation, and (iv) higher depreciation and advertising expense. These decreases were partially offset by: (i) an increase in comparable restaurant sales and (ii) the impact of certain cost saving initiatives.
International Segment
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Revenues | | | | | | | |
Restaurant sales | $ | 143,892 | | | $ | 122,991 | | | $ | 291,557 | | | $ | 222,931 | |
Franchise and other revenues | 3,573 | | | 3,544 | | | 7,658 | | | 7,732 | |
Total revenues | $ | 147,465 | | | $ | 126,535 | | | $ | 299,215 | | | $ | 230,663 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Income from operations | $ | 20,486 | | | $ | 14,126 | | | $ | 44,994 | | | $ | 23,010 | |
Operating income margin | 13.9 | % | | 11.2 | % | | 15.0 | % | | 10.0 | % |
Restaurant-level operating income | $ | 29,673 | | | $ | 21,933 | | | $ | 63,688 | | | $ | 38,868 | |
Restaurant-level operating margin | 20.6 | % | | 17.8 | % | | 21.8 | % | | 17.4 | % |
| | | | | | | |
| | | | | | | |
| | | | | | | |
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
The decrease in U.S. Income from operations generated during the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 was primarily due to: (i) commodity inflation, (ii) higher labor cost primarily due to wage rate inflation, (iii) higher operating expenses including utilities and (iv) higher advertising expense. These decreases were partially offset by increases in average check per person and lapping the Carrabba’s Italian Grill royalty termination.
International Segment
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
Revenues | | | | | | | |
Restaurant sales | $ | 129,696 | | | $ | 97,928 | | | $ | 352,627 | | | $ | 242,254 | |
Franchise and other revenues | 3,546 | | | (198) | | | 11,278 | | | 12,339 | |
Total revenues | $ | 133,242 | | | $ | 97,730 | | | $ | 363,905 | | | $ | 254,593 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Restaurant-level operating margin | 18.5 | % | | 12.8 | % | | 17.8 | % | | 10.7 | % |
Income from operations | $ | 15,849 | | | $ | 1,412 | | | $ | 38,859 | | | $ | 7,419 | |
Operating income margin | 11.9 | % | | 1.4 | % | | 10.7 | % | | 2.9 | % |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Restaurant sales
-
Following is a summary of the change in international segment Restaurant sales for the periods indicated:
| | | | | | | | | | | |
(dollars in millions) | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
For the periods ended September 26, 2021 | $ | 97.9 | | | $ | 242.3 | |
Change from: | | | |
Comparable restaurant sales (1) | 22.1 | | | 77.5 | |
Restaurant openings (1) | 10.7 | | | 25.3 | |
Effect of foreign currency translation | (1.0) | | | 7.6 | |
For the periods ended September 25, 2022 | $ | 129.7 | | | $ | 352.7 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
____________________ | | | | | | | | | | | |
(dollars in millions) | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
For the periods ended June 26, 2022 | $ | 123.0 | | | $ | 222.9 | |
Change from: | | | |
Restaurant openings (1) | 9.9 | | | 18.2 | |
Brazil value added tax exemptions (2) | 9.6 | | | 19.2 | |
Comparable restaurant sales (1) | 5.9 | | | 30.2 | |
Effect of foreign currency translation | (4.5) | | | 1.1 | |
For the periods ended June 25, 2023 | $ | 143.9 | | | $ | 291.6 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
________________
(1)Summation of quarterly changes for restaurant openings and comparable restaurant sales will not total to annual amounts as the restaurants that meet the definition of each will differ each period based on when the restaurant opened.
(2)See Note 12 - Income Taxes of the Notes to Consolidated Financial Statements for details regarding value added tax exemptions in connection with Brazil tax legislation.
The increase in international Restaurant sales during the thirteen weeks ended SeptemberJune 25, 2022 was primarily due to higher comparable restaurant sales in Brazil and the opening of 29 new restaurants not included in our comparable restaurant sales base.
The increase in international Restaurant sales during the thirty-nine weeks ended September 25, 20222023 was primarily due to: (i) higher comparable restaurant sales in Brazil, (ii) the opening of 3835 new restaurants not included in our comparable restaurant sales base, (ii) value added tax exemptions in Brazil and (iii) higher comparable restaurant sales in Brazil and Hong Kong. The increase was partially offset by the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar.
The increase in international Restaurant sales during the twenty-six weeks ended June 25, 2023 was primarily due to: (i) higher comparable restaurant sales in Brazil and Hong Kong, primarily driven by the lapping of Q1 2022 COVID-19 related capacity restrictions, (ii) value added tax exemptions in Brazil and (iii) the opening of 38 new restaurants not included in our comparable restaurant sales base.
Income from operations
The increase in international Income from operations generated during the thirteen weeks ended SeptemberJune 25, 20222023 as compared to the thirteen weeks ended SeptemberJune 26, 20212022 was primarily due to: (i) the recovery of in-restaurant diningan increase in Brazilrestaurant sales, primarily driven by increases in menu pricing, and (ii) increasesvalue added tax exemptions in average check per person.Brazil. These increases were partially offset by decreases primarily due to: (i) product mix,higher operating costs, (ii) higher labor costs, primarily due to wage rate inflation, (iii) commodity inflation and (iii) commodity inflation.(iv) higher advertising expense.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
The increase in international Income from operations generated during the thirty-ninetwenty-six weeks ended SeptemberJune 25, 20222023 as compared to the thirty-ninetwenty-six weeks ended SeptemberJune 26, 20212022 was primarily due to: (i) an increase in restaurant sales, primarily driven by the recovery of in-restaurant dining and increases in Brazilmenu pricing, and (ii) increasesvalue added tax exemptions in average check per person.Brazil. These increases were partially offset by decreases primarily due to: (i) higher operating costs, (ii) higher labor costs, primarily due to wage rate inflation, (iii) commodity inflation and labor inflation.(iv) higher advertising expense.
Non-GAAP Financial Measures
Consolidated restaurant-level operating income and adjusted restaurant-level operating income and corresponding margins non-GAAP reconciliations - The following table reconciles consolidated Income from operations and the corresponding margins to restaurant-level operating income and adjusted restaurant-level operating income and the corresponding margins for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
Consolidated | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
Income from operations | $ | 51,309 | | | $ | 14,837 | | | $ | 246,284 | | | $ | 230,472 | |
Operating income margin | 4.9 | % | | 1.5 | % | | 7.4 | % | | 7.5 | % |
Less: | | | | | | | |
Franchise and other revenues | 15,388 | | | 13,745 | | | 48,592 | | | 43,906 | |
Plus: | | | | | | | |
Depreciation and amortization | 42,171 | | | 40,827 | | | 125,203 | | | 122,592 | |
General and administrative | 56,089 | | | 58,880 | | | 174,009 | | | 182,590 | |
Provision for impaired assets and restaurant closings | 2,067 | | | 1,585 | | | 4,099 | | | 8,962 | |
Restaurant-level operating income | $ | 136,248 | | | $ | 102,384 | | | $ | 501,003 | | | $ | 500,710 | |
Restaurant-level operating margin | 13.1 | % | | 10.3 | % | | 15.3 | % | | 16.5 | % |
Adjustments: | | | | | | | |
Royalty termination expense (1) | — | | | 61,880 | | | — | | | 61,880 | |
Legal and other matters (2) | — | | | 2,761 | | | — | | | 2,761 | |
Total restaurant-level operating income adjustments | — | | | 64,641 | | | — | | | 64,641 | |
Adjusted restaurant-level operating income | $ | 136,248 | | | $ | 167,025 | | | $ | 501,003 | | | $ | 565,351 | |
Adjusted restaurant-level operating margin | 13.1 | % | | 16.8 | % | | 15.3 | % | | 18.6 | % |
_________________
(1)Payment to the Carrabba’s Founders in connection with the Royalty Termination Agreement. See Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional details regarding the Royalty Termination Agreement.
(2)The thirteen and thirty-nine weeks ended September 26, 2021 include an accrual for Imposto sobre Serviços (“ISS”), a Brazilian municipal service tax, in connection with royalties from our Brazilian subsidiary over the past five years, including related penalties and interest, recorded within Other restaurant operating expense as a result of an unfavorable Brazilian Supreme Court ruling.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Non-GAAP Financial Measures
Consolidated restaurant-level operating income and corresponding margin non-GAAP reconciliations - The following table reconciles consolidated Income from operations and the corresponding margin to restaurant-level operating income and the corresponding margin for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
Consolidated | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Income from operations | $ | 89,446 | | | $ | 87,719 | | | $ | 210,079 | | | $ | 194,975 | |
Operating income margin | 7.8 | % | | 7.8 | % | | 8.8 | % | | 8.6 | % |
Less: | | | | | | | |
Franchise and other revenues | 15,364 | | | 16,244 | | | 31,876 | | | 33,204 | |
Plus: | | | | | | | |
Depreciation and amortization | 47,565 | | | 41,257 | | | 93,867 | | | 83,032 | |
General and administrative | 63,358 | | | 59,246 | | | 129,162 | | | 117,920 | |
Provision for impaired assets and restaurant closings | 1,827 | | | 193 | | | 5,151 | | | 2,032 | |
Restaurant-level operating income | $ | 186,832 | | | $ | 172,171 | | | $ | 406,383 | | | $ | 364,755 | |
Restaurant-level operating margin | 16.4 | % | | 15.5 | % | | 17.2 | % | | 16.3 | % |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Segment adjusted restaurant-level and operating margin non-GAAP reconciliations - The following tables reconcile segment Income from operations and the corresponding marginsmargin to segment restaurant-level operating income and adjusted restaurant-level operating income and the corresponding marginsmargin for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
U.S. | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
Income from operations | $ | 68,501 | | | $ | 47,294 | | | $ | 305,347 | | | $ | 334,326 | |
Operating income margin | 7.4 | % | | 5.2 | % | | 10.3 | % | | 11.9 | % |
Less: | | | | | | | |
Franchise and other revenues | 11,842 | | | 13,943 | | | 37,314 | | | 31,567 | |
Plus: | | | | | | | |
Depreciation and amortization | 34,432 | | | 33,421 | | | 102,735 | | | 100,645 | |
General and administrative | 22,339 | | | 21,998 | | | 69,432 | | | 66,043 | |
Provision for impaired assets and restaurant closings | 2,068 | | | 1,539 | | | 2,317 | | | 8,678 | |
Restaurant-level operating income | $ | 115,498 | | | $ | 90,309 | | | $ | 442,517 | | | $ | 478,125 | |
Restaurant-level operating margin | 12.7 | % | | 10.0 | % | | 15.2 | % | | 17.1 | % |
Adjustments: | | | | | | | |
Royalty termination expense (1) | — | | | 61,880 | | | — | | | 61,880 | |
Total restaurant-level operating income adjustments | — | | | 61,880 | | | — | | | 61,880 | |
Adjusted restaurant-level operating income | $ | 115,498 | | | $ | 152,189 | | | $ | 442,517 | | | $ | 540,005 | |
Adjusted restaurant-level operating margin | 12.7 | % | | 16.9 | % | | 15.2 | % | | 19.4 | % |
________________
(1)Payment to the Carrabba’s Founders in connection with the Royalty Termination Agreement. | | | | | | | | | | | | | | | | | | | | | | | |
U.S. | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Income from operations | $ | 103,008 | | | $ | 104,620 | | | $ | 236,251 | | | $ | 236,846 | |
Operating income margin | 10.2 | % | | 10.5 | % | | 11.3 | % | | 11.6 | % |
Less: | | | | | | | |
Franchise and other revenues | 11,791 | | | 12,700 | | | 24,218 | | | 25,472 | |
Plus: | | | | | | | |
Depreciation and amortization | 39,376 | | | 33,545 | | | 77,539 | | | 68,303 | |
General and administrative | 22,436 | | | 23,648 | | | 47,941 | | | 47,093 | |
Provision for impaired assets and restaurant closings | 1,827 | | | 191 | | | 5,151 | | | 249 | |
Restaurant-level operating income | $ | 154,856 | | | $ | 149,304 | | | $ | 342,664 | | | $ | 327,019 | |
Restaurant-level operating margin | 15.6 | % | | 15.1 | % | | 16.5 | % | | 16.3 | % |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
International | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
Income from operations | $ | 15,849 | | | $ | 1,412 | | | $ | 38,859 | | | $ | 7,419 | |
Operating income margin | 11.9 | % | | 1.4 | % | | 10.7 | % | | 2.9 | % |
Less: | | | | | | | |
Franchise and other revenues | 3,546 | | | (198) | | | 11,278 | | | 12,339 | |
Plus: | | | | | | | |
Depreciation and amortization | 5,882 | | | 5,843 | | | 17,438 | | | 17,128 | |
General and administrative | 5,828 | | | 5,060 | | | 16,087 | | | 13,781 | |
Provision for impaired assets and restaurant closings | — | | | 28 | | | 1,775 | | | 27 | |
Restaurant-level operating income | $ | 24,013 | | | $ | 12,541 | | | $ | 62,881 | | | $ | 26,016 | |
Restaurant-level operating margin | 18.5 | % | | 12.8 | % | | 17.8 | % | | 10.7 | % |
Adjustments: | | | | | | | |
Legal and other matters (1) | — | | | 2,761 | | | — | | | 2,761 | |
Total restaurant-level operating income adjustments | — | | | 2,761 | | | — | | | 2,761 | |
Adjusted restaurant-level operating income | $ | 24,013 | | | $ | 15,302 | | | $ | 62,881 | | | $ | 28,777 | |
Adjusted restaurant-level operating margin | 18.5 | % | | 15.6 | % | | 17.8 | % | | 11.9 | % |
________________ | | | | | | | | | | | | | | | | | | | | | | | |
International | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
Income from operations | $ | 20,486 | | | $ | 14,126 | | | $ | 44,994 | | | $ | 23,010 | |
Operating income margin | 13.9 | % | | 11.2 | % | | 15.0 | % | | 10.0 | % |
Less: | | | | | | | |
Franchise and other revenues | 3,573 | | | 3,544 | | | 7,658 | | | 7,732 | |
Plus: | | | | | | | |
Depreciation and amortization | 6,125 | | | 6,020 | | | 12,044 | | | 11,556 | |
General and administrative | 6,635 | | | 5,331 | | | 14,308 | | | 10,259 | |
Provision for impaired assets and restaurant closings | — | | | — | | | — | | | 1,775 | |
Restaurant-level operating income | $ | 29,673 | | | $ | 21,933 | | | $ | 63,688 | | | $ | 38,868 | |
Restaurant-level operating margin | 20.6 | % | | 17.8 | % | | 21.8 | % | | 17.4 | % |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
(1)The thirteen and thirty-nine weeks ended September 26, 2021 include an accrual for ISS, a Brazilian municipal service tax, in connection with royalties from our Brazilian subsidiary over the past five years, including related penalties and interest, recorded within Other restaurant operating expense as a result of an unfavorable Brazilian Supreme Court ruling.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Adjusted restaurant-levelRestaurant-level operating margin non-GAAP reconciliations (continued) - The following tables present the percentages of certain operating cost financial statement line items in relation to Restaurant sales for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED |
| SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
| REPORTED | | ADJUSTED | | REPORTED | | ADJUSTED (1) |
Restaurant sales | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % |
| | | | | | | |
Food and beverage costs | 32.0 | % | | 32.0 | % | | 30.5 | % | | 30.5 | % |
Labor and other related | 29.1 | % | | 29.1 | % | | 29.1 | % | | 29.1 | % |
Other restaurant operating | 25.8 | % | | 25.8 | % | | 30.1 | % | | 23.6 | % |
| | | | | | | |
Restaurant-level operating margin | 13.1 | % | | 13.1 | % | | 10.3 | % | | 16.8 | % |
| | | | | | | |
| THIRTY-NINE WEEKS ENDED |
| SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
| REPORTED | | ADJUSTED | | REPORTED | | ADJUSTED (1) |
Restaurant sales | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % |
| | | | | | | |
Food and beverage costs | 32.3 | % | | 32.3 | % | | 30.0 | % | | 30.0 | % |
Labor and other related | 28.2 | % | | 28.2 | % | | 28.4 | % | | 28.4 | % |
Other restaurant operating | 24.2 | % | | 24.2 | % | | 25.2 | % | | 23.0 | % |
| | | | | | | |
Restaurant-level operating margin | 15.3 | % | | 15.3 | % | | 16.5 | % | | 18.6 | % |
_________________
(1)See the Consolidated restaurant-level operating income and adjusted restaurant-level operating income and corresponding margins non-GAAP reconciliations table above for details regarding the restaurant-level operating margin adjustments. All restaurant-level operating margin adjustments for the periods presented were recorded within Other restaurant operating expense. | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED |
| JUNE 25, 2023 | | | | JUNE 26, 2022 |
| | | | | | | |
Restaurant sales | 100.0 | % | | | | 100.0 | % | | |
| | | | | | | |
Food and beverage | 30.9 | % | | | | 32.9 | % | | |
Labor and other related | 28.7 | % | | | | 27.8 | % | | |
Other restaurant operating | 24.0 | % | | | | 23.8 | % | | |
| | | | | | | |
Restaurant-level operating margin | 16.4 | % | | | | 15.5 | % | | |
| | | | | | | |
| TWENTY-SIX WEEKS ENDED |
| JUNE 25, 2023 | | | | JUNE 26, 2022 |
| | | | | | | |
Restaurant sales | 100.0 | % | | | | 100.0 | % | | |
| | | | | | | |
Food and beverage | 31.1 | % | | | | 32.4 | % | | |
Labor and other related | 28.2 | % | | | | 27.8 | % | | |
Other restaurant operating | 23.5 | % | | | | 23.4 | % | | |
| | | | | | | |
Restaurant-level operating margin | 17.2 | % | | | | 16.3 | % | | |
Adjusted net income from operationsand adjusted diluted earnings per share non-GAAP reconciliations- The following table reconciles Income from operations and the corresponding marginsNet income (loss) attributable to Bloomin’ Brands to adjusted income from operations and the corresponding marginsdiluted earnings per share for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
Income from operations | $ | 51,309 | | | $ | 14,837 | | | $ | 246,284 | | | $ | 230,472 | |
Operating income margin | 4.9 | % | | 1.5 | % | | 7.4 | % | | 7.5 | % |
Adjustments: | | | | | | | |
Total restaurant-level operating margin adjustments (1) | — | | | 64,641 | | | — | | | 64,641 | |
Legal and other matters (2) | — | | | 3,204 | | | — | | | (3,133) | |
| | | | | | | |
Total income from operations adjustments | — | | | 67,845 | | | — | | | 61,508 | |
Adjusted income from operations | $ | 51,309 | | | $ | 82,682 | | | $ | 246,284 | | | $ | 291,980 | |
Adjusted operating income margin | 4.9 | % | | 8.2 | % | | 7.4 | % | | 9.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(in thousands, except share and per share data) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 |
| | | | | | | |
| | | | | | | |
Net income (loss) attributable to Bloomin’ Brands | $ | 68,277 | | | $ | (63,635) | | | $ | 159,588 | | | $ | 11,876 | |
Adjustments: | | | | | | | |
| | | | | | | |
Loss on extinguishment and modification of debt (1) | — | | | 107,630 | | | — | | | 107,630 | |
Loss on fair value adjustment of derivatives, net (1) | — | | | 17,685 | | | — | | | 17,685 | |
Total adjustments, before income taxes | — | | | 125,315 | | | — | | | 125,315 | |
Adjustment to provision for income taxes (2) | — | | | 1,322 | | | — | | | 1,322 | |
Net adjustments | — | | | 126,637 | | | — | | | 126,637 | |
Adjusted net income | $ | 68,277 | | | $ | 63,002 | | | $ | 159,588 | | | $ | 138,513 | |
| | | | | | | |
Diluted earnings (loss) per share (3) | $ | 0.70 | | | $ | (0.72) | | | $ | 1.63 | | | $ | 0.12 | |
Adjusted diluted earnings per share (4) | $ | 0.74 | | | $ | 0.68 | | | $ | 1.72 | | | $ | 1.48 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Diluted weighted average common shares outstanding (3) | 97,401 | | | 88,898 | | | 97,706 | | | 102,045 | |
Adjusted diluted weighted average common shares outstanding (4) | 92,399 | | | 92,863 | | | 92,789 | | | 93,792 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
_________________
(1)SeeFor 2022, includes losses primarily in connection with the Consolidated restaurant-level operating income2025 Notes Partial Repurchase, including settlements of the related convertible senior note hedges and adjusted restaurant-level operating income and corresponding margins non-GAAP reconciliations table above for details regarding the restaurant-level operating income adjustments.warrants.
(2)The thirteentax effects of non-GAAP adjustments were determined based on the nature of the underlying non-GAAP adjustments and thirty-nine weeks ended September 26, 2021 include an adjustmenttheir relevant jurisdictional tax rates. For 2022, the primary difference between GAAP and adjusted effective income tax rates relates to reduce our initial recorded estimatecertain non-deductible losses and net benefit, respectively, fromother tax costs associated with the recognition of recoverable PIS and COFINS taxes, including accrued interest within other revenues as a result of favorable court rulings in Brazil.
2025 Notes Partial Repurchase.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Adjusted(3)Due to the GAAP net income and Adjustedloss, the effect of dilutive securities was excluded from the calculation of GAAP diluted earnings per share non-GAAP reconciliations - The following table reconciles Diluted net income attributable to Bloomin’ Brands to adjusted net income and adjusted diluted earningsloss per share for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED |
(in thousands, except per share data) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 |
Diluted net income attributable to Bloomin’ Brands | $ | 31,986 | | | $ | 3,449 | | | $ | 43,862 | | | $ | 155,316 | |
Convertible senior notes if-converted method interest adjustment, net of tax (1) | — | | | — | | | — | | | 460 | |
Net income attributable to Bloomin’ Brands | 31,986 | | | 3,449 | | | 43,862 | | | 154,856 | |
Adjustments: | | | | | | | |
Income from operations adjustments (2) | — | | | 67,845 | | | — | | | 61,508 | |
Loss on extinguishment and modification of debt (3) | — | | | — | | | 107,630 | | | 2,073 | |
Loss on fair value adjustment of derivatives, net (3) | — | | | — | | | 17,685 | | | — | |
Total adjustments, before income taxes | — | | | 67,845 | | | 125,315 | | | 63,581 | |
Adjustment to provision for income taxes (4) | — | | | (15,878) | | | 1,322 | | | (14,635) | |
Net adjustments | — | | | 51,967 | | | 126,637 | | | 48,946 | |
Adjusted net income | $ | 31,986 | | | $ | 55,416 | | | $ | 170,499 | | | $ | 203,802 | |
| | | | | | | |
Diluted earnings per share | $ | 0.34 | | | $ | 0.03 | | | $ | 0.44 | | | $ | 1.42 | |
Adjusted diluted earnings per share (5) | $ | 0.35 | | | $ | 0.57 | | | $ | 1.84 | | | $ | 2.10 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Diluted weighted average common shares outstanding | 94,736 | | | 107,783 | | | 99,609 | | | 109,410 | |
Adjusted diluted weighted average common shares outstanding (5) | 91,046 | | | 97,307 | | | 92,877 | | | 97,110 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
_________________
(1)Adjustment for interest expense related to the 2025 Notes weighted for the portion of the period prior to our election under the 2025 Notes indenture to settle the principal portion of the 2025 Notes in cash.thirteen weeks ended June 26, 2022 as their effect would be antidilutive.
(2)See the Adjusted income from operations non-GAAP reconciliations table above for details regarding Income from operations adjustments.
(3)The thirty-nine weeks ended September 25, 2022 include losses in connection with the 2025 Notes Partial Repurchase and Amended Credit Agreement. See Note 8 - Convertible Senior Notes and Note 7 - Long-term Debt, Net, respectively, of the Notes to Consolidated Financial Statements for additional details.
(4)The tax effect of non-GAAP adjustments were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. For the thirty-nine weeks ended September 25, 2022, the primary difference between the GAAP and adjusted effective income tax rates relate to certain non-deductible losses and other tax costs associated with the 2025 Notes Partial Repurchase.
(5)Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 3,6905,002 and 10,4767,774 shares for the thirteen weeks ended SeptemberJune 25, 20222023 and SeptemberJune 26, 2021,2022, respectively, and 6,7324,917 and 10,4538,253 shares for the thirty-ninetwenty-six weeks ended SeptemberJune 25, 20222023 and SeptemberJune 26, 2021,2022, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes. For adjusted diluted earnings per share, the thirty-ninecalculation includes 3,965 dilutive shares for the thirteen weeks ended SeptemberJune 26, 2021, adjusted2022, primarily related to outstanding warrants. These shares were excluded from the calculation of GAAP diluted weighted average common shares outstanding was also calculated assuming our February 2021 election to settleloss per share during the principal portion of the 2025 Notes in cash was inperiod as their effect for the entire period.would be antidilutive.
System-Wide Sales - System-wide sales is a non-GAAP financial measure that includes sales of all restaurants operating under our brand names, whether we own them or not. Management uses this information to make decisions about future plans for the development of additional restaurants and new concepts, as well as evaluation of current operations. System-wide sales comprise sales of Company-owned and franchised restaurants. For a summary of sales of Company-owned restaurants, refer to Note 2 - Revenue Recognition of the Notes to Consolidated Financial Statements.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
The following table provides a summary of sales of franchised restaurants for the periods indicated, which are not included in our consolidated financial results. Franchise sales within this table do not represent our sales and are presented only as an indicator of changes in the restaurant system, which management believes is important information regarding the health of our restaurant concepts and in determining our royalties and/or service fees.
| | | THIRTEEN WEEKS ENDED | | THIRTY-NINE WEEKS ENDED | | | THIRTEEN WEEKS ENDED | | TWENTY-SIX WEEKS ENDED | |
(dollars in millions) | (dollars in millions) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | | (dollars in millions) | JUNE 25, 2023 | | JUNE 26, 2022 | | JUNE 25, 2023 | | JUNE 26, 2022 | |
U.S. | U.S. | | | | | | | | | U.S. | | | | | | | | |
Outback Steakhouse | Outback Steakhouse | $ | 119 | | | $ | 118 | | | $ | 377 | | | $ | 329 | | | Outback Steakhouse | $ | 131 | | | $ | 129 | | | $ | 267 | | | $ | 258 | | |
Carrabba’s Italian Grill | Carrabba’s Italian Grill | 12 | | | 10 | | | 37 | | | 32 | | | Carrabba’s Italian Grill | 12 | | | 13 | | | 25 | | | 25 | | |
Bonefish Grill | Bonefish Grill | 3 | | | 3 | | | 9 | | | 8 | | | Bonefish Grill | 2 | | | 3 | | | 5 | | | 6 | | |
U.S. total | U.S. total | 134 | | | 131 | | | 423 | | | 369 | | | U.S. total | 145 | | | 145 | | | 297 | | | 289 | | |
International | International | | | International | | |
Outback Steakhouse - South Korea | Outback Steakhouse - South Korea | 77 | | | 73 | | | 220 | | | 219 | | | Outback Steakhouse - South Korea | 76 | | | 65 | | | 170 | | | 143 | | |
Other (1) | Other (1) | 24 | | | 26 | | | 86 | | | 77 | | | Other (1) | 25 | | | 28 | | | 52 | | | 62 | | |
International total | International total | 101 | | | 99 | | | 306 | | | 296 | | | International total | 101 | | | 93 | | | 222 | | | 205 | | |
Total franchise sales (2) | Total franchise sales (2) | $ | 235 | | | $ | 230 | | | $ | 729 | | | $ | 665 | | | Total franchise sales (2) | $ | 246 | | | $ | 238 | | | $ | 519 | | | $ | 494 | | |
|
_____________________
(1)Includes franchise sales for off-premises only kitchens in South Korea.
(2)Franchise sales are not included in Total revenues in the Consolidated Statements of Operations and Comprehensive Income.Income (Loss).
Liquidity and Capital Resources
Cash and Cash Equivalents
As of SeptemberJune 25, 2022,2023, we had $90.7$88.8 million in cash and cash equivalents, of which $34.5$34.3 million was held by foreign affiliates. The international jurisdictions in which we have significant cash do not have any known restrictions that would prohibit repatriation.
As of SeptemberJune 25, 2022,2023, we had aggregate accumulatedundistributed foreign earnings of approximately $28.6$40.5 million. This amount consisted primarily of historical earnings from 2017 and prior that were previously taxed in the U.S. under the 2017 Tax Cuts and Jobs Act and post-2017 foreign earnings, which we may repatriate to the U.S. without additional material U.S. federal income tax. These amounts are not considered indefinitely reinvested in our foreign subsidiaries.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Borrowing Capacity and Debt Service
Credit Facilities - Following is a summary of our outstanding credit facilities as of the dates indicated and principal payments and debt issuance during the period indicated:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| SENIOR SECURED CREDIT FACILITY | | | | | | | | TOTAL CREDIT FACILITIES |
(dollars in thousands) | TERM LOAN A | | REVOLVING FACILITY | | | | | | 2025 NOTES | | 2029 NOTES | |
Balance as of December 26, 2021 | $ | 195,000 | | | $ | 80,000 | | | | | | | $ | 230,000 | | | $ | 300,000 | | | $ | 805,000 | |
2022 new debt | — | | | 929,500 | | | | | | | — | | | — | | | 929,500 | |
2022 payments | (195,000) | | | (589,500) | | | | | | | (125,000) | | | — | | | (909,500) | |
Balance as of September 25, 2022 | $ | — | | | $ | 420,000 | | | | | | | $ | 105,000 | | | $ | 300,000 | | | $ | 825,000 | |
| | | | | | | | | | | | | |
Interest rates, as of September 25, 2022 (1) | | | 4.26 | % | | | | | | 5.00 | % | | 5.13 | % | | |
Principal maturity date | | | April 2026 | | | | | | May 2025 | | April 2029 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | SENIOR SECURED CREDIT FACILITY | | | | | | | | TOTAL CREDIT FACILITIES |
(dollars in thousands) | | | REVOLVING CREDIT FACILITY | | | | | | 2025 NOTES | | 2029 NOTES | |
Balance as of December 25, 2022 | | | $ | 430,000 | | | | | | | $ | 105,000 | | | $ | 300,000 | | | $ | 835,000 | |
2023 new debt | | | 448,000 | | | | | | | — | | | — | | | 448,000 | |
2023 payments | | | (513,000) | | | | | | | (214) | | | — | | | (513,214) | |
Balance as of June 25, 2023 | | | $ | 365,000 | | | | | | | $ | 104,786 | | | $ | 300,000 | | | $ | 769,786 | |
| | | | | | | | | | | | | |
Interest rates, as of June 25, 2023 (1) | | | 6.77 | % | | | | | | 5.00 | % | | 5.13 | % | | |
Principal maturity date | | | April 2026 | | | | | | May 2025 | | April 2029 | | |
____________________
(1)Interest rate for revolving credit facility represents the weighted average interest rate as of SeptemberJune 25, 2022.2023.
As of SeptemberJune 25, 2022,2023, we had $560.0$615.2 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $20.0$19.8 million.
Credit Agreement Amendment - On April 26, 2022, we and OSI entered into the Amended Credit Agreement, which included an increase of our existing revolvingOur credit facility from $800.0 million to $1.0 billion and a transition from LIBOR to SOFRagreement, as the benchmark rate for purposes of calculating interest under the Senior Secured Credit Facility. At closing, an incremental $192.5 million was drawn on the revolving credit facility to fully repay the outstanding balance of Term loan A. Our total indebtedness remained unchanged as a result of the Amended Credit Agreement. The transition to SOFR did not materially impact the interest rate applied to our borrowings.
See Note 7 - Long-term Debt, Net of the Notes to Consolidated Financial Statements for additional details regarding the Amended Credit Agreement.
Our Amended Credit Agreementamended, contains various financial and non-financial covenants. A violation of these covenants could negatively impact our liquidity by restricting our ability to borrow under the revolving credit facility and cause an acceleration of the amounts due under the credit facilities. See Note 13 - Long-term Debt, Net in our Annual Report on Form 10-K for the year ended December 26, 202125, 2022 for further information.
As of SeptemberJune 25, 20222023 and December 26, 2021,25, 2022, we were in compliance with our debt covenants. We believe that we will remain in compliance with our debt covenants during the next 12 months.months and beyond.
2025 Notes Partial Repurchase - On May 25, 2022, we and the Noteholders entered into the Exchange Agreements in which the Noteholders agreed to exchange $125.0 million in aggregate principal amount of our outstanding 2025 Notes for $196.9 million in cash, plus accrued interest, and approximately 2.3 million shares of our common stock. In connection with the 2025 Notes Partial Repurchase, we entered into the Note Hedge Early Termination Agreements and the Warrant Early Termination Agreements. Upon settlement, we received $131.9 million for the Note Hedge Early Termination Agreements and paid $114.8 million for the Warrant Early Termination Agreements during the thirty-nine weeks ended September 25, 2022.
See Note 8 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details regarding the 2025 Notes Partial Repurchase and related Note Hedge Early Termination Agreements and Warrant Early Termination Agreements.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Use of Cash
Cash flows generated from operating activities and availability under our revolving credit facility are our principal sources of liquidity, which we use for operating expenses, debt payments, share repurchases and dividend payments, development of new restaurants, remodeling or relocating older restaurants, anddevelopment of new restaurants, investment in technology.technology, debt payments, dividend payments and share repurchases.
We believe that our expected liquidity sources are adequate to fund debt service requirements, lease obligations, capital expenditures and working capital obligations during the 12 months following this filing. However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow and our ability to manage costs and working capital successfully.
Capital Expenditures - We estimate that our capital expenditures will total approximately $200$240 million to $210$260 million in 2022.2023. The amount of actual capital expenditures may be affected by general economic, financial, competitive, legislative and regulatory factors, among other things, including raw material constraints.
Dividends and Share Repurchases - In October 2022,July 2023, our Board declared a quarterly cash dividend of $0.14$0.24 per share, payable on November 23, 2022.August 25, 2023. Future dividend payments are dependent on our earnings, financial condition, capital expenditure requirements, surplus and other factors that our Board considers relevant, as well as continued compliance with the financial covenants in our debt agreements.
On February 8, 2022, our Board approved the 2022 Share Repurchase Program under which we are authorized to repurchase up to $125.0 million of our outstanding common stock. The 2022 Share Repurchase Program will expire on August 9, 2023. As of September 25, 2022, we had $44.0 million remaining available for repurchase under the 2022 Share Repurchase Program.
Following is a summary of dividends and share repurchases from fiscal year 2015 through September 25, 2022:
| | | | | | | | | | | | | | | | | |
(dollars in thousands) | DIVIDENDS PAID | | SHARE REPURCHASES | | TOTAL |
Fiscal year 2015 | $ | 29,332 | | | $ | 169,999 | | | $ | 199,331 | |
Fiscal year 2016 | 31,379 | | | 309,887 | | | 341,266 | |
Fiscal year 2017 | 30,988 | | | 272,736 | | | 303,724 | |
Fiscal year 2018 | 33,312 | | | 113,967 | | | 147,279 | |
Fiscal year 2019 | 35,734 | | | 106,992 | | | 142,726 | |
Fiscal year 2020 | 17,480 | | | — | | | 17,480 | |
Fiscal year 2021 | — | | | — | | | — | |
First fiscal quarter 2022 | 12,559 | | | 11,702 | | | 24,261 | |
Second fiscal quarter 2022 | 12,418 | | | 35,749 | | | 48,167 | |
Third fiscal quarter 2022 | 12,475 | | | 33,549 | | | 46,024 | |
Total (1) | $ | 215,677 | | | $ | 1,054,581 | | | $ | 1,270,258 | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
________________
(1)Subsequent to September 25, 2022, we repurchased $13.8 million of our common stock under a Rule 10b5-1 plan through October 28, 2022.
Deferred Compensation Programs - The deferred compensation obligation due to managing and chef partners was $5.2 million and $15.5 million as of September 25, 2022 and December 26, 2021, respectively. We invest in various corporate-owned life insurance policies, which are held within an irrevocable grantor or rabbi trust account for settlement of our obligations under the deferred compensation plans. The obligation for managing and chef partners’ deferred compensation was fully funded as of September 25, 2022.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
On February 7, 2023, our Board approved the 2023 Share Repurchase Program under which we are authorized to repurchase up to $125.0 million of our outstanding common stock. The 2023 Share Repurchase Program will expire on August 7, 2024. As of June 25, 2023, we had $103.8 million remaining available for repurchase under the 2023 Share Repurchase Program.
Following is a summary of dividends and share repurchases from fiscal year 2022 through June 25, 2023:
| | | | | | | | | | | | | | | | | |
(dollars in thousands) | DIVIDENDS PAID | | SHARE REPURCHASES | | TOTAL |
Fiscal year 2022 | $ | 49,736 | | | $ | 109,999 | | | $ | 159,735 | |
First fiscal quarter 2023 | 21,014 | | | 20,645 | | | 41,659 | |
Second fiscal quarter 2023 | 20,990 | | | 15,539 | | | 36,529 | |
| | | | | |
Total (1) | $ | 91,740 | | | $ | 146,183 | | | $ | 237,923 | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
________________
(1)Subsequent to June 25, 2023, we repurchased $7.3 million of our common stock under a Rule 10b5-1 plan.
Summary of Cash Flows and Financial Condition
Cash Flows - The following table presents a summary of our cash flows provided by (used in) operating, investing and financing activities for the periods indicated:
| | | THIRTY-NINE WEEKS ENDED | | TWENTY-SIX WEEKS ENDED |
(dollars in thousands) | (dollars in thousands) | SEPTEMBER 25, 2022 | | SEPTEMBER 26, 2021 | (dollars in thousands) | JUNE 25, 2023 | | JUNE 26, 2022 |
Net cash provided by operating activities | Net cash provided by operating activities | $ | 292,579 | | | $ | 304,246 | | Net cash provided by operating activities | $ | 287,293 | | | $ | 218,818 | |
Net cash used in investing activities | Net cash used in investing activities | (121,455) | | | (69,085) | | Net cash used in investing activities | (140,651) | | | (75,738) | |
Net cash used in financing activities | Net cash used in financing activities | (170,760) | | | (265,192) | | Net cash used in financing activities | (143,214) | | | (140,922) | |
Effect of exchange rate changes on cash and cash equivalents | Effect of exchange rate changes on cash and cash equivalents | 1,400 | | | 207 | | Effect of exchange rate changes on cash and cash equivalents | 631 | | | 4,232 | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 1,764 | | | $ | (29,824) | | |
Net increase in cash, cash equivalents and restricted cash | | Net increase in cash, cash equivalents and restricted cash | $ | 4,059 | | | $ | 6,390 | |
|
Operating activities - The decreaseincrease in net cash provided by operating activities during the thirty-ninetwenty-six weeks ended SeptemberJune 25, 20222023 as compared to the thirty-ninetwenty-six weeks ended SeptemberJune 26, 20212022 was primarily due to the timingto: (i) higher operational receipts, net of operational payments, (ii) lower inventory purchases and receipts and increased(iii) decreased employee compensation payments, partially offset by lapping cash paid in connection with the Carrabba’s Italian Grill royalty termination during 2021.payments.
Investing activities - The increase in net cash used in investing activities during the thirty-ninetwenty-six weeks ended SeptemberJune 25, 20222023 as compared to the thirty-ninetwenty-six weeks ended SeptemberJune 26, 20212022 was primarily due to higher capital expenditures.
Financing activities - The decreaseincrease in net cash used in financing activities during the thirty-ninetwenty-six weeks ended SeptemberJune 25, 20222023 as compared to the thirty-ninetwenty-six weeks ended SeptemberJune 26, 20212022 was primarily due to net draws on the revolving credit facility during 2022, generally used to settle debt obligations in excess of the principal balance due in connection with the 2025 Notes Partial Repurchase, partially offset by the repurchase of common stock and paymenthigher payments of cash dividends on our common stock.stock and higher net repayments on the revolving credit facility, independent of draws used to settle certain outstanding debt obligations discussed below. These increases were partially offset by: (i) a decrease in repurchases of common stock, (ii) partner equity plan payments during 2022 and (iii) lower payments for the purchase of noncontrolling interests.
The twenty-six weeks ended June 26, 2022 also included the 2025 Notes Partial Repurchase and the repayment of our Term loan A which were funded by draws on our revolving credit facility and proceeds from the 2025 Notes hedge transactions.
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Financial Condition - Following is a summary of our current assets, current liabilities and working capital (deficit) as of the periods indicated:
| (dollars in thousands) | (dollars in thousands) | SEPTEMBER 25, 2022 | | DECEMBER 26, 2021 | (dollars in thousands) | JUNE 25, 2023 | | DECEMBER 25, 2022 |
Current assets | Current assets | $ | 275,710 | | | $ | 352,792 | | Current assets | $ | 247,891 | | | $ | 346,577 | |
Current liabilities | Current liabilities | 911,322 | | | 984,625 | | Current liabilities | 911,606 | | | 978,867 | |
Working capital (deficit) | Working capital (deficit) | $ | (635,612) | | | $ | (631,833) | | Working capital (deficit) | $ | (663,715) | | | $ | (632,290) | |
|
Working capital (deficit) includes: (i) Unearned revenue primarily from unredeemed gift cards of $291.8$312.6 million and $398.8$394.2 million as of SeptemberJune 25, 20222023 and December 26, 2021,25, 2022, respectively, and (ii) current operating lease liabilities of $181.4$185.4 million and $177.0$183.5 million as of SeptemberJune 25, 20222023 and December 26, 2021,25, 2022, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets. 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.
Recently Issued Financial Accounting Standards
For a description of recently issued Financial Accounting Standards that we adopted during the thirty-ninethirteen weeks ended SeptemberJune 25, 20222023 and, that are applicable to us and likely to have material effect on our consolidated
BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
financial statements, but have not yet been adopted, see Note 1 - Description of the Business and Basis of Presentation of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk from changes in interest rates, changes incommodity prices, labor inflation and foreign currency exchange rates and changes in commodity prices.interest rates. We believe that there have been no material changes in our market risk since December 26, 2021.25, 2022. See Part II, Item 7A., “Quantitative and Qualitative Disclosures about Market Risk,” in our Annual Report on Form 10-K for the year ended December 26, 202125, 2022 for further information regarding market risk.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have established and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”))Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of SeptemberJune 25, 2022.2023.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the thirteen weeks ended SeptemberJune 25, 20222023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
For a description of our legal proceedings, see Note 1513 - Commitments and Contingencies of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
In addition to the other information discussed in this report, please consider the factors described in Part I, Item 1A., “Risk Factors,” in our 20212022 Form 10-K which could materially affect our business, financial condition or future results. There have not been any material changes to the risk factors described in our 20212022 Form 10-K, but these are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Conversion of 2025 Notes - During the thirteen weeks ended June 25, 2023, certain holders of our 2025 Notes elected to convert $0.2 million in aggregate principal amount of 2025 Notes for a combination of an aggregate of $0.2 million in cash and 9,925 shares of our common stock. The shares of common stock issued upon conversion of the 2025 Notes were issued in reliance upon the exemptions from the registration requirements of the Securities Act provided by Sections 3(a)(9) and 4(a)(2) thereof.
In connection with the conversion of the 2025 Notes, we exercised our rights under certain convertible note hedge transactions during the thirteen weeks ended June 25, 2023 and received a proportionate amount of our common stock.
There were no other sales of equity securities during the thirteen weeks ended SeptemberJune 25, 20222023 that were not registered under the Securities Act.
Share Repurchases - The following table provides information regarding our purchases of common stock during the thirteen weeks ended SeptemberJune 25, 2022:2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
REPORTING PERIOD | | TOTAL NUMBER OF SHARES PURCHASED | | AVERAGE PRICE PAID PER SHARE | | TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PLANS OR PROGRAMS | | | APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS (1) |
June 27, 2022 through July 24, 2022 | | 712,969 | | | $ | 17.32 | | | 712,969 | | | | $ | 65,201,059 | |
July 25, 2022 through August 21, 2022 | | 493,395 | | | $ | 20.68 | | | 493,395 | | | | $ | 55,000,002 | |
August 22, 2022 through September 25, 2022 | | 540,337 | | | $ | 20.36 | | | 540,337 | | | | $ | 44,000,185 | |
Total | | 1,746,701 | | | | | 1,746,701 | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
REPORTING PERIOD | | TOTAL NUMBER OF SHARES PURCHASED | | AVERAGE PRICE PAID PER SHARE | | TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PLANS OR PROGRAMS | | | APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS (1) |
March 27, 2023 through April 23, 2023 | | 227,812 | | | $ | 24.96 | | | 227,812 | | | | $ | 113,669,958 | |
April 24, 2023 through May 21, 2023 | | 124,149 | | | $ | 24.10 | | | 124,149 | | | | $ | 110,677,940 | |
May 22, 2023 through June 25, 2023 | | 266,752 | | | $ | 25.72 | | | 266,752 | | | | $ | 103,817,009 | |
Total | | 618,713 | | | | | 618,713 | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
____________________(1)On February 8, 2022,7, 2023, our Board approved a share repurchase authorization of Directors authorized the repurchase ofup to $125.0 million of our outstanding common stock as announced in our press release issued on February 18, 202216, 2023 (the “2022“2023 Share Repurchase Program”). The 20222023 Share Repurchase Program will expire on August 9, 2023.7, 2024.
Item 6. Exhibits
| | | | | | | | | | | | | | |
EXHIBIT NUMBER | | DESCRIPTION OF EXHIBITS | | FILINGS REFERENCED FOR INCORPORATION BY REFERENCE |
| | | | |
10.1*3.1 | | | | Filed herewithApril 19, 2023, Form 8-K, Exhibit 3.1 |
| | | | |
3.2 | | | | April 19, 2023, Form 8-K, Exhibit 3.2 |
| | | | |
31.1 | | | | Filed herewith |
| | | | |
31.2 | | | | Filed herewith |
| | | | |
32.1 | | | | Furnished herewith |
| | | | |
32.2 | | | | Furnished herewith |
| | | | |
101.INS | | Inline XBRL Instance Document | | Filed herewith |
| | | | |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document | | Filed herewith |
| | | | |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | Filed herewith |
| | | | |
101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document | | Filed herewith |
| | | | |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document | | Filed herewith |
| | | | |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | Filed herewith |
| | | | |
104 | | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | | Filed herewith |
| | | | |
* Management contract or compensatory plan or arrangement required to be filed as an exhibit. |
| | | | |
(1) These certifications are not deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. These certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates them by reference. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | | | | | | | | |
Date: | NovemberAugust 1, 20222023 | | BLOOMIN’ BRANDS, INC. |
| | | (Registrant) |
| | | |
| | | By: /s/ Philip Pace |
| | | Philip Pace Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) |
[Remainder of page intentionally left blank]