Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 23, 2020 | Oct. 23, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 23, 2020 | |
Entity File Number | 1-10275 | |
Entity Registrant Name | BRINKER INTERNATIONAL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-1914582 | |
Entity Address, Address Line One | 3000 Olympus Blvd | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75019 | |
City Area Code | (972) | |
Local Phone Number | 980-9917 | |
Title of 12(b) Security | Common Stock, $0.10 par value | |
Trading Symbol | EAT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 45,289,445 | |
Entity Central Index Key | 0000703351 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Total revenues | $ 740.1 | $ 786 |
Operating costs and expenses | ||
Food and beverage costs | 193.5 | 203.8 |
Restaurant labor | 248 | 268.5 |
Restaurant expenses | 202.5 | 207.3 |
Depreciation and amortization | 37.4 | 38.1 |
General and administrative | 30.5 | 38 |
Other (gains) and charges | 3.8 | (0.9) |
Total operating costs and expenses | 715.7 | 754.8 |
Operating income | 24.4 | 31.2 |
Interest expenses | 14.6 | 14.9 |
Other income, net | (0.4) | (0.5) |
Income before income taxes | 10.2 | 16.8 |
Provision (benefit) for income taxes | (0.5) | 1.9 |
Net income | $ 10.7 | $ 14.9 |
Basic net income per share | $ 0.24 | $ 0.40 |
Diluted net income per share | $ 0.23 | $ 0.39 |
Basic weighted average shares outstanding | 45.1 | 37.5 |
Diluted weighted average shares outstanding | 45.7 | 38.1 |
Other comprehensive income (loss) | ||
Foreign currency translation adjustment | $ 0.3 | $ (0.2) |
Other comprehensive income (loss) | 0.3 | (0.2) |
Comprehensive income | 11 | 14.7 |
Company sales [Member] | ||
Revenue from contract with customer, excluding assessed tax | 728.2 | 763.9 |
Franchise and other revenues [Member] | ||
Revenue from contract with customer, excluding assessed tax | $ 11.9 | $ 22.1 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) shares in Millions, $ in Millions | Sep. 23, 2020 | Jun. 24, 2020 |
Current assets | ||
Cash and cash equivalents | $ 58.8 | $ 43.9 |
Accounts receivable, net | 56.8 | 52.3 |
Inventories | 25.9 | 27.3 |
Restaurant supplies | 51.6 | 51.6 |
Prepaid expenses | 13.4 | 13.9 |
Income taxes receivable, net | 33.1 | 35.4 |
Total current assets | 239.6 | 224.4 |
Property and equipment, at cost | ||
Land | 34.2 | 34.2 |
Buildings and leasehold improvements | 1,544.7 | 1,534.4 |
Furniture and equipment | 788.3 | 785.7 |
Construction-in-progress | 18.3 | 24.4 |
Gross property and equipment | 2,385.5 | 2,378.7 |
Less accumulated depreciation and amortization | (1,603.5) | (1,573.4) |
Net property and equipment | 782 | 805.3 |
Other assets | ||
Operating lease assets | 1,041.3 | 1,054.6 |
Goodwill | 187.7 | 187.6 |
Deferred income taxes, net | 39.1 | 38.2 |
Intangibles, net | 22.5 | 23 |
Other | 23.1 | 22.9 |
Total other assets | 1,313.7 | 1,326.3 |
Total assets | 2,335.3 | 2,356 |
Current liabilities | ||
Accounts payable | 99.4 | 104.9 |
Gift card liability | 107.1 | 109.9 |
Accrued payroll | 63.3 | 65.2 |
Operating lease liabilities | 117.8 | 117.3 |
Other accrued liabilities | 121.9 | 100.6 |
Total current liabilities | 509.5 | 497.9 |
Long-term debt and finance leases, less current installments | 1,158.3 | 1,208.5 |
Long-term operating lease liabilities, less current portion | 1,045.2 | 1,061.6 |
Other liabilities | 87.4 | 67.1 |
Commitments and contingencies (Note 14) | ||
Shareholders’ deficit | ||
Common stock, shares authorized | 250 | |
Common stock, par value per share | $ 0.10 | |
Common stock, shares issued | 70.3 | 70.3 |
Common stock, shares outstanding | 45.3 | 45 |
Common stock (250.0 million authorized shares; $0.10 par value; 70.3 million shares issued and 45.3 million shares outstanding at September 23, 2020, and 70.3 million shares issued and 45.0 million shares outstanding at June 24, 2020) | $ 7 | $ 7 |
Additional paid-in capital | 663.2 | 669.4 |
Accumulated other comprehensive loss | (5.9) | (6.2) |
Accumulated deficit | $ (386.8) | $ (397.5) |
Treasury stock, shares | 25 | 25.3 |
Treasury stock, at cost (25.0 million shares at September 23, 2020, and 25.3 million shares at June 24, 2020) | $ (742.6) | $ (751.8) |
Total shareholders’ deficit | (465.1) | (479.1) |
Total liabilities and shareholders’ deficit | $ 2,335.3 | $ 2,356 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Cash flows from operating activities | ||
Net income | $ 10.7 | $ 14.9 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation and amortization | 37.4 | 38.1 |
Stock-based compensation | 3.9 | 7.1 |
Restructure charges and other impairments | 0.5 | (3.2) |
Net loss on disposal of assets | 0.4 | 0.3 |
Other | 0.8 | 0.6 |
Changes in assets and liabilities: | ||
Accounts receivable, net | 0.6 | 7 |
Inventories | 1.4 | 0.1 |
Prepaid expenses | 0.4 | 5.9 |
Operating lease assets, net of liabilities | (2.2) | (1.7) |
Deferred income taxes, net | (0.9) | 1.3 |
Other assets | 0 | (0.5) |
Accounts payable | (4.9) | 2.8 |
Gift card liability | (2.7) | (6.1) |
Accrued payroll | (1.9) | (12.1) |
Other accrued liabilities | 16.2 | 19.7 |
Current income taxes | 2.4 | 12.3 |
Other liabilities | 20.7 | 0.1 |
Net cash provided by operating activities | 82.8 | 86.6 |
Cash flows from investing activities | ||
Payments for property and equipment | (13.6) | (20.5) |
Proceeds from note receivable | 0.6 | 0.7 |
Payments for franchise restaurant acquisitions | 0 | (96.2) |
Proceeds from sale of assets | 0 | 0.2 |
Net cash used in investing activities | (13) | (115.8) |
Cash flows from financing activities | ||
Payments on revolving credit facility | (75) | (227) |
Borrowings on revolving credit facility | 28.4 | 299 |
Payments on long-term debt | (4.6) | (2.4) |
Purchases of treasury stock | (3.9) | (11.3) |
Payments for debt issuance costs | (1.5) | 0 |
Payments of dividends | (1.3) | (14.8) |
Proceeds from issuance of treasury stock | 3 | 1.3 |
Net cash (used in) provided by financing activities | (54.9) | 44.8 |
Net change in cash and cash equivalents | 14.9 | 15.6 |
Cash and cash equivalents at beginning of period | 43.9 | 13.4 |
Cash and cash equivalents at end of period | $ 58.8 | $ 29 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Sep. 23, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | References to “Brinker,” the “Company,” “we,” “us,” and “our” in this Form 10-Q refer to Brinker International, Inc. and its subsidiaries and any predecessor companies of Brinker International, Inc. Our Consolidated Financial Statements (Unaudited) as of September 23, 2020 and June 24, 2020, and for the thirteen week periods ended September 23, 2020 and September 25, 2019, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). We are principally engaged in the ownership, operation, development, and franchising of the Chili’s ® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy ® (“Maggiano’s”) restaurant brands. At September 23, 2020, we owned, operated or franchised 1,660 restaurants, consisting of 1,116 Company-owned restaurants and 544 franchised restaurants, located in the United States, 28 countries and two United States territories. Fiscal Year We have a 52/53 week fiscal year ending on the last Wednesday in June. We utilize a 13 week accounting period for quarterly reporting purposes, except in years containing 53 weeks when the fourth quarter contains 14 weeks. Fiscal year 2021 contains 53 weeks and will end on June 30, 2021. Fiscal year 2020, which ended on June 24, 2020, contained 52 weeks. Use of Estimates The preparation of the consolidated financial statements is in conformity with generally accepted accounting principles in the United States (“GAAP”) and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and costs and expenses in the reporting periods. Actual results could differ from those estimates. The foreign currency translation adjustment included in Comprehensive income in the Consolidated Statements of Comprehensive Income (Unaudited) represents the unrealized impact of translating the financial statements of our Canadian restaurants from Canadian dollars to United States dollars. This amount is not included in Net income and would only be realized upon disposition of our Canadian restaurants. The related Accumulated other comprehensive loss is presented in the Consolidated Balance Sheets (Unaudited). The information furnished herein reflects all adjustments (consisting only of normal recurring accruals and adjustments) which are, in our opinion, necessary to fairly state the interim operating results, financial position and cash flows for the respective periods. However, these operating results are not necessarily indicative of the results expected for the full fiscal year. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with GAAP, have been omitted pursuant to SEC rules and regulations. The Notes to the Consolidated Financial Statements (Unaudited) should be read in conjunction with the Notes to the Consolidated Financial Statements contained in our June 24, 2020 Form 10-K. We believe the disclosures are sufficient for interim financial reporting purposes. All amounts in the Notes to the Consolidated Financial Statements (Unaudited) are presented in millions unless otherwise specified. Risks and Uncertainties In January 2020, the Secretary of Health and Human Services declared the novel strain of coronavirus (“COVID-19”) a public health emergency. Subsequently in March 2020, the World Health Organization declared COVID-19 a global pandemic that resulted in a significant reduction in sales at our restaurants due to changes in consumer behavior as social distancing practices, dining room closures and other restrictions were mandated or encouraged by federal, state and local governments. In response to COVID-19, the Company temporarily closed all Company-owned restaurant dining and banquet rooms at the end of the third quarter of fiscal 2020 resulting in a transition to an off-premise business model. Beginning on April 27, 2020 we began to reopen certain dining room locations as permitted by state and local governments. As of September 23, 2020, substantially all of our restaurant dining rooms and patios were opened with limited seating capacity. The capacity limitations and personal safety preferences in the reopened dining rooms have resulted in reduced traffic in the Company’s restaurants in comparison to pre-pandemic levels. See Note 4 - Other Gains and Charges for details regarding the financial impact of the COVID-19 pandemic on our financial results. At this time, the ultimate impact of COVID-19 cannot be reasonably estimated due to the uncertainty about the extent and the duration of the spread of the virus. A lack of containment or another wave could lead to capacity restrictions, restaurant closures, disruptions in our supply chain and restaurant staffing which could adversely impact our financial results. |
EFFECT OF NEW ACCOUNTING STANDA
EFFECT OF NEW ACCOUNTING STANDARDS | 3 Months Ended |
Sep. 23, 2020 | |
Effect of New Accounting Standards [Abstract] | |
Effect of New Accounting Standards | New Accounting Standards Implemented in Fiscal 2021 Measurement of Credit Losses on Financial Instruments, ASU No. 2016-13 - In June 2013, the FASB issued ASU 2016-13, creating ASC Topic 326 – Financial Instruments – Credit Losses. ASU 2016-13 is intended to improve financial reporting by requiring timelier recording of credit losses on financial assets measured at amortized cost basis (including, but not limited to loans), net investments in leases recognized as lessor and off-balance sheet credit exposures. ASU 2016-13 eliminates the probable initial recognition threshold under the current incurred loss methodology for recognizing credit losses. Instead, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The new guidance is effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, which required us to adopt these provisions in the first quarter of fiscal 2021. The update was applied on a prospective basis. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements. Fair Value Measurement (Topic 820): Disclosure Framework, ASU No. 2018-13 - Changes to the Disclosure Requirements for Fair Value Measurement - In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The amendments under ASU 2018-13 add an incremental requirement, among others, for entities to disclose (1) the range and weighted average used to develop significant unobservable inputs and (2) how the weighted average was calculated for fair value measurements categorized within Level 3 of the fair value hierarchy. Entities may disclose other quantitative information in lieu of the weighted average if they determine that such information embodies a more reasonable and rational method of reflecting the distribution of significant unobservable inputs used to develop Level 3 fair value measurements. The new guidance is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, which required us to adopt these provisions in the first quarter of fiscal 2021. The update was applied on a prospective basis. The adoption of this guidance did not have an impact on our Consolidated Financial Statements. Simplifying the Accounting for Income Taxes, ASU No. 2019-12 - In December 2019, the FASB issued ASU 2019-12, which removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The new guidance is effective for public entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, which will require us to adopt these provisions in the first quarter of fiscal 2022, and early adoption is permitted. We elected to early adopt this update in the first quarter of fiscal 2021. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements. New Accounting Standards That Will Be Implemented In Future Periods Reference Rate Reform, ASU 2020-04 - In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting. These updates are intended to simplify the market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This guidance is effective upon issuance to modifications made as early as the beginning of the interim period through December 31, 2022. We are currently assessing the impact that this guidance will have on our Consolidated Financial Statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Sep. 23, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Deferred Development and Franchise Fees Our deferred development and franchise fees consist of the unrecognized fees received from franchisees. Recognition of these fees in subsequent periods is based on satisfaction of the contractual performance obligations of the active contracts with franchisees. We also expect to earn subsequent period royalties and advertising fees related to our franchise contracts; however, due to the variability and uncertainty of these future revenues based upon a sales-based measure, these future revenues are not yet estimable due to the unsatisfied performance obligations. Deferred Franchise and Development Fees Balance as of June 24, 2020 $ 12.7 Additions 0.1 Amount recognized to Franchise and other revenues (0.3) Balance as of September 23, 2020 $ 12.5 Fiscal Year Franchise and Development Fees Revenue Recognition Remainder of 2021 $ 0.9 2022 1.1 2023 1.0 2024 1.0 2025 1.0 Thereafter 7.5 $ 12.5 Deferred Gift Card Revenues Total deferred revenues related to our gift cards include the full value of unredeemed gift card balances less recognized breakage and the unamortized portion of third party fees. Gift Card Liability Balance as of June 24, 2020 $ 109.9 Gift card sales 19.0 Gift card redemptions recognized to Company sales (19.9) Gift card breakage recognized to Franchise and other revenues (2.2) Other 0.3 Balance as of September 23, 2020 $ 107.1 |
OTHER GAINS AND CHARGES
OTHER GAINS AND CHARGES | 3 Months Ended |
Sep. 23, 2020 | |
Other Gains and Charges [Abstract] | |
Other Gains and Charges | Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Unaudited) consist of the following: Thirteen Week Periods Ended September 23, September 25, Restaurant closure charges $ 1.5 $ 0.2 COVID-19 related charges 1.2 — Remodel-related costs 0.2 0.7 Lease modification gain, net (0.5) (3.1) Other 1.4 1.3 $ 3.8 $ (0.9) Fiscal 2021 • Restaurant closure charges primarily relates to closure costs associated with certain Chili’s restaurants closed in the first quarter of fiscal 2021. • COVID-19 related charges consists of costs related to both Chili’s and Maggiano’s employee assistance and related payroll taxes for certain team members, and restaurant supplies such as face masks and hand sanitizers required to continue to reopen dining rooms. • Remodel-related costs relates to fixed asset write-offs associated with the ongoing Chili’s remodel initiative. • Lease modification gain, net relates to the lease terminations of certain Chili’s operating lease liabilities. Fiscal 2020 • Lease modification gain, net related to the lease termination of a previously impaired Chili’s operating lease. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Sep. 23, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Thirteen Week Periods Ended September 23, September 25, Effective income tax rate (4.9) % 11.3 % The federal statutory tax rate for both periods presented was 21.0%. Fiscal 2021 Our effective income tax rate for the thirteen week period ended September 23, 2020 was lower than the federal statutory rate primarily due to the favorable impact from the FICA tax credit and excess tax windfalls associated with stock-based compensation. A reconciliation between the reported provision for income taxes and the amount computed by applying the statutory Federal income tax rate to Provision (benefit) for income taxes is as follows: Thirteen Week Period Ended September 23, Income tax expense at statutory rate $ 2.1 FICA tax credit (1.9) Stock-based compensation tax windfall (1.1) State income taxes, net of federal benefit 0.6 Other (0.2) Provision (benefit) for income taxes $ (0.5) Fiscal 2020 Our effective income tax rate for the thirteen week period ended September 25, 2019 was lower than the federal statutory rate due to the favorable impact from the FICA tax credit. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 3 Months Ended |
Sep. 23, 2020 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Basic net income per share is computed by dividing Net income by the Basic weighted average shares outstanding for the reporting period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of Diluted net income per share, the Basic weighted average shares outstanding is increased by the dilutive effect of stock options and restricted share awards. Stock options and restricted share awards with an anti-dilutive effect are not included in the Diluted net income per share calculation. Basic weighted average shares outstanding are reconciled to Diluted weighted average shares outstanding as follows: Thirteen Week Periods Ended September 23, September 25, Basic weighted average shares outstanding 45.1 37.5 Dilutive stock options 0.1 0.1 Dilutive restricted shares 0.5 0.5 Total dilutive impact 0.6 0.6 Diluted weighted average shares outstanding 45.7 38.1 Awards excluded due to anti-dilutive effect 1.6 1.4 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Sep. 23, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Our operating segments are Chili’s and Maggiano’s. The Chili’s segment includes the results of our Company- owned Chili’s restaurants, principally in the United States, within the full-service casual dining segment of the industry. The Chili’s segment also has Company-owned restaurants in Canada, and franchised locations in the United States, 28 countries and two United States territories. The Maggiano’s segment includes the results of our Company-owned Maggiano’s restaurants in the United States as well as the results from our domestic franchise business. Company sales inclu de revenues generated by the operation of Company-owned restaurants including gift card redemptions and virtual brand revenues. Franchise and other revenues include Royalties and Franchise fees and other revenues. Franchise fees and other revenues include delivery service income, gift card breakage, franchise advertising fees, digital entertainment revenues, franchise and development fees, Maggiano’s banquet service charge income, gift card equalization, merchandise income, and gift card discount costs from third-party gift card sales. We do not rely on any major customers as a source of sales, and the customers and long-lived assets of our operating segments are predominantly in the United States. There were no material transactions amongst our operating segments. Our chief operating decision maker uses Operating income as the measure for assessing performance of our segments. Operating income includes revenues and expenses directly attributable to segment-level results of operations. Restaurant expenses during the periods presented primarily included restaurant rent, supplies, utilities, delivery fees, repairs and maintenance, property taxes, credit card processing fees and advertising. T he following tables reconcile our segment results to our consolidated results reported in accordance with GAAP: Thirteen Week Period Ended September 23, 2020 Chili’s Maggiano’s Other Consolidated Company sales $ 675.0 $ 53.2 $ — $ 728.2 Royalties 6.6 0.0 — 6.6 Franchise fees and other revenues 4.9 0.4 — 5.3 Franchise and other revenues 11.5 0.4 — 11.9 Total revenues 686.5 53.6 — 740.1 Food and beverage costs 180.8 12.7 — 193.5 Restaurant labor 228.2 19.8 — 248.0 Restaurant expenses 181.4 20.8 0.3 202.5 Depreciation and amortization 30.6 3.6 3.2 37.4 General and administrative 5.4 1.3 23.8 30.5 Other (gains) and charges 3.6 0.1 0.1 3.8 Total operating costs and expenses 630.0 58.3 27.4 715.7 Operating income (loss) 56.5 (4.7) (27.4) 24.4 Interest expenses 1.4 — 13.2 14.6 Other income, net (0.1) — (0.3) (0.4) Income (loss) before income taxes $ 55.2 $ (4.7) $ (40.3) $ 10.2 Segment assets $ 1,937.1 $ 221.8 $ 176.4 $ 2,335.3 Segment goodwill 149.3 38.4 — 187.7 Payments for property and equipment 11.6 0.5 1.5 13.6 Thirteen Week Period Ended September 25, 2019 Chili’s (1) Maggiano’s Other Consolidated Company sales $ 677.5 $ 86.4 $ — $ 763.9 Royalties 11.8 0.1 — 11.9 Franchise fees and other revenues 6.3 3.9 — 10.2 Franchise and other revenues 18.1 4.0 — 22.1 Total revenues 695.6 90.4 — 786.0 Food and beverage costs 182.4 21.4 — 203.8 Restaurant labor 233.1 35.4 — 268.5 Restaurant expenses 180.8 26.3 0.2 207.3 Depreciation and amortization 30.7 4.0 3.4 38.1 General and administrative 9.1 1.7 27.2 38.0 Other (gains) and charges (1.6) 0.1 0.6 (0.9) Total operating costs and expenses 634.5 88.9 31.4 754.8 Operating income (loss) 61.1 1.5 (31.4) 31.2 Interest expenses 0.9 — 14.0 14.9 Other income, net (0.2) — (0.3) (0.5) Income (loss) before income taxes $ 60.4 $ 1.5 $ (45.1) $ 16.8 Payments for property and equipment $ 16.1 $ 2.3 $ 2.1 $ 20.5 (1) Chili’s segment information for fiscal 2020 includes the results of operations related to the 116 restaurants purchased from a former franchisee subsequent to the September 5, 2019 acquisition date. Refer to Note 15 - Fiscal 2020 Chili’s Restaurant Acquisition for details. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Sep. 23, 2020 | |
Fair Value Disclosures [Abstract] | |
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 grouped in three levels based on the level of significant inputs used in measuring fair value, as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs available at measurement date other than quote prices included in Level 1 Level 3 Unobservable inputs that cannot be corroborated by observable market data Non-Financial Assets Measured on a Non-Recurring Basis We review the carrying amounts of long-lived property and equipment, operating lease assets, reacquired franchise rights and transferable liquor licenses semi-annually or when events or circumstances indicate that the fair value may not substantially exceed the carrying amount. We record an impairment charge for the excess of the carrying amount over the fair value. Intangibles, net in the Consolidated Balance Sheets (Unaudited) includes both indefinite-lived intangible assets such as the transferable liquor licenses and definite-lived intangible assets that include reacquired franchise rights and other items such as trademarks. Intangibles, net included accumulated amortization associated with definite-lived intangible assets at September 23, 2020 and June 24, 2020, of $8.0 million and $7.5 million, respectively. Definite Lived Assets Impairment Definite lived assets include property, equipment, operating lease assets, and reacquired franchise rights. During the thirteen week periods ended September 23, 2020 and September 25, 2019, no indicators of impairment existed. Indefinite Lived Assets Impairment We determine the fair value of transferable liquor licenses based on prices in the open market for licenses in the same or similar jurisdictions that is considered Level 2. During the thirteen week periods ended September 23, 2020 and September 25, 2019, no indicators of impairment were identified. Goodwill We review the carrying amounts of goodwill annually or when events or circumstances indicate that the carrying amount may not be recoverable. We may elect to perform a qualitative assessment for our reporting units to determine whether it is more likely than not that the fair value of the reporting unit is greater than its carrying value. If a qualitative assessment is not performed, or if the result of the qualitative assessment indicates a potential impairment, then the reporting unit’s fair value is compared to its carrying value. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the implied fair value of the goodwill. Related to the qualitative assessment, changes in circumstances existing at the measurement date or at other times in the future, such as declines in our market capitalization, as well as in the market capitalization of other companies in the restaurant industry, declines in sales at our restaurants, and significant adverse changes in the operating environment for the restaurant industry could result in an impairment loss of all or a portion of our goodwill. We performed a detailed quantitative assessment in the third quarter of fiscal 2020 of our goodwill balances associated with both reporting units. This assessment was performed in response to observed indicators of impairment that were primarily driven by the impact of the COVID-19 pandemic on our business. These indicators were significant declines in operating cash flows and market capitalization. Based on this assessment, we concluded that our goodwill and indefinite-lived intangible assets were not impaired at that time. We updated this assessment in the fourth quarter of fiscal 2020 and again concluded no impairment triggering event existed based on improved market capitalization and improved operating results compared to projections in the detailed quantitative assessment prepared in the third quarter of fiscal 2020. Our operating results and operating cash flows have continued to outperform our initial quantitative assessment in the first quarter of fiscal 2021. Our stock price and market capitalization have also increased to levels greater than before the COVID-19 pandemic began in the United States. As a result, we have not performed a quantitative analysis in the first quarter of fiscal 2021; however, based on these qualitative factors, Management has concluded no triggering event exists. Our ability to operate dining and banquet rooms and generate off-premise sales at our restaurants is critical to avoiding a future triggering event as the impact of the COVID-19 pandemic continues. Management’s judgments about the impact of the pandemic could change as additional developments occur. We will continue to monitor and evaluate our results to determine if more a more detailed assessment is necessary. Other Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and long-term debt. The fair values of cash and cash equivalents, accounts receivable and accounts payable approximate their carrying amounts because of the short maturity of these items. Long-Term Debt The carrying amount of debt outstanding related to the amended revolving credit facility approximates fair value as the interest rate on this instrument approximates current market rates (Level 2). The fair values of the 3.875% and 5.000% notes are based on quoted market prices and are considered Level 2 fair value measurements. The 3.875% notes and 5.000% notes carrying amounts, which are net of unamortized debt issuance costs and discounts, and fair values are as follows, refer to Note 10 - Debt for further details: September 23, 2020 June 24, 2020 Carrying Amount Fair Value Carrying Amount Fair Value 3.875% notes $ 299.1 $ 293.3 $ 299.0 $ 282.8 5.000% notes 346.9 357.4 346.7 330.8 Note Receivable During fiscal 2018, we received an $18.0 million long-term note receivable as consideration related to the sale of our equity interest in the Chili’s joint venture in Mexico. We determined the fair value of this note based on an internally developed analysis relying on Level 3 inputs at inception. This analysis was based on a credit rating we assigned to the counterparty and comparable interest rates associated with similar debt instruments observed in the market. As a result of this analysis, we determined the fair value of this note was approximately $16.0 million and recorded this fair value as its initial carrying value. We believe the fair value continues to approximate the note receivable carrying value, which as of September 23, 2020 was $7.0 million. The current portion of the note represents cash payments to be received over the next 12 months and is included within Accounts receivable, net while the long-term portion of the note is included within Other assets in the Consolidated Balance Sheets (Unaudited). |
LEASES
LEASES | 3 Months Ended |
Sep. 23, 2020 | |
Leases [Abstract] | |
Leases | We typically lease our restaurant facilities through ground leases (where we lease land only, but construct the building and improvements) or retail leases (where we lease the land/retail space and building). In addition to our restaurant facilities, we also lease our corporate headquarters location and certain equipment. Lease Amounts Included in the Consolidated Statements of Comprehensive Income (Unaudited) The components of lease expenses included in the Consolidated Statements of Comprehensive Income (Unaudited) were as follows: Thirteen Week Periods Ended September 23, September 25, Operating lease cost $ 41.7 $ 37.3 Variable lease cost 14.0 13.3 Finance lease amortization 4.0 2.7 Finance lease interest 1.5 0.9 Short-term lease cost 0.1 0.2 Sublease income (1.0) (1.2) Total lease costs, net $ 60.3 $ 53.2 Lease Maturity Analysis As of September 23, 2020, the discounted future minimum lease payments on finance and operating leases, as well as sublease income, were as follows: September 23, 2020 Fiscal Year Finance Leases Operating Leases Sublease Income Remainder of 2021 $ 17.5 $ 135.8 $ 2.5 2022 22.4 169.2 3.2 2023 20.9 157.6 2.6 2024 11.4 146.6 1.9 2025 9.0 136.6 1.8 Thereafter 53.6 864.5 4.8 Total future lease payments (1) 134.8 1,610.3 $ 16.8 Less: Imputed interest 31.0 447.3 Present value of lease liability $ 103.8 $ 1,163.0 (1) Finance and Operating leases total future lease payments represent the contractual obligations due under the contract, including certain cancellable option periods where we are reasonably assured to exercise the |
DEBT
DEBT | 3 Months Ended |
Sep. 23, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Long-term debt consists of the following: September 23, June 24, Revolving credit facility $ 426.3 $ 472.9 5.000% notes 350.0 350.0 3.875% notes 300.0 300.0 Finance lease obligations 103.8 102.1 Total long-term debt 1,180.1 1,225.0 Less: unamortized debt issuance costs and discounts (4.1) (4.3) Total long-term debt, less unamortized debt issuance costs and discounts 1,176.0 1,220.7 Less: current installments of long-term debt (1) (17.7) (12.2) Long-term debt less current installments $ 1,158.3 $ 1,208.5 (1) Current installments of long-term debt consist only of finance leases for the periods presented and are recorded within Other accrued liabilities in the Consolidated Balance Sheets (Unaudited). Refer to Note 11 - Accrued and Other Liabilities for further details. Revolving Credit Facility In the thirteen week period ended September 23, 2020, net repayments of $46.6 million were made on the $1.0 billion revolving credit facility. As of September 23, 2020, $573.7 million of credit was available under the revolving credit facility. Amended Revolving Credit Agreement In the first quarter of fiscal 2021, we executed the seventh amendment to our revolving credit facility. This amendment extended the maturity date to December 12, 2022, and required a capacity reduction to $900.0 million from $1.0 billion on September 12, 2021. The issuance of certain debt or preferred equity interests will result in an immediate capacity reduction, an interest rate reduction of 0.250% on the spread, and 0.100% reduction on the undrawn fee if the issuance exceeds $250.0 million pursuant to the terms of the agreement. The revolving credit facility bears interest of LIBOR, through December 2021, plus an applicable margin of 2.250% to 3.000% and an undrawn commitment fee of 0.350% to 0.500%, both based on a function of our debt-to-cash-flow ratio. Upon LIBOR’s expiration in December 2021, our interest rate will be a function of a similar, publicly available, Eurodollar rate. As of September 23, 2020, our interest rate was 3.750% consisting of the LIBOR floor of 0.750% plus the applicable margin of 3.000%. During the first quarter of fiscal 2021, we incurred $1.5 million of debt issuance costs, associated with the revolver amendment, which are included in Other assets in the Consolidated Balance Sheets (Unaudited). 5.000% Notes In fiscal 2017, we completed the private offering of $350.0 million of our 5.000% senior notes due October 2024, our fiscal 2025 (the “2024 Notes”). We received proceeds of $350.0 million and utilized the proceeds to fund a $300.0 million accelerated share repurchase agreement and to repay $50.0 million on the amended $1.0 billion revolving credit facility. The notes require semi-annual interest payments which began on April 1, 2017. The indenture for the 2024 Notes contains certain covenants, including, but not limited to, limitations and restrictions on the ability of the Company and its Restricted Subsidiaries (as defined in the indenture) to (i) create liens on Principal Property (as defined in the Indenture) and (ii) merge, consolidate or amalgamate with or into any other person or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all of their property. These covenants are subject to a number of important conditions, qualifications, exceptions and limitations. 3.875% Notes In fiscal 2013, we issued $300.0 million of 3.875% notes due in May 2023, our fiscal 2023. These “2023 Notes” require semi-annual interest payments which began in the second quarter of fiscal 2014. Financial Covenants |
ACCRUED AND OTHER LIABILITIES
ACCRUED AND OTHER LIABILITIES | 3 Months Ended |
Sep. 23, 2020 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued And Other Liabilities Disclosure | Other accrued liabilities consist of the following: September 23, June 24, Property tax $ 27.0 $ 22.9 Insurance 21.3 20.7 Sales tax 18.0 13.3 Current installments of finance leases 17.7 12.2 Interest 14.9 7.5 Utilities and services 8.4 8.3 Cyber security incident 3.4 3.4 Other (1) 11.2 12.3 $ 121.9 $ 100.6 (1) Other primarily consists of accruals for banquet deposits for Maggiano’s events, charitable donations, rent-related expenses, deferred franchise and development fees, and other various accruals. Other liabilities consist of the following: September 23, June 24, Deferred payroll taxes (1) $ 34.2 $ 12.9 Insurance 33.5 33.7 Deferred franchise fees 11.4 11.6 Unrecognized tax benefits 2.1 2.1 Other 6.2 6.8 $ 87.4 $ 67.1 (1) Deferred payroll taxes primarily consists of the deferral of the employer portion of certain payroll related taxes as allowed under the CARES Act which will be repaid in two equal installments on December 31, 2021, and December 31, 2022. |
SHAREHOLDERS' DEFICIT
SHAREHOLDERS' DEFICIT | 3 Months Ended |
Sep. 23, 2020 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Deficit | The changes in Total shareholders’ deficit during the thirteen week periods ended September 23, 2020 and September 25, 2019, respectively, were as follows: Thirteen Week Period Ended September 23, 2020 Common Stock Additional Accumulated Deficit Treasury Accumulated Total Balance at June 24, 2020 $ 7.0 $ 669.4 $ (397.5) $ (751.8) $ (6.2) $ (479.1) Net income — — 10.7 — — 10.7 Other comprehensive income — — — — 0.3 0.3 Dividends — — 0.0 — — 0.0 Stock-based compensation — 3.9 — — — 3.9 Purchases of treasury stock — (1.1) — (2.8) — (3.9) Issuances of common stock — (9.0) — 12.0 — 3.0 Balance at September 23, 2020 $ 7.0 $ 663.2 $ (386.8) $ (742.6) $ (5.9) $ (465.1) Thirteen Week Period Ended September 25, 2019 Common Stock Additional Retained Treasury Accumulated Total Balance at June 26, 2019 $ 17.6 $ 522.0 $ 2,771.2 $ (4,083.4) $ (5.6) $ (778.2) Effect of ASC 842 adoption — — 195.9 — — 195.9 Net income — — 14.9 — — 14.9 Other comprehensive loss — — — — (0.2) (0.2) Dividends ($0.38 per share) — — (14.6) — — (14.6) Stock-based compensation — 7.1 — — — 7.1 Purchases of treasury stock — (0.3) — (11.0) — (11.3) Issuances of common stock — (3.7) — 5.0 — 1.3 Balance at September 25, 2019 $ 17.6 $ 525.1 $ 2,967.4 $ (4,089.4) $ (5.8) $ (585.1) Dividends In the fourth quarter of fiscal 2020, our quarterly cash dividend was suspended in response to the COVID-19 pandemic. Before this suspension, our Board of Directors approved quarterly dividends of $0.38 per share paid quarterly. In the thirteen week period ended September 23, 2020, dividends paid solely related to the previously accrued dividends for restricted share awards that vested in the period. Restricted share award dividends are accrued in Other accrued liabilities for the current portion to vest within 12 months, and Other liabilities for the portion that will vest after one year. Before the suspension, i n the thirteen week period ended September 25, 2019, we paid dividends of $14.8 million to common stock shareholders. Stock-based Compensation The following table presents the stock options and restricted share awards granted, and related weighted average exercise price and fair value per share amounts. Thirteen Week Periods Ended September 23, September 25, Stock options Stock options granted — 0.3 Weighted average exercise price per share $ — $ 38.51 Weighted average fair value per share $ — $ 6.83 Restricted share awards Restricted share awards granted 0.5 0.3 Weighted average fair value per share $ 39.76 $ 38.51 Share Repurchases In the fourth quarter of fiscal 2020, our share repurchase program was suspended in response to the COVID-19 pandemic. Prior to the suspension, our share repurchase program was used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. We evaluated potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings, and planned investment and financing needs. Repurchased shares are reflected as an increase in Treasury stock within Shareholders’ deficit in the Consolidated Balance Sheets (Unaudited) . In the thirteen week period ended September 23, 2020, we repurchased 0.1 million shares from team members to satisfy tax withholding obligations on the vesting of restricted shares. Before the suspension, i n the thirteen week period ended September 25, 2019, we repurchased 0.3 million shares of our common stock for $11.3 million. Effect of Adoption of ASC 842 In the first quarter of fiscal 2020, we adopted the lease accounting standard, ASC 842, and recorded a $195.9 million cumulative effect adjustment increase to Retained earnings for the change in accounting principle. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Sep. 23, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Cash paid for income taxes and interest is as follows: Thirteen Week Periods Ended September 23, September 25, Income taxes, net of (refunds) $ (2.1) $ (11.8) Interest, net of amounts capitalized 5.5 6.1 Non-cash investing and financing activities are as follows: Thirteen Week Periods Ended September 23, September 25, Retirement of fully depreciated assets $ 2.5 $ 4.3 Dividends declared but not paid — 14.6 Accrued capital expenditures 6.4 14.2 |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Sep. 23, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Lease Commitments We have, in certain cases, divested brands or sold restaurants to franchisees and have not been released from lease guarantees for the related restaurants. As of September 23, 2020 and June 24, 2020, we have outstanding lease guarantees or are secondarily liable for $37.7 million and $39.7 million, respectively. These amounts represent the expected maximum potential liability of future rent payments under the leases. These leases have been assigned to the buyers and expire at the end of the respective lease terms, which range from fiscal 2021 through fiscal 2027. In the event of default under a lease by a franchisee or owner of a divested brand, the indemnity and default clauses in our agreements with such third parties and applicable laws govern our ability to pursue and recover amounts we may pay on behalf of such parties. Letters of Credit We provide letters of credit to various insurers to collateralize obligations for outstanding claims. As of September 23, 2020, we had $29.5 million in undrawn standby letters of credit outstanding. All standby letters of credit are renewable within the next 1 to 12 months. Cyber Security Incident In fiscal 2018, we discovered malware at certain Chili’s restaurants that may have resulted in unauthorized access or acquisition of customer payment card data. Cyber Security Related Charges To limit our exposure to cyber security events, we maintain cyber liability insurance coverage. Our cyber liability insurance policy contained a $2.0 million retention that was fully accrued during fiscal 2018. Since the incident, through September 23, 2020, we have incurred total cumulative costs of $8.2 million related to the cyber security incident. This includes the $2.0 million retention recorded, $2.2 million in costs that have been reimbursed by our insurance carriers, $3.5 million of receivables for costs incurred that we believe are reimbursable and probable of recovery under our insurance coverage and $0.5 million of costs not reimbursable by our insurance carriers. We have settled claims from three payment card companies, and the settlement amounts are included in the costs described above. We may incur legal and professional services expenses in future periods. In the event of future litigation, we will record an estimate for any additional losses at the time when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. Cyber Security Litigation The Company was named as a defendant in a putative class action lawsuit in the United States District Court for the Middle District of Florida styled In re: Brinker Data Incident Litigation, Case No. 18-cv-00686-TJC-MCR (the “Litigation”) relating to the cyber security incident described above. In the Litigation, plaintiffs assert various claims stemming from the cyber security incident at the Company’s Chili’s restaurants involving customer payment card information and seek monetary damages in excess of $5.0 million, injunctive and declaratory relief, and attorney’s fees and costs. On July 27, 2020, the Court granted our second motion to dismiss as to all of Plaintiffs’ claims for injunctive relief on Article III standing grounds, dismissing Plaintiffs’ declaratory judgment and Florida Deceptive and Unfair Trade Practices Act (FDUTPA) claims outright and dismissing the injunctive relief portions of their UCL claims. The Court further ordered Brinker to file an answer to Plaintiffs’ Third Amended Complaint by August 23, 2020, and ordered the parties to mediate the case by November 20, 2020, prior to the class certification hearing in January 2021. Plaintiffs filed their motion for class certification on August 31, 2020, and Brinker’s deadline to file its opposition to Plaintiffs’ motion is October 30, 2020. Mediation is scheduled for November 18, 2020. We believe we have defenses and intend to continue defending the Litigation. As such, as of September 23, 2020, we have concluded that a loss, or range of loss, from this matter is not determinable, therefore, we have not recorded a liability related to the Litigation. We will continue to evaluate this matter based on new information as it becomes available. Legal Proceedings Evaluating contingencies related to litigation is a complex process involving subjective judgment on the potential outcome of future events, and the ultimate resolution of litigated claims may differ from our current analysis. Accordingly, we review the adequacy of accruals and disclosures pertaining to litigated matters each quarter in consultation with legal counsel and we assess the probability and range of possible losses associated with contingencies for potential accrual in the Consolidated Financial Statements. We are engaged in various legal proceedings and have certain unresolved claims pending. Liabilities have been established based on our best estimates of our potential liability in certain of these matters. Based upon consultation with legal counsel, management is of the opinion that there are no matters pending or threatened which are expected to have a material adverse effect, individually or in the aggregate, on the consolidated financial condition or results of operations. |
FISCAL 2020 CHILI'S RESTAURANT
FISCAL 2020 CHILI'S RESTAURANT ACQUISITION | 3 Months Ended |
Sep. 23, 2020 | |
Business Combinations [Abstract] | |
Fiscal 2020 Chili's Restaurant Acquisition | In the first quarter of fiscal 2020, on September 5, 2019, we completed the acquisition of certain assets and liabilities related to 116 previously franchised Chili’s restaurants located in the Midwest United States. Pro-forma financial information of the acquisition is not presented due to the immaterial impact of the financial results of the acquired restaurants in the Consolidated Financial Statements (Unaudited). Total cash consideration of $96.0 million, including post-closing adjustments, was funded with borrowings from our existing credit facility. We accounted for this acquisition as a business combination. The results of operations, and assets and liabilities, of these restaurants are included in the Consolidated Financial Statements (Unaudited) from the date of acquisition. The assets and liabilities of these restaurants are recorded at their fair values. A preliminary net acquisition-related gain of $0.5 million was recorded during the thirteen week period ended September 25, 2019 to Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Unaudited) that consisted of $2.6 million of franchise deferred revenues balance that were fully recognized at the date of the acquisition, partially offset by $1.5 million of professional services, transaction and transition related costs associated with the purchase, and $0.6 million of related franchise straight-line rent balances, net of market leasehold improvement adjustments that were fully recognized at the date of the acquisition. The final purchase price accounting was completed in the third quarter of fiscal 2020, and the final amounts recorded for the fair value of acquired assets and liabilities at the acquisition date were as follows: Fair Value September 5, 2019 Current assets (1) $ 7.3 Property and equipment 60.3 Operating lease assets 163.5 Reacquired franchise rights (2) 6.9 Goodwill (3) 22.4 Total assets acquired 260.4 Current liabilities (4) 9.1 Operating lease liabilities, less current portion 158.3 Total liabilities assumed 167.4 Net assets acquired (5) $ 93.0 (1) Current assets included petty cash, inventory, and restaurant supplies. (2) Reacquired franchise rights have a weighted average amortization period of approximately 8 years. (3) Goodwill is expected to be deductible for tax purposes. The portion of the purchase price attributable to goodwill represents the benefits expected as a result of the acquisition, including sales and unit growth opportunities, and the benefit of the assembled workforce of the acquired restaurants. (4) Current liabilities included current portion of operating lease liabilities, gift card liability and accrued property tax. (5) Net assets acquired at fair value are equal to the total purchase price of $99.0 million, less $3.2 million of closing adjustments and $2.8 million allocated to prepayment of leases entered into between us and the franchisee. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Sep. 23, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Revolver Activity Subsequent to the first quarter of fiscal 2021, $20.0 million of net payments were made on the revolving credit facility. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Sep. 23, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Year | Fiscal Year We have a 52/53 week fiscal year ending on the last Wednesday in June. We utilize a 13 week accounting period for quarterly reporting purposes, except in years containing 53 weeks when the fourth quarter contains 14 weeks. Fiscal year 2021 contains 53 weeks and will end on June 30, 2021. Fiscal year 2020, which ended on June 24, 2020, contained 52 weeks. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements is in conformity with generally accepted accounting principles in the United States (“GAAP”) and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and costs and expenses in the reporting periods. Actual results could differ from those estimates. The foreign currency translation adjustment included in Comprehensive income in the Consolidated Statements of Comprehensive Income (Unaudited) represents the unrealized impact of translating the financial statements of our Canadian restaurants from Canadian dollars to United States dollars. This amount is not included in Net income and would only be realized upon disposition of our Canadian restaurants. The related Accumulated other comprehensive loss is presented in the Consolidated Balance Sheets (Unaudited). The information furnished herein reflects all adjustments (consisting only of normal recurring accruals and adjustments) which are, in our opinion, necessary to fairly state the interim operating results, financial position and cash flows for the respective periods. However, these operating results are not necessarily indicative of the results expected for the full fiscal year. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with GAAP, have been omitted pursuant to SEC rules and regulations. The Notes to the Consolidated Financial Statements (Unaudited) should be read in conjunction with the Notes to the Consolidated Financial Statements contained in our June 24, 2020 Form 10-K. We believe the disclosures are sufficient for interim financial reporting purposes. All amounts in the Notes to the Consolidated Financial Statements (Unaudited) are presented in millions unless otherwise specified. |
Risks and Uncertainties | Risks and Uncertainties In January 2020, the Secretary of Health and Human Services declared the novel strain of coronavirus (“COVID-19”) a public health emergency. Subsequently in March 2020, the World Health Organization declared COVID-19 a global pandemic that resulted in a significant reduction in sales at our restaurants due to changes in consumer behavior as social distancing practices, dining room closures and other restrictions were mandated or encouraged by federal, state and local governments. In response to COVID-19, the Company temporarily closed all Company-owned restaurant dining and banquet rooms at the end of the third quarter of fiscal 2020 resulting in a transition to an off-premise business model. Beginning on April 27, 2020 we began to reopen certain dining room locations as permitted by state and local governments. As of September 23, 2020, substantially all of our restaurant dining rooms and patios were opened with limited seating capacity. The capacity limitations and personal safety preferences in the reopened dining rooms have resulted in reduced traffic in the Company’s restaurants in comparison to pre-pandemic levels. See Note 4 - Other Gains and Charges for details regarding the financial impact of the COVID-19 pandemic on our financial results. At this time, the ultimate impact of COVID-19 cannot be reasonably estimated due to the uncertainty about the extent and the duration of the spread of the virus. A lack of containment or another wave could lead to capacity restrictions, restaurant closures, disruptions in our supply chain and restaurant staffing which could adversely impact our financial results. |
EFFECT OF NEW ACCOUNTING STAN_2
EFFECT OF NEW ACCOUNTING STANDARDS (Policies) | 3 Months Ended |
Sep. 23, 2020 | |
Effect of New Accounting Standards [Abstract] | |
New Accounting Standards Implemented in Fiscal 2021 | New Accounting Standards Implemented in Fiscal 2021 Measurement of Credit Losses on Financial Instruments, ASU No. 2016-13 - In June 2013, the FASB issued ASU 2016-13, creating ASC Topic 326 – Financial Instruments – Credit Losses. ASU 2016-13 is intended to improve financial reporting by requiring timelier recording of credit losses on financial assets measured at amortized cost basis (including, but not limited to loans), net investments in leases recognized as lessor and off-balance sheet credit exposures. ASU 2016-13 eliminates the probable initial recognition threshold under the current incurred loss methodology for recognizing credit losses. Instead, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The new guidance is effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, which required us to adopt these provisions in the first quarter of fiscal 2021. The update was applied on a prospective basis. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements. Fair Value Measurement (Topic 820): Disclosure Framework, ASU No. 2018-13 - Changes to the Disclosure Requirements for Fair Value Measurement - In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The amendments under ASU 2018-13 add an incremental requirement, among others, for entities to disclose (1) the range and weighted average used to develop significant unobservable inputs and (2) how the weighted average was calculated for fair value measurements categorized within Level 3 of the fair value hierarchy. Entities may disclose other quantitative information in lieu of the weighted average if they determine that such information embodies a more reasonable and rational method of reflecting the distribution of significant unobservable inputs used to develop Level 3 fair value measurements. The new guidance is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, which required us to adopt these provisions in the first quarter of fiscal 2021. The update was applied on a prospective basis. The adoption of this guidance did not have an impact on our Consolidated Financial Statements. Simplifying the Accounting for Income Taxes, ASU No. 2019-12 - In December 2019, the FASB issued ASU 2019-12, which removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The new guidance is effective for public entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, which will require us to adopt these provisions in the first quarter of fiscal 2022, and early adoption is permitted. We elected to early adopt this update in the first quarter of fiscal 2021. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements. |
New Accounting Standards That Will Be Implemented in Future Periods | New Accounting Standards That Will Be Implemented In Future Periods Reference Rate Reform, ASU 2020-04 - In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting. These updates are intended to simplify the market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This guidance is effective upon issuance to modifications made as early as the beginning of the interim period through December 31, 2022. We are currently assessing the impact that this guidance will have on our Consolidated Financial Statements. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Sep. 23, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Changes in Deferred Franchise and Development Fees | Deferred Franchise and Development Fees Balance as of June 24, 2020 $ 12.7 Additions 0.1 Amount recognized to Franchise and other revenues (0.3) Balance as of September 23, 2020 $ 12.5 |
Franchise and Development Fees Revenue Recognition | Fiscal Year Franchise and Development Fees Revenue Recognition Remainder of 2021 $ 0.9 2022 1.1 2023 1.0 2024 1.0 2025 1.0 Thereafter 7.5 $ 12.5 |
Deferred Gift Card Revenues | Deferred Gift Card Revenues Total deferred revenues related to our gift cards include the full value of unredeemed gift card balances less recognized breakage and the unamortized portion of third party fees. Gift Card Liability Balance as of June 24, 2020 $ 109.9 Gift card sales 19.0 Gift card redemptions recognized to Company sales (19.9) Gift card breakage recognized to Franchise and other revenues (2.2) Other 0.3 Balance as of September 23, 2020 $ 107.1 |
OTHER GAINS AND CHARGES (Tables
OTHER GAINS AND CHARGES (Tables) | 3 Months Ended |
Sep. 23, 2020 | |
Other Gains and Charges [Abstract] | |
Other Gains And Charges | Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Unaudited) consist of the following: Thirteen Week Periods Ended September 23, September 25, Restaurant closure charges $ 1.5 $ 0.2 COVID-19 related charges 1.2 — Remodel-related costs 0.2 0.7 Lease modification gain, net (0.5) (3.1) Other 1.4 1.3 $ 3.8 $ (0.9) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Sep. 23, 2020 | |
Income Tax Disclosure [Abstract] | |
Effective Income Tax Rate Schedule | Thirteen Week Periods Ended September 23, September 25, Effective income tax rate (4.9) % 11.3 % |
Reconciliation Between Reported Provision for Income Taxes and Amount Computed by Statutory Federal Income Tax Rate | A reconciliation between the reported provision for income taxes and the amount computed by applying the statutory Federal income tax rate to Provision (benefit) for income taxes is as follows: Thirteen Week Period Ended September 23, Income tax expense at statutory rate $ 2.1 FICA tax credit (1.9) Stock-based compensation tax windfall (1.1) State income taxes, net of federal benefit 0.6 Other (0.2) Provision (benefit) for income taxes $ (0.5) |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 3 Months Ended |
Sep. 23, 2020 | |
Earnings Per Share [Abstract] | |
Basic to Diluted Weighted Average Number of Shares Reconciliation | Basic weighted average shares outstanding are reconciled to Diluted weighted average shares outstanding as follows: Thirteen Week Periods Ended September 23, September 25, Basic weighted average shares outstanding 45.1 37.5 Dilutive stock options 0.1 0.1 Dilutive restricted shares 0.5 0.5 Total dilutive impact 0.6 0.6 Diluted weighted average shares outstanding 45.7 38.1 Awards excluded due to anti-dilutive effect 1.6 1.4 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Sep. 23, 2020 | |
Segment Reporting [Abstract] | |
Segment Information Schedule | The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP: Thirteen Week Period Ended September 23, 2020 Chili’s Maggiano’s Other Consolidated Company sales $ 675.0 $ 53.2 $ — $ 728.2 Royalties 6.6 0.0 — 6.6 Franchise fees and other revenues 4.9 0.4 — 5.3 Franchise and other revenues 11.5 0.4 — 11.9 Total revenues 686.5 53.6 — 740.1 Food and beverage costs 180.8 12.7 — 193.5 Restaurant labor 228.2 19.8 — 248.0 Restaurant expenses 181.4 20.8 0.3 202.5 Depreciation and amortization 30.6 3.6 3.2 37.4 General and administrative 5.4 1.3 23.8 30.5 Other (gains) and charges 3.6 0.1 0.1 3.8 Total operating costs and expenses 630.0 58.3 27.4 715.7 Operating income (loss) 56.5 (4.7) (27.4) 24.4 Interest expenses 1.4 — 13.2 14.6 Other income, net (0.1) — (0.3) (0.4) Income (loss) before income taxes $ 55.2 $ (4.7) $ (40.3) $ 10.2 Segment assets $ 1,937.1 $ 221.8 $ 176.4 $ 2,335.3 Segment goodwill 149.3 38.4 — 187.7 Payments for property and equipment 11.6 0.5 1.5 13.6 Thirteen Week Period Ended September 25, 2019 Chili’s (1) Maggiano’s Other Consolidated Company sales $ 677.5 $ 86.4 $ — $ 763.9 Royalties 11.8 0.1 — 11.9 Franchise fees and other revenues 6.3 3.9 — 10.2 Franchise and other revenues 18.1 4.0 — 22.1 Total revenues 695.6 90.4 — 786.0 Food and beverage costs 182.4 21.4 — 203.8 Restaurant labor 233.1 35.4 — 268.5 Restaurant expenses 180.8 26.3 0.2 207.3 Depreciation and amortization 30.7 4.0 3.4 38.1 General and administrative 9.1 1.7 27.2 38.0 Other (gains) and charges (1.6) 0.1 0.6 (0.9) Total operating costs and expenses 634.5 88.9 31.4 754.8 Operating income (loss) 61.1 1.5 (31.4) 31.2 Interest expenses 0.9 — 14.0 14.9 Other income, net (0.2) — (0.3) (0.5) Income (loss) before income taxes $ 60.4 $ 1.5 $ (45.1) $ 16.8 Payments for property and equipment $ 16.1 $ 2.3 $ 2.1 $ 20.5 (1) Chili’s segment information for fiscal 2020 includes the results of operations related to the 116 restaurants purchased from a former franchisee subsequent to the September 5, 2019 acquisition date. Refer to Note 15 - Fiscal 2020 Chili’s Restaurant Acquisition for details. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Sep. 23, 2020 | |
Fair Value Disclosures [Abstract] | |
Debt Instruments - Carrying Values and Estimated Fair Values Schedule | The 3.875% notes and 5.000% notes carrying amounts, which are net of unamortized debt issuance costs and discounts, and fair values are as follows, refer to Note 10 - Debt for further details: September 23, 2020 June 24, 2020 Carrying Amount Fair Value Carrying Amount Fair Value 3.875% notes $ 299.1 $ 293.3 $ 299.0 $ 282.8 5.000% notes 346.9 357.4 346.7 330.8 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Sep. 23, 2020 | |
Leases [Abstract] | |
Lease Amounts Included in the Consolidated Statements of Comprehensive Income | The components of lease expenses included in the Consolidated Statements of Comprehensive Income (Unaudited) were as follows: Thirteen Week Periods Ended September 23, September 25, Operating lease cost $ 41.7 $ 37.3 Variable lease cost 14.0 13.3 Finance lease amortization 4.0 2.7 Finance lease interest 1.5 0.9 Short-term lease cost 0.1 0.2 Sublease income (1.0) (1.2) Total lease costs, net $ 60.3 $ 53.2 |
Lease Maturity Analysis | As of September 23, 2020, the discounted future minimum lease payments on finance and operating leases, as well as sublease income, were as follows: September 23, 2020 Fiscal Year Finance Leases Operating Leases Sublease Income Remainder of 2021 $ 17.5 $ 135.8 $ 2.5 2022 22.4 169.2 3.2 2023 20.9 157.6 2.6 2024 11.4 146.6 1.9 2025 9.0 136.6 1.8 Thereafter 53.6 864.5 4.8 Total future lease payments (1) 134.8 1,610.3 $ 16.8 Less: Imputed interest 31.0 447.3 Present value of lease liability $ 103.8 $ 1,163.0 (1) Finance and Operating leases total future lease payments represent the contractual obligations due under the contract, including certain cancellable option periods where we are reasonably assured to exercise the |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended | |
Sep. 23, 2020 | ||
Debt Disclosure [Abstract] | ||
Long-term Debt Schedule | Long-term debt consists of the following: September 23, June 24, Revolving credit facility $ 426.3 $ 472.9 5.000% notes 350.0 350.0 3.875% notes 300.0 300.0 Finance lease obligations 103.8 102.1 Total long-term debt 1,180.1 1,225.0 Less: unamortized debt issuance costs and discounts (4.1) (4.3) Total long-term debt, less unamortized debt issuance costs and discounts 1,176.0 1,220.7 Less: current installments of long-term debt (1) (17.7) (12.2) Long-term debt less current installments $ 1,158.3 $ 1,208.5 (1) Current installments of long-term debt consist only of finance leases for the periods presented and are recorded within Other accrued liabilities in the Consolidated Balance Sheets (Unaudited). Refer to Note 11 - Accrued and Other Liabilities for further details. | [1] |
[1] | Current installments of long-term debt consist only of finance leases for the periods presented and are recorded within Other accrued liabilities in the Consolidated Balance Sheets (Unaudited). Refer to Note 11 - Accrued and Other Liabilities for further details. |
ACCRUED AND OTHER LIABILITIES (
ACCRUED AND OTHER LIABILITIES (Tables) | 3 Months Ended |
Sep. 23, 2020 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Other Accrued Liabilities Schedule | Other accrued liabilities consist of the following: September 23, June 24, Property tax $ 27.0 $ 22.9 Insurance 21.3 20.7 Sales tax 18.0 13.3 Current installments of finance leases 17.7 12.2 Interest 14.9 7.5 Utilities and services 8.4 8.3 Cyber security incident 3.4 3.4 Other (1) 11.2 12.3 $ 121.9 $ 100.6 (1) Other primarily consists of accruals for banquet deposits for Maggiano’s events, charitable donations, rent-related expenses, deferred franchise and development fees, and other various accruals. |
Other Liabilities Schedule | Other liabilities consist of the following: September 23, June 24, Deferred payroll taxes (1) $ 34.2 $ 12.9 Insurance 33.5 33.7 Deferred franchise fees 11.4 11.6 Unrecognized tax benefits 2.1 2.1 Other 6.2 6.8 $ 87.4 $ 67.1 (1) Deferred payroll taxes primarily consists of the deferral of the employer portion of certain payroll related taxes as allowed under the CARES Act which will be repaid in two equal installments on December 31, 2021, and December 31, 2022. |
SHAREHOLDERS' DEFICIT (Tables)
SHAREHOLDERS' DEFICIT (Tables) | 3 Months Ended |
Sep. 23, 2020 | |
Stockholders' Equity Note [Abstract] | |
Changes in Shareholders' Deficit Schedule | The changes in Total shareholders’ deficit during the thirteen week periods ended September 23, 2020 and September 25, 2019, respectively, were as follows: Thirteen Week Period Ended September 23, 2020 Common Stock Additional Accumulated Deficit Treasury Accumulated Total Balance at June 24, 2020 $ 7.0 $ 669.4 $ (397.5) $ (751.8) $ (6.2) $ (479.1) Net income — — 10.7 — — 10.7 Other comprehensive income — — — — 0.3 0.3 Dividends — — 0.0 — — 0.0 Stock-based compensation — 3.9 — — — 3.9 Purchases of treasury stock — (1.1) — (2.8) — (3.9) Issuances of common stock — (9.0) — 12.0 — 3.0 Balance at September 23, 2020 $ 7.0 $ 663.2 $ (386.8) $ (742.6) $ (5.9) $ (465.1) Thirteen Week Period Ended September 25, 2019 Common Stock Additional Retained Treasury Accumulated Total Balance at June 26, 2019 $ 17.6 $ 522.0 $ 2,771.2 $ (4,083.4) $ (5.6) $ (778.2) Effect of ASC 842 adoption — — 195.9 — — 195.9 Net income — — 14.9 — — 14.9 Other comprehensive loss — — — — (0.2) (0.2) Dividends ($0.38 per share) — — (14.6) — — (14.6) Stock-based compensation — 7.1 — — — 7.1 Purchases of treasury stock — (0.3) — (11.0) — (11.3) Issuances of common stock — (3.7) — 5.0 — 1.3 Balance at September 25, 2019 $ 17.6 $ 525.1 $ 2,967.4 $ (4,089.4) $ (5.8) $ (585.1) |
Stock-based Compensation Schedule | The following table presents the stock options and restricted share awards granted, and related weighted average exercise price and fair value per share amounts. Thirteen Week Periods Ended September 23, September 25, Stock options Stock options granted — 0.3 Weighted average exercise price per share $ — $ 38.51 Weighted average fair value per share $ — $ 6.83 Restricted share awards Restricted share awards granted 0.5 0.3 Weighted average fair value per share $ 39.76 $ 38.51 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Sep. 23, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Cash Paid for Income Taxes and Interest Schedule | Cash paid for income taxes and interest is as follows: Thirteen Week Periods Ended September 23, September 25, Income taxes, net of (refunds) $ (2.1) $ (11.8) Interest, net of amounts capitalized 5.5 6.1 |
Non-cash Investing and Financing Activities Schedule | Non-cash investing and financing activities are as follows: Thirteen Week Periods Ended September 23, September 25, Retirement of fully depreciated assets $ 2.5 $ 4.3 Dividends declared but not paid — 14.6 Accrued capital expenditures 6.4 14.2 |
FISCAL 2020 CHILI'S RESTAURAN_2
FISCAL 2020 CHILI'S RESTAURANT ACQUISITION (Tables) | 3 Months Ended |
Sep. 23, 2020 | |
Business Combinations [Abstract] | |
Fair Value of Acquired Assets and Liabilities | The final purchase price accounting was completed in the third quarter of fiscal 2020, and the final amounts recorded for the fair value of acquired assets and liabilities at the acquisition date were as follows: Fair Value September 5, 2019 Current assets (1) $ 7.3 Property and equipment 60.3 Operating lease assets 163.5 Reacquired franchise rights (2) 6.9 Goodwill (3) 22.4 Total assets acquired 260.4 Current liabilities (4) 9.1 Operating lease liabilities, less current portion 158.3 Total liabilities assumed 167.4 Net assets acquired (5) $ 93.0 (1) Current assets included petty cash, inventory, and restaurant supplies. (2) Reacquired franchise rights have a weighted average amortization period of approximately 8 years. (3) Goodwill is expected to be deductible for tax purposes. The portion of the purchase price attributable to goodwill represents the benefits expected as a result of the acquisition, including sales and unit growth opportunities, and the benefit of the assembled workforce of the acquired restaurants. (4) Current liabilities included current portion of operating lease liabilities, gift card liability and accrued property tax. (5) Net assets acquired at fair value are equal to the total purchase price of $99.0 million, less $3.2 million of closing adjustments and $2.8 million allocated to prepayment of leases entered into between us and the franchisee. |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | Sep. 23, 2020CountryRestaurantsLocation |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,660 |
Number of foreign countries in which entity operates | Country | 28 |
Number of U.S. territories in which entity operates | Location | 2 |
Entity Operated Units [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,116 |
Franchised Units [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 544 |
REVENUE RECOGNITION (Deferred F
REVENUE RECOGNITION (Deferred Franchise and Development Fees) (Details) - Deferred Franchise and Development Fees $ in Millions | 3 Months Ended |
Sep. 23, 2020USD ($) | |
Change in deferred franchise and development fees [Roll Forward] | |
Balance as of June 24, 2020 | $ 12.7 |
Additions | 0.1 |
Amount recognized to Franchise and other revenues | (0.3) |
Balance as of September 23, 2020 | $ 12.5 |
REVENUE RECOGNITION (Remaining
REVENUE RECOGNITION (Remaining Deferred Franchise and Development Fees to be Recognized) (Details) $ in Millions | Sep. 23, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 12.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-09-24 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 0.9 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 1.1 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-06-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 1 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-06-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 1 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-06-27 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 1 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-06-26 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 7.5 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 16 years |
REVENUE RECOGNITION (Deferred G
REVENUE RECOGNITION (Deferred Gift Card Revenues) (Details) $ in Millions | 3 Months Ended |
Sep. 23, 2020USD ($) | |
Deferred Gift Card Liability Rollforward [Roll Forward] | |
Gift Card Liability at June 24, 2020 | $ 109.9 |
Gift Card Liability at September 23, 2020 | 107.1 |
Gift card sales | |
Deferred Gift Card Liability Rollforward [Roll Forward] | |
Increase in Gift card liability | 19 |
Gift card redemptions | |
Deferred Gift Card Liability Rollforward [Roll Forward] | |
Gift card redemptions recognized to Company sales | (19.9) |
Gift card breakage | |
Deferred Gift Card Liability Rollforward [Roll Forward] | |
Gift card breakage recognized to Franchise and other revenues | (2.2) |
Gift card other | |
Deferred Gift Card Liability Rollforward [Roll Forward] | |
Increase in Gift card liability | $ 0.3 |
OTHER GAINS AND CHARGES (Schedu
OTHER GAINS AND CHARGES (Schedule of Other Gains and Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Restaurant closure charges | $ 1.5 | $ 0.2 |
COVID-19 related charges | 1.2 | 0 |
Remodel-related costs | 0.2 | 0.7 |
Lease modification gain, net | (0.5) | (3.1) |
Other | 1.4 | 1.3 |
Other (gains) and charges | $ 3.8 | $ (0.9) |
INCOME TAXES (Effective and Sta
INCOME TAXES (Effective and Statutory Tax Rates) (Details) | 3 Months Ended | |
Sep. 23, 2020Rate | Sep. 25, 2019Rate | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | (4.90%) | 11.30% |
Fiscal federal statutory rate | 21.00% | 21.00% |
INCOME TAXES (Reconciliation Be
INCOME TAXES (Reconciliation Between Reported and Computed by Statutory Federal Income Tax Rate) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense at statutory rate | $ 2.1 | |
FICA tax credit | (1.9) | |
Stock-based compensation tax windfall | (1.1) | |
State income taxes, net of federal benefit | 0.6 | |
Other | (0.2) | |
Provision (benefit) for income taxes | $ (0.5) | $ 1.9 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - shares shares in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Reconciliation of Weighted Average Shares Outstanding [Line Items] | ||
Basic weighted average shares outstanding | 45.1 | 37.5 |
Total dilutive impact | 0.6 | 0.6 |
Diluted weighted average shares outstanding | 45.7 | 38.1 |
Awards excluded due to anti-dilutive effect | 1.6 | 1.4 |
Restricted Share Award [Member] | ||
Reconciliation of Weighted Average Shares Outstanding [Line Items] | ||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0.5 | 0.5 |
Stock Options [Member] | ||
Reconciliation of Weighted Average Shares Outstanding [Line Items] | ||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0.1 | 0.1 |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Segment Reporting) (Details) $ in Millions | 3 Months Ended | |||||
Sep. 23, 2020USD ($)CountryRestaurantsLocationterritories | Sep. 25, 2019USD ($) | Jun. 24, 2020USD ($) | Sep. 05, 2019USD ($)Restaurants | |||
Segment Reporting Information [Line Items] | ||||||
Number of foreign countries in which entity operates | Country | 28 | |||||
Number of U.S. territories in which entity operates | Location | 2 | |||||
Segment Information, disclosure of major customers | We do not rely on any major customers as a source of sales, | |||||
Total revenues | $ 740.1 | $ 786 | ||||
Food and beverage costs | 193.5 | 203.8 | ||||
Restaurant labor | 248 | 268.5 | ||||
Restaurant expenses | 202.5 | 207.3 | ||||
Depreciation and amortization | 37.4 | 38.1 | ||||
General and administrative | 30.5 | 38 | ||||
Other (gains) and charges | 3.8 | (0.9) | ||||
Total operating costs and expenses | 715.7 | 754.8 | ||||
Operating income (loss) | 24.4 | 31.2 | ||||
Interest expenses | 14.6 | 14.9 | ||||
Other income, net | (0.4) | (0.5) | ||||
Income before provision for income taxes | 10.2 | 16.8 | ||||
Segment assets | 2,335.3 | $ 2,356 | ||||
Segment goodwill | 187.7 | $ 187.6 | ||||
Payments for property and equipment | $ 13.6 | 20.5 | ||||
Number of restaurants | Restaurants | 1,660 | |||||
Chili's Restaurants [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Number of foreign countries in which entity operates | Country | 28 | |||||
Number of U.S. territories in which entity operates | territories | 2 | |||||
Total revenues | $ 686.5 | 695.6 | [1] | |||
Food and beverage costs | 180.8 | 182.4 | [1] | |||
Restaurant labor | 228.2 | 233.1 | [1] | |||
Restaurant expenses | 181.4 | 180.8 | [1] | |||
Depreciation and amortization | 30.6 | 30.7 | [1] | |||
General and administrative | 5.4 | 9.1 | [1] | |||
Other (gains) and charges | 3.6 | (1.6) | [1] | |||
Total operating costs and expenses | 630 | 634.5 | [1] | |||
Operating income (loss) | 56.5 | 61.1 | [1] | |||
Interest expenses | 1.4 | 0.9 | [1] | |||
Other income, net | (0.1) | (0.2) | [1] | |||
Income before provision for income taxes | 55.2 | 60.4 | [1] | |||
Segment assets | 1,937.1 | |||||
Segment goodwill | 149.3 | |||||
Payments for property and equipment | 11.6 | 16.1 | [1] | |||
Maggiano's Restaurants [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenues | 53.6 | 90.4 | ||||
Food and beverage costs | 12.7 | 21.4 | ||||
Restaurant labor | 19.8 | 35.4 | ||||
Restaurant expenses | 20.8 | 26.3 | ||||
Depreciation and amortization | 3.6 | 4 | ||||
General and administrative | 1.3 | 1.7 | ||||
Other (gains) and charges | 0.1 | 0.1 | ||||
Total operating costs and expenses | 58.3 | 88.9 | ||||
Operating income (loss) | (4.7) | 1.5 | ||||
Interest expenses | 0 | 0 | ||||
Other income, net | 0 | 0 | ||||
Income before provision for income taxes | (4.7) | 1.5 | ||||
Segment assets | 221.8 | |||||
Segment goodwill | 38.4 | |||||
Payments for property and equipment | 0.5 | 2.3 | ||||
Corporate and Other [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenues | 0 | 0 | ||||
Food and beverage costs | 0 | 0 | ||||
Restaurant labor | 0 | 0 | ||||
Restaurant expenses | 0.3 | 0.2 | ||||
Depreciation and amortization | 3.2 | 3.4 | ||||
General and administrative | 23.8 | 27.2 | ||||
Other (gains) and charges | 0.1 | 0.6 | ||||
Total operating costs and expenses | 27.4 | 31.4 | ||||
Operating income (loss) | (27.4) | (31.4) | ||||
Interest expenses | 13.2 | 14 | ||||
Other income, net | (0.3) | (0.3) | ||||
Income before provision for income taxes | (40.3) | (45.1) | ||||
Segment assets | 176.4 | |||||
Segment goodwill | 0 | |||||
Payments for property and equipment | 1.5 | 2.1 | ||||
Company sales [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 728.2 | 763.9 | ||||
Company sales [Member] | Chili's Restaurants [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 675 | 677.5 | [1] | |||
Company sales [Member] | Maggiano's Restaurants [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 53.2 | 86.4 | ||||
Company sales [Member] | Corporate and Other [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 0 | 0 | ||||
Royalties [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 6.6 | 11.9 | ||||
Royalties [Member] | Chili's Restaurants [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 6.6 | 11.8 | [1] | |||
Royalties [Member] | Maggiano's Restaurants [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 0 | 0.1 | ||||
Royalties [Member] | Corporate and Other [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 0 | 0 | ||||
Franchise fees and other revenues [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 5.3 | 10.2 | ||||
Franchise fees and other revenues [Member] | Chili's Restaurants [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 4.9 | 6.3 | [1] | |||
Franchise fees and other revenues [Member] | Maggiano's Restaurants [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 0.4 | 3.9 | ||||
Franchise fees and other revenues [Member] | Corporate and Other [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 0 | 0 | ||||
Franchise and other revenues [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 11.9 | 22.1 | ||||
Franchise and other revenues [Member] | Chili's Restaurants [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 11.5 | 18.1 | [1] | |||
Franchise and other revenues [Member] | Maggiano's Restaurants [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | 0.4 | 4 | ||||
Franchise and other revenues [Member] | Corporate and Other [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue from contract with customer, excluding assessed tax | $ 0 | $ 0 | ||||
Chili's restaurant acquisition [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Segment goodwill | [2] | $ 22.4 | ||||
Number of restaurants | Restaurants | 116 | |||||
[1] | Chili’s segment information for fiscal 2020 includes the results of operations related to the 116 restaurants purchased from a former franchisee subsequent to the September 5, 2019 acquisition date. Refer to Note 15 - Fiscal 2020 Chili’s Restaurant Acquisition for details. | |||||
[2] | Goodwill is expected to be deductible for tax purposes. The portion of the purchase price attributable to goodwill represents the benefits expected as a result of the acquisition, including sales and unit growth opportunities, and the benefit of the assembled workforce of the acquired restaurants. |
FAIR VALUE MEASUREMENTS (Non-Fi
FAIR VALUE MEASUREMENTS (Non-Financial Assets Measured on a Non-Recurring Basis) (Details) - USD ($) $ in Millions | Sep. 23, 2020 | Jun. 24, 2020 |
Additional Fair Value Elements [Abstract] | ||
Accumulated amortization associated with definite-lived intangible assets, | $ 8 | $ 7.5 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule of Carrying and Fair Values of Financial Instruments) (Details) - USD ($) $ in Millions | Sep. 23, 2020 | Jun. 24, 2020 | Dec. 27, 2017 |
Fair Value Disclosure, Senior Notes [Line Items] | |||
Sales price of JV received as note receivable | $ 18 | ||
Fair value of note receivable | $ 7 | $ 16 | |
3.875% notes [Member] | |||
Fair Value Disclosure, Senior Notes [Line Items] | |||
Notes, stated percentage interest rate | 3.875% | ||
Carrying value of notes | $ 299.1 | $ 299 | |
Fair value of notes | $ 293.3 | 282.8 | |
5.000% notes [Member] | |||
Fair Value Disclosure, Senior Notes [Line Items] | |||
Notes, stated percentage interest rate | 5.00% | ||
Carrying value of notes | $ 346.9 | 346.7 | |
Fair value of notes | $ 357.4 | $ 330.8 |
LEASES (Consolidated Statement
LEASES (Consolidated Statement of Comprehensive Income Disclosure of Lease Amounts) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 41.7 | $ 37.3 |
Variable lease cost | 14 | 13.3 |
Finance lease amortization | 4 | 2.7 |
Finance lease interest | 1.5 | 0.9 |
Short-term lease cost | 0.1 | 0.2 |
Sublease income | (1) | (1.2) |
Total lease costs, net | $ 60.3 | $ 53.2 |
LEASES (Fiscal 2021 Lease Matur
LEASES (Fiscal 2021 Lease Maturity Analysis) (Details) - USD ($) $ in Millions | Sep. 23, 2020 | Jun. 24, 2020 | |
Leases - Lease Maturity Analysis [Abstract] | |||
Finance Leases, Remainder of 2021 | $ 17.5 | ||
Finance Leases, 2022 | 22.4 | ||
Finance Leases, 2023 | 20.9 | ||
Finance Leases, 2024 | 11.4 | ||
Finance Leases, 2025 | 9 | ||
Finance Leases, Thereafter | 53.6 | ||
Finance Leases, Total future lease payments | [1] | 134.8 | |
Less: Finance Leases, Imputed interest | 31 | ||
Finance lease obligations | 103.8 | $ 102.1 | |
Operating Leases, Remainder of 2021 | 135.8 | ||
Operating Leases, 2022 | 169.2 | ||
Operating Leases, 2023 | 157.6 | ||
Operating Leases, 2024 | 146.6 | ||
Operating Leases, 2025 | 136.6 | ||
Operating Leases, Thereafter | 864.5 | ||
Operating Leases, Total future lease payments | 1,610.3 | ||
Less: Operating Leases, Imputed interest | 447.3 | ||
Operating Leases, Present value of lease liability | 1,163 | ||
Sublease Income, Remainder of 2021 | 2.5 | ||
Sublease Income, 2022 | 3.2 | ||
Sublease Income, 2023 | 2.6 | ||
Sublease Income, 2024 | 1.9 | ||
Sublease Income, 2025 | 1.8 | ||
Sublease Income, Thereafter | 4.8 | ||
Sublease Income, Total future lease payments | [1] | 16.8 | |
Finance leases, non-cancelable lease commitments | 114 | ||
Operating leases, non-cancelable lease commitments | $ 1,065.8 | ||
[1] | Finance and Operating leases total future lease payments represent the contractual obligations due under the contract, including certain cancellable option periods where we are reasonably assured to exercise the options. Included in the Total future lease payments as of September 23, 2020 was non-cancelable lease commitments of $114.0 million for finance leases, and $1,065.8 million for operating leases. |
DEBT (Schedule of Long-Term Deb
DEBT (Schedule of Long-Term Debt) (Details) - USD ($) $ in Millions | Sep. 23, 2020 | Jun. 24, 2020 | |
Debt Instrument [Line Items] | |||
Finance lease obligations | $ 103.8 | $ 102.1 | |
Total long-term debt | 1,180.1 | 1,225 | |
Less: unamortized debt issuance costs and discounts | (4.1) | (4.3) | |
Total long-term debt, less unamortized debt issuance costs and discounts | 1,176 | 1,220.7 | |
Less: current installments of long-term debt | [1] | (17.7) | (12.2) |
Long-term debt less current installments | 1,158.3 | 1,208.5 | |
5.000% notes [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | 350 | 350 | |
3.875% notes [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | 300 | 300 | |
$1B Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | $ 426.3 | $ 472.9 | |
[1] | Current installments of long-term debt consist only of finance leases for the periods presented and are recorded within Other accrued liabilities in the Consolidated Balance Sheets (Unaudited). Refer to Note 11 - Accrued and Other Liabilities for further details. |
DEBT (Additional Information) (
DEBT (Additional Information) (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Sep. 23, 2020 | Sep. 25, 2019 | Sep. 28, 2016 | Jun. 26, 2013 | |
Line of Credit Facility [Line Items] | ||||
Purchases of treasury stock | $ 3.9 | $ 11.3 | ||
$1B Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Net repayments | (46.6) | |||
Revolving credit facility, maximum borrowing capacity | 1,000 | |||
Revolving credit facility, remaining borrowing capacity | $ 573.7 | |||
Basis spread on variable rate | 3.00% | |||
Revolving credit facility, interest rate during period | 3.75% | |||
Debt issuance costs | $ 1.5 | |||
Repayments of revolving credit facility | $ 50 | |||
Revolving credit facility, covenant compliance | pursuant to the amended revolving credit facility and under the terms of the indentures governing our 2023 Notes and 2024 Notes, we are in compliance with our covenants | |||
$1B Revolving Credit Facility [Member] | 7th Amendment [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Revolving credit facility, expiration date | Dec. 12, 2022 | |||
Credit facility, future borrowing capacity | $ 900 | |||
Credit facility, date of change in maximum capacity | Sep. 12, 2021 | |||
Interest rate reduction upon issuance of certain debt or preferred equity interests exceeding $250.0 million | 0.25% | |||
Rate reduction on undrawn fee upon issuance of certain debt or preferred equity interests exceeding $250.0 million | 0.10% | |||
Maximum [Member] | $1B Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 3.00% | |||
Undrawn commitment fee spread | 0.50% | |||
Minimum [Member] | $1B Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.25% | |||
Undrawn commitment fee spread | 0.35% | |||
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | $1B Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Revolving credit facility, interest rate during period | 0.75% | |||
Accelerated Share Repurchase Agreement [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Purchases of treasury stock | 300 | |||
5.000% notes [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Notes, stated percentage interest rate | 5.00% | |||
Proceeds from issuance of senior notes | $ 350 | |||
3.875% notes [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Notes, stated percentage interest rate | 3.875% | |||
Face amount of notes | $ 300 |
ACCRUED AND OTHER LIABILITIES_2
ACCRUED AND OTHER LIABILITIES (Schedule of Other Accrued Liabilities) (Details) - USD ($) $ in Millions | Sep. 23, 2020 | Jun. 24, 2020 | |
Other accrued liabilities [Line Items] | |||
Property tax | $ 27 | $ 22.9 | |
Insurance | 21.3 | 20.7 | |
Sales tax | 18 | 13.3 | |
Current installments of finance leases | 17.7 | 12.2 | |
Interest | 14.9 | 7.5 | |
Utilities and services | 8.4 | 8.3 | |
Cyber security incident | 3.4 | 3.4 | |
Other | [1] | 11.2 | 12.3 |
Other accrued liabilities | $ 121.9 | $ 100.6 | |
[1] | Other primarily consists of accruals for banquet deposits for Maggiano’s events, charitable donations, rent-related expenses, deferred franchise and development fees, and other various accruals. |
ACCRUED AND OTHER LIABILITIES_3
ACCRUED AND OTHER LIABILITIES (Schedule of Other Liabilities) (Details) - USD ($) $ in Millions | Sep. 23, 2020 | Jun. 24, 2020 | |
Other liabilities [Line Items] | |||
Deferred payroll taxes | [1] | $ 34.2 | $ 12.9 |
Insurance | 33.5 | 33.7 | |
Deferred franchise fees | 11.4 | 11.6 | |
Unrecognized tax benefits | 2.1 | 2.1 | |
Other | 6.2 | 6.8 | |
Other liabilities | $ 87.4 | $ 67.1 | |
[1] | Deferred payroll taxes primarily consists of the deferral of the employer portion of certain payroll related taxes as allowed under the CARES Act which will be repaid in two equal installments on December 31, 2021, and December 31, 2022 |
SHAREHOLDERS' DEFICIT (Changes
SHAREHOLDERS' DEFICIT (Changes in Shareholders' Deficit) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||
Beginning balance | $ (479.1) | $ (778.2) |
Net income | 10.7 | 14.9 |
Other comprehensive income (loss) | 0.3 | (0.2) |
Dividends | 0 | (14.6) |
Stock-based compensation | 3.9 | 7.1 |
Purchases of treasury stock | (3.9) | (11.3) |
Issuances of common stock | 3 | 1.3 |
Ending balance | (465.1) | (585.1) |
Cumulative Effect, Period of Adoption, Adjustment | ASC 842 Leases [Member] | ||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||
Beginning balance | 195.9 | |
Common Stock [Member] | ||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||
Beginning balance | 7 | 17.6 |
Net income | 0 | 0 |
Other comprehensive income (loss) | 0 | 0 |
Dividends | 0 | 0 |
Stock-based compensation | 0 | 0 |
Purchases of treasury stock | 0 | 0 |
Issuances of common stock | 0 | 0 |
Ending balance | 7 | 17.6 |
Additional Paid-in Capital [Member] | ||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||
Beginning balance | 669.4 | 522 |
Net income | 0 | 0 |
Other comprehensive income (loss) | 0 | 0 |
Dividends | 0 | 0 |
Stock-based compensation | 3.9 | 7.1 |
Purchases of treasury stock | (1.1) | (0.3) |
Issuances of common stock | (9) | (3.7) |
Ending balance | 663.2 | 525.1 |
(Accumulated Deficit) Retained Earnings [Member] | ||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||
Beginning balance | (397.5) | 2,771.2 |
Net income | 10.7 | 14.9 |
Other comprehensive income (loss) | 0 | 0 |
Dividends | 0 | (14.6) |
Stock-based compensation | 0 | 0 |
Purchases of treasury stock | 0 | 0 |
Issuances of common stock | 0 | 0 |
Ending balance | (386.8) | 2,967.4 |
(Accumulated Deficit) Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment | ASC 842 Leases [Member] | ||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||
Beginning balance | 195.9 | |
Treasury Stock [Member] | ||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||
Beginning balance | (751.8) | (4,083.4) |
Net income | 0 | 0 |
Other comprehensive income (loss) | 0 | 0 |
Dividends | 0 | 0 |
Stock-based compensation | 0 | 0 |
Purchases of treasury stock | (2.8) | (11) |
Issuances of common stock | 12 | 5 |
Ending balance | (742.6) | (4,089.4) |
Accumulated Other Comprehensive (Loss) Income [Member] | ||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||
Beginning balance | (6.2) | (5.6) |
Net income | 0 | 0 |
Other comprehensive income (loss) | 0.3 | (0.2) |
Dividends | 0 | 0 |
Stock-based compensation | 0 | 0 |
Purchases of treasury stock | 0 | 0 |
Issuances of common stock | 0 | 0 |
Ending balance | $ (5.9) | $ (5.8) |
SHAREHOLDERS' DEFICIT (Dividend
SHAREHOLDERS' DEFICIT (Dividends) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Dividends per share declared | $ 0.38 | |
Payments of dividends | $ 1.3 | $ 14.8 |
SHAREHOLDERS' DEFICIT (Stock-ba
SHAREHOLDERS' DEFICIT (Stock-based Compensation) (Details) - $ / shares shares in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options granted | 0 | 0.3 |
Weighted average exercise price per share | $ 0 | $ 38.51 |
Weighted average fair value per share | $ 0 | $ 6.83 |
Restricted share awards granted | 0.5 | 0.3 |
Weighted average fair value per share | $ 39.76 | $ 38.51 |
SHAREHOLDERS' DEFICIT (Share Re
SHAREHOLDERS' DEFICIT (Share Repurchases) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Share Repurchases [Abstract] | ||
Number of shares repurchased | 0.1 | 0.3 |
Purchases of treasury stock | $ 3.9 | $ 11.3 |
SHAREHOLDERS' DEFICIT (Addition
SHAREHOLDERS' DEFICIT (Additional Information) (Details) - USD ($) $ in Millions | Sep. 23, 2020 | Jun. 24, 2020 | Sep. 25, 2019 | Jun. 26, 2019 |
Shareholders' Deficit | $ (465.1) | $ (479.1) | $ (585.1) | $ (778.2) |
Cumulative Effect, Period of Adoption, Adjustment | ASC 842 Leases [Member] | ||||
Shareholders' Deficit | 195.9 | |||
(Accumulated Deficit) Retained Earnings [Member] | ||||
Shareholders' Deficit | $ (386.8) | $ (397.5) | $ 2,967.4 | 2,771.2 |
(Accumulated Deficit) Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment | ASC 842 Leases [Member] | ||||
Shareholders' Deficit | $ 195.9 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Cash Paid for Income Taxes and Interest) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Income taxes, net of (refunds) | $ (2.1) | $ (11.8) |
Interest, net of amounts capitalized | $ 5.5 | $ 6.1 |
SUPPLEMENTAL CASH FLOW INFORM_4
SUPPLEMENTAL CASH FLOW INFORMATION (Non-Cash Investing and Financing Activities) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 23, 2020 | Sep. 25, 2019 | |
Other Significant Noncash Transactions [Line Items] | ||
Retirement of fully depreciated assets | $ 2.5 | $ 4.3 |
Accrued capital expenditures | 6.4 | 14.2 |
Dividend Declared [Member] | ||
Other Significant Noncash Transactions [Line Items] | ||
Dividends declared but not paid | $ 0 | $ 14.6 |
CONTINGENCIES (Lease Guarantee)
CONTINGENCIES (Lease Guarantee) (Details) - USD ($) $ in Millions | Sep. 23, 2020 | Jun. 24, 2020 |
Maximum [Member] | Lease Guarantees And Secondary Obligations [Member] | ||
Guarantor Obligations [Line Items] | ||
Loss contingency, estimate of possible loss | $ 37.7 | $ 39.7 |
CONTINGENCIES (Additional Infor
CONTINGENCIES (Additional Information) (Details) $ in Millions | 30 Months Ended |
Sep. 23, 2020USD ($)LegalMatter | |
Loss Contingencies [Line Items] | |
Amount of undrawn standby letters of credit outstanding | $ 29.5 |
Loss contingency, pending claims, number | LegalMatter | 0 |
Cyber security incident [Member] | |
Loss Contingencies [Line Items] | |
Loss contingency insurance coverage deductible | $ 2 |
Cyber security incident charges | 8.2 |
Insurance recoveries | 2.2 |
Loss contingency, receivable | 3.5 |
Loss Contingency, Loss in Period | 0.5 |
Loss contingency, estimate of possible loss | $ 5 |
FISCAL 2020 CHILI'S RESTAURAN_3
FISCAL 2020 CHILI'S RESTAURANT ACQUISITION (Details) $ in Millions | Sep. 05, 2019USD ($)Restaurants | Sep. 25, 2019USD ($) | Jun. 24, 2020USD ($) | Sep. 23, 2020USD ($)Restaurants | |
Business Acquisition [Line Items] | |||||
Number of restaurants | Restaurants | 1,660 | ||||
Goodwill | $ 187.6 | $ 187.7 | |||
Chili's restaurant acquisition [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of restaurants | Restaurants | 116 | ||||
Cash consideration for acquisition, including post-closing adjustments | $ 96 | ||||
Acquisition of franchise restaurants costs, net of (gains) | $ (0.5) | ||||
Franchise deferred revenue recognized upon acquisition | 2.6 | ||||
Professional services, transaction and transition related costs | 1.5 | ||||
Loss on derecognition of franchisee straight-line rent balance | $ 0.6 | ||||
Current assets | [1] | $ 7.3 | |||
Property and equipment | 60.3 | ||||
Operating lease assets | 163.5 | ||||
Reacquired franchise rights | [2] | 6.9 | |||
Goodwill | [3] | 22.4 | |||
Total assets acquired | 260.4 | ||||
Current liabilities | [4] | 9.1 | |||
Operating lease liabilities, less current portion | 158.3 | ||||
Total liabilities assumed | 167.4 | ||||
Net assets acquired | [5] | $ 93 | |||
Weighted average amortization period, reacquired franchise rights | 8 years | ||||
Purchase price excluding customary working capital adjustments | $ 99 | ||||
Closing adjustments | 3.2 | ||||
Prepayment of leases between Brinker and franchisee | $ 2.8 | ||||
[1] | Current assets included petty cash, inventory, and restaurant supplies. | ||||
[2] | Reacquired franchise rights have a weighted average amortization period of approximately 8 years. | ||||
[3] | Goodwill is expected to be deductible for tax purposes. The portion of the purchase price attributable to goodwill represents the benefits expected as a result of the acquisition, including sales and unit growth opportunities, and the benefit of the assembled workforce of the acquired restaurants. | ||||
[4] | Current liabilities included current portion of operating lease liabilities, gift card liability and accrued property tax. | ||||
[5] | Net assets acquired at fair value are equal to the total purchase price of $99.0 million, less $3.2 million of closing adjustments and $2.8 million allocated to prepayment of leases entered into between us and the franchisee. |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Millions | 1 Months Ended |
Oct. 28, 2020USD ($) | |
Revolving Credit Facility [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Net borrowings (payments) | $ (20) |