FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 23, 1998
Commission File Number 1-10275
BRINKER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1914582
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6820 LBJ FREEWAY, DALLAS, TEXAS 75240
(Address of principal executive offices)
(Zip Code)
(972) 980-9917
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
Number of shares of common stock of registrant outstanding at
September 23, 1998: _65,567,317
BRINKER INTERNATIONAL, INC.
INDEX
Part I - Financial Information
Condensed Consolidated Balance Sheets -
September 23, 1998 (Unaudited) and June 24, 1998 3 - 4
Condensed Consolidated Statements of Income
(Unaudited) - Thirteen-week periods ended
September 23, 1998 and September 24, 1997 5
Condensed Consolidated Statements of Cash Flows
(Unaudited) - Thirteen-week periods ended
September 23, 1998 and September 24, 1997 6 - 7
Notes to Condensed Consolidated
Financial Statements (Unaudited) 8 - 9
Management's Discussion and Analysis of
Financial Condition and Results of Operations 10 - 15
Part II - Other Information 16
PART I. FINANCIAL INFORMATION
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
(In thousands)
September 23, June 24,
1998 1998
ASSETS (Unaudited)
Current Assets:
Cash and Cash Equivalents $ 56,335 $ 31,101
Accounts Receivable 13,156 18,789
Inventories 15,058 13,774
Prepaid Expenses 37,738 36,576
Deferred Income Taxes 2,807 3,250
Other 1,954 2,007
Total Current Assets 127,048 105,497
Property and Equipment, at Cost:
Land 154,374 145,900
Buildings and Leasehold Improvements 572,423 541,403
Furniture and Equipment 320,152 310,849
Construction-in-Progress 45,771 48,245
1,092,720 1,046,397
Less Accumulated Depreciation
and Amortization 355,155 337,825
Net Property and Equipment 737,565 708,572
Other Assets:
Goodwill 75,774 76,330
Other 106,529 98,984
Total Other Assets 182,303 175,314
Total Assets $ 1,046,916 $ 989,383
(continued)
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
September 23, June 24,
1998 1998
LIABILITIES AND SHAREHOLDERS' EQUITY (Unaudited)
Current Liabilities:
Current Installments of Long-term Debt $ 14,630 $ 14,618
Accounts Payable 133,063 97,597
Accrued Liabilities 82,842 85,852
Total Current Liabilities 230,535 198,067
Long-term Debt, Less Current Installments 157,701 147,288
Deferred Income Taxes 9,307 8,254
Other Liabilities 43,566 42,035
Commitments and Contingencies
Shareholders' Equity:
Preferred Stock - 1,000,000 Authorized
Shares; $1.00 Par Value; No Shares Issued - -
Common Stock - 250,000,000 Authorized
Shares; $.10 Par Value; 78,150,054
Shares Issued and 65,567,317 Shares
Outstanding at September 23, 1998, and
78,150,054 Shares Issued and 65,926,032
Shares Outstanding at June 24, 1998 7,815 7,815
Additional Paid-In Capital 275,282 276,380
Retained Earnings 484,908 464,083
768,005 748,278
Less Treasury Stock, at Cost (12,582,737
shares at September 23, 1998 and 12,224,022
shares at June 24, 1998) (162,198) (154,539)
Total Shareholders' Equity 605,807 593,739
Total Liabilities and Shareholders'
Equity $ 1,046,916 $ 989,383
See accompanying notes to condensed consolidated financial
statements.
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Thirteen-Week Periods Ended
September 23, September 24,
1998 1997
Revenues $ 432,101 $ 375,963
Costs and Expenses:
Cost of Sales 117,760 102,693
Restaurant Expenses 236,345 206,120
Depreciation and Amortization 21,703 21,715
General and Administrative 21,351 16,567
Interest Expense 2,062 3,739
Other, Net 988
(94)
Total Costs and Expenses 400,209 350,740
Income Before Provision for Income
Taxes 31,892 25,223
Provision for Income Taxes 11,067 8,702
Net Income $ 20,825 $ 16,521
Basic Net Income Per Share $ 0.32 $ 0.25
Diluted Net Income Per Share $ 0.31 $ 0.25
Basic Weighted Average
Shares Outstanding 65,774 66,635
Diluted Weighted Average
Shares Outstanding 67,596 66,905
See accompanying notes to condensed consolidated financial
statements.
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Thirteen-Week Periods Ended
September 23, September 24,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 20,825 $ 16,521
Adjustments to Reconcile Net Income
to Net Cash Provided by
Operating Activities:
Depreciation and Amortization of
Property and Equipment 18,115 17,476
Amortization of Goodwill and Other
Assets 3,588 4,239
Deferred Income Taxes 1,496 1,174
Changes in Assets and Liabilities:
Receivables 5,635 (4,210)
Inventories (1,284) 40
Prepaid Expenses (1,162) (359)
Other Assets 882 (2,404)
Accounts Payable 35,466 219
Accrued Liabilities (3,010) 151
Other Liabilities 1,531 548
Other - 98
Net Cash Provided by Operating
Activities 82,082 33,493
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for Property and Equipment (51,138) (26,761)
Proceeds from Sales of Marketable
Securities 51 7,458
Net Advances to Affiliates (7,429) (2,576)
Net Cash Used in Investing Activities (58,516) (21,879)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings (Payments) on Credit
Facilities 10,425 (21,859)
Proceeds from Issuances of Common Stock - 655
Proceeds from Issuances of Treasury Stock 757 -
Purchases of Treasury Stock (9,514) -
Net Cash Provided by (Used in)
Financing Activities 1,668 (21,204)
Net Increase (Decrease) in Cash and
Cash Equivalents 25,234 (9,590)
Cash and Cash Equivalents at Beginning
of Period 31,101 23,194
Cash and Cash Equivalents at End
of Period $ 56,335 $13,604
CASH PAID (RECEIVED) DURING THE PERIOD:
Interest, Net of Amounts Capitalized $ 6 $ 3,231
Income Taxes $ 2,263 $ (48)
See accompanying notes to condensed consolidated financial
statements.
BRINKER INTERNATIONAL, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The condensed consolidated financial statements of Brinker
International, Inc. and its wholly-owned subsidiaries
(collectively, the "Company") as of September 23, 1998 and for the
thirteen-week periods ended September 23, 1998 and September 24,
1997 have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. The
Company owns or franchises 840 restaurants under the names of
Chili's Grill & Bar ("Chili's"), Romano's Macaroni Grill
("Macaroni Grill"), On The Border Mexican Cafe ("On The Border"),
Cozymel's Coastal Mexican Grill ("Cozymel's"), Maggiano's Little
Italy ("Maggiano's"), Corner Bakery, Eatzi's Market & Bakery
("Eatzi's"), Wildfire, and Big Bowl. The Company owns an equity
interest in the Eatzi's, Big Bowl, and Wildfire restaurant
concepts.
The information furnished herein reflects all adjustments
(consisting of normal recurring accruals and adjustments) which
are, in the opinion of management, necessary to fairly state the
operating results 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 generally accepted
accounting principles have been omitted pursuant to such rules and
regulations. The notes to the condensed consolidated financial
statements should be read in conjunction with the notes to the
consolidated financial statements contained in the June 24, 1998
Form 10-K. Company management believes that the disclosures are
sufficient for interim financial reporting purposes.
Certain prior year amounts have been reclassified in the
accompanying condensed consolidated financial statements to
conform with current year presentation.
2. Net Income Per Share
In February 1997, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No.
128 ("SFAS No. 128"), "Earnings Per Share," which requires
presentation of basic and diluted earnings per share. Basic
earnings per share is computed by dividing income available to
common shareholders by the weighted average number of common
shares outstanding for the reporting period. Diluted earnings 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. As required, the Company adopted
the provisions of SFAS No. 128 in the quarter ended December 24,
1997. All prior year weighted average and per share information
has been restated in accordance with SFAS No. 128. Outstanding
stock options issued by the Company represent the only dilutive
effect reflected in diluted weighted average shares.
3. Shareholders' Equity
On January 27, 1998, the Board of Directors approved a plan
to repurchase up to $50 million of the Company's common stock.
Repurchases will be made from time to time to offset the dilutive
effect on earnings per share of stock option exercises or whenever
market conditions warrant. Under this plan, the Company
repurchased $9.5 million (505,500 shares) of its common stock
during the quarter in accordance with applicable securities
regulations. The repurchased common stock may be used by the
Company to satisfy obligations under its savings and stock option
plans and for other corporate purposes.
4. Comprehensive Income
In June 1997, the FASB issued Statement of Financial
Accounting Standards No. 130 ("SFAS No. 130"), "Reporting
Comprehensive Income." SFAS No. 130, which is effective for fiscal
1999, establishes standards for the reporting and display of
comprehensive income and its components. Comprehensive income is
defined as the change in equity of a business enterprise during a
period from transactions and other events and circumstances from
non-owner sources. Total comprehensive income for the quarter
ended September 23, 1998 is equal to net income as reported.
Comprehensive income for the quarter ended September 24, 1997 of
$16.9 million included net earnings as reported in the
accompanying condensed consolidated statements of income plus a
$0.4 million after-tax effect of unrealized gains on marketable
securities adjustments.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table sets forth selected operating data as a
percentage of total revenues for the periods indicated. All
information is derived from the accompanying condensed consolidated
statements of income.
Thirteen Week Periods Ended
September 23, September 24,
1998 1997
Revenues 100.0% 100.0%
Costs and Expenses:
Cost of Sales 27.3% 27.3%
Restaurant Expenses 54.7% 54.8%
Depreciation and Amortization 5.0% 5.8%
General and Administrative 4.9% 4.4%
Interest Expense 0.5% 1.0%
Other, Net 0.2% 0.0%
Total Costs and Expenses 92.6% 93.3%
Income Before Provision
for Income Taxes 7.4% 6.7%
Provision for Income Taxes 2.6% 2.3%
Net Income 4.8% 4.4%
The following table details the number of restaurant openings
during the first quarter and total restaurants open at the end of
the first quarter.
First Quarter Openings Total Open at End of First Quarter
Fiscal Fiscal Fiscal Fiscal
1999 1998 1999 1998
Chili's:
Company-owned 10 7 424 398
Franchised 4 8 163 152
Total 14 15 587 550
Macaroni Grill:
Company-owned 5 3 116 100
Franchised -- -- 2 2
Total 5 3 118 102
On The Border:
Company-owned 5 5 55 39
Franchised 3 1 18 8
Total 8 6 73 47
Cozymel's -- -- 12 12
Maggiano's 1 1 8 6
Corner Bakery 4 1 34 16
Eatzi's 1 1 4 2
Wildfire 1 -- 2 --
Big Bowl -- -- 2 --
Grand total 34 27 840 735
REVENUES
Revenues for the first quarter of fiscal 1999 increased to $432.1
million, 14.9% over the $376.0 million generated for the same
quarter of fiscal 1998. The increase is primarily attributable to a
net increase of 78 Company-owned restaurants since September 24,
1997. The Company increased its capacity (as measured in sales
weeks) by 11.8% in the first quarter of fiscal 1999, as compared to
the same quarter in fiscal 1998. Average weekly sales at Company-
owned stores increased 2.6% in the first quarter of fiscal 1999, as
compared to the first quarter of fiscal 1998.
COSTS AND EXPENSES (as a percent of Revenues)
Cost of sales remained flat at 27.3% compared to the first quarter
of fiscal 1998. Favorable commodity prices for meat and produce
were offset by unfavorable commodity prices for poultry and dairy
and product mix changes to menu items with higher percentage food
costs.
Restaurant expenses decreased from 54.8% in fiscal 1998 to 54.7% in
fiscal 1999 primarily due to a decrease in management labor as well
as lower costs of supplies and facility related expenses.
Management labor decreased due to a reduction in turnover resulting
in lower training and relocation costs, partially offset by
increases in monthly performance bonuses due to Chili's positive
performance in fiscal 1999. Restaurant labor wage rate increases
due to Federal government mandated increases in the minimum wage
were offset by improvements in labor productivity. The decreases
were also partially offset by an increase in rent expense due to
sale-leaseback transactions which occurred in fiscal 1998 and the
utilization of the equipment leasing facility.
Depreciation and amortization decreased from 5.8% in fiscal 1998 to
5.0% in fiscal 1999. Depreciation and amortization decreases
resulted from the utilization of the equipment leasing facility and
the impact of sale-leaseback transactions which occurred in fiscal
1998, as well as a declining depreciable asset base for older
units. Partially offsetting these decreases were increases in
depreciation and amortization related to new unit construction
costs and ongoing remodel costs.
General and administrative expenses increased in the first quarter
of fiscal 1999 compared to fiscal 1998 as a result of increased
costs related to Year 2000 initiatives, additional staff and
support as the Company continues the expansion of its restaurant
concepts, and increased fiscal 1999 profit sharing accruals based
on the Company's continued strong performance.
Interest expense decreased due to reduced borrowings on the
Company's credit facilities and an increase in the construction-in-
progress balances subject to interest capitalization.
Other, net decreased compared to the first quarter of fiscal 1998.
Other, net was negatively impacted by the almost complete
liquidation of the marketable securities portfolio in the last half
of fiscal 1998 resulting in a reduction of income earned, which in
fiscal 1998 was partially offset by the Company's share of net
losses in equity method investees. The proceeds from liquidation
were used to fund a portion of the Company's stock repurchase plan.
As of September 23, 1998, the marketable securities portfolio has
been fully liquidated.
INCOME TAXES
The Company's effective income tax rate was 34.7% for the first
quarter of fiscal 1999 compared to 34.5% for the same period of
fiscal 1998. The fiscal 1999 effective income tax rate has
increased primarily as a result of a decreased dividends received
deduction resulting from the liquidation of the Company's
marketable securities portfolio.
NET INCOME AND NET INCOME PER SHARE
Net income increased 26.1% compared to the first quarter of fiscal
1998. The increase in net income was due to an increase in revenues
as a result of increases in average weekly sales and sales weeks
and a decrease in restaurant expenses, depreciation and
amortization, and interest expense. Diluted net income per share
increased 24.0% from $0.25 for the first quarter of 1998 to $0.31
for the first quarter of fiscal 1999. Diluted weighted average
shares outstanding for the first quarter increased 1.0% compared to
the prior year period due to the effect of stock option exercises,
partially offset by treasury stock repurchases.
IMPACT OF INFLATION
The Company has not experienced a significant overall impact from
inflation. As operating expenses increase, the Company, to the
extent permitted by competition, recovers increased costs by
raising menu prices.
LIQUIDITY AND CAPITAL RESOURCES
The working capital deficit increased from $92.6 million at June
24, 1998 to $103.5 million at September 23, 1998, and net cash
provided by operating activities increased to $82.1 million for the
first quarter of fiscal 1999 from $33.5 million during the same
period in fiscal 1998 due to increased profitability and the timing
of operational receipts and payments.
Long-term debt outstanding at September 23, 1998 consisted of $85.7
million of unsecured senior notes, $70 million of borrowings on
credit facilities, and obligations under capital leases. The
Company has credit facilities totaling $363.5 million. At
September 23, 1998, the Company had $283.2 million in available
funds from credit facilities.
During fiscal 1998, the Company entered into an equipment leasing
facility for up to $55.0 million, of which funding commitments of
$47.5 million have been obtained. As of September 23, 1998, $32.7
million of the leasing facility has been utilized, including a net
funding of $8.3 million in fiscal 1999. The remaining facility
balance will be used to lease new equipment in fiscal 1999.
Capital expenditures consist of purchases of land for future
restaurant sites, new restaurants under construction, purchases of
new and replacement restaurant furniture and equipment, and ongoing
remodeling programs. Capital expenditures were $51.1 million for
the first quarter of fiscal 1999 as compared to $26.8 million in
the first quarter of fiscal 1998. The increase in capital
expenditures compared to the first quarter of 1998 is due mainly to
an increase in the number of stores being constructed or opened
during the first quarter of fiscal 1999 and a reduction in the
amount of new restaurant furniture and equipment funded by the
equipment leasing facility. The Company estimates that its capital
expenditures during the second quarter will approximate $65
million. These capital expenditures will be funded from internal
operations, build-to-suit lease agreements with landlords, and
drawdowns on the Company's available lines of credit.
The Company is not aware of any other event or trend which would
potentially affect its liquidity. In the event such a trend would
develop, the Company believes that there are sufficient funds
available to it under the lines of credit and strong internal cash
generating capabilities to adequately manage the expansion of
business.
YEAR 2000
The Year 2000 will have a broad impact on the business environment
in which the Company operates due to the possibility that many
computerized systems across all industries will be unable to
process information containing dates beginning in the Year 2000.
The Company has established an enterprise-wide program to prepare
its computer systems and applications for the Year 2000 and is
utilizing both internal and external resources to identify,
correct and test the systems for Year 2000 compliance. The
Company anticipates that the majority of its domestic
reprogramming will be completed by December 31, 1998, and testing
efforts will be substantially concluded by March 31, 1999.
Further validation through testing will be conducted throughout
calendar year 1999. The Company expects that all mission-critical
systems will be Year 2000 ready prior to the end of the 1999
calendar year.
The nature of the Company's business is such that the business
risks associated with the Year 2000 can be reduced by assessing
the vendors supplying the Company's restaurants with food and
related products and also assessing the Company's franchise and
joint venture business partners to ensure that they are aware of
the Year 2000 business risks and are appropriately addressing
them.
Because third party failures could have a material impact on the
Company's ability to conduct business, questionnaires have been
sent to substantially all of the Company's vendors to obtain
reasonable assurance that plans are being developed to address the
Year 2000 issue. The returned questionnaires have been assessed by
the Company, categorized based upon readiness for the Year 2000
issues, and prioritized in order of significance to the business
of the Company. To the extent that vendors do not provide the
Company with satisfactory evidence of their readiness to handle
Year 2000 issues, contingency plans will be developed.
Furthermore, information has been provided to all franchise
business partners regarding the potential business risks
associated with the Year 2000 issue. Based upon questionnaires
received from the franchise business partners, the Company has
assessed the Year 2000 readiness of these business partners and is
creating action plans to address the identified risks. The
Company is currently assessing the Year 2000 readiness of its
joint venture partners.
The Company anticipates that it will have substantially completed
an inventory of all information technology and non-information
technology equipment by December 31, 1998, and will then address
the Year 2000 readiness of such equipment.
The enterprise-wide program, including testing and remediation of
all of the Company's systems and applications, is expected to cost
approximately $6 million from inception in calendar year 1997
through completion in calendar year 1999. Of these costs,
approximately $750,000 was incurred through June 24, 1998.
Approximately $3.5 million is expected to be incurred in fiscal
1999, with the remaining $1.75 million to be incurred in fiscal
2000. All estimated costs have been budgeted and are expected to
be funded by cash flows from operations.
The Company does not believe the costs related to the Year 2000
readiness project will be material to its financial position or
results of operations. However, the cost of the project and the
date on which the Company plans to complete the Year 2000
modifications are based on management's best estimates, which were
derived utilizing numerous assumptions of future events including
the continued availability of certain resources, third party
modification plans, and other factors. Unanticipated failures by
critical vendors and franchise partners, as well as the failure by
the Company to execute its own remediation efforts, could have a
material adverse effect on the cost of the project and its
completion date. Furthermore, any such unforeseen occurrences, if
combined with failures of other third parties or in the public
infrastructure, could have a material adverse effect on the
Company's results of operations, financial condition, and/or cash
flows. Consequently, there can be no assurance that the forward-
looking estimates contained herein will be achieved and the actual
cost could differ materially from the projections contained
herein.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in interest
rates on debt and changes in commodity prices.
The Company's net exposure to interest rate risk consists of
floating rate instruments that are benchmarked to US and European
short-term interest rates. The Company may from time to time
utilize interest rate swaps and forwards to manage overall
borrowing costs and reduce exposure to adverse fluctuations in
interest rates. The Company does not use derivative instruments
for trading purposes and the Company has procedures in place to
monitor and control derivative use. The impact on the Company's
results of operations of a one-point interest rate change on the
outstanding balance of the variable rate debt as of September 23,
1998 would be immaterial.
The Company purchases certain commodities such as beef, chicken,
flour and cooking oil. These commodities are generally purchased
based upon market prices established with vendors. These purchase
arrangements may contain contractual features that limit the price
paid by establishing certain price floors or caps. The Company
does not use financial instruments to hedge commodity prices
because these purchase arrangements help control the ultimate cost
paid and any commodity price aberrations are generally short term
in nature.
This market risk discussion contains forward-looking statements.
Actual results may differ materially from this discussion based
upon general market conditions and changes in domestic and global
financial markets.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131 ("SFAS No. 131"), "Disclosures about Segments of
an Enterprise and Related Information." SFAS No. 131 establishes
standards for the way public business enterprises report
information about operating segments in annual financial
statements and requires those enterprises to report selected
information about operating segments in interim financial reports.
SFAS No. 131 is effective for the Company's fiscal 1999 annual
financial statements. The adoption of this standard will have no
impact on the Company's consolidated results of operations,
financial position, or cash flow.
In April 1998, the American Institute of Certified Public
Accountants issued Statement of Position 98-5 ("SOP 98-5"),
"Reporting of the Costs of Start-up Activities." SOP 98-5 is
effective for financial statements issued for years beginning
after December 15, 1998; therefore, the Company will be required
to implement its provisions by the first quarter of fiscal 2000.
At that time, the Company will be required to change the method
currently used to account for preopening costs. The application
of SOP 98-5 will result in deferred preopening costs on the
Company's consolidated balance sheet as of the date of adoption,
net of related tax effects, being charged to operations as the
cumulative effect of a change in accounting principle. Under the
new requirements for accounting for preopening costs, the
subsequent costs of start-up activities will be expensed as
incurred. A resulting benefit of this change is the discontinuance
of amortization expense in subsequent periods. As of September 23,
1998, the balance of deferred preopening costs, net of related tax
effects, is approximately $6.3 million. However, the ultimate
impact of adopting SOP 98-5 on the accounting for preopening costs
is contingent upon the number of future restaurant openings and
thus, cannot be reasonably estimated at this time.
In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133 ("SFAS No. 133"), "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and
hedging activities. SFAS No. 133 is effective for the Company's
first quarter financial statements in fiscal 2000. The Company is
currently not involved in derivative instruments or hedging
activities, and therefore, will measure the impact of this
statement as it becomes necessary.
FORWARD-LOOKING STATEMENTS
Certain statements contained herein are forward-looking regarding
future economic performance, restaurant openings, operating
margins, the availability of acceptable real estate locations for
new restaurants, the sufficiency of cash balances and cash
generated from operating and financing activities for future
liquidity and capital resource needs, and other matters. These
forward-looking statements involve risks and uncertainties and,
consequently, could be affected by general business conditions,
the impact of competition, the seasonality of the Company's
business, governmental regulations, inflation, changes in economic
conditions, consumer perceptions of food safety, changes in
consumer tastes, governmental monetary policies, changes in
demographic trends, impact of the Year 2000, availability of
employees, or weather and other acts of God.
PART II. OTHER INFORMATION
Item 6: EXHIBITS
Exhibit 27 Financial Data Schedule. Filed with EDGAR version.
(a) Financial Data Schedule as of and for the 13-week period
ended September 23, 1998.
(b) Restated Financial Data Schedule as of and for the 13-week
period ended September 24, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
BRINKER INTERNATIONAL, INC.
Date: November 4, 1998 By:___________________________________________
Ronald A. McDougall, President and
Chief Executive Officer
(Duly Authorized Signatory)
Date: November 4, 1998 By:____________________________________________
Russell G. Owens, Executive Vice President
and Chief Financial and Strategic Officer
(Principal Financial and Accounting Officer)