As filed with the Securities and Exchange Commission on December 17, 2001.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 13, 2001
Darden Restaurants, Inc.
(Exact name of registrant as specified in its charter)
Florida 1-13666 59-3305930
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification No.)
5900 Lake Ellenor Drive, Orlando, Florida 32809
(Address of principal executive offices)
Registrant's telephone number,including area code:
(407) 245-4000
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
------------
On December 13, 2001, the Registrant issued a news release entitled
"Darden Restaurants Reports That Strong Same-Restaurant Sales Growth
At Red Lobster And Olive Garden Led To Record Second Quarter
Earnings," and a copy is being filed herewith as Exhibit 99.1.
Also on December 13, 2001, the Registrant issued a news release
entitled "David Hughes, Chairman & CEO Hughes Supply Elected To
Darden Restaurants Board," and a copy is being filed herewith as
Exhibit 99.2.
Item 7. Financial Statements and Exhibits.
---------------------------------
(c) Exhibits.
Exhibit Number
(by reference to
Item 601 of
Regulation S-K) Description
99.1 Press Release dated December 13, 2001,
entitled "Darden Restaurants Reports
That Strong Same-Restaurant Sales Growth
At Red Lobster And Olive Garden Led To
Record Second Quarter Earnings."
99.2 Press Release dated December 13, 2001,
entitled "David Hughes, Chairman & CEO
Hughes Supply Elected to Darden
Restaurants Board."
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 13, 2001 DARDEN RESTAURANTS, INC.
By: /s/ Paula J. Shives
-------------------------
Paula J. Shives
Senior Vice President,
General Counsel and
Secretary
3
INDEX TO EXHIBITS
Exhibit Number Description of Exhibit
99.1 Press Release dated December 13, 2001, entitled Darden
Restaurants Reports That Strong Same-Restaurant Sales
Growth At Red Lobster And Olive Garden Led To Record
Second Quarter Earnings."
99.2 Press Release dated December 13, 2001, entitled "David
Hughes, Chairman & CEO Hughes Supply Elected to Darden
Restaurants Board."
4
EXHIBIT 99.1
[GRAPHIC OMITTED]
- --------------------------
www.darden.com
NEWS/INFORMATION
Corporate Relations
P.O. Box 593330
Orlando, FL 32859
Contacts:
(Analysts) Matthew Stroud (407) 245-5550
(Media) Rick Walsh (407) 245-5366
FOR RELEASE
December 13, 2001
4:30 PM EST
DARDEN RESTAURANTS REPORTS THAT STRONG
SAME-RESTAURANT SALES GROWTH AT RED LOBSTER AND OLIVE GARDEN
LED TO RECORD SECOND QUARTER EARNINGS
ORLANDO, FL - Darden Restaurants, Inc. today reported that strong
same-restaurant sales growth of 6.1% at Red Lobster and 5.9% at Olive Garden led
to record second quarter earnings. Earnings per diluted share were 30 cents, a
25% increase from prior year. Excluding an unusual restructuring credit,
earnings were 29 cents per diluted share, a 21% increase from the prior year.
Total sales of $1.0 billion for the quarter, which ended November 25, 2001,
increased 8.8% over the prior year.
"I'm very proud of the way our teams have responded to an extraordinarily
challenging environment, marked by the tragic events of September 11, the war in
Afghanistan and the ongoing threat of further terrorist activity," said Joe R.
Lee, Chairman and Chief Executive Officer. "All of this combined to reduce
consumer confidence and accelerate the economic weakness that began earlier in
the year. Our teams responded by placing even greater emphasis on providing
guests in every restaurant with service and value that exceeds their
expectations. As a result, Red Lobster and Olive Garden enjoyed same-restaurant
sales growth that once again surpassed the casual dining industry average. And,
our emerging concepts Bahama Breeze and Smokey Bones BBQ Sports Bar, continued
to make terrific progress in building great brands."
Highlights for the quarter ended November 25, 2001, include the following:
o Earnings after tax in the second quarter were $36.5 million, or 30 cents
per diluted share. The results include an unusual item that totals $1.4
million after tax. The item is a restructuring credit that results from
reversal of a portion of the Company's fiscal 1997 restructuring reserve
due primarily to favorable lease terminations.
o Excluding the unusual credit, earnings after tax in the second quarter were
$35.1 million, or 29 cents per diluted share, on sales of $1.0 billion.
This includes a $1.5 million pre-tax contribution to the Red Cross Disaster
Relief Fund as part of Darden's participation in the restaurant industry's
Dine Out for America benefit on October 11. Last year, earnings after tax
were $29.5 million, or 24 cents per diluted share, on sales of $932.0
million.
-MORE-
-2-
o Red Lobster led the Company with a 6.1% same-restaurant sales increase in
the quarter, its 16th consecutive quarter of same-restaurant sales gains.
o Olive Garden reported its 29th consecutive quarter of same-restaurant sales
growth with a 5.9% increase.
o Bahama Breeze opened two new restaurants during the quarter. It has now
opened four restaurants year-to-date, increasing the overall number of
restaurants in operation to 25. Bahama Breeze plans to open a total of 8 to
10 restaurants for the full fiscal year.
o Smokey Bones BBQ Sports Bar opened two restaurants during the quarter,
bringing the total opened year-to-date to three and the overall number in
operation to 12. Smokey Bones BBQ plans to open 8 to 10 restaurants for the
full fiscal year.
o The Company repurchased over 400,000 shares of its common stock in the
quarter.
Operating Highlights
RED LOBSTER'S second quarter sales of $534.9 million were 6.3% above prior year,
due primarily to its 6.1% increase in same-restaurant sales - the 16th
consecutive quarter of same-restaurant sales growth for Red Lobster. Last year,
Red Lobster reported second quarter same-restaurant sales growth of 8.4%. With
the increased sales and lower food costs and marketing expenses as a percentage
of sales, Red Lobster achieved strong double-digit operating profit growth for
the quarter.
"We had another terrific quarter at Red Lobster, " said Dick Rivera, President
of Red Lobster. "We are a leader in casual dining because we are continuously
enhancing the dining experience. We bring a fresh approach to casual dining,
featuring great seafood, good times and hospitality. Our crew throughout the
company rose to the occasion this last quarter. They performed at record levels
while providing our guests a welcoming environment where they could dine with
family and friends while enjoying one of their favorite cuisines - seafood. "
OLIVE GARDEN'S second quarter sales of $442.5 million were 8.6% above prior
year, propelled by its 5.9% same-restaurant sales increase for the quarter and
operation of 16 more restaurants this year than last. This is the 29th
consecutive quarter of same-restaurant sales growth for Olive Garden, and
follows a 7.2% increase for the same quarter last year. The increased sales,
along with lower labor costs and marketing expenses as a percentage of sales,
combined to produce another quarter of double-digit operating profit growth.
"We had great results again this quarter," said Brad Blum, President of Olive
Garden. "The Olive Garden team's relentless focus on guest satisfaction,
operating excellence and strong branding has never been more important given the
extraordinary social and economic stresses that exist throughout the country. We
appreciate the opportunity to make life just a little easier for those who visit
our restaurants. Our passion to provide every guest with a genuine Italian
dining experience, and for having people feel welcome, special and appreciated
is more appropriate now than ever."
-MORE-
-3-
BAHAMA BREEZE continued to enjoy very enthusiastic guest response and critical
acclaim during the quarter, and to generate strong average sales per restaurant.
It opened new restaurants in Broomfield, CO, and Lone Tree, CO, both of which
are in the Denver metropolitan area. Bahama Breeze now operates 25 restaurants
in 18 markets. At least four more openings are scheduled for this fiscal year.
SMOKEY BONES BBQ SPORTS BAR opened two restaurants in the second quarter,
bringing the total number in operation to 12. The two newest are in Chicago
Ridge, IL, and Orlando, FL. Since the end of the quarter, a new restaurant has
opened in Springfield, IL. Five additional restaurants currently under
construction are expected to open this fiscal year.
Other Actions
The Board of Directors also elected David Hughes a Director. Hughes is the
Chairman of the Board and Chief Executive Officer for Hughes Supply, Inc. He
joined Hughes Supply in 1968, assuming increasing responsibilities until he
became Chairman and CEO in 1986. He also serves on the Boards of SunTrust, Inc.
and Brown & Brown Insurance. He has been active in the Central Florida community
for many years, serving on the boards of Orlando Regional Healthcare System,
Economic Development Commission, Florida Council of 100 and Boys and Girls Clubs
of America.
"We are very pleased to welcome David to our Board," said Lee. "He has built a
very successful business, is active in his community and is someone who has
great integrity, vision and experience. He will be a tremendous asset to our
company."
Darden continued the buyback of its common stock, repurchasing over 400,000
shares in the second quarter. Cumulatively, since the initial authorization of
its repurchase program in December 1995, the Company has repurchased 54.7
million shares from a total authorization of 64.6 million shares.
November 2001 Same-Restaurant Sales Results
Darden also reported same-restaurant sales results for the four-week November
fiscal month that ended November 25, 2001. This period is the last month of the
Company's fiscal 2002 second quarter.
Same-restaurant sales at Olive Garden were up 8% to 9% for the month compared
with the same period last year. These results were driven by a 4% increase in
same-restaurant guest counts, a 2% to 3% increase in pricing and a 2% increase
due to menu mix changes. During the fiscal month, Olive Garden introduced new
advertising that featured Romana Neri, head chef at its Culinary Institute of
Tuscany, leading Olive Garden chefs visiting the Institute and also highlighted
a significantly improved "Chicken Marsala". The "Chicken Marsala" offering ran
for the three weeks from October 29 through November 18, and did not carry a
price discount. During the same period last year, Olive Garden promoted its
"Stuffed Chicken Parmigiana for $9.95", resulting in a 5% to 6% same-restaurant
sales increase.
-MORE-
-4-
Same-restaurant sales at Red Lobster were up 6% to 7% for the month compared
with the prior year. This reflected a 6% to 7% increase in same-restaurant guest
counts, a 2% increase in pricing and a 2% decline from menu mix changes. Red
Lobster's successful "30 Shrimp for $9.99" promotion started September 10 and
ended on November 18. For November last year, Red Lobster's advertising emphasis
was on brand building, and the company had a 7% to 8% same-restaurant sales
increase.
At the end of its fiscal second quarter, Darden Restaurants, Inc., in Orlando,
FL, owned and operated 1,182 Red Lobster, Olive Garden, Bahama Breeze and Smokey
Bones BBQ Sports Bar restaurants in North America.
Forward-looking statements in this news release, if any, are made under the Safe
Harbor provisions of the Private Securities Litigation Reform Act of 1995.
Certain important factors could cause results to differ materially from those
anticipated by the forward-looking statements, including the impact of changing
economic or business conditions, the impact of competition, the availability of
favorable credit and trade terms, the impact of changes in the cost or
availability of food and real estate, government regulation, construction costs,
weather conditions and other factors discussed from time to time in reports
filed by the company with the Securities and Exchange Commission.
DARDEN RESTAURANTS, INC.
NUMBER OF RESTAURANTS
11/26/00 11/25/01
-------- --------
620 Red Lobster USA 629
32 Red Lobster Canada 32
-- --
652 Total Red Lobster 661
463 Olive Garden USA 478
5 Olive Garden Canada 6
- -
468 Total Olive Garden 484
15 Bahama Breeze 25
4 Smokey Bones BBQ 12
----- ----
1,139 Total Restaurants 1,182
-END-
DARDEN RESTAURANTS, INC.
SECOND QUARTER FY 2002 FINANCIAL HIGHLIGHTS
(Unaudited)
(In Millions, Except per Share Data)
13 Weeks Ended 26 Weeks Ended
11/25/2001 11/26/2000 11/25/2001 11/26/2000
---------- ---------- ---------- ----------
Sales $1,013.5 $932.0 $2,095.0 $1,950.2
Net Earnings (1) $36.5 $29.5 $98.6 $86.5
Net Earnings per Share (1):
Basic $0.31 $0.25 $0.84 $0.72
Diluted $0.30 $0.24 $0.81 $0.70
Average Number of Common Shares Outstanding:
Basic 116.8 119.8 117.1 120.7
Diluted 122.0 123.7 122.2 124.1
Note:
(1) Earnings before restructuring credit were as follows:
Earnings before Restructuring Credit $35.1 $29.5 $97.2 $86.5
Earnings per Share before Restructuring Credit:
Basic $0.30 $0.25 $0.83 $0.72
Diluted $0.29 $0.24 $0.80 $0.70
-5-
DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In Thousands, Except per Share Data)
13 Weeks Ended 26 Weeks Ended
11/25/2001 11/26/2000 11/25/2001 11/26/2000
---------- ---------- ---------- ----------
Sales $1,013,504 $931,958 $2,094,994 $1,950,163
Costs and Expenses:
Cost of sales:
Food and beverage 321,302 298,361 664,894 629,398
Restaurant labor 328,361 302,908 661,807 621,539
Restaurant expenses 153,658 135,857 307,808 275,301
Total Cost of Sales 803,321 737,126 1,634,509 1,526,238
Selling, general and administrative 106,154 105,955 213,095 205,300
Depreciation and amortization 41,061 35,789 80,571 71,425
Interest, net 8,982 7,777 17,256 14,051
Restru -2,269 -2,269
Total Costs and Expenses 957,249 886,647 1,943,162 1,817,014
Earnings before Income Taxes 56,255 45,311 151,832 133,149
Income Taxes -19,792 -15,770 -53,213 -46,687
Net Earnings $36,463 $29,541 $98,619 $86,462
Net Earnings per Share:
Basic $0.31 $0.25 $0.84 $0.72
Diluted $0.30 $0.24 $0.81 $0.70
Average Number of Common Shares Outstanding:
Basic 116,800 119,800 117,100 120,700
Diluted 122,000 123,700 122,200 124,100
Note:
(1) Earnings before restructuring credit were as follows:
13 Weeks Ended 26 Weeks Ended
11/25/2001 11/26/2000 11/25/2001 11/26/2000
---------- ---------- ---------- ----------
Pretax Earnings before Restructuring
Credit $53,986 $45,311 $149,563 $133,149
Income Taxes -18,917 -15,770 -52,338 -46,687
Earnings before Restructuring Credit $35,069 $29,541 $97,225 $86,462
Earnings per Share before Restructuring
Credit
Basic $0.30 $0.25 $0.83 $0.72
Diluted $0.29 $0.24 $0.80 $0.70
-6-
DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
11/25/2001 5/27/2001
---------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $ 19,999 $ 61,814
Receivables 24,579 32,870
Inventories 226,796 148,429
Net assets held for disposal 10,489 10,087
Prepaid expenses and other current asset 16,355 26,942
Deferred income taxes 48,502 48,000
Total Current Assets 346,720 328,142
Land, Buildings and Equipment 1,824,715 1,779,515
Other Assets 150,193 108,877
Total Assets $2,321,628 $2,216,534
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 132,384 $ 156,859
Short-term debt 107,000 12,000
Current portion of long-term debt 2,640 2,647
Accrued payroll 67,776 82,588
Accrued income taxes 37,901 47,698
Other accrued taxes 26,461 27,429
Other current liabilities 217,829 225,037
Total Current Liabilities $ 591,991 $ 554,258
Long-term Debt 514,278 517,927
Deferred Income Taxes 93,738 90,782
Other Liabilities 19,849 20,249
Total Liabilities $1,219,856 $1,183,216
Stockholders' Equity:
Common stock and surplus $1,440,381 $1,405,799
Retained earnings 626,103 532,121
Treasury stock -899,989 -840,254
Accumulated other comprehensive income -13,931 -13,102
Unearned compensation -48,833 -49,322
Officer notes receivable -1,959 -1,924
Total Stockholders' Equity $1,101,772 $1,033,318
Total Liabilities and Stockholders' Equity $2,321,628 $2,216,534
-7-
EXHIBIT 99.2
[GRAPHIC OMITTED]
www.darden.com
NEWS/INFORMATION
Corporate Relations
P.O. Box 593330
Orlando, FL 32859
Contacts:
(Media) Rick Walsh (407) 245-5366
(Analysts) Matthew Stroud (407) 245-5550
FOR RELEASE
December 13, 2001
DAVID HUGHES, CHAIRMAN & CEO HUGHES SUPPLY
ELECTED TO DARDEN RESTAURANTS BOARD
ORLANDO, FL, December 13, 2001- Darden Restaurants, Inc. has elected David
Hughes, Chairman & CEO of Hughes Supply, to its board of directors. Darden owns
and operates the Red Lobster, Olive Garden, Bahama Breeze and Smokey Bones
restaurant companies.
"We are very pleased to welcome David to our board," said Joe Lee, Darden
Chairman & CEO. "His extensive experience building a successful business and
proven leadership skills will be a tremendous asset to our company as we
continue to build Darden into the best casual dining company now and for
generations."
"Darden is a solid, growing company with strong corporate ethics and a
reputation for being inclusive and helping communities where they operate," said
Hughes. "It's an honor to join the board of such a strong company and I look
forward to helping them continue to build and strengthen their brands."
Hughes began his career at Hughes Supply, Inc. on a part-time basis while still
in high school and joined the company full-time after graduation from college.
He was promoted to President in 1972, Chief Executive Officer in 1974 and
Chairman & CEO in 1986.
Hughes also serves on the board of directors for SunTrust Banks, Inc. and Brown
& Brown Insurance. He has been very active in the Central Florida community for
many years, serving as past-chairman of the Orlando Regional Healthcare System
and the Economic Development Commission of Mid-Florida. He currently serves with
the Boys and Girls Club of America and on the boards of Council of 100 and the
Florida Bar Association.
Hughes joins Darden's other directors: Dr. Leonard L. Berry, Professor of
Marketing, Texas A&M University; Brad Blum, President, Olive Garden; Odie C.
Donald, Past President, DirectTV; Julius Erving, II, Vice President RDV Sports &
Executive Vice President, Orlando Magic; Joe R. Lee; Former United States
Senator Connie Mack, III; Dick Rivera, President, Red Lobster; Michael D. Rose,
Chairman, Midaro Investments, Inc.; Maria A. Sastre, Vice President Total Guest
Satisfaction Services, Royal Caribbean International; Jack A. Smith, Past
Chairman of the Board, The Sports Authority; Blaine Sweatt, President, Darden
New Business Development; Rita P. Wilson, Past President, Allstate Indemnity
Company.
Darden Restaurants, with headquarters in Orlando, Florida, is the world's
largest casual dining company, with more than 1,173 restaurants operating under
the Red Lobster, Olive Garden, Bahama Breeze and Smokey Bones brands; over
128,000 employees; and annual sales of over $4 billion.