As filed with the Securities and Exchange Commission on June 21, 2002.
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):
June 20, 2002
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 June 20, 2002, the Registrant issued a news release entitled
"Darden Restaurants Reports Record Annual And Record Fourth
Quarter Earnings Per Diluted Share," and a copy is being filed
herewith as Exhibit 99.
Item 7. Financial Statements and Exhibits.
---------------------------------
(c) Exhibits.
Exhibit Number
(by reference to
Item 601 of
Regulation S-K) Description
99 Press Release dated June 20,
2002, entitled "Darden
Restaurants Reports Record
Annual And Record Fourth
Quarter Earnings Per
Diluted Share."
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: June 20, 2002 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 Press Release dated June 20, 2002, entitled "Darden
Restaurants Reports Record Annual And Record Fourth
Quarter Earnings Per Diluted Share."
4
EXHIBIT 99
[OBJECT OMITTED]
Red Lobster(R)Olive Garden(R)Bahama Breeze(R)Smokey Bones(R)
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
June 20, 2002
4:30 PM EDT
DARDEN RESTAURANTS REPORTS RECORD ANNUAL AND
RECORD FOURTH QUARTER EARNINGS PER DILUTED SHARE
ORLANDO, FL - June 20 -- Darden Restaurants, Inc. today reported record earnings
per diluted share for the fiscal year and fiscal fourth quarter ended May 26,
2002. Earnings per diluted share were $1.30 for the year on earnings after tax
of $237.8 million, and 40 cents for the fourth quarter on earnings after tax of
$72.9 million. Excluding unusual restructuring credits in the second and fourth
quarters, earnings per diluted share were $1.29 for the year, a 22% increase
over the prior year, and 40 cents for the fourth quarter, a 21% increase.
Darden, the world's largest casual dining company, said full year sales
increased over 9% to $4.4 billion. Fourth quarter sales increased over 8% to
$1.2 billion, driven by comparable-restaurant sales gains at Red Lobster and
Olive Garden that again exceeded the casual dining industry average as measured
by Knapp-Track.
Sales for all reporting periods have been adjusted to reflect recently adopted
accounting rules, which require that sales incentives such as coupons and
discounts be recorded as reductions to sales rather than marketing expenses. All
earnings per share results and outstanding shares have been adjusted to reflect
the 3 for 2 stock split in the form of a 50% share dividend that was paid on May
1, 2002 for shareholders of record as of April 10, 2002.
"This was another year of strong performance at Darden Restaurants, capped off
by an outstanding fourth quarter," said Joe R. Lee, Chairman and Chief Executive
Officer. "We prepared well for the economic softness that existed for much of
the year, with effective strategies that included an even stronger focus on
operating excellence as well as attractive advertising and appealing promotions.
And, in a year marked by unimaginable loss in our nation, the people of Darden
Restaurants were great sources of support to our guests, to our friends and
neighbors and to one another. Their spirit of service, our trusted brands and
our powerful combination of leadership breadth and financial strength give me
confidence we will achieve our vision of being the best in casual dining, now
and for generations."
Highlights for the year and quarter ended May 26, 2002, include the following:
o Earnings after tax were $237.8 million, or $1.30 per diluted share for the
fiscal year, and $72.9 million, or 40 cents per diluted share, for the
fourth quarter. These results include unusual items totaling
approximately $1.6 million after-tax, which include after-tax restructuring
credits of $1.4 million in the second quarter and $184,000 in the fourth
quarter. The credits reflect the reversal of a portion of the Company's
fiscal 1997 restructuring reserve, primarily because of favorable lease
terminations.
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o Excluding the unusual credits, earnings after tax for the fiscal year were
$236.2 million, or $1.29 per diluted share, on sales of $4.4 billion. Last
year, earnings after tax were $197.0 million, or $1.06 cents per diluted
share, on sales of $4.0 billion.
o Excluding the unusual credit, earnings after tax for the fourth quarter
were $72.8 million, or 40 cents per diluted share, on sales of $1.2
billion. Last year, earnings after tax were $61.0 million, or 33 cents per
diluted share, on sales of $1.1 billion.
o Olive Garden's same-restaurant sales increased 5.3% in the fourth quarter,
its 31st consecutive quarter of comparable-restaurant sales growth,
bringing Olive Garden's increase for the fiscal year to 6.3%.
o Red Lobster's same-restaurant sales rose 3.7% in the fourth quarter, its
18th consecutive quarter of comparable-restaurant sales growth, and
resulted in a 6.2% increase for the year.
o Bahama Breeze opened three restaurants during the quarter, bringing its
total number of restaurants to 29, and its sales for the full fiscal year
exceeded $125 million.
o Smokey Bones BBQ Sports Bar also opened three restaurants during the
quarter and, with ten openings for the full fiscal year, more that doubled
in size to 19 restaurants in operation.
o Darden purchased 1.4 million shares of its common stock in the fourth
quarter, bringing the total number of shares repurchased during the year to
9 million.
Operating Highlights
OLIVE GARDEN'S fourth quarter sales of $484.3 million were 9.6% above prior
year; driven by a 5.3% same-restaurant sales increase and increased revenues
from 19 new restaurants opened in fiscal 2002. This is the 31st consecutive
quarter of comparable-restaurant sales growth for Olive Garden, and builds on a
7.1% increase in the fourth quarter last year. Olive Garden's total sales for
the fiscal year were $1.86 billion, up 9.5% from the prior year, and its annual
average sales per restaurant increased to $3.9 million - both record levels.
Olive Garden had a double-digit percentage increase in operating profit for the
7th consecutive fiscal year, reaching a new high in operating profit as well.
"It was another rewarding year for our company," said Drew Madsen, President of
Olive Garden. "The Olive Garden guest experience has never been stronger, and
this operating excellence is supported by solid marketing that continues to
build the brand and fuel guest count growth. Our team keeps demonstrating the
power of providing our guests with a genuine Italian dining experience, which we
define as fresh, simple, delicious Italian food, accompanied by great wine in a
home-like Italian setting, where you're treated like family."
RED LOBSTER'S fourth quarter sales of $626.9 million were 5.2% above prior year,
propelled by a 3.7% same-restaurant sales increase. This 18th consecutive
quarter of growth comes on top of Red Lobster's 3.8% same-restaurant sales
increase in last year's fourth quarter. Total sales of $2.34 billion for the
fiscal year were 7.1% above last year and average sales per restaurant for the
year were $3.5 million - record levels for Red Lobster. Operating profit for the
fiscal year increased at a double-digit percentage rate and established a new
record for Red Lobster.
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"It was a terrific year," said Edna Morris, President of Red Lobster. "In our
34th year, Red Lobster remains a trusted brand; and we're strengthening our
brand with significant improvements in our look, our culinary and beverage
offerings and our service. A key element is the stability, expertise and
commitment of our crew. Inspired by a passion for providing hospitality you can
taste and touch, they are delivering to our guests a fresh approach to casual
dining with great seafood, good times and hospitality."
BAHAMA BREEZE opened three restaurants during the quarter bringing the total
number in operation to 29 restaurants. The latest restaurants are located in
Indianapolis, Las Colinas (Dallas, TX) and Schaumburg (Chicago, IL). Bahama
Breeze now operates restaurants in 20 different markets located in 16 states,
and delivered annual sales of over $125 million in fiscal 2002. Bahama Breeze
expects to open between six and ten restaurants in fiscal 2003.
SMOKEY BONES BBQ SPORTS BAR opened three restaurants during the quarter, and now
has 19 units in operation. The newest are in Bowling Green, KY, Tallahassee, FL
and Melbourne, FL. Annual sales for Smokey Bones were over $42 million in fiscal
2002, and it plans to open 20 to 25 restaurants in fiscal 2003.
Other Actions
Darden continued the buyback of its common stock, purchasing 1.4 million shares
in the fourth quarter. Since commencing its repurchase program in December 1995,
the Company has repurchased a total of 87.7 million shares under authorizations
totaling 96.9 million shares.
The Board of Directors announced that the Company's Annual Meeting of
Shareholders will be held on September 19, 2002 at the Gaylord Palms Resort in
Kissimmee, FL. The Board of Directors declared July 22, 2002 as the record date
for shareholders entitled to vote at the Annual Meeting.
May 2002 Same-Restaurant Sales Results
Darden reported same-restaurant sales for the four-week May fiscal month ended
May 26, 2002. This period is the last month of the Company's fiscal 2002 fourth
quarter.
Same-restaurant sales at Olive Garden were up 8% to 9% for the month, driven by
a 3% to 4% increase in guest counts. Average check increased 4% to 5% due to a
2% increase in pricing and a 2% to 3% increase from menu mix changes. Olive
Garden's "Chicken and Shrimp Limone" was featured from April 8 to May 5 and that
feature was resumed from May 13 to May 26. In fiscal May of last year, Olive
Garden had a 3% to 4% same-restaurant sales increase and promoted its "Tour of
Italy" featured at $9.95.
Same-restaurant sales at Red Lobster were up 6% to 7% for the month driven by a
4% increase in guest counts and growth of 2% to 3% in check average. The average
check increase resulted from a 1% to 2% increase in pricing and 1% increase from
menu mix changes. Red Lobster's Lobsterfest promotion, which began February 18,
continued through May 5. This was followed by a new promotion, "Jumbo Shrimp
Combo" for $12.99, which started on May 20 and will continue through June 30. In
fiscal May of last year, Red Lobster recorded a 3% to 4% same-restaurant sales
increase and its Lobsterfest promotion ran for the first week of the month.
Darden Restaurants, Inc., headquartered in Orlando, FL, owns and operates Red
Lobster, Olive Garden, Bahama Breeze and Smokey Bones BBQ Sports Bar restaurants
with annual sales of $4.4 billion.
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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
05/27/01 05/26/02
-------- --------
629 Red Lobster USA 636
32 Red Lobster Canada 31
-- --
661 Total Red Lobster 667
472 Olive Garden USA 490
5 Olive Garden Canada 6
- -
477 Total Olive Garden 496
21 Bahama Breeze 29
9 Smokey Bones BBQ 19
------ -----
1,168 Total Restaurants 1,211
-END-
DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except per Share Data)
(Unaudited)
13 Weeks Ended 52 Weeks Ended
05/26/2002 05/27/2001 05/26/2002 05/27/2001
---------- ---------- ---------- ----------
Sales $1,162,373 $1,074,032 $4,368,701 $3,992,419
Costs and Expenses:
Cost of sales:
Food and beverage 369,277 360,286 1,384,481 1,302,926
Restaurant labor 353,282 326,368 1,373,416 1,261,837
Restaurant expenses 166,003 149,865 626,702 599,670
Total Cost of Sales 888,562 836,519 3,384,599 3,124,433
Selling, general and administrative 111,803 98,503 420,947 389,240
Depreciation and amortization 43,393 38,347 165,829 146,864
Interest, net 10,213 8,085 36,585 30,664
Restructuring credit (1) -299 -- -2,568 --
Total Costs and Expenses 1,053,672 981,454 4,005,392 3,691,201
Earnings before Income Taxes 108,701 92,578 363,309 301,218
Income Taxes -35,752 -31,567 -125,521 -104,218
Net Earnings $72,949 $61,011 $237,788 $197,000
Net Earnings per Share:
Basic $0.42 $0.35 $1.36 $1.10
Diluted $0.40 $0.33 $1.30 $1.06
Average Number of Common Shares Outstanding:
Basic 172,700 176,800 174,700 179,600
Diluted 182,200 184,000 183,500 185,600
Note:
(1) Earnings before restructuring credit were as follows:
13 Weeks Ended 52 Weeks Ended
5/26/2002 5/27/2001 5/26/2002 5/27/2001
--------- --------- --------- ---------
Pretax Earnings before Restructuring Credit $108,402 $92,578 $360,741 $301,218
Income Taxes -35,637 -31,567 -124,530 -104,218
Earnings before Restructuring Credit $72,765 $61,011 $236,211 $197,000
Earnings per Share before Restructuring Credit:
Basic $0.42 $0.35 $1.35 $1.10
Diluted $0.40 $0.33 $1.29 $1.06
DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
5/26/2002 5/27/2001
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $152,875 $61,814
Short-term investments 9,904 --
Receivables 29,089 32,870
Inventories 172,413 148,429
Net assets held for disposal 10,047 10,087
Prepaid expenses and other current assets 23,076 26,942
Deferred income taxes 52,127 48,000
Total Current Assets $449,531 $328,142
Land, Buildings and Equipment 1,920,768 1,779,515
Other Assets 159,437 108,877
Total Assets $2,529,736 $2,216,534
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $160,064 $156,859
Short-term debt -- 12,000
Current portion of long-term debt -- 2,647
Accrued payroll 87,936 82,588
Accrued income taxes 68,504 47,698
Other accrued taxes 30,474 27,429
Other current liabilities 254,036 225,037
Total Current Liabilities $601,014 $554,258
Long-term Debt 662,506 517,927
Deferred Income Taxes 117,709 90,782
Other Liabilities 19,630 20,249
Total Liabilities $1,400,859 $1,183,216
Stockholders' Equity:
Common stock and surplus $1,474,054 $1,405,799
Retained earnings 760,684 532,121
Treasury stock -1,044,915 -840,254
Accumulated other comprehensive income -12,841 -13,102
Unearned compensation -46,108 -49,322
Officer notes receivable -1,997 -1,924
Total Stockholders' Equity $1,128,877 $1,033,318
Total Liabilities and Stockholders' Equity $2,529,736 $2,216,534
DARDEN RESTAURANTS, INC.
FOURTH QUARTER FY 2002 FINANCIAL HIGHLIGHTS
(In Millions, Except per Share Data)
(Unaudited)
13 Weeks Ended 52 Weeks Ended
5/26/2002 5/27/2001 5/26/2002 5/27/2001
--------- --------- --------- ---------
Sales $1,162.4 $1,074.0 $4,368.7 $3,992.4
Net Earnings (1) $72.9 $61.0 $237.8 $197.0
Net Earnings per Share (1):
Basic $0.42 $0.35 $1.36 $1.10
Diluted $0.40 $0.33 $1.30 $1.06
Average Number of Common Shares Outstanding:
Basic 172.7 176.8 174.7 179.6
Diluted 182.2 184.0 183.5 185.6
Note:
(1) Earnings before restructuring credit were as follows:
Earnings before Restructuring Credit $72.8 $61.0 $236.2 $197.0
Earnings per Share before Restructuring Credit:
Basic $0.42 $0.35 $1.35 $1.10
Diluted $0.40 $0.33 $1.29 $1.06