Exhibit 99
DARDEN RESTAURANTS
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) 245-6458
(Media) Jim DeSimone (407) 245-4567
FOR RELEASE
June 20, 2005
4:30 PM ET
DARDEN RESTAURANTS REPORTS ANNUAL AND
FOURTH QUARTER DILUTED NET EARNINGS PER SHARE
ORLANDO, FL, June 20 - Darden Restaurants, Inc. (NYSE:DRI) today reported
diluted net earnings per share for the fiscal year and fiscal fourth quarter
ended May 29, 2005. For the fiscal year, diluted net earnings per share were
$1.78, a 33% increase, on net earnings of $290.6 million. In the fourth quarter,
diluted net earnings per share were 52 cents, a 63% increase, on net earnings of
$84.0 million. Excluding last year's fourth quarter asset impairment and
restructuring charges, diluted net earnings per share for the quarter and fiscal
year increased 16% and 21%, respectively, over the same periods last year.
Darden Restaurants, the world's largest casual dining company, reported that
full year sales increased 5.5% to $5.3 billion. In the fourth quarter, sales
increased 2.6% to $1.4 billion, driven primarily by strong sales at Olive Garden
and new restaurant growth at Smokey Bones. Excluding the additional operating
week in the fourth quarter of last year, annual sales grew 7.4% and fourth
quarter sales grew 9.9% over the prior year.
"This quarter's strong earnings growth was a great ending to a milestone year
for Darden Restaurants," said Clarence Otis, Darden's Chief Executive Officer.
"In 2005, we completed transitions in a number of key leadership positions,
celebrated our tenth anniversary as a publicly traded company and achieved
record earnings. Our long-term success and exceptional results this year are a
testament to the power of combining a strong culture with competitively superior
people and strong brand management, restaurant operations and restaurant
support. This winning combination helped us pioneer casual dining, and we're
convinced it will help us pioneer the industry's next frontier and become the
best company in casual dining, now and for generations."
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Highlights for the quarter and year ended May 29, 2005 include the following:
o Net earnings for the fiscal year were $290.6 million, or $1.78 per diluted
share, on sales of $5.3 billion (52 weeks). Last year, net earnings were
$227.2 million, or $1.34 per diluted share, for the fiscal year. Excluding
last year's asset impairment and restructuring charges of $23.1 million net
of income taxes, in the fourth quarter, net earnings were $250.2 million,
or $1.47 per diluted share, on sales of $5.0 billion (53 weeks).
o Net earnings for the fourth quarter were $84.0 million, or 52 cents per
diluted share, on sales of $1.4 billion (13 weeks). Last year, net earnings
were $52.7 million, or 32 cents per diluted share, for the fourth quarter,
on sales of $1.4 billion (14 weeks). Excluding last year's fourth quarter
asset impairment and restructuring charges of $23.1 million net of income
taxes, net earnings were $75.7 million, or 45 cents per diluted share.
o Olive Garden's U.S. same-restaurant sales increased 9.9% in the fourth
quarter on a 13 weeks versus 13 weeks basis. This is the 43rd consecutive
quarter of same-restaurant sales growth, bringing Olive Garden's
same-restaurant sales increase for the fiscal year to 7.2% on a 52 weeks
versus 52 weeks basis.
o Red Lobster's U.S. same-restaurant sales increased 3.4% in the fourth
quarter on a 13 weeks versus 13 weeks basis. This brings Red Lobster's
same-restaurant sales growth for the fiscal year to 0.9% on a 52 weeks
versus 52 weeks basis.
o Smokey Bones opened six restaurants during the fourth quarter and, with a
total of 35 openings during the fiscal year, increased to 104 restaurants
in operation.
o Darden purchased 4.5 million shares of its common stock in the fourth
quarter, bringing the total number of shares repurchased during the year to
11.3 million.
Operating Highlights
OLIVE GARDEN'S fourth quarter sales of $626.9 million were 5.6% above prior year
(13 weeks versus 14 weeks), driven primarily by a same-restaurant sales increase
of 9.9% (on a 13 weeks versus 13 weeks basis) and revenue from 20 net new
restaurants opened during fiscal 2005. Olive Garden had record total sales for
the fiscal year of $2.4 billion, up 8.5% from last year, and its average annual
sales per restaurant were $4.4 million as same-restaurant sales increased 7.2%
for the fiscal year (on a 52 weeks versus 52 weeks basis). Excluding last year's
additional operating week, annual sales increased 10.6% and fourth quarter sales
rose 13.6%. For the quarter, the company's sales gains and lower depreciation
expense and selling, general, and administrative expenses as a percent of sales,
more than offset increased food and beverage costs, restaurant expenses and
restaurant labor expenses as a percent of sales. This resulted in a strong
increase in operating profit for the quarter and the year along with record
annual operating profit and return on sales.
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RED LOBSTER'S fourth quarter sales of $635.3 million were 2.7% below prior year
(13 weeks versus 14 weeks). Same-restaurant sales increased 3.4% in the fourth
quarter (on a 13 weeks versus 13 weeks basis). Red Lobster's total sales for the
fiscal year were $2.4 billion, equal to last year, and its average annual sales
per restaurant were $3.6 million. Same-restaurant sales for the fiscal year were
up 0.9% (on a 52 weeks versus 52 weeks basis). Excluding last year's additional
operating week, annual sales grew 1.7% and fourth quarter sales increased 3.8%.
The impact of one less operating week than the prior year, as well as higher
restaurant labor and marketing expenses as a percent of sales, were mostly
offset by lower food and beverage costs, restaurant expenses and general and
administrative expenses as a percent of sales. The net result was slightly lower
operating profit compared to the fourth quarter of last year, although Red
Lobster recorded a solid increase in operating profit for the fourth quarter on
a 13 weeks versus 13 weeks basis.
BAHAMA BREEZE'S total sales were $163.6 million in fiscal 2005 and average
annual sales per restaurant were $5.1 million. Same-restaurant sales for the
fiscal year were down 1.6% (on a 52 weeks versus 52 weeks basis). Bahama
Breeze's operating profit was slightly positive this year and was significantly
favorable to last year.
SMOKEY BONES opened six restaurants during the fourth quarter and had 104
restaurants in operation at the end of the fiscal year. Since the end of the
quarter, one restaurant has closed and two have opened. Total sales for Smokey
Bones were $269.3 million in fiscal 2005 and average annual sales per restaurant
were $3.1 million, which compares to average annual sales of $3.2 million last
year. Smokey Bones' same-restaurant sales for the fiscal year increased 1.1% (on
a 52 weeks versus 52 weeks basis). The company plans to open 25 to 30
restaurants during fiscal 2006.
"Darden delivered outstanding operating performance this quarter and this fiscal
year," said Drew Madsen, President and Chief Operating Officer for Darden. "Once
again, Olive Garden led the way with tremendous sales and operating profit
growth combined with strong guest satisfaction. Red Lobster made excellent
progress, achieving three consecutive quarters of same-restaurant sales growth
and solid annual operating profit growth as well as record guest satisfaction
scores. Bahama Breeze's strengthening business model led to a substantial
improvement in financial performance this year as they reached profitability.
While Smokey Bones fell short of our profitability target for the fourth
quarter, they enjoyed same-restaurant sales growth for the year and continued to
deliver high levels of guest satisfaction even as they rapidly grew their
business."
Other Actions
Darden continued the buyback of its common stock, purchasing 4.5 million shares
in the fourth quarter. Since commencing its purchase program in December 1995,
the Company has purchased a total of 120.6 million shares under authorizations
totaling 137.4 million shares.
The Company's Annual Meeting of Shareholders will be held on September 21, 2005
at the Gaylord Palms Orlando Resort Hotel in Kissimmee, FL. The record date for
shareholders entitled to vote at the Annual Meeting is July 25, 2005.
May 2005 U.S. Same-Restaurant Sales Results
Darden reported U.S. same-restaurant sales for the four-week May fiscal month
ended May 29, 2005. This period is the last month of Darden's fiscal 2005 fourth
quarter.
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Same-restaurant sales at Olive Garden were up 11% to 12% for fiscal May on a
four weeks versus four weeks basis, which reflected a 2% to 3% increase in check
average and a 9% to 10% increase in guest counts. The check average increase was
a result of a 2% increase in pricing and a 0% to 1% increase from menu mix
changes. Last year, same-restaurant sales at Olive Garden were up 1% to 2%
during fiscal May.
Same-restaurant sales at Red Lobster were up 5% to 6% for fiscal May on a four
weeks versus four weeks basis, which reflected a 1% to 2% increase in check
average and a 3% to 4% increase in guest counts. The check average increase was
a result of a 1% to 2% increase in pricing and a 0% to 1% increase from menu mix
changes. Last year, same-restaurant sales at Red Lobster were down 4% to 5%
during fiscal May.
Fiscal 2006 Outlook
Darden expects combined same-restaurant sales growth in fiscal 2006 of between
2% and 4% for Red Lobster and Olive Garden. Darden also expects to open between
55 and 65 new restaurants in fiscal 2006.
"We are committed to keeping Red Lobster and Smokey Bones confidently on a path
to capturing their full potential, positioning Bahama Breeze for growth and
building on Olive Garden's strong momentum," said Otis. "With the investments
required, solid same-restaurant sales growth at all our brands, new restaurant
growth somewhat above our fiscal 2005 levels and meaningful year-over-year
earnings improvement at Smokey Bones at its greater scale, we anticipate low
double-digit diluted net earnings per share growth in fiscal 2006."
Darden Restaurants, Inc., headquartered in Orlando, FL, owns and operates over
1,380 Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones and Seasons 52
restaurants with annual sales of $5.3 billion.
NON-GAAP REPORTING
In addition to GAAP reporting, Darden has reported net earnings as well as
diluted net earnings per share on a non-GAAP basis for the fiscal year and
fiscal fourth quarter ended May 30, 2004. This non-GAAP earnings information
excludes the fourth quarter asset impairment and restructuring charges totaling
approximately $23.1 million net of income taxes, for the closure of six Bahama
Breeze restaurants and a write down of the value of four other Bahama Breeze
restaurants, one Olive Garden restaurant and one Red Lobster restaurant. Darden
believes this non-GAAP earnings information provides meaningful insight into the
Company's on-going performance and has therefore chosen to provide this
information to investors for a more consistent basis of comparison and to
emphasize the results of on-going operations. Darden also uses this information
internally to evaluate and manage its operations and to determine incentive
compensation. A reconciliation between GAAP and non-GAAP net earnings and
diluted net earnings per share for the fiscal year and fiscal fourth quarter
ended May 30, 2004 is included in the table below.
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14 weeks ended 5/30/2004 53 weeks ended 5/30/2004
Diluted Net Diluted Net
(In thousands except per share data) Net Earnings Net Earnings
Earnings Per Share Earnings Per Share
As reported $52,681 $0.32 $227,173 $1.34
Asset impairment and restructuring charge, net
of income taxes 23,053 0.13 23,053 0.13
Adjusted $75,734 $0.45 $250,226 $1.47
Forward-looking statements in this news release 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
05/29/05 05/30/04
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648 Red Lobster USA 649
31 Red Lobster Canada 31
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679 Total Red Lobster 680
557 Olive Garden USA 537
6 Olive Garden Canada 6
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563 Total Olive Garden 543
32 Bahama Breeze 32
104 Smokey Bones 69
3 Seasons 52 1
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1,381 Total Restaurants 1,325
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DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
13 Weeks 14 Weeks 52 Weeks 53 Weeks
Ended Ended Ended Ended
5/29/2005 5/30/2004 5/29/2005 5/30/2004
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(as restated)* (as restated)*
Sales $1,394,214 $1,359,171 $5,278,110 $5,003,355
Costs and expenses:
Cost of sales:
Food and beverage 421,389 411,418 1,593,709 1,526,875
Restaurant labor 453,615 442,290 1,695,805 1,601,258
Restaurant expenses 202,092 198,719 806,314 774,806
Total cost of sales (1) $1,077,096 $1,052,427 $4,095,828 $3,902,939
Selling, general and administrative 128,123 128,641 497,478 472,109
Depreciation and amortization 54,562 54,224 213,219 210,004
Interest, net 10,743 11,349 43,119 43,659
Asset impairment and restructuring charges, net 2,051 37,823 4,549 41,868
Total costs and expenses $1,272,575 $1,284,464 $4,854,193 $4,670,579
Earnings before income taxes 121,639 74,707 423,917 332,776
Income taxes (37,650) (22,026) (133,311) (105,603)
Net earnings $ 83,989 $ 52,681 $ 290,606 $ 227,173
Net earnings per share:
Basic $ 0.54 $ 0.33 $ 1.85 $ 1.39
Diluted $ 0.52 $ 0.32 $ 1.78 $ 1.34
Average number of common shares outstanding:
Basic 155,200 160,300 156,700 163,500
Diluted 162,000 166,900 163,400 169,700
(1) Excludes restaurant depreciation and
amortization as follows: $ 50,670 $ 50,271 $ 198,422 $ 195,486
* Amounts reflect the impact of the restatement of our financial statements, as
disclosed in our 10-K/A dated January 7, 2005.
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DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
5/29/2005 5/30/2004
ASSETS (as restated)*
Current assets:
Cash and cash equivalents $ 42,801 $ 36,694
Receivables 36,510 30,258
Inventories 235,444 198,781
Prepaid expenses and other current assets 28,927 25,316
Deferred income taxes 63,584 55,258
Total current assets $ 407,266 $ 346,307
Land, buildings and equipment, net 2,351,454 2,250,616
Other assets 179,051 183,425
Total assets $ 2,937,771 $ 2,780,348
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 191,197 $ 174,624
Short-term debt -- 14,500
Accrued payroll 114,602 103,327
Accrued income taxes 52,404 48,753
Other accrued taxes 43,825 38,440
Unearned revenues 88,472 75,513
Current portion of long-term debt 299,929 --
Other current liabilities 254,178 228,324
Total current liabilities $ 1,044,607 $ 683,481
Long-term debt, less current portion 350,318 653,349
Deferred income taxes 114,846 132,690
Deferred rent 130,872 122,879
Other liabilities 24,109 12,661
Total liabilities $ 1,664,752 $ 1,605,060
Stockholders' equity:
Common stock and surplus $ 1,703,336 $ 1,584,115
Retained earnings 1,405,754 1,127,653
Treasury stock (1,784,835) (1,483,768)
Accumulated other comprehensive income (8,876) (10,173)
Unearned compensation (41,685) (41,401)
Officer notes receivable (675) (1,138)
Total stockholders' equity $ 1,273,019 $ 1,175,288
Total liabilities and stockholders'
equity $ 2,937,771 $ 2,780,348
* Amounts reflect the impact of the restatement of our financial statements, as
disclosed in our 10-K/A dated January 7, 2005.
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DARDEN RESTAURANTS, INC.
Fourth Quarter FY 2005 FINANCIAL HIGHLIGHTS
(In millions, except per share data)
(Unaudited)
13 Weeks 14 Weeks 52 Weeks 53 Weeks
Ended Ended Ended Ended
5/29/2005 5/30/2004 5/29/2005 5/30/2004
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(as restated)* (as restated)*
Sales $1,394.2 $ 1,359.2 $ 5,278.1 $ 5,003.4
Net Earnings $ 84.0 $ 52.7 $ 290.6 $ 227.2
Net Earnings per Share:
Basic $ 0.54 $ 0.33 $ 1.85 $ 1.39
Diluted $ 0.52 $ 0.32 $ 1.78 $ 1.34
Average Number of Common Shares Outstanding:
Basic 155.2 160.3 156.7 163.5
Diluted 162.0 166.9 163.4 169.7
* Amounts reflect the impact of the restatement of our financial statements, as
disclosed in our 10-K/A dated January 7, 2005.
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