Q2 Diluted EPS of $(0.72) and Adjusted Diluted EPS of $0.68
Reiterates Full Year Adjusted Profit and EPS Expectations
Raises Full Year Guidance for Total Revenues
Declares Quarterly Cash Dividend of $0.14 per share
TAMPA, Fla., July 29, 2022 - Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for the second quarter 2022 (“Q2 2022”) compared to the second quarter 2021 (“Q2 2021”).
CEO Comments
“We delivered another solid quarter of results that highlights the strength of our portfolio,” said David Deno, CEO. “Importantly, we achieved this performance despite increased inflationary headwinds and a softening macro environment in June. The ability to leverage our leading off-premises business, capitalize on growing digital capabilities, and improve operational efficiencies has enabled us to deliver on our commitments. We remain focused on executing against our strategy to elevate the guest experience while driving sustainable sales and profits to thrive in this challenging environment.”
Diluted EPS and Adjusted Diluted EPS
The following table reconciles Diluted (loss) earnings per share to Adjusted diluted earnings per share for the periods indicated (unaudited):
Q2
2022
2021
CHANGE
Diluted (loss) earnings per share
$
(0.72)
$
0.75
$
(1.47)
Adjustments (1)
1.40
0.06
1.34
Adjusted diluted earnings per share (1)
$
0.68
$
0.81
$
(0.13)
___________________
(1)Adjustments for Q2 2022 primarily relate to the repurchase of $125 million of our outstanding convertible notes (the “2025 Notes”), as well as the settlements of the related convertible senior note hedges and warrants (the “2025 Notes Partial Repurchase”). See Non-GAAP Measures later in this release.
Second Quarter Financial Results
(dollars in millions, unaudited)
Q2 2022
Q2 2021
CHANGE
Total revenues
$
1,125.2
$
1,077.4
4.4
%
Restaurant-level operating margin
15.5
%
20.3
%
(4.8)
%
GAAP Operating income margin
7.8
%
11.6
%
(3.8)
%
Adjusted operating income margin (1)
7.8
%
11.0
%
(3.2)
%
___________________
(1)See Non-GAAP Measures later in this release.
1
•The increase in Total revenues was primarily due to: (i) higher comparable restaurant sales primarily in Brazil, (ii) the net impact of restaurant openings and closures and (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar.
•Restaurant-level operating margin decreased primarily due to: (i) commodity inflation, (ii) higher operating expenses including utilities, (iii) increased labor costs primarily due to wage rate inflation and (iv) higher advertising expense. These decreases were partially offset by: (i) increases in average check per person, (ii) the net benefit of lapping the impact of COVID-19 in Brazil and (iii) the impact of certain cost saving initiatives.
•Operating income margin decreased due to a decrease in restaurant-level operating margin as described above and benefits from value-added tax court rulings in Brazil during 2021, partially offset by lower incentive compensation.
Second Quarter Comparable Restaurant Sales
The following table includes Company-owned comparable restaurant sales for the second quarter ended June 26, 2022 as well as performance relative to 2019 for improved comparability to pre-COVID-19 restaurant sales:
THIRTEEN WEEKS ENDED
JUNE 26, 2022
Comparable restaurant sales (stores open 18 months or more):
COMPARABLE TO 2021
COMPARABLE TO 2019
U.S.
Outback Steakhouse
(1.1)
%
10.1
%
Carrabba’s Italian Grill
(1.0)
%
15.6
%
Bonefish Grill
(1.1)
%
3.3
%
Fleming’s Prime Steakhouse & Wine Bar
6.0
%
31.8
%
Combined U.S.
(0.4)
%
11.7
%
International
Outback Steakhouse - Brazil (1)
95.7
%
27.6
%
_________________
(1)Excludes the effect of fluctuations in foreign currency rates. Includes trading day impact from calendar period reporting.
The following table includes Company-owned average restaurant unit volumes for the periods indicated:
THIRTEEN WEEKS ENDED
Average restaurant unit volumes (weekly):
JUNE 26, 2022
JUNE 30, 2019 (1)
U.S.
Outback Steakhouse
$
77,941
$
69,497
Carrabba’s Italian Grill
$
66,016
$
56,285
Bonefish Grill
$
64,113
$
60,018
Fleming’s Prime Steakhouse & Wine Bar
$
112,900
$
81,754
International
Outback Steakhouse - Brazil (2)
$
61,210
$
66,829
_________________
(1)Presented for comparability to pre-COVID-19 average restaurant unit volumes.
(2)Translated at average exchange rates of 4.89 and 3.91 for the thirteen weeks ended June 26, 2022 and June 30, 2019, respectively. Brazil average restaurant unit volumes for the thirteen weeks ended June 26, 2022 are up 14% on a constant currency basis versus the comparable period in 2019.
Dividend Declaration and Share Repurchases
On July 19, 2022, our Board of Directors declared a quarterly cash dividend of $0.14 per share to be paid on August 24, 2022 to all stockholders of record as of the close of business on August 10, 2022.
On February 8, 2022, our Board of Directors approved a $125 million share repurchase program. Through July 28, 2022, we repurchased 3.2 million shares for a total of $62 million and had $63 million remaining under this authorization. This authorization will expire on August 9, 2023.
2
Fiscal 2022 Financial Outlook
The table below presents our updated expectations for selected 2022 financial operating results. We have increased our full year outlook for total revenues and expect the profit benefits from the increased revenues to be offset by higher than expected inflation. We are reaffirming all other aspects of our full-year financial guidance as previously communicated in our April 29, 2022 earnings release, including adjusted EBITDA and adjusted diluted earnings per share.
Financial Results:
Prior Outlook
Current Outlook
Total revenues
$4.35B to $4.40B
$4.40B to $4.45B
GAAP diluted earnings per share (1)
$2.23 to $2.32
$1.11 to $1.22
GAAP effective income tax rate (2)
16.5% to 17.5%
28% to 29%
Other Selected Financial Data:
Commodity inflation
11% to 13%
13% to 14%
Capital expenditures
$225M to $240M
$200M to $210M
Weighted average adjusted diluted shares (3)
Approx. 95 million
Approx. 93 million
_________________
(1)For GAAP purposes assumes weighted average diluted shares of approximately 99 million. The total change in GAAP earnings per share is due to the impact of losses related to the 2025 Notes Partial Repurchase.
(2)Increase in the GAAP effective income tax rate primarily related to the 2025 Notes Partial Repurchase in Q2 2022.
(3)Reflects the impact of the partial repurchase of the 2025 Notes.
Q3 2022 Financial Outlook
The table below presents our expectations for selected fiscal Q3 2022 financial operating results:
Financial Results:
Q3 2022 Outlook
Total revenues
$1.05B to $1.07B
GAAP diluted earnings per share (1)
$0.30 to $0.35
Adjusted diluted earnings per share (2)
$0.31 to $0.36
_________________
(1)For GAAP purposes assumes weighted average diluted shares of approximately 96 million.
(2)Assumes weighted average adjusted diluted shares of approximately 93 million, which includes the benefit of the convertible note hedge entered into in May 2020.
Conference Call
The Company will host a conference call today, July 29, 2022 at 8:15 AM EDT. The conference call will be webcast live from the Company’s website at http://www.bloominbrands.com under the Investors section. A replay of this webcast will be available on the Company’s website after the call.
Non-GAAP Measures
In addition to the results provided in accordance with GAAP, this press release and related tables include certain non-GAAP measures, which present operating results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with GAAP and include the following: (i) Adjusted income from operations and the corresponding margin, (ii) Adjusted net income, (iii) Adjusted diluted earnings per share and (iv) Adjusted segment income from operations and the corresponding margin.
We believe that our use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies. However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur. We believe that the disclosure of these non-GAAP measures is useful to investors as they form part of the basis for
3
how our management team and Board of Directors evaluate our operating performance, allocate resources and administer employee incentive plans.
These non-GAAP financial measures are not intended to replace GAAP financial measures, and they are not necessarily standardized or comparable to similarly titled measures used by other companies. We maintain internal guidelines with respect to the types of adjustments we include in our non-GAAP measures. These guidelines endeavor to differentiate between types of gains and expenses that are reflective of our core operations in a period, and those that may vary from period to period without correlation to our core performance in that period. However, implementation of these guidelines necessarily involves the application of judgment, and the treatment of any items not directly addressed by, or changes to, our guidelines will be considered by our disclosure committee. You should refer to the reconciliations of non-GAAP measures in tables four, five, six and seven included later in this release for descriptions of the actual adjustments made in the current period and the corresponding prior period.
About Bloomin’ Brands, Inc.
Bloomin’ Brands, Inc. is one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. The Company has four founder-inspired brands: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. The Company operates more than 1,500 full-service restaurants and off-premises only kitchens in 47 states, Guam and 15 countries, some of which are franchise locations. For more information, please visit www.bloominbrands.com.
Forward-Looking Statements
Certain statements contained herein, including statements under the headings “CEO Comments”, “Fiscal 2022 Financial Outlook” and “Q3 2022 Financial Outlook” are not based on historical fact and are “forward-looking statements” within the meaning of applicable securities laws. Generally, these statements can be identified by the use of words such as “guidance,” “believes,” “estimates,” “anticipates,” “expects,” “on track,” “feels,” “forecasts,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” “should,” “could,” “would” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the Company’s forward-looking statements. These risks and uncertainties include, but are not limited to: consumer reaction to public health and food safety issues; the effects of the COVID-19 pandemic and uncertainties about its depth and duration, as well as the impacts to economic conditions and consumer behavior, including, among others: the inability of workers, including delivery drivers, to work due to illness, quarantine, or government mandates, temporary restaurant closures and capacity restrictions due to reduced workforces or government mandates, the unemployment rate, the extent, availability and effectiveness of any COVID-19 stimulus packages or loan programs, the ability of our franchisees to operate their restaurants during the pandemic and pay royalties, and trends in consumer behavior and spending during and after the end of the pandemic; increases in labor costs and fluctuations in the availability of employees; increases in unemployment rates and taxes; price and availability of commodities and other impacts of inflation; competition; local, regional, national and international economic conditions; our ability to preserve the value of and grow our brands; interruption or breach of our systems or loss of consumer or employee information; our dependence on a limited number of suppliers and distributors; political, social and legal conditions in international markets and their effects on foreign operations and foreign currency exchange rates; government actions and policies; the effects of changes in tax laws; changes in patterns of consumer traffic, consumer tastes and dietary habits; challenges associated with our remodeling, relocation and expansion plans; consumer confidence and spending patterns; the seasonality of the Company’s business; weather, acts of God and other disasters; compliance with debt covenants and the Company’s ability to make debt payments and planned investments; the cost and availability of credit; interest rate changes; and any impairments in the carrying value of goodwill and other assets. Further information on potential factors that could affect the financial results of the Company and its forward-looking statements is included in its most recent Form 10-K and subsequent filings with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking
4
statement, except as may be required by law. These forward-looking statements speak only as of the date of this release. All forward-looking statements are qualified in their entirety by this cautionary statement.
Note: Numerical figures included in this release have been subject to rounding adjustments.
5
TABLE ONE
BLOOMIN’ BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
(in thousands, except per share data)
JUNE 26, 2022
JUNE 27, 2021
JUNE 26, 2022
JUNE 27, 2021
Revenues
Restaurant sales
$
1,108,918
$
1,055,227
$
2,232,493
$
2,034,678
Franchise and other revenues
16,244
22,139
33,204
30,161
Total revenues
1,125,162
1,077,366
2,265,697
2,064,839
Costs and expenses
Food and beverage costs
364,459
312,102
723,829
603,972
Labor and other related
308,759
294,999
621,270
569,637
Other restaurant operating
263,529
233,450
522,639
462,743
Depreciation and amortization
41,257
40,539
83,032
81,765
General and administrative
59,246
66,462
117,920
123,710
Provision for impaired assets and restaurant closings
193
5,177
2,032
7,377
Total costs and expenses
1,037,443
952,729
2,070,722
1,849,204
Income from operations
87,719
124,637
194,975
215,635
Loss on extinguishment and modification of debt
(107,630)
(2,073)
(107,630)
(2,073)
Loss on fair value adjustment of derivatives, net
(17,685)
—
(17,685)
—
Other income, net
—
—
—
21
Interest expense, net
(12,548)
(14,990)
(26,181)
(29,618)
(Loss) income before provision for income taxes
(50,144)
107,574
43,479
183,965
Provision for income taxes
11,536
22,688
27,465
29,281
Net (loss) income
(61,680)
84,886
16,014
154,684
Less: net income attributable to noncontrolling interests
1,955
2,341
4,138
3,277
Net (loss) income attributable to Bloomin’ Brands
(63,635)
82,545
11,876
151,407
Convertible senior notes if-converted method interest adjustment, net of tax
—
—
—
691
Diluted net (loss) income attributable to Bloomin’ Brands
$
(63,635)
$
82,545
$
11,876
$
152,098
(Loss) earnings per share:
Basic
$
(0.72)
$
0.93
$
0.13
$
1.71
Diluted
$
(0.72)
$
0.75
$
0.12
$
1.38
Weighted average common shares outstanding:
Basic
88,898
89,075
89,127
88,721
Diluted
88,898
109,805
102,045
110,223
6
TABLE TWO
BLOOMIN’ BRANDS, INC.
SEGMENT RESULTS
(UNAUDITED)
(dollars in thousands)
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
U.S. Segment
JUNE 26, 2022
JUNE 27, 2021
JUNE 26, 2022
JUNE 27, 2021
Revenues
Restaurant sales
$
985,927
$
990,293
$
2,009,562
$
1,890,352
Franchise and other revenues
12,700
12,765
25,472
17,624
Total revenues
$
998,627
$
1,003,058
$
2,035,034
$
1,907,976
Restaurant-level operating margin
15.1
%
21.7
%
16.3
%
20.5
%
Income from operations
$
104,620
$
165,297
$
236,846
$
287,032
Operating income margin
10.5
%
16.5
%
11.6
%
15.0
%
International Segment
Revenues
Restaurant sales
$
122,991
$
64,934
$
222,931
$
144,326
Franchise and other revenues (1)
3,544
9,374
7,732
12,537
Total revenues
$
126,535
$
74,308
$
230,663
$
156,863
Restaurant-level operating margin
17.8
%
3.2
%
17.4
%
9.3
%
Income from operations
$
14,126
$
2,470
$
23,010
$
6,007
Operating income margin
11.2
%
3.3
%
10.0
%
3.8
%
Reconciliation of Segment Income from Operations to Consolidated Income from Operations
Segment income from operations
U.S.
$
104,620
$
165,297
$
236,846
$
287,032
International
14,126
2,470
23,010
6,007
Total segment income from operations
118,746
167,767
259,856
293,039
Unallocated corporate operating expense
(31,027)
(43,130)
(64,881)
(77,404)
Total income from operations
$
87,719
$
124,637
$
194,975
$
215,635
____________________
(1)During the thirteen and twenty-six weeks ended June 27, 2021, we recognized $6.3 million of other revenues in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base of Program of Social Integration (“PIS”) and Contribution for the Financing of Social Security (“COFINS”) taxes.
TABLE THREE
BLOOMIN’ BRANDS, INC.
SUPPLEMENTAL BALANCE SHEET INFORMATION
JUNE 26, 2022
DECEMBER 26, 2021
(dollars in thousands)
(UNAUDITED)
Cash and cash equivalents
$
95,346
$
87,585
Net working capital (deficit) (1)
$
(616,924)
$
(631,833)
Total assets
$
3,229,995
$
3,294,271
Total debt, net
$
801,733
$
793,065
Total stockholders’ equity
$
262,741
$
222,850
_________________
(1)We have, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies). We operate successfully with negative working capital because cash collected on restaurant sales is typically received before payment is due on our current liabilities, and our inventory turnover rates require relatively low investment in inventories. Additionally, ongoing cash flows from restaurant operations and gift card sales are typically used to service debt obligations and to make capital expenditures.
7
TABLE FOUR
BLOOMIN’ BRANDS, INC.
RESTAURANT-LEVEL OPERATING MARGIN RECONCILIATIONS
(UNAUDITED)
Consolidated
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
(dollars in thousands)
JUNE 26, 2022
JUNE 27, 2021
JUNE 26, 2022
JUNE 27, 2021
Income from operations
$
87,719
$
124,637
$
194,975
$
215,635
Operating income margin
7.8
%
11.6
%
8.6
%
10.4
%
Less:
Franchise and other revenues
16,244
22,139
33,204
30,161
Plus:
Depreciation and amortization
41,257
40,539
83,032
81,765
General and administrative
59,246
66,462
117,920
123,710
Provision for impaired assets and restaurant closings
193
5,177
2,032
7,377
Restaurant-level operating income
$
172,171
$
214,676
$
364,755
$
398,326
Restaurant-level operating margin
15.5
%
20.3
%
16.3
%
19.6
%
U.S.
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
(dollars in thousands)
JUNE 26, 2022
JUNE 27, 2021
JUNE 26, 2022
JUNE 27, 2021
Income from operations
$
104,620
$
165,297
$
236,846
$
287,032
Operating income margin
10.5
%
16.5
%
11.6
%
15.0
%
Less:
Franchise and other revenues
12,700
12,765
25,472
17,624
Plus:
Depreciation and amortization
33,545
33,579
68,303
67,224
General and administrative
23,648
22,953
47,093
44,045
Provision for impaired assets and restaurant closings
191
5,676
249
7,139
Restaurant-level operating income
$
149,304
$
214,740
$
327,019
$
387,816
Restaurant-level operating margin
15.1
%
21.7
%
16.3
%
20.5
%
International
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
(dollars in thousands)
JUNE 26, 2022
JUNE 27, 2021
JUNE 26, 2022
JUNE 27, 2021
Income from operations
$
14,126
$
2,470
$
23,010
$
6,007
Operating income margin
11.2
%
3.3
%
10.0
%
3.8
%
Less:
Franchise and other revenues
3,544
9,374
7,732
12,537
Plus:
Depreciation and amortization
6,020
5,565
11,556
11,285
General and administrative
5,331
4,116
10,259
8,721
Provision for impaired assets and restaurant closings
—
(708)
1,775
(1)
Restaurant-level operating income
$
21,933
$
2,069
$
38,868
$
13,475
Restaurant-level operating margin
17.8
%
3.2
%
17.4
%
9.3
%
_________________
The following categories of our revenue and operating expenses are not included in restaurant-level operating margin because we do not consider them reflective of operating performance at the restaurant-level within a period:
(1)Franchise and other revenues, which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income.
(2)Depreciation and amortization which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants.
(3)General and administrative expense which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices.
(4)Asset impairment charges and restaurant closing costs which are not reflective of ongoing restaurant performance in a period.
8
TABLE FIVE
BLOOMIN’ BRANDS, INC.
RESTAURANT-LEVEL OPERATING MARGIN RECONCILIATIONS
(UNAUDITED)
THIRTEEN WEEKS ENDED
(UNFAVORABLE) FAVORABLE CHANGE QUARTER TO DATE
Consolidated:
JUNE 26, 2022
JUNE 27, 2021
Restaurant sales
100.0
%
100.0
%
Food and beverage costs
32.9
%
29.6
%
(3.3)
%
Labor and other related
27.8
%
28.0
%
0.2
%
Other restaurant operating
23.8
%
22.1
%
(1.7)
%
Restaurant-level operating margin
15.5
%
20.3
%
(4.8)
%
Segments - Restaurant-level operating margin:
U.S.
15.1
%
21.7
%
(6.6)
%
International
17.8
%
3.2
%
14.6
%
TWENTY-SIX WEEKS ENDED
(UNFAVORABLE) FAVORABLE CHANGE YEAR TO DATE
Consolidated:
JUNE 26, 2022
JUNE 27, 2021
Restaurant sales
100.0
%
100.0
%
Food and beverage costs
32.4
%
29.7
%
(2.7)
%
Labor and other related
27.8
%
28.0
%
0.2
%
Other restaurant operating
23.4
%
22.7
%
(0.7)
%
Restaurant-level operating margin
16.3
%
19.6
%
(3.3)
%
Segments - Restaurant-level operating margin:
U.S.
16.3
%
20.5
%
(4.2)
%
International
17.4
%
9.3
%
8.1
%
9
TABLE SIX
BLOOMIN’ BRANDS, INC.
INCOME FROM OPERATIONS, NET (LOSS) INCOME AND DILUTED (LOSS) EARNINGS PER SHARE NON-GAAP RECONCILIATIONS
(UNAUDITED)
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
(in thousands, except per share data)
JUNE 26, 2022
JUNE 27, 2021
JUNE 26, 2022
JUNE 27, 2021
Income from operations
$
87,719
$
124,637
$
194,975
$
215,635
Operating income margin
7.8
%
11.6
%
8.6
%
10.4
%
Adjustments:
Legal and other matters (1)
—
(6,337)
—
(6,337)
Total income from operations adjustments
—
(6,337)
—
(6,337)
Adjusted income from operations
$
87,719
$
118,300
$
194,975
$
209,298
Adjusted operating income margin
7.8
%
11.0
%
8.6
%
10.2
%
Diluted net (loss) income attributable to Bloomin’ Brands
$
(63,635)
$
82,545
$
11,876
$
152,098
Convertible senior notes if-converted method interest adjustment, net of tax (2)
—
—
—
691
Net (loss) income attributable to Bloomin’ Brands
(63,635)
82,545
11,876
151,407
Adjustments:
Income from operations adjustments
—
(6,337)
—
(6,337)
Loss on extinguishment and modification of debt (3)
107,630
2,073
107,630
2,073
Loss on fair value adjustment of derivatives, net (4)
17,685
—
17,685
—
Total adjustments, before income taxes
125,315
(4,264)
125,315
(4,264)
Adjustment to provision for income taxes (5)
1,322
1,243
1,322
1,243
Net adjustments
126,637
(3,021)
126,637
(3,021)
Adjusted net income
$
63,002
$
79,524
$
138,513
$
148,386
Diluted (loss) earnings per share (6)
$
(0.72)
$
0.75
$
0.12
$
1.38
Adjusted diluted earnings per share (7)
$
0.68
$
0.81
$
1.48
$
1.53
Diluted weighted average common shares outstanding (6)
88,898
109,805
102,045
110,223
Adjusted diluted weighted average common shares outstanding (7)
92,863
98,574
93,792
97,011
_________________
(1)The thirteen and twenty-six weeks ended June 27, 2021 include the recognition of recoverable PIS and COFINS taxes, including accrued interest, within other revenues as a result of favorable court rulings in Brazil during the second quarter of 2021.
(2)Adjustment for interest expense related to the 2025 Notes weighted for the portion of the period prior to our election under the 2025 Notes indenture to settle the principal portion of the 2025 Notes in cash.
(3)The thirteen and twenty-six weeks ended June 26, 2022 include losses in connection with the $125.0 million 2025 Notes Partial Repurchase, the modification of our revolving credit facility and the extinguishment of our term loan A.
(4)Fair value adjustments to the conversion feature of the 2025 Notes repurchased, as well as the settlements of the related convertible senior note hedges and warrants in connection with the 2025 Notes Partial Repurchase.
(5)Income tax effect of the adjustments for the periods presented. For the thirteen and twenty-six weeks ended June 26, 2022, the primary difference between the GAAP and adjusted effective income tax rates relate to certain non-deductible losses and other tax costs associated with the 2025 Notes Partial Repurchase.
(6)Due to the GAAP net loss, the effect of dilutive securities was excluded from the calculation of GAAP diluted loss per share for the thirteen weeks ended June 26, 2022.
(7)Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 7,774 and 11,231 shares for the thirteen weeks ended June 26, 2022 and June 27, 2021, respectively, and 8,253 and 10,442 shares for the twenty-six weeks ended June 26, 2022 and June 27, 2021, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes. For the twenty-six weeks ended June 27, 2021, adjusted diluted weighted average common shares outstanding was also calculated assuming our February 2021 election to settle the principal portion of the 2025 Notes in cash was in effect for the entire period. For adjusted diluted earnings per share, the calculation includes 3,965 dilutive shares for the thirteen weeks ended June 26, 2022, primarily related to outstanding warrants.
10
Following is a summary of the financial statement line item classification of the net (loss) income adjustments:
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
(dollars in thousands)
JUNE 26, 2022
JUNE 27, 2021
JUNE 26, 2022
JUNE 27, 2021
Franchise and other revenues
$
—
$
(6,337)
$
—
$
(6,337)
Loss on extinguishment and modification of debt
107,630
2,073
107,630
2,073
Loss on fair value adjustment of derivatives, net
17,685
—
17,685
—
Provision for income taxes
1,322
1,243
1,322
1,243
Net adjustments
$
126,637
$
(3,021)
$
126,637
$
(3,021)
TABLE SEVEN
BLOOMIN’ BRANDS, INC.
SEGMENT INCOME FROM OPERATIONS NON-GAAP RECONCILIATIONS
(UNAUDITED)
(dollars in thousands)
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
International Segment
JUNE 26, 2022
JUNE 27, 2021
JUNE 26, 2022
JUNE 27, 2021
Income from operations
$
14,126
$
2,470
$
23,010
$
6,007
Operating income margin
11.2
%
3.3
%
10.0
%
3.8
%
Adjustments:
Legal and other matters (1)
—
(6,337)
—
(6,337)
Adjusted income (loss) from operations
$
14,126
$
(3,867)
$
23,010
$
(330)
Adjusted operating income (loss) margin
11.2
%
(5.7)
%
10.0
%
(0.2)
%
_________________
(1)Recognition of recoverable PIS and COFINS taxes, including accrued interest, within other revenues as a result of favorable court rulings in Brazil during the second quarter of 2021.
11
TABLE EIGHT
BLOOMIN’ BRANDS, INC.
COMPARATIVE RESTAURANT AND OFF-PREMISES ONLY KITCHEN INFORMATION
(UNAUDITED)
Number of restaurants:
MARCH 27, 2022
OPENINGS
CLOSURES
JUNE 26, 2022
U.S.
Outback Steakhouse
Company-owned
562
2
(1)
563
Franchised
130
—
—
130
Total
692
2
(1)
693
Carrabba’s Italian Grill
Company-owned
199
—
(1)
198
Franchised
20
—
(1)
19
Total
219
—
(2)
217
Bonefish Grill
Company-owned
175
—
(1)
174
Franchised
7
—
—
7
Total
182
—
(1)
181
Fleming’s Prime Steakhouse & Wine Bar
Company-owned
64
—
—
64
Aussie Grill
Company-owned
7
—
(2)
5
U.S. total
1,164
2
(6)
1,160
International
Company-owned
Outback Steakhouse - Brazil (1)
123
6
—
129
Other (1)(2)
33
—
—
33
Franchised
Outback Steakhouse - South Korea
78
1
(2)
77
Other (2)
52
—
(2)
50
International total
286
7
(4)
289
System-wide total
1,450
9
(10)
1,449
System-wide total - Company-owned
1,163
8
(5)
1,166
System-wide total - Franchised
287
1
(5)
283
____________________
(1)The restaurant counts for Brazil, including Abbraccio restaurants within International Company-owned Other, are reported as of February 28, 2022 and May 31, 2022, respectively, to correspond with the balance sheet dates of this subsidiary.
(2)International Company-owned Other and International Franchised Other included two and three Aussie Grill locations, respectively, as of June 26, 2022.
Number of kitchens (1):
MARCH 27, 2022
OPENINGS
CLOSURES
JUNE 26, 2022
U.S.
Company-owned
2
—
—
2
International
Company-owned
1
—
—
1
Franchised - South Korea
46
3
—
49
System-wide total
49
3
—
52
____________________
(1)Excludes virtual concepts that operate out of existing restaurants and sports venue locations.
12
TABLE NINE
BLOOMIN’ BRANDS, INC.
COMPARABLE RESTAURANT SALES INFORMATION
(UNAUDITED)
THIRTEEN WEEKS ENDED
TWENTY-SIX WEEKS ENDED
JUNE 26, 2022
JUNE 26, 2022
COMPARABLE TO
COMPARABLE TO
2021
2019 (1)
2021
2019 (1)
Year over year percentage change:
Comparable restaurant sales (stores open 18 months or more):
U.S. (2)
Outback Steakhouse
(1.1)
%
10.1
%
3.9
%
6.3
%
Carrabba’s Italian Grill
(1.0)
%
15.6
%
5.0
%
13.1
%
Bonefish Grill
(1.1)
%
3.3
%
9.2
%
2.5
%
Fleming’s Prime Steakhouse & Wine Bar
6.0
%
31.8
%
23.1
%
27.6
%
Combined U.S.
(0.4)
%
11.7
%
6.4
%
8.6
%
International
Outback Steakhouse - Brazil (3)
95.7
%
27.6
%
61.1
%
20.8
%
Traffic:
U.S.
Outback Steakhouse
(8.7)
%
(4.5)
%
(5.0)
%
(7.4)
%
Carrabba’s Italian Grill
(7.5)
%
4.6
%
(2.5)
%
3.2
%
Bonefish Grill
(8.6)
%
(4.9)
%
(1.0)
%
(5.6)
%
Fleming’s Prime Steakhouse & Wine Bar
(2.9)
%
8.8
%
11.1
%
7.3
%
Combined U.S.
(8.3)
%
(2.5)
%
(3.5)
%
(4.8)
%
International
Outback Steakhouse - Brazil
57.8
%
28.8
%
42.0
%
23.9
%
Average check per person (4):
U.S.
Outback Steakhouse
7.6
%
14.6
%
8.9
%
13.7
%
Carrabba’s Italian Grill
6.5
%
11.0
%
7.5
%
9.9
%
Bonefish Grill
7.5
%
8.2
%
10.2
%
8.1
%
Fleming’s Prime Steakhouse & Wine Bar
8.9
%
23.0
%
12.0
%
20.3
%
Combined U.S.
7.9
%
14.2
%
9.9
%
13.4
%
International
Outback Steakhouse - Brazil
37.3
%
—
%
19.2
%
(2.8)
%
____________________
(1)Comparable restaurant sales, traffic and average check per person increases (decreases) relative to 2019 for improved comparability to pre-COVID-19 restaurant sales.
(2)Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.
(3)Excludes the effect of fluctuations in foreign currency rates. Includes trading day impact from calendar period reporting.
(4)Average check per person includes the impact of menu pricing changes, product mix and discounts.
