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FORM 8K

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): October 26, 2004

BRINKER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State of Incorporation)

1-10275
(Commission File
Number)

74-1914582
(IRS Employment
Identification No.)

6820 LBJ Freeway
Dallas, Texas 75240
(Address of principal executive offices)

 Registrant's telephone number, including area code    972-980-9917

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

____           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

____           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

____          Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR    240.14d-2(b)).

____          Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act  (17 CFR 240.13e-4(c)).

Item 2.02.  Results of Operations and Financial Condition.

The information contained in this Current Report on Form 8-K, including the Exhibit attached hereto, is being furnished and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.  Furthermore, the information contained in this Current Report on Form 8-K shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.

On October 26, 2004, Brinker International, Inc. issued a Press Release announcing its first quarter fiscal 2005 results.  A copy of the Press Release is attached hereto as Exhibit 99.

Item 9.01.  Financial Statements and Exhibits.

(c)     Exhibits.

99   Press Release, dated October 26, 2004.
 

SIGNATURE

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.

BRINKER INTERNATIONAL, INC.

Date: October 29, 2004

By:     /s/ Douglas H. Brooks                             

     Douglas H. Brooks

     President and Chief Executive Officer
Exhibit 99

EXHIBIT 99

FOR IMMEDIATE RELEASE

Contacts: Louis Adams, Media Relations                                     Lynn Schweinfurth, Investor Relations
                (972) 770-4967                                                                    (972) 770-7228

Brinker International Announces First Quarter Diluted
Earnings Per Share Of $0.40 Excluding Charges And Gains;
Reported Earnings Per Share Of $0.16

DALLAS (Oct. 26, 2004) - Brinker International, Inc. (NYSE: EAT), reported net income of $14.7 million, or $0.16 diluted earnings per share, including certain charges and gains, for the company's first quarter ended September 29, 2004.  Excluding the charges and gains, net income was $36.4 million or $0.40 diluted earnings per share compared to $0.45 diluted earnings per share reported in the same quarter of fiscal 2004.

First quarter earnings include the following after-tax charges and gains: (1) a $10.1 million impairment charge resulting from the decision to dispose of the Big Bowl brand, (2) a $14.1 million charge to fully impair the investment and notes receivable associated with Rockfish Seafood Grill as a result of recent declines in operating performance and lower forecasted earnings and (3) a $2.6 million gain resulting from the sale of nine Chili's restaurants to a new franchise partner.

Brinker International, Inc. announced today that it has entered into a letter of intent to sell its Big Bowl Asian Kitchen concept to Lettuce Entertain You Enterprises for an undisclosed price.

Net income and diluted earnings per share for the first quarter of fiscal 2005 would have been as follows (net of taxes):

First Quarter FY '05
(in millions, except per share amounts)

Net Income

 

Diluted EPS

As reported

$   14.7

 

$  0.16

  Big Bowl impairment

     10.1

 

    0.11

  Rockfish impairment

     14.1

 

    0.16

  Gain on sale of nine Chili's restaurants

      (2.6)

 

    (0.03)

  Other*

      0.1

 

   0.00

Adjusted

$   36.4

 

$  0.40

* Other includes a $932,000 charge associated with the closure of a Corner Bakery commissary and a $814,000 gain associated with the 30 stores closed in fiscal 2004, consisting of increases in the estimated sales value of previously impaired owned units and decreases in the estimated lease obligation.

Other results for the first quarter of fiscal 2005 included:

The company continues to be active in its share repurchase program, acquiring approximately 1.2 million shares during the first quarter of fiscal 2005.  The company also acquired approximately 3.5 million shares under forward purchase contracts settled on October 21, 2004.  At the end of the quarter, approximately $132.4 million was available under the company's share repurchase authorization, net of the forward purchase contracts.

September 2004 Comparable Store Sales

For the four-week period ending September 29, 2004, comparable store sales decreased 0.6 percent. September comparable store sales for the company and the four reported brands were as follows:

Sept. FY '05

Sept. FY '04

Brinker

-0.6%

1.5%

Chili's

-1.1%

2.0%

Macaroni Grill

-5.2%

-1.2%

Maggiano's

0.8%

1.3%

On The Border

7.5%

4.1%

               September price increases and product mix-shifts for Brinker and the four reported brands were as follows:

  Price Increase Product Mix-Shift
Brinker 2.2% 0.0%
Chili's 2.5% 0.1%
Macaroni Grill 1.6% 0.0%
Maggiano's 2.7% -0.9%
On The Border 1.5% 0.1%

The company noted its September 2004 Brinker comparable store sales reflect a negative impact of 1.7 percent due to the hurricanes in the Southeastern United States.  By reported brand, the hurricanes negatively impacted comparable store sales by 2.3 percent at Chili's, 2.0 percent at Macaroni Grill, 0.6 percent at Maggiano's and

0.7 percent at On The Border.  Sales were also impacted by significantly reduced advertising at Chili's and Macaroni Grill during the month.

Second Quarter and Full Year 2005 Forecast

The company's estimate for its second quarter fiscal 2005 earnings per diluted share reflects the impact of EITF 04-8, "The Effect of Contingently Convertible Debt on Diluted Earnings Per Share".  This results in adding back after-tax interest expense and including shares in the weighted average share base for contingently convertible debt instruments in the diluted earnings per share calculation.  Weighted average shares for the second quarter will increase approximately 5.4 million shares and earnings per diluted share will decrease approximately $0.02 as a result of EITF 04-8, net of shares under the forward purchase contract settled on October 21, 2004.

The company expects second quarter revenue growth of 5 to 7 percent and comparable store sales growth of 0 to 1 percent.  The company's estimate for second quarter earnings per diluted share is $0.45 to $0.47 including EITF 04-8, excluding lease obligation charges related to Big Bowl and excluding any potential refranchising gains.  This assumes weighted average shares of approximately 96 to 97 million.

Full year fiscal 2005 weighted average shares will increase approximately 4.6 million and earnings per diluted share will decrease by $0.07 to $0.08 as a result of EITF 04-8, net of shares under the forward purchase contract settled on October 21, 2004.  This assumes weighted average shares of approximately 96 to 97 million shares.  The company's estimate for full year fiscal 2005 earnings per diluted share is $2.06 to $2.19, excluding charges and gains. 

The table below includes a reconciliation of both second quarter and full year diluted earnings per share forecasts.

Forecast

Second Qtr. FY '05

 

Full Year FY '05

Adjusted diluted EPS

$0.47 - $0.49

 

$2.14 - $2.26

   EITF 04-8, net of forward settlement

(0.02)

 

(0.08) - (0.07)

  Diluted EPS before EITF 04-8 adjustment

$0.45 - $0.47

 

$2.06 - $2.19

   Impairment and lease obligation charges

(0.02)

 

(0.27)

   Refranchising gains

0.03

 

0.05

Diluted EPS

$0.46 - $0.48

 

$1.84 - $1.97

October sales results will be published on November 10, 2004 after the market closes.  Investors and interested parties are invited to listen to today's conference call, as management will provide further details of the quarter and an outlook for future periods.  The call will be broadcast live on the Brinker Web site (http://www.brinker.com) at 9 a.m. CDT today (Oct. 26).  For those who are unable to listen to the live broadcast, a replay of the call will be available shortly thereafter and will remain on the Brinker Web site until the end of the day October 29, 2004.

At the end of the first quarter of fiscal 2005, Brinker International either owned, operated, franchised, or was involved in the ownership of 1,504 restaurants under the names Chili's Grill & Bar (999 units), Romano's Macaroni Grill (220 units), Maggiano's Little Italy (30 units), On The Border Mexican Grill & Cantina (130 units), Corner Bakery Cafe (86 units), Big Bowl Asian Kitchen (14 units), and Rockfish Seafood Grill (25 units).

The statements contained in this release that are not historical facts are forward-looking statements. These forward-looking statements involve risks and uncertainties and, consequently, could be affected by general business and economic conditions, the impact of competition, the seasonality of the company's business, adverse weather conditions, future commodity prices, fuel and utility costs and availability, terrorists acts, consumer

perception of food safety, changes in consumer taste, changes in demographic trends, availability of employees, unfavorable publicity, the company's ability to meet its growth plan, acts of God, governmental regulations, and inflation.

 

BRINKER INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)

                                                                                                                     Thirteen Week Periods Ended

September 29,

September 24,

 

2004

2003

 

 

 

 

Revenues

$   910,478

$   870,898

 

 

 

 

 

Operating Costs and Expenses:

 

 

 

  Cost of sales

253,089

239,902

 

  Restaurant expenses

509,401

486,358

 

  Depreciation and amortization

45,939

42,409

 

  General and administrative

     37,152

     33,296

 

  Restructure charges and other impairments

     48,256

          -

 

   Total operating costs and expenses

    893,837

    801,965

 

 

 

 

 

Operating income

16,641

68,933

 

 

 

 

 

Interest expense

7,119

3,318

 

Other, net

        442

      (257)

 

 

 

 

Income before tax benefit (expense)

9,080

65,872

 

Income tax benefit (expense)

      5,639

   (21,277)

 

 

 

 

 

    Net income

$    14,719

$    44,595

 

 

 

 

 

Basic net income per share

$      0.16

$      0.46

 

 

 

 

 

Diluted net income per share

$      0.16

$      0.45

 

 

 

 

 

Basic weighted average

 

 

 

  shares outstanding

     89,761

     97,404

 

 

 

 

 

Diluted weighted average

 

 

 

  shares outstanding

     90,930

     99,367

 

 

 

 

 

 

BRINKER INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

September 29,

June 30,

 

ASSETS

2004

2004

 

  Total current assets

$    231,842

$    400,920

 

  Net property and equipment

   1,585,204

   1,566,846

 

  Total other assets

      209,503

      244,025

 

  Total assets

$  2,026,549

$  2,211,791

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

  Total current liabilities

$    327,139

$    379,162

 

  Long-term debt, less current installments

      640,319

      639,291

 

  Other liabilities

      175,553

      167,265

 

  Total shareholders' equity

      883,538

   1,026,073

 

  Total liabilities and shareholders' equity

$  2,026,549

$  2,211,791

 

 

 

   FOR ADDITIONAL INFORMATION, CONTACT:

LYNN SCHWEINFURTH
INVESTOR RELATIONS
(972) 770-7228
6820 LBJ FREEWAY
DALLAS, TEXAS 75240

 

BRINKER INTERNATIONAL, INC.

UNITS SUMMARY
Total Units First Quarter Fiscal 2005 Total Units Projected Openings
  June 30, 2004 Net Activity Sep. 29, 2004 Fiscal 2005

 

Company-Owned Units:

 

  

 

 

  Chili's

752

5

757

77-80

  Macaroni Grill

206

5

211

15-18

  Maggiano's

28

    2

30

5

  On The Border

111

1

112

8-10

  Corner Bakery

83

-

83

8-10

  Big Bowl

   14

    -

   14

      0

1,194

   13

1,207

113-123

 

 

 

 

JV/Franchise Units:

 

 

 

 

  Chili's

227

15

242

25-30

  Macaroni Grill

9

-

9

5-6

  On The Border

18

-

18

0-1

  Corner Bakery

3

-

3

0-1

  Rockfish

   25

    -

   25

      0

  282

   15

  297

  30-38

 

 

 

 

Total Units:

 

 

 

 

  Chili's

979

20

999

102-110

  Macaroni Grill

215

5

220

20-24

  Maggiano's

28

2

30

5

  On The Border

129

1

130

8-11

  Corner Bakery

86

-

86

8-11

  Big Bowl

14

-

14

0

  Rockfish

   25

    -

   25

      0

1,476

   28

1,504

143-161