DALLAS, Oct. 24, 2012 /PRNewswire/ -- Brinker International, Inc. (NYSE: EAT) today announced results for the fiscal first quarter ended Sept. 26, 2012.

Highlights include the following:

• Earnings per diluted share, excluding special items, increased 23.3 percent to $0.37 compared to $0.30 for the first quarter of fiscal 2012 (see non-GAAP reconciliation below)
• On a GAAP basis, earnings per diluted share increased 28.6 percent to $0.36 compared to $0.28 for the first quarter of fiscal 2012
• Chili's comparable restaurant sales increased 2.8 percent, representing the sixth consecutive quarterly increase, and guest traffic increased 0.4 percent, representing the seventh consecutive quarterly increase
• Maggiano's comparable restaurant sales increased 0.9 percent, representing the eleventh consecutive quarterly increase
• Company sales increased 2.5 percent to $663.7 million and restaurant operating margin^[1] improved approximately 150 basis points to 14.6 percent from 13.1 percent
• The company repurchased approximately 2.5 million shares of its common stock for $86.3 million in the first quarter
• The company paid a dividend of 16 cents per share in the first quarter, an increase of 14.3 percent over the prior year quarter
• For the first three months of fiscal 2013, cash flows provided by operating activities were $32.9 million and capital expenditures totaled $37.0 million

"Brinker delivered 23 percent EPS growth during the quarter by increasing operational efficiencies and growing top line sales that outpaced the industry," said Doug Brooks, President and Chief Executive Officer. "Our long term strategies continue to strengthen our business model, help us drive more predictable and sustainable growth, and give us confidence we'll deliver on our long term promise to double EPS to $2.75 to $2.80."

^[1] Effective for the fiscal first quarter ended Sept. 26, 2012, revenues are reported in two separate captions - Company sales and Franchise and other revenues. Restaurant operating margin is now defined as Company sales less Cost of sales, Restaurant labor and Restaurant expenses.

Quarterly Operating Performance
CHILI'S first quarter company sales of $581.3 million represent a 2.7 percent increase from $566.1 million in the prior year period driven by increased menu prices, favorable mix shift and improved guest traffic. Restaurant expense benefited from lower repair and maintenance expense, credit card fees and utilities expense, as well as sales leverage on fixed costs related to higher revenue. Restaurant labor was positively impacted by sales leverage related to higher revenue and improved labor productivity from the installation of new kitchen equipment, partially offset by increased overtime incurred to support these installations. Cost of sales was flat for the quarter as increased menu pricing and favorable commodity pricing on produce, dairy and poultry offset unfavorable commodity pricing and product mix primarily related to meat.

MAGGIANO'S first quarter company sales of $82.4 million increased 0.9 percent, primarily driven by menu pricing and mix. Restaurant operating margin improved compared to prior year primarily due to improved cost of sales. Cost of sales was favorably impacted by decreased commodity usage from efforts to reduce waste, increased menu pricing and menu item changes. Restaurant operating margin was also positively impacted by lower credit card fees, utilities expense and sales leverage on fixed costs related to higher revenue.

FRANCHISE AND OTHER revenues totaled $19.8 million for the quarter, a decrease of 3.9 percent over the prior year driven primarily by a decrease in gift card breakage income due to increased gift card usage, partially offset by an increase in royalty revenues. Domestic franchise comparable restaurant sales increased 3.7 percent while international comparable restaurant sales increased 1.1 percent. Brinker franchisees generated approximately $399 million in sales¹ for the first quarter of fiscal 2013. 

"During the first quarter, Brinker once again achieved positive comp sales and margin improvement," said Guy Constant, Executive Vice President and Chief Financial Officer. "Our balanced approach of delivering every day value to our guests and increasing profitability in our restaurants continues to drive ongoing shareholder value and create a strong financial position for the company."

Other
Depreciation and amortization expense increased $1.4 million for the quarter primarily due to investments in existing restaurants and asset replacements, partially offset by an increase in fully depreciated assets.

General and administrative expense increased $4.5 million for the quarter primarily due to an increase in stock-based and other compensation costs.

Excluding the impact of special items, the effective income tax rate increased to 31.2 percent in the current quarter from 30.2 percent in the same quarter last year driven by increased earnings. On a GAAP basis, the effective income tax rate increased to 31.1 percent in the current quarter as compared to 29.8 percent in the same quarter last year primarily due to increased earnings.

Non-GAAP Reconciliation
The company believes excluding special items from its financial results provides investors with a clearer perspective of the company's ongoing operating performance and a more relevant comparison to prior period results. 

¹ Royalty revenues are recognized based on the sales generated and reported to the company by franchisees.

Guidance Policy

Brinker provides annual guidance as it relates to comparable restaurant sales, earnings per diluted share, and other key line items in the income statement and will only provide updates if there is a material change versus the original guidance. Consistent with prior practice, management will not discuss intra-period sales or other key operating results not yet reported as the limited data may not accurately reflect the final results of the period or quarter referenced.

Webcast Information

Investors and interested parties are invited to listen to today's conference call, as management will provide further details of the quarter. The call will broadcast live on the Brinker website (www.brinker.com) at 9 a.m. CDT today (Oct. 24). 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 website until the end of the day Nov. 21, 2012. 

Additional financial information, including statements of income which detail operations excluding  special items, franchise and other revenues, and comparable restaurant sales trends by brand, is also available on the Brinker website under the Financial Information section of the Investor tab.

Forward Calendar

• SEC Form 10-Q for first quarter fiscal 2013 filing on or before Nov. 5, 2012; and
• Second quarter earnings release, before market opens, Jan. 22, 2013.

About Brinker

Brinker International, Inc. is one of the world's leading casual dining restaurant companies. Founded in 1975 and based in Dallas, Texas, Brinker currently owns, operates, or franchises 1,585 restaurants under the names Chili's^® Grill & Bar (1,540 restaurants) and Maggiano's Little Italy^® (45 restaurants). Brinker also holds a minority investment in Romano's Macaroni Grill^®.

Forward-Looking Statements

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, financial and credit market conditions, credit availability, reduced disposable income, the impact of competition, the impact of mergers, acquisitions, divestitures and other strategic transactions, franchisee success,  the seasonality of the company's business, adverse weather conditions, future commodity prices, product availability, fuel and utility costs and availability, terrorists acts, consumer perception of food safety, changes in consumer taste, health epidemics or pandemics, changes in demographic trends, availability of employees, unfavorable publicity, the company's ability to meet its business strategy plan, acts of God, governmental regulations and inflation.

SOURCE Brinker International, Inc.

Maureen Locus, Media Relations, 1-800-775-7290, or Tony Laday, Investor Relations, +1-972-770-8890