UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 29, 1999
Commission File Number 1-10275
BRINKER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1914582
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6820 LBJ FREEWAY, DALLAS, TEXAS 75240
(Address of principal executive offices)
(Zip Code)
(972) 980-9917
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
Number of shares of common stock of registrant outstanding at
September 29, 1999: _65,420,737
BRINKER INTERNATIONAL, INC.
INDEX
Part I - Financial Information
Condensed Consolidated Balance Sheets -
September 29, 1999 (Unaudited) and June 30, 1999 3 - 4
Condensed Consolidated Statements of Income
(Unaudited) - Thirteen-week periods ended
September 29, 1999 and September 23, 1998 5
Condensed Consolidated Statements of Cash Flows
(Unaudited) - Thirteen-week periods ended
September 29, 1999 and September 23, 1998 6
Notes to Condensed Consolidated
Financial Statements (Unaudited) 7 - 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9 - 15
Part II - Other Information 16 - 18
PART I. FINANCIAL INFORMATION
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
(In thousands)
September 29, June 30,
1999 1999
ASSETS (Unaudited)
Current Assets:
Cash and Cash Equivalents $ 17,718 $ 12,597
Accounts Receivable 18,453 21,390
Inventories 15,075 15,050
Prepaid Expenses 45,035 46,431
Deferred Income Taxes 3,377 5,585
Other 3,779 2,097
Total Current Assets 103,437 103,150
Property and Equipment, at Cost:
Land 173,999 169,368
Buildings and Leasehold Improvements 666,835 650,000
Furniture and Equipment 359,216 351,729
Construction-in-Progress 62,699 46,186
1,262,749 1,217,283
Less Accumulated Depreciation
and Amortization 423,370 403,907
Net Property and Equipment 839,379 813,376
Other Assets:
Goodwill 73,625 74,190
Other 94,815 94,928
Total Other Assets 168,440 169,118
Total Assets $ 1,111,256 $ 1,085,644
(continued)
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
September 29, June 30,
1999 1999
LIABILITIES AND SHAREHOLDERS' EQUITY (Unaudited)
Current Liabilities:
Current Installments of Long-term Debt $ 14,635 $ 14,635
Accounts Payable 87,423 74,100
Accrued Liabilities 91,620 101,384
Total Current Liabilities 193,678 190,119
Long-term Debt, Less Current Installments 191,574 183,158
Deferred Income Taxes 8,875 9,140
Other Liabilities 42,701 41,788
Commitments and Contingencies
Shareholders' Equity:
Preferred Stock - 1,000,000 Authorized
Shares; $1.00 Par Value; No Shares Issued - -
Common Stock - 250,000,000 Authorized
Shares; $.10 Par Value; 78,150,054
Shares Issued and 65,420,737 Shares
Outstanding at September 29, 1999, and
78,150,054 Shares Issued and 65,899,445
Shares Outstanding at June 30, 1999 7,815 7,815
Additional Paid-In Capital 285,628 285,448
Retained Earnings 570,024 542,918
863,467 836,181
Less Treasury Stock, at Cost (12,729,317
shares at September 29, 1999 and
12,250,609 shares at June 30, 1999) 189,039 174,742
Total Shareholders' Equity 674,428 661,439
Total Liabilities and Shareholders'
Equity $ 1,111,256 $ 1,085,644
See accompanying notes to condensed consolidated financial
statements.
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Thirteen-Week Periods Ended
September 29, September 23,
1999 1998
Revenues $ 511,033 $ 432,101
Operating Costs and Expenses:
Cost of Sales 136,190 117,760
Restaurant Expenses 284,725 240,190
Depreciation and Amortization 22,117 18,993
General and Administrative 23,507 21,351
Total Operating Costs and Expenses 466,539 398,294
Operating Income 44,494 33,807
Interest Expense 2,398 2,062
Other, Net 586 1,087
Income Before Provision for
Income Taxes and Cumulative Effect
of Accounting Change 41,510 30,658
Provision for Income Taxes 14,404 10,638
Income Before Cumulative
Effect of Accounting Change 27,106 20,020
Cumulative Effect of Accounting Change - 6,407
Net Income $ 27,106 $ 13,613
Basic Earnings Per Share:
Income Before Cumulative Effect
of Accounting Change $ .41 $ .31
Cumulative Effect of
Accounting Change - .10
Basic Net Income Per Share $ .41 $ .21
Diluted Earnings Per Share:
Income Before Cumulative Effect
of Accounting Change $ .40 $ .30
Cumulative Effect of
Accounting Change - .10
Diluted Net Income Per Share $ .40 $ .20
Basic Weighted Average
Shares Outstanding 65,786 65,774
Diluted Weighted Average
Shares Outstanding 67,772 67,596
See accompanying notes to condensed consolidated financial
statements.
BRINKER INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Thirteen-Week Periods Ended
September 29, September 23,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 27,106 $ 13,613
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Depreciation and Amortization of
Property and Equipment 21,227 18,115
Amortization of Goodwill and Other Assets 890 878
Cumulative Effect of Accounting Change - 6,407
Deferred Income Taxes 1,943 1,436
Changes in Assets and Liabilities:
Receivables 1,255 5,465
Inventories (25) (1,284)
Prepaid Expenses 3,888 (184)
Other Assets (212) 778
Accounts Payable 13,323 11,757
Accrued Liabilities (9,764) (3,168)
Other Liabilities 913 1,531
Net Cash Provided by Operating Activities 60,544 55,344
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for Property and Equipment (49,722) (47,741)
Proceeds from Sales of Marketable Securities - 51
Net Advances to Affiliates - (7,429)
Net Cash Used in Investing Activities (49,722) (55,119)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings on Credit Facilities 8,416 10,425
Proceeds from Issuances of Treasury Stock 3,392 757
Purchases of Treasury Stock (17,509) (9,514)
Net Cash (Used in) Provided by
Financing Activities (5,701) 1,668
Net Increase in Cash and Cash Equivalents 5,121 1,893
Cash and Cash Equivalents at Beginning
of Period 12,597 9,382
Cash and Cash Equivalents at End
of Period $ 17,718 $ 11,275
CASH PAID (RECEIVED) DURING THE PERIOD:
Interest, Net of Amounts Capitalized $ 633 $ 84
Income Taxes, Net of Refunds $ (484) $ 2,263
See accompanying notes to condensed consolidated financial
statements.
BRINKER INTERNATIONAL, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The condensed consolidated financial statements of Brinker
International, Inc. and its wholly-owned subsidiaries
(collectively, the "Company") as of September 29, 1999 and for the
thirteen-week periods ended September 29, 1999 and September 23,
1998 have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC").
The Company owns and operates or franchises various restaurant
concepts under the names of Chili's Grill & Bar ("Chili's"),
Romano's Macaroni Grill ("Macaroni Grill"), On The Border Mexican
Grill & Cantina ("On The Border"), Cozymel's Coastal Mexican Grill
("Cozymel's"), Maggiano's Little Italy ("Maggiano's"), and Corner
Bakery Cafe ("Corner Bakery"). In addition, the Company is
involved in the operation and development of the Eatzi's Market
and Bakery ("Eatzi's"), Big Bowl ("Big Bowl"), and Wildfire
("Wildfire") concepts.
The information furnished herein reflects all adjustments
(consisting only of normal recurring accruals and adjustments)
which are, in the opinion of management, necessary to fairly state
the operating results for the respective periods. However, these
operating results are not necessarily indicative of the results
expected for the full fiscal year. Certain information and
footnote disclosures normally included in annual financial
statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to SEC rules and
regulations. The notes to the condensed consolidated financial
statements should be read in conjunction with the notes to the
consolidated financial statements contained in the June 30, 1999
Form 10-K. Company management believes that the disclosures are
sufficient for interim financial reporting purposes.
Certain prior year amounts have been reclassified in the
accompanying condensed consolidated financial statements to
conform with current year presentation.
2. Commitments
In September 1999, the Company entered into a $25 million
equipment leasing facility. During the first quarter of fiscal
2000, the Company utilized $8.5 million of the facility. The
facility, which is accounted for as an operating lease, expires in
fiscal 2006. The Company guarantees a residual value related to
the equipment of approximately 87% at inception of the facility.
At the end of the lease term, the Company has the option to
purchase all of the leased equipment for an amount equal to the
unamortized lease balance, which amount will be no more than 75%
of the total amount funded under the facility. The Company
believes that the future cash flows related to the equipment
support the unamortized lease balance.
In September 1999, the Company also entered into a $50 million
real estate leasing facility of which no amounts were utilized
during the first quarter of fiscal 2000. The facility, which will
be accounted for as an operating lease, expires in fiscal 2007.
The Company guarantees the residual value related to the
properties, which will be approximately 87% of the total amount
funded under the facility. At the end of the lease term, the
Company has the option to purchase all of the leased real estate
for an amount equal to the unamortized lease balance.
3. Preopening Costs
The Company elected early adoption of Statement of Position 98-5
("SOP 98-5"), "Reporting on the Costs of Start-Up Activities,"
retroactive to the first quarter of fiscal 1999. This new
accounting standard requires the Company to expense all start-up
and preopening costs as they are incurred. The Company previously
deferred such costs and amortized them over the twelve-month
period following the opening of each restaurant. The Condensed
Consolidated Statement of Income for the thirteen-week period
ended September 23, 1998 has been restated to reflect the
cumulative effect of this accounting change, net of related income
tax benefit.
4. Treasury Stock
The Company's Board of Directors previously approved a plan to
repurchase up to $85.0 million of the Company's common stock.
During the first quarter of fiscal 2000, the Company's Board of
Directors authorized a $25.0 million increase in the plan.
Pursuant to the plan and in accordance with applicable securities
regulations, the Company repurchased approximately 698,000 shares
of its common stock for approximately $17.5 million during the
first quarter of fiscal 2000, resulting in a cumulative repurchase
total of 3,678,000 shares of its common stock for approximately
$82.7 million. The repurchased common stock was used by the
Company to increase shareholder value, offset the dilutive effect
of stock option exercises, and for other corporate purposes. The
repurchased common stock is reflected as a reduction of
shareholders' equity.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table sets forth selected operating data as a
percentage of total revenues for the periods indicated. All
information is derived from the accompanying condensed consolidated
statements of income.
Thirteen-Week Periods Ended
September 29, September 23,
1999 1998
Revenues 100.0% 100.0%
Operating Costs and Expenses:
Cost of Sales 26.6% 27.3%
Restaurant Expenses 55.7% 55.6%
Depreciation and Amortization 4.3% 4.4%
General and Administrative 4.6% 4.9%
Total Operating Costs and Expenses 91.3% 92.2%
Operating Income 8.7% 7.8%
Interest Expense 0.5% 0.5%
Other, Net 0.1% 0.3%
Income Before Provision for Income Taxes
and Cumulative Effect of Accounting
Change 8.1% 7.1%
Provision for Income Taxes 2.8% 2.5%
Income Before Cumulative Effect
of Accounting Change 5.3% 4.6%
Cumulative Effect of Accounting Change - 1.5%
Net Income 5.3% 3.2%
The following table details the number of restaurant openings
during the first quarter and total restaurants open at the end of
the first quarter.
First Quarter Openings Total Open at End of First Quarter
Fiscal Fiscal Fiscal Fiscal
2000 1999 2000 1999
Chili's:
Company-owned 12 10 448 424
Franchised 7 4 193 163
Total 19 14 641 587
Macaroni Grill:
Company-owned 6 5 134 116
Franchised -- -- 3 2
Total 6 5 137 118
On The Border:
Company-owned 5 5 73 55
Franchised 2 3 25 18
Total 7 8 98 73
Cozymel's -- -- 13 12
Maggiano's -- 1 10 8
Corner Bakery 2 4 51 34
Eatzi's -- 1 5 4
Wildfire -- 1 3 2
Big Bowl -- -- 4 2
Grand total 34 34 962 840
REVENUES
Revenues for the first quarter of fiscal 2000 increased to $511.0
million, 18.3% over the $432.1 million generated for the same
quarter of fiscal 1999. The increases are primarily attributable to
a net increase of 80 company-owned restaurants since September 23,
1998 and an increase in comparable store sales for the first
quarter of fiscal 2000 compared to the same quarter of fiscal 1999.
The Company increased its capacity (as measured in sales weeks) for
the first quarter of fiscal 2000 by 13.1% compared to the same
quarter of fiscal 1999. Comparable store sales increased for the
quarter compared to the same quarter of fiscal 1999 by 5.3%,
including increases of 6.7% at Chili's, 3.1% at Macaroni Grill, and
1.7% at On The Border. Menu prices in the aggregate increased 1.4%
in the first quarter of fiscal 2000 as compared to the same quarter
of fiscal 1999.
COSTS AND EXPENSES (as a percent of Revenues)
Cost of sales decreased for the first quarter of fiscal 2000 as
compared to the same quarter of fiscal 1999. Improved purchasing
leverage, menu price increases, and favorable commodity price
variances for poultry and dairy attributed to the decrease in cost
of sales for the quarter. These favorable variances were partially
offset by unfavorable product mix changes.
Restaurant expenses increased in the first quarter of fiscal 2000
compared to the same quarter of fiscal 1999 primarily due to higher
labor costs. Restaurant labor wage rates were higher than in the
prior year, but were partially offset by increased sales leverage,
improvements in labor productivity, and menu price increases.
Depreciation and amortization decreased for the first quarter of
fiscal 2000 compared to the same quarter of fiscal 1999.
Depreciation and amortization decreases resulted from the continued
utilization of the equipment leasing facilities, increased sales
leverage and a declining depreciable asset base for older units.
Partially offsetting these decreases were increases in depreciation
related to new unit construction and ongoing remodel costs.
General and administrative expenses decreased for the first quarter
of fiscal 2000 compared to the same quarter of fiscal 1999 as a
result of the Company's continued focus on controlling corporate
expenditures relative to increasing revenues and number of
restaurants and increased sales leverage.
Interest expense remained flat in the first quarter of fiscal 2000
compared with the same quarter of fiscal 1999 as a result of
increased sales leverage offset by increased interest expense due
to increased borrowings on the Company's credit facilities
primarily used to fund the Company's continuing stock repurchase
plan.
Other, net decreased for the first quarter of fiscal 2000 compared
to the same quarter of fiscal 1999 primarily due to a decrease in
the Company's share of net losses in unconsolidated equity method
investees.
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
The cumulative effect of accounting change is the result of the
Company's early adoption of SOP 98-5 retroactive to the first
quarter of fiscal 1999 as discussed previously in the "Notes to
Condensed Consolidated Financial Statements" section. The
cumulative effect of this accounting change, net of income tax
benefit, was $6.4 million or $0.10 per diluted share. This new
accounting standard accelerates the Company's recognition of
preopening costs, but will benefit the post-opening results of new
restaurants.
NET INCOME AND NET INCOME PER SHARE
Net income and diluted net income per share for the first quarter
of fiscal 2000 increased 99.1% and 100.0%, respectively, compared
to the same quarter of fiscal 1999. Excluding the effects of the
adoption of SOP 98-5 in the first quarter of fiscal 1999, net
income for the first quarter of fiscal 2000 increased 35.4% from
$20.0 million to $27.1 million and diluted net income per share
increased 33.3% from $.30 to $.40. The increase in both net income
and diluted net income per share before consideration of the
adoption of SOP 98-5 was mainly due to an increase in revenues
resulting from increases in capacity (as measured in sales weeks),
comparable store sales, and menu prices and decreases in commodity
prices and general and administrative expenses.
IMPACT OF INFLATION
The Company has not experienced a significant overall impact from
inflation. As operating expenses increase, the Company, to the
extent permitted by competition, recovers increased costs by
either increasing menu prices or reviewing, then implementing,
alternative products or processes.
LIQUIDITY AND CAPITAL RESOURCES
The working capital deficit increased from $87.0 million at June
30, 1999 to $90.2 million at September 29, 1999. Net cash provided
by operating activities increased to $60.5 million for the first
quarter of fiscal 2000 from $55.3 million during the same period in
fiscal 1999 due to increased profitability, partially offset by the
timing of operational receipts and payments.
Long-term debt outstanding at September 29, 1999 consisted of $71.4
million of unsecured senior notes, $118.5 million of borrowings on
credit facilities, and obligations under capital leases. The
Company has credit facilities totaling $370.0 million. At
September 29, 1999, the Company had $249.8 million in available
funds from credit facilities.
During the first quarter of fiscal 2000, the Company entered into a
$25.0 million equipment leasing facility. As of September 29,
1999, $8.5 million of the facility had been utilized. The
remaining $16.5 million will be used to lease equipment for new
restaurant openings for the remainder of fiscal 2000. In addition,
the Company entered into a $50.0 million real estate leasing
facility. The entire facility will be used to lease real estate
during the remainder of fiscal year 2000 and all of fiscal year
2001.
Capital expenditures consist of purchases of land for future
restaurant sites, new restaurants under construction, purchases of
new and replacement restaurant furniture and equipment, and ongoing
remodeling programs. Capital expenditures, net of amounts funded
under the respective equipment and real estate leasing facilities,
were $49.7 million for the first quarter of fiscal 2000 as compared
to $47.7 million for the same quarter of fiscal 1999. The amount of
capital expenditures in the first quarter of fiscal 2000 was
essentially flat compared to the same quarter in fiscal 1999 due to
an almost equal number of restaurants being constructed or opened
during the respective periods. The Company estimates that its
capital expenditures during the second quarter will approximate $50
million. These capital expenditures will be funded from internal
operations, cash equivalents, and drawdowns on the Company's
available lines of credit.
The Company is not aware of any other event or trend which would
potentially affect its liquidity. In the event such a trend
develops, the Company believes that there are sufficient funds
available under its lines of credit and that it has strong internal
cash generating capabilities to adequately manage the expansion of
business.
YEAR 2000
The Year 2000 will have a broad impact on the business environment
in which the Company operates due to the possibility that many
computerized systems across all industries will be unable to
process information containing dates beginning in the Year 2000.
The Company has established an enterprise-wide program to prepare
its computer systems and applications for the Year 2000 and is
utilizing both internal and external resources to identify,
correct and test the systems for Year 2000 compliance. The
Company's domestic reprogramming and testing efforts have been
substantially completed. The Company expects that all mission-
critical systems will be Year 2000 ready prior to November 30,
1999.
The nature of the Company's business is such that the business
risks associated with the Year 2000 can be reduced by assessing
the vendors supplying the Company's restaurants with food and
related products and also assessing the Company's franchise and
joint venture business partners to ensure that they are aware of
the Year 2000 business risks and are appropriately addressing
them.
Because third party failures could have a material impact on the
Company's ability to conduct business, questionnaires have been
sent to substantially all of the Company's critical vendors to
obtain reasonable assurance that plans are being developed to
address the Year 2000 issue. The returned questionnaires have been
assessed by the Company, categorized based upon readiness for the
Year 2000 issues, and prioritized in order of significance to the
business of the Company. The Company has established contingency
plans (including continued efforts to evaluate Year 2000 readiness
of existing vendors or identification of alternative vendors)
responding to those high risk, critical vendors which have not
provided the Company with satisfactory evidence of their readiness
to handle Year 2000 issues. Furthermore, the Company will continue
to monitor all critical vendors to ensure their Year 2000
readiness.
Based upon questionnaires returned by the Company's franchise
business partners and direct communications with the Company's
joint venture business partners, the Company has assessed the Year
2000 readiness of these business partners and has implemented an
action plan involving direct communication and the sharing of
information associated with the Year 2000 issue.
The Company has completed the inventory and assessment phases of
its evaluation of all information technology and non-information
technology equipment. Based upon results of the assessment, all
mission-critical equipment is Year 2000 ready.
The enterprise-wide program, including testing and remediation of
all of the Company's systems and applications, the cost of
external consultants, the purchase of software and hardware, and
the compensation of internal employees working on Year 2000
projects, is expected to cost approximately $3.0 to $3.5 million
(except for fringe benefits of internal employees, which are not
separately tracked) from inception in calendar year 1997 through
completion in fiscal 2000. Of these costs, approximately $2.5
million has been incurred through the end of the first quarter of
fiscal 2000. The remaining costs will be incurred prior to the
end of fiscal 2000. All estimated costs have been budgeted and are
expected to be funded by the Company's available cash.
The Company anticipates timely completion of the internal Year
2000 readiness efforts and does not believe the costs related to
the Year 2000 readiness project will be material to its financial
position or results of operations. However, if unanticipated
problems arise from systems or equipment, there could be material
adverse effects on the Company's consolidated financial position,
results of operations and cash flows. As part of the Year 2000
readiness efforts, the Company has developed contingency plans
which will need to be activated in the event of internal systems
failures, but may be modified as additional information becomes
available. Although the questionnaires and other communications
received by the Company from its significant vendors have not
disclosed any material Year 2000 issues, there is no assurance
that these vendors will be Year 2000 ready on a timely basis.
Unanticipated failures or significant delays in furnishing
products or services by significant vendors could have a material
adverse effect on the Company's consolidated financial position,
results of operations and cash flows. Where predictable, the
Company is assessing and attempting to mitigate its risks with
respect to the failure of its significant vendors to be Year 2000
ready as part of its ongoing contingency planning.
Despite the Company's diligent preparation, some of the Company's
internal systems or equipment may fail to operate properly, and
some of its significant vendors may fail to perform effectively or
may fail to timely or completely deliver products. In those
circumstances, the Company expects to be able to conduct necessary
business operations and to obtain necessary products from
alternative vendors, and business operations would generally
continue; however, there would be some disruption which could have
a material adverse effect on the Company's consolidated financial
position, results of operations and cash flows. Similarly, if the
Company's franchise and joint venture business partners sustain
disruptions in their business operations or there are any
unanticipated general public infrastructure failures, there could
be a material adverse effect on the Company's consolidated
financial position, results of operations and cash flows. The
Company has no basis upon which to reasonably analyze the direct
or indirect effects on its guests from Year 2000 issues or
experiences.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in interest
rates on debt and changes in commodity prices.
The Company's net exposure to interest rate risk consists of
floating rate instruments that are benchmarked to U.S. and
European short-term interest rates. The Company may from time to
time utilize interest rate swaps and forwards to manage overall
borrowing costs and reduce exposure to adverse fluctuations in
interest rates. The Company does not use derivative instruments
for trading purposes and the Company has procedures in place to
monitor and control derivative use. The impact on the Company's
results of operations of a one-point interest rate change on the
outstanding balance of the variable rate debt as of September 29,
1999 would be immaterial.
The Company purchases certain commodities such as beef, chicken,
flour and cooking oil. These commodities are generally purchased
based upon market prices established with vendors. The purchase
arrangements may contain contractual features that limit the price
paid by establishing certain price floors or caps. The Company
does not use financial instruments to hedge commodity prices
because these purchase arrangements help control the ultimate cost
paid and any commodity price aberrations that are not covered by
contracts are generally short term in nature.
This market risk discussion contains forward-looking statements.
Actual results may differ materially from this discussion based
upon general market conditions and changes in domestic and global
financial markets.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 133 ("SFAS
No. 133"), "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 establishes accounting and reporting
standards for derivative instruments and hedging activities. In
June 1999, the FASB issued Statement of Financial Accounting
Standards No. 137 ("SFAS No. 137"), "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133," which defers the effective date
of SFAS No. 133 until the Company's first quarter financial
statements in fiscal 2001. The Company is currently not involved
in derivative instruments or hedging activities, and therefore,
will measure the impact of SFAS No. 133 as it becomes necessary.
FORWARD-LOOKING STATEMENTS
Certain statements contained herein are forward-looking regarding
future economic performance, restaurant openings, operating
margins, the availability of acceptable real estate locations for
new restaurants, the sufficiency of cash balances and cash
generated from operating and financing activities for future
liquidity and capital resource needs, and other matters. These
forward-looking statements involve risks and uncertainties and,
consequently, could be affected by general business conditions,
the impact of competition, the seasonality of the Company's
business, governmental regulations, inflation, changes in economic
conditions, consumer perceptions of food safety, changes in
consumer tastes, governmental monetary policies, changes in
demographic trends, identification and availability of suitable
and economically viable locations for new restaurants, impact of
the Year 2000, food and labor costs, availability of materials and
employees, or weather and other acts of God.
PART II. OTHER INFORMATION
Item 6: EXHIBITS
Exhibit 27 Financial Data Schedules. Filed with EDGAR version.
I. Financial Data Schedule as of and for the 13-week period ended
September 29, 1999.
II. Restated Financial Data Schedule as of and for the 13-week
period ended September 23, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
BRINKER INTERNATIONAL, INC.
Date: November 12, 1999 By:__________________________________
Ronald A. McDougall, Vice Chairman
and Chief Executive Officer
(Duly Authorized Signatory)
Date: November 12, 1999 By:____________________________________
Russell G. Owens, Executive Vice
President and Chief Financial
and Strategic Officer
(Principal Financial and Accounting
Officer)
5
3-MOS
JUN-30-2000
SEP-29-1999
17,718
0
22,558
(326)
15,075
103,437
1,262,749
(423,370)
1,111,256
193,678
191,574
0
0
7,815
666,613
1,111,256
505,823
511,033
136,190
443,032
0
175
2,398
41,510
14,404
27,106
0
0
0
27,106
0.41
0.40
5
3-MOS
JUN-30-1999
SEP-23-1998
11,275
0
16,392
(256)
15,058
83,032
1,091,947
(355,155)
991,854
182,728
157,701
0
0
7,815
590,779
991,854
427,546
432,101
117,760
376,943
0
144
2,062
30,658
7,234
20,020
0
0
6,407
13,613
0.21
0.20
Restated to reflect reclassifications in the condensed consolidated
financial statements to conform with current year presentation.
Restated to reflect the adoption of Statement of Position 98-5,
"Reporting on the Costs of Start-Up Activities."
