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): June 7, 2006

 

BRINKER INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

 

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:

 

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

 

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

 

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

 

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

 

 

 

Section 7 — Regulation FD

 

Item 7.01.  Regulation FD Disclosure

 

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 June 7, 2006, Brinker International, Inc. (the “Registrant”) issued a Press Release announcing the declaration of the Registrant’s quarterly dividend to common stock shareholders in the amount of $0.10 per share.  The dividend will be payable on June 28, 2006 to shareholders of record at the close of business on June 19, 2006.

 

Section 8 — Other Events

 

Item 8.01.  Other Events

 

Also, the Registrant released its initial estimate of annual earnings per diluted share growth for its fiscal year 2007.  Registrant further announced that it will provide additional annual guidance on such estimate and the related key assumptions only when a material change occurs and will no longer provide quarterly guidance.

 

Section 9 — Financial Statements and Exhibits.

 

Item 9.01.  Financial Statements and Exhibits.

 

(d)     Exhibits.

 

99     Press Release, dated June 7, 2006.

 

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: June 8, 2006	By:	/s/ Douglas H. Brooks
		Douglas H. Brooks, Chairman of the Board
		President and Chief Executive Officer

 

 

2

 

Exhibit 99

 

 

 

 

BRINKER INTERNATIONAL DECLARES QUARTERLY DIVIDEND,

CONFIRMS 2006 GUIDANCE AND PROVIDES 2007 OUTLOOK

 

DALLAS (June 7, 2006) - Brinker International, Inc. (NYSE: EAT), announced today that its board of directors declared a quarterly dividend of 10 cents per share on the common stock of the company.  The dividend will be paid on June 28, 2006 to shareholders of record as of June 19, 2006.  In addition, the company released May comparable store sales and provided an earnings outlook for fiscal year 2007, estimating fifteen percent growth in earnings per diluted share.

 

Comparable store sales for Brinker and the four brands, for the four-week period ending May 31, 2006, were as follows:

 

Month of May Comparable Store Sales

May FY06 and May FY05; Percentage

 

		May FY06 Comp-Store Sales		May FY05 Comp-Store Sales		May FY06 Price Increase		May FY06 Mix-Shift
Brinker International		(2.3	)%	5.8	%	3.0	%	1.7	%
Chili’s		(1.7	)%	6.8	%	3.4	%	2.2	%
Macaroni Grill		(5.2	)%	3.5	%	1.6	%	(0.1	)%
On The Border		(3.8	)%	6.7	%	3.0	%	2.9	%
Maggiano’s		1.6	%	2.5	%	2.5	%	(0.1	)%

 

Fourth Quarter and Full Fiscal Year 2006 Guidance Confirmed

The company affirmed its estimate for fourth quarter fiscal 2006 earnings per diluted share from continuing operations of $0.65 to $0.68, which includes incremental equity-based compensation expense.  Excluding incremental equity-based compensation, the estimate is $0.71 to $0.74 per diluted share, resulting in 16 percent to 18 percent earnings per diluted share growth for the full 2006 fiscal year. This guidance excludes certain gains and charges.

 

Fiscal 2007 Outlook

 

The company reiterated its long-term strategy focused on growing shareholder value through i) expanding profitable restaurants globally while increasing the percentage of franchise restaurants in the system, ii) growing its base business through brand building and operational performance,  and iii) leveraging customers and infrastructure across a portfolio of powerful brands.  Management also affirmed its stated goal of growing annual earnings per diluted share by 15 percent.

 

The company anticipates earnings per diluted share will grow 15 percent in fiscal year 2007.  Key assumptions include:

 

•                  Revenue growth of 10 percent to 12 percent.

-                    Capacity growth of approximately 11 percent measured by revenues of company-owned restaurants not considered in the comparable store base.

-                    200 to 220 new system restaurant openings (see table below for further detail),

-                    Company-owned comparable store sales growth of 0 percent to 2 percent.

-                    Company restaurants sold to franchisees in fiscal year 2006 are expected to lower revenue growth in fiscal year 2007 by approximately 1 percent.(1)

(1) When company restaurants are sold to franchise partners, or re-franchised, revenues from these restaurants changes from company sales to franchise fees, reducing the company’s reported revenues for those restaurants.

 

 

 

•                  Operating income improvement of 20 to 30 basis points.

-                    Sales leverage, increased franchise restaurants, flat general and administrative expenses on a dollar basis, as well as improving commodity trends support the year-over-year benefit.

•                  Interest expense of $30 million. The company continues to actively manage its balance sheet to optimize its capital structure, retain adequate operational liquidity and financial flexibility and ensure access to capital to accomplish planned investments.

•                  Capital expenditures of approximately $460 million.  New restaurant development will make up approximately $380 million of the company’s capital investment while the remaining portion will be allocated to platforms that improve revenue generation and profitability while enhancing the overall customer experience, in addition to restaurant maintenance.

•                  Excess cash flow will be used for distributions to shareholders through the payment of quarterly dividends and on-going share repurchases.  As of March 29, 2006, the company had approximately $172.7 million remaining capacity available on its authorization for share repurchase.

•                  Additionally, the company anticipates consolidated return on invested capital for fiscal year 2007 in the mid-teens.

 

During fiscal year 2007, the company will provide additional annual guidance for these preceding items only when there is a material change and will no longer provide quarterly guidance.   The company remains committed to providing the investment community thorough information regarding forward-looking corporate strategy and key drivers of longer-term financial performance, but is reducing focus on short-term forecasts.

 

FY’07 New Development Summary

Ownership Type; Restaurants

 

		Company Owned Restaurants		Franchise Restaurants		Total Restaurants
Brinker International		145-154		52-65		200-220
Chili’s		125-130		10-15		135-145
Macaroni Grill		4-5		3-4		7-9
On The Border		12-14		4-6		16-20
Maggiano’s		4-5		—		4-5
International				38-41		38-41

 

A recorded message providing May sales will be available beginning Wednesday, June 7, at 4:30 p.m. EDT through Wednesday, June 28 by dialing 1-973-528-0005 and entering pass code 1313.  The company plans to release fourth quarter fiscal year 2006 financial results on August 10, 2006.

 

At the end of the third quarter fiscal year 2006, Brinker International either owned, operated, or franchised 1,580 restaurants under the names Chili’s Grill & Bar (1,161 units), Romano’s Macaroni Grill (240 units), Maggiano’s Little Italy (37 units), and On The Border Mexican Grill & Cantina (142 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 impact of acquisitions and divestitures, 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 and behavior, 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.

 

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