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FORM 8-K

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): August 11, 2005

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 August 11, 2005, Brinker International, Inc. issued a Press Release announcing its fourth quarter fiscal 2005 results.  A copy of this Press Release is attached hereto as Exhibit 99.

Item 9.01.  Financial Statements and Exhibits.

     (c)   Exhibits.

     99   Press Release, dated August 11, 2005.

 

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: August 16, 2005

By:  /s/ Douglas H. Brooks                                  

     Douglas H. Brooks, Chairman of the Board

     President and Chief Executive Officer
EXHIBIT 99

EXHIBIT 99

FOR IMMEDIATE RELEASE                                             

Contacts:  Louis Adams, Chris Barnes, Media Relations               Lynn Schweinfurth, Investor Relations
                (972) 770-4967, (972) 770-4959                                   (972) 770-7228

BRINKER INTERNATIONAL REPORTS

FOURTH QUARTER FISCAL 2005 EARNINGS

DALLAS (Aug. 11, 2005) - Brinker International, Inc. (NYSE: EAT), reported net income of $49.8 million, or $0.55 diluted earnings per share, including certain charges and gains, for the company's fourth quarter ended June 29, 2005. Exclusive of the charges and gains, diluted earnings per share grew 8 percent to $0.71. For the same quarter of fiscal 2004, which had an additional operating week, the company reported net income of $63.7 million, or $0.62 diluted earnings per share, including restructuring charges. Exclusive of the restructuring charges, fiscal 2004 fourth quarter diluted earnings per share were $0.66.

As previously reported in the May sales release, the company recorded a $15.9 million charge related to the correction of accounting policies associated with the accrual of vacation and utilities and a $6.6 million tax benefit resulting from a correction of the company's deferred tax liabilities.  Additionally, the company recorded a $6.6 million charge resulting from the decision to close 15 restaurants and a $1.9 million gain resulting from the sale of all three Corner Bakery Cafe commissaries.

Excluding the aforementioned after-tax charges and gains, net income and diluted earnings per share for the fourth quarter would have been as follows:

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

Net
Income

 

Diluted EPS

As reported

  $    49.8

$      0.55

  Utility and vacation correction

   15.9

       0.18

  Deferred tax liability correction

     (6.6)

       (0.07)

  Store closure charge

     6.6

        0.07

  Gain on sale of commissaries

      (1.9)

        (0.02)

As Adjusted

  $   63.8

$     0.71

Other results for the fourth quarter and fiscal year 2005 included:

 

June and July 2005 Comparable Store Sales

For the four-week period ending June 29, 2005, comparable store sales increased 1.6 percent. June comparable store sales for the company and the four reported brands were as follows:

June FY '05

June FY '04

Brinker

1.6%

1.7%

Chili's

0.9%

2.4%

Macaroni Grill

1.2%

-1.6%

On The Border

2.1%

4.9%

Maggiano's

2.6%

-0.8%

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

 

Price Increase

Product Mix-Shift
Brinker

3.1%

1.2%
Chili's

3.5%

1.7%
Macaroni Grill

2.1%

0.3%
On The Border

1.8%

-0.1%
Maggiano's

1.7%

0.0%

For the five-week period ended August 3, 2005, comparable store sales increased 3.5 percent. July comparable store sales for the company and the four reported brands were as follows:

  July FY '06 July FY '05
Brinker 3.5% 2.6%
Chili's 5.4% 2.4%
Macaroni Grill -1.3% 0.4%
On The Border 0.4% 9.7%
Maggiano's 1.6% 0.1%

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

  Price Increase Product Mix-Shift
Brinker 2.6% 1.7%
Chili's 2.9% 2.7%
Macaroni Grill 2.2% -0.1%
On The Border 1.8% -1.0%
Maggiano's 1.5% 0.7% 
 

First Quarter and Full Fiscal Year 2006 Forecast

The company's initial estimate for its first quarter fiscal 2006 earnings per diluted share is $0.45 to $0.47, excluding equity-based compensation expense. Equity-based compensation expense for the first quarter is estimated to be approximately $10.4 million ($8.1 million after-tax), resulting in earnings per diluted share of $0.36 to $0.38.   This assumes comparable store sales of 3 to 4 percent and weighted average shares of 91 to 92 million.

The company anticipates full-year fiscal 2006 earnings per diluted share to be $2.40 to $2.46, excluding equity-based compensation expense. Equity-based compensation expense for the year is estimated to be approximately $31.0 to $33.0 million  ($24.0 to $26.0 million after-tax), resulting in earnings per diluted share of $2.08 to $2.16. This assumes comparable store sales of 3 to 4 percent and weighted average shares of 90 to 91 million.

The first quarter and full year guidance excludes gains and charges.

August sales results will be published on September 8, 2005, 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 (Aug. 11). 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 on September 7, 2005.

At the end of the fourth quarter of fiscal 2005, Brinker International either owned, operated, franchised, or was involved in the ownership of 1,588 restaurants under the names Chili's Grill & Bar (1,074 units), Romano's Macaroni Grill (235 units), Maggiano's Little Italy (33 units), On The Border Mexican Grill & Cantina (135 units), Corner Bakery Cafe (90 units), and Rockfish Seafood Grill (21 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, 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)

 

13 Weeks Ended

14 Weeks Ended

52 Weeks Ended

53 Weeks Ended

June 29,

June 30,

June 29,

June 30,

2005

2004

2005

2004

(Unaudited)

(Unaudited)

(Unaudited)

 

 

 

 

 

Revenues

$  1,042,050  

$  1,018,176  

$  3,912,850

$  3,707,486

 

 

 

 

 

Operating Costs and Expenses:

 

 

 

  Cost of sales

292,039

283,846

   1,100,842

   1,024,724

  Restaurant expenses (a)

581,422

543,793

   2,180,239

   2,030,044

  Depreciation and amortization

48,745

45,846

     190,889

     178,879

  General and administrative (b)

43,002    

43,892    

     156,151

     153,231

  Restructure charges and other impairments

      10,673

       5,702

      63,422

      74,237

   Total operating costs and expenses

     975,881   

     923,079   

   3,691,543

   3,461,115

 

 

 

 

 

Operating income

66,169

95,097

221,307

     246,371

 

 

 

 

 

Interest expense

5,221

2,630

25,368

      11,603

Other, net

         (86) 

        (231) 

       1,526 

       1,742

 

 

 

Income before provision for income taxes

61,034

92,698

194,413

     233,026

Provision for income taxes (c)

      11,271

      29,018

      34,194 

     82,108

 

 

 

 

    Net income

$     49,763

$     63,680

$    160,219

 $   150,918

 

 

 

 

 

 

 

 

 

Basic net income per share

$       0.56

$       0.67

$       1.81

 $      1.57

 

 

 

 

 

 

 

 

 

Diluted net income per share

$       0.55

$       0.62

$       1.73

 $      1.48  

 

 

 

 

 

 

 

 

 

Basic weighted average

 

 

 

 

  shares outstanding

      88,746

      94,854

      88,530

      96,072

 

 

 

 

 

Diluted weighted average

 

 

 

  shares outstanding

      90,062

     104,606

      94,229

     105,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a)       Current year restaurant expenses include:

Prior year restaurant expenses include:

b)   Current year general and administrative expenses include a $1.1 million charge recorded in the fourth quarter as a result of a correction in accounting policies associated with accruals of vacation and utilities.

c)   Current year-to-date provision for income taxes includes a $16.9 million benefit related to the IRS settlement and a $6.6 million tax benefit recorded in the fourth quarter associated with the correction of deferred tax liabilities. 

 

BRINKER INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

June 29,

June 30,

 

2005

2004

 

(Unaudited)

 

 

ASSETS

 

 

 

  Total current assets

$     240,179

$    400,920

 

  Net property and equipment

    1,708,165

   1,613,884

 

  Total other assets  

       207,780

      239,620

 

  Total assets

$  2,156,124

$ 2,254,424

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

  Total current liabilities

$     419,917

$    379,162

 

  Long-term debt, less current installments

       406,505

      639,291

 

  Other liabilities

       229,420

      225,549

 

  Total shareholders' equity

    1,100,282

   1,010,422

 

  Total liabilities and shareholders' equity

$  2,156,124

$ 2,254,424

 

 

 

  

BRINKER INTERNATIONAL, INC.

UNITS SUMMARY

Total Units

Fourth Quarter Fiscal 2005

Fourth Quarter Fiscal 2005

Total Units

Projected Openings

Mar. 30, 2005

Openings

Sales/Closings

June 29, 2005

Fiscal 2006

 

Company-Owned Units:

 

  

 

 

  Chili's

793

25

(7)

811

97-100

  Macaroni Grill

219

4

(3)

220

6-7

  Maggiano's

33

    -

      -

33

4-5

  On The Border

115

4

(2)

117

6-8

  Corner Bakery

       84

        4

        (1)

        87

        7-9

1,244

      37

      (13)

    1,268

120-129

 

 

 

 

 

JV/Franchise Units:

 

 

 

 

 

  Chili's

258

5

-

263

25-30

  Macaroni Grill

13

2

-

15

4-5

  On The Border

18

-

-

18

3-4

  Corner Bakery

3

-

-

3

0-1

  Rockfish

       21

          -

          -

         21

           -

     313

          7

          -

       320

   32-40

 

 

 

 

 

Total Units:

 

 

 

 

 

  Chili's

1,051

30

(7)

1,074

122-130

  Macaroni Grill

232

6

(3)

235

10-12

  Maggiano's

33

-

      -

33

4-5

  On The Border

133

4

(2)

135

9-12

  Corner Bakery

87

4

 (1)

90

7-10

  Rockfish

         21

             -

             -

       21     

           0

     1,557

          44

         (13)

      1,588

152-169

 

 

 

 

 

FOR ADDITIONAL INFORMATION, CONTACT:

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