Brinker International Reports Year-Over-Year Increases In Fourth Quarter And Full Fiscal Year EPS

Dallas / TX. (bi) Brinker International Inc., a recognized leader in casual dining, announced results for the fiscal fourth quarter ended June 29, 2016. Highlights include the following:

• In 2016, the fourth quarter and fiscal year included an additional operating week (53rd week) compared to fiscal 2015
• On a GAAP basis, earnings per diluted share increased 20.7 percent to 1.11 USD compared to 0.92 USD for the fourth quarter of fiscal 2015. On a GAAP basis, earnings per diluted share increased 12.1 percent to 3.42 USD compared to 3.05 USD for the full year fiscal 2015
• Earnings per diluted share, excluding special items, increased 31.9 percent to 1.24 USD compared to 0.94 USD for the fourth quarter of fiscal 2015. Earnings per diluted share, excluding special items, increased 14.9 percent to 3.55 USD compared to 3.09 USD for the full year fiscal 2015.
• Brinker International total fourth quarter revenues increased 15.4 percent to 881.7 million USD compared to the fourth quarter of fiscal 2015 and company sales increased 15.8 percent to 855.4 million USD compared to the fourth quarter of fiscal 2015, primarily attributable to the 103 restaurants acquired with the Pepper Dining transaction in the first quarter of fiscal 2016 as well as the additional operating week in the fourth quarter of fiscal 2016
• Chili’s fourth quarter company-owned comparable restaurant sales(1) decreased 1.8 percent
• Maggiano’s fourth quarter comparable restaurant sales1 decreased 1.7 percent
• Chili’s franchise fourth quarter comparable restaurant sales1 decreased 3.4 percent, which includes a 2.1 percent and 5.5 percent decrease for U.S. and international franchise restaurants, respectively
• Restaurant operating margin(2) as a percent of company sales, declined approximately 20 basis points to 18.3 percent compared to 18.5 percent for the fourth quarter of fiscal 2015
• For fiscal 2016, cash flows provided by operating activities were 394.7 million USD and capital expenditures totaled 112.8 million USD. Free cash flow(3) was approximately 281.9 million USD (see non-GAAP reconciliation below)
• The company repurchased approximately 0.4 million shares of its common stock for 18.7 million USD in the fourth quarter and a total of approximately 5.8 million shares for 284.9 million USD year-to-date
• The company declared a dividend of 32 cents per share which was paid on June 30, 2016, representing a 14.3 percent increase over the prior year
• The company plans to increase leverage in the range of 250 to 300 million USD in the near term subject to market conditions and use the proceeds to return capital to shareholders in the form of share repurchases
• The company’s Board of Directors authorized an additional 150 million USD in share repurchases which brings the total available authority to 455 million USD

«We ended the fiscal year with improving trends and have returned to gaining share in the industry», said Wyman Roberts, chief executive officer and president. «We are also encouraged by the early results of our fiscal year 2017 initiatives. The strong cash flow generation of our business model gives us confidence to increase our leverage and return additional capital to shareholders».

1. Amounts are calculated based on comparable 13 weeks in each fiscal quarter.
2. Restaurant operating margin is defined as Company sales less Cost of sales, Restaurant Labor and Restaurant expenses and excludes depreciation and amortization expenses. Restaurant operating margin is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance. Restaurant operating margin is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative, to operating income or other similarly titled measures of other companies.
3. Free cash flow is defined as cash flows provided by operating activities less capital expenditures. Free cash flow is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative, to operating cash flow or other similarly titled measures of other companies.