OREANDA-NEWS. Bloomin' Brands, Inc. (Nasdaq: BLMN) today reported results for the first quarter ("Q1 2016") ended March 27, 2016 compared to the first quarter ("Q1 2015") ended March 29, 2015.

Key highlights for Q1 2016 include the following:

  • The Company repurchased approximately 4.4 million shares of common stock for a total of $75.0 million;
  • Comparable sales for Company-owned U.S. concepts declined 1.5%;
  • Comparable sales for Outback Steakhouse in Brazil increased 8.8%; and
  • Added eight new restaurants, including six in international markets

Subsequent to Q1 2016, the Company entered into a sale-leaseback transaction in which it sold 41 restaurant properties for gross proceeds of $141.4 million.

Adjusted Diluted EPS and Diluted EPS

The following table reconciles Adjusted diluted earnings per share to Diluted earnings per share for the periods as indicated below.

 

Q1

    
 

2016

  

2015

  

CHANGE

Adjusted diluted earnings per share

$

0.47

    

$

0.54

    

$

(0.07)

  

Adjustments

(0.18)

    

(0.07)

    

(0.11)

  

Diluted earnings per share

$

0.29

    

$

0.47

    

$

(0.18)

  
           

____________________

See Non-GAAP Measures later in this release.

CEO Comments

"Our first quarter earnings were in line with our expectations," said Liz Smith, CEO. "As we indicated in February, we expect our performance to strengthen in the back half of the year.  This cadence was contemplated in our annual guidance and is driven by the timing of investments and their related benefits, lapping a very strong first half in 2015 and the pacing of foreign currency impact."

Smith continued, "In addition, we repurchased $75.0 million worth of stock in the first quarter.  This was enabled by our strong free cash flow and the great progress we are making in our efforts to sell our owned real estate. We will continue to explore additional opportunities within our portfolio to maximize shareholder value."

First Quarter Financial Results

(dollars in millions)

Q1 2016

  

Q1 2015

  

% Change

Total revenues

$

1,164.2

    

$

1,202.1

    

(3.2)

%
           

Adjusted restaurant-level operating margin

17.7

%

  

18.3

%

  

(0.6)

%

U.S. GAAP restaurant-level operating margin

17.8

%

  

18.4

%

  

(0.6)

%
           

Adjusted operating income margin

7.9

%

  

9.1

%

  

(1.2)

%

U.S. GAAP operating income margin

7.4

%

  

8.1

%

  

(0.7)

%
  • The decrease in Total revenues was primarily due to the effect of foreign currency translation and lower comparable restaurant sales, partially offset by the net benefit of new restaurant openings and closings.
  • The decreases in Adjusted and U.S. GAAP restaurant-level operating margin were primarily due to wage inflation and unfavorable product mix. These decreases were partially offset by productivity savings and menu pricing.
  • The decrease in Adjusted operating income margin was due to lower restaurant-level operating margin as described above and higher expense associated with the timing of the Company's annual managing partner conference, partially offset by lower deferred compensation expenses and a reduction in professional fees.
  • The differences between Adjusted and U.S. GAAP operating income margin were primarily due to restaurant closing costs related to our Bonefish Restructuring in 2016 and our International Restaurant Closure Initiative in 2015.

First Quarter Comparable Restaurant Sales

THIRTEEN WEEKS ENDED MARCH 27, 2016

  

COMPANY- OWNED

Comparable restaurant sales (stores open 18 months or more) (1) (2):

    

U.S.

    

Outback Steakhouse

  

(1.3)

%

Carrabba's Italian Grill

  

(2.0)

%

Bonefish Grill

  

(2.7)

%

Fleming's Prime Steakhouse & Wine Bar

  

1.3

%

Combined U.S.

  

(1.5)

%
     

International

    

Outback Steakhouse - Brazil

  

8.8

%

Outback Steakhouse - South Korea

  

(5.6)

%

_________________

(1)

Comparable restaurant sales exclude the effect of fluctuations in foreign currency rates.

(2)

Relocated international restaurants closed more than 30 days and relocated U.S. restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.

U.S. Segment Operating Results

(dollars in millions)

Q1 2016

  

Q1 2015

  

% Change

U.S.

          

Total revenues

$

1,043.8

    

$

1,062.0

    

(1.7)

%
           

Adjusted restaurant-level operating margin (1)

17.1

%

  

18.0

%

  

(0.9)

%

U.S. GAAP restaurant-level operating margin (1)

17.3

%

  

18.0

%

  

(0.7)

%
           

Adjusted operating income margin (1)

11.6

%

  

12.3

%

  

(0.7)

%

U.S. GAAP operating income margin (1)

11.3

%

  

12.1

%

  

(0.8)

%

_________________

(1)

During the first quarter of 2016, we recast our segment reporting. See the "Segment Recast" discussion below for additional details.
  • The decrease in Total revenues was primarily due to lower comparable restaurant sales.
  • The decreases in Adjusted and U.S. GAAP restaurant-level operating margin were primarily due to wage inflation and unfavorable product mix. These increases were partially offset by productivity savings and menu pricing.
  • The decrease in Adjusted operating income margin was due to lower restaurant-level operating margin as described above partially offset by lower deferred compensation expenses and a reduction in professional fees.
  • The differences between Adjusted and U.S. GAAP operating income margin were primarily due to restaurant closing costs related to our Bonefish Restructuring in 2016 and our Domestic Restaurant Closure Initiative in 2015.

International Segment Operating Results

(dollars in millions)

Q1 2016

  

Q1 2015

  

% Change

International

          

Total revenues

$

120.4

    

$

140.0

    

(14.0)

%
           

Adjusted restaurant-level operating margin

19.5

%

  

21.7

%

  

(2.2)

%

U.S. GAAP restaurant-level operating margin

19.5

%

  

21.7

%

  

(2.2)

%
           

Adjusted operating income margin

9.8

%

  

12.6

%

  

(2.8)

%

U.S. GAAP operating income margin

9.4

%

  

6.3

%

  

3.1

%
  • The decrease in Total revenues is primarily due to $36.3 million of foreign currency translation, partially offset by new restaurant openings and higher comparable restaurant sales.
  • The decreases in Adjusted and U.S. GAAP restaurant-level operating margin were primarily due to higher commodity inflation, wage inflation and advertising expense partially offset by menu pricing, productivity savings and higher average unit volumes.
  • The decrease in Adjusted operating income margin was primarily due to the change in restaurant-level operating margin and higher depreciation and amortization expense.
  • The increase in U.S. GAAP operating income margin was driven by the lapping of expenses related to our International Restaurant Closure Initiative.
  • Foreign currency translation negatively impacted adjusted operating income by $4.2 million.

System-wide Development

The following summarizes the Company's system-wide development for the thirteen weeks ended March 27, 2016:

 

DECEMBER 27, 2015

  

OPENINGS

  

CLOSURES

  

MARCH 27, 2016

U.S.:

              

Outback Steakhouse—Company-owned

650

    

—

    

(1)

    

649

  

Bonefish Grill—Company-owned

210

    

1

    

(6)

    

205

  

Bonefish Grill—Franchised

5

    

1

    

—

    

6

  
               

International:

              

Company-owned

              

Outback Steakhouse—Brazil

75

    

2

    

(1)

    

76

  

Outback Steakhouse—South Korea

75

    

2

    

(3)

    

74

  

Other

16

    

1

    

—

    

17

  

Franchised

58

    

1

    

(2)

    

57

  

System-wide development

    

8

    

(13)

      

Dividend Declaration and Share Repurchases

The Company's Board of Directors declared a quarterly cash dividend of $0.07 per share to be paid on May 19, 2016 to all stockholders of record as of the close of business on May 6, 2016.

The Company repurchased approximately 4.4 million shares of common stock for a total of $75.0 million.

Sale-leaseback

Subsequent to Q1, the Company entered into a sale-leaseback transaction with a third-party in which the Company sold 41 restaurant properties at fair market value for gross proceeds of $141.4 million.   We used a portion of these proceeds to pay down $87.6 million on our bridge loan.

Fiscal 2016 Financial Outlook

We are reaffirming our full-year guidance, including positive combined U.S. comparable sales and Adjusted diluted earnings per share growth of at least 10% as previously communicated in our February 17, 2016 earnings release.

Segment Recast

Prior to 2016, certain insurance expenses were not allocated to our concepts as these expenses were reviewed and evaluated on a Company-wide basis and therefore, these costs were excluded from segment restaurant-level operating margin and income from operations. In 2016, we changed how we review and assess insurance expenses related to our restaurants and now consider those costs when evaluating the operating performance of our concepts. Accordingly, we have recast all prior period segment information to reflect this change.  For reconciliations related to the recast of prior period segment information, refer to tables twelve, thirteen and fourteen included later in this release.

Non-GAAP Measures

In addition to the results provided in accordance with U.S. GAAP, this press release and related tables include certain non-GAAP measures, which present operating results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with U.S. GAAP and include the following: (i) Adjusted restaurant-level operating margin, (ii) Adjusted income from operations and the corresponding margin, (iii) Adjusted net income, (iv) Adjusted diluted earnings per share, (v) Adjusted segment restaurant-level operating margin, (vi) Adjusted segment income from operations and the corresponding margin and (vii) constant currency.

Although we believe these non-GAAP measures enhance investors' understanding of our business and performance, these non-GAAP financial measures are not intended to replace U.S. GAAP financial measures. These metrics are not necessarily comparable to similarly titled measures used by other companies. The use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that vary from period to period without correlation to core operating performance or that vary widely among similar companies. However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent. We believe that the disclosure of these non-GAAP measures is useful to investors as they form the basis for how our management team and Board of Directors evaluate our operating performance, allocate resources and establish employee incentive plans.

For reconciliations of the non-GAAP measures used in this release, refer to tables four, five, six, seven, eight, thirteen and fourteen included later in this release.

Conference Call

The Company will host a conference call today, April 26, 2016 at 9:00 AM EST. The conference call can be accessed live over the telephone by dialing (877) 407-9039, or (201) 689-8470 for international participants. A replay will be available beginning two hours after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 13633819. The replay will be available through Tuesday, May 3, 2016. The call will also be webcast live from the Company's website at http://www.bloominbrands.com under the Investors section. A replay of this webcast will be available on the Company's website after the call.

About Bloomin' Brands, Inc.

Bloomin' Brands, Inc. is one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. The Company has four founder-inspired brands: Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill and Fleming's Prime Steakhouse & Wine Bar. The Company operates approximately 1,500 restaurants in 48 states, Puerto Rico, Guam and 22 countries, some of which are franchise locations. For more information, please visit bloominbrands.com.

Forward-Looking Statements

Certain statements contained herein, including statements under the headings "CEO Comments," and "Fiscal 2016 Financial Outlook" are not based on historical fact and are "forward-looking statements" within the meaning of applicable securities laws. Generally, these statements can be identified by the use of words such as "guidance," "believes," "estimates," "anticipates," "expects," "on track," "feels," "forecasts," "seeks," "projects," "intends," "plans," "may," "will," "should," "could," "would" and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the Company's forward-looking statements. These risks and uncertainties include, but are not limited to: local, regional, national and international economic conditions; consumer confidence and spending patterns; the cost and availability of credit; interest rate changes; competition; consumer reaction to public health and food safety issues; government actions and policies; increases in unemployment rates and taxes; increases in labor costs; price and availability of commodities; challenges associated with our expansion, remodeling and relocation plans; interruption or breach of our systems or loss of consumer or employee information; foreign currency exchange rates; our ability to preserve the value of and grow our brands; the seasonality of the Company's business; weather, acts of God and other disasters; changes in patterns of consumer traffic, consumer tastes and dietary habits; the effectiveness of our strategic actions, including acquisitions and dispositions; compliance with debt covenants and the Company's ability to make debt payments and planned investments; and our ability to continue to pay dividends and repurchase shares of our common stock. Further information on potential factors that could affect the financial results of the Company and its forward-looking statements is included in its most recent Form 10-K and subsequent filings with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statement, except as may be required by law. These forward-looking statements speak only as of the date of this release. All forward-looking statements are qualified in their entirety by this cautionary statement.

Note: Numerical figures included in this release have been subject to rounding adjustments.

TABLE ONE

BLOOMIN' BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(UNAUDITED)
 

THIRTEEN WEEKS ENDED

(dollars in thousands, except per share data)

MARCH 27, 2016

  

MARCH 29, 2015

Revenues

      

Restaurant sales

$

1,158,052

    

$

1,194,810

  

Other revenues

6,136

    

7,249

  

Total revenues

1,164,188

    

1,202,059

  

Costs and expenses

      

Cost of sales

375,288

    

387,468

  

Labor and other related

322,805

    

323,986

  

Other restaurant operating

253,571

    

264,038

  

Depreciation and amortization

47,651

    

46,486

  

General and administrative

75,025

    

73,247

  

Provision for impaired assets and restaurant closings

3,164

    

9,133

  

Total costs and expenses

1,077,504

    

1,104,358

  

Income from operations

86,684

    

97,701

  

Loss on defeasance, extinguishment and modification of debt

(26,580)

    

—

  

Other expense, net

(19)

    

(1,147)

  

Interest expense, net

(12,875)

    

(13,198)

  

Income before provision for income taxes

47,210

    

83,356

  

Provision for income taxes

11,327

    

21,274

  

Net income

35,883

    

62,082

  

Less: net income attributable to noncontrolling interests

1,408

    

1,494

  

Net income attributable to Bloomin' Brands

$

34,475

    

$

60,588

  
       

Net income

$

35,883

    

$

62,082

  

Other comprehensive income:

      

Foreign currency translation adjustment

(7,285)

    

(25,462)

  

Unrealized losses on derivatives, net of tax

(2,735)

    

(4,012)

  

Reclassification of adjustment for loss on derivatives included in net income, net of tax

988

    

—

  

Comprehensive income

26,851

    

32,608

  

Less: comprehensive income attributable to noncontrolling interests

2,106

    

1,494

  

Comprehensive income attributable to Bloomin' Brands

$

24,745

    

$

31,114

  
       

Earnings per share:

      

Basic

$

0.29

    

$

0.48

  

Diluted

$

0.29

    

$

0.47

  

Weighted average common shares outstanding:

      

Basic

117,930

    

125,302

  

Diluted

120,776

    

128,759

  
       

Cash dividends declared per common share

$

0.07

    

$

0.06

  

TABLE TWO

BLOOMIN' BRANDS, INC.

SEGMENT RESULTS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

U.S. Segment

MARCH 27, 2016

  

MARCH 29, 2015

Revenues

      

Restaurant sales

$

1,038,749

    

$

1,056,104

  

Other revenues

5,030

    

5,910

  

Total revenues

$

1,043,779

    

$

1,062,014

  

Restaurant-level operating margin (1)

17.3

%

  

18.0

%

Income from operations (1)

$

117,839

    

$

128,268

  

Operating income margin (1)

11.3

%

  

12.1

%

International Segment

  

Revenues

      

Restaurant sales

$

119,303

    

$

138,706

  

Other revenues

1,106

    

1,339

  

Total revenues

$

120,409

    

$

140,045

  

Restaurant-level operating margin

19.5

%

  

21.7

%

Income from operations

$

11,349

    

$

8,879

  

Operating income margin

9.4

%

  

6.3

%

Reconciliation of Segment Income from Operations to Consolidated Income from Operations

      

Segment income from operations

      

U.S. (1)

$

117,839

    

$

128,268

  

International

11,349

    

8,879

  

Total segment income from operations

129,188

    

137,147

  

Unallocated corporate operating expense (1)

(42,504)

    

(39,446)

  

Total income from operations

$

86,684

    

$

97,701

  

_________________

(1)

During the first quarter of 2016, we recast our segment reporting. See the "Segment Recast" discussion above for additional details.

TABLE THREE

BLOOMIN' BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

(UNAUDITED)

(dollars in thousands)

MARCH 27, 2016

  

DECEMBER 27, 2015

Cash and cash equivalents (1)

$

128,834

    

$

132,337

  

Net working capital (deficit) (2)

$

(502,428)

    

$

(395,522)

  

Total assets

$

2,885,454

    

$

3,032,569

  

Total debt, net

$

1,325,762

    

$

1,316,864

  

Total stockholders' equity

$

367,202

    

$

421,900

  

_________________

(1)

Excludes restricted cash.

(2)

The Company has, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies). The Company operates successfully with negative working capital because cash collected on Restaurant sales is typically received before payment is due on its current liabilities and its inventory turnover rates require relatively low investment in inventories. Additionally, ongoing cash flows from restaurant operations and gift card sales are used to service debt obligations and to make capital expenditures.

TABLE FOUR

BLOOMIN' BRANDS, INC.

RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATION

(UNAUDITED)
 

THIRTEEN WEEKS ENDED

  

(UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
 

MARCH 27, 2016

  

MARCH 29, 2015

  
 

U.S. GAAP

  

ADJUSTED (1)

  

U.S. GAAP

  

ADJUSTED (2)

  

QUARTER TO DATE

Restaurant sales

100.0

%

  

100.0

%

  

100.0

%

  

100.0

%

    
                   

Cost of sales

32.4

%

  

32.4

%

  

32.4

%

  

32.4

%

  

—

%

Labor and other related

27.9

%

  

27.9

%

  

27.1

%

  

27.1

%

  

(0.8)%

  

Other restaurant operating

21.9

%

  

22.1

%

  

22.1

%

  

22.1

%

  

—

%
                   

Restaurant-level operating margin

17.8

%

  

17.7

%

  

18.4

%

  

18.3

%

  

(0.6)%

  

_________________

(1)

Includes adjustments primarily for the write-off of $1.9 million of deferred rent liabilities associated with the Bonefish Restructuring recorded in Other restaurant operating.

(2)

Includes adjustments of $0.2 million of expenses from the International Restaurant Closure Initiative, partially offset by $0.1 million of non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations. All adjustments were recorded in Other restaurant operating.

TABLE FIVE

BLOOMIN' BRANDS, INC.

SEGMENT RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATION

(UNAUDITED)
 

THIRTEEN WEEKS ENDED

  

(UNFAVORABLE)
FAVORABLE CHANGE
IN ADJUSTED
 

MARCH 27, 2016

  

MARCH 29, 2015

  

Restaurant-level operating margin:

U.S. GAAP

  

ADJUSTED

  

U.S. GAAP

  

ADJUSTED

  

QUARTER TO DATE

U.S. (1)(2)

17.3

%

  

17.1

%

  

18.0

%

  

18.0

%

  

(0.9)%

  

International (3)

19.5

%

  

19.5

%

  

21.7

%

  

21.7

%

  

(2.2)%

  

_________________

(1)

During the first quarter of 2016, we recast our segment reporting. See the "Segment Recast" discussion above for additional details.

(2)

Includes adjustments primarily for the write-off of $1.9 million of deferred rent liabilities associated with the Bonefish Restructuring for the thirteen weeks ended March 27, 2016.

(3)

Includes adjustments of $0.2 million of expenses from the International Restaurant Closure Initiative, partially offset by $0.1 million of non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations for the thirteen weeks ended March 29, 2015.

TABLE SIX

BLOOMIN' BRANDS, INC.

INCOME FROM OPERATIONS, NET INCOME AND DILUTED EARNINGS PER SHARE NON-GAAP RECONCILIATION

(UNAUDITED)
 

THIRTEEN WEEKS ENDED

(in thousands, except per share data)

MARCH 27, 2016

  

MARCH 29, 2015

Income from operations

$

86,684

    

$

97,701

  

Operating income margin

7.4

%

  

8.1

%

Adjustments:

      

Restaurant impairments and closing costs (1)

2,131

    

8,870

  

Purchased intangibles amortization (2)

860

    

1,283

  

Restaurant relocations, remodels and related costs (3)

640

    

1,169

  

Transaction-related expenses (4)

572

    

275

  

Severance (5)

1,135

    

—

  

Total income from operations adjustments

5,338

    

11,597

  

Adjusted income from operations

$

92,022

    

$

109,298

  

Adjusted operating income margin

7.9

%

  

9.1

%
       

Net income attributable to Bloomin' Brands

$

34,475

    

$

60,588

  

Adjustments:

      

Income from operations adjustments

5,338

    

11,597

  

Loss on defeasance, extinguishment and modification of debt (6)

26,580

    

—

  

Loss on disposal of business and disposal of assets (7)

—

    

1,151

  

Total adjustments, before income taxes

31,918

    

12,748

  

Adjustment to provision for income taxes (8)

(9,702)

    

(3,627)

  

Net adjustments

22,216

    

9,121

  

Adjusted net income

$

56,691

    

$

69,709

  
       

Diluted earnings per share

$

0.29

    

$

0.47

  

Adjusted diluted earnings per share

$

0.47

    

$

0.54

  
       

Diluted weighted average common shares outstanding

120,776

    

128,759

  

_________________

(1)

Represents expenses incurred for the Bonefish Restructuring and the International and Domestic Restaurant Closure Initiatives.

(2)

Represents non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations.

(3)

Represents asset impairment charges and accelerated depreciation incurred in connection with our relocation and remodel programs.

(4)

Relates primarily to the following: (i) costs incurred with our sale-leaseback initiative in 2016 and (ii) costs incurred with the secondary offering of our common stock in March 2015.

(5)

Relates to severance expense incurred as a result of an organizational realignment.

(6)

Relates to the defeasance of the 2012 CMBS loan in 2016.

(7)

Primarily represents loss on the sale of our Roy's business in 2015.

(8)

Represents income tax effect of the adjustments for the thirteen weeks ended March 27, 2016 and March 29, 2015. 

Following is a summary of the financial statement line item classification of the net income adjustments:

 

THIRTEEN WEEKS ENDED

(dollars in thousands)

MARCH 27, 2016

  

MARCH 29, 2015

Other restaurant operating expense

$

(1,970)

    

$

(136)

  

Depreciation and amortization

1,545

    

1,266

  

General and administrative

2,652

    

1,602

  

Provision for impaired assets and restaurant closings

3,111

    

8,865

  

Other expense, net

—

    

1,151

  

Provision for income taxes

(9,702)

    

(3,627)

  

Loss on defeasance, extinguishment and modification of debt

26,580

    

—

  

Net adjustments

$

22,216

    

$

9,121

  

TABLE SEVEN

BLOOMIN' BRANDS, INC.

SEGMENT INCOME FROM OPERATIONS NON-GAAP RECONCILIATION

(UNAUDITED)

U.S. Segment

THIRTEEN WEEKS ENDED

(dollars in thousands)

MARCH 27, 2016

  

MARCH 29, 2015

Income from operations (1)

$

117,839

    

$

128,268

  

Operating income margin (1)

11.3

%

  

12.1

%

Adjustments:

      

Restaurant impairments and closing costs (2)

2,224

    

1,336

  

Restaurant relocations, remodels and related costs (3)

640

    

1,169

  

Severance (4)

539

    

—

  

Transaction-related expenses (5)

334

    

—

  

Adjusted income from operations (1)

$

121,576

    

$

130,773

  

Adjusted operating income margin (1)

11.6

%

  

12.3

%
       
       

International Segment

      

(dollars in thousands)

      

Income from operations

$

11,349

    

$

8,879

  

Operating income margin

9.4

%

  

6.3

%

Adjustments:

      

Restaurant impairments and closing costs (6)

(433)

    

7,534

  

Purchased intangibles amortization (7)

860

    

1,283

  

Adjusted income from operations

$

11,776

    

$

17,696

  

Adjusted operating income margin

9.8

%

  

12.6

%

_________________

(1)

During the first quarter of 2016 we recast our segment reporting. See the "Segment Recast" discussion above for additional details.

(2)

Represents expenses incurred for the Bonefish Restructuring in 2016 and the Domestic Restructuring Initiative in 2015.

(3)

Represents asset impairment charges and accelerated depreciation incurred in connection with our relocation and remodel programs.

(4)

Relates to severance expense incurred as a result of our organizational realignment.

(5)

Relates to costs incurred with our sale-leaseback initiative.

(6)

Represents expenses incurred primarily for the International Restaurant Closure Initiative.

(7)

Represents non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations.

TABLE EIGHT

BLOOMIN' BRANDS, INC.

IMPACT OF FOREIGN CURRENCY

(UNAUDITED)
 

Q1 2016
 

ADJUSTED (1)

  

CONSTANT CURRENCY (2)

Adjusted income from operations growth

(15.8)

%

  

(12.0)

%

Adjusted net income growth

(18.7)

%

  

(14.7)

%

Adjusted Diluted earnings per share growth

(13.0)

%

  

(9.3)

%

_________________

(1)

See reconciliation to U.S. GAAP results in Table Six of this release.

(2)

Results excluding the effect of foreign currency translation, also referred to as constant currency, are calculated by translating current year results at prior year average exchange rates. The Company is primarily exposed to foreign currency fluctuations for the Brazil Real and South Korea Won.

TABLE NINE

BLOOMIN' BRANDS, INC.

COMPARATIVE RESTAURANT INFORMATION

(UNAUDITED)

Number of restaurants (at end of the period):

MARCH 27, 2016

  

MARCH 29, 2015

U.S.

      

Outback Steakhouse

      

Company-owned

649

    

649

  

Franchised

105

    

105

  

Total

754

    

754

  

Carrabba's Italian Grill

      

Company-owned

244

    

244

  

Franchised

3

    

2

  

Total

247

    

246

  

Bonefish Grill

      

Company-owned

205

    

204

  

Franchised

6

    

5

  

Total

211

    

209

  

Fleming's Prime Steakhouse & Wine Bar

      

Company-owned

66

    

66

  

International

      

Company-owned

      

Outback Steakhouse - Brazil (1)

76

    

64

  

Outback Steakhouse - South Korea

74

    

75

  

Other

17

    

10

  

Franchised

57

    

57

  

Total

224

    

206

  

System-wide total

1,502

    

1,481

  

____________________

(1)

The restaurant counts for Brazil are reported as of February 29, 2016 and February 28, 2015, respectively, to correspond with the balance sheet dates of this subsidiary.

TABLE TEN

BLOOMIN' BRANDS, INC.

COMPARABLE RESTAURENT SALES INFORMATION

(UNAUDITED)
 

THIRTEEN WEEKS ENDED
 

MARCH 27,
 2016

  

MARCH 29,
 2015

Year over year percentage change:

      

Comparable restaurant sales (stores open 18 months or more) (1):

      

U.S.

      

Outback Steakhouse

(1.3)

%

  

5.0

%

Carrabba's Italian Grill

(2.0)

%

  

1.9

%

Bonefish Grill

(2.7)

%

  

0.9

%

Fleming's Prime Steakhouse & Wine Bar

1.3

%

  

3.0

%

Combined U.S.

(1.5)

%

  

3.6

%

International

      

Outback Steakhouse - Brazil (2)

8.8

%

  

6.2

%

Outback Steakhouse - South Korea

(5.6)

%

  

(3.0)

%
       

Traffic:

      

U.S.

      

Outback Steakhouse

(3.0)

%

  

0.5

%

Carrabba's Italian Grill

1.5

%

  

3.3

%

Bonefish Grill

(5.2)

%

  

(1.8)

%

Fleming's Prime Steakhouse & Wine Bar

1.2

%

  

0.7

%

Combined U.S.

(2.2)

%

  

0.7

%

International

      

Outback Steakhouse - Brazil

0.3

%

  

1.1

%

Outback Steakhouse - South Korea

(3.9)

%

  

(4.6)

%
       

Average check per person increases (decreases) (3):

      

U.S.

      

Outback Steakhouse

1.7

%

  

4.5

%

Carrabba's Italian Grill

(3.5)

%

  

(1.4)

%

Bonefish Grill

2.5

%

  

2.7

%

Fleming's Prime Steakhouse & Wine Bar

0.1

%

  

2.3

%

Combined U.S.

0.7

%

  

2.9

%

International

      

Outback Steakhouse - Brazil

7.3

%

  

4.9

%

Outback Steakhouse - South Korea

(1.7)

%

  

1.6

%

____________________

(1)

Comparable restaurant sales exclude the effect of fluctuations in foreign currency rates. Relocated international restaurants closed more than 30 days and relocated U.S. restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.

(2)

Includes the trading day impact from calendar period reporting of 1.3% and 0.2% for the thirteen weeks ended March 27, 2016 and March 29, 2015, respectively.

(3)

Average check per person increases (decreases) includes the impact of menu pricing changes, product mix and discounts.

TABLE ELEVEN

BLOOMIN' BRANDS, INC.

COMPARABLE RESTAURENT SALES INFORMATION

(UNAUDITED)
 

THIRTEEN WEEKS ENDED

  
 

MARCH 29,
 2015

  

JUNE 28,
 2015

  

SEPTEMBER 27,
 2015

  

DECEMBER 27,
 2015

  

FISCAL YEAR

2015

Year over year percentage change:

                            

Comparable restaurant sales

(stores open 18 months or more) (1):

                            

U.S.

                            

Outback Steakhouse

5.0

%

  

4.0

%

  

0.1

%

  

(2.2)

%

  

1.8

%

Carrabba's Italian Grill

1.9

%

  

0.9

%

  

(2.0)

%

  

(4.0)

%

  

(0.7)

%

Bonefish Grill

0.9

%

  

(4.6)

%

  

(6.1)

%

  

(5.4)

%

  

(3.3)

%

Fleming's Prime Steakhouse & Wine Bar

3.0

%

  

3.2

%

  

(0.6)

%

  

(0.3)

%

  

1.3

%

Combined U.S.

3.6

%

  

2.0

%

  

(1.3)

%

  

(2.8)

%

  

0.5

%

International

                  

Outback Steakhouse - Brazil (2)

6.2

%

  

3.4

%

  

6.1

%

  

7.3

%

  

6.3

%

Outback Steakhouse - South Korea

(3.0)

%

  

(11.8)

%

  

6.0

%

  

0.0

%

  

(2.0)

%
                           

Traffic:

                          

U.S.

                          

Outback Steakhouse

0.5

%

  

(0.8)

%

  

(0.9)

%

  

(4.9)

%

  

(1.5)

%

Carrabba's Italian Grill

3.3

%

  

1.4

%

  

(3.7)

%

  

(1.9)

%

  

(0.1)

%

Bonefish Grill

(1.8)

%

  

(7.8)

%

  

(8.5)

%

  

(8.4)

%

  

(6.2)

%

Fleming's Prime Steakhouse & Wine Bar

0.7

%

  

3.1

%

  

(2.3)

%

  

(2.6)

%

  

(0.2)

%

Combined U.S.

0.7

%

  

(1.1)

%

  

(2.6)

%

  

(4.6)

%

  

(1.8)

%

International

                      

Outback Steakhouse - Brazil

1.1

%

  

(0.7)

%

  

0.6

%

  

(0.6)

%

  

0.5

%

Outback Steakhouse - South Korea

(4.6)

%

  

(12.6)

%

  

13.8

%

  

4.0

%

  

0.3

%
                             

Average check per person increases (decreases) (3):

                            

U.S.

                            

Outback Steakhouse

4.5

%

  

4.8

%

  

1.0

%

  

2.7

%

  

3.3

%

Carrabba's Italian Grill

(1.4)

%

  

(0.5)

%

  

1.7

%

  

(2.1)

%

  

(0.6)

%

Bonefish Grill

2.7

%

  

3.2

%

  

2.4

%

  

3.0

%

  

2.9

%

Fleming's Prime Steakhouse & Wine Bar

2.3

%

  

0.1

%

  

1.7

%

  

2.3

%

  

1.5

%

Combined U.S.

2.9

%

  

3.1

%

  

1.3

%

  

1.8

%

  

2.3

%

International

                  

Outback Steakhouse - Brazil

4.9

%

  

4.5

%

  

6.2

%

  

7.8

%

  

6.0

%

Outback Steakhouse - South Korea

1.6

%

  

0.8

%

  

(7.8)

%

  

(4.0)

%

  

(2.3)

%

____________________

(1)

Comparable restaurant sales exclude the effect of fluctuations in foreign currency rates. Relocated international restaurants closed more than 30 days and relocated U.S. restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.

(2)

Includes the trading day impact from calendar period reporting of 0.2%, (0.4)%, (0.7)%, 0.1% and (0.2)%  for the thirteen weeks ended March 29, 2015, June 28, 2015, September 27, 2015, December 27, 2015 and fiscal year 2015, respectively.

(3)

Average check per person increases (decreases) includes the impact of menu pricing changes, product mix and discounts.

TABLE TWELVE

BLOOMIN' BRANDS, INC.

SELECTED SEGMENT INFORMATION (1)

(UNAUDITED)
 

THIRTEEN WEEKS ENDED

    
 

MARCH 29,
 2015

  

JUNE 28,
 2015

  

SEPTEMBER 27,
 2015

  

DECEMBER 27,
 2015

  

FISCAL YEAR
2015

Selected Financial Data

(dollars in thousands):

                  

U.S.

                  

Restaurant sales

$

1,056,104

    

$

977,260

    

$

897,280

    

$

926,518

    

$

3,857,162

  

Other revenues

5,910

    

5,718

    

5,173

    

5,780

    

22,581

  

Total revenues

$

1,062,014

    

$

982,978

    

$

902,453

    

$

932,298

    

$

3,879,743

  

Restaurant-level operating margin

18.0

%

  

15.9

%

  

13.8

%

  

15.8

%

  

16.0

%

Income from operations

$

128,268

    

$

96,192

    

$

63,476

    

60,795

    

$

348,731

  

Operating income margin

12.1

%

  

9.8

%

  

7.0

%

  

6.5

%

  

9.0

%
                   

Segment income from operations

                  

U.S.

$

128,268

    

$

96,192

    

$

63,476

    

$

60,795

    

$

348,731

  

International

8,879

    

5,727

    

9,770

    

10,221

    

34,597

  

Total segment income from operations

  

137,147

      

101,919

      

73,246

      

71,016

      

383,328

  

Unallocated corporate operating expense

(39,446)

    

(39,334)

    

(34,522)

    

(39,101)

    

(152,403)

  

Total income from operations

$

97,701

    

$

62,585

    

$

38,724

    

$

31,915

    

$

230,925

  

_________________

(1)

During the first quarter of 2016, we recast our segment reporting. See the "Segment Recast" discussion above for additional details.

TABLE THIRTEEN

BLOOMIN' BRANDS, INC.

SELECTED SEGMENT INFORMATION - NON-GAAP RECONCILIATION (1)

(UNAUDITED)
 

THIRTEEN WEEKS ENDED

    

(dollars in thousands)

MARCH 29,
2015

  

JUNE 28,
 2015

  

SEPTEMBER 27,
2015

  

DECEMBER 27,
2015

  

FISCAL YEAR
2015

Reconciliation of adjusted income
from operations:

                  

U.S.

                  

Income from operations

$

128,268

    

$

96,192

    

$

63,476

    

$

60,795

    

$

348,731

  

Operating income margin

12.1

%

  

9.8

%

  

7.0

%

  

6.5

%

  

9.0

%

Adjustments:

                  

Restaurant impairments and closing costs (2)

1,336

    

—

    

(20)

    

24,632

    

25,948

  

Restaurant relocations, remodels and related costs (3)

1,169

    

122

    

1,872

    

462

    

3,625

  

Adjusted income from operations

$

130,773

    

$

96,314

    

$

65,328

    

$

85,889

    

$

378,304

  

Adjusted operating income margin

12.3

%

  

9.8

%

  

7.2

%

  

9.2

%

  

9.8

%

_________________

(1)

During the first quarter of 2016, we recast our segment reporting. See the "Segment Recast" discussion above for additional details.

(2)

Represents impairments and expenses incurred for the Domestic Restaurant Closure Initiative and Bonefish Restructuring.

(3)

Represents asset impairment charges and accelerated depreciation incurred in connection with our relocation and remodel programs.

TABLE FOURTEEN

BLOOMIN' BRANDS, INC.

SELECTED SEGMENT INFORMATION - NON-GAAP RECONCILIATION (1)

(UNAUDITED)
 

THIRTEEN WEEKS ENDED

  

FISCAL YEAR
 

MARCH 29, 2015

  

JUNE 28, 2015

  

SEPTEMBER 27, 2015

  

DECEMBER 27, 2015

  

2015

Restaurant-level
operating margin:

U.S GAAP

  

ADJUSTED

  

U.S GAAP

  

ADJUSTED

  

U.S GAAP

  

ADJUSTED

  

U.S GAAP

  

ADJUSTED

  

U.S GAAP

  

ADJUSTED

U.S.

18.0

%

  

18.0

%

  

15.9

%

  

15.9

%

  

13.8

%

  

13.8

%

  

15.8

%

  

15.8

%

  

16.0

%

  

16.0

%

_________________

(1)

During the first quarter of 2016, we recast our segment reporting. See the "Segment Recast" discussion above for additional details.