Brinker International, Inc. (Brinker) owns, develops, operates and franchises the Chili’s Grill & Bar (Chili’s) and Maggiano’s Little Italy (Maggiano’s) restaurant brands. At June 30, 2010, we owned, operated, or franchised 1,550 restaurants in the United States and 29 countries and two territories outside of the United States. During the fiscal year ended June 29, 2011 (fiscal 2011), the Company’s international franchisees and joint venture partners opened 26 Chili’s restaurants. As of June 29, 2011, the Company’s system of Company-owned and franchised restaurants included 1,579 restaurants located in 50 states, and Washington, D.C. It also have restaurants in the United States territories of Guam and Puerto Rico and the countries of Bahrain, Canada, Dominican Republic, Ecuador, Egypt, El Salvador, Germany, Guatemala, Honduras, India, Indonesia, Japan, Jordan, Kuwait, Lebanon, Malaysia, Mexico, Oman, Peru, Philippines, Portugal, Qatar, Russia, Saudi Arabia, Singapore, South Korea, Syria, Taiwan, United Arab Emirates and Venezuela.
Chili’s Grill & Bar
- Chili’s operates in the Bar and Grill category of casual dining. The Company has operations worldwide, with locations in 30 foreign countries and two United States territories. Chili’s menu features items, such as Baby Back Ribs smoked in-house, Big Mouth Burgers, Sizzling Fajitas, hand-battered Chicken Crispers and house-made Chips and Salsa. The all-day menu offers a range of appetizers, entrees and desserts. A special lunch section is available on weekdays. In addition to its flavorful food, Chili’s offers a line of alcoholic beverages available from the bar, including Margaritas and draft beer. In fiscal 2011, food and non-alcoholic beverage sales constituted approximately 86.4% of Chili’s total restaurant revenues, with alcoholic beverage sales accounted for the remaining 13.6%.
Maggiano’s Little Italy
- Maggiano’s is a full-service, casual dining Italian restaurant brand. Its Maggiano’s restaurants feature individual and family-style menus, and its restaurants also have facilities designed to host party business or social events. It has lunch and dinner menu offering chef-prepared, classic Italian-American fare in the form of appetizers, entrees with portions of pasta, chicken, seafood, veal and prime steaks, and desserts. The Company’s Maggiano’s restaurants also offer a range of alcoholic beverages, including wines. In addition, Maggiano’s offers a full carryout menu, as well as local delivery services. In fiscal 2011, food and non-alcoholic beverage sales constituted approximately 82.5% of Maggiano’s total restaurant revenues, with alcoholic beverage sales accounted for the remaining 17.5%. Sales from events at its banquet facilities made up 19.5% of the Company’s total restaurant revenues in fiscal 2011.
- Menu items, services offered and food preparation are virtually identical at each restaurant and our targeted customer is consistent across each brand. We maintain a centralized purchasing department which manages all purchasing and distribution for our restaurants. In addition, contracts for our food suppliers are negotiated at a consolidated level in order to secure the best prices and maintain similar quality across all our brands.
- During the fiscal 2010, interest costs capitalized was approximately $0.1 million for construction period and advertising costs, net of advertising contributions from franchisees was $80.6 million.
- Our Board of Directors is authorized to provide for the issuance of 1.0 million preferred shares with a par value of $1.00 per share and as of June 30, 2010, no preferred shares were issued. We have also authorized a total of $2,310.0 million of share repurchases. We repurchased approximately 1.0 million shares of our common stock for $20.0 million during fiscal 2010. As of June 30, 2010, approximately $290 million was available under our share repurchase authorizations.
- We paid dividends of $34.4 million or $0.33 per share to common stock shareholders during fiscal 2010. A fourth quarter dividend of $0.14 per share was declared in March 2010 and pain in July 2010.
- During fiscal 2010, we sold 21 restaurants to a franchisee for $19.0 million in cash and recorded a gain of $2.8 million gain in other gains and charges in the consolidated statement of income.
- In fiscal 2010, we recorded $13.4 million in charges primarily related to long-lived asset impairments resulting from the decision to close nine underperforming restaurants.
- During fiscal 2010, we repaid $190.0 million on our three-year original $400.0 million term loan agreement which was set to expire in October 2010. In June 2010, we refinanced the outstanding balance of $200.0 million by entering a five year term loan agreement. Based on our current credit rating. We are paying interest at a rate of LIBOR plus 2.75% (3.10% as of June 30, 2010).