(Mark
One)
|
|
[X]
|
Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
For
the quarterly period ended March
31, 2006
|
|
or
|
|
[
]
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
For
the transition period from ______ to
______
|
DELAWARE
|
59-3061413
|
||
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
||
|
PART
I — FINANCIAL INFORMATION
|
|
|
|
Page
No.
|
Item 1.
|
Consolidated
Financial Statements (Unaudited):
|
|
|
5
|
|
|
7
|
|
|
8
|
|
|
10
|
|
Item 2.
|
31
|
|
Item 3.
|
47
|
|
Item 4.
|
48
|
|
|
PART
II —
OTHER INFORMATION
|
|
Item 1.
|
52
|
|
Item
1A.
|
53
|
|
Item
2.
|
53
|
|
Item 6.
|
55
|
|
56
|
MARCH
31,
|
DECEMBER
31,
|
||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
ASSETS
|
|||||||
Current
Assets
|
|||||||
Cash
and cash equivalents
|
$
|
61,368
|
$
|
84,876
|
|||
Short-term
investments
|
1,832
|
1,828
|
|||||
Inventories
|
68,721
|
68,468
|
|||||
Deferred
income tax assets
|
43,131
|
43,697
|
|||||
Other
current assets
|
70,108
|
50,823
|
|||||
Total
current assets
|
245,160
|
249,692
|
|||||
Property,
fixtures and equipment, net
|
1,441,189
|
1,387,700
|
|||||
Investments
in and advances to unconsolidated affiliates, net
|
22,774
|
21,397
|
|||||
Deferred
income tax asset
|
49,499
|
36,180
|
|||||
Goodwill
|
116,136
|
112,627
|
|||||
Intangible
assets
|
11,415
|
11,562
|
|||||
Other
assets
|
137,201
|
142,114
|
|||||
Notes
receivable collateral for franchisee guarantee
|
31,150
|
31,150
|
|||||
$
|
2,054,524
|
$
|
1,992,422
|
MARCH
31,
|
DECEMBER
31,
|
||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
Liabilities
|
|||||||
Accounts
payable
|
$
|
85,398
|
$
|
98,020
|
|||
Sales
taxes payable
|
18,772
|
17,761
|
|||||
Accrued
expenses
|
143,633
|
135,660
|
|||||
Current
portion of partner deposit and accrued buyout liability
|
23,988
|
15,175
|
|||||
Unearned
revenue
|
114,460
|
170,785
|
|||||
Income
taxes payable
|
19,948
|
695
|
|||||
Current
portion of long-term debt
|
71,444
|
63,442
|
|||||
Total
current liabilities
|
477,643
|
501,538
|
|||||
Partner
deposit and accrued buyout liability
|
78,149
|
72,900
|
|||||
Deferred
rent
|
63,994
|
61,509
|
|||||
Long-term
debt
|
129,200
|
90,623
|
|||||
Guaranteed
debt of franchisee
|
31,283
|
31,283
|
|||||
Other
long-term liabilities
|
45,133
|
45,890
|
|||||
Total
liabilities
|
825,402
|
803,743
|
|||||
Commitments
and contingencies
|
|||||||
Minority
interests in consolidated entities
|
41,247
|
44,259
|
|||||
Stockholders'
Equity
|
|||||||
Common
stock, $0.01 par value, 200,000 shares authorized; 78,750
and
|
|||||||
78,750
shares issued; 75,483 and 74,854 shares outstanding as
|
|||||||
of
March 31, 2006 and December 31, 2005, respectively
|
788
|
788
|
|||||
Additional
paid-in capital
|
258,301
|
293,368
|
|||||
Retained
earnings
|
1,064,840
|
1,057,944
|
|||||
Accumulated
other comprehensive income
|
2,054
|
384
|
|||||
Unearned
compensation related to outstanding restricted stock
|
-
|
(40,858
|
)
|
||||
1,325,983
|
1,311,626
|
||||||
Less
treasury stock, 3,267 and 3,896 shares at March 31, 2006
|
|||||||
and
December 31, 2005, respectively, at cost
|
(138,108
|
)
|
(167,206
|
)
|
|||
Total
stockholders’ equity
|
1,187,875
|
1,144,420
|
|||||
$
|
2,054,524
|
$
|
1,992,422
|
THREE
MONTHS ENDED
|
|||||||
MARCH
31,
|
|||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
Revenues
|
|||||||
Restaurant
sales
|
$
|
986,734
|
$
|
893,362
|
|||
Other
revenues
|
5,626
|
5,081
|
|||||
Total
revenues
|
992,360
|
898,443
|
|||||
Costs
and expenses
|
|||||||
Cost
of sales
|
359,700
|
327,985
|
|||||
Labor
and other related
|
269,975
|
227,237
|
|||||
Other
restaurant operating
|
216,429
|
180,110
|
|||||
Depreciation
and amortization
|
35,505
|
29,589
|
|||||
General
and administrative
|
54,122
|
49,841
|
|||||
Provision
for impaired assets and restaurant closings
|
2,532
|
951
|
|||||
Income
from operations of unconsolidated affiliates
|
(628
|
)
|
97
|
||||
Total
costs and expenses
|
937,635
|
815,810
|
|||||
Income
from operations
|
54,725
|
82,633
|
|||||
Other
income (expense), net
|
(328
|
)
|
(934
|
)
|
|||
Interest
income
|
557
|
368
|
|||||
Interest
expense
|
(2,371
|
)
|
(1,158
|
)
|
|||
Income
before provision for income taxes and
|
|||||||
elimination
of minority interest
|
52,583
|
80,909
|
|||||
Provision
for income taxes
|
16,724
|
27,160
|
|||||
Income
before elimination of minority interest
|
35,859
|
53,749
|
|||||
Elimination
of minority interest
|
3,628
|
3,398
|
|||||
Net
income
|
$
|
32,231
|
$
|
50,351
|
|||
Basic
earnings per common share
|
|||||||
Net
income
|
$
|
0.44
|
$
|
0.68
|
|||
Basic
weighted average number of shares outstanding
|
74,083
|
73,800
|
|||||
Diluted
earnings per common share
|
|||||||
Net
income
|
$
|
0.42
|
$
|
0.65
|
|||
Diluted
weighted average number of shares outstanding
|
77,111
|
77,267
|
|||||
Cash
dividends per common share
|
$
|
0.13
|
$
|
0.13
|
THREE
MONTHS ENDED
|
|||||||
MARCH
31,
|
|||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
income
|
$
|
32,231
|
$
|
50,351
|
|||
Adjustments
to reconcile net income to cash provided by operating
activities:
|
|||||||
Depreciation
and amortization
|
35,505
|
29,589
|
|||||
Provision
for impaired assets and restaurant closings
|
2,532
|
951
|
|||||
Stock-based
compensation expense
|
19,969
|
2,277
|
|||||
Income
tax benefit credited to equity
|
5,239
|
3,686
|
|||||
Excess
income tax benefits from stock-based compensation
|
(3,047
|
)
|
-
|
||||
Minority
interest in consolidated entities’ income
|
3,628
|
3,398
|
|||||
(Income)
loss from operations of unconsolidated affiliates
|
(628
|
)
|
97
|
||||
Change
in deferred income taxes
|
(12,753
|
)
|
(9,805
|
)
|
|||
Increase
in deferred rent
|
2,485
|
3,254
|
|||||
Loss
on disposal of property, fixtures and equipment
|
284
|
1,783
|
|||||
Change
in assets and liabilities, net of effects of acquisitions:
|
|||||||
(Increase)
decrease in inventories
|
(42
|
)
|
6,210
|
||||
Increase
in other current assets
|
(19,175
|
)
|
(1,065
|
)
|
|||
Increase
in other assets
|
(634
|
)
|
(2,548
|
)
|
|||
(Decrease)
increase in accounts payable, sales taxes payable and accrued
expenses
|
(3,762
|
)
|
18,500
|
||||
Increase
in partner deposit and accrued buyout liability
|
789
|
2,534
|
|||||
Decrease
in unearned revenue
|
(56,325
|
)
|
(52,670
|
)
|
|||
Increase
in income taxes payable
|
19,253
|
28,868
|
|||||
Decrease
in other long-term liabilities
|
(757
|
)
|
-
|
||||
Net
cash provided by operating activities
|
24,792
|
85,410
|
|||||
Cash
flows used in investing activities:
|
|||||||
Purchase
of investment securities
|
(1,934
|
)
|
-
|
||||
Maturities
of investment securities
|
1,930
|
350
|
|||||
Cash
paid for acquisitions of businesses, net of cash acquired
|
(7,456
|
)
|
(5,200
|
)
|
|||
Capital
expenditures
|
(85,769
|
)
|
(64,796
|
)
|
|||
Proceeds
from the sale of property, fixtures and equipment
|
4,940
|
2,638
|
|||||
Payments
from unconsolidated affiliates
|
141
|
71
|
|||||
Investments
in, advances to and distributions to unconsolidated affiliates
|
-
|
(679
|
)
|
||||
Net
cash used in investing activities
|
$
|
(88,148
|
)
|
$
|
(67,616
|
)
|
THREE
MONTHS ENDED
|
|||||||
MARCH
31,
|
|||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
Cash
flows provided by (used in) financing activities:
|
|||||||
Proceeds
from issuance of long-term debt
|
$
|
67,367
|
$
|
29,869
|
|||
Proceeds
from minority interest contributions
|
881
|
1,130
|
|||||
Distributions
to minority interest
|
(7,521
|
)
|
(3,962
|
)
|
|||
Repayments
of long-term debt
|
(20,788
|
)
|
(11,785
|
)
|
|||
Dividends
paid
|
(9,779
|
)
|
(9,601
|
)
|
|||
Excess
income tax benefits from stock-based compensation
|
3,047
|
-
|
|||||
Payments
for purchase of treasury stock
|
(11,576
|
)
|
(17,868
|
)
|
|||
Proceeds
from reissuance of treasury stock
|
18,217
|
9,807
|
|||||
Net
cash provided by (used in) financing activities
|
39,848
|
(2,410
|
)
|
||||
Net
(decrease) increase in cash and cash equivalents
|
(23,508
|
)
|
15,384
|
||||
Cash
and cash equivalents at the beginning of the period
|
84,876
|
87,977
|
|||||
Cash
and cash equivalents at the end of the period
|
$
|
61,368
|
$
|
103,361
|
|||
Supplemental
disclosures of cash flow information:
|
|||||||
Cash
paid for interest
|
$
|
2,384
|
$
|
1,071
|
|||
Cash
paid for income taxes, net of refunds
|
5,267
|
2,833
|
|||||
Supplemental
disclosures of non-cash items:
|
|||||||
Purchase
of employee partners' interests in cash flows of their
restaurants
|
$
|
2,751
|
$
|
636
|
MARCH
31,
|
DECEMBER
31,
|
||||||||||||
2006
|
2006
|
2005
|
2005
|
||||||||||
As
previously reported
|
As
restated
|
As
previously reported
|
As
restated
|
||||||||||
Selected
Balance Sheet Data:
|
|||||||||||||
Deferred
income tax asset
|
$
|
17,201
|
$
|
43,131
|
$
|
17,719
|
$
|
43,697
|
|||||
Other
current assets
|
71,068
|
70,108
|
51,746
|
50,823
|
|||||||||
Total
current assets
|
220,190
|
245,160
|
224,637
|
249,692
|
|||||||||
Property,
fixtures and equipment, net
|
1,443,244
|
1,441,189
|
1,389,605
|
1,387,700
|
|||||||||
Deferred
income tax asset
|
46,201
|
49,499
|
33,073
|
36,180
|
|||||||||
Goodwill
|
114,827
|
116,136
|
111,318
|
112,627
|
|||||||||
Total
assets
|
2,027,002
|
2,054,524
|
1,964,856
|
1,992,422
|
|||||||||
Accrued
expenses
|
142,407
|
143,633
|
130,583
|
135,660
|
|||||||||
Unearned
revenue
|
49,258
|
114,460
|
110,448
|
170,785
|
|||||||||
Total
current liabilities
|
411,215
|
477,643
|
436,124
|
501,538
|
|||||||||
Partner
deposit and accrued buyout liability
|
78,149
|
78,149
|
71,591
|
72,900
|
|||||||||
Deferred
rent
|
57,379
|
63,994
|
55,206
|
61,509
|
|||||||||
Total
liabilities
|
752,359
|
825,402
|
730,717
|
803,743
|
|||||||||
Minority
interests in consolidated entities
|
44,472
|
41,247
|
45,573
|
44,259
|
|||||||||
Additional
paid-in capital
|
296,274
|
258,301
|
291,035
|
293,368
|
|||||||||
Retained
earnings
|
1,112,012
|
1,064,840
|
1,104,423
|
1,057,944
|
|||||||||
Treasury
stock
|
(180,957
|
)
|
(138,108
|
)
|
(167,206
|
)
|
(167,206
|
)
|
|||||
Total
stockholders' equity
|
1,230,171
|
1,187,875
|
1,188,566
|
1,144,420
|
|||||||||
Total
liabilities and stockholders' equity
|
2,027,002
|
2,054,524
|
1,964,856
|
1,992,422
|
THREE
MONTHS ENDED
|
|||||||||||||
MARCH
31,
|
|||||||||||||
2006
|
2006
|
2005
|
2005
|
||||||||||
As
previously reported
|
As
restated
|
As
previously reported
|
As
restated
|
||||||||||
Selected
Statement of Income Data:
|
|||||||||||||
Restaurant
sales
|
$
|
984,399
|
$
|
986,734
|
$
|
890,041
|
$
|
893,362
|
|||||
Total
revenues
|
990,025
|
992,360
|
895,122
|
898,443
|
|||||||||
Cost
of sales
|
358,245
|
359,700
|
325,170
|
327,985
|
|||||||||
Labor
and other related
|
269,352
|
269,975
|
227,237
|
227,237
|
|||||||||
Other
restaurant operating
|
215,360
|
216,429
|
178,882
|
180,110
|
|||||||||
Depreciation
and amortization
|
35,356
|
35,505
|
29,450
|
29,589
|
|||||||||
Provision
for impaired assets and restaurant closings
|
2,532
|
2,532
|
776
|
951
|
|||||||||
Total
costs and expenses
|
934,339
|
937,635
|
811,453
|
815,810
|
|||||||||
Income
from operations
|
55,686
|
54,725
|
83,669
|
82,633
|
|||||||||
Income
before provision for income taxes and elimination of
|
|||||||||||||
minority
interest
|
53,544
|
52,583
|
81,945
|
80,909
|
|||||||||
Provision
for income taxes
|
16,866
|
16,724
|
27,559
|
27,160
|
|||||||||
Income
before elimination of minority interest
|
36,678
|
35,859
|
54,386
|
53,749
|
|||||||||
Elimination
of minority interest
|
3,639
|
3,628
|
3,428
|
3,398
|
|||||||||
Net
income
|
33,039
|
32,231
|
50,958
|
50,351
|
|||||||||
Basic
earnings per common share
|
$
|
0.45
|
$
|
0.44
|
$
|
0.69
|
$
|
0.68
|
|||||
Diluted
earnings per common share
|
$
|
0.43
|
$
|
0.42
|
$
|
0.66
|
$
|
0.65
|
THREE
MONTHS ENDED
|
|||||||||||||
MARCH
31,
|
|||||||||||||
2006
|
2006
|
2005
|
2005
|
||||||||||
As
previously reported
|
As
restated
|
As
previously reported
|
As
restated
|
||||||||||
Selected
Cash Flow Data:
|
|||||||||||||
Net
income
|
$
|
33,039
|
$
|
32,231
|
$
|
50,958
|
$
|
50,351
|
|||||
Depreciation
and amortization
|
35,356
|
35,505
|
29,450
|
29,589
|
|||||||||
Provision
for impaired assets and restaurant closings
|
2,532
|
2,532
|
776
|
951
|
|||||||||
Stock-based
compensation expense
|
18,792
|
19,969
|
2,277
|
2,277
|
|||||||||
Minority
interest in consolidated entities’ income
|
3,639
|
3,628
|
3,428
|
3,398
|
|||||||||
Change
in deferred income taxes
|
(12,610
|
)
|
(12,753
|
)
|
(9,406
|
)
|
(9,805
|
)
|
|||||
Increase
in deferred rent
|
2,173
|
2,485
|
2,568
|
3,254
|
|||||||||
Increase
in other current assets
|
(19,212
|
)
|
(19,175
|
)
|
(1,246
|
)
|
(1,065
|
)
|
|||||
Increase
in other assets
|
(634
|
)
|
(634
|
)
|
(1,695
|
)
|
(2,548
|
)
|
|||||
Increase
(decrease) in accounts payable, sales taxes payable
|
|||||||||||||
and
accrued expenses
|
89
|
(3,762
|
)
|
22,807
|
18,500
|
||||||||
Increase
in partner deposit and accrued buyout liability
|
616
|
789
|
2,631
|
2,534
|
|||||||||
Decrease
in unearned revenue
|
(61,190
|
)
|
(56,325
|
)
|
(58,229
|
)
|
(52,670
|
)
|
|||||
Net
cash provided by operating activities
|
22,892
|
24,792
|
84,963
|
85,410
|
|||||||||
Investments
in, advances to and distributions to
|
|||||||||||||
unconsolidated
affiliates
|
-
|
-
|
(72
|
)
|
(679
|
)
|
|||||||
Net
cash used in investing activities
|
(88,148
|
)
|
(88,148
|
)
|
(67,124
|
)
|
(67,616
|
)
|
|||||
Distributions
to minority interest
|
(5,621
|
)
|
(7,521
|
)
|
(4,007
|
)
|
(3,962
|
)
|
|||||
Net
cash provided by (used in) financing activities
|
41,748
|
39,848
|
(2,455
|
)
|
(2,410
|
)
|
THREE
MONTHS ENDED
|
||||
MARCH
31,
|
||||
2005
|
||||
(restated)
|
||||
Net
income
|
$
|
50,351
|
||
Stock-based
employee compensation expense included in net income, net of related
taxes
|
1,380
|
|||
Total
stock-based employee compensation expense determined
|
||||
under
fair value based method, net of related taxes
|
(4,662
|
)
|
||
Pro
forma net income
|
$
|
47,069
|
||
Earnings
per common share:
|
||||
Basic
|
$
|
0.68
|
||
Basic
- pro forma
|
$
|
0.64
|
||
Diluted
|
$
|
0.65
|
||
Diluted
- pro forma
|
$
|
0.61
|
·
|
25%
of the then total account balance will be distributed five years
after the
Company contribution is made (which generally occurs at the end of
the
five-year employment term);
|
·
|
an
additional 25% of the account (i.e., one-third of the remaining account
balance) will be distributed seven years after the Company contribution
is
made; and
|
·
|
the
remaining account balance will be distributed 10 years after the
Company
contribution is made.
|
WEIGHTED-
|
|||||||||||||
|
WEIGHTED-
|
AVERAGE
|
|||||||||||
|
|
AVERAGE
|
REMAINING
|
AGGREGATE
|
|||||||||
|
|
EXERCISE
|
CONTRACTUAL
|
INTRINSIC
|
|||||||||
|
OPTIONS
|
PRICE
|
LIFE
(YEARS)
|
VALUE
|
|||||||||
Outstanding
at December 31, 2005
|
16,643
|
$
|
32.25
|
||||||||||
Granted
|
-
|
-
|
|||||||||||
Exercised
|
(723
|
)
|
25.08
|
||||||||||
Forfeited
|
(136
|
)
|
38.68
|
||||||||||
Outstanding
at March 31, 2006
|
15,784
|
$
|
32.52
|
8.9
|
$
|
182,590
|
|||||||
Exercisable
at March 31, 2006
|
2,242
|
$
|
25.56
|
4.9
|
$
|
41,343
|
|||||||
Fully
vested, non-exercisable at March 31, 2006
|
8,790
|
$
|
32.40
|
10.8
|
$
|
102,971
|
NUMBER
OF RESTRICTED SHARE AWARDS
|
WEIGHTED
AVERAGE FAIR VALUE PER AWARD
|
||||||
Restricted
share awards outstanding at December 31, 2005
|
1,044
|
$
|
41.54
|
||||
Granted
|
101
|
44.38
|
|||||
Vested
|
-
|
-
|
|||||
Forfeited
|
(7
|
)
|
40.67
|
||||
Restricted
share awards outstanding at March 31, 2006
|
1,138
|
$
|
41.79
|
MARCH
31,
|
DECEMBER
31,
|
||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
Prepaid
expenses
|
$
|
25,336
|
$
|
16,625
|
|||
Accounts
receivable
|
28,337
|
19,396
|
|||||
Accounts
receivable - vendors
|
12,932
|
9,874
|
|||||
Accounts
receivable - franchisees
|
456
|
1,777
|
|||||
Deposits
|
2,547
|
2,651
|
|||||
Other
current assets
|
500
|
500
|
|||||
$
|
70,108
|
$
|
50,823
|
MARCH
31,
|
DECEMBER
31,
|
||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
Land
|
$
|
204,130
|
$
|
200,394
|
|||
Buildings
and building improvements
|
705,783
|
689,056
|
|||||
Furniture
and fixtures
|
247,103
|
231,608
|
|||||
Equipment
|
519,035
|
498,018
|
|||||
Leasehold
improvements
|
359,826
|
345,640
|
|||||
Construction
in progress
|
82,332
|
68,878
|
|||||
Accumulated
depreciation
|
(677,020
|
)
|
(645,894
|
)
|
|||
$
|
1,441,189
|
$
|
1,387,700
|
December
31, 2005, as restated
|
$
|
112,627
|
||
Acquisitions
(see Note 11 of Notes to Unaudited Consolidated Financial Statements)
|
3,509
|
|||
March
31, 2006, as restated
|
$
|
116,136
|
WEIGHTED
AVERAGE
|
||||||||||
AMORTIZATION
|
MARCH
31,
|
DECEMBER
31,
|
||||||||
PERIOD
(YEARS)
|
2006
|
2005
|
||||||||
Trademarks
(gross)
|
24
|
$
|
8,344
|
$
|
8,344
|
|||||
Less:
accumulated amortization
|
(599
|
)
|
(511
|
)
|
||||||
Net
trademarks
|
7,745
|
7,833
|
||||||||
Trade
dress (gross)
|
15
|
777
|
777
|
|||||||
Less:
accumulated amortization
|
(84
|
)
|
(72
|
)
|
||||||
Net
trade dress
|
693
|
705
|
||||||||
Favorable
leases (gross, lives ranging from 2 to 24 years)
|
20
|
3,224
|
3,224
|
|||||||
Less:
accumulated amortization
|
(247
|
)
|
(200
|
)
|
||||||
Net
favorable leases
|
2,977
|
3,024
|
||||||||
Intangible
assets, less total accumulated amortization of $930
|
||||||||||
and
$783 at March 31, 2006 and December 31, 2005, respectively
|
22
|
$
|
11,415
|
$
|
11,562
|
MARCH
31,
|
DECEMBER
31,
|
||||||
2006
|
2005
|
||||||
Other
assets
|
$
|
61,461
|
$
|
59,921
|
|||
Insurance
receivable (see Notes 9 and 13)
|
40,713
|
41,696
|
|||||
Liquor
licenses, net of accumulated amortization of $5,238 and $5,037 at
March
31, 2006
|
|||||||
and
December 31, 2005, respectively
|
15,691
|
15,728
|
|||||
Deferred
license fee
|
2,136
|
2,136
|
|||||
Assets
held for sale
|
17,200
|
22,633
|
|||||
$
|
137,201
|
$
|
142,114
|
MARCH
31,
|
DECEMBER
31,
|
||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
Accrued
payroll and other compensation
|
$
|
50,377
|
$
|
53,709
|
|||
Accrued
insurance
|
33,781
|
29,801
|
|||||
Other
accrued expenses
|
59,475
|
52,150
|
|||||
$
|
143,633
|
$
|
135,660
|
MARCH
31,
|
DECEMBER
31,
|
||||||
2006
|
2005
|
||||||
Revolving
lines of credit, uncollateralized, interest rates ranging from 5.13%
to
7.75% at
|
|||||||
March
31, 2006 and 5.00% to 5.21% at December 31, 2005
|
$
|
118,000
|
$
|
73,000
|
|||
Outback
Korea notes payable, interest rates ranging from 4.95% to 6.12%
at
|
|||||||
March
31, 2006 and 4.95% to 6.06% at December 31, 2005
|
48,937
|
46,670
|
|||||
Outback
Japan notes payable, uncollateralized, interest rates ranging from
0.80%
|
|||||||
to
0.86% at March 31, 2006 and 0.86% at December 31, 2005
|
5,512
|
5,085
|
|||||
Outback
Japan revolving lines of credit, interest rates ranging
from
|
|||||||
0.69%
to 0.77% at March 31, 2006 and December 31, 2005
|
14,206
|
14,636
|
|||||
Other
notes payable, uncollateralized, interest rates ranging
from
|
|||||||
2.07%
to 7.00% at March 31, 2006 and December 31, 2005
|
7,739
|
8,424
|
|||||
Sale-leaseback
obligation
|
6,250
|
6,250
|
|||||
Guaranteed
debt of franchisee
|
31,283
|
31,283
|
|||||
231,927
|
185,348
|
||||||
Less
current portion
|
(71,444
|
) |
(63,442
|
) | |||
Less
guaranteed debt of franchisee
|
(31,283
|
) |
(31,283
|
) | |||
Long-term
debt
of
OSI Restaurant Partners, Inc.
|
$
|
129,200
|
$
|
90,623
|
CURRENT
|
LONG-TERM
|
|||||||||
TOTAL
|
PORTION
|
PORTION
|
||||||||
Debt
guarantees
|
$
|
33,945
|
$
|
9,445
|
$
|
24,500
|
||||
Amount
outstanding under debt guarantees
|
$
|
32,678
|
$
|
9,445
|
$
|
23,233
|
MARCH
31,
|
DECEMBER
31,
|
||||||
2006
|
2005
|
||||||
Litigation
(See Notes 6 and 13)
|
$
|
39,000
|
$
|
39,000
|
|||
Accrued
insurance
liability
|
5,713
|
6,696
|
|||||
Other
deferred liability
|
420
|
194
|
|||||
$
|
45,133
|
$
|
45,890
|
THREE
MONTHS ENDED
|
|||||||
|
MARCH
31,
|
||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
Net
income
|
$
|
32,231
|
$
|
50,351
|
|||
Basic
weighted average number of common shares outstanding
|
74,083
|
73,800
|
|||||
Basic
earnings per common share
|
$
|
0.44
|
$
|
0.68
|
|||
Effect
of dilutive stock options and contingently issuable shares
|
3,028
|
3,467
|
|||||
Diluted
weighted average number of common shares outstanding
|
77,111
|
77,267
|
|||||
Diluted
earnings per common share
|
$
|
0.42
|
$
|
0.65
|
-
|
Average
unit volumes - a per store average sales amount, which helps us gauge
the
changes in consumer traffic, pricing and development of the
brand;
|
-
|
Operating
margins - store revenues after deduction of the main store-level
operating
costs (including cost of sales, restaurant operating expenses and
labor
and related costs);
|
-
|
System-wide
sales - a total sales volume for all Company-owned, franchise and
unconsolidated joint venture stores, regardless of ownership to interpret
the health of our brands; and
|
-
|
Same-store
or comparable sales - a year-over-year comparison of sales volumes
for
stores that are open in both years in order to remove the impact
of new
openings in comparing the operations of existing
stores.
|
THREE
MONTHS ENDED
|
|||||||
MARCH
31,
|
|||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
Revenues
|
|||||||
Restaurant
sales
|
99.4
|
%
|
99.4
|
%
|
|||
Other
revenues
|
0.6
|
0.6
|
|||||
Total
revenues
|
100.0
|
100.0
|
|||||
Costs
and expenses
|
|||||||
Cost
of sales (1)
|
36.5
|
36.7
|
|||||
Labor
and other related (1)
|
27.4
|
25.4
|
|||||
Other
restaurant operating (1)
|
21.9
|
20.2
|
|||||
Depreciation
and amortization
|
3.6
|
3.3
|
|||||
General
and administrative
|
5.5
|
5.5
|
|||||
Provision
for impaired assets and restaurant closings
|
0.3
|
0.1
|
|||||
Income
from operations of unconsolidated affiliates
|
(0.1
|
)
|
*
|
||||
Total
costs and expenses
|
94.5
|
90.8
|
|||||
Income
from operations
|
5.5
|
9.2
|
|||||
Other
income (expense), net
|
(*
|
)
|
(0.1
|
)
|
|||
Interest
income
|
*
|
*
|
|||||
Interest
expense
|
(0.2
|
)
|
(0.1
|
)
|
|||
Income
before provision for income taxes and
|
|||||||
elimination
of minority interest
|
5.3
|
9.0
|
|||||
Provision
for income taxes
|
1.7
|
3.0
|
|||||
Income
before elimination of minority interest
|
3.6
|
6.0
|
|||||
Elimination
of minority interest
|
0.4
|
0.4
|
|||||
Net
income
|
3.2
|
%
|
5.6
|
%
|
(1)
|
As
a percentage of restaurant sales.
|
*
|
Less
than 1/10 of one percent of total
revenues.
|
THREE
MONTHS ENDED
|
|||||||
MARCH
31,
|
|||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
OSI
RESTAURANT PARTNERS, INC. RESTAURANT SALES (in millions):
|
|||||||
Outback
Steakhouses
|
|||||||
Domestic
|
$
|
583
|
$
|
574
|
|||
International
|
76
|
61
|
|||||
Total
|
659
|
635
|
|||||
Carrabba's
Italian Grills
|
162
|
138
|
|||||
Bonefish
Grills
|
73
|
51
|
|||||
Fleming's
Prime Steakhouse and Wine Bars
|
48
|
38
|
|||||
Other
restaurants
|
45
|
31
|
|||||
Total
Company-owned restaurant sales
|
$
|
987
|
$
|
893
|
THREE
MONTHS ENDED
|
|||||||
MARCH
31,
|
|||||||
2006
|
2005
|
||||||
FRANCHISE
AND DEVELOPMENT JOINT VENTURE SALES (in millions) (1):
|
|||||||
Outback
Steakhouses
|
|||||||
Domestic
|
$
|
93
|
$
|
89
|
|||
International
|
27
|
29
|
|||||
Total
|
120
|
118
|
|||||
Bonefish
Grills
|
3
|
3
|
|||||
Total
franchise and development joint venture sales (1)
|
$
|
123
|
$
|
121
|
|||
Income
from franchise and development joint ventures (2)
|
$
|
5
|
$
|
4
|
(1)
|
Franchise
and development joint venture sales are not included in revenues
as
reported in the Unaudited Consolidated Statements of
Income.
|
(2)
|
Represents
the franchise royalty and portion of total income included in the
Unaudited Consolidated Statements of Income in the line items Other
revenues or Income from operations of unconsolidated
affiliates.
|
MARCH
31,
|
|||||||
2006
|
2005
|
||||||
Number
of restaurants (at end of the period):
|
|||||||
Outback
Steakhouses
|
|||||||
Company-owned
- domestic
|
672
|
654
|
|||||
Company-owned
- international
|
106
|
75
|
|||||
Franchised
and development joint venture
-
domestic
|
106
|
104
|
|||||
Franchised
and development joint venture
-
international
|
42
|
55
|
|||||
Total
|
926
|
888
|
|||||
Carrabba's
Italian Grills
|
|||||||
Company-owned
|
205
|
176
|
|||||
Bonefish
Grills
|
|||||||
Company-owned
|
97
|
68
|
|||||
Franchised
and development joint venture
|
6
|
4
|
|||||
Total
|
103
|
72
|
|||||
Fleming’s
Prime Steakhouse and Wine Bars
|
|||||||
Company-owned
|
40
|
32
|
|||||
Roy’s
|
|||||||
Company-owned
|
21
|
19
|
|||||
Cheeseburger
in Paradise
|
|||||||
Company-owned
|
32
|
14
|
|||||
Paul
Lee's Chinese Kitchens
|
|||||||
Company-owned
|
-
|
3
|
|||||
Lee
Roy Selmon’s
|
|||||||
Company-owned
|
4
|
2
|
|||||
System-wide
total
|
1,331
|
1,206
|
THREE
MONTHS ENDED
|
|||||||
MARCH
31,
|
|||||||
2006
|
2005
|
||||||
Average
restaurant unit volumes (weekly):
|
|||||||
Outback
Steakhouses
(1)
|
$
|
67,584
|
$
|
68,391
|
|||
Carrabba's
Italian Grills
(1)
|
62,222
|
62,489
|
|||||
Bonefish
Grills (1)
|
62,722
|
62,985
|
|||||
Fleming's
Prime Steakhouse and Wine Bars
|
93,239
|
92,534
|
|||||
Roy's
|
82,478
|
77,282
|
|||||
Operating
weeks:
|
|||||||
Outback
Steakhouses
|
8,615
|
8,381
|
|||||
Carrabba's
Italian Grills
|
2,601
|
2,204
|
|||||
Bonefish
Grills
|
1,170
|
805
|
|||||
Fleming's
Prime Steakhouse and Wine Bars
|
510
|
406
|
|||||
Roy's
|
261
|
240
|
|||||
Year
to year percentage change:
|
|||||||
Menu
price increases (2):
|
|||||||
Outback
Steakhouses
|
0.6
|
%
|
4.1
|
%
|
|||
Carrabba's
Italian Grills
|
1.2
|
%
|
2.3
|
%
|
|||
Bonefish
Grills
|
2.2
|
%
|
2.3
|
%
|
|||
Same-store
sales (stores open 18 months or more):
|
|||||||
Outback
Steakhouses
|
-1.1
|
%
|
-0.5
|
%
|
|||
Carrabba's
Italian Grills
|
2.7
|
%
|
4.3
|
%
|
|||
Bonefish
Grills
|
2.1
|
%
|
0.3
|
%
|
|||
Fleming's
Prime Steakhouse and Wine Bars
|
7.0
|
%
|
10.7
|
%
|
|||
Roy's
|
4.6
|
%
|
3.4
|
%
|
(1)
|
We
have restated our previously reported consolidated financial statements
to
reflect certain adjustments as discussed in Note 1 of
Unaudited Consolidated Financial Statements of Item 1: Consolidated
Financial Statements, which is included in this Form
10-Q/A.
|
(2)
|
Reflects
nominal amounts of menu price changes, prior to any change in product
mix
because of price increases, and may not reflect amounts effectively
paid
by the customer. Menu price increases are not provided for Fleming's
and
Roy's as a significant portion of their sales come from specials,
which
fluctuate daily.
|
THREE
MONTHS ENDED
|
|||||||
MARCH
31,
|
|||||||
2006
|
2005
|
||||||
(restated)
|
(restated)
|
||||||
Net
cash provided by operating activities
|
$
|
24,792
|
$
|
85,410
|
|||
Net
cash used in investing activities
|
(88,148
|
)
|
(67,616
|
)
|
|||
Net
cash provided by (used in) financing activities
|
39,848
|
(2,410
|
)
|
||||
Net
(decrease) increase in cash and cash equivalents
|
$
|
(23,508
|
)
|
$
|
15,384
|
5%
|
10%
|
15%
|
||||||||
Decrease
in restaurant sales
|
$
|
(179,543
|
)
|
$
|
(359,087
|
)
|
$
|
(538,630
|
)
|
|
Decrease
in cash provided by operating activities
|
(33,844
|
)
|
(67,688
|
)
|
(101,532
|
)
|
Declaration
|
|
Record
|
|
Payable
|
|
Amount
per Share
|
||
Date
|
|
Date
|
|
Date
|
|
of
Common Stock
|
||
January
26, 2005
|
|
February
18, 2005
|
|
March
4, 2005
|
|
$
|
0.13
|
|
April
27, 2005
|
May
20, 2005
|
June
3, 2005
|
|
0.13
|
||||
July
27, 2005
|
August
19, 2005
|
September
2, 2005
|
0.13
|
|||||
October
26, 2005
|
November
18, 2005
|
December
2, 2005
|
0.13
|
|||||
January
24, 2006
|
February
17, 2006
|
March
3, 2006
|
0.13
|
|||||
April
25, 2006
|
May
19, 2006
|
June
2, 2006
|
0.13
|
(i)
|
The
restaurant industry is a highly competitive industry with many
well-established competitors;
|
|
(ii)
|
Our
results can be impacted by changes in consumer tastes and the level
of
consumer acceptance of our restaurant concepts (including consumer
tolerance of price increases); local, regional, national and international
economic conditions; the seasonality of our business; demographic
trends;
traffic patterns; change in consumer dietary habits; employee
availability; the cost of advertising and media; government actions
and
policies; inflation; and increases in various costs, including
construction and real estate costs;
|
|
(iii)
|
Our
results can be affected by consumer perception of food
safety;
|
|
(iv)
|
Our
ability to expand is dependent upon various factors such as the
availability of attractive sites for new restaurants; ability to
obtain
appropriate real estate sites at acceptable prices; ability to obtain
all
required governmental permits including zoning approvals and liquor
licenses on a timely basis; impact of government moratoriums or approval
processes, which could result in significant delays; ability to obtain
all
necessary contractors and subcontractors; union activities such as
picketing and hand billing that could delay construction; the ability
to
generate or borrow funds; the ability to negotiate suitable lease
terms;
the ability to recruit and train skilled management and restaurant
employees; and the ability to receive the premises from the landlord’s
developer without any delays;
|
|
(v)
|
Price
and availability of commodities, including but not limited to, such
items
as beef, chicken, shrimp, pork, seafood, dairy, potatoes, onions
and
energy supplies, which are subject to fluctuation and could increase
or
decrease more than we expect; and/or
|
|
(vi)
|
Weather
and acts of God could result in construction delays and also adversely
affect the results of one or more restaurants for an indeterminate
amount
of time.
|
· |
Created
a new position of Vice President, Corporate Controller, to lead process
and organizational change required to improve substantiation of more
complex and/or estimate-based accounting, including accounting for
gift
cards and certificates and related
revenue.
|
· |
Developed
and implemented a consistent accounting policy for gift card and
certificate accounting across all Company concepts in accordance
with
generally accepted accounting
principles.
|
· |
Implemented
procedures to perform monthly reconciliations of the Company’s unearned
revenue balance to detailed support for gift cards and certificates
outstanding, and gift card and certificate sales and redemptions.
|
· |
Established
a process for expensing gift card incentive programs as
incurred.
|
· |
Acquiring
additional resources to create a centralized accounting team that
will be
responsible for gift card and certificate
accounting.
|
· |
Establishing
policies to ensure appropriate communication regarding operating
changes
affecting accounting and control
design.
|
· |
Developing
a process for tracking and recording gift card discounts or expense
as
issued.
|
Period
|
(a)
Total number of shares purchased (1)
|
(b)
Average price paid per share
|
(c)
Total number of shares purchased as part of publicly announced programs
(1)
|
(d)
Maximum number of shares that may yet be purchased under the programs
(2)
|
|||||||||
January
1, 2006 - January 31, 2006
|
64,000
|
$
|
43.58
|
64,000
|
1,319,000
|
||||||||
February
1, 2006 - February 28, 2006
|
-
|
-
|
-
|
2,966,000
|
|||||||||
March
1, 2006 - March 31, 2006
|
200,000
|
43.93
|
200,000
|
3,124,000
|
|||||||||
Total
|
264,000
|
264,000
|
3,124,000
|
(1)
|
No
shares were repurchased other than through our publicly announced
repurchase programs and authorizations during the first quarter ended
March 31, 2006.
|
(2)
|
On
July 26, 2000, our Board of Directors authorized the repurchase of
up to
4,000,000 shares of our common stock, with the timing, price, quantity
and
manner of the purchases to be made at the discretion of management,
depending upon market conditions. In addition, the Board of Directors
authorized the repurchase of shares on a regular basis to offset
shares
issued as a result of stock option exercises. On July 23, 2003, our
Board
of Directors extended both the repurchase authorization for an additional
2,500,000 shares of our common stock, and the authorization to offset
shares issued as a result of stock option exercises. On February
13, 2006,
our Board of Directors authorized the repurchase of an additional
1,500,000 shares and authorized the continued repurchase of shares
on a
regular basis to offset shares issued as a result of stock option
exercises and as restricted shares vest and become dilutive. During
the
period from the authorization date through March 31, 2006, approximately
9,384,000 shares of our common stock have been issued as the result
of
stock option exercises. As of March 31, 2006, under these authorizations
we have repurchased approximately 14,260,000 shares of our common
stock
for approximately $504,197,000.
|
Number
|
Description
|
|
3.01
|
Certificate
of Amendment of Certificate of Incorporation of Outback Steakhouse,
Inc.,
April 25, 2006 (included as an exhibit to Registrant’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2006 and incorporated herein
by
reference)
|
|
10.01*
|
Outback
Steakhouse, Inc. Partner Equity Plan, Partner Equity Deferred Compensation
Diversified Plan Document (included as an exhibit to Registrant’s
Registration Statement on Form S-8, No. 333-132514, and incorporated
herein by reference)
|
|
10.02*
|
Outback
Steakhouse, Inc. Partner Equity Plan, Partner Equity Deferred Compensation
Stock Plan Document (included as an exhibit to Registrant’s Registration
Statement on Form S-8, No. 333-132514, and incorporated herein by
reference)
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
|
||
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
|
||
32.1
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 20021
|
|
|
||
32.2
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 20021
|
Date:
January 17, 2007
|
|
OSI
RESTAURANT PARTNERS, INC.
|
|
|
|
By:
/s/
Dirk A.
Montgomery
|
||
Dirk
A. Montgomery
Senior
Vice President and Chief Financial Officer
(Principal
Financial and Accounting Officer)
|
||