Delaware |
1-15935 |
59-3061413 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer
Identification No.) |
Quarter ended September 30, 2009 |
Company - owned |
Franchise and development joint venture (1) |
System-wide | ||
Domestic comparable store sales (stores open 18 months or more) |
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Outback Steakhouse |
-10.7% |
-13.9% |
-11.1% | ||
Carrabba’s Italian Grill |
-7.5% |
n/a |
-7.5% | ||
Bonefish Grill |
-5.8% |
-5.8% |
-5.8% | ||
Fleming’s Prime Steakhouse and Wine Bar |
-18.0% |
n/a |
-18.0% |
(1) |
These sales do not represent sales of OSI Restaurant Partners, LLC and are presented only as an indicator of changes in the Company’s restaurant system, which management believes is important information about the Company’s restaurant brands. |
Three months ended |
Nine months ended |
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September 30, |
September 30, |
|||||||||||||||
2009 |
2008 |
2009 |
2008 |
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Net loss attributable to OSI Restaurant Partners, LLC |
$ | (20,196 | ) | $ | (46,637 | ) | $ | (24,110 | ) | $ | (232,999 | ) | ||||
Benefit from income taxes |
(20,646 | ) | (35,256 | ) | (33,933 | ) | (66,738 | ) | ||||||||
Interest expense, net |
23,761 | 35,135 | 73,447 | 102,475 | ||||||||||||
Depreciation and amortization |
36,432 | 47,548 | 126,283 | 141,589 | ||||||||||||
EBITDA |
$ | 19,351 | $ | 790 | $ | 141,687 | $ | (55,673 | ) | |||||||
Impairments, closings and disposals (1) |
14,760 | 16,851 | 146,429 | 202,167 | ||||||||||||
Stock-based and other compensation expense (2) |
10,411 | 2,901 | 41,332 | 19,327 | ||||||||||||
Non-cash rent expense (3) |
4,316 | 6,863 | 16,580 | 20,928 | ||||||||||||
(Income) loss from operations of unconsolidated affiliates, net (4) |
(538 | ) | 1,366 | (655 | ) | (1,879 | ) | |||||||||
Transaction costs (5) |
- | 196 | - | 1,461 | ||||||||||||
Pre-opening expense (6) |
753 | 3,752 | 3,084 | 10,309 | ||||||||||||
Management fee (7) |
2,439 | 2,600 | 7,341 | 7,273 | ||||||||||||
Unusual and non-recurring expenses (8) |
2,043 | 5,635 | (120,545 | ) | 5,224 | |||||||||||
Other, net (9) |
(6,408 | ) | 12,708 | (5,202 | ) | 20,651 | ||||||||||
Adjusted EBITDA |
$ | 47,127 | $ | 53,662 | $ | 230,051 | $ | 229,788 | ||||||||
Cash rent (10) |
46,794 | 45,757 | 137,148 | 138,510 | ||||||||||||
Adjusted EBITDAR |
$ | 93,921 | $ | 99,419 | $ | 367,199 | $ | 368,298 |
(1) |
Represents the elimination of non-cash impairment charges of $11,078,000 and $161,589,000 for goodwill, $43,741,000 and $6,499,000 for intangible assets and $75,724,000 and $32,608,000 for fixed assets for the nine months ended September 30, 2009 and 2008, respectively, cash and non-cash expense from restaurant closings, impairment charges for investments in and advances to unconsolidated affiliates and net gains
or losses on the sale of fixed assets. The fixed asset and intangible asset impairment charges noted above for the nine months ended September 30, 2009 include a $45,962,000 impairment charge to reduce the carrying value of the assets of the Cheeseburger in Paradise concept to their estimated fair market value. In September 2009, this concept was sold to Paradise Restaurant Group, LLC (“PRG”), but the Company continues to consolidate PRG as it represents a variable interest entity
for which the Company is the primary beneficiary. |
(2) |
Includes ongoing Partner Equity Plan (“PEP”) expense (net of certain PEP distributions) of $10,119,000 and $12,382,000, expenses associated with the vesting of restricted stock and other non-cash charges (net of certain cash distributions) related to compensation programs provided to management, area operating partners and/or restaurant general managers of $25,131,000 and $12,529,000 and expense (income)
incurred as a result of gains (losses) on PEP deferred compensation participant investment accounts of $6,082,000 and ($5,584,000) for the nine months ended September 30, 2009 and 2008, respectively. |
(3) |
Represents the amortization of favorable and unfavorable leases as well as the difference between straight-line and cash rent expenses. Includes approximately $4,563,000 and $5,294,000 of non-cash rent expense related to the Company’s sister company, Private Restaurant Properties, LLC (“PRP”), for the nine months ended September 30, 2009 and 2008, respectively. |
(4) |
Represents the elimination of (income) loss from operations of unconsolidated affiliates, net of dividends and distributions received, if any. |
(5) |
Represents the non-recurring fees incurred as a result of the merger transaction on June 14, 2007 and subsequent related filings. |
(6) |
Reflects the elimination of employee travel, training, legal and other costs incurred prior to the opening of new restaurants. |
(7) |
Represents the management fees and expenses paid to a management company owned by affiliates of Bain Capital Partners, LLC, Catterton Partners and Company founders. |
(8) |
Includes a $158,061,000 gain on extinguishment of debt, a $24,500,000 loss related to our guarantee of an uncollateralized line of credit for our Roy’s joint venture partner, severance, non-recurring compensation program expense, certain bad debt expenses and expenses related to legal claims for the nine months ended September 30, 2009. Includes expenses from a non-recurring compensation program,
hurricane property and inventory loss, certain non-cash insurance expenses and gains resulting from a one-time reversal of an accrual for gift certificates for the nine months ended September 30, 2008. |
(9) |
Includes foreign currency transaction (gain) loss of ($11,000) and $10,172,000 for the nine months ended September 30, 2009 and 2008, respectively, (gain) loss on the cash surrender value of life insurance of ($5,927,000) and $8,710,000 for the nine months ended September 30, 2009 and 2008, respectively, gains and losses on diesel fuel and natural gas derivative instruments and franchise tax expense. |
(10) |
Includes cash rent paid to PRP, exclusive of any amounts included in pre-opening expense above, of approximately $52,435,000 and $53,480,000 for the nine months ended September 30, 2009 and 2008, respectively. |
Pro Forma |
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Cost Savings Initiatives |
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Pro Forma |
EBITDA Adjustment |
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Savings to |
Twelve-Month |
Twelve Months Ended |
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Cost Savings Category (in millions): |
Date (4) |
Run-Rate (5) |
September 30, 2009 (6) |
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Food (1) |
$ | 18.5 | $ | 27.7 | $ | 9.2 | ||||||
Labor (2) |
29.2 | 36.2 | 7.0 | |||||||||
Other (3) |
20.6 | 25.0 | 4.4 | |||||||||
Total Cost Savings |
$ | 68.3 | $ | 88.9 | $ | 20.6 |
(1) |
Cost savings realized and projected from specific menu item changes. |
(2) |
Cost savings realized and projected from initiatives to reduce restaurant labor hours. |
(3) |
Cost savings realized and projected from supplier contract negotiations and other supply chain efficiency initiatives. |
(4) |
Realized savings for the trailing twelve months ended September 30, 2009. Realized savings are not necessarily indicative of the pro forma twelve-month run-rate since these food, labor and other initiatives were not in place for the entire trailing twelve months ended September 30, 2009. |
(5) |
Pro forma cost savings from the food, labor and other initiatives as if they had been in place for the entire twelve-month period ended September 30, 2009. |
(6) |
Portion of the pro forma cost savings run-rate not yet realized in the last twelve months financial statements; EBITDA adjustment is limited to $20,000,000 (see below). |
Pro Forma Adjusted EBITDA (in millions): |
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Adjusted EBITDA, last 12 months |
$ | 302.9 | ||
Cost savings initiatives adjustment (1) |
20.0 | |||
Pro forma Adjusted EBITDA |
$ | 322.9 |
(1) |
Cost savings initiatives adjustment is limited to $20,000,000 per the Consolidated EBITDA definition in the Company’s Credit Agreement. |
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. |
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OSI RESTAURANT PARTNERS, LLC | |
(Registrant) | |||
Date: November 13, 2009 |
By: |
/s/ Dirk A. Montgomery | |
Dirk A. Montgomery | |||
Chief Financial Officer | |||