Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 24, 2021 | Apr. 23, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 24, 2021 | |
Entity File Number | 1-10275 | |
Entity Registrant Name | BRINKER INTERNATIONAL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-1914582 | |
Entity Address, Address Line One | 3000 Olympus Blvd | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75019 | |
City Area Code | (972) | |
Local Phone Number | 980-9917 | |
Title of 12(b) Security | Common Stock, $0.10 par value | |
Trading Symbol | EAT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 45,750,918 | |
Entity Central Index Key | 0000703351 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 24, 2021 | Mar. 25, 2020 | Mar. 24, 2021 | Mar. 25, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Total revenues | $ 828.4 | $ 860 | $ 2,329.2 | $ 2,515.3 |
Operating costs and expenses | ||||
Food and beverage costs | 213.9 | 226.7 | 606.3 | 653.6 |
Restaurant labor | 270.8 | 285.9 | 774.6 | 846.2 |
Restaurant expenses | 216.1 | 220.2 | 629.9 | 652.2 |
Depreciation and amortization | 37.4 | 43.5 | 112 | 120.9 |
General and administrative | 33.7 | 23.3 | 94.2 | 95.9 |
Other (gains) and charges | 4.3 | 19.3 | 13.5 | 30.7 |
Total operating costs and expenses | 776.2 | 818.9 | 2,230.5 | 2,399.5 |
Operating income | 52.2 | 41.1 | 98.7 | 115.8 |
Interest expenses | 14.1 | 14.3 | 43.1 | 44.2 |
Other income, net | (0.3) | (0.4) | (1.2) | (1.4) |
Income before income taxes | 38.4 | 27.2 | 56.8 | 73 |
Provision (benefit) for income taxes | 4.5 | (3.6) | 0.2 | (0.6) |
Net income | $ 33.9 | $ 30.8 | $ 56.6 | $ 73.6 |
Basic net income per share | $ 0.74 | $ 0.83 | $ 1.25 | $ 1.97 |
Diluted net income per share | $ 0.73 | $ 0.81 | $ 1.22 | $ 1.94 |
Basic weighted average shares outstanding | 45.5 | 37.2 | 45.3 | 37.3 |
Diluted weighted average shares outstanding | 46.7 | 37.8 | 46.2 | 38 |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustment | $ 0.3 | $ (1) | $ 1.1 | $ (1.1) |
Other comprehensive income (loss) | 0.3 | (1) | 1.1 | (1.1) |
Comprehensive income | 34.2 | 29.8 | 57.7 | 72.5 |
Company sales [Member] | ||||
Revenue from contract with customer, excluding assessed tax | 813.7 | 840.4 | 2,288.1 | 2,451.8 |
Franchise and other revenues [Member] | ||||
Revenue from contract with customer, excluding assessed tax | $ 14.7 | $ 19.6 | $ 41.1 | $ 63.5 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) shares in Millions, $ in Millions | Mar. 24, 2021 | Jun. 24, 2020 |
Current assets | ||
Cash and cash equivalents | $ 63.6 | $ 43.9 |
Accounts receivable, net | 66.6 | 52.3 |
Inventories | 27.1 | 27.3 |
Restaurant supplies | 52 | 51.6 |
Prepaid expenses | 11.6 | 13.9 |
Income taxes receivable, net | 31.5 | 35.4 |
Total current assets | 252.4 | 224.4 |
Property and equipment, at cost | ||
Land | 33.1 | 34.2 |
Buildings and leasehold improvements | 1,556.8 | 1,534.4 |
Furniture and equipment | 804.7 | 785.7 |
Construction-in-progress | 14.5 | 24.4 |
Gross property and equipment | 2,409.1 | 2,378.7 |
Less accumulated depreciation and amortization | (1,657.5) | (1,573.4) |
Net property and equipment | 751.6 | 805.3 |
Other assets | ||
Operating lease assets | 1,025.8 | 1,054.6 |
Goodwill | 188.1 | 187.6 |
Deferred income taxes, net | 47.5 | 38.2 |
Intangibles, net | 21.5 | 23 |
Other | 22.1 | 22.9 |
Total other assets | 1,305 | 1,326.3 |
Total assets | 2,309 | 2,356 |
Current liabilities | ||
Accounts payable | 121.4 | 104.9 |
Gift card liability | 110.9 | 109.9 |
Accrued payroll | 112 | 65.2 |
Operating lease liabilities | 117.2 | 117.3 |
Other accrued liabilities | 116.3 | 100.6 |
Total current liabilities | 577.8 | 497.9 |
Long-term debt and finance leases, less current installments | 1,017 | 1,208.5 |
Long-term operating lease liabilities, less current portion | 1,023.7 | 1,061.6 |
Other liabilities | 81.1 | 67.1 |
Commitments and contingencies (Note 14) | ||
Shareholders’ deficit | ||
Common stock, shares authorized | 250 | |
Common stock, par value per share | $ 0.10 | |
Common stock, shares issued | 70.3 | 70.3 |
Common stock, shares outstanding | 45.7 | 45 |
Common stock (250.0 million authorized shares; $0.10 par value; 70.3 million shares issued and 45.7 million shares outstanding at March 24, 2021, and 70.3 million shares issued and 45.0 million shares outstanding at June 24, 2020) | $ 7 | $ 7 |
Additional paid-in capital | 677.4 | 669.4 |
Accumulated other comprehensive loss | (5.1) | (6.2) |
Accumulated deficit | $ (340.9) | $ (397.5) |
Treasury stock, shares | 24.6 | 25.3 |
Treasury stock, at cost (24.6 million shares at March 24, 2021, and 25.3 million shares at June 24, 2020) | $ (729) | $ (751.8) |
Total shareholders’ deficit | (390.6) | (479.1) |
Total liabilities and shareholders’ deficit | $ 2,309 | $ 2,356 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Mar. 24, 2021 | Mar. 25, 2020 | |
Cash flows from operating activities | ||
Net income | $ 56.6 | $ 73.6 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation and amortization | 112 | 120.9 |
Stock-based compensation | 11.3 | 9 |
Restructure and impairment charges | 6.5 | 24.8 |
Net loss on disposal of assets | 1.1 | 1.1 |
Other | 2.7 | 1.7 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (1.3) | 12.8 |
Inventories | (0.4) | (1.2) |
Restaurant supplies | (0.4) | (0.3) |
Prepaid expenses | 2.3 | 10.8 |
Operating lease assets, net of liabilities | (9.1) | (6.3) |
Deferred income taxes, net | (9.3) | 4.2 |
Other assets | (0.2) | (0.4) |
Accounts payable | 19 | (1.7) |
Gift card liability | 1 | 5.1 |
Accrued payroll | 46.7 | (26.6) |
Other accrued liabilities | 10.5 | 11.1 |
Current income taxes | 6.4 | (0.2) |
Other liabilities | 13.2 | (0.6) |
Net cash provided by operating activities | 268.6 | 237.8 |
Cash flows from investing activities | ||
Payments for property and equipment | (62.4) | (82) |
Proceeds from sale of assets | 1.6 | 1 |
Proceeds from note receivable | 1.5 | 2.2 |
Payments for franchise restaurant acquisitions | 0 | (94.6) |
Net cash used in investing activities | (59.3) | (173.4) |
Cash flows from financing activities | ||
Payments on revolving credit facility | (210) | (630) |
Borrowings on revolving credit facility | 28.4 | 806.8 |
Payments on long-term debt | (14.3) | (12.4) |
Purchases of treasury stock | (4.1) | (32.3) |
Payments for debt issuance costs | (2.2) | (1) |
Payments of dividends | (1.5) | (43.3) |
Proceeds from issuance of treasury stock | 14.1 | 1.6 |
Net cash (used in) provided by financing activities | (189.6) | 89.4 |
Net change in cash and cash equivalents | 19.7 | 153.8 |
Cash and cash equivalents at beginning of period | 43.9 | 13.4 |
Cash and cash equivalents at end of period | $ 63.6 | $ 167.2 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Mar. 24, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | References to “Brinker,” the “Company,” “we,” “us,” and “our” in this Form 10-Q refer to Brinker International, Inc. and its subsidiaries and any predecessor companies of Brinker International, Inc. Our Consolidated Financial Statements (Unaudited) as of March 24, 2021 and June 24, 2020, and for the thirteen and thirty-nine week periods ended March 24, 2021 and March 25, 2020, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). We are principally engaged in the ownership, operation, development, and franchising of the Chili’s ® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy ® (“Maggiano’s”) restaurant brands. At March 24, 2021, we owned, operated or franchised 1,657 restaurants, consisting of 1,120 Company-owned restaurants and 537 franchised restaurants, located in the United States, 27 countries and two United States territories. Fiscal Year We have a 52 or 53 week fiscal year ending on the last Wednesday in June. We utilize a 13-week accounting period for quarterly reporting purposes, except in years containing 53 weeks when the fourth quarter contains 14 weeks. Fiscal year 2021 contains 53 weeks and will end on June 30, 2021. Fiscal year 2020, which ended on June 24, 2020, contained 52 weeks. Use of Estimates The preparation of the consolidated financial statements is in conformity with generally accepted accounting principles in the United States (“GAAP”) and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and costs and expenses in the reporting periods. Actual results could differ from those estimates. The information furnished herein reflects all adjustments (consisting only of normal recurring accruals and adjustments) which are, in our opinion, necessary to fairly state the interim operating results, financial position and cash flows for the respective periods. However, these operating results are not necessarily indicative of the results expected for the full fiscal year. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with GAAP, have been omitted pursuant to SEC rules and regulations. The Notes to Consolidated Financial Statements (Unaudited) should be read in conjunction with the Notes to the Consolidated Financial Statements contained in our June 24, 2020 Form 10-K. We believe the disclosures are sufficient for interim financial reporting purposes. All amounts in the Notes to Consolidated Financial Statements (Unaudited) are presented in millions unless otherwise specified. Foreign Currency Translation The foreign currency translation adjustment included in Comprehensive income in the Consolidated Statements of Comprehensive Income (Unaudited) represents the unrealized impact of translating the financial statements of our Canadian restaurants from Canadian dollars to United States dollars. This amount is not included in Net income and would only be realized upon disposition of our Canadian restaurants. The related Accumulated other comprehensive loss is presented in the Consolidated Balance Sheets (Unaudited). Risks and Uncertainties In January 2020, the Secretary of Health and Human Services declared the novel strain of coronavirus (“COVID-19”) a public health emergency. Subsequently in March 2020, the World Health Organization declared COVID-19 a global pandemic that resulted in a significant reduction in sales at our restaurants due to changes in consumer behavior as social distancing practices, dining room closures and other restrictions were mandated or encouraged by federal, state and local governments. In response to COVID-19, the Company temporarily closed all Company-owned restaurant dining and banquet rooms at the end of the third quarter of fiscal 2020 resulting in a transition to an off-premise business model. In May 2020, we began to reopen certain dining room locations as permitted by state and local governments. In March 2021, certain state and local governments started easing, and in some cases lifting, the dining room capacity restrictions. We are currently operating substantially all of our dining rooms in some capacity in accordance with state and local mandates in order to ensure the safety of our guests and team members. As of March 24, 2021, substantially all of our restaurant dining rooms and patios were opened with limited seating capacity. The capacity limitations and personal safety preferences have resulted in reduced traffic in the Company’s restaurants. At this time, the ultimate impact of COVID-19 cannot be reasonably estimated due to the uncertainty about the extent and the duration of the spread of the virus. A lack of containment could lead to further capacity restrictions, restaurant closures, disruptions in our supply chain and restaurant staffing which could adversely impact our financial results. |
EFFECT OF NEW ACCOUNTING STANDA
EFFECT OF NEW ACCOUNTING STANDARDS | 9 Months Ended |
Mar. 24, 2021 | |
Effect of New Accounting Standards [Abstract] | |
Effect of New Accounting Standards | New Accounting Standards Implemented in Fiscal 2021 In the first quarter of fiscal 2021, we implemented the following new accounting standards: • Measurement of Credit Losses on Financial Instruments, ASU No. 2016-13 • Fair Value Measurement (Topic 820): Disclosure Framework, ASU No. 2018-13 • Simplifying the Accounting for Income Taxes, ASU No. 2019-12 The adoption of these new accounting standards did not have a material impact on our Consolidated Financial Statements. There were no new accounting standards implemented in the third quarter of fiscal 2021. New Accounting Standards That Will Be Implemented In Future Periods We reviewed all recently issued accounting pronouncements and determined that they were either not applicable or are not expected to have a material impact on the Consolidated Financial Statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Mar. 24, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Deferred Franchise and Development Fees Our deferred franchise and development fees consist of the unrecognized fees received from franchisees. Recognition of these fees in subsequent periods is based on satisfaction of the contractual performance obligations of the active contracts with franchisees. We also expect to earn subsequent period royalties and advertising fees related to our franchise contracts; however, due to the variability and uncertainty of these future revenues based upon a sales-based measure, these future revenues are not yet estimable as the performance obligations remain unsatisfied. Deferred franchise and development fees are classified within Other accrued liabilities for the current portion expected to be recognized within the next 12 months, and Other liabilities for the long-term portion in the Consolidated Balance Sheets (Unaudited). The following table reflects the changes in deferred franchise and development fees between June 24, 2020 and March 24, 2021: Deferred Franchise and Development Fees Balance as of June 24, 2020 $ 12.7 Additions 0.3 Amount recognized to Franchise and other revenues (1.3) Other 0.1 Balance as of March 24, 2021 $ 11.8 The following table illustrates franchise and development fees expected to be recognized in the future related to performance obligations that were unsatisfied or partially unsatisfied as of March 24, 2021: Fiscal Year Franchise and Development Fees Revenue Recognition Remainder of 2021 $ 0.3 2022 1.0 2023 1.0 2024 1.0 2025 0.9 Thereafter 7.6 $ 11.8 Deferred Gift Card Revenues Total deferred revenues related to our gift cards include the full value of unredeemed gift card balances less recognized breakage and the unamortized portion of third party fees. The following table reflects the changes in the Gift card liability between June 24, 2020 and March 24, 2021: Gift Card Liability Balance as of June 24, 2020 $ 109.9 Gift card sales 88.6 Gift card redemptions recognized to Company sales (79.8) Gift card breakage recognized to Franchise and other revenues (8.0) Other 0.2 Balance as of March 24, 2021 $ 110.9 |
OTHER GAINS AND CHARGES
OTHER GAINS AND CHARGES | 9 Months Ended |
Mar. 24, 2021 | |
Other Gains and Charges [Abstract] | |
Other Gains and Charges | Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Unaudited) consist of the following: Thirteen Week Periods Ended Thirty-Nine Week Periods Ended March 24, March 25, March 24, March 25, Loss from natural disasters, net of (insurance recoveries) $ 1.8 $ (0.9) $ 2.0 $ (0.6) Remodel-related costs 0.9 0.6 1.8 2.1 COVID-19 related charges 0.9 16.1 3.1 16.1 Restaurant closure charges 0.3 0.3 2.2 3.4 Foreign currency transaction (gain) loss 0.1 2.3 (0.3) 2.2 Restaurant impairment charges — — 2.5 4.6 Lease modification gain, net — — (0.5) (3.1) Acquisition of franchise restaurants costs, net — 1.1 — 2.6 Other 0.3 (0.2) 2.7 3.4 $ 4.3 $ 19.3 $ 13.5 $ 30.7 Fiscal 2021 • Loss from natural disasters, net of (insurance recoveries) primarily consists of costs incurred related to Winter Storm Uri in February 2021. • Remodel-related costs relate to fixed asset disposals associated with the ongoing Chili’s remodel initiative. • COVID-19 related charges in the thirty-nine week period ended March 24, 2021 consists of following costs related to both Chili’s and Maggiano’s: – employee assistance and related payroll taxes for certain team members, – conversion of certain parking lots into dining areas, and – initial purchases of restaurant and personal protective supplies such as face masks and hand sanitizers required to maintain open dining rooms. • Restaurant closure charges in the thirty-nine week period ended March 24, 2021 primarily relates to closure costs and leases associated with certain closed Chili’s restaurants. • Foreign currency transaction (gain) loss resulted from the change in the value of our Mexican peso denominated note receivable received as consideration from the sale of our equity interest in our Mexico joint venture in the second quarter of fiscal 2018. • Restaurant impairment charges during the thirty-nine week period ended March 24, 2021 primarily related to the long-lived and operating lease assets of 10 underperforming Chili’s restaurants and three underperforming Maggiano’s restaurants that we continue to operate. • Lease modification gain, net during the thirty-nine week period ended March 24, 2021 relates to lease terminations of certain Chili’s operating lease liabilities. Fiscal 2020 • Loss from natural disasters, net of (insurance recoveries) during the thirteen and thirty-nine week periods ended March 25, 2020 primarily consists of insurance proceeds received related to a previously filed claim. • COVID-19 related charges consists of costs related to both Chili’s and Maggiano’s: – employee assistance - $15.5 million of employee assistance payments for the team members that experienced reduced shifts during this pandemic, who would have otherwise not received such payment under our normal compensation practices; and – inventory spoilage - $0.6 million due to the unexpected decline in traffic and dining room closures. • Restaurant closure charges during the thirteen and thirty-nine week periods ended March 25, 2020 primarily related to leases on certain closed Chili’s restaurants. • Restaurant impairment charges during the thirty-nine week period ended March 25, 2020 primarily related to the long-lived and operating lease assets of 10 underperforming Chili’s restaurants. • Lease modification gain, net during the thirty-nine week period ended March 25, 2020 included the first quarter of fiscal 2020 gain related to the lease termination of a previously impaired Chili’s operating lease. • Acquisition of franchise restaurants costs, net during the thirteen and thirty-nine week periods ended March 25, 2020 related to the 116 restaurants acquired from a franchisee. Refer to Note 15 - Fiscal 2020 Chili’s Restaurant Acquisition for details. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 24, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Thirteen Week Periods Ended Thirty-Nine Week Periods Ended March 24, March 25, March 24, March 25, Effective income tax rate 11.7 % (13.2) % 0.4 % (0.8) % The federal statutory tax rate for the periods presented was 21.0%. Our effective income tax rate for the thirteen and thirty-nine week periods ended March 24, 2021 was lower than the federal statutory rate primarily due to the favorable impact from the FICA tip tax credit. The thirty-nine week period ended March 24, 2021 also included the favorable impact of excess tax benefits associated with stock-based compensation. A reconciliation between the reported Provision (benefit) for income taxes and the amount computed by applying the statutory federal income tax rate to Income before income taxes is as follows: Thirty-Nine Week Period Ended March 24, Income tax expense at statutory rate - 21.0% $ 11.9 FICA tip tax credit (12.2) Stock-based compensation excess tax benefits (2.0) State income taxes, net of federal benefit 3.3 Other (0.8) Provision (benefit) for income taxes - 0.4% $ 0.2 Our effective income tax rate for the thirteen and thirty-nine week periods ended March 25, 2020 was lower than the federal statutory rate due to reduced profitability related to the COVID-19 pandemic that resulted in the closure of all dining and banquet rooms by the end of the third quarter of fiscal 2020, and the favorable impact of the FICA tip tax credit. The Provision (benefit) for income taxes included a significant reduction for the thirteen week period ended March 25, 2020 necessary to align the year-to-date Provision (benefit) for income taxes to the year-to-date Income before income taxes. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 9 Months Ended |
Mar. 24, 2021 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Basic net income per share is computed by dividing Net income by the Basic weighted average shares outstanding for the reporting period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of Diluted net income per share, the Basic weighted average shares outstanding is increased by the dilutive effect of stock options and restricted share awards. Stock options and restricted share awards with an anti-dilutive effect are not included in the Diluted net income per share calculation. Basic weighted average shares outstanding are reconciled to Diluted weighted average shares outstanding as follows: Thirteen Week Periods Ended Thirty-Nine Week Periods Ended March 24, March 25, March 24, March 25, Basic weighted average shares outstanding 45.5 37.2 45.3 37.3 Dilutive stock options 0.5 0.1 0.3 0.1 Dilutive restricted shares 0.7 0.5 0.6 0.6 Total dilutive impact 1.2 0.6 0.9 0.7 Diluted weighted average shares outstanding 46.7 37.8 46.2 38.0 Awards excluded due to anti-dilutive effect 0.0 1.4 0.7 1.3 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Mar. 24, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Our operating segments are Chili’s and Maggiano’s. The Chili’s segment includes the results of our Company- owned Chili’s restaurants, which are principally located in the United States, within the full-service casual dining segment of the industry. The Chili’s segment also has Company-owned restaurants in Canada, and franchised locations in the United States, 27 countries and two United States territories. The Maggiano’s segment includes the results of our Company-owned Maggiano’s restaurants in the United States as well as the results from our domestic franchise business. The Other segment includes costs related to our restaurant support teams for the Chili’s and Maggiano’s brands, including operations, finance, franchise, marketing, human resources and culinary innovation. The Other segment also includes costs related to the common and shared infrastructure, including accounting, information technology, purchasing, guest relations, legal and restaurant development. Company sales for each segment inclu de revenues generated by the operation of Company-owned restaurants including gift card redemptions and virtual brand revenues. Franchise and other revenues include royalties, d elivery service income, gift card breakage, franchise advertising fees, digital entertainment revenues, Maggiano’s banquet service charge income, franchise and development fees, gift card discount costs from third-party gift card sales and merchandise income . We do not rely on any major customers as a source of sales, and the customers and long-lived assets of our operating segments are predominantly located in the United States. There were no material transactions amongst our operating segments. Our chief operating decision maker uses Operating income as the measure for assessing performance of our segments. Operating income includes revenues and expenses directly attributable to segment-level results of operations. Restaurant expenses during the periods presented primarily included restaurant rent, supplies, delivery fees, repairs and maintenance, utilities, property taxes, credit card processing fees and advertising . The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP: Thirteen Week Period Ended March 24, 2021 Chili’s Maggiano’s Other Consolidated Company sales $ 749.0 $ 64.7 $ — $ 813.7 Royalties 7.7 — — 7.7 Franchise fees and other revenues 6.3 0.7 — 7.0 Franchise and other revenues 14.0 0.7 — 14.7 Total revenues 763.0 65.4 — 828.4 Food and beverage costs 198.7 15.2 — 213.9 Restaurant labor 248.7 22.1 — 270.8 Restaurant expenses 194.2 21.7 0.2 216.1 Depreciation and amortization 31.0 3.4 3.0 37.4 General and administrative 7.0 1.3 25.4 33.7 Other (gains) and charges 3.1 0.3 0.9 4.3 Total operating costs and expenses 682.7 64.0 29.5 776.2 Operating income (loss) 80.3 1.4 (29.5) 52.2 Interest expenses 1.4 — 12.7 14.1 Other income, net (0.1) — (0.2) (0.3) Income (loss) before income taxes $ 79.0 $ 1.4 $ (42.0) $ 38.4 Thirteen Week Period Ended March 25, 2020 Chili’s Maggiano’s Other Consolidated Company sales $ 748.7 $ 91.7 $ — $ 840.4 Royalties 9.0 — — 9.0 Franchise fees and other revenues 6.7 3.9 — 10.6 Franchise and other revenues 15.7 3.9 — 19.6 Total revenues 764.4 95.6 — 860.0 Food and beverage costs 204.1 22.6 — 226.7 Restaurant labor 251.1 34.8 — 285.9 Restaurant expenses 193.2 26.9 0.1 220.2 Depreciation and amortization 36.5 3.8 3.2 43.5 General and administrative 5.9 1.1 16.3 23.3 Other (gains) and charges 14.9 2.4 2.0 19.3 Total operating costs and expenses 705.7 91.6 21.6 818.9 Operating income (loss) 58.7 4.0 (21.6) 41.1 Interest expenses 1.1 — 13.2 14.3 Other income, net (0.1) — (0.3) (0.4) Income (loss) before income taxes $ 57.7 $ 4.0 $ (34.5) $ 27.2 Thirty-Nine Week Period Ended March 24, 2021 Chili’s Maggiano’s Other Consolidated Company sales $ 2,107.0 $ 181.1 $ — $ 2,288.1 Royalties 21.9 0.1 — 22.0 Franchise fees and other revenues 17.0 2.1 — 19.1 Franchise and other revenues 38.9 2.2 — 41.1 Total revenues 2,145.9 183.3 — 2,329.2 Food and beverage costs 563.2 43.1 — 606.3 Restaurant labor 710.3 64.3 — 774.6 Restaurant expenses 564.6 64.6 0.7 629.9 Depreciation and amortization 92.4 10.4 9.2 112.0 General and administrative 17.8 3.9 72.5 94.2 Other (gains) and charges 11.1 1.2 1.2 13.5 Total operating costs and expenses 1,959.4 187.5 83.6 2,230.5 Operating income (loss) 186.5 (4.2) (83.6) 98.7 Interest expenses 4.2 0.1 38.8 43.1 Other income, net (0.4) — (0.8) (1.2) Income (loss) before income taxes $ 182.7 $ (4.3) $ (121.6) $ 56.8 Segment assets $ 1,905.2 $ 219.7 $ 184.1 $ 2,309.0 Segment goodwill 149.7 38.4 — 188.1 Payments for property and equipment 56.3 1.4 4.7 62.4 Thirty-Nine Week Period Ended March 25, 2020 Chili’s (1) Maggiano’s Other Consolidated Company sales $ 2,154.6 $ 297.2 $ — $ 2,451.8 Royalties 30.7 0.1 — 30.8 Franchise fees and other revenues 17.8 14.9 — 32.7 Franchise and other revenues 48.5 15.0 — 63.5 Total revenues 2,203.1 312.2 — 2,515.3 Food and beverage costs 581.6 72.0 — 653.6 Restaurant labor 735.2 111.0 — 846.2 Restaurant expenses 568.2 83.6 0.4 652.2 Depreciation and amortization 99.3 11.8 9.8 120.9 General and administrative 23.5 4.3 68.1 95.9 Other (gains) and charges 23.9 2.5 4.3 30.7 Total operating costs and expenses 2,031.7 285.2 82.6 2,399.5 Operating income (loss) 171.4 27.0 (82.6) 115.8 Interest expenses 3.1 — 41.1 44.2 Other income, net (0.4) — (1.0) (1.4) Income (loss) before income taxes $ 168.7 $ 27.0 $ (122.7) $ 73.0 Payments for property and equipment $ 68.9 $ 6.2 $ 6.9 $ 82.0 (1) Chili’s segment information for fiscal 2020 includes the results of operations related to the 116 restaurants purchased from a former franchisee subsequent to the September 5, 2019 acquisition date. Refer to Note 15 - Fiscal 2020 Chili’s Restaurant Acquisition for details. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Mar. 24, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair value is the price that would be received for an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants on the measurement date. Fair value measurements are categorized in three levels based on the types of significant inputs used, as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs available at measurement date other than quote prices included in Level 1 Level 3 Unobservable inputs that cannot be corroborated by observable market data Non-Financial Assets Measured on a Non-Recurring Basis We review the carrying amounts of long-lived property and equipment, operating lease assets, reacquired franchise rights and transferable liquor licenses semi-annually or when events or circumstances indicate that the fair value may not substantially exceed the carrying amount. We record an impairment charge for the excess of the carrying amount over the fair value. All impairment charges were included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Unaudited) for the periods presented. Intangibles, net in the Consolidated Balance Sheets (Unaudited) includes both indefinite-lived intangible assets such as transferable liquor licenses and definite-lived intangible assets such as reacquired franchise rights and trademarks. Intangibles, net included accumulated amortization associated with definite-lived intangible assets at March 24, 2021 and June 24, 2020, of $9.2 million and $7.5 million, respectively. Definite Lived Assets Impairment Definite lived assets include property, equipment, operating lease assets and reacquired franchise rights. During the thirty-nine week period ended March 24, 2021, we impaired certain long-lived assets and operating lease assets primarily related to 10 underperforming Chili’s and three underperforming Maggiano’s restaurants. During the thirty-nine week period ended March 25, 2020, we impaired certain long-lived assets primarily related to 10 underperforming Chili’s restaurants. Additionally, we impaired certain finance and operating lease assets related to previously closed Chili’s restaurants. We determined the fair value of these assets based on Level 3 fair value measurements. The table below presents the carrying values and related impairment expenses recorded on these impaired restaurants for the periods presented. Impairment Charges Pre-Impairment Carrying Value Thirty-Nine Week Periods Ended March 24, March 25, March 24, March 25, Underperforming restaurants Long-lived assets $ 2.2 $ 4.5 $ 2.2 $ 4.5 Reacquired franchise rights assets 0.1 — 0.1 — Operating lease assets 1.1 — 0.2 — Finance lease assets — 0.1 — 0.1 Total underperforming restaurants $ 3.4 $ 4.6 $ 2.5 $ 4.6 Closed restaurants Operating lease assets $ — $ 6.4 $ — $ 1.8 Finance lease assets — 5.8 — 1.4 Total closed restaurants $ — $ 12.2 $ — $ 3.2 Indefinite Lived Assets Impairment The fair values of transferable liquor licenses are based on prices in the open market for licenses in the same or similar jurisdictions, and are categorized as Level 2. During the thirteen and thirty-nine week periods ended March 24, 2021 and March 25, 2020, no indicators of impairment were identified. Goodwill We review the carrying amounts of goodwill annually or when events or circumstances indicate that the carrying amount may not be recoverable. We may elect to perform a qualitative assessment for our reporting units to determine whether it is more likely than not that the fair value of the reporting unit is greater than its carrying value. If a qualitative assessment is not performed, or if the result of the qualitative assessment indicates a potential impairment, then the fair value of the reporting unit is compared to its carrying value. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the implied fair value of the goodwill. Related to the qualitative assessment, changes in circumstances existing at the measurement date or at other times in the future, such as declines in our market capitalization, as well as in the market capitalization of other companies in the restaurant industry, declines in sales at our restaurants, and significant adverse changes in the operating environment for the restaurant industry could result in an impairment loss of all or a portion of our goodwill. We performed a detailed quantitative assessment in the third quarter of fiscal 2020 of our goodwill balances associated with both reporting units. This assessment was performed in response to observed declines in operating cash flows and market capitalization that were primarily driven by the impact of the COVID-19 pandemic on our business. Based on this assessment, we concluded that our goodwill and indefinite-lived intangible assets were not impaired at that time. We updated this assessment in the fourth quarter of fiscal 2020 and again concluded no impairment triggering event existed based on improved market capitalization and operating results compared to projections in the quantitative assessment prepared in the third quarter of fiscal 2020. Our operating results and operating cash flows for the thirteen and thirty-nine week periods ended March 24, 2021 have continued to outperform our initial quantitative assessment. Our stock price and market capitalization have also increased to levels greater than before the COVID-19 pandemic began in the United States. We performed our annual goodwill impairment analysis in the second quarter of fiscal 2021 using a qualitative approach based on these factors and no indicators of impairment were identified. During the thirteen and thirty-nine week periods ended March 25, 2020, no indicators of impairment were identified based on our assessments. Our ability to operate dining and banquet rooms and generate off-premise sales at our restaurants is critical to avoiding a future triggering event as the impact of the COVID-19 pandemic continues. Management’s judgments about the impact of the pandemic could change as additional developments occur. We will continue to monitor and evaluate our results in future periods to determine if a more detailed assessment is necessary. Other Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and long-term debt. The fair values of cash and cash equivalents, accounts receivable and accounts payable approximate their carrying amounts because of the short maturity of these items. Long-Term Debt The carrying amount of debt outstanding related to the amended revolving credit facility approximates fair value as the interest rate on this instrument approximates current market rates (Level 2). The fair values of the 3.875% and 5.000% notes are based on quoted market prices and are considered Level 2 fair value measurements. The 3.875% notes and 5.000% notes carrying amounts, which are net of unamortized debt issuance costs and discounts, and fair values are as follows: March 24, 2021 June 24, 2020 Carrying Amount Fair Value Carrying Amount Fair Value 3.875% notes $ 299.2 $ 303.4 $ 299.0 $ 282.8 5.000% notes 347.3 363.1 346.7 330.8 |
LEASES
LEASES | 9 Months Ended |
Mar. 24, 2021 | |
Leases [Abstract] | |
Leases | We typically lease our restaurant facilities through ground leases (where we lease land only, but construct the building and improvements) or retail leases (where we lease the land/retail space and building). In addition to our restaurant facilities, we also lease our corporate headquarters location and certain equipment. Lease Amounts Included in the Consolidated Statements of Comprehensive Income (Unaudited) The components of lease expenses included in the Consolidated Statements of Comprehensive Income (Unaudited) were as follows: Thirteen Week Periods Ended Thirty-Nine Week Periods Ended March 24, March 25, March 24, March 25, Operating lease cost $ 41.9 $ 41.8 $ 125.6 $ 121.0 Variable lease cost 14.6 15.6 43.5 43.9 Finance lease amortization 4.2 8.0 12.4 13.7 Finance lease interest 1.4 1.2 4.3 3.2 Short-term lease cost 0.2 0.5 0.4 1.2 Sublease income (1.0) (1.2) (3.2) (3.5) Total lease costs, net $ 61.3 $ 65.9 $ 183.0 $ 179.5 |
DEBT
DEBT | 9 Months Ended |
Mar. 24, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Long-term debt consists of the following: March 24, June 24, Revolving credit facility $ 291.3 $ 472.9 5.000% notes 350.0 350.0 3.875% notes 300.0 300.0 Finance lease obligations 97.0 102.1 Total long-term debt and finance leases 1,038.3 1,225.0 Less: unamortized debt issuance costs and discounts (3.5) (4.3) Total long-term debt, less unamortized debt issuance costs and discounts 1,034.8 1,220.7 Less: current installments of long-term debt (1) (17.8) (12.2) Long-term debt and finance leases less current installments $ 1,017.0 $ 1,208.5 (1) Current installments of long-term debt consist only of finance leases for the periods presented and are recorded within Other accrued liabilities in the Consolidated Balance Sheets (Unaudited). Refer to Note 11 - Accrued and Other Liabilities for further details. Revolving Credit Facility In the thirty-nine week period ended March 24, 2021, net repayments of $181.6 million were made on the $1.0 billion revolving credit facility. As of March 24, 2021, $708.7 million of credit was available under the revolving credit facility. Amended Revolving Credit Agreement In the first quarter of fiscal 2021, we executed the seventh amendment to our revolving credit facility, extending the maturity date to December 12, 2022. This amendment included a capacity reduction to $900.0 million from $1.0 billion which will occur on September 12, 2021. The issuance of certain debt or preferred equity interests will result in an immediate capacity reduction, an interest rate reduction of 0.250% on the spread and 0.100% reduction on the undrawn fee if the issuance exceeds $250.0 million pursuant to the terms of the agreement. The revolving credit facility bears interest of LIBOR plus an applicable margin of 2.250% to 3.000% and an undrawn commitment fee of 0.350% to 0.500%, both based on a function of our debt-to-cash-flow ratio. As of March 24, 2021, our interest rate was 3.750% consisting of the LIBOR floor of 0.750% plus the applicable margin of 3.000%. In the thirty-nine week period ended March 24, 2021, we incurred and capitalized $2.2 million of debt issuance costs, associated with the revolver amendment, which are included in Other assets in the Consolidated Balance Sheets (Unaudited). Financial Covenants |
ACCRUED AND OTHER LIABILITIES
ACCRUED AND OTHER LIABILITIES | 3 Months Ended |
Mar. 24, 2021 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued And Other Liabilities Disclosure | Other accrued liabilities consist of the following: March 24, June 24, Insurance $ 22.6 $ 20.7 Property tax 19.7 22.9 Sales tax 19.5 13.3 Current installments of finance leases 17.8 12.2 Interest 14.3 7.5 Utilities and services 8.5 8.3 Cyber security incident 3.4 3.4 State income tax payable 0.4 — Other (1) 10.1 12.3 $ 116.3 $ 100.6 (1) Other primarily consists of rent-related expenses, banquet deposits for Maggiano’s events, deferred franchise and development fees, charitable donations and other various accruals. Other liabilities consist of the following: March 24, June 24, Insurance $ 34.6 $ 33.7 Deferred payroll taxes (1) 27.2 12.9 Deferred franchise fees 10.8 11.6 Unrecognized tax benefits 2.1 2.1 Other 6.4 6.8 $ 81.1 $ 67.1 (1) Deferred payroll taxes consist of the second installment of the deferral of the employer portion of certain payroll related taxes as allowed under the CARES Act which is due on December 31, 2022. The first installment of $27.2 million, which is due on December 31, 2021, is recorded within Accrued payroll in the Consolidated Balance Sheets (Unaudited). |
SHAREHOLDERS' DEFICIT
SHAREHOLDERS' DEFICIT | 3 Months Ended |
Mar. 24, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Deficit | The changes in Total shareholders’ deficit during the thirty-nine week periods ended March 24, 2021 and March 25, 2020, respectively, were as follows: Thirty-Nine Week Period Ended March 24, 2021 Common Stock Additional Accumulated Deficit Treasury Accumulated Total Balance at June 24, 2020 $ 7.0 $ 669.4 $ (397.5) $ (751.8) $ (6.2) $ (479.1) Net income — — 10.7 — — 10.7 Other comprehensive income — — — — 0.3 0.3 Dividends — — 0.0 — — 0.0 Stock-based compensation — 3.9 — — — 3.9 Purchases of treasury stock — (1.1) — (2.8) — (3.9) Issuances of common stock — (9.0) — 12.0 — 3.0 Balance at September 23, 2020 $ 7.0 $ 663.2 $ (386.8) $ (742.6) $ (5.9) $ (465.1) Net income — — 12.0 — — 12.0 Other comprehensive income — — — — 0.5 0.5 Dividends — — 0.0 — — 0.0 Stock-based compensation — 3.0 — — — 3.0 Purchases of treasury stock — 0.0 — 0.0 — 0.0 Issuances of common stock — 1.2 — 4.3 — 5.5 Balance at December 23, 2020 $ 7.0 $ 667.4 $ (374.8) $ (738.3) $ (5.4) $ (444.1) Net income — — 33.9 — — 33.9 Other comprehensive income — — — — 0.3 0.3 Dividends — — 0.0 — — 0.0 Stock-based compensation — 4.4 — — — 4.4 Purchases of treasury stock — (0.1) — (0.1) — (0.2) Issuances of common stock — 5.7 — 9.4 — 15.1 Balance at March 24, 2021 $ 7.0 $ 677.4 $ (340.9) $ (729.0) $ (5.1) $ (390.6) Thirty-Nine Week Period Ended March 25, 2020 Common Stock Additional Retained Treasury Accumulated Total Balance at June 26, 2019 $ 17.6 $ 522.0 $ 2,771.2 $ (4,083.4) $ (5.6) $ (778.2) Effect of ASC 842 adoption — — 195.9 — — 195.9 Net income — — 14.9 — — 14.9 Other comprehensive loss — — — — (0.2) (0.2) Dividends ($0.38 per share) — — (14.6) — — (14.6) Stock-based compensation — 7.1 — — — 7.1 Purchases of treasury stock — (0.3) — (11.0) — (11.3) Issuances of common stock — (3.7) — 5.0 — 1.3 Balance at September 25, 2019 $ 17.6 $ 525.1 $ 2,967.4 $ (4,089.4) $ (5.8) $ (585.1) Net income — — 27.9 — — 27.9 Other comprehensive income — — — — 0.1 0.1 Dividends ($0.38 per share) — — (14.6) — — (14.6) Stock-based compensation — 2.6 — — — 2.6 Purchases of treasury stock — 0.0 — 0.0 — 0.0 Issuances of common stock — (0.4) — 0.6 — 0.2 Retirement of treasury stock (11.4) — (3,345.4) 3,356.8 — — Balance at December 25, 2019 $ 6.2 $ 527.3 $ (364.7) $ (732.0) $ (5.7) $ (568.9) Net income — — 30.8 — — 30.8 Other comprehensive loss — — — — (1.0) (1.0) Dividends ($0.38 per share) — — (14.0) — — (14.0) Stock-based compensation — (0.7) — — — (0.7) Purchases of treasury stock — 0.0 — (21.0) — (21.0) Issuances of common stock — (0.5) — 0.6 — 0.1 Balance at March 25, 2020 $ 6.2 $ 526.1 $ (347.9) $ (752.4) $ (6.7) $ (574.7) Dividends In the fourth quarter of fiscal 2020, our Board of Directors voted to suspend the quarterly cash dividend in response to liquidity needs created by the COVID-19 pandemic. Before this suspension, we paid dividends of $0.38 per share quarterly. In the thirty-nine week period ended March 24, 2021, dividends paid were solely related to the previously accrued dividends for restricted share awards that vested in the period. Restricted share award dividends are accrued in Other accrued liabilities for the current portion to vest within 12 months, and Other liabilities for the portion that will vest after one year. I n the thirty-nine week period ended March 25, 2020, we paid dividends of $43.3 million to common stock shareholders. Stock-based Compensation The following table presents the stock options and restricted share awards granted, and related weighted average exercise price and fair value per share amounts. Thirty-Nine Week Periods Ended March 24, March 25, Stock options Stock options granted — 0.3 Weighted average exercise price per share $ — $ 38.51 Weighted average fair value per share $ — $ 6.83 Restricted share awards Restricted share awards granted 0.5 0.3 Weighted average fair value per share $ 40.49 $ 38.68 Share Repurchases In the fourth quarter of fiscal 2020, our share repurchase program was suspended in response to the business downturn caused by the COVID-19 pandemic. Prior to the suspension, our share repurchase program was used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. We evaluated potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings, and planned investment and financing needs. Repurchased shares are reflected as an increase in Treasury stock within Shareholders’ deficit in the Consolidated Balance Sheets (Unaudited) . In the thirty-nine week period ended March 24, 2021, we repurchased 0.1 million shares from team members to satisfy tax withholding obligations on the vesting of restricted shares. Before the suspension of our repurchase program, i n the thirty-nine week period ended March 25, 2020, we repurchased 0.8 million shares of our common stock for $32.3 million. Effect of Adoption of ASC 842 In the first quarter of fiscal 2020, we adopted the lease accounting standard, ASC 842, and recorded a $195.9 million cumulative effect adjustment to Retained earnings (accumulated deficit) for the change in accounting principle. Retirement of Treasury Stock In the second quarter of fiscal 2020, the Board of Directors approved the retirement of 114 million shares of Treasury stock for a weighted average price per share of $29.45. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Mar. 24, 2021 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Cash paid for income taxes and interest is as follows: Thirty-Nine Week Periods Ended March 24, March 25, Income taxes, net of (refunds) $ 2.8 $ (4.7) Interest, net of amounts capitalized 30.8 32.6 Non-cash operating, investing and financing activities are as follows: Thirty-Nine Week Periods Ended March 24, March 25, Operating lease additions (1) $ 51.4 $ 216.4 Accrued capital expenditures 4.3 14.7 Retirement of fully depreciated assets 13.1 14.0 Dividends declared but not paid 0.0 14.8 (1) Operating lease additions include new operating lease assets obtained in exchange for new operating lease liabilities. The thirty-nine week period ended March 25, 2020 primarily included operating lease additions associated with the 116 restaurants purchased from a former franchisee on September 5, 2019 acquisition date. Refer to Note 15 - Fiscal 2020 Chili’s Restaurant Acquisition for details. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Mar. 24, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Lease Commitments We have, in certain cases, divested brands or sold restaurants to franchisees and have not been released from lease guarantees for the related restaurants. As of March 24, 2021 and June 24, 2020, we have outstanding lease guarantees or are secondarily liable for an estimated $33.8 million and $39.7 million, respectively. These amounts represent the known potential liability of future rent payments under the leases. These leases have been assigned to the buyers and expire at the end of the respective lease terms, which range from fiscal 2021 through fiscal 2027. In the event of default under a lease by a franchisee or owner of a divested brand, the indemnity and default clauses in our agreements with such third parties and applicable laws govern our ability to pursue and recover amounts we may pay on behalf of such parties. Letters of Credit We provide letters of credit to various insurers to collateralize obligations for outstanding claims. As of March 24, 2021, we had $29.5 million in undrawn standby letters of credit outstanding. All standby letters of credit are renewable within the next 1 to 13 months. Cyber Security Incident In fiscal 2018, we discovered malware at certain Chili’s restaurants that may have resulted in unauthorized access or acquisition of customer payment card data. Cyber Security Related Charges To limit our exposure to cyber security events, we maintain cyber liability insurance coverage. Our cyber liability insurance policy contains a $2.0 million insurance retention that was fully accrued during fiscal 2018. Since the incident, through March 24, 2021, we have incurred total cumulative costs of $8.9 million related to the cyber security incident. This includes the $2.0 million retention recorded, $2.6 million in costs that have been reimbursed by our insurance carriers, $3.8 million of receivables for costs incurred that we believe are reimbursable and probable of recovery under our insurance coverage and $0.5 million of costs not reimbursable by our insurance carriers. We have settled claims from three payment card companies, and the settlement amounts are included in these costs. We do not expect material claims from payment card companies in the future. Cyber Security Litigation The Company was named as a defendant in a putative class action lawsuit in the United States District Court for the Middle District of Florida styled In re: Brinker Data Incident Litigation, Case No. 18-cv-00686-TJC-MCR (the “Litigation”) relating to the cyber security incident described above. In the Litigation, plaintiffs assert various claims stemming from the cyber security incident at the Company’s Chili’s restaurants involving customer payment card information and seek monetary damages in excess of $5.0 million, injunctive and declaratory relief, and attorney’s fees and costs. Mediation was held on November 18, 2020 but was unsuccessful. On April 14, 2021, the district court issued an order granting in part and deferring in part the plaintiffs’ motion for class certification. We believe we have defenses and intend to continue defending the Litigation. As such, as of March 24, 2021, we have concluded that a loss, or range of loss, from this matter is not determinable, therefore, we have not recorded a liability related to the Litigation. We will continue to evaluate this matter based on new information as it becomes available. Legal Proceedings Evaluating contingencies related to litigation is a complex process involving subjective judgment on the potential outcome of future events, and the ultimate resolution of litigated claims may differ from our current analysis. Accordingly, we review the adequacy of accruals and disclosures pertaining to litigated matters each quarter in consultation with legal counsel and we assess the probability and range of possible losses associated with contingencies for potential accrual in the Consolidated Financial Statements. We are engaged in various legal proceedings and have certain unresolved claims pending. Liabilities have been established based on our best estimates of our potential liability in certain of these matters. Based upon consultation with legal counsel, management is of the opinion that there are no matters pending or threatened which are expected to have a material adverse effect, individually or in the aggregate, on the consolidated financial condition or results of operations. |
FISCAL 2020 CHILI'S RESTAURANT
FISCAL 2020 CHILI'S RESTAURANT ACQUISITION | 9 Months Ended |
Mar. 24, 2021 | |
Business Combinations [Abstract] | |
Fiscal 2020 Chili's Restaurant Acquisition | In the first quarter of fiscal 2020, on September 5, 2019, we completed the acquisition of certain assets and liabilities related to 116 previously franchised Chili’s restaurants located in the Midwest United States. Pro-forma financial information of the acquisition is not presented due to the immaterial impact of the financial results of the acquired restaurants in the Consolidated Financial Statements (Unaudited). Total cash consideration of $96.0 million, including post-closing adjustments, was funded with borrowings from our existing credit facility. We accounted for this acquisition as a business combination. The results of operations, and assets and liabilities, of these restaurants are included in the Consolidated Financial Statements (Unaudited) from the date of acquisition. The assets and liabilities of these restaurants were recorded at their fair values. Net acquisition-related charges of $1.1 million and $2.6 million were recorded during the thirteen and thirty-nine week periods ended March 25, 2020, respectively, to Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Unaudited). In the thirteen week period ended March 25, 2020, the net charges consisted of $1.1 million for professional services, transaction and transition related costs. In the thirty-nine week period ended March 25, 2020, the net charges consisted of $4.1 million for professional services, transaction and transition related costs and $1.1 million of related franchise straight-line rent balances, net of market leasehold improvement adjustments that were fully recognized at the date of the acquisition. These charges were partially offset by $2.6 million of franchise deferred revenue balances that were fully recognized at the date of the acquisition. The final purchase price accounting was completed in the third quarter of fiscal 2020, and the final amounts recorded for the fair value of acquired assets and liabilities at the acquisition date were as follows: Fair Value September 5, 2019 Current assets (1) $ 7.3 Property and equipment 60.3 Operating lease assets 163.5 Reacquired franchise rights (2) 6.9 Goodwill (3) 22.4 Total assets acquired 260.4 Current liabilities (4) 9.1 Operating lease liabilities, less current portion 158.3 Total liabilities assumed 167.4 Net assets acquired (5) $ 93.0 (1) Current assets included petty cash, inventory, and restaurant supplies. (2) Reacquired franchise rights have a weighted average amortization period of approximately 8 years. (3) Goodwill is expected to be deductible for tax purposes. The portion of the purchase price attributable to goodwill represents the benefits expected as a result of the acquisition, including sales and unit growth opportunities, and the benefit of the assembled workforce of the acquired restaurants. (4) Current liabilities included the current portion of operating lease liabilities, gift card liability and accrued property tax. (5) Net assets acquired at fair value are equal to the total purchase price of $99.0 million, less $3.2 million of closing adjustments and $2.8 million allocated to the prepayment of leases entered into with the franchisee. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 24, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent to the end of the third quarter of fiscal 2021, $20.0 million of payments were made on the revolving credit facility. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Mar. 24, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Year | Fiscal Year We have a 52 or 53 week fiscal year ending on the last Wednesday in June. We utilize a 13-week accounting period for quarterly reporting purposes, except in years containing 53 weeks when the fourth quarter contains 14 weeks. Fiscal year 2021 contains 53 weeks and will end on June 30, 2021. Fiscal year 2020, which ended on June 24, 2020, contained 52 weeks. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements is in conformity with generally accepted accounting principles in the United States (“GAAP”) and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and costs and expenses in the reporting periods. Actual results could differ from those estimates. The information furnished herein reflects all adjustments (consisting only of normal recurring accruals and adjustments) which are, in our opinion, necessary to fairly state the interim operating results, financial position and cash flows for the respective periods. However, these operating results are not necessarily indicative of the results expected for the full fiscal year. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with GAAP, have been omitted pursuant to SEC rules and regulations. The Notes to Consolidated Financial Statements (Unaudited) should be read in conjunction with the Notes to the Consolidated Financial Statements contained in our June 24, 2020 Form 10-K. We believe the disclosures are sufficient for interim financial reporting purposes. All amounts in the Notes to Consolidated Financial Statements (Unaudited) are presented in millions unless otherwise specified. |
Foreign Currency Translation | Foreign Currency Translation The foreign currency translation adjustment included in Comprehensive income in the Consolidated Statements of Comprehensive Income (Unaudited) represents the unrealized impact of translating the financial statements of our Canadian restaurants from Canadian dollars to United States dollars. This amount is not included in Net income and would only be realized upon disposition of our Canadian restaurants. The related Accumulated other comprehensive loss is presented in the Consolidated Balance Sheets (Unaudited). |
Risks and Uncertainties | Risks and Uncertainties In January 2020, the Secretary of Health and Human Services declared the novel strain of coronavirus (“COVID-19”) a public health emergency. Subsequently in March 2020, the World Health Organization declared COVID-19 a global pandemic that resulted in a significant reduction in sales at our restaurants due to changes in consumer behavior as social distancing practices, dining room closures and other restrictions were mandated or encouraged by federal, state and local governments. In response to COVID-19, the Company temporarily closed all Company-owned restaurant dining and banquet rooms at the end of the third quarter of fiscal 2020 resulting in a transition to an off-premise business model. In May 2020, we began to reopen certain dining room locations as permitted by state and local governments. In March 2021, certain state and local governments started easing, and in some cases lifting, the dining room capacity restrictions. We are currently operating substantially all of our dining rooms in some capacity in accordance with state and local mandates in order to ensure the safety of our guests and team members. As of March 24, 2021, substantially all of our restaurant dining rooms and patios were opened with limited seating capacity. The capacity limitations and personal safety preferences have resulted in reduced traffic in the Company’s restaurants. At this time, the ultimate impact of COVID-19 cannot be reasonably estimated due to the uncertainty about the extent and the duration of the spread of the virus. A lack of containment could lead to further capacity restrictions, restaurant closures, disruptions in our supply chain and restaurant staffing which could adversely impact our financial results. |
EFFECT OF NEW ACCOUNTING STAN_2
EFFECT OF NEW ACCOUNTING STANDARDS (Policies) | 9 Months Ended |
Mar. 24, 2021 | |
Effect of New Accounting Standards [Abstract] | |
New Accounting Standards Implemented in Fiscal 2021 | New Accounting Standards Implemented in Fiscal 2021 In the first quarter of fiscal 2021, we implemented the following new accounting standards: • Measurement of Credit Losses on Financial Instruments, ASU No. 2016-13 • Fair Value Measurement (Topic 820): Disclosure Framework, ASU No. 2018-13 • Simplifying the Accounting for Income Taxes, ASU No. 2019-12 The adoption of these new accounting standards did not have a material impact on our Consolidated Financial Statements. There were no new accounting standards implemented in the third quarter of fiscal 2021. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Mar. 24, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Changes in Deferred Franchise and Development Fees | The following table reflects the changes in deferred franchise and development fees between June 24, 2020 and March 24, 2021: Deferred Franchise and Development Fees Balance as of June 24, 2020 $ 12.7 Additions 0.3 Amount recognized to Franchise and other revenues (1.3) Other 0.1 Balance as of March 24, 2021 $ 11.8 |
Remaining Deferred Franchise and Development Fees to be Recognized | The following table illustrates franchise and development fees expected to be recognized in the future related to performance obligations that were unsatisfied or partially unsatisfied as of March 24, 2021: Fiscal Year Franchise and Development Fees Revenue Recognition Remainder of 2021 $ 0.3 2022 1.0 2023 1.0 2024 1.0 2025 0.9 Thereafter 7.6 $ 11.8 |
Deferred Gift Card Revenues | The following table reflects the changes in the Gift card liability between June 24, 2020 and March 24, 2021: Gift Card Liability Balance as of June 24, 2020 $ 109.9 Gift card sales 88.6 Gift card redemptions recognized to Company sales (79.8) Gift card breakage recognized to Franchise and other revenues (8.0) Other 0.2 Balance as of March 24, 2021 $ 110.9 |
OTHER GAINS AND CHARGES (Tables
OTHER GAINS AND CHARGES (Tables) | 9 Months Ended |
Mar. 24, 2021 | |
Other Gains and Charges [Abstract] | |
Other Gains And Charges | Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Unaudited) consist of the following: Thirteen Week Periods Ended Thirty-Nine Week Periods Ended March 24, March 25, March 24, March 25, Loss from natural disasters, net of (insurance recoveries) $ 1.8 $ (0.9) $ 2.0 $ (0.6) Remodel-related costs 0.9 0.6 1.8 2.1 COVID-19 related charges 0.9 16.1 3.1 16.1 Restaurant closure charges 0.3 0.3 2.2 3.4 Foreign currency transaction (gain) loss 0.1 2.3 (0.3) 2.2 Restaurant impairment charges — — 2.5 4.6 Lease modification gain, net — — (0.5) (3.1) Acquisition of franchise restaurants costs, net — 1.1 — 2.6 Other 0.3 (0.2) 2.7 3.4 $ 4.3 $ 19.3 $ 13.5 $ 30.7 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Mar. 24, 2021 | |
Income Tax Disclosure [Abstract] | |
Effective Income Tax Rate Schedule | Thirteen Week Periods Ended Thirty-Nine Week Periods Ended March 24, March 25, March 24, March 25, Effective income tax rate 11.7 % (13.2) % 0.4 % (0.8) % |
Reconciliation Between Reported Provision (Benefit) for Income Taxes and Amount Computed by Statutory Federal Income Tax Rate | A reconciliation between the reported Provision (benefit) for income taxes and the amount computed by applying the statutory federal income tax rate to Income before income taxes is as follows: Thirty-Nine Week Period Ended March 24, Income tax expense at statutory rate - 21.0% $ 11.9 FICA tip tax credit (12.2) Stock-based compensation excess tax benefits (2.0) State income taxes, net of federal benefit 3.3 Other (0.8) Provision (benefit) for income taxes - 0.4% $ 0.2 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 9 Months Ended |
Mar. 24, 2021 | |
Earnings Per Share [Abstract] | |
Basic to Diluted Weighted Average Number of Shares Reconciliation | Basic weighted average shares outstanding are reconciled to Diluted weighted average shares outstanding as follows: Thirteen Week Periods Ended Thirty-Nine Week Periods Ended March 24, March 25, March 24, March 25, Basic weighted average shares outstanding 45.5 37.2 45.3 37.3 Dilutive stock options 0.5 0.1 0.3 0.1 Dilutive restricted shares 0.7 0.5 0.6 0.6 Total dilutive impact 1.2 0.6 0.9 0.7 Diluted weighted average shares outstanding 46.7 37.8 46.2 38.0 Awards excluded due to anti-dilutive effect 0.0 1.4 0.7 1.3 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended | 9 Months Ended | ||
Mar. 24, 2021 | Mar. 25, 2020 | Mar. 24, 2021 | Mar. 25, 2020 | |
Segment Reporting [Abstract] | ||||
Segment Information Tables | The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP: Thirteen Week Period Ended March 24, 2021 Chili’s Maggiano’s Other Consolidated Company sales $ 749.0 $ 64.7 $ — $ 813.7 Royalties 7.7 — — 7.7 Franchise fees and other revenues 6.3 0.7 — 7.0 Franchise and other revenues 14.0 0.7 — 14.7 Total revenues 763.0 65.4 — 828.4 Food and beverage costs 198.7 15.2 — 213.9 Restaurant labor 248.7 22.1 — 270.8 Restaurant expenses 194.2 21.7 0.2 216.1 Depreciation and amortization 31.0 3.4 3.0 37.4 General and administrative 7.0 1.3 25.4 33.7 Other (gains) and charges 3.1 0.3 0.9 4.3 Total operating costs and expenses 682.7 64.0 29.5 776.2 Operating income (loss) 80.3 1.4 (29.5) 52.2 Interest expenses 1.4 — 12.7 14.1 Other income, net (0.1) — (0.2) (0.3) Income (loss) before income taxes $ 79.0 $ 1.4 $ (42.0) $ 38.4 | Thirteen Week Period Ended March 25, 2020 Chili’s Maggiano’s Other Consolidated Company sales $ 748.7 $ 91.7 $ — $ 840.4 Royalties 9.0 — — 9.0 Franchise fees and other revenues 6.7 3.9 — 10.6 Franchise and other revenues 15.7 3.9 — 19.6 Total revenues 764.4 95.6 — 860.0 Food and beverage costs 204.1 22.6 — 226.7 Restaurant labor 251.1 34.8 — 285.9 Restaurant expenses 193.2 26.9 0.1 220.2 Depreciation and amortization 36.5 3.8 3.2 43.5 General and administrative 5.9 1.1 16.3 23.3 Other (gains) and charges 14.9 2.4 2.0 19.3 Total operating costs and expenses 705.7 91.6 21.6 818.9 Operating income (loss) 58.7 4.0 (21.6) 41.1 Interest expenses 1.1 — 13.2 14.3 Other income, net (0.1) — (0.3) (0.4) Income (loss) before income taxes $ 57.7 $ 4.0 $ (34.5) $ 27.2 | Thirty-Nine Week Period Ended March 24, 2021 Chili’s Maggiano’s Other Consolidated Company sales $ 2,107.0 $ 181.1 $ — $ 2,288.1 Royalties 21.9 0.1 — 22.0 Franchise fees and other revenues 17.0 2.1 — 19.1 Franchise and other revenues 38.9 2.2 — 41.1 Total revenues 2,145.9 183.3 — 2,329.2 Food and beverage costs 563.2 43.1 — 606.3 Restaurant labor 710.3 64.3 — 774.6 Restaurant expenses 564.6 64.6 0.7 629.9 Depreciation and amortization 92.4 10.4 9.2 112.0 General and administrative 17.8 3.9 72.5 94.2 Other (gains) and charges 11.1 1.2 1.2 13.5 Total operating costs and expenses 1,959.4 187.5 83.6 2,230.5 Operating income (loss) 186.5 (4.2) (83.6) 98.7 Interest expenses 4.2 0.1 38.8 43.1 Other income, net (0.4) — (0.8) (1.2) Income (loss) before income taxes $ 182.7 $ (4.3) $ (121.6) $ 56.8 Segment assets $ 1,905.2 $ 219.7 $ 184.1 $ 2,309.0 Segment goodwill 149.7 38.4 — 188.1 Payments for property and equipment 56.3 1.4 4.7 62.4 | Thirty-Nine Week Period Ended March 25, 2020 Chili’s (1) Maggiano’s Other Consolidated Company sales $ 2,154.6 $ 297.2 $ — $ 2,451.8 Royalties 30.7 0.1 — 30.8 Franchise fees and other revenues 17.8 14.9 — 32.7 Franchise and other revenues 48.5 15.0 — 63.5 Total revenues 2,203.1 312.2 — 2,515.3 Food and beverage costs 581.6 72.0 — 653.6 Restaurant labor 735.2 111.0 — 846.2 Restaurant expenses 568.2 83.6 0.4 652.2 Depreciation and amortization 99.3 11.8 9.8 120.9 General and administrative 23.5 4.3 68.1 95.9 Other (gains) and charges 23.9 2.5 4.3 30.7 Total operating costs and expenses 2,031.7 285.2 82.6 2,399.5 Operating income (loss) 171.4 27.0 (82.6) 115.8 Interest expenses 3.1 — 41.1 44.2 Other income, net (0.4) — (1.0) (1.4) Income (loss) before income taxes $ 168.7 $ 27.0 $ (122.7) $ 73.0 Payments for property and equipment $ 68.9 $ 6.2 $ 6.9 $ 82.0 (1) Chili’s segment information for fiscal 2020 includes the results of operations related to the 116 restaurants purchased from a former franchisee subsequent to the September 5, 2019 acquisition date. Refer to Note 15 - Fiscal 2020 Chili’s Restaurant Acquisition for details. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Mar. 24, 2021 | |
Fair Value Disclosures [Abstract] | |
Non-Recurring Basis Assets - Carrying Values and Impairments Schedule | The table below presents the carrying values and related impairment expenses recorded on these impaired restaurants for the periods presented. Impairment Charges Pre-Impairment Carrying Value Thirty-Nine Week Periods Ended March 24, March 25, March 24, March 25, Underperforming restaurants Long-lived assets $ 2.2 $ 4.5 $ 2.2 $ 4.5 Reacquired franchise rights assets 0.1 — 0.1 — Operating lease assets 1.1 — 0.2 — Finance lease assets — 0.1 — 0.1 Total underperforming restaurants $ 3.4 $ 4.6 $ 2.5 $ 4.6 Closed restaurants Operating lease assets $ — $ 6.4 $ — $ 1.8 Finance lease assets — 5.8 — 1.4 Total closed restaurants $ — $ 12.2 $ — $ 3.2 |
Debt Instruments - Carrying Values and Estimated Fair Values Schedule | The 3.875% notes and 5.000% notes carrying amounts, which are net of unamortized debt issuance costs and discounts, and fair values are as follows: March 24, 2021 June 24, 2020 Carrying Amount Fair Value Carrying Amount Fair Value 3.875% notes $ 299.2 $ 303.4 $ 299.0 $ 282.8 5.000% notes 347.3 363.1 346.7 330.8 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Mar. 24, 2021 | |
Leases [Abstract] | |
Lease Expenses Included in the Consolidated Statements of Comprehensive Income | The components of lease expenses included in the Consolidated Statements of Comprehensive Income (Unaudited) were as follows: Thirteen Week Periods Ended Thirty-Nine Week Periods Ended March 24, March 25, March 24, March 25, Operating lease cost $ 41.9 $ 41.8 $ 125.6 $ 121.0 Variable lease cost 14.6 15.6 43.5 43.9 Finance lease amortization 4.2 8.0 12.4 13.7 Finance lease interest 1.4 1.2 4.3 3.2 Short-term lease cost 0.2 0.5 0.4 1.2 Sublease income (1.0) (1.2) (3.2) (3.5) Total lease costs, net $ 61.3 $ 65.9 $ 183.0 $ 179.5 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Mar. 24, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt Schedule | Long-term debt consists of the following: March 24, June 24, Revolving credit facility $ 291.3 $ 472.9 5.000% notes 350.0 350.0 3.875% notes 300.0 300.0 Finance lease obligations 97.0 102.1 Total long-term debt and finance leases 1,038.3 1,225.0 Less: unamortized debt issuance costs and discounts (3.5) (4.3) Total long-term debt, less unamortized debt issuance costs and discounts 1,034.8 1,220.7 Less: current installments of long-term debt (1) (17.8) (12.2) Long-term debt and finance leases less current installments $ 1,017.0 $ 1,208.5 (1) Current installments of long-term debt consist only of finance leases for the periods presented and are recorded within Other accrued liabilities in the Consolidated Balance Sheets (Unaudited). Refer to Note 11 - Accrued and Other Liabilities for further details. |
ACCRUED AND OTHER LIABILITIES (
ACCRUED AND OTHER LIABILITIES (Tables) | 9 Months Ended |
Mar. 24, 2021 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Other Accrued Liabilities Schedule | Other accrued liabilities consist of the following: March 24, June 24, Insurance $ 22.6 $ 20.7 Property tax 19.7 22.9 Sales tax 19.5 13.3 Current installments of finance leases 17.8 12.2 Interest 14.3 7.5 Utilities and services 8.5 8.3 Cyber security incident 3.4 3.4 State income tax payable 0.4 — Other (1) 10.1 12.3 $ 116.3 $ 100.6 (1) Other primarily consists of rent-related expenses, banquet deposits for Maggiano’s events, deferred franchise and development fees, charitable donations and other various accruals. |
Other Liabilities Schedule | Other liabilities consist of the following: March 24, June 24, Insurance $ 34.6 $ 33.7 Deferred payroll taxes (1) 27.2 12.9 Deferred franchise fees 10.8 11.6 Unrecognized tax benefits 2.1 2.1 Other 6.4 6.8 $ 81.1 $ 67.1 (1) Deferred payroll taxes consist of the second installment of the deferral of the employer portion of certain payroll related taxes as allowed under the CARES Act which is due on December 31, 2022. The first installment of $27.2 million, which is due on December 31, 2021, is recorded within Accrued payroll in the Consolidated Balance Sheets (Unaudited). |
SHAREHOLDERS' DEFICIT (Tables)
SHAREHOLDERS' DEFICIT (Tables) | 9 Months Ended |
Mar. 24, 2021 | |
Stockholders' Equity Note [Abstract] | |
Changes in Shareholders' Deficit Schedule | The changes in Total shareholders’ deficit during the thirty-nine week periods ended March 24, 2021 and March 25, 2020, respectively, were as follows: Thirty-Nine Week Period Ended March 24, 2021 Common Stock Additional Accumulated Deficit Treasury Accumulated Total Balance at June 24, 2020 $ 7.0 $ 669.4 $ (397.5) $ (751.8) $ (6.2) $ (479.1) Net income — — 10.7 — — 10.7 Other comprehensive income — — — — 0.3 0.3 Dividends — — 0.0 — — 0.0 Stock-based compensation — 3.9 — — — 3.9 Purchases of treasury stock — (1.1) — (2.8) — (3.9) Issuances of common stock — (9.0) — 12.0 — 3.0 Balance at September 23, 2020 $ 7.0 $ 663.2 $ (386.8) $ (742.6) $ (5.9) $ (465.1) Net income — — 12.0 — — 12.0 Other comprehensive income — — — — 0.5 0.5 Dividends — — 0.0 — — 0.0 Stock-based compensation — 3.0 — — — 3.0 Purchases of treasury stock — 0.0 — 0.0 — 0.0 Issuances of common stock — 1.2 — 4.3 — 5.5 Balance at December 23, 2020 $ 7.0 $ 667.4 $ (374.8) $ (738.3) $ (5.4) $ (444.1) Net income — — 33.9 — — 33.9 Other comprehensive income — — — — 0.3 0.3 Dividends — — 0.0 — — 0.0 Stock-based compensation — 4.4 — — — 4.4 Purchases of treasury stock — (0.1) — (0.1) — (0.2) Issuances of common stock — 5.7 — 9.4 — 15.1 Balance at March 24, 2021 $ 7.0 $ 677.4 $ (340.9) $ (729.0) $ (5.1) $ (390.6) Thirty-Nine Week Period Ended March 25, 2020 Common Stock Additional Retained Treasury Accumulated Total Balance at June 26, 2019 $ 17.6 $ 522.0 $ 2,771.2 $ (4,083.4) $ (5.6) $ (778.2) Effect of ASC 842 adoption — — 195.9 — — 195.9 Net income — — 14.9 — — 14.9 Other comprehensive loss — — — — (0.2) (0.2) Dividends ($0.38 per share) — — (14.6) — — (14.6) Stock-based compensation — 7.1 — — — 7.1 Purchases of treasury stock — (0.3) — (11.0) — (11.3) Issuances of common stock — (3.7) — 5.0 — 1.3 Balance at September 25, 2019 $ 17.6 $ 525.1 $ 2,967.4 $ (4,089.4) $ (5.8) $ (585.1) Net income — — 27.9 — — 27.9 Other comprehensive income — — — — 0.1 0.1 Dividends ($0.38 per share) — — (14.6) — — (14.6) Stock-based compensation — 2.6 — — — 2.6 Purchases of treasury stock — 0.0 — 0.0 — 0.0 Issuances of common stock — (0.4) — 0.6 — 0.2 Retirement of treasury stock (11.4) — (3,345.4) 3,356.8 — — Balance at December 25, 2019 $ 6.2 $ 527.3 $ (364.7) $ (732.0) $ (5.7) $ (568.9) Net income — — 30.8 — — 30.8 Other comprehensive loss — — — — (1.0) (1.0) Dividends ($0.38 per share) — — (14.0) — — (14.0) Stock-based compensation — (0.7) — — — (0.7) Purchases of treasury stock — 0.0 — (21.0) — (21.0) Issuances of common stock — (0.5) — 0.6 — 0.1 Balance at March 25, 2020 $ 6.2 $ 526.1 $ (347.9) $ (752.4) $ (6.7) $ (574.7) |
Stock-based Compensation Schedule | The following table presents the stock options and restricted share awards granted, and related weighted average exercise price and fair value per share amounts. Thirty-Nine Week Periods Ended March 24, March 25, Stock options Stock options granted — 0.3 Weighted average exercise price per share $ — $ 38.51 Weighted average fair value per share $ — $ 6.83 Restricted share awards Restricted share awards granted 0.5 0.3 Weighted average fair value per share $ 40.49 $ 38.68 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Mar. 24, 2021 | |
Supplemental Cash Flow Information [Abstract] | |
Cash Paid for Income Taxes and Interest Schedule | Cash paid for income taxes and interest is as follows: Thirty-Nine Week Periods Ended March 24, March 25, Income taxes, net of (refunds) $ 2.8 $ (4.7) Interest, net of amounts capitalized 30.8 32.6 |
Non-cash Operating, Investing and Financing Activities Schedule | Non-cash operating, investing and financing activities are as follows: Thirty-Nine Week Periods Ended March 24, March 25, Operating lease additions (1) $ 51.4 $ 216.4 Accrued capital expenditures 4.3 14.7 Retirement of fully depreciated assets 13.1 14.0 Dividends declared but not paid 0.0 14.8 (1) Operating lease additions include new operating lease assets obtained in exchange for new operating lease liabilities. The thirty-nine week period ended March 25, 2020 primarily included operating lease additions associated with the 116 restaurants purchased from a former franchisee on September 5, 2019 acquisition date. Refer to Note 15 - Fiscal 2020 Chili’s Restaurant Acquisition for details. |
FISCAL 2020 CHILI'S RESTAURAN_2
FISCAL 2020 CHILI'S RESTAURANT ACQUISITION (Tables) | 9 Months Ended |
Mar. 24, 2021 | |
Business Combinations [Abstract] | |
Fair Value of Acquired Assets and Liabilities | The final purchase price accounting was completed in the third quarter of fiscal 2020, and the final amounts recorded for the fair value of acquired assets and liabilities at the acquisition date were as follows: Fair Value September 5, 2019 Current assets (1) $ 7.3 Property and equipment 60.3 Operating lease assets 163.5 Reacquired franchise rights (2) 6.9 Goodwill (3) 22.4 Total assets acquired 260.4 Current liabilities (4) 9.1 Operating lease liabilities, less current portion 158.3 Total liabilities assumed 167.4 Net assets acquired (5) $ 93.0 (1) Current assets included petty cash, inventory, and restaurant supplies. (2) Reacquired franchise rights have a weighted average amortization period of approximately 8 years. (3) Goodwill is expected to be deductible for tax purposes. The portion of the purchase price attributable to goodwill represents the benefits expected as a result of the acquisition, including sales and unit growth opportunities, and the benefit of the assembled workforce of the acquired restaurants. (4) Current liabilities included the current portion of operating lease liabilities, gift card liability and accrued property tax. (5) Net assets acquired at fair value are equal to the total purchase price of $99.0 million, less $3.2 million of closing adjustments and $2.8 million allocated to the prepayment of leases entered into with the franchisee. |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | Mar. 24, 2021RestaurantsterritoriesCountryLocation |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,657 |
Number of U.S. territories in which entity operates | Location | 2 |
Chili's Restaurants [Member] | |
Franchisor Disclosure [Line Items] | |
Number of Foreign Countries Operating In | Country | 27 |
Number of U.S. territories in which entity operates | territories | 2 |
Entity Operated Units [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,120 |
Franchised Units [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 537 |
REVENUE RECOGNITION (Deferred F
REVENUE RECOGNITION (Deferred Franchise and Development Fees) (Details) - Deferred Franchise and Development Fees $ in Millions | 9 Months Ended |
Mar. 24, 2021USD ($) | |
Change in deferred franchise and development fees [Roll Forward] | |
Balance as of June 24, 2020 | $ 12.7 |
Additions | 0.3 |
Amount recognized to Franchise and other revenues | (1.3) |
Other | 0.1 |
Balance as of March 24, 2021 | $ 11.8 |
REVENUE RECOGNITION (Remaining
REVENUE RECOGNITION (Remaining Deferred Franchise and Development Fees to be Recognized) (Details) $ in Millions | Mar. 24, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 11.8 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-03-25 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 0.3 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 1 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-06-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 1 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-06-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 1 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-06-27 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 0.9 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-06-26 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 7.6 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 16 years |
REVENUE RECOGNITION (Deferred G
REVENUE RECOGNITION (Deferred Gift Card Revenues) (Details) $ in Millions | 9 Months Ended |
Mar. 24, 2021USD ($) | |
Deferred Gift Card Liability Rollforward [Roll Forward] | |
Balance as of June 24, 2020 | $ 109.9 |
Balance as of March 24, 2021 | 110.9 |
Gift card sales | |
Deferred Gift Card Liability Rollforward [Roll Forward] | |
Increase in Gift card liability | 88.6 |
Gift card redemptions | |
Deferred Gift Card Liability Rollforward [Roll Forward] | |
Gift card redemptions recognized to Company sales | (79.8) |
Gift card breakage | |
Deferred Gift Card Liability Rollforward [Roll Forward] | |
Gift card breakage recognized to Franchise and other revenues | (8) |
Gift card other | |
Deferred Gift Card Liability Rollforward [Roll Forward] | |
Increase in Gift card liability | 0.2 |
Deferred Franchise and Development Fees | |
Deferred Gift Card Liability Rollforward [Roll Forward] | |
Gift card breakage recognized to Franchise and other revenues | $ (1.3) |
OTHER GAINS AND CHARGES (Schedu
OTHER GAINS AND CHARGES (Schedule of Other Gains and Charges) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Mar. 24, 2021USD ($)Restaurants | Mar. 25, 2020USD ($) | Mar. 24, 2021USD ($)Restaurants | Mar. 25, 2020USD ($)Restaurants | Sep. 05, 2019Restaurants | ||
Restructuring Cost and Reserve [Line Items] | ||||||
Loss from natural disasters, net of (insurance recoveries) | $ 1.8 | $ (0.9) | $ 2 | $ (0.6) | ||
Remodel-related costs | 0.9 | 0.6 | 1.8 | 2.1 | ||
COVID-19 related charges | 0.9 | 16.1 | 3.1 | 16.1 | ||
Restaurant closure charges | 0.3 | 0.3 | 2.2 | 3.4 | ||
Foreign currency transaction (gain) loss | 0.1 | 2.3 | (0.3) | 2.2 | ||
Restaurant impairment charges | 0 | 0 | 2.5 | 4.6 | ||
Lease modification gain, net | 0 | 0 | (0.5) | (3.1) | ||
Acquisition of franchise restaurants costs, net | 0 | 1.1 | 0 | 2.6 | ||
Other | 0.3 | (0.2) | 2.7 | 3.4 | ||
Other (gains) and charges | $ 4.3 | 19.3 | $ 13.5 | 30.7 | ||
Employee assistance expenses | 15.5 | |||||
Inventory spoilage | 0.6 | |||||
Number of restaurants | Restaurants | 1,657 | 1,657 | ||||
Chili's restaurant acquisition [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Acquisition of franchise restaurants costs, net | 1.1 | 2.6 | ||||
Number of restaurants | Restaurants | 116 | |||||
Chili's Restaurants [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other (gains) and charges | $ 3.1 | 14.9 | $ 11.1 | $ 23.9 | [1] | |
Number of underperforming restaurants | Restaurants | 10 | 10 | ||||
Maggiano's Restaurants [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other (gains) and charges | $ 0.3 | $ 2.4 | $ 1.2 | $ 2.5 | ||
Number of underperforming restaurants | Restaurants | 3 | |||||
[1] | Chili’s segment information for fiscal 2020 includes the results of operations related to the 116 restaurants purchased from a former franchisee subsequent to the September 5, 2019 acquisition date. Refer to Note 15 - Fiscal 2020 Chili’s Restaurant Acquisition for details. |
INCOME TAXES (Effective and Sta
INCOME TAXES (Effective and Statutory Tax Rates) (Details) | 3 Months Ended | 9 Months Ended | ||
Mar. 24, 2021Rate | Mar. 25, 2020Rate | Mar. 24, 2021Rate | Mar. 25, 2020Rate | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 11.70% | (13.20%) | 0.40% | (0.80%) |
Federal statutory tax rate | 21.00% | 21.00% |
INCOME TAXES (Reconciliation Be
INCOME TAXES (Reconciliation Between Reported and Computed by Statutory Federal Income Tax Rate) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 24, 2021 | Mar. 25, 2020 | Mar. 24, 2021 | Mar. 25, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense at statutory rate | $ 11.9 | |||
FICA tip tax credit | (12.2) | |||
Stock-based compensation excess tax benefits | (2) | |||
State income taxes, net of federal benefit | 3.3 | |||
Other | (0.8) | |||
Provision (benefit) for income taxes | $ 4.5 | $ (3.6) | $ 0.2 | $ (0.6) |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 24, 2021 | Mar. 25, 2020 | Mar. 24, 2021 | Mar. 25, 2020 | |
Reconciliation of Weighted Average Shares Outstanding [Line Items] | ||||
Basic weighted average shares outstanding | 45.5 | 37.2 | 45.3 | 37.3 |
Total dilutive impact | 1.2 | 0.6 | 0.9 | 0.7 |
Diluted weighted average shares outstanding | 46.7 | 37.8 | 46.2 | 38 |
Awards excluded due to anti-dilutive effect | 0 | 1.4 | 0.7 | 1.3 |
Stock Options [Member] | ||||
Reconciliation of Weighted Average Shares Outstanding [Line Items] | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0.5 | 0.1 | 0.3 | 0.1 |
Restricted Share Award [Member] | ||||
Reconciliation of Weighted Average Shares Outstanding [Line Items] | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0.7 | 0.5 | 0.6 | 0.6 |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Segment Reporting) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Mar. 24, 2021USD ($)RestaurantsLocationCountryterritories | Mar. 25, 2020USD ($) | Mar. 24, 2021USD ($)RestaurantsLocationCountryterritories | Mar. 25, 2020USD ($) | Jun. 24, 2020USD ($) | Sep. 05, 2019USD ($)Restaurants | |||
Segment Reporting Information [Line Items] | ||||||||
Number of U.S. territories in which entity operates | Location | 2 | 2 | ||||||
Segment Information, disclosure of major customers | We do not rely on any major customers as a source of sales, | |||||||
Total revenues | $ 828.4 | $ 860 | $ 2,329.2 | $ 2,515.3 | ||||
Food and beverage costs | 213.9 | 226.7 | 606.3 | 653.6 | ||||
Restaurant labor | 270.8 | 285.9 | 774.6 | 846.2 | ||||
Restaurant expenses | 216.1 | 220.2 | 629.9 | 652.2 | ||||
Depreciation and amortization | 37.4 | 43.5 | 112 | 120.9 | ||||
General and administrative | 33.7 | 23.3 | 94.2 | 95.9 | ||||
Other (gains) and charges | 4.3 | 19.3 | 13.5 | 30.7 | ||||
Total operating costs and expenses | 776.2 | 818.9 | 2,230.5 | 2,399.5 | ||||
Operating income (loss) | 52.2 | 41.1 | 98.7 | 115.8 | ||||
Interest expenses | 14.1 | 14.3 | 43.1 | 44.2 | ||||
Other income, net | (0.3) | (0.4) | (1.2) | (1.4) | ||||
Income before provision for income taxes | 38.4 | 27.2 | 56.8 | 73 | ||||
Segment assets | 2,309 | 2,309 | $ 2,356 | |||||
Segment goodwill | $ 188.1 | 188.1 | $ 187.6 | |||||
Payments for property and equipment | $ 62.4 | 82 | ||||||
Number of restaurants | Restaurants | 1,657 | 1,657 | ||||||
Chili's Restaurants [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Number of foreign countries in which entity operates | Country | 27 | 27 | ||||||
Number of U.S. territories in which entity operates | territories | 2 | 2 | ||||||
Total revenues | $ 763 | 764.4 | $ 2,145.9 | 2,203.1 | [1] | |||
Food and beverage costs | 198.7 | 204.1 | 563.2 | 581.6 | [1] | |||
Restaurant labor | 248.7 | 251.1 | 710.3 | 735.2 | [1] | |||
Restaurant expenses | 194.2 | 193.2 | 564.6 | 568.2 | [1] | |||
Depreciation and amortization | 31 | 36.5 | 92.4 | 99.3 | [1] | |||
General and administrative | 7 | 5.9 | 17.8 | 23.5 | [1] | |||
Other (gains) and charges | 3.1 | 14.9 | 11.1 | 23.9 | [1] | |||
Total operating costs and expenses | 682.7 | 705.7 | 1,959.4 | 2,031.7 | [1] | |||
Operating income (loss) | 80.3 | 58.7 | 186.5 | 171.4 | [1] | |||
Interest expenses | 1.4 | 1.1 | 4.2 | 3.1 | [1] | |||
Other income, net | (0.1) | (0.1) | (0.4) | (0.4) | [1] | |||
Income before provision for income taxes | 79 | 57.7 | 182.7 | 168.7 | [1] | |||
Segment assets | 1,905.2 | 1,905.2 | ||||||
Segment goodwill | 149.7 | 149.7 | ||||||
Payments for property and equipment | 56.3 | 68.9 | [1] | |||||
Maggiano's Restaurants [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total revenues | 65.4 | 95.6 | 183.3 | 312.2 | ||||
Food and beverage costs | 15.2 | 22.6 | 43.1 | 72 | ||||
Restaurant labor | 22.1 | 34.8 | 64.3 | 111 | ||||
Restaurant expenses | 21.7 | 26.9 | 64.6 | 83.6 | ||||
Depreciation and amortization | 3.4 | 3.8 | 10.4 | 11.8 | ||||
General and administrative | 1.3 | 1.1 | 3.9 | 4.3 | ||||
Other (gains) and charges | 0.3 | 2.4 | 1.2 | 2.5 | ||||
Total operating costs and expenses | 64 | 91.6 | 187.5 | 285.2 | ||||
Operating income (loss) | 1.4 | 4 | (4.2) | 27 | ||||
Interest expenses | 0 | 0 | 0.1 | 0 | ||||
Other income, net | 0 | 0 | 0 | 0 | ||||
Income before provision for income taxes | 1.4 | 4 | (4.3) | 27 | ||||
Segment assets | 219.7 | 219.7 | ||||||
Segment goodwill | 38.4 | 38.4 | ||||||
Payments for property and equipment | 1.4 | 6.2 | ||||||
Corporate and Other [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Food and beverage costs | 0 | 0 | 0 | 0 | ||||
Restaurant labor | 0 | 0 | 0 | 0 | ||||
Restaurant expenses | 0.2 | 0.1 | 0.7 | 0.4 | ||||
Depreciation and amortization | 3 | 3.2 | 9.2 | 9.8 | ||||
General and administrative | 25.4 | 16.3 | 72.5 | 68.1 | ||||
Other (gains) and charges | 0.9 | 2 | 1.2 | 4.3 | ||||
Total operating costs and expenses | 29.5 | 21.6 | 83.6 | 82.6 | ||||
Operating income (loss) | (29.5) | (21.6) | (83.6) | (82.6) | ||||
Interest expenses | 12.7 | 13.2 | 38.8 | 41.1 | ||||
Other income, net | (0.2) | (0.3) | (0.8) | (1) | ||||
Income before provision for income taxes | (42) | (34.5) | (121.6) | (122.7) | ||||
Segment assets | 184.1 | 184.1 | ||||||
Segment goodwill | 0 | 0 | ||||||
Payments for property and equipment | 4.7 | 6.9 | ||||||
Company sales [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 813.7 | 840.4 | 2,288.1 | 2,451.8 | ||||
Company sales [Member] | Chili's Restaurants [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 749 | 748.7 | 2,107 | 2,154.6 | [1] | |||
Company sales [Member] | Maggiano's Restaurants [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 64.7 | 91.7 | 181.1 | 297.2 | ||||
Company sales [Member] | Corporate and Other [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 0 | 0 | 0 | 0 | ||||
Royalties [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 7.7 | 9 | 22 | 30.8 | ||||
Royalties [Member] | Chili's Restaurants [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 7.7 | 9 | 21.9 | 30.7 | [1] | |||
Royalties [Member] | Maggiano's Restaurants [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 0 | 0 | 0.1 | 0.1 | ||||
Royalties [Member] | Corporate and Other [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 0 | 0 | 0 | 0 | ||||
Franchise fees and other revenues [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 7 | 10.6 | 19.1 | 32.7 | ||||
Franchise fees and other revenues [Member] | Chili's Restaurants [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 6.3 | 6.7 | 17 | 17.8 | [1] | |||
Franchise fees and other revenues [Member] | Maggiano's Restaurants [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 0.7 | 3.9 | 2.1 | 14.9 | ||||
Franchise fees and other revenues [Member] | Corporate and Other [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 0 | 0 | 0 | 0 | ||||
Franchise and other revenues [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 14.7 | 19.6 | 41.1 | 63.5 | ||||
Franchise and other revenues [Member] | Chili's Restaurants [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 14 | 15.7 | 38.9 | 48.5 | [1] | |||
Franchise and other revenues [Member] | Maggiano's Restaurants [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | 0.7 | 3.9 | 2.2 | 15 | ||||
Franchise and other revenues [Member] | Corporate and Other [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue from contract with customer, excluding assessed tax | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Chili's restaurant acquisition [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Segment goodwill | [2] | $ 22.4 | ||||||
Number of restaurants | Restaurants | 116 | |||||||
[1] | Chili’s segment information for fiscal 2020 includes the results of operations related to the 116 restaurants purchased from a former franchisee subsequent to the September 5, 2019 acquisition date. Refer to Note 15 - Fiscal 2020 Chili’s Restaurant Acquisition for details. | |||||||
[2] | Goodwill is expected to be deductible for tax purposes. The portion of the purchase price attributable to goodwill represents the benefits expected as a result of the acquisition, including sales and unit growth opportunities, and the benefit of the assembled workforce of the acquired restaurants. |
FAIR VALUE MEASUREMENTS (Non-Fi
FAIR VALUE MEASUREMENTS (Non-Financial Assets Measured on a Non-Recurring Basis) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Mar. 24, 2021USD ($) | Mar. 25, 2020USD ($) | Mar. 24, 2021USD ($)Restaurants | Mar. 25, 2020USD ($)Restaurants | Jun. 24, 2020USD ($) | |
Additional Fair Value Elements [Abstract] | |||||
Accumulated amortization associated with definite-lived intangible assets, | $ 9.2 | $ 9.2 | $ 7.5 | ||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Restaurant impairment charges | 0 | $ 0 | 2.5 | $ 4.6 | |
Impairment of Goodwill | $ 0 | $ 0 | |||
Chili's Restaurants [Member] | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Number of underperforming restaurants | Restaurants | 10 | 10 | |||
Maggiano's Restaurants [Member] | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Number of underperforming restaurants | Restaurants | 3 | ||||
Underperforming Restaurants [Member] | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Carrying value of impaired long lived assets | 2.2 | 4.5 | $ 2.2 | $ 4.5 | |
Impairment of Long-Lived Assets Held-for-use | 2.2 | 4.5 | |||
Carrying value of impaired franchise rights | 0.1 | 0 | 0.1 | 0 | |
Impairment of franchise rights | 0.1 | 0 | |||
Carrying value of impaired operating lease assets | 1.1 | 0 | 1.1 | 0 | |
Impairment amount of operating lease assets | 0.2 | 0 | |||
Carrying value of impaired finance lease assets | 0 | 0.1 | 0 | 0.1 | |
Impairment amount of finance lease | 0 | 0.1 | |||
Total carrying value of impaired assets of underperforming restaurants | 3.4 | 4.6 | 3.4 | 4.6 | |
Restaurant impairment charges | 2.5 | 4.6 | |||
Closed Restaurants [Member] | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Carrying value of impaired operating lease assets | 0 | 6.4 | 0 | 6.4 | |
Impairment amount of operating lease assets | 0 | 1.8 | |||
Carrying value of impaired finance lease assets | 0 | 5.8 | 0 | 5.8 | |
Impairment amount of finance lease | 0 | 1.4 | |||
Total carrying value of impaired assets of closed restaurants | $ 0 | $ 12.2 | 0 | 12.2 | |
Impairment of Long-Lived Assets to be Disposed of | 0 | 3.2 | |||
Liquor Licenses [Member] | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Impairment of liquor licenses | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule of Carrying and Fair Values of Financial Instruments) (Details) - USD ($) $ in Millions | Mar. 24, 2021 | Jun. 24, 2020 |
3.875% notes [Member] | ||
Fair Value Disclosure, Senior Notes [Line Items] | ||
Notes, stated percentage interest rate | 3.875% | |
Carrying value of notes | $ 299.2 | $ 299 |
Fair value of notes | $ 303.4 | 282.8 |
5.000% notes [Member] | ||
Fair Value Disclosure, Senior Notes [Line Items] | ||
Notes, stated percentage interest rate | 5.00% | |
Carrying value of notes | $ 347.3 | 346.7 |
Fair value of notes | $ 363.1 | $ 330.8 |
LEASES (Disclosure of Lease Exp
LEASES (Disclosure of Lease Expenses) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 24, 2021 | Mar. 25, 2020 | Mar. 24, 2021 | Mar. 25, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 41.9 | $ 41.8 | $ 125.6 | $ 121 |
Variable lease cost | 14.6 | 15.6 | 43.5 | 43.9 |
Finance lease amortization | 4.2 | 8 | 12.4 | 13.7 |
Finance lease interest | 1.4 | 1.2 | 4.3 | 3.2 |
Short-term lease cost | 0.2 | 0.5 | 0.4 | 1.2 |
Sublease income | (1) | (1.2) | (3.2) | (3.5) |
Total lease costs, net | $ 61.3 | $ 65.9 | $ 183 | $ 179.5 |
DEBT (Schedule of Long-Term Deb
DEBT (Schedule of Long-Term Debt) (Details) - USD ($) $ in Millions | Mar. 24, 2021 | Jun. 24, 2020 | |
Debt Instrument [Line Items] | |||
Finance lease obligations | $ 97 | $ 102.1 | |
Total long-term debt and finance leases | 1,038.3 | 1,225 | |
Less: unamortized debt issuance costs and discounts | (3.5) | (4.3) | |
Total long-term debt, less unamortized debt issuance costs and discounts | 1,034.8 | 1,220.7 | |
Less: current installments of long-term debt | [1] | (17.8) | (12.2) |
Long-term debt less current installments | 1,017 | 1,208.5 | |
5.000% notes [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | 350 | 350 | |
3.875% notes [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | 300 | 300 | |
$1B Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | $ 291.3 | $ 472.9 | |
[1] | Current installments of long-term debt consist only of finance leases for the periods presented and are recorded within Other accrued liabilities in the Consolidated Balance Sheets (Unaudited). Refer to Note 11 - Accrued and Other Liabilities for further details. |
DEBT (Additional Information) (
DEBT (Additional Information) (Details) - $1B Revolving Credit Facility [Member] $ in Millions | 9 Months Ended |
Mar. 24, 2021USD ($) | |
Line of Credit Facility [Line Items] | |
Net repayments | $ (181.6) |
Revolving credit facility, maximum borrowing capacity | 1,000 |
Revolving credit facility, remaining borrowing capacity | $ 708.7 |
Basis spread on variable rate | 3.00% |
Revolving credit facility, interest rate during period | 3.75% |
Debt issuance costs | $ 2.2 |
Revolving credit facility, covenant compliance | we were in compliance with our covenants pursuant to the amended revolving credit facility and under the terms of the indentures governing our 3.875% notes and 5.000% notes |
7th Amendment [Member] | |
Line of Credit Facility [Line Items] | |
Revolving credit facility, expiration date | Dec. 12, 2022 |
Credit facility, future borrowing capacity | $ 900 |
Credit facility, date of change in maximum capacity | Sep. 12, 2021 |
Interest rate reduction upon issuance of certain debt or preferred equity interests exceeding $250.0 million | 0.25% |
Rate reduction on undrawn fee upon issuance of certain debt or preferred equity interests exceeding $250.0 million | 0.10% |
Maximum [Member] | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 3.00% |
Undrawn commitment fee spread | 0.50% |
Minimum [Member] | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 2.25% |
Undrawn commitment fee spread | 0.35% |
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |
Line of Credit Facility [Line Items] | |
Revolving credit facility, interest rate during period | 0.75% |
ACCRUED AND OTHER LIABILITIES_2
ACCRUED AND OTHER LIABILITIES (Schedule of Other Accrued Liabilities) (Details) - USD ($) $ in Millions | Mar. 24, 2021 | Jun. 24, 2020 | |
Other accrued liabilities [Line Items] | |||
Insurance | $ 22.6 | $ 20.7 | |
Property tax | 19.7 | 22.9 | |
Sales tax | 19.5 | 13.3 | |
Current installments of finance leases | 17.8 | 12.2 | |
Interest | 14.3 | 7.5 | |
Utilities and services | 8.5 | 8.3 | |
Cyber security incident | 3.4 | 3.4 | |
State income tax payable | 0.4 | 0 | |
Other | [1] | 10.1 | 12.3 |
Other accrued liabilities | $ 116.3 | $ 100.6 | |
[1] | Other primarily consists of rent-related expenses, banquet deposits for Maggiano’s events, deferred franchise and development fees, charitable donations and other various accruals. |
ACCRUED AND OTHER LIABILITIES_3
ACCRUED AND OTHER LIABILITIES (Schedule of Other Liabilities) (Details) - USD ($) $ in Millions | Mar. 24, 2021 | Jun. 24, 2020 | |
Other liabilities [Line Items] | |||
Insurance | $ 34.6 | $ 33.7 | |
Deferred payroll taxes | [1] | 27.2 | 12.9 |
Deferred franchise fees | 10.8 | 11.6 | |
Unrecognized tax benefits | 2.1 | 2.1 | |
Other | 6.4 | 6.8 | |
Other liabilities | $ 81.1 | $ 67.1 | |
[1] | Deferred payroll taxes consist of the second installment of the deferral of the employer portion of certain payroll related taxes as allowed under the CARES Act which is due on December 31, 2022. The first installment of $27.2 million, which is due on December 31, 2021, is recorded within Accrued payroll in the Consolidated Balance Sheets (Unaudited). |
SHAREHOLDERS' DEFICIT (Changes
SHAREHOLDERS' DEFICIT (Changes in Shareholders' Deficit) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Mar. 24, 2021 | Dec. 23, 2020 | Sep. 23, 2020 | Mar. 25, 2020 | Dec. 25, 2019 | Sep. 25, 2019 | Mar. 24, 2021 | Mar. 25, 2020 | |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||||||||
Beginning balance | $ (444.1) | $ (465.1) | $ (479.1) | $ (568.9) | $ (585.1) | $ (778.2) | $ (479.1) | $ (778.2) |
Net income | 33.9 | 12 | 10.7 | 30.8 | 27.9 | 14.9 | 56.6 | 73.6 |
Other comprehensive income (loss) | 0.3 | 0.5 | 0.3 | (1) | 0.1 | (0.2) | 1.1 | (1.1) |
Dividends | 0 | 0 | 0 | (14) | (14.6) | (14.6) | ||
Stock-based compensation | 4.4 | 3 | 3.9 | (0.7) | 2.6 | 7.1 | ||
Purchases of treasury stock | (0.2) | 0 | (3.9) | (21) | 0 | (11.3) | ||
Issuances of common stock | 15.1 | 5.5 | 3 | 0.1 | 0.2 | 1.3 | ||
Retirement of treasury stock | 0 | |||||||
Ending balance | (390.6) | (444.1) | (465.1) | (574.7) | (568.9) | (585.1) | (390.6) | (574.7) |
Cumulative Effect, Period of Adoption, Adjustment | ASC 842 Leases [Member] | ||||||||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||||||||
Beginning balance | 195.9 | 195.9 | ||||||
Common Stock [Member] | ||||||||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||||||||
Beginning balance | 7 | 7 | 7 | 6.2 | 17.6 | 17.6 | 7 | 17.6 |
Net income | 0 | 0 | 0 | 0 | 0 | 0 | ||
Other comprehensive income (loss) | 0 | 0 | 0 | 0 | 0 | 0 | ||
Dividends | 0 | 0 | 0 | 0 | 0 | 0 | ||
Stock-based compensation | 0 | 0 | 0 | 0 | 0 | 0 | ||
Purchases of treasury stock | 0 | 0 | 0 | 0 | 0 | 0 | ||
Issuances of common stock | 0 | 0 | 0 | 0 | 0 | 0 | ||
Retirement of treasury stock | (11.4) | |||||||
Ending balance | 7 | 7 | 7 | 6.2 | 6.2 | 17.6 | 7 | 6.2 |
Additional Paid-in Capital [Member] | ||||||||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||||||||
Beginning balance | 667.4 | 663.2 | 669.4 | 527.3 | 525.1 | 522 | 669.4 | 522 |
Net income | 0 | 0 | 0 | 0 | 0 | 0 | ||
Other comprehensive income (loss) | 0 | 0 | 0 | 0 | 0 | 0 | ||
Dividends | 0 | 0 | 0 | 0 | 0 | 0 | ||
Stock-based compensation | 4.4 | 3 | 3.9 | (0.7) | 2.6 | 7.1 | ||
Purchases of treasury stock | (0.1) | 0 | (1.1) | 0 | 0 | (0.3) | ||
Issuances of common stock | 5.7 | 1.2 | (9) | (0.5) | (0.4) | (3.7) | ||
Retirement of treasury stock | 0 | |||||||
Ending balance | 677.4 | 667.4 | 663.2 | 526.1 | 527.3 | 525.1 | 677.4 | 526.1 |
(Accumulated Deficit) Retained Earnings [Member] | ||||||||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||||||||
Beginning balance | (374.8) | (386.8) | (397.5) | (364.7) | 2,967.4 | 2,771.2 | (397.5) | 2,771.2 |
Net income | 33.9 | 12 | 10.7 | 30.8 | 27.9 | 14.9 | ||
Other comprehensive income (loss) | 0 | 0 | 0 | 0 | 0 | 0 | ||
Dividends | 0 | 0 | 0 | (14) | (14.6) | (14.6) | ||
Stock-based compensation | 0 | 0 | 0 | 0 | 0 | 0 | ||
Purchases of treasury stock | 0 | 0 | 0 | 0 | 0 | 0 | ||
Issuances of common stock | 0 | 0 | 0 | 0 | 0 | 0 | ||
Retirement of treasury stock | (3,345.4) | |||||||
Ending balance | (340.9) | (374.8) | (386.8) | (347.9) | (364.7) | 2,967.4 | (340.9) | (347.9) |
(Accumulated Deficit) Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment | ASC 842 Leases [Member] | ||||||||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||||||||
Beginning balance | 195.9 | 195.9 | ||||||
Treasury Stock [Member] | ||||||||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||||||||
Beginning balance | (738.3) | (742.6) | (751.8) | (732) | (4,089.4) | (4,083.4) | (751.8) | (4,083.4) |
Net income | 0 | 0 | 0 | 0 | 0 | 0 | ||
Other comprehensive income (loss) | 0 | 0 | 0 | 0 | 0 | 0 | ||
Dividends | 0 | 0 | 0 | 0 | 0 | 0 | ||
Stock-based compensation | 0 | 0 | 0 | 0 | 0 | 0 | ||
Purchases of treasury stock | (0.1) | 0 | (2.8) | (21) | 0 | (11) | ||
Issuances of common stock | 9.4 | 4.3 | 12 | 0.6 | 0.6 | 5 | ||
Retirement of treasury stock | 3,356.8 | |||||||
Ending balance | (729) | (738.3) | (742.6) | (752.4) | (732) | (4,089.4) | (729) | (752.4) |
Accumulated Other Comprehensive (Loss) Income [Member] | ||||||||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | ||||||||
Beginning balance | (5.4) | (5.9) | (6.2) | (5.7) | (5.8) | (5.6) | (6.2) | (5.6) |
Net income | 0 | 0 | 0 | 0 | 0 | 0 | ||
Other comprehensive income (loss) | 0.3 | 0.5 | 0.3 | (1) | 0.1 | (0.2) | ||
Dividends | 0 | 0 | 0 | 0 | 0 | 0 | ||
Stock-based compensation | 0 | 0 | 0 | 0 | 0 | 0 | ||
Purchases of treasury stock | 0 | 0 | 0 | 0 | 0 | 0 | ||
Issuances of common stock | 0 | 0 | 0 | 0 | 0 | 0 | ||
Retirement of treasury stock | 0 | |||||||
Ending balance | $ (5.1) | $ (5.4) | $ (5.9) | $ (6.7) | $ (5.7) | $ (5.8) | $ (5.1) | $ (6.7) |
SHAREHOLDERS' DEFICIT (Dividend
SHAREHOLDERS' DEFICIT (Dividends) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |
Mar. 25, 2020 | Mar. 24, 2021 | Mar. 25, 2020 | |
Dividends per share declared | $ 0.38 | ||
Payments of dividends | $ 1.5 | $ 43.3 |
SHAREHOLDERS' DEFICIT (Stock-ba
SHAREHOLDERS' DEFICIT (Stock-based Compensation) (Details) - $ / shares shares in Millions | 9 Months Ended | |
Mar. 24, 2021 | Mar. 25, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options granted | 0 | 0.3 |
Weighted average exercise price per share | $ 0 | $ 38.51 |
Weighted average fair value per share | $ 0 | $ 6.83 |
Restricted share awards granted | 0.5 | 0.3 |
Weighted average fair value per share | $ 40.49 | $ 38.68 |
SHAREHOLDERS' DEFICIT (Share Re
SHAREHOLDERS' DEFICIT (Share Repurchases) (Details) - USD ($) shares in Millions, $ in Millions | 9 Months Ended | |
Mar. 24, 2021 | Mar. 25, 2020 | |
Share Repurchases [Abstract] | ||
Number of shares repurchased | 0.1 | 0.8 |
Purchases of treasury stock | $ 4.1 | $ 32.3 |
SHAREHOLDERS' DEFICIT (Effect o
SHAREHOLDERS' DEFICIT (Effect of Adoption of ASC 842) (Details) - USD ($) $ in Millions | Mar. 24, 2021 | Dec. 23, 2020 | Sep. 23, 2020 | Jun. 24, 2020 | Mar. 25, 2020 | Dec. 25, 2019 | Sep. 25, 2019 | Jun. 26, 2019 |
Shareholders' Deficit | $ (390.6) | $ (444.1) | $ (465.1) | $ (479.1) | $ (574.7) | $ (568.9) | $ (585.1) | $ (778.2) |
Cumulative Effect, Period of Adoption, Adjustment | ASC 842 Leases [Member] | ||||||||
Shareholders' Deficit | 195.9 | |||||||
(Accumulated Deficit) Retained Earnings [Member] | ||||||||
Shareholders' Deficit | $ (340.9) | $ (374.8) | $ (386.8) | $ (397.5) | $ (347.9) | $ (364.7) | $ 2,967.4 | 2,771.2 |
(Accumulated Deficit) Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment | ASC 842 Leases [Member] | ||||||||
Shareholders' Deficit | $ 195.9 |
SHAREHOLDERS' DEFICIT Retiremen
SHAREHOLDERS' DEFICIT Retirement of Treasury Stock (Details) shares in Millions | 3 Months Ended |
Dec. 25, 2019$ / sharesshares | |
Equity [Abstract] | |
Retirement of treasury stock | shares | 114 |
Treasury stock retired average price per share | $ / shares | $ 29.45 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Cash Paid for Income Taxes and Interest) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Mar. 24, 2021 | Mar. 25, 2020 | |
Income taxes, net of (refunds) | $ 2.8 | $ (4.7) |
Interest, net of amounts capitalized | $ 30.8 | $ 32.6 |
SUPPLEMENTAL CASH FLOW INFORM_4
SUPPLEMENTAL CASH FLOW INFORMATION (Non-Cash Operating, Investing and Financing Activities) (Details) $ in Millions | 9 Months Ended | |||
Mar. 24, 2021USD ($)Restaurants | Mar. 25, 2020USD ($) | Sep. 05, 2019Restaurants | ||
Other Significant Noncash Transactions [Line Items] | ||||
Operating lease additions | $ 51.4 | $ 216.4 | [1] | |
Accrued capital expenditures | 4.3 | 14.7 | ||
Retirement of fully depreciated assets | $ 13.1 | 14 | ||
Number of restaurants | Restaurants | 1,657 | |||
Chili's restaurant acquisition [Member] | ||||
Other Significant Noncash Transactions [Line Items] | ||||
Number of restaurants | Restaurants | 116 | |||
Dividend Declared [Member] | ||||
Other Significant Noncash Transactions [Line Items] | ||||
Dividends declared but not paid | $ 0 | $ 14.8 | ||
[1] | Operating lease additions include new operating lease assets obtained in exchange for new operating lease liabilities. The thirty-nine week period ended March 25, 2020 primarily included operating lease additions associated with the 116 restaurants purchased from a former franchisee on September 5, 2019 acquisition date. Refer to Note 15 - Fiscal 2020 Chili’s Restaurant Acquisition for details. |
CONTINGENCIES (Lease Commitment
CONTINGENCIES (Lease Commitments) (Details) - USD ($) $ in Millions | Mar. 24, 2021 | Jun. 24, 2020 |
Maximum [Member] | Lease Guarantees And Secondary Obligations [Member] | ||
Guarantor Obligations [Line Items] | ||
Loss contingency, estimate of possible loss | $ 33.8 | $ 39.7 |
CONTINGENCIES (Additional Infor
CONTINGENCIES (Additional Information) (Details) $ in Millions | 36 Months Ended |
Mar. 24, 2021USD ($)LegalMatter | |
Loss Contingencies [Line Items] | |
Amount of undrawn standby letters of credit outstanding | $ 29.5 |
Loss contingency, pending claims, number | LegalMatter | 0 |
Cyber security incident [Member] | |
Loss Contingencies [Line Items] | |
Loss contingency insurance coverage deductible | $ 2 |
Cyber security incident charges | 8.9 |
Insurance recoveries | 2.6 |
Loss contingency, receivable | 3.8 |
Loss Contingency, Loss in Period | 0.5 |
Loss contingency, estimate of possible loss | $ 5 |
FISCAL 2020 CHILI'S RESTAURAN_3
FISCAL 2020 CHILI'S RESTAURANT ACQUISITION (Details) $ in Millions | Sep. 05, 2019USD ($)Restaurants | Mar. 24, 2021USD ($)Restaurants | Mar. 25, 2020USD ($) | Sep. 25, 2019USD ($) | Mar. 24, 2021USD ($)Restaurants | Mar. 25, 2020USD ($) | Jun. 24, 2020USD ($) | |
Business Acquisition [Line Items] | ||||||||
Number of restaurants | Restaurants | 1,657 | 1,657 | ||||||
Acquisition of franchise restaurants costs, net of (gains) | $ 0 | $ 1.1 | $ 0 | $ 2.6 | ||||
Goodwill | $ 188.1 | $ 188.1 | $ 187.6 | |||||
Chili's restaurant acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of restaurants | Restaurants | 116 | |||||||
Cash consideration for acquisition, including post-closing adjustments | $ 96 | |||||||
Acquisition of franchise restaurants costs, net of (gains) | 1.1 | 2.6 | ||||||
Professional services, transaction and transition related costs | $ 1.1 | 4.1 | ||||||
Loss on derecognition of franchisee straight-line rent balance | 1.1 | |||||||
Franchise deferred revenue recognized upon acquisition | $ 2.6 | |||||||
Current assets | [1] | $ 7.3 | ||||||
Property and equipment | 60.3 | |||||||
Operating lease assets | 163.5 | |||||||
Reacquired franchise rights | [2] | 6.9 | ||||||
Goodwill | [3] | 22.4 | ||||||
Total assets acquired | 260.4 | |||||||
Current liabilities | [4] | 9.1 | ||||||
Operating lease liabilities, less current portion | 158.3 | |||||||
Total liabilities assumed | 167.4 | |||||||
Net assets acquired | [5] | $ 93 | ||||||
Weighted average amortization period, reacquired franchise rights | 8 years | |||||||
Purchase price excluding customary working capital adjustments | $ 99 | |||||||
Closing adjustments | 3.2 | |||||||
Prepayment of leases between Brinker and franchisee | $ 2.8 | |||||||
[1] | Current assets included petty cash, inventory, and restaurant supplies. | |||||||
[2] | Reacquired franchise rights have a weighted average amortization period of approximately 8 years. | |||||||
[3] | Goodwill is expected to be deductible for tax purposes. The portion of the purchase price attributable to goodwill represents the benefits expected as a result of the acquisition, including sales and unit growth opportunities, and the benefit of the assembled workforce of the acquired restaurants. | |||||||
[4] | Current liabilities included the current portion of operating lease liabilities, gift card liability and accrued property tax. | |||||||
[5] | Net assets acquired at fair value are equal to the total purchase price of $99.0 million, less $3.2 million of closing adjustments and $2.8 million allocated to the prepayment of leases entered into with the franchisee. |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Millions | 1 Months Ended |
Apr. 28, 2021USD ($) | |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Repayments of revolving credit facility | $ (20) |