Bloomin’ brands announces 2022 q4 financial results
Tampa, fla.--(business wire)--bloomin’ brands, inc. (nasdaq: blmn) today reported results for the fourth quarter 2022 (“q4 2022”) and fiscal year ended december 25, 2022 (“fiscal year 2022”) compared to the fourth quarter 2021 (“q4 2021”) and fiscal year ended december 26, 2021 (“fiscal year 2021”). ceo comments “we are pleased with our results in 2022 where we delivered profits and margins well above pre-pandemic levels despite significant inflation,” said david deno, ceo. “all u.s. brands finished the year with positive comparable restaurant sales and our brazil business achieved record levels of profits and sales. we are off to a good start to 2023 as we continue to elevate the customer experience and drive innovation across the portfolio while remaining focused on healthy top-line growth.” diluted eps and adjusted diluted eps the following tables reconcile diluted earnings per share to adjusted diluted earnings per share for the periods indicated: q4 2022 2021 change diluted earnings per share $ 0.61 $ 0.59 $ 0.02 adjustments (1) 0.07 0.01 0.06 adjusted diluted earnings per share (1) $ 0.68 $ 0.60 $ 0.08 fiscal year 2022 2021 change diluted earnings per share $ 1.03 $ 2.00 $ (0.97 ) adjustments (1)(2) 1.49 0.70 0.79 adjusted diluted earnings per share (1)(2) $ 2.52 $ 2.70 $ (0.18 ) ___________________ (1) see non-gaap measures later in this release. (2) adjustments for fiscal year 2022 include losses in connection with the repurchase of $125 million of our outstanding convertible notes (the “2025 notes”) as well as the settlements of the related convertible senior note hedges and warrants (the “2025 notes partial repurchase”). fiscal year 2021 includes a $61.9 million charge in connection with the carrabba’s italian grill royalty termination. fourth quarter financial results (dollars in millions, unaudited) q4 2022 q4 2021 change total revenues $ 1,095.0 $ 1,047.1 4.6 % gaap operating income margin 7.7 % 7.5 % 0.2 % adjusted operating income margin (1) 8.2 % 7.8 % 0.4 % restaurant-level operating margin (1) 16.3 % 16.5 % (0.2 )% adjusted restaurant-level operating margin (1) 16.8 % 16.5 % 0.3 % ___________________ (1) see non-gaap measures later in this release. the increase in total revenues was primarily due to higher comparable restaurant sales and the net impact of restaurant openings and closures. gaap operating income margin improved from q4 2021 due to increases in average check, significant improvement in brazil, the benefits of productivity initiatives and lower incentive compensation. these gains were partially offset by commodity and wage inflation, higher operating expenses including utilities and an increase in legal reserves. all costs above are included in restaurant-level operating margin with the exception of incentive compensation. the difference between gaap operating income margin and adjusted operating income margin relates to q4 2021 restructuring activities as well as the q4 2022 impact of the additional legal reserves mentioned above. fourth quarter comparable restaurant sales the following table includes company-owned comparable restaurant sales for the fourth quarter ended december 25, 2022 as well as performance relative to 2019 for improved comparability to pre-covid-19 restaurant sales: thirteen weeks ended december 25, 2022 comparable restaurant sales (stores open 18 months or more): comparable to 2021 comparable to 2019 u.s. outback steakhouse 0.9 % 3.4 % carrabba’s italian grill 2.8 % 13.4 % bonefish grill 0.5 % 1.9 % fleming’s prime steakhouse & wine bar 3.1 % 24.0 % combined u.s. 1.4 % 6.8 % international outback steakhouse - brazil (1) 15.3 % 26.0 % _________________ (1) excludes the effect of fluctuations in foreign currency rates and the benefit of the brazil tax legislation discussed below. includes trading day impact from calendar period reporting. dividend declaration and share repurchases on february 7, 2023, our board of directors declared a quarterly cash dividend of $0.24 per share, payable on march 15, 2023 to stockholders of record at the close of business on march 1, 2023. through february 15, 2023, we repurchased 6 million shares for a total of $124 million under our existing share repurchase authorization. on february 7, 2023, our board of directors approved a new $125 million authorization that will expire on august 7, 2024. “the 71% increase in our dividend as well as our new $125 million share repurchase authorization reflects our confidence in the strength of our cash flows,” said chris meyer, cfo. “importantly, we continue to generate ample cash flow that will fund investments in our people and ongoing growth initiatives.” brazil tax legislation our 2023 financial outlook includes a benefit from a legislative action in brazil that provides certain industries a 100% exemption from federal income tax and federal value added tax on revenues, known as pis and cofins, for a period of five years. the temporary exemptions are for businesses impacted heavily by the covid-19 pandemic. our operations in brazil received a court ruling affirming our eligibility for this exemption. this annual benefit is specific to results generated by our brazilian operations. the pis and cofins exemption is expected to generate an approximate benefit of $17 million to income from operations in 2023, and this benefit is exempt from federal income tax in brazil. in addition, the exemption from federal income tax is also expected to generate an approximate tax benefit of $6 million in 2023. the combined impact of these benefits is approximately $23 million to our consolidated 2023 results or approximately $0.25 to diluted earnings per share. due to the ongoing annual benefit from this legislative action, these amounts will be included in both our gaap and adjusted financial results. fiscal 2023 financial outlook the company’s financial expectations for fiscal 2023 include the following: addition of a 53rd week at the end of fiscal 2023. this week is one of the company’s highest sales volume weeks, however; it only has six days due to closure for the christmas holiday. benefits from the brazil tax legislation as described above. the tables below present our expectations for selected 2023 financial reporting and operating results: financial results: 2023 guidance u.s. comparable restaurant sales 2% to 4% gaap diluted earnings per share (1) $2.80 to $2.89 adjusted diluted earnings per share (2) $2.91 to $3.00 effective income tax rate 13% to 15% other selected financial data: 2023 guidance commodity inflation mid single digits labor inflation mid single digits capital expenditures $240m to $260m number of new system-wide restaurants 30 to 35 _________________ (1) for gaap purposes assumes weighted average diluted shares of approximately 96 million. (2) assumes weighted average adjusted diluted shares of approximately 92 million, which includes the benefit of the convertible note hedge entered into in may 2020. 2023 guidance earnings per share: gaap adjusted diluted earnings per share (comparable basis) $2.41 to $2.50 $2.52 to $2.61 plus: impact of brazil tax legislation approx. $0.25 approx. $0.25 plus: 53rd week approx. $0.14 approx. $0.14 diluted earnings per share $2.80 to $2.89 $2.91 to $3.00 diluted earnings per share growth 15% to 19% q1 2023 financial outlook the table below presents our expectations for selected fiscal q1 2023 operating results: financial results: q1 2023 outlook u.s. comparable restaurant sales 3% to 5% gaap diluted earnings per share (1) $0.81 to $0.86 adjusted diluted earnings per share (2) $0.85 to $0.90 _________________ (1) for gaap purposes assumes weighted average diluted shares of approximately 97 million. (2) assumes weighted average adjusted diluted shares of approximately 93 million, which includes the benefit of the convertible note hedge entered into in may 2020. conference call the company will host a conference call today, february 16, 2023 at 8:15 am est. the conference call will be webcast live from the company’s website at http://www.bloominbrands.com under the investors section. a replay of this webcast will be available on the company’s website after the call. non-gaap measures in addition to the results provided in accordance with gaap, this press release and related tables include certain non-gaap measures, which present operating results on an adjusted basis. these are supplemental measures of performance that are not required by or presented in accordance with gaap and include the following: (i) restaurant-level operating margin and adjusted restaurant-level operating margin, (ii) adjusted income from operations and the corresponding margin, (iii) adjusted net income, (iv) adjusted diluted earnings per share and (v) adjusted segment income from operations and the corresponding margin. restaurant-level operating margin is a non-gaap financial measure widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes, overall and particularly within our two segments. we believe that our use of non-gaap financial measures permits investors to assess the operating performance of our business relative to our performance based on gaap results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies. however, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur. we believe that the disclosure of these non-gaap measures is useful to investors as they form part of the basis for how our management team and board of directors evaluate our operating performance, allocate resources and administer employee incentive plans. these non-gaap financial measures are not intended to replace gaap financial measures, and they are not necessarily standardized or comparable to similarly titled measures used by other companies. we maintain internal guidelines with respect to the types of adjustments we include in our non-gaap measures. these guidelines endeavor to differentiate between types of gains and expenses that are reflective of our core operations in a period, and those that may vary from period to period without correlation to our core performance in that period. however, implementation of these guidelines necessarily involves the application of judgment, and the treatment of any items not directly addressed by, or changes to, our guidelines will be considered by our disclosure committee. you should refer to the reconciliations of non-gaap measures in tables four, five, six and seven included later in this release for descriptions of the actual adjustments made in the current period and the corresponding prior period. about bloomin’ brands, inc. bloomin’ brands, inc. is one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. the company has four founder-inspired brands: outback steakhouse, carrabba’s italian grill, bonefish grill and fleming’s prime steakhouse & wine bar. the company owns and operates more than 1,450 restaurants in 47 states, guam and 13 countries, some of which are franchise locations. for more information, please visit www.bloominbrands.com. forward-looking statements certain statements contained herein, including statements under the headings “ceo comments”, “fiscal 2023 financial outlook” and “q1 2023 financial outlook” are not based on historical fact and are “forward-looking statements” within the meaning of applicable securities laws. generally, these statements can be identified by the use of words such as “guidance,” “believes,” “estimates,” “anticipates,” “expects,” “on track,” “feels,” “forecasts,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” “should,” “could,” “would” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. these forward-looking statements include all matters that are not historical facts. by their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the company’s forward-looking statements. these risks and uncertainties include, but are not limited to: consumer reaction to public health and food safety issues; increases in labor costs and fluctuations in the availability of employees; increases in unemployment rates and taxes; competition; interruption or breach of our systems or loss of consumer or employee information; price and availability of commodities and other impacts of inflation; our dependence on a limited number of suppliers and distributors; the effects of the covid-19 pandemic and uncertainties about its depth and duration, as well as the impacts to economic conditions, the responses of domestic and foreign federal, state and local governments to the pandemic and consumer behavior; political, social and legal conditions in international markets and their effects on foreign operations and foreign currency exchange rates; our ability to address environmental, social and governance matters; local, regional, national and international economic conditions; changes in patterns of consumer traffic, consumer tastes and dietary habits; the effects of changes in tax laws; costs, diversion of management attention and reputational damage from any claims or litigation; government actions and policies; challenges associated with our remodeling, relocation and expansion plans; our ability to preserve the value of and grow our brands; consumer confidence and spending patterns; weather, acts of god and other disasters and the ability or success in executing related business continuity plans; the company’s ability to make debt payments and planned investments and the company’s compliance with debt covenants; the cost and availability of credit; interest rate changes; and any impairments in the carrying value of goodwill and other assets. further information on potential factors that could affect the financial results of the company and its forward-looking statements is included in its most recent form 10-k and subsequent filings with the securities and exchange commission. the company assumes no obligation to update any forward-looking statement, except as may be required by law. these forward-looking statements speak only as of the date of this release. all forward-looking statements are qualified in their entirety by this cautionary statement. note: numerical figures included in this release have been subject to rounding adjustments. table one bloomin’ brands, inc. consolidated statements of operations thirteen weeks ended fiscal year december 25, 2022 december 26, 2021 2022 2021 (in thousands, except per share data) (unaudited) (unaudited) (unaudited) revenues restaurant sales $ 1,079,827 $ 1,029,697 $ 4,352,695 $ 4,061,093 franchise and other revenues 15,221 17,386 63,813 61,292 total revenues 1,095,048 1,047,083 4,416,508 4,122,385 costs and expenses food and beverage costs 326,864 321,417 1,383,632 1,229,689 labor and other related 301,946 294,740 1,226,460 1,154,623 other restaurant operating 275,079 243,840 1,065,662 1,006,371 depreciation and amortization 44,414 40,799 169,617 163,391 general and administrative 60,743 63,026 234,752 245,616 provision for impaired assets and restaurant closings 1,865 4,775 5,964 13,737 total costs and expenses 1,010,911 968,597 4,086,087 3,813,427 income from operations 84,137 78,486 330,421 308,958 loss on extinguishment and modification of debt — — (107,630 ) (2,073 ) loss on fair value adjustment of derivatives, net — — (17,685 ) — other (expense) income, net (23 ) — (23 ) 26 interest expense, net (14,299 ) (13,751 ) (53,176 ) (57,614 ) income before provision for income taxes 69,815 64,735 151,907 249,297 provision for income taxes 9,676 1,557 42,704 26,384 net income 60,139 63,178 109,203 222,913 less: net income attributable to noncontrolling interests 2,094 2,479 7,296 7,358 net income attributable to bloomin’ brands 58,045 60,699 101,907 215,555 convertible senior notes if-converted method interest adjustment, net of tax — — — 345 diluted net income attributable to bloomin’ brands $ 58,045 $ 60,699 $ 101,907 $ 215,900 earnings per share: basic $ 0.66 $ 0.68 $ 1.15 $ 2.42 diluted $ 0.61 $ 0.59 $ 1.03 $ 2.00 weighted average common shares outstanding: basic 87,937 89,251 88,846 88,981 diluted 95,221 102,985 98,512 107,803 table two bloomin’ brands, inc. segment results (dollars in thousands) thirteen weeks ended fiscal year december 25, 2022 december 26, 2021 2022 2021 u.s. segment (unaudited) (unaudited) (unaudited) revenues restaurant sales $ 942,775 $ 925,706 $ 3,863,016 $ 3,714,848 franchise and other revenues 11,540 13,566 48,854 45,133 total revenues $ 954,315 $ 939,272 $ 3,911,870 $ 3,759,981 international segment revenues restaurant sales $ 137,052 $ 103,991 $ 489,679 $ 346,245 franchise and other revenues (1) 3,681 3,820 14,959 16,159 total revenues $ 140,733 $ 107,811 $ 504,638 $ 362,404 reconciliation of segment income from operations to consolidated income from operations segment income from operations u.s. $ 102,513 $ 109,561 $ 407,860 $ 443,887 international 18,474 9,238 57,333 16,657 total segment income from operations 120,987 118,799 465,193 460,544 unallocated corporate operating expense (36,850 ) (40,313 ) (134,772 ) (151,586 ) total income from operations $ 84,137 $ 78,486 $ 330,421 $ 308,958 ____________________ (1) fiscal year 2021 includes a $3.1 million benefit from the recognition of recoverable program of social integration (“pis”) and contribution for the financing of social security (“cofins”) taxes, including accrued interest, within other revenues in connection with favorable court rulings in brazil regarding the calculation methodology and taxable base. table three bloomin’ brands, inc. supplemental balance sheet information december 25, 2022 december 26, 2021 (dollars in thousands) (unaudited) cash and cash equivalents $ 84,735 $ 87,585 net working capital (deficit) (1) $ (632,290 ) $ (631,833 ) total assets $ 3,320,425 $ 3,294,271 total debt, net $ 833,292 $ 793,065 total stockholders’ equity $ 273,909 $ 222,850 _________________ (1) we have, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies). we operate successfully with negative working capital because cash collected on restaurant sales is typically received before payment is due on our current liabilities, and our inventory turnover rates require relatively low investment in inventories. additionally, ongoing cash flows from restaurant operations and gift card sales are typically used to service debt obligations and to make capital expenditures. table four bloomin’ brands, inc. restaurant-level and adjusted restaurant-level operating income and margin non-gaap reconciliations (unaudited) consolidated thirteen weeks ended fiscal year (dollars in thousands) december 25, 2022 december 26, 2021 2022 2021 income from operations $ 84,137 $ 78,486 $ 330,421 $ 308,958 operating income margin 7.7 % 7.5 % 7.5 % 7.5 % less: franchise and other revenues 15,221 17,386 63,813 61,292 plus: depreciation and amortization 44,414 40,799 169,617 163,391 general and administrative 60,743 63,026 234,752 245,616 provision for impaired assets and restaurant closings 1,865 4,775 5,964 13,737 restaurant-level operating income (1) $ 175,938 $ 169,700 $ 676,941 $ 670,410 restaurant-level operating margin 16.3 % 16.5 % 15.6 % 16.5 % adjustments: royalty termination expense (2) — — — 61,880 legal and other matters (3) 5,900 — 5,900 2,761 total restaurant-level operating income adjustments 5,900 — 5,900 64,641 adjusted restaurant-level operating income $ 181,838 $ 169,700 $ 682,841 $ 735,051 adjusted restaurant-level operating margin 16.8 % 16.5 % 15.7 % 18.1 % _________________ (1) the following categories of our revenue and operating expenses are not included in restaurant-level operating margin because we do not consider them reflective of operating performance at the restaurant-level within a period: (a) franchise and other revenues, which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income. (b) depreciation and amortization which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants. (c) general and administrative expense, which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices. (d) asset impairment charges and restaurant closing costs, which are not reflective of ongoing restaurant performance in a period. (2) payment to the founders of our carrabba’s italian grill concept in connection with an agreement to terminate future royalty payments. (3) for 2022, includes an increase in reserves for certain collective action wage and hour lawsuits during the fourth quarter. for 2021, includes an accrual for imposto sobre serviÇos (“iss”), a brazilian municipal service tax, in connection with royalties from our brazilian subsidiary over the past five years, including related penalties and interest, as a result of an unfavorable brazilian supreme court ruling. u.s. thirteen weeks ended fiscal year (dollars in thousands) december 25, 2022 december 26, 2021 2022 2021 income from operations $ 102,513 $ 109,561 $ 407,860 $ 443,887 operating income margin 10.7 % 11.7 % 10.4 % 11.8 % less: franchise and other revenues 11,540 13,566 48,854 45,133 plus: depreciation and amortization 36,435 33,599 139,170 134,244 general and administrative 23,969 23,271 93,401 89,314 provision for impaired assets and restaurant closings 2,103 3,690 4,420 12,368 restaurant-level operating income $ 153,480 $ 156,555 $ 595,997 $ 634,680 restaurant-level operating margin 16.3 % 16.9 % 15.4 % 17.1 % adjustments: royalty termination expense (1) — — — 61,880 total restaurant-level operating income adjustments — — — 61,880 adjusted restaurant-level operating income $ 153,480 $ 156,555 $ 595,997 $ 696,560 adjusted restaurant-level operating margin 16.3 % 16.9 % 15.4 % 18.8 % ________________ (1) payment to the founders of our carrabba’s italian grill concept in connection with an agreement to terminate future royalty payments. international thirteen weeks ended fiscal year (dollars in thousands) december 25, 2022 december 26, 2021 2022 2021 income from operations $ 18,474 $ 9,238 $ 57,333 $ 16,657 operating income margin 13.1 % 8.6 % 11.4 % 4.6 % less: franchise and other revenues 3,681 3,820 14,959 16,159 plus: depreciation and amortization 5,959 5,522 23,397 22,650 general and administrative 7,268 5,898 23,355 19,679 provision for impaired assets and restaurant closings (238 ) 1,073 1,537 1,100 restaurant-level operating income $ 27,782 $ 17,911 $ 90,663 $ 43,927 restaurant-level operating margin 20.3 % 17.2 % 18.5 % 12.7 % adjustments: legal and other matters (1) — — — 2,761 total restaurant-level operating income adjustments — — — 2,761 adjusted restaurant-level operating income $ 27,782 $ 17,911 $ 90,663 $ 46,688 adjusted restaurant-level operating margin 20.3 % 17.2 % 18.5 % 13.5 % ________________ (1) includes an accrual for iss, a brazilian municipal service tax, in connection with royalties from our brazilian subsidiary over the past five years, including related penalties and interest, as a result of an unfavorable brazilian supreme court ruling. table five bloomin’ brands, inc. consolidated restaurant-level operating margin non-gaap reconciliations (unaudited) thirteen weeks ended favorable (unfavorable) change in adjusted quarter to date december 25, 2022 december 26, 2021 reported adjusted (1) reported adjusted (1) restaurant sales 100.0 % 100.0 % 100.0 % 100.0 % food and beverage costs 30.3 % 30.3 % 31.2 % 31.2 % 0.9 % labor and other related 28.0 % 28.0 % 28.6 % 28.6 % 0.6 % other restaurant operating 25.5 % 24.9 % 23.7 % 23.7 % (1.2 )% restaurant-level operating margin 16.3 % 16.8 % 16.5 % 16.5 % 0.3 % fiscal year (unfavorable) favorable change in adjusted year to date 2022 2021 reported adjusted (1) reported adjusted (1) restaurant sales 100.0 % 100.0 % 100.0 % 100.0 % food and beverage costs 31.8 % 31.8 % 30.3 % 30.3 % (1.5 ) % labor and other related 28.2 % 28.2 % 28.4 % 28.4 % 0.2 % other restaurant operating 24.5 % 24.3 % 24.8 % 23.2 % (1.1 )% restaurant-level operating margin 15.6 % 15.7 % 16.5 % 18.1 % (2.4 )% _________________ (1) see table four restaurant-level and adjusted restaurant-level operating income and margin non-gaap reconciliations for details regarding restaurant-level operating margin adjustments. all restaurant-level operating margin adjustments for the periods presented were recorded within other restaurant operating expense. table six bloomin’ brands, inc. adjusted income from operations non-gaap reconciliations (unaudited) (dollars in thousands) thirteen weeks ended fiscal year consolidated december 25, 2022 december 26, 2021 2022 2021 income from operations $ 84,137 $ 78,486 $ 330,421 $ 308,958 operating income margin 7.7 % 7.5 % 7.5 % 7.5 % adjustments: total restaurant-level operating margin adjustments (1) 5,900 — 5,900 64,641 legal and other matters (2) — — — (3,133 ) severance and other transformational costs (3) — 2,764 — 2,764 total income from operations adjustments 5,900 2,764 5,900 64,272 adjusted income from operations $ 90,037 $ 81,250 $ 336,321 $ 373,230 adjusted operating income margin 8.2 % 7.8 % 7.6 % 9.1 % u.s. segment income from operations $ 102,513 $ 109,561 $ 407,860 $ 443,887 operating income margin 10.7 % 11.7 % 10.4 % 11.8 % adjustments: total restaurant-level operating margin adjustments (1) — — — 61,880 severance and other transformational costs (3) — 1,108 — 1,108 total income from operations adjustments — 1,108 — 62,988 adjusted income from operations $ 102,513 $ 110,669 $ 407,860 $ 506,875 adjusted operating income margin 10.7 % 11.8 % 10.4 % 13.5 % international segment income from operations $ 18,474 $ 9,238 $ 57,333 $ 16,657 operating income margin 13.1 % 8.6 % 11.4 % 4.6 % adjustments: total restaurant-level operating margin adjustments (1) — — — 2,761 legal and other matters (2) — — — (3,133 ) total income from operations adjustments — — — (372 ) adjusted income from operations $ 18,474 $ 9,238 $ 57,333 $ 16,285 adjusted operating income margin 13.1 % 8.6 % 11.4 % 4.5 % _________________ (1) see table four restaurant-level and adjusted restaurant-level operating income and margin non-gaap reconciliations for details regarding the restaurant-level operating margin adjustments. (2) includes the recognition of recoverable pis and cofins taxes within other revenues as a result of favorable court rulings in brazil. (3) severance, professional fees and other costs incurred as a result of transformational and restructuring activities. table seven bloomin’ brands, inc. adjusted net income and diluted earnings per share non-gaap reconciliations (unaudited) thirteen weeks ended fiscal year (in thousands, except per share data) december 25, 2022 december 26, 2021 2022 2021 diluted net income attributable to bloomin’ brands $ 58,045 $ 60,699 $ 101,907 $ 215,900 convertible senior notes if-converted method interest adjustment, net of tax (1) — — — 345 net income attributable to bloomin’ brands 58,045 60,699 101,907 215,555 adjustments: income from operations adjustments (2) 5,900 2,764 5,900 64,272 loss on extinguishment and modification of debt (3) — — 107,630 2,073 loss on fair value adjustment of derivatives, net (3) — — 17,685 — total adjustments, before income taxes 5,900 2,764 131,215 66,345 adjustment to provision for income taxes (4) (1,585 ) (6,587 ) (263 ) (21,222 ) net adjustments 4,315 (3,823 ) 130,952 45,123 adjusted net income $ 62,360 $ 56,876 $ 232,859 $ 260,678 diluted earnings per share $ 0.61 $ 0.59 $ 1.03 $ 2.00 adjusted diluted earnings per share (5) $ 0.68 $ 0.60 $ 2.52 $ 2.70 diluted weighted average common shares outstanding 95,221 102,985 98,512 107,803 adjusted diluted weighted average common shares outstanding (5) 91,059 94,375 92,423 96,426 _________________ (1) adjustment for interest expense related to the convertible senior notes due in 2025 (the “2025 notes”) weighted for the portion of the period prior to our election under the 2025 notes indenture to settle the principal portion of the 2025 notes in cash. (2) see table six adjusted income from operations non-gaap reconciliations above for details regarding income from operations adjustments. (3) for 2022, includes losses primarily in connection with the repurchase of $125 million of our outstanding 2025 notes, as well as the settlements of the related convertible senior note hedges and warrants (the “2025 notes partial repurchase”). (4) the tax effect of non-gaap adjustments were determined based on the nature of the underlying non-gaap adjustments and their relevant jurisdictional tax rates. for 2022, the primary difference between gaap and adjusted effective income tax rates relates to certain non-deductible losses and other tax costs associated with the 2025 notes partial repurchase. also includes a $4.2 million adjustment during the thirteen weeks and fiscal year ended december 26, 2021 for the reduction of certain unrecognized tax benefits related to tax positions taken during a prior period. (5) adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 4,162 and 8,610 shares for the thirteen weeks ended december 25, 2022 and december 26, 2021, respectively, and 6,089 and 9,992 shares for the fiscal years ended december 25, 2022, and december 26, 2021, respectively, to be issued upon conversion of the 2025 notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 notes. for 2021, adjusted diluted weighted average common shares outstanding was also calculated assuming our february 2021 election to settle the principal portion of the 2025 notes in cash was in effect for the entire period. following is a summary of the financial statement line item classification of the net income adjustments: thirteen weeks ended fiscal year (dollars in thousands) december 25, 2022 december 26, 2021 2022 2021 franchise and other revenues $ — $ — $ — $ (3,133 ) other restaurant operating 5,900 — 5,900 64,641 general and administrative — 2,764 — 2,764 loss on extinguishment and modification of debt — — 107,630 2,073 loss on fair value adjustment of derivatives, net — — 17,685 — provision for income taxes (1,585 ) (6,587 ) (263 ) (21,222 ) net adjustments $ 4,315 $ (3,823 ) $ 130,952 $ 45,123 table eight bloomin’ brands, inc. comparative restaurant and off-premises only kitchen information (unaudited) number of restaurants: september 25, 2022 openings closures december 25, 2022 u.s. outback steakhouse company-owned 564 2 — 566 franchised 128 — (1 ) 127 total 692 2 (1 ) 693 carrabba’s italian grill company-owned 199 — — 199 franchised 19 — — 19 total 218 — — 218 bonefish grill company-owned 173 — — 173 franchised 7 — — 7 total 180 — — 180 fleming’s prime steakhouse & wine bar company-owned 64 1 — 65 aussie grill company-owned 5 2 — 7 u.s. total 1,159 5 (1 ) 1,163 international company-owned outback steakhouse - brazil (1) 137 2 — 139 other (1)(2) 33 3 — 36 franchised outback steakhouse - south korea 83 5 (2 ) 86 other (2) 50 2 (5 ) 47 international total 303 12 (7 ) 308 system-wide total 1,462 17 (8 ) 1,471 system-wide total - company-owned 1,175 10 — 1,185 system-wide total - franchised 287 7 (8 ) 286 ____________________ (1) the restaurant counts for brazil, including abbraccio and aussie grill restaurants within international company-owned other, are reported as of august 31, 2022 and november 30, 2022, respectively, to correspond with the balance sheet dates of this subsidiary. (2) international company-owned other and international franchised other each included four aussie grill locations as of december 25, 2022. number of kitchens (1): september 25, 2022 openings closures december 25, 2022 u.s. company-owned 1 — — 1 international franchised - south korea 45 1 (11 ) 35 system-wide total 46 1 (11 ) 36 ____________________ (1) excludes virtual concepts that operate out of existing restaurants and sports venue locations. table nine bloomin’ brands, inc. comparable restaurant sales information (unaudited) thirteen weeks ended fiscal year december 25, 2022 2022 comparable to comparable to 2021 2019 (1) 2021 2019 (1) year over year percentage change: comparable restaurant sales (restaurants open 18 months or more): u.s. (2) outback steakhouse 0.9 % 3.4 % 2.8 % 6.1 % carrabba’s italian grill 2.8 % 13.4 % 3.4 % 14.3 % bonefish grill 0.5 % 1.9 % 4.5 % 2.9 % fleming’s prime steakhouse & wine bar 3.1 % 24.0 % 12.0 % 27.0 % combined u.s. 1.4 % 6.8 % 4.0 % 8.7 % international outback steakhouse - brazil (3) 15.3 % 26.0 % 38.3 % 23.3 % traffic: u.s. outback steakhouse (8.7 )% (12.8 )% (6.3 )% (8.7 )% carrabba’s italian grill (3.8 )% (1.5 )% (4.3 )% 1.9 % bonefish grill (7.2 )% (9.8 )% (4.2 )% (6.1 )% fleming’s prime steakhouse & wine bar (4.0 )% 5.0 % 3.0 % 7.1 % combined u.s. (7.3 )% (9.6 )% (5.3 )% (5.9 )% international outback steakhouse - brazil 3.3 % 14.1 % 23.6 % 20.4 % average check per person (4): u.s. outback steakhouse 9.6 % 16.2 % 9.1 % 14.8 % carrabba’s italian grill 6.6 % 14.9 % 7.7 % 12.4 % bonefish grill 7.7 % 11.7 % 8.7 % 9.0 % fleming’s prime steakhouse & wine bar 7.1 % 19.0 % 9.0 % 19.9 % combined u.s. 8.7 % 16.4 % 9.3 % 14.6 % international outback steakhouse - brazil 11.7 % 10.7 % 14.6 % 3.0 % ____________________ (1) comparable restaurant sales, traffic and average check per person increases (decreases) relative to 2019 for improved comparability to pre-covid-19 restaurant sales. (2) relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening. (3) includes trading day impact from calendar period reporting. excludes the effect of fluctuations in foreign currency rates and the benefit of the brazil tax legislation. (4) includes the impact of menu pricing changes, product mix and discounts.
