Delaware
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1-15935
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59-3061413
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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o
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Quarter
ended June 30, 2008
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Company-
owned
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Franchise
and
development
joint
venture (1)
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System-wide
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||
Domestic
comparable store sales (stores open 18 months or more)
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|||||
Outback
Steakhouses
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-5.3%
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-7.6%
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-5.6%
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||
Carrabba’s
Italian Grills
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-5.0%
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n/a
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-5.0%
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||
Bonefish
Grills
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-8.0%
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-9.3%
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-8.0%
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||
Fleming’s
Prime Steakhouse and Wine Bars
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-8.4%
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n/a
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-8.4%
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(1)
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These
sales do not represent sales of OSI Restaurant Partners, LLC and are
presented only as an indicator of changes in the restaurant system, which
management believes is important information about the Company’s
restaurant brands.
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Three
months ended
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Six
months ended
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|||||||||||||||
June
30,
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June
30,
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|||||||||||||||
2008
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2007
(1)
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2008
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2007
(1)
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|||||||||||||
(Successor)
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(Successor)
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|||||||||||||||
Net
(loss) income
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$ | (176,665 | ) | $ | (10,009 | ) | $ | (186,362 | ) | $ | 17,601 | |||||
Benefit
from income taxes
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(14,751 | ) | (16,517 | ) | (31,482 | ) | (2,619 | ) | ||||||||
Interest
expense, net
|
20,300 | 8,942 | 67,340 | 11,445 | ||||||||||||
Depreciation
and amortization
|
46,990 | 41,700 | 94,041 | 82,704 | ||||||||||||
EBITDA
|
$ | (124,126 | ) | $ | 24,116 | $ | (56,463 | ) | $ | 109,131 | ||||||
Impairments,
closings and disposals (2)
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179,613 | 5,028 | 183,108 | 12,876 | ||||||||||||
Stock-based
and other compensation expense (3)
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3,023 | 15,355 | 3,957 | 22,497 | ||||||||||||
Non-cash
rent expense (4)
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7,192 | 6,302 | 14,065 | 8,916 | ||||||||||||
Accounting
remediation and restatement expenses
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- | 302 | - | 2,261 | ||||||||||||
Transaction
costs (5)
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1,127 | 27,432 | 1,225 | 33,570 | ||||||||||||
Other
(6)
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2,161 | - | 6,181 | - | ||||||||||||
EBITDA
before certain non-cash expenses
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||||||||||||||||
and
other non-recurring expenses
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$ | 68,990 | $ | 78,535 | $ | 152,073 | $ | 189,251 | ||||||||
Pre-opening
expense (7)
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2,380 | 3,818 | 4,893 | 9,613 | ||||||||||||
Management
fee (8)
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2,262 | 424 | 4,673 | 424 | ||||||||||||
Adjusted
EBITDA
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$ | 73,632 | $ | 82,777 | $ | 161,639 | $ | 199,288 | ||||||||
Cash
rent (9)
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47,260 | 28,212 | 93,140 | 55,403 | ||||||||||||
Adjusted
EBITDAR
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$ | 120,892 | $ | 110,989 | $ | 254,779 | $ | 254,691 |
(1)
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The
accompanying financial information has been prepared for two periods,
Predecessor and Successor, which relate to the periods preceding and
succeeding the merger transaction, respectively. This financial
information has been prepared by mathematically combining the Predecessor
and Successor periods in the three and six months ended June 30,
2007. Although this presentation does not comply with U.S.
GAAP, the Company believes it provides a meaningful method of comparing
the current period to the prior period that includes both Predecessor and
Successor results. A reconciliation combining the Predecessor
and Successor periods in the three and six months ended June 30, 2007 is
included in the Form 10-Q.
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(2)
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Represents
the elimination of non-cash impairment charges for fixed assets and
restaurant closings, including goodwill and intangible assets, and net
gains or losses on the sale of fixed
assets.
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(3)
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Represents
the elimination of expenses for employee service rendered in prior periods
and recognized in 2007 and 2008 in connection with adopting the Company’s
Partner Equity Plan, expenses associated with the vesting of restricted
stock, options and other non-cash charges related to compensation programs
provided to management and restaurant general managers and expenses
incurred as a result of earnings on PEP deferred compensation participant
investment accounts.
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(4)
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Represents
the amortization of favorable and unfavorable leases as well as the
difference between straight-line and cash rent
expenses. Includes approximately $1,919,000 and $3,672,000 of
non-cash rent expense related to the Company’s sister company, Private
Restaurant Properties, LLC (“PRP”), for the three and six months ended
June 30, 2008, respectively, and approximately $3,684,000 of non-cash rent
expense related to PRP for the three and six months ended June 30,
2007.
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(5)
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Represents
the non-recurring fees incurred as a result of the merger transaction and
subsequent related filings;
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(6)
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Includes
foreign currency transaction loss, loss on the cash surrender value of
life insurance and gains resulting from a one-time reversal of an accrual
for gift certificates.
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(7)
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Reflects
the elimination of employee travel, training, legal and other costs
incurred prior to the opening of new restaurants during the
period.
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(8)
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Represents
the management fees paid to a management company owned by affiliates of
Bain Capital Partners, LLC, Catterton Partners and Company
founders.
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(9)
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Includes
cash rent paid to PRP of approximately $17,786,000 and $35,224,000 for the
three and six months ended June 30, 2008,
respectively.
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Pro
Forma
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||||||||||||
Cost
Savings Initiatives
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||||||||||||
Pro
Forma
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EBITDA
Adjustment
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|||||||||||
Savings
to
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Twelve
Month
|
Twelve
Months Ended
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||||||||||
Cost
Savings Category (in
millions):
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Date
(4)
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Run-Rate
(5)
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June
30, 2008 (6)
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|||||||||
Food
(1)
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$ | 8.1 | $ | 19.4 | $ | 11.3 | ||||||
Labor
(2)
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9.2 | 21.7 | 12.5 | |||||||||
Other (3)
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1.1 | 3.9 | 2.8 | |||||||||
Total
Cost Savings
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$ | 18.4 | $ | 45.0 | $ | 26.6 |
(1)
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Cost
savings realized and projected from specific menu item changes.
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(2)
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Cost
savings realized and projected from initiatives to reduce restaurant
labor hours.
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(3)
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Cost
savings realized and projected from supplier contract negotiations and
other supply chain efficiency
initiatives.
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(4)
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Realized
savings for the trailing twelve months ended June 30,
2008. Realized savings are not necessarily indicative of the
pro forma 12 month run-rate since these food, labor and other initiatives
were not in place for the entire trailing twelve months ended June 30,
2008.
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(5)
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Pro
forma cost savings from the food, labor and other initiatives as if they
had been in place for the entire 12-month period ended June 30,
2008.
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(6)
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Portion
of the pro forma cost savings run-rate not yet realized in the last 12
months financial statements; EBITDA adjustment is limited to $20,000,000
(see below).
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Pro
Forma Adjusted EBITDA (in
millions):
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||||
Adjusted
EBITDA, last 12 months
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$ | 319.2 | ||
Cost
savings initiatives adjustment (1)
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20.0 | |||
Pro
forma Adjusted EBITDA
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$ | 339.2 |
(1)
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Cost
savings initiatives adjustment is limited to $20,000,000 per the
Consolidated EBITDA definition in the Company’s Credit
Agreement.
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Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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OSI
RESTAURANT PARTNERS, LLC
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(Registrant)
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|||
Date: August
14, 2008
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By:
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/s/ Dirk
A. Montgomery
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Dirk
A. Montgomery
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|||
Chief
Financial Officer
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