Chili's 2015 Annual Report Download - page 72

Fiscal Year 2014
Quarters Ended
Sept. 25 Dec. 25 March 26 June 25
Revenues ............................................. $684,660 $705,662 $759,293 $759,880
Income before provision for income taxes ................... $ 42,582 $ 57,713 $ 80,815 $ 35,178
Net income ........................................... $ 29,212 $ 39,744 $ 56,263 $ 28,820
Basic net income per share ............................... $ 0.44 $ 0.59 $ 0.85 $ 0.44
Diluted net income per share .............................. $ 0.42 $ 0.58 $ 0.82 $ 0.43
Basic weighted average shares outstanding .................. 66,693 66,811 66,479 65,009
Diluted weighted average shares outstanding ................. 68,802 68,628 68,342 66,824
Net income for fiscal 2015 included a net gain of $2.8 million related to litigation which included antitrust
litigation settlement proceeds of $8.6 million, partially offset by a charge of $5.8 million to adjust our previous
reserve estimate of final settlement amounts related to various litigation matters. We recorded a charge of $1.1
million in the fourth quarter of fiscal 2015 for acquisition costs incurred prior to completing the acquisition of a
franchisee which owns 103 Chili’s restaurants. Long-lived asset impairment of $0.7 million and $1.5 million
were recorded in the second and fourth quarters, respectively. Additionally, net income included lease
termination charges of $0.9 million, $0.5 million and $0.5 million in the first, second and fourth quarters of fiscal
2015 related to restaurants closed in the current year. Severance charges of $0.3 million and $0.9 million were
incurred in the second and fourth quarters of fiscal 2015.
Net income for fiscal 2014 included a $39.5 million charge in the fourth quarter to establish reserves for the
potential settlement of various litigation matters. Long-lived asset impairments of $1.3 million and $3.2 million
were recorded in the second and fourth quarters, respectively. Additionally, net income included lease
termination charges of $0.2 million, $0.2 million, $0.9 million and $0.6 million in the four quarters of fiscal 2014
related to restaurants closed in the current year and adjustments for prior year closures. Severance charges of
$0.2 million, $0.2 million, $0.7 million and $1.0 million were incurred in the four quarters of fiscal 2014.
16. SUBSEQUENT EVENTS
On June 25, 2015, we completed the acquisition of Pepper Dining Holding Corp. (“Pepper Dining”), a
franchisee of 103 Chili’s®Grill & Bar restaurants primarily located in the Northeast and Southeast United States.
The purchase price of $106.5 million was funded with availability under our existing credit facility. The results
of operations of these restaurants will be included in our consolidated financial statements from the date of
acquisition beginning in fiscal 2016. The acquired restaurants are expected to generate approximately $2.6
million of average annual revenue per restaurant in fiscal 2016 which will be partially offset by the loss of
average annual royalty revenues of approximately $104,000 per restaurant. We are in the process of evaluating
the fair value of the assets and liabilities acquired through internal studies and third-party valuations and expect
to complete a preliminary purchase price allocation in the first quarter of fiscal 2016.
Subsequent to the end of the fiscal year, an additional $135.5 million was borrowed from the $750 million
revolving credit facility primarily to fund the acquisition of Pepper Dining. Subsequent to the end of the fiscal
year, we repurchased 766,000 shares for approximately $44.0 million as part of our share repurchase program.
We also repurchased approximately 74,000 shares for $4.1 million to satisfy team member tax withholding
obligations on the vesting of primarily performance shares.
On August 20, 2015, our Board of Directors declared a quarterly dividend of $0.32 per share effective with
the September 2015 dividend. Our Board of Directors also authorized an additional $250 million in share
repurchases, bringing the total authorization to $4,185 million.
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