Red Lobster 2005 Annual Report Download - page 51

Notes to Consolidated Financial Statements
Financial Review 2005
Darden Restaurants 59
Superior Court in Spokane County alleging violations of
Washington labor laws with respect to providing rest breaks.
The Court stayed the action and ordered the plaintiffs into
our mandatory arbitration program; the plaintiffs’ motion
for reconsideration was not granted, and their appeal of
the denial of reconsideration was also not granted. We
believe we provided the required meal and rest breaks to
our employees, and we intend to vigorously defend our
position in this case.
Beginning in 2002, a total of five purported class action
lawsuits have been filed in Superior Courts of California
(two each in Los Angeles County and Orange County, and
one in Sacramento County) in which the plaintiffs allege that
they and other current and former service managers, bever-
age and hospitality managers and culinary managers were
improperly classified as exempt employees under California
labor laws. The plaintiffs seek unpaid overtime wages and
penalties. Two of the cases have been removed to arbitra-
tion under our mandatory arbitration program, and we are
seeking to cause the remaining cases to be stayed pending
resolution of the earliest-filed cases. We believe we properly
classified these employees as exempt under California law
and we intend to vigorously defend against all claims in
these lawsuits.
NOTE 19
Quarterly Data (Unaudited)
The following table summarizes unaudited quarterly data for fiscal 2005 and 2004:
Fiscal 2005 – Quarters Ended
Aug. 29 Nov. 28 Feb. 27 May 29 Total
Sales $ 1,278,644 $ 1,229,373 $ 1,375,879 $ 1,394,214 $ 5,278,110
Earnings before income taxes 108,086 63,368 130,824 121,639 423,917
Net earnings 71,012 42,975 92,630 83,989 290,606
Net earnings per share:
Basic 0.45 0.27 0.59 0.54 1.85
Diluted 0.44 0.26 0.56 0.52 1.78
Dividends paid per share – 0.04 – 0.04 0.08
Stock price:
High 22.61 27.70 29.63 33.11 33.11
Low 19.30 20.33 26.17 25.78 19.30
Fiscal 2004 – Quarters Ended
Aug. 24 Nov. 23 Feb. 22 May 30
(1)
Total
Sales $ 1,259,689 $ 1,142,543 $ 1,241,952 $ 1,359,171 $ 5,003,355
Earnings before income taxes 101,977 44,688 111,404 74,707 332,776
Net earnings 67,351 30,053 77,088 52,681 227,173
Net earnings per share:
Basic 0.41 0.18 0.47 0.33 1.39
Diluted 0.40 0.18 0.45 0.32 1.34
Dividends paid per share – 0.04 – 0.04 0.08
Stock price:
High 21.62 22.77 22.50 25.60 25.60
Low 17.80 18.25 18.48 21.40 17.80
(1)
Earnings before income taxes includes asset impairment charges of $36,526 ($22,372 after-tax) for long-lived asset impairments associated with the closing of six Bahama Breeze
restaurants and the write-down of the carrying value of four other Bahama Breeze restaurants, one Olive Garden restaurant and one Red Lobster restaurant, which continued to
operate. Earnings before income taxes also includes charges of $1,112 ($681 after-tax) related to severance payments made to certain restaurant employees and exit costs
associated with the closing of six Bahama Breeze restaurants.