DALLAS, Jan. 22, 2013 /PRNewswire/ -- Brinker International, Inc. (NYSE: EAT) today announced results for the fiscal second quarter ended Dec. 26, 2012.

Highlights include the following:

• Earnings per diluted share, excluding special items, increased 6.4 percent to $0.50 compared to $0.47 for the second quarter of fiscal 2012 (see non-GAAP reconciliation below)
• On a GAAP basis, earnings per diluted share increased 13.6 percent to $0.50 compared to $0.44 for the second quarter of fiscal 2012
• Chili's comparable restaurant sales increased 1.0 percent, representing the seventh consecutive quarterly increase.  Chili's comparable restaurant sales increased 1.6 percent after adjusting for holiday timing
• Maggiano's comparable restaurant sales increased 0.6 percent, representing the 12^th consecutive quarterly increase.  Maggiano's comparable restaurant sales increased 1.5 percent after adjusting for holiday timing
• Company sales increased 1.1 percent to $669.1 million and restaurant operating margin¹ improved approximately 30 basis points to 15.7 percent from 15.4 percent
• The company repurchased approximately 1.5 million shares of its common stock for $45.1 million in the second quarter
• The company paid a dividend of 20 cents per share in the second quarter, an increase of 25 percent over the prior year second quarter
• For the first six months of fiscal 2013, cash flows provided by operating activities were $131.3 million and capital expenditures totaled $69.8 million

"Brinker continued to take market share again this quarter, as we delivered our eighth consecutive quarter of positive sales growth, despite fewer holiday days in the quarter versus last year," said Wyman Roberts, President and Chief Executive Officer. "This demonstrates that our strategies designed to strengthen our margins, reinvest in our restaurants, and focus on differentiated food and service initiatives are working, as we continue to track to our goal of doubling EPS."

¹ Effective for the fiscal first quarter ended Sept. 26, 2012, revenues are reported in two separate captions - Company sales and Franchise and other revenues. Restaurant operating margin is now defined as Company sales less Cost of sales, Restaurant labor and Restaurant expenses.

Quarterly Operating Performance
CHILI'S second quarter company sales of $563.3 million represent a 1.2 percent increase from $556.5 million in the prior year period driven by increased menu prices and favorable mix shift. Chili's operating margin improved compared to the prior year primarily due to improved cost of sales. Cost of sales as a percentage of company sales was favorably impacted by increased menu pricing and favorable commodity pricing on produce and poultry, partially offset by unfavorable commodity pricing and product mix primarily related to beef and pork. Restaurant labor was negatively impacted by increased employee health insurance claims and increased overtime incurred to support the installation of new kitchen equipment, partially offset by sales leverage related to higher revenue and improved labor productivity from the installation of the equipment.

MAGGIANO'S second quarter company sales of $105.8 million increased 0.6 percent, primarily driven by menu pricing and mix. Restaurant operating margin improved compared to prior year primarily due to improved cost of sales. Cost of sales was favorably impacted by decreased commodity usage from efforts to reduce waste, increased menu pricing and menu item changes. Restaurant operating margin was negatively impacted by higher workers' compensation insurance expenses, partially offset by lower repair and maintenance expense, utilities expense and sales leverage on fixed costs related to higher revenue.

FRANCHISE AND OTHER revenues totaled $20.6 million for the quarter, an increase of 2.0 percent over the prior year driven primarily by an increase in royalty revenues. International franchise comparable restaurant sales increased 2.7 percent while domestic franchise comparable restaurant sales increased 2.2 percent. Brinker franchisees generated approximately $401 million in sales¹ for the second quarter of fiscal 2013.  

Other
Depreciation and amortization expense increased $1.8 million for the quarter primarily due to investments in existing restaurants and asset replacements, partially offset by an increase in fully depreciated assets.

Interest expense increased $0.6 million for the quarter as a result of higher borrowing balances.

Excluding the impact of special items, the effective income tax rate increased to 32.7 percent in the current quarter from 29.7 percent in the same quarter last year.  On a GAAP basis, the effective income tax rate increased to 32.7 percent in the current quarter as compared to 29.0 percent in the same quarter last year. The increase in the income tax rates was driven primarily by increased earnings and the temporary expiration of employment tax credits.   

Non-GAAP Reconciliation
The company believes excluding special items from its financial results provides investors with a clearer perspective of the company's ongoing operating performance and a more relevant comparison to prior period results. 

Guidance Policy
Brinker provides annual guidance as it relates to comparable restaurant sales, earnings per diluted share, and other key line items in the income statement and will only provide updates if there is a material change versus the original guidance. Consistent with prior practice, management will not discuss intra-period sales or other key operating results not yet reported as the limited data may not accurately reflect the final results of the period or quarter referenced.

¹ Royalty revenues are recognized based on the sales generated and reported to the company by franchisees.

Webcast Information
Investors and interested parties are invited to listen to today's conference call, as management will provide further details of the quarter. The call will broadcast live on the Brinker website (www.brinker.com) at 9 a.m. CST today (Jan. 22). For those who are unable to listen to the live broadcast, a replay of the call will be available shortly thereafter and will remain on the Brinker website until the end of the day Feb. 19, 2013. 

Additional financial information, including statements of income which detail operations excluding  special items, franchise and other revenues, and comparable restaurant sales trends by brand, is also available on the Brinker website under the Financial Information section of the Investor tab.

Forward Calendar

• SEC Form 10-Q for second quarter fiscal 2013 filing on or before Feb. 4, 2013; and
• Third quarter earnings release, before market opens, April 23, 2013.

About Brinker
Brinker International, Inc. is one of the world's leading casual dining restaurant companies. Founded in 1975 and based in Dallas, Texas, Brinker currently owns, operates, or franchises 1,593 restaurants under the names Chili's^® Grill & Bar (1,549 restaurants) and Maggiano's Little Italy^® (44 restaurants).

Forward-Looking Statements
The statements contained in this release that are not historical facts are forward-looking statements. These forward-looking statements involve risks and uncertainties and, consequently, could be affected by general business and economic conditions, financial and credit market conditions, credit availability, reduced disposable income, the impact of competition, the impact of mergers, acquisitions, divestitures and other strategic transactions, franchisee success,  the seasonality of the company's business, adverse weather conditions, future commodity prices, product availability, fuel and utility costs and availability, terrorists acts, consumer perception of food safety, changes in consumer taste, health epidemics or pandemics, changes in demographic trends, availability of employees, unfavorable publicity, the company's ability to meet its business strategy plan, acts of God, governmental regulations and inflation.

SOURCE Brinker International, Inc.

Stacey Sullivan, Media Relations, 1-800-775-7290, or Tony Laday, Investor Relations, +1-972-770-8890