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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 25, 1997 Commission File No. 1-10275
BRINKER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1914582
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
6820 LBJ Freeway, Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (972) 980-9917
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Common Stock, $0.10 par value
Stock Purchase Rights
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ___
The aggregate market value of the voting stock held by
persons other than directors and officers of registrant (who
might be deemed to be affiliates of registrant) at September 8,
1997 was $1,017,635,913.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date.
Outstanding at
Class September 8, 1997
Common Stock, $0.10 par value 65,367,320 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Shareholders
for the fiscal year ended June 25, 1997 are incorporated by
reference into Parts I, II and IV hereof, to the extent indicated
herein. Portions of the registrant's Proxy Statement dated
September 23, 1997, for its annual meeting of shareholders on
November 6, 1997, are incorporated by reference into Part III
hereof, to the extent indicated herein.
PART I
Item 1. BUSINESS.
General
Brinker International, Inc. (the "Company") is
principally engaged in the operation, development and
franchising of the Chili's Grill & Bar ("Chili's"),
Romano's Macaroni Grill ("Macaroni Grill"), On The Border
Mexican Cafe ("On The Border"), Cozymel's Coastal Mexican
Grill ("Cozymel's"), Maggiano's Little Italy
("Maggiano's"), and the Corner Bakery ("Corner Bakery")
restaurant concepts. In addition, the Company is engaged
in the operation and development of the Eatzi's Market and
Bakery concept. The Company was organized under the laws
of the State of Delaware in September 1983 to succeed to
the business operated by Chili's, Inc., a Texas
corporation, organized in August 1977. The Company
completed the acquisitions of Macaroni Grill, On The
Border, Cozymel's, Maggiano's, and Corner Bakery in
November 1989, May 1994, July 1995, August 1995, and
August 1995, respectively.
Restaurant Concepts and Menus
Chili's Grill & Bar
Chili's establishments are full-service Southwestern-
themed restaurants, featuring a casual atmosphere and a
limited menu of freshly prepared chicken, beef and seafood
entrees, hamburgers, ribs, fajitas, sandwiches, salads,
appetizers and desserts, all of which are prepared fresh
daily according to special Chili's recipes.
Chili's restaurants feature quick, efficient and
friendly table service designed to minimize customer
waiting time and facilitate table turnover, with an
average turnover time per table of approximately 45
minutes. Service personnel are dressed casually in jeans
or slacks, knit shirts and aprons to reinforce the casual,
informal environment. The decor of a Chili's restaurant
consists of booth seating, tile-top tables, hanging plants
and wood and brick walls covered with interesting
memorabilia.
Emphasis is placed on serving substantial portions of
fresh, quality food at modest prices. Entree selections
range in menu price from $4.99 to $12.99, with the average
revenue per meal, including alcoholic beverages,
approximating $9.39 per person. A full-service bar is
available at each Chili's restaurant, with frozen
margaritas offered as the concept's specialty drink.
During the year ended June 25, 1997, food and
non-alcoholic beverage sales constituted approximately 86%
of the concept's total restaurant revenues, with alcoholic
beverage sales accounting for the remaining 14%.
Romano's Macaroni Grill
Macaroni Grill is a casual, country-style Italian
restaurant which specializes in family-style recipes and
features seafood, meat, chicken, pasta, salads, pizza,
appetizers and desserts with a full-service bar in most
restaurants. Exhibition cooking, pizza ovens and
rotisseries provide an enthusiastic and exciting
environment in the restaurants. Macaroni Grill
restaurants also feature white linen-clothed tables,
fireplaces, sous stations and prominent displays of wines.
Service personnel are dressed in white, starched shirts
and aprons, dark slacks, and bright ties.
Entree selections range in menu price from $4.95 to
$17.45 with certain specialty items priced on a daily
basis. The average revenue per meal, including alcoholic
beverages, is approximately $13.14 per person. During the
year ended June 25, 1997, food and non-alcoholic beverage
sales constituted approximately 85% of the concept's total
restaurant revenues, with alcoholic beverage sales
accounting for the remaining 15%.
On The Border Mexican Cafe
On The Border restaurants are full-service, casual Tex-
Mex theme restaurants featuring Southwest mesquite-grilled
specialties and traditional Tex-Mex entrees and appetizers
served in generous portions at modest prices. On The
Border restaurants feature an outdoor patio, a full-
service bar, booth and table seating and brick and wood
walls with a Southwest decor. On The Border restaurants
also offer enthusiastic table service intended to minimize
customer waiting time and facilitate table turnover while
simultaneously providing customers with a satisfying
casual dining experience.
Entree selections range in menu price from $4.99 to
$13.49, with the average revenue per meal, including
alcoholic beverages, approximating $10.71 per person.
During the year ended June 25, 1997, food and non-
alcoholic beverage sales constituted approximately 79% of
the concept's total restaurant revenues, with alcoholic
beverage sales accounting for the remaining 21%.
Cozymel's Coastal Mexican Grill
Cozymel's restaurants are casual, upscale authentic
Yucatan restaurants featuring fish, chicken, beef and pork
entrees, appetizers, desserts and a full-service bar
featuring a wide variety of specialty frozen beverages.
Cozymel's restaurants offer an authentic "Yucatan
vacation" atmosphere, which includes an outdoor patio.
Service personnel are festively attired featuring colorful
vests and bow ties.
Entree selections range in menu price from $4.99 to
$12.99 with the average revenue per meal, including
alcoholic beverages, approximating $13.12 per person.
During the year ended June 25, 1997, food and non-
alcoholic beverage sales constituted approximately 75% of
the concept's total restaurant revenues, with alcoholic
beverages accounting for the remaining 25%.
Maggiano's Little Italy
Maggiano's restaurants are designed as classic re-
creations of a New York City pre-war "Little Italy" dinner
house. The existing restaurants are located in the
Chicago metropolitan area, McLean, Virginia, and Atlanta,
Georgia. Each of the Maggiano's restaurants is a casual,
full-service Italian restaurant with a full lunch and
dinner menu, a family-style menu, and banquet facilities,
offering southern Italian appetizers, homemade bread,
large portions of pasta, chicken, seafood, veal and steak,
and a full range of alcoholic beverages. Entree
selections range in menu price from $5.99 to $29.95, with
the average revenue per meal, including alcoholic
beverages, approximating $22.76 per person. During the
year ended June 25, 1997, food and non-alcoholic beverage
sales constituted approximately 81% of the concept's total
restaurant revenues, with alcoholic beverage sales
accounting for the remaining 19%.
Corner Bakery
The Corner Bakery is designed as a retail bakery in the
traditional, old world bread bakery style. The Corner
Bakery offers handmade hearth-baked loaves, rolls,
muffins, brownies, cookies and specialty items made fresh
daily. The breads offered by the Corner Bakery include
baguettes, country loaves and specialty breads, such as
raisin-nut, olive, chocolate-cherry, multi-grains and
ryes. In addition, the Corner Bakery also offers pizza,
sandwiches, soups and salads. The existing Corner
Bakeries are located in the Chicago metropolitan area,
McLean, Virginia, Atlanta, Georgia and Union Station in
Washington, D.C.
Eatzi's Market and Bakery
Eatzi's is a home meal replacement retail store which
offers customers almost everything in the meal spectrum,
from fresh produce and raw meats and seafood to high-
quality, chef-prepared meals-to-go. Eatzi's also provides
a tremendous variety of "made from scratch" breads and
pastries along with dry groceries, deli meats and cheeses,
made-to-order salads and sandwiches, and fresh cut
flowers. Large selections of non-alcoholic beverages,
wine, and "create your own six-pack" beer are available to
complete the meal.
Eatzi's features an abundance of fresh, high-quality
meals, openly presented in distinctive areas, replicating
an energetic European marketplace with an exhibition
kitchen and bakery. The circular chef's display case is
the focal point of the store designed to channel customer
traffic around to other departments. There is limited
indoor and outdoor seating since the emphasis is on take-
out purchases. The chefs are professionally dressed in
white chef's coats and hats with black and white
houndstooth pants. Retail service personnel wear black
pants, white, banded collar shirts and green aprons.
Emphasis is placed on restaurant-quality cuisine,
prepared fresh daily by highly skilled and culinary-
trained chefs using Eatzi's unique recipes. Certain
designated menu items are rotated periodically to provide
variety and to augment the core menu. Corporate chefs are
constantly developing and testing new recipes to ensure
high-quality and ample variety in addition to keeping
ahead of the customer's changing taste profiles.
Individual meal selections range in price from $3.99 to
$10.99 with the average revenue per purchase, including
alcoholic beverages, approximating $15.00. During the
year ended June 25, 1997, food and non-alcoholic beverage
sales constituted 93% of the concept's total revenues,
with alcoholic beverages accounting for the remaining 7%.
The original Eatzi's is located in Dallas, Texas, with an
additional Eatzi's having opened in Houston, Texas in
August 1997.
Restaurant Locations
At June 25, 1997, the Company's system of company-
operated, joint venture and franchised units included 710
restaurants located in 46 states, Canada, Mexico,
Singapore, Malaysia, Australia, Egypt, Puerto Rico,
France, Indonesia, Great Britain, Korea, Philippines, and
United Arab Emirates. The Company's portfolio of
restaurants is illustrated below:
June 25, 1997
Chili's:
Company-Operated 393
Franchise 144
Macaroni Grill:
Company-Operated 97
Franchise 2
On The Border:
Company-Operated 34
Franchise 7
Cozymel's 12
Maggiano's 5
Corner Bakery 15
Eatzi's 1
TOTAL 710
Business Development
The Company's long-term objective is to continue
expansion of its restaurant concepts by opening
Company-operated units in strategically desirable markets.
The Company intends to concentrate on development of
certain identified markets to achieve penetration levels
deemed desirable by the Company in order to improve the
Company's competitive position, marketing potential and
profitability. Expansion efforts will be focused on major
metropolitan areas in the United States and smaller market
areas which can adequately support any of the Company's
restaurant concepts.
The Company considers the restaurant site selection
process critical to its long-term success and devotes
significant effort to the investigation of new locations
utilizing a variety of sophisticated analytical
techniques. The site selection process focuses on a
variety of factors including: trading-area demographics
such as target population density and household income
levels; an evaluation of site characteristics such as
visibility, accessibility and traffic volume; proximity to
activity centers such as shopping malls, hotel/motel
complexes and offices; and an analysis of the potential
competition. Members of senior management inspect and
approve each restaurant site prior to its acquisition.
The Company periodically reevaluates restaurant sites
to ensure that site selection attributes have not
deteriorated below minimum standards. In the event site
deterioration were to occur, the Company makes a concerted
effort to improve the restaurant's performance by
providing physical, operating and marketing enhancements
unique to each restaurant's situation. If efforts to
restore the restaurant's performance to acceptable minimum
standards are unsuccessful, the Company considers
relocation to a proximate, more desirable site, or
evaluates closing the restaurant if the Company's
criteria, such as return on investment and area
demographic data do not support a relocation. Since
inception, the Company has closed 15 restaurants,
including 5 in fiscal 1997, which were performing below
the Company's standards primarily due to declining trading-
area demographics. The Company operates pursuant to a
strategic plan targeted to support the Company's long-term
growth objectives, with a focus on continued development
of those restaurant concepts that have the greatest return
potential for the Company and its shareholders.
The following table illustrates the system-wide
restaurants opened in fiscal 1997 and the planned openings
in fiscal 1998:
Fiscal 1997 Fiscal 1998
Openings Projected Openings
Chili's:
Company-Operated 30 18-22
Franchise 23 30-40
Macaroni Grill 28 18-20
On The Border:
Company-Operated 12 15-18
Franchise 5 8-10
Cozymel's 1 0-1
Maggiano's 2 2-3
Corner Bakery 7 10-15
Eatzi's 0 2-3
TOTAL 108 103-132
The Company anticipates that some of the fiscal 1998
projected restaurant openings will be constructed pursuant
to "build-to-suit" agreements, in which the lessor
contributes the land cost and all, or substantially all,
of the building construction costs. In other cases, the
Company either leases the land, and pays for the building,
furniture, fixtures and equipment from its own funds, or
owns the land, building, furniture, fixtures and
equipment.
As of June 25, 1997, the Company has lease or purchase
commitments for 15 Chili's, 11 Macaroni Grill, 15 On The
Border, 1 Maggiano's, 4 Corner Bakery, and 1 Eatzi's
restaurant sites. The Company is currently in the process
of completing the acquisition of sites for fiscal 1998
projected openings and locating sites for fiscal 1999
projected openings.
The following table illustrates the approximate average
capital investment for a typical unit in the Company's
primary restaurant concepts:
Chili's Macaroni Grill Corner Bakery On The Border Cozymel's
Land $ 650,000 $ 850,000 $ --- $ 730,000 $1,200,000
Building 1,100,000 1,300,000 650,000 1,200,000 1,700,000
Furniture &
Equipment 430,000 510,000 260,000 610,000 700,000
Other 75,000 75,000 50,000 75,000 80,000
TOTAL $2,255,000 $2,735,000 $ 960,000 $2,615,000 $3,680,000
The Maggiano's capital investment varies based on the
square footage of the restaurant and the "build-to-suit"
lease agreement. The five Maggiano's restaurants
constructed through June 25, 1997, range in cost from
$660,000 to $4,067,000 (excluding land and net of landlord
contributions).
The specific rate at which the Company is able to open
new restaurants is determined by its success in locating
satisfactory sites, negotiating acceptable lease or
purchase terms, securing appropriate local governmental
permits and approvals, and by its capacity to supervise
construction and recruit and train management personnel.
Joint Venture and Franchise Operations
The Company intends to continue its expansion through
joint venture and franchise development, both domestically
and internationally. During the year ended June 25, 1997,
22 new Chili's and 5 On The Border franchised restaurants
were opened.
The Company has entered into international franchise
agreements which will bring Chili's to China, Peru,
Kuwait, Guam, Saudi Arabia, and Colombia in the 1998
fiscal year. In fiscal 1997, the first Chili's
restaurants opened in Philippines (December 1996), United
Arab Emirates (May 1997), and Korea (June 1997).
The Company intends to continue pursuing international
expansion and is currently contemplating development in
other countries. A typical franchise development agreement
provides for payment of area development and initial
franchise fees in addition to subsequent royalty and
advertising fees based on the gross sales of each
restaurant. Future franchise development agreements are
expected to remain limited to enterprises having
significant experience as restaurant operators and proven
financial ability to develop multi-unit operations.
The Company has previously entered into agreements for
research and development activities related to the testing
of new restaurant concepts and typically has a 25-50%
interest in such ventures, which interests are accounted
for under the equity method. The Company currently owns a
50% interest in the two Eatzi's stores currently operating
in Dallas and Houston, Texas. In addition, the Company
holds a 25% interest in the legal entities owning the one
Wildfire Restaurant and two Big Bowl Restaurants located
in Chicago, Illinois.
At June 25, 1997, 34 total joint venture or franchise
development agreements existed. The Company anticipates
that an additional 30-40 franchised Chili's and 8-10
franchised On The Border restaurants will be opened during
fiscal 1998.
Restaurant Management
The Company's philosophy to maintain and operate each
concept as a distinct and separate entity ensures that the
culture, recruitment and training programs and unique
operating environments are preserved. These factors are
critical to the viability of each concept. Each concept is
directed by a President and one or more concept Vice
Presidents and Senior Vice Presidents.
The Company's restaurant management structure varies by
concept. The individual restaurants themselves are led by
a management team including a General Manager and between
two to five additional managers. The level of restaurant
supervision depends upon the operating complexity and
sales volume of each concept. An Area Director/Supervisor
is responsible for the supervision of, on average, three
to seven restaurants. For those concepts with a
significant number of units within a geographical region,
additional levels of management may be provided.
The Company believes that there is a high correlation
between the quality of restaurant management and the long-
term success of a concept. In that regard, the Company
encourages increased tenure at all management positions
through various short and long-term incentive programs,
including equity ownership. These programs, coupled with
a general management philosophy emphasizing quality of
life, have enabled the Company to attract and retain
management employees at levels above the industry norm.
The Company ensures consistent quality standards in all
concepts through the issuance of Operations Manuals
covering all elements of operations and Food & Beverage
Manuals which provide guidance for preparation of Company
formulated recipes. Routine visitation to the restaurants
by all levels of supervision enforce strict adherence to
Company standards.
The Director of Training for each concept is
responsible for maintaining each concept's operational
training program, which includes a four to five month
training period for restaurant management trainees, a
continuing management training process for managers and
supervisors, and training teams consisting of groups of
employees experienced in all facets of restaurant
operations that train employees to open new restaurants.
The training teams typically begin on-site training at a
new restaurant seven to ten days prior to opening and
remain on location two to three weeks following the
opening to ensure the smooth transition to operating
personnel.
Purchasing
The Company's ability to maintain consistent quality of
products throughout each of its restaurant concepts
depends upon acquiring food products and related items
from reliable sources. Suppliers are pre-approved by the
Company and are required along with the restaurants to
adhere to strict product specifications established
through the Company's quality assurance program to ensure
that high quality, wholesome food and beverage products
are served in the restaurants. The Company negotiates
directly with the major suppliers to obtain competitive
prices and uses purchase commitment contracts to stabilize
the potentially volatile pricing associated with certain
commodity items. All essential food and beverage products
are available, or upon short notice can be made available,
from alternative qualified suppliers in all cities in
which the Company's restaurants are located. Because of
the relatively rapid turnover of perishable food products,
inventories in the restaurants, consisting primarily of
food, beverages and supplies, have a modest aggregate
dollar value in relation to revenues.
Advertising and Marketing
The Company's concepts generally focus on the 18 to 54
year old age group, which constitutes approximately half
of the United States population. Members of this
population segment grew up on fast food, but the Company
believes that, with increasing maturity, they prefer a
more adult, upscale dining experience. To attract this
target group, the Company relies primarily on television,
radio, direct mail advertising and word-of-mouth
information communicated by customers.
The Company's franchise agreements require advertising
contributions to the Company to be used exclusively for
the purpose of maintaining, directly administering and
preparing standardized advertising and promotional
activities. Franchisees spend additional amounts on local
advertising when approved by the Company.
Employees
At June 25, 1997, the Company employed approximately
47,000 persons, of whom approximately 800 were corporate
personnel, 3,200 were restaurant area directors, managers
or trainees and 43,000 were employed in non-management
restaurant positions. The executive officers of the
Company have an average of more than 19 years of
experience in the restaurant industry.
The Company considers its employee relations to be good
and believes that its employee turnover rate is lower than
the industry average. Most employees, other than
restaurant management and corporate personnel, are paid on
an hourly basis. The Company believes that it provides
working conditions and wages that compare favorably with
those of its competition. The Company's employees are not
covered by any collective bargaining agreements.
Trademarks
The Company has registered, among other marks, "Brinker
International", "Chili's", "Chili's Texas Grill", "Chili's
Too", "Chili's Bar & Bites", "Chili's Southwest Grill &
Bar", "Corner Bakery", "Cozymel's", "Cozymel's Coastal
Mexican Grill", "Eatzi's", "Romano's Macaroni Grill",
"Macaroni Grill", "Maggiano's Little Italy", "On The
Border", and "On The Border Mexican Cafe" as trademarks
with the United States Patent and Trademark Office. In
addition, the Company has trademark applications pending
for "Chili's - A Roadhouse Grill & Bar", and "Eatzi's
Market and Bakery".
Risk Factors
The Company wishes to caution readers that the
following important factors, among others, could cause the
actual results of the Company to differ materially from
those indicated by forward-looking statements contained
herein regarding cash flow from operations, restaurant
openings, operating margins, capital requirements, the
availability of acceptable real estate locations for new
restaurants, and other matters. Except for historical
information, matters discussed in such statements are
forward-looking statements that involve risks and
uncertainties.
Competition. The restaurant business is highly
competitive with respect to price, service, restaurant
location and food quality, and is often affected by
changes in consumer tastes, economic conditions,
population and traffic patterns. The Company competes
within each market with locally-owned restaurants as well
as national and regional restaurant chains, some of which
operate more restaurants and have greater financial
resources and longer operating histories than the Company.
There is active competition for management personnel and
for attractive commercial real estate sites suitable for
restaurants. In addition, factors such as inflation,
increased food, labor and benefits costs, and difficulty
in attracting hourly employees may adversely affect the
restaurant industry in general and the Company's
restaurants in particular.
Seasonality. The Company's sales volumes fluctuate
seasonally, and are generally higher in the summer months
and lower in the winter months.
Governmental Regulations. Each of the Company's
restaurants is subject to licensing and regulation by
alcoholic beverage control, health, sanitation, safety and
fire agencies in the state and/or municipality in which
the restaurant is located. The Company has not
encountered any difficulties or failures in obtaining the
required licenses or approvals that could delay or prevent
the opening of a new restaurant and does not, at this
time, anticipate any.
The Company is subject to federal and state
environmental regulations, but these have not had a
material negative effect on the Company's operations.
More stringent and varied requirements of local and state
governmental bodies with respect to zoning, land use and
environmental factors could delay or prevent development
of new restaurants in particular locations. The Company
is subject to the Fair Labor Standards Act which governs
such matters as minimum wages, overtime and other working
conditions, along with the American With Disabilities Act
and various family leave mandates. The Company does not
expect any further significant increases in payroll
expenses as a result of the recently-mandated increases in
the minimum wage, but is uncertain of the repercussion, if
any, on other expenses as vendors are impacted by higher
minimum wage standards.
Inflation. The Company has not experienced a
significant overall impact from inflation. If operating
expenses increase due to inflation, the Company recovers
increased costs by increasing menu prices. However,
competition may prohibit such increases in menu prices.
Item 2. PROPERTIES.
The following table illustrates the approximate average
dining capacity for each prototypical unit in primary
restaurant concepts:
Chili's Macaroni Grill Corner Bakery On The Border Cozymel's
Square Feet 5,600-6,000 7,100 4,300 7,800 10,700
Dining Seats 214-230 235-290 100-110 275-305 320-360
Dining Tables 51-60 60-75 50-60 60-70 70-85
Maggiano's dining capacity varies based upon the square
footage of the restaurant. For the five Maggiano's units
constructed through June 25, 1997, square footage ranged
from 10,900 to 20,600, the number of dining seats ranged
from 470 to 840, and the number of dining tables ranged
from 100 to 200.
Certain of the Company's restaurants are leased for an
initial term of 5 to 30 years, with renewal terms of 1 to
30 years. The leases typically provide for a fixed rental
plus percentage rentals based on sales volume. At June
25, 1997, the Company owned the land and/or building for
423 of the 556 Company-operated restaurants. The Company
considers that its properties are suitable, adequate, well-
maintained and sufficient for the operations contemplated.
The Company leases warehouse space totalling
approximately 26,300 square feet in Dallas, Texas, which
it uses for storage of equipment and supplies. The
Company purchased an office building containing
approximately 105,000 square feet for its corporate
headquarters in July 1989. This office building was
expanded in May 1997 by the addition of a 2,470 square
foot facility used for menu development activities. In
January 1996, the Company purchased an additional office
complex containing three (3) buildings and approximately
198,000 square feet for the expansion of its corporate
headquarters. Approximately 63,500 square feet of this
complex is currently utilized by the Company, with the
remaining 134,500 square feet under lease, listed for
lease to third party tenants, or reserved for future
expansion of the Company headquarters.
Item 3. LEGAL PROCEEDINGS.
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS.
The Company's Common Stock is traded on the New York
Stock Exchange ("NYSE") under the symbol "EAT". Bid
prices quoted represent interdealer prices without
adjustment for retail markup, markdown and/or commissions,
and may not necessarily represent actual transactions.
The following table sets forth the quarterly high and low
closing sales prices of the Common Stock, as reported by
the NYSE.
Fiscal year ended June 25, 1997:
First Quarter 17 1/2 13
Second Quarter 18 3/4 16 1/8
Third Quarter 16 5/8 11
Fourth Quarter 14 1/4 11
Fiscal year ended June 26, 1996:
First Quarter 18 7/8 14 7/8
Second Quarter 16 1/8 12
Third Quarter 16 3/4 12 7/8
Fourth Quarter 18 1/2 15 1/2
As of September 8, 1997, there were 1,814 holders of
record of the Company's Common Stock.
The Company has never paid cash dividends on its Common
Stock and does not currently intend to do so as profits
are reinvested into the Company to fund expansion of its
restaurant business. Payment of dividends in the future
will depend upon the Company's growth, profitability,
financial condition and other factors which the Board of
Directors may deem relevant.
Item 6. SELECTED FINANCIAL DATA.
"Selected Financial Data" on page 33 of the Company's
1997 Annual Report to Shareholders is incorporated herein
by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 34 through
38 of the Company's 1997 Annual Report to Shareholders is
incorporated herein by reference.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISKS.
Not applicable.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See Item 14(a)(1).
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
"Directors and Executive Officers" on pages 4-9 and
"Section 16(a) Beneficial Ownership Reporting Compliance" on page 15
of the Company's Proxy Statement dated September 23, 1997,
for the annual meeting of shareholders on November 6,
1997, are incorporated herein by reference.
Item 11. COMPENSATION INFORMATION.
"Executive Compensation" on pages 10 through 11 and
"Report of the Compensation Committee" on pages 12 through
14 of the Company's Proxy Statement dated September 23,
1997, for the annual meeting of shareholders on November
6, 1997, are incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
"Principal Shareholders" on page 2 and "Security
Ownership of Management and Election of Directors" on
pages 3 through 4 of the Company's Proxy Statement dated
September 23, 1997, for the annual meeting of shareholders
on November 6, 1997, are incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
"Certain Transactions" on page 16 of the Company's
Proxy Statement dated September 23, 1997, for the annual
meeting of shareholders on November 6, 1997, is
incorporated herein by reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K.
(a) (1) Financial Statements.
Reference is made to the Index to Financial Statements
attached hereto on page 15 for a listing of all financial
statements incorporated herein from the Company's 1997
Annual Report to Shareholders.
(a) (2) Financial Statement Schedules.
None.
(a) (3) Exhibits.
Reference is made to the Exhibit Index preceding the
exhibits attached hereto on page E-1 for a list of all
exhibits filed as a part of this Report.
(b) Reports on Form 8-K
The Company was not required to file a current report
on Form 8-K during the three months ended June 25, 1997.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BRINKER INTERNATIONAL, INC.,
a Delaware corporation
By: /Russell G. Owens
Russell G. Owens, Executive Vice
President, Chief Strategic Officer
and Chief Financial Officer
Dated: September 23, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
of the registrant and in the capacities indicated on
September 23, 1997.
Name Title
/Ronald A. McDougall President, Chief Executive
Ronald A. McDougall Officer and Director
(Principal Executive Officer)
/Russell G. Owens Executive Vice President, Chief
Russell G. Owens Strategic Officer and Chief
Financial Officer (Principal
Financial and Accounting Officer)
/Norman E. Brinker Chairman of the Board
Norman E. Brinker
/Gerard V. Centioli Director
Gerard V. Centioli
Director
Rae F. Evans
/J.M. Haggar, Jr. Director
J.M. Haggar, Jr.
Director
Frederick S. Humphries
/Ronald Kirk Director
Ronald Kirk
/Jeffrey A. Marcus Director
Jeffrey A. Marcus
/James E. Oesterreicher Director
James E. Oesterreicher
/Roger T. Staubach Director
Roger T. Staubach
INDEX TO FINANCIAL STATEMENTS
The following is a listing of the financial statements which are
incorporated herein by reference. The financial statements of
the Company included in the Company's 1997 Annual Report to
Shareholders are incorporated herein by reference in Item 8.
1997 Annual
Report Page
Consolidated Statements of Income - 39
Years Ended June 25, 1997, June 26, 1996
and June 28, 1995
Consolidated Balance Sheets - 40-41
June 25, 1997 and June 26, 1996
Consolidated Statements of Shareholders' 42
Equity - Years Ended June 25, 1997,
June 26, 1996 and June 28, 1995
Consolidated Statements of Cash Flows - 43
Years Ended June 25, 1997, June 26, 1996
and June 28, 1995
Notes to Consolidated Financial Statements 44-56
Independent Auditors' Report 57
All schedules are omitted as the required information is
inapplicable or the information is presented in the
financial statements or related notes.
INDEX TO EXHIBITS
Exhibit
3(a) Certificate of Incorporation of the registrant, as
amended. (1)
3(b) Bylaws of the registrant. (1)
10(a) Registrant's 1983 Incentive Stock Option Plan. (2)
10(b) Registrant's 1991 Stock Option Plan for Non-Employee
Directors and Consultants. (3)
10(c) Registrant's 1992 Incentive Stock Option Plan. (3)
13 1997 Annual Report to Shareholders. (4)
21 Subsidiaries of the registrant. (3)
23 Independent Auditors' Consent. (3)
27 Financial Data Schedule. (5)
99 Proxy Statement of registrant dated September 23, 1997. (4)
(1) Filed as an exhibit to annual report on Form 10-K for
year ended June 28, 1995 and incorporated herein by
reference.
(2) Filed as an exhibit to annual report on Form 10-K for
year ended June 26, 1996 and incorporated herein by
referenced.
(3) Filed herewith.
(4) Portions filed herewith, to the extent indicated herein.
(5) Filed with EDGAR version.