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Company Profile of Brinker International
Company Profile of Brinker International - May 3rd, 2011
Brinker International, Inc. (NYSE: EAT), is the parent company of Chili's and Maggiano's Little Italy.
Brinker International, Inc. (Brinker) owns, develops, operates and franchises the Chili’s Grill & Bar (Chili’s) and Maggiano’s Little Italy (Maggiano’s) restaurant brands. At June 30, 2010, the Company’s system of Company-owned and franchised restaurants included 1,550 restaurants located in 50 states, and Washington, D.C. It also has restaurants in the United States territories of Guam and Puerto Rico and the countries of Bahrain, Canada, Dominican Republic, Ecuador, Egypt, El Salvador, Germany, Guatemala, Honduras, India, Indonesia, Japan, Jordan, Kuwait, Lebanon, Malaysia, Mexico, Oman, Peru, the Philippines, Portugal, Qatar, Saudi Arabia, Singapore, South Korea, Taiwan, Turkey, the United Arab Emirates and Venezuela. In June 2010, the Company completed the sale of the On The Border Mexican Grill & Cantina restaurant brand to OTB Acquisition LLC, an affiliate of Golden Gate Capital.
Chili’s Grill & Bar
Chili’s is categorized in the Bar & Grill category of casual dining. Chili’s menu features signature offerings, such as Big Mouth Burgers and Bites, slow smoked in-house Baby Back Ribs, hand-battered Chicken Crispers, Sizzling Fajitas and its homemade salsa and chips. Chili’s also offers food through its To-Go menu, online ordering, and separate To-Go entrances in the majority of its restaurants. During the fiscal year ended June 30, 2010 (fiscal 2010), food and non-alcoholic beverage sales constituted approximately 87% of Chili’s total restaurant revenues, with alcoholic beverage sales accounting for the remaining 13%.
Maggiano’s Little Italy
Maggiano’s is a full-service, national, casual dining Italian restaurant brand. The Company’s Maggiano’s restaurants feature individual and family-style menus, and its restaurants also have banquet facilities that can host large party events. It has a full lunch and dinner menu offering chef-prepared, classic Italian-American fare in the form of appetizers, entrees with bountiful portions of pasta, chicken, seafood, veal and prime steaks, and desserts. Its Maggiano’s restaurants also offer a range of alcoholic beverages, including a selection of wines. In addition, Maggiano’s offers a full carryout menu, as well as local delivery services. During fiscal 2010, food and non-alcoholic beverage sales constituted approximately 82% of Maggiano’s total restaurant revenues, with alcoholic beverage sales accounting for the remaining 18%.
At the end of June 1992, Brinker posted annual revenues of $519.3 million, with earnings of $26.1 million; 300 Chili's Bar & Grills, 20 Grady's American Grills, and 17 Romano's outlets were in operation. Later that year, Brinker announced plans for further foreign expansion, signing an agreement with Pac-Am Food Concepts, based in Hong Kong, to franchise 25 Chili's restaurants in the Far East over the next 15 years. Pac-Am planned to duplicate the Chili's decor and menu in locations such as Jakarta, Indonesia, and Seoul, South Korea, with some changes to satisfy local tastes.
Brinker also began to test another theme restaurant, Kona Ranch Steakhouse, in Oklahoma City. A small Tex-Mex restaurant in San Antonio, called Nacho Mama's, also was considered a possible avenue for expansion, although Brinker's executives vowed to change that restaurant's name in the event of an acquisition. In the midst of its aggressive plans to expand all four of its principal restaurant chains, the company encountered an unexpected obstacle on January 21, 1993, when Norman Brinker suffered a serious head injury while playing polo. Brinker was comatose for two weeks, during which time he was temporarily replaced at the company by his second in command. Despite an initially unfavorable prognosis, Brinker made a rapid recovery and returned to resume his positions of chairperson and CEO in May 1993.
Shortly thereafter, Brinker International moved to expand its Spageddies property, buying out the interest of its partner Romano in the prototype Spageddie's restaurant and announcing that two more Texas locations, in Tyler and Mesquite, would be opened. To provide a corporate structure that would enhance growth in all areas of the company, Brinker reorganized its headquarters staff into concept teams, which were designed to act as small companies within the framework of the larger corporation. As Brinker approached the mid-1990s, it appeared well positioned for strong growth, enhanced by an experienced management team and a track record of success with a variety of different restaurant concepts.
Restaurant Concepts for the Millennium
The year 1995 was pivotal for Brinker. By mid-decade it had become clear that the traditional casual dining concept was losing momentum, while other, more specialized niches, in particular Italian and Mexican cuisine, promised a much larger potential for growth. Observing the success of The Olive Garden, which remained the only major chain of Italian restaurants in the United States, Brinker recognized the need to retool its own Italian concept. In July 1995 the company announced a strategic partnership with Lettuce Entertain You Enterprises, a restaurant developer in the Chicago area. The joint venture enabled Brinker to acquire three of Lettuce's Maggiano's Little Italy restaurants and five of its Corner Bakeries, in addition to establishing a creative development deal between the two companies. Dubbed the 'Dream Team' by executives from both sides, this arrangement brought together two men who were widely considered to be the best creative talents in the restaurant industry: Brinker's Phil Romano, 'an oracle' in the restaurant business, according to the Dallas Morning News, with Lettuce's Rich Melman, whom Business Week had called the 'Andrew Lloyd Weber of the Industry.' The two companies agreed to come up with at least one new concept within the first year, over which Lettuce would retain control. The company also created an Italian Concepts Division in 1996, naming Gerard Centioli as president.
In the meantime, Brinker also made some strategic changes in its holdings. In December 1995 the company sold Grady's and Spageddie's to Quality Dining Inc.; then, in January 1996 it opened its first Eatzi's in Dallas. Catering to the public's demand for restaurants that also featured prepared foods and groceries, Eatzi's was an immediate success, earning $12 million in the first year, more than double its predicted sales. By November 1997 a second location had opened in Houston, and a third opened in Atlanta the following February. During this same period, the company set out to modify its Romano's Macaroni Grill concept, with the aim of transforming it into a more casual, less expensive restaurant in order to attract a broader clientele. The new Romano's opened in November 1998 and promptly showed increased sales. In March 1999 Romano's debuted in the United Kingdom, the first of a projected 20 restaurants to be established in England through a joint venture with Queensborough Holdings PLC of London.
Brinker was equally determined in carving out its niche in the Mexican cuisine market. In February 1994 it acquired the On the Border restaurant chain, comprised of 21 units, and in May it opened the first Cozymel's Coastal Mexican Grill. The success of Cozymel's in Texas led to the announcement in May 1995 of the opening of an additional 12 locations nationwide. The following March the company embarked on an aggressive marketing campaign to promote the franchising of On the Border, and by early 1997 it announced the opening of two new On the Border locations in Columbus, Ohio.
By the end of the decade Brinker had nearly doubled its sales over a five-year period, from $1.2 billion in 1996 to nearly $2.2 billion in 2000, and increased its restaurant total to more than 1,000. Although economic indicators suggested a decline in the casual restaurant market in the future, the prognosis for the industry in general remained encouraging, and Brinker's proven talent for adaptation and innovation promised that the company would be able to confront its future challenges head on.
Principal Competitors: Carlson Restaurants Worldwide Inc.; Darden Restaurants, Inc.; Outback Steakhouse, Inc.
Market Cap (Mil.): $2,150.62
Shares Outstanding (Mil.): 89.27
Annual Dividend: 0.56
Yield (%): 2.32
EAT Industry Sector
P/E (TTM): 16.21 24.02 8.93
EPS (TTM): 56.93 -- --
ROI: 12.46 2.22 0.90
ROE: 24.77 2.94 1.56
Incorporated: 1975 as Chili's Bar & Grill, Inc.
Sales: $2.16 billion (2000)
Stock Exchanges: New York
Ticker Symbol: EAT
NAIC: 53311 Lessors of Nonfinancial Intangible Assets (Except Copyrighted Works) (pt); 72211 Full-Service Restaurants
1975: Larry Levine opens first Chili's Grill & Bar in Dallas, Texas.
1983: Norman Brinker takes over Chili's restaurant chain.
1988: First Romano's Macaroni Grill opens in San Antonio, Texas.
1991: Chili's is renamed Brinker International, Inc.
1992: Brinker reaches an agreement with Pac-Am Food Concepts to expand Chili's franchise to the Far East.
1995: Brinker establishes a strategic partnership with Lettuce Entertain You Enterprises.
2000: Norman Brinker steps down as company chairman.
Name Age Since Current Position
Brooks, Douglas 58 2004 Chairman of the Board, President, Chief Executive Officer
Roberts, Wyman 51 2009 President - Chili's Grill & Bar
Stutz, Carin 55 2010 President - Global Business Development
Thomson, Roger 61 1996 Executive Vice President, Chief Administrative Officer, General Counsel, Secretary
Davisson, Valerie 48 2007 Executive Vice President, Chief PeopleWorks Officer
Reale, John 56 2009 Senior Vice President, President - Global Business Development
Provost, Steve 51 2009 Senior Vice President; President of Maggiano's Little Italy
Baines, Ian 2010 Senior Vice President - Strategic Innovation
Smith, Cece 65 2010 Lead Director
Girouard, Marvin 71 2010 Director
Mrkonic, George 58 2003 Director
Nye, Erle 73 2002 Director
Parra, Rosendo 51 2004 Director
Mims, John 51 2007 Director
Edelman, Harriet 54 2008 Director
DePinto, Joseph 48 2010 Director
Deno, David 53 2011 Director
Dixon, Michael 45 2011 Director
Luther, Jon 67 2011 Director
6820 LBJ Freeway
Dallas, Texas 75240-6515
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