As filed with the Securities and Exchange
Commission on March 17, 2004.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 17, 2004
Darden Restaurants, Inc.
(Exact name of registrant as specified in its charter)
Florida 1-13666 59-3305930
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification No.)
5900 Lake Ellenor Drive, Orlando, Florida 32809
(Address of principal executive offices)
Registrant's telephone number,including area code:
(407) 245-4000
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
------------
On March 17, 2004, the Company issued a news release entitled
"Darden Restaurants Reports Record Third Quarter Earnings Per
Diluted Share Of 46 Cents," a copy of which is being filed
herewith as Exhibit 99.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
Exhibit Number
(by reference to
Item 601 of
Regulation S-K) Description
99 Press Release dated March 17, 2004,
entitled "Darden Restaurants Reports
Record Third Quarter Earnings per
Diluted Share of 46 Cents."
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: March 17, 2004 DARDEN RESTAURANTS, INC.
By:/s/ Linda J. Dimopoulos
-------------------------------------
Linda J. Dimopoulos
Senior Vice President and
Chief Financial Officer
3
INDEX TO EXHIBITS
Exhibit Number Description of Exhibit
99 Press Release dated March 17, 2004, entitled "Darden
Restaurants Reports Record Third Quarter Earnings
Per Diluted Share Of 46 Cents."
4
EXHIBIT 99
DARDEN RESTAURANTS
Red Lobster(R)Olive Garden(R)Bahama Breeze(R)Smokey Bones(R)
www.darden.com
NEWS/INFORMATION
Corporate Relations
P.O. Box 593330
Orlando, FL 32859
Contacts:
(Analysts) Matthew Stroud (407) 245-6458
(Media) Mike Bernstein (407) 245-4567
FOR RELEASE
March 17, 2004
4:30 PM ET
DARDEN RESTAURANTS REPORTS RECORD THIRD QUARTER
EARNINGS PER DILUTED SHARE OF 46 CENTS
ORLANDO, FL, March 17 - Darden Restaurants, Inc. today reported quarterly sales
of $1.24 billion for the third quarter ended February 22, 2004, and earnings per
diluted share of 46 cents, a 31% increase versus last year.
"This was a strong quarter for Darden Restaurants," said Joe Lee, Darden's
Chairman and Chief Executive Officer. "We delivered record third quarter
earnings per diluted share, driven by exceptional performance at Olive Garden
and improved performance at Red Lobster. We are more committed than ever to
improving the dining experiences we offer while maintaining a dedicated focus on
profitability. Our excellent earnings this quarter reflect that commitment. I am
pleased with our direction as we continue to build a casual dining company that
will last for generations."
Highlights for the quarter ended February 22, 2004, include the following:
o Earnings after tax in the third quarter were $77.9 million, or 46 cents per
diluted share, on sales of $1.24 billion. Last year, earnings after tax
were $61.8 million, or 35 cents per diluted share, on sales of $1.18
billion.
o Total sales of $1.24 billion represent a 5.1% increase over prior year.
o Olive Garden reported its 38th consecutive quarter of same-restaurant sales
growth with a 5.4% increase.
o Red Lobster's same-restaurant sales declined 5.1% but its same-restaurant
traffic declines moderated from the decline experienced in the second
quarter.
o Third quarter same-restaurant sales results at both Olive Garden and Red
Lobster benefited by approximately 1% from favorable weather comparisons to
last year.
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o The Company reported a third quarter tax rate of 31.1%, compared to 33.8%
last year. The decrease in the tax rate was a result of a favorable
resolution of prior year tax matters. The earnings benefit derived from the
lower tax rate was offset primarily by an increase in the amount of
discretionary charitable contributions to the Darden Restaurants Foundation
and the costs associated with Red Lobster's advertising agency change.
o The Company continued its share repurchase program, buying back 4.1 million
shares of its common stock in the third quarter.
Operating Highlights
OLIVE GARDEN'S third quarter sales of $551.3 million were 9.1% above prior year,
driven by a same-restaurant sales increase of 5.4% and revenue from 18 net new
restaurants in operation versus last year. This is the 38th consecutive quarter
of comparable-restaurant sales growth for Olive Garden. The company's increased
sales and traffic, combined with lower food and beverage expense, restaurant
expenses, and selling, general, and administrative costs as a percentage of
sales, resulted in a record operating profit that also represents a strong
double-digit increase over last year.
"It was another outstanding quarter for Olive Garden," said Drew Madsen,
President of Olive Garden. "We delivered record financial performance in sales,
operating profit and return on sales. Compelling promotional features, combined
with our commitment to delight guests with a genuine Italian dining experience,
resulted in this record-setting achievement. I want to thank our team at Olive
Garden for their efforts to make all our guests feel like family when they visit
our restaurants."
RED LOBSTER'S third quarter sales of $603.6 million were 2.8% below prior year,
resulting from a same-restaurant sales decrease of 5.1% that was partially
offset by revenue from eight net new restaurants in operation versus last year.
Despite lower sales and traffic versus last year, Red Lobster experienced
decreased food and beverage costs, restaurant labor expenses, and selling,
general, and administrative costs as a percentage of sales, which were partially
offset by higher depreciation expenses as a percentage of sales. These factors
led to a strong double-digit increase in operating profit versus last year.
"This was a challenging quarter for Red Lobster," said Joe Lee. "While our
performance during the quarter started off slowly, momentum continued to build
throughout, culminating with the launch of this year's `LobsterFest' in
February. And, despite sales that were down for the quarter versus prior year,
operating profit increased dramatically primarily because of our focus on
sustainable cost management to strengthen our business. We have more work ahead
of us, but we know we are making progress on improving our operations, marketing
and menu. I want to thank the crew for their dedication to making Red Lobster
America's favorite place for seafood. "
BAHAMA BREEZE has opened three restaurants year-to-date, bringing the total
number of restaurants in operation to 37. One more opening is scheduled for this
fiscal year in Pittsburgh, Pennsylvania.
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SMOKEY BONES opened six new restaurants during the third quarter, bringing the
year-to-date total to 20 net new openings. In addition, the company has opened
five more restaurants since the end of the quarter. As a result, Smokey Bones
now has 64 restaurants in operation. During this fiscal year, 30 restaurants are
expected to open.
Other Actions
Darden continued the buyback of its common stock, purchasing 4.1 million shares
in the third quarter. Since December 1995, the Company has repurchased a total
of 104.8 million shares under authorizations totaling 115.4 million shares.
Darden Restaurants, Inc., headquartered in Orlando, FL, owns and operates over
1,300 Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones and Seasons 52
restaurants with annual sales of $4.7 billion.
Forward-looking statements in this news release, if any, are made under the Safe
Harbor provisions of the Private Securities Litigation Reform Act of 1995.
Certain important factors could cause results to differ materially from those
anticipated by the forward-looking statements, including the impact of changing
economic or business conditions, the impact of competition, the availability of
favorable credit and trade terms, the impact of changes in the cost or
availability of food and real estate, government regulation, construction costs,
weather conditions and other factors discussed from time to time in reports
filed by the Company with the Securities and Exchange Commission.
DARDEN RESTAURANTS, INC.
NUMBER OF RESTAURANTS
2/22/04 2/23/03
------- -------
649 Red Lobster USA 641
31 Red Lobster Canada 31
------ ------------------ ------
680 Total Red Lobster 672
528 Olive Garden USA 510
6 Olive Garden Canada 6
------ ------------------- -------
534 Total Olive Garden 516
37 Bahama Breeze 32
59 Smokey Bones BBQ 34
1 Seasons 52 0
------- -------
1,311 Total Restaurants 1,254
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DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
13 Weeks Ended 39 Weeks Ended
02/22/2004 2/23/2003 2/22/2004 2/23/2003
---------- --------- --------- ---------
Sales $1,241,952 $1,181,383 $3,644,184 $3,427,479
Costs and expenses:
Cost of sales:
Food and beverage 372,544 364,328 1,115,457 1,060,518
Restaurant labor 391,019 375,320 1,158,968 1,098,456
Restaurant expenses 188,709 181,464 570,541 521,695
Total cost of sales(1) 952,272 921,112 2,844,966 2,680,669
Selling, general and administrative 113,552 108,145 347,513 317,406
Depreciation and amortization 52,179 48,132 155,780 139,203
Interest, net 10,944 10,669 32,310 31,651
Total costs and expenses 1,128,947 1,088,058 3,380,569 3,168,929
Earnings before income taxes 113,005 93,325 263,615 258,550
Income taxes -35,106 -31,539 -85,869 -87,400
Net earnings $77,899 $61,786 $177,746 $171,150
Net earnings per share:
Basic $0.47 $0.36 $1.08 $1.00
Diluted $0.46 $0.35 $1.04 $0.96
Average number of common shares outstanding:
Basic 164,200 170,700 164,600 171,100
Diluted 170,100 177,500 170,600 178,700
(1) Excludes restaurant depreciation and
amortization as follows: $48,690 $44,911 $145,215 $128,884
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DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
2/22/2004 05/25/2003
ASSETS
Current Assets:
Cash and cash equivalents $43,870 $48,630
Receivables 35,176 29,023
Inventories 262,761 173,644
Assets held for disposal 710 --
Prepaid expenses and other current assets 21,950 25,126
Deferred income taxes 58,162 49,206
Total current assets $422,629 $325,629
Land, buildings and equipment 2,264,048 2,157,132
Other assets 185,660 181,872
Total assets $2,872,337 $2,664,633
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $188,132 $175,991
Short-term debt 14,600 --
Accrued payroll 93,003 85,975
Accrued income taxes 66,948 67,975
Other accrued taxes 36,237 35,069
Unearned revenues 91,679 72,698
Other current liabilities 250,197 202,201
Total current liabilities $740,796 $639,909
Long-term debt 654,309 $658,086
Deferred income taxes 169,998 150,537
Other liabilities 21,570 19,910
Total liabilities $1,586,673 $1,468,442
Stockholders' equity:
Common stock and surplus $1,572,219 $1,525,957
Retained earnings 1,150,614 979,443
Treasury stock -1,381,631 -1,254,293
Accumulated other comprehensive income -10,181 -10,489
Unearned compensation -44,173 -42,848
Officer notes receivable -1,184 -1,579
Total stockholders' equity $1,285,664 $1,196,191
Total liabilities and stockholders' equity $2,872,337 $2,664,633
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DARDEN RESTAURANTS, INC.
THIRD QUARTER FY 2004 FINANCIAL HIGHLIGHTS
(In millions, except per share data)
(Unaudited)
13 Weeks Ended 39 Weeks Ended
2/22/2004 2/23/2003 2/22/2004 2/23/2003
--------- --------- --------- ---------
Sales $1,242.0 $1,181.4 $3,644.2 $3,427.5
Net Earnings $77.9 $61.8 $177.7 $171.2
Net Earnings per Share:
Basic $0.47 $0.36 $1.08 $1.00
Diluted $0.46 $0.35 $1.04 $0.96
Average Number of Common Shares Outstanding:
Basic 164.2 170.7 164.6 171.1
Diluted 170.1 177.5 170.6 178.7
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