Brinker International Inc. Reports Operating Results (10-Q)
Brinker International Inc. has a market cap of $2.22 billion; its shares were traded at around $27.56 with a P/E ratio of 16.02 and P/S ratio of 0.8. The dividend yield of Brinker International Inc. stocks is 2.32%. Brinker International Inc. had an annual average earning growth of 1.9% over the past 10 years.
Highlight of Business Operations:Royalty and franchise revenues increased 2.5% to $16.2 million in the second quarter of fiscal 2012 compared to $15.8 million in the prior year. For the year-to-date period, royalty and franchise revenues increased 4.2% to $32.4 million compared to $31.1 million in fiscal 2011. The increase is primarily due to an increase in royalty revenues due to the net addition of 22 international franchised restaurants since December 29, 2010. Royalty revenues are recognized based on the sales generated by our franchisees and reported to us. Our franchisees generated approximately $389 million in sales for the second quarter of fiscal 2012, an increase of 4.5% over prior year. For the year-to-date period, our franchisees generated approximately $778 million in sales, an increase of 4.7% over prior year.
Cost of sales, as a percent of revenues, increased to 27.1% for the second quarter and 27.2% for the year-to-date periods of fiscal 2012 from 26.7% for the respective prior year periods. Cost of sales was negatively impacted in the current year by an increase in commodity pricing on oils, beef, produce and dairy.
The effective income tax rate increased to 29.0% and 29.3% for the second quarter and year-to-date periods of fiscal 2012 compared to 17.5% and 18.6% for the second quarter and year-to-date periods of the prior year. The increase was primarily due to the resolution of certain state tax positions resulting in a positive impact in the prior year as well as increased earnings in the current year.
Working capital changed to a deficit of $169.4 million at December 28, 2011 from a deficit of $184.2 million at June 29, 2011 primarily due to an increase in accounts receivable due to third party gift card sales during the holiday season and timing of operational payments, partially offset by treasury stock repurchases and the seasonal increase in the gift card liability in the first six months of fiscal 2012.
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