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Outback's restaurant concepts thriving
By SCOTT BARANCIK, Times Staff Writer
TAMPA -- Bonefish Grill, a restaurant concept born in the Tampa Bay area, is traveling well. The seafood chain's new restaurants in northern Virginia, Charlotte, N.C., and Louisville are performing better than expected, Outback Steakhouse officials said Wednesday evening during a conference call with Wall Street analysts. Outback expects to expand Bonefish Grill to as many as 28 locations by the end of 2003, making it the Tampa company's third-largest brand behind Outback Steakhouse and Carrabba's Italian Grill. Outback will open about 100 restaurants of all its brands next year. "Five years ago, we probably never would've tried fresh fish around the country," chief financial officer Bob Merritt said in an interview, citing procurement and distribution problems. Outback officials also praised the initial performance of its first Cheeseburger in Paradise restaurant, a concept themed on Key West singer Jimmy Buffett. The Indianapolis location opened a couple months ago and is on pace to take in sales of $4-million a year. Outback officials also said they will issue quarterly dividends for the first time, beginning with a 12-cent payment per share on Dec. 6. Based on the 78.6-million shares of company stock outstanding Sept. 30, the annual payout to shareholders would total $37.7-million. Merritt said Outback can't grow fast enough to use all its excess cash, so it was "incumbent upon" the company to return some of it to shareholders through share repurchases and dividends. Outback repurchased 1.5-million shares of its stock during the third quarter ended Sept. 30. Some institutional investors and conservative individual investors won't invest in a stock unless it offers dividends. But some companies consider dividends a less efficient way of returning earnings to shareholders than share repurchases because dividends are taxed both at the corporate and individual levels. Outback's sales rose 10.4 percent to $584-million during the third quarter over the same quarter a year earlier. Net income rose 40.9 percent to $35.8-million, and earnings per share reached 47 cents, up 14 cents. Though same-store sales were essentially flat over last year, profit margins grew 2.5 percentage points, largely due to cheaper prices for beef and other commodities. Outback issued its third-quarter results after the stock markets closed Wednesday. Its stock closed at $30.60 per share, up 75 cents, or nearly 3 percent. Outback said it has appointed Tom James, chairman of St. Petersburg brokerage firm Raymond James Financial Inc., to its board of directors. CFO Merritt said Outback's ability to do business with Raymond James in the future will depend in part on the new director's committee assignments, which have not yet been made. Raymond James helped underwrite Outback's stock offerings in 1991 and 1992. -- Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.
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From the Times Business report
From the AP
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