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Outback revises earnings after discussion with SEC

The company strips $49.1-million in earnings, making good on a warning it issued in October.

Outback Steakhouse Inc. of Tampa, responding to comments from the Securities and Exchange Commission, issued restated earnings for the first two quarters of 2003 as well as the past five years.

The result of the filings late Wednesday: a total of $49.1-million pared from the restaurant chain's bottom line.

Outback warned investors in late October that it would be restating results after discussions with the SEC. The restatements involve a change in Outback's handling of its partnership agreements with the company's general managers and area operating partners, who share in the restaurants' cash flows.

Outback had previously accounted for the partnerships as ownership interests. In the restatements they appear as compensation arrangements.

Company officials could not be reached for comment on the restatements, which were not available until after the markets closed Wednesday.

In addition to the Outback Steakhouse chain, the company's chains include Carrabba's Italian Grill, Fleming's Prime Steakhouse and Wine Bar, Roy's, Lee Roy Selmon's and Bonefish Grill, for a systemwide total of more than 1,000 restaurants.

Outback's shares closed Wednesday at $44 a share, down 50 cents. On Dec. 2, the company's stock had hit an all-time high of $47.32 after reports of strong November sales.

In October, Outback said the accounting changes meant a reduction in 2002 net income to $150.1-million, or $1.89 per share, compared with previously reported $156.4-million, or $1.97 per share.

In filings Wednesday, net income for 2001 was reduced to $124.7-million, or $1.59 a share, compared with $133.4-million, or $1.70 a share, as previously stated.

For 2000, net income was reduced to $129.5-million, or $1.63 a share, compared with $141.1-million, or $1.78 a share.

Earnings for 1999 were cut to $111.8-million, or $1.41 a share, compared with $122.4-million, or $1.55 a share. In 1998, Outback's restated net income was $87.7-million, or $1.13 per share, down from $94.7-million, or $1.22 a share.

For the quarter ended March 31, 2003, Outback's net income was $42.6-million, or 54 cents a share, compared with $45.1-million, or 58 cents a share, as previously reported.

In the quarter ended June 30, restated earnings were $44.7-million, or 57 cents a share, compared with $47.1-million, or 60 cents a share.

- Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.