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Merritt's statement

By Times Staff Writer
Published April 22, 2005

Parting words from Outback Steakhouse chief financial officer Bob Merritt, from the company's quarterly conference call with industry analysts Thursday:

"I have a little brief statement I'd like to read. It's no big deal. But we want to let you guys know that effective at the end of May, I will be retiring from the company.

My reason for doing that is that for some time, I've been struggling with the increasingly negative regulatory environment in which we now operate. The recent lunacy over lease accounting, as an example, took me past the breaking point and has convinced me that the environment is not going to get any better any time soon.

I view the recent accounting fiasco as a complete failure of regulatory and other bodies which oversee financial accounting and reporting. And if the accounting firms can change their views on something like long-standing lease accounting, setting up 150 restatements and some multiple restatements of some companies because the accountants got it wrong the first time, and then conclude that the companies have material internal control weaknesses, what's next?

The reaction of regulators and media that all of these companies were run by crooks who were cooking the books is particularly disturbing. It is a strong reflection of the growing presumption that all business people are dishonest.

Now I have a lot more to say about that subject, but this is probably not the right time to do it, since this really isn't a paid political announcement.

In any event, over the last two years I've found myself spending more time and resources on regulatory matters than supporting the management of the company and improving the businesses we operate. Because I'm a business-development oriented person, and administration is not my strength, I believe there are other people out there who can do a much better job at managing in this environment than I, hence my decision.

To put to bed any speculation about other reasons for my retirement, I want to say now that I think the company is in extremely strong and capable hands with Bill (Allen) as CEO. So far, in my opinion, Bill has asked all the right questions and taken all the right steps to successfully guide this company for many years to come and to unlock its future earnings potential."

[Last modified April 22, 2005, 00:43:11]