Bloomin' Brands, Inc.

Greetings and welcome to the Bloomin' Brands Fiscal First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow management's prepared remarks. It is now my pleasure to introduce your host, Mark Graff, Group Vice President of Investor Relations. Thank you. Mr. Graff, you may begin.

Thank you and good morning, everyone. With me on today's call are David Dino, our Chief Executive Officer, and Chris Meyer, Executive Vice President and Chief Financial Officer. By now, you should have access to our fiscal first quarter 2020 earnings release. It can also be found on our website at bloomandbrands.com in the investor section. Throughout this conference call, we will be presenting results on an adjusted basis. An explanation of our use of non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures appear in our earnings release on our website as previously described. Before we begin formal remarks, I'd like to remind everyone that part of our discussion today will include forward-looking statements, including a discussion of recent performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. Some of these risks are mentioned in our earnings release. Others are discussed in our SEC filings, which are available at SEC.gov. During today's call, we'll provide a brief recap of our financial performance for the fiscal first quarter 2020 and a discussion regarding current trends. Once we've completed these remarks, we'll open up the call for questions. With that, I'd now like to turn the call over to David Dino.

Well, thank you, Mark, and welcome to everyone listening today. Our priorities remain unchanged as we continue to navigate these challenging times. We are focused on taking care of our people and serving food in a safe environment that protects both our team members and customers. We have leveraged our strong off-premises business since the pandemic required the closure of our dining rooms. As a result, we have tripled average off-premises sales per restaurant since the beginning of March. This is a testament to the strong affinity for our brands and the decision to invest significantly over a number of years into building a robust delivery network to complement our takeout business. These outstanding off-premises results have allowed us to keep substantially all of our locations open during this time. The goal going forward is to keep a large part of the share gains we have seen in carryout and delivery. We've also recently begun the process of reopening our dining rooms as state and local governments allow. For perspective, we had 23 Outback Steakhouse restaurants open for dine-in service with restricted capacity during the full week ended May 3, 2020. Comparable sales at these locations were down 17% from the prior year. We are encouraged by these results. As of this morning, we have 355 dining rooms open across all brands with limited seating capacity in 10 states. As these dining rooms reopen, we are adhering to strict safety measures. This includes additional sanitation and disinfecting practices, enhanced hand washing protocols, use of gloves, and facial protection for our employees. We are also providing contactless payment options for our customers. Each dining room seating configuration has been modified to adhere to social distancing and reduced capacity standards. For added convenience, we are leveraging our table management notification system to allow guests to wait in their cars for their table. These results would not be possible without the terrific work done by our 90,000 team members in the restaurants and the dedicated employees in the Restaurant Support Center. Their ability to pivot to a 100% off-premises business has been energizing to watch. Not one of our employees has been laid off or furloughed at either our restaurant or the Restaurant Support Center as a result of the crisis. Hourly workers impacted by the closure of our dining rooms have continued to receive pay as we work through the current environment. This decision has been an important part of what is driving results and we are seeing the following benefits. First, we've been able to retain a highly engaged and motivated and trained workforce. Second, as the dining rooms reopen, we have teams ready to go. Our hiring and training costs are minimal. And most importantly, It was the right thing to do. Turning to our financial performance, we are tightly managing our cash usage. We have stopped nonessential spending, significantly reduced marketing expenses, and deferred nearly all of our discretionary capital expenditures. These efforts have allowed us to minimize ongoing cash burns. Also, as previously mentioned, our decision not to terminate or furlough any employees will allow us to reopen dining rooms quickly. Earlier this week, we took steps to further strengthen our liquidity position through the pricing of $200 million of convertible notes, which is expected to close today. These funds, coupled with our reduced burn rate, provide additional flexibility to navigate economic uncertainty over the long term. Liquidity will also enable us to capitalize on opportunities in the weeks and months ahead. As it relates to our first quarter results, we are on track to deliver a strong quarter prior to the impact of the pandemic. The strategies to enhance total shareholder return that we outlined on our Q4 earnings call were working. Through February, all of our concepts were positive in sales and traffic. We achieved meaningful expansion of our adjusted operating margins during those eight weeks, and we've begun to see the benefits of our expected $40 million of cost savings that we outlined in February. Once we have successfully navigated the ongoing crisis and capitalized on our opportunities, We believe that we will be well positioned to build on our early 2020 success and emerge an even stronger company. And with that, I'll turn the call over to Chris.