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Sales Down at Outback, Fleming's

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By MICHAEL SASSO | The Tampa Tribune

Published: February 18, 2009

TAMPA - Outback Steakhouse's parent company continues to get pummeled by the recession, with sales at Outback restaurants down 9.5 percent in the fourth quarter of 2008, while sales at high-end Fleming's Prime Steakhouse and Wine Bar dropped a staggering 20 percent.

The company also announced it is trying to buy back some of its outstanding debt to lower its debt level. The extent of OSI's debt level is unclear, but as of September 30, the company had about $1.8 billion in long-term debt. It picked up most of that debt when it was bought out by two private equity firms in the summer of 2007.

Today, the Tampa-based restaurant chain gave bond investors and the U.S. Securities and Exchange Commission an early look at its performance during the fourth quarter of last year. Its revenues during that period fell to $928 million from $1.03 billion in the same quarter of 2007, a decline of 10 percent.

Among its various restaurant chains, Fleming's Prime Steakhouse and Wine Bar fared the worst. Once OSI's top-performing brand, sales at Fleming's restaurants open for at least 18 months – an industry measurement known as comparable store sales – fell 19.6 percent in the fourth quarter. Comparable store sales also fell by 14 percent at Bonefish Grill and 9.5 percent at Outback Steakhouse.

Faring the best in the chain is Carrabba's Italian Grill, down 7.4 percent in comparable store sales.

With sales falling and a deep recession, OSI may write down the value of its "goodwill" and other intangible assets by as much as $540 million, according to a document filed with the SEC today. "Goodwill" refers to the value of a company's brand name, position in the marketplace and other intangible assets that aren't accounted for in the company's book value.

OSI's brands also include Roy's, Cheeseburger in Paradise and Blue Coral Seafood & Spirits. Today's SEC filing did not include sales figures on them.

Reporter Michael Sasso can be reached at (813) 259-7865.

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