TBO.com - TBO is Tampa Bay Online

OSI Restaurants See Sales Plunge

ADVERTISEMENT

By MICHAEL SASSO

msasso@tampatrib.com

Published: February 19, 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 and those at high-end Fleming's Prime Steakhouse and Wine Bar dropping 20 percent.

On Wednesday, 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 2008. Its revenue during that period fell to $928 million from $1.03 billion in the same quarter of 2007, a decline of almost 10 percent.

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

Faring the best in the chain was 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 on Wednesday. "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 OSI's book value.

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

OSI also announced it wants to spend $73 million to buy back some of its outstanding bonds to lower its debt. The extent of OSI's debt level is unclear, but as of Sept. 30, the company had about $1.8 billion in long-term debt.

OSI may be able to buy those bonds at a huge discount. This week, OSI's bonds were trading at slightly more than 20 cents on the dollar.

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

Share this:

Loading Comments...

Email Print

ADVERTISEMENT