What changed in this filing

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Item 1A. Risk Factors

2020-07-31 compared with 2020-05-21 · 30 added, 27 removed, 34 unchanged (63% of the section changed)

2 unchanged sentences

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition or operating results.

The COVID-19 pandemic has disrupted and is expected to continue to disrupt our business, which has and could continue to materially affect our business, revenues, financial condition and results of operations for an extended period of time.

The COVID-19 pandemic has disrupted and is expected to continue to disrupt our business, and could continue to materially and adversely affect our business, revenues, financial condition and results of operations for an extended period of time.

COVID-19 was first detected in Wuhan, China in late 2019, and in March 2020, the World Health Organization declared COVID-19 a global pandemic.

Governmental authorities around the world have since implemented measures to reduce the spread of COVID-19, and COVID-19 and related preventative and protective measures have impacted, and are expected to continue to impact, our business globally, including through restaurant closures, reductions in operating hours and decreased restaurant traffic.

In the United States and in foreign countries in which we operate, individuals are encouraged to practice social distancing, restricted from gathering in groups and, in some areas, placed on complete restriction from non-essential movements outside of their homes.

Numerous jurisdictions have imposed, and others in the future may impose, shelter-in-place orders, quarantines, executive orders and similar governmental orders and restrictions for residents to control the spread of COVID-19.

In response to the COVID-19 pandemic and these changing conditions, we have modified work hours for our team members, identified and implemented cost savings measures throughout our operations, shifted the majority of our corporate employees to remote working and temporarily closed all of our dining rooms, a number of which remain closed as of the date of this Form 10-Q, and there is significant uncertainty as to when we will be able to reopen those dining rooms.

Although we continue to operate take-out and/or delivery services at substantially all of our locations and have experienced an increase in off-premises sales, there can be no assurance that our off-premises sales will grow or remain at recent levels.

In the United States and in foreign countries in which we operate, individuals are encouraged to practice social distancing, and numerous jurisdictions have imposed on a temporary or on-going basis, and others in the future may impose or reinstate, restrictions from gathering in groups, restriction from non-essential movements outside of ones’ home, shelter-in-place orders, quarantines, executive orders and similar governmental orders and restrictions for residents to control the spread of COVID-19.

While certain of these restrictions have been lifted or reduced in the past few months, the recent resurgence of cases has caused governments to slow or roll back their re-opening plans, and this trend may continue.

These preventative and protective measures, which vary significantly across the jurisdictions where our restaurants are located.

create a rapidly changing and complicated system for ensuring compliance and predicting our revenues and cost structure.

to carry-out and delivery only beginning in March 2020.

In early May 2020, we began to reopen our restaurant dining rooms with limited seating capacity in compliance with state and local regulations and, as of June 28, 2020, we had reopened substantially all of our restaurant dining rooms with limited seating capacity.

The temporary closure of our dining rooms and the limitations on seating capacity in our reopened dining rooms has resulted in significantly reduced traffic in our restaurants.

In the normal course of business, the majority of our sales are generated through on-premises dining in our restaurants, and the COVID-19 pandemic has affected and will continue to adversely affect our guest traffic, sales and operating costs.

We have reopened a significant portion of our restaurant dining rooms for on-premises dining, however there can be no assurances that on-premises sales will return to prior levels given continued uncertainties surrounding the economic and public health impact of the COVID-19 pandemic, or that any of the restaurants we have reopened, or any additional restaurants we may reopen in the future, will not be subject to additional closures.

When we are able to open additional dining rooms, governmental regulations may limit our capacity or the services we may provide.

We are unable to accurately predict with certainty the ultimate impact that COVID-19 will have on our operations going forward due to uncertainties including the currently unknowable duration of the COVID-19 pandemic and impact of further governmental regulations that might be imposed in response to the pandemic.

The longer our restaurants remain closed to the public for on-premises dining, however, the greater impact we expect it will have on our financial results.

The COVID-19 outbreak has also adversely affected our ability to open new restaurants and remodel and relocate existing restaurants.

Due to the uncertainty in the economy and to preserve liquidity, we have paused activities with respect to new locations, remodels and relocations, and limited capital spending to maintenance necessary to support

Even with substantially all of our restaurant dining rooms open for on-premises dining, however there can be no assurances that on-premises sales will return to prior levels given capacity restrictions, continued uncertainties surrounding the economic and public health impact of the COVID-19 pandemic, or that any of the restaurants we have reopened, or any additional restaurants we may reopen in the future, will not be subject to additional closures or limitations on our capacity or the services we may provide.

BLOOMIN’ BRANDS, INC.

our off-premises business.

These changes may materially adversely affect our ability to grow our business, particularly if these pauses are in place for a significant amount of time.

In order to increase our cash position and preserve financial flexibility, we recently drew down substantially all remaining availability under our revolving credit facility and issued $230.0 million of convertible senior notes.

governmental regulations that might be imposed or reinstated in response to the pandemic.

The longer our restaurants remain closed to the public or under restrictions for on-premises dining, however, the greater impact we expect it will have on our financial results.

In addition, if we revert to solely or primarily off-premises sales, there can be no assurance that our off-premises sales will grow or remain at levels experienced while our dining rooms were previously closed.

The COVID-19 outbreak has also adversely affected our ability to open new restaurants and remodel and relocate existing restaurants.

In addition, we have closed certain restaurants where conditions were unlikely to support profitable operations for the foreseeable future.

These changes may materially adversely affect our ability to grow our business, particularly if these pauses are in place for a significant amount of time or further closures are appropriate.

In order to increase our cash position and preserve financial flexibility, we have made significant draws under our revolving credit facility and issued $230.0 million of convertible senior notes.

Our resulting aggregate debt levels have significantly increased from levels prior to COVID-19.

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Our supply chain could similarly be adversely impacted.

If a significant percentage of our or our suppliers’ or distributors’ workforce is unable to work, or if there are similar disruptions in the supply chain generally for certain products, whether because of illness, quarantine, limitations on travel or other government restrictions in connection with COVID-19, we could face disruptions to restaurant operations, cost increases and shortages of food or other supplies, potentially materially adversely affecting our operations and sales.

If our customers become ill, a significant percentage of our or our suppliers’ or distributors’ workforce is unable to work, or if there are similar disruptions in the supply chain generally for certain products, whether because of illness, quarantine, limitations on travel or other government restrictions in connection with COVID-19, we could face disruptions to restaurant operations, cost increases and shortages of food or other supplies, or reputational harm or negative publicity directed at our brands that causes customers to avoid our restaurants, potentially materially adversely affecting our operations and sales.

This is particularly true given our reliance on a small number of suppliers and distributors for the beef we serve in our U.S.

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We also primarily use one supplier in the U.S.

and Brazil, respectively, to process beef raw materials to our specifications and we use one distribution company to provide distribution services in the U.S and Brazil, respectively.

and Brazil, respectively, to process beef raw materials

BLOOMIN’ BRANDS, INC.

to our specifications and we use one distribution company to provide distribution services in the U.S and Brazil, respectively.

Consequently, our operations could be adversely affected if any of these suppliers or distributors were unable to fulfill their responsibilities and we were unable to locate substitutes in a timely manner.

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We cannot predict the types of government regulations or legislation that may be passed relating to employee compensation or benefits as a result of the COVID-19 pandemic.

In order to support our off-premises business and ensure we are prepared to re-open our restaurants to on-premises dining when permitted, we have retained our restaurant management across all of our brands.

We have taken and continue to evaluate compensation and benefit

BLOOMIN’ BRANDS, INC.

actions to support our restaurant team members during the COVID-19 business interruption, including relief pay to hourly employees and continued payments to employees who have been quarantined or who had a personal illness related to COVID-19.

In order to support our off-premises business and ensure we would be prepared to re-open our restaurants to on-premises dining when permitted, we retained our restaurant management across all of our brands.

We have taken and continue to evaluate compensation and benefit actions to support our restaurant team members during the COVID-19 business interruption, including relief pay to hourly employees and continued payments to employees who have been quarantined or who had a personal illness related to COVID-19.

Those actions may be insufficient to compensate our team members for the entire duration of any business interruption resulting from COVID-19, and our team members might seek and find other employment during that interruption, which could adversely affect our ability to properly staff and reopen our restaurants with experienced team members when the business interruptions caused by COVID-19 abate or end.

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In some cases, we are contingently liable for franchisee lease obligations, and a failure by a franchisee to perform its obligations under such lease could result in direct payment obligations for us.

In addition, we could experience other material impacts as a result of COVID-19, including, but not limited to, impairment charges.

We cannot accurately predict the amount and timing of any impairment of assets.

In addition, we have and could continue to experience other material impacts as a result of COVID-19, including, but not limited to, impairment charges.

We cannot accurately predict the amount and timing of any further impairment of assets.

A significant amount of judgment is involved in determining if an indication of impairment exists and the COVID-19 pandemic has made developing forecasts for, and the accounting of, valuation of goodwill and certain other assets slower and more difficult.

Should the value of goodwill or other intangible or long-lived assets become impaired, there could be an adverse effect on our financial condition and consolidated results of operations.

Should the value of goodwill or other intangible or long-lived assets become further impaired, there could be an adverse effect on our financial condition and consolidated results of operations.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in “Risk Factors” under Item 1A and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” under Item 7 of our Annual Report on Form 10-K that we filed with the SEC on February 26, 2020, including without limitation risks relating to competition in the restaurant industry, consumer preferences and perceptions, our level of indebtedness, availability of adequate capital, our ability to execute business plans related to remodeling, relocation and expansions, our lease obligations, our franchisees, disruptions to our supply chain and third-party delivery service providers, foreign currency exchange rates, regulatory restrictions and compliance, government proceedings or litigation arising out of claims from our customers, employees, business partners and stockholders, vulnerability of our data systems and volatility in the price of our common stock.

Unregistered Sales of Equity Securities and Use of Proceeds

There were no sales of equity securities during the first quarter of 2020 that were not registered under the Securities Act of 1933.

We did not repurchase any shares of our outstanding common stock during the thirteen weeks ended March 29, 2020 .

BLOOMIN’ BRANDS, INC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors