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Brinker moves closer to Macaroni Grill sale as it reports drop in 1st-Q income

DALLAS Citing “significant progress” in finding a buyer for its Romano’s Macaroni Grill brand, Brinker International Inc. said it has moved beyond the exploration stage of a possible sale, to pursuing a divestiture within the next nine months.

 

The commitment to selling the Italian chain was disclosed in the casual-dining giant’s announcement Tuesday that net income for the first quarter ended Sept. 27 fell by 21.1 percent from the same period of fiscal 2007, to $37.6 million on charges from discontinued operations. Revenues for the most recent quarter rose 3 percent year over year, to $895.1 million, said the company, whose other brands include Chili’s Bar & Grill, On The Border Mexican Grill & Cantina and Maggiano’s Little Italy.

 

 

Brinker indicated that same-store sales for Chili’s and Maggiano’s were basically flat for the quarter, while comparable sales for On the Border fell year over year by 5.3 percent. For the first quarter of fiscal 2007, Chili’s same-store sales fell 2.3 percent, Maggiano’s slipped 1.5 percent and On the Border’s declined 2.2 percent.

 

 

The company attributed its gain in revenue to a 2.6-percent increase in restaurant capacity. The tally of restaurants operating under its brand names increased by 12 percent, to 1,827 stores, including 241 Macaroni Grills.

 

 

Brinker said revenue growth was curbed 7.3 percent by the sale of 97 restaurants to franchisees and restaurant closures. However, it added, revenues from franchisees rose 33 percent, to $14.1 million.

 

 

The unaudited results indicated that interest expenses for the quarter more than doubled, to $12.9 million.

 

 

Brinker said it repurchased 5 million shares of stock during the quarter, for a total outlay of $140 million.

 

 

The company noted that it has entered into two franchise agreements that call for the development of 57 restaurants.

 

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