SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 23, 2000
Darden Restaurants, Inc.
(Exact name of registrant as specified in its charter)
Florida 1-13666 59-3305930
(State or other juris- (Commission file number) (IRS employer
diction of incorporation) identification No.)
5900 Lake Ellenor Drive, Orlando, Florida 32809
(Address of principal executive offices)
Registrant's telephone number, including area code:
(407) 245-4000
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On March 23, 2000, the Registrant issued a news release
entitled "Darden Reports 33% Increase In Third Quarter
Earnings Per Diluted Share On Strong Same-Restaurant Sales
Increases."
On March 23, 2000, the Registrant issued a news release
entitled "Rita P. Wilson Elected To Darden Restaurants Board
of Directors."
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description
99.1 Press Release dated March 23, 2000,
entitled "Darden Reports 33% Increase In
Third Quarter Earnings Per Diluted Share
On Strong Same-Restaurant Sales
Increases."
99.2 Press Release dated March 23, 2000,
entitled "Rita P. Wilson Elected To
Darden Restaurants Board of Directors."
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: March 29, 2000 DARDEN RESTAURANTS, INC.
By: /s/ Paula J. Shives
-----------------------------------
Paula J. Shives
Senior Vice President,
General Counsel and Secretary
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INDEX TO EXHIBITS
Exhibit Number Page
99.1 Press Release dated March 23, 2000, entitled
"Darden Reports 33% Increase In Third Quarter
Earnings Per Diluted Share On Strong Same-
Restaurant Sales Increases." 5
99.2 Press Release dated March 23, 2000, entitled
"Rita P. Wilson Elected To Darden Restaurants
Board of Directors." 9
4
EXHIBIT 99.1
Press Release dated March 23, 2000, of Darden Restaurants, Inc.
DARDEN REPORTS 33% INCREASE IN THIRD QUARTER EARNINGS PER
DILUTED SHARE ON STRONG SAME-RESTAURANT SALES INCREASES
ORLANDO, FL - Darden Restaurants, Inc. today reported that strong
same-restaurant sales growth at Olive Garden and Red Lobster led to a 33%
increase in third quarter earnings per diluted share to 36 cents for the quarter
ended February 27, 2000. Earnings after tax for the quarter rose over 22% to
$46.9 million. The world's largest casual-dining restaurant company said that
third quarter sales increased approximately 6% to $917.5 million.
"We are extremely delighted with the impressive results Olive Garden and Red
Lobster continue to deliver," said Joe R. Lee, Chairman and Chief Executive
Officer. "These two core businesses are strong and getting stronger, and they
provide Darden with a tremendous advantage to capture the exceptional growth
opportunity in the casual dining industry. We are also excited about the
performance of our emerging business, Bahama Breeze and our new Smokey Bones
test. Everyone on our team is focused on operating excellence and building
compelling brands as we seek to deliver a superior dining experience to our
guests, and outstanding financial performance for our shareholders."
Highlights for the quarter ended February 27, 2000, included:
o Earnings after tax in the third quarter were $46.9 million, or 36 cents per
diluted share, on sales of $917.5 million. Last year, earnings after tax
were $38.4 million, or 27 cents per diluted share, on sales of $866.9
million.
o Olive Garden's impressive record of growth continued with an 8.3%
same-restaurant sales increase, representing the 22nd consecutive quarter
of same-restaurant sales increases. As a result of healthy sales and
traffic growth, Olive Garden posted a double-digit increase in operating
profit to establish a new record for any quarter in its 18 year history.
o Red Lobster recorded strong sales growth, reporting a 5.0% increase in
same-restaurant sales. This represents Red Lobster's 9th consecutive
quarter of same-restaurant sales increases, and contributed to its strong
double-digit increase in operating profit.
o With the opening of two new restaurants during the quarter, Bahama Breeze
is being well received by guests in eight markets. The two new restaurants,
located in Atlanta (Kennesaw) GA, and Austin, TX, bring the total number in
operation to ten. Three additional restaurants are under construction and
are expected to open by late spring.
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o Smokey Bones, Darden's new Sports Bar and BBQ test restaurant, is
surpassing management's initial expectations. The company announced that
two more restaurants are under construction.
o The Company purchased 3.9 million shares of its common stock in the third
quarter.
Operating Highlights
OLIVE GARDEN'S third quarter sales of $395.7 million were 7.7% above the prior
year, and same-restaurant sales increased 8.3%. The comparable sales performance
is particularly strong coming on top of a 7.5% same-restaurant sales increase in
the third quarter last year. Olive Garden's sales improvement continued to be
driven primarily by guest count growth. This performance, combined with
restaurant labor efficiencies, generated a double-digit operating profit
increase.
"Our team is dedicated to delighting every guest with a genuine Italian dining
experience," said Brad Blum, President of Olive Garden. "We are pleased with
another quarter of excellent performance. Our teams are convinced that by
remaining focused on providing exceptional Italian foods and wines with great
hospitality in a warm, inviting environment - the best is yet to come."
RED LOBSTER'S third quarter sales of $508.5 million were 3.1% higher than prior
year. Same-restaurant sales increased 5.0%. Operating profit for the quarter
increased at a strong double-digit rate as a result of strong same-restaurant
sales and traffic growth and favorable food and beverage costs and restaurant
expenses. These results were achieved with 17 fewer restaurants in operation at
the end of the quarter compared to last year.
"We are excited with our third quarter performance and our continued
same-restaurant sales momentum," said Dick Rivera, President of Red Lobster. "We
will focus even more intently on operational excellence and marketing that
matters as we strive to be the best in casual dining. Our restaurant crews are
providing guests with great food and service in an energetic, upbeat
environment, and our marketing teams are communicating with guests in an
increasingly more effective manner."
BAHAMA BREEZE sales continue to exceed management's expectations. Consumer
excitement in what has now grown to eight markets, offers good evidence the
company is successfully building a brand that has broad appeal . Two restaurants
in Atlanta (Kennesaw), GA and Austin, TX, were opened during the quarter,
bringing the total number of units in operation to ten. Three more restaurants,
located in Miami, FL, Ft. Myers, FL, and Phoenix, AZ, are currently expected to
open in the fourth quarter of fiscal year 2000.
SMOKEY BONES, Darden's latest test concept, continues to produce sales above
company projections at its first location in Orlando. Management says it is
pleased with the progress of this Sports Bar and BBQ prototype and has announced
that construction is underway on two more restaurants located in Orlando, FL,
and Columbus, OH.
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Other Actions
Darden continued its buyback of common stock in the open market, purchasing 3.9
million shares in the third quarter. Cumulatively, since initial authorization
of its repurchase program in December 1995, the Company has repurchased 40.7
million shares from a total authorization of 44.6 million shares and reduced
shares outstanding by over 20%. To help reduce the cost of share repurchase,
Darden has engaged in the sale of equity puts, generating over $5.7 million in
cash from premiums since inception of the put selling program in September 1997.
At its meeting today the Board of Directors approved an additional share
repurchase authorization totaling 20 million shares, or approximately 16% of
shares outstanding at the end of the third quarter. It also approved the sale of
an additional 1.5 million equity puts bringing total authorization to 7 million,
and approved use of equity forward contracts to purchase up to 7 million shares.
The Board of Directors declared the regular 4 cents per share semi-annual
dividend, payable May 1, 2000 to shareholders of record April 10, 2000.
The Board of Directors elected Rita P. Wilson, a director. Ms. Wilson is
President of Allstate Indemnity Company, a subsidiary of Allstate Insurance.
Allstate Indemnity Company is the nation's largest provider of non-standard
automobile insurance accounting for $3 billion in annual revenue and over 3
million policyholders. "I am pleased to welcome Ms. Wilson to our board," said
Lee. "Her leadership skills, financial services knowledge and extensive
experience operating geographically dispersed enterprises will serve us well."
Darden Restaurants Inc., headquartered in Orlando, FL, owns and operates Red
Lobster, Olive Garden, Bahama Breeze and Smokey Bones restaurants with annual
sales of $3.5 billion.
Forward-looking statements in this news release, if any, are made under the Safe
Harbor provisions of the Private Securities Litigation Reform Act of 1995.
Certain important factors could cause results to differ materially from those
anticipated by the forward-looking statements, including the impact of changing
economic or business conditions, the impact of competition, the availability of
favorable credit and trade terms, the impact of changes in the cost or
availability of food and real estate, government regulation, construction costs,
weather conditions and other factors discussed from time to time in reports
filed by the company with the Securities and Exchange Commission.
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DARDEN RESTAURANTS, INC.
NUMBER OF RESTAURANTS
2/28/99 2/27/00
634 Red Lobster USA 619
34 Red Lobster Canada 32
----- -----
668 Total Red Lobster 651
459 Olive Garden USA 459
5 Olive Garden Canada 5
----- -----
464 Total Olive Garden 464
4 Bahama Breeze 10
0 Smokey Bones 1
----- -----
1,136 Total Restaurants 1,126
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EXHIBIT 99.2
Press Release dated March 23, 2000, of Darden Restaurants, Inc.
RITA P. WILSON ELECTED TO
DARDEN RESTAURANTS BOARD OF DIRECTORS
ORLANDO, FL - Darden Restaurants Inc. has elected Rita P. Wilson, President of
Allstate Indemnity Company, to its Board of Directors. She is the eighth outside
director for Darden, which owns and operates the Red Lobster, Olive Garden,
Bahama Breeze and Smokey Bones restaurant brands.
"We're extremely pleased to welcome Rita to our board," said Joe R.
Lee, Darden's chairman and chief executive officer. "Her proven leadership,
extensive knowledge of the financial services industry and experience with
operating a multi-unit, geographically dispersed operation will serve us well as
we continue to build Darden into the best casual dining restaurant company, now
and for generations."
As president of Allstate Indemnity, Wilson leads the nation's largest
provider of non-standard automobile insurance, with more than three million
policyholders and $3 billion in annual revenue. She also heads Allstate County
Mutual, Allstate Texas Lloyds and Allstate Enterprises. All of these companies
are subsidiaries of Allstate Insurance, the leading publicly-held personal lines
insurer in the United States, with more than 20 million customers and nearly
55,000 employees.
"I'm very excited and proud to be joining the Darden board," said
Wilson. "This is a progressive, growing company with a strong customer focus,
high integrity and a history of giving back to the communities where they do
business."
Wilson has had a distinguished career in the financial services
industry. She joined Allstate in 1974 as an operations supervisor trainee and
held a variety of management positions over the next nine years, including
serving as an Assistant Regional Manager. In 1983 the company appointed her
Regional Vice President, responsible for a four-state region in the Midwest,
then promoted her to Regional Vice President of its South Texas and, later, its
Illinois operations.
Wilson was named Allstate's Vice President of Corporate Human Resource
Administration in 1987, then assumed the position of Territorial Vice President,
with responsibility for a third of the company's U.S. operations, a year later.
In 1990 she became Senior Vice President of Corporate Relations and joined
Allstate's board and Senior Management Team. After one-and-a-half-years in a
similar role for Ameritech, from November 1994 to April 1996, Wilson returned to
the same position at Allstate before being promoted to her current position in
January 1999.
Wilson received a bachelor's degree in Education from St. Paul's
College in Lawrenceville, VA, and did graduate work at Temple University. Before
joining Allstate she was a teacher in Japan and a social worker in Philadelphia.
During her career, Wilson has received numerous civic and professional
awards, including the King Legacy Award for demonstrating strong values, morals
and a commitment to developing youth, and the Women in International Industry
National YWCA Award. She has also been named to Ebony Magazine's Best and
Brightest in Corporate America and Top 50 Black Executives lists.
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Wilson joins Darden's other outside directors: Dan Burke, President
Emeritus/Director, Capital Cities/ABC, Inc.; Odie Donald, CEO, Cable and
Wireless Ltd.; Julius Erving, Vice President RDV Sports and Executive Vice
President, Orlando Magic; Michael Rose, Chairman, Midaro Investments, Inc.; Dr.
Hector de J. Ruiz, Ph.D., President & COO, Advanced Micro Devices; Maria Sastre,
Vice President, Total Guest Satisfaction Services, Royal Caribbean
International; and Jack Smith, former President and CEO, The Sports Authority.
Darden Restaurants, with headquarters in Orlando, Florida, is the
world's largest casual dining company, with 1,129 restaurants operating under
the Red Lobster, Olive Garden, Bahama Breeze and Smokey Bones brands, over
116,000 employees and annual sales of over $3.4 billion.
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