Ladies and gentlemen, thank you for standing by. Welcome to the Bloomin' Brands First Quarter 2014 Results Conference Call on May 9. Throughout today's presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. (Operator Instructions) I will now turn over the call to Chris Meyer, Vice President of Investor Relations. Please go ahead.

Thanks, Rodney. Good morning, everyone, and thank you for joining us. With me on today's call are Liz Smith, our CEO; and Dave Deno, Executive Vice President and Chief Financial and Administrative Officer. By now, you should have access to our fiscal first quarter 2014 earnings release. It can also be found on our website at www.bloominbrands.com in the Investors section. Throughout this conference call, we will be presenting non-GAAP financial measures, including adjusted restaurant level operating margin, adjusted income from operations, adjusted net income and adjusted diluted earnings per share. This information is not calculated in accordance with U.S. GAAP and may be calculated differently than other companies' similar non-GAAP information. Quantitative reconciliations of our non-GAAP financial measures to their most directly comparable GAAP measures appear in our earnings release and on our website as previously described. Before we begin our formal remarks, I'd like to remind everyone that part of our discussion today will include forward-looking statements, including our discussion of growth strategies and financial guidance. Such forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ from our forward-looking statements. Some of these risks are mentioned in our earnings release. Others are discussed in our Form 10-K filed with the SEC on March 3, 2014, and subsequent filings which are available at www.sec.gov. During today's call, we'll provide a recap of our financial performance for the fiscal first quarter 2014, an overview of company highlights, and a discussion regarding progress on key strategic objectives. Once we've completed these remarks, we'll open up the call for questions. With that, I would now like to turn the call over to Liz Smith.

Thanks, Chris, and welcome to everyone listening today. We are pleased to share with you our results for the first quarter of 2014 as well as related company highlights. As noted in this morning’s earnings release, our adjusted first quarter diluted earnings per share was $0.46 and our reported first quarter core domestic comp sales were flat. We estimate that weather combined with holiday timing lowered Q1 comp sales by 170 basis points. If you exclude this impact, our core comps would have been approximately 1.7%. These results were in line with our expectations and overall our brand held up well in another challenging quarter for the casual dining industry. Despite the segment headwinds, the first quarter marked the 18th and 19th consecutive quarters that we meaningfully outpaced the industry and sales and traffic, respectively. We are encouraged by the fact that we continue to take share and remain confident in the health of the portfolio. And we are able to deliver earnings that kept us on track to meet our stated EPS goals for the year. Now, our review of Q1 by concept is as follows. At Outback, comp store sales were up 0.8%, representing a 270 basis point beat versus Knapp and traffic was minus 0.5% or 350 basis points better than Knapp. Outback continues to benefit from the implementation of key growth strategies, including further expansion of the lunch daypart, ongoing menu and marketing innovation efforts, and remodels. Outback has completed the interior remodel program and is now shifting efforts to a promising exterior remodel program. We currently have 15 of these locations in test and hope to report on our progress in the second half of the year. Look for more innovation and investment in Outback as we continue to grow and take share in casual…

Thank you, Liz, and good morning, everyone. I’ll kick off with a discussion around sales and profit performance for the quarter. As a reminder, when I speak to net income and EPS, I’ll be referring to adjusted numbers that excludes certain costs and benefits. Please see our earnings release for reconciliations between our adjusted non-GAAP metrics and their most directly comparable U.S. GAAP measures. We also provide a discussion of the nature of each adjustment. As an additional reminder, our conversion to a new 52, 53 week fiscal year resulted in the loss of one operating day in the first quarter. The loss of this day had the following impact on our Q1 results. Total revenues were reduced by approximately $7.5 million, net income was reduced by approximately $1.5 million, and diluted earnings per share was reduced by approximately $0.01. With that in mind, our first quarter financial highlights versus the prior year are as follows. Adjusted diluted earnings per share were $0.46 versus $0.50 in 2013, GAAP diluted earnings per share for the quarter decreased to $0.42 versus $0.50 last year. When considering our results versus a year ago, please note that we did have an unusually low tax rate in 2013. The change in tax rate year-over-year was worth approximately $0.06 of EPS. Applying our 2014 tax rate to 2013, our adjusted EPS would have been $0.46 in 2014 versus $0.44 in 2013 -- excuse me $0.46 in 2014 versus $0.44 in 2013. Adjusted net income decreased to $58.5 million versus $63.2 million for the first quarter a year ago. GAAP net income was $53.7 million versus $63.2 million in 2013. Comparable domestic restaurant sales at our core domestic concepts were flat while traffic decreased 1.6%. Without the impact of weather and holidays, our comp sales would have…

(Operator Instructions) The first question comes from Joe Buckley of Bank of America. Please go ahead.

Kind of a -- maybe an unusual question, but there seem to be a lot of mention of the Korean business in the release. So could you talk about what impact that softness is having on the overall results? And maybe discuss your confidence about it turning in the second half.

So I’ll talk about the macroeconomic conditions and then Dave will give some perspective on the impact and how it flows through. As we talked about, there has been a real contraction in consumer spending in Korea that has affected all consumer categories and so the casual dining industry has seen kind of that double-digit dip over the last six months slot. And because our portfolio there was dated and we needed to do the whole brand playbook and the refresh, we kind of have been impacted consistent with the industry impact over there. And so we are -- right now we have the right team in place, we have a very senior Outback leader from the U.S. who is now running now sales. We have a great team on the ground. We’re starting the entire renovation, so we like the design, we like the menu work and so that kind of refresh, remodel, relocation work is all underway and you’re going to see really good progress on that. But that’s going to start to build itself out in the second half of the year. In terms of where the impact goes, I’ll let Dave to add some perspective on that.

Yes, Joe, internationally, it’s really a tale of two different situations. Korea, you’ll see it in the sales but also it impacted our margins a bit and I talked about like in restaurant other expenses through some of the sales deleverage in some of our cost there. But importantly, we also had tremendous performance in Brazil this quarter. And Korea did offset some of that, but our expectations in Brazil were high and they continue to exceed those expectations. So it’s really a tale of two things, Joe, in our results and you will see kind of those two situations balance off each other in our overall consolidated results.

So, Dave, if you look at the EPS year-over-year performance, EPS impact year-over-year for international, how did it shake out and if you are comfortable telling us how it shook out for Korea and Brazil separately, that would be helpful.

Yes. Joe, we don’t disclose our results in that kind of segment, so I really can’t get into that kind of detail. But I think the easiest way to think about it is, Brazil had really tremendous performance, Korea had some softness, basically there was largely an offset, I think Brazil might have contributed a little bit to overall -- the two of them together, Brazil might have outweighed it a little bit, but that’s kind of how to think about it. Until we get into a more international segment reporting, Joe, I can’t get into more details.

The next question comes from John Glass of Morgan Stanley. Please go ahead.

Dave, first, thinking about your outlook hasn't changed for the year, but I think on the margin your restaurant level profits may be a little bit weaker than some had been forecast and so there were some puts and takes here that may on the margin seem a little weak in the first quarter. So can you talk about how you think the year progresses to get to the $1.21 given you're down about 8% in the first quarter?

Sure. First of all, our results were absolutely spot-on with our expectations. We met what we had internally and we’re very comfortable with how Q1 feels for the rest of the year and so that’s why our guidance was reaffirmed. I think, John, stepping back, if you look at some of the details, you will see the increased advertising costs and menu costs from the Carrabba’s menu rollout embedded in some of our costs, and that’s why restaurant operating costs were a little bit higher than last year. If you look at the labor line and if you look at commodities, those were extremely well-managed this quarter, especially labor and that’s the stuff that’s going to carry forward as we go throughout the year and that’s why we’re going to see the opportunities in the P&L that I talked about in my prepared remarks.

And then, just thinking about some of the Bonefish and Carrabba's underperformance, I know there was a piece of it had to do with weather. What do you think -- how does that progress throughout the rest of this year? It sounds like that Carrabba's was not -- didn't get the menu traction you thought it was going to get this quarter. Once the weather is clear, have you started to see some of that improvement or is that still lagging? And maybe as an overall statement, once we sort of gotten beyond weather have you seen a bounce back in your business that you would have hoped for?

And I’m going to take it in two parts. We talked about Carrabba’s and Bonefish, because it’s a different answer for each. On Carrabba’s, as I indicated in my prepared remarks, it was a tough time to launch a new menu in February in terms of the traffic, and when you look at Q1 on Carrabba’s and if you look at MTD CREST, as you know, they lagged by a month, but they report December, January and February. The impact of the weather really took a disproportionate hit up. Dinner was down 5% for the category and lunch was down 2% and a lot of that weather hit on the weekends, so the trial and the increased traffic that we expected to see was impacted dimensionally by the weather for Carrabba’s. So we were not pleased with the incremental traffic we saw. The message, though, of 15 under $15 is absolutely resonating and the right message and we are going to continue to hit that and to innovate against that. And so once you move past that, you did see a settling out of Carrabba’s and you know we don’t give monthly comps in front of this. But once you got past that, you did see a settling out of Carrabba’s. But the Italian category is competitive. This brand is very healthy, number three ranked. We got to continue to deliver value as we define it, which is great creativity at affordable prices and we think we have more runway to breakthrough now that we’re past Q1, but more work ahead on Carrabba’s, but again the levers such as occasional expansion, growing lunch, those all remain in front of us and we like what we are seeing on those separate levers. On Bonefish, Bonefish would have been positive and a positive contributor in the first quarter. It was impacted by weather and I think I indicated that to a large degree. We’ve always been very open with the timing of the news on Bonefish that’s going to come in the second half of the year. So the new menu will be launched in the Q3 period and you’ll see that innovation and that culinary creativity and all of that go. We’re rolling out Saturday lunch, that’s going in well. We continue to be pleased with how Sunday is going in. So we’re feeling we have the levers in place on that brand and the real innovation is coming on that in the second half. So that should give you hopefully a flavor.

The next question comes from Jason West of Deutsche Bank. Please go ahead.

One on the guidance, you guys confirmed the earnings and the comps, but didn't really touch on some of the components that we got the last quarter. Should we just assume all the other line items and guidance are still the same or has anything changed in terms of your thinking around EBITDA or maybe the tax rate?

I think we mentioned in the release, all other aspects, we highlighted the comps and the EPS. All other aspects of our guidance is in place. The only exception to that would be if there was a refinancing and a refinancing one-time cost associated with that, would flow through the GAAP basis of our P&L, but everything else, Jason, is spot on.

And then, just one on the balance sheet, as you guys are still paying down debt, can you remind us when you think you will hit a level on the balance sheet you would be willing to do something else with the free cash flow and what those options might be, whether it's a dividend you are thinking about or perhaps a stock buyback?

Our first priority is to get our balance sheet squared away and build a fortress balance sheet for our company as we run this business for the long term. That’s job one. I’d say the next 18 to 24 months we’ll see how conditions change, it is something that we are looking at to continue to pay down some debt. As far as the tools to return cash to shareholders, we haven’t decided that as a company, but based on my own history, it’s been both our share buyback and a dividend mix, but we’ll come to that point when we’re ready and I think if you look at the cash flow coming out of our company, it’s a pretty attractive thing coming down the line.

The next question comes from Michael Gallo of CL King. Please go ahead.

Couple of questions. Wanted to dig in a little bit on the commodity basket. Dave, obviously you mentioned you locked in on most of your beef needs. I was wondering if you think that will provide you some opportunity perhaps go after guest traffic more aggressively as some of your peers may need to take more pricing in the back half of the year? And then also where you stand on shrimp which looks like it is starting to roll over whether you are locked in there or whether it could potentially provide some favorability if it comes down later in the year. Thank you.

Sure. First of all, it’s been our long-term strategy to price below commodity inflation. And when you have a supply chain group like ours that consistently beats the rest of the industry and you look at the 2% to 4% guidance that we have with our lock-ups, it’s really a nice weapon to have in our company. There is -- we are locked up about 65% in shrimp and the reason why we’re not locked up more is because of what you mentioned is there probably is some opportunistic buys that we have going forward. But overall we are extremely pleased with where we stand on the commodity front.

And then just to follow up, I was wondering early what you are seeing in Bonefish lunch on Saturday. Whether there is any cannibalization of dinner and what we should think about in terms of the cadence of how you might roll that out, whether it will be in all stores by the end of the year or there will be a couple of years, how long you think that will take?

Sure. As always, we always do a lot of testing and so what I would tell you is that the cannibalization is coming in very much where we had expected, pretty consistent with the rollout that we saw on Carrabba’s and Outback that being a separate daypart. In terms of timing, because it’s going in so well, we’re going to be certainly completed with that timing. We’re looking at Q2, Q3 completion for Saturday lunch on Bonefish.

The next question comes from Jeff Farmer of Wells Fargo. Please go ahead.

Just coming back to Brazil, could you guys provide some color on the regional management supply chain, real estate, all the other pieces of the infrastructure that you already have on the ground? And then I guess more importantly, how should we think about the relationship between revenue growth coming out of Brazil versus G&A growth over the next several years? Do you have a pretty healthy opportunity there?

Yes. A few things. I’ll take care of the organization piece and I’ll turn it over to Liz on some of the branding stuff and opportunities there. First of all, one of the great things about the Brazil business is we have the people on the ground already. With a joint venture for many years, we have the development team there, we have the supply chain team there, the finance team there, it’s all there that not only can we use the leverage to grow the Outback business, but we can leverage the second brand as well. From a financial standpoint, we should be able to get some G&A leverage because sales are growing so rapidly down there. We certainly will invest in capability down there, but given the sales growth we’re seeing both from a comp store sales standpoint and new development, Liz talked about doubling the footprint over the next three to four years in Outback only, that’s the kind of leverage that we are looking at. So we are very, very happy with the team that we have down there and we also have a very talented team here in Tampa that works closely with our Brazil team and the team in Tampa has a deep international experience.

The only thing I would add to that is that the good news is we’ve obviously been doing a lot of work down in Brazil from a consumer standpoint on the other core concepts. And all three of the other core concepts have performed really well in that consumer research and so really lend themselves. For competitive reasons, I’m not going to talk about which one we’re going to go down there first with but the Brazilian team was up here this week and we are managing through, as Dave said, the combination of a talented centre of excellence that we have here that can help them and really first world-class boots on the ground. We will have an opportunity to leverage the infrastructure in both places to expand a second concept and someday a third concept, but you’re also going to have dedicated brand teams against those to make sure that you really drive optimal growth. So we’re going to double Outback and we’re not going to ask the exact same group of people to grow another huge brand off the side of their desk. There is going to be some G&A leverage from scale, but the good news is these brands have such growth runway that they will be managed fairly similarly to the kind of scale focused balance we have here in the U.S.

And one more question because again the conversation with investors is really all about trying to understand what the sort of the marginal EBITDA contribution from Brazil could be moving forward. Realize that is a tough question, it's early on, but, Dave, is there any type of high-level framework? Any help you can give us in thinking about how Brazil can ultimately impact this P&L over the next several years?

Yes. We did provide a K in January, gave some of the details on that. Like I mentioned to Joe Buck, we don’t breakout our international business, but let’s just maybe step back for a second, our goals the three to four years to double the footprint of that business. So you can begin to see some of the revenue and that’s Outback alone. Then we look at some of the other concepts that we can bring down there and leverage, that would also be very sizable. So I think we could see very rapid growth in that business both from a sales and a profitability perspective as we go forward. We have not provided any kind of five-year plan for the market on Brazil or anything, but if you just kind of think about what the opportunities to look at. Then the other piece I just want to mention about Brazil, which is important, is it gives us a strong geographic footprint in a very important market and if we can easily take some of that knowledge and move to the Andean Cluster or other parts of South America to grow that business. So it’s not just the Brazil story, it’s a market-wide story. We’re doing the same thing in China. We’ve got a really good but small Hong Kong business that we’re using to help grow the China business. So you got to think about these things not only country specific, but what it means for the region of the world that we’re in.

The next question comes from Jeffery Bernstein of Barclays. Please go ahead.

Two questions from a comp perspective. One, Liz, I think in your prepared remarks and the press release you talk about the challenging environment here in the States. Obviously we know about the weather and the holiday shifts which you detail, but have you seen anything change either for better or for worse in terms of how you define that challenging environment, whether you are seeing competitors getting more or less aggressive or the consumer perhaps getting more or less cautious? Wondering what you are seeing because obviously you are talking about something broader than the short-term detail on the weather and the holiday.

Sure, absolutely. So, fortunately, we’re all, knock wood, glad to no longer are we discussing weather as we move into kind of the spring and summer and I think look -- you have I think, Knapp April has been published so there continue to be some kind of challenging trends for the industry, but as I said, there is positive indications, but then there is also challenging indications. So there is no question that our consumer for CBR in that 55,000 to 65,000 continues to see pressure on their consumer disposable income. There haven’t been a meaningful change for this group. It’s been more of a high-end recovery to date and you see that reflected in the High-End indexes and Steakhouse numbers and all of that. That being said, a lot of the numbers that are coming out, a lot of the confidence things are showing kind of some decent momentum. So I think we’ve always said that the casual dining industry is going to be flat to plus or minus, and that we’re not going to rely on a rising tide to lift the boat, but within an $80 billion industry, there is tremendous share advantage for executing with excellence. And so our outlook on that really is we see nothing to change that perspective that we’ve had pretty consistently for the last couple of years.

You mentioned the weather, so just to clarify because I think you said 170 basis points essentially for the quarter. You appear to have talked about the first half, second half of the quarter. I am just wondering if it was 170 for the full quarter is it safe to assume that trends were - the disparity between the beginning and the end were 300 plus basis points that you are now sitting at a -- any color on the sequential trends through the quarter to know how we are thinking about entering the second quarter without giving specifics on that, obviously.

We don’t breakout our comps monthly, so we don’t get into that kind of forward or past looking. We gave our -- when we gave our guidance for our Q1 comps, we came squarely where with thought we would be and that was in February. So we kind of knew the dynamics of the weather. So things played out for us pretty similarly to I’m sure the cadence that weather impacted others as well, but we don’t get into monthlies.

The next question comes from Andy Barish of Jefferies. Please go ahead.

On the domestic development side, are there any overall changes with the pullback in Carrabba's? Or do the Bonefish new units continue to earn good returns and you are stepping up a little bit there to sort of make up for the Carrabba's pushback?

First of all, our guidance on the domestic development, on the development side overall and domestic development aren’t changed. So basically what we have in our company is we are really, Andy, strong stewards of capital. Bonefish returns or if they continue to open up their volumes higher than our U.S. average, the returns are good. It’s all about getting to A sites, it’s supply issue in getting to A sites. We’ve talked about the Outback relocation opportunity, what we can do there. So in our portfolio right now, Bonefish new units and Outback relocations are our top two priorities in the U.S. We still be opening up Carrabba’s restaurants, but at a slower rate and right now there is a competition in our company which is very healthy, between various brands and Bonefish, right now, provides best returns. So we’re very pleased with the returns we have in that company. We’re pleased with the opportunity in front of us on the Outback relocation side and we continue to do work on the Carrabba’s box as we go forward, but I can assure you that we are very close stewards of capital as we finish -- as we look at our overall portfolio.

And one quick follow-up on the potential debt refi, is that now in your at least 121 thought process? Is that something new or is that still not in your earnings guidance until something actually gets done?

As I laid out in my prepared remarks, it -- should we be fortunate enough to get it, we’re really excited about the second opportunity in Brazil and so we and some other international opportunities. So we will probably, Andy, spend back and invest in the business some of that interest cost savings as we go forward, that’s because of the opportunity we have in front of us in our business.

(Operator Instructions) The next question comes from John Ivankoe of JPMorgan. Please go ahead.

Good morning, it is Amod Gautam filling in. Dave, I appreciated the color on the productivity pipeline. How much flexibility is there in planning around those productivity initiatives? In other words, I think it might be more relevant for 2015 if commodity prices stay where they are. But is there an ability to pull maybe more levers sooner in response to things like commodity or healthcare pressures?

We basically -- an initiative this large, so in other words initiatives like rolling in a new labor model in the front of the house, rolling in a new labor model in the back of the house, our actual versus theoretical management, you’ve really got to plan it out, work close with operations and we have a very defined schedule across our company as we do that. So we want to go faster, sure, but it’s not something that you can really pull a lever on and say, make this faster, make that faster, because if you do it right the first time, you are going to end up getting a lot more savings and a lot better service to our customers than we would have -- if we accelerated it too quickly. There are some other things that we can do, that are still smaller in some of our supply -- in our supply chain and also managing some of our workers’ comp and things like that, that’s a little more turn on the switch and move faster, but the big initiatives I talked about in the productivity section, you really got to lay out across the company and train the people properly.

And you’ve talked a lot about putting technology on the operations side so it is kind of related to the last question. But I think it would be interesting to hear maybe what considerations there are on potential adoption of maybe consumer-facing technology especially with the increasing exposure in the lunch daypart where speed might be even more important.

Sure, that’s a great point. I think we talked last time we’ve spent a lot of time over the last year mapping out our long-term consumer digital roadmap, because there is numerous places in the decision cycles from gee, I want to go out for lunch or dinner to I want to pay really fast and get out of there where technology can interact with the customer to improve that experience. But you got to get it right, because there is a lot of long unintended consequences if you don’t. So we are testing many different, what I call, intersection points of where technology can enhance the experience all the way from the potential to put yourself on wait list in advance to order at the table to pay and leave. So across our 1,400 restaurant footprint, we have tests going on in each and every one of that areas because we want to know exactly what enhances the customer experience, but also the law of unintended consequences for some of these things. We absolutely see and have a -- feel a role for it but we are doing it very thoughtfully and very guided because it’s kind of the go slow to go fast to make sure we get that right. We are obviously doing a lot in the interim on kind of digital marketing whether it’s website enhancements, whether it’s being able now to do location-based messaging and interactive components to increase consumer engagement. Our online ordering concepts have been upgraded a lot. We have a lot of exciting things happen in digital and our investment, as we said on the last call, in that has stepped up pretty decently this year, pretty significantly.

That are no further questions, I will now turn over the call to Liz Smith.

We thank you all for joining us and look forward to updating you on the progress of our portfolio in the Q2 call. Thank you.

This concludes the Bloomin’ first quarter 2014 results call. You may now disconnect.