DRIMEDIUM SIGNALFINANCIAL10-K

DRI completed its $649.1 million acquisition of Chuy's Holdings in October 2024, financing it with $750 million in new senior notes that significantly increased total debt by 55.3%.

The acquisition adds meaningful scale to DRI's portfolio with 154 franchised restaurants versus 146 previously, while the company successfully transitioned from announcing the deal to closing it. The substantial debt increase to fund the acquisition will require monitoring of leverage ratios and integration execution, though the company maintained healthy cash levels and reduced SG&A expenses.

Comparing 2025-07-18 vs 2024-07-19View on EDGAR →
FINANCIAL ANALYSIS

DRI's balance sheet reflects a major acquisition-driven expansion with total debt surging 55.3% to $2.1 billion and total assets growing 11.2% to $12.6 billion, while cash increased 23.2% to $240 million providing adequate liquidity. The P&L shows higher interest expense (+22.7%) from the new debt financing offset by significantly lower SG&A expenses (-21.7%), suggesting potential synergies or operational efficiencies. Overall, the financial picture indicates successful execution of a large acquisition with reasonable financing terms, though debt service capacity and integration success will be key metrics to monitor.

FINANCIAL STATEMENT CHANGES
Total Debt
Balance Sheet
+55.3%
$1.4B→$2.1B

Debt increased 55.3% — substantial leverage increase; assess whether deployed for growth or covering losses.

Cash & Equivalents
Balance Sheet
+23.2%
$194.8M→$240.0M

Cash grew 23.2% — improving liquidity position supports investment and shareholder returns.

Interest Expense
P&L
+22.7%
$40.9M→$50.2M

Interest costs rose 22.7% — monitor debt levels and coverage ratio in rising rate environment.

SG&A Expense
P&L
-21.7%
$847.8M→$663.5M

SG&A reduced 21.7% — improved cost efficiency or headcount reduction improving operating margins.

Current Assets
Balance Sheet
+14%
$822.8M→$937.7M

Current assets grew 14% — improving short-term liquidity or inventory/receivables build.

Total Liabilities
Balance Sheet
+13.2%
$9.1B→$10.3B

Liabilities increased 13.2% — monitor debt-to-equity ratio and interest coverage.

Total Assets
Balance Sheet
+11.2%
$11.3B→$12.6B

Asset base grew 11.2% — expansion through organic growth, acquisitions, or capital deployment.

LANGUAGE CHANGES
NEW — 2025-07-18
PRIOR — 2024-07-19
ADDED
As of May 25, 2025, we also had 154 restaurants operated by independent third parties pursuant to area development and franchise agreements and 4 restaurants operating under contractual agreements.
On October 11, 2024, we acquired 100 percent of the equity interest of Chuy s Holdings, Inc.
(Chuy s Holdings) in an all-cash transaction of $649.1 million in total consideration, $613.7 million in net cash consideration, inclusive of $35.4 million of cash on Chuy s Holdings balance sheet at closing.
We financed the acquisition with a portion of the proceeds from the issuance of a $400.0 million aggregate principal amount of 4.350 percent senior notes due 2027 (2027 Notes) and a $350.0 million aggregate principal amount of 4.550 percent senior notes due 2029 (2029 Notes), which were issued on October 3, 2024.
The 2027 Notes will mature on October 15, 2027 and the 2029 Notes will mature on October 15, 2029.
Interest on the Notes will be paid semi- 1 annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2025, to holders of record on the preceding March 31 or September 30, as the case may be.
During the fourth quarter of fiscal 2025, we entered into an agreement with Recipe Unlimited, Canada s largest full-service restaurant company, pursuant to which Recipe Unlimited will acquire Olive Garden s eight Canadian restaurants.
These restaurants will be franchise-owned and will operate as members of our Olive Garden International family.
Recipe Unlimited is headquartered in Toronto, operating more than 1,200 restaurants in more than 300 communities across Canada.
Subsequent to the end of the quarter, on July 14, 2025, we successfully closed on the sale.
REMOVED
As of May 26, 2024, we also had 146 restaurants operated by independent third parties pursuant to area development and franchise agreements and 4 restaurants operating under contractual agreements.
On June 14, 2023, we completed our acquisition of Ruth s Hospitality Group, Inc., a Delaware corporation ( Ruth s ), for $21.50 per share in cash.
Ruth s is the owner, operator and franchisor of restaurants under the Ruth s Chris Steak House trademark.
As of the closing, Ruth s Chris Steak House had 155 locations around the globe, including 81 company-owned or company-operated restaurants and 74 franchised restaurants.
On July 17, 2024, we entered into an agreement to acquire all of the outstanding shares of Chuy s Holdings, Inc.( Chuy s Holdings ), a Delaware corporation, for $37.50 per share in an all-cash transaction with an enterprise value of approximately 1 $605 million.
Chuy s Holdings is the owner and operator of restaurants under the Chuy s Fine Tex-Mex ( Chuy s ) trademark.
The transaction has been approved by our Board of Directors and is subject to the satisfaction of customary closing conditions, including, among others, the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The acquisition is expected to be completed in the second quarter of fiscal 2025.
Our fiscal year 2024 ended May 26, 2024 and consisted of 52 weeks, fiscal 2023 ended May 28, 2023 and consisted of 52 weeks, and fiscal 2022 ended May 29, 2022 and consisted of 52 weeks.
Most dinner menu entr e prices range from $11.50 to $21.50, and most lunch menu entr e prices range from $9.50 to $11.50.
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