In June 2013, following the completion of its previously disclosed review of market performance for its Qdoba Mexican Grill® brand, the company announced plans to close 67 of its company-operated Qdoba restaurants. In the third quarter of 2013, 62 of these restaurants were closed, and the results of operations, impairment charges, lease obligations and other exit costs for these restaurants are included in discontinued operations in the accompanying consolidated statements of earnings for all periods presented. Of the remaining five restaurants closing, three were sold to an existing franchisee in the fourth quarter, one closed in the fourth quarter when its lease expired, and the final restaurant will close when its lease expires prior to the end of the calendar year. The results of operations and impairment charges related to these five restaurants have been included in continuing operations.
Discontinued operations for the fourth quarter and fiscal 2013 include after-tax charges related to the Qdoba restaurant closures of approximately $0.02 and $0.61 per diluted share, respectively, as compared to $0.03 and $0.11 for the fourth quarter and fiscal 2012, respectively.
Discontinued operations also include charges related to the previously announced outsourcing of the company’s distribution business, which was completed in the first quarter of fiscal 2013. As a result of the outsourcing, the company recorded after-tax charges which reduced diluted net earnings per share by approximately $0.01 in the fourth quarter of 2013, $0.09 in fiscal 2013, and $0.12 in both the fourth quarter and fiscal 2012. These charges and the results of operations for the distribution business are included in discontinued operations in the accompanying consolidated statements of earnings for all periods presented.
The company is continuing its efforts to improve its cost structure and identify opportunities to reduce G&A as well as improve restaurant profitability across both brands. As a result, restructuring charges of $2.2 million, or approximately $0.03 per diluted share, were recorded during the fourth quarter of 2013 as compared to $2.7 million, or approximately $0.04 per diluted share, during the fourth quarter of 2012. For fiscal year 2013, restructuring charges totaled $3.5 million, or approximately $0.05 per diluted share, as compared to $15.5 million, or approximately $0.23 per diluted share, during fiscal 2012. These charges are included in “Impairment and other charges, net” in the accompanying consolidated statements of earnings.
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