Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Dine Brands Global, Inc. | a14-11687_18k.htm |
Exhibit 99.1
Ken Diptee
Executive Director, Investor Relations
DineEquity, Inc.
818-637-3632
Media Contact
Stacy Roughan and Samantha Verdile
Sard Verbinnen & Co.
310-201-2040 and 212-687-8080
DineEquity, Inc. Reports Strong First Quarter 2014 Results
· First quarter 2014 adjusted EPS (Non-GAAP) of $1.26 and GAAP EPS of $1.08
· Adjusted EPS (Non-GAAP) increased 11% compared to the first quarter of 2013
· Generated strong free cash flow of $50.3 million
· Returned over $29 million to shareholders through share repurchases and a first quarter cash dividend of $0.75 per share of common stock, or 58% of free cash flow
· First quarter domestic system-wide same-restaurant sales increased 3.9% at IHOP and decreased 0.5% at Applebee’s
· IHOP achieved its fourth consecutive quarter of positive same-restaurant sales
GLENDALE, Calif., May 1, 2014 — DineEquity, Inc. (NYSE: DIN), the parent company of Applebee’s Neighborhood Grill & Bar® and IHOP® restaurants, today announced financial results for the first quarter of 2014.
“DineEquity started 2014 with a strong first quarter, building on our accomplishments from the prior year. We continue to execute on our strategy and generate strong free cash flow,” said Julia A. Stewart, Chairman and Chief Executive Officer of DineEquity, Inc.
Ms. Stewart continued, “IHOP’s same-restaurant sales were positive for the fourth consecutive quarter and overwhelmingly outperformed its category, reflecting our focus on menu enhancements, innovative advertising, and higher operating standards. At Applebee’s, we are conducting a comprehensive assessment of the brand, with the goal of achieving consistent and positive same-restaurant sales and traffic. We have the foundation to build momentum at both brands and maintain our commitment to create additional value for our shareholders.”
First Quarter 2014 Financial Highlights
· Adjusted net income available to common stockholders was $24.0 million for the first quarter of 2014, or adjusted earnings per diluted share of $1.26. This compares to $21.8 million, or adjusted earnings per diluted share of $1.14, for the same period of 2013. The increase in adjusted net income was due to higher segment profit and lower cash interest expense. These items were partially offset by higher income taxes and a slight increase in general and administrative expenses. (See “Non-GAAP Financial Measures” below.)
· GAAP net income available to common stockholders was $20.5 million for the first quarter of 2014, or earnings per diluted share of $1.08. This compares to $17.9 million, or earnings per diluted share of $0.93 for the same period of 2013. The increase in net income was primarily due to higher segment profit and debt modification costs that occurred in the first quarter of 2013 that did not recur in the first quarter of 2014. These items were partially offset by a loss on the disposition of assets in the first quarter of 2014 compared to a gain in the same period of 2013 and a modest increase in general and administrative expenses.
· EBITDA was $77.6 million for first quarter of 2014. (See “Non-GAAP Financial Measures” below.)
· For the first quarter of 2014, cash flows from operating activities were $52.8 million, principal receipts from long-term receivables were $3.4 million, capital expenditures were $2.0 million, principal payments on capital lease and financing obligations were $2.7 million, the mandatory 1% repayment on the Term Loan principal balance was $1.2 million, and free cash flow was $50.3 million. (See “Non-GAAP Financial Measures” below.)
Potential Refinancing of Indebtedness
The Company is actively evaluating debt refinancing options. DineEquity continually monitors, among other things, prevailing interest rates and the economic environment to determine the optimal timing of a transaction. The Company anticipates refinancing some or all of its long-term debt in 2014 if financial market and economic conditions are favorable to do so.
Same-Restaurant Sales Performance
· Applebee’s domestic system-wide same-restaurant sales decreased 0.5% for the first quarter of 2014 compared to the same quarter of 2013.
· IHOP’s domestic system-wide same restaurant sales increased 3.9% for the first quarter of 2014 compared to the same period of 2013.
Financial Performance Guidance for Fiscal 2014
DineEquity reiterates its financial performance guidance for fiscal 2014 contained in the press release issued on February 26, 2014.
Investor Conference Call Today
The Company will host an investor conference call on May 1, 2014, at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time to discuss its results for the first quarter of fiscal 2014. To participate on the call, please dial (888) 713-4213 and reference pass code 84150990. International callers, please dial (617) 213-4865 and reference pass code 84150990. Participants may also pre-register to obtain a unique pin number to join the call without operator assistance by visiting the following Web site:
https://www.theconferencingservice.com/prereg/key.process?key=PFCRY8M8E
A live webcast of the call will be available on DineEquity’s Web site at www.dineequity.com, and may be accessed by visiting Calls & Presentations under the site’s Investors section. Participants should allow approximately ten minutes prior to the call’s start time to visit the site and download any streaming media software needed to listen to the webcast. A telephonic replay of the call may be accessed from 12:00 p.m. Pacific Time on May 1, 2014 through 11:59 p.m. Pacific Time on May 8, 2014 by dialing (888) 286-8010 and referencing pass code 31135803. International callers, please dial (617) 801-6888 and reference pass code 31135803. An online archive of the webcast will also be available on the Investors section of DineEquity’s Web site.
About DineEquity, Inc.
Based in Glendale, California, DineEquity, Inc., through its subsidiaries, franchises and operates restaurants under the Applebee’s Neighborhood Grill & Bar and IHOP brands. With more than 3,600 restaurants combined in 19 countries, over 400 franchisees and approximately 200,000 team members (including franchisee- and company-operated restaurant employees), DineEquity is one of the largest full-service restaurant companies in the world. For more information on DineEquity, visit the Company’s Web site located at www.dineequity.com.
Forward-Looking Statements
Statements contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by words such as “may,” “will,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results to be materially different from those expressed or implied in such statements. These factors include, but are not limited to: the effect of general economic conditions; the Company’s indebtedness and risks associated with the timing and our ability to refinance the Company’s indebtedness; risk of future impairment charges; trading volatility and the price of the Company’s common stock; the Company’s results in any given period differing from guidance provided to the public; the highly competitive nature of the restaurant business; the Company’s business strategy failing to achieve anticipated results; risks associated with the restaurant industry; risks associated with locations of current and future restaurants; rising costs for food commodities and utilities; shortages or interruptions in the supply or delivery of food; ineffective marketing and guest relationship initiatives and use of social media; changing health or dietary preferences; our engagement in business in foreign markets; harm to our brands’ reputation; litigation; fourth-party claims with respect to intellectual property assets; environmental liability; liability relating to employees; failure to comply with applicable laws and regulations; failure to effectively implement restaurant development plans; our dependence upon our franchisees; concentration of Applebee’s franchised restaurants in a limited number of franchisees; credit risk from IHOP franchisees operating under our previous business model; termination or non-renewal of franchise agreements; franchisees breaching their franchise agreements; insolvency proceedings involving franchisees; changes in the number and quality of franchisees; inability of franchisees to fund capital expenditures; heavy dependence on information technology; the occurrence of cyber incidents or a deficiency in our cybersecurity; failure to execute on a business continuity plan; inability to attract and retain talented employees; risks associated with retail brand initiatives; failure of our internal controls; and other factors discussed from time to time in the Company’s Annual and Quarterly Reports on Forms 10-K and 10-Q and in the Company’s other filings with the Securities and Exchange Commission. The forward-looking statements contained in this release are made as of the date hereof and the Company assumes no obligation to update or supplement any forward-looking statements.
Non-GAAP Financial Measures
This news release includes references to the Company’s non-GAAP financial measures “adjusted net income available to common stockholders (adjusted EPS),” “EBITDA,” “free cash flow,” and “segment EBITDA.” “Adjusted EPS” is computed for a given period by deducting from net income or loss available to common stockholders for such period the effect of any closure and impairment charges, any gain or loss related to debt extinguishment, any intangible asset amortization, any non-cash interest expense, any debt modification costs, and any gain or loss related to the disposition of assets. This is presented on an aggregate basis and a per share (diluted) basis. The Company defines “EBITDA” for a given period as income before income taxes less interest expense, loss on extinguishment of debt, depreciation and amortization, closure and impairment charges, non-cash stock-based compensation, gain or loss on disposition of assets and other charge backs as defined by its credit agreement. “Free cash flow” for a given period is defined as cash provided by operating activities, plus receipts from notes and equipment contracts receivable (“long-term notes receivable”), less principal payments on capital lease and financing obligations, the mandatory 1% of Term Loan principal balance repayment, and capital
expenditures. “Segment EBITDA” for a given period is defined as gross segment profit plus depreciation and amortization as well as interest charges related to the segment. Management utilizes EBITDA for debt covenant purposes and free cash flow to determine the amount of cash remaining for general corporate and strategic purposes and for the return of cash to stockholders pursuant to our capital allocation strategy, after the receipts from long-term receivables, and the funding of operating activities, capital expenditures and debt service. Management believes this information is helpful to investors to determine the Company’s adherence to debt covenants and the Company’s cash available for these purposes. Adjusted EPS, EBITDA, free cash flow and segment EBITDA are supplemental non-GAAP financial measures and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with United States generally accepted accounting principles.
DineEquity, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2014 |
|
2013 |
| ||
|
Segment Revenues: |
|
|
|
|
| ||
|
Franchise and restaurant revenues |
|
$ |
131,795 |
|
$ |
128,329 |
|
|
Rental revenues |
|
30,753 |
|
31,003 |
| ||
|
Financing revenues |
|
4,653 |
|
3,837 |
| ||
|
Total segment revenues |
|
167,201 |
|
163,169 |
| ||
|
Segment Expenses: |
|
|
|
|
| ||
|
Franchise and restaurant expenses |
|
45,678 |
|
44,476 |
| ||
|
Rental expenses |
|
23,866 |
|
24,269 |
| ||
|
Financing expenses |
|
585 |
|
— |
| ||
|
Total segment expenses |
|
70,129 |
|
68,745 |
| ||
|
Gross segment profit |
|
97,072 |
|
94,424 |
| ||
|
General and administrative expenses |
|
34,185 |
|
34,032 |
| ||
|
Interest expense |
|
24,969 |
|
25,295 |
| ||
|
Amortization of intangible assets |
|
3,071 |
|
3,071 |
| ||
|
Closure and impairment charges |
|
200 |
|
838 |
| ||
|
Loss on extinguishment of debt |
|
6 |
|
20 |
| ||
|
Debt modification costs |
|
— |
|
1,296 |
| ||
|
Loss (gain) on disposition of assets |
|
927 |
|
(318 |
) | ||
|
Income before income taxes |
|
33,714 |
|
30,190 |
| ||
|
Income tax provision |
|
(12,890 |
) |
(11,951 |
) | ||
|
Net income |
|
$ |
20,824 |
|
$ |
18,239 |
|
|
Net income available to common stockholders: |
|
|
|
|
| ||
|
Net income |
|
$ |
20,824 |
|
$ |
18,239 |
|
|
Less: Net income allocated to unvested participating restricted stock |
|
(343 |
) |
(329 |
) | ||
|
Net income available to common stockholders |
|
$ |
20,481 |
|
$ |
17,910 |
|
|
Net income available to common stockholders per share: |
|
|
|
|
| ||
|
Basic |
|
$ |
1.09 |
|
$ |
0.95 |
|
|
Diluted |
|
$ |
1.08 |
|
$ |
0.93 |
|
|
Weighted average shares outstanding: |
|
|
|
|
| ||
|
Basic |
|
18,794 |
|
18,911 |
| ||
|
Diluted |
|
19,054 |
|
19,193 |
| ||
|
|
|
|
|
|
| ||
|
Dividends declared per common share |
|
$ |
0.75 |
|
$ |
0.75 |
|
|
Dividends paid per common share |
|
$ |
0.75 |
|
$ |
0.75 |
|
DineEquity, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
|
|
|
March 31, |
|
December 31, |
| ||
|
|
|
(Unaudited) |
|
|
| ||
|
Assets |
|
|
|
|
| ||
|
Current assets: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
133,218 |
|
$ |
106,011 |
|
|
Receivables, net |
|
91,493 |
|
144,137 |
| ||
|
Prepaid income taxes |
|
— |
|
4,708 |
| ||
|
Prepaid gift cards |
|
39,559 |
|
49,223 |
| ||
|
Deferred income taxes |
|
26,501 |
|
23,853 |
| ||
|
Other current assets |
|
8,092 |
|
3,650 |
| ||
|
Total current assets |
|
298,863 |
|
331,582 |
| ||
|
Long-term receivables |
|
194,066 |
|
197,153 |
| ||
|
Property and equipment, net |
|
264,855 |
|
274,295 |
| ||
|
Goodwill |
|
697,470 |
|
697,470 |
| ||
|
Other intangible assets, net |
|
791,033 |
|
794,057 |
| ||
|
Other assets, net |
|
108,960 |
|
110,085 |
| ||
|
Total assets |
|
$ |
2,355,247 |
|
$ |
2,404,642 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
| ||
|
Current liabilities: |
|
|
|
|
| ||
|
Current maturities of long-term debt |
|
$ |
4,720 |
|
$ |
4,720 |
|
|
Accounts payable |
|
39,857 |
|
40,050 |
| ||
|
Gift card liability |
|
111,020 |
|
171,955 |
| ||
|
Accrued employee compensation and benefits |
|
10,099 |
|
24,956 |
| ||
|
Accrued interest payable |
|
31,671 |
|
13,575 |
| ||
|
Income taxes payable |
|
12,890 |
|
— |
| ||
|
Current maturities of capital lease and financing obligations |
|
12,577 |
|
12,247 |
| ||
|
Other accrued expenses |
|
22,940 |
|
16,770 |
| ||
|
Total current liabilities |
|
245,774 |
|
284,273 |
| ||
|
Long-term debt, less current maturities |
|
1,203,247 |
|
1,203,517 |
| ||
|
Capital lease obligations, less current maturities |
|
108,533 |
|
111,707 |
| ||
|
Financing obligations, less current maturities |
|
46,848 |
|
48,843 |
| ||
|
Deferred income taxes |
|
334,195 |
|
341,578 |
| ||
|
Other liabilities |
|
98,470 |
|
99,545 |
| ||
|
Total liabilities |
|
2,037,067 |
|
2,089,463 |
| ||
|
Commitments and contingencies |
|
|
|
|
| ||
|
Stockholders’ equity: |
|
|
|
|
| ||
|
Common stock, $0.01 par value, shares: 40,000,000 authorized; March 31, 2014 - 25,284,475 issued, 19,155,078 outstanding; December 31, 2013 - 25,299,315 issued, 19,040,890 outstanding |
|
253 |
|
253 |
| ||
|
Additional paid-in-capital |
|
274,557 |
|
274,202 |
| ||
|
Retained earnings |
|
343,095 |
|
336,578 |
| ||
|
Accumulated other comprehensive loss |
|
(170 |
) |
(164 |
) | ||
|
Treasury stock, at cost; shares: March 31, 2014 - 6,129,397; December 31, 2013 - 6,258,425 |
|
(299,555 |
) |
(295,690 |
) | ||
|
Total stockholders’ equity |
|
318,180 |
|
315,179 |
| ||
|
Total liabilities and stockholders’ equity |
|
$ |
2,355,247 |
|
$ |
2,404,642 |
|
DineEquity, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2014 |
|
2013 |
| ||
|
Cash flows from operating activities: |
|
|
|
|
| ||
|
Net income |
|
$ |
20,824 |
|
$ |
18,239 |
|
|
Adjustments to reconcile net income to cash flows provided by operating activities: |
|
|
|
|
| ||
|
Depreciation and amortization |
|
8,783 |
|
8,836 |
| ||
|
Non-cash interest expense |
|
1,642 |
|
1,503 |
| ||
|
Deferred income taxes |
|
(10,031 |
) |
(8,253 |
) | ||
|
Non-cash stock-based compensation expense |
|
3,143 |
|
3,189 |
| ||
|
Tax benefit from stock-based compensation |
|
3,524 |
|
2,228 |
| ||
|
Excess tax benefit from share-based compensation |
|
(4,455 |
) |
(966 |
) | ||
|
Loss (gain) on disposition of assets |
|
927 |
|
(318 |
) | ||
|
Debt modification costs |
|
— |
|
1,282 |
| ||
|
Other |
|
(196 |
) |
1,806 |
| ||
|
Changes in operating assets and liabilities: |
|
|
|
|
| ||
|
Receivables |
|
52,887 |
|
47,216 |
| ||
|
Current income tax receivables and payables |
|
18,020 |
|
16,528 |
| ||
|
Other current assets |
|
8,913 |
|
16,678 |
| ||
|
Accounts payable |
|
775 |
|
1,659 |
| ||
|
Accrued employee compensation and benefits |
|
(14,857 |
) |
(11,482 |
) | ||
|
Gift card liability |
|
(60,936 |
) |
(54,332 |
) | ||
|
Other accrued expenses |
|
23,877 |
|
27,413 |
| ||
|
Cash flows provided by operating activities |
|
52,840 |
|
71,226 |
| ||
|
Cash flows from investing activities: |
|
|
|
|
| ||
|
Additions to property and equipment |
|
(2,039 |
) |
(1,495 |
) | ||
|
Proceeds from sale of property and equipment |
|
681 |
|
— |
| ||
|
Principal receipts from notes, equipment contracts and other long-term receivables |
|
3,415 |
|
3,810 |
| ||
|
Other |
|
(55 |
) |
68 |
| ||
|
Cash flows provided by investing activities |
|
2,002 |
|
2,383 |
| ||
|
Cash flows from financing activities: |
|
|
|
|
| ||
|
Repayment of long-term debt |
|
(1,200 |
) |
(1,200 |
) | ||
|
Payment of debt modification costs |
|
— |
|
(1,282 |
) | ||
|
Principal payments on capital lease and financing obligations |
|
(2,695 |
) |
(2,483 |
) | ||
|
Repurchase of DineEquity common stock |
|
(15,002 |
) |
— |
| ||
|
Dividends paid on common stock |
|
(14,293 |
) |
(14,512 |
) | ||
|
Repurchase of restricted stock |
|
(1,831 |
) |
(2,590 |
) | ||
|
Proceeds from stock options exercised |
|
6,623 |
|
3,018 |
| ||
|
Excess tax benefit from share-based compensation |
|
4,455 |
|
966 |
| ||
|
Change in restricted cash |
|
(3,692 |
) |
(2,681 |
) | ||
|
Cash flows used in financing activities |
|
(27,635 |
) |
(20,764 |
) | ||
|
Net change in cash and cash equivalents |
|
27,207 |
|
52,845 |
| ||
|
Cash and cash equivalents at beginning of period |
|
106,011 |
|
64,537 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
133,218 |
|
$ |
117,382 |
|
NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
Reconciliation of (i) net income available to common stockholders to (ii) net income available to common stockholders excluding closure and impairment charges; loss on extinguishment of debt; amortization of intangible assets; non-cash interest expense; debt modification costs; and gain/loss on disposition of assets, all items net of taxes (as appropriate), and related per share data:
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2014 |
|
2013 |
| ||
|
Net income available to common stockholders, as reported |
|
$ |
20,481 |
|
$ |
17,910 |
|
|
Closure and impairment charges |
|
200 |
|
838 |
| ||
|
Loss on extinguishment of debt |
|
6 |
|
20 |
| ||
|
Amortization of intangible assets |
|
3,071 |
|
3,071 |
| ||
|
Non-cash interest expense |
|
1,642 |
|
1,503 |
| ||
|
Debt modification costs |
|
— |
|
1,296 |
| ||
|
Loss (gain) on disposition of assets |
|
927 |
|
(318 |
) | ||
|
Income tax provision |
|
(2,221 |
) |
(2,436 |
) | ||
|
Net income allocated to unvested participating restricted stock |
|
(61 |
) |
(77 |
) | ||
|
Net income available to common stockholders, as adjusted |
|
$ |
24,045 |
|
$ |
21,807 |
|
|
|
|
|
|
|
| ||
|
Diluted net income available to common stockholders per share: |
|
|
|
|
| ||
|
Net income available to common stockholders, as reported |
|
$ |
1.08 |
|
$ |
0.93 |
|
|
Closure and impairment charges |
|
0.01 |
|
0.02 |
| ||
|
Loss on extinguishment of debt |
|
0.00 |
|
0.00 |
| ||
|
Amortization of intangible assets |
|
0.10 |
|
0.10 |
| ||
|
Noncash interest expense |
|
0.06 |
|
0.05 |
| ||
|
Debt modification costs |
|
— |
|
0.04 |
| ||
|
Loss (gain) on disposition of assets |
|
0.03 |
|
(0.01 |
) | ||
|
Net income allocated to unvested participating restricted stock |
|
(0.00 |
) |
(0.00 |
) | ||
|
Rounding |
|
(0.02 |
) |
0.01 |
| ||
|
Diluted net income available to common stockholders per share, as adjusted |
|
$ |
1.26 |
|
$ |
1.14 |
|
|
|
|
|
|
|
| ||
|
Numerator for basic EPS-income available to common stockholders, as adjusted |
|
$ |
24,045 |
|
$ |
21,807 |
|
|
Effect of unvested participating restricted stock using the two-class method |
|
3 |
|
3 |
| ||
|
Numerator for diluted EPS-income available to common stockholders after assumed conversions, as adjusted |
|
$ |
24,048 |
|
$ |
21,810 |
|
|
|
|
|
|
|
| ||
|
Denominator for basic EPS-weighted-average shares |
|
18,794 |
|
18,911 |
| ||
|
Dilutive effect of stock options |
|
260 |
|
282 |
| ||
|
Denominator for diluted EPS-weighted-average shares and assumed conversions |
|
19,054 |
|
19,193 |
| ||
DineEquity, Inc. and Subsidiaries
Non-GAAP Financial Measures
(In thousands)
(Unaudited)
Reconciliation of U.S. GAAP income before income taxes to EBITDA:
|
|
|
Three Months |
|
Twelve Months |
| ||
|
|
|
March 31, 2014 |
| ||||
|
U.S. GAAP income before income taxes |
|
$ |
33,714 |
|
$ |
114,141 |
|
|
Interest charges |
|
28,952 |
|
115,888 |
| ||
|
Depreciation and amortization |
|
8,784 |
|
35,302 |
| ||
|
Non-cash stock-based compensation |
|
3,143 |
|
9,318 |
| ||
|
Closure and impairment charges |
|
200 |
|
974 |
| ||
|
Gain on sale of assets |
|
927 |
|
1,022 |
| ||
|
Other |
|
1,858 |
|
4,301 |
| ||
|
EBITDA |
|
$ |
77,578 |
|
$ |
280,946 |
|
Reconciliation of the Company’s cash provided by operating activities to “free cash flow” (cash from operations, plus receipts from notes, equipment contracts and other long-term receivables, less consolidated capital expenditures, principal payments on capital leases and financing obligations and the mandatory annual repayment of 1% of our Term Loan principal balance):
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2014 |
|
2013 |
| ||
|
Cash flows provided by operating activities |
|
$ |
52,840 |
|
$ |
71,226 |
|
|
Principal receipts from long-term receivables |
|
3,415 |
|
3,810 |
| ||
|
Additions to property and equipment |
|
(2,039 |
) |
(1,495 |
) | ||
|
Free cash flow before debt service |
|
54,216 |
|
73,541 |
| ||
|
Principal payments on capital lease and financing obligations |
|
(2,695 |
) |
(2,483 |
) | ||
|
Mandatory 1% of Term Loans principal balance repayment |
|
(1,180 |
) |
(1,180 |
) | ||
|
Free cash flow |
|
50,341 |
|
69,878 |
| ||
|
Dividends paid on common stock |
|
(14,293 |
) |
(14,512 |
) | ||
|
Repurchase of DineEquity common stock |
|
(15,002 |
) |
— |
| ||
|
|
|
$ |
21,046 |
|
$ |
55,366 |
|
DineEquity, Inc. and Subsidiaries
Non-GAAP Financial Measures
(In millions)
(Unaudited)
Reconciliation of U.S. GAAP gross segment profit to segment EBITDA:
Three months ended March 31, 2014
|
|
|
Franchise - |
|
Franchise - |
|
Company |
|
Rental |
|
Financing |
|
Total |
| ||||||
|
Revenue |
|
$ |
50,753 |
|
$ |
64,741 |
|
$ |
16,301 |
|
$ |
30,753 |
|
$ |
4,653 |
|
$ |
167,201 |
|
|
Expense |
|
1,400 |
|
27,973 |
|
16,305 |
|
23,866 |
|
585 |
|
70,129 |
| ||||||
|
Gross segment profit |
|
49,353 |
|
36,768 |
|
(4 |
) |
6,887 |
|
4,068 |
|
97,072 |
| ||||||
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Depreciation/amortization |
|
2,621 |
|
— |
|
524 |
|
3,344 |
|
— |
|
6,489 |
| ||||||
|
Interest charges |
|
— |
|
— |
|
100 |
|
3,860 |
|
— |
|
3,960 |
| ||||||
|
Segment EBITDA |
|
$ |
51,974 |
|
$ |
36,768 |
|
$ |
620 |
|
$ |
14,091 |
|
$ |
4,068 |
|
$ |
107,521 |
|
Three months ended March 31, 2013
|
|
|
Franchise - |
|
Franchise - |
|
Company |
|
Rental |
|
Financing |
|
Total |
| ||||||
|
Revenue |
|
$ |
50,733 |
|
$ |
61,131 |
|
$ |
16,465 |
|
$ |
31,003 |
|
$ |
3,837 |
|
$ |
163,169 |
|
|
Expense |
|
1,484 |
|
26,703 |
|
16,289 |
|
24,269 |
|
— |
|
68,745 |
| ||||||
|
Gross segment profit |
|
49,249 |
|
34,428 |
|
176 |
|
6,734 |
|
3,837 |
|
94,424 |
| ||||||
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Depreciation/amortization |
|
2,760 |
|
— |
|
529 |
|
3,408 |
|
— |
|
6,697 |
| ||||||
|
Interest charges |
|
— |
|
— |
|
94 |
|
4,092 |
|
— |
|
4,186 |
| ||||||
|
Segment EBITDA |
|
$ |
52,009 |
|
$ |
34,428 |
|
$ |
799 |
|
$ |
14,234 |
|
$ |
3,837 |
|
$ |
105,307 |
|
Restaurant Data
The following table sets forth, for the three and three months ended March 31, 2014 and 2013, the number of “Effective Restaurants” in the Applebee’s and IHOP systems and information regarding the percentage change in sales at those restaurants compared to the same periods in the prior year. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. However, we believe that presentation of this information is useful in analyzing our revenues because franchisees and area licensees pay us royalties and advertising fees that are generally based on a percentage of their sales, and, where applicable, rental payments under leases that may be partially based on a percentage of their sales. Management also uses this information to make decisions about future plans for the development of additional restaurants as well as evaluation of current operations.
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2014 |
|
2013 |
| ||
|
|
|
(unaudited) |
| ||||
|
Applebee’s Restaurant Data |
|
|
|
|
| ||
|
Effective Restaurants(a) |
|
|
|
|
| ||
|
Franchise |
|
1,985 |
|
2,006 |
| ||
|
Company |
|
23 |
|
23 |
| ||
|
Total |
|
2,008 |
|
2,029 |
| ||
|
|
|
|
|
|
| ||
|
System-wide(b) |
|
|
|
|
| ||
|
Sales percentage change(c) |
|
(0.7 |
)% |
(0.4 |
)% | ||
|
Domestic same-restaurant sales percentage change(d) |
|
(0.5 |
)% |
(1.3 |
)% | ||
|
|
|
|
|
|
| ||
|
Franchise(b)(e) |
|
|
|
|
| ||
|
Sales percentage change(c) |
|
(0.7 |
)% |
7.2 |
% | ||
|
Domestic same-restaurant sales percentage change(d) |
|
(0.5 |
)% |
(1.2 |
)% | ||
|
Average weekly domestic unit sales (in thousands) |
|
$ |
49.5 |
|
$ |
49.3 |
|
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2014 |
|
2013 |
| ||
|
|
|
(unaudited) |
| ||||
|
IHOP Restaurant Data |
|
|
|
|
| ||
|
Effective Restaurants(a) |
|
|
|
|
| ||
|
Franchise |
|
1,439 |
|
1,408 |
| ||
|
Area license |
|
169 |
|
167 |
| ||
|
Company |
|
11 |
|
12 |
| ||
|
Total |
|
1,619 |
|
1,587 |
| ||
|
|
|
|
|
|
| ||
|
System-wide(b) |
|
|
|
|
| ||
|
Sales percentage change(c) |
|
6.5 |
% |
2.4 |
% | ||
|
Domestic same-restaurant sales percentage change(d) |
|
3.9 |
% |
(0.5 |
)% | ||
|
|
|
|
|
|
| ||
|
Franchise(b) |
|
|
|
|
| ||
|
Sales percentage change(c) |
|
6.4 |
% |
2.3 |
% | ||
|
Domestic same-restaurant sales percentage change(d) |
|
3.9 |
% |
(0.5 |
)% | ||
|
Average weekly domestic unit sales (in thousands) |
|
$ |
36.4 |
|
$ |
34.9 |
|
|
|
|
|
|
|
| ||
|
Area License (b) |
|
|
|
|
| ||
|
Sales percentage change(c) |
|
8.0 |
% |
4.1 |
% | ||
(a) “Effective Restaurants” are the weighted average number of restaurants open in a given fiscal period, adjusted to account for restaurants open for only a portion of the period. Information is presented for all Effective Restaurants in the Applebee’s and IHOP systems, which includes restaurants owned by the Company as well as those owned by franchisees and area licensees.
(b) “System-wide” sales are retail sales at Applebee’s restaurants operated by franchisees and IHOP restaurants operated by franchisees and area licensees, as reported to the Company, in addition to retail sales at company-operated restaurants. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. Unaudited reported sales for Applebee’s domestic franchise restaurants, IHOP franchise restaurants and IHOP area license restaurants for the three and three months ended March 31, 2014 and 2013 were as follows:
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
|
|
2014 |
|
2013 |
| ||
|
|
|
(In millions) |
| ||||
|
Reported sales (unaudited) |
|
|
|
|
| ||
|
Applebee’s franchise restaurant sales |
|
$ |
1,183.1 |
|
$ |
1,191.5 |
|
|
IHOP franchise restaurant sales |
|
$ |
680.3 |
|
$ |
639.3 |
|
|
IHOP area license restaurant sales |
|
$ |
70.1 |
|
$ |
64.9 |
|
(c) “Sales percentage change” reflects, for each category of restaurants, the percentage change in sales in any given fiscal period compared to the prior fiscal period for all restaurants in that category.
(d) “Domestic same-restaurant sales percentage change” reflects the percentage change in sales, in any given fiscal period, compared to the same weeks in the prior year for domestic restaurants that have been operated throughout both fiscal periods that are being compared and have been open for at least 18 months. Because of new unit openings and restaurant closures, the domestic restaurants open throughout both fiscal periods being compared may be different from period to period. Same-restaurant sales percentage change does not include data on IHOP area license restaurants located in Florida.
(e) The sales percentage change for the three months ended March 31, 2013 for Applebee’s franchise restaurants was impacted by the refranchising of 154 company-operated restaurants during 2012.
DineEquity, Inc. and Subsidiaries
Restaurant Data
The following table summarizes our restaurant development activity:
|
|
|
Three Months Ended |
| ||
|
|
|
March 31, |
| ||
|
|
|
2014 |
|
2013 |
|
|
|
|
(Unaudited) |
| ||
|
Applebee’s Restaurant Development Activity |
|
|
|
|
|
|
Summary - beginning of period: |
|
|
|
|
|
|
Franchise |
|
1,988 |
|
2,011 |
|
|
Company restaurants |
|
23 |
|
23 |
|
|
Total Applebee’s restaurants, beginning of period |
|
2,011 |
|
2,034 |
|
|
Franchise restaurants opened: |
|
|
|
|
|
|
Domestic |
|
8 |
|
2 |
|
|
International |
|
— |
|
— |
|
|
Total franchise restaurants opened |
|
8 |
|
2 |
|
|
Franchise restaurants closed: |
|
|
|
|
|
|
Domestic |
|
(5 |
) |
(3 |
) |
|
International |
|
(3 |
) |
(2 |
) |
|
Total franchise restaurants closed |
|
(8 |
) |
(5 |
) |
|
Net franchise restaurant additions (reductions) |
|
— |
|
(3 |
) |
|
Summary - end of period: |
|
|
|
|
|
|
Franchise |
|
1,988 |
|
2,008 |
|
|
Company restaurants |
|
23 |
|
23 |
|
|
Total Applebee’s restaurants, end of period |
|
2,011 |
|
2,031 |
|
|
|
|
|
|
|
|
|
IHOP Restaurant Development Activity |
|
|
|
|
|
|
Summary - beginning of period: |
|
|
|
|
|
|
Franchise |
|
1,439 |
|
1,404 |
|
|
Area license |
|
168 |
|
165 |
|
|
Company |
|
13 |
|
12 |
|
|
Total IHOP restaurants, beginning of period |
|
1,620 |
|
1,581 |
|
|
Franchise/area license restaurants opened: |
|
|
|
|
|
|
Domestic franchise |
|
9 |
|
8 |
|
|
Domestic area license |
|
1 |
|
2 |
|
|
International franchise |
|
4 |
|
2 |
|
|
International area license |
|
— |
|
— |
|
|
Refranchised |
|
3 |
|
— |
|
|
Total franchise/area license restaurants opened |
|
17 |
|
12 |
|
|
Franchise/area license restaurants closed: |
|
|
|
|
|
|
Domestic franchise |
|
(5 |
) |
(4 |
) |
|
Domestic area license |
|
— |
|
— |
|
|
International franchise |
|
(1 |
) |
— |
|
|
International area license |
|
(1 |
) |
— |
|
|
Total franchise/area license restaurants closed |
|
(7 |
) |
(4 |
) |
|
Franchise restaurants reacquired by the Company |
|
— |
|
— |
|
|
Net franchise/area license restaurant additions |
|
10 |
|
8 |
|
|
Summary - end of period |
|
|
|
|
|
|
Franchise |
|
1,449 |
|
1,410 |
|
|
Area license |
|
168 |
|
167 |
|
|
Company |
|
10 |
|
12 |
|
|
Total IHOP restaurants, end of period |
|
1,627 |
|
1,589 |
|