GLENDALE, Calif., Oct. 29, 2015 /PRNewswire/ -- DineEquity, Inc.
(NYSE: DIN), the parent company of Applebee's Neighborhood Grill
& Bar® and IHOP® restaurants, today
announced financial results for the third quarter of fiscal
2015.
"We ended the quarter with several notable achievements,
highlighted by continued solid growth in adjusted earnings per
diluted share and significant free cash flow generation," said
Julia A. Stewart, Chairman and Chief
Executive Officer of DineEquity, Inc.
Ms. Stewart added, "We are leveraging our strong brands and
collaborating with our franchisees to move the business
forward. New restaurant development continues at a healthy
pace. Our ongoing focus on enhancing the guest experience,
operational excellence and financial discipline has positioned us
for continued growth and success."
Third Quarter of Fiscal 2015 Financial Highlights
- Adjusted net income available to common stockholders was
$26.7 million, or adjusted earnings
per diluted share of $1.43, for the
third quarter of 2015. This compares to $21.5 million, or adjusted earnings per diluted
share of $1.14, for the same period
of 2014. The increase in adjusted net income was mainly due
to a significant decline in cash interest expense and higher gross
segment profit, partially offset by higher general and
administrative expenses. The improvement in gross segment profit
was primarily due to the 5.8% increase in IHOP's domestic
system-wide same-restaurant sales. (See "Non-GAAP Financial
Measures" below.)
- GAAP net income available to common stockholders was
$23.9 million for the third quarter
of 2015, or earnings per diluted share of $1.28. This compares to net income
available to common stockholders of $18.6
million, or earnings per diluted share of $0.99, for the third quarter of 2014. The
increase was primarily due to significantly lower interest expense,
an increase in gross segment profit and a higher gain on the
disposition of assets in the third quarter of 2015 compared to the
same period of 2014. The increase was partially offset by
higher general and administrative expenses.
- In July 2015, DineEquity
completed the refranchising and sale of 23 Applebee's
company-operated restaurants in the Kansas City area. The Company received gross
proceeds of approximately $9 million
from the sale and recognized a gain of approximately $2 million on the transaction.
First Nine Months of Fiscal 2015 Financial Highlights
- Adjusted net income available to common stockholders was
$86.7 million, or adjusted earnings
per diluted share of $4.59, for the
first nine months of 2015. This compares to $67.6 million, or adjusted earnings per diluted
share of $3.57, for the same period
of 2014. The increase in adjusted net income was primarily
due to a significant decline in cash interest expense and higher
gross segment profit. The increase was partially offset by
higher income taxes and an increase in general and administrative
expenses. (See "Non-GAAP Financial Measures" below.)
- GAAP net income available to common stockholders was
$78.5 million for the first nine
months of 2015, or earnings per diluted share of $4.16. This compares to net income available to
common stockholders of $58.0 million,
or earnings per diluted share of $3.06, for the same period of 2014. The
increase was mainly due to a significant decline in interest
expense, higher gross segment profit and a higher gain on the
disposition of assets in the first nine months of 2015 compared to
the same period of 2014. The increase was partially offset by
higher income taxes and an increase in general and administrative
expenses.
- For the first nine months of fiscal 2015, cash flows from
operating activities were $70.6
million and free cash flow was $75.6
million. (See "Non-GAAP Financial Measures"
below.)
Same-Restaurant Sales Performance
Third Quarter of Fiscal 2015
- IHOP's domestic system-wide comparable same restaurant sales
increased 5.8% for the third quarter of 2015.
- Applebee's domestic system-wide comparable same-restaurant
sales declined 0.5% for the third quarter of 2015.
First Nine Months of Fiscal 2015
- IHOP's domestic system-wide comparable same restaurant sales
increased 5.6% for the first nine months of 2015.
- Applebee's domestic system-wide comparable same-restaurant
sales increased 1.2% for the first nine months of 2015.
Financial Performance Guidance for Fiscal 2015
DineEquity reiterates its financial performance guidance
for fiscal 2015 that was affirmed on July
29, 2015, except for the metrics below.
- Applebee's sales performance guidance was revised to range
between flat and positive 1%. This reflects a decrease from
the previous expectations of between positive 1.0% and positive
3.0%.
- New restaurant development by Applebee's franchisees was
revised to range between 35 and 45 restaurants, the majority of
which are expected to be opened in the U.S. This reflects an
increase from the previous range of between 30 and 40 new
restaurants.
- Combined profit for the Rental and Financing segments was
revised to approximately $42
million. This reflects an increase from previous
expectations of roughly $39
million.
- Net receipts from notes and equipment contracts receivable were
revised to approximately $13
million. This reflects an increase from the previous
projection of approximately $8
million. The higher expected receipts are due to
certain franchisee notes that were paid in full earlier than their
respective due dates.
- Capital expenditures were revised to approximately $8 million. This reflects a slight decline
from previous expectations of roughly $9
million.
- Free cash flow was revised to range between $120 million and $130 million, reflecting an
increase from the previous range of between $114 million and $124 million. The
$9 million in gross proceeds received
from the refranchising and sale of 23 Applebee's company-operated
restaurants is not included in our definition of free cash
flow. However, the proceeds are available to return to
shareholders. (See "Non-GAAP Financial Measures" below.)
The Company reiterates guidance for general and administrative
expenses, which are expected to range between $149 million and $153 million, including non-cash
stock-based compensation expense and depreciation of approximately
$18 million. This does not
include estimated non-recurring, pre-tax charges of approximately
$5 million related to our support
center consolidation announced on September
3, 2015.
DineEquity's financial performance guidance reflects the impact
of a 53rd operating week in fiscal 2015, in which the
last month of the fiscal fourth quarter contains six weeks.
Investor Conference Call Today
DineEquity will host a conference call to discuss its results on
the same day at 11:00 a.m. Eastern
Time / 8:00 a.m. Pacific
Time. To participate on the call, please dial (800)
708-4539 and reference passcode 40861530. International callers,
please dial (847) 619-6396 and reference passcode 40861530.
A live webcast of the call will be available at
www.dineequity.com, and may be accessed by visiting Calls &
Presentations on 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 10:30 a.m. Pacific
Time on October 29, 2015
through 11:59 p.m. Pacific Time on
November 5, 2015 by dialing (888)
843-7419 and referencing passcode 40861530#. International callers,
please dial (630) 652-3042 and reference passcode 40861530#. An
online archive of the webcast will also be available on the
Investors section of DineEquity's website.
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 20
countries and U.S. territories and over 400 franchisees, 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; 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)," "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, and any gain or
loss related to the disposition of assets. This is presented
on an aggregate basis and a per share (diluted) basis. For
fiscal 2015, "free cash flow" for a given period is defined as cash
provided by operating activities, plus net receipts from notes and
equipment contracts receivable, excluding direct financing lease
receivables ("net receipts from notes and equipment contracts
receivable"), less capital expenditures. "Segment EBITDA" for
a given period is defined as gross profit plus depreciation and
amortization as well as interest charges related to the segment.
Management utilizes 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 notes and equipment contracts
receivable, 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, 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
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
|
Franchise and
restaurant revenues
|
|
$
|
128,188
|
|
$
|
129,334
|
|
$
|
407,774
|
|
$
|
387,573
|
Rental
revenues
|
|
31,221
|
|
30,761
|
|
93,755
|
|
92,223
|
Financing
revenues
|
|
3,028
|
|
2,758
|
|
8,271
|
|
10,779
|
Total
revenues
|
|
162,437
|
|
162,853
|
|
509,800
|
|
490,575
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
Franchise and
restaurant expenses
|
|
41,984
|
|
47,570
|
|
145,433
|
|
135,403
|
Rental
expenses
|
|
23,264
|
|
23,654
|
|
70,073
|
|
71,173
|
Financing
expenses
|
|
504
|
|
—
|
|
516
|
|
825
|
Total cost of
revenues
|
|
65,752
|
|
71,224
|
|
216,022
|
|
207,401
|
Gross
profit
|
|
96,685
|
|
91,629
|
|
293,778
|
|
283,174
|
General and
administrative expenses
|
|
41,577
|
|
33,835
|
|
110,384
|
|
102,836
|
Interest
expense
|
|
15,434
|
|
24,984
|
|
46,757
|
|
74,895
|
Amortization of
intangible assets
|
|
2,500
|
|
3,071
|
|
7,500
|
|
9,212
|
Closure and
impairment charges, net
|
|
(72)
|
|
192
|
|
2,230
|
|
1,029
|
Loss on
extinguishment of debt
|
|
—
|
|
1
|
|
—
|
|
13
|
(Gain) loss on
disposition of assets
|
|
(2,351)
|
|
(205)
|
|
(2,294)
|
|
592
|
Income before income
tax provision
|
|
39,597
|
|
29,751
|
|
129,201
|
|
94,597
|
Income tax
provision
|
|
(15,340)
|
|
(10,864)
|
|
(49,635)
|
|
(35,719)
|
Net
income
|
|
$
|
24,257
|
|
$
|
18,887
|
|
$
|
79,566
|
|
$
|
58,878
|
Net income
available to common stockholders:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
24,257
|
|
$
|
18,887
|
|
$
|
79,566
|
|
$
|
58,878
|
Less: Net income
allocated to unvested participating restricted stock
|
|
(316)
|
|
(279)
|
|
(1,042)
|
|
(927)
|
Net income available
to common stockholders
|
|
$
|
23,941
|
|
$
|
18,608
|
|
$
|
78,524
|
|
$
|
57,951
|
Net income
available to common stockholders per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.29
|
|
$
|
0.99
|
|
$
|
4.19
|
|
$
|
3.09
|
Diluted
|
|
$
|
1.28
|
|
$
|
0.99
|
|
$
|
4.16
|
|
$
|
3.06
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
18,573
|
|
18,703
|
|
18,737
|
|
18,757
|
Diluted
|
|
18,706
|
|
18,890
|
|
18,874
|
|
18,964
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.875
|
|
$
|
0.75
|
|
$
|
2.625
|
|
$
|
2.25
|
Dividends paid per
common share
|
|
$
|
0.875
|
|
$
|
0.75
|
|
$
|
2.625
|
|
$
|
2.25
|
|
DineEquity, Inc.
and Subsidiaries
Consolidated
Balance Sheets
(In thousands,
except share and per share amounts)
|
|
|
|
September
30,
2015
|
|
December 31,
2014
|
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
105,886
|
|
$
|
104,004
|
Receivables,
net
|
|
91,085
|
|
153,498
|
Restricted
cash
|
|
42,226
|
|
52,262
|
Prepaid gift card
costs
|
|
41,140
|
|
51,268
|
Deferred income
taxes
|
|
35,488
|
|
30,860
|
Prepaid income
taxes
|
|
2,805
|
|
11,753
|
Other current
assets
|
|
5,548
|
|
9,239
|
Total current
assets
|
|
324,178
|
|
412,884
|
Long-term
receivables, net
|
|
164,910
|
|
180,856
|
Property and
equipment, net
|
|
226,234
|
|
241,229
|
Goodwill
|
|
697,470
|
|
697,470
|
Other intangible
assets, net
|
|
775,128
|
|
782,336
|
Deferred rent
receivable
|
|
90,531
|
|
91,117
|
Other non-current
assets, net
|
|
39,835
|
|
42,216
|
Total
assets
|
|
$
|
2,318,286
|
|
$
|
2,448,108
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
32,226
|
|
$
|
41,771
|
Gift card
liability
|
|
105,559
|
|
179,760
|
Accrued employee
compensation and benefits
|
|
20,767
|
|
25,722
|
Dividends
payable
|
|
16,408
|
|
16,635
|
Current maturities of
capital lease and financing obligations
|
|
15,386
|
|
14,852
|
Accrued
advertising
|
|
8,495
|
|
10,150
|
Accrued interest
payable
|
|
3,851
|
|
14,126
|
Other accrued
expenses
|
|
7,168
|
|
10,033
|
Total current
liabilities
|
|
209,860
|
|
313,049
|
Long-term
debt
|
|
1,300,000
|
|
1,300,000
|
Capital lease
obligations, less current maturities
|
|
88,384
|
|
98,119
|
Financing
obligations, less current maturities
|
|
42,428
|
|
42,524
|
Deferred income
taxes
|
|
307,562
|
|
319,111
|
Deferred rent
payable
|
|
73,387
|
|
75,375
|
Other non-current
liabilities
|
|
21,355
|
|
20,857
|
Total
liabilities
|
|
2,042,976
|
|
2,169,035
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.01
par value, shares: 40,000,000 authorized; September 30, 2015 -
25,194,889 issued, 18,735,014 outstanding; December 31, 2014 -
25,240,055 issued, 18,953,567 outstanding
|
|
252
|
|
252
|
Additional
paid-in-capital
|
|
284,787
|
|
279,946
|
Retained
earnings
|
|
343,621
|
|
313,644
|
Accumulated other
comprehensive loss
|
|
(99)
|
|
(73)
|
Treasury stock, at
cost; shares: September 30, 2015 - 6,459,875; December 31,
2014 - 6,286,488
|
|
(353,251)
|
|
(314,696)
|
Total stockholders'
equity
|
|
275,310
|
|
279,073
|
Total liabilities and
stockholders' equity
|
|
$
|
2,318,286
|
|
$
|
2,448,108
|
|
DineEquity, Inc.
and Subsidiaries
Consolidated
Statements of Cash Flows
(In
thousands)
(Unaudited)
|
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$
|
79,566
|
|
$
|
58,878
|
Adjustments to
reconcile net income to cash flows provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
24,134
|
|
26,237
|
Non-cash interest
expense
|
|
2,292
|
|
5,021
|
Deferred income
taxes
|
|
(15,388)
|
|
(21,947)
|
Non-cash stock-based
compensation expense
|
|
6,312
|
|
7,432
|
Tax benefit from
stock-based compensation
|
|
4,850
|
|
4,008
|
Excess tax benefit
from stock-based compensation
|
|
(4,577)
|
|
(4,635)
|
Closure and
impairment charges
|
|
2,230
|
|
1,029
|
(Gain) loss on
disposition of assets
|
|
(2,294)
|
|
592
|
Other
|
|
(1,303)
|
|
(2,184)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable,
net
|
|
(95)
|
|
(7,085)
|
Current income tax
receivables and payables
|
|
8,579
|
|
19,975
|
Gift card receivables
and payables
|
|
(11,816)
|
|
(14,353)
|
Prepaid expenses and
other current assets
|
|
(3,304)
|
|
(2,189)
|
Accounts
payable
|
|
2,147
|
|
6,848
|
Accrued employee
compensation and benefits
|
|
(4,915)
|
|
(7,674)
|
Accrued interest
payable
|
|
(10,275)
|
|
18,043
|
Other current
liabilities
|
|
(5,554)
|
|
14,431
|
Cash flows provided
by operating activities
|
|
70,589
|
|
102,427
|
Cash flows from
investing activities:
|
|
|
|
|
Additions to property
and equipment
|
|
(5,765)
|
|
(5,530)
|
Proceeds from sale of
property and equipment
|
|
10,782
|
|
681
|
Principal receipts
from notes, equipment contracts and other long-term
receivables
|
|
16,498
|
|
10,252
|
Other
|
|
(274)
|
|
1
|
Cash flows provided
by investing activities
|
|
21,241
|
|
5,404
|
Cash flows from
financing activities:
|
|
|
|
|
Repayment of
long-term debt
|
|
—
|
|
(3,600)
|
Principal payments on
capital lease and financing obligations
|
|
(9,711)
|
|
(8,484)
|
Repurchase of
DineEquity common stock
|
|
(50,010)
|
|
(30,006)
|
Dividends paid on
common stock
|
|
(49,786)
|
|
(42,733)
|
Tax payments for
restricted stock upon vesting
|
|
(3,389)
|
|
(2,931)
|
Proceeds from stock
options exercised
|
|
8,426
|
|
7,392
|
Excess tax benefit
from stock-based compensation
|
|
4,577
|
|
4,635
|
Change in restricted
cash
|
|
10,036
|
|
(4,948)
|
Other
|
|
(91)
|
|
(308)
|
Cash flows used in
financing activities
|
|
(89,948)
|
|
(80,983)
|
Net change in cash
and cash equivalents
|
|
1,882
|
|
26,848
|
Cash and cash
equivalents at beginning of period
|
|
104,004
|
|
106,011
|
Cash and cash
equivalents at end of period
|
|
$
|
105,886
|
|
$
|
132,859
|
|
NON-GAAP FINANCIAL
MEASURES
(In thousands,
except per share amounts)
(Unaudited)
|
|
Reconciliation of net
income available to common stockholders, as reported, to net income
available to common stockholders, as adjusted to exclude: closure
and impairment charges; amortization of intangible assets; non-cash
interest expense; gain or loss on disposition of assets; support
center consolidation costs and loss on extinguishment of debt, all
items net of taxes, and related per share data:
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net income available
to common stockholders, as reported
|
|
$
|
23,941
|
|
$
|
18,608
|
|
$
|
78,524
|
|
$
|
57,951
|
Closure and
impairment charges
|
|
(72)
|
|
192
|
|
2,230
|
|
1,029
|
Amortization of
intangible assets
|
|
2,500
|
|
3,071
|
|
7,500
|
|
9,212
|
Non-cash interest
expense
|
|
773
|
|
1,706
|
|
2,292
|
|
5,021
|
(Gain) loss on
disposition of assets
|
|
(2,351)
|
|
(205)
|
|
(2,294)
|
|
592
|
Support Center
consolidation costs
|
|
3,595
|
|
—
|
|
3,595
|
|
—
|
Loss on
extinguishment of debt
|
|
—
|
|
1
|
|
—
|
|
13
|
Income tax
provision
|
|
(1,689)
|
|
(1,810)
|
|
(5,063)
|
|
(6,029)
|
Net income allocated
to unvested participating restricted stock
|
|
(37)
|
|
(47)
|
|
(109)
|
|
(162)
|
Net income available
to common stockholders, as adjusted
|
|
$
|
26,660
|
|
$
|
21,516
|
|
$
|
86,675
|
|
$
|
67,627
|
|
|
|
|
|
|
|
|
|
Diluted net income
available to common stockholders per share:
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders, as reported
|
|
$
|
1.28
|
|
$
|
0.99
|
|
$
|
4.16
|
|
$
|
3.06
|
Closure and
impairment charges
|
|
(0.00)
|
|
0.01
|
|
0.07
|
|
0.03
|
Amortization of
intangible assets
|
|
0.08
|
|
0.10
|
|
0.25
|
|
0.30
|
Non-cash interest
expense
|
|
0.03
|
|
0.06
|
|
0.08
|
|
0.16
|
(Gain) loss on
disposition of assets
|
|
(0.08)
|
|
(0.01)
|
|
(0.08)
|
|
0.02
|
Support Center
consolidation costs
|
|
0.12
|
|
0.00
|
|
0.12
|
|
—
|
Loss on
extinguishment of debt
|
|
—
|
|
0.00
|
|
—
|
|
0.00
|
Net income allocated
to unvested participating restricted stock
|
|
(0.00)
|
|
(0.00)
|
|
(0.00)
|
|
(0.01)
|
Rounding
|
|
—
|
|
(0.01)
|
|
(0.01)
|
|
0.01
|
Diluted net income
available to common stockholders per share, as adjusted
|
|
$
|
1.43
|
|
$
|
1.14
|
|
$
|
4.59
|
|
$
|
3.57
|
|
|
|
|
|
|
|
|
|
Numerator for basic
EPS-income available to common stockholders, as adjusted
|
|
$
|
26,660
|
|
$
|
21,516
|
|
$
|
86,675
|
|
$
|
67,627
|
Effect of unvested
participating restricted stock using the two-class
method
|
|
1
|
|
2
|
|
4
|
|
5
|
Numerator for diluted
EPS-income available to common stockholders after assumed
conversions, as adjusted
|
|
$
|
26,661
|
|
$
|
21,518
|
|
$
|
86,679
|
|
$
|
67,632
|
|
|
|
|
|
|
|
|
|
Denominator for basic
EPS-weighted-average shares
|
|
18,573
|
|
18,703
|
|
18,737
|
|
18,757
|
Dilutive effect of
stock options
|
|
133
|
|
187
|
|
137
|
|
207
|
Denominator for
diluted EPS-weighted-average shares and assumed
conversions
|
|
18,706
|
|
18,890
|
|
18,874
|
|
18,964
|
|
DineEquity, Inc.
and Subsidiaries
Non-GAAP Financial
Measures
(Unaudited)
|
|
Reconciliation of the
Company's cash provided by operating activities to "free cash flow"
(cash provided by operating activities, plus net receipts from
notes and equipment contracts receivable, less additions to
property and equipment). We believe this information is helpful to
investors to determine our cash available for general corporate
purposes and for the return of cash to stockholders pursuant to our
capital allocation strategy, and is the same measure used by
management for these purposes.
|
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
|
(In
millions)
|
Cash flows provided
by operating activities
|
|
$
|
70.6
|
|
$
|
102.4
|
Net receipts from
notes and equipment contracts receivable
|
|
10.8
|
|
5.1
|
Additions to property
and equipment
|
|
(5.8)
|
|
(5.5)
|
Free cash
flow
|
|
75.6
|
|
102.0
|
Dividends paid on
common stock
|
|
(49.8)
|
|
(42.7)
|
Repurchase of
DineEquity common stock
|
|
(50.0)
|
|
(30.0)
|
|
|
$
|
(24.2)
|
|
$
|
29.3
|
|
DineEquity, Inc.
and Subsidiaries
Non-GAAP Financial
Measures
(In
thousands)
(Unaudited)
|
|
Reconciliation of
U.S. GAAP gross profit to segment EBITDA:
|
|
|
|
Three months ended
September 30, 2015
|
|
|
Franchise -
Applebee's
|
|
Franchise -
IHOP
|
|
Company
Restaurants
|
|
Rental
Operations
|
|
Financing
Operations
|
|
Total
|
Revenue
|
|
$
|
48,556
|
|
$
|
71,492
|
|
$
|
8,140
|
|
$
|
31,221
|
|
$
|
3,028
|
|
$
|
162,437
|
Expense
|
|
1,359
|
|
31,932
|
|
8,693
|
|
23,264
|
|
504
|
|
65,752
|
Gross segment
profit
|
|
47,197
|
|
39,560
|
|
(553)
|
|
7,957
|
|
2,524
|
|
96,685
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation/amortization
|
|
2,613
|
|
—
|
|
120
|
|
3,200
|
|
—
|
|
5,933
|
Interest
charges
|
|
—
|
|
—
|
|
96
|
|
3,275
|
|
—
|
|
3,371
|
Segment
EBITDA
|
|
$
|
49,810
|
|
$
|
39,560
|
|
$
|
(337)
|
|
$
|
14,432
|
|
$
|
2,524
|
|
$
|
105,989
|
|
|
|
|
|
Three months ended
September 30, 2014
|
|
|
Franchise -
Applebee's
|
|
Franchise -
IHOP
|
|
Company
Restaurants
|
|
Rental
Operations
|
|
Financing
Operations
|
|
Total
|
Revenue
|
|
$
|
47,780
|
|
$
|
66,522
|
|
$
|
15,032
|
|
$
|
30,761
|
|
$
|
2,758
|
|
$
|
162,853
|
Expense
|
|
1,105
|
|
31,120
|
|
15,345
|
|
23,654
|
|
—
|
|
71,224
|
Gross segment
profit
|
|
46,675
|
|
35,402
|
|
(313)
|
|
7,107
|
|
2,758
|
|
91,629
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation/amortization
|
|
2,587
|
|
—
|
|
536
|
|
3,281
|
|
—
|
|
6,404
|
Interest
charges
|
|
—
|
|
—
|
|
97
|
|
3,607
|
|
—
|
|
3,704
|
Segment
EBITDA
|
|
$
|
49,262
|
|
$
|
35,402
|
|
$
|
320
|
|
$
|
13,995
|
|
$
|
2,758
|
|
$
|
101,737
|
|
|
|
|
|
Nine months ended
September 30, 2015
|
|
|
Franchise -
Applebee's
|
|
Franchise -
IHOP
|
|
Company
Restaurants
|
|
Rental
Operations
|
|
Financing
Operations
|
|
Total
|
Revenue
|
|
$
|
150,907
|
|
$
|
213,964
|
|
$
|
42,903
|
|
$
|
93,755
|
|
$
|
8,271
|
|
$
|
509,800
|
Expense
|
|
4,685
|
|
98,191
|
|
42,557
|
|
70,073
|
|
516
|
|
216,022
|
Gross
profit
|
|
146,222
|
|
115,773
|
|
346
|
|
23,682
|
|
7,755
|
|
293,778
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation/amortization
|
|
7,793
|
|
—
|
|
493
|
|
9,620
|
|
—
|
|
17,906
|
Interest
charges
|
|
—
|
|
—
|
|
293
|
|
10,150
|
|
—
|
|
10,443
|
Segment
EBITDA
|
|
$
|
154,015
|
|
$
|
115,773
|
|
$
|
1,132
|
|
$
|
43,452
|
|
$
|
7,755
|
|
$
|
322,127
|
|
|
|
|
|
Nine months ended
September 30, 2014
|
|
|
Franchise -
Applebee's
|
|
Franchise -
IHOP
|
|
Company
Restaurants
|
|
Rental
Operations
|
|
Financing
Operations
|
|
Total
|
Revenue
|
|
$
|
148,572
|
|
$
|
191,994
|
|
$
|
47,007
|
|
$
|
92,223
|
|
$
|
10,779
|
|
$
|
490,575
|
Expense
|
|
3,799
|
|
84,424
|
|
47,180
|
|
71,173
|
|
825
|
|
207,401
|
Gross
profit
|
|
144,773
|
|
107,570
|
|
(173)
|
|
21,050
|
|
9,954
|
|
283,174
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation/amortization
|
|
7,823
|
|
—
|
|
1,555
|
|
9,939
|
|
—
|
|
19,317
|
Interest
charges
|
|
—
|
|
—
|
|
296
|
|
11,188
|
|
—
|
|
11,484
|
Segment
EBITDA
|
|
$
|
152,596
|
|
$
|
107,570
|
|
$
|
1,678
|
|
$
|
42,177
|
|
$
|
9,954
|
|
$
|
313,975
|
|
Restaurant Data
|
|
The following table sets forth, for the three and
nine months ended September 30, 2015 and 2014, 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
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
(unaudited)
|
Applebee's
Restaurant Data
|
|
|
|
|
|
|
|
|
Effective
Restaurants(a)
|
|
|
|
|
|
|
|
|
Franchise
|
|
2,011
|
|
1,985
|
|
1,998
|
|
1,985
|
Company
|
|
5
|
|
23
|
|
17
|
|
23
|
Total
|
|
2,016
|
|
2,008
|
|
2,015
|
|
2,008
|
|
|
|
|
|
|
|
|
|
System-wide(b)
|
|
|
|
|
|
|
|
|
Sales percentage
change(c)
|
|
0.4
|
%
|
|
2.5
|
%
|
|
2.1
|
%
|
|
0.7
|
%
|
Domestic
same-restaurant sales percentage change(d)
|
|
(0.5)
|
%
|
|
1.7
|
%
|
|
1.2
|
%
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
Franchise(b)
|
|
|
|
|
|
|
|
|
Sales percentage
change(c)
|
|
1.2
|
%
|
|
2.5
|
%
|
|
2.3
|
%
|
|
0.7
|
%
|
Domestic
same-restaurant sales percentage change(d)
|
|
0.5
|
%
|
|
1.7
|
%
|
|
1.2
|
%
|
|
0.6
|
%
|
Average weekly
domestic unit sales (in thousands)
|
|
$
|
45.9
|
|
|
$
|
46.0
|
|
|
$
|
48.6
|
|
|
$
|
47.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
(unaudited)
|
IHOP Restaurant
Data
|
|
|
|
|
|
|
|
|
Effective
Restaurants(a)
|
|
|
|
|
|
|
|
|
Franchise
|
|
1,482
|
|
1,459
|
|
1,474
|
|
1,449
|
Area
license
|
|
166
|
|
168
|
|
167
|
|
167
|
Company
|
|
12
|
|
10
|
|
13
|
|
10
|
Total
|
|
1,660
|
|
1,637
|
|
1,654
|
|
1,626
|
|
|
|
|
|
|
|
|
|
System-wide(b)
|
|
|
|
|
|
|
|
|
Sales percentage
change(c)
|
|
7.0
|
%
|
|
5.3
|
%
|
|
6.8
|
%
|
|
5.9
|
%
|
Domestic
same-restaurant sales percentage change(d)
|
|
5.8
|
%
|
|
2.4
|
%
|
|
5.6
|
%
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
Franchise(b)
|
|
|
|
|
|
|
|
|
Sales percentage
change(c)
|
|
6.8
|
%
|
|
5.6
|
%
|
|
6.5
|
%
|
|
6.0
|
%
|
Domestic
same-restaurant sales percentage change(d)
|
|
5.8
|
%
|
|
2.4
|
%
|
|
5.6
|
%
|
|
3.2
|
%
|
Average weekly
domestic unit sales (in thousands)
|
|
$
|
37.6
|
|
|
$
|
35.8
|
|
|
$
|
37.6
|
|
|
$
|
35.9
|
|
|
|
|
|
|
|
|
|
|
Area License
(b)
|
|
|
|
|
|
|
|
|
Sales percentage
change(c)
|
|
8.0
|
%
|
|
4.0
|
%
|
|
7.6
|
%
|
|
5.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 franchisees and area licensees as well as
those owned by the Company.
|
|
(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 nine months ended September 30, 2015
and 2014 were as follows:
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In millions)
|
Reported sales
(unaudited)
|
|
|
|
|
|
|
|
Applebee's domestic
franchise restaurant sales
|
$
|
1,113.2
|
|
$
|
1,100.3
|
|
$
|
3,513.8
|
|
$
|
3,434.1
|
IHOP franchise
restaurant sales
|
724.5
|
|
$
|
678.3
|
|
2,160.9
|
|
$
|
2,028.1
|
IHOP area license
restaurant sales
|
69.4
|
|
$
|
64.3
|
|
214.2
|
|
$
|
199.2
|
Total
|
$
|
1,907.1
|
|
$
|
1,842.9
|
|
$
|
5,888.9
|
|
$
|
5,661.4
|
|
(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.
|
|
DineEquity, Inc.
and Subsidiaries
Restaurant
Data
(unaudited)
|
|
The following table
summarizes our restaurant development activity:
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Applebee's
Restaurant Development Activity
|
|
|
|
|
|
Summary -
beginning of period:
|
|
|
|
|
|
|
|
Franchise
|
1,993
|
|
1,986
|
|
1,994
|
|
1,988
|
Company
restaurants
|
23
|
|
23
|
|
23
|
|
23
|
Total Applebee's
restaurants, beginning of period
|
2,016
|
|
2,009
|
|
2,017
|
|
2,011
|
Franchise restaurants
opened:
|
|
|
|
|
|
|
|
Domestic
|
7
|
|
7
|
|
17
|
|
20
|
International
|
2
|
|
3
|
|
6
|
|
4
|
Total franchise
restaurants opened
|
9
|
|
10
|
|
23
|
|
24
|
Franchise restaurants
closed:
|
|
|
|
|
|
|
|
Domestic
|
(6)
|
|
(7)
|
|
(14)
|
|
(17)
|
International
|
(1)
|
|
(3)
|
|
(8)
|
|
(9)
|
Total franchise
restaurants closed
|
(7)
|
|
(10)
|
|
(22)
|
|
(26)
|
Net franchise
restaurant development (reduction)
|
2
|
|
—
|
|
1
|
|
(2)
|
Refranchised from
Company restaurants
|
23
|
|
—
|
|
23
|
|
—
|
Net franchise
restaurant additions (reductions)
|
25
|
|
—
|
|
24
|
|
(2)
|
Summary - end of
period:
|
|
|
|
|
|
|
|
Franchise
|
2,018
|
|
1,986
|
|
2,018
|
|
1,986
|
Company
restaurants
|
—
|
|
23
|
|
—
|
|
23
|
Total Applebee's
restaurants, end of period
|
2,018
|
|
2,009
|
|
2,018
|
|
2,009
|
|
|
IHOP Restaurant
Development Activity
|
|
|
|
|
|
|
|
Summary -
beginning of period:
|
|
|
|
|
|
|
|
Franchise
|
1,479
|
|
1,455
|
|
1,472
|
|
1,439
|
Area
license
|
166
|
|
167
|
|
167
|
|
168
|
Company
|
13
|
|
10
|
|
11
|
|
13
|
Total IHOP
restaurants, beginning of period
|
1,658
|
|
1,632
|
|
1,650
|
|
1,620
|
Franchise/area
license restaurants opened:
|
|
|
|
|
Domestic
franchise
|
11
|
|
11
|
|
24
|
|
27
|
Domestic area
license
|
—
|
|
1
|
|
2
|
|
3
|
International
franchise
|
2
|
|
6
|
|
5
|
|
15
|
Total franchise/area
license restaurants opened
|
13
|
|
18
|
|
31
|
|
45
|
Franchise/area
license restaurants closed:
|
|
|
|
|
|
|
|
Domestic
franchise
|
(4)
|
|
(5)
|
|
(11)
|
|
(16)
|
Domestic area
license
|
—
|
|
—
|
|
(3)
|
|
(2)
|
International
franchise
|
—
|
|
(1)
|
|
—
|
|
(2)
|
International area
license
|
—
|
|
—
|
|
—
|
|
(1)
|
Total franchise/area
license restaurants closed
|
(4)
|
|
(6)
|
|
(14)
|
|
(21)
|
Net franchise/area
license restaurant development
|
9
|
|
12
|
|
17
|
|
24
|
Refranchised from
Company restaurants
|
2
|
|
—
|
|
3
|
|
4
|
Franchise restaurants
reacquired by the Company
|
—
|
|
—
|
|
(3)
|
|
(1)
|
Net franchise/area
license restaurant additions
|
11
|
|
12
|
|
17
|
|
27
|
Summary - end of
period
|
|
|
|
|
|
|
|
Franchise
|
1,490
|
|
1,466
|
|
1,490
|
|
1,466
|
Area
license
|
166
|
|
168
|
|
166
|
|
168
|
Company
|
11
|
|
10
|
|
11
|
|
10
|
Total IHOP
restaurants, end of period
|
1,667
|
|
1,644
|
|
1,667
|
|
1,644
|
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SOURCE DineEquity, Inc.