News Column

DineEquity, Inc. Reports Successful Second Quarter 2014 Results

July 29, 2014

  • Second quarter 2014 adjusted EPS (Non-GAAP) of $1.16 and GAAP EPS of $1.00
  • Adjusted EPS (Non-GAAP) increased 14% compared to the second quarter of 2013
  • Generated strong free cash flow of $50.0 million in the first six months of 2014
  • Over $29 million returned to shareholders in the form of a second quarter cash dividend of $0.75 per share of common stock and share repurchases
  • Second quarter domestic system-wide same restaurant sales increased 3.2% and 0.6% at IHOP and Applebee’s, respectively
  • Both IHOP and Applebee’s ranked number one by Nation’s Restaurant News for the seventh consecutive year in their respective categories based on last fiscal year’s U.S. system-wide same-restaurant sales

    GLENDALE, Calif.--(BUSINESS WIRE)-- DineEquity, Inc. (NYSE: DIN), the parent company of Applebee's Neighborhood Grill & Bar® and IHOP® restaurants, today announced financial results for the second quarter of fiscal 2014.

    “We delivered successful results for the second quarter, driven by the continued focus on our strategic objectives,” said Julia A. Stewart, Chairman and Chief Executive Officer of DineEquity, Inc. Ms. Stewart added, “We are very pleased to announce that IHOP and Applebee’s reported positive same-restaurant sales and outperformed their respective categories based on industry sales data. We are doing the work necessary to drive long-term success at both of our brands. In addition, we continue to generate substantial free cash flow, tightly manage our general and administrative expenses, and return significant cash to shareholders. We remain clearly focused on maximizing shareholder value and driving sustainable growth.”

    Second Quarter 2014 Financial Highlights

  • Adjusted net income available to common stockholders was $22.1 million, representing adjusted earnings per diluted share of $1.16 for the second quarter of 2014. This compares to $19.7 million, or adjusted earnings per diluted share of $1.02, for the second quarter of 2013. Adjusted earnings per diluted share increased by 14% compared to the second quarter of 2013. The improvement in adjusted net income was due to higher segment profit, lower general and administrative expenses, and lower cash interest expense. These items were partially offset by higher income taxes. (See “Non-GAAP Financial Measures” below.)
  • GAAP net income available to common stockholders was $18.9 million, or earnings per diluted share of $1.00, for the second quarter of 2014. This compares to $16.6 million, or earnings per diluted share of $0.87, for the second quarter of 2013. Earnings per diluted share improved by 15% compared to the second quarter of 2013. The increase in net income was primarily due to higher segment profit, lower general and administrative expenses, and a gain on the disposition of assets in the second quarter of 2014 compared to a loss in the same period of 2013. These items were partially offset by higher income tax expense and an increase in closure and impairment charges.
  • General and administrative expenses were $34.8 million for the second quarter of 2014 compared to $35.6 million for the same period of 2013.

    First Six Months of 2014 Highlights

  • Adjusted net income available to common stockholders was $46.1 million in the first six months of 2014, representing adjusted earnings per diluted share of $2.43. This compares to $41.5 million, or adjusted earnings per diluted share of $2.16, for the same period in 2013. Adjusted earnings per diluted share for the first six months of 2014 rose by 13% compared to the same period in 2013. The increase was primarily due to higher segment profit, lower general and administrative expenses, and a decline in cash interest expense. These items were partially offset by higher income taxes. (See “Non-GAAP Financial Measures” below.)
  • GAAP net income available to common stockholders was $39.3 million in the first six months of 2014, or earnings per diluted share of $2.07, compared to $34.5 million, or earnings per diluted share of $1.80 for the same period in 2013. Earnings per diluted share for the first six months of 2014 improved by 15% compared to the same period in 2013. The increase was primarily due to higher segment profit, debt modification costs that occurred in the first six months of 2013 that did not recur in the first six months of 2014, and a decline in general and administrative expenses. These items were partially offset by higher income tax expense and a loss on the disposition of assets in the first six months of 2014 compared to a gain in the first six months of 2013.
  • General and administrative expenses were $69.0 million in the first six months of 2014 compared to $69.7 million for the same period of 2013.
  • EBITDA was $149.4 million for the first six months of 2014. (See “Non-GAAP Financial Measures” below.)
  • For the first six months of 2014, cash flows from operating activities were $56.0 million and free cash flow was $50.0 million. (See “Non-GAAP Financial Measures” below.)

    Same-Restaurant Sales Performance

    Second Quarter 2014

  • Applebee’s domestic system-wide same-restaurant sales increased 0.6% for the second quarter of 2014 compared to the second quarter of 2013.
  • IHOP’s domestic system-wide same restaurant sales increased 3.2% for the second quarter of 2014 compared to the same quarter of 2013.

    First Six Months of 2014 Highlights

  • Applebee’s domestic system-wide same-restaurant sales remained flat for the first six months of 2014 compared to the same period in 2013.
  • IHOP’s domestic system-wide same restaurant sales increased 3.6% for the first six months of 2014 compared to the first six months 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, except for IHOP’s domestic system-wide same restaurant sales. The Company revised IHOP’s sales performance guidance to range between positive 1.0% and positive 2.5%. This reflects an increase from the previous expectations of between positive 0.5% and positive 2.0%.

    Investor Conference Call Today

    The Company 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 pass code 37666196. International callers, please dial (847) 619-6396 and reference pass code 37666196.

    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 10:30 a.m. Pacific Time on July 29, 2014 through 11:59 p.m. Pacific Time on August 5, 2014 by dialing (888) 843-7419 and referencing pass code 37666196#. International callers, please dial (630) 652-3042 and reference pass code 37666196#. 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 EndedSix Months Ended
    June 30,June 30,
    2014     20132014     2013
    Segment Revenues:
    Franchise and restaurant revenues $ 126,444 $ 124,153 $ 258,239 $ 252,482
    Rental revenues 30,709 30,731 61,462 61,734
    Financing revenues 3,368   3,230   8,021   7,067  
    Total segment revenues 160,521   158,114   327,722   321,283  
    Segment Expenses:
    Franchise and restaurant expenses 42,155 42,308 87,833 86,784
    Rental expenses 23,653 24,535 47,519 48,804
    Financing expenses 240   245   825   245  
    Total segment expenses 66,048   67,088   136,177   135,833  
    Gross segment profit 94,473 91,026 191,545 185,450
    General and administrative expenses 34,816 35,641 69,001 69,673
    Interest expense 24,942 24,956 49,911 50,251
    Amortization of intangible assets 3,070 3,069 6,141 6,140
    Closure and impairment charges 637 324 837 1,162
    Loss on extinguishment of debt 6 16 12 36
    Debt modification costs 1,296
    (Gain) loss on disposition of assets (130 ) 64     797   (254 )
    Income before income tax provision 31,132 26,956 64,846 57,146
    Income tax provision (11,965 ) (10,019 ) (24,855 ) (21,970 )
    Net income $ 19,167   $ 16,937   $ 39,991   $ 35,176  
    Net income available to common stockholders:
    Net income $ 19,167 $ 16,937 $ 39,991 $ 35,176
    Less: Net income allocated to unvested participating restricted stock (307 ) (298 ) (649 ) (627 )
    Net income available to common stockholders $ 18,860   $ 16,639   $ 39,342   $ 34,549  
    Net income available to common stockholders per share:
    Basic $ 1.00   $ 0.88   $ 2.09   $ 1.82  
    Diluted $ 1.00   $ 0.87   $ 2.07   $ 1.80  
    Weighted average shares outstanding:
    Basic 18,776   18,953   18,785   18,932  
    Diluted 18,955   19,222   19,003   19,207  
     
    Dividends declared per common share $ 0.75   $ 0.75   $ 1.50   $ 1.50  
    Dividends paid per common share $ 0.75   $ 0.75   $ 1.50   $ 1.50  
     
               
    DineEquity, Inc. and Subsidiaries
    Consolidated Balance Sheets
    (In thousands, except share and per share amounts)
     

    June 30,

    2014

    December 31,

    2013

    (Unaudited)
    Assets
    Current assets:
    Cash and cash equivalents $ 100,350 $ 106,011
    Receivables, net 91,187 144,137
    Prepaid gift cards 40,459 49,223
    Prepaid income taxes 4,708
    Deferred income taxes 28,874 23,853
    Other current assets 12,323   3,650  
    Total current assets 273,193 331,582
    Long-term receivables, net 190,380 197,153
    Property and equipment, net 261,201 274,295
    Goodwill 697,470 697,470
    Other intangible assets, net 788,105 794,057
    Other assets, net 108,740   110,085  
    Total assets $ 2,319,089   $ 2,404,642  
    Liabilities and Stockholders’ Equity
    Current liabilities:
    Current maturities of long-term debt $ 4,720 $ 4,720
    Accounts payable 41,138 40,050
    Gift card liability 108,046 171,955
    Accrued employee compensation and benefits 14,404 24,956
    Accrued interest payable 13,622 13,575
    Income taxes payable 10,812
    Current maturities of capital lease and financing obligations 12,936 12,247
    Other accrued expenses 19,098   16,770  
    Total current liabilities 224,776   284,273  
    Long-term debt, net (less current maturities) 1,202,995 1,203,517
    Capital lease obligations (less current maturities) 105,212 111,707
    Financing obligations (less current maturities) 46,815 48,843
    Deferred income taxes 330,525 341,578
    Other liabilities 98,173   99,545  
    Total liabilities 2,008,496   2,089,463  
    Commitments and contingencies
    Stockholders’ equity:
    Common stock, $0.01 par value, shares: 40,000,000 authorized; June 30, 2014 - 25,277,373 issued, 18,967,460 outstanding; December 31, 2013 - 25,299,315 issued, 19,040,890 outstanding 253 253
    Additional paid-in-capital 276,636 274,202
    Retained earnings 348,026 336,578
    Accumulated other comprehensive loss (56 ) (164 )
    Treasury stock, at cost; shares: June 30, 2014 - 6,309,913; December 31, 2013 - 6,258,425 (314,266 ) (295,690 )
    Total stockholders’ equity 310,593   315,179  
    Total liabilities and stockholders’ equity $ 2,319,089   $ 2,404,642  
     
         
    DineEquity, Inc. and Subsidiaries
    Consolidated Statements of Cash Flows
    (In thousands)
    (Unaudited)
     
    Six Months Ended
    June 30,
    2014       2013
    Cash flows from operating activities:
    Net income $ 39,991 $ 35,176
    Adjustments to reconcile net income to cash flows provided by operating activities:
    Depreciation and amortization 17,498 17,636
    Non-cash interest expense 3,315 3,054
    Deferred income taxes (16,047 ) (15,335 )
    Non-cash stock-based compensation expense 5,508 5,842
    Tax benefit from stock-based compensation 3,578 2,943
    Excess tax benefit from share-based compensation (4,455 ) (1,567 )
    Loss (gain) on disposition of assets 797 (254 )
    Debt modification costs 1,281
    Other (867 ) 1,072
    Changes in operating assets and liabilities:
    Receivables, net 54,225 34,670
    Current income tax receivables and payables 16,004 8,716
    Prepaid expenses and other current assets 7,156 16,476
    Accounts payable 1,911 8,089
    Accrued employee compensation and benefits (10,552 ) (7,612 )
    Gift card liability (63,911 ) (59,936 )
    Other accrued expenses 1,841   5,178  
    Cash flows provided by operating activities 55,992   55,429  
    Cash flows from investing activities:
    Additions to property and equipment (4,086 ) (2,953 )
    Proceeds from sale of property and equipment 681
    Principal receipts from notes, equipment contracts and other long-term receivables 6,066 7,063
    Other 75   11  
    Cash flows provided by investing activities 2,736   4,121  
    Cash flows from financing activities:
    Repayment of long-term debt (2,400 ) (2,400 )
    Payment of debt modification costs (1,281 )
    Principal payments on capital lease and financing obligations (5,570 ) (5,018 )
    Repurchase of DineEquity common stock (30,006 ) (14,504 )
    Dividends paid on common stock (28,518 ) (28,885 )
    Repurchase of restricted stock (1,944 ) (2,841 )
    Proceeds from stock options exercised 6,658 3,348
    Excess tax benefit from share-based compensation 4,455 1,567
    Change in restricted cash (7,064 ) 1,564  
    Cash flows used in financing activities (64,389 ) (48,450 )
    Net change in cash and cash equivalents (5,661 ) 11,100
    Cash and cash equivalents at beginning of period 106,011   64,537  
    Cash and cash equivalents at end of period $ 100,350   $ 75,637  
     
             
    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 or loss on disposition of assets, all items net of taxes, and related per share data:

     
    Three Months EndedSix Months Ended
    June 30,June 30,
    2014     20132014     2013
    Net income available to common stockholders, as reported $ 18,860 $ 16,639 $ 39,342 $ 34,549
    Closure and impairment charges 637 324 837 1,162
    Loss on extinguishment of debt 6 16 12 36
    Amortization of intangible assets 3,070 3,069 6,141 6,140
    Non-cash interest expense 1,673 1,551 3,315 3,054
    Debt modification costs 1,296
    (Gain) loss on disposition of assets (130 ) 64 797 (254 )
    Income tax provision (1,997 ) (1,909 ) (4,219 ) (4,345 )
    Net income allocated to unvested participating restricted stock (55 ) (60 ) (116 ) (137 )
    Net income available to common stockholders, as adjusted $ 22,064   $ 19,694   $ 46,109   $ 41,501  
     
    Diluted net income available to common stockholders per share:
    Net income available to common stockholders, as reported $ 1.00 $ 0.87 $ 2.07 $ 1.80
    Closure and impairment charges 0.02 0.01 0.02 0.04
    Loss on extinguishment of debt 0.00 0.00 0.00 0.00
    Amortization of intangible assets 0.10 0.10 0.20 0.20
    Noncash interest expense 0.06 0.05 0.11 0.10
    Debt modification costs 0.04
    (Gain) loss on disposition of assets (0.01 ) 0.00 0.02 (0.01 )
    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 $ 1.16   $ 1.02   $ 2.43   $ 2.16  
     

    Numerator for basic EPS-income available to common stockholders, as adjusted

    $ 22,064 $ 19,694 $ 46,109 $ 41,501
    Effect of unvested participating restricted stock using the two-class method 1   1   3   4  
    Numerator for diluted EPS-income available to common stockholders after assumed conversions, as adjusted $ 22,065   $ 19,695   $ 46,112   $ 41,505  
     
    Denominator for basic EPS-weighted-average shares 18,776 18,953 18,785 18,932
    Dilutive effect of stock options 179   269   218   275  
    Denominator for diluted EPS-weighted-average shares and assumed conversions 18,955   19,222   19,003   19,207  
     
               
    DineEquity, Inc. and Subsidiaries
    Non-GAAP Financial Measures
    (In thousands)
    (Unaudited)
     

    Reconciliation of U.S. GAAP income before income taxes to EBITDA:

     

    Six Months

    Ended

    Twelve Months

    Ended

    June 30, 2014
    U.S. GAAP income before income taxes $ 64,846 $ 118,317
    Interest charges 57,741 115,591
    Depreciation and amortization 17,498 35,217
    Non-cash stock-based compensation 5,508 9,030
    Closure and impairment charges 837 1,487
    Gain on sale of assets 797 828
    Other 2,154   3,453  
    EBITDA $ 149,381   $ 283,923  
     

    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):

     
    Six Months Ended
    June 30,
    20142013
    Cash flows provided by operating activities $ 55,992 $ 55,429
    Principal receipts from long-term receivables 6,066 7,063
    Additions to property and equipment (4,086 ) (2,953 )
    Free cash flow before debt service 57,972 59,539
    Principal payments on capital lease and financing obligations (5,570 ) (5,018 )
    Mandatory 1% of Term Loans principal balance repayment (2,360 ) (2,360 )
    Free cash flow 50,042 52,161
    Dividends paid on common stock (28,518 ) (28,885 )
    Repurchase of DineEquity common stock (30,006 ) (14,504 )
    $ (8,482 ) $ 8,772  
     
                           
    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 June 30, 2014

    Franchise -

    Applebee's

    Franchise -

    IHOP

    Company

    Restaurants

    Rental

    Operations

    Financing

    Operations

    Total
    Revenue $ 50,039 $ 60,731 $ 15,674 $ 30,709 $ 3,368 $ 160,521
    Expense   1,294   25,331   15,530     23,653   240   66,048
    Gross segment profit 48,745 35,400 144 7,056 3,128 94,473
    Plus:
    Depreciation/amortization 2,615 495 3,314 6,424
    Interest charges       99     3,721     3,820
    Segment EBITDA $ 51,360 $ 35,400 $ 738   $ 14,091 $ 3,128 $ 104,717
     

     

    Three months ended June 30, 2013

     

    Franchise -

    Applebee's

     

    Franchise -

    IHOP

    Company

    Restaurants

    Rental

    Operations

    Financing

    Operations

    Total
    Revenue

     

    $

    50,223

     

    $

    57,773

    $ 16,157

    $

    30,731

    $ 3,230 $ 158,114
    Expense

     

     

    1,448

     

     

    24,695

      16,165    

    24,535

      245   67,088
    Gross segment profit

     

    48,775

     

    33,078

    (8 )

    6,196

    2,985 91,026
    Plus:
    Depreciation/amortization

     

    2,711

     



    542

    3,346

    6,599
    Interest charges

     

     



     

     



      93    

    4,020

        4,113
    Segment EBITDA

     

    $

    51,486

     

    $

    33,078

    $ 627  

    $

    13,562

    $ 2,985 $ 101,738

     

    Six months ended June 30, 2014

    Franchise -

    Applebee's

    Franchise -

    IHOP

    Company

    Restaurants

    Rental

    Operations

    Financing

    Operations

    Total
    Revenue $ 100,792 $ 125,472 $ 31,975 $ 61,462 $ 8,021 $ 327,722
    Expense   2,694   53,304   31,835     47,519   825   136,177
    Gross segment profit 98,098 72,168 140 13,943 7,196 191,545
    Plus:
    Depreciation/amortization 5,236 1,019 6,658 12,913
    Interest charges       199     7,581     7,780
    Segment EBITDA $ 103,334 $ 72,168 $ 1,358   $ 28,182 $ 7,196 $ 212,238
     
    Six months ended June 30, 2013

    Franchise -

    Applebee's

    Franchise -

    IHOP

    Company

    Restaurants

    Rental

    Operations

    Financing

    Operations

    Total
    Revenue $ 100,956 $ 118,904 $ 32,622 $ 61,734 $ 7,067 $ 321,283
    Expense   2,932   51,398   32,454     48,804   245   135,833
    Gross segment profit 98,024 67,506 168 12,930 6,822 185,450
    Plus:
    Depreciation/amortization 5,471 1,071 6,754 13,296
    Interest charges       187     8,112     8,299
    Segment EBITDA $ 103,495 $ 67,506 $ 1,426   $ 27,796 $ 6,822 $ 207,045
     


    Restaurant Data

    The following table sets forth, for the three and six months ended June 30, 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 EndedSix Months Ended
    June 30,June 30,
    2014     20132014     2013
    (unaudited)
    Applebee's Restaurant Data
    Effective Restaurants(a)
    Franchise 1,985 2,003 1,985 2,005
    Company 23   23   23   23  
    Total 2,008   2,026   2,008   2,028  
     
    System-wide(b)
    Sales percentage change(c) 0.6 % 0.6 % (0.1 )% 0.7 %
    Domestic same-restaurant sales percentage change(d) 0.6 % 1.3 % 0.0 % 0.0 %
     
    Franchise(b)(e)
    Sales percentage change(c) 0.6 % 8.7 % (0.1 )% 8.9 %
    Domestic same-restaurant sales percentage change(d) 0.6 % 1.3 % 0.1 % 0.0 %
    Average weekly domestic unit sales (in thousands) $ 48.2 $ 47.4 $ 48.8 $ 48.3
     
    Three Months EndedSix Months Ended
    June 30,June 30,
    2014201320142013
    (unaudited)
    IHOP Restaurant Data
    Effective Restaurants(a)
    Franchise 1,448 1,410 1,444 1,409
    Area license 167 167 167 167
    Company 10   12   11   12  
    Total 1,625   1,589   1,622   1,588  
     
    System-wide(b)
    Sales percentage change(c) 6.0 % 4.3 % 6.2 % 3.3 %
    Domestic same-restaurant sales percentage change(d) 3.2 % 1.9 % 3.6 % 0.7 %
     
    Franchise(b)
    Sales percentage change(c) 6.1 % 4.3 % 6.3 % 3.3 %
    Domestic same-restaurant sales percentage change(d) 3.2 % 1.9 % 3.6 % 0.7 %
    Average weekly domestic unit sales (in thousands) $ 35.6 $ 34.4 $ 36.4 $ 34.7
     
    Area License (b)
    Sales percentage change(c) 5.8 % 4.8 % 6.9 % 4.5 %
     

    (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 six months ended June 30, 2014 and 2013 were as follows:

             
    Three Months EndedSix Months Ended
    June 30,June 30,
    2014     20132014     2013
    (In millions)

    Reported sales (unaudited)

    Applebee's franchise restaurant sales $ 1,150.7 $ 1,144.2 $ 2,333.8 $ 2,335.7
    IHOP franchise restaurant sales $ 669.5 $ 630.9 $ 1,349.8 $ 1,270.2
    IHOP area license restaurant sales $ 64.8 $ 61.3 $ 134.9 $ 126.2
     

    (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
     

    The following table summarizes our restaurant development activity:

     
    Three Months EndedSix Months Ended
    June 30,June 30,
    2014       2013   2014       2013  
    (Unaudited)

    Applebee's Restaurant Development Activity

    Summary - beginning of period:
    Franchise 1,988 2,008 1,988 2,011
    Company restaurants 23   23   23   23  
    Total Applebee's restaurants, beginning of period2,011   2,031   2,011   2,034  
    Franchise restaurants opened:
    Domestic 5 3 13 5
    International 1   1   1   1  
    Total franchise restaurants opened 6   4   14   6  
    Franchise restaurants closed:
    Domestic (5 ) (22 ) (10 ) (25 )
    International (3 ) (1 ) (6 ) (3 )
    Total franchise restaurants closed (8 ) (23 ) (16 ) (28 )
    Net franchise restaurant (reduction) development(2)(19)(2)(22)
    Summary - end of period:
    Franchise 1,986 1,989 1,986 1,989
    Company restaurants 23   23   23   23  
    Total Applebee's restaurants, end of period2,009   2,012   2,009   2,012  
     

    IHOP Restaurant Development Activity

    Summary - beginning of period:
    Franchise 1,449 1,410 1,439 1,404
    Area license 168 167 168 165
    Company 10   12   13   12  
    Total IHOP restaurants, beginning of period 1,627   1,589   1,620   1,581  
    Franchise/area license restaurants opened:
    Domestic franchise 7 7 16 15
    Domestic area license 1 1 2 3
    International franchise 5 1 9 3
    International area license   1     1  
    Total franchise/area license restaurants opened 13   10   27   22  
    Franchise/area license restaurants closed:
    Domestic franchise (6 ) (5 ) (11 ) (9 )
    Domestic area license (2 ) (2 )
    International franchise (1 )
    International area license   (1 ) (1 ) (1 )
    Total franchise/area license restaurants closed (8 ) (6 ) (15 ) (10 )
    Net franchise/area license restaurant development5   4   12   12  
    Refranchised from Company restaurants 1 1 4 1
    Franchise restaurants reacquired by the Company (1 )   (1 )  
    Net franchise/area license restaurant additions 5   5   15   13  
    Summary - end of period
    Franchise 1,455 1,414 1,455 1,414
    Area license 167 168 167 168
    Company 10   11   10   11  
    Total IHOP restaurants, end of period1,632   1,593   1,632   1,593  
     





    Investor Contact

    DineEquity, Inc.

    Ken Diptee

    Executive Director, Investor Relations

    818-637-3632

    or

    Media Contact

    Sard Verbinnen & Co.

    Stacy Roughan and Samantha Verdile

    310-201-2040 and 212-687-8080

    Source: DineEquity, Inc.


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