DineEquity, Inc. Reports Successful Fourth Quarter and Fiscal 2015 Year-Over-Year Results

Company Provides Financial Guidance for Fiscal 2016

Fourth Quarter 2015 Highlights

- Adjusted EPS (Non-GAAP) of $1.59, a 37% increase over the fourth quarter of 2014

- GAAP EPS of $1.35 compares to a net loss per share of $1.18 due to one-time items related to the securitization refinancing in the fourth quarter of 2014

- Domestic system-wide comparable same-restaurant sales increased 1.4% at IHOP and declined 2.5% at Applebee's

Fiscal 2015 Highlights

- Adjusted EPS (Non-GAAP) of $6.19, a 31% increase over fiscal 2014

- GAAP EPS of $5.52 compares to $1.90 for fiscal 2014

- Domestic system-wide comparable same-restaurant sales increased 4.5% at IHOP and increased 0.2% at Applebee's

- Generated strong free cash flow of $142 million

- Returned approximately $136 million to shareholders in share repurchases and quarterly cash dividends combined

Feb 24, 2016, 08:00 ET from DineEquity, Inc.

GLENDALE, Calif., Feb. 24, 2016 /PRNewswire/ -- DineEquity, Inc. (NYSE: DIN), the parent company of Applebee's Neighborhood Grill & Bar® and IHOP® restaurants, today announced financial results for the fourth quarter and full year of fiscal 2015. 

"Our latest fiscal year was highlighted by several notable achievements.  We reported significant growth in adjusted earnings per diluted share, implemented strategic initiatives to accelerate growth across both brands and substantially expanded the international pipeline for longer term restaurant development," said Julia A. Stewart, Chairman and Chief Executive Officer of DineEquity, Inc.

Ms. Stewart concluded, "We are building on our foundational accomplishments in 2015 and taking bolder steps to improve performance.  DineEquity and its franchisees are making significant investments in important initiatives to drive sales and traffic at both brands."   

Fourth Quarter of Fiscal 2015 Financial Highlights

  • Adjusted net income available to common stockholders was $29.5 million, or adjusted earnings per diluted share of $1.59, for the fourth quarter of 2015.  This compares to $21.9 million, or adjusted earnings per diluted share of $1.16, for the same period of 2014.  The increase in adjusted net income was mainly due to higher gross profit, including the positive effect of the 53rd calendar week in fiscal 2015. The increase was partially offset by higher income taxes.  (See "Non-GAAP Financial Measures" below.)
  • GAAP net income available to common stockholders was $25.0 million for the fourth quarter of 2015, or earnings per diluted share of $1.35.  This compares to a GAAP net loss available to common stockholders of $22.1 million, or a net loss per share of $1.18, for the fourth quarter of 2014.  The increase was mainly due to a loss on the extinguishment of debt in the fourth quarter of 2014 that did not recur in the fourth quarter of 2015, higher gross profit, including the positive effect of the 53rd calendar week in fiscal 2015, and a decline in interest expense.  The increase was partially offset by higher income tax expense.    

Fiscal 2015 Financial Highlights

  • Adjusted net income available to common stockholders was $116.1 million, or adjusted earnings per diluted share of $6.19, for fiscal 2015.  This compares to $89.6 million, or adjusted earnings per diluted share of $4.73, for fiscal 2014.  The increase in adjusted net income was primarily due to a significant decline in cash interest expense and higher gross profit, including the positive effect of the 53rd calendar week in fiscal 2015.  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 $103.5 million for fiscal 2015, or earnings per diluted share of $5.52. This compares to net income available to common stockholders of $35.9 million, or earnings per diluted share of $1.90, for fiscal 2014.  The increase was primarily due to a loss on the extinguishment of debt in the fourth quarter of 2014 that did not recur in the fourth quarter of 2015, a significant decline in interest expense and higher gross profit, including the positive effect of the 53rd calendar week in fiscal 2015. The increase was partially offset by higher income tax expense and an increase in general and administrative expenses.  The increase in general and administrative expenses was primarily due to $5.9 million of costs associated with the strategic consolidation of our restaurant support center announced on September 3, 2015.      
  • In fiscal 2015, cash flows from operating activities were $135.5 million compared to $118.5 million in fiscal 2014.  Free cash flow was $142.3 million compared to $120.9 million in fiscal 2014.  The increase in cash flows from operating activities was mainly due to lower interest expense, higher gross profit and a favorable swing in working capital primarily resulting from the timing of collections of gift card receivables due to the 53rd calendar week in fiscal 2015.  (See "Non-GAAP Financial Measures" below.)

Same-Restaurant Sales Performance

Fourth Quarter of Fiscal 2015

  • IHOP's domestic system-wide comparable same restaurant sales increased 1.4% for the fourth quarter of 2015. 
  • Applebee's domestic system-wide comparable same-restaurant sales declined 2.5% for the fourth quarter of 2015.

Fiscal 2015

  • IHOP's domestic system-wide comparable same restaurant sales increased 4.5% for fiscal 2015. 
  • Applebee's domestic system-wide comparable same-restaurant sales increased 0.2% for fiscal 2015.

Financial Performance Guidance for Fiscal 2016

  • Applebee's domestic system-wide same-restaurant sales performance is expected to range between negative 2.0% and positive 2.0%. 
  • IHOP's domestic system-wide same-restaurant sales performance is expected to range between positive 1.0% and positive 4.0%.
  • Applebee's franchisees are projected to develop between 35 and 45 new restaurants, the majority of which are expected to be domestic openings.
  • IHOP franchisees and its area licensee are projected to develop between 60 and 70 restaurants, the majority of which are expected to be domestic openings.
  • Franchise segment profit is expected to be between $345 million and $360 million.
  • Rental and Financing segments are expected to generate roughly $40 million in combined profit.
  • General and administrative expenses are expected to range between $154 million and $158 million, including non-cash stock-based compensation expense and depreciation of approximately $20 million.  This amount includes approximately $4 million of non-recurring costs related to our restaurant support center consolidation.
  • Interest expense is expected to be approximately $62 million. Approximately $3 million is projected to be non-cash interest expense.
  • Weighted average diluted shares outstanding are expected to be approximately 18.5 million shares.
  • The income tax rate is expected to be approximately 37%.
  • Cash flow provided by operating activities is expected to range between $115 million and $125 million
  • Capital expenditures are projected to be roughly $8 million.
  • Free cash flow (See "Non-GAAP Financial Measures" below) is projected to range between $116 million and $126 million.  Our guidance reflects non-recurring tax payments totaling approximately $10 million related to deferred gains from the repurchase of our debt, primarily in 2008 and 2009, approximately $6 million in cash payments related to our restaurant support center consolidation and the impact of fiscal 2016 containing 52 weeks compared to 53 weeks in fiscal 2015, taking into account the effects to working capital, including gift card receivables.

2016 Financial Performance Guidance Table

(In millions)

Cash flows from operations

$115 - 125

Approximate net receipts from notes and equipment contracts receivable

9

Approximate capital expenditures

(8)

Free cash flow

$116 - 126

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 (888) 771-4371 and reference passcode 41776827. International callers, please dial (847) 585-4405 and reference passcode 41776827.

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 February 24, 2016 through 8:59 p.m. Pacific Time on March 2, 2016 by dialing (888) 843-7419 and referencing passcode 41776827#. International callers, please dial (630) 652-3042 and reference passcode 41776827#. 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 restaurants under the Applebee's Neighborhood Grill & Bar brand and franchises and operates restaurants under the IHOP brand. With more than 3,600 restaurants combined in 20 countries, and nearly 400 franchisees, DineEquity is one of the largest full-service restaurant companies in the world. For more information on DineEquity, visit 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.  "Free cash flow" for a given period is defined as cash provided by operating activities, plus 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

Twelve Months Ended

December 31,

December 31,

2015

2014

2015

2014

Revenues:

Franchise and restaurant revenues

$

134,832

$

131,006

$

542,606

$

518,579

Rental revenues

33,895

30,709

127,650

122,932

Financing revenues

2,573

2,698

10,844

13,477

Total revenues

171,300

164,413

681,100

654,988

Cost of revenues:

Franchise and restaurant expenses

41,553

49,008

186,986

184,411

Rental expenses

24,515

23,464

94,588

94,637

Financing expenses

4

520

825

Total cost of revenues

66,072

72,472

282,094

279,873

Gross profit

105,228

91,941

399,006

375,115

General and administrative expenses

45,044

43,074

155,428

145,910

Interest expense

16,497

21,742

63,254

96,637

Amortization of intangible assets

2,500

2,851

10,000

12,063

Closure and impairment charges

346

2,692

2,576

3,721

Loss on extinguishment of debt

64,846

64,859

Loss (gain) on disposition of assets

1,393

(263)

(901)

329

Income (loss) before income taxes

39,448

(43,001)

168,649

51,596

Income tax (provision) benefit

(14,091)

20,576

(63,726)

(15,143)

Net income (loss)

$

25,357

$

(22,425)

$

104,923

$

36,453

Net income (loss) available to common stockholders:

Net income (loss)

$

25,357

$

(22,425)

$

104,923

$

36,453

Less: Net (income) loss allocated to unvested participating restricted stock

(357)

318

(1,400)

(521)

Net income (loss) available to common stockholders

$

25,000

$

(22,107)

$

103,523

$

35,932

Net income (loss) available to common stockholders per share:

Basic

$

1.36

$

(1.18)

$

5.55

$

1.92

Diluted

$

1.35

$

(1.18)

$

5.52

$

1.90

Weighted average shares outstanding:

Basic

18,358

18,741

18,637

18,753

Diluted

18,475

18,741

18,768

18,956

Dividends declared per common share

$

0.92

$

0.875

$

3.545

$

3.125

Dividends paid per common share

$

0.875

$

$

3.50

$

2.25

 

DineEquity, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

December 31,

2015

2014

Assets

Current assets:

Cash and cash equivalents

$

144,785

$

104,004

Receivables, net

139,206

153,498

Restricted cash

32,528

52,262

Prepaid gift card costs

46,792

51,268

Prepaid income taxes

5,186

11,753

Other current assets

4,212

9,239

Total current assets

372,709

382,024

Long-term receivables, net

160,695

180,856

Property and equipment, net

219,580

241,229

Goodwill

697,470

697,470

Other intangible assets, net

772,949

782,336

Deferred rent receivable

90,030

91,117

Other non-current assets, net

18,417

18,704

Total assets

$

2,331,850

$

2,393,736

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

55,019

$

41,771

Gift card liability

167,657

179,760

Accrued employee compensation and benefits

25,085

25,722

Dividends payable

17,082

16,635

Current maturities of capital lease and financing obligations

14,320

14,852

Accrued advertising

8,758

10,150

Accrued interest payable

4,257

14,126

Other accrued expenses

6,251

10,033

Total current liabilities

298,429

313,049

Long-term debt, net

1,279,473

1,276,488

Capital lease obligations, less current maturities

84,781

98,119

Financing obligations, less current maturities

42,395

42,524

Deferred income taxes, net

269,469

288,251

Deferred rent payable

69,397

75,375

Other non-current liabilities

20,683

20,857

Total liabilities

2,064,627

2,114,663

Commitments and contingencies

Stockholders' equity:

Common stock, $0.01 par value, shares: 40,000,000 authorized; 2015 - 25,186,048 issued, 18,535,027 outstanding; 2014 - 25,240,055 issued, 18,953,567 outstanding

252

252

Additional paid-in-capital

286,952

279,946

Retained earnings

351,923

313,644

Accumulated other comprehensive loss

(107)

(73)

Treasury stock, at cost; shares: 2015 - 6,651,021; 2014 - 6,286,488

(371,797)

(314,696)

Total stockholders' equity

267,223

279,073

Total liabilities and stockholders' equity

$

2,331,850

$

2,393,736

 

DineEquity, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

Twelve Months Ended

December 31,

2015

2014

Cash flows from operating activities:

Net income

$

104,923

$

36,453

Adjustments to reconcile net income to cash flows provided by operating activities:

Depreciation and amortization

32,840

34,745

Non-cash interest expense

3,074

5,770

Loss on extinguishment of debt

64,859

Closure and impairment charges

2,576

3,687

Deferred income taxes

(17,408)

(30,236)

Non-cash stock-based compensation expense

8,892

9,319

Tax benefit from stock-based compensation

4,862

4,316

Excess tax benefit from stock-based compensation

(4,794)

(5,028)

(Gain) loss on disposition of assets

(901)

329

Other

(6,323)

(3,344)

Changes in operating assets and liabilities:

Accounts receivable, net

(5,239)

(7,326)

Current income tax receivables and payables

5,494

(5,868)

Gift card receivables and payables

21,735

3,555

Prepaid expenses and other current assets

(1,995)

273

Accounts payable

4,546

2,778

Accrued employee compensation and benefits

(594)

767

Accrued interest payable

(9,869)

551

Other current liabilities

(6,310)

2,924

Cash flows provided by operating activities

135,509

118,524

Cash flows from investing activities:

Principal receipts from notes, equipment contracts and other long-term receivables

21,328

15,284

Proceeds from sale of property and equipment

10,782

681

Additions to property and equipment

(6,642)

(5,937)

Other

(267)

540

Cash flows provided by investing activities

25,201

10,568

Cash flows from financing activities:

Repurchase of DineEquity common stock

(70,014)

(32,006)

Dividends paid on common stock

(66,164)

(42,733)

Principal payments on capital lease and financing obligations

(14,226)

(11,825)

Proceeds from issuance of long-term debt

1,300,000

Repayment of long-term debt (including premiums)

(1,264,086)

Change in restricted cash

19,733

(66,298)

Payment of  debt issuance and debt modification costs

(89)

(24,192)

Proceeds from stock options exercised

9,536

8,207

Tax payments for restricted stock upon vesting

(3,499)

(3,194)

Excess tax benefit from share-based compensation

4,794

5,028

Cash flows used in financing activities

(119,929)

(131,099)

Net change in cash and cash equivalents

40,781

(2,007)

Cash and cash equivalents at beginning of period

104,004

106,011

Cash and cash equivalents at end of period

$

144,785

$

104,004

 

NON-GAAP FINANCIAL MEASURES

(In thousands, except per share amounts)

(Unaudited)

Reconciliation of net income available to common stockholders to net income available to common stockholders, as adjusted for the following items: Kansas City Support Center consolidation costs; amortization of intangible assets; closure and impairment charges; non-cash interest expense; gain or loss on disposition of assets; loss on extinguishment of debt; incremental Senior Note interest; refinancing expenses not capitalized; the combined tax effect of the preceding adjustments, and income tax adjustments considered unrelated to the respective current period operations, as well as related per share data:

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2015

2014

2015

2014

Net income (loss) available to common stockholders, as reported

$

25,000

$

(22,107)

$

103,523

$

35,932

Kansas City Support Center consolidation costs

2,266

5,861

Amortization of intangible assets

2,500

2,851

10,000

12,063

Closure and impairment charges

346

2,692

2,576

3,721

Non-cash interest expense

782

749

3,074

5,770

Loss (gain) on disposition of assets

1,393

(263)

(901)

329

Loss on extinguishment of debt

64,846

64,859

Senior Note interest(1)

6,023

6,023

Refinancing expenses not capitalized(2)

178

178

Net income tax provision for above adjustments

(2,769)

(29,292)

(7,832)

(35,317)

Income tax adjustments(3)

(3,118)

(3,118)

Net income allocated to unvested participating restricted stock

(62)

(618)

(171)

(862)

Net income available to common stockholders, as adjusted

$

29,456

$

21,941

$

116,130

$

89,578

Diluted net income available to common stockholders per share:

Net income (loss) available to common stockholders, as reported

$

1.35

$

(1.18)

$

5.52

$

1.90

Kansas City Support Center consolidation costs

0.08

0.19

Amortization of intangible assets

0.08

0.09

0.33

0.40

Closure and impairment charges

0.01

0.09

0.09

0.12

Non-cash interest expense

0.03

0.02

0.10

0.19

Loss (gain) on disposition of assets

0.05

(0.01)

(0.03)

0.01

Loss on extinguishment of debt

2.12

2.12

Senior Note interest(1)

0.20

0.20

Refinancing expenses not capitalized(2)

0.01

0.01

Income tax adjustments(3)

(0.16)

(0.16)

Net income allocated to unvested participating restricted stock

(0.00)

(0.03)

(0.01)

(0.05)

Rounding

(0.01)

0.01

(0.01)

Diluted net income available to common stockholders per share, as adjusted

$

1.59

$

1.16

$

6.19

$

4.73

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

$

29,456

$

21,941

$

116,130

$

89,578

Effect of unvested participating restricted stock using the two-class method

1

1

6

5

Numerator for diluted EPS-income available to common stockholders after assumed conversions, as adjusted

$

29,457

$

21,942

$

116,136

$

89,583

Denominator for basic EPS-weighted-average shares

18,358

18,741

18,637

18,753

Effect of dilutive securities:

Stock options

117

199

131

203

Denominator for diluted EPS-weighted-average shares and assumed conversions

18,475

18,940

18,768

18,956

(1) Represents interest paid on Senior Notes between September 30, 2014 (issuance date of Class A-2 Notes) and October 30, 2014 (retirement date of Senior Notes).

(2) Costs indirectly associated with issuance of Class A-2 Notes unable to be capitalized as debt issuance costs in accordance with U.S.    GAAP.

(3) Tax benefits from research and experimentation credits and domestic production activity deductions related to tax years 2011-2013

 

DineEquity, Inc. and Subsidiaries

Non-GAAP Financial Measures

(In thousands)

(Unaudited)

Reconciliation of the Company's cash provided by operating activities to "free cash flow" (cash provided by operating activities, plus receipts from notes and equipment contract receivables, 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.

Twelve Months Ended

December 31,

2015

2014

Cash flows provided by operating activities

$

135,509

$

118,524

Net receipts from notes and equipment contract receivables

13,403

8,287

Additions to property and equipment

(6,642)

(5,937)

Free cash flow

142,270

120,874

 

DineEquity, Inc. and Subsidiaries

Non-GAAP Financial Measures

(In millions)

(Unaudited)

Reconciliation of U.S. GAAP gross profit to segment EBITDA:

Three months ended December 31, 2015

Franchise - Applebee's

Franchise - IHOP

Company Restaurants

Rental Operations

Financing Operations

Total

Revenue

$

51,367

$

78,463

$

5,002

$

33,895

$

2,573

$

171,300

Expense

860

35,256

5,437

24,515

4

66,072

Gross profit

50,507

43,207

(435)

9,380

2,569

105,228

Plus:

Depreciation/amortization

2,572

85

3,229

5,886

Interest charges

103

3,374

3,477

Segment EBITDA

$

53,079

$

43,207

$

(247)

$

15,983

$

2,569

$

114,591

Three months ended December 31, 2014

Franchise - Applebee's

Franchise - IHOP

Company Restaurants

Rental Operations

Financing Operations

Total

Revenue

$

47,028

$

68,531

$

15,447

$

30,709

$

2,698

$

164,413

Expense

1,440

32,130

15,438

23,464

72,472

Gross profit

45,588

36,401

9

7,245

2,698

91,941

Plus:

Depreciation/amortization

2,598

537

3,245

6,380

Interest charges

97

3,528

3,625

Segment EBITDA

$

48,186

$

36,401

$

643

$

14,018

$

2,698

$

101,946

Twelve months ended December 31, 2015

Franchise - Applebee's

Franchise - IHOP

Company Restaurants

Rental Operations

Financing Operations

Total

Revenue

$

202,274

$

292,427

$

47,905

$

127,650

$

10,844

$

681,100

Expense

5,545

133,447

47,994

94,588

520

282,094

Gross profit

196,729

158,980

(89)

33,062

10,324

399,006

Plus:

Depreciation/amortization

10,365

578

12,849

23,792

Interest charges

396

13,524

13,920

Segment EBITDA

$

207,094

$

158,980

$

885

$

59,435

$

10,324

$

436,718

Twelve months ended December 31, 2014

Franchise - Applebee's

Franchise - IHOP

Company Restaurants

Rental Operations

Financing Operations

Total

Revenue

$

195,600

$

260,525

$

62,454

$

122,932

$

13,477

$

654,988

Expense

5,239

116,554

62,618

94,637

825

279,873

Gross profit

190,361

143,971

(164)

28,295

12,652

375,115

Plus:

Depreciation/amortization

10,421

2,092

13,184

25,697

Interest charges

393

14,716

15,109

Segment EBITDA

$

200,782

$

143,971

$

2,321

$

56,195

$

12,652

$

415,921

 

Restaurant Data

The following table sets forth, for the three and twelve months ended December 31, 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

Twelve Months Ended

December 31,

December 31,

2015

2014

2015

2014

(unaudited)

Applebee's Restaurant Data

Effective Restaurants(a)

Franchise

2,020

1,988

2,004

1,986

Company

23

13

23

Total

2,020

2,011

2,017

2,009

System-wide(b)

Sales percentage change(c)

7.7

%

3.4

%

3.4

%

1.3

%

Domestic same-restaurant sales percentage change(d)

(2.5)%

2.8

%

0.2

%

1.1

%

Franchise(b)(e)

Sales percentage change(c)

8.8

%

3.3

%

3.9

%

1.4

%

Domestic same-restaurant sales percentage change(d)

(2.5)%

2.7

%

0.2

%

1.1

%

Average weekly domestic unit sales (in thousands)

$

45.7

$

45.9

$

47.8

$

47.4

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2015

2014

2015

2014

(unaudited)

IHOP Restaurant Data

Effective Restaurants(a)

Franchise

1,498

1,467

1,481

1,454

Area license

165

167

166

167

Company

11

11

12

11

Total

1,674

1,645

1,659

1,632

System-wide(b)

Sales percentage change(c)

11.9

%

8.6

%

8.1

%

6.6

%

Domestic same-restaurant sales percentage change(d)

1.4

%

6.1

%

4.5

%

3.9

%

Franchise(b)

Sales percentage change(c)

12.9

%

8.8

%

8.2

%

6.7

%

Domestic same-restaurant sales percentage change(d)

1.4

%

6.1

%

4.5

%

3.9

%

Average weekly domestic unit sales (in thousands)

$

37.5

$

36.6

$

37.6

$

36.0

Area License (b)

Sales percentage change(c)

2.2

%

7.3

%

5.9

%

6.3

%

(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 twelve months ended December 31, 2015 and 2014 were as follows:

 

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2015

2014

2015

2014

(In millions)

Reported sales (unaudited)

Applebee's franchise restaurant sales

$

1,198.1

$

1,100.9

$

4,711.9

$

4,535.1

IHOP franchise restaurant sales

787.4

697.6

2,948.3

2,725.7

IHOP area license restaurant sales

66.7

66.0

280.9

265.2

Total

$

2,052.2

$

1,864.5

$

7,941.1

$

7,526.0

(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. The sales percentage change for the three and twelve months ended December 31, 2015 was impacted by a 14th and 53rd calender week, respectively, in the fiscal 2015 periods.

(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 2015 sales percentage change for Applebee's franchise restaurants was impacted by the refranchising of 23 company-operated restaurants during 2015. The 2013 sales percentage change for Applebee's franchise restaurants was impacted by the refranchising of 154 company-operated restaurants during 2012.

 

DineEquity, Inc. and Subsidiaries

Restaurant Data (unaudited)

The following table summarizes our restaurant development activity:

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2015

2014

2015

2014

Applebee's Restaurant Development Activity

Summary - beginning of period:

Franchise

2,018

1,987

1,994

1,988

Company

23

23

23

Total Applebee's restaurants, beginning of period

2,018

2,010

2,017

2,011

Franchise restaurants opened:

Domestic

10

9

27

29

International

11

3

17

7

Total franchise restaurants opened

21

12

44

36

Franchise restaurants closed:

Domestic

(5)

(3)

(19)

(20)

International

(1)

(2)

(9)

(10)

Total  franchise restaurants closed

(6)

(5)

(28)

(30)

Net franchise restaurant development

15

7

16

6

Refranchised from Company restaurants

23

Net franchise restaurant increase

15

7

39

6

Summary - end of period:

Franchise

2,033

1,994

2,033

1,994

Company

23

23

Total Applebee's restaurants, end of period

2,033

2,017

2,033

2,017

IHOP Restaurant Development Activity

Summary - beginning of period:

Franchise

1,490

1,466

1,472

1,439

Area license

166

168

167

168

Company

11

10

11

13

Total IHOP restaurants, beginning of period

1,667

1,644

1,650

1,620

Franchise/area license restaurants opened:

Domestic franchise

20

7

44

34

Domestic area license

1

1

3

4

International franchise

3

3

8

18

International area license

Total franchise/area license restaurants opened

24

11

55

56

Franchise/area license restaurants closed:

Domestic franchise

(6)

(3)

(17)

(19)

Domestic area license

(2)

(2)

(5)

(4)

International franchise

(2)

International area license

(1)

Total franchise/area license restaurants closed

(8)

(5)

(22)

(26)

Net franchise/area license restaurant development

16

6

33

30

Refranchised from Company restaurants

3

4

Franchise restaurants reacquired by the Company

(1)

(3)

(2)

Net franchise/area license restaurant additions

16

5

33

32

Summary - end of period

Franchise

1,507

1,472

1,507

1,472

Area license

165

167

165

167

Company

11

11

11

11

Total IHOP restaurants, end of period

1,683

1,650

1,683

1,650

Logo - http://photos.prnewswire.com/prnh/20150713/235418LOGO

 

SOURCE DineEquity, Inc.



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