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 |
|
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SOURCE DineEquity, Inc.
Related Links
http://www.dineequity.com
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