Significant Improvement in Domestic
System-Wide Comparable Same-Restaurant Sales
99% of Domestic Restaurants Open
Ten New Restaurants Opened by
Franchisees
Cash Position Remains Strong
Dine Brands Global, Inc. (NYSE: DIN), the parent company of
Applebee's Neighborhood Grill + Bar® and IHOP® restaurants, today
announced financial results for the second quarter of 2021.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20210805005344/en/
Historical Domestic System-Wide
Comparable Same-Restaurant Sales Relative to the Prior Year -
Quarterly Domestic Same-Restaurant Sales - Applebee's (Graphic:
Business Wire)
“Our strong second-quarter results reflect the perseverance of
the Dine Brands system as comp sales for both brands improved
significantly. I’m thankful to our teams who have worked so hard to
serve our guests and enhance the restaurant experience,” said John
Peyton, chief executive officer of Dine Brands Global, Inc.
Mr. Peyton added, “Both Applebee’s and IHOP continue to make
meaningful progress in a challenging environment. Relative to 2019,
Applebee’s posted its best quarterly comp sales performance in over
a decade. IHOP’s second-quarter comp sales improved markedly
relative to 2019. Our solid fundamentals generated significant
adjusted free cash flow and enabled us to maintain a healthy cash
position. Our business is built to win thanks to our two iconic
brands. Our franchisees are emerging from the pandemic with stable
fundamentals. I’m confident we will continue to build on this
momentum as we further accelerate innovation, while also focusing
on our guests’ needs and accelerating growth.”
Vance Chang, chief financial officer, added, “We are very
pleased with the progress we have made in the second quarter.
Looking ahead, our optimism is somewhat tempered by continued
volatility, which include labor shortages and variants of COVID-19.
We remain steadfast in executing our strategy to improve
profitability and accelerate sustainable growth.”
Domestic System-Wide Comparable Same-Restaurant Sales
Relative to the Second Quarter of 2020
Domestic Same-Restaurant Sales (Fiscal Month)
April
May
June
Q2
2021
Applebee's
237.4%
116.3%
49.2%
102.2%
IHOP
297.4%
134.6%
63.4%
120.1%
- Applebee’s year-over-year comparable same-restaurant sales
increased 102.2% for the second quarter of 2021. This compares to
an increase of 11.9% for the first quarter of 2021.
- IHOP’s comparable same-restaurant sales increased 120.1% for
the second quarter of 2021. This compares to a decrease of 0.9% for
the first quarter of 2021.
- Comparable same-restaurant sales for the second quarter of 2021
for both Applebee’s and IHOP improved sequentially from the first
quarter of 2021. Both brands outperformed their respective
categories in the second quarter of 2021, according to Black Box
Intelligence™.
Domestic System-Wide Comparable Same-Restaurant Sales
Relative to the Second Quarter of 2019
Domestic Same-Restaurant Sales (Fiscal Month)
April
May
June
Q2
2021
Applebee's
11.7%
8.1%
11.4%
10.5%
IHOP
(4.7%)
(4.8%)
(1.4%)
(3.4%)
- Applebee’s year-over-year comparable same-restaurant sales
increased 10.5% for the second quarter of 2021 compared to a
decrease of 6.2% for the first quarter of 2021. This reflects an
improvement of 16.7 percentage points.
- IHOP’s comparable same-restaurant sales decreased 3.4% for the
second quarter of 2021 compared to a decrease of 21.2% for the
first quarter of 2021. This reflects an improvement of 17.8
percentage points.
Domestic Average Weekly Sales Comparison to the Second
Quarter of 2019
Average Weekly Domestic Unit Sales (in thousands)
Q2
2021
Q2
2019
% of
Pre-Pandemic Sales Recovered
Applebee's
$53.8
$48.4
111.2%
IHOP
$36.4
$36.8
98.9%
Off-Premise Sales Growth Comparison Relative to the Second
Quarter of 2020
- Applebee’s off-premise comparable same-restaurant sales for the
second quarter of 2021 increased by 8.0%. This compares to an
increase of 122.7% for the first quarter of 2021.
- Applebee’s off-premise sales accounted for 30.3% of sales mix
for the second quarter of 2021.
- Applebee’s Carside To Go sales accounted for 17.3% of sales mix
for the second quarter of 2021 and delivery sales accounted for
13.0% of sales mix.
- IHOP’s off-premise comparable same-restaurant sales for the
second quarter of 2021 increased by 6.3%. This compares to an
increase of 123.7% for the first quarter of 2021.
- IHOP’s off-premise sales accounted for 26.1% of sales mix for
the second quarter of 2021.
- IHOP’s delivery sales accounted for 13.9% of sales mix and
take-out sales accounted for 12.2% of sales mix for the second
quarter of 2021.
Second Quarter of 2021 Summary
- GAAP earnings per diluted share of $1.69 for the second quarter
of 2021 compared to a net loss per diluted share of $8.33 for the
second quarter of 2020. This variance was primarily due to non-cash
impairment charges incurred in the second quarter of 2020 totaling
$106.5 million related to the write-downs of Applebee’s goodwill
and other intangible assets as a result of the impact of COVID-19
on the Company’s operations and higher gross profit. There were no
similar impairments in the second quarter of 2021.
- Adjusted earnings per diluted share of $1.94 for the second
quarter of 2021 compared to an adjusted net loss per diluted share
of $0.87 for the second quarter of 2020. The increase was primarily
due to higher gross profit. (See “Non-GAAP Financial Measures” and
reconciliation of GAAP earnings per diluted share to adjusted
earnings per diluted share.)
- General and administrative expenses for the second quarter of
2021 were $39.3 million compared to $30.9 million for the second
quarter of 2020. The variance was mainly due to higher incentive
compensation accrual.
- Consolidated adjusted EBITDA for the second quarter of 2021 was
$71.7 million compared to $12.1 million for the second quarter of
2020. (See “Non-GAAP Financial Measures” and reconciliation of GAAP
net income to consolidated adjusted EBITDA.)
- Development activity by Applebee’s and IHOP franchisees
resulted in the opening of 10 new restaurants.
First Six Months of 2021 Summary
- GAAP earnings per diluted share of $3.19 for the first six
months of 2021 compared to a net loss per diluted share of $6.96
for the first six months of 2020. This variance was primarily due
to non-cash impairment charges incurred in the first six months of
2020 totaling $106.5 million related to the write-downs of
Applebee’s goodwill and other intangible assets as a result of the
impact of COVID-19 on the Company’s operations and higher gross
profit. There were no similar impairments in the first six months
of 2021.
- Adjusted earnings per diluted share of $3.67 for the first six
months of 2021 compared to adjusted earnings per diluted share of
$0.61 for the first six months of 2020. The increase was primarily
due to higher gross profit. (See “Non-GAAP Financial Measures” and
reconciliation of GAAP earnings per diluted share to adjusted
earnings per diluted share.)
- General and administrative expenses for the first six months of
2021 were $79.2 million compared to $68.5 million for the first six
months of 2020. The variance was mainly due to higher incentive
compensation accrual.
- Consolidated adjusted EBITDA for the first six months of 2021
was $129.9 million. This compares to $73.8 million for the first
six months of 2020. (See “Non-GAAP Financial Measures” and
reconciliation of GAAP net income to consolidated adjusted
EBITDA.)
- Cash flows from operating activities for the first six months
of 2021 were $106.0 million. This compares to cash used in
operating activities of $10.5 million for the first six months of
2020. The increase was mainly due to an improvement in gross
profit, partially offset by an increase in general and
administrative expenses.
- The Company generated adjusted free cash flow of $107.3 million
for the first six months of 2021. This compares to negative
adjusted free cash flow of $12.4 million for the first six months
of 2020. The increase is primarily due to the improvement in cash
flows from operating activities discussed above. (See “Non-GAAP
Financial Measures” and reconciliation of the Company’s cash
provided by operating activities to adjusted free cash flow.)
- Development activity by Applebee’s and IHOP franchisees
resulted in the opening of 20 new restaurants.
Cash Position
As of June 30, 2021, the Company had $348.0 million of total
cash and cash equivalents, of which $259.5 million was unrestricted
cash. The Company believes that its asset-light business model and
cash position will continue to provide strong liquidity as the
recovery from the pandemic continues.
As of June 30, 2021, there were no outstanding borrowings under
the revolving credit facility. As of June 30, 2021, $3.3 million
was pledged against the revolving credit facility for outstanding
letters of credit.
As of June 30, 2021, the Company’s leverage ratio was 4.94x
compared to 7.02x as of March 31, 2021. As a result, quarterly
principal payments on the Company’s fixed rate senior secured notes
will no longer be required after a $3.25 million principal payment
is made in September 2021.
As of June 30, 2021, the Company’s debt service coverage ratio
was approximately 4.6x compared to 3.45x as of March 31, 2021.
The Company voluntarily reduced its interest reserve on its
fixed rate senior secured notes in the second quarter of 2021 back
to the required $16.4 million due to the strong improvement in the
Company’s business over the last 12 months.
GAAP Effective Tax Rate
The Company’s effective tax rate for the second quarter of 2021
was a 24.0% tax expense compared to an 8.2% tax benefit for the
second quarter of 2020. The Company’s effective tax rate for the
second quarter of 2021 was significantly different than the rate
for the same quarter of last year primarily due to the
non-deductible impairment of goodwill in the second quarter of
2020, which reduced the overall tax benefit generated by the
pre-tax book loss.
Financial Performance Guidance for 2021
The Company believes that its consolidated financial results for
2021 could continue to be materially impacted by COVID-19.
Considering the ongoing uncertainty of the pandemic and the
possible emergence of new variants, the Company currently cannot
provide a complete business outlook for fiscal 2021. The Company’s
guidance assumes there are no significant disruptions to its
business due to COVID-19 during the second half of fiscal 2021. The
projections are as of this date. The Company assumes no obligation
to update or supplement this information.
- The Company expects higher incentive compensation for 2021,
which is a variable component of general and administrative
expenses that will fluctuate based on business performance. As
such, the Company revises expectations for general and
administrative expenses for 2021 to range between approximately
$168 million and $178 million, including non-cash stock-based
compensation expense and depreciation of approximately $30 million.
This compares to previous expectations for general and
administrative expenses for 2021 to range between approximately
$160 million and $170 million.
- The Company reiterates capital expenditures are expected
to be approximately $19 million, inclusive of approximately $7
million related to the company restaurants segment.
Domestic System Reopening Update
As of June 30, 2021, out of 3,244 domestic restaurants, 3,222,
or 99%, were open for either dine-in service or off-premise service
comprised of take-out and delivery, and 22 were temporarily closed.
This compares to as of March 31, 2021, when out of 3,256 domestic
restaurants, 3,224, or 99%, were open for either dine-in service or
off-premise service comprised of take-out and delivery, and 32 were
temporarily closed.
Second Quarter of 2021 Earnings Conference Call
Details
Dine Brands will host a conference call to discuss its results
on August 5, 2021 at 9:00 a.m. Pacific time. To participate on the
call, please dial (833) 528-0602 and enter the conference
identification number 6786828. International callers, please dial
(830) 221-9708 and enter the conference identification number
6786828.
A live webcast of the call will be available on
www.dinebrands.com and may be accessed by visiting Events and
Presentations under the site’s Investors section. Participants
should allow approximately ten minutes prior to the call’s start
time to visit the site and download any streaming media software
needed to listen to the webcast. A telephonic replay of the call
may be accessed from 12:00 p.m. Pacific time on August 5, 2021
through 12:00 p.m. Pacific time on August 12, 2021 by dialing (855)
859-2056 and entering the conference identification number 6786828.
International callers, please dial (404) 537-3406 and enter the
conference identification number 6786828. An online archive of the
webcast will also be available on Events and Presentations under
the Investors section of the Company’s website.
About Dine Brands Global, Inc.
Based in Glendale, California, Dine Brands Global, Inc. (NYSE:
DIN), through its subsidiaries, franchises restaurants under both
the Applebee's Neighborhood Grill + Bar and IHOP brands. With
approximately 3,440 restaurants combined in 16 countries and
approximately 350 franchisees, Dine Brands is one of the largest
full-service restaurant companies in the world. For more
information on Dine Brands, visit the Company’s website located at
www.dinebrands.com.
Forward-Looking Statements
Statements contained in this press release may constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. You can identify these
forward-looking statements by words such as “may,” “will,” “would,”
“should,” “could,” “expect,” “anticipate,” “believe,” “estimate,”
“intend,” “plan,” “goal” 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: uncertainty regarding the duration
and severity of the ongoing COVID-19 pandemic and its ultimate
impact on the Company; the effectiveness of related containment
measures; general economic conditions; our level of indebtedness;
compliance with the terms of our securitized debt; our ability to
refinance our current indebtedness or obtain additional financing;
our dependence on information technology; potential cyber
incidents; the implementation of restaurant development plans; our
dependence on our franchisees; the concentration of our Applebee’s
franchised restaurants in a limited number of franchisees; the
financial health of our franchisees; our franchisees’ and other
licensees’ compliance with our quality standards and trademark
usage; general risks associated with the restaurant industry;
potential harm to our brands’ reputation; possible future
impairment charges; the effects of tax reform; trading volatility
and fluctuations in the price of our stock; our ability to achieve
the financial guidance we provide to investors; successful
implementation of our business strategy; the availability of
suitable locations for new restaurants; shortages or interruptions
in the supply or delivery of products from third parties or
availability of utilities; the management and forecasting of
appropriate inventory levels; development and implementation of
innovative marketing and use of social media; changing health or
dietary preference of consumers; risks associated with doing
business in international markets; the results of litigation and
other legal proceedings; third-party claims with respect to
intellectual property assets; our ability to attract and retain
management and other key employees; compliance with federal, state
and local governmental regulations; risks associated with our
self-insurance; natural disasters, pandemics, epidemics, or other
serious incidents; our success with development initiatives outside
of our core business; the adequacy of our internal controls over
financial reporting and future changes in accounting standards; and
other factors discussed from time to time in the Corporation’s
Annual and Quarterly Reports on Forms 10-K and 10-Q and in the
Corporation’s other filings with the Securities and Exchange
Commission. The forward-looking statements contained in this press
release are made as of the date hereof and the Corporation does not
intend to, nor does it assume any obligation to, update or
supplement any forward-looking statements after the date hereof to
reflect actual results or future events or circumstances.
Non-GAAP Financial Measures
This press release includes references to the Company's non-GAAP
financial measure “adjusted net income available to common
stockholders”, “adjusted earnings per diluted share (Adjusted
EPS)”, “Adjusted EBITDA” and “Adjusted free cash flow.” 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 gain or loss related to the
disposition of assets, and other items deemed not reflective of
current operations. This is presented on an aggregate basis and a
per share (diluted) basis. Adjusted EBITDA is computed for a given
period by deducting from net income or loss for such period the
effect of any closure and impairment charges, any interest charges,
any income tax provision or benefit, any non-cash stock-based
compensation, any depreciation and amortization, any gain or loss
related to the disposition of assets and other items deemed not
reflective of current operations. “Adjusted free cash flow” for a
given period is defined as cash provided by operating activities,
plus receipts from notes and equipment contracts receivable, less
capital expenditures. Management may use certain of these non-GAAP
financial measures along with the corresponding U.S. GAAP measures
to evaluate the performance of the business and to make certain
business decisions. Management uses adjusted free cash flow in its
periodic assessments of, among other things, the amount of cash
dividends per share of common stock and repurchases of common stock
and we believe it is important for investors to have the same
measure used by management for that purpose. Adjusted free cash
flow does not represent residual cash flow available for
discretionary purposes. Additionally, adjusted EPS is one of the
metrics used in determining payouts under the Company’s annual cash
incentive plan. Management believes that these non-GAAP financial
measures provide additional meaningful information that should be
considered when assessing the business and the Company’s
performance compared to prior periods and the marketplace. Adjusted
EPS and adjusted free cash flow 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
U.S. GAAP.
Dine Brands Global, Inc. and
Subsidiaries
Consolidated Statements of
Comprehensive Income (Loss)
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
Revenues:
Franchise revenues:
Royalties, franchise fees and other
$
94,630
$
38,781
$
174,721
$
122,095
Advertising revenues
72,324
29,095
133,209
90,818
Total franchise revenues
166,954
67,876
307,930
212,913
Company restaurant sales
38,194
16,774
74,143
48,074
Rental revenues
27,382
23,707
53,524
52,716
Financing revenues
1,089
1,355
2,221
2,893
Total revenues
233,619
109,712
437,818
316,596
Cost of revenues:
Franchise expenses:
Advertising expenses
72,324
29,095
133,209
90,818
Bad debt (credit) expense
(291
)
5,053
(2,284
)
5,571
Other franchise expenses
7,224
2,932
13,275
10,141
Total franchise expenses
79,257
37,080
144,200
106,530
Company restaurant expenses
34,759
21,139
67,643
51,471
Rental expenses:
Interest expense from finance leases
893
1,137
1,855
2,347
Other rental expenses
19,718
20,106
39,714
41,429
Total rental expenses
20,611
21,243
41,569
43,776
Financing expenses
115
128
243
270
Total cost of revenues
134,742
79,590
253,655
202,047
Gross profit
98,877
30,122
184,163
114,549
General and administrative expenses
39,276
30,870
79,187
68,478
Interest expense, net
15,739
17,127
32,235
32,299
Impairment and closure charges
2,571
124,365
4,581
124,353
Amortization of intangible assets
2,663
2,755
5,351
5,581
(Gain) loss on disposition of assets
(30
)
1,776
137
1,543
Income before income taxes
38,658
(146,771
)
62,672
(117,705
)
Income tax (provision) benefit
(9,296
)
11,992
(7,707
)
5,254
Net income (loss)
$
29,362
$
(134,779
)
$
54,965
$
(112,451
)
Net income (loss) available to common
stockholders:
Net income (loss)
$
29,362
$
(134,779
)
$
54,965
$
(112,451
)
Less: Net income allocated to unvested
participating restricted stock
(657
)
—
(1,431
)
(420
)
Net income (loss) available to common
stockholders
$
28,705
$
(134,779
)
$
53,534
$
(112,871
)
Net income (loss) available to common
stockholders per share:
Basic
$
1.70
$
(8.33
)
$
3.21
$
(6.96
)
Diluted
$
1.69
$
(8.33
)
$
3.19
$
(6.96
)
Weighted average shares
outstanding:
Basic
16,886
16,177
16,673
16,215
Diluted
16,977
16,177
16,802
16,215
Dividends declared per common
share
$
—
$
—
$
—
$
0.76
Dividends paid per common share
$
—
$0.76
$
—
$
1.45
Dine Brands Global, Inc. and
Subsidiaries
Consolidated Balance
Sheets
(In thousands, except share
and per share amounts)
June 30, 2021
December 31, 2020
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
259,461
$
383,369
Receivables, net of allowance of $10,095
(2021) and $15,057 (2020)
99,308
121,897
Restricted cash
72,137
39,884
Prepaid gift card costs
21,716
29,080
Prepaid income taxes
397
6,178
Other current assets
8,134
6,098
Total current assets
461,153
586,506
Other intangible assets, net
544,587
549,671
Operating lease right-of-use assets
331,826
346,086
Goodwill
251,628
251,628
Property and equipment, net
178,571
187,977
Long-term receivables, net of allowance of
$5,503 (2021) and $7,999 (2020)
47,839
54,512
Deferred rent receivable
53,017
56,449
Non-current restricted cash
16,400
32,800
Other non-current assets, net
10,902
9,316
Total assets
$
1,895,923
$
2,074,945
Liabilities and Stockholders’
Deficit
Current liabilities:
Current maturities of long-term debt
$
3,250
$
13,000
Accounts payable
40,126
37,424
Gift card liability
120,842
144,159
Current maturities of operating lease
obligations
70,491
69,672
Current maturities of finance lease and
financing obligations
10,954
11,293
Accrued employee compensation and
benefits
22,785
21,237
Accrued advertising
52,707
21,641
Deferred franchise revenue, short-term
7,447
7,682
Other accrued expenses
16,253
22,460
Total current liabilities
344,855
348,568
Long-term debt, net, less current
maturities
1,278,504
1,491,996
Operating lease obligations, less current
maturities
325,278
345,163
Finance lease obligations, less current
maturities
64,095
69,012
Financing obligations, less current
maturities
32,393
32,797
Deferred income taxes, net
67,780
78,293
Deferred franchise revenue, long-term
47,794
52,237
Other non-current liabilities
17,975
11,530
Total liabilities
2,178,674
2,429,596
Commitments and contingencies
Stockholders’ deficit:
Preferred stock, $1 par value, 10,000,000
shares authorized, no shares issued or outstanding
—
—
Common stock, $0.01 par value; shares:
40,000,000 authorized; June 30, 2021 - 25,011,253 issued,
17,177,950 outstanding; December 31, 2020 - 24,882,122 issued,
16,452,174 outstanding
250
249
Additional paid-in-capital
250,509
257,625
Accumulated deficit
(588
)
(55,553
)
Accumulated other comprehensive loss
(57
)
(55
)
Treasury stock, at cost; shares: June 30,
2021 - 7,833,303; December 31, 2020 - 8,429,948
(532,865
)
(556,917
)
Total stockholders’ deficit
(282,751
)
(354,651
)
Total liabilities and stockholders’
deficit
$
1,895,923
$
2,074,945
Dine Brands Global, Inc. and
Subsidiaries
Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2021
2020
Cash flows from operating
activities:
Net income (loss)
$
54,965
$
(112,451
)
Adjustments to reconcile net income (loss)
to cash flows provided by (used in) operating activities:
Non-cash impairment and closure
charges
4,514
124,343
Depreciation and amortization
19,976
21,345
Non-cash stock-based compensation
expense
5,612
6,670
Non-cash interest expense
1,427
1,318
Deferred income taxes
(10,007
)
(10,793
)
Deferred revenue
(4,678
)
(4,840
)
Loss on disposition of assets
137
1,543
Other
(3,608
)
(252
)
Changes in operating assets and
liabilities:
Accounts receivable, net
4,928
(31,039
)
Current income tax receivables and
payables
5,315
(5,456
)
Gift card receivables and payables
(3,837
)
2,293
Other current assets
(2,036
)
(2,503
)
Accounts payable
6,195
(903
)
Accrued employee compensation and
benefits
1,466
(13,336
)
Accrued advertising expenses
31,066
13,012
Other current liabilities
(5,419
)
532
Cash flows provided by (used in) operating
activities
106,016
(10,517
)
Cash flows from investing
activities:
Principal receipts from notes, equipment
contracts and other long-term receivables
9,703
10,772
Net additions to property and
equipment
(4,064
)
(7,380
)
Proceeds from sale of property and
equipment
946
456
Additions to long-term receivables
—
(1,475
)
Other
(237
)
(276
)
Cash flows provided by investing
activities
6,348
2,097
Cash flows from financing
activities:
Repayment of long-term debt
(6,500
)
—
Borrowing from revolving credit
facility
—
220,000
Repayment of revolving credit facility
(220,000
)
—
Dividends paid on common stock
—
(23,934
)
Repurchase of common stock
—
(29,853
)
Principal payments on finance lease
obligations
(5,244
)
(5,993
)
Proceeds from stock options exercised
22,511
20,523
Tax payments for restricted stock upon
vesting
(1,403
)
(2,129
)
Tax payments for share settlement of
restricted stock units
(9,783
)
(178
)
Cash flows (used in) provided by financing
activities
(220,419
)
178,436
Net change in cash, cash equivalents and
restricted cash
(108,055
)
170,016
Cash, cash equivalents and restricted cash
at beginning of period
456,053
172,475
Cash, cash equivalents and restricted cash
at end of period
$
347,998
$
342,491
Dine Brands Global, Inc. and
Subsidiaries Non-GAAP Financial Measures (In
thousands, except per share amounts) (Unaudited)
Reconciliation of net income (loss) available to common
stockholders to net income (loss) available to common stockholders,
as adjusted for the following items: Impairment and closure
charges; amortization of intangible assets; non-cash interest
expense; gain or loss on disposition of assets; and the combined
tax effect of the preceding adjustments, as well as related per
share data:
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
Net income (loss) available to common
stockholders, as reported
$
28,705
$
(134,779
)
$
53,534
$
(112,871
)
Impairment and closure charges
2,571
124,365
4,581
124,353
Amortization of intangible assets
2,663
2,755
5,351
5,581
Non-cash interest expense
715
663
1,427
1,318
(Gain) loss on disposition of assets
(30
)
1,776
137
1,543
Net income tax provision for above
adjustments
(1,598
)
(9,331
)
(3,104
)
(10,140
)
Net income allocated to unvested
participating restricted stock
(97
)
514
(219
)
88
Net income (loss) available to common
stockholders, as adjusted
$
32,929
$
(14,037
)
$
61,707
$
9,872
Diluted net income (loss) available to
common stockholders per share:
Net income (loss) available to common
stockholders per share, as reported
$
1.69
$
(8.33
)
$
3.19
$
(6.96
)
Impairment and closure charges
0.11
7.19
0.20
7.14
Amortization of intangible assets
0.11
0.13
0.23
0.26
Non-cash interest expense
0.03
0.03
0.06
0.06
(Gain) loss on disposition of assets
(0.00
)
0.08
0.01
0.07
Net income allocated to unvested
participating restricted stock
(0.01
)
0.03
(0.01
)
0.01
Rounding
0.01
—
(0.01
)
0.03
Diluted net income (loss) available to
common stockholders per share, as adjusted
$
1.94
$
(0.87
)
$
3.67
$
0.61
Numerator for basic EPS - net income
(loss) available to common stockholders, as adjusted
$
32,929
$
(14,037
)
$
61,707
$
9,872
Effect of unvested participating
restricted stock using the two-class method
3
1
12
—
Numerator for diluted EPS - net income
(loss) available to common stockholders, as adjusted
$
32,932
$
(14,036
)
$
61,719
$
9,872
Denominator for basic EPS -
weighted-average shares
16,886
16,177
16,673
16,215
Dilutive effect of stock options
91
—
129
101
Denominator for diluted EPS -
weighted-average shares
16,977
16,177
16,802
16,316
Dine Brands Global, Inc. and Subsidiaries
Non-GAAP Financial Measures (Unaudited)
Reconciliation of the Company's cash provided by operating
activities to “adjusted free cash flow” (cash provided by operating
activities, plus receipts from notes and equipment contracts
receivable, less additions to property and equipment). Management
uses this liquidity measure in its periodic assessments of, among
other things, the amount of cash dividends per share of common
stock and repurchases of common stock. We believe it is important
for investors to have the same measure used by management for that
purpose. Adjusted free cash flow does not represent residual cash
flow available for discretionary purposes.
Six Months Ended
June 30,
2021
2020
(In millions)
Cash flows provided by (used in) operating
activities
$
106.0
$
(10.5
)
Receipts from notes and equipment
contracts receivable
5.4
5.5
Net additions to property and
equipment
(4.1
)
(7.4
)
Adjusted free cash flow
107.3
(12.4
)
Dividends paid on common stock
—
(23.9
)
Repurchase of common stock
—
(29.9
)
$
107.3
$
(66.2
)
Dine Brands Global, Inc. and Subsidiaries
Non-GAAP Financial Measures (in thousands) (Unaudited)
Reconciliation of the Company's net income (loss) to “adjusted
EBITDA.” The Company defines adjusted EBITDA as net income or loss,
adjusted for the effect of impairment and closure charges, interest
charges, income tax provision or benefit, depreciation and
amortization, non-cash stock-based compensation, gain or loss on
disposition of assets, other non-income based taxes and other items
deemed not reflective of current operations. Management may use
certain non-GAAP measures along with the corresponding U.S. GAAP
measures to evaluate the performance of the Company and to make
certain business decisions.
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
Net income (loss), as reported
$
29,362
$
(134,779
)
$
54,965
$
(112,451
)
Impairment and closure charges
2,571
124,365
4,581
124,353
Interest charges on finance leases
1,383
1,646
2,847
3,369
All other interest charges
16,446
17,657
33,691
33,899
Income tax provision (benefit)
9,296
(11,992
)
7,707
(5,254
)
Depreciation and amortization
9,972
10,695
19,959
21,345
Non-cash stock-based compensation
2,517
2,632
5,614
6,670
(Gain) loss on disposition of assets
(30
)
1,776
137
1,543
Other
221
86
353
304
Adjusted EBITDA
$
71,738
$
12,086
$
129,854
$
73,778
Dine Brands Global, Inc. and Subsidiaries
Restaurant Data (Unaudited)
The following table sets forth, for the three and six months
ended June 30, 2021 and 2020, 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 and, as such, the percentage change
in sales at Effective Restaurants is based on non-GAAP sales data.
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 partially may be 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
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
Applebee's
Effective Restaurants(a)
Franchise
1,623
1,527
1,625
1,612
Company
69
67
69
68
Total
1,692
1,594
1,694
1,680
System-wide(b)
Domestic sales percentage change(c)
125.3
%
(53.5
)%
43.3
%
(32.5
)%
Domestic same-restaurant sales percentage
change(d)
102.2
%
(49.4
)%
46.4
%
(29.1
)%
Franchise(b)
Domestic sales percentage change(c)
125.2
%
(53.6
)%
43.0
%
(32.5
)%
Domestic same-restaurant sales percentage
change(d)
102.1
%
(49.4
)%
46.1
%
(29.0
)%
Average weekly domestic unit sales (in
thousands)
$
53.8
$
25.0
$
50.3
$
35.2
IHOP
Effective Restaurants(a)
Franchise
1,568
1,375
1,566
1,510
Area license
155
144
156
153
Total
1,723
1,519
1,722
1,663
System-wide(b)
Sales percentage change(c)
163.6
%
(64.3
)%
39.2
%
(39.1
)%
Domestic same-restaurant sales percentage
change, including area license restaurants(d)
120.1
%
(59.1
)%
40.7
%
(35.6
)%
Franchise(b)
Sales percentage change(c)
163.1
%
(64.4
)%
38.5
%
(39.2
)%
Domestic same-restaurant sales percentage
change(d)
118.2
%
(58.9
)%
39.4
%
(35.4
)%
Average weekly unit sales (in
thousands)
$
36.4
$
15.8
$
32.9
$
24.6
Area License (b)
Sales percentage change(c)
168.8
%
(63.3
)%
46.7
%
(38.1
)%
Dine Brands Global, Inc. and Subsidiaries
Restaurant Data (Unaudited)
(a)
“Effective Restaurants” are the
weighted average number of restaurants open in a given fiscal
period, adjusted to account for restaurants open for only a portion
of the period. Information is presented for all Effective
Restaurants in the Applebee’s and IHOP systems, which includes
restaurants owned by franchisees and area licensees as well as
those owned by the Company. Effective Restaurants do not include
units operated as ghost kitchens (small kitchens with no
store-front presence, used to fill off-premise orders).
(b)
“System-wide” sales are retail
sales at domestic 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. System-wide sales do not include
retail sales of ghost kitchens. Sales at restaurants that are owned
by franchisees and area licensees are not attributable to the
Company. An increase or decrease in franchisees' reported sales
will result in a corresponding increase or decrease in our royalty
revenue. Unaudited reported sales for Applebee's domestic franchise
restaurants, Applebee's company-operated restaurants, IHOP
franchise restaurants and IHOP area license restaurants for the
three and six months ended June 30, 2021 and 2020 were as
follows:
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
(In millions)
Reported sales
Applebee's domestic franchise restaurant
sales
$
1,062.8
$
472.0
$
1,987.5
$
1,390.2
Applebee's company-operated
restaurants
38.2
16.8
74.1
48.1
IHOP franchise restaurant sales
742.0
282.1
1,338.8
966.9
IHOP area license restaurant sales
70.9
26.4
132.6
90.4
Total
$
1,913.9
$
797.3
$
3,533.0
$
2,495.6
(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 during 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 during both fiscal periods being compared
may be different from period to period.
Dine Brands Global, Inc. and
Subsidiaries
Restaurant Data
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
Applebee's
Restaurant Development Activity
2021
2020
2021
2020
Summary - beginning of period:
Franchise
1,636
1,706
1,640
1,718
Company
69
69
69
69
Total Applebee's restaurants, beginning
of period
1,705
1,775
1,709
1,787
Franchise restaurants opened:
Domestic
—
—
2
—
International
1
—
1
—
Total franchise restaurants opened
1
—
3
—
Franchise restaurants permanently
closed:
Domestic
(6
)
(24
)
(10
)
(32
)
International
(4
)
(2
)
(6
)
(6
)
Total franchise restaurants permanently
closed
(10
)
(26
)
(16
)
(38
)
Net franchise restaurant
reduction
(9
)
(26
)
(13
)
(38
)
Summary - end of period:
Franchise
1,627
1,680
1,627
1,680
Company
69
69
69
69
Total Applebee's restaurants, end of
period
1,696
1,749
1,696
1,749
Domestic
1,590
1,633
1,590
1,633
International
106
116
106
116
IHOP Restaurant
Development Activity
Summary - beginning of period:
Franchise
1,593
1,680
1,611
1,680
Area license
156
160
158
161
Company
4
—
3
—
Total IHOP restaurants, beginning of
period
1,753
1,840
1,772
1,841
Franchise/area license restaurants
opened:
Domestic franchise
7
1
15
7
Domestic area license
1
—
1
1
International franchise
1
—
1
2
Total franchise/area license restaurants
opened
9
1
17
10
Franchise/area license restaurants
permanently closed:
Domestic franchise
(14
)
(13
)
(30
)
(19
)
Domestic area license
—
(1
)
(2
)
(3
)
International franchise
—
(2
)
(9
)
(4
)
International area license
(1
)
(2
)
(1
)
(2
)
Total franchise/area license restaurants
permanently closed
(15
)
(18
)
(42
)
(28
)
Net franchise/area license restaurant
reduction
(6
)
(17
)
(25
)
(18
)
Refranchised from Company restaurants
1
—
1
—
Franchise restaurants reacquired by the
Company
—
—
(1
)
—
Net franchise/area license restaurant
decrease
(5
)
(17
)
(25
)
(18
)
Summary - end of period
Franchise
1,588
1,666
1,588
1,666
Area license
156
157
156
157
Company
3
—
3
—
Total IHOP restaurants, end of
period
1,747
1,823
1,747
1,823
Domestic
1,654
1,696
1,654
1,696
International
93
127
93
127
The restaurant counts and activity presented above do not
include three domestic Applebee's ghost kitchens (small kitchens
with no store-front presence, used to fill off-premise orders) and
two international IHOP ghost kitchens.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210805005344/en/
Investor Contact Ken Diptee
Executive Director, Investor Relations Dine Brands Global, Inc.
818-637-3632 Ken.Diptee@dinebrands.com Media Contact Susan Nelson Vice President,
Global Communications and Public Affairs Dine Brands Global, Inc.
Susan.Nelson@dinebrands.com
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