Applebee’s and IHOP Achieve Positive
Comparable Sales; Average Weekly Sales Exceed Q2 2019
Company Reaffirms 2022 Financial Performance
Guidance
Company Repurchased 912,992 Shares and
Returned $61 Million to Shareholders
Applebee’s and IHOP Franchisees Opened 14
New Restaurants
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 fiscal
2022.
“Thanks to the hard work of our team members and franchisees,
Dine delivered a solid performance in the second quarter. Sustained
off-premise traffic and continued recovery of dine-in contributed
to positive comparable restaurant sales, driving average weekly
sales at both brands above pre-pandemic levels,” said John Peyton,
chief executive officer of Dine Brands Global, Inc. “While the
backdrop we are all operating in remains challenging, I’m confident
we are well positioned for the current environment and for the
long-term. Applebee’s and IHOP are both value leaders in their
categories with long track records of executing enhanced value and
marketing propositions that meet guests where they are.”
Vance Chang, chief financial officer, added, “We remain
cautiously optimistic about Dine’s near-term outlook and are
reaffirming our 2022 guidance. Our strong balance sheet and
asset-light model protect us in this volatile and inflationary
environment, as we continue to return capital to shareholders. Our
focus on delivering long term restaurant profitability continues,
which we believe remains a key driver to our franchisee’s ongoing
investments in growth.”
Domestic Restaurant Sales for the Second Quarter of
2022
- Applebee’s year-over-year comparable same-restaurant sales
increased 1.8% for the second quarter of 2022. Off-premise sales
accounted for 25.6% of sales mix, representing average weekly sales
of approximately $13,900.
- IHOP’s year-over-year comparable same-restaurant sales
increased 3.6% for the second quarter of 2022. Off-premise sales
accounted for 21.3% of sales mix, representing average weekly sales
of approximately $8,300.
Second Quarter of 2022 Summary
- Total revenues for the second quarter of 2022 were $237.8
million compared to $233.6 million for the second quarter of 2021.
The increase was primarily due to positive comparable same
restaurant sales growth at both brands.
- Consolidated adjusted EBITDA for the second quarter of 2022 was
$66.1 million compared to $71.7 million for the second quarter of
2021. The decrease was primarily due to G&A investments as well
as the impact from inflation on our company restaurant operations.
(See “Non-GAAP Financial Measures” and reconciliation of GAAP net
income to consolidated adjusted EBITDA.)
- General and administrative expenses for the second quarter of
2022 were $44.1 million compared to $39.3 million for the second
quarter of 2021. The variance was primarily due to strategic growth
investments as well as higher personnel-related costs and
travel-related costs to support franchisees, associated with the
return to normal operations.
- GAAP earnings per diluted share of $1.45 for the second quarter
of 2022 compared to earnings per diluted share of $1.69 for the
second quarter of 2021. The variance was primarily due to an
increase in general and administrative expenses and a decrease in
gross profit, partially offset by a decrease in closure and
impairment charges.
- Adjusted earnings per diluted share of $1.65 for the second
quarter of 2022 compared to adjusted earnings per diluted share of
$1.94 for the second quarter of 2021. The variance was primarily
due to an increase in general and administrative expenses and a
decrease in gross profit, partially offset by lower income tax
expense. (See “Non-GAAP Financial Measures” and reconciliation of
GAAP earnings per diluted share to adjusted earnings per diluted
share.)
- Development activity by Applebee’s and IHOP franchisees for the
second quarter of 2022 resulted in the opening of 14 new
restaurants and the closure of 8 restaurants.
First Six Months of 2022 Summary
- Total revenues for the first six months of 2022 were $468.2
million compared to $437.8 million for the first six months of
2021. The increase was primarily due to strong comparable same
restaurant sales growth at both brands.
- Consolidated adjusted EBITDA for the first six months of 2022
was $131.3 million. This compares to $129.9 million for the first
six months of 2021. The increase was primarily due to strong
comparable same restaurant sales growth at both brands offset by
strategic growth investments as well as higher expenses associated
with return to normal operations. (See “Non-GAAP Financial
Measures” and reconciliation of GAAP net income to consolidated
adjusted EBITDA.)
- General and administrative expenses for the first six months of
2022 were $85.6 million compared to $79.2 million for the first six
months of 2021. The variance was primarily due to strategic growth
investments as well as higher personnel-related costs and
travel-related costs to support franchisees, associated with the
return to normal operations.
- GAAP earnings per diluted share of $2.90 for the first six
months of 2022 compared to earnings per diluted share of $3.19 for
the first six months of 2021. The variance was primarily due to
higher income tax expense and an increase in general and
administrative expenses, partially offset by an increase in gross
profit and a decrease in closure and impairment charges.
- Adjusted earnings per diluted share of $3.19 for the first six
months of 2022 compared to adjusted earnings per diluted share of
$3.67 for the first six months of 2021. The variance was primarily
due to higher income tax expense and an increase in general and
administrative expenses, partially offset by an increase in gross
profit and lower interest expense. See “Non-GAAP Financial
Measures” and reconciliation of GAAP earnings per diluted share to
adjusted earnings per diluted share.)
- Cash flows from operating activities for the first six months
of 2022 were $29.9 million. This compares to cash provided from
operating activities of $106.0 million for the first six months of
2021. The decline was primarily due to the change in working
capital, reflecting the one-time collection of franchisee deferrals
in the first six months of 2021, payments made in the first six
months of 2022 related to higher incentive compensation earned in
2021 and the timing of marketing disbursements.
- The Company had adjusted free cash flow of $23.1 million for
the first six months of 2022. This compares to adjusted free cash
flow of $107.3 million for the first six months of 2021. (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 for the
first six months of 2022 resulted in the opening of 25 new
restaurants and the closure of 19 restaurants.
Key Balance Sheet Metrics (as of June 30, 2022)
- Total cash, cash equivalents and restricted cash of $329.7
million, of which $263.5 million was unrestricted cash.
- Leverage ratio of 4.27x compared to 4.05x as of March 31,
2022.
- Debt service coverage ratio was approximately 4.3x compared to
approximately 4.6x as of March 31, 2022.
- Capacity under the revolving credit facility of $221.5 million
available, with no outstanding borrowings and $3.5 million
pledged.
GAAP Effective Tax Rate
The Company’s effective tax rate for the second quarter of 2022
was 26.3% compared to 24.0% for second quarter of 2021. The
variance was primarily due to the decrease of unrecognized tax
benefits resulting from the closing of a state audit in the second
quarter of 2021.
Capital Return to Shareholders
The Company repurchased 912,992 shares of its common stock in
the second quarter of 2022 for a total of approximately $61
million.
On May 12, 2022, the Company announced that its Board of
Directors declared and approved a 11% increase in the quarterly
cash dividend to $0.51 per share of common stock. The dividend was
paid on July 8, 2022, to the Company’s stockholders of record at
the close of business on June 20, 2022.
Financial Performance Guidance for 2022
The Company reiterates its fiscal 2022 guidance:
- Domestic development activity by Applebee’s franchisees to
result in between 5 and 15 net fewer restaurants.
- Domestic development activity by IHOP franchisees and area
licensees to result in net new openings between 50 and 65
restaurants.
- Consolidated adjusted EBITDA to range between approximately
$235 million and $250 million. This range is inclusive of adjusted
EBITDA related to the company restaurants segment.
- General and administrative expenses to range between
approximately $188 million and $198 million, including non-cash
stock-based compensation expense and depreciation of approximately
$30 million. This range reflects incremental investments in
technology and operational initiatives as well as unit development
and is inclusive of general and administrative expenses related to
the company restaurants segment.
- Capital expenditures to range between $33 million and $38
million, reflecting incremental investments in the business to
support sustainable growth.
Second Quarter of 2022 Earnings Conference Call
Details
Dine Brands will host a conference call to discuss its results
on August 9, 2022 at 9:00 a.m. Eastern time. To access the call,
please go to this link
(https://register.vevent.com/register/BIc88b05e3032041849605213f69a1b860),
and you will be provided with dial in details. A replay of the
webcast will also be available for a limited time at
https://investors.dinebrands.com/investor-overview
A live webcast of the call will be available on
https://investors.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. 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
Applebee's Neighborhood Grill + Bar® and IHOP® brands. With over
3,400 restaurants combined in 16 countries and 338 franchisees as
of December 31, 2021, 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, including the impact of
inflation; 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
(In thousands, except per
share amount)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Revenues:
Franchise revenues:
Royalties, franchise fees and other
$
94,148
$
94,630
$
184,497
$
174,721
Advertising revenues
74,111
72,324
144,994
133,209
Total franchise revenues
168,259
166,954
329,491
307,930
Company restaurant sales
39,511
38,194
78,927
74,143
Rental revenues
29,066
27,382
57,873
53,524
Financing revenues
958
1,089
1,926
2,221
Total revenues
237,794
233,619
468,217
437,818
Cost of revenues:
Franchise expenses:
Advertising expenses
74,111
72,324
144,994
133,209
Bad debt credit
(147
)
(291
)
(446
)
(2,284
)
Other franchise expenses
8,305
7,224
15,753
13,275
Total franchise expenses
82,269
79,257
160,301
144,200
Company restaurant expenses
37,881
34,759
75,289
67,643
Rental expenses:
Interest expense from finance leases
746
893
1,514
1,855
Other rental expenses
21,097
19,718
42,452
39,714
Total rental expenses
21,843
20,611
43,966
41,569
Financing expenses
106
115
213
243
Total cost of revenues
142,099
134,742
279,769
253,655
Gross profit
95,695
98,877
188,448
184,163
General and administrative expenses
44,063
39,276
85,611
79,187
Interest expense, net
15,359
15,739
30,892
32,235
Closure and impairment charges
1,311
2,571
1,457
4,581
Amortization of intangible assets
2,665
2,663
5,330
5,351
(Gain) loss on disposition of assets
(234
)
(30
)
(1,530
)
137
Income before income taxes
32,531
38,658
66,688
62,672
Income tax provision
(8,569
)
(9,296
)
(17,876
)
(7,707
)
Net income
$
23,962
$
29,362
$
48,812
$
54,965
Net income available to common
stockholders:
Net income
$
23,962
$
29,362
$
48,812
$
54,965
Less: Net income allocated to unvested
participating restricted stock
(673
)
(657
)
(1,273
)
(1,431
)
Net income available to common
stockholders
$
23,289
$
28,705
$
47,539
$
53,534
Net income available to common
stockholders per share:
Basic
$
1.45
$
1.70
$
2.90
$
3.21
Diluted
$
1.45
$
1.69
$
2.90
$
3.19
Weighted average shares
outstanding:
Basic
16,050
16,886
16,386
16,673
Diluted
16,080
16,977
16,418
16,802
Dividends declared per common
share
$
0.51
$
—
$
0.97
$
—
Dividends paid per common share
$
—
$
—
$
0.86
$
—
Dine Brands Global, Inc. and
Subsidiaries
Consolidated Balance
Sheets
(In thousands, except share
and per share amounts)
June 30, 2022
December 31, 2021
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$
263,536
$
361,412
Receivables, net of allowance of $4,500
(2022) and $4,959 (2021)
91,888
119,968
Restricted cash
49,776
47,541
Prepaid gift card costs
25,028
28,175
Prepaid income taxes
6,890
10,529
Other current assets
12,710
6,728
Total current assets
449,828
574,353
Other intangible assets, net
534,247
539,390
Operating lease right-of-use assets
355,149
335,428
Goodwill
251,628
251,628
Property and equipment, net
175,265
179,411
Deferred rent receivable
46,293
50,257
Long-term receivables, net of allowance of
$5,713 (2022) and $6,897 (2021)
43,076
42,493
Non-current restricted cash
16,400
16,400
Other non-current assets, net
9,880
10,006
Total assets
$
1,881,766
$
1,999,366
Liabilities and Stockholders’
Deficit
Current liabilities:
Accounts payable
$
38,537
$
55,956
Gift card liability
133,874
165,530
Current maturities of operating lease
obligations
71,663
72,079
Current maturities of finance lease and
financing obligations
10,662
10,693
Accrued employee compensation and
benefits
21,202
40,785
Accrued advertising
33,574
33,752
Deferred franchise revenue, short-term
7,077
7,246
Dividends payable
8,239
6,919
Other accrued expenses
18,970
17,770
Total current liabilities
343,798
410,730
Long-term debt, net, less current
maturities
1,280,747
1,279,623
Operating lease obligations, less current
maturities
338,169
320,848
Finance lease obligations, less current
maturities
63,562
59,625
Financing obligations, less current
maturities
29,887
31,967
Deferred income taxes, net
75,064
76,228
Deferred franchise revenue, long-term
43,873
46,100
Other non-current liabilities
15,322
17,052
Total liabilities
2,190,422
2,242,173
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; 2022 -24,991,163 issued, 16,746,028
outstanding; 2021 - 24,992,275 issued, 17,163,946 outstanding
250
250
Additional paid-in-capital
253,213
256,189
Retained earnings
68,265
35,415
Accumulated other comprehensive loss
(63
)
(59
)
Treasury stock, at cost; shares: 2022 -
8,245,135; 2021 - 7,828,329
(630,321
)
(534,602
)
Total stockholders’ deficit
(308,656
)
(242,807
)
Total liabilities and stockholders’
deficit
$
1,881,766
$
1,999,366
Dine Brands Global, Inc. and
Subsidiaries
Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2022
2021
Cash flows from operating
activities:
Net income
$
48,812
$
54,965
Adjustments to reconcile net income to
cash flows provided by operating activities:
Depreciation and amortization
19,969
19,976
Non-cash stock-based compensation
expense
8,327
5,612
Non-cash closure and impairment
charges
1,348
4,514
Non-cash interest expense
1,436
1,427
Deferred income taxes
(773
)
(10,007
)
Deferred revenue
(2,396
)
(4,678
)
(Gain) loss on disposition of assets
(1,530
)
137
Other
(2,647
)
2,139
Changes in operating assets and
liabilities:
Accounts receivable, net
(1,114
)
4,928
Deferred rent receivable
3,964
3,432
Current income tax receivables and
payables
3,715
5,315
Gift card receivables and payables
(8,397
)
(3,837
)
Other current assets
(5,983
)
(2,036
)
Accounts payable
(9,656
)
6,195
Operating lease assets and liabilities
(5,724
)
(9,179
)
Accrued employee compensation and
benefits
(18,894
)
1,466
Accrued advertising expenses
(178
)
31,066
Other current liabilities
(400
)
(5,419
)
Cash flows provided by operating
activities
29,879
106,016
Cash flows from investing
activities:
Principal receipts from notes, equipment
contracts and other long-term receivables
9,476
9,703
Net additions to property and
equipment
(12,749
)
(4,064
)
Proceeds from sale of property and
equipment
3,658
946
Additions to long-term receivables
(1,069
)
—
Other
(93
)
(237
)
Cash flows (used in) provided by investing
activities
(777
)
6,348
Cash flows from financing
activities:
Repayment of long-term debt
—
(6,500
)
Repayment of revolving credit facility
—
(220,000
)
Dividends paid on common stock
(14,588
)
—
Repurchase of common stock
(102,394
)
—
Principal payments on finance lease
obligations
(4,696
)
(5,244
)
Proceeds from stock options exercised
241
22,511
Repurchase of restricted stock for tax
payments upon vesting
(2,353
)
(1,403
)
Tax payments for share settlement of
restricted stock units
(953
)
(9,783
)
Cash flows used in financing
activities
(124,743
)
(220,419
)
Net change in cash, cash equivalents and
restricted cash
(95,641
)
(108,055
)
Cash, cash equivalents and restricted cash
at beginning of period
425,353
456,053
Cash, cash equivalents and restricted cash
at end of period
$
329,712
$
347,998
Dine Brands Global, Inc. and
Subsidiaries 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: Closure and impairment
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,
2022
2021
2022
2021
Net income available to common
stockholders
$
23,289
$
28,705
$
47,539
$
53,534
Closure and impairment charges
1,311
2,571
1,457
4,581
Amortization of intangible assets
2,665
2,663
5,330
5,351
Non-cash interest expense
722
715
1,436
1,427
(Gain) loss on disposition of assets
(234
)
(30
)
(1,530
)
137
Net income tax provision for above
adjustments
(1,161
)
(1,598
)
(1,740
)
(3,104
)
Net income allocated to unvested
participating restricted stock
(95
)
(97
)
(128
)
(219
)
Net income available to common
stockholders, as adjusted
$
26,497
$
32,929
$
52,364
$
61,707
Diluted net income available to common
stockholders per share:
Net income available to common
stockholders per share:
$
1.45
$
1.69
$
2.90
$
3.19
Closure and impairment charges
0.06
0.11
0.07
0.20
Amortization of intangible assets
0.12
0.11
0.24
0.23
Non-cash interest expense
0.03
0.03
0.06
0.06
(Gain) loss on disposition of assets
(0.01
)
(0.00
)
(0.07
)
0.01
Net income allocated to unvested
participating restricted stock
(0.01
)
(0.01
)
(0.01
)
(0.01
)
Rounding
0.01
0.01
—
(0.01
)
Diluted net income available to common
stockholders per share, as adjusted
$
1.65
$
1.94
$
3.19
$
3.67
Numerator for basic EPS - net income
available to common stockholders, as adjusted
$
26,497
$
32,929
$
52,364
$
61,707
Effect of unvested participating
restricted stock using the two-class method
1
3
1
12
Numerator for diluted EPS - net income
available to common stockholders, as adjusted
$
26,498
$
32,932
$
52,365
$
61,719
Denominator for basic EPS -
weighted-average shares
16,050
16,886
16,386
16,673
Dilutive effect of stock options
30
91
32
129
Denominator for diluted EPS -
weighted-average shares
16,080
16,977
16,418
16,802
Dine Brands Global, Inc. and
Subsidiaries
Non-GAAP Financial
Measures
(Unaudited)
Reconciliation of the Company's cash flows
provided by operating activities to “adjusted free cash flow” (cash
flows 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,
2022
2021
(In millions)
Cash flows provided by operating
activities
$
29.9
$
106.0
Receipts from notes and equipment
contracts receivable
5.9
5.4
Net additions to property and
equipment
(12.7
)
(4.1
)
Adjusted free cash flow
23.1
107.3
Dividends paid on common stock
(14.6
)
—
Repurchase of common stock
(102.4
)
—
$
(93.9
)
$
107.3
Dine Brands Global, Inc. and
Subsidiaries
Non-GAAP Financial
Measures
(in thousands)
(Unaudited)
Reconciliation of the Company's net income
to “adjusted EBITDA.” The Company defines adjusted EBITDA as net
income or loss, adjusted for the effect of closure and impairment
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,
2022
2021
2022
2021
Net income, as reported
$
23,962
$
29,362
$
48,812
$
54,965
Closure and impairment charges
1,311
2,571
1,457
4,581
Interest charges on finance leases
1,217
1,383
2,468
2,847
All other interest charges
16,354
16,446
32,716
33,691
Income tax provision
8,569
9,296
17,876
7,707
Depreciation and amortization
10,022
9,972
19,952
19,959
Non-cash stock-based compensation
3,985
2,517
8,327
5,614
(Gain) loss on disposition of assets
(234
)
(30
)
(1,530
)
137
Other
882
221
1,194
353
Adjusted EBITDA
$
66,068
$
71,738
$
131,272
$
129,854
Dine Brands Global, Inc. and
Subsidiaries Restaurant Data (Unaudited)
The following table sets forth, for the
three and six months ended June 30, 2022 and 2021, 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,
2022
2021
2022
2021
Applebee's
Global Effective Restaurants(a)
Franchise
1,604
1,623
1,605
1,625
Company
69
69
69
69
Total
1,673
1,692
1,674
1,694
System-wide(b)
Domestic sales percentage change(c)
1.4
%
125.3
%
7.2
%
43.3
%
Domestic same-restaurant sales percentage
change(d)
1.8
%
102.2
%
7.6
%
46.4
%
Franchise(b)
Domestic sales percentage change(c)
1.3
%
125.2
%
7.3
%
43.0
%
Domestic same-restaurant sales percentage
change(d)
1.7
%
102.1
%
7.6
%
46.1
%
Average weekly domestic unit sales (in
thousands)
$
55.1
$
53.8
$
54.5
$
50.3
IHOP
Global Effective Restaurants(a)
Franchise
1,593
1,568
1,590
1,566
Area license
156
155
156
156
Total
1,749
1,723
1,746
1,722
System-wide(b)
Sales percentage change(c)
5.7
%
163.6
%
12.1
%
39.2
%
Domestic same-restaurant sales percentage
change, including area license restaurants(d)
3.6
%
120.1
%
10.1
%
40.7
%
Franchise(b)
Sales percentage change(c)
5.6
%
163.1
%
12.3
%
38.5
%
Domestic same-restaurant sales percentage
change(d)
3.6
%
118.2
%
10.4
%
39.4
%
Average weekly unit sales (in
thousands)
$
37.9
$
36.4
$
36.4
$
32.9
Area License (b)
Sales percentage change(c)
6.2
%
168.8
%
10.0
%
46.7
%
Dine Brands Global, Inc. and
Subsidiaries Restaurant Data (Unaudited)
(a)
“Global 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, 2022 and 2021 were as
follows:
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
(In millions)
Reported sales
Applebee's domestic franchise restaurant sales
$
1,076.7
$
1,062.8
$
2,131.7
$
1,987.5
Applebee's company-operated restaurants
39.5
38.2
78.9
74.1
IHOP franchise restaurant sales
783.8
742.0
1,503.5
1,338.8
IHOP area license restaurant sales
75.3
70.9
145.8
132.6
Total
$
1,975.3
$
1,913.9
$
3,859.9
$
3,533.0
(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.
(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,
2022
2021
2022
2021
Applebee's Restaurant Development
Activity
Summary - beginning of period:
Franchise
1,606
1,636
1,611
1,640
Company
69
69
69
69
Total Applebee's restaurants, beginning
of period
1,675
1,705
1,680
1,709
Franchise restaurants opened:
Domestic
1
—
2
2
International
—
1
—
1
Total franchise restaurants opened
1
1
2
3
Franchise restaurants closed:
Domestic
(2
)
(6
)
(6
)
(10
)
International
(1
)
(4
)
(3
)
(6
)
Total franchise restaurants closed
(3
)
(10
)
(9
)
(16
)
Net franchise restaurant
reduction
(2
)
(9
)
(7
)
(13
)
Summary - end of period:
Franchise
1,604
1,627
1,604
1,627
Company
69
69
69
69
Total Applebee's restaurants, end of
period
1,673
1,696
1,673
1,696
Domestic
1,574
1,590
1,574
1,590
International
99
106
99
106
IHOP Restaurant Development
Activity
Summary - beginning of period:
Franchise
1,600
1,593
1,595
1,611
Area license
156
156
156
158
Company
—
4
—
3
Total IHOP restaurants, beginning of
period
1,756
1,753
1,751
1,772
Franchise/area license restaurants
opened:
Domestic franchise
8
7
15
15
Domestic area license
—
1
1
1
International franchise
5
1
7
1
Total franchise/area license restaurants
opened
13
9
23
17
Franchise/area license restaurants
closed:
Domestic franchise
(4
)
(14
)
(7
)
(30
)
Domestic area license
—
—
(1
)
(2
)
International franchise
(1
)
—
(2
)
(9
)
International area license
—
(1
)
—
(1
)
Total franchise/area license restaurants
closed
(5
)
(15
)
(10
)
(42
)
Net franchise/area license restaurant
additions (reductions)
8
(6
)
13
(25
)
Refranchised from Company restaurants
—
1
—
1
Franchise restaurants reacquired by the
Company
—
—
—
(1
)
Net franchise/area license restaurant
increase (decrease)
8
(5
)
13
(25
)
Summary - end of period
Franchise
1,608
1,588
1,608
1,588
Area license
156
156
156
156
Company
—
3
—
3
Total IHOP restaurants, end of
period
1,764
1,747
1,764
1,747
Domestic
1,665
1,654
1,665
1,654
International
99
93
99
93
The restaurant counts and activity
presented above do not include two domestic Applebee's ghost
kitchens (small kitchens with no store-front presence, used to fill
off-premise orders), 12 international Applebee's ghost kitchens and
28 international IHOP ghost kitchens at June 30, 2022. There were
two domestic and one international Applebee's ghost kitchens and
three international IHOP ghost kitchens at June 30, 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220809005200/en/
Investor Contact Brett Levy
Vice President, Investor Relations Dine Brands Global, Inc. (818)
637-3632 Brett.Levy@dinebrands.com
Media Contact Susan Nelson
Vice President, Global Communications Dine Brands Global, Inc.
Susan.Nelson@dinebrands.com
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