Meaningful Improvement in Domestic
System-Wide Comparable Same-Restaurant Sales
99% of Domestic Restaurants Open
Ten New Domestic Restaurants Opened by
Franchisees
Robust Recovery Continued in the First
Quarter
Cash Position Remains Strong
Repaid $220 Million Drawn Against Revolving
Credit Facility
Dine Brands Global, Inc. (NYSE: DIN), the parent company of
Applebee's Neighborhood Grill + Bar® and IHOP® restaurants, today
announced financial results for the first quarter of 2021.
“Dine Brands first-quarter 2021 results demonstrate positive
momentum across our company. Thanks to the strength of our brands,
and the resilience and collaboration of our franchisees and team
members, we have a sharper focus on digital and marketing
capabilities, operational basics and a steadfast dedication to the
safety of our people, guests and the communities we serve,” said
John Peyton, chief executive officer of Dine Brands Global,
Inc.
Mr. Peyton continued, “The restaurant renaissance is here. As we
transition to a post-pandemic environment, we see continued
opportunity to invest in innovation and strategic platforms,
building on the strong foundation we’ve established to drive market
share gains and deliver profitable growth for years to come.”
Allison Hall, interim chief financial officer and vice
president, controller, added, “Dine Brands started the year in a
position of strength. Our cash position remained strong, enabling
us to repay the $220 million drawn against our revolving credit
facility. Maintaining our financial flexibility will be a top
priority as our business continues to improve.”
Domestic System-Wide Comparable Same-Restaurant Sales
Performance Relative to Fiscal 2020
Domestic Same-Restaurant Sales (Fiscal Month)
January February March Q1
2021 Applebee's
(17.9%)
(16.9%)
103.3%
11.9%
IHOP
(26.8%)
(27.5%)
81.2%
(0.9%)
Domestic Same-Restaurant Sales (Through Week Ending 5/2/21)
April 2021 - Preliminary
Sales Applebee's
237.4%
IHOP
297.4%
- Applebee’s year-over-year comparable same-restaurant sales
increased 11.9% for the first quarter of 2021. This compares to a
decrease of 10.6% for the first quarter of 2020, representing a net
increase of 22.5 percentage points.
- IHOP’s comparable same-restaurant sales decreased 0.9% for the
first quarter of 2021. This compares to a decrease of 14.7% for the
first quarter of 2020, representing a net increase of 13.8
percentage points.
- Comparable same-restaurant sales for the first quarter of 2021
at both Applebee’s and IHOP improved sequentially from the fourth
quarter of 2020 partially due to the continued improvement in our
business conditions as state and local level governments eased
restrictions on dine-in operations in some states as well as a
shift in consumer behavior.
Domestic System-Wide Comparable Same-Restaurant Sales
Performance Relative to Fiscal 2019
Domestic Same-Restaurant Sales (Fiscal Month)
January February March Q1
2021 Applebee's
(15.1%)
(13.7%)
6.1%
(6.2%)
IHOP
(27.1%)
(27.9%)
(12.0%)
(21.2%)
Domestic Same-Restaurant Sales (Through Week Ending 5/2/21)
April 2021 - Preliminary
Sales Applebee's
11.4%
IHOP
(4.7%)
Off-Premise and Dine-In Sales Growth Comparison
- Applebee’s off-premise comparable same-restaurant sales for the
first quarter of 2021 increased by 122.7%.
- Applebee’s off-premise sales accounted for 36.7% of sales mix
for the first quarter of 2021. This compares to 36.8% of sales mix
for the fourth quarter of 2020.
- Applebee’s delivery sales accounted for 14.7% of sales mix and
take-out sales accounted for 22.0% of sales mix for the first
quarter of 2021. This compares to delivery sales mix of 14.0% and
take-out sales mix of 22.8% for the fourth quarter of 2020.
- IHOP’s off-premise comparable same-restaurant sales for the
first quarter of 2021 increased by 123.7%.
- IHOP’s off-premise sales accounted for 33.3% of sales mix for
the first quarter of 2021, unchanged from the fourth quarter of
2020.
- IHOP’s delivery sales accounted for 16.4% of sales mix and
take-out sales accounted for 16.9% of sales mix for the first
quarter of 2021. This compares to delivery sales mix of 15.6% and
take-out sales mix of 17.7% for the fourth quarter of 2020.
First Quarter of 2021 Summary
- GAAP earnings per diluted share of $1.51 for the first quarter
of 2021 compared to earnings per diluted share of $1.31 for the
first quarter of 2020. The increase was primarily due to lower
income tax expense and an increase in gross profit, partially
offset by higher general and administrative expenses and an
increase in closure and impairment charges. The decline in income
tax expense was mainly due to the recognition of excess tax
benefits on stock-based compensation primarily associated with the
departure of our previous chief executive officer. The improvement
in gross profit was mainly due to higher revenue from Applebee’s
company-operated restaurants because of a higher average check and
increased traffic for the first quarter of 2021.
- Adjusted earnings per diluted share of $1.75 for the first
quarter of 2021 compared to adjusted earnings per diluted share of
$1.45 for the first quarter of 2020. The increase was primarily due
to lower taxes and higher gross profit as discussed above. (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 quarter of
2021 were $39.9 million compared to $37.6 million for the first
quarter of 2020. The variance was mainly due to higher personnel
costs related to equity-based and other incentive compensation.
These costs were partially offset by lower travel expenses.
- Consolidated adjusted EBITDA for the first quarter of 2021 was
$58.1 million. This compares to $61.7 million for the first quarter
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 quarter of
2021 were $30.6 million. This compares to cash flows from operating
activities of $29.6 million for the first quarter of 2020. The
increase was mainly due to the recognition of excess tax benefits
on stock-based compensation.
- The Company generated strong adjusted free cash flow of $30.7
million for the first quarter of 2021. This compares to adjusted
free cash flow of $27.5 million for the first quarter of 2020. The
improvement is primarily due to the increase in cash flows from
operating activities discussed above and lower capital expenditures
compared to the first quarter of 2020. (See “Non-GAAP Financial
Measures” and reconciliation of the Company’s cash provided by
operating activities to adjusted free cash flow.)
- Development activity by IHOP’s domestic franchisees resulted in
the opening of eight new restaurants.
- Development activity by Applebee’s domestic franchisees
resulted in the opening of two new restaurants.
Cash Position
On March 5, 2021, the Company repaid the entire $220 million
drawn from its revolving credit facility. As of March 31, 2021,
$3.3 million was pledged against the revolving credit facility for
outstanding letters of credit.
As of March 31, 2021, the Company had $272.4 million of total
cash and cash equivalents, of which $179.6 million was unrestricted
cash. Excluding the $220 million the Company drew from its
revolving credit facility, the Company had total cash of $236.1
million as of December 31, 2020, of which $163.4 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 March 31, 2021, the Company’s leverage ratio was
7.02x.
GAAP Effective Tax Rate
Our effective tax rate for the first quarter of 2021 was -6.6%
compared to 23.2% for the first quarter of 2020. The effective tax
rate for the first quarter of 2021 was significantly different than
the rate of the prior comparable period and the statutory federal
tax rate of 21% primarily due to the recognition of excess tax
benefits on stock-based compensation primarily associated with the
departure of our previous chief executive officer.
Financial Performance Guidance for 2021
The Company believes that its consolidated financial results for
2021 could continue to be materially impacted by the global impact
from COVID-19. Considering the uncertainty and timing of a reversal
in consumer behavior due to the pandemic, the Company currently
cannot provide a complete business outlook for fiscal 2021.
The projections are as of this date. The Company assumes no
obligation to update or supplement this information.
- Reiterates expectations for general and administrative expenses
for 2021 to range between approximately $160 million and $170
million, including approximately $5 million of general and
administrative expenses related to the Applebee’s company-owned
restaurants. Expectations include non-cash stock-based compensation
expense and depreciation totaling approximately $45 million, of
which approximately $30 million is included in the general and
administrative expense guidance cited above.
- Revises expectations for capital expenditures, which are now
projected to be approximately $19 million, inclusive of
approximately $7 million related to the company restaurants
segment. This compares to previous expectations of capital
expenditures to be approximately $14 million, inclusive of
approximately $5 million related to the company restaurants
segment. This change is due to additional investments in the
business.
Domestic System Reopening Update
As of March 31, 2021, 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.
This compares to as of December 31, 2020, when out 3,270 domestic
restaurants, 3,211, or 98%, were open for either dine-in service or
off-premise service comprised of take-out and delivery, and 59 were
temporarily closed.
Applebee’s Reopening Update
As of March 31, 2021, out of 1,596 domestic Applebee’s franchise
and company-operated restaurants, 1,590, or approximately 100%,
were open for either dine-in service or off-premise service
comprised of take-out and delivery, and 6 were temporarily closed.
This compares to as December 31, 2020, when out of 1,600 domestic
Applebee’s franchise and company-operated restaurants, 1,591 were
open for either dine-in service or off-premise service comprised of
take-out and delivery, and 9 were temporarily closed.
IHOP Reopening Update
As of March 31, 2021, out of 1,660 domestic IHOP franchise and
area license restaurants, 1,634, or 98%, were open for either
dine-in service or off-premise service comprised of take-out and
delivery, and 26 were temporarily closed. This compares to as of
December 31, 2020, when out of 1,670 domestic IHOP franchise and
area license restaurants, 1,620 were open for either dine-in
service or off-premise service comprised of take-out and delivery,
and 50 were temporarily closed.
First Quarter of 2021 Earnings Conference Call
Details
Dine Brands will host a conference call to discuss its results
on May 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 7382556. International callers, please dial
(830) 221-9708 and enter the conference identification number
7382556.
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 May 5, 2021 through
12:00 p.m. Pacific time on May 12, 2021 by dialing (855) 859-2056
and entering the conference identification number 7382556.
International callers, please dial (404) 537-3406 and enter the
conference identification number 7382556. 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 3,500 restaurants combined in 17 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 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 amounts)
(Unaudited)
Three Months Ended
March 31,
2021
2020
Revenues:
Franchise revenues:
Royalties, franchise fees and other
$
80,091
$
83,314
Advertising revenues
60,885
61,723
Total franchise revenues
140,976
145,037
Company restaurant sales
35,949
31,300
Rental revenues
26,142
29,009
Financing revenues
1,132
1,538
Total revenues
204,199
206,884
Cost of revenues:
Franchise expenses:
Advertising expenses
60,885
61,723
Bad debt (credit) expense
(1,993
)
518
Other franchise expenses
6,051
7,209
Total franchise expenses
64,943
69,450
Company restaurant expenses
32,884
30,332
Rental expenses:
Interest expense from finance leases
962
1,210
Other rental expenses
19,996
21,323
Total rental expenses
20,958
22,533
Financing expenses
128
142
Total cost of revenues
118,913
122,457
Gross profit
85,286
84,427
General and administrative expenses
39,911
37,608
Interest expense, net
16,496
15,172
Closure and impairment charges
(credit)
2,010
(12
)
Amortization of intangible assets
2,688
2,826
Loss (gain) on disposition of assets
167
(233
)
Income before income taxes
24,014
29,066
Income tax benefit (provision)
1,589
(6,738
)
Net income
$
25,603
$
22,328
Net income available to common
stockholders:
Net income
$
25,603
$
22,328
Less: Net income allocated to unvested
participating restricted stock
(548
)
(748
)
Net income available to common
stockholders
$
25,055
$
21,580
Net income available to common
stockholders per share:
Basic
$
1.52
$
1.33
Diluted
$
1.51
$
1.31
Weighted average shares
outstanding:
Basic
16,460
16,263
Diluted
16,630
16,470
Dividends declared per common
share
$
—
$
0.76
Dividends paid per common share
$
—
$
0.69
Dine Brands Global, Inc.
and Subsidiaries
Consolidated Balance
Sheets
(In thousands, except share
and per share amounts)
March 31, 2021
December 31, 2020
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
179,567
$
383,369
Receivables, net of allowance of $11,854
(2021) and $15,057 (2020)
107,387
121,897
Restricted cash
60,063
39,884
Prepaid gift card costs
22,581
29,080
Prepaid income taxes
6,940
6,178
Other current assets
9,171
6,098
Total current assets
385,709
586,506
Other intangible assets, net
547,098
549,671
Operating lease right-of-use assets
338,572
346,086
Goodwill
251,628
251,628
Property and equipment, net
182,661
187,977
Long-term receivables, net of allowance of
$6,455 (2021) and $7,999 (2020)
51,605
54,512
Deferred rent receivable
54,713
56,449
Non-current restricted cash
32,800
32,800
Other non-current assets, net
11,503
9,316
Total assets
$
1,856,289
$
2,074,945
Liabilities and Stockholders’
Deficit
Current liabilities:
Current maturities of long-term debt
$
13,000
$
13,000
Accounts payable
33,522
37,424
Gift card liability
121,814
144,159
Current maturities of operating lease
obligations
70,270
69,672
Current maturities of finance lease and
financing obligations
11,052
11,293
Accrued employee compensation and
benefits
14,554
21,237
Accrued advertising
44,477
21,641
Deferred franchise revenue, short-term
8,990
7,682
Other accrued expenses
17,417
22,460
Total current liabilities
335,096
348,568
Long-term debt, net, less current
maturities
1,271,438
1,491,996
Operating lease obligations, less current
maturities
334,361
345,163
Finance lease obligations, less current
maturities
66,234
69,012
Financing obligations, less current
maturities
32,598
32,797
Deferred income taxes, net
70,006
78,293
Deferred franchise revenue, long-term
49,364
52,237
Other non-current liabilities
14,594
11,530
Total liabilities
2,173,691
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; March 31, 2021 - 25,033,181 issued,
17,142,367 outstanding; December 31, 2020 - 24,882,122 issued,
16,452,174 outstanding
250
249
Additional paid-in-capital
247,498
257,625
Accumulated deficit
(29,950
)
(55,553
)
Accumulated other comprehensive loss
(56
)
(55
)
Treasury stock, at cost; shares: March 31,
2021 - 7,890,814; December 31, 2020 - 8,429,948
(535,144
)
(556,917
)
Total stockholders’ deficit
(317,402
)
(354,651
)
Total liabilities and stockholders’
deficit
$
1,856,289
$
2,074,945
Dine Brands Global, Inc. and
Subsidiaries
Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2021
2020
Cash flows from operating
activities:
Net income
$
25,603
$
22,328
Adjustments to reconcile net income to
cash flows provided by operating activities:
Non-cash closure and impairment charges
(credit)
1,959
(12
)
Depreciation and amortization
9,995
10,641
Non-cash stock-based compensation
expense
3,094
4,038
Non-cash interest expense
712
655
Deferred income taxes
(8,267
)
(10,491
)
Deferred revenue
(1,565
)
(1,417
)
Loss (gain) on disposition of assets
167
(227
)
Other
(1,580
)
(1,293
)
Changes in operating assets and
liabilities:
Accounts receivable, net
(4,323
)
12,077
Current income tax receivables and
payables
(552
)
6,443
Gift card receivables and payables
(3,246
)
11,693
Other current assets
(3,072
)
(2,347
)
Accounts payable
809
(12,748
)
Accrued employee compensation and
benefits
(6,968
)
(12,190
)
Accrued advertising expenses
22,836
(4,719
)
Other current liabilities
(5,037
)
7,214
Cash flows provided by operating
activities
30,565
29,645
Cash flows from investing
activities:
Principal receipts from notes, equipment
contracts and other long-term receivables
4,651
5,544
Net additions to property and
equipment
(2,357
)
(5,084
)
Proceeds from sale of property and
equipment
946
6
Additions to long-term receivables
—
(1,511
)
Other
(110
)
(195
)
Cash flows provided by (used in) investing
activities
3,130
(1,240
)
Cash flows from financing
activities:
Repayment of long-term debt
(3,250
)
—
Borrowing from revolving credit
facility
—
220,000
Repayment of revolving credit facility
(220,000
)
—
Dividends paid on common stock
—
(11,451
)
Repurchase of common stock
—
(29,853
)
Principal payments on finance lease
obligations
(2,621
)
(2,981
)
Proceeds from stock options exercised
19,484
20,524
Tax payments for restricted stock upon
vesting
(1,220
)
(2,000
)
Tax payments for share settlement of
restricted stock units
(9,711
)
—
Cash flows (used in) provided by financing
activities
(217,318
)
194,239
Net change in cash, cash equivalents and
restricted cash
(183,623
)
222,644
Cash, cash equivalents and restricted cash
at beginning of period
456,053
172,475
Cash, cash equivalents and restricted cash
at end of period
$
272,430
$
395,119
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
March 31,
2021
2020
Net income available to common
stockholders, as reported
$
25,055
$
21,580
Closure and impairment charges
(credit)
2,010
(12
)
Amortization of intangible assets
2,688
2,826
Non-cash interest expense
712
655
Loss (gain) on disposition of assets
167
(233
)
Net income tax provision for above
adjustments
(1,506
)
(809
)
Net income allocated to unvested
participating restricted stock
(88
)
(83
)
Net income available to common
stockholders, as adjusted
$
29,038
$
23,924
Diluted net income available to common
stockholders per share:
Net income available to common
stockholders per share, as reported
$
1.51
$
1.31
Closure and impairment charges
(credit)
0.09
(0.00
)
Amortization of intangible assets
0.12
0.13
Non-cash interest expense
0.03
0.03
Loss (gain) on disposition of assets
0.01
(0.01
)
Net income allocated to unvested
participating restricted stock
(0.01
)
(0.01
)
Diluted net income available to common
stockholders per share, as adjusted
$
1.75
$
1.45
Numerator for basic EPS - income available
to common stockholders, as adjusted
$
29,038
$
23,924
Effect of unvested participating
restricted stock using the two-class method
7
5
Numerator for diluted EPS - income
available to common stockholders, as adjusted
$
29,045
$
23,929
Denominator for basic EPS -
weighted-average shares
16,460
16,263
Dilutive effect of stock options
170
207
Denominator for diluted EPS -
weighted-average shares
16,630
16,470
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.
Three Months Ended
March 31,
2021
2020
(In millions)
Cash flows provided by operating
activities
$
30.6
$
29.6
Receipts from notes and equipment
contracts receivable
2.5
3.0
Net additions to property and
equipment
(2.4
)
(5.1
)
Adjusted free cash flow
30.7
27.5
Dividends paid on common stock
—
(11.5
)
Repurchase of common stock
—
(29.9
)
$
30.7
$
(13.9
)
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, 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
March 31,
2021
2020
Net income, as reported
$
25,603
$
22,328
Closure and impairment charges
(credit)
2,010
(12
)
Interest charges on finance leases
1,464
1,723
All other interest charges
17,244
16,242
Income tax (benefit) provision
(1,589
)
6,738
Depreciation and amortization
9,987
10,641
Non-cash stock-based compensation
3,097
4,037
Loss (gain) on disposition of assets
167
(233
)
Other
134
219
Adjusted EBITDA
$
58,117
$
61,683
Dine Brands Global, Inc. and
Subsidiaries Restaurant Data (Unaudited)
The following table sets forth, for the three months ended March
31, 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
March 31,
2021
2020
Applebee's
Effective Restaurants(a)
Franchise
1,628
1,697
Company
69
69
Total
1,697
1,766
System-wide(b)
Domestic sales percentage change(c)
1.2
%
(12.1
)
%
Domestic same-restaurant sales percentage
change(d)
11.9
%
(10.6
)
%
Franchise(b)
Domestic sales percentage change(c)
0.7
%
(12.1
)
%
Domestic same-restaurant sales percentage
change(d)
11.5
%
(10.6
)
%
Average weekly domestic unit sales (in
thousands)
$
46.8
$
44.6
IHOP
Effective Restaurants(a)
Franchise
1,563
1,660
Area license
157
161
Total
1,720
1,821
System-wide(b)
Sales percentage change(c)
(12.1
)
%
(14.2
)
%
Domestic same-restaurant sales percentage
change, including area license restaurants(d)
(0.9
)
%
(14.7
)
%
Franchise(b)
Sales percentage change(c)
(12.9
)
%
(14.3
)
%
Domestic same-restaurant sales percentage
change(d)
(1.9
)
%
(14.7
)
%
Average weekly unit sales (in
thousands)
$
29.4
$
31.7
Area License (b)
Sales percentage change(c)
(3.7
)
%
(13.8
)
%
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, IHOP franchise restaurants and IHOP area license
restaurants for the three months ended March 31, 2021 and 2020 and
sales by company-operated restaurants were as follows:
Three Months Ended
March 31,
2021
2020
(In millions)
Reported sales
Applebee's domestic franchise restaurant
sales
$
924.7
$
918.2
Applebee's company-operated
restaurants
35.9
31.3
IHOP franchise restaurant sales
596.7
684.8
IHOP area license restaurant sales
61.7
64.0
Total
$
1,619.0
$
1,698.3
(c)
“Sales percentage change” reflects, for
each category of restaurants, the percentage change in sales in any
given fiscal period compared to the prior fiscal period for all
restaurants in that category.
(d)
“Domestic same-restaurant sales percentage
change” reflects the percentage change in sales, in any given
fiscal period, compared to the same weeks in the prior year for
domestic restaurants that have been operated throughout both fiscal
periods that are being compared and have been open for at least
18 months. Because of new unit openings and restaurant
closures, the domestic restaurants open throughout both fiscal
periods being compared may be different from period to period.
Dine Brands Global, Inc. and
Subsidiaries
Restaurant Data
(Unaudited)
Three Months Ended
March 31,
2021
2020
Applebee's Restaurant Development
Activity
Summary - beginning of period:
Franchise
1,640
1,718
Company restaurants
69
69
Total Applebee's restaurants, beginning
of period
1,709
1,787
Franchise restaurants opened:
Domestic
2
—
Total franchise restaurants opened
2
—
Franchise restaurants permanently
closed:
Domestic
(4
)
(8
)
International
(2
)
(4
)
Total franchise restaurants permanently
closed
(6
)
(12
)
Net franchise restaurant
reduction
(4
)
(12
)
Summary - end of period:
Franchise
1,636
1,706
Company
69
69
Total Applebee's restaurants, end of
period
1,705
1,775
Domestic
1,596
1,657
International
109
118
IHOP Restaurant Development
Activity
Summary - beginning of period:
Franchise
1,611
1,680
Area license
158
161
Company
3
—
Total IHOP restaurants, beginning of
period
1,772
1,841
Franchise/area license restaurants
opened:
Domestic franchise
8
6
Domestic area license
—
1
International franchise
—
2
Total franchise/area license restaurants
opened
8
9
Franchise/area license restaurants
permanently closed:
Domestic franchise
(16
)
(6
)
Domestic area license
(2
)
(2
)
International franchise
(9
)
(2
)
Total franchise/area license restaurants
permanently closed
(27
)
(10
)
Net franchise/area license restaurant
(reduction) addition
(19
)
(1
)
Franchise restaurants reacquired by the
Company
(1
)
—
Net franchise/area license restaurant
decrease
(20
)
(1
)
Summary - end of period
Franchise
1,593
1,680
Area license
156
160
Company
4
—
Total IHOP restaurants, end of
period
1,753
1,840
Domestic
1,660
1,709
International
93
131
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/20210505005397/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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