GLENDALE, Calif., March 1, 2017 /PRNewswire/ -- DineEquity,
Inc. (NYSE: DIN), the parent company of Applebee's Neighborhood Grill & Bar® and IHOP® restaurants,
today announced financial results for the fourth quarter and fiscal 2016.
"While this has been a challenging period for the industry, particularly for casual dining and Applebee's, I have confidence
in our brands, our franchisees and our team members," said Richard J. Dahl, Chairman and interim
Chief Executive Officer of DineEquity, Inc.
Mr. Dahl added, "Working with a world-class management consulting firm to conduct a comprehensive diagnostic on Applebee's, we
are moving forward with a plan to significantly invest in the growth of our brands for the long-term benefit of our franchisees
and shareholders. We have identified key strategic initiatives, which we believe will drive meaningful improvements in
sales and traffic over time. To drive the business forward, we know that there is more that needs to be done. I am
confident in our roadmap."
Fourth Quarter of Fiscal 2016 Financial Highlights
- GAAP net income available to common stockholders was $21.1 million for the fourth quarter of
2016, or earnings per diluted share of $1.18. This compares to net income available to common
stockholders of $25.0 million, or earnings per diluted share of $1.35, for the fourth quarter of 2015. GAAP net income for the fourth quarter of 2016 declined compared
to the same period of 2015 mainly due to a decrease in gross profit, partially offset by improvement in general and
administrative expenses primarily due to lower incentive compensation.
- Adjusted net income available to common stockholders was $24.5 million, or adjusted earnings
per diluted share of $1.37, for the fourth quarter of 2016. This compares to $29.5 million, or adjusted earnings per diluted share of $1.59, for the same
period of 2015. The decrease in adjusted net income was mainly due to lower gross profit. The decrease was
partially offset by improvement in general and administrative expenses primarily due to lower incentive compensation.
(See "Non-GAAP Financial Measures" below.)
- General and administrative expenses were $37.0 million for the fourth quarter of 2016.
This compares to approximately $45.0 million for the same period of 2015. The improvement
was mainly due to lower incentive compensation and a decline in costs associated with the timing of franchise conferences.
Fiscal 2016 Financial Highlights
- GAAP net income available to common stockholders was $96.6 million for fiscal 2016, or
earnings per diluted share of $5.33. This compares to net income available to common
stockholders of $103.5 million, or earnings per diluted share of $5.52, for fiscal 2015. The decrease in GAAP net income was primarily due to lower gross profit, which
included an incremental $9.4 million as a result of a 53rd week in fiscal 2015.
The decrease was partially offset by lower income tax expense due to lower state tax rates applied to our deferred tax
balances as the result of our restaurant support center consolidation as well as an improvement in general and administrative
expenses mainly due to lower incentive compensation.
- Adjusted net income available to common stockholders was $108.9 million, or adjusted earnings
per diluted share of $6.01, for fiscal 2016. This compares to $116.1
million, or adjusted earnings per diluted share of $6.19, for fiscal 2015. The
decline in adjusted earnings per diluted share was mainly due to lower gross profit, which included an incremental
$9.4 million as a result of a 53rd week in fiscal 2015. This was partially
offset by fewer weighted average diluted shares outstanding, a decline in general and administrative expenses and a lower
income tax rate. (See "Non-GAAP Financial Measures" below.)
- General and administrative expenses were $148.9 million for fiscal 2016. This compares
to $155.4 million for fiscal 2015. The improvement was primarily due to lower incentive
compensation.
- In fiscal 2016, cash flows from operating activities were $118.1 million compared to
$135.5 million in fiscal 2015. Adjusted free cash flow was $122.5
million for full-year fiscal 2016, compared to $142.3 million for full-year fiscal
2015. (See "Non-GAAP Financial Measures" below.)
Same-Restaurant Sales Performance
Fourth Quarter of Fiscal 2016
- IHOP's domestic system-wide comparable same restaurant sales declined 2.1% for the fourth quarter of 2016.
- Applebee's domestic system-wide comparable same-restaurant sales declined 7.2% for the fourth quarter of 2016.
Fiscal 2016
- IHOP's domestic system-wide comparable same restaurant sales decreased 0.1% for fiscal 2016.
- Applebee's domestic system-wide comparable same-restaurant sales decreased 5.0% for fiscal 2016.
Financial Performance Guidance for Fiscal 2017
The following projections for fiscal 2017 are based on management's expectations as of March 1,
2017.
- Applebee's domestic system-wide same-restaurant sales performance is expected to range between negative 4.0% and negative
8.0%.
- IHOP's domestic system-wide same-restaurant sales performance is expected to range between 0.0% and positive 3.0%.
- Applebee's franchisees are projected to develop between 20 and 30 new restaurants globally, the majority of which are
expected to be international openings. As part of a detailed system-wide analysis to optimize the health of the
franchisee system, we anticipate the closure of approximately 40 to 60 restaurants. The expected closures will be based
on several criteria, including meeting our brand and image standards and operational results.
- IHOP franchisees and its area licensee are projected to develop between 75 and 90 restaurants globally, the majority of
which are expected to be domestic openings. We expect the closure of approximately 18 restaurants as part of normal
attrition.
- Franchise segment profit is expected to be between $323 million and $338 million.
- Rental and Financing segments are expected to generate roughly $38 million in combined
profit.
- General and administrative expenses are expected to range between $170 million and $177
million, including non-cash stock-based compensation expense and depreciation of approximately $22 million. The anticipated increase in general and administrative expenses compared to fiscal 2016 is
primarily due to expectations for higher personnel-related and incentive compensation costs as well as investments in
Applebee's stabilization initiatives. These initiatives will total approximately $10
million in fiscal 2017 and we expect that a substantial amount will not recur. The range for expected general and
administrative expenses is inclusive of approximately $9 million of non-recurring cash severance
and equity compensation charges to be incurred in the first quarter of fiscal 2017.
- Interest expense is expected to be approximately $62 million. Approximately $3 million is projected to be non-cash interest expense.
- Weighted average diluted shares outstanding are expected to be approximately 18 million shares.
- The income tax rate is expected to be approximately 38%.
- Cash flow provided by operating activities is expected to range between $98 million and $108
million. The expected decline compared to fiscal 2016 is primarily due to projections for lower net income due to
higher general and administrative expenses as well as expectations for domestic system-wide comparable same restaurant sales.
- Capital expenditures are projected to be roughly $12 million.
- Adjusted free cash flow (See "Non-GAAP Financial Measures" below) is projected to range between $96
million and $106 million. The expected decline in adjusted free cash flow compared to fiscal 2016 is primarily due
to projections for lower net income due to higher general and administrative expenses as well as expectations for domestic
system-wide comparable same restaurant sales.
|
2017 Adjusted Free Cash Flow (Non-GAAP) Guidance Table
|
|
(In millions)
|
|
|
Cash flows from operations
|
$98 – 108
|
|
|
Approximate net receipts from notes and equipment contracts
receivable
|
10
|
|
|
Approximate capital expenditures
|
(12)
|
|
|
Adjusted free cash flow (Non-GAAP)
|
$96 - 106
|
|
Investor Conference Call Today
DineEquity will host a conference call to discuss its results on the same day at 8:00 a.m. Pacific
Time. To participate on the call, please dial (888) 771-4371 and reference passcode 44360070. International callers,
please dial (847) 585-4405 and reference passcode 44360070. A live webcast of the call will be available at www.dineequity.com, and may be accessed by visiting Calls &
Presentations on the site's Investors section. Participants should allow approximately ten minutes prior to the call's
start time to visit the site and download any streaming media software needed to listen to the webcast. A telephonic replay
of the call may be accessed from 10:30 a.m. Pacific Time on March 1,
2017 through 8:59 p.m. Pacific Time on March 8, 2017 by
dialing (888) 843-7419 and referencing passcode 44360070#. International callers, please dial (630) 652-3042 and reference
passcode 44360070#. An online archive of the webcast will also be available on Calls & Presentations under the
Investors section of DineEquity's website.
About DineEquity, Inc.
Based in Glendale, California, DineEquity, Inc., through its subsidiaries, franchises and
operates restaurants under the Applebee's Neighborhood Grill & Bar and IHOP brands. With more than 3,700 restaurants combined
in 18 countries and 3 U.S. territories and approximately 400 franchisees, DineEquity is one of the largest full-service
restaurant companies in the world. For more information on DineEquity, visit the Company's Web site located at www.dineequity.com.
Forward-Looking Statements
Statements contained in this press release may constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by words such as "may," "will,"
"should," "could," "expect," "anticipate," "believe," "estimate," "intend," "plan" and other similar expressions. These
statements involve known and unknown risks, uncertainties and other factors, which may cause actual results to be materially
different from those expressed or implied in such statements. These factors include, but are not limited to: the effect of
general economic conditions; the Company's indebtedness; risk of future impairment charges; trading volatility and the price of
the Company's common stock; the Company's results in any given period differing from guidance provided to the public; the highly
competitive nature of the restaurant business; the Company's business strategy failing to achieve anticipated results; risks
associated with the restaurant industry; risks associated with locations of current and future restaurants; rising costs for food
commodities and utilities; shortages or interruptions in the supply or delivery of food; ineffective marketing and guest
relationship initiatives and use of social media; changing health or dietary preferences; our engagement in business in foreign
markets; harm to our brands' reputation; litigation; fourth-party claims with respect to intellectual property assets;
environmental liability; liability relating to employees; failure to comply with applicable laws and regulations; failure to
effectively implement restaurant development plans; our dependence upon our franchisees; concentration of Applebee's franchised
restaurants in a limited number of franchisees; credit risk from IHOP franchisees operating under our previous business model;
termination or non-renewal of franchise agreements; franchisees breaching their franchise agreements; insolvency proceedings
involving franchisees; changes in the number and quality of franchisees; inability of franchisees to fund capital expenditures;
heavy dependence on information technology; the occurrence of cyber incidents or a deficiency in our cybersecurity; failure to
execute on a business continuity plan; inability to attract and retain talented employees; risks associated with retail brand
initiatives; failure of our internal controls; and other factors discussed from time to time in the Company's Annual and
Quarterly Reports on Forms 10-K and 10-Q and in the Company's other filings with the Securities and Exchange Commission. The
forward-looking statements contained in this release are made as of the date hereof and the Company assumes no obligation to
update or supplement any forward-looking statements.
Non-GAAP Financial Measures
This news release includes references to the Company's non-GAAP financial measure "adjusted net income available to common
stockholders (Adjusted EPS)" 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 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
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.
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. 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.
|
|
|
DineEquity, Inc. and Subsidiaries
|
|
Consolidated Statements of Income
|
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Franchise and restaurant revenues
|
|
$
|
121,711
|
|
|
$
|
134,832
|
|
|
$
|
501,745
|
|
|
$
|
542,606
|
|
|
Rental revenues
|
|
30,291
|
|
|
33,895
|
|
|
123,037
|
|
|
127,650
|
|
|
Financing revenues
|
|
2,172
|
|
|
2,573
|
|
|
9,191
|
|
|
10,844
|
|
|
Total revenues
|
|
154,174
|
|
|
171,300
|
|
|
633,973
|
|
|
681,100
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
Franchise and restaurant expenses
|
|
40,731
|
|
|
41,553
|
|
|
162,860
|
|
|
186,986
|
|
|
Rental expenses
|
|
22,508
|
|
|
24,515
|
|
|
91,540
|
|
|
94,588
|
|
|
Financing expenses
|
|
—
|
|
|
4
|
|
|
155
|
|
|
520
|
|
|
Total cost of revenues
|
|
63,239
|
|
|
66,072
|
|
|
254,555
|
|
|
282,094
|
|
|
Gross profit
|
|
90,935
|
|
|
105,228
|
|
|
379,418
|
|
|
399,006
|
|
|
General and administrative expenses
|
|
36,998
|
|
|
45,044
|
|
|
148,935
|
|
|
155,428
|
|
|
Interest expense
|
|
15,372
|
|
|
16,497
|
|
|
61,479
|
|
|
63,254
|
|
|
Amortization of intangible assets
|
|
2,501
|
|
|
2,500
|
|
|
9,981
|
|
|
10,000
|
|
|
Closure and impairment charges
|
|
1,160
|
|
|
346
|
|
|
5,092
|
|
|
2,576
|
|
|
Loss (gain) on disposition of assets
|
|
130
|
|
|
1,393
|
|
|
809
|
|
|
(901)
|
|
|
Income before income taxes
|
|
34,774
|
|
|
39,448
|
|
|
153,122
|
|
|
168,649
|
|
|
Income tax provision
|
|
(13,427)
|
|
|
(14,091)
|
|
|
(55,130)
|
|
|
(63,726)
|
|
|
Net income
|
|
$
|
21,347
|
|
|
$
|
25,357
|
|
|
$
|
97,992
|
|
|
$
|
104,923
|
|
|
Net income available to common stockholders:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
21,347
|
|
|
$
|
25,357
|
|
|
$
|
97,992
|
|
|
$
|
104,923
|
|
|
Less: Net income allocated to unvested participating
restricted stock
|
|
(288)
|
|
|
(357)
|
|
|
(1,387)
|
|
|
(1,400)
|
|
|
Net income available to common stockholders
|
|
$
|
21,059
|
|
|
$
|
25,000
|
|
|
$
|
96,605
|
|
|
$
|
103,523
|
|
|
Net income available to common stockholders per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.18
|
|
|
$
|
1.36
|
|
|
$
|
5.36
|
|
|
$
|
5.55
|
|
|
Diluted
|
|
$
|
1.18
|
|
|
$
|
1.35
|
|
|
$
|
5.33
|
|
|
$
|
5.52
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
17,826
|
|
|
18,358
|
|
|
18,030
|
|
|
18,637
|
|
|
Diluted
|
|
17,916
|
|
|
18,475
|
|
|
18,125
|
|
|
18,768
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
0.97
|
|
|
$
|
0.92
|
|
|
$
|
3.73
|
|
|
$
|
3.545
|
|
|
Dividends paid per common share
|
|
$
|
0.92
|
|
|
$
|
0.875
|
|
|
$
|
3.68
|
|
|
$
|
3.50
|
|
|
|
|
|
DineEquity, Inc. and Subsidiaries
|
|
Consolidated Balance Sheets
|
|
(In thousands, except share and per share amounts)
|
|
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
140,535
|
|
|
$
|
144,785
|
|
|
Receivables, net
|
|
141,389
|
|
|
139,206
|
|
|
Restricted cash
|
|
30,256
|
|
|
32,528
|
|
|
Prepaid gift card costs
|
|
47,115
|
|
|
46,792
|
|
|
Prepaid income taxes
|
|
2,483
|
|
|
5,186
|
|
|
Other current assets
|
|
4,370
|
|
|
4,212
|
|
|
Total current assets
|
|
366,148
|
|
|
372,709
|
|
|
Long-term receivables, net
|
|
141,152
|
|
|
160,695
|
|
|
Property and equipment, net
|
|
205,055
|
|
|
219,580
|
|
|
Goodwill
|
|
697,470
|
|
|
697,470
|
|
|
Other intangible assets, net
|
|
763,431
|
|
|
772,949
|
|
|
Deferred rent receivable
|
|
86,981
|
|
|
90,030
|
|
|
Other non-current assets, net
|
|
18,346
|
|
|
18,417
|
|
|
Total assets
|
|
$
|
2,278,583
|
|
|
$
|
2,331,850
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
50,503
|
|
|
$
|
55,019
|
|
|
Gift card liability
|
|
170,812
|
|
|
167,657
|
|
|
Accrued employee compensation and benefits
|
|
14,609
|
|
|
25,085
|
|
|
Dividends payable
|
|
17,465
|
|
|
17,082
|
|
|
Current maturities of capital lease and financing obligations
|
|
13,144
|
|
|
14,320
|
|
|
Accrued advertising
|
|
6,369
|
|
|
8,758
|
|
|
Accrued interest payable
|
|
4,308
|
|
|
4,257
|
|
|
Other accrued expenses
|
|
9,102
|
|
|
6,251
|
|
|
Total current liabilities
|
|
286,312
|
|
|
298,429
|
|
|
Long-term debt, net
|
|
1,282,691
|
|
|
1,279,473
|
|
|
Capital lease obligations, less current maturities
|
|
74,665
|
|
|
84,781
|
|
|
Financing obligations, less current maturities
|
|
39,499
|
|
|
42,395
|
|
|
Deferred income taxes, net
|
|
253,898
|
|
|
269,469
|
|
|
Deferred rent payable
|
|
69,572
|
|
|
69,397
|
|
|
Other non-current liabilities
|
|
19,174
|
|
|
20,683
|
|
|
Total liabilities
|
|
2,025,811
|
|
|
2,064,627
|
|
|
Commitments and contingencies
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
Common stock, $0.01 par value, shares: 40,000,000 authorized; 2016 -
25,134,223 issued, 17,969,636 outstanding; 2015 - 25,186,048 issued, 18,535,027 outstanding
|
|
251
|
|
|
252
|
|
|
Additional paid-in-capital
|
|
292,809
|
|
|
286,952
|
|
|
Retained earnings
|
|
382,082
|
|
|
351,923
|
|
|
Accumulated other comprehensive loss
|
|
(107)
|
|
|
(107)
|
|
|
Treasury stock, at cost; shares: 2016 - 7,164,587; 2015 -
6,651,021
|
|
(422,263)
|
|
|
(371,797)
|
|
|
Total stockholders' equity
|
|
252,772
|
|
|
267,223
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
2,278,583
|
|
|
$
|
2,331,850
|
|
|
|
|
|
DineEquity, Inc. and Subsidiaries
|
|
Consolidated Statements of Cash Flows
|
|
(In thousands)
|
|
|
|
Twelve Months Ended
|
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income
|
|
$
|
97,992
|
|
|
$
|
104,923
|
|
|
Adjustments to reconcile net income to cash flows provided by operating
activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
30,606
|
|
|
32,840
|
|
|
Non-cash interest expense
|
|
3,218
|
|
|
3,074
|
|
|
Closure and impairment charges
|
|
2,621
|
|
|
2,576
|
|
|
Deferred income taxes
|
|
(14,434)
|
|
|
(13,987)
|
|
|
Non-cash stock-based compensation expense
|
|
10,926
|
|
|
8,892
|
|
|
Tax benefit from stock-based compensation
|
|
1,132
|
|
|
4,862
|
|
|
Excess tax benefit from stock-based compensation
|
|
(1,019)
|
|
|
(4,794)
|
|
|
Loss (gain) on disposition of assets
|
|
809
|
|
|
(901)
|
|
|
Other
|
|
(1,302)
|
|
|
(6,323)
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Accounts receivable, net
|
|
3,178
|
|
|
(5,239)
|
|
|
Current income tax receivables and payables
|
|
(909)
|
|
|
2,073
|
|
|
Gift card receivables and payables
|
|
(4,288)
|
|
|
21,735
|
|
|
Prepaid expenses and other current assets
|
|
(156)
|
|
|
(1,995)
|
|
|
Accounts payable
|
|
89
|
|
|
4,546
|
|
|
Accrued employee compensation and benefits
|
|
(10,476)
|
|
|
(594)
|
|
|
Accrued interest payable
|
|
51
|
|
|
(9,869)
|
|
|
Other current liabilities
|
|
72
|
|
|
(6,310)
|
|
|
Cash flows provided by operating activities
|
|
118,110
|
|
|
135,509
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Principal receipts from notes, equipment contracts and other long-term
receivables
|
|
18,689
|
|
|
21,328
|
|
|
Proceeds from sale of property and equipment
|
|
—
|
|
|
10,782
|
|
|
Additions to property and equipment
|
|
(5,637)
|
|
|
(6,642)
|
|
|
Other
|
|
(503)
|
|
|
(267)
|
|
|
Cash flows provided by investing activities
|
|
12,549
|
|
|
25,201
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Repurchase of DineEquity common stock
|
|
(55,343)
|
|
|
(70,014)
|
|
|
Dividends paid on common stock
|
|
(67,429)
|
|
|
(66,164)
|
|
|
Principal payments on capital lease and financing obligations
|
|
(13,978)
|
|
|
(14,226)
|
|
|
Change in restricted cash
|
|
2,272
|
|
|
19,733
|
|
|
Payment of debt issuance and debt modification costs
|
|
—
|
|
|
(89)
|
|
|
Proceeds from stock options exercised
|
|
1,409
|
|
|
9,536
|
|
|
Tax payments for restricted stock upon vesting
|
|
(2,859)
|
|
|
(3,499)
|
|
|
Excess tax benefit from share-based compensation
|
|
1,019
|
|
|
4,794
|
|
|
Cash flows used in financing activities
|
|
(134,909)
|
|
|
(119,929)
|
|
|
Net change in cash and cash equivalents
|
|
(4,250)
|
|
|
40,781
|
|
|
Cash and cash equivalents at beginning of period
|
|
144,785
|
|
|
104,004
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
140,535
|
|
|
$
|
144,785
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES
|
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
Reconciliation of net income available to common stockholders to net income
available to common stockholders, as adjusted for the following items: Kansas City Support Center consolidation costs;
amortization of intangible assets; closure and impairment charges; non-cash interest expense; gain or loss on disposition
of assets; the combined tax effect of the preceding adjustments, and income tax adjustments considered unrelated to the
respective current period operations, as well as related per share data:
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net income available to common stockholders, as reported
|
|
$
|
21,059
|
|
|
$
|
25,000
|
|
|
$
|
96,605
|
|
|
$
|
103,523
|
|
|
Kansas City Support Center consolidation costs(1)
|
|
835
|
|
|
2,266
|
|
|
6,173
|
|
|
5,861
|
|
|
Amortization of intangible assets
|
|
2,501
|
|
|
2,500
|
|
|
9,981
|
|
|
10,000
|
|
|
Closure and impairment charges
|
|
762
|
|
|
346
|
|
|
2,223
|
|
|
2,576
|
|
|
Non-cash interest expense
|
|
818
|
|
|
782
|
|
|
3,218
|
|
|
3,074
|
|
|
Loss (gain) on disposition of assets
|
|
130
|
|
|
1,393
|
|
|
809
|
|
|
(901)
|
|
|
Net income tax provision for above adjustments
|
|
(1,867)
|
|
|
(2,769)
|
|
|
(8,289)
|
|
|
(7,832)
|
|
|
Income tax adjustments(2)
|
|
316
|
|
|
—
|
|
|
(1,686)
|
|
|
—
|
|
|
Net income allocated to unvested participating restricted stock
|
|
(47)
|
|
|
(62)
|
|
|
(177)
|
|
|
(171)
|
|
|
Net income available to common stockholders, as adjusted
|
|
$
|
24,507
|
|
|
$
|
29,456
|
|
|
$
|
108,857
|
|
|
$
|
116,130
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income available to common stockholders per share:
|
|
|
|
|
|
|
|
|
Net income available to common stockholders, as reported
|
|
$
|
1.18
|
|
|
$
|
1.35
|
|
|
$
|
5.33
|
|
|
$
|
5.52
|
|
|
Kansas City Support Center consolidation costs(1)
|
|
0.03
|
|
|
0.08
|
|
|
0.21
|
|
|
0.19
|
|
|
Amortization of intangible assets
|
|
0.09
|
|
|
0.08
|
|
|
0.34
|
|
|
0.33
|
|
|
Closure and impairment charges
|
|
0.03
|
|
|
0.01
|
|
|
0.08
|
|
|
0.09
|
|
|
Non-cash interest expense
|
|
0.03
|
|
|
0.03
|
|
|
0.11
|
|
|
0.10
|
|
|
Loss (gain) on disposition of assets
|
|
0.00
|
|
|
0.05
|
|
|
0.03
|
|
|
(0.03)
|
|
|
Income tax adjustments(2)
|
|
0.02
|
|
|
—
|
|
|
(0.09)
|
|
|
—
|
|
|
Net income allocated to unvested participating restricted stock
|
|
(0.00)
|
|
|
(0.00)
|
|
|
(0.01)
|
|
|
(0.01)
|
|
|
Rounding
|
|
(0.01)
|
|
|
(0.01)
|
|
|
0.01
|
|
|
—
|
|
|
Diluted net income available to common stockholders per share, as
adjusted
|
|
$
|
1.37
|
|
|
$
|
1.59
|
|
|
$
|
6.01
|
|
|
$
|
6.19
|
|
|
|
|
|
|
|
|
|
|
|
Numerator for basic EPS-income available to common stockholders, as
adjusted
|
|
$
|
24,507
|
|
|
$
|
29,456
|
|
|
$
|
108,857
|
|
|
$
|
116,130
|
|
|
Effect of unvested participating restricted stock using the two-class
method
|
|
1
|
|
|
1
|
|
|
2
|
|
|
6
|
|
|
Numerator for diluted EPS-income available to common stockholders after
assumed conversions, as adjusted
|
|
$
|
24,508
|
|
|
$
|
29,457
|
|
|
$
|
108,859
|
|
|
$
|
116,136
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic EPS-weighted-average shares
|
|
17,826
|
|
|
18,358
|
|
|
18,030
|
|
|
18,637
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
90
|
|
|
117
|
|
|
95
|
|
|
131
|
|
|
Denominator for diluted EPS-weighted-average shares and assumed
conversions
|
|
17,916
|
|
|
18,475
|
|
|
18,125
|
|
|
18,768
|
|
|
|
|
(1)
|
Includes $398 and $2,869 of lease termination costs for the three and
twelve months ended December 31, 2016, respectively, reported in "closure and impairment charges" in the Consolidated
Statements of Comprehensive Income
|
|
(2)
|
Adjustments to deferred tax balances primarily due to changes in effective
state tax rate because of Support Center consolidation.
|
|
|
|
|
DineEquity, Inc. and Subsidiaries
|
|
Non-GAAP Financial Measures
|
|
(In thousands)
|
|
(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 contract
receivables, 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 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.
|
|
|
|
Twelve Months Ended
|
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
Cash flows provided by operating activities
|
|
$
|
118,110
|
|
|
$
|
135,509
|
|
|
Net receipts from notes and equipment contract receivables
|
|
10,036
|
|
|
13,403
|
|
|
Additions to property and equipment
|
|
(5,637)
|
|
|
(6,642)
|
|
|
Adjusted free cash flow
|
|
122,509
|
|
|
142,270
|
|
|
Dividends paid on common stock
|
|
(67,429)
|
|
|
(66,164)
|
|
|
Repurchase of DineEquity common stock
|
|
(55,343)
|
|
|
(70,014)
|
|
|
|
$
|
(263)
|
|
|
$
|
6,092
|
|
|
|
|
|
Restaurant Data
|
|
|
The following table sets forth, for the three and twelve months ended
December 31, 2016 and 2015, the number of "Effective Restaurants" in the Applebee's and IHOP systems and information
regarding the percentage change in sales at those restaurants compared to the same periods in the prior year. Sales at
restaurants that are owned by franchisees and area licensees are not attributable to the Company and, as such, the
percentage changes in sales presented below are based on non-GAAP sales data. 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
|
|
Twelve Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(unaudited)
|
|
Applebee's Restaurant Data
|
|
|
|
|
|
|
|
|
|
Effective Restaurants(a)
|
|
|
|
|
|
|
|
|
|
Franchise
|
|
2,020
|
|
|
2,020
|
|
|
2,027
|
|
|
2,004
|
|
|
Company
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
Total
|
|
2,020
|
|
|
2,020
|
|
|
2,027
|
|
|
2,017
|
|
|
|
|
|
|
|
|
|
|
|
System-wide(b)
|
|
|
|
|
|
|
|
|
|
Sales percentage change(c)
|
|
(13.5)%
|
|
|
7.7%
|
|
|
(6.8)%
|
|
|
3.4%
|
|
|
Domestic same-restaurant sales percentage change(d)
|
|
(7.2)%
|
|
|
(2.5)%
|
|
|
(5.0)%
|
|
|
0.2%
|
|
|
|
|
|
|
|
|
|
|
|
Franchise(b)(e)
|
|
|
|
|
|
|
|
|
|
Sales percentage change(c)
|
|
(13.5)%
|
|
|
8.8%
|
|
|
(6.2)%
|
|
|
3.9%
|
|
|
Domestic same-restaurant sales percentage change(d)
|
|
(7.2)%
|
|
|
(2.5)%
|
|
|
(5.0)%
|
|
|
0.2%
|
|
|
Average weekly domestic unit sales (in thousands)
|
|
$
|
42.8
|
|
|
$
|
45.7
|
|
|
$
|
45.3
|
|
|
$
|
47.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(unaudited)
|
|
IHOP Restaurant Data
|
|
|
|
|
|
|
|
|
|
Effective Restaurants(a)
|
|
|
|
|
|
|
|
|
|
Franchise
|
|
1,530
|
|
|
1,498
|
|
|
1,517
|
|
|
1,481
|
|
|
Area license
|
|
167
|
|
|
165
|
|
|
166
|
|
|
166
|
|
|
Company
|
|
10
|
|
|
11
|
|
|
10
|
|
|
12
|
|
|
Total
|
|
1,707
|
|
|
1,674
|
|
|
1,693
|
|
|
1,659
|
|
|
|
|
|
|
|
|
|
|
|
System-wide(b)
|
|
|
|
|
|
|
|
|
|
Sales percentage change(c)
|
|
(6.7)%
|
|
|
11.9%
|
|
|
(0.3)%
|
|
|
8.1%
|
|
|
Domestic same-restaurant sales percentage change(d)
|
|
(2.1)%
|
|
|
1.4%
|
|
|
(0.1)%
|
|
|
4.5%
|
|
|
|
|
|
|
|
|
|
|
|
Franchise(b)
|
|
|
|
|
|
|
|
|
|
Sales percentage change(c)
|
|
(7.1)%
|
|
|
1.9%
|
|
|
(0.3)%
|
|
|
8.2%
|
|
|
Domestic same-restaurant sales percentage change(d,
e)
|
|
(2.1)%
|
|
|
1.4%
|
|
|
(0.1)%
|
|
|
4.5%
|
|
|
Average weekly domestic unit sales (in thousands)
|
|
$
|
36.8
|
|
|
$
|
37.5
|
|
|
$
|
37.3
|
|
|
$
|
37.6
|
|
|
|
|
|
|
|
|
|
|
|
Area License (b)
|
|
|
|
|
|
|
|
|
|
Sales percentage change(c)
|
|
(1.0)%
|
|
|
1.0%
|
|
|
0.6%
|
|
|
5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
"Effective Restaurants" are the weighted average number of restaurants open
in a given fiscal period, adjusted to account for restaurants open for only a portion of the period. Information is
presented for all Effective Restaurants in the Applebee's and IHOP systems, which includes restaurants owned by the
Company as well as those owned by franchisees and area licensees.
|
|
|
|
(b)
|
"System-wide" sales are retail sales at Applebee's restaurants operated by
franchisees and IHOP restaurants operated by franchisees and area licensees, as reported to the Company, in addition to
retail sales at company-operated restaurants. Sales at restaurants that are owned by franchisees and area licensees
are not attributable to the Company. An increase in franchisees' reported sales will result in a corresponding increase
in our royalty revenue, while a decrease in franchisees' reported sales will result in a corresponding 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 and twelve months ended December 31, 2016 and 2015 were as
follows:
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
December 31,
|
|
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(In millions)
|
|
Reported sales (unaudited)
|
|
|
|
|
|
|
|
|
Applebee's franchise restaurant sales
|
$
|
1,036.4
|
|
|
$
|
1,198.1
|
|
|
$
|
4,418.6
|
|
|
$
|
4,711.9
|
|
|
IHOP franchise restaurant sales
|
731.4
|
|
|
787.4
|
|
|
2,939.9
|
|
|
2,948.3
|
|
|
IHOP area license restaurant sales
|
66.0
|
|
|
66.7
|
|
|
282.5
|
|
|
280.9
|
|
|
Total
|
$
|
1,833.8
|
|
|
$
|
2,052.2
|
|
|
$
|
7,641.0
|
|
|
$
|
7,941.1
|
|
|
|
|
(c)
|
"Sales percentage change" reflects, for each category of restaurants, the
percentage change in sales in any given fiscal period compared to the prior fiscal period for all restaurants in that
category. The sales percentage changes for the three and twelve months ended December 31, 2016 and 2015, respectively,
were impacted by a 14th and 53rd calender week in the respective fiscal 2015 periods.
|
|
|
|
(d)
|
"Domestic same-restaurant sales percentage change" reflects the percentage
change in sales, in any given fiscal period, compared to the same weeks in the prior year for domestic restaurants that
have been operated throughout both fiscal periods that are being compared and have been open for at least 18 months.
Because of new unit openings and restaurant closures, the domestic restaurants open throughout both fiscal periods being
compared may be different from period to period. Same-restaurant sales percentage change does not include data on IHOP
area license restaurants located in Florida.
|
|
|
|
(e)
|
The 2015 sales percentage change for Applebee's franchise restaurants was
impacted by the refranchising of 23 company-operated restaurants during 2015.
|
|
|
|
|
DineEquity, Inc. and Subsidiaries
|
|
Restaurant Data (unaudited)
|
|
|
The following table summarizes our restaurant development
activity:
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
December 31,
|
|
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Applebee's Restaurant Development Activity
|
|
|
|
|
|
|
Summary - beginning of period:
|
|
|
|
|
|
|
|
|
Franchise
|
2,027
|
|
|
2,018
|
|
|
2,033
|
|
|
1,994
|
|
|
Company
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
Total Applebee's restaurants, beginning of period
|
2,027
|
|
|
2,018
|
|
|
2,033
|
|
|
2,017
|
|
|
Franchise restaurants opened:
|
|
|
|
|
|
|
|
|
Domestic
|
6
|
|
|
10
|
|
|
19
|
|
|
27
|
|
|
International
|
3
|
|
|
11
|
|
|
10
|
|
|
17
|
|
|
Total franchise restaurants opened
|
9
|
|
|
21
|
|
|
29
|
|
|
44
|
|
|
Franchise restaurants closed:
|
|
|
|
|
|
|
|
|
Domestic
|
(19)
|
|
|
(5)
|
|
|
(39)
|
|
|
(19)
|
|
|
International
|
(1)
|
|
|
(1)
|
|
|
(7)
|
|
|
(9)
|
|
|
Total franchise restaurants closed
|
(20)
|
|
|
(6)
|
|
|
(46)
|
|
|
(28)
|
|
|
Net franchise restaurant development
|
(11)
|
|
|
15
|
|
|
(17)
|
|
|
16
|
|
|
Refranchised from Company restaurants
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
Net franchise restaurant increase
|
(11)
|
|
|
15
|
|
|
(17)
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
Summary - end of period:
|
|
|
|
|
|
|
|
|
Franchise
|
2,016
|
|
|
2,033
|
|
|
2,016
|
|
|
2,033
|
|
|
Company
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total Applebee's restaurants, end of period
|
2,016
|
|
|
2,033
|
|
|
2,016
|
|
|
2,033
|
|
|
|
|
|
|
|
|
|
|
IHOP Restaurant Development Activity
|
|
|
|
|
|
|
|
|
Summary - beginning of period:
|
|
|
|
|
|
|
|
|
Franchise
|
1,532
|
|
|
1,490
|
|
|
1,507
|
|
|
1,472
|
|
|
Area license
|
167
|
|
|
166
|
|
|
165
|
|
|
167
|
|
|
Company
|
10
|
|
|
11
|
|
|
11
|
|
|
11
|
|
|
Total IHOP restaurants, beginning of period
|
1,709
|
|
|
1,667
|
|
|
1,683
|
|
|
1,650
|
|
|
Franchise/area license restaurants opened:
|
|
|
|
|
|
|
|
|
Domestic franchise
|
17
|
|
|
20
|
|
|
43
|
|
|
44
|
|
|
Domestic area license
|
—
|
|
|
1
|
|
|
3
|
|
|
3
|
|
|
International franchise
|
9
|
|
|
3
|
|
|
20
|
|
|
8
|
|
|
Total franchise/area license restaurants opened
|
26
|
|
|
24
|
|
|
66
|
|
|
55
|
|
|
Franchise/area license restaurants closed:
|
|
|
|
|
|
|
|
|
Domestic franchise
|
(2)
|
|
|
(6)
|
|
|
(12)
|
|
|
(17)
|
|
|
Domestic area license
|
—
|
|
|
(2)
|
|
|
(1)
|
|
|
(5)
|
|
|
International franchise
|
—
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
|
Total franchise/area license restaurants closed
|
(2)
|
|
|
(8)
|
|
|
(16)
|
|
|
(22)
|
|
|
Net franchise/area license restaurant development
|
24
|
|
|
16
|
|
|
50
|
|
|
33
|
|
|
Refranchised from Company restaurants
|
—
|
|
|
—
|
|
|
1
|
|
|
3
|
|
|
Franchise restaurants reacquired by the Company
|
—
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
|
Net franchise/area license restaurant additions
|
24
|
|
|
16
|
|
|
51
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
Summary - end of period
|
|
|
|
|
|
|
|
|
Franchise
|
1,556
|
|
|
1,507
|
|
|
1,556
|
|
|
1,507
|
|
|
Area license
|
167
|
|
|
165
|
|
|
167
|
|
|
165
|
|
|
Company
|
10
|
|
|
11
|
|
|
10
|
|
|
11
|
|
|
Total IHOP restaurants, end of period
|
1,733
|
|
|
1,683
|
|
|
1,733
|
|
|
1,683
|
|
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dineequity-inc-reports-fourth-quarter-and-fiscal-2016-results-300415843.html
SOURCE DineEquity, Inc.