Dine Brands Global, Inc. (NYSE: DIN), the parent company of
Applebee’s Neighborhood Grill & Bar®, IHOP® and Fuzzy’s Taco
Shop® restaurants, today announced financial results for the third
quarter of fiscal year 2024.
“During the third quarter, we continued to experience consumer
pullback and the pressures of a highly promotional operating
environment. We know we need to do more in the near term to drive
traffic and get back to better top-line performance. For the fourth
quarter, we are enhancing our value proposition for guests and
remain focused on executing our plans across our brands,” said John
Peyton, chief executive officer, Dine Brands Global, Inc.
Vance Chang, chief financial officer, Dine Brands Global, Inc.,
added, “Our third quarter results demonstrated the resiliency of
our business model despite the challenges to our top line. Our cash
flow generation ability through market cycles is supported by our
asset-lite model and the scale of our platform. We are confident in
our ability to drive long-term value for our stakeholders.”
Domestic Restaurant Sales for the Third Quarter of
2024
- Applebee’s year-over-year domestic comparable same-restaurant
sales declined 5.9% for the third quarter of 2024. Off-premise
sales mix accounted for 21.7% in the third quarter of 2024 compared
to 21.5% in the third quarter of 2023.
- IHOP’s year-over-year domestic comparable same-restaurant sales
declined 2.1% for the third quarter of 2024. Off-premise sales mix
accounted for 19.3% in the third quarter of 2024 compared to 19.5%
in the third quarter of 2023.
Third Quarter of 2024 Summary
- Total revenues for the third quarter of 2024 were $195.0
million compared to $202.6 million for the third quarter of 2023.
The decrease was primarily due to the negative comparable
same-restaurant sales growth at Applebee’s and IHOP, partially
offset by increases in the number of effective franchise
restaurants and proprietary product sales at IHOP.
- General and Administrative (“G&A”) expenses for the third
quarter of 2024 were $45.4 million compared to $48.6 million for
the third quarter of 2023. The variance was primarily attributable
to lower compensation-related expenses offset by an increase in
depreciation expense.
- GAAP net income available to common stockholders was $18.5
million, or earnings per diluted share of $1.24, for the third
quarter of 2024 compared to net income available to common
stockholders of $18.0 million, or earnings per diluted share of
$1.19 for the third quarter of 2023. The increase was primarily due
to a decrease in G&A expenses and a decrease in closure and
impairment charges, partially offset by a decrease in segment
profit.
- Adjusted net income available to common stockholders was $21.4
million, or adjusted earnings per diluted share of $1.44, for the
third quarter of 2024 compared to adjusted net income available to
common stockholders of $22.3 million, or adjusted earnings per
diluted share of $1.46, for the third quarter of 2023. The decline
was primarily due to a decrease in segment profit, partially offset
by a decrease in G&A expenses. (See “Non-GAAP Financial
Measures” for definition and reconciliation of GAAP net income
available to common stockholders to adjusted net income available
to common stockholders.)
- Consolidated adjusted EBITDA for the third quarter of 2024 was
$61.9 million compared to $60.6 million for the third quarter of
2023. (See “Non-GAAP Financial Measures” for definition and
reconciliation of GAAP net income to consolidated adjusted
EBITDA.)
- Development activity by Applebee’s and IHOP franchisees for the
third quarter of 2024 resulted in 10 new restaurant openings and 19
restaurant closures.
First Nine Months of 2024 Summary
- Total revenues for the first nine months of 2024 were $607.5
million compared to $624.8 million for the first nine months of
2023. The decline was primarily due to the negative comparable
same-restaurant sales growth at the brands, partially offset by
increases in the number of effective franchise restaurants and
proprietary product sales at IHOP.
- G&A expenses for the first nine months of 2024 were $144.4
million compared to $147.5 million for the first nine months of
2023. The variance was primarily due to the stopping of the IHOP
Flip’d initiative in the prior period, a decrease in professional
services including acquisition costs, a decrease in occupancy costs
and a decrease in compensation-related expenses, partially offset
by an increase in depreciation expense.
- GAAP net income available to common stockholders was $58.0
million, or earnings per diluted share of $3.88, for the first nine
months of 2024 compared to net income available to common
stockholders of $62.6 million, or earnings per diluted share of
$4.09 for the first nine months of 2023. The decline was primarily
due to a decrease in segment profit, partially offset by a decrease
in G&A expenses.
- Adjusted net income available to common stockholders was $66.9
million, or adjusted earnings per diluted share of $4.48, for the
first nine months of 2024 compared to adjusted net income available
to common stockholders of $80.3 million, or adjusted earnings per
diluted share of $5.25, for the first nine months of 2023. The
decline was primarily due to a decrease in segment profit and an
increase in interest expense as a result of our April 2023
refinancing. (See “Non-GAAP Financial Measures” for definition and
reconciliation of GAAP net income available to common stockholders
to adjusted net income available to common stockholders.)
- Consolidated adjusted EBITDA for the first nine months of 2024
was $189.7 million compared to $194.2 million for the first nine
months of 2023. (See “Non-GAAP Financial Measures” for definition
and reconciliation of GAAP net income to consolidated adjusted
EBITDA.)
- Cash flows provided by operating activities for the first nine
months of 2024 were $77.7 million. This compares to cash flows
provided by operating activities of $79.3 million for the first
nine months of 2023. The decline was primarily due to a decrease in
segment profit, partially offset by a decrease in G&A expenses
and a favorable increase in working capital.
- Adjusted free cash flow was $77.8 million for the first nine
months of 2024. This compares to adjusted free cash flow of $54.0
million for the first nine months of 2023. (See “Non-GAAP Financial
Measures” for definition 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 nine months of 2024 resulted in 35 new restaurant openings
and 64 restaurant closures.
Key Balance Sheet Metrics (as of September 30, 2024)
- Total cash, cash equivalents and restricted cash of
approximately $235.1 million, of which approximately $169.6 million
was unrestricted cash.
- Available borrowing capacity under the Variable Funding Senior
Secured Notes is over $224 million.
GAAP Effective Tax Rate
The Company's effective tax rate was 26.9% for the nine months
ended September 30, 2024, as compared to 25.0% for the nine months
ended September 30, 2023. The effective tax rate for the nine
months ended September 30, 2024 was higher than the rate of the
prior comparable period primarily due to a lower tax deduction
related to stock-based compensation.
Capital Returns to Equity Holders
During the third quarter of 2024, paid quarterly cash dividends
totaling approximately $7.8 million.
Financial Performance Guidance for 2024
The Company’s fiscal year 2024 guidance items have been updated
as follows:
- Reiterated: Applebee’s domestic system-wide comparable
same-restaurant sales performance is expected to range between
negative 4% and negative 2%.
- Reiterated: IHOP’s domestic system-wide comparable
same-restaurant sales performance is expected to range between
negative 2% and 0%.
- Reiterated: Domestic development activity for Applebee’s
franchisees is between 25 and 35 net fewer restaurants.
- Reiterated: Domestic development activity by IHOP franchisees
and area licensees is expected to be between 0 and 10 net new
openings.
- Reiterated: Consolidated adjusted EBITDA is expected to range
between approximately $245 million and $255 million.
- Reduced: G&A expenses are expected to range between
approximately $195 million and $200 million (versus between $200
million and $205 million previously). This total includes non-cash
stock-based compensation expense and depreciation of approximately
$35 million.
- Reiterated: Gross capital expenditures are expected to range
between approximately $14 million and $16 million.
Dine Brands does not provide forward-looking guidance for GAAP
net income because it is unable to predict certain items contained
in the GAAP measure without unreasonable efforts. These items may
include closure and impairment charges, loss on extinguishment of
debt, gain or loss on disposition of assets, other non-income-based
taxes and other items deemed not reflective of current
operations.
Third quarter of 2024 Earnings Conference Call
Details
Dine Brands will host a conference call to discuss its results
on November 6, 2024, at 9:00 a.m. Eastern time. To access
the call, please click this conference call registration link, and
you will be provided with dial in details. A live webcast of the
call, along with a replay, will be available for a limited time at
https://investors.dinebrands.com. 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 Pasadena, California, Dine Brands Global, Inc. (NYSE:
DIN), through its subsidiaries and franchisees, supports and
operates restaurants under the Applebee's Neighborhood Grill +
Bar®, IHOP®, and Fuzzy’s Taco Shop® brands. As of September 30,
2024, these three brands consisted of over 3,500 restaurants across
19 international markets. Dine Brands is one of the largest
full-service restaurant companies in the world and in 2022 expanded
into the Fast Casual segment. 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: general economic conditions,
including the impact of inflation, particularly as it may impact
our franchisees directly; 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 including any insolvency or bankruptcy;
credit risks from our IHOP franchisees operating under our previous
IHOP business model in which we built and equipped IHOP restaurants
and then franchised them to franchisees; insufficient insurance
coverage to cover potential risks associated with the ownership and
operation of restaurants; 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; risks of food-borne illness or food
tampering; possible future impairment charges; 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; delivery initiatives and use of
third-party delivery vendors; our allocation of human capital and
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, any gain or loss related to
debt extinguishment, 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 interest expense, any income tax provision or
benefit, any depreciation and amortization, any non-cash
stock-based compensation, any closure and impairment charges, any
gain or loss related to debt extinguishment, 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. 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.
FBN-R
Dine Brands Global, Inc. and
Subsidiaries
Consolidated Statements of
Comprehensive Income
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Revenues:
Franchise revenues:
Royalties, franchise fees and other
$
96,565
$
99,135
$
299,161
$
303,998
Advertising revenues
69,789
73,385
219,568
226,401
Total franchise revenues
166,354
172,520
518,729
530,399
Company restaurant sales
267
308
840
1,839
Rental revenues
27,991
29,128
86,546
90,519
Financing revenues
422
628
1,421
2,009
Total revenues
195,034
202,584
607,536
624,766
Cost of revenues:
Franchise expenses:
Advertising expenses
69,789
73,385
219,568
226,401
Bad debt (credit) expense
151
(51
)
(395
)
2,593
Other franchise expenses
9,787
9,804
31,980
29,790
Total franchise expenses
79,727
83,138
251,153
258,784
Company restaurant expenses
304
323
915
1,833
Rental expenses:
Interest expense from finance leases
729
668
2,208
2,072
Other rental expenses
20,879
21,066
63,005
63,538
Total rental expenses
21,608
21,734
65,213
65,610
Financing expenses
76
91
241
283
Total cost of revenues
101,715
105,286
317,522
326,510
Gross profit
93,319
97,298
290,014
298,256
General and administrative expenses
45,390
48,618
144,435
147,545
Interest expense, net
18,369
19,059
54,291
51,549
Closure and impairment charges
366
1,774
1,442
3,088
Amortization of intangible assets
2,724
2,709
8,169
8,202
Loss on extinguishment of debt
—
—
—
10
Loss (gain) on disposition of assets
6
191
(57
)
2,309
Income before income taxes
26,464
24,947
81,734
85,553
Income tax provision
(7,403
)
(6,468
)
(22,018
)
(21,416
)
Net income
19,061
18,479
59,716
64,137
Other comprehensive income (loss) net
of tax:
Foreign currency translation
adjustment
2
(2
)
(3
)
(2
)
Total comprehensive income
$
19,063
$
18,477
$
59,713
$
64,135
Net income available to common
stockholders:
Net income
$
19,061
$
18,479
$
59,716
$
64,137
Less: Net income allocated to unvested
participating restricted stock
(553
)
(431
)
(1,760
)
(1,551
)
Net income available to common
stockholders
$
18,508
$
18,048
$
57,956
$
62,586
Net income available to common
stockholders per share:
Basic
$
1.24
$
1.19
$
3.88
$
4.10
Diluted
$
1.24
$
1.19
$
3.88
$
4.09
Weighted average shares
outstanding:
Basic
14,897
15,217
14,940
15,275
Diluted
14,897
15,220
14,940
15,289
Dine Brands Global, Inc. and
Subsidiaries
Consolidated Balance
Sheets
(In thousands)
September 30, 2024
December 31, 2023
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$
169,636
$
146,034
Receivables, net of allowance
83,414
127,937
Restricted cash
45,974
35,058
Prepaid gift card costs
23,493
29,545
Prepaid income taxes
806
3,445
Other current assets
8,108
15,759
Total current assets
331,431
357,778
Non-current restricted cash
19,500
19,500
Property and equipment, net
154,932
161,891
Operating lease right-of-use assets
282,202
275,214
Deferred rent receivable
26,721
33,326
Long-term receivables, net of
allowance
33,508
35,602
Goodwill
254,062
254,062
Other intangible assets, net
578,309
586,033
Other non-current assets, net
18,874
16,881
Total assets
$
1,699,539
$
1,740,287
Liabilities and Stockholders’
Deficit
Current liabilities:
Current maturities of long-term debt
$
100,000
$
100,000
Accounts payable
35,455
36,193
Gift card liability
137,020
175,640
Current maturities of operating lease
obligations
61,181
63,498
Current maturities of finance lease and
financing obligations
6,713
7,243
Accrued employee compensation and
benefits
12,063
23,211
Accrued advertising expenses
3,616
9,446
Dividends payable
7,790
7,827
Other accrued expenses
23,012
37,394
Total current liabilities
386,850
460,452
Long-term debt, net, less current
maturities
1,086,026
1,084,502
Operating lease obligations, less current
maturities
271,283
269,097
Finance lease obligations, less current
maturities
35,720
34,389
Financing obligations, less current
maturities
24,940
26,984
Deferred income taxes, net
57,493
60,829
Deferred franchise revenue, long-term
37,681
38,658
Other non-current liabilities
16,216
16,350
Total liabilities
1,916,209
1,991,261
Commitments and contingencies
Stockholders’ deficit:
Common stock
248
249
Additional paid-in-capital
252,994
256,542
Retained earnings
186,237
150,008
Accumulated other comprehensive loss
(67
)
(64
)
Treasury stock, at cost
(656,082
)
(657,709
)
Total stockholders’ deficit
(216,670
)
(250,974
)
Total liabilities and stockholders’
deficit
$
1,699,539
$
1,740,287
Dine Brands Global, Inc. and
Subsidiaries
Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2024
2023
Cash flows from operating
activities:
Net income
$
59,716
$
64,137
Adjustments to reconcile net income to
cash flows provided by operating activities:
Depreciation and amortization
29,049
26,221
Non-cash closure and impairment
charges
1,442
3,088
Non-cash stock-based compensation
expense
12,572
8,167
Non-cash interest expense
2,448
2,714
Loss on extinguishment of debt
—
10
Deferred income taxes
(3,335
)
(3,582
)
Deferred revenue
(3,431
)
(2,590
)
(Gain) loss on disposition of assets
(57
)
2,309
Other
(2,894
)
(1,577
)
Changes in operating assets and
liabilities:
Receivables, net
6,937
6,354
Deferred rent receivable
6,605
6,792
Current income tax receivable and
payable
1,352
(186
)
Gift card receivable and payable
(13,060
)
(13,588
)
Other current assets
7,624
6,358
Accounts payable
(2,100
)
(15,527
)
Operating lease assets and liabilities
(9,716
)
2,438
Accrued employee compensation and
benefits
(11,033
)
(4,447
)
Accrued advertising
(1,827
)
(9,750
)
Other current liabilities
(2,598
)
1,965
Cash flows provided by operating
activities
77,694
79,306
Cash flows from investing
activities:
Principal receipts from notes, equipment
contracts and other long-term receivables
10,388
6,686
Additions to property and equipment
(10,305
)
(31,968
)
Proceeds from sale of property and
equipment
305
—
Additions to long-term receivables
(649
)
(1,237
)
Other
(400
)
(113
)
Cash flows used in investing
activities
(661
)
(26,632
)
Cash flows from financing
activities:
Proceeds from issuance of long-term
debt
—
500,000
Repayment of long-term debt
—
(651,713
)
Borrowing from revolving credit
facility
—
30,000
Repayment of revolving credit facility
—
(30,000
)
Payment of debt issuance costs
—
(8,044
)
Dividends paid on common stock
(23,513
)
(31,740
)
Repurchase of common stock
(12,000
)
(20,017
)
Principal payments on finance lease and
financing obligations
(4,396
)
(5,329
)
Proceeds from stock options exercised
—
3,812
Repurchase of restricted stock for tax
payments upon vesting
(2,573
)
(4,139
)
Tax payments for share settlement of
restricted stock units
(30
)
(859
)
Other
(3
)
—
Cash flows used in financing
activities
(42,515
)
(218,029
)
Net change in cash, cash equivalents and
restricted cash
34,518
(165,355
)
Cash, cash equivalents and restricted cash
at beginning of period
200,592
324,984
Cash, cash equivalents and restricted cash
at end of period
$
235,110
$
159,629
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 expenses; loss on
extinguishment of debt; gain or loss on disposition of assets;
acquisition costs; IHOP Flip'd initiative; other EBITDA
adjustments; and the combined tax effect of the preceding
adjustments, as well as related per share data:
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Net income available to common
stockholders
$
18,508
$
18,048
$
57,956
$
62,586
Closure and impairment charges
366
1,774
1,442
3,088
Amortization of intangible assets
2,724
2,709
8,169
8,202
Non-cash interest expense
829
779
2,448
2,714
Loss (gain) on disposition of assets
6
191
(57
)
2,309
Loss on extinguishment of debt
—
—
—
10
Acquisition costs
—
—
—
804
IHOP Flip'd initiative
—
—
—
5,121
Other EBITDA adjustments
119
361
484
2,232
Net income tax provision for above
adjustments
(1,051
)
(1,512
)
(3,246
)
(6,365
)
Net income allocated to unvested
participating restricted stock
(89
)
(99
)
(274
)
(439
)
Net income available to common
stockholders, as adjusted
$
21,412
$
22,251
$
66,922
$
80,262
Diluted net income available to common
stockholders per share (a):
Net income available to common
stockholders
$
1.24
$
1.19
$
3.88
$
4.09
Closure and impairment charges
0.02
0.09
0.07
0.15
Amortization of intangible assets
0.14
0.13
0.40
0.40
Non-cash interest expense
0.04
0.04
0.12
0.13
Loss (gain) on disposition of assets
0.00
0.01
0.00
0.11
Loss on extinguishment of debt
—
—
—
0.00
Acquisition costs
—
—
—
0.04
IHOP Flip'd initiative
—
—
—
0.25
Other EBITDA adjustments
0.01
0.02
0.02
0.11
Net income allocated to unvested
participating restricted stock
(0.01
)
(0.01
)
(0.02
)
(0.03
)
Rounding
—
(0.01
)
0.01
—
Diluted net income available to common
stockholders per share, as adjusted
$
1.44
$
1.46
$
4.48
$
5.25
Numerator for basic EPS - net income
available to common stockholders, as adjusted
$
21,412
$
22,251
$
66,922
$
80,262
Effect of unvested participating
restricted stock using the two-class method
—
—
0
—
Numerator for diluted EPS - net income
available to common stockholders, as adjusted
$
21,412
$
22,251
$
66,922
$
80,262
Denominator for basic EPS -
weighted-average shares
14,897
15,217
14,940
15,275
Dilutive effect of stock options
—
3
—
14
Denominator for diluted EPS -
weighted-average shares
14,897
15,220
14,940
15,289
_________________________________
(a)
Diluted net income available to
common stockholders per share for the three and nine months ended
September 30, 2024 and 2023 presented on an after-tax basis.
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.
Nine Months Ended September
30,
2024
2023
(In thousands)
Cash flows provided by operating
activities
$
77,694
$
79,306
Principal receipts from notes and
equipment contracts
10,388
6,686
Net additions to property and
equipment
(10,305
)
(31,968
)
Adjusted free cash flow
77,777
54,024
Repayment of long-term debt, net
—
(151,713
)
Dividends paid on common stock
(23,513
)
(31,740
)
Repurchase of common stock
(12,000
)
(20,017
)
$
42,264
$
(149,446
)
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 interest expense, income tax provision or
benefit, depreciation and amortization, non-cash stock-based
compensation, closure and impairment charges, loss on
extinguishment of debt, gain or loss on disposition of assets, 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 September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Net income, as reported
$
19,061
$
18,479
$
59,716
$
64,137
Interest expense on finance leases
729
668
2,208
2,072
All other interest expense
20,748
21,178
62,260
58,672
Income tax provision
7,403
6,468
22,018
21,416
Depreciation and amortization
9,654
8,587
29,049
26,221
Non-cash stock-based compensation
3,816
2,858
12,572
8,167
Closure and impairment charges
366
1,774
1,442
3,088
Loss on extinguishment of debt
—
—
—
10
Loss (gain) on disposition of assets
6
191
(57
)
2,309
IHOP Flip'd initiative
—
—
—
5,121
Other
119
361
484
3,036
Adjusted EBITDA
$
61,902
$
60,564
$
189,692
$
194,249
Dine Brands Global, Inc. and
Subsidiaries Restaurant Data (Unaudited)
The following table sets forth, for the three and nine months
ended September 30, 2024, the number of “Effective Restaurants” in
the Applebee’s, IHOP and Fuzzy's 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 September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Applebee's Restaurant Data
Global Effective Restaurants(a)
Franchise
1,620
1,654
1,627
1,663
Company
—
—
—
—
Total
1,620
1,654
1,627
1,663
System-wide(b)
Domestic sales percentage change(c)
(7.1
)%
(3.2
)%
(5.3
)%
0.3
%
Domestic same-restaurant sales percentage
change(d)
(5.9
)%
(2.4
)%
(4.1
)%
0.9
%
Franchise(b)
Domestic sales percentage change(c)
(7.1
)%
0.4
%
(5.3
)%
4.0
%
Domestic same-restaurant sales percentage
change(d)
(5.9
)%
(2.4
)%
(4.1
)%
0.9
%
Average weekly domestic unit sales (in
thousands)
$
49.5
$
52.1
$
52.7
$
54.4
IHOP Restaurant Data
Global Effective Restaurants(a)
Franchise
1,645
1,631
1,645
1,626
Area license
155
156
155
156
Total
1,800
1,787
1,800
1,782
System-wide(b)
Sales percentage change(c)
(1.6
)%
4.2
%
(0.5
)%
6.6
%
Domestic same-restaurant sales percentage
change, including area license restaurants(d)
(2.1
)%
2.0
%
(1.7
)%
4.2
%
Franchise(b)
Sales percentage change(c)
(1.3
)%
4.5
%
(0.4
)%
6.9
%
Domestic same-restaurant sales percentage
change(d)
(1.9
)%
2.0
%
(1.7
)%
4.2
%
Average weekly unit sales (in
thousands)
$
37.0
$
37.8
$
37.7
$
38.3
Area License(b)
Sales percentage change(c)
(3.8
)%
1.1
%
(1.6
)%
4.0
%
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Fuzzy's Restaurant Data
(Unaudited)
Global Effective Restaurants(a)
Franchise
120
136
124
135
Company
1
1
1
2
Total
121
137
125
137
System-wide(b)
Domestic sales percentage change(c)
(15.8
)%
(5.2
)%
(13.7
)%
(1.1
)%
Domestic same-restaurant sales percentage
change(d)
(9.6
)%
(6.1
)%
(8.9
)%
(3.6
)%
Franchise(b)
Domestic sales percentage change(c)
(15.8
)%
(3.8
)%
(13.3
)%
(0.3
)%
Domestic same-restaurant sales percentage
change(d)
(9.6
)%
(6.1
)%
(8.9
)%
(3.7
)%
Average weekly domestic unit sales (in
thousands)
$
29.4
$
30.7
$
30.0
$
31.6
_________________________________
(a)
“Effective Restaurants” are the
weighted average number of restaurants open in each 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 consist of 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 Applebee’s and Fuzzy'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 Fuzzy's 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 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 and Fuzzy's domestic franchise restaurants,
Fuzzy's company-operated restaurants, IHOP franchise restaurants
and IHOP area license restaurants were as follows:
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Reported sales (in millions)
Applebee's franchise restaurant sales
$
1,007.7
$
1,085.3
$
3,230.5
$
3,411.5
IHOP franchise restaurant sales
790.3
801.0
2,416.2
2,425.9
IHOP area license restaurant sales
71.4
74.3
224.4
228.1
Fuzzy's franchise restaurant sales
45.8
54.4
144.9
167.1
Fuzzy's company-operated restaurants
0.3
0.3
0.9
1.9
Total
$
1,915.5
$
2,015.3
$
6,016.9
$
6,234.5
(c)
“Sales percentage change”
reflects, for each category of restaurants, the percentage change
in sales in any given fiscal period compared to the prior 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
period, for domestic restaurants that have been operated during
both periods that are being compared and have been open for at
least 18 months. Because of new restaurant 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)
Restaurant Development Activity
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Applebee's
Summary - beginning of period:
Franchise
1,625
1,661
1,642
1,678
Company
—
—
—
—
Beginning of period
1,625
1,661
1,642
1,678
Franchise restaurants opened:
Domestic
—
2
—
3
International
4
2
9
5
Total franchise restaurants opened
4
4
9
8
Franchise restaurants permanently
closed:
Domestic
(9
)
(12
)
(25
)
(28
)
International
(2
)
(1
)
(8
)
(6
)
Total franchise restaurants permanently
closed
(11
)
(13
)
(33
)
(34
)
Net franchise restaurant
reduction
(7
)
(9
)
(24
)
(26
)
Summary - end of period:
Franchise
1,618
1,652
1,618
1,652
Company
—
—
—
—
Total Applebee's restaurants, end of
period
1,618
1,652
1,618
1,652
Domestic
1,511
1,544
1,511
1,544
International
107
108
107
108
IHOP
Summary - beginning of period:
Franchise
1,656
1,634
1,657
1,625
Area license
155
156
157
156
Total IHOP restaurants, beginning of
period
1,811
1,790
1,814
1,781
Franchise/area license restaurants
opened:
Domestic franchise
4
5
14
27
Domestic area license
—
—
1
2
International franchise
2
5
11
11
Total franchise/area license restaurants
opened
6
10
26
40
Franchise/area license restaurants
permanently closed:
Domestic franchise
(7
)
(5
)
(24
)
(23
)
Domestic area license
—
—
(3
)
(2
)
International franchise
(1
)
(1
)
(4
)
(2
)
Total franchise/area license restaurants
permanently closed
(8
)
(6
)
(31
)
(27
)
Net increase (decrease) in
franchise/area license restaurants
(2
)
4
(5
)
13
Summary - end of period:
Franchise
1,654
1,638
1,654
1,638
Area license
155
156
155
156
Total IHOP restaurants, end of
period
1,809
1,794
1,809
1,794
Domestic
1,684
1,681
1,684
1,681
International
125
113
125
113
Dine Brands Global, Inc. and
Subsidiaries
Restaurant Data
(Unaudited)
Restaurant Development Activity
(continued)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Fuzzy's
Summary - beginning of period:
Franchise
124
137
131
134
Company
1
1
1
3
Beginning of period
125
138
132
137
Franchise restaurants opened:
Domestic
1
1
1
3
Franchise restaurants permanently
closed:
Domestic
(7
)
(1
)
(14
)
(2
)
Net franchise restaurant addition
(reduction)
(6
)
—
(13
)
1
Refranchised from Company restaurants
—
—
—
2
Net franchise restaurant addition
(reduction)
(6
)
—
(13
)
3
Summary - end of period:
Franchise
118
137
118
137
Company
1
1
1
1
Total Fuzzy's restaurants, end of
period
119
138
119
138
Domestic
119
138
119
138
International
—
—
—
—
The restaurant counts and activity presented above include 13
dual-branded international Applebee's and IHOP restaurants at
September 30, 2024, and six dual-branded international Applebee’s
and IHOP restaurants at September 30, 2023, which are tabulated in
both brands’ activities. Dual-branded restaurants are defined as
restaurants that run two of our concepts and share an entrance,
front of the house staff and a kitchen.
The restaurant counts and activity presented above do not
include one domestic Applebee's ghost kitchen (small kitchens with
no store-front presence, used to fill off-premise orders), seven
international Applebee's ghost kitchens and 34 international IHOP
ghost kitchens at September 30, 2024, and one domestic Applebee's
ghost kitchen, 10 international Applebee's ghost kitchens and 38
international IHOP ghost kitchens at September 30, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106969589/en/
Investor Contact Matt Lee
Sr. Vice President, Finance and Investor Relations Dine Brands
Global, Inc. IR@dinebrands.com Media
Contact Susan Nelson Sr. Vice President, Global
Communications Dine Brands Global, Inc.
Mediainquiries@dinebrands.com
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