Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Dine Brands Global, Inc. Reports Second Quarter 2022 Results


Dine Brands Global, Inc. (NYSE: DIN), the parent company of Applebee's Neighborhood Grill + Bar® and IHOP® restaurants, today announced financial results for the second quarter of fiscal 2022.

"Thanks to the hard work of our team members and franchisees, Dine delivered a solid performance in the second quarter. Sustained off-premise traffic and continued recovery of dine-in contributed to positive comparable restaurant sales, driving average weekly sales at both brands above pre-pandemic levels," said John Peyton, chief executive officer of Dine Brands Global, Inc. "While the backdrop we are all operating in remains challenging, I'm confident we are well positioned for the current environment and for the long-term. Applebee's and IHOP are both value leaders in their categories with long track records of executing enhanced value and marketing propositions that meet guests where they are."

Vance Chang, chief financial officer, added, "We remain cautiously optimistic about Dine's near-term outlook and are reaffirming our 2022 guidance. Our strong balance sheet and asset-light model protect us in this volatile and inflationary environment, as we continue to return capital to shareholders. Our focus on delivering long term restaurant profitability continues, which we believe remains a key driver to our franchisee's ongoing investments in growth."

Domestic Restaurant Sales for the Second Quarter of 2022

Second Quarter of 2022 Summary

First Six Months of 2022 Summary

Key Balance Sheet Metrics (as of June 30, 2022)

GAAP Effective Tax Rate

The Company's effective tax rate for the second quarter of 2022 was 26.3% compared to 24.0% for second quarter of 2021. The variance was primarily due to the decrease of unrecognized tax benefits resulting from the closing of a state audit in the second quarter of 2021.

Capital Return to Shareholders

The Company repurchased 912,992 shares of its common stock in the second quarter of 2022 for a total of approximately $61 million.

On May 12, 2022, the Company announced that its Board of Directors declared and approved a 11% increase in the quarterly cash dividend to $0.51 per share of common stock. The dividend was paid on July 8, 2022, to the Company's stockholders of record at the close of business on June 20, 2022.

Financial Performance Guidance for 2022

The Company reiterates its fiscal 2022 guidance:

Second Quarter of 2022 Earnings Conference Call Details

Dine Brands will host a conference call to discuss its results on August 9, 2022 at 9:00 a.m. Eastern time. To access the call, please go to this link (https://register.vevent.com/register/BIc88b05e3032041849605213f69a1b860), and you will be provided with dial in details. A replay of the webcast will also be available for a limited time at https://investors.dinebrands.com/investor-overview

A live webcast of the call will be available on https://investors.dinebrands.com/ and may be accessed by visiting Events and Presentations under the site's Investors section. Participants should allow approximately ten minutes prior to the call's start time to visit the site and download any streaming media software needed to listen to the webcast. An online archive of the webcast will also be available on Events and Presentations under the Investors section of the Company's website.

About Dine Brands Global, Inc.

Based in Glendale, California, Dine Brands Global, Inc. (NYSE: DIN), through its subsidiaries, franchises restaurants under both Applebee's Neighborhood Grill + Bar® and IHOP® brands. With over 3,400 restaurants combined in 16 countries and 338 franchisees as of December 31, 2021, Dine Brands is one of the largest full-service restaurant companies in the world. For more information on Dine Brands, visit the Company's website located at www.dinebrands.com.

Forward-Looking Statements

Statements contained in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these forward-looking statements by words such as "may," "will," "would," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "plan," "goal" and other similar expressions. These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results to be materially different from those expressed or implied in such statements. These factors include, but are not limited to: uncertainty regarding the duration and severity of the ongoing COVID-19 pandemic and its ultimate impact on the Company; the effectiveness of related containment measures; general economic conditions, including the impact of inflation; our level of indebtedness; compliance with the terms of our securitized debt; our ability to refinance our current indebtedness or obtain additional financing; our dependence on information technology; potential cyber incidents; the implementation of restaurant development plans; our dependence on our franchisees; the concentration of our Applebee's franchised restaurants in a limited number of franchisees; the financial health of our franchisees; our franchisees' and other licensees' compliance with our quality standards and trademark usage; general risks associated with the restaurant industry; potential harm to our brands' reputation; possible future impairment charges; the effects of tax reform; trading volatility and fluctuations in the price of our stock; our ability to achieve the financial guidance we provide to investors; successful implementation of our business strategy; the availability of suitable locations for new restaurants; shortages or interruptions in the supply or delivery of products from third parties or availability of utilities; the management and forecasting of appropriate inventory levels; development and implementation of innovative marketing and use of social media; changing health or dietary preference of consumers; risks associated with doing business in international markets; the results of litigation and other legal proceedings; third-party claims with respect to intellectual property assets; our ability to attract and retain management and other key employees; compliance with federal, state and local governmental regulations; risks associated with our self-insurance; natural disasters, pandemics, epidemics, or other serious incidents; our success with development initiatives outside of our core business; the adequacy of our internal controls over financial reporting and future changes in accounting standards; and other factors discussed from time to time in the Corporation's Annual and Quarterly Reports on Forms 10-K and 10-Q and in the Corporation's other filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release are made as of the date hereof and the Corporation does not intend to, nor does it assume any obligation to, update or supplement any forward-looking statements after the date hereof to reflect actual results or future events or circumstances.

Non-GAAP Financial Measures

This press release includes references to the Company's non-GAAP financial measure "adjusted net income available to common stockholders", "adjusted earnings per diluted share (Adjusted EPS)", "Adjusted EBITDA" and "Adjusted free cash flow." Adjusted EPS is computed for a given period by deducting from net income or loss available to common stockholders for such period the effect of any closure and impairment charges, any gain or loss related to debt extinguishment, any intangible asset amortization, any non-cash interest expense, any gain or loss related to the disposition of assets, and other items deemed not reflective of current operations. This is presented on an aggregate basis and a per share (diluted) basis. Adjusted EBITDA is computed for a given period by deducting from net income or loss for such period the effect of any closure and impairment charges, any interest charges, any income tax provision or benefit, any non-cash stock-based compensation, any depreciation and amortization, any gain or loss related to the disposition of assets and other items deemed not reflective of current operations. "Adjusted free cash flow" for a given period is defined as cash provided by operating activities, plus receipts from notes and equipment contracts receivable, less capital expenditures. Management may use certain of these non-GAAP financial measures along with the corresponding U.S. GAAP measures to evaluate the performance of the business and to make certain business decisions. Management uses adjusted free cash flow in its periodic assessments of, among other things, the amount of cash dividends per share of common stock and repurchases of common stock and we believe it is important for investors to have the same measure used by management for that purpose. Adjusted free cash flow does not represent residual cash flow available for discretionary purposes. Additionally, adjusted EPS is one of the metrics used in determining payouts under the Company's annual cash incentive plan. Management believes that these non-GAAP financial measures provide additional meaningful information that should be considered when assessing the business and the Company's performance compared to prior periods and the marketplace. Adjusted EPS and adjusted free cash flow are supplemental non-GAAP financial measures and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP.

Dine Brands Global, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(In thousands, except per share amount)

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

Franchise revenues:

 

 

 

 

 

 

 

 

Royalties, franchise fees and other

 

$

94,148

 

 

$

94,630

 

 

$

184,497

 

 

$

174,721

 

Advertising revenues

 

 

74,111

 

 

 

72,324

 

 

 

144,994

 

 

 

133,209

 

Total franchise revenues

 

 

168,259

 

 

 

166,954

 

 

 

329,491

 

 

 

307,930

 

Company restaurant sales

 

 

39,511

 

 

 

38,194

 

 

 

78,927

 

 

 

74,143

 

Rental revenues

 

 

29,066

 

 

 

27,382

 

 

 

57,873

 

 

 

53,524

 

Financing revenues

 

 

958

 

 

 

1,089

 

 

 

1,926

 

 

 

2,221

 

Total revenues

 

 

237,794

 

 

 

233,619

 

 

 

468,217

 

 

 

437,818

 

Cost of revenues:

 

 

 

 

 

 

 

 

Franchise expenses:

 

 

 

 

 

 

 

 

Advertising expenses

 

 

74,111

 

 

 

72,324

 

 

 

144,994

 

 

 

133,209

 

Bad debt credit

 

 

(147

)

 

 

(291

)

 

 

(446

)

 

 

(2,284

)

Other franchise expenses

 

 

8,305

 

 

 

7,224

 

 

 

15,753

 

 

 

13,275

 

Total franchise expenses

 

 

82,269

 

 

 

79,257

 

 

 

160,301

 

 

 

144,200

 

Company restaurant expenses

 

 

37,881

 

 

 

34,759

 

 

 

75,289

 

 

 

67,643

 

Rental expenses:

 

 

 

 

 

 

 

 

Interest expense from finance leases

 

 

746

 

 

 

893

 

 

 

1,514

 

 

 

1,855

 

Other rental expenses

 

 

21,097

 

 

 

19,718

 

 

 

42,452

 

 

 

39,714

 

Total rental expenses

 

 

21,843

 

 

 

20,611

 

 

 

43,966

 

 

 

41,569

 

Financing expenses

 

 

106

 

 

 

115

 

 

 

213

 

 

 

243

 

Total cost of revenues

 

 

142,099

 

 

 

134,742

 

 

 

279,769

 

 

 

253,655

 

Gross profit

 

 

95,695

 

 

 

98,877

 

 

 

188,448

 

 

 

184,163

 

General and administrative expenses

 

 

44,063

 

 

 

39,276

 

 

 

85,611

 

 

 

79,187

 

Interest expense, net

 

 

15,359

 

 

 

15,739

 

 

 

30,892

 

 

 

32,235

 

Closure and impairment charges

 

 

1,311

 

 

 

2,571

 

 

 

1,457

 

 

 

4,581

 

Amortization of intangible assets

 

 

2,665

 

 

 

2,663

 

 

 

5,330

 

 

 

5,351

 

(Gain) loss on disposition of assets

 

 

(234

)

 

 

(30

)

 

 

(1,530

)

 

 

137

 

Income before income taxes

 

 

32,531

 

 

 

38,658

 

 

 

66,688

 

 

 

62,672

 

Income tax provision

 

 

(8,569

)

 

 

(9,296

)

 

 

(17,876

)

 

 

(7,707

)

Net income

 

$

23,962

 

 

$

29,362

 

 

$

48,812

 

 

$

54,965

 

Net income available to common stockholders:

 

 

 

 

 

 

 

 

Net income

 

$

23,962

 

 

$

29,362

 

 

$

48,812

 

 

$

54,965

 

Less: Net income allocated to unvested participating restricted stock

 

 

(673

)

 

 

(657

)

 

 

(1,273

)

 

 

(1,431

)

Net income available to common stockholders

 

$

23,289

 

 

$

28,705

 

 

$

47,539

 

 

$

53,534

 

Net income available to common stockholders per share:

 

 

 

 

 

 

 

 

Basic

 

$

1.45

 

 

$

1.70

 

 

$

2.90

 

 

$

3.21

 

Diluted

 

$

1.45

 

 

$

1.69

 

 

$

2.90

 

 

$

3.19

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

16,050

 

 

 

16,886

 

 

 

16,386

 

 

 

16,673

 

Diluted

 

 

16,080

 

 

 

16,977

 

 

 

16,418

 

 

 

16,802

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.51

 

 

$

?

 

 

$

0.97

 

 

$

?

 

Dividends paid per common share

 

$

?

 

 

$

?

 

 

$

0.86

 

 

$

?

 

Dine Brands Global, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

 

 

 

June 30, 2022

 

December 31, 2021

Assets

 

(Unaudited)

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

263,536

 

 

$

361,412

 

Receivables, net of allowance of $4,500 (2022) and $4,959 (2021)

 

 

91,888

 

 

 

119,968

 

Restricted cash

 

 

49,776

 

 

 

47,541

 

Prepaid gift card costs

 

 

25,028

 

 

 

28,175

 

Prepaid income taxes

 

 

6,890

 

 

 

10,529

 

Other current assets

 

 

12,710

 

 

 

6,728

 

Total current assets

 

 

449,828

 

 

 

574,353

 

Other intangible assets, net

 

 

534,247

 

 

 

539,390

 

Operating lease right-of-use assets

 

 

355,149

 

 

 

335,428

 

Goodwill

 

 

251,628

 

 

 

251,628

 

Property and equipment, net

 

 

175,265

 

 

 

179,411

 

Deferred rent receivable

 

 

46,293

 

 

 

50,257

 

Long-term receivables, net of allowance of $5,713 (2022) and $6,897 (2021)

 

 

43,076

 

 

 

42,493

 

Non-current restricted cash

 

 

16,400

 

 

 

16,400

 

Other non-current assets, net

 

 

9,880

 

 

 

10,006

 

Total assets

 

$

1,881,766

 

 

$

1,999,366

 

Liabilities and Stockholders' Deficit

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

38,537

 

 

$

55,956

 

Gift card liability

 

 

133,874

 

 

 

165,530

 

Current maturities of operating lease obligations

 

 

71,663

 

 

 

72,079

 

Current maturities of finance lease and financing obligations

 

 

10,662

 

 

 

10,693

 

Accrued employee compensation and benefits

 

 

21,202

 

 

 

40,785

 

Accrued advertising

 

 

33,574

 

 

 

33,752

 

Deferred franchise revenue, short-term

 

 

7,077

 

 

 

7,246

 

Dividends payable

 

 

8,239

 

 

 

6,919

 

Other accrued expenses

 

 

18,970

 

 

 

17,770

 

Total current liabilities

 

 

343,798

 

 

 

410,730

 

Long-term debt, net, less current maturities

 

 

1,280,747

 

 

 

1,279,623

 

Operating lease obligations, less current maturities

 

 

338,169

 

 

 

320,848

 

Finance lease obligations, less current maturities

 

 

63,562

 

 

 

59,625

 

Financing obligations, less current maturities

 

 

29,887

 

 

 

31,967

 

Deferred income taxes, net

 

 

75,064

 

 

 

76,228

 

Deferred franchise revenue, long-term

 

 

43,873

 

 

 

46,100

 

Other non-current liabilities

 

 

15,322

 

 

 

17,052

 

Total liabilities

 

 

2,190,422

 

 

 

2,242,173

 

Commitments and contingencies

 

 

 

 

Stockholders' deficit:

 

 

 

 

Preferred stock, $1 par value, 10,000,000 shares authorized, no shares issued or outstanding

 

 

?

 

 

 

?

 

Common stock, $0.01 par value; shares: 40,000,000 authorized; 2022 -24,991,163 issued, 16,746,028 outstanding; 2021 - 24,992,275 issued, 17,163,946 outstanding

 

 

250

 

 

 

250

 

Additional paid-in-capital

 

 

253,213

 

 

 

256,189

 

Retained earnings

 

 

68,265

 

 

 

35,415

 

Accumulated other comprehensive loss

 

 

(63

)

 

 

(59

)

Treasury stock, at cost; shares: 2022 - 8,245,135; 2021 - 7,828,329

 

 

(630,321

)

 

 

(534,602

)

Total stockholders' deficit

 

 

(308,656

)

 

 

(242,807

)

Total liabilities and stockholders' deficit

 

$

1,881,766

 

 

$

1,999,366

 

Dine Brands Global, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Six Months Ended

 

 

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

Net income

 

$

48,812

 

 

$

54,965

 

Adjustments to reconcile net income to cash flows provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

19,969

 

 

 

19,976

 

Non-cash stock-based compensation expense

 

 

8,327

 

 

 

5,612

 

Non-cash closure and impairment charges

 

 

1,348

 

 

 

4,514

 

Non-cash interest expense

 

 

1,436

 

 

 

1,427

 

Deferred income taxes

 

 

(773

)

 

 

(10,007

)

Deferred revenue

 

 

(2,396

)

 

 

(4,678

)

(Gain) loss on disposition of assets

 

 

(1,530

)

 

 

137

 

Other

 

 

(2,647

)

 

 

2,139

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable, net

 

 

(1,114

)

 

 

4,928

 

Deferred rent receivable

 

 

3,964

 

 

 

3,432

 

Current income tax receivables and payables

 

 

3,715

 

 

 

5,315

 

Gift card receivables and payables

 

 

(8,397

)

 

 

(3,837

)

Other current assets

 

 

(5,983

)

 

 

(2,036

)

Accounts payable

 

 

(9,656

)

 

 

6,195

 

Operating lease assets and liabilities

 

 

(5,724

)

 

 

(9,179

)

Accrued employee compensation and benefits

 

 

(18,894

)

 

 

1,466

 

Accrued advertising expenses

 

 

(178

)

 

 

31,066

 

Other current liabilities

 

 

(400

)

 

 

(5,419

)

Cash flows provided by operating activities

 

 

29,879

 

 

 

106,016

 

Cash flows from investing activities:

 

 

 

 

Principal receipts from notes, equipment contracts and other long-term receivables

 

 

9,476

 

 

 

9,703

 

Net additions to property and equipment

 

 

(12,749

)

 

 

(4,064

)

Proceeds from sale of property and equipment

 

 

3,658

 

 

 

946

 

Additions to long-term receivables

 

 

(1,069

)

 

 

?

 

Other

 

 

(93

)

 

 

(237

)

Cash flows (used in) provided by investing activities

 

 

(777

)

 

 

6,348

 

Cash flows from financing activities:

 

 

 

 

Repayment of long-term debt

 

 

?

 

 

 

(6,500

)

Repayment of revolving credit facility

 

 

?

 

 

 

(220,000

)

Dividends paid on common stock

 

 

(14,588

)

 

 

?

 

Repurchase of common stock

 

 

(102,394

)

 

 

?

 

Principal payments on finance lease obligations

 

 

(4,696

)

 

 

(5,244

)

Proceeds from stock options exercised

 

 

241

 

 

 

22,511

 

Repurchase of restricted stock for tax payments upon vesting

 

 

(2,353

)

 

 

(1,403

)

Tax payments for share settlement of restricted stock units

 

 

(953

)

 

 

(9,783

)

Cash flows used in financing activities

 

 

(124,743

)

 

 

(220,419

)

Net change in cash, cash equivalents and restricted cash

 

 

(95,641

)

 

 

(108,055

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

425,353

 

 

 

456,053

 

Cash, cash equivalents and restricted cash at end of period

 

$

329,712

 

 

$

347,998

 

Dine Brands Global, Inc. and Subsidiaries
Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)

 

Reconciliation of net income available to common stockholders to net income available to common stockholders, as adjusted for the following items: Closure and impairment charges; amortization of intangible assets; non-cash interest expense; gain or loss on disposition of assets; and the combined tax effect of the preceding adjustments, as well as related per share data:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

23,289

 

 

$

28,705

 

 

$

47,539

 

 

$

53,534

 

Closure and impairment charges

 

 

1,311

 

 

 

2,571

 

 

 

1,457

 

 

 

4,581

 

Amortization of intangible assets

 

 

2,665

 

 

 

2,663

 

 

 

5,330

 

 

 

5,351

 

Non-cash interest expense

 

 

722

 

 

 

715

 

 

 

1,436

 

 

 

1,427

 

(Gain) loss on disposition of assets

 

 

(234

)

 

 

(30

)

 

 

(1,530

)

 

 

137

 

Net income tax provision for above adjustments

 

 

(1,161

)

 

 

(1,598

)

 

 

(1,740

)

 

 

(3,104

)

Net income allocated to unvested participating restricted stock

 

 

(95

)

 

 

(97

)

 

 

(128

)

 

 

(219

)

Net income available to common stockholders, as adjusted

 

$

26,497

 

 

$

32,929

 

 

$

52,364

 

 

$

61,707

 

 

 

 

 

 

 

 

 

 

Diluted net income available to common stockholders per share:

 

 

 

 

 

 

 

 

Net income available to common stockholders per share:

 

$

1.45

 

 

$

1.69

 

 

$

2.90

 

 

$

3.19

 

Closure and impairment charges

 

 

0.06

 

 

 

0.11

 

 

 

0.07

 

 

 

0.20

 

Amortization of intangible assets

 

 

0.12

 

 

 

0.11

 

 

 

0.24

 

 

 

0.23

 

Non-cash interest expense

 

 

0.03

 

 

 

0.03

 

 

 

0.06

 

 

 

0.06

 

(Gain) loss on disposition of assets

 

 

(0.01

)

 

 

(0.00

)

 

 

(0.07

)

 

 

0.01

 

Net income allocated to unvested participating restricted stock

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.01

)

Rounding

 

 

0.01

 

 

 

0.01

 

 

 

?

 

 

 

(0.01

)

Diluted net income available to common stockholders per share, as adjusted

 

$

1.65

 

 

$

1.94

 

 

$

3.19

 

 

$

3.67

 

 

 

 

 

 

 

 

 

 

Numerator for basic EPS - net income available to common stockholders, as adjusted

 

$

26,497

 

 

$

32,929

 

 

$

52,364

 

 

$

61,707

 

Effect of unvested participating restricted stock using the two-class method

 

 

1

 

 

 

3

 

 

 

1

 

 

 

12

 

Numerator for diluted EPS - net income available to common stockholders, as adjusted

 

$

26,498

 

 

$

32,932

 

 

$

52,365

 

 

$

61,719

 

 

 

 

 

 

 

 

 

 

Denominator for basic EPS - weighted-average shares

 

 

16,050

 

 

 

16,886

 

 

 

16,386

 

 

 

16,673

 

Dilutive effect of stock options

 

 

30

 

 

 

91

 

 

 

32

 

 

 

129

 

Denominator for diluted EPS - weighted-average shares

 

 

16,080

 

 

 

16,977

 

 

 

16,418

 

 

 

16,802

 

Dine Brands Global, Inc. and Subsidiaries

Non-GAAP Financial Measures

(Unaudited)

 

Reconciliation of the Company's cash flows provided by operating activities to "adjusted free cash flow" (cash flows provided by operating activities, plus receipts from notes and equipment contracts receivable, less additions to property and equipment). Management uses this liquidity measure in its periodic assessments of, among other things, the amount of cash dividends per share of common stock and repurchases of common stock. We believe it is important for investors to have the same measure used by management for that purpose. Adjusted free cash flow does not represent residual cash flow available for discretionary purposes.

 

 

 

Six Months Ended

 

 

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

(In millions)

Cash flows provided by operating activities

 

$

29.9

 

 

$

106.0

 

Receipts from notes and equipment contracts receivable

 

 

5.9

 

 

 

5.4

 

Net additions to property and equipment

 

 

(12.7

)

 

 

(4.1

)

Adjusted free cash flow

 

 

23.1

 

 

 

107.3

 

Dividends paid on common stock

 

 

(14.6

)

 

 

?

 

Repurchase of common stock

 

 

(102.4

)

 

 

?

 

 

 

$

(93.9

)

 

$

107.3

 

 

Dine Brands Global, Inc. and Subsidiaries

Non-GAAP Financial Measures

(in thousands)

(Unaudited)

 

Reconciliation of the Company's net income to "adjusted EBITDA." The Company defines adjusted EBITDA as net income or loss, adjusted for the effect of closure and impairment charges, interest charges, income tax provision or benefit, depreciation and amortization, non-cash stock-based compensation, gain or loss on disposition of assets, other non-income based taxes and other items deemed not reflective of current operations. Management may use certain non-GAAP measures along with the corresponding U.S. GAAP measures to evaluate the performance of the Company and to make certain business decisions.

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

Net income, as reported

 

$

23,962

 

 

$

29,362

 

 

$

48,812

 

 

$

54,965

 

Closure and impairment charges

 

 

1,311

 

 

 

2,571

 

 

 

1,457

 

 

 

4,581

 

Interest charges on finance leases

 

 

1,217

 

 

 

1,383

 

 

 

2,468

 

 

 

2,847

 

All other interest charges

 

 

16,354

 

 

 

16,446

 

 

 

32,716

 

 

 

33,691

 

Income tax provision

 

 

8,569

 

 

 

9,296

 

 

 

17,876

 

 

 

7,707

 

Depreciation and amortization

 

 

10,022

 

 

 

9,972

 

 

 

19,952

 

 

 

19,959

 

Non-cash stock-based compensation

 

 

3,985

 

 

 

2,517

 

 

 

8,327

 

 

 

5,614

 

(Gain) loss on disposition of assets

 

 

(234

)

 

 

(30

)

 

 

(1,530

)

 

 

137

 

Other

 

 

882

 

 

 

221

 

 

 

1,194

 

 

 

353

 

Adjusted EBITDA

 

$

66,068

 

 

$

71,738

 

 

$

131,272

 

 

$

129,854

 

Dine Brands Global, Inc. and Subsidiaries
Restaurant Data
(Unaudited)

 

The following table sets forth, for the three and six months ended June 30, 2022 and 2021, the number of "Effective Restaurants" in the Applebee's and IHOP systems and information regarding the percentage change in sales at those restaurants compared to the same periods in the prior year and, as such, the percentage change in sales at Effective Restaurants is based on non-GAAP sales data. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. However, we believe that presentation of this information is useful in analyzing our revenues because franchisees and area licensees pay us royalties and advertising fees that are generally based on a percentage of their sales, and, where applicable, rental payments under leases that partially may be based on a percentage of their sales. Management also uses this information to make decisions about future plans for the development of additional restaurants as well as evaluation of current operations.

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

Applebee's

 

 

 

 

 

 

 

 

Global Effective Restaurants(a)

 

 

 

 

 

 

 

 

Franchise

 

 

1,604

 

 

 

1,623

 

 

 

1,605

 

 

 

1,625

 

Company

 

 

69

 

 

 

69

 

 

 

69

 

 

 

69

 

Total

 

 

1,673

 

 

 

1,692

 

 

 

1,674

 

 

 

1,694

 

 

 

 

 

 

 

 

 

 

System-wide(b)

 

 

 

 

 

 

 

 

Domestic sales percentage change(c)

 

 

1.4

%

 

 

125.3

%

 

 

7.2

%

 

 

43.3

%

Domestic same-restaurant sales percentage change(d)

 

 

1.8

%

 

 

102.2

%

 

 

7.6

%

 

 

46.4

%

 

 

 

 

 

 

 

 

 

Franchise(b)

 

 

 

 

 

 

 

 

Domestic sales percentage change(c)

 

 

1.3

%

 

 

125.2

%

 

 

7.3

%

 

 

43.0

%

Domestic same-restaurant sales percentage change(d)

 

 

1.7

%

 

 

102.1

%

 

 

7.6

%

 

 

46.1

%

Average weekly domestic unit sales (in thousands)

 

$

55.1

 

 

$

53.8

 

 

$

54.5

 

 

$

50.3

 

 

IHOP

 

 

 

 

 

 

 

 

Global Effective Restaurants(a)

 

 

 

 

 

 

 

 

Franchise

 

 

1,593

 

 

 

1,568

 

 

 

1,590

 

 

 

1,566

 

Area license

 

 

156

 

 

 

155

 

 

 

156

 

 

 

156

 

Total

 

 

1,749

 

 

 

1,723

 

 

 

1,746

 

 

 

1,722

 

 

 

 

 

 

 

 

 

 

System-wide(b)

 

 

 

 

 

 

 

 

Sales percentage change(c)

 

 

5.7

%

 

 

163.6

%

 

 

12.1

%

 

 

39.2

%

Domestic same-restaurant sales percentage change, including area license restaurants(d)

 

 

3.6

%

 

 

120.1

%

 

 

10.1

%

 

 

40.7

%

 

 

 

 

 

 

 

 

 

Franchise(b)

 

 

 

 

 

 

 

 

Sales percentage change(c)

 

 

5.6

%

 

 

163.1

%

 

 

12.3

%

 

 

38.5

%

Domestic same-restaurant sales percentage change(d)

 

 

3.6

%

 

 

118.2

%

 

 

10.4

%

 

 

39.4

%

Average weekly unit sales (in thousands)

 

$

37.9

 

 

$

36.4

 

 

$

36.4

 

 

$

32.9

 

 

 

 

 

 

 

 

 

 

Area License (b)

 

 

 

 

 

 

 

 

Sales percentage change(c)

 

 

6.2

%

 

 

168.8

%

 

 

10.0

%

 

 

46.7

%

Dine Brands Global, Inc. and Subsidiaries
Restaurant Data
(Unaudited)

 

(a)

"Global Effective Restaurants" are the weighted average number of restaurants open in a given fiscal period, adjusted to account for restaurants open for only a portion of the period. Information is presented for all Effective Restaurants in the Applebee's and IHOP systems, which includes restaurants owned by franchisees and area licensees as well as those owned by the Company. Effective Restaurants do not include units operated as ghost kitchens (small kitchens with no store-front presence, used to fill off-premise orders).

 

(b)

"System-wide" sales are retail sales at domestic Applebee's restaurants operated by franchisees and IHOP restaurants operated by franchisees and area licensees, as reported to the Company, in addition to retail sales at company-operated restaurants. System-wide sales do not include retail sales of ghost kitchens. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. An increase or decrease in franchisees' reported sales will result in a corresponding increase or decrease in our royalty revenue. Unaudited reported sales for Applebee's domestic franchise restaurants, Applebee's company-operated restaurants, IHOP franchise restaurants and IHOP area license restaurants for the three and six months ended June 30, 2022 and 2021 were as follows:

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

(In millions)

Reported sales

 

 

 

 

 

 

 

Applebee's domestic franchise restaurant sales

$

1,076.7

 

$

1,062.8

 

$

2,131.7

 

$

1,987.5

Applebee's company-operated restaurants

 

39.5

 

 

38.2

 

 

78.9

 

 

74.1

IHOP franchise restaurant sales

 

783.8

 

 

742.0

 

 

1,503.5

 

 

1,338.8

IHOP area license restaurant sales

 

75.3

 

 

70.9

 

 

145.8

 

 

132.6

Total

$

1,975.3

 

$

1,913.9

 

$

3,859.9

 

$

3,533.0

 

(c)

"Sales percentage change" reflects, for each category of restaurants, the percentage change in sales in any given fiscal period compared to the prior fiscal period for all restaurants in that category.

 

(d)

"Domestic same-restaurant sales percentage change" reflects the percentage change in sales, in any given fiscal period, compared to the same weeks in the prior year for domestic restaurants that have been operated during both fiscal periods that are being compared and have been open for at least 18 months. Because of new unit openings and restaurant closures, the domestic restaurants open during both fiscal periods being compared may be different from period to period.

Dine Brands Global, Inc. and Subsidiaries

Restaurant Data

(Unaudited)

 

 

Three Months Ended

Six Months Ended

 

June 30,

June 30,

 

2022

 

2021

 

2022

 

2021

 

Applebee's Restaurant Development Activity

 

 

 

Summary - beginning of period:

 

 

 

 

Franchise

1,606

 

1,636

 

1,611

 

1,640

 

Company

69

 

69

 

69

 

69

 

Total Applebee's restaurants, beginning of period

1,675

 

1,705

 

1,680

 

1,709

 

Franchise restaurants opened:

 

 

 

 

Domestic

1

 

?

 

2

 

2

 

International

?

 

1

 

?

 

1

 

Total franchise restaurants opened

1

 

1

 

2

 

3

 

Franchise restaurants closed:

 

 

 

 

Domestic

(2

)

(6

)

(6

)

(10

)

International

(1

)

(4

)

(3

)

(6

)

Total franchise restaurants closed

(3

)

(10

)

(9

)

(16

)

Net franchise restaurant reduction

(2

)

(9

)

(7

)

(13

)

Summary - end of period:

 

 

 

 

Franchise

1,604

 

1,627

 

1,604

 

1,627

 

Company

69

 

69

 

69

 

69

 

Total Applebee's restaurants, end of period

1,673

 

1,696

 

1,673

 

1,696

 

Domestic

1,574

 

1,590

 

1,574

 

1,590

 

International

99

 

106

 

99

 

106

 

IHOP Restaurant Development Activity

 

 

 

 

Summary - beginning of period:

 

 

 

 

Franchise

1,600

 

1,593

 

1,595

 

1,611

 

Area license

156

 

156

 

156

 

158

 

Company

?

 

4

 

?

 

3

 

Total IHOP restaurants, beginning of period

1,756

 

1,753

 

1,751

 

1,772

 

Franchise/area license restaurants opened:

 

 

 

 

Domestic franchise

8

 

7

 

15

 

15

 

Domestic area license

?

 

1

 

1

 

1

 

International franchise

5

 

1

 

7

 

1

 

Total franchise/area license restaurants opened

13

 

9

 

23

 

17

 

Franchise/area license restaurants closed:

 

 

 

 

Domestic franchise

(4

)

(14

)

(7

)

(30

)

Domestic area license

?

 

?

 

(1

)

(2

)

International franchise

(1

)

?

 

(2

)

(9

)

International area license

?

 

(1

)

?

 

(1

)

Total franchise/area license restaurants closed

(5

)

(15

)

(10

)

(42

)

Net franchise/area license restaurant additions (reductions)

8

 

(6

)

13

 

(25

)

Refranchised from Company restaurants

?

 

1

 

?

 

1

 

Franchise restaurants reacquired by the Company

?

 

?

 

?

 

(1

)

Net franchise/area license restaurant increase (decrease)

8

 

(5

)

13

 

(25

)

Summary - end of period

 

 

 

 

Franchise

1,608

 

1,588

 

1,608

 

1,588

 

Area license

156

 

156

 

156

 

156

 

Company

?

 

3

 

?

 

3

 

Total IHOP restaurants, end of period

1,764

 

1,747

 

1,764

 

1,747

 

Domestic

1,665

 

1,654

 

1,665

 

1,654

 

International

99

 

93

 

99

 

93

 

The restaurant counts and activity presented above do not include two domestic Applebee's ghost kitchens (small kitchens with no store-front presence, used to fill off-premise orders), 12 international Applebee's ghost kitchens and 28 international IHOP ghost kitchens at June 30, 2022. There were two domestic and one international Applebee's ghost kitchens and three international IHOP ghost kitchens at June 30, 2021.

 


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