DineEquity, Inc. Provides Financial Outlook for Fiscal 2012
Highly Franchised Business Model Generates Solid Free Cash Flow
- Applebee’s domestic system-wide same-restaurant sales performance to range between 0.5% and 2.5%.
- IHOP’s domestic system-wide same-restaurant sales performance to range between negative 1.5% and positive 1.5%.
- Restaurant operating margin at Applebee’s company-operated restaurants to range between 15.0% and 15.5%.
- Applebee’s franchisees to develop between 30 and 40 new restaurants, approximately half of which are expected to be opened in the U.S.
- IHOP franchisees and its area licensees to develop between 45 and 55 new restaurants, the majority of which are expected to be opened in the U.S.
-
Consolidated general & administrative expense to range between
$155 and $158 million , including non-cash stock-based compensation expense and depreciation of approximately$18 million . -
Consolidated interest expense to range between
$120 and $124 million , of which approximately$6 million is non-cash interest expense. - Federal income tax rate to be approximately 36%.
- Weighted average diluted shares outstanding to be approximately 18.5 million shares.
-
Consolidated cash from operations to range between
$110 and $122 million . -
Approximately
$13 million is expected to be generated from the structural run-off of the Company’s long-term receivables. -
Consolidated capital expenditures to range between
$18 and $20 million . -
Consolidated free cash flow (see “Non-GAAP Financial Measures” below)
to range between
$103 and $117 million . The Company currently expects its primary use of excess cash will be to fund further debt reduction.
The Company’s fiscal 2012 financial performance guidance reflects the
full-year impact of Applebee’s company-operated restaurants refranchised
in 2011 and
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About
Based in
Forward-Looking Statements
Statements contained in this 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," "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 substantial indebtedness; risk of future
impairment charges; 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; shortages or interruptions in the supply or delivery of food;
changing health or dietary preferences; our dependence upon our
franchisees; our engagement in business in foreign markets; harm to our
brands' reputation; litigation; environmental liability; liability
relating to employees; failure to comply with applicable laws and
regulations; failure to effectively implement restaurant development
plans; 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;
third-party claims with respect to intellectual property assets; heavy
dependence on information technology; failure to protect the integrity
and security of individually identifiable information; 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
Non-GAAP Financial Measures
This news release includes references to the Company's non-GAAP
financial measures "adjusted net income available to common stockholders
(adjusted EPS)," "EBITDA," "free cash flow," and "segment EBITDA."
"Adjusted EPS" is computed for a given period by deducting from net
income (loss) available to common stockholders for such period the
effect of any impairment and closure charges, any gain or loss related
to debt extinguishment, any intangible asset amortization, any non-cash
interest expense, any debt modification costs, any gain or loss related
to the disposition of assets and any income tax impact of operational
restructuring incurred in such period. This is presented on an aggregate
basis and a per share (diluted) basis. The Company defines "EBITDA" for
a given period is defined as income before income taxes less interest
expense, loss on retirement of debt and Series A preferred stock,
depreciation and amortization, impairment and closure charges, non-cash
stock-based compensation, gain/loss on disposition of assets and other
charge backs as defined by its credit agreement. "Free cash flow" for a
given period is defined as cash provided by operating activities, plus
receipts from notes and equipment contracts receivable ("long-term notes
receivable"), less dividends paid and capital expenditures. "Segment
EBITDA" for a given period is defined as gross segment profit plus
depreciation and amortization as well as interest charges related to the
segment. Management utilizes EBITDA for debt covenant purposes and free
cash flow to determine the amount of cash remaining for general
corporate and strategic purposes after the receipts from long-term notes
receivable, and the funding of operating activities, capital
expenditures and preferred dividends. Management believes this
information is helpful to investors to determine the Company's adherence
to debt covenants and the Company's cash available for these purposes.
Adjusted EPS, EBITDA, free cash flow and segment EBITDA 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
| 2012 Performance Guidance | ||||
| (In Millions) | ||||
| Cash flows from operating activities | $ 110-122 | |||
| Long-term receivables | 13 | |||
| Capital expenditures | (18-20) | |||
| Free cash flow | $ 103-117 |
Source:
Investor Contact
DineEquity,
Inc.
Ken Diptee
Executive Director, Investor Relations
818-637-3632
or
Media
Contact
Sard Verbinnen & Co
Lucy Neugart
415-618-8750