DineEquity, Inc., the parent company of Applebee's Neighborhood Grill & Bar and IHOP restaurants, announced financial results for the fourth quarter and full year of fiscal 2015.
"Our latest fiscal year was highlighted by several notable achievements. We reported significant growth in adjusted earnings per diluted share, implemented strategic initiatives to accelerate growth across both brands and substantially expanded the international pipeline for longer term restaurant development," says Julia A. Stewart, chairman and chief executive officer of DineEquity, Inc. "We are building on our foundational accomplishments in 2015 and taking bolder steps to improve performance. DineEquity and its franchisees are making significant investments in important initiatives to drive sales and traffic at both brands."
In fiscal 2015, cash flows from operating activities were $135.5 million compared to $118.5 million in fiscal 2014. Free cash flow was $142.3 million compared to $120.9 million in fiscal 2014. The increase in cash flows from operating activities was mainly due to lower interest expense, higher gross profit and a favorable swing in working capital primarily resulting from the timing of collections of gift card receivables due to the 53rd calendar week in fiscal 2015.
Fourth Quarter of Fiscal 2015
- IHOP's domestic system-wide comparable same restaurant sales increased 1.4 percent for the fourth quarter of 2015.
- Applebee's domestic system-wide comparable same-restaurant sales declined 2.5 percent for the fourth quarter of 2015.
- IHOP's domestic system-wide comparable same restaurant sales increased 4.5 percent for fiscal 2015.
- Applebee's domestic system-wide comparable same-restaurant sales increased 0.2 percent for fiscal 2015.
- Financial Performance Guidance for Fiscal 2016
- Applebee's domestic system-wide same-restaurant sales performance is expected to range between negative 2 percent and positive 2 percent.
- IHOP's domestic system-wide same-restaurant sales performance is expected to range between positive 1 percent and positive 4 percent.
- Applebee's franchisees are projected to develop between 35 and 45 new restaurants, the majority of which are expected to be domestic openings.
- IHOP franchisees and its area licensee are projected to develop between 60 and 70 restaurants, the majority of which are expected to be domestic openings.
- Franchise segment profit is expected to be between $345 million and $360 million.
- Rental and Financing segments are expected to generate roughly $40 million in combined profit.
- General and administrative expenses are expected to range between $154 million and $158 million, including non-cash stock-based compensation expense and depreciation of approximately $20 million. This amount includes approximately $4 million of non-recurring costs related to the restaurant support center consolidation.
- 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 18.5 million shares.
- The income tax rate is expected to be approximately 37 percent.
- Cash flow provided by operating activities is expected to range between $115 million and $125 million.
- Capital expenditures are projected to be roughly $8 million.
- Free cash flowis projected to range between $116 million and $126 million. Guidance reflects non-recurring tax payments totaling approximately $10 million related to deferred gains from the repurchase of debt, primarily in 2008 and 2009, approximately $6 million in cash payments related to restaurant support center consolidation and the impact of fiscal 2016 containing 52 weeks compared to 53 weeks in fiscal 2015, taking into account the effects to working capital, including gift card receivables.