DineEquity, Inc. Provides Financial Outlook for Fiscal 2011

DineEquity, Inc. Provides Financial Outlook for Fiscal 2011DineEquity, the parent company of Applebee’s Neighborhood Grill & Bar and IHOP Restaurants, today provided financial guidance for the current fiscal year and highlighted key operational and financial benchmarks that it believes will drive the performance of its businesses in 2011. 

The Company’s fiscal 2011 financial performance guidance excludes any impact from future sales of Applebee’s company-operated restaurants. DineEquity remains committed to its long-term strategic objective of transitioning Applebee’s into a more highly franchised restaurant system over time. It continues to actively market substantially all company-operated restaurants, but the timing of future transactions are unpredictable. The pace of additional refranchising activities will be driven by the Company’s ability to transact with quality franchise partners who have access to capital and a willingness to enter into transactions at valuations that meet expectations. Should company-operated Applebee’s restaurants be sold this year, DineEquity plans to update its financial performance guidance accordingly. This would be done in conjunction with the regular quarterly reporting schedule following any transaction announcement.

DineEquity provided fiscal 2011 guidance on the following key financial performance metrics:

  • Consolidated cash from operations to range between $125 and $135 million.
  • Approximately $13 million is expected to be generated from the structural run-off of the Company’s long-term receivables. 
  • Consolidated capital expenditures of approximately $26 million. 
  • Consolidated free cash flow (see “References to Non-GAAP Information” below) to range between $112 and $122 million. The Company currently expects its primary use of excess cash will be to fund further debt reduction.
  • Applebee’s domestic system-wide same-store sales performance to range between 1% and 3%.
  • IHOP’s domestic system-wide same-store sales performance to range between negative 2% and positive 1%. 
  • Restaurant operating margin at Applebee’s company-operated restaurants to range between 14.8% and 15.2%. 
  • Consolidated General & Administrative expense to range between $157 and $160 million, including non-cash stock-based compensation expense and depreciation of approximately $18 million.
  • Consolidated interest expense to range between $140 and $145 million, of which approximately $7 million is non-cash interest expense.
  • Applebee’s franchisees to develop between 24 and 28 new restaurants, approximately half of which are expected to be opened internationally.
  • IHOP franchisees and its Florida area licensee to develop between 55 and 65 new restaurants, the majority of which are expected to be opened in the U.S.
  • Federal income tax rate to be approximately 36%. 
  • Weighted average diluted shares outstanding to be approximately 18 million shares. 

In addition to the 2011 financial performance guidance provided in this news release, DineEquity has provided supplemental guidance information regarding the continued sale of Applebee’s company-operated restaurants and the expected financial impact that it should have on the Company’s long-term financial performance. This information can be accessed by visiting the Calls & Presentations section of DineEquity’s Investor Relations website at http://investors.dineequity.com and referring to the supporting materials for the Company’s fourth quarter and fiscal 2010 investor call webcast.

Based in Glendale, California, DineEquity, Inc., through its subsidiaries, franchises and operates restaurants under the Applebee’s Neighborhood Grill & Bar and IHOP brands. With nearly 3,500 restaurants combined, DineEquity is the largest full-service restaurant company in the world. For more information on DineEquity, visit the Company’s Web site located at www.dineequity.com.