Applebee's International Reports 22 Percent Increase in Second Quarter Earnings Per Share of 62 Cents.Business Editors OVERLAND PARK Overland Park, city (1990 pop. 111,790), Johnson co., NE Kans., a residential suburb of Kansas City; inc. 1960. There is printing and publishing, and the manufacture of apparel, aircraft parts, cement, prepared foods, salt, chemicals, marine accessories, and signs. , Kan Kan, river, China: see Gan. .--(BUSINESS WIRE)--July 26, 2000 Applebee's Applebee’s International, Inc. (NASDAQ: APPB) is a United States company which develops, franchises, and operates the Applebee's Neighborhood Grill and Bar restaurant chain. As of Feb. International, Inc. (Nasdaq:APPB APPB Array Processor with Pipelined Bus APPB Application Builder ) today reported net earnings of $16.7 million, or 62 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. on both a basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, for the second quarter ended June June: see month. 25, 2000. This represents a 22 percent increase in earnings per share as compared with 51 cents per share on both a basic and diluted basis for the second quarter of 1999. Comparable sales for company restaurants increased 1.6 percent for the second quarter and 3.2 percent for the 26-week period ended June 25, 2000. System-wide comparable sales increased 1.3 percent for the second quarter and 2.6 percent for the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. period, while comparable sales for franchise restaurants increased 1.2 percent and 2.5 percent, respectively. (In calculating comparable restaurant sales, restaurants open for at least 18 months are compared from period to period.) Commenting on the quarter, Lloyd L. Hill, chairman and chief executive officer, said, "Applebee's International continued to deliver strong bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. results in the second quarter as EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. increased 22 percent and annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on equity reached nearly 24 percent. These results substantially exceeded our strategic targets for EPS growth of at least 15 percent and return on equity of 20 percent. While system-wide same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of increased for the quarter, they did not reach our annual goal of at least 3 percent. However, restaurant margins before pre-opening expenses were a healthy 17.3 percent, as compared to prior year margins (excluding Rio See RapidIO and MP3. Bravo BRAVO Cardiology A clinical trial–Blockade of the GP IIB/IIIA Receptor to Avoid Vascular Occlusion– which evaluated lotrafiban in preventing strokes and acute MI. See GP IIB/IIIA. ) of 16.9 percent." Hill added, "An important element of our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. sales-building strategy is our new core menu. The menu has been in test in multiple company and franchise markets, and will be rolled out in company restaurants at the beginning of October October: see month. . We are also pleased to announce that we have purchased, as part of our brand-building strategy, a Summer Olympics Olympics Sports medicine An international competition among (traditionally) nonprofessional athletes trained in a particular summer or winter sport, which is held every 4 yrs in a selected city. See Paralympics, Special Olympics, World Medical Games. television package in addition to our previously planned network television spending of $37 million. We now expect system-wide comparable sales to increase 1 to 3 percent for the balance of the year. We remain confident in the viability of our core strategies in the marketing, food and operations arenas, and believe the lower sales growth in the second quarter is not indicative indicative: see mood. of our longer-term outlook." Other highlights for the second quarter and year-to-date periods ended June 25, 2000 included: o Net earnings for the 26-week period ended June 25, 2000 were $31.4 million, or $1.18 and $1.17 per share, respectively, on a basic and diluted basis. This compares to net earnings in the same period of 1999 of $27.9 million, or 95 cents per share (excluding the loss on disposition of the Rio Bravo Cantina The Rio Bravo concept began in Atlanta, Georgia, United States, the first restaurant opening in the Buckhead section of Atlanta in May 1985. The concept was created by Ray Shoenbaum in conjunction with Innovative Restaurant Concepts Inc (or IRC). concept and four specialty restaurants) on both a basic and diluted basis. This represents an increase in basic and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of 24 percent and 23 percent, respectively. o System-wide sales for the Applebee's concept were a record $655.1 million for the second quarter, a 10 percent increase over the prior year. System-wide sales for the 26-week period ended June 25, 2000 reached $1.29 billion. (System-wide sales include franchisee sales as reported to Applebee's International, as well as sales from company restaurants.) o Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for the Applebee's concept (comprised of company restaurant sales and franchise income) increased 6.1 percent for the second quarter. The second quarter of 1999 included $5.1 million of operating revenues related to the Rio Bravo Cantina can·ti·na n. Southwestern U.S. A bar that serves liquor. [Spanish, canteen, from Italian, wine cellar.] and specialty restaurants that were sold in April 1999. o Applebee's ended the quarter with 1,210 restaurants system-wide (268 company and 942 franchise restaurants). During the second quarter of 2000, there were 29 new Applebee's restaurants opened system-wide, including 3 company and 26 franchised restaurants. The company continues to expect new openings in 2000 to be at least 115 restaurants, including 25 to 27 company restaurants and 90 to 100 franchise restaurants. o As previously announced, in December December: see month. 1999 the company's board of directors authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: an additional program to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. up to $32.5 million of the company's common stock through the year 2000, subject to market conditions and pursuant to applicable restrictions under the company's debt agreements. During 2000, 185,000 shares of the company's common stock have been purchased in open market transactions at an aggregate cost of $5.0 million. The company expects earnings per share for 2000 to be in the range of $2.34 to $2.40, an increase of 17 to 20 percent over 1999 earnings per share of $2.00 (excluding an 11 cent per share net loss on the disposition of restaurants in 1999), and in excess of its previously stated goal of annual earnings per share growth of at least 15 percent. Earnings per share for the third quarter are expected to be in the range of 56 to 59 cents, and fourth quarter earnings per share (which will include one extra week as a result of this year being a 53-week fiscal year) are expected to be in the range of 61 to 64 cents. Applebee's International, Inc., headquartered in Overland Park, Kan., currently develops, franchises and operates restaurants under the Applebee's Neighborhood Grill Grill may refer to: In food:
The statements contained in this release regarding comparable sales increases, earnings per share and new restaurant development in 2000 are forward looking and based on current expectations. There are several risks and uncertainties that could cause actual results to differ materially from those described. For a discussion of the principal factors that could cause actual results to be materially different, the reader is referred to the company's current report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed with the Securities and Exchange Commission on February February: see month. 9, 2000. The company disclaims any obligation to update these forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. .
APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except per share amounts)
13 Weeks Ended 26 Weeks Ended
------------------ ------------------
June 25, June 27, June 25, June 27,
2000 1999 2000 1999
-------- -------- -------- --------
Revenues:
Company restaurant sales....$ 147,909 $ 145,832 $ 293,360 $ 307,592
Franchise income............ 20,736 18,151 40,535 35,691
-------- ------- --------- --------
Total operating revenues.. 168,645 163,983 333,895 343,283
-------- ------- --------- --------
Cost of Company
restaurant sales:
Food and beverage........... 39,323 39,776 79,381 84,541
Labor....................... 46,954 45,773 93,122 97,559
Direct and occupancy........ 36,095 36,124 71,755 77,128
Pre-opening expense......... 213 240 509 618
-------- ------- --------- --------
Total cost of Company
restaurant sales......... 122,585 121,913 244,767 259,846
-------- ------- --------- --------
General and administrative
expenses.................... 16,338 14,484 32,345 30,617
Amortization of intangible
assets...................... 1,455 1,518 2,906 3,051
Loss on disposition of
restaurants and equipment... 322 215 675 9,503
-------- ------- --------- --------
Operating earnings........... 27,945 25,853 53,202 40,266
-------- ------- --------- --------
Other income (expense):
Investment income........... 367 430 716 610
Interest expense............ (2,267) (2,522) (4,631) (5,577)
Other income (expense)...... 303 (164) 421 4
-------- ------- --------- --------
Total other expense....... (1,597) (2,256) (3,494) (4,963)
-------- ------- --------- --------
Earnings before income taxes. 26,348 23,597 49,708 35,303
Income taxes................. 9,696 8,731 18,293 13,062
-------- ------- --------- --------
Net earnings.................$ 16,652 $ 14,866 $ 31,415 $ 22,241
======== ======= ========= ========
Basic net earnings per
common share.................$ 0.62 $ 0.51 $ 1.18 $ 0.76
======== ======== ======== ========
Diluted net earnings per
common share................$ 0.62 $ 0.51 $ 1.17 $ 0.76
======== ======== ======== ========
Basic weighted average shares
outstanding................. 26,690 29,070 26,680 29,298
======== ======== ======== ========
Diluted weighted average
shares outstanding.......... 27,033 29,245 26,894 29,451
======== ======== ======== ========
The following table sets forth, for the periods indicated,
information derived from the Company's consolidated statements of
earnings expressed as a percentage of total operating revenues, except
where otherwise noted. Percentages may not add due to rounding.
13 Weeks Ended 26 Weeks Ended
------------------ ------------------
June 25, June 27, June 25, June 27,
2000 1999 2000 1999
-------- -------- -------- --------
Revenues:
Company restaurant sales.... 87.7% 88.9% 87.9% 89.6%
Franchise income............ 12.3 11.1 12.1 10.4
-------- -------- -------- --------
Total operating revenues.. 100.0% 100.0% 100.0% 100.0%
======== ======== ======== ========
Cost of sales (as a
percentage of Company
restaurant sales):
Food and beverage........... 26.6% 27.3% 27.1% 27.5%
Labor....................... 31.7 31.4 31.7 31.7
Direct and occupancy........ 24.4 24.8 24.5 25.1
Pre-opening expense......... 0.1 0.2 0.2 0.2
-------- -------- -------- --------
Total cost of sales....... 82.9% 83.6% 83.4% 84.5%
======== ======== ======== ========
General and administrative
expenses.................... 9.7% 8.8% 9.7% 8.9%
Amortization of intangible
assets...................... 0.9 0.9 0.9 0.9
Loss on disposition of
restaurants and equipment... 0.2 0.1 0.2 2.8
-------- -------- -------- --------
Operating earnings........... 16.6 15.8 15.9 11.7
-------- -------- -------- --------
Other income (expense):
Investment income........... 0.2 0.3 0.2 0.2
Interest expense............ (1.3) (1.5) (1.4) (1.6)
Other income (expense)...... 0.2 (0.1) 0.1 --
-------- -------- -------- --------
Total other expense....... (0.9) (1.4) (1.0) (1.4)
-------- -------- -------- --------
Earnings before income taxes. 15.6 14.4 14.9 10.3
Income taxes................. 5.7 5.3 5.5 3.8
-------- -------- -------- --------
Net earnings................. 9.9% 9.1% 9.4% 6.5%
======== ======== ======== ========
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