Dine Brands Global, Inc. Reports Fourth Quarter and Fiscal Year 2024 Results

Dine Brands Global, Inc. (NYSE:DIN), the parent company of Applebee's Neighborhood Grill & Bar^®, IHOP^® and Fuzzy's Taco Shop^® restaurants, today announced financial results for the fourth quarter and fiscal year 2024.

"Our financial results have demonstrated that this continues to be a dynamic operating environment and underscores our commitment to refreshing, reinvesting, and reinforcing our brands in the year ahead. For 2025, we have a clear plan that addresses both the short-term and long-term and are confident that, in partnership with our franchisees, we will elevate the guest experience and enhance our value propositions," said John Peyton, chief executive officer, Dine Brands Global, Inc.

Vance Chang, chief financial officer, Dine Brands Global, Inc., added, "Against a backdrop of market volatility, Dine continued to generate strong free cash flow in 2024. It speaks to our overall financial stability and highlights the resilience of the Dine platform through market cycles. Going into 2025, we will remain prudent with our capital and make the necessary investments and changes to drive improved performance."

Domestic Restaurant Sales for the Fourth Quarter of 2024

• Applebee's year-over-year domestic comparable same-restaurant sales declined 4.7% for the fourth quarter of 2024. Off-premise sales accounted for 21.6% of sales mix in the fourth quarter of 2024 representing per restaurant average weekly sales of approximately $11,000.

• IHOP's year-over-year domestic comparable same-restaurant sales declined 2.8% for the fourth quarter of 2024. Off-premise sales accounted for 20.4% of sales mix in the fourth quarter of 2024, representing per restaurant average weekly sales of approximately $7,800.

Fourth Quarter of 2024 Summary

• Total revenues for the fourth quarter of 2024 were $204.8 million compared to $206.3 million for the fourth quarter of 2023. The decline was primarily due to the decrease in franchise revenues primarily resulting from negative comparable same-restaurant sales growth at Applebee's and IHOP and a decrease in proprietary product sales, offset by an increase in company restaurant sales due to the acquisition of 47 Applebee's restaurants in the fourth quarter.

• General and Administrative ("G&A") expenses for the fourth quarter of 2024 were $52.3 million compared to $50.5 million for the fourth quarter of 2023. The variance was primarily attributable to organization restructuring costs and an increase in depreciation expense partially offset by a decrease in compensation-related expenses.

• GAAP net income available to common stockholders was $5.0 million, or earnings per diluted share of $0.34, for the fourth quarter of 2024 compared to net income available to common stockholders of $32.3 million, or earnings per diluted share of $2.14 for the fourth quarter of 2023. The decrease was primarily due to a prior year income tax benefit resulting from the conclusion of a state income tax audit settlement, a decrease in segment profit, net of tax, and an increase in closure and impairment charges partially offset by a current year gain on disposition of assets.

• Adjusted net income available to common stockholders was $12.9 million, or adjusted earnings per diluted share of $0.87, for the fourth quarter of 2024 compared to adjusted net income available to common stockholders of $21.1 million, or adjusted earnings per diluted share of $1.40, for the fourth quarter of 2023. The decrease was primarily due to a decrease in segment profit, net of tax. (See "Non-GAAP Financial Measures" for reconciliation of GAAP net income available to common stockholders to adjusted net income available to common stockholders.)

• Consolidated adjusted EBITDA for the fourth quarter of 2024 was $50.1 million compared to $62.2 million for the fourth quarter of 2023. (See "Non-GAAP Financial Measures" for reconciliation of GAAP net income to consolidated adjusted EBITDA.)

• Development activity by Applebee's and IHOP franchisees for the fourth quarter of 2024 resulted in 30 new restaurant openings and the closure of 19 restaurants.

2024 Summary

• Total 2024 revenues were $812.3 million compared to $831.1 million for the prior year. The decline was primarily due to a decrease in franchise revenues primarily resulting from negative comparable same-restaurant sales growth at Applebee's and IHOP and a decrease in rental revenues, partially offset by an increase in company-operated restaurant sales due to the acquisition of 47 Applebee's restaurants from franchisees in the fourth quarter.

• G&A expenses for 2024 were $196.7 million compared to $198.1 million for 2023. The decrease was primarily due to the stopping of the IHOP Flip'd initiative in the prior year, a decrease in professional services including acquisition costs and a decrease in occupancy costs, partially offset by an increase in depreciation expense and organization restructuring costs.

• GAAP net income available to common stockholders was $63.0 million, or earnings per diluted share of $4.22, for 2024 compared to net income available to common stockholders of $94.9 million, or earnings per diluted share of $6.22 for 2023. The decrease was primarily due to a decrease in segment profit, net of tax, a prior year income tax benefit resulting from the conclusion of a state income tax audit settlement and an increase in closure and impairment charges offset by a favorable swing in gain/loss on disposition of assets.

• Adjusted net income available to common stockholders was $79.8 million, or adjusted earnings per diluted share of $5.34, for 2024 compared to adjusted net income available to common stockholders of $101.4 million, or adjusted earnings per diluted share of $6.65, for 2023. The decrease was primarily due to a decrease in segment profit, net of tax, and a decrease in weighted-average diluted shares as a result of shares repurchases. (See "Non-GAAP Financial Measures" for reconciliation of GAAP net income available to common stockholders to adjusted net income available to common stockholders.)

• Consolidated adjusted 2024 EBITDA was $239.8 million compared to $256.4 million for 2023. (See "Non-GAAP Financial Measures" for reconciliation of GAAP net income to consolidated adjusted EBITDA.)

• Cash flows provided by operating activities for 2024 were $108.2 million. This compares to cash provided by operating activities of $131.1 million for 2023. The decrease was primarily due to a decrease in segment profit and a decrease in working capital offset by a decrease in G&A expenses.

• The Company had adjusted free cash flow of $106.4 million for 2024. This compares to adjusted free cash flow of $103.3 million for 2023. (See "Non-GAAP Financial Measures" for reconciliation of the Company's cash provided by operating activities to adjusted free cash flow.)

• Development activity by Applebee's and IHOP franchisees for 2024 resulted in 65 new restaurant openings and the closure of 83 restaurants.

Key Balance Sheet Metrics (as of December 31, 2024)

• Total cash, cash equivalents and restricted cash of approximately $248.6 million, of which approximately $186.7 million was unrestricted cash.

• Available borrowing capacity under the Variable Funding Senior Secured Notes is over $224 million.

GAAP Effective Tax Rate

The fiscal year 2024 effective tax rate of 27.5% applied to pretax book income was different than the statutory Federal income tax rate of 21% primarily due to state and local taxes and a lower tax deduction related to stock-based compensation.

Capital Returns to Equity Holders

During 2024, the Company repurchased approximately $12 million of its common stock and paid approximately $31 million in dividends. In 2023, the Company repurchased approximately $26 million of its common stock and paid approximately $32 million in dividends.

On February 21, 2025, the Company announced that its Board of Directors declared and approved a quarterly cash dividend of $0.51 per share of common stock. The dividend will be paid on April 4, 2025, to the Company's stockholders of record at the close of business on March 17, 2025.

Financial Performance Guidance for 2025

The Company introduced its fiscal 2025 guidance items:

• Applebee's domestic system-wide comparable same-restaurant sales performance is expected to range between negative 2% and positive 1%.

• IHOP's domestic system-wide comparable same-restaurant sales performance is expected to range between negative 1% and positive 2%.

• Domestic development activity for Applebee's franchisees is between 20 and 35 net fewer restaurants.

• Domestic development activity by IHOP franchisees and area licensees is expected to be between 10 net fewer restaurants and 10 net new openings.

• Consolidated adjusted EBITDA is expected to range between approximately $235 million and $245 million.

• G&A expenses are expected to range between approximately $200 million and $205 million. This total includes non-cash stock-based compensation expense and depreciation of approximately $35 million.

• Capital expenditures are expected to range between approximately $20 million and $30 million.

Dine Brands does not provide forward-looking guidance for GAAP net income because it is unable to predict certain items contained in the GAAP measure without unreasonable efforts. These items may include closure and impairment charges, loss on extinguishment of debt, gain or loss on disposition of assets, other non-income-based taxes and other items deemed not reflective of current operations.

Fourth Quarter of 2024 Earnings Conference Call Details

Dine Brands will host a conference call to discuss its results on March 5, 2025, at 9:00 a.m. Eastern time. A live webcast of the call, along with a replay will be available for a limited time at https://investors.dinebrands.com. 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 Pasadena, California, Dine Brands Global, Inc. (NYSE:DIN), through its subsidiaries and franchisees, supports and operates restaurants under the Applebee's Neighborhood Grill + Bar®, IHOP®, and Fuzzy's Taco Shop® brands. As of December 31, 2024, these three brands consisted of over 3,500 restaurants across 19 international markets. Dine Brands is one of the largest full-service restaurant companies in the world and in 2022 expanded into the Fast Casual segment. 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: general economic conditions, including the impact of inflation, particularly as it may impact our franchisees directly; 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 corporate strategies, including 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 including any insolvency or bankruptcy; credit risks from our IHOP franchisees operating under our previous IHOP business model in which we built and equipped IHOP restaurants and then franchised them to franchisees; insufficient insurance coverage to cover potential risks associated with the ownership and operation of restaurants; 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; risks of food-borne illness or food tampering; possible future impairment charges; 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; changes in U.S. government regulations and trade policies, including the imposition of tariffs and other trade barriers; 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; delivery initiatives and use of third-party delivery vendors; our allocation of human capital and 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; risks of major natural disasters, including earthquake, wildfire, tornado, flood or a man-made disaster, including terrorism, civil unrest or a cyber incident; risks of volatile or adverse weather conditions as a result of climate change; 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; changes in tax laws; failure to meet investor and stakeholder expectations regarding business responsibility matters; 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 intangible asset amortization, any non-cash interest expense, any gain or loss related to the disposition of assets, any gain or loss related to debt extinguishment, 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 interest expense, any income tax provision or benefit, any depreciation and amortization, any non-cash stock-based compensation, any closure and impairment charges, any gain or loss related to debt extinguishment, 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. 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.

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