UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 26, 2000
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Commission File Number: 000-17962
Applebee's International, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 43-1461763
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4551 W. 107th Street, Suite 100, Overland Park, Kansas 66207
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(Address of principal executive offices and zip code)
(913) 967-4000
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(Registrant's telephone number, including area code)
None
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
On July 26, 2000, Applebee's International, Inc. (the "Company") issued a
press release entitled " Applebee's International Reports 22 Percent Increase in
Second Quarter Earnings Per Share of 62 Cents." The press release is attached as
Exhibit A hereto and incorporated herein by reference.
Item 7. Exhibits
(c) Exhibits
Exhibit Description
A Press release of the Company dated
July 26, 2000
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
APPLEBEE'S INTERNATIONAL, INC.
(Registrant)
Date: July 27, 2000 By: /s/ George D. Shadid
--------------------- ---------------------
George D. Shadid
Executive Vice President and
Chief Financial Officer
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<PAGE>
FOR IMMEDIATE RELEASE
Contact:
George Shadid, Chief Financial Officer
(913) 967-4035
Carol DiRaimo, Director of Investor Relations
(913) 967-4109
Applebee's International Reports 22 Percent Increase
in Second Quarter Earnings Per Share of 62 Cents
Overland Park, Kan., July 26, 2000 -- Applebee's International, Inc.
(Nasdaq:APPB) today reported net earnings of $16.7 million, or 62 cents per
share on both a basic and diluted basis, for the second quarter ended June 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 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 results
in the second quarter as EPS increased 22 percent and annualized 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 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 Bravo) of 16.9 percent."
Hill added, "An important element of our long-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. We are also pleased to announce that we have purchased, as part of our
brand-building strategy, a Summer Olympics 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 of our longer-term outlook."
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July 26, 2000
Page 2
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 concept and four specialty restaurants) on both a basic and diluted
basis. This represents an increase in basic and diluted earnings per share
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 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 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 1999 the company's board of directors
authorized an additional program to repurchase 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.
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July 26, 2000
Page 3
Applebee's International, Inc., headquartered in Overland Park, Kan., currently
develops, franchises and operates restaurants under the Applebee's Neighborhood
Grill and Bar brand, the largest casual dining concept in the world. There are
currently 1,226 Applebee's restaurants operating system-wide in 49 states and
eight international countries. Additional information on Applebee's
International can be found at the company's website (www.applebees.com).
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 filed with the Securities and Exchange Commission on February 9, 2000.
The company disclaims any obligation to update these forward-looking statements.
# # #
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<PAGE>
<TABLE>
<CAPTION>
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
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
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
=========== =========== ============ ===========
</TABLE>
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<PAGE>
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.
<TABLE>
<CAPTION>
13 Weeks Ended 26 Weeks Ended
----------------------------------------------------
June 25, June 27, June 25, June 27,
2000 1999 2000 1999
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
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%
============ ============ ============= ============
</TABLE>
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