Financial Data and Key Metrics Changes - For Q4 2020, adjusted EPS was $0.39, down from $1.78 in Q4 2019, and for the full year 2020, adjusted EPS was $1.79 compared to $6.95 in 2019, reflecting a significant decline in customer traffic due to pandemic restrictions [19][25] - Total cash and cash equivalents at the end of 2020 were $456 million, including restricted cash of $72.7 million, which was $64 million higher than the end of 2019 [17][18] - Consolidated adjusted EBITDA for 2020 was $158.7 million, down from $273.5 million in 2019, primarily due to a decline in customer traffic [25] Business Line Data and Key Metrics Changes - Applebee's comp sales improved from a decline of 49.4% in Q2 to a decline of 1.9% in October, but faced a decline of 15.0% in November and 30.1% in December due to COVID-19 resurgence [29] - IHOP's comp sales improved from a decline of 59.1% in Q2 to a decline of 13.1% in Q4, with January 2021 showing a decline of 26.8% [40][41] Market Data and Key Metrics Changes - Off-premise sales for both brands maintained approximately one-third of total sales during Q4 2020, indicating a shift in consumer behavior that is expected to persist beyond the pandemic [12] - In February, Applebee's sales mix consisted of 63% dine-in, 22% Carside To-Go, and 15% delivery, while IHOP's sales mix was 66% dine-in, 16.9% To-Go, and 17.1% delivery [32][42] Company Strategy and Development Direction - The company aims to navigate the end of the crisis, win the recovery, and evaluate long-term growth vehicles, including new prototypes, virtual brands, and ghost kitchens [13][14] - Dine Brands is focusing on enhancing its off-premise business and investing in technology to support this growth, as well as preparing marketing campaigns and new products for recovery [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a rebound in the second half of 2021, driven by increased vaccination rates and a return to indoor dining [12][50] - The company views the pandemic as both a threat and an opportunity, emphasizing the importance of maintaining liquidity and flexibility while investing in new digital and menu offerings [15][50] Other Important Information - The company provided approximately $55.7 million in royalty advertising fees and rent payment deferrals to franchisees, with repayments on track [24] - The franchisee collection rate for royalty and marketing fees stands at approximately 99% [11] Q&A Session Summary Question: Can you provide insights on regional performance, particularly in markets with fewer restrictions? - Management noted that geographies with fewer restrictions performed well, with a larger percentage of dine-in sales compared to the national average [52][53] Question: Was last week's average weekly sales for Applebee's positive? - Management refrained from quantifying but indicated a significant positive trajectory shift in sales [56] Question: Clarification on the potential closures at IHOP? - The program for evaluating closures has concluded with 41 closures, and future closures will be assessed as part of regular business operations [58][60] Question: Is marketing back on track, and what are the expectations for virtual brands? - Marketing spending was scaled back in early 2021, but is expected to improve in Q2 and beyond, with virtual brands showing steady improvement [61] Question: What is the current status of dining room openings for IHOP and Applebee's? - IHOP has about 33 restaurants not open for business, while Applebee's has about 10 dining rooms currently closed [69][70]
Dine Brands(DIN) - 2020 Q4 - Earnings Call Transcript