Dine Brands Global (NYSE: DIN) reported Q1 EPS of $1.75, $0.88 better than the analyst estimate of $0.87. Revenue for the quarter came in at $204.2 million versus the consensus estimate of $199.27 million.

First Quarter of 2021 Summary

• GAAP earnings per diluted share of $1.51 for the first quarter of 2021 compared to earnings per diluted share of $1.31 for the first quarter of 2020. The increase was primarily due to lower income tax expense and an increase in gross profit, partially offset by higher general and administrative expenses and an increase in closure and impairment charges. The decline in income tax expense was mainly due to the recognition of excess tax benefits on stock-based compensation primarily associated with the departure of our previous chief executive officer. The improvement in gross profit was mainly due to higher revenue from Applebee’s company-operated restaurants because of a higher average check and increased traffic for the first quarter of 2021.
• Adjusted earnings per diluted share of $1.75 for the first quarter of 2021 compared to adjusted earnings per diluted share of $1.45 for the first quarter of 2020. The increase was primarily due to lower taxes and higher gross profit as discussed above. (See “Non-GAAP Financial Measures” and reconciliation of GAAP earnings per diluted share to adjusted earnings per diluted share.)
• General and administrative expenses for the first quarter of 2021 were $39.9 million compared to $37.6 million for the first quarter of 2020. The variance was mainly due to higher personnel costs related to equity-based and other incentive compensation. These costs were partially offset by lower travel expenses.
• Consolidated adjusted EBITDA for the first quarter of 2021 was $58.1 million. This compares to $61.7 million for the first quarter of 2020. (See “Non-GAAP Financial Measures” and reconciliation of GAAP net income to consolidated adjusted EBITDA.)
• Cash flows from operating activities for the first quarter of 2021 were $30.6 million. This compares to cash flows from operating activities of $29.6 million for the first quarter of 2020. The increase was mainly due to the recognition of excess tax benefits on stock-based compensation.
• The Company generated strong adjusted free cash flow of $30.7 million for the first quarter of 2021. This compares to adjusted free cash flow of $27.5 million for the first quarter of 2020. The improvement is primarily due to the increase in cash flows from operating activities discussed above and lower capital expenditures compared to the first quarter of 2020. (See “Non-GAAP Financial Measures” and reconciliation of the Company’s cash provided by operating activities to adjusted free cash flow.)
• Development activity by IHOP’s domestic franchisees resulted in the opening of eight new restaurants.
• Development activity by Applebee’s domestic franchisees resulted in the opening of two new restaurants.

“Dine Brands first-quarter 2021 results demonstrate positive momentum across our company. Thanks to the strength of our brands, and the resilience and collaboration of our franchisees and team members, we have a sharper focus on digital and marketing capabilities, operational basics and a steadfast dedication to the safety of our people, guests and the communities we serve,” said John Peyton, chief executive officer of Dine Brands Global, Inc.

Mr. Peyton continued, “The restaurant renaissance is here. As we transition to a post-pandemic environment, we see continued opportunity to invest in innovation and strategic platforms, building on the strong foundation we’ve established to drive market share gains and deliver profitable growth for years to come.”

Allison Hall, interim chief financial officer and vice president, controller, added, “Dine Brands started the year in a position of strength. Our cash position remained strong, enabling us to repay the $220 million drawn against our revolving credit facility. Maintaining our financial flexibility will be a top priority as our business continues to improve.”

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