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 6, 2004
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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, 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)
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Item 5. Other Events
On July 6, 2004, Applebee's International, Inc. (the "Company") issued a
press release entitled "Applebee's International Reports June Comparable Sales;
Provides Second Quarter Earnings Guidance and Updates 2004 Outlook." The press
release contained the following information.
Contact: Carol DiRaimo,
Vice President of Investor Relations
(913) 967-4109
Applebee's International Reports June Comparable Sales;
Provides Second Quarter Earnings Guidance and Updates 2004 Outlook
Overland Park, Kan., July 6, 2004 -- Applebee's International, Inc.
(Nasdaq:APPB) today reported comparable sales for the five-week period ended
June 27, 2004.
Comparable sales for company restaurants increased 5.1 percent, reflecting an
increase in guest traffic of approximately 2.5 percent, combined with a higher
average check. System-wide comparable sales increased 6.8 percent for the June
period, and comparable sales for franchise restaurants increased 7.4 percent.
System-wide comparable sales for the second quarter of 2004 increased 6.3
percent, the 24th consecutive quarter of comparable sales growth. Company and
franchise restaurant comparable sales increased 5.5 percent and 6.5 percent,
respectively, for the quarter. System-wide comparable sales for the year-to-date
period through June increased 7.2 percent, with company and franchise restaurant
comparable sales up 7.0 percent and 7.2 percent, respectively.
Other results for the second quarter ended June 27, 2004 included:
o Applebee's ended the quarter with 1,612 restaurants system-wide (405
company and 1,207 franchise restaurants). During the second quarter of
2004, there were 12 new Applebee's restaurants opened system-wide,
including four company and eight franchised restaurants.
o The company repurchased 814,500 shares of common stock in the second
quarter at an average price of $26.01 for an aggregate cost of $21.2
million. As of June 27, 2004, $46.5 million remains available under the
company's ongoing stock repurchase authorization.
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Item 9. Regulation FD Disclosure
Applebee's International, Inc. (the "Company") also included information
regarding second quarter and full year 2004 earnings guidance in the press
release. These comments are included below.
BUSINESS OUTLOOK
The company provided guidance for the second quarter of 2004 and updated its
guidance for fiscal year 2004:
o Restaurant margins before pre-opening expense for the second quarter
are expected to be approximately 16 percent, reflecting higher food
costs due to the company's baby back rib promotion and additional labor
costs due to the implementation of its Weight Watchers menu in May.
o The company will record a pre-tax charge of $2.3 million for the
write-off of excess riblets inventory which it determined during the
second quarter no longer met the company's quality standards.
Approximately 25 percent of this charge will be included in company
restaurant food and beverage usage with the remaining 75 percent
reflected in cost of other franchise income, based on historical usage.
o Diluted earnings per share for the second quarter are expected to be
$0.33 to $0.34, including the after-tax inventory charge of
approximately $0.02 per share.
o The company continues to expect system-wide comparable sales to
increase by at least 5 percent for the full year, although monthly
sales results may be more volatile given economic conditions, calendar
shifts, prior year comparisons, or unusual events.
o Based on the foregoing assumptions and the company's performance during
the first two quarters of the year, diluted earnings per share for
fiscal year 2004 are now expected to be $1.34 to $1.36, including the
after-tax inventory charge of approximately $0.02 per share.
o All earnings per share information reflects a three-for-two stock split
effective at the close of business on June 15, 2004.
The company will release complete second quarter 2004 results after the market
closes on July 28, 2004, and a conference call will be held on Thursday morning,
July 29, 2004, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). The
conference call will be broadcast live over the Internet and a replay will be
available shortly after the call on the Investor Relations section of the
company's website (www.applebees.com).
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Applebee's International, Inc., headquartered in Overland Park, Kan., develops,
franchises and operates restaurants under the Applebee's Neighborhood Grill &
Bar brand, the largest casual dining concept in the world. As of June 27, 2004,
there were 1,612 Applebee's restaurants operating system-wide in 49 states and
nine international countries. Additional information on Applebee's International
can be found at the company's website (www.applebees.com).
Certain statements contained in this release, including expected results for the
second quarter of 2004 and fiscal year 2004 guidance as set forth in the
Business Outlook section, 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, including but not limited to the ability
of the company and its franchisees to open and operate additional restaurants
profitably, the ability of its franchisees to obtain financing, the continued
growth of its franchisees, and its ability to attract and retain qualified
franchisees, the impact of intense competition in the casual dining segment of
the restaurant industry, and its ability to control restaurant operating costs
which are impacted by market changes, minimum wage and other employment laws,
food costs and inflation. For additional 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 11, 2004. The company disclaims any
obligation to update these forward-looking statements.
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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 6, 2004 By: /s/ Steven K. Lumpkin
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Steven K. Lumpkin
Executive Vice President and
Chief Financial Officer
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