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) October 2, 2001
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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)
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Item 5. Other Events
On October 2, 2001, Applebee's International, Inc. (the "Company") issued a
press release entitled "Applebee's International Reports September Comparable
Sales; Updates Outlook for Remainder of 2001." The press release contained the
following information.
FOR IMMEDIATE RELEASE
Contact: Carol DiRaimo, Director of Investor Relations
(913) 967-4109
Applebee's International Reports September Comparable Sales;
Updates Outlook for Remainder of 2001
Overland Park, Kan., October 2, 2001 -- Applebee's International, Inc.
(Nasdaq:APPB) today reported comparable sales for the September fiscal period
and provided an updated outlook for the remainder of 2001 in the wake of the
tragic events of September 11th.
Comparable sales for company restaurants increased 1.5 percent during the
five-week period ending September 30, 2001, reflecting flat guest traffic
combined with a higher average check. System-wide comparable sales increased 2.4
percent for the September period, and comparable sales for franchise restaurants
increased 2.7 percent. Comparable sales for the third quarter ending September
30, 2001 increased 1.9 percent for company restaurants, with system-wide and
franchise restaurant comparable sales up 2.7 percent and 2.9 percent,
respectively.
Lloyd L. Hill, chairman and chief executive officer, said, "The entire
Applebee's system was shocked and deeply saddened by the events of September
11th. Applebee's International and our franchisees have developed a program in
partnership with the American Red Cross Disaster Relief Fund to raise
substantial funds to support those affected by this tragedy."
Hill continued, "We are pleased that comparable sales for company restaurants
for the September period were only slightly lower than originally anticipated,
while system-wide comparable sales increases were in line with our guidance of
at least 2 to 3 percent. In the aftermath of the September 11th events, overall
comparable sales have remained positive, but have been at lower levels than
previous trends. Although daily traffic patterns have been somewhat erratic,
weekend traffic has been positive; however, weekday traffic has been negative.
"In light of the current operating environment, near-term restaurant sales may
be less predictable and below our previous expectations. While difficult to
predict, we now anticipate system-wide comparable sales for the fourth quarter
to be in the range of zero to positive 2 percent. We believe that long-term
consumer-dining habits are firmly entrenched, and given our dominant brand,
franchise business model and strong price/value relationship, we believe we are
well positioned to weather a weaker consumer-spending environment," Hill
concluded.
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October 2, 2001
Page 2
Item 9. Regulation FD Disclosure
Applebee's International, Inc. (the "Company") also included guidance
regarding its business outlook in the press release. These comments are included
below.
BUSINESS OUTLOOK
The company also provided additional guidance as to its business outlook for the
remainder of 2001.
o As noted above, comparable sales for the fourth quarter are expected to be
in the range of zero to positive 2 percent.
o Overall restaurant margins before pre-opening expense for both the third
and fourth quarters are expected to be in the high-15 percent range,
slightly lower than the company's previous expectation. Operating costs are
expected to be impacted by higher labor costs resulting from less
predictable sales trends and lower than previously expected sales levels.
o General and administrative expenses for the third quarter are expected to
be slightly higher than the company's previous guidance due to the timing
of expenses relating to the company's supply chain and brand assessment
projects. Fourth quarter expenses are expected to be in the high-9 percent
range, as a percentage of operating revenues, consistent with earlier
expectations.
o The company also expects to complete the refinancing of its existing credit
facilities in early November with the establishment of a new $125 million
revolving credit facility. The terms of the credit facility will reduce
future interest costs and are expected to improve annual earnings per share
by approximately 4 to 5 cents per share. As a result of the refinancing,
non-recurring charges of approximately 10 cents per share are expected in
the fourth quarter due to the write-off of previously deferred financing
costs and the termination of interest rate swap agreements.
o As a result of the foregoing, diluted earnings per share for the third
quarter are expected to be in the range of 43 to 44 cents. Excluding the
non-recurring refinancing costs discussed above, fourth quarter diluted
earnings per share are expected to be in the range of 42 to 45 cents.
Accordingly, fiscal year 2001 diluted earnings per share are now expected
to be in the range of $1.77 to $1.81 (exclusive of the refinancing costs),
an increase of 11 to 13 percent over 2000 (fiscal year 2001 is a 52-week
fiscal year as compared to 53 weeks in 2000).
The company will release complete third quarter 2001 results after the market
closes on October 31, 2001 and a conference call will be held on Thursday
morning, November 1, 2001, 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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October 2, 2001
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. As of
September 30, 2001, there were 1,358 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 Business Outlook section of this release 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 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 13, 2001. 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: October 2, 2001 By: /s/ George D. Shadid
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George D. Shadid
Executive Vice President and
Chief Financial Officer
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