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) May 15, 2002
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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)
Item 9. Regulation FD Disclosure
On May 15, 2002, Applebee's International, Inc. (the "Company") issued a
press release entitled "Applebee's International Outlines Future Growth
Strategies; Long-term EPS Growth of 14-17 Percent Expected. Development
Potential of Applebee's Concept Increased to at Least 2,300 Domestic
Restaurants." The press release is included below.
FOR IMMEDIATE RELEASE
Contact: Carol DiRaimo,
Director of Investor Relations
(913) 967-4109
Applebee's International Outlines Future Growth Strategies;
Long-term EPS Growth of 14-17 Percent Expected
Development Potential of Applebee's Concept
Increased to at Least 2,300 Domestic Restaurants
Overland Park, Kan., May 15, 2002 -- At a company-sponsored investor conference
held in New York City today, Applebee's International, Inc. (Nasdaq:APPB)
reviewed its future growth strategies with analysts, investors and members of
the press. Lloyd Hill, chairman and chief executive officer, and members of the
Applebee's executive team presented topics ranging from the increased domestic
potential of the Applebee's system to its long-term growth and earnings outlook.
Mr. Hill said, "A year ago, we embarked upon a strategic assessment of the
Applebee's brand, designed to realize the full potential of the concept. This
strategic assessment was focused primarily on improving capacity utilization,
identifying sales-building opportunities and expanding distribution of the
concept. As the largest casual dining concept in the world, we know that a
unique opportunity exists to leverage our brand, system size and scale to
optimize future growth."
George Shadid, chief operating officer, reviewed Applebee's development and
operating strategies. Mr. Shadid said, "As a result of the strategic work we
have done over the past year and our continued success in penetrating markets of
various sizes, we now believe the ultimate domestic potential of the Applebee's
system to be at least 2,300 units." Mr. Shadid also discussed the system-wide
introduction of the first phase of the company's new "To Go" initiative. This
initiative will be implemented in the next 90 days and leverages the
neighborhood and convenience positioning of Applebee's at over 1,400 locations.
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May 15, 2002
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Steve Lumpkin, chief financial officer, discussed the use of the company's
strong balance sheet and substantial free cash flow for future franchise
acquisitions and stock repurchases. Expanding on these matters, Mr. Lumpkin
stated, "As an initial step in our franchise acquisition strategy, we expect to
acquire at least one franchise territory before the end of the year. In
addition, we are announcing today the availability of an additional $75 million
to repurchase shares of our stock, subject to market conditions."
Mr. Hill summarized the future outlook for the company. "We are focused on
optimizing the sales and returns of our existing restaurants by intensifying our
food and menu, operating and marketing strategies. The strategies we outlined
today will provide us with a solid foundation for continued growth. We expect
annual earnings per share growth of 14 to 17 percent over the next three to five
years beginning next year. We are also committed to maintaining our return on
equity, which is already one of the highest in the industry, of at least 20
percent. These strategies will allow us to capitalize on our dominant market
position with over 1,400 restaurants, system-wide sales of over $3 billion, and
an unprecedented 10 consecutive years of over 100 new restaurant openings in
2002."
As part of the strategic assessment project completed last year, the company
briefly highlighted its views on the role of future growth vehicles. Mr. Hill
added, "In a disciplined fashion we also examined several different ways we can
grow in the future beyond the core Applebee's business. At some point, we expect
part of our future growth to come as the result of capitalizing on new ways to
extend the Applebee's brand as well as the acquisition of another concept."
Mr. Hill concluded, "Although we do not need brand extension or another concept
to meet our growth targets over the next three to five years, we will be both
opportunistic and selective about making an acquisition. However, the pursuit of
a second concept will not be at the expense of maximizing the core value of
Applebee's. We do not anticipate making any announcement in the next year about
a new concept. After that time, we may choose to more aggressively seek out a
second concept as opportunities are presented."
BUSINESS OUTLOOK
Consistent with the company's previous guidance, earnings per share for fiscal
year 2002 are expected to be in the range of $2.11 to $2.15 (not adjusted for
the stock split announced on May 9, 2002).
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May 15, 2002
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The company also provided guidance as to its future growth for the next three to
five years beginning in fiscal year 2003.
o Approximately 100 new Applebee's restaurants are expected to open annually.
o System-wide comparable sales are expected to increase annually by at least
3 percent.
o Overall restaurant margins before pre-opening expense are expected to
increase slightly in 2003 from current levels as a result of higher sales
volumes.
o General and administrative expenses, as a percentage of operating revenues,
are expected to continue in the mid-9 percent range, excluding the impact
of any franchise acquisitions.
o Earnings per share for the next three to five years are expected to
increase annually by 14 to 17 percent.
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 1,413 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 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, 2002. 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: May 15, 2002 By:/s/ Steven K. Lumpkin
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Steven K. Lumpkin
Executive Vice President and
Chief Financial Officer
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