Dine Brands Global Inc
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
DIN$35.85-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0001628280-24-021372
Item 2. —Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001628280-24-035379
Item 2. —Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 124 current paragraphs.
67 unchanged; 38 reworded; 17 added; 9 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 22 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Total gross profit for the three months ended June 30, 2024 increased compared with the same period of the prior year due to increased IHOP franchise operations, partially offset by decreased Fuzzy's franchise operations. In addition, income before income taxes for the three months ended June 30, 2024 increased compared to the prior year period due to a lower loss on disposition of assets, a loss on extinguishment of debt in the same period in the prior year, and decreased G&A expenses. The decrease in G&A expenses was primarily attributable to the prior year period expense related to the stopping of the IHOP Flip'd initiative, partially offset by an increase in compensation-related expenses and an increase in depreciation expense.
Current report
Applebee’s system-wide domestic same-restaurant sales decreased 1.8% for the three months ended June 30, 2024 and 3.2% for the six months ended June 30, 2024 as compared to the same periods of 2023. The decrease in same-restaurant sales was primarily due to a decrease in traffic, partially offset by an increase in average check.
Current report
IHOP's system-wide domestic same-restaurant sales decreased 1.4% for the three months ended June 30, 2024 and 1.5% for the six months ended June 30, 2024 as compared to the same periods of 2023. The decrease in same-restaurant sales was primarily due to a decrease in traffic, partially offset by an increase in average check.
Current report
Fuzzy's system-wide domestic same-restaurant sales decreased 7.5% for the three months ended June 30, 2024 and 8.6% for the six months ended June 30, 2024 as compared to the same periods of 2023. The decrease in same-restaurant sales was primarily due to a decrease in traffic, partially offset by an increase in average check.
Current report
Comparison of the Three and Six Months Ended June 30, 2024 and 2023
Current report
Total gross profit for the three months ended June 30, 2024 increased compared with the same period of the prior year, primarily due to increased gross profit from franchise operations. The franchise operations gross profit increased primarily due to a decrease in bad debt and franchise support expense, partially offset by the decrease in franchise operations revenue as described above.
Current report
Applebee's franchise expenses for the three and six months ended June 30, 2024 decreased $1.9 million and $2.7 million, respectively, as compared with the same periods of the prior year, primarily due to a decrease in bad debt expense.
Current report
IHOP's franchise expenses for the three and six months ended June 30, 2024 decreased $1.6 million and $0.9 million, respectively, as compared with the same periods of the prior year, primarily due to a decrease in bad debt expense and a decrease in franchisee IT support costs offset by an increase in franchisor advertising contribution.
Current report
Fuzzy's franchise fee revenue for the three months ended June 30, 2024 remained flat as compared with the same period of the prior year, primarily due to forfeited development fees offset by a 7.5% decrease in domestic same-restaurant sales and a decrease in the number of effective franchise restaurants. Fuzzy's franchise fee revenue for the six months ended June 30, 2024 decreased 9.0% compared with the same period of the prior year, primarily due to a 8.6% decrease in domestic same-restaurant sales and decrease in the number of effective franchise restaurants, partially offset by termination fees.
Current report
Fuzzy's franchise expenses for the three and six months ended June 30, 2024 increased $1.6 million and $2.6 million, respectively, compared with the same periods of the prior year, primarily due to an increase in franchisor advertising contribution and an increase in bad debt expense.
Current report
Applebee's advertising revenues and expenses for the six months ended June 30, 2024 decreased 3.5% compared to the same period of the prior year primarily due to a 3.2% decrease in domestic franchise same-restaurant sales and decrease in the number of effective franchise restaurants. IHOP's advertising revenues and expenses for the six months ended June 30, 2024 decreased as compared with the same period of the prior year, primarily due to an increase in the number of effective franchise restaurants and partially offset by a 1.5% decrease in same-restaurant sales.
Current report
Rental operations gross profit for the three months ended June 30, 2024 increased as compared to the same period of the prior year, primarily due to operating lease renewals and extensions and an increase in percentage rent.
Current report
G&A expenses for the six months ended June 30, 2024 increased 0.1% compared to the same period of the prior year, primarily due to an increase in stock-based compensation, depreciation and severance expense offset by the stopping of the IHOP Flip’d initiative in the prior period and a decrease in occupancy costs.
Current report
Interest expense, net and loss on extinguishment of debt
Current report
The Company repaid the entire outstanding balance of approximately $585.1 million of its 2019 Class A-2 Notes during the three months ended June 30, 2023 and recognized a $1.7 million loss on extinguishment of debt from the write-off of the related remaining issuance costs. This loss was offset by a $1.7 million gain on extinguishment of debt from the purchase of $67.9 million of its 2019 Class A-2 Notes under par during the six months ended June 30, 2023.
Current report
Loss (gain) on disposition of assets
Current report
The loss on disposition of assets for the three and six months ended June 30, 2023 primarily related to the disposition of certain IHOP Flip'd assets.
Removed paragraphs (9)
Previous report
Applebee’s system-wide domestic same-restaurant sales decreased 4.6% for the three months ended March 31, 2024 as compared to the same period of 2023. The decrease in same-restaurant sales was primarily due to a decrease in traffic, partially offset by an increase in menu pricing offset by product mix.
Previous report
IHOP's system-wide domestic same-restaurant sales decreased 1.7% for the three months ended March 31, 2024 as compared to the same period of 2023. The decrease in same-restaurant sales was primarily due to a decrease in traffic, partially offset by an increase in average check. The increase in average check was primarily due to menu pricing increase.
Previous report
Fuzzy's system-wide domestic same-restaurant sales decreased 9.8% for the three months ended March 31, 2024 as compared to the same period of 2023. The decrease in same-restaurant sales was primarily due to a decrease in traffic.
Previous report
Applebee's franchise expenses for the three months ended March 31, 2024 decreased $1.0 million as compared with the same period of the prior year, primarily due to a decrease in bad debt expense.
Previous report
IHOP's franchise expenses for the three months ended March 31, 2024 increased $0.7 million as compared with same period of the prior year, primarily due to an increase in franchisor advertising contribution.
Previous report
Fuzzy's franchise fee revenue for the three months ended March 31, 2024 decreased $0.7 million compared with the same period of the prior year, primarily due to a 9.8% decrease in domestic same-restaurant sales and decrease in the number of effective franchise restaurants.
Previous report
Fuzzy's franchise expenses for the three months ended March 31, 2024 increased $1.1 million compared with the same period of the prior year, primarily due to an increase in franchisor advertising contribution.
Previous report
Interest expense, net and gain on extinguishment of debt
Previous report
During the three months ended March 31, 2023, the Company purchased $67.9 million of its 2019 Class A-2 Notes under par and recognized a $1.7 million gain on extinguishment of debt. For additional details, refer to Note 7, Long-Term Debt, in the Notes to Consolidated Financial Statements.
Reworded paragraphs (38)
Previous wording
The effective tax rate for the three months ended March 31, 2024 was higher than the rate of the prior comparable period primarily due to a lower tax deduction related to stock-based compensation.
Current wording
The effective tax rate for the three and six months ended June 30, 2024 was higher than the rate of the comparable prior periods primarily due to a lower tax deduction related to stock-based compensation.
Previous wording
The following table highlights the primary components of the decrease in our income before income taxes for the three months ended March 31, 2024, compared to our income before income taxes for the comparable prior period (in millions):
Current wording
The following table highlights the primary components of the increase (decrease) in our income before income taxes for the three and six months ended June 30, 2024, compared to our income before income taxes for the comparable prior periods (in millions):
Previous wording
Total gross profit for the three months ended March 31, 2024 decreased compared with the same period of the prior year, due to decreased revenue from franchise and rental operations and increased franchisor advertising contribution. In addition, income before income taxes for the three months ended March 31, 2024 decreased compared to the prior year period due to a gain on extinguishment of debt in the same period in the prior year, increased interest expense and increased G&A expenses. The increase in interest expense primarily related to higher-rate securitized notes and borrowings from our revolving line of credit. The increase in G&A expenses was primarily attributable to an increase in compensation-related expenses (predominantly stock-based compensation) and an increase in consumer research expenses, partially offset by a decrease in professional services.
Current wording
Total gross profit for the six months ended June 30, 2024 decreased compared with the same period of the prior year due to decreased revenue from franchise and rental operations and increased franchisor advertising contribution. In addition, income before income taxes for the six months ended June 30, 2024 decreased compared to the prior year period due to increased interest expense, partially offset by loss on disposition of assets in the same period in the prior year. The increase in interest expense primarily related to higher-rate securitized notes and borrowings from our revolving line of credit.
Previous wording
See“Consolidated Results of Operations - Comparison of the Three Months Ended March 31, 2024 and 2023” for additional discussion of the changes shown above.
Current wording
See“Consolidated Results of Operations - Comparison of the Three and Six Months Ended June 30, 2024 and 2023” for additional discussion of the changes shown above.
Previous wording
Our key performance indicators for the three months ended March 31, 2024 were as follows:
Current wording
Our key performance indicators for the three and six months ended June 30, 2024 were as follows:
Previous wording
(1) Franchise and area license restaurant closings, net of openings, during the three months ended March 31, 2024.
Current wording
(1) Franchise and area license restaurant closings, net of openings, during the three and six months ended June 30, 2024.
Previous wording
(2) Change in the weighted average number of franchise, area license and company-operated restaurants open during the three months ended March 31, 2024, compared to the weighted average number of those open during the same period of 2023.
Current wording
(2) Change in the weighted average number of franchise, area license and company-operated restaurants open during the three and six months ended June 30, 2024, compared to the weighted average number of those open during the same periods of 2023.
Previous wording
Based on data from Black Box Intelligence, a restaurant sales reporting firm (“Black Box”), Applebee's same-restaurant sales for the three months ended March 31, 2024 underperformed the casual dining segment of the restaurant industry (excluding Applebee's) during the same period.
Current wording
Based on data from Black Box Intelligence, a restaurant sales reporting firm (“Black Box”), Applebee's same-restaurant sales for the three and six months ended June 30, 2024 underperformed the casual dining segment of the restaurant industry (excluding Applebee's) during the same period.
Previous wording
Based on data from Black Box, IHOP's decrease in same-restaurant sales for the three months ended March 31, 2024 underperformed the family dining segment of the restaurant industry (excluding IHOP) during the same period.
Current wording
Based on data from Black Box, IHOP's decrease in same-restaurant sales for the three and six months ended June 30, 2024 underperformed the family dining segment of the restaurant industry (excluding IHOP) during the same period.
Previous wording
(b) “System-wide sales” are retail sales at Applebee’s and Fuzzy's restaurants operated by franchisees and IHOP restaurants operated by franchisees and area licensees, as reported to the Company, in addition to retail sales at company-operated Fuzzy's restaurants. System-wide sales do not include retail sales of ghost kitchens. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. An increase in franchisees'
Current wording
(b) “System-wide sales” are retail sales at Applebee’s and Fuzzy's restaurants operated by franchisees and IHOP restaurants operated by franchisees and area licensees, as reported to the Company, in addition to retail sales at company-operated Fuzzy's restaurants. System-wide sales do not include retail sales of ghost kitchens. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. An increase in franchisees' reported sales will result in a corresponding increase in our royalty revenue, while a decrease in franchisees' reported sales will result in a corresponding decrease in our royalty revenue. Unaudited reported sales for Applebee's and Fuzzy's franchise restaurants, Fuzzy's company-operated restaurants, IHOP franchise restaurants and IHOP area license restaurants were as follows:
Previous wording
The restaurant counts and activity presented above do not include one domestic Applebee's ghost kitchen (small kitchens with no store-front presence, used to fill off-premise orders), 11 international Applebee's ghost kitchens and 41 international IHOP ghost kitchens.
Current wording
The restaurant counts and activity presented above do not include one domestic Applebee's ghost kitchen (small kitchens with no store-front presence, used to fill off-premise orders), eight international Applebee's ghost kitchens and 38 international IHOP ghost kitchens.
Previous wording
Total revenue for the three months ended March 31, 2024 decreased compared with the same period of the prior year, primarily due to the decrease in franchise operations revenue and the decrease in rental operations revenue. The decrease in franchise operations revenue was primarily attributable to the decreases in domestic same-restaurant sales and the decrease in the number of Applebee's effective restaurants, partially offset by increases in the number of effective restaurants and proprietary product sales at IHOP. Rental operations revenue decreased primarily due to the lease buyouts during the three months ended March 31, 2023.
Current wording
Total revenue for the three and six months ended June 30, 2024 decreased compared with the same periods of the prior year, primarily due to the decrease in franchise and rental operations revenue. The decrease in franchise operations revenue was primarily attributable to the decrease in domestic same-restaurant sales and the decrease in the number of Applebee's and Fuzzy's effective restaurants, partially offset by increases in the number of effective restaurants and proprietary product sales at IHOP. Rental operations revenue for the three months ended June 30, 2024 decreased compared with the same period of the prior year, primarily due to early lease termination and a decrease in variable sublease income. Rental operations revenue for the six months ended June 30, 2024 decreased compared with the same period of the prior year, primarily due to prior year lease buyouts.
Previous wording
Total gross profit for the three months ended March 31, 2024 decreased compared with the same period of the prior year, primarily due to decreased gross profit from franchise operations and rental operations. The franchise operations gross profit decreased primarily due to Applebee's and Fuzzy's decreased franchise revenue and increases in franchisor advertising contributions. The rental operations gross profit was primarily due to decreased rental revenue.
Current wording
Total gross profit for the six months ended June 30, 2024 decreased compared with the same period of the prior year, primarily due to decreased gross profit from rental operations and franchise operations. The decrease in rental operations gross profit was primarily due to a decrease in rental income impacted by prior year lease buyouts. The franchise operations gross profit decreased primarily due to Applebee's and Fuzzy's decreased franchise revenue and an increase in franchisor advertising contributions, partially offset by a decrease in bad debt expense.
Previous wording
Applebee's franchise fee revenue for the three months ended March 31, 2024 decreased 4.8% as compared with the same period of the prior year, primarily due to the unfavorable impact on royalties of a 4.6% decrease in domestic same-restaurant sales and the decrease in the number of effective franchise restaurants.
Current wording
Applebee's franchise fee revenue for the three months ended June 30, 2024 decreased 3.1% as compared with the same period of the prior year, primarily attributable to the unfavorable impact on royalties of a 1.8% decrease in domestic same-restaurant sales and the decrease in the number of effective franchise restaurants, offset by an increase in accelerated franchise fee revenue recognition due to restaurant closures. Applebee's franchise fee revenue for the six months ended June 30, 2024 decreased 4.0% as compared with the same period of the prior year, primarily attributable to the unfavorable impact on royalties of a 3.2% decrease in domestic same-restaurant sales and the decrease in the number of effective franchise restaurants, offset by an increase in accelerated franchise fee recognition due to restaurant closures.
Previous wording
IHOP's franchise fee revenue for the three months ended March 31, 2024 increased 1.1% as compared with the same period of the prior year, primarily due to an increase in the number of effective franchise restaurants and an increase in proprietary product sales, partially offset by a 1.7% decrease in same-restaurant sales.
Current wording
IHOP's franchise fee revenue for the three and six months ended June 30, 2024 increased 2.5% and 1.8%, respectively, as compared with the same periods of the prior year, primarily due to an increase in the number of effective franchise restaurants and an increase in proprietary product sales, partially offset by a decrease in same-restaurant sales (1.4% and 1.5% decrease in same-restaurant sales, respectively) and a decrease in virtual brand revenue.
Previous wording
Applebee's and Fuzzy's advertising revenue and expense for the three months ended March 31, 2024 decreased 4.1% and 1.6%, respectively, compared to the same period of the prior year primarily due to the decrease in their respective domestic franchise same-restaurant sales and decrease in effective restaurants. IHOP advertising revenue and expense for the three months ended March 31, 2024 increased 0.6% compared to the same period of the prior year, primarily due to the increase in the number of effective franchise restaurants, partially offset by a 1.7% decrease in same-restaurant sales.
Current wording
Applebee's advertising revenues and expenses for the three months ended June 30, 2024 decreased 2.8% compared to the same period of the prior year primarily due to the decrease in the number of effective franchise restaurants and the decrease in their respective domestic franchise same-restaurant sales. IHOP advertising revenues and expenses for the three months ended June 30, 2024 decreased 0.6% compared to the same period of the prior year, primarily due to a 1.4% decrease in same-restaurant sales, partially offset by an increase in the number of effective franchise restaurants.
Previous wording
Rental operations relate primarily to IHOP franchise restaurants. Rental income includes sublease revenue from operating leases and interest income from real estate leases. Rental expenses are costs of prime operating leases and interest expense on prime finance leases.
Current wording
Rental operations relate primarily to IHOP franchise restaurants. Rental income includes sublease revenue from operating leases and interest income from finance leases. Rental expenses are costs of prime operating leases and interest expense on prime finance leases.
Previous wording
Rental operations gross profit for the three months ended March 31, 2024 decreased as compared to the same period of the prior year, primarily due to lease buyouts in the prior year.
Current wording
Rental operations gross profit for the six months ended June 30, 2024 decreased as compared to the same period of the prior year, primarily due to prior year lease buyouts partially offset by lease renewals and extensions.
Previous wording
For the three months ended March 31, 2024, company restaurant operations included one Fuzzy's restaurant, compared to three Fuzzy's restaurants in the prior comparable period. Company segment restaurant expenses may include costs associated with reacquired restaurants in the process of being refranchised. There were no reacquired restaurants expenses during the three months ended March 31, 2024 and 2023.
Current wording
For the three and six months ended June 30, 2023, company restaurant operations consisted of three Fuzzy's restaurants that were acquired in December 2022, of which two were subsequently refranchised in the second quarter of 2023. Company segment restaurant expenses may include costs associated with reacquired restaurants in the process of being refranchised. There were no reacquired restaurants expenses during the six months ended June 30, 2024 and 2023.
Previous wording
Financing revenues primarily consist of interest income from the financing of IHOP equipment leases and franchise fees as well as interest income on notes receivable due from franchisees. Financing expenses are sales and use taxes related to IHOP equipment leases. Financing revenue and gross profit for the three months ended March 31, 2024 declined compared to the same period of the prior year, primarily due to progressive decline in interest income as note balances are repaid.
Current wording
Financing revenues primarily consist of interest income from the financing of IHOP equipment leases and franchise fees as well as interest income on notes receivable due from franchisees. Financing expenses are sales and use taxes related to IHOP equipment leases. Financing revenue and gross profit for the three and six months ended June 30, 2024 declined compared to the same periods of the prior year, primarily due to progressive decline in interest income as note balances are repaid.
Previous wording
G&A expenses for the three months ended March 31, 2024 increased 2.2% compared to the same period of the prior year, primarily due to an increase in compensation-related expenses (predominantly stock-based compensation) and an increase in consumer research expenses, partially offset by a decrease in professional services.
Current wording
G&A expenses for the three months ended June 30, 2024 decreased 2.1% compared to the same period of the prior year, primarily due to the stopping of our IHOP Flip'd initiative in the prior year offset by an increase in compensation-related expenses and an increase in depreciation expense.
Previous wording
Interest expense, net for the three months ended March 31, 2024 increased compared to the same period of the prior year, primarily due to the higher interest rate on our refinanced securitized notes as well as borrowings from and the increase in interest rate on our Credit Facility.
Current wording
Interest expense, net for the six months ended June 30, 2024 increased compared to the same periods of the prior year, primarily due to the higher interest rate on our refinanced securitized notes as well as on our Credit Facility.
Previous wording
Our income tax provision or benefit will vary from period to period in our normal course of business for two reasons: a change in income before income taxes and a change in the effective tax rate. Changes in our income before income taxes were addressed in the preceding sections of“Consolidated Results of Operations - Comparison of the Three Months Ended March 31, 2024 and 2023."
Current wording
Our income tax provision or benefit will vary from period to period in our normal course of business for two reasons: a change in income before income taxes and a change in the effective tax rate. Changes in our income before income taxes were addressed in the preceding sections of“Consolidated Results of Operations - Comparison of the Three and Six Months Ended June 30, 2024 and 2023."
Previous wording
Our effective tax rate for the three months ended March 31, 2024 was higher than the rate of the prior comparable period primarily due to a lower tax deduction related to stock-based compensation.
Current wording
Our effective tax rate for the three and six months ended June 30, 2024 was higher than the rate of the comparable prior periods primarily due to a lower tax deduction related to stock-based compensation.
Previous wording
While the Class A-2 Notes are outstanding, payment of principal and interest is required to be made on the Class A-2 Notes on a quarterly basis. The payment of principal on the Class A-2 Notes may be suspended when the leverage ratio for the Company and its subsidiaries is less than or equal to 5.25x. As of March 31, 2024, our leverage ratio was approximately 4.3x. Therefore, quarterly principal payments are not required.
Current wording
While the Class A-2 Notes are outstanding, payment of principal and interest is required to be made on the Class A-2 Notes on a quarterly basis. The payment of principal on the Class A-2 Notes may be suspended when the leverage ratio for the Company and its subsidiaries is less than or equal to 5.25x. As of June 30, 2024, our leverage ratio was approximately 4.2x. Therefore, quarterly principal payments are not required.
Previous wording
On February 16, 2023, our Company's Board of Directors authorized a debt repurchase program of up to $100 million. Repurchases of the Company’s debt, if any, are expected to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption. Under the authorization, the Company may make repurchases of the Company's debt from time to time in the open market or in privately negotiated transactions upon such terms and at such prices as management may determine.
Current wording
On February 16, 2023, the Company's Board of Directors authorized a debt repurchase program of up to $100 million. Repurchases of the Company’s debt, if any, are expected to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption. Under the authorization, the Company may make repurchases of the Company's debt from time to time in the open market or in privately negotiated transactions upon such terms and at such prices as management may determine.
Previous wording
We may voluntarily repay the Class A-2 Notes at any time; however, if repaid prior to certain dates we would be required to pay make-whole premiums. As of March 31, 2024, there was no make-whole premium associated with voluntary prepayment of the 2019 Class A-2-II Notes. As of March 31, 2024, the make-whole premium associated with voluntary prepayment of the 2023 Class A-2 Notes was approximately $35.5 million. We also would be subject to a make-whole premium in the event of a mandatory prepayment required following certain rapid amortization events or certain asset dispositions. The mandatory make-whole premium requirements are considered derivatives embedded that must be bifurcated for separate valuation. We estimated the fair value of these derivatives to be immaterial as of March 31, 2024, based on the probability-weighted discounted cash flows associated with either event.
Current wording
We may voluntarily repay the Class A-2 Notes at any time; however, if repaid prior to certain dates we would be required to pay make-whole premiums. As of June 30, 2024, there was no make-whole premium associated with voluntary prepayment of the 2019 Class A-2-II Notes. As of June 30, 2024, the make-whole premium associated with voluntary prepayment of the 2023 Class A-2 Notes was approximately $29.7 million. We also would be subject to a make-whole premium in the event of a mandatory prepayment required following certain rapid amortization events or certain asset dispositions. The mandatory make-whole premium requirements are considered derivatives embedded that must be bifurcated for separate valuation. We estimated the fair value of these derivatives to be immaterial as of June 30, 2024, based on the probability-weighted discounted cash flows associated with either event.
Previous wording
As of March 31, 2024, the outstanding balance of the Credit Facility was $100 million. The amount of $3.4 million was pledged against the Credit Facility for outstanding letters of credit, leaving $221.6 million of the Credit Facility available for borrowing at March 31, 2024. It is anticipated that any principal and interest on the Credit Facility outstanding will be repaid in full on or prior to the quarterly payment date in June 2027, subject to two additional one-year extensions at the option of the Company upon the satisfaction of certain conditions. The letters of credit are used primarily to satisfy insurance-related collateral requirements. The weighted average interest rate on Credit Facility borrowings for the period outstanding during the three months ended March 31, 2024 was 7.95%.
Current wording
As of June 30, 2024, the outstanding balance of the Credit Facility was $100 million. The amount of $1.9 million was pledged against the Credit Facility for outstanding letters of credit, leaving $223.1 million of the Credit Facility available for borrowing at June 30, 2024. It is anticipated that any principal and interest on the Credit Facility outstanding will be repaid in full on or prior to the quarterly payment date in June 2027, subject to two additional one-year extensions at the option of the Company upon the satisfaction of certain conditions. The letters of credit are used primarily to satisfy insurance-related collateral requirements. The weighted average interest rate on Credit Facility borrowings for the period outstanding during the six months ended June 30, 2024 was 7.94%.
Previous wording
Dividends declared and paid per share for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
Dividends declared and paid per share for the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
During the three months ended March 31, 2024 and 2023, the Company paid dividends of $7.8 million and $16.0 million, respectively.
Current wording
During the six months ended June 30, 2024 and 2023, the Company paid dividends of $15.7 million and $16.0 million, respectively.
Previous wording
During the three months ended March 31, 2024, the Company repurchased 128,479 shares of common stock at a cost of $6.0 million. Cumulatively, the Company has repurchased 1,724,257 shares at a cost of $110.7 million under the 2022 Repurchase Program.
Current wording
During the six months ended June 30, 2024, the Company repurchased 269,621 shares of common stock at a cost of $12.0 million. Cumulatively, the Company has repurchased 1,865,399 shares at a cost of $116.7 million under the 2022 Repurchase Program.
Previous wording
From time to time, we also repurchase shares owned and tendered by employees to satisfy tax withholding obligations on the vesting of restricted stock awards. Shares are deemed purchased at the closing price of our common stock on the vesting date. See Part II, Item 2 for detail on this stock repurchase activity during the three months ended March 31, 2024.
Current wording
From time to time, we also repurchase shares owned and tendered by employees to satisfy tax withholding obligations on the vesting of restricted stock awards. Shares are deemed purchased at the closing price of our common stock on the vesting date. See Part II, Item 2 for detail on this stock repurchase activity during the six months ended June 30, 2024.
Previous wording
In summary, our cash flows for the three months ended March 31, 2024 and March 31, 2023 were as follows:
Current wording
In summary, our cash flows for the six months ended June 30, 2024 and June 30, 2023 were as follows:
Previous wording
Cash provided by operating activities is primarily driven by revenues earned and collected from our franchisees, and profit from our rental operations, financing operations and our company-owned restaurant. Cash provided by operating activities increased $14.5 million during the three months ended March 31, 2024 compared to the same period of the prior year. This increase was primarily attributable to a favorable increase in working capital from a shift in timing of income tax payments and the collection of an income tax settlement and accounts receivable, partially offset by a decrease in gross segment profit as discussed in the preceding sections of this MD&A.
Current wording
Cash provided by operating activities is primarily driven by revenues earned and collected from our franchisees, and profit from our rental operations, financing operations and our company-owned restaurant. Cash provided by operating activities increased $9.5 million during the six months ended June 30, 2024 compared to the same period of the prior year. This increase was primarily attributable to a favorable increase in working capital resulting primarily from a shift in timing of marketing payments, partially offset by a decrease in gross segment profit as discussed in the preceding sections of this MD&A.
Previous wording
Investing activities used net cash of $1.2 million for the three months ended March 31, 2024 compared to investing activities provided net cash of $12.7 million for the three months ended March 31, 2023. The decrease was primarily attributable to a decrease in capital expenditures compared to the same period of the prior year. The Company increased spending in information technology and other projects in fiscal year 2023.
Current wording
Investing activities used net cash of $1.1 million for the six months ended June 30, 2024 compared to investing activities provided net cash of $16.6 million for the six months ended June 30, 2023. The decrease was primarily attributable to a decrease in capital expenditures compared to the same period of the prior year. The Company increased spending in information technology and other projects in fiscal year 2023.
Previous wording
Financing activities used net cash of $17.8 million for the three months ended March 31, 2024. The decrease in cash used by financing activities of $75.4 million was primarily due to the repayment of long-term debt of $66.6 million and two dividend distributions during the three months ended March 31, 2023. There was no repayment of long-term debt and one dividend distribution during the three months ended March 31, 2024.
Current wording
Financing activities used net cash of $33.3 million for the six months ended June 30, 2024. The decrease in cash used by financing activities of $161.0 million was primarily due to the repayment and issuance of long-term debt of $159.7 million during the six months ended June 30, 2023. There was no repayment or issuance of long-term debt during the six months ended June 30, 2024.
Previous wording
Adjusted free cash flow for the three months ended March 31, 2024 improved compared to the same period of the prior year due to the increase in cash flows provided by operating activities, decrease in capital expenditures and an increase in receipts from notes and equipment contracts receivable.
Current wording
Adjusted free cash flow for the six months ended June 30, 2024 improved compared to the same period of the prior year due to the decrease in capital expenditures, increase in cash flows provided by operating activities and an increase in principal receipts from notes and equipment contracts receivable.
Previous wording
A summary of our critical accounting estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2023. During the three months ended March 31, 2024, there were no significant changes in our critical accounting policies or in our critical accounting estimates.
Current wording
A summary of our critical accounting estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2023. During the six months ended June 30, 2024, there were no significant changes in our critical accounting policies or in our critical accounting estimates.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Interest expense, net for the three months ended June 30, 2024 increased compared to the same periods of the prior year, primarily due to the higher interest rate on our refinanced securitized notes as well as on our Credit Facility, offset by higher interest income.
Current report — wording carried from elsewhere
On May 14, 2024, the Board of Directors declared a second quarter 2024 cash dividend of $0.51 per share of common stock, paid on July 5, 2024 to the stockholders of record as of the close of business on June 20, 2024.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
reported sales will result in a corresponding increase in our royalty revenue, while a decrease in franchisees' reported sales will result in a corresponding decrease in our royalty revenue. Unaudited reported sales for Applebee's and Fuzzy's franchise restaurants, Fuzzy's company-operated restaurants, IHOP franchise restaurants and IHOP area license restaurants were as follows:
Previous report — wording carried elsewhere
Comparison of the Three Months Ended March 31, 2024 and 2023