Glendale-based DineEquity Inc. reported improved net income in the first quarter thanks to lower interest expenses and impairment charges, company officials said.
The operator of Applebee’s and IHOP restaurant chains on Tuesday reported earnings of $29.9 million, or $1.64 per share in the first three months ended March 31, a 6 percent increase from the $28.1 million earned the year prior.
Revenue for the quarter, however, fell sharply by 18 percent to $245.6 million from $300.2 million in 2011.
The company was able to report higher earnings on lower sales because interest expense fell, debt extinguishment loss declined along with modification costs, and impairment and closure charges.
In the first quarter, DineEquity continued its franchising initiative of Applebee’s stores, franchising 17 locations. The company is now more than 95 percent franchised.
Officials also announced the sale of 39 more Applebee’s eateries in Virginia, expected to close in the third quarter. The sales resulted in net proceeds of $25 million. “Our business fundamentals remain healthy and our unique, highly franchised business model is generating strong free cash flow and enabling debt reduction, which are key measures of our success,” said CEO and Chairman Julia Stewart.