On July 26, Applebee's (NASDAQ:APPB) released Q2 2006 earnings for the period ended June 25.

  • Despite fewer shares outstanding boosting EPS by $0.02, the company missed earnings estimates.
  • Long-term debt rose drastically compared to last year, even though it was down slightly (by 2.9%) compared to last quarter.
  • Free cash flow took it on the chin, but unlike last quarter, it has turned positive.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2006

Q2 2005

Change

Sales

$331,320

$330,793

$306,620

7.9%

Net Profit

--

$20,404

$27,490

(25.8%)

EPS

$0.29

$0.27

$0.34

(20.6%)

Diluted Shares

--

75,083

81,360

(7.7%)



Get back to basics with a look at the income statement.

Margin Checkup

Q2 2006

Q2 2005

Change*

Gross Margin**

73.51%

73.39%

0.12

Operating Margin

10.41%

13.58%

(3.17)

Net Margin

6.17%

8.97%

(2.80)

*Expressed in percentage points.
** Based on gross profit defined as sales less cost of food and drink, without revenue from franchisees.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

Change

Cash + ST Invest.

$7,185

$944

661.1%

Accounts Rec.

$37,706

$38,318

(1.6%)

Inventory

$12,525

$27,112

(53.8%)


Liabilities

Q2 2006

Q2 2005

Change

Accounts Payable

$41,773

$47,456

(12%)

Total Debt

$201,749

$86,892

132.2%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q2 2006

Q2 2005

Change

Cash From Ops.

$38,914

$57,481

(32.3%)

Capital Expenditures

$29,008

$35,303

(17.8%)

Free Cash Flow

$9,906

$22,178

(55.3%)



Find out why Fools always follow the money.

Related Companies:

  • Brinker International (NYSE:EAT), operator of Chili's among others
  • Cheesecake Factory (NASDAQ:CAKE)
  • Darden Restaurants (NYSE:DRI), owner of Olive Garden and Red Lobster
  • OSI Restaurant Partners (NYSE:OSI), aka Outback Steakhouse
  • Ruby Tuesday (NYSE:RI)

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Jim Mueller had a position only in Cheesecake Factory. Fool rules are here.