<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------ -----
Commission File Number 0-8360
IHOP CORP.
(Exact name of registrant as specified in its charter)
Delaware 95-3038279
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
525 North Brand Boulevard, Glendale, California 91203-1903
(Address of principal executive offices) (Zip code)
(818) 240-6055
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of June 30, 1997
- ---------------------------- -------------------------------
Common Stock, $.01 par value 9,610,063
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS IHOP CORP. AND SUBSIDIARIES
(In thousands, except share amounts)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
--------- ------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 6,660 $ 8,658
Receivables 30,183 29,324
Reacquired franchises and equipment held for sale, net 1,944 1,474
Inventories 1,353 1,180
Prepaid expenses 234 676
-------- --------
Total current assets 40,374 41,312
-------- --------
Long-term receivables 147,144 143,338
Property and equipment, net 132,278 120,854
Reacquired franchises and equipment held for sale, net 11,015 8,352
Excess of costs over net assets acquired, net 12,695 12,908
Other assets 2,223 2,125
-------- --------
Total assets $345,729 $328,889
======== ========
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt $ 4,712 $ 4,731
Accounts payable 16,068 17,474
Accrued employee compensation and benefits 4,169 2,674
Other accrued expenses 4,028 5,024
Deferred income taxes 3,919 4,311
Capital lease obligations 974 870
-------- --------
Total current liabilities 33,870 35,084
-------- --------
Long-term debt 58,527 58,564
Deferred income taxes 25,530 25,061
Capital lease obligations and other 87,237 80,823
Shareholders' equity
Preferred stock, $1 par value, 10,000,000 shares authorized;
shares issued and outstanding: no shares -- --
Common stock, $.01 par value, 40,000,000 shares authorized;
shares issued and outstanding: June 30, 1997, 9,610,063
shares; December 31, 1996, 9,467,294 shares 96 95
Additional paid-in capital 52,137 48,768
Retained earnings 87,832 79,244
Contribution to ESOP 500 1,250
-------- --------
Total shareholders' equity 140,565 129,357
-------- --------
Total liabilities and shareholders' equity $345,729 $328,889
======== ========
</TABLE>
See the accompanying notes to the consolidated financial statements.
2
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS IHOP CORP. AND SUBSIDIARIES
(In thousands, except per share amounts)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------- -------------------------------
1997 1996 1997 1996
-------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
Revenues
Franchise operations
Rent $ 8,253 $ 7,190 $16,349 $14,373
Service fees and other 19,880 17,958 38,713 35,326
------- ------- ------- -------
28,133 25,148 55,062 49,699
Company operations 14,794 12,983 28,842 24,436
Other 8,647 6,334 14,111 10,622
------- ------- ------- -------
Total revenues 51,574 44,465 98,015 84,757
------- ------- ------- -------
Costs and Expenses
Franchise operations
Rent 4,359 3,923 8,553 7,919
Other direct costs 8,129 7,676 15,850 15,108
------- ------- ------- -------
12,488 11,599 24,403 23,027
Company operations 13,599 12,225 27,024 22,907
Field, corporate and administrative 7,435 6,181 14,488 12,902
Depreciation and amortization 2,464 1,972 4,913 3,870
Interest 3,499 2,757 7,005 5,389
Other 3,831 2,510 6,104 4,380
------- ------- ------- -------
Total costs and expenses 43,316 37,244 83,937 72,475
------- ------- ------- -------
Income before income taxes 8,258 7,221 14,078 12,282
Provision for income taxes 3,220 2,852 5,490 4,851
------- ------- ------- -------
Net income $ 5,038 $ 4,369 $ 8,588 $ 7,431
======= ======= ======= =======
Net Income Per Share
Net income per common and common
equivalent share $ .52 $ .46 $ .89 $ .78
======= ======= ======= =======
Weighted average common and common
equivalent shares outstanding 9,676 9,592 9,623 9,575
======= ======= ======= =======
</TABLE>
See the accompanying notes to the consolidated financial statements.
3
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS IHOP CORP. AND SUBSIDIARIES
(In thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities
Net income $ 8,588 $ 7,431
Adjustments to reconcile net income to cash provided
by operating activities
Depreciation and amortization 4,913 3,870
Deferred taxes 77 392
Contribution to ESOP 500 462
Change in current assets and liabilities
Accounts receivable (428) (2,287)
Inventories (173) (299)
Prepaid expenses 442 (445)
Accounts payable (1,406) (3,888)
Accrued employee compensation and benefits 1,495 1,243
Other accrued expenses (996) 347
Other, net 1,660 583
-------- --------
Cash provided by operating activities 14,672 7,409
-------- --------
Cash flows from investing activities
Additions to property and equipment (24,263) (17,779)
Proceeds from sale and leaseback arrangements 6,241 3,791
Additions to notes, equipment contracts and direct financing
leases receivable (3,296) (2,685)
Principal receipts from notes, equipment
contracts and direct financing leases receivable 3,869 3,065
Additions to reacquired franchises held for sale (765) (549)
-------- --------
Cash used by investing activities (18,214) (14,157)
-------- --------
Cash flows from financing activities
Proceeds from issuance of long-term debt 20 9,300
Repayment of long-term debt (35) (3,026)
Principal payments on capital lease obligations (320) (298)
Reacquisition of treasury shares (39) --
Issuance of common stock 1,918 528
-------- --------
Cash provided by financing activities 1,544 6,504
-------- --------
Net change in cash and cash equivalents (1,998) (244)
Cash and cash equivalents at beginning of period 8,658 3,860
-------- --------
Cash and cash equivalents at end of period $ 6,660 $ 3,616
======== ========
Supplemental disclosures
Interest paid, net of capitalized amounts $ 6,954 $ 5,238
Income taxes paid 5,532 4,081
Capital lease obligations incurred 5,973 5,966
</TABLE>
See the accompanying notes to the consolidated financial statements.
4
<PAGE>
IHOP CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. The accompanying consolidated financial statements for the six months ended
June 30, 1997 and 1996 have been prepared in accordance with generally
accepted accounting principles ("GAAP"). These financial statements have
not been audited by independent public accountants but include all
adjustments, consisting of normal, recurring accruals, which in the opinion
of management of IHOP Corp. and Subsidiaries ("IHOP" or the "Company") are
necessary for a fair presentation of the financial position and the results
of operations for the periods presented. The accompanying consolidated
balance sheet as of December 31, 1996 has been derived from audited
financial statements, but does not include all disclosures required by
GAAP. The results of operations for the six months ended June 30, 1997 are
not necessarily indicative of the results to be expected for the full year
ending December 31, 1997.
2. In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share."
SFAS No. 128 supersedes and simplifies the existing computational
guidelines under Accounting Principles Board Opinion No. 15, "Earnings Per
Share." It is effective for financial statements issued for periods ending
after December 15, 1997. Among other changes, SFAS No. 128 eliminates the
presentation of primary EPS and replaces it with basic EPS for which common
stock equivalents are not considered in the computation. It also revises
the computation of diluted EPS. It is not expected that the adoption of
SFAS No. 128 will have a material impact on the earnings per share results
reported by the Company under the Company's current capital structure.
5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
- ---------------------
The following table sets forth certain operating data for IHOP restaurants:
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
------------------------------------- ---------------------------------------
1997 1996 1997 1996
----------------- ----------------- ------------------ ------------------
<S> <C> <C> <C> <C>
(Dollars in thousands)
Restaurant Data
Effective restaurants (a)
Franchise 536 496 534 495
Company 63 56 62 54
Area license 139 133 138 132
-------- -------- -------- --------
Total 738 685 734 681
======== ======== ======== ========
System-wide
Sales (b) $221,066 $193,506 $437,525 $382,992
Percent increase 14.2% 10.0% 14.2% 10.9%
Average sales per effective
restaurant $ 299 $ 282 $ 596 $ 562
Percent increase 6.0% 1.1% 6.1% 1.6%
Comparable average sales
per restaurant (c) $ 309 $ 290 $ 610 $ 573
Percent increase 4.2% 0.3% 4.2% 0.4%
Franchise
Sales $173,744 $150,482 $342,291 $297,248
Percent increase 15.5% 12.1% 15.2% 12.5%
Average sales per effective
restaurant $ 324 $ 303 $ 641 $ 601
Percent increase 6.9% 2.7% 6.7% 3.1%
Comparable average sales
per restaurant (c) $ 318 $ 298 $ 629 $ 588
Percent increase 4.3% 0.3% 4.3% 0.4%
Company
Sales $ 14,794 $ 12,983 $ 28,842 $ 24,436
Percent increase 13.9% 23.5% 18.0% 23.8%
Average sales per effective
restaurant $ 235 $ 232 $ 465 $ 453
Percent increase 1.3% 7.9% 2.6% 7.9%
Area License
Sales $ 32,528 $ 30,041 $ 66,392 $ 61,308
Percent change 8.3% (3.6%) 8.3% (0.2%)
Average sales per effective
restaurant $ 234 $ 226 $ 481 $ 464
Percent change 3.5% (8.5%) 3.7% (5.7%)
</TABLE>
- --------------------
(a) "Effective restaurants" are the number of restaurants in a given fiscal
period adjusted to account for restaurants open only a portion of the period.
(b) "System-wide sales" are retail sales of franchisees, area licensees and
Company-operated restaurants, as reported to the Company.
(c) "Comparable average sales" reflects sales for restaurants that are operated
for the entire fiscal period in which they are being compared. Comparable
average sales do not include data on restaurants located in Florida and Japan.
6
<PAGE>
The following table summarizes IHOP's restaurant development and franchising
activity:
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
------------------------------ ----------------------------
1997 1996 1997 1996
------------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
RESTAURANT DEVELOPMENT ACTIVITY (a)
- -----------------------------------
IHOP - beginning of period 734 685 729 678
New openings
IHOP-developed 10 6 14 12
Investor program 3 7 3 9
Area license 2 1 4 2
---- ---- ---- ----
Total new openings 15 14 21 23
Closings
Company and franchise (3) (2) (4) (4)
Area license - - - -
---- ---- ---- ----
IHOP - end of period 746 697 746 697
==== ==== ==== ====
Summary - end of period
Franchise 543 507 543 507
Company 63 57 63 57
Area license 140 133 140 133
---- ---- ---- ----
Total IHOP 746 697 746 697
==== ==== ==== ====
RESTAURANT FRANCHISING ACTIVITY (a)
- -----------------------------------
IHOP-developed 10 7 15 11
Investor program 3 7 3 9
Rehabilitated and refranchised - - 1 -
---- ---- ---- ----
Total restaurants franchised 13 14 19 20
Reacquired by Company (2) (3) (8) (7)
Closed (2) (2) (3) (2)
---- ---- ---- ----
Net addition 9 9 8 11
==== ==== ==== ====
</TABLE>
- ---------------------
(a) The Company reports restaurants in Canada as franchise restaurants although
the eleven restaurants are operated under an area license agreement.
The following discussion and analysis provides information management
believes is relevant to an assessment and understanding of the Company's
consolidated results of operations and financial condition. The discussion
should be read in conjunction with the consolidated financial statements
and notes thereto contained in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996. Statements regarding future
restaurant development and capital expenditures are "forward-looking
statements" and involve known and unknown risks, uncertainties and other
factors which may cause the actual results to be different from those
expressed or implied in such statements. The number of restaurants which
the Company will develop, the timing of that
7
<PAGE>
development and the related capital required may be affected by several
factors. These factors include, but are not limited to: the availability of
suitable locations and terms of the sites designated for development; the
ability to obtain satisfactory regulatory approvals; conditions beyond the
Company's control such as weather, availability of construction materials
and labor; the cost and availability of capital; continuing acceptance of
the International House of Pancakes brand and concept by guests and
franchisees; the Company's overall financial performance; general economic
conditions; and other factors discussed from time to time in the Company's
filings with the Securities and Exchange Commission. Forward-looking
information is provided by the Company pursuant to the safe harbor
established under the Private Securities Litigation Reform Act of 1995 and
should be evaluated in the context of these factors. In addition, the
Company disclaims any intent or obligation to update these forward-looking
statements.
IHOP's quarterly results are subject to seasonal fluctuation with sales
generally higher in the warmer months and during holiday periods. IHOP's
results of operations are impacted by the timing of additions of new
restaurants, by the timing of the franchising of those restaurants, and by
the number of restaurants in the Company's inventory of restaurants that
are available for refranchising. Revenues from sales of franchises and
equipment and their associated costs of sales are affected by the mix and
number of restaurants franchised, as follows: (i) restaurants newly
developed by IHOP normally sell for a franchise fee of $200,000 to
$350,000, have little if any franchise cost of sales and have equipment in
excess of $300,000 that is usually sold at about break-even; (ii)
restaurants developed by franchisees normally sell for a franchise fee of
$50,000, have minor associated franchise cost of sales and do not include
an equipment sale; and (iii) previously reacquired franchises normally sell
for a franchise fee of $100,000 to $300,000, include an equipment sale, and
may have substantial costs of sales associated with both the franchise and
the equipment. As a consequence of the foregoing and other factors, the
results of operations for the six months ended June 30, 1997, are not
necessarily indicative of the results to be expected for the full year
ending December 31, 1997.
System-wide retail sales grew 14.2% for both the second quarter and first
six months of 1997 over system-wide retail sales for the comparable 1996
periods. This was due to growth in the number of effective restaurants of
7.7% and 7.8% and increases in average per unit revenues of 6.0% and 6.1%
over the respective prior year periods. System-wide comparable average
sales per restaurant (exclusive of area license restaurants in Florida and
Japan) grew 4.2% for both the second quarter and first six months of 1997
over those in the comparable 1996 periods. Management continues to pursue
sales increases through the Company's restaurant development program,
improved marketing efforts, improvements in customer service and
operations, and the Company's remodeling program.
Franchise operations revenues for the second quarter and first six months
of 1997 grew 11.9% and 10.8%, respectively, over revenues for the
comparable 1996 periods. This was primarily due to growth in the number of
effective franchised units of 8.1% and 7.9% coupled with increases in
average per unit revenues of 6.9% and 6.7% for the quarter and the first
six months, respectively, over the prior year periods. Franchise operations
costs and expenses for the second quarter and first six months of 1997
increased 7.7% and 6.0%, respectively, over costs and expenses for the
comparable 1996 periods. As a result of franchise revenues increasing in
excess of franchise expenses, the margin from franchise operations improved
to 55.6% and 55.7% in the second quarter and first six months of 1997,
respectively, versus 53.9% and 53.7% in the comparable 1996 periods. The
margin improved primarily because of improved rent margins due, in part, to
an increase in the number of IHOP owned restaurants which do not have rent
expense coupled with increased interest income associated with IHOP's
financing of sales of franchises and equipment to its franchisees.
8
<PAGE>
Company-operated restaurant revenues for the second quarter and first six
months of 1997 grew 13.9% and 18.0%, respectively, over revenues for the
comparable 1996 periods. This was primarily due to increases in the number
of effective Company-operated restaurants of 12.5% and 14.8%, respectively,
and in the revenues per effective Company-operated restaurant of 1.3% and
2.6%, respectively, in the second quarter and first six months of 1997 over
the comparable 1996 periods. Company-operated restaurant costs and expenses
for the second quarter and first six months of 1997 increased 11.2% and
18.0%, respectively, over costs and expenses for the comparable 1996
periods. Margin from Company-operated restaurants was 8.1% in the second
quarter and 6.3% for the first six months of 1997 versus 5.8% for the
second quarter and 6.3% in first six months of 1996. The improvement in
margin in the second quarter of 1997 was primarily due to decreases in food
costs, salaries, wages and rent expense as a percentage of revenues.
Other revenues for the second quarter and first six months of 1997 grew
36.5% and 32.9%, respectively, over other revenues for the comparable 1996
periods. The primary reasons for the increases were (a) growth in the sales
of franchises and equipment to $6,108,000 in the second quarter and to
$9,032,000 in the first six months from $4,330,000 and $6,578,000 in the
respective prior year periods, and (b) growth in interest income from
direct financing leases. The Company franchised 13 and 19 restaurants in
the second quarter and first six months of 1997, respectively, compared
with 14 and 20 restaurants in the comparable 1996 periods. Other costs and
expenses for the second quarter and first six months of 1997 increased
52.6% and 39.4%, respectively, over the comparable 1996 periods. The
increases were primarily due to higher franchise and equipment cost of
sales of $3,228,000 in the second quarter and $4,883,000 in the first six
months versus $2,066,000 and $3,296,000 in the comparable 1996 periods.
Field, corporate and administrative expenses for the second quarter and
first six months of 1997 increased 20.3% and 12.3%, respectively, over the
comparable 1996 periods. The increases were principally due to increases in
employee related compensation and expenses and professional services.
Field, corporate and administrative expenses were 3.4% and 3.3% of
system-wide sales in the second quarter and first six months of 1997,
respectively, compared with 3.2% and 3.4% in the comparable 1996 periods.
Depreciation and amortization expense increased 25.0% and 27.0% in the
second quarter and first six months of 1997, respectively, over the
comparable 1996 periods primarily reflecting the addition of new, larger
restaurants and an increase in the number of Company-operated restaurants.
Interest expense increased 26.9% and 30.0% in the second quarter and first
six months of 1997, respectively, over the comparable 1996 periods due to
interest associated with increased capital lease obligations and the
private placement of $35 million in senior notes in November 1996.
Provision for income taxes was 39.0% of income before income taxes in both
the second quarter and first six months of 1997 versus 39.5% in the
comparable 1996 periods.
Liquidity and Capital Resources
-------------------------------
The Company invests available funds into its business through the
development of additional restaurants and the remodeling of older
Company-operated restaurants.
In 1997, IHOP and its franchisees and area licensees plan to develop and
open a total of approximately 70 restaurants, consisting of 49 restaurants
developed by the Company and 21 restaurants developed by IHOP franchisees
and area licensees. The Company's previous forecast for development in 1997
was a total of approximately 75 restaurants, of which 54 were to be
9
<PAGE>
developed by the Company and 21 by franchisees and area licensees. Capital
expenditures budgeted for 1997, which include IHOP's portion of the above
development program, are approximately $58 million. In November 1997, the
second annual installment of $4.6 million in principal becomes due on the
Company's senior notes due 2002. The Company expects that funds from
operations, sale and leaseback arrangements (estimated to be about $18
million) and its revolving line of credit will be sufficient to cover its
operating requirements, its projected capital expenditures and its
principal repayment on its senior notes in 1997. At June 30, 1997, $20
million was available to be borrowed under the Company's unsecured bank
revolving credit agreement. In June 1997, the Company's unsecured bank
revolving credit agreement was extended one year, through June 30, 2000,
under the same terms and conditions.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Not applicable.
Part II. OTHER INFORMATION
---------------------------
Item 4. Submission of Matters to a Vote of Security Holders.
The annual meeting of shareholders (the "Meeting") was held on May 13,
1997. Shareholders voted in person or by proxy for the following purposes.
(a) Shareholders voted to elect three Class III directors, each to serve
for a term of three years as follows:
<TABLE>
<CAPTION>
Votes Votes
Nominee For Withheld
------------------------- --------- --------
<S> <C> <C>
H. Frederick Christie 9,000,086 5,055
Richard K. Herzer 8,962,159 42,982
Patrick W. Rose 8,999,986 5,155
</TABLE>
There were no abstentions or broker non-votes. Directors whose terms
of office continued after the Meeting included the above three
directors and Frank Edelstein, Michael S. Gordon, Neven C. Hulsey,
Larry Alan Kay, Dennis M. Leifheit and Caroline W. Nahas.
(b) Shareholders voted to ratify the appointment of Coopers & Lybrand
L.L.P. as the Company's independent accountants for the year ending
December 31, 1997. 8,998,188 shares were voted for this proposal,
4,721 were voted against, there were 2,232 abstentions and no broker
non-votes.
(c) A shareholder proposal was submitted at the Meeting for
consideration by shareholders. The proposal requested that the Board
of Directors adopt a policy making all of IHOP's company-operated
restaurants smoke-free by January 1, 1998, and that, beginning in
1998, all new franchised facilities be smoke-fee and all renewals of
franchise agreements require that the affected restaurant be
smoke-free. 279,256 shares were voted for this proposal, 7,797,015
were voted against, there were 270,659 abstentions and 658,211 broker
non-votes.
10
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibits not incorporated by reference are filed herewith. The remainder of
the exhibits have heretofore been filed with the Commission and are
incorporated herein by reference.
3.1 Certificate of Incorporation of IHOP Corp. Exhibit 3.1 to IHOP Corp.'s
Form 10-K for the fiscal year ended December 31, 1991, Commission file
number 0-8360, (the "1991 Form 10-K") is hereby incorporated by
reference.
3.2 Bylaws of IHOP Corp. Exhibit 3.2 to IHOP Corp.'s Registration
Statement on Form S-1 No. 33-40431 is hereby incorporated by
reference.
11 Statement Regarding Computation of Per Share Earnings.
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended June 30,
1997.
11
<PAGE>
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.
IHOP CORP.
-------------------------------
(Registrant)
July 30, 1997 BY: /s/ Richard K. Herzer
- --------------- -------------------------------
(Date) Richard K. Herzer
Chairman of the Board,
President and Chief Executive
Officer (Principal Executive
Officer)
July 30, 1997 BY: /s/ Frederick G. Silny
- ---------------- -------------------------------
(Date) Frederick G. Silny
Vice President-Finance and
Treasurer (Principal Financial
Officer)
12
<PAGE>
EXHIBIT 11
IHOP CORP. AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
-------- ------- ------- ------
<S> <C> <C> <C> <C>
NET INCOME PER COMMON SHARE - PRIMARY
Weighted average shares outstanding 9,558 9,447 9,523 9,421
Net effect of dilutive stock options based on the
treasury stock method using average market price 118 145 100 149
------ ------ ------ ------
Total 9,676 9,592 9,623 9,570
====== ====== ====== ======
Net income available to common shareholders $5,038 $4,369 $8,588 $7,431
====== ====== ====== ======
Net income per share - primary $ .52 $ .46 $ .89 $ .78
====== ====== ====== ======
NET INCOME PER COMMON SHARE - FULLY DILUTED
Weighted average shares outstanding 9,558 9,447 9,523 9,421
Net effect of dilutive stock options based on the treasury
stock method using the period-end market price,
if higher than the average market price 179 145 131 154
------ ------ ------ ------
Total 9,737 9,592 9,654 9,575
====== ====== ====== ======
Net income available to common shareholders $5,038 $4,369 $8,588 $7,431
====== ====== ====== ======
Net income per share - fully diluted $ .52 $ .46 $ .89 $ .78
====== ====== ====== ======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF IHOP CORP. AND SUBSIDIARIES AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 6,660
<SECURITIES> 0
<RECEIVABLES> 30,183
<ALLOWANCES> 0
<INVENTORY> 1,353
<CURRENT-ASSETS> 40,374
<PP&E> 132,278
<DEPRECIATION> 0
<TOTAL-ASSETS> 345,729
<CURRENT-LIABILITIES> 33,870
<BONDS> 145,764
0
0
<COMMON> 96
<OTHER-SE> 140,469
<TOTAL-LIABILITY-AND-EQUITY> 345,729
<SALES> 0
<TOTAL-REVENUES> 98,015
<CGS> 0
<TOTAL-COSTS> 57,531
<OTHER-EXPENSES> 4,913
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,005
<INCOME-PRETAX> 14,078
<INCOME-TAX> 5,490
<INCOME-CONTINUING> 8,588
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,588
<EPS-PRIMARY> .89
<EPS-DILUTED> .89
</TABLE>
