<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
(MARK ONE)
<TABLE>
<C> <S>
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
</TABLE>
COMMISSION FILE NUMBER 0-8360
------------------------
IHOP CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 95-3038279
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
525 NORTH BRAND BOULEVARD, 91203-1903
GLENDALE, CALIFORNIA (Zip Code)
(Address of principal executive
offices)
</TABLE>
(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.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AS OF MARCH 31, 2000
----- --------------------------------
<S> <C>
Common Stock, $.01 par value 19,907,314
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
IHOP CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................. $ 1,867 $ 4,176
Receivables............................................... 30,913 35,335
Reacquired franchises and equipment held for sale, net.... 2,879 2,842
Inventories............................................... 818 1,223
Prepaid expenses.......................................... 4,283 4,309
-------- --------
Total current assets.................................... 40,760 47,885
-------- --------
Long-term receivables....................................... 273,375 265,983
Property and equipment, net................................. 185,425 177,743
Reacquired franchises and equipment held for sale, net...... 16,316 16,102
Excess of costs over net assets acquired, net............... 11,518 11,625
Other assets................................................ 1,046 1,064
-------- --------
Total assets............................................ $528,440 $520,402
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt...................... $ 8,956 $ 8,956
Accounts payable.......................................... 12,618 18,016
Accrued employee compensation and benefits................ 6,668 7,804
Other accrued expenses.................................... 8,672 5,896
Deferred income taxes..................................... 2,031 3,833
Capital lease obligations................................. 1,761 1,682
-------- --------
Total current liabilities............................... 40,706 46,187
-------- --------
Long-term debt.............................................. 41,077 41,218
Deferred income taxes....................................... 42,822 39,768
Capital lease obligations and other......................... 172,827 166,749
Shareholders' equity
Preferred stock, $1 par value, 10,000,000 shares
authorized; none issued................................. -- --
Common stock, $.01 par value, 40,000,000 shares
authorized; shares issued and outstanding: March 31,
2000, 19,907,314 shares; December 31, 1999, 20,117,314
shares.................................................. 201 201
Additional paid-in capital................................ 66,504 66,485
Retained earnings......................................... 165,523 158,294
Treasury stock, at cost (210,000 and no shares for
March 31, 2000 and December 31, 1999, respectively)..... (3,063) --
Contribution to ESOP...................................... 1,843 1,500
-------- --------
Total shareholders' equity.............................. 231,008 226,480
-------- --------
Total liabilities and shareholders' equity.............. $528,440 $520,402
======== ========
</TABLE>
See the accompanying notes to the consolidated financial statements.
2
<PAGE>
IHOP CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
-------------------
2000 1999
-------- --------
<S> <C> <C>
Revenues
Franchise operations
Rent...................................................... $11,721 $11,052
Service fees and other.................................... 32,936 28,552
------- -------
44,657 39,604
Sale of franchises and equipment............................ 5,977 5,711
Company operations.......................................... 17,772 16,007
------- -------
Total revenues.......................................... 68,406 61,322
------- -------
Costs and Expenses
Franchise operations
Rent...................................................... 6,291 5,672
Other direct costs........................................ 11,421 10,420
------- -------
17,712 16,092
Cost of sales of franchises and equipment................... 4,282 3,745
Company operations.......................................... 16,920 15,183
Field, corporate and administrative......................... 8,263 8,307
Depreciation and amortization............................... 3,314 3,016
Interest.................................................... 5,600 4,457
Other expense and (income), net............................. 560 (185)
------- -------
Total costs and expenses................................ 56,651 50,615
------- -------
Income before income taxes.................................. 11,755 10,707
Provision for income taxes.................................. 4,526 4,122
------- -------
Net income.............................................. $ 7,229 $ 6,585
======= =======
Net Income Per Share
Basic..................................................... $ .36 $ .33
======= =======
Diluted................................................... $ .36 $ .33
======= =======
Weighted Average Shares Outstanding
Basic..................................................... 20,076 19,817
======= =======
Diluted................................................... 20,255 20,209
======= =======
</TABLE>
See the accompanying notes to the consolidated financial statements.
3
<PAGE>
IHOP CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
2000 1999
-------- --------
<S> <C> <C>
Cash flows from operating activities
Net income................................................ $ 7,229 $ 6,585
Adjustments to reconcile net income to cash provided by
operating activities
Depreciation and amortization............................. 3,314 3,016
Deferred taxes............................................ 1,252 872
Contribution to ESOP...................................... 343 295
Change in current assets and liabilities
Accounts receivable..................................... 4,368 (2,839)
Inventories............................................. 405 37
Prepaid expenses........................................ 26 34
Accounts payable........................................ (5,398) (2,244)
Accrued employee compensation and benefits.............. (1,136) (1,204)
Other accrued expenses.................................. 2,776 809
Other, net................................................ 991 324
-------- --------
Cash provided by operating activities................. 14,170 5,685
-------- --------
Cash flows from investing activities
Additions to property and equipment....................... (15,773) (12,475)
Additions to notes and equipment contracts receivable..... (1,540) (2,123)
Principal receipts from notes and equipment contracts
receivable.............................................. 3,205 2,967
Additions to reacquired franchises held for sale.......... (483) (655)
-------- --------
Cash used by investing activities..................... (14,591) (12,286)
-------- --------
Cash flows from financing activities
Proceeds from issuance of long-term debt.................. -- 2,900
Proceeds from sale and leaseback arrangements............. 1,645 4,015
Repayment of long-term debt............................... (142) (2,912)
Principal payments on capital lease obligations........... (328) (230)
Treasury stock transactions............................... (3,063) 153
Exercise of stock options................................. -- 381
-------- --------
Cash (used) provided by financing activities.......... (1,888) 4,307
-------- --------
Net change in cash and cash equivalents..................... (2,309) (2,294)
Cash and cash equivalents at beginning of period............ 4,176 2,294
-------- --------
Cash and cash equivalents at end of period............ $ 1,867 $ --
======== ========
Supplemental disclosures
Interest paid, net of capitalized amounts................. $ 4,635 $ 3,397
Income taxes paid......................................... 51 168
Capital lease obligations incurred........................ 6,560 6,700
</TABLE>
See the accompanying notes to the consolidated financial statements.
4
<PAGE>
IHOP CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL: The accompanying consolidated financial statements for the
three months ended March 31, 2000, 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") 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, 1999, has been derived from audited financial statements, but does
not include all disclosures required by GAAP. The results of operations for the
three months ended March 31, 2000, are not necessarily indicative of the results
to be expected for the full year ending December 31, 2000.
2. Certain reclassifications have been made to prior year information to
conform to the current year presentation.
3. SEGMENTS: IHOP identifies its operating segments based on the
organizational units used by management to monitor performance and make
operating decisions. The Franchise Operations segment includes restaurants
operated by franchisees and area licensees in the United States, Canada and
Japan. The Company Operations segment includes company-operated restaurants in
the United States. We measure segment profit as operating income, which is
defined as income before field, corporate and administrative expense, interest
expense, and income taxes. Information on segments and reconciliation to income
before income taxes are as follows:
<TABLE>
<CAPTION>
SALES OF CONSOLIDATING
FRANCHISE COMPANY FRANCHISES ADJUSTMENTS CONSOLIDATED
OPERATIONS OPERATIONS AND EQUIPMENT AND OTHER TOTAL
---------- ---------- ------------- ------------- ------------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
THREE MONTHS ENDED MARCH 31, 2000
Revenues from external customers... $ 44,657 $17,772 $ 5,977 $ -- $ 68,406
Intercompany real estate charges
(revenues)....................... 1,495 171 -- (1,666) --
Depreciation and amortization...... 1,008 1,057 -- 1,249 3,314
Operating income (loss)............ 20,024 (953) 1,695 4,852 25,618
Field, corporate and
administrative................... 8,263
Interest expense................... 5,600
Income before income taxes......... 11,755
Additions to long-lived assets..... 13,055 1,119 483 1,599 16,256
Total assets....................... 391,145 46,748 19,195 71,352 528,440
THREE MONTHS ENDED MARCH 31, 1999
Revenues from external customers... $ 39,604 $16,007 $ 5,711 $ -- $ 61,322
Intercompany real estate charges
(revenues)....................... 1,425 111 -- (1,536) --
Depreciation and amortization...... 959 916 -- 1,141 3,016
Operating income (loss)............ 17,869 (681) 1,966 4,317 23,471
Field, corporate and
administrative................... 8,307
Interest expense................... 4,457
Income before income taxes......... 10,707
Additions to long-lived assets..... 6,510 1,280 655 4,685 13,130
Total assets....................... 324,286 42,405 17,938 65,775 450,404
</TABLE>
For management reporting purposes, we treat all restaurant lease revenues
and expenses as operating lease revenues and expenses, although most of these
leases are direct financing leases or capital lease obligations. The accounting
adjustments required to bring lease revenues and expenses into conformance with
GAAP are included in Consolidating Adjustments and Other. All of IHOP's owned
land and restaurant buildings are included in total assets in Consolidating
Adjustments and Other.
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
ENDED MARCH 31,
----------------------
2000 1999
-------- --------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Restaurant Data
Effective restaurants(a)
Franchise............................................... 678 619
Company................................................. 77 69
Area license............................................ 148 145
-------- --------
Total................................................. 903 833
======== ========
System-wide
Sales(b).................................................. $298,822 $269,633
Percent increase........................................ 10.8% 9.0%
Average sales per effective restaurant.................... $ 331 $ 324
Percent increase........................................ 2.2% 2.9%
Comparable average sales per restaurant(c)................ $ 343 $ 335
Percent decrease........................................ (0.7)% (0.4)%
Franchise
Sales..................................................... $244,097 $219,796
Percent increase........................................ 11.1% 13.0%
Average sales per effective restaurant.................... $ 360 $ 355
Percent increase........................................ 1.4% 3.5%
Comparable average sales per restaurant(c)................ $ 356 $ 346
Percent decrease........................................ (0.4)% (0.5)%
Company
Sales..................................................... $ 17,772 $ 16,007
Percent change.......................................... 11.0% (9.5)%
Average sales per effective restaurant.................... $ 231 $ 232
Percent decrease........................................ (0.4)% (2.9)%
Area License
Sales..................................................... $ 36,953 $ 33,830
Percent change.......................................... 9.2% (3.8)%
Average sales per effective restaurant...................... $ 250 $ 233
Percent change.......................................... 7.3% (4.5)%
</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 IHOP.
(c) "Comparable average sales" reflects sales for restaurants that are operated
for the entire fiscal period in which they are being compared. The
restaurants included in the calculations typically will be different from
period to period. 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
ENDED
MARCH 31,
-------------------
2000 1999
-------- --------
(UNAUDITED)
<S> <C> <C>
RESTAURANT DEVELOPMENT ACTIVITY
IHOP--beginning of period................................... 903 835
New openings
IHOP--developed......................................... 7 10
Investor and conversion program......................... 1 2
Area license............................................ -- --
--- ---
Total new openings.................................... 8 12
Closings
Company and franchise................................... (1) (3)
Area license............................................ (1) --
--- ---
IHOP--end of period......................................... 909 844
=== ===
Summary--end of period
Franchise................................................. 686 626
Company................................................... 75 73
Area license.............................................. 148 145
--- ---
Total IHOP.............................................. 909 844
=== ===
RESTAURANT FRANCHISING ACTIVITY
IHOP--developed............................................. 8 9
Investor and conversion program............................. 1 2
Rehabilitated and refranchised.............................. 3 --
--- ---
Total restaurants franchised.............................. 12 11
Reacquired by IHOP.......................................... (3) (6)
Closed...................................................... (1) (3)
--- ---
Net addition.............................................. 8 2
=== ===
</TABLE>
- ------------------------
GENERAL
The following discussion and analysis provides information we believe is
relevant to an assessment and understanding of IHOP'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 IHOP's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999. Certain
forward-looking statements are contained in this quarterly report. They use such
words as "may," "will," "expect," "believe," "plan," or other similar
terminology. These statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results to be materially different than
those expressed or implied in such statements. These factors include, but are
not limited to: availability of suitable locations and terms of the sites
designated for development; legislation and government regulation including the
ability to obtain satisfactory regulatory approvals; conditions beyond IHOP's
control such as weather or natural disasters; availability and cost of materials
and labor; cost and availability of capital; competition; continuing acceptance
of the International House of Pancakes brand and concept by guests and
franchisees; IHOP's overall marketing, operational and financial performance;
economic and political conditions; adoption of new, or changes in, accounting
policies and practices; and other factors discussed
7
<PAGE>
from time to time in our filings with the Securities and Exchange Commission.
Forward-looking information is provided by us 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, we disclaim
any intent or obligation to update these forward-looking statements.
Our quarterly results are subject to seasonal fluctuation. The mix and
number of restaurants franchised affect revenues from sales of franchises and
equipment and their associated costs of sales. We franchise four types of
restaurants: restaurants newly developed by IHOP, restaurants developed by
franchisees, restaurants developed by area licensees and restaurants that have
been previously reacquired from franchisees. Franchise rights for restaurants
newly developed by IHOP normally sell for a franchise fee of $200,000 to
$350,000 and have little if any associated cost of sales. Equipment for newly
developed IHOP Restaurants generally sell for approximately $300,000 and have
little or no profit margin. Franchise rights for restaurant 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. Area license
rights are normally granted in return for a one-time development fee that is
recognized ratably as restaurants are developed in the area. Previously
reacquired franchises normally sell for a franchise fee of $100,000 to $350,000,
include an equipment sale, and may have substantial costs of sales associated
with both the franchise and the equipment. The timing of sales of franchises is
affected by the timing of new restaurant openings, the condition of reacquired
franchise locations and the availability of qualified franchisees. The timing of
new restaurant openings is affected by a variety of real estate construction
issues including obtaining regulatory approvals and weather conditions. As a
consequence of the foregoing factors, the results of operations for the three
months ended March 31, 2000, are not necessarily indicative of the results to be
expected for the full year ending December 31, 2000.
SYSTEM-WIDE RETAIL SALES
System-wide retail sales include the sales of all IHOP restaurants, as
reported to IHOP by its franchisees, area licensees and company-operated
restaurants. System-wide retail sales grew $29,189,000 or 10.8% in the first
quarter of 2000. Growth in the number of effective restaurants and increases in
average sales per effective unit caused the growth in system-wide sales.
"Effective restaurants" are the number of restaurants in operation in a given
fiscal period adjusted to account for restaurants in operation for only a
portion of the period. Effective restaurants grew by 70 or 8.4% in the first
quarter of 2000 due to new restaurant development. Newly developed restaurants
generally have seating and sales above the system-wide averages. System-wide
average sales per effective restaurant (exclusive of area license restaurants in
Florida and Japan) grew 2.2% in the first quarter of 2000. Management continues
to pursue growth in sales through new restaurant development, advertising and
marketing efforts, improvements in customer service and operations, and
remodeling of existing restaurants.
FRANCHISE OPERATIONS
Franchise operations revenues are the revenues received by IHOP from its
franchisees and include rent, royalties, sales of proprietary products,
advertising fees and interest. Franchise operations revenues were 65.3% of total
revenues in the first quarter of 2000. Franchise operations revenues grew
$5,053,000 or 12.8% in the first quarter of 2000. An increase in the number of
effective franchise restaurants coupled with higher average sales per franchise
restaurant caused the growth in franchise operations revenues. Effective
franchise restaurants grew by 59 or 9.5% in the first quarter of 2000. Average
sales per effective franchise restaurant grew 1.4% in the first quarter of 2000.
Franchise operations costs and expenses include rent, advertising, the cost
of sales of proprietary products and other direct costs associated with
franchise operations. Franchise operations costs and expenses increased
$1,620,000 or 10.1% in the first quarter of 2000. Increases in franchise
operations costs were generally in line with the growth in franchise operations
revenue.
8
<PAGE>
Franchise operations margin is equal to franchise operations revenues less
franchise operations costs and expenses. Franchise operations margin increased
$3,433,000 to $26,945,000 in the first quarter of 2000. Franchise operations
margin was 60.3% of franchise operations revenues in the first quarter of 2000
compared with 59.4% in the same period in the prior year. Increased royalty
income and increased interest income associated with IHOP's financing of sales
of franchises and equipment to its franchisees were primarily responsible for
the improvement in franchise operations margin in 2000.
SALES OF FRANCHISES AND EQUIPMENT
Sales of franchises and equipment were 8.7% of total revenues in the first
quarter of 2000. Sales of franchises and equipment increased $266,000 or 4.7% in
the first quarter of 2000. An increase in the number of restaurants franchised
was the primary cause of the increase in sales of franchises and equipment. IHOP
franchised 12 restaurants in the first quarter of 2000 compared with 11 in the
same period in the prior year.
Cost of sales of franchises and equipment increased $537,000 or 14.3% in the
first quarter of 2000. The increase was generally in line with the increase in
the number of restaurants franchised, although the mix of restaurants franchised
also impacted the cost of sales.
Margin on sales of franchises and equipment is equal to sales of franchises
and equipment less the cost of sales of franchises and equipment. Margin on
sales of franchises and equipment decreased $271,000 to $1,695,000 in the first
quarter of 2000. Margin on sales of franchises and equipment was 28.4% compared
with 34.4% in the same period in the prior year. The change in margin was
primarily due to the sale of more rehabilitated and refranchised restaurants in
the first quarter of 2000 compared with the same period in the prior year.
COMPANY OPERATIONS
Company operations revenues are sales to customers at restaurants operated
by IHOP. Company operations revenues were 26.0% of total revenues in the first
quarter of 2000. Company operations revenues increased $1,765,000 or 11.0% in
the first quarter of 2000. An increase in the number of effective IHOP-operated
restaurants was primarily responsible for the change in revenues. Effective
IHOP-operated restaurants increased by eight or 11.6% in the first quarter of
2000. Average sales per effective IHOP-operated restaurant decreased by 0.4% in
the first quarter of 2000.
Company operations costs and expenses include food, labor and benefits,
utilities and occupancy costs. Company operations costs increased $1,737,000 or
11.4% in the first quarter of 2000. Increases in company operations costs were
generally in line with the growth in company operations revenue.
Company operations margin is equal to company operations revenues less
company operations costs and expenses. Company operations margin increased
$28,000 to $852,000 in the first quarter of 2000. Company operations margin was
4.8% of company operations revenues in the first quarter of 2000 compared with
5.1% in the same period in the prior year.
OTHER COSTS AND EXPENSES
Field, corporate and administrative costs and expenses decreased $44,000 or
0.5% in the first quarter of 2000 compared with the same period in the prior
year. The decrease was primarily caused by lower compensation expenses in the
first quarter of 2000 compared with the same period in the prior year. Field,
corporate and administrative costs were 2.8% of system-wide sales in the first
quarter of 2000 compared with 3.1% in the same period in the prior year.
Depreciation and amortization expense increased $298,000 or 9.9% in the
first quarter of 2000. The increases were caused primarily by the addition of
new restaurants to the IHOP chain from our ongoing restaurant development
program.
9
<PAGE>
Interest expense increased $1,143,000 or 25.6% in the first quarter of 2000.
The increases were due to interest associated with new capital leases which were
partially offset by reductions in interest on our senior notes due 2002 as the
principal balance is paid down.
BALANCE SHEET ACCOUNTS
The balance of long-term receivables at March 31, 2000, increased from
December 31, 1999 primarily due to IHOP's financing activities associated with
the sale of franchises and equipment and the leasing of restaurants to its
franchisees.
Balances of property and equipment, net and capital lease obligations at
March 31, 2000, increased from December 31, 1999 primarily due to new restaurant
development and IHOP's capital lease obligations associated with that
development.
LIQUIDITY AND CAPITAL RESOURCES
We invest in our business primarily through the development of additional
restaurants and, to a lesser extent, through the remodeling of older
company-operated restaurants.
In 2000, IHOP and its franchisees and area licensees forecast developing and
opening approximately 75 to 85 restaurants. Included in that number are the
development of 65 to 70 new restaurants by us and the development of 10 to 15
restaurants by our franchisees and area licensees. Capital expenditure
projections for 2000, which include our portion of the above development
program, are approximately $80 to $90 million. In November 2000, the fifth
annual installment of $4.6 million in principal becomes due on our senior notes
due 2002 and the first annual installment of $3.8 million in principal becomes
due on our senior notes due 2008. We expect that funds from operations, sale and
leaseback arrangements (estimated to be about $30 to $35 million) and our
$20 million revolving line of credit will be sufficient to cover our operating
requirements, our budgeted capital expenditures and our principal repayment on
our senior notes in 2000. At March 31, 2000 $20 million was available to be
borrowed under our unsecured bank revolving credit agreement.
10
<PAGE>
PART II.
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
Exhibits not incorporated by reference are filed herewith. The remainder of
the exhibits has heretofore been filed with the Commission and is incorporated
herein by reference.
<TABLE>
<C> <S>
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, 1997 (the "1997 Form 10-K"), is incorporated herein by
reference).
3.2 Bylaws of IHOP Corp. (Exhibit 3.2 to IHOP Corp.'s 1997 Form
10-K is incorporated herein by reference).
10.1 Employment Agreement between IHOP Corp. and Alan Unger
effective February 7, 2000. (Exhibit 10.21 to IHOP Corp.'s
Form 10-K for the fiscal year ended December 31, 1999 is
incorporated herein by reference).
11.0 Statement Regarding Computation of Per Share Earnings
27.0 Financial Data Schedule
</TABLE>
(b) No reports on Form 8-K were filed during the quarter ended March 31,
2000.
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.
<TABLE>
<C> <S> <C>
IHOP CORP.
(Registrant)
April 27, 2000 BY: /s/ RICHARD K. HERZER
-------------- ----------------------------------------
(Date) CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER (PRINCIPAL
EXECUTIVE OFFICER)
April 27, 2000 /s/ ALAN S. UNGER
-------------- ----------------------------------------
(Date) V.P.-FINANCE, TREASURER AND
CHIEF FINANCIAL OFFICER (PRINCIPAL
FINANCIAL OFFICER)
</TABLE>
12
<PAGE>
EXHIBIT 11.0
IHOP CORP. AND SUBSIDIARIES STATEMENT REGARDING
COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
-------------------
2000 1999
-------- --------
<S> <C> <C>
NET INCOME PER COMMON SHARE BASIC
Weighted average shares outstanding....................... 20,076 19,817
======= =======
Net income available to common shareholders............... $ 7,229 $ 6,585
======= =======
Net income per share--basic............................... $ 0.36 $ 0.33
======= =======
NET INCOME PER COMMON SHARE DILUTED
Weighted average shares outstanding....................... 20,076 19,817
Net effect of dilutive stock options based on the treasury
stock
method using the average market price................... 179 392
------- -------
Total..................................................... 20,255 20,209
======= =======
Net income available to common shareholders............... $ 7,229 $ 6,585
======= =======
Net income per share--diluted............................. $ 0.36 $ 0.33
======= =======
</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> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,876
<SECURITIES> 0
<RECEIVABLES> 30,913
<ALLOWANCES> 0
<INVENTORY> 818
<CURRENT-ASSETS> 40,760
<PP&E> 185,425
<DEPRECIATION> 0
<TOTAL-ASSETS> 528,440
<CURRENT-LIABILITIES> 40,706
<BONDS> 213,904
0
0
<COMMON> 199
<OTHER-SE> 230,809
<TOTAL-LIABILITY-AND-EQUITY> 528,440
<SALES> 23,749
<TOTAL-REVENUES> 68,406
<CGS> 21,202
<TOTAL-COSTS> 38,914
<OTHER-EXPENSES> 3,314
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,600
<INCOME-PRETAX> 11,755
<INCOME-TAX> 4,526
<INCOME-CONTINUING> 7,229
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,229
<EPS-BASIC> .36
<EPS-DILUTED> .36
</TABLE>
