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Apr-28-2008IHOP's Net Income Jumps 22% On Sales Growth, Lower Tax Rate(topic overview)
CONTENTS:
- On March 19, 2008, IHOP announced it had reached agreement with Apple American Group LLC for the sale of 41 company-operated Applebee's restaurants located in Southern California and Nevada. (More...)
- The 2007 Predecessor information represents data derived from Applebee's for the three months ended March 31, 2007, prior to the acquisition date of November 29, 2007. (More...)
- We also made progress on our plan to improve Applebee's company restaurant operating margins as the result of better management of labor and controllable expenses during the quarter. (More...)
- Ihop fell $4.60, or 8.9 percent, to $47 in early New York Stock Exchange composite trading. (More...)
- General and administrative expenses for the quarter almost tripled to $47.57 million from $16.12 million in the year-ago period. (More...)
- Information is presented for all effective restaurants in the IHOP system, which includes restaurants owned by the Company as well as those owned by franchisees and area licensees. (More...)
- On average, 4 analysts polled by Thomson FirstCall expected the company to lose $0.03 per share. (More...)
- The transaction is expected to close on or before June 1, 2008, with after-tax cash proceeds of approximately $40 million. (More...)
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On March 19, 2008, IHOP announced it had reached agreement with Apple American Group LLC for the sale of 41 company-operated Applebee's restaurants located in Southern California and Nevada. The company reiterated its plans to franchise approximately 100 company-operated Applebee's restaurants in fiscal 2008 for after-tax cash proceeds ranging between $90 and $100 million. Looking ahead to fiscal 2008, the company backed its expectations for IHOP same-store sales growth in the range of 2% - 4%. IHOP anticipates its franchisees and area licensee to open between 65 and 70 new IHOP restaurants this year. The company also reiterated its expectations for Applebee's same-store sales growth of 1% - 2% for fiscal 2008. The company anticipates its franchisees to open between 50 and 65 new Applebee's restaurants. Applebee's will open only one company restaurant this year, which occurred in the first quarter 2008. Due to a reclassification of expenditures from consolidated cash from operating activities to consolidated capital expenditures of approximately $8 million, the company revised its fiscal 2008 outlook for consolidated capital expenditures and consolidated cash from operating activities. [1] Same-store sales rose 3.7 percent at the IHOP business unit during the quarter and were up 0.5 percent at Applebee's, where price increases helped reverse two years of slumping comparable sales. The company repeated its forecast for IHOP same-store sales growth of 2 percent to 4 percent for fiscal 2008, and for its franchisees and area licensee to open between 65 and 70 new IHOP restaurants this year. It continues to expect Applebee's same-store sales to grow between 1 percent and 2 percent for fiscal 2008, and for its franchisees to open between 50 and 65 new Applebee's restaurants, in addition to one company-opened Applebee's. The company raised its 2008 forecast for consolidated cash from operations and capital expenditures due to a reclassification of construction costs for its new support center in Lenexa, Kansas.[2]
In fiscal 2008, the Company expects to generate between $88 and $97 million in consolidated free cash flow. The Company reiterated its expectations for IHOP same-store sales to grow between 2% and 4% for fiscal 2008, and for its franchisees and area licensee to open between 65 and 70 new IHOP restaurants this year. IHOP Corp. also reiterated its expectations for Applebee's same-store sales to grow between 1% and 2% for fiscal 2008, and for its franchisees to open between 50 and 65 new Applebee's restaurants and that Applebee's will open only one company restaurant this year, which occurred in the first quarter 2008. IHOP Corp. also reiterated its consolidated G&A; expense expectations of ranging between $186 and $199 million in fiscal 2008. IHOP Corp. will host an investor conference call to discuss its first quarter 2008 financial results today, Monday, April 28, 2008, at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time).[3] IHOP Corp. (NYSE: IHP) today announced financial results for the first quarter ended March 31, 2008, which included the first full quarter of operating results after the Company's acquisition of Applebee's International, Inc. on November 29, 2007. The Applebee's business unit produced system- wide domestic same-store sales growth of 0.5%, reflecting its first quarter of positive growth in two years. -- Franchisees opened 11 new IHOP restaurants and 16 new Applebee's restaurants during the first quarter 2008, bringing the total number of IHOP and Applebee's restaurants system-wide to 1,353 and 1,986, respectively. -- Consolidated cash from operating activities amounted to $10.0 million in the first quarter 2008.[3]
Currently, the Company is in discussions with a number of prospective franchisees for the sale of additional markets in fiscal 2008. IHOP Corp. is amending its 2008 financial performance guidance for consolidated capital expenditures and consolidated cash from operating activities due to a reclassification of expenditures from consolidated cash from operating activities to consolidated capital expenditures of approximately $8 million. These expenditures were associated with final construction costs of Applebee's newly developed Restaurant Support Center in Lenexa, Kansas.[3] The expenditures were associated with final construction costs of Applebee's newly developed Restaurant Support Center in Lenexa, Kansas, according to the company. For fiscal 2008, the company revised its consolidated cash from operations outlook to $105 - $110 million range from its previous expectations of approximately $100 million. The company now expects consolidated capital expenditures to range between $30 and $34 million, compared to its prior outlook of approximately $25 million for fiscal 2008. IHOP also reiterated its consolidated G&A; expense expectations for fiscal 2008 in the range of $186 - $199 million. In fiscal 2008, the company expects its consolidated free cash flow to range between $88 and $97 million.[1]
The Company's cash position was augmented by $4.2 million from the run-off of the IHOP business's long-term notes receivable. -- Consolidated capital expenditures were $18.1 million for the first quarter 2008, primarily attributable to expenditures on the Applebee's Restaurant Support Center in Lenexa, Kansas, and company-operated Applebee's restaurants.[3] Consolidated capital expenditures were higher than anticipated at $18.1 million, primarily as the result of final construction expenditures on Applebee's Lenexa Restaurant Support Center in Lenexa, Kansas, and company-operated Applebee's restaurants. While IHOP Corp. is making progress on its planned sale-leaseback of Applebee's 191 company-owned restaurant locations, the transaction has been challenged by weakening credit market conditions. The Company is continuing its negotiations with several parties and will determine if the deal terms available are in its best economic interests to move forward with a transaction during the second quarter 2008.[3]
The decreases were primarily due to a $48.4 million increase in interest expense primarily related to the financing of the Applebee's acquisition, a $31.5 million increase in G&A; expenses due to a full quarter of Applebee's G&A; expenses, as well as dividends on preferred stock issued to finance the Applebee's acquisition. These factors were partially offset during the first quarter 2008 by the strong performance of the parent company's core franchising businesses, which produced a $40.7 million increase in Franchise Operations profitability due to a full quarter's recognition of Applebee's Franchise Operations profit and a 12.5% increase in IHOP Franchise Operations profit.[3] Costs in the first quarter rose almost sixfold to $427.3 million on expenses related to the Applebee's acquisition, Ihop said. Including preferred stock dividends and other items, the company reported net income available to common stockholders of $8.58 million, down 24 percent from the previous year, when it didn't have those costs.[4]
Net income increased to $13.9 million, or 50 cents a share, from $11.3 million, or 63 cents, a year earlier, Glendale, Calif. -based Ihop said today in a statement. Sales jumped almost fivefold to $442.8 million as the company completed its first full quarter with results from Applebee's, the casual-dining chain it bought last year.[4]
IHOP Corp. posted a surprise 22% jump in first-quarter net income, as expenses related to its November acquisition of the Applebee's chain were more than offset by sales growth at both chains and a lower effective tax rate. IHOP warned that its planned sale-leaseback of 191 Applebee's company-owned restaurant locations "has been challenged by weakening credit-market conditions," and the company still has to determine if a deal would be in the "best economic interests of the company."[5] IHOP's quarterly net income available to common stockholders declined 24.1% as interest expense primarily related to the financing of the Applebee's acquisition took a bite out of the company's bottom line.[1]
Results, however, were ahead of the Thomson Reuters mean estimate of a loss of 3 cents a share. The restaurant company said the year-over decline was mainly from a $48.4 million increase in interest expense primarily related to the financing of its acquisition of Applebee's, an increase of $31.5 million in general and administrative expenses as Applebee's G&A; contribution was folded into the company's accounts.[6] Results from the most recent quarter included a $48.4 million increase in interest expense related to financing the Applebee's acquisition, a $31.5 million increase in expenses related to Applebee's, as well as costs associated with dividends on preferred stock issued to finance the purchase.[2]
Quarterly profit totaled $8.6 million, or 50 cents per share, compared with $11.3 million, or 63 cents per share last year. The decline is mainly due to higher interest expense from financing its Applebee's acquisition, and higher general and administrative expenses related to Applebee's.[7] LOS ANGELES, April 28 (Reuters) - Restaurant operator IHOP Corp (IHP.N: Quote, Profile, Research ) reported on Monday a 24 percent decline in quarterly profit, hurt by higher interest expense and other items related to its Applebee's acquisition, sending shares down as much as 8.8 percent.[2] NEW YORK, April 28 (Reuters) - Restaurant operator IHOP Corp (IHP.N: Quote, Profile, Research ) reported lower net profit on Monday, hurt by higher interest expense related to financing the recent acquisition of Applebee's.[8]
The drop resulted mostly from a $48.4 million rise in interest expenses caused mainly by financing IHOP's purchase of Applebee's, a $31.5 million rise in general and administrative expenses from Applebee's and dividends on preferred stock issued to finance the Applebee's acquisition, IHOP said in the release.[9]
IHOP's franchising business performed well enough to partially offset the higher expenses, with a $40.7 million rise in franchise operations profitability because of adding Applebee's franchised restaurants, a 12.5 percent rise in IHOP franchise operations profit and a lower effective tax rate of 9.9 percent -- compared with 36.9 percent for the same quarter a year earlier -- which came from compensation-related tax credits because of Applebee's company-owned restaurants.[9] IHOP's core franchising businesses produced a $40.7 million increase in Franchise Operations profitability due to a full quarter's recognition of Applebee's Franchise Operations profit and a 12.5% increase in IHOP Franchise Operations profit.[1]
On March 19, 2008, IHOP Corp. announced that it had reached agreement with Apple American Group LLC for the sale of 41 company-operated Applebee's restaurants located in Southern California and Nevada. The agreement also provided for future franchise restaurant development in these markets. IHOP Corp. reiterated its plans to franchise approximately 100 company-operated Applebee's restaurants in fiscal 2008 for after-tax cash proceeds ranging between $90 and $100 million.[3] Domestic franchise restaurant sales for Applebee's restaurants were $897.8 million and $875.0 million for the first quarter ended March 31, 2008 and 2007, respectively.[3]
The IHOP business unit continued to perform well during the first quarter 2008 as we drove same-stores sales growth, benefited from new franchise restaurant openings, moderated G&A; spending and minimized capital expenditures.[3] The system-wide same-store sales of IHOP business unit grew 3.7% in the recent first quarter, which represents the 21st consecutive quarter of positive growth. The Applebee's business unit produced system-wide domestic same-store sales growth of 0.5%, reflecting its first quarter of positive growth in two years.[1] After two years of negative same-store sales, Applebee's showed a modest 0.5% sales boost in the first quarter, though mostly on price increases, while traffic was down slightly. Stewart believes that, despite the economy, she can boost Applebee's same-store sales growth to 1% to 2% for 2008. She also calmly insists that revenge for being passed over was not a motive in buying the chain. "I'd never jeopardize $2.1 billion for my moment of glory," says Stewart, in her first extensive interview since acquiring Applebee's. She bought Applebee's, with its 1,986 units and sales of $4.7 billion, only after looking at 30 other chains, she says.[10]
Capital expenditures will be $30 million to $34 million for the year, up from Ihop's previous guidance of $25 million. The company expects to have as much as $97 million in consolidated free cash flow and maintained its forecast for Ihop same-store sales growth of 2 percent to 4 percent this year.[4] IHOP restaurant same-store sales, or sales in restaurants open at least a year, increased 3.7 percent for the three months for the 21st-consecutive quarter of growth.[9] Same-store sales, or sales in stores open at least one year, rose 3.7 percent during the quarter at IHOP restaurants and rose 0.5 percent at Applebee's. IHOP said its plan to sell and leaseback 191 company-owned restaurants has been "challenged" by weak credit-market conditions.[7]
IHOP said it expects Applebee's same-store sales to grow 1 percent to 2 percent during the fiscal year.[9]
Same-store sales for Applebee's, based in Lenexa, rose 0.5 percent for the quarter -- the casual-dining chain's first quarter of positive same-store sales in two years.[9] Casual dining sales declined 0.3% in the first quarter of 2008, reports tracker Technomic. Some chains have been hit much harder, such as Ruby Tuesday, where same-store sales plummeted about 12% in the quarter. Stewart's restaurants appear to be resisting the downdraft this year.[10]
Company restaurant sales, which formed a major chunk of the total revenue was $311.9 million in the recent first quarter, up from $3.98 million in the year earlier period.[1] The Company's consolidated cash from operating activities of $10.0 million in the first quarter 2008 was impacted by a $32.1 million decrease in deferred revenues primarily due to the redemption of Applebee's gift cards as expected during the quarter.[3]
Rental income contributed $32.96 million to the total revenue in the recent first quarter, compared with $33 million in the year-ago period.[1] Franchise revenue in the recent first quarter almost doubled to $89.93 million from $47 million in the year earlier quarter.[1] IHOP's earnings for the first quarter of 2007 were $11.3 million, and its revenue was $90.1 million.[9]
Revenue for the three-month period rose to $442.8 million from $90.1 million in the same quarter a year ago. Ihop lifted one of its key 2008 financial targets, saying it now sees cash from operations in the range of $105 million or $110 million versus a prior estimate of $100 million.[6] IHOP's total revenues for the quarter jumped to $442.79 million from $90.12 million in the comparable quarter a year before.[1]
Revenue jumped to $442.8 million from $90.1 million, due to the addition of sales from Applebee's, which IHOP acquired for about $2.1 billion in November.[2] Franchise restaurant sales are sales recorded at restaurants that are owned by franchisees and are not attributable to the Company (2008) or Applebee's (2007). Franchise restaurant sales are useful in analyzing our franchise revenues because franchisees pay royalties and other fees that are generally based on a percentage of their sales. Data for company-operated Applebee's restaurants for both periods excludes the impact of discontinued operations. Because of new unit openings and store closures, the restaurants open throughout both fiscal periods being compared will be different from period to period.[3] Franchise restaurant retail sales and Area License retail sales are sales recorded at restaurants that are owned by franchisees and area licensees and are not attributable to the Company. Franchise restaurant retail sales and Area License retail sales are useful in analyzing our franchise revenues because franchisees and area licenses pay us royalties and other fees that are generally based on a percentage of their sales.[3]
Sales of restaurants that are owned by franchisees and area licensees are not attributable to the Company. We believe that presentation of this information is useful in analyzing our revenues because franchisees and area licensees pay us royalties and advertising fees that are generally based on a percentage of their sales, as well as rental payments under leases that are usually based on a percentage of their sales. Management also uses this information to make decisions about future plans for the development of additional restaurants as well as evaluation of current operations.[3]
"Effective restaurants" are the number of restaurants in a given period, adjusted to account for restaurants open for only a portion of the period. Information is presented for all effective restaurants in the IHOP system, which includes restaurants owned by the Company, as well as those owned by franchisees and area licensees.[3]
Franchisees may open 65 to 70 Ihop restaurants and 50 to 65 Applebee's locations. The company said it doesn't plan to open more company-owned Applebee's restaurants this year beyond the one started in the first quarter.[4] During the first quarter of 2008, franchises opened 11 new IHOP restaurants and 16 new Applebee's restaurants.[1]
Sales at IHOP restaurants open at least a year were up 3.7% in the first quarter.[10] Commenting on the Company's results, Lonnie J. Stout II, Chairman, President and Chief Executive Officer, said, "The decline in same store sales, which we experienced beginning in mid-September of last year, continued through the first quarter of 2008. This decline, which we believe is due to economic issues affecting our guests, was the primary reason for our weaker performance in the quarter."[11]
"Within the Applebee's business unit, we generated the brand's first positive quarter of same-store sales growth since the first quarter 2006.[3]
GLENDALE, Calif. - Among the first things that CEO Julia Stewart did to fix IHOP was stuff the French toast with gooey cream cheese. Her next big fix, Applebee's, may be even stickier. It will be more expensive. It is likely to cement or shatter her rock-solid reputation in an industry known to eat its executives for breakfast, lunch and dinner. Leading the charge: Stewart, once domestic president of Applebee's, which snubbed her for the CEO slot there several years ago. The former IHOP waitress who turned that chain around has returned to Applebee's with syrup on her hands but ketchup in her veins. Now one of the most powerful women in the restaurant world ever she's on a mission. Stewart, 52, vows to fix Applebee's in much the same way she rebuilt IHOP after arriving six years ago: better food, better ads, better atmosphere and conversion to a near-100% franchise business model from the current about 75%. She wants Applebee's again to be the friendly, neighborhood bar and grill it was. Folks will get an early read on how she's doing when IHOP releases first-quarter results today.[10] IHOP, which adopts a traditional franchise business model, intends to transition Applebee's, one of the few company-owned national food chains, also to the franchise model. Though IHOP is making progress on its planned sale-leaseback of Applebee's 191 company-owned restaurant locations, the transaction has been challenged by weakening credit market conditions. IHOP said it is continuing its negotiations with several parties and expects to move forward with a transaction during the second quarter of 2008.[1]
IHOP franchises restaurants, and Applebee's has a mix of 191 company-operated restaurants and 1,865 franchised locations, which result in higher revenue and expenses.[9] Revenue rose to $442.8 million from $90.1 million last year, due to the addition of Applebee's results.[7] Financing revenues for the quarter were $7.96 million, up from $6.08 million in the comparable year ago period.[1]
The Glendale, California-based pancake house operator's quarterly net income available to common stockholders declined to $8.58 million or $0.50 per share from $11.3 million or $0.63 per share in the same period last year.[1] First-quarter net income available to common stockholders was $8.6 million, or 50 cents per share, down from $11.3 million, or 63 cents per share, a year earlier.[2]
For the quarter ended March 31, 2008, the Company reported a 24.1% decrease in net income available to common stockholders to $8.6 million, or a 20.6% decrease in net income per diluted share available to common shareholders to $0.50.[3] The company said first-quarter operating income fell to $8.6 million, or 50 cents a share from $11.3 million, or 63 cents a share in the same quarter a year ago.[6]
The nation's largest full-service restaurant operator reported net income of $13.9 million, or 50 cents a share, compared with net income.[5] The company's net income for the quarter ended March 31, 2008, increased to $13.85 million from $11.31 million in the year-earlier quarter.[1] The company's net income for the quarter rose 22.4%, helped by higher sales and lower tax rate.[1]
"Darwin recorded a significant increase in net income and gross premiums written in the current quarter as compared to the first quarter of 2007, and we demonstrated our continued commitment to underwriting profitability with a first-quarter combined ratio of 64.7 percent.[11] Pancake-house operator IHOP Corp. said Monday first-quarter net income fell 24 percent, due to costs related to an acquisition.[7]
The 2007 Predecessor information represents data derived from Applebee's for the three months ended March 31, 2007, prior to the acquisition date of November 29, 2007. The following table sets forth the number of effective restaurants in the Applebee's system and information regarding the percentage change in sales at those restaurants compared to the same period in the prior year. [3] IHOP has 1,353 units and $2.3 billion in sales. Key for consumers in her plan to turn Applebee's around within one year: Food quality will be raised a notch. Stewart says Applebee's is searching for better-quality chicken for its chicken tenders.[10] No detail is too small to matter to Stewart. Soon after being named IHOP's CEO, she crusaded to improve its orange juice, then made from a watery concentrate. Franchisees initially fought the change, but its OJ is now fresh with no water added and OJ sales are up. Stewart says she's up to the task of fixing Applebee's, in part because she knows it so well. She plans to eventually place flat-screen TVs in all the bars to make them friendlier gathering places. She hopes to introduce specials at the bars and serve the "coldest beer in town."[10]
Comparable-store sales at Ihop restaurants increased 3.7 percent, and grew 0.5 percent at Applebee's.[4] Same-store sales percentage change does not include data on IHOP restaurants located in Florida.[3] The company expects IHOP same-store sales to grow 2 percent to 4 percent in fiscal 2008.[9] Applebee's same-store sales may expand by up to 2 percent, the company said.[4]
We also made progress on our plan to improve Applebee's company restaurant operating margins as the result of better management of labor and controllable expenses during the quarter. In March, we launched Applebee's new advertising campaign -- It's a Whole New Neighborhood -- and finalized our brand positioning and menu strategy approach. [3] An asset purchase agreement for Applebee's Restaurant Support Center in Lenexa, Kansas, has been negotiated and is expected to result in a closing on or before June 1, 2008, with after-tax cash proceeds of approximately $40 million.[3] IHOP said it has crafted an asset purchase agreement for Applebee's Restaurant Support Center in Lenexa, Kansas.[1]
The number of IHOP and Applebee's restaurants system-wide now total 1,353 and 1,986, respectively.[1]
The point: Get folks to think of Applebee's as a 2008 Cheers with good food. "Applebee's lost its way. It lost its great menu. It lost its mojo," says Wiley Bell, partner at Parthenon Group, which has consulted with Stewart. "She'll disentangle that." He points out that Stewart turned struggling IHOP into the No. 1 chain in the family dining sector restaurants that typically don't sell alcohol and are far less trendy than casual dining.[10] Getting a return on the Applebee's investment won't be easy, warns John Hamburger, who publishes influential industry newsletter Restaurant Finance Monitor. "Like anyone who bought a restaurant chain in 2006 or 2007, they overpaid," says Hamburger. "She's got her work cut out for her." Not helpful is that casual dining is feeling the brunt of the industry slowdown, and Applebee's, as the largest such chain, "could be the most exposed," says Bryan Elliott, analyst at Raymond James. Even with the added pressure from the Applebee's purchase, Stewart says her two preteen children from her first marriage remain her focus. It's not easy.[10]
The effective tax rate of 9.9% in the first quarter 2008 reflects the benefit of compensation related tax credits associated with Applebee's company-owned restaurant operations.[3] Old National Bancorp (NYSE: ONB ) reports Q1 EPS of $0.29 vs. consensus of $0.14. Old National executed various strategic initiatives during the first quarter of 2007 to improve its operating platform. These initiatives, which included balance sheet restructuring, workforce reductions, and cost associated with eight branch closures resulted in pre-tax charges of $7.7 million, or approximately $.08 on an after-tax per share basis, during that quarter.[11]
Consolidated capital expenditures are expected to range between $30 and $34 million versus the Company's previous expectations of approximately $25 million for fiscal 2008. The Company's cash performance is expected to be augmented by approximately $17 million from the structural run-off of the IHOP business unit's long-term notes receivable in fiscal 2008.[3] Ihop forecast consolidated cash from operations of $105 million to $110 million for 2008, up from a previous projection of $100 million because it reclassified some spending.[4]
Ihop fell $4.60, or 8.9 percent, to $47 in early New York Stock Exchange composite trading. The shares added 41 percent this year before today. [4] "IHOP employees shouldn't be disappointed in that." Stewart says she continues to look at growth possibilities for IHOP. Among things she's considering: IHOP-licensed products sold at grocery stores, airport IHOPs and even a mini-IHOP concept with just coffee and to-go items. Any of those could bring new revenue, but they won't cover the huge cost of Applebee's. Stewart expects to raise substantial money to pay down the deal's debt by selling most of the 510 company-owned Applebee's, keeping a few in its headquarters city of Overland Park, Kan., for research and development.[10] Julia A. Stewart, IHOP Corp.' s chairman and chief executive officer, said, "We are pleased to report a solid first quarter of financial results for our newly combined company.[3] During the first quarter of 2008, J. Alexander's Corporation said average guest counts decreased 4.2% on a same store basis. The Company reported a 1.9% increase in its average guest check, including alcoholic beverage sales, over the first quarter of 2007. This increase was generally in line with menu price increases.[11] The Company's quarterly performance benefited from a lower effective tax rate of 9.9% compared to 36.9% in the first quarter last year.[3]
Revenuues were $37.49 million compared to $36.53 million for the same period last year.[11] J. Alexander's Corporation (AMEX: JAX ) reports Q1 EPS of $0.23 compared to $0.29 for the same period last year.[11]
General and administrative expenses for the quarter almost tripled to $47.57 million from $16.12 million in the year-ago period. [1] The General and administrative expenses or G&A; of the recent first quarter also included Applebee's G&A; expenses.[1]
Last November, IHOP completed the $2.1 billion acquisition of Applebee's International.[1] IHOP bought Lenexa, Kan. -based Applebee's International Inc. for $1.9 billion in November.[7]
For Stewart, fixing Applebee's has become a near-full-time obsession. She is so hands-on that nine months since announcing the purchase, she's still running Applebee's on a day-to-day basis and has yet to hire a president for the chain. While Stewart says she can fix Applebee's in much the same way she turned around IHOP, the chains will retain very different personalities. "We won't become 'Applehop,' " she says.[10] Julia Stewart is CEO of IHOP, which recently bought the struggling Applebee's casual dining chain.[10]
Since IHOP bought Applebee's, Stewart has been on the road at least half the time. "My children have always known me to travel and be in a leadership role," she says. "They've learned how to make it work, and so have I."[10]
Information is presented for all effective restaurants in the IHOP system, which includes restaurants owned by the Company as well as those owned by franchisees and area licensees. [3] With more than 3,300 restaurants combined, IHOP Corp. is the largest full-service restaurant company in the world.[3]
Ihop Corp., the biggest U.S. pancake-restaurant chain, reported first-quarter profit rose 22 percent as sales advanced.[4]
Sales of alcoholic beverages are far more profitable than food sales. She also wants the food to be more fun. Applebee's soon will introduce a new category of finger foods, but she won't discuss it yet.[10] In June, it will roll out Ultimate Trio appetizers, letting folks mix and match any three of nine appetizers for $9.99 to $11.99. Applebee's new menu will include four new chicken sandwiches and bring back the California Shrimp Salad, a signature salad that was removed from its menu despite a hard-core following.[10]
Pro forma information on Applebee's restaurant data restaurant development and franchising activity is presented in the section entitled "Pro forma comparison -- Applebee's" herein.[3] Upping the degree of difficulty with Applebee's is that the restaurant industry, and casual dining chains in particular, are in a funk.[10]
On average, 4 analysts polled by Thomson FirstCall expected the company to lose $0.03 per share. [1] Lant reiterated the revised projection that CH Energy Group's 2008 consolidated annual earnings will total between $2.30 - $2.50 per share.[11]
The transaction is expected to close on or before June 1, 2008, with after-tax cash proceeds of approximately $40 million. [1] The Company defines "free cash flow" for a given period as cash provided by operating activities, plus receipts from notes and equipment contracts receivable ("long-term notes receivable"), less capital expenditures.[3] Management utilizes free cash flow to determine the amount of cash remaining for general corporate and strategic purposes after the receipts from long-term notes receivable, and the funding of operating activities and capital expenditures. Management believes this information is helpful to investors to determine the Company's cash available for these purposes.[3]
SOURCES
1. IHOP Q1 Profit Falls On Acquisition Costs; Backs FY'08 Same Store Sales Growth Outlook [IHP] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
2. UPDATE 2-IHOP 1st-quarter profit falls 24 percent | Markets | Markets News | Reuters
3. IHOP Corp. Reports Solid First Quarter 2008 Financial Results
4. Pancakes prove popular as Ihop's sales jump | APP.com | Asbury Park Press
5. Free Preview - WSJ.com
6. Ihop lifts 2008 cash target on solid 1Q after Applebee's acquisition - Forbes.com
7. Acquisition costs hurt IHOP's 1Q results
8. IHOP posts lower 1st-quarter profit | Industries | Consumer Goods & Retail | Reuters
9. Applebee's purchase makes IHOP revenue soar - Kansas City Business Journal:
10. Executive Suite: Comeback is on the menu at Applebee's - USATODAY.com
11. StreetInsider.com
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