NPC International, Inc. (Nasdaq:NPCI):
First Quarter Highlights:
- Comparable store sales growth of 3.5%:
- Restaurants +4.1%; Delivery +1.2%
- Re-imaged restaurants accounted for 2.5% of the comparable store sales growth
- Cheese costs exceed prior year by 29% negatively impacting earnings
- 1Q EPS of $.24 per diluted share, before facility action charges and pending transaction related expenses, compared to prior year’s $.29 per diluted share, before facility actions
Go deeper with GlobalData
Merger Update:
- Special Meeting of Stockholders to consider approval of the plan of merger with Mergeco, Inc. set for August 31, 2001; Record date for voting at the Special Meeting is July 10, 2001
- No conference call will be held this quarter due to the proposed merger with Mergeco, an entity controlled by O. Gene Bicknell, Chairman and CEO, whereby the stockholders of Mergeco will acquire the minority interest of the Company in a recapitalization.
NPC International, Inc. (Nasdaq:NPCI), yesterday announced results for its first fiscal quarter ended June 26, 2001. Net income for the quarter, before facility action charges and expenses associated with the proposed merger transaction, were $5,206,000, or $.24 per diluted share, compared to earnings, before facility action charges of $6,442,000, or $.29 per diluted share, reported in the same period of the prior year. Including pre-tax charges from facility actions of $55,000 and merger-related transaction expenses of $427,000, the Company earned net income of $4,892,000, or $.22 per diluted share, for the quarter compared to $5,831,000, or $.26 per diluted share, last year after facility action charges of $940,000.
Consolidated revenue for the first quarter increased by 9.5% over the same quarter a year ago to $132,371,000 due to revenue contributed from acquired units and comparable store sales growth across all asset types. The full-time equivalent number of units operated by the Company increased over the same period of the prior year due to the 64-unit acquisition completed on June 8, 2000.
First-quarter results:
- Comparable store sales increased 3.5% while lapping comparable store sales growth of 1.8% last year. The Company’s growth was driven by introduction of the Twisted Crust Pizza, which was featured exclusively during the quarter, and the continued success of the Company’s asset re-imaging program which has consistently driven post re-imaging unit sales gains of 30% or greater. Sixty-two restaurants re-imaged in the last 18 months accounted for 2.5% of the Company’s comparable store sales growth for the quarter. The favorable impact of this program is primarily reflected in the Company’s dine-in restaurants, which had revenue of $103.2 million and increased comparable store sales by 4.1% while lapping healthy growth of 2.1% last year. Our delivery business generated revenue of $29.2 million and recorded comparable store sales growth of 1.2% while rolling over growth of .8% last year.
- Store level margins were 15.7%, a decline of 240 basis points from the prior year due primarily to higher commodity costs. Cost of sales increased 200 basis points from the prior year due to a 29% increase in cheese costs, higher product costs associated with the Twisted Crust Pizza, and an increase in meat ingredient costs. Labor costs increased by 10 basis points due to labor investments made in the roll-out of a delivery service initiative and higher wage rates that were largely offset by productivity gains. Other operating expenses increased 30 basis points due to an increase in advertising expense, occupancy costs (depreciation) increases in re-imaged assets and increased utilities expense, primarily gas.
- General and administrative expenses increased 20 basis points to 5.3% of sales from 5.1% during the comparable quarter last year. The increase in these costs was due to $427,000 ($.01 per diluted share) in expenses incurred in evaluating and negotiating the proposed plan of merger with Mergeco. Excluding these expenses, general and administrative expenses were slightly below last year as a percent of revenue at 5.0%.
- Depreciation, amortization and pre-opening costs were essentially flat with last year at 2.4% of revenue.
- Facility actions at 1 location resulted in a pre-tax charge of $55,000 associated with the Company’s asset re-imaging program. During the same quarter last year, facility actions at 17 locations resulted in a pre-tax charge of $940,000, or $.03 per diluted share.
- The Company continued to execute its asset re-imaging plan during the quarter opening six dine-in units, and one delivery unit.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataJim Schwartz, President and COO, stated: “We are pleased to report comparable store sales growth of 3.5% during the quarter on the strength of our new Twisted Crust Pizza promotion and re-imaged asset sales gains. However, we recognize the need for more robust delivery sales growth in this competitive category. Accordingly, during the quarter we made significant operational and capital investments in a new delivery service initiative that, while negatively impacting earnings during this quarter, should position us to dominate the pizza delivery category in our markets.”
Merger Information:
The NPC board of directors has set August 31, 2001, as the date for the special meeting of the NPC stockholders to consider and vote upon the approval and adoption of the Agreement and Plan of Merger, dated as of May 10, 2001, between NPC and Mergeco, Inc., a company controlled by Mr. O. Gene Bicknell. Holders of record of NPC common stock as of July 10, 2001, will be entitled to vote at the special meeting. If an affirmative vote is cast by the majority of the minority stockholders present in person or by proxy at the special meeting, the necessary financing is obtained to consummate the proposed merger and other conditions to the merger are satisfied, NPC’s minority stockholders will receive $11.55 per share in cash. Stockholders are advised to read the proxy statement relating to the special meeting when it is received by them because it contains important information regarding the merger agreement and the proposed merger. Stockholders may obtain copies of proxy statement free of charge at the Securities and Exchange Commission’s web-site (http://www.sec.gov) or by submitting a written request directed to the Corporate Secretary, NPC International, Inc., 14400 College Blvd., Suite 201, Lenexa, Kansas 66215.
With the exception of historical information, certain of the matters discussed in this news release are forward-looking statements that involve estimates, risks and uncertainties including, but not limited to, consummation of the merger, economic conditions, consumer demand, the level of and the effectiveness of marketing campaigns by the Company and Pizza Hut, Inc., competitive conditions, food cost, availability of food ingredient supply and distribution of product, labor costs, new product introductions, product mix and pricing and other risks indicated in the Company’s most recent 10-K and other filings with the Securities and Exchange Commission.
NPC International, Inc. is the world’s largest Pizza Hut franchisee and currently operates 835 Pizza Hut restaurants and delivery kitchens in 27 states.
Financial Results
(Unaudited, Dollars in thousands except per-share data)
Thirteen Weeks Ended
——————–
June 26, 2001 June 27, 2000
————- ————-
Net Revenue $ 132,371 $ 120,886
Operating Income
before facility actions $ 10,546 $ 12,808
Facility action charges 55 940
———– ———-
Operating Income $ 10,491 $ 11,868
Income before facility action charges,
and transaction expenses, net of tax $ 5,206 $ 6,442
Earnings per share — basic $ .24 $ .29
Earnings per share — diluted $ .24 $ .29
Net Income $ 4,892 $ 5,831
Earnings per share — basic $ .22 $ .26
Earnings per share — diluted $ .22 $ .26
Weighted average
shares outstanding — basic 21,849,449 22,357,606
Weighted average
shares outstanding — diluted 22,072,504 22,501,412
For more information contact Troy D. Cook, Senior Vice President, Finance and Chief Financial Officer, NPC International, Inc., 14400 College Boulevard, Suite 201, Lenexa, Kansas 66215. Telephone Number: 913/327-3109.
To view related research reports, please follow the links below:- |
