Highlights
- Third Quarter Earnings Per Share of $0.48 vs. $0.42 in 1999, or a 14% Increase (excluding advertising litigation expense)
- Systemwide Comparable Sales Increase of 0.6% (representing 30 consecutive quarters of comparable sales increases)
- 81 Restaurant Openings (13 company-owned and 68 franchised)
Papa John’s International, Inc. (Nasdaq: PZZA) announced record revenues of $224.8 million for the third quarter of 2000, representing an increase of 11% over revenues of $202.1 million for the same period in 1999. In line with the company’s previously issued guidance, diluted earnings per share increased to $0.48 for the third quarter from $0.42 (excluding advertising litigation expense) for the comparable period in 1999, a 14% increase. As expected, net income of $11.5 million for the quarter declined compared to $12.4 million for the comparable period in 1999, as a result of higher net interest expense related to the company’s stock repurchase program. The company reported EBITDA of $28.9 million for the third quarter compared to $26.5 million (excluding advertising litigation expense) for the same period in 1999.
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Record revenues of $683.4 million were achieved for the nine month period ended September 24, 2000, a 15.9% increase over revenues of $589.8 million for the same period in 1999. Net income for the nine months was $36.0 million compared to $36.1 million in 1999, and diluted earnings per share (excluding advertising litigation expense) was $1.43 compared to $1.19 in 1999, a 20% increase. EBITDA (excluding advertising litigation expense) increased to $88.0 million for the nine months ended September 24, 2000, compared to $74.4 million for the same period in 1999, an 18% increase.
As previously announced, comparable store sales for the third quarter increased 0.6% (2.2% at company-owned restaurants and flat results at franchised restaurants), representing comparable store sales increases for 30 consecutive quarters since the company’s initial public stock offering in 1993.
A total of 81 restaurants–13 company-owned and 66 franchised Papa John’s restaurants and 2 Perfect Pizza franchised restaurants–were opened during the quarter.
“We had a solid third quarter,” said Papa John’s Founder and CEO, John Schnatter. “Our system performed well rolling over better than 6% positive comps during the third quarter of 1999. We were also pleased with the quality and consumer trial of our improved Thin Crust pizza, which we re-launched at the end of September.”
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By GlobalDataThrough the end of the third quarter, Papa John’s had returned $187 million to its stockholders through the repurchase of 7.6 million shares of its common stock since the inception of the company’s stock repurchase program in the fourth quarter of 1999. The company’s Board of Directors has authorized the repurchase of up to $225 million of Papa John’s common stock.
Papa John’s received the highest ratings among all national fast food restaurants in The 1999 American Customer Satisfaction Index, and for four years running Papa John’s has been ranked number one in quality and overall customer satisfaction among national pizza chains in the prestigious Restaurants & Institutions’ Choice in Chains survey.
At September 24, 2000, there were 2,509 Papa John’s restaurants (622 company-owned and 1,887 franchised) operating in 48 states and nine international markets. Papa John’s also owns or franchises 203 Perfect Pizza restaurants (7 company-owned and 196 franchised) in the United Kingdom. For more information about the company, visit Papa John’s at www.papajohns.com.
Summary Financial Data
Papa John's International, Inc.
Three Months Ended Nine Months Ended
(In thousands, except ------------------ -----------------
per share amounts) Sept. 24, Sept. 26, Sept. 24, Sept. 26,
2000 1999 2000 1999
---- ---- ---- ----
Revenues $224,803 $202,080 $683,387 $589,815
======== ======== ======= ========
Income before advertising
litigation expense $11,461 $13,192 $36,604 $36,909
Advertising litigation
expense, net of tax -- 826 626 826
Net income $11,461 $12,366 $35,978 $36,083
======= ======= ======= =======
Diluted earnings per
share before advertising
litigation expense $0.48 $0.42 $1.43 $1.19
Advertising litigation
expense, net of tax -- 0.02 0.02 0.03
Diluted earnings per share $0.48 $0.40 $1.41 $1.16
======= ======= ====== ======
Diluted weighted average
shares 24,005 31,228 25,550 31,131
======= ======= ====== ======
EBITDA (excluding advertising
litigation expense) $28,909 $26,529 $87,978 $74,355
======= ======= ======= =======
Restaurant Progression
Papa John's International, Inc.
Franchise
Corporate Domestic International Total
--------------------------------------------
Papa John's Restaurants
Beginning of period 606 1,784 46 2,436
Opened 13 56 10 79
Converted 5 -- -- 5
Closed (1) (10) -- (11)
Acquired (sold) (1) 1 -- --
------- ------- -------- -------
End of period 622 1,831 56 2,509
======= ======= ======== =======
Perfect Pizza Restaurants
Beginning of period 12 -- 196 208
Opened -- -- 2 2
Converted (5) -- -- (5)
Closed -- -- (2) (2)
Acquired (sold) -- -- -- --
------- ------- -------- -------
End of period 7 -- 196 203
======= ======= ======== =======
Papa John's International, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Three Months Ended Nine Months Ended
(unaudited) (Unaudited)
-------------------------------------------------
-------------------------------------------------
Sept. 24, Sept. 26, Sept. 24, Sept. 26,
2000 1999 2000 1999
-------------------------------------------------
(In thousands, except per
share amounts) Revenues:
Restaurant sales $109,607 $96,538 $333,613 $289,216
Franchise royalties 12,485 10,261 37,283 29,783
Franchise and
development fees 1,423 1,775 4,464 5,020
Commissary sales 88,306 81,002 270,193 227,090
Equipment and other sales 12,982 12,504 37,834 38,706
-------------------------------------------
Total revenues 224,803 202,080 683,387 589,815
Costs and expenses:
Restaurant expenses:
Cost of sales 26,668 26,449 82,268 74,031
Salaries and benefits 30,905 25,746 92,629 78,150
Advertising and related
costs 9,081 7,972 30,913 25,245
Occupancy costs 6,094 5,127 17,107 14,377
Other operating expenses 15,988 12,994 46,531 38,865
------------------------------------------ ---------
88,736 78,288 269,448 230,668
Commissary, equipment and
other expenses:
Cost of sales 75,503 72,066 229,705 202,839
Salaries and benefits 7,029 6,135 20,721 17,691
Other operating expenses 7,901 6,659 23,458 20,839
------------------------------------------
90,433 84,860 273,884 241,369
General and administrative
expenses 17,202 12,446 51,614 40,871
Advertising litigation
expense -- 1,322 1,017 1,322
Pre-opening and other
general expenses
(income) (477) (43) 463 2,552
Depreciation and
amortization 8,727 6,252 25,389 17,529
Total costs and ------------------------------------------
expenses 204,621 183,125 621,815 534,311
------------------------------------------
Operating income 20,182 18,955 61,572 55,504
Other income (expense):
Investment income 685 831 1,569 2,459
Interest expense (2,380) -- (4,854) (151
-----------------------------------------
Income before income
taxes 18,487 19,786 58,287 57,812
Income tax expense 7,026 7,420 22,309 21,729
-----------------------------------------
Net income $11,461 $12,366 $35,978 $36,083
=========================================
Basic earnings per
share $0.48 $0.41 $1.42 $1.20
=========================================
Diluted earnings per
share $0.48 $0.40 $1.41 $1.16
=========================================
Basic weighted-average
shares outstanding 23,866 30,335 25,331 30,156
=========================================
Diluted weighted-average
shares outstanding 24,005 31,228 25,550 31,131
=========================================
Note: Certain 1999 amounts have been reclassified to conform to
the 2000 presentation.
Papa John's International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
September 24, December 26,
2000 1999
(Unaudited) (Note)
--------------- ---------------
(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 21,698 $ 3,698
Accounts receivable 20,067 21,415
Inventories 11,257 10,637
Prepaid expenses and other
current assets 6,298 7,378
Deferred income taxes 3,427 2,977
--------------- ---------------
Total current assets 62,747 46,105
Investments 5,398 22,086
Net property and equipment 248,722 227,813
Notes receivable from franchisees 15,232 11,743
Intangibles 52,369 47,669
Other assets 16,402 16,635
--------------- ---------------
Total assets $ 400,870 $ 372,051
=============== ===============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 21,401 $ 24,947
Accrued expenses 37,565 38,516
Current portion of debt 1,229 5,308
--------------- ---------------
Total current liabilities 60,195 68,771
Unearned franchise and development fees 6,912 6,222
Long-term debt, net of current portion 153,210 925
Deferred income taxes 3,890 2,109
Other long-term liabilities 2,520 1,891
Common equity put options 5,616 -
--------------- ---------------
Total stockholders' equity 168,527 292,133
--------------- ---------------
Total liabilities and stockholders'
equity $ 400,870 $ 372,051
=============== ===============
Note: The balance sheet at December 26, 1999 has been derived from
the audited consolidated financial statements at that date but does
not include all information and footnotes required by generally
accepted accounting principles for a complete set of financial
statements.
