[X]
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
[ ]
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
61-1203323
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification number)
|
incorporation or organization)
|
|
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 by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
|
Yes [X] | No [ ] |
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer [X]
|
Accelerated filer [ ] |
Non-accelerated filer [ ]
|
Smaller reporting company [ ]
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
Yes [ ] | No [X] |
|
At October 26, 2011, there were outstanding 24,375,854 shares of the registrant’s common stock, par value $0.01 per share.
|
Page No.
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
14
|
||
28
|
||
29
|
||
30
|
||
30
|
||
31
|
PART I. FINANCIAL INFORMATION
|
||||||||
Item 1. Financial Statements
|
||||||||
Papa John’s International, Inc. and Subsidiaries
|
||||||||
Condensed Consolidated Balance Sheets
|
||||||||
(In thousands)
|
September 25, 2011
|
December 26, 2010
|
||||||
(Unaudited)
|
(Note)
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 23,695 | $ | 46,225 | ||||
Accounts receivable, net
|
27,492 | 25,357 | ||||||
Inventories
|
17,201 | 17,402 | ||||||
Prepaid expenses
|
6,503 | 10,009 | ||||||
Other current assets
|
3,839 | 3,732 | ||||||
Deferred income taxes
|
10,343 | 9,647 | ||||||
Total current assets
|
89,073 | 112,372 | ||||||
Investments
|
1,681 | 1,604 | ||||||
Net property and equipment
|
183,184 | 186,594 | ||||||
Notes receivable, net
|
15,516 | 17,354 | ||||||
Goodwill
|
74,871 | 74,697 | ||||||
Other assets
|
21,930 | 23,320 | ||||||
Total assets
|
$ | 386,255 | $ | 415,941 | ||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 35,465 | $ | 31,569 | ||||
Income and other taxes payable
|
9,218 | 6,140 | ||||||
Accrued expenses
|
53,864 | 52,978 | ||||||
Total current liabilities
|
98,547 | 90,687 | ||||||
Unearned franchise and development fees
|
6,502 | 6,596 | ||||||
Long-term debt
|
50,000 | 99,017 | ||||||
Other long-term liabilities
|
11,542 | 12,100 | ||||||
Deferred income taxes
|
7,110 | 341 | ||||||
Stockholders’ equity:
|
||||||||
Preferred stock
|
- | - | ||||||
Common stock
|
366 | 361 | ||||||
Additional paid-in capital
|
257,854 | 245,380 | ||||||
Accumulated other comprehensive income
|
1,355 | 849 | ||||||
Retained earnings
|
282,826 | 243,152 | ||||||
Treasury stock
|
(338,092 | ) | (291,048 | ) | ||||
Total stockholders' equity, net of noncontrolling interests
|
204,309 | 198,694 | ||||||
Noncontrolling interests in subsidiaries
|
8,245 | 8,506 | ||||||
Total stockholders’ equity
|
212,554 | 207,200 | ||||||
Total liabilities and stockholders’ equity
|
$ | 386,255 | $ | 415,941 | ||||
Note: The balance sheet at December 26, 2010 has been derived from the audited consolidated financial statements at that date, but does not include all information and footnotes required by accounting principles generally accepted in the United States for a complete set of financial statements.
|
||||||||
|
||||||||
|
||||||||
See accompanying notes.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
(In thousands, except per share amounts)
|
Sept. 25, 2011
|
Sept. 26, 2010
|
Sept. 25, 2011
|
Sept. 26, 2010
|
||||||||||||
North America revenues:
|
||||||||||||||||
Domestic Company-owned restaurant sales
|
$ | 128,787 | $ | 120,414 | $ | 395,099 | $ | 374,652 | ||||||||
Franchise royalties
|
17,967 | 16,653 | 55,801 | 52,138 | ||||||||||||
Franchise and development fees
|
155 | 149 | 464 | 460 | ||||||||||||
Domestic commissary sales
|
130,870 | 111,884 | 379,569 | 338,460 | ||||||||||||
Other sales
|
12,368 | 12,138 | 38,185 | 39,674 | ||||||||||||
International revenues:
|
||||||||||||||||
Royalties and franchise and development fees
|
4,054 | 3,316 | 11,865 | 9,635 | ||||||||||||
Restaurant and commissary sales
|
11,467 | 8,572 | 30,686 | 24,540 | ||||||||||||
Total revenues
|
305,668 | 273,126 | 911,669 | 839,559 | ||||||||||||
Costs and expenses:
|
||||||||||||||||
Domestic Company-owned restaurant expenses:
|
||||||||||||||||
Cost of sales
|
32,229 | 27,245 | 94,491 | 81,551 | ||||||||||||
Salaries and benefits
|
35,012 | 33,320 | 107,028 | 102,915 | ||||||||||||
Advertising and related costs
|
11,790 | 11,264 | 36,477 | 33,817 | ||||||||||||
Occupancy costs
|
8,496 | 8,494 | 24,304 | 24,264 | ||||||||||||
Other operating expenses
|
18,858 | 18,184 | 57,265 | 54,218 | ||||||||||||
Total domestic Company-owned restaurant expenses
|
106,385 | 98,507 | 319,565 | 296,765 | ||||||||||||
Domestic commissary and other expenses:
|
||||||||||||||||
Cost of sales
|
110,387 | 94,422 | 320,359 | 284,909 | ||||||||||||
Salaries and benefits
|
8,840 | 8,533 | 26,502 | 25,833 | ||||||||||||
Other operating expenses
|
13,381 | 12,002 | 40,050 | 35,543 | ||||||||||||
Total domestic commissary and other expenses
|
132,608 | 114,957 | 386,911 | 346,285 | ||||||||||||
Loss (income) from the franchise cheese-purchasing
|
||||||||||||||||
program, net of noncontrolling interest
|
- | 409 | - | (4,573 | ) | |||||||||||
International operating expenses
|
9,634 | 7,627 | 26,118 | 21,833 | ||||||||||||
General and administrative expenses
|
27,332 | 27,133 | 84,023 | 83,983 | ||||||||||||
Other general expenses
|
4,777 | 2,643 | 7,017 | 6,620 | ||||||||||||
Depreciation and amortization
|
7,974 | 8,067 | 24,711 | 24,122 | ||||||||||||
Total costs and expenses
|
288,710 | 259,343 | 848,345 | 775,035 | ||||||||||||
Operating income
|
16,958 | 13,783 | 63,324 | 64,524 | ||||||||||||
Investment income
|
170 | 173 | 552 | 601 | ||||||||||||
Interest expense
|
(282 | ) | (1,416 | ) | (1,183 | ) | (3,993 | ) | ||||||||
Income before income taxes
|
16,846 | 12,540 | 62,693 | 61,132 | ||||||||||||
Income tax expense
|
4,906 | 4,020 | 20,151 | 20,545 | ||||||||||||
Net income, including noncontrolling interests
|
11,940 | 8,520 | 42,542 | 40,587 | ||||||||||||
Less: income attributable to noncontrolling interests
|
(817 | ) | (672 | ) | (2,868 | ) | (2,672 | ) | ||||||||
Net income, net of noncontrolling interests
|
$ | 11,123 | $ | 7,848 | $ | 39,674 | $ | 37,915 | ||||||||
Basic earnings per common share
|
$ | 0.45 | $ | 0.30 | $ | 1.57 | $ | 1.43 | ||||||||
Earnings per common share - assuming dilution
|
$ | 0.44 | $ | 0.30 | $ | 1.55 | $ | 1.42 | ||||||||
Basic weighted average shares outstanding
|
24,964 | 25,951 | 25,302 | 26,586 | ||||||||||||
Diluted weighted average shares outstanding
|
25,146 | 26,081 | 25,528 | 26,743 | ||||||||||||
See accompanying notes.
|
Papa John's International, Inc.
|
||||||||||||||||||||||||||||||||
Common
|
Accumulated
|
|||||||||||||||||||||||||||||||
Stock
|
Additional
|
Other
|
Noncontrolling
|
Total
|
||||||||||||||||||||||||||||
Shares
|
Common
|
Paid-In
|
Comprehensive
|
Retained
|
Treasury
|
Interests in
|
Stockholders'
|
|||||||||||||||||||||||||
(In thousands)
|
Outstanding
|
Stock
|
Capital
|
Income (Loss)
|
Earnings
|
Stock
|
Subsidiaries
|
Equity
|
||||||||||||||||||||||||
Balance at December 27, 2009
|
26,930 | $ | 358 | $ | 231,720 | $ | (1,084 | ) | $ | 191,212 | $ | (245,337 | ) | $ | 8,168 | $ | 185,037 | |||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||
Net income
|
- | - | - | - | 37,915 | - | 2,672 | 40,587 | ||||||||||||||||||||||||
Change in valuation of interest rate
|
||||||||||||||||||||||||||||||||
swap agreements, net of tax of $973
|
- | - | - | 1,730 | - | - | - | 1,730 | ||||||||||||||||||||||||
Foreign currency translation
|
- | - | - | 34 | - | - | - | 34 | ||||||||||||||||||||||||
Comprehensive income
|
42,351 | |||||||||||||||||||||||||||||||
Exercise of stock options
|
283 | 2 | 5,017 | - | - | 285 | - | 5,304 | ||||||||||||||||||||||||
Tax effect of equity awards
|
- | - | (63 | ) | - | - | - | - | (63 | ) | ||||||||||||||||||||||
Acquisition of Company common stock
|
(1,738 | ) | - | - | - | - | (43,215 | ) | - | (43,215 | ) | |||||||||||||||||||||
Net contributions (distributions) -
|
||||||||||||||||||||||||||||||||
noncontrolling interests
|
- | - | - | - | - | - | (2,907 | ) | (2,907 | ) | ||||||||||||||||||||||
Stock-based compensation expense
|
- | - | 4,491 | - | - | - | - | 4,491 | ||||||||||||||||||||||||
Issuance of restricted stock
|
34 | - | (880 | ) | - | - | 880 | - | - | |||||||||||||||||||||||
Other
|
- | - | 2,206 | - | - | 58 | - | 2,264 | ||||||||||||||||||||||||
Balance at September 26, 2010
|
25,509 | $ | 360 | $ | 242,491 | $ | 680 | $ | 229,127 | $ | (287,329 | ) | $ | 7,933 | $ | 193,262 | ||||||||||||||||
Balance at December 26, 2010
|
25,439 | $ | 361 | $ | 245,380 | $ | 849 | $ | 243,152 | $ | (291,048 | ) | $ | 8,506 | $ | 207,200 | ||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||
Net income
|
- | - | - | - | 39,674 | - | 2,868 | 42,542 | ||||||||||||||||||||||||
Change in valuation of interest rate
|
||||||||||||||||||||||||||||||||
swap agreements, net of tax of $35
|
- | - | - | 66 | - | - | - | 66 | ||||||||||||||||||||||||
Foreign currency translation
|
- | - | - | 440 | - | - | - | 440 | ||||||||||||||||||||||||
Comprehensive income
|
43,048 | |||||||||||||||||||||||||||||||
Exercise of stock options
|
459 | 5 | 10,976 | - | - | - | - | 10,981 | ||||||||||||||||||||||||
Tax effect of equity awards
|
- | - | (1,449 | ) | - | - | - | - | (1,449 | ) | ||||||||||||||||||||||
Acquisition of Company common stock
|
(1,615 | ) | - | - | - | - | (49,579 | ) | - | (49,579 | ) | |||||||||||||||||||||
Net contributions (distributions) -
|
||||||||||||||||||||||||||||||||
noncontrolling interests
|
- | - | - | - | - | - | (3,129 | ) | (3,129 | ) | ||||||||||||||||||||||
Stock-based compensation expense
|
- | - | 5,266 | - | - | - | - | 5,266 | ||||||||||||||||||||||||
Issuance of restricted stock
|
92 | - | (2,253 | ) | - | - | 2,253 | - | - | |||||||||||||||||||||||
Other
|
- | - | (66 | ) | - | - | 282 | - | 216 | |||||||||||||||||||||||
Balance at September 25, 2011
|
24,375 | $ | 366 | $ | 257,854 | $ | 1,355 | $ | 282,826 | $ | (338,092 | ) | $ | 8,245 | $ | 212,554 |
At September 26, 2010, accumulated other comprehensive income of $680 was comprised of unrealized foreign currency translation gains of $1,565, partially offset by a net unrealized loss on the interest rate swap agreements of $833 and a $52 pension plan liability for PJUK.
|
At September 25, 2011, accumulated other comprehensive income of $1,355 was comprised of unrealized foreign currency translation gains of $1,448, partially offset by a net unrealized loss on the interest rate swap agreement of $93.
|
See accompanying notes. |
Nine Months Ended
|
||||||||
(In thousands)
|
Sept. 25, 2011
|
Sept. 26, 2010
|
||||||
Operating activities
|
||||||||
Net income, net of noncontrolling interests
|
$ | 39,674 | $ | 37,915 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for uncollectible accounts and notes receivable
|
882 | 1,257 | ||||||
Depreciation and amortization
|
24,711 | 24,122 | ||||||
Deferred income taxes
|
5,219 | (850 | ) | |||||
Stock-based compensation expense
|
5,266 | 4,491 | ||||||
Excess tax benefit on equity awards
|
(576 | ) | (242 | ) | ||||
Other
|
1,272 | 303 | ||||||
Changes in operating assets and liabilities, net of acquisitions:
|
||||||||
Accounts receivable
|
(3,071 | ) | (4,094 | ) | ||||
Inventories
|
201 | (525 | ) | |||||
Prepaid expenses
|
3,506 | 1,309 | ||||||
Other current assets
|
(107 | ) | 381 | |||||
Other assets and liabilities
|
491 | (397 | ) | |||||
Accounts payable
|
3,896 | (2,119 | ) | |||||
Income and other taxes payable
|
3,078 | 5,499 | ||||||
Accrued expenses
|
- | (5,701 | ) | |||||
Unearned franchise and development fees
|
(94 | ) | 810 | |||||
Net cash provided by operating activities
|
84,348 | 62,159 | ||||||
Investing activities
|
||||||||
Purchase of property and equipment
|
(20,647 | ) | (23,608 | ) | ||||
Purchase of investments
|
(205 | ) | (548 | ) | ||||
Proceeds from sale or maturity of investments
|
128 | 301 | ||||||
Loans issued
|
(2,598 | ) | (1,736 | ) | ||||
Loan repayments
|
4,542 | 2,444 | ||||||
Proceeds from divestitures of restaurants
|
- | 1,423 | ||||||
Other
|
62 | 10 | ||||||
Net cash used in investing activities
|
(18,718 | ) | (21,714 | ) | ||||
Financing activities
|
||||||||
Net repayments on line of credit facility
|
(49,000 | ) | - | |||||
Excess tax benefit on equity awards
|
576 | 242 | ||||||
Tax payments for restricted stock
|
(1,041 | ) | - | |||||
Proceeds from exercise of stock options
|
10,981 | 5,304 | ||||||
Acquisition of Company common stock
|
(49,579 | ) | (43,215 | ) | ||||
Noncontrolling interests, net of contributions and distributions
|
(261 | ) | (235 | ) | ||||
Other
|
97 | 104 | ||||||
Net cash used in financing activities
|
(88,227 | ) | (37,800 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents
|
67 | 78 | ||||||
Change in cash and cash equivalents
|
(22,530 | ) | 2,723 | |||||
Cash and cash equivalents at beginning of period
|
46,225 | 25,457 | ||||||
Cash and cash equivalents at end of period
|
$ | 23,695 | $ | 28,180 | ||||
See accompanying notes.
|
1.
|
Basis of Presentation
|
2.
|
Significant Accounting Policies
|
Restaurants
|
Restaurants
|
Noncontrolling
|
|||||||||||||||
as of
|
as of
|
Restaurant
|
Papa John's
|
Interest
|
|||||||||||||
Sept. 25, 2011
|
Sept. 26, 2010
|
Locations
|
Ownership *
|
Ownership *
|
|||||||||||||
Star Papa, LP
|
75 | 75 |
Texas
|
51 | % | 49 | % | ||||||||||
Colonel's Limited, LLC
|
52 | 52 |
Maryland and Virginia
|
70 | % | 30 | % | ||||||||||
*The ownership percentages were the same for both the 2011 and 2010 periods presented in the accompanying consolidated financial statements.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
Sept. 25,
|
Sept. 26,
|
Sept. 25,
|
Sept. 26,
|
|||||||||||||
(In thousands)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Papa John's International, Inc.
|
$ | 1,377 | $ | 1,146 | $ | 4,693 | $ | 4,240 | ||||||||
Noncontrolling interests
|
817 | 672 | 2,868 | 2,672 | ||||||||||||
Total pre-tax income
|
$ | 2,194 | $ | 1,818 | $ | 7,561 | $ | 6,912 |
3.
|
Accounting for Variable Interest Entities
|
Sept. 25,
|
Dec. 26,
|
|||||||
2011
|
2010
|
|||||||
Revolving line of credit
|
$ | 50,000 | $ | 99,000 | ||||
Other
|
- | 17 | ||||||
Total long-term debt
|
$ | 50,000 | $ | 99,017 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
Sept. 25,
|
Sept. 26,
|
Sept. 25,
|
Sept. 26,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Basic earnings per common share:
|
||||||||||||||||
Net income
|
$ | 11,123 | $ | 7,848 | $ | 39,674 | $ | 37,915 | ||||||||
Weighted average shares outstanding
|
24,964 | 25,951 | 25,302 | 26,586 | ||||||||||||
Basic earnings per common share
|
$ | 0.45 | $ | 0.30 | $ | 1.57 | $ | 1.43 | ||||||||
Earnings per common share - assuming dilution:
|
||||||||||||||||
Net income
|
$ | 11,123 | $ | 7,848 | $ | 39,674 | $ | 37,915 | ||||||||
Weighted average shares outstanding
|
24,964 | 25,951 | 25,302 | 26,586 | ||||||||||||
Dilutive effect of outstanding compensation awards
|
182 | 130 | 226 | 157 | ||||||||||||
Diluted weighted average shares outstanding
|
25,146 | 26,081 | 25,528 | 26,743 | ||||||||||||
Earnings per common share - assuming dilution
|
$ | 0.44 | $ | 0.30 | $ | 1.55 | $ | 1.42 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
(In thousands)
|
Sept. 25, 2011
|
Sept. 26, 2010
|
Sept. 25, 2011
|
Sept. 26, 2010
|
||||||||||||
Net income, including noncontrolling interests
|
$ | 11,940 | $ | 8,520 | $ | 42,542 | $ | 40,587 | ||||||||
Change in valuation of interest rate swap
|
||||||||||||||||
agreements, net of tax
|
(93 | ) | 581 | 66 | 1,730 | |||||||||||
Foreign currency translation gain (loss)
|
(160 | ) | 1,471 | 440 | 34 | |||||||||||
Comprehensive income
|
$ | 11,687 | $ | 10,572 | $ | 43,048 | $ | 42,351 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
(In thousands)
|
Sept. 25, 2011
|
Sept. 26, 2010
|
Sept. 25, 2011
|
Sept. 26, 2010
|
||||||||||||
Revenues from external customers:
|
||||||||||||||||
Domestic Company-owned restaurants
|
$ | 128,787 | $ | 120,414 | $ | 395,099 | $ | 374,652 | ||||||||
Domestic commissaries
|
130,870 | 111,884 | 379,569 | 338,460 | ||||||||||||
North America franchising *
|
18,122 | 16,802 | 56,265 | 52,598 | ||||||||||||
International *
|
15,521 | 11,888 | 42,551 | 34,175 | ||||||||||||
All others
|
12,368 | 12,138 | 38,185 | 39,674 | ||||||||||||
Total revenues from external customers
|
$ | 305,668 | $ | 273,126 | $ | 911,669 | $ | 839,559 | ||||||||
Intersegment revenues:
|
||||||||||||||||
Domestic commissaries
|
$ | 38,702 | $ | 32,376 | $ | 112,674 | $ | 99,254 | ||||||||
North America franchising
|
542 | 494 | 1,625 | 1,509 | ||||||||||||
International
|
58 | 163 | 163 | 852 | ||||||||||||
Variable interest entities
|
- | 37,052 | 25,117 | 113,556 | ||||||||||||
All others
|
2,793 | 2,854 | 7,919 | 8,713 | ||||||||||||
Total intersegment revenues
|
$ | 42,095 | $ | 72,939 | $ | 147,498 | $ | 223,884 | ||||||||
Income (loss) before income taxes:
|
||||||||||||||||
Domestic Company-owned restaurants
|
$ | 4,273 | $ | 5,503 | $ | 22,577 | $ | 25,604 | ||||||||
Domestic commissaries
|
7,237 | 5,393 | 21,112 | 20,577 | ||||||||||||
North America franchising *
|
15,941 | 14,663 | 50,190 | 46,713 | ||||||||||||
International *
|
249 | (1,309 | ) | (817 | ) | (4,162 | ) | |||||||||
Variable interest entities
|
- | (658 | ) | - | 5,505 | |||||||||||
All others
|
(66 | ) | 60 | (742 | ) | 1,187 | ||||||||||
Unallocated corporate expenses
|
(11,085 | ) | (11,004 | ) | (29,371 | ) | (33,963 | ) | ||||||||
Elimination of intersegment profits
|
297 | (108 | ) | (256 | ) | (329 | ) | |||||||||
Total income before income taxes
|
$ | 16,846 | $ | 12,540 | $ | 62,693 | $ | 61,132 | ||||||||
Income attributable to noncontrolling interests
|
(817 | ) | (672 | ) | (2,868 | ) | (2,672 | ) | ||||||||
Total income before income taxes, net
|
||||||||||||||||
of noncontrolling interests
|
$ | 16,029 | $ | 11,868 | $ | 59,825 | $ | 58,460 | ||||||||
Property and equipment:
|
||||||||||||||||
Domestic Company-owned restaurants
|
$ | 173,814 | ||||||||||||||
Domestic commissaries
|
85,264 | |||||||||||||||
International
|
18,279 | |||||||||||||||
All others
|
36,157 | |||||||||||||||
Unallocated corporate assets
|
130,287 | |||||||||||||||
Accumulated depreciation and amortization
|
(260,617 | ) | ||||||||||||||
Net property and equipment
|
$ | 183,184 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
Sept. 25, 2011
|
Sept. 26, 2010
|
Sept. 25, 2011
|
Sept. 26, 2010
|
|||||||||||||
BIBP sales
|
$ | - | $ | 37,052 | $ | 25,117 | $ | 113,556 | ||||||||
Cost of sales
|
- | 37,580 | 25,100 | 107,629 | ||||||||||||
General and administrative expenses
|
- | 25 | 17 | 66 | ||||||||||||
Total costs and expenses
|
- | 37,605 | 25,117 | 107,695 | ||||||||||||
Operating (loss) income
|
- | (553 | ) | - | 5,861 | |||||||||||
Interest expense
|
- | (105 | ) | - | (356 | ) | ||||||||||
(Loss) income before income taxes
|
$ | - | $ | (658 | ) | $ | - | $ | 5,505 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
Sept. 25, 2011
|
Sept. 26, 2010
|
Sept. 25, 2011
|
Sept. 26, 2010
|
|||||||||||||
North America Company-owned:
|
||||||||||||||||
Beginning of period
|
595 | 590 | 591 | 588 | ||||||||||||
Opened
|
2 | - | 6 | 4 | ||||||||||||
Closed
|
- | - | - | (2 | ) | |||||||||||
End of period
|
597 | 590 | 597 | 590 | ||||||||||||
International Company-owned:
|
||||||||||||||||
Beginning of period
|
23 | 29 | 21 | 26 | ||||||||||||
Opened
|
3 | 2 | 5 | 6 | ||||||||||||
Closed
|
- | (1 | ) | - | (1 | ) | ||||||||||
Acquired from franchisees
|
- | - | - | 1 | ||||||||||||
Sold to franchisees
|
- | (10 | ) | - | (12 | ) | ||||||||||
End of period
|
26 | 20 | 26 | 20 | ||||||||||||
North America franchised (a):
|
||||||||||||||||
Beginning of period
|
2,393 | 2,283 | 2,346 | 2,246 | ||||||||||||
Opened
|
36 | 48 | 103 | 130 | ||||||||||||
Closed
|
(16 | ) | (10 | ) | (36 | ) | (55 | ) | ||||||||
End of period
|
2,413 | 2,321 | 2,413 | 2,321 | ||||||||||||
International franchised (a):
|
||||||||||||||||
Beginning of period
|
722 | 614 | 688 | 609 | ||||||||||||
Opened
|
33 | 33 | 82 | 80 | ||||||||||||
Closed
|
(11 | ) | (5 | ) | (26 | ) | (48 | ) | ||||||||
Acquired from Company
|
- | 10 | - | 12 | ||||||||||||
Sold to Company
|
- | - | - | (1 | ) | |||||||||||
End of period
|
744 | 652 | 744 | 652 | ||||||||||||
Total restaurants - end of period
|
3,780 | 3,583 | 3,780 | 3,583 | ||||||||||||
(a)
|
The restaurant unit data for the three and nine months ended September 26, 2010 has been adjusted to reflect the reclassification of restaurants operating in Hawaii, Alaska and Canada from International franchised to North America franchised. There were 63 restaurants reclassified from International to North America franchised as of September 26, 2010.
|
·
|
National Marketing Fund Contribution Rate – Domestic Company-owned and franchised restaurants will contribute 4.0% of sales to the marketing fund in 2011 and have agreed to a minimum contribution rate in 2012 and 2013. The Company expects this agreement to primarily represent a shift, or a slight increase, in total marketing expenditures, and believes an increase in marketing expenditures on a national basis will improve the consistency of the overall marketing message and favorably impact brand awareness.
|
·
|
BIBP Accumulated Deficit – BIBP had an accumulated deficit (representing prior purchases of cheese by PJFS from BIBP at below market prices) of $14.2 million at December 26, 2010. PJFS agreed to pay to BIBP the amount equal to the accumulated deficit at December 26, 2010. Accordingly, BIBP recorded a decrease of $14.2 million in cost of sales and PJFS recorded a corresponding increase in cost of sales in the 2010 financial statements. This transaction did not have any impact on the Company's 2010 consolidated income statement results since both PJFS and BIBP were fully consolidated with the Company’s financial results.
|
·
|
Cheese Purchasing Agreement – As previously discussed, in order to facilitate franchisees' planning of food costs and promotions going forward, PJFS agreed to charge a fixed monthly price for cheese to franchisees who signed a cheese purchasing agreement with PJFS.
|
·
|
Online Ordering System Fees – The Company agreed to reduce the online ordering fee paid by domestic franchisees by 0.5% for 2011, and agreed to limit the fee for 2012 and 2013.
|
·
|
Royalty Rebate Program – The standard royalty rate in 2011 is 5.0% of sales. Franchisees can earn up to a 0.25% quarterly royalty rebate for 2011 to 2013 by meeting certain sales growth targets; they can earn an additional 0.20% royalty rebate in 2011 by making specified re-imaging restaurant lobby investments. The Company agreed to consider a similar capital investment-based royalty rebate opportunity for franchisees in 2012 and 2013 as well.
|
·
|
Food cost relief by lowering the commissary margin on certain commodities sold by PJFS to the franchise system and by providing incentive rebate opportunities;
|
·
|
Targeted royalty relief and local marketing support to assist certain identified franchisees or markets;
|
·
|
Restaurant opening incentives; and
|
·
|
Financing on a selected basis, primarily to assist new or existing franchisees with the acquisition of troubled franchise restaurants or to build new restaurants.
|
·
|
Domestic Company-owned restaurant sales increased $8.4 million, or 7.0%, and $20.4 million, or 5.5%, for the three and nine months ended September 25, 2011, respectively, primarily due to increases in comparable sales of 6.3% and 5.0%, respectively. “Comparable sales” represents sales generated by restaurants open for the entire twelve-month period reported.
|
·
|
North America franchise royalty revenues increased approximately $1.3 million, or 7.9%, and $3.7 million, or 7.0%, for the three and nine months ended September 25, 2011, respectively, due to increases in comparable sales of 4.9% and 3.6%, respectively, and increases in the number of franchise restaurants.
|
·
|
Domestic commissary sales increased $19.0 million, or 17.0%, and $41.1 million, or 12.1%, for the three and nine months ended September 25, 2011, respectively. The increases were primarily due to increases in the selling prices of certain commodities, most notably cheese, and increases in sales volumes.
|
·
|
International revenues increased $3.6 million, or 30.6%, and $8.4 million, or 24.5%, for the three and nine months ended September 25, 2011, respectively, primarily due to increases in the number of restaurants and increases in comparable sales of 4.7% and 5.0%, respectively, calculated on a constant dollar basis. Through the first three quarters of 2010, the International segment included revenues from Company-owned restaurants located in the United Kingdom, which were sold in the third quarter of 2010.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
Sept. 25,
|
Sept. 26,
|
Increase
|
Sept. 25,
|
Sept. 26,
|
Increase
|
|||||||||||||||||||
2011
|
2010
|
(Decrease)
|
2011
|
2010
|
(Decrease)
|
|||||||||||||||||||
Domestic Company-owned restaurants
|
$ | 4,273 | $ | 5,503 | $ | (1,230 | ) | $ | 22,577 | $ | 25,604 | $ | (3,027 | ) | ||||||||||
Domestic commissaries
|
7,237 | 5,393 | 1,844 | 21,112 | 20,577 | 535 | ||||||||||||||||||
North America franchising *
|
15,941 | 14,663 | 1,278 | 50,190 | 46,713 | 3,477 | ||||||||||||||||||
International *
|
249 | (1,309 | ) | 1,558 | (817 | ) | (4,162 | ) | 3,345 | |||||||||||||||
All others
|
(66 | ) | 60 | (126 | ) | (742 | ) | 1,187 | (1,929 | ) | ||||||||||||||
Unallocated corporate expenses
|
(11,085 | ) | (11,004 | ) | (81 | ) | (29,371 | ) | (33,963 | ) | 4,592 | |||||||||||||
Elimination of intersegment losses (profits)
|
297 | (108 | ) | 405 | (256 | ) | (329 | ) | 73 | |||||||||||||||
Income before income taxes, excluding
|
||||||||||||||||||||||||
variable interest entities
|
16,846 | 13,198 | 3,648 | 62,693 | 55,627 | 7,066 | ||||||||||||||||||
BIBP, a variable interest entity
|
- | (658 | ) | 658 | - | 5,505 | (5,505 | ) | ||||||||||||||||
Total income before income taxes
|
16,846 | 12,540 | 4,306 | 62,693 | 61,132 | 1,561 | ||||||||||||||||||
Income attributable to noncontrolling
|
||||||||||||||||||||||||
interests
|
(817 | ) | (672 | ) | (145 | ) | (2,868 | ) | (2,672 | ) | (196 | ) | ||||||||||||
Total income before income taxes,
|
||||||||||||||||||||||||
net of noncontrolling interests
|
$ | 16,029 | $ | 11,868 | $ | 4,161 | $ | 59,825 | $ | 58,460 | $ | 1,365 |
·
|
Domestic Company-owned Restaurant Segment. Domestic Company-owned restaurants’ operating income was $4.3 million for the three months ended September 25, 2011, compared to $5.5 million for the comparable 2010 period, and $22.6 million for the nine months ended September 25, 2011, compared to $25.6 million for the comparable 2010 period. The decreases of $1.2 million and $3.0 million for the three- and nine- month periods were due to increased commodity costs, primarily cheese, partially offset by incremental profits from higher comparable sales. The nine-month period in 2011 was also impacted by increased advertising costs.
|
·
|
Domestic Commissary Segment. Domestic commissaries’ operating income increased $1.8 million and approximately $500,000 for the three and nine months ended September 25, 2011, over the comparable 2010 periods. The increases were due to higher operating income dollar margin attributable to higher sales volumes, partially offset by increased costs attributable to higher fuel prices.
|
·
|
North America Franchising Segment. North America franchising operating income increased approximately $1.3 million and $3.5 million for the three- and nine-month periods of 2011, respectively, as compared to the comparable 2010 periods. The increases were due to the previously mentioned royalty revenue increases.
|
·
|
International Segment. The operating income in the International segment for the third quarter of 2011 was approximately $250,000, compared to an operating loss of $1.3 million for the prior year comparable quarter and was a loss of approximately $800,000 compared to a loss of $4.2 million for the nine months ended September 25, 2011 and September 26, 2010, respectively. The improvements in operating results of $1.6 million and $3.3 million, respectively, were primarily due to increased royalties due to growth in the number of units and comparable sales increases of 4.7% and 5.0% for the three- and nine-month periods, respectively. Additionally, the prior year results included start-up costs associated with our Company-owned commissary in the United Kingdom that opened in 2010.
|
·
|
All Others Segment. The “All others” segment reported losses of approximately $70,000 and $700,000 for the three and nine months ended September 25, 2011, respectively. The “All others” reporting segment operating results declined approximately $100,000 and $1.9 million for the three- and nine-month periods, respectively, as compared to the corresponding 2010 periods. The decreases were primarily due to a decline in the operating results of our online ordering (“eCommerce”) business, partially offset by improvements in operating income at our print and promotions subsidiary, Preferred Marketing Solutions. The decline in the operating results of our eCommerce business was due to an increase in infrastructure and support costs attributable to the new online ordering system. Additionally, online revenues decreased for the nine months ended September 25, 2011.
|
·
|
Unallocated Corporate Segment. Unallocated corporate expenses increased $81,000 and decreased $4.6 million for the three and nine months ended September 25, 2011, respectively, as compared to the corresponding periods in the prior year. The components of unallocated corporate expenses were as follows (in thousands):
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
Sept. 25,
|
Sept. 26,
|
Increase
|
Sept. 25,
|
Sept. 26,
|
Increase
|
|||||||||||||||||||
2011
|
2010
|
(decrease)
|
2011
|
2010
|
(decrease)
|
|||||||||||||||||||
General and administrative (a)
|
$ | 5,629 | $ | 5,962 | $ | (333 | ) | $ | 18,987 | $ | 20,735 | $ | (1,748 | ) | ||||||||||
Net interest (b)
|
116 | 1,140 | (1,024 | ) | 675 | 3,086 | (2,411 | ) | ||||||||||||||||
Depreciation
|
1,818 | 2,293 | (475 | ) | 6,236 | 6,694 | (458 | ) | ||||||||||||||||
Franchise incentives and initiatives (c)
|
2,754 | 1,750 | 1,004 | 2,754 | 4,250 | (1,496 | ) | |||||||||||||||||
Perfect Pizza lease obligation (d)
|
782 | - | 782 | 782 | - | 782 | ||||||||||||||||||
Other income
|
(14 | ) | (141 | ) | 127 | (63 | ) | (802 | ) | 739 | ||||||||||||||
Total unallocated corporate expenses
|
$ | 11,085 | $ | 11,004 | $ | 81 | $ | 29,371 | $ | 33,963 | $ | (4,592 | ) |
(a)
|
The decrease in unallocated corporate general and administrative costs for the nine months ended September 25, 2011 was due to lower short- and long-term incentive compensation costs, and lower sponsorship fees, partially offset by increased travel costs.
|
(b)
|
The decreases in net interest expense reflect the decrease in our average outstanding debt balance and lower interest rates.
|
(c)
|
In 2010, we provided discretionary contributions to the national marketing fund and other local advertising cooperatives. In 2011, we offered incentives to domestic franchisees for meeting certain sales targets, including driving comparable sales, transactions and online sales.
|
(d)
|
The Perfect Pizza lease obligation relates to rents, taxes and insurance associated with the former Perfect Pizza operations in the United Kingdom. See the notes to condensed consolidated financial statements for additional information.
|
Three Months Ended
|
||||||||||||||||
Sept. 25, 2011
|
Sept. 26, 2010
|
|||||||||||||||
Company
|
Franchised
|
Company
|
Franchised
|
|||||||||||||
Total domestic units (end of period)
|
597 | 2,413 | 590 | 2,321 | ||||||||||||
Equivalent units
|
591 | 2,328 | 586 | 2,247 | ||||||||||||
Comparable sales base units
|
582 | 2,150 | 577 | 2,071 | ||||||||||||
Comparable sales base percentage
|
98.5 | % | 92.4 | % | 98.5 | % | 92.2 | % | ||||||||
Average weekly sales - comparable units
|
$ | 16,850 | $ | 14,154 | $ | 15,881 | $ | 13,542 | ||||||||
Average weekly sales - total non-comparable units
|
$ | 11,144 | $ | 10,422 | $ | 11,347 | $ | 13,348 | ||||||||
Average weekly sales - all units
|
$ | 16,763 | $ | 13,869 | $ | 15,813 | $ | 13,527 |
Nine Months Ended
|
||||||||||||||||
Sept. 25, 2011
|
Sept. 26, 2010
|
|||||||||||||||
Company
|
Franchised
|
Company
|
Franchised
|
|||||||||||||
Total domestic units (end of period)
|
597 | 2,413 | 590 | 2,321 | ||||||||||||
Equivalent units
|
588 | 2,318 | 585 | 2,217 | ||||||||||||
Comparable sales base units
|
581 | 2,126 | 576 | 2,071 | ||||||||||||
Comparable sales base percentage
|
98.8 | % | 91.7 | % | 98.4 | % | 93.4 | % | ||||||||
Average weekly sales - comparable units
|
$ | 17,303 | $ | 14,559 | $ | 16,496 | $ | 14,074 | ||||||||
Average weekly sales - total non-comparable units
|
$ | 11,155 | $ | 10,612 | $ | 10,939 | $ | 12,468 | ||||||||
Average weekly sales - all units
|
$ | 17,224 | $ | 14,231 | $ | 16,410 | $ | 13,967 |
·
|
Cost of sales was 2.5% and 1.8% higher as a percentage of sales for the three and nine months ended September 25, 2011, respectively, as compared to the same periods of 2010, due to the impact of higher commodities costs, principally cheese, wheat and meats.
|
·
|
Salaries and benefits were 0.5% and 0.4% lower as a percentage of sales for the three and nine months ended September 25, 2011, respectively, as compared to the same periods of 2010, reflecting the benefit of increased sales.
|
·
|
Advertising and related costs as a percentage of sales were 0.2% lower and 0.2% higher for the three and nine months ended September 25, 2011, respectively, as compared to the same periods of 2010. National marketing as a percentage of sales increased for both the three- and nine-month periods. Local advertising can vary somewhat from quarter to quarter.
|
·
|
Occupancy costs and other operating costs, on a combined basis, as a percentage of sales, were 0.9% and 0.3% lower for the three and nine months ended September 25, 2011, respectively, as compared to the corresponding 2010 periods, reflecting the benefit of increased sales.
|
·
|
Cost of sales was 0.9% and 1.3% higher as a percentage of revenues for the three and nine months ended September 25, 2011, respectively, as compared to the same periods of 2010. Cost of sales increased primarily due to the impact of higher commodities costs, primarily cheese, wheat and meats. In addition, a reduction in online fee revenue from franchisees pursuant to the National Marketing Fund Agreement and an increase in eCommerce support costs contributed to the increases in cost of sales.
|
·
|
Salaries and benefits were 0.7% and 0.5% lower as a percentage of revenues for the three and nine months ended September 25, 2011, respectively, as compared to the same periods of 2010, reflecting the benefit of increased sales.
|
·
|
Other operating expenses were 0.3% lower and 0.2% higher as a percentage of revenues for the three and nine months ended September 25, 2011, respectively, as compared to the same periods of 2010. Fuel prices were higher in 2011; however, the decrease on a percentage of sales-basis for the three-month period was due to increased sales.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
Sept. 25,
|
Sept. 26,
|
Increase
|
Sept. 25,
|
Sept. 26,
|
Increase
|
|||||||||||||||||||
2011
|
2010
|
(Decrease)
|
2011
|
2010
|
(Decrease)
|
|||||||||||||||||||
Disposition and valuation-related costs
|
$ | 120 | $ | 203 | $ | (83 | ) | $ | 506 | $ | 554 | $ | (48 | ) | ||||||||||
Provision for uncollectible accounts
|
||||||||||||||||||||||||
and notes receivable
|
583 | 308 | 275 | 455 | 642 | (187 | ) | |||||||||||||||||
Pre-opening costs
|
27 | 22 | 5 | 183 | 142 | 41 | ||||||||||||||||||
Franchise and development incentives
|
||||||||||||||||||||||||
and initiatives (a)
|
3,307 | 2,083 | 1,224 | 3,927 | 4,854 | (927 | ) | |||||||||||||||||
Perfect Pizza lease obligation (b)
|
782 | - | 782 | 782 | - | 782 | ||||||||||||||||||
Other (income) expense
|
(42 | ) | 27 | (69 | ) | 1,164 | 428 | 736 | ||||||||||||||||
Total other general expenses
|
$ | 4,777 | $ | 2,643 | $ | 2,134 | $ | 7,017 | $ | 6,620 | $ | 397 |
(a)
|
In 2010, we provided discretionary contributions to the national marketing fund and other local advertising cooperatives. The 2011 amounts include approximately $2.8 million of incentives offered to domestic franchisees for meeting certain sales targets, including driving comparable sales, transactions and online sales for the three and nine months ended September 25, 2011.
|
(b)
|
The Perfect Pizza lease obligation relates to rents, taxes and insurance associated with the former Perfect Pizza operations in the United Kingdom. See the notes to condensed consolidated financial statements for additional information.
|
Sept. 25,
|
Dec. 26,
|
|||||||
2011
|
2010
|
|||||||
Revolving line of credit
|
$ | 50,000 | $ | 99,000 | ||||
Other
|
- | 17 | ||||||
Total long-term debt
|
$ | 50,000 | $ | 99,017 |
Actual Ratio for the
|
||||
Quarter Ended
|
||||
Permitted Ratio
|
September 25, 2011
|
|||
Leverage Ratio
|
Not to exceed 2.5 to 1.0
|
0.5 to 1.0
|
||
Interest Coverage Ratio
|
Not less than 3.5 to 1.0
|
5.1 to 1.0
|
Nine Months Ended
|
||||||||
Sept. 25,
|
Sept. 26,
|
|||||||
2011
|
2010
|
|||||||
Net cash provided by operating activities
|
$ | 84,348 | $ | 62,159 | ||||
Pre-tax income from BIBP cheese purchasing entity
|
- | (5,505 | ) | |||||
Purchase of property and equipment
|
(20,647 | ) | (23,608 | ) | ||||
Free cash flow (a)
|
$ | 63,701 | $ | 33,046 |
(a)
|
Free cash flow is defined as net cash provided by operating activities (from the consolidated statements of cash flows) excluding the impact of BIBP, less the purchases of property and equipment. See “Non-GAAP Measures” above for more information about this non-GAAP measure, its limitations and why we present free cash flow alongside the most directly comparable GAAP measure.
|
2011
|
2010
|
|||||||||||
Projected
|
BIBP
|
Actual
|
||||||||||
Block Price
|
Block Price
|
Block Price
|
||||||||||
Quarter 1
|
$ | 1.695 | $ | 1.595 | $ | 1.431 | ||||||
Quarter 2
|
1.736 | 1.529 | 1.407 | |||||||||
Quarter 3
|
2.006 | 1.572 | 1.597 | |||||||||
Quarter 4
|
1.704 | * | 1.645 | 1.578 | ||||||||
Full Year
|
$ | 1.785 | * | $ | 1.585 | $ | 1.503 | |||||
*amounts are estimates based on futures prices
|
Actual
|
||||
2010
|
||||
Quarter 1
|
$ | 3,485 | ||
Quarter 2
|
2,678 | |||
Quarter 3
|
(658 | ) | ||
Quarter 4 (a)
|
15,449 | |||
Full Year
|
$ | 20,954 |
(a) |
Includes a reduction in BIBP's cost of sales of $14.2 million at 2010 fiscal year-end associated with PJFS's agreement to pay BIBP for past cheese purchases an amount
equal to its accumulated deficit.
|
Total Number
|
Maximum Dollar
|
||||||
Total
|
Average
|
of Shares
|
Value of Shares
|
||||
Number
|
Price
|
Purchased as Part of
|
that May Yet Be
|
||||
of Shares
|
Paid per
|
Publicly Announced
|
Purchased Under the
|
||||
Fiscal Period
|
Purchased
|
Share
|
Plans or Programs
|
Plans or Programs
|
|||
12/27/2010 - 01/23/2011
|
66
|
$27.93
|
45,455
|
$85,030
|
|||
01/24/2011 - 02/20/2011
|
-
|
-
|
*
|
45,455
|
$85,030
|
||
02/21/2011 - 03/27/2011
|
77
|
$29.57
|
45,532
|
$82,742
|
|||
03/28/2011 - 04/24/2011
|
15
|
$30.01
|
45,547
|
$82,288
|
|||
04/25/2011 - 05/22/2011
|
140
|
$31.39
|
45,687
|
$77,892
|
|||
05/23/2011 - 06/26/2011
|
519
|
$33.11
|
46,206
|
$60,699
|
|||
06/27/2011 - 07/24/2011
|
96
|
$32.04
|
46,302
|
$57,636
|
|||
07/25/2011 - 08/21/2011
|
223
|
$29.48
|
46,525
|
$51,052
|
|||
08/22/2011 - 09/25/2011
|
479
|
$28.77
|
47,004
|
$37,282
|
|||
*There were no share repurchases during this period.
|
Exhibit
|
||
Number
|
Description
|
|
31.1
|
Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-15(e), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-15(e), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101
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Financial statements from the quarterly report on Form 10-Q of Papa John's International, Inc. for the quarter ended September 25, 2011, filed on November 1, 2011, formatted in XBRL: (i) the Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) the Consolidated Statements of Stockholders' Equity, (iv) the Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements.
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PAPA JOHN'S INTERNATIONAL, INC.
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|
(Registrant)
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|
Date: November 1, 2011
|
/s/ Lance F. Tucker
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Lance F. Tucker
|
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Senior Vice President and
|
|
Chief Financial Officer
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1.
|
I have reviewed this quarterly report on Form 10-Q of Papa John’s International, Inc.;
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|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 1, 2011
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/s/ John H. Schnatter
|
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John H. Schnatter
|
||
Founder, Chairman and
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||
Chief Executive Officer
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|
1.
|
I have reviewed this quarterly report on Form 10-Q of Papa John’s International, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 1, 2011 |
/s/ Lance F. Tucker
|
|
Lance F. Tucker
|
||
Senior Vice President and
|
||
Chief Financial Officer
|
1.
|
The Report on Form 10-Q of the Company for the quarterly period ended September 25, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 1, 2011
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/s/ John H. Schnatter
|
|
John H. Schnatter
|
||
Founder, Chairman and
|
||
Chief Executive Officer
|
1.
|
The Report on Form 10-Q of the Company for the quarterly period ended September 25, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 1, 2011
|
/s/ Lance F. Tucker
|
|
Lance F. Tucker
|
||
Senior Vice President and
|
||
Chief Financial Officer
|
Consolidated Statements of Income (Unaudited) (USD $) Share data in Thousands, except Per Share data | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 25, 2011 | Sep. 26, 2010 | Sep. 25, 2011 | Sep. 26, 2010 | |
Total revenues | $ 305,668,000 | $ 273,126,000 | $ 911,669,000 | $ 839,559,000 |
Income (loss) from the franchise cheese-purchasing program, net of noncontrolling interest | (409,000) | 4,573,000 | ||
General and administrative expenses | 27,332,000 | 27,133,000 | 84,023,000 | 83,983,000 |
Other general expenses | 4,777,000 | 2,643,000 | 7,017,000 | 6,620,000 |
Depreciation and amortization | 7,974,000 | 8,067,000 | 24,711,000 | 24,122,000 |
Total costs and expenses | 288,710,000 | 259,343,000 | 848,345,000 | 775,035,000 |
Operating income | 16,958,000 | 13,783,000 | 63,324,000 | 64,524,000 |
Investment income | 170,000 | 173,000 | 552,000 | 601,000 |
Interest expense | (282,000) | (1,416,000) | (1,183,000) | (3,993,000) |
Income before income taxes | 16,846,000.0 | 12,540,000.0 | 62,693,000.0 | 61,132,000.0 |
Income tax expense | 4,906,000 | 4,020,000 | 20,151,000 | 20,545,000 |
Net income, including noncontrolling interests | 11,940,000.0 | 8,520,000.0 | 42,542,000.0 | 40,587,000.0 |
Less: Income attributable to noncontrolling interests | (817,000) | (672,000) | (2,868,000) | (2,672,000) |
Net income, net of noncontrolling interests | 11,123,000 | 7,848,000 | 39,674,000 | 37,915,000 |
Basic earnings per common share | $ 0.45 | $ 0.30 | $ 1.57 | $ 1.43 |
Earnings per common share - assuming dilution | $ 0.44 | $ 0.30 | $ 1.55 | $ 1.42 |
Basic weighted average shares outstanding | 24,964 | 25,951 | 25,302 | 26,586 |
Diluted weighted average shares outstanding | 25,146 | 26,081 | 25,528 | 26,743 |
Domestic Company-owned Restaurant [Member] | ||||
Revenue from external customers | 128,787,000 | 120,414,000 | 395,099,000 | 374,652,000 |
Cost of sales | 32,229,000 | 27,245,000 | 94,491,000 | 81,551,000 |
Salaries and benefits | 35,012,000 | 33,320,000 | 107,028,000 | 102,915,000 |
Advertising and related costs | 11,790,000 | 11,264,000 | 36,477,000 | 33,817,000 |
Occupancy costs | 8,496,000 | 8,494,000 | 24,304,000 | 24,264,000 |
Other operating expenses | 18,858,000 | 18,184,000 | 57,265,000 | 54,218,000 |
Total costs and expenses | 106,385,000 | 98,507,000 | 319,565,000 | 296,765,000 |
North America [Member] | ||||
Franchise royalties | 17,967,000 | 16,653,000 | 55,801,000 | 52,138,000 |
Franchise and development fees | 155,000 | 149,000 | 464,000 | 460,000 |
Other sales | 12,368,000 | 12,138,000 | 38,185,000 | 39,674,000 |
Domestic Commissaries [Member] | ||||
Revenue from external customers | 130,870,000 | 111,884,000 | 379,569,000 | 338,460,000 |
International [Member] | ||||
Royalties and franchise and development fees | 4,054,000 | 3,316,000 | 11,865,000 | 9,635,000 |
Operating expenses | 9,634,000 | 7,627,000 | 26,118,000 | 21,833,000 |
International Restaurant and Commissaries [Member] | ||||
Revenue from external customers | 11,467,000 | 8,572,000 | 30,686,000 | 24,540,000 |
Domestic Commissary and Other [Member] | ||||
Cost of sales | 110,387,000 | 94,422,000 | 320,359,000 | 284,909,000 |
Salaries and benefits | 8,840,000 | 8,533,000 | 26,502,000 | 25,833,000 |
Other operating expenses | 13,381,000 | 12,002,000 | 40,050,000 | 35,543,000 |
Total costs and expenses | $ 132,608,000 | $ 114,957,000 | $ 386,911,000 | $ 346,285,000 |
Consolidated Statements of Stockholders' Equity (Unaudited) (USD $) Share data in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Noncontrolling Interests in Subsidiaries | |||
---|---|---|---|---|---|---|---|---|---|---|
Balance at Dec. 27, 2009 | $ 185,037,000 | $ 358,000 | $ 231,720,000 | $ (1,084,000) | $ 191,212,000 | $ (245,337,000) | $ 8,168,000 | |||
Balance (in shares) at Dec. 27, 2009 | 26,930 | |||||||||
Comprehensive income: | ||||||||||
Net income | 40,587,000.0 | 37,915,000.0 | 2,672,000.0 | |||||||
Change in valuation of interest rate swap agreements, net of tax | 1,730,000 | 1,730,000 | ||||||||
Foreign currency translation | 34,000 | 34,000 | ||||||||
Comprehensive income | 42,351,000 | |||||||||
Exercise of stock options (in shares) | 283 | |||||||||
Exercise of stock options | 5,304,000 | 2,000 | 5,017,000 | 285,000 | ||||||
Tax effect of equity awards | (63,000) | (63,000) | ||||||||
Acquisition of Company common stock | (43,215,000) | (43,215,000) | ||||||||
Acquisition of Company common stock (in shares) | (1,738) | |||||||||
Net contributions (distributions) - noncontrolling interests | (2,907,000) | (2,907,000) | ||||||||
Stock-based compensation expense | 4,491,000 | 4,491,000 | ||||||||
Issuance of restricted stock (in shares) | 34 | |||||||||
Issuance of restricted stock | (880,000) | 880,000 | ||||||||
Other | 2,264,000 | 2,206,000 | 58,000 | |||||||
Balance at Sep. 26, 2010 | 193,262,000 | 360,000 | 242,491,000 | 680,000 | 229,127,000 | (287,329,000) | 7,933,000 | |||
Balance (in shares) at Sep. 26, 2010 | 25,509 | |||||||||
Balance at Dec. 26, 2010 | 207,200,000 | [1] | 361,000 | 245,380,000 | 849,000 | 243,152,000 | (291,048,000) | 8,506,000 | ||
Balance (in shares) at Dec. 26, 2010 | 25,439 | |||||||||
Comprehensive income: | ||||||||||
Net income | 42,542,000.0 | 39,674,000.0 | 2,868,000.0 | |||||||
Change in valuation of interest rate swap agreements, net of tax | 66,000 | 66,000 | ||||||||
Foreign currency translation | 440,000 | 440,000 | ||||||||
Comprehensive income | 43,048,000 | |||||||||
Exercise of stock options (in shares) | 459 | |||||||||
Exercise of stock options | 10,981,000 | 5,000 | 10,976,000 | |||||||
Tax effect of equity awards | (1,449,000) | (1,449,000) | ||||||||
Acquisition of Company common stock | (49,579,000) | (49,579,000) | ||||||||
Acquisition of Company common stock (in shares) | (1,615) | |||||||||
Net contributions (distributions) - noncontrolling interests | (3,129,000) | (3,129,000) | ||||||||
Stock-based compensation expense | 5,266,000 | 5,266,000 | ||||||||
Issuance of restricted stock (in shares) | 92 | |||||||||
Issuance of restricted stock | (2,253,000) | 2,253,000 | ||||||||
Other | 216,000 | (66,000) | 282,000 | |||||||
Balance at Sep. 25, 2011 | $ 212,554,000 | $ 366,000 | $ 257,854,000 | $ 1,355,000 | $ 282,826,000 | $ (338,092,000) | $ 8,245,000 | |||
Balance (in shares) at Sep. 25, 2011 | 24,375 | |||||||||
|
Significant Accounting Policies (Pre-Tax Income Attributable to Joint Ventures) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 25, 2011 | Sep. 26, 2010 | Sep. 25, 2011 | Sep. 26, 2010 | |
Noncontrolling Interest [Line Items] | ||||
Total income before income taxes, net of noncontrolling interests | $ 16,029,000 | $ 11,868,000 | $ 59,825,000 | $ 58,460,000 |
Noncontrolling interests | 817,000 | 672,000 | 2,868,000 | 2,672,000 |
Total pre-tax income | 16,846,000 | 12,540,000 | 62,693,000 | 61,132,000 |
Corporate Joint Venture [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Total income before income taxes, net of noncontrolling interests | 1,377,000 | 1,146,000 | 4,693,000 | 4,240,000 |
Noncontrolling interests | 817,000 | 672,000 | 2,868,000 | 2,672,000 |
Total pre-tax income | $ 2,194,000 | $ 1,818,000 | $ 7,561,000 | $ 6,912,000 |
Document and Entity Information | 9 Months Ended | |
---|---|---|
Sep. 25, 2011 | Oct. 26, 2011 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 25, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PZZA | |
Entity Registrant Name | PAPA JOHNS INTERNATIONAL INC | |
Entity Central Index Key | 0000901491 | |
Current Fiscal Year End Date | --12-25 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 24,375,854 |
Debt - Narrative (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 25, 2011 | Sep. 26, 2010 | Sep. 25, 2011 | Sep. 26, 2010 | Dec. 26, 2010
Contract | Sep. 25, 2011
New Credit Facility [Member] | Dec. 26, 2010
New Credit Facility [Member] | Jun. 27, 2010
Old Credit Facility [Member] | Sep. 25, 2011
0.53% Interest Rate Swap Agreements [Member]
Contract | Dec. 26, 2010
4.98% Interest Rate Swap Agreements [Member] | Dec. 26, 2010
3.74% Interest Rate Swap Agreements [Member] | Sep. 25, 2011
Interest Rate Swap [Member] | Sep. 26, 2010
Interest Rate Swap [Member] | Sep. 25, 2011
Interest Rate Swap [Member] | Sep. 26, 2010
Interest Rate Swap [Member] | Dec. 26, 2010
Interest Rate Swap [Member] | |
Debt Instrument [Line Items] | ||||||||||||||||
Line of credit facility initiation date | September 2010 | |||||||||||||||
Line of credit facility, term | 5 years | |||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 175,000,000 | $ 175,000,000 | ||||||||||||||
Interest margin rate on debt, minimum | 1.00% | 0.50% | ||||||||||||||
Interest margin rate on debt, maximum | 1.75% | 1.00% | ||||||||||||||
Line of credit facility, commitment fee percentage, minimum | 0.175% | 0.125% | ||||||||||||||
Line of credit facility, commitment fee percentage, maximum | 0.25% | 0.20% | ||||||||||||||
Line of credit facility, remaining borrowing capacity, after reduction for outstanding letters of credit | 111,600,000 | 59,100,000 | ||||||||||||||
Derivative, fixed interest rate | 0.53% | 4.98% | 3.74% | |||||||||||||
Floating rate debt | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||||||
Number of interest rate derivatives held | 2 | 1 | ||||||||||||||
Cash flow hedge liabilities, fair value | 147,000 | 147,000 | 313,000 | |||||||||||||
Cash flow hedge liabilities to be classified into interest expense during the next twelve months | 76,000 | 76,000 | ||||||||||||||
Derivatives not designated as hedging instruments | 0 | 0 | ||||||||||||||
Swaps reclassified from accumulated other comprehensive income (loss) to interest expense | 12,000.0 | 1,000,000 | 305,000.0 | 3,100,000 | ||||||||||||
Weighted average interest rate for credit facility borrowings, including the impact of interest rate swaps | 1.29% | 5.20% | 2.04% | 5.09% | ||||||||||||
Interest paid, including payments made or received under Swaps | $ 230,000.0 | $ 1,400,000 | $ 1,400,000 | $ 4,000,000 |
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Comprehensive Income | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 25, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income |
6. Comprehensive Income
Comprehensive
income is comprised of the following:
|
Calculation of Earnings Per Share (Detail) (USD $) In Thousands, except Per Share data | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 25, 2011 | Sep. 26, 2010 | Sep. 25, 2011 | Sep. 26, 2010 | |
Basic earnings per common share: | ||||
Basic earnings per common share | $ 0.45 | $ 0.30 | $ 1.57 | $ 1.43 |
Earnings per common share - assuming dilution: | ||||
Net income | $ 11,123 | $ 7,848 | $ 39,674 | $ 37,915 |
Weighted average shares outstanding | 24,964 | 25,951 | 25,302 | 26,586 |
Dilutive effect of outstanding compensation awards | 182 | 130 | 226 | 157 |
Diluted weighted average shares outstanding | 25,146 | 26,081 | 25,528 | 26,743 |
Earnings per common share - assuming dilution | $ 0.44 | $ 0.30 | $ 1.55 | $ 1.42 |
Debt (Detail) (USD $) In Thousands | Sep. 25, 2011 | Dec. 26, 2010 | |||
---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||
Revolving line of credit | $ 50,000 | $ 99,000 | |||
Other | 17 | ||||
Total long-term debt | $ 50,000 | $ 99,017 | [1] | ||
|
Debt (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 25, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt |
Our
debt is comprised of the following (in thousands):
|
Significant Accounting Policies | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 25, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies |
Noncontrolling Interests
The
Consolidation topic of the Accounting Standards Codification
(“ASC”) requires all entities to report noncontrolling
interests in subsidiaries as equity in the consolidated financial
statements, but separate from the equity of the parent company. The
Consolidation topic further requires that consolidated net income
be reported at amounts attributable to the parent and the
noncontrolling interest, rather than expensing the income
attributable to the noncontrolling interest holder. Additionally,
disclosures are required to clearly identify and distinguish
between the interests of the parent company and the interests of
the noncontrolling owners, including a disclosure on the face of
the consolidated statements for income attributable to the
noncontrolling interest holder.
Papa
John’s had two joint venture arrangements as of September 25,
2011 and September 26, 2010, which were as follows:
The
pre-tax income attributable to the joint ventures for the three and
nine months ended September 25, 2011 and September 26, 2010 was as
follows:
The
noncontrolling interest holders’ equity in the joint venture
arrangements totaled $8.2 million as of September 25, 2011 and $8.5
million as of December 26, 2010.
Deferred Income Tax Assets and Tax Reserves
We
are subject to income taxes in the United States and several
foreign jurisdictions. Significant judgment is required in
determining our provision for income taxes and the related assets
and liabilities. The provision for income taxes includes income
taxes paid, currently payable or receivable and those deferred. We
use an estimated annual effective rate based on expected annual
income to determine our quarterly provision for income taxes.
Discrete items are recorded in the quarter in which they
occur.
Deferred
tax assets and liabilities are determined based on differences
between financial reporting and tax basis of assets and
liabilities, and are measured using enacted tax rates and laws that
are expected to be in effect when the differences reverse. Deferred
tax assets are also recognized for the estimated future effects of
tax loss carryforwards. The effect on deferred taxes of changes in
tax rates is recognized in the period in which the enactment date
changes. As a result, our effective tax rate may fluctuate.
Valuation allowances are established when necessary on a
jurisdictional basis to reduce deferred tax assets to the amounts
we expect to realize. As of September 25, 2011, we had a net
deferred tax asset balance of $3.2 million. We have not provided a
valuation allowance for the deferred tax assets since we believe it
is more likely than not that future earnings will be sufficient to
ensure the realization of the net deferred tax assets for federal
and state purposes.
Certain
tax authorities periodically audit the Company. We provide reserves
for potential exposures. We evaluate these issues on a quarterly
basis to adjust for events, such as court rulings or audit
settlements, which may impact our ultimate payment for such
exposures.
New Accounting Pronouncements
Comprehensive Income
In
June 2011, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update (“ASU”) No. 2011-05,
Comprehensive
Income: Presentation of Comprehensive Income. In
accordance with the new guidance, an entity will no longer be
permitted to record comprehensive income in its Consolidated
Statements of Stockholders’ Equity. Instead, entities will be
required to present components of comprehensive income in either
one continuous financial statement with two sections, net income
and other comprehensive income, or in two separate but consecutive
statements. This guidance will be required beginning
with our first quarter of fiscal 2012. We do not expect the
adoption of this ASU to have any impact on our operating
results.
Intangibles – Goodwill and Other
In
September 2011, the FASB issued ASU No. 2011-08, Intangibles – Goodwill
and Other. The amendments in this update will allow an
entity to first assess qualitative factors to determine whether it
is necessary to perform the two-step quantitative goodwill
impairment test. Under these amendments, an entity would not be
required to calculate the fair value of a reporting unit unless the
entity determines, based on a qualitative assessment, that it is
more likely than not that its fair value is less than its carrying
amount. The amendments include a number of events and circumstances
for an entity to consider in conducting the qualitative assessment.
This guidance will be required beginning with our first quarter of
fiscal 2012. We do not expect the adoption of this ASU to have a
material impact on our operating results.
Reclassification of Hawaii, Alaska and Canada
In
2011, we realigned management responsibility and financial
reporting for Hawaii, Alaska and Canada from our International
business segment to our Domestic franchising segment in order to
better leverage existing infrastructure and systems. As a result,
we renamed the Domestic franchising segment “North America
franchising” in the first quarter of 2011. Certain prior year
amounts have been reclassified in our Consolidated Statements of
Income and in our segment information to conform to the current
year presentation.
Subsequent Events
The
Company evaluated subsequent events through the date the financial
statements were issued and filed with the Securities and Exchange
Commission in this Form 10-Q. There were no subsequent events that
required recognition or disclosure.
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Segment Information |
8. Segment Information
We
have defined six reportable segments: domestic Company-owned
restaurants, domestic commissaries, North America franchising,
international operations, variable interest entities
(“VIEs”) and all other units.
The
domestic Company-owned restaurant segment consists of the
operations of all domestic (“domestic” is defined as
restaurants operating in the United States) Company-owned
restaurants and derives its revenues principally from retail sales
of pizza and other food and beverage products to the general
public. The domestic commissary segment consists of the operations
of our regional dough production and product distribution centers
and derives its revenues principally from the sale and distribution
of food and paper products to Company-owned and franchised
restaurants. The North America franchising segment consists of our
franchise sales and support activities and derives its revenues
from the sale of franchise and development rights and the
collection of royalties from our franchisees located in the United
States and Canada. The international operations segment principally
consists of our Company-owned restaurants and distribution sales to
franchised Papa John’s restaurants located in the United
Kingdom, China and Mexico and our franchise sales and support
activities, which derive revenues from sales of franchise and
development rights and the collection of royalties from our
international franchisees. International franchisees are defined as
all franchise operations outside of the United States and Canada.
BIBP was a variable interest entity in which we were deemed the
primary beneficiary, as defined in Note 3, and is the only activity
reflected in the VIE segment. All other business units that do not
meet the quantitative thresholds for determining reportable
segments, which we refer to as our “all others”
segment, consist of operations that derive revenues from the sale,
principally to Company-owned and franchised restaurants, of
printing and promotional items, risk management services, and
information systems and related services used in restaurant
operations, including our online and other technology-based
ordering platforms.
Generally,
we evaluate performance and allocate resources based on profit or
loss from operations before income taxes and eliminations. Certain
administrative and capital costs are allocated to segments based
upon predetermined rates or actual estimated resource usage. We
account for intercompany sales and transfers as if the sales or
transfers were to third parties and eliminate the related profit in
consolidation.
Our
reportable segments are business units that provide different
products or services. Separate management of each segment is
required because each business unit is subject to different
operational issues and strategies. No single external customer
accounted for 10% or more of our consolidated
revenues.
As
previously noted, beginning in 2011, we realigned management
responsibility for Hawaii, Alaska and Canada from the International
segment to the Domestic franchising segment in order to better
leverage existing infrastructure and systems. As a result, we
renamed the Domestic franchising segment “North America
franchising” in the first quarter of 2011. The prior year
data in the following table has been reclassified from the
International segment to the North America franchising segment to
conform to the current year presentation.
Our
segment information is as follows:
*The
results for the three and nine months ended September 26, 2010 for
franchised restaurants operating in Hawaii, Alaska and Canada have
been reclassified from the International segment to the North
America franchising segment to conform to the current year
presentation. The impact of the reclassification was to increase
North America franchising revenues and income before income taxes
by $362,000 and $302,000, respectively, for the three months ended
September 26, 2010, and $1.1 million and $982,000, respectively,
for the nine months ended September 26, 2010, with corresponding
decreases in the International segment.
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Schedule of Comprehensive Income | Comprehensive
income is comprised of the following:
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Significant Accounting Policies (Policies) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Noncontrolling Interests |
Noncontrolling Interests
The
Consolidation topic of the Accounting Standards Codification
(“ASC”) requires all entities to report noncontrolling
interests in subsidiaries as equity in the consolidated financial
statements, but separate from the equity of the parent company. The
Consolidation topic further requires that consolidated net income
be reported at amounts attributable to the parent and the
noncontrolling interest, rather than expensing the income
attributable to the noncontrolling interest holder. Additionally,
disclosures are required to clearly identify and distinguish
between the interests of the parent company and the interests of
the noncontrolling owners, including a disclosure on the face of
the consolidated statements for income attributable to the
noncontrolling interest holder.
Papa
John’s had two joint venture arrangements as of September 25,
2011 and September 26, 2010, which were as follows:
The
pre-tax income attributable to the joint ventures for the three and
nine months ended September 25, 2011 and September 26, 2010 was as
follows:
The
noncontrolling interest holders’ equity in the joint venture
arrangements totaled $8.2 million as of September 25, 2011 and $8.5
million as of December 26, 2010.
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Deferred Income Tax Assets and Tax Reserves |
Deferred Income Tax Assets and Tax Reserves
We
are subject to income taxes in the United States and several
foreign jurisdictions. Significant judgment is required in
determining our provision for income taxes and the related assets
and liabilities. The provision for income taxes includes income
taxes paid, currently payable or receivable and those deferred. We
use an estimated annual effective rate based on expected annual
income to determine our quarterly provision for income taxes.
Discrete items are recorded in the quarter in which they
occur.
Deferred
tax assets and liabilities are determined based on differences
between financial reporting and tax basis of assets and
liabilities, and are measured using enacted tax rates and laws that
are expected to be in effect when the differences reverse. Deferred
tax assets are also recognized for the estimated future effects of
tax loss carryforwards. The effect on deferred taxes of changes in
tax rates is recognized in the period in which the enactment date
changes. As a result, our effective tax rate may fluctuate.
Valuation allowances are established when necessary on a
jurisdictional basis to reduce deferred tax assets to the amounts
we expect to realize. As of September 25, 2011, we had a net
deferred tax asset balance of $3.2 million. We have not provided a
valuation allowance for the deferred tax assets since we believe it
is more likely than not that future earnings will be sufficient to
ensure the realization of the net deferred tax assets for federal
and state purposes.
Certain
tax authorities periodically audit the Company. We provide reserves
for potential exposures. We evaluate these issues on a quarterly
basis to adjust for events, such as court rulings or audit
settlements, which may impact our ultimate payment for such
exposures.
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New Accounting Pronouncements |
New Accounting Pronouncements
Comprehensive Income
In
June 2011, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update (“ASU”) No. 2011-05,
Comprehensive
Income: Presentation of Comprehensive Income. In
accordance with the new guidance, an entity will no longer be
permitted to record comprehensive income in its Consolidated
Statements of Stockholders’ Equity. Instead, entities will be
required to present components of comprehensive income in either
one continuous financial statement with two sections, net income
and other comprehensive income, or in two separate but consecutive
statements. This guidance will be required beginning
with our first quarter of fiscal 2012. We do not expect the
adoption of this ASU to have any impact on our operating
results.
Intangibles – Goodwill and Other
In
September 2011, the FASB issued ASU No. 2011-08, Intangibles – Goodwill
and Other. The amendments in this update will allow an
entity to first assess qualitative factors to determine whether it
is necessary to perform the two-step quantitative goodwill
impairment test. Under these amendments, an entity would not be
required to calculate the fair value of a reporting unit unless the
entity determines, based on a qualitative assessment, that it is
more likely than not that its fair value is less than its carrying
amount. The amendments include a number of events and circumstances
for an entity to consider in conducting the qualitative assessment.
This guidance will be required beginning with our first quarter of
fiscal 2012. We do not expect the adoption of this ASU to have a
material impact on our operating results.
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Reclassification of Hawaii, Alaska and Canada |
Reclassification of Hawaii, Alaska and Canada
In
2011, we realigned management responsibility and financial
reporting for Hawaii, Alaska and Canada from our International
business segment to our Domestic franchising segment in order to
better leverage existing infrastructure and systems. As a result,
we renamed the Domestic franchising segment “North America
franchising” in the first quarter of 2011. Certain prior year
amounts have been reclassified in our Consolidated Statements of
Income and in our segment information to conform to the current
year presentation.
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Subsequent Events |
Subsequent Events
The
Company evaluated subsequent events through the date the financial
statements were issued and filed with the Securities and Exchange
Commission in this Form 10-Q. There were no subsequent events that
required recognition or disclosure.
|
Segment Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 25, 2011 | Sep. 26, 2010 | Sep. 25, 2011 | Sep. 26, 2010 | Dec. 26, 2010 | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenue from external customers | $ 305,668,000 | $ 273,126,000 | $ 911,669,000 | $ 839,559,000 | ||||||||||
Intersegment revenues | 42,095,000 | 72,939,000 | 147,498,000 | 223,884,000 | ||||||||||
Income (loss) before income taxes | 16,846,000 | 12,540,000 | 62,693,000 | 61,132,000 | ||||||||||
Less: Income attributable to noncontrolling interests | (817,000) | (672,000) | (2,868,000) | (2,672,000) | ||||||||||
Total income before income taxes, net of noncontrolling interests | 16,029,000 | 11,868,000 | 59,825,000 | 58,460,000 | ||||||||||
Accumulated depreciation and amortization | (260,617,000) | (260,617,000) | ||||||||||||
Net property and equipment | 183,184,000 | 183,184,000 | 186,594,000 | [1] | ||||||||||
Domestic Company-owned restaurants [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenue from external customers | 128,787,000 | 120,414,000 | 395,099,000 | 374,652,000 | ||||||||||
Income (loss) before income taxes | 4,273,000 | 5,503,000 | 22,577,000 | 25,604,000 | ||||||||||
Property and equipment, gross | 173,814,000 | 173,814,000 | ||||||||||||
Domestic Commissaries [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenue from external customers | 130,870,000 | 111,884,000 | 379,569,000 | 338,460,000 | ||||||||||
Intersegment revenues | 38,702,000 | 32,376,000 | 112,674,000 | 99,254,000 | ||||||||||
Income (loss) before income taxes | 7,237,000 | 5,393,000 | 21,112,000 | 20,577,000 | ||||||||||
Property and equipment, gross | 85,264,000 | 85,264,000 | ||||||||||||
North America Franchising [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenue from external customers | 18,122,000 | [2] | 16,802,000 | [2] | 56,265,000 | [2] | 52,598,000 | [2] | ||||||
Intersegment revenues | 542,000 | 494,000 | 1,625,000 | 1,509,000 | ||||||||||
Income (loss) before income taxes | 15,941,000 | [2] | 14,663,000 | [2] | 50,190,000 | [2] | 46,713,000 | [2] | ||||||
International [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenue from external customers | 15,521,000 | [2] | 11,888,000 | [2] | 42,551,000 | [2] | 34,175,000 | [2] | ||||||
Intersegment revenues | 58,000 | 163,000 | 163,000 | 852,000 | ||||||||||
Income (loss) before income taxes | 249,000 | [2] | (1,309,000) | [2] | (817,000) | [2] | (4,162,000) | [2] | ||||||
Property and equipment, gross | 18,279,000 | 18,279,000 | ||||||||||||
North America [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Other sales | 12,368,000 | 12,138,000 | 38,185,000 | 39,674,000 | ||||||||||
Variable Interest Entity, Primary Beneficiary [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Intersegment revenues | 37,052,000 | 25,117,000 | 113,556,000 | |||||||||||
Income (loss) before income taxes | (658,000) | 5,505,000 | ||||||||||||
All Others [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Intersegment revenues | 2,793,000 | 2,854,000 | 7,919,000 | 8,713,000 | ||||||||||
Income (loss) before income taxes | (66,000) | 60,000 | (742,000) | 1,187,000 | ||||||||||
Property and equipment, gross | 36,157,000 | 36,157,000 | ||||||||||||
Unallocated Amount to Segment [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Income (loss) before income taxes | (11,085,000) | (11,004,000) | (29,371,000) | (33,963,000) | ||||||||||
Property and equipment, gross | 130,287,000 | 130,287,000 | ||||||||||||
Business Intersegment, Eliminations [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Income (loss) before income taxes | 297,000 | (108,000) | (256,000) | (329,000) | ||||||||||
Reclassification from International to North America Franchising [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Impact of reclassification of franchised restaurants on revenues | 362,000.0 | 1,100,000 | ||||||||||||
Impact of reclassification of franchised restaurants on income before income taxes | $ 302,000 | $ 982,000 | ||||||||||||
|
Commitments and Contingencies | 9 Months Ended |
---|---|
Sep. 25, 2011 | |
Commitments and Contingencies |
7. Commitments and Contingencies
Lease Agreements
As
a condition of the sale of our former Perfect Pizza operations in
the United Kingdom (UK) in March 2006, we remain contingently
liable for payment under approximately 40 lease agreements for
Perfect Pizza’s restaurant sites, for which the Perfect Pizza
franchisees and franchisor are primarily liable. As the initial
party to the lease agreements, we are liable to the extent that the
primary obligor does not satisfy its payment obligations. The
leases have varying terms, the latest of which expires in 2017,
with most expiring by the end of 2014. As of September 25, 2011 the
estimated maximum amount of undiscounted rental payments we would
be required to make in the event of non-payment under all such
leases was approximately $2.5 million, excluding the $782,000
charge discussed below.
On
August 1, 2011 the High Court of Justice Chancery Division,
Birmingham District Registry entered an order placing Perfect Pizza
in administration, thereby providing Perfect Pizza with protection
from its creditors in accordance with UK insolvency law. On the
same date, the administrators entered into an agreement to sell
substantially all of the business and assets of Perfect Pizza. In
accordance with the terms of the agreement, the buyer has an option
period of up to nine months to determine which Perfect Pizza leases
they will assume.
The
buyer is continuing to assess most restaurant leases but has
identified certain leases that will likely not be assumed.
Accordingly, for the three and nine months ended September 25,
2011, we recorded an expense of $782,000 in other general expenses
in the accompanying Consolidated Statements of Income, representing
the remaining rentals, taxes and insurance related to these
specific leases. Given the uncertainty of the remaining restaurant
locations, we are unable to reasonably estimate any potential
additional liability for those locations and therefore no amount
has been recorded in the consolidated financial statements as of
September 25, 2011 with respect to the remaining restaurant
locations.
Contingencies
We
are subject to claims and legal actions in the ordinary course of
business. We believe that all such claims and actions currently
pending against us are either adequately covered by insurance or
would not have a material adverse effect on us if decided in a
manner unfavorable to us.
|
Accounting for Variable Interest Entities | 9 Months Ended | ||
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Sep. 25, 2011 | |||
Accounting for Variable Interest Entities |
The
Consolidation topic of the ASC provides a framework for identifying
variable interest entities (VIEs) and determining when a company
should include the assets, liabilities, noncontrolling interests
and results of activities of a VIE in its consolidated financial
statements.
In
general, a VIE is a corporation, partnership, limited liability
company, trust, or any other legal structure used to conduct
activities or hold assets that either (1) has an insufficient
amount of equity to carry out its principal activities without
additional subordinated financial support, (2) has a group of
equity owners that are unable to make significant decisions about
its activities, or (3) has a group of equity owners that do not
have the obligation to absorb losses or the right to receive
returns generated by its operations.
Consolidation
of a VIE is required if a party with an ownership, contractual or
other financial interest in the VIE (“a variable interest
holder”) is obligated to absorb a majority of the risk of
loss from the VIE’s activities, is entitled to receive a
majority of the VIE’s residual returns (if no party absorbs a
majority of the VIE’s losses), or both. A variable interest
holder that consolidates the VIE is called the primary beneficiary.
Upon consolidation, the primary beneficiary generally must
initially record all of the VIE’s assets, liabilities and
noncontrolling interests at fair value and subsequently account for
the VIE as if it were consolidated based on majority voting
interest. The variable interest holder is also required to make
disclosures about VIEs in which it has a significant variable
interest even when it is not required to consolidate.
Through
February 2011, we had a cheese purchasing arrangement with BIBP
Commodities, Inc. (BIBP), a special-purpose entity formed at the
direction of our Franchise Advisory Council, for the sole purpose
of reducing cheese price volatility to domestic system-wide
restaurants. BIBP was an independent, franchisee-owned corporation.
BIBP purchased cheese at the market price and sold it to our
distribution subsidiary, PJ Food Service, Inc.
(“PJFS”), at a fixed price. PJFS in turn sold cheese to
Papa John’s restaurants (both domestic Company-owned and
franchised) at a fixed monthly price. PJFS purchased $25.1 million
of cheese from BIBP for the three months ended March 27, 2011 and
purchased $37.1 million and $113.6 million of cheese for the three
and nine months ended September 26, 2010, respectively. PJFS
terminated its purchasing agreement with BIBP in February 2011 as
described below.
Prior
to the termination of the purchasing agreement with BIBP, we
recognized the operating losses generated by BIBP when BIBP’s
shareholders’ equity was in a net deficit position. Further,
we recognized the subsequent operating income generated by BIBP up
to the amount of any losses previously recognized. Prior to ceasing
operating activities, BIBP operated at breakeven for the three
months ended March 27, 2011. We recognized a pre-tax loss of
$658,000 ($417,000 net of tax, or $0.02 per diluted share) and
pre-tax income of $5.5 million ($3.5 million net of tax, or $0.13
per diluted share) for the three and nine months ended September
26, 2010, respectively, from the consolidation of
BIBP.
In
February 2011, we terminated the purchasing agreement with BIBP and
BIBP no longer has operating activities. Over 99% of our domestic
franchisees have entered into a cheese purchasing agreement with
PJFS. The cheese purchasing agreement requires participating
domestic franchisees to purchase cheese through PJFS, or to pay the
franchisee’s portion of any accumulated cheese liability upon
ceasing to purchase cheese from PJFS when a liability exists. The
cheese purchasing agreement specifies that PJFS will charge the
franchisees a predetermined price for cheese on a monthly basis.
Any difference between the amount charged to franchisees and the
actual price paid by PJFS for cheese is recorded as a receivable
from or a payable to the franchisees, to be repaid based upon a
predetermined formula outlined in the agreement.
|
Segment Information - Narrative (Detail) | Sep. 25, 2011
Entity |
---|---|
Segment Reporting Information [Line Items] | |
Reportable segments, number | 6 |
Concentration risk, percentage | 10.00% |
Concentration risk, number | 0 |
Debt | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 25, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt |
4. Debt
Our
debt is comprised of the following (in thousands):
In
September 2010, we entered into a five-year, unsecured Revolving
Credit Facility (“New Credit Facility”) totaling $175.0
million that replaced a $175.0 million unsecured Revolving Credit
Facility (“Old Credit Facility”). Under the New Credit
Facility, outstanding balances accrue interest at 100.0 to 175.0
basis points over the London Interbank Offered Rate (LIBOR) or
other bank-developed rates, at our option. The commitment fee on
the unused balance ranges from 17.5 to 25.0 basis points. The
increment over LIBOR and the commitment fee are determined
quarterly based upon the ratio of total indebtedness to earnings
before interest, taxes, depreciation and amortization (EBITDA), as
defined in the New Credit Facility. Outstanding balances under the
Old Credit Facility accrued interest at 50.0 to 100.0 basis points
over LIBOR or other bank developed rates, at our option. The
commitment fee on the unused balance ranged from 12.5 to 20.0 basis
points. The remaining availability under our New Credit Facility,
reduced for certain outstanding letters of credit, was $111.6
million as of September 25, 2011 and $59.1 million as of December
26, 2010. The fair value of our outstanding debt approximates the
carrying value since our debt agreements are variable-rate
instruments.
The
New Credit Facility contains customary affirmative and negative
covenants, including financial covenants requiring the maintenance
of specified fixed charges and leverage ratios. We were in
compliance with all covenants at September 25, 2011 and December
26, 2010.
In
August 2011, we entered into a new interest rate swap agreement
that provides for a fixed rate of 0.53%, as compared to LIBOR, with
a notional amount of $50.0 million. The new interest rate swap
agreement expires in August 2013. We had two interest rate swap
agreements that expired in January 2011. The previous swap
agreements provided for fixed rates of 4.98% and 3.74%, as compared
to LIBOR, with each having a notional amount of $50.0
million.
Our
swaps are derivative instruments that are designated as cash flow
hedges because the swaps provide a hedge against the effects of
rising interest rates on present and/or forecasted future
borrowings. The effective portion of the gain or loss on the swap
is reported as a component of accumulated other comprehensive
income (loss) and reclassified into earnings in the same period or
periods during which the hedge affects earnings. Gains or losses on
a swap representing either hedge ineffectiveness or hedge
components excluded from the assessment of effectiveness are
recognized in current earnings. Amounts payable or receivable under
the swap are accounted for as adjustments to interest expense. As
of September 25, 2011, the swap is an effective cash flow
hedge.
The
swaps are recorded in other long-term liabilities with fair values
of $147,000 and $313,000 as of September 25, 2011 and December 26,
2010, respectively. As of September 25, 2011, the portion of the
$147,000 interest rate swap liability that would be reclassified
into earnings during the next twelve months as interest expense
approximates $76,000.
There
were no derivatives that were not designated as hedging instruments
under the provisions of the ASC topic, Derivatives and
Hedging.
Interest
expense for the swaps was $12,000 and $1.0 million for the three
months ended September 25, 2011 and September 26, 2010,
respectively, and $305,000 and $3.1 million for the nine months
ended September 25, 2011 and September 26, 2010,
respectively.
The
weighted average interest rates for our Revolving Credit
Facilities, including the impact of the previously mentioned swap
agreements were 1.29% and 5.20% for the three months ended
September 25, 2011 and September 26, 2010, respectively, and 2.04%
and 5.09% for the nine months ended September 25, 2011 and
September 26, 2010, respectively. Interest paid, including payments
made or received under the swaps, was $230,000 and $1.4 million for
the three months ended September 25, 2011 and September 26, 2010,
respectively, and $1.4 million and $4.0 million for the nine months
ended September 25, 2011 and September 26, 2010,
respectively.
|
Calculation of Earnings Per Share - Narrative (Detail) (Stock Options [Member]) | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 25, 2011 | Sep. 26, 2010 | Sep. 25, 2011 | Sep. 26, 2010 | |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 207,000.0 | 1,700,000 | 306,000.0 | 1,500,000 |
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