UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
Current Report
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported):
November
3, 2015
Commission File Number: 0-21660
PAPA JOHN’S INTERNATIONAL, INC.
(Exact
name of registrant as specified in its charter)
Delaware |
61-1203323 |
(State or other jurisdiction of |
(I.R.S. Employer Identification |
incorporation or organization) |
Number) |
2002 Papa Johns Boulevard
Louisville,
Kentucky 40299-2367
(Address
of principal executive offices)
(502) 261-7272
(Registrant’s
telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section 2 – Financial Information
Item 2.02 Results of Operations and Financial Condition
On November 3, 2015, Papa John’s International, Inc. issued a press release announcing third quarter 2015 financial results.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit |
|
Number |
Description |
99.1 | Papa John’s International, Inc. press release dated November 3, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PAPA JOHN’S INTERNATIONAL, INC. |
|
(Registrant) |
|
Date: November 3, 2015 |
/s/ Lance F. Tucker |
Lance F. Tucker | |
Senior Vice President, Chief Financial |
EXHIBIT INDEX
Exhibit |
Description of Exhibit | |
99.1 |
Papa John’s International, Inc. press release dated November 3, 2015. |
Exhibit 99.1
Papa John’s Announces Third Quarter 2015 Results
LOUISVILLE, Ky.--(BUSINESS WIRE)--November 3, 2015--Papa John’s International, Inc. (NASDAQ: PZZA) today announced financial results for the three and nine months ended September 27, 2015.
Highlights
“I’d like to congratulate our operators and team members on another solid quarter of sales, earnings and unit growth,” said Papa John’s founder, chairman and CEO John Schnatter. “The team delivered solid comp sales in the third quarter, and we again posted exceptional double-digit two year comp sales in both our domestic and international businesses. Our unwavering focus on quality, combined with our strong digital channels, continues to drive the Papa John’s brand forward.”
Third quarter 2015 revenues were $389.3 million, a 0.3% decrease from third quarter 2014 revenues of $390.4 million. The lower revenues were primarily due to anticipated lower point-of-sale system (“FOCUS”) equipment sales as the rollout is now complete as well as lower PJ Food Service (“PJFS”) sales from lower commodity costs. Third quarter 2015 net income was $18.0 million, compared to third quarter 2014 net income of $16.1 million. Third quarter 2015 diluted earnings per share were $0.45, or a 15.4% increase, compared to third quarter 2014 diluted earnings per share of $0.39.
Revenues were $1.22 billion for the nine months ended September 27, 2015, a 4.1% increase from revenues of $1.17 billion for the same period in 2014. Net income was $51.0 million for the first nine months of 2015 ($59.0 million, or a 13.1% increase, excluding the after-tax expense of a legal settlement as detailed in the “Item Impacting Comparability” table), compared to $52.1 million for the same period in 2014. Diluted earnings per share were $1.27 for the first nine months of 2015 ($1.47, or a 19.5% increase, excluding the prior quarter legal settlement), compared to $1.23 for the same period in 2014.
Global Restaurant and Comparable Sales Information |
||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
Sept. 27, |
Sept. 28, |
Sept. 27, |
Sept. 28, |
|||||||||||||
Global restaurant sales growth (a) | 3.9 | % | 10.2 | % | 5.9 | % | 11.0 | % | ||||||||
Global restaurant sales growth, excluding the impact of foreign currency (a) |
7.0 | % | 10.7 | % | 8.5 | % | 11.5 | % | ||||||||
Comparable sales growth (b) | ||||||||||||||||
Domestic company-owned restaurants | 4.7 | % | 8.3 | % | 6.8 | % | 9.1 | % | ||||||||
North America franchised restaurants | 2.4 | % | 7.1 | % | 4.4 | % | 7.2 | % | ||||||||
System-wide North America restaurants | 3.0 | % | 7.4 | % | 5.0 | % | 7.7 | % | ||||||||
System-wide international restaurants | 8.0 | % | 5.5 | % | 7.5 | % | 6.9 | % |
(a) | Includes both company-owned and franchised restaurant sales. | |
(b) | Represents the change in year-over-year sales for the same base of restaurants for the same fiscal periods. Comparable sales results for restaurants operating outside of the United States are reported on a constant dollar basis, which excludes the impact of foreign currency translation. | |
We believe global restaurant and comparable sales growth information, as defined in the table above, is useful in analyzing our results since our franchisees pay royalties that are based on a percentage of franchise sales. Franchise sales generate commissary revenue in the United States and in certain international markets. Global restaurant and comparable sales growth information is also useful in analyzing industry trends and the strength of our brand. Management believes the presentation of global restaurant sales growth, excluding the impact of foreign currency, provides investors with useful information regarding underlying sales trends by presenting sales growth excluding the external factor of foreign currency exchange. Franchise restaurant sales are not included in company revenues.
Revenue and Operating Highlights
All revenue and operating highlights below are compared to the same period of the prior year, unless otherwise noted.
Revenue Highlights
Consolidated revenues decreased $1.1 million, or 0.3%, for the third quarter of 2015 and increased $47.9 million, or 4.1%, for the nine months ended September 27, 2015. The decrease for the three-month period was primarily due to the anticipated lower FOCUS equipment sales as the rollout is now complete as well as lower PJFS sales from lower commodity costs. The following summarizes changes in our revenues for the three- and nine-month periods:
Operating Highlights
The tables below summarize income before income taxes on a reporting segment basis and exclude the previously mentioned legal settlement (as detailed in the “Item Impacting Comparability” section) for the three- and nine-month periods of 2015:
Three Months Ended | |||||||||||||||||||||||
Sept. 27, | Sept. 28, | Increase | |||||||||||||||||||||
(In thousands) | 2015 | 2014 | (Decrease) | ||||||||||||||||||||
Domestic company-owned restaurants | $ | 8,088 | $ | 8,133 | $ | (45 | ) | ||||||||||||||||
Domestic commissaries | 10,192 | 8,897 | 1,295 | ||||||||||||||||||||
North America franchising | 19,172 | 19,023 | 149 | ||||||||||||||||||||
International | 3,184 | 1,436 | 1,748 | ||||||||||||||||||||
All others | (556 | ) | (298 | ) | (258 | ) | |||||||||||||||||
Unallocated corporate expenses | (13,482 | ) | (12,242 | ) | (1,240 | ) | |||||||||||||||||
Elimination of intersegment profits | (341 | ) | (731 | ) | 390 | ||||||||||||||||||
Total income before income taxes | $ | 26,257 | $ | 24,218 | $ | 2,039 | |||||||||||||||||
Nine Months Ended | ||||||||||||||||||||||||||||||||||||
As Reported | Legal | Adjusted | Adjusted | |||||||||||||||||||||||||||||||||
Sept. 27, | Settlement | Sept. 27, | Sept. 28, | Increase | ||||||||||||||||||||||||||||||||
(In thousands) | 2015 | expense | 2015 | 2014 | (Decrease) | |||||||||||||||||||||||||||||||
Domestic company-owned restaurants | $ | 41,185 | $ | - | $ | 41,185 | $ | 32,069 | $ | 9,116 | ||||||||||||||||||||||||||
Domestic commissaries | 32,694 | - | 32,694 | 26,174 | 6,520 | |||||||||||||||||||||||||||||||
North America franchising | 61,545 | - | 61,545 | 56,389 | 5,156 | |||||||||||||||||||||||||||||||
International | 6,807 | - | 6,807 | 4,071 | 2,736 | |||||||||||||||||||||||||||||||
All others | (230 | ) | - | (230 | ) | (150 | ) | (80 | ) | |||||||||||||||||||||||||||
Unallocated corporate expenses | (60,636 | ) | 12,278 | (48,358 | ) | (35,405 | ) | (12,953 | ) | |||||||||||||||||||||||||||
Elimination of intersegment profits | (1,141 | ) | - | (1,141 | ) | (1,284 | ) | 143 | ||||||||||||||||||||||||||||
Total income before income taxes | $ | 80,224 | $ | 12,278 | $ | 92,502 | $ | 81,864 | $ | 10,638 | ||||||||||||||||||||||||||
Third quarter 2015 income before income taxes increased approximately $2.0 million, or 8.4%. This increase was primarily due to the following:
These increases were partially offset by higher unallocated corporate expenses of approximately $1.2 million primarily due to higher health insurance claims costs.
Income before income taxes increased $10.6 million, or 13.0%, for the nine-month period ended September 27, 2015, excluding the $12.3 million legal settlement. This increase was primarily due to the same reasons noted for the quarter, except for the following:
The effective income tax rates were 27.7% and 30.6% for the three and nine months ended September 27, 2015, representing decreases of 2.2% and 1.8% for the three- and nine-month periods, respectively. The rates for 2015 include higher benefits from various tax deductions and credits.
The company’s free cash flow, a non-GAAP financial measure, for the first nine months of 2015 and 2014, was as follows (in thousands):
Nine Months Ended | ||||||||||||||
Sept. 27, | Sept. 28, | |||||||||||||
2015 | 2014 | |||||||||||||
Net cash provided by operating activities (a) | $ | 119,738 | $ | 84,826 | ||||||||||
Purchases of property and equipment (b) | (26,508 | ) | (37,700 | ) | ||||||||||
Free cash flow | $ | 93,230 | $ | 47,126 | ||||||||||
(a) | The increase of approximately $34.9 million was primarily due to higher operating income and favorable changes in inventory and other working capital items. The prior year included higher inventory levels of equipment to support the rollout of FOCUS to our domestic franchised restaurants. The Legal Settlement does not currently impact cash provided by operating activities as it has not been paid. Payments will begin in 2016 following court approval. | |
(b) | The decrease of approximately $11.2 million is primarily due to the prior year including FOCUS equipment costs for domestic Company-owned restaurants and higher levels of FOCUS software development costs. | |
We define free cash flow as net cash provided by operating activities (from the consolidated statements of cash flows) less the amounts spent on the purchase of property and equipment. We view free cash flow as an important measure because it is a factor that management uses in determining the amount of cash available for dividends, share repurchases and discretionary investment. Free cash flow is not a term defined by GAAP, and as a result, our measure of free cash flow might not be comparable to similarly titled measures used by other companies. Free cash flow should not be construed as a substitute for or a better indicator of the company’s performance than the company’s GAAP measures.
See the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC) for additional information concerning our operating results and cash flow for the three and nine months ended September 27, 2015.
Global Restaurant Unit Data
At September 27, 2015, there were 4,786 Papa John’s restaurants operating in all 50 states and in 38 international countries and territories, as follows:
Domestic |
Franchised |
Total North |
International | System-wide | ||||||||||||||||||||||||||
Third Quarter |
||||||||||||||||||||||||||||||
Beginning - June 28, 2015 | 693 | 2,653 | 3,346 | 1,388 | 4,734 | |||||||||||||||||||||||||
Opened | 4 | 31 | 35 | 50 | 85 | |||||||||||||||||||||||||
Closed | - | (20 | ) | (20 | ) | (13 | ) | (33 | ) | |||||||||||||||||||||
Ending - September 27, 2015 | 697 | 2,664 | 3,361 | 1,425 | 4,786 | |||||||||||||||||||||||||
Year-to-date |
||||||||||||||||||||||||||||||
Beginning - December 28, 2014 | 686 | 2,654 | 3,340 | 1,323 | 4,663 | |||||||||||||||||||||||||
Opened | 8 | 68 | 76 | 142 | 218 | |||||||||||||||||||||||||
Closed | - | (55 | ) | (55 | ) | (40 | ) | (95 | ) | |||||||||||||||||||||
Acquired (divested) | 3 | (3 | ) | - | - | - | ||||||||||||||||||||||||
Ending - September 27, 2015 | 697 | 2,664 | 3,361 | 1,425 | 4,786 | |||||||||||||||||||||||||
Unit growth | 11 | 10 | 21 | 102 | 123 | |||||||||||||||||||||||||
% increase | 1.6 | % | 0.4 | % | 0.6 | % | 7.7 | % | 2.6 | % | ||||||||||||||||||||
Our development pipeline as of September 27, 2015 included approximately 1,220 restaurants (250 units in North America and 970 units internationally), the majority of which are scheduled to open over the next six years.
Item Impacting Comparability
The following table reconciles our GAAP financial results to our adjusted financial results, which are non-GAAP measures, for the three and nine month periods ended September 27, 2015:
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
Sept. 27, | Sept. 28, | Sept. 27, | Sept. 28, | |||||||||||||||||||||
(In thousands, except per share amounts) | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Income before income taxes, as reported | $ | 26,257 | $ | 24,218 | $ | 80,224 | $ | 81,864 | ||||||||||||||||
Legal Settlement expense | - | - | 12,278 | - | ||||||||||||||||||||
Income before income taxes, as adjusted | $ | 26,257 | $ | 24,218 | $ | 92,502 | $ | 81,864 | ||||||||||||||||
Net income, as reported | $ | 17,971 | $ | 16,075 | $ | 50,987 | $ | 52,134 | ||||||||||||||||
Legal Settlement expense | - | - | 7,986 | - | ||||||||||||||||||||
Net income, as adjusted | $ | 17,971 | $ | 16,075 | $ | 58,973 | $ | 52,134 | ||||||||||||||||
Diluted earnings per share, as reported | $ | 0.45 | $ | 0.39 | $ | 1.27 | $ | 1.23 | ||||||||||||||||
Legal Settlement expense | - | - | 0.20 | - | ||||||||||||||||||||
Diluted earnings per share, as adjusted | $ | 0.45 | $ | 0.39 | $ | 1.47 | $ | 1.23 | ||||||||||||||||
The Legal Settlement expense represents a pre-tax expense of $12.3 million for a legal settlement preliminarily approved by the court and recorded in the quarter ended June 28, 2015. This collective and class action, Perrin v. Papa John’s International, Inc. and Papa John’s USA, Inc., which included approximately 19,000 drivers, alleged delivery drivers were not reimbursed in accordance with the Fair Labor Standards Act. The Company continues to deny any liability or wrongdoing in this matter.
The non-GAAP results shown above, which exclude the legal settlement, should not be construed as a substitute for or a better indicator of the company’s performance than the company’s GAAP results. Management believes presenting the financial information excluding the legal settlement is important for purposes of comparison to prior year results. In addition, management uses this metric to evaluate the company’s underlying operating performance and to analyze trends.
Share Repurchase Activity
In October 2015, the company’s Board of Directors approved a $125 million increase in the amount of common stock that may be purchased under the company’s share repurchase program through December 31, 2016, bringing the total authorized under the program to $1.45 billion since its inception in 1999. Approximately $161.1 million remains available under the company’s share repurchase program as of October 27, 2015.
The following table reflects our repurchases for the three and nine months ended September 27, 2015 and subsequent repurchases through October 27, 2015 (in thousands):
Period |
Number of |
Cost | |||||||||||
Three Months Ended September 27, 2015 | 390 | $ | 28,083 | ||||||||||
Nine Months Ended September 27, 2015 | 1,208 | $ | 80,166 | ||||||||||
September 28, 2015 through October 27, 2015 | 192 | $ | 13,167 | ||||||||||
There were 39.9 million and 40.2 million diluted weighted average shares outstanding for the three and nine months ended September 27, 2015, representing decreases of 3.6% and 4.3%, respectively, over the prior year comparable periods. Diluted earnings per share increased $0.02 and $0.07, respectively, for the three and nine months ended September 27, 2015 due to the reduction in shares outstanding, primarily resulting from the share repurchase program. Approximately 39.2 million actual shares of the company’s common stock were outstanding as of September 27, 2015.
China Operations
The company has decided to refranchise the China market and is planning a sale of its existing China operations, consisting of company-owned restaurants and a commissary. The restaurants are located in both Beijing and Tianjin, China. A buyer has not yet been identified. See the “Notes to Condensed Consolidated Financial Statements” in our Quarterly Report on Form 10-Q filed with the SEC on November 3, 2015 for additional information.
2015 Guidance Update
Despite the higher insurance costs, the company is reaffirming its current 2015 diluted earnings per share guidance range of $2.04 to $2.10, excluding the $0.20 impact of the legal settlement, but expects to be near the low end of the range. Additionally, net unit openings are expected to be at the low end of the 2015 guidance range of 220 to 250, with approximately 75% of the net unit growth in International markets.
Conference Call
A conference call is scheduled for November 4, 2015 at 10:00 a.m. Eastern Time to review our third quarter 2015 earnings results. The call can be accessed from the company’s web page at www.papajohns.com in a listen-only mode, or dial 877-312-8816 (U.S. and Canada) or 253-237-1189 (international). The conference call will be available for replay, including by downloadable podcast, from the company’s web site at www.papajohns.com. The Conference ID is 45359098.
Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We intend to use our investor relations website as a means of disclosing information about our business, our financial condition and results of operations and other matters and for complying with our disclosure obligations under Regulation FD. The information we post on our investor relations website, including information contained in investor presentations, may be deemed material. Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings and public conference calls and webcasts. We encourage investors and others to sign up for email alerts at our investor relations page under Shareholder Tools at the bottom right side of the page. These email alerts are intended to help investors and others to monitor our investor relations website by notifying them when new information is posted on the site.
Forward-Looking Statements
Certain matters discussed in this press release and other company communications constitute forward-looking statements within the meaning of the federal securities laws. Generally, the use of words such as “expect,” “estimate,” “believe,” “anticipate,” “will,” “forecast,” “plan,” “project,” or similar words identify forward-looking statements that we intend to be included within the safe harbor protections provided by the federal securities laws. Such forward-looking statements may relate to projections or guidance concerning business performance, revenue, earnings, contingent liabilities, resolution of litigation, commodity costs, profit margins, unit growth, capital expenditures, and other financial and operational measures. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements. The risks, uncertainties and assumptions that are involved in our forward-looking statements include, but are not limited to:
These and other risk factors are discussed in detail in “Part I. Item 1A. – Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2014. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise, except as required by law.
For more information about the company, please visit www.papajohns.com.
Papa John’s International, Inc. and Subsidiaries |
||||||||||||||||||||||||
Condensed Consolidated Statements of Income | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
Sept. 27, 2015 | Sept. 28, 2014 | Sept. 27, 2015 | Sept. 28, 2014 | |||||||||||||||||||||
(In thousands, except per share amounts) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
North America: | ||||||||||||||||||||||||
Domestic company-owned restaurant sales | $ | 180,059 | $ | 169,076 | $ | 563,308 | $ | 517,269 | ||||||||||||||||
Franchise royalties | 22,079 | 22,131 | 70,519 | 65,728 | ||||||||||||||||||||
Franchise and development fees | 206 | 217 | 666 | 493 | ||||||||||||||||||||
Domestic commissary sales | 145,863 | 149,224 | 457,203 | 463,852 | ||||||||||||||||||||
Other sales | 14,076 | 23,359 | 50,110 | 49,704 | ||||||||||||||||||||
International: | ||||||||||||||||||||||||
Royalties and franchise and development fees | 6,755 | 6,673 | 19,894 | 18,769 | ||||||||||||||||||||
Restaurant and commissary sales | 20,246 | 19,719 | 58,859 | 56,825 | ||||||||||||||||||||
Total revenues | 389,284 | 390,399 | 1,220,559 | 1,172,640 | ||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||
Domestic company-owned restaurant expenses: | ||||||||||||||||||||||||
Cost of sales | 42,150 | 42,460 | 132,943 | 129,646 | ||||||||||||||||||||
Salaries and benefits | 50,229 | 45,835 | 155,389 | 139,223 | ||||||||||||||||||||
Advertising and related costs | 16,293 | 15,369 | 49,555 | 46,979 | ||||||||||||||||||||
Occupancy costs and other restaurant operating expenses | 39,864 | 35,687 | 113,037 | 104,951 | ||||||||||||||||||||
Total domestic company-owned restaurant expenses | 148,536 | 139,351 | 450,924 | 420,799 | ||||||||||||||||||||
Domestic commissary expenses: | ||||||||||||||||||||||||
Cost of sales | 111,205 | 116,908 | 350,108 | 364,302 | ||||||||||||||||||||
Salaries and benefits and other commissary operating expenses | 24,029 | 22,221 | 72,420 | 68,162 | ||||||||||||||||||||
Total domestic commissary expenses | 135,234 | 139,129 | 422,528 | 432,464 | ||||||||||||||||||||
Other operating expenses | 13,475 | 22,794 | 47,726 | 47,446 | ||||||||||||||||||||
International restaurant and commissary expenses | 16,481 | 16,605 | 48,209 | 47,366 | ||||||||||||||||||||
General and administrative expenses | 36,053 | 33,671 | 120,029 | 104,199 | ||||||||||||||||||||
Other general expenses | 1,607 | 3,143 | 4,427 | 6,640 | ||||||||||||||||||||
Depreciation and amortization | 10,461 | 10,520 | 30,638 | 29,539 | ||||||||||||||||||||
Total costs and expenses | 361,847 | 365,213 | 1,124,481 | 1,088,453 | ||||||||||||||||||||
Operating income | 27,437 | 25,186 | 96,078 | 84,187 | ||||||||||||||||||||
Legal settlement expense | - | - | (12,278 | ) | - | |||||||||||||||||||
Net interest expense | (1,180 | ) | (968 | ) | (3,576 | ) | (2,323 | ) | ||||||||||||||||
Income before income taxes | 26,257 | 24,218 | 80,224 | 81,864 | ||||||||||||||||||||
Income tax expense | 7,281 | 7,256 | 24,541 | 26,522 | ||||||||||||||||||||
Net income before attribution to noncontrolling interests | 18,976 | 16,962 | 55,683 | 55,342 | ||||||||||||||||||||
Income attributable to noncontrolling interests | (1,005 | ) | (887 | ) | (4,696 | ) | (3,208 | ) | ||||||||||||||||
Net income attributable to the company | $ | 17,971 | $ | 16,075 | $ | 50,987 | $ | 52,134 | ||||||||||||||||
Calculation of income for earnings per share: | ||||||||||||||||||||||||
Net income attributable to the company | $ | 17,971 | $ | 16,075 | $ | 50,987 | $ | 52,134 | ||||||||||||||||
Decrease (increase) in noncontrolling interest redemption value | 49 | (42 | ) | 192 | (81 | ) | ||||||||||||||||||
Net income attributable to participating securities | (73 | ) | (77 | ) | (223 | ) | (295 | ) | ||||||||||||||||
Net income attributable to common shareholders | $ | 17,947 | $ | 15,956 | $ | 50,956 | $ | 51,758 | ||||||||||||||||
Basic earnings per common share | $ | 0.46 | $ | 0.39 | $ | 1.29 | $ | 1.25 | ||||||||||||||||
Diluted earnings per common share | $ | 0.45 | $ | 0.39 | $ | 1.27 | $ | 1.23 | ||||||||||||||||
Basic weighted average common shares outstanding | 39,394 | 40,739 | 39,640 | 41,248 | ||||||||||||||||||||
Diluted weighted average common shares outstanding | 39,895 | 41,386 | 40,210 | 42,021 | ||||||||||||||||||||
Dividends declared per common share | $ | 0.175 | $ | 0.14 | $ | 0.455 | $ | 0.39 | ||||||||||||||||
Papa John’s International, Inc. and Subsidiaries |
||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||
September 27, | December 28, | |||||||||||
2015 | 2014 | |||||||||||
(In thousands) | (Unaudited) | (Note) | ||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 24,441 | $ | 20,122 | ||||||||
Accounts receivable, net | 56,445 | 56,047 | ||||||||||
Notes receivable, net | 7,738 | 6,106 | ||||||||||
Income taxes receivable | 796 | 9,527 | ||||||||||
Inventories | 24,335 | 27,394 | ||||||||||
Deferred income taxes | 9,990 | 8,248 | ||||||||||
Prepaid expenses and other current assets | 25,376 | 28,564 | ||||||||||
Assets held for sale | 9,555 | - | ||||||||||
Total current assets | 158,676 | 156,008 | ||||||||||
Property and equipment, net | 209,137 | 219,457 | ||||||||||
Notes receivable, less current portion, net | 10,444 | 12,801 | ||||||||||
Goodwill | 79,913 | 82,007 | ||||||||||
Deferred income taxes | 3,021 | 3,914 | ||||||||||
Other assets | 33,426 | 38,616 | ||||||||||
Total assets | $ | 494,617 | $ | 512,803 | ||||||||
Liabilities and stockholders’ equity |
||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 35,546 | $ | 38,832 | ||||||||
Income and other taxes payable | 10,012 | 9,637 | ||||||||||
Accrued expenses and other current liabilities | 78,562 | 58,293 | ||||||||||
Total current liabilities | 124,120 | 106,762 | ||||||||||
Deferred revenue | 3,627 | 4,257 | ||||||||||
Long-term debt | 239,000 | 230,451 | ||||||||||
Deferred income taxes | 14,251 | 22,188 | ||||||||||
Other long-term liabilities | 44,034 | 41,875 | ||||||||||
Total liabilities | 425,032 | 405,533 | ||||||||||
Redeemable noncontrolling interests | 8,274 | 8,555 | ||||||||||
Total stockholders’ equity |
61,311 | 98,715 | ||||||||||
Total liabilities, redeemable noncontrolling interests and stockholders’ equity |
$ | 494,617 | $ | 512,803 | ||||||||
Note: The Condensed Consolidated Balance Sheet has been derived from the audited consolidated financial statements, 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. |
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Papa John’s International, Inc. and Subsidiaries |
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Consolidated Statements of Cash Flows | ||||||||||||||
Nine Months Ended | ||||||||||||||
(In thousands) | September 27, 2015 | September 28, 2014 | ||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||
Operating activities | ||||||||||||||
Net income before attribution to noncontrolling interests | $ | 55,683 | $ | 55,342 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Provision for uncollectible accounts and notes receivable | 813 | 1,714 | ||||||||||||
Depreciation and amortization | 30,638 | 29,539 | ||||||||||||
Deferred income taxes | 2,259 | 7,687 | ||||||||||||
Stock-based compensation expense | 7,124 | 5,958 | ||||||||||||
Excess tax benefit on equity awards | (9,884 | ) | (8,493 | ) | ||||||||||
Other | 3,268 | 3,916 | ||||||||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||
Accounts receivable | (1,994 | ) | (6,861 | ) | ||||||||||
Income taxes receivable | 8,731 | - | ||||||||||||
Inventories | 2,178 | (9,792 | ) | |||||||||||
Prepaid expenses and other current assets | 2,400 | 2,148 | ||||||||||||
Other assets and liabilities | 819 | 3,887 | ||||||||||||
Accounts payable | (3,380 | ) | (1,380 | ) | ||||||||||
Income taxes and other taxes payable | 375 | 6,434 | ||||||||||||
Accrued expenses and other current liabilities | 20,508 | (5,163 | ) | |||||||||||
Deferred revenue | 200 | (110 | ) | |||||||||||
Net cash provided by operating activities | 119,738 | 84,826 | ||||||||||||
Investing activities | ||||||||||||||
Purchases of property and equipment | (26,508 | ) | (37,700 | ) | ||||||||||
Loans issued | (2,497 | ) | (5,221 | ) | ||||||||||
Repayments of loans issued | 3,961 | 3,371 | ||||||||||||
Acquisitions, net of cash acquired | (491 | ) | (4,264 | ) | ||||||||||
Other | 406 | 25 | ||||||||||||
Net cash used in investing activities | (25,129 | ) | (43,789 | ) | ||||||||||
Financing activities | ||||||||||||||
Net proceeds on line of credit facility | 8,549 | 66,784 | ||||||||||||
Cash dividends paid | (17,950 | ) | (16,119 | ) | ||||||||||
Excess tax benefit on equity awards | 9,884 | 8,493 | ||||||||||||
Tax payments for equity award issuances | (10,947 | ) | (7,540 | ) | ||||||||||
Proceeds from exercise of stock options | 4,569 | 4,752 | ||||||||||||
Acquisition of Company common stock | (80,166 | ) | (94,152 | ) | ||||||||||
Contributions from noncontrolling interest holders | 683 | 1,086 | ||||||||||||
Distributions to noncontrolling interest holders | (4,950 | ) | (1,200 | ) | ||||||||||
Other | 377 | 423 | ||||||||||||
Net cash used in financing activities | (89,951 | ) | (37,473 | ) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (339 | ) | (86 | ) | ||||||||||
Change in cash and cash equivalents | 4,319 | 3,478 | ||||||||||||
Cash and cash equivalents at beginning of period | 20,122 | 13,670 | ||||||||||||
Cash and cash equivalents at end of period | $ | 24,441 | $ | 17,148 | ||||||||||
CONTACT:
Papa John’s International, Inc.
Lance Tucker,
502-261-7272
Chief Financial Officer