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):
February
23, 2016
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 February 23, 2016, Papa John’s International, Inc. issued a press release announcing 2015 fourth quarter and full-year financial results and announcing 2016 operating assumptions and earnings guidance.
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 February 23, 2016.
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: February 23, 2016 |
/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 February 23, 2016. |
Exhibit 99.1
Papa John’s Announces Fourth Quarter and Full Year 2015 Results
2016 Operating Assumptions and Earnings Guidance Announced
LOUISVILLE, Ky.--(BUSINESS WIRE)--February 23, 2016--Papa John’s International, Inc. (NASDAQ: PZZA) today announced financial results for the fourth quarter and fiscal year ended December 27, 2015.
Highlights
“I’d like to congratulate our entire team for making 2015 another great year for the Papa John’s brand,” said Papa John’s founder, chairman and CEO John Schnatter. “From continued improvements to our product, to digital innovations, to growing our international footprint – all while again growing EPS nearly 20% and running strong positive comp sales – this year has left us tremendously well-positioned entering 2016.”
Fourth quarter 2015 revenues were $416.8 million, a 2.0% decrease from fourth quarter 2014 revenues of $425.5 million. Fourth quarter 2015 net income increased 16.6% to $24.7 million, compared to fourth quarter 2014 net income of $21.2 million. Fourth quarter 2015 diluted earnings per share were $0.62, or a 19.2% increase, compared to fourth quarter 2014 diluted earnings per share of $0.52.
Full year 2015 revenues were $1.64 billion, a 2.5% increase from 2014 revenues of $1.60 billion. Full year 2015 net income was $75.7 million ($83.7 million, or a 14.1% increase, excluding the after-tax expense of a legal settlement as detailed in the “Item Impacting Comparability” table), compared to 2014 net income of $73.3 million. Full year 2015 diluted earnings per share were $1.89 ($2.09, or a 19.4% increase, excluding the legal settlement), compared to 2014 diluted earnings per share of $1.75.
Global Restaurant and Comparable Sales Information
Three Months Ended | Year Ended | ||||||||||||
Dec. 27, 2015 |
Dec. 28, 2014 |
Dec. 27, 2015 |
Dec. 28, 2014 |
||||||||||
Global restaurant sales growth (a) | 3.4% | 6.6% | 5.3% | 9.8% | |||||||||
Global restaurant sales growth, excluding the impact of foreign currency (a) |
5.7% | 8.2% | 7.8% | 10.6% | |||||||||
Comparable sales growth (b) | |||||||||||||
Domestic company-owned restaurants | 3.4% | 5.9% | 5.9% | 8.2% | |||||||||
North America franchised restaurants | 1.3% | 3.4% | 3.6% | 6.2% | |||||||||
System-wide North America restaurants | 1.9% | 4.1% | 4.2% | 6.7% | |||||||||
System-wide international restaurants | 5.3% | 8.9% | 6.9% | 7.4% | |||||||||
(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 $8.7 million, or 2.0%, for the fourth quarter of 2015 and increased $39.2 million, or 2.5%, for the full year. The decrease for the three-month period was primarily due to lower FOCUS equipment sales, as anticipated, since the rollout is now complete and lower domestic commissary sales from lower commodity costs. The following summarizes changes in our revenues for the fourth quarter and full year:
Operating Highlights
The tables below summarize income before income taxes on a reporting segment basis for the fourth quarter and full year 2015. Full year 2015 adjusted income before income taxes excludes the previously mentioned legal settlement (as detailed in the “Item Impacting Comparability” section).
Three Months Ended | ||||||||||||||
Dec. 27, | Dec. 28, | Increase | ||||||||||||
(In thousands) | 2015 | 2014 | (Decrease) | |||||||||||
Domestic company-owned restaurants | 15,267 | $ | 8,900 | $ | 6,367 | |||||||||
Domestic commissaries | 12,027 | 13,143 | (1,116 | ) | ||||||||||
North America franchising | 21,770 | 20,620 | 1,150 | |||||||||||
International | 4,084 | 3,179 | 905 | |||||||||||
All others | 1,075 | 141 | 934 | |||||||||||
Unallocated corporate expenses | (15,260 | ) | (14,035 | ) | (1,225 | ) | ||||||||
Elimination of intersegment profits | (40 | ) | 443 | (483 | ) | |||||||||
Total income before income taxes | $ | 38,923 | $ | 32,391 | $ | 6,532 | ||||||||
Year Ended | |||||||||||||||||||||
As Reported | Legal | Adjusted | Adjusted | ||||||||||||||||||
Dec. 27, | Settlement | Dec. 27, | Dec. 28, | Increase | |||||||||||||||||
(In thousands) | 2015 | expense | 2015 | 2014 | (Decrease) | ||||||||||||||||
Domestic company-owned restaurants | $ | 56,452 | $ | - | $ | 56,452 | $ | 40,969 | $ | 15,483 | |||||||||||
Domestic commissaries | 44,721 | - | 44,721 | 39,317 | 5,404 | ||||||||||||||||
North America franchising | 83,315 | - | 83,315 | 77,009 | 6,306 | ||||||||||||||||
International | 10,891 | - | 10,891 | 7,250 | 3,641 | ||||||||||||||||
All others | 845 | - | 845 | (9 | ) | 854 | |||||||||||||||
Unallocated corporate expenses | (75,896 | ) | 12,278 | (63,618 | ) | (49,440 | ) | (14,178 | ) | ||||||||||||
Elimination of intersegment profits | (1,181 | ) | - | (1,181 | ) | (841 | ) | (340 | ) | ||||||||||||
Total income before income taxes | $ | 119,147 | $ | 12,278 | $ | 131,425 | $ | 114,255 | $ | 17,170 | |||||||||||
Fourth quarter 2015 income before income taxes increased approximately $6.5 million, or 20.2%. This increase was primarily due to the following:
These increases were partially offset by the following decreases:
Income before income taxes increased $17.2 million, or 15.0%, for the full year 2015, excluding the $12.3 million legal settlement. This increase was primarily due to the following:
These increases were partially offset by higher unallocated corporate expenses of approximately $14.2 million primarily due to higher salaries and benefits, including an increase in health insurance claims costs, as well as increased interest costs associated with higher levels of debt and a higher effective interest rate. In addition, management incentive compensation costs increased in 2015 due to higher annual operating results.
The effective income tax rates were 32.5% and 31.2% for the fourth quarter and full year 2015, respectively, representing an increase of 1.5% for the fourth quarter and a decrease of 0.8% for the full year period. Our effective income tax rate may fluctuate from quarter to quarter for various reasons. The 2015 full year rate includes higher benefits from various tax deductions and credits.
The company’s free cash flow, a non-GAAP financial measure, was as follows (in thousands):
Year Ended | |||||||||
Dec. 27, | Dec. 28, | ||||||||
2015 | 2014 | ||||||||
Net cash provided by operating activities (a) | $ | 160,312 | $ | 122,632 | |||||
Purchases of property and equipment (b) | (38,972 | ) | (48,655 | ) | |||||
Free cash flow | $ | 121,340 | $ | 73,977 | |||||
(a) |
The increase of approximately $37.7 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 impact cash provided by operating activities as it was paid in January 2016. |
||||||||
(b) |
The decrease of approximately $9.7 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 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) for additional information concerning our operating results and cash flow for the full year ended December 27, 2015.
Global Restaurant Unit Data
At December 27, 2015, there were 4,893 Papa John’s restaurants operating in all 50 states and in 39 international countries and territories, as follows:
Domestic Company -owned |
Franchised North America |
Total North America |
International | System-wide | |||||||||||
Fourth Quarter |
|||||||||||||||
Beginning - September 27, 2015 | 697 | 2,664 | 3,361 | 1,425 | 4,786 | ||||||||||
Opened | 8 | 38 | 46 | 93 | 139 | ||||||||||
Closed | (2 | ) | (17 | ) | (19 | ) | (13 | ) | (32 | ) | |||||
Acquired (divested) | 4 | (4 | ) | - | - | - | |||||||||
Ending - December 27, 2015 | 707 | 2,681 | 3,388 | 1,505 | 4,893 | ||||||||||
Year-to-date |
|||||||||||||||
Beginning - December 28, 2014 | 686 | 2,654 | 3,340 | 1,323 | 4,663 | ||||||||||
Opened | 16 | 106 | 122 | 235 | 357 | ||||||||||
Closed | (2 | ) | (72 | ) | (74 | ) | (53 | ) | (127 | ) | |||||
Acquired (divested) | 7 | (7 | ) | - | - | - | |||||||||
Ending - December 27, 2015 | 707 | 2,681 | 3,388 | 1,505 | 4,893 | ||||||||||
Unit growth | 21 | 27 | 48 | 182 | 230 | ||||||||||
% increase | 3.1 | % | 1.0 | % | 1.4 | % | 13.8 | % | 4.9 | % | |||||
Our development pipeline as of December 27, 2015 included approximately 1,140 restaurants (200 units in North America and 940 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 fourth quarter and year ended December 27, 2015:
Three Months Ended | Year Ended | |||||||||||||
Dec. 27, | Dec. 28, | Dec. 27, | Dec. 28, | |||||||||||
(In thousands, except per share amounts) | 2015 | 2014 | 2015 | 2014 | ||||||||||
Income before income taxes, as reported | $ | 38,923 | $ | 32,391 | $ | 119,147 | $ | 114,255 | ||||||
Legal Settlement expense | - | - | 12,278 | - | ||||||||||
Income before income taxes, as adjusted | $ | 38,923 | $ | 32,391 | $ | 131,425 | $ | 114,255 | ||||||
Net income, as reported | $ | 24,695 | $ | 21,181 | $ | 75,682 | $ | 73,315 | ||||||
Legal Settlement expense | - | - | 7,986 | - | ||||||||||
Net income, as adjusted | $ | 24,695 | $ | 21,181 | $ | 83,668 | $ | 73,315 | ||||||
Diluted earnings per share, as reported | $ | 0.62 | $ | 0.52 | $ | 1.89 | $ | 1.75 | ||||||
Legal Settlement expense | - | - | 0.20 | - | ||||||||||
Diluted earnings per share, as adjusted | $ | 0.62 | $ | 0.52 | $ | 2.09 | $ | 1.75 | ||||||
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. The court issued the final approval on January 12, 2016 and the funds were then remitted to the administrator for payment to the class and the plaintiffs’ attorneys. 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 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 February 2016, the company’s Board of Directors approved a $75 million increase in the amount of common stock that may be purchased under the company’s share repurchase program through February 2017, bringing the total authorized under the program to $1.525 billion since its inception in 1999. Approximately $167.1 million remains available under the company’s share repurchase program as of February 16, 2016.
The following table reflects our repurchases for the fourth quarter and full year 2015 and subsequent repurchases through February 16, 2016 (in thousands):
Period |
Number of Shares |
Cost | |||||||
Fourth Quarter 2015 | 637 | $ | 39,627 | ||||||
Full Year 2015 | 1,845 | $ | 119,793 | ||||||
December 28, 2015 through February 16, 2016 | 860 | $ | 42,589 | ||||||
There were 39.4 million and 40.0 million diluted weighted average shares outstanding for the fourth quarter and full year 2015, respectively, representing decreases of 3.5% and 4.1%, respectively, over the prior year comparable periods. Diluted earnings per share increased $0.02 and $0.08, respectively, for the fourth quarter and full year 2015 due to the reduction in shares outstanding, primarily resulting from the share repurchase program. Approximately 38.6 million actual shares of the company’s common stock were outstanding as of December 27, 2015.
2016 Key Operating Assumptions and Earnings Guidance
Earnings per Share (EPS) – The company projects 2016 EPS to increase to a range of $2.30 to $2.40, or increase 10% to 15% over 2015 EPS of $2.09, excluding the legal settlement.
Comparable Restaurant Sales – North America system-wide comparable sales are expected to increase 2% to 4% in 2016. International comparable sales are expected to increase 5% to 7%, on a constant dollar basis, in 2016.
Worldwide Net Unit Growth – Worldwide net unit growth in 2016 is expected to range between 180 and 210 units, with approximately 75% of the net unit growth in International markets.
Revenues – Total consolidated revenues are expected to increase 4% to 6% in 2016.
Income Before Income Taxes Margin – Consolidated income before income taxes margin in 2016 is expected to increase up to 25 basis points over 2015 levels. We are assuming full-year block cheese prices in the low $1.60’s per pound.
Income Tax Rate – The income tax rate in 2016 is expected to range from 31.0% to 32.5%.
Share Repurchases and Debt – The company expects to repurchase shares of its outstanding stock in a range of $100 to $150 million. Debt is expected to range between 1.5x and 2.0x 2016 earnings before interest, taxes, depreciation and amortization (“EBITDA”).
Capital Expenditures – Capital expenditures for 2016 are expected to approximate $55 to $60 million. This includes a new domestic commissary in the Southeast Region to be completed in 2017, company-owned unit development in the U.S., investments in technology and routine capital replacement.
Conference Call
A conference call is scheduled for February 24, 2016 at 10:00 a.m. Eastern Time to review our fourth quarter and full year 2015 earnings results and 2016 guidance. 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 45364479.
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.
Annual Meeting Date Scheduled
The 2016 Annual Meeting of Stockholders will be held on Thursday, April 28, 2016, at 11:00 am local time at the company’s corporate offices located at 2002 Papa John’s Boulevard, Louisville, Kentucky.
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,” “intend,” “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, cash flow, contingent liabilities, resolution of litigation, commodity costs, profit margins, unit growth, unit level performance, 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 27, 2015. 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 | Year Ended | |||||||||||||||||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 27, 2015 | Dec. 28, 2014 | |||||||||||||||
(In thousands, except per share amounts) | (Unaudited) | (Unaudited) | ||||||||||||||||
Revenues: | ||||||||||||||||||
North America: | ||||||||||||||||||
Domestic company-owned restaurant sales | $ | 192,999 | $ | 184,585 | $ | 756,307 | $ | 701,854 | ||||||||||
Franchise royalties | 24,527 | 23,715 | 95,046 | 89,443 | ||||||||||||||
Franchise and development fees | 344 | 233 | 1,010 | 726 | ||||||||||||||
Domestic commissary sales | 158,407 | 165,640 | 615,610 | 629,492 | ||||||||||||||
Other sales | 14,601 | 24,475 | 64,711 | 74,179 | ||||||||||||||
International: | ||||||||||||||||||
Royalties and franchise and development fees | 7,395 | 6,961 | 27,289 | 25,730 | ||||||||||||||
Restaurant and commissary sales | 18,543 | 19,900 | 77,402 | 76,725 | ||||||||||||||
Total revenues | 416,816 | 425,509 | 1,637,375 | 1,598,149 | ||||||||||||||
Costs and expenses: | ||||||||||||||||||
Domestic company-owned restaurant expenses: | ||||||||||||||||||
Cost of sales | 46,009 | 46,087 | 178,952 | 175,733 | ||||||||||||||
Salaries and benefits | 52,609 | 49,011 | 207,998 | 188,234 | ||||||||||||||
Advertising and related costs | 17,609 | 16,484 | 67,164 | 63,463 | ||||||||||||||
Occupancy costs and other restaurant operating expenses | 37,055 | 39,677 | 150,092 | 144,628 | ||||||||||||||
Total domestic company-owned restaurant expenses | 153,282 | 151,259 | 604,206 | 572,058 | ||||||||||||||
Domestic commissary expenses: | ||||||||||||||||||
Cost of sales | 121,704 | 128,638 | 471,812 | 492,940 | ||||||||||||||
Salaries and benefits and other commissary operating expenses | 24,295 | 23,819 | 96,715 | 91,981 | ||||||||||||||
Total domestic commissary expenses | 145,999 | 152,457 | 568,527 | 584,921 | ||||||||||||||
Other operating expenses | 13,170 | 23,622 | 60,896 | 71,068 | ||||||||||||||
International restaurant and commissary expenses | 15,297 | 16,352 | 63,506 | 63,718 | ||||||||||||||
General and administrative expenses | 37,392 | 36,367 | 157,421 | 140,566 | ||||||||||||||
Other general expenses | 1,778 | 1,583 | 6,205 | 8,223 | ||||||||||||||
Depreciation and amortization | 9,669 | 10,426 | 40,307 | 39,965 | ||||||||||||||
Total costs and expenses | 376,587 | 392,066 | 1,501,068 | 1,480,519 | ||||||||||||||
Operating income | 40,229 | 33,443 | 136,307 | 117,630 | ||||||||||||||
Legal settlement expense | - | - | (12,278 | ) | - | |||||||||||||
Net interest expense | (1,306 | ) | (1,052 | ) | (4,882 | ) | (3,375 | ) | ||||||||||
Income before income taxes | 38,923 | 32,391 | 119,147 | 114,255 | ||||||||||||||
Income tax expense | 12,642 | 10,036 | 37,183 | 36,558 | ||||||||||||||
Net income before attribution to noncontrolling interests | 26,281 | 22,355 | 81,964 | 77,697 | ||||||||||||||
Income attributable to noncontrolling interests | (1,586 | ) | (1,174 | ) | (6,282 | ) | (4,382 | ) | ||||||||||
Net income attributable to the company | $ | 24,695 | $ | 21,181 | $ | 75,682 | $ | 73,315 | ||||||||||
Calculation of income for earnings per share: | ||||||||||||||||||
Net income attributable to the company | $ | 24,695 | $ | 21,181 | $ | 75,682 | $ | 73,315 | ||||||||||
Decrease (increase) in noncontrolling interest redemption value | (127 | ) | 37 | 65 | (44 | ) | ||||||||||||
Net income attributable to participating securities | (102 | ) | (107 | ) | (325 | ) | (402 | ) | ||||||||||
Net income attributable to common shareholders | $ | 24,466 | $ | 21,111 | $ | 75,422 | $ | 72,869 | ||||||||||
Basic earnings per common share | $ | 0.63 | $ | 0.53 | $ | 1.91 | $ | 1.78 | ||||||||||
Diluted earnings per common share | $ | 0.62 | $ | 0.52 | $ | 1.89 | $ | 1.75 | ||||||||||
Basic weighted average common shares outstanding | 38,909 | 40,097 | 39,458 | 40,960 | ||||||||||||||
Diluted weighted average common shares outstanding | 39,367 | 40,789 | 40,000 | 41,718 | ||||||||||||||
Dividends declared per common share | $ | 0.175 | $ | 0.14 | $ | 0.63 | $ | 0.53 | ||||||||||
Papa John's International, Inc. and Subsidiaries | ||||||
Condensed Consolidated Balance Sheets | ||||||
Year Ended | ||||||
Dec. 27, 2015 | Dec. 28, 2014 | |||||
(In thousands) | ||||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 21,006 | $ | 20,122 | ||
Accounts receivable, net | 63,320 | 56,047 | ||||
Notes receivable, net | 7,816 | 6,106 | ||||
Income tax receivable | 272 | 9,527 | ||||
Inventories | 21,564 | 27,394 | ||||
Prepaid expenses and other current assets | 29,313 | 28,564 | ||||
Assets held for sale | 9,299 | - | ||||
Total current assets | 152,590 | 147,760 | ||||
Property and equipment, net | 214,044 | 219,457 | ||||
Notes receivable, less current portion, net | 11,105 | 12,801 | ||||
Goodwill | 79,657 | 82,007 | ||||
Deferred income taxes | 2,415 | 3,914 | ||||
Other assets | 35,101 | 38,616 | ||||
Total assets | $ | 494,912 | $ | 504,555 | ||
Liabilities and stockholders' equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 43,492 | $ | 38,832 | ||
Income and other taxes payable | 8,527 | 9,637 | ||||
Accrued expenses and other current liabilities | 80,918 | 58,293 | ||||
Total current liabilities | 132,937 | 106,762 | ||||
Deferred revenue | 3,190 | 4,257 | ||||
Long-term debt | 256,000 | 230,451 | ||||
Deferred income taxes | 4,610 | 13,940 | ||||
Other long-term liabilities | 47,606 | 41,875 | ||||
Total liabilities | 444,343 | 397,285 | ||||
Redeemable noncontrolling interests | 8,363 | 8,555 | ||||
Total stockholders' equity | 42,206 | 98,715 | ||||
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ | 494,912 | $ | 504,555 | ||
Note: The Condensed Consolidated Balance Sheets have been derived from the audited consolidated financial statements, but do 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 | ||||||||
Consolidated Statements of Cash Flows | ||||||||
Year Ended | ||||||||
(In thousands) | Dec. 27, 2015 | Dec. 28, 2014 | ||||||
Operating activities | ||||||||
Net income before attribution to noncontrolling interests | $ | 81,964 | $ | 77,697 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Provision for uncollectible accounts and notes receivable | 1,232 | 1,795 | ||||||
Depreciation and amortization | 40,307 | 39,965 | ||||||
Deferred income taxes | (6,246 | ) | 4,422 | |||||
Stock-based compensation expense | 9,423 | 8,712 | ||||||
Other | 4,633 | 4,738 | ||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||
Accounts receivable | (9,179 | ) | (5,741 | ) | ||||
Income taxes receivable | 9,255 | (9,527 | ) | |||||
Inventories | 4,967 | (2,838 | ) | |||||
Prepaid expenses and other current assets | (1,596 | ) | (4,781 | ) | ||||
Other assets and liabilities | 620 | 915 | ||||||
Accounts payable | 4,804 | 3,171 | ||||||
Income taxes and other taxes payable | (1,113 | ) | 5,233 | |||||
Accrued expenses and other current liabilities | 21,201 | (665 | ) | |||||
Deferred revenue | 40 | (464 | ) | |||||
Net cash provided by operating activities | 160,312 | 122,632 | ||||||
Investing activities | ||||||||
Purchases of property and equipment | (38,972 | ) | (48,655 | ) | ||||
Loans issued | (4,741 | ) | (6,816 | ) | ||||
Repayments of loans issued | 5,183 | 4,254 | ||||||
Acquisitions, net of cash acquired | (922 | ) | (4,773 | ) | ||||
Proceeds from divestitures of restaurants | - | 400 | ||||||
Other | 500 | 556 | ||||||
Net cash used in investing activities | (38,952 | ) | (55,034 | ) | ||||
Financing activities | ||||||||
Net proceeds on line of credit facility | 25,549 | 72,551 | ||||||
Cash dividends paid | (24,844 | ) | (21,735 | ) | ||||
Excess tax benefit on equity awards | 10,151 | 10,282 | ||||||
Tax payments for equity award issuances | (10,965 | ) | (9,235 | ) | ||||
Proceeds from exercise of stock options | 5,197 | 5,837 | ||||||
Acquisition of Company common stock | (119,793 | ) | (117,400 | ) | ||||
Contributions from noncontrolling interest holders | 684 | 1,086 | ||||||
Distributions to noncontrolling interest holders | (6,550 | ) | (2,800 | ) | ||||
Other | 444 | 491 | ||||||
Net cash used in financing activities | (120,127 | ) | (60,923 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (349 | ) | (223 | ) | ||||
Change in cash and cash equivalents | 884 | 6,452 | ||||||
Cash and cash equivalents at beginning of period | 20,122 | 13,670 | ||||||
Cash and cash equivalents at end of period | $ | 21,006 | $ | 20,122 |
CONTACT:
Papa John’s International, Inc.
Lance Tucker,
502-261-7272
Chief Financial Officer