Papa John‘s International, Inc.
Oct 31, 2006

Papa John's Reports Third Quarter 2006 Earnings

October Comparable Sales Results Announced; 2006 Earnings Guidance

Updated

LOUISVILLE, Ky.--(BUSINESS WIRE)--Oct. 31, 2006--Papa John's International, Inc. (NASDAQ: PZZA):

    Highlights

    --  Third quarter earnings per share of $0.40 in 2006 vs. $0.31 in
        2005 ($0.31 in 2006 vs. $0.25 in 2005, excluding the
        consolidation of the company's franchisee-owned cheese
        purchasing entity, BIBP Commodities, Inc. (BIBP)).

    --  Third quarter 2006 EPS includes $0.03 from the favorable
        settlement of certain income tax issues.

    --  18 net restaurant openings during the quarter.

    --  Domestic system-wide comparable sales for the quarter
        increased 4.5%.

    --  Domestic system-wide comparable sales for October decreased
        1.8%.

    --  Earnings guidance for 2006 updated to a range of $1.45 to
        $1.49 per share, excluding the impact of consolidating BIBP.

Papa John's International, Inc. (NASDAQ: PZZA) today announced revenues of $239.7 million for the third quarter of 2006, representing an increase of 2.8% from revenues of $233.1 million for the same period in 2005. Net income for the third quarter of 2006 was $13.1 million, or $0.40 per share (including a net gain of $3.0 million, or $0.09 per share, from the consolidation of the results of the franchisee-owned cheese purchasing company, BIBP Commodities, Inc. (BIBP), a variable interest entity and $950,000, or $0.03 per share, from the finalization of certain income tax examination issues), compared to last year's net income of $10.8 million, or $0.31 per share (including a net gain of $1.9 million, or $0.06 per share, from the consolidation of BIBP). Excluding the impact of BIBP, pre-tax income from continuing operations for the third quarter of 2006 increased $1.0 million (or $0.02 per share, after-tax) from the corresponding 2005 period.

As discussed below, revenues were $723.6 million for the nine months ended September 24, 2006, which are substantially flat with revenues for the same period in 2005. Net income for the nine months ended September 24, 2006 was $44.4 million, or $1.33 per share (including net income of $10.4 million, or $0.31 per share, from the consolidation of BIBP and $950,000, or $0.03 per share, from the previously mentioned finalization of certain income tax examination issues), compared to last year's net income of $31.6 million, or $0.92 per share (including a net gain of $800,000, or $0.02 per share, from the consolidation of BIBP). Excluding the impact of BIBP, pre-tax income from continuing operations increased $5.1 million (or $0.10 per share, after-tax) from the corresponding 2005 period.

"Our third quarter results were very good, with our system continuing to outperform the competition in a very challenging environment, while we continue to make both domestic and international investments to sustain our longer-term growth," commented Papa John's president and chief executive officer, Nigel Travis.

Revenues Comparison

The primary reasons for the $6.6 million, or 2.8%, increase in revenues for the third quarter of 2006, as compared to the same period in 2005, were a $3.5 million increase in commissary revenues reflecting increased volumes and an increase in domestic franchise royalties of $874,000 as a result of the 4.5% increase in comparable sales and additional equivalent units for the quarter. In addition, international revenues increased $1.4 million as a result of additional company-owned restaurants located in the United Kingdom and Mexico. Revenues for domestic company-owned restaurants were substantially consistent with the prior year quarter due to offsetting factors as discussed on a year-to-date basis, below.

For the nine-month period ended September 24, 2006, consolidated revenues were $723.6 million, which is substantially flat with the corresponding 2005 period. Commissary revenues and domestic franchise royalties increased $10.7 million and $2.8 million, respectively, for the nine months ended September 24, 2006, as compared to the corresponding 2005 period. The revenue increases in the commissary operations and franchise royalties occurred for the same reasons mentioned above for the third quarter-only results. The increases were substantially offset by decreases in revenues for company-owned restaurants and restaurants classified as variable interest entities (VIEs). Company-owned restaurant revenues declined $8.6 million, as the 5.0% increase in comparable sales on a year-to-date basis was more than offset by a decline in the number of equivalent units reflecting the sale of 84 company restaurants to a new franchisee at the beginning of the fourth quarter of 2005 (partially offset by the acquisition of 43 franchised restaurants during the current quarter). Revenues from VIE restaurants declined $3.1 million reflecting the sale of restaurants by two franchisees to third parties during 2005 and 2006, eliminating the VIE classification under Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51 (FIN 46), and the related consolidation of the operating results of such restaurants at that time.

    Operating Results and Cash Flow

    Operating Results

Our pre-tax income from continuing operations for the third quarter of 2006 was $19.8 million compared to $16.5 million for the corresponding period in 2005. For the nine months ended September 24, 2006, pre-tax income from continuing operations was $68.8 million compared to $48.0 million for the corresponding period in 2005. Excluding the impact of the consolidation of BIBP, third quarter 2006 pre-tax income from continuing operations was $14.5 million, an increase of $1.0 million over 2005 comparable results, and pre-tax income for the nine months ended September 24, 2006 was $51.8 million, an increase of $5.1 million over 2005 comparable results. The increase of $1.0 million and $5.1 million, respectively, in pre-tax income from continuing operations for the three- and nine-month periods ended September 24, 2006 (excluding the consolidation of BIBP) is principally due to the following (analyzed on a segment basis -- see the Summary Financial Data table that follows for the reconciliation of segment income to consolidated income below):



    --  Domestic Company-owned Restaurant Segment. Domestic
        company-owned restaurants' operating income increased
        approximately $900,000 and $7.8 million for the three- and
        nine-month periods ended September 24, 2006, respectively,
        primarily due to fixed-cost leverage and related margin
        improvement associated with the noted increase in comparable
        sales (see below) for the periods.

    --  Domestic Commissary Segment. Domestic commissaries' operating
        income increased approximately $2.9 million and $5.5 million
        for the three- and nine-month periods ended September 24,
        2006, respectively, primarily due to the margin on increased
        sales volumes, including sales to the theme-park operator Six
        Flags, Inc. as part of our multi-year strategic marketing
        alliance and partnership agreement that was announced in late
        March 2006.

    --  Domestic Franchising Segment. Domestic franchising operating
        income increased approximately $360,000 and $1.1 million for
        the three- and nine-month periods ended September 24, 2006,
        respectively, primarily as a result of an increase in
        royalties due to an increase in comparable sales (see below)
        and the royalties from the 84 restaurants that were purchased
        by a franchisee from the company at the beginning of the
        fourth quarter of 2005. The increase in royalties during 2006
        was partially offset by an increase in administrative costs
        related to the field organizational restructuring implemented
        in late 2005 to better drive the performance of our domestic
        franchise operations.

    --  International Segment. The international segment, which
        excludes the Perfect Pizza operations that were sold in March
        2006, reported operating losses of $2.0 million and $6.8
        million for the three- and nine-month periods ended September
        24, 2006, respectively, as compared to operating losses of
        $1.2 million and $2.7 million for the corresponding 2005
        periods. The decrease in operating results is principally due
        to increased costs related to the continued development of our
        support infrastructure throughout the international segment,
        including the United Kingdom, to support the accelerated
        development of both company-owned and franchised Papa John's
        branded restaurants in our international markets. In addition,
        the company incurred a $470,000 charge in the second quarter
        related to a management reorganization of one of our
        international operating units.

    --  All Others Segment. The operating income for the "All others"
        reporting segment was substantially flat for the three-month
        period ended September 24, 2006 as compared to the
        corresponding 2005 period. Operating income for this segment
        for the nine-month period ended September 24, 2006 increased
        $1.1 million primarily due to improved operating results from
        our insurance business and our partnership development
        activities.

    --  Unallocated Corporate Segment. The unallocated corporate
        expenses increased $2.3 million and $5.6 million for the
        three- and nine-month periods ended September 24, 2006,
        respectively, as compared to the corresponding prior year
        periods. Increased marketing efforts, primarily related to
        non-traditional restaurant initiatives, resulted in additional
        costs of $1.4 million and $2.0 million, respectively, for the
        three- and nine-month periods ended September 24, 2006.

In addition, we incurred additional equity compensation and executive performance unit incentive plan expense, as follows.

Stock options were awarded to the majority of management in late March 2005 and April 2006, each with a two-year cliff vesting provision. The company also granted approximately 28,000 shares of performance-based restricted stock to employees during the second quarter of 2006 with a performance period of three years. There were no such stock options or restricted stock awarded in 2004 that vested in 2005 or subsequent years. Stock compensation expense recognized for the three- and nine-month periods ended September 24, 2006 was $1.2 million and $3.1 million, respectively, as compared to $725,000 and $1.6 million for the corresponding 2005 periods.

Additionally, performance units were awarded in 2005 and 2006 to certain members of management with each award having a three-year performance period (none awarded prior to 2005). Further, the ultimate cost associated with the performance units is based on the company's ending stock price and total shareholder return relative to a peer group over the three-year performance period ending in December 2007 for the 2005 program and December 2008 for the 2006 program, with the awards paid in cash at the end of the respective performance periods. The total expense related to the 2005 and 2006 performance unit programs was approximately $925,000 in the third quarter of 2006 as compared to $675,000 in the third quarter of 2005 and $2.3 million for the nine months ended September 24, 2006 as compared to $1.0 million for the corresponding 2005 period.

Net interest expense increased approximately $145,000 for the three-month period ended September 24, 2006, as compared to the corresponding 2005 period, principally due to an increased net average debt balance outstanding. For the nine months ended September 24, 2006, interest expense decreased $1.2 million principally due to a decrease in our average outstanding debt balance from the comparable prior year period.

The income tax rate was 33.8% and 36.1% for the three- and nine-month periods ended September 24, 2006, compared to 37.0% for the corresponding 2005 periods. The decrease in the effective tax rate in 2006 is primarily due to the previously mentioned finalization of certain income tax examination issues in the current quarter.

Cash Flow

Cash flow from operating activities from continuing operations was $66.3 million in the first nine months of 2006 as compared to $61.5 million for the comparable period in 2005. The consolidation of BIBP increased cash flow from operations by approximately $17.0 million and $1.3 million in 2006 and 2005, respectively. Excluding the impact of the consolidation of BIBP, cash flow from continuing operations decreased $11.0 million in the first nine months of 2006 as compared to the corresponding 2005 period, primarily due to unfavorable working capital changes with accounts receivable and other liabilities. The 2005 operating cash flows were favorably impacted by the collection of unusually high accounts receivable balances at the end of 2004. In addition, a decrease in cash flow from continuing operations occurred due to the classification in 2006 of $5.7 million of excess tax benefits related to the exercise of non-qualified stock options from operating activities to financing activities as required by Statement of Financial Accounting Standards (SFAS) No. 123R, Share-Based Payment.

Form 10-Q Filing

See the Management Discussion & Analysis section of our third quarter Form 10-Q filed with the Securities and Exchange Commission for additional information concerning the operating results and cash flows for the three- and nine-month periods ended September 24, 2006.

Comparable Sales and Unit Count

As previously announced, domestic system-wide comparable sales for the third quarter increased 4.5% (composed of a 4.3% increase at company-owned restaurants and a 4.5% increase at franchised restaurants). Total system-wide international sales for Papa John's branded units increased 30.9% for the quarter, on a constant U.S. dollar basis, over the comparable period last year.

Domestic system-wide comparable sales for the nine months ended September 24, 2006 increased 4.4% (composed of a 5.0% increase at company-owned restaurants and a 4.3% increase at franchised restaurants). Total system-wide international sales for Papa John's branded units increased 27.7% on a year-to-date basis, on a constant U.S. dollar basis, over the comparable period last year.

The company today announced that domestic system-wide comparable sales for the four weeks ended October 22, 2006 decreased approximately 1.8% (composed of a 0.6% decrease at company-owned restaurants and a 2.2% decrease at franchised restaurants). Total system-wide international sales for Papa John's branded units increased 21.4% for the four weeks ended October 22, 2006, on a constant U.S. dollar basis, over the comparable period last year.

The company also today announced that December 2006 will be the last month of reporting monthly domestic comparable sales results. Beginning in 2007, domestic comparable sales results will be reported on a quarterly basis, matching the reporting methodology of our two primary national competitors. In addition to avoiding the potential competitive disadvantage of continuing to report monthly, we believe reporting on a quarterly basis will actually benefit investors by providing a more meaningful view of our long-term performance trends and strategies.

During the third quarter of 2006, 31 domestic (five company-owned and 26 franchised) and 17 international franchised restaurants were opened and 22 domestic and eight international franchised restaurants were closed.

At September 24, 2006, there were 2,978 Papa John's restaurants (564 company-owned and 2,414 franchised) operating in 49 states and 25 countries. The company-owned unit count includes 117 restaurants operated in majority-owned domestic joint venture arrangements, the operations of which are fully consolidated into the company's results.

Acquisition Activity

As previously disclosed, the company acquired 43 franchised restaurants in the Phoenix and Flagstaff, Arizona markets effective July 24, 2006 (beginning of period 8). The company also announced the acquisition of 11 franchised restaurants in the Raleigh, North Carolina market effective September 25, 2006 (beginning of period 10). It is not expected that these acquisitions will significantly impact operating income for the remainder of 2006 as management transition costs are expected to substantially offset incremental unit level operating income during this time frame.

International Update

A total of 17 restaurants were opened in all international markets during the quarter, of which 11 were located in our fastest growing markets of Korea and China. As of September 24, 2006, we had a total of 94 franchised restaurants open and contractual agreements for an additional 396 Papa John's restaurants to be opened over the next eight years in these two countries. We also have a ten-year, 100-unit development agreement for Northern India, of which three units are currently open. In addition, we recently signed a development agreement for 75 restaurants to be opened in South and West India over the next six years. Our total international development pipeline as of September 24, 2006 included 836 restaurants expected to open over the next ten years.

As noted in our first quarter Form 10-Q filing, the company sold its Perfect Pizza operations in the United Kingdom, consisting of the franchised units and related distribution operations, on March 8, 2006. In accordance with U.S. generally accepted accounting principles, we have classified the Perfect Pizza operating results, including directly associated G&A expenses, as "discontinued operations" for both 2006 and 2005. The following summarizes the discontinued operations for 2006 and 2005 (in 000's):

                               Three Months Ended   Nine Months Ended
                               Sept. 24, Sept. 25, Sept. 24, Sept. 25,
                                 2006      2005      2006      2005
                               ------------------- -------------------

Net sales                       $     -   $ 3,235   $ 2,421   $10,431

Pre-tax income                        -       651       617     2,272

Net income                            -       410       389     1,431

Share Repurchase Activity

The company repurchased approximately 381,000 shares of its common stock at an average price of $32.14 per share, or a total of $12.2 million, during the third quarter of 2006, and 2.0 million shares of its common stock at an average of $31.58 per share, or a total of $64.0 million, during the first nine months of 2006. A total of 183,000 and 893,000 shares of common stock, respectively, were issued upon the exercise of stock options for the three- and nine-month periods ended September 24, 2006.

As a result, there were 32.6 million diluted weighted average shares outstanding for the third quarter of 2006 as compared to 35.0 million for the same period in 2005. Approximately 31.9 million actual shares of the company's common stock were outstanding as of September 24, 2006. The company's board of directors has authorized the repurchase of up to an aggregate $575.0 million of common stock through December 31, 2006, and through September 24, 2006, approximately 36.7 million shares have been repurchased at a total cost of $559.8 million (average price of $15.24 per share). There were no repurchases subsequent to September 24, 2006.

The company's share repurchase activity increased earnings per share from continuing operations by $0.02 and $0.06 for the three- and nine-month periods ended September 24, 2006, respectively.

2006 Earnings Guidance Updated

In connection with the second quarter earnings release, the company revised the original guidance for 2006, excluding the impact of the consolidation of BIBP, to a range of $1.42 to $1.46 (including the previously disclosed $0.07 benefit from the extra week of operations in the fourth quarter of 2006). Based upon actual third quarter operating results, including the impact of the finalization of certain income tax examination issues, which resulted in an additional $0.03 of earnings per share, the company is updating its 2006 EPS guidance to a range of $1.45 to $1.49. Our determination of the updated fourth quarter earnings guidance for 2006 included the following factors:



    --  Expected transition and infrastructure costs and unit level
        operating losses associated with the planned domestic and
        international development opportunities currently being
        pursued.

    --  The continued year-over-year increase in equity compensation
        costs in the fourth quarter for reasons as explained for the
        first three quarters of 2006.

The updated full-year guidance assumes domestic comparable sales will increase 3% to 5% for the year (3.8% increase year-to-date through October). Total sales growth for international Papa John's branded units is expected to be in the range of 25% to 30% (27.1% increase year-to-date through October). Our worldwide unit openings are expected to be near the upper end of our initial guidance range of 210 to 240 units (151 openings through September). However, worldwide closings are expected to exceed our initial guidance range of 70 to 100 (99 closings through September). This includes 34 restaurants closed in Mexico as a result of our restructuring of that market. Therefore, worldwide net unit growth is now expected to be in the 100 to 115-unit range (52 net unit openings through September). The lower than anticipated net unit growth did not significantly impact our 2006 earnings.

There are no other significant changes in the key operating assumptions we provided in our press release dated August 1, 2006.

As noted above, the impact of the additional week of operations in the fourth quarter of 2006 provides $0.07 of earnings per share, as reflected in the above earnings guidance range. Accordingly, our baseline 2006 earnings per share, adjusted to exclude BIBP, the 53rd week of operations and the benefit from the finalization of certain income tax examination issues, is projected to be $1.35 to $1.39. We plan on issuing our initial 2007 earnings guidance in mid-December; however, we have consistently discussed an expectation of a 10% to 12% earnings per share growth target, and we would further expect such growth target to be applied to baseline 2006 earnings adjusted as noted above.

Forward-Looking Statements

Except for historical information, this announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect management's expectations based upon currently available information and data; however, actual results are subject to future events and uncertainties, which could cause actual results to materially differ from those projected in these statements. Certain factors that can cause actual results to materially differ include: the uncertainties associated with litigation; changes in pricing or other marketing or promotional strategies by competitors, which may adversely affect sales; new product and concept developments by food industry competitors; the ability of the company and its franchisees to meet planned growth targets and operate new and existing restaurants profitably; increases in or sustained high levels of food, paper, utilities, fuel, employee compensation and benefits, insurance and similar costs; the ability to obtain ingredients from alternative suppliers, if needed; health- or disease-related disruptions or consumer concerns about commodities supplies; the selection and availability of suitable restaurant locations; negotiation of suitable lease or financing terms; constraints on permitting and construction of restaurants; local governmental agencies restricting the sale of certain food products; higher-than-anticipated construction costs; the hiring, training and retention of management and other personnel; changes in consumer taste, demographic trends, traffic patterns and the type, number and location of competing restaurants; franchisee relations; federal and state laws governing such matters as wages, working conditions, citizenship requirements and overtime; and labor shortages in various markets resulting in higher required wage rates. The above factors might be especially harmful to the financial viability of franchisees or company-owned operations in under-penetrated or emerging markets, leading to greater unit closings than anticipated. Increases in projected claims losses for the company's self-insured coverage or within the captive franchise insurance program could have a significant impact on our operating results. Our international operations are subject to additional factors, including economic, political and health conditions in the countries in which the company or its franchisees operate; currency regulations and fluctuations; differing business and social cultures and consumer preferences; diverse government regulations and structures; ability to source high-quality ingredients and other commodities in a cost-effective manner; and differing interpretation of the obligations established in franchise agreements with international franchisees. Further information regarding factors that could affect the company's financial and other results is included in the company's Forms 10-Q and 10-K, filed with the Securities and Exchange Commission.

Conference Call

A conference call is scheduled for Wednesday, November 1, 2006, at 10:00 AM EST to review third quarter earnings results. The call can be accessed from the company's web page at www.papajohns.com in a listen-only mode, or dial 800-487-2662 for participation in the question and answer session. International participants may dial 706-679-8452.

The conference call will be available for replay beginning Wednesday, November 1, 2006 at approximately noon through Friday, November 3, 2006, at midnight EST. The replay can be accessed from the company's web page at www.papajohns.com or by dialing 800-642-1687 (passcode 2263153). International participants may dial 706-645-9291 (passcode 2263153).

                        Summary Financial Data
                   Papa John's International, Inc.

                               Three Months Ended   Nine Months Ended
                               ------------------- -------------------
(In thousands, except per      Sept. 24, Sept. 25, Sept. 24, Sept. 25,
 share amounts)                  2006      2005      2006      2005
                               --------- --------- --------- ---------

Revenues                       $239,692  $233,100  $723,634  $720,412
                               ========= ========= ========= =========

Income from continuing
 operations before income
 taxes (1)                      $19,798   $16,512   $68,813   $47,963
                               ========= ========= ========= =========

Net income                      $13,108   $10,813   $44,376   $31,648
                               ========= ========= ========= =========

Diluted earnings per share        $0.40     $0.31     $1.33     $0.92
                               ========= ========= ========= =========

Diluted weighted-average
 shares outstanding              32,583    35,044    33,296    34,232
                               ========= ========= ========= =========

EBITDA (A)                      $27,101   $24,246   $89,972   $72,374
                               ========= ========= ========= =========

(1) See information below on a reporting unit basis that separately
 identifies the impact of consolidating VIEs on income before income
 taxes.

The following is a summary of
 our income (loss) from
 continuing operations before
 income taxes:

Domestic company-owned
 restaurants                     $5,562    $4,682   $23,012   $15,260
Domestic commissaries             8,158     5,210    24,023    18,562
Domestic franchising             12,130    11,769    37,881    36,782
International                    (2,003)   (1,153)   (6,763)   (2,695)
VIEs, primarily BIBP              5,336     3,044    17,027     1,264
All others                        1,079     1,009     3,796     2,682
Unallocated corporate expenses  (10,354)   (8,012)  (29,172)  (23,594)
Elimination of intersegment
 profits                           (110)      (37)     (991)     (298)
                               --------- --------- --------- ---------
Income from continuing
 operations before income
 taxes                          $19,798   $16,512   $68,813   $47,963
                               ========= ========= ========= =========

The following is a
 reconciliation of EBITDA to
 net income:

EBITDA (A)                      $27,101   $24,246   $89,972   $72,374
Income tax expense               (6,690)   (6,109)  (24,826)  (17,746)
Interest expense                   (935)     (987)   (2,367)   (3,802)
Investment income                   306       502     1,046     1,248
Depreciation and amortization    (6,674)   (7,249)  (19,838)  (21,857)
Income from discontinued
 operations, net of tax               -       410       389     1,431
                               --------- --------- --------- ---------
Net income                      $13,108   $10,813   $44,376   $31,648
                               ========= ========= ========= =========

(A) EBITDA represents operating performance from continuing operations
 before depreciation, amortization, net interest and income taxes.
 While EBITDA should not be construed as a substitute for operating
 income or a better indicator of liquidity than cash flows from
 operating activities, which are determined in accordance with
 accounting principles generally accepted in the United States, it is
 included herein to provide additional information with respect to the
 ability of the company to meet its future debt service, capital
 expenditure and working capital requirements. EBITDA is not
 necessarily a measure of the company's ability to fund its cash
 needs. The above EBITDA calculation includes the operating results of
 BIBP Commodities, Inc., a variable interest entity.

As of October 22, 2006, Papa John's had 2,986 restaurants (577 company-owned and 2,409 franchised) operating in 49 states and 25 countries. For more information about the company, please visit www.papajohns.com.

           Papa John's International, Inc. and Subsidiaries
                  Consolidated Statements of Income



                                          Three Months Ended
                                 -------------------------------------
                                 September 24, 2006 September 25, 2005
                                 -------------------------------------
(In thousands, except per share     (Unaudited)        (Unaudited)
 amounts)
Revenues:
  Domestic:
    Company-owned restaurant
     sales                                $107,793           $107,241
    Variable interest entities
     restaurant sales                        1,320              2,121
    Franchise royalties                     13,186             12,312
    Franchise and development
     fees                                      792                688
    Commissary sales                        98,272             94,787
    Other sales                             12,529             11,512
  International:
    Royalties and franchise and
     development fees                        1,906              1,574
    Restaurant and commissary
     sales                                   3,894              2,865
                                 -------------------------------------
Total revenues                             239,692            233,100

Costs and expenses:
  Domestic Company-owned
   restaurant expenses:
    Cost of sales                           21,309             22,051
    Salaries and benefits                   32,291             32,494
    Advertising and related costs           10,385              9,396
    Occupancy costs                          7,209              7,016
    Other operating expenses                14,580             14,736
                                 -------------------------------------
    Total domestic Company-owned
     restaurant expenses                    85,774             85,693

    Variable interest entities
     restaurant expenses                     1,112              1,781

  Domestic commissary and other
   expenses:
    Cost of sales                           79,957             78,706
    Salaries and benefits                    7,991              7,195
    Other operating expenses                11,549             11,583
                                 -------------------------------------
  Total domestic commissary and
   other expenses                           99,497             97,484

(Income) from the franchise
 cheese-purchasing program, net
 of minority interest                       (4,337)            (2,649)
International operating expenses             3,936              2,860
General and administrative
 expenses                                   26,427             23,121
Minority interests and other
 general expenses                              182                564
Depreciation and amortization                6,674              7,249
                                 -------------------------------------
Total costs and expenses                   219,265            216,103
                                 -------------------------------------

Operating income                            20,427             16,997
Net interest expense                          (629)              (485)
                                 -------------------------------------
Income from continuing operations
 before income taxes                        19,798             16,512
Income tax expense                           6,690              6,109
                                 -------------------------------------

Income from continuing operations           13,108             10,403
Income from discontinued
 operations, net of tax                          -                410
                                 -------------------------------------
Net income                                 $13,108            $10,813
                                 =====================================

Basic earnings per common share:
  Income from continuing
   operations                                $0.41              $0.30
  Income from discontinued
   operations                                    -               0.01
                                 -------------------------------------
Basic earnings per common share              $0.41              $0.31
                                 =====================================

Earnings per common share -
 assuming dilution:
  Income from continuing
   operations                                $0.40              $0.30
  Income from discontinued
   operations                                    -               0.01
                                 -------------------------------------
Earnings per common share -
 assuming dilution                           $0.40              $0.31
                                 =====================================

Basic weighted average shares
 outstanding                                31,957             34,432
                                 =====================================
Weighted average shares
 outstanding - assuming dilution            32,583             35,044
                                 =====================================



                                           Nine Months Ended
                                 -------------------------------------
                                 September 24, 2006 September 25, 2005
                                 -------------------------------------
(In thousands, except per share     (Unaudited)        (Unaudited)
 amounts)
Revenues:
  Domestic:
    Company-owned restaurant
     sales                                $319,957           $328,513
    Variable interest entities
     restaurant sales                        6,457              9,581
    Franchise royalties                     41,388             38,585
    Franchise and development
     fees                                    1,973              2,198
    Commissary sales                       301,932            291,195
    Other sales                             35,601             36,963
  International:
    Royalties and franchise and
     development fees                        5,202              4,601
    Restaurant and commissary
     sales                                  11,124              8,776
                                 -------------------------------------
Total revenues                             723,634            720,412

Costs and expenses:
  Domestic Company-owned
   restaurant expenses:
    Cost of sales                           61,837             70,876
    Salaries and benefits                   95,044            100,838
    Advertising and related
     costs                                  29,398             28,953
    Occupancy costs                         19,735             20,177
    Other operating expenses                42,157             42,827
                                 -------------------------------------
    Total domestic Company-owned
     restaurant expenses                   248,171            263,671

    Variable interest entities
     restaurant expenses                     5,443              8,324

  Domestic commissary and other
   expenses:
    Cost of sales                          245,366            239,611
    Salaries and benefits                   23,307             21,738
    Other operating expenses                33,971             37,987
                                 -------------------------------------
  Total domestic commissary and
   other expenses                          302,644            299,336

(Income) from the franchise
 cheese-purchasing program, net
 of minority interest                      (14,102)            (1,807)
International operating expenses            11,242              8,402
General and administrative
 expenses                                   77,057             66,326
Minority interests and other
 general expenses                            3,207              3,786
Depreciation and amortization               19,838             21,857
                                 -------------------------------------
Total costs and expenses                   653,500            669,895
                                 -------------------------------------

Operating income                            70,134             50,517
Net interest expense                        (1,321)            (2,554)
                                 -------------------------------------
Income from continuing
 operations before income taxes             68,813             47,963
Income tax expense                          24,826             17,746
                                 -------------------------------------

Income from continuing
 operations                                 43,987             30,217
Income from discontinued
 operations, net of tax                        389              1,431
                                 -------------------------------------
Net income                                 $44,376            $31,648
                                 =====================================

Basic earnings per common share:
  Income from continuing
   operations                                $1.35              $0.90
  Income from discontinued
   operations                                 0.01               0.04
                                 -------------------------------------
Basic earnings per common share              $1.36              $0.94
                                 =====================================

Earnings per common share -
 assuming dilution:
  Income from continuing
   operations                                $1.32              $0.88
  Income from discontinued
   operations                                 0.01               0.04
                                 -------------------------------------
Earnings per common share -
 assuming dilution                           $1.33              $0.92
                                 =====================================

Basic weighted average shares
 outstanding                                32,556             33,648
                                 =====================================
Weighted average shares
 outstanding - assuming dilution            33,296             34,232
                                 =====================================

           Papa John's International, Inc. and Subsidiaries
                Condensed Consolidated Balance Sheets

                                            September 24, December 25,
                                                2006         2005
                                             (Unaudited)     (Note)
                                            ------------- ------------
(In thousands)

Assets
Current assets:
  Cash and cash equivalents                      $10,395      $22,098
  Accounts receivable                             21,131       21,300
  Inventories                                     26,892       26,030
  Prepaid expenses and other current assets        9,181       13,456
  Deferred income taxes                            8,146        7,085
  Assets of discontinued operations held
   for sale                                            -        2,039
                                            ------------- ------------
Total current assets                              75,745       92,008

Investments                                        2,637        6,282
Net property and equipment                       188,810      178,447
Notes receivable                                  12,679        7,667
Deferred income taxes                                  -        1,899
Goodwill                                          55,771       41,878
Other assets                                      14,302       13,772
Assets of discontinued operations held for
 sale                                                  -        8,609
                                            ------------- ------------
Total assets                                    $349,944     $350,562
                                            ============= ============


Liabilities and stockholders' equity
Current liabilities:
  Accounts payable                               $27,554      $28,937
  Income and other taxes                          16,361       16,862
  Accrued expenses                                55,129       49,634
  Current portion of debt                          4,025        6,100
                                            ------------- ------------
Total current liabilities                        103,069      101,533

Unearned franchise and development fees            6,891        7,256
Long-term debt, net of current portion            49,512       49,016
Deferred income taxes                                135            -
Other long-term liabilities                       27,298       31,478
                                            ------------- ------------
Total liabilities                                186,905      189,283

Total stockholders' equity                       163,039      161,279
                                            ------------- ------------
Total liabilities and stockholders' equity      $349,944     $350,562
                                            ============= ============

Note: The balance sheet at December 25, 2005 has been derived from the
 audited consolidated financial statements at that date, but does not
 include all information and footnotes required by generally accepted
 accounting principles for a complete set of financial statements.
           Papa John's International, Inc. and Subsidiaries
                Consolidated Statements of Cash Flows
                             (Unaudited)

                                           Nine Months Ended
                                 -------------------------------------
(In thousands)                   September 24, 2006 September 25, 2005
                                 -------------------------------------

Operating activities
Income from continuing operations          $43,987            $30,217
Adjustments to reconcile income
 from continuing operations to
 net cash provided by operating
 activities:
     Provision for uncollectible
      accounts and notes
      receivable                             2,423              2,245
     Depreciation and
      amortization                          19,838             21,857
     Deferred income taxes                     803             (1,292)
     Stock-based compensation
      expense                                3,069              1,636
     Excess tax benefit related
      to exercise of non-
      qualified stock options               (5,717)                 -
     Other                                   4,199              4,703
     Changes in operating assets
      and liabilities:
        Accounts receivable                 (2,717)              (947)
        Inventories                           (862)              (213)
        Prepaid expenses and
         other current assets                4,322              6,217
        Other assets and
         liabilities                        (5,087)            (2,393)
        Accounts payable                    (1,383)            (5,523)
        Income and other taxes                (501)             1,125
        Accrued expenses                     4,257              4,506
        Unearned franchise and
         development fees                     (360)              (633)
                                 ------------------ ------------------
Net cash provided by operating
 activities from continuing
 operations                                 66,271             61,505
Operating cash flows from
 discontinued operations                       414              1,793
                                 ------------------ ------------------
Net cash provided by operating
 activities                                 66,685             63,298

Investing activities
Purchase of property and
 equipment                                 (26,606)            (9,974)
Proceeds from sale of property
 and equipment                                  69                 47
Purchase of investments                     (2,014)            (6,597)
Proceeds from sale or maturity of
 investments                                 5,599              7,773
Loans to franchisees and
 affiliates                                 (5,008)            (3,085)
Loan repayments from franchisees
 and affiliates                              6,848              6,414
Acquisitions                               (18,858)                 -
Proceeds from divestiture of
 discontinued operations                     8,020                  -
                                 ------------------ ------------------
Net cash used in investing
 activities                                (31,950)            (5,422)

Financing activities
Net repayments on line of credit
 facility                                      500            (42,500)
Net proceeds from short-term debt
 - variable interest entities               (2,075)            (1,325)
Proceeds from issuance of common
 stock                                           -              1,000
Excess tax benefit related to
 exercise of non-qualified stock
 options                                     5,717                  -
Proceeds from exercise of stock
 options                                    13,134             34,908
Acquisition of common stock                (63,969)           (36,824)
Other                                          177               (352)
                                 ------------------ ------------------
Net cash used in financing
 activities                                (46,516)           (45,093)

Effect of exchange rate changes
 on cash and cash equivalents                   78               (124)
                                 ------------------ ------------------
Change in cash and cash
 equivalents                               (11,703)            12,659
Cash and cash equivalents at
 beginning of period                        22,098             14,698
                                 ------------------ ------------------

Cash and cash equivalents at end
 of period                                 $10,395            $27,357
                                 ================== ==================
Restaurant Progression
Papa John's International, Inc.

                               Third Quarter Ended September 24, 2006
                               ---------------------------------------
                                  Corporate       Franchised
                               Domestic  Int'l  Domestic  Int'l Total
                               ---------------------------------------
Papa John's restaurants
Beginning of period                 510     6      2,125   319  2,960
Opened                                5     -         26    17     48
Closed                                -     -        (22)   (8)   (30)
Acquired                             43     -          -     -     43
Sold                                  -     -        (43)    -    (43)
                               ---------------------------------------
End of Period                       558     6      2,086   328  2,978
                               =======================================




                               Third Quarter Ended September 25, 2005
                               ---------------------------------------
                                  Corporate       Franchised
                               Domestic  Int'l  Domestic  Int'l Total
                               ---------------------------------------
Papa John's restaurants
Beginning of period                 570     1      2,012   292  2,875
Opened                                2     -         25    20     47
Closed                               (1)    -        (20)   (7)   (28)
                               ---------------------------------------
End of Period                       571     1      2,017   305  2,894
                               =======================================


                               ---------------------------------------
                                  Corporate       Franchised
                               Domestic  Int'l  Domestic  Int'l Total
                               ---------------------------------------
Perfect Pizza restaurants
Beginning of period                   -     -          -   114    114
Opened                                -     -          -     1      1
Closed                                -     -          -    (2)    (2)
                               ---------------------------------------
End of Period                         -     -          -   113    113
                               =======================================


Note: The PJUK Perfect Pizza operations were sold in March 2006.
Restaurant Progression
Papa John's International, Inc.

                                Nine Months Ended September 24, 2006
                               ---------------------------------------
                                  Corporate       Franchised
                               Domestic  Int'l  Domestic  Int'l Total
                               ---------------------------------------
Papa John's restaurants
Beginning of period                 502     2      2,097   325  2,926
Opened                               11     1         82    57    151
Closed                               (1)    -        (47)  (51)   (99)
Acquired                             46     3          -     -     49
Sold                                  -     -        (46)   (3)   (49)
                               ---------------------------------------
End of Period                       558     6      2,086   328  2,978
                               =======================================


                               ---------------------------------------
                                  Corporate       Franchised
                               Domestic  Int'l  Domestic  Int'l Total
                               ---------------------------------------
Perfect Pizza restaurants
Beginning of period                   -     -          -   112    112
Closed                                -     -          -    (3)    (3)
Sold                                  -     -          -  (109)  (109)
                               ---------------------------------------
End of Period                         -     -          -     -      -
                               =======================================


                                Nine Months Ended September 25, 2005
                               ---------------------------------------
                                  Corporate       Franchised
                               Domestic  Int'l  Domestic  Int'l Total
                               ---------------------------------------
Papa John's restaurants
Beginning of period                 568     1      1,997   263  2,829
Opened                                4     -         77    59    140
Converted                             -     -          -     1      1
Closed                               (1)    -        (57)  (18)   (76)
Acquired                              2     -          2     -      4
Sold                                 (2)    -         (2)    -     (4)
                               ---------------------------------------
End of Period                       571     1      2,017   305  2,894
                               =======================================


                               ---------------------------------------
                                  Corporate       Franchised
                               Domestic  Int'l  Domestic  Int'l Total
                               ---------------------------------------
Perfect Pizza restaurants
Beginning of period                   -     -          -   118    118
Opened                                -     -          -     4      4
Converted                             -     -          -    (1)    (1)
Closed                                -     -          -    (8)    (8)
                               ---------------------------------------
End of Period                         -     -          -   113    113
                               =======================================

CONTACT:
Papa John's International, Inc., Louisville
David Flanery,
Chief Financial Officer,
502-261-4753

SOURCE: Papa John's International, Inc.