Papa John's Announces Fourth Quarter 2017 Results and Provides 2018 Outlook
Highlights
- GAAP earnings per diluted share of
$0.81 and adjusted earnings per diluted share of$0.65 in the fourth quarter of 2017, excluding Special items; adjusted earnings per diluted share down 6% from the fourth quarter 2016 - GAAP earnings per diluted share of
$2.83 and adjusted earnings per diluted share of$2.62 for full year 2017, excluding Special items; adjusted earnings per diluted share up 3% over 2016 System-wide North America comparable sales decrease of 3.9% for the fourth quarter and increase of 0.1% for the full year- International comparable sales increases of 2.6% for the fourth quarter and 4.4% for the full year
- 98 net unit openings in the fourth quarter and 102 for the full year, of which all 102 were International
"We know our potential is so much greater than our results, and we are taking significant steps to reinvigorate our record of profitable growth and value creation," said
GAAP and adjusted net income and diluted earnings per share results excluding Special items are summarized below. All highlights are compared to the same period of the prior year, unless otherwise noted on both a 53 week basis as well as a 52 week basis.
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
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GAAP net income- 53 weeks | $ | 28,509 | $ | 32,630 | -12.6 | % | $ | 102,292 | $ | 102,820 | -0.5 | % | ||||||||||||||||
Special items(*) | (5,716 | ) | (7,022 | ) | -18.6 | % | (7,576 | ) | (7,022 | ) | 7.9 | % | ||||||||||||||||
Adjusted net income- 53 weeks | $ | 22,793 | $ | 25,608 | -11.0 | % | $ | 94,716 | $ | 95,798 | -1.1 | % | ||||||||||||||||
53rd week | (3,900 | ) | - | (3,900 | ) | - | ||||||||||||||||||||||
Adjusted net income- 52 weeks | $ | 18,893 | $ | 25,608 | -26.2 | % | $ | 90,816 | $ | 95,798 | -5.2 | % | ||||||||||||||||
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GAAP diluted EPS- 53 weeks | $ | 0.81 | $ | 0.88 | -8.0 | % | $ | 2.83 | $ | 2.74 | 3.3 | % | ||||||||||||||||
Special items (*) | (0.16 | ) | (0.19 | ) | -15.8 | % | (0.21 | ) | (0.19 | ) | 10.5 | % | ||||||||||||||||
Adjusted diluted EPS- 53 weeks | $ | 0.65 | $ | 0.69 | -5.8 | % | $ | 2.62 | $ | 2.55 | 2.7 | % | ||||||||||||||||
53rd week | (0.11 | ) | - | (0.11 | ) | - | ||||||||||||||||||||||
Adjusted diluted EPS- 52 weeks | $ | 0.54 | $ | 0.69 | -21.7 | % | $ | 2.51 | $ | 2.55 | -1.6 | % | ||||||||||||||||
(*) See Special items detail in "Items Impacting Comparability - Non-GAAP Presentation" table. |
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Revenue and Operating Highlights
Consolidated revenues for the fourth quarter were
Consolidated revenues for the full year 2017 were
Consolidated income before income taxes of
- Domestic company-owned restaurant operating income decreased
$6.1 million , or as a percentage of related revenues decreased 3.3%. This was primarily attributable to the impact of negative comparable sales, higher vehicle and workers' compensation insurance costs and higher commodities prices. The higher labor costs from higher minimum wages were offset by lower restaurant bonuses due to the lower sales and operating results. The decrease in operating income was somewhat offset by the benefit from the 53rd week of operations of approximately$2.4 million . North America commissary and other operating income increased approximately$500,000 but as a percentage of related revenues, decreased 0.4%. The benefit from the 53rd week of operations was approximately$2.0 million . The operating income decrease excluding the benefit of the 53rd week was due primarily to higher online operating costs due to digital initiatives as well as lower operating income in our print and promotions subsidiary from lower revenues.North America commissary operating income approximated the prior year.- International operating income increased
$3.3 million , or 1.5% as a percentage of related international revenues. The benefit from the 53rd week of operations was approximately$700,000 . The additional increase in operating income was primarily due to both higher revenues on higher comparable sales and equivalent units and the favorable timing of marketing spend in theUnited Kingdom , which had no impact on full year results. - General and administrative costs increased
$450,000 , improving 0.5% as a percentage of consolidated revenues. Excluding the impact of the 53rd week of$900,000 , general and administrative costs were down$450,000 primarily attributable to lower management incentive costs of$4.7 million , substantially offset by higher salaries and benefits. - Interest expense increased
$2.9 million , or 154.2%, for the fourth quarter. This increase was attributable to both an increase in average outstanding debt, which is primarily due to share repurchases, as well as higher interest rates.
Consolidated income before income taxes was
The effective income tax rates were 9.6% and 24.1% for the fourth quarter and full year 2017, respectively, representing decreases of 22.6% and 7.2% from the prior year comparable periods. The decreases in the effective income tax rates for the fourth quarter and full year are primarily attributable to the impact of the "Tax Cuts and Jobs Act," (the "Tax Act") which was signed into law on
Diluted earnings per share ("EPS") decreased 8.0% for the fourth quarter of 2017 and increased 3.3% for the full year. Excluding Special items, adjusted diluted EPS was
Three Months Ended | Year Ended | |||||||||||||||
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Global restaurant sales growth (a) | 9.9 | % | 5.3 | % | 5.8 | % | 5.2 | % | ||||||||
Global restaurant sales growth, excluding the impact of foreign currency (a) |
9.6 | % | 7.0 | % | 6.3 | % | 6.8 | % | ||||||||
Comparable sales growth (b) | ||||||||||||||||
Domestic company-owned restaurants | (4.7 | %) | 4.8 | % | 0.4 | % | 4.4 | % | ||||||||
(3.5 | %) | 3.4 | % | (0.1 | %) | 3.1 | % | |||||||||
(3.9 | %) | 3.8 | % | 0.1 | % | 3.5 | % | |||||||||
System-wide international restaurants | 2.6 | % | 5.6 | % | 4.4 | % | 6.0 | % | ||||||||
(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 |
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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
Free Cash Flow
The company's free cash flow, a non-GAAP financial measure, for the full year of 2017 and 2016 was as follows (in thousands):
Full Year Ended | ||||||||||
2017 | 2016 | |||||||||
Net cash provided by operating activities (a) | $ | 134,975 | $ | 150,257 | ||||||
Purchases of property and equipment | (52,594 | ) | (55,554 | ) | ||||||
Free cash flow | $ | 82,381 | $ | 94,703 | ||||||
(a) The decrease of |
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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 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 liquidity or 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
Global Restaurant Unit Data
At
Domestic |
Franchised |
Total North |
International | System-wide | ||||||||||||||||
Fourth Quarter |
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Beginning - |
705 | 2,736 | 3,441 | 1,660 | 5,101 | |||||||||||||||
Opened | 5 | 37 | 42 | 118 | 160 | |||||||||||||||
Closed | (1 | ) | (41 | ) | (42 | ) | (20 | ) | (62 | ) | ||||||||||
Acquired | - | 1 | 1 | - | 1 | |||||||||||||||
Sold | (1 | ) | - | (1 | ) | - | (1 | ) | ||||||||||||
Ending - |
708 | 2,733 | 3,441 | 1,758 | 5,199 | |||||||||||||||
Year-to-date |
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Beginning - |
702 | 2,739 | 3,441 | 1,656 | 5,097 | |||||||||||||||
Opened | 9 | 110 | 119 | 257 | 376 | |||||||||||||||
Closed | (3 | ) | (116 | ) | (119 | ) | (155 | ) | (274 | ) | ||||||||||
Acquired | 1 | 1 | 2 | - | 2 | |||||||||||||||
Sold | (1 | ) | (1 | ) | (2 | ) | - | (2 | ) | |||||||||||
Ending - |
708 | 2,733 | 3,441 | 1,758 | 5,199 | |||||||||||||||
Unit growth (decline) | 6 | (6 | ) | - | 102 | 102 | ||||||||||||||
% increase (decrease) | 0.9 | % | (0.2 | %) | - | 6.2 | % | 2.0 | % | |||||||||||
The 2017 International franchise closures include 66 India closures for the year ended
Our development pipeline as of
Items Impacting Comparability - Non-GAAP Presentation
The following table reconciles our GAAP financial results to our adjusted financial results, which are non-GAAP measures, for the fourth quarter and full year ended
Three Months Ended | Full Year Ended | |||||||||||||||||||
(In thousands, except per share amounts) | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
GAAP income before income taxes | $ | 32,064 | $ | 50,573 | $ | 140,342 | $ | 158,809 | ||||||||||||
Special items: | ||||||||||||||||||||
Refranchising and impairment (gains)/losses | 1,674 | (10,222 | ) | 1,674 | (10,222 | ) | ||||||||||||||
Legal settlement | - | (898 | ) | - | (898 | ) | ||||||||||||||
Adjusted income before income taxes | $ | 33,738 | $ | 39,453 | $ | 142,016 | $ | 147,689 | ||||||||||||
53rd week | $ | (5,900 | ) | $ | - | $ | (5,900 | ) | $ | - | ||||||||||
Adjusted income before income taxes - 52 weeks | $ | 27,838 | $ | 39,453 | $ | 136,116 | $ | 147,689 | ||||||||||||
GAAP net income | $ | 28,509 | $ | 32,630 | $ | 102,292 | $ | 102,820 | ||||||||||||
Special items, net of income taxes: | ||||||||||||||||||||
Refranchising and impairment (gains)/losses | 1,323 | (6,455 | ) | 1,323 | (6,455 | ) | ||||||||||||||
Legal settlement | - | (567 | ) | - | (567 | ) | ||||||||||||||
(7,020 | ) | - | (7,020 | ) | - | |||||||||||||||
Equity compensation tax benefit | (19 | ) | - | (1,879 | ) | - | ||||||||||||||
Adjusted net income | $ | 22,793 | $ | 25,608 | $ | 94,716 | $ | 95,798 | ||||||||||||
53rd week | $ | (3,900 | ) | $ | - | $ | (3,900 | ) | $ | - | ||||||||||
Adjusted net income - 52 weeks | $ | 18,893 | $ | 25,608 | $ | 90,816 | $ | 95,798 | ||||||||||||
GAAP diluted earnings per share | $ | 0.81 | $ | 0.88 | $ | 2.83 | $ | 2.74 | ||||||||||||
Special items: | ||||||||||||||||||||
Refranchising and impairment (gains)/losses | 0.04 | (0.17 | ) | 0.04 | (0.17 | ) | ||||||||||||||
Legal settlement | - | (0.02 | ) | - | (0.02 | ) | ||||||||||||||
(0.20 | ) | - | (0.20 | ) | - | |||||||||||||||
Equity compensation tax benefit | - | - | (0.05 | ) | - | |||||||||||||||
Adjusted diluted earnings per share | $ | 0.65 | $ | 0.69 | $ | 2.62 | $ | 2.55 | ||||||||||||
53rd week | $ | (0.11 | ) | $ | - | $ | (0.11 | ) | $ | - | ||||||||||
Adjusted diluted earnings per share - 52 weeks | $ | 0.54 | $ | 0.69 | $ | 2.51 | $ | 2.55 | ||||||||||||
Refranchising and impairment (gains)/losses includes impairment charges in 2016 and 2017 related to our company-owned stores in
The legal settlement represents the favorable 2016 finalization related to the collective and class action litigation, Perrin v. Papa John's
2017 also includes the favorable impact of adopting the new guidance for accounting for share-based compensation. This guidance requires excess tax benefits recognized on stock based awards to be recorded as a reduction of income tax expense rather than stockholders' equity.
The non-GAAP adjusted results shown 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 these items is important for purposes of comparison to prior year results. In addition, management uses these metrics to evaluate the company's underlying operating performance, to analyze trends, and to determine compensation.
Share Repurchase Activity
The following table reflects our repurchases for the fourth quarter and full year 2017 and subsequent repurchases through
Period |
Number |
Cost | |||||||||
Fourth Quarter 2017 | 1,387 | $ | 87,881 | ||||||||
Full Year 2017 | 2,960 | $ | 209,586 | ||||||||
546 | $ | 32,713 | |||||||||
There were 35.1 million and 36.5 million diluted weighted average shares outstanding for the fourth quarter and full year ended
The Company expects to repurchase shares in an amount equal to the remaining authorization by the end of 2019. The timing and volume of share repurchases may be executed at the discretion of management on an opportunistic basis, or pursuant to trading plans or other arrangements. Any share repurchase under this program may be made in the open market, in privately negotiated transactions, or otherwise. The Company continues to evaluate the use of an accelerated share repurchase program to execute a portion of the share repurchase authorization. There can be no assurance as to the amount, timing or prices of repurchases, whether through an accelerated share repurchase program or otherwise. The specific timing and amount of repurchases will vary based on prevailing market conditions and other factors. Repurchases under the Company's share repurchase program may be commenced or suspended from time to time at the Company's discretion without prior notice.
Cash Dividend
We paid a cash dividend of approximately
2018 Key Operating Assumptions and Financial Outlook
In 2018, the Company is targeting the following performance:
- Diluted EPS of
$2.40 to$2.60 in comparison to the$2.83 2017 GAAP EPS. Excluding the$0.11 impact of the 53rd week in 2017, EPS decrease is 4.5% to 12.0% on adjusted 2017 EPS of$2.72 . 2018 Diluted EPS outlook also includes the following assumptions:- EPS will decrease
$0.30 to$0.40 due to lower operating results, primarily from expected continued pressure on Domestic restaurants' sales, higher delivery and insurance costs for our company-owned restaurants and the higher costs for technology and marketing investments. - EPS will decrease
$0.05 to$0.10 related to the impact of the new revenue recognition standard. - EPS will increase an additional
$0.04 to$0.10 for the favorable impact ofU.S. tax legislation above the$0.20 favorable impact in 2017. Our preliminary 2018 income tax rate estimates are 20% to 24%. These estimates are provisional and subject to further interpretation and clarification of the legislation. The tax rate excludes any tax impact from a potential divestiture of ourChina company-owned operations. - EPS will increase
$0.05 to$0.10 due to share repurchases.
- EPS will decrease
North America comparable sales of negative 3% to flat- International comparable sales of 3.0% - 5.0%
- Net global new unit growth of 3.0% - 5.0%
- Block cheese prices are projected to be in the low
$1 .60's - Capital expenditures of
$45 -$55 million - Total Debt/EBITDA ratio of 3.0x to 3.5x
Conference Call and Website Information
A conference call is scheduled for
Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases,
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, share repurchases, dividends, effective tax rates, the impact of the Tax Cuts and Job Act and the adoption of new accounting standards, 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:
- aggressive changes in pricing or other marketing or promotional strategies by competitors, which may adversely affect sales and profitability; and new product and concept developments by food industry competitors;
- changes in consumer preferences or consumer buying habits, including the growing popularity of delivery aggregators, as well as changes in general economic conditions or other factors that may affect consumer confidence and discretionary spending;
- the adverse impact on the company or our results caused by product recalls, food quality or safety issues, incidences of foodborne illness, food contamination and other general public health concerns about our company-owned or franchised restaurants or others in the restaurant industry;
- failure to maintain our brand strength, quality reputation and consumer enthusiasm for our better ingredients marketing and advertising strategy, or our ability to manage social media and shift to more effective digital marketing strategies;
- the ability of the company and its franchisees to meet planned growth targets and operate new and existing restaurants profitably, including difficulties finding qualified franchisees, store level employees or suitable sites;
- increases in food costs or sustained higher other operating costs. This could include increased employee compensation, benefits, insurance, tax rates, new regulatory requirements or increasing compliance costs;
- increases in insurance claims and related costs for programs funded by the company up to certain retention limits, including medical, owned and non-owned vehicles, workers' compensation, general liability and property;
- disruption of our supply chain or commissary operations which could be caused by our sole source of supply of cheese or limited source of suppliers for other key ingredients or more generally due to weather, natural disasters including drought, disease, or geopolitical or other disruptions beyond our control;
- increased risks associated with our international operations, including economic and political conditions, instability or uncertainty in our international markets, especially emerging markets, fluctuations in currency exchange rates, difficulty in meeting planned sales targets and new store growth, and;
- the impact of current or future claims and litigation, including labor and employment-related claims;
- current, proposed or future legislation that could impact our business;
- failure to effectively execute succession planning;
- disruption of critical business or information technology systems, or those of our suppliers, and risks associated with systems failures and data privacy and security breaches, including theft of confidential company, employee and customer information, including payment cards; and
- changes in Federal or state income, general and other tax laws, rules and regulations, including changes from the Tax Cuts and Jobs Act and any related
Treasury regulations, rules or interpretations if and when issued; and - changes in generally accepted accounting principles including new standards for revenue recognition and leasing.
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
For more information about the company, please visit www.papajohns.com.
Papa John's |
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Condensed Consolidated Statements of Income | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
(In thousands, except per share amounts) | (Unaudited) | (Unaudited) | ||||||||||||||||||
Revenues: | ||||||||||||||||||||
Domestic company-owned restaurant sales | $ | 210,799 | $ | 206,963 | $ | 816,718 | $ | 815,931 | ||||||||||||
26,967 | 26,426 | 106,729 | 102,980 | |||||||||||||||||
194,095 | 177,983 | 733,627 | 681,606 | |||||||||||||||||
International | 35,745 | 28,247 | 126,285 | 113,103 | ||||||||||||||||
Total revenues | 467,606 | 439,619 | 1,783,359 | 1,713,620 | ||||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Operating costs (excluding depreciation and amortization shown separately below): |
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Domestic company-owned restaurant expenses | 174,921 | 165,007 | 664,640 | 651,536 | ||||||||||||||||
180,474 | 164,859 | 685,206 | 631,475 | |||||||||||||||||
International expenses | 21,714 | 17,573 | 78,971 | 71,509 | ||||||||||||||||
General and administrative expenses | 40,843 | 40,393 | 158,183 | 163,812 | ||||||||||||||||
Depreciation and amortization | 11,376 | 10,598 | 43,668 | 40,987 | ||||||||||||||||
Total costs and expenses | 429,328 | 398,430 | 1,630,668 | 1,559,319 | ||||||||||||||||
Refranchising and impairment gains/(losses), net | (1,674 | ) | 10,222 | (1,674 | ) | 10,222 | ||||||||||||||
Operating income | 36,604 | 51,411 | 151,017 | 164,523 | ||||||||||||||||
Legal settlement expense | - | 898 | - | 898 | ||||||||||||||||
Net interest expense | (4,540 | ) | (1,736 | ) | (10,675 | ) | (6,612 | ) | ||||||||||||
Income before income taxes | 32,064 | 50,573 | 140,342 | 158,809 | ||||||||||||||||
Income tax expense | 3,089 | 16,294 | 33,817 | 49,717 | ||||||||||||||||
Net income before attribution to noncontrolling interests | 28,975 | 34,279 | 106,525 | 109,092 | ||||||||||||||||
Income attributable to noncontrolling interests | (466 | ) | (1,649 | ) | (4,233 | ) | (6,272 | ) | ||||||||||||
Net income attributable to the company | $ | 28,509 | $ | 32,630 | $ | 102,292 | $ | 102,820 | ||||||||||||
Calculation of income for earnings per share: | ||||||||||||||||||||
Net income attributable to the company | $ | 28,509 | $ | 32,630 | $ | 102,292 | $ | 102,820 | ||||||||||||
Change in noncontrolling interest redemption value | - | 225 | 1,419 | 567 | ||||||||||||||||
Net income attributable to participating securities | (118 | ) | (132 | ) | (423 | ) | (420 | ) | ||||||||||||
Net income attributable to common shareholders | $ | 28,391 | $ | 32,723 | $ | 103,288 | $ | 102,967 | ||||||||||||
Basic earnings per common share | $ | 0.82 | $ | 0.89 | $ | 2.86 | $ | 2.76 | ||||||||||||
Diluted earnings per common share | $ | 0.81 | $ | 0.88 | $ | 2.83 | $ | 2.74 | ||||||||||||
Basic weighted average common shares outstanding | 34,745 | 36,892 | 36,083 | 37,253 | ||||||||||||||||
Diluted weighted average common shares outstanding | 35,052 | 37,311 | 36,522 | 37,608 | ||||||||||||||||
Dividends declared per common share | $ | 0.225 | $ | 0.200 | $ | 0.850 | $ | 0.750 | ||||||||||||
Papa John's |
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Condensed Consolidated Balance Sheets | |||||||||
2017 | 2016 | ||||||||
(In thousands) | |||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 22,345 | $ | 15,563 | |||||
Accounts receivable, net | 64,644 | 59,691 | |||||||
Notes receivable, net | 4,333 | 3,417 | |||||||
Income tax receivable | 3,903 | 2,372 | |||||||
Inventories | 30,620 | 25,132 | |||||||
Prepaid expenses and other current assets | 38,016 | 33,143 | |||||||
Assets held for sale | 6,133 | 6,257 | |||||||
Total current assets | 169,994 | 145,575 | |||||||
Property and equipment, net | 234,331 | 230,473 | |||||||
Notes receivable, less current portion, net | 15,568 | 10,141 | |||||||
86,892 | 85,529 | ||||||||
Deferred income taxes | 585 | 769 | |||||||
Other assets | 48,183 | 40,078 | |||||||
Total assets | $ | 555,553 | $ | 512,565 | |||||
Liabilities and stockholders' equity (deficit) |
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Current liabilities: | |||||||||
Accounts payable | $ | 32,006 | $ | 42,701 | |||||
Income and other taxes payable | 10,561 | 8,540 | |||||||
Accrued expenses and other current liabilities | 70,293 | 76,789 | |||||||
Current portion of long-term debt | 20,000 | - | |||||||
Total current liabilities | 132,860 | 128,030 | |||||||
Deferred revenue | 2,652 | 3,313 | |||||||
Long-term debt, net | 446,565 | 299,820 | |||||||
Deferred income taxes | 12,546 | 10,047 | |||||||
Other long-term liabilities | 60,146 | 53,093 | |||||||
Total liabilities | 654,769 | 494,303 | |||||||
Redeemable noncontrolling interests | 6,738 | 8,461 | |||||||
Total stockholders' equity (deficit) |
(105,954 | ) | 9,801 | ||||||
Total liabilities, redeemable noncontrolling interests and stockholders' equity (deficit) |
$ | 555,553 | $ | 512,565 | |||||
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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
Papa John's |
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Consolidated Statements of Cash Flows | ||||||||||
Year Ended | ||||||||||
(In thousands) | ||||||||||
Operating activities | ||||||||||
Net income before attribution to noncontrolling interests | $ | 106,525 | $ | 109,092 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Provision for uncollectible accounts and notes receivable | 29 | 409 | ||||||||
Depreciation and amortization | 43,668 | 40,987 | ||||||||
Deferred income taxes | 498 | 11,624 | ||||||||
Stock-based compensation expense | 10,413 | 10,123 | ||||||||
Gain on refranchising | - | (11,572 | ) | |||||||
Impairment loss | 1,674 | 1,350 | ||||||||
Other | 3,375 | 3,337 | ||||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||
Accounts receivable | (7,358 | ) | 1,557 | |||||||
Income tax receivable | (1,531 | ) | 4,100 | |||||||
Inventories | (5,485 | ) | (3,639 | ) | ||||||
Prepaid expenses and other current assets | (5,572 | ) | (3,210 | ) | ||||||
Other assets and liabilities | (742 | ) | (6,269 | ) | ||||||
Accounts payable | (8,743 | ) | (916 | ) | ||||||
Income and other taxes payable | 1,897 | 9 | ||||||||
Accrued expenses and other current liabilities | (3,012 | ) | (7,960 | ) | ||||||
Deferred revenue | (661 | ) | 1,235 | |||||||
Net cash provided by operating activities | 134,975 | 150,257 | ||||||||
Investing activities | ||||||||||
Purchases of property and equipment | (52,593 | ) | (55,554 | ) | ||||||
Loans issued | (8,103 | ) | (3,210 | ) | ||||||
Repayments of loans issued | 4,185 | 8,569 | ||||||||
Acquisitions, net of cash acquired | (21 | ) | (13,352 | ) | ||||||
Proceeds from divestitures of restaurants | - | 16,844 | ||||||||
Other | 34 | 429 | ||||||||
Net cash used in investing activities | (56,498 | ) | (46,274 | ) | ||||||
Financing activities | ||||||||||
Proceeds from issuance of term loan | 400,000 | - | ||||||||
Repayments of term loan | (5,000 | ) | - | |||||||
Net (repayments) proceeds of revolving credit facility | (225,575 | ) | 44,575 | |||||||
Debt issuance costs | (3,181 | ) | - | |||||||
Cash dividends paid | (30,720 | ) | (27,896 | ) | ||||||
Tax payments for equity award issuances | (2,428 | ) | (6,024 | ) | ||||||
Proceeds from exercise of stock options | 6,260 | 7,060 | ||||||||
Acquisition of Company common stock | (209,586 | ) | (122,381 | ) | ||||||
Contributions from noncontrolling interest holders | 2,956 | 690 | ||||||||
Distributions to noncontrolling interest holders | (5,449 | ) | (5,610 | ) | ||||||
Other | 663 | 556 | ||||||||
Net cash used in financing activities | (72,060 | ) | (109,030 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 365 | (396 | ) | |||||||
Change in cash and cash equivalents | 6,782 | (5,443 | ) | |||||||
Cash and cash equivalents at beginning of period | 15,563 | 21,006 | ||||||||
Cash and cash equivalents at end of period | $ | 22,345 | $ | 15,563 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180227006523/en/
Papa John's
Chief Financial Officer
or
Vice President of Investor Relations and Strategy
Source: Papa John's
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