SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): February 27, 2001 PAPA JOHN'S INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) DELAWARE 61-1203323 (State of other jurisdiction of (I.R.S. Employer incorporation or organization identification number) 2002 PAPA JOHN'S BOULEVARD LOUISVILLE, KENTUCKY 40299-2334 (Address of principal executive offices) (502) 261-7272 (Registrant's telephone, including area code)
ITEM 5. OTHER EVENTS On February 27, 2001, Papa John's International, Inc. announced financial results for the fourth quarter 2000, as well as full-year 2000. The Company also reported that the previously announced fourth quarter 2000 special charge would total $24.1 million ($14.9 million, net of tax). In additional, the Company announced that its Board of Directors had approved an increase to $275 million (from $225 million) in the amount of the Company's common stock that may be repurchased through December 30, 2001. The Company also provided additional guidance for 2001. This summary of the attached press release is qualified in its entirety by the complete text of such document, a copy of which is attached hereto as Exhibit 99.1. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibit 99.1 Press Release dated February 27, 2001.
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: March 9, 2001 /s/ J. David Flanery -------------------------- J. David Flanery Vice President of Finance and Principal Accounting Officer
EXHIBIT INDEX EXHIBIT NO. - ------------ 99.1 Press Release dated February 27, 2001
EXHIBIT 99.1 FOR MORE INFORMATION, CONTACT: Chris Sternberg Vice President, Investor Relations 502-261-4934 PAPA JOHN'S REPORTS FOURTH QUARTER AND FULL-YEAR 2000 RESULTS STOCK REPURCHASE AUTHORIZATION INCREASED TO $275 MILLION; ADDITIONAL GUIDANCE ISSUED FOR 2001 HIGHLIGHTS - 4Q 2000 EPS (BEFORE SPECIAL CHARGES) OF $0.47 VS. $0.46 IN 1999 - FULL-YEAR 2000 EPS (BEFORE SPECIAL CHARGES) OF $1.90 VS. $1.64 IN 1999 - SYSTEMWIDE COMPARABLE SALES INCREASE OF 2.0% IN 4Q 2000 AND 2.3% FOR FULL-YEAR 2000 (31 CONSECUTIVE QUARTERS OF COMPARABLE SALES INCREASES) - 119 RESTAURANT OPENINGS IN 4Q 2000 AND 369 IN FULL-YEAR 2000 - EPS OF $1.90 TO $2.15 PROJECTED FOR 2001 Louisville, Kentucky (February 27, 2001) - Papa John's International, Inc. (Nasdaq: PZZA) today announced record revenues of $261.3 million for the fourth quarter of 2000, representing an increase of 21.2% over revenues of $215.5 million for the same period in 1999. The fourth quarter of 2000 consisted of 14 weeks of operations compared to 13 weeks in 1999. In line with the company's previously issued guidance, diluted earnings per share before special charges were $0.47 for the fourth quarter of 2000, compared to $0.46 per share for the comparable quarter in 1999, a 2.2% increase. Net income before special charges was $10.8 million for the fourth quarter of 2000 compared to $14.2 million for the comparable quarter in 1999. The decrease was expected, resulting primarily from higher net interest expense of $3.4 million associated with the company's stock repurchase program. EBITDA before special charges was $28.7 million for the fourth quarter of 2000 compared to $29.1 million for the same quarter in 1999, a 1.2% decrease. Record revenues of $944.7 million were achieved for the full-year ended December 31, 2000, an increase of 17.3% over 1999 revenues of $805.3 million. The 2000 fiscal year consisted of 53 weeks of operations compared to 52 weeks in 1999. Diluted earnings per share before special charges were $1.90 for 2000 compared to $1.64 for 1999, a 15.9% increase. Net income before special charges was $47.4 million for 2000 compared to $51.1 million for fiscal 1999. The decrease was expected, resulting primarily from higher net interest expense of $9.0 million associated with the company's stock repurchase program. EBITDA before special charges was $116.7 million for full-year 2000 compared to $103.4 million for fiscal 1999, a 12.8% increase. The company also reported special charges during the quarter of $24.1 million ($14.9 million, net of tax), as previously announced. When combined with the $1.0 million of advertising litigation costs incurred earlier in 2000, this results in total special charges during 2000 of $25.1 million ($15.6 million, net of tax). The company incurred advertising litigation costs of $4.8 million ($3.0 million, net of tax) in the fourth quarter of 1999, and $6.1 million ($3.8 million, net of tax) for full-year 1999. After the effect of all such special charges, the company reported a net loss of $4.2 million, or $0.18 per diluted share, for the fourth quarter of 2000, and net income of $31.8 million, or $1.28 per diluted share, for full-year 2000. Net income was $11.2 million and diluted earnings per share were $0.36 for the fourth quarter of 1999, and net income was $ 47.3 million and diluted earnings per share were $1.52 for full year 1999, after the effect of special charges. For the quarter, systemwide comparable sales increased 2.0% (3.3% for company-owned restaurants and 1.5% for franchised restaurants), representing comparable sales increases for 31 consecutive quarters. For the year, systemwide comparable sales increased 2.3% (3.0% for company-owned restaurants and 2.1% for franchised restaurants). During 2000, 369 restaurants were opened (44 company-owned and 314 franchised Papa John's restaurants and 11 Perfect Pizza franchised restaurants), including
119 in the fourth quarter (14 company-owned and 99 franchised Papa John's restaurants and 6 Perfect Pizza franchised restaurants). As of December 31, 2000, there were 2,612 Papa John's restaurants (641 company-owned and 1,971 franchised) operating in 49 states and 10 international markets. Papa John's also owns or operates an additional 205 Perfect Pizza restaurants (3 company-owned and 202 franchised) in the United Kingdom. FOURTH QUARTER 2000 SPECIAL CHARGES The $24.1 million of special charges in the fourth quarter of 2000 consist of estimated costs related to: (1) the impairment of the carrying value of 52 restaurants, based on certain impairment indicators and forecasted future cash flows ($6.8 million); (2) the impairment or disposal of certain other assets, principally in the technology area, due to changes in the company's future plans with respect to their use and the related impact on forecasted future cash flows ($6.7 million); (3) the establishment of a reserve for the portion of certain franchisee notes receivable expected to be uncollectible ($4.2 million); (4) the company's planned closure of 13 underperforming restaurants in 2001 ($3.1 million); (5) the closing of 20 field operations offices (principally to allow our operations area supervisors and district managers to spend more time in our restaurants), severance and exit costs ($2.6 million); and (6) miscellaneous other charges ($700,000). STOCK REPURCHASE AUTHORIZATION The company also announced that its Board of Directors has approved an increase to $275 million (from $225 million) in the amount of the company's common stock that may be repurchased from time to time through December 30, 2001. The authorization includes both open market purchases as well as private transactions. To date, the company has repurchased approximately 7.9 million shares at a cost of $195 million under the repurchase program. After such repurchases, the company has approximately 23.0 million shares of common stock outstanding on a fully-diluted basis. FOURTH QUARTER 2000 OPERATING RESULTS During the fourth quarter of 2000, domestic corporate restaurant sales increased 19.8% to $126.3 million from $105.4 million for the same period in 1999, primarily resulting from a 10.4% increase in the number of equivalent company-owned domestic Papa John's restaurants open in the 2000 period compared to the 1999 period, coupled with a 3.3% comparable sales increase for the quarter. Domestic franchise sales increased 20.1% to $335.8 million from $279.6 million for the same period in 1999, primarily resulting from a 14.5% increase in the number of equivalent franchised domestic Papa John's restaurants open in the 2000 period compared to the 1999 period, coupled with a 1.5% comparable sales increase for the quarter. The remainder of the percentage sales increases resulted from an additional week of operations in the fourth quarter of 2000 compared to the fourth quarter of 1999.
The fourth quarter comparable sales base for domestic corporate restaurants consisted of 534 units, or 87.5% of total equivalent units, and the domestic franchise base consisted of 1,524 units or 82.6% of total equivalent units. Average weekly sales for restaurants included in the corporate comparable base were $15,147, while other corporate units averaged $12,184 for an overall average of $14,775. Average weekly sales for the restaurants included in the franchise comparable base were $13,569, while other franchise units averaged $10,259 for an overall average of $12,992. Domestic franchise royalties increased 18.1% to $13.0 million in the fourth quarter of 2000 from $11.0 million for the same period in 1999, resulting from the increase in domestic franchise sales previously described. Domestic franchise and development fees were essentially unchanged for the fourth quarter of 2000 compared to the same period in 1999, as the decrease in number of domestic franchise openings in 4Q 2000 was offset by an increase in average fees per restaurant opening during the quarter. The restaurant operating margin at domestic company-owned units was 18.4% in the fourth quarter 2000 compared to 19.1% for the same period in 1999, consisting of the following differences: - Cost of sales was 0.8% lower in 2000 due primarily to favorable cheese prices, partially offset by increases in certain other commodity costs. - Salaries and benefits were 1.3% higher in 2000 due primarily to higher wage rates. - Advertising and related costs were 1.4% lower in 2000 due primarily to higher than normal levels of advertising in the fourth quarter of 1999 in response to the overall market and competitive environment. - Occupancy costs were 0.1% higher in 2000 due primarily to higher utility costs. - Other operating expenses were 1.5% higher in 2000 due primarily to increases in mileage reimbursement for drivers, sponsorship fees and the provision for potentially uncollected accounts receivable as compared to 1999. Domestic commissary and equipment and other sales increased 19.0% to $112.1 million in the fourth quarter of 2000 from $94.2 million for the same period in 1999, primarily resulting from the franchised equivalent unit and sales growth previously noted. Commissary, equipment and other margin was 9.8% in the fourth quarter 2000 compared to 10.1% for the same period in 1999, as the impact of lower cheese costs was more than offset by increased labor costs and an increase in the provision for potentially uncollectible accounts receivable. The significant increase in international revenues and operating expenses in the fourth quarter of 2000, compared to the same period in 1999, is due primarily to the company's acquisition of Perfect Pizza in the United Kingdom which occurred on
November 29, 1999. The fourth quarter of 2000 includes three months of Perfect Pizza operations compared to only one month in the fourth quarter of 1999. General and administrative expenses increased to 8.0% of revenues in the fourth quarter of 2000 compared to 6.3% of revenues in the comparable period in 1999. This increase is primarily due to the cost of additional support services, such as field marketing, training and international development required for our expanded operations, as well as the addition of Perfect Pizza. Pre-opening and other general expenses increased to $1.7 million in the fourth quarter of 2000 from $0.9 million for the comparable period in 1999. Pre-opening costs of $390,000 and relocation costs of $676,000 were included in the 2000 amount as compared to pre-opening costs of $378,000 and relocation costs of $173,000 in the 1999 amount. The remainder of the costs included in pre-opening and other general expenses principally relates to net losses on restaurant and other asset dispositions. Depreciation and amortization was unchanged at 3.4% of revenues for both periods, as the impact of 2000 capital expenditures and acquisitions was offset by an extra week of operating revenues in the fourth quarter of 2000. Net interest expense was $2.5 million in the fourth quarter of 2000 compared to net interest income of $0.9 million for the comparable period in 1999, due to the cash used and debt incurred by the company to fund the stock repurchase program. The effective income tax rate was 38.0% in the fourth quarter of 2000 compared to 37.4% for the comparable period in 1999, due primarily to the sale of certain tax-exempt investments during the fourth quarter of 1999 to fund the Perfect Pizza acquisition and to begin funding of the stock repurchase program. FULL-YEAR 2000 OPERATING RESULTS For full-year 2000, domestic corporate restaurant sales increased 15.7% to $456.6 million from $394.6 million for 1999, primarily resulting from a 13.2% increase in the number of equivalent company-owned domestic units open in 2000 compared to 1999, coupled with a 3.0% comparable sales increase in 2000. Domestic franchise sales increased 17.6% to $1.212 billion in 2000 from $1.031 billion for 1999, primarily resulting from a 16.9% increase in the number of equivalent franchised domestic restaurants open in 2000 compared to 1999, coupled with a 2.1% comparable sales increase in 2000. The 2000 comparable sales base for domestic corporate restaurants consisted of 498 units, or 83.6% of the total equivalent units, and the domestic franchise base consisted of 1,281 units or 72.6% of the total equivalent units. Average weekly sales for restaurants included in the corporate comparable base were $14,917, while other corporate units averaged $12,167, for an overall average of $14,466. Average weekly
sales for restaurants included in the franchise comparable base were $13,836, while other franchise units averaged $10,670, for an overall average of $12,969. Domestic franchise royalties increased 16.2% to $47.1 million in 2000 from $40.6 million for 1999, due to the increase in domestic franchise sales previously described. Domestic franchise and development fees decreased 14.6% to $5.6 million for 2000 from $6.5 million for 1999, due primarily to 74 fewer domestic franchise unit openings in 2000 compared to 1999. The decrease in franchise unit openings was partially offset by an increase in average fees per restaurant opening. Restaurant operating margin at domestic company-owned restaurants was 19.2% in 2000 compared to 19.9% for the same period in 1999, consisting of the following differences: - Cost of sales was 1.0% lower in 2000 due primarily to favorable cheese prices, partially offset by increases in certain other commodity costs. - Salaries and benefits were 0.9% higher in 2000 due primarily to increasing wage rates. - Advertising and related costs were unchanged at 9.1% of restaurant sales for both years. - Occupancy costs were 0.1% higher in 2000 due primarily to increasing utility costs. - Other operating expenses were 0.7% higher in 2000, due primarily to increases in mileage reimbursement for drivers, sponsorship fees and the provision for potentially uncollectible accounts receivable as compared to 1999. Domestic commissary and equipment and other sales increased 12.4% to $404.5 million in 2000 from $360.0 million for 1999, resulting primarily from the franchised equivalent unit and sales growth previously noted. Commissary, equipment and other margin was 10.3% in 2000 compared to 9.4% in 1999. The increased operating margin reflects lower commodity costs, primarily resulting from lower cheese costs. The significant increase in international revenues and operating expenses in 2000 compared to 1999 results primarily from the acquisition of Perfect Pizza in the United Kingdom that occurred on November 29, 1999. A full year of Perfect Pizza operations is included in 2000 compared to only one month of operations in 1999. General and administrative expenses increased to 7.7% of revenues for full-year 2000 compared to 6.8% of revenues in 1999. This increase is primarily due to the cost of additional support services, such as field marketing, training and international development, required for our expanded operations as well as the addition of Perfect Pizza.
Pre-opening and other general expenses decreased to $2.2 million in 2000 from $3.4 million in 1999. Pre-opening costs of $1.1 million, relocation costs of $1.3 million and net gains on restaurant and other asset dispositions of $200,000 were included in the 2000 amount, as compared to pre-opening costs of $759,000, relocation costs of $1.3 million and net losses on restaurant and other asset dispositions of $1.4 million in 1999. Depreciation and amortization was 3.6% of revenues in 2000 compared to 3.1% for 1999, due primarily to a full year of depreciation on the corporate headquarters facility and a full year of goodwill amortization on the Perfect Pizza acquisition in 2000 as compared to only a partial year impact of each of these items in 1999. Net interest expense was $5.8 million in 2000 compared to net interest income of $3.2 million in 1999, due to the cash used and debt incurred to fund the stock repurchase program. The effective income tax rate was 38.3% in 2000 compared to 37.5% for 1999, due primarily to the sale of certain tax-exempt investments during the fourth quarter of 1999 to fund the Perfect Pizza acquisition and to begin funding of the stock repurchase program. 2001 GUIDANCE The company projects 2001 earnings in the range of $1.90 to $2.15 per share (before the impact of any share repurchases during 2001). In 2001, the company projects: - 210 to 275 restaurant openings (165 to 195 domestic franchise, 30 to 60 international franchise and 15 to 20 corporate restaurants). Consistent with prior years, restaurant openings by quarter are scheduled to increase as the year progresses, with approximately 60% of total openings planned for the last two quarters of 2001. - The closure of 40 to 80 franchise and 15 to 20 corporate restaurants. - Domestic system restaurant sales growth of 4% to 5%, including flat to 2% comparable sales growth. - An operating margin of 19.0% to 20.0% at corporate domestic restaurants. - An operating margin of 9.7% to 10.0% for its domestic "commissary, equipment and other" operations. - International system restaurant sales growth of 10% to 15%. - An operating margin of 25.0% to 30.0% on its international operations. - General and administrative expenses of 7.4% to 7.7% of revenues. - Depreciation and amortization of 3.7% to 3.9% of revenues.
- Pre-opening and other general expenses of $2.0 million to $2.5 million, including gains of approximately $1.2 million from the sale of restaurants during the first quarter of 2001. - Net interest expense of $8.6 million to $8.9 million. - An effective tax rate of 37.8%. - Capital expenditures of $30 to $35 million. Quarterly earnings expectations are as follows: Q1 - $0.51 to $0.55; Q2 - $0.46 to $0.53; Q3 - $0.42 to $0.49; and Q4 - $0.51 to $0.58. The company intends to narrow both its full-year and quarterly earnings ranges as the year proceeds, and will announce adjustments to expectations as warranted. Headquartered in Louisville, Kentucky, as of February 26, 2001, Papa John's had 2,625 restaurants (641 company-owned and 1,984 franchised) operating in 49 states and 10 international markets. Papa John's also owns or operates an additional 204 Perfect Pizza restaurants (2 company-owned and 202 franchised) in the United Kingdom. For more information about the company, please visit www.papajohns.com. 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. Factors that can cause actual results to materially differ include: the uncertainties associated with litigation, including additional unforeseen costs, expenses or damages which may be incurred with respect to the pending litigation with Pizza Hut, Inc.; increased advertising, promotions and discounting by competitors which may adversely affect sales; the ability of the company and its franchisees to open new restaurants and operate new and existing restaurants profitably; increases in food, labor, utilities, employee benefits and similar costs; economic and political conditions in the countries in which the company or its franchisees operate; and new product and concept developments by food industry competitors. Further information regarding factors that could affect the company's financial and other results is included in the company's Forms 10Q and 10K, filed with the Securities and Exchange Commission. Conference Call --------------- Date: February 28, 2001 3:00 PM EST U.S./Canada: 800-890-5040
International: 706-643-9503 Conference ID: None The conference call replay will be available on the company's web site at http://www.papajohns.com. To access the replay, click on Investor Relations, then Audio Archives.
SUMMARY FINANCIAL DATA PAPA JOHN'S INTERNATIONAL, INC. THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 26, DECEMBER 31, DECEMBER 26, 2000 1999 2000 1999 ---- ---- ---- ---- (In thousands, except per share amounts) Revenues $ 261,290 $ 215,510 $ 944,677 $ 805,325 ============= ============= ============= ============= Income before special charges $ 10,790 $ 14,195 $ 47,395 $ 51,105 Advertising litigation expense, net of tax - (2,992) (627) (3,819) Special charge, net of tax (14,944) - (14,944) - -------------- ------------- -------------- ------------- Net income (loss) ($4,154) $ 11,203 $ 31,824 $ 47,286 ============== ============= ============== ============= Diluted earnings per share before special charges $ 0.47 $ 0.46 $ 1.90 $ 1.64 Advertising litigation expense, net of tax - (0.10) (0.02) (0.12) Special charge, net of tax (0.65) - (0.60) - -------------- ------------- -------------- ------------- Diluted earnings (loss) per share $ (0.18) $ 0.36 $ 1.28 $ 1.52 ============== ============= ============== ============= Diluted weighted-average shares outstanding 22,953 30,930 24,907 31,080 ============== ============= ============== =============
RESTAURANT PROGRESSION PAPA JOHN'S INTERNATIONAL DECEMBER 31, 2000 4Q 2000 YEAR-TO-DATE 2000 ------------------------------------------------ ------------------------------------------------ FRANCHISE FRANCHISE ------------------------- -------------------------- CORPORATE DOMESTIC INT'L TOTAL CORPORATE DOMESTIC INT'L TOTAL ------------------------------------------------ ------------------------------------------------ PAPA JOHN'S RESTAURANTS Beginning of period 622 1,831 56 2,509 573 1,681 26 2,280 Opened (A) 14 86 13 113 44 271 43 358 Converted 3 - - 3 8 - - 8 Closed - (13) - (13) (2) (32) - (34) Acquired (sold) 2 (2) - - 18 (18) - - ------------------------------------------------ ------------------------------------------------ End of period 641 1,902 69 2,612 641 1,902 69 2,612 ================================================ ================================================ PERFECT PIZZA RESTAURANTS Beginning of period 7 - 196 203 12 - 194 206 Opened - - 6 6 - - 11 11 Converted (3) - - (3) (8) - - (8) Closed - - (1) (1) (1) - (3) (4) Acquired (sold) (1) - 1 - - - - - ------------------------------------------------ -------------------------------------------- End of period 3 - 202 205 3 - 202 205 ================================================ ============================================ DECEMBER 26, 1999 4Q 1999 YEAR-TO-DATE 1999 ------------------------------------------------ ----------------------------------------------- FRANCHISE FRANCHISE ------------------------- -------------------------- CORPORATE DOMESTIC INT'L TOTAL CORPORATE DOMESTIC INT'L TOTAL ------------------------------------------------ ----------------------------------------------- PAPA JOHN'S RESTAURANTS Beginning of period 548 1,589 22 2,159 514 1,365 6 1,885 Opened 17 97 4 118 36 345 20 401 Converted - - - - - - - - Closed - - - - (1) (8) - (9) Acquired (sold) 6 (6) - - 22 (22) - - Restated 2 1 - 3 2 1 - 3 ------------------------------------------------ ----------------------------------------------- End of period 573 1,681 26 2,280 573 1,681 26 2,280 ================================================ =============================================== PERFECT PIZZA RESTAURANTS Beginning of period - 11/29/99 15 - 190 205 15 - 190 205 Opened - - 1 1 - - 1 1 Converted - - - - - - - - Closed - - - - - - - - Acquired (sold) (3) - 3 - (3) - 3 - ------------------------------------------------ ---------------------------------------------- End of period 12 - 194 206 12 - 194 206 ================================================ ============================================== (A) Includes one corporate Papa John's UK restaurant opened during 4Q 2000 and two restaurants year-to-date.
PAPA JOHN'S INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations THREE MONTHS ENDED YEAR ENDED --------------------------------------------------------------------- DEC. 31, 2000 DEC. 26, 1999 DEC. 31, 2000 DEC. 26, 1999 --------------------------------------------------------------------- (In thousands, except per share amounts) (UNAUDITED) (UNAUDITED) (UNAUDITED) REVENUES: DOMESTIC: Restaurant sales $ 126,295 $ 105,420 $ 456,637 $ 394,636 Franchise royalties 12,976 10,989 47,145 40,567 Franchise and development fees 1,745 1,791 5,559 6,511 Commissary sales 96,657 79,819 351,255 306,909 Equipment and other sales 15,399 14,372 53,233 53,078 INTERNATIONAL: Royalties and franchise development fees 1,538 558 5,302 1,063 Restaurant and commissary sales 6,680 2,561 25,546 2,561 --------------------------------------------------------------------- TOTAL REVENUES 261,290 215,510 944,677 805,325 COSTS AND EXPENSES: DOMESTIC: Restaurant expenses: Cost of sales 30,407 26,230 111,609 100,261 Salaries and benefits 35,841 28,563 127,318 106,713 Advertising and related costs 11,090 10,763 41,729 36,008 Occupancy costs 6,358 5,164 23,248 19,541 Other operating expenses 19,357 14,598 65,074 53,463 --------------------------------------------------------------------- 103,053 85,318 368,978 315,986 DOMESTIC: Commissary, equipment and other expenses: Cost of sales 84,882 71,774 304,338 274,613 Salaries and benefits 7,716 6,028 27,682 23,719 Other operating expenses 8,435 6,863 30,736 27,702 --------------------------------------------------------------------- 101,033 84,665 362,756 326,034 International operating expenses 6,016 2,090 21,700 2,090 General and administrative expenses 20,788 13,515 72,402 54,386 Advertising litigation expense - 4,782 1,017 6,104 Special Charge 24,105 - 24,105 - Pre-opening and other general expenses 1,695 862 2,158 3,414 Depreciation and amortization 8,783 7,298 34,172 24,827 --------------------------------------------------------------------- TOTAL COSTS AND EXPENSES 265,473 198,530 887,288 732,841 --------------------------------------------------------------------- OPERATING INCOME (LOSS) (4,183) 16,980 57,389 72,484 Other income (expense): Investment income 374 925 1,943 3,384 Interest expense (2,892) - (7,746) (151) --------------------------------------------------------------------- INCOME (LOSS) BEFORE INCOME TAXES (6,701) 17,905 51,586 75,717 Income tax expense (benefit) (2,547) 6,702 19,762 28,431 --------------------------------------------------------------------- NET INCOME (LOSS) $ (4,154) $ 11,203 $ 31,824 $ 47,286 ===================================================================== BASIC EARNINGS (LOSS) PER SHARE $ (0.18) $ 0.37 $ 1.29 $ 1.57 ===================================================================== DILUTED EARNINGS (LOSS) PER SHARE $ (0.18) $ 0.36 $ 1.28 $ 1.52 ===================================================================== Basic weighted-average shares outstanding 22,953 30,315 24,703 30,195 ===================================================================== Diluted weighted-average shares outstanding 22,953 30,930 24,907 31,080 ===================================================================== Note: Certain 1999 amounts have been reclassified to conform to the 2000 presentation.
SUPPLEMENTAL INFORMATION Papa John's International, Inc. and Subsidiaries Quarterly Condensed Consolidated Statements of Operations - 2000 --------------------------------------------------------------------------------- DEC. 31, 2000 SEPT. 24, 2000 JUN. 25, 2000 MAR. 26, 2000 YTD 2000 --------------------------------------------------------------------------------- (In thousands, except per share amounts) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) REVENUES: DOMESTIC: Restaurant sales $ 126,295 $ 108,542 $ 111,645 $ 110,155 $ 456,637 Franchise royalties 12,976 11,432 11,615 11,122 47,145 Franchise and development fees 1,745 1,198 1,265 1,351 5,559 Commissary sales 96,657 83,112 86,698 84,788 351,255 Equipment and other sales 15,399 12,982 12,630 12,222 53,233 INTERNATIONAL: Royalties and franchise development fees 1,538 1,278 1,307 1,179 5,302 Restaurant and commissary sales 6,680 6,259 6,375 6,232 25,546 --------------------------------------------------------------------------------- TOTAL REVENUES 261,290 224,803 231,535 227,049 944,677 COSTS AND EXPENSES: DOMESTIC: Restaurant expenses: Cost of sales 30,407 26,304 27,424 27,474 111,609 Salaries and benefits 35,841 30,506 30,454 30,517 127,318 Advertising and related costs 11,090 8,959 11,095 10,585 41,729 Occupancy costs 6,358 6,020 5,459 5,411 23,248 Other operating expenses 19,357 15,663 14,971 15,083 65,074 --------------------------------------------------------------------------------- 103,053 87,452 89,403 89,070 368,978 DOMESTIC: Commissary, equipment and other expenses: Cost of sales 84,882 72,042 74,393 73,021 304,338 Salaries and benefits 7,716 6,768 6,717 6,481 27,682 Other operating expenses 8,435 7,496 7,460 7,345 30,736 --------------------------------------------------------------------------------- 101,033 86,306 88,570 86,847 362,756 International operating expenses 6,016 5,411 5,126 5,147 21,700 General and administrative expenses 20,788 17,202 17,004 17,408 72,402 Advertising litigation expense - - 128 889 1,017 Special Charge 24,105 - - - 24,105 Pre-opening and other general expenses (income) 1,695 (477) 722 218 2,158 Depreciation and amortization 8,783 8,727 8,439 8,223 34,172 --------------------------------------------------------------------------------- TOTAL COSTS AND EXPENSES 265,473 204,621 209,392 207,802 887,288 --------------------------------------------------------------------------------- OPERATING INCOME (LOSS) (4,183) 20,182 22,143 19,247 57,389 Other income (expense): Investment income 374 685 592 292 1,943 Interest expense (2,892) (2,380) (1,670) (804) (7,746) --------------------------------------------------------------------------------- INCOME (LOSS) BEFORE INCOME TAXES (6,701) 18,487 21,065 18,735 51,586 Income tax expense (benefit) (2,547) 7,026 8,089 7,194 19,762 --------------------------------------------------------------------------------- Net income (loss) $ (4,154) $ 11,461 $ 12,976 $ 11,541 $ 31,824 ================================================================================= BASIC EARNINGS (LOSS) PER SHARE $ (0.18) $ 0.48 $ 0.51 $ 0.43 $ 1.29 ================================================================================= DILUTED EARNINGS (LOSS) PER SHARE $ (0.18) $ 0.48 $ 0.51 $ 0.43 $ 1.28 ================================================================================= Basic weighted-average shares outstanding 22,953 23,866 25,276 26,851 24,703 ================================================================================= Diluted weighted-average shares outstanding 22,953 24,005 25,542 27,104 24,907 ================================================================================= Note: The quarterly data above has been reclassified to conform to the year-end presentation.
SUPPLEMENTAL INFORMATION Papa John's International, Inc. and Subsidiaries Quarterly Condensed Consolidated Statements of Operations - 1999 ---------------------------------------------------------------------------------- DEC. 26, 1999 SEPT. 26, 1999 JUN. 27, 1999 MAR. 28, 1999 YTD 1999 ---------------------------------------------------------------------------------- (In thousands, except per share amounts) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) REVENUES: DOMESTIC: Restaurant sales $ 105,420 $ 96,538 $ 98,226 $ 94,452 $ 394,636 Franchise royalties 10,989 10,149 10,033 9,396 40,567 Franchise and development fees 1,791 1,655 1,655 1,410 6,511 Commissary sales 79,819 81,002 76,084 70,004 306,909 Equipment and other sales 14,372 12,504 14,195 12,007 53,078 INTERNATIONAL: Royalties and franchise development fees 558 232 191 82 1,063 Restaurant and commissary sales 2,561 - - - 2,561 ---------------------------------------------------------------------------------- TOTAL REVENUES 215,510 202,080 200,384 187,351 805,325 COSTS AND EXPENSES: DOMESTIC: Restaurant expenses: Cost of sales 26,230 26,449 24,355 23,227 100,261 Salaries and benefits 28,563 25,746 27,086 25,318 106,713 Advertising and related costs 10,763 7,972 9,136 8,137 36,008 Occupancy costs 5,164 5,127 4,660 4,590 19,541 Other operating expenses 14,598 12,994 13,147 12,724 53,463 ---------------------------------------------------------------------------------- 85,318 78,288 78,384 73,996 315,986 DOMESTIC: Commissary, equipment and other expenses: Cost of sales 71,774 72,066 68,419 62,354 274,613 Salaries and benefits 6,028 6,135 5,946 5,610 23,719 Other operating expenses 6,863 6,659 7,331 6,849 27,702 ---------------------------------------------------------------------------------- 84,665 84,860 81,696 74,813 326,034 International operating expenses 2,090 - - - 2,090 General and administrative expenses 13,515 12,446 14,330 14,095 54,386 Advertising litigation expense 4,782 1,322 - - 6,104 Special Charge - - - - - Pre-opening and other general expenses (income) 862 (43) 1,330 1,265 3,414 Depreciation and amortization 7,298 6,252 5,746 5,531 24,827 ---------------------------------------------------------------------------------- TOTAL COSTS AND EXPENSES 198,530 183,125 181,486 169,700 732,841 ---------------------------------------------------------------------------------- OPERATING INCOME 16,980 18,955 18,898 17,651 72,484 Other income (expense): Investment income 925 831 836 792 3,384 Interest expense - - - (151) (151) ---------------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES 17,905 19,786 19,734 18,292 75,717 Income tax expense 6,702 7,420 7,400 6,909 28,431 ---------------------------------------------------------------------------------- Net income $ 11,203 $ 12,366 $ 12,334 $ 11,383 $ 47,286 ================================================================================== BASIC EARNINGS PER SHARE $ 0.37 $ 0.41 $ 0.41 $ 0.38 $ 1.57 ================================================================================== DILUTED EARNINGS PER SHARE $ 0.36 $ 0.40 $ 0.40 $ 0.37 $ 1.52 ================================================================================== Basic weighted-average shares outstanding 30,315 30,335 30,166 29,966 30,195 ================================================================================== Diluted weighted-average shares outstanding 30,930 31,228 31,065 31,099 31,080 ================================================================================== Note: The quarterly data above has been reclassified to conform to the year-end presentation.
PAPA JOHN'S INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets DECEMBER 31, DECEMBER 26, 2000 1999 (UNAUDITED) (NOTE) ---------------------- ---------------------- (In thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 6,141 $ 3,698 Investments 5,745 - Accounts receivable 23,064 21,415 Inventories 18,321 10,637 Prepaid expenses and other current assets 7,422 7,378 Deferred income taxes 4,822 2,977 ---------------------- --------------------- TOTAL CURRENT ASSETS 65,515 46,105 Investments - 22,086 Net property and equipment 245,874 227,813 Notes receivable from franchisees 16,675 11,743 Intangibles 49,394 47,669 Other assets 16,527 16,635 Deferred income taxes 1,673 - ---------------------- ---------------------- TOTAL ASSETS $ 395,658 $ 372,051 ====================== ====================== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 23,586 $ 24,947 Accrued expenses 45,266 38,516 Current portion of debt 897 5,308 ---------------------- ---------------------- TOTAL CURRENT LIABILITIES 69,749 68,771 Unearned franchise and development fees 6,033 6,222 Long-term debt, net of current portion 145,710 925 Deferred income taxes - 2,109 Other long-term liabilities 2,659 1,891 Common equity put options 5,186 - ---------------------- ---------------------- TOTAL STOCKHOLDERS' EQUITY 166,321 292,133 ---------------------- ---------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 395,658 $ 372,051 ====================== ====================== Note: The balance sheet at December 26, 1999 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.