(Mark One) | ||
[X] | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
For the quarterly period ended June 30, 2013 |
[ ] | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware
|
61-1203323
|
||
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer Identification
number)
|
Yes [X] No [ ] |
Yes [X] No [ ] |
Large accelerated filer [X]
|
Accelerated filer [ ]
|
Non-accelerated filer [ ]
|
Smaller reporting company [ ]
|
Yes [ ] No [X] |
Page No.
|
||
2 | ||
3
|
||
4
|
||
5
|
||
|
||
6
|
||
7
|
||
15
|
||
25
|
||
26
|
||
26
|
||
26
|
||
27
|
||
28
|
Papa John’s International, Inc. and Subsidiaries
|
||||||||
(In thousands)
|
June 30, 2013
|
December 30, 2012
|
||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 28,236 | $ | 16,396 | ||||
Accounts receivable, net
|
43,235 | 44,647 | ||||||
Notes receivable
|
3,440 | 4,577 | ||||||
Inventories
|
21,722 | 22,178 | ||||||
Deferred income taxes
|
7,715 | 10,279 | ||||||
Prepaid expenses
|
10,782 | 12,782 | ||||||
Other current assets
|
7,804 | 7,767 | ||||||
Total current assets
|
122,934 | 118,626 | ||||||
Property and equipment, net
|
201,942 | 196,661 | ||||||
Notes receivable, less current portion, net
|
13,839 | 12,536 | ||||||
Goodwill
|
78,088 | 78,958 | ||||||
Other assets
|
32,675 | 31,627 | ||||||
Total assets
|
$ | 449,478 | $ | 438,408 | ||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 28,728 | $ | 32,624 | ||||
Income and other taxes payable
|
1,407 | 10,429 | ||||||
Accrued expenses and other current liabilities
|
51,950 | 60,528 | ||||||
Total current liabilities
|
82,085 | 103,581 | ||||||
Deferred revenue
|
6,736 | 7,329 | ||||||
Long-term debt
|
133,241 | 88,258 | ||||||
Deferred income taxes
|
11,955 | 10,672 | ||||||
Other long-term liabilities
|
40,858 | 40,674 | ||||||
Total liabilities
|
274,875 | 250,514 | ||||||
Redeemable noncontrolling interests
|
6,846 | 6,380 | ||||||
Stockholders’ equity:
|
||||||||
Preferred stock
|
- | - | ||||||
Common stock
|
373 | 371 | ||||||
Additional paid-in capital
|
288,214 | 280,905 | ||||||
Accumulated other comprehensive income
|
786 | 1,824 | ||||||
Retained earnings
|
392,917 | 356,461 | ||||||
Treasury stock
|
(514,533 | ) | (458,047 | ) | ||||
Total stockholders’ equity
|
167,757 | 181,514 | ||||||
Total liabilities, redeemable noncontrolling interests and stockholders’ equity
|
$ | 449,478 | $ | 438,408 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
(In thousands, except per share amounts)
|
June 30, 2013
|
June 24, 2012
|
June 30, 2013
|
June 24, 2012
|
||||||||||||
North America revenues:
|
||||||||||||||||
Domestic Company-owned restaurant sales
|
$ | 155,153 | $ | 143,527 | $ | 313,051 | $ | 287,342 | ||||||||
Franchise royalties
|
20,230 | 19,101 | 40,963 | 39,619 | ||||||||||||
Franchise and development fees
|
219 | 206 | 765 | 428 | ||||||||||||
Domestic commissary sales
|
140,003 | 126,593 | 283,897 | 264,203 | ||||||||||||
Other sales
|
12,444 | 11,771 | 25,051 | 24,029 | ||||||||||||
International revenues:
|
||||||||||||||||
Royalties and franchise and development fees
|
5,391 | 4,701 | 10,458 | 9,187 | ||||||||||||
Restaurant and commissary sales
|
15,746 | 12,680 | 30,605 | 25,047 | ||||||||||||
Total revenues
|
349,186 | 318,579 | 704,790 | 649,855 | ||||||||||||
Costs and expenses:
|
||||||||||||||||
Domestic Company-owned restaurant expenses:
|
||||||||||||||||
Cost of sales
|
37,825 | 32,881 | 74,898 | 65,337 | ||||||||||||
Salaries and benefits
|
42,053 | 39,839 | 85,325 | 78,652 | ||||||||||||
Advertising and related costs
|
14,677 | 13,278 | 29,470 | 25,977 | ||||||||||||
Occupancy costs
|
8,939 | 8,619 | 17,650 | 16,517 | ||||||||||||
Other operating expenses
|
22,431 | 20,830 | 45,176 | 41,248 | ||||||||||||
Total domestic Company-owned restaurant expenses
|
125,925 | 115,447 | 252,519 | 227,731 | ||||||||||||
Domestic commissary and other expenses:
|
||||||||||||||||
Cost of sales
|
114,045 | 104,412 | 231,823 | 217,250 | ||||||||||||
Salaries and benefits
|
10,264 | 9,218 | 20,331 | 18,221 | ||||||||||||
Other operating expenses
|
15,768 | 13,498 | 31,775 | 27,804 | ||||||||||||
Total domestic commissary and other expenses
|
140,077 | 127,128 | 283,929 | 263,275 | ||||||||||||
International operating expenses
|
12,983 | 10,975 | 25,636 | 21,367 | ||||||||||||
General and administrative expenses
|
33,126 | 31,463 | 66,284 | 63,059 | ||||||||||||
Other general expenses
|
1,597 | 1,135 | 2,782 | 6,809 | ||||||||||||
Depreciation and amortization
|
8,530 | 8,104 | 17,067 | 16,031 | ||||||||||||
Total costs and expenses
|
322,238 | 294,252 | 648,217 | 598,272 | ||||||||||||
Operating income
|
26,948 | 24,327 | 56,573 | 51,583 | ||||||||||||
Net interest (expense) income
|
(340 | ) | (861 | ) | 332 | (597 | ) | |||||||||
Income before income taxes
|
26,608 | 23,466 | 56,905 | 50,986 | ||||||||||||
Income tax expense
|
8,563 | 8,005 | 18,541 | 17,218 | ||||||||||||
Net income, including redeemable noncontrolling interests
|
18,045 | 15,461 | 38,364 | 33,768 | ||||||||||||
Income attributable to redeemable noncontrolling interests
|
(895 | ) | (1,172 | ) | (1,908 | ) | (2,498 | ) | ||||||||
Net income, net of redeemable noncontrolling interests
|
$ | 17,150 | $ | 14,289 | $ | 36,456 | $ | 31,270 | ||||||||
Basic earnings per common share
|
$ | 0.79 | $ | 0.60 | $ | 1.66 | $ | 1.31 | ||||||||
Earnings per common share - assuming dilution
|
$ | 0.77 | $ | 0.59 | $ | 1.62 | $ | 1.29 | ||||||||
Basic weighted average shares outstanding
|
21,742 | 23,733 | 21,998 | 23,893 | ||||||||||||
Diluted weighted average shares outstanding
|
22,250 | 24,112 | 22,543 | 24,270 | ||||||||||||
See accompanying notes.
|
Papa John's International, Inc. and Subsidiaries
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
(In thousands)
|
June 30, 2013
|
June 24, 2012
|
June 30, 2013
|
June 24, 2012
|
||||||||||||
Net income, including redeemable noncontrolling interests
|
$ | 18,045 | $ | 15,461 | $ | 38,364 | $ | 33,768 | ||||||||
Other comprehensive income (loss), before tax:
|
||||||||||||||||
Foreign currency translation adjustments
|
(586 | ) | (445 | ) | (1,721 | ) | (154 | ) | ||||||||
Interest rate swap
|
190 | (9 | ) | 73 | (137 | ) | ||||||||||
Other comprehensive income (loss), before tax
|
(396 | ) | (454 | ) | (1,648 | ) | (291 | ) | ||||||||
Income tax effect:
|
||||||||||||||||
Foreign currency translation adjustments
|
217 | - | 637 | - | ||||||||||||
Interest rate swap
|
(71 | ) | 3 | (27 | ) | 51 | ||||||||||
Income tax effect
|
146 | 3 | 610 | 51 | ||||||||||||
Other comprehensive income (loss), net of tax
|
(250 | ) | (451 | ) | (1,038 | ) | (240 | ) | ||||||||
Comprehensive income, including redeemable
|
||||||||||||||||
noncontrolling interests
|
17,795 | 15,010 | 37,326 | 33,528 | ||||||||||||
Comprehensive income, redeemable noncontrolling interests
|
(895 | ) | (1,172 | ) | (1,908 | ) | (2,498 | ) | ||||||||
Comprehensive income, net of redeemable
|
||||||||||||||||
noncontrolling interests
|
$ | 16,900 | $ | 13,838 | $ | 35,418 | $ | 31,030 | ||||||||
See accompanying notes.
|
Common
|
Accumulated
|
|||||||||||||||||||||||||||
Stock
|
Additional
|
Other
|
Total
|
|||||||||||||||||||||||||
Shares
|
Common
|
Paid-In
|
Comprehensive
|
Retained
|
Treasury
|
Stockholders'
|
||||||||||||||||||||||
(In thousands)
|
Outstanding
|
Stock
|
Capital
|
Income (Loss)
|
Earnings
|
Stock
|
Equity
|
|||||||||||||||||||||
Balance at December 25, 2011
|
24,019 | $ | 367 | $ | 262,456 | $ | 1,849 | $ | 294,801 | $ | (353,826 | ) | $ | 205,647 | ||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net income, net of redeemable
|
||||||||||||||||||||||||||||
noncontrolling interests (1)
|
- | - | - | - | 31,270 | - | 31,270 | |||||||||||||||||||||
Other comprehensive loss
|
- | - | - | (240 | ) | - | - | (240 | ) | |||||||||||||||||||
Comprehensive income
|
31,030 | |||||||||||||||||||||||||||
Exercise of stock options
|
361 | 4 | 10,396 | - | - | - | 10,400 | |||||||||||||||||||||
Tax effect of equity awards
|
- | - | 468 | - | - | - | 468 | |||||||||||||||||||||
Acquisition of Company
|
||||||||||||||||||||||||||||
common stock
|
(957 | ) | - | - | - | - | (38,728 | ) | (38,728 | ) | ||||||||||||||||||
Stock-based compensation expense
|
- | - | 3,218 | - | - | - | 3,218 | |||||||||||||||||||||
Issuance of restricted stock
|
34 | - | (1,541 | ) | - | - | 1,541 | - | ||||||||||||||||||||
Other
|
- | - | (134 | ) | - | - | 259 | 125 | ||||||||||||||||||||
Balance at June 24, 2012
|
23,457 | $ | 371 | $ | 274,863 | $ | 1,609 | $ | 326,071 | $ | (390,754 | ) | $ | 212,160 | ||||||||||||||
Balance at December 30, 2012
|
22,241 | $ | 371 | $ | 280,905 | $ | 1,824 | $ | 356,461 | $ | (458,047 | ) | $ | 181,514 | ||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net income, net of redeemable
|
||||||||||||||||||||||||||||
noncontrolling interests (1)
|
- | - | - | - | 36,456 | - | 36,456 | |||||||||||||||||||||
Other comprehensive loss
|
- | - | - | (1,038 | ) | - | - | (1,038 | ) | |||||||||||||||||||
Comprehensive income
|
35,418 | |||||||||||||||||||||||||||
Exercise of stock options
|
223 | 2 | 3,694 | - | - | - | 3,696 | |||||||||||||||||||||
Tax effect of equity awards
|
- | - | 1,963 | - | - | - | 1,963 | |||||||||||||||||||||
Acquisition of Company
|
||||||||||||||||||||||||||||
common stock
|
(978 | ) | - | - | - | - | (58,806 | ) | (58,806 | ) | ||||||||||||||||||
Stock-based compensation expense
|
- | - | 3,784 | - | - | - | 3,784 | |||||||||||||||||||||
Issuance of restricted stock
|
68 | - | (2,148 | ) | - | - | 2,148 | - | ||||||||||||||||||||
Other
|
- | - | 16 | - | - | 172 | 188 | |||||||||||||||||||||
Balance at June 30, 2013
|
21,554 | $ | 373 | $ | 288,214 | $ | 786 | $ | 392,917 | $ | (514,533 | ) | $ | 167,757 |
(1) |
Net income at June 30, 2013 and June 24, 2012 is net of $1,908 and $2,498, respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements.
|
Six Months Ended
|
||||||||
(In thousands)
|
June 30, 2013
|
June 24, 2012
|
||||||
Operating activities
|
||||||||
Net income, including redeemable noncontrolling interests
|
$ | 38,364 | $ | 33,768 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for uncollectible accounts and notes receivable
|
780 | 719 | ||||||
Depreciation and amortization
|
17,067 | 16,031 | ||||||
Deferred income taxes
|
8,256 | 1,797 | ||||||
Stock-based compensation expense
|
3,784 | 3,218 | ||||||
Excess tax benefit on equity awards
|
(3,803 | ) | (1,471 | ) | ||||
Other
|
694 | 2,872 | ||||||
Changes in operating assets and liabilities, net of acquisitions:
|
||||||||
Accounts receivable
|
496 | (75 | ) | |||||
Inventories
|
456 | 533 | ||||||
Prepaid expenses
|
2,000 | (338 | ) | |||||
Other current assets
|
(37 | ) | 755 | |||||
Other assets and liabilities
|
(1,954 | ) | 756 | |||||
Accounts payable
|
(3,896 | ) | (587 | ) | ||||
Income and other taxes payable
|
(9,022 | ) | 75 | |||||
Accrued expenses and other current liabilities
|
(5,870 | ) | 3,297 | |||||
Deferred revenue
|
(83 | ) | 3,812 | |||||
Net cash provided by operating activities
|
47,232 | 65,162 | ||||||
Investing activities
|
||||||||
Purchases of property and equipment
|
(25,493 | ) | (15,046 | ) | ||||
Loans issued
|
(3,103 | ) | (1,206 | ) | ||||
Repayments of loans issued
|
2,908 | 1,730 | ||||||
Acquisitions, net of cash acquired
|
- | (5,908 | ) | |||||
Proceeds from divestitures of restaurants
|
- | 948 | ||||||
Other
|
319 | (4 | ) | |||||
Net cash used in investing activities
|
(25,369 | ) | (19,486 | ) | ||||
Financing activities
|
||||||||
Net proceeds (repayments) on line of credit facility
|
44,983 | (1,489 | ) | |||||
Excess tax benefit on equity awards
|
3,803 | 1,471 | ||||||
Tax payments for restricted stock issuances
|
(1,841 | ) | (822 | ) | ||||
Proceeds from exercise of stock options
|
3,696 | 10,400 | ||||||
Acquisition of Company common stock
|
(58,806 | ) | (38,728 | ) | ||||
Contributions from redeemable noncontrolling interest holders
|
450 | - | ||||||
Distributions to redeemable noncontrolling interest holders
|
(1,750 | ) | (1,930 | ) | ||||
Other
|
(468 | ) | 125 | |||||
Net cash used in financing activities
|
(9,933 | ) | (30,973 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents
|
(90 | ) | (20 | ) | ||||
Change in cash and cash equivalents
|
11,840 | 14,683 | ||||||
Cash and cash equivalents at beginning of period
|
16,396 | 18,942 | ||||||
Cash and cash equivalents at end of period
|
$ | 28,236 | $ | 33,625 | ||||
See accompanying notes.
|
1.
|
Basis of Presentation
|
2.
|
Significant Accounting Policies
|
Number of
Restaurants
|
Restaurant Locations
|
Papa John's
Ownership
|
Reedeemable
Noncontrolling
Interest
Ownership
|
||||||||||
June 30, 2013
|
|||||||||||||
Star Papa, LP
|
78 |
Texas
|
51 | % | 49 | % | |||||||
Colonel's Limited, LLC
|
52 |
Maryland and Virginia
|
70 | % | 30 | % | |||||||
PJ Minnesota, LLC
|
31 |
Minnesota
|
80 | % | 20 | % | |||||||
PJ Denver, LLC
|
24 |
Colorado
|
60 | % | 40 | % | |||||||
June 24, 2012
|
|||||||||||||
Star Papa, LP
|
76 |
Texas
|
51 | % | 49 | % | |||||||
Colonel's Limited, LLC
|
52 |
Maryland and Virginia
|
70 | % | 30 | % |
Three Months
|
Six Months
|
|||||||||||||||
June 30,
|
June 24,
|
June 30,
|
June 24,
|
|||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Papa John's International, Inc.
|
$ | 1,284 | $ | 1,854 | $ | 2,792 | $ | 3,897 | ||||||||
Noncontrolling interests
|
895 | 1,172 | 1,908 | 2,498 | ||||||||||||
Total income before income taxes
|
$ | 2,179 | $ | 3,026 | $ | 4,700 | $ | 6,395 |
●
|
The Star Papa, LP agreement contains a redemption feature that is not currently redeemable, but it is probable to become redeemable in the future. Due to specific valuation provisions contained in the agreement, this noncontrolling interest has been recorded at its carrying value.
|
●
|
The PJ Minnesota, LLC and PJ Denver, LLC agreements contain redemption features that are currently redeemable and, therefore, these noncontrolling interests have been recorded at their current redemption values, which approximate their carrying values.
|
Balance at December 30, 2012
|
$ | 6,380 | ||
Net income
|
1,016 | |||
Contributions from redeemable noncontrolling interest holders
|
450 | |||
Distributions to redeemable noncontrolling interest holders
|
(1,000 | ) | ||
Balance at June 30, 2013
|
$ | 6,846 |
|
●
|
Level 1: Quoted market prices in active markets for identical assets or liabilities.
|
|
●
|
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
|
|
●
|
Level 3: Unobservable inputs that are not corroborated by market data.
|
Balance Sheet
|
Carrying
|
Fair Value Measurements
|
|||||||||||||||
Location
|
Value
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
June 30, 2013
|
|||||||||||||||||
Financial assets:
|
|||||||||||||||||
Cash surrender value of
|
|||||||||||||||||
life insurance policies *
|
Other assets
|
$ | 15,155 | $ | 15,155 | $ | - | $ | - | ||||||||
Financial liabilities:
|
|||||||||||||||||
Interest rate swap
|
Other long-term liabilities
|
31 | - | 31 | - | ||||||||||||
December 30, 2012
|
|||||||||||||||||
Financial assets:
|
|||||||||||||||||
Cash surrender value of
|
|||||||||||||||||
life insurance policies *
|
Other assets
|
$ | 13,551 | $ | 13,551 | $ | - | $ | - | ||||||||
Financial liabilities:
|
|||||||||||||||||
Interest rate swap
|
Other long-term liabilities
|
104 | - | 104 | - | ||||||||||||
* Represents life insurance policies held in our non-qualified deferred compensation plan.
|
3.
|
Debt
|
4.
|
Calculation of Earnings Per Share
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 24,
|
June 30,
|
June 24,
|
|||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Basic earnings per common share:
|
||||||||||||||||
Net income, net of redeemable noncontrolling interests
|
$ | 17,150 | $ | 14,289 | $ | 36,456 | $ | 31,270 | ||||||||
Weighted average shares outstanding
|
21,742 | 23,733 | 21,998 | 23,893 | ||||||||||||
Basic earnings per common share
|
$ | 0.79 | $ | 0.60 | $ | 1.66 | $ | 1.31 | ||||||||
Earnings per common share - assuming dilution:
|
||||||||||||||||
Net income, net of redeemable noncontrolling interests
|
$ | 17,150 | $ | 14,289 | $ | 36,456 | $ | 31,270 | ||||||||
Weighted average shares outstanding
|
21,742 | 23,733 | 21,998 | 23,893 | ||||||||||||
Dilutive effect of outstanding equity awards
|
508 | 379 | 545 | 377 | ||||||||||||
Diluted weighted average shares outstanding
|
22,250 | 24,112 | 22,543 | 24,270 | ||||||||||||
Earnings per common share - assuming dilution
|
$ | 0.77 | $ | 0.59 | $ | 1.62 | $ | 1.29 |
5.
|
Litigation
|
6.
|
Segment Information
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30, 2013
|
June 24, 2012
|
June 30, 2013
|
June 24, 2012
|
|||||||||||||
Revenues from external customers:
|
||||||||||||||||
Domestic Company-owned restaurants
|
$ | 155,153 | $ | 143,527 | $ | 313,051 | $ | 287,342 | ||||||||
Domestic commissaries
|
140,003 | 126,593 | 283,897 | 264,203 | ||||||||||||
North America franchising
|
20,449 | 19,307 | 41,728 | 40,047 | ||||||||||||
International
|
21,137 | 17,381 | 41,063 | 34,234 | ||||||||||||
All others
|
12,444 | 11,771 | 25,051 | 24,029 | ||||||||||||
Total revenues from external customers
|
$ | 349,186 | $ | 318,579 | $ | 704,790 | $ | 649,855 | ||||||||
Intersegment revenues:
|
||||||||||||||||
Domestic commissaries
|
$ | 46,115 | $ | 39,953 | $ | 92,912 | $ | 81,490 | ||||||||
North America franchising
|
552 | 561 | 1,105 | 1,110 | ||||||||||||
International
|
73 | 56 | 140 | 110 | ||||||||||||
All others
|
3,318 | 2,664 | 6,486 | 5,685 | ||||||||||||
Total intersegment revenues
|
$ | 50,058 | $ | 43,234 | $ | 100,643 | $ | 88,395 | ||||||||
Income (loss) before income taxes:
|
||||||||||||||||
Domestic Company-owned restaurants
|
$ | 8,175 | $ | 9,358 | $ | 19,131 | $ | 21,679 | ||||||||
Domestic commissaries
|
9,642 | 7,978 | 19,805 | 19,144 | ||||||||||||
North America franchising
|
17,396 | 16,619 | 35,618 | 34,759 | ||||||||||||
International
|
866 | 320 | 1,207 | 592 | ||||||||||||
All others
|
1,153 | 471 | 1,812 | 866 | ||||||||||||
Unallocated corporate expenses
|
(10,413 | ) | (10,799 | ) | (19,931 | ) | (25,583 | ) | ||||||||
Elimination of intersegment profits
|
(211 | ) | (481 | ) | (737 | ) | (471 | ) | ||||||||
Total income before income taxes
|
$ | 26,608 | $ | 23,466 | $ | 56,905 | $ | 50,986 | ||||||||
Property and equipment:
|
||||||||||||||||
Domestic Company-owned restaurants
|
$ | 188,119 | ||||||||||||||
Domestic commissaries
|
102,498 | |||||||||||||||
International
|
24,546 | |||||||||||||||
All others
|
39,187 | |||||||||||||||
Unallocated corporate assets
|
150,018 | |||||||||||||||
Accumulated depreciation and amortization
|
(302,426 | ) | ||||||||||||||
Net property and equipment
|
$ | 201,942 | ||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
June 30,
|
June 24,
|
Increase
|
June 30,
|
June 24,
|
Increase
|
|||||||||||||||||||
(In thousands, except per share amounts)
|
2013
|
2012
|
(Decrease)
|
2013
|
2012
|
(Decrease)
|
||||||||||||||||||
Income before income taxes, as reported
|
$ | 26,608 | $ | 23,466 | $ | 3,142 | $ | 56,905 | $ | 50,986 | $ | 5,919 | ||||||||||||
Incentive Contribution
|
(250 | ) | (250 | ) | - | (500 | ) | 3,471 | (3,971 | ) | ||||||||||||||
Income before income taxes, excluding Incentive Contribution
|
$ | 26,358 | $ | 23,216 | $ | 3,142 | $ | 56,405 | $ | 54,457 | $ | 1,948 | ||||||||||||
Net income, as reported
|
$ | 17,150 | $ | 14,289 | $ | 2,861 | $ | 36,456 | $ | 31,270 | $ | 5,186 | ||||||||||||
Incentive Contribution
|
(164 | ) | (164 | ) | - | (329 | ) | 2,275 | (2,604 | ) | ||||||||||||||
Net income, excluding Incentive
|
||||||||||||||||||||||||
Contribution
|
$ | 16,986 | $ | 14,125 | $ | 2,861 | $ | 36,127 | $ | 33,545 | $ | 2,582 | ||||||||||||
Earnings per diluted share, as reported
|
$ | 0.77 | $ | 0.59 | $ | 0.18 | $ | 1.62 | $ | 1.29 | $ | 0.33 | ||||||||||||
Incentive Contribution
|
(0.01 | ) | - | (0.01 | ) | (0.02 | ) | 0.09 | (0.11 | ) | ||||||||||||||
Earnings per diluted share, excluding Incentive Contribution
|
$ | 0.76 | $ | 0.59 | $ | 0.17 | $ | 1.60 | $ | 1.38 | $ | 0.22 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30, 2013
|
June 24, 2012
|
June 30, 2013
|
June 24, 2012
|
|||||||||||||
North America Company-owned:
|
||||||||||||||||
Beginning of period
|
649 | 597 | 648 | 598 | ||||||||||||
Opened
|
5 | - | 6 | - | ||||||||||||
Closed
|
- | (2 | ) | - | (3 | ) | ||||||||||
Acquired from franchisees
|
- | 56 | - | 56 | ||||||||||||
Sold to franchisees
|
- | (8 | ) | - | (8 | ) | ||||||||||
End of period
|
654 | 643 | 654 | 643 | ||||||||||||
International Company-owned:
|
||||||||||||||||
Beginning of period
|
50 | 29 | 48 | 30 | ||||||||||||
Opened
|
1 | 4 | 3 | 4 | ||||||||||||
Closed
|
- | - | - | (1 | ) | |||||||||||
End of period
|
51 | 33 | 51 | 33 | ||||||||||||
North America franchised:
|
||||||||||||||||
Beginning of period
|
2,572 | 2,498 | 2,556 | 2,463 | ||||||||||||
Opened
|
32 | 35 | 63 | 82 | ||||||||||||
Closed
|
(16 | ) | (10 | ) | (31 | ) | (22 | ) | ||||||||
Acquired from Company
|
- | 8 | - | 8 | ||||||||||||
Sold to Company
|
- | (56 | ) | - | (56 | ) | ||||||||||
End of period
|
2,588 | 2,475 | 2,588 | 2,475 | ||||||||||||
International franchised:
|
||||||||||||||||
Beginning of period
|
926 | 809 | 911 | 792 | ||||||||||||
Opened
|
43 | 28 | 69 | 51 | ||||||||||||
Closed
|
(10 | ) | (15 | ) | (21 | ) | (21 | ) | ||||||||
End of period
|
959 | 822 | 959 | 822 | ||||||||||||
Total restaurants - end of period
|
4,252 | 3,973 | 4,252 | 3,973 |
●
|
Domestic Company-owned restaurant sales increased $11.6 million, or 8.1%, and $25.7 million, or 8.9%, for the three and six months ended June 30, 2013, respectively, primarily due to increases in comparable sales of 6.0% and 4.9% and the net acquisition of 50 restaurants in the Denver and Minneapolis markets from a franchisee in the second quarter of 2012. “Comparable sales” represents the change in year-over-year sales for the same base of restaurants for the same fiscal periods.
|
●
|
North America franchise royalty revenue increased approximately $1.1 million, or 5.9%, and $1.3 million, or 3.4%, for the three and six months ended June 30, 2013, respectively, primarily due to increases in comparable sales of 2.6% and 1.7% and increases in net franchise units over the prior year. These increases were partially offset by reduced royalties attributable to the Company’s net acquisition of the 50 restaurants noted above.
|
●
|
Domestic commissary sales increased $13.4 million, or 10.6%, and $19.7 million, or 7.5%, for the three and six months ended June 30, 2013, respectively, primarily due to increases in sales volumes as well as increases in the prices of commodities.
|
●
|
International revenues increased $3.8 million, or 21.6%, and increased $6.8 million, or 19.9%, for the three and six months ended June 30, 2013, respectively, primarily due to increases in the number of restaurants and increases in comparable sales of 6.8% and 7.5%, calculated on a constant dollar basis.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
June 30,
|
June 24,
|
Increase
|
June 30,
|
June 24,
|
Increase
|
|||||||||||||||||||
2013
|
2012
|
(Decrease)
|
2013
|
2012
|
(Decrease)
|
|||||||||||||||||||
Domestic Company-owned restaurants (a)
|
$ | 8,175 | $ | 9,358 | $ | (1,183 | ) | $ | 19,131 | $ | 21,679 | $ | (2,548 | ) | ||||||||||
Domestic commissaries
|
9,642 | 7,978 | 1,664 | 19,805 | 19,144 | 661 | ||||||||||||||||||
North America franchising
|
17,396 | 16,619 | 777 | 35,618 | 34,759 | 859 | ||||||||||||||||||
International
|
866 | 320 | 546 | 1,207 | 592 | 615 | ||||||||||||||||||
All others
|
1,153 | 471 | 682 | 1,812 | 866 | 946 | ||||||||||||||||||
Unallocated corporate expenses (b)
|
(10,413 | ) | (10,799 | ) | 386 | (19,931 | ) | (25,583 | ) | 5,652 | ||||||||||||||
Elimination of intersegment profit
|
(211 | ) | (481 | ) | 270 | (737 | ) | (471 | ) | (266 | ) | |||||||||||||
Total income before income taxes
|
$ | 26,608 | $ | 23,466 | $ | 3,142 | $ | 56,905 | $ | 50,986 | $ | 5,919 |
(a)
|
Includes the benefit of a $1.0 million advertising credit from PJMF related to the Incentive Contribution for the six months ended June 24, 2012.
|
(b)
|
Includes the impact of the Incentive Contribution in 2013 ($250,000 increase for the three-month period and a $500,000 increase for the six-month period) and 2012 ($250,000 increase for the three-month period and a $4.5 million reduction for the six-month period).
|
●
|
Domestic Company-owned Restaurant Segment. Domestic Company-owned restaurants’ income before income taxes decreased $1.2 million and $1.5 million for the three and six months ended June 30, 2013, respectively, excluding the $1.0 million advertising credit from PJMF in 2012. These decreases were primarily due to higher commodity costs, somewhat offset by incremental profits associated with higher comparable sales of 6.0% and 4.9%. Additionally, the six-month period of 2012 benefited from significant supplier incentives.
|
●
|
Domestic Commissary Segment. Domestic commissaries’ income before income taxes increased approximately $1.7 million and $700,000 for the three and six months ended June 30, 2013, respectively. The increase of approximately $1.7 million for the three-month period was primarily due to higher volumes and a higher gross margin. The increase of approximately $700,000 for the six-month period was due to higher volumes, partially offset by the higher than usual margin in the first quarter of 2012. We manage commissary results on a full year basis and anticipate the 2013 full year margin will approximate 2012.
|
●
|
North America Franchising Segment. North America Franchising income before income taxes increased approximately $800,000 and $900,000 for the three and six months ended June 30, 2013, respectively. The increases were due to the previously mentioned royalty revenue increases, partially offset by an increase in development incentive costs and reduced royalties attributable to the Company’s acquisition of the Denver and Minneapolis restaurants.
|
●
|
International Segment. Income before income taxes increased approximately $500,000 and $600,000 for the three and six months ended June 30, 2013, respectively. The increases were primarily due to higher royalties attributable to the 6.8% and 7.5% comparable sales increases and net unit growth and improvements in our United Kingdom results. The improvement for the six-month period was partially offset by higher expenses in China associated with new Company-owned restaurants.
|
●
|
All Others Segment. The “All Others” reporting segment income before income taxes increased approximately $700,000 and $900,000 for the three- and six-month periods, respectively, as compared to the corresponding 2012 periods. These increases were primarily due to an improvement in our online operating results due to higher online sales volumes.
|
●
|
Unallocated Corporate Segment. Unallocated corporate expenses decreased approximately $386,000 and $5.7 million for the three and six months ended June 30, 2013, respectively, compared to the corresponding 2012 periods. The components of unallocated corporate expenses were as follows (in thousands):
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||||||||||||
June 30,
|
June 24,
|
Increase
|
June 30,
|
June 24,
|
Increase
|
||||||||||||||||||||
2013
|
2012
|
(Decrease)
|
2013
|
2012
|
(Decrease)
|
||||||||||||||||||||
General and administrative
|
$ | 8,358 | $ | 8,039 | $ | 319 | $ | 17,045 | $ | 16,700 | $ | 345 | |||||||||||||
Supplier marketing (income)
|
|||||||||||||||||||||||||
expense (a)
|
(250 | ) | (250 | ) | - | (500 | ) | 4,500 | (5,000 | ) | |||||||||||||||
Net interest expense (income) (b)
|
376 | 891 | (515 | ) | (283 | ) | 631 | (914 | ) | ||||||||||||||||
Depreciation
|
1,638 | 1,819 | (181 | ) | 3,391 | 3,553 | (162 | ) | |||||||||||||||||
Other expense
|
291 | 300 | (9 | ) | 278 | 199 | 79 | ||||||||||||||||||
Total unallocated corporate
|
|||||||||||||||||||||||||
expenses
|
$ | 10,413 | $ | 10,799 | $ | (386 | ) | $ | 19,931 | $ | 25,583 | $ | (5,652 | ) |
|
(a)
|
See “Non-GAAP Measures” above for further information about the Incentive Contribution.
|
|
(b)
|
The decrease in net interest was primarily due to a decrease in the change in the redemption value of a mandatorily redeemable noncontrolling interest in a joint venture, partially offset by a higher average outstanding debt balance.
|
Three Months Ended
|
||||||||||||||||
June 30, 2013
|
June 24, 2012
|
|||||||||||||||
Company
|
Franchised
|
Company
|
Franchised
|
|||||||||||||
Total domestic units (end of period)
|
654 | 2,588 | 643 | 2,475 | ||||||||||||
Equivalent units
|
648 | 2,493 | 626 | 2,405 | ||||||||||||
Comparable sales base units
|
633 | 2,266 | 614 | 2,179 | ||||||||||||
Comparable sales base percentage
|
97.7 | % | 90.9 | % | 98.1 | % | 90.6 | % | ||||||||
Average weekly sales - comparable units
|
$ | 18,604 | $ | 14,885 | $ | 17,746 | $ | 14,758 | ||||||||
Average weekly sales - total non-comparable units (a)
|
$ | 10,880 | $ | 9,381 | $ | 12,421 | $ | 10,159 | ||||||||
Average weekly sales - all units
|
$ | 18,430 | $ | 14,383 | $ | 17,650 | $ | 14,326 | ||||||||
(a)
|
Includes 175 traditional and 169 nontraditional units as of June 30, 2013 and 188 traditional and 140 nontraditional units as of June 24, 2012. |
Six Months Ended
|
||||||||||||||||
June 30, 2013
|
June 24, 2012
|
|||||||||||||||
Company
|
Franchised
|
Company
|
Franchised
|
|||||||||||||
Total domestic units (end of period)
|
654 | 2,588 | 643 | 2,475 | ||||||||||||
Equivalent units
|
646 | 2,486 | 609 | 2,409 | ||||||||||||
Comparable sales base units
|
633 | 2,253 | 598 | 2,186 | ||||||||||||
Comparable sales base percentage
|
98.0 | % | 90.6 | % | 98.2 | % | 90.7 | % | ||||||||
Average weekly sales - comparable units
|
$ | 18,794 | $ | 15,136 | $ | 18,267 | $ | 15,082 | ||||||||
Average weekly sales - total non-comparable units
|
$ | 11,495 | $ | 9,870 | $ | 12,060 | $ | 10,470 | ||||||||
Average weekly sales - all units
|
$ | 18,652 | $ | 14,643 | $ | 18,161 | $ | 14,655 |
●
|
Cost of sales was 1.5% and 1.2% higher for the three and six months ended June 30, 2013, as compared to the same periods in 2012, primarily due to higher commodity costs. The six-month period benefited from various supplier incentives in 2012.
|
●
|
Salaries and benefits were 0.7% and 0.1% lower as a percentage of sales for the three and six months ended June 30, 2013, as compared to the same periods in 2012. The decreases were primarily due to lower bonuses paid to general managers, partially offset by higher labor costs associated with the newly acquired Denver and Minneapolis markets.
|
●
|
Advertising and related costs as a percentage of sales were 0.2% and 0.4% higher for the three and six months ended June 30, 2013. The six-month period of 2012 included a $1.0 million advertising credit received from PJMF. The higher costs, excluding the advertising credit from PJMF, were due to increased local advertising, including additional costs for newly acquired markets.
|
●
|
Occupancy costs and other operating costs, on a combined basis, were relatively consistent (20.3% and 20.5% for the three months ended June 30, 2013 and June 24, 2012, respectively, and 20.0% and 20.1% for the six months ended June 30, 2013 and June 24, 2012).
|
●
|
Cost of sales was 0.7% and 0.3% lower as a percentage of revenues for the three and six months ended June 30, 2013, respectively, due to higher pricing.
|
●
|
Salaries and benefits were 0.1% and 0.3% higher as a percentage of revenues for the three- and six-month periods, respectively. The increases were primarily due to additional commissary staffing to support higher volumes.
|
●
|
Other operating expenses as a percentage of sales were 0.6% higher as a percentage of revenues for both the three and six months ended June 30, 2013, respectively, as compared to the same periods in 2012, primarily due to higher distribution costs.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
June 30,
|
June 24,
|
Increase
|
June 30,
|
June 24,
|
Increase
|
|||||||||||||||||||
2013
|
2012
|
(Decrease)
|
2013
|
2012
|
(Decrease)
|
|||||||||||||||||||
Supplier marketing (income) expense (a)
|
$ | (250 | ) | $ | (250 | ) | $ | - | $ | (500 | ) | $ | 4,500 | $ | (5,000 | ) | ||||||||
Disposition and valuation-related losses
|
367 | 151 | 216 | 378 | 116 | 262 | ||||||||||||||||||
Franchise and development incentives (b)
|
1,050 | 769 | 281 | 2,111 | 1,501 | 610 | ||||||||||||||||||
Other
|
430 | 465 | (35 | ) | 793 | 692 | 101 | |||||||||||||||||
Total other general expenses
|
$ | 1,597 | $ | 1,135 | $ | 462 | $ | 2,782 | $ | 6,809 | $ | (4,027 | ) |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
June 30,
|
June 24,
|
(Increase)
|
June 30,
|
June 24,
|
(Increase)
|
|||||||||||||||||||
2013
|
2012
|
Decrease
|
2013
|
2012
|
Decrease
|
|||||||||||||||||||
Interest expense - line of credit (a)
|
$ | (457 | ) | $ | (282 | ) | $ | (175 | ) | $ | (779 | ) | $ | (570 | ) | $ | (209 | ) | ||||||
Investment income
|
153 | 195 | (42 | ) | 338 | 365 | (27 | ) | ||||||||||||||||
Change in redemption value of mandatorily redeemable
|
||||||||||||||||||||||||
noncontrolling interest in a joint venture
|
(36 | ) | (774 | ) | 738 | 773 | (392 | ) | 1,165 | |||||||||||||||
Net interest (expense) income
|
$ | (340 | ) | $ | (861 | ) | $ | 521 | $ | 332 | $ | (597 | ) | $ | 929 |
(a)
|
The increase in interest expense for both the three and six months ended June 30, 2013, was primarily due to a higher average outstanding debt balance.
|
Actual Ratio for the
|
||||
Quarter Ended
|
||||
Permitted Ratio
|
June 30, 2013
|
|||
Leverage Ratio
|
Not to exceed 3.0 to 1.0
|
1.1 to 1.0
|
||
Interest Coverage Ratio
|
Not less than 3.5 to 1.0
|
5.3 to 1.0
|
Six Months Ended
|
||||||||
June 30,
|
June 24,
|
|||||||
2013
|
2012
|
|||||||
Net cash provided by operating activities
|
$ | 47,232 | $ | 65,162 | ||||
Purchases of property and equipment
|
(25,493 | ) | (15,046 | ) | ||||
Free cash flow (a)
|
$ | 21,739 | $ | 50,116 |
|
(a)
|
Free cash flow is defined as net cash provided by operating activities (from the consolidated statements of cash flows) less the purchases of property and equipment. We believe free cash flow is an important measure because it is one factor that management uses in determining the amount of cash available for discretionary investment. See previous “Non-GAAP Measures” for discussion about this non-GAAP measure, its limitations and why we present free cash flow alongside the most directly comparable GAAP measure.
|
●
|
aggressive changes in pricing or other marketing or promotional strategies by competitors which may adversely affect sales; and new product and concept developments by food industry competitors;
|
●
|
changes in consumer preferences and adverse general economic and political conditions, including increasing tax rates, and their resulting impact on consumer buying habits;
|
●
|
the impact that product recalls, food quality or safety issues, and general public health concerns could have on our restaurants;
|
●
|
failure to maintain our brand strength and quality reputation;
|
●
|
the ability of the company and its franchisees to meet planned growth targets and operate new and existing restaurants profitably, which could be impacted by challenges securing financing, finding suitable store locations or securing required domestic or foreign government permits and approvals;
|
●
|
increases in or sustained high costs of food ingredients and other commodities;
|
●
|
disruption of our supply chain or our commissary operations due to sole or limited source of suppliers or weather, drought, disease or other disruption beyond our control;
|
●
|
increased risks associated with our international operations, including economic and political conditions in our international markets and difficulty in meeting planned sales targets and new store growth for our international operations;
|
●
|
increased employee compensation, benefits, insurance, regulatory compliance and similar costs, including increased costs resulting from federal health care legislation;
|
●
|
the credit performance of our franchise loan program;
|
●
|
the impact of the resolution of current or future claims and litigation, and current or proposed legislation impacting our business;
|
●
|
currency exchange or interest rates;
|
●
|
failure to effectively execute succession planning, and our reliance on the services of our Founder and CEO, who also serves as our brand spokesperson; and
|
●
|
disruption of critical business or information technology systems, and risks associated with security breaches, including theft of company and customer information.
|
2014
|
2013
|
2012
|
||||||||||
Projected
|
Projected
|
Actual
|
||||||||||
Block Price
|
Block Price
|
Block Price
|
||||||||||
Quarter 1
|
$ | 1.652 | * | $ | 1.662 | $ | 1.522 | |||||
Quarter 2
|
1.695 | * | 1.784 | 1.539 | ||||||||
Quarter 3
|
1.790 | * | 1.759 | * | 1.750 | |||||||
Quarter 4
|
1.796 | * | 1.761 | * | 1.939 | |||||||
Full Year
|
$ | 1.733 | * | $ | 1.742 | * | $ | 1.692 |
Total Number
|
Maximum Dollar
|
||||||||||||
Total
|
Average
|
of Shares
|
Value of Shares
|
||||||||||
Number
|
Price
|
Purchased as Part of
|
that May Yet Be
|
||||||||||
of Shares
|
Paid per
|
Publicly Announced
|
Purchased Under the
|
||||||||||
Fiscal Period
|
Purchased
|
Share
|
Plans or Programs
|
Plans or Programs
|
|||||||||
04/01/2013 - 04/28/2013
|
271 | $61.05 | 50,569 | $91,777 | |||||||||
04/29/2013 - 05/26/2013
|
53 | $62.40 | 50,622 | $88,477 | |||||||||
05/27/2013 - 06/30/2013
|
105 | $64.85 | 50,727 | $81,638 |
Exhibit
|
||
Number
|
Description
|
|
10.1
|
Transition Agreement and Release between Papa John’s International, Inc. and Andrew M. Varga dated April 19, 2013. Exhibit 10.1 to our Report on Form 8-K/A as filed on April 23, 2013 is incorporated herein by reference.
|
|
10.2
|
$300,000,000 Revolving Credit Facility / First Amended and Restated Credit Agreement dated April 30, 2013 by and among Papa John’s International, Inc., the Guarantors Party thereto, RSC Insurance Services, Ltd., a Bermuda company, the Banks party thereto, PNC Bank, National Association, as Administrative Agent, JPMorgan Chase Bank, N.A., as Co-Syndication Agent, U.S. Bank National Association, as Co-Syndication Agent, Bank of America, N.A., as Documentation Agent, PNC Capital Markets LLC, as Joint Lead Arranger and as Joint Bookrunner, and J.P. Morgan Securities LLC, as Joint Lead Arranger and as Joint Bookrunner. Exhibit 10.1 to our Report on Form 8-K as filed on May 6, 2013 is incorporated herein by reference.
|
|
31.1
|
Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-15(e), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-15(e), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101
|
Financial statements from the quarterly report on Form 10-Q of Papa John’s International, Inc. for the quarter ended June 30, 2013, filed on August 6, 2013, formatted in XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.
|
PAPA JOHN’S INTERNATIONAL, INC.
|
|
(Registrant)
|
|
Date: August 6, 2013
|
/s/ Lance F. Tucker
|
Lance F. Tucker
|
|
Senior Vice President, Chief Financial Officer,
|
|
Chief Administrative Officer and Treasurer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Papa John’s International, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 6, 2013
|
/s/ John H. Schnatter
|
|
John H. Schnatter
|
||
Founder, Chairman and
|
||
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Papa John’s International, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 6, 2013
|
/s/ Lance F. Tucker
|
|
Lance F. Tucker
|
||
Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer
|
1.
|
The Report on Form 10-Q of the Company for the quarterly period ended June 30, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 6, 2013
|
/s/ John H. Schnatter
|
|
John H. Schnatter
|
||
Founder, Chairman and
|
||
Chief Executive Officer
|
1.
|
The Report on Form 10-Q of the Company for the quarterly period ended June 30, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 6, 2013
|
/s/ Lance F. Tucker
|
|
Lance F. Tucker
|
||
Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer
|