pzza-202209250000901491--12-252022Q3falseP1YP1YP1YP1YP1Y00009014912021-12-272022-09-2500009014912022-10-28xbrli:shares00009014912022-09-25iso4217:USD00009014912021-12-26iso4217:USDxbrli:shares0000901491pzza:DomesticCompanyOwnedRestaurantsSegmentMember2022-06-272022-09-250000901491pzza:DomesticCompanyOwnedRestaurantsSegmentMember2021-06-282021-09-260000901491pzza:DomesticCompanyOwnedRestaurantsSegmentMember2021-12-272022-09-250000901491pzza:DomesticCompanyOwnedRestaurantsSegmentMember2020-12-282021-09-260000901491pzza:NorthAmericaFranchisingSegmentMember2022-06-272022-09-250000901491pzza:NorthAmericaFranchisingSegmentMember2021-06-282021-09-260000901491pzza:NorthAmericaFranchisingSegmentMember2021-12-272022-09-250000901491pzza:NorthAmericaFranchisingSegmentMember2020-12-282021-09-260000901491pzza:NorthAmericaCommissarySegmentMember2022-06-272022-09-250000901491pzza:NorthAmericaCommissarySegmentMember2021-06-282021-09-260000901491pzza:NorthAmericaCommissarySegmentMember2021-12-272022-09-250000901491pzza:NorthAmericaCommissarySegmentMember2020-12-282021-09-260000901491pzza:InternationalSegmentMember2022-06-272022-09-250000901491pzza:InternationalSegmentMember2021-06-282021-09-260000901491pzza:InternationalSegmentMember2021-12-272022-09-250000901491pzza:InternationalSegmentMember2020-12-282021-09-260000901491pzza:OtherSegmentMember2022-06-272022-09-250000901491pzza:OtherSegmentMember2021-06-282021-09-260000901491pzza:OtherSegmentMember2021-12-272022-09-250000901491pzza:OtherSegmentMember2020-12-282021-09-2600009014912022-06-272022-09-2500009014912021-06-282021-09-2600009014912020-12-282021-09-260000901491us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-06-272022-09-250000901491us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-12-272022-09-250000901491us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-06-282021-09-260000901491us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-12-282021-09-260000901491us-gaap:InterestRateSwapMemberus-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-06-272022-09-250000901491us-gaap:InterestRateSwapMemberus-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-12-272022-09-250000901491us-gaap:InterestRateSwapMemberus-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-06-282021-09-260000901491us-gaap:InterestRateSwapMemberus-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-12-282021-09-260000901491us-gaap:CommonStockMember2022-06-260000901491us-gaap:AdditionalPaidInCapitalMember2022-06-260000901491us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-260000901491us-gaap:RetainedEarningsMember2022-06-260000901491us-gaap:TreasuryStockCommonMember2022-06-260000901491us-gaap:NoncontrollingInterestMember2022-06-2600009014912022-06-260000901491us-gaap:RetainedEarningsMember2022-06-272022-09-250000901491us-gaap:NoncontrollingInterestMember2022-06-272022-09-250000901491us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-272022-09-250000901491us-gaap:AdditionalPaidInCapitalMember2022-06-272022-09-250000901491us-gaap:CommonStockMember2022-06-272022-09-250000901491us-gaap:TreasuryStockCommonMember2022-06-272022-09-250000901491us-gaap:CommonStockMember2022-09-250000901491us-gaap:AdditionalPaidInCapitalMember2022-09-250000901491us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-250000901491us-gaap:RetainedEarningsMember2022-09-250000901491us-gaap:TreasuryStockCommonMember2022-09-250000901491us-gaap:NoncontrollingInterestMember2022-09-250000901491us-gaap:CommonStockMember2021-12-260000901491us-gaap:AdditionalPaidInCapitalMember2021-12-260000901491us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-260000901491us-gaap:RetainedEarningsMember2021-12-260000901491us-gaap:TreasuryStockCommonMember2021-12-260000901491us-gaap:NoncontrollingInterestMember2021-12-260000901491us-gaap:RetainedEarningsMember2021-12-272022-09-250000901491us-gaap:NoncontrollingInterestMember2021-12-272022-09-250000901491us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-272022-09-250000901491us-gaap:AdditionalPaidInCapitalMember2021-12-272022-09-250000901491us-gaap:CommonStockMember2021-12-272022-09-250000901491us-gaap:TreasuryStockCommonMember2021-12-272022-09-250000901491us-gaap:CorporateJointVentureMember2022-06-272022-09-250000901491us-gaap:CorporateJointVentureMember2021-12-272022-09-250000901491us-gaap:AccumulatedTranslationAdjustmentMember2022-09-250000901491us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-09-250000901491us-gaap:CommonStockMember2021-06-270000901491us-gaap:AdditionalPaidInCapitalMember2021-06-270000901491us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-270000901491us-gaap:RetainedEarningsMember2021-06-270000901491us-gaap:TreasuryStockCommonMember2021-06-270000901491us-gaap:NoncontrollingInterestMember2021-06-2700009014912021-06-270000901491us-gaap:RetainedEarningsMember2021-06-282021-09-260000901491us-gaap:NoncontrollingInterestMember2021-06-282021-09-260000901491us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-282021-09-260000901491us-gaap:AdditionalPaidInCapitalMember2021-06-282021-09-260000901491us-gaap:CommonStockMember2021-06-282021-09-260000901491us-gaap:TreasuryStockCommonMember2021-06-282021-09-260000901491us-gaap:CommonStockMember2021-09-260000901491us-gaap:AdditionalPaidInCapitalMember2021-09-260000901491us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-260000901491us-gaap:RetainedEarningsMember2021-09-260000901491us-gaap:TreasuryStockCommonMember2021-09-260000901491us-gaap:NoncontrollingInterestMember2021-09-2600009014912021-09-260000901491us-gaap:CommonStockMember2020-12-270000901491us-gaap:AdditionalPaidInCapitalMember2020-12-270000901491us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-270000901491us-gaap:RetainedEarningsMember2020-12-270000901491us-gaap:TreasuryStockCommonMember2020-12-270000901491us-gaap:NoncontrollingInterestMember2020-12-2700009014912020-12-270000901491us-gaap:RetainedEarningsMember2020-12-282021-09-260000901491us-gaap:NoncontrollingInterestMember2020-12-282021-09-260000901491us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-282021-09-260000901491us-gaap:CommonStockMember2020-12-282021-09-260000901491us-gaap:AdditionalPaidInCapitalMember2020-12-282021-09-260000901491us-gaap:TreasuryStockCommonMember2020-12-282021-09-260000901491us-gaap:CorporateJointVentureMember2021-06-282021-09-260000901491us-gaap:CorporateJointVentureMember2020-12-282021-09-260000901491us-gaap:AccumulatedTranslationAdjustmentMember2021-09-260000901491us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-09-26xbrli:pure0000901491us-gaap:CorporateJointVentureMember2022-09-25pzza:restaurant0000901491us-gaap:CorporateJointVentureMember2021-09-260000901491us-gaap:CorporateJointVentureMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2022-03-2800009014912022-03-282022-03-28pzza:entity0000901491us-gaap:CorporateJointVentureMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2022-03-282022-03-280000901491us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-09-250000901491us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-09-250000901491us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-09-250000901491us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-09-250000901491us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-260000901491us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-260000901491us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-260000901491us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-260000901491us-gaap:SeniorNotesMember2021-12-260000901491us-gaap:SeniorNotesMember2022-09-250000901491us-gaap:SeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-09-250000901491us-gaap:FairValueMeasurementsRecurringMemberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Member2022-09-250000901491us-gaap:SeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-260000901491us-gaap:FairValueMeasurementsRecurringMemberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Member2021-12-260000901491us-gaap:AccountsReceivableMember2021-12-260000901491us-gaap:NotesReceivableMember2021-12-260000901491us-gaap:AccountsReceivableMember2021-12-272022-09-250000901491us-gaap:NotesReceivableMember2021-12-272022-09-250000901491us-gaap:AccountsReceivableMember2022-09-250000901491us-gaap:NotesReceivableMember2022-09-250000901491country:RU2021-12-272022-03-270000901491country:GB2022-06-272022-09-250000901491pzza:UnitedKingdomFranchiseOwnedRestaurantsMember2022-09-25pzza:lease0000901491pzza:CorporateHeadquartersAtlantaGeorgiaMember2020-12-282021-09-260000901491us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2022-09-250000901491us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-12-260000901491pzza:FranchiseFeesAndUnredeemedGiftCardLiabilitiesMember2022-09-250000901491pzza:FranchiseFeesAndUnredeemedGiftCardLiabilitiesMember2021-12-260000901491pzza:FranchiseFeesAndUnredeemedGiftCardLiabilitiesMember2021-12-272022-09-250000901491pzza:CustomerLoyaltyProgramObligationsMember2022-09-250000901491pzza:CustomerLoyaltyProgramObligationsMember2021-12-260000901491pzza:CustomerLoyaltyProgramObligationsMember2021-12-272022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMember2022-09-262022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMember2023-09-252022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMember2024-09-302022-09-2500009014912025-09-29pzza:FranchiseRoyaltiesAndFeesMember2022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMember2026-09-282022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMember2027-09-272022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMember2022-09-250000901491pzza:AreaDevelopmentFeesMember2022-09-250000901491pzza:GiftCardMember2022-09-250000901491pzza:CommonStockRepurchaseProgramMember2021-10-280000901491pzza:CommonStockRepurchaseProgramMember2020-11-040000901491us-gaap:SubsequentEventMember2022-10-270000901491us-gaap:SubsequentEventMembersrt:ScenarioForecastMember2022-11-252022-11-250000901491us-gaap:SubsequentEventMember2022-10-272022-10-270000901491us-gaap:RevolvingCreditFacilityMember2022-09-250000901491us-gaap:RevolvingCreditFacilityMember2021-12-260000901491us-gaap:SeniorNotesMember2021-09-140000901491us-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodOneMembersrt:MinimumMember2021-09-142021-09-140000901491srt:MaximumMemberus-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodOneMember2021-09-142021-09-140000901491srt:MaximumMemberus-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodTwoMember2021-09-142021-09-140000901491us-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodTwoMember2021-09-142021-09-140000901491us-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodThreeMember2021-09-142021-09-140000901491pzza:PJIFacilitiesMember2021-09-140000901491pzza:SwinglineLoansMember2021-09-140000901491us-gaap:LetterOfCreditMember2021-09-140000901491pzza:PJIFacilitiesMember2022-09-250000901491pzza:PJIFacilitiesMember2021-09-142021-09-140000901491us-gaap:LondonInterbankOfferedRateLIBORMemberpzza:PJIFacilitiesMembersrt:MinimumMember2021-09-142021-09-140000901491srt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMemberpzza:PJIFacilitiesMember2021-09-142021-09-140000901491pzza:PJIFacilitiesMemberpzza:FederalFundsRateMember2021-09-142021-09-140000901491pzza:PJIFacilitiesMemberpzza:LondonInterbankOfferedRateMember2021-09-142021-09-140000901491pzza:PJIFacilitiesMemberus-gaap:BaseRateMembersrt:MinimumMember2021-09-142021-09-140000901491srt:MaximumMemberpzza:PJIFacilitiesMemberus-gaap:BaseRateMember2021-09-142021-09-14utr:Q0000901491pzza:PJIFacilitiesMembersrt:MinimumMember2021-09-142021-09-140000901491srt:MaximumMemberpzza:PJIFacilitiesMember2021-09-142021-09-140000901491srt:MaximumMemberpzza:AmendmentToCreditAgreementMember2021-09-140000901491srt:MinimumMemberpzza:AmendmentToCreditAgreementMember2021-09-140000901491pzza:PJMFRevolvingFacilityMember2015-09-300000901491pzza:SecuredOvernightFinancingRateSOFRMemberpzza:PJMFRevolvingFacilityMember2021-12-272022-09-250000901491pzza:PJMFRevolvingFacilityMember2021-12-260000901491pzza:PJMFRevolvingFacilityMember2022-09-250000901491us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-250000901491pzza:InterestRateSwapApril2018233FixedMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-250000901491pzza:InterestRateSwapApril2018236FixedMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-250000901491pzza:InterestRateSwapApril2018234FixedMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-250000901491us-gaap:InterestRateSwapMemberus-gaap:OtherCurrentAssetsMember2022-09-250000901491us-gaap:InterestRateSwapMemberus-gaap:OtherCurrentAssetsMember2021-12-260000901491us-gaap:InterestRateSwapMemberus-gaap:OtherLiabilitiesMember2022-09-250000901491us-gaap:InterestRateSwapMemberus-gaap:OtherLiabilitiesMember2021-12-260000901491us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2022-06-272022-09-250000901491us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2021-06-282021-09-260000901491us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2021-12-272022-09-250000901491us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2020-12-282021-09-260000901491pzza:PapaJohnsEmployeeAndFranchiseEmployeeAntitrustLitigationMemberus-gaap:SettledLitigationMember2022-04-142022-04-140000901491us-gaap:PendingLitigationMemberpzza:DurlingEtAlVPapaJohnsInternationalIncMember2018-10-29pzza:employee0000901491srt:MaximumMemberus-gaap:PendingLitigationMemberus-gaap:SubsequentEventMemberpzza:DurlingEtAlVPapaJohnsInternationalIncMember2022-09-302022-09-300000901491us-gaap:PendingLitigationMemberpzza:DurlingEtAlVPapaJohnsInternationalIncMember2022-06-272022-09-250000901491us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2022-03-282022-03-280000901491us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2021-12-272022-03-270000901491us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2022-03-2800009014912022-03-282022-06-26pzza:segment0000901491us-gaap:SalesMember2022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:DomesticCompanyOwnedRestaurantsSegmentMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:DomesticCompanyOwnedRestaurantsSegmentMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:DomesticCompanyOwnedRestaurantsSegmentMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:DomesticCompanyOwnedRestaurantsSegmentMember2020-12-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaFranchisingSegmentMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaFranchisingSegmentMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaFranchisingSegmentMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaFranchisingSegmentMember2020-12-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaCommissarySegmentMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaCommissarySegmentMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaCommissarySegmentMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaCommissarySegmentMember2020-12-282021-09-260000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMember2022-06-272022-09-250000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMember2021-06-282021-09-260000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMember2021-12-272022-09-250000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMember2020-12-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:OtherSegmentMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:OtherSegmentMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:OtherSegmentMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:OtherSegmentMember2020-12-282021-09-260000901491pzza:NorthAmericaFranchisingSegmentMemberus-gaap:IntersegmentEliminationMember2022-06-272022-09-250000901491pzza:NorthAmericaFranchisingSegmentMemberus-gaap:IntersegmentEliminationMember2021-06-282021-09-260000901491pzza:NorthAmericaFranchisingSegmentMemberus-gaap:IntersegmentEliminationMember2021-12-272022-09-250000901491pzza:NorthAmericaFranchisingSegmentMemberus-gaap:IntersegmentEliminationMember2020-12-282021-09-260000901491pzza:NorthAmericaCommissarySegmentMemberus-gaap:IntersegmentEliminationMember2022-06-272022-09-250000901491pzza:NorthAmericaCommissarySegmentMemberus-gaap:IntersegmentEliminationMember2021-06-282021-09-260000901491pzza:NorthAmericaCommissarySegmentMemberus-gaap:IntersegmentEliminationMember2021-12-272022-09-250000901491pzza:NorthAmericaCommissarySegmentMemberus-gaap:IntersegmentEliminationMember2020-12-282021-09-260000901491pzza:OtherSegmentMemberus-gaap:IntersegmentEliminationMember2022-06-272022-09-250000901491pzza:OtherSegmentMemberus-gaap:IntersegmentEliminationMember2021-06-282021-09-260000901491pzza:OtherSegmentMemberus-gaap:IntersegmentEliminationMember2021-12-272022-09-250000901491pzza:OtherSegmentMemberus-gaap:IntersegmentEliminationMember2020-12-282021-09-260000901491us-gaap:IntersegmentEliminationMember2022-06-272022-09-250000901491us-gaap:IntersegmentEliminationMember2021-06-282021-09-260000901491us-gaap:IntersegmentEliminationMember2021-12-272022-09-250000901491us-gaap:IntersegmentEliminationMember2020-12-282021-09-260000901491us-gaap:CorporateNonSegmentMember2022-06-272022-09-250000901491us-gaap:CorporateNonSegmentMember2021-06-282021-09-260000901491us-gaap:CorporateNonSegmentMember2021-12-272022-09-250000901491us-gaap:CorporateNonSegmentMember2020-12-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:DomesticCompanyOwnedRestaurantsSegmentMember2022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaCommissarySegmentMember2022-09-250000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMember2022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:OtherSegmentMember2022-09-250000901491us-gaap:CorporateNonSegmentMember2022-09-250000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMembercountry:GB2022-06-272022-09-250000901491us-gaap:AccountsReceivableMemberpzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMember2021-12-272022-09-250000901491us-gaap:NotesReceivableMemberus-gaap:CorporateNonSegmentMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:DomesticCompanyOwnedRestaurantsSegmentMemberpzza:CompanyOwnedRestaurantsMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:CompanyOwnedRestaurantsMember2022-06-272022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMemberus-gaap:OperatingSegmentsMemberpzza:NorthAmericaFranchisingSegmentMember2022-06-272022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMemberpzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMember2022-06-272022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMemberus-gaap:OperatingSegmentsMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaCommissarySegmentMemberpzza:CommissarySalesMember2022-06-272022-09-250000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMemberpzza:CommissarySalesMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:CommissarySalesMember2022-06-272022-09-250000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMemberpzza:OtherSalesMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMemberpzza:OtherSalesMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:OtherSalesMember2022-06-272022-09-250000901491us-gaap:AllOtherSegmentsMemberus-gaap:IntersegmentEliminationMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMember2022-06-272022-09-250000901491pzza:InternationalOtherRevenueMemberpzza:InternationalSegmentMember2022-06-272022-09-250000901491pzza:InternationalOtherRevenueMemberus-gaap:AllOtherSegmentsMember2022-06-272022-09-250000901491us-gaap:AllOtherSegmentsMember2022-06-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:DomesticCompanyOwnedRestaurantsSegmentMemberpzza:CompanyOwnedRestaurantsMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:CompanyOwnedRestaurantsMember2021-06-282021-09-260000901491pzza:FranchiseRoyaltiesAndFeesMemberus-gaap:OperatingSegmentsMemberpzza:NorthAmericaFranchisingSegmentMember2021-06-282021-09-260000901491pzza:FranchiseRoyaltiesAndFeesMemberpzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMember2021-06-282021-09-260000901491pzza:FranchiseRoyaltiesAndFeesMemberus-gaap:OperatingSegmentsMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaCommissarySegmentMemberpzza:CommissarySalesMember2021-06-282021-09-260000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMemberpzza:CommissarySalesMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:CommissarySalesMember2021-06-282021-09-260000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMemberpzza:OtherSalesMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMemberpzza:OtherSalesMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:OtherSalesMember2021-06-282021-09-260000901491us-gaap:AllOtherSegmentsMemberus-gaap:IntersegmentEliminationMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMember2021-06-282021-09-260000901491pzza:InternationalOtherRevenueMemberpzza:InternationalSegmentMember2021-06-282021-09-260000901491pzza:InternationalOtherRevenueMemberus-gaap:AllOtherSegmentsMember2021-06-282021-09-260000901491us-gaap:AllOtherSegmentsMember2021-06-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:DomesticCompanyOwnedRestaurantsSegmentMemberpzza:CompanyOwnedRestaurantsMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:CompanyOwnedRestaurantsMember2021-12-272022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMemberus-gaap:OperatingSegmentsMemberpzza:NorthAmericaFranchisingSegmentMember2021-12-272022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMemberpzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMember2021-12-272022-09-250000901491pzza:FranchiseRoyaltiesAndFeesMemberus-gaap:OperatingSegmentsMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaCommissarySegmentMemberpzza:CommissarySalesMember2021-12-272022-09-250000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMemberpzza:CommissarySalesMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:CommissarySalesMember2021-12-272022-09-250000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMemberpzza:OtherSalesMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMemberpzza:OtherSalesMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:OtherSalesMember2021-12-272022-09-250000901491us-gaap:AllOtherSegmentsMemberus-gaap:IntersegmentEliminationMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMember2021-12-272022-09-250000901491pzza:InternationalOtherRevenueMemberpzza:InternationalSegmentMember2021-12-272022-09-250000901491pzza:InternationalOtherRevenueMemberus-gaap:AllOtherSegmentsMember2021-12-272022-09-250000901491us-gaap:AllOtherSegmentsMember2021-12-272022-09-250000901491us-gaap:OperatingSegmentsMemberpzza:DomesticCompanyOwnedRestaurantsSegmentMemberpzza:CompanyOwnedRestaurantsMember2020-12-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:CompanyOwnedRestaurantsMember2020-12-282021-09-260000901491pzza:FranchiseRoyaltiesAndFeesMemberus-gaap:OperatingSegmentsMemberpzza:NorthAmericaFranchisingSegmentMember2020-12-282021-09-260000901491pzza:FranchiseRoyaltiesAndFeesMemberpzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMember2020-12-282021-09-260000901491pzza:FranchiseRoyaltiesAndFeesMemberus-gaap:OperatingSegmentsMember2020-12-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:NorthAmericaCommissarySegmentMemberpzza:CommissarySalesMember2020-12-282021-09-260000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMemberpzza:CommissarySalesMember2020-12-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:CommissarySalesMember2020-12-282021-09-260000901491pzza:InternationalSegmentMemberus-gaap:OperatingSegmentsMemberpzza:OtherSalesMember2020-12-282021-09-260000901491us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMemberpzza:OtherSalesMember2020-12-282021-09-260000901491us-gaap:OperatingSegmentsMemberpzza:OtherSalesMember2020-12-282021-09-260000901491us-gaap:AllOtherSegmentsMemberus-gaap:IntersegmentEliminationMember2020-12-282021-09-260000901491us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2020-12-282021-09-260000901491us-gaap:OperatingSegmentsMember2020-12-282021-09-260000901491pzza:InternationalOtherRevenueMemberpzza:InternationalSegmentMember2020-12-282021-09-260000901491pzza:InternationalOtherRevenueMemberus-gaap:AllOtherSegmentsMember2020-12-282021-09-260000901491us-gaap:AllOtherSegmentsMember2020-12-282021-09-26
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 25, 2022
OR
o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number: 0-21660
PAPA JOHN’S INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
| | | | | | | | |
| Delaware | | 61-1203323 |
| (State or other jurisdiction of | | (I.R.S. Employer Identification |
| incorporation or organization) | | number) |
2002 Papa John’s Boulevard
Louisville, KY 40299-2367
(Address of principal executive offices)
(502) 261-7272
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
| Title of each class: | | Trading Symbol | | Name of each exchange on which registered: |
| Common stock, $0.01 par value | | PZZA | | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No o
Indicate by check mark whether the registrant has submitted electronically every interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | |
Large Accelerated Filer x | | Accelerated filer o | |
Non-accelerated filer o | | Smaller reporting company ☐ | |
| | Emerging growth company ☐ | |
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
At October 28, 2022, there were outstanding 35,328,153 shares of the registrant’s common stock, par value $0.01 per share.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Papa John’s International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
| | | | | | | | | | | | | | |
| (In thousands, except per share amounts) | | September 25,
2022 | | December 26,
2021 |
| | (Unaudited) | | |
| Assets | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 36,618 | | | $ | 70,610 | |
| Accounts receivable, net | | 95,855 | | | 81,370 | |
| Notes receivable, current portion | | 7,556 | | | 12,352 | |
| Income tax receivable | | 10,533 | | | 9,386 | |
| Inventories | | 42,448 | | | 34,981 | |
| Prepaid expenses and other current assets | | 46,514 | | | 46,310 | |
| | | | |
| Total current assets | | 239,524 | | | 255,009 | |
| Property and equipment, net | | 230,894 | | | 223,856 | |
| Finance lease right-of-use assets, net | | 22,692 | | | 20,907 | |
| Operating lease right-of-use assets | | 167,470 | | | 176,256 | |
| Notes receivable, less current portion, net | | 17,397 | | | 35,504 | |
| Goodwill | | 69,476 | | | 80,632 | |
| Deferred income taxes | | 4,969 | | | 5,156 | |
| Other assets | | 77,326 | | | 88,384 | |
| Total assets | | $ | 829,748 | | | $ | 885,704 | |
| | | | |
| Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit | | | | |
| Current liabilities: | | | | |
| Accounts payable | | $ | 44,263 | | | $ | 28,092 | |
| Income and other taxes payable | | 18,171 | | | 19,996 | |
| Accrued expenses and other current liabilities | | 152,893 | | | 190,116 | |
| Current deferred revenue | | 19,925 | | | 21,700 | |
| Current finance lease liabilities | | 6,072 | | | 4,977 | |
| Current operating lease liabilities | | 22,403 | | | 22,543 | |
| | | | |
| Total current liabilities | | 263,727 | | | 287,424 | |
| Deferred revenue | | 22,987 | | | 13,846 | |
| Long-term finance lease liabilities | | 17,468 | | | 16,580 | |
| Long-term operating lease liabilities | | 155,952 | | | 160,672 | |
| Long-term debt, less current portion, net | | 548,753 | | | 480,730 | |
| Deferred income taxes | | 362 | | | 258 | |
| Other long-term liabilities | | 77,912 | | | 93,154 | |
| Total liabilities | | 1,087,161 | | | 1,052,664 | |
| | | | |
| Redeemable noncontrolling interests | | 1,206 | | | 5,498 | |
| | | | |
| Stockholders’ deficit: | | | | |
Common stock ($0.01 par value per share; issued 49,112 at September 25, 2022 and 49,002 at December 26, 2021) | | 491 | | | 490 | |
| Additional paid-in capital | | 444,643 | | | 445,126 | |
| Accumulated other comprehensive loss | | (13,868) | | | (9,971) | |
| Retained earnings | | 187,286 | | | 183,157 | |
Treasury stock (14,047 shares at September 25, 2022 and 13,205 shares at December 26, 2021, at cost) | | (892,818) | | | (806,472) | |
| Total stockholders’ deficit | | (274,266) | | | (187,670) | |
| Noncontrolling interests in subsidiaries | | 15,647 | | | 15,212 | |
| Total Stockholders’ deficit | | (258,619) | | | (172,458) | |
| Total liabilities, Redeemable noncontrolling interests and Stockholders’ deficit | | $ | 829,748 | | | $ | 885,704 | |
See accompanying notes.
Papa John’s International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| (In thousands, except per share amounts) | | September 25,
2022 | | September 26,
2021 | | September 25,
2022 | | September 26,
2021 |
| | | | | | | | |
| Revenues: | | | | | | | | |
| Domestic Company-owned restaurant sales | | $ | 166,050 | | | $ | 191,584 | | | $ | 536,226 | | | $ | 584,942 | |
| North America franchise royalties and fees | | 33,712 | | | 31,933 | | | 102,897 | | | 97,123 | |
| North America commissary revenues | | 216,115 | | | 189,224 | | | 645,177 | | | 560,743 | |
| International revenues | | 30,735 | | | 38,408 | | | 97,310 | | | 110,629 | |
| Other revenues | | 63,900 | | | 61,633 | | | 194,259 | | | 186,099 | |
| Total revenues | | 510,512 | | | 512,782 | | | 1,575,869 | | | 1,539,536 | |
| Costs and expenses: | | | | | | | | |
| Operating costs (excluding depreciation and amortization shown separately below): | | | | | | | | |
| Domestic Company-owned restaurant expenses | | 138,299 | | | 155,477 | | | 441,986 | | | 465,658 | |
| North America commissary expenses | | 203,129 | | | 175,399 | | | 604,689 | | | 518,310 | |
| International expenses | | 18,196 | | | 21,743 | | | 57,346 | | | 62,791 | |
| Other expenses | | 59,249 | | | 56,039 | | | 180,452 | | | 168,092 | |
| General and administrative expenses | | 57,935 | | | 54,070 | | | 168,519 | | | 157,779 | |
| Depreciation and amortization | | 13,338 | | | 11,477 | | | 38,012 | | | 36,830 | |
| Total costs and expenses | | 490,146 | | | 474,205 | | | 1,491,004 | | | 1,409,460 | |
| Refranchising and impairment loss | | (905) | | | — | | | (12,065) | | | — | |
| Operating income | | 19,461 | | | 38,577 | | | 72,800 | | | 130,076 | |
| Net interest expense | | (7,623) | | | (3,979) | | | (17,967) | | | (11,275) | |
| Income before income taxes | | 11,838 | | | 34,598 | | | 54,833 | | | 118,801 | |
| Income tax expense | | 3,374 | | | 4,057 | | | 9,212 | | | 19,387 | |
| Net income before attribution to noncontrolling interests | | 8,464 | | | 30,541 | | | 45,621 | | | 99,414 | |
| Net income attributable to noncontrolling interests | | (133) | | | (1,285) | | | (1,363) | | | (4,021) | |
| Net income attributable to the Company | | $ | 8,331 | | | $ | 29,256 | | | $ | 44,258 | | | $ | 95,393 | |
| | | | | | | | |
| Calculation of net income (loss) for earnings per share: | | | | | | | | |
| Net income attributable to the Company | | $ | 8,331 | | | $ | 29,256 | | | $ | 44,258 | | | $ | 95,393 | |
| Dividends on redemption of Series B Convertible Preferred Stock | | — | | | — | | | — | | | (109,852) | |
| Dividends paid to participating securities | | (86) | | | (137) | | | (228) | | | (5,964) | |
| Net income attributable to participating securities | | — | | | (158) | | | (34) | | | — | |
| Net income (loss) attributable to common shareholders | | $ | 8,245 | | | $ | 28,961 | | | $ | 43,996 | | | $ | (20,423) | |
| | | | | | | | |
| Basic earnings (loss) per common share | | $ | 0.23 | | | $ | 0.80 | | | $ | 1.23 | | | $ | (0.59) | |
| Diluted earnings (loss) per common share | | $ | 0.23 | | | $ | 0.79 | | | $ | 1.22 | | | $ | (0.59) | |
| | | | | | | | |
| Basic weighted average common shares outstanding | | 35,259 | | | 36,387 | | | 35,602 | | | 34,619 | |
| Diluted weighted average common shares outstanding | | 35,448 | | | 36,719 | | | 35,840 | | | 34,619 | |
| | | | | | | | |
| Dividends declared per common share | | $ | 0.42 | | | $ | 0.35 | | | $ | 1.12 | | | $ | 0.80 | |
See accompanying notes.
Papa John’s International, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| (In thousands) | | September 25,
2022 | | September 26,
2021 | | September 25,
2022 | | September 26,
2021 |
| | | | | | | | |
| Net income before attribution to noncontrolling interests | | $ | 8,464 | | | $ | 30,541 | | | $ | 45,621 | | | $ | 99,414 | |
| Other comprehensive (loss) income, before tax: | | | | | | | | |
| Foreign currency translation adjustments | | (4,849) | | | (1,113) | | | (9,819) | | | 383 | |
Interest rate swaps (1) | | 1,169 | | | 1,535 | | | 4,758 | | | 5,147 | |
| Other comprehensive (loss) income, before tax | | (3,680) | | | 422 | | | (5,061) | | | 5,530 | |
| Income tax effect: | | | | | | | | |
| Foreign currency translation adjustments | | 1,114 | | | 256 | | | 2,258 | | | (88) | |
Interest rate swaps (2) | | (268) | | | (353) | | | (1,094) | | | (1,184) | |
| Income tax effect | | 846 | | | (97) | | | 1,164 | | | (1,272) | |
| Other comprehensive (loss) income, net of tax | | (2,834) | | | 325 | | | (3,897) | | | 4,258 | |
| Comprehensive income before attribution to noncontrolling interests | | 5,630 | | | 30,866 | | | 41,724 | | | 103,672 | |
| Less: comprehensive (income), redeemable noncontrolling interests | | (31) | | | (692) | | | (559) | | | (2,192) | |
| Less: comprehensive (income), nonredeemable noncontrolling interests | | (102) | | | (593) | | | (804) | | | (1,829) | |
| Comprehensive income attributable to the Company | | $ | 5,497 | | | $ | 29,581 | | | $ | 40,361 | | | $ | 99,651 | |
_______________
| | | | | |
| (1) | Amounts reclassified out of accumulated other comprehensive loss into net interest expense include $1,650 and $1,850 for the three and nine months ended September 25, 2022, respectively, and $1,644 and $5,084 for the three and nine months ended September 26, 2021, respectively. |
| (2) | The income tax effects of amounts reclassified out of accumulated other comprehensive loss into net interest expense were $371 and $416 for the three and nine months ended September 25, 2022, respectively, and $368 and $1,139 for the three and nine months ended September 26, 2021, respectively. |
See accompanying notes.
Papa John’s International, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Deficit
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Papa John’s International, Inc. | | | | |
| (In thousands) | | Common
Stock
Shares
Outstanding | | Common
Stock | | Additional
Paid-In
Capital | | Accumulated
Other
Comprehensive
Loss | | Retained
Earnings | | Treasury
Stock | | Noncontrolling
Interests in
Subsidiaries | | Total
Stockholders’
Deficit |
| For the three months ended September 25, 2022 | | | | | | | | |
| Balance at June 26, 2022 | | 35,248 | | | $ | 491 | | | $ | 442,255 | | | $ | (11,034) | | | $ | 193,934 | | | $ | (875,205) | | | $ | 15,761 | | | $ | (233,798) | |
Net income (1) | | — | | | — | | | — | | | — | | | 8,331 | | | — | | | 102 | | | 8,433 | |
| Other comprehensive (loss), net of tax | | — | | | — | | | — | | | (2,834) | | | — | | | — | | | — | | | (2,834) | |
| Cash dividends on common stock | | — | | | — | | | 57 | | | — | | | (14,906) | | | — | | | — | | | (14,849) | |
| Exercise of stock options | | 16 | | | — | | | 823 | | | — | | | — | | | — | | | — | | | 823 | |
| Acquisition of Company common stock | | (229) | | | — | | | — | | | — | | | — | | | (19,529) | | | — | | | (19,529) | |
| Stock-based compensation expense | | — | | | — | | | 5,146 | | | — | | | — | | | — | | | — | | | 5,146 | |
| Issuance of restricted stock | | 50 | | | — | | | (1,671) | | | — | | | — | | | 1,760 | | | — | | | 89 | |
| Tax payments for equity award issuances | | (22) | | | — | | | (1,900) | | | — | | | — | | | — | | | — | | | (1,900) | |
| Distributions to noncontrolling interests | | — | | | — | | | — | | | — | | | — | | | — | | | (216) | | | (216) | |
| Other | | 2 | | | — | | | (67) | | | — | | | (73) | | | 156 | | | — | | | 16 | |
| Balance at September 25, 2022 | | 35,065 | | | $ | 491 | | | $ | 444,643 | | | $ | (13,868) | | | $ | 187,286 | | | $ | (892,818) | | | $ | 15,647 | | | $ | (258,619) | |
| | | | | | | | | | | | | | | | |
| For the nine months ended September 25, 2022 | | | | | | | | | | | | | | | | |
| Balance at December 26, 2021 | | 35,797 | | | $ | 490 | | | $ | 445,126 | | | $ | (9,971) | | | $ | 183,157 | | | $ | (806,472) | | | $ | 15,212 | | | $ | (172,458) | |
Net income (1) | | — | | | — | | | — | | | — | | | 44,258 | | | — | | | 804 | | | 45,062 | |
| Other comprehensive (loss), net of tax | | — | | | — | | | — | | | (3,897) | | | — | | | — | | | — | | | (3,897) | |
| Cash dividends on common stock | | — | | | — | | | 153 | | | — | | | (40,102) | | | — | | | — | | | (39,949) | |
| Exercise of stock options | | 55 | | | 1 | | | 2,730 | | | — | | | — | | | — | | | — | | | 2,731 | |
| Acquisition of Company common stock | | (982) | | | — | | | — | | | — | | | — | | | (95,000) | | | — | | | (95,000) | |
| Stock-based compensation expense | | — | | | — | | | 14,246 | | | — | | | — | | | — | | | — | | | 14,246 | |
| Issuance of restricted stock | | 279 | | | — | | | (8,122) | | | — | | | — | | | 8,210 | | | — | | | 88 | |
| Tax payments for equity award issuances | | (92) | | | — | | | (9,426) | | | — | | | — | | | — | | | — | | | (9,426) | |
| Distributions to noncontrolling interests | | — | | | — | | | — | | | — | | | — | | | — | | | (366) | | | (366) | |
| Other | | 8 | | | — | | | (64) | | | — | | | (27) | | | 444 | | | (3) | | | 350 | |
| Balance at September 25, 2022 | | 35,065 | | | $ | 491 | | | $ | 444,643 | | | $ | (13,868) | | | $ | 187,286 | | | $ | (892,818) | | | $ | 15,647 | | | $ | (258,619) | |
_______________
(1) Net income to the Company for the three and nine months ended September 25, 2022 excludes income of $31 and $559 allocable to the redeemable noncontrolling interests for our joint venture arrangements.
At September 25, 2022, the accumulated other comprehensive loss of $13,868 was comprised of net unrealized foreign currency translation loss of $12,430 and net unrealized loss on the interest rate swap agreements of $1,438.
See accompanying notes.
Papa John’s International, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Deficit (continued)
(Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Papa John’s International, Inc. | | | | |
| (In thousands) | | Common
Stock
Shares
Outstanding | | Common
Stock | | Additional
Paid-In
Capital | | Accumulated
Other
Comprehensive
Loss | | Retained
Earnings | | Treasury
Stock | | Noncontrolling
Interests in
Subsidiaries | | Total
Stockholders’
Deficit |
| For the three months ended September 26, 2021 | | | | | | | | |
| Balance at June 27, 2021 | | 36,215 | | | $ | 489 | | | $ | 435,608 | | | $ | (10,235) | | | $ | 154,769 | | | $ | (743,819) | | | $ | 15,290 | | | $ | (147,898) | |
Net income (1) | | — | | | — | | | — | | | — | | | 29,256 | | | — | | | 593 | | | 29,849 | |
| Other comprehensive income, net of tax | | — | | | — | | | — | | | 325 | | | — | | | — | | | — | | | 325 | |
| Cash dividends on common stock | | — | | | — | | | 48 | | | — | | | (12,845) | | | — | | | — | | | (12,797) | |
| Exercise of stock options | | 51 | | | 1 | | | 3,111 | | | — | | | — | | | — | | | — | | | 3,112 | |
| Acquisition of Company common stock | | (103) | | | — | | | — | | | — | | | — | | | (12,367) | | | — | | | (12,367) | |
| Stock-based compensation expense | | — | | | — | | | 4,317 | | | — | | | — | | | — | | | — | | | 4,317 | |
| Issuance of restricted stock | | 15 | | | — | | | (873) | | | — | | | — | | | 873 | | | — | | | — | |
| Tax payments for equity award issuances | | — | | | — | | | (1,423) | | | — | | | — | | | — | | | — | | | (1,423) | |
| Distributions to noncontrolling interests | | — | | | — | | | — | | | — | | | — | | | — | | | (594) | | | (594) | |
| Other | | 5 | | | — | | | (46) | | | — | | | 198 | | | 278 | | | — | | | 430 | |
| Balance at September 26, 2021 | | 36,183 | | | $ | 490 | | | $ | 440,742 | | | $ | (9,910) | | | $ | 171,378 | | | $ | (755,035) | | | $ | 15,289 | | | $ | (137,046) | |
| | | | | | | | | | | | | | | | |
| For the nine months ended September 26, 2021 | | | | | | | | | | | | | | | | |
| Balance at December 27, 2020 | | 32,545 | | | $ | 453 | | | $ | 254,103 | | | $ | (14,168) | | | $ | 219,158 | | | $ | (741,724) | | | $ | 15,239 | | | $ | (266,939) | |
Net income (1) | | — | | | — | | | — | | | — | | | 95,393 | | | — | | | 1,829 | | | 97,222 | |
| Other comprehensive income, net of tax | | — | | | — | | | — | | | 4,258 | | | — | | | — | | | — | | | 4,258 | |
| Repurchase and conversion of Series B Convertible Preferred Stock | | 3,489 | | | 35 | | | 174,631 | | | — | | | (110,498) | | | — | | | — | | | 64,168 | |
| Cash dividends on common stock | | — | | | — | | | 110 | | | — | | | (27,750) | | | — | | | — | | | (27,640) | |
| Cash dividends on preferred stock | | — | | | — | | | — | | | — | | | (4,121) | | | — | | | — | | | (4,121) | |
| Exercise of stock options | | 199 | | | 2 | | | 11,209 | | | — | | | — | | | — | | | — | | | 11,211 | |
| Acquisition of Company common stock | | (187) | | | — | | | — | | | — | | | — | | | (20,555) | | | — | | | (20,555) | |
| Stock-based compensation expense | | — | | | — | | | 12,519 | | | — | | | — | | | — | | | — | | | 12,519 | |
| Issuance of restricted stock | | 125 | | | — | | | (6,538) | | | — | | | — | | | 6,538 | | | — | | | — | |
| Tax payments for equity award issuances | | — | | | — | | | (5,310) | | | — | | | — | | | — | | | — | | | (5,310) | |
| Distributions to noncontrolling interests | | — | | | — | | | — | | | — | | | — | | | — | | | (1,779) | | | (1,779) | |
| Other | | 12 | | | — | | | 18 | | | — | | | (804) | | | 706 | | | — | | | (80) | |
| Balance at September 26, 2021 | | 36,183 | | | $ | 490 | | | $ | 440,742 | | | $ | (9,910) | | | $ | 171,378 | | | $ | (755,035) | | | $ | 15,289 | | | $ | (137,046) | |
(1) Net income to the Company for the three and nine months ended September 26, 2021 excludes $692 and $2,192 allocable to the redeemable noncontrolling interests for our joint venture arrangements.
At September 26, 2021, the accumulated other comprehensive loss of $9,910 was comprised of net unrealized foreign currency translation loss of $3,499 and net unrealized loss on the interest rate swap agreements of $6,411.
See accompanying notes.
Papa John’s International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| | | | | | | | | | | | | | | | | | |
| | | | Nine Months Ended |
| (In thousands) | | | | | | September 25,
2022 | | September 26,
2021 |
| | | | | | | | |
| Operating activities | | | | | | | | |
| Net income before attribution to noncontrolling interests | | | | | | $ | 45,621 | | | $ | 99,414 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Provision (benefit) for allowance for credit losses on accounts and notes receivable | | | | | | 18,576 | | | (920) | |
| Depreciation and amortization | | | | | | 38,012 | | | 36,830 | |
| Refranchising and impairment loss | | | | | | 12,065 | | | — | |
| Deferred income taxes | | | | | | 519 | | | (5,113) | |
| Stock-based compensation expense | | | | | | 14,246 | | | 12,519 | |
| Other | | | | | | (466) | | | 1,052 | |
| Changes in operating assets and liabilities, net of acquisitions: | | | | | | | | |
| Accounts receivable | | | | | | (19,584) | | | 5,955 | |
| Income tax receivable | | | | | | (1,146) | | | 674 | |
| Inventories | | | | | | (8,185) | | | (3,217) | |
| Prepaid expenses and other current assets | | | | | | 2,065 | | | 11,277 | |
| Other assets and liabilities | | | | | | (4,919) | | | (8,627) | |
| Accounts payable | | | | | | 16,188 | | | 5,014 | |
| Income and other taxes payable | | | | | | (1,789) | | | 15,958 | |
| Accrued expenses and other current liabilities | | | | | | (32,404) | | | 24,001 | |
| Deferred revenue | | | | | | (2,246) | | | (1,193) | |
| Net cash provided by operating activities | | | | | | 76,553 | | | 193,624 | |
| Investing activities | | | | | | | | |
| Purchases of property and equipment | | | | | | (48,424) | | | (41,328) | |
| Notes issued | | | | | | (2,248) | | | (14,637) | |
| Repayments of notes issued | | | | | | 8,125 | | | 15,352 | |
| Acquisitions, net of cash acquired | | | | | | (1,346) | | | (699) | |
| Proceeds from refranchising, net of cash transferred | | | | | | 13,588 | | | — | |
| Other | | | | | | 76 | | | 121 | |
| Net cash used in investing activities | | | | | | (30,229) | | | (41,191) | |
| Financing activities | | | | | | | | |
| Proceeds from issuance of senior notes | | | | | | — | | | 400,000 | |
| Net proceeds of revolving credit facilities | | | | | | 66,999 | | | 15,000 | |
| Debt issuance costs | | | | | | — | | | (9,179) | |
| Proceeds from exercise of stock options | | | | | | 2,730 | | | 11,211 | |
| Repurchase of Series B Convertible Preferred Stock | | | | | | — | | | (188,647) | |
| Acquisition of Company common stock | | | | | | (95,000) | | | (20,555) | |
| Dividends paid to common stockholders | | | | | | (39,949) | | | (27,640) | |
| Dividends paid to preferred stockholders | | | | | | — | | | (6,394) | |
| Tax payments for equity award issuances | | | | | | (9,426) | | | (5,310) | |
| | | | | | | | |
| Distributions to noncontrolling interests | | | | | | (1,090) | | | (2,914) | |
| Repayments of term loan | | | | | | — | | | (340,000) | |
| Other | | | | | | (3,480) | | | (2,630) | |
| Net cash used in financing activities | | | | | | (79,216) | | | (177,058) | |
| Effect of exchange rate changes on cash and cash equivalents | | | | | | (1,100) | | | 234 | |
| Change in cash and cash equivalents | | | | | | (33,992) | | | (24,391) | |
| Cash and cash equivalents at beginning of period | | | | | | 70,610 | | | 130,204 | |
| Cash and cash equivalents at end of period | | | | | | $ | 36,618 | | | $ | 105,813 | |
See accompanying notes.
Papa John’s International, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 25, 2022
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP
