Papa Johns Announces Second Quarter 2023 Financial Results
North America comparable sales were down 1% compared with the second quarter of 2022 as the strength of Domestic Company-owned restaurants was offset by lower North America franchised restaurant comparable sales; International comparable sales were down 1% from a year ago and improved 5% from the first quarter.
Papa John’s International, Inc. (NASDAQ: PZZA) today announced financial results for the second quarter ended June 25, 2023.
Highlights
- North America comparable sales were down 1% compared with the second quarter of 2022 as the strength of Domestic Company-owned restaurants was offset by lower North America franchised restaurant comparable sales; International comparable sales were down 1% from a year ago and improved 5% from the first quarter.
- 47 net unit openings in the second quarter driven by International growth; On track to achieve 270 to 310 net new units in 2023.
- Global system-wide restaurant sales were $1.22 billion, a 2%(a) increase from the prior year second quarter.
- Total revenues of $515 million were down 2% from the second quarter a year ago driven by lower revenues in our North American commissary segment due to commodity price declines.
- Diluted earnings per common share was $0.54, compared with $0.70 for the second quarter of 2022; Adjusted diluted earnings per common share(b) was $0.59, compared with $0.74 for the second quarter a year ago.
- Announced 10% increase in annual dividend rate to $1.84 per share; declared third quarter dividend of $0.46.
“We are pleased with the solid execution that our teams have demonstrated in what continues to be a challenging operating environment,” said Rob Lynch, President and CEO. “Our company restaurants continued their strong performance with positive comp sales growth and year-over-year margin improvement above and beyond the benefits of moderating food costs. However, this solid performance was not enough to offset the lower-than-anticipated comps our franchisees experienced during the quarter. That being said, our entire system saw sequential sales improvement throughout the quarter with positive North America comp sales in June. This positive momentum has carried over, and accelerated, into the third quarter and we expect it to continue as we optimize our system’s revenue management strategies and expand one of our most popular pizza platforms with the recent introduction of Garlic Epic Stuffed Crust Pizza.”
Commenting on the Company’s International operations, Lynch stated, “Our international business is a long-term growth driver for Papa Johns. We’ve recently established a corporate-owned restaurant portfolio in the UK, our largest international market, allowing us to build a similar success model to the one we’ve created in the US. This model accelerates our ability to scale our company’s capabilities with franchisees in the UK, and worldwide, to grow comps and new unit development. While we know there will be macro-economic challenges ahead, particularly in the short term, we’re confident that we can improve sales and profitability within our UK market, and in our international segment overall.”
Lynch concluded by stating, “The level of operating and fiscal discipline our team has implemented across our business over the past year is remarkable. Our continued investments in sales-driving capabilities and operational excellence, combined with the strength of our balance sheet, gives us confidence that we will produce positive comp sales and attractive new unit development growth in the back half of 2023 and over the long-term.”
| ____________________________________________________ | ||
| (a) | Excludes the impact of foreign currency. | |
| (b) | Represents a non-GAAP financial measure. See “Non-GAAP Measures” for a reconciliation to the most comparable US GAAP measure. | |
Financial Highlights
|
|
| Three Months Ended |
| Six Months Ended | ||||||||||||||||
| (In thousands, except per share amounts) |
| June 25, |
| June 26, |
| Increase (Decrease) |
| June 25, |
| June 26, |
| Increase (Decrease) | ||||||||
| Total revenues |
| $ | 514,530 |
| $ | 522,665 |
| $ | (8,135 | ) |
| $ | 1,041,579 |
| $ | 1,065,357 |
| $ | (23,778 | ) |
| Operating income |
| $ | 34,912 |
| $ | 38,904 |
| $ | (3,992 | ) |
| $ | 72,708 |
| $ | 53,339 |
| $ | 19,369 |
|
| Adjusted operating income (a) |
| $ | 36,881 |
| $ | 40,411 |
| $ | (3,530 | ) |
| $ | 76,033 |
| $ | 85,642 |
| $ | (9,609 | ) |
| Net income attributable to the Company |
| $ | 17,768 |
| $ | 25,433 |
| $ | (7,665 | ) |
| $ | 40,144 |
| $ | 35,927 |
| $ | 4,217 |
|
| Diluted earnings per common share |
| $ | 0.54 |
| $ | 0.70 |
| $ | (0.16 | ) |
| $ | 1.20 |
| $ | 0.99 |
| $ | 0.21 |
|
| Adjusted diluted earnings per common share (a) |
| $ | 0.59 |
| $ | 0.74 |
| $ | (0.15 | ) |
| $ | 1.28 |
| $ | 1.69 |
| $ | (0.41 | ) |
| (a) Represents a Non-GAAP financial measure. See “Non-GAAP Measures” for a reconciliation to the most comparable US GAAP measures. | ||||||||||||||||||||
In the second quarter of 2023, the Company completed the purchase of 91 formerly franchised restaurants in the United Kingdom. The restaurants are now operating as International Company-owned restaurants effective June 2, 2023. Our second quarter results include royalty revenues for these restaurants for the period until June 2, 2023, and the restaurants are consolidated after this date with results reflected in International revenues and expenses.
Total revenues of $514.5 million decreased $8.1 million, or 1.6%, in the second quarter of 2023 compared with the prior year period. Excluding the impact of purchasing the 91 International stores in 2023, total revenues decreased $9.8 million, or 1.9%, compared with the prior period. The revenue decline was driven by lower North American commissary revenues, driven by lower sales volume and decreased commodity prices in 2023 as compared to 2022. The decrease was partially offset by comparable sales growth from Domestic Company-owned restaurants.
For the second quarter of 2023, global system-wide restaurant sales were $1.22 billion, up 2.0% from a year ago (excluding the impact of foreign currency). The increase reflected higher equivalent units from net restaurant openings primarily in International markets.
Operating income of $34.9 million for the second quarter of 2023 decreased $4.0 million compared with the second quarter last year. Adjusted operating income(a) was $36.9 million, down $3.5 million from the prior year period. The second quarter of 2023 reflects higher operating income from Domestic Company-owned restaurants as the Back to BETTER initiative drove increased comparable sales and labor efficiencies in this category compared to the prior year. Second quarter 2023 International operating income declined as compared to the prior year as a result of lower comparable sales and incremental marketing costs related to our efforts to reposition the UK market. General and administrative expenses increased as the second quarter of 2023 reflected increased variable compensation expense and costs related to the franchise operating conference, which was held in April 2023 for the first time since 2019.
Diluted earnings per common share was $0.54 for the second quarter of 2023 compared with $0.70 in the second quarter of 2022. Adjusted diluted earnings per common share(a) was $0.59 for the second quarter of 2023 compared with $0.74 in the second quarter of 2022. These changes were driven by the same factors impacting operating income and adjusted operating income as discussed above. In addition, diluted earnings per common share and adjusted diluted earnings per common share reflected higher interest expense compared with the second quarter of 2022. Interest expense increased in 2023 largely due to higher borrowings used to fund share repurchases.
See the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Quarterly Report on Form 10-Q filed with the SEC for additional information concerning our operating results for the three and six months ended June 25, 2023.
Global Restaurant Sales Information
Global restaurant and comparable sales information for the second quarter and six months ended June 25, 2023, compared with the second quarter and six months ended June 26, 2022 are as follows (See “Supplemental Information and Financial Statements” below for related definitions):
|
|
| Three Months Ended |
| Six Months Ended | ||||||||
| Amounts below exclude the impact of foreign currency |
| June 25, |
| June 26, |
| June 25, |
| June 26, | ||||
| Comparable sales growth (decline): |
|
|
|
|
|
|
|
| ||||
| Domestic Company-owned restaurants |
| 2.2 | % |
| (1.5 | )% |
| 2.8 | % |
| (1.3 | )% |
| North America franchised restaurants |
| (2.3 | )% |
| 1.4 | % |
| (1.6 | )% |
| 2.1 | % |
| North America restaurants |
| (1.4 | )% |
| 0.9 | % |
| (0.7 | )% |
| 1.4 | % |
| International restaurants |
| (0.7 | )% |
| (8.0 | )% |
| (3.3 | )% |
| (3.6 | )% |
| Total comparable sales growth (decline) |
| (1.3 | )% |
| (1.4 | )% |
| (1.3 | )% |
| 0.1 | % |
| System-wide restaurant sales growth (decline): |
|
|
|
|
|
|
|
| ||||
| Domestic Company-owned restaurants |
| 2.5 | % |
| 1.2 | % |
| 3.7 | % |
| 8.9 | % |
| North America franchised restaurants |
| (0.6 | )% |
| 2.7 | % |
| 0.1 | % |
| 1.4 | % |
| North America restaurants |
| — | % |
| 2.4 | % |
| 0.8 | % |
| 2.8 | % |
| International restaurants (a) |
| 8.6 | % |
| 3.4 | % |
| 5.8 | % |
| 8.3 | % |
| Total global system-wide restaurant sales growth (decline) |
| 2.0 | % |
| 2.6 | % |
| 2.0 | % |
| 4.2 | % |
| (a) The six months ended June 25, 2023 and June 26, 2022 exclude the impact of franchisee suspended restaurants. | ||||||||||||
Global Restaurant Unit Data
As of June 25, 2023, there were 5,780 Papa Johns restaurants operating in 48 countries and territories, as follows:
| Second Quarter | Domestic Company Owned |
| Franchised North America |
| Total North America |
| International Company Owned |
| International Franchised |
| Total International |
| System-wide | |||||
| Beginning - March 26, 2023 | 520 |
| 2,864 |
|
| 3,384 |
|
| — |
| 2,349 |
|
| 2,349 |
|
| 5,733 |
|
| Opened | — |
| 13 |
|
| 13 |
|
| — |
| 55 |
|
| 55 |
|
| 68 |
|
| Closed | — |
| (8 | ) |
| (8 | ) |
| — |
| (13 | ) |
| (13 | ) |
| (21 | ) |
| Acquired | 1 |
| — |
|
| 1 |
|
| 91 |
| — |
|
| 91 |
|
| 92 |
|
| Sold | — |
| (1 | ) |
| (1 | ) |
| — |
| (91 | ) |
| (91 | ) |
| (92 | ) |
| Ending - June 25, 2023 | 521 |
| 2,868 |
|
| 3,389 |
|
| 91 |
| 2,300 |
|
| 2,391 |
|
| 5,780 |
|
| Net Unit Growth | 1 |
| 4 |
|
| 5 |
|
| 91 |
| (49 | ) |
| 42 |
|
| 47 |
|
| Trailing four quarters net store growth/(decline) | 1 |
| 32 |
|
| 33 |
|
| 91 |
| 85 |
|
| 176 |
|
| 209 |
|
Free Cash Flow
Free cash flow, a non-GAAP financial measure which the Company defines as net cash provided by operating activities, less purchases of property and equipment, was $59.0 million for the six months ended June 25, 2023, compared with $14.8 million in the prior year period. The year over year change primarily reflects higher cash flow from operating activities as a result of favorable working capital changes partially offset by increases in purchases of property and equipment.
|
|
| Six Months Ended | ||||||
| (in thousands) |
| June 25, |
| June 26, | ||||
| Net cash provided by operating activities |
| $ | 93,735 |
|
| $ | 45,585 |
|
| Purchases of property and equipment |
|
| (34,759 | ) |
|
| (30,744 | ) |
| Free cash flow |
| $ | 58,976 |
|
| $ | 14,841 |
|
We view free cash flow as an important financial measure because it is one factor that management uses in determining the amount of cash available for discretionary investment. Free cash flow is not a term defined by GAAP, and as a result, our measure of free cash flow might not be comparable to similarly titled measures used by other companies. Free cash flow should not be construed as a substitute for or a better indicator of the Company’s performance than the Company’s GAAP measures.
Cash Dividend
The Company paid cash dividends of $13.9 million ($0.42 per common share) in the second quarter of 2023. On July 31, 2023, our Board of Directors declared a third quarter dividend of $0.46 per common share, representing a 10% increase from the previous dividend. The dividend will be paid on August 25, 2023 to stockholders of record as of the close of business on August 14, 2023.
|
|
| Three Months Ended |
| Six Months Ended | ||||||||||||
| (In thousands, except per share amounts) |
| June 25, |
| June 26, |
| June 25, |
| June 26, | ||||||||
|
|
|
|
|
|
|
|
|
| ||||||||
| Operating income |
| $ | 34,912 |
|
| $ | 38,904 |
|
| $ | 72,708 |
|
| $ | 53,339 |
|
| UK repositioning and acquisition-related costs (a) |
|
| 1,308 |
|
|
| — |
|
|
| 1,308 |
|
|
| — |
|
| Refranchising and impairment losses (b) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 25,796 |
|
| Legal settlement (c) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 5,000 |
|
| Other costs (d) |
|
| 661 |
|
|
| 1,507 |
|
|
| 2,017 |
|
|
| 1,507 |
|
| Adjusted operating income |
| $ | 36,881 |
|
| $ | 40,411 |
|
| $ | 76,033 |
|
| $ | 85,642 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Net income attributable to common shareholders |
| $ | 17,768 |
|
| $ | 25,240 |
|
| $ | 40,144 |
|
| $ | 35,693 |
|
| UK repositioning and acquisition-related costs (a) |
|
| 1,308 |
|
|
| — |
|
|
| 1,308 |
|
|
| — |
|
| Refranchising and impairment losses (b) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 25,796 |
|
| Legal settlement (c) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 5,000 |
|
| Other costs (d) |
|
| 661 |
|
|
| 1,507 |
|
|
| 2,017 |
|
|
| 1,507 |
|
| Tax effect of adjustments (e) |
|
| (449 | ) |
|
| (339 | ) |
|
| (758 | ) |
|
| (7,269 | ) |
| Adjusted net income attributable to common shareholders (f) |
| $ | 19,288 |
|
| $ | 26,408 |
|
| $ | 42,711 |
|
| $ | 60,727 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Diluted earnings per common share |
| $ | 0.54 |
|
| $ | 0.70 |
|
| $ | 1.20 |
|
| $ | 0.99 |
|
| UK repositioning and acquisition-related costs (a) |
|
| 0.04 |
|
|
| — |
|
|
| 0.04 |
|
|
| — |
|
| Refranchising and impairment losses (b) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.72 |
|
| Legal settlement (c) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.14 |
|
| Other costs (d) |
|
| 0.02 |
|
|
| 0.05 |
|
|
| 0.06 |
|
|
| 0.04 |
|
| Tax effect of adjustments (e) |
|
| (0.01 | ) |
|
| (0.01 | ) |
|
| (0.02 | ) |
|
| (0.20 | ) |
| Adjusted diluted earnings per common share (f) |
| $ | 0.59 |
|
| $ | 0.74 |
|
| $ | 1.28 |
|
| $ | 1.69 |
|
Footnotes to Non-GAAP Financial Measures
| (a) | Represents costs associated with repositioning the UK portfolio as well as transaction costs related to the acquisition of stores from franchisees. | ||
| (b) | Refranchising and impairment losses consisted of the following pre-tax adjustments: | ||
|
| Six Months Ended | ||
| (In thousands) | June 26, | ||
| Refranchising impairment loss (1) | $ | 8,412 | |
| Ukraine-related charge (2) |
| 17,384 | |
| Total adjustment | $ | 25,796 | |
|
| (1) | Represents a one-time, non-cash charge of $8.4 million ($0.23 loss per diluted share) recorded in the first quarter of 2022 associated with the refranchising of the Company’s controlling interest in the 90-restaurant joint venture, recorded as Refranchising and impairment loss. | |
|
| (2) | Represents a one-time non-cash charge of $17.4 million ($0.48 loss per diluted share) recorded in the first quarter of 2022 related to the reserve of certain loans and impairment of reacquired franchise rights related to the conflict in Ukraine and subsequent international government actions and sanctions, which were recorded as Refranchising and impairment loss of $2.8 million and General and administrative expenses of $14.6 million. | |
| (c) | Represents an accrual of a certain legal settlement, recorded in General and administrative expenses. | ||
| (d) | Represents severance and related costs associated with the transition of certain executives incurred during the three and six-month periods ended June 25, 2023 and June 26, 2022, which were recorded in General and administrative expenses. | ||
| (e) | The tax effect on non-GAAP adjustments was calculated by applying the marginal tax rates of 22.8% and 22.5% for the three and six-month periods ended June 25, 2023 and June 26, 2022, respectively. | ||
| (f) | Amounts shown exclude the impact of allocation of undistributed earnings to participating securities. | ||
| Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets | ||||||||
| (In thousands, except per share amounts) |
| June 25, |
| December 25, | ||||
|
|
| (Unaudited) |
|
| ||||
| Assets |
|
|
|
| ||||
| Current assets: |
|
|
|
| ||||
| Cash and cash equivalents |
| $ | 43,772 |
|
| $ | 47,373 |
|
| Accounts receivable, net |
|
| 94,255 |
|
|
| 102,533 |
|
| Notes receivable, current portion |
|
| 4,850 |
|
|
| 6,848 |
|
| Income tax receivable |
|
| 2,097 |
|
|
| 8,780 |
|
| Inventories |
|
| 37,515 |
|
|
| 41,382 |
|
| Prepaid expenses and other current assets |
|
| 56,086 |
|
|
| 44,123 |
|
| Assets held for sale (a) |
|
| 3,427 |
|
|
| — |
|
| Total current assets |
|
| 242,002 |
|
|
| 251,039 |
|
| Property and equipment, net |
|
| 264,393 |
|
|
| 249,793 |
|
| Finance lease right-of-use assets, net |
|
| 34,418 |
|
|
| 24,941 |
|
| Operating lease right-of-use assets |
|
| 171,550 |
|
|
| 172,425 |
|
| Notes receivable, less current portion, net |
|
| 15,809 |
|
|
| 21,248 |
|
| Goodwill |
|
| 76,623 |
|
|
| 70,616 |
|
| Other assets |
|
| 68,848 |
|
|
| 74,165 |
|
| Total assets |
| $ | 873,643 |
|
| $ | 864,227 |
|
|
|
|
|
|
| ||||
| Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit |
|
|
|
| ||||
| Current liabilities: |
|
|
|
| ||||
| Accounts payable |
| $ | 55,351 |
|
| $ | 62,316 |
|
| Income and other taxes payable |
|
| 8,148 |
|
|
| 8,766 |
|
| Accrued expenses and other current liabilities |
|
| 163,273 |
|
|
| 142,535 |
|
| Current deferred revenue |
|
| 19,587 |
|
|
| 21,272 |
|
| Current finance lease liabilities |
|
| 9,190 |
|
|
| 6,850 |
|
| Current operating lease liabilities |
|
| 25,715 |
|
|
| 23,418 |
|
| Current portion of long-term debt |
|
| 15,529 |
|
|
| — |
|
| Total current liabilities |
|
| 296,793 |
|
|
| 265,157 |
|
| Deferred revenue |
|
| 21,726 |
|
|
| 23,204 |
|
| Long-term finance lease liabilities |
|
| 26,486 |
|
|
| 19,022 |
|
| Long-term operating lease liabilities |
|
| 159,170 |
|
|
| 160,905 |
|
| Long-term debt, less current portion, net |
|
| 768,820 |
|
|
| 597,069 |
|
| Other long-term liabilities |
|
| 65,106 |
|
|
| 68,317 |
|
| Total liabilities |
|
| 1,338,101 |
|
|
| 1,133,674 |
|
|
|
|
|
|
| ||||
| Redeemable noncontrolling interests |
|
| 1,021 |
|
|
| 1,217 |
|
|
|
|
|
|
| ||||
| Stockholders’ deficit: |
|
|
|
| ||||
| Common stock ($0.01 par value per share; issued 49,209 at June 25, 2023 and 49,138 at December 26, 2022) |
|
| 492 |
|
|
| 491 |
|
| Additional paid-in capital |
|
| 445,964 |
|
|
| 449,829 |
|
| Accumulated other comprehensive loss |
|
| (7,289 | ) |
|
| (10,135 | ) |
| Retained earnings |
|
| 207,461 |
|
|
| 195,856 |
|
| Treasury stock (16,815 shares at June 25, 2023 and 14,402 shares at December 26, 2022, at cost) |
|
| (1,127,669 | ) |
|
| (922,434 | ) |
| Total stockholders’ deficit |
|
| (481,041 | ) |
|
| (286,393 | ) |
| Noncontrolling interests in subsidiaries |
|
| 15,562 |
|
|
| 15,729 |
|
| Total Stockholders’ deficit |
|
| (465,479 | ) |
|
| (270,664 | ) |
| Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit |
| $ | 873,643 |
|
| $ | 864,227 |
|
| (a) Represents vacant land adjacent to the Company’s Louisville office. | ||||||||
| Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) | ||||||||||||||||
|
|
| Three Months Ended |
| Six Months Ended | ||||||||||||
| (In thousands, except per share amounts) |
| June 25, |
| June 26, |
| June 25, |
| June 26, | ||||||||
|
|
|
|
|
|
|
|
|
| ||||||||
| Revenues: |
|
|
|
|
|
|
|
| ||||||||
| Domestic Company-owned restaurant sales |
| $ | 175,780 |
|
| $ | 171,411 |
|
| $ | 355,646 |
|
| $ | 370,176 |
|
| North America franchise royalties and fees |
|
| 34,711 |
|
|
| 34,917 |
|
|
| 70,783 |
|
|
| 69,185 |
|
| North America commissary revenues |
|
| 206,980 |
|
|
| 219,383 |
|
|
| 419,546 |
|
|
| 429,062 |
|
| International revenues |
|
| 34,608 |
|
|
| 31,958 |
|
|
| 66,071 |
|
|
| 66,575 |
|
| Other revenues |
|
| 62,451 |
|
|
| 64,996 |
|
|
| 129,533 |
|
|
| 130,359 |
|
| Total revenues |
|
| 514,530 |
|
|
| 522,665 |
|
|
| 1,041,579 |
|
|
| 1,065,357 |
|
| Costs and expenses: |
|
|
|
|
|
|
|
| ||||||||
| Operating costs (excluding depreciation and amortization shown separately below): |
|
|
|
|
|
|
|
| ||||||||
| Domestic Company-owned restaurant expenses |
|
| 143,705 |
|
|
| 142,026 |
|
|
| 291,489 |
|
|
| 303,687 |
|
| North America commissary expenses |
|
| 190,468 |
|
|
| 204,470 |
|
|
| 386,883 |
|
|
| 401,560 |
|
| International expenses |
|
| 20,435 |
|
|
| 19,236 |
|
|
| 37,746 |
|
|
| 39,150 |
|
| Other expenses |
|
| 58,996 |
|
|
| 60,648 |
|
|
| 120,074 |
|
|
| 121,203 |
|
| General and administrative expenses |
|
| 50,324 |
|
|
| 44,646 |
|
|
| 102,268 |
|
|
| 110,584 |
|
| Depreciation and amortization |
|
| 15,690 |
|
|
| 12,735 |
|
|
| 30,411 |
|
|
| 24,674 |
|
| Total costs and expenses |
|
| 479,618 |
|
|
| 483,761 |
|
|
| 968,871 |
|
|
| 1,000,858 |
|
| Refranchising and impairment loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (11,160 | ) |
| Operating income |
|
| 34,912 |
|
|
| 38,904 |
|
|
| 72,708 |
|
|
| 53,339 |
|
| Net interest expense |
|
| (11,275 | ) |
|
| (6,081 | ) |
|
| (20,296 | ) |
|
| (10,344 | ) |
| Income before income taxes |
|
| 23,637 |
|
|
| 32,823 |
|
|
| 52,412 |
|
|
| 42,995 |
|
| Income tax expense |
|
| 5,778 |
|
|
| 7,093 |
|
|
| 12,007 |
|
|
| 5,838 |
|
| Net income before attribution to noncontrolling interests |
|
| 17,859 |
|
|
| 25,730 |
|
|
| 40,405 |
|
|
| 37,157 |
|
| Net income attributable to noncontrolling interests |
|
| (91 | ) |
|
| (297 | ) |
|
| (261 | ) |
|
| (1,230 | ) |
| Net income attributable to the Company |
| $ | 17,768 |
|
| $ | 25,433 |
|
| $ | 40,144 |
|
| $ | 35,927 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Calculation of net income for earnings per share: |
|
|
|
|
|
|
|
| ||||||||
| Net income attributable to the Company |
| $ | 17,768 |
|
| $ | 25,433 |
|
| $ | 40,144 |
|
| $ | 35,927 |
|
| Dividends paid to participating securities |
|
| — |
|
|
| (82 | ) |
|
| — |
|
|
| (141 | ) |
| Net income attributable to participating securities |
|
| — |
|
|
| (111 | ) |
|
| — |
|
|
| (93 | ) |
| Net income attributable to common shareholders |
| $ | 17,768 |
|
| $ | 25,240 |
|
| $ | 40,144 |
|
| $ | 35,693 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Basic earnings per common share |
| $ | 0.55 |
|
| $ | 0.71 |
|
| $ | 1.20 |
|
| $ | 1.00 |
|
| Diluted earnings per common share |
| $ | 0.54 |
|
| $ | 0.70 |
|
| $ | 1.20 |
|
| $ | 0.99 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Basic weighted average common shares outstanding |
|
| 32,563 |
|
|
| 35,624 |
|
|
| 33,359 |
|
|
| 35,775 |
|
| Diluted weighted average common shares outstanding |
|
| 32,650 |
|
|
| 35,824 |
|
|
| 33,487 |
|
|
| 36,032 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Dividends declared per common share |
| $ | 0.42 |
|
| $ | 0.35 |
|
| $ | 0.84 |
|
| $ | 0.70 |
|
| Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
|
|
| Six Months Ended | ||||||
| (In thousands) |
| June 25, |
| June 26, | ||||
|
|
|
|
|
| ||||
| Operating activities |
|
|
|
| ||||
| Net income before attribution to noncontrolling interests |
| $ | 40,405 |
|
| $ | 37,157 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
| ||||
| Provision for allowance for credit losses on accounts and notes receivable |
|
| 595 |
|
|
| 15,558 |
|
| Depreciation and amortization |
|
| 30,411 |
|
|
| 24,674 |
|
| Refranchising and impairment loss |
|
| — |
|
|
| 11,160 |
|
| Deferred income taxes |
|
| 3,664 |
|
|
| (2,993 | ) |
| Stock-based compensation expense |
|
| 8,498 |
|
|
| 9,100 |
|
| Other |
|
| (452 | ) |
|
| (2,071 | ) |
| Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
| ||||
| Accounts receivable |
|
| 4,299 |
|
|
| (9,177 | ) |
| Income tax receivable |
|
| 6,683 |
|
|
| 5,369 |
|
| Inventories |
|
| 4,109 |
|
|
| (3,815 | ) |
| Prepaid expenses and other current assets |
|
| 46 |
|
|
| (3,901 | ) |
| Other assets and liabilities |
|
| 140 |
|
|
| (5,379 | ) |
| Accounts payable |
|
| (8,174 | ) |
|
| 12,742 |
|
| Income and other taxes payable |
|
| (514 | ) |
|
| (3,175 | ) |
| Accrued expenses and other current liabilities |
|
| 7,203 |
|
|
| (37,456 | ) |
| Deferred revenue |
|
| (3,178 | ) |
|
| (2,208 | ) |
| Net cash provided by operating activities |
|
| 93,735 |
|
|
| 45,585 |
|
| Investing activities |
|
|
|
| ||||
| Purchases of property and equipment |
|
| (34,759 | ) |
|
| (30,744 | ) |
| Notes issued |
|
| (4,374 | ) |
|
| (1,098 | ) |
| Repayments of notes issued |
|
| 3,224 |
|
|
| 6,743 |
|
| Acquisitions, net of cash acquired |
|
| — |
|
|
| (1,250 | ) |
| Other |
|
| 182 |
|
|
| 238 |
|
| Net cash used in investing activities |
|
| (35,727 | ) |
|
| (12,523 | ) |
| Financing activities |
|
|
|
| ||||
| Net proceeds of revolving credit facilities |
|
| 186,529 |
|
|
| 55,000 |
|
| Proceeds from exercise of stock options |
|
| 682 |
|
|
| 1,908 |
|
| Acquisition of Company common stock |
|
| (210,348 | ) |
|
| (75,471 | ) |
| Dividends paid to common stockholders |
|
| (28,485 | ) |
|
| (25,101 | ) |
| Tax payments for equity award issuances |
|
| (6,108 | ) |
|
| (7,526 | ) |
| Distributions to noncontrolling interests |
|
| (323 | ) |
|
| (835 | ) |
| Other |
|
| (3,567 | ) |
|
| 1,348 |
|
| Net cash used in financing activities |
|
| (61,620 | ) |
|
| (50,677 | ) |
| Effect of exchange rate changes on cash and cash equivalents |
|
| 11 |
|
|
| (871 | ) |
| Change in cash and cash equivalents |
|
| (3,601 | ) |
|
| (18,486 | ) |
| Cash and cash equivalents at beginning of period |
|
| 47,373 |
|
|
| 70,610 |
|
| Cash and cash equivalents at end of period |
| $ | 43,772 |
|
| $ | 52,124 |
|