Papa Johns Announces Fourth Quarter and Full Year 2025 Financial Results
Met or Exceeded Revised 2025 Financial Guidance Targets
2025 Global System-wide Restaurant Sales Increased 1%(a)
Fourth Quarter Global System-wide Restaurant Sales Decreased 1%(a)
Fourth Quarter Diluted EPS of
Introduces Fiscal Year 2026 Outlook
Full Year 2025 Highlights
-
Global system-wide restaurant sales were
$4.92 billion , a 1%(a) increase compared with the prior year. -
North America comparable sales decreased 2% asDomestic Company -owned restaurants were down 3% andNorth America franchised restaurants were down 2%; International comparable sales increased 5%; all compared with 2024. -
Opened 279 new restaurants in fiscal year 2025, comprised of 96 restaurant openings in
North America and 183 restaurant openings in International markets. -
Total revenues of
$2.1 billion were flat compared with the prior year. -
Net income was
$32 million compared with$84 million in 2024. -
Adjusted EBITDA(b) was
$201 million compared with$227 million in the prior year, including approximately$21 million in incremental marketing investment to support franchisees and brand positioning work. -
Diluted earnings per common share of
$0.90 compared with$2.54 in 2024. -
Adjusted diluted earnings per common share(b) was
$1.43 compared with$2.34 in the prior year.
Fourth Quarter 2025 Highlights
-
Global system-wide restaurant sales were
$1.23 billion , a 1%(a) decrease compared with the prior year fourth quarter. -
North America comparable sales decreased 5% asDomestic Company -owned restaurants were down 6% andNorth America franchised restaurants were down 5%; International comparable sales were up 6%, all compared with the prior year fourth quarter. -
Opened 142 new restaurants system-wide, comprised of 41 restaurant openings in
North America and 101 restaurant openings in International markets. -
Total revenues of
$498 million decreased 6% compared with the prior year fourth quarter. -
Net income was
$9 million compared with$15 million in the prior year fourth quarter. -
Adjusted EBITDA(b) was
$51 million compared with$58 million in the prior year quarter. -
Diluted earnings per common share was
$0.21 compared with$0.44 in the prior year fourth quarter. -
Adjusted diluted earnings per common share(b) was
$0.34 compared with$0.63 in the prior year quarter. -
Operational efficiency initiatives, including recently implemented programs, are expected to deliver at least
$25 million in corporate cost savings outside of marketing through 2027, with approximately$13 million expected to be realized in 2026. -
At least
$60 million of previously identified supply chain cost savings are expected to deliver approximately 160-basis points of incremental restaurant-level profitability improvement across both franchise and Company-owned restaurants inNorth America by fiscal year 2028. - Following a strategic review of its North American restaurant portfolio, the Company is implementing measures to optimize restaurant profitability and fleet health.
|
___________________________ a Growth rate excludes the impact of foreign currency. |
|
b Represents a Non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation to the most comparable |
CEO Commentary
“We are encouraged by the progress we are making in our transformation as we further reinforce our brand health, sharpen our value proposition, build our innovation pipeline and enhance the customer experience. These actions, alongside recent changes to our organizational structure to drive efficiencies, provide a strong foundation for our future,” said
“In the fourth quarter, solid execution drove the Company’s fifth consecutive quarter of positive comparable sales in our International markets, while
“In 2026, we are focused on continuing our transformation work to best position
Financial Highlights
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||||||
|
In thousands, except per share amounts |
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
||||||||||||
|
Total revenues |
|
$ |
498,179 |
|
$ |
530,770 |
|
$ |
(32,591 |
) |
|
$ |
2,053,808 |
|
$ |
2,059,387 |
|
$ |
(5,579 |
) |
||||
|
Net income |
|
$ |
8,630 |
|
|
$ |
14,959 |
|
|
$ |
(6,329 |
) |
|
$ |
32,117 |
|
|
$ |
84,197 |
|
|
$ |
(52,080 |
) |
|
Adjusted EBITDA (a) |
|
$ |
51,113 |
|
|
$ |
57,856 |
|
|
$ |
(6,743 |
) |
|
$ |
201,111 |
|
|
$ |
227,270 |
|
|
$ |
(26,159 |
) |
|
Diluted earnings per common share |
|
$ |
0.21 |
|
|
$ |
0.44 |
|
|
$ |
(0.23 |
) |
|
$ |
0.90 |
|
|
$ |
2.54 |
|
|
$ |
(1.64 |
) |
|
Adjusted diluted earnings per common share (a) |
|
$ |
0.34 |
|
|
$ |
0.63 |
|
|
$ |
(0.29 |
) |
|
$ |
1.43 |
|
|
$ |
2.34 |
|
|
$ |
(0.91 |
) |
|
________________________________________ |
|
|
(a) |
Represents a Non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation to the most comparable |
Results for the three months ended
Fourth Quarter 2025 Results
Revenue:
Total revenues of
System-wide sales:
Global system-wide restaurant sales were
Net income:
Fourth quarter 2025 Net income was
Adjusted EBITDA:
Adjusted EBITDA(b) was
Earnings per share:
Diluted earnings per common share was
Full Year 2025 Results
Revenue:
Total revenues of
System-wide sales:
Global system-wide restaurant sales were
Net income:
Net income of
Adjusted EBITDA:
Adjusted EBITDA(b) was
Earnings per share:
Diluted earnings per common share was
Refer to the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K filed with the
| ________________________________ | |
|
a |
Growth rate excludes the impact of foreign currency. |
|
b |
Represents a Non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation to the most comparable |
Free Cash Flow
Free cash flow, a non-GAAP financial measure which the Company defines as net cash provided by operating activities (from the Consolidated Statements of Cash Flows) less the purchases of property and equipment, excluding purchases of property and equipment related to damages from natural disasters, was
|
|
|
Year Ended |
||||||
|
In thousands |
|
|
|
|
||||
|
Net cash provided by operating activities |
|
$ |
126,000 |
|
|
$ |
106,632 |
|
|
Purchases of property and equipment |
|
|
(64,695 |
) |
|
|
(72,484 |
) |
|
Free cash flow |
|
$ |
61,305 |
|
|
$ |
34,148 |
|
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
Global Restaurant Sales Information
Global restaurant and comparable sales information for the year ended
|
|
|
Three Months Ended |
|
Year Ended |
||||||||
|
Growth rates exclude the impact of foreign currency |
|
|
|
|
|
|
|
|
||||
|
Comparable sales growth (decline): |
|
|
|
|
|
|
|
|
||||
|
|
|
(5.7 |
)% |
|
(5.7 |
)% |
|
(3.3 |
)% |
|
(4.9 |
)% |
|
|
|
(5.3 |
)% |
|
(4.0 |
)% |
|
(2.3 |
)% |
|
(3.5 |
)% |
|
|
|
(5.4 |
)% |
|
(4.4 |
)% |
|
(2.5 |
)% |
|
(3.8 |
)% |
|
International restaurants |
|
5.9 |
% |
|
2.1 |
% |
|
5.0 |
% |
|
(0.8 |
)% |
|
Total comparable sales growth (decline) |
|
(2.5 |
)% |
|
(2.8 |
)% |
|
(0.6 |
)% |
|
(3.1 |
)% |
|
System-wide restaurant sales growth (decline): |
|
|
|
|
|
|
|
|
||||
|
|
|
(5.5 |
)% |
|
(9.9 |
)% |
|
(1.2 |
)% |
|
(4.7 |
)% |
|
|
|
(4.2 |
)% |
|
(8.7 |
)% |
|
(1.0 |
)% |
|
(4.1 |
)% |
|
|
|
(4.5 |
)% |
|
(8.9 |
)% |
|
(1.0 |
)% |
|
(4.2 |
)% |
|
International restaurants |
|
8.1 |
% |
|
(4.7 |
)% |
|
7.7 |
% |
|
0.4 |
% |
|
Total global system-wide restaurant sales growth (decline) |
|
(1.4 |
)% |
|
(7.9 |
)% |
|
1.1 |
% |
|
(3.1 |
)% |
As of
|
Fourth Quarter |
|
|
|
|
|
|
|
|
International Franchised |
|
|
|
System-wide |
||||||||
|
Beginning:
|
545 |
|
|
2,962 |
|
|
3,507 |
|
|
13 |
|
2,474 |
|
|
2,487 |
|
|
5,994 |
|
||
|
Opened |
2 |
|
|
39 |
|
|
41 |
|
|
— |
|
|
101 |
|
|
101 |
|
|
142 |
|
|
|
Closed |
— |
|
|
(25 |
) |
|
(25 |
) |
|
— |
|
|
(28 |
) |
|
(28 |
) |
|
(53 |
) |
|
|
Refranchised |
(85 |
) |
|
85 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
Ending:
|
462 |
|
|
3,061 |
|
|
3,523 |
|
|
13 |
|
|
2,547 |
|
|
2,560 |
|
|
6,083 |
|
|
|
Net restaurant growth/(decline) |
(83 |
) |
|
99 |
|
|
16 |
|
|
— |
|
|
73 |
|
|
73 |
|
|
89 |
|
|
|
Fiscal year |
|
|
|
|
|
|
|
|
|
International Franchised |
|
|
|
System-wide |
|||||||
|
Beginning:
|
|
539 |
|
|
2,975 |
|
|
3,514 |
|
|
13 |
|
2,503 |
|
|
2,516 |
|
|
6,030 |
|
|
|
Opened |
|
9 |
|
|
87 |
|
|
96 |
|
|
— |
|
|
183 |
|
|
183 |
|
|
279 |
|
|
Closed |
|
(1 |
) |
|
(86 |
) |
|
(87 |
) |
|
— |
|
|
(139 |
) |
|
(139 |
) |
|
(226 |
) |
|
Refranchised |
|
(85 |
) |
|
85 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Ending:
|
|
462 |
|
|
3,061 |
|
|
3,523 |
|
|
13 |
|
|
2,547 |
|
|
2,560 |
|
|
6,083 |
|
|
Net restaurant growth/(decline) |
|
(77 |
) |
|
86 |
|
|
9 |
|
|
— |
|
|
44 |
|
|
44 |
|
|
53 |
|
2026 Outlook
The Company is introducing its 2026 annual guidance for the following metrics:
|
Financial Metric |
|
2026 Outlook |
|
Global system-wide restaurant sales |
|
Flat to Down Low Single-Digits |
|
|
|
Down (2)% to (4)% |
|
International comparable sales |
|
Up 2% to 4% |
|
|
|
40 to 50 |
|
International gross openings |
|
180 to 220 |
|
Adjusted EBITDA (as defined below) |
|
|
|
Adjusted Depreciation and amortization (as defined below) |
|
|
|
Interest expense (net) |
|
|
|
GAAP effective tax rate |
|
30% to 34% |
|
Capital expenditures |
|
|
|
Diluted shares outstanding |
|
Approximately 33 million |
Adjusted EBITDA represents Net income before Net interest expense, Income tax expense, Depreciation and amortization, Stock-based compensation expense, and other adjustments that vary from period to period in accordance with the Company’s Non-GAAP policy. The Company believes adjusted EBITDA is a meaningful measure as it is widely used by analysts and investors to value the Company and its restaurants on a consistent basis. Adjusted EBITDA is not a term defined by GAAP, and is not intended to be a substitute for operating income, net income, or cash flows from operating activities, as defined under generally accepted accounting principles. As a result, our measure of adjusted EBITDA might not be comparable to similarly titled measures used by other companies.
Adjusted depreciation and amortization represents depreciation and amortization expense excluding incremental depreciation expense related to the shortened useful life of legacy capitalized software assets due to the ongoing development and deployment of our new omnichannel platforms and other technology improvements.
This release includes forward-looking projections for certain non-GAAP financial measures, including adjusted EBITDA and adjusted depreciation and amortization. The Company excludes certain expenses and benefits from adjusted EBITDA and adjusted depreciation and amortization that, due to the uncertainty and variability of the nature and amount of those expenses and benefits, the Company is unable to, without unreasonable effort or expense, provide a reconciliation to Net income or GAAP depreciation and amortization of those projected measures, respectively.
Conference Call
About
Papa John’s
Forward-Looking Statements
Certain matters discussed in this press release and other Company communications that are not statements of historical fact constitute forward-looking statements within the meaning of the federal securities laws. Generally, the use of words such as “expect,” “intend,” “estimate,” “believe,” “anticipate,” “will,” “forecast,” “outlook”, “plan,” “project,” or similar words identify forward-looking statements that we intend to be included within the safe harbor protections provided by the federal securities laws. Such forward-looking statements include or may relate to projections or guidance concerning business performance, revenue, earnings, cash flow, earnings per share, share repurchases, depreciation and amortization, interest expenses, tax rates, system-wide sales, transformation plans, adjusted EBITDA, 4-wall EBITDA, the current economic environment, industry trends, consumer behavior and preferences, commodity and labor costs, currency fluctuations, profit margins, supply chain operating margin, net unit growth, unit level performance, capital expenditures, restaurant and franchise development, restaurant acquisitions, restaurant closures, labor shortages, labor cost increases, changes in management, inflation, royalty relief, franchisee support and incentives, the effectiveness of our menu innovations and other business initiatives, investments in product, investments in digital and technology innovation, marketing efforts and investments, liquidity, compliance with debt covenants, impairments, strategic decisions and actions, changes to our national marketing fund, changes to our commissary model, dividends, effective tax rates, regulatory changes and impacts, impacts of tariffs, insurance recoveries for damages related to natural disasters, adoption of new accounting standards, and other financial and operational measures. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements.
Our forward-looking statements are based on our assumptions which are based on currently available information. Actual outcomes and results may differ materially from those matters expressed or implied in our forward-looking statements as a result of various factors, including but not limited to risks related to: economic conditions in
These and other risk factors are discussed in detail in “Part I. Item 1A. — Risk Factors” for the fiscal year ended
For more information about the company, please visit www.papajohns.com.
Supplemental Information and Financial Statements
Definitions
“Comparable sales” represents sales for the same base of restaurants for the same fiscal periods. “Comparable sales growth (decline)” represents the change in year-over-year comparable sales. “Global system-wide restaurant sales” represents total restaurant sales for all Company-owned and franchised restaurants open during the comparable periods, and “Global system-wide restaurant sales growth (decline)” represents the change in global system-wide restaurant sales year-over-year. Comparable sales, Comparable sales growth (decline), Global system-wide restaurant sales and Global system-wide sales growth (decline) exclude franchisees for which we suspended corporate support.
We believe
Non-GAAP Financial Measures
In addition to the results provided in accordance with
The table that follows reconciles our GAAP financial results to our non-GAAP financial measures.
Reconciliation of GAAP Financial Results to Non-GAAP Financial Measures
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
In thousands, except per share amounts |
|
|
|
|
|
|
|
|
||||||||
|
Net income |
|
$ |
8,630 |
|
|
$ |
14,959 |
|
|
$ |
32,117 |
|
|
$ |
84,197 |
|
|
Income tax expense |
|
|
5,730 |
|
|
|
4,582 |
|
|
|
16,261 |
|
|
|
29,929 |
|
|
Net interest expense |
|
|
10,161 |
|
|
|
9,990 |
|
|
|
40,769 |
|
|
|
42,578 |
|
|
Depreciation and amortization |
|
|
30,169 |
|
|
|
16,879 |
|
|
|
92,245 |
|
|
|
69,407 |
|
|
Stock-based compensation expense |
|
|
2,848 |
|
|
|
3,687 |
|
|
|
14,980 |
|
|
|
9,590 |
|
|
Gain on refranchising transaction, net and sale of QC |
|
|
(17,566 |
) |
|
|
— |
|
|
|
(17,053 |
) |
|
|
(41,289 |
) |
|
Restructuring costs (b) |
|
|
8,918 |
|
|
|
7,759 |
|
|
|
13,780 |
|
|
|
27,363 |
|
|
Other costs (c) |
|
|
2,223 |
|
|
|
— |
|
|
|
8,012 |
|
|
|
5,495 |
|
|
Adjusted EBITDA |
|
$ |
51,113 |
|
|
$ |
57,856 |
|
|
$ |
201,111 |
|
|
$ |
227,270 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income attributable to common shareholders |
|
$ |
6,827 |
|
|
$ |
14,633 |
|
|
$ |
29,569 |
|
|
$ |
83,320 |
|
|
Gain on refranchising transaction, net and sale of QC |
|
|
(16,396 |
) |
|
|
— |
|
|
|
(16,028 |
) |
|
|
(41,289 |
) |
|
Restructuring costs (b) |
|
|
7,752 |
|
|
|
7,759 |
|
|
|
12,593 |
|
|
|
27,273 |
|
|
Accelerated software depreciation (d) |
|
|
12,289 |
|
|
|
— |
|
|
|
18,380 |
|
|
|
— |
|
|
Other costs (c) |
|
|
2,223 |
|
|
|
— |
|
|
|
8,012 |
|
|
|
5,495 |
|
|
Tax effect of adjustments (e) |
|
|
(1,446 |
) |
|
|
(1,745 |
) |
|
|
(5,326 |
) |
|
|
1,934 |
|
|
Adjusted net income attributable to common shareholders |
|
$ |
11,249 |
|
|
$ |
20,647 |
|
|
$ |
47,200 |
|
|
$ |
76,733 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Diluted earnings per common share |
|
$ |
0.21 |
|
|
$ |
0.44 |
|
|
$ |
0.90 |
|
|
$ |
2.54 |
|
|
Gain on refranchising transaction, net and QC |
|
|
(0.50 |
) |
|
|
— |
|
|
|
(0.49 |
) |
|
|
(1.25 |
) |
|
Restructuring costs (b) |
|
|
0.23 |
|
|
|
0.24 |
|
|
|
0.38 |
|
|
|
0.82 |
|
|
Accelerated software depreciation (d) |
|
|
0.37 |
|
|
|
— |
|
|
|
0.56 |
|
|
|
— |
|
|
Other costs (c) |
|
|
0.07 |
|
|
|
— |
|
|
|
0.24 |
|
|
|
0.17 |
|
|
Tax effect of adjustments (e) |
|
|
(0.04 |
) |
|
|
(0.05 |
) |
|
|
(0.16 |
) |
|
|
0.06 |
|
|
Adjusted diluted earnings per common share |
|
$ |
0.34 |
|
|
$ |
0.63 |
|
|
$ |
1.43 |
|
|
$ |
2.34 |
|
Footnotes to Non-GAAP Financial Measures
|
(a) |
For the three and twelve months ended |
|
|
(b) |
Represents costs associated with the Company’s Enterprise Transformation Plan and International Transformation Plan. Includes non-cash reversal related to the forfeiture of unvested stock-based compensation awards of |
|
|
(c) |
For the year ended |
|
|
|
i. |
Losses on disposal of equipment incurred in connection with the termination of a COVID-era program that pre-purchased store equipment due to supply chain challenges; |
|
|
ii. |
Costs associated with project-based strategic initiatives that are not related to our ongoing operations; and |
|
|
iii. |
Costs incurred, net of anticipated insurance recoveries, arising from tornadoes that damaged the Texas QC |
|
|
For the year ended |
|
|
(d) |
Represents incremental depreciation expense related to the shortened useful life of legacy capitalized software assets due to the ongoing development and deployment of our new omnichannel platforms and other technology improvements. |
|
|
(e) |
The tax effect on non-GAAP adjustments was calculated by applying the marginal tax rates of 23.2% for the three and twelve months ended |
|
|
Papa John’s Condensed Consolidated Balance Sheets
|
||||||||
|
In thousands, except per share amounts |
|
|
|
|
||||
|
Assets |
|
|
|
|
||||
|
Current assets: |
|
|
|
|
||||
|
Cash, cash equivalents, and restricted cash |
|
$ |
36,950 |
|
|
$ |
37,955 |
|
|
Accounts receivable (less allowance for credit losses of |
|
|
103,068 |
|
|
|
101,677 |
|
|
Notes receivable, current portion |
|
|
3,387 |
|
|
|
4,928 |
|
|
Income tax receivable |
|
|
6,189 |
|
|
|
2,214 |
|
|
Inventories |
|
|
34,336 |
|
|
|
35,245 |
|
|
Prepaid expenses and other current assets |
|
|
48,895 |
|
|
|
48,586 |
|
|
Assets held for sale |
|
|
4,607 |
|
|
|
— |
|
|
Total current assets |
|
|
237,432 |
|
|
|
230,605 |
|
|
Property and equipment, net |
|
|
251,312 |
|
|
|
273,272 |
|
|
Finance lease right-of-use assets, net |
|
|
39,039 |
|
|
|
28,761 |
|
|
Operating lease right-of-use assets |
|
|
161,606 |
|
|
|
184,425 |
|
|
Notes receivable, less current portion (less allowance for credit losses of |
|
|
3,262 |
|
|
|
8,867 |
|
|
|
|
|
67,576 |
|
|
|
75,460 |
|
|
Other assets |
|
|
77,281 |
|
|
|
87,562 |
|
|
Total assets |
|
$ |
837,508 |
|
|
$ |
888,952 |
|
|
|
|
|
|
|
||||
|
Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit |
|
|
|
|
||||
|
Current liabilities: |
|
|
|
|
||||
|
Accounts payable |
|
$ |
61,218 |
|
|
$ |
61,842 |
|
|
Income and other taxes payable |
|
|
8,941 |
|
|
|
11,987 |
|
|
Accrued expenses and other current liabilities |
|
|
169,015 |
|
|
|
155,579 |
|
|
Current deferred revenue |
|
|
13,096 |
|
|
|
15,519 |
|
|
Current finance lease liabilities |
|
|
9,999 |
|
|
|
7,280 |
|
|
Current operating lease liabilities |
|
|
23,725 |
|
|
|
25,756 |
|
|
Current portion of long-term debt |
|
|
4,997 |
|
|
|
— |
|
|
Total current liabilities |
|
|
290,991 |
|
|
|
277,963 |
|
|
Deferred revenue |
|
|
19,294 |
|
|
|
21,287 |
|
|
Long-term finance lease liabilities |
|
|
30,804 |
|
|
|
22,885 |
|
|
Long-term operating lease liabilities |
|
|
156,405 |
|
|
|
173,557 |
|
|
Long-term debt, net |
|
|
710,436 |
|
|
|
741,650 |
|
|
Other long-term liabilities |
|
|
62,264 |
|
|
|
64,923 |
|
|
Total liabilities |
|
|
1,270,194 |
|
|
|
1,302,265 |
|
|
|
|
|
|
|
||||
|
Redeemable noncontrolling interests |
|
|
980 |
|
|
|
903 |
|
|
|
|
|
|
|
||||
|
Stockholders’ deficit: |
|
|
|
|
||||
|
Common stock ( |
|
|
493 |
|
|
|
493 |
|
|
Additional paid-in capital |
|
|
457,112 |
|
|
|
452,449 |
|
|
Accumulated other comprehensive loss |
|
|
(6,452 |
) |
|
|
(8,456 |
) |
|
Retained earnings |
|
|
210,763 |
|
|
|
241,717 |
|
|
|
|
|
(1,106,666 |
) |
|
|
(1,115,729 |
) |
|
Total stockholders’ deficit |
|
|
(444,750 |
) |
|
|
(429,526 |
) |
|
Noncontrolling interests in subsidiaries |
|
|
11,084 |
|
|
|
15,310 |
|
|
Total Stockholders’ deficit |
|
|
(433,666 |
) |
|
|
(414,216 |
) |
|
Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit |
|
$ |
837,508 |
|
|
$ |
888,952 |
|
|
Papa John’s Condensed Consolidated Statements of Operations
|
||||||||||||||||
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
In thousands, except per share amounts |
|
|
|
|
|
|
|
|
||||||||
|
Revenues: |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
||||||||
|
Company-owned restaurant sales |
|
$ |
154,366 |
|
|
$ |
177,678 |
|
|
$ |
675,657 |
|
|
$ |
724,666 |
|
|
Franchise royalties and fees |
|
|
47,543 |
|
|
|
47,497 |
|
|
|
190,952 |
|
|
|
187,032 |
|
|
Commissary revenues |
|
|
236,846 |
|
|
|
238,841 |
|
|
|
929,944 |
|
|
|
899,664 |
|
|
Other revenues |
|
|
22,209 |
|
|
|
22,816 |
|
|
|
90,526 |
|
|
|
83,682 |
|
|
Advertising funds revenue |
|
|
37,215 |
|
|
|
43,938 |
|
|
|
166,729 |
|
|
|
164,343 |
|
|
Total revenues |
|
|
498,179 |
|
|
|
530,770 |
|
|
|
2,053,808 |
|
|
|
2,059,387 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
||||||||
|
Cost of sales |
|
|
353,150 |
|
|
|
377,643 |
|
|
|
1,460,492 |
|
|
|
1,478,426 |
|
|
General and administrative expenses |
|
|
52,519 |
|
|
|
62,709 |
|
|
|
244,282 |
|
|
|
190,515 |
|
|
Depreciation and amortization |
|
|
30,169 |
|
|
|
16,879 |
|
|
|
92,245 |
|
|
|
69,407 |
|
|
Advertising funds expense |
|
|
37,820 |
|
|
|
44,008 |
|
|
|
167,642 |
|
|
|
164,335 |
|
|
Total costs and expenses |
|
|
473,658 |
|
|
|
501,239 |
|
|
|
1,964,661 |
|
|
|
1,902,683 |
|
|
Operating income |
|
|
24,521 |
|
|
|
29,531 |
|
|
|
89,147 |
|
|
|
156,704 |
|
|
Net interest expense |
|
|
(10,161 |
) |
|
|
(9,990 |
) |
|
|
(40,769 |
) |
|
|
(42,578 |
) |
|
Income before income taxes |
|
|
14,360 |
|
|
|
19,541 |
|
|
|
48,378 |
|
|
|
114,126 |
|
|
Income tax expense (a) |
|
|
(5,730 |
) |
|
|
(4,582 |
) |
|
|
(16,261 |
) |
|
|
(29,929 |
) |
|
Net income |
|
|
8,630 |
|
|
|
14,959 |
|
|
|
32,117 |
|
|
|
84,197 |
|
|
Net income attributable to noncontrolling interests |
|
|
(1,559 |
) |
|
|
(160 |
) |
|
|
(1,586 |
) |
|
|
(711 |
) |
|
Net income attributable to the Company |
|
$ |
7,071 |
|
|
$ |
14,799 |
|
|
$ |
30,531 |
|
|
$ |
83,486 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income attributable to common shareholders |
|
$ |
6,827 |
|
|
$ |
14,633 |
|
|
$ |
29,569 |
|
|
$ |
83,320 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Basic earnings per common share |
|
$ |
0.21 |
|
|
$ |
0.45 |
|
|
$ |
0.90 |
|
|
$ |
2.55 |
|
|
Diluted earnings per common share |
|
$ |
0.21 |
|
|
$ |
0.44 |
|
|
$ |
0.90 |
|
|
$ |
2.54 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Basic weighted average common shares outstanding |
|
|
32,908 |
|
|
|
32,759 |
|
|
|
32,851 |
|
|
|
32,717 |
|
|
Diluted weighted average common shares outstanding |
|
|
33,034 |
|
|
|
32,957 |
|
|
|
32,945 |
|
|
|
32,819 |
|
|
___________________________________ |
|
|
(a) |
The signage of Income tax expense has been changed from the historic presentation for purposes of signage consistency with other expense items. |
|
Papa John’s Condensed Consolidated Statements of Cash Flows
|
||||||||
|
|
|
Year Ended |
||||||
|
In thousands |
|
|
|
|
||||
|
Operating activities |
|
|
|
|
||||
|
Net income |
|
$ |
32,117 |
|
|
$ |
84,197 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
|
Provision for allowance for credit losses on accounts and notes receivable |
|
|
8,396 |
|
|
|
2,737 |
|
|
Depreciation and amortization |
|
|
92,245 |
|
|
|
69,407 |
|
|
Refranchising (gain)/loss and impairment loss |
|
|
(15,768 |
) |
|
|
18,340 |
|
|
Deferred income taxes |
|
|
6,739 |
|
|
|
(3,037 |
) |
|
Stock-based compensation expense |
|
|
14,980 |
|
|
|
9,590 |
|
|
Loss/(gain) on disposal of property and equipment |
|
|
2,800 |
|
|
|
(41,953 |
) |
|
Other |
|
|
1,407 |
|
|
|
1,711 |
|
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
||||
|
Accounts receivable |
|
|
(7,562 |
) |
|
|
(465 |
) |
|
Income tax receivable |
|
|
(3,908 |
) |
|
|
345 |
|
|
Inventories |
|
|
17 |
|
|
|
851 |
|
|
Prepaid expenses and other current assets |
|
|
816 |
|
|
|
319 |
|
|
Other assets and liabilities |
|
|
(8,269 |
) |
|
|
(8,774 |
) |
|
Accounts payable |
|
|
(620 |
) |
|
|
(10,043 |
) |
|
Income and other taxes payable |
|
|
(3,098 |
) |
|
|
(5,678 |
) |
|
Accrued expenses and other current liabilities |
|
|
6,960 |
|
|
|
(2,035 |
) |
|
Deferred revenue |
|
|
(3,635 |
) |
|
|
(6,245 |
) |
|
Advertising fund assets and liabilities |
|
|
2,383 |
|
|
|
(2,635 |
) |
|
Net cash provided by operating activities |
|
|
126,000 |
|
|
|
106,632 |
|
|
Investing activities |
|
|
|
|
||||
|
Purchases of property and equipment |
|
|
(64,695 |
) |
|
|
(72,484 |
) |
|
Purchases of property and equipment related to damages from natural disasters |
|
|
(9,740 |
) |
|
|
— |
|
|
Insurance proceeds related to damages from natural disasters |
|
|
6,300 |
|
|
|
— |
|
|
Notes issued |
|
|
— |
|
|
|
(154 |
) |
|
Repayments of notes issued |
|
|
6,447 |
|
|
|
4,152 |
|
|
Acquisitions, net of cash acquired |
|
|
— |
|
|
|
(125 |
) |
|
Proceeds from dispositions and refranchising, net of cash transferred |
|
|
34,500 |
|
|
|
49,016 |
|
|
Proceeds from investments |
|
|
4,739 |
|
|
|
2,275 |
|
|
Proceeds from the sale of property and equipment |
|
|
963 |
|
|
|
— |
|
|
Other |
|
|
— |
|
|
|
(28 |
) |
|
Net cash used in investing activities |
|
|
(21,486 |
) |
|
|
(17,348 |
) |
|
Financing activities |
|
|
|
|
||||
|
Net (repayments) proceeds from revolving credit facilities |
|
|
(224,471 |
) |
|
|
(17,268 |
) |
|
Proceeds from term loan |
|
|
200,000 |
|
|
|
— |
|
|
Debt issuance costs |
|
|
(3,223 |
) |
|
|
— |
|
|
Proceeds from exercise of stock options |
|
|
414 |
|
|
|
1,055 |
|
|
Acquisition of Company common stock (including excise tax payment) |
|
|
— |
|
|
|
(2,080 |
) |
|
Dividends paid to common stockholders |
|
|
(61,141 |
) |
|
|
(60,559 |
) |
|
Tax payments for equity award issuances |
|
|
(2,003 |
) |
|
|
(3,619 |
) |
|
Distributions to noncontrolling interests |
|
|
(5,735 |
) |
|
|
(825 |
) |
|
Principal payments on finance leases |
|
|
(10,079 |
) |
|
|
(8,529 |
) |
|
Other |
|
|
(19 |
) |
|
|
153 |
|
|
Net cash used in financing activities |
|
|
(106,257 |
) |
|
|
(91,672 |
) |
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
738 |
|
|
|
(244 |
) |
|
Change in cash, cash equivalents, and restricted cash |
|
|
(1,005 |
) |
|
|
(2,632 |
) |
|
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
37,955 |
|
|
|
40,587 |
|
|
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
36,950 |
|
|
$ |
37,955 |
|
Papa John’s
Segment Information
The following tables present the operating results of our segments. We have four reportable segments:
|
|
|
Three Months Ended |
||||||||||||||
|
In thousands, unaudited |
|
|
|
North America Franchising |
|
North America Commissaries |
|
International |
||||||||
|
Revenues from external customers |
|
$ |
150,737 |
|
$ |
34,301 |
|
$ |
217,020 |
|
$ |
45,820 |
||||
|
Intersegment revenues |
|
|
— |
|
|
|
806 |
|
|
|
49,544 |
|
|
|
— |
|
|
Segment revenue |
|
$ |
150,737 |
|
|
$ |
35,107 |
|
|
$ |
266,564 |
|
|
$ |
45,820 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Less segment expenses (a): |
|
|
|
|
|
|
|
|
||||||||
|
Cost of sales |
|
$ |
131,532 |
|
|
$ |
— |
|
|
$ |
237,562 |
|
|
$ |
22,595 |
|
|
General and administrative expenses |
|
|
9,672 |
|
|
|
9,339 |
|
|
|
8,388 |
|
|
|
11,356 |
|
|
Advertising funds expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,608 |
|
|
Segment adjusted EBITDA |
|
$ |
9,533 |
|
|
$ |
25,768 |
|
|
$ |
20,614 |
|
|
$ |
6,261 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Three Months Ended |
||||||||||||||
|
In thousands, unaudited |
|
|
|
North America Franchising |
|
North America Commissaries |
|
International |
||||||||
|
Revenues from external customers |
|
$ |
174,633 |
|
|
$ |
35,154 |
|
|
$ |
219,901 |
|
|
$ |
41,733 |
|
|
Intersegment revenues |
|
|
— |
|
|
|
1,049 |
|
|
|
53,602 |
|
|
|
— |
|
|
Segment revenue |
|
$ |
174,633 |
|
|
$ |
36,203 |
|
|
$ |
273,503 |
|
|
$ |
41,733 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Less segment expenses (a): |
|
|
|
|
|
|
|
|
||||||||
|
Cost of sales |
|
$ |
154,177 |
|
|
$ |
— |
|
|
$ |
246,888 |
|
|
$ |
21,255 |
|
|
General and administrative expenses |
|
|
9,563 |
|
|
|
8,366 |
|
|
|
9,768 |
|
|
|
9,725 |
|
|
Advertising funds expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,416 |
|
|
Segment adjusted EBITDA |
|
$ |
10,893 |
|
|
$ |
27,837 |
|
|
$ |
16,847 |
|
|
$ |
6,337 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Year Ended |
||||||||||||||
|
In thousands, unaudited |
|
|
|
North America Franchising |
|
North America Commissaries |
|
International |
||||||||
|
Revenues from external customers |
|
$ |
662,523 |
|
|
$ |
139,009 |
|
|
$ |
854,188 |
|
|
$ |
173,836 |
|
|
Intersegment revenues |
|
|
— |
|
|
|
4,470 |
|
|
|
203,900 |
|
|
|
— |
|
|
Segment revenue |
|
$ |
662,523 |
|
|
$ |
143,479 |
|
|
$ |
1,058,088 |
|
|
$ |
173,836 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Less segment expenses (a): |
|
|
|
|
|
|
|
|
||||||||
|
Cost of sales |
|
$ |
593,447 |
|
|
$ |
— |
|
|
$ |
944,736 |
|
|
$ |
90,829 |
|
|
General and administrative expenses |
|
|
40,705 |
|
|
|
38,115 |
|
|
|
34,533 |
|
|
|
40,339 |
|
|
Advertising funds expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,087 |
|
|
Segment adjusted EBITDA |
|
$ |
28,371 |
|
|
$ |
105,364 |
|
|
$ |
78,819 |
|
|
$ |
22,581 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Year Ended |
||||||||||||||
|
In thousands, unaudited |
|
|
|
North America Franchising |
|
North America Commissaries |
|
International |
||||||||
|
Revenues from external customers |
|
$ |
692,736 |
|
|
$ |
139,091 |
|
|
$ |
831,774 |
|
|
$ |
174,054 |
|
|
Intersegment revenues |
|
|
— |
|
|
|
4,150 |
|
|
|
205,234 |
|
|
|
— |
|
|
Segment revenue |
|
$ |
692,736 |
|
|
$ |
143,241 |
|
|
$ |
1,037,008 |
|
|
$ |
174,054 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Less segment expenses (a): |
|
|
|
|
|
|
|
|
||||||||
|
Cost of sales |
|
$ |
610,629 |
|
|
$ |
— |
|
|
$ |
934,981 |
|
|
$ |
104,138 |
|
|
General and administrative expenses |
|
|
38,448 |
|
|
|
33,028 |
|
|
|
36,278 |
|
|
|
37,984 |
|
|
Advertising funds expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
13,635 |
|
|
Segment adjusted EBITDA |
|
$ |
43,659 |
|
|
$ |
110,213 |
|
|
$ |
65,749 |
|
|
$ |
18,297 |
|
|
________________________________________ |
|
|
(a) |
Segment expenses excludes depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. |
|
Papa John’s Supplemental Information - All Other
|
||||||||||||||||
|
In thousands, unaudited |
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
All Other (a) |
|
|
|
|
|
|
|
|
||||||||
|
Revenues from external customers |
|
$ |
50,301 |
|
$ |
59,347 |
|
$ |
224,252 |
|
$ |
221,733 |
||||
|
Intersegment revenues |
|
|
19,136 |
|
|
|
17,230 |
|
|
|
62,143 |
|
|
|
57,652 |
|
|
All Other revenue |
|
$ |
69,437 |
|
|
$ |
76,577 |
|
|
$ |
286,395 |
|
|
$ |
279,385 |
|
|
All Other costs and expenses (b) |
|
|
|
|
|
|
|
|
||||||||
|
Cost of sales |
|
$ |
15,863 |
|
|
$ |
13,843 |
|
|
$ |
55,972 |
|
|
$ |
51,347 |
|
|
General and administrative expenses |
|
|
3,492 |
|
|
|
2,049 |
|
|
|
11,359 |
|
|
|
7,614 |
|
|
Advertising funds expense |
|
|
46,965 |
|
|
|
52,439 |
|
|
|
192,052 |
|
|
|
192,624 |
|
|
All Other costs and expenses (a) |
|
$ |
66,320 |
|
|
$ |
68,331 |
|
|
$ |
259,383 |
|
|
$ |
251,585 |
|
|
All Other adjusted EBITDA (c) |
|
$ |
3,117 |
|
|
$ |
8,246 |
|
|
$ |
27,012 |
|
|
$ |
27,800 |
|
|
___________________________________ |
|
|
(a) |
All other business units that do not meet the quantitative or qualitative thresholds for determining reporting segments, which are not operating segments, we refer to as “All Other.” These consist of operations that derive revenues from franchise contributions to marketing funds as well as information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms. Our largest marketing fund is |
|
(b) |
All Other costs and expenses excludes depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. |
|
(c) |
See the Company’s Annual Report on Form 10-K for the year ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20260226872135/en/
Papa Johns Investor Relations
investor_relations@papajohns.com
Source: Papa John’s
