Papa Johns Announces Completion of Amended Credit Facilities, Further Strengthening Financial Foundation to Support Execution of Strategic Objectives

Rhea-AI Summary

Papa Johns International (NASDAQ: PZZA) has completed an amended credit agreement that strengthens its financial position. The company has successfully:

- Extended its existing $600 million revolving credit facility through 2030
- Secured a new $200 million senior secured term loan maturing in 2030

The transaction is leverage neutral and provides additional borrowing capacity while extending the company's maturity profile. The proceeds from the term loan will be used to pay down existing revolving credit facility borrowings. This financial restructuring supports Papa Johns' strategic priorities, including:

• Focusing on core product and premium innovation
• Winning customers through quality and value
• Investing in technology for seamless customer experience
• Enhancing digital experience
• Accelerating domestic development
• Transforming international operations

Positive

• Secured $200M additional liquidity through new term loan
• Extended $600M credit facility maturity to 2030
• Transaction is leverage neutral
• Increased financial flexibility for strategic investments

Negative

• Increased debt exposure through new $200M term loan
• Additional interest expenses from new credit facilities

Insights

Financial Analyst

Papa Johns' completion of amended credit facilities represents a strategic financial optimization that strengthens the company's balance sheet without adding leverage. The transaction includes a 5-year extension of their $600 million revolving credit facility through 2030 and a new $200 million senior secured term loan also maturing in 2030.

The refinancing achieves three key financial objectives: (1) extends debt maturity profile, reducing near-term refinancing risk; (2) increases available liquidity by freeing up revolving capacity after using term loan proceeds to pay down revolver borrowings; and (3) maintains leverage neutrality while enhancing financial flexibility.

This transaction is particularly well-timed as it secures longer-term capital commitments while providing additional financial resources to execute on their transformation strategy. The company's ability to secure these facilities signals lender confidence in their credit profile and strategic direction despite recent challenges in the restaurant sector.

What's notable is that this refinancing focuses on balance sheet optimization rather than taking on additional debt – a prudent approach that preserves financial health while creating funding runway for their six strategic priorities. This positions Papa Johns to make necessary investments in product innovation, technology, and development initiatives without stretching their financial resources too thin.

Renews Existing $600 Million Revolving Credit Facility through 2030

Secures Additional $200 Million Senior Secured Term Loan

LOUISVILLE, Ky.--(BUSINESS WIRE)-- Papa Johns International, Inc. (Nasdaq: PZZA) (“Papa Johns^®”) (the “Company”) today announced that it has completed the closing of an amended credit agreement in a transaction that provides the Company with additional liquidity and strengthens its overall financial profile. With this agreement, the Company is well positioned to continue executing on its strategic priorities aimed at improving sales, identifying opportunities to ensure the restaurant economic model is strong, and driving profitable growth throughout the system.

The Company amended and restated its existing credit agreement (the “Amended Credit Agreement”) with its lenders and other agents party thereto. Pursuant to the Amended Credit Agreement, the maturity of the Company’s existing $600 million revolving credit facility has been extended for a new five-year term through 2030. The Amended Credit Agreement also provides the Company with a new $200 million senior secured term loan (the “Term Loan”) maturing in 2030. Proceeds from the Term Loan will be used to pay down existing borrowings under the revolving credit facility, which prior to closing, is similar to the Company’s year-end balance. This transaction is leverage neutral, while providing additional borrowing capacity under the revolver and extending the Company’s maturity profile.

“We’re pleased to have reached an agreement that provides us with additional financial strength and flexibility to execute on the important strategic priorities we outlined last year,” said Todd Penegor, President and Chief Executive Officer. “Papa Johns has established a strong foundation for success, including team members and franchisees who are passionate about creating great experiences for our customers. This agreement builds on the early progress we are seeing with our transformation strategy, and supports our continued investment in high-return opportunities that will better position us to deliver on our promise to be the best pizza makers in the business.”

“We appreciate the support that we’ve received from our banking partners, which reflects their confidence in our strong credit profile and balance sheet,” said Ravi Thanawala, Chief Financial Officer and EVP, International. “The successful refinancing of our revolver and new term loan provide Papa Johns with cost-effective capital that extends our credit facilities and debt maturity profile, bolsters our liquidity and gives us greater flexibility to deliver long-term value to our shareholders.”

Over the last several months, Papa Johns has taken meaningful steps to transform and realign the organization to drive improved sales and profitable growth across the Company’s restaurant system, including by:

• Focusing on our core product and premium innovation;
• Winning customers with a focus on quality and value;
• Investing in technology to create a seamless customer experience;
• Differentiating and enhancing the customer’s digital experience;
• Accelerating Domestic development by evolving the franchisee base; and
• Transforming International with a narrow and deep focus on the most impactful markets.

Additional details regarding the Amended Credit Agreement are available in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission.

About Papa Johns

Papa Johns International, Inc. (Nasdaq: PZZA) opened its doors in 1984 with one goal in mind: BETTER INGREDIENTS. BETTER PIZZA.^® Papa Johns believes that using high-quality ingredients leads to superior quality pizzas. Its original dough is made of only six ingredients and is fresh, never frozen. Papa Johns tops its pizzas with real cheese made from mozzarella, pizza sauce made with vine-ripened tomatoes that go from vine to can in the same day and meat free of fillers. It was the first national pizza delivery chain to announce the removal of artificial flavors and synthetic colors from its entire food menu. Papa Johns is co-headquartered in Atlanta, Ga. and Louisville, Ky. and is the world’s third-largest pizza delivery company with more than 6,000 restaurants in 51 countries and territories. For more information about the Company or to order pizza online, visit www.papajohns.com or download the Papa Johns mobile app for iOS or Android.

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 business and operational performance, profit margins, net unit growth, unit level performance, capital expenditures, restaurant and franchise development, franchisee relations, International business initiatives, executive leadership changes, the effectiveness of our transformation strategy and other business initiatives, investments in technology and other opportunities, marketing efforts and investments, liquidity, compliance with debt covenants, and the results of our strategic decisions and actions. 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 the risks, uncertainties and assumptions discussed in detail in “Part I. Item 1A. – Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250327277931/en/

Media Contact:

Janelle Panebianco

Senior Director, External Communications

Papa Johns International

Janelle_Panebianco@papajohns.com

Investor Contact:

Sarah Burnett

Director, Investor Relations

Papa Johns International

investor_relations@papajohns.com

Source: Papa Johns International, Inc.

FAQ

What are the terms of Papa Johns (PZZA) new credit facilities agreement?

Papa Johns extended its $600M revolving credit facility through 2030 and secured a new $200M senior secured term loan maturing in 2030.

How will Papa Johns (PZZA) use the proceeds from the new term loan?

The proceeds from the $200M term loan will be used to pay down existing borrowings under the revolving credit facility.

What strategic priorities will PZZA's new credit agreement support?

The agreement supports core product innovation, customer experience enhancement, technology investment, domestic development, and international market transformation.

How does the new credit agreement impact Papa Johns (PZZA) financial position?

The transaction is leverage neutral while providing additional borrowing capacity and extending the company's maturity profile through 2030.