Papa Johns Announces Fourth Quarter and Full Year 2024 Financial Results
Fourth Quarter Highlights
-
North America comparable sales(a) were down4% from a year ago as Domestic Company-owned restaurants were down6% andNorth America franchised restaurants were down4% ; International comparable sales(a) were up2% compared with the prior year period. -
122 net restaurant openings in the fourth quarter, driven by 63 gross openings in
North America and 83 gross openings in International markets. -
Global system-wide restaurant sales were
$1.23 billion 8% (b) decrease from a year ago due to the additional week of operations in the fourth quarter of 2023. Excluding the additional week, global system-wide sales were flat(b) from the prior year period. -
Total revenues of
$531 million 7% compared with the fourth quarter of 2023. Excluding the 53rd week in 2023, Total revenues were roughly flat from the prior year period. -
Diluted earnings per common share of
$0.44 $0.79 $0.63 $0.91
Full Year Highlights
-
North America comparable sales(d) were down4% from 2023 as Domestic Company-owned restaurants were down5% andNorth America franchised restaurants were down4% ; International comparable sales(d) were down1% . -
124 net restaurant openings for the full year 2024, driven by 112 gross openings in
North America and 198 gross openings in International markets. -
Global system-wide restaurant sales were
$4.85 billion 3% (b) decrease over the prior year. Excluding the 53rd week in 2023, global system-wide sales were down approximately1% (b). -
Total revenues of
$2.06 billion $76 million 4% , from 2023. Excluding the 53rd week in 2023, Total revenues were down2% . -
Diluted earnings per common share of
$2.54 $2.48 $2.34 $2.71
(a) |
Comparable sales growth (decline) for the fourth quarter of 2024 is reported on a 13-week basis comparing September 30, 2024 through December 29, 2024 with October 2, 2023 through December 31, 2023. |
(b) |
Excludes the impact of foreign currency. |
(c) |
Represents a Non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation to the most comparable US GAAP measures. |
(d) |
Comparable sales growth (decline) for the fiscal year 2024 is reported on a 52-week basis comparing January 1, 2024 through December 29, 2024 with January 2, 2023 through December 31, 2023. |
CEO Commentary
“I am pleased with the early progress we are seeing in our transformation as we work to improve our value perception, simplify our operations, and enhance our digital and loyalty experiences. These efforts helped to deliver results consistent with our fourth quarter expectations,” said Todd Penegor, president and CEO.
“We have defined our strategic priorities to take market share as we move forward with urgency to execute on initiatives to drive sales momentum in the near-term while meaningfully increasing profitability over time,” continued Penegor. “Our number one priority continues to be creating great experiences for our customers and team members in our restaurants – ensuring the restaurant economic model remains strong. We are confident that we have the right plan in place to deliver on our promise to be the best pizza makers in the business.”
Financial Highlights
Beginning with the year ended December 29, 2024, the Company implemented changes to the presentation and classification of its financial statements concurrent with the adoption of Accounting Standard Update 2023-07, “Improvements to Reportable Segment Disclosures”. Please refer to the Supplemental Information and Financial Statements section in this release for additional information.
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||||
(In thousands, except per share amounts) |
|
December 29,
|
|
December 31,
|
|
Increase
|
|
December 29,
|
|
December 31,
|
|
Increase
|
||||||||
Total revenues |
|
$ |
530,770 |
|
$ |
571,322 |
|
$ |
(40,552 |
) |
|
$ |
2,059,387 |
|
$ |
2,135,713 |
|
$ |
(76,326 |
) |
Operating income |
|
$ |
29,531 |
|
$ |
42,566 |
|
$ |
(13,035 |
) |
|
$ |
156,704 |
|
$ |
147,142 |
|
$ |
9,562 |
|
Adjusted operating income (c) |
|
$ |
37,290 |
|
$ |
47,354 |
|
$ |
(10,064 |
) |
|
$ |
148,183 |
|
$ |
157,025 |
|
$ |
(8,842 |
) |
Net income attributable to the Company |
|
$ |
14,799 |
|
$ |
26,093 |
|
$ |
(11,294 |
) |
|
$ |
83,486 |
|
$ |
82,098 |
|
$ |
1,388 |
|
Diluted earnings per common share |
|
$ |
0.44 |
|
$ |
0.79 |
|
$ |
(0.35 |
) |
|
$ |
2.54 |
|
$ |
2.48 |
|
$ |
0.06 |
|
Adjusted diluted earnings per common share (c) |
|
$ |
0.63 |
|
$ |
0.91 |
|
$ |
(0.28 |
) |
|
$ |
2.34 |
|
$ |
2.71 |
|
$ |
(0.37 |
) |
Results for the fourth quarter and fiscal year 2024 are not directly comparable with the fourth quarter and fiscal year 2023, as year-over-year comparisons are affected by an additional week of operations in the fourth quarter of 2023. For comparability purposes we describe the estimated impact of the 53rd week in the discussion below.
Additionally, the acquisition of 118 formerly franchised restaurants in the
Fourth Quarter 2024 Results
Revenue: Total revenues of
Offsetting the decline in Company-owned restaurant revenues on a comparable week basis was a
System-wide sales: For the fourth quarter of 2024, Global system-wide restaurant sales were
Operating Income: Fourth quarter 2024 Operating income was
Adjusted operating income(c) was
The decrease in Adjusted operating income(c) in the fourth quarter of 2024 compared with the prior year period was primarily due to the same factors impacting Operating income discussed above.
Earnings per share: Diluted earnings per common share was
Full Year 2024 Results
Revenue: Total revenues of
System-wide sales: For 2024, global system-wide restaurant sales were
Operating income: Operating income of
Adjusted operating income(c) was
The decrease in Adjusted operating income(c) for 2024 compared with the prior year was primarily driven by the approximately
Earnings per share: Diluted earnings per common share was
(a) |
Comparable sales growth (decline) for the fourth quarter of 2024 is reported on a 13-week basis comparing September 30, 2024 through December 29, 2024 with October 2, 2023 through December 31, 2023. |
(b) |
Excludes the impact of foreign currency. |
(c) |
Represents a Non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation to the most comparable US GAAP measures. |
(d) |
Comparable sales growth (decline) for the fiscal year 2024 is reported on a 52-week basis comparing January 1, 2024 through December 29, 2024 with January 2, 2023 through December 31, 2023. |
(e) |
Properties were subsequently leased back by the Company. See “Note 22. Divestitures” in the Company’s Annual Report on Form 10-K for the year ended December 29, 2024. |
2025 Outlook
The Company is introducing 2025 annual guidance around the following metrics:
-
System-wide sales:
2% to5% -
North America comparable sales: Flat to up2% -
International comparable sales: Flat to up
2% -
Restaurant development:
-
North America : 85 to 115 gross openings - International: 180 to 200 gross openings
-
-
Adjusted EBITDA:
$200 million $220 million -
Depreciation & amortization:
$70 million $75 million -
Interest expense:
$40 million $45 million -
Capital expenditures:
$75 million $85 million -
Tax rate:
28% to32%
This release includes forward-looking projections for certain non-GAAP financial measures, including Adjusted EBITDA (See “Definitions”). The Company excludes certain expenses and benefits from Adjusted EBITDA 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 of those projected measures.
See 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 SEC for additional information concerning our operating results for the year ended December 29, 2024.
Global Restaurant Sales Information
Global restaurant and comparable sales information for the year ended December 29, 2024, compared with the year ended December 31, 2023 are as follows (See “Supplemental Information and Financial Statements” below for related definitions):
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||
Amounts below exclude the impact of foreign currency |
|
December 29,
|
|
December 31,
|
|
December 29,
|
|
December 31,
|
||||
Comparable sales growth (decline) (a, d): |
|
|
|
|
|
|
|
|
||||
Domestic Company-owned restaurants |
|
(5.7 |
)% |
|
2.2 |
% |
|
(4.9 |
)% |
|
3.4 |
% |
|
|
(4.0 |
)% |
|
1.7 |
% |
|
(3.5 |
)% |
|
0.1 |
% |
|
|
(4.4 |
)% |
|
1.8 |
% |
|
(3.8 |
)% |
|
0.8 |
% |
International restaurants |
|
2.1 |
% |
|
(5.5 |
)% |
|
(0.8 |
)% |
|
(3.1 |
)% |
Total comparable sales growth (decline) |
|
(2.8 |
)% |
|
0.1 |
% |
|
(3.1 |
)% |
|
(0.1 |
)% |
System-wide restaurant sales growth (decline) (f): |
|
|
|
|
|
|
|
|
||||
Domestic Company-owned restaurants |
|
(9.9 |
)% |
|
12.4 |
% |
|
(4.7 |
)% |
|
6.7 |
% |
|
|
(8.7 |
)% |
|
10.9 |
% |
|
(4.1 |
)% |
|
3.6 |
% |
|
|
(8.9 |
)% |
|
11.2 |
% |
|
(4.2 |
)% |
|
4.1 |
% |
International restaurants |
|
(4.7 |
)% |
|
10.5 |
% |
|
0.4 |
% |
|
7.7 |
% |
Total global system-wide restaurant sales growth (decline) |
|
(7.9 |
)% |
|
11.0 |
% |
|
(3.1 |
)% |
|
5.0 |
% |
(a) |
Comparable sales growth (decline) for the fourth quarter of 2024 is reported on a 13-week basis comparing September 30, 2024 through December 29, 2024 with October 2, 2023 through December 31, 2023. |
(d) |
Comparable sales growth (decline) for the fiscal year 2024 is reported on a 52-week basis comparing January 1, 2024 through December 29, 2024 with January 2, 2023 through December 31, 2023. |
(f) |
System-wide restaurant sales growth includes 14 weeks in the fourth quarter of 2023 and 53 weeks in fiscal year 2023. |
Global Restaurants
As of December 29, 2024, there were 6,030 Papa Johns restaurants operating in 51 countries and territories, as follows:
Fourth Quarter |
Domestic
|
|
Franchised
|
|
Total
|
|
International
|
|
International
|
|
Total
|
|
System-
|
||||||
Beginning - September 29, 2024 |
537 |
|
|
2,917 |
|
|
3,454 |
|
|
13 |
|
2,441 |
|
|
2,454 |
|
|
5,908 |
|
Opened |
16 |
|
|
47 |
|
|
63 |
|
|
— |
|
83 |
|
|
83 |
|
|
146 |
|
Closed |
— |
|
|
(3 |
) |
|
(3 |
) |
|
— |
|
(21 |
) |
|
(21 |
) |
|
(24 |
) |
Sold |
— |
|
|
(1 |
) |
|
(1 |
) |
|
— |
|
— |
|
|
— |
|
|
(1 |
) |
Acquired |
1 |
|
|
— |
|
|
1 |
|
|
— |
|
— |
|
|
— |
|
|
1 |
|
Refranchised |
(15 |
) |
|
15 |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
Ending - December 29, 2024 |
539 |
|
|
2,975 |
|
|
3,514 |
|
|
13 |
|
2,503 |
|
|
2,516 |
|
|
6,030 |
|
Net restaurant growth/(decline) |
2 |
|
|
58 |
|
|
60 |
|
|
— |
|
62 |
|
|
62 |
|
|
122 |
|
Full year |
|
Domestic
|
|
Franchised
|
|
Total
|
|
International
|
|
International
|
|
Total
|
|
System-
|
|||||||
Beginning December 31, 2023 |
|
531 |
|
|
2,902 |
|
|
3,433 |
|
|
117 |
|
|
2,356 |
|
|
2,473 |
|
|
5,906 |
|
Opened |
|
22 |
|
|
90 |
|
|
112 |
|
|
— |
|
|
198 |
|
|
198 |
|
|
310 |
|
Closed |
|
— |
|
|
(31 |
) |
|
(31 |
) |
|
(43 |
) |
|
(112 |
) |
|
(155 |
) |
|
(186 |
) |
Sold |
|
— |
|
|
(1 |
) |
|
(1 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(1 |
) |
Acquired |
|
1 |
|
|
— |
|
|
1 |
|
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
Refranchised |
|
(15 |
) |
|
15 |
|
|
— |
|
|
(61 |
) |
|
61 |
|
|
— |
|
|
— |
|
December 29, 2024 |
|
539 |
|
2,975 |
|
|
3,514 |
|
|
13 |
|
|
2,503 |
|
|
2,516 |
|
|
6,030 |
|
|
Net unit growth/(decline) |
|
8 |
|
|
73 |
|
|
81 |
|
|
(104 |
) |
|
147 |
|
|
43 |
|
|
124 |
|
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
|
|
Year Ended |
||||||
(in thousands) |
|
December 29,
|
|
December 31,
|
||||
Net cash provided by operating activities |
|
$ |
106,632 |
|
|
$ |
193,055 |
|
Purchases of property and equipment |
|
|
(72,484 |
) |
|
|
(76,620 |
) |
Free cash flow |
|
$ |
34,148 |
|
|
$ |
116,435 |
|
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
Conference Call
Papa Johns will host a call with analysts today, February 27, 2025, at 8:00 a.m. Eastern Time. To access the conference call or webcast, please register online at: ir.papajohns.com/events-presentations. A replay of the webcast will be available two hours after the call and archived on the same web page.
About Papa Johns
Papa John’s 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
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 expense, tax rates, system-wide sales, Adjusted EBITDA, the current economic environment, 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, inflation, royalty relief, franchisee support and incentives, the effectiveness of our menu innovations and other business initiatives, investments in product and digital innovation, marketing efforts and investments, liquidity, compliance with debt covenants, impairments, strategic decisions and actions, dividends, effective tax rates, regulatory changes and impacts, repositioning of the
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: deteriorating economic conditions in
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 Domestic Company-owned,
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.
Financial Statement Updates
The Company has implemented several financial statement changes concurrent with the adoption of Accounting Standard Update 2023-07, “Improvements to Reportable Segment Disclosures.” These changes evolve and modernize our financial statements and footnotes to increase transparency and better reflect management’s key performance metrics.
The Consolidated Statements of Operations have been reconfigured to classify revenues and expenses based on the nature of the underlying activities without regard to operating segment. This reconfiguration and the resulting reclassifications did not change previously reported Total revenues, Total costs and expenses, Operating income or Net income for any period. The Consolidated Statements of Cash Flows include reclassifications to a new line item that include the net operating cash flows of the consolidated advertising funds. The reclassifications did not change Net cash provided by operating activities, Net cash used in investing activities or Net cash used in financing activities for any period. Presentation changes to the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows have been applied retrospectively, and as such, the results from the year ended December 31, 2023 have been reclassified for consistency with the current year presentation.
Additionally, during the year ended December 29, 2024, the Company updated its internal cost allocation methodology to better reflect current levels of time and effort spent managing our different segments. These updates resulted in a higher allocation of previously unallocated corporate expenses to primarily the
Non-GAAP Financial Measures
In addition to the results provided in accordance with
Reconciliation of GAAP Financial Results to Non-GAAP Financial Measures
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
(In thousands, except per share amounts) |
|
December 29,
|
|
December 31,
|
|
December 29,
|
|
December 31,
|
||||||||
Operating income |
|
$ |
29,531 |
|
|
$ |
42,566 |
|
|
$ |
156,704 |
|
|
$ |
147,142 |
|
Gain on sale of QC Center properties (a) |
|
|
— |
|
|
|
— |
|
|
|
(41,289 |
) |
|
|
— |
|
International restructuring costs (b) |
|
|
7,759 |
|
|
|
2,178 |
|
|
|
27,273 |
|
|
|
2,178 |
|
|
|
|
— |
|
|
|
1,742 |
|
|
|
— |
|
|
|
4,243 |
|
Other costs (d) |
|
$ |
— |
|
|
$ |
868 |
|
|
$ |
5,495 |
|
|
$ |
3,462 |
|
Adjusted operating income |
|
$ |
37,290 |
|
|
$ |
47,354 |
|
|
$ |
148,183 |
|
|
$ |
157,025 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders |
|
$ |
14,633 |
|
|
$ |
26,093 |
|
|
$ |
83,320 |
|
|
$ |
82,098 |
|
Gain on sale of QC Center properties (a) |
|
|
— |
|
|
|
— |
|
|
|
(41,289 |
) |
|
|
— |
|
International restructuring costs (b) |
|
|
7,759 |
|
|
|
2,178 |
|
|
|
27,273 |
|
|
|
2,178 |
|
|
|
|
— |
|
|
|
1,742 |
|
|
|
— |
|
|
|
4,243 |
|
Other costs (d) |
|
|
— |
|
|
|
868 |
|
|
|
5,495 |
|
|
|
3,462 |
|
Tax effect of adjustments (e) |
|
|
(1,745 |
) |
|
|
(1,082 |
) |
|
|
1,934 |
|
|
|
(2,234 |
) |
Adjusted net income attributable to common shareholders (f) |
|
$ |
20,647 |
|
|
$ |
29,799 |
|
|
$ |
76,733 |
|
|
$ |
89,747 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share |
|
$ |
0.44 |
|
|
$ |
0.79 |
|
|
$ |
2.54 |
|
|
$ |
2.48 |
|
Gain on sale of QC Center properties (a) |
|
|
— |
|
|
|
— |
|
|
|
(1.25 |
) |
|
|
— |
|
International restructuring costs (b) |
|
|
0.24 |
|
|
|
0.07 |
|
|
|
0.82 |
|
|
|
0.07 |
|
|
|
|
— |
|
|
|
0.06 |
|
|
|
— |
|
|
|
0.13 |
|
Other costs (d) |
|
|
— |
|
|
|
0.02 |
|
|
|
0.17 |
|
|
|
0.10 |
|
Tax effect of adjustments (e) |
|
|
(0.05 |
) |
|
|
(0.03 |
) |
|
|
0.06 |
|
|
|
(0.07 |
) |
Adjusted diluted earnings per common share (f) |
|
$ |
0.63 |
|
|
$ |
0.91 |
|
|
$ |
2.34 |
|
|
$ |
2.71 |
|
Footnotes to Non-GAAP Financial Measures
(a) |
Represents pre-tax gain on sale, net of transaction costs, realized upon the August 2, 2024 completion of the sale of our |
(b) |
Represents costs associated with the Company’s International Transformation Plan. These costs are comprised primarily of lease and fixed asset impairment charges related to restaurant closures in the |
(c) |
Represents costs associated with repositioning the |
(d) |
For the twelve months ended December 29, 2024, represents non-cash impairment and remeasurement charges related primarily to fixed and intangible assets from the refranchising of 15 Domestic Company-owned restaurants. The twelve months ended December 31, 2023 includes |
(e) |
The tax effect on non-GAAP adjustments was calculated by applying the marginal tax rates of |
(f) |
Amounts shown include the impact of dividends paid to participating securities. |
Papa John’s International, Inc. and Subsidiaries |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(In thousands, except per share amounts) |
|
December 29,
|
|
December 31,
|
||||
|
|
|
|
|
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
37,955 |
|
|
$ |
40,587 |
|
Accounts receivable (less allowance for credit losses of |
|
|
101,677 |
|
|
|
104,244 |
|
Notes receivable, current portion |
|
|
4,928 |
|
|
|
5,199 |
|
Income tax receivable |
|
|
2,214 |
|
|
|
2,577 |
|
Inventories |
|
|
35,245 |
|
|
|
36,126 |
|
Prepaid expenses and other current assets |
|
|
48,586 |
|
|
|
42,285 |
|
Total current assets |
|
|
230,605 |
|
|
|
231,018 |
|
Property and equipment, net |
|
|
273,272 |
|
|
|
282,812 |
|
Finance lease right-of-use assets, net |
|
|
28,761 |
|
|
|
31,740 |
|
Operating lease right-of-use assets |
|
|
184,425 |
|
|
|
164,158 |
|
Notes receivable, less current portion (less allowance for credit losses of |
|
|
8,867 |
|
|
|
12,346 |
|
Goodwill |
|
|
75,460 |
|
|
|
76,206 |
|
Other assets |
|
|
87,562 |
|
|
|
76,725 |
|
Total assets |
|
$ |
888,952 |
|
|
$ |
875,005 |
|
|
|
|
|
|
||||
Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
61,842 |
|
|
$ |
74,949 |
|
Income and other taxes payable |
|
|
11,987 |
|
|
|
17,948 |
|
Accrued expenses and other current liabilities |
|
|
155,579 |
|
|
|
158,167 |
|
Current deferred revenue |
|
|
15,519 |
|
|
|
20,427 |
|
Current finance lease liabilities |
|
|
7,280 |
|
|
|
9,029 |
|
Current operating lease liabilities |
|
|
25,756 |
|
|
|
24,076 |
|
Total current liabilities |
|
|
277,963 |
|
|
|
304,596 |
|
Deferred revenue |
|
|
21,287 |
|
|
|
20,366 |
|
Long-term finance lease liabilities |
|
|
22,885 |
|
|
|
24,144 |
|
Long-term operating lease liabilities |
|
|
173,557 |
|
|
|
151,050 |
|
Long-term debt, net |
|
|
741,650 |
|
|
|
757,422 |
|
Other long-term liabilities |
|
|
64,923 |
|
|
|
60,192 |
|
Total liabilities |
|
|
1,302,265 |
|
|
|
1,317,770 |
|
|
|
|
|
|
||||
Redeemable noncontrolling interests |
|
|
903 |
|
|
|
851 |
|
|
|
|
|
|
||||
Stockholders’ deficit: |
|
|
|
|
||||
Common stock ( |
|
|
493 |
|
|
|
492 |
|
Additional paid-in capital |
|
|
452,449 |
|
|
|
452,290 |
|
Accumulated other comprehensive loss |
|
|
(8,456 |
) |
|
|
(7,803 |
) |
Retained earnings |
|
|
241,717 |
|
|
|
219,027 |
|
Treasury stock (16,637 shares at December 29, 2024 and 16,747 shares at December 31, 2023, at cost) |
|
|
(1,115,729 |
) |
|
|
(1,123,098 |
) |
Total stockholders’ deficit |
|
|
(429,526 |
) |
|
|
(459,092 |
) |
Noncontrolling interests in subsidiaries |
|
|
15,310 |
|
|
|
15,476 |
|
Total Stockholders’ deficit |
|
|
(414,216 |
) |
|
|
(443,616 |
) |
Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit |
|
$ |
888,952 |
|
|
$ |
875,005 |
|
Papa John’s International, Inc. and Subsidiaries |
||||||||||||||||
Condensed Consolidated Statements of Operations |
||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
(In thousands, except per share amounts) |
|
December 29,
|
|
December 31,
|
|
December 29,
|
|
December 31,
|
||||||||
Revenues: |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
||||||||
Company-owned restaurant sales |
|
$ |
177,678 |
|
|
$ |
210,953 |
|
|
$ |
724,666 |
|
|
$ |
760,825 |
|
Franchise royalties and fees |
|
|
47,497 |
|
|
|
52,257 |
|
|
|
187,032 |
|
|
|
194,987 |
|
Commissary revenues |
|
|
238,841 |
|
|
|
245,154 |
|
|
|
899,664 |
|
|
|
924,648 |
|
Other revenues |
|
|
22,816 |
|
|
|
21,779 |
|
|
|
83,682 |
|
|
|
98,037 |
|
Advertising funds revenue |
|
|
43,938 |
|
|
|
41,179 |
|
|
|
164,343 |
|
|
|
157,216 |
|
Total revenues |
|
|
530,770 |
|
|
|
571,322 |
|
|
|
2,059,387 |
|
|
|
2,135,713 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
||||||||
Cost of sales |
|
|
377,643 |
|
|
|
414,113 |
|
|
|
1,478,426 |
|
|
|
1,558,438 |
|
General and administrative expenses |
|
|
62,709 |
|
|
|
55,238 |
|
|
|
190,515 |
|
|
|
208,083 |
|
Depreciation and amortization |
|
|
16,879 |
|
|
|
17,275 |
|
|
|
69,407 |
|
|
|
64,090 |
|
Advertising funds expense |
|
|
44,008 |
|
|
|
42,130 |
|
|
|
164,335 |
|
|
|
157,960 |
|
Total costs and expenses |
|
|
501,239 |
|
|
|
528,756 |
|
|
|
1,902,683 |
|
|
|
1,988,571 |
|
Operating income |
|
|
29,531 |
|
|
|
42,566 |
|
|
|
156,704 |
|
|
|
147,142 |
|
Net interest expense |
|
|
(9,990 |
) |
|
|
(11,795 |
) |
|
|
(42,578 |
) |
|
|
(43,469 |
) |
Income before income taxes |
|
|
19,541 |
|
|
|
30,771 |
|
|
|
114,126 |
|
|
|
103,673 |
|
Income tax expense |
|
|
4,582 |
|
|
|
4,328 |
|
|
|
29,929 |
|
|
|
20,874 |
|
Net income |
|
|
14,959 |
|
|
|
26,443 |
|
|
|
84,197 |
|
|
|
82,799 |
|
Net income attributable to noncontrolling interests |
|
|
(160 |
) |
|
|
(350 |
) |
|
|
(711 |
) |
|
|
(701 |
) |
Net income attributable to the Company |
|
$ |
14,799 |
|
|
$ |
26,093 |
|
|
$ |
83,486 |
|
|
$ |
82,098 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders |
|
$ |
14,633 |
|
|
$ |
26,093 |
|
|
$ |
83,320 |
|
|
$ |
82,098 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share |
|
$ |
0.45 |
|
|
$ |
0.80 |
|
|
$ |
2.55 |
|
|
$ |
2.49 |
|
Diluted earnings per common share |
|
$ |
0.44 |
|
|
$ |
0.79 |
|
|
$ |
2.54 |
|
|
$ |
2.48 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding |
|
|
32,759 |
|
|
|
32,594 |
|
|
|
32,717 |
|
|
|
32,931 |
|
Diluted weighted average common shares outstanding |
|
|
32,957 |
|
|
|
32,829 |
|
|
|
32,819 |
|
|
|
33,159 |
|
Papa John’s International, Inc. and Subsidiaries |
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
|
|
Year Ended |
||||||
(In thousands) |
|
December 29,
|
|
December 31,
|
||||
Operating activities |
|
|
|
|
||||
Net income |
|
$ |
84,197 |
|
|
$ |
82,799 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Provision for allowance for credit losses on accounts and notes receivable |
|
|
2,737 |
|
|
|
5,393 |
|
Depreciation and amortization |
|
|
69,407 |
|
|
|
64,090 |
|
Refranchising and impairment loss |
|
|
18,340 |
|
|
|
— |
|
Deferred income taxes |
|
|
(3,037 |
) |
|
|
(5,991 |
) |
Stock-based compensation expense |
|
|
9,590 |
|
|
|
17,924 |
|
Gain on disposal of property and equipment |
|
|
(41,953 |
) |
|
|
— |
|
Other |
|
|
1,711 |
|
|
|
146 |
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
||||
Accounts receivable |
|
|
(465 |
) |
|
|
(4,920 |
) |
Income tax receivable |
|
|
345 |
|
|
|
6,212 |
|
Inventories |
|
|
851 |
|
|
|
5,441 |
|
Prepaid expenses and other current assets |
|
|
319 |
|
|
|
1,212 |
|
Other assets and liabilities |
|
|
(8,774 |
) |
|
|
(11,803 |
) |
Accounts payable |
|
|
(10,043 |
) |
|
|
22,031 |
|
Income and other taxes payable |
|
|
(5,678 |
) |
|
|
9,087 |
|
Accrued expenses and other current liabilities |
|
|
(2,035 |
) |
|
|
18,313 |
|
Deferred revenue |
|
|
(6,245 |
) |
|
|
(3,704 |
) |
Advertising fund assets and liabilities |
|
|
(2,635 |
) |
|
|
(13,175 |
) |
Net cash provided by operating activities |
|
|
106,632 |
|
|
|
193,055 |
|
Investing activities |
|
|
|
|
||||
Purchases of property and equipment |
|
|
(72,484 |
) |
|
|
(76,620 |
) |
Notes issued |
|
|
(154 |
) |
|
|
(4,338 |
) |
Repayments of notes issued |
|
|
4,152 |
|
|
|
4,655 |
|
Acquisitions, net of cash acquired |
|
|
(125 |
) |
|
|
(5,613 |
) |
Proceeds from dispositions and refranchising, net of cash transferred |
|
|
49,016 |
|
|
|
3,457 |
|
Other |
|
|
2,247 |
|
|
|
3,336 |
|
Net cash used in investing activities |
|
|
(17,348 |
) |
|
|
(75,123 |
) |
Financing activities |
|
|
|
|
||||
Net (repayments) proceeds from revolving credit facilities |
|
|
(17,268 |
) |
|
|
159,000 |
|
Proceeds from exercise of stock options |
|
|
1,055 |
|
|
|
2,252 |
|
Acquisition of Company common stock (including excise tax payment) |
|
|
(2,080 |
) |
|
|
(210,348 |
) |
Dividends paid to common stockholders |
|
|
(60,559 |
) |
|
|
(58,451 |
) |
Tax payments for equity award issuances |
|
|
(3,619 |
) |
|
|
(6,416 |
) |
Distributions to noncontrolling interests |
|
|
(825 |
) |
|
|
(1,320 |
) |
Principal payments on finance leases |
|
|
(8,529 |
) |
|
|
(8,821 |
) |
Other |
|
|
153 |
|
|
|
28 |
|
Net cash used in financing activities |
|
|
(91,672 |
) |
|
|
(124,076 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(244 |
) |
|
|
(642 |
) |
Change in cash and cash equivalents |
|
|
(2,632 |
) |
|
|
(6,786 |
) |
Cash and cash equivalents at beginning of period |
|
|
40,587 |
|
|
|
47,373 |
|
Cash and cash equivalents at end of period |
|
$ |
37,955 |
|
|
$ |
40,587 |
|
Papa John’s International, Inc. and Subsidiaries
Segment Information
The following tables present the operating results of our segments. We have four reportable segments: Domestic Company-owned restaurants,
|
|
Three months ended December 29, 2024 |
||||||||||
(in thousands) |
|
Domestic
|
|
|
|
|
|
International |
||||
Revenues from external customers |
|
$ |
174,634 |
|
$ |
35,154 |
|
$ |
219,901 |
|
$ |
41,733 |
Intersegment revenues |
|
|
— |
|
|
1,049 |
|
|
53,602 |
|
|
— |
Revenues |
|
$ |
174,634 |
|
$ |
36,203 |
|
$ |
273,503 |
|
$ |
41,733 |
|
|
|
|
|
|
|
|
|
||||
Less costs and expenses(a): |
|
|
|
|
|
|
|
|
||||
Cost of Sales |
|
|
154,640 |
|
|
— |
|
|
246,889 |
|
|
21,671 |
General & Administrative (b) |
|
|
10,396 |
|
|
8,875 |
|
|
9,950 |
|
|
9,953 |
Depreciation & Amortization |
|
|
3,928 |
|
|
— |
|
|
3,724 |
|
|
909 |
Advertising funds expense |
|
|
— |
|
|
— |
|
|
— |
|
|
3,996 |
Adjusted operating income |
|
$ |
5,670 |
|
$ |
27,328 |
|
$ |
12,940 |
|
$ |
5,204 |
|
|
Three months ended December 31, 2023 |
||||||||||
(in thousands) |
|
Domestic
|
|
|
|
|
|
International |
||||
Revenues from external customers |
|
$ |
193,521 |
|
$ |
38,727 |
|
$ |
227,928 |
|
$ |
53,947 |
Intersegment revenues |
|
|
— |
|
|
1,150 |
|
|
55,974 |
|
|
— |
Revenues |
|
$ |
193,521 |
|
$ |
39,877 |
|
$ |
283,902 |
|
$ |
53,947 |
|
|
|
|
|
|
|
|
|
||||
Less costs and expenses(a): |
|
|
|
|
|
|
|
|
||||
Cost of Sales |
|
|
164,395 |
|
|
— |
|
|
259,207 |
|
|
37,970 |
General & Administrative |
|
|
11,124 |
|
|
3,819 |
|
|
9,168 |
|
|
7,584 |
Depreciation & Amortization |
|
|
3,971 |
|
|
— |
|
|
4,028 |
|
|
1,064 |
Advertising funds expense |
|
|
— |
|
|
— |
|
|
— |
|
|
4,060 |
Adjusted operating income |
|
$ |
14,031 |
|
$ |
36,058 |
|
$ |
11,499 |
|
$ |
3,269 |
(a) |
Costs and expenses excludes certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. |
(b) |
As discussed more fully in the Company’s Form 10-K, the Company prospectively adjusted for updates in internal cost allocation methodologies in 2024, which increased the amount of internal general and administrative (“G&A”) costs allocated to the reportable segments from unallocated corporate expenses. The allocation methodology updates resulted in the following increases to segment G&A in the fourth quarter of 2024: |
|
|
Year Ended December 29, 2024 |
||||||||||
(in thousands) |
|
Domestic
|
|
|
|
|
|
International |
||||
Revenues from external customers |
|
$ |
692,736 |
|
$ |
139,091 |
|
$ |
831,774 |
|
$ |
174,054 |
Intersegment revenues |
|
|
— |
|
|
4,150 |
|
|
205,234 |
|
|
— |
Revenues |
|
$ |
692,736 |
|
$ |
143,241 |
|
$ |
1,037,008 |
|
$ |
174,054 |
|
|
|
|
|
|
|
|
|
||||
Less costs and expenses(a): |
|
|
|
|
|
|
|
|
||||
Cost of Sales |
|
|
611,685 |
|
|
— |
|
|
934,980 |
|
|
104,138 |
General & Administrative (b) |
|
|
39,822 |
|
|
35,064 |
|
|
37,690 |
|
|
38,379 |
Depreciation & Amortization |
|
|
16,560 |
|
|
— |
|
|
15,780 |
|
|
4,134 |
Advertising funds expense |
|
|
— |
|
|
— |
|
|
— |
|
|
13,635 |
Adjusted operating income |
|
$ |
24,669 |
|
$ |
108,177 |
|
$ |
48,558 |
|
$ |
13,768 |
|
|
Year Ended December 31, 2023 |
||||||||||
(in thousands) |
|
Domestic
|
|
|
|
|
|
International |
||||
Revenues from external customers |
|
$ |
726,362 |
|
$ |
144,550 |
|
$ |
852,361 |
|
$ |
182,487 |
Intersegment revenues |
|
|
— |
|
|
4,267 |
|
|
210,614 |
|
|
— |
Revenues |
|
$ |
726,362 |
|
$ |
148,817 |
|
$ |
1,062,975 |
|
$ |
182,487 |
|
|
|
|
|
|
|
|
|
||||
Less costs and expenses(a): |
|
|
|
|
|
|
|
|
||||
Cost of Sales |
|
|
637,994 |
|
|
— |
|
|
966,653 |
|
|
115,499 |
General & Administrative |
|
|
40,714 |
|
|
15,017 |
|
|
36,960 |
|
|
31,271 |
Depreciation & Amortization |
|
|
14,184 |
|
|
— |
|
|
16,046 |
|
|
3,167 |
Advertising funds expense |
|
|
— |
|
|
— |
|
|
— |
|
|
13,495 |
Adjusted operating income |
|
$ |
33,470 |
|
$ |
133,800 |
|
$ |
43,316 |
|
$ |
19,055 |
(a) |
Costs and expenses excludes certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. |
(b) |
As discussed more fully in the Company’s Form 10-K, the Company prospectively adjusted for updates in internal cost allocation methodologies in 2024, which increased the amount of internal G&A costs allocated to the reportable segments from Unallocated corporate expenses. The allocation methodology updates resulted in the following increases to segment G&A in 2024: |
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Papa Johns Investor Relations
investor_relations@papajohns.com
Source: Papa John’s International, Inc.
