x
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Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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o
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware | 61-1203323 | ||
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
||
2002 Papa Johns Boulevard | |||
Louisville, Kentucky | 40299-2367 | ||
(Address of principal executive offices) | (Zip Code) |
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96
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96
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96
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·
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Food cost relief by lowering the commissary margin on certain commodities sold by PJ Food Service, Inc. (“PJFS”) to the franchise system and by providing incentive rebate opportunities;
|
·
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Targeted royalty relief and local marketing support to assist certain identified franchisees or markets; and
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·
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Restaurant opening incentives.
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Company
|
Franchised
|
Total
|
||||||||||
Alabama
|
- | 73 | 73 | |||||||||
Alaska
|
- | 6 | 6 | |||||||||
Arizona
|
39 | 37 | 76 | |||||||||
Arkansas
|
- | 23 | 23 | |||||||||
California
|
- | 209 | 209 | |||||||||
Colorado
|
22 | 25 | 47 | |||||||||
Connecticut
|
- | 11 | 11 | |||||||||
Delaware
|
- | 15 | 15 | |||||||||
District of Columbia
|
- | 10 | 10 | |||||||||
Florida
|
46 | 221 | 267 | |||||||||
Georgia
|
86 | 60 | 146 | |||||||||
Hawaii
|
- | 14 | 14 | |||||||||
Idaho
|
- | 11 | 11 | |||||||||
Illinois
|
6 | 115 | 121 | |||||||||
Indiana
|
41 | 84 | 125 | |||||||||
Iowa
|
- | 23 | 23 | |||||||||
Kansas
|
13 | 19 | 32 | |||||||||
Kentucky
|
42 | 70 | 112 | |||||||||
Louisiana
|
- | 61 | 61 | |||||||||
Maine
|
- | 6 | 6 | |||||||||
Maryland
|
60 | 40 | 100 | |||||||||
Massachusetts
|
- | 19 | 19 | |||||||||
Michigan
|
- | 43 | 43 | |||||||||
Minnesota
|
30 | 15 | 45 | |||||||||
Mississippi
|
- | 30 | 30 | |||||||||
Missouri
|
41 | 33 | 74 | |||||||||
Montana
|
- | 10 | 10 | |||||||||
Nebraska
|
- | 17 | 17 |
Company
|
Franchised
|
Total
|
||||||||||
Nevada
|
- | 22 | 22 | |||||||||
New Hampshire
|
- | 2 | 2 | |||||||||
New Jersey
|
- | 87 | 87 | |||||||||
New Mexico
|
- | 17 | 17 | |||||||||
New York
|
- | 127 | 127 | |||||||||
North Carolina
|
83 | 77 | 160 | |||||||||
North Dakota
|
- | 5 | 5 | |||||||||
Ohio
|
- | 152 | 152 | |||||||||
Oklahoma
|
- | 28 | 28 | |||||||||
Oregon
|
- | 16 | 16 | |||||||||
Pennsylvania
|
- | 94 | 94 | |||||||||
Rhode Island
|
- | 5 | 5 | |||||||||
South Carolina
|
6 | 54 | 60 | |||||||||
South Dakota
|
- | 10 | 10 | |||||||||
Tennessee
|
29 | 76 | 105 | |||||||||
Texas
|
78 | 159 | 237 | |||||||||
Utah
|
- | 33 | 33 | |||||||||
Vermont
|
- | 1 | 1 | |||||||||
Virginia
|
26 | 112 | 138 | |||||||||
Washington
|
- | 51 | 51 | |||||||||
West Virginia
|
- | 23 | 23 | |||||||||
Wisconsin
|
- | 26 | 26 | |||||||||
Wyoming
|
- | 6 | 6 | |||||||||
Total U.S. Papa John’s Restaurants
|
648 | 2,483 | 3,131 | |||||||||
Canada
|
- | 73 | 73 | |||||||||
Total North America Papa John’s Restaurants
|
648 | 2,556 | 3,204 |
Azerbaijan
|
- | 1 | 1 | |||||||||
Bahrain
|
- | 19 | 19 | |||||||||
Cayman Islands
|
- | 1 | 1 | |||||||||
Chile
|
- | 18 | 18 | |||||||||
China
|
48 | 132 | 180 | |||||||||
Colombia
|
- | 16 | 16 | |||||||||
Costa Rica
|
- | 14 | 14 | |||||||||
Cyprus
|
- | 9 | 9 | |||||||||
Dominican Republic
|
- | 10 | 10 | |||||||||
Ecuador
|
- | 13 | 13 | |||||||||
Egypt
|
- | 13 | 13 | |||||||||
El Salvador
|
- | 10 | 10 | |||||||||
Guam
|
- | 1 | 1 | |||||||||
India
|
- | 29 | 29 | |||||||||
Ireland
|
- | 44 | 44 | |||||||||
Jordan
|
- | 6 | 6 | |||||||||
Kuwait
|
- | 25 | 25 | |||||||||
Lebanon
|
- | 3 | 3 | |||||||||
Malaysia
|
- | 19 | 19 | |||||||||
Mexico
|
- | 57 | 57 | |||||||||
Nicaragua
|
- | 2 | 2 |
Company
|
Franchised
|
Total
|
||||||||||
Oman
|
- | 6 | 6 | |||||||||
Panama
|
- | 4 | 4 | |||||||||
Peru
|
- | 19 | 19 | |||||||||
Philippines
|
- | 13 | 13 | |||||||||
Puerto Rico
|
- | 14 | 14 | |||||||||
Qatar
|
- | 10 | 10 | |||||||||
Russia
|
- | 40 | 40 | |||||||||
Saudi Arabia
|
- | 6 | 6 | |||||||||
South Korea
|
- | 72 | 72 | |||||||||
Trinidad
|
- | 6 | 6 | |||||||||
Turkey
|
- | 17 | 17 | |||||||||
United Arab Emirates
|
- | 21 | 21 | |||||||||
United Kingdom
|
- | 212 | 212 | |||||||||
Venezuela
|
- | 29 | 29 | |||||||||
Total International Papa John’s Restaurants
|
48 | 911 | 959 |
Name
|
Age (a)
|
Position
|
First Elected
Executive Officer
|
John H. Schnatter
|
51
|
Founder, Chairman and Chief Executive Officer
|
1985
|
Timothy C. O’Hern
|
49
|
Senior Vice President and Chief Development Officer
|
2005
|
Steve M. Ritchie
|
38
|
Senior Vice President, North and Latin American Operations and Global OST
|
2012
|
Thomas V. Sterrett
|
52
|
Senior Vice President, International
|
2010
|
Anthony N. Thompson
|
46
|
Executive Vice President, Chief Operating Officer, and President PJ Food Service
|
2009
|
Lance F. Tucker
|
43
|
Senior Vice President, Chief Financial
Officer, Chief Administrative Officer, and Treasurer
|
2011
|
Andrew M. Varga
|
47
|
Senior Vice President and Chief Marketing Officer
|
2009
|
2012
|
High
|
Low
|
||||||
First Quarter
|
$ | 40.43 | $ | 36.57 | ||||
Second Quarter
|
49.38 | 36.78 | ||||||
Third Quarter
|
52.78 | 45.75 | ||||||
Fourth Quarter
|
54.00 | 47.05 | ||||||
2011
|
High
|
Low
|
||||||
First Quarter
|
$ | 30.55 | $ | 27.54 | ||||
Second Quarter
|
34.27 | 29.62 | ||||||
Third Quarter
|
33.79 | 27.47 | ||||||
Fourth Quarter
|
37.92 | 29.54 |
(In thousands, except per share data)
|
Year Ended (1)
|
|||||||||||||||||||
Dec. 30,
|
Dec. 25,
|
Dec. 26,
|
Dec. 27,
|
Dec. 28,
|
||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
(As Restated)
|
(As Restated)
|
(Unaudited --
As Restated)
|
||||||||||||||||||
Income Statement Data
|
53 weeks
|
52 weeks
|
52 weeks
|
52 weeks
|
52 weeks
|
|||||||||||||||
North America revenues:
|
||||||||||||||||||||
Domestic Company-owned restaurant sales
|
$ | 592,203 | $ | 525,841 | $ | 503,272 | $ | 503,818 | $ | 533,255 | ||||||||||
Franchise royalties (2)
|
79,567 | 73,694 | 69,631 | 62,083 | 60,592 | |||||||||||||||
Franchise and development fees
|
806 | 722 | 610 | 912 | 1,722 | |||||||||||||||
Domestic commissary sales
|
545,924 | 508,155 | 454,506 | 417,689 | 431,650 | |||||||||||||||
Other sales
|
51,223 | 50,912 | 51,951 | 54,045 | 61,415 | |||||||||||||||
International revenues:
|
||||||||||||||||||||
Royalties and franchise and development fees (3)
|
19,881 | 16,327 | 13,265 | 11,780 | 11,858 | |||||||||||||||
Restaurant and commissary sales (4)
|
53,049 | 42,231 | 33,162 | 28,223 | 25,849 | |||||||||||||||
Total revenues
|
1,342,653 | 1,217,882 | 1,126,397 | 1,078,550 | 1,126,341 | |||||||||||||||
Operating income (5)
|
99,807 | 87,017 | 86,744 | 95,218 | 65,486 | |||||||||||||||
Investment income
|
750 | 755 | 875 | 629 | 848 | |||||||||||||||
Interest expense
|
(2,162 | ) | (2,981 | ) | (4,309 | ) | (11,660 | ) | (7,536 | ) | ||||||||||
Income before income taxes
|
98,395 | 84,791 | 83,310 | 84,187 | 58,798 | |||||||||||||||
Income tax expense
|
32,393 | 26,324 | 27,247 | 26,702 | 19,980 | |||||||||||||||
Net income, including redeemable noncontrolling interests
|
66,002 | 58,467 | 56,063 | 57,485 | 38,818 | |||||||||||||||
Income attributable to redeemable noncontrolling interests (6)
|
(4,342 | ) | (3,732 | ) | (3,485 | ) | (3,756 | ) | (2,022 | ) | ||||||||||
Net income, net of redeemable noncontrolling interests
|
$ | 61,660 | $ | 54,735 | $ | 52,578 | $ | 53,729 | $ | 36,796 | ||||||||||
Basic earnings per common share
|
$ | 2.63 | $ | 2.19 | $ | 2.00 | $ | 1.94 | $ | 1.31 | ||||||||||
Earnings per common share - assuming dilution
|
$ | 2.58 | $ | 2.16 | $ | 1.99 | $ | 1.93 | $ | 1.30 | ||||||||||
Basic weighted average shares outstanding
|
23,458 | 25,043 | 26,328 | 27,738 | 28,124 | |||||||||||||||
Diluted weighted average shares outstanding
|
23,905 | 25,310 | 26,468 | 27,909 | 28,264 | |||||||||||||||
Balance Sheet Data
|
||||||||||||||||||||
Total assets
|
$ | 438,408 | $ | 390,382 | $ | 417,492 | $ | 396,009 | $ | 385,464 | ||||||||||
Total debt
|
88,258 | 51,489 | 99,017 | 99,050 | 130,654 | |||||||||||||||
Redeemable noncontrolling interests, including mandatorily
redeemable
|
18,217 | 15,030 | 13,484 | 14,175 | 11,594 | |||||||||||||||
Total stockholders’ equity
|
181,514 | 205,647 | 195,608 | 173,145 | 129,986 |
(1)
|
We operate on a 52-53 week fiscal year ending on the last Sunday of December of each year. The 2012 fiscal year consisted of 53 weeks and all other years above consisted of 52 weeks. The additional week resulted in additional revenues of approximately $21.5 million and additional income before income taxes of approximately $4.1 million, or $0.11 per diluted share for 2012.
|
(2)
|
North America franchise royalties were derived from franchised restaurant sales of $1.85 billion in 2012, $1.71 billion in 2011, $1.62 billion in 2010, $1.58 billion in 2009 and $1.53 billion in 2008.
|
(3)
|
International royalties were derived from franchised restaurant sales of $388.4 million in 2012, $320.0 million in 2011, $258.8 million in 2010, $222.2 million in 2009 and $196.5 million in 2008.
|
(4)
|
Restaurant sales for international Company-owned restaurants were $16.2 million in 2012, $12.4 million in 2011, $11.0 million in 2010, $10.3 million in 2009 and $8.1 million in 2008.
|
(5)
|
The operating results include the consolidation of BIBP Commodities, Inc. (“BIBP”), which increased operating income approximately $21.4 million in 2010 (including a reduction in BIBP’s cost of sales of $14.2 million associated with PJFS’s agreement to pay to BIBP for past cheese purchases an amount equal to its accumulated deficit). BIBP increased operating income by $23.3 million in 2009 and reduced operating income by $8.6 million in 2008 (break-even results in 2011). See “Note 5” of “Notes to Consolidated Financial Statements” for additional information. Operating income also includes domestic and international restaurant closure, impairment and disposition losses of $8.8 million in 2008.
|
(6)
|
Represents the redeemable noncontrolling interests’ allocation of income for our joint venture arrangements.
|
Year Ended
|
||||||||||||
Dec. 30,
|
Dec. 25,
|
Dec. 26,
|
||||||||||
(In thousands, except per share amounts)
|
2012
|
2011
|
2010
|
|||||||||
(As Restated)
|
(As Restated)
|
|||||||||||
Total revenues, as reported
|
$ | 1,342,653 | $ | 1,217,882 | $ | 1,126,397 | ||||||
53rd week of operations (a)
|
(21,500 | ) | - | - | ||||||||
Total revenues, as adjusted
|
$ | 1,321,153 | $ | 1,217,882 | $ | 1,126,397 | ||||||
Income before income taxes, as reported
|
$ | 98,395 | $ | 84,791 | $ | 83,310 | ||||||
53rd week of operations (a)
|
(4,145 | ) | - | - | ||||||||
Incentive Contribution (b)
|
2,971 | - | - | |||||||||
Income from BIBP cheese purchasing entity (c)
|
- | - | (6,804 | ) | ||||||||
Income before income taxes, as adjusted
|
$ | 97,221 | $ | 84,791 | $ | 76,506 |
Year Ended
|
||||||||||||
Dec. 30,
|
Dec. 25,
|
Dec. 26,
|
||||||||||
(In thousands, except per share amounts)
|
2012
|
2011
|
2010
|
|||||||||
(As Restated)
|
(As Restated)
|
|||||||||||
Net income, as reported
|
$ | 61,660 | $ | 54,735 | $ | 52,578 | ||||||
53rd week of operations (a)
|
(2,634 | ) | - | - | ||||||||
Incentive Contribution (b)
|
1,955 | - | - | |||||||||
Income from BIBP cheese purchasing entity (c)
|
- | - | (4,339 | ) | ||||||||
Net income, as adjusted
|
$ | 60,981 | $ | 54,735 | $ | 48,239 | ||||||
Earnings per diluted share, as reported
|
$ | 2.58 | $ | 2.16 | $ | 1.99 | ||||||
53rd week of operations (a)
|
(0.11 | ) | - | - | ||||||||
Incentive Contribution (b)
|
0.08 | - | - | |||||||||
Income from BIBP cheese purchasing entity (c)
|
- | - | (0.16 | ) | ||||||||
Earnings per diluted share, as adjusted
|
$ | 2.55 | $ | 2.16 | $ | 1.83 |
(a)
|
The Company follows a fiscal year ending on the last Sunday of December, generally consisting of 52 weeks made up of four 13-week quarters. In 2012, the Company’s fiscal year consisted of 53 weeks, with the additional week added to the fourth quarter (14 weeks) results.
|
(b)
|
In connection with a new multi-year supplier agreement, the Company received a $5.0 million supplier marketing payment in 2012. The Company is recognizing the supplier marketing payment evenly as income over the five-year term of the agreement ($1.0 million per year). The Company then contributed the supplier marketing payment to the Papa John’s Marketing Fund (“PJMF”), an unconsolidated, non-profit corporation, for the benefit of domestic restaurants. The Company’s contribution to PJMF was fully expensed in 2012.
|
PJMF elected to distribute the $5.0 million supplier marketing payment to the domestic system as advertising credits in 2012. Our domestic Company-owned restaurants’ portion of the advertising credits resulted in an increase in income before income taxes of approximately $1.0 million in 2012.
|
|
The overall impact of the two transactions described above, which are collectively defined as the “Incentive Contribution,” was a reduction in income before income taxes of approximately $3.0 million in 2012 (or a reduction to diluted earnings per share of approximately $0.08).
|
|
(c)
|
BIBP was a franchisee-owned corporation that conducted a cheese-purchasing program on behalf of Company-owned and franchised restaurants operating in the United States through February 2011. As the primary beneficiary of the variable interest entity, we consolidated the operating results of BIBP. BIBP operated at break-even for the first two months of 2011 and the 2010 consolidation impact of BIBP on income before income taxes was $6.8 million. The 2010 consolidation impact of BIBP on income before income taxes excluded a reduction in BIBP’s cost of sales of $14.2 million associated with PJFS’s agreement to pay to BIBP for past cheese purchases an amount equal to its accumulated deficit (“BIBP Settlement”). Accordingly, BIBP recorded a decrease of $14.2 million in cost of sales and PJFS recorded a corresponding increase in cost of sales in 2010. This transaction did not have any impact on the Company’s 2010 consolidated income statement results since both PJFS and BIBP are fully consolidated.
|
Year Ended (1)
|
||||||||||||
Dec. 30,
|
Dec. 25,
|
Dec. 26,
|
||||||||||
2012
|
2011
|
2010
|
||||||||||
(As Restated)
|
(As Restated)
|
|||||||||||
Income Statement Data:
|
53 weeks
|
52 weeks
|
52 weeks
|
|||||||||
North America revenues:
|
||||||||||||
Domestic Company-owned restaurant sales
|
44.1 | % | 43.2 | % | 44.7 | % | ||||||
Franchise royalties
|
5.9 | 6.1 | 6.2 | |||||||||
Franchise and development fees
|
0.1 | 0.1 | 0.0 | |||||||||
Domestic commissary sales
|
40.7 | 41.7 | 40.4 | |||||||||
Other sales
|
3.8 | 4.2 | 4.6 | |||||||||
International revenues:
|
||||||||||||
Royalties and franchise and development fees
|
1.5 | 1.3 | 1.2 | |||||||||
Restaurant and commissary sales
|
3.9 | 3.4 | 2.9 | |||||||||
Total revenues
|
100.0 | 100.0 | 100.0 | |||||||||
Costs and expenses:
|
||||||||||||
Domestic Company-owned restaurant cost of sales (2)
|
23.2 | 24.1 | 22.1 | |||||||||
Domestic Company-owned restaurant operating expenses (2)
|
57.1 | 56.9 | 57.7 | |||||||||
Domestic commissary and other expenses (3)
|
92.0 | 92.2 | 91.4 | |||||||||
Income from the franchise cheese purchasing
|
||||||||||||
program, net of minority interest (4)
|
0.0 | 0.0 | (0.5 | ) | ||||||||
International operating expenses (5)
|
84.6 | 84.5 | 88.7 | |||||||||
General and administrative expenses
|
9.8 | 9.2 | 9.8 | |||||||||
Other general expenses
|
0.6 | 0.8 | 0.8 | |||||||||
Depreciation and amortization
|
2.4 | 2.7 | 2.9 | |||||||||
Total costs and expenses
|
92.6 | 92.9 | 92.3 | |||||||||
Operating income
|
7.4 | 7.1 | 7.7 | |||||||||
Net interest expense
|
(0.1 | ) | (0.1 | ) | (0.3 | ) | ||||||
Income before income taxes
|
7.3 | 7.0 | 7.4 | |||||||||
Income tax expense
|
2.4 | 2.2 | 2.4 | |||||||||
Net income, including redeemable noncontrolling interests
|
4.9 | 4.8 | 5.0 | |||||||||
Less: income attributable to redeemable noncontrolling interests
|
(0.3 | ) | (0.3 | ) | (0.3 | ) | ||||||
Net income, net of redeemable noncontrolling interests
|
4.6 | % | 4.5 | % | 4.7 | % |
Year Ended (1)
|
||||||||||||
Dec. 30,
|
Dec. 25,
|
Dec. 26,
|
||||||||||
2012
|
2011
|
2010
|
||||||||||
Restaurant Data:
|
53 weeks
|
52 weeks
|
52 weeks
|
|||||||||
Percentage increase (decrease) in comparable domestic
|
||||||||||||
Company-owned restaurant sales (6)
|
5.6 | % | 4.1 | % | (0.6 | %) | ||||||
Number of Company-owned restaurants included in the
|
||||||||||||
most recent full year's comparable restaurant base
|
615 | 581 | 577 | |||||||||
Average sales for Company-owned restaurants included
|
||||||||||||
in the most recent comparable restaurant base
|
$ | 953,000 | $ | 897,000 | $ | 863,000 | ||||||
Papa John's Restaurant Progression:
|
||||||||||||
North America Company-owned:
|
||||||||||||
Beginning of period
|
598 | 591 | 588 | |||||||||
Opened
|
8 | 8 | 5 | |||||||||
Closed
|
(3 | ) | (1 | ) | (2 | ) | ||||||
Acquired from franchisees
|
57 | - | - | |||||||||
Sold to franchisees
|
(12 | ) | - | - | ||||||||
End of period
|
648 | 598 | 591 | |||||||||
International Company-owned:
|
||||||||||||
Beginning of period
|
30 | 21 | 26 | |||||||||
Opened
|
20 | 9 | 8 | |||||||||
Closed
|
(2 | ) | - | (2 | ) | |||||||
Acquired from franchisees
|
- | - | 1 | |||||||||
Sold to franchisees
|
- | - | (12 | ) | ||||||||
End of period
|
48 | 30 | 21 | |||||||||
North America franchised:
|
||||||||||||
Beginning of period
|
2,463 | 2,346 | 2,246 | |||||||||
Opened
|
182 | 166 | 182 | |||||||||
Closed
|
(44 | ) | (49 | ) | (82 | ) | ||||||
Acquired from Company
|
12 | - | - | |||||||||
Sold to Company
|
(57 | ) | - | - | ||||||||
End of period
|
2,556 | 2,463 | 2,346 | |||||||||
International franchised:
|
||||||||||||
Beginning of period
|
792 | 688 | 609 | |||||||||
Opened
|
158 | 138 | 130 | |||||||||
Closed
|
(39 | ) | (34 | ) | (62 | ) | ||||||
Acquired from Company
|
- | - | 12 | |||||||||
Sold to Company
|
- | - | (1 | ) | ||||||||
End of period
|
911 | 792 | 688 | |||||||||
Total Papa John's restaurants - end of period
|
4,163 | 3,883 | 3,646 |
(1)
|
We operate on a 52-53 week fiscal year ending on the last Sunday of December of each year. The 2010 and 2011 fiscal years consisted of 52 weeks and the 2012 fiscal year consisted of 53 weeks. The additional week in 2012 resulted in additional revenues of approximately $21.5 million and additional income before income taxes of approximately $4.1 million, or $0.11 per diluted share.
|
(2)
|
As a percentage of domestic Company-owned restaurant sales.
|
(3)
|
As a percentage of domestic commissary sales and other sales on a combined basis.
|
(4)
|
As a percentage of total Company revenues; the income is a result of the consolidation of BIBP, a VIE. The sales reported by BIBP are eliminated in consolidation.
|
(5)
|
As a percentage of international restaurant and commissary sales.
|
(6)
|
Includes only Company-owned restaurants open throughout the periods being compared.
|
|
·
|
Domestic Company-owned restaurant sales increased $66.4 million, or 12.6%, in 2012, primarily due to an increase in comparable sales of 5.6%, the net acquisition of 50 restaurants in the Denver and Minneapolis markets from a franchisee in the second quarter of 2012, and $10.6 million, or 2.0%, benefit from the 53
rd
week of operations.
|
|
·
|
North America franchise royalty revenues increased approximately $5.9 million, or 8.0%, in 2012, due to an increase in comparable sales of 2.9%, an increase in net franchise units over the prior year, and a $1.4 million, or 1.8%, benefit from the 53
rd
week of operations. These increases were slightly offset by reduced royalties attributable to the Company’s net acquisition of the 50 restaurants noted above.
|
|
·
|
Domestic commissary sales increased $37.8 million, or 7.4%, in 2012, primarily due to higher commissary product volumes primarily resulting from increases in the volume of restaurant sales. The benefit from the 53
rd
week of operations was approximately $8.5 million, or an increase of 1.7%.
|
|
·
|
International revenues increased $14.4 million, or 24.5%, in 2012, primarily due to an increase in the number of restaurants and an increase in comparable sales of 7.1%, calculated on a constant dollar basis, which excludes the impact of foreign currency translation. The benefit from the 53
rd
week of operations was approximately $800,000, or 1.4%.
|
(a)
|
(a)
|
Increase
|
||||||||||
2012
|
2011
|
(Decrease)
|
||||||||||
53 weeks
|
52 weeks
|
|||||||||||
(As Restated)
|
||||||||||||
Domestic Company-owned restaurants (b)
|
$ | 38,114 | $ | 28,980 | $ | 9,134 | ||||||
Domestic commissaries
|
34,317 | 30,532 | 3,785 | |||||||||
North America franchising
|
69,332 | 66,222 | 3,110 | |||||||||
International
|
3,063 | (165 | ) | 3,228 | ||||||||
All others
|
2,889 | (441 | ) | 3,330 | ||||||||
Unallocated corporate expenses (c)
|
(48,958 | ) | (39,727 | ) | (9,231 | ) | ||||||
Elimination of intersegment profits
|
(362 | ) | (610 | ) | 248 | |||||||
Income before income taxes
|
$ | 98,395 | $ | 84,791 | $ | 13,604 |
|
(a)
|
The 53
rd
week of operations increased income before income taxes by approximately $4.1 million in 2012 as follows:
|
Increase
(Decrease)
|
|||||
Domestic company-owned restaurants
|
$ | 1,609 | |||
Domestic commissaries
|
1,200 | ||||
North America franchising
|
1,414 | ||||
International
|
414 | ||||
All others
|
215 | ||||
Unallocated corporate expenses
|
(707 | ) | |||
Income before income taxes
|
$ | 4,145 |
|
(b)
|
Includes the benefit of a $1.0 million advertising credit from PJMF related to the Incentive Contribution in 2012. See “Items Impacting Comparability; Non-GAAP measures” above for further information about the Incentive Contribution.
|
(c)
|
Includes the impact of the Incentive Contribution in 2012 ($4.0 million increase in expense).
|
|
●
|
Domestic Company-owned Restaurant Segment.
Domestic Company-owned restaurants’ income before income taxes increased $9.1 million from the prior comparable period, including approximately $1.6 million related to the 53
rd
week of operations. The remaining increase was due to the previously noted comparable sales increase, favorable commodity costs, and various supplier incentives.
|
|
●
|
Domestic Commissary Segment.
Domestic commissaries’ income before income taxes increased $3.8 million in 2012 as compared to the comparable 2011 period. Approximately $1.2 million of the increase was due to the impact of the 53
rd
week of operations. The remaining increase was primarily due to higher commissary product volumes resulting from increased sales volumes from the previously noted increase in net units and comparable sales.
|
|
●
|
North America Franchising Segment.
North America franchising income before income taxes increased approximately $3.1 million in 2012, including approximately $1.4 million related to the 53
rd
week of operations in 2012. The remaining increase was due to the previously mentioned royalty revenue increase, partially offset by both an increase in development incentive costs and a reduction in royalties attributable to the Company’s net acquisition of the 50 Denver and Minneapolis restaurants.
|
|
●
|
International Segment.
The international segment reported income before income taxes of approximately $3.1 million in 2012 compared to a loss of approximately $165,000 in 2011. The improvement in operating results of $3.2 million was primarily due to increased royalties due to growth in the number of units and a comparable sales increase of 7.1%, and improved operating results in our United Kingdom commissary. The 53
rd
week of operations increased operating results by approximately $400,000 in 2012.
|
|
●
|
All Others Segment.
The “All others” segment reported operating income of approximately $2.9 million in 2012, representing an increase of approximately $3.3 million, as compared to the corresponding 2011 period. The increase was primarily due to an improvement in our online and mobile ordering (“eCommerce”) business. This improvement was somewhat offset by reduced operating results at our wholly-owned print and promotions subsidiary, Preferred Marketing Solutions (“Preferred”).
|
|
●
|
Unallocated Corporate Segment.
Unallocated corporate expenses increased $9.2 million in 2012, as compared to the prior year, including approximately $700,000 related to the 53
rd
week of operations. The components of unallocated corporate expenses were as follows (in thousands):
|
Year Ended
|
Year Ended
|
|||||||||||
December 30,
|
December 25,
|
Increase
|
||||||||||
2012
|
2011
|
(Decrease)
|
||||||||||
(As Restated)
|
||||||||||||
General and administrative (a)
|
$ | 37,618 | $ | 24,807 | $ | 12,811 | ||||||
Supplier marketing payment (b)
|
4,000 | - | 4,000 | |||||||||
Net interest expense
|
1,476 | 2,300 | (824 | ) | ||||||||
Depreciation expense
|
7,193 | 8,021 | (828 | ) | ||||||||
Franchise incentives and initiatives (c)
|
- | 3,234 | (3,234 | ) | ||||||||
Perfect Pizza lease obligation (d)
|
(135 | ) | 832 | (967 | ) | |||||||
Other (income) expense (e)
|
(1,194 | ) | 533 | (1,727 | ) | |||||||
Total unallocated corporate expenses
|
$ | 48,958 | $ | 39,727 | $ | 9,231 |
|
(a)
|
The increase in unallocated general and administrative costs was primarily due to increases in legal costs, including estimated costs associated with the tentative settlement of the Agne litigation (see “Note 17” of “Notes to Consolidated Financial Statements” for additional information), short-term management incentives, insurance costs, and higher costs related to our operators’ conference.
|
|
(b)
|
See “Items Impacting Comparability; Non-GAAP Measures” above for further information about the Incentive Contribution.
|
|
(c)
|
In 2011, we offered non-recurring incentives to domestic franchisees for meeting certain sales targets, including driving comparable sales, transactions and online sales. Other incentives offered are included in the North America Franchising segment.
|
|
(d)
|
The Perfect Pizza lease obligation relates to rents, taxes and insurance associated with the former Perfect Pizza operations in the United Kingdom. See the notes to the consolidated financial statements for additional information.
|
|
(e)
|
Other (income) expense improved primarily due to the prior year including both higher costs related to our online customer loyalty program and disposition and valuation costs associated with certain systems and other equipment.
|
|
●
|
Cost of sales was 0.9% lower as a percentage of sales in 2012 due to lower commodity costs, primarily cheese; 2012 also included various supplier incentives.
|
|
●
|
Salaries and benefits were 0.5% higher as a percentage of sales in 2012, primarily due to higher bonuses paid to general managers.
|
|
●
|
Advertising and related costs as a percentage of sales were relatively flat year-over-year and included a $1.0 million advertising credit received from PJMF. The higher costs, excluding the advertising credit, were due to increased local advertising, including additional costs for newly acquired markets.
|
|
●
|
Occupancy costs and other operating costs, on a combined basis, as a percentage of sales, were 0.2% lower in 2012 reflecting the benefit of increased sales.
|
|
●
|
Cost of sales was 0.3% lower as a percentage of revenues in 2012, as compared to 2011 due to lower commodity costs, primarily cheese, which has a fixed-dollar markup and due to the benefit of increased online sales.
|
|
●
|
Salaries and benefits were 0.1% higher as a percentage of revenues in 2012, as compared to the same period of 2011.
|
|
●
|
Other operating expenses were 0.1% higher as a percentage of revenues in 2012, as compared to 2011.
|
Increase
|
||||||||||||
2012
|
2011
|
(Decrease)
|
||||||||||
Supplier marketing payment (a)
|
$ | 4,000 | $ | - | $ | 4,000 | ||||||
Franchise and development incentives and initiatives (b)
|
3,194 | 4,921 | (1,727 | ) | ||||||||
Provision for uncollectible accounts and notes receivable
|
826 | 379 | 447 | |||||||||
Disposition and impairment losses (c)
|
362 | 1,745 | (1,383 | ) | ||||||||
Pre-opening restaurant costs
|
321 | 273 | 48 | |||||||||
Perfect Pizza lease obligation (d)
|
(135 | ) | 832 | (967 | ) | |||||||
Other (income) expense (e)
|
(255 | ) | 1,617 | (1,872 | ) | |||||||
Total other general expenses
|
$ | 8,313 | $ | 9,767 | $ | (1,454 | ) |
(a)
|
See “Items Impacting Comparability; Non-GAAP measures” above for further information about the Incentive Contribution.
|
(b)
|
Includes incentives provided to domestic franchisees for opening restaurants. The 2011 amount includes approximately $3.2 million in incentives offered to domestic franchisees for meeting certain sales targets, including driving comparable sales, transactions and online sales, which were not offered in 2012.
|
(c)
|
Disposition and impairment losses include costs associated with the disposition of certain systems and other equipment, which were higher in 2011.
|
(d)
|
The Perfect Pizza lease obligation relates to rents, taxes and insurance associated with the former Perfect Pizza operations in the United Kingdom.
|
(e)
|
The decrease is primarily a result of 2011 including higher costs related to our online customer loyalty program.
|
|
●
|
Domestic Company-owned restaurant sales increased $22.6 million, or 4.5%, in 2011 primarily due to an increase in comparable sales of 4.1%.
|
|
●
|
North America franchise royalty revenues increased approximately $4.1 million, or 5.8% in 2011 due to an increase in comparable sales of 3.1%, and an increase in the number of franchised restaurants.
|
|
●
|
Domestic commissary sales increased $53.6 million, or 11.8% in 2011 primarily due to an increase in the prices of certain commodities, most notably cheese, and an increase in sales volumes.
|
|
●
|
International revenues increased $12.1 million, or 26.1% in 2011, primarily due to an increase in the number of restaurants and an increase in comparable sales of 5.1%, calculated on a constant dollar basis. In 2010, the international segment included revenues from Company-owned restaurants located in the United Kingdom, which were sold in the third quarter of 2010.
|
Increase
|
||||||||||||
2011
|
2010
|
(Decrease)
|
||||||||||
(As Restated)
|
(As Restated)
|
|||||||||||
Domestic Company-owned restaurants
|
$ | 28,980 | $ | 31,619 | $ | (2,639 | ) | |||||
Domestic commissaries *
|
30,532 | 14,188 | 16,344 | |||||||||
North America franchising
|
66,222 | 62,229 | 3,993 | |||||||||
International
|
(165 | ) | (4,771 | ) | 4,606 | |||||||
All others
|
(441 | ) | 1,847 | (2,288 | ) | |||||||
Unallocated corporate expenses
|
(39,727 | ) | (42,237 | ) | 2,510 | |||||||
Elimination of intersegment profits
|
(610 | ) | (519 | ) | (91 | ) | ||||||
Income before income taxes, excluding BIBP
|
84,791 | 62,356 | 22,435 | |||||||||
BIBP, a variable interest entity *
|
- | 20,954 | (20,954 | ) | ||||||||
Total income before income taxes
|
$ | 84,791 | $ | 83,310 | $ | 1,481 |
*
|
The full-year 2010 results for domestic commissaries were reduced by the BIBP Settlement and the full-year 2010 results for BIBP were increased by the BIBP Settlement. There was no impact on the consolidated results of operations since PJFS and BIBP are fully consolidated into the Company’s results.
|
|
●
|
Domestic Company-owned Restaurant Segment.
Domestic Company-owned restaurants’ income before income taxes decreased $2.6 million from the prior comparable period. The decrease was due to increased commodity costs, primarily cheese, partially offset by incremental profits from higher comparable sales.
|
|
●
|
Domestic Commissary Segment.
Domestic commissaries’ income before income taxes increased $16.3 million in 2011 over the comparable 2010 period comprised of the following (in thousands):
|
Year Ended
December 25,
2011
|
Year Ended
December 26,
2010
|
Decrease
|
||||||||||
Income before income taxes, excluding the
|
||||||||||||
BIBP Settlement
|
$ | 30,532 | $ | 28,338 | $ | 2,194 | ||||||
BIBP Settlement
|
- | (14,150 | ) | 14,150 | ||||||||
Total segment income before income taxes
|
$ | 30,532 | $ | 14,188 | $ | 16,344 |
|
●
|
North America Franchising Segment.
North America franchising income before income taxes increased approximately $4.0 million in 2011 as compared to the comparable 2010 period. The increase was due to the previously mentioned royalty revenue increase.
|
|
●
|
International Segment.
The international segment reported operating losses of $165,000 in 2011 and approximately $4.8 million in 2010. The improvement in operating results of $4.6 million was primarily due to increased royalties due to growth in the number of units and a comparable sales increase of 5.1%, and improved operating results in our Beijing and North China restaurants as well as our United Kingdom commissary. Additionally, the prior year results included start-up costs associated with our Company-owned commissary in the United Kingdom that opened in 2010.
|
|
●
|
All Others Segment.
The “All others” segment reported an operating loss of approximately $400,000 in 2011, representing a decrease of approximately $2.3 million, as compared to the corresponding 2010 period. The decrease was primarily due to a decline in the operating results of our online and mobile ordering (“eCommerce”) business, partially offset by improvements in operating income at our wholly-owned print and promotions subsidiary, Preferred Marketing Solutions (“Preferred”). The decline in the operating results of our eCommerce business was primarily due to an increase in infrastructure and support costs attributable to the new online ordering system. Additionally, online revenues decreased in 2011 due to lower online and mobile fees charged.
|
|
●
|
Unallocated Corporate Segment.
Unallocated corporate expenses decreased $2.5 million in 2011, as compared to prior year. The components of unallocated corporate expenses were as follows (in thousands):
|
Year Ended
|
Year Ended
|
|||||||||||
December 25,
2011
|
December 26,
2010
|
Increase
(Decrease)
|
||||||||||
(As Restated)
|
(As Restated)
|
|||||||||||
General and administrative (a)
|
$ | 24,807 | $ | 25,823 | $ | (1,016 | ) | |||||
Net interest (b)
|
2,300 | 3,091 | (791 | ) | ||||||||
Depreciation
|
8,021 | 8,873 | (852 | ) | ||||||||
Franchise incentives and initiatives (c)
|
3,234 | 6,489 | (3,255 | ) | ||||||||
Perfect Pizza lease obligation (d)
|
832 | - | 832 | |||||||||
Other expense (income) (e)
|
533 | (2,039 | ) | 2,572 | ||||||||
Total unallocated corporate expenses
|
$ | 39,727 | $ | 42,237 | $ | (2,510 | ) |
|
(a)
|
The decrease in unallocated corporate general and administrative costs for 2011 was due to lower short- and long-term incentive compensation costs, and lower sponsorship fees, partially offset by increased travel costs.
|
|
(b)
|
The decrease in net interest expense reflects the decrease in our average outstanding debt balance and lower interest rates. This was somewhat offset by the increased interest expense in 2011 associated with the increase in redemption value of noncontrolling interest in a joint venture whose noncontrolling interest is deemed mandatorily redeemable. See “Notes 2, 3, 4 and 22” of the “Notes to Consolidated Financial Statements” for additional information.
|
|
(c)
|
In 2010, we provided discretionary contributions to the PJMF and other local advertising cooperatives. In 2011, we offered incentives to domestic franchisees for meeting certain sales targets, including driving comparable sales, transactions and online sales.
|
|
(d)
|
The Perfect Pizza lease obligation relates to rents, taxes and insurance associated with the former Perfect Pizza operations in the United Kingdom.
|
|
(e)
|
The increase in other expense (income) is primarily due to increases in our online customer loyalty program costs and disposition and valuation-related costs.
|
|
●
|
Variable Interest Entities.
BIBP generated income before income taxes of $21.0 million in 2010, which primarily consisted of the BIBP Settlement and income associated with cheese sold to domestic Company-owned and franchise restaurants of $1.7 million and $5.6 million, respectively. BIBP reported break-even results for the first two months of 2011, at which time we terminated the purchasing arrangement with BIBP. The following table summarizes the impact of BIBP prior to the required consolidating eliminations on our consolidated statements of income for the years ended December 25, 2011 and December 26, 2010 (in thousands):
|
Year Ended
|
|||||||||
December 25,
2011
|
December 26,
2010
|
||||||||
BIBP sales
|
$ | 25,117 | $ | 153,014 | |||||
Cost of sales
|
25,100 | 131,549 | |||||||
General and administrative expenses
|
17 | 91 | |||||||
Total costs and expenses
|
25,117 | 131,640 | |||||||
Operating income
|
- | 21,374 | |||||||
Interest expense
|
- | (420 | ) | ||||||
Income before income taxes (a)
|
$ | - | $ | 20,954 |
|
(a)
|
Income before income taxes for the year ended December 26, 2010, was $6.8 million, excluding the BIBP Settlement.
|
|
●
|
Cost of sales were 1.7% higher as a percentage of sales in 2011 as compared to 2010 due to the impact of higher commodities costs, principally cheese, wheat and meats.
|
|
●
|
Salaries and benefits were 0.4% lower as a percentage of sales in 2011 compared to 2010, reflecting the benefit of increased sales.
|
|
●
|
Advertising and related costs as a percentage of sales were relatively flat year-over-year.
|
|
●
|
Occupancy costs and other operating costs, on a combined basis, as a percentage of sales, were 0.4% lower in 2011 reflecting the benefit of increased sales.
|
|
●
|
Cost of sales was 0.9% higher as a percentage of revenues in 2011, as compared to 2010. Cost of sales increased primarily due to the impact of higher commodities costs, primarily cheese, wheat and meats. In addition, a reduction in online fee revenue from franchisees and an increase in eCommerce support costs contributed to the increases in cost of sales.
|
|
●
|
Salaries and benefits were 0.4% lower as a percentage of revenues in 2011, as compared to the same period of 2010, reflecting the benefit of increased sales.
|
|
●
|
Other operating expenses were 0.3% higher as a percentage of revenues in 2011, as compared to 2010, primarily due to an increase in distribution costs from increased fuel prices.
|
Increase
|
||||||||||||
2011
|
2010
|
(Decrease)
|
||||||||||
Impairment and disposition losses (a)
|
$ | 1,745 | $ | 894 | $ | 851 | ||||||
Provision (credit) for uncollectible accounts and notes receivable
|
379 | (27 | ) | 406 | ||||||||
Pre-opening restaurant costs
|
273 | 149 | 124 | |||||||||
Franchise and development incentives and initiatives (b)
|
4,921 | 7,533 | (2,612 | ) | ||||||||
Perfect Pizza lease obligation (c)
|
832 | - | 832 | |||||||||
Other (d)
|
1,617 | 481 | 1,136 | |||||||||
Total other general expenses
|
$ | 9,767 | $ | 9,030 | $ | 737 |
(a)
|
Disposition and impairment losses include costs associated with the disposition of certain systems and other equipment.
|
(b)
|
The 2010 amounts include discretionary contributions to the PJMF and other local advertising cooperatives of $6.5 million and incentives to franchisees for opening new restaurants of $1.0 million. The 2011 amounts include approximately $3.2 million in incentives offered to domestic franchisees for meeting certain sales targets, including driving comparable sales, transactions and online sales in 2011 and $1.7 million in incentives to franchisees for opening new restaurants.
|
(c)
|
The Perfect Pizza lease obligation relates to rents, taxes and insurance associated with the former Perfect Pizza operations in the United Kingdom.
|
(d)
|
Other expense increased primarily due to costs associated with our online customer loyalty program.
|
Year Ended
|
||||||||||||
Dec. 30,
|
Dec. 25,
|
Dec. 26,
|
||||||||||
2012
|
2011
|
2010
|
||||||||||
Net cash provided by operating activities
|
$ | 104,379 | $ | 101,008 | $ | 92,581 | ||||||
Gain from BIBP cheese purchasing entity
|
- | - | (6,804 | ) | ||||||||
Purchase of property and equipment
|
(42,628 | ) | (29,319 | ) | (31,125 | ) | ||||||
Free cash flow (a)
|
$ | 61,751 | $ | 71,689 | $ | 54,652 |
|
(a)
|
We define free cash flow as net cash provided by operating activities (from the consolidated statements of cash flows) excluding the impact of BIBP, less the purchases of property and equipment. See “Items Impacting Comparability; Non-GAAP Measures” for more information about this non-GAAP measure, its limitations and why we present free cash flow alongside the most directly comparable GAAP measure.
|
Fiscal
Year
|
Number of
Shares
Repurchased
|
Total Cash
Paid
|
Average
Price Per
Share
|
2010
|
1,881
|
$46,936
|
$24.95
|
2011
|
2,084
|
$65,323
|
$31.35
|
2012
|
2,276
|
$106,095
|
$46.61
|
Payments Due by Period
|
||||||||||||||||||||
Less than
1 Year
|
1-3 Years
|
3-5 Years
|
After 5
Years
|
Total
|
||||||||||||||||
Contractual Obligations:
|
||||||||||||||||||||
Revolving line of credit (1)
|
$ | - | $ | - | $ | 88,258 | $ | - | $ | 88,258 | ||||||||||
Interest payments (2)
|
1,016 | 2,032 | 788 | - | 3,836 | |||||||||||||||
Total debt
|
1,016 | 2,032 | 89,046 | - | 92,094 | |||||||||||||||
Operating leases
|
34,073 | 56,803 | 36,582 | 32,227 | 159,685 | |||||||||||||||
Total contractual obligations
|
$ | 35,089 | $ | 58,835 | $ | 125,628 | $ | 32,227 | $ | 251,779 |
(1)
|
We utilize an interest rate swap to hedge against our variable rate debt. The value of our interest rate swap was $104,000 at December 30, 2012 and was recorded in other long-term liabilities in the consolidated balance sheet.
|
(2)
|
Represents estimated interest payments on our revolving line of credit balance outstanding as of December 30, 2012. The interest payments assume the outstanding balance on our $175.0 million unsecured revolving line of credit will remain at $88.3 million until the maturity date of November 30, 2016. Interest payments are calculated based on LIBOR plus the applicable margin in effect at December 30, 2012, and considers the amended interest rate swap agreement in effect until December 30, 2015 (interest rate of 0.55%). The actual interest rates on the variable indebtedness incurred and the amount of our indebtedness could vary from those used to compute the above interest payments. See “Note 9” of “Notes to Consolidated Financial Statements” for additional information concerning our debt and credit arrangements.
|
Amount of Commitment Expiration Per Period
|
||||||||||||||||||
Less than
|
1-3 | 3-5 |
After
|
|||||||||||||||
1 Year
|
Years
|
Years
|
5 Years
|
Total
|
||||||||||||||
Other Commercial Commitments:
|
||||||||||||||||||
Standby letters of credit
|
$ |
19,931
|
$ | - | $ | - | $ |
-
|
$ |
19,931
|
|
●
|
aggressive changes in pricing or other marketing or promotional strategies by competitors which may adversely affect sales; and new product and concept developments by food industry competitors;
|
|
●
|
changes in consumer preferences and adverse general economic and political conditions, including increasing tax rates, and their resulting impact on consumer buying habits;
|
|
●
|
the impact that product recalls, food quality or safety issues, and general public health concerns could have on our restaurants;
|
|
●
|
failure to maintain our brand strength and quality reputation;
|
|
●
|
the ability of the company and its franchisees to meet planned growth targets and operate new and existing restaurants profitably, which could be impacted by challenges securing financing, finding suitable store locations or securing required domestic or foreign government permits and approvals;
|
|
●
|
increases in or sustained high costs of food ingredients and other commodities;
|
|
●
|
disruption of our supply chain due to sole or limited source of suppliers or weather, drought, disease or other disruption beyond our control;
|
|
●
|
increased risks associated with our international operations, including economic and political conditions in our international markets and difficulty in meeting planned sales targets and new store growth for our international operations;
|
|
●
|
increased employee compensation, benefits, insurance, regulatory compliance and similar costs, including increased costs resulting from federal health care legislation;
|
|
●
|
the credit performance of our franchise loan program;
|
|
●
|
the impact of the resolution of current or future claims and litigation, and current or proposed legislation impacting our business;
|
|
●
|
currency exchange and interest rates;
|
|
●
|
failure to effectively execute succession planning, and our reliance on the services of our Founder and CEO
,
who also serves as our brand spokesperson;
|
|
●
|
credit risk associated with parties to leases of restaurants and commissaries, including those Perfect Pizza locations formerly operated by us, for which we remain contractually liable; and
|
|
●
|
disruption of critical business or information technology systems, and risks associated with security breaches, including theft of company and customer information.
|
2013
|
2012
|
2011
|
2010
|
|||||||||||||||||
Projected
|
Block
|
Block
|
BIBP
|
Actual
|
||||||||||||||||
Market
|
Price
|
Price
|
Block Price
|
Block Price
|
||||||||||||||||
Quarter 1
|
$ | 1.689 | $ | 1.522 | $ | 1.695 | $ | 1.595 | $ | 1.431 | ||||||||||
Quarter 2
|
1.749 | 1.539 | 1.736 | 1.529 | 1.407 | |||||||||||||||
Quarter 3
|
1.840 | 1.750 | 2.006 | 1.572 | 1.597 | |||||||||||||||
Quarter 4
|
1.808 | 1.939 | 1.760 | 1.645 | 1.578 | |||||||||||||||
Full Year
|
$ | 1.772 | $ | 1.692 | $ | 1.799 | $ | 1.585 | $ | 1.503 |
Common
|
Accumulated
|
|||||||||||||||||||||||||||
Stock
|
Additional
|
Other
|
Total
|
|||||||||||||||||||||||||
Shares
|
Common
|
Paid-In
|
Comprehensive
|
Retained
|
Treasury
|
Stockholders’
|
||||||||||||||||||||||
(In thousands)
|
Outstanding
|
Stock
|
Capital
|
Income (Loss)
|
Earnings
|
Stock
|
Equity
|
|||||||||||||||||||||
Balance at December 27, 2009 (As Previously Reported)
|
26,930 | $ | 358 | $ | 231,720 | $ | (1,084 | ) | $ | 191,212 | $ | (245,337 | ) | $ | 176,869 | |||||||||||||
Correction of an error
|
- | - | - | - | (3,724 | ) | - | (3,724 | ) | |||||||||||||||||||
Balance at December 27, 2009 (As Restated)
|
26,930 | 358 | 231,720 | (1,084 | ) | 187,488 | (245,337 | ) | 173,145 | |||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net income, net of redeemable
|
||||||||||||||||||||||||||||
noncontrolling interests (1)
|
- | - | - | - | 52,578 | - | 52,578 | |||||||||||||||||||||
Other comprehensive income
|
- | - | - | 1,933 | - | - | 1,933 | |||||||||||||||||||||
Comprehensive income
|
54,511 | |||||||||||||||||||||||||||
Exercise of stock options
|
356 | 3 | 6,122 | - | - | 285 | 6,410 | |||||||||||||||||||||
Tax effect of equity awards
|
- | - | 62 | - | - | - | 62 | |||||||||||||||||||||
Acquisition of Company common stock
|
(1,881 | ) | - | - | - | - | (46,936 | ) | (46,936 | ) | ||||||||||||||||||
Stock-based compensation expense
|
- | - | 6,066 | - | - | - | 6,066 | |||||||||||||||||||||
Issuance of restricted stock
|
34 | - | (881 | ) | - | - | 881 | - | ||||||||||||||||||||
Other
|
- | - | 2,291 | - | - | 59 | 2,350 | |||||||||||||||||||||
Balance at December 26, 2010 (As Restated)
|
25,439 | 361 | 245,380 | 849 | 240,066 | (291,048 | ) | 195,608 | ||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net income, net of redeemable
|
||||||||||||||||||||||||||||
noncontrolling interests (1)
|
- | - | - | - | 54,735 | - | 54,735 | |||||||||||||||||||||
Other comprehensive income
|
- | - | - | 1,000 | - | - | 1,000 | |||||||||||||||||||||
Comprehensive income
|
55,735 | |||||||||||||||||||||||||||
Exercise of stock options
|
572 | 6 | 14,036 | - | - | - | 14,042 | |||||||||||||||||||||
Tax effect of equity awards
|
- | - | (1,400 | ) | - | - | - | (1,400 | ) | |||||||||||||||||||
Acquisition of Company common stock
|
(2,084 | ) | - | - | - | - | (65,323 | ) | (65,323 | ) | ||||||||||||||||||
Stock-based compensation expense
|
- | - | 6,704 | - | - | - | 6,704 | |||||||||||||||||||||
Issuance of restricted stock
|
92 | - | (2,253 | ) | - | - | 2,253 | - | ||||||||||||||||||||
Other
|
- | - | (11 | ) | - | - | 292 | 281 | ||||||||||||||||||||
Balance at December 25, 2011 (As Restated)
|
24,019 | 367 | 262,456 | 1,849 | 294,801 | (353,826 | ) | 205,647 | ||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net income, net of redeemable
|
||||||||||||||||||||||||||||
noncontrolling interests (1)
|
- | - | - | - | 61,660 | - | 61,660 | |||||||||||||||||||||
Other comprehensive income
|
- | - | - | (25 | ) | - | - | (25 | ) | |||||||||||||||||||
Comprehensive income
|
61,635 | |||||||||||||||||||||||||||
Exercise of stock options
|
432 | 4 | 12,260 | - | - | - | 12,264 | |||||||||||||||||||||
Tax effect of equity awards
|
- | - | 933 | - | - | - | 933 | |||||||||||||||||||||
Acquisition of Company common stock
|
(2,276 | ) | - | - | - | - | (106,095 | ) | (106,095 | ) | ||||||||||||||||||
Stock-based compensation expense
|
- | - | 6,905 | - | - | - | 6,905 | |||||||||||||||||||||
Issuance of restricted stock
|
66 | - | (1,582 | ) | - | - | 1,582 | - | ||||||||||||||||||||
Other
|
- | - | (67 | ) | - | - | 292 | 225 | ||||||||||||||||||||
Balance at December 30, 2012
|
22,241 | $ | 371 | $ | 280,905 | $ | 1,824 | $ | 356,461 | $ | (458,047 | ) | $ | 181,514 |
(1)
|
Net income at December 30, 2012, December 25, 2011 and December 26, 2010 excludes $4,342, $3,732 and $3,485, respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements.
|
●
|
Level 1: Quoted market prices in active markets for identical assets or liabilities.
|
●
|
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
|
●
|
Level 3: Unobservable inputs that are not corroborated by market data.
|
2012
|
2011
|
2010
|
||||||||||
Basic earnings per common share:
|
(As Restated)
|
(As Restated)
|
||||||||||
Net income, net of redeemable noncontrolling interests
|
$ | 61,660 | $ | 54,735 | $ | 52,578 | ||||||
Weighted average shares outstanding
|
23,458 | 25,043 | 26,328 | |||||||||
Basic earnings per common share
|
$ | 2.63 | $ | 2.19 | $ | 2.00 | ||||||
Earnings per common share - assuming dilution:
|
||||||||||||
Net income, net of redeemable noncontrolling interests
|
$ | 61,660 | $ | 54,735 | $ | 52,578 | ||||||
Weighted average shares outstanding
|
23,458 | 25,043 | 26,328 | |||||||||
Dilutive effect of outstanding equity awards
|
447 | 267 | 140 | |||||||||
Diluted weighted average shares outstanding
|
23,905 | 25,310 | 26,468 | |||||||||
Earnings per common share - assuming dilution
|
$ | 2.58 | $ | 2.16 | $ | 1.99 |
December 25, 2011
|
||||||||||||
As Previously
Reported
|
Adjustments
|
As Restated
|
||||||||||
Consolidated balance sheet
|
||||||||||||
Noncurrent deferred income tax liabilities
|
$ | 9,147 | $ | (2,455 | ) | $ | 6,692 | |||||
Other long-term liabilities
|
25,611 | 11,065 | 36,676 | |||||||||
Redeemable noncontrolling interests
|
- | 3,965 | 3,965 | |||||||||
Retained earnings
|
298,807 | (4,006 | ) | 294,801 | ||||||||
Noncontrolling interests in subsidiaries
|
8,569 | (8,569 | ) | - | ||||||||
Total stockholders' equity
|
218,222 | (12,575 | ) | 205,647 | ||||||||
Consolidated statement of income
|
||||||||||||
Interest expense
|
$ | 1,497 | $ | 1,484 | $ | 2,981 | ||||||
Income before income taxes
|
86,275 | (1,484 | ) | 84,791 | ||||||||
Income tax expense
|
26,888 | (564 | ) | 26,324 | ||||||||
Net income, including noncontrolling interests
|
59,387 | (920 | ) | 58,467 | ||||||||
Net income, net of noncontrolling interests
|
55,655 | (920 | ) | 54,735 | ||||||||
Comprehensive income | 60,387 | (920 | ) | 59,467 | ||||||||
Basic earnings per common share
|
2.22 | (0.03 | ) | 2.19 | ||||||||
Earnings per common share - assuming dilution
|
2.20 | (0.04 | ) | 2.16 | ||||||||
Consolidated statement of cash flows
|
||||||||||||
Net income
|
$ | 59,387 | $ | (920 | ) | $ | 58,467 | |||||
Deferred income taxes
|
9,909 | (564 | ) | 9,345 | ||||||||
Other
|
3,072 | 1,484 | 4,556 | |||||||||
Net cash provided by operating activities
|
101,008 | - | 101,008 |
December 26, 2010
|
||||||||||||
As Previously Reported
|
Adjustments
|
As Restated
|
||||||||||
Consolidated balance sheet
|
||||||||||||
Noncurrent deferred income tax liabilities (assets)
|
$ | 341 | $ | (1,892 | ) | $ | (1,551 | ) | ||||
Other long-term liabilities
|
26,604 | 9,972 | 36,576 | |||||||||
Redeemable noncontrolling interests
|
- | 3,512 | 3,512 | |||||||||
Retained earnings
|
243,152 | (3,086 | ) | 240,066 | ||||||||
Noncontrolling interests in subsidiaries
|
8,506 | (8,506 | ) | - | ||||||||
Total stockholders' equity
|
207,200 | (11,592 | ) | 195,608 | ||||||||
Consolidated statement of income
|
||||||||||||
Interest expense
|
$ | 5,338 | $ | (1,029 | ) | $ | 4,309 | |||||
Income before income taxes
|
82,281 | 1,029 | 83,310 | |||||||||
Income tax expense
|
26,856 | 391 | 27,247 | |||||||||
Net income, including noncontrolling interests
|
55,425 | 638 | 56,063 | |||||||||
Net income, net of noncontrolling interests
|
51,940 | 638 | 52,578 | |||||||||
Comprehensive income | 57,358 | 638 | 57,996 | |||||||||
Basic earnings per common share
|
1.97 | 0.03 | 2.00 | |||||||||
Earnings per common share - assuming dilution
|
1.96 | 0.03 | 1.99 | |||||||||
Consolidated statement of cash flows
|
||||||||||||
Net income
|
$ | 55,425 | $ | 638 | $ | 56,063 | ||||||
Deferred income taxes
|
4,553 | 391 | 4,944 | |||||||||
Other
|
286 | (1,029 | ) | (743 | ) | |||||||
Net cash provided by operating activities
|
92,581 | - | 92,581 |
December 27, 2009
|
||||||||||||
As Previously Reported
|
Adjustments
|
As Restated
|
||||||||||
Consolidated statement of stockholders' equity
|
||||||||||||
Retained earnings
|
$ | 191,212 | $ | (3,724 | ) | $ | 187,488 | |||||
Noncontrolling interests in subsidiaries
|
8,168 | (8,168 | ) | - | ||||||||
Total stockholders' equity
|
185,037 | (11,892 | ) | 173,145 |
Redeemable
|
|||||||||||||
Noncontrolling
|
|||||||||||||
Number of
|
Restaurant
|
Papa John's
|
Interest
|
||||||||||
Restaurants
|
Locations
|
Ownership
|
Ownership
|
||||||||||
December 30, 2012
|
|||||||||||||
Star Papa, LP
|
78 |
Texas
|
51 | % | 49 | % | |||||||
Colonel's Limited, LLC
|
52 |
Maryland and Virginia
|
70 | % | 30 | % | |||||||
PJ Minnesota, LLC
|
30 |
Minnesota
|
80 | % | 20 | % | |||||||
PJ Denver, LLC
|
22 |
Colorado
|
60 | % | 40 | % | |||||||
December 25, 2011
|
|||||||||||||
Star Papa, LP
|
76 |
Texas
|
51 | % | 49 | % | |||||||
Colonel's Limited, LLC
|
52 |
Maryland and Virginia
|
70 | % | 30 | % | |||||||
December 26, 2010
|
|||||||||||||
Star Papa, LP
|
75 |
Texas
|
51 | % | 49 | % | |||||||
Colonel's Limited, LLC
|
52 |
Maryland and Virginia
|
70 | % | 30 | % |
Year Ended
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
Papa John's International, Inc.
|
$ | 6,823 | $ | 6,184 | $ | 5,658 | ||||||
Redeemable noncontrolling interests
|
4,342 | 3,732 | 3,485 | |||||||||
Total income before income tax
|
$ | 11,165 | $ | 9,916 | $ | 9,143 |
Property and equipment
|
$ | 1,602 | ||
Reacquired franchise right
|
245 | |||
Goodwill
|
3,830 | |||
Other, including cash
|
239 | |||
Total purchase price
|
$ | 5,916 |
Domestic
Company-
owned
Restaurants
|
International (a)
|
All
Others
|
Total
|
|||||||||||||
Balance as of December 26, 2010
|
$ | 55,260 | $ | 19,001 | $ | 436 | 74,697 | |||||||||
Foreign currency adjustments
|
- | 388 | - | 388 | ||||||||||||
Balance as of December 25, 2011
|
55,260 | 19,389 | 436 | 75,085 | ||||||||||||
Acquisitions (b)
|
3,943 | - | - | 3,943 | ||||||||||||
Divestitures
|
(636 | ) | - | - | (636 | ) | ||||||||||
Foreign currency adjustments
|
- | 566 | - | 566 | ||||||||||||
Balance as of December 30, 2012
|
$ | 58,567 | $ | 19,955 | $ | 436 | $ | 78,958 |
(a)
|
The international goodwill balances for all years presented are net of accumulated impairment of $2.3 million associated with our PJUK reporting unit, which was recorded in fiscal 2008.
|
(b)
|
Includes 56 restaurants located in the Denver and Minneapolis markets and one restaurant in another market.
|
2012
|
2011
|
2010
|
||||||||||
Net book value of divested restaurants
|
$ | 1,219 | $ | - | $ | 2,828 | ||||||
Cash proceeds received
|
908 | - | 1,397 | |||||||||
Fair value of notes receivable (1)
|
160 | - | 1,431 | |||||||||
Total consideration at fair value (1)
|
1,068 | - | 2,828 | |||||||||
Loss on restaurants sold
|
151 | - | - | |||||||||
Loss (gain) on domestic restaurant closures
|
125 | (203 | ) | 95 | ||||||||
Adjustment to long-lived asset impairment reserves
|
- | 117 | 158 | |||||||||
Total restaurant impairment and disposition losses (gains)
|
$ | 276 | $ | (86 | ) | $ | 253 |
(1)
|
We sold 12 Company-owned restaurants to franchisees in both 2012 and 2010 (none in 2011). As a part of the agreements to sell the restaurants, we received notes totaling $160,000 in 2012 and $1.4 million in 2010.
|
Effect of Derivative Instruments on the Consolidated Financial Statements
|
||||||||||||||
Derivatives -
Cash Flow
Hedging
Relationships
|
Amount of Gain
or (Loss)
Recognized in
Accumulated
OCI on
Derivative
(Effective
Portion)
|
Location of Gain
or (Loss)
Reclassified
from
Accumulated
OCI into Income
(Effective
Portion)
|
Amount of Gain
or (Loss)
Reclassified
from
Accumulated
OCI into Income
(Effective
Portion)
|
Location of Gain
or (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion and
Amount
Excluded from
Effectiveness
Testing)
|
Amount of Gain
or (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion and
Amount
Excluded from
Effectiveness
Testing)
|
|||||||||
Interest rate swaps:
|
||||||||||||||
2012
|
$ | (72 | ) |
Interest expense
|
$ | (150 | ) |
Interest expense
|
$ | - | ||||
2011
|
$ | 165 |
Interest expense
|
$ | (341 | ) |
Interest expense
|
$ | 65 | |||||
2010
|
$ | 2,404 |
Interest expense
|
$ | (4,131 | ) |
Interest expense
|
$ | (25 | ) |
2012
|
2011
|
|||||||
Land
|
$ | 32,776 | $ | 32,735 | ||||
Buildings and improvements
|
86,219 | 85,907 | ||||||
Leasehold improvements
|
96,652 | 90,855 | ||||||
Equipment and other
|
249,055 | 231,059 | ||||||
Construction in progress
|
23,262 | 5,159 | ||||||
Total property and equipment
|
487,964 | 445,715 | ||||||
Less accumulated depreciation and amortization
|
(291,303 | ) | (263,805 | ) | ||||
Net property and equipment
|
$ | 196,661 | $ | 181,910 |
Balance as of December 26, 2010
|
$ | 9,951 | ||
Recovered from costs and expenses
|
(35 | ) | ||
Deductions, including notes written off
|
(4,011 | ) | ||
Balance as of December 25, 2011
|
5,905 | |||
Charged to costs and expenses
|
280 | |||
Deductions, including notes written off
|
(1,157 | ) | ||
Balance as of December 30, 2012
|
$ | 5,028 |
Balance as of December 26, 2010
|
$ | 18,987 | ||
Expense
|
20,668 | |||
Payments
|
(20,377 | ) | ||
Balance as of December 25, 2011
|
19,278 | |||
Expense
|
27,728 | |||
Payments
|
(24,703 | ) | ||
Balance as of December 30, 2012
|
$ | 22,303 |
2012
|
2011
|
|||||||
Salaries, benefits and bonuses
|
$ | 22,370 | $ | 13,982 | ||||
Insurance reserves, current
|
11,532 | 9,215 | ||||||
Purchases
|
9,903 | 4,764 | ||||||
Rent
|
6,314 | 6,242 | ||||||
Consulting and professional fees
|
1,766 | 1,911 | ||||||
Utilities
|
1,240 | 1,420 | ||||||
Customer loyalty program
|
1,137 | 1,339 | ||||||
Marketing
|
1,079 | 635 | ||||||
Other
|
5,187 | 4,690 | ||||||
Total
|
$ | 60,528 | $ | 44,198 |
2012
|
2011
|
|||||||
(As Restated)
|
||||||||
Deferred compensation plan
|
$ | 12,775 | $ | 10,793 | ||||
Mandatorily redeemable noncontrolling interests
|
11,837 | 11,065 | ||||||
Insurance reserves
|
10,771 | 10,063 | ||||||
Other
|
5,291 | 4,755 | ||||||
Total
|
$ | 40,674 | $ | 36,676 |
2012
|
2011
|
2010
|
||||||||||
Current:
|
(As Restated)
|
(As Restated)
|
||||||||||
Federal
|
$ | 26,065 | $ | 14,383 | $ | 19,049 | ||||||
Foreign
|
1,669 | 1,273 | 1,171 | |||||||||
State and local
|
2,624 | 850 | 2,083 | |||||||||
Deferred (federal and state)
|
2,035 | 9,818 | 4,944 | |||||||||
Total
|
$ | 32,393 | $ | 26,324 | $ | 27,247 |
2012
|
2011
|
|||||
(As Restated)
|
||||||
Accrued liabilities
|
$ |
10,412
|
$ |
7,604
|
||
Accrued bonuses
|
5,365
|
2,447
|
||||
Other assets and liabilities
|
11,492
|
12,140
|
||||
Stock options
|
5,377
|
5,091
|
||||
Other
|
4,643
|
4,704
|
||||
Foreign net operating losses
|
7,896
|
7,474
|
||||
Valuation allowance on foreign net operating
|
||||||
losses and foreign deferred tax assets
|
(8,240)
|
(7,474)
|
||||
Total deferred tax assets
|
36,945
|
31,986
|
||||
Deferred expenses
|
(4,581)
|
(3,497)
|
||||
Accelerated depreciation
|
(15,966)
|
(13,477)
|
||||
Goodwill
|
(12,269)
|
(10,426)
|
||||
Other
|
(4,522)
|
(3,642)
|
||||
Total deferred tax liabilities
|
(37,338)
|
(31,042)
|
||||
Net deferred (liability) asset
|
$ |
(393)
|
$ |
944
|
2012
|
2011
|
2010
|
||||||||||||||||||||||
Income Tax
Expense
|
Income
Tax Rate
|
Income Tax
Expense
|
Income
Tax Rate
|
Income Tax
Expense
|
Income
Tax Rate
|
|||||||||||||||||||
(As Restated)
|
(As Restated)
|
|||||||||||||||||||||||
Tax at U.S. federal statutory rate
|
$ | 34,438 | 35.0 | % | $ | 29,677 | 35.0 | % | $ | 29,159 | 35.0 | % | ||||||||||||
State and local income taxes
|
1,936 | 2.0 | % | 1,702 | 2.0 | % | 1,896 | 2.3 | % | |||||||||||||||
Foreign income taxes
|
1,669 | 1.7 | % | 1,273 | 1.5 | % | 1,171 | 1.4 | % | |||||||||||||||
Settlement of certain tax issues
|
(738 | ) | (0.8 | %) | (1,912 | ) | (2.3 | %) | (550 | ) | (0.7 | %) | ||||||||||||
Income of consolidated partnerships attributable
|
||||||||||||||||||||||||
to redeemable noncontrolling interests
|
(1,604 | ) | (1.6 | %) | (1,379 | ) | (1.6 | %) | (1,297 | ) | (1.6 | %) | ||||||||||||
Non-qualified deferred compensation
|
||||||||||||||||||||||||
plan (income) loss
|
(355 | ) | (0.4 | %) | 153 | 0.2 | % | (434 | ) | (0.5 | %) | |||||||||||||
Tax credits and other
|
(2,953 | ) | (3.0 | %) | (3,190 | ) | (3.8 | %) | (2,698 | ) | (3.2 | %) | ||||||||||||
Total
|
$ | 32,393 | 32.9 | % | $ | 26,324 | 31.0 | % | $ | 27,247 | 32.7 | % |
Balance at December 26, 2010
|
$ | 3,331 | ||
Reductions for tax positions of prior years
|
(95 | ) | ||
Reductions for lapse of statute of limitations
|
(248 | ) | ||
Balance at December 25, 2011
|
2,988 | |||
Additions for tax positions of prior years
|
664 | |||
Reductions for lapse of statute of limitations
|
(222 | ) | ||
Balance at December 30, 2012
|
$ | 3,430 |
2012
|
2011
|
2010
|
||||||||||
Revenues from affiliates:
|
||||||||||||
Commissary sales
|
$ | 23,145 | $ | 22,132 | $ | 19,137 | ||||||
Other sales
|
2,394 | 2,352 | 1,961 | |||||||||
Franchise royalties
|
3,771 | 3,579 | 3,192 | |||||||||
Franchise and development fees
|
- | 15 | - | |||||||||
Total
|
$ | 29,310 | $ | 28,078 | $ | 24,290 | ||||||
Accounts receivable - affiliates
|
$ | 1,062 | $ | 682 | $ | 624 |
Future
|
||||||||||||
Expected
|
||||||||||||
Gross Lease
|
Sublease
|
Net Lease
|
||||||||||
Year
|
Costs
|
Payments
|
Costs
|
|||||||||
2013
|
$ | 34,073 | $ | 3,740 | $ | 30,333 | ||||||
2014
|
30,614 | 3,573 | 27,041 | |||||||||
2015
|
26,189 | 3,339 | 22,850 | |||||||||
2016
|
21,012 | 3,050 | 17,962 | |||||||||
2017
|
15,570 | 2,933 | 12,637 | |||||||||
Thereafter
|
32,227 | 16,397 | 15,830 | |||||||||
Total
|
$ | 159,685 | $ | 33,032 | $ | 126,653 |
Weighted
|
||||||||||||||||
Weighted
|
Average
|
|||||||||||||||
Number
|
Average
|
Remaining
|
Aggregate
|
|||||||||||||
of
|
Exercise
|
Contractual
|
Intrinsic
|
|||||||||||||
Options
|
Price
|
Term
|
Value
|
|||||||||||||
Outstanding at December 25, 2011
|
1,428 | $ | 27.19 | |||||||||||||
Granted
|
254 | 37.29 | ||||||||||||||
Exercised
|
(432 | ) | 28.36 | |||||||||||||
Cancelled
|
(50 | ) | 30.62 | |||||||||||||
Outstanding at December 30, 2012
|
1,200 | $ | 28.78 | 3.43 | $ | 28,938 | ||||||||||
Vested or expected to vest at December 30, 2012
|
1,167 | $ | 28.59 | 3.51 | $ | 28,152 | ||||||||||
Exercisable at December 30, 2012
|
652 | $ | 25.67 | 1.52 | $ | 17,748 |
2012
|
2011
|
2010
|
||||||||||
Assumptions (weighted average):
|
||||||||||||
Risk-free interest rate
|
1.1 | % | 1.5 | % | 1.8 | % | ||||||
Expected dividend yield
|
0.0 | % | 0.0 | % | 0.0 | % | ||||||
Expected volatility
|
37.8 | % | 41.2 | % | 42.5 | % | ||||||
Expected term (in years)
|
6.0 | 3.7 | 3.7 |
Weighted
|
||||||||
Average
|
||||||||
Grant-Date
|
||||||||
Shares
|
Fair Value
|
|||||||
Total as of December 27, 2009
|
270 | $ | 28.34 | |||||
Granted
|
171 | 27.13 | ||||||
Forfeited
|
(123 | ) | 30.77 | |||||
Vested
|
(34 | ) | 26.40 | |||||
Total as of December 26, 2010
|
284 | 26.62 | ||||||
Granted
|
160 | 29.07 | ||||||
Forfeited
|
(78 | ) | 26.99 | |||||
Vested
|
(116 | ) | 27.27 | |||||
Total as of December 25, 2011
|
250 | 28.19 | ||||||
Granted
|
133 | 37.18 | ||||||
Forfeited
|
(37 | ) | 30.92 | |||||
Vested
|
(78 | ) | 27.77 | |||||
Total as of December 30, 2012
|
268 | $ | 32.39 |
(In thousands)
|
2012
|
2011
|
2010
|
|||||||||
(As Restated)
|
(As Restated)
|
|||||||||||
Revenues from external customers:
|
||||||||||||
Domestic Company-owned restaurants
|
$ | 592,203 | $ | 525,841 | $ | 503,272 | ||||||
Domestic commissaries
|
545,924 | 508,155 | 454,506 | |||||||||
North America franchising
|
80,373 | 74,416 | 70,241 | |||||||||
International
|
72,930 | 58,558 | 46,427 | |||||||||
All others
|
51,223 | 50,912 | 51,951 | |||||||||
Total revenues from external customers
|
$ | 1,342,653 | $ | 1,217,882 | $ | 1,126,397 | ||||||
Intersegment revenues:
|
||||||||||||
Domestic commissaries
|
$ | 171,212 | $ | 151,423 | $ | 135,005 | ||||||
North America franchising
|
2,267 | 2,163 | 2,045 | |||||||||
International
|
229 | 215 | 909 | |||||||||
Variable interest entities (1)
|
- | 25,117 | 153,014 | |||||||||
All others
|
11,606 | 10,468 | 12,061 | |||||||||
Total intersegment revenues
|
$ | 185,314 | $ | 189,386 | $ | 303,034 | ||||||
Depreciation and amortization:
|
||||||||||||
Domestic Company-owned restaurants
|
$ | 13,242 | $ | 12,965 | $ | 13,155 | ||||||
Domestic commissaries
|
4,738 | 4,633 | 4,522 | |||||||||
International
|
2,824 | 2,398 | 2,368 | |||||||||
All others
|
4,801 | 4,663 | 3,489 | |||||||||
Unallocated corporate expenses
|
7,193 | 8,022 | 8,873 | |||||||||
Total depreciation and amortization
|
$ | 32,798 | $ | 32,681 | $ | 32,407 | ||||||
Income (loss) before income taxes:
|
||||||||||||
Domestic Company-owned restaurants
|
$ | 38,114 | $ | 28,980 | $ | 31,619 | ||||||
Domestic commissaries (2)
|
34,317 | 30,532 | 14,188 | |||||||||
North America franchising
|
69,332 | 66,222 | 62,229 | |||||||||
International
|
3,063 | (165 | ) | (4,771 | ) | |||||||
Variable interest entities (3)
|
- | - | 20,954 | |||||||||
All others
|
2,889 | (441 | ) | 1,847 | ||||||||
Unallocated corporate expenses
|
(48,958 | ) | (39,727 | ) | (42,237 | ) | ||||||
Elimination of intersegment profits
|
(362 | ) | (610 | ) | (519 | ) | ||||||
Total income before income taxes
|
$ | 98,395 | $ | 84,791 | $ | 83,310 |
(1)
|
The intersegment revenues for variable interest entities of $25.1 million in 2011 and $153.0 million in 2010 are attributable to BIBP.
|
(2)
|
The 2010 operating income for domestic commissaries includes an increase in cost of sales of $14.2 million associated with PJFS’s agreement to pay to BIBP for past cheese purchases an amount equal to its accumulated deficit.
|
(3)
|
Represents BIBP’s income before income taxes, net of noncontrolling interest income, for each year. The 2010 income before income taxes for BIBP includes a reduction in BIBP’s cost of sales of $14.2 million associated with PJFS’s agreement to pay to BIBP for past cheese purchases an amount equal to its accumulated deficit.
|
(In thousands)
|
2012
|
2011
|
2010
|
|||||||||
Property and equipment:
|
||||||||||||
Domestic Company-owned restaurants
|
$ | 184,322 | $ | 176,506 | $ | 165,434 | ||||||
Domestic commissaries
|
101,082 | 85,714 | 82,162 | |||||||||
International
|
22,389 | 17,413 | 17,574 | |||||||||
All others
|
37,221 | 33,984 | 32,335 | |||||||||
Unallocated corporate assets
|
142,950 | 132,098 | 127,184 | |||||||||
Accumulated depreciation and amortization
|
(291,303 | ) | (263,805 | ) | (239,318 | ) | ||||||
Net property and equipment
|
$ | 196,661 | $ | 181,910 | $ | 185,371 | ||||||
Expenditures for property and equipment:
|
||||||||||||
Domestic Company-owned restaurants
|
$ | 9,319 | $ | 14,094 | $ | 9,124 | ||||||
Domestic commissaries
|
14,314 | 5,612 | 2,795 | |||||||||
International
|
4,865 | 1,733 | 4,835 | |||||||||
All others
|
3,342 | 1,792 | 8,151 | |||||||||
Unallocated corporate
|
10,788 | 6,088 | 6,220 | |||||||||
Total expenditures for property and equipment
|
$ | 42,628 | $ | 29,319 | $ | 31,125 |
Quarter
|
||||||||||||||||
2012
|
1st
|
2nd
|
3rd
|
4th
|
||||||||||||
(As Restated)
|
(As Restated)
|
(As Restated)
|
||||||||||||||
Total revenues (a)
|
$ | 331,276 | $ | 318,579 | $ | 325,514 | $ | 367,284 | ||||||||
Operating income (a)
|
27,256 | 24,327 | 21,205 | 27,019 | ||||||||||||
Net income
|
16,981 | 14,289 | 13,031 | 17,359 | ||||||||||||
Basic earnings per common share
|
$ | 0.71 | $ | 0.60 | $ | 0.56 | $ | 0.76 | ||||||||
Earnings per common share - assuming dilution
|
$ | 0.69 | $ | 0.59 | $ | 0.55 | $ | 0.74 | ||||||||
Quarter
|
||||||||||||||||
2011
|
1st
|
2nd
|
3rd
|
4th
|
||||||||||||
(As Restated)
|
(As Restated)
|
(As Restated)
|
(As Restated)
|
|||||||||||||
Total revenues (a)
|
$ | 312,467 | $ | 293,534 | $ | 305,668 | $ | 306,213 | ||||||||
Operating income (a)
|
27,211 | 19,155 | 16,958 | 23,693 | ||||||||||||
Net income
|
15,976 | 12,068 | 10,800 | 15,891 | (b) | |||||||||||
Basic earnings per common share
|
$ | 0.63 | $ | 0.47 | $ | 0.43 | $ | 0.66 | ||||||||
Earnings per common share - assuming dilution
|
$ | 0.62 | $ | 0.47 | $ | 0.43 | $ | 0.65 |
As of and For The
|
||||||||
Three Months Ended
|
||||||||
March 25, 2012
|
||||||||
As
Previously
Reported
|
As Restated
|
|||||||
Condensed consolidated balance sheet
|
||||||||
Noncurrent deferred income tax liabilities
|
$ | 7,264 | $ | 4,954 | ||||
Other long-term liabilities
|
23,795 | 34,992 | ||||||
Redeemable noncontrolling interests
|
- | 4,777 | ||||||
Retained earnings
|
315,551 | 311,782 | ||||||
Noncontrolling interests in subsidiaries
|
9,895 | - | ||||||
Total stockholders' equity
|
227,835 | 214,171 | ||||||
Condensed consolidated statement of comprehensive income
|
||||||||
Interest expense (income)
|
$ | 288 | $ | (94 | ) | |||
Income before income taxes
|
27,138 | 27,520 | ||||||
Income tax expense
|
9,068 | 9,213 | ||||||
Net income, including noncontrolling interests
|
18,070 | 18,307 | ||||||
Net income, net of noncontrolling interests
|
16,744 | 16,981 | ||||||
Comprehensive income
|
18,281 | 18,518 | ||||||
Basic earnings per common share
|
0.70 | 0.71 | ||||||
Earnings per common share - assuming dilution
|
0.69 | 0.69 | ||||||
Consolidated statement of cash flows
|
||||||||
Net income, including noncontrolling interests
|
$ | 18,070 | $ | 18,307 | ||||
Deferred income taxes
|
(1,057 | ) | (912 | ) | ||||
Other
|
678 | 296 | ||||||
Net cash provided by operating activities
|
44,093 | 44,093 |
As of and For The
|
As of and For The
|
|||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 24, 2012
|
June 24, 2012
|
|||||||||||||||
As
Previously
Reported
|
As Restated
|
As
Previously
Reported
|
As Restated
|
|||||||||||||
Condensed consolidated balance sheet
|
||||||||||||||||
Noncurrent deferred income tax liabilities
|
$ | 9,648 | $ | 7,044 | $ | 9,648 | $ | 7,044 | ||||||||
Other long-term liabilities
|
23,638 | 35,170 | 23,638 | 35,170 | ||||||||||||
Redeemable noncontrolling interests
|
- | 4,458 | - | 4,458 | ||||||||||||
Retained earnings
|
330,320 | 326,071 | 330,320 | 326,071 | ||||||||||||
Noncontrolling interests in subsidiaries
|
9,137 | - | 9,137 | - | ||||||||||||
Total stockholders' equity
|
225,546 | 212,160 | 225,546 | 212,160 | ||||||||||||
Condensed consolidated statements of comprehensive income
|
||||||||||||||||
Interest expense
|
$ | 282 | $ | 1,056 | $ | 570 | $ | 962 | ||||||||
Income before income taxes
|
24,240 | 23,466 | 51,378 | 50,986 | ||||||||||||
Income tax expense
|
8,299 | 8,005 | 17,367 | 17,218 | ||||||||||||
Net income, including noncontrolling interests
|
15,941 | 15,461 | 34,011 | 33,768 | ||||||||||||
Net income, net of noncontrolling interests
|
14,769 | 14,289 | 31,513 | 31,270 | ||||||||||||
Comprehensive income
|
15,490 | 15,010 | 33,771 | 33,528 | ||||||||||||
Basic earnings per common share
|
0.62 | 0.60 | 1.32 | 1.31 | ||||||||||||
Earnings per common share - assuming dilution
|
0.61 | 0.59 | 1.30 | 1.29 | ||||||||||||
Consolidated statement of cash flows
|
||||||||||||||||
Net income, including noncontrolling interests
|
$ | 34,011 | $ | 33,768 | ||||||||||||
Deferred income taxes
|
1,946 | 1,797 | ||||||||||||||
Other
|
2,480 | 2,872 | ||||||||||||||
Net cash provided by operating activities
|
65,162 | 65,162 |
As of and For The
|
As of and For The
|
|||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 23, 2012
|
September 23, 2012
|
|||||||||||||||
As
Previously
Reported
|
As Restated
|
As
Previously
Reported
|
As Restated
|
|||||||||||||
Condensed consolidated balance sheet
|
||||||||||||||||
Noncurrent deferred income tax liabilities
|
$ | 10,508 | $ | 7,830 | $ | 10,508 | $ | 7,830 | ||||||||
Other long-term liabilities
|
24,611 | 36,269 | 24,611 | 36,269 | ||||||||||||
Redeemable noncontrolling interests
|
- | 4,820 | - | 4,820 | ||||||||||||
Retained earnings
|
343,471 | 339,101 | 343,471 | 339,101 | ||||||||||||
Noncontrolling interests in subsidiaries
|
9,430 | - | 9,430 | - | ||||||||||||
Total stockholders' equity
|
217,806 | 204,006 | 217,806 | 204,006 | ||||||||||||
Condensed consolidated statements of comprehensive income
|
||||||||||||||||
Interest expense
|
$ | 284 | $ | 478 | $ | 854 | $ | 1,440 | ||||||||
Income before income taxes
|
21,057 | 20,863 | 72,435 | 71,849 | ||||||||||||
Income tax expense
|
7,112 | 7,038 | 24,479 | 24,256 | ||||||||||||
Net income, including noncontrolling interests
|
13,945 | 13,825 | 47,956 | 47,593 | ||||||||||||
Net income, net of noncontrolling interests
|
13,151 | 13,031 | 44,664 | 44,301 | ||||||||||||
Comprehensive income
|
15,192 | 15,072 | 48,963 | 48,600 | ||||||||||||
Basic earnings per common share
|
0.57 | 0.56 | 1.89 | 1.87 | ||||||||||||
Earnings per common share - assuming dilution
|
0.55 | 0.55 | 1.85 | 1.84 | ||||||||||||
Consolidated statement of cash flows
|
||||||||||||||||
Net income, including noncontrolling interests
|
$ | 47,956 | $ | 47,593 | ||||||||||||
Deferred income taxes
|
647 | 424 | ||||||||||||||
Other
|
3,789 | 4,375 | ||||||||||||||
Net cash provided by operating activities
|
94,773 | 94,773 |
As of and For The
|
||||||||
Three Months Ended
|
||||||||
March 27, 2011
|
||||||||
As
Previously
Reported
|
As Restated
|
|||||||
Condensed consolidated balance sheet
|
||||||||
Noncurrent deferred income tax liabilities (assets)
|
$ | 1,138 | $ | (1,030 | ) | |||
Other long-term liabilities
|
12,219 | 22,677 | ||||||
Redeemable noncontrolling interests
|
- | 3,146 | ||||||
Retained earnings
|
259,579 | 256,042 | ||||||
Noncontrolling interests in subsidiaries
|
7,899 | - | ||||||
Total stockholders' equity
|
223,416 | 211,980 | ||||||
Condensed consolidated statement of comprehensive income
|
||||||||
Interest expense
|
$ | 608 | $ | 1,335 | ||||
Income before income taxes
|
26,780 | 26,053 | ||||||
Income tax expense
|
9,231 | 8,955 | ||||||
Net income, including noncontrolling interests
|
17,549 | 17,098 | ||||||
Net income, net of noncontrolling interests
|
16,427 | 15,976 | ||||||
Comprehensive income
|
18,822 | 18,371 | ||||||
Basic earnings per common share
|
0.64 | 0.63 | ||||||
Earnings per common share - assuming dilution
|
0.64 | 0.62 | ||||||
Consolidated statement of cash flows
|
||||||||
Net income, including noncontrolling interests
|
$ | 17,549 | $ | 17,098 | ||||
Deferred income taxes
|
2,664 | 2,388 | ||||||
Other
|
43 | 770 | ||||||
Net cash provided by operating activities
|
26,687 | 26,687 |
As of and For The
|
As of and For The
|
|||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 26, 2011
|
June 26, 2011
|
|||||||||||||||
As
Previously
Reported
|
As Restated
|
As
Previously
Reported
|
As Restated
|
|||||||||||||
Condensed consolidated balance sheet
|
||||||||||||||||
Noncurrent deferred income tax liabilities
|
$ | 3,485 | $ | 1,283 | $ | 3,485 | $ | 1,283 | ||||||||
Other long-term liabilities
|
12,478 | 23,153 | 12,478 | 23,153 | ||||||||||||
Redeemable noncontrolling interests
|
- | 3,648 | - | 3,648 | ||||||||||||
Retained earnings
|
271,703 | 268,110 | 271,703 | 268,110 | ||||||||||||
Noncontrolling interests in subsidiaries
|
8,528 | - | 8,528 | - | ||||||||||||
Total stockholders' equity
|
223,801 | 211,680 | 223,801 | 211,680 | ||||||||||||
Condensed consolidated statements of comprehensive income
|
||||||||||||||||
Interest expense
|
$ | 293 | $ | 383 | $ | 901 | $ | 1,718 | ||||||||
Income before income taxes
|
19,067 | 18,977 | 45,847 | 45,030 | ||||||||||||
Income tax expense
|
6,014 | 5,980 | 15,245 | 14,935 | ||||||||||||
Net income, including noncontrolling interests
|
13,053 | 12,997 | 30,602 | 30,095 | ||||||||||||
Net income, net of noncontrolling interests
|
12,124 | 12,068 | 28,551 | 28,044 | ||||||||||||
Comprehensive income
|
12,539 | 12,483 | 31,361 | 30,854 | ||||||||||||
Basic earnings per common share
|
0.48 | 0.47 | 1.12 | 1.10 | ||||||||||||
Earnings per common share - assuming dilution
|
0.47 | 0.47 | 1.11 | 1.09 | ||||||||||||
Consolidated statement of cash flows
|
||||||||||||||||
Net income, including noncontrolling interests
|
$ | 30,602 | $ | 30,095 | ||||||||||||
Deferred income taxes
|
4,332 | 4,022 | ||||||||||||||
Other
|
316 | 1,133 | ||||||||||||||
Net cash provided by operating activities
|
52,925 | 52,925 |
As of and For The
|
As of and For The
|
|||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 25, 2011
|
September 25, 2011
|
|||||||||||||||
As
Previously
Reported
|
As Restated
|
As
Previously
Reported
|
As Restated
|
|||||||||||||
Condensed consolidated balance sheet
|
||||||||||||||||
Noncurrent deferred income tax liabilities
|
$ | 7,110 | $ | 4,710 | $ | 7,110 | $ | 4,710 | ||||||||
Other long-term liabilities
|
11,542 | 22,545 | 11,542 | 22,545 | ||||||||||||
Redeemable noncontrolling interests
|
- | 3,558 | - | 3,558 | ||||||||||||
Retained earnings
|
282,826 | 278,910 | 282,826 | 278,910 | ||||||||||||
Noncontrolling interests in subsidiaries
|
8,245 | - | 8,245 | - | ||||||||||||
Total stockholders' equity
|
212,554 | 200,393 | 212,554 | 200,393 | ||||||||||||
Condensed consolidated statements of comprehensive income
|
||||||||||||||||
Interest expense
|
$ | 282 | $ | 804 | $ | 1,183 | $ | 2,522 | ||||||||
Income before income taxes
|
16,846 | 16,324 | 62,693 | 61,354 | ||||||||||||
Income tax expense
|
4,906 | 4,707 | 20,151 | 19,642 | ||||||||||||
Net income, including noncontrolling interests
|
11,940 | 11,617 | 42,542 | 41,712 | ||||||||||||
Net income, net of noncontrolling interests
|
11,123 | 10,800 | 39,674 | 38,844 | ||||||||||||
Comprehensive income
|
11,687 | 11,364 | 43,048 | 42,218 | ||||||||||||
Basic earnings per common share
|
0.45 | 0.43 | 1.57 | 1.54 | ||||||||||||
Earnings per common share - assuming dilution
|
0.44 | 0.43 | 1.55 | 1.52 | ||||||||||||
Consolidated statement of cash flows
|
||||||||||||||||
Net income, including noncontrolling interests
|
$ | 42,542 | $ | 41,712 | ||||||||||||
Deferred income taxes
|
5,219 | 4,711 | ||||||||||||||
Other
|
1,272 | 2,611 | ||||||||||||||
Net cash provided by operating activities
|
87,216 | 87,216 |
* |
Represents shares of common stock issuable pursuant to the non-qualified deferred compensation plan.
The weighted average exercise price (column b) does not
include any assumed price for issuance of shares
pursuant to the non-qualified deferred compensation plan.
|
(a)(1)
|
Financial Statements:
|
|
·
|
Reports of Independent Registered Public Accounting Firm
|
|
·
|
Consolidated Statements of Income for the years ended December 30, 2012, December 25, 2011 and December 26, 2010
|
|
·
|
Consolidated Statements of Comprehensive Income for the years ended December 30, 2012, December 25, 2011 and December 26, 2010
|
|
·
|
Consolidated Balance Sheets as of December 30, 2012 and December 25, 2011
|
|
·
|
Consolidated Statements of Stockholders’ Equity for the years ended December 30, 2012, December 25, 2011 and December 26, 2010
|
|
·
|
Consolidated Statements of Cash Flows for the years ended December 30, 2012, December 25, 2011 and December 26, 2010
|
|
·
|
Notes to Consolidated Financial Statements
|
(a)(2)
|
Financial Statement Schedules:
|
|
Schedule II – Valuation and Qualifying Accounts
|
|
Charged to
|
||||||||||||||||||
Balance at
|
(recovered from)
|
Balance at
|
||||||||||||||||
Beginning of
|
Costs and
|
Additions /
|
End of
|
|||||||||||||||
Classification
|
Year
|
Expenses
|
(Deductions)
|
Year
|
||||||||||||||
(in thousands)
|
||||||||||||||||||
Fiscal year ended December 30, 2012:
|
||||||||||||||||||
Deducted from asset accounts:
|
||||||||||||||||||
Reserve for uncollectible accounts receivable
|
$ | 3,034 | $ | 1,394 | $ | (1,371 | ) | (1) | $ | 3,057 | ||||||||
Reserve for franchisee notes receivable
|
5,905 | 280 | (1,157 | ) | (1) | 5,028 | ||||||||||||
Valuation allowance on foreign net operating losses
|
7,474 | 766 | - | 8,240 | ||||||||||||||
$ | 16,413 | $ | 2,440 | $ | (2,528 | ) | $ | 16,325 | ||||||||||
Fiscal year ended December 25, 2011:
|
||||||||||||||||||
Deducted from asset accounts:
|
||||||||||||||||||
Reserve for uncollectible accounts receivable
|
$ | 2,795 | $ | 1,072 | $ | (833 | ) | (1) | $ | 3,034 | ||||||||
Reserve for franchisee notes receivable
|
9,951 | (35 | ) | (4,011 | ) | (1) | 5,905 | |||||||||||
Valuation allowance on foreign net operating losses
|
8,123 | (649 | ) | - | 7,474 | |||||||||||||
$ | 20,869 | $ | 388 | $ | (4,844 | ) | $ | 16,413 | ||||||||||
Fiscal year ended December 26, 2010:
|
||||||||||||||||||
Deducted from asset accounts:
|
||||||||||||||||||
Reserve for uncollectible accounts receivable
|
$ | 2,791 | $ | 1,350 | $ | (1,346 | ) | (1) | $ | 2,795 | ||||||||
Reserve for franchisee notes receivable
|
10,858 | (433 | ) | (474 | ) | (1) | 9,951 | |||||||||||
Valuation allowance on foreign net operating losses
|
7,158 | 965 | - | 8,123 | ||||||||||||||
$ | 20,807 | $ | 1,882 | $ | (1,820 | ) | $ | 20,869 | ||||||||||
Date: February 28, 2013
|
PAPA JOHN’S INTERNATIONAL, INC.
|
|
By:
|
/s/ John H. Schnatter
|
|
John H. Schnatter
|
||
Founder, Chairman and
|
||
Chief Executive Officer
|
Signature
|
Title
|
Date
|
|
/s/ John H. Schnatter
|
Founder, Chairman and
|
February 28, 2013
|
|
John H. Schnatter
|
Chief Executive Officer
|
||
(Principal Executive Officer)
|
|||
/s/ Norborne P. Cole, Jr
|
Director
|
February 28, 2013
|
|
Norborne P. Cole, Jr.
|
|||
/s/ Christopher L. Coleman
|
Director
|
February 28, 2013
|
|
Christopher L. Coleman
|
|||
/s/ Philip Guarascio
|
Director
|
February 28, 2013
|
|
Philip Guarascio
|
|||
/s/ Olivia F. Kirtley
|
Director
|
February 28, 2013
|
|
Olivia F. Kirtley
|
|||
/s/ Mark S. Shapiro
|
Director
|
February 28, 2013
|
|
Mark S. Shapiro
|
|||
/s/ William M. Street
|
Director
|
February 28, 2013
|
|
William M. Street
|
|||
/s/ W. Kent Taylor
|
Director
|
February 28, 2013
|
|
W. Kent Taylor
|
|||
/s/ Lance F. Tucker
|
Senior Vice President, Chief
|
February 28, 2013
|
|
Lance F. Tucker
|
Financial Officer, Chief Administrative
|
||
Officer and Treasurer (Principal Financial
|
|||
Officer and Principal Accounting Officer)
|
Exhibit | ||
Number |
Description of Exhibit
|
|
3.1
|
Our Amended and Restated Certificate of Incorporation. Exhibit 3.1 to our Registration Statement on Form S-1 (Registration No. 33-61366) is incorporated herein by reference.
|
|
3.2
|
Our Certificate of Amendment of Amended and Restated Certificate of Incorporation. Exhibit 3 to our Quarterly Report on Form 10-Q for the quarterly period ended June 29, 1997, is incorporated herein by reference.
|
|
3.3
|
Our Restated By-Laws. Exhibit 3.1 to our report on Form 8-K dated December 5, 2007 is incorporated herein by reference.
|
|
4.1
|
Specimen Common Stock Certificate. Exhibit 4.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 1995 (Commission File No. 0-21660) is incorporated herein by reference.
|
|
4.2
|
Amended and Restated Certificate of Incorporation and Restated By-Laws (see Exhibits 3.1, 3.2 and 3.3 above) are incorporated herein by reference.
|
|
10.1*
|
Papa John’s International, Inc. Deferred Compensation Plan, as amended through December 5, 2012.
|
|
10.2*
|
Employment Agreement between Papa John’s International, Inc. and Anthony N. Thompson Effective March 5, 2012, as Amended December 21, 2012.
|
|
10.3*
|
Employment Agreement between Papa John’s International, Inc. and Lance F. Tucker Effective March 5, 2012, as Amended December 21, 2012.
|
|
10.4*
|
Employment Agreement between Papa John’s International, Inc. and Andrew M. Varga Effective March 5, 2012, as Amended December 21, 2012.
|
|
10.5*
|
Employment Agreement between Papa John’s International, Inc. and Timothy C. O’Hern Effective March 5, 2012, as Amended December 21, 2012.
|
|
10.6*
|
Papa John’s International, Inc. 2008 Omnibus Incentive Plan. Exhibit 10.1 to our Registration Statement on Form S-8 (Registration No. 333-150762) dated May 5, 2008 is incorporated herein by reference.
|
|
10.7*
|
Papa John’s International, Inc. 2011 Omnibus Incentive Plan. Exhibit 4.1 to our report on Form 8-K as filed on May 3, 2011 is incorporated herein by reference.
|
10.8*
|
Agreement for Service as Chairman between John H. Schnatter and Papa John’s International, Inc. Exhibit 10.1 to our report on Form 8-K as filed on August 15, 2007 is incorporated herein by reference.
|
|
10.9*
|
Agreement for Service as Founder between John H. Schnatter and Papa John’s International, Inc. Exhibit 10.1 to our report on Form 8-K as filed on August 15, 2007 is incorporated herein by reference.
|
|
10.10*
|
Amendment and Restated Exclusive License Agreement between John H. Schnatter and Papa John’s International, Inc. Exhibit 10.1 to our report on Form 8-K as filed on May 19, 2008 is incorporated herein by reference.
|
|
10.11*
|
Papa John’s International, Inc. Severance Pay Plan. Exhibit 10.1 to our report on Form 10-Q filed on May 1, 2012, is incorporated herein by reference.
|
|
10.12* |
Employment Agreement between Papa John’s International, Inc. and Christopher J. Sternberg dated March 5, 2012. Exhibit 10.2 to our Report on Form 8-K as filed on March 7, 2012 is incorporated herein by reference.
|
|
10.13*
|
Separation and Consulting Agreement and Release between Christopher J. Sternberg and Papa John’s International, Inc. Exhibit 10.1 to our report on Form 10-Q as filed on July 31, 2012 is incorporated herein by reference.
|
|
10.14*
|
Agreement and Release between J. David Flanery and Papa John’s International, Inc. Exhibit 10.1 to our report on Form 8-K/A filed on March 25, 2011 is incorporated herein by reference.
|
|
10.15*
|
Agreement and Release between J. Jude Thompson and Papa John’s International, Inc. Exhibit 10.1 to our report on Form 8-K as filed on April 15, 2011 is incorporated herein by reference.
|
|
10.16
|
$175,000,000 Revolving Credit Facility by and among Papa John’s International, Inc., the Guarantors party thereto, RSC Insurance Services, Ltd., a Bermuda company, the Banks party thereto, PNC Bank, National Association, as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, U.S. Bank, National Association, as Co-Documentation Agent, Bank of America, N.A., as Co-Documentation Agent, Fifth Third Bank, as Co-Documentation Agent, PNC Capital Markets LLC, as Joint Lead Arranger and as Joint Bookrunner, and J.P. Morgan Securities LLC, as Joint Lead Arranger and as Joint Bookrunner dated September 2, 2010. Exhibit 10.1 to our report on Form 8-K as filed on September 9, 2010 is incorporated by reference.
|
|
10.17
|
First Amendment to Credit Agreement by and among Papa John’s International, Inc. the Guarantors party thereto, RSC Insurance Services, Ltd., a Bermuda company, PNC Bank, National Association, as a Bank and as Administrative Agent, JPMorgan Chase Bank, N.A., as a Bank and as Syndication Agent, Bank of America, N.A., as a Bank and as Co-Documentation Agent, Fifth Third Bank, as a Bank and as Co-Documentation Agent, U.S. Bank, National Association, as a Bank and as Co-Documentation Agent, and Branch Banking and Trust Company, as a Bank, dated November 30, 2011. Exhibit 10.1 to our report on Form 8-K filed December 1, 2011 is incorporated by reference.
|
|
21
|
Subsidiaries of the Company.
|
|
23
|
Consent of Ernst & Young LLP.
|
|
31.1
|
Section 302 Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-15(e).
|
31.2
|
Section 302 Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-15(e).
|
|
32.1
|
Section 906 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Section 906 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101
|
Financial statements from the Annual Report on Form 10-K of Papa John’s International, Inc. for the year ended December 30, 2012, filed on February 28, 2013, formatted in XBRL: (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.
|
1.
|
PURPOSES AND AUTHORITY.
|
2.
|
ADMINISTRATION.
|
3.
|
ELIGIBILITY
AND
PARTICIPATION.
|
|
(a)
|
Team
Members.
|
4.
|
DEFERRAL
ELECTIONS.
|
|
4.1.
|
Making
of Election.
|
6.
|
COMPANY
MATCHING CONTRIBUTIONS.
|
7.
|
DISCRETIONARY CONTRIBUTIONS.
|
8.
|
DEEMED
INVESTMENTS.
|
|
8.1.
|
Investment
Options.
|
|
8.2.
|
Selection
of lnvestment
Options.
|
9.
|
PAYMENT
OF
PARTICIPANT
ACCOUNTS.
|
10.
|
DESIGNATION
OF
BENEFICIARY.
|
11.
|
RABBI
TRUST.
|
12.
|
PLAN
YEAR.
|
13.
|
WITHHOLDING.
|
14.
|
MISCELLANEOUS.
|
PAPA JOHN'S INTERNATIONAL, INC.
|
|
By:
/s/Annette
W.
Calhoun
___________
|
|
Title:
Sr.
Director
Benefits
___________
|
|
1.
|
DUAL
STATUS--
INDIVIDUALS
PROVIDING SERVICES
AS
AN
EMPLOYEE
AND
AS
A
MEMBER
OF
THE
BOARD
OF
DIRECTORS.
|
|
2.
|
COMPENSATION.
|
|
3.
|
SEPARATION
FROM
SERVICE
|
|
4.
|
CONSTRUCTION
|
PAPA JOHN’S INTERNATIONAL, INC.
|
|
By:
/s/John H. Schnatter
|
|
Title:
Chief Executive Officer
______________
|
|
/s/ Anthony N. Thompson
____________________
|
|
Anthony N. Thompson
|
PAPA JOHN’S INTERNATIONAL, INC.
|
|||
|
By:
|
/s/ Tony Thompson | |
Title: |
Executive Vice President, Global Operations,
|
||
President, PJ Food Service
|
/s/ Lance F. Tucker | |||
Lance F. Tucker
|
|||
PAPA JOHN’S INTERNATIONAL, INC.
|
|||
|
By:
|
/s/ Tony Thompson | |
Title: |
Executive Vice President, Global Operations
|
||
President, PJ Food Service
|
|
/s/ Andrew M. Varga | ||
Andrew M. Varga
|
|||
PAPA JOHN’S INTERNATIONAL, INC.
|
|||
|
By:
|
/s/ Tony Thompson | |
Title: |
Executive Vice President, Global Operations
|
||
President, PJ Food Service
|
|
/s/ Timothy C. O’Hern | ||
Timothy C. O’Hern
|
|||
§
|
Papa John’s USA, Inc., a Kentucky corporation
|
§
|
PJ Food Service, Inc., a Kentucky corporation
|
§
|
Trans Papa Logistics, Inc., a Kentucky corporation
|
§
|
Preferred Marketing Solutions, Inc., a Kentucky corporation
|
§
|
Risk Services Corp., a Kentucky corporation
|
§
|
Capital Delivery, Ltd., a Kentucky corporation
|
§
|
RSC Insurance Services Ltd., a Bermuda corporation
|
§
|
DEPZZA, Inc., a Delaware corporation
|
§
|
Colonel’s Limited, LLC, a Virginia limited liability company
|
§
|
PJ Holdings, LLC, a Delaware limited liability company
|
§
|
Star Papa, LP, a Delaware limited partnership company
|
§
|
Papa John’s Pizza, Ltd., a United Kingdom corporation
|
§
|
Papa John’s (GB) Holdings Ltd., a United Kingdom corporation
|
§
|
Papa John’s (GB), Ltd., a United Kingdom corporation
|
§
|
Papa John’s Mexico, Inc., a Delaware corporation
|
§
|
Papa John’s Capital, SRL de CV, a Mexican corporation
|
§
|
Equipo Papa John’s, SRL de CV, a Mexican corporation
|
§
|
Papa John’s EUM, SRL de CV, a Mexican corporation
|
§
|
PJ Mexico Franchising SRL de CV, a Mexican corporation
|
§
|
Papa John’s China, LLC, a Delaware limited liability company
|
§
|
Papa John’s Beijing Co., Ltd., a Chinese corporation
|
§
|
PJ Minnesota, LLC, a Delaware limited liability company
|
§
|
PJ Denver, LLC, a Delaware limited liability company
|
|
(i)
|
Registration Statement (Form S-8 No. 333-173893) pertaining to the Papa John’s International, Inc. 2011 Omnibus Incentive Plan filed May 3, 2011,
|
|
(ii)
|
Registration Statement (Form S-8 No. 333-165154 and No. 333-168562) pertaining to the Papa John’s International, Inc. Nonqualified Deferred Compensation Plan filed March 2, 2010 and August 5, 2010, respectively,
|
|
(iii)
|
Registration Statement (Form S-8 No. 333-150762) pertaining to the Papa John’s International, Inc. 2008 Omnibus Incentive Plan filed May 5, 2008,
|
|
(iv)
|
Registration Statement (Form S-8 No. 333-149468) pertaining to the Papa John’s International, Inc. Deferred Compensation Plan filed February 29, 2008,
|
|
(v)
|
Registration Statement (Form S-8 No. 333-138427) pertaining to the Papa John’s International, Inc. 2003 Stock Option Plan for Non-Employee Directors filed November 3, 2006,
|
|
(vi)
|
Registration Statements (Forms S-8 No. 333-86535 and No. 333-142885) pertaining to the Papa John’s International, Inc. 1999 Team Member Stock Ownership Plan filed September 3, 1999 and May 11, 2007, respectively, and,
|
|
(vii)
|
Registration Statement (Form S-8 No. 333-168561) pertaining to the Papa John’s International, Inc. 401(k) Plan filed August 5, 2010,
|
|
1.
|
I have reviewed this annual report on Form 10-K of Papa John’s International, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 28, 2013 |
/s/ John H. Schnatter
John H. Schnatter
Founder, Chairman and
Chief Executive Officer
|
|
1.
|
I have reviewed this annual report on Form 10-K of Papa John’s International, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 28, 2013
|
/s/ Lance F. Tucker
Lance F. Tucker
Senior Vice President, Chief Financial
Officer, Chief Administrative Officer
and Treasurer
|
|
1.
|
The Report on Form 10-K of the Company for the annual period ended December 30, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 28, 2013 |
/s/ John H. Schnatter
John H. Schnatter
Founder, Chairman and
Chief Executive Officer
|
|
1.
|
The Report on Form 10-K of the Company for the annual period ended December 30, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 28, 2013
|
/s/ Lance F. Tucker
Lance F. Tucker
Senior Vice President, Chief Financial
Officer, Chief Administrative Officer
and Treasurer
|