[X]
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
[ ]
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
61-1203323 | |||
(State or other jurisdiction of
|
(I.R.S. Employer Identification | |||
incorporation or organization) | number) |
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
|
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
|
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer [X] | Accelerated filer [ ] | |
Non-accelerated filer [ ] | Smaller reporting company [ ] |
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
Yes [ ] No [X] |
|
At April 25, 2012, there were outstanding 23,822,608 shares of the registrant’s common stock, par value $0.01 per share.
|
Page No.
|
|||||
Financial Statements | |||||
2 | |||||
3 | |||||
|
|||||
4 | |||||
5 | |||||
6 | |||||
13 | |||||
22 | |||||
23 | |||||
23 | |||||
23 | |||||
24 | |||||
25 |
Condensed Consolidated Balance Sheets
|
(In thousands)
|
March 25, 2012
|
December 25, 2011
|
||||||
(Unaudited)
|
(Note)
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 45,112 | $ | 18,942 | ||||
Accounts receivable, net
|
30,251 | 28,169 | ||||||
Notes receivable, net
|
4,278 | 4,221 | ||||||
Inventories
|
18,969 | 20,091 | ||||||
Prepaid expenses
|
9,395 | 10,210 | ||||||
Other current assets
|
4,342 | 3,522 | ||||||
Deferred income taxes
|
6,858 | 7,636 | ||||||
Total current assets
|
119,205 | 92,791 | ||||||
Property and equipment, net
|
184,167 | 185,132 | ||||||
Notes receivable, less current portion, net
|
11,498 | 11,502 | ||||||
Goodwill
|
75,328 | 75,085 | ||||||
Other assets
|
26,407 | 25,872 | ||||||
Total assets
|
$ | 416,605 | $ | 390,382 | ||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 34,953 | $ | 32,966 | ||||
Income and other taxes payable
|
13,819 | 3,969 | ||||||
Accrued expenses and other current liabilities
|
46,468 | 44,198 | ||||||
Total current liabilities
|
95,240 | 81,133 | ||||||
Deferred revenue
|
8,478 | 4,780 | ||||||
Long-term debt
|
50,000 | 51,489 | ||||||
Other long-term liabilities
|
23,795 | 22,014 | ||||||
Long-term accrued income taxes
|
3,993 | 3,597 | ||||||
Deferred income taxes
|
7,264 | 9,147 | ||||||
Stockholders’ equity:
|
||||||||
Preferred stock
|
- | - | ||||||
Common stock
|
368 | 367 | ||||||
Additional paid-in capital
|
266,783 | 262,456 | ||||||
Accumulated other comprehensive income
|
2,060 | 1,849 | ||||||
Retained earnings
|
315,551 | 298,807 | ||||||
Treasury stock
|
(366,822 | ) | (353,826 | ) | ||||
Total stockholders' equity, net of noncontrolling interests
|
217,940 | 209,653 | ||||||
Noncontrolling interests in subsidiaries
|
9,895 | 8,569 | ||||||
Total stockholders’ equity
|
227,835 | 218,222 | ||||||
Total liabilities and stockholders’ equity
|
$ | 416,605 | $ | 390,382 | ||||
Note: The balance sheet at December 25, 2011 has been derived from the audited consolidated financial
|
||||||||
statements at that date, but does not include all information and footnotes required by accounting principles
|
||||||||
generally accepted in the United States for a complete set of financial statements.
|
||||||||
See accompanying notes.
|
Three Months Ended
|
||||||||
(In thousands, except per share amounts)
|
March 25, 2012
|
March 27, 2011
|
||||||
North America revenues:
|
||||||||
Domestic Company-owned restaurant sales
|
$ | 143,815 | $ | 138,671 | ||||
Franchise royalties
|
20,518 | 19,731 | ||||||
Franchise and development fees
|
222 | 185 | ||||||
Domestic commissary sales
|
137,610 | 127,672 | ||||||
Other sales
|
12,258 | 13,447 | ||||||
International revenues:
|
||||||||
Royalties and franchise and development fees
|
4,486 | 3,762 | ||||||
Restaurant and commissary sales
|
12,367 | 8,999 | ||||||
Total revenues
|
331,276 | 312,467 | ||||||
Costs and expenses:
|
||||||||
Domestic Company-owned restaurant expenses:
|
||||||||
Cost of sales
|
32,456 | 32,100 | ||||||
Salaries and benefits
|
38,813 | 37,649 | ||||||
Advertising and related costs
|
12,699 | 12,789 | ||||||
Occupancy costs
|
7,898 | 7,869 | ||||||
Other operating expenses
|
20,418 | 19,915 | ||||||
Total domestic Company-owned restaurant expenses
|
112,284 | 110,322 | ||||||
Domestic commissary and other expenses:
|
||||||||
Cost of sales
|
112,838 | 106,443 | ||||||
Salaries and benefits
|
9,003 | 9,011 | ||||||
Other operating expenses
|
14,306 | 13,585 | ||||||
Total domestic commissary and other expenses
|
136,147 | 129,039 | ||||||
International operating expenses
|
10,392 | 7,728 | ||||||
General and administrative expenses
|
31,596 | 29,074 | ||||||
Other general expenses
|
5,674 | 781 | ||||||
Depreciation and amortization
|
7,927 | 8,312 | ||||||
Total costs and expenses
|
304,020 | 285,256 | ||||||
Operating income
|
27,256 | 27,211 | ||||||
Investment income
|
170 | 177 | ||||||
Interest expense
|
(288 | ) | (608 | ) | ||||
Income before income taxes
|
27,138 | 26,780 | ||||||
Income tax expense
|
9,068 | 9,231 | ||||||
Net income, including noncontrolling interests
|
18,070 | 17,549 | ||||||
Net income attributable to noncontrolling interests
|
(1,326 | ) | (1,122 | ) | ||||
Net income, net of noncontrolling interests
|
$ | 16,744 | $ | 16,427 | ||||
Basic earnings per common share
|
$ | 0.70 | $ | 0.64 | ||||
Earnings per common share - assuming dilution
|
$ | 0.69 | $ | 0.64 | ||||
Basic weighted average shares outstanding
|
24,053 | 25,484 | ||||||
Diluted weighted average shares outstanding
|
24,438 | 25,757 | ||||||
Comprehensive income
|
$ | 18,281 | $ | 18,822 | ||||
See accompanying notes.
|
Papa John's International, Inc.
|
||||||||||||||||||||||||||||||||
Common
|
Accumulated
|
|||||||||||||||||||||||||||||||
Stock
|
Additional
|
Other
|
Noncontrolling
|
Total
|
||||||||||||||||||||||||||||
Shares
|
Common
|
Paid-In
|
Comprehensive
|
Retained
|
Treasury
|
Interests in
|
Stockholders'
|
|||||||||||||||||||||||||
(In thousands)
|
Outstanding
|
Stock
|
Capital
|
Income
|
Earnings
|
Stock
|
Subsidiaries
|
Equity
|
||||||||||||||||||||||||
Balance at December 26, 2010
|
25,439 | $ | 361 | $ | 245,380 | $ | 849 | $ | 243,152 | $ | (291,048 | ) | $ | 8,506 | $ | 207,200 | ||||||||||||||||
Net income
|
- | - | - | - | 16,427 | - | 1,122 | 17,549 | ||||||||||||||||||||||||
Other comprehensive income
|
- | - | - | 1,273 | - | - | - | 1,273 | ||||||||||||||||||||||||
Exercise of stock options
|
63 | 1 | 1,313 | - | - | - | - | 1,314 | ||||||||||||||||||||||||
Tax effect of equity awards
|
- | - | 31 | - | - | - | - | 31 | ||||||||||||||||||||||||
Acquisition of Company
|
||||||||||||||||||||||||||||||||
common stock
|
(143 | ) | - | - | - | - | (4,119 | ) | - | (4,119 | ) | |||||||||||||||||||||
Net contributions (distributions) -
|
||||||||||||||||||||||||||||||||
noncontrolling interests
|
- | - | - | - | - | - | (1,729 | ) | (1,729 | ) | ||||||||||||||||||||||
Stock-based compensation expense
|
- | - | 1,795 | - | - | - | - | 1,795 | ||||||||||||||||||||||||
Other
|
- | - | (50 | ) | - | - | 152 | - | 102 | |||||||||||||||||||||||
Balance at March 27, 2011
|
25,359 | $ | 362 | $ | 248,469 | $ | 2,122 | $ | 259,579 | $ | (295,015 | ) | $ | 7,899 | $ | 223,416 | ||||||||||||||||
Balance at December 25, 2011
|
24,019 | $ | 367 | $ | 262,456 | $ | 1,849 | $ | 298,807 | $ | (353,826 | ) | $ | 8,569 | $ | 218,222 | ||||||||||||||||
Net income
|
- | - | - | - | 16,744 | - | 1,326 | 18,070 | ||||||||||||||||||||||||
Other comprehensive income
|
- | - | - | 211 | - | - | - | 211 | ||||||||||||||||||||||||
Exercise of stock options
|
116 | 1 | 3,727 | - | - | - | - | 3,728 | ||||||||||||||||||||||||
Tax effect of equity awards
|
- | - | (351 | ) | - | - | - | - | (351 | ) | ||||||||||||||||||||||
Acquisition of Company
|
||||||||||||||||||||||||||||||||
common stock
|
(372 | ) | - | - | - | - | (13,820 | ) | - | (13,820 | ) | |||||||||||||||||||||
Stock-based compensation expense
|
- | - | 1,694 | - | - | - | - | 1,694 | ||||||||||||||||||||||||
Issuance of restricted stock
|
30 | - | (591 | ) | - | - | 591 | - | - | |||||||||||||||||||||||
Other
|
- | - | (152 | ) | - | - | 233 | - | 81 | |||||||||||||||||||||||
Balance at March 25, 2012
|
23,793 | $ | 368 | $ | 266,783 | $ | 2,060 | $ | 315,551 | $ | (366,822 | ) | $ | 9,895 | $ | 227,835 | ||||||||||||||||
See accompanying notes.
|
Three Months Ended
|
||||||||
(In thousands)
|
March 25, 2012
|
March 27, 2011
|
||||||
Operating activities
|
||||||||
Net income, including noncontrolling interests
|
$ | 18,070 | $ | 17,549 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for uncollectible accounts and notes receivable
|
547 | 39 | ||||||
Depreciation and amortization
|
7,927 | 8,312 | ||||||
Deferred income taxes
|
(1,057 | ) | 2,664 | |||||
Stock-based compensation expense
|
1,694 | 1,795 | ||||||
Excess tax benefit on equity awards
|
(129 | ) | (107 | ) | ||||
Other
|
678 | 43 | ||||||
Changes in operating assets and liabilities, net of acquisitions:
|
||||||||
Accounts receivable
|
(2,670 | ) | (3,011 | ) | ||||
Inventories
|
1,122 | (28 | ) | |||||
Prepaid expenses
|
815 | (324 | ) | |||||
Other current assets
|
(820 | ) | 85 | |||||
Other assets and liabilities
|
764 | (721 | ) | |||||
Accounts payable
|
1,987 | (4,818 | ) | |||||
Income and other taxes payable
|
9,850 | 4,874 | ||||||
Accrued expenses and other current liabilities
|
1,221 | 296 | ||||||
Long-term accrued income taxes
|
396 | 366 | ||||||
Deferred revenue
|
3,698 | (327 | ) | |||||
Net cash provided by operating activities
|
44,093 | 26,687 | ||||||
Investing activities
|
||||||||
Purchase of property and equipment
|
(6,403 | ) | (4,823 | ) | ||||
Loans issued
|
(687 | ) | (165 | ) | ||||
Repayments of loans issued
|
703 | 1,468 | ||||||
Other
|
5 | - | ||||||
Net cash used in investing activities
|
(6,382 | ) | (3,520 | ) | ||||
Financing activities
|
||||||||
Net repayments on line of credit facility
|
(1,489 | ) | (51,000 | ) | ||||
Excess tax benefit on equity awards
|
129 | 107 | ||||||
Tax payments for restricted stock
|
(303 | ) | - | |||||
Proceeds from exercise of stock options
|
3,728 | 1,314 | ||||||
Acquisition of Company common stock
|
(13,820 | ) | (4,119 | ) | ||||
Distributions to noncontrolling interests
|
- | (1,729 | ) | |||||
Other
|
82 | (10 | ) | |||||
Net cash used in financing activities
|
(11,673 | ) | (55,437 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents
|
132 | (6 | ) | |||||
Change in cash and cash equivalents
|
26,170 | (32,276 | ) | |||||
Cash and cash equivalents at beginning of period
|
18,942 | 47,829 | ||||||
Cash and cash equivalents at end of period
|
$ | 45,112 | $ | 15,553 | ||||
See accompanying notes.
|
||||||||
1.
|
Basis of Presentation
|
2.
|
Significant Accounting Policies
|
Restaurants as
of March 25,
2012
|
Restaurants as
of March 27,
2011
|
Restaurant Locations
|
Papa John's Ownership*
|
Noncontrolling Interest
Ownership*
|
|||||||||||||
Star Papa, LP
|
76 | 75 |
Texas
|
51 | % | 49 | % | ||||||||||
Colonel's Limited, LLC
|
52 | 52 |
Maryland and Virginia
|
70 | % | 30 | % | ||||||||||
*The ownership percentages were the same for both the 2012 and 2011 periods presented in the accompanying
|
|||||||||||||||||
consolidated financial statements.
|
March 25,
|
March 27,
|
|||||||
2012
|
2011
|
|||||||
Papa John's International, Inc.
|
$ | 2,043 | $ | 1,798 | ||||
Noncontrolling interests
|
1,326 | 1,122 | ||||||
Total income before income taxes
|
$ | 3,369 | $ | 2,920 | ||||
3.
|
Accumulated Other Comprehensive Income (Loss)
|
Foreign
Currency
|
Interest
Rate
Swaps (a)
|
Defined
Pension
Plan
|
Accumulated
Other
Comprehensive Income
|
|||||||||||||
Beginning balance - December 26, 2010
|
$ | 1,008 | $ | (159 | ) | $ | - | $ | 849 | |||||||
Current period other comprehensive income
|
1,114 | 159 | - | 1,273 | ||||||||||||
Ending balance - March 27, 2011
|
$ | 2,122 | $ | - | $ | - | $ | 2,122 | ||||||||
Beginning balance - December 25, 2011
|
$ | 1,872 | $ | 6 | $ | (29 | ) | $ | 1,849 | |||||||
Current period other comprehensive income (loss)
|
291 | (80 | ) | - | 211 | |||||||||||
Ending balance - March 25, 2012
|
$ | 2,163 | $ | (74 | ) | $ | (29 | ) | $ | 2,060 | ||||||
(a) Amounts are shown net of tax of $89,000 and $47,000 for the three months ended March 27, 2011
|
||||||||||||||||
and March 25, 2012, respectively.
|
4.
|
Fair Value Measurements and Disclosures
|
●
|
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.
|
Carrying
|
Fair Value Measurements
|
|||||||||||||||
Value
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
March 25, 2012
|
||||||||||||||||
Financial assets:
|
||||||||||||||||
Cash surrender value of life insurance policies *
|
$ | 12,341 | $ | 12,341 | $ | - | $ | - | ||||||||
Financial liabilities:
|
||||||||||||||||
Interest rate swap
|
118 | - | 118 | - | ||||||||||||
December 25, 2011
|
||||||||||||||||
Financial assets:
|
||||||||||||||||
Cash surrender value of life insurance policies *
|
$ | 11,387 | $ | 11,387 | $ | - | $ | - | ||||||||
Interest rate swap
|
11 | - | 11 | - | ||||||||||||
* Represents life insurance held in our non-qualified deferred compensation plan.
|
||||||||||||||||
5.
|
Debt
|
6.
|
Calculation of Earnings Per Share
|
Three Months Ended
|
||||||||
March 25,
|
March 27,
|
|||||||
2012
|
2011
|
|||||||
Basic earnings per common share:
|
||||||||
Net income, net of noncontrolling interests
|
$ | 16,744 | $ | 16,427 | ||||
Weighted average shares outstanding
|
24,053 | 25,484 | ||||||
Basic earnings per common share
|
$ | 0.70 | $ | 0.64 | ||||
Earnings per common share - assuming dilution:
|
||||||||
Net income, net of noncontrolling interests
|
$ | 16,744 | $ | 16,427 | ||||
Weighted average shares outstanding
|
24,053 | 25,484 | ||||||
Dilutive effect of outstanding equity awards
|
385 | 273 | ||||||
Diluted weighted average shares outstanding
|
24,438 | 25,757 | ||||||
Earnings per common share - assuming dilution
|
$ | 0.69 | $ | 0.64 |
7.
|
Commitments and Contingencies
|
8.
|
Segment Information
|
Three Months Ended
|
||||||||
March 25, 2012
|
March 27, 2011
|
|||||||
Revenues from external customers:
|
||||||||
Domestic Company-owned restaurants
|
$ | 143,815 | $ | 138,671 | ||||
Domestic commissaries
|
137,610 | 127,672 | ||||||
North America franchising
|
20,740 | 19,916 | ||||||
International
|
16,853 | 12,761 | ||||||
All others
|
12,258 | 13,447 | ||||||
Total revenues from external customers
|
$ | 331,276 | $ | 312,467 | ||||
Intersegment revenues:
|
||||||||
Domestic commissaries
|
$ | 41,537 | $ | 38,100 | ||||
North America franchising
|
549 | 548 | ||||||
International
|
54 | 47 | ||||||
Variable interest entities
|
- | 25,117 | ||||||
All others
|
3,021 | 2,555 | ||||||
Total intersegment revenues
|
$ | 45,161 | $ | 66,367 | ||||
Income (loss) before income taxes:
|
||||||||
Domestic Company-owned restaurants
|
$ | 12,321 | $ | 10,883 | ||||
Domestic commissaries
|
11,166 | 9,554 | ||||||
North America franchising
|
18,140 | 18,009 | ||||||
International
|
272 | (816 | ) | |||||
All others
|
395 | (378 | ) | |||||
Unallocated corporate expenses
|
(15,166 | ) | (9,769 | ) | ||||
Elimination of intersegment profits
|
10 | (703 | ) | |||||
Total income before income taxes
|
$ | 27,138 | $ | 26,780 | ||||
Property and equipment:
|
||||||||
Domestic Company-owned restaurants
|
$ | 177,423 | ||||||
Domestic commissaries
|
87,014 | |||||||
International
|
18,047 | |||||||
All others
|
41,053 | |||||||
Unallocated corporate assets
|
133,452 | |||||||
Accumulated depreciation and amortization
|
(272,822 | ) | ||||||
Net property and equipment
|
$ | 184,167 |
First Quarter
|
||||||||||||
Mar. 25,
|
Mar. 27,
|
|||||||||||
(In thousands, except per share amounts)
|
2012
|
2011
|
Increase
|
|||||||||
Income before income taxes, as reported
|
$ | 27,138 | $ | 26,780 | $ | 358 | ||||||
Incentive Contribution
|
3,721 | - | 3,721 | |||||||||
Income before income taxes, excluding Incentive Contribution
|
$ | 30,859 | $ | 26,780 | $ | 4,079 | ||||||
Net income, as reported
|
$ | 16,744 | $ | 16,427 | $ | 317 | ||||||
Incentive Contribution
|
2,439 | - | 2,439 | |||||||||
Net income, excluding Incentive Contribution
|
$ | 19,183 | $ | 16,427 | $ | 2,756 | ||||||
Earnings per diluted share, as reported
|
$ | 0.69 | $ | 0.64 | $ | 0.05 | ||||||
Incentive Contribution
|
0.10 | - | 0.10 | |||||||||
Earnings per diluted share, excluding Incentive Contribution
|
$ | 0.79 | $ | 0.64 | $ | 0.15 | ||||||
Three Months Ended
|
||||||||
March 25, 2012
|
March 27, 2011
|
|||||||
Papa John's Restaurant Progression:
|
||||||||
North America Company-owned:
|
||||||||
Beginning of period
|
598 | 591 | ||||||
Opened
|
- | 1 | ||||||
Closed
|
(1 | ) | - | |||||
End of period
|
597 | 592 | ||||||
International Company-owned:
|
||||||||
Beginning of period
|
30 | 21 | ||||||
Closed
|
(1 | ) | - | |||||
End of period
|
29 | 21 | ||||||
North America franchised:
|
||||||||
Beginning of period
|
2,463 | 2,346 | ||||||
Opened
|
47 | 32 | ||||||
Closed
|
(12 | ) | (7 | ) | ||||
End of period
|
2,498 | 2,371 | ||||||
International franchised:
|
||||||||
Beginning of period
|
792 | 688 | ||||||
Opened
|
23 | 23 | ||||||
Closed
|
(6 | ) | (8 | ) | ||||
End of period
|
809 | 703 | ||||||
Total restaurants - end of period
|
3,933 | 3,687 |
●
|
Domestic Company-owned restaurant sales increased $5.1 million, or 3.7%, reflecting an increase of 3.0% in comparable sales during the first quarter of 2012. “Comparable sales” represents sales generated by restaurants open for the entire twelve-month period reported.
|
●
|
North America franchise royalty revenue increased approximately $800,000, or 4.0%, primarily due to an increase in net franchise units over the prior year.
|
●
|
Domestic commissary sales increased $9.9 million, or 7.8%, due to an increase in the volume of sales and increases in the prices of certain commodities.
|
●
|
International revenues increased $4.1 million, or 32.1%, primarily due to an increase in the number of restaurants and an increase in comparable sales of 8.4% calculated on a constant dollar basis.
|
●
|
Other sales decreased approximately $1.2 million, or 8.8%, primarily due to a decline in sales at our print and promotions subsidiary, Preferred Marketing Solutions, partially offset by an increase in online sales.
|
First Quarter
|
||||||||||||
Mar. 25,
|
Mar. 27,
|
Increase
|
||||||||||
2012
|
2011
|
(Decrease)
|
||||||||||
Domestic Company-owned restaurants (a)
|
$ | 12,321 | $ | 10,883 | $ | 1,438 | ||||||
Domestic commissaries
|
11,166 | 9,554 | 1,612 | |||||||||
North America franchising
|
18,140 | 18,009 | 131 | |||||||||
International
|
272 | (816 | ) | 1,088 | ||||||||
All others
|
395 | (378 | ) | 773 | ||||||||
Unallocated corporate expenses (b)
|
(15,166 | ) | (9,769 | ) | (5,397 | ) | ||||||
Elimination of intersegment loss (profit)
|
10 | (703 | ) | 713 | ||||||||
Total income before income taxes
|
$ | 27,138 | $ | 26,780 | $ | 358 | ||||||
(a)
|
Includes the benefit of a $1.0 million advertising credit from PJNMF related to the Incentive Contribution in the first quarter of 2012.
|
(b)
|
Includes a $4.7 million net reduction related to the Incentive Contribution in the first quarter of 2012.
|
●
|
Domestic Company-owned Restaurant Segment. Domestic Company-owned restaurants’ operating income increased $1.4 million in the first quarter of 2012, including the $1.0 million advertising credit from PJNMF. The remaining increase of approximately $400,000 was primarily due to profits from the higher comparable sales results as well as various supplier incentives, offset somewhat by higher commodities.
|
●
|
Domestic Commissary Segment. Domestic commissaries’ operating income increased approximately $1.6 million for first quarter primarily due to increased sales volumes, slightly offset by higher distribution costs due to higher volumes and fuel prices.
|
●
|
North America Franchising Segment. North America Franchising operating income increased approximately $100,000 to $18.1 million for the first quarter of 2012, as compared to the comparable 2011 period. The increase was due to the previously mentioned royalty revenue increases, substantially offset by an increase in development incentive costs.
|
●
|
International Segment. The operating income during the first quarter of 2012 for the international segment was approximately $300,000 as compared to a loss of approximately $800,000 in the first quarter of 2011. The improvement of approximately $1.1 million in the operating results was primarily due to increased royalties due to growth in the number of units and the 8.4% increase in comparable sales, and improved operating results in our Beijing and North China Company-owned restaurants as well as our United Kingdom commissary.
|
●
|
All Others Segment. The “All others” reporting segment reported income of approximately $400,000 for the first quarter of 2012, as compared to a loss of approximately $400,000 in the first quarter of 2011. The increase of approximately $800,000 was primarily due to an improvement in our eCommerce operations due to higher online sales. These improved results were somewhat offset by reduced operating results of Preferred Marketing Solutions due to the previously noted reduction in sales.
|
●
|
Unallocated Corporate Segment. Unallocated corporate expenses increased approximately $5.4 million for the first quarter of 2012, including the previously discussed $4.7 million related to the Incentive Contribution, as compared to the corresponding quarter in 2011. The components of unallocated corporate expenses were as follows (in thousands):
|
Three Months Ended
|
||||||||||||
March 25,
|
March 27,
|
Increase
|
||||||||||
2012
|
2011
|
(decrease)
|
||||||||||
General and administrative (a)
|
$ | 8,661 | $ | 7,385 | $ | 1,276 | ||||||
Supplier marketing payment (b)
|
4,750 | - | 4,750 | |||||||||
Net interest
|
122 | 431 | (309 | ) | ||||||||
Depreciation
|
1,735 | 2,178 | (443 | ) | ||||||||
Other income
|
(102 | ) | (225 | ) | 123 | |||||||
Total unallocated corporate expenses
|
$ | 15,166 | $ | 9,769 | $ | 5,397 |
(a)
|
Unallocated general and administrative costs increased primarily due to additional costs related to our operators’ conference and an increase in legal costs.
|
|
(b)
|
See previous discussion in “Non-GAAP Measures” for further information.
|
Three Months Ended
|
||||||||||||||||
March 25, 2012
|
March 27, 2011
|
|||||||||||||||
Company
|
Franchised
|
Company
|
Franchised
|
|||||||||||||
Total domestic units (end of period)
|
597 | 2,498 | 592 | 2,371 | ||||||||||||
Equivalent units
|
592 | 2,413 | 586 | 2,293 | ||||||||||||
Comparable sales base units
|
582 | 2,193 | 578 | 2,104 | ||||||||||||
Comparable sales base percentage
|
98.3 | % | 90.9 | % | 98.6 | % | 91.8 | % | ||||||||
Average weekly sales - comparable units
|
$ | 18,818 | $ | 15,404 | $ | 18,295 | $ | 15,426 | ||||||||
Average weekly sales - total non-comparable units
|
$ | 11,631 | $ | 10,790 | $ | 11,476 | $ | 11,817 | ||||||||
Average weekly sales - all units
|
$ | 18,702 | $ | 14,983 | $ | 18,201 | $ | 15,128 |
|
●
|
Cost of sales was 0.6% lower for the first quarter of 2012, as compared to the first quarter of 2011, due to various supplier incentives, offset somewhat by higher commodity costs in the first quarter of 2012.
|
|
●
|
Salaries and benefits were 0.2% lower as a percentage of sales in the first quarter of 2012, compared to the first quarter of 2011, primarily due to the benefit from increased sales.
|
|
●
|
Advertising and related costs as a percentage of sales were 0.4% lower due to the $1.0 million related to the advertising credit received from PJNMF, slightly offset by an increase in local marketing costs.
|
|
●
|
Occupancy costs and other operating costs, on a combined basis, as a percentage of sales, were 0.3% lower in the first quarter of 2012, primarily due to the benefit from increased sales.
|
|
●
|
Cost of sales was 75.3% of revenues in the first quarter of 2012, compared to 75.4% for the same period in 2011.
|
|
●
|
Salaries and benefits were 6.0% of revenues in the first quarter of 2012, compared to 6.4% of revenues in the first quarter of 2011, reflecting the benefit of increased sales.
|
|
●
|
Other operating expenses as a percentage of sales were 9.5% in the first quarter of 2012, compared to 9.6% in the prior comparable period, primarily due to the benefit of increased sales, slightly offset by higher distribution costs.
|
March 25,
|
March 27,
|
Increase
|
||||||||||
2012
|
2011
|
(Decrease)
|
||||||||||
Supplier marketing payment (a)
|
$ | 4,750 | $ | - | $ | 4,750 | ||||||
Disposition and valuation-related (gain) loss
|
(35 | ) | 185 | (220 | ) | |||||||
Provision for uncollectible accounts and notes receivable
|
103 | 82 | 21 | |||||||||
Franchise and development incentives (b)
|
732 | 272 | 460 | |||||||||
Other
|
124 | 242 | (118 | ) | ||||||||
Total other general expenses
|
$ | 5,674 | $ | 781 | $ | 4,893 |
Actual Ratio for the
|
|||
Quarter Ended
|
|||
Permitted Ratio
|
March 25, 2012
|
||
Leverage Ratio
|
Not to exceed 2.5 to 1.0
|
0.5 to 1.0
|
|
Interest Coverage Ratio
|
Not less than 3.5 to 1.0
|
5.4 to 1.0
|
|
Three Months Ended
|
||||||||
March 25,
|
March 27,
|
|||||||
2012
|
2011
|
|||||||
Net cash provided by operating activities
|
$ | 44,093 | $ | 26,687 | ||||
Purchase of property and equipment
|
(6,403 | ) | (4,823 | ) | ||||
Free cash flow (a)
|
$ | 37,690 | $ | 21,864 |
|
(a)
|
Free cash flow is defined as net cash provided by operating activities (from the consolidated statements of cash flows) less the purchases of property and equipment. We believe free cash flow is an important measure because it is one factor that management uses in determining the amount of cash available for discretionary investment. See previous “Non-GAAP Measures” for discussion about this non-GAAP measure, its limitations and why we present free cash flow alongside the most directly comparable GAAP measure.
|
Total Number
|
Maximum Dollar
|
|||||||||||||||
Total
|
Average
|
of Shares
|
Value of Shares
|
|||||||||||||
Number
|
Price
|
Purchased as Part of
|
that May Yet Be
|
|||||||||||||
of Shares
|
Paid per
|
Publicly Announced
|
Purchased Under the
|
|||||||||||||
Fiscal Period
|
Purchased
|
Share
|
Plans or Programs
|
Plans or Programs
|
||||||||||||
12/26/2011 - 01/22/2012
|
60 | $ | 37.72 | 47,533 | $ | 69,292 | ||||||||||
01/23/2012 - 02/19/2012
|
- | - | * | 47,533 | $ | 69,292 | ||||||||||
02/20/2012 - 03/25/2012
|
312 | $ | 37.19 | 47,845 | $ | 57,719 |
*
|
There were no share repurchases during this period.
|
Exhibit
|
||
Number
|
Description
|
|
10.1*
|
Papa John’s International, Inc. Severance Pay Plan.
|
|
10.2*
|
Employment Agreement between Papa John’s International, Inc., and Anthony N. Thompson dated March 5, 2012. Exhibit 10.1 to our report on Form 8-K filed on March 7, 2012 is incorporated herein by reference.
|
|
10.3*
|
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 filed on March 7, 2012 is incorporated herein by reference.
|
|
10.4*
|
Employment Agreement between Papa John’s International, Inc., and Lance F. Tucker dated March 5, 2012. Exhibit 10.3 to our report on Form 8-K filed on March 7, 2012 is incorporated herein by reference.
|
|
10.5*
|
Employment Agreement between Papa John’s International, Inc., and Andrew M. Varga dated March 5, 2012. Exhibit 10.4 to our report on Form 8-K filed on March 7, 2012 is incorporated herein by reference.
|
|
31.1
|
Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-15(e), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-15(e), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
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
|
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 quarterly report on Form 10-Q of Papa John’s International, Inc. for the quarter ended March 25, 2012, filed on May 1, 2012, formatted in XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Consolidated Statements of Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements.
|
PAPA JOHN’S INTERNATIONAL, INC.
|
|
(Registrant)
|
|
Date: May 1, 2012
|
/s/ Lance F. Tucker
|
Lance F. Tucker
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
Section 1.
|
General Information.
|
|
A.
|
Name of Plan. The name of the Plan is the Papa John’s International, Inc. Severance Pay Plan. The effective date is May 1, 2012.
|
|
B.
|
Company. The Company is Papa John’s International, Inc. The Employer Identification Number of the Company 61-1203323. The Administrator shall have the discretion to designate which subsidiaries of the Company are included within the scope of the Plan, such that employees of any subsidiaries designated as outside the scope of the Plan would not be eligible to be participants in the Plan. Until otherwise designated by the Administrator, the following subsidiaries of the Company shall be included within the scope of the Plan: Papa John’s USA, Inc., PJ Food Service, Inc., Trans Papa Logistics, Inc., Star Papa LP, Risk Services, Inc. and Preferred Marketing Solutions, Inc.
|
|
C.
|
Administrator. The Plan is administered by the Company (the "Administrator"). The Administrator is responsible for maintaining records, determining eligibility and making decisions with respect to claims for benefits. The Administrator, in its discretion, shall adopt such rules for the administration of the Plan as he or she considers desirable, and may construe the Plan, correct defects, supply omissions, and reconcile inconsistencies to the extent necessary to effectuate the Plan. Any actions taken pursuant to this paragraph are discretionary actions of the Administrator, and shall be conclusive and binding on all parties, subject to the claims procedure in Section 5.
|
|
D.
|
Addresses and Telephone Numbers. The business address of the Company is 2002 Papa John’s Boulevard, Louisville, Kentucky 40299-2367 and the telephone number is (502) 261-7272.
|
|
E.
|
Application for Benefits or Inquiries. Any application for benefits, claims, requests for information, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted to the Administrator in writing, by mail, addressed to the Administrator, Papa John’s International, Inc., 2002 Papa John’s Boulevard, Louisville, Kentucky 40299-2367, Attention: Head of Human Resources.
|
|
F.
|
Type of Plan. The Plan is an employee welfare benefit plan designed to provide severance benefits to certain eligible employees whose employment with the Company terminates under certain prescribed conditions.
|
|
G.
|
Service of Process. The Company has been designated as the agent for the service of legal process.
|
|
H.
|
Funding. Plan benefits are not paid from a trust or similar funding arrangement. The Plan is self-funded by the Company.
|
Section 2.
|
Eligibility for Participation and Severance Benefits.
|
|
A.
|
The Company will provide the severance benefits set forth in this Plan to regular full-time employees of the Company that work at least 32 hours per week, who experience a loss of employment due to a reduction in force (RIF), permanent layoff, position elimination or, for Vice Presidents and above, termination of employment by the Company without cause. Notwithstanding the foregoing, (i) restaurant level team members below the level of Director of Operations are not eligible to participate in this Plan and (ii) only U.S. employees of the Company or a subsidiary of the Company designated by the Administrator to be within the scope of the Plan may be considered eligible to participate in this Plan. All decisions with respect to eligibility to participate in the Plan or eligibility for severance benefits under the Plan will be made by the Administrator, subject to the claims procedure contained in Section 5 below.
|
|
B.
|
The Severance Schedule set forth in the attachment to this summary plan description provides the amount of severance payment for which employees will be eligible in connection with any termination of employment resulting from a RIF, permanent layoff, position elimination, and for Vice Presidents and above, termination of employment by the Company without cause. The Severance Schedule may be modified only upon the approval of The Board of Directors of the Company (the “Board”) or the Compensation Committee of the Board. The Chief Executive Officer of the Company determines all position levels within the Severance Schedule. All amounts set forth on the Severance Schedule are in addition to payout of credited but unused vacation time, which such credited but unused vacation time shall be paid in a lump sum in the first regularly scheduled payroll following the date of the termination of employment in accordance with Company policy.
|
|
C.
|
For purposes of this Plan, “cause” means, as determined by the Board, and unless otherwise defined in an employment agreement between the eligible employee and the Company, (i) gross negligence or willful misconduct in connection with the performance of duties; (ii) conviction of a criminal offense (other than minor traffic offenses) that is, or may reasonably be expected to be, injurious to the Company, its business, reputation, prospects, or otherwise; (iii) material breach of any term of any agreement between the eligible employee and the Company, including any employment, consulting or other services, confidentiality, intellectual property, non-competition or non-disparagement agreement; (iv) acts or omissions involving willful or intentional malfeasance or misconduct that is, or may reasonably be expected to be, injurious to the Company, its business, reputation, prospects, or otherwise; or (v) commission of any act of fraud or embezzlement against the Company.
|
|
D.
|
If the severance is in connection with the sale or transfer of a facility or the Company to a third party, and the employee accepts employment with the party acquiring the facility or declines a reasonable and comparable position with the acquiring party, that employee will not be entitled to any severance payment from the Company.
|
|
E.
|
If the severance is in connection with an internal restructuring within the Company, and the employee accepts a new position with the Company or declines a reasonable and comparable position with the Company, that employee will not be entitled to any severance payment from the Company
|
|
F.
|
No Duplication of Benefits. This Plan may not constitute all of the agreements between the eligible employees and the Company providing for severance payments in connection with a termination of employment; provided, however, that if an eligible employee is entitled to severance payments pursuant to this Plan and pursuant to any other oral or written agreements, commitments or understandings calling for severance payments in connection with a termination of employment, the severance payments paid to the employee by the Company in connection with such termination of employment shall be limited to the greater of (i) severance payments provided pursuant to this Plan or (ii) severance payments provided by the Company pursuant to such other oral or written agreements, commitments or understandings. If the employee is entitled to severance payments pursuant to this Plan and pursuant to any other oral or written agreements, commitments or understandings calling for severance payments in connection with a termination of employment, the employee shall determine, in the employee's sole discretion, by notice given in writing to the Company, which payments are greater.
|
Section 3.
|
Severance Administration.
|
|
A.
|
For Vice Presidents and above, the severance amount (excluding any pro-rata bonus) shall be paid as salary continuation over the severance period set forth in the Severance Schedule beginning on the first regularly scheduled payroll period coincident with or after delivery of the General Release (as defined in Section 3.E below) and expiration of any revocation period without revocation occurring. The first such cash payment shall include payment of all amounts that otherwise would have been due prior to the expiration of the revocation period for the General Release under the terms of this Plan applied as though such payments commenced immediately upon the employee’s termination of employment, and any payments made thereafter shall continue as provided herein. For Vice Presidents and above, any pro-rata bonus payable to the employee shall be paid to the employee in the same manner and at the same time that the corresponding incentive-based compensation plan bonus payments are made to current employees of the Company, but no earlier than the first regularly scheduled payroll period following the expiration of all applicable rescission periods provided by law and no later than March 15th of the year following the year in which the loss of employment occurs. For all other positions, the severance amount shall be paid in a lump sum payment coincident with or after delivery of the General Release and expiration of any revocation period without revocation occurring. Severance pay is subject to tax withholdings as required by law. In addition to the payment of the severance amount, if the employee should elect it, the employee and covered dependents shall at the expense of the Company be entitled to continued participation under the same terms and conditions in such medical and dental coverage in which the employee and the employee’s dependents were participating immediately prior to the date of termination for the time period set forth in the Severance Schedule attached to this summary plan description. Such medical and dental coverage shall be provided pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).
|
|
B.
|
Notwithstanding anything to the contrary in this Plan, to the extent any portion of an employee’s severance pay is not exempt from Section 409A of the Internal Revenue Code, but would otherwise be payable within the first six (6) months following the date of the employee’s date of termination, such severance pay will not be paid to the employee until the first payroll date of the seventh (7th) month following the date of termination.
|
|
C.
|
No employee discharged for "cause" shall be entitled to any severance payment under this Plan, unless specifically approved by the Chief Executive Officer of the Company. In addition, an employee shall not receive severance payments if employment terminates due to (i) voluntary resignation, (ii) death, (iii) disability, (iv) retirement, (v) failure to return from a leave of absence, (vi) temporary layoff, or (vii) any other reason than termination as provided in Section 2.A.
|
|
D.
|
Specific procedures for carrying out severance will be coordinated with the Human Resources Department.
|
|
E.
|
As a condition of eligibility for severance under this Plan, employees will be required to (i) execute a general release in a form satisfactory to the Company within twenty-one (21) days of termination of employment (the “General Release”), (ii) return all Company property held by such employee, (iii) hold confidential any and all information concerning the Company with respect to its business, plans and strategies, customers, operations, finances, assets (including intellectual property), employees or otherwise, (iv) cooperate with the Company to facilitate the transition of matters with which the employee is familiar or is responsible to other employees and make himself reasonably available to answer questions or give assistance after his severance from employment, (v) arbitrate any disputes between the Company and such employee and (vi) execute and deliver such forms as the Administrator in its sole discretion shall decide, including an agreement to honor the terms of any non-competition, non-solicitation and non-disparagement covenants and any other agreements, as applicable. Notwithstanding the foregoing, eligible employees will have forty-five (45) days following the date of termination to execute a General Release if such longer period is required by the Age Discrimination in Employment Act of 1967. If, in the judgment of the Administrator, the participant violates any of these conditions, the Administrator may elect to either require repayment of the severance allowance paid or discontinue the payment of severance benefits. If the twenty-one (21) day or forty-five (45) day post-termination period, as applicable, begins in one taxable year and ends in the next taxable year, regardless of when the participant executes the release during such period, the General Release will be deemed to have been executed in the later taxable year.
|
|
F.
|
All severance payments made pursuant to the terms of this Plan shall be subject to any and all Company recoupment or “clawback” policies of the Company, or required by law or regulation, whether currently in place or adopted in the future.
|
|
G.
|
Nothing in this Plan shall be construed to constitute an employment contract or a future right of employment; rather, all employment with the Company continues to be at-will.
|
|
H.
|
Except as set forth in this Plan, the Company does not have, and will not have, any obligation to provide any employee at any time in the future with any severance benefits.
|
Section 5.
|
Claims Procedure.
|
|
Any claims concerning eligibility, participation, benefits or other aspects of the Plan must be submitted in writing and directed to the Administrator within sixty (60) days of receiving the disputed benefit. Within thirty (30) days after receiving a claim, the Administrator will (i) either accept or deny the claim completely or partially and (ii) notify the participant of acceptance or denial of the claim. If a claim is partially or wholly denied, the Administrator will provide a written denial to the participant no later than thirty (30) days from receipt of the initial claim request. The written denial shall include specific reasons for the denial, specific references to the Plan provisions upon which the denial was based, a description of any additional material or information necessary for the participant to perfect the claim, an explanation of why such material is necessary and instructions on the Plan’s claim review procedure. If the Administrator requires additional time to process a claim because of special circumstances, the Administrator, in its sole discretion, may extend the period thirty (30) additional days. The Administrator must notify the participant of any such extension prior to the expiration of the thirty (30) day period commencing from the date the Administrator first received written submission of the claim.
The participant may request in writing to the Administrator a review of a denied claim within thirty (30) days of receipt of such denial. Such written request must contain an explanation as to why the participant is seeking a review. A decision on such review will be rendered in writing within thirty (30) days of the Administrator’s receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision will be rendered as soon as possible but no later than sixty (60) days after receipt of the request for review provided that written notice is provided to the participant or the participant’s authorized representative before the extension commences. A written notice affirming the denial of a claim will set forth the specific reasons for the decision and make specific reference to Plan provisions upon which the decision or appeal is based. In preparation for filing such a request for review, the employee or his or her duly authorized representative may review pertinent plan documents and employment records, and as part of the written request for review, may submit issues and comments concerning the claim. No claim may be brought before or submitted to a court of law or other governmental entity unless and until the claims process under this Section 5 has been exhausted.
|
Section 6.
|
Statement of ERISA Rights.
|
|
As a participant in the Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 ("ERISA"). ERISA provides that all Plan participants shall be entitled to:
|
|
1.
|
Examine, without charge, all Plan documents at the office of the Head of Human Resources of the Company, or such other location designated by the Administrator.
|
|
2.
|
Obtain copies of all Plan documents and other Plan information upon written request to the Administrator.
|
|
In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from exercising your rights under ERISA. If your claim for a benefit under the Plan is denied in whole or in part you must receive a written explanation of the reason for the denial. You have the right to have the Administrator review and reconsider your claim. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Administrator and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Administrator to provide the material and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. If you have any questions about your Plan, you should contact the Administrator. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest Office of the U.S. Labor-Management Services Administration, Department of Labor.
|
Section 7.
|
Termination or Amendment of the Plan.
|
|
The Company reserves the rights to amend or terminate the Plan at any time. Termination or amendment of the Plan shall not affect the rights of any employee to benefits accrued prior to such termination or amendment, as the case may be, to the extent such amount is payable under the terms of the Plan prior to the effective date of such termination or amendment. Benefits under the Plan accrue at the time employment is terminated.
|
|
●
|
Vice Presidents and above:
|
|
o
|
Six months base salary (paid over six month severance period) and COBRA coverage continuation benefits
|
|
o
|
Pro-rata portions of any bonus payouts based upon period of service during the year employment terminates under any incentive-based compensation plans then in effect (provided that any applicable performance measures are achieved)
|
|
o
|
Six months outplacement services
|
|
●
|
Sr. Directors and Directors:
|
|
o
|
Three months base salary plus one week for each year of service, with a maximum of six months total severance (paid in a lump sum)
|
|
o
|
Three months COBRA coverage continuation benefits
|
|
o
|
Three months outplacement services
|
|
●
|
Sr. Managers and Managers:
|
|
o
|
One month base salary plus one week for each year of service, with a maximum of three months total severance (paid in a lump sum)
|
|
o
|
Two months COBRA coverage continuation benefits
|
|
o
|
Two months outplacement services
|
|
●
|
All other team members:
|
|
o
|
One month base salary plus one week for each year of service, with a maximum of three months total severance (paid in a lump sum)
|
|
o
|
One month COBRA coverage continuation benefits
|
|
o
|
One month outplacement services
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date: May 1, 2012
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/s/ John H. Schnatter
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John H. Schnatter
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Founder, Chairman and
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Papa John’s International, Inc.;
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2.
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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;
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3.
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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;
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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;
|
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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
|
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d)
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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
|
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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.
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Date: May 1, 2012
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/s/ Lance F. Tucker
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Lance F. Tucker
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|
Senior Vice President and | |
Chief Financial Officer
|
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1.
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The Report on Form 10-Q of the Company for the quarterly period ended March 25, 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
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: May 1, 2012
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/s/ John H. Schnatter
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John H. Schnatter
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|
Founder, Chairman and
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|
Chief Executive Officer
|
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1.
|
The Report on Form 10-Q of the Company for the quarterly period ended March 25, 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: May 1, 2012
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/s/ Lance F. Tucker
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Lance F. Tucker
|
|
Senior Vice President and
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|
Chief Financial Officer
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Fair Value Measurements (Narrative) (Detail) (USD $)
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3 Months Ended |
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Mar. 25, 2012
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Transfers among levels within the fair value hierarchy | $ 0 |
Fair Value Measurements and Disclosures
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3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 25, 2012
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Fair Value Measurements and Disclosures |
The
Company is required to determine the fair value of financial assets
and liabilities based on the price that would be received to sell
the asset or paid to transfer the liability to a market
participant. Assets and liabilities carried at fair value are
required to be classified and disclosed in one of the following
categories:
Our
financial assets and liabilities that were measured at fair value
on a recurring basis as of March 25, 2012 and December 25, 2011 are
as follows (in thousands):
There
were no transfers among levels within the fair value hierarchy
during the three months ended March 25, 2012.
The
fair value of our interest rate swap is based on the sum of all
future net present value cash flows. The future cash flows are
derived based on the terms of our interest rate swap, as well as
considering published discount factors, and projected London
Interbank Offered Rates (“LIBOR”).
|