Delaware
(State or other jurisdiction of
incorporation or organization)
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61-1203323
(I.R.S. Employer
Identification No.)
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2002 Papa Johns Boulevard
Louisville, Kentucky
(Address of principal executive offices)
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40299-2367
(Zip Code)
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Securities registered pursuant to Section 12(b) of the Act:
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(Title of Each Class)
Common Stock, $.01 par value
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(Name of each exchange on which registered)
The NASDAQ Stock Market LLC
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Securities registered pursuant to Section 12(g) of the Act:
None
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Large accelerated filer [X]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company [ ]
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Page
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2
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3
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4
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30
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71
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73
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·
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Item 6–Selected Financial Data
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·
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Item 7–Management’s Discussion and Analysis of Financial Condition and Results of Operations
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·
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Item 8–Financial Statements and Supplementary Data
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·
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Item 9A–Controls and Procedures
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·
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Item 15–Exhibits, Financial Statement Schedules
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(In thousands, except per share data)
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Year Ended (1)
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|||||||||||||||||||
Dec. 25,
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Dec. 26,
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Dec. 27,
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Dec. 28,
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Dec. 30,
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||||||||||||||||
2011
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2010
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2009
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2008
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2007
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||||||||||||||||
(As Restated)
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(As Restated)
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(As Restated)
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||||||||||||||||||
Income Statement Data
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||||||||||||||||||||
North America revenues:
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||||||||||||||||||||
Domestic Company-owned restaurant sales
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$ | 525,841 | $ | 503,272 | $ | 503,818 | $ | 533,255 | $ | 504,330 | ||||||||||
Franchise royalties (2) (3)
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73,694 | 69,631 | 62,083 | 60,592 | 56,278 | |||||||||||||||
Franchise and development fees (2)
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722 | 610 | 912 | 1,722 | 4,767 | |||||||||||||||
Domestic commissary sales
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508,155 | 454,506 | 417,689 | 431,650 | 401,081 | |||||||||||||||
Other sales
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50,912 | 51,951 | 54,045 | 61,415 | 61,820 | |||||||||||||||
International revenues:
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||||||||||||||||||||
Royalties and franchise and development fees (2) (4)
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16,327 | 13,265 | 11,780 | 11,858 | 9,310 | |||||||||||||||
Restaurant and commissary sales (5)
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42,231 | 33,162 | 28,223 | 25,849 | 20,860 | |||||||||||||||
Total revenues
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1,217,882 | 1,126,397 | 1,078,550 | 1,126,341 | 1,058,446 | |||||||||||||||
Operating income (6)
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87,017 | 86,744 | 95,218 | 65,486 | 53,072 | |||||||||||||||
Investment income
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755 | 875 | 629 | 848 | 1,446 | |||||||||||||||
Interest expense
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(2,981 | ) | (4,309 | ) | (11,660 | ) | (7,536 | ) | (7,465 | ) | ||||||||||
Income before income taxes
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84,791 | 83,310 | 84,187 | 58,798 | 47,053 | |||||||||||||||
Income tax expense
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26,324 | 27,247 | 26,702 | 19,980 | 13,293 | |||||||||||||||
Net income, including redeemable noncontrolling interests
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58,467 | 56,063 | 57,485 | 38,818 | 33,760 | |||||||||||||||
Income attributable to redeemable noncontrolling interests (7)
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(3,732 | ) | (3,485 | ) | (3,756 | ) | (2,022 | ) | (1,025 | ) | ||||||||||
Net income, net of redeemable noncontrolling interests
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$ | 54,735 | $ | 52,578 | $ | 53,729 | $ | 36,796 | $ | 32,735 | ||||||||||
Basic earnings per common share
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$ | 2.19 | $ | 2.00 | $ | 1.94 | $ | 1.31 | $ | 1.10 | ||||||||||
Earnings per common share - assuming dilution
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$ | 2.16 | $ | 1.99 | $ | 1.93 | $ | 1.30 | $ | 1.09 | ||||||||||
Basic weighted average shares outstanding
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25,043 | 26,328 | 27,738 | 28,124 | 29,666 | |||||||||||||||
Diluted weighted average shares outstanding
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25,310 | 26,468 | 27,909 | 28,264 | 30,017 | |||||||||||||||
Balance Sheet Data
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Total assets
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$ | 390,382 | $ | 417,492 | $ | 396,009 | $ | 385,464 | $ | 400,885 | ||||||||||
Total debt
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51,489 | 99,017 | 99,050 | 130,654 | 142,706 | |||||||||||||||
Mandatorily redeemable noncontrolling interest (8)
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11,065 | 9,972 | 10,960 | - | - | |||||||||||||||
Redeemable noncontrolling interests
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3,965 | 3,512 | 3,215 | 3,414 | 2,885 | |||||||||||||||
Total stockholders’ equity
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205,647 | 195,608 | 173,145 | 134,824 | 132,053 |
(1)
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We operate on a 52-53 week fiscal year ending on the last Sunday of December of each year. All fiscal years presented consisted of 52 weeks.
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(2)
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Prior years’ financial data has been adjusted to reclassify revenues for restaurants operating in Hawaii, Alaska and Canada from international to North America franchising in order to conform to the current year presentation.
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(3)
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North America franchise royalties were derived from franchised restaurant sales of $1.71 billion in 2011, $1.62 billion in 2010, $1.58 billion in 2009, $1.53 billion in 2008 and $1.49 billion in 2007.
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(4)
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International royalties were derived from franchised restaurant sales of $320.0 million in 2011, $258.8 million in 2010, $222.2 million in 2009, $196.5 million in 2008 and $152.5 million in 2007.
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(5)
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Restaurant sales for international Company-owned restaurants were $12.4 million in 2011, $11.0 million in 2010, $10.3 million in 2009, $8.1 million in 2008 and $4.0 million in 2007.
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(6)
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The operating results include the consolidation of 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 and $31.0 million in 2007 (breakeven results in 2011). Operating income includes domestic and international restaurant closure, impairment and disposition gains of $86,000 in 2011 and losses of $253,000 in 2010, $657,000 in 2009, $8.8 million in 2008 and $1.8 million in 2007. See “Notes 3 and 6” of “Notes to Consolidated Financial Statements” for additional information.
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(7)
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Represents the redeemable noncontrolling interests’ allocation of income for our joint venture arrangements.
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(8)
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Manditorily redeemable noncontrolling interest is included in other long-term liabilities in the consolidated balance sheets.
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Year Ended (1)
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Dec. 25,
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Dec. 26,
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Dec. 27,
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||||||||||
2011
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2010
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2009
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||||||||||
(As Restated) | (As Restated) | (As Restated) | ||||||||||
Income Statement Data:
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||||||||||||
North America revenues:
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||||||||||||
Domestic Company-owned restaurant sales
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43.2 | % | 44.7 | % | 46.7 | % | ||||||
Franchise royalties
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6.1 | 6.2 | 5.8 | |||||||||
Franchise and development fees
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0.1 | 0.0 | 0.1 | |||||||||
Domestic commissary sales
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41.7 | 40.4 | 38.7 | |||||||||
Other sales
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4.2 | 4.6 | 5.0 | |||||||||
International revenues:
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Royalties and franchise and development fees
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1.3 | 1.2 | 1.1 | |||||||||
Restaurant and commissary sales
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3.4 | 2.9 | 2.6 | |||||||||
Total revenues
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100.0 | 100.0 | 100.0 | |||||||||
Costs and expenses:
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||||||||||||
Domestic Company-owned restaurant cost of sales (2)
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24.1 | 22.1 | 20.0 | |||||||||
Domestic Company-owned restaurant operating expenses (2)
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56.9 | 57.7 | 58.2 | |||||||||
Domestic commissary and other expenses (3)
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92.2 | 91.4 | 90.2 | |||||||||
Income from the franchise cheese purchasing
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||||||||||||
program, net of minority interest (4)
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0.0 | (0.5 | ) | (1.7 | ) | |||||||
International operating expenses (5)
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84.5 | 88.7 | 86.3 | |||||||||
General and administrative expenses
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9.2 | 9.8 | 10.3 | |||||||||
Other general expenses
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0.8 | 0.8 | 1.3 | |||||||||
Depreciation and amortization
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2.7 | 2.9 | 2.9 | |||||||||
Total costs and expenses
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92.9 | 92.3 | 91.2 | |||||||||
Operating income
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7.1 | 7.7 | 8.8 | |||||||||
Net interest expense
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(0.1 | ) | (0.3 | ) | (1.0 | ) | ||||||
Income before income taxes
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7.0 | 7.4 | 7.8 | |||||||||
Income tax expense
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2.2 | 2.4 | 2.5 | |||||||||
Net income, including redeemable noncontrolling interests
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4.8 | 5.0 | 5.3 | |||||||||
Income attributable to redeemable noncontrolling interests
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(0.3 | ) | (0.3 | ) | (0.3 | ) | ||||||
Net income, net of redeemable noncontrolling interests
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4.5 | % | 4.7 | % | 5.0 | % |
Year Ended (1)
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Dec. 25,
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Dec. 26,
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Dec. 27,
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||||||||||
2011
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2010
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2009
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Restaurant Data:
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Percentage increase (decrease) in comparable domestic
|
||||||||||||
Company-owned restaurant sales (6)
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4.1 | % | (0.6 | %) | (0.5 | %) | ||||||
Number of Company-owned restaurants included in the
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||||||||||||
most recent full year's comparable restaurant base
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582 | 578 | 559 | |||||||||
Average sales for Company-owned restaurants included
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in the most recent comparable restaurant base
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$ | 897,000 | $ | 863,000 | $ | 869,000 | ||||||
Papa John's Restaurant Progression:
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||||||||||||
North America Company-owned:
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||||||||||||
Beginning of period
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591 | 588 | 592 | |||||||||
Opened
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8 | 5 | 5 | |||||||||
Closed
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(1 | ) | (2 | ) | (8 | ) | ||||||
Acquired from franchisees
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- | - | 11 | |||||||||
Sold to franchisees
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- | - | (12 | ) | ||||||||
End of period
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598 | 591 | 588 | |||||||||
International Company-owned:
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||||||||||||
Beginning of period
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21 | 26 | 23 | |||||||||
Opened
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9 | 8 | 4 | |||||||||
Closed
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- | (2 | ) | (1 | ) | |||||||
Acquired from franchisees
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- | 1 | - | |||||||||
Sold to franchisees
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- | (12 | ) | - | ||||||||
End of period
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30 | 21 | 26 | |||||||||
North America franchised (7):
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Beginning of period
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2,346 | 2,246 | 2,243 | |||||||||
Opened
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166 | 182 | 93 | |||||||||
Closed
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(49 | ) | (82 | ) | (91 | ) | ||||||
Acquired from Company
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- | - | 12 | |||||||||
Sold to Company
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- | - | (11 | ) | ||||||||
End of period
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2,463 | 2,346 | 2,246 | |||||||||
International franchised (7):
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Beginning of period
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688 | 609 | 522 | |||||||||
Opened
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138 | 130 | 114 | |||||||||
Closed
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(34 | ) | (62 | ) | (27 | ) | ||||||
Acquired from Company
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- | 12 | - | |||||||||
Sold to Company
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- | (1 | ) | - | ||||||||
End of period
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792 | 688 | 609 | |||||||||
Total Papa John's restaurants - end of period
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3,883 | 3,646 | 3,469 |
(1)
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We operate on a fiscal year ending on the last Sunday of December of each year.
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(2)
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As a percentage of domestic Company-owned restaurant sales.
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(3)
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As a percentage of domestic commissary sales and other sales on a combined basis.
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(4)
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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.
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(5)
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As a percentage of international restaurant and commissary sales.
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(6)
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Includes only Company-owned restaurants open throughout the periods being compared.
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(7)
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Restaurant unit data for 2010 and 2009 has been adjusted to reflect the reclassification of restaurants operating in Hawaii, Alaska and Canada from international franchised to North America franchised in order to conform to the current year presentation.
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·
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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%.
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·
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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.
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·
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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.
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·
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International revenues increased $12.1 million, or 26.1% in 2011, primarily due to an increase in the number of restaurants and an increase in comparable sales of 5.1%, calculated on a constant dollar basis. In 2010, the international segment included revenues from Company-owned restaurants located in the United Kingdom, which were sold in the third quarter of 2010.
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Increase
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||||||||||||
2011
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2010
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(Decrease)
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(As Restated)
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(As Restated)
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Domestic Company-owned restaurants
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$ | 28,980 | $ | 31,619 | $ | (2,639 | ) | |||||
Domestic commissaries *
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30,532 | 14,188 | 16,344 | |||||||||
North America franchising
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66,222 | 62,229 | 3,993 | |||||||||
International
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(165 | ) | (4,771 | ) | 4,606 | |||||||
All others
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(441 | ) | 1,847 | (2,288 | ) | |||||||
Unallocated corporate expenses
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(39,727 | ) | (42,237 | ) | 2,510 | |||||||
Elimination of intersegment profits
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(610 | ) | (519 | ) | (91 | ) | ||||||
Income before income taxes, excluding BIBP
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84,791 | 62,356 | 22,435 | |||||||||
BIBP, a variable interest entity *
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- | 20,954 | (20,954 | ) | ||||||||
Total income before income taxes
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$ | 84,791 | $ | 83,310 | $ | 1,481 |
*
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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.
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·
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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.
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·
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Domestic Commissary Segment. Domestic commissaries’ income before income taxes increased $16.3 million in 2011 over the comparable 2010 period comprised of the following (in thousands):
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Year Ended December 25, 2011
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Year Ended December 26, 2010
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Increase
|
||||||||||
Income before income taxes, excluding the
|
||||||||||||
BIBP Settlement
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$ | 30,532 | $ | 28,338 | $ | 2,194 | ||||||
BIBP Settlement
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- | (14,150 | ) | 14,150 | ||||||||
Total segment income before income taxes
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$ | 30,532 | $ | 14,188 | $ | 16,344 |
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Domestic commissaries’ income before income taxes, excluding the BIBP Settlement, increased $2.2 million over the prior year. The increase was due to a higher operating income dollar margin attributable to higher sales volumes, partially offset by increased costs attributable to higher fuel prices.
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·
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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.
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·
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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.
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·
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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.
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·
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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):
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Year Ended
|
Year Ended
|
|||||||||||
December 25,
|
December 26,
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Increase
|
||||||||||
2011
|
2010
|
(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)
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533 | (2,039 | ) | 2,572 | ||||||||
Total unallocated corporate expenses
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$ | 39,727 | $ | 42,237 | $ | (2,510 | ) |
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(a)
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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 an increase in the redemption value of a mandatorily redeemable noncontrolling interest in a joint venture. See “Notes 1, 2, and 20” of the “Notes to Consolidated Financial Statements” for additional information.
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(c)
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In 2010, we provided discretionary contributions to the Marketing Fund 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.
|
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(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)
|
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 breakeven results for the first two months of 2011, at which time we terminated the purchasing arrangement with BIBP.
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|
|
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)
|
BIBP’s income before income taxes for the year ended December 26, 2010, was $6.8 million, excluding the BIBP Settlement.
|
Year Ended
|
Year Ended
|
|||||||||||||||
December 25, 2011
|
December 26, 2010
|
|||||||||||||||
Domestic Company-owned
|
North America Franchised
|
Domestic Company-owned
|
North America Franchised
|
|||||||||||||
Total domestic units (end of period)
|
598 | 2,463 | 591 | 2,346 | ||||||||||||
Equivalent units
|
589 | 2,332 | 586 | 2,231 | ||||||||||||
Comparable sales base units
|
581 | 2,135 | 577 | 2,074 | ||||||||||||
Comparable sales base percentage
|
98.6 | % | 91.6 | % | 98.5 | % | 93.0 | % | ||||||||
Average weekly sales - comparable units
|
$ | 17,248 | $ | 14,459 | $ | 16,599 | $ | 14,057 | ||||||||
Average weekly sales - total non-comparable units
|
$ | 11,218 | $ | 10,708 | $ | 11,562 | $ | 12,177 | ||||||||
Average weekly sales - all units
|
$ | 17,164 | $ | 14,142 | $ | 16,521 | $ | 13,924 |
|
·
|
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 expense (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 Marketing Fund 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.
|
|
·
|
Franchise royalties revenue increased $7.5 million primarily due to an increase in the royalty rate (the standard royalty rate for the majority of domestic franchise restaurants increased from 4.25% at the beginning of 2009 to 4.50% in September 2009 and increased to 4.75% in the first quarter of 2010).
|
|
·
|
Domestic commissary sales increased $36.8 million primarily due to an increase in sales volumes.
|
|
·
|
International revenues increased $6.4 million primarily due to an increase in the number of our franchised international restaurants.
|
Increase
|
||||||||||||
2010
|
2009
|
(Decrease)
|
||||||||||
(As Restated)
|
(As Restated)
|
|||||||||||
Domestic Company-owned restaurants
|
$ | 31,619 | $ | 34,894 | $ | (3,275 | ) | |||||
Domestic commissaries *
|
14,188 | 29,393 | (15,205 | ) | ||||||||
North America franchising
|
62,229 | 55,008 | 7,221 | |||||||||
International
|
(4,771 | ) | (4,368 | ) | (403 | ) | ||||||
All others
|
1,847 | 2,697 | (850 | ) | ||||||||
Unallocated corporate expenses
|
(42,237 | ) | (55,762 | ) | 13,525 | |||||||
Elimination of intersegment profits
|
(519 | ) | (218 | ) | (301 | ) | ||||||
Income before income taxes, excluding BIBP
|
62,356 | 61,644 | 712 | |||||||||
BIBP, a variable interest entity *
|
20,954 | 22,543 | (1,589 | ) | ||||||||
Total income before income taxes
|
$ | 83,310 | $ | 84,187 | $ | (877 | ) |
*
|
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 $3.3 million from the prior comparable period. The decrease was primarily due to a decline in operating margin from lower average ticket prices due to increased levels of discounting, partially offset by increased customer traffic and reductions in labor costs as a result of labor efficiencies from implemented initiatives. The 2009 period included restaurant closure costs of approximately $700,000. There were no significant closure costs in 2010.
|
|
·
|
Domestic Commissary Segment. Domestic commissaries’ income before income taxes decreased $15.2 million in 2010 over the prior year, comprised of the following (in thousands):
|
Year Ended December 26, 2010
|
Year Ended December 27, 2009
|
Decrease
|
||||||||||
Income before income taxes, excluding the
|
||||||||||||
BIBP Settlement
|
$ | 28,338 | $ | 29,393 | $ | (1,055 | ) | |||||
BIBP Settlement
|
(14,150 | ) | - | (14,150 | ) | |||||||
Total segment income before income taxes
|
$ | 14,188 | $ | 29,393 | $ | (15,205 | ) |
|
·
|
North America Franchising Segment. North America franchising income before income taxes increased approximately $7.2 million to $62.2 million in 2010, from $55.0 million in 2009. The increase was primarily due to an increase in franchise royalties (the standard royalty rate increased from 4.25% to 4.50% in September 2009, and increased to 4.75% in the first quarter of 2010). The impact of the royalty rate increase was partially offset by the impact of development incentive programs offered by the Company in 2009 and 2010. Franchise and development fees were approximately $200,000 lower in 2010 than in the corresponding period, despite an increase of 90 domestic unit openings during 2010 due to development incentive programs in place. Additionally, we incurred incentive costs of $1.0 million in 2010, compared to $440,000 in 2009.
|
|
·
|
International Segment. The international segment reported operating losses of approximately $4.8 million in 2010 and $4.4 million in 2009. The increase in operating losses was due to increased personnel and franchise support costs as well as from costs associated with the opening of our new commissary in the United Kingdom, partially offset by increased revenues due to growth in the number of international units.
|
|
·
|
All Others Segment. Income before income taxes for the “All others” reporting segment decreased approximately $850,000 in 2010 as compared to 2009. The decrease was primarily due to increased costs in our online ordering business due to increased infrastructure and support attributable to the new online ordering system introduced in October 2010. This decline was partially offset by an improvement in operating results at Preferred, primarily due to cost reductions implemented in 2009 and 2010.
|
|
·
|
Unallocated Corporate Segment. Unallocated corporate expenses decreased approximately $6.5 million in 2010 as compared to 2009. The components of unallocated corporate expenses were as follows (in thousands):
|
Year Ended
|
Year Ended
|
|||||||||||
December 26, 2010
|
December 27, 2009
|
Increase (Decrease)
|
||||||||||
(As Restated)
|
(As Restated)
|
|||||||||||
General and administrative (a)
|
$ | 25,823 | $ | 26,893 | $ | (1,070 | ) | |||||
Net interest (b)
|
3,091 | 10,258 | (7,167 | ) | ||||||||
Depreciation
|
8,873 | 8,684 | 189 | |||||||||
Franchise support initiatives (c)
|
6,489 | 9,556 | (3,067 | ) | ||||||||
Provision (credit) for uncollectible
|
||||||||||||
accounts and notes receivable (d)
|
(340 | ) | 1,172 | (1,512 | ) | |||||||
Other income (e)
|
(1,699 | ) | (801 | ) | (898 | ) | ||||||
Total unallocated corporate expenses
|
$ | 42,237 | $ | 55,762 | $ | (13,525 | ) |
|
(a)
|
Unallocated general and administrative costs decreased in 2010 due to lower salaries and benefits, resulting from fewer employees and the fact that the prior year included $800,000 in litigation settlement costs. Severance costs, net of forfeitures of unvested stock awards, were also approximately $400,000 lower in 2010. These reductions were partially offset by an increase in short-term incentive compensation expense.
|
|
(b)
|
The decrease in net interest expense in 2010 was primarily due to a decrease of approximately $1.0 million in the redemption value of a mandatorily redeemable noncontrolling interest in a joint venture. In addition, net interest expense in 2009 reflects the impact of the addition of a mandatory redemption feature through a contract amendment in the third quarter of 2009 for one of our noncontrolling interests and the associated remeasurement to its redemption value, which was $6.0 million of additional interest expense in 2009. See “Notes 1, 2 and 20” of the “Notes to Consolidated Financial Statements” for additional information.
|
|
(c)
|
Franchise support initiatives primarily consist of discretionary contributions to the Marketing Fund and other local advertising cooperatives.
|
|
(d)
|
The reduction in the provision for uncollectible accounts and notes receivable was primarily due to the collection of certain accounts that were previously reserved.
|
|
(e)
|
The increase in other income was primarily due to sales of point-of-sale systems associated with additional domestic openings.
|
|
·
|
Variable Interest Entities. BIBP generated income before income taxes of $21.0 million in 2010, compared to $22.5 million in 2009. 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 26, 2010 and December 27, 2009 (in thousands):
|
Year Ended
|
||||||||
December 26, 2010
|
December 27, 2009
|
|||||||
BIBP sales
|
$ | 153,014 | $ | 142,407 | ||||
Cost of sales
|
131,549 | 118,825 | ||||||
General and administrative expenses
|
91 | 233 | ||||||
Total costs and expenses
|
131,640 | 119,058 | ||||||
Operating income
|
21,374 | 23,349 | ||||||
Interest expense
|
(420 | ) | (806 | ) | ||||
Income before income taxes (a)
|
$ | 20,954 | $ | 22,543 |
|
(a)
|
Income before income taxes for the year ended December 26, 2010, was $6.8 million, excluding the BIBP Settlement.
|
Year Ended
|
Year Ended
|
|||||||||||||||
December 26, 2010
|
December 27, 2009
|
|||||||||||||||
Domestic Company-owned
|
North America Franchised
|
Domestic Company-owned
|
North America Franchised
|
|||||||||||||
Total domestic units (end of period)
|
591 | 2,346 | 588 | 2,193 | ||||||||||||
Equivalent units
|
586 | 2,231 | 585 | 2,140 | ||||||||||||
Comparable sales base units
|
577 | 2,074 | 569 | 2,026 | ||||||||||||
Comparable sales base percentage
|
98.5 | % | 93.0 | % | 97.3 | % | 94.7 | % | ||||||||
Average weekly sales - comparable units
|
$ | 16,599 | $ | 14,057 | $ | 16,628 | $ | 13,948 | ||||||||
Average weekly sales - total non-comparable units
|
$ | 11,562 | $ | 12,177 | $ | 13,902 | $ | 14,234 | ||||||||
Average weekly sales - all units
|
$ | 16,521 | $ | 13,924 | $ | 16,551 | $ | 13,963 |
|
·
|
Cost of sales were 1.3% higher (excluding the consolidation of BIBP) in 2010 as compared to 2009 due to increased discounting of prices to customers.
|
|
·
|
Salaries and benefits were 1.6% lower as a percentage of sales in 2010 compared to 2009, primarily due to labor efficiencies from implemented initiatives, and a change in pay practices for certain team members.
|
|
·
|
Advertising and related costs as a percentage of sales were 0.3% higher in 2010 due to an increase in local marketing initiatives.
|
|
·
|
Occupancy costs and other operating costs, on a combined basis, as a percentage of sales, were 0.8% higher in 2010 primarily due to increased reimbursement rates for certain team members, in connection with previously noted labor initiatives.
|
Increase
|
||||||||||||
2010
|
2009
|
(Decrease)
|
||||||||||
Impairment and disposition losses
|
$ | 894 | $ | 1,829 | $ | (935 | ) | |||||
Provision (credit) for uncollectible accounts and notes receivable (a)
|
(27 | ) | 1,378 | (1,405 | ) | |||||||
Pre-opening restaurant costs
|
149 | 75 | 74 | |||||||||
Franchise support initiatives (b)
|
6,489 | 9,556 | (3,067 | ) | ||||||||
Franchise incentives (c)
|
1,044 | 440 | 604 | |||||||||
Commissary closing costs
|
- | 369 | (369 | ) | ||||||||
Other
|
481 | 699 | (218 | ) | ||||||||
Total other general expenses
|
$ | 9,030 | $ | 14,346 | $ | (5,316 | ) |
(a)
|
The reduction in provision (credit) for uncollectible accounts and notes receivable was primarily due to the collection of certain accounts that were previously reserved.
|
(b)
|
Franchise support initiatives primarily consist of discretionary contributions to the Marketing Fund and other local advertising cooperatives.
|
(c)
|
Franchise incentives include incentives to franchisees for opening new restaurants.
|
2011
|
2010
|
|||||||
Revolving line of credit
|
$ | 51,489 | $ | 99,000 | ||||
Other
|
- | 17 | ||||||
Total long-term debt
|
$ | 51,489 | $ | 99,017 |
Permitted Ratio
|
Actual Ratio for the Year Ended December 25, 2011
|
|||
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
|
Year Ended
|
||||||||||||
Dec. 25,
|
Dec. 26,
|
Dec. 27,
|
||||||||||
2011
|
2010
|
2009
|
||||||||||
Net cash provided by operating activities
|
$ | 101,008 | $ | 92,581 | $ | 103,826 | ||||||
Gain from BIBP cheese purchasing entity
|
- | (6,804 | ) | (22,543 | ) | |||||||
Purchase of property and equipment
|
(29,319 | ) | (31,125 | ) | (33,538 | ) | ||||||
Free cash flow (a)
|
$ | 71,689 | $ | 54,652 | $ | 47,745 |
|
(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 “Non-GAAP Measures” above 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
|
|||||||||
2009
|
1,319 | $28,477 | $21.59 | |||||||||
2010
|
1,881 | $46,936 | $24.95 | |||||||||
2011
|
2,084 | $65,323 | $31.35 |
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)
|
$ | - | $ | - | $ | 51,489 | $ | - | $ | 51,489 | ||||||||||
Interest payments (2)
|
667 | 1,149 | 1,029 | - | 2,845 | |||||||||||||||
Total debt
|
667 | 1,149 | 52,518 | - | 54,334 | |||||||||||||||
Operating leases
|
29,760 | 48,824 | 30,556 | 29,703 | 138,843 | |||||||||||||||
Total contractual obligations
|
$ | 30,427 | $ | 49,973 | $ | 83,074 | $ | 29,703 | $ | 193,177 |
(1)
|
We utilize an interest rate swap to hedge against rising interest rates. The value of our interest rate swap was $11,000 at December 25, 2011 and was recorded in other long-term assets in the consolidated balance sheet.
|
(2)
|
Represents estimated interest payments on our revolving line of credit balance outstanding as of December 25, 2011. The interest payments assume the outstanding balance on our $175.0 million unsecured revolving line of credit will remain at $51.5 million until the maturity date of November, 2016. Interest payments are calculated based on LIBOR plus the applicable margin in effect at December 25, 2011, after considering the interest rate swap agreement in effect until August, 2013. 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 7” 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
|
$ | 1,078 | $ | 13,439 | $ | 0 | $ | 0 | $ | 14,517 |
|
·
|
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.
|
Papa John’s International, Inc. and Subsidiaries
|
||||||||||||
Consolidated Statements of Income
|
||||||||||||
(In thousands, except per share amounts)
|
Years Ended
|
|||||||||||
December 25,
|
December 26,
|
December 27,
|
||||||||||
2011
|
2010
|
2009
|
||||||||||
(As Restated)
|
(As Restated)
|
(As Restated)
|
||||||||||
North America revenues:
|
||||||||||||
Domestic Company-owned restaurant sales
|
$ | 525,841 | $ | 503,272 | $ | 503,818 | ||||||
Franchise royalties
|
73,694 | 69,631 | 62,083 | |||||||||
Franchise and development fees
|
722 | 610 | 912 | |||||||||
Domestic commissary sales
|
508,155 | 454,506 | 417,689 | |||||||||
Other sales
|
50,912 | 51,951 | 54,045 | |||||||||
International revenues:
|
||||||||||||
Royalties and franchise and development fees
|
16,327 | 13,265 | 11,780 | |||||||||
Restaurant and commissary sales
|
42,231 | 33,162 | 28,223 | |||||||||
Total revenues
|
1,217,882 | 1,126,397 | 1,078,550 | |||||||||
Costs and expenses:
|
||||||||||||
Domestic Company-owned restaurant expenses:
|
||||||||||||
Cost of sales
|
126,887 | 111,010 | 100,863 | |||||||||
Salaries and benefits
|
142,093 | 137,840 | 146,116 | |||||||||
Advertising and related costs
|
49,035 | 47,174 | 45,593 | |||||||||
Occupancy costs
|
32,278 | 32,343 | 31,685 | |||||||||
Other operating expenses
|
75,558 | 72,997 | 69,946 | |||||||||
Total domestic Company-owned restaurant expenses
|
425,851 | 401,364 | 394,203 | |||||||||
Domestic commissary and other expenses:
|
||||||||||||
Cost of sales
|
426,955 | 382,150 | 348,265 | |||||||||
Salaries and benefits
|
35,141 | 34,063 | 33,839 | |||||||||
Other operating expenses
|
53,188 | 46,890 | 43,595 | |||||||||
Total domestic commissary and other expenses
|
515,284 | 463,103 | 425,699 | |||||||||
Income from the franchise cheese-purchasing program,
|
||||||||||||
net of noncontrolling interest
|
- | (5,634 | ) | (18,079 | ) | |||||||
International operating expenses
|
35,674 | 29,429 | 24,356 | |||||||||
General and administrative expenses
|
111,608 | 109,954 | 111,361 | |||||||||
Other general expenses
|
9,767 | 9,030 | 14,346 | |||||||||
Depreciation and amortization
|
32,681 | 32,407 | 31,446 | |||||||||
Total costs and expenses
|
1,130,865 | 1,039,653 | 983,332 | |||||||||
Operating income
|
87,017 | 86,744 | 95,218 | |||||||||
Investment income
|
755 | 875 | 629 | |||||||||
Interest expense
|
(2,981 | ) | (4,309 | ) | (11,660 | ) | ||||||
Income before income taxes
|
84,791 | 83,310 | 84,187 | |||||||||
Income tax expense
|
26,324 | 27,247 | 26,702 | |||||||||
Net income, including redeemable noncontrolling interests
|
58,467 | 56,063 | 57,485 | |||||||||
Income attributable to redeemable noncontrolling interests
|
(3,732 | ) | (3,485 | ) | (3,756 | ) | ||||||
Net income, net of redeemable noncontrolling interests
|
$ | 54,735 | $ | 52,578 | $ | 53,729 | ||||||
Basic earnings per common share
|
$ | 2.19 | $ | 2.00 | $ | 1.94 | ||||||
Earnings per common share - assuming dilution
|
$ | 2.16 | $ | 1.99 | $ | 1.93 | ||||||
Basic weighted average shares outstanding
|
25,043 | 26,328 | 27,738 | |||||||||
Diluted weighted average shares outstanding
|
25,310 | 26,468 | 27,909 | |||||||||
Supplemental data (see Note 14):
|
||||||||||||
Revenues - affiliates
|
$ | 28,078 | $ | 24,290 | $ | 22,473 | ||||||
Other income - affiliates
|
- | - | 57 | |||||||||
See accompanying notes.
|
Papa John's International, Inc. and Subsidiaries
|
||||||||||||
Consolidated Statements of Comprehensive Income
|
||||||||||||
(In thousands)
|
Years Ended
|
|||||||||||
December 25,
|
December 26,
|
December 27,
|
||||||||||
2011
|
2010
|
2009
|
||||||||||
(As Restated)
|
(As Restated)
|
(As Restated)
|
||||||||||
Net income, including redeemable noncontrolling interests
|
$ | 58,467 | $ | 56,063 | $ | 57,485 | ||||||
Other comprehensive income (loss), before tax:
|
||||||||||||
Foreign currency translation adjustments
|
864 | (523 | ) | 1,310 | ||||||||
Interest rate swaps
|
258 | 3,756 | 2,169 | |||||||||
Defined benefit pension plan
|
(45 | ) | 83 | 58 | ||||||||
Other comprehensive income, before tax
|
1,077 | 3,316 | 3,537 | |||||||||
Income tax effect:
|
||||||||||||
Interest rate swaps
|
(93 | ) | (1,352 | ) | (781 | ) | ||||||
Defined benefit pension plan
|
16 | (31 | ) | (22 | ) | |||||||
Income tax effect
|
(77 | ) | (1,383 | ) | (803 | ) | ||||||
Other comprehensive income, net of tax
|
1,000 | 1,933 | 2,734 | |||||||||
Comprehensive income, including redeemable noncontrolling interests
|
59,467 | 57,996 | 60,219 | |||||||||
Comprehensive income, redeemable noncontrolling interests
|
(3,732 | ) | (3,485 | ) | (3,756 | ) | ||||||
Comprehensive income, net of redeemable noncontrolling interests
|
$ | 55,735 | $ | 54,511 | $ | 56,463 | ||||||
See accompanying notes.
|
Papa John’s International, Inc. and Subsidiaries
|
||||||||
Consolidated Balance Sheets
|
||||||||
Years Ended
|
||||||||
December 25,
|
December 26,
|
|||||||
(In thousands, except per share amounts)
|
2011
|
2010
|
||||||
(As Restated)
|
(As Restated)
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 18,942 | $ | 47,829 | ||||
Accounts receivable (less allowance for doubtful
|
||||||||
accounts of $3,034 in 2011 and $2,795 in 2010)
|
27,487 | 24,733 | ||||||
Accounts receivable - affiliates (no allowance for doubtful
|
||||||||
accounts in 2011 and 2010)
|
682 | 624 | ||||||
Notes receivable (no allowance for doubtful accounts in 2011 and 2010)
|
4,221 | 4,735 | ||||||
Inventories
|
20,091 | 17,402 | ||||||
Deferred income taxes
|
7,636 | 9,647 | ||||||
Prepaid expenses
|
10,210 | 10,009 | ||||||
Other current assets
|
5,555 | 4,489 | ||||||
Total current assets
|
94,824 | 119,468 | ||||||
Net property and equipment
|
181,910 | 185,371 | ||||||
Notes receivable, less current portion (less allowance for doubtful
|
||||||||
accounts of $5,905 in 2011 and $9,951 in 2010)
|
11,502 | 12,619 | ||||||
Deferred income taxes
|
- | 1,551 | ||||||
Goodwill
|
75,085 | 74,697 | ||||||
Other assets
|
27,061 | 23,786 | ||||||
Total assets
|
$ | 390,382 | $ | 417,492 | ||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 32,966 | $ | 31,569 | ||||
Income and other taxes payable
|
3,969 | 1,789 | ||||||
Accrued expenses and other current liabilities
|
44,198 | 42,825 | ||||||
Total current liabilities
|
81,133 | 76,183 | ||||||
Unearned franchise and development fees
|
4,780 | 6,596 | ||||||
Long-term debt
|
51,489 | 99,017 | ||||||
Deferred income taxes
|
6,692 | - | ||||||
Other long-term liabilities
|
36,676 | 36,576 | ||||||
Total liabilities
|
180,770 | 218,372 | ||||||
Redeemable noncontrolling interests
|
3,965 | 3,512 | ||||||
Stockholders’ equity:
|
||||||||
Preferred stock ($.01 par value per share; authorized 5,000 shares,
|
||||||||
no shares issued)
|
- | - | ||||||
Common stock ($.01 par value per share; authorized 50,000 shares,
|
||||||||
issued 36,656 in 2011 and 36,084 in 2010)
|
367 | 361 | ||||||
Additional paid-in capital
|
262,456 | 245,380 | ||||||
Accumulated other comprehensive income
|
1,849 | 849 | ||||||
Retained earnings
|
294,801 | 240,066 | ||||||
Treasury stock (12,637 shares in 2011 and 10,645 shares in 2010, at cost)
|
(353,826 | ) | (291,048 | ) | ||||
Total stockholders' equity
|
205,647 | 195,608 | ||||||
Total liabilities, redeemable noncontrolling interests and stockholders’ equity
|
$ | 390,382 | $ | 417,492 | ||||
See accompanying notes.
|
Papa John's International, Inc.
|
||||||||||||||||||||||||||||||||
Common
|
Accumulated
|
|||||||||||||||||||||||||||||||
Stock
|
Additional
|
Other
|
Noncontrolling
|
Total
|
||||||||||||||||||||||||||||
Shares
|
Common
|
Paid-In
|
Comprehensive
|
Retained
|
Treasury
|
Interest in
|
Stockholders’
|
|||||||||||||||||||||||||
(In thousands)
|
Outstanding
|
Stock
|
Capital
|
Income (Loss)
|
Earnings
|
Stock
|
Subsidiary
|
Equity
|
||||||||||||||||||||||||
(As Restated)
|
(As Restated)
|
(As Restated)
|
||||||||||||||||||||||||||||||
Balance at December 28, 2008
|
27,637 | $ | 352 | $ | 216,553 | $ | (3,818 | ) | $ | 133,759 | $ | (216,860 | ) | $ | 4,838 | $ | 134,824 | |||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||
Net income
|
- | - | - | - | 53,729 | - | - | 53,729 | ||||||||||||||||||||||||
Change in valuation of interest rate
|
||||||||||||||||||||||||||||||||
swap agreements, net of tax of $781
|
- | - | - | 1,388 | - | - | - | 1,388 | ||||||||||||||||||||||||
Foreign currency translation
|
- | - | - | 1,310 | - | - | - | 1,310 | ||||||||||||||||||||||||
Other
|
- | - | - | 36 | - | - | - | 36 | ||||||||||||||||||||||||
Comprehensive income
|
56,463 | |||||||||||||||||||||||||||||||
Exercise of stock options
|
612 | 6 | 9,824 | - | - | - | - | 9,830 | ||||||||||||||||||||||||
Tax effect of equity awards
|
- | - | (342 | ) | - | - | - | - | (342 | ) | ||||||||||||||||||||||
Acquisition of Company common stock
|
(1,319 | ) | - | - | - | - | (28,477 | ) | - | (28,477 | ) | |||||||||||||||||||||
Stock-based compensation expense
|
- | - | 5,817 | - | - | - | - | 5,817 | ||||||||||||||||||||||||
Reclassification for mandatorily
|
||||||||||||||||||||||||||||||||
redeemable feature
|
- | - | - | - | - | - | (4,838 | ) | (4,838 | ) | ||||||||||||||||||||||
Other
|
- | - | (132 | ) | - | - | - | - | (132 | ) | ||||||||||||||||||||||
Balance at December 27, 2009
|
26,930 | 358 | 231,720 | (1,084 | ) | 187,488 | (245,337 | ) | - | 173,145 | ||||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||
Net income
|
- | - | - | - | 52,578 | - | - | 52,578 | ||||||||||||||||||||||||
Change in valuation of interest rate
|
||||||||||||||||||||||||||||||||
swap agreements, net of tax of $1,352
|
- | - | - | 2,404 | - | - | - | 2,404 | ||||||||||||||||||||||||
Foreign currency translation
|
- | - | - | (523 | ) | - | - | - | (523 | ) | ||||||||||||||||||||||
Other
|
- | - | - | 52 | - | - | - | 52 | ||||||||||||||||||||||||
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
|
25,439 | 361 | 245,380 | 849 | 240,066 | (291,048 | ) | - | 195,608 | |||||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||
Net income
|
- | - | - | - | 54,735 | - | - | 54,735 | ||||||||||||||||||||||||
Change in valuation of interest rate
|
||||||||||||||||||||||||||||||||
swap agreements, net of tax of $93
|
- | - | - | 165 | - | - | - | 165 | ||||||||||||||||||||||||
Foreign currency translation
|
- | - | - | 864 | - | - | - | 864 | ||||||||||||||||||||||||
Other
|
- | - | - | (29 | ) | - | - | - | (29 | ) | ||||||||||||||||||||||
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
|
24,019 | $ | 367 | $ | 262,456 | $ | 1,849 | $ | 294,801 | $ | (353,826 | ) | $ | - | $ | 205,647 |
Papa John’s International, Inc. and Subsidiaries
|
||||||||||||
Consolidated Statements of Cash Flows
|
||||||||||||
(In thousands)
|
Years Ended
|
|||||||||||
December 25,
|
December 26,
|
December 27,
|
||||||||||
2011
|
2010
|
2009
|
||||||||||
(As Restated)
|
(As Restated)
|
(As Restated)
|
||||||||||
Operating activities
|
||||||||||||
Net income, including redeemable noncontrolling interests
|
$ | 58,467 | $ | 56,063 | $ | 57,485 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Disposition and impairment losses
|
1,200 | 479 | 1,258 | |||||||||
Provision for uncollectible accounts and notes receivable
|
1,037 | 917 | 2,242 | |||||||||
Depreciation and amortization
|
32,681 | 32,407 | 31,446 | |||||||||
Deferred income taxes
|
9,345 | 4,944 | 5,186 | |||||||||
Stock-based compensation expense
|
6,704 | 6,066 | 5,817 | |||||||||
Excess tax benefit on equity awards
|
(741 | ) | (359 | ) | (1,035 | ) | ||||||
Other
|
4,556 | (743 | ) | 7,078 | ||||||||
Changes in operating assets and liabilities, net of acquisitions:
|
||||||||||||
Accounts receivable
|
(4,298 | ) | (5,022 | ) | 155 | |||||||
Inventories
|
(2,689 | ) | (1,848 | ) | 1,096 | |||||||
Prepaid expenses
|
(2,514 | ) | (1,303 | ) | 595 | |||||||
Other current assets
|
1,486 | 773 | 2,009 | |||||||||
Other assets and liabilities
|
(877 | ) | 50 | (4,197 | ) | |||||||
Accounts payable
|
1,397 | 4,579 | (1,776 | ) | ||||||||
Income and other taxes payable
|
2,180 | 480 | (3,623 | ) | ||||||||
Accrued expenses and other current liabilities
|
(5,685 | ) | (5,830 | ) | 338 | |||||||
Unearned franchise and development fees
|
(1,241 | ) | 928 | (248 | ) | |||||||
Net cash provided by operating activities
|
101,008 | 92,581 | 103,826 | |||||||||
Investing activities
|
||||||||||||
Purchases of property and equipment
|
(29,319 | ) | (31,125 | ) | (33,538 | ) | ||||||
Loans issued
|
(3,492 | ) | (2,637 | ) | (11,635 | ) | ||||||
Repayments of loans issued
|
5,357 | 3,918 | 8,496 | |||||||||
Acquisitions, net of cash acquired
|
- | - | (464 | ) | ||||||||
Proceeds from divestitures of restaurants
|
- | 1,397 | 830 | |||||||||
Other
|
68 | 12 | 756 | |||||||||
Net cash used in investing activities
|
(27,386 | ) | (28,435 | ) | (35,555 | ) | ||||||
Financing activities
|
||||||||||||
Net repayments on line of credit facility
|
(47,511 | ) | - | (24,500 | ) | |||||||
Net repayments from short-term debt - variable interest entities
|
- | - | (7,075 | ) | ||||||||
Excess tax benefit on equity awards
|
741 | 359 | 1,035 | |||||||||
Tax payments for restricted stock issuances
|
(1,041 | ) | - | - | ||||||||
Proceeds from exercise of stock options
|
14,042 | 6,410 | 9,830 | |||||||||
Acquisition of Company common stock
|
(65,323 | ) | (46,936 | ) | (28,477 | ) | ||||||
Distributions to redeemable noncontrolling interest holders
|
(3,669 | ) | (3,147 | ) | (3,840 | ) | ||||||
Other
|
160 | 96 | (27 | ) | ||||||||
Net cash used in financing activities
|
(102,601 | ) | (43,218 | ) | (53,054 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents
|
92 | 62 | 176 | |||||||||
Change in cash and cash equivalents
|
(28,887 | ) | 20,990 | 15,393 | ||||||||
Cash and cash equivalents at beginning of year
|
47,829 | 26,839 | 11,446 | |||||||||
Cash and cash equivalents at end of year
|
$ | 18,942 | $ | 47,829 | $ | 26,839 | ||||||
See accompanying notes.
|
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, including noncontrolling interests
|
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, including noncontrolling interests
|
$ | 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, including noncontrolling interests
|
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, including noncontrolling interests
|
$ | 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 Balance Sheet
|
||||||||||||
Noncurrent deferred income tax assets
|
$ | 6,804 | $ | 2,283 | $ | 9,087 | ||||||
Other long-term liabilities
|
16,886 | 10,960 | 27,846 | |||||||||
Redeemable noncontrolling interests
|
- | 3,215 | 3,215 | |||||||||
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 | ||||||||
Consolidated Statement of Income
|
||||||||||||
Interest expense
|
$ | 5,653 | $ | 6,007 | $ | 11,660 | ||||||
Income before income taxes
|
90,194 | (6,007 | ) | 84,187 | ||||||||
Income tax expense
|
28,985 | (2,283 | ) | 26,702 | ||||||||
Net income, including noncontrolling interests
|
61,209 | (3,724 | ) | 57,485 | ||||||||
Net income, net of noncontrolling interests
|
57,453 | (3,724 | ) | 53,729 | ||||||||
Comprehensive income, including noncontrolling interests
|
63,943 | (3,724 | ) | 60,219 | ||||||||
Basic earnings per common share
|
2.07 | (0.13 | ) | 1.94 | ||||||||
Earnings per common share - assuming dilution
|
2.06 | (0.13 | ) | 1.93 | ||||||||
Consolidated Statement of Cash Flows
|
||||||||||||
Net income, including noncontrolling interests
|
$ | 61,209 | $ | (3,724 | ) | $ | 57,485 | |||||
Deferred income taxes
|
7,469 | (2,283 | ) | 5,186 | ||||||||
Other
|
1,071 | 6,007 | 7,078 | |||||||||
Net cash provided by operating activities
|
103,826 | - | 103,826 |
December 28, 2008
|
||||||||||||
As Previously Reported
|
Adjustments
|
As Restated
|
||||||||||
Consolidated Statement of Stockholders' Equity
|
||||||||||||
Noncontrolling interests in subsidiaries
|
$ | 8,252 | $ | (3,414 | ) | $ | 4,838 | |||||
Total stockholders' equity
|
138,238 | (3,414 | ) | 134,824 |
|
·
|
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
|
|||||||||||||||
(In thousands)
|
Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
December 25, 2011
|
||||||||||||||||
Financial assets:
|
||||||||||||||||
Cash surrender value of life insurance policies *
|
$ | 11,387 | $ | 11,387 | $ | - | $ | - | ||||||||
Interest rate swap
|
11 | - | 11 | - | ||||||||||||
December 26, 2010
|
||||||||||||||||
Financial assets:
|
||||||||||||||||
Cash surrender value of life insurance policies *
|
$ | 12,455 | $ | 12,455 | $ | - | $ | - | ||||||||
Financial liabilities:
|
||||||||||||||||
Interest rate swaps
|
313 | - | 313 | - | ||||||||||||
* Represents life insurance held in our non-qualified deferred compensation plan.
|
2011
|
2010
|
2009
|
||||||||||
(As Restated)
|
(As Restated)
|
(As Restated)
|
||||||||||
Basic earnings per common share:
|
||||||||||||
Net income, net of redeemable noncontrolling interests
|
$ | 54,735 | $ | 52,578 | $ | 53,729 | ||||||
Weighted average shares outstanding
|
25,043 | 26,328 | 27,738 | |||||||||
Basic earnings per common share
|
$ | 2.19 | $ | 2.00 | $ | 1.94 | ||||||
Earnings per common share - assuming dilution:
|
||||||||||||
Net income, net of redeemable noncontrolling interests
|
$ | 54,735 | $ | 52,578 | $ | 53,729 | ||||||
Weighted average shares outstanding
|
25,043 | 26,328 | 27,738 | |||||||||
Dilutive effect of outstanding equity awards
|
267 | 140 | 171 | |||||||||
Diluted weighted average shares outstanding
|
25,310 | 26,468 | 27,909 | |||||||||
Earnings per common share - assuming dilution
|
$ | 2.16 | $ | 1.99 | $ | 1.93 |
Noncontrolling | |||||||
Restaurants as of
|
Restaurant
|
Papa John's
|
Interest
|
||||
December 25, 2011 *
|
Locations
|
Ownership *
|
Ownership *
|
||||
Star Papa, LP
|
76
|
Texas
|
51%
|
49%
|
|||
Colonel's Limited, LLC
|
52
|
Maryland and Virginia
|
70%
|
30%
|
Year Ended
|
||||||||||||
(In thousands)
|
2011
|
2010
|
2009
|
|||||||||
Papa John's International, Inc.
|
$ | 6,184 | $ | 5,658 | $ | 6,171 | ||||||
Noncontrolling interests
|
3,732 | 3,485 | 3,756 | |||||||||
Total income before income tax
|
$ | 9,916 | $ | 9,143 | $ | 9,927 |
Domestic Company-owned Restaurants
|
International *
|
All Others
|
Total
|
|||||||||||||
Balance as of December 27, 2009
|
$ | 55,260 | $ | 19,370 | $ | 436 | $ | 75,066 | ||||||||
Foreign currency adjustments
|
- | (369 | ) | - | (369 | ) | ||||||||||
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 |
2011
|
2010
|
2009
|
||||||||||
Net book value of divested restaurants
|
$ | - | $ | 2,828 | $ | 659 | ||||||
Cash proceeds received
|
- | 1,397 | 830 | |||||||||
Fair value of notes receivable (1)
|
- | 1,431 | 312 | |||||||||
Total consideration at fair value (1)
|
- | 2,828 | 1,142 | |||||||||
Gain on restaurants sold
|
- | - | (483 | ) | ||||||||
(Gain) loss on domestic restaurant closures
|
(203 | ) | 95 | 1,140 | ||||||||
Adjustment to long-lived asset impairment reserves
|
117 | 158 | - | |||||||||
Total restaurant impairment and disposition (gains) losses
|
$ | (86 | ) | $ | 253 | $ | 657 |
(1)
|
We sold 12 Company-owned restaurants to franchisees in 2010 and 2009. As a part of the agreements to sell the restaurants, we received notes receivable totaling $1.4 million in 2010 and $500,000 (fair value of $312,000) in 2009.
|
2011
|
2010
|
|||||||
Revolving line of credit
|
$ | 51,489 | $ | 99,000 | ||||
Other
|
- | 17 | ||||||
Total long-term debt
|
$ | 51,489 | $ | 99,017 |
Fair Values of Derivative Instruments
|
||||||||||
Derivatives designated as hedging instruments:
|
||||||||||
Asset Derivatives
|
Liability Derivatives
|
|||||||||
Balance Sheet Location
|
Fair Value
Dec. 25, 2011
|
Balance Sheet Location
|
Fair Value
Dec. 26, 2010
|
|||||||
Interest rate swaps
|
Other long-term assets
|
$ | 11 |
Other long-term liabilities
|
$ | 313 | ||||
There were no derivatives that were not designated as hedging instruments under the provisions of the ASC topic, Derivatives and Hedging.
|
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:
|
||||||||||||||
2011
|
$ | 165 |
Interest expense
|
$ | (341 | ) |
Interest expense
|
$ | 65 | |||||
2010
|
$ | 2,404 |
Interest expense
|
$ | (4,131 | ) |
Interest expense
|
$ | (25 | ) | ||||
2009
|
$ | 1,388 |
Interest expense
|
$ | (4,037 | ) |
Interest expense
|
$ | (40 | ) |
* | A portion of our second interest rate swap became over-hedged in 2009 since the outstanding debt balance associated with this swap was $49 million (floating rate debt of the swap was $50 million). |
2011
|
2010
|
|||||||
Land
|
$ | 32,735 | $ | 32,701 | ||||
Buildings and improvements
|
85,907 | 84,960 | ||||||
Leasehold improvements
|
90,855 | 85,230 | ||||||
Equipment and other
|
231,059 | 217,199 | ||||||
Construction in progress
|
5,159 | 4,599 | ||||||
Total property and equipment
|
445,715 | 424,689 | ||||||
Less accumulated depreciation and amortization
|
(263,805 | ) | (239,318 | ) | ||||
Net property and equipment
|
$ | 181,910 | $ | 185,371 |
Balance as of December 27, 2009
|
$ | 10,858 | ||
Recovered from costs and expenses
|
(433 | ) | ||
Deductions, including notes written off
|
(474 | ) | ||
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 |
2011
|
2010
|
|||||||
Salaries, benefits and bonuses
|
$ | 13,982 | $ | 13,337 | ||||
Insurance reserves, current
|
9,215 | 8,834 | ||||||
Rent
|
6,242 | 6,083 | ||||||
Purchases
|
4,764 | 4,826 | ||||||
Consulting and professional fees
|
1,911 | 1,974 | ||||||
Utilities
|
1,420 | 1,557 | ||||||
Customer loyalty program
|
1,339 | 200 | ||||||
Marketing
|
635 | 1,192 | ||||||
Other
|
4,690 | 4,822 | ||||||
Total
|
$ | 44,198 | $ | 42,825 |
2011
|
2010
|
|||||||
(As Restated)
|
(As Restated)
|
|||||||
Mandatorily redeemable noncontrolling interests
|
$ | 11,065 | $ | 9,972 | ||||
Deferred compensation plan
|
10,793 | 10,478 | ||||||
Insurance reserves
|
10,063 | 10,153 | ||||||
Other
|
4,755 | 5,973 | ||||||
Total
|
$ | 36,676 | $ | 36,576 |
2011
|
2010
|
2009
|
||||||||||
(As Restated)
|
(As Restated)
|
(As Restated)
|
||||||||||
Current:
|
||||||||||||
Federal
|
$ | 14,383 | $ | 19,049 | $ | 18,551 | ||||||
Foreign
|
1,273 | 1,171 | 904 | |||||||||
State and local *
|
850 | 2,083 | 2,061 | |||||||||
Deferred (federal and state)
|
9,818 | 4,944 | 5,186 | |||||||||
Total
|
$ | 26,324 | $ | 27,247 | $ | 26,702 |
2011
|
2010
|
|||||||
(As Restated)
|
(As Restated)
|
|||||||
Accrued liabilities
|
$ | 7,604 | $ | 7,713 | ||||
Accrued bonuses
|
2,447 | 2,300 | ||||||
Other assets and liabilities
|
12,140 | 15,698 | ||||||
Stock options
|
5,091 | 6,291 | ||||||
Other
|
4,704 | 3,943 | ||||||
Foreign net operating losses
|
7,474 | 8,123 | ||||||
Valuation allowance on foreign net
|
||||||||
operating losses
|
(7,474 | ) | (8,123 | ) | ||||
Total deferred tax assets
|
31,986 | 35,945 | ||||||
Deferred expenses
|
(3,497 | ) | (2,497 | ) | ||||
Accelerated depreciation
|
(13,477 | ) | (10,192 | ) | ||||
Goodwill
|
(10,426 | ) | (8,506 | ) | ||||
Other
|
(3,642 | ) | (3,552 | ) | ||||
Total deferred tax liabilities
|
(31,042 | ) | (24,747 | ) | ||||
Net deferred tax asset
|
$ | 944 | $ | 11,198 |
2011
|
2010
|
2009
|
||||||||||||||||||||||
Income Tax
Expense
|
Income Tax
Rate
|
Income Tax
Expense
|
Income Tax
Rate
|
Income Tax
Expense
|
Income Tax
Rate
|
|||||||||||||||||||
(As Restated)
|
(As Restated)
|
(As Restated)
|
||||||||||||||||||||||
Tax at U.S. federal statutory rate
|
$ | 29,677 | 35.0 | % | $ | 29,159 | 35.0 | % | $ | 29,465 | 35.0 | % | ||||||||||||
State and local income taxes
|
1,702 | 2.0 | % | 1,896 | 2.3 | % | 2,037 | 2.4 | % | |||||||||||||||
Foreign income taxes
|
1,273 | 1.5 | % | 1,171 | 1.4 | % | 904 | 1.1 | % | |||||||||||||||
Settlement of certain tax issues
|
(1,912 | ) | (2.3 | %) | (550 | ) | (0.7 | %) | (1,238 | ) | (1.5 | %) | ||||||||||||
Income of consolidated partnerships
|
||||||||||||||||||||||||
attributable to noncontrolling interests
|
(1,379 | ) | (1.6 | %) | (1,297 | ) | (1.6 | %) | (1,397 | ) | (1.7 | %) | ||||||||||||
Non-qualified deferred compensation
|
||||||||||||||||||||||||
plan loss (income)
|
153 | 0.2 | % | (434 | ) | (0.5 | %) | (803 | ) | (0.9 | %) | |||||||||||||
Tax credits and other
|
(3,190 | ) | (3.8 | %) | (2,698 | ) | (3.2 | %) | (2,266 | ) | (2.7 | %) | ||||||||||||
Total
|
$ | 26,324 | 31.0 | % | $ | 27,247 | 32.7 | % | $ | 26,702 | 31.7 | % |
Balance at December 27, 2009
|
$ | 3,595 | ||
Reductions for lapse of statute of limitations
|
(264 | ) | ||
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 |
2011
|
2010
|
2009
|
||||||||||
Revenues from affiliates:
|
||||||||||||
Commissary sales
|
$ | 22,132 | $ | 19,137 | $ | 17,625 | ||||||
Other sales
|
2,352 | 1,961 | 2,284 | |||||||||
Franchise royalties
|
3,579 | 3,192 | 2,514 | |||||||||
Franchise and development fees
|
15 | - | 50 | |||||||||
Total
|
$ | 28,078 | $ | 24,290 | $ | 22,473 | ||||||
Other income from affiliates
|
$ | - | $ | - | $ | 57 | ||||||
Accounts receivable - affiliates
|
$ | 682 | $ | 624 | $ | 648 |
Future
|
||||||||||||
Expected
|
||||||||||||
Gross Lease
|
Sublease
|
Net Lease
|
||||||||||
Year
|
Costs
|
Payments
|
Costs
|
|||||||||
2012
|
$ | 29,760 | $ | 3,675 | $ | 26,085 | ||||||
2013
|
26,430 | 3,583 | 22,847 | |||||||||
2014
|
22,394 | 3,330 | 19,064 | |||||||||
2015
|
17,703 | 3,068 | 14,635 | |||||||||
2016
|
12,853 | 2,777 | 10,076 | |||||||||
Thereafter
|
29,703 | 15,653 | 14,050 | |||||||||
Total
|
$ | 138,843 | $ | 32,086 | $ | 106,757 |
Weighted
|
||||||||||||||||
Weighted
|
Average
|
|||||||||||||||
Number
|
Average
|
Remaining
|
Aggregate
|
|||||||||||||
of
|
Exercise
|
Contractual
|
Intrinsic
|
|||||||||||||
Options
|
Price
|
Term
|
Value
|
|||||||||||||
Outstanding at December 26, 2010
|
1,931 | $ | 26.80 | |||||||||||||
Granted
|
403 | 29.09 | ||||||||||||||
Exercised
|
(572 | ) | 24.56 | |||||||||||||
Cancelled
|
(334 | ) | 31.74 | |||||||||||||
Outstanding at December 25, 2011
|
1,428 | $ | 27.19 | 2.63 | $ | 15,259 | ||||||||||
Vested or expected to vest at December 25, 2011
|
1,396 | $ | 27.04 | 2.69 | $ | 14,919 | ||||||||||
Exercisable at December 25, 2011
|
791 | $ | 26.40 | 1.77 | $ | 9,077 |
2011
|
2010
|
2009
|
||||||||||
Assumptions (weighted average):
|
||||||||||||
Risk-free interest rate
|
1.5 | % | 1.8 | % | 1.3 | % | ||||||
Expected dividend yield
|
0.0 | % | 0.0 | % | 0.0 | % | ||||||
Expected volatility
|
0.41 | 0.43 | 0.41 | |||||||||
Expected term (in years)
|
3.7 | 3.7 | 3.7 |
Weighted
|
||||||||
Average
|
||||||||
Grant-Date
|
||||||||
Shares
|
Fair Value
|
|||||||
Total as of December 28, 2008
|
283 | $ | 29.84 | |||||
Granted
|
108 | 26.54 | ||||||
Forfeited
|
(121 | ) | 30.03 | |||||
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 |
(in thousands)
|
2011
|
2010
|
2009
|
|||||||||
(As Restated)
|
(As Restated)
|
(As Restated)
|
||||||||||
Revenues from external customers:
|
||||||||||||
Domestic Company-owned restaurants
|
$ | 525,841 | $ | 503,272 | $ | 503,818 | ||||||
Domestic commissaries
|
508,155 | 454,506 | 417,689 | |||||||||
North America franchising
|
74,416 | 70,241 | 62,995 | |||||||||
International
|
58,558 | 46,427 | 40,003 | |||||||||
All others
|
50,912 | 51,951 | 54,045 | |||||||||
Total revenues from external customers
|
$ | 1,217,882 | $ | 1,126,397 | $ | 1,078,550 | ||||||
Intersegment revenues:
|
||||||||||||
Domestic commissaries
|
$ | 151,423 | $ | 135,005 | $ | 133,999 | ||||||
North America franchising
|
2,163 | 2,045 | 2,019 | |||||||||
International
|
215 | 909 | 1,093 | |||||||||
Variable interest entities (1)
|
25,117 | 153,014 | 142,407 | |||||||||
All others
|
10,468 | 12,061 | 11,751 | |||||||||
Total intersegment revenues
|
$ | 189,386 | $ | 303,034 | $ | 291,269 | ||||||
Depreciation and amortization:
|
||||||||||||
Domestic Company-owned restaurants
|
$ | 12,965 | $ | 13,155 | $ | 12,993 | ||||||
Domestic commissaries
|
4,633 | 4,522 | 4,819 | |||||||||
International
|
2,398 | 2,368 | 2,207 | |||||||||
All others
|
4,663 | 3,489 | 2,743 | |||||||||
Unallocated corporate expenses
|
8,022 | 8,873 | 8,684 | |||||||||
Total depreciation and amortization
|
$ | 32,681 | $ | 32,407 | $ | 31,446 | ||||||
Income (loss) before income taxes:
|
||||||||||||
Domestic Company-owned restaurants
|
$ | 28,980 | $ | 31,619 | $ | 34,894 | ||||||
Domestic commissaries
|
30,532 | 14,188 | 29,393 | |||||||||
North America franchising
|
66,222 | 62,229 | 55,008 | |||||||||
International
|
(165 | ) | (4,771 | ) | (4,368 | ) | ||||||
Variable interest entities (2)
|
- | 20,954 | 22,543 | |||||||||
All others
|
(441 | ) | 1,847 | 2,697 | ||||||||
Unallocated corporate expenses
|
(39,727 | ) | (42,237 | ) | (55,762 | ) | ||||||
Elimination of intersegment profits
|
(610 | ) | (519 | ) | (218 | ) | ||||||
Total income before income taxes
|
$ | 84,791 | $ | 83,310 | $ | 84,187 |
(in thousands)
|
2011
|
2010
|
2009
|
|||||||||
Property and equipment:
|
||||||||||||
Domestic Company-owned restaurants
|
$ | 176,506 | $ | 165,434 | $ | 158,884 | ||||||
Domestic commissaries
|
85,714 | 82,162 | 80,180 | |||||||||
International
|
17,413 | 17,574 | 16,587 | |||||||||
All others
|
33,984 | 32,335 | 25,526 | |||||||||
Unallocated corporate assets
|
132,098 | 127,184 | 120,885 | |||||||||
Accumulated depreciation and amortization
|
(263,805 | ) | (239,318 | ) | (214,091 | ) | ||||||
Net property and equipment
|
$ | 181,910 | $ | 185,371 | $ | 187,971 | ||||||
Expenditures for property and equipment:
|
||||||||||||
Domestic Company-owned restaurants
|
$ | 14,094 | $ | 9,124 | $ | 8,300 | ||||||
Domestic commissaries
|
5,612 | 2,795 | 6,029 | |||||||||
International
|
1,733 | 4,835 | 7,277 | |||||||||
All others
|
1,792 | 8,151 | 313 | |||||||||
Unallocated corporate
|
6,088 | 6,220 | 11,619 | |||||||||
Total expenditures for property and equipment
|
$ | 29,319 | $ | 31,125 | $ | 33,538 |
(1)
|
The intersegment revenues for variable interest entities of $25.1 million in 2011, $153.0 million in 2010 and $142.4 million in 2009 are attributable to BIBP.
|
(2)
|
Represents BIBP’s operating income, net of noncontrolling interest income, for each year. The 2010 operating income 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.
|
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 | ||||||||
Quarter
|
||||||||||||||||
2010
|
1st
|
2nd
|
3rd
|
4th
|
||||||||||||
(As Restated)
|
(As Restated)
|
(As Restated)
|
(As Restated)
|
|||||||||||||
Total revenues (a)
|
$ | 285,786 | $ | 280,647 | $ | 273,126 | $ | 286,838 | ||||||||
Operating income (a), (c)
|
27,942 | 22,799 | 13,783 | 22,220 | ||||||||||||
Net income (c)
|
17,194 | 13,260 | 7,904 | 14,220 | (d) | |||||||||||
Basic earnings per common share (c)
|
$ | 0.64 | $ | 0.50 | $ | 0.30 | $ | 0.56 | (d) | |||||||
Earnings per common share - assuming dilution (c)
|
$ | 0.63 | $ | 0.49 | $ | 0.30 | $ | 0.55 | (d) | |||||||
(a)
|
The restatement as described in Note 1 had no impact on revenues or operating income.
|
(b)
|
Net income previously reported in the 2011 Unaudited Quarterly Data table was $15,981.
|
(c)
|
During 2010, we recorded pre-tax income of $3.5 million ($2.2 million after tax or $0.08 per diluted share) in the first quarter, pre-tax income of $2.7 million ($1.7 million after tax or $0.06 per diluted share) in the second quarter, pre-tax losses of $658,000 ($417,000 after tax or $0.02 per diluted share) in the third quarter and pre-tax income of $1.3 million ($843,000 after tax or $0.04 per diluted share) in the fourth quarter upon consolidation of BIBP. BIBP’s total pre-tax income, excluding the 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, for 2010 was $6.8 million ($4.3 million after tax or $0.16 per diluted share).
|
(d)
|
Amounts previously reported in the 2010 Unaudited Quarterly Data table were as follows: Net income - $14,025, Basic earnings per common share - $0.55, and Earnings per common share – assuming dilution - $0.55.
|
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, including noncontrolling interests
|
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 Statement 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, including noncontrolling interests
|
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 Statement 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, including noncontrolling interests
|
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 | 4,710 | ||||||||||||||
Other
|
1,272 | 2,611 | ||||||||||||||
Net cash provided by operating activities
|
87,216 | 87,216 |
As of and For The
|
||||||||
Three Months Ended
|
||||||||
March 28, 2010
|
||||||||
As Previously
Reported
|
As Restated
|
|||||||
Condensed Consolidated Balance Sheet
|
||||||||
Noncurrent deferred income tax assets
|
$ | 4,817 | $ | 6,904 | ||||
Other long-term liabilities
|
13,744 | 24,407 | ||||||
Redeemable noncontrolling interests
|
- | 3,906 | ||||||
Retained earnings
|
208,087 | 204,682 | ||||||
Noncontrolling interests in subsidiaries
|
9,077 | - | ||||||
Total stockholders' equity
|
204,100 | 191,618 | ||||||
Condensed Consolidated Statement of Comprehensive Income
|
||||||||
Interest expense
|
$ | 1,244 | $ | 730 | ||||
Income before income taxes
|
26,929 | 27,443 | ||||||
Income tax expense
|
8,965 | 9,160 | ||||||
Net income, including noncontrolling interests
|
17,964 | 18,283 | ||||||
Net income, net of noncontrolling interests
|
16,875 | 17,194 | ||||||
Comprehensive income, including noncontrolling interests
|
16,704 | 17,023 | ||||||
Basic earnings per common share
|
0.62 | 0.64 | ||||||
Earnings per common share - assuming dilution
|
0.62 | 0.63 | ||||||
Consolidated Statement of Cash Flows
|
||||||||
Net income, including noncontrolling interests *
|
$ | 17,964 | $ | 18,283 | ||||
Deferred income taxes
|
1,901 | 2,096 | ||||||
Other
|
330 | (184 | ) | |||||
Net cash provided by operating activities *
|
27,102 | 27,102 | ||||||
*Amounts have been reclassified to conform to the current year presentation.
|
As of and For The
|
As of and For The
|
|||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 27, 2010
|
June 27, 2010
|
|||||||||||||||
As
Previously
Reported
|
As Restated
|
As
Previously
Reported
|
As Restated
|
|||||||||||||
Condensed Consolidated Balance Sheet
|
||||||||||||||||
Noncurrent deferred income tax assets
|
$ | 5,920 | $ | 7,965 | $ | 5,920 | $ | 7,965 | ||||||||
Other long-term liabilities
|
12,729 | 22,978 | 12,729 | 22,978 | ||||||||||||
Redeemable noncontrolling interests
|
- | 4,431 | - | 4,431 | ||||||||||||
Retained earnings
|
221,279 | 217,942 | 221,279 | 217,942 | ||||||||||||
Noncontrolling interests in subsidiaries
|
9,298 | - | 9,298 | - | ||||||||||||
Total stockholders' equity
|
202,498 | 189,863 | 202,498 | 189,863 | ||||||||||||
Condensed Consolidated Statement of Comprehensive Income
|
||||||||||||||||
Interest expense
|
$ | 1,333 | $ | 1,223 | $ | 2,577 | $ | 1,953 | ||||||||
Income before income taxes
|
21,663 | 21,773 | 48,592 | 49,216 | ||||||||||||
Income tax expense
|
7,560 | 7,602 | 16,525 | 16,762 | ||||||||||||
Net income, including noncontrolling interests
|
14,103 | 14,171 | 32,067 | 32,454 | ||||||||||||
Net income, net of noncontrolling interests
|
13,192 | 13,260 | 30,067 | 30,454 | ||||||||||||
Comprehensive income, including noncontrolling interests
|
15,075 | 15,143 | 31,779 | 32,166 | ||||||||||||
Basic earnings per common share
|
0.49 | 0.50 | 1.12 | 1.13 | ||||||||||||
Earnings per common share - assuming dilution
|
0.49 | 0.49 | 1.11 | 1.13 | ||||||||||||
Consolidated Statement of Cash Flows
|
||||||||||||||||
Net income, including noncontrolling interests *
|
$ | 32,067 | $ | 32,454 | ||||||||||||
Deferred income taxes
|
(250 | ) | (13 | ) | ||||||||||||
Other
|
368 | (256 | ) | |||||||||||||
Net cash provided by operating activities *
|
47,686 | 47,686 | ||||||||||||||
*Amounts have been reclassified to conform to the current year presentation.
|
As of and For The
|
As of and For The
|
|||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 26, 2010
|
September 26, 2010
|
|||||||||||||||
As
Previously
Reported
|
As Restated
|
As
Previously
Reported
|
As Restated
|
|||||||||||||
Condensed Consolidated Balance Sheet
|
||||||||||||||||
Noncurrent deferred income tax assets
|
$ | 5,557 | $ | 7,568 | $ | 5,557 | $ | 7,568 | ||||||||
Other long-term liabilities
|
12,854 | 22,937 | 12,854 | 22,937 | ||||||||||||
Redeemable noncontrolling interests
|
- | 3,142 | - | 3,142 | ||||||||||||
Retained earnings
|
229,127 | 225,846 | 229,127 | 225,846 | ||||||||||||
Noncontrolling interests in subsidiaries
|
7,933 | - | 7,933 | - | ||||||||||||
Total stockholders' equity
|
193,262 | 182,048 | 193,262 | 182,048 | ||||||||||||
Condensed Consolidated Statement of Comprehensive Income
|
||||||||||||||||
Interest expense
|
$ | 1,416 | $ | 1,326 | $ | 3,993 | $ | 3,279 | ||||||||
Income before income taxes
|
12,540 | 12,630 | 61,132 | 61,846 | ||||||||||||
Income tax expense
|
4,020 | 4,054 | 20,545 | 20,816 | ||||||||||||
Net income, including noncontrolling interests
|
8,520 | 8,576 | 40,587 | 41,030 | ||||||||||||
Net income, net of noncontrolling interests
|
7,848 | 7,904 | 37,915 | 38,358 | ||||||||||||
Comprehensive income, including noncontrolling interests
|
10,572 | 10,628 | 42,351 | 42,794 | ||||||||||||
Basic earnings per common share
|
0.30 | 0.30 | 1.43 | 1.44 | ||||||||||||
Earnings per common share - assuming dilution
|
0.30 | 0.30 | 1.42 | 1.43 | ||||||||||||
Consolidated Statement of Cash Flows
|
||||||||||||||||
Net income, including noncontrolling interests *
|
$ | 40,587 | $ | 41,030 | ||||||||||||
Deferred income taxes
|
(850 | ) | (579 | ) | ||||||||||||
Other
|
303 | (411 | ) | |||||||||||||
Net cash provided by operating activities *
|
64,831 | 64,831 | ||||||||||||||
*Amounts have been reclassified to conform to the current year presentation.
|
(a)(1)
|
Financial Statements:
|
|
·
|
Reports of Independent Registered Public Accounting Firm
|
|
·
|
Consolidated Statements of Income for the years ended December 25, 2011, December 26, 2010 and December 27, 2009
|
|
·
|
Consolidated Statements of Comprehensive Income for the years ended December 25, 2011, December 26, 2010 and December 27, 2009
|
|
·
|
Consolidated Balance Sheets as of December 25, 2011 and December 26, 2010
|
|
·
|
Consolidated Statements of Stockholders’ Equity for the years ended December 25, 2011, December 26, 2010 and December 27, 2009
|
|
·
|
Consolidated Statements of Cash Flows for the years ended December 25, 2011, December 26, 2010 and December 27, 2009
|
|
·
|
Notes to Consolidated Financial Statements
|
(a)(2)
|
Financial Statement Schedules:
|
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 25, 2011:
|
|||||||||||||||||||
Deducted from asset accounts:
|
|||||||||||||||||||
Reserve for uncollectible accounts receivable
|
$ | 2,795 | $ | 1,072 | $ | (833 | ) | (2 | ) | $ | 3,034 | ||||||||
Reserve for uncollectible accounts receivable - affiliates
|
- | - | - | - | |||||||||||||||
Reserve for franchisee notes receivable
|
9,951 | (35 | ) | (4,011 | ) | (2 | ) | 5,905 | |||||||||||
Valuation allowance on foreign net operating losses
|
8,123 | (649 | ) | - | 7,474 | ||||||||||||||
$ | 20,869 | $ | 388 | $ | (4,844 | ) | $ | 16,413 | |||||||||||
Reserves included in liability accounts:
|
|||||||||||||||||||
Reserve for restaurant closures and dispositions
|
$ | 310 | $ | (155 | ) | $ | (66 | ) | (1 | ) | $ | 89 | |||||||
Fiscal year ended December 26, 2010:
|
|||||||||||||||||||
Deducted from asset accounts:
|
|||||||||||||||||||
Reserve for uncollectible accounts receivable
|
$ | 2,791 | $ | 1,350 | $ | (1,346 | ) | (2 | ) | $ | 2,795 | ||||||||
Reserve for uncollectible accounts receivable - affiliates
|
- | - | - | - | |||||||||||||||
Reserve for franchisee notes receivable
|
10,858 | (433 | ) | (474 | ) | (2 | ) | 9,951 | |||||||||||
Valuation allowance on foreign net operating losses
|
7,158 | 965 | - | 8,123 | |||||||||||||||
$ | 20,807 | $ | 1,882 | $ | (1,820 | ) | $ | 20,869 | |||||||||||
Reserves included in liability accounts:
|
|||||||||||||||||||
Reserve for restaurant closures and dispositions
|
$ | 525 | $ | (84 | ) | $ | (131 | ) | (1 | ) | $ | 310 | |||||||
Fiscal year ended December 27, 2009:
|
|||||||||||||||||||
Deducted from asset accounts:
|
|||||||||||||||||||
Reserve for uncollectible accounts receivable
|
$ | 3,003 | $ | 1,452 | $ | (1,664 | ) | (2 | ) | $ | 2,791 | ||||||||
Reserve for uncollectible accounts receivable - affiliates
|
- | - | - | - | |||||||||||||||
Reserve for franchisee notes receivable
|
9,265 | 790 | 803 | (2 | ) | 10,858 | |||||||||||||
Valuation allowance on foreign net operating losses
|
7,203 | (45 | ) | - | 7,158 | ||||||||||||||
$ | 19,471 | $ | 2,197 | $ | (861 | ) | $ | 20,807 | |||||||||||
Reserves included in liability accounts:
|
|||||||||||||||||||
Reserve for restaurant closures and dispositions
|
$ | 454 | $ | 284 | $ | (213 | ) | (1 | ) | $ | 525 | ||||||||
(1) Represents cash payments and other adjustments.
|
|||||||||||||||||||
(2) Uncollectible accounts written off, net of recoveries and reclassifications between accounts and notes receivable reserves.
|
Date: April 16, 2013
|
PAPA JOHN’S INTERNATIONAL, INC.
|
(Registrant)
|
|
/s/ John H. Schnatter
|
|
John H. Schnatter
|
|
Founder, Chairman and Chief Executive
|
|
Officer (Principal Executive Officer)
|
|
/s/ Lance F. Tucker
|
|
Lance F. Tucker
|
|
Senior Vice President, Chief 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 January 25, 2010. Exhibit 10.1 to our report on Form 10-K for the fiscal year ended December 26, 2010 is incorporated herein by reference.
|
|
10.2*
|
Amended and Restated 2003 Stock Option Plan for Non-Employee Directors, Amended and Restated as of January 13, 2006. Exhibit 10 to our Registration Statement on Form S-8 (Registration No. 333-138427) dated November 3, 2006 is incorporated herein by reference.
|
|
10.3*
|
Papa John’s International, Inc. 1999 Team Member Stock Ownership Plan, Amended and Restated as of December 6, 2006. Exhibit 10.1 to our report on Form 10-K for the fiscal year ended December 31, 2006 is incorporated herein by reference.
|
|
10.4*
|
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.
|
|
10.5*
|
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.
|
|
10.6*
|
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.
|
|
10.7*
|
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.
|
10.8*
|
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.
|
|
10.9*
|
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.
|
|
10.10*
|
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.
|
|
10.11
|
Conformed Copy through Fourth Amendment, As of December 19, 2007, of the Promissory Note by BIBP Commodities, Inc. Exhibit 10.2 to our Annual Report on Form 10-K for the fiscal year ended December 28, 2008 is incorporated herein by reference.
|
|
10.12
|
Fifth Amendments, As of July 31, 2008, of the Secured Loan Agreement, by and between BIBP Commodities, Inc. and Capital Delivery, Ltd. and of the Promissory Note by BIBP Commodities, Inc. Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 28, 2008 is incorporated herein by reference.
|
|
10.13
|
$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.
|
|
10.14
|
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.
|
|
10.15
|
Agreement for the Sale and Purchase of the Perfect Pizza Franchise Business Operated by Perfect Pizza Limited (to be Renamed Papa John’s (GB) Limited). Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 26, 2006 is incorporated herein by reference.
|
|
21
|
Subsidiaries of the Company. Exhibit 21 to our report on Form 10-K as filed on February 21, 2012 is incorporated herein by reference.
|
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/A of Papa John’s International, Inc. for the year ended December 25, 2011, filed on April 16, 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.
|
|
(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 Statements (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,
|
/s/ Ernst & Young LLP
|
|
1.
|
I have reviewed this annual report on Form 10-K/A 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: April 16, 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/A 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: April 16, 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/A of the Company for the annual period ended December 25, 2011 (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: April 16, 2013
|
/s/ John H. Schnatter
|
John H. Schnatter
|
|
Founder, Chairman and
|
|
Chief Executive Officer
|
|
1.
|
The Report on Form 10-K/A of the Company for the annual period ended December 25, 2011 (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: April 16, 2013
|
/s/ Lance F. Tucker
|
Lance F. Tucker
|
|
Senior Vice President, Chief Financial
|
|
Officer, Chief Administrative Officer and
|
|
Treasurer |
Other Long-term Liabilities (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 25, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Long-term Liabilities | Other
long-term liabilities consist of the following (in
thousands):
|
Acquisitions (Narrative) (Detail) (USD $)
|
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2011
Restaurant
|
Dec. 26, 2010
Restaurant
|
Dec. 27, 2009
Florida [Member]
Restaurant
|
|
Business Acquisition [Line Items] | |||
Number of restaurants acquired | 0 | 0 | 11 |
Purchase price of restaurants | $ 2,800,000 | ||
Purchase price of restaurants, cash paid | 460,000 | ||
Purchase price of restaurants, cancellation of note due to the company | 2,300,000 | ||
Purchase price allocation, goodwill | $ 1,500,000 | ||
Goodwill amortization period, years | 15 years |
Income Taxes (Narrative) (Detail) (USD $)
|
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2011
|
Dec. 26, 2010
|
Dec. 27, 2009
|
|
Income Taxes [Line Items] | |||
Foreign tax net operating loss carryovers | $ 28,800,000 | $ 27,800,000 | |
Income taxes paid | 15,600,000 | 21,700,000 | 24,800,000 |
Decrease in liability for unrecognized tax benefits resulting from finalization of current examinations and other issues | 377,000 | ||
Income tax expense, interest benefits | 368,000 | 145,000 | |
Income tax expense, accrued interest and penalties | $ 985,000 | $ 1,400,000 |
Goodwill (Changes in the Carrying Amount of Goodwill by Reportable Segment) (Detail) (USD $)
|
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 25, 2011
|
Dec. 26, 2010
|
Dec. 27, 2009
|
|||||
Goodwill [Line Items] | |||||||
Beginning balance | $ 74,697,000 | $ 75,066,000 | |||||
Foreign currency adjustments | 388,000 | (369,000) | |||||
Ending balance | 75,085,000 | 74,697,000 | |||||
Domestic Company-owned Restaurant [Member]
|
|||||||
Goodwill [Line Items] | |||||||
Beginning balance | 55,260,000 | 55,260,000 | |||||
Foreign currency adjustments | |||||||
Ending balance | 55,260,000 | 55,260,000 | |||||
International [Member]
|
|||||||
Goodwill [Line Items] | |||||||
Beginning balance | 19,001,000 | [1] | 19,370,000 | [1] | |||
Foreign currency adjustments | 388,000 | [1] | (369,000) | [1] | |||
Ending balance | 19,389,000 | [1] | 19,001,000 | [1] | |||
Goodwill, accumulated impairment | 2,300,000 | 2,300,000 | 2,300,000 | ||||
All Others [Member]
|
|||||||
Goodwill [Line Items] | |||||||
Beginning balance | 436,000 | 436,000 | |||||
Foreign currency adjustments | |||||||
Ending balance | $ 436,000 | $ 436,000 | |||||
|
Restatement of Previously Issued Financial Statements (Narrative) (Detail) (As Restated [Member], USD $)
In Thousands, unless otherwise specified |
Dec. 25, 2011
|
Sep. 25, 2011
|
Jun. 26, 2011
|
Mar. 27, 2011
|
Dec. 26, 2010
|
Sep. 26, 2010
|
Jun. 27, 2010
|
Mar. 28, 2010
|
Dec. 27, 2009
|
Dec. 28, 2008
|
---|---|---|---|---|---|---|---|---|---|---|
As Restated [Member]
|
||||||||||
Redeemable noncontrolling interests | $ 3,965 | $ 3,558 | $ 3,648 | $ 3,146 | $ 3,512 | $ 3,142 | $ 4,431 | $ 3,906 | $ 3,215 | $ 3,414 |
Goodwill (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 25, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes to the Company's Goodwill, by Reporting Segment | The
following summarizes changes to the Company’s goodwill, by
reporting segment (in thousands):
* The international goodwill balances for all years presented are
net of accumulated impairment of
$2.3 million associated with our PJUK reporting
unit.
|
Related Party Transactions (Summary of Full-Year Transactions and Year-End Balances with Franchisees Owned by Related Parties, the Marketing Fund and Papa Card, Inc.) (Detail) (Affiliated Entity [Member], USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2011
|
Dec. 26, 2010
|
Dec. 27, 2009
|
|
Affiliated Entity [Member]
|
|||
Related Party Transaction [Line Items] | |||
Commissary sales | $ 22,132 | $ 19,137 | $ 17,625 |
Other sales | 2,352 | 1,961 | 2,284 |
Franchise royalties | 3,579 | 3,192 | 2,514 |
Franchise and development fees | 15 | 50 | |
Total | 28,078 | 24,290 | 22,473 |
Other income from affiliates | 57 | ||
Accounts receivable - affiliates | $ 682 | $ 624 | $ 648 |
Schedule II - Valuation and Qualifying Accounts (Detail) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 25, 2011
|
Dec. 26, 2010
|
Dec. 27, 2009
|
||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||||
Beginning balance | $ 20,869 | $ 20,807 | $ 19,471 | |||||||
Charged to (recovered from) Costs and Expenses | 388 | 1,882 | 2,197 | |||||||
Additions / (Deductions) | (4,844) | (1,820) | (861) | |||||||
Ending balance | 16,413 | 20,869 | 20,807 | |||||||
Allowance for Doubtful Accounts [Member]
|
||||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||||
Beginning balance | 2,795 | 2,791 | 3,003 | |||||||
Charged to (recovered from) Costs and Expenses | 1,072 | 1,350 | 1,452 | |||||||
Additions / (Deductions) | (833) | [1] | (1,346) | [1] | (1,664) | [1] | ||||
Ending balance | 3,034 | 2,795 | 2,791 | |||||||
Allowance for Franchise Notes Receivable [Member]
|
||||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||||
Beginning balance | 9,951 | 10,858 | 9,265 | |||||||
Charged to (recovered from) Costs and Expenses | (35) | (433) | 790 | |||||||
Additions / (Deductions) | (4,011) | [1] | (474) | [1] | 803 | [1] | ||||
Ending balance | 5,905 | 9,951 | 10,858 | |||||||
Valuation Allowance, Operating Loss Carryforwards [Member]
|
||||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||||
Beginning balance | 8,123 | 7,158 | 7,203 | |||||||
Charged to (recovered from) Costs and Expenses | (649) | 965 | (45) | |||||||
Ending balance | 7,474 | 8,123 | 7,158 | |||||||
Business Restructuring Reserves [Member]
|
||||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||||
Beginning balance | 310 | 525 | 454 | |||||||
Charged to (recovered from) Costs and Expenses | (155) | (84) | 284 | |||||||
Additions / (Deductions) | (66) | [2] | (131) | [2] | (213) | [2] | ||||
Ending balance | $ 89 | $ 310 | $ 525 | |||||||
|
Restaurant Impairment and Dispositions (Restaurant Impairment and Disposition Losses (Gains)) (Detail) (USD $)
|
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 25, 2011
|
Dec. 26, 2010
|
Dec. 27, 2009
|
|||||
Business Disposition [Line Items] | |||||||
Net book value of divested restaurants | $ 2,828,000 | $ 659,000 | |||||
Cash proceeds received | 1,397,000 | 830,000 | |||||
Fair value of notes receivable | 1,431,000 | [1] | 312,000 | [1] | |||
Total consideration at fair value | 2,828,000 | [1] | 1,142,000 | [1] | |||
Gain on restaurants sold | (483,000) | ||||||
(Gain) loss on domestic restaurant closures | (203,000) | 95,000 | 1,140,000 | ||||
Adjustment to long-lived asset impairment reserves | 117,000 | 158,000 | |||||
Total restaurant impairment and disposition (gains) losses | (86,000) | 253,000 | 657,000 | ||||
Domestic Company-owned Restaurant [Member]
|
|||||||
Business Disposition [Line Items] | |||||||
Number of restaurants sold | 12 | 12 | |||||
Notes receivable received as part of agreements to sell restaurants | $ 1,400,000 | $ 500,000 | |||||
|
Commitments and Contingencies (Future Gross Lease Costs, Future Expected Sublease Payments and Net Lease Costs) (Detail) (USD $)
In Thousands, unless otherwise specified |
Dec. 25, 2011
|
---|---|
Contingencies | |
Gross Lease Costs, 2012 | $ 29,760 |
Gross Lease Costs, 2013 | 26,430 |
Gross Lease Costs, 2014 | 22,394 |
Gross Lease Costs, 2015 | 17,703 |
Gross Lease Costs, 2016 | 12,853 |
Gross Lease Costs, Thereafter | 29,703 |
Gross Lease Costs, Total | 138,843 |
Future Expected Sublease Payments, 2012 | 3,675 |
Future Expected Sublease Payments, 2013 | 3,583 |
Future Expected Sublease Payments, 2014 | 3,330 |
Future Expected Sublease Payments, 2015 | 3,068 |
Future Expected Sublease Payments, 2016 | 2,777 |
Future Expected Sublease Payments, Thereafter | 15,653 |
Future Expected Sublease Payments, Total | 32,086 |
Net Lease Costs, 2012 | 26,085 |
Net Lease Costs, 2013 | 22,847 |
Net Lease Costs, 2014 | 19,064 |
Net Lease Costs, 2015 | 14,635 |
Net Lease Costs, 2016 | 10,076 |
Net Lease Costs, Thereafter | 14,050 |
Net Lease Costs, Total | $ 106,757 |
Quarterly Data - Unaudited (Detail) (As Restated [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 25, 2011
|
Sep. 25, 2011
|
Jun. 26, 2011
|
Mar. 27, 2011
|
Dec. 26, 2010
|
Sep. 26, 2010
|
Jun. 27, 2010
|
Mar. 28, 2010
|
Jun. 26, 2011
|
Jun. 27, 2010
|
Sep. 25, 2011
|
Sep. 26, 2010
|
Dec. 25, 2011
|
Dec. 26, 2010
|
Dec. 27, 2009
|
|||||||||||||||||
As Restated [Member]
|
|||||||||||||||||||||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||||||||||||||||||||
Total revenues | $ 306,213 | [1] | $ 305,668 | [1] | $ 293,534 | [1] | $ 312,467 | [1] | $ 286,838 | [1] | $ 273,126 | [1] | $ 280,647 | [1] | $ 285,786 | [1] | $ 1,217,882 | $ 1,126,397 | $ 1,078,550 | ||||||||||||
Operating income | 23,693 | [1] | 16,958 | [1] | 19,155 | [1] | 27,211 | [1] | 22,220 | [1],[2] | 13,783 | [1],[2] | 22,799 | [1],[2] | 27,942 | [1],[2] | 87,017 | 86,744 | 95,218 | ||||||||||||
Net income | $ 15,891 | [3] | $ 10,800 | $ 12,068 | $ 15,976 | $ 14,220 | [2],[4] | $ 7,904 | [2] | $ 13,260 | [2] | $ 17,194 | [2] | $ 28,044 | $ 30,454 | $ 38,844 | $ 38,358 | $ 54,735 | $ 52,578 | $ 53,729 | |||||||||||
Basic earnings per common share | $ 0.66 | $ 0.43 | $ 0.47 | $ 0.63 | $ 0.56 | [2],[4] | $ 0.30 | [2] | $ 0.50 | [2] | $ 0.64 | [2] | $ 1.10 | $ 1.13 | $ 1.54 | $ 1.44 | $ 2.19 | $ 2.00 | $ 1.94 | ||||||||||||
Earnings per common share - assuming dilution | $ 0.65 | $ 0.43 | $ 0.47 | $ 0.62 | $ 0.55 | [2],[4] | $ 0.30 | [2] | $ 0.49 | [2] | $ 0.63 | [2] | $ 1.09 | $ 1.13 | $ 1.52 | $ 1.43 | $ 2.16 | $ 1.99 | $ 1.93 | ||||||||||||
|
Equity Compensation (Information Pertaining to Restricted Stock Activity) (Detail) (Restricted Stock [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2011
|
Dec. 26, 2010
|
Dec. 27, 2009
|
|
Restricted Stock [Member]
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted Shares, Beginning Balance | 284 | 270 | 283 |
Restricted Shares, Granted | 160 | 171 | 108 |
Restricted Shares, Forfeited | (78) | (123) | (121) |
Restricted Shares, Vested | (116) | (34) | |
Restricted Shares, Ending Balance | 250 | 284 | 270 |
Weighted Average Grant-Date Fair Value, Beginning Balance | $ 26.62 | $ 28.34 | $ 29.84 |
Weighted Average Grant-Date Fair Value, Granted | $ 29.07 | $ 27.13 | $ 26.54 |
Weighted Average Grant-Date Fair Value, Forfeited | $ 26.99 | $ 30.77 | $ 30.03 |
Weighted Average Grant-Date Fair Value, Vested | $ 27.27 | $ 26.40 | |
Weighted Average Grant-Date Fair Value, Ending Balance | $ 28.19 | $ 26.62 | $ 28.34 |
Quarterly Data - Unaudited (Parenthetical) (Detail) (USD $)
|
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 25, 2011
|
Sep. 25, 2011
|
Jun. 26, 2011
|
Mar. 27, 2011
|
Dec. 26, 2010
|
Sep. 26, 2010
|
Jun. 27, 2010
|
Mar. 28, 2010
|
Jun. 26, 2011
|
Jun. 27, 2010
|
Sep. 25, 2011
|
Sep. 26, 2010
|
Dec. 25, 2011
|
Dec. 26, 2010
|
Dec. 27, 2009
|
|
As Previously Reported [Member]
|
|||||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||||
Net income | $ 15,981,000 | $ 11,123,000 | $ 12,124,000 | $ 16,427,000 | $ 14,025,000 | $ 7,848,000 | $ 13,192,000 | $ 16,875,000 | $ 28,551,000 | $ 30,067,000 | $ 39,674,000 | $ 37,915,000 | $ 55,655,000 | $ 51,940,000 | $ 57,453,000 |
Earnings per common share - assuming dilution | $ 0.44 | $ 0.47 | $ 0.64 | $ 0.55 | $ 0.30 | $ 0.49 | $ 0.62 | $ 1.11 | $ 1.11 | $ 1.55 | $ 1.42 | $ 2.20 | $ 1.96 | $ 2.06 | |
Basic earnings per common share | $ 0.45 | $ 0.48 | $ 0.64 | $ 0.55 | $ 0.30 | $ 0.49 | $ 0.62 | $ 1.12 | $ 1.12 | $ 1.57 | $ 1.43 | $ 2.22 | $ 1.97 | $ 2.07 | |
BIBP Commodities, Inc. [Member]
|
|||||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||||
Net income | 843,000 | (417,000) | 1,700,000 | 2,200,000 | |||||||||||
Operating income | 1,300,000 | (658,000) | 2,700,000 | 3,500,000 | |||||||||||
Earnings per common share - assuming dilution | $ 0.04 | $ 0.02 | $ 0.06 | $ 0.08 | |||||||||||
Operating income, excluding reduction in cost of sales associated with agreement to pay for past cheese purchases | 6,800,000 | ||||||||||||||
Net income, excluding reduction in cost of sales associated with agreement to pay for past cheese purchases | 4,300,000 | ||||||||||||||
Earnings per common share - assuming dilution, excluding reduction in cost of sales associated with agreement to pay for past cheese purchases | $ 0.16 | ||||||||||||||
Reduction in cost of sales | $ 14,200,000 |
Share Repurchase Program (Detail) (USD $)
In Millions, except Share data, unless otherwise specified |
12 Months Ended | 2 Months Ended |
---|---|---|
Dec. 25, 2011
|
Feb. 14, 2012
Subsequent Event [Member]
|
|
Accelerated Share Repurchases [Line Items] | ||
Stock repurchase program, authorized amount | $ 925.0 | |
Stock repurchase program, expiration date | Dec. 31, 2012 | |
Stock repurchase program, remaining authorized amount | 71.5 | 69.3 |
Stock repurchased during period, shares | 60,000 | |
Stock repurchased during period, value | $ 2.2 |
Income Taxes (Reconciliation of Income Tax Computed at U.S. Federal Statutory Rate to Income Tax Expense) (Detail) (As Restated [Member], USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 25, 2011
|
Dec. 26, 2010
|
Dec. 27, 2009
|
|
As Restated [Member]
|
|||
Income Tax Expense | |||
Tax at U.S. federal statutory rate | $ 29,677 | $ 29,159 | $ 29,465 |
State and local income taxes | 1,702 | 1,896 | 2,037 |
Foreign income taxes | 1,273 | 1,171 | 904 |
Settlement of certain tax issues | (1,912) | (550) | (1,238) |
Income of consolidated partnerships attributable to noncontrolling interests | (1,379) | (1,297) | (1,397) |
Non-qualified deferred compensation plan loss (income) | 153 | (434) | (803) |
Tax credits and other | (3,190) | (2,698) | (2,266) |
Total | $ 26,324 | $ 27,247 | $ 26,702 |
Income Tax Rate | |||
Tax at U.S. federal statutory rate | 35.00% | 35.00% | 35.00% |
State and local income taxes | 2.00% | 2.30% | 2.40% |
Foreign income taxes | 1.50% | 1.40% | 1.10% |
Settlement of certain tax issues | (2.30%) | (0.70%) | (1.50%) |
Income of consolidated partnerships attributable to noncontrolling interests | (1.60%) | (1.60%) | (1.70%) |
Non-qualified deferred compensation plan loss (income) | 0.20% | (0.50%) | (0.90%) |
Tax credits and other | (3.80%) | (3.20%) | (2.70%) |
Total | 31.00% | 32.70% | 31.70% |
Equity Compensation
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Compensation |
17. Equity Compensation
We
award stock options and restricted stock from time to time under
the Papa John’s International, Inc. 2011 Omnibus Incentive
Plan and other such agreements as may arise. There are
approximately 4.8 million shares of common stock authorized for
issuance and remaining available under the 2011 Omnibus Incentive
Plan as of December 25, 2011, which includes 2.0 million shares
transferred from the Papa John’s International, Inc. 2008
Omnibus Incentive Plan. Option awards are granted with an exercise
price equal to the market price of the Company’s stock at the
date of grant. Options outstanding as of December 25, 2011
generally expire five years from the date of grant and vest over a
24- or 36-month period.
We
recorded stock-based employee compensation expense of $6.7 million
in 2011, $6.1 million in 2010 and $5.8 million in 2009. The total
income tax benefit recognized in the income statement for
share-based compensation arrangements was $2.2 million in 2011,
$2.2 million in 2010 and $2.1 million in 2009. At December 25,
2011, there was $5.5 million of unrecognized compensation cost
related to nonvested option awards and restricted stock, of which
the Company expects to recognize $3.8 million in 2012, $1.5 million
in 2013 and $200,000 in 2014.
Stock Options
Options
exercised included 572,000 shares in 2011, 356,000 shares in 2010
and 612,000 shares in 2009. The total intrinsic value of the
options exercised during 2011, 2010 and 2009 was $4.6 million, $2.6
million and $4.3 million, respectively. Cash received upon the
exercise of stock options was $14.0 million, $6.4 million and $9.8
million during 2011, 2010 and 2009, respectively, and the related
tax benefits realized were approximately $1.7 million, $943,000 and
$1.5 million during the corresponding periods.
Information
pertaining to option activity during 2011 is as follows (number of
options and aggregate intrinsic value in thousands):
The
following is a summary of the significant assumptions used in
estimating the fair value of options granted in 2011, 2010 and
2009:
The
risk-free interest rate for the periods within the contractual life
of an option is based on the U.S. Treasury yield curve in effect at
the time of grant. The estimated volatility is based on the
historical volatility of our stock and other factors. The expected
term of options represents the period of time that options granted
are expected to be outstanding.
The
weighted average grant-date fair values of options granted during
2011, 2010 and 2009 was $9.50, $9.13 and $7.26, respectively. The
Company granted 403,000, 445,000 and 997,000 options in 2011, 2010
and 2009, respectively.
Restricted Stock
In
2011, 2010 and 2009, we granted shares of restricted stock that
were 100% time-based and have a three-year graded vesting schedule.
These restricted shares are intended to focus participants on our
long-range objectives, while at the same time serving as a
retention mechanism. Prior to 2009, we granted performance-based
restricted stock, which vested based on the achievement of
compounded annual growth rate (CAGR) of consolidated income, as
defined. The fair value of the restricted stock is based on the
market price of the Company’s shares on the grant
date.
Information
pertaining to restricted stock activity during 2011, 2010 and 2009
is as follows (shares in thousands):
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Significant Accounting Policies (Calculation of Earnings Per Share) (Detail) (As Restated [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||
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Dec. 25, 2011
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Sep. 25, 2011
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Jun. 26, 2011
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Mar. 27, 2011
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Dec. 26, 2010
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Sep. 26, 2010
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Jun. 27, 2010
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Mar. 28, 2010
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Jun. 26, 2011
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Jun. 27, 2010
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Sep. 25, 2011
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Sep. 26, 2010
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Dec. 25, 2011
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Dec. 26, 2010
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Dec. 27, 2009
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As Restated [Member]
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Basic earnings per common share: | ||||||||||||||||||||||||||
Net income, net of redeemable noncontrolling interests | $ 15,891 | [1] | $ 10,800 | $ 12,068 | $ 15,976 | $ 14,220 | [2],[3] | $ 7,904 | [2] | $ 13,260 | [2] | $ 17,194 | [2] | $ 28,044 | $ 30,454 | $ 38,844 | $ 38,358 | $ 54,735 | $ 52,578 | $ 53,729 | ||||||
Weighted average shares outstanding | 25,043 | 26,328 | 27,738 | |||||||||||||||||||||||
Basic earnings per common share | $ 0.66 | $ 0.43 | $ 0.47 | $ 0.63 | $ 0.56 | [2],[3] | $ 0.30 | [2] | $ 0.50 | [2] | $ 0.64 | [2] | $ 1.10 | $ 1.13 | $ 1.54 | $ 1.44 | $ 2.19 | $ 2.00 | $ 1.94 | |||||||
Earnings per common share - assuming dilution: | ||||||||||||||||||||||||||
Net income, net of redeemable noncontrolling interests | $ 15,891 | [1] | $ 10,800 | $ 12,068 | $ 15,976 | $ 14,220 | [2],[3] | $ 7,904 | [2] | $ 13,260 | [2] | $ 17,194 | [2] | $ 28,044 | $ 30,454 | $ 38,844 | $ 38,358 | $ 54,735 | $ 52,578 | $ 53,729 | ||||||
Weighted average shares outstanding | 25,043 | 26,328 | 27,738 | |||||||||||||||||||||||
Dilutive effect of outstanding equity awards | 267 | 140 | 171 | |||||||||||||||||||||||
Diluted weighted average shares outstanding | 25,310 | 26,468 | 27,909 | |||||||||||||||||||||||
Earnings per common share - assuming dilution | $ 0.65 | $ 0.43 | $ 0.47 | $ 0.62 | $ 0.55 | [2],[3] | $ 0.30 | [2] | $ 0.49 | [2] | $ 0.63 | [2] | $ 1.09 | $ 1.13 | $ 1.52 | $ 1.43 | $ 2.16 | $ 1.99 | $ 1.93 | |||||||
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Commitments and Contingencies (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 25, 2011
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Schedule of Future Gross Lease Costs, Future Expected Sublease Payments and Net Lease Costs | Future
gross lease costs, future expected sublease payments and net lease
costs as of December 25, 2011, are as follows (in
thousands):
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Commitments and Contingencies (Narrative) (Detail) (USD $)
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12 Months Ended | ||
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Dec. 25, 2011
RenewalOptions
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Dec. 26, 2010
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Dec. 27, 2009
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Contingencies | |||
Operating leases, average term in years | 5 years | ||
Number of renewals | 1 | ||
Total lease expense | $ 25,700,000 | $ 24,500,000 | $ 24,200,000 |
Investments in Industrial Revenue Bonds | 80,200,000 | ||
Investments in Industrial Revenue Bonds, percent owned | 100.00% | ||
United Kingdom Restaurant Sites [Member] | Restaurant Sites [Member]
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Contingencies | |||
Number of lease agreements the company is contingently liable | 40 | ||
Potential amount of undiscounted payments under lease arrangements | 2,500,000 | ||
United Kingdom Restaurant Sites [Member] | Majority Expiration [Member]
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Contingencies | |||
Lease expiration, year | 2014 | ||
United Kingdom Restaurant Sites [Member] | Latest Expiration [Member]
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Contingencies | |||
Lease expiration, year | 2017 | ||
United Kingdom Restaurant Sites [Member] | Commitments [Member]
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Contingencies | |||
Loss contingency reserves | 832,000 | ||
Distribution Subsidiary [Member]
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Contingencies | |||
Operating leases, average term in years | 8 years | ||
United Kingdom Subsidiary [Member]
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Contingencies | |||
Payments received from sublease | $ 3,700,000 | $ 3,100,000 | $ 2,900,000 |
Notes Receivable (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||
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Dec. 25, 2011
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Schedule of Changes in Notes Receivable Allowance for Doubtful Accounts | The
following summarizes changes in our notes receivable allowance for
doubtful accounts (in thousands):
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Significant Accounting Policies (Income Before Income Tax Attributable to Joint Ventures) (Detail) (Corporate Joint Venture [Member], USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Dec. 25, 2011
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Dec. 26, 2010
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Dec. 27, 2009
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Corporate Joint Venture [Member]
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Redeemable Noncontrolling Interest [Line Items] | |||
Papa John's International, Inc. | $ 6,184 | $ 5,658 | $ 6,171 |
Noncontrolling interests | 3,732 | 3,485 | 3,756 |
Total income before income tax | $ 9,916 | $ 9,143 | $ 9,927 |
Schedule of Other Long-term Liabilities (Detail) (As Restated [Member], USD $)
In Thousands, unless otherwise specified |
Dec. 25, 2011
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Sep. 25, 2011
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Jun. 26, 2011
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Mar. 27, 2011
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Dec. 26, 2010
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Sep. 26, 2010
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Jun. 27, 2010
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Mar. 28, 2010
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Dec. 27, 2009
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As Restated [Member]
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Schedule of Other Liabilities [Line Items] | |||||||||
Mandatorily redeemable noncontrolling interests | $ 11,065 | $ 9,972 | |||||||
Deferred compensation plan | 10,793 | 10,478 | |||||||
Insurance reserves | 10,063 | 10,153 | |||||||
Other | 4,755 | 5,973 | |||||||
Total | $ 36,676 | $ 22,545 | $ 23,153 | $ 22,677 | $ 36,576 | $ 22,937 | $ 22,978 | $ 24,407 | $ 27,846 |
Debt and Credit Arrangements (Effect of Derivative Instruments on the Consolidated Financial Statements) (Detail) (Interest Rate Swap [Member], USD $)
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12 Months Ended | |||||||
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Dec. 25, 2011
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Dec. 26, 2010
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Dec. 27, 2009
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Debt Instrument [Line Items] | ||||||||
Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) | $ 165,000 | $ 2,404,000 | $ 1,388,000 | |||||
Outstanding debt balance | 49,000,000 | |||||||
Floating rate debt | 50,000,000 | |||||||
Interest Expense [Member]
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Debt Instrument [Line Items] | ||||||||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (341,000) | (4,131,000) | (4,037,000) | |||||
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | $ 65,000 | [1] | $ (25,000) | [1] | $ (40,000) | [1] | ||
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Restatement of Previously Issued Financial Statements (Summary of Corrections by Financial Statement Line Item) (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||
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Dec. 25, 2011
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Sep. 25, 2011
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Jun. 26, 2011
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Mar. 27, 2011
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Dec. 26, 2010
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Sep. 26, 2010
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Jun. 27, 2010
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Mar. 28, 2010
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Jun. 26, 2011
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Jun. 27, 2010
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Sep. 25, 2011
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Sep. 26, 2010
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Dec. 25, 2011
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Dec. 26, 2010
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Dec. 27, 2009
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Dec. 28, 2008
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As Previously Reported [Member]
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Consolidated Statement of Stockholders' Equity | |||||||||||||||||||||||||||||||||
Noncontrolling interests in subsidiaries | $ 8,569 | $ 8,245 | $ 8,528 | $ 7,899 | $ 8,506 | $ 7,933 | $ 9,298 | $ 9,077 | $ 8,528 | $ 9,298 | $ 8,245 | $ 7,933 | $ 8,569 | $ 8,506 | $ 8,168 | $ 8,252 | |||||||||||||||||
Total stockholders' equity | 218,222 | 212,554 | 223,801 | 223,416 | 207,200 | 193,262 | 202,498 | 204,100 | 223,801 | 202,498 | 212,554 | 193,262 | 218,222 | 207,200 | 185,037 | 138,238 | |||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||||||||||||||||
Noncurrent deferred income tax assets | 5,557 | 5,920 | 4,817 | 5,920 | 5,557 | 6,804 | |||||||||||||||||||||||||||
Noncurrent deferred income tax liabilities | 9,147 | 7,110 | 3,485 | 1,138 | 341 | 3,485 | 7,110 | 9,147 | 341 | ||||||||||||||||||||||||
Other long-term liabilities | 25,611 | 11,542 | 12,478 | 12,219 | 26,604 | 12,854 | 12,729 | 13,744 | 12,478 | 12,729 | 11,542 | 12,854 | 25,611 | 26,604 | 16,886 | ||||||||||||||||||
Retained earnings | 298,807 | 282,826 | 271,703 | 259,579 | 243,152 | 229,127 | 221,279 | 208,087 | 271,703 | 221,279 | 282,826 | 229,127 | 298,807 | 243,152 | 191,212 | ||||||||||||||||||
Noncontrolling interests in subsidiaries | 8,569 | 8,245 | 8,528 | 7,899 | 8,506 | 7,933 | 9,298 | 9,077 | 8,528 | 9,298 | 8,245 | 7,933 | 8,569 | 8,506 | 8,168 | 8,252 | |||||||||||||||||
Total stockholders' equity | 218,222 | 212,554 | 223,801 | 223,416 | 207,200 | 193,262 | 202,498 | 204,100 | 223,801 | 202,498 | 212,554 | 193,262 | 218,222 | 207,200 | 185,037 | 138,238 | |||||||||||||||||
Consolidated Statement of Income | |||||||||||||||||||||||||||||||||
Interest expense | 282 | 293 | 608 | 1,416 | 1,333 | 1,244 | 901 | 2,577 | 1,183 | 3,993 | 1,497 | 5,338 | 5,653 | ||||||||||||||||||||
Income before income taxes | 16,846 | 19,067 | 26,780 | 12,540 | 21,663 | 26,929 | 45,847 | 48,592 | 62,693 | 61,132 | 86,275 | 82,281 | 90,194 | ||||||||||||||||||||
Income tax expense | 4,906 | 6,014 | 9,231 | 4,020 | 7,560 | 8,965 | 15,245 | 16,525 | 20,151 | 20,545 | 26,888 | 26,856 | 28,985 | ||||||||||||||||||||
Net income, including noncontrolling interests | 11,940 | 13,053 | 17,549 | 8,520 | 14,103 | 17,964 | [1] | 30,602 | 32,067 | [1] | 42,542 | 40,587 | [1],[2] | 59,387 | 55,425 | 61,209 | |||||||||||||||||
Net income, net of noncontrolling interests | 15,981 | 11,123 | 12,124 | 16,427 | 14,025 | 7,848 | 13,192 | 16,875 | 28,551 | 30,067 | 39,674 | 37,915 | 55,655 | 51,940 | 57,453 | ||||||||||||||||||
Comprehensive income, including noncontrolling interests | 11,687 | 12,539 | 18,822 | 10,572 | 15,075 | 16,704 | 31,361 | 31,779 | 43,048 | 42,351 | 60,387 | 57,358 | 63,943 | ||||||||||||||||||||
Basic earnings per common share | $ 0.45 | $ 0.48 | $ 0.64 | $ 0.55 | $ 0.30 | $ 0.49 | $ 0.62 | $ 1.12 | $ 1.12 | $ 1.57 | $ 1.43 | $ 2.22 | $ 1.97 | $ 2.07 | |||||||||||||||||||
Earnings per common share - assuming dilution | $ 0.44 | $ 0.47 | $ 0.64 | $ 0.55 | $ 0.30 | $ 0.49 | $ 0.62 | $ 1.11 | $ 1.11 | $ 1.55 | $ 1.42 | $ 2.20 | $ 1.96 | $ 2.06 | |||||||||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||||||||||||||||||||||
Net income, including noncontrolling interests | 11,940 | 13,053 | 17,549 | 8,520 | 14,103 | 17,964 | [1] | 30,602 | 32,067 | [1] | 42,542 | 40,587 | [1],[2] | 59,387 | 55,425 | 61,209 | |||||||||||||||||
Deferred income taxes | 2,664 | 1,901 | 4,332 | (250) | 5,219 | (850) | 9,909 | 4,553 | 7,469 | ||||||||||||||||||||||||
Other | 43 | 330 | 316 | 368 | 1,272 | 303 | 3,072 | 286 | 1,071 | ||||||||||||||||||||||||
Net cash provided by operating activities | 26,687 | 27,102 | [1] | 52,925 | 47,686 | [1] | 87,216 | 64,831 | [1],[3] | 101,008 | 92,581 | 103,826 | |||||||||||||||||||||
Scenario, Adjustment [Member]
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Consolidated Statement of Stockholders' Equity | |||||||||||||||||||||||||||||||||
Noncontrolling interests in subsidiaries | (8,569) | (8,506) | (8,569) | (8,506) | (8,168) | (3,414) | |||||||||||||||||||||||||||
Total stockholders' equity | (12,575) | (11,592) | (12,575) | (11,592) | (11,892) | (3,414) | |||||||||||||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||||||||||||||||
Noncurrent deferred income tax assets | 2,283 | ||||||||||||||||||||||||||||||||
Noncurrent deferred income tax liabilities | (2,455) | (1,892) | (2,455) | (1,892) | |||||||||||||||||||||||||||||
Other long-term liabilities | 11,065 | 9,972 | 11,065 | 9,972 | 10,960 | ||||||||||||||||||||||||||||
Redeemable noncontrolling interests | 3,965 | 3,512 | 3,965 | 3,512 | 3,215 | ||||||||||||||||||||||||||||
Retained earnings | (4,006) | (3,086) | (4,006) | (3,086) | (3,724) | ||||||||||||||||||||||||||||
Noncontrolling interests in subsidiaries | (8,569) | (8,506) | (8,569) | (8,506) | (8,168) | (3,414) | |||||||||||||||||||||||||||
Total stockholders' equity | (12,575) | (11,592) | (12,575) | (11,592) | (11,892) | (3,414) | |||||||||||||||||||||||||||
Consolidated Statement of Income | |||||||||||||||||||||||||||||||||
Interest expense | 1,484 | (1,029) | 6,007 | ||||||||||||||||||||||||||||||
Income before income taxes | (1,484) | 1,029 | (6,007) | ||||||||||||||||||||||||||||||
Income tax expense | (564) | 391 | (2,283) | ||||||||||||||||||||||||||||||
Net income, including noncontrolling interests | (920) | 638 | (3,724) | ||||||||||||||||||||||||||||||
Net income, net of noncontrolling interests | (920) | 638 | (3,724) | ||||||||||||||||||||||||||||||
Comprehensive income, including noncontrolling interests | (920) | 638 | (3,724) | ||||||||||||||||||||||||||||||
Basic earnings per common share | $ (0.03) | $ 0.03 | $ (0.13) | ||||||||||||||||||||||||||||||
Earnings per common share - assuming dilution | $ (0.04) | $ 0.03 | $ (0.13) | ||||||||||||||||||||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||||||||||||||||||||||
Net income, including noncontrolling interests | (920) | 638 | (3,724) | ||||||||||||||||||||||||||||||
Deferred income taxes | (564) | 391 | (2,283) | ||||||||||||||||||||||||||||||
Other | 1,484 | (1,029) | 6,007 | ||||||||||||||||||||||||||||||
As Restated [Member]
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Consolidated Statement of Stockholders' Equity | |||||||||||||||||||||||||||||||||
Noncontrolling interests in subsidiaries | 4,838 | ||||||||||||||||||||||||||||||||
Total stockholders' equity | 205,647 | 200,393 | 211,680 | 211,980 | 195,608 | 182,048 | 189,863 | 191,618 | 211,680 | 189,863 | 200,393 | 182,048 | 205,647 | 195,608 | 173,145 | 134,824 | |||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||||||||||||||||
Noncurrent deferred income tax assets | 1,030 | 1,551 | 7,568 | 7,965 | 6,904 | 7,965 | 7,568 | 1,551 | 9,087 | ||||||||||||||||||||||||
Noncurrent deferred income tax liabilities | 6,692 | 4,710 | 1,283 | 1,283 | 4,710 | 6,692 | |||||||||||||||||||||||||||
Other long-term liabilities | 36,676 | 22,545 | 23,153 | 22,677 | 36,576 | 22,937 | 22,978 | 24,407 | 23,153 | 22,978 | 22,545 | 22,937 | 36,676 | 36,576 | 27,846 | ||||||||||||||||||
Redeemable noncontrolling interests | 3,965 | 3,558 | 3,648 | 3,146 | 3,512 | 3,142 | 4,431 | 3,906 | 3,648 | 4,431 | 3,558 | 3,142 | 3,965 | 3,512 | 3,215 | 3,414 | |||||||||||||||||
Retained earnings | 294,801 | 278,910 | 268,110 | 256,042 | 240,066 | 225,846 | 217,942 | 204,682 | 268,110 | 217,942 | 278,910 | 225,846 | 294,801 | 240,066 | 187,488 | ||||||||||||||||||
Noncontrolling interests in subsidiaries | 4,838 | ||||||||||||||||||||||||||||||||
Total stockholders' equity | 205,647 | 200,393 | 211,680 | 211,980 | 195,608 | 182,048 | 189,863 | 191,618 | 211,680 | 189,863 | 200,393 | 182,048 | 205,647 | 195,608 | 173,145 | 134,824 | |||||||||||||||||
Consolidated Statement of Income | |||||||||||||||||||||||||||||||||
Interest expense | 804 | 383 | 1,335 | 1,326 | 1,223 | 730 | 1,718 | 1,953 | 2,522 | 3,279 | 2,981 | 4,309 | 11,660 | ||||||||||||||||||||
Income before income taxes | 16,324 | 18,977 | 26,053 | 12,630 | 21,773 | 27,443 | 45,030 | 49,216 | 61,354 | 61,846 | 84,791 | 83,310 | 84,187 | ||||||||||||||||||||
Income tax expense | 4,707 | 5,980 | 8,955 | 4,054 | 7,602 | 9,160 | 14,935 | 16,762 | 19,642 | 20,816 | 26,324 | 27,247 | 26,702 | ||||||||||||||||||||
Net income, including noncontrolling interests | 11,617 | 12,997 | 17,098 | 8,576 | 14,171 | 18,283 | [1] | 30,095 | 32,454 | [1] | 41,712 | 41,030 | [1],[2] | 58,467 | 56,063 | 57,485 | |||||||||||||||||
Net income, net of noncontrolling interests | 15,891 | [2] | 10,800 | 12,068 | 15,976 | 14,220 | [4],[5] | 7,904 | [4] | 13,260 | [4] | 17,194 | [4] | 28,044 | 30,454 | 38,844 | 38,358 | 54,735 | 52,578 | 53,729 | |||||||||||||
Comprehensive income, including noncontrolling interests | 11,364 | 12,483 | 18,371 | 10,628 | 15,143 | 17,023 | 30,854 | 32,166 | 42,218 | 42,794 | 59,467 | 57,996 | 60,219 | ||||||||||||||||||||
Basic earnings per common share | $ 0.66 | $ 0.43 | $ 0.47 | $ 0.63 | $ 0.56 | [4],[5] | $ 0.30 | [4] | $ 0.50 | [4] | $ 0.64 | [4] | $ 1.10 | $ 1.13 | $ 1.54 | $ 1.44 | $ 2.19 | $ 2.00 | $ 1.94 | ||||||||||||||
Earnings per common share - assuming dilution | $ 0.65 | $ 0.43 | $ 0.47 | $ 0.62 | $ 0.55 | [4],[5] | $ 0.30 | [4] | $ 0.49 | [4] | $ 0.63 | [4] | $ 1.09 | $ 1.13 | $ 1.52 | $ 1.43 | $ 2.16 | $ 1.99 | $ 1.93 | ||||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||||||||||||||||||||||
Net income, including noncontrolling interests | 11,617 | 12,997 | 17,098 | 8,576 | 14,171 | 18,283 | [1] | 30,095 | 32,454 | [1] | 41,712 | 41,030 | [1],[2] | 58,467 | 56,063 | 57,485 | |||||||||||||||||
Deferred income taxes | 2,388 | 2,096 | 4,022 | (13) | 4,710 | (579) | 9,345 | 4,944 | 5,186 | ||||||||||||||||||||||||
Other | 770 | (184) | 1,133 | (256) | 2,611 | (411) | 4,556 | (743) | 7,078 | ||||||||||||||||||||||||
Net cash provided by operating activities | $ 26,687 | $ 27,102 | [1] | $ 52,925 | $ 47,686 | [1] | $ 87,216 | $ 64,831 | [1],[3] | $ 101,008 | $ 92,581 | $ 103,826 | |||||||||||||||||||||
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Restatement of Previously Issued Financial Statements
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restatement of Previously Issued Financial Statements |
1. Restatement of Previously Issued Financial
Statements
We
are restating our consolidated financial statements for the fiscal
years ended December 25, 2011, December 26, 2010 and December 27,
2009. In connection with the evaluation of the accounting for newly
formed joint ventures, we reviewed our accounting for our
previously existing joint venture arrangements. As a result of our
review, we determined an error occurred in the accounting for one
joint venture agreement, which contained a mandatorily redeemable
feature added through a contract amendment in the third quarter of
2009. This provision contained in the 2009 contract amendment was
not previously considered in determining the classification and
measurement of the noncontrolling interest.
In
addition, we determined that an additional redeemable
noncontrolling interest was incorrectly classified in
stockholders’ equity and should be classified as temporary
equity.
As
a result of the addition of the mandatorily redeemable feature for
one joint venture agreement during the third quarter of 2009, we
corrected the classification and measurement errors for 2009, 2010
and 2011, by reclassifying the redeemable noncontrolling interest
from stockholders’ equity to other long-term liabilities in
our consolidated balance sheets. Changes in the redemption value
were recorded as interest expense in our consolidated statements of
income for the respective periods. In addition, to correct the
classification of another joint venture with a redeemable feature,
we reclassified $3.4 million of noncontrolling interests from total
stockholders’ equity to redeemable noncontrolling interests
(temporary equity) as of December 28, 2008 and all subsequent
years. The impact of the restatements on the financial
statements is outlined in the tables below (in thousands, except
per share data). The corrections had no impact on total revenues,
operating income or operating cash flows and had no impact on our
compliance with debt covenants in any period
presented.
|
Net Property and Equipment (Detail) (USD $)
In Thousands, unless otherwise specified |
Dec. 25, 2011
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Dec. 26, 2010
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Property, Plant and Equipment [Line Items] | ||
Land | $ 32,735 | $ 32,701 |
Buildings and improvements | 85,907 | 84,960 |
Leasehold improvements | 90,855 | 85,230 |
Equipment and other | 231,059 | 217,199 |
Construction in progress | 5,159 | 4,599 |
Total property and equipment | 445,715 | 424,689 |
Less accumulated depreciation and amortization | (263,805) | (239,318) |
Net property and equipment | $ 181,910 | $ 185,371 |