UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
Current Report
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported):
February
24, 2015
Commission File Number: 0-21660
PAPA JOHN’S INTERNATIONAL, INC.
(Exact
name of registrant as specified in its charter)
Delaware |
61-1203323 |
(State or other jurisdiction of |
(I.R.S. Employer Identification |
incorporation or organization) |
Number) |
2002 Papa Johns Boulevard
Louisville,
Kentucky 40299-2367
(Address
of principal executive offices)
(502) 261-7272
(Registrant’s
telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section 2 – Financial Information Item
2.02 Results of Operations and Financial Condition
On February 24, 2015, Papa John’s International, Inc. issued a press release announcing 2014 fourth quarter and full-year financial results and announcing 2015 operating assumptions and earnings guidance.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit Number |
Description |
99.1 |
Papa John’s International, Inc. press release dated February 24, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PAPA JOHN’S INTERNATIONAL, INC. |
|
(Registrant) |
|
Date: February 24, 2015 |
/s/ Lance F. Tucker |
Lance F. Tucker | |
Senior Vice President, Chief Financial |
EXHIBIT INDEX
Exhibit |
Description of Exhibit | |
99.1 |
Papa John’s International, Inc. press release dated February 24, 2015. |
Exhibit 99.1
Papa John’s Announces Fourth Quarter and Full Year 2014 Results
2015 Operating Assumptions and Earnings Guidance Announced
LOUISVILLE, Ky.--(BUSINESS WIRE)--February 24, 2015--Papa John’s International, Inc. (NASDAQ: PZZA) today announced financial results for the fourth quarter and fiscal year ended December 28, 2014.
Highlights
“I’d like to congratulate our corporate and franchise operators, who drove outstanding comparable sales to overcome a historically difficult commodity environment and deliver another record year for Papa John’s,” said Papa John’s founder, chairman, president and CEO, John Schnatter. “In 2015, we will continue to steadily grow the Papa John’s brand by leveraging our digital advantage, expanding our global footprint, and most important, consistently delivering a demonstrably better pizza.”
Fourth quarter 2014 revenues were $425.5 million, a 9.7% increase from fourth quarter 2013 revenues of $387.9 million. Fourth quarter 2014 net income increased 12.8% to $21.2 million, compared to fourth quarter 2013 net income of $18.8 million. Fourth quarter 2014 diluted earnings per share increased 26.8% to $0.52, compared to fourth quarter 2013 diluted earnings per share of $0.41.
Full year 2014 revenues were $1.60 billion, an increase of 11.1% from 2013 revenues of $1.44 billion. Full year 2014 net income was $73.3 million, compared to 2013 net income of $69.5 million. Full year diluted earnings per share were $1.75 compared to 2013 diluted earnings per share of $1.55, an increase of 12.9%.
Global Restaurant and Comparable Sales Information
Three Months Ended | Year Ended | ||||||||||||||
Dec. 28, |
Dec. 29, |
Dec. 28, |
Dec. 29, |
||||||||||||
Global restaurant sales growth (a) | 6.6 | % | 4.8 | % | 9.8 | % | 6.2 | % | |||||||
Global restaurant sales growth, excluding the | |||||||||||||||
impact of foreign currency (a) | 8.2 | % | 12.9 | % | 10.6 | % | 8.7 | % | |||||||
Comparable sales growth (b) | |||||||||||||||
Domestic company-owned restaurants | 5.9 | % | 11.5 | % | 8.2 | % | 6.6 | % | |||||||
North America franchised restaurants | 3.4 | % | 8.1 | % | 6.2 | % | 3.1 | % | |||||||
System-wide North America restaurants | 4.1 | % | 9.0 | % | 6.7 | % | 4.0 | % | |||||||
System-wide international restaurants | 8.9 | % | 7.0 | % | 7.4 | % | 7.5 | % | |||||||
(a) Includes both company-owned and franchised restaurant sales.
(b) Represents the change in year-over-year sales for the same base of restaurants for the same fiscal periods. Comparable sales results for restaurants operating outside of the United States are reported on a constant dollar basis, which excludes the impact of foreign currency translation.
We believe global restaurant and comparable sales growth information, as defined in the table above, is useful in analyzing our results since our franchisees pay royalties that are based on a percentage of franchise sales. Franchise sales generate commissary revenue in the United States and in certain international markets. Global restaurant and comparable sales growth information is also useful in analyzing industry trends and the strength of our brand. Franchise restaurant sales are not included in company revenues.
Revenue and Operating Highlights
All revenue and operating highlights below are compared to the same period of the prior year, unless otherwise noted.
Revenue Highlights
Consolidated revenues increased $37.6 million, or 9.7%, for the fourth quarter of 2014 and increased $159.1 million, or 11.1% for the full year. The increases in revenues were primarily due to the following:
Operating Highlights
The table below summarizes income before income taxes on a reporting segment basis:
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
Dec. 28, | Dec. 29, | Increase | Dec. 28, | Dec. 29, | Increase | |||||||||||||||||||||||
(In thousands) | 2014 | 2013 | (Decrease) | 2014 | 2013 | (Decrease) | ||||||||||||||||||||||
Domestic company-owned restaurants | $ | 8,900 | $ | 9,924 | $ | (1,024 | ) | $ | 40,969 | $ | 34,590 | $ | 6,379 | |||||||||||||||
Domestic commissaries | 13,143 | 11,526 | 1,617 | 39,317 | 37,804 | 1,513 | ||||||||||||||||||||||
North America franchising | 20,620 | 18,067 | 2,553 | 77,009 | 70,201 | 6,808 | ||||||||||||||||||||||
International | 3,179 | 651 | 2,528 | 7,250 | 2,803 | 4,447 | ||||||||||||||||||||||
All others | 141 | 1,088 | (947 | ) | (9 | ) | 3,490 | (3,499 | ) | |||||||||||||||||||
Unallocated corporate expenses | (14,035 | ) | (12,550 | ) | (1,485 | ) | (49,440 | ) | (41,025 | ) | (8,415 | ) | ||||||||||||||||
Elimination of intersegment losses (profits) | 443 | (765 | ) | 1,208 | (841 | ) | (1,754 | ) | 913 | |||||||||||||||||||
Total income before income taxes (a) | $ | 32,391 |
$ |
27,941 |
$ | 4,450 | $ | 114,255 | $ | 106,109 | $ | 8,146 | ||||||||||||||||
(a) Includes FOCUS system rollout costs of approximately $1.4 million and $3.7 million for the fourth quarter and full year 2014, respectively. See the FOCUS Update section of this press release and the Annual Report on Form 10-K for the full year ended December 28, 2014 for additional information.
Total income before income taxes and other measures excluding FOCUS system rollout costs included within this press release are not measures defined by accounting principles generally accepted in the United States (“GAAP”). These non-GAAP measures should not be construed as substitutes for or better indicators of the company’s performance than the company’s GAAP results. Management believes presenting income before income taxes and other measures excluding the FOCUS system rollout costs is important for purposes of comparison to prior year results and analyzing each segment’s operating results. In addition, management uses these non-GAAP measures to allocate resources and analyze trends and underlying operating performance of the company.
Fourth quarter 2014 income before income taxes increased $4.5 million, or 15.9%. Excluding FOCUS rollout costs of approximately $1.4 million, income before income taxes increased approximately $5.9 million, or 21.1%. Significant results by segment are detailed as follows:
The full year increase in income before income taxes was $8.1 million, or 7.7%. Excluding FOCUS system rollout costs of approximately $3.7 million, income before income taxes increased by approximately $11.9 million, or 11.2%. The increase was primarily due to the same reasons as noted above for the three month period. Additionally, the full year results include the following:
The effective income tax rates were 31.0% and 32.0% for the three months and full year ended December 28, 2014, representing increases of 1.6% and 0.8% for the three-month and full year periods, respectively. Our effective income tax rate may fluctuate from quarter to quarter for various reasons. The higher tax rates for 2014 were primarily due to the prior year including favorable state tax settlements.
The company’s free cash flow, a non-GAAP financial measure, was as follows (in thousands):
Year Ended | ||||||||||
Dec. 28, | Dec. 29, | |||||||||
2014 | 2013 | |||||||||
Net cash provided by operating activities (a) | $ | 122,632 | $ | 101,360 | ||||||
Purchases of property and equipment (b) | (48,655 | ) | (50,750 | ) | ||||||
Free cash flow | $ | 73,977 | $ | 50,610 | ||||||
(a) The increase of approximately $21.3 million was primarily due to higher net income and favorable changes in working capital and other operating activities including higher depreciation and amortization expense.
(b) Purchases of property and equipment were relatively consistent for both periods. The current year period includes FOCUS equipment costs for domestic company-owned restaurants and technology investments, including FOCUS software development costs. The prior year period includes expenditures on equipment for New Jersey commissary dough production, technology investments, including FOCUS software development costs, and China new restaurant builds.
We define free cash flow as net cash provided by operating activities (from the consolidated statements of cash flows) less the amounts spent on the purchase of property and equipment. We view free cash flow as an important measure because it is a factor that management uses in determining the amount of cash available for discretionary investment, dividends or share repurchases. Free cash flow is not a term defined by GAAP and as a result our measure of free cash flow might not be comparable to similarly titled measures used by other companies. Free cash flow should not be construed as a substitute for or a better indicator of the company’s performance than the company’s GAAP measures.
See the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K filed with the Securities and Exchange Commission for additional information concerning our operating results and cash flow for the full year ended December 28, 2014.
FOCUS Update
As previously disclosed, the company is implementing a new, proprietary point-of-sale system (“FOCUS”) in substantially all domestic system-wide restaurants. As of December 28, 2014, we had installed FOCUS in approximately 75% of our domestic restaurants, including all company-owned restaurants and approximately 1,600 franchised restaurants. Substantial completion is expected to occur by the end of the first quarter of 2015.
For the fourth quarter and full year 2014, the impact of implementing FOCUS was a $1.4 million and $3.7 million reduction in income before income taxes versus 2013, or a $0.02 and $0.06 reduction in diluted earnings per share, respectively. For additional information, see the Annual Report on Form 10-K for the full year ended December 28, 2014.
Global Restaurant Unit Data
At December 28, 2014, there were 4,663 Papa John’s restaurants operating in all 50 states and in 36 international countries and territories, as follows:
Domestic |
Franchised |
Total North |
International | System-wide | ||||||||||||
Fourth Quarter |
||||||||||||||||
Beginning - September 28, 2014 | 683 | 2,630 | 3,313 | 1,224 | 4,537 | |||||||||||
Opened | 3 | 46 | 49 | 120 | 169 | |||||||||||
Closed | (1 | ) | (21 | ) | (22 | ) | (21 | ) | (43 | ) | ||||||
Acquired (divested) | 1 | (1 | ) | - | - | - | ||||||||||
Ending - December 28, 2014 | 686 | 2,654 | 3,340 | 1,323 | 4,663 | |||||||||||
Year-to-date |
||||||||||||||||
Beginning - December 29, 2013 | 665 | 2,621 | 3,286 | 1,142 | 4,428 | |||||||||||
Opened | 12 | 132 | 144 | 244 | 388 | |||||||||||
Closed | (4 | ) | (86 | ) | (90 | ) | (63 | ) | (153 | ) | ||||||
Acquired (divested) | 13 | (13 | ) | - | - | - | ||||||||||
Ending - December 28, 2014 | 686 | 2,654 | 3,340 | 1,323 | 4,663 | |||||||||||
Unit growth | 21 | 33 | 54 | 181 | 235 | |||||||||||
% increase | 3.2 | % | 1.3 | % | 1.6 | % | 15.8 | % | 5.3 | % | ||||||
Our development pipeline as of December 28, 2014 included approximately 1,200 restaurants (200 units in North America and 1,000 units internationally), the majority of which are scheduled to open over the next six years.
Share Repurchase Activity
The following table reflects our repurchases for the fourth quarter and full year 2014 and subsequent repurchases through February 17, 2015 (in thousands):
Period | Number of Shares | Cost | |||
Fourth Quarter 2014 | 502 | $ | 23,248 | ||
Full Year 2014 | 2,562 | $ | 117,400 | ||
December 29, 2014 through February 17, 2015 |
224 |
$ |
13,593 |
||
There were 40.8 million and 41.7 million diluted weighted average shares outstanding for the fourth quarter and full year, respectively, representing decreases of 5.8% and 5.7%, respectively, over the prior year comparable periods. Diluted earnings per share increased $0.03 and $0.10, respectively, for the fourth quarter and full year due to the reduction in shares outstanding, primarily resulting from the share repurchase program. Approximately 39.9 million actual shares of the company’s common stock were outstanding as of December 28, 2014.
2015 Key Operating Assumptions and Earnings Guidance
Earnings per Share (EPS) – The company projects 2015 EPS to increase to a range of $1.98 to $2.06, or increase 13% to 18% over 2014 EPS of $1.75.
Comparable Restaurant Sales – North America system-wide comparable sales are expected to increase 2% to 4% in 2015. International comparable sales are expected to increase 5% to 7%, on a constant dollar basis, in 2015.
Worldwide Net Unit Growth – Worldwide net unit growth in 2015 is expected to range between 220 and 250 units, with approximately 75% of the net unit growth in International markets.
Revenues – Total consolidated revenues are expected to increase 3% to 5% in 2015.
Income Before Income Taxes Margin – Consolidated income before income taxes margin in 2015 is expected to increase 30 to 50 basis points over 2014 levels. The biggest drivers of increased margins are projected improvements in International profitability resulting from added scale in franchised markets, and in company-owned restaurants in North America due to reduced commodity costs. In North America, we are assuming full-year block cheese prices in the mid-to-high $1.60’s per pound.
Income Tax Rate – The income tax rate in 2015 is expected to range from 31.5% to 33.0%.
Share Repurchases and Debt – The company expects to repurchase shares of its outstanding stock in a range of $80-$120 million. Debt is expected to range between 1.5x and 1.8x 2015 earnings before interest, taxes, depreciation and amortization (“EBITDA”).
Capital Expenditures – Capital expenditures for 2015 are expected to approximate $40 to $45 million, consisting of company-owned unit development in the U.S. and Beijing, China, technology-related projects, and routine capital replacement.
Conference Call
A conference call is scheduled for February 25, 2015 at 10:00 a.m. Eastern Time to review our fourth quarter and full year 2014 earnings results and 2015 guidance. The call can be accessed from the company’s web page at www.papajohns.com in a listen-only mode, or dial 877-312-8816 (U.S. and Canada) or 253-237-1189 (international). The conference call will be available for replay, including by downloadable podcast, from the company’s web site at www.papajohns.com. The Conference ID is 17450283.
Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We intend to use our investor relations website as a means of disclosing information about our business, our financial condition and results of operations and other matters and for complying with our disclosure obligations under Regulation FD. The information we post on our investor relations website, including information contained in investor presentations, may be deemed material. Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings and public conference calls and webcasts. We encourage investors and others to sign up for email alerts at our investor relations page under “Shareholder Tools” at the bottom right side of the page. These email alerts are intended to help investors and others to monitor our investor relations website by notifying them when new information is posted on the site.
Annual Meeting Date Scheduled
The 2015 Annual Meeting of Stockholders will be held on Wednesday, April 29, 2015, at 11:00 am local time at the company’s corporate offices located at 2002 Papa John’s Boulevard, Louisville, Kentucky.
Forward-Looking Statements
Certain matters discussed in this press release and other company communications constitute forward-looking statements within the meaning of the federal securities laws. Generally, the use of words such as “expect,” “estimate,” “believe,” “anticipate,” “will,” “forecast,” “plan,” “project,” or similar words identify forward-looking statements that we intend to be included within the safe harbor protections provided by the federal securities laws. Such forward-looking statements may relate to projections or guidance concerning business performance, revenue, earnings, contingent liabilities, resolution of litigation, commodity costs, profit margins, unit growth, capital expenditures, and other financial and operational measures. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements. The risks, uncertainties and assumptions that are involved in our forward-looking statements include, but are not limited to:
These and other risk factors are discussed in detail in “Part I. Item 1A. – Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2014. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise, except as required by law.
For more information about the company, please visit www.papajohns.com.
Papa John's International, Inc. and Subsidiaries | |||||||||||||||||
Condensed Consolidated Statements of Income | |||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||
Dec. 28, |
Dec. 29, |
Dec. 28, |
Dec. 29, |
||||||||||||||
(In thousands, except per share amounts) | (Unaudited) | (Unaudited) | |||||||||||||||
Revenues: | |||||||||||||||||
North America: | |||||||||||||||||
Domestic company-owned restaurant sales | $ | 184,585 | $ | 169,604 | $ | 701,854 | $ | 635,317 | |||||||||
Franchise royalties | 23,715 | 21,310 | 89,443 | 81,692 | |||||||||||||
Franchise and development fees | 233 | 153 | 726 | 1,181 | |||||||||||||
Domestic commissary sales | 165,640 | 156,929 | 629,492 | 578,870 | |||||||||||||
Other sales | 24,475 | 14,705 | 74,179 | 53,322 | |||||||||||||
International: | |||||||||||||||||
Royalties and franchise and development fees | 6,961 | 6,067 | 25,730 | 21,979 | |||||||||||||
Restaurant and commissary sales | 19,900 | 19,122 | 76,725 | 66,661 | |||||||||||||
Total revenues | 425,509 | 387,890 | 1,598,149 | 1,439,022 | |||||||||||||
Costs and expenses: | |||||||||||||||||
Domestic company-owned restaurant expenses: | |||||||||||||||||
Cost of sales | 46,087 | 43,106 | 175,733 | 156,237 | |||||||||||||
Salaries and benefits | 49,011 | 46,290 | 188,234 | 173,316 | |||||||||||||
Advertising and related costs | 16,484 | 15,278 | 63,463 | 59,172 | |||||||||||||
Occupancy costs and other restaurant operating expenses | 39,677 | 33,356 | 144,628 | 128,826 | |||||||||||||
Total domestic company-owned restaurant expenses | 151,259 | 138,030 | 572,058 | 517,551 | |||||||||||||
Domestic commissary expenses: | |||||||||||||||||
Cost of sales | 128,638 | 122,164 | 492,940 | 448,693 | |||||||||||||
Salaries and benefits and other commissary operating expenses | 23,819 | 21,468 | 91,981 | 85,649 | |||||||||||||
Total domestic commissary expenses | 152,457 | 143,632 | 584,921 | 534,342 | |||||||||||||
Other operating expenses | 23,622 | 12,917 | 71,068 | 48,011 | |||||||||||||
International restaurant and commissary expenses | 16,352 | 16,601 | 63,718 | 56,609 | |||||||||||||
General and administrative expenses | 36,367 | 36,164 | 140,566 | 134,228 | |||||||||||||
Other general expenses | 1,583 | 2,631 | 8,223 | 6,673 | |||||||||||||
Depreciation and amortization | 10,426 | 9,433 | 39,965 | 35,105 | |||||||||||||
Total costs and expenses | 392,066 | 359,408 | 1,480,519 | 1,332,519 | |||||||||||||
Operating income | 33,443 | 28,482 | 117,630 | 106,503 | |||||||||||||
Net interest expense | (1,052 | ) | (541 | ) | (3,375 | ) | (394 | ) | |||||||||
Income before income taxes | 32,391 | 27,941 | 114,255 | 106,109 | |||||||||||||
Income tax expense | 10,036 | 8,204 | 36,558 | 33,130 | |||||||||||||
Net income before attribution to noncontrolling interests | 22,355 | 19,737 | 77,697 | 72,979 | |||||||||||||
Income attributable to noncontrolling interests | (1,174 | ) | (932 | ) | (4,382 | ) | (3,442 | ) | |||||||||
Net income attributable to the company | $ | 21,181 | $ | 18,805 | $ | 73,315 | $ | 69,537 | |||||||||
Calculation of income for earnings per share: | |||||||||||||||||
Net income attributable to the company | $ | 21,181 | $ | 18,805 | $ | 73,315 | $ | 69,537 | |||||||||
Increase in noncontrolling interest redemption value | 37 | (510 | ) | (44 | ) | (510 | ) | ||||||||||
Net income attributable to participating securities | (107 | ) | (530 | ) | (402 | ) | (530 | ) | |||||||||
Net income attributable to common shareholders | $ | 21,111 | $ | 17,765 | $ | 72,869 | $ | 68,497 | |||||||||
Basic earnings per common share | $ | 0.53 | $ | 0.42 | $ | 1.78 | $ | 1.58 | |||||||||
Diluted earnings per common share | $ | 0.52 | $ | 0.41 | $ | 1.75 | $ | 1.55 | |||||||||
Basic weighted average common shares outstanding | 40,097 | 42,417 | 40,960 | 43,387 | |||||||||||||
Diluted weighted average common shares outstanding | 40,789 | 43,301 | 41,718 | 44,243 | |||||||||||||
Dividends declared per common share | $ | 0.14 | $ | 0.125 | $ | 0.53 | $ | 0.25 | |||||||||
Papa John's International, Inc. and Subsidiaries | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
Year Ended | ||||||||
(In thousands) | Dec. 28, 2014 | Dec. 29, 2013 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 20,122 | $ | 13,670 | ||||
Accounts receivable, net | 56,047 | 53,203 | ||||||
Notes receivable, net | 6,106 | 3,566 | ||||||
Income taxes receivable | 9,527 | - | ||||||
Inventories | 27,394 | 23,035 | ||||||
Deferred income taxes | 8,248 | 8,004 | ||||||
Prepaid expenses and other current assets | 28,564 | 23,562 | ||||||
Total current assets | 156,008 | 125,040 | ||||||
Property and equipment, net | 219,457 | 212,097 | ||||||
Notes receivable, less current portion, net | 12,801 | 13,239 | ||||||
Goodwill | 82,007 | 79,391 | ||||||
Deferred income taxes | 3,914 | - | ||||||
Other assets | 38,616 | 34,524 | ||||||
Total assets | $ | 512,803 | $ | 464,291 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 38,832 | $ | 35,653 | ||||
Income and other taxes payable | 9,637 | 4,401 | ||||||
Accrued expenses and other current liabilities | 58,293 | 57,807 | ||||||
Total current liabilities | 106,762 | 97,861 | ||||||
Deferred revenue | 4,257 | 5,827 | ||||||
Long-term debt | 230,451 | 157,900 | ||||||
Deferred income taxes | 22,188 | 14,660 | ||||||
Other long-term liabilities | 41,875 | 42,835 | ||||||
Total liabilities | 405,533 | 319,083 | ||||||
Redeemable noncontrolling interests | 8,555 | 7,024 | ||||||
Total stockholders' equity | 98,715 | 138,184 | ||||||
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ | 512,803 | $ | 464,291 | ||||
Note: The Condensed Consolidated Balance Sheets have been derived from the audited consolidated financial statements, but do not include all information and footnotes required by accounting principles generally accepted in the United States for a complete set of financial statements. |
Papa John's International, Inc. and Subsidiaries | |||||||||||
Consolidated Statements of Cash Flows | |||||||||||
Year Ended | |||||||||||
(In thousands) | Dec. 28, 2014 | Dec. 29, 2013 | |||||||||
Operating activities | |||||||||||
Net income before attribution to noncontrolling interests | $ | 77,697 | $ | 72,979 | |||||||
Adjustments to reconcile net income to net cash provided by | |||||||||||
operating activities: | |||||||||||
Provision for uncollectible accounts and notes receivable | 1,795 | 1,921 | |||||||||
Depreciation and amortization | 39,965 | 35,105 | |||||||||
Deferred income taxes | 14,704 | 10,603 | |||||||||
Stock-based compensation expense | 8,712 | 7,409 | |||||||||
Excess tax benefit on equity awards | (10,282 | ) | (4,755 | ) | |||||||
Other | 4,738 | 2,767 | |||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | (5,741 | ) | (11,058 | ) | |||||||
Income taxes receivable | (9,527 | ) | - | ||||||||
Inventories | (2,838 | ) | (857 | ) | |||||||
Prepaid expenses and other current assets | (4,781 | ) | (3,011 | ) | |||||||
Other assets and liabilities | 915 | (3,728 | ) | ||||||||
Accounts payable | 3,171 | 3,029 | |||||||||
Income and other taxes payable | 5,233 | (6,027 | ) | ||||||||
Accrued expenses and other current liabilities | (665 | ) | (2,536 | ) | |||||||
Deferred revenue | (464 | ) | (481 | ) | |||||||
Net cash provided by operating activities | 122,632 | 101,360 | |||||||||
Investing activities | |||||||||||
Purchases of property and equipment | (48,655 | ) | (50,750 | ) | |||||||
Loans issued | (6,816 | ) | (6,095 | ) | |||||||
Repayments of loans issued | 4,254 | 7,068 | |||||||||
Acquisitions, net of cash acquired | (4,773 | ) | - | ||||||||
Proceeds from divestitures of restaurants | 400 | - | |||||||||
Other | 556 | 339 | |||||||||
Net cash used in investing activities | (55,034 | ) | (49,438 | ) | |||||||
Financing activities | |||||||||||
Net proceeds on line of credit facility | 72,551 | 69,642 | |||||||||
Cash dividends paid | (21,735 | ) | (10,797 | ) | |||||||
Excess tax benefit on equity awards | 10,282 | 4,755 | |||||||||
Tax payments for equity award issuances | (9,235 | ) | (3,584 | ) | |||||||
Proceeds from exercise of stock options | 5,837 | 6,865 | |||||||||
Acquisition of Company common stock | (117,400 | ) | (118,569 | ) | |||||||
Contributions from noncontrolling interest holders | 1,086 | 950 | |||||||||
Distributions to noncontrolling interest holders | (2,800 | ) | (3,650 | ) | |||||||
Other | 491 | (327 | ) | ||||||||
Net cash used in financing activities | (60,923 | ) | (54,715 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | (223 | ) | 67 | ||||||||
Change in cash and cash equivalents | 6,452 | (2,726 | ) | ||||||||
Cash and cash equivalents at beginning of year | 13,670 | 16,396 | |||||||||
Cash and cash equivalents at end of year | $ | 20,122 | $ | 13,670 |
CONTACT:
Papa John’s International, Inc.
Lance Tucker,
502-261-4218
Chief Financial Officer