Papa John's Announces First Quarter 2018 Results And Reaffirms 2018 Outlook
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Papa John's Announces First Quarter 2018 Results And Reaffirms 2018 Outlook

LOUISVILLE, Ky. - (BUSINESS WIRE) - May 8, 2018 - Papa John's International, Inc. (NASDAQ: PZZA) today announced financial results for the first quarter ended April 1, 2018.

Highlights

  • First quarter earnings per diluted share of $0.50 in 2018 compared to $0.77 in the first quarter of 2017
  • North America comparable sales decrease of 5.3%
  • International comparable sales increases of 0.3%; international franchise sales increase of 21.1%, excluding the impact of foreign currency
  • 13 net unit openings in first quarter of 2018 driven by International operations
  • Free cash flow of $31.7 million in the first quarter as compared to $32.3 million in the first quarter of 2017
  • 2018 outlook reaffirmed

"Although first quarter results were lower than the prior year, they were consistent with our expectations. We remain focused on enhancing our value perception and driving our strategic initiatives," said Steve Ritchie, President and CEO of Papa John's.

             

Operating Highlights (dollars in 000's, except per share amounts):

             
   

Apr. 1, 
2018

 

Mar. 26,
2017

 

Decrease
%

             
Total revenue   $ 427,369   $ 449,266   -4.9 %
Operating income     27,317     43,681   -37.5 %
Net income     16,737     28,428   -41.1 %
Diluted earnings per share   $ 0.50   $ 0.77   -35.1 %
             

All operating highlights are compared to the same period of the prior year, unless otherwise noted.

Consolidated revenues decreased $21.9 million, or 4.9%, for the first quarter of 2018 primarily due to lower comparable sales for North America restaurants and lower North America commissary sales due to lower volumes. These decreases were partially offset by higher International revenues due to an increase in equivalent units and the favorable impact of foreign exchange rates of approximately $2.8 million. Additionally, the first quarter of 2018 included an increase in Other revenues of approximately $2.7 million primarily due to the required reporting of franchise marketing fund contributions as revenues (previously netted with expenses) under the newly adopted revenue recognition standard, Revenue from Contracts with Customers ("Topic 606"); see the "Revenue Recognition and Income Statement Presentation" section below for more details.

Consolidated income before income taxes of $22.4 million for the first quarter of 2018 decreased $19.5 million, or 46.6%, compared to the first quarter of 2017. Income before income taxes, as a percentage of consolidated revenues, was 5.2% for the first quarter of 2018, as compared to 9.3% for the first quarter of 2017. Significant changes in the components of income before income taxes are as follows:

  • Domestic Company-owned restaurants operating margin decreased $8.6 million, or 2.7% as a percentage of related revenues, primarily due to lower comparable sales, increased labor costs including higher minimum wages and increased non-owned automobile costs.
  • North America franchise royalties and fees decreased $2.8 million, or 10% as compared to the first quarter of 2017, primarily due to lower comparable sales, and an increase in royalty waivers to franchisees.
  • North America commissary operating margin decreased $1.4 million, or 0.4% as a percentage of related revenues, primarily due to lower sales volumes.
  • International operating margin increased $1.3 million primarily due to higher royalties from increased equivalent units and the favorable impact of foreign exchange rates.
  • Other operating margin decreased $718,000, or 3.7%, primarily due to higher advertising spend in the United Kingdom. The "Revenue Recognition and Income Statement Presentation" section below provides more information on our newly reported "Other revenues" and "Other expenses" income statement line items.
  • General and administrative ("G&A") costs increased $3.3 million, or 9.1%, primarily due to an increase in bad debt expense, higher legal fees and an increase in various technology initiative costs.
  • Net interest expense increased $3.1 million for the first quarter due to an increase in average outstanding debt, which is primarily due to share repurchases, as well as higher interest rates.

The first quarter 2018 effective income tax rate was 22.3%, representing a decrease of 6.3% from the prior year comparable period rate of 28.6%. This decrease was primarily due to the reduction of the U.S. corporate tax rate effective January 1, 2018 as part of the Tax Cuts and Jobs Act. This decrease was offset by an approximate 3.8% increase in the income tax rate for share based compensation tax deductions, which were unfavorable in 2018 due to the lower stock price of the company as restrictions lapsed on equity awards.

Diluted earnings per share decreased 35.1% to $0.50 for the first quarter of 2018. This decrease was primarily due to a decrease in net income as previously discussed.

           
 

Global Restaurant and Comparable Sales Information

           
     

Apr. 1,
2018

 

Mar. 26,
2017

           
  Global restaurant sales (decline) / growth (a)   (1.3 %)   4.9 %
           
 

Global restaurant sales growth, excluding the impact of foreign currency (a)

  (1.0 %)   5.5 %
           
  Comparable sales (decline) / growth (b)        
  Domestic company-owned restaurants   (6.1 %)   3.0 %
  North America franchised restaurants   (5.0 %)   1.7 %
  System-wide North America restaurants   (5.3 %)   2.0 %
           
  System-wide international restaurants   0.3 %   6.0 %
           

(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 North America, international and 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 also generate commissary revenue in the United States and in certain international markets. Franchise restaurant and comparable sales growth information is also useful for comparison to industry trends and evaluating the strength of our brand. Management believes the presentation of franchise restaurant sales growth, excluding the impact of foreign currency, provides investors with useful information regarding underlying sales trends and the impact of new unit growth without being impacted by swings in the external factor of foreign currency. Franchise restaurant sales are not included in company revenues.

Free Cash Flow

The company's free cash flow, a non-GAAP financial measure, for the first quarter of 2018 and 2017 was as follows (in thousands):

       
      First Quarter
      Apr. 1,   Mar. 26,
      2018   2017
           
  Net cash provided by operating activities (a)   $ 41,036     $ 47,329  
  Purchases of property and equipment (b)     (9,320 )     (15,064 )
  Free cash flow   $ 31,716     $ 32,265  
           

(a)

The decrease of $6.3 million was primarily due to lower net income.

 

         

(b)

The decrease of $5.7 million was primarily due to higher capital expenditures in 2017 related to the construction of the company's new domestic commissary in Georgia, which opened in the third quarter of 2017.

           

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. 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 liquidity or performance than the company's GAAP measures.

See the Management's Discussion and Analysis of Financial Condition and Results of Operations section of our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission(SEC) for additional information concerning our operating results and cash flow for the three months ended April 1, 2018.

Global Restaurant Unit Data

At April 1, 2018, there were 5,212 Papa John's restaurants operating in all 50 states and in 45 international countries and territories, as follows:

                     
   

Domestic
Company-
owned

 

Franchised
North
America

 

Total North
America

  International   System-wide

First Quarter

                   
Beginning - December 31, 2017   708     2,733     3,441     1,758     5,199  
Opened   4     18     22     53     75  
Closed   (2 )   (37 )   (39 )   (23 )   (62 )
Acquired   -     31     31     -     31  
Sold   (31 )   -     (31 )   -     (31 )
Ending - April 1, 2018   679     2,745     3,424     1,788     5,212  
                     
Unit growth (decline)   (29 )   12     (17 )   30     13  
                     
% increase (decrease)   (4.1 %)   0.4 %   (0.5 %)   1.7 %   0.3 %
                     

The company has added 130 net worldwide units over the trailing four quarters ended April 1, 2018. Our development pipeline as of April 1, 2018 included approximately 1,110 restaurants (160 units in North America and 950 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 first quarter of 2018 and subsequent repurchases through May 1, 2018 (in thousands):

               
Period    

Number of
Shares

      Cost
               
First Quarter 2018     2,001       $ 119,736
               
April 2, 2018 through May 1, 2018     29       $ 1,710
     

There were 33.6 million diluted weighted average shares outstanding for the first quarter of 2018, representing a decrease of 10.2% over the prior year comparable period. Approximately 32.0 million actual shares of the company's common stock were outstanding as of April 1, 2018.

As previously disclosed, on March 1, 2018 we announced a $100 million accelerated share repurchase agreement ("ASR Agreement") with Bank of America, N.A. ("BofAML"). Pursuant to the terms of the ASR Agreement, we paid BofAML $100 million in cash. Then on March 6, 2018, we received an initial delivery of approximately 1.3 million shares of common stock for $78.0 million or 78% of the total ASR agreement. Additional shares may be received prior to and/or at final settlement for the remaining $22.0 million, based generally on the average of the daily volume-weighted average prices of the company's common stock during the term of the ASR Agreement, less a discount. Subsequent to the end of the quarter through May 1, 2018, the Company acquired an additional 28,739 shares at an aggregate cost of $1.7 million through the ASR Agreement.

Cash Dividend

We paid a cash dividend of approximately $7.6 million ($0.225 per common share) during the first quarter of 2018. Subsequent to the first quarter, on May 2, 2018, our Board of Directors declared a second quarter dividend of $0.225 per common share (approximately $7.3 million based on the number of shares outstanding as of May 1, 2018). The dividend will be paid on May 25, 2018 to shareholders of record as of the close of business on May 14, 2018. The declaration and payment of any future dividends will be at the discretion of our Board of Directors, subject to the company's financial results, cash requirements, and other factors deemed relevant by our Board of Directors.

Revenue Recognition and Income Statement Presentation

On January 1, 2018, we adopted the new revenue recognition standard using the modified retrospective method. Under the modified retrospective method, prior period results were not restated to reflect the impact of Topic 606, resulting in reduced comparability between 2018 and 2017 operating results. The impact of adoption includes the following:

  • $21.5 million reduction in retained earnings for the opening balance sheet cumulative adjustment.
  • $2.4 million increase in total revenues primarily due to the requirement to present revenues and expenses related to marketing funds we control on a "gross" basis. This gross up is reported in the new financial statement line items, Other revenues and Other expenses, as discussed further below; this change in reporting had no significant impact on consolidated pre-tax income results.
  • $485,000 decrease in pre-tax income for the first quarter primarily due to the revised method of accounting for franchise fees.
  • EPS decrease of approximately $0.01 in the first quarter.

Additional detail on the adoption and 2018 impact of the new revenue recognition standard can be found in our Form 10-Q for the three months ended April 1, 2018 filed with the SEC.

While not required as part of the adoption of Topic 606, our income statement includes newly created Other revenues and Other expenses line items. Other revenues and Other expenses include the Topic 606 "gross up" of revenues and expenses derived from certain domestic and international marketing fund co-ops we control, as previously discussed. Additionally, Other revenues and Other expenses include various reclassifications from North America commissary and other, International expenses and General and administrative expenses to better reflect and aggregate various domestic and international services provided by the company for the benefit of franchisees. Related Quarter 1 of 2017 amounts have also been reclassified to conform to the new 2018 presentation, as detailed in the "Summary of Income Statement Presentation Reclassifications" included with this press release. These reclassifications had no impact on reported total revenues or total costs and expenses. Refer to the ‘Investor Relations' section on our company website for details of income statement presentation reclassifications for each quarter of 2017.

2018 Outlook

The company is reaffirming its previously issued 2018 outlook, as we expect our initiatives will result in improved sales and operating results in the last half of the year.

Conference Call and Website Information

A conference call is scheduled for May 8, 2018 at 5:00 p.m. Eastern Time to review the company's first quarter 2018 earnings results. 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 3037279.

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.

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," "intend," "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, cash flow, contingent liabilities, resolution of litigation, commodity costs, profit margins, unit growth, unit level performance, capital expenditures, share repurchases, dividends, effective tax rates, the impact of the Tax Cuts and Job Act and the adoption of new accounting standards, 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:

  • aggressive changes in pricing or other marketing or promotional strategies by competitors, which may adversely affect sales and profitability; and new product and concept developments by food industry competitors;
  • changes in consumer preferences or consumer buying habits, including the growing popularity of delivery aggregators, as well as changes in general economic conditions or other factors that may affect consumer confidence and discretionary spending;
  • the adverse impact on the company or our results caused by product recalls, food quality or safety issues, incidences of foodborne illness, food contamination and other general public health concerns about our company-owned or franchised restaurants or others in the restaurant industry;
  • the effectiveness of our initiatives to improve our brand proposition and operating results, including marketing, advertising and public relations initiatives, technology investments and changes in unit-level operations;
  • the ability of the company and its franchisees to meet planned growth targets and operate new and existing restaurants profitably, including difficulties finding qualified franchisees, store level employees or suitable sites;
  • increases in food costs or sustained higher other operating costs. This could include increased employee compensation, benefits, insurance, tax rates, new regulatory requirements or increasing compliance costs;
  • increases in insurance claims and related costs for programs funded by the company up to certain retention limits, including medical, owned and non-owned vehicles, workers' compensation, general liability and property;
  • disruption of our supply chain or commissary operations which could be caused by our sole source of supply of cheese or limited source of suppliers for other key ingredients or more generally due to weather, natural disasters including drought, disease, or geopolitical or other disruptions beyond our control;
  • increased risks associated with our international operations, including economic and political conditions, instability or uncertainty in our international markets, especially emerging markets, fluctuations in currency exchange rates, difficulty in meeting planned sales targets and new store growth;
  • the impact of current or future claims and litigation and our ability to comply with current, proposed or future legislation that could impact our business including compliance with the European Union General Data Protection Regulation;
  • failure to effectively execute succession planning;
  • disruption of critical business or information technology systems, or those of our suppliers, and risks associated with systems failures and data privacy and security breaches, including theft of confidential company, employee and customer information, including payment cards;
  • changes in Federal or state income, general and other tax laws, rules and regulations, including changes from the Tax Cuts and Jobs Act and any related Treasury regulations, rules or interpretations if and when issued;
  • changes in generally accepted accounting principles including new standards for revenue recognition and leasing; and

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 31, 2017. 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
        April 1, 2018   March 26, 2017
(In thousands, except per share amounts)   (Unaudited)   (Unaudited)
Revenues:        
  Domestic Company-owned restaurant sales   $ 190,242     $ 206,896  
  North America franchise royalties and fees     24,806       27,607  
  North America commissary sales     161,713       171,340  
  International     30,114       25,622  
  Other revenues     20,494       17,801  
Total revenues     427,369       449,266  
             
Costs and expenses:        
 

Operating costs (excluding depreciation and amortization shown separately below):

       
    Domestic company-owned restaurant expenses     157,319       165,419  
    North America commissary     151,681       159,957  
    International expenses     19,030       15,791  
    Other expenses     20,958       17,547  
  General and administrative expenses     39,729       36,414  
  Depreciation and amortization     11,539       10,457  
Total costs and expenses     400,256       405,585  
  Refranchising gain, net     204       -  
Operating income     27,317       43,681  
  Net interest expense     (4,955 )     (1,810 )
Income before income taxes     22,362       41,871  
  Income tax expense     4,982       11,972  
Net income before attribution to noncontrolling interests     17,380       29,899  
  Income attributable to noncontrolling interests     (643 )     (1,471 )
Net income attributable to the company   $ 16,737     $ 28,428  
             
Calculation of income for earnings per share:        
Net income attributable to the Company   $ 16,737     $ 28,428  
Change in noncontrolling interest redemption value     -       520  
Net income attributable to participating securities     (75 )     (117 )
Net income attributable to common shareholders   $ 16,662     $ 28,831  
             
Basic earnings per common share   $ 0.50     $ 0.78  
Diluted earnings per common share   $ 0.50     $ 0.77  
             
Basic weighted average common shares outstanding     33,279       36,810  
Diluted weighted average common shares outstanding     33,552       37,350  
             
Dividends declared per common share   $ 0.225     $ 0.20  
         

 

 
Papa John's International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
         
    April 1,   December 31,
    2018   2017
(In thousands)   (Unaudited)   (Note)
         
Assets        
Current assets:        
Cash and cash equivalents   $ 31,935     $ 22,345  
Accounts receivable, net     62,949       64,644  
Notes receivable, net     4,662       4,333  
Income tax receivable     -       3,903  
Inventories     28,285       30,620  
Prepaid expenses and other current assets     45,519       38,016  
Assets held for sale     5,900       6,133  
Total current assets     179,250       169,994  
         
Property and equipment, net     229,576       234,331  
Notes receivable, less current portion, net     16,084       15,568  
Goodwill     86,746       86,892  
Deferred income taxes, net     614       585  
Other assets     67,547       48,183  
Total assets   $ 579,817     $ 555,553  
         
         
Liabilities and stockholders' equity (deficit)        
Current liabilities:        
Accounts payable   $ 31,072     $ 32,006  
Income and other taxes payable     10,094       10,561  
Accrued expenses and other current liabilities     92,890       70,293  
Deferred revenue current     2,400       -  
Current portion of long-term debt     20,000       20,000  
Total current liabilities     156,456       132,860  
         
Deferred revenue     13,671       2,652  
Long-term debt, less current portion, net     568,770       446,565  
Deferred income taxes, net     6,125       12,546  
Other long-term liabilities     76,993       60,146  
Total liabilities     822,015       654,769  
         
Redeemable noncontrolling interests     7,037       6,738  
         
Total stockholders' equity (deficit)     (249,235 )     (105,954 )
Total liabilities, redeemable noncontrolling interests and stockholders' equity (deficit)   $ 579,817     $ 555,553  
         

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
Condensed Consolidated Statements of Cash Flows
         
    Year Ended
(In thousands)   April 1, 2018   March 26, 2017
    (Unaudited)   (Unaudited)
Operating activities        
Net income before attribution to noncontrolling interests   $ 17,380     $ 29,899  

Adjustments to reconcile net income to net cash provided by operating activities:

       
Provision for uncollectible accounts and notes receivable     1,539       (417 )
Depreciation and amortization     11,539       10,457  
Deferred income taxes     (2,004 )     1,015  
Stock-based compensation expense     2,475       2,736  
Gain on refranchising     (204 )     -  
Other     1,903       769  
Changes in operating assets and liabilities, net of acquisitions:        
Accounts receivable     86       (1,048 )
Income tax receivable     3,903       2,372  
Inventories     2,193       2,425  
Prepaid expenses and other current assets     4,880       3,440  
Other assets and liabilities     (514 )     (1,577 )
Accounts payable     1,209       (5,239 )
Income and other taxes payable     (466 )     7,817  
Accrued expenses and other current liabilities     (3,103 )     (5,164 )
Deferred revenue     220       (156 )
Net cash provided by operating activities     41,036       47,329  
         
Investing activities        
Purchases of property and equipment     (9,320 )     (15,064 )
Loans issued     (563 )     (715 )
Repayments of loans issued     1,636       863  
Acquisitions, net of cash acquired     -       (21 )
Proceeds from divestitures of restaurants     3,690       -  
Other     114       7  
Net cash used in investing activities     (4,443 )     (14,930 )
         
Financing activities        
Repayments of term loan     (5,000 )     -  
Net (repayments) proceeds of revolving credit facility     127,000       (5,575 )
Cash dividends paid     (7,565 )     (7,354 )
Tax payments for equity award issuances     (1,342 )     (2,259 )
Proceeds from exercise of stock options     1,770       3,248  
Acquisition of Company common stock     (141,736 )     (13,075 )
Distributions to noncontrolling interest holders     (432 )     (702 )
Other     183       396  
Net cash used in financing activities     (27,122 )     (25,321 )
         
Effect of exchange rate changes on cash and cash equivalents     119       74  
Change in cash and cash equivalents     9,590       7,152  
Cash and cash equivalents at beginning of period     22,345       15,563  
         
Cash and cash equivalents at end of period   $ 31,935     $ 22,715  
         

 

 
Papa John's International, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Summary of Income Statement Presentation Reclassifications
                 
        Three Months Ended March 26, 2017
        As reported   Reclassifications   Adjusted
(In thousands, except per share amounts)            
Revenues:            
  Domestic company-owned restaurant sales   $ 206,896     $ -     $ 206,896  
  North America franchise royalties and fees     27,607       -       27,607  
  North America commissary and other sales (1)     186,245       (14,905 )     171,340  
  International (2)     28,518       (2,896 )     25,622  
  Other revenues (1) (2)     -       17,801       17,801  
Total revenues     449,266       -       449,266  
                 
Costs and expenses:            
 

Operating costs (excluding depreciation and amortization shown separately below):

           
    Domestic company-owned restaurant expenses     165,419       -       165,419  
    North America commissary and other expenses (1)     173,712       (13,755 )     159,957  
    International expenses (2)     17,990       (2,199 )     15,791  
    Other expenses (1) (2) (3)     -       17,547       17,547  
  General and administrative expenses (3)     38,007       (1,593 )     36,414  
  Depreciation and amortization     10,457       -       10,457  
Total costs and expenses     405,585       -       405,585  
                 
Operating income     43,681       -       43,681  
  Net interest expense     (1,810 )     -       (1,810 )
Income before income taxes     41,871       -       41,871  
  Income tax expense     11,972       -       11,972  
Net income before attribution to noncontrolling interests     29,899       -       29,899  
  Income attributable to noncontrolling interests     (1,471 )     -       (1,471 )
Net income attributable to the company   $ 28,428     $ -     $ 28,428  
                 
Calculation of income for earnings per share:            
Net income attributable to the company   $ 28,428     $ -     $ 28,428  
Change in noncontrolling interest redemption value     520       -       520  
Net income attributable to participating securities     (117 )     -       (117 )
Net income attributable to common shareholders   $ 28,831     $ -     $ 28,831  
                 
Basic earnings per common share   $ 0.78     $ -     $ 0.78  
Diluted earnings per common share   $ 0.77     $ -     $ 0.77  
                 
Basic weighted average common shares outstanding     36,810       -       36,810  
Diluted weighted average common shares outstanding     37,350       -       37,350  
                 
Dividends declared per common share   $ 0.20     $ -     $ 0.20  
                 
                 
(1) Includes reclassification of previous amounts reported in North America commissary and other sales and expenses including print and promotional items, information systems and related services used in restaurant operations, including our point of sale system, online and other technology-based ordering platforms.
                 
(2) Includes reclassification of previous amounts reported in International related to advertising expenses and rental income and expenses for United Kingdom head leases which are subleased to United Kingdom franchisees.
                 
(3) Includes reclassification of various technology related expenditures for fee-based services discussed in (1) above and advertising expenses to be consistent with 2018 presentation.

Contact:

Joe Smith
Papa John's International, Inc.
502-261-7272
Senior Vice President, Chief Financial Officer

View source version on businesswire.com: https://www.businesswire.com/news/home/20180508006424/en/

SOURCE Papa John's International, Inc.

News Provided by Acquire Media

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