Papa John’s Announces Fourth Quarter and Full Year 2012 Results

  Papa John’s Announces Fourth Quarter and Full Year 2012 Results

          2013 Operating Assumptions and Earnings Guidance Announced

Business Wire

LOUISVILLE, Ky. -- February 26, 2013

Papa John’s International, Inc. (NASDAQ: PZZA)  today announced financial
results for the fourth quarter and fiscal year ended December 30, 2012.

Highlights

  *System-wide comparable sales increased 5.2% for North America and 7.0% for
    International for the fourth quarter; System-wide comparable sales
    increased 3.6% for North America and 7.1% for International for the full
    year
  *Earnings per diluted share of $0.74 for the fourth quarter, an increase of
    13.8% over restated earnings per diluted share of $0.65 for 2011; Earnings
    per diluted share of $2.58 for the full year, an increase of 19.4% over
    restated earnings per diluted share of $2.16 for 2011
  *Earnings per diluted share includes an $0.11 benefit from a 53^rd week of
    operations for both the fourth quarter and the full year
  *Global net restaurant openings included 134 restaurants for the fourth
    quarter and 280 restaurants for the full year
  *Share repurchase authorization increased by $50 million in December 2012
    and an additional $50 million in February 2013

“We are very pleased with our 2012 results, highlighted by our ninth
consecutive year of even or positive comparable sales growth,” said Papa
John's founder, chairman and chief executive officer, John Schnatter. “Growing
EPS by almost 20% and expanding our global footprint in a very competitive
environment is not only a testament to the strength of our system but to the
power of our brand.”

Fourth quarter 2012 revenues were $367.3 million, a 19.9% increase from fourth
quarter 2011 revenues of $306.2 million. Fourth quarter 2012 net income was
$17.4 million compared to restated fourth quarter 2011 net income of $15.9
million. Fourth quarter 2012 diluted earnings per share were $.74, compared to
restated fourth quarter 2011 diluted earnings per share of $.65.

Full year fiscal 2012 revenues were $1.3 billion, a 10.2% increase from fiscal
2011 revenues of $1.2 billion. Full year fiscal 2012 net income was $61.7
million, compared to restated fiscal 2011 net income of $54.7 million. Full
year fiscal 2012 diluted earnings per share were $2.58, compared to restated
fiscal 2011 diluted earnings per share of $2.16.

The 2012 results include the benefit of a 53^rd week of operations and the
Incentive Contribution, the impact of which is discussed in “Items Impacting
Comparability” and “Revenue and Operating Highlights” below. The full year
benefit of the 53^rd week was substantially offset by the Incentive
Contribution, as defined below. The Company is restating its 2009, 2010, and
2011 financial statements as described in the Form 8-K dated February 24,
2013; this restatement is discussed in more detail in “Restatement of 2009,
2010, and 2011 Financial Statements” below. The corrections had no impact on
total revenues, operating income, or operating cash flows, and had no impact
on the Company’s compliance with debt covenants in any periods presented.
Further, the corrected accounting treatment is not expected to have a
meaningful impact on the Company’s operating results in future periods.

Items Impacting Comparability

The following table reconciles our GAAP financial results to certain items
impacting comparability, for the fourth quarter and fiscal year ended December
30, 2012:

                                               
                       Three Months Ended          Year Ended
                                    Restated                     Restated
                       Dec. 30,      Dec. 25,      Dec. 30,        Dec. 25,
(In thousands,
except per share       2012          2011          2012            2011
amounts)
                                                                   
Total Revenues, as     $ 367,284     $ 306,213     $ 1,342,653     $ 1,217,882
reported
53rd week of            (21,500 )    -            (21,500   )    -
operations (a)
Total Revenues, as     $ 345,784    $ 306,213     $ 1,321,153    $ 1,217,882
adjusted
                                                                   
Income before income   $ 26,546      $ 23,437      $ 98,395        $ 84,791
taxes, as reported
53rd week of             (4,145  )     -             (4,145    )     -
operations (a)
Incentive               (250    )    -            2,971         -
Contribution (b)
Income before income   $ 22,151     $ 23,437      $ 97,221       $ 84,791
taxes, as adjusted
                                                                   
Net income, as         $ 17,359      $ 15,891      $ 61,660        $ 54,735
reported
53rd week of             (2,634  )     -             (2,634    )     -
operations (a)
Incentive               (165    )    -            1,955         -
Contribution (b)
Net income, as         $ 14,560     $ 15,891      $ 60,981       $ 54,735
adjusted
                                                                   
Earnings per diluted   $ 0.74        $ 0.65        $ 2.58          $ 2.16
share, as reported
53rd week of             (0.11   )     -             (0.11     )     -
operations (a)
Incentive               (0.01   )    -            0.08          -
Contribution (b)
Earnings per diluted   $ 0.62       $ 0.65        $ 2.55         $ 2.16
share, as adjusted
                                                                     

(a) The Company follows a fiscal year ending on the last Sunday of December,
generally consisting of 52 weeks made up of four 13-week quarters. In 2012,
the Company’s fiscal year consisted of 53 weeks, with the additional week
added to the fourth quarter (14 weeks) results.

(b) As previously announced, in connection with a new multi-year supplier
agreement, the Company received a $5.0 million supplier marketing payment in
the first quarter of 2012. The Company is recognizing the supplier marketing
payment evenly as income over the five-year term of the agreement ($250,000
per quarter). The Company then contributed the supplier marketing payment to
the Papa John’s Marketing Fund (“PJMF”), an unconsolidated, non-profit
corporation, for the benefit of domestic restaurants. The Company’s
contribution to PJMF was fully expensed in the first quarter of 2012. PJMF
elected to distribute the $5.0 million supplier marketing payment to the
domestic system as advertising credits in the first quarter of 2012. Our
domestic company-owned restaurants’ portion resulted in an increase in income
before income taxes of approximately $1.0 million in the first quarter. These
transactions together are referred to as the “Incentive Contribution.”

The non-GAAP results shown above, which exclude the 53^rd week of operations
and the Incentive Contribution, should not be construed as a substitute for or
a better indicator of the Company’s performance than the Company’s GAAP
results. Management believes presenting the financial information excluding
the 53^rd week of operations and the impact of the Incentive Contribution is
important for purposes of comparison to prior year results. In addition,
management uses these non-GAAP measures to allocate resources, and analyze
trends and underlying operating performance. Annual cash bonuses, and certain
long-term incentive programs for various levels of management, are based on
financial measures that exclude the Incentive Contribution.

Global Restaurant and Comparable Sales Information

                                                        
                                     Three Months Ended    Year Ended
                                     Dec. 30,  Dec. 25,   Dec. 30,  Dec. 25,
                                     2012      2011      2012      2011
                                                                      
Global restaurant sales growth (a)   19.6  %    6.0   %    10.6  %    7.7   %
                                                                      
Global restaurant sales growth,
excluding the impact of foreign      19.5  %    6.0   %    10.9  %    7.3   %
currency (a)
                                                                      
Comparable sales growth (b)
Domestic company-owned restaurants   6.9   %    1.2   %    5.6   %    4.1   %
North America franchised             4.6   %    1.8   %    2.9   %    3.1   %
restaurants
System-wide North America            5.2   %    1.7   %    3.6   %    3.4   %
restaurants
                                                                      
System-wide international            7.0   %    5.2   %    7.1   %    5.1   %
restaurants
                                                                            

(a) Includes both company-owned and franchised restaurant sales. Excluding the
53^rd week of operations, global restaurant sales growth was 11.6% and 8.6%
for the three months and full year ended 2012, respectively.

(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.

Management believes global restaurant and comparable sales 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
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 revenues highlights below are compared to the same period of the prior
year, unless otherwise noted. All operating highlights below are compared to
the same periods of the prior year, as restated.

Revenues

Consolidated revenues increased $61.1 million, or 19.9%, for the fourth
quarter and increased $124.8 million, or 10.2%, for the year. The fourth
quarter and full year 2012 include the benefit of the 53^rd week of operations
which approximated $21.5 million, or 7.0% and 1.8% respectively. The increases
in revenues were primarily due to the following:

  *Domestic company-owned restaurant sales increased $30.8 million, or 23.6%,
    and $66.4 million, or 12.6%, for the three months and full year,
    respectively. The benefit from the 53^rd week of operations was
    approximately $10.6 million, representing increases of 8.1% and 2.0%,
    respectively. The remaining increases were primarily due to increases in
    comparable sales of 6.9% and 5.6%, respectively, and the net acquisition
    of 50 restaurants in the Denver and Minneapolis markets from a franchisee
    in the second quarter of 2012.
  *North America franchise royalty revenue increased approximately $3.3
    million, or 18.3%, and $5.9 million, or 8.0%, for the three months and
    full year, respectively. The benefit from the 53^rd week of operations was
    approximately $1.4 million, representing increases of 7.6% and 1.8%,
    respectively. The remaining increases were primarily due to increases in
    comparable sales of 4.6% and 2.9%, respectively, and increases in net
    franchise restaurants over the prior year, slightly offset by reduced
    royalties attributable to the Company’s net acquisition of the 50
    restaurants noted above.
  *Domestic commissary sales increased $20.5 million, or 15.9%, and $37.8
    million, or 7.4%, for the three months and full year, respectively. The
    benefit from the 53^rd week of operations was approximately $8.5 million,
    representing increases of 6.6% and 1.7%, respectively. The remaining
    increases were primarily due to higher commissary product volumes
    primarily resulting from increases in the volume of restaurant sales.
  *International revenues increased $4.7 million, or 29.1%, and increased
    $14.4 million, or 24.5%, for the three months and full year, respectively.
    The benefit from the 53^rd week of operations was approximately $800,000,
    representing increases of 5.0% and 1.4%, respectively. The remaining
    increases were primarily due to increases in the number of restaurants and
    increases in comparable sales of 7.0% and 7.1%, respectively, calculated
    on a constant dollar basis.

Operating Highlights, in comparison to the restated prior year

Fourth quarter 2012 income before income taxes was $26.5 million, compared to
$23.4 million, or a 13.3% increase. Income before income taxes was $98.4
million for the year ended December 30, 2012, compared to $84.8 million, or a
16.0% increase. Income before income taxes is summarized in the following
table on a reporting segment basis (in thousands):

                                                    
             Three Months Ended                     Year Ended
                             Restated                              Restated    
                Dec. 30,      Dec. 25,     Increase     Dec. 30,      Dec. 25,      Increase
             2012         2011        (Decrease)  2012         2011         (Decrease)
                14 weeks      13 weeks                  53 weeks      52 weeks
                (a)                                     (a)
                                                                                    
Domestic
company-owned   $ 10,887      $ 6,403      $ 4,484      $ 38,114      $ 28,980      $ 9,134
restaurants
(b)
Domestic          8,327         9,420        (1,093 )     34,317        30,532        3,785
commissaries
North America     18,502        16,032       2,470        69,332        66,222        3,110
franchising
International     1,846         652          1,194        3,063         (165    )     3,228
All others        1,292         301          991          2,889         (441    )     3,330
Unallocated
corporate         (14,175 )     (9,017 )     (5,158 )     (48,958 )     (39,727 )     (9,231 )
expenses (c)
Elimination
of              (133    )   (354   )   221       (362    )   (610    )   248    
intersegment
profits
Income before  $ 26,546    $ 23,437   $ 3,109    $ 98,395    $ 84,791    $ 13,604 
income taxes
                                                                                             

(a) The 53^rd week of operations increased income before income taxes by
approximately $4.1 million for both the fourth quarter and full year 2012 as
follows:

                                   
                                   Increase
                                     (Decrease)
Domestic company-owned restaurants   $  1,609
Domestic commissaries                   1,200
North America franchising               1,414
International                           414
All others                              215
Unallocated corporate expenses        (707  )
Income before income taxes          $  4,145 
                                     

(b) The full year of 2012 includes the benefit of a $1.0 million advertising
credit from the Papa John’s Marketing Fund related to the Incentive
Contribution.

(c) Includes the impact of the Incentive Contribution  in 2012 ($250,000
benefit for the three-month period and a $4.0 million expense for the full
year). Prior year amounts have also been restated to include the impact of the
correction of the error, as described in “Restatement of 2009, 2010 and 2011
Financial Statements.”

The increase in income before income taxes of $3.1 million for the fourth
quarter was primarily due to the following:

  *Domestic company-owned restaurants income improved primarily due to
    comparable sales increases and the 53rd week of operations, partially
    offset by higher commodities costs.
  *North America Franchising and International improved due to the previously
    mentioned increase in net restaurants and strong comparable sales results
    and the benefit from the 53rd week of operations.
  *The improvement in the All others segment was primarily due to an
    improvement in our eCommerce operations.

These increases were partially offset by the following decreases:

  *Domestic commissaries operating results decreased due to lower margins
    resulting from lower prices charged to restaurants, slightly offset by
    increased profits from higher restaurant sales, including the 53rd week of
    operations.
  *Unallocated corporate expenses increased primarily due to higher legal
    costs as described later in this paragraph, higher short-term management
    incentives, humanitarian and non-recurring costs associated with
    Superstorm Sandy, and the impact of the 53rd week of operations. On
    February 13, 2013, the Company tentatively agreed to the financial terms
    of a settlement of the class action litigation Agne v. Papa John’s
    International, Inc. et al., subject to Court approval. A reasonable
    estimate of the total cost of the settlement has been provided for in the
    Company’s financial statements. Actual costs may vary from our estimates
    based upon the actual number of claimants who participate.

The increase in income before income taxes of $13.6 million for the full year
was primarily due to the following:

  *Domestic company-owned restaurants operating income improved primarily due
    to comparable sales increases as well as favorable commodity costs and the
    benefit of the 53^rd week of operations.
  *Domestic commissaries income improved primarily due to the increase in net
    restaurants and higher restaurant sales, including the 53^rd week of
    operations.
  *North America Franchising and International improved due to the previously
    mentioned increase in net restaurants, strong comparable sales results and
    the impact of the 53^rd week of operations.
  *The improvement in the All others segment was primarily due to an
    improvement in our eCommerce operations.
  *These increases were partially offset by higher unallocated corporate
    expenses primarily due to an increase in legal costs as described above,
    short-term management incentives, the Incentive Contribution in 2012,
    insurance costs, and higher costs related to our operators’ conference.

The effective tax rates were 30.7% and 32.9% for the three months and full
year ended December 30, 2012, representing increases of 2.1% and 1.9% from the
rates for the comparable prior year periods. Our effective income tax rate may
fluctuate from quarter to quarter for various reasons, including the
settlement or resolution of specific federal and state issues. The prior year
included significant favorable tax resolution items.

The Company’s free cash flow for the fiscal years ended 2012 and 2011 was as
follows (in thousands):

                                                       
                              Dec. 30,                   Dec. 25,
                              2012                        2011
                                                          
Net cash provided by          $     104,379               $    101,008
operating activities*
Purchases of property              (42,628     )             (29,319    )
and equipment
Free cash flow                $     61,751               $    71,689     
                                                          
*The increase in net cash provided by operating activities is primarily due to
higher net income, partially offset by unfavorable changes in working capital.


We define free cash flow as net cash provided by operating activities (from
the consolidated statements of cash flows) less 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 accounting
principles generally accepted in the United States (“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.

Restatement of 2009, 2010 and 2011 Financial Statements

In connection with the evaluation of the accounting for newly formed joint
ventures in 2012, the Company reviewed the accounting for its previously
existing joint venture arrangements. As a result of our review, we determined
an error occurred in the accounting for one of our joint venture agreements,
which contained a mandatorily redeemable feature added through a contract
amendment in the third quarter of 2009. This provision was not previously
considered in determining the classification and measurement of the
noncontrolling interest. In addition, the Company determined that an
additional redeemable noncontrolling interest was incorrectly classified in
shareholders' equity and should be classified as temporary equity. As such, we
are restating our previously issued consolidated financial statements for the
years ended December 27, 2009, December 26, 2010 and December 25, 2011 to
correct the errors.

To correctly reflect the measurement of the mandatorily redeemable
noncontrolling interest, we recorded a $3.7 million charge, net of income
taxes, to 2009 retained earnings in our consolidated statements of
stockholders’ equity to adjust the previously reported balance to our
redemption value as of December 27, 2009. Additionally, we corrected the
classification errors of our redeemable noncontrolling interests from
permanent equity to either other long-term liabilities or redeemable
noncontrolling interests in our consolidated balance sheets.

In the Company’s 2010 and 2011 consolidated statements of income, interest
expense, income tax expense and net income included herein were affected as a
result of adjusting the mandatorily redeemable noncontrolling interest to its
redemption value. The net impact was a decrease in diluted earnings per share
of $.04 in 2011 and an increase in diluted earnings per share of $.03 in 2010.
This item, which is appropriately recorded in our 2012 consolidated financial
statements, reduced diluted earnings per share by $.03.

The corrections had no impact on total revenues, operating income or operating
cash flows and had no impact on the Company’s compliance with debt covenants
in any periods presented. Further, the corrected accounting treatment is not
expected to have a meaningful impact on the Company’s operating results in
future periods.

Global Restaurant Unit Data

At December 30, 2012, there were 4,163 Papa John’s restaurants operating in
all 50 states and in 35 countries, as follows:

                                                             
                 Domestic   Franchised   Total
                 Company-  North       North    International  System-wide
                 owned      America      America
Fourth Quarter
Beginning -
September 23,    643        2,513        3,156     873             4,029
2012
Opened           6          55           61        95              156
Closed           -          (13     )    (13   )   (9       )      (22     )
Acquired         -          1            1         -               1
Divested         (1    )   -          (1    )  -             (1      )
Ending -
December 30,     648      2,556      3,204   959           4,163   
2012
                                                                   
Year-to-date
Beginning -
December 25,     598        2,463        3,061     822             3,883
2011
Opened           8          182          190       178             368
Closed           (3    )    (44     )    (47   )   (41      )      (88     )
Acquired         57         12           69        -               69
Divested         (12   )   (57     )   (69   )  -             (69     )
Ending -
December 30,     648      2,556      3,204   959           4,163   
2012
                                                                   
Year-over-year
restaurant       50       93         143     137           280     
unit growth
                                                                   
% increase       8.4   %   3.8     %   4.7   %  16.7     %     7.2     %
                                                                           

Our development pipeline as of December 30, 2012 included approximately 1,400
restaurants (300 restaurants in North America and 1,100 restaurants
internationally), the majority of which are scheduled to open over the next
six years.

Share Repurchase Activity

Subsequent to the third quarter of 2012, the Company's Board of Directors
approved a $100 million increase in the amount of the Company’s common stock
that may be purchased under the Company’s share repurchase program through
September 29, 2013, bringing the total authorized under the program to $1.1
billion since its inception in 1999. This increase was comprised of $50
million in both December 2012 and February 2013. Approximately $115 million
remains available under the Company’s share repurchase program as of February
24, 2013.

The following table reflects our repurchases for the fourth quarter and full
year of 2012 as well as subsequent repurchases through February 22, 2013 (in
thousands):

                                                        
                                              Number
Period                                       of Shares   Cost
                                                            
Fourth Quarter 2012                           804           $ 41,949
                                                            
Full Year 2012                                2,276         $ 106,095
                                                            
December 31, 2012 through February 22, 2013   5             $ 254
                                                              

There were 23.3 million and 23.9 million diluted weighted average shares
outstanding for the fourth quarter and full year, respectively, representing
decreases of 5.2% and 5.6% versus the prior year comparable periods. Diluted
earnings per share increased $0.04 and $0.15 for the fourth quarter and full
year, respectively, due to the reductions in shares outstanding, primarily
resulting from the share repurchase program. Approximately 22.3 million actual
shares of the Company’s common stock were outstanding as of December 30, 2012.

Conference Call

A conference call is scheduled for February 27, 2013 at 10:00 a.m. Eastern
Time to review our fourth quarter and full year 2012 earnings results and 2013
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, through March 5, 2013. The
replay can be accessed from the Company’s web site at www.papajohns.com or by
dialing 855-859-2056 (U.S. and Canada) or 404-537-3406 (international). The
Conference ID is 68145875.

2013 Key Operating Assumptions and Earnings Guidance

Diluted Earnings per Share - The Company projects 2013 earnings per share in
the range of $2.85 to $2.95, representing increases of 10% to 14% over 2012
diluted earnings per share.

North America Restaurant Sales - North America system-wide comparable sales
are expected to increase 1.5% to 2.5% in 2013.

International Restaurant Sales - International comparable sales, presented on
a constant-dollar basis, are expected to increase 5% to 7% in 2013. Total
sales growth for international restaurants is expected to range from 20% to
25% in 2013 (23% to 28% excluding the impact of the 53^rd week of operations
in 2012), due to new unit growth and the expected comparable sales increase.

Worldwide Net Unit Growth - Worldwide net unit growth in 2013 is expected to
be in the range of 230 to 260 units, consisting of a range of 110 to 125 units
for North America and a range of 120 to 135 units for International.

Revenues - Total consolidated revenues are expected to increase 6% to 7% in
2013 (8% to 9% excluding the impact of the 53^rd week of operations in 2012).
The increase is expected to result primarily from the projected North America
and International net unit and comparable sales growth.

Pre-tax Income Margin - Consolidated pre-tax income margin in 2013 is expected
to approximate 2012 levels.

Capital Expenditures - Capital expenditures for 2013 are expected to
approximate $55 to $60 million, consisting of company-owned unit development
in the U.S. and Beijing, China, certain technology-related projects designed
to improve restaurant and overall operating efficiencies, including costs
associated with our next generation point of sales system, and routine capital
replacement.

Annual Meeting Date Scheduled

The 2013 Annual Meeting of Stockholders will be held on Wednesday, May 1,
2013, 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 statements may relate to projections concerning business
performance, revenue, earnings, contingent liabilities, commodity costs,
margins, unit growth, 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 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.

These and other risk factors are discussed in detail in “Part I. Item 1A. -
Risk Factors” of the Annual Report on Form 10-K for the fiscal year ended
December 25, 2011, under "Disclosures About Forward-Looking Statements" in our
Form 8-K dated February 24, 2013 regarding the restatement, and in subsequent
filings with the Securities and Exchange Commission under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934. We undertake no
obligation to update publicly any forward-looking statements, whether as a
result of future events, new information or otherwise.

For more information about the Company, please visit www.papajohns.com.


Papa John's International, Inc. and Subsidiaries
Consolidated Statements of Income
                                                          
                                                                 
                     Three Months Ended          Year Ended
                     December     December      December 30,   December 25,
                     30, 2012      25, 2011      2012            2011
                     14 weeks      13 weeks      53 weeks        52 weeks
(In thousands,                     (Unaudited
except per share     (Unaudited)   -                             (As Restated)
amounts)                           As
                                   Restated)
Revenues:
   North America:
     Domestic
     Company-owned   $ 161,562     $ 130,742     $ 592,203       $ 525,841
     restaurant
     sales
     Franchise         21,171        17,893        79,567          73,694
     royalties
     Franchise and
     development       218           258           806             722
     fees
     Domestic
     commissary        149,055       128,586       545,924         508,155
     sales
     Other sales       14,613        12,727        51,223          50,912
   International:
     Royalties and
     franchise and     6,112         4,462         19,881          16,327
     development
     fees
     Restaurant
     and              14,553     11,545      53,049       42,231    
     commissary
     sales
Total revenues         367,284       306,213       1,342,653       1,217,882
                                                                 
Costs and
expenses:
   Domestic
   Company-owned
   restaurant
   expenses:
     Cost of sales     37,987        32,396        137,378         126,887
     Salaries and      45,021        35,065        163,260         142,093
     benefits
     Advertising
     and related       14,686        12,558        54,583          49,035
     costs
     Occupancy         9,032         7,974         34,734          32,278
     costs
     Other
     operating        23,109     18,293      85,847       75,558    
     expenses
   Total domestic
   Company-owned       129,835       106,286       475,802         425,851
   restaurant
   expenses
                                                                 
   Domestic
   commissary and
   other expenses:
     Cost of sales     125,744       106,596       454,108         426,955
     Salaries and      10,208        8,639         38,083          35,141
     benefits
     Other
     operating        15,412     13,138      57,298       53,188    
     expenses
   Total domestic
   commissary and      151,364       128,373       549,489         515,284
   other expenses
                                                                 
International          12,092        9,556         44,853          35,674
operating expenses
General and
administrative         38,106        27,585        131,591         111,608
expenses
Other general          293           2,750         8,313           9,767
expenses
Depreciation and      8,575      7,970       32,798       32,681    
amortization
Total costs and       340,265    282,520     1,242,846    1,130,865 
expenses
                                                                 
Operating income       27,019        23,693        99,807          87,017
Net interest          (473    )   (256    )    (1,412    )   (2,226    )
expense
Income before          26,546        23,437        98,395          84,791
income taxes
Income tax expense    8,137      6,682       32,393       26,324    
Net income,
including
redeemable             18,409        16,755        66,002          58,467
noncontrolling
interests
Net income
attributable to
redeemable            (1,050  )   (864    )    (4,342    )   (3,732    )
noncontrolling
interests
Net income, net of
redeemable           $ 17,359    $ 15,891     $ 61,660      $ 54,735    
noncontrolling
interests
                                                                 
Basic earnings per   $ 0.76      $ 0.66       $ 2.63        $ 2.19      
common share
Earnings per
common share -       $ 0.74      $ 0.65       $ 2.58        $ 2.16      
assuming dilution
                                                                 
Basic weighted
average shares        22,826     24,260      23,458       25,043    
outstanding
Diluted weighted
average shares        23,302     24,581      23,905       25,310    
outstanding
                                                                             


Papa John's International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
                                                        
                                                              
                                         December 30,         December 25,
                                         2012                 2011
(In thousands)                                                (As Restated)
                                                              
Assets
Current assets:
Cash and cash equivalents                $     16,396         $     18,942
Accounts receivable, net                       44,647               28,169
Notes receivable, net                          4,577                4,221
Inventories                                    22,178               20,091
Deferred income taxes                          10,279               7,636
Prepaid expenses and other current            20,549              15,765
assets
Total current assets                           118,626              94,824
                                                              
Property and equipment, net                    196,661              181,910
Notes receivable, less current                 12,536               11,502
portion, net
Goodwill                                       78,958               75,085
Other assets                                  31,627              27,061
Total assets                             $     438,408        $     390,382
                                                              
                                                              
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable                         $     32,624         $     32,966
Income and other taxes payable                 10,429               3,969
Accrued expenses and other current            60,528              44,198
liabilities
Total current liabilities                      103,581              81,133
                                                              
Deferred revenue                               7,329                4,780
Long-term debt                                 88,258               51,489
Deferred income taxes                          10,672               6,692
Other long-term liabilities                   40,674              36,676
Total liabilities                              250,514              180,770
                                                              
Redeemable noncontrolling interests            6,380                3,965
                                                              
Total stockholders' equity                    181,514             205,647
Total liabilities, redeemable
noncontrolling interests and             $     438,408        $     390,382
stockholders' equity
                                                              
                                                              
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)                           December 30, 2012  December 25, 2011
                                                             (As Restated)
Operating activities
Net income, including redeemable         $   66,002          $   58,467
noncontrolling interests
Adjustments to reconcile net income to
net cash provided by operating
activities:
Disposition and impairment losses            269                 1,200
Provision for uncollectible accounts         1,674               1,037
and notes receivable
Depreciation and amortization                32,798              32,681
Deferred income taxes                        2,035               9,345
Stock-based compensation expense             6,905               6,704
Excess tax benefit on equity awards          (1,967     )        (741       )
Other                                        2,961               4,556
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable                          (18,048    )        (4,298     )
Inventories                                  (1,947     )        (2,689     )
Prepaid expenses and other current           (4,239     )        (1,028     )
assets
Other assets and liabilities                 (3,952     )        (877       )
Accounts payable                             (342       )        1,397
Income and other taxes payable               6,460               2,180
Accrued expenses and other current           12,209              (5,685     )
liabilities
Deferred revenue                            3,561             (1,241     )
Net cash provided by operating               104,379             101,008
activities
                                                             
Investing activities
Purchase of property and equipment           (42,628    )        (29,319    )
Loans issued                                 (4,903     )        (3,492     )
Repayments of loans issued                   3,642               5,357
Acquisitions, net of cash acquired           (6,175     )        -
Proceeds from divestitures of                908                 -
restaurants
Other                                       36                68         
Net cash used in investing activities        (49,120    )        (27,386    )
                                                             
Financing activities
Net proceeds (repayments) on line of         36,769              (47,511    )
credit facility
Excess tax benefit on equity awards          1,967               741
Tax payments for restricted stock            (855       )        (1,041     )
issuances
Proceeds from exercise of stock              12,264              14,042
options
Acquisition of Company common stock          (106,095   )        (65,323    )
Net proceeds from issuance of                2,052               -
redeemable noncontrolling interests
Distributions to redeemable                  (4,256     )        (3,669     )
noncontrolling interest holders
Other                                       225               160        
Net cash used in financing activities        (57,929    )        (102,601   )
                                                             
Effect of exchange rate changes on          124               92         
cash and cash equivalents
Change in cash and cash equivalents          (2,546     )        (28,887    )
Cash and cash equivalents at beginning      18,942            47,829     
of year
                                                             
Cash and cash equivalents at end of      $   16,396         $   18,942     
year
                                                                            

Contact:

Papa John’s International, Inc.
Lance Tucker, 502-261-4218
Chief Financial Officer
 
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