Papa John’s Announces Third Quarter 2013 Results

  Papa John’s Announces Third Quarter 2013 Results

                         Earnings Guidance Increased;

                       Two-for-One Stock Split Declared

Business Wire

LOUISVILLE, Ky. -- November 5, 2013

Papa John’s International, Inc. (NASDAQ: PZZA)  today announced financial
results for the three and nine months ended September 29, 2013.

Highlights

  *Third quarter diluted earnings per share of $0.65 in 2013 compared to
    $0.55 in 2012, an increase of 18%
  *System-wide comparable sales increases of 1.8% for North America and 8.1%
    for international during the quarter
  *2013 diluted earnings per share guidance increased to a range of $3.02 to
    $3.10
  *2013 guidance increased for North America comparable sales, international
    comparable sales, and worldwide net unit openings

“I’d like to congratulate our operators on yet another solid quarter,” said
Papa John's Founder, Chairman and Chief Executive Officer, John Schnatter.
“Papa John's brand promise of delivering Better Ingredients, Better Pizza is
resonating with customers around the world reflected by our strong
international comp sales and unit growth. Having just initiated a regular cash
dividend, today’s announcement of a two-for-one stock split demonstrates our
Company’s sustained commitment to building value for our shareholders and our
confidence in the fundamentals and growth potential of our business.”

Third quarter 2013 revenues were $346.3 million, a 6.4% increase from third
quarter 2012 revenues of $325.5 million. Third quarter 2013 net income was
$14.3 million, compared to third quarter 2012 net income of $13.0 million.
Third quarter 2013 diluted earnings per share were $0.65 compared to third
quarter 2012 diluted earnings per share of $0.55.

Revenues were $1.05 billion for the nine months ended September 29, 2013, a
7.8% increase from revenues of $975.4 million for the same period in 2012. Net
income was $50.7 million for the nine months ended September 29, 2013,
compared to $44.3 million for the same period in 2012 ($50.2 million and $46.4
million, for the nine-month periods in 2013 and 2012, respectively, excluding
the impact of the previously disclosed 2012 Incentive Contribution). Diluted
earnings per share were $2.27 for the nine months ended September 29, 2013,
compared to $1.84 for the same period in 2012 ($2.24 and $1.93, for the
nine-month periods in 2013 and 2012, respectively, excluding the impact of the
2012 Incentive Contribution).


Global Restaurant and Comparable Sales Information
                                                  
                             Three Months Ended         Nine Months Ended
                             Sept.         Sept.         Sept.         Sept.
                             29,         23,          29,         23,
                             2013          2012          2013          2012
                                                                
Global restaurant            6.9  %        7.1  %        6.7  %        7.6  %
sales growth (a)
                                                                       
Global restaurant
sales growth,
excluding the                7.5  %        7.4  %        7.2  %        8.0  %
impact of foreign
currency (a)
                                                                       
Comparable sales
growth (b)
Domestic
company-owned                5.1  %        5.0  %        5.0  %        5.1  %
restaurants
North America
franchised                   0.6  %        1.7  %        1.3  %        2.4  %
restaurants
System-wide North
America                      1.8  %        2.5  %        2.3  %        3.0  %
restaurants
                                                                       
System-wide
international                8.1  %        6.9  %        7.7  %        7.1  %
restaurants
                                                                       
(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 conversion.


Management believes 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 revenues and operating highlights below are compared to the same period of
the prior year and exclude the Incentive Contribution, unless otherwise noted.

Revenues

Consolidated revenues increased $20.8 million, or 6.4%, for the third quarter
of 2013 and increased $75.8 million, or 7.8%, for the nine months ended
September 29, 2013. The increases in revenues were primarily due to the
following:

  *Domestic company-owned restaurant sales increased $9.4 million, or 6.5%,
    and $35.1 million, or 8.1%, for the three and nine months, respectively,
    primarily due to increases in comparable sales of 5.1% and 5.0%. The
    increase for the nine-month period was also due to 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 $600,000,
    or 3.4%, and $2.0 million, or 3.4%, for the three and nine months,
    respectively, primarily due to increases in net franchise units over the
    prior year and increases in comparable sales of 0.6% and 1.3%, partially
    offset by royalty incentives offered to franchisees for meeting certain
    sales targets. The increase for the nine-month period was partially offset
    by reduced royalties attributable to the company’s net acquisition of the
    50 restaurants noted above.
  *Domestic commissary sales increased $5.4 million, or 4.1%, and $25.1
    million, or 6.3%, for the three and nine months, respectively, primarily
    due to increases in sales volumes as well as increases in the prices of
    commodities.
  *International revenues increased $4.4 million, or 24.2%, and $11.2
    million, or 21.4%, for the three and nine months, respectively, primarily
    due to increases in the number of restaurants and increases in comparable
    sales of 8.1% and 7.7%, calculated on a constant dollar basis.

Operating Highlights

The table below summarizes income before income taxes on a reporting segment
basis, excluding the Incentive Contribution:

                                                         
                Three Months Ended                         Nine Months Ended
                    Sept. 29,    Sept. 23,      Increase       Sept. 29,     Sept. 23,     Increase
(In              2013         2012         (Decrease)   2013          2012          (Decrease)
thousands)
                                                                                                 
Domestic
company-owned       $ 5,535        $ 5,549        $  (14   )     $ 24,666        $ 27,228        $ (2,562 )
restaurants
Less:
Incentive         -          -           -         -           1,029       (1,029 )
Contribution
(a)
Domestic
company-owned
restaurants,          5,535          5,549           (14   )       24,666          26,199          (1,533 )
excluding
Incentive
Contribution
                                                                                                 
Domestic              6,473          6,846           (373  )       26,278          25,990          288
commissaries
North America         16,516         16,070          446           52,134          50,829          1,305
franchising
International         945            625             320           2,152           1,217           935
All others            590            732             (142  )       2,402           1,598           804
Unallocated
corporate             (8,544 )       (9,201 )        657           (28,475 )       (34,784 )       6,309
expenses
Less:
Incentive         250        250         -         750         (4,250  )    5,000  
Contribution
(a)
Unallocated
corporate
expenses,             (8,794 )       (9,451 )        657           (29,225 )       (30,534 )       1,309
excluding
Incentive
Contribution
                                                                                                 
Elimination
of
intersegment      (252   )    242         (494  )    (989    )    (229    )    (760   )
losses
(profits)
Total income
before income
taxes,
excluding        $ 21,013    $ 20,613    $  400      $ 77,418     $ 75,070     $ 2,348  
Incentive
Contribution
(a)
                                                                                                 
(a) Income before income taxes and other financial measures excluding the Incentive Contribution are
non-GAAP financial measures. See Marketing Incentive Contribution table below for additional details and a
reconciliation to our GAAP financial measures.


Third quarter 2013 income before income taxes increased approximately
$400,000, or 1.9%, primarily due to the following:

  *North America franchising increased primarily due to the increase in net
    restaurants and comparable sales, partially offset by royalty incentives
    offered to franchisees for meeting certain sales targets.
  *International increased primarily due to the increase in net restaurants
    and comparable sales results and an improvement in our United Kingdom
    results, partially offset by higher operating losses in our company-owned
    China market.
  *Unallocated corporate expenses decreased primarily due to lower settlement
    costs than originally estimated for the previously disclosed Agne text
    messaging class action lawsuit.

These increases were partially offset by the following decrease:

  *Domestic commissaries decreased as higher distribution costs more than
    offset the incremental profits associated with higher sales. We manage
    commissary results on a full year basis and anticipate the 2013 full year
    pre-tax income margin will approximate the 2012 margin.

Domestic company-owned restaurants income before income taxes approximated the
prior year as the incremental profits associated with higher comparable sales
of 5.1% were offset by a lower gross margin.

The increase in income before income taxes for the nine months ended September
29, 2013 of $2.3 million, or 3.1%, was primarily due to the same reasons as
the increases noted above for the three month period. In addition, All others
increased primarily due to an improvement in our online operating results due
to higher online sales volumes. These increases were partially offset by a
decrease in income before income taxes at our domestic company-owned
restaurants primarily due to higher commodity costs, somewhat offset by
incremental profits associated with higher comparable sales of 5.0%.

The effective income tax rates were 30.0% and 31.9% for the three and nine
months ended September 29, 2013, respectively, representing decreases of 3.7%
and 1.9% from the prior year rates. The lower tax rates were due to various
credits earned and the settlement or resolution of specific tax issues in
2013.

The company’s free cash flow for the first nine months of 2013 and 2012 was as
follows (in thousands):

                          
                                 Nine Months Ended
                                 Sept. 29,                 Sept. 23,
                                 2013                        2012
                                                             
Net cash provided
by operating                     $    74,833                 $   94,773
activities (a)
Purchase of
property and                         (38,537    )              (26,425   )
equipment (b)
Free cash flow                   $    36,296                $   68,348    
                                                                           


(a) The decrease of approximately $19.9 million was primarily due to
unfavorable changes in working capital, including the timing of income tax and
other payments, partially offset by an increase in net income.
(b) The increased purchases of property and equipment primarily relate to
expenditures on equipment for the New Jersey dough production as well as
technology investments.

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 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 Quarterly Report on Form 10-Q filed with
the Securities and Exchange Commission for additional information concerning
our operating results and cash flow for the three- and nine-month periods
ended September 29, 2013.

Global Restaurant Unit Data

At September 29, 2013, there were 4,296 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
Third
Quarter
Beginning -
June 30,           654          2,588          3,242       1,010             4,252
2013
Opened             2            48             50          40                90
Closed             -         (41     )    (41   )   (5       )      (46     )
Ending -
September          656       2,595       3,251    1,045          4,296   
29, 2013
                                                                             
Year-to-date
Beginning -
December 30,       648          2,556          3,204       959               4,163
2012
Opened             8            111            119         112               231
Closed             -         (72     )    (72   )   (26      )      (98     )
Ending -
September          656       2,595       3,251    1,045          4,296   
29, 2013
                                                                             
Restaurant         8         39          47       86             133     
unit growth
                                                                             
% increase         1.2   %    1.5     %    1.5   %   9.0      %      3.2     %
                                                                                     

Our development pipeline as of September 29, 2013 included approximately 1,300
restaurants (250 units in North America and 1,050 units internationally), the
majority of which are scheduled to open over the next six years.

Marketing Incentive Contribution

The following table reconciles our GAAP financial results to our results
excluding the Incentive Contribution for the three and nine months ended
September 29, 2013 versus the same periods in 2012:

                                                 
                       Three Months Ended              Nine Months Ended
                       Sept. 29,      Sept. 23,      Sept. 29,    Sept.
                                                                      23,
(In
thousands,
except per             2013             2012           2013           2012
share
amounts)
                                                                      
Income before
income taxes,          $  21,263        $ 20,863       $ 78,168       $ 71,849
as reported
Incentive
Contribution             (250    )      (250   )      (750   )      3,221
(a)
Income before
income taxes,
excluding              $  21,013       $ 20,613      $ 77,418      $ 75,070
Incentive
Contribution
                                                                      
Net income,            $  14,276        $ 13,031       $ 50,732       $ 44,301
as reported
Incentive
Contribution             (165    )      (159   )      (494   )      2,116
(a)
Net income,
excluding              $  14,111       $ 12,872      $ 50,238      $ 46,417
Incentive
Contribution
                                                                      
Earnings per
diluted                $  0.65          $ 0.55         $ 2.27         $ 1.84
share, as
reported
Incentive
Contribution             (0.01   )      (0.01  )      (0.03  )      0.09
(a)
Earnings per
diluted
share,                 $  0.64         $ 0.54        $ 2.24        $ 1.93
excluding
Incentive
Contribution
                                                                      
(a) As previously disclosed, in connection with a 2012 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). In 2012, the Company 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 of
2012. These transactions together are referred to as the “Incentive
Contribution.”


The results shown in the table and elsewhere in this press release, which
exclude the Incentive Contribution, are not measures defined by accounting
principles generally accepted in the United States (“GAAP”). These non-GAAP
measures 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 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, were
based on financial measures that excluded the Incentive Contribution.

Share Repurchase Activity

The following table reflects our repurchases for the three and nine months
ended September 29, 2013 and subsequent repurchases through October 28, 2013
(in thousands):

                                                          
Period                                         Number of   Cost
                                                  Shares
                                                                
Three Months Ended September 29, 2013             150           $ 10,331
                                                                
Nine Months Ended September 29, 2013              1,128         $ 69,137
                                                                
September 30, 2013 through October 28, 2013       74            $ 5,260
                                                                  

There were 22.1 million and 22.4 million diluted weighted average shares
outstanding for the three and nine months ended September 29, 2013,
representing decreases of 6.9% and 7.2% over the prior year comparable
periods. Diluted earnings per share increased $0.05 and $0.17 for the three
and nine months ended September 29, 2013 due to the reduction in shares
outstanding resulting from the share repurchase program. Approximately 21.5
million actual shares of the company’s common stock were outstanding as of
September 29, 2013.

Regular Quarterly Dividend and Two-for-One Stock Split

As previously announced, the Board of Directors declared a regular quarterly
cash dividend of $0.25 per share; the dividend will be paid on November 22,
2013 to shareholders of record as of the close of business on November 11,
2013.

The Board of Directors also declared a two-for-one split of the company’s
outstanding shares of common stock, which will be effected in the form of a
stock dividend. The stock dividend entitles each shareholder of record at the
close of business on December 12, 2013 to receive one additional share for
every outstanding share of common stock held on such record date. The stock
dividend will be distributed on December 27, 2013.

2013 Guidance Update

The company provided the following 2013 guidance updates:

                                                   
                                      Updated            Previous
                                      Guidance           Guidance
                                                         
Diluted earnings per share            $3.02 to $3.10     $2.92 to $3.00
                                                         
North America comparables sales       +2.5% to +3.5%     +1.5% to +2.5%
                                                         
International comparable sales        +7.0% to +8.0%     +5.0% to +7.0%
                                                         
Worldwide net unit growth             245 to 275         230 to 260
North America                         85 to 95           110 to 125
International                         160 to 180         120 to 135
                                                         

Conference Call

A conference call is scheduled for November 6, 2013 at 10:00 a.m. Eastern Time
to review our third quarter 2013 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 63215634.

Forward-Looking Statements

Certain matters discussed in this press release 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:

  *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 to operate new and existing restaurants profitably;
  *increases in or sustained high costs of food ingredients and other
    commodities;
  *disruption of our supply chain or our commissary operations 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 or 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; 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 30, 2012. 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            Nine Months Ended
                     September     September       September 29,   September
                     29, 2013        23, 2012        2013              23, 2012
                     (Unaudited)   (Unaudited)     (Unaudited)     (Unaudited)
(In thousands,
except per
share amounts)
Revenues:
North America:
Domestic
Company-owned        $ 152,662       $ 143,299       $ 465,713         $ 430,641
restaurant
sales
Franchise              19,419          18,777          60,382            58,396
royalties
Franchise and
development            263             160             1,028             588
fees
Domestic
commissary             138,044         132,666         421,941           396,869
sales
Other sales            13,566          12,581          38,617            36,610
International:
Royalties and
franchise and          5,454           4,582           15,912            13,769
development
fees
Restaurant and
commissary            16,934      13,449        47,539        38,496  
sales
Total revenues         346,342         325,514         1,051,132         975,369
                                                                       
Costs and
expenses:
Domestic
Company-owned
restaurant
expenses:
Cost of sales          38,233          34,054          113,131           99,391
Salaries and           41,701          39,587          127,026           118,239
benefits
Advertising
and related            14,424          13,920          43,894            39,897
costs
Occupancy              9,583           9,185           27,233            25,702
costs
Other
operating             23,061      21,490        68,237        62,738  
expenses
Total domestic
Company-owned          127,002         118,236         379,521           345,967
restaurant
expenses
                                                                       
Domestic
commissary and
other
expenses:
Cost of sales          115,563         111,114         347,386           328,364
Salaries and           10,347          9,654           30,678            27,875
benefits
Other
operating             15,965      14,082        47,740        41,886  
expenses
Total domestic
commissary and         141,875         134,850         425,804           398,125
other expenses
                                                                       
International
restaurant and         14,372          11,394          40,008            32,761
commissary
expenses
General and
administrative         31,780          30,426          98,064            93,485
expenses
Other general          1,260           1,211           4,042             8,020
expenses
Depreciation
and                   8,605       8,192         25,672        24,223  
amortization
Total costs           324,894     304,309       973,111       902,581 
and expenses
                                                                       
Operating              21,448          21,205          78,021            72,788
income
Net interest
(expense)             (185    )    (342    )      147           (939    )
income
Income before          21,263          20,863          78,168            71,849
income taxes
Income tax            6,385       7,038         24,926        24,256  
expense
Net income,
including
redeemable             14,878          13,825          53,242            47,593
noncontrolling
interests
Income
attributable
to redeemable         (602    )    (794    )      (2,510    )    (3,292  )
noncontrolling
interests
Net income,
net of
redeemable           $ 14,276     $ 13,031       $ 50,732       $ 44,301  
noncontrolling
interests
                                                                       
Basic earnings
per common           $ 0.66       $ 0.56         $ 2.32         $ 1.87    
share
Earnings per
common share -       $ 0.65       $ 0.55         $ 2.27         $ 1.84    
assuming
dilution
                                                                       
Basic weighted
average shares        21,591      23,268        21,855        23,685  
outstanding
Diluted
weighted              22,084      23,721        22,381        24,107  
average shares
outstanding
                                                                       
Dividends
declared per         $ 0.25          $ -             $ 0.25            $ -
common share
                                                                       


Papa John's International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets


                                   September 29,          December 30,
                                      2013                     2012
(In thousands)                        (Unaudited)              (Note)
                                                               
Assets
Current assets:
Cash and cash                         $     13,689             $    16,396
equivalents
Accounts receivable, net                    47,642                  44,647
Notes receivable                            5,506                   4,577
Inventories                                 22,918                  22,178
Deferred income taxes                       9,263                   10,279
Prepaid expenses and                       20,269                 20,549
other current assets
Total current assets                        119,287                 118,626
                                                               
Property and equipment,                     207,415                 196,661
net
Notes receivable, less                      12,305                  12,536
current portion, net
Goodwill                                    79,024                  78,958
Other assets                               33,408                 31,627
Total assets                          $     451,439            $    438,408
                                                               
                                                               
Liabilities and
stockholders' equity
Current liabilities:
Accounts payable                      $     34,081             $    32,624
Income and other taxes                      5,918                   10,429
payable
Accrued expenses and
other current                              55,192                 60,528
liabilities
Total current                               95,191                  103,581
liabilities
                                                               
Deferred revenue                            6,215                   7,329
Long-term debt                              120,000                 88,258
Deferred income taxes                       12,471                  10,672
Other long-term                            41,118                 40,674
liabilities
Total liabilities                           274,995                 250,514
                                                               
Redeemable                                  6,948                   6,380
noncontrolling interests
                                                               
Total stockholders'                        169,496                181,514
equity
Total liabilities,
redeemable                            $     451,439            $    438,408
noncontrolling interests
and 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


                                  Nine Months Ended
(In thousands)                       September 29, 2013   September 23, 2012
                                     (Unaudited)           (Unaudited)
Operating activities
Net income, including
redeemable noncontrolling            $    53,242            $    47,593
interests
Adjustments to reconcile net
income to net cash provided by
operating activities:
Provision for uncollectible               1,130                  1,250
accounts and notes receivable
Depreciation and amortization             25,672                 24,223
Deferred income taxes                     6,994                  424
Stock-based compensation                  5,642                  4,932
expense
Excess tax benefit on equity              (4,108    )            (1,717    )
awards
Other                                     1,260                  4,375
Changes in operating assets
and liabilities, net of
acquisitions:
Accounts receivable                       (4,666    )            (6,018    )
Inventories                               (740      )            (1,188    )
Prepaid expenses and other                281                    3,138
current assets
Other assets and liabilities              (3,254    )            (840      )
Accounts payable                          1,457                  1,106
Income and other taxes payable            (4,511    )            6,248
Accrued expenses and other                (3,217    )            7,258
current liabilities
Deferred revenue                         (349      )           3,989     
Net cash provided by operating            74,833                 94,773
activities
                                                            
Investing activities
Purchases of property and                 (38,537   )            (26,425   )
equipment
Loans issued                              (3,830    )            (3,951    )
Repayments of loans issued                3,687                  2,620
Acquisitions, net of cash                 -                      (6,175    )
acquired
Proceeds from divestitures of             -                      1,068
restaurants
Other                                    324                  4         
Net cash used in investing                (38,356   )            (32,859   )
activities
                                                            
Financing activities
Net proceeds (repayments) on              31,742                 (1,489    )
line of credit facility
Cash dividends paid on common             (5,414    )            -
stock
Excess tax benefit on equity              4,108                  1,717
awards
Tax payments for restricted               (1,862    )            (846      )
stock issuances
Proceeds from exercise of                 4,193                  11,399
stock options
Acquisition of Company common             (69,137   )            (64,146   )
stock
Contributions from redeemable
noncontrolling interest                   850                    -
holders
Distributions to redeemable
noncontrolling interest                   (3,200    )            (2,431    )
holders
Other                                    (501      )           174       
Net cash used in financing                (39,221   )            (55,622   )
activities
                                                            
Effect of exchange rate
changes on cash and cash                 37                   119       
equivalents
Change in cash and cash                   (2,707    )            6,411
equivalents
Cash and cash equivalents at             16,396               18,942    
beginning of period
                                                            
Cash and cash equivalents at         $    13,689           $    25,353    
end of period
                                                            

Contact:

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