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[LOGO OF PAPA JOHNS]
Contact: D. Ross Davison
Chief Financial Officer and Treasurer
(205) 981-2823
PJ AMERICA ANNOUNCES FOURTH QUARTER CHARGE
AND 2001 DEVELOPMENT PLANS
Birmingham, Alabama, December 7, 2000
PJ America, Inc. (NASDAQ: PJAM), the largest franchisee of Papa John's
International, Inc. announced today that the company plans to take a pretax
charge in its fourth quarter ending December 31, 2000 related to asset
impairment in accordance with Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" (FAS 121). The Company has completed a review of each
restaurant location, taken into account its financial performance and other
factors to determine its compliance with FAS 121. During this analysis, the
Company reviewed under performing restaurants, and it is likely that a limited
number of these restaurants may close. Accordingly, the Company will record a
pretax charge of approximately $8 million to $10 million for the quarter ending
December 31, 2000. This non-cash charge will adjust the operating assets to
their net realizable value as required under FAS 121.
Excluding the FAS 121 impairment charge, the company expects its operating
earnings for the fourth quarter ending December 31, 2000 to be within the range
of $.17 and $.22 as previously announced.
The Company also announced that it anticipates opening approximately 6
restaurants in 2001, as the Company will focus on improving operations in its
existing restaurant base.
The Company's President and CEO, Doug Stephens said, "During our recent
review of our restaurants and restaurant operations, we recognized that our
operations need to improve, specifically in our new markets. Therefore, we plan
on limiting our new restaurant development in 2001 while we focus on improving
our overall operations. While it is difficult to make these decisions, it will
allow us to improve our overall financial performance and utilize our resources
more effectively."
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This information contains forward-looking statements within the meaning of
Section 27A of The Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
reflect management's expectations based upon currently available information and
data; however, actual results are subject to future events and uncertainties,
which could cause actual results to materially differ from those projected in
these statements. Factors that can cause actual results to materially differ
include: increased advertising, promotions and discounting by competitors which
may adversely affect sales; the ability of the Company to open new restaurants
and operate new and existing restaurants profitably; increases in food, labor,
employee benefits and similar costs; economic conditions in the territories in
which the Company operates; and new product and concept development by food
industry competitors. Further information regarding factors that could affect
the Company's financial and other results is included in the Company's forms
10-Q and 10-K, filed with the Securities and Exchange Commission.
