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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: February 23, 2000
PJ AMERICA, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21587 61-1308435
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2300 Resource Drive
Birmingham, Alabama 35242
(Address of principal executive offices)
(205) 981-2800
(Registrant's telephone number, including area code)
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Item 5. Other Events
On February 8, 2000, PJ America, Inc., a Delaware Corporation (the "Company")
announced Fourth Quarter 1999 earnings results. The Company also reported
January comp sales of .3%, and a plan to increase discounting and advertising to
increase trial, primarily in the Company's newer markets. Based on these
results, the Company projected First quarter 2000 earnings per share of 23-27
cents.
Exhibit No. Description of Exhibit
- ----------- ----------------------
99 PJ America, Inc. Press Release dated February 8, 2000
announcing Fourth quarter 1999 Results and other information.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PJ AMERICA, INC.
Date: February 23, 2000 By: /s/ D. Ross Davison
--------------------
D. Ross Davison
Vice President Administration, Chief Financial Officer
And Treasurer (Principal Financial Officer)
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[LOGO]
Note: A conference call will be held Wednesday, February 9, 2000 at 10:00
a.m. EST for discussion of fourth quarter and annual results. If you
are interested in participating in the conference call, please call
1-800-464-9034 immediately prior to the scheduled time. The conference
ID is: 480344
Contact: D. Ross Davison
Chief Financial Officer and Treasurer
(205) 981-2823
PJ AMERICA REPORTS EARNINGS AND REVENUES
FOR FOURTH QUARTER AND FULL YEAR 1999
Highlights:
. Comparable Restaurant Sales Increase of 2.3% for 1999, flat for 4/th/ Quarter
1999
. 4/th/ Quarter Earnings per share of $.28 vs $.23 in 1998 (22% increase),
before impairment charges
. Restaurant openings of 35 for 1999, 7 for 4/th/ Quarter 1999
Birmingham, Alabama, February 8, 2000
PJ America, Inc. (NASDAQ: PJAM), the largest franchisee of Papa John's
International, Inc. announced revenues of $25.2 million and income of $1.61
million before impairment charges for the fourth quarter ended December 26,
1999. These results represent increases of 26% and 20%, respectively, over
revenues of $20.1 million and net income of $1.34 million for the same period in
1998. For 1999, the Company reported sales of $95.5 million and income of $6.1
million, before impairment charges and the cumulative effect of change in
accounting principle. The annual results represent increases of 39% and 20%,
respectively, over revenues of $68.6 million and income of $5.1 million in 1998.
Earnings per share (diluted) for the quarter increased 22% to 28 cents
before impairment charges compared to 23 cents for the fourth quarter of 1998.
Earnings per share for the year increased 20% to $1.03 before impairment
charges, compared to 86 cents for 1998. Including the non-recurring asset
impairment charges, the Company reported net income of $1.15 million, or $.20
per share for the fourth
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quarter, and $5.65 million, or $.95 per share for the year, before the
cumulative effect of change in accounting principle.
Comparable restaurant sales increased .1% for the quarter and 2.3% for the
year. During 1999, the Company opened 35 restaurants (including seven openings
in the fourth quarter), sold two restaurants, and ended the year with 152
restaurants, a 28% increase from the end of 1998.
The Company also announced that it had a non-recurring charge against
fourth quarter 1999 earnings of $690,000 ($455,000 net of tax, or 8 cents per
share) to cover the costs required to change its slogan and asset impairment
costs related to two restaurants. The Company also previously reported that it
may incur costs of up to $1 million in fiscal 2000 for the deployment and
implementation of a new slogan, resulting from the Pizza Hut litigation against
Papa John's International, Inc. These charges will be expensed as incurred,
however the timing and magnitude of the costs will depend on the outcome of the
outstanding litigation, which is currently under appeal.
The Company's President and C.E.O., Doug Stephens, said, "1999 was a
crucial year for PJ America as we began our foundation in three new markets -
California, Oregon and Puerto Rico. As we begin 2000, our focus will be on
building the brand and growing market share, especially in our new markets,
where the Papa John's brand is not as well established. We have not achieved the
level of sales in our new markets that we had anticipated, and we are
implementing a new plan, which will include additional discounting and
advertising to increase trial. This marketing strategy, along with increased
labor and staffing, will in the short term adversely affect margins.
Our comparable store sales for the January period were .3% positive, which
was less than internal expectations. However, we are just beginning our first
quarter promotion, which we anticipate will increase our sales momentum. Based
on this information and our increased marketing plan, we project first quarter
earnings per share of 23-27 cents."
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: additional unforeseen costs, expenses which may be incurred
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with respect to the change of the Papa John's slogan as a result of Papa John's
International, Inc.'s litigation with Pizza Hut, Inc.; 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 and political 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.
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PJ America, Inc.
<TABLE>
<CAPTION>
Three Months Ended Year Ended
-------------------- --------------------
Dec. 26, Dec. 27, Dec. 26, Dec. 27,
1999(1) 1998 1999(1) 1998
-------- -------- -------- --------
<S> <C> <C> <C>
Restaurant sales $25,207 $20,080 $95,489 $68,586
======= ======= ======= =======
Net income before cumulative effect
of change in accounting principle $ 1,150 $ 1,339 $ 5,648 $ 5,067
Cumulative effect of change in
accounting principle, net of taxes - - (181) -
------- ------- ------- -------
Net income $ 1,150 $ 1,339 $ 5,467 $ 5,067
======= ======= ======= =======
Diluted earnings per share before
cumulative effect of change in
accounting principle $ 0.20 $ 0.23 $ 0.95 $ 0.86
Cumulative effect of change in
accounting principle, net of taxes - - (0.03) -
------- ------- ------- -------
Diluted earnings per share $ 0.20 $ 0.23 $ 0.92 $ 0.86
======= ======= ======= =======
Weighted average shares - diluted 5,765 5,910 5,942 5,919
======= ======= ======= =======
</TABLE>
(1) Net income for the fourth quarter of 1999 and the year includes an asset
impairment charge of $690 thousand pretax, which is equivalent to $455 thousand
net of tax (8 cents per share).
(All data above in thousands except per share amounts)
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PJ AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Year Ended
----------------------- -----------------------
Dec. 26, Dec. 27, Dec. 26, Dec. 27,
1999(1) 1998 1999(1) 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
(In thousands, except per share amounts)
Restaurant sales $25,207 $20,080 $95,489 $68,586
Cost and expenses:
Cost of sales 7,586 6,670 29,285 22,153
Salaries and benefits 6,995 5,364 26,649 18,272
Other operating expenses 6,142 4,603 22,871 15,971
------- ------- ------- -------
20,723 16,637 78,805 56,396
General and administrative expenses 1,282 990 4,811 3,466
Depreciation and amortization 898 646 3,243 2,078
Litigation compliance and asset impairment 690 - 690 -
------- ------- ------- -------
Total costs and expenses 23,593 18,273 87,549 61,940
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Operating income 1,614 1,807 7,940 6,646
Other income 127 191 617 916
------- ------- ------- -------
Income before income taxes and cumulative
effect of change in accounting principle 1,741 1,998 8,557 7,562
Income tax expense 591 659 2,909 2,495
------- ------- ------- -------
Income before cumulative effect of change in
accounting principle 1,150 1,339 5,648 5,067
Cumulative effect of change in accounting
principle, net of taxes - - (181) -
------- ------- ------- -------
Net income $ 1,150 $ 1,339 $ 5,467 $ 5,067
======= ======= ======= =======
Basic earnings per share:
Net income before cumulative effect of
change in accounting principle $ 0.20 $ 0.23 $ 0.98 $ 0.88
Cummulative effect of accounting change,
net of taxes - - (0.03) -
------- ------- ------- -------
Net income $ 0.20 $ 0.23 $ 0.95 $ 0.88
======= ======= ======= =======
Diluted earnings per share:
Net income before cumulative effect of
change in accounting principle $ 0.20 $ 0.23 $ 0.95 $ 0.86
Cumulative effect of accounting change,
net of taxes - - (0.03) -
------- ------- ------- -------
Net income per share - Diluted $ 0.20 $ 0.23 $ 0.92 $ 0.86
======= ======= ======= =======
Weighted average shares outstanding - Basic 5,632 5,747 5,744 5,777
======= ======= ======= =======
Weighted average shares outstanding - Diluted 5,765 5,910 5,942 5,919
======= ======= ======= =======
</TABLE>
(1) Net income for the fourth quarter of 1999 and the year includes an asset
impairment charge of $690 thousand pretax, which is equivalent to $455 thousand
net of tax (8 cents per share).
