<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the fiscal year ended December 31, 1998
OR
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
Commission File Number: 0-21660
A. Full title of the Plan:
PAPA JOHN'S INTERNATIONAL, INC., 401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
PAPA JOHN'S INTERNATIONAL, INC.
11492 Bluegrass Parkway, Suite 175
Louisville, Kentucky 40299-2334
Telephone: (502) 266-5200
________________________________________________________________________________
<PAGE>
Financial Statements
and Schedules
Papa John's International, Inc. 401(k) Plan
December 31, 1998 and 1997
and Year Ended December 31, 1998
with Report of Independent Auditors
<PAGE>
Papa John's International, Inc. 401(k) Plan
Financial Statements
and Schedules
December 31, 1998 and 1997
and Year Ended December 31, 1998
Contents
Report of Independent Auditors............................................ 1
Financial Statements
Statements of Net Assets Available for Benefits........................... 3
Statement of Changes in Net Assets Available for Benefits................. 5
Notes to Financial Statements............................................. 6
Schedules
Schedule of Assets Held for Investment Purposes........................... 9
Schedule of Reportable Transactions....................................... 10
<PAGE>
Report of Independent Auditors
401(k) Plan Committee
Papa John's International, Inc.
We have audited the accompanying statements of net assets available for benefits
of the Papa John's International, Inc. 401(k) Plan as of December 31, 1998 and
1997, and the related statement of changes in net assets available for benefits
for the year ended December 31, 1998. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended, are presented for purpose of additional
analysis and are not a required part of the financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The Fund Information in the statements of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and the changes in net assets available
for benefits of each fund. The supplemental schedules and Fund Information have
been subjected to auditing procedures applied in our audits of the financial
<PAGE>
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
June 3, 1999
Louisville, Kentucky
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
<PAGE>
Papa John's International, Inc. 401(k) Plan
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1998
<TABLE>
<CAPTION>
Fund Information
- -----------------------------------------------------------------------------------------------------------
Papa John's Davis AIM Templeton Aim
Common New York Constellation Foreign Value
Stock Venture Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Investments at fair value:
Common Stock:
Papa John's International, Inc. $100,560 $ - $ - $ - $ -
Mutual funds:
Davis New York Venture Fund - 179,736 - - -
AIM Constellation Fund - - 1,089,075 - -
Templeton Foreign Fund - - - 319,528 -
AIM Value Fund - - - - 1,090,724
Quest for Value Opportunity Fund - - - - -
American Balanced Fund - - - - -
Bond Fund of America - - - - -
AIM Money Market Fund - - - - -
Participant loans - - - - -
-------------------------------------------------------------------
Total investments 100,560 179,736 1,089,075 319,528 1,090,724
Contributions receivable
from participants 9,580 14,272 41,394 11,973 37,227
-------------------------------------------------------------------
Net assets available for benefits $110,140 $194,008 $1,130,469 $331,501 $1,127,951
===================================================================
</TABLE>
<TABLE>
<CAPTION>
Fund Information
- --------------------------------------------------------------------------------------------
Quest for Value American AIM Money
Opportunity Balanced Bond Fund Market
Fund Fund of America Fund
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments at fair value:
Common Stock:
Papa John's International, Inc. $ - $ - $ - $ -
Mutual funds:
Davis New York Venture Fund $ - $ - $ - $ -
AIM Constellation Fund $ - $ - $ - $ -
Templeton Foreign Fund $ - $ - $ - $ -
AIM Value Fund $ - $ - $ - $ -
Quest for Value Opportunity Fund $663,055 $ - $ - $ -
American Balanced Fund - 322,633 - -
Bond Fund of America - - 240,613 -
AIM Money Market Fund - - - 252,829
Participant loans - - - -
------------------------------------------------------
Total investments 663,055 322,633 240,613 252,829
Contributions receivable
from participants 22,104 13,441 10,157 14,753
------------------------------------------------------
Net assets available for benefits $ 685,159 $336,074 $250,770 $267,582
======================================================
Participant
Loans Total
---------------------------
<C> <C>
Assets
Investments at fair value:
Common Stock:
Papa John's International, Inc. $ - $ 100,560
Mutual funds:
Davis New York Venture Fund - 179,736
AIM Constellation Fund - 1,089,075
Templeton Foreign Fund - 319,528
AIM Value Fund - 1,090,724
Quest for Value Opportunity Fund - 663,055
American Balanced Fund - 322,633
Bond Fund of America - 240,613
AIM Money Market Fund - 252,829
Participant loans 100,172 100,172
-------------------------
Total investments 100,172 4,358,925
Contributions receivable
from participants - 174,901
-------------------------
Net assets available for benefits $100,172 $4,533,826
=========================
</TABLE>
See accompanying notes.
3
<PAGE>
Papa John's International, Inc. 401(k) Plan
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
Fund Information
- -------------------------------------------------------------------------------------------------------
AIM Templeton AIM Quest for Value
Constellation Foreign Value Opportunity
Fund Fund Fund Fund
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments at fair value:
Mutual funds:
AIM Constellation Fund $590,366 $ - $ - $ -
Templeton Foreign Fund - 251,053 - -
AIM Value Fund - - 527,428 -
Quest for Value Opportunity Fund - - - 391,215
American Balanced Fund - - - -
Bond Fund of America - - - -
AIM Money Market Fund - - - -
Participant loans - - - -
-----------------------------------------------------------------
Total investments 590,366 251,053 527,428 391,215
Contributions receivable
from participants 25,514 10,220 19,746 14,384
-----------------------------------------------------------------
Total assets 615,880 261,273 547,174 405,599
Liabilities
Excess contributions refundable
to participants 5,093 4,691 4,467 939
-------------------------------------------------------------------
Net assets available for benefits $ 610,787 $ 256,582 $542,707 $ 404,660
===================================================================
Fund Information
- ----------------------------------------------------------------------------------------
American AIM Money
Balanced Bond Fund Market Participant
Fund of America Fund Loans Total
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Investments at fair value:
Mutual funds:
AIM Constellation Fund $ - $ - $ - $ - $ 590,366
Templeton Foreign Fund - - - - 251,053
AIM Value Fund - - - - 527,428
Quest for Value Opportunity Fund - - - - 391,215
American Balanced Fund 207,704 - - - 207,704
Bond Fund of America - 166,076 - - 166,076
AIM Money Market Fund - - 126,068 - 126,068
Participant loans - - - 88,113 88,113
------------------------------------------------------------------------------------
Total investments 207,704 166,076 126,068 88,113 2,348,023
Contributions receivable
from participants 7,908 5,844 7,125 - 90,741
------------------------------------------------------------------------------------
Total assets 215,612 171,920 133,193 88,113 2,438,764
Liabilities
Excess contributions refundable
to participants 2,137 1,321 2,728 - 21,376
------------------------------------------------------------------------------------
Net assets available for benefits $ 213,475 $ 170,599 $130,465 $ 88,113 $2,417,388
====================================================================================
</TABLE>
See accompanying notes.
4
<PAGE>
Papa John's International, Inc. 401(k) Plan
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year Ended December 31, 1998
<TABLE>
<CAPTION>
Fund Information
---------------------------------------------------------------------------
Papa John's Davis AIM Templeton AIM
Common New York Constellation Foreign Value
Stock Venture Fund Fund Fund Fund
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ 20,635 $ 8,404 $ 122,989 $(46,092) $ 170,050
Interest and dividends 7 3,867 26,350 31,743 66,889
---------------------------------------------------------------------------
Net investment income 20,642 12,271 149,339 (14,349) 236,939
Contributions from participants 147,789 127,859 468,342 149,233 400,735
---------------------------------------------------------------------------
Total additions 168,431 140,130 617,681 134,884 637,674
Deductions from net assets attributed to:
Benefits paid to participants 84,371 3,583 84,306 22,376 58,170
Investment management fee (12) 22 543 220 388
---------------------------------------------------------------------------
Total deductions 84,359 3,605 84,849 22,596 58,558
---------------------------------------------------------------------------
Net increase prior to interfund transfers 84,072 136,525 532,832 112,288 579,116
Interfund transfers 26,068 57,483 (13,150) (37,369) 6,128
---------------------------------------------------------------------------
Net increase in net assets available for benefits 110,140 194,008 519,682 74,919 585,244
Net assets available for benefits at beginning
of year - - 610,787 256,582 542,707
---------------------------------------------------------------------------
Net assets available for benefits at end of year $110,140 $194,008 $1,130,469 $331,501 $1,127,951
===========================================================================
</TABLE>
<TABLE>
<CAPTION>
Fund Information
------------------------------------------------------
Quest for Value American AIM Money
Opportunity Balanced Bond Fund Market
Fund Fund of America Fund
------------------------------------------------------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ (1,039) $ (760) $ (5,737) $ -
Interest and dividends 36,746 27,986 13,201 7,750
------------------------------------------------------
Net investment income 35,707 27,226 7,464 7,750
Contributions from participants 254,183 155,587 109,742 164,818
------------------------------------------------------
Total additions 289,890 182,813 117,206 172,568
Deductions from net assets attributed to:
Benefits paid to participants 38,643 13,760 18,519 19,683
Investment management fee 283 161 167 368
------------------------------------------------------
Total deductions 38,926 13,921 18,686 20,051
------------------------------------------------------
Net increase prior to interfund transfers 250,964 168,892 98,520 152,517
Interfund transfers 29,535 (46,293) (18,349) (15,400)
------------------------------------------------------
Net increase in net assets available for benefits 280,499 122,599 80,171 137,117
Net assets available for benefits at beginning
of year 404,660 213,475 170,599 130,465
------------------------------------------------------
Net assets available for benefits at end of year $685,159 $336,074 $250,770 $267,582
======================================================
</TABLE>
<TABLE>
<CAPTION>
Participant
Loans Total
-------------------------
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ - $ 268,450
Interest and dividends 5,455 219,994
------------------------
Net investment income 5,455 488,444
Contributions from participants - 1,978,288
------------------------
Total additions 5,455 2,466,732
Deductions from net assets attributed to:
Benefits paid to participants 4,743 348,154
Investment management fee - 2,140
------------------------
Total deductions 4,743 350,294
------------------------
Net increase prior to interfund transfers 712 2,116,438
Interfund transfers 11,347 -
------------------------
Net increase in net assets available for benefits 12,059 2,116,438
Net assets available for benefits at beginning
of year 88,113 2,417,388
------------------------
Net assets available for benefits at end of year $100,172 $4,533,826
========================
</TABLE>
See accompanying notes.
<PAGE>
Papa John's International, Inc. 401(k) Plan
Notes to Financial Statements
December 31, 1998 and 1997
1. Description of Plan
Papa John's International, Inc. (the "Company") established the Papa John's
International, Inc. 401(k) Plan (the "Plan") on October 1, 1995. The Plan is a
defined contribution plan available to all employees of the Company, and its
subsidiaries, who have attained the age of twenty-one, completed one year of
service and who work at least 1,000 hours annually. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Participants may voluntarily elect to contribute up to 15% of their annual
eligible wages to their account within the Plan. The Company may, at its
discretion, make matching or profit sharing contributions to the Plan. No such
Company contributions were made during 1998 or 1997.
The contributions are allocated among eight alternative mutual funds and Company
common stock at the direction of the participant. Each fund's investment income
or loss, less any investment management fees, is allocated to participant
accounts based on their proportionate interest in the fund. The value of
participant accounts will fluctuate with the market value of the securities in
which the fund is invested. The contributions and the earnings on those
contributions are immediately vested to the participant and are payable upon
retirement, death or disability, termination of employment, or earlier for
hardship reasons. Participants may also borrow from their account through
participant loans. The Summary Plan Description provides for a more complete
description of the Plan's provisions.
Certain Plan administrative expenses are paid by the Company.
2. Significant Accounting Policies
Investments
Mutual funds are stated at fair value as determined by quoted market prices.
Papa John's International, Inc. common stock is stated at fair value as
determined by the last reported sales price on the last business day of the plan
year. Participant loans are stated at an
6
<PAGE>
2. Significant Accounting Policies (continued)
estimated fair value based on their outstanding balances.
Contributions from Participants
Contributions from participants are recorded when the Company makes payroll
deductions. Contributions receivable from participants represent amounts
collected from participants that have not yet been deposited into the
participants' individual accounts.
Excess Contributions Refundable to Participants
The Plan is subject to certain contribution limits for highly-compensated
participants as defined by the Internal Revenue Code (the "IRC"). Calculations
performed subsequent to the Plan year-end indicated that excess contributions
refundable to participants amounted to $21,376 as of December 31, 1997. There
were no excess contributions refundable to participants as of December 31, 1998.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan's management to make estimates and
assumptions that affect the amounts reported in these financial statements and
accompanying notes. Actual results could differ from those estimates.
3. Investments
During the year ended December 31, 1998, the Plan's investments (including
investments bought, sold, as well as held during the year) appreciated in fair
value as follows:
<TABLE>
<CAPTION>
<S> <C>
Investments at fair value as determined by quoted market price:
Papa John's International, Inc. common stock $ 20,635
Mutual funds 247,815
----------
$ 268,450
===========
</TABLE>
4. Tax Status
The Company amended the Plan effective January 1, 1998. The Plan is in the
process of applying for a determination letter from the Internal Revenue Service
stating that the Plan, as amended, is qualified under Section 401(a) of the
Internal Revenue Code (the "Code"). However, the Plan Administrator believes
that the Plan is qualified and, therefore, the related trust is exempt from
taxation.
7
<PAGE>
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants are completely vested with respect to the balance of
their account.
6. Year 2000 Issue (unaudited)
The Company has determined that it will be necessary to take certain steps in
order to ensure that the Plan's information systems are prepared to handle year
2000 dates. The Company is taking a two phase approach. The first phase
addresses internal systems that must be modified or replaced to function
properly. Both internal and external resources are being utilized to replace or
modify existing software applications, and test the software and equipment for
the year 2000 modifications. The Company anticipates substantially completing
this phase of the project by September 1999. The Company will pay for the costs
related to the year 2000 project which are believed to be immaterial to its
financial position.
For the second phase of the project, the Company is querying its significant
vendors with respect to year 2000 issues. Based on the responses received from
approximately 75% of the vendors, the Company is not aware of any vendors with a
year 2000 issue that would materially impact the operations of the Plan.
However, the Company has no means of ensuring that vendors will be year 2000
ready. The inability of vendors to complete their year 2000 resolution process
in a timely fashion could materially impact the Plan, although the actual impact
of non-compliance by vendors is not determinable.
8
<PAGE>
Schedules
<PAGE>
Papa John's International, Inc. 401(k) Plan
EIN: 61-1203323, Plan Number: 001
Line 27a-Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
Description of
Investment, Including
Shares Held or Rate
Identity of Issue or Borrower of Interest Cost Current Value
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock:
Papa John's International, Inc. * 2,279 shares $ 79,793 $ 100,560
Mutual funds:
Davis New York Venture Fund 7,187 shares $ 170,955 $ 179,736
AIM Constellation Fund 35,684 shares 981,039 1,089,075
Templeton Foreign Fund 38,084 shares 385,498 319,528
AIM Value Fund 27,139 shares 921,899 1,090,724
Quest for Value Opportunity Fund 18,444 shares 636,585 663,055
American Balanced Fund 20,472 shares 322,527 322,633
Bond Fund of America 17,679 shares 242,484 240,613
AIM Money Market Fund 252,829 shares 252,829 252,829
--------------------------
Total Mutual Funds $3,913,816 $4,158,193
Participant Loans 8.75% - 10.5% per annum - 100,172
----------
Total Investments $4,358,925
==========
</TABLE>
* Represents party in interest to the Plan.
9
<PAGE>
Papa John's International, Inc. 401(k) Plan
EIN: 61-1203323, Plan Number: 001
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
Current Value
of Asset on
Purchase Transaction Net Gain
Description of Assets Price Selling Price Cost of Assets Date (Loss)
- ----------------------------------------------------------------------------------------------------------------------------------
Category (iii) - series of transactions in excess of 5 percent of plan assets
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Davis New York Venture Fund $173,685 $ -- $173,685 $173,685 $ --
-- 6,200 6,578 6,200 (378)
AIM Constellation Fund 485,633 -- 485,633 485,633 --
-- 136,099 126,942 136,099 9,157
Templeton Foreign Fund 159,339 -- 159,339 159,339 --
-- 76,465 76,308 76,465 157
AIM Value Fund 438,812 -- 438,812 438,812 --
-- 112,303 98,818 112,303 13,485
Quest for Value Opportunity Fund 307,541 -- 307,541 307,541 --
-- 71,300 65,797 71,300 5,503
American Balanced Fund 162,144 -- 162,144 162,144 --
-- 74,387 71,959 74,387 2,428
Bond Fund of America 110,741 -- 110,741 110,741 --
-- 43,628 44,279 43,628 (651)
AIM Money Market Fund 166,265 -- 166,265 166,265 --
-- 47,215 47,215 47,215 --
</TABLE>
There were no category (i), (ii), or (iv) transactions during 1998.
14
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrator has duly caused this annual report to be signed by the undersigned
hereunto duly authorized.
PAPA JOHN'S INTERNATIONAL, INC.,
401(K) PLAN
Date: June 25, 1999 By: /s/ E. Drucilla Milby
------------- ---------------------------------
E. Drucilla Milby
President, Chief Executive Officer
and Treasurer
10
<PAGE>
EXHIBIT 23
- ----------
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-48999) pertaining to the Papa John's International Inc.,
401(k) Plan of our report dated June 3, 1999, with respect to the financial
statements and schedules of Papa John's International, Inc. 401(k) Plan included
in this Annual Report (Form 11-K) for the year ended December 31, 1998.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Louisville, Kentucky
June 21, 1999
