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EXHIBIT 99.1
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CONTACT:
Dru Milby
Chief Financial Officer
502-261-4942
PAPA JOHN'S ANNOUNCES NOVEMBER COMPARABLE SALES
AND REVISED EARNINGS ESTIMATES AND RESTAURANT
OPENINGS FOR 4Q, FULL-YEAR 2000 AND 2001
Louisville, KY (December 12, 2000) - Papa John's International, Inc. (Nasdaq:
PZZA) today announced that systemwide comparable sales for the four weeks ended
November 19, 2000 increased 1.9%, comprised of a 4.0% increase at company-owned
restaurants and a 1.2% increase at franchised restaurants.
The Company also announced a downward revision to its projected earnings per
share for the fourth quarter ending December 31, 2000, from $0.69-$0.70 to
$0.47-$0.51, before a special one-time charge described below. Full-year 2000
earnings per share are now expected to be in the range of $1.90 to $1.93, before
the special charge and previously announced advertising litigation related
costs, as compared to the Company's previous estimate of $2.12. The Company
expects 115 to 125 new restaurant openings for the fourth quarter (versus its
previous target of 130 openings), for a total of 365 to 375 new restaurant
openings for full-year 2000.
The Company cited several factors contributing to its downward revisions for the
quarter: (1) among its franchisees, lower than expected comparable sales, fewer
and later than expected restaurant openings and a higher than expected number of
restaurant closings, which combined to negatively impact franchise fees,
royalties and commissary and equipment earnings for the quarter; and (2) at its
company-owned restaurants, lower operating margins resulting principally from
higher than expected labor and energy related costs. In addition, the previously
planned disposition of certain company-owned restaurants at a gain may not occur
during the fourth quarter, and the cost of restaurant relocations during the
quarter may exceed amounts previously expected.
The Company is continuing to evaluate the impact of these trends, and additional
investment initiatives in its people and franchise system, on 2001 growth and
earnings estimates. However, the Company currently expects that both restaurant
openings and EPS for 2001 will decline by up to 20% from previously announced
2001 estimates of 340 to 360 new company and franchised restaurants and EPS of
$2.40 to $2.50. The Company will provide additional information regarding 2001
expectations when
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available, currently expected to be at the time of the Company's fourth quarter
earnings release planned for February 27, 2001.
The Company also announced that it will take a predominantly non-cash special
charge of $10 to $14 million during the fourth quarter ending December 31, 2000.
The charge will include certain items under Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-lived Assets and for
Long-lived Assets to be Disposed of," related to: the impairment of a select
number of underperforming restaurants, some of which may be closed or sold; the
planned closure of 20 field operations offices; and the write-down of certain
surplus or obsolete assets, including certain technology assets. The special
charge also includes the write-down of a note receivable to its current
estimated realizable value.
At December 11, 2000, there were 2,548 Papa John's restaurants (634
company-owned and 1,914 franchised) operating in 49 states and ten international
markets. Papa John's also owns or franchises 205 Perfect Pizza restaurants (7
company-owned and 198 franchised) in the United Kingdom. For more information
about the Company, visit Papa John's at HTTP://WWW.PAPAJOHNS.COM.
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 uncertainties associated with litigation,
including additional unforeseen costs, expenses or damages which may be incurred
with respect to the pending litigation with Pizza Hut, Inc.; the ability of the
Company and its franchisees 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 countries in which the company
or its franchisees operate; 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.
