Papa Johns 2005 Annual Report Download - page 35

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33
Diluted earnings per share from continuing operations before cumulative effect of a change in accounting
principle were $1.29 (including an $0.08 per share gain from the consolidation of BIBP) in 2005,
compared to $0.58 (including a $0.42 per share loss from the consolidation of BIBP) in 2004. In
December 1999, we began a repurchase program for our common stock. Through December 25, 2005, an
aggregate of $495.9 million of shares have been repurchased (representing 34.7 million shares, at an
average price of $14.29 per share, as adjusted for the two-for-one common stock split effective
subsequent to year-end). The share repurchase activity during 2005 increased earnings per share from
continuing operations by approximately $0.04.
Review of Operating Results
Revenues. Domestic Company-owned restaurant sales increased 5.3% to $434.5 million in 2005, from
$412.7 million for the comparable period in 2004. The 5.3% increase is primarily due to a comparable
sales increase of 7.4% in 2005, partially offset by a decrease in equivalent company-owned units due to
the sale of 84 restaurants at the beginning of the fourth quarter of 2005. “Equivalent units” represents the
number of restaurants open at the beginning of a given period, adjusted for restaurants opened, closed,
acquired or sold during the period on a weighted average basis.
Variable interest entities restaurant sales include restaurant sales for franchise entities to which we have
extended loans that qualify as VIEs. We began consolidating the operating results of these entities in the
second quarter of 2004. Beginning in the second quarter of 2005, one of the franchise entities with 19
restaurants and annual revenues approximating $12.0 million, sold its restaurants to a third party.
Accordingly, beginning in the second quarter of 2005, we were no longer required to consolidate the
operating results of these 19 restaurants.
Domestic franchise sales increased 6.2% to $1.38 billion in 2005, from $1.30 billion for the comparable
period in 2004 primarily resulting from a 4.3% increase in comparable sales, and an increase in
equivalent units during 2005. Domestic franchise royalties increased 4.0% to $52.3 million from $50.3
million for the comparable period in 2004 primarily due to an increase in franchise sales, partially offset
by an increase in waivers granted to certain franchisees.
The comparable sales base and average weekly sales for 2005 and 2004 for domestic Company-owned
and domestic franchised restaurants consisted of the following:
Company-owned Franchised Company-owned Franchised
Total domestic units (end of period) 502 2,097 568 1,997
Equivalent units 550 2,008 563 1,984
Comparable sales base units 540 1,885 549 1,892
Comparable sales base percentage 98.2% 93.9% 97.5% 95.4%
Average weekly sales - comparable units $15,283 $13,451 $14,172 $12,733
Average weekly sales - other units $10,805 $10,080 $10,880 $10,378
Average weekly sales - all units $15,199 $13,245 $14,089 $12,623
December 25, 2005 December 26, 2004
Year Ended Year Ended
Domestic franchise and development fees increased to $3.0 million for 2005, including approximately
$850,000 recognized upon development cancellation or franchise renewal and transfer, from $2.5 million
for the same period in 2004, including approximately $590,000 recognized upon development
cancellation or franchise renewal and transfer. There were 101 domestic franchise unit openings in 2005
compared to 97 in 2004.