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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2006 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _____________________ to _______________________
Commission File Number: 0-21660
PAPA JOHN’S INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 61-1203323
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2002 Papa Johns Boulevard
Louisville, Kentucky 40299-2334
(Address of principal executive offices)
(502) 261-7272
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
(Title of Each Class) (Name of each exchange on which registered)
Common Stock, $.01 par value The NASDAQ Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. Yes [X] No [ ]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of
the Act. Yes [ ] No [X]
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

Table of contents

  • Page 1
    ...incorporation or organization) 61-1203323 (I.R.S. Employer Identification No.) 2002 Papa Johns Boulevard Louisville, Kentucky 40299-2334 (Address of principal executive offices) (502) 261-7272 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of...

  • Page 2
    ... check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] The aggregate market value of the common stock held by non-affiliates of the Registrant, computed by reference to the closing sale price on The NASDAQ Stock Market as of the last business day...

  • Page 3
    ... Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial...

  • Page 4
    ... (referred to as "Perfect Pizza" and "Papa John's UK") in 1999 as part of our plan to develop restaurants internationally (see "Development"). In March 2006, the Company sold its Perfect Pizza operations, consisting of the franchised units and related distribution operations. At December 31, 2006...

  • Page 5
    ... resources to provide Papa John's franchisees with assistance in restaurant operations, management training, team member training, marketing, site selection and restaurant design. We also provide significant assistance to licensed international QC Centers in sourcing high-quality suppliers located...

  • Page 6
    ... are partners in two domestic joint ventures operating Papa John's restaurants and may consider entering into more of these arrangements in the future. We implemented a "buy and build" strategy in one large metropolitan market in late 2005. Under this strategy, the Company will purchase franchised...

  • Page 7
    ..., lower training and labor costs, increased efficiency and improved consistency and quality of food products. The typical interior of a Papa John's restaurant has a vibrant color scheme, and includes a bright menu board, custom counters and a carryout customer area. The counters are designed to...

  • Page 8
    ... and consistency, while lowering food costs. Our full-service QC Centers are located in Louisville, Kentucky; Dallas, Texas; Pittsburgh, Pennsylvania; Orlando, Florida; Raleigh, North Carolina; Denver, Colorado; Rotterdam, New York; Portland, Oregon; Des Moines, Iowa; and Phoenix, Arizona. The QC...

  • Page 9
    ... explore additional cross-marketing opportunities with third-party companies. We have developed a system by which domestic Papa John's restaurant customers in areas we service are able to place orders online via the internet, including a new "plan ahead ordering" advance ordering feature and Spanish...

  • Page 10
    ... traditional Papa John's restaurants. This enables Papa John's to offer nationwide online ordering to our customers. Reporting. Management at Company-owned restaurants reviews and evaluates daily reports of sales, cash deposits and operating costs. Physical inventories of all food and beverage...

  • Page 11
    ... the applicant's business background, restaurant operating experience and financial resources. We seek franchisees to enter into development agreements for single or multiple restaurants. We require the franchisee either to complete our training program or to hire a full-time operator who completes...

  • Page 12
    ... full business time and efforts to the operation of the franchisee's restaurants. Each franchised restaurant manager is also required to complete our Companycertified management training program. Domestically, we provide an on-site training team three days before and three days after the opening of...

  • Page 13
    ... with respect to price, service, location, food quality and variety. There are well-established competitors with substantially greater financial and other resources than Papa John's. Competitors include international, national and regional chains, as well as a large number of local independent...

  • Page 14
    ... increases in minimum wage rates, could adversely affect Papa John's as well as the restaurant industry. As we expand internationally, we will be subject to applicable laws in each jurisdiction where franchised units are established. Trademarks Our rights in our principal trademarks and service...

  • Page 15
    ... expansion or continue to operate in existing markets profitably. 2. The restaurant industry is intensely competitive with respect to price, service, location and food quality, and there are many well-established competitors with substantially greater financial and other resources than the Papa John...

  • Page 16
    ... wage increases above federal wage rates will increase labor costs for our system-wide operations. Additionally, labor shortages in various markets could result in higher required wage rates. Local government agencies have also implemented ordinances which restrict the sale of certain food products...

  • Page 17
    ...015 Papa John's restaurants system-wide. Company-owned Papa John's Restaurants Number of Restaurants Arizona...Florida...Georgia...Illinois ...Indiana...Kentucky...Maryland...Missouri ...New Jersey...New Mexico...North Carolina ...Ohio...Pennsylvania...South Carolina ...Tennessee...Texas...Virginia...

  • Page 18
    Domestic Franchised Papa John's Restaurants Number of Restaurants Alabama...Arizona ...Arkansas ...California...Colorado ...Connecticut...Delaware...Florida ...Georgia ...Idaho...Illinois...Indiana ...Iowa ...Kansas ...Kentucky...Louisiana ...Maine...Maryland...Massachusetts...Michigan...Minnesota ...

  • Page 19
    ... require us to pay all or a portion of the cost of insurance, taxes and utilities. Certain leases further provide that the lease payments may be increased annually, with a small number of escalations based on changes in the Consumer Price Index. Approximately 45 Company-owned restaurants are located...

  • Page 20
    ... Louisville QC Center operation and promotional division. The remainder of the building houses our corporate offices. The Papa John's UK management team is located in 6,000 square feet of leased office space near London with a remaining lease term of nine years. The Papa John's China management team...

  • Page 21
    ..., International Senior Vice President, General Counsel and Secretary Senior Vice President, Chief Financial Officer and Treasurer Senior Vice President and President - PJ Food Service, Inc. Senior Vice President, People Senior Vice President, Domestic Operations Senior Vice President, Development...

  • Page 22
    ... for company and franchise operations as well as Popeye's related acquisitions. From 1993 to 1996, he served as Vice President of Operations for RTM Restaurant Group. Timothy C. O'Hern rejoined Papa John's in early 2005 as Senior Vice President, Development, after spending two years managing the...

  • Page 23
    ... as President, USA since May 2006, responsible for domestic corporate and franchised restaurant operations. Mr. Van Epps served as Senior Vice President and Chief Operations Officer from 2004 to 2006 and Managing Director, International from September 2001 to 2004. Prior to joining Papa John's, Mr...

  • Page 24
    ... our repurchase activity by fiscal period during 2006 (in thousands, except per-share amounts): Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs 34,758 34,821 35,416 35,637 35,844 36,344 36,561 36,689 36,725 36,725 37,053 38,105 Maximum Dollar Value of Shares that May...

  • Page 25
    ... return of the Company's Common Stock to the NASDAQ Stock Market (U.S.) Index and a group of the Company's peers consisting of U.S. companies listed on NASDAQ with standard industry classification (SIC) codes 5800-5899 (eating and drinking places). Relative performance is compared for the five-year...

  • Page 26
    ... sales Other sales International revenues: Royalties and franchise and development fees (4) Restaurant and commissary sales (5) Total revenues Operating income (6) Investment income Interest expense Income from continuing operations before income taxes and cumulative effect of a change in accounting...

  • Page 27
    ... by Company-owned restaurants, franchise royalties, sales of franchise and development rights, sales to franchisees of food and paper products, printing and promotional items, risk management services, and information systems and related services used in their operations. New unit openings in 2006...

  • Page 28
    ... the sale to our domestic and international franchisees of food and paper products, printing and promotional items, risk management services and information systems equipment and software and related services by us. We believe that, in addition to supporting both Company and franchised growth, these...

  • Page 29
    ... occurred in March 2006, we have restructured management and developed plans for PJUK to improve its future operating results. The plans include efforts to increase Papa John's brand awareness in the United Kingdom and increase net PJUK franchised unit openings over the next several years. We will...

  • Page 30
    ... 48). FIN 48 addresses the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. In addition, FIN 48 expands the disclosure requirements concerning unrecognized tax benefits as well as any...

  • Page 31
    ... Franchise and development fees Commissary sales Other sales International revenues: Royalties and franchise and development fees Restaurant and commissary sales Total revenues Costs and expenses: Domestic Company-owned restaurant cost of sales (1) Domestic Company-owned restaurant operating...

  • Page 32
    ... year's comparable restaurant base Average sales for Company-owned restaurants included in the most recent comparable restaurant base Papa John's Restaurant Progression: U.S. Company-owned: Beginning of period Opened Closed Acquired from franchisees Sold to franchisees End of period International...

  • Page 33
    ... (increase) in the "Domestic Company-owned restaurant expenses - cost of sales" line item. This approach effectively reports cost of sales for Company-owned restaurants as if the purchasing arrangement with BIBP did not exist and such restaurants were purchasing cheese at the spot market prices...

  • Page 34
    ... consolidate the operating results as well as the financial position of this entity. The sale of these 26 restaurants and related loan write-off did not have any significant impact on Papa John's 2006 and 2005 consolidated statements of income. The consolidation of the applicable franchise entities...

  • Page 35
    ... of lower year-over-year cheese costs. Domestic franchise royalties increased $4.1 million due to a 2.9% increase in comparable sales and additional equivalent units in 2006. International revenues increased $4.8 million primarily as a result of additional Company-owned restaurants located in the...

  • Page 36
    ... million related to the 53rd week of operations. The increase was primarily due to fixed-cost leverage and related margin improvement associated with a 3.6% increase in comparable sales and lower commodity costs (primarily cheese). The acquisition of 57 Papa John's restaurants, substantially all of...

  • Page 37
    ... income for the "All others" reporting segment increased approximately $1.3 million primarily due to improved operating results from our insurance agency and online ordering businesses and our partnership development activities. The 53rd week of operations in 2006 did not have a significant impact...

  • Page 38
    ... shares, at an average price of $15.80 per share). Share repurchase activity during 2006 increased earnings per diluted share from continuing operations by approximately $0.09. Review of Operating Results Revenues. Domestic Company-owned restaurant sales increased 3.1% to $447.9 million in 2006...

  • Page 39
    ..., primarily due to increased volumes. Other sales, which includes our online and print and promotions businesses, as well as our insurance agency operations, were $50.5 million for both the 2006 and 2005 periods. International revenues, which exclude the Perfect Pizza operations that were sold in...

  • Page 40
    ... in 2006 was primarily attributable to the following: Increase (Decrease) Equity compensation and executive performance unit incentive plan Employee benefits costs Marketing for non-traditional restaurant initiatives Development of international support infrastructure Domestic operations field...

  • Page 41
    ... accounts and notes receivable Pre-opening costs Contribution to Marketing Fund Goodwill impairment Closing of the Jackson, MS commissary Gain on sale of domestic Company-owned restaurants Other Total minority interests and other general expenses $ 1.6 $ 1.7 0.9 0.5 (0.3) 4.4 $ 2005 Increase...

  • Page 42
    ...the years ended December 25, 2005 and December 26, 2004 (in thousands, except per share data): 2005 Net sales Operating expenses G&A expenses Other expenses Income before income taxes Income tax expense Net income from discontinued operations Basic earnings per common share Earnings per common share...

  • Page 43
    ... insurance program. In addition, variable interest entities restaurant sales declined $2.7 million due to the sale of one of the previously consolidated franchise entities to a third party as of the beginning of the second quarter of 2005. Our income from continuing operations before income taxes...

  • Page 44
    ... an increased level of stock option exercises and an increase in the employer portion of FICA taxes paid on employee tips and increased health insurance costs. The Company made a discretionary contribution of $1.8 million to the Papa John's Marketing Fund to fund an additional national television...

  • Page 45
    ... 2004, primarily as a result of a decrease in revenues associated with insurance-related services provided to franchisees. International revenues consist primarily of the PJUK continuing operations, denominated in British Pounds Sterling and converted to U.S. dollars (approximately 74% of total 2005...

  • Page 46
    ....0 million or 7.7% of revenues for 2004. The increase in 2005 was primarily attributable to the previously mentioned increases in unallocated corporate expenses, including bonuses paid to corporate and restaurant management, equity compensation expense, employee benefits costs and professional fees...

  • Page 47
    ... FICA tax credits associated with an increase in the employer portion of FICA taxes paid on employee tips, which is reported in general and administrative expenses. Liquidity and Capital Resources Our debt is comprised of the following (in thousands) at year-end: 2006 Revolving line of credit Debt...

  • Page 48
    ...-noted increases in operating income from continuing operations, net of income taxes, favorable working capital changes, including income taxes, accounts receivable and prepaid expenses, and the tax benefit related to the exercise of nonqualified stock options. During 2006, we acquired 65 Papa John...

  • Page 49
    ... costs substantially offset incremental unit level income. In the fourth quarter of 2005, Star Papa, our 51% owned joint venture operating Papa John's restaurants in Texas, completed the acquisition of six independently owned franchised Papa John's restaurants located in the Austin, Texas area...

  • Page 50
    ...China, as well as technical support assets for numerous areas of the business, including the online ordering function. In addition to the above-mentioned planned capital expenditures, we may consider additional domestic and international acquisitions to accelerate growth of Papa John's branded units...

  • Page 51
    ... developments by food industry competitors; the ability of the Company and its franchisees to meet planned growth targets and operate new and existing restaurants profitably; increases in or sustained high cost levels of food, paper, utilities, fuel, employee compensation and benefits, insurance...

  • Page 52
    self-insured coverage or within the captive franchise insurance program could have a significant impact on our operating results. Additionally, domestic franchisees are only required to purchase seasoned sauce and dough from our QC Centers and changes in purchasing practices by domestic franchisees ...

  • Page 53
    ... as a reduction (increase) in the "Domestic Company-owned restaurant expenses - cost of sales" line item, thus reflecting the actual market price of cheese had the purchasing arrangement not existed. The consolidation of BIBP had a significant impact on our operating results in 2006, 2005 and 2004...

  • Page 54
    ... fluctuations and have differed significantly from previous projections using the futures market prices. Over the long term, we expect to purchase cheese at a price approximating the actual average market price and therefore we do not generally make use of financial instruments to hedge commodity...

  • Page 55
    ... financial statements of Papa John's International, Inc. and management's assessment of the effectiveness of our internal control over financial reporting. The reports of Ernst & Young LLP are contained in this Annual Report. /s/ Nigel Travis Nigel Travis President and Chief Executive Officer...

  • Page 56
    ... to Statement of Financial Accounting Standards No. 123(R), "Share-Based Payment". We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Papa John's International, Inc.'s internal control over financial reporting...

  • Page 57
    ...on management's assessment and an opinion on the effectiveness of the company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan...

  • Page 58
    ... sales Other sales International revenues: Royalties and franchise and development fees Restaurant and commissary sales Total revenues Costs and expenses: Domestic Company-owned restaurant expenses: Cost of sales Salaries and benefits Advertising and related costs Occupancy costs Other operating...

  • Page 59
    ...: Accounts payable Income and other taxes Accrued expenses Current portion of debt Total current liabilities Unearned franchise and development fees Long-term debt, net of current portion Other long-term liabilities Stockholders' equity: Preferred stock ($.01 par value per share; no shares issued...

  • Page 60
    Papa John's International, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity Common Stock Shares O utstanding 36,226 Additional Paid-In Capital $ 219,267 Accumulated O ther Comprehensive Retained Income (Loss) Earnings $ (3,116) $ 293,921 23,221 Total Treasury Stockholders' Stock...

  • Page 61
    ... discontinued operations Net cash used in investing activities Financing activities Net proceeds (repayments) from line of credit facility Net proceeds (repayments) from short-term debt - variable interest entities Payments on long-term debt Proceeds from issuance of common stock Excess tax benefit...

  • Page 62
    ... Company-owned restaurants, franchise royalties, sales of franchise and development rights, and sales to franchisees of food and paper products, printing and promotional items, risk management services, and information systems and related services used in their operations. 2. Significant Accounting...

  • Page 63
    ... comprised of food, promotional items, and supplies sales to franchised restaurants located in the United States and are recognized as revenue upon shipment of the related products to the franchisees. Information services, including software maintenance fees, help desk fees and online ordering fees...

  • Page 64
    2. Significant Accounting Policies (continued) Inventories Inventories, which consist of food products, paper goods and supplies, smallwares, and printing and promotional items, are stated at the lower of cost, determined under the first-in, first-out (FIFO) method, or market. Property and ...

  • Page 65
    ... incurred, as required by SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, generally expected to be at the time the closing occurs. There were no significant restaurant closure charges recorded in 2006, 2005 and 2004. Discontinued Operations The Company sold its...

  • Page 66
    ...'s net operating loss carryforward (none in 2006, see Note 15). Advertising and Related Costs Advertising and related costs include the costs of domestic Company-owned restaurant activities such as mail coupons, door hangers and promotional items and contributions to the Papa John's Marketing Fund...

  • Page 67
    .... SFAS No. 123(R) requires the benefit of tax deductions in excess of recognized compensation expense to be reported as a financing cash flow, rather than as an operating cash flow in the accompanying consolidated statements of cash flows. The $6.5 million excess tax benefit in 2006, classified as...

  • Page 68
    ... to our operating earnings for 2006, 2005 and 2004. Fair value is based on quoted market prices. See Note 9 for additional information on our debt and credit arrangements. Earnings per Share The calculations of basic earnings per common share and earnings per common share - assuming dilution...

  • Page 69
    ... 48). FIN 48 addresses the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. In addition, FIN 48 expands the disclosure requirements concerning unrecognized tax benefits as well as any...

  • Page 70
    ... assets, liabilities, noncontrolling interests and results of activities of a VIE in its consolidated financial statements. In general, a VIE is a corporation, partnership, limited liability company, trust, or any other legal structure used to conduct activities or hold assets that either (1) has an...

  • Page 71
    ... corporation. BIBP purchases cheese at the market price and sells it to our distribution subsidiary, PJ Food Service, Inc. ("PJFS"), at a fixed quarterly price based in part upon historical average market prices. PJFS in turn sells cheese to Papa John's restaurants (both Company-owned and franchised...

  • Page 72
    ... longer required to consolidate the operating results as well as the financial position of this entity. The sale of these 26 restaurants and related loan write-off did not have any significant impact on Papa John's 2006 and 2005 consolidated statements of income. The two remaining franchise entities...

  • Page 73
    ... purchase method of accounting, whereby operating results subsequent to the acquisition date are included in our consolidated financial statements. The goodwill associated with the above-mentioned acquisitions is eligible for deduction over 15 years under U.S. tax regulations. During 2004, Papa John...

  • Page 74
    ... of four franchise entities as required by FIN 46 (see Note 5). During 2005 and 2006, two of the franchise entities sold their restaurants to third parties; accordingly, we are no longer consolidating the entities and have reduced goodwill accordingly. The reduction in International goodwill in...

  • Page 75
    ... of 2005, we completed the sale of 84 Company-owned restaurants, with annual revenues approximating $53.0 million, in Colorado and Minnesota to a new franchise group, PJCOMN Acquisition Corporation ("PJCOMN"), an affiliate of Washington, DC based private equity firm Milestone Capital Management, LLC...

  • Page 76
    ...) 96,511 $ 2005 49,000 6,100 16 55,116 (6,100) 49,016 $ *The VIEs' third-party creditors do not have any recourse to Papa John's. In January 2006, we executed a five-year, unsecured Revolving Credit Facility ("New Credit Facility") totaling $175.0 million that replaced a $175.0 million Revolving...

  • Page 77
    ...There were no outstanding loans to the Marketing Fund at the end of 2006. Notes receivable bear interest at fixed or floating rates (with an average stated rate of 7.7% at December 31, 2006), and are generally secured by the fixtures, equipment, signage and, where applicable, land of each restaurant...

  • Page 78
    ..., a third-party commercial insurance company began providing fully-insured coverage to franchisees participating in the franchise insurance program. Accordingly, this new agreement eliminates our risk of loss for franchise insurance coverage written after September 2004. Our operating income will...

  • Page 79
    ...(in thousands): 2006 2005 19,896 $ 16,999 19,768 15,659 4,130 3,690 2,752 3,674 1,838 846 1,463 1,475 858 1,231 235 202 200 1,269 6,093 4,589 57,233 $ 49,634 Insurance reserves Accrued salaries, benefits and bonuses Rent Accrued purchases Consulting and professional fees Marketing Utilities Accrued...

  • Page 80
    ... tax net operating loss carryovers as of December 31, 2006 and December 25, 2005, respectively, for which a valuation allowance has been provided. The foreign tax net operating losses do not have an expiration date. Management believes it is more likely than not that the Company's future earnings...

  • Page 81
    ... to the Company were at or below rates that could have been obtained from independent third parties for similar aircraft. Mr. Schnatter paid the Company $160,000 in 2005 and $473,000 in 2004 for the salaries, bonuses and benefits of certain employees who perform work for both the Company and Mr...

  • Page 82
    ...operating leases, which have an average term of five years and provide for at least one renewal. Certain leases further provide that the lease payments may be increased annually based on the fixed rate terms or adjustable terms such as the Consumer Price Index. Papa John's UK, our subsidiary located...

  • Page 83
    ... $ We subleased 101 sites in 2006, 162 sites in 2005 and 157 sites in 2004 to our Papa John's and former Perfect Pizza franchisees located in the United Kingdom and received payments of $4.0 million, $5.1 million and $5.0 million, which are netted with international operating expenses. In addition...

  • Page 84
    ..., the Board of Directors of the Company adopted a Stockholder Protection Rights Agreement (the "Rights Plan"). Under the terms of the Rights Plan, one preferred stock purchase right was distributed as a dividend on each outstanding share of Papa John's common stock held of record as of the close of...

  • Page 85
    ... in 2005 and 2006 generally expire five years from the date of grant and vest over a 24-month period. All references in this paragraph to numbers of shares have been adjusted to reflect a two-for-one stock split effected in January 2006. We recorded stock-based employee compensation expense of...

  • Page 86
    ... stock to employees with a performance period of three years (there were no such grants in 2005 and 2004). The fair value of the restricted stock is based on the market price of the Company's shares on the grant date. The fair value of the restricted shares granted in 2006 was $32.65 per share...

  • Page 87
    .... Employee Benefit Plans We have established the Papa John's International, Inc. 401(k) Plan (the "401(k) Plan"), as a defined contribution benefit plan, in accordance with Section 401(k) of the Internal Revenue Code. The 401(k) Plan is open to all employees who meet certain eligibility requirements...

  • Page 88
    ...the related profit in consolidation. Our reportable segments are business units that provide different products or services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies. No single external customer accounted for...

  • Page 89
    ... taxes Domestic Company-owned restaurants (2) Domestic commissaries (3) Domestic franchising International (4) Variable interest entities (5) All others Unallocated corporate expenses (6) Elimination of intersegment losses (profits) Total income from continuing operations before income taxes 2006...

  • Page 90
    ... sales to the Six Flags, Inc. theme-park operator and the closing of the Jackson, Mississippi facility in 2005. The 2005 improvement is due to improved operating margin and lower administrative costs, partially offset by increased distribution costs as a result of higher fuel costs and the pre-tax...

  • Page 91
    ... United Kingdom, to support the accelerated development of both Company-owned and franchised Papa John's branded restaurants in our international markets. In addition, we incurred a $470,000 charge in 2006 related to a reorganization of one of our international operating units. (5) Represents BIBP...

  • Page 92
    ...quarter of 2006 increased pre-tax income approximately $3.5 million, or $0.07 per diluted share. Quarterly earnings per share on a full-year basis may not agree to the Consolidated Statements of Income due to rounding. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial...

  • Page 93
    ... code of ethics can be found on our web site, which is located at www.papajohns.com. Item 11. Executive Compensation The information required by this item is omitted because we are filing a definitive proxy statement pursuant to Regulation 14A not later than 120 days after the end of the fiscal year...

  • Page 94
    ... 2004 Notes to Consolidated Financial Statements (a)(2) Financial Statement Schedules: Schedule II - Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related...

  • Page 95
    ...the undersigned, thereunto duly authorized. Date: February 27, 2007 By: PAPA JOHN'S INTERNATIONAL, INC. /s/ Nigel Travis Nigel Travis President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons...

  • Page 96
    ...Papa John's International, Inc. and National City Bank, as Rights Agent. Exhibit 10.2 to our report on Form 10-K for the fiscal year ended December 29, 2002 is incorporated herein by reference. 3.2 3.3 4.1 4.2 4.3 4.4 10.1* Papa John's International, Inc. 1999 Team Member Stock Ownership Plan...

  • Page 97
    ... of January 13, 2006. Exhibit 10 to our Registation Statement on Form S8 (Registration No. 333-138427) dated November 3, 2006 is incorporated herein by reference. 10.11* Papa John's International, Inc. 1993 Stock Option Plan for Non-Employee Directors. Exhibit 10.3 to our quarterly report on Form 10...

  • Page 98
    ... 10.1 to our report on Form 8-K dated January 27, 2007. 10.23 $175,000,000 Revolving Credit Facility by and among Papa John's International, Inc., The Guarantors Party Hereto, RSC Insurance Services, Ltd., a Bermuda Company, The Banks Party Hereto, PNC Bank, National Association, as Administrative...

  • Page 99
    ... plan required to be filed as an exhibit pursuant to Item 15(c) of Form 10-K. The Exhibits to this Annual Report on Form 10-K are not contained herein. The Company will furnish a copy of any of the Exhibits to a stockholder upon written request to Investor Relations, Papa John's International...

  • Page 100
    Schedule II - Valuation and Qualifying Accounts Papa John's International, Inc. and Subsidiaries (In thousands) Charged to (recovered from) Costs and Expenses Classification Fiscal year ended December 31, 2006: Deducted from asset accounts: Reserve for uncollectible accounts receivable Reserve for ...