Papa Johns 2009 Annual Report Download - page 49

Download and view the complete annual report

Please find page 49 of the 2009 Papa Johns annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 118

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118

42
Diluted earnings per share were $2.06 in 2009 (including a $0.52 per share gain from the consolidation of
BIBP and a $0.04 gain from the finalization of certain income tax issues), compared to $1.30 per diluted
share in 2008 (including a $0.24 loss from the consolidation of BIBP, a $0.06 gain from the finalization
of certain income tax issues and a $0.20 loss from restaurant impairment and disposition losses). Since
the inception of the share repurchase program in 1999 through the end of 2009, an aggregate of $741.2
million of shares have been repurchased (representing 43.5 million shares, at an average price of $17.04
per share). Share repurchase activity during 2009 increased earnings per diluted share by approximately
$0.03 ($0.02 excluding the impact of the consolidation of BIBP).
Review of Operating Results
Revenues.
Domestic Company-owned restaurant sales were $503.8 million for 2009 compared to $533.3
million for 2008. The 5.5% decrease was primarily due to the sale of 62 Company-owned restaurants to
franchisees during the fourth quarter of 2008.
Variable interest entities restaurant sales include restaurant sales for franchise entities to which we have
extended loans that qualify as VIEs. Revenues from these restaurants totaled $37.7 million in 2009 as
compared to $8.3 million in 2008. During 2009, we began consolidating the financial results of two
additional franchise entities. We extended loans to these two entities in the fourth quarter of 2008 in
connection with our sale of Company-owned restaurants. As previously noted, beginning in 2010, we
will no longer consolidate the operating results of these franchise restaurant entities due to a change in
the accounting standards for variable interest entities.
Domestic franchise sales increased 3.5% to $1.55 billion in 2009, from $1.50 billion in 2008, primarily
resulting from an increase of 3.3% in equivalent units. The increase in equivalent units is due to the
franchise entities’ purchase of 62 restaurants from the Company during the fourth quarter of 2008.
Domestic franchise royalties increased 2.2% to $61.0 million in 2009 from $59.7 million for the
comparable period in 2008 primarily due to the increase in the royalty rate from 4.25% to 4.50% for the
last four months of 2009 and an increase in equivalent units.
Average weekly sales for comparable units include restaurants that were open throughout the periods
presented. The comparable sales base for Company-owned and franchised restaurants, respectively,
includes restaurants acquired by the Company or divested to franchisees, as the case may be, during the
previous twelve months. Average weekly sales for other units include restaurants that were not open
throughout the periods presented and include non-traditional sites. Average weekly sales for non-
traditional units not subject to continuous operation are calculated based upon actual days open.