Papa Johns 2009 Annual Report Download - page 53

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46
impact of VIEs, prior to required consolidating eliminations, on our consolidated statements of income
for the years ended December 28, 2008 and December 30, 2007 (in thousands):
BIBP Franchisees Total BIBP Franchisees Total
Variable interest entities
restaurant sales -$ 8,328$ 8,328$ -$ 7,131$ 7,131$
BIBP sales 165,449 - 165,449 138,233 - 138,233
Total revenues 165,449 8,328 173,777 138,233 7,131 145,364
Operating expenses 173,851 7,966 181,817 170,665 6,526 177,191
General and administrative expenses 187 378 565 148 308 456
Gain from the franchise cheese-
purchasing program, net of
minority interest - - - (1,615) - (1,615)
Other general expense (income) - (89) (89) - 243 243
Depreciation and amortization - 73 73 - 54 54
Total costs and expenses 174,038 8,328 182,366 169,198 7,131 176,329
Operating loss (8,589) - (8,589) (30,965) - (30,965)
Interest expense (1,951) - (1,951) (744) - (744)
Loss before income taxes
(10,540)
$
-
$
(10,540)
$
(31,709)
$
-
$
(31,709)
$
Year Ended December 28, 2008 Year Ended December 30, 2007
Summary of Operating Results
Total revenues, which increased 6.4% to $1.13 billion in 2008 compared to $1.06 billion in 2007,
primarily consisted of the following:
•
Domestic Company-owned restaurant revenues increased $28.9 million reflecting an increase in
comparable sales results of 1.7% and a 3.4% increase in equivalent units as compared to 2007.
The increase in equivalent units was due to the acquisition of restaurants from franchisees during
the third quarter of 2007, partially offset by the divestiture of restaurants to franchisees during
the fourth quarter of 2008.
•
Franchise royalties increased $4.4 million, or 8.0%, in 2008 primarily due to the increase in the
royalty rate from 4.0% to 4.25% for the majority of domestic franchise restaurants effective at
the beginning of 2008. Comparable sales increased 0.6% in 2008.
•
Franchise and development fees decreased $3.2 million resulting from fees collected from the
franchise renewal program in the fourth quarter of 2007. Additionally, there were fewer
franchise openings during 2008 and a lower average fee per opening due to the existence of
certain development incentive programs.
•
Domestic commissary sales increased $30.0 million, or 7.5%, due to increases in the prices of
certain commodities, including cheese and wheat. The commissary charges a fixed-dollar markup
on its cost of cheese, and cheese cost is based upon the BIBP block price, which increased from
an average of $1.45 per pound in 2007 to an average of $1.81 per pound in 2008 or a 24.8%
increase. The cost of wheat, as measured on domestic commodity markets, increased
approximately 43% in 2008 as compared to 2007.
•
International revenues increased $7.5 million, or 24.2%, reflecting the increase in both the
number and average unit volumes of our Company-owned and franchised restaurants over the
past year.