Papa Johns 2011 Annual Report Download - page 2

Highlights of our 2011 results include:
 •Earningsperdilutedshareof$2.20,representinga22.2%
increaseover2010(excludingtheimpactofthefranchisee-
ownedBIBPcheesepurchasingentity).
 •NorthAmericancomparablesalesincreaseof3.4%,marking
theeighthconsecutiveyearofpositiveorevendomesticsystem-
widecomparablesales.
 •Internationalcomparablesalesincreaseof5.1%.
 •237networldwiderestaurantopenings,representingthehighest
numberofglobalnetrestaurantopeningsintenyears.
Weended2011withnearly3,900restaurantsin33countries.I
remainoptimisticaboutourgrowthprospects,aswestart2012with
1,500+unitsinourglobaldevelopmentpipeline,themajorityofwhich
arescheduledtoopenoverthenextsixyears.
Our international business also had a stellar
year in 2011,whichissignicantaswelooktointernationalasan
increasingcontributortoourfuturegrowth.Inadditiontorunningsolid
compsalesin2011,internationalshowedaverystrongimprovement
inprotabilityandascommied,isontracktoachieveprotability
in2012.Onthedevelopmentfront,internationalgrewitsbaseby
15.9%withtheopeningof113netnewrestaurantsin2011.Inshort,Iam
pleasedwiththedirectionofourinternationalbusinessaswecontinue
toaddfranchiseesandoperatorscommiedto“BeerIngredients,
BeerPizza.”andgrowingthebrandthePapaJohn’sway.
PapaJohn’shasbeenpragmaticinourapproachtogrowing
anddeliveringgoodreturnstoourshareholdersinanuncertain
environment,whilemaintainingsoundnancialdisciplineand
remainingcommiedtothecorevaluesofwhatmakeourcompany
great.Ourplanistocontinuethisdisciplinedgrowth,withaneven
sharpenedfocusonwhatwebelievearethreemainpillarsofthe
businessvitaltoourlong-termsuccess:Quality, Brandingand
Technology.
Quality is the hallmark of Papa John’s,andthe
bedrockonwhichIfoundedthecompanymorethan27yearsago.
Weareferventaboutqualityanditcontinuestoguideustodayin
everythingwedo.Asthecoreofourbusiness,itisanareathatwewill
continuetoinvestinandfocuson,including:
 •Ouroriginalhand-tosseddoughisstillmadefresh,neverfrozen.
 •Wecontinuetouseall-naturalsaucemadefrom
vine-ripenedtomatoes.
 •Ourcheeseisstillmadefrom100%mozzarella.
 •Wecontinuetouseothersuperior-qualityingredients,including
babyPapabellamushroomsandvegetablesfreshcutinour
restaurantsdaily.
Our Branding also reflects our passion for
quality.Thisincludescontinuingtoforgerelationshipswithhigh
qualitypartnersthatallowustotellour“BeerIngredients.Beer
Pizza.”storytowideraudiencesandatmuchhigherlevelsthanever
before.In2011,wecompletedthesecondyearofourthree-year
sponsorshipwiththeNFL,withPapaJohn’stheOcialPizzaofthe
NFLandtheSuperBowl.Wewererecentlyabletoenhancethis
aliationthroughanewpartnershipwithPepsiCo.Asoneofthe
NFL’slargestsponsors,PepsiCohasalreadybroughtusseveral
co-brandingopportunitiesthatallowustoleveragethispartnership
andreachmoreconsumersthaneverbefore.Movingforward,we
willcontinuetoseekoutindustry-leadingpartnerstohelpustellour
storyandgrowthebrand.
We also believe a strong Technology platform
is critical for our future success.Itiswiththatmindset
thatwelaunchedourAndroidappin2011,ontheheelsoflaunching
ourrevampedPapajohns.comonlineorderingsiteandiPhoneapp
in2010.TheseinvestmentshelpedPapaJohn’sachieverecord
onlineandmobilesalesin2011.Whetheracuing-edgewayfor
ourcustomerstoplacetheirorder,amoreadvancedwayforour
restaurantstoreceivethatorder,oramoreecientwaytodeliver
theorder,wewillcontinuetoinvestintechnologytobestposition
ouroperatorstogrowtheirbusinessbyexceedingtheexpectations
oftoday’stechnology-savvyconsumer.
Ithankeachofyouforyourcontinuedsupportin2011,andmost
importantlyourcustomersfortheirpatronage.Witharm
commitmenttosharedsuccess,IbelievePapaJohn’shasgreat
potentialforgrowthandprosperityin2012andbeyondastogether
wecontinuetodeliveronour“BeerIngredients.BeerPizza.”
brandpromisewithasuperior-qualityproductandworld-class
customerservicearoundtheworld.
To Our Shareholders, Franchisees,
Supply Partners and Team Members:
Thistimelastyear,Iwrotetoyouaboutmyoptimisminourbrandandcompanyinatimeofcontinued
economicuncertainty.Iampleasedtoreportthatyourcompanydeliveredoutstandingresultsin2011
againstthatbackdrop.Inaddition,PapaJohn’sbegins2012inaverystrongposition,inwhatcontinues
tobeachallengingcompetitiveandcostenvironment.
John H. Schnaer
Founder, Chairman and
Chief Executive Office