John Schnatter, Founder and Chief Executive Officer, noted: “Before discussing our 2002 outlook, on behalf of the entire Papa John’s family, I extend my heartfelt sympathy to those who lost loved ones, friends or colleagues in the September 11th national tragedy. I am proud of the Papa John’s family – our franchisees, restaurant operators, corporate team members and supply partners – who have reached out to our fellow Americans by raising money for relief efforts and providing meals to blood donors, volunteers, police and fire officials and other brave rescue workers who have given selflessly in this time of need. Our thoughts and prayers remain with you as our nation unites to overcome this tragedy.”
In advance of upcoming meetings with investors and analysts, Papa John’s International, Inc. (Nasdaq: PZZA) yesterday announced its 2002 growth plans. In 2002, the company projects earnings in the range of $2.15 to $2.25 per share, based on the following:
- 150 to 200 restaurant openings (95 to 130 domestic franchise, 45 to 55 international franchise and 10 to 15 corporate restaurants).
- The potential closing of 50 to 100 restaurants, primarily domestic franchise units.
- Domestic system restaurant sales growth of 3% to 5%, including flat to 2% comparable sales growth.
- Corporate restaurant operating margin of 18.5% to 19.5%.
- Commissary, equipment and other operating margin of 9.5% to 10.0%.
- International system restaurant sales growth of 10% to 15%.
- An operating margin of 10% to 12% on its international operations (excluding royalties and franchise development fees).
- General and administrative expenses of 7.3% to 7.5% of revenues.
- Depreciation and amortization of 3.7% to 3.9% of revenues.
- Pre-opening and other general expenses of $2.5 to $3.0 million.
- Net interest expense of $5.0 to $5.5 million.
- An effective tax rate of approximately 37.8%.
- Capital expenditures of $38 to $40 million.
The earnings forecast for 2002 does not consider the impact of new accounting guidance that essentially eliminates the routine amortization of goodwill beginning in 2002, which is expected to increase earnings per share by $0.06 to $0.07 in 2002. The forecast also does not reflect the impact of any additional share repurchases which the company may undertake during the remainder of 2001, or 2002 if its Board of Directors determines to extend the company’s share repurchase program beyond the end of 2001.
At September 30, 2001, there were 2,722 Papa John’s restaurants (633 company-owned and 2,089 franchised) operating in 47 states and nine international markets. Papa John’s also owns or franchises 195 Perfect Pizza restaurants (3 company-owned and 192 franchised) in the United Kingdom. For more information about the company, visit Papa John’s at http://www.papajohns.com.
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect management’s expectations based upon currently available information and data; however, actual results are subject to future events and uncertainties, which could cause actual results to materially differ from those projected in these statements. Factors that can cause actual results to materially differ include: increased advertising, promotions and discounting by competitors which may adversely affect sales; the ability of the company and its franchisees to open new restaurants and operate new and existing restaurants profitably; increases in food, labor, utilities, employee benefits and similar costs; economic and political conditions in the countries in which the company or its franchisees operate; new product and concept developments by food industry competitors; and the uncertainties associated with litigation. Further information regarding factors that could affect the company’s financial and other results is included in the company’s Forms 10Q and 10K, filed with the Securities and Exchange Commission.