NPC International Inc., the largest Pizza Hut franchisee in the country with 1,153 restaurants in 28 states, has reported results for its third fiscal quarter ended Sept. 27, 2011.
Q3 highlights include:
- Comparable store sales increased 0.4 percent rolling over a strong increase of 10.9 percent last year;
- Adjusted EBITDA (reconciliation attached) of $21.5MM was $1.3MM lower than last year;
- Free cash flow (reconciliation attached) was $14.7MM, or 68 percent of Adjusted EBITDA;
- Cash balances were $66.3MM, an increase of $14.7MM from last quarter and debt remained unchanged;
- Net income of $3.5MM was flat with last year; and
- The company opened 13 net new units during the quarter.
Year-to-date highlights include:
- Comparable store sales decreased 2.5 percent rolling over a strong increase of 10.5 percent last year;
- Adjusted EBITDA (reconciliation attached) of $78.6MM was $2.3MM lower than last year;
- Free cash flow (reconciliation attached) was $50.7MM or 64 percent of Adjusted EBITDA;
- Cash balances increased by $22.1MM from last fiscal year end to $66.3MM and debt has been reduced by $29.7 million;
- Net income of $18.1MM was flat with last year; and
- The company opened 17 net new units to date.
"During the third quarter our comparable store sales strengthened from the first half of the year returning to positive territory despite rolling over very strong comparable store sales growth from the prior year," said Jim Schwartz, NPC's president and CEO.
The third quarter was buoyed by a lower-cost carry-out channel with the chain's "$10 Any" promotion, as well as the re-introduction of the $5 P'Zone.
Margins were negatively impacted by higher commodity costs and unfavorable mix changes associated with the $10 Any promotion. However, these increases were partially offset by improvements in the direct labor costs which improved due to reductions in store level wage structure associated with modifications in compensation policies.
The results were released a day after Bank of America announced it was selling the company to Olympus Partners.
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