Full-year and 4Q '02 numbers down at Papa John's

Feb. 25, 2003

LOUISVILLE, Ky. -- Papa John's International, Inc. (NASDAQ:PZZA) announced that revenues for the fourth quarter of 2002 ended Dec. 29, 2002, were $236.1 million, representing a decrease of 3.2 percent from revenues of $244 million for the same period in 2001.

According to a release, net income for the period was $11.1 million, compared to last year's $11.5 million. Diluted earnings per share (EPS) rose to 59 cents for the period, compared to 51 cents last year.

For the full year 2002, ended Dec., 29, revenues were $946.2 million, a drop of 3 percent from revenues of $975.1 million the year prior.

Net income for the period was $46.8 million, down slightly from $47.2 million in 2001. Diluted EPS, however, rose to $2.31 for the year, up from $2.08 in 2001.

For the fourth quarter, systemwide domestic comparable-store sales were down 2 percent (composed of a 0.4 percent increase at company-owned units and a 2.8 percent decrease at franchise units).

For the year, systemwide domestic comparable-store sales decreased 1.3 percent (composed of a 0.2 percent increase at company-owned restaurants and a 1.8 percent decrease at franchise units).

The company attributed the declines to the continuing competitive environment of the U.S. pizza industry.

The company's international system sales were a little brighter, increasing 1.5 percent for the quarter and 5.6 percent for the full year, on a constant U.S. dollar basis, over the comparable periods in 2001.

Last year Papa John's opened 115 units (10 company-owned and 105 franchised), but closed 101 others (19 company-owned and 82 franchised).

The company converted 45 of its UK-based Perfect Pizza stores to Papa John's stores (three company-owned and 42 franchised).

Papa John's attributed a 10.6 percent decline in February 2003 sales to the negative impact of the January scheduling of the Super Bowl, plus the company's annual Anniversary Promotion, held last year in February.

In the release, the company forecasted EPS in the $2.40 to $2.48 range for 2003, and warned of a potential decline in the "number of unit openings" and "minimal net unit growth after considering potential unit closings." Accordingly, it expects revenue "to be relatively flat in 2003 as compared to 2002 results."

The release also warned that operating income for the year could drop some 3 percent to 6 percent compared to 2002, due mostly to a reduction in operating margin at company-owned stores.

As of February 23, 2003, Papa John's had 2,792 units (590 company owned and 2,202 franchised) operating in 49 states and 10 international markets. Papa John's also owns or operates an additional franchised 142 Perfect Pizza units in the UK.

Topics: Public Companies

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