NPC International reports drop in sales

April 28, 2011

Kansas-based NPC International, the world's largest Pizza Hut franchisee, reported results for its first fiscal quarter ended March 29. The results included a comparable store sales decrease of 4.7 percent compared to an increase of 10.2 percent over the same period last year.

However, the company's EBITDA was $32.6 million, $0.2 million greater than last year on improved margins.

The company's net income for Q1 was $9.5 million, flat from Q1'10.

Its debt has been reduced by $29.7 million from last fiscal year end, while cash balances declined by $4.4 million to $39.8 million.

"We are pleased to post increased Adjusted EBITDA compared to last year on the strength of improved margins, despite soft comparable store sales as we rolled over the extremely successful launch of $10 Any Pizza from a year ago," said Jim Schwartz, NPC's president and CEO.

During Q1, the company continued to implement a simplified menu pricing strategy while simultaneously introducing the Big Dipper Pizza and continuing the $10 Any Pan Pizza Promotion.

"Our margins benefited from the transition to simplified pricing and product innovation as exhibited by our lower cost of sales as compared to last year despite higher commodity costs in the current year," Schwartz said. "We are pleased with our performance this quarter especially considering the extremely competitive environment, adverse weather conditions and the economic pressures affecting the consumer."

NPC International operates 1,135 Pizza Hut units in 28 states.

Topics: Business Strategy and Profitability , Financial Management , Financing and capital improvements , Franchising & Growth , Operations Management , Pizza Hut

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