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Pizza Hut, Wendy's franchisee NPC announces 2014 financial results

NPC International Inc., franchisee of Pizza Hut and Wendy's restaurants, reported results for its fourth fiscal quarter and fiscal year ended Dec. 30, 2014.

April 2, 2015

NPC International Inc., franchisee of Pizza Hut and Wendy's restaurants, reported results for its fourth fiscal quarter and fiscal year ended Dec. 30, 2014, according to a company press release.

Highlights:

• Pizza Hut comparable store sales decreased (3.7) percent rolling over a decrease of (3.7) percent last year.
• Adjusted EBITDA (reconciliation attached) was $96.5MM; a decline of $35.8MM or 27 percent from the prior year partially due to the rollover of the additional fiscal week of operations in fiscal 2013.
• Net income was $1.7MM, a decrease of $28.1MM from last year.
• Cash balances were $12.1MM.
• Our leverage ratio was 5.07X Consolidated EBITDA, net of allowable cash balances (as defined in our Credit Agreement).

NPC President and CEO Jim Schwartz said in the announcement, "Our fourth quarter results were disappointing as sales remained soft and our margins were stressed by continued commodity pressure and significant restaurant level training investments in our Pizza Hut business in support of the brand's new advertising platform and 'Flavor of Now' brand positioning.

"While we continue to see a significant increase in our digital business mix, the new positioning is not yet yielding the improved sales results that we were anticipating. We believe that the transition to the 'Flavor of Now' positioning provides a diverse flavor platform that better connects with millennials and provides the brand a leveragable point of differentiation. However, there is much work to be done to bring more awareness of the 'Flavor of Now,' and we continue to work with the Pizza Hut leadership team to increase awareness and regain top-line momentum.

"Fortunately, our Wendy's business continues to deliver performance in line with our pre-acquisition expectations and currently represents nearly 20 percent of our top-line business on a pro-forma basis. We continue to be pleased with the assimilation and performance of the 56-unit acquisition we completed from a Wendy's franchisee in North Carolina during the third quarter of 2014. We remain open to opportunistic acquisitions of additional Wendy's units and the related diversification it provides our business," he said.