NPC International, Inc. Reports First Quarter Results
OVERLAND PARK, KANSAS, (MAY 8, 2015) - NPC International, Inc. (the "Company"), today reported results for its first fiscal quarter ended March 31, 2015.
FIRST QUARTER HIGHLIGHTS:
- Pizza Hut comparable store sales decreased (3.0)% rolling over a decrease of (4.7)% last year.
- Wendy's comparable stores sales increased 0.8% in the 87 stores acquired in fiscal 2013.
- Adjusted EBITDA (reconciliation attached) was $32.3 million for an increase of $3.3 million or 11.5% from the prior year.
- Net income was $5.0 million, an increase of $2.0 million or 68% over the prior year.
- Cash was $23.7 million, an increase of $11.6 million from last quarter.
- Our leverage ratio improved to 4.94X Consolidated EBITDA, net of allowable cash balances of $20.7MM (as defined in our Credit Agreement) from 5.07X last quarter.
NPC's President and CEO Jim Schwartz said, "A deflationary commodity environment and a growing Wendy's business overcame continued soft sales in our Pizza Hut business resulting in an 11.5% increase in EBITDA compared to the prior year. In addition, we generated an increase of $11.6 million in cash balances primarily due to reduced capex spend resulting in improved free cash flow.
Our Pizza Hut business continues to struggle to gain its footing in a category that is relatively healthy. The strength of our category is a very encouraging sign for our brand and our company. We continue to work with the leadership team at Pizza Hut and the broader franchise community to improve the brand's functional relevancy in the marketplace. We remain confident that we will restore Pizza Hut's influential position in the category.
We are enthused with the continued strong performance of our Wendy's business. Our operational teams continue to deliver top-line growth and improved margins while improving customer satisfaction. We are supportive of the image activation program and we are planning to complete a minimum of 9 restaurants this year and look forward to the sales growth and elevated image that these investments provide.
We believe that Wendy's is leading its category with a cohesive and relevant branding strategy that is complemented by innovative quality products and investments in its digital presence that collectively serve to elevate the brand. Our investment in this brand has provided us prudent diversification as well as a significant growth opportunity both organically and through acquisitions.
Looking forward, we expect to continue to benefit from a deflationary commodity environment in our Pizza Hut business of approximately 3% to 5%, which we expect will provide us some operating and financial flexibility for the balance of the year as we work to improve Pizza Hut's top line performance. While we expect to experience commodity inflation in our Wendy's business we are pleased that the forecasted inflation has been revised down from an increase of 3% to 4% at the beginning of the year down to an increase of 1% to 2%. We look forward to updating you on our progress throughout the remainder of the year."
The Company is a wholly-owned subsidiary of NPC Restaurant Holdings, LLC ("Parent"), which has guaranteed the Company's 10.50% Senior Notes due 2020. As a result of its guaranty, Parent is required to file reports with the Securities and Exchange Commission which include consolidated financial statements of Parent and its subsidiaries (including the Company). Parent's only material asset is all of the stock of the Company. The quarterly financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations for Parent and the Company on a consolidated basis are set forth in Parent's Form 10-Q for the fiscal quarter ended March 31, 2015 which can be accessed at www.sec.gov.
CONFERENCE CALL INFORMATION:
The Company's first quarter earnings conference call will be held Monday, May 11, 2015 at 10:00 am CT (11:00 ET). In addition to a discussion of first quarter results, the call may also include discussion of Company developments, forward-looking information and other material information about business and financial matters. You can access this call by dialing 888-391-6937. The international number is 716-247-5763. The access code for the call is 35803243.
For those unable to participate live, a replay of the call will be available until May 18, 2015 by dialing 855-859-2056 or by dialing international at 404-537-3406. The access code for the replay is 35803243.
A replay of the call will also be available at the Company's website at www.npcinternational.com.
NPC International, Inc. is the world's largest Pizza Hut franchisee and currently operates 1,270 Pizza Hut units in 28 states and 143 Wendy's units in 5 states.
For more complete information regarding the Company's financial position and results of operations, investors are encouraged to review the Parent's financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations, incorporated into the Parent's Form 10-Q which can be accessed at www.sec.gov.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995
Certain statements contained in this news release that do not relate to historical or current facts constitute forward-looking statements. These include statements regarding our plans and expectations. Forward-looking statements are subject to inherent risks and uncertainties and there can be no assurance that such statements will prove to be correct. Actual results may vary materially from those anticipated in such forward-looking statements as a result of a number of factors, including lower than anticipated consumer discretionary spending; deterioration in general economic conditions; competition in the quick service restaurant market; adverse changes in food, labor and other costs; price inflation or deflation; our ability to successfully complete acquisitions of additional restaurant units; and other factors. These risks and other risks are described in Parent's filings with the Securities and Exchange Commission, including Parent's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Copies of these filings may be obtained by contacting NPC or may be accessed at www.sec.gov. All forward-looking statements made in this news release are made as of the date hereof. NPC does not intend to update these forward-looking statements and undertakes no duty to any person to provide any such update under any circumstances. Investors are cautioned not to place undue reliance on any forward-looking statements.
Contact: Troy D. Cook, Executive Vice President-Finance & Chief Financial Officer
7300 W 129th St
Overland Park, KS 66213