NPC International, Inc. Reports Third Quarter Results
OVERLAND PARK, KANSAS, (NOVEMBER 14, 2014) - NPC International, Inc. (the "Company" or "NPC"), today reported results for its third fiscal quarter ended September 30, 2014.
THIRD QUARTER HIGHLIGHTS:
- Pizza Hut comparable store sales decreased (0.7)% rolling over a decrease of (3.6)% last year.
- Adjusted EBITDA (reconciliation attached) was $23.7MM; a decline of $1.6MM or 6% from the prior year.
- The Company generated net income of $0.2MM compared to $2.6MM last year.
- The Company acquired 56 Wendy's units for $57.1MM, excluding adjustments for working capital, in North Carolina and Virginia.
- Pizza Hut comparable store sales decreased (3.7)% rolling over a decrease of (3.2)% last year.
- Adjusted EBITDA (reconciliation attached) of $73.5MM was $23.5MM or 24% below last year.
- Net income was $1.7MM, a decrease of $22.2MM from last year.
- Cash balances were $11.6MM.
- Our leverage ratio was 4.67X Consolidated EBITDA, net of allowable cash balances (as defined in our Credit Agreement).
NPC's President and CEO Jim Schwartz said, "We are pleased with this quarter's sequential improvement in our Pizza Hut operating margins and comparable store sales relative to our year-to-date performance. However, we recognize that there is still much work to be done and in many ways the real work is just beginning.
Extreme commodity inflation continued to place significant pressure on our margins and was a primary contributor to our year-over-year EBITDA shortfall; this pressure is expected to continue throughout the remainder of the year. Fortunately, our Wendy's business continues to deliver performance in line with our pre-acquisition expectations and currently represents nearly 20% of our top-line business on a pro-forma basis.
We continue to work with Pizza Hut brand leadership and expect to launch a major new advertising platform and brand positioning during the fourth quarter that we believe will better connect us with consumers and separate us from competition. Our improved comparable store sales performance this quarter is the result of certain go-forward changes in our promotional strategy that also markedly increased our digital business mix.
We completed a 56-unit acquisition from a Wendy's franchisee in North Carolina during the quarter and we are pleased with the assimilation efforts and early results from these units. We remain open to opportunistic acquisitions of additional Wendy's units and the related diversification it provides our business.
We remain enthused about the job that Wendy's brand leadership is doing to position Wendy's to win in the marketplace, and we are truly excited about the forthcoming changes at Pizza Hut. We look forward to updating you on our progress following the fourth quarter."
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 September 30, 2014 which can be accessed at www.sec.gov.
CONFERENCE CALL INFORMATION:
The Company's third quarter earnings conference call will be held Monday, November 17, 2014 at 9:00 am CT (10:00 am ET). In addition to a discussion of third 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 30153757.
For those unable to participate live, a replay of the call will be available until November 24, 2014 by dialing 855-859-2056 or by dialing international at 404-537-3406. The access code for the replay is 30153757.
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 1,266 Pizza Hut units in 28 states and 144 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 1995Certain 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
NPCI / SOURCE: NPC International