NPC International, Inc. Reports Third Quarter Results
OVERLAND PARK, KANSAS, (NOVEMBER 13, 2015) - NPC International, Inc. (the "Company" or "NPC"), today reported results for its third fiscal quarter ended September 29, 2015.
THIRD QUARTER HIGHLIGHTS:
- Pizza Hut comparable store sales were (0.9)% rolling over a decrease of (0.7)% last year.
- Wendy's comparable store sales were +3.1%.
- Adjusted EBITDA (reconciliation attached) was $22.0MM; a decrease of $1.7MM or 7% from the prior year.
- The Company generated a net loss of $(2.1)MM compared to net income of $0.2MM last year.
- Pizza Hut comparable store sales decreased (1.3)% rolling over a decrease of (3.7)% last year.
- Wendy's comparable store sales increased +1.4%.
- Adjusted EBITDA (reconciliation attached) was $83.8MM; an increase of $10.2MM or 14% from the prior year.
- Net income was $2.9MM, an increase of $1.2MM from last year.
- Cash balances were $32.1MM, an increase of $20.1MM from fiscal year end.
- Our leverage ratio was 4.89X Consolidated EBITDA, net of allowable cash balances (as defined in our Credit Agreement).
NPC's President and CEO Jim Schwartz said, "We were very pleased with the performance of our Wendy's business this quarter which posted strong comparable store sales growth of over 3% and continued margin expansion. In contrast, our Pizza Hut business experienced a modestly soft top-line and margins were pressured somewhat in the form of higher labor costs associated with a mix shift to our more labor intensive delivery channel as we had less promotional activity this year on carry-out centered offers.
Our Pizza Hut business continued to enjoy the margin benefit of a more favorable commodity environment this quarter; however, this benefit was more than offset by a modest decline in comparable store sales and higher labor costs. We have made strides this year in stabilizing the top line of the business and we look forward to consistent top line momentum to allow for margin expansion and improved profitability. Fortunately, we are making progress but when compared to overall category health, we must move faster and solidify our overall unique brand position in the market place.
Our Wendy's business had a fabulous quarter and is clearly benefitting from the on-target brand positioning and marketing efforts of the leadership team at Wendy's, as well as, excellent restaurant level execution by our restaurant teams. There is no doubt that we have fully integrated all the acquisitions that make up our Wendy's business today and have the capability and infrastructure to continue to grow this business in a meaningful way. We remain on track to exceed our Image Activation requirements for fiscal 2015 and we look forward to carrying this momentum through the end of the fiscal year and beyond.
We are encouraged by our sales momentum half way through our fourth quarter. Wendy's has accelerated its growth rate from its strong third quarter and Pizza Hut is solidly in positive sales growth territory. We look forward to a strong finish to fiscal 2015 and to further improving upon our EBITDA growth which has increased by $10.2 million or 14% on a year to date basis over the prior year, improving our profitability, liquidity and credit statistics relative to 2014."
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 29, 2015 which can be accessed at www.sec.gov.
CONFERENCE CALL INFORMATION:
The Company's third quarter earnings conference call will be held Monday, November 16, 2015 at 9:00 am CT (10:00 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 71219612.
For those unable to participate live, a replay of the call will be available until November 23, 2015 by dialing 855-859-2056 or by dialing international at 404-537-3406. The access code for the replay is 71219612.
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 1,263 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 913-327-3109 7300 W 129th St Overland Park, KS 66213