Papa John’s(US:PZZA)2024-05-09 11:01Financial Performance - Total revenues for Q1 2024 were $514 million, a decrease of 2.5% compared to the prior year, primarily due to lower revenues in the North America commissary segment[5]. - Operating income for Q1 2024 was $34 million, an 11% decrease year-over-year, while adjusted operating income increased by 10% to $43 million due to improved restaurant-level margins[4]. - Diluted earnings per share were $0.44, down from $0.65 in Q1 2023; adjusted diluted earnings per share was $0.67 compared to $0.68 in the prior year[10]. - Net income attributable to the Company for Q1 2024 was $14.6 million, a decline of 34.9% compared to $22.4 million in Q1 2023[37]. - Adjusted operating income increased to $43.2 million from $39.2 million, reflecting a growth of 10.5% year-over-year[30]. - Diluted earnings per common share decreased to $0.44, down from $0.65 in the prior year, representing a decline of 32.3%[30]. Sales and Revenue Trends - North America comparable sales decreased by 2%, with Domestic Company-owned restaurants down 3% and North America franchised restaurants down 2%; International comparable sales were down 3%[3]. - Global system-wide restaurant sales were $1.23 billion, a 0.9% decrease from the prior year quarter, impacted by the timing of a high-volume week in the previous year[7]. - Domestic Company-owned restaurant sales decreased to $176.2 million, down 2.9% from $179.9 million year-over-year[37]. - International revenues rose to $40.7 million, an increase of 29.4% compared to $31.5 million in the same quarter last year[37]. Cash Flow and Dividends - Free cash flow was an outflow of $1.1 million for Q1 2024, compared to inflows of $22.4 million in the prior year, primarily due to unfavorable working capital changes[14]. - Cash dividends paid in Q1 2024 totaled $15.1 million, with a declared second quarter dividend of $0.46 per common share[16]. - Dividends paid to common stockholders increased slightly to $15,068 thousand from $14,603 thousand, reflecting a commitment to return capital to shareholders[40]. Assets and Liabilities - Total current assets decreased to $225.9 million from $231.0 million as of December 31, 2023[35]. - Total liabilities decreased to $1.29 billion from $1.32 billion at the end of 2023[35]. - The Company reported a cash and cash equivalents balance of $27.8 million, down from $40.6 million at the end of 2023[35]. - Cash and cash equivalents at the end of the period were $27,768 thousand, down from $46,708 thousand, a decline of 40.5%[40]. Operational Changes and Initiatives - The company opened 8 net new units in Q1 2024, with plans for over 20% net unit growth in North America relative to 2023[3]. - The company is focused on its "Back to Better 2.0" and International Transformation initiatives to drive sustainable growth[2]. - The board is conducting a search for a new CEO to lead the company into its next growth phase[2]. - The Company incurred $9.5 million in international restructuring costs during the quarter, primarily related to planned store closures in the UK[33]. Cash Flow Activities - Net cash provided by operating activities fell to $11,987 thousand, down 70.6% compared to $40,788 thousand in the prior year[40]. - Net cash used in investing activities was $10,152 thousand, a decrease from $18,275 thousand year-over-year[40]. - Net cash used in financing activities increased to $14,602 thousand from $23,212 thousand, reflecting a reduction in cash outflows[40]. - The company experienced a significant decrease in net proceeds from revolving credit facilities, dropping to $5,300 thousand from $208,200 thousand[40]. Asset Utilization - Accounts receivable increased significantly by $9,084 thousand compared to $2,182 thousand in the previous year[40]. - Depreciation and amortization expenses rose to $17,674 thousand, up from $14,721 thousand, indicating increased asset utilization[40]. - The company reported an impairment loss of $7,554 thousand, which was not present in the prior year[40].