NPC International: Reports First Quarter Results

Overland Park / KS. (npc) NPC International Inc. reported results for its first fiscal quarter ended March 29, 2016. Financial highlights:

• Pizza Hut comparable store sales were +4.1 percent.
• Wendy’s comparable store sales were +2.4 percent.
• Adjusted Ebitda (reconciliation attached) was 35.0 MM USD; an increase of 2.7 MM USD or 8.4 percent from the prior year.
• Adjusted Ebitda margin improved to 11.5 percent from 10.9 percent last year.
• The Company generated net income of 7.7 MM USD, an increase of 2.7 MM USD from the prior year.
• Cash balances were 45.9 MM USD, an increase of 13.1 MM USD from the prior fiscal year end.
• Free Cash Flow (reconciliation attached) was 17.6 MM USD, an increase of 4.2 MM USD from the prior year due to improved profitability.
• Our leverage ratio improved to 4.48X Consolidated Ebitda, net of allowable cash balances.

NPC’s President and CEO Jim Schwartz said, «We are pleased with continued sales momentum that we are enjoying in both brands. Our Pizza Hut and Wendy’s businesses posted positive comparable store sales growth of 4.1 percent and 2.4 percent, respectively. These sales trends combined with easing commodity markets and favorable labor performance by our Wendy’s operations resulted in an 8.4 percent increase in Adjusted Ebitda as well as margin expansion compared to the prior year. This increased profitability contributed to improved free cash flow compared to the prior year and increased liquidity relative to the prior fiscal year end».

«Our Pizza Hut business has not only maintained but accelerated the momentum that we experienced in the fourth quarter of last year. The introduction of the 5 USD Flavor menu this quarter resonated with consumers and certainly contributed to the continued positive sales growth. Our margins benefited from a favorable commodity environment and more than offset the labor cost associated with a higher mix of more labor intensive delivery transactions».

«Our Wendy’s business continued to benefit from the 4 for 4 USD promotion that was introduced in the fourth quarter of 2015. The brand introduced its Deliciously Different campaign to refocus consumers on its core menu while continuing to balance value with a quality message. We continued to experience strong margin expansion through optimized labor performance and lower ingredient costs».

«Overall it was a strong quarter for the Company with both brands driving top-line growth in a favorable commodity environment. We continue to expect favorable commodity prices for the full year benefiting both brands. In addition to strong financial results, our restaurant teams also had an excellent quarter improving customer metrics over the prior year, which contributed to our positive top line results».

The Company is a wholly-owned subsidiary of NPC Restaurant Holdings, LLC (Parent), which has guaranteed the Company’s 10.50 percent 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).