Overland Park / KS. (npc) NPC International Inc. reported results for its third fiscal quarter ended September 30, 2014. NPC International 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 five states.
Third Quarter Highlights
- Pizza Hut comparable store sales decreased (0.7) percent rolling over a decrease of (3.6) percent last year.
- Adjusted Ebita was 23.7 million USD; a decline of 1.6 million USD or six percent from the prior year.
- The Company generated net income of 0.2 million USD compared to 2.6 million USD last year.
- The Company acquired 56 Wendy´s units for 57.1 million USD, excluding adjustments for working capital, in North Carolina and Virginia.
- Pizza Hut comparable store sales decreased (3.7) percent rolling over a decrease of (3.2) percent last year.
- Adjusted Ebita of 73.5 million USD was 23.5 million USD or 24 percent below last year.
- Net income was 1.7 million USD, a decrease of 22.2 million USD from last year.
- Cash balances were 11.6 million USD.
- Our leverage ratio was 4.67 times Consolidated Ebita, net of allowable cash balances.
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 Ebita 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 percent 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».