Papa John's International, Inc. (Nasdaq:PZZA) today announced revenues of $248.4 million for the fourth quarter of 2005, representing an increase of 2.0% from revenues of $243.4 million for the same period in 2004. Net income for the fourth quarter of 2005 was $14.4 million, or $0.42 per share (including a net gain of $2.0 million, or $0.06 per share, from the consolidation of the results of the franchisee-owned cheese purchasing company, BIBP Commodities, Inc. (BIBP), a variable interest entity), compared to last year's net income of $9.4 million, or $0.28 per share (including a net loss of $1.9 million, or $0.05 per share, from the consolidation of BIBP).

As more fully described below, the company has developed a plan to sell its Perfect Pizza operations. The company believes that a sale will be completed within the next 12 months. Accordingly, the Perfect Pizza operations have been classified as "discontinued operations" in the attached financial statements.

The 2005 pre-tax income from continuing operations increased $2.1 million, or $0.04 per share, related to the previously reported sale of 84 company-owned restaurants located in Minnesota and Colorado at the beginning of the fourth quarter, and the additional sale of five company-owned restaurants in Florida at the end of the fourth quarter. The $2.1 million gain on sale of restaurants was partially offset by a $1.1 million, or $0.02 per share, impairment charge associated with an updated valuation of our United Kingdom subsidiary (see further discussion below).

The fourth-quarter 2004 pre-tax income from continuing operations included a pre-tax charge of $1.9 million ($1.2 million after tax, or $0.03 per share), associated with certain lease and leasehold accounting adjustments applicable to prior periods.

A two-for-one split of the Company's outstanding shares of common stock, effected in the form of a stock dividend, entitled each shareholder of record at the close of business on December 23, 2005 to receive one additional share for every outstanding share of common stock held on the record date. The stock dividend was distributed effective January 13, 2006. All share and per-share amounts in this press release have been adjusted to reflect the stock split.

"We are very pleased with our fourth quarter and full-year results," said Papa John's President and CEO, Nigel Travis. "In addition to substantial investment spending during the first three quarters of 2005, during the fourth quarter the company contributed $1.8 million to our national production fund to support the roll-out of our new pan pizza. The investment paid off with outstanding comp sales during the quarter and great momentum heading into 2006."

Revenues were $968.8 million for the full year ended December 25, 2005, representing an increase of 4.7% from 2004 revenues of $925.3 million. Net income for 2005 was $46.1 million, or $1.34 per share (including a net gain of $2.8 million, or $0.08 per share, from the consolidation of BIBP), compared to last year's net income of $23.2 million, or $0.67 per share (including a net loss of $14.7 million, or $0.42 per share, from the consolidation of BIBP).

Revenues Comparison

The primary reason for the $5.0 million increase in revenues for the fourth quarter 2005, as compared to the same period in 2004, was an increase in commissary sales due to an increase in volume sold to franchisees and higher commodity prices, primarily cheese. The revenues for company-owned restaurants were relatively flat in the fourth quarter of 2005 as the 9.9% increase in comparable sales for the quarter was offset by a decline in the number of company-owned units reflecting the above-noted sale of the 84 company units at the beginning of the fourth quarter.

The $43.4 million increase in revenues for full-year 2005, as compared to full-year 2004, was primarily due to an increase in domestic comparable sales for both company-owned and franchised restaurants (see more detailed information below), and the impact of higher commodity prices, primarily cheese, on domestic commissary sales, partially offset by the fourth quarter 2005 sale of company units noted above.
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