On Aug. 1, Papa John's (NASDAQ:PZZA) released Q2 2006 earnings for the period ended June 25.

  • The bottom line looked great, but take out $0.12 EPS -- from consolidation of results from a franchisee-owned cheese purchasing company (BIBP) -- and the $0.34 result was right in line with consensus estimates.
  • Domestic same-store sales were up 4.7% from the year-ago quarter.
  • Excluding the impact of BIBP consolidation, cash flow from operations was $5.2 million. This results in free cash flow of negative $2.8 million.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2006

Q2 2005

Change

Sales

$237,820

$241,593

$238,675

1.2%

Net Profit

--

$15,266

$10,870

40.4%

EPS

$0.34

$0.46

$0.32

43.8%

Diluted Shares

33,309

33,746

(1.3%)



Get back to basics with a look at the income statement.

Margin Checkup

Q2 2006

Q2 2005

Change*

Gross Margin**

81.36%

78.67%

2.69

Operating Margin

10.14%

7.32%

2.82

Net Margin

6.32%

4.55%

1.77

*Expressed in percentage points.
**Based on gross profit, which is defined as company-owned restaurant sales less cost of food and drink.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

Change

Cash + ST Invest.

$10,494

$21,793

(51.8%)

Accounts Rec.

$21,371

$21,998

(2.9%)

Inventory

$24,444

$21,847

11.9%



Liabilities

Q2 2006

Q2 2005

Change

Accounts Payable

$25,228

$26,853

(6.1%)

Long-Term Debt*

$45,414

$63,519

(28.5%)

*Includes current portion.

Learn the ways of the balance sheet.

Cash Flow Highlights

Q2 2006

Q2 2005

Change

Cash From Ops.

$11,475

$18,075

(36.5%)

Capital Expenditures

$7,974

$3,302

141.5%

Free Cash Flow

$3,501

$14,773

(76.3%)



Find out why Fools always follow the money.

Related Companies:

  • Domino's Pizza (NYSE:DPZ)
  • Pizza Hut, a division of Yum! Brands (NYSE:YUM)
  • Privately held Little Caesar Enterprises

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Jim Mueller had no position in any company mentioned. Fool rules are here.