On Oct. 31, Papa John's (NASDAQ:PZZA) released third-quarter earnings for the period ended Sept. 24, 2006.

  • Sales increased by 2.8% to $240 million, mainly because of an increase in commissary revenues and domestic franchise royalties.

  • Earnings per share rose because of margin expansion for excellent cost controls and from a lower number of shares outstanding.

  • Free cash flow decreased by 23% to $40 million because of higher capital expenditures.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$235

$240

$233

2.8%

Net Profit

--

$13

$10

26.0%

EPS

$0.29

$0.40

$0.30

33.3%

Diluted Shares

--

33

35

(7.0%)



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

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

57.75%

56.78%

0.97

Operating Margin

8.52%

7.29%

1.23

Net Margin

5.47%

4.46%

1.01

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$10

$27

(62.0%)

Accounts Rec.

$21

$27

(20.3%)

Inventory

$27

$23

15.5%



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$28

$29

(5.9%)

Long-Term Debt

$50

$0

N/A



Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2006

YTD 2005

Change

Cash From Ops.

$66

$62

7.7%

Capital Expenditures

$27

$10

166.8%

Free Cash Flow

$40

$52

(23.0%)



Find out why Fools always follow the money.

Related Companies:

  • Bob Evans Farms (NASDAQ:BOBE)
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  • CEC Entertainment (NYSE:CEC)

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