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Item 1. Financial Statements

2023-08-03 compared with 2023-05-04 · 224 added, 133 removed, 534 unchanged (40% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts) March 26,

(In thousands, except per share amounts) June 25,

2023 December 25,

6 unchanged sentences

Prepaid expenses and other current assets 56,086 44,123

Assets held for sale (a)

Total current assets 242,002 251,039

4 unchanged sentences

Goodwill 76,623 70,616

Deferred income taxes 553 1,920

Other assets 68,848 74,165

14 unchanged sentences

Long-term debt, less current portion, net 768,820 597,069

Deferred income taxes 1,112 —

Other long-term liabilities 65,106 68,317

3 unchanged sentences

Common stock ($ 0.01 par value per share;

issued 49,207 at March 26, 2023 and 49,138 at December 25, 2022)

issued 49,209 at June 25, 2023 and 49,138 at December 25, 2022)

Additional paid-in capital 445,964 449,829

1 unchanged sentence

Retained earnings 207,461 195,856

Treasury stock ( 16,851 shares at March 26, 2023 and 14,402 shares at December 25, 2022, at cost)

Treasury stock ( 16,815 shares at June 25, 2023 and 14,402 shares at December 25, 2022, at cost)

( 1,127,669 ) ( 922,434 )

3 unchanged sentences

Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit $ 873,643 $ 864,227

(a) Represents vacant land adjacent to the Company’s Louisville office.

See accompanying notes.

2 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended

(In thousands, except per share amounts) March 26,

2023 March 27,

Three Months Ended Six Months Ended

(In thousands, except per share amounts) June 25,

2023 June 26,

2022 June 25,

2023 June 26,

Domestic Company-owned restaurant sales $ 175,780 $ 171,411 $ 355,646 $ 370,176

17 unchanged sentences

Income before income taxes 23,637 32,823 52,412 42,995

Income tax expense (benefit) 6,229 ( 1,256 )

Income tax expense 5,778 7,093 12,007 5,838

Net income before attribution to noncontrolling interests 17,859 25,730 40,405 37,157

4 unchanged sentences

Dividends paid to participating securities — ( 82 ) — ( 141 )

Net income attributable to participating securities — ( 111 ) — ( 93 )

Net income attributable to common shareholders $ 17,768 $ 25,240 $ 40,144 $ 35,693

8 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended

(In thousands) March 26,

2023 March 27,

Three Months Ended Six Months Ended

(In thousands) June 25,

2023 June 26,

2022 June 25,

2023 June 26,

Net income before attribution to noncontrolling interests $ 17,859 $ 25,730 $ 40,405 $ 37,157

2 unchanged sentences

Interest rate swaps (1)

1,514 1,877 1,850 3,589

Other comprehensive income (loss), before tax 1,919 ( 2,232 ) 3,697 ( 1,381 )

10 unchanged sentences

___________________________________

(1) Amounts reclassified out of accumulated other comprehensive income into net interest (expense) income include $( 207 ) and $ 535 for the three months ended March 26, 2023 and March 27, 2022, respectively.

(2) The income tax effects of amounts reclassified out of accumulated other comprehensive loss were $ 47 and $( 120 ) for the three months ended March 26, 2023 and March 27, 2022, respectively.

(1) Amounts reclassified out of accumulated other comprehensive income into net interest (expense) income include $( 36 ) and $( 243 ) for the three and six months ended June 25, 2023, respectively and $( 735 ) and $( 200 ) for the three and six months ended June 26, 2022, respectively.

(2) The income tax effects of amounts reclassified out of accumulated other comprehensive loss were $ 8 and $ 55 for the three and six months ended June 25, 2023, respectively and $ 165 and $ 45 for the three and six months ended June 26, 2022, respectively.

See accompanying notes.

13 unchanged sentences

For the three months ended

March 26, 2023

June 25, 2023

Balance at March 26, 2023 32,356 $ 492 $ 443,686 $ ( 8,766 ) $ 203,569 $ ( 1,130,136 ) $ 15,830 $ ( 475,325 )

Net income (1)

— — — — 17,768 — 32 17,800

Other comprehensive income (loss), net of tax — — — 1,477 — — — 1,477

Dividends on common stock — — 54 — ( 13,876 ) — — ( 13,822 )

Exercise of stock options 2 — 68 — — — — 68

Stock-based compensation expense — — 4,601 — — — — 4,601

Issuance of restricted stock 30 — ( 1,933 ) — — 1,933 — —

Tax effect of restricted stock awards ( 1 ) — ( 109 ) — — — — ( 109 )

Distributions to noncontrolling interests — — — — — — ( 300 ) ( 300 )

Other 7 — ( 403 ) — — 534 — 131

Balance at June 25, 2023 32,394 $ 492 $ 445,964 $ ( 7,289 ) $ 207,461 $ ( 1,127,669 ) $ 15,562 $ ( 465,479 )

For the six months ended

June 25, 2023

Balance at December 25, 2022 34,736 $ 491 $ 449,829 $ ( 10,135 ) $ 195,856 $ ( 922,434 ) $ 15,729 $ ( 270,664 )

10 unchanged sentences

Other 10 — ( 449 ) — — 667 — 218

Balance at March 26, 2023 32,356 $ 492 $ 443,686 $ ( 8,766 ) $ 203,569 $ ( 1,130,136 ) $ 15,830 $ ( 475,325 )

___________________________________

(1) Net income to the Company for the three months ended March 26, 2023 excludes $ 46 allocable to the redeemable noncontrolling interests for our joint venture arrangements.

(2) At March 26, 2023, the accumulated other comprehensive loss of $ 8,766 was comprised of net unrealized foreign currency translation loss of $ 7,586 and net unrealized loss on the interest rate swap agreements of $ 1,180 .

(3) Acquisition of Company common stock for the three months ended March 26, 2023 includes $ 2,804 of transaction costs directly attributable to share repurchases, including a 1% excise tax incurred under the Inflation Reduction Act of 2022.

Balance at June 25, 2023 32,394 $ 492 $ 445,964 $ ( 7,289 ) $ 207,461 $ ( 1,127,669 ) $ 15,562 $ ( 465,479 )

(1) Net income to the Company for the three and six months ended June 25, 2023 excludes $ 59 and $ 105 , respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements.

(2) At June 25, 2023, the accumulated other comprehensive loss of $ 7,289 was comprised of net unrealized foreign currency translation loss of $ 7,274 and net unrealized loss on the interest rate swap agreements of $ 15 .

(3) Acquisition of Company common stock for the six months ended June 25, 2023 includes $ 2,804 of transaction costs directly attributable to share repurchases, including a 1% excise tax incurred under the Inflation Reduction Act of 2022.

See accompanying notes.

13 unchanged sentences

For the three months ended

March 27, 2022

Balance at December 26, 2021 35,797 $ 490 $ 445,126 $ ( 9,971 ) $ 183,157 $ ( 806,472 ) $ 15,212 $ ( 172,458 )

June 26, 2022

Balance at March 27, 2022 35,675 $ 491 $ 436,225 $ ( 9,316 ) $ 181,124 $ ( 832,603 ) $ 15,635 $ ( 208,444 )

Net income (1)

7 unchanged sentences

Tax effect of restricted stock awards ( 1 ) — ( 65 ) — — — — ( 65 )

Distributions to noncontrolling interests — — — — — — ( 150 ) ( 150 )

Other 2 — 36 — — 79 ( 3 ) 112

Balance at March 27, 2022 35,675 $ 491 $ 436,225 $ ( 9,316 ) $ 181,124 $ ( 832,603 ) $ 15,635 $ ( 208,444 )

Balance at June 26, 2022 35,248 $ 491 $ 442,255 $ ( 11,034 ) $ 193,934 $ ( 875,205 ) $ 15,761 $ ( 233,798 )

For the six months ended

June 26, 2022

Balance at December 26, 2021 35,797 $ 490 $ 445,126 $ ( 9,971 ) $ 183,157 $ ( 806,472 ) $ 15,212 $ ( 172,458 )

Net income (1)

— — — — 35,927 — 702 36,629

(1) Net income to the Company for the three months ended March 27, 2022 excludes $ 510 allocable to the redeemable noncontrolling interests for our joint venture arrangements.

(2) At March 27, 2022, the accumulated other comprehensive loss of $ 9,316 was comprised of net unrealized foreign currency translation loss of $ 5,533 and net unrealized loss on the interest rate swap agreements of $ 3,783 .

Other comprehensive income (loss), net of tax — — — ( 1,063 ) — — — ( 1,063 )

Dividends on common stock — — 95 — ( 25,150 ) — — ( 25,055 )

Exercise of stock options 39 1 1,908 — — — — 1,909

Acquisition of Company common stock ( 753 ) — — — — ( 75,471 ) — ( 75,471 )

Stock-based compensation expense — — 9,100 — — — — 9,100

Issuance of restricted stock 229 — ( 6,450 ) — — 6,450 — —

Tax effect of restricted stock awards ( 70 ) — ( 7,527 ) — — — — ( 7,527 )

Distributions to noncontrolling interests — — — — — — ( 150 ) ( 150 )

Other 6 — 3 — — 288 ( 3 ) 288

Balance at June 26, 2022 35,248 $ 491 $ 442,255 $ ( 11,034 ) $ 193,934 $ ( 875,205 ) $ 15,761 $ ( 233,798 )

(1) Net income to the Company for the three and six months ended June 26, 2022 excludes $ 18 and $ 528 , respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements.

(2) At June 26, 2022, the accumulated other comprehensive loss of $ 11,034 was comprised of net unrealized foreign currency translation loss of $ 8,696 and net unrealized loss on the interest rate swap agreements of $ 2,338 .

See accompanying notes.

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Three Months Ended

(In thousands) March 26,

2023 March 27,

Six Months Ended

(In thousands) June 25,

2023 June 26,

Operating activities

23 unchanged sentences

Acquisitions, net of cash acquired — ( 1,250 )

Proceeds from refranchising, net of cash transferred — 13,588

Other 182 238

Net cash used in investing activities ( 35,727 ) ( 12,523 )

16 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Unaudited)

March 26, 2023

June 25, 2023

Basis of Presentation

3 unchanged sentences

In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included.

Operating results for the three months ended March 26, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023.

Operating results for the three and six months ended June 25, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report on Form 10-K for Papa John’s International, Inc.

18 unchanged sentences

Noncontrolling Interests

Papa John’s has joint venture arrangements in which there are noncontrolling interests held by third parties that includ ed 98 and 188 restaurants at March 26, 2023 and March 27, 2022, respectively.

Papa John’s has joint venture arrangements in which there are noncontrolling interests held by third parties that includ ed 98 restaurants at June 25, 2023 and June 26, 2022, respectively.

As further described in “Note 10.

1 unchanged sentence

Consolidated net income is required to be reported separately at amounts attributable to both the Company and the noncontrolling interests.

Additionally, disclosures are required to clearly identify and distinguish between the interests of the Company and the interests of the noncontrolling owners, including a disclosure on the face of the Condensed Consolidated Statements of Operations of net income attributable to noncontrolling interests.

Net income attributable to these joint ventures for the three months ended March 26, 2023 and March 27, 2022 was as follows (in thousands):

Three Months Ended

2023 March 27,

Net income attributable to these joint ventures for the three and six months ended June 25, 2023 and June 26, 2022 was as follows (in thousands):

Three Months Ended Six Months Ended

2023 June 26,

2022 June 25,

2023 June 26,

Papa John’s International, Inc.

17 unchanged sentences

Deferred tax assets are also recognized for the estimated future effects of tax attribute carryforwards (e.g., net operating losses, capital losses, and foreign tax credits).

The effect on deferred taxes of changes in tax rates is recognized in the period in which the new tax rate is enacted.

The effect on deferred taxes due to changes in tax rates is recognized in the period in which the new tax rate is enacted.

Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts we expect to realize.

Deferred tax assets and liabilities are recorded within Other assets and Other long-term liabilities on the Condensed Consolidated Balance Sheets.

Tax authorities periodically audit the Company.

10 unchanged sentences

accordingly, the fair values presented do not necessarily indicate what the Company or its debtholders could realize in a current market exchange.

Our financial assets and liabilities that were measured at fair value on a recurring basis as of March 26, 2023 and December 25, 2022 are as follows:

Our financial assets and liabilities that were measured at fair value on a recurring basis as of June 25, 2023 and December 25, 2022 are as follows:

Fair Value Measurements

1 unchanged sentence

Value Level 1 Level 2 Level 3

March 26, 2023

June 25, 2023

Financial assets:

1 unchanged sentence

$ 27,228 $ 27,228 $ — $ —

Financial liabilities:

Interest rate swaps (b)

9 unchanged sentences

(b) The fair value of our interest rate swaps is based on the sum of all future net present value cash flows.

The future cash flows are derived based on the terms of our interest rate swaps, as well as considering published discount factors, and projected London Interbank Offered Rates (“LIBOR”).

The future cash flows are derived based on the terms of our interest rate swaps, as well as considering published discount factors, and projected Secured Overnight Financing Rates (“SOFR”).

Interest rate swaps entered into prior to the three months ended June 25, 2023 were based on London Interbank Offered Rates (“LIBOR”).

The fair value of certain assets and liabilities approximates carrying value because of the short-term nature of the accounts, including cash and cash equivalents, accounts receivable, net of allowances, and accounts payable.

1 unchanged sentence

The Company’s revolving credit facilities under the Company’s credit agreement approximate carrying value due to their variable market-based interest rate.

The Company’s 3.875 % senior notes are classified as a Level 2 fair value measurement since the Company estimates the fair value by using recent trading transactions, and have the following estimated fair values and carrying values (excluding the impact of unamortized debt issuance costs) as of March 26, 2023 and December 25, 2022:

March 26, 2023 December 25, 2022

June 25, 2023 December 25, 2022

(In thousands) Carrying

5 unchanged sentences

Credit quality is monitored through the timing of payments compared to the prescribed payment terms and known facts regarding the financial condition of the franchisee or customer.

Account and note balances are charged off against the allowance after recovery efforts have ceased.

Account and note balances are charged against the allowance after recovery efforts have ceased.

The following table summarizes changes in our allowances for credit losses for accounts receivable and notes receivable:

1 unchanged sentence

Balance at December 25, 2022 $ 6,718 $ 14,499

Current period provision for expected credit losses 609 24

Current period provision for expected credit losses, net 568 27

Write-offs charged against the allowance ( 753 ) ( 147 )

Recoveries collected ( 84 ) ( 36 )

Balance at March 26, 2023 $ 7,015 $ 14,487

Balance at June 25, 2023 $ 6,533 $ 14,379

Lessor Operating Leases

The Company subleases certain retail space to our franchisees in the United Kingdom (“UK”), which are primarily operating leases.

At March 26, 2023, we leased and subleased 446 Papa Johns restaurants to franchisees in the UK.

At June 25, 2023, we leased and subleased 368 Papa Johns restaurants to franchisees in the UK.

The initial lease terms on the franchised sites in the UK are generally 15 years.

2 unchanged sentences

Rental income, primarily derived from properties leased and subleased to franchisees in the UK, is recognized on a straight-line basis over the respective operating lease terms.

The Company recognized total sublease income of $ 2.9 million and $ 3.0 million for the three months ended March 26, 2023 and March 27, 2022, respectively, within Other revenues in the Condensed Consolidated Statements of Operations.

The Company recognized total sublease income of $ 2.7 million and $ 5.6 million for the three and six months ended June 25, 2023, respectively, and $ 3.0 million and $ 6.0 million for the three and six months ended June 26, 2022, respectively, within Other revenues in the Condensed Consolidated Statements of Operations.

Lease Guarantees

1 unchanged sentence

These leases have varying terms, the latest of which expires in 2036.

As of March 26, 2023, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $ 8.7 million.

As of June 25, 2023, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $ 8.2 million.

This contingent liability is not included in the Condensed Consolidated Balance Sheets as it is not probable to occur.

2 unchanged sentences

Supplemental cash flow information related to leases for the periods reported is as follows:

Three Months Ended

(In thousands) March 26, 2023 March 27, 2022

Six Months Ended

(In thousands) June 25, 2023 June 26, 2022

Cash paid for amounts included in the measurement of lease liabilities:

17 unchanged sentences

Accounts receivable, net 13,722 14,780

Income tax receivable 56 —

Prepaid expenses and other current assets 15,230 1,815

14 unchanged sentences

Our contract liabilities primarily relate to franchise fees, unredeemed gift card liabilities, and loyalty program obligations, which we classify as Deferred revenue on the Condensed Consolidated Balance Sheets.

During the three months ended March 26, 2023 and March 27, 2022, the Company recognized $ 8.4 million and $ 9.3 million in revenue, respectively, related to deferred revenue.

During the three and six months ended June 25, 2023, the Company recognized $ 7.9 million and $ 16.3 million in revenue, respectively, related to deferred revenue compared to $ 8.3 million and $ 17.6 million for the three and six months ended June 26, 2022.

The following table includes a breakout of contract liability balances (in thousands):

Contract Liabilities

March 26, 2023 December 25, 2022 Change

June 25, 2023 December 25, 2022 Change

Franchise fees and unredeemed gift card liabilities $ 28,409 $ 30,710 $ ( 2,301 )

3 unchanged sentences

Equipment incentives are related to the future value of commissary revenue the Company will receive over the term of the incentive agreement.

As of March 26, 2023 and December 25, 2022, the contract assets were approximately $ 7.0 million and $ 6.2 million, respectively.

For the three months ended March 26, 2023 and March 27, 2022, revenue was reduced approximately $ 0.9 million and $ 0.8 million, respectively, for the amortization of contract assets over the applicable contract terms.

As of June 25, 2023 and December 25, 2022, the contract assets were approximately $ 7.0 million and $ 6.2 million, respectively.

For the three and six months ended June 25, 2023, revenue was reduced approximately $ 0.9 million and $ 1.8 million, respectively, for the amortization of contract assets over the applicable contract terms.

For the three and six months ended June 26, 2022, revenue was reduced approximately $ 1.1 million and $ 1.9 million, respectively, for the amortization of contract assets over the applicable contract terms.

Contract assets are included in Prepaid expenses and other current assets and Other assets on the Condensed Consolidated Balance Sheets.

4 unchanged sentences

Franchise fees $ 3,172 $ 2,823 $ 2,635 $ 2,380 $ 2,087 $ 6,054 $ 19,151

At March 26, 2023, approximately $ 3.3 million of area development fees related to unopened stores and international unearned royalties are included in Deferred revenue.

At June 25, 2023, approximately $ 3.5 million of area development fees related to unopened stores and international unearned royalties are included in Deferred revenue.

Timing of revenue recognition is dependent upon the timing of store openings and franchisees’ revenues.

3 unchanged sentences

Shares Authorized and Outstanding

The Company has authorized 100.0 million shares of common stock as of March 26, 2023 and December 25, 2022.

The Company’s outstanding shares of common stock outstanding, net of repurchased shares of common stock held as treasury stock, were 32.4 million shares at March 26, 2023, compared to 34.7 million shares at December 25, 2022.

The Company has authorized 100.0 million shares of common stock as of June 25, 2023 and December 25, 2022.

The Company’s outstanding shares of common stock outstanding, net of repurchased shares of common stock held as treasury stock, were 32.4 million shares at June 25, 2023, compared to 34.7 million shares at December 25, 2022.

Share Repurchase Program

On October 28, 2021, our Board of Directors (the “Board”) approved a share repurchase program with an indefinite duration for up to $ 425.0 million of the Company’s common stock.

The following table summarizes our repurchase activity under our share repurchase programs for the three months ended March 26, 2023 and March 27, 2022:

The following table summarizes our repurchase activity under our share repurchase programs for the three and six months ended June 25, 2023 and June 26, 2022:

(In thousands, except average price per share) Total Number of Shares Purchased Average Price Paid per Share Aggregate Cost of Shares Purchased Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

Three Months Ended

June 25, 2023 — $ — $ — $ 90,160

June 26, 2022 452 $ 94.56 $ 42,762 $ 349,329

(In thousands, except average price per share) Total Number of Shares Purchased Average Price Paid per Share Aggregate Cost of Shares Purchased (a)

Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

Three Months Ended

March 26, 2023 2,523 $ 83.10 $ 209,640 $ 90,160

March 27, 2022 301 $ 108.76 $ 32,709 $ 392,091

(a) Aggregate cost of shares purchased for the three months ended March 26, 2023 excludes $ 2.8 million of transaction costs directly attributable to share repurchases, including a 1% excise tax incurred under the Inflation Reduction Act of 2022.

These costs were classified as non-cash financing activities during the three months ended March 26, 2023.

The shares repurchased during the three months ended March 26, 2023 included 2,176,928 shares repurchased on March 1, 2023 from certain funds affiliated with, or managed by, Starboard Value LP (collectively, “Starboard”), at a price of $ 82.52 per share, for aggregate consideration of $ 179.6 million.

Six Months Ended

June 25, 2023 2,523 $ 83.10 $ 209,640 $ 90,160

June 26, 2022 753 $ 100.23 $ 75,471 $ 349,329

(a) Aggregate cost of shares purchased for the six months ended June 25, 2023 excludes $ 2.8 million of transaction costs directly attributable to share repurchases, including a 1% excise tax incurred under the Inflation Reduction Act of 2022.

Of these costs, $ 2.1 million were classified as non-cash financing activities during the six months ended June 25, 2023.

The shares repurchased during the six months ended June 25, 2023 included 2,176,928 shares repurchased on March 1, 2023 from certain funds affiliated with, or managed by, Starboard Value LP (collectively, “Starboard”), at a price of $ 82.52 per share, for aggregate consideration of $ 179.6 million.

The transaction was negotiated by an independent committee of the Board of Directors formed for the purpose of evaluating a possible transaction involving Starboard, and was approved by the full Board of Directors upon such independent committee’s recommendation.

4 unchanged sentences

Funding for the share repurchase programs will be provided through our credit facility, operating cash flow, stock option exercises and cash and cash equivalents.

The Company paid dividends of approx imately $ 14.6 million ($ 0.42 per share) f or the three months ended March 26, 2023.

On April 25, 2023, our Board of Directors declared a first quarter dividend of $ 0.42 per common share (approximately $ 13.8 million in the aggregate), which will be paid on May 26, 2023 to stockholders of record as of the close of business on May 15, 2023.

The Company paid dividends of approx imately $ 28.5 million ($ 0.84 per share) f or the six months ended June 25, 2023.

On July 31, 2023, our Board of Directors approved a 9.5 % increase in the Company’s dividend rate per common share from $ 1.68 on an annual basis to $ 1.84 on an annual basis and subsequently declared a third quarter dividend of $ 0.46 per common share (approximately $ 15.1 million in the aggregate), which will be paid on August 25, 2023 to stockholders of record as of the close of business on August 14, 2023.

The declarat ion and payment of any future dividends will be at the discretion of our Board.

8 unchanged sentences

The calculations of basic and diluted earnings per common share are as follows (in thousands, except per share data):

Three Months Ended

2023 March 27,

Three Months Ended Six Months Ended

2023 June 26,

2022 June 25,

2023 June 26,

Basic earnings per common share

1 unchanged sentence

Dividends paid to participating securities — ( 82 ) — ( 141 )

Net income attributable to participating securities — ( 111 ) — ( 93 )

Net income attributable to common shareholders $ 17,768 $ 25,240 $ 40,144 $ 35,693

5 unchanged sentences

Dilutive effect of outstanding equity awards (a)

87 200 128 257

Diluted weighted average common shares outstanding 32,650 35,824 33,487 36,032

1 unchanged sentence

___________________________________

(a) Excludes 22,000 and 21,000 equity awards for the three months ended March 26, 2023 and March 27, 2022, respectively, as the effect of including such awards would have been anti-dilutive.

(a) Excludes 103,000 and 49,000 shares underlying equity awards for the three and six months ended June 25, 2023, respectively, and 63,000 and 42,000 shares underlying equity awards for the three and six months ended June 26, 2022, respectively, as the effect of including such awards would have been anti-dilutive.

Long-term debt, net, consists of the following (in thousands):

8 unchanged sentences

___________________________________

(a) Revolving facilities as of March 26, 2023 includes $ 8.2 million outstanding under the PJMF Revolving Facility as defined and discussed below.

(a) Revolving facilities as of June 25, 2023 includes $ 15.5 million outstanding under the PJMF Revolving Facility as defined and discussed below.

On September 14, 2021, the Company issued $ 400.0 million of 3.875 % senior notes (the “Notes”) which will mature on September 15, 2029.

Interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year at a fixed interest rate of 3.875 % per annum.

The Company may redeem the Notes, in whole or in part, at any time on or after September 15, 2024 at established redemption prices ranging from 97 to 194 basis points depending on when the Notes are redeemed.

At any time prior to September 15, 2024, the Company may also redeem up to 40 % of the Notes with net cash proceeds of certain equity offerings at a redemption price equal to 103.875 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, excluding the redemption date.

In addition, at any time prior to September 15, 2024, the Company may redeem the Notes, in whole or in part, at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest and an applicable “make-whole” premium.

The Notes also contain customary redemption provisions related to asset sales and certain change of control transactions.

The Indenture governing the Notes contains customary events of default, including, among other things, payment default, failure to comply with covenants or agreements contained in the Indenture or the Notes and certain provisions related to bankruptcy events.

The Indenture also contains customary negative covenants.

Refer to Note 12 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 25, 2022.

for further description of the provisions and covenant requirements under the Senior Notes.

Credit Agreement

1 unchanged sentence

The PJI Revolving Facility will mature on September 14, 2026.

The remaining availability under the PJI Revolving Facility was approximately $ 195.0 million as of March 26, 2023.

Up to $ 50.0 million of the PJI Revolving Facility may be advanced in certain agreed foreign currencies, including Euros, Pounds Sterling, Canadian Dollars, Japanese Yen, and Mexican Pesos.

Additionally, the Credit Agreement includes an accordion feature allowing for a future increase of the PJI Revolving Facility and/or incremental term loans in an aggregate amount of up to $ 500.0 million, subject to certain conditions, including obtaining commitments from one or more new or existing lenders to provide such increased amounts and ongoing compliance with financial covenants.

Loans under the PJI Revolving Facility accrue interest at a per annum rate equal to, at the Company’s election, either a LIBOR rate plus a margin ranging from 1.25 % to 2.00 % or a base rate (generally determined according to the greater of a prime rate, federal funds rate plus 0.50 %, or a LIBOR rate plus 1.00 %) plus a margin ranging from 0.25 % to 1.00 %.

In each case, the actual margin is determined according to a ratio of the Company’s total indebtedness to an earnings calculation, Consolidated EBITDA (as defined in our credit agreement), for the then most recently ended four quarter period (the “Leverage Ratio”).

An unused commitment fee ranging from 18 to 30 basis points per annum, determined according to the Leverage Ratio, applies to the underutilized commitments under the PJI Revolving Facility.

Loans outstanding under the PJI Revolving Facility may be prepaid at any time without premium or penalty, subject to customary breakage costs in the case of borrowings for which a LIBOR rate election is in effect.

The Credit Agreement also contains

provisions specifying alternative interest rate calculations to be used at such time as LIBOR ceases to be available as a benchmark for establishing the interest rate on floating interest rate borrowings.

The Credit Agreement contains customary affirmative and negative covenants that, among other things, require customary reporting obligations, and restrict, subject to certain exceptions, the occurrence of additional indebtedness and liens, the consummation of certain mergers, consolidations, sales of assets and similar transactions, the making of investments, equity distributions and other restricted payments, and transactions with affiliates.

The Company is also subject to the following financial covenants:

(1) a maximum Leverage Ratio of 5.25 to 1.00, subject to the Company’s election to increase the maximum Leverage Ratio by 0.50 to 1.00 in connection with material acquisitions if the Company satisfies certain requirements, and (2) a minimum interest coverage ratio defined as Consolidated EBITDA (as defined in the Credit Agreement) plus consolidated rental expense to consolidated interest expense plus consolidated rental expense of 2.00 to 1.00.

We were in compliance with these financial covenants at March 26, 2023.

Obligations under the Credit Agreement are guaranteed by certain direct and indirect material domestic subsidiaries of the Company (the “Guarantors”) and are secured by a security interest in substantially all of the capital stock and equity interests of the Company’s and the Guarantors’ Domestic and first tier material foreign subsidiaries.

The Credit Agreement contains customary events of default including, among other things, payment defaults, breach of covenants, cross acceleration to material indebtedness, bankruptcy-related defaults, judgment defaults, and the occurrence of certain change of control events.

The occurrence of an event of default may result in the termination of the PJI Revolving Facility, acceleration of repayment obligations and the exercise of remedies by the Lenders with respect to the Guarantors.

The remaining availability under the PJI Revolving Facility was approximately $ 224.0 million as of June 25, 2023.

Refer to Note 12 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 25, 2022 for further description of the provisions and covenant requirements under the Credit Agreement.

PJMF Revolving Facility

4 unchanged sentences

The borrowings under the PJMF Revolving Facility accrue interest at a variable rate of a one month LIBOR plus 1.60 %.

The applicable interest rate on the PJMF Revolving facility was 5.9 % for the three months ended March 26, 2023.

As of March 26, 2023, t he principal amount of debt outstanding under the PJMF Revolving Facility was approximately $ 8.2 million and is classified as Current portion of long-term debt in the Condensed Consolidated Balance Sheets .

The applicable interest rate on the PJMF Revolving facility was 6.8 % for the three months ended June 25, 2023.

As of June 25, 2023, t he principal amount of debt outstanding under the PJMF Revolving Facility was approximately $ 15.5 million and is classified as Current portion of long-term debt in the Condensed Consolidated Balance Sheets .

The PJMF operating results and the related debt outstanding do not impact the financial covenants under the Credit Agreement.

Derivative Financial Instruments

As of March 26, 2023, we have the following interest rate swap agreements with a total notional value of $ 125.0 million:

During the three months ended June 25, 2023, the Company executed a new interest rate swap with an initial notional value of $ 100.0 million to replace the Company’s prior interest swaps, which had a notional value of $ 125.0 million and matured on April 30, 2023.

The objective of the interest rate swap is to mitigate the Company’s exposure to the impact of interest rate changes associated with our variable rate debt under the PJI Revolving Facility.

We have designated the interest rate swap as a cash flow hedge and will assess hedge effectiveness at regular intervals through the maturity date of June 30, 2025.

The interest rate swaps are marked to market at each reporting date, and any unrealized gains or losses are included in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets and reclassified to Net interest

expense in the Condensed Consolidated Statements of Operations in the same period or periods during which the hedged transaction affect earnings.

As of June 25, 2023, we have the following interest rate swap agreements:

Effective Dates Floating Rate Debt Fixed Rates

April 30, 2018 through April 30, 2023 $ 55 million 2.33 %

April 30, 2018 through April 30, 2023 $ 35 million 2.36 %

April 30, 2018 through April 30, 2023 $ 35 million 2.34 %

In the third quarter of 2021, our interest rate swaps were de-designated as cash flow hedges following the issuance of the Notes and remained undesignated as hedges through June 26, 2022.

For these de-designated hedges, the portion of gains or losses on the derivative instruments previously recognized in accumulated other comprehensive loss (“AOCL”) will be reclassified into earnings as adjustments to interest expense on a straight-line basis over the remaining life of the originally hedged transactions.

As of June 27, 2022, the interest rate swaps were re-designated as cash flow hedges to provide a hedge against changes in variable rate cash flows regarding fluctuations in the LIBOR rate utilized on the revolving credit facility.

Therefore, beginning in the third quarter of 2022, our interest rate swaps are accounted for utilizing cash flow hedge accounting treatment.

The interest rate swaps are marked to market at each reporting date and any unrealized gains or losses are included in accumulated other comprehensive income and reclassified to interest expense in the same period or periods during which the hedged transactions affect earnings.

The following table provides information on the location and amounts of our swaps in the accompanying condensed consolidated financial statements (in thousands):

June 23, 2023 through June 30, 2025 $ 50 million 4.55 %

The following table provides information on the location and amounts of our current and expired swaps in the accompanying condensed consolidated financial statements (in thousands):

Interest Rate Swap Derivatives

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Other current assets $ — $ 986

Other long-term liabilities $ 15 $ —

The effect of derivative instruments on the accompanying condensed consolidated financial statements is as follows (in thousands):

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of Operations

Interest rate swaps:

March 26, 2023 $ 259 Interest Expense $ ( 207 ) $ ( 9,021 )

March 27, 2022 $ 1,318 Interest Expense $ 535 $ ( 4,264 )

Interest paid, including payments made or received under the swaps, was $ 10.9 million and $ 10.1 million for the three months ended March 26, 2023 and March 27, 2022, respectively.

Interest rate swaps for the three months ended:

June 25, 2023 $ 1,165 Interest expense $ ( 36 ) $ ( 11,275 )

June 26, 2022 $ 1,445 Interest expense $ ( 735 ) $ ( 6,081 )

Interest rate swaps for the six months ended:

June 25, 2023 $ 1,424 Interest Expense $ ( 243 ) $ ( 20,296 )

June 26, 2022 $ 2,763 Interest Expense $ ( 200 ) $ ( 10,344 )

Interest paid, including payments made or received under the swaps, was $ 5.7 million and $ 2.4 million for the three months ended June 25, 2023 and June 26, 2022, respectively, and $ 16.6 million and $ 12.6 million for the six months ended June 25, 2023 and June 26, 2022, respectively.

Litigation, Commitments and Contingencies

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, is a conditionally certified collective action filed in May 2016 in the United States District Court for the Southern District of New York, alleging that corporate restaurant delivery drivers were not properly reimbursed for vehicle mileage and expenses in accordance with the Fair Labor Standards Act.

In July 2018, the District Court granted a motion to certify a conditional corporate collective class and the opt-in notice process has been completed.

In July 2018,

the District Court granted a motion to certify a conditional corporate collective class and the opt-in notice process has been completed.

As of the close of the opt-in period on October 29, 2018, 9,571 drivers opted into the collective class.

On September 30, 2022, the parties reached a settlement in principle to resolve the case.

Pursuant to the terms of the proposed settlement, in exchange for the Company’s payment of a total aggregate settlement amount of no more than $ 20.0 million subject to a claims-made process, all claims in the action will be dismissed, the litigation will be terminated, and the Company will receive a release.

The proposed settlement also includes resolution of a companion case, Hubbard, et al.

On December 19, 2022, the District Court granted preliminary approval of the settlement, and following a hearing on July 27, 2023, the District Court granted final approval of the settlement.

Pursuant to the terms of the settlement, which contemplated a total aggregate settlement amount of no more than $ 20.0 million subject to a claims-made process, all claims in the action will be dismissed, the litigation will be terminated, and the Company will receive a release.

The settlement also includes resolution of a companion case, Hubbard, et al.

Papa John’s International, Inc.

, pending in the United States District Court for the Western District of Kentucky.

The proposed settlement is subject to a claims-made process whereby unclaimed funds revert to the Company, and the Company is only responsible for payments to class and collective action members who timely submit a claim form.

Although the return rate for timely claims is unknown and not within the Company’s control, the Company estimates its actual exposure resulting from the settlement to be approximately $ 10.0 million.

On December 19, 2022, the District Court granted preliminary approval of the proposed settlement;

however, the settlement remains subject to final approval by the District Court and contains certain customary contingencies.

The settlement is subject to a claims-made process whereby unclaimed funds revert to the Company, and the Company is only responsible for payments to class and collective action members who timely submitted a claim form.

The Company is still awaiting a final accounting from the settlement administrator.

On January 18, 2023, the Company remitted $ 5.0 million to the settlement administrator as partial funding of the settlement in accordance with the terms of the applicable settlement agreement.

As of March 26, 2023, $ 5.0 million remains in Accrued expenses and other accrued liabilities in the Condensed Consolidated Balance Sheets.

The remainder of the settlement amount will be paid to the settlement administrator on or prior to August 10, 2023 in accordance with the settlement terms.

As of June 25, 2023, $ 5.0 million remains in Accrued expenses and other accrued liabilities in the Condensed Consolidated Balance Sheets.

The Company continues to deny any liability or wrongdoing in this matter.

In re Papa John’s Employee & Franchise Employee Antitrust Litigation is a putative class action filed in December 2018 in the United States District Court for the Western District of Kentucky.

The suit alleges that the “no-poaching” provision previously contained in the Company’s franchise agreement constituted an unlawful agreement or conspiracy in restraint of

trade and commerce in violation of Section 1 of the Sherman Antitrust Act.

The suit alleges that the “no-poaching” provision previously contained in the Company’s franchise agreement constituted an unlawful agreement or conspiracy in restraint of trade and commerce in violation of Section 1 of the Sherman Antitrust Act.

On April 14, 2022, the parties reached a settlement in principle to resolve the case.

Pursuant to the terms of the proposed settlement, in exchange for the Company’s payment of a total aggregate settlement amount of $ 5.0 million and other non-monetary consideration, all claims in the action will be dismissed, the litigation will be terminated, and the Company will receive a release.

The settlement amount was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operations for the three months ended March 27, 2022 and remained accrued in Accrued expenses and other accrued liabilities in the Condensed Consolidated Balance Sheets as of March 26, 2023.

The settlement amount was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operations in the first quarter of 2022 and remained accrued in Accrued expenses and other accrued liabilities in the Condensed Consolidated Balance Sheets as of June 25, 2023.

The proposed settlement is subject to approval by the District Court and contains certain customary contingencies.

2 unchanged sentences

On March 28, 2022, we refranchised our 51 % ownership interest in a 90 -restaurant consolidated joint venture in Texas for $ 14.0 million, net of transaction costs.

In connection with the divestiture, we recorded a one-time, non-cash charge of $ 8.4 million in Refranchising and impairment loss in the Condensed Consolidated Statements of Operations, which reflects net sale proceeds of $ 14.0 million, the noncontrolling interest of $ 4.2 million, and the recognition of an unearned royalty stream of $ 12.2 million to be recognized as revenue over the 10 -year term of the franchise agreement executed concurrent with the disposition in accordance with ASC 810, “ Consolidation .” The $ 8.4 million of the one-time, non-cash refranchising loss was recorded in the first quarter of 2022 and realized upon consummation of the sale in the second quarter.

Impairment of Reacquired Master Franchise Rights

6 unchanged sentences

The North America franchising segment consists of our franchise sales and support activities and derives its revenues from sales of franchise and development rights and collection of royalties from our franchisees located in the United States and Canada.

The North America commissary segment consists of the operations of our regional dough production and product distribution centers and derives its revenues principally from the sale and distribution of food and paper products to Domestic Company-owned and franchised restaurants in the United States and Canada.

The International segment principally consists of distribution sales to franchised Papa John’s restaurants located in the UK and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our International franchisees.

The North America commissary segment consists of the operations of our regional dough production and product distribution centers and derives its revenues principally from the sale and

distribution of food and paper products to Domestic Company-owned and franchised restaurants in the United States and Canada.

The International segment consists of the operations of all Company-owned restaurants located in the UK, as well as distribution sales to franchised Papa John’s restaurants located in the UK and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our International franchisees.

All other business units that do not meet the quantitative thresholds for determining reportable segments, which are not operating segments, we refer to as “all other,” which consists of operations that derive revenues from the sale, principally to Company-owned and franchised restaurants, of printing and promotional items, franchise contributions to marketing funds and information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms.

6 unchanged sentences

The following tables present our segment information.

Three Months Ended

(In thousands) March 26,

2023 March 27,

Three Months Ended Six Months Ended

(In thousands) June 25,

2023 June 26,

2022 June 25,

2023 June 26,

Domestic Company-owned restaurants $ 175,780 $ 171,411 $ 355,646 $ 370,176

7 unchanged sentences

North America commissaries 51,586 52,754 103,403 111,261

International 869 — 869 —

All others 16,348 15,889 33,183 35,268

6 unchanged sentences

International (b)

3,763 7,306 10,995 11,761

All others 1,343 2,187 4,500 5,906

3 unchanged sentences

Total operating income $ 34,912 $ 38,904 $ 72,708 $ 53,339

(In thousands) As of March 26, 2023

Property and equipment, net:

7 unchanged sentences

___________________________________

(a) The three months ended March 27, 2022 includes a one-time, non-cash charge of $ 8.4 million associated with the refranchising of the Company’s ownership interest in a 90 -restaurant joint venture, recorded as Refranchising and impairment loss.

(a) The six months ended June 26, 2022 includes a one-time, non-cash charge of $ 8.4 million associated with the refranchising of the Company’s ownership interest in a 90 -restaurant joint venture, recorded as Refranchising and impairment loss.

See “Note 10.

Divestitures” for additional information.

(b) The three months ended March 27, 2022 includes $ 3.5 million of one-time, non-cash reserves for certain accounts receivable and impairments of reacquired franchise rights.

(b) The three and six months ended June 25, 2023 includes $ 1.3 million of costs associated with repositioning the UK portfolio as well as transaction costs related to the acquisition of stores from franchisees.

The six months ended June 26, 2022 includes $ 3.5 million of one-time, non-cash reserves for certain accounts receivable and impairments of reacquired franchise rights.

See “Notes 2.

1 unchanged sentence

Divestitures” for additional information.

(c) The three months ended March 26, 2023 includes $ 1.4 million of severance and related costs associated with the transition of certain executives.

For the three months ended March 27, 2022 , Unallocated corporate expenses includes $ 13.9 million of one-time, non-cash reserves of certain notes receivable and $ 5.0 million for certain legal settlements.

(c) The three and six months ended June 25, 2023 includes $ 0.7 million and $ 2.0 million, respectively, of severance and related costs associated with the transition of certain executives.

The three months ended June 26, 2022 includes $ 1.5 million of advisory fees and severance costs associated with the transition of certain executives.

The six months ended June 26, 2022 includes $ 13.9 million of one-time, non-cash reserves of certain notes receivable, $ 5.0 million for certain legal settlements, and $ 1.5 million of advisory fees and severance costs associated with the transition of certain executives.

See “Notes 2.

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Reportable Segments

Three Months Ended March 26, 2023

Three Months Ended June 25, 2023

Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total

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Reportable Segments

Three Months Ended March 27, 2022

Three Months Ended June 26, 2022

Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total

8 unchanged sentences

Total revenues $ 171,411 $ 34,917 $ 219,383 $ 31,958 $ 64,996 $ 522,665

Reportable Segments

Six Months Ended June 25, 2023

Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total

Company-owned restaurant sales $ 355,646 $ — $ — $ 3,018 $ — $ 358,664

Franchise royalties and fees — 72,860 — 24,687 — 97,547

Commissary sales — — 522,949 39,235 — 562,184

Other revenues — — — 13,987 148,729 162,716

Eliminations — ( 2,077 ) ( 103,403 ) ( 869 ) ( 33,183 ) ( 139,532 )

Total segment revenues 355,646 70,783 419,546 80,058 115,546 1,041,579

International other revenues (a)

— — — ( 13,987 ) 13,987 —

(a) Other revenues as reported in the Condensed Consolidated Statements of Operations include $ 7.2 million and $ 8.1 million of revenues for the three months ended March 26, 2023 and March 27, 2022, respectively, that are part of the international reporting segment.

Total revenues $ 355,646 $ 70,783 $ 419,546 $ 66,071 $ 129,533 $ 1,041,579

Reportable Segments

Six Months Ended June 26, 2022

Major Products/Services Lines Domestic Company-owned restaurants North America franchising North America commissaries International All others Total

Company-owned restaurant sales $ 370,176 $ — $ — $ — $ — $ 370,176

Franchise royalties and fees — 71,286 — 25,478 — 96,764

Commissary sales — — 540,323 41,097 — 581,420

Other revenues — — — 15,414 150,213 165,627

Eliminations — ( 2,101 ) ( 111,261 ) — ( 35,268 ) ( 148,630 )

Total segment revenues 370,176 69,185 429,062 81,989 114,945 1,065,357

International other revenues (a)

— — — ( 15,414 ) 15,414 —

Total revenues $ 370,176 $ 69,185 $ 429,062 $ 66,575 $ 130,359 $ 1,065,357

___________________________________

(a) Other revenues as reported in the Condensed Consolidated Statements of Operations include $ 6.7 million and $ 14.0 million of revenues for the three and six months ended June 25, 2023, respectively, and $ 7.3 million and $ 15.4 million for the three and six months ended June 26, 2022, respectively, that are part of the International reporting segment.

These amounts include marketing fund contributions and sublease rental income from international franchisees in the United Kingdom that provide no significant contribution to operating income but must be reported on a gross basis under accounting requirements.

The related expenses for these Other revenues are reported in Other expenses in the Condensed Consolidated Statements of Operations.

UK Franchisee Acquisition

On June 2, 2023 (the “Acquisition Date”), the Company acquired 91 Papa Johns restaurants previously operated by the M25 division of Drake Food Service International in the United Kingdom (referred to as “DFSI”), the Company's largest franchisee, for total consideration of approximately $ 13.7 million.

The acquisition establishes a portfolio of Company-owned restaurants in the UK market and enables the Company to implement operating model enhancements in the restaurants including revenue management capabilities, product and technological innovation and operational efficiencies to improve sales and restaurant-level profitability.

The acquisition represents a part of the Company’s investments to reposition our UK portfolio and drive initiatives for future growth and profitability in the Company’s largest market outside of North America.

During the three months ended June 25, 2023, the Company incurred $ 1.3 million of acquisition-related costs, which were recorded within General and administrative expenses and within the International segment in the Condensed Consolidated Statements of Operations.

The results of DFSI’s operations after the Acquisition Date are included in the Company’s Condensed Consolidated Statements of Operations.

The revenues and income before income taxes were recorded within the International segment and were not material to the Company’s Condensed Consolidated Statements of Operations during the three months ended June 25, 2023.

Preliminary Acquisition Accounting

The DFSI acquisition has been accounted for as a business combination.

As such, the Company concluded that the consideration was measured at fair value and has recorded the preliminary estimated fair value of the assets acquired and liabilities assumed as of the Acquisition Date.

Total consideration was approximately $ 13.7 million, substantially all of which was pre-existing accounts receivable and notes receivable and was classified as a noncash investing transaction within the Condensed Consolidated Statements of Cash Flows during the six months ended June 25, 2023.

Assets acquired include approximately $ 9.1 million of property and equipment, net, $ 0.3 million of inventories and other assets and $ 4.3 million of goodwill.

The total goodwill recognized in conjunction with the DFSI acquisition, all of which is expected to be deductible for tax purposes, has been assigned to the International operating segment.

The purchase price exceeded the fair value of the net assets acquired, which resulted in the recognition of goodwill, primarily due to synergies created from expected future benefits stemming from implementation of the Company’s operational capabilities and further control of the Company’s brand name in our most prominent international market.

Goodwill also includes certain other benefits that do not qualify for recognition as intangible assets, such as an assembled workforce.

The amounts recorded as a result of our preliminary acquisition accounting are subject to change and further refinement.

The Company is still finalizing certain working capital adjustments with the sellers, assessing the condition and finalizing the fair value of acquired property and equipment, and gathering information regarding leases and other assets.

The Company expects these items to be finalized prior to the one-year anniversary date of the acquisition.

The following summarizes changes in the Company’s goodwill by reportable segment (in thousands):

Domestic Company-owned restaurants International All others Total

Balance at December 25, 2022 $ 55,507 $ 14,673 $ 436 $ 70,616

Acquisitions (a)

1,102 4,274 — 5,376

Foreign currency adjustments — 631 — 631

Balance at June 25, 2023 $ 56,609 $ 19,578 $ 436 $ 76,623

(s) Goodwill from acquisitions during the six months ended June 25, 2023 include $ 4.3 million from the DFSI acquisition described above as well as $ 1.1 million related to a Domestic store acquisition.

The Domestic acquisition was classified as a noncash investing transaction within the Condensed Consolidated Statements of Cash Flows during the six months ended June 25, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements