What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 247 added, 134 removed, 579 unchanged (40% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts) March 30,

(In thousands, except per share amounts) June 29,

2025 December 29,

32 unchanged sentences

Common stock ($ 0.01 par value per share;

issued 49,283 at March 30, 2025 and 49,283 at December 29, 2024)

issued 49,292 at June 29, 2025 and 49,283 at December 29, 2024)

Additional paid-in capital 452,787 452,449

1 unchanged sentence

Retained earnings 229,868 241,717

Treasury stock ( 16,555 shares at March 30, 2025 and 16,637 shares at December 29, 2024, at cost)

Treasury stock ( 16,539 shares at June 29, 2025 and 16,637 shares at December 29, 2024, at cost)

( 1,109,178 ) ( 1,115,729 )

7 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended

(In thousands, except per share amounts) March 30,

2025 March 31,

Three Months Ended Six Months Ended

(In thousands, except per share amounts) June 29,

2025 June 30,

2024 June 29,

2025 June 30,

Company-owned restaurant sales $ 178,989 $ 184,640 $ 352,870 $ 375,891

23 unchanged sentences

Diluted weighted average common shares outstanding 32,969 32,853 32,932 32,871

(a) Note that we have changed the signage of income tax expense from historic presentation for consistency purposes.

(a) The signage of Income tax expense has been changed from the historic presentation for purposes of signage consistency with other expense items.

See accompanying notes.

2 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended

(In thousands) March 30,

2025 March 31,

Three Months Ended Six Months Ended

(In thousands) June 29,

2025 June 30,

2024 June 29,

2025 June 30,

Net income $ 9,671 $ 12,536 $ 19,014 $ 27,450

2 unchanged sentences

Interest rate swaps (1)

( 555 ) 88 ( 463 ) 956

Other comprehensive income (loss), before tax 1,975 253 3,165 575

4 unchanged sentences

Income tax effect ( 402 ) ( 57 ) ( 676 ) ( 130 )

Other comprehensive income (loss), net of tax 916 249

Other comprehensive income, net of tax 1,573 196 2,489 445

Comprehensive income before attribution to noncontrolling interests 11,244 12,732 21,503 27,895

3 unchanged sentences

___________________________________

(1) Amounts reclassified out of accumulated other comprehensive loss into net interest income (expense) include $( 56 ) and $ 200 for the three months ended March 30, 2025 and March 31, 2024, respectively.

(2) The income tax effects of amounts reclassified out of accumulated other comprehensive loss were $ 13 and $( 45 ) for the three months ended March 30, 2025 and ended March 31, 2024, respectively.

(1) Amounts reclassified out of accumulated other comprehensive loss into net interest income (expense) include $ 14 and $( 41 ) for the three and six months ended June 29, 2025, respectively and $ 197 and $ 397 for the three and six months ended June 30, 2024, respectively.

(2) The income tax benefit (expense) effects of amounts reclassified out of accumulated other comprehensive loss were $( 4 ) and $ 9 for the three and six months ended June 29, 2025, respectively and $( 45 ) and $( 90 ) for the three and six months ended June 30, 2024, respectively.

See accompanying notes.

13 unchanged sentences

For the three months ended

March 30, 2025

June 29, 2025

Balance at March 30, 2025 32,728 $ 493 $ 449,625 $ ( 7,540 ) $ 235,794 $ ( 1,110,306 ) $ 15,125 $ ( 416,809 )

Net income (1)

— — — — 9,531 — 118 9,649

Other comprehensive income, net of tax — — — 1,573 — — — 1,573

Dividends on common stock of ($ 0.46 per share)

— — 24 — ( 15,457 ) — — ( 15,433 )

Exercise of stock options 9 — 397 — — — — 397

Stock-based compensation expense — — 3,824 — — — — 3,824

Issuance of restricted stock 7 — ( 391 ) — — 376 — ( 15 )

Tax effect of restricted stock awards ( 3 ) — ( 88 ) — — — — ( 88 )

Distributions to noncontrolling interests — — — — — — — —

Other 12 — ( 604 ) — — 752 — 148

Balance at June 29, 2025 32,753 $ 493 $ 452,787 $ ( 5,967 ) $ 229,868 $ ( 1,109,178 ) $ 15,243 $ ( 416,754 )

For the six months ended

June 29, 2025

Balance at December 29, 2024 32,646 $ 493 $ 452,449 $ ( 8,456 ) $ 241,717 $ ( 1,115,729 ) $ 15,310 $ ( 414,216 )

1 unchanged sentence

— — — — 18,753 — 209 18,962

Other comprehensive income (loss), net of tax — — — 916 — — — 916

Other comprehensive income, net of tax — — — 2,489 — — — 2,489

Dividends on common stock of ($ 0.92 per share)

6 unchanged sentences

Other 15 — ( 791 ) — — 960 — 169

Balance at March 30, 2025 32,728 $ 493 $ 449,625 $ ( 7,540 ) $ 235,794 $ ( 1,110,306 ) $ 15,125 $ ( 416,809 )

(1) Net income to the Company for the three months ended March 30, 2025 excludes $ 30 allocable to the redeemable noncontrolling interests for our joint venture arrangements.

(2) At March 30, 2025, the accumulated other comprehensive loss of $ 7,540 was comprised of net unrealized foreign currency translation loss of $ 7,486 and net unrealized loss on the interest rate swap agreements of $ 54 .

Balance at June 29, 2025 32,753 $ 493 $ 452,787 $ ( 5,967 ) $ 229,868 $ ( 1,109,178 ) $ 15,243 $ ( 416,754 )

(1) Net income to the Company for the three and six months ended June 29, 2025 excludes $ 22 and $ 52 , respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements.

(2) At June 29, 2025, the accumulated other comprehensive loss of $ 5,967 was comprised of net unrealized foreign currency translation loss of $ 5,485 and net unrealized loss on the interest rate swap agreements of $ 482 .

See accompanying notes.

13 unchanged sentences

For the three months ended

March 31, 2024

June 30, 2024

Balance at March 31, 2024 32,604 $ 493 $ 444,793 $ ( 7,554 ) $ 218,608 $ ( 1,118,196 ) $ 15,433 $ ( 446,423 )

Net income (1)

— — — — 12,243 — 202 12,445

Other comprehensive income, net of tax — — — 196 — — — 196

Dividends on common stock ($ 0.46 per share)

— — 32 — ( 15,051 ) — — ( 15,019 )

Exercise of stock options 2 — 92 — — — — 92

Stock-based compensation expense — — 2,915 — — — — 2,915

Issuance of restricted stock 16 — ( 900 ) — — 900 — —

Tax effect of restricted stock awards ( 3 ) — ( 138 ) — — — — ( 138 )

Distributions to noncontrolling interests — — — — — — ( 117 ) ( 117 )

Other 3 — ( 247 ) — — 156 — ( 91 )

Balance at June 30, 2024 32,622 $ 493 $ 446,547 $ ( 7,358 ) $ 215,800 $ ( 1,117,140 ) $ 15,518 $ ( 446,140 )

For the six months ended

June 30, 2024

Balance at December 31, 2023 32,488 $ 492 $ 452,290 $ ( 7,803 ) $ 219,027 $ ( 1,123,098 ) $ 15,476 $ ( 443,616 )

1 unchanged sentence

— — — — 26,879 — 381 27,260

Other comprehensive income (loss), net of tax — — — 249 — — — 249

Other comprehensive income, net of tax — — — 445 — — — 445

Dividends on common stock of ($ 0.92 per share)

1 unchanged sentence

Exercise of stock options 20 1 932 — — — — 933

Acquisition of Company common stock — — — — — — — —

Stock-based compensation expense — — 2,545 — — — — 2,545

3 unchanged sentences

Other 5 — ( 344 ) — — 348 — 4

Balance at March 31, 2024 32,604 $ 493 $ 444,793 $ ( 7,554 ) $ 218,608 $ ( 1,118,196 ) $ 15,433 $ ( 446,423 )

(1) Net income to the Company for the three months ended March 31, 2024 excludes $ 99 allocable to the redeemable noncontrolling interests for our joint venture arrangements.

(2) At March 31, 2024, the accumulated other comprehensive loss of $ 7,554 was comprised of net unrealized foreign currency translation loss of $ 7,912 and net unrealized gain on the interest rate swap agreements of $ 358 .

Balance at June 30, 2024 32,622 $ 493 $ 446,547 $ ( 7,358 ) $ 215,800 $ ( 1,117,140 ) $ 15,518 $ ( 446,140 )

(1) Net income to the Company for the three and six months ended June 30, 2024 excludes $ 91 and $ 190 , respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements.

(2) At June 30, 2024, the accumulated other comprehensive loss of $ 7,358 was comprised of net unrealized foreign currency translation loss of $ 7,784 and net unrealized gain on the interest rate swap agreements of $ 426 .

See accompanying notes.

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Three Months Ended

(In thousands) March 30,

2025 March 31,

Six Months Ended

(In thousands) June 29,

2025 June 30,

Operating activities

5 unchanged sentences

Stock-based compensation expense 7,493 2,545

Impairment loss 6,308 7,554

Refranchising and impairment loss 8,087 14,713

Loss on disposal of property and equipment 2,576 965

14 unchanged sentences

Purchases of property and equipment ( 30,305 ) ( 29,155 )

Purchases of property and equipment related to damages from natural disasters ( 1,366 ) —

Insurance proceeds related to damages from natural disasters 2,900 —

Notes issued — ( 153 )

Repayments of notes issued 4,534 1,794

Proceeds from dispositions and refranchising, net of cash transferred — 1,495

Proceeds from investments 4,739 2,275

20 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Unaudited)

March 30, 2025

June 29, 2025

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 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 28, 2025.

Operating results for the three and six months ended June 29, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 28, 2025.

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.

7 unchanged sentences

During the year ended December 29, 2024, the Company implemented several financial statement changes in its Annual Report on Form 10-K, concurrent with the adoption of Accounting Standard Update (“ASU”) 2023-07, “Improvements to Reportable Segment Disclosures.” These changes evolve and modernize our financial statements and footnotes to increase transparency and better reflect management’s key performance metrics.

Presentation changes to the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows have been applied retrospectively, and as such, the results from the three months ended March 31, 2024 have been reclassified for consistency with the current year presentation.

Presentation changes to the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows have been applied retrospectively, and as such, the results from the three and six months ended June 30, 2024 have been reclassified for consistency with the current year presentation.

Additionally, during the year ended December 29, 2024, the Company updated its internal cost allocation methodology to better reflect current levels of time and effort spent managing our different segments.

These updates resulted in a higher allocation of previously unallocated corporate expenses to primarily each of the North America franchising and International segments.

This update in methodology did not impact total reported expenses and was implemented prospectively beginning with the year ended December 29, 2024, and as such comparative information has been recast.

This update in methodology did not impact total reported expenses and was implemented prospectively beginning with the year ended December 29, 2024, and as such prior-period comparative information has been recast.

Variable Interest Entity

6 unchanged sentences

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.

Significant items that are subject to such estimates and assumptions include the allowance for credit

losses on accounts and notes receivable, property and equipment, net and impairment of long-lived assets, insurance reserves and tax reserves.

accompanying notes.

Significant items that are subject to such estimates and assumptions include the allowance for credit losses on accounts and notes receivable, property and equipment, net and impairment of long-lived assets, insurance reserves and tax reserves.

Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates.

Noncontrolling Interests

Papa Johns has joint venture arrangements in which there are noncontrolling interests held by third parties that includ ed 98 restaurants at March 30, 2025 and March 31, 2024, respectively.

Papa Johns has joint venture arrangements in which there are noncontrolling interests held by third parties that includ ed 98 restaurants at June 29, 2025 and June 30, 2024, respectively.

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

Net income attributable to these joint ventures for the three months ended March 30, 2025 and March 31, 2024 was as follows:

Three Months Ended

(In thousands) March 30,

2025 March 31,

Net income attributable to these joint ventures for the three and six months ended June 29, 2025 and June 30, 2024 was as follows:

Three Months Ended Six Months Ended

(In thousands) June 29,

2025 June 30,

2024 June 29,

2025 June 30,

Papa John’s International, Inc.

$ 327 $ 739 $ 602 $ 1,331

Redeemable noncontrolling interests 22 91 52 190

31 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 30, 2025 and December 29, 2024 are as follows:

Our financial assets and liabilities that were measured at fair value on a recurring basis as of June 29, 2025 and December 29, 2024 are as follows:

Fair Value Measurements

1 unchanged sentence

Value Level 1 Level 2 Level 3

March 30, 2025

June 29, 2025

Financial assets:

1 unchanged sentence

$ 27,344 $ 27,344 $ — $ —

Interest rate swaps (b)

$ 233 $ — $ 233 $ —

Financial liabilities:

12 unchanged sentences

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”).

There were no transfers among levels within the fair value hierarchy during the three months ended March 30, 2025 or fiscal year 2024.

Debt” for further discussion on the new interest rate swaps executed during the second quarter of 2025.

There were no transfers among levels within the fair value hierarchy during the three and six months ended June 29, 2025 or fiscal year 2024.

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.

3 unchanged sentences

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 30, 2025 and December 29, 2024:

March 30, 2025 December 29, 2024

June 29, 2025 December 29, 2024

(In thousands) Carrying

11 unchanged sentences

Write-offs charged against the allowance ( 934 ) —

Balance at March 30, 2025 $ 8,249 $ 16,492

Balance at June 29, 2025 $ 9,166 $ 17,033

Impairment of Long-lived Assets

The Company evaluates its property and equipment and other long-lived assets for potential indicators of impairment at least annually, or as facts and circumstances arise that indicate the carrying value of the asset group may not be recoverable.

For Domestic Company-owned restaurants, the evaluation is performed at the operating market level while International Company-owned restaurants are evaluated at the restaurant level as these represent the lowest level for which identifiable cash flows and are largely independent of the cash flows of other assets and liabilities.

For Domestic Company-owned restaurants, the evaluation is performed at the operating market level while International Company-owned restaurants are evaluated at the restaurant level as these respective levels represent the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

If the carrying amount of the long-lived asset group exceeds the amount of estimated future undiscounted cash flows, the fair value of the asset group is estimated and an impairment loss is recorded if the carrying value exceeds the estimated fair value.

2 unchanged sentences

During the first quarter of 2025, a tornado caused real and personal property damage to the Company’s leased Quality Control Center (“QC Center”) in Grand Prairie, Texas.

The Company recorded pre-tax expenses of $ 0.9 million during the three months ended March 30, 2025 related to these damages, which primarily reflect operating lease right-of-use asset impairment charges related to the leased property offset by expected property-related insurance proceeds.

The Company recorded pre-tax expenses of $ 0.9 million during the six months ended June 29, 2025 related to these damages, which primarily reflect operating lease right-of-use asset impairment charges related to the leased property offset by expected property-related insurance proceeds.

Expenses incurred and the related anticipated insurance proceeds were recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations.

During the second quarter of 2025, a tornado caused real and personal property damage to the Company’s restaurant support center and QC Center in Louisville, Kentucky.

The Company recorded asset impairment charges of $ 2.7 million and incurred additional operating expenses of $ 1.5 million during the three months ended June 29, 2025, for which we recorded an anticipated insurance recovery as we believe such losses are probable of recovery under our insurance policy.

The Company received $ 3.5 million of insurance proceeds during the three months ended June 29, 2025 related to the two incidents, of which $ 2.9 million were classified as cash inflows from investing activities and $ 0.6 million were classified as cash inflows from operating activities based on the nature of the underlying losses and expected usage of the proceeds.

To the extent that proceeds received from our insurer in future periods exceed losses recognized in the financial statements, we may record income within our Condensed Consolidated Statements of Operations once such insurance proceeds are

realized or realizable.

Neither of the tornadoes had a significant impact on our operations, as our other QC Centers were able to ensure that restaurants were adequately supplied.

Recent Accounting Pronouncements

3 unchanged sentences

The ASU is effective for fiscal years beginning after December 15, 2024 and shall be applied prospectively.

The Company is currently evaluating the standard and determining the extent of additional disclosures that will be required.

The Company is finalizing its assessment of the additional disclosure requirements and does not expect the adoption to have a material impact on its financial position or results of operations.

In November 2024, the FASB issued ASU No.

2024-03, “ Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.” The ASU includes

required disclosures in the notes to the consolidated financial statements of specific information about certain costs and expenses.

Disaggregation of Income Statement Expenses.” The ASU includes required disclosures in the notes to the consolidated financial statements of specific information about certain costs and expenses.

The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted and the standard may be applied either prospectively or retrospectively.

The Company is currently evaluating the standard and determining the extent of additional disclosures that will be required.

The Company is in the process of assessing the impact of the new standard, including an evaluation of the Company’s financial systems and availability of data to meet the requirements.

Lessor Operating Leases

The Company subleases certain retail space to our franchisees in the UK, which are primarily operating leases.

At March 30, 2025, we leased and subleased approximately 350 Papa Johns restaurants to franchisees in the UK.

At June 29, 2025, we leased and subleased approximately 340 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 $ 2.6 million and $ 2.3 million for the three months ended March 30, 2025 and March 31, 2024, respectively, within Other revenues in the Condensed Consolidated Statements of Operations.

The Company recognized total sublease income of $ 2.8 million and $ 5.4 million for the three and six months ended June 29, 2025, respectively, and $ 2.1 million and $ 4.4 million for the three and six months ended June 30, 2024, 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 2034.

As of March 30, 2025, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $ 9.8 million.

As of June 29, 2025, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $ 9.1 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 30, 2025 March 31, 2024

Six Months Ended

(In thousands) June 29, 2025 June 30, 2024

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

2 unchanged sentences

Operating cash flows from operating leases (a)

21,112 19,710

Right-of-use assets obtained in exchange for new finance lease liabilities 15,738 2,988

27 unchanged sentences

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

During the three months ended March 30, 2025 and March 31, 2024, the Company recognized $ 9.7 million and $ 8.1 million in revenue, respectively, related to deferred revenue.

During the three and six months ended June 29, 2025, the Company recognized $ 7.9 million and $ 17.7 million, respectively and during the three and six months ended June 30, 2024, the Company recognized $ 8.2 million and $ 16.3 million, respectively, related to deferred revenue.

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

March 30, 2025 December 29, 2024 Change

June 29, 2025 December 29, 2024 Change

Unearned franchise fees and royalties $ 20,652 $ 21,860 $ ( 1,208 )

4 unchanged sentences

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

Contract assets were approximately $ 17.3 million and $ 16.6 million, respectively, at March 30, 2025 and December 29, 2024.

For the three months ended March 30, 2025 and March 31, 2024, revenue was reduced approximately $ 1.5 million and $ 1.2 million, respectively, for the amortization of contract assets over the applicable contract terms.

Contract assets were approximately $ 17.2 million and $ 16.6 million, respectively, at June 29, 2025 and December 29, 2024.

Revenue was reduced approximately $ 1.9 million and $ 3.5 million for the three and six months ended June 29, 2025 and approximately $ 1.4 million and $ 2.6 million for the three and six months ended June 30, 2024, 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.

3 unchanged sentences

Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total

Franchise fees $ 3,285 $ 2,945 $ 2,720 $ 2,475 $ 2,229 $ 4,985 $ 18,639

At March 30, 2025, approximately $ 2.5 million of area development fees related to unopened restaurants and International unearned franchise fees are included in Deferred revenue.

Unearned franchise fees and royalties $ 3,412 $ 2,932 $ 2,691 $ 2,450 $ 2,194 $ 4,604 $ 18,283

At June 29, 2025, approximately $ 2.4 million of area development fees related to unopened restaurants and International unearned franchise fees are included in Deferred revenue.

Timing of revenue recognition is dependent upon the timing of restaurant 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 30, 2025 and December 29, 2024.

The Company’s outstanding shares of common stock, net of repurchased shares of common stock held as treasury stock, were 32.7 million shares at March 30, 2025, compared to 32.6 million shares at December 29, 2024.

The Company has authorized 100.0 million shares of common stock as of June 29, 2025 and December 29, 2024.

The Company’s outstanding shares of common stock, net of repurchased shares of common stock held as treasury stock, were 32.8 million shares at June 29, 2025, compared to 32.6 million shares at December 29, 2024.

Share Repurchase Program

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

There was no share repurchase activity during the three months ended March 30, 2025 or March 31, 2024.

Approximately $ 90.2 million remained available under the Company’s share repurchase program as of March 30, 2025.

There was no share repurchase activity during the three and six months

ended June 29, 2025 or June 30, 2024.

Approximately $ 90.2 million remained available under the Company’s share repurchase program as of June 29, 2025.

The timing and volume of share repurchases under the Company’s share repurchase programs may be executed at the discretion of management on an opportunistic basis, subject to market and business conditions, regulatory requirements and other factors, or pursuant to trading plans or other arrangements.

2 unchanged sentences

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

The Company paid aggregate cash dividends of approximately $ 15.2 million ($ 0.46 per share) for the three months ended March 30, 2025.

On May 1, 2025, our Board of Directors declared a second quarter dividend of $ 0.46 per common share (approximately $ 15.4 million in the aggregate), which will be paid on May 30, 2025 to stockholders of record as of the close of business on May 19, 2025.

The Company paid aggregate cash dividends of approximately $ 30.5 million ($ 0.92 per share) for the six months ended June 29, 2025.

On August 1, 2025, our Board of Directors declared a third quarter dividend of $ 0.46 per common share (approximately $ 15.4 million in the aggregate), which will be paid on August 29, 2025 to stockholders of record as of the close of business on August 18, 2025.

The declaration and payment of any future dividends will be at the discretion of our Board of Directors.

4 unchanged sentences

Under the two-class method, total dividends provided to the holders of participating securities are subtracted from net income attributable to the Company to determine net income attributable to common shareholders.

The Company may, at its sole discretion, require any dividends

paid on the unvested restricted stock awards to be paid in shares rather than in cash, which could then be forfeited if the employee forfeits the underlying awards.

The Company may, at its sole discretion, require any dividends paid on the unvested restricted stock awards to be paid in shares rather than in cash, which could then be forfeited if the employee forfeits the underlying awards.

Basic earnings per common share are computed by dividing net income attributable to common shareholders by the weighted-average common shares outstanding.

2 unchanged sentences

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

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Calculation of net income attributable to common shareholders

8 unchanged sentences

Dilutive effect of outstanding equity awards (a)

120 123 124 183

Diluted weighted average common shares outstanding 32,969 32,853 32,932 32,871

1 unchanged sentence

___________________________________

(a) Excludes 219,417 and 103,000 shares underlying equity awards for the three months ended March 30, 2025 and March 31, 2024, respectively, as the effect of including such awards would have been anti-dilutive.

(a) Excludes 294,000 and 257,000 shares underlying equity awards for the three and six months ended June 29, 2025 and 377,000 and 207,000 shares underlying awards for the three and six months ended June 30, 2024, respectively, as the effect of including such awards would have been anti-dilutive.

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

12 unchanged sentences

The Second Amended and Restated Credit Agreement provides for a senior secured term loan in a principal amount of $ 200.0 million (the “Term Loan”) and a senior secured revolving credit facility in an aggregate available principal amount of $ 600.0 million (the “PJI Revolving Facility” together with the Term Loan, the “PJI Credit Facilities”), of which up to $ 40.0 million is available as swingline loans and up to $ 80.0 million as letters of credit.

The PJI Credit Facilities will mature on March 26, 2030 (the “Maturity Date”) with term loans amortizing in quarterly installments commencing on June 30, 2026 in amounts as set forth in the Second Amended and Restated Credit Agreement and the unpaid balance maturing on the Maturity Date.

The remaining availability under the PJI Revolving Facility was approximately $ 450.1 million as of March 30, 2025.

Future principal maturities under the Term Loan by year are as follows (in thousands):

Thereafter 145,000

Total $ 200,000

The PJI Credit Facilities will mature on March 26, 2030 (the “Maturity Date”) with term loans amortizing in quarterly installments

commencing on June 30, 2026 in amounts as set forth in the Second Amended and Restated Credit Agreement and the unpaid balance maturing on the Maturity Date.

The remaining availability under the PJI Revolving Facility was approximately $ 466.2 million as of June 29, 2025.

The Term Loan was advanced in full at the closing of the Second Amended and Restated Credit Agreement, with the proceeds used to repay borrowings outstanding under the senior secured revolving credit facility under the Previous Credit Agreement.

The Company incurred $ 3.2 million of lender and third-party fees, which are being amortized into Net interest expense over the term of the Second Amended and Restated Credit Agreement.

Refer to Note 12 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 29, 2024 for further description of other key provisions and covenant requirements under the Second Amended and Restated Credit Agreement, which are similar to the terms of the Previous Credit Agreement.

The covenant requirements under the Second Amended and Restated Credit Agreement remain in place and are similar to the terms of the Previous Credit Agreement;

refer to Note 12 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 29, 2024 for further description of covenant terms under the Previous Credit Agreement.

PJMF Revolving Facility

3 unchanged sentences

The borrowings under the PJMF Revolving Facility accrue interest at a variable rate of a one month SOFR plus 1.975 %.

The Company did no t have any borrowings under the PJMF Revolving Facility as of March 30, 2025 or December 29, 2024.

The Company did no t have any borrowings under the PJMF Revolving Facility as of June 29, 2025 or December 29, 2024.

The PJMF operating results and the related debt outstanding do not impact the financial covenants under the Company’s Second Amended and Restated Credit Agreement.

1 unchanged sentence

The Company has historically entered into interest rate swaps with the objective of mitigating the Company’s exposure to the impact of interest rate changes associated with our variable rate debt under the PJI Credit Facilities.

As of March 30, 2025, we have the following interest rate swap agreements:

During the three months ended June 29, 2025, the Company executed two new interest rate swaps, each with notional values of $ 50.0 million, to replace the Company’s interest rate swaps that matured on June 30, 2025.

As of June 29, 2025, we had the following interest rate swap agreements:

Effective Dates Floating Rate Debt Fixed Rates

1 unchanged sentence

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

April 29, 2025 through April 25, 2028 $ 50 million 3.49 %

June 30, 2025 through June 30, 2028 $ 50 million 3.72 %

We have designated the interest rate swaps as cash flow hedges and assess hedge effectiveness on a quarterly basis.

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

On April 25, 2025, as part of our strategy to manage interest rate risk exposure beyond the maturity date of the interest rate swaps listed above, the Company entered into a new interest rate swap with a notional value of $ 50.0 million at a 3.49 % fixed rate that matures on April 25, 2028.

The interest rate swaps are recorded at fair value 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.

The following table provides information on the location and amounts of our current swaps in the accompanying Condensed Consolidated Balance Sheets (in thousands):

2 unchanged sentences

2025 Fair Value

Prepaid and other current assets $ 233 $ —

Accrued expenses and other current liabilities $ 858 $ 161

11 unchanged sentences

Interest rate swaps for the three months ended:

March 30, 2025 $ 71 Interest expense $ ( 56 ) $ ( 10,079 )

March 31, 2024 $ 672 Interest expense $ 200 $ ( 11,063 )

Net interest paid, including payments made or received under the swaps, was $ 17.6 million and $ 14.5 million for the three months ended March 30, 2025 and March 31, 2024, respectively.

June 29, 2025 $ ( 429 ) Interest expense $ 14 $ ( 10,584 )

June 30, 2024 $ 68 Interest expense $ 197 $ ( 10,896 )

Interest rate swaps for the six months ended:

June 29, 2025 $ ( 358 ) Interest expense $ ( 41 ) $ ( 20,663 )

June 30, 2024 $ 740 Interest expense $ 397 $ ( 21,959 )

Net interest paid, including payments made or received under the swaps, was $ 5.6 million and $ 23.2 million for the three and six months ended June 29, 2025, respectively, and $ 5.8 million and $ 20.4 million for the three and six months ended June 30, 2024, respectively.

Restructuring

2 unchanged sentences

During fiscal 2023 and 2024, the Company implemented approved initiatives under the International Transformation Plan related to establishing new regional hubs across APAC (Asia Pacific), EMEA (Europe, Middle East and Africa), and Latin America.

During 2024, the Company commenced the next phase of the International Transformation Plan, which involves strategic restaurant closures and divestitures in the UK in order to optimize the Company’s UK restaurant portfolio and improve overall profitability by closing unprofitable locations and enhancing profitability across the remaining portfolio of Company-owned restaurants.

Execution on this phase resulted in the closure of 43 underperforming UK Company-owned restaurants and 30 franchised locations during 2024.

As of March 31, 2024, indicators of potential impairment existed specific to the pending UK Company-owned restaurant closures, and as such the Company performed a recoverability test and determined that the carrying amount of the related asset groups were not recoverable.

As a result, we recognized impairment charges during the three months ended March 31, 2024 for the amount by which the carrying value exceeded the estimated fair value of the asset groups.

Fair values were determined based on the income approach, specifically a discounted cash flow model, primarily using estimated sublease income considering market rental rates.

Management judgement is involved in determining the estimated fair value and includes uncertainties that under different assumptions and circumstances could drive material changes in the fair value determination.

During 2024, the Company commenced the next phase of the International Transformation Plan, which involved strategic restaurant closures and divestitures in the UK in order to optimize the Company’s UK restaurant portfolio and improve overall profitability by closing unprofitable locations and mitigating remaining occupancy costs at closed locations, as well as enhancing profitability across the remaining portfolio of Company-owned restaurants.

Execution on this phase resulted in the closure of 43 underperforming UK Company-owned restaurants and 32 franchised locations during 2024 and 2025.

We recognized impairment charges of $ 1.4 million and $ 9.0 million during the three and six months ended June 30, 2024, respectively, for the amount by which the carrying value exceeded the estimated fair value of the asset groups.

During 2024, the Company also completed the refranchising of 60 formerly Company-owned restaurants to primarily existing franchisees.

We have completed substantially all of the strategic restaurant closures in the UK market and the Company’s efforts are turning towards growth opportunities and mitigating closure-related costs as we complete optimization of the portfolio.

The following table summarizes restructuring related costs recorded for the three months ended March 30, 2025 and March 31, 2024 (in thousands):

Three Months Ended

2025 March 31,

We have completed substantially all of the strategic restaurant closures in the UK market and the Company’s efforts during 2025 have turned towards growth opportunities and mitigating closure-related costs as we complete optimization of the portfolio.

The following table summarizes restructuring related costs recorded for the three and six months ended June 29, 2025 and June 30, 2024 (in thousands):

Three Months Ended Six Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Professional services and other related costs $ 780 $ 1,355 $ 2,214 $ 2,701

Loss on franchisee notes receivable 1,050 1,564 2,161 1,564

Lease terminations and other lease related costs ( 365 ) —

Long-lived asset impairment charges 801 1,422 801 8,976

Lease terminations and other lease related costs ( 195 ) 306 ( 560 ) 306

Employee termination costs 15 ( 199 ) 15 444

Loss on refranchising Company-owned restaurants — 1,737 — 1,737

Total international transformation costs $ 2,451 $ 6,185 $ 4,631 $ 15,728

Stock-based compensation forfeitures on unvested awards ( 45 ) ( 20 )

Total international transformation costs, net of stock-based award forfeitures $ 2,135 $ 9,523

Stock-based compensation expense/(forfeitures on unvested awards) 24 ( 56 ) ( 21 ) ( 76 )

Total international transformation costs, inclusive of stock-based award expense/forfeitures $ 2,475 $ 6,129 $ 4,610 $ 15,652

The Company has incurred total restructuring related costs of $ 34.1 million since commencement of the International Transformation Plan, all of which were included in General and administrative expenses in the Condensed Consolidated Statements of Operations.

Total estimated pre-tax costs associated with the International Transformation Plan are approximately $ 33 million to $ 35 million (inclusive of the $ 31.6 million incurred through the first quarter of 2025), substantially all of which will be recorded within our International segment, and we expect to incur the remainder of these costs through 2025.

Total estimated pre-tax costs associated with the International Transformation Plan are approximately $ 35 million (inclusive of the $ 34.1 million incurred through the second quarter of 2025), substantially all of which will be recorded within our International segment, and we expect to incur the remainder of these costs through 2025.

The following table presents changes in the balance of accrued expenses relating to approved initiatives, which are recorded in accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets (in thousands):

3 unchanged sentences

Payments ( 70 ) ( 4,198 ) ( 771 ) ( 5,039 )

Balance as of March 30, 2025 $ 133 $ 877 $ 1,621 $ 2,631

Balance as of June 29, 2025 $ 78 $ 351 $ 1,302 $ 1,731

Litigation, Commitments and Contingencies

6 unchanged sentences

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 in the first quarter of 2022 and remained accrued in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets as of March 30, 2025.

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

24 unchanged sentences

A reconciliation to Company results is included in the following section.

Three Months Ended March 30, 2025

Three Months Ended June 29, 2025

Domestic Company-owned restaurants North America franchising North America commissaries International Total

11 unchanged sentences

Segment adjusted EBITDA $ 9,864 $ 26,843 $ 19,652 $ 5,637 $ 61,996

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Domestic Company-owned restaurants North America franchising North America commissaries International Total

12 unchanged sentences

Segment adjusted EBITDA $ 13,474 $ 27,207 $ 15,042 $ 3,713 $ 59,436

Six Months Ended June 29, 2025

Domestic Company-owned restaurants North America franchising North America commissaries International Total

Revenues from external customers $ 346,592 $ 70,911 $ 427,765 $ 83,295 $ 928,563

Intersegment revenues — 2,503 104,271 — 106,774

Segment revenue $ 346,592 $ 73,414 $ 532,036 $ 83,295 $ 1,035,337

Less segment expenses (a) :

COS - Product Costs $ 105,333 $ — $ 380,024 $ 24,220 $ 509,577

COS - Salaries & Benefits 115,180 — 60,043 3,531 178,754

COS - Other (d)

90,485 — 32,659 16,440 139,584

General & Administrative 20,698 19,323 20,306 18,126 78,453

Other Segment Expenses (c)

— — — 9,959 9,959

Segment adjusted EBITDA $ 14,896 $ 54,091 $ 39,004 $ 11,019 $ 119,010

Six Months Ended June 30, 2024

Domestic Company-owned restaurants North America franchising North America commissaries International Total

Revenues from external customers $ 349,431 $ 70,106 $ 401,484 $ 93,220 $ 914,241

Intersegment revenues — 2,090 99,570 — 101,660

Segment revenue $ 349,431 $ 72,196 $ 501,054 $ 93,220 $ 1,015,901

Less segment expenses (a) :

COS - Product Costs $ 101,489 $ — $ 363,397 $ 26,228 $ 491,114

COS - Salaries & Benefits 113,978 — 58,492 10,503 182,973

COS - Other (d)

85,901 — 28,911 24,334 139,146

General & Administrative (b)

19,650 16,482 18,037 18,314 72,483

Other Segment Expenses (c)

— — — 5,935 5,935

Segment adjusted EBITDA $ 28,413 $ 55,714 $ 32,217 $ 7,906 $ 124,250

___________________________________

(a) Segment expenses exclude Depreciation and amortization, Stock-based compensation expense, and certain General and Administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows).

(b) The Company prospectively adjusted for updates in internal cost allocation methodologies in our Annual Report on Form 10-K for the year ended December 29, 2024, which increased the amount of internal general and administrative expenses allocated to the segments from Unallocated corporate expenses.

These methodology updates have been reflected in the 2024 quarterly results.

These methodology updates have been reflected in the 2024 comparable results.

Refer to Note 23 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 29, 2024 for additional information.

5 unchanged sentences

Reconciliation of Segment Results to Company Results

The following table reconciles Total Revenues from our segments to Total Revenues and Total Adjusted EBITDA from our segments to Income before income taxes (in thousands):

Three Months Ended

March 30, 2025 March 31, 2024

The following table reconciles total revenue from our segments to Total revenues and total adjusted EBITDA from our segments to Income before income taxes (in thousands):

Three Months Ended Six Months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Total Segment revenue $ 524,243 $ 503,704 $ 1,035,337 $ 1,015,901

2 unchanged sentences

Elimination of intersegment revenue ( 68,838 ) ( 65,122 ) ( 135,954 ) ( 128,610 )

Total Revenue $ 518,309 $ 513,916

Three Months Ended

March 30, 2025 March 31, 2024

Total revenues $ 529,166 $ 507,894 $ 1,047,475 $ 1,021,810

Three Months Ended Six Months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Total Segment adjusted EBITDA $ 61,996 $ 59,436 $ 119,010 $ 124,250

All Other adjusted EBITDA (a)

9,233 5,817 19,397 12,714

Unallocated corporate expenses, adjusted (b)

( 18,614 ) ( 6,333 ) ( 36,168 ) ( 17,479 )

Elimination of Intersegment profit (loss) — —

Other income/(expense) adjustments to reconcile to income before income before income taxes (c)

3 unchanged sentences

___________________________________

(a) As noted in the commentary above, All Other revenue and adjusted EBITDA is derived from business units that do not meet the quantitative or qualitative thresholds for determining reportable segments, including:

franchise contributions to marketing funds and information systems and related services used in restaurant operations.

(b) Unallocated corporate expenses represent administrative fees incurred by the restaurant support centers, including:

information systems and related services, corporate salaries and bonuses, and other corporate costs.

These consist of operations that derive revenues from 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.

Our largest marketing fund is PJMF, which is designed to operate at break-even for the purpose of designing and administering advertising and promotional programs for all participating Domestic restaurants.

Technology-based franchisee fees are meant to offset the costs of building, operating, and depreciating technology that supports franchisee operations.

As such, these fees may vary from period to period, as they are designed to operate near break-even over time including the impact of depreciation.

(b) Unallocated corporate expenses represent administrative fees incurred by the restaurant support centers, including information systems and related services, corporate salaries and bonuses, and other corporate costs.

These expenses are adjusted for depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows).

2 unchanged sentences

For the periods above, the adjustments include:

Three Months Ended

(in thousands) March 30, 2025 March 31, 2024

Three Months Ended Six Months Ended

(in thousands) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Depreciation and amortization $ 18,819 $ 17,594 $ 37,162 $ 35,268

International restructuring costs (see Note 9) 2,180 9,543

Net expenses due to natural disasters 892 —

Strategic initiative costs 575 —

Stock-based compensation expense 3,824 2,915 7,493 2,545

International restructuring costs (see Note 9) 2,451 6,185 4,631 15,728

Other costs 3,031 4,000 4,498 4,000

Other (income)/expense adjustments $ 28,125 $ 30,694 $ 53,784 $ 57,541

7 unchanged sentences

The tables also include a reconciliation of the disaggregated revenues by the reportable segment (in thousands):

Three Months Ended March 30, 2025

Three Months Ended June 29, 2025

Domestic Company-owned restaurants North America franchising North America commissaries International All Other Elimination of Intersegment Revenue Total

5 unchanged sentences

Total revenues $ 175,797 $ 36,603 $ 267,659 $ 44,184 $ 73,761 $ ( 68,838 ) $ 529,166

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Domestic Company-owned restaurants North America franchising North America commissaries International All Other Elimination of Intersegment Revenue Total

5 unchanged sentences

Total revenues $ 173,207 $ 35,450 $ 248,500 $ 46,547 $ 69,312 $ ( 65,122 ) $ 507,894

Six Months Ended June 29, 2025

Domestic Company-owned restaurants North America franchising North America commissaries International All Other Elimination of Intersegment Revenue Total

Company-owned restaurant sales $ 346,592 $ — $ — $ 6,278 $ — $ — $ 352,870

Franchise royalties and fees — 73,414 — 25,447 — ( 2,503 ) 96,358

Commissary sales — — 532,036 35,752 — ( 104,271 ) 463,517

Other revenues — — — 6,693 49,380 ( 9,180 ) 46,893

Advertising funds revenue — — — 9,125 98,712 ( 20,000 ) 87,837

Total revenues $ 346,592 $ 73,414 $ 532,036 $ 83,295 $ 148,092 $ ( 135,954 ) $ 1,047,475

Six Months Ended June 30, 2024

Domestic Company-owned restaurants North America franchising North America commissaries International All Other Elimination of Intersegment Revenue Total

Company-owned restaurant sales $ 349,431 $ — $ — $ 26,460 $ — $ — $ 375,891

Franchise royalties and fees — 72,196 — 23,599 — ( 2,090 ) 93,705

Commissary sales — — 501,054 30,350 — ( 99,570 ) 431,834

Other revenues — — — 6,852 41,678 ( 7,185 ) 41,345

Advertising funds revenue — — — 5,959 92,841 ( 19,765 ) 79,035

Total revenues $ 349,431 $ 72,196 $ 501,054 $ 93,220 $ 134,519 $ ( 128,610 ) $ 1,021,810

Subsequent Events

Louisville Restaurant Support Center and QC Center Tornado Impact

On April 3, 2025, our restaurant support center and QC Center in Louisville, Kentucky were impacted by a tornado, which resulted in real and personal property damage.

The QC Center was temporarily closed and resumed full operating capacity as of April 15, 2025.

During the period of closure, our other QC Centers were able to ensure that restaurants were adequately supplied and therefore the temporary disruption did not have a significant impact on our operations.

The Company is working with insurance providers to assess the total financial impact, and this work is ongoing.

Management currently estimates that repair costs and asset replacements will range between $ 10 million and $ 12 million, which we anticipate will be covered under our insurance policy subject to a deductible between $ 2 million and $ 3 million with amounts in excess of the deductible expected to be reimbursed by our insurer.

These figures represent preliminary estimates, and are subject to change based on continued inspection of the property and assessment of damage incurred by both the Company and our insurer.

This event is not expected to materially affect our financial position, and the Company

will continue to evaluate any potential long-term impacts and will provide further details in subsequent filings as additional information becomes available.

Enactment of the “One Big Beautiful Bill Act”

On July 4, 2025, the “One Big Beautiful Bill Act,” a comprehensive tax and spending bill, was signed into U.S.

The legislation includes changes to the U.S.

corporate tax system, including, but not limited to:

• Maintaining the corporate income tax rate at 21%;

• Modifications to the deductibility of interest expense and executive compensation;

• Reinstatement and expansion of certain bonus depreciation provisions;

• Reinstatement of full expensing for domestic research and development expenditures;

• Significant changes to many credits and provisions of the Inflation Reduction Act;

• Changes to foreign income taxation, including revisions to Global Intangible Low-Taxed Income (“GILTI”) and foreign-derived deduction eligible income (“FDDEI”) provisions.

The Company is currently evaluating the potential impact of the new legislation on its Consolidated Financial Statements.

However, we currently expect that these changes may have a material impact on the Company’s current and deferred tax assets and liabilities as well as a favorable impact on the amount of cash taxes paid during 2025.

We do not currently expect a material impact to our effective tax rate for 2025.

Because the bill was enacted subsequent to June 29, 2025, its effects are not reflected in the accompanying financial statements as of and for the period ended June 29, 2025.

Anticipated Sale of Joint Venture

On July 18, 2025, the Company entered into an asset purchase agreement (the “Purchase Agreement”) to sell its 70 % interest in a consolidated joint venture that currently operates 85 Domestic Company-owned restaurants for approximately $ 25 million, which is subject to change based on customary adjustments and is subject to various contingencies.

Upon closing of the sale, which we expect to complete by the end of 2025, the Company expects to recognize an estimated pre-tax gain on sale of $ 15 million to $ 20 million and the restaurants will convert to franchised locations.

This estimate is preliminary and subject to change, as the final gain will be determined upon completion of the relative fair value allocation necessary to finalize the disposal of goodwill associated with the divestiture as well as the final asset and liability balances as of the closing date.

As such, the actual gain recognized may differ materially from our current estimate.

The Company is unable to provide assurances as to whether the contingencies under the Purchase Agreement will be satisfied within the estimated timing or at all.

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