What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-08-07 · 211 added, 170 removed, 656 unchanged (37% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheets

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

(In thousands, except per share amounts) September 28,

2025 December 29,

6 unchanged sentences

Prepaid expenses and other current assets 53,272 48,586

Assets held for sale (a)

Total current assets 270,842 230,605

1 unchanged sentence

Finance lease right-of-use assets, net 36,295 28,761

Operating lease right-of-use assets 179,399 184,425

Operating lease right-of-use assets, net 160,975 184,425

Notes receivable, less current portion, net 3,237 8,867

10 unchanged sentences

Current operating lease liabilities 25,724 25,756

Current portion of long-term debt 2,500 —

Liabilities held for sale (a)

Total current liabilities 310,829 277,963

8 unchanged sentences

Common stock ($ 0.01 par value per share;

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

issued 49,296 at September 28, 2025 and 49,283 at December 29, 2024)

Additional paid-in capital 455,099 452,449

1 unchanged sentence

Retained earnings 219,041 241,717

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

Treasury stock ( 16,510 shares at September 28, 2025 and 16,637 shares at December 29, 2024, at cost)

( 1,107,205 ) ( 1,115,729 )

3 unchanged sentences

Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit $ 884,097 $ 888,952

(a) Refer to “Note 11.

Divestitures” for additional details.

See accompanying notes.

2 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended Six Months Ended

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

2025 June 30,

2024 June 29,

2025 June 30,

Three Months Ended Nine Months Ended

(In thousands, except per share amounts) September 28,

2025 September 29,

2024 September 28,

2025 September 29,

Company-owned restaurant sales $ 168,421 $ 171,097 $ 521,291 $ 546,988

16 unchanged sentences

Net income 4,473 41,788 23,487 69,238

Net income attributable to noncontrolling interests ( 140 ) ( 293 ) ( 261 ) ( 571 )

Net (income) loss attributable to noncontrolling interests 234 20 ( 27 ) ( 551 )

Net income attributable to the Company $ 4,707 $ 41,808 $ 23,460 $ 68,687

9 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended Six Months Ended

(In thousands) June 29,

2025 June 30,

2024 June 29,

2025 June 30,

Three Months Ended Nine Months Ended

(In thousands) September 28,

2025 September 29,

2024 September 28,

2025 September 29,

Net income $ 4,473 $ 41,788 $ 23,487 $ 69,238

1 unchanged sentence

Foreign currency translation adjustments ( 908 ) 2,051 2,720 1,670

Interest rate swaps (1)

Interest rate swaps (a)

( 84 ) ( 1,059 ) ( 547 ) ( 103 )

2 unchanged sentences

Foreign currency translation adjustments 207 ( 453 ) ( 574 ) ( 367 )

Interest rate swaps (2)

Interest rate swaps (b)

19 239 124 23

Income tax effect 226 ( 214 ) ( 450 ) ( 344 )

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

Other comprehensive income (loss), net of tax ( 766 ) 778 1,723 1,223

Comprehensive income before attribution to noncontrolling interests 3,707 42,566 25,210 70,461

comprehensive income, redeemable noncontrolling interests ( 22 ) ( 91 ) ( 52 ) ( 190 )

comprehensive income, nonredeemable noncontrolling interests ( 118 ) ( 202 ) ( 209 ) ( 381 )

comprehensive (income) loss, redeemable noncontrolling interests ( 32 ) ( 43 ) ( 84 ) ( 233 )

comprehensive (income) loss, nonredeemable noncontrolling interests 266 63 57 ( 318 )

Comprehensive income attributable to the Company $ 3,941 $ 42,586 $ 25,183 $ 69,910

___________________________________

(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.

(a) Amounts reclassified out of accumulated other comprehensive loss into net interest income (expense) include $ 158 and $ 117 for the three and nine months ended September 28, 2025, respectively and $ 194 and $ 591 for the three and nine months ended September 29, 2024, respectively.

(b) The income tax benefit (expense) effects of amounts reclassified out of accumulated other comprehensive loss were $( 35 ) and $( 26 ) for the three and nine months ended September 28, 2025, respectively and $ 43 and $ 133 for the three and nine months ended September 29, 2024, respectively.

See accompanying notes.

13 unchanged sentences

For the three months ended

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)

September 28, 2025

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

Net income (loss) (a)

— — — — 4,707 — ( 266 ) 4,441

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

Dividends on common stock of ($ 0.46 per share)

Other comprehensive income (loss), net of tax — — — ( 766 ) — — — ( 766 )

Dividends on common stock ($ 0.46 per share)

— — 23 — ( 15,534 ) — — ( 15,511 )

5 unchanged sentences

Other 3 — 3 — — 204 — 207

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 September 28, 2025 32,786 $ 493 $ 455,099 $ ( 6,733 ) $ 219,041 $ ( 1,107,205 ) $ 14,929 $ ( 424,376 )

For the nine months ended

September 29, 2025

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

Net income (1)

Net income (loss) (a)

— — — — 23,460 — ( 57 ) 23,403

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

Dividends on common stock of ($ 0.92 per share)

Other comprehensive income (loss), net of tax — — — 1,723 — — — 1,723

Dividends on common stock ($ 1.38 per share)

— — 76 — ( 46,136 ) — — ( 46,060 )

5 unchanged sentences

Other 18 — ( 788 ) — — 1,164 — 376

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 .

Balance at September 28, 2025 32,786 $ 493 $ 455,099 $ ( 6,733 ) $ 219,041 $ ( 1,107,205 ) $ 14,929 $ ( 424,376 )

(a) Net income to the Company for the three and nine months ended September 28, 2025 excludes $ 32 and $ 84 , respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements.

(b) At September 28, 2025, the accumulated other comprehensive loss of $ 6,733 was comprised of net unrealized foreign currency translation loss of $ 6,187 and net unrealized loss on the interest rate swap agreements of $ 546 .

See accompanying notes.

13 unchanged sentences

For the three months ended

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)

September 29, 2024

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

Net income (loss) (a)

— — — — 41,808 — ( 63 ) 41,745

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

Other comprehensive income (loss), net of tax — — — 778 — — — 778

Dividends on common stock ($ 0.46 per share)

6 unchanged sentences

Other 3 — ( 73 ) — — 252 — 179

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 September 29, 2024 32,637 $ 493 $ 449,141 $ ( 6,580 ) $ 242,269 $ ( 1,116,256 ) $ 15,314 $ ( 415,619 )

For the nine months ended

September 29, 2024

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

Net income (1)

Net income (loss) (a)

— — — — 68,687 — 318 69,005

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

Dividends on common stock of ($ 0.92 per share)

Other comprehensive income (loss), net of tax — — — 1,223 — — — 1,223

Dividends on common stock ($ 1.38 per share)

— — 95 — ( 45,445 ) — — ( 45,350 )

5 unchanged sentences

Other 8 — ( 417 ) — — 600 — 183

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 .

Balance at September 29, 2024 32,637 $ 493 $ 449,141 $ ( 6,580 ) $ 242,269 $ ( 1,116,256 ) $ 15,314 $ ( 415,619 )

(a) Net income to the Company for the three and nine months ended September 29, 2024 excludes $ 43 and $ 233 , respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements.

(b) At September 29, 2024, the accumulated other comprehensive loss of $ 6,580 was comprised of net unrealized foreign currency translation loss of $ 6,186 and net unrealized gain on the interest rate swap agreements of $ 394 .

See accompanying notes.

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended

(In thousands) June 29,

2025 June 30,

Nine Months Ended

(In thousands) September 28,

2025 September 29,

Operating activities

6 unchanged sentences

Refranchising and impairment loss 8,127 17,433

Loss on disposal of property and equipment 2,576 965

Loss (gain) on disposal of property and equipment 2,771 ( 42,034 )

Other 1,082 573

20 unchanged sentences

Other ( 68 ) 98

Net cash used in investing activities ( 19,389 ) ( 23,841 )

Net cash (used in) provided by investing activities ( 37,618 ) 7,448

Financing activities

Net (repayments of) proceeds from revolving credit facilities ( 212,927 ) 3,024

Net repayments of revolving credit facilities ( 210,042 ) ( 31,589 )

Proceeds from term loan 200,000 —

15 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 29, 2025

September 28, 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 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.

Operating results for the three and nine months ended September 28, 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 and six months ended June 30, 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 nine months ended September 29, 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.

14 unchanged sentences

Noncontrolling Interests

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.

Papa Johns has joint venture arrangements in which there are noncontrolling interests held by third parties that includ ed 98 restaurants at September 28, 2025 and September 29, 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 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,

Net income (loss) attributable to these joint ventures for the three and nine months ended September 28, 2025 and September 29, 2024 was as follows:

Three Months Ended Nine Months Ended

(In thousands) September 28,

2025 September 29,

2024 September 28,

2025 September 29,

Papa John’s International, Inc.

2 unchanged sentences

Nonredeemable noncontrolling interests ( 266 ) ( 63 ) ( 57 ) 318

Total net income $ 467 $ 1,032 $ 863 $ 1,902

Total net income (loss) $ ( 778 ) $ ( 66 ) $ 85 $ 1,836

The following summarizes the redemption feature, location and related accounting within the Condensed Consolidated Balance Sheets for these joint venture arrangements:

10 unchanged sentences

Discrete items are recorded in the quarter in which they occur.

Our effective income tax rates were 28.2 % and 31.0 % for the three and nine months ended September 28, 2025, respectively, as compared to an income tax rate of 23.5 % and 26.8 % for the prior year comparable periods, respectively.

The higher effective tax rates during 2025 were primarily due to lower pretax book income and larger tax shortfall generated by vesting of restricted shares.

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse.

16 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 June 29, 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 September 28, 2025 and December 29, 2024 are as follows:

Fair Value Measurements

1 unchanged sentence

Value Level 1 Level 2 Level 3

June 29, 2025

September 28, 2025

Financial assets:

17 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”).

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.

Debt” for further discussion.

There were no transfers among levels within the fair value hierarchy during the three and nine months ended September 28, 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 June 29, 2025 and December 29, 2024:

June 29, 2025 December 29, 2024

September 28, 2025 December 29, 2024

(In thousands) Carrying

11 unchanged sentences

Write-offs charged against the allowance ( 1,240 ) —

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

Balance at September 28, 2025 $ 10,839 $ 17,296

Impairment of Long-lived Assets

3 unchanged sentences

The assumptions used in the undiscounted cash flow calculation related to future growth are subjective and may be negatively impacted by future changes in operating performance or economic conditions.

During 2025, the Company has been developing and beta testing a new omnichannel experience, including new customer-facing technology such as new apps on the Android and iOS platforms and a new web experience.

Based on the Company's progress during the three months ended September 28, 2025, including releasing the new apps to both Android and iOS users, the Company reassessed the remaining useful lives of certain legacy omnichannel and other technology long-lived assets and recognized $ 6.1 million in accelerated depreciation charges.

Tornado Impact

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 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.

The Company recorded pre-tax expenses of $ 0.9 million during the nine months ended September 28, 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.

The Company recorded asset impairment charges of $ 2.7 million and incurred additional operating expenses of $ 1.6 million during the nine months ended September 28, 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 $ 4.0 million of insurance proceeds related to the two incidents during the nine months ended September 28, 2025, of which $ 3.3 million were classified as cash inflows from investing activities and $ 0.7 million were classified as cash inflows from operating activities based on the nature of the underlying losses and expected usage of the proceeds.

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.

11 unchanged sentences

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.

In September 2025, the FASB issued ASU 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software”.

The ASU modernizes the accounting guidance for costs incurred to develop software for internal use by removing references to project stages of a software development project, which better aligns with current software development methods.

Under the new standard, entities will commence capitalizing eligible costs when management has authorized and committed to funding the software project, and when it is probable that the project will be completed and the software will be used to perform the function intended.

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

The guidance can be applied using a prospective, retrospective, or modified transition approach.

The Company is currently evaluating the impact of this accounting standard to its consolidated financial statements.

Lessor Operating Leases

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

At June 29, 2025, we leased and subleased approximately 340 Papa Johns restaurants to franchisees in the UK.

At September 28, 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 $ 2.8 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.

The Company recognized total sublease income of $ 2.4 million and $ 7.8 million for the three and nine months ended September 28, 2025, respectively, and $ 2.7 million and $ 7.1 million for the three and nine months ended September 29, 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 2036.

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.

As of September 28, 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 $ 8.9 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:

Six Months Ended

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

Nine Months Ended

(In thousands) September 28, 2025 September 29, 2024

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

12 unchanged sentences

PJMF also has a wholly-owned subsidiary, Papa Card, Inc., which administers the Company’s gift card programs.

Assets and liabilities of PJMF, which are utilized solely for the Company’s advertising and promotional programs, were as follows in the Condensed Consolidated Balance Sheets (in thousands):

Assets and liabilities of PJMF, which are utilized solely for the Company’s advertising and promotional programs, were as follows in the Condensed Consolidated Balance Sheets:

(In thousands) September 28,

2025 December 29,

17 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 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):

June 29, 2025 December 29, 2024 Change

During the three and nine months ended September 28, 2025, the Company recognized $ 8.2 million and $ 25.9 million in revenue, respectively, related to deferred revenue compared to $ 7.8 million and $ 24.1 million, respectively, for the three and nine months ended September 29, 2024.

The following table includes a breakout of contract liability balances:

(In thousands) September 28, 2025 December 29, 2024 Change

Unearned franchise fees and royalties $ 19,592 $ 21,860 $ ( 2,268 )

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 $ 17.2 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 were approximately $ 17.1 million and $ 16.6 million, respectively, at September 28, 2025, and December 29, 2024.

Revenue was reduced by approximately $ 2.1 million and $ 5.5 million for the three and nine months ended September 28, 2025, and approximately $ 1.3 million and $ 4.0 million for the three and nine months ended September 29, 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.

Transaction Price Allocated to the Remaining Performance Obligations

The following table (in thousands) includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period:

Performance Obligations by Period

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

(In thousands) Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total

Unearned franchise fees and royalties $ 3,186 $ 2,847 $ 2,600 $ 2,373 $ 2,154 $ 4,132 $ 17,292

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.

At September 28, 2025, approximately $ 2.3 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.

1 unchanged sentence

The Company will recognize redemption fee revenue in Other revenues when cards are redeemed at franchised restaurant locations.

The Company applies the practical expedient in ASC 606, “ Revenue Recognition” and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

Shares Authorized and Outstanding

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.

The Company has authorized 100.0 million shares of common stock as of September 28, 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 September 28, 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 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.

There was no share repurchase activity during the three and nine months ended September 28, 2025 or September 29, 2024.

Approximately $ 90.2 million remained available under the Company’s share repurchase program as of September 28, 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 $ 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 Company paid aggregate cash dividends of approximately $ 45.8 million ($ 1.38 per share) for the nine months ended September 28, 2025.

On October 29, 2025, our Board of Directors declared a fourth quarter dividend of $ 0.46 per common share (approximately $ 15.4 million in the aggregate), which will be paid on November 28, 2025 to stockholders of record as of the close of business on November 17, 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.

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

Three Months Ended Six Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Three Months Ended Nine Months Ended

September 28,

2025 September 29,

2024 September 28,

2025 September 29,

Calculation of net income attributable to common shareholders

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___________________________________

(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.

(a) Excludes 85,000 and 259,000 shares underlying equity awards for the three and nine months ended September 28, 2025 and 345,000 and 384,000 shares underlying awards for the three and nine months ended September 29, 2024, respectively, as the effect of including such awards would have been anti-dilutive.

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

September 28,

2025 December 29,

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Unamortized debt issuance costs ( 7,055 ) ( 5,082 )

Current portion of long-term debt ( 2,500 ) —

Total long-term debt, net $ 727,135 $ 741,650

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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 $ 466.2 million as of June 29, 2025.

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 $ 463.3 million as of September 28, 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.

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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 June 29, 2025 or December 29, 2024.

The Company did no t have any borrowings under the PJMF Revolving Facility as of September 28, 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.

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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.

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:

As of September 28, 2025, we had the following interest rate swap agreements:

Effective Dates Floating Rate Debt Fixed Rates

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

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

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Balance Sheet Location Fair Value

September 28,

2025 Fair Value

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Accrued expenses and other current liabilities $ 33 $ 161

Other long-term liabilities $ 737 $ —

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

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Interest rate swaps for the three months ended:

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.

September 28, 2025 $ ( 65 ) Interest expense $ 158 $ ( 9,945 )

September 29, 2024 $ ( 820 ) Interest expense $ 194 $ ( 10,629 )

Interest rate swaps for the nine months ended:

September 28, 2025 $ ( 423 ) Interest expense $ 117 $ ( 30,608 )

September 29, 2024 $ ( 80 ) Interest expense $ 591 $ ( 32,588 )

Net interest paid, including payments made or received under the swaps, was $ 11.4 million and $ 34.6 million for the three and nine months ended September 28, 2025, respectively, and $ 13.9 million and $ 34.3 million for the three and nine months ended September 29, 2024, respectively.

Restructuring

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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.

We recognized impairment charges of $ 1.1 million and $ 10.1 million during the three and nine months ended September 29, 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 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,

The following table summarizes restructuring related costs recorded for the three and nine months ended September 28, 2025 and September 29, 2024 (in thousands):

Three Months Ended Nine Months Ended

September 28,

2025 September 29,

2024 September 28,

2025 September 29,

Professional services and other related costs $ 416 $ 2,029 $ 2,630 $ 4,730

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The Company has incurred total restructuring related costs of $ 34.3 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 $ 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.

Total estimated pre-tax costs associated with the International Transformation Plan are approximately $ 35 million (inclusive of the $ 34.3 million incurred through the third 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):

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Payments ( 136 ) ( 4,577 ) ( 1,149 ) ( 5,862 )

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

Balance as of September 28, 2025 $ 19 $ 388 $ 924 $ 1,331

Litigation, Commitments and Contingencies

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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 June 29, 2025.

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

The settlement amount was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operations in the first quarter of 2022.

The District Court granted preliminary approval of the proposed settlement on August 2, 2025, and the Company made an initial payment of $ 2.5 million on September 5, 2025 towards the settlement with $ 2.5 million remaining accrued within Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets as of September 28, 2025.

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

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

Anticipated Sale of Joint Venture

The total purchase price for the 85 restaurants was approximately $ 35 million, which does not include transaction costs and is subject to customary post-closing adjustments under the terms of the Purchase Agreement.

We expect to receive cash proceeds of approximately $ 25 million for our 70 % interest and the sale is expected to close during the fourth quarter of 2025, at which point the restaurants formerly subject to the joint venture will convert to franchised locations.

The assets and liabilities associated with the sale of the joint venture are classified as held for sale in the Condensed Consolidated Balance Sheets as of September 28, 2025.

September 28,

Current assets $ 1,317

Property and equipment, net 5,229

Operating lease right-of-use assets, net 14,972

Finance lease right-of-use assets, net 395

Goodwill 9,036

Total assets held for sale $ 30,949

Current deferred revenue $ 936

Current finance lease liabilities 13

Current operating lease liabilities 3,874

Long-term finance lease liabilities 380

Long-term operating lease liabilities 10,831

Total liabilities held for sale $ 16,034

The Company incurred transaction costs of $ 0.5 million during the three months ended September 28, 2025 related to the sale, which were recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations.

We expect to record a pre-tax gain on sale between $ 15 million and $ 20 million upon closing of the sale, which is net of estimated transaction costs and subject to change based on settlement of certain post-closing adjustments.

Sale-Leaseback of Texas and Florida Quality Control Centers

On August 2, 2024, the Company finalized the sale and subsequent leaseback of two Domestic QC Centers in Texas and Florida for an aggregate purchase price of $ 46.7 million.

Under the terms of the leases, each of which commenced on August 2, 2024, we will lease the QC Centers for 17 years with two five-year renewal options.

The Company will pay annual rents under the operating leases of the Texas and Florida QC Centers of $ 2.0 million and $ 1.0 million, respectively, for the first year with annual rents increasing by 2.75 % thereafter.

During the three months ended September 29, 2024, we recorded a pre-tax gain on sale of approximately $ 41.3 million, net of transaction costs, which was recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations, and sales proceeds of $ 46.7 million were recorded as investing cash inflows in the Condensed Consolidated Statements of Cash Flows.

Refranchising Loss

On September 30, 2024, the Company refranchised 15 Domestic Company-owned restaurants to an existing franchisee for a purchase price of approximately $ 2.6 million.

In connection with the divestiture, we recorded non-cash charges of $ 1.5 million and $ 5.5 million during the three and nine months ended September 29, 2024, to remeasure the net assets within the disposal group to fair value, less estimated costs to sell.

The remeasurement charges were recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations.

Segment Information

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Domestic Company-owned restaurants, North America franchising, North America commissaries, and International operations.

The Domestic Company-owned restaurant segment consists of the operations of all Domestic Company-owned restaurants and principally generates revenues from retail sales of pizza and other food and beverage products.

The Domestic Company-owned restaurants segment consists of the operations of all Domestic Company-owned restaurants and principally generates revenues from retail sales of pizza and other food and beverage products.

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 the collection of royalties from our franchisees located in the United States and Canada.

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

Three Months Ended June 29, 2025

Three Months Ended September 28, 2025

Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total

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Segment adjusted EBITDA $ 3,942 $ 25,506 $ 19,202 $ 5,300 $ 53,950

Three Months Ended June 30, 2024

Three Months Ended September 29, 2024

Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total

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Segment adjusted EBITDA $ 4,354 $ 26,661 $ 16,686 $ 4,051 $ 51,752

Six Months Ended June 29, 2025

Nine Months Ended September 28, 2025

Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total

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Segment adjusted EBITDA $ 18,838 $ 79,596 $ 58,205 $ 16,320 $ 172,959

Six Months Ended June 30, 2024

Nine Months Ended September 29, 2024

Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total

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(c) Other Segment Expenses represent all operating expenses that are not included in the significant segment expense categories.

The components of Other Segment Expense are advertising fund expenses and other operating expenses.

The components of Other Segment Expenses are advertising fund expenses and other operating expenses.

(d) We have included “COS - Other” as a significant expense category beginning in the first quarter of 2025, consistent with the segment expense categories regularly provided to the CODM when evaluating segment performance and allocating resources.

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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

Three Months Ended Nine Months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Total Segment revenue $ 504,362 $ 505,064 $ 1,539,698 $ 1,520,965

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Total revenues $ 508,154 $ 506,807 $ 1,555,629 $ 1,528,617

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Total Segment adjusted EBITDA $ 53,950 $ 51,752 $ 172,959 $ 176,006

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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).

The increases in unallocated corporate expenses for the three and nine month periods ended September 28, 2025 were primarily due to incremental marketing investments and an increase in management incentive compensation compared to the prior year comparable period.

(c) Other income/(expense) adjustments represent 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.

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For the periods above, the adjustments include:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(in thousands) September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Depreciation and amortization $ 24,914 $ 17,260 $ 62,076 $ 52,528

Stock-based compensation expense 4,639 3,358 12,132 5,903

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

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

Gain on sale of QC Center properties — ( 41,289 ) — ( 41,289 )

International restructuring costs 231 3,862 4,862 19,514

Other costs (a)

1,804 1,495 6,302 5,495

Other (income)/expense adjustments $ 31,588 $ ( 15,314 ) $ 85,372 $ 42,151

___________________________________

(a) For the three and nine months ended September 28, 2025, other costs is comprised of the following:

Losses on disposal of equipment incurred in connection with the termination of a COVID-era program that pre-purchased store equipment due to supply chain challenges;

Costs associated with project-based strategic initiatives that are not related to our ongoing operations as well as transaction costs incurred in connection with the anticipated sale of our 70 % interest in a joint venture operating 85 restaurants (refer to “Note 11.

Divestitures” for further information), of which approximately $ 0.1 million was attributable to noncontrolling interests, and;

Costs incurred, net of anticipated insurance recoveries, arising from tornadoes that struck the Texas QC Center as well as the restaurant support center and QC Center in Louisville, Kentucky.

For the three and nine months ended September 29, 2024, represents a non-cash impairment charge related to fixed and intangible assets related to certain Domestic restaurants.

Refer to “Note 11.

Divestitures” of the “Notes to Condensed Consolidated Financial Statements” for further details.

Disaggregation of Revenue

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We account for intercompany sales and transfers as if the sales or transfers were to third parties and subsequently eliminate the activity.

The accounting policies of our segments are the same as those described in 2.

The accounting policies of our segments are the same as those described in Note 2.

Significant Accounting Policies.

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

Three Months Ended June 29, 2025

Three Months Ended September 28, 2025

Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total

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Total revenues $ 165,194 $ 34,958 $ 259,489 $ 44,721 $ 68,866 $ ( 65,074 ) $ 508,154

Three Months Ended June 30, 2024

Three Months Ended September 29, 2024

Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total

5 unchanged sentences

Total revenues $ 168,672 $ 34,842 $ 262,452 $ 39,098 $ 68,289 $ ( 66,546 ) $ 506,807

Six Months Ended June 29, 2025

Nine Months Ended September 28, 2025

Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total

5 unchanged sentences

Total revenues $ 511,786 $ 108,372 $ 791,524 $ 128,016 $ 216,958 $ ( 201,027 ) $ 1,555,629

Six Months Ended June 30, 2024

Nine Months Ended September 29, 2024

Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total

5 unchanged sentences

Total revenues $ 518,103 $ 107,038 $ 763,506 $ 132,318 $ 202,808 $ ( 195,156 ) $ 1,528,617

Subsequent Events

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