Papa John's Reports Second Quarter Earnings

Domestic comps increase 2.4%; 2008 earnings guidance reaffirmed

Highlights

-- Second quarter earnings per diluted share of $0.27 in 2008 vs.
$0.23 in 2007

-- Comparable second quarter results, excluding the consolidation
of BIBP, were $0.41 in 2008 vs. $0.40 in 2007, an increase of
2.5%

-- Domestic system-wide comparable sales increase of 2.4% for the
quarter

-- 32 net Papa John's worldwide unit openings during the quarter

-- Earnings guidance for 2008 reaffirmed at a range of $1.68 to
$1.76 per diluted share, excluding the impact of consolidating
BIBP
LOUISVILLE, Ky.--(Business Wire)--
Papa John's International, Inc. (NASDAQ: PZZA) today announced
revenues of $283.4 million for the second quarter of 2008,
representing an increase of 10.6% from revenues of $256.3 million for
the same period in 2007. Net income for the second quarter of 2008 was
$7.6 million, or $0.27 per diluted share (including an after-tax loss
of $4.1 million, or $0.14 per diluted share, from the consolidation of
the results of the franchisee-owned cheese purchasing company, BIBP
Commodities, Inc. ("BIBP"), a variable interest entity), compared to
2007 second quarter net income of $7.0 million, or $0.23 per diluted
share (including a net loss of approximately $5.3 million, or $0.17
per diluted share, from the consolidation of BIBP).

Revenues were $572.4 million for the six months ended June 29,
2008, representing an increase of 10.7% from revenues of $516.9
million for the same period in 2007. Net income for the six months
ended June 29, 2008 was $16.3 million, or $0.57 per diluted share
(including a net loss of $9.3 million, or $0.32 per diluted share,
from the consolidation of BIBP), compared to last year's net income of
$20.2 million, or $0.66 per diluted share (including an after-tax loss
of $5.5 million, or $0.18 per diluted share, from the consolidation of
BIBP).

"Given the brutal commodity and consumer environment, our second
quarter comps were very encouraging and our earnings and cash flow
yield remained strong," said Papa John's president and chief executive
officer, Nigel Travis. "As the commodities market and operating
environment remain both difficult and unpredictable, we will continue
to look for ways to assist both our corporate and franchise operators
through this difficult period while driving top line sales."

Revenues Comparison

Revenues were $283.4 million for the second quarter of 2008, an
increase of $27.2 million, or 10.6%, over the corresponding 2007
period. The increase in revenues for the second quarter of 2008 was
principally due to the following:

-- Domestic company-owned restaurant revenues increased $14.2
million or 11.9%, reflecting an increase in comparable sales
results of 3.6% and an 8.3% increase in equivalent units due
to the acquisition of 42 domestic restaurants during the last
six months of 2007.

-- Franchise royalties increased $1.0 million, primarily due to
the increase in royalty rate from 4.0% to 4.25% for the
majority of domestic franchise restaurants effective at the
beginning of 2008.

-- Domestic commissaries revenues increased $10.1 million due to
increases in the price of certain commodities, primarily
cheese and wheat. The commissary charges a fixed dollar
mark-up on its cost of cheese, and cheese cost is based upon
the 40 lb. cheddar block price, which increased from $1.38 per
pound in the second quarter of 2007 to $1.75 per pound in the
second quarter of 2008, or a 26.8% increase. The cost of
wheat, as measured on domestic commodity markets, has
increased more than 100% for the first six months of 2008, as
compared to the corresponding 2007 period.

-- International revenues increased $2.4 million reflecting the
increase in both the number and average unit volumes of our
company-owned and franchised restaurants over the past year.

For the six-month period ending June 29, 2008, revenues increased
$55.5 million, or 10.7%, principally due to the reasons mentioned
above and due to a first quarter increase in other sales from expanded
commercial volumes at our print and promotions subsidiary, Preferred
Marketing Solutions, Inc.

Operating Results and Cash Flow

Operating Results

Our pre-tax income for the second quarter of 2008 was $12.2
million, compared to $11.1 million for the corresponding period in
2007. For the six months ended June 29, 2008, pre-tax income was $25.8
million compared to $31.8 million for the corresponding period of
2007. Excluding the impact of the consolidation of BIBP, second
quarter 2008 pre-tax income was $18.5 million, a decrease of $900,000
or 4.5%, from the 2007 comparable results of $19.4 million and pre-tax
income for the six months ended June 29, 2008 was $40.0 million, a
decrease of $400,000, or 1.1%, from the 2007 comparable results. An
analysis of the changes in pre-tax income for the three- and six-month
periods ended June 29, 2008, respectively (excluding the consolidation
of BIBP), are summarized as follows (analyzed on a segment basis --
see the Summary Financial Data table that follows for the
reconciliation of segment income to consolidated income below):

-- Domestic Company-owned Restaurant Segment. Domestic
company-owned restaurants' operating income decreased $400,000
and $800,000 for the three- and six-month periods ended June
29, 2008, respectively. The second quarter of 2007 included a
$600,000 pre-tax gain associated with the termination of a
lease agreement. Excluding the $600,000 gain associated with
this termination, operating income increased $200,000 in the
three-month period ended June 29, 2008. The six-month 2008
operating results included a $1.2 million loss on the
anticipated sale of company-owned restaurants (see further
discussion in the Refranchising Initiative Update section
below) and the costs associated with the closing of five
restaurants during the first quarter of 2008, compared to a
loss of approximately $100,000 in the prior year. Excluding
both the incremental $1.1 million loss associated with the
disposition of restaurants and the prior year gain on lease
termination noted above, domestic company-owned restaurants'
operating income improved approximately $900,000 in the
six-month period ended June 29, 2008 as compared to the same
period in 2007. This improvement in operating results is
primarily the result of the acquisition of 42 restaurants
during the last six months of 2007 and the fixed cost leverage
associated with increases of 3.6% and 3.1%, respectively, in
comparable sales for the three- and six-month periods ended
June 29, 2008, substantially offset by the significant rise in
commodity costs during the three and six months ended June 29,
2008. Restaurant operating margin on an external basis,
excluding the impact of the consolidation of BIBP, decreased
as a percentage of sales 1.3% and 1.1% for the three- and
six-month periods ended June 29, 2008, respectively.

-- Domestic Commissary Segment. Domestic commissaries' operating
income decreased approximately $300,000 and $1.9 million for
the three- and six-month periods ended June 29, 2008,
respectively, reflecting a reduction in gross margin
percentage resulting from increases in the cost of certain
commodities and increases in distribution costs due to higher
fuel prices.

-- Domestic Franchising Segment. Domestic system-wide franchise
sales for the second quarter of 2008 increased 2.3% to $372.6
million from $364.1 million for the same period in 2007 and
increased 1.9% to $754.4 million for the six months ended June
29, 2008, from $740.5 million for the same period in 2007,
primarily resulting from increases of 1.9% and 1.6% in
comparable sales for the three- and six-month periods,
respectively. Domestic franchising operating income increased
$1.0 million, to $13.1 million, for the three months ended
June 29, 2008, from $12.1 million in the prior comparable
period and increased $2.5 million to $27.6 million for the
six-month period ended June 29, 2008, from $25.1 million in
the prior comparable period. The increases for both the three-
and six-month periods were primarily the result of the 0.25%
increase in our royalty rate implemented at the beginning of
2008 (the royalty rate for the majority of domestic
franchisees is 4.25% in 2008 as compared to 4.0% in 2007). The
increase in the royalty rate was a part of the franchise
agreement renewal program announced in the fourth quarter of
2007. This program was completed during the first quarter of
2008, with over 95% of our domestic franchisees renewing under
the new form of franchise agreement. Our equivalent franchise
units for both the three- and six-month periods ended June 29,
2008 were relatively consistent with the corresponding 2007
periods as net unit openings substantially offset the
previously mentioned acquisition of 42 restaurants by the
company during the last six months of 2007.

-- International Segment. The international segment reported
operating losses of $1.5 million and $3.3 million for the
three and six months ended June 29, 2008, respectively,
compared to losses of $2.0 million and $4.4 million,
respectively, in the same periods of the prior year. The
improvements of $500,000 and $1.1 million in operating results
reflect leverage on the international organizational structure
from increased revenues due to growth in the number of units
and unit volumes.

-- All Others Segment. The operating income for the "All others"
reporting segment increased approximately $300,000 and $1.8
million for the three and six months ended June 29, 2008,
respectively, as compared to the corresponding 2007 periods.
The increases are primarily due to improvements in operating
results of our print and promotions subsidiary, Preferred
Marketing Solutions, Inc., resulting from increased commercial
sales and related margin improvement.

-- Unallocated Corporate Segment. Unallocated corporate expenses
increased $1.7 million and $2.6 million for the three and six
months ended June 29, 2008, as compared to the corresponding
periods of the prior year. The components of the unallocated
corporate expenses were as follows (in thousands):

-0-
*T
Three Months Ended
---------------------------
June 29, July 1, Increase
2008 2007 (decrease)
---------------------------

General and administrative $6,048 $4,404 $1,644
Net interest 1,186 1,406 (220)
Depreciation 1,940 1,587 353
Contributions to the Marketing Fund 75 - 75
Other expense (income) (105) 89 (194)
---------------------------
Total unallocated corporate expenses $9,144 $7,486 $1,658
===========================

Six Months Ended
---------------------------
June 29, July 1, Increase
2008 2007 (decrease)
---------------------------

General and administrative $12,196 $ 9,289 $2,907
Net interest 2,358 2,698 (340)
Depreciation 3,737 3,313 424
Contributions to the Marketing Fund 150 400 (250)
Other expense (income) (78) 81 (159)
---------------------------
Total unallocated corporate expenses $18,363 $15,781 $2,582
===========================
*T

The increases in unallocated general and administrative costs for
both the three- and six-month periods were primarily due to increases
in executive incentive compensation, including our management
incentive program, as a result of (1) an expected higher level of goal
achievement in 2008 as compared to 2007; and (2) the fact that the
prior year periods included adjustments of approximately $1.2 million
for awards forfeited by our Founder Chairman due to a change in status
from an employee director of the company to a non-employee director.
Additionally, an increase in certain employee benefit costs during
2008, including health insurance, and severance-related costs recorded
in the first quarter of 2008 impacted the year-over-year comparison.

The effective income tax rate was 37.2% and 36.9% for the three
and six months ended June 29, 2008, respectively, (36.5% and 36.2% for
the three- and six-month periods, respectively, excluding BIBP) and
36.9% and 36.6% for the same periods in 2007 (36.5% for both the
three- and six-month periods in 2007, excluding BIBP).

Cash Flow

Cash flow from operations was $29.3 million for the first six
months of 2008 as compared to $26.2 million for the comparable period
in 2007. The consolidation of BIBP decreased cash flow from operations
by approximately $14.3 million and $8.7 million in the first six
months of 2008 and 2007, respectively. Excluding the impact of the
consolidation of BIBP, cash flow from operations was $43.5 million in
2008, as compared to $34.9 million in the corresponding 2007 period.
The $8.6 million increase was primarily due to an improvement in
working capital, including income and other taxes, accrued expenses
and accounts payable.

Form 10-Q Filing

See the Management's Discussion and Analysis of Financial
Condition and Results of Operations section of our quarterly Form 10-Q
filed with the Securities and Exchange Commission for additional
information concerning our operating results and cash flow for the
three- and six-month periods ended June 29, 2008.

Domestic Comparable Sales and Unit Count

Domestic system-wide comparable sales for the second quarter of
2008 increased 2.4% (composed of a 3.6% increase at company-owned
restaurants and a 1.9% increase at franchised restaurants). Domestic
system-wide comparable sales for the six months ended June 29, 2008
increased 2.0% (composed of a 3.1% increase at company-owned
restaurants and a 1.6% increase at franchised restaurants). The
comparable sales percentage represents the change in year-over-year
sales for the same base of restaurants for the same calendar period.

During the second quarter of 2008, 29 domestic restaurants (five
company-owned and 24 franchised) were opened. On a year-to-date basis,
we have opened 55 domestic restaurants (nine company-owned and 46
franchised) and 46 restaurants were closed. Our total domestic
development pipeline as of June 29, 2008 included approximately 350
restaurants scheduled to open over the next ten years.

At June 29, 2008, there were 3,270 domestic and international Papa
John's restaurants (670 company-owned and 2,600 franchised) operating
in all 50 states and 28 countries. The company-owned unit count
includes 127 restaurants operated in majority-owned domestic joint
venture arrangements, the operating results of which are fully
consolidated into the company's results.

International Update

Highlights:

-- During the second quarter, we opened 38 restaurants (two
company-owned and 36 franchised) while five restaurants were
closed. On a year-to-date basis, we have opened 60 restaurants
(five company-owned and 55 franchised) while seven restaurants
were closed.

-- International franchise sales increased 30.1% to $55.3 million
in the second quarter of 2008, from $42.5 million in the prior
year comparable quarter and 31.6% to $107.7 million for the
six months ended June 29, 2008, from $81.8 million in the
prior year comparable period.

-- As previously announced we entered into an agreement with
Berjaya Pizza Company Sdn. Bhd. for the development of 100
restaurants over the next ten years in Malaysia. The first
restaurant is scheduled to open later this year.

-- We recently entered into an agreement for the development of
20 units in the Dominican Republic over the next nine years,
with the first opening scheduled to occur this year.

-- At the end of June, we reached the milestone of over 500
restaurants operating internationally ten years after the
opening of our first restaurant outside of the U.S.

As of June 29, 2008, the company had a total of 501 restaurants
operating internationally (18 company-owned and 483 franchised), of
which 160 were located in Korea and China and 109 were located in the
United Kingdom and Ireland. Our total international development
pipeline as of June 29, 2008 included approximately 1,100 restaurants
scheduled to open over the next ten years.

Refranchising Initiative Update

At year-end, the company announced the implementation of a formal
refranchising initiative, the goal of which is to increase the
percentage of franchised units in the domestic restaurant portfolio
over time. The company's goal is to reduce the percentage of
domestic-owned company units to below 20% in the next few years (23.5%
at June 29, 2008).

The company is working to complete the sale of 21 company-owned
restaurants located in two markets. Our goal is to complete the sale
of these restaurants during the third quarter of 2008, subject to
satisfactory completion of due diligence and finalization of
third-party financing by the buyers. The company plans to continue to
review additional divestiture opportunities over the next several
months.

Share Repurchase Activity

The company's board of directors has authorized the repurchase of
$50.0 million of common stock during 2008. The company repurchased
approximately 664,000 shares of its common stock at an average price
of $27.13 per share, or a total of $18.0 million, during the second
quarter of 2008, and 768,000 shares of its common stock at an average
price of $26.40 per share, or a total of $20.3 million, during the
first six months of 2008. A total of 26,000 and 50,000 shares of
common stock were issued upon the exercise of stock options for the
three- and six-month periods ended June 29, 2008, respectively.
Subsequent to quarter-end, through July 30, 2008, the company
repurchased an additional $6.9 million of common stock (255,000 shares
at an average price of $26.99 per share). At July 30, 2008, $22.8
million remains available for repurchase under the repurchase
authorization.

There were 28.7 million diluted weighted average shares
outstanding for the second quarter of 2008, as compared to 30.6
million for the same period in 2007, a 6.2% decrease. Approximately
28.3 million actual shares of the company's common stock were
outstanding as of June 29, 2008.

The company's share repurchase activity increased earnings per
diluted share, excluding the impact of the consolidation of BIBP, by
$0.01 for the three and six months ended June 29, 2008.

2008 Earnings Guidance Reaffirmed

The company reaffirms its previously announced 2008 earnings per
diluted share guidance in the range of $1.68 to $1.76 for the year.
The projected earnings guidance excludes any impact from the
consolidation of the results of BIBP and reflects our expectations of
continued commodity price pressures, most notably cheese and wheat, as
well as increased fuel costs. We expect that net worldwide unit growth
will more likely be near the low end of our previous guidance of a
range of 160 to 190 units due to the possibility of reduced unit
openings and/or increased unit closings as a result of continued
pressures on operating margins related to increased commodity, labor
and energy costs. We also reiterate our guidance for domestic
system-wide comparable sales to increase in the range of 1.25% to
2.75%.

Non-GAAP Measures

The financial information we present in this press release
excluding the impact of the consolidation of BIBP are not measures
that are defined in accordance with accounting principles generally
accepted in the United States ("GAAP"). These non-GAAP measures should
not be construed as a substitute for or a better indicator of the
company's performance than the company's GAAP measures. Management
believes the financial information excluding the impact of the
consolidation of BIBP is important for purposes of comparison to prior
periods and development of future projections and earnings growth
prospects. Management analyzes the company's business performance and
trends excluding the impact of the consolidation of BIBP because the
results of BIBP are not indicative of the principal operating
activities of the company. In addition, annual cash bonuses, and
certain long-term incentive programs for various levels of management,
are based on financial measures that exclude BIBP. Management believes
these non-GAAP measures provide management and investors with a more
consistent view of performance than the closest GAAP equivalent.
Management compensates for this by using these measures in combination
with the GAAP measures. The presentation of the non-GAAP measures in
this press release is made alongside the most directly comparable GAAP
measures.

The company has provided the table below to reconcile the
financial results we present in this press release excluding the
impact of the consolidation of BIBP to our GAAP financial measures.

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*T
Three Months Ended Six Months Ended
------------------ ----------------
(In thousands, except per share June 29, July 1, June 29, July 1,
amounts) 2008 2007 2008 2007
---------- ------- -------- -------

Pre-tax income, as reported $12,186 $11,110 $25,787 $31,823
Loss from BIBP cheese purchasing
entity 6,302 8,257 14,253 8,663
---------- ------- -------- -------
Pre-tax income, excluding BIBP $18,488 $19,367 $40,040 $40,486
========== ======= ======== =======

Net income, as reported $ 7,648 $ 7,009 $16,273 $20,164
Loss from BIBP cheese purchasing
entity 4,096 5,289 9,264 5,545
---------- ------- -------- -------
Net income, excluding BIBP $11,744 $12,298 $25,537 $25,709
========== ======= ======== =======

Earnings per diluted share, as
reported $ 0.27 $ 0.23 $ 0.57 $ 0.66
Loss from BIBP cheese purchasing
entity 0.14 0.17 0.32 0.18
---------- ------- -------- -------
Earnings per diluted share,
excluding BIBP $ 0.41 $ 0.40 $ 0.89 $ 0.84
========== ======= ======== =======

Cash flow from operations, as
reported $29,252 $26,244
BIBP cheese purchasing entity 14,253 8,663
-------- -------
Cash flow from operations,
excluding BIBP $43,505 $34,907
======== =======
*T

Forward-Looking Statements

Certain information contained in this quarterly report,
particularly information regarding future financial performance and
plans and objectives of management, is forward-looking. Certain
factors could cause actual results to differ materially from those
expressed in forward-looking statements. These factors include, but
are not limited to: changes in pricing or other marketing or
promotional strategies by competitors which may adversely affect
sales; new product and concept developments by food industry
competitors; the ability of the company and its franchisees to meet
planned growth targets and operate new and existing restaurants
profitably; general economic conditions; increases in or sustained
high cost levels of food ingredients and other commodities, paper,
utilities, fuel, employee compensation and benefits, insurance and
similar costs; the ability to obtain ingredients from alternative
suppliers, if needed; health- or disease-related disruptions or
consumer concerns about commodities supplies; the selection and
availability of suitable restaurant locations; negotiation of suitable
lease or financing terms; constraints on permitting and construction
of restaurants; local governmental agencies' restrictions on the sale
of certain food products; higher-than-anticipated construction costs;
the hiring, training and retention of management and other personnel;
changes in consumer taste, demographic trends, traffic patterns and
the type, number and location of competing restaurants; franchisee
relations; the uncertainties associated with litigation; the
possibility of impairment charges if PJUK or recently acquired
restaurants perform below our expectations; our PJUK operations remain
contingently liable for payment under certain lease arrangements with
a total value of approximately $10.0 million associated with the sold
Perfect Pizza operations; federal and state laws governing such
matters as wages, benefits, working conditions, citizenship
requirements and overtime, including legislation to further increase
the federal and state minimum wage; and labor shortages in various
markets resulting in higher required wage rates. In recent months, the
credit markets have experienced instability. Our franchisees may
experience difficulty in obtaining adequate financing and thus our
growth strategy and franchise revenues may be adversely affected. The
above factors might be especially harmful to the financial viability
of franchisees or company-owned operations in under-penetrated or
emerging markets, leading to greater unit closings than anticipated.
Increases in projected claims losses for the company's self-insured
coverage or within the captive franchise insurance program could have
a significant impact on our operating results. Additionally, domestic
franchisees are only required to purchase seasoned sauce and dough
from our quality control centers ("QC Centers") and changes in
purchasing practices by domestic franchisees could adversely affect
the financial results of our QC Centers. Our international operations
are subject to additional factors, including political and health
conditions in the countries in which the company or its franchisees
operate; currency regulations and fluctuations; differing business and
social cultures and consumer preferences; diverse government
regulations and structures; ability to source high-quality ingredients
and other commodities in a cost-effective manner; and differing
interpretation of the obligations established in franchise agreements
with international franchisees. See "Part I. Item 1A. - Risk Factors"
of the Annual Report on Form 10-K for the fiscal year ended December
30, 2007 for additional factors.

Conference Call

A conference call is scheduled for August 6, 2008 at 10:00 EDT to
review second quarter earnings results. The call can be accessed from
the company's web page at www.papajohns.com in a listen-only mode, or
dial 800-487-2662 (pass code 32146821) for participation in the
question and answer session. International participants may dial
706-679-8452 (pass code 32146821).

The conference call will be available for replay, including
downloadable podcast, beginning August 6, 2008, at approximately noon
through August 13, 2008, at midnight EDT. The replay can be accessed
from the company's web page at www.papajohns.com or by dialing
800-642-1687 (pass code 32146821). International participants may dial
706-645-9291 (pass code 32146821).

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Summary Financial Data
Papa John's International, Inc.
(Unaudited)

Three Months Ended Six Months Ended
------------------- -------------------
(In thousands, except per June 29, July 1, June 29, July 1,
share amounts) 2008 2007 2008 2007
--------- --------- --------- ---------

Revenues $283,408 $256,256 $572,413 $516,880
========= ========= ========= =========

Income before income taxes (a) $ 12,186 $ 11,110 $ 25,787 $ 31,823
========= ========= ========= =========

Net income $ 7,648 $ 7,009 $ 16,273 $ 20,164
========= ========= ========= =========

Earnings per share - assuming
dilution $ 0.27 $ 0.23 $ 0.57 $ 0.66
========= ========= ========= =========

Weighted average shares
outstanding - assuming
dilution 28,705 30,600 28,754 30,623
========= ========= ========= =========

EBITDA (1) $ 22,211 $ 20,037 $ 45,444 $ 49,818
========= ========= ========= =========

(a) The following is a summary of our income (loss) before income
taxes (in thousands):

Three Months Ended Six Months Ended
------------------- -------------------
June 29, July 1, June 29, July 1,
2008 2007 2008 2007
--------- --------- --------- ---------

Domestic company-owned
restaurants $ 7,157 $ 7,535 $ 14,955 $ 15,750
Domestic commissaries 7,624 7,917 16,057 17,931
Domestic franchising 13,095 12,065 27,567 25,108
International (1,520) (2,032) (3,259) (4,352)
All others 1,993 1,679 4,518 2,724
Unallocated corporate expenses (9,144) (7,486) (18,363) (15,781)
Elimination of intersegment
profits (717) (311) (1,435) (894)
--------- --------- --------- ---------
Income before income taxes,
excluding VIEs 18,488 19,367 40,040 40,486
VIEs, primarily BIBP (2) (6,302) (8,257) (14,253) (8,663)
--------- --------- --------- ---------
Total income before income
taxes $ 12,186 $ 11,110 $ 25,787 $ 31,823
========= ========= ========= =========
*T

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Summary Financial Data (continued)
Papa John's International, Inc.
(Unaudited)

The following is a reconciliation of EBITDA to net income (in
thousands):

Three Months Ended Six Months Ended
------------------ -------------------
June 29, July 1, June 29, July 1,
2008 2007 2008 2007
--------- -------- --------- ---------

EBITDA (1) $22,211 $20,037 $ 45,444 $ 49,818
Income tax expense (4,538) (4,101) (9,514) (11,659)
Net interest (1,621) (1,338) (3,247) (2,511)
Depreciation and amortization (8,404) (7,589) (16,410) (15,484)
--------- -------- --------- ---------
Net income $ 7,648 $ 7,009 $ 16,273 $ 20,164
========= ======== ========= =========

(1) Management considers EBITDA to be a meaningful indicator of
operating performance from operations before depreciation,
amortization, net interest and income taxes. EBITDA provides us
with an understanding of one aspect of earnings before the impact
of investing and financing transactions and income taxes. While
EBITDA should not be construed as a substitute for net income or
a better indicator of liquidity than cash flows from operating
activities, which are determined in accordance with accounting
principles generally accepted in the United States ("GAAP"), it
is included herein to provide additional information with respect
to the ability of the company to meet its future debt service,
capital expenditure and working capital requirements. EBITDA is
not necessarily a measure of the company's ability to fund its
cash needs and it excludes components that are significant in
understanding and assessing our results of operations and cash
flows. In addition, EBITDA is not a term defined by GAAP and as a
result our measure of EBITDA might not be comparable to similarly
titled measures used by other companies. The above EBITDA
calculation includes the operating results of BIBP Commodities,
Inc., a variable interest entity.

(2) BIBP incurred an operating loss of $6.3 million in the second
quarter of 2008, which was composed of losses associated with
cheese sold to domestic company-owned restaurants and franchise
restaurants of $1.4 million and $4.4 million, respectively. The
remainder of the second quarter 2008 loss was primarily composed
of interest expense on outstanding debt with a third-party bank
and Papa John's. For the second quarter of 2007, BIBP reported an
operating loss of $8.3 million, which was composed of losses
associated with cheese sold to domestic company-owned restaurants
and franchise restaurants of $1.9 million and $6.3 million,
respectively. The remainder of the loss was primarily composed of
interest expense on outstanding debt with a third-party bank.

BIBP incurred an operating loss of $14.3 million for the six
months ended June 29, 2008, which was composed of losses
associated with cheese sold to domestic company-owned restaurants
and franchise restaurants of $3.3 million and $9.9 million,
respectively. The remainder of the 2008 loss was primarily
composed of interest expense on outstanding debt with a third-
party bank and Papa John's. For the six months ended July 1,
2007, BIBP reported operating losses of $8.7 million, which was
composed of losses associated with cheese sold to domestic
company-owned restaurants and franchise restaurants of $2.4
million and $6.2 million, respectively. The remainder of the 2007
loss was primarily composed of interest expense on outstanding
debt with a third-party bank.
*T

For more information about the company, please visit
www.papajohns.com.

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Papa John's International, Inc. and Subsidiaries
Consolidated Statements of Income

Three Months Ended Six Months Ended
----------------------- -----------------------
June 29, July 1, June 29, July 1,
2008 2007 2008 2007
----------------------- -----------------------
(In thousands, except
per share amounts) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Domestic:
Company-owned
restaurant sales $133,815 $119,633 $272,670 $241,677
Variable interest
entities restaurant
sales 2,239 1,602 4,279 3,289
Franchise royalties 14,759 13,746 30,204 28,198
Franchise and
development fees 247 541 1,167 1,303
Commissary sales 106,321 96,224 212,368 196,423
Other sales 16,434 17,355 33,279 31,846
International:
Royalties and
franchise and
development fees 3,108 2,223 6,128 4,671
Restaurant and
commissary sales 6,485 4,932 12,318 9,473
----------------------- -----------------------
Total revenues 283,408 256,256 572,413 516,880

Costs and expenses:
Domestic Company-
owned restaurant
expenses:
Cost of sales 30,803 25,829 62,375 50,917
Salaries and
benefits 40,050 35,928 81,610 72,872
Advertising and
related costs 11,913 11,159 24,610 22,062
Occupancy costs 8,540 7,520 17,011 14,809
Other operating
expenses 18,072 16,411 36,379 32,804
----------------------- -----------------------
Total domestic
Company-owned
restaurant expenses 109,378 96,847 221,985 193,464

Variable interest
entities restaurant
expenses 1,987 1,352 3,780 2,731

Domestic commissary
and other expenses:
Cost of sales 89,976 80,944 179,982 162,719
Salaries and
benefits 9,127 9,006 18,092 17,804
Other operating
expenses 12,112 11,147 23,644 22,145
----------------------- -----------------------
Total domestic
commissary and other
expenses 111,215 101,097 221,718 202,668

Loss from the
franchise cheese-
purchasing program,
net of minority
interest 4,364 6,277 9,922 6,178
International
operating expenses 5,818 4,426 11,158 8,464
General and
administrative
expenses 27,237 25,221 54,451 50,621
Minority interests and
other general
expenses 1,198 999 3,955 2,936
Depreciation and
amortization 8,404 7,589 16,410 15,484
----------------------- -----------------------
Total costs and
expenses 269,601 243,808 543,379 482,546
----------------------- -----------------------

Operating income 13,807 12,448 29,034 34,334
Net interest (1,621) (1,338) (3,247) (2,511)
----------------------- -----------------------
Income before income
taxes 12,186 11,110 25,787 31,823
Income tax expense 4,538 4,101 9,514 11,659
----------------------- -----------------------
Net income $ 7,648 $ 7,009 $ 16,273 $ 20,164
======================= =======================

Basic earnings per
common share $ 0.27 $ 0.23 $ 0.57 $ 0.67
======================= =======================
Earnings per common
share - assuming
dilution $ 0.27 $ 0.23 $ 0.57 $ 0.66
======================= =======================

Basic weighted average
shares outstanding 28,372 30,054 28,536 30,059
======================= =======================
Diluted weighted
average shares
outstanding 28,705 30,600 28,754 30,623
======================= =======================
*T

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*T
Papa John's International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

June 29, December 30,
2008 2007
(Unaudited) (Note)
----------- ------------
(In thousands)

Assets
Current assets:
Cash and cash equivalents $ 8,356 $ 8,877
Accounts receivable 23,427 22,539
Inventories 16,981 18,806
Prepaid expenses 9,685 10,711
Other current assets 6,087 5,581
Assets held for sale 4,450 -
Deferred income taxes 8,430 7,147
----------- ------------
Total current assets 77,416 73,661

Investments 855 825
Net property and equipment 196,689 198,957
Notes receivable 11,597 11,804
Deferred income taxes 18,400 12,384
Goodwill 83,194 86,505
Other assets 17,255 17,681
----------- ------------
Total assets $ 405,406 $ 401,817
=========== ============

Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 31,450 $ 31,157
Income and other taxes 12,570 10,866
Accrued expenses 54,923 56,466
Current portion of debt 12,225 8,700
----------- ------------
Total current liabilities 111,168 107,189

Unearned franchise and development fees 5,791 6,284
Long-term debt, net of current portion 135,195 134,006
Other long-term liabilities 26,810 27,435
----------- ------------
Total liabilities 278,964 274,914

Total stockholders' equity 126,442 126,903
----------- ------------
Total liabilities and stockholders' equity $ 405,406 $ 401,817
=========== ============

Note: The balance sheet at December 30, 2007 has been derived from the
audited consolidated financial statements at that date, but does not
include all information and footnotes required by accounting
principles generally accepted in the United States for a complete set
of financial statements.
*T

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*T
Papa John's International, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

Six Months Ended
-----------------------
June 29, July 1,
(In thousands) 2008 2007
-----------------------
(Unaudited) (Unaudited)
Operating activities
Net income $ 16,273 $ 20,164
Adjustments to reconcile net income to net
cash provided by operating activities:
Restaurant closure, impairment and
disposition losses (gains) 1,167 (434)
Provision for uncollectible accounts and
notes receivable 1,264 1,034
Depreciation and amortization 16,410 15,484
Deferred income taxes (7,178) (5,709)
Stock-based compensation expense 2,567 1,855
Excess tax benefit related to exercise of
non-qualified stock options (117) (3,025)
Other 137 3,694
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable (2,251) 1,048
Inventories 1,825 1,785
Prepaid expenses 1,026 (1,723)
Other current assets (256) 908
Other assets and liabilities (1,233) (892)
Accounts payable 293 (2,437)
Income and other taxes 1,704 (1,228)
Accrued expenses (1,885) (3,929)
Unearned franchise and development
fees (494) (351)
----------- -----------
Net cash provided by operating activities 29,252 26,244

Investing activities
Purchase of property and equipment (16,010) (16,433)
Purchase of investments (437) -
Proceeds from sale or maturity of investments 407 671
Loans issued (681) (4,263)
Loan repayments 1,078 2,029
Acquisitions (100) (8,615)
Proceeds from divestitures of restaurants - 632
Other 156 27
----------- -----------
Net cash used in investing activities (15,587) (25,952)

Financing activities
Net proceeds from line of credit facility 1,102 19,500
Net proceeds from short-term debt - variable
interest entities 3,525 10,250
Excess tax benefit related to exercise of non-
qualified stock options 117 3,025
Proceeds from exercise of stock options 965 10,323
Acquisition of Company common stock (20,287) (35,827)
Other 339 (675)
----------- -----------
Net cash (used in) provided by financing
activities (14,239) 6,596

Effect of exchange rate changes on cash and
cash equivalents 53 66
----------- -----------
Change in cash and cash equivalents (521) 6,954
Cash and cash equivalents at beginning of
period 8,877 12,979
----------- -----------

Cash and cash equivalents at end of period $ 8,356 $ 19,933
=========== ===========
*T

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*T
Restaurant Progression
Papa John's International, Inc.

Second Quarter Ended June 29, 2008
---------------------------------------
Corporate Franchised
Domestic Int'l Domestic Int'l Total
---------------------------------------
Papa John's restaurants
Beginning of period 648 17 2,122 451 3,238
Opened 5 2 24 36 67
Closed (1) (1) (29) (4) (35)
Acquired - - - - -
Sold - - - - -
---------------------------------------
End of Period 652 18 2,117 483 3,270
=======================================

Second Quarter Ended July 1, 2007
---------------------------------------
Corporate Franchised
Domestic Int'l Domestic Int'l Total
---------------------------------------
Papa John's restaurants
Beginning of period 586 8 2,086 364 3,044
Opened 9 - 38 18 65
Closed (2) - (15) (2) (19)
Acquired 13 - - - 13
Sold - - (13) - (13)
---------------------------------------
End of Period 606 8 2,096 380 3,090
=======================================
*T

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*T
Restaurant Progression
Papa John's International, Inc.

Six Months Ended June 29, 2008
---------------------------------------
Corporate Franchised
Domestic Int'l Domestic Int'l Total
---------------------------------------
Papa John's restaurants
Beginning of period 648 14 2,112 434 3,208
Opened 9 5 46 55 115
Closed (6) (1) (40) (6) (53)
Acquired 1 - - - 1
Sold - - (1) - (1)
---------------------------------------
End of Period 652 18 2,117 483 3,270
=======================================

Six Months Ended July 1, 2007
---------------------------------------
Corporate Franchised
Domestic Int'l Domestic Int'l Total
---------------------------------------
Papa John's restaurants
Beginning of period 577 11 2,080 347 3,015
Opened 13 - 60 36 109
Closed (2) - (26) (6) (34)
Acquired 19 - 1 3 23
Sold (1) (3) (19) - (23)
---------------------------------------
End of Period 606 8 2,096 380 3,090
=======================================
*T

Papa John's International, Inc.
David Flanery, Chief Financial Officer, 502-261-4753

Copyright Business Wire 2008