PAPA JOHNS INTERNATIONAL INC

Previous wording

Papa John’s International, Inc. (referred to as the “Company,” “Papa John’s,” “Papa Johns” or in the first-person notations of “we,” “us” and “our”) operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark “Papa John’s”. Papa Johns began operations in 1984. At September 28, 2025, there were 5,994 Papa John’s restaurants in operation, consisting of 558 Company-owned and 5,436 franchised restaurants operating in 51 countries and territories. Our revenues are derived from retail sales of pizza and other food and beverage products to the general public by Company-owned restaurants, franchise royalties, and sales of franchise and development rights. Additionally, we derive revenues from sales to franchisees of various items including food and paper products from our North America Quality Control Centers (“QC Centers”) and operation of our International QC Center in the United Kingdom (“UK”), contributions received by Papa John’s Marketing Fund (“PJMF”) which is our national marketing fund, and fees related to the use of information systems equipment as well as software and related services. We believe that in addition to supporting profitability and growth of both Company-owned and franchised restaurants, these activities contribute to product quality and consistency throughout the Papa Johns system.

Current wording

Papa John’s International, Inc. (referred to as the “Company,” “Papa John’s,” “Papa Johns” or in the first-person notations of “we,” “us” and “our”) operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark “Papa John’s”. Papa Johns began operations in 1984. At March 29, 2026, there were 6,020 Papa John’s restaurants in operation, consisting of 470 Company-owned and 5,550 franchised restaurants operating in 50 countries and territories. Our revenues are derived from retail sales of pizza and other food and beverage products to the general public by Company-owned restaurants, franchise royalties, and sales of franchise and development rights. Additionally, we derive revenues from sales to franchisees of various items including food and paper products from our North America Quality Control Centers (“QC Centers”) and operation of our International QC Center in the United Kingdom (“UK”), contributions received by Papa John’s Marketing Fund (“PJMF”) which is our national marketing fund, and fees related to the use of information systems equipment as well as software and related services. We believe that in addition to supporting profitability and growth of both Company-owned and franchised restaurants, these activities contribute to product quality and consistency throughout the Papa Johns system.

Previous wording

In discussions of our business, “Domestic” is defined as within the contiguous United States, “North America” includes Canada, and “International” includes the rest of the world other than North America.

Current wording

In discussions of our business, “Domestic” is defined as within the contiguous United States, “North America” includes Domestic and Canada, and “International” includes the rest of the world other than North America.

Previous wording

During the third quarter of 2025, we remained focused on executing our strategic priorities as we position the business for long-term success amidst a softening and challenging consumer environment in North America. We continue to steer our efforts and investments toward initiatives that improve our value perception and improve our digital and loyalty experience to increase conversion and reduce friction within the customer experience. Our key areas of focus are:

Current wording

During the first quarter of 2026, we continued progressing on our business transformation initiatives as we position the business for long-term success amidst a challenging and softer consumer environment in North America and a dynamic International market. We continued to steer our efforts and investments towards initiatives that improve our value perception and enhance the customer journey across our digital platforms to increase conversion and reduce friction within the customer experience. Our key areas of focus include:

Previous wording

•Marketing strategy: We continued investments in our messaging to showcase our BETTER INGREDIENTS. BETTER PIZZA® platform by highlighting our six simple ingredients, fresh, never frozen original dough and the craftsmanship behind the products we serve, which we believe are key differentiators of our brand. We also sharpened our value perception with Buy One, Get One Free pizza offers during the quarter, and continued emphasizing our Papa Pairings mix and match platform. We plan to maintain a compelling value proposition while staying true to our premium positioning and layering in exciting menu innovation to further strengthen our barbell strategy. We anticipate spending up to an incremental $25 million in marketing investments throughout 2025 compared with 2024, inclusive of approximately $17 million spent during the first nine months of 2025, including investments in our customer relationship management platform and our loyalty program. This incremental spend will focus on ensuring a strong presence nationally as well as in key regional and local markets while leveraging our data to create more personalized offers for our customers.

Current wording

•Marketing strategy: We have partnered with our franchisees to re-establish our area advertising cooperative (“Co-op”) program, helping ensure a strong presence in key regional and local markets. Through our mix of national and local advertising, we continued investments in our messaging to highlight our six simple ingredients, fresh, never frozen original dough and the craftsmanship behind the products we serve, which we believe are key differentiators of our brand. We also sharpened our value perception with limited-time promotional offers while continuing to emphasize our Papa Pairings mix and match platform. We plan to maintain a compelling value proposition while staying true to our premium positioning and layering in exciting menu innovations, such as our new pan pizzas and oven-toasted sandwiches, to expand our addressable market and strengthen our barbell strategy.

Previous wording

•Evaluating our cost structure: As previously discussed, we have completed an internal review of our North American supply chain and have identified productivity initiatives that we believe will optimize our commissary business in an effort to reduce the overall cost to serve our Domestic Company-owned and franchised restaurants. We expect to achieve at least $50 million in supply chain savings as a result of these efforts, and we currently believe that we will begin recognizing cost savings during 2026 which should benefit all of the restaurants in our system.

Current wording

•Optimizing our supply chain: We have completed our previously announced internal review of our North American supply chain and have identified productivity initiatives that we believe will optimize our commissary business in an effort to reduce the overall cost to serve across all of our Domestic Company-owned and franchised restaurants, without impacting our commitment to product quality. We expect to achieve at least $60 million in North America systemwide supply chain savings over the next two years, equating to meaningful restaurant-level margin improvement. We captured approximately $7 million of benefits in the first quarter and are on track to realize at least $25 million of savings by the end of 2026.

Previous wording

Company-owned restaurant sales, which include sales from both Domestic and International Company-owned restaurants, decreased $2.7 million, or 1.6%, for the three months ended September 28, 2025, and decreased $25.7 million, or 4.7%, for the nine months ended September 28, 2025, as compared to the prior year comparable periods. The decrease for the three and nine months ended September 28, 2025, is partially due to a $3.5 million and $6.3 million decrease in revenue from our Domestic Company-owned restaurants, respectively, due primarily to lower comparable sales driven by lower transaction volumes, along with the refranchising of 15 restaurants in September 2024. Comparable sales for our Domestic Company-owned restaurants declined 3.1% and 2.5% for the three and nine months ended September 28, 2025, respectively. The decrease for the three months ended September 28, 2025 was partially offset by higher average ticket and an increase in International restaurants sales driven by improved performance at our Company-owned restaurants in the

Current wording

Company-owned restaurant sales, which include sales from both Domestic and International Company-owned restaurants, decreased $30.7 million, or 17.7%, for the three months ended March 29, 2026 as compared to the prior year comparable period. The decrease was primarily attributable to $24.9 million in prior-period sales from the formerly-Company owned restaurants refranchised in the 2025 refranchising transaction, as detailed above. The decrease was also due to lower comparable sales of 5.2% for our Domestic Company-owned restaurants driven by lower transaction volumes, partially offset by higher average ticket.

Previous wording

North America franchise restaurant sales are not included in Company revenues; however, our North America franchise royalties are derived from these sales. North America franchise restaurant sales decreased to $714.6 million, or 0.8% excluding the impact of foreign currency fluctuations, for the three months ended September 28, 2025. North America franchise restaurant sales increased to $2.23 billion, or 1.1% excluding the impact of foreign currency fluctuations, for the nine months ended September 28, 2025 as compared to the prior year comparable period. The primary drivers of the changes in franchise restaurant sales were the North America equivalent unit growth noted above and restaurant growth, offset by a decrease in comparable sales of 2.6% and 1.3% for the three and nine months ended September 28, 2025, respectively.

Current wording

North America franchise restaurant sales are not included in Company revenues; however, our North America franchise royalties are derived from these sales. North America franchise restaurant sales decreased 3.4% to $728.7 million for the three months ended March 29, 2026 compared to the prior year comparable period, excluding the impact of foreign currency fluctuations. The decline in franchise restaurant sales was due to a decrease in comparable sales of 6.7%, and franchise equivalent unit decrease of 1.0%, offset by the restaurant growth noted above.

Previous wording

International franchise restaurant sales are also not included in Company revenues; however, our international royalty revenue is derived from these sales. International franchise restaurant sales increased to $328.3 million, or 10.1% excluding the impact of foreign currency fluctuations, and increased to $950.4 million, or 10.0% excluding the impact of foreign currency fluctuations, for the three and nine months ended September 28, 2025, respectively. As mentioned above, the UK restaurant closures and refranchising transactions in the second and third quarters of 2024 impacted the comparability of International franchise restaurant sales earned as compared to the prior year comparable periods. Excluding the impact of the UK restaurant changes and foreign currency fluctuations, International franchise restaurant sales would have increased $28.6 million, or 9.6%, and increased $65.6 million, or 7.4%, for the three and nine months ended September 28, 2025, respectively. The increases were due to growth in International comparable sales of 7.1% and 4.7% for the three and nine months ended September 28, 2025, respectively, as well as restaurant growth.

Current wording

International franchise restaurant sales are also not included in Company revenues; however, our international royalty revenue is derived from these sales. International franchise restaurant sales increased 6.0% to $315.1 million for the three months ended March 29, 2026 compared to the prior year comparable period, excluding the impact of foreign currency fluctuations. The increase was due to growth in International comparable sales of 3.6% as well as restaurant growth.

Previous wording

Commissary revenues, which includes sales from our North American and International QC Centers, increased $0.6 million or 0.3% for the three months ended September 28, 2025 and increased $32.3 million or 4.9% for the nine months ended September 28, 2025 as compared to the prior year comparable period. The increase for the three and nine months ended September 28, 2025 was primarily due to higher prices and higher transaction volumes. The increase for the three months ended September 28, 2025 was offset by commodity deflation and changes in product mix as compared to the prior year comparable period.

Current wording

Commissary revenues, which includes sales from our North American and International QC Centers, decreased $6.3 million, or 2.8%, for the three months ended March 29, 2026 as compared to the prior year comparable period. The decrease was primarily due to food cost deflation, lower transaction volumes, and franchisee food cost subsidies during the quarter, partially offset by higher prices and an increase in commissary revenues compared to the prior year comparable period of approximately $7 million due to an increase in franchised restaurants as a result of the 2025 refranchising transaction discussed above.

Previous wording

Other revenues, which primarily includes revenues derived from our online and mobile ordering business, increased $1.9 million, or 9.7%, and increased $7.5 million, or 12.2%, for the three and nine months ended September 28, 2025, respectively, as compared to the prior year comparable periods primarily due to higher revenues generated from technology services as a result of an increase in the technology fee charged to franchisees that began in the second half of 2024.

Current wording

Other revenues, which primarily includes revenues derived from our online and mobile ordering business, decreased $2.0 million, or 8.3%, for the three months ended March 29, 2026 as compared to the prior year comparable period primarily due to lower revenues generated from technology services as a result of a decrease in the technology fee charged to franchisees that began in the second half of 2025, as well as lower North America systemwide sales.

Previous wording

Advertising funds revenue, which includes the operations of PJMF as well as local and International marketing funds, increased $0.3 million, or 0.7%, and increased $9.1 million, or 7.6%, for the three and nine months ended September 28, 2025, respectively, as compared to the prior year comparable periods. The increases were primarily driven by global system-wide restaurant sales growth of 1.8% and 2.3% for the three and nine months ended September 28, 2025, respectively, as well as increases to contribution percentages in certain International markets. The increase for the nine months ended September 28, 2025 was also driven by increases in the PJMF contribution percentage, which took effect in the second quarter of 2024.

Current wording

Advertising funds revenue, which includes the operations of PJMF as well as local and International marketing funds, decreased by less than 1% for the three months ended March 29, 2026 as compared to the prior year comparable period. The decrease was primarily driven by global system-wide restaurant sales decline of 3.1% for the three months ended March 29, 2026.

Previous wording

Cost of sales consists primarily of Company-owned restaurant and supply chain costs incurred to generate related revenues. Components of cost of sales primarily include food and paper products, labor, freight and delivery, occupancy costs, local advertising costs, and insurance expense. Cost of sales were $369.1 million and $1.11 billion, respectively, for the three and nine months ended September 28, 2025, a decrease of $0.9 million and an increase of $6.6 million, respectively, from the prior year comparable periods.

Current wording

Cost of sales consists of Company-owned restaurant and supply chain costs incurred to generate related revenues. Components of cost of sales primarily include food and paper products, labor, freight and delivery, occupancy costs, local advertising costs, and insurance expense. Cost of sales was $340.9 million for the three months ended March 29, 2026, a decrease of $25.6 million, or 7.0%, from the prior year comparable period.

Previous wording

Costs of sales by segment for the three and nine months ended September 28, 2025 and September 29, 2024 were as follows:

Current wording

Costs of sales by segment for the three months ended March 29, 2026 and March 30, 2025 were as follows:

Previous wording

General and administrative expenses (“G&A”) expenses were $56.5 million, or 11.1% of revenues, and $191.8 million or 12.3% of revenues, for the three and nine months ended September 28, 2025, respectively, as compared to $12.9 million, or 2.5% of revenues, and $127.8 million, or 8.4% of revenues for the prior year comparable periods, respectively. G&A expenses consisted of the following:

Current wording

General and administrative expenses (“G&A”) expenses were $56.0 million, or 11.7% of total revenues for the three months ended March 29, 2026, as compared to $65.2 million, or 12.6% of total revenues, for the prior year comparable period. G&A expenses consisted of the following:

Previous wording

(a)Represents costs associated with the Company’s International Transformation Plan. Refer to “Note 9. Restructuring” for additional details.

Current wording

(b)For the three months ended March 29, 2026, represents costs associated with the Company’s Enterprise Transformation Plan. For the three months ended March 30, 2025, represents costs associated with the Company’s International Transformation Plan. Refer to “Note 9. Restructuring” for additional details.

Previous wording

(c)Represents pre-tax gain on sale, net of transaction costs, realized upon the August 2, 2024 completion of the sale of our Texas and Florida QC Center properties. Refer to “Note 11. Divestitures” for additional details.

Current wording

(c)Represents additional pre-tax gain on sale, net of transaction costs, associated with the 2025 refranchising transaction related to the assignment of certain remaining leases to the Buyer. See “Note 11. Divestitures” for additional details.

Previous wording

ii. 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;

Current wording

(d)For the three months ended March 29, 2026, represents costs associated with project-based strategic initiatives that are not related to our ongoing operations. For the three months ended March 30, 2025, other costs is comprised of costs incurred, net of anticipated insurance recoveries, arising from a tornado that damaged the Texas QC Center; and costs associated with project-based strategic initiatives that are not related to our ongoing operations.

Previous wording

Advertising funds expenses were $41.5 million or 99.5% of advertising revenues and $129.8 million or 100.2% of advertising revenues for the three and nine months ended September 28, 2025, respectively, as compared to $41.4 million or 100.0% of advertising revenues and $120.3 million or 99.9% of advertising revenues for the prior year comparable periods, respectively. Advertising funds expense is comprised primarily of expenses incurred by PJMF, which is designed to operate at break-even as it spends all annual contributions received from the system. The increase for the nine months ended September 28, 2025 was primarily due to higher advertising spend resulting from the previously discussed increase in contributions to the national marketing fund. Advertising funds expense also contains expenses incurred through our international marketing funds to support our International business, which may lead to Advertising funds expense being less than or in excess of Advertising funds revenue due to timing differences.

Current wording

Advertising funds expenses were $43.2 million or 99.5% of advertising revenues for the three months ended March 29, 2026, as compared to $44.3 million or 101.5% of advertising revenues for the prior year comparable period. Advertising funds expense is comprised primarily of expenses incurred by PJMF, which is designed to operate at break-even as it spends all annual contributions received from the system. The decrease for the three months ended March 29, 2026 was primarily due to a global system-wide restaurant sales decline of 3.1%. Advertising funds expense also contains expenses incurred through our international marketing funds to support our International business, which may lead to Advertising funds expense being less than or in excess of Advertising funds revenue due to timing differences.

Previous wording

We evaluate the performance of our reportable segments and allocate resources to them based on earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, and other adjustments, referred to as adjusted EBITDA. See “Note 12. Segment Information” for further information regarding the Company’s segments. Adjusted EBITDA for each of our reportable segments is summarized in the table below.

Current wording

We evaluate the performance of our reportable segments and allocate resources to them based on earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, and other adjustments, referred to as segment adjusted EBITDA. See “Note 12. Segment Information” for further information regarding the Company’s segments. Segment adjusted EBITDA for each of our reportable segments is summarized in the table below.

Previous wording

Net interest expense decreased $0.7 million and $2.0 million for the three and nine months ended September 28, 2025, respectively. The decrease for the three and nine months ended September 28, 2025 was primarily due to lower average interest rates during the respective periods.

Current wording

Net interest expense decreased $0.4 million for the three months ended March 29, 2026 primarily due to lower average interest rates during the respective periods.

Previous wording

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 rate for both periods was primarily due to lower pretax book income and larger tax shortfall generated by vesting of restricted shares through the third quarter of 2025.

Current wording

Our effective income tax rate was 37.4% for the three months ended March 29, 2026 as compared to an income tax rate of 32.7% for the prior year comparable period. The higher effective tax rate was primarily due to a shift in income between jurisdictions and tax shortfall generated by vesting of restricted shares.

Previous wording

Net income included losses of $0.2 million and income of less than $0.1 million, respectively, attributable to noncontrolling interests for the three and nine months ended September 28, 2025 as compared to losses of less than $0.1 million and income of $0.6 million, respectively, for the prior year comparable periods.

Current wording

Net income included losses of $0.3 million attributable to noncontrolling interests for the three months ended March 29, 2026 as compared to income of $0.1 million for the prior year comparable period.

Previous wording

Diluted earnings per common share were $0.13 and $0.69 for the three and nine months ended September 28, 2025, respectively, as compared to $1.27 and $2.09 for the prior year comparable periods, respectively, representing a decrease of $1.14 and $1.40, respectively. Adjusted diluted earnings per common share, a non-GAAP measure, was $0.32 and $1.09 for the three and nine months ended September 28, 2025, respectively, as compared to adjusted diluted earnings per common share of $0.43 and $1.71 for the prior year comparable periods, respectively, representing a decrease of $0.11 and $0.63, respectively. See “Non-GAAP Measures” for additional information.

Current wording

Diluted earnings per common share were $0.21 for the three months ended March 29, 2026 as compared to $0.27 for the prior year comparable period, representing a decrease of $0.06. Adjusted diluted earnings per common share, a non-GAAP measure, was $0.32 for the three months ended March 29, 2026 as compared to adjusted diluted earnings per common share of $0.36 for the prior year comparable period, representing a decrease of $0.04. See “Non-GAAP Measures” for additional information.

Previous wording

In addition to the results provided in accordance with U.S. GAAP, we provide certain non-GAAP measures, which present results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with U.S. GAAP and include the following: adjusted EBITDA, adjusted net income attributable to common shareholders and adjusted diluted earnings per common share. We believe that our non-GAAP financial measures enable investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies. We believe that the disclosure of these non-GAAP measures is useful to investors as they reflect metrics that our management team and Board utilize to evaluate our operating performance, allocate resources and administer employee incentive plans. The most directly comparable U.S. GAAP measures to adjusted EBITDA, adjusted net income attributable to common shareholders and adjusted diluted earnings per common share are net income, net income attributable to common shareholders and diluted earnings per common share, respectively. 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 U.S. GAAP results. The table below reconciles our GAAP financial results to our non-GAAP financial measures.

Current wording

In addition to the results provided in accordance with U.S. GAAP, we provide certain non-GAAP measures, which present results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with U.S. GAAP and include the following: adjusted EBITDA, 4-wall EBITDA, 4-wall EBITDA margin, adjusted net income attributable to common shareholders, and adjusted diluted earnings per common share. We believe that our non-GAAP financial measures enable investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies. We believe that the disclosure of these non-GAAP measures is useful to investors as they reflect metrics that our management team and Board utilize to evaluate our operating performance, allocate resources and administer employee incentive plans. The most directly comparable U.S. GAAP measures to adjusted EBITDA, 4-wall EBITDA, adjusted net income attributable to common shareholders, and adjusted diluted earnings per common share, are net income, segment adjusted EBITDA, net income attributable to common shareholders, and diluted earnings per common share, respectively. 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 U.S. GAAP results.

Previous wording

(e)The tax effect on non-GAAP adjustments was calculated by applying the marginal tax rates of 22.7% for the three and nine months ended September 28, 2025 and 22.6% for the three and nine months ended September 29, 2024.

Current wording

(d)The tax effect on non-GAAP adjustments was calculated by applying the marginal tax rates of 23.2% for the three months ended March 29, 2026 and 22.7% for the three months ended March 30, 2025.

Previous wording

Our primary sources of liquidity and capital resources are cash flows from operations and borrowings under the Second Amended and Restated Credit Agreement, dated as of March 26, 2025(the “Second Amended and Restated Credit Agreement”), which amended and restated the Amended and Restated Credit Agreement dated as of September 14, 2021 and amended May 30, 2023. 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”). See “Note 8. Debt” for additional detail regarding the Second Amended and Restated Credit Agreement.

Current wording

Our primary sources of liquidity and capital resources are cash flows from operations and borrowings under the revolving credit facility (the “PJI Revolving Facility”) that forms a part of our Second Amended and Restated Credit Agreement dated as of March 26, 2025(the “Credit Agreement”). The Credit Agreement provides for a senior secured term loan in a principal amount of $200 million (the “Term Loan”) and a principal amount of $600 million available for borrowing under the PJI Revolving Facility.

Previous wording

The table below summarizes our cash flows for the nine months ended September 28, 2025 and September 29, 2024 (in thousands):

Current wording

The table below summarizes our cash flows for the three months ended March 29, 2026 and March 30, 2025 (in thousands):

Previous wording

Total cash used in investing activities was $37.6 million for the nine months ended September 28, 2025 compared to cash provided by investing activities of $7.4 million for the same period in 2024. Net cash used in investing activities during the nine months ended September 28, 2025 primarily reflects $52.1 million in capital expenditures, which includes $5.1 million of additional capital expenditures related to natural disasters, partially offset by $3.3 million of related insurance proceeds. Net cash provided by investing activities for the nine months ended September 29, 2024 includes net proceeds of $46.7 million from the sale of two Domestic QC Centers in the third quarter of 2024, offset by capital expenditures of $46.9 million.

Current wording

Total cash used in investing activities was $5.2 million for the three months ended March 29, 2026 compared to $7.1 million for the same period in 2025. Net cash used in investing activities during the three months ended March 29, 2026 primarily reflects $13.5 million in capital expenditures, which includes $0.1 million of additional capital expenditures related to natural disasters, partially offset by proceeds of $3.5 million from the sale of the building occupied by our former print and promotions business in Louisville, Kentucky, and distributions of $3.2 million related to our deferred compensation plan. Net cash provided by investing activities for the three months ended March 30, 2025 primarily reflects $12.2 million in capital expenditures partially offset by distributions of $4.7 million related to our deferred compensation plan.

Previous wording

Total cash used in financing activities was $68.2 million for the nine months ended September 28, 2025 compared to $86.6 million for the same period in 2024. During the first nine months of 2025, the principal financing outflows were related to dividend payments of $45.8 million and payments related to financing leases of $7.5 million. Cash used in financing activities also reflects the impact of net repayments of $13.3 million under the PJI Revolving Facility throughout the year, which includes the refinancing of our debt via the Second Amended and Restated Credit Agreement during the first quarter of 2025. This refinancing resulted in borrowings of $200.0 million under the new Term Loan, from which the proceeds were used to repay $196.8 million to the PJI Revolving Facility as well as $3.2 million in related issuance costs.

Current wording

In the first quarter of 2025, the primary uses of cash for financing activities were $15.2 million in dividend payments, payments related to finance leases of $2.4 million, and $1.1 million in tax payments on equity award issuances. Cash used in financing activities also reflects the impact of the refinancing of our PJI Revolving Facility, which resulted in borrowings of $200.0 million under the Term Loan, from which the proceeds were used to repay $196.8 million under the PJI Revolving Facility during the quarter and $3.0 million in related issuance costs.

Previous wording

In the first nine months of 2024, the primary uses of cash for financing activities were $45.4 million in dividend payments, net repayments of $31.6 million from the PJI Revolving Facility and the PJMF revolving line of credit (the “PJMF Revolving Facility”), $3.5 million in tax payments on equity award issuances, and $6.8 million in payments related to financing leases. There were no share repurchases in the first nine months of 2025 or 2024.

Current wording

There were no share repurchases in the first three months of 2026 or 2025.

Previous wording

Our outstanding debt as of September 28, 2025 was $736.7 million, which was comprised of $400.0 million principal amount of our 3.875% senior notes (the “Notes”), $200.0 million of Term Loan borrowings, and $136.7 million outstanding under the PJI Revolving Facility. Remaining availability under the PJI Revolving Facility was approximately $463.3 million as of September 28, 2025.

Current wording

Our outstanding debt as of March 29, 2026 was $741.6 million, which was comprised of $400.0 million principal amount of our 3.875% senior notes (the “Notes”), $200.0 million of Term Loan borrowings, and $141.6 million outstanding under the PJI Revolving Facility. Remaining availability under the PJI Revolving Facility was approximately $458.7 million as of March 29, 2026.

Previous wording

Our Second Amended and Restated Credit Agreement contains customary affirmative and negative covenants that, among other things, require customary reporting obligations, and restrict, subject to certain exceptions, the incurrence of additional indebtedness and liens, the consummation of certain mergers, consolidations, sales of assets and similar transactions, the making of investments, equity distributions and other restricted payments, and transactions with affiliates, in each case, that are substantially similar to our previous credit agreement (the “Previous Credit Agreement”). In addition, the Company is subject to the following financial covenants substantially similar to those in the Previous Credit Agreement (other than the new liquidity requirement described in clause (3)): (1) a maximum Leverage Ratio of 5.25 to 1.00, subject to the Company’s election to increase the maximum Leverage Ratio by 0.5 to 1.0 in connection with material acquisitions if the Company satisfies certain requirements; (2) a minimum ratio of EBITDA plus consolidated rental expense to consolidated interest expense plus consolidated rental expense of 2.00 to 1.00; and (3) applicable only during the time period beginning 91 days prior to the maturity of the Company’s existing senior notes due 2029 (the “Senior Notes”) and until such Senior Notes are repaid in full or the maturity thereof is extended at least 91 days after the latest maturity date applicable to the Credit Facilities, liquidity of not less than $150.0 million. The Company is also subject to certain financial covenants, as shown in the following table, that could restrict or impose constraints on the liquidity of our business:

Current wording

The Credit Agreement contains customary affirmative and negative covenants that, among other things, require customary reporting obligations, and restrict, subject to certain exceptions, the incurrence of additional indebtedness and liens, the consummation of certain mergers, consolidations, sales of assets and similar transactions, the making of investments, equity distributions and other restricted payments, and transactions with affiliates. The Company is also subject to certain financial covenants, as shown in the following table, that could restrict or impose constraints on the liquidity of our business:

Previous wording

Our leverage ratio is defined as outstanding debt divided by Consolidated EBITDA (as defined in the Second Amended and Restated Credit Agreement) for the most recent four fiscal quarters. Our interest coverage ratio is defined as the sum of Consolidated EBITDA and consolidated rental expense for the most recent four fiscal quarters divided by the sum of consolidated interest expense and consolidated rental expense for the most recent four fiscal quarters. We were in compliance with all financial covenants as of September 28, 2025.

Current wording

Our leverage ratio is defined as outstanding debt divided by Consolidated EBITDA (as defined in the Credit Agreement) for the most recent four fiscal quarters. Our interest coverage ratio is defined as the sum of Consolidated EBITDA and consolidated rental expense for the most recent four fiscal quarters divided by the sum of consolidated interest expense and consolidated rental expense for the most recent four fiscal quarters. We were in compliance with all financial covenants as of March 29, 2026.

Previous wording

In addition, the Indenture governing the Notes contains customary covenants that, among other things and subject to certain exceptions, limit our ability and the ability of certain of our subsidiaries to: incur additional indebtedness and guarantee indebtedness; pay dividends or make other distributions or repurchase or redeem our capital stock; prepay, redeem or repurchase certain debt; issue certain preferred stock or similar equity securities; make loans and investments; sell assets;

Current wording

In addition, the Indenture governing the Notes contains customary covenants that, among other things and subject to certain exceptions, limit our ability and the ability of certain of our subsidiaries to: incur additional indebtedness and guarantee indebtedness; pay dividends or make other distributions or repurchase or redeem our capital stock; prepay, redeem or repurchase certain debt; issue certain preferred stock or similar equity securities; make loans and investments; sell assets; incur liens; enter into transactions with affiliates; enter into agreements restricting our subsidiaries’ ability to pay dividends; and consolidate, merge or sell all or substantially all of our assets.

Previous wording

The PJMF Revolving Facility consists of a$30.0 million revolving line of credit pursuant to a Revolving Loan Agreement, dated September 30, 2015 and most recently amended on September 30, 2025. We did not have any borrowings under the PJMF Revolving Facilityas 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.

Current wording

PJMF hasa$30.0 million revolving line of credit (the “PJMF Revolving Facility”) pursuant to a Revolving Loan Agreement, dated September 30, 2015 and most recently amended on September 30, 2025. As of March 29, 2026, the principal amount of debt outstanding under the PJMF Revolving Facility was approximately $0.3 million. The PJMF Revolving Facility is secured by substantially all assets of PJMF. The PJMF Revolving Facility matures on September 30, 2026, but is subject to annual renewals. The borrowings under the PJMF Revolving Facility accrue interest at a variable rate of a one month SOFR plus 1.975%. The PJMF operating results and the related debt outstanding do not impact the financial covenants under the Credit Agreement.

Previous wording

As part of our long-term growth and capital allocation strategy, we are committed to investing in share repurchases to provide ongoing value and enhanced returns to our shareholders. 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 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.

Current wording

Share repurchases are part of our long-term growth and capital allocation strategy. On October 28, 2021, our Board of Directors approved a share repurchase program with an indefinite duration for up to $425.0 million of the Company’s common stock. There was no share repurchase activity during the three months ended March 29, 2026 or March 30, 2025. Approximately $90.2 million remained available under the Company’s share repurchase program as of March 29, 2026.

Previous wording

The Company paid aggregate cash dividends to common stockholders of $45.8 million ($1.38 per share) and $45.4 million ($1.38 per share) for the nine months ended September 28, 2025 and September 29, 2024, respectively. 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.

Current wording

The Company paid aggregate cash dividends to common stockholders of $15.3 million ($0.46 per share) and $15.2 million ($0.46 per share) for the three months ended March 29, 2026 and March 30, 2025, respectively. On May 5, 2026, our Board of Directors declared a second quarter dividend of $0.46 per common share (approximately $15.6 million in the aggregate), which will be paid on May 29, 2026 to stockholders of record as of the close of business on May 18, 2026. The declaration and payment of any future dividends will be at the discretion of our Board of Directors.

Previous wording

The Company’s free cash flow was as follows for the nine month periods of 2025 and 2024 (in thousands):

Current wording

The Company’s free cash flow was as follows for the three month periods of 2026 and 2025 (in thousands):

Previous wording

There have been no material changes in our cash requirements other than in the ordinary course of business since the end of 2024. Refer to “Contractual Obligations” presented within “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 for additional information regarding our cash requirements.

Current wording

Other than the contractual commitment discussed above, there have been no material changes in our cash requirements other than those incurred in the ordinary course of business since the end of 2025. Refer to “Contractual Obligations” presented within “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025 for additional information regarding our cash requirements.

Previous wording

In recent years, we have experienced price increases in food items and other commodities, labor and benefits, and fuel and other energy costs. Inflationary pressures affect our profitability both directly, in our Company-owned restaurants and delivery mechanisms and through gross margins experienced by sales of food and supply items via our QC Centers, as well as indirectly, through higher food ingredient and paper and supply costs, rising fees from delivery aggregators driven by higher wage demands and increases in the cost of gasoline that, once reflected in upward price adjustments on their fees, can exert downward pressure on unit sales, reducing royalty fees we realize from our Domestic and International franchisees. Compensating menu price increases are subject to competitive pressure in the markets in which we operate. Expense control measures are also deployed to offset higher costs when possible. Food costs, in particular the cost of cheese, are managed to an extent by pricing agreements with suppliers and forward purchase contracts we enter into, as discussed in “Item 3. Quantitative and Qualitative Disclosures About Market Risk.”

Current wording

Inflationary pressures affect our profitability both directly, in our Company-owned restaurants and delivery mechanisms and through gross margins experienced by sales of food and supply items via our QC Centers, as well as indirectly, through higher food ingredient and paper and supply costs, rising fees from delivery aggregators driven by higher wage demands and increases in delivery costs that, once reflected in upward price adjustments on their fees, can exert downward pressure on unit sales, reducing royalty fees we realize from our Domestic and International franchisees. Compensating menu price increases are subject to competitive pressure in the markets in which we operate. Expense control measures are also deployed to offset higher costs when possible. Food costs, in particular the cost of cheese, are managed to an extent by pricing agreements with suppliers and forward purchase contracts we enter into, as discussed in “Item 3. Quantitative and Qualitative Disclosures About Market Risk.”