FOOL CONFERENCE CALL SYNOPSIS*
By Debora Tidwell (MF Debit)

Papa John's International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PZZA)") else Response.Write("(NASDAQ: PZZA)") end if %>
P.O. Box 99900
Louisville, KY 40269-9990
(502) 266-5200

UNION CITY, Ca., October 30, 1996/FOOLWIRE/ --- Papa John's International announced record revenues of $92.7 million and net income of $4.9 million for the third quarter 1996 this morning. These results represent increases of 49% and 78% respectively over revenues of $62.4 million and net income of $2.8 million for the same period in 1995. Earnings per share exceeded the Street's consensus estimates by a penny, coming in at $0.26 per share, compared to $0.16 per share for Q3 1995.

EXPANSION/NEW STORE OPENINGS. They set a new unit opening record during the quarter at 82 units with the company opening 20, one ahead of plan and the franchisees opening 62, three ahead of plan. One company and one franchised unit were closed. Unit count at the end of the quarter was 267 company and 813 franchised for a total unit count of 1080 in 28 states and the District of Columbia. Thusfar in the fourth quarter they have opened two of their 18 planned corporate openings and 9 of their 58 planned franchise openings. They now have signed leases for all fourth quarter planned openings and are currently working on 1997 real estate. In addition, the company acquired 18 restaurants in the Dallas market on the first day of the fourth quarter.

COMP STORE DETAIL. Strong system-wide sales continued during the quarter with corporate comps at 11.5% and franchise comps at 4.7%. The third quarter corporate comp base consisted of 168 restaurants or 63% of the total and the franchise comp base consists of 555 restaurants or 68% of the total. Average weekly sales for the corporate comp base restaurants were $13,350. Restaurants not included in the comp base average $11,520 for an overall average of $12,725. Average weekly sales for the franchise comp base restaurants were $11,875. Restaurants not included in the comp base averaged $10,080 for an overall average of $11,370. Restaurant cost of sales were 28.8% and operating expenses were 55.3% compared to 28.2% and 55.6% during the third quarter last year. Restaurants included in their comp base averaged cost of sales of 28.6% and operating expenses of 52.8% compared to 28% and 55.3% during the third quarter 1995. As expected, restaurants not included in the comp base averaged higher cost of sales of 29.2% and operating expenses of 60.8% versus 28.7% and 63.5% last year.

CAPITAL EQUIPMENT AND COMMISSARY EXPANSION. Commissary and equipment operating margins improved offset by higher G&A and depreciation related to the Dallas and Denver facilities opened in Q2 this year. They currently have 4 commissaries they are working on. They have two that will open in the first quarter, one in Rotterdam NY and one in Phoenix AZ. At the one in Phoenix AZ they will be using a 3rd party baker to make their dough for them, so it will be a distribution facility. The facility in Rotterdam is a full-service commissary. In the second or third quarter, they will be opening another commissary in Des Moines IA and they are currently working on the design for that site. And then late next year they will be relocating the Louisville commissary with an objective to improve the facility and the operational efficiency and also add space for a second research and development line because as they continue to move forward they understand the need to get better at what they do, so they are adding an R&D line.

CHEESE PRICES. After tax profit remained at approximately 3%. Cheese prices averaged $1.61 per pound during the quarter compared to $1.29 per pound last year. The spot market dropped $0.215 two weeks ago and an additional $0.0825 last week and is currently at $1.3975 per pound. Cheese has been very unpredictable and if it holds this quarter where it is right now it will be about 6% less than this time last year. Cheese typically goes through a low period in December just as it goes through a high period in September as the school lunch program in September absorbs milk and when school lets out for the holidays, there is more milk on the market. The timing of certain expenses resulted in higher than expected G&A in the second quarter and, as they expected, lower G&A in the third quarter.

BALANCE SHEET. They ended the quarter with a strong balance sheet including $87 million in cash and $2.2 million in long-term debt. At their board of directors meeting yesterday, a 3-for-2 stock split was approved to be effective November 8th.

COMPETITIVE ENVIRONMENT. The company increased prices by less than 1% on their menu, actually 0.7%, in October (not during the third quarter). In terms of markets where they operate, there is not much growth from the 3 major pizza brands. The majors are having some difficulty, beginning with Pizza Hut. Little Caesers continues to have negative comps as well as closing stores. And, it is their understanding that Dominos is having a decent 3-4 months. Where they see some advances is on a regional basis in selected markets, but it is an isolated situation. Best they can tell from competitive information and purchase of industry data, they in the pizza segment are far outreaching the rest.

PRICING. In terms of pricing and promotion dealing, Little Caesers has just gone to "pizza by the foot" with a price point of $10.99 which is odd to be out there with that high of a price point currently. Dominos is in the midst of throwing out another new crust, their garlic crust which will be replacing the Roma herb crust, and they've rolled that out at $9.99 for a large one-topping which Papa John's feels very good about, for them to be at that high of a price point. Pizza Hut is re-rolling their stuffed crust at a lower price point of $8.99 through most of the month of November. Papa John's likes all of those price points because they are all higher. What they have tried to do is stay at $7.99 and $8.99 price points so that they can be aggressive during the fourth quarter.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.