frsh jan 2016 investor presentation

8/20/2019 FRSH Jan 2016 Investor Presentation

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INVESTOR

PRESENTATIONJanuary, 2016


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Forward-Looking StatementsThis presentation contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions

included in this presentation are forward-looking statements. Forward-looking statements give the Company’s current expectations and projections relating to its financial condition, results of operations,

plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include

words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any

discussion of the timing or nature of future operating or financial performance or other events.

The forward-looking statements contained in this presentation are based on assumptions that the Company has made in light of its industry experience and perceptions of historical trends, current

conditions, expected future developments and other factors it believes are appropriate under the circumstances. As you read and consider this presentation, you should understand that these

statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions. Although the Company believes that these forward-

looking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual operating and financial performance and cause its performance to differ

materially from the performance anticipated in the forward-looking statements. The Company believes these factors include, but are not limited to, those described under the sections “Risk Factors”

and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its Annual Report on Form 10-K and its Quarterly Report on Form 10-Q for the quarter ended September

28, 2015, both of which are incorporated by reference in the Company’s preliminary prospectus supplement. Should one or more of these risks or uncertainties materialize, or should any of theseassumptions prove incorrect, the Company’s actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements.

Any forward-looking statement made by the Company in this presentation speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual operating and

financial performance to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-

looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Non-GAAP Financial Measures

This presentation contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes

amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flow

of the company. The Company has provided a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to net income on the company’s corporate web-site at investors.papamurphys.com.

Adjusted EBITDA is presented because management believes that such financial measure, when viewed with the Company’s results of operations in accordance with GAAP and the reconciliation of

Adjusted EBITDA to net income, provides additional information to investors about certain material non-cash items and about unusual items that the Company does not expect to continue at the same

level in the future. Adjusted EBITDA is used by investors as a supplemental measure to evaluate the overall operating performance of companies in the Company’s industry, you should not consider it in

isolation, or as a substitute for analysis of results as reported under GAAP. Our calculation of Adjusted EBITDA may not be comparable to that reported by other companies. For additional information

about our non-GAAP financial measures, see our filings with the Securities and Exchange Commission.

JOBS Act

The Company is an “emerging growth company” within the meaning of the Jumpstart Our Business Startups Act. As a result, the Company is subject to reduced public company reporting requirements.

Legal Stuff

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Award-Winning Fresh High Quality Pizza at a Good Value

Foundational Investments in Operations and Technology

National Brand with Significant Room to Grow

Attractive Franchise Model; Store-Level Economics

System-Leading Company Store Division

Experienced Restaurant/Franchise Industry Leadership Team

Attractive Long-Range Growth Model

InvestmentThesis

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=hDlscuXi4D_slM&tbnid=4QvyEuQfZ9qR3M:&ved=0CAUQjRw&url=http://pro.baldorfood.com/Artichoke-Large-Loose-3622-prod.htm&ei=xbYDU6rVH5S-sQSSuIHIBA&psig=AFQjCNHeUvQAJUgF1flwjWWQX3jlrsOtDQ&ust=1392838706814128http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=hDlscuXi4D_slM&tbnid=4QvyEuQfZ9qR3M:&ved=0CAUQjRw&url=http://pro.baldorfood.com/Artichoke-Large-Loose-3622-prod.htm&ei=xbYDU6rVH5S-sQSSuIHIBA&psig=AFQjCNHeUvQAJUgF1flwjWWQX3jlrsOtDQ&ust=1392838706814128http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=hDlscuXi4D_slM&tbnid=4QvyEuQfZ9qR3M:&ved=0CAUQjRw&url=http://pro.baldorfood.com/Artichoke-Large-Loose-3622-prod.htm&ei=xbYDU6rVH5S-sQSSuIHIBA&psig=AFQjCNHeUvQAJUgF1flwjWWQX3jlrsOtDQ&ust=1392838706814128http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=hDlscuXi4D_slM&tbnid=4QvyEuQfZ9qR3M:&ved=0CAUQjRw&url=http://pro.baldorfood.com/Artichoke-Large-Loose-3622-prod.htm&ei=xbYDU6rVH5S-sQSSuIHIBA&psig=AFQjCNHeUvQAJUgF1flwjWWQX3jlrsOtDQ&ust=1392838706814128


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Gaining Dollar Share of $

40B+ Pizza

Category

5

Q3 ‘15

-6pts

56%

+6pts

44%Big 5

+25%growthdollarshare

2.0% 2.5%

2010

Big 5

Mom & Pop/ Regional

62% 38%

Mom & Pop/ Regional

Big 5


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3.7%

5.6%

6.6% 6.7%

5.1%

3.4%

1.2%1.6%

0.6%

3.6%3.0%

4.0%

3.3%

1.5%

4.6%

8.4%

5.6%

4.5%

1.4%

Strong Same Store Sales & Unit Growth

19 Straight Quarters of Comparable Store Sales Growth

201320122011 2014

18.1% increase in total store count

3.9%

avg.

2015

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1ST

CUSTOMERS PARTNERS COMMUNITYTEAM

SERVE WITH PURPOSE

OPERATIONALEXCELLENCE

FOCUSEDDEVELOPMENT

CUSTOMERS1ST CHOICECUSTOMER’S1ST CHOICE

CHOICEaspiration


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A Fresh Approach to Pizza

fresh, handmade dough

fresh cut vegetables

real meat, no fillers

unique high qualityingredients

fresh grated mozzarella

fresh-baked...hot out of your oven!

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http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=B6WTM4KDCnQdYM&tbnid=VoxOhP4NRWKiZM:&ved=0CAUQjRw&url=http://www.papamurphys.com/m/&ei=61BYUuKCDrG34APF8IDIBw&bvm=bv.53899372,d.dmg&psig=AFQjCNEAGMgflpFuU25aNWSYuYzTjpXyCA&ust=1381605993218486http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=B6WTM4KDCnQdYM&tbnid=VoxOhP4NRWKiZM:&ved=0CAUQjRw&url=http://www.papamurphys.com/m/&ei=61BYUuKCDrG34APF8IDIBw&bvm=bv.53899372,d.dmg&psig=AFQjCNEAGMgflpFuU25aNWSYuYzTjpXyCA&ust=1381605993218486


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CREST®

Survey

1

#

Multi Award-Winning!

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1#

Latest #1 from Consumer Picks

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Source: NRN Consumer PicsApril 2015


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#1 in Brand Loyalty

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July 8, 2014

#2

#1

#1#1


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Pizza/QSR/Fast CasualAverage Per Person Spend

$7.91$8.27

$7.58

$4.01

$6.09$6.46

$5.54$5.11

$7.84

$7.24

Strong Customer Value

Source: NPD / CREST Decision Key Report: Restaurant Scorecard - MM.Note: Represents per person spend for the January 2015 to June 2015 time period.(1) Average party size for Pizza Hut is 2.2. (4) Average party size for Little Caesars is 2.6.(2) Average party size for Papa John’s is 2.4. (5) Average party size for Papa Murphy’s is 3.3.(3) Average party size for Domino’s is 2.3.

(1)(2)

(3)

(4)

(5)

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1ST


CUSTOMERS1ST CHOICE

SERVE WITH PURPOSE

PARTNERING FORPROFITABILITY

FOCUSEDDEVELOPMENT

CUSTOMER’S1ST CHOICE


CHOICEaspiration


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customers• min. 30 surveys per month & 85 + KDS

Operational Excellence

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QSC• AAA

sales & transactions• Positive Transactions & plus Comp%

profit• COGS Var. 0-1.0% of Net sales

speed of service• avg. for year 3 min. or less

5 Star Program:


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2013 Q3 2015 Stars

2.3 3.9 5

9.7 15.1 426.2 27.7 3

31.9 30.0 2

23.5 17.1 1

6.4 6.2 0

1.2 2.3 Avg.

% Stores

Operations Performance Drives Sales

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Note: Based on 1305 eligible stores for 5 Star YTD through Q2 2015Source: PMI

0.3%

1.8%

3.2%

6.0%

8.6%

9.8%

Comp Sales/Star Level


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Growth

viaTechnology


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1. drives sales and profitability

2. unlocks online/mobile ordering

3. pathway to precision marketing

POS is Foundational for Digital Strategy

- sales lift and gross margin improvement

- increased guest-check for orders placed on-line

- targeted digital promotions based on uniquebehaviors

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POS/On-Line Ordering Reaching Critical Mass

Q2 2016 *20142013

77%74%

57%

56%13%

2%

% Stores

with POS

% Stores

with On-Line

Ordering

18

100%

Q3 2015

May 2014 mandated installation within 12 months


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Accelerating Digital with Deloitte Digital

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http://www.deloittedigital.com/


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1ST


CUSTOMERS1ST CHOICE

SERVE WITH PURPOSE


CUSTOMER’S1ST CHOICE

FOCUSEDDEVELOPMENT

CHOICEaspiration


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Fast Growing National Brand

21

3,000

NSOs

~2,400

1,500

Source: Indicia and PMI.Note: Based on U.S. Census Bureau data; 2012 Population Estimate.

# of Stores

Existing Store Density(stores per million people)

New Store Opportunity

4,500

4,500 Store Opportunity in U.S.

Existing TotalU.S.

Higher Density

Lower Density

ExistingMarkets

FutureMarkets

~600


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$9.7 $10.0

$10.9 $11.1$11.7

Performance Improves as Density Increases

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Store Average Weekly Sales (“AWS”) Performance Improvements (select markets)

$7.2 $8.1

$8.7 $8.9$9.1

$-

$4

$8

$12

Phoenix

21 26 30

AWS

(000)

39

Denver

41 42 46 51 54

2010 2011 2012 2013 2014

Stores

2010 2011 2012 2013 2014

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new

CREATEstores


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Attractive Operating Model for Franchisees

Efficient Franchise Operating Model

• No ovens

• No delivery

• No dining areas

• One day-part/limited operating hours

• Lower labor costs

• Customer controls the experience

• Accepts EBT (Food Stamps)

• Access to financing sources including SBA

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Company Stores (CSD): Leading by Example

#1 Lead franchisees from the front

#2

#3

Provide financial scale to the business

Develop Operations team

#4 Accelerate market density

#5 Develop future franchisee pipeline

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CSD Leading from the Front

CSD presence

new in 2014/15

CSD presence

pre-2014

100% Franchised

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Growth Strategies

Leverage Infrastructure to Improve Profitability

Grow Store Base to Scale Existing Markets

Increase System-wide Comparable Store Sales

Improve Operational Excellence

fresh made by us fresh baked by you

Execute Digital Strategy

High Quality Award-Winning Pizza

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Post-IPO Performance & Capital Structure

2014 2015

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US Comp Sales (%)

Pro Form EPS (cents)

Adjusted EBITDA (millions) Pro Forma Net Income (millions)

Q1 Q2 Q3 Q4

Q1 Q2 Q3 Q4

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

3.3

5.6

1.5

4.54.6

8.47.5

8.0

5.76.4

5.6

8.8

2.0

2.6

1.3

2.8

1.6

1.1

1215

97

8

17Q2 2014 IPO proceeds reduced bank debt to $112 million

- leverage reduced to ~ 4.3X Adjusted EBITDA

Q3 2014 Refinancing lowered current rate by ~200bps- revolver capacity doubled to $20 million

Current bank term loan balance of $109.9 million- leverage at ~ 3.3X Adjusted EBITDA

Capital Structure

1.5

6.1

1.1

7


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(1) Includes net sales by all system-wide stores.

Strong Performance Continues in Q3, 2015

System-wide Sales(1)Total Stores

$194.0 $203.11,437

1,500

($ millions)

US SystemComparableStore SalesGrowth

+4.6% +1.4%

Total Revenues

$22.2

$28.1

Adjusted EBITDA

$5.6$6.1

$10,487 $10,568Domestic

AWS

($ millions)($ millions)

2014 2015

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Attractive Long-Term Growth Model

Attractive Business Model

EPS Growth

Comparable Store Sales

Adjusted EBITDA Growth

+20%

+2% to +4%

Ramping to +10%

Annual Growth Targets

Estimated Annual Tax Rate 38.5%

Unit Growth Opportunity +6% to +8% Net

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Award-Winning Fresh High Quality Pizza at a Good Value

Foundational Investments in Operations and TechnologyNational Brand with Significant Room to Grow

Attractive Franchise Model; Store-Level Economics

System-Leading Company Store Division

Experienced Restaurant/Franchise Industry Leadership Team

Attractive Long-Range Growth Model

InvestmentThesis
http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=hDlscuXi4D_slM&tbnid=4QvyEuQfZ9qR3M:&ved=0CAUQjRw&url=http://pro.baldorfood.com/Artichoke-Large-Loose-3622-prod.htm&ei=xbYDU6rVH5S-sQSSuIHIBA&psig=AFQjCNHeUvQAJUgF1flwjWWQX3jlrsOtDQ&ust=1392838706814128http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=hDlscuXi4D_slM&tbnid=4QvyEuQfZ9qR3M:&ved=0CAUQjRw&url=http://pro.baldorfood.com/Artichoke-Large-Loose-3622-prod.htm&ei=xbYDU6rVH5S-sQSSuIHIBA&psig=AFQjCNHeUvQAJUgF1flwjWWQX3jlrsOtDQ&ust=1392838706814128http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=hDlscuXi4D_slM&tbnid=4QvyEuQfZ9qR3M:&ved=0CAUQjRw&url=http://pro.baldorfood.com/Artichoke-Large-Loose-3622-prod.htm&ei=xbYDU6rVH5S-sQSSuIHIBA&psig=AFQjCNHeUvQAJUgF1flwjWWQX3jlrsOtDQ&ust=1392838706814128http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=hDlscuXi4D_slM&tbnid=4QvyEuQfZ9qR3M:&ved=0CAUQjRw&url=http://pro.baldorfood.com/Artichoke-Large-Loose-3622-prod.htm&ei=xbYDU6rVH5S-sQSSuIHIBA&psig=AFQjCNHeUvQAJUgF1flwjWWQX3jlrsOtDQ&ust=1392838706814128

frsh jan 2016 investor presentation

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