Thank you for standing by and welcome to Papa John's Fourth Quarter 2021 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference may be recorded. I would now like to hand the call over to Chris Collins, VP of Treasury and Tax.

Thank you, operator. Good morning. Joining me on the call today are President and CEO, Rob Lynch, and CFO, Ann Gugino. Rob and Ann will comment on our business and provide a financial update. After the prepared remarks, both will be available for Q&A. Our discussion today will contain forward-looking statements involving risks that could cause actual results to differ materially from these statements. Forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our SEC filings. Please refer to our earnings release in the Investor Relations section of our website for a reconciliation of non-GAAP financial measures discussed on this call. Finally, we ask members of the media to be in a listen-only mode. Now, I'd like to turn the call over to Rob Lynch for his comments. Rob?

Thank you, Chris and welcome everyone to our 2021 year-end earnings call. I'm so excited to be here this morning and share our results for the fourth quarter and for 2021. The Papa John's team and franchisees delivered another fantastic year. We sustained our double-digit growth in share gains for the second consecutive year. Papa John's system wide sales reached $4.9 billion, up 15.4% in constant currency. Comparable sales increased by 11.8% in North America and 13% internationally, on top of 2020's double digit gains. On a two-year basis comps rose a remarkable 29.4% in North America and 25.6% internationally. AUVs in North America grew 12% year-over-year and now exceed $1.1 million. I'm proud to say that our restaurants are highly profitable, and that our franchisees are well positioned to invest in growth. Our favorable unit economics drove a resurgence in new store openings last year, and led to multiple historic development deals for the brand that will significantly expand our presence across the U.S., Europe, Latin America and China. We also achieved impressive bottom line results last year. Operating income rose over 85% versus 2020 and adjusted EPS reached an all time high of $3.51 per diluted share, a 150% increase year-over-year. These results demonstrate Papa John's ability to sustainably grow and deliver great value for our customers, franchisees and shareholders year after year, even during the most uncertain and difficult business environment that any of us have ever experienced. Papa John's is well positioned for another great year in 2022. This morning, I'd like to dive into the foundations underlying Papa John's sustained comp growth and development momentum. They are a differentiated strategy, the innovation and hard work of our team members and the commitment of our franchisees. I also want to address the current macro environment, both…

Thanks, Rob and good morning everyone. Papa John's begins 2022 with great momentum after breaking company records for system-wide sales, comparable sales growth, AUVs, adjusted operating income and adjusted EPS in 2021. We also ended the year with our financial foundations and priority stronger than ever, which is enabling us to invest in long-term growth and shareholder return as I'll discuss this morning. Beginning with our P&L, for the quarter system-wide sales were up 13.1% excluding FX. Accelerating net new restaurant growth contributed approximately 300 basis points to system-wide sales growth in addition to strong underlying comp sales. Consolidated revenue rose 12.6% in Q4, and 14.1% for the year, driven by positive system-wide performance. Q4 adjusted operating margins increased almost 250 basis points and adjusted operating income rose 63.1% to $41.9 million, excluding $3.7 million and $6 million in nonrecurring corporate reorganization costs in 2021 and 2020 respectively. Strong top line results and related operating leverage drove this improvement, which is a tremendous outcome given the inflation, labor and supply chain challenges we faced in Q4. Adjusted operating income rose across all reporting segments in the quarter. Our corporate restaurants successfully delivered higher margins with solid operating leverage. This more than offset between 200 and 300 basis points of commodities and short staffing headwinds to the segments' margin. Continuing to earnings. For the quarter on a GAAP basis, earnings per diluted share were $0.67 versus $0.28 in the prior year period. Q4 results include $0.08 per diluted share related to our strategic corporate reorganization versus $0.12 in the prior year. Excluding these special items, Q4 adjusted earnings per diluted share rose to $0.75 up more than 85% from $0.40 a year ago. For fiscal 2021 GAAP earnings per diluted share were $0.12 for the fiscal year versus $1.28 in the…

Thanks, Ann. I couldn't agree more. Papa John's continues to move forward on a sustainable long-term growth path with tremendous promise and potential, thanks to the hard work of our team members and franchisees. Last year, innovation culture proved that it can drive sustained comparable sales growth through new products, marketing and technology. Now with our development momentum and opportunity stronger than ever, we're delivering strong system-wide sales, earnings growth and significant cash flow. As we enter 2022, our industry has felt some additional headwinds. But we're confident that these are temporary, and that Papa John's differentiated strategy provides competitive advantage to manage them. Our outlook for 2022 and years beyond is very strong. As always, I'd like to thank our shareholders and everyone on this call for their interest in our company and for their continued support. With that, I'll turn the call over to the operator for Q&A.

Thank you. Our first question comes from the line of Brian Bittner of Oppenheimer. Your line is open.

Thanks, good morning Rob and Ann. As it relates to the operating margins, you obviously told us that the first quarter is going to be down year-over-year, but and you also said, you continue to plan to protect margins for full year 2022. So, does that specifically mean that you still believe you can hold margins flat for the full year of 2022?

Yes, it absolutely does. You know, we're really pleased that we've been able to offset the cost pressures in 2021 that we saw in the back half of the year, given our strong comp sales and just the benefit of operating leverage. And while we expect the current inflationary environment around commodities and staffing to continue into fiscal 2022, and to be a headwind on margins for the first half of the year, until we lap that uptick in costs, our goal for the full year is to protect margins, we absolutely believe we can hold them flat. We have a number of actions we can take. As I mentioned, the most important is to drive sales through our differentiated strategy and product innovation. As I mentioned in my comments, you know, we're taking targeted pricing actions. So we are very bullish about our margin outlook for 2022 on top of a record 2021.

Great, and Rob, is there a way to think about how much the labor staffing challenge is during the Omicron period maybe held back your sales trends? Particularly in the first quarter, you said demand remained extremely high, but labor was obviously holding your business back and are you starting to see this headwind dissipate more recently?

Absolutely. Just to be clear, we're off to a great start in 2022. We reiterated our color on both Q1 and the year, so there's a ton of confidence here. And the staffing issues were temporary, and driven by Omicron. We're seeing our cases almost go away at this point and we're seeing staffing coming back quickly. So we have nothing but confidence and in this business right now and for the balance of 2022. You know, we're lapping the biggest year in the company's history and we're telling everyone that we're going to lap that positively and maintain margin. I don't think there's a lot to be upset about right now at Papa John's.

Agreed, thank you.

Thank you. Our next question comes from Chris O'Cull of Stifel. Your line is open.

Yes, thanks. Rob, you talked about staffing issues in the restaurant supply chain, but did the system experience any delays in construction because of supply chain or labor issues? And do you expect to see any issues in the early part of the year because of this?

Yes, I'm sorry, Chris. You know, the issues with opening restaurants was really a function of some equipment challenges that we saw on the back half of 2021. We have mitigated that issue and it was really primarily a U.S. issue, and impacted our company restaurants disproportionately. As you know, we kind of just started building company restaurants again after a long time of not building company restaurants. It did not impact our international development, which was, which is the disproportionate percentage of our new unit growth and we don't anticipate any challenges achieving the targets that we just put forward on the call here, in 2022. This will be the biggest year of development in Papa John's history.

And just one other question here. I'm curious if there was a step change in the international comp performance this quarter. I'm just curious what caused that change and do you see it as a temporary issue?

The two-year comp, the two-year stacks are about the same as the domestic business. We just had a much bigger Q4 last year. On the international side, we're up over 20%, so both businesses performed in the 23%, 24% to your stack range. So it was really just a function of a bigger comp from year ago.

Fair enough. Thanks, guys.

Thanks, Chris.

Thank you. Our next question comes from Eric Gonzalez of KeyBanc Capital Markets. Please go ahead.

Hey, hey, thanks for the question and good morning. My question is really about the supply chain and just in terms of the innovation pace here, you've had an exceptionally strong track record of menu innovation that I think typically follows a two-month cycle. I was wondering if you could, if you expect that cadence to continue or whether you're seeing any delays from ingredient availability or anything else that might break that pattern?

We don't have any issues with ingredient availability at this point. I think I mentioned chicken wings in our last call as one of our challenges, we've even mitigated that challenge at this point. So, supply chain is actually up and running, fully functional, operating at a high level, supporting our business. As you know, our innovation strategy is all about creating exciting products that can allow customers to self select into and trade up and drive our ticket growth without causing significant restaurant operations or supply chain operations challenges. So we've maintained that strategy. We don't foresee any challenges meeting the plan that we have in place. And you asked about innovation, absolutely. I mean, we just launched New York Style Pizza six weeks ago, and it's doing better than we anticipated. It's more incremental, and it's going to be a platform for us on an ongoing basis. So we're really excited about the impact that all of our big platform innovation and ILTS have had on our comp sales trajectory.

Thanks.

Thank you. Our next question comes from Alex Slagle of Jefferies. Your question, please.

Thanks, good morning. A question first on the development outlook, the portion of that 260 to 300 that will be domestic, and then bigger picture when you think about the annual unit growth opportunity in North America, which is still a very big profit center for the company, but a relatively small portion of the annual unit growth. Is there a reason you can't grow from that 50 annual net units towards say 150 level that you've seen many years ago and closer to where your larger pier is? Or are there bigger hurdles or reasons why you may not, that may not make sense?

You know, two and a half years ago, when I joined this brand, I think three of our top 25 franchisees had development agreements in place. Today, we have almost every one of our top 25 franchisees with development agreements in place. So, you know, it doesn't change overnight, it takes time to find sites, it takes time to build construction resources, it takes time to get the development infrastructure going, but it's absolutely happening. And there's no reason why we can't return to developing the number of restaurants that we've seen historically, domestically. And, you know, our international business is accelerating even more rapidly on development, and our comps internationally have been really strong too. So, the top line sales of these units that are going up internationally are higher than they were last year or two years or three years ago. So the profitability derived from the royalties of those restaurants is only going to grow as those comps continue to grow. So we're bullish, both domestically and internationally. And like I said, 2022 is going to be our biggest development year in the brand's history and we see that rising ongoing year after year, as these development agreements start to really come to fruition.

That's great. Should we expect the portion of that the -- growth outlook is it like the 80% or so ratio that you talked about for 2021, is that a fair ballpark course?

I think so. I think so. I mean, as much as I'm excited about the rate of growth domestically, it's going to grow even faster internationally. So that 80/20 is kind of where we see the near future being, but it's going to skew internationally, looking out in years, three, four, and five, just because the rate is going to grow so rapidly internationally.

Certainly, thanks.

Thank you. Our next question comes from Alton Stump of Loop Capital. Please go ahead.

Well, thank you. Hey, good morning. I just want to ask Rob, you guys added nine company units in the U.S. in the fourth quarter. If I had to go back to quite a few years to that big of a company owned build in a quarter, does that signal that you guys want to stay aggressive, if you will, moving into 2022 as it pertains to company owned builds?

Yes, we -- I mean, we are not ever going to be significant company owned system. The percentage of company owned is not going to increase at this-- that there's no plan to do that. But we do you see significant opportunity for us to fill in our company markets and take advantage of the model, the fill in model that we've talked a lot about, and leverage those results in that data to help franchisees make more informed decisions domestically. The earlier question about the domestic development, that is really a function of their confidence in their ability to build into markets that previously, historically were deemed saturated and penetrated. Our new development models are suggesting that, that's not the case, and that's why we've got, all of these domestic franchisees now with development agreements because they're seeing all these new opportunities. So, we see our corporate development. Obviously, we like the returns on invested capital from those units and then of themselves. But really, the strategy is to use our company markets as the justification for franchisees going out and replicating that model and that will accelerate the growth domestically, very rapidly.

Great, makes sense. Thanks so much, Rob.

Thank you, Alton.

Thank you. Our next question comes from Peter Saleh of BTIG. Please, go ahead.

Great, thanks. Rob, I was hoping if you could give us a little bit of an update on traffic, how much of the comp in the fourth quarter was coming from traffic and maybe just a little bit of detail around, how much of that is coming from existing customers versus new customers coming to the brand?

So, we've been really happy with the fact that our growth over the last two years has been very balanced, both with traffic and check. As we've talked about in Q1, there were some challenges with staffing and there were some impacts on traffic; we're not disclosing specific traffic numbers, but still, based on all the data we have, we're still significantly outpacing the industry, in general on a traffic basis. And our innovation is driving a lot of check and that's why we guided to or gave colour and gave forecast for Q1 that we're going to be positive comps. So, we’re really happy with the balance of the business. As we've talked about earlier, our loyalty program has doubled in size in the last two years. We’ve gone from $12 million to $23 million, and so we are leveraging all of that to drive frequency amongst our current customers and our innovation, we’re finding to be a great asset for us to bring in new customers. So, we're confident that we're going to be able to continue to strike the balance between traffic and check as we move forward.

Great. And can you talk about or give us an update on Papa Call and the ability or initiative to try and move more sales, digitally?

Yes, well you know, Papa Call, our offices are in Indonesia and our offices were actually hit by a tsunami in Q4. I don't laugh because it's not a serious issue, but it is something that impacted our Papa Call service at the end of Q4 and Q1. But all of that has been mitigated. We’re back up live. Papa Call has become has become a big part of our operating model and about all of our company restaurants leverage Papa Call and I think about 30%, 40% of our franchisees are now using Papa call. And so, for everyone that isn't completely familiar with Papa Call, it is our call centre and every call that goes through there, we get the same kind of data that we get when people come in through our digital channels. So, now about 90% to 95% of all of our orders are coming in through conceptually digital channels which we're able to document and learn from and leverage to drive our sales moving forward. So, it's been a big part of our business. It's going to continue to help us continue to target our customers more effectively and drive one to one marketing capabilities.

Great. And then just lastly on my end, I don’t know if I missed it. Did you guys give a commodity basket outlook for 2022, in terms of inflation expectations?

We haven’t given any direction on that. I mean, our rate of cost increase is going to be pretty consistent with the industry, but we haven’t given any colour on specific inflation numbers.

Okay, thank you very much.

Thank you, Peter.

Thank you. Our next question comes from Andrew Strelzik of BMO. Your line is open.

Hey, good morning. Thanks for taking my question. You've been pretty vocal about some of the new customer acquisition and the benefits there for the last two years. I was just curious if you could provide some colour or metrics around spend levels or frequency as you've been able to track those new customers that have come into the brand over the last couple of years.

Yes, I mean, in terms of spend levels, our check is up significantly, and it hasn't been a function of pricing until recently, when we've taken a little bit of pricing to start to mitigate some of the impact of the inflation that we've seen. Almost all of it has been our customers, both current and new customers, self-selecting into our innovation. So, you think our average price per pie, let's just say, is around, a little over $10 and then we launched Shaq-a-Roni, we launched Stuffed Crust, we launched New York Style, all of those are $12 or $13 national promoted price points. Those are 20% and 30% increases in cost per pizza, price per pizza. So, that has been a significant driver of our check growth. In addition to that, things like Papadias and some of the Poppers and rolls that we’ve launched have been much more additive to check than necessarily people coming in to just buy those items. So those have also contributed significantly to check growth. So, we're seeing that across both our new customers as well as our loyal customers. Our loyalty members are our most valuable customers. And now that we've got 23 million of them, we're able to tap into that to make sure that we're delivering value both for the customers as well as for the company.

Okay, thank you for that. And if I could just squeeze in one other quick one. You mentioned balance sheet in your guidance around interest expense and using that to return cash to shareholders, I was just curious if there was anything more you could share around that? Is that just kind of normal course or do you have any other expectations? And that would be great, thanks.

Yes, I'll let Ann give a little colour, but in general, what I would say is we have a super clean balance sheet. In 2021 our team did an amazing job of eliminating our highest cost to capital, which were the preferred shares that Starboard owned. The bond that we just issued is a great testament to how we’re thinking about our capital management. And our leverage ratios are relatively low, relative to the balance of our peer group in the industry. So, we have a great balance sheet that we can leverage to drive shareholder value and we’re doing that in multiple ways. We increased our dividend. We have executed very strong share buyback programs and we have a lot of flexibility there. So Ann I don’t know if there’s anything there I didn’t cover.

Yes. No, I mean I think you nailed it. We see our cash flow growing over time and you talked our debt capacity and the current share repurchase authorization. So we have a lot of flexibility and optionality to deploy capital and drive strong shareholder returns. We’re going to be very strategic and efficient in how we deploy our capital. We see a lot of opportunity to invest in the business. You saw our step up in CapEx spend to support our long-term profitable growth. We're going to maintain that strong and flexible balance sheet and then after that we will return excess cash to shareholders.

Great, thank you very much.

Thank you. As a reminder so that we can get to everyone in queue with the time we have left, please limit yourself to one question. Our next question comes from the line of Lauren Silberman of Credit Suisse. Your question please?

Thank you, guys. I want to ask about company margins about 20% for 2021 which I think is the highest that we’ve seen Papa John’s do even historically. So, can you talk about how you’re thinking about company margins in ’22 and opportunities for potential expansion from here?

Yes, once again I'll tag team with Ann on this one, Lauren, but top-line strategically we’re going to continue to leverage the model that has been so successful over the last two and half years. We’re going to continue to bring products new and extensions of our current -- the platforms we launched over the last two years that allow our customers and motivate our customers to self-select into these higher price, higher margin items, and so, that really helps out our check. We’re going to continue to leverage our loyalty database to increase frequency and drive higher comps, which helps create leverage in the P&L. And, we are taking some pricing. The cost structure has continued to evolve. We didn’t have to take a lot of pricing throughout the pandemic. And we felt like it improved our value equation relative to our peer group, both within pizza and as well as food overall, both in the restaurant segment even eat at home. We felt like our value equation continued to improve throughout 2020 and 2021 and 2022, as we look to maintain our margins, and we feel like we have the ability and the right to do so. We're competing in the premium position, in QSR Pizza marketplace. We feel like we have more pricing power. And the fact that we haven't taken pricing over the last couple of years gives us even more confidence in being able to mitigate inflation both on the regular menu pricing, as well as on some of our promoted items. So that's kind of the commercial side. I'll let Ann talk a little bit more on how we're going to maintain margin across the P&L.

Yes, I think the only thing I would add, and I've said this before, is just the advantages of scale on our side in terms of the fixed cost leverage in different areas. So as we continue to grow the top line, and Rob talked a lot about that on the commercial side, we can continue to leverage our existing assets, whether that's supply chain infrastructure, our technology footprint, our marketing assets and you definitely saw the value of that scale in the margin expansion that we demonstrated, both this year and last year,

Yes. And continuing to build restaurants as our development pipeline continues to fill, and the number of units that we open every year, continues to grow. That's only going to enhance that fixed cost coverage and commensurate margin.

Great, thank you, guys. Congrats.

Thanks Lauren.

Thank you. Our next question comes from Dennis Geiger of UBS. Your line is open.

Great, thanks for the question. Rob, you've made a very what looks like a very smart decision to utilize third party aggregators, where it makes sense. So just wondering if you could speak more to the utilization of third party delivery where that mix has been trending most recently, and then going forward, how you see that opportunity, playing out from here relative to where it's been? Thank you.

Thanks for the question, Dennis. Yes, I mean, our partnerships with the third party aggregators have become more and more important to us, as we leverage that partnership to bring in new customers and incremental profitable transactions through the marketplace that they offer, but also as the staffing challenges that we've seen, not just in the last six weeks, where it's been greater than it had been previously, but really, over the two years of the pandemic. I mean, I don't think it's a secret to anyone that there has been a staffing challenge in our industry since the onset of the pandemic. And our partnerships with the aggregators have really helped us get through that, and are helpful, both, like I said, on the growth side, from bringing in the customers, but also from the labor management side. Our technology is a big part of what we do. As I mentioned earlier, with Papa Call, almost over 90% of our orders are coming through and being entered into our digital channels. I mean, we are an e-commerce company and we are investing throughout the company in technology. The aggregator partnerships are just one piece of that, a very important piece, a growing piece. We still believe that it's a symbiotic relationship. We work with those guys. We add a lot of value to them. We provide a lot of trips for them. We're one of their largest customers. So it's been a great partnership, we'll continue to foster that. And through these times of staffing challenges, it's been definitely a strategic differentiator for us.

Great, thanks, Rob.

Thank you, Dennis.

Thank you. Our next question comes from James Rutherford of Stephens Inc. Your line is open.

Hey, good morning, and thanks for taking the question. Robert, it seems like it was, one of the results of signing these large domestic franchising deals might be that some existing operators in specific markets may choose to sell their stores rather than share a territory, which could make sense. I'm just curious, do you expect a gradual consolidation of the U.S. system, and if so, what implications would that have if it plays out broadly?

I think we've, thanks, James. I think we've talked a lot about some consolidation in the system might be helpful. I mean, the strategy of the past, where you could come in and open a restaurant, a single restaurant, if you wanted to get into the Pizza business, we've moved away from that, that methodology. We are now looking for larger, capitalized, sophisticated franchisees with operating experience, and we have a lot of those in our system and they're doing an amazing job. We also are bringing in new ones, like Sun Holdings and Guillermo Perales. So, I do think that there's an opportunity here, for larger franchisees to consolidate some of the system. There's a lot of financial rationale to do. Our restaurants are more profitable today than they ever have been. So there's a lot of interest to buy restaurants. We get approached all the time, about selling our company restaurants. So there's a lot of demand for Papa John's right now, which could lead to I think, some productive consolidation throughout the system.

Thanks, Rob.

Thank you.

Thank you. Our next question comes from Brian Mullan of Deutsche Bank. Your line is open.

Hey, thank you. Congrats on the development agreement with FountainVest partners in China. Can you just talk a little bit about how that came to be? Just remind us what are the dynamics in China today? Is there still another franchisee partner in that market? Or could you potentially look for similar exit for them? Or maybe they're planning to grow as well, so just any color on that market?

Hi, Brian. So prior to the FountainVest announcement, we had about 250 restaurants in China and they're pretty much split between two franchisee organizations, one in the south, one in the north. FountainVest approached the southern franchisee organization with intention of purchasing them. They were excited about the momentum on the business. They liked the brand. They felt like they could accelerate the development efforts given their resources. And so once that happened, we obviously engaged in that, that discussion and worked with FountainVest and the prior franchisee who was still operating the restaurants there in South China to develop an agreement that was going to be in the best interests of both them as well as the brand. And so, 1350 restaurants is a big commitment for any franchisee. And so, they're obviously very bullish on what Papa John's can do in China to sign that big of an agreement. They wanted to lock up, the ability to develop a lot of different territory. But we still have the North China territories which are currently being developed and operated by a franchisee and we're currently having discussions with them on what their future looks like and what their aspirations are. So, ideally, we'll be able to kind of create an opportunity for them like we did with FountainVest.

Thanks a lot.

Thanks, Brian.

Thank you. Our next question comes from Brett Levy of MKM Partners. Your question please?

Thanks for taking the call. Just asking James's question in another direction, when you're looking at your franchisees right now, what are you seeing in terms of either the unit level profitability, just from a color perspective or even their onset, even their enterprise level profitability, what kind of growth has materialized lately? And then also, when you think about your development growth plans over the next year, two years, how should we think about that in terms of either the top 25 new investors coming in, just things of that nature? Thank you.

So, if you'll recall, three years ago, we created a we win together program for our franchisees where we're essentially giving them cash to keep them afloat. And when I came in here for the first two or three earnings calls, a lot of the questions were, are you going to have to continue on that program? Are you going to have to continue cash flowing franchisees? And, when that program came to a close, not only do we not have to continue it, the franchisees were in the best financial position they've been in, in a very long time and today the unit level economics are as good as they've ever been. And our AUVs have eclipsed 1.1 million. Our cost to build is significantly less than a traditional QSR restaurant. And so the cash on cash returns on this business are, frankly, unbelievable. That's why we've got so much demand to come into the system. So and that's why we've gone from three or four franchisees building one or two restaurants three years ago to almost all of our top 20 franchisees signing multi-unit deals today. So, there is no, it does not -- unit level economics do not keep me up at night. And in the development that we're seeing both domestically agreements that we're seeing both domestically and internationally are really the biggest testament to that.

Thank you.

Thank you. Our next question comes from Nick Setyan of Wedbush. Your question, please?

Thank you. Just given the work you guys are doing post the Russian invasion of Ukraine, I think there's some concern around the impact on Papa John's and Pizza Dough. Can you just maybe, let us know to what extent you're contracted on the Dough, for the year how much visibility you have into pricing? And if it does, if we do see a lot of inflation in those costs, do you have the ability to offset it given what the incremental headwind is as of this morning?

Yes, it's an interesting question. I was very surprised to see the reaction in the stock this morning given the year that we just closed and the momentum that we have in Q1. And so I guess, my only rationale is that there is some concern that this, these actions today will have an impact on our company. And what I can tell you is that we don't see it that way. One of the great things about being in the food business is that through good times and bad, usually the business is pretty stable. We are globally diverse company. We operate in 50 countries. We have restaurants in Russia. We don't have any restaurants in the Ukraine. We source our ingredients really pretty close to where we end up using the ingredients. So, if there's disruption in the Ukraine, we don't have any restaurants there. Our restaurants in Russia it will depend on how much disruption there is there and the impact of that business. We have about 185 restaurants in Russia. But our domestic business and our business globally in the UK, Latin America, China, Korea, we don't see any operational disruption on the horizon. So I would not expect our company or our stock to really be impacted by -- outside of the macro impact of the market in general. This really won't have a big impact on our operating situation or commensurately in financials.

Thank you.

Thank you. Our next question comes from Chris O'Cull of Stifel. Your line is open.

Thanks. I just had one follow up. In your prior comments, you indicated the company believes it can maintain its operating margin in 2022, which I understand is a very important feat here in this world with all the inflation, but do you believe the company can grow earnings per share kind of above that mid single digit range in 2022 given you expect interest expense to also be up year-over-year?

I think that getting to the high single digits is possible in the EPS growth for the year when you look at combining the interest expense with the share buyback program.

Okay, that's helpful. Thank you.

Thank you. At this time, I'd like to turn the call back over to Rob Lynch for closing remarks. Sir?

Well, thanks everyone for joining us and for your questions this morning. We are really excited about 2022 and the future of Papa John's. We spent two and a half years building a foundation that we believe we can build on, not just maintain but continue to grow. And it's really a testament to the partnership that we have between our franchisees, our operators, and everyone behind the scenes and the supply chain globally that takes such good care of our business. 2021 was truly a record year on every front. 2022 is off to a fantastic start. We're very confident in our ability to meet expectations, both in the short term and the long term and we look forward to reporting back to you on our continued momentum and outlook. So thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.