NPC International Inc. saw revenue inch up for 2011, but its earnings took a sharp dive, dropping more than 78 percent.
NPC, the largest Pizza Hut franchisee, said the culprits were $26.6 million in transaction expenses, an increase in ingredient costs, and higher general and administrative expenses.
Transaction expenses are associated with NPC’s Dec. 28 sale to a company formed by Olympus Partners, including stock and compensation expense, broker fees and legal expenses. The general and administrative expenses largely went toward unforeseen litigation costs and higher costs to train employees.
The company’s direct labor costs fell by 2.3 percent, or $6.5 million.