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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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Form 10-Q



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(Mark one)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 26, 2007

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission
file number 000-13007



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NPC INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|KANSAS                                                         |  | 48-0817298                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. employer identification number)

7300 W. 129thStreet

Overland Park, KS 66213

(Address of principal executive offices)

Telephone: (913) 327-5555

(Registrants telephone number, including area code)



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Securities registered pursuant to
Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None



---

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated filer ̈Accelerated filer ̈Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ̈No  x

There is no market for the Registrants equity. As of August 10, 2007, there were 1,000 units of common stock outstanding.



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##### Table of Contents

INDEX



|              |  |                                                                                       |  |     
|------------- |  | ------------------------------------------------------------------------------------- |  | ----
|              |  |                                                                                       |  | Page
|Part I        |  | FINANCIAL INFORMATION                                                                 |  |     
|              |  |                                                                                      
|Item 1.       |  | Condensed Consolidated Financial Statements                                           |  | 3   
|Item 2.       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 12  
|Item 3.       |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 20  
|Item 4.       |  | Controls and Procedures                                                               |  | 21  
|Item 4T.      |  | Controls and Procedures                                                               |  | 21  
|              |  |                                                                                      
|Part II       |  | OTHER INFORMATION                                                                     |  |     
|Item 1.       |  | Legal Proceedings.                                                                    |  | 22  
|Item 1A.      |  | Risk Factors.                                                                         |  | 22  
|Item 2.       |  | Unregistered Sales of Equity Securities and Use of Proceeds.                          |  | 22  
|Item 3.       |  | Defaults Upon Senior Securities.                                                      |  | 22  
|Item 4.       |  | Submission of Matters to a Vote of Security Holders.                                  |  | 22  
|Item 5.       |  | Other Information.                                                                    |  | 22  
|Item 6.       |  | Exhibits.                                                                             |  | 23  
|Exhibit Index |  |                                                                                      
|Signatures    |  | 25                                                                                   





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##### Table of Contents

INTRODUCTION

On May 3, 2006, all of our outstanding stock was acquired by NPC Acquisition Holdings, LLC (Holdings), a company controlled by Merrill Lynch Global Private Equity (MLGPE) and certain of
its affiliates (the Acquisition). In connection with the Acquisition, we issued $175.0 million principal amount of notes and entered into a $375.0 million Senior Credit Facility. The $375.0 million Senior Credit Facility consists of a
$300.0 million term loan due 2013 and a $75.0 million revolving credit facility due 2012. All of these transactions, as further described herein, are collectively referred to in this report as the Transactions.

New Basis of Accounting.As a result of the Transactions, purchase accounting adjustments were made to underlying assets and liabilities based on
the appraisal associated with the valuation of certain assets and liabilities. The purchase accounting adjustments did not impact net cash flow. The primary changes to the balance sheet reflect: (1) adjustments of the franchise rights to fair
value, (2) adjustment of facilities and equipment to fair value, (3) adjustments to goodwill arising from the purchase accounting adjustments, (4) adjustments to the equity section from the purchase accounting adjustments,
(5) adjustments to deferred tax balances, and (6) adjustments to other deferred liabilities due to the purchase accounting adjustments. The primary impact to the post-transactions income statement as a result of the application of purchase
accounting includes an increase in the amortization and depreciation expense associated with the adjustments to franchise rights and facilities and equipment based upon the estimates of fair value and managements estimate of the remaining
useful lives of the subject assets. The Transactions resulted in higher debt levels and related interest accruals and increased capitalized debt issue costs which resulted in higher interest expense during the post-transaction periods.

Due to the impact of the changes resulting from the purchase accounting adjustments described above, the income statement and statement of cash flows
presentation separates the operating results of the Company into two accounting periods; (1) the period prior to the May 2, 2006 consummation of the Transactions (Predecessor), and (2) the period beginning May 3, 2006
and after utilizing the new basis of accounting (Successor). The results are further separated by a heavy black line to indicate the effective date of the new basis of accounting.



2



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##### Table of Contents

PART I

PART 1. FINANCIAL INFORMATION



|Item 1. | Condensed Consolidated Financial Statements
|------- | -------------------------------------------

NPC
INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share data)



|                                                                                                                                          |  |               |         |   |                  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                          |  | June 26, 2007 |         |   | December 26,2006 |  
|Assets                                                                                                                                    |  |               |         |   |                  |   |         |  
|Current assets:                                                                                                                           |  |               |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                                 |  | $             | 5,058   |   |                  | $ | 9,289   |  
|Accounts receivable                                                                                                                       |  |               | 2,644   |   |                  |   | 3,619   |  
|Inventories                                                                                                                               |  |               | 4,746   |   |                  |   | 4,291   |  
|Prepaid expenses and other current assets                                                                                                 |  |               | 4,395   |   |                  |   | 5,491   |  
|Assets held for sale                                                                                                                      |  |               | 1,283   |   |                  |   | 320     |  
|Deferred income taxes                                                                                                                     |  |               | 3,428   |   |                  |   | 1,935   |  
|Income taxes receivable                                                                                                                   |  |               | 161     |   |                  |   |        |  
|                                                                                                                                          |  |               |         |   |                  |   |         |  
|Total current assets                                                                                                                      |  |               | 21,715  |   |                  |   | 24,945  |  
|                                                                                                                                          |  |               |         |   |                  |   |         |  
|Facilities and equipment                                                                                                                  |  |               | 176,554 |   |                  |   | 162,938 |  
|Less accumulated depreciation                                                                                                             |  |               | (36,215 | ) |                  |   | (21,129 | )
|                                                                                                                                          |  |               |         |   |                  |   |         |  
|Net facilities and equipment                                                                                                              |  |               | 140,339 |   |                  |   | 141,809 |  
|Franchise rights, less accumulated amortization of $10,730 and $5,895, respectively                                                       |  |               | 433,963 |   |                  |   | 421,140 |  
|Goodwill                                                                                                                                  |  |               | 191,590 |   |                  |   | 185,187 |  
|Other assets, net                                                                                                                         |  |               | 31,329  |   |                  |   | 32,621  |  
|                                                                                                                                          |  |               |         |   |                  |   |         |  
|Total assets                                                                                                                              |  | $             | 818,936 |   |                  | $ | 805,702 |  
|                                                                                                                                          |  |               |         |   |                  |   |         |  
|Liabilities and stockholders equity                                                                                                      |  |               |         |   |                  |   |         |  
|Current liabilities:                                                                                                                      |  |               |         |   |                  |   |         |  
|Accounts payable                                                                                                                          |  | $             | 20,617  |   |                  | $ | 10,562  |  
|Payroll and sales taxes                                                                                                                   |  |               | 5,548   |   |                  |   | 5,632   |  
|Accrued interest                                                                                                                          |  |               | 6,009   |   |                  |   | 6,293   |  
|Accrued payroll                                                                                                                           |  |               | 10,089  |   |                  |   | 9,053   |  
|Income taxes payable                                                                                                                      |  |               |        |   |                  |   | 4,741   |  
|Other accrued liabilities                                                                                                                 |  |               | 13,468  |   |                  |   | 13,534  |  
|Current portion of insurance reserves                                                                                                     |  |               | 7,731   |   |                  |   | 6,594   |  
|Current portion of long-term debt                                                                                                         |  |               | 1,263   |   |                  |   |        |  
|                                                                                                                                          |  |               |         |   |                  |   |         |  
|Total current liabilities                                                                                                                 |  |               | 64,725  |   |                  |   | 56,409  |  
|                                                                                                                                          |  |               |         |   |                  |   |         |  
|Long-term debt                                                                                                                            |  |               | 427,937 |   |                  |   | 431,700 |  
|Other deferred items                                                                                                                      |  |               | 23,430  |   |                  |   | 20,568  |  
|Insurance reserves                                                                                                                        |  |               | 9,000   |   |                  |   | 9,000   |  
|Deferred income taxes                                                                                                                     |  |               | 128,353 |   |                  |   | 126,542 |  
|                                                                                                                                          |  |               |         |   |                  |   |         |  
|Total long-term liabilities                                                                                                               |  |               | 588,720 |   |                  |   | 587,810 |  
|                                                                                                                                          |  |               |         |   |                  |   |         |  
|Commitments and contingencies                                                                                                             |  |               |         |   |                  |   |         |  
|Stockholders equity:                                                                                                                     |  |               |         |   |                  |   |         |  
|Common stock ($0.01 par value, 2,000 shares authorized and 1,000 shares issued and outstanding as of June 26, 2007 and December 26,
2006) |  |               |        |   |                  |   |        |  
|Paid-in-capital                                                                                                                           |  |               | 163,325 |   |                  |   | 163,325 |  
|Accumulated other comprehensive loss                                                                                                      |  |               | (122    | ) |                  |   | (719    | )
|Retained earnings (deficit)                                                                                                               |  |               | 2,288   |   |                  |   | (1,123  | )
|                                                                                                                                          |  |               |         |   |                  |   |         |  
|Total stockholders equity                                                                                                                |  |               | 165,491 |   |                  |   | 161,483 |  
|                                                                                                                                          |  |               |         |   |                  |   |         |  
|Total liabilities and stockholders equity                                                                                                |  | $             | 818,936 |   |                  | $ | 805,702 |  
|                                                                                                                                          |  |               |         |   |                  |   |         |  

See accompanying notes to the condensed consolidated financial statements.



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NPC INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(in thousands)



|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|------------------------------------------------------- |  | ------------------------- | ------- | - | ------------------------ | - | ------ | - |  | ----------- |  | - | ------- | -
|                                                        |  | 13 WeeksEndedJune 26,2007 |         |   | 8 WeeksEndedJune 27,2006 |   |        |   |  | Predecessor | 
|                                                        |  |                           |         |   | 5 WeeksEndedMay 2,2006   |  
|Sales:                                                  |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Net product sales                                       |  | $                         | 167,452 |   |                          | $ | 88,809 |   |  |             |  | $ | 56,070  |  
|Fees and other income                                   |  |                           | 4,498   |   |                          |   | 2,357  |   |  |             |  |   | 1,506   |  
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Total sales                                             |  |                           | 171,950 |   |                          |   | 91,166 |   |  |             |  |   | 57,576  |  
|Costs and expenses:                                     |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Cost of sales (excluding depreciation and amortization) |  |                           | 44,454  |   |                          |   | 22,700 |   |  |             |  |   | 13,937  |  
|Direct labor                                            |  |                           | 47,453  |   |                          |   | 25,470 |   |  |             |  |   | 14,979  |  
|Other restaurant and operating expenses                 |  |                           | 56,014  |   |                          |   | 28,653 |   |  |             |  |   | 17,254  |  
|General and administrative expenses                     |  |                           | 9,341   |   |                          |   | 5,190  |   |  |             |  |   | 15,381  |  
|Corporate depreciation and amortization of intangibles  |  |                           | 3,025   |   |                          |   | 1,873  |   |  |             |  |   | 534     |  
|Net facility impairment charges                         |  |                           | 265     |   |                          |   | 152    |   |  |             |  |   |        |  
|Net (gain) on disposition of assets                     |  |                           | (149    | ) |                          |   | (275   | ) |  |             |  |   | (50     | )
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Total costs and expenses                                |  |                           | 160,403 |   |                          |   | 83,763 |   |  |             |  |   | 62,035  |  
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Operating income/(loss)                                 |  |                           | 11,547  |   |                          |   | 7,403  |   |  |             |  |   | (4,459  | )
|Other income (expense):                                 |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Interest expense                                        |  |                           | (9,691  | ) |                          |   | (6,114 | ) |  |             |  |   | (687    | )
|Loss on early termination of debt                       |  |                           |        |   |                          |   |       |   |  |             |  |   | (11,306 | )
|Miscellaneous                                           |  |                           | 11      |   |                          |   | 91     |   |  |             |  |   | (577    | )
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Income/(loss) before income taxes                       |  |                           | 1,867   |   |                          |   | 1,380  |   |  |             |  |   | (17,029 | )
|Income tax expense                                      |  |                           | 505     |   |                          |   | 483    |   |  |             |  |   |        |  
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Net income/(loss)                                       |  | $                         | 1,362   |   |                          | $ | 897    |   |  |             |  | $ | (17,029 | )
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Pro forma data:                                         |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Historical loss before income taxes                     |  |                           |         |   |                          |   |        |   |  |             |  | $ | (17,029 | )
|Pro forma income tax benefit                            |  |                           |         |   |                          |   |        |   |  |             |  |   | 6,437   |  
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Pro forma net loss                                      |  |                           |         |   |                          |   |        |   |  |             |  | $ | (10,592 | )
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  

See accompanying notes to the condensed consolidated financial statements.



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NPC INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(in thousands)



|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|------------------------------------------------------- |  | ------------------------- | ------- | - | ------------------------ | - | ------ | - |  | ----------- |  | - | ------- | -
|                                                        |  | 26 WeeksEndedJune 26,2007 |         |   | 8 WeeksEndedJune 27,2006 |   |        |   |  | Predecessor | 
|                                                        |  |                           |         |   | 18 WeeksEndedMay 2,2006  |  
|Sales:                                                  |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Net product sales                                       |  | $                         | 335,877 |   |                          | $ | 88,809 |   |  |             |  | $ | 214,587 |  
|Fees and other income                                   |  |                           | 9,161   |   |                          |   | 2,357  |   |  |             |  |   | 5,881   |  
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Total sales                                             |  |                           | 345,038 |   |                          |   | 91,166 |   |  |             |  |   | 220,468 |  
|Costs and expenses:                                     |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Cost of sales (excluding depreciation and amortization) |  |                           | 89,432  |   |                          |   | 22,700 |   |  |             |  |   | 54,896  |  
|Direct labor                                            |  |                           | 95,315  |   |                          |   | 25,470 |   |  |             |  |   | 59,008  |  
|Other restaurant and operating expenses                 |  |                           | 110,505 |   |                          |   | 28,653 |   |  |             |  |   | 66,032  |  
|General and administrative expenses                     |  |                           | 19,086  |   |                          |   | 5,190  |   |  |             |  |   | 24,372  |  
|Corporate depreciation and amortization of intangibles  |  |                           | 6,247   |   |                          |   | 1,873  |   |  |             |  |   | 2,144   |  
|Net facility impairment charges                         |  |                           | 348     |   |                          |   | 152    |   |  |             |  |   | 100     |  
|Net (gain) on disposition of assets                     |  |                           | (490    | ) |                          |   | (275   | ) |  |             |  |   | (207    | )
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Total costs and expenses                                |  |                           | 320,443 |   |                          |   | 83,763 |   |  |             |  |   | 206,345 |  
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Operating income                                        |  |                           | 24,595  |   |                          |   | 7,403  |   |  |             |  |   | 14,123  |  
|Other income (expense):                                 |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Interest expense                                        |  |                           | (19,066 | ) |                          |   | (6,114 | ) |  |             |  |   | (3,744  | )
|Loss on early termination of debt                       |  |                           |        |   |                          |   |       |   |  |             |  |   | (11,306 | )
|Miscellaneous                                           |  |                           | 15      |   |                          |   | 91     |   |  |             |  |   | (690    | )
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Income/(loss) before income taxes                       |  |                           | 5,544   |   |                          |   | 1,380  |   |  |             |  |   | (1,617  | )
|Income tax expense                                      |  |                           | 1,772   |   |                          |   | 483    |   |  |             |  |   |        |  
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Net income/(loss)                                       |  | $                         | 3,772   |   |                          | $ | 897    |   |  |             |  | $ | (1,617  | )
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Pro forma data:                                         |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Historical loss before income taxes                     |  |                           |         |   |                          |   |        |   |  |             |  | $ | (1,617  | )
|Pro forma income tax benefit                            |  |                           |         |   |                          |   |        |   |  |             |  |   | 611     |  
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  
|Pro forma net loss                                      |  |                           |         |   |                          |   |        |   |  |             |  | $ | (1,006  | )
|                                                        |  |                           |         |   |                          |   |        |   |  |             |  |   |         |  

See accompanying notes to the condensed consolidated financial statements.



5



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##### Table of Contents

NPC INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)



|                                                                              |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|----------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ------------------------ | - | -------- | --- |  | ----------- |  | - | ------- | ---
|                                                                              |  | 26 WeeksEndedJune 26,2007 |         |   | 8 WeeksEndedJune 27,2006 |   |          |     |  | Predecessor | 
|                                                                              |  |                           |         |   | 18 WeeksEndedMay 2,2006  |  
|Operating activities                                                          |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Net income                                                                    |  | $                         | 3,772   |   |                          | $ | 897      |     |  |             |  | $ | (1,617  | )  
|Adjustments to reconcile net income to cash provided by operating activities: |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Depreciation and amortization                                                 |  |                           | 22,460  |   |                          |   | 5,588    |     |  |             |  |   | 9,985   |    
|Amortization of debt issuance costs                                           |  |                           | 1,094   |   |                          |   | 323      |     |  |             |  |   | 145     |    
|Net facility impairment charges                                               |  |                           | 348     |   |                          |   | 152      |     |  |             |  |   | 100     |    
|Deferred income taxes                                                         |  |                           | (1,139  | ) |                          |   |         |     |  |             |  |   |        |    
|Loss on early termination of debt                                             |  |                           |        |   |                          |   |         |     |  |             |  |   | 11,306  |    
|Acceleration of executive deferred compensation                               |  |                           |        |   |                          |   |         |     |  |             |  |   | 11,871  |    
|Net gain on disposition of assets                                             |  |                           | (490    | ) |                          |   | (276     | )   |  |             |  |   | (207    | )  
|Changes in assets and liabilities, excluding acquisitions:                    |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Accounts receivable                                                           |  |                           | 1,117   |   |                          |   | 919      |     |  |             |  |   | (159    | )  
|Inventories                                                                   |  |                           | (115    | ) |                          |   | 36       |     |  |             |  |   | 406     |    
|Prepaid expenses and other assets                                             |  |                           | 1,154   |   |                          |   | 16       |     |  |             |  |   | 949     |    
|Accounts payable                                                              |  |                           | 10,055  |   |                          |   | 5,129    |     |  |             |  |   | (7,117  | )  
|Payroll and sales taxes                                                       |  |                           | (84     | ) |                          |   | (380     | )   |  |             |  |   | 546     |    
|Income taxes payable                                                          |  |                           | (4,902  | ) |                          |   | 483      |     |  |             |  |   |        |    
|Accrued interest                                                              |  |                           | (284    | ) |                          |   | 5,545    |     |  |             |  |   | (2,059  | )  
|Accrued payroll                                                               |  |                           | 901     |   |                          |   | (34      | )   |  |             |  |   | (1,081  | )  
|Other accrued liabilities                                                     |  |                           | 64      |   |                          |   | 1,960    |     |  |             |  |   | 1,172   |    
|Other deferred items                                                          |  |                           | 1,234   |   |                          |   | (159     | )   |  |             |  |   | (243    | )  
|Insurance reserves                                                            |  |                           | 1,137   |   |                          |   | 1,086    |     |  |             |  |   | (1,250  | )  
|                                                                              |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Net cash provided by operating activities                                     |  |                           | 36,322  |   |                          |   | 21,285   |     |  |             |  |   | 22,747  |    
|                                                                              |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Investing activities                                                          |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Capital expenditures                                                          |  |                           | (13,548 | ) |                          |   | (5,792   | )   |  |             |  |   | (14,172 | )  
|Capitalized transaction costs                                                 |  |                           |        |   |                          |   | (7,546   | )   |  |             |  |   |        |    
|Purchase of the stock of the Company                                          |  |                           |        |   |                          |   | (451,585 | )   |  |             |  |   |        |    
|Purchase of Hawk-Eye Pizza, LLC                                               |  |                           |        |   |                          |   | (19,508  | )   |  |             |  |   |        |    
|Purchase of business assets, net of cash acquired                             |  |                           | (27,294 | ) |                          |   |         |     |  |             |  |   |        |    
|Proceeds from sale or disposition of assets                                   |  |                           | 871     |   |                          |   | 302      |     |  |             |  |   | 1,036   |    
|                                                                              |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Net cash used in investing activities                                         |  |                           | (39,971 | ) |                          |   | (484,129 | )   |  |             |  |   | (13,136 | )  
|                                                                              |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Financing activities                                                          |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Net change in revolving credit facility                                       |  |                           | (2,500  | ) |                          |   |         |     |  |             |  |   | 17,411  |    
|Scheduled payments on term bank facilities                                    |  |                           |        |   |                          |   |         |     |  |             |  |   | (3,125  | )  
|Retirement of predecessor entity debt and other obligations                   |  |                           |        |   |                          |   | (143,907 | )   |  |             |  |   |        |    
|Contributed capital from owners                                               |  |                           |        |   |                          |   | 163,250  |     |  |             |  |   |        |    
|Issuance of debt                                                              |  |                           |        |   |                          |   | 475,000  |     |  |             |  |   |        |    
|Prepayment on term bank facilities                                            |  |                           |        |   |                          |   | (20,000  | )   |  |             |  |   | (8,125  | )  
|Debt issue costs                                                              |  |                           | (91     | ) |                          |   | (13,504  | )   |  |             |  |   |        |    
|Proceeds from sale-leaseback transactions, net                                |  |                           | 2,009   |   |                          |   |         |     |  |             |  |   |        |    
|Debt extinguishment pre-payment penalty                                       |  |                           |        |   |                          |   |         |     |  |             |  |   | (10,380 | )  
|Distributions paid                                                            |  |                           |        |   |                          |   |         |     |  |             |  |   | (5,122  | )  
|                                                                              |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Net cash (used in) provided by financing activities                           |  |                           | (582    | ) |                          |   | 460,839  |     |  |             |  |   | (9,341  | )  
|                                                                              |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Net change in cash and cash equivalents                                       |  |                           | (4,231  | ) |                          |   | (2,005   | )   |  |             |  |   | 270     |    
|Beginning cash and cash equivalents                                           |  |                           | 9,289   |   |                          |   | 5,456    | (1) |  |             |  |   | 5,296   |    
|                                                                              |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Ending cash and cash equivalents                                              |  | $                         | 5,058   |   |                          | $ | 3,451    |     |  |             |  | $ | 5,566   | (1)
|                                                                              |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Supplemental disclosures of cash flow information:                            |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Net cash paid for interest                                                    |  | $                         | 18,256  |   |                          | $ | 336      |     |  |             |  | $ | 5,657   |    
|Net cash paid for taxes                                                       |  |                           | 6,212   |   |                          |   |         |     |  |             |  |   |        |    
|Noncash pay down of notes receivable                                          |  |                           |        |   |                          |   |         |     |  |             |  |   | 3,060   |    
|Non-cash investing activities:                                                |  |                           |         |   |                          |   |          |     |  |             |  |   |         |    
|Accrued capital expenditures                                                  |  | $                         | 2,304   |   |                          | $ | 2,879    |     |  |             |  | $ | 2,478   |    



|(1) | Cash and cash equivalents at May 3, 2006, were $0.1 million less than cash
and cash equivalents at May 2, 2006, due to Oread Holdings, LLC no longer classified as a variable interest entity on May 2, 2006.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See accompanying notes to the condensed consolidated financial statements.



6



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##### Table of Contents

NPC INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1  Basis of Presentation

The accompanying
unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for reporting on Form 10-Q. Accordingly, certain information and
disclosures required by accounting principles generally accepted in the United States for complete consolidated financial statements are not included herein.

The interim statements should be read in conjunction with the financial statements and notes thereto included in the Companys latest Annual Report on Form 10-K.

The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. The Company believes this
information includes all adjustments, consisting of normal recurring accruals, necessary to fairly present the financial condition, statements of income and cash flows for the periods then ended.

Note 2  Acquisitions

On March 3, 2006,
the Companys previous stockholders entered into a definitive Stock Purchase Agreement (SPA) with NPC Acquisition Holdings, LLC (Holdings), a company controlled by Merrill Lynch Global Private Equity (MLGPE)
and certain of its affiliates pursuant to which Holdings acquired all of the issued and outstanding shares of NPC International, Inc. for $615.0 million less indebtedness as defined in the SPA. On May 3, 2006, all of the outstanding stock was
acquired by Holdings for $615.0 million and the selling stockholders received net cash proceeds of $451.6 million, referred to as the Acquisition in this report. Under the terms of the SPA, the Company was required to extinguish all of
its existing debt and as a result incurred a voluntary prepayment make-whole penalty of $10.4 million on the senior secured notes which were paid before close. The SPA also required the Company to acquire the 75% membership interest in Hawk-Eye
Pizza, LLC (Hawk-Eye) that was not previously owned by the Company from certain members of management, other than a $3.3 million membership interest which management ultimately exchanged for membership interests in Holdings with an
equivalent fair market value. The cost to acquire this net interest in Hawk-Eye was $19.5 million subsequent to which Hawk-Eye was merged with and into the Company. In connection with the Acquisition, the Company issued $175.0 million principal
amount of Senior Subordinated Notes and entered into a $375.0 million Senior Credit Facility. The $375.0 million Senior Credit Facility consists of a $300.0 million term loan due 2013 and a $75.0 million revolving credit facility due 2012 which was
not drawn at close. The net proceeds from the Notes and Senior Credit Facility were advanced to a subsidiary of Holdings where these funds were combined with the $163.3 million contributed to Holdings by MLGPE and affiliates and used to pay the
purchase price of the acquisition and to retire certain existing indebtedness subsequent to which such subsidiary was merged with and into the Company. All of these transactions, as further described herein, are collectively referred to in this
report as the Transactions.

As a result of the Transactions, purchase accounting adjustments were made to underlying assets
and liabilities based on the appraisal associated with the valuation of certain assets and liabilities. The purchase accounting adjustments did not impact net cash flow. The primary changes to the balance sheet reflect: (1) adjustments of the
franchise rights to fair value, (2) adjustment of facilities and equipment to fair value, (3) adjustments to goodwill arising from the purchase accounting adjustments, (4) adjustments to the equity section from the purchase accounting
adjustments, (5) adjustments to deferred tax balances, and (6) adjustments to other deferred liabilities due to the purchase accounting adjustments. The primary changes to the income statement as a result of the application of purchase
accounting includes an increase in the amortization and depreciation expense associated with the adjustments to franchise rights and facilities and equipment based upon the estimates of fair value and managements estimate of the remaining
useful lives of the subject assets. The Transactions resulted in higher debt levels and related interest accruals and increased capitalized debt issue costs which resulted in higher interest expense during the post-transaction periods. Due to the
impact of the changes resulting from the purchase accounting adjustments described above, the income statement and statement of cash flows presentation separates the operating results of the Company into two accounting periods; (1) the period
prior to the May 2, 2006, the day preceding consummation of the Transactions (Predecessor), and (2) the period beginning May 3, 2006 and after utilizing the new basis of accounting (Successor). The results are
further separated by a heavy black line to indicate the effective date of the new basis of accounting.

As a result of the consummation of
the Transactions, the consolidated financial statements for the period after May 2, 2006, are presented on a different basis than that for the periods before May 3, 2006, as a result of the application of purchase accounting as of
May 3, 2006, and therefore are not comparable.



7



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The unaudited pro forma results of operations provided below for the twenty-six weeks ended June 27,
2006, are presented as though the Transactions had occurred at the beginning of the periods presented, after giving effect to purchase accounting adjustments relating to depreciation and amortization of the revalued assets, interest expense
associated with the Notes and the Senior Credit Facility and other acquisition related adjustments in connection with the Transactions. Further, as of May 3, 2006, the Company became a C Corporation. No income tax provisions were recorded in
periods presented prior to May 3, 2006; therefore, a pro forma tax provision has been calculated at 35% and is included in the below pro forma results. The pro forma results of operations are not necessarily indicative of the results that would
have occurred had the Transactions been consummated at the beginning of the periods presented, nor are they necessarily indicative of future operating results.



|                           |  |                |         |                        |   |        
|-------------------------- |  | -------------- | ------- | ---------------------- | - | -------
|                           |  | 26 Weeks Ended
|                           |  | June 26,2007   |         | Pro forma June 27,2006
|Total sales                |  | $              | 345,038 |                        | $ | 311,634
|Income before income taxes |  |                | 5,544   |                        |   | 7,124  
|Net income                 |  |                | 3,772   |                        |   | 4,631  

On March 13, 2007, the Company acquired 59 Pizza Hut units from a Pizza Hut franchisee, the
Mountain West acquisition. The transaction was funded by approximately $16.0 million of available cash and borrowings on the Companys $75.0 million revolving credit facility. The purchase price was $27.3 million (including
capitalized acquisition costs of $0.2 million), of which $17.9 million was recorded as franchise rights. This acquisition was accounted for by the purchase method of accounting, whereby operating results subsequent to the acquisition date are
included in the consolidated financial results. Forty of these stores are located throughout Idaho, four in eastern Oregon and fifteen in Washington. Forty-four of these locations are leased from the sellers on certain agreed upon terms and fifteen
locations are leased from unrelated parties. These additional units are expected to increase annual rent expense by approximately $2.5 million. The pro forma impact on the results of operations was immaterial.

Note 3  Goodwill and Other Intangible Assets

Changes in goodwill are summarized below (in thousands):



|                             |  |   |        
|---------------------------- |  | - | -------
|Balance at December 26, 2006 |  | $ | 185,187
|Goodwill from acquisition    |  |   | 6,323  
|Other, net                   |  |   | 80     
|                             |  |   |        
|Balance at June 26, 2007     |  | $ | 191,590
|                             |  |   |        

Goodwill increased $6.3 million from fiscal year end 2006 as a result of the acquisition of 59
units in March 2007 (see note 2). During the first quarter of 2007, the Company adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48)  Accounting for
Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109, which resulted in an increase to goodwill of approximately $4.2 million (see note 5). Additionally, in May 2007, the Company finalized its valuation of
assets and liabilities recorded as part of the Acquisition, which resulted in a reduction to goodwill of approximately $4.1 million.

Amortizable other intangible assets consist of franchise rights, leasehold interests, contract rights and a non-compete agreement. These intangible assets are amortized on a straight-line basis over the lesser of their economic lives or the
remaining life of the applicable agreement. Intangible assets subject to amortization pursuant to Statement of Financial Accounting Standards No. 142 (SFAS No. 142), Goodwill and Other Intangible Assets, are
summarized below (in thousands):



|                               |  |                      |         |                         |   |         |                |  |   |        
|------------------------------ |  | -------------------- | ------- | ----------------------- | - | ------- | -------------- |  | - | -------
|                               |  | June 26, 2007       
|                               |  | Gross CarryingAmount |         | AccumulatedAmortization |   |         | Net Book Value
|Amortizable intangible assets: |  |                      |         |                         |   |         |                |  |   |        
|Franchise rights               |  | $                    | 444,693 |                         | $ | (10,730 | )              |  | $ | 433,963
|Favorable leasehold interests  |  |                      | 10,198  |                         |   | (980    | )              |  |   | 9,218  
|Contract rights                |  |                      | 547     |                         |   | (425    | )              |  |   | 122    
|Non-compete                    |  |                      | 1,925   |                         |   | (449    | )              |  |   | 1,476  
|                               |  |                      |         |                         |   |         |                |  |   |        
|                               |  | $                    | 457,363 |                         | $ | (12,584 | )              |  | $ | 444,779
|                               |  |                      |         |                         |   |         |                |  |   |        



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|                               |  |                      |         |                         |   |        |                |  |   |        
|------------------------------ |  | -------------------- | ------- | ----------------------- | - | ------ | -------------- |  | - | -------
|                               |  | December 26, 2006   
|                               |  | Gross CarryingAmount |         | AccumulatedAmortization |   |        | Net Book Value
|Amortizable intangible assets: |  |                      |         |                         |   |        |                |  |   |        
|Franchise rights               |  | $                    | 427,035 |                         | $ | (5,895 | )              |  | $ | 421,140
|Favorable leasehold interests  |  |                      | 10,198  |                         |   | (597   | )              |  |   | 9,601  
|Contract rights                |  |                      | 547     |                         |   | (243   | )              |  |   | 304    
|Non-compete                    |  |                      | 1,925   |                         |   | (257   | )              |  |   | 1,668  
|                               |  |                      |         |                         |   |        |                |  |   |        
|                               |  | $                    | 439,705 |                         | $ | (6,992 | )              |  | $ | 432,713
|                               |  |                      |         |                         |   |        |                |  |   |        

Amortization expense on intangible assets was $2.8 million and $2.1 million for the
thirteen weeks ended June 26, 2007 and June 27, 2006, respectively, and $5.6 million and $3.3 million for the twenty-six weeks ended June 26, 2007 and June 27, 2006, respectively. We expect annual amortization expense for
amortizable other assets for the next five fiscal years to range from approximately $10.3 million to $10.8 million.

Note 4  Senior Secured Credit
Facility and Senior Subordinated Debt

The Companys debt consisted of the following (in thousands):



|                                         |  |               |         |                   |   |        
|---------------------------------------- |  | ------------- | ------- | ----------------- | - | -------
|                                         |  | June 26, 2007 |         | December 26, 2006
|Senior Secured Credit Facility           |  | $             | 250,000 |                   | $ | 250,000
|Senior Subordinated Notes                |  |               | 175,000 |                   |   | 175,000
|Senior Secured Revolving Credit Facility |  |               | 4,200   |                   |   | 6,700  
|                                         |  |               |         |                   |   |        
|                                         |  |               | 429,200 |                   |   | 431,700
|Less current portion                     |  |               | 1,263   |                   |   |       
|                                         |  |               |         |                   |   |        
|                                         |  | $             | 427,937 |                   | $ | 431,700
|                                         |  |               |         |                   |   |        

The Companys debt facilities contain restrictions on additional borrowing, certain asset
sales, capital expenditures, dividend payments, certain investments and related-party transactions, as well as requirements to maintain various financial ratios. At June 26, 2007, the Company was in compliance with all of its debt covenants.

The Company anticipates that it will be required to make an excess cash flow mandatory prepayment based on projected 2007 results on its
Term Loan B Note not later than 120 days after the Companys fiscal year-end. The Company anticipates this mandatory prepayment will range from $10.0 million to $15.0 million depending upon the amount of excess cash flow generated during the
fiscal year and the Companys leverage at fiscal year-end, each of which is defined in the credit agreement. The Company made a voluntary prepayment of $3.0 million on July 16, 2007, which will reduce the total prepayment required.

Note 5  Accounting for Uncertainty in Income Taxes

The Company adopted the provisions of FIN 48 on December 27, 2006. As a result of the implementation of FIN 48, the Company performed a comprehensive review of its portfolio of uncertain tax
positions in accordance with recognition standards established by FIN 48. In this regard, an uncertain tax position represents the Companys expected treatment of a tax position taken in a filed tax return, or planned to be taken in a
future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. As a result of this review in the Companys first quarter, the Company adjusted the estimated value of its gross uncertain tax
positions from $1.8 million to $8.8 million. The adjustment to increase reserves was made with a charge to retained earnings of $0.4 million and an increase to goodwill for pre-acquisition exposures of $6.6 million. Additionally, a deferred tax
asset was established for future tax benefits related to exposures for state taxes and interest of $2.4 million with an offsetting reduction primarily to goodwill.

The liability for uncertain tax positions was increased to $10.4 million as of June 26, 2007 and is considered long term and is included in other deferred items in the consolidated balance sheet. Of the $1.5
million increase during the second quarter, $0.1 million was charged to earnings and the remaining $1.4 million resulted in an offsetting decrease to the net deferred tax liability, as the current quarter increase is largely due to the acceleration
of temporary deductions. Unrecognized tax benefits of $0.8 million would affect the Companys effective tax rate if recognized.



9



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##### Table of Contents

The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax
expense. As of June 26, 2007 and December 27, 2006, the total amount of accrued income tax-related interest and penalties included in the consolidated balance sheet was $2.7 million and $2.4 million, respectively.

From January 1, 2003 through May 2, 2006 the Company was an S Corporation for income tax purposes. The Company files income tax returns in the
U.S. and various state jurisdictions. As of June 26, 2007 and December 27, 2006, the Company was subject to examination in the U.S. federal tax jurisdiction for the 2003-2006 tax years. The Company is also subject to examination in various
state jurisdictions for the 2000-2006 tax years, none of which were individually material.

Note 6  Commitments and Contractual Obligations

From time-to-time, the Company is involved in litigation, most of which is incidental to the business. In the Companys opinion, no
litigation to which the Company is party is likely to have a material adverse effect on the Companys consolidated financial statements.

Note 7
 Share Based Employee Compensation

In May 2006, Holdings agreed to establish a new stock incentive plan (the Plan),
which governs, among other things, (i) the issuance of matching options on purchased membership interests and (ii) the grant of options with respect to the membership interests. This stock incentive plan is accounted for under the
provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (SFAS 123(R)), which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS
123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amended FASB Statement No. 95, Statement of Cash Flows.

Options may be granted under the Plan with respect to a maximum of 8.0% of the membership interests of Holdings as of the closing date of the
Transactions calculated on a fully diluted basis (subject to required capital adjustments). Each grant of options under the Plan will specify the applicable option exercise period, option exercise price, vesting schedules and conditions and such
other terms and conditions as deemed appropriate. Three types of options may be granted under the plan. First, Holdings may grant non-time vesting options, with respect to up to 1.0% of the interests, to selected participants, which will
be vested at grant. Second, Holdings may grant time vesting options, with respect to up to 2.0% of the interests, which will vest ratably over a five-year period and subject to the option holders continued service. Third, Holdings
may grant options, as to the remaining interests, which vest only upon the occurrence of a change of control on or prior to the expiration of the option, and also require continued service through the vesting date. All options granted under the Plan
will expire ten years from the date of grant, but generally expire earlier upon or within 90 days after the resignation by the member. At June 26, 2007, there were 1.4 million shares available for future grants under the Plan.

The following options have been granted to certain members of management as of June 26, 2007 (in thousands):



|                          |  |                  
|------------------------- |  | -----------------
|                          |  | Number of Options
|Non-time vesting options  |  | 1,625            
|Time vesting options      |  | 3,279            
|Change of control options |  | 7,937            
|                          |  |                  
|Total options granted     |  | 12,841           
|                          |  |                  

The exercise price of the non-time vesting and time vesting options was established based on the
aggregate equity investment in Holdings at the time of closing of the Acquisition divided by the number of outstanding membership interests, or $1.00. The exercise price of the change of control options was established as twice the exercise price of
the non-time vesting and time vesting options granted, or $2.00.



|                                 |  |                   |  |                                |      |                                                     |    
|-------------------------------- |  | ----------------- |  | ------------------------------ | ---- | --------------------------------------------------- | ---
|                                 |  | Number of Options |  | Weighted AverageExercise Price |      | Weighted AverageRemainingContractual Term(in years)
|Outstanding at December 26, 2006 |  | 7,830             |  | $                              | 1.57 |                                                     |    
|Granted                          |  | 5,011             |  |                                | 1.70 |                                                     |    
|Exercised                        |  |                  |  |                                |     |                                                     |    
|Forfeited                        |  |                  |  |                                |     |                                                     |    
|                                 |  |                   |  |                                |      |                                                     |    
|Outstanding at June 26, 2007     |  | 12,841            |  | $                              | 1.62 |                                                     | 9.5
|                                 |  |                   |  |                                |      |                                                     |    
|Exercisable at June 26, 2007     |  | 1,980             |  | $                              | 1.00 |                                                     |    



10



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##### Table of Contents

Under the provisions of SFAS 123(R), the Company considers these options to be liability awards. The
compensation cost for the portion of awards that are outstanding for which the requisite service has not been rendered, or the performance condition has not been achieved, will be recognized as the requisite service is rendered and/or performance
condition achieved. Further, all options granted under the Plan are subject to a mandatory call provision with a defined value, as stated in the Amended and Restated Limited Liability Company Agreement of Holdings and described as follows:
(1) for termination of employment due to death, disability, or retirement without cause (as defined) or with good reason (as defined), each common unit covered by such options will be called at a price calculated as the difference between the
greater of $1.00 or the fair value price (FVP) as of the termination date, less the exercise price; and, (2) for any other call event, each common unit covered by such options will be called at a price calculated as the difference
between the lesser of $1.00 or the FVP as of the termination date, less the exercise price. The Company does not have a contractual obligation to fund the mandatory call of these units; however, the Company may be called upon to provide a
distribution to Holdings upon such time a triggering event should occur that would require a mandatory call of outstanding units.

As of
June 26, 2007, no options had been exercised or forfeited by management. Based on the provisions of the Plan, management is assuming a 100% forfeiture rate for all options granted until such time a triggering event, as defined in the Plan,
should become probable. As no triggering events have been deemed probable as of June 26, 2007, the Company has recorded no compensation expense for options granted.

Note 8  Related-Party Transactions

MLGPE Advisory Agreement.Upon completion of the
Transactions, the Company entered into an advisory agreement with an affiliate of MLGPE pursuant to which such entity or its affiliates will provide advisory services to the Company. Under the agreement MLGPE or its affiliates will continue to
provide financial, investment banking, management advisory and other services on the Companys behalf for an annual fee of $1.0 million. The Company has paid $1.0 million to MLGPE for this fee for 2007, which is being amortized ratably to
expense.

Merrill Lynch & Company Investments Derivative Transaction.On June 6, 2006, the Company entered into an
amortizing floating-to-fixed swap agreement expiring December 31, 2010, on an initial notional amount of $140.0 million (which had an unamortized balance of $125.0 million at June 26, 2007). Merrill Lynch Capital Services, Inc.
(MLCS), was the counterparty on $70.0 million of the total notional amount, and JPMorgan Chase Base, N.A. (JPMCB), an unrelated party, was the counterparty on the residual $70.0 million. Under this swap, the Company will pay
both counter-parties 5.39% and receive the three-month LIBOR rate as determined on the reset dates. These swaps were entered into to provide a hedge against the effects of rising interest rates on a portion of the $300.0 million Term Loan B Notes
under the Senior Secured Credit Facility. As of June 26, 2007, the Company has recognized $0.2 million ($0.1 million after tax) of other comprehensive losses related to the fair market value of these interest rate swaps.

Note 9  New Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, this statement defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair
value measurements. The statement applies whenever other statements require or permit assets or liabilities to be measured at fair value. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company is
currently evaluating the impact of this adoption on our consolidated financial statements.

In February 2007, the FASB issued SFAS
No. 159, The Fair Value Option for Financial Assets and Liabilities. This statement permits entities to choose to measure many financial instruments and certain other items at fair value. If the fair value option is
elected, unrealized gains and losses will be recognized in earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact
of this adoption on our consolidated financial statements.



11



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

Cautionary Statement Regarding Forward Looking Information

This report includes forward-looking
statements regarding, among other things, our plans, strategies, and prospects, both business and financial. All statements contained in this document other than historical information are forward-looking statements. Forward-looking statements
include, but are not limited to, statements that represent our beliefs concerning future operations, strategies, financial results or other developments, and contain words and phrases such as may, expect, should,
anticipate, intend, or similar expressions. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are
beyond our control or are subject to change, actual results could be materially different. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure
you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from the
forward-looking statements include, but are not limited to, the following:



| |  |  | competitive conditions;
| | - |  | -----------------------



| |  |  | general economic and market conditions;
| | - |  | ---------------------------------------



| |  |  | effectiveness of franchisor advertising programs and the overall success of the franchisor;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | increases in food, labor, fuel and other costs;
| | - |  | -----------------------------------------------



| |  |  | effectiveness of the United Foodservice Purchasing Co-op (UFPC) hedging program for cheese prices;
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | significant disruptions in service or supply by any of our suppliers or distributors;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | changes in consumer tastes, geographic concentration and demographic patterns;
| | - |  | ------------------------------------------------------------------------------



| |  |  | consumer concerns about health and nutrition;
| | - |  | ---------------------------------------------



| |  |  | our ability to manage our growth and successfully implement our business strategy;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | the risks associated with the expansion of our business;
| | - |  | --------------------------------------------------------



| |  |  | the effect of disruptions to our computer and information systems;
| | - |  | ------------------------------------------------------------------



| |  |  | the effect of local conditions, events and natural disasters;
| | - |  | -------------------------------------------------------------



| |  |  | general risks associated with the restaurant industry;
| | - |  | ------------------------------------------------------



| |  |  | the outcome of pending or yet-to-be instituted legal proceedings;
| | - |  | -----------------------------------------------------------------



| |  |  | regulatory factors;
| | - |  | -------------------



| |  |  | the loss of our executive officers and certain key personnel;
| | - |  | -------------------------------------------------------------



| |  |  | our ability to service our substantial indebtedness;
| | - |  | ----------------------------------------------------



| |  |  | restrictions contained in our debt agreements;
| | - |  | ----------------------------------------------



| |  |  | availability, terms and deployment of capital;
| | - |  | ----------------------------------------------



| |  |  | and, various other factors beyond our control.
| | - |  | ----------------------------------------------

Consequently, such forward-looking statements should be regarded solely as our current plans, estimates and beliefs. We do not intend, and do not undertake, any obligation to update any forward looking
statements to reflect future events or circumstances after the date of such statements. Further, the following discussion includes periods prior to the consummation of the Transactions (described below) which occurred during our fiscal year ended
December 26, 2006 (fiscal 2006). Accordingly, unless otherwise stated, the discussion of such periods does not reflect the significant impact that the Transactions will have on us, including significantly increased leverage and
liquidity requirements. For a more detailed discussion of the principal factors that could cause actual results to be materially different, you should read our risk factors in Item 1A of our 2006 Form 10-K.

Overview

Who We Are.NPC International, Inc.
(referred to herein as NPC, the Company or in the first person notations of we, us and our) is the largest Pizza Hut franchisee and the largest franchisee of any restaurant concept in the
United States according to the 2006 Chain Restaurant Industry Review by GE Capital Solutions. We were founded in 1962 and, as of June 26, 2007, we operated 871 Pizza Hut units in 24 states with significant presence in the Midwest,
South and Southeast. As of December 26, 2006, we comprised approximately 13% of the domestic Pizza Hut restaurant system and 17% of the domestic Pizza Hut franchised restaurant units, excluding licensed units.



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Basis of Presentation and Consolidation.Our financial condition and results of operations
includes us and our wholly owned subsidiaries, as well as the accounts of Hawk-Eye Pizza, LLC, which for the periods presented was 25% owned by us and 75% owned by certain members of senior management, until May 3, 2006, when we acquired the
75% interest not formerly owned by us in conjunction with the Transactions. The accounts of Oread Capital Partners, LLC, an entity owned by certain members of senior management that held the 75% interest in Hawk-Eye Pizza, LLC, are also reflected in
our consolidated financial statements during the periods presented through May 2, 2006, as we were deemed to have variable interest and were deemed the primary beneficiary.

Our Fiscal Year.We operate on a 52- or 53-week fiscal year ended on the last Tuesday in December. Fiscal year 2007 contains 52 weeks; fiscal
years 2006 and 2005 each contained 52 weeks.

New Basis of Accounting.As a result of the Transactions, purchase accounting
adjustments were made to underlying assets and liabilities based on the appraisal associated with the valuation of certain assets and liabilities. The purchase accounting adjustments did not impact net cash flow. The primary changes to the balance
sheet reflect: (1) adjustments of the franchise rights to fair value, (2) adjustment of facilities and equipment to fair value, (3) adjustments to goodwill arising from the purchase accounting adjustments, (4) adjustments to the
equity section from the purchase accounting adjustments, (5) adjustments to deferred tax balances, and (6) adjustments to other deferred liabilities due to the purchase accounting adjustments. The primary impact to the post-transactions
income statement as a result of the application of purchase accounting includes an increase in the amortization and depreciation expense associated with the adjustments to franchise rights and facilities and equipment based upon the estimates of
fair value and managements estimate of the remaining useful lives of the subject assets. The Transactions resulted in higher debt levels and related interest accruals and increased capitalized debt issue costs which resulted in higher interest
expense during the post-transaction periods.

Due to the impact of the changes resulting from the purchase accounting adjustments described
above, the income statement and statement of cash flows presentation separates the operating results of the Company into two accounting periods; (1) the period prior to the May 2, 2006 consummation of the Transactions
(Predecessor), and (2) the period beginning May 3, 2006 and after utilizing the new basis of accounting (Successor). The results are further separated by a heavy black line to indicate the effective date of the new
basis of accounting.

Our Sales

Net
Product Sales.Net product sales are comprised of sales of food and beverages from our restaurants, net of discounts. Year-to-date for fiscal 2007, pizza sales accounted for approximately 85% of net product sales. Various factors influence sales
at a given store, including customer recognition of the Pizza Hut brand, our level of service and operational effectiveness, pricing, marketing and promotional efforts and local competition. Several factors affect our sales in any period, including
the number of stores in operation, same store sales and seasonality.

Fees and Other Income.Fees and other income are comprised
primarily of delivery fees charged to customers and vending receipts.

Seasonality.Our business is seasonal in nature with net
product sales and operating income being lower in the second and third fiscal quarters. Sales are largely driven by product innovation, advertising and promotional activities and can be adversely impacted by holidays and economic times that
generally negatively impact consumer discretionary spending, such as the back to school season. As a result of these seasonal fluctuations, our operating results may vary substantially between fiscal quarters. Further, results for any quarter are
not necessarily indicative of the results that may be achieved for the full fiscal year.

Our Costs

Our operating costs and expenses are comprised of cost of sales, direct labor, other restaurant expenses and general and administrative expenses. Our cost
structure is highly variable with approximately 70% of operating costs variable to sales and volume of transactions.

Cost of sales.Cost of sales includes the cost of food and beverage products sold, less rebates from suppliers, as well as paper and packaging, and is primarily influenced by fluctuation in commodity prices. Cheese and meat costs have historically represented
approximately 30% and 13% of our cost of sales, respectively. These costs can fluctuate from year to year given the commodity nature of the cost category, but are constant across regions. We are a member of the UFPC, a cooperative set up to act as a
central procurement service for the operators of Yum! Brands, Inc. restaurants, and take advantage of their hedging of cheese prices and procurement programs for cheese, meat and certain other commodities to help reduce the price volatility of those
commodities from period to period. Based on information provided by the UFPC, as of June 26, 2007, approximately 44% of the Pizza Hut Systems anticipated cheese purchases are hedged for the balance of the fiscal year through a combination
of derivatives entered into by the UFPC. In addition, approximately 30% of the Pizza Hut System anticipated cheese volume has been hedged for fiscal year 2008 using similar UFPC hedging strategies.



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Direct Labor.Direct labor includes the salary, payroll taxes, fringe benefit costs and workers
compensation expense associated with restaurant based personnel. Direct labor is highly dependent on state minimum wage rate legislation given that the vast majority of our workers are hourly employees. To control labor costs, we are focused on
proper scheduling and adequate training and testing of our store employees, as well as retention of existing employees.

Other
restaurant operating expenses.Other restaurant operating expenses include all other costs directly associated with operating a restaurant facility, which primarily represents franchise fees, advertising, rent and depreciation (facilities and
equipment), utilities, delivery expenses, supplies, repairs, insurance, and other restaurant related costs.

General and administrative
expenses.General and administrative expenses include field supervision and personnel costs and the corporate and administrative functions that support our restaurants, including employee wages and benefits, travel, information systems,
recruiting and training costs, professional fees, supplies, insurance and bank service and credit card discount fees. As a result of new public reporting requirements, we will have on-going reporting requirements and will incur legal, accounting and
other expenses that we did not incur in prior years, which could be significant.

Trends and Uncertainties Affecting Our Business

We believe that as a franchisee of such a large number of Pizza Hut restaurants, our financial success is driven less by variable factors that affect
regional restaurants and their markets, and more by trends affecting the food purchase industry  specifically the Quick Service Restaurants, or QSR industry. The following discussion describes certain key factors that may affect
our future performance.

Demographics and Consumer Spending

Lifestyle and demographic trends are positive drivers of the restaurant industry. The QSR industry has experienced consistent growth driven by favorable economic and consumer trends, including the increasing number of
dual-income and single-parent households, increased disposable income and discretionary spending, an aging baby boomer generation, the rising time constraints of todays average consumer and relatively low levels of inflation. However, in
fiscal 2007, increased gas prices, declining home sales and the negative impact of changes in the sub-prime mortgage market have caused the consumer to experience a reduction in disposable income which has negatively impacted consumer spending in
certain segments of the restaurant industry, including the segment in which we compete.

Competition

The QSR industry is a fragmented market, with competition from national and regional chains, as well as independent operators, which affects pricing
strategies and margins. In the pizza segment, limited product variability can make differentiation among competitors difficult. Thus, competitors continuously promote and market new product introductions, price discounts and bundled deals, and rely
heavily on effective marketing and advertising to drive sales.

Commodity Prices

Commodity prices of foods such as meat, cheese and wheat, can vary. The prices of these commodities can change throughout the year due to changes in
supply and demand. We experienced significant inflation in the block cheddar cheese market during the second fiscal quarter of 2007. The block cheese price in the second fiscal quarter averaged $1.69, an increase of $0.34 or 25.2% versus the average
price during the first fiscal quarter of 2007; additionally, the average price was $0.51 or 42.8% higher than the second fiscal quarter of 2006.

The block cheddar cheese market has retraced its price somewhat since its highs during the second fiscal quarter of 2007, falling from a daily high of $2.10 on June 25, 2007, to $1.90 as of August 3, 2007, per the Chicago
Mercantile and Exchange. The average block price during the initial 6 weeks, ended August 3, 2007, of the third fiscal quarter 2007 has been $0.77 or 65.8% higher than last year during the same period. We expect to mitigate a portion of this
increase versus the prior year through the UFPCs cheese hedging activities. Even though the market has fallen significantly from its highs, we cannot predict future changes in prices.

Labor Cost

The restaurant industry is labor
intensive and known for having a high level of employee turnover given low hourly wages and the part-time composition of the workforce. Direct labor is highly dependent on state minimum wage rate legislation given the vast majority of workers are
hourly employees whose compensation is either determined or influenced by the minimum wage rate. Recently, there has been legislation passed to increase certain states minimum wage rates. We estimate the impact from these increases will result
in incremental direct labor expense which we will attempt to mitigate through increased net pricing in these markets, productivity improvement in our restaurants, better overall wage management tactics and other auxiliary cost reduction strategies.
Further, in May 2007, the United States Congress passed a bill, which was signed into law, to increase the federal minimum wage rate per hour as follows: from $5.15 to $5.85 effective July 24, 2007; $6.55 effective July 24, 2008 and $7.25
effective July 24, 2009. The federal tipped wage rate remained unchanged at $2.13 per hour. The expected impact on our direct labor costs for these changes is



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described below under Inflation. We believe we have effective strategies in place to offset some of this anticipated impact; however, we cannot
be certain that we will be able to offset all of this increase through increased pricing and productivity improvements in our restaurants.

Inflation

Inflationary factors, such as increases in food and labor costs, directly affect our operations. Because most of our employees are paid
on an hourly basis, changes in rates related to federal and state minimum wage and tip credit laws will affect our labor costs. We are not always able to offset higher costs with price increases. We expect the impact of the aforementioned state
minimum wage rates to increase our direct labor expense by approximately $1.4 million during fiscal 2007. Further, we estimate the impact to our direct labor costs for the federal minimum wage increase to be approximately $1.2 million during the
remainder of 2007. We believe we have effective strategies in place to offset some of this anticipated impact; however, we cannot be certain that we will be able to offset all of this increase through increased pricing and productivity improvements
in our restaurants.

Additionally, significant increases in average gasoline prices in the regions in which we operate could increase our
delivery driver reimbursement costs. We estimate that every $0.25 per gallon increase in average gas prices in our markets adversely impacts our annual operating results by approximately $0.4 million.

While we do not believe our business is highly sensitive to inflation, there can be no assurance that a high rate of inflation would not have an adverse
impact on our operations.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited Condensed Consolidated Financial Statements. The preparation of these financial statements requires
estimation and judgment that affect the reported amounts of revenue, expenses, assets, and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. If these estimates differ materially from actual results, the impact on the Condensed
Consolidated Financial Statements may be material. Our critical accounting policies are available in Item 7 of our 2006 Annual Report on Form 10-K. There have been no significant changes with respect to these policies during the first six
months of 2007, except for the treatment of uncertain tax positions.

Effective December 27, 2006, we began to measure and record tax
contingency accruals in accordance with FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (FIN 48). Under FIN 48, we will recognize tax benefits only for
tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. Unrecognized
tax benefits are tax benefits claimed in our tax returns that do not meet these recognition and measurement standards. For additional information on the adoption of FIN 48, see Note 5 in Part I, Item 1 of this report.

Recently Issued Accounting Statements and Pronouncements

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (SFAS No. 157), Fair Value Measurements. This statement defines fair value, establishes a framework for using fair
value to measure assets and liabilities, and expands disclosures about fair value measurements. The statement applies whenever other statements require or permit assets or liabilities to be measured at fair value. SFAS No. 157 is effective for
fiscal years beginning after November 15, 2007. We are currently evaluating the impact of this adoption on our consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Liabilities. This statement permits entities to choose to measure many financial instruments and
certain other items at fair value. If the fair value option is elected, unrealized gains and losses will be recognized in earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning after
November 15, 2007. We are currently evaluating the impact of this adoption on our consolidated financial statements.



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Results of Operations

As a result of the purchase accounting adjustments described in OverviewNew Basis of Accountingabove, the periods ended June 26, 2007 and June 27 and May 2, 2006 presented in the
following tables may not be comparable. The table below presents selected restaurant operating results as a percentage of net product sales for the thirteen and twenty-six week periods ended June 26, 2007 and the successor and predecessor
periods ended June 27 and May 2, 2006, respectively.



|                                      |  |                             |  |                             |                           |  |  |             |  |                              |  |                             |  |  |  |            
|------------------------------------- |  | --------------------------- |  | --------------------------- | ------------------------- |  |  | ----------- |  | ---------------------------- |  | --------------------------- |  |  |  | -----------
|                                      |  | 13 WeeksEnded June 26, 2007 |  | 8 Weeks Ended June 27, 2006 |                           |  |  | Predecessor |  | 26 Weeks Ended June 26, 2007 |  | 8 Weeks Ended June 27, 2006 |  |  |  | Predecessor
|                                      |  |                             |  |                             | 5 Weeks Ended May 2, 2006 |  |  |             |  | 18 WeeksEnded May 2, 2006   
|Net product sales                     |  | 100%                        |  | 100%                        |                           |  |  | 100%        |  | 100%                         |  | 100%                        |  |  |  | 100%       
|Direct restaurant costs and expenses: |  |                             |  |                             |                           |  |  |             |  |                              |  |                             |  |  |  |            
|Cost of sales                         |  | 26.5%                       |  | 25.6%                       |                           |  |  | 24.9%       |  | 26.6%                        |  | 25.6%                       |  |  |  | 25.6%      
|Direct labor                          |  | 28.3%                       |  | 28.7%                       |                           |  |  | 26.7%       |  | 28.4%                        |  | 28.7%                       |  |  |  | 27.5%      
|Other restaurant operating expenses   |  | 33.5%                       |  | 32.3%                       |                           |  |  | 30.8%       |  | 32.9%                        |  | 32.3%                       |  |  |  | 30.8%      

Activity with respect to unit count during the twenty-six weeks ended June 26, 2007 is set
forth in the table below:



|                             |  |     |  
|---------------------------- |  | --- | -
|Balance at December 26, 2006 |  | 816 |  
|Developed(1)                 |  | 8   |  
|Acquired                     |  | 59  |  
|Closed(1)                    |  | (12 | )
|                             |  |     |  
|Balance at June 26, 2007     |  | 871 |  
|                             |  |     |  



|(1) | Five units were relocated
and are included in both the developed and closed total above.
|--- | ----------------------------------------------------------------------------------------

Thirteen Weeks Ended June 26, 2007 Compared to
June 27, 2006

Net Product Sales.Net product sales for the thirteen weeks ended June 26, 2007 were not impacted by
the purchase accounting adjustments and compared to the thirteen weeks ended June 27, 2006, were $167.5 million and $144.9 million, respectively, an increase of $22.6 million, or 15.6%, resulting largely from a 10.3% increase in weighted
average stores in operation due to acquisitions and development, with comparable store sales increasing 3.5% for the second quarter of 2007, rolling over last years second quarter same store sales decline of 3.7%.

Fees and Other Income.Fees and other income were not impacted by the purchase accounting adjustments and were $4.5 million for the thirteen weeks
ended June 26, 2007, compared to $3.9 million for the thirteen weeks ended June 27, 2006, for an increase of $0.6 million or 16.4%. The increase is primarily due to increased delivery fees attributable to increased full time equivalent
units and increased delivery transactions.

Cost of Sales.Cost of sales was not impacted by the purchase accounting adjustments and
was $44.5 million for the thirteen weeks ended June 26, 2007, compared to $36.6 million for the thirteen weeks ended June 27, 2006, for an increase of $7.9 million or 21.3%. Cost of sales increased 1.2%, as a percentage of net product
sales, to 26.5%, compared to 25.3% in the prior year, primarily due to increase in cheese (net of UFPC hedging benefits) and meat costs during the quarter compared to last year of 11.1% and 2.0%, respectively, and the high food costs associated with
the 3 for $5 promotion (3 medium hand-tossed style, one-topping pizzas for $5 each). These cost increases were partially offset by price increases and reduced discounting.

Direct Labor.Direct labor costs were not impacted by the purchase accounting adjustments and for the thirteen weeks ended June 26, 2007 as
compared to June 27, 2006 were $47.5 million and $40.4 million, respectively, an increase of $7.1 million, or 17.3%. Direct labor costs increased 0.4%, as a percentage of net product sales, to 28.3% compared to 27.9% in the prior year primarily
resulting from a $1.0 million favorable experience adjustment to health insurance reserves in the prior year, which had an impact of approximately 0.7% of net product sales. Excluding the benefit of this adjustment from last years results,
direct labor costs decreased 0.3% as a percentage of net product sales, primarily due to the positive impact of sales leverage achieved on fixed labor costs and increased productivity, which more than offset higher wage rates (caused in part by
certain state minimum wage increases) and increased workers compensation expense.

Other Restaurant Operating Expenses.Other
restaurant operating expenses for the thirteen weeks ended June 26, 2007 were $56.1 million, compared to $28.7 million and $17.3 million for the successor and predecessor periods ended June 27 and May 2, 2006, respectively. Other
operating expenses were 33.5% of net product sales for the second quarter 2007 compared to 32.3% and 30.8% of net product sales for the successor and predecessor periods, respectively, of second quarter 2006. The successor period increased over the
prior year largely due to higher depreciation and amortization resulting from purchase accounting adjustments due to the Transactions and increased rent expense related to the third and fourth quarter 2006 sale-leaseback transactions.



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General and Administrative Expenses.General and administrative expenses for the thirteen weeks
ended June 26, 2007 were $9.3 million compared to $5.2 million and $15.4 million for the successor and predecessor periods, respectively, ended June 27 and May 2, 2006. Predecessor expenses included $11.9 million in accelerated
deferred compensation expense incurred as a result of the termination of the Executive Deferred Compensation Plan as required by the Transactions as well as $0.2 million of related seller professional fees incurred before the Transactions. Excluding
these items, general and administrative expenses increased $0.8 million compared to the prior year primarily due to increased personnel costs for field supervisory support positions and credit card discount and bank fees associated with the
Nashville and Mountain West acquisitions.

Corporate Depreciation and Amortization.Corporate depreciation and amortization costs
for the thirteen weeks ended June 26, 2007 were $3.0 million compared to $1.9 million and $0.5 million for the successor and predecessor periods, respectively, ended June 27 and May 2, 2006. The increase during the 2007 successor
period is due to increased franchise rights and other intangibles amortization expense of $0.5 million and increased depreciation expense of $0.1 million primarily associated with the transaction-related purchase accounting adjustments to fixed
assets.

Net Facility Impairment Charges.We recorded charges of $0.3 million for seven properties during the thirteen weeks ended
June 26, 2007 and $0.2 million for six properties during the thirteen weeks ended June 27, 2006.

Gain on Disposition of
Assets.Gain on asset dispositions was $0.1 million for the thirteen weeks ended June 26, 2007 compared to $0.3 million for the thirteen weeks ended June 27, 2006.

Interest Expense.Interest expense was $9.7 million for the thirteen weeks ended June 26, 2007 compared to $6.1 million and $0.7 million
for the successor and predecessor periods, respectively, ended June 27 and May 2, 2006. The successor period increase was due to higher average debt levels resulting from the Transactions and increased amortization of deferred debt
issuance costs of $0.2 million.

Loss on Early Termination of Debt. During the predecessor period, a loss of approximately $11.3
million resulted from the $10.4 million make-whole payment made on our $100.0 million senior notes and write-off of $0.9 million of unamortized debt issue costs associated with the early termination of our debt which was extinguished on the closing
date of the Transactions.

Miscellaneous.Miscellaneous income was minimal for the thirteen weeks ended June 26, 2007 compared
to $0.5 million expense for the thirteen weeks ended June 27, 2006 and was not impacted by the purchase accounting adjustments.

Income Taxes.From January 1, 2003 through May 2, 2006, we were an S Corporation for income tax purposes. As of May 3, 2006, we became a C Corporation. No income tax provisions were recorded in any periods presented in
this report prior to May 3, 2006. For the thirteen weeks ended June 26, 2007, we recorded income tax expense of $0.5 million which resulted in an effective income tax rate of 27.0% compared to an effective tax rate of 35.0%, or $0.5
million, for the successor period ended June 26, 2006. The current year anticipated annual effective tax rate was reduced to 32.0% during the second quarter which resulted in a second quarter effective tax rate of 27.0% compared to 35.6% in the
first quarter of 2007. This reduction is due to higher than previously anticipated permanent deductions due to a recently implemented tax deductible food donation program.

Net Income. Net income for the thirteen weeks ended June 26, 2007 was $1.4 million, compared to net income of $0.9 million and net loss
of $17.0 million for the successor and predecessor periods, respectively, ended June 27 and May 2, 2006. The prior year predecessor net loss was impacted by $23.4 million of transaction-related expenses. These prior year transaction
expenses were partially offset by lower restaurant operating margins, increased depreciation, amortization and interest expense related to the purchase of the Company, and increased tax expense due to our change in tax status to a C Corporation.

Twenty-Six Weeks Ended June 26, 2007 Compared to June 27, 2006

Net Product Sales.Net product sales for the twenty-six weeks ended June 26, 2007 were not impacted by the purchase accounting adjustments and
compared to the twenty-six weeks ended June 27, 2006 were $335.9 million and $303.4 million, respectively, an increase of $32.5 million, or 10.7%, resulting largely from a 7.5% increase in weighted average stores in operation due to
acquisitions and development, with comparable store sales increasing 2.0%, rolling over last years comparable store sales decline of 0.8%.

Fees and Other Income.Fees and other income were not impacted by the purchase accounting adjustments and were $9.2 million for the twenty-six weeks ended June 26, 2007, compared to $8.2 million for the twenty-six weeks ended
June 27, 2006, for an increase of 11.2%. The increase is primarily due to higher delivery fees attributable to increased full time equivalent units and increased delivery transactions.



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Cost of Sales.Cost of sales was not impacted by the purchase accounting adjustments and was $89.4
million for the twenty-six weeks ended June 26, 2007, compared to $77.6 million for the twenty-six weeks ended June 27, 2006, for an increase of $11.8 million or 15.3%. Cost of sales increased 1.0%, as a percentage of net product sales, to
26.6%, compared to 25.6% in the prior year, primarily due to certain promotional activity in the current year-to-date period and some unfavorable product mix changes. Cheese prices, net of UFPC hedging benefits, escalated significantly in the second
quarter and were 3.7% unfavorable year-to-date compared to last year while meat prices were slightly favorable by 0.5% compared to last year.

Direct Labor.Direct labor costs were not impacted by the purchase accounting adjustments and for the twenty-six weeks ended June 26, 2007 as compared to June 27, 2006 were $95.3 million and $84.5 million, respectively, an
increase of $10.8 million, or 12.8%. Direct labor costs increased 0.6%, as a percentage of net product sales, to 28.4% compared to 27.8% in the prior year primarily due to higher wage rates (caused in part by certain state minimum wage increases),
which were not fully offset by productivity increases, due in part to increased traffic versus the prior year in the more labor intensive delivery segment and some inefficiencies associated with the 59 store acquisition occurring on March 13,
2007. The prior year also included a $1.0 million favorable adjustment for health insurance reserves, which accounted for approximately half of the margin difference.

Other Restaurant Operating Expenses.Other restaurant operating expenses for the twenty-six weeks ended June 26, 2007 were $110.5 million compared to $28.7 million and $66.0 million for the successor and
predecessor periods ended June 27 and May 2, 2006, respectively. Other restaurant operating expenses were 32.9% of net product sales for the twenty-six weeks ended June 26, 2007 compared to 32.3% and 30.8% of net product sales for the
prior year successor and predecessor periods, respectively. The successor period increased over the prior year largely due to higher depreciation and amortization resulting from the purchase accounting adjustments and increased rent expense related
to the third and fourth quarter 2006 sale leaseback transactions which were partially offset by decreases in store-level bonuses due to lower restaurant operating profit than last year.

General and Administrative Expenses.General and administrative expenses for the twenty-six weeks ended June 26, 2007 were $19.1 million
compared to $5.2 million and $24.4 million for the successor and predecessor periods, respectively, ended June 27 and May 2, 2006. Predecessor general and administrative expenses included $11.9 million in accelerated deferred compensation
expense incurred as a result of the termination of the Executive Deferred Compensation Plan as required by the Transactions and $0.8 million of related professional fees. Net of these items, general and administrative expenses increased $2.2 million
compared to the prior year. The increase is primarily due to increased personnel and related costs for field supervisory support positions and credit card discount and bank fees associated with the Nashville and Mountain West acquisitions and $0.3
million in acquisition related expenses for integration of the 59 stores purchased during the first quarter of 2007. Professional fees associated with our transition to increased public reporting requirements and amortization of the annual MLGPE
management fee also contributed to the increase.

Corporate Depreciation and Amortization.Corporate depreciation and amortization
costs for the twenty-six weeks ended June 26, 2007 were $6.2 million compared to $1.9 million and $2.1 million for the successor and predecessor periods, respectively, ended June 27 and May 2, 2006. The increase during the successor
period is due to increased franchise rights and other intangibles amortization expense and increased depreciation expense primarily associated with the transaction-related purchase accounting adjustments to fixed assets.

Net Facility Impairment Charges.Facility impairment charges were not impacted by the purchase accounting adjustments. We recorded charges of $0.3
million for 13 properties during the twenty-six weeks ended June 26, 2007 and $0.3 million for eight properties during the twenty-six weeks ended June 27, 2006.

Gain on Disposition of Assets.Gain on asset dispositions was $0.5 million for the twenty-six weeks ended June 26, 2007 and June 27,
2006 and was not impacted by the purchase accounting adjustments.

Interest Expense.Interest expense was $19.1 million for the
twenty-six weeks ended June 26, 2007 compared to $6.1 million and $3.7 million for the successor and predecessor periods, respectively, ended June 27 and May 2, 2006. The successor period increase was due to higher average debt
levels resulting from the Transactions and increased amortization of deferred debt issuance costs of $0.6 million.

Loss on Early
Termination of Debt. During the predecessor period, a loss of approximately $11.3 million resulted from the $10.4 million make-whole payment made on our $100.0 million senior notes and write-off of $0.9 million of unamortized debt issue costs
associated with the early termination of our debt which was extinguished on the close date of the Transactions.

Miscellaneous.Miscellaneous income was minimal for the twenty-six weeks ended June 26, 2007 compared to $0.6 million expense for the twenty-six weeks ended June 27, 2006, and was not impacted by the purchase accounting adjustments.



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Income Taxes.From January 1, 2003 through May 2, 2006, the Company was an S Corporation
for income tax purposes. As of May 3, 2006, the Company became a C Corporation. No income tax provisions were recorded in any periods presented in this report prior to May 3, 2006. For the twenty-six weeks ended June 26, 2007, we
recorded income tax expense of $1.8 million which resulted in an effective income tax rate of 32.0% compared to income tax expense of $0.5 million or an effective tax rate of 35.0% during the prior year successor period. Our annual projected
effective tax rate was reduced from the prior year to 32.0% as a result of higher permanent deductions due to a recently implemented tax deductible food donation program and lower taxable income.

Net Income.Net income for the twenty-six weeks ended June 26, 2007 was $3.8 million, compared to net income of $0.9 million for the
successor period and a net loss of $1.6 million for the predecessor period in fiscal 2006. Prior year results were impacted by $24.0 million of transaction-related expenses. These prior year transaction expenses were partially offset by lower
restaurant operating margins, increased depreciation, amortization and interest expense related to the purchase of the company, increased professional fees incurred related to our increased public reporting requirements, amortization of the MLGPE
management fee and increased tax expense due to our change in tax status to a C Corporation.

Liquidity and Sources of Capital

Our short-term and long-term liquidity needs will arise primarily from: (1) interest and principal payments related to our senior secured credit
facility and the senior subordinated notes; (2) capital expenditures, including those for our re-imaging plan, maintenance capital expenditures, and the introduction of the WingStreet concept at certain existing locations;
(3) opportunistic acquisitions of Pizza Hut restaurants or other acquisition opportunities; and (4) working capital requirements as may be needed to support our business. We intend to fund our operations, interest expense, capital
expenditures, acquisitions and working capital requirements principally from cash from operations and our revolving credit facility. Future acquisitions, depending on the size, may require borrowings beyond those available on our existing revolving
credit facility and therefore may require utilization of the additional borrowing capacity under our Term B credit facility as well as other sources of debt or additional equity capital.

Our working capital primarily consists of cash and cash equivalents, accounts receivable, inventory, prepaid expenses, current deferred income tax,
accounts payable, accrued expenses and income taxes receivable/payable and was a deficit of $43.0 million as of June 26, 2007. Like most restaurant companies, we are a cash business with low levels of inventories and accounts receivable.
Because our sales are primarily cash and we receive credit from our suppliers, we operate on a net working capital deficit. Further, receivables are not a significant asset in the restaurant business and inventory turnover is rapid. Therefore,
historically we have used available liquid assets to reduce borrowings under our revolving line of credit.

At June 26, 2007, we had
$50.5 million of borrowing capacity available under our revolving line of credit net of $24.5 million of outstanding letters of credit. We will consider additional sources of financing to fund our long-term growth if necessary, including $100.0
million of term loan capacity available under our existing credit facility.

Cash flows from operating activities

Cash from operations is our primary source of funds. Changes in earnings and working capital levels are the two key factors that generally have the
greatest impact on cash from operations. Our operating activities provided net cash inflows of $36.3 million for the twenty-six weeks ended June 26, 2007 and $21.3 million and $22.7 million for the successor and predecessor periods,
respectively, in fiscal 2006. Cash flows from operations during the twenty-six weeks ended June 26, 2007, were impacted by lower earnings (after excluding $24.0 million in prior year transaction related expenses) which were the result of higher
interest expense, lower restaurant operating margins and taxes. Cash from operations benefited from changes in working capital during the eight-week period ended June 27, 2006, which resulted in exceptionally strong cash flow results for the
period. However, cash flow from operations during the predecessor period was negatively impacted by an $8.8 million reduction in working capital due to the timing of expenditures related to payroll and accounts payable as well as the required
payment of accrued interest on the our pre-acquisition debt which was extinguished prior to closing the Transactions.

Cash flows from investing
activities

Cash flows used in investing activities were $40.0 million during the twenty-six weeks ended June 26, 2007 and $484.1
million and $13.1 million for the successor and predecessor periods of 2006, respectively. During the twenty-six weeks ended June 26, 2007, we completed an acquisition of 59 stores for $27.3 million (including capitalized acquisition costs of
$0.2 million), and received proceeds from asset sales of $0.9 million. We also invested $13.5 million in capital expenditures, consisting of $12.3 million in our existing operations and $1.2 million for information technology equipment for the 59
store acquisition. These expenditures were partially funded by $2.0 million in proceeds from sale-leaseback transactions as reported in financing activities, for a net capital expenditure investment of $11.5 million year-to-date.

Under our location franchise agreements, we were eligible for reduced royalty rates of 2.5% for remodels completed prior to July 2006. Accordingly,
during the twenty-six weeks ended June 27, 2006 we invested approximately $20.0 million in capital expenditures, primarily undertaken to ensure maximum royalty relief for the subject property asset remodels, and received proceeds of $1.3
million from the sale of assets. We timely completed all such planned major remodel activity as required by the deadline. Remaining cash used in investing activities during the eight weeks ended June 27, 2006 consisted of costs relating to the
Transaction totaling $478.6 million.



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We expect to invest between $41.5 million to $44.5 million in capital expenditures during fiscal 2007,
which we anticipate to partially fund with approximately $9.5 million of related asset sale-leaseback proceeds, based on the current estimated construction costs, resulting in a net estimated capital expenditure investment of $32.0 million to $35.0
million. We are significantly ahead of schedule on our asset re-image, rebuild/remodel requirements and have the option to reduce capital expenditures at managements discretion to increase free cash flow and remain comfortably in compliance
with our franchise agreements.

Pizza Hut, Inc. recently introduced an incentive program that will allow franchisees to defer major asset
actions to December 31, 2014, two years beyond the original deadline of December 31, 2012. As a result of these changes, and our previous accelerated completion rate, we expect to reduce our capital expenditure investment, net of
anticipated sale-leaseback proceeds, to between $25 million and $28 million in 2008, not including acquisitions.

Cash flows from financing activities

Net financing cash outflows were $0.6 million for the twenty-six weeks ended June 26, 2007, net inflows were $460.8 million for
the successor period in 2006, and net outflows were $9.3 million for the predecessor period. Net pay-downs under the revolving credit facility were $2.5 million year-to-date through second quarter 2007, despite borrowing approximately $11.0 million
to partially fund our acquisition of 59 stores on March 13, 2007 and paying $0.1 million in debt issue costs. We received proceeds of $2.0 million for assets sold in the sale-leaseback transactions of two properties during 2007. The prior year
successor period inflows were primarily impacted by $624.7 million of proceeds obtained to finance the Transactions, net of debt issue costs and payment of predecessor debt of $143.9 million. We also voluntarily paid down $20.0 million of term bank
facilities with excess cash from operations and the utilization of cash reserves on the balance sheet during this same period. Cash used in financing activities during the predecessor period consisted primarily of borrowings under the revolving
credit facility, payments on bank term facilities, distribution to our prior stockholders and the $10.4 million make-whole payment on early termination of debt in conjunction with the Transactions.

We anticipate that we will be required to make an excess cash flow mandatory prepayment on our Term Loan B Note not later than 120 days after our 2007
fiscal year-end. We anticipate this mandatory prepayment based on projected 2007 results will range from $10.0 million to $15.0 million depending upon the amount of excess cash flow generated during the fiscal year and our leverage at fiscal
year-end each of which is defined in the credit agreement. We made a voluntary prepayment of $3.0 million on July 16, 2007, which will reduce our total prepayment required.

Letters of Credit

As of June 26, 2007, we had letters of credit, in the amount of $24.5
million, issued under our existing credit facility primarily in support of self-insured risks and franchise agreement obligations.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

We are exposed to various market risks. Market risk is the potential loss arising from adverse changes in market prices and rates. We do not enter into derivative or other financial instruments for trading or speculative purposes.

Interest Rate Risk. Our primary market risk exposure is interest rate risk. All of our borrowings under our new senior secured
credit facility bear interest at a floating rate. As of June 26, 2007, we had $254.2 million in funded floating rate debt outstanding under our senior secured credit facility. We entered into a $140.0 million amortizing fixed to
floating rate interest rate swap at a fixed rate of 5.39% on June 6, 2006 (which had an unamortized balance of $125.0 million at June 26, 2007) leaving us with $129.2 million of floating rate debt at June 26, 2007. Accordingly,
our net income will be affected by changes in interest rates. After giving effect to the swap, a 1.0% increase in this floating rate would have increased interest expense on a pro forma basis for the twenty-six weeks ended June 26, 2007 and
June 27, 2006 by approximately $0.6 million for each period.

Commodity Prices. Commodity prices of foods such as meat,
cheese and wheat, can vary. The prices of these commodities can change throughout the year due to changes in supply and demand. Cheese and meat costs have historically represented approximately 30% and 13% of our cost of sales, respectively. We are
a member of the UFPC, and take advantage of their hedging and procurement programs to help reduce the volatility of commodity prices from period to period. Based on information provided by the UFPC, as of June 26, 2007, approximately 44% of the
Pizza Hut Systems anticipated cheese purchases are hedged for the balance of the fiscal year at prices significantly below the average block cheese price during the first six weeks of our third fiscal quarter. In addition, approximately 30% of
the Pizza Hut Systems anticipated cheese volume has been hedged for fiscal year 2008 using similar UFPC hedging strategies. The estimated increase in our food costs from a hypothetical $0.10 adverse change in the average cheese block price per
pound would have been approximately $1.8 million and $1.7 million for the twenty-six weeks ended June 26, 2007 and June 27, 2006, respectively, without giving effect to the UFPC hedging programs.



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##### Table of Contents

|Item 4. | Controls and Procedures.
|------- | ------------------------

Evaluation of
disclosure controls and procedures.As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended (Exchange Act). Based upon that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date to provide reasonable assurance that the information required to be disclosed in the reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal
controls over financial reporting.There has been no change in our internal control over financial reporting that occurred during our second fiscal quarter of 2007 that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.



|Item 4T. | Controls and Procedures.
|-------- | ------------------------

Not applicable.



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PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------

From time to time, the Company
is involved in litigation, most of which is incidental to the business. In the Companys opinion, no litigation to which the Company is party is likely to have a material adverse effect on the Companys financial condition, results of
operations, or cash flows.



|Item 1A. | Risk Factors.
|-------- | -------------

There have been no material changes
in our risk factors from those disclosed in our 2006 Form 10-K.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.
|------- | ------------------------------------------------------------

Not applicable.



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------

Not applicable.



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

Not applicable.



|Item 5. | Other Information.
|------- | ------------------

Not applicable.



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|Item 6. | Exhibits, Financial Statement Schedules
|------- | ---------------------------------------



|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNo. |  | Document Description                                                                                                                                                                                                                                                                                                                                                                                                              
|2.1*       |  | Stock Purchase Agreement dated as of March 3, 2006 among NPC Acquisition Holdings, LLC, NPC International, Inc. and the stockholders of NPC International, Inc. named
therein                                                                                                                                                                                                                                                     
|           | 
|2.2*       |  | Merger Agreement dated as of May 3, 2006 between Hawk-Eye Pizza, LLC and NPC Management, Inc.                                                                                                                                                                                                                                                                                                                                     
|           | 
|3.1*       |  | Amended and Restated Articles of Incorporation of NPC International, Inc.                                                                                                                                                                                                                                                                                                                                                         
|           | 
|3.2*       |  | Bylaws of NPC International, Inc.                                                                                                                                                                                                                                                                                                                                                                                                 
|           | 
|4.1*       |  | Indenture dated as of May 3, 2006 among NPC International, Inc., NPC Management, Inc. and Wells Fargo Bank, National Association, related to the issue of the 91/2% Senior Subordinated Notes due 2014                                                                                                                                                                                                                            
|           | 
|4.2*       |  | Form of 91/2% Senior Subordinated Note due 2014 (included in
Exhibit 4.1)                                                                                                                                                                                                                                                                                                                                                         
|           | 
|4.3*       |  | Registration Rights Agreement dated as of May 3, 2006 among NPC International, Inc., NPC Management, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc.                                                                                                                                                                                                                                     
|           | 
|10.1*      |  | Hawk-Eye Interests Purchase Agreement, dated as of May 3, 2006, among NPC International, Inc., Oread Capital Holdings, LLC and Troy D. Cook                                                                                                                                                                                                                                                                                       
|           | 
|10.2*      |  | Credit Agreement dated as of May 3, 2006 among NPC International, Inc., NPC Acquisition Holdings, LLC as a Guarantor, the other Guarantors party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, Collateral Agent and Issuing Bank, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Syndication Agent, Bank of America, N.A. and Sun Trust Bank, as Co-Documentation Agents, and the Lenders signatory
thereto
|           | 
|10.3*      |  | Distribution Agreement, dated as of January 5, 2004, between McLane Foodservice, Inc. and NPC International, Inc.                                                                                                                                                                                                                                                                                                                 
|           | 
|10.4*      |  | Advisory Agreement, dated as of May 3, 2006, among NPC International, Inc., NPC Acquisition Holdings, LLC and Merrill Lynch Global Partners, Inc.                                                                                                                                                                                                                                                                                 
|           | 
|10.5*      |  | Employment Agreement, dated as of May 3, 2006, among NPC International, Inc., NPC Acquisition Holdings, LLC and James K. Schwartz                                                                                                                                                                                                                                                                                                 
|           | 
|10.6*      |  | Employment Agreement, dated as of May 3, 2006, among NPC International, Inc., NPC Acquisition Holdings, LLC and Troy D. Cook                                                                                                                                                                                                                                                                                                      
|           | 
|10.7*      |  | NPC International, Inc. Deferred Compensation and Retirement Plan                                                                                                                                                                                                                                                                                                                                                                 
|           | 
|10.8*      |  | NPC International, Inc. POWR Plan for Key Employees                                                                                                                                                                                                                                                                                                                                                                               
|           | 
|10.9*      |  | Form of Location Franchise Agreement dated as of January 1, 2003 between Pizza Hut, Inc. and NPC Management, Inc.                                                                                                                                                                                                                                                                                                                 
|           | 
|10.10*     |  | Form of Territory Franchise Agreement dated as of January 1, 2003 between Pizza Hut, Inc. and NPC Management, Inc.                                                                                                                                                                                                                                                                                                                
|           | 
|10.11*     |  | Purchase Agreement and Escrow Instructions dated as of August 26, 2006 between Realty Income Corporation and NPC International, Inc.                                                                                                                                                                                                                                                                                              
|           | 
|10.12*     |  | Purchase Agreement dated as of April 25, 2006 among Merrill Lynch & Co. and J.P. Morgan Securities Inc., as representative for the initial purchasers, NPC International, Inc, and NPC
Management, Inc.                                                                                                                                                                                                                           
|           | 
|10.13      |  | Pizza Hut National Purchasing Coop, Inc. Membership Subscription and Commitment Agreement (incorporated herein by reference to the Registrants Annual Report on Form 10-K filed with
the Commission on May 28, 1999)                                                                                                                                                                                                             



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|       |  |                                                                                                                                                                                                                                                           
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       | 
|10.14* |  | ISDA Master Agreement dated as of June 6, 2006 between Merrill Lynch Capital Services, Inc. and NPC International, Inc.                                                                                                                                   
|       | 
|10.15  |  | NPC Acquisition Holdings, LLC Management Option Plan (including forms of executive and director option agreements) dated January 24, 2007, filed January 25, 2007 as Exhibit 10.1 to the
Companys Current Report on Form 8-K is incorporated by reference
|       | 
|31.1** |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the period ended June 26, 2007                                                                                                                     
|       | 
|31.2** |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the period ended June 26, 2007                                                                                                                     
|       | 
|32.1** |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                         
|       | 
|32.2** |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                         



|* | Filed as an exhibit with corresponding number to the registrants registration statement on Forms S-4 (File No. 333-138338) and incorporated herein by reference
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



|** | Filed herewith
|-- | --------------



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on August 10, 2007.



NPC INTERNATIONAL, INC.By:

/s/ Troy D. CookName:

Troy D. CookTitle:

Executive Vice PresidentFinance, Chief Financial
Officer, Secretary and Treasurer (Principal Finance Officer)By:

/s/ Susan G. DechantName:

Susan G. DechantTitle:

Vice PresidentAdministration and Chief Accounting
Officer (Principal Accounting Officer)




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