ANN ARBOR, Mich., Oct. 27, 2015 /PRNewswire/ -- Domino's Pizza,
Inc. (NYSE: DPZ), the recognized world leader in pizza
delivery, announced that it had completed a recapitalization
transaction on October 21, 2015 and
intends to use the majority of the available excess proceeds for an
accelerated share repurchase (ASR) program.
The Company announced an $800
million share repurchase authorization, which replaces its
previous $200 million open market
share repurchase program. As part of the new authorization, the
Company will conduct a $600 million
ASR.
J. Patrick Doyle, Domino's
President and Chief Executive Officer, said: "Our business is
flourishing. We're proud of the ongoing returns this is driving for
both our shareholders and franchisees in the form of share
appreciation, regular dividends, open market share repurchases –
and store profitability. We were also able to use our balance sheet
and strong relationships with lenders to provide an additional
opportunity for shareholders through an accelerated share
repurchase program."
Accelerated Share Repurchase Program
- $600 million program.
- Begins in the fourth quarter of 2015 with expected completion
by the end of the first quarter of 2016.
Recapitalization Elements
- Whole-business securitization refinancing with proceeds of
$1.3 billion in new fixed rate notes
with the following tranches:
- $500 million 3.484% Class A-2-I
notes with an anticipated repayment date of October 2020.
- $800 million 4.474% Class A-2-II
notes with an anticipated repayment date of October 2025.
- The new fixed rate notes have scheduled principal payments of
1% of the principal each year, which equates to approximately
$13 million per year in years
1-5.
- $125 million in variable funding
notes, which were undrawn at closing, subject to approximately
$46.2 million in undrawn letters of
credit. This facility replaces the existing $100 million variable funding note facility.
- Use of proceeds:
- prepay and retire 35% of its existing 2012 notes at par, for
approximately $551 million on
October 26th,
- pay $22 million in amortization
catch-up on the 2012 notes (expected in January 2016),
- pay debt issuance and other costs,
- conduct a $600 million ASR
program as part of the $800 million
authorization, and
- utilize remaining proceeds for general corporate purposes which
may include additional share repurchases.
- $963 million 5.216% 2012 Class
A-2 Notes remain outstanding with an anticipated maturity of
January 2019.
- A $22 million amortization
catch-up payment is expected to be made in January 2016 on these notes.
- An additional $25 million of
principal payments are scheduled to be made in 2016.
- Estimated Fourth Quarter Impacts
- Debt issuance costs of approximately $17
million, to be amortized into interest expense over the
weighted average life of the deal.
- Pre-tax interest expense charges of between $9 and $10 million, in the fourth quarter of
2015.
- These include the write-off of the debt issuance costs related
to the 35% of the 2012 notes that were prepaid and retired, as well
as other interest charges, and will be adjusted out as Items
Affecting Comparability in the fourth quarter.
- Separately, from a non-interest expense perspective, there will
also be approximately $1 million of
other non-capitalized deal costs which will be expensed in the
fourth quarter.
Conference Call Information
Domino's Pizza, Inc. will hold a conference call on
Wednesday, October
28th at 10 a.m.
(Eastern) to review the completed refinancing and use of proceeds.
The call can be accessed by dialing (888) 400-9978
(U.S./Canada) or (706) 634-4947
(International). Ask for the Domino's Pizza conference call. The
call will also be webcast at biz.dominos.com. If you are unable to
participate on the call, a replay will be available for 30 days by
dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (International),
Conference ID 61237765. The webcast will also be archived for 30
days on biz.dominos.com.
About Domino's Pizza®
Founded in 1960, Domino's Pizza is the recognized world leader
in pizza delivery, with a significant business in carryout pizza.
It ranks among the world's top public restaurant brands with a
global enterprise of more than 12,100 stores in over 80
international markets. Domino's had global retail sales of over
$8.9 billion in 2014, comprised of
more than $4.1 billion in the U.S.
and nearly $4.8 billion
internationally. In the third quarter of 2015, Domino's had global
retail sales of over $2.1 billion,
comprised of over $1.0 billion in the
U.S. and over $1.1 billion
internationally. Its system is comprised of independent franchise
owners who accounted for nearly 97% of Domino's stores as of the
third quarter of 2015. Emphasis on technology innovation helped
Domino's generate approximately 50% of U.S. sales from digital
channels at the end of 2014, and reach an estimated run rate of
$4.0 billion annually in global
digital sales. Domino's features an ordering app lineup that covers
nearly 95% of the U.S. smartphone market and has recently
introduced several innovative ordering platforms, including Ford
SYNC®, Samsung Smart TV® and Pebble Watch, as
well as Twitter and text message using a pizza emoji. In
June 2014, Domino's debuted voice
ordering for its iPhone® and Android™ apps, a
true technology first within traditional and e-commerce retail.
Order – www.dominos.com
Mobile – http://mobile.dominos.com
Digital Info –
anyware.dominos.com
Company Info – biz.dominos.com
Twitter –
http://twitter.com/dominos
Facebook
– http://www.facebook.com/dominos
YouTube –
http://www.youtube.com/dominos
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995:
This press release contains forward-looking statements. You can
identify forward-looking statements because they contain words such
as "believes," "expects," "may," "will," "should," "seeks,"
"approximately," "intends," "plans," "estimates," or "anticipates"
or similar expressions that concern our strategy, plans or
intentions. These forward-looking statements relating to our
anticipated profitability, estimates in same store sales growth,
the growth of our international business, ability to service our
indebtedness, our future cash flows, our operating performance,
trends in our business and other descriptions of future events
reflect the Company's expectations based upon currently available
information and data. However, actual results are subject to future
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements. The risks and uncertainties that could cause actual
results to differ materially include: the level of our long-term
and other indebtedness; uncertainties relating to litigation;
consumer preferences, spending patterns and demographic trends; the
effectiveness of our advertising, operations and promotional
initiatives; the strength of our brand in the markets in which we
compete; our ability to retain key personnel; new product, digital
ordering and concept developments by us, and other food-industry
competitors; the ongoing level of profitability of our franchisees;
and our ability and that of our franchisees to open new restaurants
and keep existing restaurants in operation; changes in operating
expenses resulting from changes in prices of food (particularly
cheese), labor, utilities, insurance, employee benefits and other
operating costs; the impact that widespread illness or general
health concerns may have on our business and the economy of the
countries where we operate; severe weather conditions and natural
disasters; changes in our effective tax rate; changes in foreign
currency exchange rates; changes in government legislation and
regulations; adequacy of our insurance coverage; costs related to
future financings; our ability and that of our franchisees to
successfully operate in the current credit environment; changes in
the level of consumer spending given the general economic
conditions including interest rates, energy prices and weak
consumer confidence; availability of borrowings under our variable
funding notes and our letters of credit; the final terms and timing
of completion of the ASR; and changes in accounting policies.
Important factors that could cause actual results to differ
materially from our expectations are more fully described in our
other filings with the Securities and Exchange Commission,
including under the section headed "Risk Factors" in our annual
report on Form 10-K. These forward-looking statements speak only as
of the date of this press release, and you should not rely on such
statements as representing the views of the Company as of any
subsequent date. Except as required by applicable securities laws,
we do not undertake to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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SOURCE Domino's Pizza, Inc.