CANTON, Mass., Feb. 4,
2016 /PRNewswire/ --
Fiscal year 2015 highlights include:
- Dunkin' Donuts U.S. comparable store sales growth of
1.4%
- Baskin-Robbins U.S. comparable store sales growth of
6.1%
- Added 495 net new restaurants worldwide, including 349 net
new Dunkin' Donuts in the U.S. which reflects the closing of 81
Speedway self-serve coffee stations
- Revenues increased 8.3%
- Diluted EPS decreased 34.5% to $1.08 which reflects a $54.3 million, or $0.56 per share, impairment of the Company's
investment in its joint venture in Japan
- Diluted adjusted EPS increased 10.9% to $1.93
- More than 150 million Dunkin' K-Cup® pods sold into grocery
channel since launch in May
2015
Fourth quarter highlights include:
- Dunkin' Donuts U.S. comparable store sales decline of
0.8%
- Baskin-Robbins U.S. comparable store sales growth of
4.4%
- Added 172 net new restaurants worldwide, including 123 net
new Dunkin' Donuts in the U.S. which reflects the closing of 41
Speedway self-serve coffee stations
- Revenues increased 5.5%
- Diluted EPS decreased $0.60 to
a loss of $0.10 which reflects a
$54.3 million, or $0.58 per share, impairment of the Company's
investment in its joint venture in Japan
- Diluted adjusted EPS increased 13.0% to $0.52
Dunkin' Brands Group, Inc. (Nasdaq: DNKN), the parent company of
Dunkin' Donuts (DD) and Baskin-Robbins (BR), today reported results
for the fourth quarter and fiscal year ended December 26,
2015.
"For the year, we met or exceeded our financial performance
targets including delivering nearly 10 percent adjusted operating
income growth and 11 percent adjusted earnings per share growth. In
addition to these achievements, we grew the Dunkin' Donuts U.S.
restaurant footprint at greater than five percent, launched Dunkin'
K-Cup® pods into thousands of retail and online outlets nationwide,
continued the remarkable turnaround of Baskin-Robbins U.S., and
completed a successful debt refinancing at an attractive fixed
interest rate," said Dunkin' Brands Chairman and Chief Executive
Officer Nigel Travis. "The Dunkin'
Donuts U.S. comparable store sales growth performance was
disappointing. To help drive positive Dunkin' Donuts transactions
in 2016 and the years beyond, we have begun executing against a
strategic plan designed to enable us to deliver an even better
guest experience through stronger product innovation, leading
technologies to enhance convenience such as on-the-go mobile
ordering, and targeted, compelling value offers."
"We're proud to have returned more than $725 million to shareholders in 2015 and nearly
$1.6 billion since going public in
2011. As a further demonstration of our confidence in the business
and our commitment to delivering shareholder value, we announced
this morning that our Board of Directors increased our quarterly
dividend by 13 percent over the prior quarter and increased the
authorization available under our existing share buyback program,"
said Paul Carbone, Chief Financial
Officer, Dunkin' Brands Group, Inc.
FISCAL YEAR 2015 KEY FINANCIAL HIGHLIGHTS
($ in millions,
except per share data)
|
Fiscal year
ended
|
|
Increase
(Decrease)
|
Amounts and
percentages may not recalculate due to rounding
|
December 26,
2015
|
December 27,
2014
|
|
$ /
#
|
%
|
Franchisee-reported
sales1
|
$
|
10,141.2
|
|
9,751.3
|
|
|
390.0
|
|
4.0
|
%
|
Systemwide sales
growth
|
4.1
|
%
|
5.1
|
%
|
|
|
|
Comparable store
sales growth (decline):
|
|
|
|
|
|
DD
U.S.2
|
1.4
|
%
|
1.7
|
%
|
|
|
|
BR
U.S.2
|
6.1
|
%
|
4.9
|
%
|
|
|
|
DD
International
|
0.5
|
%
|
(2.0)
|
%
|
|
|
|
BR
International
|
(1.9)
|
%
|
(1.2)
|
%
|
|
|
|
Development
data:
|
|
|
|
|
|
Consolidated global
net POD development3
|
495
|
|
704
|
|
|
(209)
|
|
(29.7)
|
%
|
DD global PODs at
period end
|
11,750
|
|
11,310
|
|
|
440
|
|
3.9
|
%
|
BR global PODs at
period end
|
7,607
|
|
7,552
|
|
|
55
|
|
0.7
|
%
|
Consolidated global
PODs at period end
|
19,357
|
|
18,862
|
|
|
495
|
|
2.6
|
%
|
Financial
data:
|
|
|
|
|
|
Revenues
|
$
|
810.9
|
|
748.7
|
|
|
62.2
|
|
8.3
|
%
|
Operating
income
|
319.6
|
|
338.9
|
|
|
(19.3)
|
|
(5.7)
|
%
|
Operating income
margin
|
39.4
|
%
|
45.3
|
%
|
|
|
|
Adjusted operating
income4
|
$
|
400.5
|
|
366.0
|
|
|
34.5
|
|
9.4
|
%
|
Adjusted operating
income margin4
|
49.4
|
%
|
48.9
|
%
|
|
|
|
Net income
|
$
|
105.2
|
|
176.4
|
|
|
(71.1)
|
|
(40.3)
|
%
|
Adjusted net
income4
|
187.9
|
|
186.1
|
|
|
1.8
|
|
1.0
|
%
|
Earnings per
share:
|
|
|
|
|
|
Common–basic
|
1.10
|
|
1.67
|
|
|
(0.57)
|
|
(34.1)
|
%
|
Common–diluted
|
1.08
|
|
1.65
|
|
|
(0.57)
|
|
(34.5)
|
%
|
Diluted adjusted
earnings per share4
|
1.93
|
|
1.74
|
|
|
0.19
|
|
10.9
|
%
|
Weighted average
number of common shares – diluted (in millions)
|
97.1
|
|
106.7
|
|
|
(9.6)
|
|
(9.0)
|
%
|
|
1
Franchisee-reported sales include sales at franchisee-operated
restaurants, including joint ventures. While we do not record sales
by franchisees or licensees as revenue and such sales are not
included in our consolidated financial statements, we believe that
this operating measure is important in obtaining an understanding
of our financial performance. We believe franchisee-reported sales
information aids in understanding how we derive royalty revenue and
in evaluating our performance relative to competitors.
|
|
2
Comparable store sales growth for DD U.S. and BR U.S. for the
fiscal year ended December 27, 2014 have been revised to include
only those restaurants that have been open at least 78 weeks
(approximately 18 months) to conform to the current period
calculation, whereas previously reported figures included only
those restaurants that were open at least 54 weeks (approximately
12 months). Please refer to "Non-GAAP Measures and Statistical
Data" for further detail.
|
|
3
Consolidated global net POD development for the fiscal year ended
December 26, 2015 reflects the previously-announced closing of 81
self-serve coffee stations within Speedway locations.
|
|
4 Adjusted
operating income, adjusted operating income margin, and adjusted
net income are non-GAAP measures reflecting operating income and
net income adjusted for amortization of intangible assets,
long-lived asset impairments, impairment of joint ventures, and
other non-recurring, infrequent, or unusual charges, net of the tax
impact of such adjustments in the case of adjusted net income.
Diluted adjusted earnings per share is a non-GAAP measure
calculated using adjusted net income. Please refer to "Non-GAAP
Measures and Statistical Data" and "Dunkin' Brands Group, Inc.
Non-GAAP Reconciliations" for further detail.
|
|
FOURTH QUARTER 2015 KEY FINANCIAL HIGHLIGHTS
($ in millions,
except per share data)
|
Three months
ended
|
|
Increase
(Decrease)
|
Amounts and
percentages may not recalculate due to rounding
|
December 26,
2015
|
December 27,
2014
|
|
$ /
#
|
%
|
Franchisee-reported
sales1
|
$
|
2,518.9
|
|
2,463.1
|
|
|
55.8
|
|
2.3
|
%
|
Systemwide sales
growth
|
2.3
|
%
|
4.5
|
%
|
|
|
|
Comparable store
sales growth (decline):
|
|
|
|
|
|
DD
U.S.2
|
(0.8)
|
%
|
1.5
|
%
|
|
|
|
BR
U.S.2
|
4.4
|
%
|
9.4
|
%
|
|
|
|
DD
International
|
(0.8)
|
%
|
0.3
|
%
|
|
|
|
BR
International
|
(2.7)
|
%
|
(2.2)
|
%
|
|
|
|
Development
data:
|
|
|
|
|
|
Consolidated global
net POD development3
|
172
|
|
260
|
|
|
(88)
|
|
(33.8)
|
%
|
DD global PODs at
period end
|
11,750
|
|
11,310
|
|
|
440
|
|
3.9
|
%
|
BR global PODs at
period end
|
7,607
|
|
7,552
|
|
|
55
|
|
0.7
|
%
|
Consolidated global
PODs at period end
|
19,357
|
|
18,862
|
|
|
495
|
|
2.6
|
%
|
Financial
data:
|
|
|
|
|
|
Revenues
|
$
|
203.8
|
|
193.2
|
|
|
10.6
|
|
5.5
|
%
|
Operating
income
|
43.5
|
|
89.7
|
|
|
(46.2)
|
|
(51.5)
|
%
|
Operating income
margin
|
21.3
|
%
|
46.4
|
%
|
|
|
|
Adjusted operating
income4
|
$
|
103.9
|
|
96.7
|
|
|
7.2
|
|
7.5
|
%
|
Adjusted operating
income margin4
|
51.0
|
%
|
50.1
|
%
|
|
|
|
Net income
(loss)
|
$
|
(8.9)
|
|
52.5
|
|
|
(61.5)
|
|
n/m
|
Adjusted net
income4
|
48.9
|
|
48.2
|
|
|
0.7
|
|
1.5
|
%
|
Earnings (loss) per
share:
|
|
|
|
|
|
Common–basic
|
(0.10)
|
|
0.50
|
|
|
(0.60)
|
|
n/m
|
Common–diluted
|
(0.10)
|
|
0.50
|
|
|
(0.60)
|
|
n/m
|
Diluted adjusted
earnings per share4
|
0.52
|
|
0.46
|
|
|
0.06
|
|
13.0
|
%
|
Weighted average
number of common shares – diluted adjusted (in
millions)5
|
94.1
|
|
105.7
|
|
|
(11.6)
|
|
(10.9)
|
%
|
|
1
Franchisee-reported sales include sales at franchisee-operated
restaurants, including joint ventures. While we do not record sales
by franchisees or licensees as revenue and such sales are not
included in our consolidated financial statements, we believe that
this operating measure is important in obtaining an understanding
of our financial performance. We believe franchisee-reported sales
information aids in understanding how we derive royalty revenue and
in evaluating our performance relative to competitors.
|
|
2
Comparable store sales growth for DD U.S. and BR U.S. for the three
months ended December 27, 2014 have been revised to include only
those restaurants that have been open at least 78 weeks
(approximately 18 months) to conform to the current period
calculation, whereas previously reported figures included only
those restaurants that were open at least 54 weeks (approximately
12 months). Please refer to "Non-GAAP Measures and Statistical
Data" for further detail.
|
|
3
Consolidated global net POD development for the three months ended
December 26, 2015 reflects the previously-announced closing of 41
self-serve coffee stations within Speedway locations.
|
|
4 Adjusted
operating income, adjusted operating income margin, and adjusted
net income are non-GAAP measures reflecting operating income and
net income adjusted for amortization of intangible assets,
long-lived asset impairments, impairment of joint ventures, and
other non-recurring, infrequent, or unusual charges, net of the tax
impact of such adjustments in the case of adjusted net income.
Diluted adjusted earnings per share is a non-GAAP measure
calculated using adjusted net income. Please refer to "Non-GAAP
Measures and Statistical Data" and "Dunkin' Brands Group, Inc.
Non-GAAP Reconciliations" for further detail.
|
|
5 Diluted
weighted average number of common shares for the three months ended
December 26, 2015, for the purpose of calculating diluted adjusted
earnings per share, includes 920,503 incremental dilutive shares
that are excluded from earnings per share as calculated in
accordance with GAAP as they would be anti-dilutive.
|
|
Global systemwide sales growth in the fourth quarter was
primarily attributable to global store development.
The decline in Dunkin' Donuts U.S. comparable store sales in the
fourth quarter was driven by a decline in traffic offset by an
increase in ticket. Ticket increased approximately 20 basis points
while traffic declined by approximately 100 basis points. The
in-restaurant K-Cup and packaged coffee categories continued to
have a negative impact on comparable store sales. In the fourth
quarter the impact was approximately 120 basis points.
Baskin-Robbins U.S. comparable store sales growth was driven by
increased sales of cups and cones, beverages, desserts, and sundaes
and increased sales of cakes, stimulated by strong year-over-year
growth of online cake ordering. Comparable store sales growth
was driven primarily by traffic.
In the fourth quarter, Dunkin' Brands franchisees and licensees
opened 172 net new restaurants around the globe. This included 123
net new Dunkin' Donuts U.S. locations, 59 net new Dunkin' Donuts
International locations, and 15 net new Baskin-Robbins U.S.
locations, and 25 net closures for Baskin-Robbins International.
The Dunkin' Donuts U.S. net store growth number reflects the
previously-announced closing of 41 self-serve coffee stations
within Speedway locations. Additionally, Dunkin' Donuts U.S.
franchisees remodeled 157 restaurants and Baskin-Robbins U.S.
franchisees remodeled 41 restaurants during the quarter.
Revenues for the fourth quarter increased 5.5% compared to the
prior year period due primarily to an increase in royalty income as
a result of systemwide sales growth, licensing fees earned from the
sale of Dunkin' K-Cup® pods, and increases in franchise fees due to
favorable development mix, transfer fee income, and sales at
company-operated restaurants due to a net increase in the number of
company-operated restaurants. These increases were offset by a
decrease in sales of ice cream and other products.
Operating income for the fourth quarter decreased $46.2 million, or 51.5%, from the prior year
period primarily as a result of an impairment of the Company's
investment in its Japan joint
venture of $54.3 million, an increase
in general and administrative expenses, and an increase in net
losses incurred from company-operated restaurants. These items were
offset by the increase in royalty income, licensing fees earned
from the sale of Dunkin' K-Cup® pods, and increases in franchise
fees and transfer fee income. The Japan joint venture impairment recorded in the
fourth quarter of 2015 resulted from an other-than-temporary
decline in the value of the Company's investment, as a result of
various factors including the continued declines in the operating
performance of the joint venture and reduced future expectations of
the Baskin-Robbins business in Japan.
Adjusted operating income for the fourth quarter increased
$7.2 million, or 7.5%, from the prior
year period primarily as a result of the increase in royalty
income, licensing fees earned from the sale of Dunkin' K-Cup® pods,
and increases in franchise fees and transfer fee income. The
increases in revenues were offset by an increase in general and
administrative expenses and an increase in net losses incurred from
company-operated restaurants.
Net income for the fourth quarter decreased by $61.5 million to a net loss of $8.9 million compared to the prior year period
primarily as a result of the $46.2
million decrease in operating income, an increase in tax
expense of $7.8 million as the prior
year period was favorably impacted by tax benefits resulting from a
restructuring of our Canadian subsidiaries, as well as additional
interest expense of $8.1 million
driven by additional borrowings incurred in conjunction with the
securitization refinancing transaction completed in January 2015.
Adjusted net income for the fourth quarter increased by
$0.7 million, or 1.5%, compared to
the fourth quarter of 2014, primarily as a result of the
$7.2 million increase in adjusted
operating income, a decrease in tax expense, and the impact of
unfavorable foreign exchange in the prior year period, offset by
the increase in interest expense.
Diluted earnings per share decreased by $0.60 to a loss of $0.10 for the fourth quarter of 2015 compared to
the prior year period as a result of the decrease in net income,
offset by a decrease in shares outstanding. Diluted adjusted
earnings per share increased by 13.0% to $0.52 for the fourth quarter of 2015 compared to
the prior year period as a result of the increase in adjusted net
income and the decrease in shares outstanding. The decrease in
shares outstanding from the prior year period is due primarily to
the repurchase of shares, offset by the exercise of stock
options.
FOURTH QUARTER 2015 SEGMENT RESULTS
Amounts and
percentages may not recalculate due to rounding
|
|
Three months
ended
|
|
Increase
(Decrease)
|
Dunkin' Donuts
U.S.
|
|
December 26,
2015
|
|
December 27,
2014
|
|
$ /
#
|
%
|
|
($ in thousands
except as otherwise noted)
|
Comparable store
sales growth (decline)1
|
|
(0.8)
|
%
|
|
1.5
|
%
|
|
|
|
Systemwide sales
growth
|
|
3.6
|
%
|
|
6.6
|
%
|
|
|
|
Franchisee-reported
sales (in millions)2
|
|
$
|
1,952.4
|
|
|
1,885.5
|
|
|
66.9
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Royalty
income
|
|
$
|
106,478
|
|
|
102,181
|
|
|
4,297
|
|
4.2
|
%
|
Franchise
fees
|
|
12,912
|
|
|
10,254
|
|
|
2,658
|
|
25.9
|
%
|
Rental
income
|
|
23,243
|
|
|
23,036
|
|
|
207
|
|
0.9
|
%
|
Sales at
company-operated restaurants
|
|
6,762
|
|
|
5,887
|
|
|
875
|
|
14.9
|
%
|
Other
revenues
|
|
3,662
|
|
|
2,719
|
|
|
943
|
|
34.7
|
%
|
Total
revenues
|
|
$
|
153,057
|
|
|
144,077
|
|
|
8,980
|
|
6.2
|
%
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
$
|
115,603
|
|
|
106,536
|
|
|
9,067
|
|
8.5
|
%
|
|
|
|
|
|
|
|
|
Points of
distribution
|
|
8,431
|
|
|
8,082
|
|
|
349
|
|
4.3
|
%
|
Gross
openings
|
|
185
|
|
|
179
|
|
|
6
|
|
3.4
|
%
|
Net
openings3
|
|
123
|
|
|
141
|
|
|
(18)
|
|
(12.8)
|
%
|
|
1
Comparable store sales growth for the three months ended December
27, 2014 have been revised to include only those restaurants that
have been open at least 78 weeks (approximately 18 months) to
conform to the current period calculation. Please refer to
"Non-GAAP Measures and Statistical Data" for further
detail.
|
|
2
Franchisee-reported sales include sales at franchisee-operated
restaurants, including joint ventures. We do not record sales by
franchisees or licensees as revenue and such sales are not included
in our consolidated financial statements. Please refer to "Non-GAAP
Measures and Statistical Data" for further detail.
|
|
3 Net
openings for the three months ended December 26, 2015 reflects the
previously-announced closing of 41 self-serve coffee stations
within Speedway locations.
|
|
Dunkin' Donuts U.S. fourth quarter revenues of $153.1 million represented an increase of 6.2%
over the prior year period. The increase was primarily a result of
increased royalty income due to an increase in systemwide sales, as
well as an increase in franchise fees due primarily to favorable
development mix. Also contributing to revenue growth were increases
in other revenues, driven primarily by an increase in transfer fee
income, and in sales at company-operated restaurants driven by a
net increase in the number of company-operated restaurants.
Dunkin' Donuts U.S. segment profit in the fourth quarter
increased $9.1 million over the prior
year period to $115.6 million, which
was driven primarily by growth in royalty income, franchise fees,
and other revenues. Also contributing to the increase in segment
profit were a decrease in personnel costs and an increase in other
operating income due to a gain recognized in connection with the
sale of real estate, offset by an increase in losses incurred from
company-operated restaurants.
Amounts and
percentages may not recalculate due to rounding
|
|
Three months
ended
|
|
Increase
(Decrease)
|
Dunkin' Donuts
International
|
|
December 26,
2015
|
|
December 27,
2014
|
|
$ /
#
|
%
|
|
($ in thousands
except as otherwise noted)
|
Comparable store
sales growth (decline)
|
|
(0.8)
|
%
|
|
0.3
|
%
|
|
|
|
Systemwide sales
growth (decline)
|
|
(6.1)
|
%
|
|
2.5
|
%
|
|
|
|
Franchisee-reported
sales (in millions)1
|
|
$
|
172.4
|
|
|
183.6
|
|
|
(11.2)
|
|
(6.1)
|
%
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Royalty
income
|
|
$
|
4,018
|
|
|
4,144
|
|
|
(126)
|
|
(3.0)
|
%
|
Franchise
fees
|
|
2,310
|
|
|
2,553
|
|
|
(243)
|
|
(9.5)
|
%
|
Rental
income
|
|
—
|
|
|
8
|
|
|
(8)
|
|
(100.0)
|
%
|
Other
revenues
|
|
20
|
|
|
(16)
|
|
|
36
|
|
n/m
|
Total
revenues
|
|
$
|
6,348
|
|
|
6,689
|
|
|
(341)
|
|
(5.1)
|
%
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
$
|
3,577
|
|
|
4,346
|
|
|
(769)
|
|
(17.7)
|
%
|
|
|
|
|
|
|
|
|
Points of
distribution
|
|
3,319
|
|
|
3,228
|
|
|
91
|
|
2.8
|
%
|
Gross
openings
|
|
133
|
|
|
140
|
|
|
(7)
|
|
(5.0)
|
%
|
Net
openings
|
|
59
|
|
|
46
|
|
|
13
|
|
28.3
|
%
|
|
1
Franchisee-reported sales include sales at franchisee-operated
restaurants, including joint ventures. We do not record sales by
franchisees or licensees as revenue and such sales are not included
in our consolidated financial statements. Please refer to "Non-GAAP
Measures and Statistical Data" for further detail.
|
|
Dunkin' Donuts International fourth quarter systemwide sales
decreased 6.1% from the prior year period. Sales declines in
South Korea and Colombia were offset by sales growth in
Asia, Europe, and the Middle East. Sales in South Korea, South
America, Asia, and
Europe were negatively impacted by
unfavorable foreign exchange rates. On a constant currency basis,
systemwide sales increased by approximately 2%.
Dunkin' Donuts International fourth quarter revenues of
$6.3 million represented a decrease
of 5.1% from the prior year period. The decreases in revenues were
primarily a result of decreases in franchise fees, driven by a
decline in franchise renewal income, as well as a decrease in
royalty income.
Segment profit for Dunkin' Donuts International decreased
$0.8 million to $3.6 million in the fourth quarter primarily as a
result of the decreases in revenues and a decrease in net income
from our South Korea joint
venture, as well as an increase in general and administrative
expenses.
Amounts and
percentages may not recalculate due to rounding
|
|
Three months
ended
|
|
Increase
(Decrease)
|
Baskin-Robbins
U.S.
|
|
December 26,
2015
|
|
December 27,
2014
|
|
$ /
#
|
%
|
|
($ in thousands
except as otherwise noted)
|
Comparable store
sales growth1
|
|
4.4
|
%
|
|
9.4
|
%
|
|
|
|
Systemwide sales
growth
|
|
5.6
|
%
|
|
12.7
|
%
|
|
|
|
Franchisee-reported
sales (in millions)2
|
|
$
|
108.8
|
|
|
103.1
|
|
|
5.7
|
|
5.5
|
%
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Royalty
income
|
|
$
|
5,221
|
|
|
5,090
|
|
|
131
|
|
2.6
|
%
|
Franchise
fees
|
|
323
|
|
|
178
|
|
|
145
|
|
81.5
|
%
|
Rental
income
|
|
745
|
|
|
815
|
|
|
(70)
|
|
(8.6)
|
%
|
Sales of ice cream
and other products
|
|
345
|
|
|
801
|
|
|
(456)
|
|
(56.9)
|
%
|
Other
revenues
|
|
2,092
|
|
|
1,585
|
|
|
507
|
|
32.0
|
%
|
Total
revenues
|
|
$
|
8,726
|
|
|
8,469
|
|
|
257
|
|
3.0
|
%
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
$
|
3,733
|
|
|
4,485
|
|
|
(752)
|
|
(16.8)
|
%
|
|
|
|
|
|
|
|
|
Points of
distribution
|
|
2,503
|
|
|
2,484
|
|
|
19
|
|
0.8
|
%
|
Gross
openings
|
|
29
|
|
|
26
|
|
|
3
|
|
11.5
|
%
|
Net openings
(closings)
|
|
15
|
|
|
(2)
|
|
|
17
|
|
n/m
|
|
1
Comparable store sales growth for the three months ended December
27, 2014 have been revised to include only those restaurants that
have been open at least 78 weeks (approximately 18 months) to
conform to the current period calculation. Please refer to
"Non-GAAP Measures and Statistical Data" for further
detail.
|
|
2
Franchisee-reported sales include sales at franchisee-operated
restaurants, including joint ventures. We do not record sales by
franchisees or licensees as revenue and such sales are not included
in our consolidated financial statements. Please refer to "Non-GAAP
Measures and Statistical Data" for further detail.
|
|
Baskin-Robbins U.S. fourth quarter revenue increased 3.0% from
the prior year period to $8.7 million
due primarily to an increase in other revenues, driven by an
increase in licensing income, and increases in franchise fees and
royalty income, offset by a decrease in sales of ice cream and
other products. The fluctuations in licensing income and sales of
ice cream and other products can be attributed to a shift in
certain franchisees now purchasing ice cream directly from our
third party ice cream manufacturer.
Segment profit for Baskin-Robbins U.S. decreased $0.8 million in the fourth quarter, or 16.8%,
from the prior year period primarily as a result of an increase in
general and administrative expenses due primarily to expenses
incurred related to brand-building activities and increased
personnel costs, offset by the increases in other revenues,
franchise fees, and royalty income.
Amounts and
percentages may not recalculate due to rounding
|
|
Three months
ended
|
|
Increase
(Decrease)
|
Baskin-Robbins
International
|
|
December 26,
2015
|
|
December 27,
2014
|
|
$ /
#
|
%
|
|
($ in thousands
except as otherwise noted)
|
Comparable store
sales decline
|
|
(2.7)
|
%
|
|
(2.2)
|
%
|
|
|
|
Systemwide sales
decline
|
|
(1.9)
|
%
|
|
(8.4)
|
%
|
|
|
|
Franchisee-reported
sales (in millions)1
|
|
$
|
285.3
|
|
|
290.9
|
|
|
(5.6)
|
|
(1.9)
|
%
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Royalty
income
|
|
$
|
1,296
|
|
|
1,714
|
|
|
(418)
|
|
(24.4)
|
%
|
Franchise
fees
|
|
283
|
|
|
477
|
|
|
(194)
|
|
(40.7)
|
%
|
Rental
income
|
|
109
|
|
|
133
|
|
|
(24)
|
|
(18.0)
|
%
|
Sales of ice cream
and other products
|
|
26,424
|
|
|
27,409
|
|
|
(985)
|
|
(3.6)
|
%
|
Other
revenues
|
|
28
|
|
|
178
|
|
|
(150)
|
|
(84.3)
|
%
|
Total
revenues
|
|
$
|
28,140
|
|
|
29,911
|
|
|
(1,771)
|
|
(5.9)
|
%
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
$
|
8,753
|
|
|
9,084
|
|
|
(331)
|
|
(3.6)
|
%
|
|
|
|
|
|
|
|
|
Points of
distribution
|
|
5,104
|
|
|
5,068
|
|
|
36
|
|
0.7
|
%
|
Gross
openings
|
|
157
|
|
|
153
|
|
|
4
|
|
2.6
|
%
|
Net openings
(closings)
|
|
(25)
|
|
|
75
|
|
|
(100)
|
|
n/m
|
|
1
Franchisee-reported sales include sales at franchisee-operated
restaurants, including joint ventures. We do not record sales by
franchisees or licensees as revenue and such sales are not included
in our consolidated financial statements. Please refer to "Non-GAAP
Measures and Statistical Data" for further detail.
|
|
Baskin-Robbins International systemwide sales decreased 1.9% in
the fourth quarter compared to the prior year period driven by
sales declines in South Korea,
Japan, Puerto Rico, and Russia, offset by sales growth in the
Middle East and Asia. Sales in South
Korea and Japan were
negatively impacted by unfavorable foreign exchange rates. On a
constant currency basis, systemwide sales increased by
approximately 5%.
Baskin-Robbins International fourth quarter revenues decreased
5.9% from the prior year period to $28.1
million due primarily to a decrease in sales of ice cream
and other products in the Middle
East, as well as decreases in royalty income and franchise
fees.
Fourth quarter segment profit decreased 3.6% from the prior year
period to $8.8 million as a result of
a reduction in income from our South
Korea joint venture and decreases in royalty income, net
margin on ice cream due primarily to the decline in sales, and
franchise fees, as well as an increase in net loss from our
Japan joint venture. The decreases
in segment profit were offset by a reduction in general and
administrative expenses, including decreases in personnel and
advertising costs.
COMPANY UPDATES
- The Company today announced that the Board of Directors
declared a first quarter cash dividend of $0.30 per share, payable on March 16, 2016 to shareholders of record as of
the close of business on March 7,
2016.
- The Company also announced today that its Board of Directors
increased the availability under the existing share buyback program
to $200 million of the Company's
outstanding common stock. The authorization is valid until
February 2018.
- During the fourth quarter, the Company repurchased
approximately 2.5 million shares of common stock under the
$125 million accelerated share
repurchase ("ASR") agreement that it entered into in October 2015. Upon final settlement of the ASR
agreement during the first quarter of 2016, the Company received
nearly 500,000 additional shares. Under the agreement, including
the settlement during the first quarter of 2016, the Company
repurchased a total of approximately 3.0 million shares at a
weighted average cost per share of $41.51. The Company's shares outstanding as of
December 26, 2015 were
92,641,044.
FISCAL YEAR 2016 TARGETS
As described below, the
Company is providing the following targets regarding its 2016
performance:
- The Company expects Dunkin' Donuts U.S. comparable store sales
growth of 0 to 2 percent and Baskin-Robbins U.S. comparable store
sales growth of 1 to 3 percent.
- The Company expects that Dunkin' Donuts U.S. will add between
430 and 460 net new restaurants, for greater than 5 percent net
unit growth, and expects Baskin-Robbins U.S. will add between 5 and
10 net new restaurants. The Dunkin' Donuts U.S. net development
target excludes the previously-announced closing of self-serve
coffee stations within Speedway locations. The Company expects
approximately 30 of these self-serve coffee stations to close in
2016.
- Internationally, the Company targets opening approximately 200
net new restaurants across the two brands. It expects net income of
equity method investments to be slightly less than 2015 full-year
results.
- The Company expects revenue growth of between 4 and 6 percent;
adjusted operating income growth of between 8 and 10 percent; and
adjusted earnings per share of $2.17 to
$2.19. Fiscal year 2015 is a 53-week year for the Company.
The target ranges for revenue and adjusted operating income growth
are applicable on both a 52- and 53-week basis. The adjusted
earnings per share range is on a 52-week basis and assumes
94,000,000 shares outstanding and a 38.5 percent tax rate. The
impact of the 53rd week on adjusted earnings per share is
approximately $0.03.
Conference Call
As previously announced, Dunkin' Brands will be holding a
conference call today at 8:00 am ET
hosted by Nigel Travis, Chairman
& Chief Executive Officer, and Paul
Carbone, Chief Financial Officer. The dial-in number is
(866) 393-1607 or (914) 495-8556, conference number 26154028.
Dunkin' Brands will broadcast the conference call live over the
Internet at http://investor.dunkinbrands.com. A replay of the
conference call will be available on the Company's website at
http://investor.dunkinbrands.com.
The Company's consolidated statements of operations, condensed
consolidated balance sheets, condensed consolidated statements of
cash flows and other additional information have been provided with
this press release. This information should be reviewed in
conjunction with this press release.
Forward-Looking Statements
Certain statements contained herein are not based on historical
fact and are "forward-looking statements" within the meaning of the
applicable securities laws and regulations. Generally, these
statements can be identified by the use of words such as
"anticipate," "believe," "could," "estimate," "expect," "feel,"
"forecast," "intend," "may," "plan," "potential," "project,"
"should," "would," and similar expressions intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. By their
nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may
or may not occur in the future. These risk and uncertainties
include, but are not limited to: the ongoing level of profitability
of franchisees and licensees; our franchisees' and licensees'
ability to sustain same store sales growth; changes in
working relationships with our franchisees and licensees and the
actions of our franchisees and licensees; our master franchisees'
relationships with sub-franchisees; the strength of our brand in
the markets in which we compete; changes in competition within the
quick-service restaurant segment of the food industry; changes in
consumer behavior resulting from changes in technologies or
alternative methods of delivery; economic and political conditions
in the countries where we operate; our substantial indebtedness;
our ability to protect our intellectual property rights; consumer
preferences, spending patterns and demographic trends; the impact
of seasonal changes, including weather effects, on our business;
the success of our growth strategy and international development;
changes in commodity and food prices, particularly coffee, dairy
products and sugar, and other operating costs; shortages of coffee;
failure of our network and information technology systems;
interruptions or shortages in the supply of products to our
franchisees and licensees; the impact of food borne-illness or food
safety issues or adverse public or media opinions regarding the
health effects of consuming our products; our ability to collect
royalty payments from our franchisees and licensees; the ability of
our franchisees and licensees to open new restaurants and keep
existing restaurants in operation; our ability to retain key
personnel; any inability to protect consumer credit card data and
catastrophic events.
Forward-looking statements reflect management's analysis as of
the date of this press release. 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 most recent annual report on Form 10-K. Except as
required by applicable law, we do not undertake to publicly update
or revise any of these forward-looking statements, whether as a
result of new information, future events or otherwise.
Non-GAAP Measures and Statistical Data
In addition to the GAAP financial measures set forth in this
press release, the Company has included certain non-GAAP
measurements such as adjusted operating income, adjusted operating
income margin, adjusted net income, and diluted adjusted earnings
per share, which present operating results on a basis adjusted for
certain items. The Company uses these non-GAAP measures as key
performance measures for the purpose of evaluating performance
internally. We also believe these non-GAAP measures provide our
investors with useful information regarding our historical
operating results. These non-GAAP measures are not intended to
replace the presentation of our financial results in accordance
with GAAP. Use of the terms adjusted operating income, adjusted
operating income margin, adjusted net income, and diluted adjusted
earnings per share may differ from similar measures reported by
other companies. These non-GAAP measures are reconciled from the
respective measures determined under GAAP in the attached tables
"Dunkin' Brands Group, Inc. Non-GAAP Reconciliations."
Additionally, the Company has included metrics such as
franchisee-reported sales, systemwide sales growth, and comparable
store sales growth, which are commonly used statistical measures in
the quick service restaurant industry and are important to
understanding the Company's performance.
Franchisee-reported sales include sales at franchisee-operated
restaurants, including joint ventures. While we do not record sales
by franchisees or licensees as revenue and such sales are not
included in our consolidated financial statements, we believe that
this operating measure is important in obtaining an understanding
of our financial performance. We believe franchisee-reported sales
information aids in understanding how we derive royalty revenue and
in evaluating our performance relative to competitors.
The Company uses "systemwide sales growth" to refer to the
percentage change in sales at both franchisee- and company-operated
restaurants from the comparable period of the prior year. Changes
in systemwide sales are driven by changes in comparable store sales
and changes in the number of restaurants.
The Company uses "DD U.S. comparable store sales growth" and "BR
U.S. comparable store sales growth," which are calculated by
including only sales from franchisee- and company-operated
restaurants that have been open at least 78 weeks and that have
reported sales in the current and comparable prior year week.
Previously, DD U.S. comparable store sales growth and BR U.S.
comparable store sales growth were calculated including only sales
from franchisee- and company-operated restaurants that had been
open at least 54 weeks and that had reported sales in the current
and comparable prior year week. The calculation of this operating
measure was revised in the third quarter of 2015 to more accurately
reflect sales growth at comparable stores by minimizing the impact
of strong new store openings, particularly as we develop in newer
markets. All prior year amounts have been revised to conform to the
78-week calculation. There was no financial statement impact from
revising the calculation of this operating measure.
The Company uses "DD International comparable store sales
growth" and "BR International comparable store sales growth," which
are calculated by including only sales from franchisee- and
company-operated restaurants that have been open at least 54 weeks
and that have reported sales in the current and comparable prior
year week.
Dunkin' K-Cup® pods sales data is from IRI for the
reporting period of May, 2015 through December 27, 2015.
About Dunkin' Brands Group, Inc.
With more than 19,000 points of distribution in more than 60
countries worldwide, Dunkin' Brands Group, Inc. (Nasdaq: DNKN) is
one of the world's leading franchisors of quick service restaurants
(QSR) serving hot and cold coffee and baked goods, as well as
hard-serve ice cream. At the end of the fourth quarter 2015,
Dunkin' Brands' nearly 100 percent franchised business model
included more than 11,700 Dunkin' Donuts restaurants and more than
7,600 Baskin-Robbins restaurants. Dunkin' Brands Group, Inc. is
headquartered in Canton, Mass.
DUNKIN' BRANDS
GROUP, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Operations
|
(In thousands, except
per share data)
|
(Unaudited)
|
|
|
Three months
ended
|
|
Fiscal year
ended
|
|
|
December 26,
2015
|
|
December 27,
2014
|
|
December 26,
2015
|
|
December 27,
2014
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Franchise fees and
royalty income
|
|
$
|
132,841
|
|
|
126,591
|
|
|
513,222
|
|
|
482,329
|
|
Rental
income
|
|
24,139
|
|
|
24,013
|
|
|
100,422
|
|
|
97,663
|
|
Sales of ice cream
and other products(1)
|
|
27,220
|
|
|
28,806
|
|
|
115,252
|
|
|
117,484
|
|
Sales at
company-operated restaurants
|
|
6,762
|
|
|
5,887
|
|
|
28,340
|
|
|
22,206
|
|
Other
revenues(1)
|
|
12,835
|
|
|
7,916
|
|
|
53,697
|
|
|
29,027
|
|
Total
revenues
|
|
203,797
|
|
|
193,213
|
|
|
810,933
|
|
|
748,709
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Occupancy
expenses—franchised restaurants
|
|
13,690
|
|
|
13,565
|
|
|
54,611
|
|
|
53,395
|
|
Cost of ice cream and
other products(1)
|
|
18,867
|
|
|
20,215
|
|
|
76,877
|
|
|
83,129
|
|
Company-operated
restaurant expenses
|
|
7,588
|
|
|
5,915
|
|
|
29,900
|
|
|
22,687
|
|
General and
administrative expenses, net(1)
|
|
56,174
|
|
|
54,536
|
|
|
243,796
|
|
|
226,301
|
|
Depreciation
|
|
5,278
|
|
|
4,976
|
|
|
20,556
|
|
|
19,779
|
|
Amortization of other
intangible assets
|
|
6,146
|
|
|
6,638
|
|
|
24,688
|
|
|
25,760
|
|
Long-lived asset
impairment charges
|
|
359
|
|
|
205
|
|
|
623
|
|
|
1,484
|
|
Total operating costs
and expenses
|
|
108,102
|
|
|
106,050
|
|
|
451,051
|
|
|
432,535
|
|
Net income of equity
method investments:
|
|
|
|
|
|
|
|
|
Net income, excluding
impairment
|
|
1,598
|
|
|
2,332
|
|
|
12,555
|
|
|
14,846
|
|
Impairment
charge
|
|
(54,300)
|
|
|
—
|
|
|
(54,300)
|
|
|
—
|
|
Net income (loss) of
equity method investments
|
|
(52,702)
|
|
|
2,332
|
|
|
(41,745)
|
|
|
14,846
|
|
Other operating
income, net
|
|
483
|
|
|
229
|
|
|
1,430
|
|
|
7,838
|
|
Operating
income
|
|
43,476
|
|
|
89,724
|
|
|
319,567
|
|
|
338,858
|
|
Other income
(expense), net:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
100
|
|
|
73
|
|
|
424
|
|
|
274
|
|
Interest
expense
|
|
(24,720)
|
|
|
(16,654)
|
|
|
(96,765)
|
|
|
(68,098)
|
|
Loss on debt
extinguishment and refinancing transactions
|
|
—
|
|
|
—
|
|
|
(20,554)
|
|
|
(13,735)
|
|
Other losses,
net
|
|
(78)
|
|
|
(896)
|
|
|
(1,084)
|
|
|
(1,566)
|
|
Total other expense,
net
|
|
(24,698)
|
|
|
(17,477)
|
|
|
(117,979)
|
|
|
(83,125)
|
|
Income before income
taxes
|
|
18,778
|
|
|
72,247
|
|
|
201,588
|
|
|
255,733
|
|
Provision for income
taxes
|
|
27,725
|
|
|
19,907
|
|
|
96,359
|
|
|
80,170
|
|
Net income (loss)
including noncontrolling interests
|
|
(8,947)
|
|
|
52,340
|
|
|
105,229
|
|
|
175,563
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
(9)
|
|
|
(173)
|
|
|
2
|
|
|
(794)
|
|
Net income (loss)
attributable to Dunkin' Brands
|
|
$
|
(8,938)
|
|
|
52,513
|
|
|
105,227
|
|
|
176,357
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share—basic
|
|
$
|
(0.10)
|
|
|
0.50
|
|
|
1.10
|
|
|
1.67
|
|
Earnings (loss) per
share—diluted
|
|
(0.10)
|
|
|
0.50
|
|
|
1.08
|
|
|
1.65
|
|
|
(1) Sales
of products sold to Dunkin' Donuts International franchisees that
have historically been included in other revenues are now included
in sales of ice cream and other products. The related costs have
historically been included in general and administrative expenses,
net and are now included in cost of ice cream and other products.
Sales and costs from these transactions were reclassified for all
prior periods presented to conform to the current period
presentation.
|
DUNKIN' BRANDS
GROUP, INC. AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
(In
thousands)
|
(Unaudited)
|
|
|
December 26,
2015
|
|
December 27,
2014
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
260,430
|
|
|
208,080
|
|
Restricted
cash
|
|
71,917
|
|
|
—
|
|
Accounts, notes, and
other receivables, net
|
|
128,360
|
|
|
105,060
|
|
Other current
assets(1)
|
|
97,117
|
|
|
80,262
|
|
Total current
assets
|
|
557,824
|
|
|
393,402
|
|
Property and
equipment, net
|
|
182,614
|
|
|
182,061
|
|
Equity method
investments
|
|
106,878
|
|
|
164,493
|
|
Goodwill and other
intangible assets, net
|
|
2,290,796
|
|
|
2,317,167
|
|
Other assets(1)
(2)
|
|
59,007
|
|
|
67,277
|
|
Total
assets
|
|
$
|
3,197,119
|
|
|
3,124,400
|
|
Liabilities,
Redeemable Noncontrolling Interests, and Stockholders' Equity
(Deficit)
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
25,000
|
|
|
3,852
|
|
Accounts
payable
|
|
18,663
|
|
|
13,814
|
|
Other current
liabilities
|
|
375,129
|
|
|
337,853
|
|
Total current
liabilities
|
|
418,792
|
|
|
355,519
|
|
Long-term debt,
net(2)
|
|
2,420,600
|
|
|
1,795,623
|
|
Deferred income
taxes, net(1)
|
|
476,510
|
|
|
498,814
|
|
Other long-term
liabilities
|
|
101,960
|
|
|
99,494
|
|
Total long-term
liabilities
|
|
2,999,070
|
|
|
2,393,931
|
|
Redeemable
noncontrolling interests
|
|
—
|
|
|
6,991
|
|
Total stockholders'
equity (deficit)
|
|
(220,743)
|
|
|
367,959
|
|
Total liabilities,
redeemable noncontrolling interests, and stockholders' equity
(deficit)
|
|
$
|
3,197,119
|
|
|
3,124,400
|
|
|
(1)
Deferred income taxes that have historically been included in other
current assets have been reclassified to other assets and deferred
income taxes, net. The prior period has been revised to conform to
the current period presentation based on the adoption of a new
accounting standard.
|
|
(2) Debt
issuance costs that have historically been included in other assets
have been reclassified to long-term debt, net. The prior period has
been revised to conform to the current period presentation based on
the adoption of a new accounting standard.
|
DUNKIN' BRANDS
GROUP, INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows
|
(In
thousands)
|
(Unaudited)
|
|
|
Fiscal year
ended
|
|
|
December 26,
2015
|
|
December 27,
2014
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
185,566
|
|
|
199,323
|
|
Cash flows from
investing activities:
|
|
|
|
|
Additions to property
and equipment
|
|
(30,246)
|
|
|
(23,638)
|
|
Proceeds from sale of
real estate and company-operated restaurants
|
|
2,693
|
|
|
14,361
|
|
Other, net
|
|
(7,914)
|
|
|
(4,827)
|
|
Net cash used in
investing activities
|
|
(35,467)
|
|
|
(14,104)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
issuance of long-term debt
|
|
2,500,000
|
|
|
—
|
|
Repayment of
long-term debt
|
|
(1,837,824)
|
|
|
(15,000)
|
|
Payment of deferred
financing and other debt-related costs
|
|
(41,350)
|
|
|
(9,213)
|
|
Dividends paid on
common stock
|
|
(100,516)
|
|
|
(96,775)
|
|
Repurchases of common
stock, including accelerated share repurchases
|
|
(625,041)
|
|
|
(130,171)
|
|
Exercise of stock
options
|
|
10,353
|
|
|
5,120
|
|
Change in restricted
cash
|
|
(6,770)
|
|
|
—
|
|
Other, net
|
|
4,292
|
|
|
12,682
|
|
Net cash used in
financing activities
|
|
(96,856)
|
|
|
(233,357)
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
(893)
|
|
|
(715)
|
|
Increase (decrease)
in cash and cash equivalents
|
|
52,350
|
|
|
(48,853)
|
|
Cash and cash
equivalents, beginning of period
|
|
208,080
|
|
|
256,933
|
|
Cash and cash
equivalents, end of period
|
|
$
|
260,430
|
|
|
208,080
|
|
DUNKIN' BRANDS
GROUP, INC. AND SUBSIDIARIES
|
Non-GAAP
Reconciliations
|
(In thousands, except
per share data)
|
(Unaudited)
|
|
|
Three months
ended
|
|
Fiscal year
ended
|
|
|
December 26,
2015
|
|
December 27,
2014
|
|
December 26,
2015
|
|
December 27,
2014
|
Operating
income
|
|
$
|
43,476
|
|
|
89,724
|
|
|
319,567
|
|
|
338,858
|
|
Operating income
margin
|
|
21.3
|
%
|
|
46.4
|
%
|
|
39.4
|
%
|
|
45.3
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
Amortization of other
intangible assets
|
|
$
|
6,146
|
|
|
6,638
|
|
|
24,688
|
|
|
25,760
|
|
Long-lived asset
impairment charges
|
|
359
|
|
|
205
|
|
|
623
|
|
|
1,484
|
|
Third-party product
volume guarantee
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(300)
|
|
Transaction-related
costs(a)
|
|
107
|
|
|
154
|
|
|
424
|
|
|
154
|
|
Japan joint venture
impairment, net(b)
|
|
53,853
|
|
|
—
|
|
|
53,853
|
|
|
—
|
|
Bertico and related
litigation(c)
|
|
—
|
|
|
—
|
|
|
(2,753)
|
|
|
—
|
|
Settlement of
Canadian pension plan(d)
|
|
—
|
|
|
—
|
|
|
4,075
|
|
|
—
|
|
Adjusted operating
income
|
|
$
|
103,941
|
|
|
96,721
|
|
|
400,477
|
|
|
365,956
|
|
Adjusted operating
income margin
|
|
51.0
|
%
|
|
50.1
|
%
|
|
49.4
|
%
|
|
48.9
|
%
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Dunkin' Brands
|
|
$
|
(8,938)
|
|
|
52,513
|
|
|
105,227
|
|
|
176,357
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Amortization of other
intangible assets
|
|
6,146
|
|
|
6,638
|
|
|
24,688
|
|
|
25,760
|
|
Long-lived asset
impairment charges
|
|
359
|
|
|
205
|
|
|
623
|
|
|
1,484
|
|
Third-party product
volume guarantee
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(300)
|
|
Transaction-related
costs(a)
|
|
107
|
|
|
154
|
|
|
424
|
|
|
154
|
|
Japan joint venture
impairment, net(b)
|
|
53,853
|
|
|
—
|
|
|
53,853
|
|
|
—
|
|
Bertico and related
litigation(c)
|
|
—
|
|
|
—
|
|
|
(2,753)
|
|
|
—
|
|
Settlement of
Canadian pension plan(d)
|
|
—
|
|
|
—
|
|
|
4,075
|
|
|
—
|
|
Loss on debt
extinguishment and refinancing transactions
|
|
—
|
|
|
—
|
|
|
20,554
|
|
|
13,735
|
|
Tax impact of
adjustments(e)
|
|
(2,644)
|
|
|
(2,799)
|
|
|
(19,044)
|
|
|
(16,333)
|
|
Tax impact of legal
entity conversion(f)
|
|
—
|
|
|
(8,541)
|
|
|
246
|
|
|
(8,541)
|
|
Income tax audit
settlements(g)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,717)
|
|
State tax
apportionment(h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
514
|
|
Adjusted net
income
|
|
$
|
48,883
|
|
|
48,170
|
|
|
187,893
|
|
|
186,113
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
|
$
|
48,883
|
|
|
48,170
|
|
|
187,893
|
|
|
186,113
|
|
Weighted average
number of common shares – diluted adjusted(i)
|
|
94,124,539
|
|
|
105,687,479
|
|
|
97,131,674
|
|
|
106,705,778
|
|
Diluted adjusted
earnings per share
|
|
$
|
0.52
|
|
|
0.46
|
|
|
1.93
|
|
|
1.74
|
|
|
|
|
|
|
|
|
|
|
(a) Represents
non-capitalizable costs incurred as a result of the new securitized
financing facility, which was completed in January 2015.
|
(b) Amount consists
of an other-than-temporary impairment of the investment in the
Japan joint venture of $54.3 million, less a reduction in
depreciation and amortization of $0.4 million resulting from the
allocation of the impairment charge to the underlying long-lived
assets of the joint venture.
|
(c) Represents a net
reduction to legal reserves for the Bertico litigation and related
matters, as a result of the Quebec Court of Appeals (Montreal)
ruling to reduce the damages assessed against the Company in the
Bertico litigation from approximately C$16.4 million to
approximately C$10.9 million, plus costs and interest.
|
(d) Represents costs
incurred related to the final settlement of our Canadian pension
plan as a result of the closure of our Canadian ice cream
manufacturing plant in fiscal year 2012.
|
(e) Tax impact of
adjustments calculated at a 40% effective tax rate, excluding the
Japan joint venture impairment charge as there was no tax impact
related to that charge.
|
(f) Represents the
net tax impact of converting Dunkin' Brands Canada Ltd. to Dunkin'
Brands Canada ULC.
|
(g) Represents income
tax benefits resulting from the resolution of historical tax
positions settled during the period.
|
(h) Represents tax
expense recognized due to an increase in our overall state tax rate
for a shift in the apportionment of income to certain state
jurisdictions.
|
(i) Diluted weighted
average number of common shares for the three months ended December
26, 2015 includes 920,503 incremental dilutive shares that are
excluded from earnings per share as calculated in accordance with
GAAP as they would be anti-dilutive.
|
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SOURCE Dunkin' Brands Group, Inc.