ANN ARBOR, Mich., Oct. 12, 2017 /PRNewswire/ -- Domino's
Pizza, Inc. (NYSE: DPZ), the recognized world leader in pizza
delivery, today announced results for the third quarter of 2017,
comprised of strong growth in same store sales, global store counts
and earnings per share. Domestic same store sales grew 8.4% during
the quarter versus the year-ago period, which represents the
26th consecutive quarter of positive sales momentum in
the Company's domestic business. International same store sales
grew 5.1% during the quarter, marking the 95th
consecutive quarter of positive international same store sales
growth. The Company had global net store growth of 217 stores in
the quarter, comprised of 53 net new domestic stores and 164 net
new stores internationally, and has added 1,182 net new stores over
the trailing four quarters.
Diluted EPS was $1.18 for the
third quarter, which was up 22.9% over the Company's diluted EPS in
the prior year quarter. Management noted that the as-reported
diluted EPS for the third quarter was negatively impacted by
expenses related to the Company's recapitalization. Diluted EPS, as
adjusted, was $1.27 for the third
quarter, which was up 32.3% over the Company's diluted EPS in the
prior year quarter.
In connection with the Company's recapitalization, as further
discussed below, the Company borrowed $1.9
billion, and used a portion of the proceeds to repay its
remaining debt under its 2012 fixed rate notes. The Company also
entered into a $1.0 billion
accelerated share repurchase (ASR) agreement with a counterparty,
which was completed subsequent to the quarter. In connection with
the ASR agreement, the Company will receive and retire a total of
5,218,670 shares of its common stock at an average price of
$191.62, including 4,558,863 shares
of its common stock received and retired during the third
quarter.
The Company's Board of Directors declared a 46-cent per share quarterly dividend for
shareholders of record as of September 15,
2017 that was paid on September 29,
2017. The Company's Board of Directors also declared a
46-cent per share quarterly dividend
for shareholders of record as of December
15, 2017, to be paid on December 29,
2017.
"The third quarter was an excellent example of us simply
continuing to do what we do best: executing on our long-term
strategy, relying upon our strong fundamentals and aligning with
our outstanding U.S. and international operators to turn in another
quarter of phenomenal results," said J.
Patrick Doyle, Domino's President and Chief Executive
Officer. "The momentum behind this business continues to amaze
me, proving once again that our domestic and international
franchisees are second to none."
Third Quarter Highlights:
(dollars in
millions, except per share data)
|
|
Third
Quarter
of
2017
|
|
|
Third
Quarter
of
2016
|
|
|
Three Fiscal
Quarters of
2017
|
|
|
Three Fiscal
Quarters of
2016
|
|
Net
income
|
|
$
|
56.4
|
|
|
$
|
47.2
|
|
|
$
|
184.6
|
|
|
$
|
141.9
|
|
Weighted average
diluted shares
|
|
|
47,715,788
|
|
|
|
49,242,182
|
|
|
|
49,066,610
|
|
|
|
50,309,217
|
|
Diluted earnings
per share, as reported (1)
|
|
$
|
1.18
|
|
|
$
|
0.96
|
|
|
$
|
3.76
|
|
|
$
|
2.82
|
|
Items affecting
comparability (2)
|
|
|
0.08
|
|
|
|
-
|
|
|
|
0.08
|
|
|
|
-
|
|
Diluted earnings
per share, as adjusted (1) (2)
|
|
$
|
1.27
|
|
|
$
|
0.96
|
|
|
$
|
3.84
|
|
|
$
|
2.82
|
|
|
|
(1)
|
In the first quarter
of 2017, the Company adopted Accounting Standards Update No.
2016-09, Compensation-Stock Compensation (Topic 718):
Improvements to Employee Share-Based Payment Accounting, (ASU
2016-09), which requires the Company to record excess tax benefits
from equity-based compensation as a reduction of the provision for
income taxes in the income statement, whereas they were previously
recognized in equity. See the "Adoption of New Accounting Guidance"
section below for additional information.
|
(2)
|
Refer to the Items
Affecting Comparability section on page three for additional
details. Diluted earnings per share, as adjusted figures may not
sum to the total due to the rounding of each individual
calculation. See also the Comments on Regulation G section on
page four.
|
- Revenues were up 13.6% for the third quarter versus the
prior year period, due primarily to higher supply chain revenues
from increased volumes. Higher same store sales and store count
growth in both our domestic and international markets also
contributed to the increase in revenues.
- Net Income increased 19.3% for the third quarter versus
the prior year period, primarily driven by an increase in same
store sales growth and store count as well as higher supply chain
volumes. The adoption of the new equity-based compensation
accounting standard also positively impacted net income. These
increases were partially offset by higher general and
administrative expenses, primarily from investments in
technological initiatives. Net income was also negatively impacted
by expenses related to the Company's recapitalization.
- Diluted EPS was $1.18 for
the third quarter versus $0.96 in the
prior year quarter, which represents a 22-cent or 22.9% increase over the prior year
quarter. Diluted EPS, as adjusted, was $1.27 for the third quarter versus $0.96 in the prior year quarter, which represents
a 31-cent or 32.3% increase over the
prior year quarter. These increases were driven by higher net
income, as well as lower diluted share count, primarily as a result
of the share repurchases made during the trailing four quarters.
(See the Items Affecting Comparability section on page three
and the Comments on Regulation G section on page four.)
The table below outlines certain statistical measures utilized
by the Company to analyze its performance. Refer to the
Comments on Regulation G section on page four for additional
details.
|
|
Third
Quarter of
2017
|
|
|
Third
Quarter of
2016
|
|
Same store sales
growth: (versus prior year period)
|
|
|
|
|
|
|
|
|
Domestic Company-owned
stores
|
|
|
+ 8.4
|
%
|
|
|
+ 13.8
|
%
|
Domestic franchise
stores
|
|
|
+ 8.4
|
%
|
|
|
+ 12.9
|
%
|
Domestic
stores
|
|
|
+ 8.4
|
%
|
|
|
+ 13.0
|
%
|
International stores
(excluding foreign currency impact)
|
|
|
+ 5.1
|
%
|
|
|
+
6.6
|
%
|
|
|
|
|
|
|
|
|
|
Global retail
sales growth: (versus prior year period)
|
|
|
|
|
|
|
|
|
Domestic
stores
|
|
|
+ 12.0
|
%
|
|
|
+ 16.2
|
%
|
International
stores
|
|
|
+ 16.8
|
%
|
|
|
+ 13.6
|
%
|
Total
|
|
|
+ 14.5
|
%
|
|
|
+ 14.9
|
%
|
|
|
|
|
|
|
|
|
|
Global retail
sales growth: (versus prior year period,
excluding foreign currency impact)
|
|
|
|
|
|
|
|
|
Domestic
stores
|
|
|
+ 12.0
|
%
|
|
|
+ 16.2
|
%
|
International
stores
|
|
|
+ 16.3
|
%
|
|
|
+ 18.1
|
%
|
Total
|
|
|
+ 14.2
|
%
|
|
|
+ 17.2
|
%
|
|
|
Domestic
Company-
owned
Stores
|
|
Domestic
Franchise
Stores
|
|
Total
Domestic
Stores
|
|
International
Stores
|
|
Total
|
Store
counts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store count at June
18, 2017
|
|
|
396
|
|
|
5,042
|
|
|
5,438
|
|
|
8,779
|
|
|
14,217
|
|
Openings
|
|
|
3
|
|
|
52
|
|
|
55
|
|
|
176
|
|
|
231
|
|
Closings
|
|
|
—
|
|
|
(2)
|
|
|
(2)
|
|
|
(12)
|
|
|
(14)
|
|
Store count at
September 10, 2017
|
|
|
399
|
|
|
5,092
|
|
|
5,491
|
|
|
8,943
|
|
|
14,434
|
|
Third quarter 2017 net
change
|
|
|
3
|
|
|
50
|
|
|
53
|
|
|
164
|
|
|
217
|
|
Trailing four quarters
net change
|
|
|
12
|
|
|
206
|
|
|
218
|
|
|
964
|
|
|
1,182
|
|
2017 Recapitalization
On July 24, 2017, the Company completed its
recapitalization with the receipt of $1.9
billion of gross proceeds. The Company borrowed $1.6 billion of fixed rate senior secured notes
and $300.0 million of floating rate
senior secured notes and entered into a new $175.0 million variable funding note facility,
which replaced its previous $125.0
million variable funding note facility. The Company used a
portion of the proceeds from the recapitalization to repay the
remaining $910.5 million in
outstanding principal and interest under its 2012 fixed rate notes
on July 27, 2017.
Additionally, the Board of Directors authorized a new share
repurchase program that allows the Company to repurchase up to
$1.25 billion of its common stock.
This repurchase program replaced the remaining availability of
approximately $136.4 million under
the Company's previously approved $250.0
million share repurchase program. As part of this
$1.25 billion share repurchase
program, the Company entered into a $1.0
billion ASR agreement with a counterparty, which was
completed subsequent to the quarter. In connection with the ASR
agreement, the Company will receive and retire a total of 5,218,670
shares of its common stock at an average price of $191.62, including 4,558,863 shares of its common
stock received and retired during the third quarter. As of
October 12, 2017, the Company had
authorization for repurchases of $250.0
million remaining under its open market share repurchase
program.
The Company incurred certain expenses in connection with the
recapitalization that are outlined in the items affecting
comparability table below. Separately, the Company also recorded
$16.8 million of debt issuance costs,
which are included as a reduction of long-term debt on the
consolidated balance sheet at September 10,
2017 and are expected be amortized into interest expense
over the terms of its fixed and floating rate notes.
Adoption of New Accounting Guidance
The Company adopted ASU 2016-09 in the first quarter of
2017. This standard addresses the accounting for income taxes and
forfeitures and the cash flow presentation of share-based
compensation. The adoption resulted in a $3.5 million decrease in our third quarter 2017
provision for income taxes, or a 4.2 percentage point decrease in
our third quarter 2017 effective tax rate, due to the recognition
of excess tax benefits for options exercised and the vesting of
equity awards. This item positively impacted our diluted EPS by
approximately seven cents in the
third quarter of 2017. Refer to the Company's Form 10-Q for the
quarter ended September 10, 2017 for
additional detailed information regarding the impact of the
adoption of ASU 2016-09.
Conference Call Information
The Company will file its quarterly report on Form 10-Q this
morning. As previously announced, Domino's Pizza, Inc. will
hold a conference call today at 10
a.m. (Eastern) to review its third quarter 2017 financial
results. 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. The webcast will also
be archived for one year on biz.dominos.com.
Items Affecting Comparability
The Company's reported financial results for the third quarter
of 2017 and the three fiscal quarters of 2017 are not comparable to
the reported financial results for the equivalent periods in 2016.
The table below presents certain items that affect comparability
between 2017 and 2016 financial results. Management believes that
including such information is critical to the understanding of its
financial results for the third quarter of 2017 and the three
fiscal quarters of 2017 as compared to the same periods in 2016
(See the Comments on Regulation G section on page four for
additional details).
In addition to the items noted in the table below, the Company
had lower weighted average diluted shares outstanding in 2017 that
resulted in an increase in diluted EPS of approximately
four cents in the third quarter of
2017 and approximately eight cents in
the three fiscal quarters of 2017. The Company also incurred higher
net interest expense in 2017 primarily as a result of higher net
debt levels. The increase in net interest expense resulted in
a decrease in diluted EPS of approximately two cents in the third quarter of 2017 and
one cent in the three fiscal quarters
of 2017.
|
|
Third
Quarter
|
|
Three Fiscal
Quarters
|
|
(in thousands,
except per share data)
|
|
Pre-tax
|
|
After-tax
|
|
Diluted
EPS
Impact
|
|
Pre-tax
|
|
After-tax
|
|
Diluted
EPS
Impact
|
|
2017 items
affecting comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recapitalization
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses (1)
|
|
$
|
(622)
|
|
$
|
(389)
|
|
$
|
(0.01)
|
|
$
|
(622)
|
|
$
|
(389)
|
|
$
|
(0.01)
|
|
Interest expense
(2)
|
|
|
(264)
|
|
|
(165)
|
|
|
(0.00)
|
|
|
(264)
|
|
|
(165)
|
|
|
(0.00)
|
|
Debt issuance cost
write-off (3)
|
|
|
(5,521)
|
|
|
(3,450)
|
|
|
(0.07)
|
|
|
(5,521)
|
|
|
(3,450)
|
|
|
(0.07)
|
|
Total of 2017
items
|
|
$
|
(6,407)
|
|
$
|
(4,004)
|
|
$
|
(0.08)
|
|
$
|
(6,407)
|
|
$
|
(4,004)
|
|
$
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents legal,
professional and administrative fees incurred in connection with
the Company's 2017 recapitalization.
|
(2)
|
Represents interest
expense the Company incurred on its 2012 borrowings subsequent to
the closing of the 2017 recapitalization but prior to the repayment
of the 2012 borrowings, resulting in the payment of interest on
both the 2012 and 2017 facilities for a short period of
time.
|
(3)
|
Represents the
write-off of debt issuance costs related to the extinguishment of
the 2012 debt in connection with the Company's 2017
recapitalization.
|
Liquidity
As of September 10, 2017, the
Company had approximately:
- $61.4 million of unrestricted
cash and cash equivalents;
- $3.16 billion in total debt;
and
- $131.9 million of available
borrowings under its $175.0 million
variable funding notes, net of letters of credit issued of
$43.1 million. The Company has
collateralized all of its letters of credit with restricted cash,
and has the ability to access this cash with minimal notice.
The Company invested $38.9 million
in capital expenditures during the three fiscal quarters of 2017,
versus $38.3 million in the three
fiscal quarters of 2016. Free cash flow, as reconciled below to
cash flows from operations as determined under generally accepted
accounting principles (GAAP), was approximately $183.2 million in the three fiscal quarters of
2017.
(in thousands)
|
|
Three Fiscal
Quarters
of 2017
|
|
Net cash provided by
operating
activities
|
|
$
|
222,138
|
|
Capital
expenditures
|
|
|
(38,897)
|
|
Free cash
flow
|
|
$
|
183,241
|
|
Comments on Regulation G
In addition to the GAAP financial measures set forth in this
press release, the Company has
included non-GAAP financial measures within the meaning
of Regulation G, including free cash flow metrics and measures
related to items affecting comparability between fiscal quarters
and other fiscal periods. The Company has also included metrics
such as global retail sales growth and same store sales growth,
which are commonly used statistical measures in the quick-service
restaurant industry that are important to understanding Company
performance.
The Company uses "Diluted EPS, as adjusted," which is
calculated as reported Diluted EPS adjusted for the items that
affect comparability to the prior year periods discussed above. The
most directly comparable financial measure calculated and presented
in accordance with GAAP is Diluted EPS. The Company believes that
the Diluted EPS, as adjusted measure is important and useful to
investors and other interested persons and that such persons
benefit from having a consistent basis for comparison between
reporting periods. The Company uses Diluted EPS, as adjusted to
internally evaluate operating performance, to evaluate itself
against its peers and in long-range planning. Additionally, the
Company believes that analysts covering the Company's stock
performance generally eliminate these items affecting comparability
when preparing their financial models, when determining their
published EPS estimates and when benchmarking the Company against
its competitors.
The Company uses "Global retail sales" to refer to total
worldwide retail sales at Company-owned and franchise stores. The
Company believes global retail sales information is useful in
analyzing revenues because franchisees pay royalties that are based
on a percentage of franchise retail sales. The Company reviews
comparable industry global retail sales information to assess
business trends and to track the growth of the Domino's
Pizza® brand. In addition, supply chain revenues are
directly impacted by changes in franchise retail sales. Retail
sales for franchise stores are reported to the Company by its
franchisees and are not included in Company revenues.
The Company uses "Same store sales growth," which is
calculated by including only sales from stores that also had sales
in the comparable period of the prior year. International same
store sales growth is calculated similarly to domestic same store
sales growth. Changes in international same store sales are
reported excluding foreign currency impacts, which reflect changes
in international local currency sales.
The Company uses "Free cash flow," which is calculated as
cash flows from operations less capital expenditures, both as
reported under GAAP. The Company believes that the free cash flow
measure is important to investors and other interested persons, and
that such persons benefit from having a measure which communicates
how much cash flow is available for working capital needs or to be
used for repurchasing debt, making acquisitions, repurchasing
common stock, paying dividends or other similar uses of cash.
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 14,400 stores in over 85
international markets. Domino's had global retail sales of nearly
$10.9 billion in 2016, with more than
$5.3 billion in the U.S. and more
than $5.5 billion internationally. In
the third quarter of 2017, Domino's had global retail sales of more
than $2.8 billion, with nearly
$1.4 billion in the U.S. and over
$1.4 billion internationally. Its
system is comprised of independent franchise owners who accounted
for over 97% of Domino's stores as of the third quarter of 2017.
Emphasis on technology innovation helped Domino's reach an
estimated $5.6 billion in global
digital sales in 2016, and has produced several innovative ordering
platforms, including Google Home, Facebook Messenger, Apple Watch,
Amazon Echo, Twitter and text message using a pizza emoji. In late
2017, as part of an industry-first collaboration with Ford Motor
Company, Domino's began a meaningful test of delivery using
self-driving vehicles.
Order – dominos.com
AnyWare Ordering – anyware.dominos.com
Company Info – biz.dominos.com
Twitter – twitter.com/dominos
Facebook – facebook.com/dominos
Instagram – instagram.com/dominos
YouTube – youtube.com/dominos
Please visit our Investor Relations website at biz.dominos.com
to view news, announcements, earnings releases and conference
webcasts.
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;
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 economies 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 consumer
confidence; availability of borrowings under our variable funding
notes and our letters of credit; 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.
TABLES TO FOLLOW
Domino's Pizza,
Inc. and Subsidiaries
Condensed
Consolidated Statements of Income
(Unaudited)
|
|
|
|
Fiscal Quarter
Ended
|
|
|
|
September
10,
2017
|
|
|
%
of
Total
Revenues
|
|
|
September
11,
2016
|
|
|
%
of
Total
Revenues
|
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Company-owned
stores
|
|
$
|
112,905
|
|
|
|
|
|
|
$
|
100,966
|
|
|
|
|
|
Domestic
franchise
|
|
|
80,244
|
|
|
|
|
|
|
|
70,637
|
|
|
|
|
|
Supply
chain
|
|
|
402,143
|
|
|
|
|
|
|
|
355,036
|
|
|
|
|
|
International
franchise
|
|
|
48,350
|
|
|
|
|
|
|
|
40,038
|
|
|
|
|
|
Total
revenues
|
|
|
643,642
|
|
|
|
100.0
|
%
|
|
|
566,677
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Company-owned
stores
|
|
|
86,814
|
|
|
|
|
|
|
|
77,221
|
|
|
|
|
|
Supply
chain
|
|
|
358,350
|
|
|
|
|
|
|
|
315,553
|
|
|
|
|
|
Total cost of
sales
|
|
|
445,164
|
|
|
|
69.2
|
%
|
|
|
392,774
|
|
|
|
69.3
|
%
|
Operating
margin
|
|
|
198,478
|
|
|
|
30.8
|
%
|
|
|
173,903
|
|
|
|
30.7
|
%
|
General and
administrative
|
|
|
81,398
|
|
|
|
12.6
|
%
|
|
|
72,992
|
|
|
|
12.9
|
%
|
Income from
operations
|
|
|
117,080
|
|
|
|
18.2
|
%
|
|
|
100,911
|
|
|
|
17.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(32,529)
|
|
|
|
(5.1)
|
%
|
|
|
(25,097)
|
|
|
|
(4.4)
|
%
|
Income before
provision for income taxes
|
|
|
84,551
|
|
|
|
13.1
|
%
|
|
|
75,814
|
|
|
|
13.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
28,183
|
|
|
|
4.3
|
%
|
|
|
28,582
|
|
|
|
5.1
|
%
|
Net income
|
|
$
|
56,368
|
|
|
|
8.8
|
%
|
|
$
|
47,232
|
|
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock –
diluted
|
|
$
|
1.18
|
|
|
|
|
|
|
$
|
0.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
|
$
|
0.46
|
|
|
|
|
|
|
$
|
0.38
|
|
|
|
|
|
Domino's Pizza,
Inc. and Subsidiaries
Condensed
Consolidated Statements of Income
(Unaudited)
|
|
|
|
Three Fiscal
Quarters Ended
|
|
|
|
September
10,
2017
|
|
|
%
of
Total
Revenues
|
|
|
September
11,
2016
|
|
|
%
of
Total
Revenues
|
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Company-owned
stores
|
|
$
|
338,880
|
|
|
|
|
|
|
$
|
295,243
|
|
|
|
|
|
Domestic
franchise
|
|
|
242,548
|
|
|
|
|
|
|
|
208,463
|
|
|
|
|
|
Supply
chain
|
|
|
1,180,800
|
|
|
|
|
|
|
|
1,029,990
|
|
|
|
|
|
International
franchise
|
|
|
134,242
|
|
|
|
|
|
|
|
119,497
|
|
|
|
|
|
Total
revenues
|
|
|
1,896,470
|
|
|
|
100.0
|
%
|
|
|
1,653,193
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Company-owned
stores
|
|
|
263,038
|
|
|
|
|
|
|
|
223,771
|
|
|
|
|
|
Supply
chain
|
|
|
1,048,293
|
|
|
|
|
|
|
|
916,465
|
|
|
|
|
|
Total cost of
sales
|
|
|
1,311,331
|
|
|
|
69.2
|
%
|
|
|
1,140,236
|
|
|
|
69.0
|
%
|
Operating
margin
|
|
|
585,139
|
|
|
|
30.8
|
%
|
|
|
512,957
|
|
|
|
31.0
|
%
|
General and
administrative
|
|
|
239,158
|
|
|
|
12.6
|
%
|
|
|
209,632
|
|
|
|
12.7
|
%
|
Income from
operations
|
|
|
345,981
|
|
|
|
18.2
|
%
|
|
|
303,325
|
|
|
|
18.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(82,384)
|
|
|
|
(4.3)
|
%
|
|
|
(75,977)
|
|
|
|
(4.5)
|
%
|
Income before
provision for income taxes
|
|
|
263,597
|
|
|
|
13.9
|
%
|
|
|
227,348
|
|
|
|
13.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
79,019
|
|
|
|
4.2
|
%
|
|
|
85,403
|
|
|
|
5.2
|
%
|
Net income
|
|
$
|
184,578
|
|
|
|
9.7
|
%
|
|
$
|
141,945
|
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock –
diluted
|
|
$
|
3.76
|
|
|
|
|
|
|
$
|
2.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
|
$
|
1.38
|
|
|
|
|
|
|
$
|
1.14
|
|
|
|
|
|
Domino's Pizza,
Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets
(Unaudited)
|
|
|
|
September 10,
2017
|
|
|
January 1,
2017
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
61,360
|
|
|
$
|
42,815
|
|
Restricted cash and
cash equivalents
|
|
|
192,001
|
|
|
|
126,496
|
|
Accounts receivable,
net
|
|
|
154,475
|
|
|
|
150,369
|
|
Inventories
|
|
|
37,093
|
|
|
|
40,181
|
|
Advertising fund
assets, restricted
|
|
|
126,340
|
|
|
|
118,377
|
|
Prepaid expenses and
other
|
|
|
21,317
|
|
|
|
17,635
|
|
Total current
assets
|
|
|
592,586
|
|
|
|
495,873
|
|
Property, plant and
equipment, net
|
|
|
139,677
|
|
|
|
138,534
|
|
Other
assets
|
|
|
83,972
|
|
|
|
81,888
|
|
Total
assets
|
|
$
|
816,235
|
|
|
$
|
716,295
|
|
Liabilities and
stockholders' deficit
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
32,313
|
|
|
$
|
38,887
|
|
Accounts
payable
|
|
|
109,756
|
|
|
|
111,510
|
|
Dividends
payable
|
|
|
20,430
|
|
|
|
619
|
|
Advertising fund
liabilities
|
|
|
126,340
|
|
|
|
118,377
|
|
Other accrued
liabilities
|
|
|
109,691
|
|
|
|
134,305
|
|
Total current
liabilities
|
|
|
398,530
|
|
|
|
403,698
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
|
3,128,048
|
|
|
|
2,148,990
|
|
Other accrued
liabilities
|
|
|
55,001
|
|
|
|
46,750
|
|
Total long-term
liabilities
|
|
|
3,183,049
|
|
|
|
2,195,740
|
|
Total stockholders'
deficit
|
|
|
(2,765,344)
|
|
|
|
(1,883,143)
|
|
Total liabilities and
stockholders' deficit
|
|
$
|
816,235
|
|
|
$
|
716,295
|
|
Domino's Pizza,
Inc. and Subsidiaries
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
Three Fiscal
Quarters Ended
|
|
|
|
September
10,
2017
|
|
|
September
11,
2016
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
184,578
|
|
|
$
|
141,945
|
|
Adjustments to
reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
30,054
|
|
|
|
25,460
|
|
Losses on
sale/disposal of assets
|
|
|
648
|
|
|
|
473
|
|
Amortization of debt
issuance costs
|
|
|
9,424
|
|
|
|
4,562
|
|
Provision for deferred
income taxes
|
|
|
5,680
|
|
|
|
2,657
|
|
Non-cash compensation
expense
|
|
|
14,271
|
|
|
|
12,344
|
|
Other
|
|
|
234
|
|
|
|
(406)
|
|
Excess tax benefits
from equity-based compensation
|
|
|
(20,430)
|
|
|
|
(41,479)
|
|
Changes in operating
assets and liabilities
|
|
|
(2,321)
|
|
|
|
17,061
|
|
Net cash provided by
operating activities
|
|
|
222,138
|
|
|
|
162,617
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(38,897)
|
|
|
|
(38,254)
|
|
Changes in restricted
cash
|
|
|
(65,505)
|
|
|
|
57,371
|
|
Other
|
|
|
327
|
|
|
|
2,989
|
|
Net cash provided by
(used in) investing activities
|
|
|
(104,075)
|
|
|
|
22,106
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of long-term debt
|
|
|
1,900,000
|
|
|
|
63,000
|
|
Repayments of
long-term debt and capital lease obligations
|
|
|
(920,093)
|
|
|
|
(77,592)
|
|
Proceeds from exercise
of stock options
|
|
|
4,014
|
|
|
|
12,324
|
|
Excess tax benefits
from equity-based compensation
|
|
|
-
|
|
|
|
41,479
|
|
Purchases of common
stock
|
|
|
(1,012,721)
|
|
|
|
(283,858)
|
|
Tax payments for
restricted stock upon vesting
|
|
|
(9,386)
|
|
|
|
(5,605)
|
|
Payments of common
stock dividends and equivalents
|
|
|
(44,630)
|
|
|
|
(37,548)
|
|
Cash paid for
financing costs
|
|
|
(16,846)
|
|
|
|
-
|
|
Other
|
|
|
(205)
|
|
|
|
-
|
|
Net cash used in
financing activities
|
|
|
(99,867)
|
|
|
|
(287,800)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
349
|
|
|
|
(391)
|
|
Change in cash and
cash equivalents
|
|
|
18,545
|
|
|
|
(103,468)
|
|
Cash and cash
equivalents, at beginning of period
|
|
|
42,815
|
|
|
|
133,449
|
|
Cash and cash
equivalents, at end of period
|
|
$
|
61,360
|
|
|
$
|
29,981
|
|
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SOURCE Domino's Pizza, Inc.