ANN ARBOR, Mich., July 22, 2021 /PRNewswire/ -- Domino's Pizza,
Inc. (NYSE: DPZ), the largest pizza company in the world based
on global retail sales, announced results for the second quarter.
Global retail sales increased 21.6% in the second quarter, or 17.1%
excluding foreign currency impact. U.S. same store sales grew 3.5%
during the quarter versus the year-ago period, continuing the
positive sales momentum in the Company's U.S. stores business. The
international business also posted strong results, with same store
sales growth of 13.9% during the quarter. The second quarter marked
the 110th consecutive quarter of international same
store sales growth and the 41st consecutive quarter of
U.S. same store sales growth. The Company had second quarter global
net store growth of 238 stores, comprised of 35 net U.S. store
openings and 203 net international store openings.
"I am very pleased with our strong global retail sales and store
growth momentum during the second quarter, which demonstrated the
power of our investments in innovation, our focus on food quality
and superior service, and our dynamic franchisees who are dedicated
to serving their local neighborhoods," said Ritch Allison, Domino's Chief Executive Officer.
"Given our current operating environment, we are watching our
two-year sales trends anchored to pre-Covid fiscal 2019
results. I am pleased that in the second quarter our
cumulative two-year same stores sales were up 19.6% domestically
and 15.2% internationally, signifying meaningful and sustained
growth."
Diluted EPS for the second quarter was $3.06, an increase of 2.3% over the prior year
quarter. Second quarter diluted EPS, as adjusted, was $3.12, an increase of 4.3% over the prior year
quarter. Refer to the Financial Results Comparability and
the Comments on Regulation G sections below for additional
information.
In connection with the Company's recapitalization transaction,
as further discussed below, the Company borrowed $1.85 billion, and used a portion of the proceeds
to repay its remaining debt under its 2017 five-year fixed rate and
2017 five-year floating rate notes. The Company also entered into a
$1.0 billion accelerated share
repurchase agreement (the "ASR Agreement") with a counterparty,
which was completed subsequent to the end of the second quarter. In
connection with the ASR Agreement, the Company received and retired
a total of 2,250,786 shares of its common stock at an average price
of $444.29, including 2,012,596
shares of its common stock received and retired during the second
quarter.
Subsequent to the end of the second quarter, on July 20, 2021, the Company's Board of Directors
authorized a new share repurchase program to repurchase up to
$1.0 billion of the Company's common
stock. This repurchase program replaces the Company's previously
approved $1.0 billion share
repurchase program, which was fully utilized in connection with the
ASR Agreement.
Also on July 20, 2021, the
Company's Board of Directors declared a $0.94 per share quarterly dividend on its
outstanding common stock for shareholders of record as of
September 15, 2021 to be paid on
September 30, 2021.
Second Quarter Highlights (Unaudited):
(dollars in
millions, except per share data)
|
|
Second
Quarter
of
2021
|
|
|
Second
Quarter
of
2020
|
|
|
Two
Fiscal
Quarters
of
2021
|
|
|
Two
Fiscal
Quarters
of
2020
|
|
Net
income
|
|
$
|
116.6
|
|
|
$
|
118.7
|
|
|
$
|
234.4
|
|
|
$
|
240.3
|
|
Weighted average
diluted shares
|
|
|
38,122,515
|
|
|
|
39,746,479
|
|
|
|
38,665,325
|
|
|
|
39,688,663
|
|
Diluted
EPS
|
|
$
|
3.06
|
|
|
$
|
2.99
|
|
|
$
|
6.06
|
|
|
$
|
6.05
|
|
Items affecting
comparability (1)
|
|
|
0.06
|
|
|
|
—
|
|
|
|
0.06
|
|
|
|
—
|
|
Diluted EPS, as
adjusted (1)
|
|
$
|
3.12
|
|
|
$
|
2.99
|
|
|
$
|
6.12
|
|
|
$
|
6.05
|
|
|
|
(1)
|
Refer to the
Financial Results Comparability and the Comments on
Regulation G sections below for additional
information.
|
- Revenues increased $112.4
million, or 12.2%, in the second quarter of 2021. This
increase was primarily due to international and U.S. same store
sales growth and increases in global store counts during the
trailing four quarters, resulting in higher supply chain, U.S.
stores and international franchise revenues.
- Net Income decreased $2.0
million, or 1.7%, in the second quarter of 2021. This
decrease was driven by a significantly higher provision for income
taxes resulting from lower tax benefits from equity-based
compensation due to fewer stock option exercises in the second
quarter of 2021 as compared to the second quarter of 2020. Income
before provision for income taxes increased $20.6 million in the second quarter of 2021 due
to higher income from operations resulting from the increases in
revenues described above.
- Diluted EPS was $3.06 for
the second quarter of 2021 versus $2.99 in the second quarter of 2020. This
represents a $0.07, or 2.3%, increase
over the prior year quarter. Diluted EPS, as adjusted, was
$3.12 for the second quarter of 2021.
This represents a $0.13, or 4.3%,
increase over the prior year quarter. The increase in diluted EPS
was driven by a lower weighted average diluted share count
resulting from the Company's share repurchases during the trailing
four quarters, partially offset by lower net income. Refer to the
Financial Results Comparability and the Comments on
Regulation G sections below for additional information.
The table below outlines certain statistical measures utilized
by the Company to analyze its performance (unaudited). Refer to
Comments on Regulation G below for additional details.
|
|
Second
Quarter
of
2021
|
|
|
Second
Quarter
of
2020
|
|
Same store sales
growth: (versus prior year period)
|
|
|
|
|
|
|
|
|
U.S. Company-owned
stores
|
|
|
(2.6)
|
%
|
|
|
+ 16.9
|
%
|
U.S. franchise
stores
|
|
|
+ 3.9
|
%
|
|
|
+ 16.0
|
%
|
U.S. stores
|
|
|
+ 3.5
|
%
|
|
|
+ 16.1
|
%
|
International stores
(excluding foreign currency impact)
|
|
|
+ 13.9
|
%
|
|
|
+ 1.3
|
%
|
|
|
|
|
|
|
|
|
|
Global retail
sales growth: (versus prior year period)
|
|
|
|
|
|
|
|
|
U.S. stores
|
|
|
+ 7.4
|
%
|
|
|
+ 19.9
|
%
|
International
stores
|
|
|
+ 39.7
|
%
|
|
|
(8.1)
|
%
|
Total
|
|
|
+ 21.6
|
%
|
|
|
+ 5.7
|
%
|
|
|
|
|
|
|
|
|
|
Global retail
sales growth: (versus prior year period,
excluding foreign currency impact)
|
|
|
|
|
|
|
|
|
U.S. stores
|
|
|
+ 7.4
|
%
|
|
|
+ 19.9
|
%
|
International
stores
|
|
|
+ 29.5
|
%
|
|
|
(3.4)
|
%
|
Total
|
|
|
+ 17.1
|
%
|
|
|
+ 8.1
|
%
|
|
|
U.S.
Company-
owned
Stores
|
|
|
U.S.
Franchise
Stores
|
|
|
Total
U.S.
Stores
|
|
|
International
Stores
|
|
|
Total
|
|
Store
counts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store count at March
28, 2021
|
|
|
364
|
|
|
|
6,027
|
|
|
|
6,391
|
|
|
|
11,428
|
|
|
|
17,819
|
|
Openings
|
|
|
2
|
|
|
|
37
|
|
|
|
39
|
|
|
|
217
|
|
|
|
256
|
|
Closings
(1)
|
|
|
—
|
|
|
|
(4)
|
|
|
|
(4)
|
|
|
|
(14)
|
|
|
|
(18)
|
|
Store count at June
20, 2021
|
|
|
366
|
|
|
|
6,060
|
|
|
|
6,426
|
|
|
|
11,631
|
|
|
|
18,057
|
|
Second quarter 2021
net store growth
|
|
|
2
|
|
|
|
33
|
|
|
|
35
|
|
|
|
203
|
|
|
|
238
|
|
Trailing four quarters
net store growth
|
|
|
20
|
|
|
|
211
|
|
|
|
231
|
|
|
|
653
|
|
|
|
884
|
|
|
|
(1)
|
Temporary store
closures are not treated as store closures and affected stores are
included in the ending store count. Based on information reported
to the Company by its master franchisees, the Company estimates
that as of June 20, 2021, there were fewer than 175 international
stores temporarily closed.
|
2021 Recapitalization
During the second quarter of 2021, the Company completed a
previously announced $1.85 billion
recapitalization transaction (the "2021 Recapitalization"),
including the issuance by certain of its subsidiaries of
$850.0 million of 2.662% fixed rate
senior secured notes with an anticipated term of 7.5 years and
$1.0 billion of 3.151% fixed rate
senior secured notes with an anticipated term of 10 years
(collectively, the "2021 Notes"). The Company also entered into a
new $200.0 million variable funding
note facility, which was undrawn on the closing date, and the
Company's previous variable funding note facility was canceled.
A portion of proceeds from the 2021 Recapitalization was used to
repay the remaining $291.0 million in
outstanding principal under the Company's then-outstanding 2017
five-year floating rate notes and $582.0
million in outstanding principal under the Company's 2017
five-year fixed rate notes. The proceeds were also used to pre-fund
a portion of the interest payable on the 2021 Notes and pay
transaction fees and expenses. The remaining proceeds were used for
general corporate purposes, which primarily included entering into
the $1.0 billion ASR Agreement, which
was completed subsequent to the end of the second quarter. In
connection with the ASR Agreement, the Company received and retired
a total of 2,250,786 shares of its common stock at an average price
of $444.29, including 2,012,596
shares of its common stock received and retired during the second
quarter.
In connection with the 2021 Recapitalization, the Company
incurred certain expenses that are outlined in the Financial
Results Comparability section below. Additionally, the Company
capitalized $14.9 million of debt
issuance costs, which are being amortized into interest expense
over the expected terms of the 2021 Notes.
Financial Results Comparability
Financial results for the Company can be significantly affected
by changes in its capital structure, its effective tax rate,
adoption of new accounting pronouncements, store portfolio changes,
calendar timing and other factors. The Company's recapitalization
transactions have historically resulted in higher net interest
expense due primarily to higher net debt levels, as well as the
amortization of debt issuance costs associated with the repayment
of certain of the Company's notes. Additionally, repurchases and
retirements of shares of the Company's common stock pursuant to its
share repurchase programs have historically reduced its weighted
average diluted shares outstanding.
In addition to the above factors impacting comparability, the
table below presents certain other items that affect comparability
between the Company's 2021 and 2020 financial results (unaudited).
Management believes that including such information is critical to
an understanding of the Company's financial results for the second
quarter and two fiscal quarters of 2021 as compared to the same
periods in 2020. Refer to the Comments on Regulation G
section below for additional details.
|
|
Fiscal Quarter
Ended June 20, 2021
|
|
|
Two Fiscal
Quarters Ended June 20, 2021
|
|
(in thousands,
except per share data)
|
|
Pre-tax
|
|
|
After-tax
|
|
|
Diluted
EPS
Impact
|
|
|
Pre-tax
|
|
|
After-tax
|
|
|
Diluted
EPS
Impact
|
|
2021 items
affecting comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recapitalization
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses (1)
|
|
$
|
(509)
|
|
|
$
|
(397)
|
|
|
$
|
(0.01)
|
|
|
$
|
(509)
|
|
|
$
|
(397)
|
|
|
$
|
(0.01)
|
|
Interest expense
(2)
|
|
|
(309)
|
|
|
|
(241)
|
|
|
|
(0.01)
|
|
|
|
(309)
|
|
|
|
(241)
|
|
|
|
(0.01)
|
|
Debt issuance cost
write-off (3)
|
|
|
(2,024)
|
|
|
|
(1,581)
|
|
|
|
(0.04)
|
|
|
|
(2,024)
|
|
|
|
(1,581)
|
|
|
|
(0.04)
|
|
Total of 2021
items
|
|
$
|
(2,842)
|
|
|
$
|
(2,219)
|
|
|
$
|
(0.06)
|
|
|
$
|
(2,842)
|
|
|
$
|
(2,219)
|
|
|
$
|
(0.06)
|
|
|
|
(1)
|
Represents legal,
professional and administrative fees incurred in connection with
the 2021 Recapitalization.
|
(2)
|
Represents interest
expense the Company incurred on its 2017 five-year fixed rate notes
and 2017 five-year floating rate notes subsequent to the closing of
the 2021 Recapitalization, but prior to the repayment of the 2017
five-year fixed rate notes and 2017 five-year floating rate notes,
resulting in the payment of interest on both the 2017 five-year
fixed rate notes and 2017 five-year floating rate notes and the
2021 Notes for a short period of time.
|
(3)
|
Represents the
write-off of debt issuance costs related to the extinguishment of
the 2017 five-year fixed rate notes and 2017 five-year floating
rate notes in connection with the 2021 Recapitalization.
|
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 second quarter 2021 financial
results. The call can be accessed by dialing (866) 470-5929
(U.S./Canada) or (409) 217-8311
(International). Ask for the Domino's Pizza conference call, ID
4764356. The call will also be webcast, and will be archived for
one year, on biz.dominos.com.
Share Repurchases
During the second quarter of 2021, the Company repurchased and
retired 2,012,596 shares of its common stock as part of the ASR
Agreement, described in additional detail above.
Subsequent to the end of the second quarter, on July 20, 2021, the Company's Board of Directors
authorized a new share repurchase program to repurchase up to
$1.0 billion of the Company's common
stock. This repurchase program replaces the Company's previously
approved $1.0 billion share
repurchase program which was fully utilized in connection with the
ASR Agreement.
Liquidity
As of June 20, 2021, the Company had approximately:
- $292.1 million of unrestricted
cash and cash equivalents;
- $5.08 billion in total debt;
and
- $157.5 million of available
borrowing capacity under its 2021 variable funding notes, net of
letters of credit issued of $42.5
million.
Net cash provided by operating activities was $295.4 million during the two fiscal quarters of
2021. The Company invested $33.2
million in capital expenditures during the two fiscal
quarters of 2021. Free cash flow, as reconciled below to net cash
provided by operating activities, as determined under accounting
principles generally accepted in the
United States of America ("GAAP"), was approximately
$262.3 million during the two fiscal
quarters of 2021 (refer to Comments on Regulation G
below for additional details).
(in
thousands)
|
|
Two
Fiscal
Quarters
of
2021
|
|
Net cash provided by
operating activities
|
|
$
|
295,415
|
|
Capital
expenditures
|
|
|
(33,163)
|
|
Free cash
flow
|
|
$
|
262,252
|
|
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 such as diluted
EPS, as adjusted. The Company has also included metrics such as
global retail sales, global retail sales growth, global retail
sales growth, excluding foreign currency impact 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 "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 and
advertising fees 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. "Global retail sales growth" is calculated as the
change of U.S. Dollar global retail sales against the comparable
period of the prior year. "Global retail sales growth, excluding
foreign currency impact" is calculated as the change of
international local currency global retail sales against the
comparable period of the prior year.
The Company uses "Same store sales growth," which is
calculated by including only sales from stores that also had sales
in the comparable weeks of both years. International same store
sales growth is calculated similarly to U.S. 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 "Diluted EPS, as adjusted," which is
calculated as reported diluted EPS, adjusted for the items that
affect comparability to the prior year periods. 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, internally to 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 "Free cash flow," which is calculated as
net cash provided by operating activities, 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 or paying dividends.
About Domino's Pizza®
Founded in 1960, Domino's Pizza is the largest pizza company in
the world based on retail sales, with a significant business in
both delivery and carryout pizza. It ranks among the world's top
public restaurant brands with a global enterprise of more than
18,000 stores in over 90 markets. Domino's had global retail sales
of over $16.1 billion in 2020, with
nearly $8.3 billion in the U.S. and
over $7.8 billion internationally. In
the second quarter of 2021, Domino's had global retail sales of
over $4.1 billion, with over
$2.0 billion in the U.S. and over
$2.1 billion internationally. Its
system is comprised of independent franchise owners who accounted
for 98% of Domino's stores as of the end of the second quarter of
2021. Emphasis on technology innovation helped Domino's achieve
more than half of all global retail sales in 2020 from digital
channels. In the U.S., Domino's generated more than 70% of sales in
2020 via digital channels and has developed several innovative
ordering platforms, including those for Google Home, Facebook
Messenger, Apple Watch, Amazon Echo, Twitter and more. In 2019,
Domino's announced a partnership with Nuro to further its
exploration and testing of autonomous pizza delivery. In mid-2020,
Domino's launched a new way to order contactless carryout
nationwide – via Domino's Carside Delivery®, which
customers can choose when placing a prepaid online order.
Order – dominos.com
Company Info – biz.dominos.com
Media Assets – media.dominos.com
Please visit our Investor Relations website at biz.dominos.com
to view news, announcements, earnings releases, investor
presentations and conference webcasts.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995:
This press release contains various forward-looking statements
about the Company within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Act") that are based on current
management expectations that involve substantial risks and
uncertainties which could cause actual results to differ materially
from the results expressed in, or implied by, these forward-looking
statements. The following cautionary statements are being made
pursuant to the provisions of the Act and with the intention of
obtaining the benefits of the "safe harbor" provisions of the Act.
You can identify forward-looking statements by the use of words
such as "anticipates," "believes," "could," "should," "estimates,"
"expects," "intends," "may," "will," "plans," "predicts,"
"projects," "seeks," "approximately," "potential," "outlook" and
similar terms and phrases that concern our strategy, plans or
intentions, including references to assumptions. These
forward-looking statements address various matters including
information concerning future results of operations and business
strategy, our anticipated profitability, estimates in same store
sales growth, the growth of our U.S. and international business,
our 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. While we
believe these expectations and projections are based on reasonable
assumptions, such forward-looking statements are inherently subject
to risks, uncertainties and assumptions. Important factors that
could cause actual results to differ materially from our
expectations are more fully described in our filings with the
Securities and Exchange Commission, including under the section
headed "Risk Factors" in our Annual Report on
Form 10-K for the fiscal year ended January 3, 2021. Actual results may differ
materially from those expressed or implied in the forward-looking
statements as a result of various factors, including but not
limited to: our substantial increased indebtedness as a result of
our recapitalization transactions and our ability to incur
additional indebtedness or refinance or renegotiate key terms of
that indebtedness in the future; the impact a downgrade in our
credit rating may have on our business, financial condition and
results of operations; our future financial performance and our
ability to pay principal and interest on our indebtedness; our
ability to manage difficulties associated with or related to the
COVID-19 pandemic and the effects of COVID-19 on our business and
supply chain; the effectiveness of our advertising, operations and
promotional initiatives; the strength of our brand, including our
ability to compete in the U.S. and internationally in our intensely
competitive industry, including the food service and food delivery
markets; the impact of social media and other consumer-oriented
technologies on our business, brand and reputation; the impact of
new or improved technologies and alternative methods of delivery on
consumer behavior; new product, digital ordering and concept
developments by us, and other food-industry competitors; our
ability to maintain good relationships with and attract new
franchisees, and franchisees' ability to successfully manage their
operations without negatively impacting our royalty payments and
fees or our brand's reputation; our ability to successfully
implement cost-saving strategies; our ability and that of our
franchisees to successfully operate in the current and future
credit environment; changes in the level of consumer spending given
general economic conditions, including interest rates, energy
prices and consumer confidence; 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), fuel and other commodity
costs, labor, utilities, insurance, employee benefits and other
operating costs; the impact that widespread illness, health
epidemics or general health concerns, severe weather conditions and
natural disasters may have on our business and the economies of the
countries where we operate; changes in foreign currency exchange
rates; changes in income tax rates; our ability to retain or
replace our executive officers and other key members of management
and our ability to adequately staff our stores and supply chain
centers with qualified personnel; our ability to find and/or retain
suitable real estate for our stores and supply chain centers;
changes in government legislation and regulations, including
changes in laws and regulations regarding information privacy,
payment methods consumer protection and social media; adverse legal
judgments or settlements; food-borne illness or contamination of
products; data breaches, power loss, technological failures, user
error or other cyber risks threatening us or our franchisees; the
effect of war, terrorism, catastrophic events or climate change;
our ability to pay dividends and repurchase shares; changes in
consumer tastes, spending and traffic patterns and demographic
trends; actions by activist investors; changes in accounting
policies; and adequacy of our insurance coverage. In light of these
risks, uncertainties and assumptions, the forward-looking events
discussed in this press release might not occur. All
forward-looking statements speak only as of the date of this press
release and should be evaluated with an understanding of their
inherent uncertainty. Except as required under federal securities
laws and the rules and regulations of the Securities and Exchange
Commission, or other applicable law, we will not undertake, and
specifically disclaim, any obligation to publicly update or revise
any forward-looking statements to reflect events or circumstances
arising after the date of this press release, whether as a result
of new information, future events or otherwise. You are cautioned
not to place undue reliance on the forward-looking statements
included in this press release or that may be made elsewhere from
time to time by, or on behalf of, us. All forward-looking
statements attributable to us are expressly qualified by these
cautionary statements.
TABLES TO FOLLOW
Domino's Pizza,
Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Income
|
(Unaudited)
|
|
|
|
Fiscal Quarter
Ended
|
|
|
|
June 20,
2021
|
|
|
%
of
Total
Revenues
|
|
|
June 14,
2020
|
|
|
%
of
Total
Revenues
|
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Company-owned
stores
|
|
$
|
116,589
|
|
|
|
|
|
|
$
|
114,240
|
|
|
|
|
|
U.S. franchise
royalties and fees
|
|
|
126,836
|
|
|
|
|
|
|
|
113,098
|
|
|
|
|
|
Supply
chain
|
|
|
602,962
|
|
|
|
|
|
|
|
539,141
|
|
|
|
|
|
International
franchise royalties and fees
|
|
|
69,745
|
|
|
|
|
|
|
|
48,104
|
|
|
|
|
|
U.S. franchise
advertising
|
|
|
116,340
|
|
|
|
|
|
|
|
105,440
|
|
|
|
|
|
Total
revenues
|
|
|
1,032,472
|
|
|
|
100.0
|
%
|
|
|
920,023
|
|
|
|
100.0
|
%
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Company-owned
stores
|
|
|
88,019
|
|
|
|
|
|
|
|
87,831
|
|
|
|
|
|
Supply
chain
|
|
|
536,763
|
|
|
|
|
|
|
|
475,101
|
|
|
|
|
|
Total cost of
sales
|
|
|
624,782
|
|
|
|
60.5
|
%
|
|
|
562,932
|
|
|
|
61.2
|
%
|
Operating
margin
|
|
|
407,690
|
|
|
|
39.5
|
%
|
|
|
357,091
|
|
|
|
38.8
|
%
|
General and
administrative
|
|
|
100,448
|
|
|
|
9.7
|
%
|
|
|
88,068
|
|
|
|
9.5
|
%
|
U.S. franchise
advertising
|
|
|
116,340
|
|
|
|
11.3
|
%
|
|
|
105,440
|
|
|
|
11.5
|
%
|
Income from
operations
|
|
|
190,902
|
|
|
|
18.5
|
%
|
|
|
163,583
|
|
|
|
17.8
|
%
|
Interest expense,
net
|
|
|
(45,809)
|
|
|
|
(4.4)
|
%
|
|
|
(39,087)
|
|
|
|
(4.3)
|
%
|
Income before
provision for income taxes
|
|
|
145,093
|
|
|
|
14.1
|
%
|
|
|
124,496
|
|
|
|
13.5
|
%
|
Provision for income
taxes
|
|
|
28,474
|
|
|
|
2.8
|
%
|
|
|
5,828
|
|
|
|
0.6
|
%
|
Net income
|
|
$
|
116,619
|
|
|
|
11.3
|
%
|
|
$
|
118,668
|
|
|
|
12.9
|
%
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock –
diluted
|
|
$
|
3.06
|
|
|
|
|
|
|
$
|
2.99
|
|
|
|
|
|
Domino's Pizza,
Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Income
|
(Unaudited)
|
|
|
|
Two Fiscal
Quarters Ended
|
|
|
|
June 20,
2021
|
|
|
%
of
Total
Revenues
|
|
|
June 14,
2020
|
|
|
%
of
Total
Revenues
|
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Company-owned
stores
|
|
$
|
229,333
|
|
|
|
|
|
|
$
|
216,566
|
|
|
|
|
|
U.S. franchise
royalties and fees
|
|
|
251,322
|
|
|
|
|
|
|
|
217,844
|
|
|
|
|
|
Supply
chain
|
|
|
1,171,300
|
|
|
|
|
|
|
|
1,051,841
|
|
|
|
|
|
International
franchise royalties and fees
|
|
|
136,515
|
|
|
|
|
|
|
|
105,600
|
|
|
|
|
|
U.S. franchise
advertising
|
|
|
227,700
|
|
|
|
|
|
|
|
201,274
|
|
|
|
|
|
Total
revenues
|
|
|
2,016,170
|
|
|
|
100.0
|
%
|
|
|
1,793,125
|
|
|
|
100.0
|
%
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Company-owned
stores
|
|
|
173,761
|
|
|
|
|
|
|
|
167,219
|
|
|
|
|
|
Supply
chain
|
|
|
1,045,568
|
|
|
|
|
|
|
|
928,658
|
|
|
|
|
|
Total cost of
sales
|
|
|
1,219,329
|
|
|
|
60.5
|
%
|
|
|
1,095,877
|
|
|
|
61.1
|
%
|
Operating
margin
|
|
|
796,841
|
|
|
|
39.5
|
%
|
|
|
697,248
|
|
|
|
38.9
|
%
|
General and
administrative
|
|
|
191,701
|
|
|
|
9.5
|
%
|
|
|
176,557
|
|
|
|
9.9
|
%
|
U.S. franchise
advertising
|
|
|
227,700
|
|
|
|
11.3
|
%
|
|
|
201,274
|
|
|
|
11.2
|
%
|
Income from
operations
|
|
|
377,440
|
|
|
|
18.7
|
%
|
|
|
319,417
|
|
|
|
17.8
|
%
|
Other
income
|
|
|
2,500
|
|
|
|
0.1
|
%
|
|
|
—
|
|
|
|
0.0
|
%
|
Interest expense,
net
|
|
|
(85,209)
|
|
|
|
(4.2)
|
%
|
|
|
(77,625)
|
|
|
|
(4.3)
|
%
|
Income before
provision for income taxes
|
|
|
294,731
|
|
|
|
14.6
|
%
|
|
|
241,792
|
|
|
|
13.5
|
%
|
Provision for income
taxes
|
|
|
60,351
|
|
|
|
3.0
|
%
|
|
|
1,522
|
|
|
|
0.1
|
%
|
Net income
|
|
$
|
234,380
|
|
|
|
11.6
|
%
|
|
$
|
240,270
|
|
|
|
13.4
|
%
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock –
diluted
|
|
$
|
6.06
|
|
|
|
|
|
|
$
|
6.05
|
|
|
|
|
|
Domino's Pizza,
Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
June 20,
2021
|
|
|
January
3,
2021
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
292,095
|
|
|
$
|
168,821
|
|
Restricted cash and
cash equivalents
|
|
|
184,695
|
|
|
|
217,453
|
|
Accounts receivable,
net
|
|
|
235,954
|
|
|
|
244,560
|
|
Inventories
|
|
|
59,182
|
|
|
|
66,683
|
|
Prepaid expenses and
other
|
|
|
43,785
|
|
|
|
24,169
|
|
Advertising fund
assets, restricted
|
|
|
165,139
|
|
|
|
147,698
|
|
Total current
assets
|
|
|
980,850
|
|
|
|
869,384
|
|
Property, plant and
equipment, net
|
|
|
295,532
|
|
|
|
297,364
|
|
Operating lease
right-of-use assets
|
|
|
220,845
|
|
|
|
228,268
|
|
Investments
|
|
|
82,500
|
|
|
|
40,000
|
|
Other
assets
|
|
|
142,066
|
|
|
|
132,152
|
|
Total
assets
|
|
$
|
1,721,793
|
|
|
$
|
1,567,168
|
|
Liabilities and
stockholders' deficit
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
54,769
|
|
|
$
|
2,855
|
|
Accounts
payable
|
|
|
104,515
|
|
|
|
94,499
|
|
Operating lease
liabilities
|
|
|
36,542
|
|
|
|
35,861
|
|
Advertising fund
liabilities
|
|
|
157,513
|
|
|
|
141,175
|
|
Other accrued
liabilities
|
|
|
201,015
|
|
|
|
196,429
|
|
Total current
liabilities
|
|
|
554,354
|
|
|
|
470,819
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
|
5,026,765
|
|
|
|
4,116,018
|
|
Operating lease
liabilities
|
|
|
195,926
|
|
|
|
202,268
|
|
Other accrued
liabilities
|
|
|
85,318
|
|
|
|
78,468
|
|
Total long-term
liabilities
|
|
|
5,308,009
|
|
|
|
4,396,754
|
|
Total stockholders'
deficit
|
|
|
(4,140,570)
|
|
|
|
(3,300,405)
|
|
Total liabilities and
stockholders' deficit
|
|
$
|
1,721,793
|
|
|
$
|
1,567,168
|
|
Domino's Pizza,
Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
Two Fiscal
Quarters Ended
|
|
|
|
June 20,
2021
|
|
|
June 14,
2020
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
234,380
|
|
|
$
|
240,270
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
33,641
|
|
|
|
28,789
|
|
Loss on sale/disposal
of assets
|
|
|
456
|
|
|
|
544
|
|
Amortization of debt
issuance costs
|
|
|
4,438
|
|
|
|
2,575
|
|
Provision for deferred
income taxes
|
|
|
2,561
|
|
|
|
1,510
|
|
Non-cash equity-based
compensation expense
|
|
|
13,500
|
|
|
|
10,029
|
|
Excess tax benefits
from equity-based compensation
|
|
|
(4,264)
|
|
|
|
(53,440)
|
|
Provision for losses
and accounts and notes receivable
|
|
|
296
|
|
|
|
1,592
|
|
Unrealized gain on
investments
|
|
|
(2,500)
|
|
|
|
—
|
|
Changes in operating
assets and liabilities
|
|
|
(17,098)
|
|
|
|
(19,421)
|
|
Changes in advertising
fund assets and liabilities, restricted
|
|
|
30,005
|
|
|
|
(620)
|
|
Net cash provided by
operating activities
|
|
|
295,415
|
|
|
|
211,828
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(33,163)
|
|
|
|
(33,732)
|
|
Purchase of
investments
|
|
|
(40,000)
|
|
|
|
(40,000)
|
|
Other
|
|
|
293
|
|
|
|
(479)
|
|
Net cash used in
investing activities
|
|
|
(72,870)
|
|
|
|
(74,211)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of long-term debt
|
|
|
1,850,000
|
|
|
|
158,000
|
|
Repayments of
long-term debt and finance lease obligations
|
|
|
(882,547)
|
|
|
|
(122,040)
|
|
Proceeds from exercise
of stock options
|
|
|
9,025
|
|
|
|
24,801
|
|
Purchases of common
stock
|
|
|
(1,025,000)
|
|
|
|
(79,590)
|
|
Tax payments for
restricted stock upon vesting
|
|
|
(1,087)
|
|
|
|
(1,827)
|
|
Payments of common
stock dividends and equivalents
|
|
|
(36,432)
|
|
|
|
(30,266)
|
|
Cash paid for
financing costs
|
|
|
(14,938)
|
|
|
|
—
|
|
Other
|
|
|
(244)
|
|
|
|
—
|
|
Net cash used in
financing activities
|
|
|
(101,223)
|
|
|
|
(50,922)
|
|
Effect of exchange
rate changes on cash
|
|
|
302
|
|
|
|
(253)
|
|
Change in cash and
cash equivalents, restricted cash and cash equivalents
|
|
|
121,624
|
|
|
|
86,442
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
|
168,821
|
|
|
|
190,615
|
|
Restricted cash and
cash equivalents, beginning of period
|
|
|
217,453
|
|
|
|
209,269
|
|
Cash and cash
equivalents included in advertising fund assets,
restricted,
beginning of period
|
|
|
115,872
|
|
|
|
84,040
|
|
Cash and cash
equivalents, restricted cash and cash equivalents and
cash and
cash equivalents included in advertising fund assets,
restricted,
beginning of period
|
|
|
502,146
|
|
|
|
483,924
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
|
|
292,095
|
|
|
|
247,952
|
|
Restricted cash and
cash equivalents, end of period
|
|
|
184,695
|
|
|
|
238,233
|
|
Cash and cash
equivalents included in advertising fund assets,
restricted,
end of
period
|
|
|
146,980
|
|
|
|
84,181
|
|
Cash and cash
equivalents, restricted cash and cash equivalents and cash
and
cash
equivalents included in advertising fund assets,
restricted,
end of
period
|
|
$
|
623,770
|
|
|
$
|
570,366
|
|
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SOURCE Domino's Pizza, Inc.