CANTON, Mass., Feb. 6,
2018 /PRNewswire/ --
Fiscal year 2017 highlights include:
- Dunkin' Donuts U.S. comparable store sales growth of
0.6%
- Flat Baskin-Robbins U.S. comparable store sales
growth
- Added 440 net new restaurants worldwide, including 313 net
new Dunkin' Donuts in the U.S.
- Revenues increased 3.8%, or 4.9% on a 52-week basis
- Diluted EPS increased 80.1%, or 82.7% on a 52-week basis, to
$3.80
- Diluted adjusted EPS increased 7.5%, or 9.0% on a 52-week
basis, to $2.43
Fourth quarter highlights include:
- All four business segments had positive comparable store
sales
- Dunkin' Donuts U.S. comparable store sales growth of
0.8%
- Baskin-Robbins U.S. comparable store sales growth of
5.1%
- Added 141 net new restaurants worldwide, including 126 net
new Dunkin' Donuts in the U.S.
- Revenues increased 5.3%, or 9.8% on a 13-week basis
- Diluted EPS increased 249.2%, or 267.2% on a 13-week basis,
to $2.13
- Diluted adjusted EPS unchanged at $0.64, or increased 4.9% on a 13-week
basis
Dunkin' Brands Group, Inc. (Nasdaq: DNKN), the parent company of
Dunkin' Donuts (DD) and Baskin-Robbins (BR), today reported results
for the 13-week fiscal fourth quarter and 52-week fiscal year ended
December 30, 2017.
"In 2017, we made significant progress positioning Dunkin'
Donuts as America's most-loved, beverage-led, on-the-go brand.
Morning comparable store sales increased each quarter sequentially,
and we had our highest quarterly beverage comparable sales of the
year in the fourth quarter of 2017, driven by iced coffee and
Frozen Dunkin' Coffee. Our strategic focus on morning sales yielded
improved customer counts in that critical daypart during the last
three quarters of the year and we are actively working to drive
afternoon traffic through p.m. beverages and food along with
all-day value offers that kicked-off in January. Additionally, in
2017, we believe that Dunkin' Donuts was once again one of the
fastest growing retail brands by unit count in the country," said
Nigel Travis, Dunkin' Brands
Chairman and CEO. "Other accomplishments during 2017 included
adding more than two million members to the Perks loyalty program
bringing total membership to approximately 8 million, increasing
out-of-restaurant retail sales of Dunkin' branded consumer packaged
goods by greater than 30 percent, and successfully testing a
simplified menu across 1,000 restaurants. We strongly believe the
simplified menu, which is expected to roll-out nationally by the
end of the first quarter, will improve franchisees' profitability
and enable us to better serve customers."
"We're pleased to have delivered our revenue, operating income,
and earnings per share targets for 2017, and look forward to
sharing our growth targets for 2018 and beyond at our upcoming
investor day on February 8 in
Boston," said Kate Jaspon, Dunkin' Brands Chief Financial
Officer. "In January, we announced an approximately five percent
reduction in our general and administrative expense target in 2018
to two percent of systemwide sales. We are also encouraged by the
recently passed tax reform act which includes provisions that we
expect to be favorable to the majority of our franchisees as well
as net beneficial to Dunkin' Brands."
FISCAL YEAR 2017
KEY FINANCIAL HIGHLIGHTS
|
|
($ in millions,
except per share data)
|
Fiscal year
ended
|
|
Increase
(Decrease)
|
Amounts and
percentages may not recalculate due to rounding
|
December 30,
2017
|
December 31,
2016
|
|
$ /
#
|
%
|
|
(52
weeks)
|
(53
weeks)
|
|
|
|
Financial
data:
|
|
|
|
|
|
Revenues
|
$
|
860.5
|
|
828.9
|
|
|
31.6
|
|
3.8
|
%
|
Operating
income
|
447.0
|
|
414.7
|
|
|
32.3
|
|
7.8
|
%
|
Operating income
margin
|
51.9
|
%
|
50.0
|
%
|
|
|
|
Adjusted operating
income1
|
467.1
|
|
436.6
|
|
|
30.5
|
|
7.0
|
%
|
Adjusted operating
income margin1
|
54.3
|
%
|
52.7
|
%
|
|
|
|
Net
income2
|
350.9
|
|
195.6
|
|
|
155.3
|
|
79.4
|
%
|
Adjusted net
income1,2
|
223.8
|
|
208.7
|
|
|
15.1
|
|
7.2
|
%
|
Earnings per
share:
|
|
|
|
|
|
Common–basic2
|
3.86
|
|
2.14
|
|
|
1.72
|
|
80.4
|
%
|
Common–diluted2
|
3.80
|
|
2.11
|
|
|
1.69
|
|
80.1
|
%
|
Diluted adjusted
earnings per share1,2
|
2.43
|
|
2.26
|
|
|
0.17
|
|
7.5
|
%
|
Weighted average
number of common shares – diluted (in
millions)2
|
92.2
|
|
92.5
|
|
|
(0.3)
|
|
(0.3)
|
%
|
Systemwide
sales3
|
$
|
11,146.6
|
|
10,844.6
|
|
|
301.9
|
|
2.8
|
%
|
Comparable store
sales growth (decline):
|
|
|
|
|
|
DD U.S.
|
0.6
|
%
|
1.6
|
%
|
|
|
|
BR U.S.
|
—
|
%
|
0.7
|
%
|
|
|
|
DD
International
|
0.3
|
%
|
(1.9)
|
%
|
|
|
|
BR
International
|
(0.1)
|
%
|
(4.2)
|
%
|
|
|
|
Development
data:
|
|
|
|
|
|
Consolidated global
net POD development4
|
440
|
|
723
|
|
|
(283)
|
|
(39.1)
|
%
|
DD global PODs at
period end
|
12,538
|
|
12,258
|
|
|
280
|
|
2.3
|
%
|
BR global PODs at
period end
|
7,982
|
|
7,822
|
|
|
160
|
|
2.0
|
%
|
Consolidated global
PODs at period end
|
20,520
|
|
20,080
|
|
|
440
|
|
2.2
|
%
|
|
|
1
|
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, and certain other items, net of the tax impact of such
adjustments in the case of
adjusted net income. Adjusted net income excludes the net tax
benefit due to the enactment of the Tax Cuts and Jobs Act. 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.
|
|
|
2
|
In the first quarter
of 2017, the Company adopted Accounting Standards Update No.
2016-09, Compensation–Stock Compensation: Improvements to
Employee
Share-Based Payment Accounting ("ASU 2016-09"), as issued by the
Financial Accounting Standards Board. As required by the updated
accounting standard,
excess tax benefits or deficiencies are now recorded to the
provision for income taxes in the consolidated statements of
operations, on a prospective basis, instead
of additional paid-in capital in the consolidated balance sheets.
See "Adoption of New Accounting Standard—Excess Tax Benefits" for
further detail.
|
|
|
3
|
Systemwide sales
include sales at franchisee- and company-operated restaurants,
including joint ventures. While we do not record sales by
franchisees, licensees,
or joint ventures 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
systemwide sales information aids in understanding how we derive
royalty revenue and in
evaluating our performance relative to competitors.
|
|
|
4
|
Consolidated global
net POD development for the fiscal years ended December 30, 2017
and December 31, 2016 reflects the previously-announced closing of
1
and 18 self-serve coffee stations within Speedway locations,
respectively.
|
FOURTH QUARTER
2017 KEY FINANCIAL HIGHLIGHTS
|
|
($ in millions,
except per share data)
|
Three months
ended
|
|
Increase
(Decrease)
|
Amounts and
percentages may not recalculate due to rounding
|
December 30,
2017
|
December 31,
2016
|
|
$ /
#
|
%
|
|
(13
weeks)
|
(14
weeks)
|
|
|
|
Financial
data:
|
|
|
|
|
|
Revenues
|
$
|
227.1
|
|
215.7
|
|
|
11.4
|
|
5.3
|
%
|
Operating
income
|
120.1
|
|
113.9
|
|
|
6.2
|
|
5.5
|
%
|
Operating income
margin
|
52.9
|
%
|
52.8
|
%
|
|
|
|
Adjusted operating
income1
|
123.5
|
|
119.3
|
|
|
4.3
|
|
3.6
|
%
|
Adjusted operating
income margin1
|
54.4
|
%
|
55.3
|
%
|
|
|
|
Net
income2
|
195.5
|
|
56.1
|
|
|
139.4
|
|
248.3
|
%
|
Adjusted net
income1,2
|
58.4
|
|
59.4
|
|
|
(1.0)
|
|
(1.7)
|
|
Earnings per
share:
|
|
|
|
|
|
Common–basic2
|
2.17
|
|
0.61
|
|
|
1.56
|
|
255.7
|
%
|
Common–diluted2
|
2.13
|
|
0.61
|
|
|
1.52
|
|
249.2
|
%
|
Diluted adjusted
earnings per share1,2
|
0.64
|
|
0.64
|
|
|
—
|
|
—
|
%
|
Weighted average
number of common shares – diluted (in
millions)2
|
91.8
|
|
92.5
|
|
|
(0.8)
|
|
(0.8)
|
%
|
Systemwide
sales3
|
$
|
2,799.2
|
|
2,830.2
|
|
|
(31.0)
|
|
(1.1)
|
%
|
Comparable store
sales growth (decline):
|
|
|
|
|
|
DD U.S.
|
0.8
|
%
|
1.9
|
%
|
|
|
|
BR U.S.
|
5.1
|
%
|
(0.9)
|
%
|
|
|
|
DD
International
|
1.6
|
%
|
(1.0)
|
%
|
|
|
|
BR
International
|
3.0
|
%
|
0.7
|
%
|
|
|
|
Development
data:
|
|
|
|
|
|
Consolidated global
net POD development4
|
141
|
|
296
|
|
|
(155)
|
|
(52.4)
|
%
|
DD global PODs at
period end
|
12,538
|
|
12,258
|
|
|
280
|
|
2.3
|
%
|
BR global PODs at
period end
|
7,982
|
|
7,822
|
|
|
160
|
|
2.0
|
%
|
Consolidated global
PODs at period end
|
20,520
|
|
20,080
|
|
|
440
|
|
2.2
|
%
|
|
|
1
|
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, and certain other items, net of the tax impact of such
adjustments in the case
of adjusted net income. Adjusted net income excludes the net tax
benefit due to the enactment of the Tax Cuts and Jobs Act. 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.
|
|
|
2
|
In the first quarter
of 2017, the Company adopted ASU 2016-09, as issued by the
Financial Accounting Standards Board. As required by the updated
accounting
standard, excess tax benefits or deficiencies are now recorded to
the provision for income taxes in the consolidated statements of
operations, on a prospective
basis, instead of additional paid-in capital in the consolidated
balance sheets. See "Adoption of New Accounting Standard—Excess Tax
Benefits" for further detail.
|
|
|
3
|
Systemwide sales
include sales at franchisee- and company-operated restaurants,
including joint ventures. While we do not record sales by
franchisees, licensees,
or joint ventures 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
systemwide sales information aids in understanding how we derive
royalty revenue and in
evaluating our performance relative to competitors.
|
|
|
4
|
Consolidated global
net POD development for the three months ended December 30, 2017
and December 31, 2016 reflects the previously-announced closing of
1
and 2 self-serve coffee stations within Speedway locations,
respectively.
|
The decline in global systemwide sales for the fourth quarter
was a result of an extra week in the prior year period. On a
13-week basis, global systemwide sales grew in the fourth quarter.
The growth was primarily attributable to global store development
and Dunkin' Donuts U.S. comparable store sales growth (which
includes stores open 78 weeks or more).
Dunkin' Donuts U.S. comparable store sales growth in the fourth
quarter was driven by increased average ticket offset by a decline
in traffic. Growth was driven by core breakfast sandwich sales;
iced coffee and Frozen Dunkin' Coffee sales; as well as traditional
donut sales.
Baskin-Robbins U.S. comparable store sales growth in the fourth
quarter was driven by increased average ticket offset by a decline
in traffic. Growth was driven by beverages including shakes,
smoothies and Cappuccino Blast as well as the take-home
category.
In the fourth quarter, Dunkin' Brands franchisees and licensees
opened 141 net new restaurants around the globe. This included 126
net new Dunkin' Donuts U.S. locations and 40 net new Baskin-Robbins
International locations offset by 23 Dunkin' Donuts International
net closures and 2 Baskin-Robbins U.S. net closures. Additionally,
Dunkin' Donuts U.S. franchisees remodeled 88 restaurants and
Baskin-Robbins U.S. franchisees remodeled 34 restaurants during the
quarter.
Revenues for the fourth quarter increased $11.4 million, or 5.3%, compared to the prior
year period due primarily to increased franchise fees driven by
additional renewal income, offset by a decrease in gross openings.
These increases in revenues were offset by a decrease in sales of
ice cream and other products, primarily to our licensees in the
Middle East, as well as a decrease
in royalty income due primarily to the extra week in the prior year
period and a decrease in refranchising gains. Revenues for the
fourth quarter increased 9.8% on a 13-week basis.
Operating income and adjusted operating income for the fourth
quarter increased $6.2 million, or
5.5%, and $4.3 million, or 3.6%,
respectively, from the prior year period primarily as a result of
the increase in franchise fees, offset by gains recognized in
connection with the sale of company-operated restaurants in the
prior year period and a decrease in net margin on ice cream due
primarily to the decrease in sales volume and an increase in
commodity costs. Also offsetting the increases in operating income
and adjusted operating income were expenses incurred to record
lease-related liabilities as a result of restaurant closures, as
well as the decreases in royalty income and refranchising gains.
Adjusted operating income was also unfavorably impacted by an
increase in general and administrative expenses. Operating income
and adjusted operating income for the fourth quarter increased
11.5% and 9.2%, respectively, on a 13-week basis.
Net income for the fourth quarter increased by $139.4 million, or 248.3%, compared to the prior
year period driven by a net benefit from income taxes of
$110.6 million compared to income tax
expense in the prior year period of $30.9
million, as well as the increase in operating income. The
net benefit from income taxes in the current quarter includes a
$143.4 million net tax benefit due to
the enactment of the Tax Cuts and Jobs Act ("Tax Act"), consisting
primarily of the re-measurement of our deferred tax liabilities
using the lower enacted corporate tax rate. The increase in net
income was offset by a $7.0 million
loss on debt extinguishment and refinancing transactions and an
increase in net interest expense driven by additional borrowings
incurred in conjunction with a refinancing transaction completed
during the fourth quarter. Net income for the fourth quarter
increased 264.9% on a 13-week basis.
Adjusted net income decreased $1.0
million, or 1.7%, to $58.4
million compared to the prior year period primarily as a
result of increases in income tax expense, which excludes the
impact of the Tax Act, and net interest expense, offset by the
increase in adjusted operating income. Adjusted net income
for the fourth quarter increased 2.7% on a 13-week basis.
Diluted earnings per share for the fourth quarter increased by
249.2% to $2.13 as a result of the
increase in net income and a decrease in shares outstanding.
Diluted adjusted earnings per share remained flat to the prior year
period at $0.64 as the decrease in
adjusted net income was offset by a decrease in shares outstanding.
The decrease in shares outstanding from the prior year period was
due primarily to repurchases of shares since the fourth quarter of
2016, offset by the exercise of stock options and the impact of the
new accounting standard related to excess tax benefits adopted in
the first quarter of 2017. Excluding the impact of recognized
excess tax benefits, diluted earnings per share and diluted
adjusted earnings per share would have each been $0.01 lower. On a 13-week basis, diluted earnings
per share for the fourth quarter increased $1.55, or 267.2%, and diluted adjusted earnings
per share increased $0.03, or 4.9%,
compared to the prior year period.
FOURTH QUARTER
2017 SEGMENT RESULTS
|
|
Amounts and
percentages may not recalculate due to rounding
|
|
Three months
ended
|
|
Increase
(Decrease)
|
Dunkin' Donuts
U.S.
|
|
December 30,
2017
|
|
December 31,
2016
|
|
$ /
#
|
%
|
|
|
(13
weeks)
|
|
(14
weeks)
|
|
|
|
|
($ in thousands
except as otherwise noted)
|
Revenues:
|
|
|
|
|
|
|
|
Royalty
income
|
|
$
|
118,771
|
|
|
121,774
|
|
|
(3,003)
|
|
(2.5)
|
%
|
Franchise
fees
|
|
32,826
|
|
|
14,716
|
|
|
18,110
|
|
123.1
|
%
|
Rental
income
|
|
24,231
|
|
|
24,255
|
|
|
(24)
|
|
(0.1)
|
%
|
Sales at
company-operated restaurants
|
|
—
|
|
|
51
|
|
|
(51)
|
|
(100.0)
|
%
|
Other
revenues
|
|
1,920
|
|
|
2,270
|
|
|
(350)
|
|
(15.4)
|
%
|
Total
revenues
|
|
$
|
177,748
|
|
|
163,066
|
|
|
14,682
|
|
9.0
|
%
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
$
|
141,210
|
|
|
131,013
|
|
|
10,197
|
|
7.8
|
%
|
|
|
|
|
|
|
|
|
Comparable store
sales growth
|
|
0.8
|
%
|
|
1.9
|
%
|
|
|
|
Systemwide sales (in
millions)1
|
|
$
|
2,160.3
|
|
|
2,228.7
|
|
|
(68.4)
|
|
(3.1)
|
%
|
|
|
|
|
|
|
|
|
Points of
distribution
|
|
9,141
|
|
|
8,828
|
|
|
313
|
|
3.5
|
%
|
Gross
openings
|
|
172
|
|
|
235
|
|
|
(63)
|
|
(26.8)
|
%
|
Net
openings2
|
|
126
|
|
|
199
|
|
|
(73)
|
|
(36.7)
|
%
|
|
|
1
|
Systemwide sales
include sales at franchisee- and company-operated restaurants,
including joint ventures. We do not record sales by franchisees,
licensees, or
joint ventures 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
|
|
|
2
|
Net openings for the
three months ended December 30, 2017 and December 31, 2016 reflect
the previously-announced closing of 1 and 2 self-serve coffee
stations
within Speedway locations, respectively.
|
Dunkin' Donuts U.S. fourth quarter revenues of $177.7 million represented an increase of 9.0%
compared to the prior year period. The increase was primarily a
result of increased franchise fees driven by additional renewal
income, offset by a decrease in gross openings. Offsetting the
increase in franchise fees was a decrease in royalty income due to
the extra week in the prior year period.
Dunkin' Donuts U.S. segment profit in the fourth quarter
increased to $141.2 million, an
increase of $10.2 million over the
prior year period, driven primarily by the increase in revenues,
offset by gains recognized in connection with the sale of
company-operated restaurants in the prior year period and expenses
incurred to record lease-related liabilities as a result of
restaurant closures.
Amounts and
percentages may not recalculate due to rounding
|
|
Three months
ended
|
|
Increase
(Decrease)
|
Dunkin' Donuts
International
|
|
December 30,
2017
|
|
December 31,
2016
|
|
$ /
#
|
%
|
|
|
(13
weeks)
|
|
(14
weeks)
|
|
|
|
|
($ in thousands
except as otherwise noted)
|
Revenues:
|
|
|
|
|
|
|
|
Royalty
income
|
|
$
|
4,954
|
|
|
4,208
|
|
|
746
|
|
17.7
|
%
|
Franchise
fees
|
|
698
|
|
|
1,799
|
|
|
(1,101)
|
|
(61.2)
|
%
|
Other
revenues
|
|
(26)
|
|
|
(21)
|
|
|
(5)
|
|
23.8
|
%
|
Total
revenues
|
|
$
|
5,626
|
|
|
5,986
|
|
|
(360)
|
|
(6.0)
|
%
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
$
|
2,188
|
|
|
3,220
|
|
|
(1,032)
|
|
(32.0)
|
%
|
|
|
|
|
|
|
|
|
Comparable store
sales growth (decline)
|
|
1.6
|
%
|
|
(1.0)
|
%
|
|
|
|
Systemwide sales (in
millions)1
|
|
$
|
200.0
|
|
|
187.2
|
|
|
12.8
|
|
6.8
|
%
|
|
|
|
|
|
|
|
|
Points of
distribution
|
|
3,397
|
|
|
3,430
|
|
|
(33)
|
|
(1.0)
|
%
|
Gross
openings
|
|
92
|
|
|
137
|
|
|
(45)
|
|
(32.8)
|
%
|
Net openings
(closings)
|
|
(23)
|
|
|
51
|
|
|
(74)
|
|
(145.1)
|
%
|
|
|
1
|
Systemwide sales
include sales at franchisee- and company-operated restaurants,
including joint ventures. We do not record sales by franchisees,
licensees,
or joint ventures 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
increased 6.8% from the prior year period driven primarily by sales
growth in the Middle East,
Europe, Latin America, and Asia. On a constant currency basis, systemwide
sales increased by approximately 4%.
Dunkin' Donuts International fourth quarter revenues of
$5.6 million represented a decrease
of 6.0% from the prior year period. The decrease in revenues was
primarily a result of a decline in franchise fees, offset by an
increase in royalty income.
Segment profit for Dunkin' Donuts International decreased
$1.0 million to $2.2 million in the fourth quarter primarily as a
result of an increase in general and administrative expenses and
the decrease in revenues, offset by a decrease in the net loss from
our South Korea joint venture.
Amounts and
percentages may not recalculate due to rounding
|
|
Three months
ended
|
|
Increase
(Decrease)
|
Baskin-Robbins
U.S.
|
|
December 30,
2017
|
|
December 31,
2016
|
|
$ /
#
|
%
|
|
|
(13
weeks)
|
|
(14
weeks)
|
|
|
|
|
($ in thousands
except as otherwise noted)
|
Revenues:
|
|
|
|
|
|
|
|
Royalty
income
|
|
$
|
5,459
|
|
|
5,363
|
|
|
96
|
|
1.8
|
%
|
Franchise
fees
|
|
899
|
|
|
287
|
|
|
612
|
|
213.2
|
%
|
Rental
income
|
|
743
|
|
|
773
|
|
|
(30)
|
|
(3.9)
|
%
|
Sales of ice cream
and other products
|
|
1,269
|
|
|
595
|
|
|
674
|
|
113.3
|
%
|
Other
revenues
|
|
2,189
|
|
|
2,414
|
|
|
(225)
|
|
(9.3)
|
%
|
Total
revenues
|
|
$
|
10,559
|
|
|
9,432
|
|
|
1,127
|
|
11.9
|
%
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
$
|
5,439
|
|
|
5,117
|
|
|
322
|
|
6.3
|
%
|
|
|
|
|
|
|
|
|
Comparable store
sales growth (decline)
|
|
5.1
|
%
|
|
(0.9)
|
%
|
|
|
|
Systemwide sales (in
millions)1
|
|
$
|
112.4
|
|
|
112.5
|
|
|
(0.1)
|
|
(0.1)
|
%
|
|
|
|
|
|
|
|
|
Points of
distribution
|
|
2,560
|
|
|
2,538
|
|
|
22
|
|
0.9
|
%
|
Gross
openings
|
|
32
|
|
|
29
|
|
|
3
|
|
10.3
|
%
|
Net openings
(closings)
|
|
(2)
|
|
|
5
|
|
|
(7)
|
|
(140.0)
|
%
|
|
|
1
|
Systemwide sales
include sales at franchisee- and company-operated restaurants,
including joint ventures. We do not record sales by franchisees,
licensees,
or joint ventures 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 revenues increased 11.9% from
the prior year period to $10.6
million due primarily to an increase in sales of ice cream
and other products and an increase in franchise fees driven by
additional renewal income. These increases in revenues were offset
by a decrease in other revenues due to a decrease in licensing
income which was driven by the extra week in the prior year
period.
Segment profit for Baskin-Robbins U.S. increased to $5.4 million in the fourth quarter, an increase
of 6.3%, primarily as a result of the increase in franchise fees
and an increase in net margin on ice cream driven by an increase in
sales volume. These increases in segment profit were offset by
expenses incurred to record lease-related liabilities, as well as
an increase in general and administrative expenses and the decrease
in licensing income.
Amounts and
percentages may not recalculate due to rounding
|
|
Three months
ended
|
|
Increase
(Decrease)
|
Baskin-Robbins
International
|
|
December 30,
2017
|
|
December 31,
2016
|
|
$ /
#
|
%
|
|
|
(13
weeks)
|
|
(14
weeks)
|
|
|
|
|
($ in thousands
except as otherwise noted)
|
Revenues:
|
|
|
|
|
|
|
|
Royalty
income
|
|
$
|
1,754
|
|
|
1,392
|
|
|
362
|
|
26.0
|
%
|
Franchise
fees
|
|
384
|
|
|
415
|
|
|
(31)
|
|
(7.5)
|
%
|
Rental
income
|
|
126
|
|
|
118
|
|
|
8
|
|
6.8
|
%
|
Sales of ice cream
and other products
|
|
23,434
|
|
|
27,509
|
|
|
(4,075)
|
|
(14.8)
|
%
|
Other
revenues
|
|
106
|
|
|
3
|
|
|
103
|
|
3,433.3
|
%
|
Total
revenues
|
|
$
|
25,804
|
|
|
29,437
|
|
|
(3,633)
|
|
(12.3)
|
%
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
$
|
7,436
|
|
|
8,350
|
|
|
(914)
|
|
(10.9)
|
%
|
|
|
|
|
|
|
|
|
Comparable store
sales growth
|
|
3.0
|
%
|
|
0.7
|
%
|
|
|
|
Systemwide sales (in
millions)1
|
|
$
|
326.4
|
|
|
301.7
|
|
|
24.8
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
Points of
distribution
|
|
5,422
|
|
|
5,284
|
|
|
138
|
|
2.6
|
%
|
Gross
openings
|
|
115
|
|
|
151
|
|
|
(36)
|
|
(23.8)
|
%
|
Net
openings
|
|
40
|
|
|
41
|
|
|
(1)
|
|
(2.4)
|
%
|
|
|
1
|
Systemwide sales
include sales at franchisee- and company-operated restaurants,
including joint ventures. We do not record sales by franchisees,
licensees,
or joint ventures 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 increased 8.2% in
the fourth quarter compared to the prior year period driven by
sales growth in South Korea and
the Middle East, offset by a
decline in Japan. Sales in
South Korea were positively
impacted by foreign exchange rates, while sales in Japan were negatively impacted by foreign
exchange rates. On a constant currency basis, systemwide sales
increased by approximately 7%.
Baskin-Robbins International fourth quarter revenues decreased
12.3% from the prior year period to $25.8
million due primarily to a decrease in sales of ice cream
products to our licensees in the Middle
East, offset by increases in royalty income and other
revenues. Systemwide sales and sales of ice cream products are not
directly correlated within a given period due to the lag between
shipment of products to licensees and retail sales at franchised
restaurants, as well as the overall timing of deliveries between
fiscal quarters.
Segment profit for Baskin-Robbins International decreased 10.9%
from the prior year period to $7.4
million as a result of a decrease in net margin on ice cream
due to the decrease in sales volume, as well as an increase in
general and administrative expenses. These decreases in segment
profit were offset by an increase in net income from our
South Korea joint venture and the
increases in royalty income and other revenues.
COMPANY UPDATES
- The Company today announced that the Board of Directors
declared a cash dividend of $0.3475
per share, payable on March 21, 2018
to shareholders of record as of the close of business on
March 12, 2018. This represents a
7.75 percent increase over the prior quarter's dividend.
- In January, the Company announced that it was reducing its
general and administrative expense target in 2018 by approximately
five percent from 2017 to a target of two percent of systemwide
sales.
- The Company expects that its 2018 effective tax rate will be
approximately 28 percent, which reflects the impact from the Tax
Act, net of state taxes and international provisions.
- The Company will be hosting its 2018 Investor & Analyst day
on Thursday, February 8, 2018, at
Fenway Park in Boston, Mass.
Attendance at the event is by invitation only; however a live audio
webcast of the conference including slide presentations will be
accessible via the Company's website at:
http://investor.dunkinbrands.com under "Events &
Presentations". The conference is scheduled to begin at
9:00 AM Eastern Time and will
continue until approximately 3:00 PM Eastern
Time. A replay of the webcast, along with slide
presentations, will remain accessible on the Company's website
through March 9, 2018.
FINANCIAL TARGETS
- The Company will provide its 2018 and long-term financial
targets at its upcoming Investor & Analyst day.
Adoption of New Accounting Standard—Excess Tax
Benefits
The Company adopted ASU 2016-09 in the first quarter of
2017, which simplifies several aspects of accounting for
share-based payment transactions, including excess tax benefits and
classification in the statements of cash flows. The adoption
resulted in a reduction to the provision for income taxes of
$0.5 million and $7.8 million for the three months and fiscal year
ended December 30, 2017,
respectively. Prior year periods have not been revised to reflect
excess tax benefits in earnings, as only prospective application is
permitted. Excess tax benefits will vary in future periods, as such
amounts are dependent on the number of employee stock options
exercised and fluctuations in the Company's stock price.
Additionally, the diluted weighted average number of common shares
outstanding for the three months and fiscal year ended December 30, 2017 excludes excess tax benefits
from the assumed proceeds available to repurchase shares under the
treasury stock method, which did not have a material impact for
either of the periods. The adoption of ASU 2016-09 had no impact on
cash paid for income taxes.
New Accounting Standard Not Yet Adopted as of December 30, 2017—Revenue Recognition
In May 2014, the Financial
Accounting Standards Board issued new guidance for revenue
recognition related to contracts with customers, except for
contracts within the scope of other standards, which supersedes
nearly all existing revenue recognition guidance. The new guidance
is effective for the Company in fiscal year 2018. The Company will
adopt this new guidance in fiscal year 2018 using the full
retrospective transition method, which will result in restating
each prior reporting period presented, fiscal years 2016 and 2017,
in the year of adoption. Additional information regarding the
Company's adoption of the new revenue recognition guidance and the
impact to historical financial results is contained in Exhibit 99.2
to the Company's filing on Form 8-K, filed with the Securities and
Exchange Commission on February 6,
2018.
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 Kate
Jaspon, Chief Financial Officer. The dial-in number is (866)
393-1607 or (914) 495-8556, conference number 1769679. 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,
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," or "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. and Subsidiaries Non-GAAP
Reconciliations."
The three months and fiscal year ended December 31, 2016 include 14 weeks and 53 weeks,
respectively, as compared to 13 weeks and 52 weeks for the three
months and fiscal year ended December 30,
2017, respectively. Certain financial measures and other
metrics in this release have been presented on a 13-week and
52-week basis for the three months and fiscal year ended
December 31, 2016, respectively, to
provide improved comparability to the respective current year
periods. The impact of the extra week in the three months and
fiscal year ended December 31, 2016
reflects our estimate of the additional week in those fiscal
periods on certain revenues and expenses, net of tax. These
non-GAAP measures are not intended to replace the presentation of
our financial results in accordance with GAAP. These non-GAAP
measures are reconciled from the respective measures determined
under GAAP in the attached tables "Dunkin' Brands Group, Inc. and
Subsidiaries Non-GAAP Reconciliations."
Additionally, the Company has included metrics such as
systemwide sales 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.
Systemwide sales include sales at franchisee- and
company-operated restaurants, including joint ventures. While we do
not record sales by franchisees, licensees, or joint ventures 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 systemwide sales information aids in
understanding how we derive royalty revenue and in evaluating our
performance relative to competitors.
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.
The Company uses "DD International comparable store sales
growth" and "BR International comparable store sales growth," which
generally represents the growth in local currency average monthly
sales for franchisee-operated restaurants, including joint
ventures, that have been open at least 13 months and that have
reported sales in the current and comparable prior year month.
About Dunkin' Brands Group, Inc.
With more than 20,500 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 2017,
Dunkin' Brands' 100 percent franchised business model included more
than 12,500 Dunkin' Donuts restaurants and nearly 8,000
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 30,
2017
|
|
December 31,
2016
|
|
December 30,
2017
|
|
December 31,
2016
|
|
|
(13
weeks)
|
|
(14
weeks)
|
|
(52
weeks)
|
|
(53
weeks)
|
Revenues:
|
|
|
|
|
|
|
|
|
Franchise fees and
royalty income
|
|
$
|
165,745
|
|
|
149,954
|
|
|
592,689
|
|
|
549,571
|
|
Rental
income
|
|
25,100
|
|
|
25,146
|
|
|
104,643
|
|
|
101,020
|
|
Sales of ice cream
and other products
|
|
24,949
|
|
|
28,432
|
|
|
110,659
|
|
|
114,857
|
|
Sales at
company-operated restaurants
|
|
—
|
|
|
51
|
|
|
—
|
|
|
11,975
|
|
Other
revenues
|
|
11,345
|
|
|
12,122
|
|
|
52,510
|
|
|
51,466
|
|
Total
revenues
|
|
227,139
|
|
|
215,705
|
|
|
860,501
|
|
|
828,889
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Occupancy
expenses—franchised restaurants
|
|
16,543
|
|
|
14,718
|
|
|
60,301
|
|
|
57,409
|
|
Cost of ice cream and
other products
|
|
18,434
|
|
|
19,163
|
|
|
77,012
|
|
|
77,608
|
|
Company-operated
restaurant expenses
|
|
—
|
|
|
119
|
|
|
—
|
|
|
13,591
|
|
General and
administrative expenses, net
|
|
63,362
|
|
|
62,786
|
|
|
248,975
|
|
|
246,814
|
|
Depreciation
|
|
4,988
|
|
|
5,097
|
|
|
20,084
|
|
|
20,458
|
|
Amortization of other
intangible assets
|
|
5,334
|
|
|
5,353
|
|
|
21,335
|
|
|
22,079
|
|
Long-lived asset
impairment charges
|
|
974
|
|
|
45
|
|
|
1,617
|
|
|
149
|
|
Total operating costs
and expenses
|
|
109,635
|
|
|
107,281
|
|
|
429,324
|
|
|
438,108
|
|
Net income of equity
method investments
|
|
2,586
|
|
|
2,404
|
|
|
15,198
|
|
|
14,552
|
|
Other operating
income, net
|
|
36
|
|
|
3,052
|
|
|
627
|
|
|
9,381
|
|
Operating
income
|
|
120,126
|
|
|
113,880
|
|
|
447,002
|
|
|
414,714
|
|
Other income
(expense), net:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
1,943
|
|
|
148
|
|
|
3,313
|
|
|
582
|
|
Interest
expense
|
|
(30,231)
|
|
|
(26,396)
|
|
|
(104,423)
|
|
|
(100,852)
|
|
Loss on debt
extinguishment and refinancing transactions
|
|
(6,996)
|
|
|
—
|
|
|
(6,996)
|
|
|
—
|
|
Other gains (losses),
net
|
|
21
|
|
|
(599)
|
|
|
391
|
|
|
(1,195)
|
|
Total other expense,
net
|
|
(35,263)
|
|
|
(26,847)
|
|
|
(107,715)
|
|
|
(101,465)
|
|
Income before income
taxes
|
|
84,863
|
|
|
87,033
|
|
|
339,287
|
|
|
313,249
|
|
Provision (benefit)
for income taxes
|
|
(110,629)
|
|
|
30,913
|
|
|
(11,622)
|
|
|
117,673
|
|
Net income
|
|
$
|
195,492
|
|
|
56,120
|
|
|
350,909
|
|
|
195,576
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share—basic
|
|
$
|
2.17
|
|
|
0.61
|
|
|
3.86
|
|
|
2.14
|
|
Earnings per
share—diluted
|
|
2.13
|
|
|
0.61
|
|
|
3.80
|
|
|
2.11
|
|
DUNKIN' BRANDS
GROUP, INC. AND SUBSIDIARIES
|
Consolidated Balance
Sheets
|
(In
thousands)
|
(Unaudited)
|
|
|
|
December 30,
2017
|
|
December 31,
2016
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,018,317
|
|
|
361,425
|
|
Restricted
cash
|
|
94,047
|
|
|
69,746
|
|
Accounts receivable,
net
|
|
51,442
|
|
|
44,512
|
|
Notes and other
receivables, net
|
|
51,082
|
|
|
40,672
|
|
Restricted assets of
advertising funds
|
|
47,373
|
|
|
40,338
|
|
Prepaid income
taxes
|
|
21,879
|
|
|
20,926
|
|
Prepaid expenses and
other current assets
|
|
32,695
|
|
|
28,739
|
|
Total current
assets
|
|
1,316,835
|
|
|
606,358
|
|
Property and
equipment, net
|
|
169,005
|
|
|
176,662
|
|
Equity method
investments
|
|
140,615
|
|
|
114,738
|
|
Goodwill
|
|
888,308
|
|
|
888,272
|
|
Other intangibles
assets, net
|
|
1,357,157
|
|
|
1,378,720
|
|
Other
assets
|
|
65,464
|
|
|
62,632
|
|
Total
assets
|
|
$
|
3,937,384
|
|
|
3,227,382
|
|
Liabilities and
Stockholders' Equity (Deficit)
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
31,500
|
|
|
25,000
|
|
Capital lease
obligations
|
|
596
|
|
|
589
|
|
Accounts
payable
|
|
16,307
|
|
|
12,682
|
|
Liabilities of
advertising funds
|
|
58,014
|
|
|
52,271
|
|
Deferred
income
|
|
39,395
|
|
|
35,393
|
|
Other current
liabilities
|
|
326,078
|
|
|
298,266
|
|
Total current
liabilities
|
|
471,890
|
|
|
424,201
|
|
Long-term debt,
net
|
|
3,035,857
|
|
|
2,401,998
|
|
Capital lease
obligations
|
|
7,180
|
|
|
7,550
|
|
Unfavorable operating
leases acquired
|
|
9,780
|
|
|
11,378
|
|
Deferred
income
|
|
11,158
|
|
|
12,154
|
|
Deferred income
taxes, net
|
|
315,249
|
|
|
461,810
|
|
Other long-term
liabilities
|
|
77,823
|
|
|
71,549
|
|
Total long-term
liabilities
|
|
3,457,047
|
|
|
2,966,439
|
|
Stockholders' equity
(deficit):
|
|
|
|
|
Preferred
stock
|
|
—
|
|
|
—
|
|
Common
stock
|
|
90
|
|
|
91
|
|
Additional
paid-in-capital
|
|
724,114
|
|
|
807,492
|
|
Treasury stock, at
cost
|
|
(1,060)
|
|
|
(1,060)
|
|
Accumulated
deficit
|
|
(705,007)
|
|
|
(945,797)
|
|
Accumulated other
comprehensive loss
|
|
(9,690)
|
|
|
(23,984)
|
|
Stockholders' equity
(deficit)
|
|
8,447
|
|
|
(163,258)
|
|
Total liabilities and
stockholders' equity (deficit)
|
|
$
|
3,937,384
|
|
|
3,227,382
|
|
DUNKIN' BRANDS
GROUP, INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows
|
(In
thousands)
|
(Unaudited)
|
|
|
|
Fiscal year
ended
|
|
|
December 30,
2017
|
|
December 31,
2016
|
|
|
(52
weeks)
|
|
(53
weeks)
|
|
|
|
|
|
Net cash provided by
operating activities(a)
|
|
$
|
276,908
|
|
|
276,827
|
|
Cash flows from
investing activities:
|
|
|
|
|
Additions to property
and equipment
|
|
(14,606)
|
|
|
(15,174)
|
|
Proceeds from sale of
real estate and company-operated restaurants
|
|
854
|
|
|
20,523
|
|
Other, net
|
|
(102)
|
|
|
(4,006)
|
|
Net cash provided by
(used in) investing activities
|
|
(13,854)
|
|
|
1,343
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
issuance of long-term debt
|
|
1,400,000
|
|
|
—
|
|
Repayment of
long-term debt
|
|
(754,375)
|
|
|
(25,000)
|
|
Payment of debt
issuance and other debt-related costs
|
|
(18,441)
|
|
|
—
|
|
Dividends paid on
common stock
|
|
(117,003)
|
|
|
(109,703)
|
|
Repurchases of common
stock, including accelerated share repurchases
|
|
(127,186)
|
|
|
(55,000)
|
|
Exercise of stock
options
|
|
36,344
|
|
|
10,647
|
|
Other, net
|
|
(698)
|
|
|
(122)
|
|
Net cash provided by
(used in) financing activities(a)
|
|
418,641
|
|
|
(179,178)
|
|
Effect of exchange
rates on cash, cash equivalents, and restricted
cash(a)
|
|
572
|
|
|
(275)
|
|
Increase in cash,
cash equivalents, and restricted cash
|
|
682,267
|
|
|
98,717
|
|
Cash, cash
equivalents, and restricted cash, beginning of
period(a)
|
|
431,832
|
|
|
333,115
|
|
Cash, cash
equivalents, and restricted cash, end of
period(a)
|
|
$
|
1,114,099
|
|
|
431,832
|
|
|
(a) Changes in restricted cash that
have historically been included within operating and financing
activities have been eliminated, and restricted cash is combined
with cash and cash equivalents when reconciling the beginning and
end of period balances. Additionally, the impact of excess tax
benefits from share-based compensation have been reclassified from
financing activities to operating activities. These changes were
made based on the adoption of new accounting standards. The prior
period has been revised to conform to the current period
presentation for all such changes.
|
DUNKIN' BRANDS
GROUP, INC. AND SUBSIDIARIES
|
Non-GAAP
Reconciliations
|
(In thousands, except
share and per share data)
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Fiscal year
ended
|
|
|
December 30,
2017
|
|
December 31,
2016
|
|
December 30,
2017
|
|
December 31,
2016
|
|
|
(13
weeks)
|
|
(14
weeks)
|
|
(52
weeks)
|
|
(53
weeks)
|
Operating
income
|
|
$
|
120,126
|
|
|
113,880
|
|
|
447,002
|
|
|
414,714
|
|
Operating income
margin
|
|
52.9
|
%
|
|
52.8
|
%
|
|
51.9
|
%
|
|
50.0
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
Amortization of other
intangible assets
|
|
$
|
5,334
|
|
|
5,353
|
|
|
21,335
|
|
|
22,079
|
|
Long-lived asset
impairment charges
|
|
974
|
|
|
45
|
|
|
1,617
|
|
|
149
|
|
Transaction-related
costs(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
Bertico-related
litigation(b)
|
|
(2,898)
|
|
|
—
|
|
|
(2,898)
|
|
|
(428)
|
|
Adjusted operating
income
|
|
$
|
123,536
|
|
|
119,278
|
|
|
467,056
|
|
|
436,578
|
|
Adjusted operating
income margin
|
|
54.4
|
%
|
|
55.3
|
%
|
|
54.3
|
%
|
|
52.7
|
%
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Dunkin' Brands
|
|
$
|
195,492
|
|
|
56,120
|
|
|
350,909
|
|
|
195,576
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Amortization of other
intangible assets
|
|
5,334
|
|
|
5,353
|
|
|
21,335
|
|
|
22,079
|
|
Long-lived asset
impairment charges
|
|
974
|
|
|
45
|
|
|
1,617
|
|
|
149
|
|
Transaction-related
costs(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
Bertico-related
litigation(b)
|
|
(2,898)
|
|
|
—
|
|
|
(2,898)
|
|
|
(428)
|
|
Loss on debt
extinguishment and refinancing transactions
|
|
6,996
|
|
|
—
|
|
|
6,996
|
|
|
—
|
|
Tax impact of
adjustments(c)
|
|
(4,162)
|
|
|
(2,160)
|
|
|
(10,820)
|
|
|
(8,746)
|
|
Impact of tax
reform(d)
|
|
(143,382)
|
|
|
—
|
|
|
(143,382)
|
|
|
—
|
|
Adjusted net
income
|
|
$
|
58,354
|
|
|
59,358
|
|
|
223,757
|
|
|
208,694
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
|
$
|
58,354
|
|
|
59,358
|
|
|
223,757
|
|
|
208,694
|
|
Weighted average
number of common shares – diluted
|
|
91,765,911
|
|
|
92,518,754
|
|
|
92,231,436
|
|
|
92,538,282
|
|
Diluted adjusted
earnings per share
|
|
$
|
0.64
|
|
|
0.64
|
|
|
2.43
|
|
|
2.26
|
|
|
|
|
|
|
|
|
|
|
(a) Represents
non-capitalizable costs incurred as a result of the securitized
financing facility, which was completed in January 2015.
|
(b) Adjustments for
the three months and fiscal year ended December 30, 2017 represent
a reduction to legal reserves for Bertico-related litigation based
upon final settlement of such matters. Adjustment for the fiscal
year ended December 31, 2016 represents a net reduction to legal
reserves for the Bertico litigation and related matters based upon
final agreement of interest and related costs associated with the
judgment.
|
(c) Tax impact of
adjustments calculated at a 40% effective tax rate.
|
(d) Net tax benefit
due to the enactment of the Tax Act during the three months ended
December 30, 2017, consisting primarily of the re-measurement of
deferred tax liabilities using the lower enacted corporate tax
rate.
|
DUNKIN' BRANDS
GROUP, INC. AND SUBSIDIARIES
|
Non-GAAP
Reconciliations (continued)
|
(In thousands, except
per share data)
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Fiscal year
ended
|
|
|
December 30,
2017
|
|
December 31,
2016
|
|
%
|
|
December 30,
2017
|
|
December 31,
2016
|
|
%
|
Total
revenues
|
|
$
|
227,139
|
|
|
215,705
|
|
|
5.3
|
%
|
|
860,501
|
|
|
828,889
|
|
|
3.8
|
%
|
Impact of extra
week(a)
|
|
—
|
|
|
(8,756)
|
|
|
|
|
—
|
|
|
(8,756)
|
|
|
|
Total revenues,
13-week / 52-week basis
|
|
$
|
227,139
|
|
|
206,949
|
|
|
9.8
|
%
|
|
860,501
|
|
|
820,133
|
|
|
4.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
120,126
|
|
|
113,880
|
|
|
5.5
|
%
|
|
447,002
|
|
|
414,714
|
|
|
7.8
|
%
|
Impact of extra
week(a)
|
|
—
|
|
|
(6,112)
|
|
|
|
|
—
|
|
|
(6,112)
|
|
|
|
Operating income,
13-week / 52-week
basis
|
|
$
|
120,126
|
|
|
107,768
|
|
|
11.5
|
%
|
|
447,002
|
|
|
408,602
|
|
|
9.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
$
|
123,536
|
|
|
119,278
|
|
|
3.6
|
%
|
|
467,056
|
|
|
436,578
|
|
|
7.0
|
%
|
Impact of extra
week(a)
|
|
—
|
|
|
(6,112)
|
|
|
|
|
—
|
|
|
(6,112)
|
|
|
|
Adjusted operating
income, 13-week /
52-week basis
|
|
$
|
123,536
|
|
|
113,166
|
|
|
9.2
|
%
|
|
467,056
|
|
|
430,466
|
|
|
8.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Dunkin' Brands
|
|
$
|
195,492
|
|
|
56,120
|
|
|
248.3
|
%
|
|
350,909
|
|
|
195,576
|
|
|
79.4
|
%
|
Impact of extra
week(a)
|
|
—
|
|
|
(4,247)
|
|
|
|
|
—
|
|
|
(4,247)
|
|
|
|
Tax impact of extra
week(b)
|
|
—
|
|
|
1,699
|
|
|
|
|
—
|
|
|
1,699
|
|
|
|
Net income,
13-week / 52-week basis
|
|
$
|
195,492
|
|
|
53,572
|
|
|
264.9
|
%
|
|
350,909
|
|
|
193,028
|
|
|
81.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
|
$
|
58,354
|
|
|
59,358
|
|
|
(1.7)
|
%
|
|
223,757
|
|
|
208,694
|
|
|
7.2
|
%
|
Impact of extra
week(a)
|
|
—
|
|
|
(4,247)
|
|
|
|
|
—
|
|
|
(4,247)
|
|
|
|
Tax impact of extra
week(b)
|
|
—
|
|
|
1,699
|
|
|
|
|
—
|
|
|
1,699
|
|
|
|
Adjusted net
income, 13-week / 52-week
basis
|
|
$
|
58,354
|
|
|
56,810
|
|
|
2.7
|
%
|
|
223,757
|
|
|
206,146
|
|
|
8.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
2.13
|
|
|
0.61
|
|
|
249.2
|
%
|
|
3.80
|
|
|
2.11
|
|
|
80.1
|
%
|
Impact of extra
week(a)
|
|
—
|
|
|
(0.05)
|
|
|
|
|
—
|
|
|
(0.05)
|
|
|
|
Tax impact of extra
week(b)
|
|
—
|
|
|
0.02
|
|
|
|
|
—
|
|
|
0.02
|
|
|
|
Diluted earnings
per share, 13-week /
52-week basis
|
|
$
|
2.13
|
|
|
0.58
|
|
|
267.2
|
%
|
|
3.80
|
|
|
2.08
|
|
|
82.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted adjusted
earnings per share
|
|
$
|
0.64
|
|
|
0.64
|
|
|
—
|
%
|
|
2.43
|
|
|
2.26
|
|
|
7.5
|
%
|
Impact of extra
week(a)
|
|
—
|
|
|
(0.05)
|
|
|
|
|
—
|
|
|
(0.05)
|
|
|
|
Tax impact of extra
week(b)
|
|
—
|
|
|
0.02
|
|
|
|
|
—
|
|
|
0.02
|
|
|
|
Diluted adjusted
earnings per share, 13-week /
52-week basis
|
|
$
|
0.64
|
|
|
0.61
|
|
|
4.9
|
%
|
|
2.43
|
|
|
2.23
|
|
|
9.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The three months
and fiscal year ended December 31, 2016 include 14 weeks and 53
weeks, respectively, as compared to 13 weeks and 52 weeks for the
three months and fiscal year ended December 30, 2017, respectively.
The impact of the extra week in the three months and fiscal year
ended December 31, 2016 reflects our estimate of the additional
week in those fiscal periods on certain revenues and
expenses.
|
(b) Tax impact of
adjustments for the extra week calculated at a 40% effective tax
rate.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/dunkin-brands-reports-fourth-quarter-and-fiscal-year-2017-results-300593804.html
SOURCE Dunkin' Brands Group, Inc.