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8-K - FORM 8-K - DUNKIN' BRANDS GROUP, INC.d339983d8k.htm
EX-99.2 - PRESS RELEASE - DUNKIN' BRANDS GROUP, INC.d339983dex992.htm

Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

Dunkin’ Brands Reports First Quarter 2012 Results

 

   

Revenue up 9.5% and adjusted operating income up 19.8%

 

   

Dunkin’ Donuts U.S. comp store sales increase 7.2%

 

   

Baskin-Robbins U.S. comp store sales increase 9.4%

CANTON, Mass. (April 26, 2012) – Dunkin’ Brands Group, Inc. (Nasdaq: DNKN), the parent company of Dunkin’ Donuts (DD) and Baskin-Robbins (BR), today reported results for the first quarter ended March 31, 2012. “We’re pleased with the performance of the business in the first quarter during which we had continued strong revenue and operating income growth. Our core Dunkin’ Donuts U.S. segment is thriving with 7.2 percent comp store sales growth and accelerating net development compared to the first quarter of 2011,” said Nigel Travis, Chief Executive Officer, Dunkin’ Brands Group, Inc., and President, Dunkin’ Donuts U.S. “We also recently announced several exciting strategic developments including an agreement with The Coca-Cola Company to serve its products in Dunkin’ Donuts and Baskin-Robbins restaurants in the U.S., an agreement with NBA star LeBron James to serve as a brand ambassador in select Southeast Asia markets for both brands, and signing a partnership with Dallas Cowboys Owner Jerry Jones and Hall of Fame quarterback Troy Aikman to develop Dunkin’ Donuts restaurants in the Dallas/Fort Worth region.”

Consolidated Key Highlights

 

      Quarter 1     Increase (Decrease)  
($ in millions, except per share data)    2012     2011     $/#     %  

System-wide Sales Growth

     10.9     5.4    

DD U.S. Comparable Store Sales Growth

     7.2     2.8    

BR U.S. Comparable Store Sales Growth

     9.4     0.5    

DD International Comparable Store Sales Growth

     2.3      

BR International Comparable Store Sales Growth

     7.6      

Consolidated Net POD Development1

     82        94        (12     -12.8

DD Global PODs at period end

     10,121        9,805        316        3.2

BR Global PODs at period end

     6,755        6,482        273        4.2

Consolidated Global PODs at period end

     16,876        16,287        589        3.6

Revenues

   $ 152.4        139.2        13.2        9.5

Operating Income

     55.2        44.8        10.4        23.1

Adjusted Operating Income2

     63.0        52.6        10.4        19.8

Net Income (Loss)

     26.0        (1.7     27.7        n/a   

Adjusted Net Income2

     30.6        9.5        21.1        221.6

Earnings (Loss) Per Share—Basic and Diluted

        

Class L—basic and diluted

     n/a      $ 0.85        n/a        n/a   

Common—basic

   $ 0.22        (0.51     0.73        n/a   

Common—diluted

     0.21        (0.51     0.72        n/a   

Diluted Adjusted Earnings per Pro Forma Common Share2

   $ 0.25        0.10        0.15        150.0

Pro Forma Weighted Average Number of Common Shares – Diluted (in millions)

     121.3        97.4        23.9        24.6

(amounts and percentages may not recalculate due to rounding)

 

1

Total DD U.S net development for the quarter was 45; total BR International net development for the quarter was 49; DD International and BR U.S. had declining store bases during the quarter.


2

Adjusted operating income and adjusted net income are non-GAAP measures reflecting operating income and net income adjusted for amortization of intangible assets, impairment charges, and other non-recurring charges, net of the tax impact of such adjustments in the case of adjusted net income. Diluted adjusted earnings per pro forma common share is a non-GAAP measure, calculated using adjusted net income, and gives effect to the conversion of Class L common stock as if the conversion were completed at the beginning of the respective fiscal period. Please refer to “Non-GAAP Measures and Statistical Data,” “Dunkin’ Brands Group, Inc. Non-GAAP Reconciliations,” and “Dunkin’ Brands Group, Inc. Diluted Adjusted Earnings per Pro Forma Common Share” for further detail.

Worldwide system-wide sales growth in the first quarter was primarily attributable to Dunkin’ Donuts U.S. comparable store sales growth (which includes stores open 54 weeks or more), global store development, and growth in Baskin-Robbins international sales.

Dunkin’ Donuts U.S. comparable store sales gains in the first quarter were driven by increased average ticket and higher traffic resulting from strong beverage sales growth including gains across all cold beverages; differentiated breakfast and afternoon sandwich offerings such as the Angus Steak, Egg and Cheese Breakfast Sandwich and the Turkey, Bacon and Cheddar, and Ham and Cheese Bakery Sandwiches; sales of Dunkin’ Donuts K-Cup portion packs; and the “What Are You Drinkin’” marketing campaign.

Baskin-Robbins U.S. comparable store sales growth was driven by new product news around Valentine’s Day Cake Bites, a new “More Flavors, More Fun” advertising campaign, and improved operational execution.

In the first quarter, Dunkin’ Brands franchisees and licensees opened 82 net new restaurants across the globe. This includes 45 net new Dunkin’ Donuts U.S. locations and 49 net new Baskin-Robbins International locations. Both Baskin-Robbins U.S. and Dunkin’ Donuts International experienced declining store counts in the first quarter. Additionally, Dunkin’ Donuts U.S. franchisees remodeled 108 restaurants during the quarter.

Revenues grew by 9.5 percent compared to the first quarter of 2011, primarily from increased royalty income driven by the increase in system-wide sales.

Operating income and adjusted operating income increased $10.4 million, or 23.1 percent, and $10.4 million, or 19.8 percent, respectively, from the first quarter of 2011 primarily as a result of the increase in revenues and higher income from our joint ventures.

Net income and adjusted net income increased by $27.7 million and $21.1 million, respectively, compared to the first quarter of 2011 as a result of the increase in operating income and a decrease in interest expense associated with the refinancings completed last year and the repayment of our debt with the proceeds from our initial public offering.

Company Updates & Fiscal Year 2012 Targets

On March 5, 2012, the Company’s Board of Directors approved the initiation of a quarterly cash dividend with the first quarter cash dividend of $0.15 per share paid on March 28, 2012 to shareholders of record as of the close of business on March 19, 2012. The Company today announced that the Board of Directors declared a second quarter cash dividend of $0.15 per share, payable on May 16, 2012 to shareholders of record as of the close of business on May 7, 2012.

Additionally, as described below, the Company is increasing certain targets and reaffirming others that it has previously provided regarding its 2012 performance.


   

It expects Dunkin’ Donuts U.S. comparable store sales growth to be in the range of 4 to 5 percent and Baskin-Robbins U.S. comparable store sales growth to be in the range of 2 to 4 percent.

 

   

The Company continues to target opening 550 to 650 net new units globally. It expects that Dunkin’ Donuts U.S. will add between 260 and 280 net new restaurants and Baskin-Robbins U.S. will close between 60 and 80 restaurants. Internationally, the Company continues to target 350 to 450 net new units between the two brands.

 

   

The Company is increasing its range for revenue growth to between 7 and 8 percent with adjusted operating income growth of between 12 and 14 percent. The targets for revenue and adjusted operating income growth are based on a 52-week year in 2011.

 

   

The Company is increasing its range for adjusted earnings per share to $1.21 to $1.24 which would represent 29 to 32 percent growth over $0.94 adjusted earnings per share in 2011.

“The fundamentals of the business are extremely strong, and we remain laser-focused on our strategic imperatives — operational excellence, brand-differentiating product innovation and world-class marketing,” said Neil Moses, Dunkin’ Brands Chief Financial Officer. “We remain committed to delivering on our financial targets for the year and to enhancing shareholder value.”

###

Conference Call

As previously announced, Dunkin’ Brands will be holding a conference call today at 8:00 am ET hosted by Chief Executive Officer, Nigel Travis, and Chief Financial Officer, Neil Moses. The dial-in number is (866) 393-1607 or (914) 495-8556, conference number 70918022. Dunkin’ Brands will broadcast the conference call live over the Internet at http://investor.dunkinbrands.com. A replay of the conference call will be available on the Company’s website at http://investor.dunkinbrands.com.

The Company’s consolidated statements of operations, condensed consolidated balance sheets, condensed consolidated statements of cash flows and other additional information have been provided with this press release. This information should be reviewed in conjunction with this press release.

Forward-Looking Statements

Certain statements contained herein are not based on historical fact and are “forward-looking statements” within the meaning of the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These risk and uncertainties include, but are not limited to: the ongoing level of profitability of franchisees and licensees; 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 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, adjusted operating income, adjusted net income, and diluted adjusted earnings per pro forma common share, which present operating results on a basis adjusted for certain items and/or reflecting the conversion of our previously outstanding Class L common stock into shares of common stock. 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 net income, and diluted adjusted earnings per pro forma common share may differ from similar measures reported by other companies. Adjusted operating income and adjusted net income are reconciled from the respective measures determined under GAAP in the attached table “Dunkin’ Brands Group, Inc. Non-GAAP Reconciliation.”

On August 1, 2011, the Company completed an initial public offering in which the Company sold 22,250,000 shares of common stock at an initial public offering price of $19.00 per share. Immediately prior to the offering, each share of the Company’s Class L common stock converted into 2.4338 shares of common stock. The number of common shares used in the calculation of diluted adjusted earnings per pro forma common share for the three months ended March 26, 2011 gives effect to the conversion of all outstanding shares of Class L common stock at the conversion factor of 2.4338 common shares for each Class L share, as if the conversion was completed at the beginning of the fiscal period. The calculation of diluted adjusted earnings per pro forma common share also includes the dilutive effect of common restricted shares and stock options, using the treasury stock method. Diluted adjusted earnings per pro forma common share is calculated using adjusted net income, as defined above. See the attached table “Dunkin’ Brands Group, Inc. Diluted Adjusted Earnings per Pro Forma Common Share” for further detail.

Additionally, the Company has included metrics such as system-wide sales growth and comparable store sales growth, which are commonly used statistical measures in the quick-service restaurant industry and are important to understanding Company performance.

The Company uses “System-wide sales growth” to refer to the percentage change in sales at both franchisee- and company-owned restaurants from the comparable period of the prior year. Changes in system-wide sales are driven by changes in average comparable store sales and changes in the number of restaurants.

The Company uses “DD U.S. comparable store sales growth,” “BR U.S. comparable store sales growth” and “International comparable store sales growth,” which are calculated by including only sales from franchisee- and company-owned restaurants that have been open at least 54 weeks and that have reported sales in the current and comparable prior year week.

About Dunkin’ Brands

With more than 16,800 points of distribution in nearly 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 2011, Dunkin’ Brands’ nearly 100 percent franchised business model included more than 10,000 Dunkin’ Donuts restaurants and more than 6,700 Baskin-Robbins restaurants. For the full-year 2011, the company had franchisee-reported sales of approximately $8.3 billion. Dunkin’ Brands Group, Inc. is headquartered in Canton, Mass.


Contact(s):

 

  Stacey Caravella (Investors)

  Director, Investor Relations

  Dunkin’ Brands, Inc.

  investor.relations@dunkinbrands.com

  781-737-3200

  

 

Karen Raskopf (Media)

SVP, Corporate Communications

Dunkin’ Brands, Inc.

karen.raskopf@dunkinbrands.com

781-737-5200


     Three months ended              
     March 31,     March 26,     Increase (Decrease)  

Dunkin’ Donuts U.S.

   2012     2011     $     %  
     ($ in thousands except as otherwise noted)  

Comparable store sales growth

     7.2     2.8    

Systemwide sales growth

     11.5     5.3    

Franchisee reported sales (in millions)

   $ 1,446.2        1,299.0        147.3        11.3

Revenues:

        

Royalty income

   $ 77,852        69,305        8,547        12.3

Franchise fees

     6,206        5,210        996        19.1

Rental income

     21,675        20,664        1,011        4.9

Other revenues

     5,321        3,329        1,992        59.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

   $ 111,054        98,508        12,546        12.7

Segment profit

   $ 79,941        70,707        9,234        13.1

Points of distribution

     7,060        6,799        261        3.8

Gross openings

     65        52        13        25.0

Net openings

     45        27        18        66.7
     Three months ended              
     March 31,     March 26,     Increase (Decrease)  

Dunkin’ Donuts International

   2012     2011     $     %  
     ($ in thousands except as otherwise noted)  

Comparable store sales growth

     2.3      

Systemwide sales growth

     4.8     10.0    

Franchisee reported sales (in millions)

   $ 160.5        153.1        7.3        4.8

Revenues:

        

Royalty income

   $ 3,458        3,106        352        11.3

Franchise fees

     271        673        (402     -59.7

Rental income

     45        85        (40     -47.1

Other revenues

     174        5        169        3380.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

   $ 3,948        3,869        79        2.0

Segment profit

   $ 3,161        3,181        (20     -0.6

Points of distribution

     3,061        3,006        55        1.8

Gross openings

     95        84        11        13.1

Net openings (closings)

     (7     18        (25     -138.9
     Three months ended              
     March 31,     March 26,     Increase (Decrease)  

Baskin Robbins U.S.

   2012     2011     $     %  
     ($ in thousands except as otherwise noted)  

Comparable store sales growth

     9.4     0.5    

Systemwide sales growth

     10.8     0.4    

Franchisee reported sales (in millions)

   $ 114.0        102.9        11.1        10.8

Revenues:

        

Royalty income

   $ 5,814        5,108        706        13.8

Franchise fees

     170        376        (206     -54.8

Rental income

     1,043        1,218        (175     -14.4

Sales of ice cream products

     948        906        42        4.6

Other revenues

     1,877        1,843        34        1.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

   $ 9,852        9,451        401        4.2

Segment profit

   $ 5,457        4,475        982        21.9

Points of distribution

     2,488        2,559        (71     -2.8

Gross openings

     6        9        (3     -33.3

Net closings

     (5     (26     21        -80.8
     Three months ended              
     March 31,     March 26,     Increase (Decrease)  

Baskin Robbins International

   2012     2011     $     %  
     ($ in thousands except as otherwise noted)  

Comparable store sales growth

     7.6      

Systemwide sales growth

     11.6     5.1    

Franchisee reported sales (in millions)

   $ 263.0        235.8        27.2        11.6

Revenues:

        

Royalty income

   $ 2,007        1,836        171        9.3

Franchise fees

     266        345        (79     -22.9

Rental income

     149        151        (2     -1.3

Sales of ice cream products

     21,775        21,810        (35     -0.2

Other revenues

     44        114        (70     -61.4
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

   $ 24,241        24,256        (15     -0.1

Segment profit

   $ 7,282        7,987        (705     -8.8

Points of distribution

     4,267        3,923        344        8.8

Gross openings

     115        135        (20     -14.8

Net openings

     49        75        (26     -34.7


Fiscal year totals may not recalculate due to rounding

 

     Q1     Q2     Q3     Q4     Fiscal Year  

Dunkin’ Donuts U.S.

   2011     2011     2011     2011     2011  
     ($ in thousands except as otherwise noted)  

Comparable store sales growth

     2.8     3.8     6.0     7.4     5.1

Systemwide sales growth

     5.3     6.0     8.3     17.4     9.4

Franchisee reported sales (in millions)

   $ 1,299.0        1,463.2        1,501.5        1,655.6        5,919.2   

Revenues:

          

Royalty income

   $ 69,305        78,321        80,659        88,918        317,203   

Franchise fees

     5,210        5,580        9,653        9,462        29,905   

Rental income

     20,664        22,665        22,259        21,002        86,590   

Other revenues

     3,329        3,660        4,295        4,510        15,794   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

   $ 98,508        110,226        116,866        123,892        449,492   

Segment profit

   $ 70,707        82,605        88,992        92,004        334,308   

Points of distribution

     6,799        6,838        6,895        7,015        7,015   

Gross openings

     52        71        91        160        374   

Net openings

     27        39        57        120        243   

 

     Q1     Q2     Q3     Q4     Fiscal Year  

Dunkin’ Donuts International

   2011     2011     2011     2011     2011  
     ($ in thousands except as otherwise noted)  

Systemwide sales growth

     10.0     10.3     13.7     2.9     9.1

Franchisee reported sales (in millions)

   $ 153.1        162.4        161.5        159.6        636.7   

Revenues:

          

Royalty income

   $ 3,106        3,191        3,175        3,185        12,657   

Franchise fees

     673        567        405        649        2,294   

Rental income

     85        79        49        45        258   

Other revenues

     5        (6     40        5        44   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

   $ 3,869        3,831        3,669        3,884        15,253   

Segment profit

   $ 3,181        3,150        2,496        2,701        11,528   

Points of distribution

     3,006        3,029        3,005        3,068        3,068   

Gross openings

     84        82        70        105        341   

Net openings (closings)

     18        23        (24     63        80   

 

     Q1     Q2     Q3     Q4     Fiscal Year  

Baskin Robbins U.S.

   2011     2011     2011     2011     2011  
     ($ in thousands except as otherwise noted)  

Comparable store sales growth

     0.5     -2.8     1.7     5.8     0.5

Systemwide sales growth

     0.4     -5.3     -0.5     11.1     0.2

Franchisee reported sales (in millions)

   $ 102.9        150.5        149.3        98.9        501.7   

Revenues:

          

Royalty income

   $ 5,108        7,509        7,488        5,072        25,177   

Franchise fees

     376        299        357        239        1,271   

Rental income

     1,218        1,184        1,180        962        4,544   

Sales of ice cream products

     906        1,022        947        905        3,780   

Other revenues

     1,843        2,808        2,451        1,581        8,683   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

   $ 9,451        12,822        12,423        8,759        43,455   

Segment profit

   $ 4,475        7,101        7,140        2,877        21,593   

Points of distribution

     2,559        2,546        2,528        2,493        2,493   

Gross openings

     9        13        12        15        49   

Net closings

     (26     (13     (18     (35     (92

 

     Q1     Q2     Q3     Q4     Fiscal Year  

Baskin Robbins International

   2011     2011     2011     2011     2011  
     ($ in thousands except as otherwise noted)  

Systemwide sales growth

     5.1     15.6     13.2     10.9     11.7

Franchisee reported sales (in millions)

   $ 235.8        352.2        389.5        308.8        1,286.3   

Revenues:

          

Royalty income

   $ 1,836        2,292        2,489        1,805        8,422   

Franchise fees

     345        380        336        532        1,593   

Rental income

     151        153        157        155        616   

Sales of ice cream products

     21,810        24,203        24,644        25,631        96,288   

Other revenues

     114        (89     44        (101     (32
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

   $ 24,256        26,939        27,670        28,022        106,887   

Segment profit

   $ 7,987        10,279        14,276        10,302        42,844   

Points of distribution

     3,923        4,014        4,097        4,218        4,218   

Gross openings

     135        148        126        162        571   

Net openings

     75        91        83        121        370   


DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

     Three months ended  
     March 31,     March 26,  
     2012     2011  

Revenues:

    

Franchise fees and royalty income

   $ 96,044        85,959   

Rental income

     22,939        22,131   

Sales of ice cream products

     22,723        22,716   

Other revenues

     10,666        8,407   
  

 

 

   

 

 

 

Total revenues

     152,372        139,213   
  

 

 

   

 

 

 

Operating costs and expenses:

    

Occupancy expenses—franchised restaurants

     12,920        12,288   

Cost of ice cream products

     16,818        15,124   

General and administrative expenses, net

     57,840        53,886   

Depreciation

     6,189        6,126   

Amortization of other intangible assets

     6,865        7,082   

Impairment charges

     9        653   
  

 

 

   

 

 

 

Total operating costs and expenses

     100,641        95,159   

Equity in net income of joint ventures:

     3,464        782   
  

 

 

   

 

 

 

Operating income

     55,195        44,836   
  

 

 

   

 

 

 

Other income (expense):

    

Interest income

     118        115   

Interest expense

     (16,696     (33,882

Loss on debt extinguishment and refinancing transactions

     —          (11,007

Other gains, net

     60        476   
  

 

 

   

 

 

 

Total other expense

     (16,518     (44,298
  

 

 

   

 

 

 

Income before income taxes

     38,677        538   

Provision for income taxes

     12,763        2,261   
  

 

 

   

 

 

 

Net income (loss) including noncontrolling interests

     25,914        (1,723

Net loss attributable to noncontrolling interests

     (36     —     
  

 

 

   

 

 

 

Net income (loss) attributable to Dunkin’ Brands Group, Inc.

   $ 25,950        (1,723
  

 

 

   

 

 

 

Earnings (loss) per share:

    

Class L—basic and diluted

     n/a      $ 0.85   

Common—basic

   $ 0.22        (0.51

Common—diluted

     0.21        (0.51


DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

     March 31,      December 31,  
     2012      2011  
Assets      

Current assets:

     

Cash and cash equivalents

   $ 206,005         246,715   

Accounts, notes, and other receivables, net

     44,798         58,787   

Other current assets

     104,051         100,972   
  

 

 

    

 

 

 

Total current assets

     354,854         406,474   

Property and equipment, net

     184,920         185,360   

Investments in joint ventures

     157,374         164,636   

Goodwill and other intangible assets, net

     2,391,607         2,398,211   

Other assets

     69,206         69,337   
  

 

 

    

 

 

 

Total assets

   $ 3,157,961         3,224,018   
  

 

 

    

 

 

 

Liabilities, Common Stock, and Stockholders’ Equity

     

Current liabilities:

     

Current portion of long-term debt

   $ 16,000         14,965   

Accounts payable

     7,662         9,651   

Other current liabilities

     232,242         291,924   
  

 

 

    

 

 

 

Total current liabilities

     255,904         316,540   
  

 

 

    

 

 

 

Long-term debt, net

     1,446,072         1,453,344   

Deferred income taxes, net

     575,111         578,660   

Other long-term liabilities

     131,536         129,538   
  

 

 

    

 

 

 

Total long-term liabilities

     2,152,719         2,161,542   
  

 

 

    

 

 

 

Total stockholders’ equity

     749,338         745,936   
  

 

 

    

 

 

 

Total liabilities, common stock, and stockholders’ equity

   $ 3,157,961         3,224,018   
  

 

 

    

 

 

 


DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

     Three months ended  
     March 31,     March 26,  
     2012     2011  

Cash flows from operating activities:

    

Net income (loss) including noncontrolling interests

   $ 25,914        (1,723

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

    

Depreciation and amortization

     13,054        13,208   

Loss on debt extinguishment and refinancing transactions

     —          11,007   

Deferred income taxes

     (3,649     726   

Equity in net income of joint ventures

     (3,464     (782

Dividends received from joint ventures

     4,389        —     

Other non-cash adjustments, net

     952        2,108   

Change in operating assets and liabilities:

    

Restricted cash

     —          —     

Accounts, notes, and other receivables, net

     14,814        31,480   

Other current liabilities

     (64,975     (41,696

Liabilities of advertising funds, net

     819        (6,926

Other, net

     (292     (3,808
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     (12,438     3,594   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Additions to property and equipment

     (4,279     (3,734

Other, net

     (651     301   
  

 

 

   

 

 

 

Net cash used in investing activities

     (4,930     (3,433
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Repayment of long-term debt, net

     (6,441     (750

Payment of deferred financing and other debt-related costs

     —          (16,209

Proceeds from issuance of common stock, net

     —          3,213   

Dividend payments to common shareholders

     (18,046     —     

Other, net

     939        (88
  

 

 

   

 

 

 

Net cash used in financing activities

     (23,548     (13,834
  

 

 

   

 

 

 

Effect of exchange rates on cash and cash equivalents

     206        81   
  

 

 

   

 

 

 

Decrease in cash and cash equivalents

     (40,710     (13,592

Cash and cash equivalents, beginning of period

     246,715        134,100   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 206,005        120,508   
  

 

 

   

 

 

 


DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES

Diluted Adjusted Earnings per Pro Forma Common Share

(In thousands, except share and per share data)

(Unaudited)

 

     Three months ended  
     March 31,     March 26,  
     2012     2011  

Adjusted net income available to common shareholders:

    

Adjusted net income

   $ 30,623        9,522   

Less: Adjusted net income allocated to participating securities

     (71     (92
  

 

 

   

 

 

 

Adjusted net income available to common shareholders

     30,552        9,430   

Pro forma weighted average number of common shares – diluted:

    

Weighted average number of Class L shares

     —          22,817,115   

Class L conversion factor

     —          2.4338   
  

 

 

   

 

 

 

Weighted average number of converted Class L shares

     —          55,532,882   

Weighted average number of common shares

     119,682,197        41,370,341   
  

 

 

   

 

 

 

Pro forma weighted average number of common shares – basic

     119,682,197        96,903,223   

Incremental dilutive common shares (a)

     1,633,983        463,452   
  

 

 

   

 

 

 

Pro forma weighted average number of common shares – diluted

     121,316,180        97,366,675   
  

 

 

   

 

 

 

Diluted adjusted earnings per pro forma common share

   $ 0.25        0.10   
  

 

 

   

 

 

 

 

(a)

Represents the dilutive effect of restricted shares and stock options, using the treasury stock method.


DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES

Non-GAAP Reconciliations

(In thousands)

(Unaudited)

 

     Three months ended  
     March 31,     March 26,  
     2012     2011  

Operating income

   $ 55,195        44,836   

Operating income margin

     36.2     32.2

Adjustments:

    

Amortization of other intangible assets

     6,865        7,082   

Impairment charges

     9        653   

Secondary offering costs

     914        —     
  

 

 

   

 

 

 

Adjusted operating income

   $ 62,983        52,571   
  

 

 

   

 

 

 

Adjusted operating income margin

     41.3     37.8

Net income (loss) attributable to Dunkin’ Brands Group, Inc.

   $ 25,950        (1,723

Adjustments:

    

Amortization of other intangible assets

     6,865        7,082   

Impairment charges

     9        653   

Secondary offering costs

     914        —     

Loss on debt extinguishment and refinancing transactions

     —          11,007   

Tax impact of adjustments (a)

     (3,115     (7,497
  

 

 

   

 

 

 

Adjusted net income

   $ 30,623        9,522   
  

 

 

   

 

 

 

 

(a)

Tax impact of adjustments calculated at a 40% effective tax rate for each period presented.