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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Dunkin Brands Group Inc | NASDAQ:DNKN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 106.48 | 106.49 | 100.00 | 0 | 01:00:00 |
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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Delaware
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20-4145825
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller Reporting Company
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¨
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Page
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Part I. – Financial Information
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Item 1.
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Item 2.
|
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Item 3.
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Item 4.
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Part II. – Other Information
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Item 1.
|
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Item 1A.
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Item 2.
|
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Item 3.
|
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Item 4.
|
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Item 5.
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Item 6.
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March 26,
2016 |
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December 26,
2015 |
|||
Assets
|
|
|
|
|||
Current assets:
|
|
|
|
|||
Cash and cash equivalents
|
$
|
223,524
|
|
|
260,430
|
|
Restricted cash
|
67,665
|
|
|
71,917
|
|
|
Accounts receivable, net of allowance for doubtful accounts of $5,846 and $5,627 as of March 26, 2016 and December 26, 2015, respectively
|
52,310
|
|
|
53,142
|
|
|
Notes and other receivables, net of allowance for doubtful accounts of $662 and $1,007 as of March 26, 2016 and December 26, 2015, respectively
|
22,043
|
|
|
75,218
|
|
|
Restricted assets of advertising funds
|
40,544
|
|
|
38,554
|
|
|
Prepaid income taxes
|
18,651
|
|
|
23,899
|
|
|
Prepaid expenses and other current assets
|
32,507
|
|
|
34,664
|
|
|
Total current assets
|
457,244
|
|
|
557,824
|
|
|
Property and equipment, net of accumulated depreciation of $115,112 and $111,625 as of March 26, 2016 and December 26, 2015, respectively
|
180,699
|
|
|
182,614
|
|
|
Equity method investments
|
111,690
|
|
|
106,878
|
|
|
Goodwill
|
889,131
|
|
|
889,588
|
|
|
Other intangible assets, net of accumulated amortization of $244,612 and $239,715 as of March 26, 2016 and December 26, 2015, respectively
|
1,395,456
|
|
|
1,401,208
|
|
|
Other assets
|
59,714
|
|
|
59,007
|
|
|
Total assets
|
$
|
3,093,934
|
|
|
3,197,119
|
|
Liabilities and Stockholders’ Deficit
|
|
|||||
Current liabilities:
|
|
|
|
|||
Current portion of long-term debt
|
$
|
25,000
|
|
|
25,000
|
|
Capital lease obligations
|
533
|
|
|
546
|
|
|
Accounts payable
|
15,270
|
|
|
18,663
|
|
|
Liabilities of advertising funds
|
45,782
|
|
|
50,189
|
|
|
Deferred income
|
33,850
|
|
|
31,535
|
|
|
Other current liabilities
|
219,558
|
|
|
292,859
|
|
|
Total current liabilities
|
339,993
|
|
|
418,792
|
|
|
Long-term debt, net
|
2,415,909
|
|
|
2,420,600
|
|
|
Capital lease obligations
|
7,763
|
|
|
7,497
|
|
|
Unfavorable operating leases acquired
|
12,571
|
|
|
12,975
|
|
|
Deferred income
|
13,450
|
|
|
15,619
|
|
|
Deferred income taxes, net
|
471,907
|
|
|
476,510
|
|
|
Other long-term liabilities
|
66,933
|
|
|
65,869
|
|
|
Total long-term liabilities
|
2,988,533
|
|
|
2,999,070
|
|
|
Commitments and contingencies (note 10)
|
|
|
|
|||
Stockholders’ equity (deficit):
|
|
|
|
|||
Preferred stock, $0.001 par value; 25,000,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
|
Common stock, $0.001 par value; 475,000,000 shares authorized; 91,574,960 issued and 91,547,793 outstanding as of March 26, 2016; 92,668,211 shares issued and 92,641,044 shares outstanding as of December 26, 2015
|
91
|
|
|
92
|
|
|
Additional paid-in capital
|
868,284
|
|
|
876,557
|
|
|
Treasury stock, at cost; 27,167 shares as of March 26, 2016 and December 26, 2015
|
(1,075
|
)
|
|
(1,075
|
)
|
|
Accumulated deficit
|
(1,083,760
|
)
|
|
(1,076,479
|
)
|
|
Accumulated other comprehensive loss
|
(18,132
|
)
|
|
(20,046
|
)
|
|
Total stockholders’ deficit of Dunkin’ Brands
|
(234,592
|
)
|
|
(220,951
|
)
|
|
Noncontrolling interests
|
—
|
|
|
208
|
|
|
Total stockholders’ deficit
|
(234,592
|
)
|
|
(220,743
|
)
|
|
Total liabilities and stockholders’ deficit
|
$
|
3,093,934
|
|
|
3,197,119
|
|
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
Revenues:
|
|
|
|
|||
Franchise fees and royalty income
|
$
|
123,783
|
|
|
115,325
|
|
Rental income
|
23,225
|
|
|
23,627
|
|
|
Sales of ice cream and other products
|
25,891
|
|
|
23,068
|
|
|
Sales at company-operated restaurants
|
5,670
|
|
|
6,558
|
|
|
Other revenues
|
11,207
|
|
|
17,327
|
|
|
Total revenues
|
189,776
|
|
|
185,905
|
|
|
Operating costs and expenses:
|
|
|
|
|||
Occupancy expenses—franchised restaurants
|
13,196
|
|
|
13,518
|
|
|
Cost of ice cream and other products
|
17,234
|
|
|
15,346
|
|
|
Company-operated restaurant expenses
|
6,493
|
|
|
6,858
|
|
|
General and administrative expenses, net
|
61,195
|
|
|
57,840
|
|
|
Depreciation
|
5,133
|
|
|
5,110
|
|
|
Amortization of other intangible assets
|
5,761
|
|
|
6,200
|
|
|
Long-lived asset impairment charges
|
93
|
|
|
264
|
|
|
Total operating costs and expenses
|
109,105
|
|
|
105,136
|
|
|
Net income of equity method investments
|
2,964
|
|
|
2,947
|
|
|
Other operating income, net
|
1,698
|
|
|
24
|
|
|
Operating income
|
85,333
|
|
|
83,740
|
|
|
Other income (expense), net:
|
|
|
|
|||
Interest income
|
149
|
|
|
122
|
|
|
Interest expense
|
(24,881
|
)
|
|
(22,164
|
)
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
(20,554
|
)
|
|
Other losses, net
|
(370
|
)
|
|
(545
|
)
|
|
Total other expense, net
|
(25,102
|
)
|
|
(43,141
|
)
|
|
Income before income taxes
|
60,231
|
|
|
40,599
|
|
|
Provision for income taxes
|
23,077
|
|
|
15,174
|
|
|
Net income including noncontrolling interests
|
37,154
|
|
|
25,425
|
|
|
Net loss attributable to noncontrolling interests
|
—
|
|
|
(206
|
)
|
|
Net income attributable to Dunkin’ Brands
|
$
|
37,154
|
|
|
25,631
|
|
Earnings per share:
|
|
|
|
|||
Common—basic
|
$
|
0.41
|
|
|
0.26
|
|
Common—diluted
|
0.40
|
|
|
0.25
|
|
|
Cash dividends declared per common share
|
0.30
|
|
|
0.27
|
|
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
Net income including noncontrolling interests
|
$
|
37,154
|
|
|
25,425
|
|
Other comprehensive income (loss), net:
|
|
|
|
|||
Effect of foreign currency translation, net of deferred tax expense (benefit) of $(198) and $258 for the three months ended March 26, 2016 and March 28, 2015, respectively
|
2,257
|
|
|
1,379
|
|
|
Effect of interest rate swaps, net of deferred tax benefit of $217 for each of the three months ended March 26, 2016 and March 28, 2015
|
(318
|
)
|
|
(318
|
)
|
|
Other, net
|
(25
|
)
|
|
(507
|
)
|
|
Total other comprehensive income, net
|
1,914
|
|
|
554
|
|
|
Comprehensive income including noncontrolling interests
|
39,068
|
|
|
25,979
|
|
|
Comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
(206
|
)
|
|
Comprehensive income attributable to Dunkin’ Brands
|
$
|
39,068
|
|
|
26,185
|
|
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
Cash flows from operating activities:
|
|
|
|
|||
Net income including noncontrolling interests
|
$
|
37,154
|
|
|
25,425
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|||
Depreciation and amortization
|
10,894
|
|
|
11,310
|
|
|
Amortization of debt issuance costs and original issue discount
|
1,559
|
|
|
1,371
|
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
20,554
|
|
|
Deferred income taxes
|
(4,251
|
)
|
|
(6,261
|
)
|
|
Provision for (recovery of) bad debt
|
42
|
|
|
(243
|
)
|
|
Share-based compensation expense
|
4,140
|
|
|
3,672
|
|
|
Net income of equity method investments
|
(2,964
|
)
|
|
(2,947
|
)
|
|
Dividends received from equity method investments
|
746
|
|
|
5,283
|
|
|
Gain on sale of real estate
|
(1,692
|
)
|
|
—
|
|
|
Other, net
|
(617
|
)
|
|
(393
|
)
|
|
Change in operating assets and liabilities:
|
|
|
|
|||
Restricted cash
|
4,236
|
|
|
(65,772
|
)
|
|
Accounts, notes, and other receivables, net
|
53,458
|
|
|
32,397
|
|
|
Prepaid income taxes, net
|
5,276
|
|
|
13,424
|
|
|
Other current assets
|
2
|
|
|
(6,875
|
)
|
|
Accounts payable
|
(3,672
|
)
|
|
(875
|
)
|
|
Other current liabilities
|
(72,403
|
)
|
|
(45,105
|
)
|
|
Liabilities of advertising funds, net
|
(6,173
|
)
|
|
(5,038
|
)
|
|
Deferred income
|
144
|
|
|
2,534
|
|
|
Other, net
|
646
|
|
|
8,559
|
|
|
Net cash provided by (used in) operating activities
|
26,525
|
|
|
(8,980
|
)
|
|
Cash flows from investing activities:
|
|
|
|
|||
Additions to property and equipment
|
(3,184
|
)
|
|
(6,233
|
)
|
|
Proceeds from sale of real estate
|
2,645
|
|
|
—
|
|
|
Other, net
|
80
|
|
|
(1,499
|
)
|
|
Net cash used in investing activities
|
(459
|
)
|
|
(7,732
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
2,500,000
|
|
|
Repayment of long-term debt
|
(6,250
|
)
|
|
(1,818,971
|
)
|
|
Payment of debt issuance and other debt-related costs
|
—
|
|
|
(40,953
|
)
|
|
Dividends paid on common stock
|
(27,395
|
)
|
|
(25,688
|
)
|
|
Repurchases of common stock, including accelerated share repurchases
|
(30,000
|
)
|
|
(459,821
|
)
|
|
Change in restricted cash
|
(6
|
)
|
|
(6,900
|
)
|
|
Exercise of stock options
|
1,086
|
|
|
1,209
|
|
|
Excess tax benefits from share-based compensation
|
538
|
|
|
1,424
|
|
|
Other, net
|
(1,122
|
)
|
|
(886
|
)
|
|
Net cash provided by (used in) financing activities
|
(63,149
|
)
|
|
149,414
|
|
|
Effect of exchange rates on cash and cash equivalents
|
177
|
|
|
(389
|
)
|
|
Increase (decrease) in cash and cash equivalents
|
(36,906
|
)
|
|
132,313
|
|
|
Cash and cash equivalents, beginning of period
|
260,430
|
|
|
208,080
|
|
|
Cash and cash equivalents, end of period
|
$
|
223,524
|
|
|
340,393
|
|
Supplemental cash flow information:
|
|
|
|
|||
Cash paid for income taxes
|
$
|
21,720
|
|
|
6,792
|
|
Cash paid for interest
|
23,644
|
|
|
12,955
|
|
|
Noncash investing activities:
|
|
|
|
|||
Property and equipment included in accounts payable and other current liabilities
|
596
|
|
|
718
|
|
|
Purchase of leaseholds in exchange for capital lease obligations
|
389
|
|
|
—
|
|
|
Noncash financing activities:
|
|
|
|
|||
Repurchase of common stock included in accounts payable and other current liabilities
|
—
|
|
|
5,763
|
|
|
Debt issuance costs included in accounts payable and other current liabilities
|
—
|
|
|
396
|
|
|
March 26, 2016
|
|
December 26, 2015
|
|||||||||
|
Significant other observable inputs (Level 2)
|
|
Total
|
|
Significant other observable inputs (Level 2)
|
|
Total
|
|||||
Assets:
|
|
|
|
|
|
|
|
|||||
Company-owned life insurance
|
$
|
5,673
|
|
|
5,673
|
|
|
5,802
|
|
|
5,802
|
|
Total assets
|
$
|
5,673
|
|
|
5,673
|
|
|
5,802
|
|
|
5,802
|
|
Liabilities:
|
|
|
|
|
|
|
|
|||||
Deferred compensation liabilities
|
$
|
9,676
|
|
|
9,676
|
|
|
9,068
|
|
|
9,068
|
|
Total liabilities
|
$
|
9,676
|
|
|
9,676
|
|
|
9,068
|
|
|
9,068
|
|
|
March 26, 2016
|
|
December 26, 2015
|
|||||||||
|
Carrying value
|
|
Estimated fair value
|
|
Carrying value
|
|
Estimated fair value
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|||||
Long-term debt
|
$
|
2,440,909
|
|
|
2,416,141
|
|
|
2,445,600
|
|
|
2,443,687
|
|
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
Royalty income
|
$
|
113,366
|
|
|
106,121
|
|
Initial franchise fees and renewal income
|
10,417
|
|
|
9,204
|
|
|
Total franchise fees and royalty income
|
$
|
123,783
|
|
|
115,325
|
|
|
Three months ended
|
||||
|
March 26,
2016 |
|
March 28,
2015 |
||
Systemwide Points of Distribution:
|
|
|
|
||
Franchised points of distribution in operation—beginning of period
|
19,308
|
|
|
18,821
|
|
Franchised points of distribution—opened
|
301
|
|
|
298
|
|
Franchised points of distribution—closed
|
(189
|
)
|
|
(219
|
)
|
Net transfers from (to) company-operated points of distribution
|
10
|
|
|
(2
|
)
|
Franchised points of distribution in operation—end of period
|
19,430
|
|
|
18,898
|
|
Company-operated points of distribution—end of period
|
41
|
|
|
43
|
|
Total systemwide points of distribution—end of period
|
19,471
|
|
|
18,941
|
|
|
March 26,
2016 |
|
December 26,
2015 |
|||
Gift card/certificate liability
|
$
|
123,067
|
|
|
176,080
|
|
Gift card breakage liability
|
23,816
|
|
|
23,955
|
|
|
Accrued payroll and benefits
|
14,546
|
|
|
29,540
|
|
|
Accrued legal liabilities (see note 10(c))
|
19,188
|
|
|
18,267
|
|
|
Accrued interest
|
9,444
|
|
|
9,522
|
|
|
Accrued professional costs
|
2,788
|
|
|
4,814
|
|
|
Franchisee profit-sharing liability
|
3,391
|
|
|
8,406
|
|
|
Other
|
23,318
|
|
|
22,275
|
|
|
Total other current liabilities
|
$
|
219,558
|
|
|
292,859
|
|
|
Revenues
|
|||||
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
Dunkin’ Donuts U.S.
|
$
|
138,813
|
|
|
133,867
|
|
Dunkin’ Donuts International
|
7,250
|
|
|
6,578
|
|
|
Baskin-Robbins U.S.
|
10,561
|
|
|
10,309
|
|
|
Baskin-Robbins International
|
26,834
|
|
|
23,130
|
|
|
Total reportable segment revenues
|
183,458
|
|
|
173,884
|
|
|
Other
|
6,318
|
|
|
12,021
|
|
|
Total revenues
|
$
|
189,776
|
|
|
185,905
|
|
|
Segment profit
|
|||||
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
Dunkin’ Donuts U.S.
|
$
|
100,444
|
|
|
93,714
|
|
Dunkin’ Donuts International
|
3,758
|
|
|
3,674
|
|
|
Baskin-Robbins U.S.
|
7,300
|
|
|
6,088
|
|
|
Baskin-Robbins International
|
8,384
|
|
|
7,057
|
|
|
Total reportable segments
|
119,886
|
|
|
110,533
|
|
|
Corporate
|
(28,699
|
)
|
|
(20,329
|
)
|
|
Interest expense, net
|
(24,732
|
)
|
|
(22,042
|
)
|
|
Amortization of other intangible assets
|
(5,761
|
)
|
|
(6,200
|
)
|
|
Long-lived asset impairment charges
|
(93
|
)
|
|
(264
|
)
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
(20,554
|
)
|
|
Other losses, net
|
(370
|
)
|
|
(545
|
)
|
|
Income before income taxes
|
$
|
60,231
|
|
|
40,599
|
|
|
Net income of equity method investments
|
|||||
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
Dunkin’ Donuts International
|
$
|
174
|
|
|
289
|
|
Baskin-Robbins International
|
2,075
|
|
|
2,565
|
|
|
Total reportable segments
|
2,249
|
|
|
2,854
|
|
|
Other
|
715
|
|
|
93
|
|
|
Total net income of equity method investments
|
$
|
2,964
|
|
|
2,947
|
|
|
|
Total stockholders’ deficit
|
||
Balance as of December 26, 2015
|
|
$
|
(220,743
|
)
|
Net income
|
|
37,154
|
|
|
Other comprehensive income
|
|
1,914
|
|
|
Dividends paid on common stock
|
|
(27,395
|
)
|
|
Exercise of stock options
|
|
1,086
|
|
|
Repurchases of common stock
|
|
(30,000
|
)
|
|
Share-based compensation expense
|
|
4,140
|
|
|
Excess tax benefits from share-based compensation
|
|
538
|
|
|
Deconsolidation of noncontrolling interest
|
|
(208
|
)
|
|
Other, net
|
|
(1,078
|
)
|
|
Balance as of March 26, 2016
|
|
$
|
(234,592
|
)
|
|
Effect of foreign currency translation
|
|
Unrealized gains on interest rate swaps
|
|
Other
|
|
Accumulated other comprehensive gain (loss)
|
|||||
Balance as of December 26, 2015
|
$
|
(20,459
|
)
|
|
2,443
|
|
|
(2,030
|
)
|
|
(20,046
|
)
|
Other comprehensive income (loss), net
|
2,257
|
|
|
(318
|
)
|
|
(25
|
)
|
|
1,914
|
|
|
Balance as of March 26, 2016
|
$
|
(18,202
|
)
|
|
2,125
|
|
|
(2,055
|
)
|
|
(18,132
|
)
|
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
Net income attributable to Dunkin’ Brands—basic and diluted (in thousands)
|
$
|
37,154
|
|
|
25,631
|
|
Weighted average number of common shares:
|
|
|
|
|||
Common—basic
|
91,684,844
|
|
|
100,271,701
|
|
|
Common—diluted
|
92,618,269
|
|
|
101,502,438
|
|
|
Earnings per common share:
|
|
|
|
|||
Common—basic
|
$
|
0.41
|
|
|
0.26
|
|
Common—diluted
|
0.40
|
|
|
0.25
|
|
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
B-R 31 Ice Cream Co., Ltd.
|
$
|
321
|
|
|
242
|
|
BR-Korea Co., Ltd.
|
893
|
|
|
1,013
|
|
|
|
$
|
1,214
|
|
|
1,255
|
|
Amounts and percentages may not recalculate due to rounding
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
Systemwide sales (in millions)
(a)
:
|
|
|
|
|||
Dunkin’ Donuts U.S.
|
$
|
1,865.3
|
|
|
1,750.8
|
|
Dunkin’ Donuts International
|
167.5
|
|
|
168.2
|
|
|
Baskin-Robbins U.S.
|
129.9
|
|
|
123.1
|
|
|
Baskin-Robbins International
|
255.9
|
|
|
275.6
|
|
|
Total systemwide sales
|
$
|
2,418.6
|
|
|
2,317.6
|
|
Systemwide sales growth
|
4.4
|
%
|
|
6.2
|
%
|
|
Comparable store sales growth (decline)
(b)
:
|
|
|
|
|||
Dunkin’ Donuts U.S.
|
2.0
|
%
|
|
2.7
|
%
|
|
Dunkin’ Donuts International
|
(2.3
|
)%
|
|
1.7
|
%
|
|
Baskin-Robbins U.S.
|
5.0
|
%
|
|
8.6
|
%
|
|
Baskin-Robbins International
|
(8.2
|
)%
|
|
0.3
|
%
|
|
Financial data (in thousands):
|
|
|
|
|||
Total revenues
|
$
|
189,776
|
|
|
185,905
|
|
Operating income
|
85,333
|
|
|
83,740
|
|
|
Adjusted operating income
|
91,242
|
|
|
87,605
|
|
|
Net income attributable to Dunkin’ Brands
|
37,154
|
|
|
25,631
|
|
|
Adjusted net income
|
40,699
|
|
|
40,282
|
|
(a)
|
Prior period amounts have been revised to reflect a change from franchisee-reported sales to systemwide sales, as we believe the systemwide sales information is a more complete metric in obtaining an understanding of our financial performance. Additionally, franchisee sales related to restaurants located in Puerto Rico were previously included in the Baskin-Robbins International segment, but are now included in the Baskin-Robbins U.S. segment based on functional responsibility.
|
(b)
|
Comparable store sales growth for Dunkin’ Donuts U.S. and Baskin-Robbins U.S. for the three months ended
March 28, 2015
has been revised to include only those restaurants that have been open at least 78 weeks (approximately 18 months) to conform to the current period calculation, whereas previously reported figures included only those restaurants that were open at least 54 weeks (approximately 12 months). The calculation of this operating measure was revised in the third quarter of fiscal 2015 to more accurately reflect sales growth at comparable stores by minimizing the impact of strong new store openings, particularly as we develop in newer markets. International comparable store sales growth has not been revised at this time to include only sales from restaurants that have been open at least 78 weeks, similar to the U.S., given that store-level sales information resides on multiple, non-uniform systems owned and controlled by our international partners.
|
•
|
Dunkin’ Donuts U.S. systemwide sales growth of
6.5%
for the
three months ended
March 26, 2016
, as a result of
340
net new restaurants opened since
March 28, 2015
and comparable store sales growth of
2.0%
. The increase in comparable store sales was driven by increased average ticket and traffic. Growth was driven by strong beverage sales, led by iced coffee and hot and iced coffee espresso-based beverages, and breakfast sandwiches led by limited-time-offer products. The in-restaurant K-Cup® and packaged coffee categories had a negative impact on comparable store sales, while traffic was positively impacted by weather.
|
•
|
Dunkin’ Donuts International systemwide sales decline of
0.4%
for the
three months ended
March 26, 2016
, driven primarily by sales declines in South Korea, offset by sales growth in Europe and the Middle East. Sales in South Korea, Asia, and South America were negatively impacted by unfavorable foreign exchange rates. On a constant currency basis, systemwide sales for the
three months ended
March 26, 2016
increased by approximately 7%. Dunkin’ Donuts International comparable store sales declined
2.3%
driven primarily by declines in South Korea and Europe, offset by growth in South America.
|
•
|
Baskin-Robbins U.S. systemwide sales growth of
5.6%
for the
three months ended
March 26, 2016
, resulting primarily from comparable store sales growth of
5.0%
, driven by increased sales of cups and cones, beverages, desserts, and sundaes, as well as increased sales of cakes. Comparable store sales growth was driven primarily by an increase in traffic, which was positively impacted by weather.
|
•
|
Baskin-Robbins International systemwide sales decline of
7.1%
for the
three months ended
March 26, 2016
, driven by sales declines in South Korea and the Middle East, offset by sales growth in Japan and Europe. Sales in South Korea were also negatively impacted by unfavorable foreign exchange rates. On a constant currency basis, systemwide sales for the three months ended
March 26, 2016
decreased by approximately 3%. Baskin-Robbins International comparable store sales declined
8.2%
driven primarily by declines in South Korea, the Middle East, and Asia.
|
|
March 26, 2016
|
|
March 28, 2015
|
||
Points of distribution, at period end:
|
|
|
|
||
Dunkin’ Donuts U.S.
|
8,500
|
|
|
8,160
|
|
Dunkin’ Donuts International
|
3,333
|
|
|
3,207
|
|
Baskin-Robbins U.S.
|
2,518
|
|
|
2,526
|
|
Baskin-Robbins International
|
5,120
|
|
|
5,048
|
|
Consolidated global points of distribution
|
19,471
|
|
|
18,941
|
|
|
Three months ended
|
||||
|
March 26, 2016
|
|
March 28, 2015
|
||
Net openings (closings) during the period:
|
|
|
|
||
Dunkin’ Donuts U.S.
|
69
|
|
|
78
|
|
Dunkin’ Donuts International
|
14
|
|
|
(21
|
)
|
Baskin-Robbins U.S.
|
(11
|
)
|
|
(3
|
)
|
Baskin-Robbins International
|
42
|
|
|
25
|
|
Consolidated global net openings
|
114
|
|
|
79
|
|
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
|
(In thousands)
|
|||||
Operating income
|
$
|
85,333
|
|
|
83,740
|
|
Adjustments:
|
|
|
|
|||
Amortization of other intangible assets
|
5,761
|
|
|
6,200
|
|
|
Long-lived asset impairment charges
|
93
|
|
|
264
|
|
|
Transaction-related costs
(a)
|
55
|
|
|
154
|
|
|
Bertico and related litigation
(b)
|
—
|
|
|
(2,753
|
)
|
|
Adjusted operating income
|
$
|
91,242
|
|
|
87,605
|
|
Net income attributable to Dunkin’ Brands
|
$
|
37,154
|
|
|
25,631
|
|
Adjustments:
|
|
|
|
|||
Amortization of other intangible assets
|
5,761
|
|
|
6,200
|
|
|
Long-lived asset impairment charges
|
93
|
|
|
264
|
|
|
Transaction-related costs
(a)
|
55
|
|
|
154
|
|
|
Bertico and related litigation
(b)
|
—
|
|
|
(2,753
|
)
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
20,554
|
|
|
Tax impact of adjustments
(c)
|
(2,364
|
)
|
|
(9,768
|
)
|
|
Adjusted net income
|
$
|
40,699
|
|
|
40,282
|
|
(a)
|
Represents non-capitalizable costs incurred as a result of the securitized financing facility, which was completed in January 2015.
|
(b)
|
Represents a net reduction to legal reserves for the Bertico litigation and related matters, as a result of the Quebec Court of Appeals (Montreal) ruling to reduce the damages assessed against the Company in the Bertico litigation from approximately C$16.4 million to approximately C$10.9 million, plus costs and interest.
|
(c)
|
Tax impact of adjustments calculated at a 40% effective tax rate.
|
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
Earnings per share:
|
|
|
|
|||
Common—basic
|
$
|
0.41
|
|
|
0.26
|
|
Common—diluted
|
0.40
|
|
|
0.25
|
|
|
Diluted adjusted earnings per share
|
0.44
|
|
|
0.40
|
|
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
|
(In thousands, except share and per share data)
|
|||||
Adjusted net income
|
$
|
40,699
|
|
|
40,282
|
|
Weighted average number of common shares—diluted
|
92,618,269
|
|
|
101,502,438
|
|
|
Diluted adjusted earnings per share
|
$
|
0.44
|
|
|
0.40
|
|
|
Three months ended
|
|||||||||||
|
March 26,
2016 |
|
March 28,
2015 |
|
Increase (Decrease)
|
|||||||
$
|
|
%
|
||||||||||
|
(In thousands, except percentages)
|
|||||||||||
Franchise fees and royalty income
|
$
|
123,783
|
|
|
115,325
|
|
|
8,458
|
|
|
7.3
|
%
|
Rental income
|
23,225
|
|
|
23,627
|
|
|
(402
|
)
|
|
(1.7
|
)%
|
|
Sales of ice cream and other products
|
25,891
|
|
|
23,068
|
|
|
2,823
|
|
|
12.2
|
%
|
|
Sales at company-operated restaurants
|
5,670
|
|
|
6,558
|
|
|
(888
|
)
|
|
(13.5
|
)%
|
|
Other revenues
|
11,207
|
|
|
17,327
|
|
|
(6,120
|
)
|
|
(35.3
|
)%
|
|
Total revenues
|
$
|
189,776
|
|
|
185,905
|
|
|
3,871
|
|
|
2.1
|
%
|
|
Three months ended
|
|||||||||||
|
March 26,
2016 |
|
March 28,
2015 |
|
Increase (Decrease)
|
|||||||
$
|
|
%
|
||||||||||
|
(In thousands, except percentages)
|
|||||||||||
Occupancy expenses—franchised restaurants
|
$
|
13,196
|
|
|
13,518
|
|
|
(322
|
)
|
|
(2.4
|
)%
|
Cost of ice cream and other products
|
17,234
|
|
|
15,346
|
|
|
1,888
|
|
|
12.3
|
%
|
|
Company-operated restaurant expenses
|
6,493
|
|
|
6,858
|
|
|
(365
|
)
|
|
(5.3
|
)%
|
|
General and administrative expenses, net
|
61,195
|
|
|
57,840
|
|
|
3,355
|
|
|
5.8
|
%
|
|
Depreciation and amortization
|
10,894
|
|
|
11,310
|
|
|
(416
|
)
|
|
(3.7
|
)%
|
|
Long-lived asset impairment charges
|
93
|
|
|
264
|
|
|
(171
|
)
|
|
(64.8
|
)%
|
|
Total operating costs and expenses
|
$
|
109,105
|
|
|
105,136
|
|
|
3,969
|
|
|
3.8
|
%
|
Net income of equity method investments
|
2,964
|
|
|
2,947
|
|
|
17
|
|
|
0.6
|
%
|
|
Other operating income, net
|
1,698
|
|
|
24
|
|
|
1,674
|
|
|
6,975.0
|
%
|
|
Operating income
|
$
|
85,333
|
|
|
83,740
|
|
|
1,593
|
|
|
1.9
|
%
|
|
Three months ended
|
|||||||||||
|
March 26,
2016 |
|
March 28,
2015 |
|
Increase (Decrease)
|
|||||||
|
$
|
|
%
|
|||||||||
|
(In thousands, except percentages)
|
|||||||||||
Interest expense, net
|
$
|
24,732
|
|
|
22,042
|
|
|
2,690
|
|
|
12.2
|
%
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
20,554
|
|
|
(20,554
|
)
|
|
(100.0
|
)%
|
|
Other losses, net
|
370
|
|
|
545
|
|
|
(175
|
)
|
|
(32.1
|
)%
|
|
Total other expense
|
$
|
25,102
|
|
|
43,141
|
|
|
(18,039
|
)
|
|
(41.8
|
)%
|
|
Three months ended
|
|||||
|
March 26,
2016 |
|
March 28,
2015 |
|||
|
(In thousands, except percentages)
|
|||||
Income before income taxes
|
$
|
60,231
|
|
|
40,599
|
|
Provision for income taxes
|
23,077
|
|
|
15,174
|
|
|
Effective tax rate
|
38.3
|
%
|
|
37.4
|
%
|
|
Three months ended
|
|||||||||||
|
March 26,
2016 |
|
March 28,
2015 |
|
Increase (Decrease)
|
|||||||
|
$
|
|
%
|
|||||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
101,523
|
|
|
95,007
|
|
|
6,516
|
|
|
6.9
|
%
|
Franchise fees
|
7,068
|
|
|
8,264
|
|
|
(1,196
|
)
|
|
(14.5
|
)%
|
|
Rental income
|
22,385
|
|
|
22,681
|
|
|
(296
|
)
|
|
(1.3
|
)%
|
|
Sales at company-operated restaurants
|
5,670
|
|
|
6,558
|
|
|
(888
|
)
|
|
(13.5
|
)%
|
|
Other revenues
|
2,167
|
|
|
1,357
|
|
|
810
|
|
|
59.7
|
%
|
|
Total revenues
|
$
|
138,813
|
|
|
133,867
|
|
|
4,946
|
|
|
3.7
|
%
|
Segment profit
|
$
|
100,444
|
|
|
93,714
|
|
|
6,730
|
|
|
7.2
|
%
|
|
Three months ended
|
|||||||||||
|
March 26,
2016 |
|
March 28,
2015 |
|
Increase (Decrease)
|
|||||||
|
$
|
|
%
|
|||||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
4,240
|
|
|
3,791
|
|
|
449
|
|
|
11.8
|
%
|
Franchise fees
|
2,890
|
|
|
523
|
|
|
2,367
|
|
|
452.6
|
%
|
|
Rental income
|
—
|
|
|
8
|
|
|
(8
|
)
|
|
(100.0
|
)%
|
|
Other revenues
|
120
|
|
|
2,256
|
|
|
(2,136
|
)
|
|
(94.7
|
)%
|
|
Total revenues
|
$
|
7,250
|
|
|
6,578
|
|
|
672
|
|
|
10.2
|
%
|
Segment profit
|
$
|
3,758
|
|
|
3,674
|
|
|
84
|
|
|
2.3
|
%
|
|
Three months ended
|
|||||||||||
|
March 26,
2016 |
|
March 28,
2015 |
|
Increase (Decrease)
|
|||||||
|
$
|
|
%
|
|||||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
6,223
|
|
|
5,916
|
|
|
307
|
|
|
5.2
|
%
|
Franchise fees
|
346
|
|
|
220
|
|
|
126
|
|
|
57.3
|
%
|
|
Rental income
|
713
|
|
|
799
|
|
|
(86
|
)
|
|
(10.8
|
)%
|
|
Sales of ice cream and other products
|
571
|
|
|
1,319
|
|
|
(748
|
)
|
|
(56.7
|
)%
|
|
Other revenues
|
2,708
|
|
|
2,055
|
|
|
653
|
|
|
31.8
|
%
|
|
Total revenues
|
$
|
10,561
|
|
|
10,309
|
|
|
252
|
|
|
2.4
|
%
|
Segment profit
|
$
|
7,300
|
|
|
6,088
|
|
|
1,212
|
|
|
19.9
|
%
|
|
Three months ended
|
|||||||||||
|
March 26,
2016 |
|
March 28,
2015 |
|
Increase (Decrease)
|
|||||||
|
$
|
|
%
|
|||||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
1,380
|
|
|
1,407
|
|
|
(27
|
)
|
|
(1.9
|
)%
|
Franchise fees
|
113
|
|
|
197
|
|
|
(84
|
)
|
|
(42.6
|
)%
|
|
Rental income
|
106
|
|
|
118
|
|
|
(12
|
)
|
|
(10.2
|
)%
|
|
Sales of ice cream and other products
|
25,063
|
|
|
21,222
|
|
|
3,841
|
|
|
18.1
|
%
|
|
Other revenues
|
172
|
|
|
186
|
|
|
(14
|
)
|
|
(7.5
|
)%
|
|
Total revenues
|
$
|
26,834
|
|
|
23,130
|
|
|
3,704
|
|
|
16.0
|
%
|
Segment profit
|
$
|
8,384
|
|
|
7,057
|
|
|
1,327
|
|
|
18.8
|
%
|
|
Three months ended
|
|||||
|
March 26, 2016
|
|
March 28, 2015
|
|||
Net cash provided by (used in) operating activities
|
$
|
26,525
|
|
|
(8,980
|
)
|
Plus: Decrease in cash held for advertising funds and gift card/certificate programs
|
18,875
|
|
|
17,982
|
|
|
Plus: Increase (decrease) in restricted cash
|
(4,236
|
)
|
|
65,772
|
|
|
Less: Net cash used in investing activities
|
(459
|
)
|
|
(7,732
|
)
|
|
Free cash flow
|
$
|
40,705
|
|
|
67,042
|
|
|
March 26, 2016
|
||
Principal outstanding under Class A-2 Notes
|
$
|
2,475,000
|
|
Total capital lease obligations
|
8,296
|
|
|
Less: cash and cash equivalents
|
(223,524
|
)
|
|
Less: restricted cash, current
|
(67,665
|
)
|
|
Plus: cash held for gift card/certificate programs
|
127,039
|
|
|
Net Debt
|
$
|
2,319,146
|
|
|
Twelve months ended
|
||
|
March 26, 2016
|
||
Net income including noncontrolling interests
|
$
|
116,958
|
|
Interest expense
|
99,482
|
|
|
Income tax expense
|
104,262
|
|
|
Depreciation and amortization
|
44,828
|
|
|
Impairment charges
|
452
|
|
|
Japan joint venture impairment
|
54,300
|
|
|
EBITDA
|
420,282
|
|
|
Adjustments:
|
|
||
Non-cash adjustments
(a)
|
15,158
|
|
|
Other
(b)
|
7,938
|
|
|
Total adjustments
|
23,096
|
|
|
Adjusted EBITDA
|
$
|
443,378
|
|
(a)
|
Represents non-cash adjustments, including stock compensation expense, legal reserves, and other non-cash gains and losses.
|
(b)
|
Represents loss on settlement of our Canadian pension plan in June 2015 as a result of the closure of our Canadian ice cream manufacturing plant in fiscal year 2012, as well as costs and fees associated with various franchisee-related investments, bank fees, and the net impact of other insignificant adjustments.
|
|
|
Issuer Purchases of Equity Securities
|
||||||||||||
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
|
||||||
12/27/15 - 01/23/16
|
|
483,913
|
|
|
$
|
41.51
|
|
|
483,913
|
|
|
$
|
75,007,402
|
|
01/24/16 - 02/27/16
|
|
553,506
|
|
|
42.72
|
|
|
553,506
|
|
|
170,000,000
|
|
||
02/28/16 - 03/26/16
|
|
148,733
|
|
|
42.72
|
|
|
148,733
|
|
|
170,000,000
|
|
||
Total
|
|
1,186,152
|
|
|
$
|
42.23
|
|
|
1,186,152
|
|
|
|
10.1
|
|
Form of Performance Stock Unit Agreement under the Dunkin' Brands Group, Inc. 2015 Omnibus Long-Term Incentive Plan.
|
|
|
|
31.1
|
|
Principal Executive Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Principal Financial Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
||
Ex. 101.INS* XBRL Instance Document
|
||
|
||
Ex. 101.SCH* XBRL Taxonomy Extension Schema Document
|
||
|
||
Ex. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document
|
||
|
||
Ex. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document
|
||
|
||
Ex. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document
|
||
|
||
Ex. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
Date:
|
May 4, 2016
|
|
By:
|
|
/s/ Nigel Travis
|
|
|
|
|
|
Nigel Travis,
Chairman and Chief Executive Officer
|
1 Year Dunkin Brands Chart |
1 Month Dunkin Brands Chart |
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