001-35258 | 20-4145825 |
(Commission File Number) | (IRS Employer Identification Number) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Press Release of Dunkin’ Brands Group, Inc. dated January 31, 2013 regarding the release of quarterly and annual financial results and other information. |
99.2 | Press Release of Dunkin’ Brands Group, Inc. dated January 31, 2013 announcing the declaration of a $0.19 quarterly dividend. |
DUNKIN’ BRANDS GROUP, INC. | ||
By: | /s/ Nigel Travis | |
Nigel Travis | ||
Chief Executive Officer |
Exhibit No. | Description | |
99.1 | Press Release of Dunkin’ Brands Group, Inc. dated January 31, 2013 regarding the release of quarterly financial results and other information. | |
99.2 | Press Release of Dunkin’ Brands Group, Inc. dated January 31, 2013 announcing the declaration of a $0.19 quarterly dividend. |
• | 3.2 percent Dunkin' Donuts U.S. comparable store sales growth |
• | Added 256 net new restaurants worldwide including 149 net new Dunkin' Donuts in the U.S. |
• | Adjusted operating income up 16.1% on a 13-week basis |
• | Adjusted operating income margin to 47.6% |
• | Adjusted EPS up approximately 21% to $0.34 on a 13-week basis |
• | Added 665 net new restaurants worldwide including 291 net new Dunkin' Donuts in the U.S. |
• | Revenue up 6.1% and adjusted operating income up 15.3% on a 52-week basis |
• | Adjusted operating income margin to 46.3% |
• | Adjusted EPS up approximately 38% to $1.28 on a 52-week basis |
• | Board of Directors declare $0.19 first quarter dividend for a 27% increase over the Company's fourth quarter 2012 dividend |
($ in millions, except per share data) | Fiscal year ended | Increase (Decrease) | % Change Excluding Impact of Extra Week1 | |||||||||
December 29, 2012 | December 31, 2011 | $/# | % | |||||||||
Franchisee reported sales | $ | 8,771.3 | 8,343.9 | 427.5 | 5.1 | % | ||||||
Systemwide sales growth | 5.2 | % | 9.1 | % | 7.0 | % | ||||||
Comparable store sales growth: | ||||||||||||
DD U.S. comparable store sales growth | 4.2 | % | 5.1 | % | ||||||||
BR U.S. comparable store sales growth | 3.8 | % | 0.5 | % | ||||||||
DD International comparable store sales growth | 2.0 | % | ||||||||||
BR International comparable store sales growth | 2.8 | % | ||||||||||
Development data: | ||||||||||||
Consolidated net POD development | 665 | 601 | 64 | 10.6 | % | |||||||
DD global PODs at period end | 10,479 | 10,083 | 396 | 3.9 | % | |||||||
BR global PODs at period end | 6,980 | 6,711 | 269 | 4.0 | % | |||||||
Consolidated global PODs at period end | 17,459 | 16,794 | 665 | 4.0 | % | |||||||
Financial data: | ||||||||||||
Revenues | $ | 658.2 | 628.2 | 30.0 | 4.8 | % | 6.1 | % | ||||
Operating income | 239.4 | 205.3 | 34.1 | 16.6 | % | 19.1 | % | |||||
Operating income margin | 36.4 | % | 32.7 | % | ||||||||
Adjusted operating income2 | $ | 307.2 | 270.7 | 36.4 | 13.5 | % | 15.3 | % | ||||
Adjusted operating income margin2 | 46.3 | % | 43.1 | % | ||||||||
Net income | $ | 108.3 | 34.4 | 73.9 | 214.5 | % | 231.9 | % | ||||
Adjusted net income2 | 149.7 | 101.7 | 48.0 | 47.1 | % | 49.8 | % | |||||
Earnings (loss) per share: | ||||||||||||
Class L – basic and diluted | n/a | 6.14 | n/a | n/a | ||||||||
Common – basic | 0.94 | (1.41 | ) | 2.35 | n/a | |||||||
Common – diluted | 0.93 | (1.41 | ) | 2.34 | n/a | |||||||
Diluted adjusted earnings per pro forma common share2 | 1.28 | 0.94 | 0.34 | 36.2 | % | 37.6 | % | |||||
Pro forma weighted average number of common shares – diluted (in millions) | 116.6 | 107.7 | 8.9 | 8.3 | % | |||||||
(amounts and percentages may not recalculate due to rounding) |
($ in millions, except per share data) | Three months ended | Increase (Decrease) | % Change Excluding Impact of Extra Week1 | |||||||||
December 29, 2012 | December 31, 2011 | $/# | % | |||||||||
Franchisee reported sales | $ | 2,212.2 | 2,222.9 | (10.6 | ) | (0.5 | )% | |||||
Systemwide sales growth | (0.4 | )% | 15.0 | % | 6.0 | % | ||||||
Comparable store sales growth: | ||||||||||||
DD U.S. comparable store sales growth | 3.2 | % | 7.4 | % | ||||||||
BR U.S. comparable store sales growth | 1.5 | % | 5.8 | % | ||||||||
DD International comparable store sales growth | 0.0 | % | ||||||||||
BR International comparable store sales growth | 0.0 | % | ||||||||||
Development data: | ||||||||||||
Consolidated net POD development | 256 | 269 | (13 | ) | (4.8 | )% | ||||||
Financial data: | ||||||||||||
Revenues | $ | 161.7 | 168.5 | (6.8 | ) | (4.0 | )% | 0.7 | % | |||
Operating income | 67.8 | 44.6 | 23.2 | 52.0 | % | 68.2 | % | |||||
Operating income margin | 41.9 | % | 26.4 | % | ||||||||
Adjusted operating income2 | $ | 79.8 | 73.0 | 6.8 | 9.3 | % | 16.1 | % | ||||
Adjusted operating income margin2 | 47.6 | % | 43.3 | % | ||||||||
Net income | $ | 34.3 | 11.6 | 22.7 | 196.2 | % | 251.0 | % | ||||
Adjusted net income2 | 36.6 | 36.2 | 0.5 | 1.3 | % | 6.6 | % | |||||
Earnings per share: | ||||||||||||
Common – basic | 0.32 | 0.10 | 0.22 | 220.0 | % | |||||||
Common – diluted | 0.32 | 0.10 | 0.22 | 220.0 | % | |||||||
Diluted adjusted earnings per pro forma common share2 | 0.34 | 0.30 | 0.04 | 13.3 | % | 21.4 | % | |||||
Weighted average number of common shares – diluted (in millions) | 107.9 | 121.0 | (13.1 | ) | (10.8 | )% | ||||||
(amounts and percentages may not recalculate due to rounding) |
Amounts and percentages may not recalculate due to rounding | ||||||||||||
Three months ended | Increase (Decrease) | |||||||||||
Dunkin' Donuts U.S. | December 29, 2012 | December 31, 2011 | $ | % | ||||||||
(13 weeks) | (14 weeks) | |||||||||||
($ in thousands except as otherwise noted) | ||||||||||||
Comparable store sales growth | 3.2 | % | 7.4 | % | ||||||||
Systemwide sales growth | (0.9 | )% | 17.4 | % | ||||||||
Franchisee reported sales (in millions) | $ | 1,637.6 | 1,655.6 | (17.9 | ) | (1.1 | )% | |||||
Revenues: | ||||||||||||
Royalty income | $ | 89,093 | 88,918 | 175 | 0.2 | % | ||||||
Franchise fees | 8,963 | 9,462 | (499 | ) | (5.3 | )% | ||||||
Rental income | 21,865 | 21,002 | 863 | 4.1 | % | |||||||
Sales at company-owned restaurants | 6,216 | 3,669 | 2,547 | 69.4 | % | |||||||
Other revenues | 1,980 | 841 | 1,139 | 135.4 | % | |||||||
Total revenues | $ | 128,117 | 123,892 | 4,225 | 3.4 | % | ||||||
Segment profit | $ | 94,293 | 92,004 | 2,289 | 2.5 | % | ||||||
Points of distribution | 7,306 | 7,015 | 291 | 4.1 | % | |||||||
Gross openings | 180 | 160 | 20 | 12.5 | % | |||||||
Net openings | 149 | 120 | 29 | 24.2 | % |
Amounts and percentages may not recalculate due to rounding | ||||||||||||
Three months ended | Increase (Decrease) | |||||||||||
Dunkin' Donuts International | December 29, 2012 | December 31, 2011 | $ | % | ||||||||
(13 weeks) | (14 weeks) | |||||||||||
($ in thousands except as otherwise noted) | ||||||||||||
Comparable store sales growth | 0.0 | % | ||||||||||
Systemwide sales growth | 9.3 | % | 2.9 | % | ||||||||
Franchisee reported sales (in millions) | $ | 174.4 | 159.6 | 14.8 | 9.3 | % | ||||||
Revenues: | ||||||||||||
Royalty income | $ | 3,526 | 3,185 | 341 | 10.7 | % | ||||||
Franchise fees | 470 | 649 | (179 | ) | (27.6 | )% | ||||||
Rental income | 29 | 45 | (16 | ) | (35.6 | )% | ||||||
Other revenues | (29 | ) | 5 | (34 | ) | n/m | ||||||
Total revenues | $ | 3,996 | 3,884 | 112 | 2.9 | % | ||||||
Segment profit | $ | 2,174 | 2,701 | (527 | ) | (19.5 | )% | |||||
Points of distribution | 3,173 | 3,068 | 105 | 3.4 | % | |||||||
Gross openings | 90 | 105 | (15 | ) | (14.3 | )% | ||||||
Net openings | 47 | 63 | (16 | ) | (25.4 | )% |
Amounts and percentages may not recalculate due to rounding | ||||||||||||
Three months ended | Increase (Decrease) | |||||||||||
Baskin-Robbins U.S. | December 29, 2012 | December 31, 2011 | $ | % | ||||||||
(13 weeks) | (14 weeks) | |||||||||||
($ in thousands except as otherwise noted) | ||||||||||||
Comparable store sales growth | 1.5 | % | 5.8 | % | ||||||||
Systemwide sales growth | (8.3 | )% | 11.1 | % | ||||||||
Franchisee reported sales (in millions) | $ | 90.7 | 98.9 | (8.2 | ) | (8.3 | )% | |||||
Revenues: | ||||||||||||
Royalty income | $ | 4,574 | 5,072 | (498 | ) | (9.8 | )% | |||||
Franchise fees | 148 | 239 | (91 | ) | (38.1 | )% | ||||||
Rental income | 913 | 962 | (49 | ) | (5.1 | )% | ||||||
Sales of ice cream products | 931 | 905 | 26 | 2.9 | % | |||||||
Sales at company-owned restaurants | — | 76 | (76 | ) | n/m | |||||||
Other revenues | 1,249 | 1,505 | (256 | ) | (17.0 | )% | ||||||
Total revenues | $ | 7,815 | 8,759 | (944 | ) | (10.8 | )% | |||||
Segment profit | $ | 3,888 | 2,877 | 1,011 | 35.1 | % | ||||||
Points of distribution | 2,463 | 2,493 | (30 | ) | (1.2 | )% | ||||||
Gross openings | 9 | 15 | (6 | ) | (40.0 | )% | ||||||
Net closings | (29 | ) | (35 | ) | 6 | (17.1 | )% |
Amounts and percentages may not recalculate due to rounding | ||||||||||||
Three months ended | Increase (Decrease) | |||||||||||
Baskin-Robbins International | December 29, 2012 | December 31, 2011 | $ | % | ||||||||
(13 weeks) | (14 weeks) | |||||||||||
($ in thousands except as otherwise noted) | ||||||||||||
Comparable store sales growth | 0.0 | % | ||||||||||
Systemwide sales growth | 0.2 | % | 10.9 | % | ||||||||
Franchisee reported sales (in millions) | $ | 309.5 | 308.8 | 0.8 | 0.2 | % | ||||||
Revenues: | ||||||||||||
Royalty income | $ | 2,033 | 1,805 | 228 | 12.6 | % | ||||||
Franchise fees | 314 | 532 | (218 | ) | (41.0 | )% | ||||||
Rental income | 133 | 155 | (22 | ) | (14.2 | )% | ||||||
Sales of ice cream products | 15,445 | 25,631 | (10,186 | ) | (39.7 | )% | ||||||
Other revenues | 46 | (101 | ) | 147 | n/m | |||||||
Total revenues | $ | 17,971 | 28,022 | (10,051 | ) | (35.9 | )% | |||||
Segment profit | $ | 6,833 | 10,302 | (3,469 | ) | (33.7 | )% | |||||
Points of distribution | 4,517 | 4,218 | 299 | 7.1 | % | |||||||
Gross openings | 126 | 162 | (36 | ) | (22.2 | )% | ||||||
Net openings | 89 | 121 | (32 | ) | (26.4 | )% |
• | On January 16, 2013, the Company announced that Dunkin' Donuts is expanding to Southern California. The Company is recruiting multi-unit franchisees for Los Angeles, Riverside, San Diego, San Bernardino, Ventura and Orange counties and expects restaurants in these markets will begin to open in 2015. |
• | The Company today announced that the Board of Directors declared a first quarter cash dividend of $0.19 per share, payable on February 20, 2013 to shareholders of record as of the close of business on February 11, 2013. |
• | The Company today announced that it intends to seek a re-financing of its senior secured credit facilities given the current favorable credit market conditions. |
• | The Company expects Dunkin' Donuts U.S. comparable store sales growth of 3 to 4 percent and Baskin-Robbins U.S. comparable store sales growth of 1 to 3 percent. |
• | The Company expects that Dunkin' Donuts U.S. will add between 330 and 360 net new restaurants for 4.5 to 5 percent net unit growth and it expects Baskin-Robbins U.S. will have between 0 and 30 net closures. |
• | Internationally, the Company targets opening 400 to 500 net new units across the two brands. Globally, the Company expects to open between 700 and 860 net new units. |
• | The Company expects revenue growth of between 6 and 8 percent and adjusted operating income growth of between 10 and 12 percent. |
• | The Company expects adjusted earnings per share of $1.48 to $1.51, which would represent 15.6 percent to 17.9 percent year-over-year adjusted earnings per share growth (earnings per share guidance does not reflect any potential benefit from refinancing) . |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
(In thousands, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Three months ended | Fiscal year ended | ||||||||||||
December 29, | December 31, | December 29, | December 31, | ||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
(13 weeks) | (14 weeks) | (52 weeks) | (53 weeks) | ||||||||||
Revenues: | |||||||||||||
Franchise fees and royalty income | $ | 109,121 | 109,814 | 418,940 | 398,474 | ||||||||
Rental income | 22,957 | 22,195 | 96,816 | 92,145 | |||||||||
Sales of ice cream products | 16,376 | 26,536 | 94,659 | 100,068 | |||||||||
Sales at company-owned restaurants | 6,216 | 3,745 | 22,922 | 12,154 | |||||||||
Other revenues | 7,033 | 6,215 | 24,844 | 25,357 | |||||||||
Total revenues | 161,703 | 168,505 | 658,181 | 628,198 | |||||||||
Operating costs and expenses: | |||||||||||||
Occupancy expenses - franchised restaurants | 13,275 | 13,600 | 52,072 | 51,878 | |||||||||
Cost of ice cream products | 13,019 | 19,534 | 69,019 | 72,329 | |||||||||
Company-owned restaurant expenses | 6,166 | 3,954 | 23,133 | 12,854 | |||||||||
General and administrative expenses, net | 53,024 | 57,263 | 239,574 | 227,771 | |||||||||
Depreciation | 6,551 | 6,147 | 29,084 | 24,497 | |||||||||
Amortization of other intangible assets | 6,626 | 6,919 | 26,943 | 28,025 | |||||||||
Impairment charges | 328 | 840 | 1,278 | 2,060 | |||||||||
Total operating costs and expenses | 98,989 | 108,257 | 441,103 | 419,414 | |||||||||
Net income (loss) of equity method investments: | |||||||||||||
Net income, excluding impairment | 5,037 | 4,071 | 22,351 | 16,277 | |||||||||
Impairment charge, net of tax(a) | — | (19,752 | ) | — | (19,752 | ) | |||||||
Total net income (loss) of equity method investments | 5,037 | (15,681 | ) | 22,351 | (3,475 | ) | |||||||
Operating income | 67,751 | 44,567 | 239,429 | 205,309 | |||||||||
Other income (expense): | |||||||||||||
Interest income | 160 | 220 | 543 | 623 | |||||||||
Interest expense | (21,725 | ) | (18,167 | ) | (74,031 | ) | (105,072 | ) | |||||
Loss on debt extinguishment and refinancing transactions | — | — | (3,963 | ) | (34,222 | ) | |||||||
Other gains, net | 495 | 186 | 23 | 175 | |||||||||
Total other expense | (21,070 | ) | (17,761 | ) | (77,428 | ) | (138,496 | ) | |||||
Income before income taxes | 46,681 | 26,806 | 162,001 | 66,813 | |||||||||
Provision for income taxes | 12,491 | 15,215 | 54,377 | 32,371 | |||||||||
Net income including noncontrolling interests | 34,190 | 11,591 | 107,624 | 34,442 | |||||||||
Net loss attributable to noncontrolling interests | (145 | ) | — | (684 | ) | — | |||||||
Net income attributable to Dunkin' Brands | $ | 34,335 | 11,591 | 108,308 | 34,442 | ||||||||
Earnings (loss) per share: | |||||||||||||
Class L - basic and diluted | $ n/a | n/a | n/a | 6.14 | |||||||||
Common - basic | 0.32 | 0.10 | 0.94 | (1.41 | ) | ||||||||
Common - diluted | 0.32 | 0.10 | 0.93 | (1.41 | ) | ||||||||
(a) The $19.8 million impairment charge recorded in the fourth quarter of 2011 relates to our investment in the South Korea joint venture, and resulted from declines in operating performance in the Dunkin' Donuts business in that country. The impairment charge was allocated to the underlying intangible and long-lived assets of the joint venture, which resulted in a reduction in depreciation and amortization, net of tax, (and a reduction in the equity in net loss of joint ventures) of $1.0 million in the fourth quarter of 2011. |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||
Condensed Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
December 29, | December 31, | ||||||
Assets | 2012 | 2011 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 252,618 | 246,715 | ||||
Accounts, notes, and other receivables, net | 53,056 | 58,787 | |||||
Other current assets | 114,106 | 100,972 | |||||
Total current assets | 419,780 | 406,474 | |||||
Property and equipment, net | 181,172 | 185,360 | |||||
Equity method investments | 174,823 | 164,636 | |||||
Goodwill and other intangible assets, net | 2,371,684 | 2,398,211 | |||||
Other assets | 70,054 | 69,337 | |||||
Total assets | $ | 3,217,513 | 3,224,018 | ||||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 26,680 | 14,965 | ||||
Accounts payable | 16,256 | 9,651 | |||||
Other current liabilities | 310,579 | 291,924 | |||||
Total current liabilities | 353,515 | 316,540 | |||||
Long-term debt, net | 1,823,278 | 1,453,344 | |||||
Deferred income taxes, net | 569,126 | 578,660 | |||||
Other long-term liabilities | 121,619 | 129,538 | |||||
Total long-term liabilities | 2,514,023 | 2,161,542 | |||||
Total stockholders’ equity | 349,975 | 745,936 | |||||
Total liabilities and stockholders’ equity | $ | 3,217,513 | 3,224,018 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Fiscal year ended | |||||||
December 29, | December 31, | ||||||
2012 | 2011 | ||||||
(52 weeks) | (53 weeks) | ||||||
Net cash provided by operating activities | $ | 154,420 | 162,703 | ||||
Cash flows from investing activities: | |||||||
Additions to property and equipment | (22,398 | ) | (18,596 | ) | |||
Other, net | (549 | ) | (1,211 | ) | |||
Net cash used in investing activities | (22,947 | ) | (19,807 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from (repayment of) long-term debt, net | 380,559 | (404,608 | ) | ||||
Repurchases of common stock | (450,369 | ) | (286 | ) | |||
Payment of deferred financing and other debt-related costs | (5,978 | ) | (20,087 | ) | |||
Proceeds from initial public offering, net of offering costs | — | 389,961 | |||||
Dividends paid on common stock | (70,069 | ) | — | ||||
Other, net | 20,255 | 4,946 | |||||
Net cash used in financing activities | (125,602 | ) | (30,074 | ) | |||
Effect of exchange rates on cash and cash equivalents | 32 | (207 | ) | ||||
Increase in cash and cash equivalents | 5,903 | 112,615 | |||||
Cash and cash equivalents, beginning of period | 246,715 | 134,100 | |||||
Cash and cash equivalents, end of period | $ | 252,618 | 246,715 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||||||||
Non-GAAP Reconciliations | |||||||||||||
(Unaudited, in thousands) | |||||||||||||
Three months ended | Fiscal year ended | ||||||||||||
December 29, | December 31, | December 29, | December 31, | ||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
Total revenues | $ | 161,703 | 168,505 | 658,181 | 628,198 | ||||||||
Impact of change in ice cream shipping terms(a) | 5,802 | — | 5,802 | — | |||||||||
Total revenues, excluding change in ice cream shipping terms | $ | 167,505 | 168,505 | 663,983 | 628,198 | ||||||||
Operating income | $ | 67,751 | 44,567 | 239,429 | 205,309 | ||||||||
Operating income margin | 41.9 | % | 26.4 | % | 36.4 | % | 32.7 | % | |||||
Adjustments: | |||||||||||||
Amortization of other intangible assets | 6,626 | 6,919 | 26,943 | 28,025 | |||||||||
Impairment charges | 328 | 840 | 1,278 | 2,060 | |||||||||
Sponsor termination fee | — | — | — | 14,671 | |||||||||
Secondary offering costs | 9 | 1,899 | 4,783 | 1,899 | |||||||||
Peterborough plant closure(b) | 5,095 | — | 14,044 | — | |||||||||
Korea joint venture impairment, net | — | 18,776 | — | 18,776 | |||||||||
Bertico litigation(c) | — | — | 20,680 | — | |||||||||
Adjusted operating income | $ | 79,809 | 73,001 | 307,157 | 270,740 | ||||||||
Adjusted operating income margin(d) | 47.6 | % | 43.3 | % | 46.3 | % | 43.1 | % | |||||
Net income attributable to Dunkin' Brands | $ | 34,335 | 11,591 | 108,308 | 34,442 | ||||||||
Adjustments: | |||||||||||||
Amortization of other intangible assets | 6,626 | 6,919 | 26,943 | 28,025 | |||||||||
Impairment charges | 328 | 840 | 1,278 | 2,060 | |||||||||
Sponsor termination fee | — | — | — | 14,671 | |||||||||
Secondary offering costs | 9 | 1,899 | 4,783 | 1,899 | |||||||||
Loss on debt extinguishment and refinancing transactions | — | — | 3,963 | 34,222 | |||||||||
Peterborough plant closure(b) | 5,095 | — | 14,044 | — | |||||||||
Korea joint venture impairment, net | — | 18,776 | — | 18,776 | |||||||||
Bertico litigation(c) | — | — | 20,680 | — | |||||||||
Tax impact of adjustments, excluding Bertico litigation(e) | (4,823 | ) | (3,863 | ) | (20,404 | ) | (32,351 | ) | |||||
Tax impact of Bertico adjustment(f) | 979 | — | (3,980 | ) | — | ||||||||
Income tax audit settlements(g) | (10,514 | ) | — | (10,514 | ) | — | |||||||
State tax apportionment(h) | 4,599 | — | 4,599 | — | |||||||||
Adjusted net income | $ | 36,634 | 36,162 | 149,700 | 101,744 | ||||||||
(a) Represents the impact of the one-time delay in revenue recognition as a result of a change in shipping terms related to the shift in manufacturing to Dean Foods, based on actual shipments. | |||||||||||||
(b) Represents costs incurred related to the announced closure of the Baskin-Robbins ice cream manufacturing plant in Peterborough, Canada, including $315 thousand and $3.4 million of severance and other payroll-related costs for the three months and fiscal year ended December 29, 2012, respectively, $497 thousand and $4.2 million of accelerated depreciation for the three months and fiscal year ended December 29, 2012, respectively, $1.5 million and $2.7 million of incremental costs of ice cream products for the three months and fiscal year ended December 29, 2012, respectively, and $638 thousand and $1.6 million of other transition-related costs for the three months and fiscal year ended December 29, 2012, respectively. Amounts for the three months and fiscal year ended December 29, 2012 also reflect the one-time delay in revenue recognition, net of related cost of ice cream products, related to the shift in manufacturing to Dean Foods of $2.1 million. | |||||||||||||
(c) Represents the incremental legal reserve recorded in the second quarter of 2012 related to the Quebec Superior Court's ruling in the Bertico litigation, in which the Court found for the Plaintiffs and issued a judgment against Dunkin' Brands in the amount of approximately $C16.4 million, plus costs and interest. | |||||||||||||
(d) Adjusted operating income margin calculated based on total revenues, excluding change in shipping terms. | |||||||||||||
(e) Tax impact of adjustments, excluding the Bertico litigation and the Korea joint venture impairment charge, calculated at a 40% effective tax rate. | |||||||||||||
(f) Tax impact of Bertico litigation adjustment calculated as if the incremental reserve had not been recorded. The tax impact recorded in the second quarter of 2012 was a $4.0 million tax benefit representing the actual direct tax benefit expected to be realized, as well as a $2.2 million tax benefit recorded that fully reversed in the third and fourth quarters of 2012 based on interim tax provision requirements. The tax impact for the three months ended December 29, 2012 represents $1.0 million of the tax benefit that was expected to reverse. | |||||||||||||
(g) Represents income tax benefits resulting from the settlement of historical tax positions settled during the period, primarily related to the accounting for the acquisition of the Company by private equity firms in 2006. | |||||||||||||
(h) Represents deferred tax expense recognized due to an increase in our overall state tax rate for a shift in the apportionment of income to state jurisdictions, as a result of the closure of the Peterborough manufacturing plant and transition to Dean Foods. |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||
Non-GAAP Reconciliations (continued) | |||||||||||||||||||
(Unaudited, in thousands) | |||||||||||||||||||
Three months ended | Fiscal year ended | ||||||||||||||||||
December 29, | December 31, | % | December 29, | December 31, | % | ||||||||||||||
2012 | 2011 | Change | 2012 | 2011 | Change | ||||||||||||||
Total revenues | $ | 161,703 | 168,505 | (4.0 | )% | 658,181 | 628,198 | 4.8 | % | ||||||||||
Impact of extra week(a) | — | (8,005 | ) | — | (8,005 | ) | |||||||||||||
Total revenues, 13-week / 52-week basis | $ | 161,703 | 160,500 | 0.7 | % | 658,181 | 620,193 | 6.1 | % | ||||||||||
Impact of change in ice cream shipping terms(b) | 5,802 | — | 5,802 | — | |||||||||||||||
Total revenues, excluding impact of change in shipping terms, 13-week / 52-week basis | $ | 167,505 | 160,500 | 4.4 | % | 663,983 | 620,193 | 7.1 | % | ||||||||||
Operating income | $ | 67,751 | 44,567 | 52.0 | % | 239,429 | 205,309 | 16.6 | % | ||||||||||
Impact of extra week(a) | — | (4,286 | ) | — | (4,286 | ) | |||||||||||||
Operating income, 13-week / 52-week basis | $ | 67,751 | 40,281 | 68.2 | % | 239,429 | 201,023 | 19.1 | % | ||||||||||
Adjusted operating income | $ | 79,809 | 73,001 | 9.3 | % | 307,157 | 270,740 | 13.5 | % | ||||||||||
Impact of extra week(a) | — | (4,286 | ) | — | (4,286 | ) | |||||||||||||
Adjusted operating income, 13-week / 52-week basis | $ | 79,809 | 68,715 | 16.1 | % | 307,157 | 266,454 | 15.3 | % | ||||||||||
Net income attributable to Dunkin' Brands | $ | 34,335 | 11,591 | 196.2 | % | 108,308 | 34,442 | 214.5 | % | ||||||||||
Impact of extra week(a) | — | (1,810 | ) | — | (1,810 | ) | |||||||||||||
Net income, 13-week / 52-week basis | $ | 34,335 | 9,781 | 251.0 | % | 108,308 | 32,632 | 231.9 | % | ||||||||||
Adjusted net income | $ | 36,634 | 36,162 | 1.3 | % | 149,700 | 101,744 | 47.1 | % | ||||||||||
Impact of extra week(a) | — | (1,810 | ) | — | (1,810 | ) | |||||||||||||
Adjusted net income, 13-week / 52-week basis | $ | 36,634 | 34,352 | 6.6 | % | 149,700 | 99,934 | 49.8 | % | ||||||||||
(a) The three months and fiscal year ended December 31, 2011 include 14 weeks and 53 weeks, respectively, as compared to 13 weeks and 52 weeks for the three months and fiscal year ended December 29, 2012, respectively. The impact of the extra week in the three months and fiscal year ended December 31, 2011 reflects our estimate of the additional week in those fiscal periods on certain revenues and expenses, net of tax. | |||||||||||||||||||
(b) Represents the impact of the one-time delay in revenue recognition as a result of a change in shipping terms related to the shift in manufacturing to Dean Foods, based on actual shipments. |
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 | Fiscal year ended | ||||||||||||
December 29, | December 31, | December 29, | December 31, | ||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
Adjusted net income available to common shareholders: | |||||||||||||
Adjusted net income | $ | 36,634 | 36,162 | 149,700 | 101,744 | ||||||||
Less: Adjusted net income allocated to participating securities | (1 | ) | (140 | ) | (179 | ) | (494 | ) | |||||
Adjusted net income available to common shareholders | $ | 36,633 | 36,022 | 149,521 | 101,250 | ||||||||
Pro forma weighted average number of common shares – diluted: | |||||||||||||
Weighted average number of Class L shares over period in which Class L shares were outstanding(a) | — | — | — | 22,845,378 | |||||||||
Adjustment to weight Class L shares over respective fiscal period(a) | — | — | — | (9,790,933 | ) | ||||||||
Weighted average number of Class L shares | — | — | — | 13,054,445 | |||||||||
Class L conversion factor | — | — | — | 2.4338 | |||||||||
Weighted average number of converted Class L shares | — | — | — | 31,772,244 | |||||||||
Weighted average number of common shares | 105,837,976 | 119,486,311 | 114,584,063 | 74,835,697 | |||||||||
Pro forma weighted average number of common shares – basic | 105,837,976 | 119,486,311 | 114,584,063 | 106,607,941 | |||||||||
Incremental dilutive common shares(b) | 2,078,696 | 1,551,701 | 1,989,281 | 1,064,587 | |||||||||
Pro forma weighted average number of common shares – diluted | 107,916,672 | 121,038,012 | 116,573,344 | 107,672,528 | |||||||||
Diluted adjusted earnings per pro forma common share | $ | 0.34 | 0.30 | 1.28 | 0.94 | ||||||||
Impact of extra week(c) | — | (0.02 | ) | — | (0.01 | ) | |||||||
Diluted adjusted earnings per pro forma common share, 13-week / 52-week basis | $ | 0.34 | 0.28 | 1.28 | 0.93 | ||||||||
(a) The weighted average number of Class L shares in the actual Class L earnings per share calculation for the fiscal year ended December 31, 2011 represents the weighted average from the beginning of the fiscal year up through the date of conversion of the Class L shares into common shares. As such, the pro forma weighted average number of common shares includes an adjustment to the weighted average number of Class L shares outstanding to reflect the length of time the Class L shares were outstanding prior to conversion relative to the fiscal year. The converted Class L shares are already included in the weighted average number of common shares outstanding for the period after their conversion. No Class L shares were outstanding during any other period presented. | |||||||||||||
(b) Represents the dilutive effect of restricted shares and stock options, using the treasury stock method. | |||||||||||||
(c) The three months and fiscal year ended December 31, 2011 include 14 weeks and 53 weeks, respectively, as compared to 13 weeks and 52 weeks for the three months and fiscal year ended December 29, 2012, respectively. The impact of the extra week in the three months and fiscal year ended December 31, 2011 reflects our estimate of the additional week in those fiscal periods on certain revenues and expenses, net of tax. |