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)) |
DUNKIN’ BRANDS GROUP, INC. | ||
By: | /s/ Nigel Travis | |
Nigel Travis | ||
Chairman and Chief Executive Officer |
• | Dunkin' Donuts U.S. comparable store sales growth of 0.6% |
• | Flat Baskin-Robbins U.S. comparable store sales growth |
• | Added 440 net new restaurants worldwide, including 313 net new Dunkin' Donuts in the U.S. |
• | Revenues increased 3.8%, or 4.9% on a 52-week basis |
• | Diluted EPS increased 80.1%, or 82.7% on a 52-week basis, to $3.80 |
• | Diluted adjusted EPS increased 7.5%, or 9.0% on a 52-week basis, to $2.43 |
• | All four business segments had positive comparable store sales |
• | Dunkin' Donuts U.S. comparable store sales growth of 0.8% |
• | Baskin-Robbins U.S. comparable store sales growth of 5.1% |
• | Added 141 net new restaurants worldwide, including 126 net new Dunkin' Donuts in the U.S. |
• | Revenues increased 5.3%, or 9.8% on a 13-week basis |
• | Diluted EPS increased 249.2%, or 267.2% on a 13-week basis, to $2.13 |
• | Diluted adjusted EPS unchanged at $0.64, or increased 4.9% on a 13-week basis |
($ in millions, except per share data) | Fiscal year ended | Increase (Decrease) | ||||||||
Amounts and percentages may not recalculate due to rounding | December 30, 2017 | December 31, 2016 | $ / # | % | ||||||
(52 weeks) | (53 weeks) | |||||||||
Financial data: | ||||||||||
Revenues | $ | 860.5 | 828.9 | 31.6 | 3.8 | % | ||||
Operating income | 447.0 | 414.7 | 32.3 | 7.8 | % | |||||
Operating income margin | 51.9 | % | 50.0 | % | ||||||
Adjusted operating income1 | 467.1 | 436.6 | 30.5 | 7.0 | % | |||||
Adjusted operating income margin1 | 54.3 | % | 52.7 | % | ||||||
Net income2 | 350.9 | 195.6 | 155.3 | 79.4 | % | |||||
Adjusted net income1,2 | 223.8 | 208.7 | 15.1 | 7.2 | % | |||||
Earnings per share: | ||||||||||
Common–basic2 | 3.86 | 2.14 | 1.72 | 80.4 | % | |||||
Common–diluted2 | 3.80 | 2.11 | 1.69 | 80.1 | % | |||||
Diluted adjusted earnings per share1,2 | 2.43 | 2.26 | 0.17 | 7.5 | % | |||||
Weighted average number of common shares – diluted (in millions)2 | 92.2 | 92.5 | (0.3 | ) | (0.3 | )% | ||||
Systemwide sales3 | $ | 11,146.6 | 10,844.6 | 301.9 | 2.8 | % | ||||
Comparable store sales growth (decline): | ||||||||||
DD U.S. | 0.6 | % | 1.6 | % | ||||||
BR U.S. | — | % | 0.7 | % | ||||||
DD International | 0.3 | % | (1.9 | )% | ||||||
BR International | (0.1 | )% | (4.2 | )% | ||||||
Development data: | ||||||||||
Consolidated global net POD development4 | 440 | 723 | (283 | ) | (39.1 | )% | ||||
DD global PODs at period end | 12,538 | 12,258 | 280 | 2.3 | % | |||||
BR global PODs at period end | 7,982 | 7,822 | 160 | 2.0 | % | |||||
Consolidated global PODs at period end | 20,520 | 20,080 | 440 | 2.2 | % |
($ in millions, except per share data) | Three months ended | Increase (Decrease) | ||||||||
Amounts and percentages may not recalculate due to rounding | December 30, 2017 | December 31, 2016 | $ / # | % | ||||||
(13 weeks) | (14 weeks) | |||||||||
Financial data: | ||||||||||
Revenues | $ | 227.1 | 215.7 | 11.4 | 5.3 | % | ||||
Operating income | 120.1 | 113.9 | 6.2 | 5.5 | % | |||||
Operating income margin | 52.9 | % | 52.8 | % | ||||||
Adjusted operating income1 | 123.5 | 119.3 | 4.3 | 3.6 | % | |||||
Adjusted operating income margin1 | 54.4 | % | 55.3 | % | ||||||
Net income2 | 195.5 | 56.1 | 139.4 | 248.3 | % | |||||
Adjusted net income1,2 | 58.4 | 59.4 | (1.0 | ) | (1.7 | )% | ||||
Earnings per share: | ||||||||||
Common–basic2 | 2.17 | 0.61 | 1.56 | 255.7 | % | |||||
Common–diluted2 | 2.13 | 0.61 | 1.52 | 249.2 | % | |||||
Diluted adjusted earnings per share1,2 | 0.64 | 0.64 | — | — | % | |||||
Weighted average number of common shares – diluted (in millions)2 | 91.8 | 92.5 | (0.8 | ) | (0.8 | )% | ||||
Systemwide sales3 | $ | 2,799.2 | 2,830.2 | (31.0 | ) | (1.1 | )% | |||
Comparable store sales growth (decline): | ||||||||||
DD U.S. | 0.8 | % | 1.9 | % | ||||||
BR U.S. | 5.1 | % | (0.9 | )% | ||||||
DD International | 1.6 | % | (1.0 | )% | ||||||
BR International | 3.0 | % | 0.7 | % | ||||||
Development data: | ||||||||||
Consolidated global net POD development4 | 141 | 296 | (155 | ) | (52.4 | )% | ||||
DD global PODs at period end | 12,538 | 12,258 | 280 | 2.3 | % | |||||
BR global PODs at period end | 7,982 | 7,822 | 160 | 2.0 | % | |||||
Consolidated global PODs at period end | 20,520 | 20,080 | 440 | 2.2 | % |
Amounts and percentages may not recalculate due to rounding | Three months ended | Increase (Decrease) | ||||||||||
Dunkin' Donuts U.S. | December 30, 2017 | December 31, 2016 | $ / # | % | ||||||||
(13 weeks) | (14 weeks) | |||||||||||
($ in thousands except as otherwise noted) | ||||||||||||
Revenues: | ||||||||||||
Royalty income | $ | 118,771 | 121,774 | (3,003 | ) | (2.5 | )% | |||||
Franchise fees | 32,826 | 14,716 | 18,110 | 123.1 | % | |||||||
Rental income | 24,231 | 24,255 | (24 | ) | (0.1 | )% | ||||||
Sales at company-operated restaurants | — | 51 | (51 | ) | (100.0 | )% | ||||||
Other revenues | 1,920 | 2,270 | (350 | ) | (15.4 | )% | ||||||
Total revenues | $ | 177,748 | 163,066 | 14,682 | 9.0 | % | ||||||
Segment profit | $ | 141,210 | 131,013 | 10,197 | 7.8 | % | ||||||
Comparable store sales growth | 0.8 | % | 1.9 | % | ||||||||
Systemwide sales (in millions)1 | $ | 2,160.3 | 2,228.7 | (68.4 | ) | (3.1 | )% | |||||
Points of distribution | 9,141 | 8,828 | 313 | 3.5 | % | |||||||
Gross openings | 172 | 235 | (63 | ) | (26.8 | )% | ||||||
Net openings2 | 126 | 199 | (73 | ) | (36.7 | )% |
Amounts and percentages may not recalculate due to rounding | Three months ended | Increase (Decrease) | ||||||||||
Dunkin' Donuts International | December 30, 2017 | December 31, 2016 | $ / # | % | ||||||||
(13 weeks) | (14 weeks) | |||||||||||
($ in thousands except as otherwise noted) | ||||||||||||
Revenues: | ||||||||||||
Royalty income | $ | 4,954 | 4,208 | 746 | 17.7 | % | ||||||
Franchise fees | 698 | 1,799 | (1,101 | ) | (61.2 | )% | ||||||
Other revenues | (26 | ) | (21 | ) | (5 | ) | 23.8 | % | ||||
Total revenues | $ | 5,626 | 5,986 | (360 | ) | (6.0 | )% | |||||
Segment profit | $ | 2,188 | 3,220 | (1,032 | ) | (32.0 | )% | |||||
Comparable store sales growth (decline) | 1.6 | % | (1.0 | )% | ||||||||
Systemwide sales (in millions)1 | $ | 200.0 | 187.2 | 12.8 | 6.8 | % | ||||||
Points of distribution | 3,397 | 3,430 | (33 | ) | (1.0 | )% | ||||||
Gross openings | 92 | 137 | (45 | ) | (32.8 | )% | ||||||
Net openings (closings) | (23 | ) | 51 | (74 | ) | (145.1 | )% |
Amounts and percentages may not recalculate due to rounding | Three months ended | Increase (Decrease) | ||||||||||
Baskin-Robbins U.S. | December 30, 2017 | December 31, 2016 | $ / # | % | ||||||||
(13 weeks) | (14 weeks) | |||||||||||
($ in thousands except as otherwise noted) | ||||||||||||
Revenues: | ||||||||||||
Royalty income | $ | 5,459 | 5,363 | 96 | 1.8 | % | ||||||
Franchise fees | 899 | 287 | 612 | 213.2 | % | |||||||
Rental income | 743 | 773 | (30 | ) | (3.9 | )% | ||||||
Sales of ice cream and other products | 1,269 | 595 | 674 | 113.3 | % | |||||||
Other revenues | 2,189 | 2,414 | (225 | ) | (9.3 | )% | ||||||
Total revenues | $ | 10,559 | 9,432 | 1,127 | 11.9 | % | ||||||
Segment profit | $ | 5,439 | 5,117 | 322 | 6.3 | % | ||||||
Comparable store sales growth (decline) | 5.1 | % | (0.9 | )% | ||||||||
Systemwide sales (in millions)1 | $ | 112.4 | 112.5 | (0.1 | ) | (0.1 | )% | |||||
Points of distribution | 2,560 | 2,538 | 22 | 0.9 | % | |||||||
Gross openings | 32 | 29 | 3 | 10.3 | % | |||||||
Net openings (closings) | (2 | ) | 5 | (7 | ) | (140.0 | )% |
Amounts and percentages may not recalculate due to rounding | Three months ended | Increase (Decrease) | ||||||||||
Baskin-Robbins International | December 30, 2017 | December 31, 2016 | $ / # | % | ||||||||
(13 weeks) | (14 weeks) | |||||||||||
($ in thousands except as otherwise noted) | ||||||||||||
Revenues: | ||||||||||||
Royalty income | $ | 1,754 | 1,392 | 362 | 26.0 | % | ||||||
Franchise fees | 384 | 415 | (31 | ) | (7.5 | )% | ||||||
Rental income | 126 | 118 | 8 | 6.8 | % | |||||||
Sales of ice cream and other products | 23,434 | 27,509 | (4,075 | ) | (14.8 | )% | ||||||
Other revenues | 106 | 3 | 103 | 3,433.3 | % | |||||||
Total revenues | $ | 25,804 | 29,437 | (3,633 | ) | (12.3 | )% | |||||
Segment profit | $ | 7,436 | 8,350 | (914 | ) | (10.9 | )% | |||||
Comparable store sales growth | 3.0 | % | 0.7 | % | ||||||||
Systemwide sales (in millions)1 | $ | 326.4 | 301.7 | 24.8 | 8.2 | % | ||||||
Points of distribution | 5,422 | 5,284 | 138 | 2.6 | % | |||||||
Gross openings | 115 | 151 | (36 | ) | (23.8 | )% | ||||||
Net openings | 40 | 41 | (1 | ) | (2.4 | )% |
• | The Company today announced that the Board of Directors declared a cash dividend of $0.3475 per share, payable on March 21, 2018 to shareholders of record as of the close of business on March 12, 2018. This represents a 7.75 percent increase over the prior quarter's dividend. |
• | In January, the Company announced that it was reducing its general and administrative expense target in 2018 by approximately five percent from 2017 to a target of two percent of systemwide sales. |
• | The Company expects that its 2018 effective tax rate will be approximately 28 percent, which reflects the impact from the Tax Act, net of state taxes and international provisions. |
• | The Company will be hosting its 2018 Investor & Analyst day on Thursday, February 8, 2018, at Fenway Park in Boston, Mass. Attendance at the event is by invitation only; however a live audio webcast of the conference including slide presentations will be accessible via the Company's website at: http://investor.dunkinbrands.com under "Events & Presentations". The conference is scheduled to begin at 9:00 AM Eastern Time and will continue until approximately 3:00 PM Eastern Time. A replay of the webcast, along with slide presentations, will remain accessible on the Company's website through March 9, 2018. |
• | The Company will provide its 2018 and long-term financial targets at its upcoming Investor & Analyst day. |
Stacey Caravella (Investors) | Karen Raskopf (Media) | |
Sr. Director, IR & Market Intelligence | SVP, Corporate Communications | |
Dunkin’ Brands Group, Inc. | Dunkin’ Brands Group, Inc. | |
investor.relations@dunkinbrands.com | karen.raskopf@dunkinbrands.com | |
781-737-3200 | 781-737-5200 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
(In thousands, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Three months ended | Fiscal year ended | ||||||||||||
December 30, 2017 | December 31, 2016 | December 30, 2017 | December 31, 2016 | ||||||||||
(13 weeks) | (14 weeks) | (52 weeks) | (53 weeks) | ||||||||||
Revenues: | |||||||||||||
Franchise fees and royalty income | $ | 165,745 | 149,954 | 592,689 | 549,571 | ||||||||
Rental income | 25,100 | 25,146 | 104,643 | 101,020 | |||||||||
Sales of ice cream and other products | 24,949 | 28,432 | 110,659 | 114,857 | |||||||||
Sales at company-operated restaurants | — | 51 | — | 11,975 | |||||||||
Other revenues | 11,345 | 12,122 | 52,510 | 51,466 | |||||||||
Total revenues | 227,139 | 215,705 | 860,501 | 828,889 | |||||||||
Operating costs and expenses: | |||||||||||||
Occupancy expenses—franchised restaurants | 16,543 | 14,718 | 60,301 | 57,409 | |||||||||
Cost of ice cream and other products | 18,434 | 19,163 | 77,012 | 77,608 | |||||||||
Company-operated restaurant expenses | — | 119 | — | 13,591 | |||||||||
General and administrative expenses, net | 63,362 | 62,786 | 248,975 | 246,814 | |||||||||
Depreciation | 4,988 | 5,097 | 20,084 | 20,458 | |||||||||
Amortization of other intangible assets | 5,334 | 5,353 | 21,335 | 22,079 | |||||||||
Long-lived asset impairment charges | 974 | 45 | 1,617 | 149 | |||||||||
Total operating costs and expenses | 109,635 | 107,281 | 429,324 | 438,108 | |||||||||
Net income of equity method investments | 2,586 | 2,404 | 15,198 | 14,552 | |||||||||
Other operating income, net | 36 | 3,052 | 627 | 9,381 | |||||||||
Operating income | 120,126 | 113,880 | 447,002 | 414,714 | |||||||||
Other income (expense), net: | |||||||||||||
Interest income | 1,943 | 148 | 3,313 | 582 | |||||||||
Interest expense | (30,231 | ) | (26,396 | ) | (104,423 | ) | (100,852 | ) | |||||
Loss on debt extinguishment and refinancing transactions | (6,996 | ) | — | (6,996 | ) | — | |||||||
Other gains (losses), net | 21 | (599 | ) | 391 | (1,195 | ) | |||||||
Total other expense, net | (35,263 | ) | (26,847 | ) | (107,715 | ) | (101,465 | ) | |||||
Income before income taxes | 84,863 | 87,033 | 339,287 | 313,249 | |||||||||
Provision (benefit) for income taxes | (110,629 | ) | 30,913 | (11,622 | ) | 117,673 | |||||||
Net income | $ | 195,492 | 56,120 | 350,909 | 195,576 | ||||||||
Earnings per share—basic | $ | 2.17 | 0.61 | 3.86 | 2.14 | ||||||||
Earnings per share—diluted | 2.13 | 0.61 | 3.80 | 2.11 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||
Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
December 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,018,317 | 361,425 | ||||
Restricted cash | 94,047 | 69,746 | |||||
Accounts receivable, net | 51,442 | 44,512 | |||||
Notes and other receivables, net | 51,082 | 40,672 | |||||
Restricted assets of advertising funds | 47,373 | 40,338 | |||||
Prepaid income taxes | 21,879 | 20,926 | |||||
Prepaid expenses and other current assets | 32,695 | 28,739 | |||||
Total current assets | 1,316,835 | 606,358 | |||||
Property and equipment, net | 169,005 | 176,662 | |||||
Equity method investments | 140,615 | 114,738 | |||||
Goodwill | 888,308 | 888,272 | |||||
Other intangibles assets, net | 1,357,157 | 1,378,720 | |||||
Other assets | 65,464 | 62,632 | |||||
Total assets | $ | 3,937,384 | 3,227,382 | ||||
Liabilities and Stockholders’ Equity (Deficit) | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 31,500 | 25,000 | ||||
Capital lease obligations | 596 | 589 | |||||
Accounts payable | 16,307 | 12,682 | |||||
Liabilities of advertising funds | 58,014 | 52,271 | |||||
Deferred income | 39,395 | 35,393 | |||||
Other current liabilities | 326,078 | 298,266 | |||||
Total current liabilities | 471,890 | 424,201 | |||||
Long-term debt, net | 3,035,857 | 2,401,998 | |||||
Capital lease obligations | 7,180 | 7,550 | |||||
Unfavorable operating leases acquired | 9,780 | 11,378 | |||||
Deferred income | 11,158 | 12,154 | |||||
Deferred income taxes, net | 315,249 | 461,810 | |||||
Other long-term liabilities | 77,823 | 71,549 | |||||
Total long-term liabilities | 3,457,047 | 2,966,439 | |||||
Stockholders’ equity (deficit): | |||||||
Preferred stock | — | — | |||||
Common stock | 90 | 91 | |||||
Additional paid-in-capital | 724,114 | 807,492 | |||||
Treasury stock, at cost | (1,060 | ) | (1,060 | ) | |||
Accumulated deficit | (705,007 | ) | (945,797 | ) | |||
Accumulated other comprehensive loss | (9,690 | ) | (23,984 | ) | |||
Stockholders’ equity (deficit) | 8,447 | (163,258 | ) | ||||
Total liabilities and stockholders’ equity (deficit) | $ | 3,937,384 | 3,227,382 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Fiscal year ended | |||||||
December 30, 2017 | December 31, 2016 | ||||||
(52 weeks) | (53 weeks) | ||||||
Net cash provided by operating activities(a) | $ | 276,908 | 276,827 | ||||
Cash flows from investing activities: | |||||||
Additions to property and equipment | (14,606 | ) | (15,174 | ) | |||
Proceeds from sale of real estate and company-operated restaurants | 854 | 20,523 | |||||
Other, net | (102 | ) | (4,006 | ) | |||
Net cash provided by (used in) investing activities | (13,854 | ) | 1,343 | ||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of long-term debt | 1,400,000 | — | |||||
Repayment of long-term debt | (754,375 | ) | (25,000 | ) | |||
Payment of debt issuance and other debt-related costs | (18,441 | ) | — | ||||
Dividends paid on common stock | (117,003 | ) | (109,703 | ) | |||
Repurchases of common stock, including accelerated share repurchases | (127,186 | ) | (55,000 | ) | |||
Exercise of stock options | 36,344 | 10,647 | |||||
Other, net | (698 | ) | (122 | ) | |||
Net cash provided by (used in) financing activities(a) | 418,641 | (179,178 | ) | ||||
Effect of exchange rates on cash, cash equivalents, and restricted cash(a) | 572 | (275 | ) | ||||
Increase in cash, cash equivalents, and restricted cash | 682,267 | 98,717 | |||||
Cash, cash equivalents, and restricted cash, beginning of period(a) | 431,832 | 333,115 | |||||
Cash, cash equivalents, and restricted cash, end of period(a) | $ | 1,114,099 | 431,832 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||||||||
Non-GAAP Reconciliations | |||||||||||||
(In thousands, except share and per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Three months ended | Fiscal year ended | ||||||||||||
December 30, 2017 | December 31, 2016 | December 30, 2017 | December 31, 2016 | ||||||||||
(13 weeks) | (14 weeks) | (52 weeks) | (53 weeks) | ||||||||||
Operating income | $ | 120,126 | 113,880 | 447,002 | 414,714 | ||||||||
Operating income margin | 52.9 | % | 52.8 | % | 51.9 | % | 50.0 | % | |||||
Adjustments: | |||||||||||||
Amortization of other intangible assets | $ | 5,334 | 5,353 | 21,335 | 22,079 | ||||||||
Long-lived asset impairment charges | 974 | 45 | 1,617 | 149 | |||||||||
Transaction-related costs(a) | — | — | — | 64 | |||||||||
Bertico-related litigation(b) | (2,898 | ) | — | (2,898 | ) | (428 | ) | ||||||
Adjusted operating income | $ | 123,536 | 119,278 | 467,056 | 436,578 | ||||||||
Adjusted operating income margin | 54.4 | % | 55.3 | % | 54.3 | % | 52.7 | % | |||||
Net income attributable to Dunkin' Brands | $ | 195,492 | 56,120 | 350,909 | 195,576 | ||||||||
Adjustments: | |||||||||||||
Amortization of other intangible assets | 5,334 | 5,353 | 21,335 | 22,079 | |||||||||
Long-lived asset impairment charges | 974 | 45 | 1,617 | 149 | |||||||||
Transaction-related costs(a) | — | — | — | 64 | |||||||||
Bertico-related litigation(b) | (2,898 | ) | — | (2,898 | ) | (428 | ) | ||||||
Loss on debt extinguishment and refinancing transactions | 6,996 | — | 6,996 | — | |||||||||
Tax impact of adjustments(c) | (4,162 | ) | (2,160 | ) | (10,820 | ) | (8,746 | ) | |||||
Impact of tax reform(d) | (143,382 | ) | — | (143,382 | ) | — | |||||||
Adjusted net income | $ | 58,354 | 59,358 | 223,757 | 208,694 | ||||||||
Adjusted net income | $ | 58,354 | 59,358 | 223,757 | 208,694 | ||||||||
Weighted average number of common shares – diluted | 91,765,911 | 92,518,754 | 92,231,436 | 92,538,282 | |||||||||
Diluted adjusted earnings per share | $ | 0.64 | 0.64 | 2.43 | 2.26 | ||||||||
(a) Represents non-capitalizable costs incurred as a result of the securitized financing facility, which was completed in January 2015. | |||||||||||||
(b) Adjustments for the three months and fiscal year ended December 30, 2017 represent a reduction to legal reserves for Bertico-related litigation based upon final settlement of such matters. Adjustment for the fiscal year ended December 31, 2016 represents a net reduction to legal reserves for the Bertico litigation and related matters based upon final agreement of interest and related costs associated with the judgment. | |||||||||||||
(c) Tax impact of adjustments calculated at a 40% effective tax rate. | |||||||||||||
(d) Net tax benefit due to the enactment of the Tax Act during the three months ended December 30, 2017, consisting primarily of the re-measurement of deferred tax liabilities using the lower enacted corporate tax rate. |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||
Non-GAAP Reconciliations (continued) | |||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three months ended | Fiscal year ended | ||||||||||||||||||
December 30, 2017 | December 31, 2016 | % | December 30, 2017 | December 31, 2016 | % | ||||||||||||||
Total revenues | $ | 227,139 | 215,705 | 5.3 | % | 860,501 | 828,889 | 3.8 | % | ||||||||||
Impact of extra week(a) | — | (8,756 | ) | — | (8,756 | ) | |||||||||||||
Total revenues, 13-week / 52-week basis | $ | 227,139 | 206,949 | 9.8 | % | 860,501 | 820,133 | 4.9 | % | ||||||||||
Operating income | $ | 120,126 | 113,880 | 5.5 | % | 447,002 | 414,714 | 7.8 | % | ||||||||||
Impact of extra week(a) | — | (6,112 | ) | — | (6,112 | ) | |||||||||||||
Operating income, 13-week / 52-week basis | $ | 120,126 | 107,768 | 11.5 | % | 447,002 | 408,602 | 9.4 | % | ||||||||||
Adjusted operating income | $ | 123,536 | 119,278 | 3.6 | % | 467,056 | 436,578 | 7.0 | % | ||||||||||
Impact of extra week(a) | — | (6,112 | ) | — | (6,112 | ) | |||||||||||||
Adjusted operating income, 13-week / 52-week basis | $ | 123,536 | 113,166 | 9.2 | % | 467,056 | 430,466 | 8.5 | % | ||||||||||
Net income attributable to Dunkin' Brands | $ | 195,492 | 56,120 | 248.3 | % | 350,909 | 195,576 | 79.4 | % | ||||||||||
Impact of extra week(a) | — | (4,247 | ) | — | (4,247 | ) | |||||||||||||
Tax impact of extra week(b) | — | 1,699 | — | 1,699 | |||||||||||||||
Net income, 13-week / 52-week basis | $ | 195,492 | 53,572 | 264.9 | % | 350,909 | 193,028 | 81.8 | % | ||||||||||
Adjusted net income | $ | 58,354 | 59,358 | (1.7 | )% | 223,757 | 208,694 | 7.2 | % | ||||||||||
Impact of extra week(a) | — | (4,247 | ) | — | (4,247 | ) | |||||||||||||
Tax impact of extra week(b) | — | 1,699 | — | 1,699 | |||||||||||||||
Adjusted net income, 13-week / 52-week basis | $ | 58,354 | 56,810 | 2.7 | % | 223,757 | 206,146 | 8.5 | % | ||||||||||
Diluted earnings per share | $ | 2.13 | 0.61 | 249.2 | % | 3.80 | 2.11 | 80.1 | % | ||||||||||
Impact of extra week(a) | — | (0.05 | ) | — | (0.05 | ) | |||||||||||||
Tax impact of extra week(b) | — | 0.02 | — | 0.02 | |||||||||||||||
Diluted earnings per share, 13-week / 52-week basis | $ | 2.13 | 0.58 | 267.2 | % | 3.80 | 2.08 | 82.7 | % | ||||||||||
Diluted adjusted earnings per share | $ | 0.64 | 0.64 | — | % | 2.43 | 2.26 | 7.5 | % | ||||||||||
Impact of extra week(a) | — | (0.05 | ) | — | (0.05 | ) | |||||||||||||
Tax impact of extra week(b) | — | 0.02 | — | 0.02 | |||||||||||||||
Diluted adjusted earnings per share, 13-week / 52-week basis | $ | 0.64 | 0.61 | 4.9 | % | 2.43 | 2.23 | 9.0 | % | ||||||||||
(a) The three months and fiscal year ended December 31, 2016 include 14 weeks and 53 weeks, respectively, as compared to 13 weeks and 52 weeks for the three months and fiscal year ended December 30, 2017, respectively. The impact of the extra week in the three months and fiscal year ended December 31, 2016 reflects our estimate of the additional week in those fiscal periods on certain revenues and expenses. | |||||||||||||||||||
(b) Tax impact of adjustments for the extra week calculated at a 40% effective tax rate. |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Fiscal year ended December 30, 2017 | |||||||||||||||||||
Adjustments for new revenue recognition guidance | |||||||||||||||||||
As reported | Franchise fees | Advertising | Ice cream royalty allocation | Other revenue transactions | Restated | ||||||||||||||
Revenues: | |||||||||||||||||||
Franchise fees and royalty income(a) | $ | 592,689 | (51,754 | ) | — | 14,271 | — | 555,206 | |||||||||||
Advertising fees and related income | — | — | 470,984 | — | — | 470,984 | |||||||||||||
Rental income | 104,643 | — | — | — | — | 104,643 | |||||||||||||
Sales of ice cream and other products | 110,659 | — | — | (14,271 | ) | — | 96,388 | ||||||||||||
Other revenues | 52,510 | (5,838 | ) | — | — | 1,658 | 48,330 | ||||||||||||
Total revenues | 860,501 | (57,592 | ) | 470,984 | — | 1,658 | 1,275,551 | ||||||||||||
Operating costs and expenses: | |||||||||||||||||||
Occupancy expenses—franchised restaurants | 60,301 | — | — | — | — | 60,301 | |||||||||||||
Cost of ice cream and other products | 77,012 | — | — | — | — | 77,012 | |||||||||||||
Advertising expenses | — | — | 476,157 | — | — | 476,157 | |||||||||||||
General and administrative expenses, net | 248,975 | — | (5,147 | ) | — | — | 243,828 | ||||||||||||
Depreciation | 20,084 | — | — | — | — | 20,084 | |||||||||||||
Amortization of other intangible assets | 21,335 | — | — | — | — | 21,335 | |||||||||||||
Long-lived asset impairment charges | 1,617 | — | — | — | — | 1,617 | |||||||||||||
Total operating costs and expenses | 429,324 | — | 471,010 | — | — | 900,334 | |||||||||||||
Net income of equity method investments | 15,198 | — | — | — | — | 15,198 | |||||||||||||
Other operating income, net | 627 | — | — | — | — | 627 | |||||||||||||
Operating income | 447,002 | (57,592 | ) | (26 | ) | — | 1,658 | 391,042 | |||||||||||
Other income (expense), net: | |||||||||||||||||||
Interest income | 3,313 | — | — | — | — | 3,313 | |||||||||||||
Interest expense | (104,423 | ) | — | — | — | — | (104,423 | ) | |||||||||||
Loss on debt extinguishment and refinancing transactions | (6,996 | ) | — | — | — | — | (6,996 | ) | |||||||||||
Other gains, net | 391 | — | — | — | — | 391 | |||||||||||||
Total other expense, net | (107,715 | ) | — | — | — | — | (107,715 | ) | |||||||||||
Income before income taxes(b) | 339,287 | (57,592 | ) | (26 | ) | — | 1,658 | 283,327 | |||||||||||
Provision (benefit) for income taxes | (11,622 | ) | 18,656 | — | — | 5,084 | 12,118 | ||||||||||||
Net income | $ | 350,909 | (76,248 | ) | (26 | ) | — | (3,426 | ) | 271,209 | |||||||||
Earnings per share—basic(c) | $ | 3.86 | (0.84 | ) | — | — | (0.04 | ) | 2.99 | ||||||||||
Earnings per share—diluted(c) | 3.80 | (0.83 | ) | — | — | (0.04 | ) | 2.94 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Fiscal year ended December 31, 2016 | |||||||||||||||||||
Adjustments for new revenue recognition guidance | |||||||||||||||||||
As reported | Franchise fees | Advertising | Ice cream royalty allocation | Other revenue transactions | Restated | ||||||||||||||
Revenues: | |||||||||||||||||||
Franchise fees and royalty income(a) | $ | 549,571 | (27,490 | ) | — | 14,315 | — | 536,396 | |||||||||||
Advertising fees and related income | — | — | 453,553 | — | — | 453,553 | |||||||||||||
Rental income | 101,020 | — | — | — | — | 101,020 | |||||||||||||
Sales of ice cream and other products | 114,857 | — | — | (14,315 | ) | — | 100,542 | ||||||||||||
Sales at company-operated restaurants | 11,975 | — | — | — | — | 11,975 | |||||||||||||
Other revenues | 51,466 | (5,072 | ) | — | — | (1,525 | ) | 44,869 | |||||||||||
Total revenues | 828,889 | (32,562 | ) | 453,553 | — | (1,525 | ) | 1,248,355 | |||||||||||
Operating costs and expenses: | |||||||||||||||||||
Occupancy expenses—franchised restaurants | 57,409 | — | — | — | — | 57,409 | |||||||||||||
Cost of ice cream and other products | 77,608 | — | — | — | — | 77,608 | |||||||||||||
Company-operated restaurant expenses | 13,591 | — | — | — | — | 13,591 | |||||||||||||
Advertising expenses | — | — | 458,568 | — | — | 458,568 | |||||||||||||
General and administrative expenses, net | 246,814 | — | (4,990 | ) | — | — | 241,824 | ||||||||||||
Depreciation | 20,458 | — | — | — | — | 20,458 | |||||||||||||
Amortization of other intangible assets | 22,079 | — | — | — | — | 22,079 | |||||||||||||
Long-lived asset impairment charges | 149 | — | — | — | — | 149 | |||||||||||||
Total operating costs and expenses | 438,108 | — | 453,578 | — | — | 891,686 | |||||||||||||
Net income of equity method investments | 14,552 | — | — | — | — | 14,552 | |||||||||||||
Other operating income, net | 9,381 | — | — | — | — | 9,381 | |||||||||||||
Operating income | 414,714 | (32,562 | ) | (25 | ) | — | (1,525 | ) | 380,602 | ||||||||||
Other income (expense), net: | |||||||||||||||||||
Interest income | 582 | — | — | — | — | 582 | |||||||||||||
Interest expense | (100,852 | ) | — | — | — | — | (100,852 | ) | |||||||||||
Other losses, net | (1,195 | ) | — | — | — | — | (1,195 | ) | |||||||||||
Total other expense, net | (101,465 | ) | — | — | — | — | (101,465 | ) | |||||||||||
Income before income taxes | 313,249 | (32,562 | ) | (25 | ) | — | (1,525 | ) | 279,137 | ||||||||||
Provision (benefit) for income taxes | 117,673 | (13,205 | ) | — | — | (620 | ) | 103,848 | |||||||||||
Net income | $ | 195,576 | (19,357 | ) | (25 | ) | — | (905 | ) | 175,289 | |||||||||
Earnings per share—basic(b) | $ | 2.14 | (0.21 | ) | — | — | (0.01 | ) | 1.91 | ||||||||||
Earnings per share—diluted(b) | 2.11 | (0.21 | ) | — | — | (0.01 | ) | 1.89 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||
Consolidated Balance Sheets | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
December 30, 2017 | ||||||||||||||||
Adjustments for new revenue recognition guidance | ||||||||||||||||
As reported | Franchise fees | Advertising | Other revenue transactions | Restated | ||||||||||||
Assets | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 1,018,317 | — | — | — | 1,018,317 | ||||||||||
Restricted cash | 94,047 | — | — | — | 94,047 | |||||||||||
Accounts receivables, net | 51,442 | — | 18,075 | — | 69,517 | |||||||||||
Notes and other receivables, net | 51,082 | — | 1,250 | — | 52,332 | |||||||||||
Restricted assets of advertising funds | 47,373 | — | (47,373 | ) | — | — | ||||||||||
Prepaid income taxes | 21,879 | — | 48 | — | 21,927 | |||||||||||
Prepaid expenses and other current assets | 32,695 | — | 15,498 | — | 48,193 | |||||||||||
Total current assets | 1,316,835 | — | (12,502 | ) | — | 1,304,333 | ||||||||||
Property and equipment, net | 169,005 | — | 12,537 | — | 181,542 | |||||||||||
Equity method investments | 140,615 | — | — | — | 140,615 | |||||||||||
Goodwill | 888,308 | — | — | — | 888,308 | |||||||||||
Other intangibles assets, net | 1,357,157 | — | — | — | 1,357,157 | |||||||||||
Other assets | 65,464 | — | 14 | — | 65,478 | |||||||||||
Total assets | $ | 3,937,384 | — | 49 | — | 3,937,433 | ||||||||||
Liabilities and Stockholders’ Equity (Deficit) | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Current portion of long-term debt | $ | 31,500 | — | — | — | 31,500 | ||||||||||
Capital lease obligations | 596 | — | — | — | 596 | |||||||||||
Accounts payable | 16,307 | — | 37,110 | — | 53,417 | |||||||||||
Liabilities of advertising funds | 58,014 | — | (58,014 | ) | — | — | ||||||||||
Deferred income | 39,395 | 1,502 | (550 | ) | 4,529 | 44,876 | ||||||||||
Other current liabilities | 326,078 | — | 29,032 | — | 355,110 | |||||||||||
Total current liabilities | 471,890 | 1,502 | 7,578 | 4,529 | 485,499 | |||||||||||
Long-term debt, net | 3,035,857 | — | — | — | 3,035,857 | |||||||||||
Capital lease obligations | 7,180 | — | — | — | 7,180 | |||||||||||
Unfavorable operating leases acquired | 9,780 | — | — | — | 9,780 | |||||||||||
Deferred income | 11,158 | 328,183 | (7,518 | ) | 29,635 | 361,458 | ||||||||||
Deferred income taxes, net | 315,249 | (91,488 | ) | — | (9,416 | ) | 214,345 | |||||||||
Other long-term liabilities | 77,823 | — | 30 | — | 77,853 | |||||||||||
Total long-term liabilities | 3,457,047 | 236,695 | (7,488 | ) | 20,219 | 3,706,473 | ||||||||||
Stockholders’ equity (deficit) | ||||||||||||||||
Preferred stock | — | — | — | — | — | |||||||||||
Common stock | 90 | — | — | — | 90 | |||||||||||
Additional paid-in-capital | 724,114 | — | — | — | 724,114 | |||||||||||
Treasury stock, at cost | (1,060 | ) | — | — | — | (1,060 | ) | |||||||||
Accumulated deficit | (705,007 | ) | (238,197 | ) | (196 | ) | (24,748 | ) | (968,148 | ) | ||||||
Accumulated other comprehensive loss | (9,690 | ) | — | 155 | — | (9,535 | ) | |||||||||
Stockholders’ equity (deficit) | 8,447 | (238,197 | ) | (41 | ) | (24,748 | ) | (254,539 | ) | |||||||
Total liabilities and stockholders’ equity (deficit) | $ | 3,937,384 | — | 49 | — | 3,937,433 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||
Consolidated Balance Sheets | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
December 31, 2016 | ||||||||||||||||
Adjustments for new revenue recognition guidance | ||||||||||||||||
As reported | Franchise fees | Advertising | Other revenue transactions | Restated | ||||||||||||
Assets | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 361,425 | — | — | — | 361,425 | ||||||||||
Restricted cash | 69,746 | — | — | — | 69,746 | |||||||||||
Accounts receivables, net | 44,512 | — | 17,741 | — | 62,253 | |||||||||||
Notes and other receivables, net | 40,672 | — | 592 | — | 41,264 | |||||||||||
Restricted assets of advertising funds | 40,338 | — | (40,338 | ) | — | — | ||||||||||
Prepaid income taxes | 20,926 | — | 36 | — | 20,962 | |||||||||||
Prepaid expenses and other current assets | 28,739 | — | 12,823 | — | 41,562 | |||||||||||
Total current assets | 606,358 | — | (9,146 | ) | — | 597,212 | ||||||||||
Property and equipment, net | 176,662 | — | 9,153 | — | 185,815 | |||||||||||
Equity method investments | 114,738 | — | — | — | 114,738 | |||||||||||
Goodwill | 888,272 | — | — | — | 888,272 | |||||||||||
Other intangibles assets, net | 1,378,720 | — | — | — | 1,378,720 | |||||||||||
Other assets | 62,632 | — | 30 | — | 62,662 | |||||||||||
Total assets | $ | 3,227,382 | — | 37 | — | 3,227,419 | ||||||||||
Liabilities and Stockholders’ Deficit | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Current portion of long-term debt | $ | 25,000 | — | — | — | 25,000 | ||||||||||
Capital lease obligations | 589 | — | — | — | 589 | |||||||||||
Accounts payable | 12,682 | — | 34,806 | — | 47,488 | |||||||||||
Liabilities of advertising funds | 52,271 | — | (52,271 | ) | — | — | ||||||||||
Deferred income | 35,393 | 2,699 | (591 | ) | 4,812 | 42,313 | ||||||||||
Other current liabilities | 298,266 | — | 26,293 | — | 324,559 | |||||||||||
Total current liabilities | 424,201 | 2,699 | 8,237 | 4,812 | 439,949 | |||||||||||
Long-term debt, net | 2,401,998 | — | — | — | 2,401,998 | |||||||||||
Capital lease obligations | 7,550 | — | — | — | 7,550 | |||||||||||
Unfavorable operating leases acquired | 11,378 | — | — | — | 11,378 | |||||||||||
Deferred income | 12,154 | 269,394 | (8,186 | ) | 31,010 | 304,372 | ||||||||||
Deferred income taxes, net | 461,810 | (110,144 | ) | — | (14,500 | ) | 337,166 | |||||||||
Other long-term liabilities | 71,549 | — | 45 | — | 71,594 | |||||||||||
Total long-term liabilities | 2,966,439 | 159,250 | (8,141 | ) | 16,510 | 3,134,058 | ||||||||||
Stockholders’ deficit: | ||||||||||||||||
Preferred stock | — | — | — | — | — | |||||||||||
Common stock | 91 | — | — | — | 91 | |||||||||||
Additional paid-in-capital | 807,492 | — | — | — | 807,492 | |||||||||||
Treasury stock, at cost | (1,060 | ) | — | — | — | (1,060 | ) | |||||||||
Accumulated deficit | (945,797 | ) | (161,949 | ) | (170 | ) | (21,322 | ) | (1,129,238 | ) | ||||||
Accumulated other comprehensive loss | (23,984 | ) | — | 111 | — | (23,873 | ) | |||||||||
Stockholders’ deficit | (163,258 | ) | (161,949 | ) | (59 | ) | (21,322 | ) | (346,588 | ) | ||||||
Total liabilities and stockholders’ deficit | $ | 3,227,382 | — | 37 | — | 3,227,419 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | ||||||||||
Select Cash Flow Information | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Fiscal year ended December 30, 2017 | ||||||||||
As reported | Adjustments for new revenue recognition guidance(a) | Restated | ||||||||
Net cash provided by operating activities | $ | 276,908 | 6,449 | 283,357 | ||||||
Net cash used in investing activities | (13,854 | ) | (6,449 | ) | (20,303 | ) | ||||
Net cash provided by financing activities | 418,641 | — | 418,641 | |||||||
Increase in cash, cash equivalents, and restricted cash | 682,267 | — | 682,267 | |||||||
Fiscal year ended December 31, 2016 | ||||||||||
As reported | Adjustments for new revenue recognition guidance(a) | Restated | ||||||||
Net cash provided by operating activities | $ | 276,827 | 5,652 | 282,479 | ||||||
Net cash provided by (used in) investing activities | 1,343 | (5,652 | ) | (4,309 | ) | |||||
Net cash used in financing activities | (179,178 | ) | — | (179,178 | ) | |||||
Increase in cash, cash equivalents, and restricted cash | 98,717 | — | 98,717 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
(In thousands, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Three months ended | |||||||||||||
April 1, 2017 | July 1, 2017 | September 30, 2017 | December 30, 2017 | ||||||||||
(Restated) | (Restated) | (Restated) | (Restated) | ||||||||||
Revenues: | |||||||||||||
Franchise fees and royalty income | $ | 127,715 | 143,894 | 143,734 | 139,863 | ||||||||
Advertising fees and related income | 110,203 | 122,361 | 122,660 | 115,760 | |||||||||
Rental income | 24,422 | 27,408 | 27,713 | 25,100 | |||||||||
Sales of ice cream and other products | 22,506 | 28,679 | 23,173 | 22,030 | |||||||||
Other revenues | 11,512 | 11,834 | 12,791 | 12,193 | |||||||||
Total revenues | 296,358 | 334,176 | 330,071 | 314,946 | |||||||||
Operating costs and expenses: | |||||||||||||
Occupancy expenses—franchised restaurants | 14,138 | 14,287 | 15,333 | 16,543 | |||||||||
Cost of ice cream and other products | 16,922 | 22,199 | 19,457 | 18,434 | |||||||||
Advertising expenses | 111,072 | 123,676 | 124,080 | 117,329 | |||||||||
General and administrative expenses, net | 60,369 | 61,074 | 60,580 | 61,805 | |||||||||
Depreciation | 5,084 | 5,071 | 4,941 | 4,988 | |||||||||
Amortization of other intangible assets | 5,327 | 5,333 | 5,341 | 5,334 | |||||||||
Long-lived asset impairment charges | 47 | 60 | 536 | 974 | |||||||||
Total operating costs and expenses | 212,959 | 231,700 | 230,268 | 225,407 | |||||||||
Net income of equity method investments | 2,819 | 4,327 | 5,466 | 2,586 | |||||||||
Other operating income, net | 555 | 33 | 3 | 36 | |||||||||
Operating income | 86,773 | 106,836 | 105,272 | 92,161 | |||||||||
Other income (expense), net: | |||||||||||||
Interest income | 321 | 425 | 624 | 1,943 | |||||||||
Interest expense | (24,871 | ) | (24,885 | ) | (24,436 | ) | (30,231 | ) | |||||
Loss on debt extinguishment and refinancing transactions | — | — | — | (6,996 | ) | ||||||||
Other gains, net | 187 | 28 | 155 | 21 | |||||||||
Total other expense, net | (24,363 | ) | (24,432 | ) | (23,657 | ) | (35,263 | ) | |||||
Income before income taxes | 62,410 | 82,404 | 81,615 | 56,898 | |||||||||
Provision (benefit) for income taxes | 18,117 | 31,312 | 40,445 | (77,756 | ) | ||||||||
Net income | $ | 44,293 | 51,092 | 41,170 | 134,654 | ||||||||
Earnings per share—basic | $ | 0.48 | 0.56 | 0.46 | 1.49 | ||||||||
Earnings per share—diluted | 0.48 | 0.55 | 0.45 | 1.47 |
DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES | |||||||
Non-GAAP Reconciliations | |||||||
(In thousands, except share and per share data) | |||||||
(Unaudited) | |||||||
Fiscal year ended | |||||||
December 30, 2017 | December 31, 2016 | ||||||
(52 weeks) | (53 weeks) | ||||||
Operating income | $ | 391,042 | 380,602 | ||||
Adjustments: | |||||||
Amortization of other intangible assets | 21,335 | 22,079 | |||||
Long-lived asset impairment charges | 1,617 | 149 | |||||
Transaction-related costs(a) | — | 64 | |||||
Bertico-related litigation(b) | (2,898 | ) | (428 | ) | |||
Adjusted operating income | $ | 411,096 | 402,466 | ||||
Net income attributable to Dunkin' Brands | $ | 271,209 | 175,289 | ||||
Adjustments: | |||||||
Amortization of other intangible assets | 21,335 | 22,079 | |||||
Long-lived asset impairment charges | 1,617 | 149 | |||||
Transaction-related costs(a) | — | 64 | |||||
Bertico-related litigation(b) | (2,898 | ) | (428 | ) | |||
Loss on debt extinguishment and refinancing transactions | 6,996 | — | |||||
Tax impact of adjustments(c) | (10,820 | ) | (8,746 | ) | |||
Impact of tax reform(d) | (96,803 | ) | — | ||||
Adjusted net income | $ | 190,636 | 188,407 | ||||
Adjusted net income | $ | 190,636 | 188,407 | ||||
Weighted average number of common shares – diluted | 92,231,436 | 92,538,282 | |||||
Diluted adjusted earnings per share | $ | 2.07 | 2.04 | ||||
(a) Represents non-capitalizable costs incurred as a result of the securitized financing facility, which was completed in January 2015. | |||||||
(b) Adjustment for the fiscal year ended December 30, 2017 represents a reduction to legal reserves for Bertico-related litigation based upon final settlement of such matters. Adjustment for the fiscal year ended December 31, 2016 represents a net reduction to legal reserves for the Bertico litigation and related matters based upon final agreement of interest and related costs associated with the judgment. | |||||||
(c) Tax impact of adjustments calculated at a 40% effective tax rate. | |||||||
(d) Net tax benefit due to the enactment of the Tax Cuts and Jobs Act during the fiscal year ended December 30, 2017, consisting primarily of the re-measurement of deferred tax liabilities using the lower enacted corporate tax rate. |
Stacey Caravella (Investors) | Michelle King (Media) | |
Sr. Director, IR & Competitive Intelligence | Sr. Director, Global Public Relations | |
Dunkin’ Brands Group, Inc. | Dunkin’ Brands Group, Inc. | |
investor.relations@dunkinbrands.com | michelle.king@dunkinbrands.com | |
781-737-3200 | 781-737-5200 |