Dunkin' Brands Reports Fourth Quarter and Full Year 2012 Results

       Dunkin' Brands Reports Fourth Quarter and Full Year 2012 Results

PR Newswire

CANTON, Mass., Jan. 31, 2013

CANTON, Mass., Jan.31, 2013 /PRNewswire/ --

Fourth quarter highlights include:

  o3.2 percent Dunkin' Donuts U.S. comparable store sales growth
  oAdded 256 net new restaurants worldwide including 149 net new Dunkin'
    Donuts in the U.S.
  oAdjusted operating income up 16.1% on a 13-week basis
  oAdjusted operating income margin to 47.6%
  oAdjusted EPS up approximately 21% to $0.34 on a 13-week basis

Fiscal year 2012 highlights include:

  oAdded 665 net new restaurants worldwide including 291 net new Dunkin'
    Donuts in the U.S.
  oRevenue up 6.1% and adjusted operating income up 15.3% on a 52-week basis
  oAdjusted operating income margin to 46.3%
  oAdjusted EPS up approximately 38% to $1.28 on a 52-week basis
  oBoard of Directors declare $0.19 first quarter dividend for a 27% increase
    over the Company's fourth quarter 2012 dividend

Dunkin' Brands Group, Inc. (Nasdaq: DNKN), the parent company of Dunkin'
Donuts (DD) and Baskin-Robbins (BR), today reported results for the fourth
quarter and fiscal year ended December 29, 2012.

(Logo: http://photos.prnewswire.com/prnh/20120516/NE07970LOGO )

"The fourth quarter was strong, and we finished 2012 delivering 15 percent
plus adjusted operating income growth and nearly 40 percent adjusted earnings
per share growth year-over-year," said Nigel Travis, Chief Executive Officer,
Dunkin' Brands Group, Inc., and President, Dunkin' Donuts U.S. "We have the
unique combination of strong brand heritage and significant U.S. and global
restaurant expansion opportunities, which we are capitalizing on to drive
profitable growth for both our franchisees and shareholders. Our contiguous,
strategic development approach is working, and we're excited to begin selling
Dunkin' Donuts franchises in California. Despite macro-economic instability
and a tough competitive environment, consumer and franchisee demand for
Dunkin' Donuts is high, our franchisee relationships are strong, and we
continue to leverage our asset-light business model giving us confidence to
target 15 percent plus adjusted earnings per share growth in 2013."

FISCAL YEAR 2012 KEY FINANCIAL HIGHLIGHTS

($ in millions,                                         Increase      % Change
except per share  Fiscal year ended                     (Decrease)    Excluding
data)                                                                 Impact of
                  December29,            December31,  $/#    %      ExtraWeek^1
                  2012                    2011
Franchisee        $            8,771.3    8,343.9       427.5  5.1%
reported sales
Systemwide sales  5.2%                    9.1%                        7.0%
growth
Comparable store
sales growth:
DD U.S.
comparable store  4.2%                    5.1%
sales growth
BR U.S.
comparable store  3.8%                    0.5%
sales growth
DD
International     2.0%
comparable store
sales growth
BR
International     2.8%
comparable store
sales growth
Development data:
Consolidated
net POD           665                     601           64     10.6%
development
DD global
PODs at period    10,479                  10,083        396    3.9%
end
BR global
PODs at period    6,980                   6,711         269    4.0%
end
Consolidated
global PODs at    17,459                  16,794        665    4.0%
period end
Financial data:
Revenues     $            658.2      628.2         30.0   4.8%   6.1%
Operating    239.4                   205.3         34.1   16.6%  19.1%
income
Operating    36.4%                   32.7%
income margin
Adjusted
operating         $            307.2      270.7         36.4   13.5%  15.3%
income^2
Adjusted
operating income  46.3%                   43.1%
margin^2
Net income   $            108.3      34.4          73.9   214.5% 231.9%
Adjusted net 149.7                   101.7         48.0   47.1%  49.8%
income^2
Earnings (loss)
per share:
Class L –    $n/a 6.14          n/a n/a
basic and diluted
Common –     0.94                    (1.41)        2.35   n/a
basic
Common –     0.93                    (1.41)        2.34   n/a
diluted
Diluted
adjusted earnings
per pro forma     1.28                    0.94          0.34   36.2%  37.6%

common
share^2
Pro forma
weighted average
number of
                  116.6                   107.7         8.9    8.3%
common
shares – diluted
(in millions)
(amounts and percentages may not recalculate due to rounding)

FOURTH QUARTER 2012 KEY FINANCIAL HIGHLIGHTS



($ in millions, except  Three months ended         Increase       %Change
per share data)                                    (Decrease)     Excluding
                        December 29, December31,  $/#    %       Impact of
                        2012         2011                         ExtraWeek^1
Franchisee reported     $    2,212.2 2,222.9       (10.6) (0.5)%
sales
Systemwide sales growth (0.4)%       15.0%                        6.0%
Comparable store sales
growth:
DD U.S. comparable 3.2%         7.4%
store sales growth
BR U.S. comparable 1.5%         5.8%
store sales growth
DD International
comparable store        0.0%
salesgrowth
BR International
comparable store sales  0.0%
growth
Development data:
Consolidated net   256          269           (13)   (4.8)%
POD development
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   41.9%        26.4%
margin
Adjusted operating $    79.8    73.0          6.8    9.3%    16.1%
income^2
Adjusted operating 47.6%        43.3%
income margin^2
Net income         $    34.3    11.6          22.7   196.2%  251.0%
Adjusted net       36.6         36.2          0.5    1.3%    6.6%
income^2
Earnings per
share:
Common –      $      0.32  0.10          0.22   220.0%
basic
Common –      0.32         0.10          0.22   220.0%
diluted
Diluted
adjusted earnings per
pro forma               0.34         0.30          0.04   13.3%   21.4%

common
share^2
Weighted
average number of
common                  107.9        121.0         (13.1) (10.8)%

shares –
diluted (in millions)
(amounts and percentages may not recalculate due to rounding)
^1Fiscal year 2011 and the fourth quarter of 2011 include 53 weeks and 14
weeks, respectively. Please refer to "Non-GAAP Measures and Statistical Data"
and "Dunkin' Brands Group, Inc. Non-GAAP Reconciliations" for further detail.



^2 Adjusted operating income, adjusted operating income margin, and adjusted
net income are non-GAAP measures reflecting operating income and net income
adjusted for amortization of intangible assets, impairment charges, and other
non-recurring, infrequent, or unusual charges, net of the tax impact of such
adjustments in the case of adjusted net income. Diluted adjusted earnings per
pro forma common share is a non-GAAP measure, calculated using adjusted net
income, and gives effect to the conversion of Class L common stock as if the
conversion were completed at the beginning of the respective fiscal period for
which such shares were outstanding, if any. Please refer to "Non-GAAP Measures
and Statistical Data," "Dunkin' Brands Group, Inc. Non-GAAP Reconciliations,"
and "Dunkin' Brands Group, Inc. Diluted Adjusted Earnings per Pro Forma Common
Share" for further detail.



On a 13-week basis, global systemwide sales growth in the fourth quarter was
primarily attributable to Dunkin' Donuts U.S. comparable store sales growth
(which includes stores open 54 weeks or more) and global store development,
and growth in Baskin-Robbins International sales.

Dunkin' Donuts U.S. comparable store sales growth in the fourth quarter was
driven by increased average ticket and higher traffic resulting from our
continued focus on product and marketing innovation. This includes strong
total coffee sales growth, led by flavored hot and iced espresso beverages;
continued momentum across the core breakfast sandwich platform and strong
sales of November's limited time offer Smoked Sausage breakfast sandwich;
continued growth in Bakery Sandwiches; and sales of limited time offer Dunkin'
Donuts K-Cup® portion packs in Pumpkin, Peppermint Mocha, and Hot Cocoa
flavors.

Baskin-Robbins U.S. comparable store sales growth was driven by sales of
Flavors of the Month, including holiday-inspired flavors such as Pumpkin Pie,
Peppermint, and Winter White Chocolate; limited time offer sundaes such as
the Warm Belgian Waffle sundae with Pralines n' Cream ice cream; and Take Home
pints and quarts.

In the fourth quarter, Dunkin' Brands franchisees and licensees opened 256 net
new restaurants across the globe. This includes 149 net new Dunkin' Donuts
U.S. locations, 89 net new Baskin-Robbins International locations, 47 net new
Dunkin' Donuts International locations, and 29 net closures for Baskin-Robbins
U.S. Additionally, Dunkin' Donuts U.S. franchisees remodeled 205 restaurants
during the quarter.

Revenues for the fourth quarter declined 4.0 percent compared to the prior
year, primarily from the extra week in the fourth quarter of 2011 and a
one-time delay in revenue recognition related to the shift in manufacturing to
Dean Foods that impacted fourth quarter sales of ice cream products in 2012.
Without the effect of these two items, revenues would have increased by $7.0
million, or 4.4 percent, driven by increased royalty income from the increase
in systemwide sales (both on a 13-week basis).

Operating income for the fourth quarter increased $23.2 million, or 52.0
percent, from the prior year primarily as a result of an $18.8 million net
non-cash impairment charge incurred in the prior year related to the Company's
investment in its South Korean joint venture, as well as the increase in
royalty income on a 13-week basis, offset by the impact of the extra week in
the fourth quarter of 2011. Adjusted operating income increased $6.8 million,
or 9.3 percent, from the fourth quarter of 2011 primarily as a result of the
increase in royalty income on a 13-week basis and an increase in income from
joint ventures, offset by the impact of the extra week in the fourth quarter
of 2011.

Net income for the fourth quarter increased by $22.7 million, or 196.2
percent, compared to the prior year as a result of the $23.2 million increase
in operating income, offset by an increase in interest expense. Adjusted net
income increased by $0.5 million, or 1.3 percent, compared to the fourth
quarter of 2011 as a result of the increase in adjusted operating income,
offset by increases in interest expense and income tax expense.

Adjusted earnings per pro forma common share increased by 13.3 percent on a
diluted basis to $0.34 for the fourth quarter of 2012, as a result of a
decline in shares outstanding due to the repurchase of 15 million shares in
August 2012 from the Company's former private equity owners, as well as the
increase in adjusted net income.

FOURTH QUARTER 2012 SEGMENT RESULTS

The information below reflects operating segment results for the 13-weeks
ended December 29, 2012 and the 14-weeks ended December 31, 2011.

Amounts and percentages may not recalculate due to rounding
                             Three months ended            Increase (Decrease)
Dunkin' Donuts U.S.          December29,    December31,  $         %
                             2012            2011
($ in thousands except as    (13 weeks)      (14 weeks)
otherwise noted)
Comparable store sales       3.2%            7.4%
growth
Systemwide sales growth      (0.9)%          17.4%
Franchisee reported sales    $1,637.6        1,655.6       (17.9)    (1.1)%
(in millions)
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       6,216           3,669         2,547     69.4%
restaurants
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%

Dunkin' Donuts U.S. revenues of $128.1 million represented an increase of 3.4
percent year-over-year. The increase in revenue was driven primarily by
increased royalty income on a 13-week basis, additional sales at company-owned
restaurants (35 stores versus 31 stores in the prior year), and an increase in
other revenues. These increases in revenue were offset by the impact of the
extra week in the fourth quarter of 2011.

Dunkin' Donuts U.S. segment profit increased to $94.3 million, an increase of
2.5 percent over the prior year. The increase was driven by revenue growth,
partially offset by costs related to additional company-owned stores.

Amounts and percentages may
not recalculate due to
rounding
                              Three months ended           Increase (Decrease)
Dunkin' Donuts International  December29,   December31,  $         %
                              2012           2011
($ in thousands except as     (13 weeks)     (14 weeks)
otherwise noted)
Comparable store sales growth 0.0%
Systemwide sales growth       9.3%           2.9%
Franchisee reported sales (in $174.4         159.6         14.8      9.3%
millions)
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)%

Dunkin' Donuts International systemwide sales increased 9.3 percent from the
prior year, driven by sales growth in South Korea and the Middle East. On a
constant currency basis, systemwide sales increased by approximately 6
percent.

Dunkin' Donuts International revenues increased 2.9 percent from the prior
year to $4.0 million, primarily resulting from an increase in royalty income
driven by an increase in systemwide sales.

Segment profit for Dunkin' Donuts International declined 19.5 percent to $2.2
million, driven primarily by continued investments in marketing for the
Dunkin' Donuts International business, offset by an increase in income from
our South Korean joint venture.

Amounts and percentages may
not recalculate due to
rounding
                               Three months ended          Increase (Decrease)
Baskin-Robbins U.S.            December29,  December31,  $         %
                               2012          2011
($ in thousands except as      (13 weeks)    (14 weeks)
otherwise noted)
Comparable store sales growth  1.5%          5.8%
Systemwide sales growth        (8.3)%        11.1%
Franchisee reported sales (in  $90.7         98.9          (8.2)     (8.3)%
millions)
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         —             76            (76)      n/m
restaurants
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)%

Baskin-Robbins U.S. revenue declined 10.8 percent from the prior year to $7.8
million driven primarily by declines in royalty and licensing income, which
were due to an 8.3 percent decrease in systemwide sales as a result of the
extra week in the fourth quarter of 2011 and net closings.

Segment profit for the Baskin-Robbins U.S. segment increased $1.0 million, or
35.1 percent, year-over-year primarily as a result of non-recurring prior year
investments, as well as reserves recorded on leased locations.

Amounts and percentages may not recalculate due to rounding
                               Three months ended          Increase(Decrease)
Baskin-Robbins International   December29,  December31,  $          %
                               2012          2011
($ in thousands except as      (13 weeks)    (14 weeks)
otherwise noted)
Comparable store sales growth  0.0%
Systemwide sales growth        0.2%          10.9%
Franchisee reported sales (in  $309.5        308.8         0.8        0.2%
millions)
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)%

Baskin-Robbins International systemwide sales increased 0.2 percent from the
prior year, as sales growth in South Korea was offset by sales declines in
Japan and Afghanistan. On a constant currency basis, systemwide sales
increased by approximately 1 percent.

Baskin-Robbins International revenues declined 35.9 percent year-over-year to
$18.0 million, due to a one-time delay in revenue recognition related to the
shift in manufacturing to Dean Foods that impacted fourth quarter sales of ice
cream products. Also contributing to the decline in revenues was a decline in
sales of ice cream resulting from the Afghanistan border being closed earlier
in 2012, as well as the extra week in the fourth quarter of 2011.

Segment profit decreased 33.7 percent year-over-year to $6.8 million,
resulting from a decrease in net margin on ice cream due to the one-time delay
in revenue recognition in the fourth quarter of 2012, the impact of the
Afghanistan border being closed earlier in 2012, and the extra week in the
fourth quarter of 2011.

COMPANY UPDATES

  oOn 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.
  oThe 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.
  oThe Company today announced that it intends to seek a re-financing of its
    senior secured credit facilities given the current favorable credit market
    conditions.

FISCAL YEAR 2013 TARGETS

As described below, the Company is providing certain targets regarding its
2013 expectations.

  oThe 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.
  oThe 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.
  oInternationally, 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.
  oThe Company expects revenue growth of between 6 and 8 percent and adjusted
    operating income growth of between 10 and 12 percent.
  oThe 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).

"Our nearly 100-percent, asset-light franchised business model enables us to
accelerate our strong restaurant growth rate, while simultaneously returning
cash to shareholders," said Paul Carbone, Chief Financial Officer. "The
Board's decision to increase our dividend 27 percent in just our second year
as a public company further underscores our commitment to delivering
shareholder value."

Conference Call

As previously announced, Dunkin' Brands will be holding a conference call
today at 8:00 am ET hosted by Nigel Travis, Chief Executive Officer, and Paul
Carbone, Chief Financial Officer. The dial-in number is (866) 393-1607 or
(914) 495-8556, conference number 87704796. Dunkin' Brands will broadcast the
conference call live over the Internet at http://investor.dunkinbrands.com. A
replay of the conference call will be available on the Company's website at
http://investor.dunkinbrands.com. 

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

Forward-Looking Statements

Certain statements contained herein are not based on historical fact and are
"forward-looking statements" within the meaning of the applicable securities
laws and regulations. Generally, these statements can be identified by the
use of words such as "anticipate," "believe," "could," "estimate," "expect,"
"feel," "forecast," "intend," "may," "plan," "potential," "project," "should,"
"would," and similar expressions intended to identify forward-looking
statements, although not all forward-looking statements contain these
identifying words. By their nature, forward-looking statements involve risks
and uncertainties because they relate to events and depend on circumstances
that may or may not occur in the future. These risk and uncertainties
include, but are not limited to: the ongoing level of profitability of
franchisees and licensees; our franchisees' and licensees' ability to sustain
same store sales growth; changes in working relationships with our
franchisees and licensees and the actions of our franchisees and licensees;
our master franchisees' relationships with sub-franchisees; the strength of
our brand in the markets in which we compete; changes in competition within
the quick-service restaurant segment of the food industry; changes in consumer
behavior resulting from changes in technologies or alternative methods of
delivery; economic and political conditions in the countries where we operate;
our substantial indebtedness; our ability to protect our intellectual property
rights; consumer preferences, spending patterns and demographic trends; the
success of our growth strategy and international development; changes in
commodity and food prices, particularly coffee, dairy products and sugar, and
other operating costs; shortages of coffee; failure of our network and
information technology systems; interruptions or shortages in the supply of
products to our franchisees and licensees; the impact of food borne-illness or
food safety issues or adverse public or media opinions regarding the health
effects of consuming our products; our ability to collect royalty payments
from our franchisees and licensees; the ability of our franchisees and
licensees to open new restaurants and keep existing restaurants in operation;
our ability to retain key personnel; any inability to protect consumer credit
card data and catastrophic events.

Forward-looking statements reflect management's analysis as of the date of
this press release. Important factors that could cause actual results to
differ materially from our expectations are more fully described in our other
filings with the Securities and Exchange Commission, including under the
section headed "Risk Factors" in our most recent annual report on Form 10-K
and in our quarterly report on Form 10-Q for the quarter ended June 30, 2012.
Except as required by applicable law, we do not undertake to publicly update
or revise any of these forward-looking statements, whether as a result of new
information, future events or otherwise.

Non-GAAP Measures and Statistical Data

In addition to the GAAP financial measures set forth in this press release,
the Company has included certain non-GAAP measurements, adjusted operating
income, adjusted operating income margin, adjusted net income, and diluted
adjusted earnings per pro forma common share, which present operating results
on a basis adjusted for certain items and/or reflecting the conversion of our
previously outstanding Class L common stock into shares of common stock. The
Company uses these non-GAAP measures as key performance measures for the
purpose of evaluating performance internally. We also believe these non-GAAP
measures provide our investors with useful information regarding our
historical operating results. These non-GAAP measures are not intended to
replace the presentation of our financial results in accordance with GAAP. Use
of the terms adjusted operating income, adjusted operating income margin,
adjusted net income, and diluted adjusted earnings per pro forma common share
may differ from similar measures reported by other companies. Adjusted
operating income and adjusted net income are reconciled from the respective
measures determined under GAAP in the attached table "Dunkin' Brands Group,
Inc. Non-GAAP Reconciliation."

On August1, 2011, the Company completed its initial public offering.
Immediately prior to the offering, each share of the Company's Class L common
stock converted into 2.4338 shares of common stock. The number of common
shares used in the calculation of diluted adjusted earnings per pro forma
common share for the fiscal year ended December 31, 2011 gives effect to the
conversion of all outstanding shares of Class L common stock at the conversion
factor of 2.4338 common shares for each Class L share, as if the conversion
was completed at the beginning of the fiscal period. The calculation of
diluted adjusted earnings per pro forma common share also includes the
dilutive effect of common restricted shares and stock options, using the
treasury stock method. Diluted adjusted earnings per pro forma common share is
calculated using adjusted net income, as defined above. See the attached table
"Dunkin' Brands Group, Inc. Diluted Adjusted Earnings per Pro Forma Common
Share" for further detail.

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

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

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

Fiscal year 2011 and the fourth quarter of 2011 include 53 weeks and 14 weeks,
respectively. Certain financial measures and other metrics in this release
have been presented on a 52-week and 13-week basis for fiscal year 2011 and
the fourth quarter of 2011, respectively, to provide improved comparability to
the respective 2012 periods. Such financial measures and metrics reflect our
estimate of the impact of the additional week on systemwide sales growth,
revenues, and expenses.

About Dunkin' Brands Group, Inc.

With more than 17,400 points of distribution in nearly 60 countries worldwide,
Dunkin' Brands Group, Inc. (Nasdaq: DNKN) is one of the world's leading
franchisors of quick service restaurants (QSR) serving hot and cold coffee and
baked goods, as well as hard-serve ice cream. At the end of fiscal year 2012,
Dunkin' Brands' nearly 100 percent franchised business model included more
than 10,400 Dunkin' Donuts restaurants and nearly 7,000 Baskin-Robbins
restaurants. For the full-year 2012, the company had franchisee-reported sales
of approximately $8.8 billion. Dunkin' Brands Group, Inc. is headquartered in
Canton, Mass.



DUNKIN' BRANDS GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
                   Three months ended               Fiscal year ended
                   December29,      December31,   December29,  December31,
                   2012              2011           2012          2011
                   (13 weeks)        (14 weeks)     (52 weeks)    (53 weeks)
Revenues:
Franchise fees and $109,121          109,814        418,940       398,474
royalty income
Rental income      22,957            22,195         96,816        92,145
Sales of ice cream 16,376            26,536         94,659        100,068
products
Sales at
company-owned      6,216             3,745          22,922        12,154
restaurants
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       13,275            13,600         52,072        51,878
restaurants
Cost of ice cream  13,019            19,534         69,019        72,329
products
Company-owned
restaurant         6,166             3,954          23,133        12,854
expenses
General and
administrative     53,024            57,263         239,574       227,771
expenses, net
Depreciation       6,551             6,147          29,084        24,497
Amortization of
other intangible   6,626             6,919          26,943        28,025
assets
Impairment charges 328               840            1,278         2,060
Total operating    98,989            108,257        441,103       419,414
costs and expenses
Net income (loss)
of equity method
investments:
Net income,
excluding          5,037             4,071          22,351        16,277
impairment
Impairment charge, —                 (19,752)       —             (19,752)
net of tax^(a)
Total net income
(loss) of equity
method             5,037             (15,681)       22,351        (3,475)

investments
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 —                 —              (3,963)       (34,222)
refinancing
transactions
Other gains, net   495               186            23            175
Total other        (21,070)          (17,761)       (77,428)      (138,496)
expense
Income before      46,681            26,806         162,001       66,813
income taxes
Provision for      12,491            15,215         54,377        32,371
income taxes
Net income
including          34,190            11,591         107,624       34,442
noncontrolling
interests
Net loss
attributable to    (145)             —              (684)         —
noncontrolling
interests
Net income
attributable to    $34,335           11,591         108,308       34,442
Dunkin' Brands
Earnings (loss)
per share:
Class L - basic    $n/a              n/a            n/a           6.14
and diluted
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            (5,978)       (20,087)
debt-related costs
Proceeds from initial public offering, net of      —             389,961
offering costs
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          32            (207)
equivalents
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
                       December29,   December31,  December29,  December31,
                       2012           2011          2012          2011
Total revenues         $161,703       168,505       658,181       628,198
Impact of change in
ice cream shipping     5,802          —             5,802         —
terms^(a)
Total revenues,
excluding change in    $167,505       168,505       663,983       628,198
ice cream shipping
terms
Operating income       $67,751        44,567        239,429       205,309
Operating income       41.9%          26.4%         36.4%         32.7%
margin
Adjustments:
Amortization of other  6,626          6,919         26,943        28,025
intangible assets
Impairment charges     328            840           1,278         2,060
Sponsor termination    —              —             —             14,671
fee
Secondary offering     9              1,899         4,783         1,899
costs
Peterborough plant     5,095          —             14,044        —
closure^(b)
Korea joint venture    —              18,776        —             18,776
impairment, net
Bertico litigation^(c) —              —             20,680        —
Adjusted operating     $79,809        73,001        307,157       270,740
income
Adjusted operating     47.6%          43.3%         46.3%         43.1%
income margin^(d)
Net income
attributable to        $34,335        11,591        108,308       34,442
Dunkin' Brands
Adjustments:
Amortization of other  6,626          6,919         26,943        28,025
intangible assets
Impairment charges     328            840           1,278         2,060
Sponsor termination    —              —             —             14,671
fee
Secondary offering     9              1,899         4,783         1,899
costs
Loss on debt
extinguishment and
                       —              —             3,963         34,222
refinancing
transactions
Peterborough plant     5,095          —             14,044        —
closure^(b)
Korea joint venture    —              18,776        —             18,776
impairment, net
Bertico litigation^(c) —              —             20,680        —
Tax impact of
adjustments, excluding (4,823)        (3,863)       (20,404)      (32,351)

Bertico litigation^(e)
Tax impact of Bertico  979            —             (3,980)       —
adjustment^(f)
Income tax audit       (10,514)       —             (10,514)      —
settlements^(g)
State tax              4,599          —             4,599         —
apportionment^(h)
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
             December29,  December31,  %       December29,  December31,  %
             2012          2011          Change  2012          2011          Change
Total        $161,703      168,505       (4.0)%  658,181       628,198       4.8%
revenues
Impact of
extra        —             (8,005)               —             (8,005)
week^(a)
Total
revenues,
13-week /    $161,703      160,500       0.7%    658,181       620,193       6.1%
52-week
basis
Impact of
change in
ice
             5,802         —                     5,802         —
cream
shipping
terms^(b)
Total
revenues,
excluding
impact of
change in    $167,505      160,500       4.4%    663,983       620,193       7.1%
shipping
terms,
13-week /
52-week
basis
Operating    $67,751       44,567        52.0%   239,429       205,309       16.6%
income
Impact of
extra        —             (4,286)               —             (4,286)
week^(a)
Operating
income,
13-week /    $67,751       40,281        68.2%   239,429       201,023       19.1%
52-week
basis
Adjusted
operating    $79,809       73,001        9.3%    307,157       270,740       13.5%
income
Impact of
extra        —             (4,286)               —             (4,286)
week^(a)
Adjusted
operating
income,      $79,809       68,715        16.1%   307,157       266,454       15.3%
13-week /
52-week
basis
Net income
attributable $34,335       11,591        196.2%  108,308       34,442        214.5%
to Dunkin'
Brands
Impact of
extra        —             (1,810)               —             (1,810)
week^(a)
Net income,
13-week /    $34,335       9,781         251.0%  108,308       32,632        231.9%
52-week
basis
Adjusted net $36,634       36,162        1.3%    149,700       101,744       47.1%
income
Impact of
extra        —             (1,810)               —             (1,810)
week^(a)
Adjusted net
income,
13-week /    $36,634       34,352        6.6%    149,700       99,934        49.8%
52-week
basis
(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
                      December29,    December31,  December29,  December31,
                      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   (1)             (140)         (179)         (494)
participating
securities
Adjusted net income
available to common   $36,633         36,022        149,521       101,250
shareholders
Pro forma weighted
average number of
common shares –
diluted:
Weighted average
number of Class L
shares over period
in                   —               —             —             22,845,378

which Class L shares
were outstanding^(a)
Adjustment to weight
Class L shares over   —               —             —             (9,790,933)
respective fiscal
period^(a)
Weighted average
number of Class L     —               —             —             13,054,445
shares
Class L conversion    —               —             —             2,4338
factor
Weighted average
number of converted   —               —             —             31,772,244
Class L shares
Weighted average
number of common      105,837,976     119,486,311   114,584,063   74,835,697
shares
Pro forma weighted
average number of     105,837,976     119,486,311   114,584,063   106,607,941
common shares – basic
Incremental dilutive  2,078,696       1,551,701     1,989,281     1,064,587
common shares^(b)
Pro forma weighted
average number of     107,916,672     121,038,012   116,573,344   107,672,528
common shares –
diluted
Diluted adjusted
earnings per pro      $0.34           0.30          1.28          0.94
forma common share
Impact of extra       —               (0.02)        —             (0.01)
week^(c)
Diluted adjusted
earnings per pro
forma common share,   $0.34           0.28          1.28          0.93

13-week / 52-week
basis
(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.



SOURCE Dunkin' Brands Group, Inc.

Website: http://investor.dunkinbrands.com
Contact: Stacey Caravella (Investors), Director, Investor Relations, Dunkin'
Brands, Inc., investor.relations@dunkinbrands.com, +1-781-737-3200, or Karen
Raskopf (Media), SVP, Corporate Communications, Dunkin' Brands, Inc.,
karen.raskopf@dunkinbrands.com, +1-781-737-5200
 
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