Krispy Kreme Reports Financial Results For The Fourth Quarter And Fiscal Year Ended February 3, 2013
Krispy Kreme Reports Financial Results For The Fourth Quarter And Fiscal Year
Ended February 3, 2013
Raises Fiscal 2014 Guidance
PR Newswire
WINSTON-SALEM, N.C., March 14, 2013
WINSTON-SALEM, N.C., March 14, 2013 /PRNewswire/ -- Krispy Kreme Doughnuts,
Inc. (NYSE: KKD) (the "Company") today reported financial results for the
fourth quarter and fiscal year ended February 3, 2013, and raised its guidance
for fiscal 2014.
Fiscal Year
The fourth quarter and fiscal year ended February 3, 2013 included 14 and 53
weeks, respectively, compared to 13 and 52 weeks, respectively, for the fourth
quarter and fiscal year ended January 29, 2012. Accordingly, financial
results for the fiscal 2013 periods are not directly comparable to those of
the corresponding fiscal 2012 periods. The Company's fiscal year ends on the
Sunday closest to January 31, which periodically results in a 53-week year.
Fourth Quarter Fiscal 2013 Highlights Compared to the Year-Ago Period (Tables
1 and 2):
o Revenues increased 15.9% to $118.1 million from $102.0 million
o Operating income rose 60% to $8.5 million from $5.3 million
o Adjusted net income increased 85% to $7.4 million ($0.11 per share) from
$4.0 million ($0.06 per share); adjusted net income and adjusted EPS
reflect income tax expense only to the extent currently payable in cash;
adjusted net income and adjusted EPS are non-GAAP measures (see the
reconciliation of all adjusted earnings measures to the related GAAP
amounts in Table 6 accompanying this release)
o Net income was $4.8 million ($0.07 per share) compared to $143.5 million
($2.01 per share) in the fourth quarter last year; net income for the
fourth quarter of last year included an unusual credit of $139.6 million
($1.95 per share) from the reversal of valuation allowances on deferred
income tax assets
o Cash provided by operating activities was $21.3 million compared to $10.9
million in the fourth quarter last year
To facilitate comparisons, the following highlights compare the 13 weeks ended
January 27, 2013 to the 13 weeks ended January 29, 2012:
o Revenues increased 7.0% to $109.1 million from $102.0 million
o Company same store sales rose 7.5%, the seventeenth consecutive quarterly
increase
o Operating income increased 35% to $7.2 million from $5.3 million
o Adjusted net income rose 53% to $6.1 million ($0.09 per share) from $4.0
million ($0.06 per share)
Fiscal 2013 Highlights Compared to Fiscal 2012 (Tables 1 and 3):
o Revenues increased 8.1% to $435.8 million from $403.2 million
o Operating income rose 48% to $37.7 million from $25.6 million
o Adjusted net income increased 54% to $34.2 million ($0.49 per share) from
$22.2 million ($0.31 per share); adjusted net income and adjusted EPS
reflect income tax expense only to the extent currently payable in cash
and, in fiscal 2012, exclude the gain on the Company's sale of its 30%
equity interest in KK Mexico
o Net income was $20.8 million ($0.30 per share) compared to $166.3 million
($2.33 per share) last year; net income in fiscal 2012 included an unusual
credit of $139.6 million ($1.95 per share) from the reversal of valuation
allowances on deferred income tax assets and a $4.7 million after tax gain
($0.06 per share) on the Company's sale of its 30% equity interest in KK
Mexico
o Cash provided by operating activities was $59.3 million compared to $33.9
million in fiscal 2012
To facilitate comparisons, the following highlights compare the 52 weeks ended
January 27, 2013 to the 52 weeks ended January 29, 2012:
o Revenues increased 5.9% to $426.8 million from $403.2 million
o Company same store sales rose 5.5%
o Operating income increased 43% to $36.4 million from $25.6 million
o Adjusted net income rose 49% to $32.9 million ($0.47 per share) from $22.2
million ($0.31 per share)
James H. Morgan, Chairman and Chief Executive Officer, commented: "In the
fourth quarter, Krispy Kreme not only achieved earnings at the top end of our
November guidance, but also posted its best fourth quarter results since
fiscal 2004. The year as a whole also was our best since fiscal 2004, and
demonstrated again the strength of our business model and affirmed our
confidence in achieving our goal of sustainable and profitable growth for
years to come. Going forward, the Krispy Kreme investment thesis will no
longer be predicated solely on the progress we have made in building a strong
foundation for our business, but also on our ability to execute our long-term
growth plans. Based upon the strength of these results and the momentum we
have carried into the new year, we are pleased to increase our fiscal 2014
earnings guidance.
"Krispy Kreme is truly blessed with four attributes most companies spend a
lifetime trying to achieve: a brand that is beloved worldwide, best-in-class
products, compelling strategies, and incredibly capable and energized
franchisees and team members. We are committed to doing everything in our
power to continue improving our profitability while expanding our system to
1,300 stores by fiscal 2017 through Company and domestic and international
franchise development. We are gratified by our accomplishments and are
optimistic that we can build on them to achieve our long-term aspirations, and
those of our shareholders."
Results For the 13 Weeks Ended January 27, 2013 (Tables 2 and 8)
To facilitate comparisons, the following discussion compares the 13 weeks
ended January 27, 2013 with the 13 weeks ended January 29, 2012.
Consolidated Results
For the 13 weeks ended January 27, 2013, revenues increased 7.0% to $109.1
million. All four business segments reported year-over-year revenue growth.
Direct operating expenses increased to $91.0 million from $87.9 million, but
as a percentage of total revenues, decreased to 83.4% from 86.2%. General and
administrative expenses increased to $8.4 million from $6.7 million in the
same period last year. General and administrative expenses in the fourth
quarter of last year included a non-recurring credit of approximately
$840,000. Excluding that item, general and administrative expenses were 7.7%
of revenues compared to 7.4% last year.
Operating income rose 35% to $7.2 million from $5.3 million.
Adjusted net income was $6.1 million ($0.09 per share) compared to $4.0
million ($0.06 per share), in the fourth quarter last year. Adjusted net
income and EPS are non-GAAP measures (see the reconciliation of GAAP to
adjusted earnings in Table 6 accompanying this release).
Segment Results
For the 13 weeks ended January 27, 2013, Company Stores revenues increased
9.6% to $75.2 million. Same store sales at Company stores rose 7.5%, the
seventeenth consecutive quarterly increase, driven by higher traffic. The
Company Stores segment posted operating income of $3.0 million compared to an
operating loss of $0.3 million last year.
Domestic Franchise revenues increased 4.2% to $2.5 million. Higher royalties
from an 8.3% increase in sales by domestic franchisees were partially offset
by a reduction in other franchise revenue. Same store sales rose 9.6% at
domestic franchise stores. During the quarter, we added new personnel and
took additional steps to begin execution of our domestic franchise expansion
programs. Domestic Franchise segment operating income was $1.3 million in the
fourth quarter of both years.
International Franchise revenues increased 6.3% to $6.7 million. Adjusted to
eliminate the effects of changes in foreign exchange rates, same store sales
at international franchise stores fell 7.4%, reflecting, among other things,
honeymoon effects from the substantial number of international store openings
in recent years, as well as cannibalization as markets develop. International
Franchise costs and expenses in the quarter included an increase of almost
$200,000 compared to the prior year quarter in trademark protection costs, a
provision of approximately $185,000 for potential uncollectible accounts and
higher personnel and personnel-related costs to support continued and
anticipated international growth. The International Franchise segment
generated operating income of $4.0 million compared to $4.2 million in the
fourth quarter last year.
Total KK Supply Chain revenues (including sales to Company stores) increased
1.8% to $52.9 million. KK Supply Chain generated operating income of $7.5
million compared to $7.1 million in the fourth quarter last year.
Fiscal 2014 Outlook
In fiscal 2014, management estimates that the Company and its domestic
franchisees will each open approximately 10 Krispy Kreme shops, and that
international franchisees will open approximately 75 locations. Although the
Company looks for continued organic same store sales growth in its domestic
stores, international franchise same store sales will likely remain pressured
by the substantial growth in international markets in recent years.
Based on these factors, management currently expects fiscal 2014 operating
income in the range of $41 million to $44 million, which would represent an
increase of 13% to 21% from the $36.4 million operating income for fiscal 2013
measured on a 52-week basis. Management estimates adjusted net income will be
in the range of $37 million to $40 million and adjusted EPS will range from
$0.53 to $0.57 per share based on a forecasted 70 million diluted shares
outstanding.
Adjusted net income and adjusted EPS are non-GAAP measures; see the
reconciliation of GAAP to adjusted earnings in Table 6 accompanying this
release.
Conference Call
The Company will host a conference call to review fiscal 2013 fourth quarter
and annual results, as well as management's outlook for fiscal 2014, this
afternoon at 4:30 p.m. (ET). A live webcast of the conference call will be
available at www.krispykreme.com. The conference call also can be accessed
over the phone by dialing (800) 901-5217 or, for international callers, by
dialing (617) 786-2964. An archived replay of the call will be available
shortly after its conclusion by dialing (888) 286-8010, or (617) 801-6888 for
international callers; the passcode is 17091755. The audio replay will be
available through March 21, 2013. A transcript of the conference call also
will be available on the Company's website.
About Krispy Kreme
Krispy Kreme is a leading branded specialty retailer and wholesaler of premium
quality sweet treats and complementary products, including its signature
Original Glazed^® doughnut. Headquartered in Winston-Salem, N.C., the Company
has offered the highest quality doughnuts and great tasting coffee since it
was founded in 1937. Today, Krispy Kreme shops can be found in over 740
locations in 22 countries around the world. Connect with Krispy Kreme at
KrispyKreme.com and on Facebook, Foursquare, Twitter and YouTube.
Defined Terms
"Honeymoon effect" means the common pattern for many start-up restaurants in
which a flurry of activity due to start-up publicity and natural curiosity is
followed by a decline during which a steady repeat customer base develops.
"Cannibalization" means the tendency for new stores to become successful, in
part or in whole, by "shifting" sales from existing stores in the same
market.
Information contained in this press release, other than historical
information, should be considered forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on management's beliefs, assumptions and
expectations of our future economic performance, considering the information
currently available to management. These statements are not statements of
historical fact. Forward-looking statements involve risks and uncertainties
that may cause our actual results, performance or financial condition to
differ materially from the expectations of future results, performance or
financial condition we express or imply in any forward-looking statements.
The words "believe," "may," "could," "will," "should," "would," "anticipate,"
"estimate," "expect," "intend," "objective," "seek," "strive" or similar
words, or the negative of these words, identify forward-looking statements.
Factors that could contribute to these differences include, but are not
limited to: the quality of Company and franchise store operations; our
ability, and our dependence on the ability of our franchisees, to execute on
our and their business plans; our relationships with our franchisees; our
ability to implement our international growth strategy; our ability to
implement our domestic small shop operating model; political, economic,
currency and other risks associated with our international operations; the
price and availability of raw materials needed to produce doughnut mixes and
other ingredients, and the price of motor fuel; our relationships with
wholesale customers; our ability to protect our trademarks and trade secrets;
changes in customer preferences and perceptions; risks associated with
competition; risks related to the food service industry, including food safety
and protection of personal information; compliance with government regulations
relating to food products and franchising; and increased costs or other
effects of new government regulations relating to healthcare benefits. These
and other risks and uncertainties, which are described in more detail in the
Company's most recent Annual Report on Form 10-K and other reports and
statements filed with the United States Securities and Exchange Commission,
are difficult to predict, involve uncertainties that may materially affect
actual results and may be beyond the Company's control, and could cause actual
results and developments to be materially different from those expressed or
implied by any of these forward-looking statements. New factors emerge from
time to time, and it is not possible for management to predict all such
factors or to assess the impact of each such factor on the Company. Any
forward-looking statement speaks only as of the date on which such statement
is made, and the Company does not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which such statement is made.
TABLE 1
KRISPY KREME DOUGHNUTS, INC
CONSOLIDATED STATEMENT OF INCOME
14 Weeks 13 Weeks 53 Weeks 52 Weeks
Ended Ended Ended Ended
February 3, January 29, February 3, January 29,
2013 2012 2013 2012
(In thousands, except per share amounts)
Revenues $ 118,145 $ 101,957 $ 435,843 $ 403,217
Operating expenses:
Direct operating expenses
(exclusive of depreciation
and
amortization expense 98,260 87,880 362,828 346,434
shown below)
General and administrative 8,778 6,673 25,089 22,188
expenses
Depreciation and 2,653 2,002 9,891 8,235
amortization expense
Impairment charges and 4 113 306 793
lease termination costs
Operating income 8,450 5,289 37,729 25,567
Interest income 12 35 114 166
Interest expense (440) (390) (1,642) (1,666)
Equity in losses of equity (52) (53) (202) (122)
method franchisees
Gain on sale of interest in - - - 6,198
equity method franchisee
Other non-operating income 80 (46) 317 215
and (expense), net
Income before income taxes 8,050 4,835 36,316 30,358
Provision for income taxes 3,270 (138,707) 15,537 (135,911)
Net income $ 4,780 $ 143,542 $ 20,779 $ 166,269
Earnings per common share:
Basic $ 0.07 $ 2.06 $ 0.31 $ 2.40
Diluted $ 0.07 $ 2.01 $ 0.30 $ 2.33
Weighted average shares
outstanding:
Basic 66,864 69,542 67,624 69,145
Diluted 69,520 71,567 69,896 71,497
TABLE 2
KRISPY KREME DOUGHNUTS, INC
CONSOLIDATED STATEMENT OF ADJUSTED INCOME - 13 WEEK BASIS
14 Weeks Less - Week 13 Weeks 13 Weeks
Ended Ended Ended
Ended
February 3, February 3, January 27, January 29,
2013 2013 2013 2012
(In thousands, except per share amounts)
Revenues $ 118,145 $ (9,023) $ 109,122 $ 101,957
Operating expenses:
Direct operating
expenses (exclusive of
depreciation and
amortization
expense shown 98,260 (7,213) 91,047 87,880
below)
General and
administrative 8,778 (331) 8,447 6,673
expenses
Depreciation and 2,653 (189) 2,464 2,002
amortization expense
Impairment charges and
lease termination 4 - 4 113
costs
Operating income 8,450 (1,290) 7,160 5,289
Interest income 12 - 12 35
Interest expense (440) 12 (428) (390)
Equity in losses of equity (52) - (52) (53)
method franchisees
Other non-operating income 80 - 80 (46)
and (expense), net
Income before income 8,050 (1,278) 6,772 4,835
taxes
Provision for current 681 (5) 676 855
income taxes
Adjusted net income $ 7,369 (1,273) $ 6,096 $ 3,980
$
Adjusted earnings per
common share:
Basic $ 0.11 $ 0.09 $ 0.06
Diluted $ 0.11 $ 0.09 $ 0.06
Weighted average shares
outstanding:
Basic 66,864 66,864 69,542
Diluted 69,520 69,520 71,567
Note: The fourth quarter of fiscal 2013 contained 14 weeks compared to 13
weeks in the fourth quarter of fiscal 2012. The foregoing table presents
fourth quarter fiscal 2013 results exclusive of results for the 14th week in
order to facilitate comparison of fourth quarter fiscal 2013 results with
results for the fourth quarter of fiscal 2012.
Adjusted net income and adjusted EPS are non-GAAP measures. See the
reconciliation of GAAP to adjusted earnings in Table 6.
TABLE 3
KRISPY KREME DOUGHNUTS, INC
CONSOLIDATED STATEMENT OF ADJUSTED INCOME - 52 WEEK BASIS
53 Weeks Less - Week 52 Weeks 52 Weeks
Ended Ended Ended
Ended
February 3, February 3, January 27, January 29,
2013 2013 2013 2012
(In thousands, except per share amounts)
Revenues $ 435,843 $ (9,023) $ 426,820 $ 403,217
Operating expenses:
Direct operating
expenses (exclusive of
depreciation and
amortization
expense shown 362,828 (7,213) 355,615 346,434
below)
General and
administrative 25,089 (331) 24,758 22,188
expenses
Depreciation and 9,891 (189) 9,702 8,235
amortization expense
Impairment charges and
lease termination 306 - 306 793
costs
Operating income 37,729 (1,290) 36,439 25,567
Interest income 114 - 114 166
Interest expense (1,642) 12 (1,630) (1,666)
Equity in losses of
equity method (202) - (202) (122)
franchisees
Other non-operating
income and (expense), 317 - 317 215
net
Income before income 36,316 (1,278) 35,038 24,160
taxes
Provision for current 2,124 (5) 2,119 2,000
income taxes
Adjusted net income $ 34,192 $ (1,273) $ 32,919 $ 22,160
Adjusted earnings per
common share:
Basic $ 0.51 $ 0.49 $ 0.32
Diluted $ 0.49 $ 0.47 $ 0.31
Weighted average shares
outstanding:
Basic 67,624 67,624 69,145
Diluted 69,896 69,896 71,497
Note: Fiscal 2013 contained 53 weeks compared to 52 weeks in fiscal 2012.
The foregoing table presents fiscal 2013 results exclusive of results for the
53rd week in order to facilitate comparison of fiscal 2013 results with
results for fiscal 2012.
Adjusted net income and adjusted EPS are non-GAAP measures. See the
reconciliation of GAAP to adjusted earnings in Table 6.
TABLE 4
KRISPY KREME DOUGHNUTS, INC.
CONSOLIDATED BALANCE SHEET
February 3, January 29,
2013 2012
(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 66,332 $ 44,319
Receivables 22,037 21,616
Receivables from equity method 705 655
franchisees
Inventories 15,948 16,497
Deferred income taxes 23,323 10,540
Other current assets 6,439 3,613
Total current assets 134,784 97,240
Property and equipment 78,024 75,466
Investments in equity method franchisees - -
Goodwill and other intangible assets 24,195 23,776
Deferred income taxes 93,088 129,053
Other assets 11,847 9,413
Total assets $ 341,938 $ 334,948
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 2,148 $ 2,224
Accounts payable 12,198 10,494
Accrued liabilities 32,330 28,800
Total current liabilities 46,676 41,518
Long-term debt, less current maturities 23,595 25,369
Other long-term obligations 25,235 18,935
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Preferred stock, no par value - -
Common stock, no par value 354,068 377,539
Accumulated other comprehensive loss (338) (336)
Accumulated deficit (107,298) (128,077)
Total shareholders' equity 246,432 249,126
Total liabilities and shareholders' equity $ 341,938 $ 334,948
TABLE 5
KRISPY KREME DOUGHNUTS, INC
CONSOLIDATED STATEMENT OF CASH FLOWS
53 Weeks Ended 52 Weeks Ended
February 3, January 29,
2013 2012
(In thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 20,779 $ 166,269
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization expense 9,891 8,235
Deferred income taxes 13,413 (139,403)
Impairment charges - 60
Accrued rent expense 585 465
Loss on disposal of property and equipment 543 414
Gain on sale of interest in equity method - (6,198)
franchisee
Share-based compensation 6,801 6,699
Provision for doubtful accounts 194 (374)
Amortization of deferred financing costs 398 422
Equity in losses of equity method 202 122
franchisees
Other (219) 676
Change in assets and liabilities:
Receivables (509) (862)
Inventories 560 (1,862)
Other current and non-current assets (1,012) 462
Accounts payable and accrued liabilities 4,740 (168)
Other long-term obligations 2,944 (1,096)
Net cash provided by operating 59,310 33,861
activities
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment (14,218) (11,884)
Proceeds from disposals of property and 178 44
equipment
Acquisition of stores from franchisee (915) -
Proceeds from sale of interest in equity method - 7,723
franchisee
Escrow deposit recovery - 1,800
Other investing activities 517 (207)
Net cash used for investing activities (14,438) (2,524)
CASH FLOW FROM FINANCING ACTIVITIES:
Repayment of long-term debt (2,346) (8,991)
Deferred financing costs (11) (29)
Proceeds from exercise of stock options 247 1,036
Proceeds from exercise of warrants 9 -
Repurchase of common shares (20,758) (1,004)
Net cash used for financing activities (22,859) (8,988)
Net increase in cash and cash equivalents 22,013 22,349
Cash and cash equivalents at beginning of year 44,319 21,970
Cash and cash equivalents at end of year $ 66,332 $ 44,319
Supplemental schedule of non-cash investing and
financing activities:
Assets acquired under capital leases $ 516 $ 1,197
TABLE 6
KRISPY KREME DOUGHNUTS, INC.
NON-GAAP FINANCIAL INFORMATION
The Company has net deferred income tax assets of approximately $116 million,
of which approximately $76 million relates to federal and state net operating
loss carryovers. The Company's federal net operating loss carryovers total
approximately $206 million.
In the quarter ended January 29, 2012, the Company reversed approximately
$139.6 million of valuation allowances against its deferred income tax assets
because management concluded that realization of such assets was more likely
than not. While such reversal, which was required by GAAP, increased the
Company's earnings by $139.6 million in fiscal 2012, the reversal has the
effect of reducing the Company's earnings beginning in fiscal 2013 as a result
of an increase in the provision for income taxes. This negative effect on
earnings beginning in fiscal 2013 occurs because the reversal of the valuation
allowance resulted in the recognition in fiscal 2012 of income tax benefits
expected to be realized in later years; absent the reversal of the valuation
allowance, any such tax benefits would have been recognized when realized in
future periods upon the generation of taxable income. Accordingly, beginning
in fiscal 2013, the Company's effective income tax rate, which in fiscal 2012
and earlier years bore little or no relationship to pretax income, more
closely reflects the blended federal and state income tax rates in
jurisdictions in which the Company operates.
Because of the increase in the Company's effective income tax rate resulting
from the reversal of a valuation allowance, the Company's income tax expense
in fiscal 2013 is not comparable to income tax expense in fiscal 2012 and
earlier years. In addition, until such time as the Company's net operating
loss carryovers are exhausted or expire, GAAP income tax expense is expected
to substantially exceed the amount of cash income taxes payable by the
Company.
In the second quarter of fiscal 2012, the Company realized a pretax gain of
$6.2 million ($4.7 million after tax, or $.06 per share) on the sale of its
30% ownership interest in KK Mexico, an equity method investee. The Company
does not expect to realize similar gains in the future.
The Company's fiscal year ends on the Sunday closest to January 31, which
periodically results in a 14-week fourth quarter and a 53-week year. Fiscal
2013 contained 53 weeks, while fiscal 2012 contained 52 weeks.
The following non-GAAP financial information and related reconciliation to
GAAP measures are provided to assist the reader in understanding the effects
of the above transactions and events, which, except for the periodic
occurrence of the 53-week year, are expected to be non-recurring, on the
Company's results of operations, and to facilitate comparison of fiscal 2013
results with the Company's financial results for fiscal 2012. In addition,
the non-GAAP financial information is intended to illustrate the material
difference between the Company's income tax expense and income taxes currently
payable. These non-GAAP performance measures are consistent with other
measurements made by management in the operation of the business which do not
consider income taxes except to the extent to which those taxes currently are
payable, for example, capital allocation decisions and incentive compensation
measurements that are made on a pretax basis.
Management's Historical Periods
Earnings Guidance Three Months Ended Year Ended
Year Ending February January 29, February January 29,
February 2, 2014 3, 3,
From To 2013 2012 2013 2012
(In thousands, except per share amounts)
Net income, $ 22,000 $ 23,700 $ 4,780 $ 143,542 $ 20,779 $ 166,269
as reported
Provision
for deferred 15,000 16,300 2,589 (139,562) 13,413 (139,403)
income taxes
Gain on sale
of interest
in KK Mexico
(net of
income taxes - - - - - (4,706)
of $1,492)
Adjusted net $ 37,000 $ 40,000 7,369 3,980 34,192 22,160
income
Earnings for
the (1,273) - (1,273) -
14th/53rd
week
Adjusted net
income - $ 6,096 $ 3,980 $ 32,919 $ 22,160
13/52 week
basis
Adjusted
earnings per
common
share:
Basic $ 0.55 $ 0.60 $ 0.11 $ 0.06 $ 0.51 $ 0.32
Diluted $ 0.53 $ 0.57 $ 0.11 $ 0.06 $ 0.49 $ 0.31
Adjusted
earnings per
common share
-
13/52
week basis:
Basic $ 0.09 $ 0.06 $ 0.49 $ 0.32
Diluted $ 0.09 $ 0.06 $ 0.47 $ 0.31
Weighted
average
shares
outstanding:
Basic 67,000 67,000 66,864 69,542 67,624 69,145
Diluted 70,000 70,000 69,520 71,567 69,896 71,497
TABLE 7
KRISPY KREME DOUGHNUTS, INC
SEGMENT INFORMATION
14 Weeks 13 Weeks 53 Weeks 52 Weeks
Ended Ended Ended Ended
February 3, January 29, February 3, January 29,
2013 2012 2013 2012
(In thousands)
Revenues:
Company Stores:
On-premises sales $ 40,430 $ 32,852 $ 142,918 $ 126,003
Wholesale sales 40,892 35,732 153,576 145,654
Company Stores 81,322 68,584 296,494 271,657
revenues
Domestic Franchise 2,764 2,418 10,325 9,463
International Franchise 7,109 6,259 24,941 22,621
KK Supply Chain:
Total revenues 57,337 51,952 215,412 206,453
Less – intersegment (30,387) (27,256) (111,329) (106,977)
sales elimination
External KK Supply 26,950 24,696 104,083 99,476
Chain revenues
Total revenues $ 118,145 $ 101,957 $ 435,843 $ 403,217
Operating income (loss):
Company Stores $ 3,263 $ (267) $ 8,534 $ 284
Domestic Franchise 1,518 1,260 5,590 3,737
International Franchise 4,430 4,161 17,387 15,054
KK Supply Chain 8,269 7,086 32,450 30,160
Total segment operating 17,480 12,240 63,961 49,235
income
Unallocated general and (9,026) (6,838) (25,926) (22,875)
administrative expenses
Impairment charges and (4) (113) (306) (793)
lease termination costs
Consolidated operating $ 8,450 $ 5,289 $ 37,729 $ 25,567
income
Depreciation and
amortization expense:
Company Stores $ 2,221 $ 1,611 $ 8,142 $ 6,593
Domestic Franchise 14 54 164 219
International Franchise 1 2 10 6
KK Supply Chain 169 170 738 730
Corporate administration 248 165 837 687
Total depreciation and $ 2,653 $ 2,002 $ 9,891 $ 8,235
amortization expense
TABLE 8
KRISPY KREME DOUGHNUTS, INC
SEGMENT INFORMATION - 13 WEEK BASIS
14 Weeks Less - Week 13 Weeks 13 Weeks
Ended Ended Ended
Ended
February 3, February 3, January 27, January 29,
2013 2013 2013 2012
(In thousands)
Revenues:
Company Stores:
On-premises sales $ 40,430 $ (3,120) $ 37,310 $ 32,852
Wholesale sales 40,892 (3,047) 37,845 35,732
Company
Stores 81,322 (6,167) 75,155 68,584
revenues
Domestic Franchise 2,764 (244) 2,520 2,418
International Franchise 7,109 (457) 6,652 6,259
KK Supply Chain:
Total revenues 57,337 (4,438) 52,899 51,952
Less – intersegment (30,387) 2,283 (28,104) (27,256)
sales elimination
External KK
Supply Chain 26,950 (2,155) 24,795 24,696
revenues
Total $ 118,145 $ (9,023) $ 109,122 $ 101,957
revenues
Operating income (loss):
Company Stores $ 3,263 $ (280) $ 2,983 $ (267)
Domestic Franchise 1,518 (218) 1,300 1,260
International Franchise 4,430 (395) 4,035 4,161
KK Supply Chain 8,269 (747) 7,522 7,086
Total segment 17,480 (1,640) 15,840 12,240
operating income
Unallocated general and (9,026) 350 (8,676) (6,838)
administrative expenses
Impairment charges and (4) - (4) (113)
lease termination costs
Consolidated $ 8,450 $ (1,290) $ 7,160 $ 5,289
operating income
Depreciation and
amortization expense:
Company Stores $ 2,221 $ (158) $ 2,063 $ 1,611
Domestic Franchise 14 - 14 54
International Franchise 1 - 1 2
KK Supply Chain 169 (12) 157 170
Corporate 248 (19) 229 165
administration
Total depreciation
and amortization $ 2,653 $ (189) $ 2,464 $ 2,002
expense
Note: The fourth quarter of fiscal 2013 contained 14 weeks compared to 13
weeks in the fourth quarter of fiscal 2012. The foregoing table presents
fourth quarter fiscal 2013 results exclusive of results for the 14th week in
order to facilitate comparison of fourth quarter fiscal 2013 results with
results for the fourth quarter of fiscal 2012.
TABLE 9
KRISPY KREME DOUGHNUTS, INC
SEGMENT INFORMATION - 52 WEEK BASIS
53 Weeks Less - Week 52 Weeks 52 Weeks
Ended Ended Ended
Ended
February 3, February 3, January 27, January 29,
2013 2013 2013 2012
(In thousands)
Revenues:
Company Stores:
On-premises sales $ 142,918 $ (3,120) $ 139,798 $ 126,003
Wholesale sales 153,576 (3,047) 150,529 145,654
Company
Stores 296,494 (6,167) 290,327 271,657
revenues
Domestic Franchise 10,325 (244) 10,081 9,463
International Franchise 24,941 (457) 24,484 22,621
KK Supply Chain:
Total revenues 215,412 (4,438) 210,974 206,453
Less – intersegment (111,329) 2,283 (109,046) (106,977)
sales elimination
External KK
Supply Chain 104,083 (2,155) 101,928 99,476
revenues
Total $ 435,843 $ (9,023) $ 426,820 $ 403,217
revenues
Operating income (loss):
Company Stores $ 8,534 $ (280) $ 8,254 $ 284
Domestic Franchise 5,590 (218) 5,372 3,737
International Franchise 17,387 (395) 16,992 15,054
KK Supply Chain 32,450 (747) 31,703 30,160
Total segment 63,961 (1,640) 62,321 49,235
operating income
Unallocated general and (25,926) 350 (25,576) (22,875)
administrative expenses
Impairment charges and (306) - (306) (793)
lease termination costs
Consolidated $ 37,729 $ (1,290) $ 36,439 $ 25,567
operating income
Depreciation and
amortization expense:
Company Stores $ 8,142 $ (158) $ 7,984 $ 6,593
Domestic Franchise 164 - 164 219
International Franchise 10 - 10 6
KK Supply Chain 738 (12) 726 730
Corporate 837 (19) 818 687
administration
Total depreciation
and amortization $ 9,891 $ (189) $ 9,702 $ 8,235
expense
Note: Fiscal 2013 contained 53 weeks compared to 52 weeks in fiscal 2012.
The foregoing table presents fiscal 2013 results exclusive of results for the
53rd week in order to facilitate comparison of fiscal 2013 results with
results for fiscal 2012.
TABLE 10
KRISPY KREME DOUGHNUTS, INC
SELECTED OPERATING STATISTICS
13 Weeks Ended 52 Weeks Ended
January 27, January 29, January 27, January 29,
2013 2012 2013 2012
Systemwide sales (in
thousands):^(1)
Company stores $ 74,680 $ 68,047 $ 288,079 $ 269,676
Domestic Franchise 70,880 65,477 281,334 261,979
stores
International 112,525 104,320 423,418 383,508
Franchise stores
International
Franchise stores, in 112,525 104,972 423,418 380,028
constant dollars^(2)
Change in same store
sales:^(3)
Company stores 7.5 % 8.3 % 5.5 % 5.2 %
Domestic Franchise 9.6 7.9 6.8 6.6
stores ^
International (7.3) (8.8) (9.0) (6.4)
Franchise stores ^
International
Franchise stores, in (7.4) (9.5) (8.1) (10.8)
constant dollars^(2)
Company Stores - change
in same store sales:
Retail pricing 0.0 % 8.4 % 0.7 % 7.4 %
Guest check average
(exclusive of the (2.9) (4.1) (1.4) (2.9)
effects of pricing)
Customer count 10.6 3.2 6.2 0.5
Other (0.2) 0.8 0.0 0.2
Total 7.5 % 8.3 % 5.5 % 5.2 %
Change in same store
customer count - Company
stores (retail sales 11.9 % 3.6 % 7.1 % 0.6 %
only)
Average guest check -
Company stores (retail $ 7.19 $ 7.42 $ 7.29 $ 7.36
sales only)
Company Stores - store 1,260 1,175 4,891 4,567
operating weeks
Company stores wholesale
sales:^(4)
Grocers/mass
merchants: ^
Change in
average weekly (3.7) % (0.5) % (4.0) % 2.6 %
number of doors
Change in
average weekly 12.3 10.6 8.9 12.7
sales per door
Convenience
stores: ^
Change in
average weekly (2.0) % (10.2) % (6.3) % (5.9) %
number of doors
Change in
average weekly 6.9 14.2 8.8 10.7
sales per door
Systemwide sales, a non-GAAP financial measure, include sales by both
Company and franchise Krispy Kreme stores. The Company believes
systemwide
sales data are useful in assessing consumer demand for the Company's
products, the overall success of the Krispy Kreme brand and, ultimately,
the
performance of the Company. All of the Company's royalty revenues are
computed as percentages of sales made by the Company's domestic and
international franchisees, and substantially all of KK Supply Chain's
external sales of doughnut mixes and other ingredients ultimately are
(1) determined by
demand for the Company's products at franchise stores. Accordingly, sales
by the Company's franchisees have a direct effect on the Company's
royalty and
KK Supply Chain revenues, and therefore on the Company's profitability.
The Company's consolidated financial statements appearing elsewhere
herein
include sales by Company stores, sales to franchisees by the KK Supply
Chain business segment, and royalties and fees received from franchise
stores based
on their sales, but exclude sales by franchise stores to their customers.
Computed on a pro forma basis assuming the average rate of exchange
between the U.S. dollar and each of the foreign currencies in which the
(2) Company's
international franchisees conduct business had been the same in the
comparable prior year period.
The change in "same store sales" represents the aggregate on-premises
sales (including fundraising sales) during the current year period for
all stores which
had been open for more than 56 consecutive weeks during the current year
period (but only to the extent such sales occurred in the 57^th or later
week of each
store's operation) divided by the aggregate on-premises sales of such
stores for the comparable weeks in the preceding year period. Once a
store has been
(3) open for at least 57 consecutive weeks, its sales are included in the
computation of same stores sales for all subsequent periods. In the event
a store is closed
temporarily (for example, for remodeling) and has no sales during one or
more weeks, such store's sales for the comparable weeks during the
earlier or
subsequent period are excluded from the same store sales computation. The
change in "same store customer count" is similarly computed, but is based
upon
the number of retail transactions reported in the Company's point-of-sale
system.
For Company wholesale sales, "average weekly number of doors" represents
the average number of customer locations to which product deliveries are
(4) made
during a week by Company Stores, and "average weekly sales per door"
represents the average weekly sales to each such location by Company
Stores.
TABLE 11
KRISPY KREME DOUGHNUTS, INC
STORE COUNT
NUMBER OF STORES
DOMESTIC INTERNATIONAL TOTAL
Number of stores at February 3, 2013
Company:
Factory 76 - 76
Satellite 21 - 21
Total Company 97 - 97
Franchise:
Factory 99 120 219
Satellite 43 389 432
Total franchise 142 509 651
Total systemwide 239 509 748
NUMBER OF STORES
COMPANY FRANCHISE TOTAL
Quarter ended February 3, 2013
October 28, 2012 96 635 731
Opened 2 31 33
Closed (1) (15) (16)
February 3, 2013 97 651 748
Quarter ended January 29, 2012
October 30, 2011 89 589 678
Opened 3 26 29
Closed - (13) (13)
January 29, 2012 92 602 694
SOURCE Krispy Kreme Doughnut Corporation
Website: http://www.krispykreme.com
Contact: Media: Brian K. Little, +1-336-726-8825, blittle@krispykreme.com, or
Investor Relations: Anita K. Booe, +1-336-703-6902, abooe@krispykreme.com
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