WINSTON-SALEM, N.C.,
Nov. 19, 2012 /PRNewswire/ -- Krispy
Kreme Doughnuts, Inc. (NYSE: KKD) (the "Company") today
reported financial results for the third quarter of fiscal 2013,
ended October 28, 2012. The
Company also raised its outlook for fiscal 2013 and provided
preliminary guidance for fiscal 2014.
Third Quarter Fiscal 2013 Highlights Compared to the Year-Ago
Period:
- Revenues increased 8.5% to $107.1
million from $98.7
million
- Company same store sales rose 6.8%, the sixteenth consecutive
quarterly increase
- Operating income rose 66% to $9.2
million from $5.6 million
- Adjusted net income rose 76% to $8.3
million ($0.12 per share) from
$4.7 million ($0.07 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 GAAP to adjusted
earnings in the table accompanying this release)
- Net income was $5.0 million
($0.07 per share) compared to
$4.7 million ($0.07 per share) in the third quarter last year;
net income for the third quarter of fiscal 2013 reflects a
substantially higher book income tax rate compared to the third
quarter of fiscal 2012 as more fully described below
- Cash provided by operating activities was $15.0 million compared to $10.2 million in the third quarter last year
The Company ended the third quarter of fiscal 2013 with a total
of 731 Krispy Kreme shops systemwide, a net increase of 20 shops
during the quarter. As of October 28,
2012, there were 96 Company stores and 635 franchise
locations.
President and Chief Executive Officer James H. Morgan commented: "We commend the
entire Krispy Kreme family for their accomplishments in the third
quarter. Their efforts enabled us to deliver extraordinary
results, including healthy revenue gains, robust same store sales,
and substantial growth in both adjusted net income and operating
cash flow. We have now generated positive same store sales
for an impressive sixteen consecutive quarters. Even more
important, our Company Stores segment has emerged as a strong
contributor to our overall profitability due to the solid
foundation that has been laid over the past four years by our
operations team and those who support them, as well as the
outstanding effort of our marketing group."
Morgan continued, "While we are pleased with our near-term
achievements, our management focus is always centered on how best
to position ourselves over the long term. Our decision making
process and capital deployment is designed to build on Krispy
Kreme's 75-year legacy so that we can create sustainable long-term
value for our shareholders. By executing on our strategies,
we are confident that we can continue to successfully grow the
Company while at the same time realizing our brand mission to touch
and enhance lives through the joy that is Krispy Kreme."
Morgan concluded, "Given our strong third quarter and
year-to-date performance, we are pleased to be increasing our
earnings outlook for fiscal 2013 and projecting continued double
digit earnings growth for fiscal 2014."
Third Quarter Fiscal 2013 Results
Consolidated Results
For the third quarter ended October 28,
2012, revenues increased 8.5% to $107.1 million from $98.7
million.
Direct operating expenses increased to $90.2 million from $85.9
million, but as a percentage of total revenues fell to 84.2%
from 87.0%. General and administrative expenses increased
slightly to $5.1 million from
$4.9 million in the year-ago period
and, as a percentage of total revenues, decreased to 4.7% from
5.0%.
Operating income increased to $9.2
million from $5.6
million.
Adjusted net income was $8.3
million ($0.12 per share)
compared to $4.7 million
($0.07 per share) in the third
quarter last year. 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 GAAP to adjusted earnings in
the table accompanying this release).
Net income was $5.0 million
($0.07 per share) compared to
$4.7 million ($0.07 per share), in the third quarter last
year. Net income and EPS for the third quarter of fiscal 2013
reflect a book tax rate of 43% compared to a rate of 9% in the
third quarter last year. The increase reflects the reversal
of valuation allowances on deferred tax assets in the fourth
quarter of fiscal 2012. Accordingly, net income and EPS for
the third quarter of fiscal 2013 are not comparable to those for
the third quarter of fiscal 2012.
Segment Results
Company Stores revenues increased 7.2% to $72.5 million from $67.6
million. Same store sales at Company stores rose 6.8%,
the sixteenth consecutive quarterly increase, and were driven by
higher traffic. The Company Stores segment posted operating
income of $2.0 million compared to an
operating loss of $574,000 in the
third quarter last year.
Domestic Franchise revenues rose 7.3% to $2.5 million from $2.3
million, reflecting higher royalties. Total sales by
domestic franchisees rose 6.1%, while same store sales increased
5.0%. Domestic Franchise segment operating income improved to
$1.2 million compared to $1.1 million in the third quarter last year.
International Franchise revenues increased 12.1% to $6.0 million from $5.4
million, driven by higher royalties. Sales by
international franchise stores rose 12.6%. Adjusted to
eliminate the effects of changes in foreign exchange rates, same
store sales at international franchise stores fell 7.7%,
reflecting, among other things, honeymoon effects from the
substantial number of international store openings in recent years,
as well as cannibalization as markets develop. The
International Franchise segment generated operating income of
$4.3 million, up from $3.3 million in the third quarter last year.
KK Supply Chain revenues (including sales to Company stores)
rose 5.1% to $52.8 million from
$50.3 million in the same period last
year. External KK Supply Chain revenues rose 11.4% to
$26.1 million from $23.4 million in the year-ago period. KK
Supply Chain generated operating income of $7.3 million in the third quarter of fiscal 2013,
up from $7.0 million in the third
quarter last year.
Outlook
Given the Company's third quarter and fiscal year-to-date
results, along with other current information, it is raising its
fiscal 2013 outlook for consolidated operating income to between
$34 million and $36 million from the
previous forecast of between $29 million and
$33 million. The Company currently forecasts adjusted
earnings per share for fiscal 2013 of between $0.44 and $0.47. The Company noted that fiscal
2013 is a 53-week year and the fourth quarter will therefore have
14 weeks instead of 13. In order to facilitate comparisons,
the preceding Company guidance for fiscal 2013 does not reflect the
anticipated, but irregularly occurring, benefit of the extra
week.
For fiscal 2014, the Company anticipates opening 5 to 10 Company
stores, between 10 and 15 domestic franchise stores, and more than
75 international franchise stores. Although the Company looks
for continued organic same store sales growth in its domestic
stores, international franchise same store sales will likely
continue to be pressured by the substantial growth in international
markets in recent years.
Based on these factors, the Company's preliminary fiscal 2014
guidance is for operating income in the range of $38 million to $42 million and adjusted EPS for
fiscal 2014 of between $0.49 and
$0.55 per share. The foregoing adjusted EPS range
reflects estimated adjusted income tax expense of $2 million; adjusted income tax expense consists
solely of taxes currently payable in cash. Because the
Company has substantial net operating loss carryovers, the amount
of taxes payable in cash is expected to remain insignificant for
the foreseeable future.
Adjusted net income, adjusted income tax expense and adjusted
EPS are non-GAAP measures (see the reconciliation of GAAP to
adjusted earnings in the table accompanying this release).
Conference Call
The Company will host a conference call to review financial
results for the third quarter of fiscal 2013 as well as its outlook
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) 510-0219 or, for international
callers, by dialing (617) 614-3451. 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 31034181. The audio replay will be available
through November 26, 2012. A
transcript of the conference call also will be available on the
Company 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, NC, 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 730 locations in 21 countries around the world. Connect
with Krispy Kreme at www.krispykreme.com and on Facebook,
Foursquare, Twitter and YouTube.
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 new 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.
KRISPY
KREME DOUGHNUTS, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
Nine
Months Ended
|
|
|
|
October
28,
|
|
October
30,
|
|
October
28,
|
|
October
30,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
(In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
107,087
|
|
$
|
98,708
|
|
$
|
317,698
|
|
$
|
301,260
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating expenses (exclusive of depreciation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shown
below)
|
|
90,220
|
|
|
85,874
|
|
|
264,568
|
|
|
258,554
|
|
General
and administrative expenses
|
|
5,083
|
|
|
4,941
|
|
|
16,311
|
|
|
15,515
|
|
Depreciation expense
|
|
2,357
|
|
|
2,208
|
|
|
7,238
|
|
|
6,233
|
|
Impairment
charges and lease termination costs
|
|
216
|
|
|
135
|
|
|
302
|
|
|
680
|
Operating
income
|
|
9,211
|
|
|
5,550
|
|
|
29,279
|
|
|
20,278
|
Interest
income
|
|
14
|
|
|
30
|
|
|
102
|
|
|
131
|
Interest
expense
|
|
(384)
|
|
|
(385)
|
|
|
(1,202)
|
|
|
(1,276)
|
Equity in
losses of equity method franchisees
|
|
(47)
|
|
|
(72)
|
|
|
(150)
|
|
|
(69)
|
Gain on
sale of interest in equity method franchisee
|
|
-
|
|
|
-
|
|
|
-
|
|
|
6,198
|
Other
non-operating income and (expense), net
|
|
80
|
|
|
89
|
|
|
237
|
|
|
261
|
Income
before income taxes
|
|
8,874
|
|
|
5,212
|
|
|
28,266
|
|
|
25,523
|
Provision
for income taxes
|
|
3,830
|
|
|
495
|
|
|
12,267
|
|
|
2,796
|
Net
income
|
$
|
5,044
|
|
$
|
4,717
|
|
$
|
15,999
|
|
$
|
22,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.08
|
|
$
|
0.07
|
|
$
|
0.24
|
|
$
|
0.33
|
|
Diluted
|
$
|
0.07
|
|
$
|
0.07
|
|
$
|
0.23
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
66,668
|
|
|
69,384
|
|
|
67,897
|
|
|
69,013
|
|
Diluted
|
|
68,803
|
|
|
71,547
|
|
|
70,041
|
|
|
71,474
|
KRISPY
KREME DOUGHNUTS, INC.
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEET
|
|
|
|
|
|
|
|
|
|
|
|
|
October
28,
|
|
January
29,
|
|
|
2012
|
|
2012
|
|
|
|
(In
thousands)
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
49,903
|
|
$
|
44,319
|
Receivables
|
|
23,436
|
|
|
21,616
|
Receivables from equity method
franchisees
|
|
774
|
|
|
655
|
Inventories
|
|
16,677
|
|
|
16,497
|
Deferred
income taxes
|
|
17,685
|
|
|
10,540
|
Other
current assets
|
|
6,991
|
|
|
3,613
|
|
Total
current assets
|
|
115,466
|
|
|
97,240
|
Property
and equipment
|
|
76,132
|
|
|
75,466
|
Investments in equity method
franchisees
|
|
-
|
|
|
-
|
Goodwill
and other intangible assets
|
|
24,219
|
|
|
23,776
|
Deferred
income taxes
|
|
103,910
|
|
|
129,053
|
Other
assets
|
|
12,153
|
|
|
9,413
|
|
Total
assets
|
$
|
331,880
|
|
$
|
334,948
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
Current
maturities of long-term debt
|
$
|
2,162
|
|
$
|
2,224
|
Accounts
payable
|
|
12,047
|
|
|
10,494
|
Accrued
liabilities
|
|
28,280
|
|
|
28,800
|
|
Total
current liabilities
|
|
42,489
|
|
|
41,518
|
Long-term
debt, less current maturities
|
|
23,750
|
|
|
25,369
|
Other
long-term obligations
|
|
24,878
|
|
|
18,935
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
|
|
|
Preferred
stock, no par value
|
|
-
|
|
|
-
|
Common
stock, no par value
|
|
353,186
|
|
|
377,539
|
Accumulated other comprehensive loss
|
|
(345)
|
|
|
(336)
|
Accumulated deficit
|
|
(112,078)
|
|
|
(128,077)
|
|
Total
shareholders' equity
|
|
240,763
|
|
|
249,126
|
|
|
Total
liabilities and shareholders' equity
|
$
|
331,880
|
|
$
|
334,948
|
|
|
|
|
|
|
|
|
|
KRISPY
KREME DOUGHNUTS, INC.
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF CASH
FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months Ended
|
|
|
|
|
|
October
28,
|
|
October
30,
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
(In
thousands)
|
CASH FLOWS
FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
Net
income
|
$
|
15,999
|
|
$
|
22,727
|
Adjustments to reconcile net income to net cash
provided by operating activities:
|
|
|
|
|
|
|
Depreciation expense
|
|
7,238
|
|
|
6,233
|
|
Deferred
income taxes
|
|
10,824
|
|
|
159
|
|
Accrued
rent expense
|
|
369
|
|
|
389
|
|
Loss on
disposal of property and equipment
|
|
468
|
|
|
348
|
|
Gain on
sale of interest in equity method franchisee
|
|
-
|
|
|
(6,198)
|
|
Share-based compensation
|
|
3,570
|
|
|
3,437
|
|
Provision
for doubtful accounts
|
|
65
|
|
|
(397)
|
|
Amortization of deferred financing costs
|
|
300
|
|
|
320
|
|
Equity in
losses of equity method franchisees
|
|
150
|
|
|
69
|
|
Other
|
|
(1,075)
|
|
|
956
|
Change in
assets and liabilities:
|
|
|
|
|
|
|
Receivables
|
|
(1,467)
|
|
|
(1,794)
|
|
Inventories
|
|
(169)
|
|
|
(2,313)
|
|
Other
current and non-current assets
|
|
(1,499)
|
|
|
(595)
|
|
Accounts
payable and accrued liabilities
|
|
690
|
|
|
1,767
|
|
Other
long-term obligations
|
|
2,515
|
|
|
(2,196)
|
|
|
Net cash
provided by operating activities
|
|
|
37,978
|
|
|
22,912
|
CASH FLOWS
FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
Purchase
of property and equipment
|
|
(9,480)
|
|
|
(8,222)
|
Proceeds
from disposals of property and equipment
|
|
66
|
|
|
26
|
Acquisition of stores from franchisee
|
|
(915)
|
|
|
-
|
Proceeds
from sale of interest in equity method franchisee
|
|
-
|
|
|
7,723
|
Escrow
deposit recovery
|
|
-
|
|
|
1,600
|
Other
investing activities
|
|
347
|
|
|
(52)
|
|
|
Net cash
provided by (used for) investing activities
|
|
|
(9,982)
|
|
|
1,075
|
CASH FLOWS
FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
Repayment
of long-term debt
|
|
(1,652)
|
|
|
(8,437)
|
Deferred
financing costs
|
|
(11)
|
|
|
(23)
|
Proceeds
from exercise of stock options
|
|
-
|
|
|
1,036
|
Proceeds
from exercise of warrants
|
|
9
|
|
|
-
|
Repurchase
of common shares
|
|
(20,758)
|
|
|
(954)
|
|
|
Net cash
used for financing activities
|
|
|
(22,412)
|
|
|
(8,378)
|
Net
increase in cash and cash equivalents
|
|
5,584
|
|
|
15,609
|
Cash and
cash equivalents at beginning of period
|
|
44,319
|
|
|
21,970
|
Cash and
cash equivalents at end of period
|
$
|
49,903
|
|
$
|
37,579
|
KRISPY KREME DOUGHNUTS, INC.
NON-GAAP FINANCIAL INFORMATION
As of January 29, 2012, the
Company had net deferred income tax assets of approximately
$139.6 million, including
approximately $90 million of tax
assets related to federal and state net operating loss
carryovers. The Company's federal net operating loss
carryovers totaled approximately $240
million.
In the quarter ended January 29,
2012, the Company reversed $139.6
million of valuation allowances against deferred 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 increasing the provision for income taxes, and
therefore decreasing net income, beginning in fiscal 2013.
The reversal had no effect on the Company's cash payments for
income taxes. This negative effect on earnings occurs because
the reversal of the valuation allowances resulted in the
recognition in fiscal 2012 of income tax benefits expected to be
realized in later years. Absent the reversal of the valuation
allowances, 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 as described above, the Company's income tax expense in the
first three quarters of fiscal 2013 is not comparable to income tax
expense in the first three quarters of fiscal 2012. 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, which are expected to remain insignificant
for the foreseeable future.
In addition, in the first nine months 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 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 are expected to be non-recurring, on the Company's results of
operations, and to facilitate comparisons of fiscal 2013 results
with the Company's results for the comparable periods of 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. Adjusted net income and adjusted EPS reflect income
tax expense only to the extent such expense is currently payable in
cash. 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical Periods
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
Year
Ended
|
|
|
|
October
28,
|
|
October
30,
|
|
October
28,
|
|
October
30,
|
|
January
29,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
|
|
(In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income, as reported
|
$
|
5,044
|
|
$
|
4,717
|
|
$
|
15,999
|
|
$
|
22,727
|
|
$
|
166,269
|
Provision
for deferred income taxes
|
|
3,300
|
|
|
31
|
|
|
10,824
|
|
|
159
|
|
|
(139,403)
|
Gain on
sale of interest in KK Mexico
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(net of
income taxes of $1,492)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(4,706)
|
|
|
(4,706)
|
Adjusted
net income
|
$
|
8,344
|
|
$
|
4,748
|
|
$
|
26,823
|
|
$
|
18,180
|
|
$
|
22,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.13
|
|
$
|
0.07
|
|
$
|
0.40
|
|
$
|
0.26
|
|
$
|
0.32
|
|
Diluted
|
$
|
0.12
|
|
$
|
0.07
|
|
$
|
0.38
|
|
$
|
0.25
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
66,668
|
|
|
69,384
|
|
|
67,897
|
|
|
69,013
|
|
|
69,145
|
|
Diluted
|
|
68,803
|
|
|
71,547
|
|
|
70,041
|
|
|
71,474
|
|
|
71,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management's Earnings Guidance
|
|
|
|
Year
Ending
|
|
|
|
February 2, 2014
|
|
February 3, 2013
|
|
|
|
From
|
|
To
|
|
From
|
|
To
|
|
|
|
(In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income, as reported
|
$
|
20,000
|
|
$
|
22,000
|
|
$
|
17,900
|
|
$
|
19,000
|
Provision
for deferred income taxes
|
|
14,000
|
|
|
16,000
|
|
|
12,700
|
|
|
13,600
|
Adjusted
net income
|
$
|
34,000
|
|
$
|
38,000
|
|
$
|
30,600
|
|
$
|
32,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.51
|
|
$
|
0.57
|
|
$
|
0.45
|
|
$
|
0.48
|
|
Diluted
|
$
|
0.49
|
|
$
|
0.55
|
|
$
|
0.44
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
66,700
|
|
|
66,700
|
|
|
67,600
|
|
|
67,600
|
|
Diluted
|
|
68,800
|
|
|
68,800
|
|
|
69,700
|
|
|
69,700
|
KRISPY
KREME DOUGHNUTS, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
|
|
October
28,
|
|
October
30,
|
|
October
28,
|
|
October
30,
|
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
(In
thousands)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
Stores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On-premises sales
|
$
|
35,299
|
|
$
|
31,347
|
|
$
|
102,488
|
|
$
|
93,151
|
|
|
Wholesale
sales
|
|
37,194
|
|
|
36,259
|
|
|
112,684
|
|
|
109,922
|
|
|
|
Company
Stores revenues
|
|
72,493
|
|
|
67,606
|
|
|
215,172
|
|
|
203,073
|
|
Domestic
Franchise
|
|
2,498
|
|
|
2,327
|
|
|
7,561
|
|
|
7,045
|
|
International Franchise
|
|
6,024
|
|
|
5,374
|
|
|
17,832
|
|
|
16,362
|
|
KK Supply
Chain:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
52,825
|
|
|
50,277
|
|
|
158,075
|
|
|
154,501
|
|
|
Less –
intersegment sales elimination
|
|
(26,753)
|
|
|
(26,876)
|
|
|
(80,942)
|
|
|
(79,721)
|
|
|
|
External
KK Supply Chain revenues
|
|
26,072
|
|
|
23,401
|
|
|
77,133
|
|
|
74,780
|
|
|
|
|
Total
revenues
|
$
|
107,087
|
|
$
|
98,708
|
|
$
|
317,698
|
|
$
|
301,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
Stores
|
$
|
1,985
|
|
$
|
(574)
|
|
$
|
5,271
|
|
$
|
551
|
|
Domestic
Franchise
|
|
1,174
|
|
|
1,114
|
|
|
4,072
|
|
|
2,477
|
|
International Franchise
|
|
4,301
|
|
|
3,313
|
|
|
12,957
|
|
|
10,893
|
|
KK Supply
Chain
|
|
7,312
|
|
|
6,987
|
|
|
24,181
|
|
|
23,074
|
|
|
Total
segment operating income
|
|
14,772
|
|
|
10,840
|
|
|
46,481
|
|
|
36,995
|
|
Unallocated general and administrative
expenses
|
|
(5,345)
|
|
|
(5,155)
|
|
|
(16,900)
|
|
|
(16,037)
|
|
Impairment
charges and lease termination costs
|
|
(216)
|
|
|
(135)
|
|
|
(302)
|
|
|
(680)
|
|
|
Consolidated operating income
|
$
|
9,211
|
|
$
|
5,550
|
|
$
|
29,279
|
|
$
|
20,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
Stores
|
$
|
1,880
|
|
$
|
1,756
|
|
$
|
5,921
|
|
$
|
4,982
|
|
Domestic
Franchise
|
|
40
|
|
|
55
|
|
|
150
|
|
|
165
|
|
International Franchise
|
|
3
|
|
|
-
|
|
|
9
|
|
|
4
|
|
KK Supply
Chain
|
|
172
|
|
|
183
|
|
|
569
|
|
|
560
|
|
Corporate
administration
|
|
262
|
|
|
214
|
|
|
589
|
|
|
522
|
|
|
Total
depreciation expense
|
$
|
2,357
|
|
$
|
2,208
|
|
$
|
7,238
|
|
$
|
6,233
|
KRISPY
KREME DOUGHNUTS, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED OPERATING STATISTICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
|
|
|
October
28,
|
|
October
30,
|
|
October
28,
|
|
October
30,
|
|
|
|
|
|
2012
|
2011
|
2012
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Systemwide
Sales (in thousands):(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
stores
|
$
|
71,884
|
|
|
$
|
67,126
|
|
|
$
|
213,399
|
|
|
$
|
201,629
|
|
|
Domestic
Franchise stores
|
|
68,950
|
|
|
|
64,976
|
|
|
|
210,454
|
|
|
|
196,502
|
|
|
International Franchise
stores
|
|
103,536
|
|
|
|
91,928
|
|
|
|
310,893
|
|
|
|
279,188
|
|
|
International Franchise stores, in constant
dollars(2)
|
|
103,536
|
|
|
|
91,457
|
|
|
|
310,893
|
|
|
|
275,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
Same Store Sales (on-premises sales only):(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
stores
|
|
6.8
|
%
|
|
|
4.0
|
%
|
|
|
4.7
|
%
|
|
|
4.2
|
%
|
|
Domestic
Franchise stores
|
|
5.0
|
%
|
|
|
7.9
|
%
|
|
|
5.8
|
%
|
|
|
6.2
|
%
|
|
International Franchise
stores
|
|
(8.3)
|
%
|
|
|
(8.5)
|
%
|
|
|
(9.6)
|
%
|
|
|
(5.4)
|
%
|
|
International Franchise stores, in constant
dollars(2)
|
|
(7.7)
|
%
|
|
|
(12.2)
|
%
|
|
|
(8.4)
|
%
|
|
|
(11.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
Same Store Customer Count - Company stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(retail
sales only)
|
|
8.4
|
%
|
|
|
(1.3)
|
%
|
|
|
5.3
|
%
|
|
|
(0.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
guest check - Company stores (retail sales only)
|
$
|
7.43
|
|
|
$
|
7.49
|
|
|
$
|
7.33
|
|
|
$
|
7.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale
Metrics - Company stores:(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grocers/mass merchants:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
average weekly number of doors
|
|
(2.9)
|
%
|
|
|
1.4
|
%
|
|
|
(4.1)
|
%
|
|
|
3.7
|
%
|
|
|
Change in
average weekly sales per door
|
|
6.9
|
%
|
|
|
15.9
|
%
|
|
|
7.8
|
%
|
|
|
13.1
|
%
|
|
Convenience stores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
average weekly number of doors
|
|
(4.5)
|
%
|
|
|
(9.3)
|
%
|
|
|
(7.7)
|
%
|
|
|
(4.4)
|
%
|
|
|
Change in
average weekly sales per door
|
|
4.7
|
%
|
|
|
14.0
|
%
|
|
|
9.3
|
%
|
|
|
9.2
|
%
|
|
1) Systemwide sales, a
non-GAAP financial measure, include the sales by both Company and
franchise stores but excludes sales among Company and franchise
stores. The Company believes systemwide sales data are useful
in assessing the overall performance of the Krispy Kreme brand and,
ultimately, the performance of the Company. 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.
|
|
2) 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 Company's
international franchisees conduct business had been the same in the
comparable prior year period.
|
|
3) 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 57th 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 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.
|
|
4) For Company wholesale
sales, "average weekly number of doors" represents the average
number of customer locations to which product deliveries are 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.
|
KRISPY
KREME DOUGHNUTS, INC.
|
|
|
|
|
|
|
|
|
|
|
STORE
COUNT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER
OF STORES
|
|
|
|
|
|
DOMESTIC
|
|
INTERNATIONAL
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
|
Number
of Stores Open at October 28, 2012:
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
Factory
|
|
75
|
|
-
|
|
75
|
|
Satellite
|
|
21
|
|
-
|
|
21
|
|
|
Total
Company
|
|
96
|
|
-
|
|
96
|
Franchise:
|
|
|
|
|
|
|
|
Factory
|
|
101
|
|
119
|
|
220
|
|
Satellite
|
|
41
|
|
374
|
|
415
|
|
|
Total
franchise
|
|
142
|
|
493
|
|
635
|
|
|
|
Total
systemwide
|
|
238
|
|
493
|
|
731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER
OF STORES
|
|
|
|
|
|
COMPANY
|
|
FRANCHISE
|
|
TOTAL
|
Quarter
ended October 28, 2012
|
|
|
|
|
|
|
July 29,
2012
|
|
93
|
|
618
|
|
711
|
Opened
|
|
1
|
|
29
|
|
30
|
Closed
|
|
-
|
|
(10)
|
|
(10)
|
Transferred
|
|
2
|
|
(2)
|
|
-
|
October
28, 2012
|
|
96
|
|
635
|
|
731
|
|
|
|
|
|
|
|
|
|
|
Quarter
ended October 30, 2011
|
|
|
|
|
|
|
July 31,
2011
|
|
88
|
|
581
|
|
669
|
Opened
|
|
1
|
|
22
|
|
23
|
Closed
|
|
-
|
|
(14)
|
|
(14)
|
October
30, 2011
|
|
89
|
|
589
|
|
678
|
SOURCE Krispy Kreme Doughnut Corporation