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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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Delaware
|
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20-4145825
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
|
|
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Large accelerated filer
|
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller Reporting Company
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¨
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Page
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|
||
Part I. – Financial Information
|
||
|
|
|
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
Part II. – Other Information
|
||
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
June 28,
2014 |
|
December 28,
2013 |
|||
Assets
|
|
|
|
|||
Current assets:
|
|
|
|
|||
Cash and cash equivalents
|
$
|
176,381
|
|
|
256,933
|
|
Accounts receivable, net of allowance for doubtful accounts of $3,068 and $2,599 as of June 28, 2014 and December 28, 2013, respectively
|
54,979
|
|
|
47,162
|
|
|
Notes and other receivables, net of allowance for doubtful accounts of $1,448 and $659 as of June 28, 2014 and December 28, 2013, respectively
|
13,579
|
|
|
32,603
|
|
|
Deferred income taxes, net
|
46,284
|
|
|
46,461
|
|
|
Restricted assets of advertising funds
|
35,142
|
|
|
31,493
|
|
|
Prepaid income taxes
|
8,351
|
|
|
25,699
|
|
|
Prepaid expenses and other current assets
|
21,479
|
|
|
21,409
|
|
|
Total current assets
|
356,195
|
|
|
461,760
|
|
|
Property and equipment, net of accumulated depreciation of $100,475 and $105,834 as of June 28, 2014 and December 28, 2013, respectively
|
178,361
|
|
|
182,858
|
|
|
Equity method investments
|
175,677
|
|
|
170,644
|
|
|
Goodwill
|
890,362
|
|
|
891,598
|
|
|
Other intangible assets, net of accumulated amortization of $210,745 and $200,248 as of June 28, 2014 and December 28, 2013, respectively
|
1,439,101
|
|
|
1,452,205
|
|
|
Other assets
|
64,795
|
|
|
75,625
|
|
|
Total assets
|
$
|
3,104,491
|
|
|
3,234,690
|
|
Liabilities, Redeemable Noncontrolling Interests, and Stockholders’ Equity
|
|
|||||
Current liabilities:
|
|
|
|
|||
Current portion of long-term debt
|
$
|
—
|
|
|
5,000
|
|
Capital lease obligations
|
480
|
|
|
432
|
|
|
Accounts payable
|
12,535
|
|
|
12,445
|
|
|
Liabilities of advertising funds
|
41,312
|
|
|
49,077
|
|
|
Deferred income
|
30,623
|
|
|
28,426
|
|
|
Other current liabilities
|
186,930
|
|
|
248,918
|
|
|
Total current liabilities
|
271,880
|
|
|
344,298
|
|
|
Long-term debt, net
|
1,808,679
|
|
|
1,818,609
|
|
|
Capital lease obligations
|
7,042
|
|
|
6,996
|
|
|
Unfavorable operating leases acquired
|
15,752
|
|
|
16,834
|
|
|
Deferred income
|
13,758
|
|
|
11,135
|
|
|
Deferred income taxes, net
|
550,541
|
|
|
561,714
|
|
|
Other long-term liabilities
|
66,614
|
|
|
62,816
|
|
|
Total long-term liabilities
|
2,462,386
|
|
|
2,478,104
|
|
|
Commitments and contingencies (note 10)
|
|
|
|
|||
Redeemable noncontrolling interests
|
6,044
|
|
|
4,930
|
|
|
Stockholders’ equity:
|
|
|
|
|||
Preferred stock, $0.001 par value; 25,000,000 shares authorized; no shares issued and outstanding at June 28, 2014 and December 28, 2013, respectively
|
—
|
|
|
—
|
|
|
Common stock, $0.001 par value; 475,000,000 shares authorized; 106,601,169 issued and 105,601,169 outstanding at June 28, 2014; 106,876,919 shares issued and 106,646,219 shares outstanding at December 28, 2013
|
106
|
|
|
107
|
|
|
Additional paid-in capital
|
1,153,690
|
|
|
1,196,426
|
|
|
Treasury stock, at cost
|
(44,587
|
)
|
|
(10,773
|
)
|
|
Accumulated deficit
|
(747,352
|
)
|
|
(779,741
|
)
|
|
Accumulated other comprehensive income
|
2,324
|
|
|
1,339
|
|
|
Total stockholders’ equity
|
364,181
|
|
|
407,358
|
|
|
Total liabilities, redeemable noncontrolling interests, and stockholders’ equity
|
$
|
3,104,491
|
|
|
3,234,690
|
|
|
Three months ended
|
|
Six months ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Revenues:
|
|
|
|
|
|
|||||||
Franchise fees and royalty income
|
$
|
122,267
|
|
|
112,794
|
|
|
228,979
|
|
|
216,559
|
|
Rental income
|
25,633
|
|
|
25,055
|
|
|
48,080
|
|
|
47,487
|
|
|
Sales of ice cream products
|
32,044
|
|
|
32,809
|
|
|
60,715
|
|
|
56,389
|
|
|
Sales at company-owned restaurants
|
4,736
|
|
|
6,240
|
|
|
11,052
|
|
|
12,011
|
|
|
Other revenues
|
6,228
|
|
|
5,590
|
|
|
14,030
|
|
|
11,900
|
|
|
Total revenues
|
190,908
|
|
|
182,488
|
|
|
362,856
|
|
|
344,346
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|||||||
Occupancy expenses—franchised restaurants
|
13,560
|
|
|
12,820
|
|
|
26,572
|
|
|
25,596
|
|
|
Cost of ice cream products
|
22,995
|
|
|
24,302
|
|
|
42,743
|
|
|
40,288
|
|
|
Company-owned restaurant expenses
|
4,904
|
|
|
5,940
|
|
|
11,267
|
|
|
11,595
|
|
|
General and administrative expenses, net
|
56,381
|
|
|
62,978
|
|
|
116,095
|
|
|
118,555
|
|
|
Depreciation
|
4,930
|
|
|
5,522
|
|
|
9,843
|
|
|
11,370
|
|
|
Amortization of other intangible assets
|
6,384
|
|
|
6,565
|
|
|
12,789
|
|
|
13,147
|
|
|
Long-lived asset impairment charges
|
523
|
|
|
107
|
|
|
646
|
|
|
355
|
|
|
Total operating costs and expenses
|
109,677
|
|
|
118,234
|
|
|
219,955
|
|
|
220,906
|
|
|
Net income of equity method investments
|
4,048
|
|
|
4,782
|
|
|
7,148
|
|
|
7,869
|
|
|
Other operating income, net
|
2,278
|
|
|
7,769
|
|
|
6,605
|
|
|
8,955
|
|
|
Operating income
|
87,557
|
|
|
76,805
|
|
|
156,654
|
|
|
140,264
|
|
|
Other income (expense), net:
|
|
|
|
|
|
|||||||
Interest income
|
69
|
|
|
91
|
|
|
138
|
|
|
205
|
|
|
Interest expense
|
(16,823
|
)
|
|
(19,886
|
)
|
|
(34,764
|
)
|
|
(40,718
|
)
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
—
|
|
|
(13,735
|
)
|
|
(5,018
|
)
|
|
Other losses, net
|
(113
|
)
|
|
(813
|
)
|
|
(86
|
)
|
|
(1,203
|
)
|
|
Total other expense, net
|
(16,867
|
)
|
|
(20,608
|
)
|
|
(48,447
|
)
|
|
(46,734
|
)
|
|
Income before income taxes
|
70,690
|
|
|
56,197
|
|
|
108,207
|
|
|
93,530
|
|
|
Provision for income taxes
|
24,719
|
|
|
15,487
|
|
|
39,408
|
|
|
29,159
|
|
|
Net income including noncontrolling interests
|
45,971
|
|
|
40,710
|
|
|
68,799
|
|
|
64,371
|
|
|
Net loss attributable to noncontrolling interests
|
(220
|
)
|
|
(102
|
)
|
|
(348
|
)
|
|
(239
|
)
|
|
Net income attributable to Dunkin’ Brands
|
$
|
46,191
|
|
|
40,812
|
|
|
69,147
|
|
|
64,610
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
$
|
0.44
|
|
|
0.38
|
|
|
0.65
|
|
|
0.61
|
|
Common—diluted
|
0.43
|
|
|
0.38
|
|
|
0.64
|
|
|
0.60
|
|
|
Cash dividends declared per common share
|
0.23
|
|
|
0.19
|
|
|
0.46
|
|
|
0.38
|
|
|
Three months ended
|
|
Six months ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Net income including noncontrolling interests
|
$
|
45,971
|
|
|
40,710
|
|
|
68,799
|
|
|
64,371
|
|
Other comprehensive income (loss), net:
|
|
|
|
|
|
|
|
|||||
Effect of foreign currency translation, net of deferred tax expense (benefit) of $(136) and $240 for the three months ended June 28, 2014 and June 29, 2013, respectively, and $177 and $374 for the six months ended June 28, 2014 and June 29, 2013, respectively
|
2,231
|
|
|
(5,898
|
)
|
|
3,522
|
|
|
(16,703
|
)
|
|
Unrealized gains (losses) on interest rate swaps, net of deferred tax expense (benefit) of $(1,610) and $5,737 for the three months ended June 28, 2014 and June 29, 2013, respectively, and $(2,067) and $6,299 for the six months ended June 28, 2014 and June 29, 2013, respectively
|
(2,357
|
)
|
|
8,437
|
|
|
(3,058
|
)
|
|
9,216
|
|
|
Other, net
|
(137
|
)
|
|
99
|
|
|
521
|
|
|
119
|
|
|
Total other comprehensive income (loss), net
|
(263
|
)
|
|
2,638
|
|
|
985
|
|
|
(7,368
|
)
|
|
Comprehensive income including noncontrolling interests
|
45,708
|
|
|
43,348
|
|
|
69,784
|
|
|
57,003
|
|
|
Comprehensive loss attributable to noncontrolling interests
|
(220
|
)
|
|
(102
|
)
|
|
(348
|
)
|
|
(239
|
)
|
|
Comprehensive income attributable to Dunkin’ Brands
|
$
|
45,928
|
|
|
43,450
|
|
|
70,132
|
|
|
57,242
|
|
|
Six months ended
|
|||||
|
June 28, 2014
|
|
June 29, 2013
|
|||
Cash flows from operating activities:
|
|
|
|
|||
Net income including noncontrolling interests
|
$
|
68,799
|
|
|
64,371
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|||
Depreciation and amortization
|
22,632
|
|
|
24,517
|
|
|
Amortization of deferred financing costs and original issue discount
|
2,010
|
|
|
2,473
|
|
|
Loss on debt extinguishment and refinancing transactions
|
13,735
|
|
|
5,018
|
|
|
Deferred income taxes
|
(9,303
|
)
|
|
(5,812
|
)
|
|
Provision for (recovery of) bad debt
|
839
|
|
|
(186
|
)
|
|
Share-based compensation expense
|
4,926
|
|
|
3,661
|
|
|
Net income of equity method investments
|
(7,148
|
)
|
|
(7,869
|
)
|
|
Dividends received from equity method investments
|
5,825
|
|
|
5,527
|
|
|
Gain on sale of joint venture
|
—
|
|
|
(6,984
|
)
|
|
Gain on sale of real estate and company-owned restaurants
|
(6,442
|
)
|
|
(772
|
)
|
|
Other, net
|
(914
|
)
|
|
(651
|
)
|
|
Change in operating assets and liabilities:
|
|
|
|
|||
Accounts, notes, and other receivables, net
|
10,650
|
|
|
(4,969
|
)
|
|
Other current assets
|
454
|
|
|
1,012
|
|
|
Accounts payable
|
(716
|
)
|
|
(158
|
)
|
|
Other current liabilities
|
(61,083
|
)
|
|
(63,358
|
)
|
|
Liabilities of advertising funds, net
|
(10,938
|
)
|
|
(1,043
|
)
|
|
Income taxes payable, net
|
17,522
|
|
|
(5,935
|
)
|
|
Deferred income
|
4,820
|
|
|
(958
|
)
|
|
Other, net
|
4,003
|
|
|
1,673
|
|
|
Net cash provided by operating activities
|
59,671
|
|
|
9,557
|
|
|
Cash flows from investing activities:
|
|
|
|
|||
Additions to property and equipment
|
(10,556
|
)
|
|
(12,507
|
)
|
|
Proceeds from sale of real estate and company-owned restaurants
|
12,761
|
|
|
—
|
|
|
Proceeds from sale of joint venture
|
—
|
|
|
7,200
|
|
|
Other, net
|
(1,520
|
)
|
|
(1,522
|
)
|
|
Net cash provided by (used in) investing activities
|
685
|
|
|
(6,829
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|||
Repayment of long-term debt
|
(15,000
|
)
|
|
(19,157
|
)
|
|
Payment of deferred financing and other debt-related costs
|
(8,977
|
)
|
|
(6,157
|
)
|
|
Dividends paid on common stock
|
(48,759
|
)
|
|
(40,450
|
)
|
|
Repurchases of common stock
|
(81,046
|
)
|
|
(16,756
|
)
|
|
Exercise of stock options
|
4,293
|
|
|
4,642
|
|
|
Excess tax benefits from share-based compensation
|
7,821
|
|
|
—
|
|
|
Other, net
|
718
|
|
|
(208
|
)
|
|
Net cash used in financing activities
|
(140,950
|
)
|
|
(78,086
|
)
|
|
Effect of exchange rates on cash and cash equivalents
|
42
|
|
|
(261
|
)
|
|
Decrease in cash and cash equivalents
|
(80,552
|
)
|
|
(75,619
|
)
|
|
Cash and cash equivalents, beginning of period
|
256,933
|
|
|
252,618
|
|
|
Cash and cash equivalents, end of period
|
$
|
176,381
|
|
|
176,999
|
|
Supplemental cash flow information:
|
|
|
|
|||
Cash paid for income taxes
|
$
|
24,068
|
|
|
41,732
|
|
Cash paid for interest
|
32,859
|
|
|
49,804
|
|
|
Noncash investing activities:
|
|
|
|
|||
Property and equipment included in accounts payable and other current liabilities
|
1,622
|
|
|
1,890
|
|
|
Purchase of leaseholds in exchange for capital lease obligations
|
294
|
|
|
173
|
|
|
June 28, 2014
|
|
December 28, 2013
|
|||||||||||||||
|
Quoted prices
in active
markets for
identical assets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Total
|
|
Quoted prices
in active
markets for
identical assets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Total
|
|||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Mutual funds
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
1,012
|
|
|
—
|
|
|
1,012
|
|
Interest rate swaps
|
—
|
|
|
5,083
|
|
|
5,083
|
|
|
—
|
|
|
10,221
|
|
|
10,221
|
|
|
Total assets
|
$
|
—
|
|
|
5,083
|
|
|
5,083
|
|
|
1,012
|
|
|
10,221
|
|
|
11,233
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Deferred compensation liabilities
|
$
|
—
|
|
|
7,996
|
|
|
7,996
|
|
|
—
|
|
|
7,181
|
|
|
7,181
|
|
Total liabilities
|
$
|
—
|
|
|
7,996
|
|
|
7,996
|
|
|
—
|
|
|
7,181
|
|
|
7,181
|
|
|
June 28, 2014
|
|
December 28, 2013
|
|||||||||
|
Carrying Value
|
|
Estimated fair value
|
|
Carrying Value
|
|
Estimated fair value
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|||||
Term loans
|
$
|
1,808,679
|
|
|
1,807,405
|
|
|
1,823,609
|
|
|
1,836,212
|
|
|
Three months ended
|
|
Six months ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Royalty income
|
$
|
112,732
|
|
|
106,254
|
|
|
211,331
|
|
|
199,476
|
|
Initial franchise fees and renewal income
|
9,535
|
|
|
6,540
|
|
|
17,648
|
|
|
17,083
|
|
|
Total franchise fees and royalty income
|
$
|
122,267
|
|
|
112,794
|
|
|
228,979
|
|
|
216,559
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
||||
Systemwide Points of Distribution:
|
|
|
|
|
|
|
|
||||
Franchised points of distribution in operation—beginning of period
|
18,218
|
|
|
17,446
|
|
|
18,122
|
|
|
17,333
|
|
Franchised points of distribution—opened
|
315
|
|
|
300
|
|
|
581
|
|
|
544
|
|
Franchised points of distribution—closed
|
(167
|
)
|
|
(149
|
)
|
|
(337
|
)
|
|
(280
|
)
|
Net transfers from company-owned points of distribution
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
Franchised points of distribution in operation—end of period
|
18,376
|
|
|
17,597
|
|
|
18,376
|
|
|
17,597
|
|
Company-owned points of distribution—end of period
|
29
|
|
|
30
|
|
|
29
|
|
|
30
|
|
Total systemwide points of distribution—end of period
|
18,405
|
|
|
17,627
|
|
|
18,405
|
|
|
17,627
|
|
|
June 28,
2014 |
|
December 28,
2013 |
|
Consolidated Balance Sheet Classification
|
|||
Interest rate swaps
|
$
|
5,083
|
|
|
10,221
|
|
|
Other assets
|
Total fair values of derivative instruments
|
$
|
5,083
|
|
|
10,221
|
|
|
|
Three months ended June 28, 2014
|
|||||||||||||
Derivatives designated as cash flow hedging instruments
|
|
Amount of gain (loss) recognized in other comprehensive income (loss)
|
|
Amount of net gain (loss) reclassified into earnings
(1)
|
|
Consolidated statement of operations classification
|
|
Total effect on other comprehensive income (loss)
|
|||||
Interest rate swaps
|
|
$
|
(5,138
|
)
|
|
(1,171
|
)
|
|
Interest expense
|
|
$
|
(3,967
|
)
|
Income tax effect
|
|
2,090
|
|
|
480
|
|
|
Provision for income taxes
|
|
1,610
|
|
||
Net of income taxes
|
|
$
|
(3,048
|
)
|
|
(691
|
)
|
|
|
|
$
|
(2,357
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Three months ended June 29, 2013
|
|||||||||||||
Derivatives designated as cash flow hedging instruments
|
|
Amount of gain (loss) recognized in other comprehensive income (loss)
|
|
Amount of net gain (loss) reclassified into earnings
|
|
Consolidated statement of operations classification
|
|
Total effect on other comprehensive income (loss)
|
|||||
Interest rate swaps
|
|
$
|
13,328
|
|
|
(846
|
)
|
|
Interest expense
|
|
$
|
14,174
|
|
Income tax effect
|
|
(5,395
|
)
|
|
342
|
|
|
Provision for income taxes
|
|
(5,737
|
)
|
||
Net of income taxes
|
|
$
|
7,933
|
|
|
(504
|
)
|
|
|
|
$
|
8,437
|
|
Six months ended June 28, 2014
|
|||||||||||||
Derivatives designated as cash flow hedging instruments
|
|
Amount of gain (loss) recognized in other comprehensive income (loss)
|
|
Amount of net gain (loss) reclassified into earnings
(1)
|
|
Consolidated statement of operations classification
|
|
Total effect on other comprehensive income (loss)
|
|||||
Interest rate swaps
|
|
$
|
(7,173
|
)
|
|
(2,048
|
)
|
|
Interest expense
|
|
$
|
(5,125
|
)
|
Income tax effect
|
|
2,893
|
|
|
826
|
|
|
Provision for income taxes
|
|
2,067
|
|
||
Net of income taxes
|
|
$
|
(4,280
|
)
|
|
(1,222
|
)
|
|
|
|
$
|
(3,058
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Six months ended June 29, 2013
|
|||||||||||||
Derivatives designated as cash flow hedging instruments
|
|
Amount of gain (loss) recognized in other comprehensive income (loss)
|
|
Amount of net gain (loss) reclassified into earnings
|
|
Consolidated statement of operations classification
|
|
Total effect on other comprehensive income (loss)
|
|||||
Interest rate swaps
|
|
$
|
13,823
|
|
|
(1,692
|
)
|
|
Interest expense
|
|
$
|
15,515
|
|
Income tax effect
|
|
(5,602
|
)
|
|
697
|
|
|
Provision for income taxes
|
|
(6,299
|
)
|
||
Net of income taxes
|
|
$
|
8,221
|
|
|
(995
|
)
|
|
|
|
$
|
9,216
|
|
(1)
|
The total net gain (loss) reclassified from accumulated other comprehensive income into interest expense in the consolidated statements of operations includes the straight-line amortization of the unrealized gain that remained in accumulated other comprehensive income as of the date of the amendment.
|
|
June 28,
2014 |
|
December 28,
2013 |
|||
Gift card/certificate liability
|
$
|
99,386
|
|
|
139,721
|
|
Gift card breakage liability
|
11,551
|
|
|
14,093
|
|
|
Accrued salary and benefits
|
17,490
|
|
|
26,713
|
|
|
Accrued legal liabilities (see note 10(c))
|
26,085
|
|
|
26,633
|
|
|
Accrued interest
|
10,015
|
|
|
9,999
|
|
|
Accrued professional costs
|
2,942
|
|
|
2,938
|
|
|
Other
|
19,461
|
|
|
28,821
|
|
|
Total other current liabilities
|
$
|
186,930
|
|
|
248,918
|
|
|
Revenues
|
||||||||||||
|
Three months ended
|
|
Six months ended
|
||||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
||||||
Dunkin’ Donuts U.S.
|
$
|
136,450
|
|
|
128,672
|
|
|
261,669
|
|
|
$
|
248,306
|
|
Dunkin’ Donuts International
|
4,521
|
|
|
3,931
|
|
|
8,806
|
|
|
8,554
|
|
||
Baskin-Robbins U.S.
|
12,952
|
|
|
12,489
|
|
|
22,073
|
|
|
22,101
|
|
||
Baskin-Robbins International
|
33,631
|
|
|
34,917
|
|
|
63,642
|
|
|
60,345
|
|
||
Total reportable segment revenues
|
187,554
|
|
|
180,009
|
|
|
356,190
|
|
|
339,306
|
|
||
Other
|
3,354
|
|
|
2,479
|
|
|
6,666
|
|
|
5,040
|
|
||
Total revenues
|
$
|
190,908
|
|
|
182,488
|
|
|
362,856
|
|
|
344,346
|
|
|
Segment profit
|
|||||||||||
|
Three months ended
|
|
Six months ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Dunkin’ Donuts U.S.
|
$
|
100,981
|
|
|
91,302
|
|
|
190,813
|
|
|
174,857
|
|
Dunkin’ Donuts International
|
3,015
|
|
|
1,581
|
|
|
5,872
|
|
|
4,133
|
|
|
Baskin-Robbins U.S.
|
9,315
|
|
|
7,856
|
|
|
14,183
|
|
|
13,449
|
|
|
Baskin-Robbins International
|
11,724
|
|
|
19,411
|
|
|
21,223
|
|
|
28,709
|
|
|
Total reportable segments
|
125,035
|
|
|
120,150
|
|
|
232,091
|
|
|
221,148
|
|
|
Corporate
|
(30,871
|
)
|
|
(28,982
|
)
|
|
(62,302
|
)
|
|
(59,294
|
)
|
|
Interest expense, net
|
(16,754
|
)
|
|
(19,795
|
)
|
|
(34,626
|
)
|
|
(40,513
|
)
|
|
Amortization of other intangible assets
|
(6,384
|
)
|
|
(6,565
|
)
|
|
(12,789
|
)
|
|
(13,147
|
)
|
|
Long-lived asset impairment charges
|
(523
|
)
|
|
(107
|
)
|
|
(646
|
)
|
|
(355
|
)
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
—
|
|
|
(13,735
|
)
|
|
(5,018
|
)
|
|
Other losses, net
|
(113
|
)
|
|
(813
|
)
|
|
(86
|
)
|
|
(1,203
|
)
|
|
Operating income adjustments excluded from reportable segments
|
300
|
|
|
(7,691
|
)
|
|
300
|
|
|
(8,088
|
)
|
|
Income before income taxes
|
$
|
70,690
|
|
|
56,197
|
|
|
108,207
|
|
|
93,530
|
|
|
Net income of equity method investments
|
||||||||||||
|
Three months ended
|
|
Six months ended
|
||||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
||||||
Dunkin’ Donuts International
|
$
|
672
|
|
|
368
|
|
|
976
|
|
|
254
|
|
|
Baskin-Robbins International
|
3,019
|
|
|
4,126
|
|
|
5,477
|
|
|
6,664
|
|
||
Total reportable segments
|
3,691
|
|
|
4,494
|
|
|
6,453
|
|
|
6,918
|
|
||
Other
|
357
|
|
|
288
|
|
|
695
|
|
|
951
|
|
||
Total net income of equity method investments
|
$
|
4,048
|
|
|
4,782
|
|
|
$
|
7,148
|
|
|
7,869
|
|
|
|
Total stockholders’ equity
|
|
Redeemable noncontrolling interests
|
|||
Balance at December 28, 2013
|
|
$
|
407,358
|
|
|
4,930
|
|
Net income
|
|
69,147
|
|
|
(348
|
)
|
|
Other comprehensive income
|
|
985
|
|
|
—
|
|
|
Dividends paid on common stock
|
|
(48,759
|
)
|
|
—
|
|
|
Exercise of stock options
|
|
4,293
|
|
|
—
|
|
|
Repurchases of common stock
|
|
(81,046
|
)
|
|
—
|
|
|
Share-based compensation expense
|
|
4,926
|
|
|
—
|
|
|
Excess tax benefits from share-based compensation
|
|
7,821
|
|
|
—
|
|
|
Contributions from noncontrolling interests
|
|
—
|
|
|
1,462
|
|
|
Other, net
|
|
(544
|
)
|
|
—
|
|
|
Balance at June 28, 2014
|
|
$
|
364,181
|
|
|
6,044
|
|
|
Effect of foreign
currency
translation
|
|
Unrealized gains (losses) on interest rate swaps
|
|
Unrealized gain (loss) on pension plan
|
|
Other
|
|
Accumulated
other
comprehensive
income
|
||||||
Balance at December 28, 2013
|
$
|
5
|
|
|
6,085
|
|
|
(3,098
|
)
|
|
(1,653
|
)
|
|
1,339
|
|
Other comprehensive income (loss)
|
3,522
|
|
|
(3,058
|
)
|
|
35
|
|
|
486
|
|
|
985
|
|
|
Balance at June 28, 2014
|
$
|
3,527
|
|
|
3,027
|
|
|
(3,063
|
)
|
|
(1,167
|
)
|
|
2,324
|
|
|
Three months ended
|
|
Six months ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Net income attributable to Dunkin’ Brands—basic and diluted
|
$
|
46,191
|
|
|
40,812
|
|
|
69,147
|
|
|
64,610
|
|
Weighted average number of common shares:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
105,914,402
|
|
|
106,485,078
|
|
|
106,208,129
|
|
|
106,365,758
|
|
|
Common—diluted
|
107,186,360
|
|
|
108,211,994
|
|
|
107,583,260
|
|
|
108,185,485
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
$
|
0.44
|
|
|
0.38
|
|
|
0.65
|
|
|
0.61
|
|
Common—diluted
|
0.43
|
|
|
0.38
|
|
|
0.64
|
|
|
0.60
|
|
|
Three months ended
|
|
Six months ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
B-R 31 Ice Cream Co., Ltd.
|
$
|
533
|
|
|
602
|
|
|
844
|
|
|
1,004
|
|
BR Korea Co., Ltd.
|
1,178
|
|
|
1,019
|
|
|
2,225
|
|
|
2,029
|
|
|
Coffee Alliance, S.L. (“Coffee Alliance”)
|
17
|
|
|
32
|
|
|
17
|
|
|
130
|
|
|
|
$
|
1,728
|
|
|
1,653
|
|
|
3,086
|
|
|
3,163
|
|
|
Three months ended
|
|
Six months ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Franchisee-reported sales (in millions):
|
|
|
|
|
|
|
|
|||||
Dunkin’ Donuts U.S.
|
$
|
1,813.2
|
|
|
1,704.5
|
|
|
3,428.1
|
|
|
3,230.5
|
|
Dunkin’ Donuts International
|
176.7
|
|
|
170.8
|
|
|
345.4
|
|
|
338.8
|
|
|
Baskin-Robbins U.S.
|
169.1
|
|
|
161.9
|
|
|
278.9
|
|
|
269.5
|
|
|
Baskin-Robbins International
|
377.3
|
|
|
360.4
|
|
|
659.4
|
|
|
645.2
|
|
|
Total franchisee-reported sales
(a)
|
$
|
2,536.4
|
|
|
2,397.6
|
|
|
4,711.8
|
|
|
4,484.0
|
|
Systemwide sales growth
|
5.7
|
%
|
|
5.5
|
%
|
|
5.0
|
%
|
|
5.4
|
%
|
|
Comparable store sales growth (decline):
|
|
|
|
|
|
|
|
|||||
Dunkin’ Donuts U.S.
|
1.8
|
%
|
|
4.0
|
%
|
|
1.5
|
%
|
|
2.9
|
%
|
|
Dunkin’ Donuts International
|
(3.1
|
)%
|
|
(1.7
|
)%
|
|
(2.7
|
)%
|
|
(0.1
|
)%
|
|
Baskin-Robbins U.S.
|
4.2
|
%
|
|
1.6
|
%
|
|
2.6
|
%
|
|
(0.9
|
)%
|
|
Baskin-Robbins International
|
(1.6
|
)%
|
|
2.6
|
%
|
|
(0.3
|
)%
|
|
3.3
|
%
|
|
Financial data (in thousands):
|
|
|
|
|
|
|
|
|||||
Total revenues
|
$
|
190,908
|
|
|
182,488
|
|
|
362,856
|
|
|
344,346
|
|
Operating income
|
87,557
|
|
|
76,805
|
|
|
156,654
|
|
|
140,264
|
|
|
Adjusted operating income
|
94,164
|
|
|
91,168
|
|
|
169,789
|
|
|
161,854
|
|
|
Net income attributable to Dunkin’ Brands
|
46,191
|
|
|
40,812
|
|
|
69,147
|
|
|
64,610
|
|
|
Adjusted net income
|
50,155
|
|
|
43,881
|
|
|
85,783
|
|
|
75,026
|
|
•
|
Dunkin’ Donuts U.S. systemwide sales growth of
6.3%
and
6.1%
for the
three and six months ended
June 28, 2014
, respectively, as a result of 374 net new restaurants opened since
June 29, 2013
and comparable store sales growth of
1.8%
and
1.5%
, respectively, driven by higher traffic and increased average ticket resulting from guests purchasing more items per transaction and positive mix as guests purchased more premium-priced items. Growth was driven by beverages, breakfast sandwiches, and donuts.
|
•
|
Dunkin’ Donuts International systemwide sales growth of
3.5%
and
1.9%
for the
three and six months ended
June 28, 2014
, respectively, driven primarily by sales growth in the Middle East, Germany, Spain, and India due to net new units and comparable store sales growth, offset by a decline in South Korea. Dunkin’ Donuts International comparable store sales declined
3.1%
and
2.7%
for the
three and six months ended
June 28, 2014
, respectively, driven primarily by a decline in South Korea, offset by growth in the Middle East.
|
•
|
Baskin-Robbins U.S. systemwide sales growth of
4.5%
and
3.6%
for the
three and six months ended
June 28, 2014
, respectively, resulting primarily from comparable store sales growth of
4.2%
and
2.6%
, respectively, driven by increased sales of cups and cones, cakes, beverages, as well as the launch of online cake ordering.
|
•
|
Baskin-Robbins International systemwide sales growth of
4.7%
and
2.2%
for the
three and six months ended
June 28, 2014
, respectively, driven by sales growth in South Korea and the Middle East. Baskin-Robbins International comparable store sales declined
1.6%
and
0.3%
for the
three and six months ended
June 28, 2014
, respectively, driven by a decline in Japan, offset by growth in South Korea and the Middle East.
|
|
|
|
|
|
June 28, 2014
|
|
June 29, 2013
|
||
Points of distribution, at period end
(a)
:
|
|
|
|
|
|
|
|
||
Dunkin’ Donuts U.S.
|
|
|
|
|
7,821
|
|
|
7,447
|
|
Dunkin’ Donuts International
|
|
|
|
|
3,172
|
|
|
3,070
|
|
Baskin-Robbins U.S.
|
|
|
|
|
2,480
|
|
|
2,470
|
|
Baskin-Robbins International
|
|
|
|
|
4,932
|
|
|
4,640
|
|
Consolidated global points of distribution
|
|
|
|
|
18,405
|
|
|
17,627
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
June 28, 2014
|
|
June 29, 2013
|
|
June 28, 2014
|
|
June 29, 2013
|
||||
Net openings (closings), during the period:
|
|
|
|
|
|
|
|
||||
Dunkin’ Donuts U.S.
|
75
|
|
|
63
|
|
|
144
|
|
|
141
|
|
Dunkin’ Donuts International
|
17
|
|
|
33
|
|
|
(9
|
)
|
|
27
|
|
Baskin-Robbins U.S.
|
12
|
|
|
5
|
|
|
13
|
|
|
7
|
|
Baskin-Robbins International
|
47
|
|
|
50
|
|
|
99
|
|
|
84
|
|
Consolidated global net openings
|
151
|
|
|
151
|
|
|
247
|
|
|
259
|
|
|
Three months ended
|
|
Six months ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
|
(In thousands)
|
|||||||||||
Operating income
|
$
|
87,557
|
|
|
76,805
|
|
|
156,654
|
|
|
140,264
|
|
Adjustments:
|
|
|
|
|
|
|
|
|||||
Amortization of other intangible assets
|
6,384
|
|
|
6,565
|
|
|
12,789
|
|
|
13,147
|
|
|
Long-lived asset impairment charges
|
523
|
|
|
107
|
|
|
646
|
|
|
355
|
|
|
Third-party product volume guarantee
|
(300
|
)
|
|
7,500
|
|
|
(300
|
)
|
|
7,500
|
|
|
Peterborough plant closure costs
(a)
|
—
|
|
|
191
|
|
|
—
|
|
|
588
|
|
|
Adjusted operating income
|
$
|
94,164
|
|
|
91,168
|
|
|
169,789
|
|
|
161,854
|
|
Net income attributable to Dunkin’ Brands
|
$
|
46,191
|
|
|
40,812
|
|
|
69,147
|
|
|
64,610
|
|
Adjustments:
|
|
|
|
|
|
|
|
|||||
Amortization of other intangible assets
|
6,384
|
|
|
6,565
|
|
|
12,789
|
|
|
13,147
|
|
|
Long-lived asset impairment charges
|
523
|
|
|
107
|
|
|
646
|
|
|
355
|
|
|
Third-party product volume guarantee
|
(300
|
)
|
|
7,500
|
|
|
(300
|
)
|
|
7,500
|
|
|
Peterborough plant closure costs
(a)
|
—
|
|
|
191
|
|
|
—
|
|
|
588
|
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
—
|
|
|
13,735
|
|
|
5,018
|
|
|
Tax impact of adjustments
(b)
|
(2,643
|
)
|
|
(5,745
|
)
|
|
(10,748
|
)
|
|
(10,643
|
)
|
|
Income tax audit settlements
(c)
|
—
|
|
|
(8,417
|
)
|
|
—
|
|
|
(8,417
|
)
|
|
State tax apportionment
(d)
|
—
|
|
|
2,868
|
|
|
514
|
|
|
2,868
|
|
|
Adjusted net income
|
$
|
50,155
|
|
|
43,881
|
|
|
85,783
|
|
|
75,026
|
|
(a)
|
For the three and six months ended June 29, 2013, the adjustments represent transition-related general and administrative costs incurred related to the closure of the Baskin-Robbins ice cream manufacturing plant in Peterborough, Canada, such as information technology integration, project management, and transportation costs.
|
(b)
|
Tax impact of adjustments calculated at a 40% effective tax rate.
|
(c)
|
Represents income tax benefits resulting from the resolution of historical tax positions settled during the period.
|
(d)
|
Primarily represents deferred tax expense recognized due to an increase in our overall state tax rate resulting from a shift in estimated apportionment of income within state jurisdictions.
|
|
Three months ended
|
|
Six months ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Earnings per share:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
$
|
0.44
|
|
|
0.38
|
|
|
0.65
|
|
|
0.61
|
|
Common—diluted
|
0.43
|
|
|
0.38
|
|
|
0.64
|
|
|
0.60
|
|
|
Diluted adjusted earnings per share
|
0.47
|
|
|
0.41
|
|
|
0.80
|
|
|
0.69
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
||||||
|
(In thousands, except share and per share data)
|
||||||||||||
Adjusted net income
|
$
|
50,155
|
|
|
43,881
|
|
|
85,783
|
|
|
$
|
75,026
|
|
Weighted average number of common shares—diluted
|
107,186,360
|
|
|
108,211,994
|
|
|
107,583,260
|
|
|
108,185,485
|
|
||
Diluted adjusted earnings per share
|
$
|
0.47
|
|
|
0.41
|
|
|
0.80
|
|
|
$
|
0.69
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
Increase (Decrease)
|
|
June 28,
2014 |
|
June 29,
2013 |
|
Increase (Decrease)
|
||||||||||||||
$
|
|
%
|
|
$
|
|
%
|
|||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Franchise fees and royalty income
|
$
|
122,267
|
|
|
112,794
|
|
|
9,473
|
|
|
8.4
|
%
|
|
$
|
228,979
|
|
|
216,559
|
|
|
12,420
|
|
|
5.7
|
%
|
Rental income
|
25,633
|
|
|
25,055
|
|
|
578
|
|
|
2.3
|
%
|
|
48,080
|
|
|
47,487
|
|
|
593
|
|
|
1.2
|
%
|
||
Sales of ice cream products
|
32,044
|
|
|
32,809
|
|
|
(765
|
)
|
|
(2.3
|
)%
|
|
60,715
|
|
|
56,389
|
|
|
4,326
|
|
|
7.7
|
%
|
||
Sales at company-owned restaurants
|
4,736
|
|
|
6,240
|
|
|
(1,504
|
)
|
|
(24.1
|
)%
|
|
11,052
|
|
|
12,011
|
|
|
(959
|
)
|
|
(8.0
|
)%
|
||
Other revenues
|
6,228
|
|
|
5,590
|
|
|
638
|
|
|
11.4
|
%
|
|
14,030
|
|
|
11,900
|
|
|
2,130
|
|
|
17.9
|
%
|
||
Total revenues
|
$
|
190,908
|
|
|
182,488
|
|
|
8,420
|
|
|
4.6
|
%
|
|
$
|
362,856
|
|
|
344,346
|
|
|
18,510
|
|
|
5.4
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
Increase (Decrease)
|
|
June 28, 2014
|
|
June 29, 2013
|
|
Increase (Decrease)
|
||||||||||||||
$
|
|
%
|
|
$
|
|
%
|
|||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Occupancy expenses—franchised restaurants
|
$
|
13,560
|
|
|
12,820
|
|
|
740
|
|
|
5.8
|
%
|
|
$
|
26,572
|
|
|
25,596
|
|
|
976
|
|
|
3.8
|
%
|
Cost of ice cream products
|
22,995
|
|
|
24,302
|
|
|
(1,307
|
)
|
|
(5.4
|
)%
|
|
42,743
|
|
|
40,288
|
|
|
2,455
|
|
|
6.1
|
%
|
||
Company-owned restaurant expenses
|
4,904
|
|
|
5,940
|
|
|
(1,036
|
)
|
|
(17.4
|
)%
|
|
11,267
|
|
|
11,595
|
|
|
(328
|
)
|
|
(2.8
|
)%
|
||
General and administrative expenses, net
|
56,381
|
|
|
62,978
|
|
|
(6,597
|
)
|
|
(10.5
|
)%
|
|
116,095
|
|
|
118,555
|
|
|
(2,460
|
)
|
|
(2.1
|
)%
|
||
Depreciation and amortization
|
11,314
|
|
|
12,087
|
|
|
(773
|
)
|
|
(6.4
|
)%
|
|
22,632
|
|
|
24,517
|
|
|
(1,885
|
)
|
|
(7.7
|
)%
|
||
Long-lived asset impairment charges
|
523
|
|
|
107
|
|
|
416
|
|
|
388.8
|
%
|
|
646
|
|
|
355
|
|
|
291
|
|
|
82.0
|
%
|
||
Total operating costs and expenses
|
$
|
109,677
|
|
|
118,234
|
|
|
(8,557
|
)
|
|
(7.2
|
)%
|
|
$
|
219,955
|
|
|
220,906
|
|
|
(951
|
)
|
|
(0.4
|
)%
|
Net income of equity method investments
|
4,048
|
|
|
4,782
|
|
|
(734
|
)
|
|
(15.3
|
)%
|
|
7,148
|
|
|
7,869
|
|
|
(721
|
)
|
|
(9.2
|
)%
|
||
Other operating income
|
2,278
|
|
|
7,769
|
|
|
(5,491
|
)
|
|
(70.7
|
)%
|
|
6,605
|
|
|
8,955
|
|
|
(2,350
|
)
|
|
(26.2
|
)%
|
||
Operating income
|
$
|
87,557
|
|
|
76,805
|
|
|
10,752
|
|
|
14.0
|
%
|
|
$
|
156,654
|
|
|
140,264
|
|
|
16,390
|
|
|
11.7
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
Increase (Decrease)
|
|
June 28, 2014
|
|
June 29, 2013
|
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Interest expense, net
|
$
|
16,754
|
|
|
19,795
|
|
|
(3,041
|
)
|
|
(15.4
|
)%
|
|
$
|
34,626
|
|
|
40,513
|
|
|
(5,887
|
)
|
|
(14.5
|
)%
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
—
|
|
|
—
|
|
|
n/m
|
|
|
13,735
|
|
|
5,018
|
|
|
8,717
|
|
|
173.7
|
%
|
||
Other losses, net
|
113
|
|
|
813
|
|
|
(700
|
)
|
|
(86.1
|
)%
|
|
86
|
|
|
1,203
|
|
|
(1,117
|
)
|
|
(92.9
|
)%
|
||
Total other expense
|
$
|
16,867
|
|
|
20,608
|
|
|
(3,741
|
)
|
|
(18.2
|
)%
|
|
$
|
48,447
|
|
|
46,734
|
|
|
1,713
|
|
|
3.7
|
%
|
|
Three months ended
|
|
Six months ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
|
($ in thousands, except percentages)
|
|||||||||||
Income before income taxes
|
$
|
70,690
|
|
|
56,197
|
|
|
108,207
|
|
|
93,530
|
|
Provision for income taxes
|
24,719
|
|
|
15,487
|
|
|
39,408
|
|
|
29,159
|
|
|
Effective tax rate
|
35.0
|
%
|
|
27.6
|
%
|
|
36.4
|
%
|
|
31.2
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
Increase (Decrease)
|
|
June 28, 2014
|
|
June 29, 2013
|
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Royalty income
|
$
|
98,250
|
|
|
91,954
|
|
|
6,296
|
|
|
6.8
|
%
|
|
$
|
185,887
|
|
|
174,036
|
|
|
11,851
|
|
|
6.8
|
%
|
Franchise fees
|
8,430
|
|
|
5,694
|
|
|
2,736
|
|
|
48.1
|
%
|
|
15,430
|
|
|
15,066
|
|
|
364
|
|
|
2.4
|
%
|
||
Rental income
|
24,611
|
|
|
24,042
|
|
|
569
|
|
|
2.4
|
%
|
|
46,057
|
|
|
45,351
|
|
|
706
|
|
|
1.6
|
%
|
||
Sales at company-owned restaurants
|
4,736
|
|
|
6,240
|
|
|
(1,504
|
)
|
|
(24.1
|
)%
|
|
11,052
|
|
|
12,011
|
|
|
(959
|
)
|
|
(8.0
|
)%
|
||
Other revenues
|
423
|
|
|
742
|
|
|
(319
|
)
|
|
(43.0
|
)%
|
|
3,243
|
|
|
1,842
|
|
|
1,401
|
|
|
76.1
|
%
|
||
Total revenues
|
$
|
136,450
|
|
|
128,672
|
|
|
7,778
|
|
|
6.0
|
%
|
|
$
|
261,669
|
|
|
248,306
|
|
|
13,363
|
|
|
5.4
|
%
|
Segment profit
|
$
|
100,981
|
|
|
91,302
|
|
|
9,679
|
|
|
10.6
|
%
|
|
$
|
190,813
|
|
|
174,857
|
|
|
15,956
|
|
|
9.1
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
Increase (Decrease)
|
|
June 28, 2014
|
|
June 29, 2013
|
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Royalty income
|
$
|
3,859
|
|
|
3,535
|
|
|
324
|
|
|
9.2
|
%
|
|
$
|
7,554
|
|
|
7,028
|
|
|
526
|
|
|
7.5
|
%
|
Franchise fees
|
635
|
|
|
342
|
|
|
293
|
|
|
85.7
|
%
|
|
1,194
|
|
|
1,047
|
|
|
147
|
|
|
14.0
|
%
|
||
Rental income
|
49
|
|
|
31
|
|
|
18
|
|
|
58.1
|
%
|
|
84
|
|
|
59
|
|
|
25
|
|
|
42.4
|
%
|
||
Other revenues
|
(22
|
)
|
|
23
|
|
|
(45
|
)
|
|
n/m
|
|
|
(26
|
)
|
|
420
|
|
|
(446
|
)
|
|
n/m
|
|
||
Total revenues
|
$
|
4,521
|
|
|
3,931
|
|
|
590
|
|
|
15.0
|
%
|
|
$
|
8,806
|
|
|
8,554
|
|
|
252
|
|
|
2.9
|
%
|
Segment profit
|
$
|
3,015
|
|
|
1,581
|
|
|
1,434
|
|
|
90.7
|
%
|
|
$
|
5,872
|
|
|
4,133
|
|
|
1,739
|
|
|
42.1
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
Increase (Decrease)
|
|
June 28, 2014
|
|
June 29, 2013
|
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Royalty income
|
$
|
8,410
|
|
|
8,174
|
|
|
236
|
|
|
2.9
|
%
|
|
$
|
13,934
|
|
|
13,556
|
|
|
378
|
|
|
2.8
|
%
|
Franchise fees
|
222
|
|
|
203
|
|
|
19
|
|
|
9.4
|
%
|
|
397
|
|
|
472
|
|
|
(75
|
)
|
|
(15.9
|
)%
|
||
Rental income
|
814
|
|
|
820
|
|
|
(6
|
)
|
|
(0.7
|
)%
|
|
1,640
|
|
|
1,752
|
|
|
(112
|
)
|
|
(6.4
|
)%
|
||
Sales of ice cream products
|
1,104
|
|
|
1,087
|
|
|
17
|
|
|
1.6
|
%
|
|
2,040
|
|
|
2,048
|
|
|
(8
|
)
|
|
(0.4
|
)%
|
||
Other revenues
|
2,402
|
|
|
2,205
|
|
|
197
|
|
|
8.9
|
%
|
|
4,062
|
|
|
4,273
|
|
|
(211
|
)
|
|
(4.9
|
)%
|
||
Total revenues
|
$
|
12,952
|
|
|
12,489
|
|
|
463
|
|
|
3.7
|
%
|
|
$
|
22,073
|
|
|
22,101
|
|
|
(28
|
)
|
|
(0.1
|
)%
|
Segment profit
|
$
|
9,315
|
|
|
7,856
|
|
|
1,459
|
|
|
18.6
|
%
|
|
$
|
14,183
|
|
|
13,449
|
|
|
734
|
|
|
5.5
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
Increase (Decrease)
|
|
June 28, 2014
|
|
June 29, 2013
|
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Royalty income
|
$
|
2,213
|
|
|
2,591
|
|
|
(378
|
)
|
|
(14.6
|
)%
|
|
$
|
3,956
|
|
|
4,856
|
|
|
(900
|
)
|
|
(18.5
|
)%
|
Franchise fees
|
248
|
|
|
301
|
|
|
(53
|
)
|
|
(17.6
|
)%
|
|
627
|
|
|
498
|
|
|
129
|
|
|
25.9
|
%
|
||
Rental income
|
139
|
|
|
142
|
|
|
(3
|
)
|
|
(2.1
|
)%
|
|
257
|
|
|
288
|
|
|
(31
|
)
|
|
(10.8
|
)%
|
||
Sales of ice cream products
|
30,902
|
|
|
31,722
|
|
|
(820
|
)
|
|
(2.6
|
)%
|
|
58,580
|
|
|
54,341
|
|
|
4,239
|
|
|
7.8
|
%
|
||
Other revenues
|
129
|
|
|
161
|
|
|
(32
|
)
|
|
(19.9
|
)%
|
|
222
|
|
|
362
|
|
|
(140
|
)
|
|
(38.7
|
)%
|
||
Total revenues
|
$
|
33,631
|
|
|
34,917
|
|
|
(1,286
|
)
|
|
(3.7
|
)%
|
|
$
|
63,642
|
|
|
60,345
|
|
|
3,297
|
|
|
5.5
|
%
|
Segment profit
|
$
|
11,724
|
|
|
19,411
|
|
|
(7,687
|
)
|
|
(39.6
|
)%
|
|
$
|
21,223
|
|
|
28,709
|
|
|
(7,486
|
)
|
|
(26.1
|
)%
|
|
Six months ended
|
|||||
|
June 28, 2014
|
|
June 29, 2013
|
|||
Net cash provided by operating activities
|
$
|
59,671
|
|
|
9,557
|
|
Plus: Decrease in cash held for advertising funds and reserved for gift card/certificate programs
|
28,384
|
|
|
33,173
|
|
|
Less: Net cash provided by (used in) investing activities
|
685
|
|
|
(6,829
|
)
|
|
Free cash flow, excluding cash held for advertising funds and gift card/certificate programs
|
$
|
88,740
|
|
|
35,901
|
|
|
Twelve months ended
|
||
|
June 28, 2014
|
||
Net income including noncontrolling interests
|
$
|
150,732
|
|
Interest expense
|
74,281
|
|
|
Income tax expense
|
82,033
|
|
|
Depreciation and amortization
|
47,481
|
|
|
Impairment charges
|
1,727
|
|
|
EBITDA
|
356,254
|
|
|
Adjustments:
|
|
||
Non-cash adjustments
(a)
|
10,405
|
|
|
Loss on debt extinguishment and refinancing transactions
(b)
|
13,735
|
|
|
Other
(c)
|
4,001
|
|
|
Total adjustments
|
28,141
|
|
|
Adjusted EBITDA
|
$
|
384,395
|
|
(a)
|
Represents non-cash adjustments, including stock compensation expense, legal reserves, and other non-cash gains and losses.
|
(b)
|
Represents transaction costs associated with the refinancing and repayment of long-term debt, including fees paid to third parties and the write-off of deferred financing costs and original issue discount.
|
(c)
|
Represents costs and fees associated with various franchisee-related investments, bank fees, severance, as well as the net impact of other insignificant adjustments.
|
|
|
Issuer Purchases of Equity Securities
|
||||||||||||
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(a)
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
(a)
|
||||||
03/30/2014 - 04/26/2014
|
|
260,000
|
|
|
$
|
47.92
|
|
|
260,000
|
|
|
$
|
110,591,422
|
|
04/27/2014 - 05/31/2014
|
|
1,000,000
|
|
|
44.58
|
|
|
1,000,000
|
|
|
66,014,547
|
|
||
06/01/2014 - 06/28/2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66,014,547
|
|
||
Total
|
|
1,260,000
|
|
|
$
|
45.27
|
|
|
1,260,000
|
|
|
|
|
|
|
10.1
|
|
Dunkin
’
Brands Group, Inc. Annual Management Incentive Plan
|
|
|
|
31.1
|
|
Principal Executive Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to the Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Principal Financial Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to the Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
||
Ex. 101.INS* XBRL Instance Document
|
||
|
||
Ex. 101.SCH* XBRL Taxonomy Extension Schema Document
|
||
|
||
Ex. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document
|
||
|
||
Ex. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document
|
||
|
||
Ex. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document
|
||
|
||
Ex. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
|
*
|
In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”
|
|
|
|
|
|
|
Date:
|
August 6, 2014
|
|
By:
|
|
/s/ Nigel Travis
|
|
|
|
|
|
Nigel Travis,
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Dunkin’ Brands Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
August 6, 2014
|
|
|
|
/s/ Nigel Travis
|
Date
|
|
|
|
Nigel Travis
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Dunkin’ Brands Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
August 6, 2014
|
|
|
|
/s/ Paul Carbone
|
Date
|
|
|
|
Paul Carbone
Chief Financial Officer
|
1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
/s/ Nigel Travis
|
|
Nigel Travis
Chairman and Chief Executive Officer
|
1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
/s/ Paul Carbone
|
|
Paul Carbone
Chief Financial Officer
|