|
|
|
|
|
|
|
|
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|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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|
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|
|
Delaware
|
|
20-4145825
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(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification No.)
|
|
|
|
Large accelerated filer
|
|
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.
|
||
|
|
September 24,
2016 |
|
December 26,
2015 |
|||
Assets
|
|
|
|
|||
Current assets:
|
|
|
|
|||
Cash and cash equivalents
|
$
|
270,230
|
|
|
260,430
|
|
Restricted cash
|
70,734
|
|
|
71,917
|
|
|
Accounts receivable, net of allowance for doubtful accounts of $5,515 and $5,627 as of September 24, 2016 and December 26, 2015, respectively
|
49,552
|
|
|
53,142
|
|
|
Notes and other receivables, net of allowance for doubtful accounts of $254 and $1,007 as of September 24, 2016 and December 26, 2015, respectively
|
33,827
|
|
|
75,218
|
|
|
Restricted assets of advertising funds
|
39,436
|
|
|
38,554
|
|
|
Prepaid income taxes
|
19,764
|
|
|
23,899
|
|
|
Prepaid expenses and other current assets
|
30,164
|
|
|
34,664
|
|
|
Total current assets
|
513,707
|
|
|
557,824
|
|
|
Property and equipment, net of accumulated depreciation of $120,502 and $111,625 as of September 24, 2016 and December 26, 2015, respectively
|
177,137
|
|
|
182,614
|
|
|
Equity method investments
|
123,174
|
|
|
106,878
|
|
|
Goodwill
|
888,283
|
|
|
889,588
|
|
|
Other intangible assets, net of accumulated amortization of $253,239 and $239,715 as of September 24, 2016 and December 26, 2015, respectively
|
1,384,122
|
|
|
1,401,208
|
|
|
Other assets
|
59,172
|
|
|
59,007
|
|
|
Total assets
|
$
|
3,145,595
|
|
|
3,197,119
|
|
Liabilities and Stockholders’ Deficit
|
|
|||||
Current liabilities:
|
|
|
|
|||
Current portion of long-term debt
|
$
|
25,000
|
|
|
25,000
|
|
Capital lease obligations
|
569
|
|
|
546
|
|
|
Accounts payable
|
17,669
|
|
|
18,663
|
|
|
Liabilities of advertising funds
|
51,272
|
|
|
50,189
|
|
|
Deferred income
|
36,459
|
|
|
31,535
|
|
|
Other current liabilities
|
201,169
|
|
|
292,859
|
|
|
Total current liabilities
|
332,138
|
|
|
418,792
|
|
|
Long-term debt, net
|
2,406,550
|
|
|
2,420,600
|
|
|
Capital lease obligations
|
7,468
|
|
|
7,497
|
|
|
Unfavorable operating leases acquired
|
11,772
|
|
|
12,975
|
|
|
Deferred income
|
14,495
|
|
|
15,619
|
|
|
Deferred income taxes, net
|
469,787
|
|
|
476,510
|
|
|
Other long-term liabilities
|
70,610
|
|
|
65,869
|
|
|
Total long-term liabilities
|
2,980,682
|
|
|
2,999,070
|
|
|
Commitments and contingencies (note 9)
|
|
|
|
|||
Stockholders’ equity (deficit):
|
|
|
|
|||
Preferred stock, $0.001 par value; 25,000,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
|
Common stock, $0.001 par value; 475,000,000 shares authorized; 91,791,926 issued and 91,765,034 outstanding as of September 24, 2016; 92,668,211 shares issued and 92,641,044 shares outstanding as of December 26, 2015
|
92
|
|
|
92
|
|
|
Additional paid-in capital
|
827,706
|
|
|
876,557
|
|
|
Treasury stock, at cost; 26,892 shares and 27,167 shares as of September 24, 2016 and December 26, 2015, respectively
|
(1,064
|
)
|
|
(1,075
|
)
|
|
Accumulated deficit
|
(981,458
|
)
|
|
(1,076,479
|
)
|
|
Accumulated other comprehensive loss
|
(12,501
|
)
|
|
(20,046
|
)
|
|
Total stockholders’ deficit of Dunkin’ Brands
|
(167,225
|
)
|
|
(220,951
|
)
|
|
Noncontrolling interests
|
—
|
|
|
208
|
|
|
Total stockholders’ deficit
|
(167,225
|
)
|
|
(220,743
|
)
|
|
Total liabilities and stockholders’ deficit
|
$
|
3,145,595
|
|
|
3,197,119
|
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
Revenues:
|
|
|
|
|
|
|
|
|||||
Franchise fees and royalty income
|
$
|
138,639
|
|
|
133,913
|
|
|
399,617
|
|
|
380,381
|
|
Rental income
|
26,880
|
|
|
26,121
|
|
|
75,874
|
|
|
76,283
|
|
|
Sales of ice cream and other products
|
26,568
|
|
|
29,554
|
|
|
86,425
|
|
|
88,032
|
|
|
Sales at company-operated restaurants
|
1,611
|
|
|
7,293
|
|
|
11,924
|
|
|
21,578
|
|
|
Other revenues
|
13,401
|
|
|
12,926
|
|
|
39,344
|
|
|
40,862
|
|
|
Total revenues
|
207,099
|
|
|
209,807
|
|
|
613,184
|
|
|
607,136
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|||||
Occupancy expenses—franchised restaurants
|
15,881
|
|
|
13,686
|
|
|
42,691
|
|
|
40,921
|
|
|
Cost of ice cream and other products
|
18,384
|
|
|
19,788
|
|
|
58,445
|
|
|
58,010
|
|
|
Company-operated restaurant expenses
|
1,682
|
|
|
7,697
|
|
|
13,472
|
|
|
22,312
|
|
|
General and administrative expenses, net
|
59,374
|
|
|
61,433
|
|
|
184,028
|
|
|
187,622
|
|
|
Depreciation
|
5,050
|
|
|
5,177
|
|
|
15,361
|
|
|
15,278
|
|
|
Amortization of other intangible assets
|
5,397
|
|
|
6,161
|
|
|
16,726
|
|
|
18,542
|
|
|
Long-lived asset impairment charges
|
7
|
|
|
—
|
|
|
104
|
|
|
264
|
|
|
Total operating costs and expenses
|
105,775
|
|
|
113,942
|
|
|
330,827
|
|
|
342,949
|
|
|
Net income of equity method investments
|
5,467
|
|
|
4,059
|
|
|
12,148
|
|
|
10,957
|
|
|
Other operating income (loss), net
|
2,569
|
|
|
(161
|
)
|
|
6,329
|
|
|
947
|
|
|
Operating income
|
109,360
|
|
|
99,763
|
|
|
300,834
|
|
|
276,091
|
|
|
Other income (expense), net:
|
|
|
|
|
|
|
|
|||||
Interest income
|
161
|
|
|
86
|
|
|
434
|
|
|
324
|
|
|
Interest expense
|
(24,603
|
)
|
|
(24,786
|
)
|
|
(74,456
|
)
|
|
(72,045
|
)
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,554
|
)
|
|
Other losses, net
|
(124
|
)
|
|
(449
|
)
|
|
(596
|
)
|
|
(1,006
|
)
|
|
Total other expense, net
|
(24,566
|
)
|
|
(25,149
|
)
|
|
(74,618
|
)
|
|
(93,281
|
)
|
|
Income before income taxes
|
84,794
|
|
|
74,614
|
|
|
226,216
|
|
|
182,810
|
|
|
Provision for income taxes
|
32,082
|
|
|
28,312
|
|
|
86,760
|
|
|
68,634
|
|
|
Net income including noncontrolling interests
|
52,712
|
|
|
46,302
|
|
|
139,456
|
|
|
114,176
|
|
|
Net income attributable to noncontrolling interests
|
—
|
|
|
86
|
|
|
—
|
|
|
11
|
|
|
Net income attributable to Dunkin’ Brands
|
$
|
52,712
|
|
|
46,216
|
|
|
139,456
|
|
|
114,165
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
$
|
0.58
|
|
|
0.49
|
|
|
1.52
|
|
|
1.18
|
|
Common—diluted
|
0.57
|
|
|
0.48
|
|
|
1.51
|
|
|
1.16
|
|
|
Cash dividends declared per common share
|
0.30
|
|
|
0.27
|
|
|
0.90
|
|
|
0.80
|
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
Net income including noncontrolling interests
|
$
|
52,712
|
|
|
46,302
|
|
|
139,456
|
|
|
114,176
|
|
Other comprehensive income (loss), net:
|
|
|
|
|
|
|
|
|||||
Effect of foreign currency translation, net of deferred tax expense (benefit) of $(59) and $119 for the three months ended September 24, 2016 and September 26, 2015, respectively, and $(488) and $412 for the nine months ended September 24, 2016 and September 26, 2015, respectively.
|
6,161
|
|
|
(4,398
|
)
|
|
8,730
|
|
|
(6,838
|
)
|
|
Effect of interest rate swaps, net of deferred tax benefit of $216 for each of the three months ended September 24, 2016 and September 26, 2015 and $650 for each of the nine months ended September 24, 2016 and September 26, 2015
|
(319
|
)
|
|
(319
|
)
|
|
(955
|
)
|
|
(955
|
)
|
|
Effect of pension plan, net of deferred tax expense of $866 for the nine months ended September 26, 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
2,874
|
|
|
Other, net
|
(27
|
)
|
|
(180
|
)
|
|
(230
|
)
|
|
(830
|
)
|
|
Total other comprehensive income (loss), net
|
5,815
|
|
|
(4,897
|
)
|
|
7,545
|
|
|
(5,749
|
)
|
|
Comprehensive income including noncontrolling interests
|
58,527
|
|
|
41,405
|
|
|
147,001
|
|
|
108,427
|
|
|
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
86
|
|
|
—
|
|
|
11
|
|
|
Comprehensive income attributable to Dunkin’ Brands
|
$
|
58,527
|
|
|
41,319
|
|
|
147,001
|
|
|
108,416
|
|
|
Nine months ended
|
|||||
|
September 24,
2016 |
|
September 26,
2015 |
|||
Cash flows from operating activities:
|
|
|
|
|||
Net income including noncontrolling interests
|
$
|
139,456
|
|
|
114,176
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|||
Depreciation and amortization
|
32,087
|
|
|
33,820
|
|
|
Amortization of debt issuance costs and original issue discount
|
4,700
|
|
|
4,432
|
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
20,554
|
|
|
Deferred income taxes
|
(5,595
|
)
|
|
(17,918
|
)
|
|
Provision for bad debt
|
681
|
|
|
2,615
|
|
|
Share-based compensation expense
|
12,548
|
|
|
11,918
|
|
|
Net income of equity method investments
|
(12,148
|
)
|
|
(10,957
|
)
|
|
Dividends received from equity method investments
|
5,247
|
|
|
6,671
|
|
|
Gain on sale of real estate and company-operated restaurants
|
(6,322
|
)
|
|
(921
|
)
|
|
Other, net
|
(1,554
|
)
|
|
1,653
|
|
|
Change in operating assets and liabilities:
|
|
|
|
|||
Restricted cash
|
1,115
|
|
|
(65,888
|
)
|
|
Accounts, notes, and other receivables, net
|
43,482
|
|
|
11,731
|
|
|
Prepaid income taxes, net
|
4,531
|
|
|
11,859
|
|
|
Other current assets
|
(3,552
|
)
|
|
(4,008
|
)
|
|
Accounts payable
|
(1,635
|
)
|
|
1,881
|
|
|
Other current liabilities
|
(91,651
|
)
|
|
(48,508
|
)
|
|
Liabilities of advertising funds, net
|
896
|
|
|
(6,111
|
)
|
|
Deferred income
|
3,800
|
|
|
4,175
|
|
|
Other, net
|
4,250
|
|
|
12,063
|
|
|
Net cash provided by operating activities
|
130,336
|
|
|
83,237
|
|
|
Cash flows from investing activities:
|
|
|
|
|||
Additions to property and equipment
|
(10,358
|
)
|
|
(23,700
|
)
|
|
Proceeds from sale of real estate and company-operated restaurants
|
15,479
|
|
|
1,948
|
|
|
Other, net
|
(1,014
|
)
|
|
(3,270
|
)
|
|
Net cash provided by (used in) investing activities
|
4,107
|
|
|
(25,022
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
2,500,000
|
|
|
Repayment of long-term debt
|
(18,750
|
)
|
|
(1,831,574
|
)
|
|
Payment of debt issuance and other debt-related costs
|
—
|
|
|
(41,347
|
)
|
|
Dividends paid on common stock
|
(82,326
|
)
|
|
(76,013
|
)
|
|
Repurchases of common stock, including accelerated share repurchases
|
(30,000
|
)
|
|
(500,037
|
)
|
|
Change in restricted cash
|
73
|
|
|
(6,831
|
)
|
|
Exercise of stock options
|
4,937
|
|
|
10,297
|
|
|
Excess tax benefits from share-based compensation
|
2,038
|
|
|
11,534
|
|
|
Other, net
|
(690
|
)
|
|
(7,069
|
)
|
|
Net cash provided by (used in) financing activities
|
(124,718
|
)
|
|
58,960
|
|
|
Effect of exchange rates on cash and cash equivalents
|
75
|
|
|
(725
|
)
|
|
Increase in cash and cash equivalents
|
9,800
|
|
|
116,450
|
|
|
Cash and cash equivalents, beginning of period
|
260,430
|
|
|
208,080
|
|
|
Cash and cash equivalents, end of period
|
$
|
270,230
|
|
|
324,530
|
|
Supplemental cash flow information:
|
|
|
|
|||
Cash paid for income taxes
|
$
|
86,460
|
|
|
63,885
|
|
Cash paid for interest
|
70,749
|
|
|
66,854
|
|
|
Noncash investing activities:
|
|
|
|
|||
Property and equipment included in accounts payable and other current liabilities
|
1,121
|
|
|
1,185
|
|
|
Purchase of leaseholds in exchange for capital lease obligations
|
389
|
|
|
—
|
|
|
September 24, 2016
|
|
December 26, 2015
|
|||||||||
|
Significant other observable inputs (Level 2)
|
|
Total
|
|
Significant other observable inputs (Level 2)
|
|
Total
|
|||||
Assets:
|
|
|
|
|
|
|
|
|||||
Company-owned life insurance
|
$
|
6,097
|
|
|
6,097
|
|
|
5,802
|
|
|
5,802
|
|
Total assets
|
$
|
6,097
|
|
|
6,097
|
|
|
5,802
|
|
|
5,802
|
|
Liabilities:
|
|
|
|
|
|
|
|
|||||
Deferred compensation liabilities
|
$
|
10,709
|
|
|
10,709
|
|
|
9,068
|
|
|
9,068
|
|
Total liabilities
|
$
|
10,709
|
|
|
10,709
|
|
|
9,068
|
|
|
9,068
|
|
|
September 24, 2016
|
|
December 26, 2015
|
|||||||||
|
Carrying value
|
|
Estimated fair value
|
|
Carrying value
|
|
Estimated fair value
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|||||
Long-term debt
|
$
|
2,431,550
|
|
|
2,506,142
|
|
|
2,445,600
|
|
|
2,443,687
|
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
Royalty income
|
$
|
127,986
|
|
|
120,068
|
|
|
368,190
|
|
|
346,946
|
|
Initial franchise fees and renewal income
|
10,653
|
|
|
13,845
|
|
|
31,427
|
|
|
33,435
|
|
|
Total franchise fees and royalty income
|
$
|
138,639
|
|
|
133,913
|
|
|
399,617
|
|
|
380,381
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
||||
Systemwide Points of Distribution:
|
|
|
|
|
|
|
|
||||
Franchised points of distribution in operation—beginning of period
|
19,640
|
|
|
19,048
|
|
|
19,308
|
|
|
18,821
|
|
Franchised points of distribution—opened
|
310
|
|
|
357
|
|
|
988
|
|
|
1,036
|
|
Franchised points of distribution—closed
|
(195
|
)
|
|
(269
|
)
|
|
(563
|
)
|
|
(719
|
)
|
Net transfers from company-operated points of distribution
|
23
|
|
|
4
|
|
|
45
|
|
|
2
|
|
Franchised points of distribution in operation—end of period
|
19,778
|
|
|
19,140
|
|
|
19,778
|
|
|
19,140
|
|
Company-operated points of distribution—end of period
|
6
|
|
|
45
|
|
|
6
|
|
|
45
|
|
Total systemwide points of distribution—end of period
|
19,784
|
|
|
19,185
|
|
|
19,784
|
|
|
19,185
|
|
|
September 24,
2016 |
|
December 26,
2015 |
|||
Gift card/certificate liability
|
$
|
113,428
|
|
|
176,080
|
|
Gift card breakage liability
|
18,119
|
|
|
23,955
|
|
|
Accrued payroll and benefits
|
24,482
|
|
|
29,540
|
|
|
Accrued legal liabilities (see note 9(c))
|
5,682
|
|
|
18,267
|
|
|
Accrued interest
|
9,195
|
|
|
9,522
|
|
|
Accrued professional costs
|
2,978
|
|
|
4,814
|
|
|
Franchisee profit-sharing liability
|
6,204
|
|
|
8,406
|
|
|
Other
|
21,081
|
|
|
22,275
|
|
|
Total other current liabilities
|
$
|
201,169
|
|
|
292,859
|
|
|
Revenues
|
|||||||||||
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
Dunkin’ Donuts U.S.
|
$
|
152,425
|
|
|
154,370
|
|
|
444,898
|
|
|
438,005
|
|
Dunkin’ Donuts International
|
4,449
|
|
|
4,626
|
|
|
16,917
|
|
|
16,625
|
|
|
Baskin-Robbins U.S.
|
13,781
|
|
|
13,580
|
|
|
38,080
|
|
|
38,041
|
|
|
Baskin-Robbins International
|
27,904
|
|
|
30,607
|
|
|
89,578
|
|
|
89,309
|
|
|
Total reportable segment revenues
|
198,559
|
|
|
203,183
|
|
|
589,473
|
|
|
581,980
|
|
|
Other
|
8,540
|
|
|
6,624
|
|
|
23,711
|
|
|
25,156
|
|
|
Total revenues
|
$
|
207,099
|
|
|
209,807
|
|
|
613,184
|
|
|
607,136
|
|
|
Segment profit
|
|||||||||||
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
Dunkin’ Donuts U.S.
|
$
|
119,434
|
|
|
113,197
|
|
|
335,963
|
|
|
315,219
|
|
Dunkin’ Donuts International
|
705
|
|
|
1,000
|
|
|
6,438
|
|
|
7,217
|
|
|
Baskin-Robbins U.S.
|
11,085
|
|
|
9,774
|
|
|
29,123
|
|
|
25,452
|
|
|
Baskin-Robbins International
|
11,154
|
|
|
9,416
|
|
|
30,617
|
|
|
28,237
|
|
|
Total reportable segments
|
142,378
|
|
|
133,387
|
|
|
402,141
|
|
|
376,125
|
|
|
Corporate
|
(27,614
|
)
|
|
(27,463
|
)
|
|
(84,477
|
)
|
|
(81,228
|
)
|
|
Interest expense, net
|
(24,442
|
)
|
|
(24,700
|
)
|
|
(74,022
|
)
|
|
(71,721
|
)
|
|
Amortization of other intangible assets
|
(5,397
|
)
|
|
(6,161
|
)
|
|
(16,726
|
)
|
|
(18,542
|
)
|
|
Long-lived asset impairment charges
|
(7
|
)
|
|
—
|
|
|
(104
|
)
|
|
(264
|
)
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,554
|
)
|
|
Other losses, net
|
(124
|
)
|
|
(449
|
)
|
|
(596
|
)
|
|
(1,006
|
)
|
|
Income before income taxes
|
$
|
84,794
|
|
|
74,614
|
|
|
226,216
|
|
|
182,810
|
|
|
Net income of equity method investments
|
|||||||||||
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
Dunkin’ Donuts International
|
$
|
351
|
|
|
228
|
|
|
829
|
|
|
1,077
|
|
Baskin-Robbins International
|
4,266
|
|
|
3,810
|
|
|
8,644
|
|
|
9,702
|
|
|
Total reportable segments
|
4,617
|
|
|
4,038
|
|
|
9,473
|
|
|
10,779
|
|
|
Other
|
850
|
|
|
21
|
|
|
2,675
|
|
|
178
|
|
|
Total net income of equity method investments
|
$
|
5,467
|
|
|
4,059
|
|
|
12,148
|
|
|
10,957
|
|
|
|
Total stockholders’ deficit
|
||
Balance as of December 26, 2015
|
|
$
|
(220,743
|
)
|
Net income
|
|
139,456
|
|
|
Other comprehensive income
|
|
7,545
|
|
|
Dividends paid on common stock
|
|
(82,326
|
)
|
|
Exercise of stock options
|
|
4,937
|
|
|
Repurchases of common stock
|
|
(30,000
|
)
|
|
Share-based compensation expense
|
|
12,548
|
|
|
Excess tax benefits from share-based compensation
|
|
2,038
|
|
|
Deconsolidation of noncontrolling interest
|
|
(208
|
)
|
|
Other, net
|
|
(472
|
)
|
|
Balance as of September 24, 2016
|
|
$
|
(167,225
|
)
|
|
Effect of foreign currency translation
|
|
Unrealized gains on interest rate swaps
|
|
Other
|
|
Accumulated other comprehensive gain (loss)
|
|||||
Balance as of December 26, 2015
|
$
|
(20,459
|
)
|
|
2,443
|
|
|
(2,030
|
)
|
|
(20,046
|
)
|
Other comprehensive income (loss), net
|
8,730
|
|
|
(955
|
)
|
|
(230
|
)
|
|
7,545
|
|
|
Balance as of September 24, 2016
|
$
|
(11,729
|
)
|
|
1,488
|
|
|
(2,260
|
)
|
|
(12,501
|
)
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
Net income attributable to Dunkin’ Brands—basic and diluted (in thousands)
|
$
|
52,712
|
|
|
46,216
|
|
|
139,456
|
|
|
114,165
|
|
Weighted average number of common shares:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
91,621,553
|
|
|
94,975,241
|
|
|
91,603,653
|
|
|
96,992,297
|
|
|
Common—diluted
|
92,565,695
|
|
|
96,023,211
|
|
|
92,545,292
|
|
|
98,134,053
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
$
|
0.58
|
|
|
0.49
|
|
|
1.52
|
|
|
1.18
|
|
Common—diluted
|
0.57
|
|
|
0.48
|
|
|
1.51
|
|
|
1.16
|
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
B-R 31 Ice Cream Co., Ltd.
|
$
|
686
|
|
|
590
|
|
|
1,577
|
|
|
1,155
|
|
BR-Korea Co., Ltd.
|
1,192
|
|
|
1,101
|
|
|
3,053
|
|
|
3,240
|
|
|
Coffee Alliance S.L. ("Spain JV")
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
|
|
$
|
1,878
|
|
|
1,691
|
|
|
4,630
|
|
|
4,463
|
|
Amounts and percentages may not recalculate due to rounding
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
Systemwide sales (in millions)
(a)
:
|
|
|
|
|
|
|
|
|||||
Dunkin’ Donuts U.S.
|
$
|
2,075.3
|
|
|
1,951.5
|
|
|
5,997.5
|
|
|
5,663.9
|
|
Dunkin’ Donuts International
|
177.5
|
|
|
164.2
|
|
|
519.9
|
|
|
506.0
|
|
|
Baskin-Robbins U.S.
|
178.2
|
|
|
179.5
|
|
|
491.1
|
|
|
483.8
|
|
|
Baskin-Robbins International
|
390.0
|
|
|
358.5
|
|
|
1,006.0
|
|
|
990.2
|
|
|
Total systemwide sales
|
$
|
2,821.0
|
|
|
2,653.8
|
|
|
8,014.5
|
|
|
7,643.9
|
|
Systemwide sales growth
|
6.3
|
%
|
|
2.8
|
%
|
|
4.8
|
%
|
|
4.6
|
%
|
|
Comparable store sales growth (decline):
|
|
|
|
|
|
|
|
|||||
Dunkin’ Donuts U.S.
|
2.0
|
%
|
|
1.1
|
%
|
|
1.4
|
%
|
|
2.2
|
%
|
|
Dunkin’ Donuts International
|
(1.4
|
)%
|
|
0.8
|
%
|
|
(2.2
|
)%
|
|
0.7
|
%
|
|
Baskin-Robbins U.S.
|
(0.9
|
)%
|
|
7.5
|
%
|
|
1.1
|
%
|
|
6.5
|
%
|
|
Baskin-Robbins International
|
(2.9
|
)%
|
|
(2.4
|
)%
|
|
(5.5
|
)%
|
|
(1.7
|
)%
|
|
Financial data (in thousands):
|
|
|
|
|
|
|
|
|||||
Total revenues
|
$
|
207,099
|
|
|
209,807
|
|
|
613,184
|
|
|
607,136
|
|
Operating income
|
109,360
|
|
|
99,763
|
|
|
300,834
|
|
|
276,091
|
|
|
Adjusted operating income
|
114,764
|
|
|
105,960
|
|
|
317,300
|
|
|
296,536
|
|
|
Net income attributable to Dunkin’ Brands
|
52,712
|
|
|
46,216
|
|
|
139,456
|
|
|
114,165
|
|
|
Adjusted net income
|
55,955
|
|
|
50,180
|
|
|
149,336
|
|
|
139,010
|
|
(a)
|
Beginning in the first quarter of fiscal year 2016, we began presenting systemwide sales rather than franchisee-reported sales, which excludes sales of company-operated restaurants, as we believe the systemwide sales information is a more complete metric in obtaining an understanding of our financial performance. Additionally, systemwide sales related to restaurants located in Puerto Rico were previously included in the Baskin-Robbins International segment, but are now included in the Baskin-Robbins U.S. segment based on functional responsibility for all periods presented.
|
•
|
Dunkin’ Donuts U.S. systemwide sales growth of
6.3%
and
5.9%
for the
three and nine months ended
September 24, 2016
, respectively, as a result of
321
net new restaurants opened since
September 26, 2015
, and comparable store
|
•
|
Dunkin’ Donuts International systemwide sales growth of
8.1%
and
2.8%
for the
three and nine months ended
September 24, 2016
, respectively, driven primarily by sales growth in Europe, the Middle East, Asia, and South America. Sales growth for the nine months ended
September 24, 2016
was also offset by a decline in sales in South Korea. Sales in South Korea, Asia, and South America for the nine months ended
September 24, 2016
were negatively impacted by unfavorable foreign exchange rates. On a constant currency basis, systemwide sales for each of the three- and nine-month periods ended
September 24, 2016
increased by approximately 7%. Dunkin’ Donuts International comparable store sales declined
1.4%
and
2.2%
for the
three and nine months ended
September 24, 2016
, respectively, due to declines in Europe and South Korea, offset by gains in South America.
|
•
|
Baskin-Robbins U.S. systemwide sales decline of
0.8%
for the three months ended
September 24, 2016
, resulting primarily from comparable store sales decline of
0.9%
, due to declines in sales of beverages and sundaes, offset by growth in sales of cups and cones led by Warm Cookie and Donut Ice Cream Sandwiches. Systemwide sales grew
1.5%
for the nine months ended
September 24, 2016
, resulting primarily from comparable store sales growth of
1.1%
, driven by increased sales of cups and cones. For the three and nine months ended
September 24, 2016
, traffic declined and average ticket increased.
|
•
|
Baskin-Robbins International systemwide sales growth of
8.8%
and
1.6%
for the
three and nine months ended
September 24, 2016
, respectively, primarily driven by sales growth in Japan and Korea. Sales in Japan and Korea were positively impacted by favorable foreign exchange rates for the three months ended
September 24, 2016
. Sales in Japan were positively impacted by favorable foreign exchange rates while sales in South Korea were negatively impacted by unfavorable foreign exchange rates for the nine months ended
September 24, 2016
. On a constant currency basis, systemwide sales for the three months ended
September 24, 2016
increased by approximately 2% and systemwide sales on a constant currency basis for the nine months ended
September 24, 2016
remained flat. Baskin-Robbins International comparable store sales declined
2.9%
and
5.5%
for the
three and nine months ended
September 24, 2016
, respectively, driven primarily by declines in South Korea and the Middle East.
|
|
September 24, 2016
|
|
September 26, 2015
|
||
Points of distribution, at period end:
|
|
|
|
||
Dunkin’ Donuts U.S.
|
8,629
|
|
|
8,308
|
|
Dunkin’ Donuts International
|
3,379
|
|
|
3,260
|
|
Baskin-Robbins U.S.
|
2,533
|
|
|
2,515
|
|
Baskin-Robbins International
|
5,243
|
|
|
5,102
|
|
Consolidated global points of distribution
|
19,784
|
|
|
19,185
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||
|
September 24, 2016
|
|
September 26, 2015
|
|
September 24, 2016
|
|
September 26, 2015
|
||||
Net openings (closings) during the period:
|
|
|
|
|
|
|
|
||||
Dunkin’ Donuts U.S.
|
56
|
|
|
68
|
|
|
198
|
|
|
226
|
|
Dunkin’ Donuts International
|
11
|
|
|
40
|
|
|
60
|
|
|
32
|
|
Baskin-Robbins U.S.
|
3
|
|
|
(13
|
)
|
|
4
|
|
|
(14
|
)
|
Baskin-Robbins International
|
45
|
|
|
(5
|
)
|
|
165
|
|
|
79
|
|
Consolidated global net openings
|
115
|
|
|
90
|
|
|
427
|
|
|
323
|
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
|
(In thousands)
|
|||||||||||
Operating income
|
$
|
109,360
|
|
|
99,763
|
|
|
300,834
|
|
|
276,091
|
|
Adjustments:
|
|
|
|
|
|
|
|
|||||
Amortization of other intangible assets
|
5,397
|
|
|
6,161
|
|
|
16,726
|
|
|
18,542
|
|
|
Long-lived asset impairment charges
|
7
|
|
|
—
|
|
|
104
|
|
|
264
|
|
|
Transaction-related costs
(a)
|
—
|
|
|
36
|
|
|
64
|
|
|
317
|
|
|
Bertico and related litigation
(b)
|
—
|
|
|
—
|
|
|
(428
|
)
|
|
(2,753
|
)
|
|
Settlement of Canadian pension plan
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
4,075
|
|
|
Adjusted operating income
|
$
|
114,764
|
|
|
105,960
|
|
|
317,300
|
|
|
296,536
|
|
Net income attributable to Dunkin’ Brands
|
$
|
52,712
|
|
|
46,216
|
|
|
139,456
|
|
|
114,165
|
|
Adjustments:
|
|
|
|
|
|
|
|
|||||
Amortization of other intangible assets
|
5,397
|
|
|
6,161
|
|
|
16,726
|
|
|
18,542
|
|
|
Long-lived asset impairment charges
|
7
|
|
|
—
|
|
|
104
|
|
|
264
|
|
|
Transaction-related costs
(a)
|
—
|
|
|
36
|
|
|
64
|
|
|
317
|
|
|
Bertico and related litigation
(b)
|
—
|
|
|
—
|
|
|
(428
|
)
|
|
(2,753
|
)
|
|
Settlement of Canadian pension plan
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
4,075
|
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
—
|
|
|
—
|
|
|
20,554
|
|
|
Tax impact of adjustments
(d)
|
(2,161
|
)
|
|
(2,479
|
)
|
|
(6,586
|
)
|
|
(16,400
|
)
|
|
Tax impact of legal entity conversion
(e)
|
—
|
|
|
246
|
|
|
—
|
|
|
246
|
|
|
Adjusted net income
|
$
|
55,955
|
|
|
50,180
|
|
|
149,336
|
|
|
139,010
|
|
(a)
|
Represents non-capitalizable costs incurred as a result of the securitized financing facility, which was completed in January 2015.
|
(b)
|
Adjustment for the nine months ended September 24, 2016 represents a net reduction to legal reserves for the Bertico litigation based upon final agreement of interest and related costs associated with the judgment. Adjustment for the nine months ended September 26, 2015 represents a net reduction to legal reserves for the Bertico litigation and related matters, as a result of the Quebec Court of Appeals (Montreal) ruling to reduce the damages assessed against the Company in the Bertico litigation from approximately C$16.4 million to approximately C$10.9 million, plus costs and interest.
|
(c)
|
Represents costs incurred related to the final settlement of our Canadian pension plan as a result of the closure of our Canadian ice cream manufacturing plant in fiscal year 2012.
|
(d)
|
Tax impact of adjustments calculated at a 40% effective tax rate.
|
(e)
|
Represents the net tax impact of converting Dunkin' Brands Canada Ltd. to Dunkin' Brands Canada ULC.
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
Earnings per share:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
$
|
0.58
|
|
|
0.49
|
|
|
1.52
|
|
|
1.18
|
|
Common—diluted
|
0.57
|
|
|
0.48
|
|
|
1.51
|
|
|
1.16
|
|
|
Diluted adjusted earnings per share
|
0.60
|
|
|
0.52
|
|
|
1.61
|
|
|
1.42
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
||||||
|
(In thousands, except share and per share data)
|
||||||||||||
Adjusted net income
|
$
|
55,955
|
|
|
50,180
|
|
|
149,336
|
|
|
139,010
|
|
|
Weighted average number of common shares—diluted
|
92,565,695
|
|
|
96,023,211
|
|
|
92,545,292
|
|
|
98,134,053
|
|
||
Diluted adjusted earnings per share
|
$
|
0.60
|
|
|
0.52
|
|
|
1.61
|
|
|
$
|
1.42
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
||||||||||||||
$
|
|
%
|
|
$
|
|
%
|
|||||||||||||||||||
|
(In thousands, except percentages)
|
|
(In thousands, except percentages)
|
||||||||||||||||||||||
Franchise fees and royalty income
|
$
|
138,639
|
|
|
133,913
|
|
|
4,726
|
|
|
3.5
|
%
|
|
$
|
399,617
|
|
|
380,381
|
|
|
19,236
|
|
|
5.1
|
%
|
Rental income
|
26,880
|
|
|
26,121
|
|
|
759
|
|
|
2.9
|
%
|
|
75,874
|
|
|
76,283
|
|
|
(409
|
)
|
|
(0.5
|
)%
|
||
Sales of ice cream and other products
|
26,568
|
|
|
29,554
|
|
|
(2,986
|
)
|
|
(10.1
|
)%
|
|
86,425
|
|
|
88,032
|
|
|
(1,607
|
)
|
|
(1.8
|
)%
|
||
Sales at company-operated restaurants
|
1,611
|
|
|
7,293
|
|
|
(5,682
|
)
|
|
(77.9
|
)%
|
|
11,924
|
|
|
21,578
|
|
|
(9,654
|
)
|
|
(44.7
|
)%
|
||
Other revenues
|
13,401
|
|
|
12,926
|
|
|
475
|
|
|
3.7
|
%
|
|
39,344
|
|
|
40,862
|
|
|
(1,518
|
)
|
|
(3.7
|
)%
|
||
Total revenues
|
$
|
207,099
|
|
|
209,807
|
|
|
(2,708
|
)
|
|
(1.3
|
)%
|
|
$
|
613,184
|
|
|
607,136
|
|
|
6,048
|
|
|
1.0
|
%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
||||||||||||||
$
|
|
%
|
|
$
|
|
%
|
|||||||||||||||||||
|
(In thousands, except percentages)
|
|
(In thousands, except percentages)
|
||||||||||||||||||||||
Occupancy expenses—franchised restaurants
|
$
|
15,881
|
|
|
13,686
|
|
|
2,195
|
|
|
16.0
|
%
|
|
$
|
42,691
|
|
|
40,921
|
|
|
1,770
|
|
|
4.3
|
%
|
Cost of ice cream and other products
|
18,384
|
|
|
19,788
|
|
|
(1,404
|
)
|
|
(7.1
|
)%
|
|
58,445
|
|
|
58,010
|
|
|
435
|
|
|
0.7
|
%
|
||
Company-operated restaurant expenses
|
1,682
|
|
|
7,697
|
|
|
(6,015
|
)
|
|
(78.1
|
)%
|
|
13,472
|
|
|
22,312
|
|
|
(8,840
|
)
|
|
(39.6
|
)%
|
||
General and administrative expenses, net
|
59,374
|
|
|
61,433
|
|
|
(2,059
|
)
|
|
(3.4
|
)%
|
|
184,028
|
|
|
187,622
|
|
|
(3,594
|
)
|
|
(1.9
|
)%
|
||
Depreciation and amortization
|
10,447
|
|
|
11,338
|
|
|
(891
|
)
|
|
(7.9
|
)%
|
|
32,087
|
|
|
33,820
|
|
|
(1,733
|
)
|
|
(5.1
|
)%
|
||
Long-lived asset impairment charges
|
7
|
|
|
—
|
|
|
7
|
|
|
n/m
|
|
|
104
|
|
|
264
|
|
|
(160
|
)
|
|
(60.6
|
)%
|
||
Total operating costs and expenses
|
$
|
105,775
|
|
|
113,942
|
|
|
(8,167
|
)
|
|
(7.2
|
)%
|
|
$
|
330,827
|
|
|
342,949
|
|
|
(12,122
|
)
|
|
(3.5
|
)%
|
Net income of equity method investments
|
5,467
|
|
|
4,059
|
|
|
1,408
|
|
|
34.7
|
%
|
|
12,148
|
|
|
10,957
|
|
|
1,191
|
|
|
10.9
|
%
|
||
Other operating income, net
|
2,569
|
|
|
(161
|
)
|
|
2,730
|
|
|
n/m
|
|
|
6,329
|
|
|
947
|
|
|
5,382
|
|
|
568.3
|
%
|
||
Operating income
|
$
|
109,360
|
|
|
99,763
|
|
|
9,597
|
|
|
9.6
|
%
|
|
$
|
300,834
|
|
|
276,091
|
|
|
24,743
|
|
|
9.0
|
%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Interest expense, net
|
$
|
24,442
|
|
|
24,700
|
|
|
(258
|
)
|
|
(1.0
|
)%
|
|
$
|
74,022
|
|
|
71,721
|
|
|
2,301
|
|
|
3.2
|
%
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
—
|
|
|
—
|
|
|
n/m
|
|
|
—
|
|
|
20,554
|
|
|
(20,554
|
)
|
|
(100.0
|
)%
|
||
Other losses, net
|
124
|
|
|
449
|
|
|
(325
|
)
|
|
(72.4
|
)%
|
|
596
|
|
|
1,006
|
|
|
(410
|
)
|
|
(40.8
|
)%
|
||
Total other expense
|
$
|
24,566
|
|
|
25,149
|
|
|
(583
|
)
|
|
(2.3
|
)%
|
|
$
|
74,618
|
|
|
93,281
|
|
|
(18,663
|
)
|
|
(20.0
|
)%
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
September 24,
2016 |
|
September 26,
2015 |
|||||
|
(In thousands, except percentages)
|
|||||||||||
Income before income taxes
|
$
|
84,794
|
|
|
74,614
|
|
|
226,216
|
|
|
182,810
|
|
Provision for income taxes
|
32,082
|
|
|
28,312
|
|
|
86,760
|
|
|
68,634
|
|
|
Effective tax rate
|
37.8
|
%
|
|
37.9
|
%
|
|
38.4
|
%
|
|
37.5
|
%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||
|
(In thousands, except percentages)
|
|
|
|
|
|
|
|
|
||||||||||||||||
Royalty income
|
$
|
113,281
|
|
|
105,864
|
|
|
7,417
|
|
|
7.0
|
%
|
|
$
|
326,835
|
|
|
307,214
|
|
|
19,621
|
|
|
6.4
|
%
|
Franchise fees
|
9,852
|
|
|
12,666
|
|
|
(2,814
|
)
|
|
(22.2
|
)%
|
|
26,257
|
|
|
29,591
|
|
|
(3,334
|
)
|
|
(11.3
|
)%
|
||
Rental income
|
25,972
|
|
|
25,290
|
|
|
682
|
|
|
2.7
|
%
|
|
73,285
|
|
|
73,584
|
|
|
(299
|
)
|
|
(0.4
|
)%
|
||
Sales at company-operated restaurants
|
1,611
|
|
|
7,293
|
|
|
(5,682
|
)
|
|
(77.9
|
)%
|
|
11,924
|
|
|
21,578
|
|
|
(9,654
|
)
|
|
(44.7
|
)%
|
||
Other revenues
|
1,709
|
|
|
3,257
|
|
|
(1,548
|
)
|
|
(47.5
|
)%
|
|
6,597
|
|
|
6,038
|
|
|
559
|
|
|
9.3
|
%
|
||
Total revenues
|
$
|
152,425
|
|
|
154,370
|
|
|
(1,945
|
)
|
|
(1.3
|
)%
|
|
$
|
444,898
|
|
|
438,005
|
|
|
6,893
|
|
|
1.6
|
%
|
Segment profit
|
$
|
119,434
|
|
|
113,197
|
|
|
6,237
|
|
|
5.5
|
%
|
|
$
|
335,963
|
|
|
315,219
|
|
|
20,744
|
|
|
6.6
|
%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
|
$
|
|
%
|
|||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Royalty income
|
$
|
4,125
|
|
|
3,762
|
|
|
363
|
|
|
9.6
|
%
|
|
$
|
12,583
|
|
|
11,640
|
|
|
943
|
|
|
8.1
|
%
|
Franchise fees
|
323
|
|
|
850
|
|
|
(527
|
)
|
|
(62.0
|
)%
|
|
3,856
|
|
|
2,707
|
|
|
1,149
|
|
|
42.4
|
%
|
||
Rental income
|
—
|
|
|
—
|
|
|
—
|
|
|
n/m
|
|
|
—
|
|
|
13
|
|
|
(13
|
)
|
|
(100.0
|
)%
|
||
Other revenues
|
1
|
|
|
14
|
|
|
(13
|
)
|
|
(92.9
|
)%
|
|
478
|
|
|
2,265
|
|
|
(1,787
|
)
|
|
(78.9
|
)%
|
||
Total revenues
|
$
|
4,449
|
|
|
4,626
|
|
|
(177
|
)
|
|
(3.8
|
)%
|
|
$
|
16,917
|
|
|
16,625
|
|
|
292
|
|
|
1.8
|
%
|
Segment profit
|
$
|
705
|
|
|
1,000
|
|
|
(295
|
)
|
|
(29.5
|
)%
|
|
$
|
6,438
|
|
|
7,217
|
|
|
(779
|
)
|
|
(10.8
|
)%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
|
$
|
|
%
|
|||||||||||||||||
|
(In thousands, except percentages)
|
|
|
|
|
|
|
|
|
||||||||||||||||
Royalty income
|
$
|
8,499
|
|
|
8,529
|
|
|
(30
|
)
|
|
(0.4
|
)%
|
|
$
|
23,546
|
|
|
23,127
|
|
|
419
|
|
|
1.8
|
%
|
Franchise fees
|
273
|
|
|
180
|
|
|
93
|
|
|
51.7
|
%
|
|
790
|
|
|
548
|
|
|
242
|
|
|
44.2
|
%
|
||
Rental income
|
787
|
|
|
667
|
|
|
120
|
|
|
18.0
|
%
|
|
2,221
|
|
|
2,244
|
|
|
(23
|
)
|
|
(1.0
|
)%
|
||
Sales of ice cream and other products
|
805
|
|
|
684
|
|
|
121
|
|
|
17.7
|
%
|
|
2,037
|
|
|
3,296
|
|
|
(1,259
|
)
|
|
(38.2
|
)%
|
||
Other revenues
|
3,417
|
|
|
3,520
|
|
|
(103
|
)
|
|
(2.9
|
)%
|
|
9,486
|
|
|
8,826
|
|
|
660
|
|
|
7.5
|
%
|
||
Total revenues
|
$
|
13,781
|
|
|
13,580
|
|
|
201
|
|
|
1.5
|
%
|
|
$
|
38,080
|
|
|
38,041
|
|
|
39
|
|
|
0.1
|
%
|
Segment profit
|
$
|
11,085
|
|
|
9,774
|
|
|
1,311
|
|
|
13.4
|
%
|
|
$
|
29,123
|
|
|
25,452
|
|
|
3,671
|
|
|
14.4
|
%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
|
September 24,
2016 |
|
September 26,
2015 |
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
|
$
|
|
%
|
|||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Royalty income
|
$
|
2,081
|
|
|
1,913
|
|
|
168
|
|
|
8.8
|
%
|
|
$
|
5,226
|
|
|
4,965
|
|
|
261
|
|
|
5.3
|
%
|
Franchise fees
|
205
|
|
|
149
|
|
|
56
|
|
|
37.6
|
%
|
|
524
|
|
|
589
|
|
|
(65
|
)
|
|
(11.0
|
)%
|
||
Rental income
|
121
|
|
|
129
|
|
|
(8
|
)
|
|
(6.2
|
)%
|
|
340
|
|
|
366
|
|
|
(26
|
)
|
|
(7.1
|
)%
|
||
Sales of ice cream and other products
|
25,340
|
|
|
28,312
|
|
|
(2,972
|
)
|
|
(10.5
|
)%
|
|
83,119
|
|
|
82,996
|
|
|
123
|
|
|
0.1
|
%
|
||
Other revenues
|
157
|
|
|
104
|
|
|
53
|
|
|
51.0
|
%
|
|
369
|
|
|
393
|
|
|
(24
|
)
|
|
(6.1
|
)%
|
||
Total revenues
|
$
|
27,904
|
|
|
30,607
|
|
|
(2,703
|
)
|
|
(8.8
|
)%
|
|
$
|
89,578
|
|
|
89,309
|
|
|
269
|
|
|
0.3
|
%
|
Segment profit
|
$
|
11,154
|
|
|
9,416
|
|
|
1,738
|
|
|
18.5
|
%
|
|
$
|
30,617
|
|
|
28,237
|
|
|
2,380
|
|
|
8.4
|
%
|
|
Nine months ended
|
|||||
|
September 24, 2016
|
|
September 26, 2015
|
|||
Net cash provided by operating activities
|
$
|
130,336
|
|
|
83,237
|
|
Plus: Decrease in cash held for advertising funds and gift card/certificate programs
|
37,511
|
|
|
29,182
|
|
|
Plus: Increase (decrease) in restricted cash
|
(1,115
|
)
|
|
65,888
|
|
|
Plus: Net cash provided by (used in) investing activities
|
4,107
|
|
|
(25,022
|
)
|
|
Free cash flow
|
$
|
170,839
|
|
|
153,285
|
|
|
September 24, 2016
|
||
Principal outstanding under Class A-2 Notes
|
$
|
2,462,500
|
|
Total capital lease obligations
|
8,037
|
|
|
Less: cash and cash equivalents
|
(270,230
|
)
|
|
Less: restricted cash, current
|
(70,734
|
)
|
|
Plus: cash held for gift card/certificate programs
|
105,368
|
|
|
Net Debt
|
$
|
2,234,941
|
|
|
Twelve months ended
|
||
|
September 24, 2016
|
||
Net income including noncontrolling interests
|
$
|
130,509
|
|
Interest expense
|
99,176
|
|
|
Income tax expense
|
114,485
|
|
|
Depreciation and amortization
|
43,511
|
|
|
Impairment charges
|
463
|
|
|
Japan joint venture impairment
|
54,300
|
|
|
EBITDA
|
442,444
|
|
|
Adjustments:
|
|
||
Share-based compensation expense
|
16,722
|
|
|
Other
(a)
|
2,080
|
|
|
Total adjustments
|
18,802
|
|
|
Adjusted EBITDA
|
$
|
461,246
|
|
(a)
|
Represents costs and fees associated with various franchisee-related investments, bank fees, legal reserves, the allocation of share-based compensation expense to the advertising funds, and other non-cash gains and losses.
|
10.1
|
|
Offer Letter to David Hoffmann dated September 19, 2016
|
|
|
|
10.2
|
|
Form of Restricted Stock Unit Award Agreement for David Hoffmann
|
|
|
|
10.3
|
|
Form of Performance Stock Unit Award Agreement for David Hoffmann
|
|
|
|
31.1
|
|
Principal Executive Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to 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 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
|
|
|
|
|
|
|
Date:
|
November 2, 2016
|
|
By:
|
|
/s/ Nigel Travis
|
|
|
|
|
|
Nigel Travis,
Chairman and Chief Executive Officer
|
Name:
|
David Hoffmann
|
Number of Restricted Stock Units:
|
[●]
|
Grant Date:
|
[●]
|
Company:
|
DUNKIN’ BRANDS GROUP, INC.
|
Participant:
|
__________________________________
|
Name:
|
David Hoffmann
|
Number of Performance Stock Units:
|
[●]
|
Grant Date:
|
[●]
|
Designated Date:
|
[3 years from Grant Date]
|
Company:
|
DUNKIN’ BRANDS GROUP, INC.
|
Participant:
|
__________________________________
|
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.
|
|
|
|
|
|
November 2, 2016
|
|
|
|
/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.
|
|
|
|
|
|
November 2, 2016
|
|
|
|
/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
|