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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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Emerging growth company
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¨
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Page
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Part I. – Financial Information
|
||
|
|
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Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
Part II. – Other Information
|
||
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Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
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||
|
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September 30,
2017 |
|
December 31,
2016 |
|||
Assets
|
|
|
|
|||
Current assets:
|
|
|
|
|||
Cash and cash equivalents
|
$
|
266,981
|
|
|
361,425
|
|
Restricted cash
|
76,141
|
|
|
69,746
|
|
|
Accounts receivable, net of allowance for doubtful accounts of $4,616 and $4,778 as of September 30, 2017 and December 31, 2016, respectively
|
47,136
|
|
|
44,512
|
|
|
Notes and other receivables, net of allowance for doubtful accounts of $500 and $339 as of September 30, 2017 and December 31, 2016, respectively
|
30,274
|
|
|
40,672
|
|
|
Restricted assets of advertising funds
|
57,873
|
|
|
40,338
|
|
|
Prepaid income taxes
|
9,843
|
|
|
20,926
|
|
|
Prepaid expenses and other current assets
|
33,605
|
|
|
28,739
|
|
|
Total current assets
|
521,853
|
|
|
606,358
|
|
|
Property and equipment, net of accumulated depreciation of $135,284 and $124,675 as of September 30, 2017 and December 31, 2016, respectively
|
170,269
|
|
|
176,662
|
|
|
Equity method investments
|
128,633
|
|
|
114,738
|
|
|
Goodwill
|
888,311
|
|
|
888,272
|
|
|
Other intangible assets, net of accumulated amortization of $245,569 and $230,364 as of September 30, 2017 and December 31, 2016, respectively
|
1,362,586
|
|
|
1,378,720
|
|
|
Other assets
|
67,674
|
|
|
62,632
|
|
|
Total assets
|
$
|
3,139,326
|
|
|
3,227,382
|
|
Liabilities and Stockholders’ Deficit
|
|
|||||
Current liabilities:
|
|
|
|
|||
Current portion of long-term debt
|
$
|
25,000
|
|
|
25,000
|
|
Capital lease obligations
|
584
|
|
|
589
|
|
|
Accounts payable
|
12,416
|
|
|
12,682
|
|
|
Liabilities of advertising funds
|
57,935
|
|
|
52,271
|
|
|
Deferred income
|
37,595
|
|
|
35,393
|
|
|
Other current liabilities
|
230,487
|
|
|
298,266
|
|
|
Total current liabilities
|
364,017
|
|
|
424,201
|
|
|
Long-term debt, net
|
2,388,091
|
|
|
2,401,998
|
|
|
Capital lease obligations
|
7,209
|
|
|
7,550
|
|
|
Unfavorable operating leases acquired
|
10,164
|
|
|
11,378
|
|
|
Deferred income
|
10,729
|
|
|
12,154
|
|
|
Deferred income taxes, net
|
459,524
|
|
|
461,810
|
|
|
Other long-term liabilities
|
73,680
|
|
|
71,549
|
|
|
Total long-term liabilities
|
2,949,397
|
|
|
2,966,439
|
|
|
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; 90,290,628 shares issued and 90,263,851 shares outstanding as of September 30, 2017; 91,464,229 shares issued and 91,437,452 shares outstanding as of December 31, 2016
|
90
|
|
|
91
|
|
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Additional paid-in capital
|
746,052
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807,492
|
|
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Treasury stock, at cost; 26,777 shares as of September 30, 2017 and December 31, 2016
|
(1,060
|
)
|
|
(1,060
|
)
|
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Accumulated deficit
|
(900,217
|
)
|
|
(945,797
|
)
|
|
Accumulated other comprehensive loss
|
(18,953
|
)
|
|
(23,984
|
)
|
|
Total stockholders’ deficit
|
(174,088
|
)
|
|
(163,258
|
)
|
|
Total liabilities and stockholders’ deficit
|
$
|
3,139,326
|
|
|
3,227,382
|
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
Revenues:
|
|
|
|
|
|
|
|
|||||
Franchise fees and royalty income
|
$
|
151,809
|
|
|
138,639
|
|
|
426,944
|
|
|
399,617
|
|
Rental income
|
27,713
|
|
|
26,880
|
|
|
79,543
|
|
|
75,874
|
|
|
Sales of ice cream and other products
|
27,551
|
|
|
26,568
|
|
|
85,710
|
|
|
86,425
|
|
|
Sales at company-operated restaurants
|
—
|
|
|
1,611
|
|
|
—
|
|
|
11,924
|
|
|
Other revenues
|
17,095
|
|
|
13,401
|
|
|
41,165
|
|
|
39,344
|
|
|
Total revenues
|
224,168
|
|
|
207,099
|
|
|
633,362
|
|
|
613,184
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|||||
Occupancy expenses—franchised restaurants
|
15,333
|
|
|
15,881
|
|
|
43,758
|
|
|
42,691
|
|
|
Cost of ice cream and other products
|
19,457
|
|
|
18,384
|
|
|
58,578
|
|
|
58,445
|
|
|
Company-operated restaurant expenses
|
—
|
|
|
1,682
|
|
|
—
|
|
|
13,472
|
|
|
General and administrative expenses, net
|
61,996
|
|
|
59,374
|
|
|
185,613
|
|
|
184,028
|
|
|
Depreciation
|
4,941
|
|
|
5,050
|
|
|
15,096
|
|
|
15,361
|
|
|
Amortization of other intangible assets
|
5,341
|
|
|
5,397
|
|
|
16,001
|
|
|
16,726
|
|
|
Long-lived asset impairment charges
|
536
|
|
|
7
|
|
|
643
|
|
|
104
|
|
|
Total operating costs and expenses
|
107,604
|
|
|
105,775
|
|
|
319,689
|
|
|
330,827
|
|
|
Net income of equity method investments
|
5,466
|
|
|
5,467
|
|
|
12,612
|
|
|
12,148
|
|
|
Other operating income, net
|
3
|
|
|
2,569
|
|
|
591
|
|
|
6,329
|
|
|
Operating income
|
122,033
|
|
|
109,360
|
|
|
326,876
|
|
|
300,834
|
|
|
Other income (expense), net:
|
|
|
|
|
|
|
|
|||||
Interest income
|
624
|
|
|
161
|
|
|
1,370
|
|
|
434
|
|
|
Interest expense
|
(24,436
|
)
|
|
(24,603
|
)
|
|
(74,192
|
)
|
|
(74,456
|
)
|
|
Other income (losses), net
|
155
|
|
|
(124
|
)
|
|
370
|
|
|
(596
|
)
|
|
Total other expense, net
|
(23,657
|
)
|
|
(24,566
|
)
|
|
(72,452
|
)
|
|
(74,618
|
)
|
|
Income before income taxes
|
98,376
|
|
|
84,794
|
|
|
254,424
|
|
|
226,216
|
|
|
Provision for income taxes
|
46,130
|
|
|
32,082
|
|
|
99,007
|
|
|
86,760
|
|
|
Net income
|
$
|
52,246
|
|
|
52,712
|
|
|
155,417
|
|
|
139,456
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
$
|
0.58
|
|
|
0.58
|
|
|
1.71
|
|
|
1.52
|
|
Common—diluted
|
0.57
|
|
|
0.57
|
|
|
1.68
|
|
|
1.51
|
|
|
Cash dividends declared per common share
|
0.32
|
|
|
0.30
|
|
|
0.97
|
|
|
0.90
|
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
Net income
|
$
|
52,246
|
|
|
52,712
|
|
|
155,417
|
|
|
139,456
|
|
Other comprehensive income (loss), net:
|
|
|
|
|
|
|
|
|||||
Effect of foreign currency translation, net of deferred tax expense (benefit) of $6 and $(59) for the three months ended September 30, 2017 and September 24, 2016, respectively, and $579 and $(488) for the nine months ended September 30, 2017 and September 24, 2016, respectively
|
(662
|
)
|
|
6,161
|
|
|
5,309
|
|
|
8,730
|
|
|
Effect of interest rate swaps, net of deferred tax benefit of $216 for each of the three months ended September 30, 2017 and September 24, 2016 and $650 for each of the nine months ended September 30, 2017 and September 24, 2016
|
(319
|
)
|
|
(319
|
)
|
|
(955
|
)
|
|
(955
|
)
|
|
Other, net
|
24
|
|
|
(27
|
)
|
|
677
|
|
|
(230
|
)
|
|
Total other comprehensive income (loss), net
|
(957
|
)
|
|
5,815
|
|
|
5,031
|
|
|
7,545
|
|
|
Comprehensive income
|
$
|
51,289
|
|
|
58,527
|
|
|
160,448
|
|
|
147,001
|
|
|
Nine months ended
|
|||||
|
September 30,
2017 |
|
September 24,
2016 |
|||
Cash flows from operating activities:
|
|
|
|
|||
Net income
|
$
|
155,417
|
|
|
139,456
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|||
Depreciation and amortization
|
31,097
|
|
|
32,087
|
|
|
Amortization of debt issuance costs
|
4,843
|
|
|
4,700
|
|
|
Deferred income taxes
|
(1,516
|
)
|
|
(5,595
|
)
|
|
Provision for bad debt
|
599
|
|
|
681
|
|
|
Share-based compensation expense
|
10,896
|
|
|
12,548
|
|
|
Net income of equity method investments
|
(12,612
|
)
|
|
(12,148
|
)
|
|
Dividends received from equity method investments
|
4,711
|
|
|
5,247
|
|
|
Gain on sale of real estate and company-operated restaurants
|
(29
|
)
|
|
(6,322
|
)
|
|
Other, net
|
(2,299
|
)
|
|
(1,554
|
)
|
|
Change in operating assets and liabilities:
|
|
|
|
|||
Accounts, notes, and other receivables, net
|
7,712
|
|
|
43,482
|
|
|
Prepaid income taxes, net
|
10,884
|
|
|
6,569
|
|
|
Prepaid expenses and other current assets
|
(4,600
|
)
|
|
(3,552
|
)
|
|
Accounts payable
|
(1,501
|
)
|
|
(1,635
|
)
|
|
Other current liabilities
|
(68,274
|
)
|
|
(91,651
|
)
|
|
Liabilities of advertising funds, net
|
(11,232
|
)
|
|
896
|
|
|
Deferred income
|
722
|
|
|
3,800
|
|
|
Other, net
|
(3,289
|
)
|
|
4,250
|
|
|
Net cash provided by operating activities
|
121,529
|
|
|
131,259
|
|
|
Cash flows from investing activities:
|
|
|
|
|||
Additions to property and equipment
|
(8,998
|
)
|
|
(10,358
|
)
|
|
Proceeds from sale of real estate and company-operated restaurants
|
—
|
|
|
15,479
|
|
|
Other, net
|
(101
|
)
|
|
(1,014
|
)
|
|
Net cash provided by (used in) investing activities
|
(9,099
|
)
|
|
4,107
|
|
|
Cash flows from financing activities:
|
|
|
|
|||
Repayment of long-term debt
|
(18,750
|
)
|
|
(18,750
|
)
|
|
Payment of debt issuance and other debt-related costs
|
(312
|
)
|
|
—
|
|
|
Dividends paid on common stock
|
(87,911
|
)
|
|
(82,326
|
)
|
|
Repurchases of common stock, including accelerated share repurchases
|
(127,186
|
)
|
|
(30,000
|
)
|
|
Exercise of stock options
|
33,267
|
|
|
4,937
|
|
|
Other, net
|
(214
|
)
|
|
(690
|
)
|
|
Net cash used in financing activities
|
(201,106
|
)
|
|
(126,829
|
)
|
|
Effect of exchange rates on cash, cash equivalents, and restricted cash
|
576
|
|
|
20
|
|
|
Increase (decrease) in cash, cash equivalents, and restricted cash
|
(88,100
|
)
|
|
8,557
|
|
|
Cash, cash equivalents, and restricted cash, beginning of period
|
431,832
|
|
|
333,115
|
|
|
Cash, cash equivalents, and restricted cash, end of period
|
$
|
343,732
|
|
|
341,672
|
|
Supplemental cash flow information:
|
|
|
|
|||
Cash paid for income taxes
|
$
|
89,882
|
|
|
86,460
|
|
Cash paid for interest
|
70,038
|
|
|
70,749
|
|
|
Noncash investing activities:
|
|
|
|
|||
Property and equipment included in accounts payable and other current liabilities
|
1,919
|
|
|
1,121
|
|
|
Purchase of leaseholds in exchange for capital lease obligations
|
330
|
|
|
389
|
|
|
September 30,
2017 |
|
December 31,
2016 |
|||
Cash and cash equivalents
|
$
|
266,981
|
|
|
361,425
|
|
Restricted cash
|
76,141
|
|
|
69,746
|
|
|
Restricted cash, included in Other assets
|
610
|
|
|
661
|
|
|
Total cash, cash equivalents, and restricted cash
|
$
|
343,732
|
|
|
431,832
|
|
|
September 30, 2017
|
|
December 31, 2016
|
|||||||||
|
Significant other observable inputs (Level 2)
|
|
Total
|
|
Significant other observable inputs (Level 2)
|
|
Total
|
|||||
Assets:
|
|
|
|
|
|
|
|
|||||
Company-owned life insurance
|
$
|
10,389
|
|
|
10,389
|
|
|
9,271
|
|
|
9,271
|
|
Total assets
|
$
|
10,389
|
|
|
10,389
|
|
|
9,271
|
|
|
9,271
|
|
Liabilities:
|
|
|
|
|
|
|
|
|||||
Deferred compensation liabilities
|
$
|
12,851
|
|
|
12,851
|
|
|
11,126
|
|
|
11,126
|
|
Total liabilities
|
$
|
12,851
|
|
|
12,851
|
|
|
11,126
|
|
|
11,126
|
|
|
September 30, 2017
|
|
December 31, 2016
|
|||||||||
|
Carrying value
|
|
Estimated fair value
|
|
Carrying value
|
|
Estimated fair value
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|||||
Long-term debt
|
$
|
2,413,091
|
|
|
2,474,291
|
|
|
2,426,998
|
|
|
2,460,544
|
|
•
|
On a prospective basis, as required, the Company recorded excess tax benefits of
$524 thousand
and
$7.3 million
to the provision for income taxes in the consolidated statements of operations for the
three and nine months ended
September 30, 2017
, respectively, instead of additional paid-in capital in the consolidated balance sheets. As a result, net income increased
$524 thousand
and
$7.3 million
, for the
three and nine months ended
September 30, 2017
, respectively, and basic and diluted earnings per share increased
$0.01
and
$0.08
for the
three and nine months ended
September 30, 2017
, respectively.
|
•
|
Excess tax benefits are presented as operating cash inflows instead of financing cash inflows in the consolidated statements of cash flows, which the Company elected to apply on a retrospective basis. As a result, the Company classified
$7.3 million
and
$2.0 million
for the nine months ended
September 30, 2017
and
September 24, 2016
, respectively, of excess tax benefits as operating cash inflows included within the change in prepaid income taxes, net in the consolidated statements of cash flows. The retrospective reclassification resulted in increases in cash provided by operating activities and cash used in financing activities of
$2.0 million
for the
nine months ended
September 24, 2016
.
|
•
|
The Company prospectively excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share under the treasury stock method, which did not have a material impact on diluted earnings per share for the three and nine months ended September 30, 2017.
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
Royalty income
|
$
|
133,740
|
|
|
127,986
|
|
|
387,634
|
|
|
368,190
|
|
Initial franchise fees and renewal income
|
18,069
|
|
|
10,653
|
|
|
39,310
|
|
|
31,427
|
|
|
Total franchise fees and royalty income
|
$
|
151,809
|
|
|
138,639
|
|
|
426,944
|
|
|
399,617
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
||||
Systemwide points of distribution:
|
|
|
|
|
|
|
|
||||
Franchised points of distribution in operation—beginning of period
|
20,242
|
|
|
19,640
|
|
|
20,080
|
|
|
19,308
|
|
Franchised points of distribution—opened
|
326
|
|
|
310
|
|
|
928
|
|
|
988
|
|
Franchised points of distribution—closed
|
(189
|
)
|
|
(195
|
)
|
|
(629
|
)
|
|
(563
|
)
|
Net transfers from company-operated points of distribution
|
—
|
|
|
23
|
|
|
—
|
|
|
45
|
|
Franchised points of distribution in operation—end of period
|
20,379
|
|
|
19,778
|
|
|
20,379
|
|
|
19,778
|
|
Company-operated points of distribution—end of period
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
Total systemwide points of distribution—end of period
|
20,379
|
|
|
19,784
|
|
|
20,379
|
|
|
19,784
|
|
|
September 30,
2017 |
|
December 31,
2016 |
|||
Gift card/certificate liability
|
$
|
142,020
|
|
|
207,628
|
|
Gift card breakage liability
|
2,668
|
|
|
13,301
|
|
|
Accrued payroll and benefits
|
29,120
|
|
|
25,071
|
|
|
Accrued legal liabilities (see
note 9
(c))
|
6,342
|
|
|
5,555
|
|
|
Accrued interest
|
10,621
|
|
|
10,702
|
|
|
Accrued professional costs
|
3,012
|
|
|
2,170
|
|
|
Franchisee profit-sharing liability
|
8,497
|
|
|
11,083
|
|
|
Other
|
28,207
|
|
|
22,756
|
|
|
Total other current liabilities
|
$
|
230,487
|
|
|
298,266
|
|
|
Revenues
|
|||||||||||
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
Dunkin’ Donuts U.S.
|
$
|
165,106
|
|
|
152,425
|
|
|
464,148
|
|
|
444,898
|
|
Dunkin’ Donuts International
|
5,157
|
|
|
4,449
|
|
|
14,947
|
|
|
16,917
|
|
|
Baskin-Robbins U.S.
|
13,751
|
|
|
13,781
|
|
|
38,645
|
|
|
38,080
|
|
|
Baskin-Robbins International
|
28,810
|
|
|
27,904
|
|
|
88,876
|
|
|
89,578
|
|
|
Total reportable segment revenues
|
212,824
|
|
|
198,559
|
|
|
606,616
|
|
|
589,473
|
|
|
Other
|
11,344
|
|
|
8,540
|
|
|
26,746
|
|
|
23,711
|
|
|
Total revenues
|
$
|
224,168
|
|
|
207,099
|
|
|
633,362
|
|
|
613,184
|
|
|
Segment profit
|
|||||||||||
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
Dunkin’ Donuts U.S.
|
$
|
129,719
|
|
|
119,434
|
|
|
360,241
|
|
|
335,963
|
|
Dunkin’ Donuts International
|
1,439
|
|
|
705
|
|
|
4,782
|
|
|
6,438
|
|
|
Baskin-Robbins U.S.
|
10,466
|
|
|
11,085
|
|
|
28,773
|
|
|
29,123
|
|
|
Baskin-Robbins International
|
11,420
|
|
|
11,154
|
|
|
31,900
|
|
|
30,617
|
|
|
Total reportable segments
|
153,044
|
|
|
142,378
|
|
|
425,696
|
|
|
402,141
|
|
|
Corporate
|
(25,134
|
)
|
|
(27,614
|
)
|
|
(82,176
|
)
|
|
(84,477
|
)
|
|
Interest expense, net
|
(23,812
|
)
|
|
(24,442
|
)
|
|
(72,822
|
)
|
|
(74,022
|
)
|
|
Amortization of other intangible assets
|
(5,341
|
)
|
|
(5,397
|
)
|
|
(16,001
|
)
|
|
(16,726
|
)
|
|
Long-lived asset impairment charges
|
(536
|
)
|
|
(7
|
)
|
|
(643
|
)
|
|
(104
|
)
|
|
Other income (losses), net
|
155
|
|
|
(124
|
)
|
|
370
|
|
|
(596
|
)
|
|
Income before income taxes
|
$
|
98,376
|
|
|
84,794
|
|
|
254,424
|
|
|
226,216
|
|
|
Net income (loss) of equity method investments
|
|||||||||||
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
Dunkin’ Donuts International
|
$
|
9
|
|
|
351
|
|
|
(68
|
)
|
|
829
|
|
Baskin-Robbins International
|
4,492
|
|
|
4,266
|
|
|
9,468
|
|
|
8,644
|
|
|
Total reportable segments
|
4,501
|
|
|
4,617
|
|
|
9,400
|
|
|
9,473
|
|
|
Other
|
965
|
|
|
850
|
|
|
3,212
|
|
|
2,675
|
|
|
Total net income of equity method investments
|
$
|
5,466
|
|
|
5,467
|
|
|
12,612
|
|
|
12,148
|
|
|
|
Total stockholders’ deficit
|
||
Balance as of December 31, 2016
|
|
$
|
(163,258
|
)
|
Net income
|
|
155,417
|
|
|
Other comprehensive income
|
|
5,031
|
|
|
Dividends paid on common stock
|
|
(87,911
|
)
|
|
Exercise of stock options
|
|
33,267
|
|
|
Repurchases of common stock
|
|
(127,186
|
)
|
|
Share-based compensation expense
|
|
10,896
|
|
|
Other, net
|
|
(344
|
)
|
|
Balance as of September 30, 2017
|
|
$
|
(174,088
|
)
|
|
Effect of foreign currency translation
|
|
Unrealized gains on interest rate swaps
|
|
Other
|
|
Accumulated other comprehensive gain (loss)
|
|||||
Balance as of December 31, 2016
|
$
|
(23,019
|
)
|
|
1,144
|
|
|
(2,109
|
)
|
|
(23,984
|
)
|
Other comprehensive income (loss), net
|
5,309
|
|
|
(955
|
)
|
|
677
|
|
|
5,031
|
|
|
Balance as of September 30, 2017
|
$
|
(17,710
|
)
|
|
189
|
|
|
(1,432
|
)
|
|
(18,953
|
)
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
Net income—basic and diluted
|
$
|
52,246
|
|
|
52,712
|
|
|
155,417
|
|
|
139,456
|
|
Weighted average number of common shares:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
90,290,361
|
|
|
91,621,553
|
|
|
91,051,458
|
|
|
91,603,653
|
|
|
Common—diluted
|
91,433,076
|
|
|
92,565,695
|
|
|
92,386,611
|
|
|
92,545,292
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
$
|
0.58
|
|
|
0.58
|
|
|
1.71
|
|
|
1.52
|
|
Common—diluted
|
0.57
|
|
|
0.57
|
|
|
1.68
|
|
|
1.51
|
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
B-R 31 Ice Cream Company., Ltd.
|
$
|
588
|
|
|
686
|
|
|
1,464
|
|
|
1,577
|
|
BR-Korea Co., Ltd.
|
1,122
|
|
|
1,192
|
|
|
3,174
|
|
|
3,053
|
|
|
|
$
|
1,710
|
|
|
1,878
|
|
|
4,638
|
|
|
4,630
|
|
Amounts and percentages may not recalculate due to rounding
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
Financial data (in thousands):
|
|
|
|
|
|
|
|
|||||
Total revenues
|
$
|
224,168
|
|
|
207,099
|
|
|
633,362
|
|
|
613,184
|
|
Operating income
|
122,033
|
|
|
109,360
|
|
|
326,876
|
|
|
300,834
|
|
|
Adjusted operating income
|
127,910
|
|
|
114,764
|
|
|
343,520
|
|
|
317,300
|
|
|
Net income
|
52,246
|
|
|
52,712
|
|
|
155,417
|
|
|
139,456
|
|
|
Adjusted net income
|
55,772
|
|
|
55,955
|
|
|
165,403
|
|
|
149,336
|
|
|
Systemwide sales (in millions):
|
|
|
|
|
|
|
|
|||||
Dunkin’ Donuts U.S.
|
$
|
2,166.3
|
|
|
2,075.3
|
|
|
6,298.4
|
|
|
5,997.5
|
|
Dunkin’ Donuts International
|
189.3
|
|
|
177.5
|
|
|
533.6
|
|
|
519.9
|
|
|
Baskin-Robbins U.S.
|
177.0
|
|
|
178.2
|
|
|
493.6
|
|
|
491.1
|
|
|
Baskin-Robbins International
|
382.2
|
|
|
390.0
|
|
|
1,021.8
|
|
|
1,006.0
|
|
|
Total systemwide sales
|
$
|
2,914.8
|
|
|
2,821.0
|
|
|
8,347.4
|
|
|
8,014.5
|
|
Systemwide sales growth
|
3.3
|
%
|
|
6.3
|
%
|
|
4.2
|
%
|
|
4.8
|
%
|
|
Comparable store sales growth (decline):
|
|
|
|
|
|
|
|
|||||
Dunkin’ Donuts U.S.
|
0.6
|
%
|
|
2.0
|
%
|
|
0.5
|
%
|
|
1.4
|
%
|
|
Dunkin’ Donuts International
|
1.3
|
%
|
|
(1.4
|
)%
|
|
(0.1
|
)%
|
|
(2.2
|
)%
|
|
Baskin-Robbins U.S.
|
(0.4
|
)%
|
|
(0.9
|
)%
|
|
(1.1
|
)%
|
|
1.1
|
%
|
|
Baskin-Robbins International
|
(4.3
|
)%
|
|
(2.9
|
)%
|
|
(1.0
|
)%
|
|
(5.5
|
)%
|
•
|
Dunkin’ Donuts U.S. systemwide sales growth of
4.4%
and
5.0%
for the
three and nine months ended
September 30, 2017
, respectively, was primarily a result of
386
net new restaurants opened since
September 24, 2016
and comparable store sales growth of
0.6%
and
0.5%
, respectively. The increases in comparable store sales were driven by increased average ticket, offset by a decline in traffic. Growth was primarily driven by sales of breakfast sandwiches. Beverage sales increased slightly for the three months ended
September 30, 2017
, led by hot coffee and espresso, offset by a decline in frozen beverages, while beverage sales decreased slightly for the nine months ended
September 30, 2017
due primarily to a decline in hot coffee, offset by an increase in iced coffee, driven by Cold Brew sales.
|
•
|
Dunkin’ Donuts International systemwide sales growth of
6.7%
and
2.6%
for the
three and nine months ended
September 30, 2017
, respectively, was primarily due to sales growth in Southeast Asia, the Middle East, South
|
•
|
Baskin-Robbins U.S. systemwide sales decline of
0.7%
for the
three months ended
September 30, 2017
was primarily a result of comparable store sales declines of
0.4%
for the
three months ended
September 30, 2017
driven by decreases in sales of sundaes, desserts, and beverages, offset by an increase in take-home products. Systemwide sales growth of
0.5%
for the
nine months ended
September 30, 2017
was driven by the addition of
29
net new restaurants opened since
September 24, 2016
, offset by comparable sales decline of
1.1%
. For the nine months ended
September 30, 2017
, sales of cups and cones, desserts, and beverages decreased, offset by increased sales in take-home products. For the three and nine months ended
September 30, 2017
, traffic declined and average ticket increased.
|
•
|
Baskin-Robbins International systemwide sales decline of
2.0%
for the
three months ended
September 30, 2017
was driven by sales declines in South Korea and Japan, offset by growth in the Middle East and Southeast Asia. Systemwide sales growth of
1.6%
for the
nine months ended
September 30, 2017
was driven by growth in South Korea, Southeast Asia, India, and Canada, offset by declines in Japan, China, Europe, and the Middle East. Sales in Japan were negatively impacted by foreign exchange rates for both the three- and nine-month periods, while sales in South Korea were positively impacted by foreign exchange rates for the nine-month period. On a constant currency basis, systemwide sales increased by approximately 1% and 2% for the
three and nine months ended
September 30, 2017
, respectively. Baskin-Robbins International comparable store sales declines of
4.3%
and
1.0%
for the
three and nine months ended
September 30, 2017
was driven primarily by declines in the Middle East. Also contributing to the decline in comparable store sales for the
three months ended
September 30, 2017
was a decline in South Korea.
|
|
September 30,
2017 |
|
September 24,
2016 |
||
Points of distribution, at period end:
|
|
|
|
||
Dunkin’ Donuts U.S.
|
9,015
|
|
|
8,629
|
|
Dunkin’ Donuts International
|
3,420
|
|
|
3,379
|
|
Baskin-Robbins U.S.
|
2,562
|
|
|
2,533
|
|
Baskin-Robbins International
|
5,382
|
|
|
5,243
|
|
Consolidated global points of distribution
|
20,379
|
|
|
19,784
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
||||
Net openings (closings) during the period:
|
|
|
|
|
|
|
|
||||
Dunkin’ Donuts U.S.
|
67
|
|
|
56
|
|
|
187
|
|
|
198
|
|
Dunkin’ Donuts International
|
18
|
|
|
11
|
|
|
(10
|
)
|
|
60
|
|
Baskin-Robbins U.S.
|
11
|
|
|
3
|
|
|
24
|
|
|
4
|
|
Baskin-Robbins International
|
41
|
|
|
45
|
|
|
98
|
|
|
165
|
|
Consolidated global net openings
|
137
|
|
|
115
|
|
|
299
|
|
|
427
|
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
|
(In thousands)
|
|||||||||||
Operating income
|
$
|
122,033
|
|
|
109,360
|
|
|
326,876
|
|
|
300,834
|
|
Adjustments:
|
|
|
|
|
|
|
|
|||||
Amortization of other intangible assets
|
5,341
|
|
|
5,397
|
|
|
16,001
|
|
|
16,726
|
|
|
Long-lived asset impairment charges
|
536
|
|
|
7
|
|
|
643
|
|
|
104
|
|
|
Transaction-related costs
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|
Bertico and related litigation
|
—
|
|
|
—
|
|
|
—
|
|
|
(428
|
)
|
|
Adjusted operating income
|
$
|
127,910
|
|
|
114,764
|
|
|
343,520
|
|
|
317,300
|
|
Net income
|
$
|
52,246
|
|
|
52,712
|
|
|
155,417
|
|
|
139,456
|
|
Adjustments:
|
|
|
|
|
|
|
|
|||||
Amortization of other intangible assets
|
5,341
|
|
|
5,397
|
|
|
16,001
|
|
|
16,726
|
|
|
Long-lived asset impairment charges
|
536
|
|
|
7
|
|
|
643
|
|
|
104
|
|
|
Transaction-related costs
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|
Bertico and related litigation
|
—
|
|
|
—
|
|
|
—
|
|
|
(428
|
)
|
|
Tax impact of adjustments
(b)
|
(2,351
|
)
|
|
(2,161
|
)
|
|
(6,658
|
)
|
|
(6,586
|
)
|
|
Adjusted net income
|
$
|
55,772
|
|
|
55,955
|
|
|
165,403
|
|
|
149,336
|
|
(a)
|
Represents non-capitalizable costs incurred as a result of the securitized financing facility.
|
(b)
|
Tax impact of adjustments calculated at a 40% effective tax rate.
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
Earnings per share:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
$
|
0.58
|
|
|
0.58
|
|
|
1.71
|
|
|
1.52
|
|
Common—diluted
|
0.57
|
|
|
0.57
|
|
|
1.68
|
|
|
1.51
|
|
|
Diluted adjusted earnings per share
|
0.61
|
|
|
0.60
|
|
|
1.79
|
|
|
1.61
|
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
|
(In thousands, except share and per share data)
|
|||||||||||
Adjusted net income
|
$
|
55,772
|
|
|
55,955
|
|
|
165,403
|
|
|
149,336
|
|
Weighted average number of common shares—diluted
|
91,433,076
|
|
|
92,565,695
|
|
|
92,386,611
|
|
|
92,545,292
|
|
|
Diluted adjusted earnings per share
|
$
|
0.61
|
|
|
0.60
|
|
|
1.79
|
|
|
1.61
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
||||||||||||||
$
|
|
%
|
|
$
|
|
%
|
|||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Franchise fees and royalty income
|
$
|
151,809
|
|
|
138,639
|
|
|
13,170
|
|
|
9.5
|
%
|
|
$
|
426,944
|
|
|
399,617
|
|
|
27,327
|
|
|
6.8
|
%
|
Rental income
|
27,713
|
|
|
26,880
|
|
|
833
|
|
|
3.1
|
%
|
|
79,543
|
|
|
75,874
|
|
|
3,669
|
|
|
4.8
|
%
|
||
Sales of ice cream and other products
|
27,551
|
|
|
26,568
|
|
|
983
|
|
|
3.7
|
%
|
|
85,710
|
|
|
86,425
|
|
|
(715
|
)
|
|
(0.8
|
)%
|
||
Sales at company-operated restaurants
|
—
|
|
|
1,611
|
|
|
(1,611
|
)
|
|
(100.0
|
)%
|
|
—
|
|
|
11,924
|
|
|
(11,924
|
)
|
|
(100.0
|
)%
|
||
Other revenues
|
17,095
|
|
|
13,401
|
|
|
3,694
|
|
|
27.6
|
%
|
|
41,165
|
|
|
39,344
|
|
|
1,821
|
|
|
4.6
|
%
|
||
Total revenues
|
$
|
224,168
|
|
|
207,099
|
|
|
17,069
|
|
|
8.2
|
%
|
|
$
|
633,362
|
|
|
613,184
|
|
|
20,178
|
|
|
3.3
|
%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
||||||||||||||
$
|
|
%
|
|
$
|
|
%
|
|||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Occupancy expenses—franchised restaurants
|
$
|
15,333
|
|
|
15,881
|
|
|
(548
|
)
|
|
(3.5
|
)%
|
|
$
|
43,758
|
|
|
42,691
|
|
|
1,067
|
|
|
2.5
|
%
|
Cost of ice cream and other products
|
19,457
|
|
|
18,384
|
|
|
1,073
|
|
|
5.8
|
%
|
|
58,578
|
|
|
58,445
|
|
|
133
|
|
|
0.2
|
%
|
||
Company-operated restaurant expenses
|
—
|
|
|
1,682
|
|
|
(1,682
|
)
|
|
(100.0
|
)%
|
|
—
|
|
|
13,472
|
|
|
(13,472
|
)
|
|
(100.0
|
)%
|
||
General and administrative expenses, net
|
61,996
|
|
|
59,374
|
|
|
2,622
|
|
|
4.4
|
%
|
|
185,613
|
|
|
184,028
|
|
|
1,585
|
|
|
0.9
|
%
|
||
Depreciation and amortization
|
10,282
|
|
|
10,447
|
|
|
(165
|
)
|
|
(1.6
|
)%
|
|
31,097
|
|
|
32,087
|
|
|
(990
|
)
|
|
(3.1
|
)%
|
||
Long-lived asset impairment charges
|
536
|
|
|
7
|
|
|
529
|
|
|
7,557.1
|
%
|
|
643
|
|
|
104
|
|
|
539
|
|
|
518.3
|
%
|
||
Total operating costs and expenses
|
$
|
107,604
|
|
|
105,775
|
|
|
1,829
|
|
|
1.7
|
%
|
|
$
|
319,689
|
|
|
330,827
|
|
|
(11,138
|
)
|
|
(3.4
|
)%
|
Net income of equity method investments
|
5,466
|
|
|
5,467
|
|
|
(1
|
)
|
|
(0.0
|
)%
|
|
12,612
|
|
|
12,148
|
|
|
464
|
|
|
3.8
|
%
|
||
Other operating income, net
|
3
|
|
|
2,569
|
|
|
(2,566
|
)
|
|
(99.9
|
)%
|
|
591
|
|
|
6,329
|
|
|
(5,738
|
)
|
|
(90.7
|
)%
|
||
Operating income
|
$
|
122,033
|
|
|
109,360
|
|
|
12,673
|
|
|
11.6
|
%
|
|
$
|
326,876
|
|
|
300,834
|
|
|
26,042
|
|
|
8.7
|
%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Interest expense, net
|
$
|
23,812
|
|
|
24,442
|
|
|
(630
|
)
|
|
(2.6
|
)%
|
|
$
|
72,822
|
|
|
74,022
|
|
|
(1,200
|
)
|
|
(1.6
|
)%
|
Other losses (income), net
|
(155
|
)
|
|
124
|
|
|
(279
|
)
|
|
(225.0
|
)%
|
|
(370
|
)
|
|
596
|
|
|
(966
|
)
|
|
(162.1
|
)%
|
||
Total other expense
|
$
|
23,657
|
|
|
24,566
|
|
|
(909
|
)
|
|
(3.7
|
)%
|
|
$
|
72,452
|
|
|
74,618
|
|
|
(2,166
|
)
|
|
(2.9
|
)%
|
|
Three months ended
|
|
Nine months ended
|
|||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 30,
2017 |
|
September 24,
2016 |
|||||
|
(In thousands, except percentages)
|
|||||||||||
Income before income taxes
|
$
|
98,376
|
|
|
84,794
|
|
|
254,424
|
|
|
226,216
|
|
Provision for income taxes
|
46,130
|
|
|
32,082
|
|
|
99,007
|
|
|
86,760
|
|
|
Effective tax rate
|
46.9
|
%
|
|
37.8
|
%
|
|
38.9
|
%
|
|
38.4
|
%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Royalty income
|
$
|
118,831
|
|
|
113,281
|
|
|
5,550
|
|
|
4.9
|
%
|
|
$
|
345,103
|
|
|
326,835
|
|
|
18,268
|
|
|
5.6
|
%
|
Franchise fees
|
16,635
|
|
|
9,852
|
|
|
6,783
|
|
|
68.8
|
%
|
|
35,943
|
|
|
26,257
|
|
|
9,686
|
|
|
36.9
|
%
|
||
Rental income
|
26,786
|
|
|
25,972
|
|
|
814
|
|
|
3.1
|
%
|
|
76,842
|
|
|
73,285
|
|
|
3,557
|
|
|
4.9
|
%
|
||
Sales at company-operated restaurants
|
—
|
|
|
1,611
|
|
|
(1,611
|
)
|
|
(100.0
|
)%
|
|
—
|
|
|
11,924
|
|
|
(11,924
|
)
|
|
(100.0
|
)%
|
||
Other revenues
|
2,854
|
|
|
1,709
|
|
|
1,145
|
|
|
67.0
|
%
|
|
6,260
|
|
|
6,597
|
|
|
(337
|
)
|
|
(5.1
|
)%
|
||
Total revenues
|
$
|
165,106
|
|
|
152,425
|
|
|
12,681
|
|
|
8.3
|
%
|
|
$
|
464,148
|
|
|
444,898
|
|
|
19,250
|
|
|
4.3
|
%
|
Segment profit
|
$
|
129,719
|
|
|
119,434
|
|
|
10,285
|
|
|
8.6
|
%
|
|
$
|
360,241
|
|
|
335,963
|
|
|
24,278
|
|
|
7.2
|
%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
|
$
|
|
%
|
|||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Royalty income
|
$
|
4,442
|
|
|
4,125
|
|
|
317
|
|
|
7.7
|
%
|
|
$
|
13,011
|
|
|
12,583
|
|
|
428
|
|
|
3.4
|
%
|
Franchise fees
|
704
|
|
|
323
|
|
|
381
|
|
|
118.0
|
%
|
|
1,958
|
|
|
3,856
|
|
|
(1,898
|
)
|
|
(49.2
|
)%
|
||
Other revenues
|
11
|
|
|
1
|
|
|
10
|
|
|
1,000.0
|
%
|
|
(22
|
)
|
|
478
|
|
|
(500
|
)
|
|
(104.6
|
)%
|
||
Total revenues
|
$
|
5,157
|
|
|
4,449
|
|
|
708
|
|
|
15.9
|
%
|
|
$
|
14,947
|
|
|
16,917
|
|
|
(1,970
|
)
|
|
(11.6
|
)%
|
Segment profit
|
$
|
1,439
|
|
|
705
|
|
|
734
|
|
|
104.1
|
%
|
|
$
|
4,782
|
|
|
6,438
|
|
|
(1,656
|
)
|
|
(25.7
|
)%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
|
$
|
|
%
|
|||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Royalty income
|
$
|
8,501
|
|
|
8,499
|
|
|
2
|
|
|
0.0
|
%
|
|
$
|
24,265
|
|
|
23,546
|
|
|
719
|
|
|
3.1
|
%
|
Franchise fees
|
557
|
|
|
273
|
|
|
284
|
|
|
104.0
|
%
|
|
885
|
|
|
790
|
|
|
95
|
|
|
12.0
|
%
|
||
Rental income
|
798
|
|
|
787
|
|
|
11
|
|
|
1.4
|
%
|
|
2,346
|
|
|
2,221
|
|
|
125
|
|
|
5.6
|
%
|
||
Sales of ice cream and other products
|
771
|
|
|
805
|
|
|
(34
|
)
|
|
(4.2
|
)%
|
|
2,179
|
|
|
2,037
|
|
|
142
|
|
|
7.0
|
%
|
||
Other revenues
|
3,124
|
|
|
3,417
|
|
|
(293
|
)
|
|
(8.6
|
)%
|
|
8,970
|
|
|
9,486
|
|
|
(516
|
)
|
|
(5.4
|
)%
|
||
Total revenues
|
$
|
13,751
|
|
|
13,781
|
|
|
(30
|
)
|
|
(0.2
|
)%
|
|
$
|
38,645
|
|
|
38,080
|
|
|
565
|
|
|
1.5
|
%
|
Segment profit
|
$
|
10,466
|
|
|
11,085
|
|
|
(619
|
)
|
|
(5.6
|
)%
|
|
$
|
28,773
|
|
|
29,123
|
|
|
(350
|
)
|
|
(1.2
|
)%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
|
September 30,
2017 |
|
September 24,
2016 |
|
Increase (Decrease)
|
||||||||||||||
|
$
|
|
%
|
|
|
$
|
|
%
|
|||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||
Royalty income
|
$
|
1,966
|
|
|
2,081
|
|
|
(115
|
)
|
|
(5.5
|
)%
|
|
$
|
5,255
|
|
|
5,226
|
|
|
29
|
|
|
0.6
|
%
|
Franchise fees
|
173
|
|
|
205
|
|
|
(32
|
)
|
|
(15.6
|
)%
|
|
524
|
|
|
524
|
|
|
—
|
|
|
—
|
%
|
||
Rental income
|
129
|
|
|
121
|
|
|
8
|
|
|
6.6
|
%
|
|
355
|
|
|
340
|
|
|
15
|
|
|
4.4
|
%
|
||
Sales of ice cream and other products
|
26,512
|
|
|
25,340
|
|
|
1,172
|
|
|
4.6
|
%
|
|
82,602
|
|
|
83,119
|
|
|
(517
|
)
|
|
(0.6
|
)%
|
||
Other revenues
|
30
|
|
|
157
|
|
|
(127
|
)
|
|
(80.9
|
)%
|
|
140
|
|
|
369
|
|
|
(229
|
)
|
|
(62.1
|
)%
|
||
Total revenues
|
$
|
28,810
|
|
|
27,904
|
|
|
906
|
|
|
3.2
|
%
|
|
$
|
88,876
|
|
|
89,578
|
|
|
(702
|
)
|
|
(0.8
|
)%
|
Segment profit
|
$
|
11,420
|
|
|
11,154
|
|
|
266
|
|
|
2.4
|
%
|
|
$
|
31,900
|
|
|
30,617
|
|
|
1,283
|
|
|
4.2
|
%
|
|
Nine months ended
|
|||||
|
September 30,
2017 |
|
September 24,
2016 |
|||
Net cash provided by operating activities
|
$
|
121,529
|
|
|
131,259
|
|
Plus: Decrease in cash held for advertising funds and gift card/certificate programs
|
69,224
|
|
|
37,511
|
|
|
Plus (less): Net cash provided by (used in) investing activities
|
(9,099
|
)
|
|
4,107
|
|
|
Adjusted operating and investing cash flow
|
$
|
181,654
|
|
|
172,877
|
|
|
September 30, 2017
|
||
Principal outstanding under Class A-2 Notes
|
$
|
2,437,500
|
|
Total capital lease obligations
|
7,793
|
|
|
Less: cash and cash equivalents
|
(266,981
|
)
|
|
Less: restricted cash, current
|
(76,141
|
)
|
|
Plus: cash held for gift card/certificate programs
|
106,768
|
|
|
Net Debt
|
$
|
2,208,939
|
|
|
Twelve months ended
|
||
|
September 30, 2017
|
||
Net income
|
$
|
211,537
|
|
Interest expense
|
100,588
|
|
|
Income tax expense
|
129,920
|
|
|
Depreciation and amortization
|
41,547
|
|
|
Impairment charges
|
688
|
|
|
EBITDA
|
484,280
|
|
|
Adjustments:
|
|
||
Share-based compensation expense
|
15,529
|
|
|
Other
(a)
|
2,266
|
|
|
Total adjustments
|
17,795
|
|
|
Adjusted EBITDA
|
$
|
502,075
|
|
(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.
|
|
|
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
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
(1)
|
||||||
07/02/17 - 07/29/17
|
|
260,444
|
|
|
$
|
52.87
|
|
|
260,444
|
|
|
$
|
136,231,545
|
|
07/30/17 - 09/02/17
|
|
253,436
|
|
|
52.93
|
|
|
253,436
|
|
|
122,817,161
|
|
||
09/03/17 - 09/30/17
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122,817,161
|
|
||
Total
|
|
513,880
|
|
|
$
|
52.90
|
|
|
513,880
|
|
|
|
(1)
|
On October 25, 2017, our board of directors approved a share repurchase program of up to $650.0 million of outstanding shares of our common stock. Under the program, purchases may be made in the open market or in privately negotiated transactions from time to time subject to market conditions. The authorization is valid for a period of two years and replaces our $250.0 million share repurchase program that was approved by our board of directors on May 10, 2017 and which was set to expire two years after such approval.
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
||
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 8, 2017
|
|
By:
|
|
/s/ Nigel Travis
|
|
|
|
|
|
Nigel Travis,
Chairman and Chief Executive Officer
|
i)
|
To construe and interpret the Plan, decide all questions of eligibility and determine the amount, manner and time of payment of any benefits under the Plan;
|
ii)
|
To prescribe procedures to be followed by participants filing applications for benefits;
|
iii)
|
To prepare and distribute, in such manner as the Administrator determines to be appropriate, information explaining the Plan;
|
iv)
|
To receive from the Company and from Participants and employees such information as will be necessary for the proper administration of the Plan;
|
v)
|
To furnish the Company, upon request, such annual reports with respect to the administration of the Plan as are reasonable and appropriate;
|
vi)
|
To receive, review and keep on file (as it deems convenient and proper) reports of benefit payments by the Company and reports for disbursements of expenses directed by the Administrator;
|
vii)
|
To appoint and compensate persons to assist in the administration of the Plan and any other agents it deems advisable, including legal counsel; and
|
viii)
|
To make all appropriate filings with governmental agencies on behalf of the Plan.
|
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 8, 2017
|
|
|
|
/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 8, 2017
|
|
|
|
/s/ Katherine Jaspon
|
Date
|
|
|
|
Katherine Jaspon
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/ Katherine Jaspon
|
|
Katherine Jaspon
Chief Financial Officer
|