Dunkin’ Brands Reports First Quarter 2016 Results

CANTON, Mass., April 28, 2016 (hospitalitybusinessnews.com) — Dunkin’ Brands Group, Inc. the parent company of Dunkin’ Donuts (DD) and Baskin-Robbins (BR), today reported results for the first quarter ended March 26, 2016.

“We are encouraged by the first quarter Dunkin’ Donuts U.S. comparable store sales performance which was driven by growth in beverages and breakfast sandwiches, along with price and favorable weather,” said Dunkin’ Brands Chairman and Chief Executive Officer Nigel Travis. “Admittedly we are still in the early days of our five-part plan to drive positive Dunkin’ Donuts same-store sales, but as evidenced by the first quarter results we are beginning to make progress with our strategy which includes driving coffee innovation and culture; faster-to-market product innovation; targeted value offerings and smart pricing; increased use of digital technologies and an improved restaurant experience.”

First quarter highlights include:

  • Dunkin’ Donuts U.S. comparable store sales growth of 2.0%
  • Baskin-Robbins U.S. comparable store sales growth of 5.0%
  • Added 114 net new restaurants worldwide, including 69 net new Dunkin’ Donuts in the U.S.
  • Revenues increased 2.1%
  • Diluted EPS increased 60.0% to $0.40
  • Diluted adjusted EPS increased 10.0% to $0.44

“During the first quarter we continued to expand the national presence of the Dunkin’ Donuts brand through the addition of 69 net new restaurants in the U.S. as well as through the continued growth in sales of Dunkin’ K-Cup pods in the retail channel,” said Paul Carbone, Chief Financial Officer, Dunkin’ Brands Group, Inc. “As we approach the first anniversary of the launch of Dunkin’ K-Cup pods into the retail channel, we expect that Dunkin’ Donuts K-Cup pods will be one of the most successful new grocery products in recent history and we have now exceeded the half-billion dollar annual retail sales threshold for Dunkin’ Donuts coffee products in total.”

FIRST QUARTER 2016 KEY FINANCIAL HIGHLIGHTS

($ in millions, except per share data)

Three months ended

Increase (Decrease)

Amounts and percentages may not recalculate due to rounding

March 26,
2016

March 28,
2015

$ / #

%

Systemwide sales1

$

2,418.6

2,317.6

101.0

4.4

%

Comparable store sales growth (decline):

DD U.S.2

2.0

%

2.7

%

BR U.S.2

5.0

%

8.6

%

DD International

(2.3)

%

1.7

%

BR International

(8.2)

%

0.3

%

Development data:

Consolidated global net POD development3

114

79

35

44.3

%

DD global PODs at period end

11,833

11,367

466

4.1

%

BR global PODs at period end

7,638

7,574

64

0.8

%

Consolidated global PODs at period end

19,471

18,941

530

2.8

%

Financial data:

Revenues

$

189.8

185.9

3.9

2.1

%

Operating income

85.3

83.7

1.6

1.9

%

Operating income margin

45.0

%

45.0

%

Adjusted operating income4

$

91.2

87.6

3.6

4.2

%

Adjusted operating income margin4

48.1

%

47.1

%

Net income

$

37.2

25.6

11.5

45.0

%

Adjusted net income4

40.7

40.3

0.4

1.0

%

Earnings per share:

Common–basic

0.41

0.26

0.15

57.7

%

Common–diluted

0.40

0.25

0.15

60.0

%

Diluted adjusted earnings per share4

0.44

0.40

0.04

10.0

%

Weighted average number of common shares – diluted (in millions)

92.6

101.5

(8.9)

(8.8)

%

1 Systemwide sales include sales at franchisee- and company-operated restaurants, including joint ventures. While we do not record sales by franchisees or licensees as revenue and such sales are not included in our consolidated financial statements, we believe that this operating measure is important in obtaining an understanding of our financial performance. We believe systemwide sales information aids in understanding how we derive royalty revenue and in evaluating our performance relative to competitors. 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. Prior period amounts have been revised to reflect the change from franchisee-reported sales to systemwide sales.

2 Comparable store sales growth for DD U.S. and BR U.S. for the three months ended March 28, 2015 have been revised to include only those restaurants that have been open at least 78 weeks (approximately 18 months) to conform to the current period calculation, whereas previously reported figures included only those restaurants that were open at least 54 weeks (approximately 12 months). Please refer to “Non-GAAP Measures and Statistical Data” for further detail.

3 Consolidated global net POD development reflects the previously-announced closing of 2 self-serve coffee stations within Speedway locations.

4 Adjusted operating income, adjusted operating income margin, and adjusted net income are non-GAAP measures reflecting operating income and net income adjusted for amortization of intangible assets, long-lived asset impairments, and other non-recurring, infrequent, or unusual charges, net of the tax impact of such adjustments in the case of adjusted net income. Diluted adjusted earnings per share is a non-GAAP measure calculated using adjusted net income. Please refer to “Non-GAAP Measures and Statistical Data” and “Dunkin’ Brands Group, Inc. Non-GAAP Reconciliations” for further detail.

Global systemwide sales growth in the first quarter was primarily attributable to global store development and Dunkin’ Donuts U.S. comparable store sales growth (which includes stores open 78 weeks or more).

Dunkin’ Donuts U.S. comparable store sales growth in the first quarter was driven by increased average ticket and traffic.  Growth was driven by strong beverage sales, led by iced coffee and hot and iced espresso-based beverages, and breakfast sandwiches, led by the limited-time-offer GranDDe Burrito and the return of the Chicken Apple Sausage breakfast sandwich.  The in-restaurant K-Cup and packaged coffee categories had a negative 80 basis point impact on first quarter comparable store sales. We estimate that weather resulted in approximately 90 basis points of positive impact in the quarter.

Baskin-Robbins U.S. comparable store sales growth was driven by increased sales of cups and cones, beverages, desserts, sundaes, and cakes.  Comparable store sales growth was driven primarily by traffic. We estimate that weather resulted in approximately 300 basis points of positive impact in the quarter.

In the first quarter, Dunkin’ Brands franchisees and licensees opened 114 net new restaurants around the globe. This included 69 net new Dunkin’ Donuts U.S. locations (including the closing of 2 Speedway self-serve coffee stations), 42 net new Baskin-Robbins International locations, 14 net new Dunkin’ Donuts International locations, and 11 net closures for Baskin-Robbins U.S.  Additionally, Dunkin’ Donuts U.S. franchisees remodeled 90 restaurants and Baskin-Robbins U.S. franchisees remodeled 35 restaurants during the quarter.

Revenues for the first quarter increased 2.1% compared to the prior year period due primarily to increased royalty income as a result of systemwide sales growth and an increase in sales of ice cream and other products. These increases in revenues were offset by a decrease in other revenues due primarily to a one-time upfront license fee recognized in connection with the Dunkin’ K-Cup® pod licensing agreement in the first quarter of 2015.

Operating income and adjusted operating income for the first quarter increased $1.6 million, or 1.9%, and $3.6 million, or 4.2%, respectively, from the prior year period primarily as a result of the increase in royalty income, as well as an increase in franchise income and a gain recognized in connection with the sale of real estate, offset by the decrease in other revenues due primarily to a one-time upfront license fee recognized in connection with the Dunkin’ K-Cup® pod licensing agreement in the first quarter of 2015. Operating income in the prior year period was also favorably impacted by a reduction in legal reserves.

Net income for the first quarter increased by $11.5 million, or 45.0%, compared to the prior year period primarily as a result of the $20.6 million loss on debt extinguishment and refinancing transactions recorded in the prior year period, as well as the $1.6 million increase in operating income, offset by a $7.9 million increase in income tax expense and additional interest expense of $2.7 million, driven by additional borrowings incurred in conjunction with the securitization refinancing transaction completed in January 2015.

Adjusted net income for the first quarter increased by $0.4 million, or 1.0%, compared to the prior year period primarily as a result of the $3.6 million increase in adjusted operating income, offset by increases in interest expense and income tax expense.

Diluted earnings per share increased by 60.0% to $0.40 for the first quarter compared to the prior year period as a result of the increase in net income, as well as a decrease in shares outstanding. Diluted adjusted earnings per share increased by 10.0% to $0.44 for the first quarter compared to the prior year period as a result of the decrease in shares outstanding, as well as the increase in adjusted net income. The decrease in shares outstanding from the prior year period is due primarily to the repurchase of shares, offset by the exercise of stock options.

FIRST QUARTER 2016 SEGMENT RESULTS

Beginning in the first quarter of fiscal year 2016, certain segment profit amounts in the tables below have been reclassified as a result of the realignment of our organizational structure to better support our segment operations, including the allocation of previously unallocated costs. Additionally, revenues, segment profit, points of distribution information, and 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. Prior period amounts in the tables below have been revised to reflect these changes for all periods presented.

Amounts and percentages may not recalculate due to rounding

Three months ended

Increase (Decrease)

Dunkin’ Donuts U.S.

March 26,
2016

March 28,
2015

$ / #

%

($ in thousands except as otherwise noted)

Comparable store sales growth1

2.0

%

2.7

%

Systemwide sales (in millions)2

$

1,865.3

1,750.8

114.5

6.5

%

Revenues:

Royalty income

$

101,523

95,007

6,516

6.9

%

Franchise fees

7,068

8,264

(1,196)

(14.5)

%

Rental income

22,385

22,681

(296)

(1.3)

%

Sales at company-operated restaurants

5,670

6,558

(888)

(13.5)

%

Other revenues

2,167

1,357

810

59.7

%

Total revenues

$

138,813

133,867

4,946

3.7

%

Segment profit

$

100,444

93,714

6,730

7.2

%

Points of distribution

8,500

8,160

340

4.2

%

Gross openings

93

101

(8)

(7.9)

%

Net openings3

69

78

(9)

(11.5)

%

1 Comparable store sales growth for the three months ended March 28, 2015 have been revised to include only those restaurants that have been open at least 78 weeks (approximately 18 months) to conform to the current period calculation. Please refer to “Non-GAAP Measures and Statistical Data” for further detail.

2 Systemwide sales include sales at franchisee- and company-operated restaurants, including joint ventures. We do not record sales by franchisees or licensees as revenue and such sales are not included in our consolidated financial statements. Please refer to “Non-GAAP Measures and Statistical Data” for further detail. 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. Prior period amounts have been revised to reflect the change from franchisee-reported sales to systemwide sales.

3 Net openings reflects the previously-announced closing of 2 self-serve coffee stations within Speedway locations.

Dunkin’ Donuts U.S. first quarter revenues of $138.8 million represented an increase of 3.7% over the prior year period. The increase was primarily a result of increased royalty income due to an increase in systemwide sales, as well as an increase in other revenues driven primarily by an increase in transfer fee income. These increases in revenues were offset by a decrease in franchise fees due to a decrease in gross openings and unfavorable development mix, as well as a decrease in renewal income. Also offsetting the increases in revenues was a decrease in sales at company-operated restaurants driven by a net decrease in the number of company-operated restaurants.

Dunkin’ Donuts U.S. segment profit in the first quarter increased $6.7 million over the prior year period to $100.4 million, which was driven primarily by growth in royalty income, an increase in other operating income due to a gain recognized in connection with the sale of real estate, and an increase in other revenues. These increases were offset by a decrease in franchise fees and a recovery of bad debt in the prior year period.

Amounts and percentages may not recalculate due to rounding

Three months ended

Increase (Decrease)

Dunkin’ Donuts International

March 26,
2016

March 28,
2015

$ / #

%

($ in thousands except as otherwise noted)

Comparable store sales growth (decline)

(2.3)

%

1.7

%

Systemwide sales (in millions)1

$

167.5

168.2

(0.7)

(0.4)

%

Revenues:

Royalty income

$

4,240

3,791

449

11.8

%

Franchise fees

2,890

523

2,367

452.6

%

Rental income

8

(8)

(100.0)

%

Other revenues

120

2,256

(2,136)

(94.7)

%

Total revenues

$

7,250

6,578

672

10.2

%

Segment profit

$

3,758

3,674

84

2.3

%

Points of distribution

3,333

3,207

126

3.9

%

Gross openings

85

83

2

2.4

%

Net openings (closings)

14

(21)

35

n/m

1 Systemwide sales include sales at franchisee- and company-operated restaurants, including joint ventures. We do not record sales by franchisees or licensees as revenue and such sales are not included in our consolidated financial statements. Please refer to “Non-GAAP Measures and Statistical Data” for further detail.

Dunkin’ Donuts International first quarter systemwide sales decreased 0.4% from the prior year period. Sales declines in South Korea were offset by sales growth in Europe and the Middle East. Sales in South Korea, Asia, and South America were negatively impacted by unfavorable foreign exchange rates. On a constant currency basis, systemwide sales increased by approximately 7%.

Dunkin’ Donuts International first quarter revenues of $7.3 million represented an increase of 10.2% over the prior year period. The increase in revenues were primarily a result of increased franchise fees due to development in new markets, as well as an increase in royalty income, offset by a decline in other revenues due to revenue recorded in the prior year period in connection with a settlement reached with a master licensee.

Segment profit for Dunkin’ Donuts International increased $0.1 million to $3.8 million in the first quarter primarily as a result of revenue growth, offset by an increase in general and administrative expenses driven primarily by increased personnel costs and an increase in bad debt expense.

Amounts and percentages may not recalculate due to rounding

Three months ended

Increase (Decrease)

Baskin-Robbins U.S.

March 26,
2016

March 28,
2015

$ / #

%

($ in thousands except as otherwise noted)

Comparable store sales growth1

5.0

%

8.6

%

Systemwide sales (in millions)2

$

129.9

123.1

6.8

5.6

%

Revenues:

Royalty income

$

6,223

5,916

307

5.2

%

Franchise fees

346

220

126

57.3

%

Rental income

713

799

(86)

(10.8)

%

Sales of ice cream and other products

571

1,319

(748)

(56.7)

%

Other revenues

2,708

2,055

653

31.8

%

Total revenues

$

10,561

10,309

252

2.4

%

Segment profit

$

7,300

6,088

1,212

19.9

%

Points of distribution

2,518

2,526

(8)

(0.3)

%

Gross openings

10

13

(3)

(23.1)

%

Net closings

(11)

(3)

(8)

266.7

%

1 Comparable store sales growth for the three months ended March 28, 2015 have been revised to include only those restaurants that have been open at least 78 weeks (approximately 18 months) to conform to the current period calculation. Please refer to “Non-GAAP Measures and Statistical Data” for further detail.

2 Systemwide sales include sales at franchisee- and company-operated restaurants, including joint ventures. We do not record sales by franchisees or licensees as revenue and such sales are not included in our consolidated financial statements. Please refer to “Non-GAAP Measures and Statistical Data” for further detail. Prior period amounts have been revised to reflect the change from franchisee-reported sales to systemwide sales. Additionally, the prior period has been revised to reflect a reclassification of systemwide sales generated in Puerto Rico from Baskin-Robbins International to Baskin-Robbins U.S.

Baskin-Robbins U.S. first quarter revenue increased 2.4% from the prior year period to $10.6 million due primarily to an increase in other revenues, driven by an increase in licensing income, and increases in royalty income and franchise fees, offset by a decrease in sales of ice cream and other products. The fluctuations in licensing income and sales of ice cream and other products can be attributed to a shift in certain franchisees now purchasing ice cream directly from our third-party ice cream manufacturer.

Segment profit for Baskin-Robbins U.S. increased $1.2 million in the first quarter, or 19.9%, over the prior year period primarily as a result of the increases in other revenues, royalty income, and franchise fees.

Amounts and percentages may not recalculate due to rounding

Three months ended

Increase (Decrease)

Baskin-Robbins International

March 26,
2016

March 28,
2015

$ / #

%

($ in thousands except as otherwise noted)

Comparable store sales (decline) growth

(8.2)

%

0.3

%

Systemwide sales (in millions)1

$

255.9

275.6

(19.7)

(7.1)

%

Revenues:

Royalty income

$

1,380

1,407

(27)

(1.9)

%

Franchise fees

113

197

(84)

(42.6)

%

Rental income

106

118

(12)

(10.2)

%

Sales of ice cream and other products

25,063

21,222

3,841

18.1

%

Other revenues

172

186

(14)

(7.5)

%

Total revenues

$

26,834

23,130

3,704

16.0

%

Segment profit

$

8,384

7,057

1,327

18.8

%

Points of distribution

5,120

5,048

72

1.4

%

Gross openings

115

101

14

13.9

%

Net openings

42

25

17

68.0

%

1 Systemwide sales include sales at franchisee- and company-operated restaurants, including joint ventures. We do not record sales by franchisees or licensees as revenue and such sales are not included in our consolidated financial statements. Please refer to “Non-GAAP Measures and Statistical Data” for further detail. The prior period has been revised to reflect a reclassification of systemwide sales generated in Puerto Rico from Baskin-Robbins International to Baskin-Robbins U.S.

Baskin-Robbins International systemwide sales decreased 7.1% in the first quarter compared to the prior year period driven by sales declines in South Korea and the Middle East, offset by sales growth in Japan and Europe. Sales in South Korea were also negatively impacted by unfavorable foreign exchange rates. On a constant currency basis, systemwide sales decreased by approximately 3%.

Baskin-Robbins International first quarter revenues increased 16.0% over the prior year period to $26.8 million due primarily to an increase in sales of ice cream and other products to the Middle East. Systemwide sales and sales of ice cream and other products are not directly correlated within a given period due to the lag between shipment of products to licensees and retail sales at franchised restaurants, as well as the overall timing of deliveries between fiscal quarters.

First quarter segment profit increased 18.8% from the prior year period to $8.4 million as a result of an increase in net margin on ice cream driven primarily by increases in sales volume and pricing, as well as a decrease in bad debt expense. These increases in segment profit were offset by a decrease in net income from our South Korea joint venture.

COMPANY UPDATES

  • The Company today announced that Paul Twohig, President, Dunkin’ Donuts U.S. and Canada, has decided to retire at the end of the first quarter of 2017. The Company plans to name a successor before the end of the year and is currently conducting a search which will consider both internal and external candidates. Mr. Twohig will remain in his current position, with responsibility for Dunkin’ Donuts U.S. and Canada operations as well as global franchising and store development for both Dunkin’ Donuts and Baskin-Robbins, until a successor is appointed and after that will remain actively involved with the Company until he retires next year. The Company also announced the promotions of Chris Fuqua to Senior Vice President, Dunkin’ Donuts Brand Marketing, Global Consumer Insights & Product Innovation, and Scott Hudler to Chief Digital Officer.
  • The Company today announced that the Board of Directors declared a second quarter cash dividend of $0.30 per share, payable on June 8, 2016 to shareholders of record as of the close of business on May 31, 2016.
  • During the first quarter, the Company received nearly 500,000 shares upon final settlement of the accelerated share repurchase (“ASR”) agreement that it entered into in October 2015. Under the agreement, the Company repurchased a total of approximately 3.0 million shares at a weighted average cost per share of $41.51. Also during the first quarter, the Company entered into and completed an additional ASR agreement for $30 million, resulting in the repurchase of approximately 700,000 shares at a weighted average cost per share of $42.72.

FISCAL YEAR 2016 TARGETS

As described below, the Company is reiterating each of its targets regarding 2016 expectations.

  • The Company continues to expect Donuts U.S. comparable store sales growth of 0 to 2 percent and Baskin-Robbins U.S. comparable store sales growth of 1 to 3 percent.
  • The Company continues to expect that Dunkin’ Donuts U.S. will add between 430 and 460 net new restaurants, excluding the closure of approximately 30 Speedway self-serve coffee stations. The Company continues to expect Baskin-Robbins U.S. will add between 5 and 10 net new restaurants.
  • Internationally, the Company continues to target opening approximately 200 net new restaurants across the two brands. It continues to expect net income of equity method investments to be slightly less than 2015 full-year results.
  • The Company continues to expect revenue growth of between 4 and 6 percent; adjusted operating income growth of between 8 and 10 percent; and adjusted earnings per share of $2.20 to $2.22 on a 53-week basis.  The adjusted earnings per share range assumes 94,000,000 shares outstanding and a 38.5 percent tax rate.
  • Fiscal year 2016 is a 53-week year for the Company. The target ranges for revenue and adjusted operating income growth are applicable on both a 52- and 53-week basis. The impact of the 53rd week on adjusted earnings per share is approximately $0.03.

DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

Three months ended

March 26,
2016

March 28,
2015

Revenues:

Franchise fees and royalty income

$

123,783

115,325

Rental income

23,225

23,627

Sales of ice cream and other products(1)

25,891

23,068

Sales at company-operated restaurants

5,670

6,558

Other revenues(1)

11,207

17,327

Total revenues

189,776

185,905

Operating costs and expenses:

Occupancy expenses—franchised restaurants

13,196

13,518

Cost of ice cream and other products(1)

17,234

15,346

Company-operated restaurant expenses

6,493

6,858

General and administrative expenses, net(1)

61,195

57,840

Depreciation

5,133

5,110

Amortization of other intangible assets

5,761

6,200

Long-lived asset impairment charges

93

264

Total operating costs and expenses

109,105

105,136

Net income of equity method investments

2,964

2,947

Other operating income, net

1,698

24

Operating income

85,333

83,740

Other income (expense), net:

Interest income

149

122

Interest expense

(24,881)

(22,164)

Loss on debt extinguishment and refinancing transactions

(20,554)

Other losses, net

(370)

(545)

Total other expense, net

(25,102)

(43,141)

Income before income taxes

60,231

40,599

Provision for income taxes

23,077

15,174

Net income including noncontrolling interests

37,154

25,425

Net loss attributable to noncontrolling interests

(206)

Net income attributable to Dunkin’ Brands

$

37,154

25,631

Earnings per share—basic

$

0.41

0.26

Earnings per share—diluted

0.40

0.25

(1) Sales of products sold to Dunkin’ Donuts International franchisees that have historically been included in other revenues are now included in sales of ice cream and other products. The related costs have historically been included in general and administrative expenses, net and are now included in cost of ice cream and other products. Sales and costs from these transactions were reclassified for all prior periods presented to conform to the current period presentation.

DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

March 26,
2016

December 26,
2015

Assets

Current assets:

Cash and cash equivalents

$

223,524

260,430

Restricted cash

67,665

71,917

Accounts, notes, and other receivables, net

74,353

128,360

Other current assets

91,702

97,117

Total current assets

457,244

557,824

Property and equipment, net

180,699

182,614

Equity method investments

111,690

106,878

Goodwill and other intangible assets, net

2,284,587

2,290,796

Other assets

59,714

59,007

Total assets

$

3,093,934

3,197,119

Liabilities and Stockholders’ Deficit

Current liabilities:

Current portion of long-term debt

$

25,000

25,000

Accounts payable

15,270

18,663

Other current liabilities

299,723

375,129

Total current liabilities

339,993

418,792

Long-term debt, net

2,415,909

2,420,600

Deferred income taxes, net

471,907

476,510

Other long-term liabilities

100,717

101,960

Total long-term liabilities

2,988,533

2,999,070

Total stockholders’ deficit

(234,592)

(220,743)

Total liabilities and stockholders’ deficit

$

3,093,934

3,197,119

DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three months ended

March 26,

2016

March 28,
 2015

Net cash provided by (used in) operating activities

$

26,525

(8,980)

Cash flows from investing activities:

Additions to property and equipment

(3,184)

(6,233)

Proceeds from sale of real estate

2,645

Other, net

80

(1,499)

Net cash used in investing activities

(459)

(7,732)

Cash flows from financing activities:

Proceeds from issuance of long-term debt

2,500,000

Repayment of long-term debt

(6,250)

(1,818,971)

Payment of deferred financing and other debt-related costs

(40,953)

Dividends paid on common stock

(27,395)

(25,688)

Repurchases of common stock, including accelerated share repurchases

(30,000)

(459,821)

Exercise of stock options

1,086

1,209

Change in restricted cash

(6)

(6,900)

Other, net

(584)

538

Net cash provided by (used in) financing activities

(63,149)

149,414

Effect of exchange rates on cash and cash equivalents

177

(389)

Increase (decrease) in cash and cash equivalents

(36,906)

132,313

Cash and cash equivalents, beginning of period

260,430

208,080

Cash and cash equivalents, end of period

$

223,524

340,393

DUNKIN’ BRANDS GROUP, INC. AND SUBSIDIARIES

Non-GAAP Reconciliations

(In thousands, except share and per share data)

(Unaudited)

Three months ended

March 26,
2016

March 28,
2015

Operating income

$

85,333

83,740

Operating income margin

45.0

%

45.0

%

Adjustments:

Amortization of other intangible assets

$

5,761

6,200

Long-lived asset impairment charges

93

264

Transaction-related costs(a)

55

154

Bertico and related litigation(b)

(2,753)

Adjusted operating income

$

91,242

87,605

Adjusted operating income margin

48.1

%

47.1

%

Net income attributable to Dunkin’ Brands

$

37,154

25,631

Adjustments:

Amortization of other intangible assets

5,761

6,200

Long-lived asset impairment charges

93

264

Transaction-related costs(a)

55

154

Bertico and related litigation(b)

(2,753)

Loss on debt extinguishment and refinancing transactions

20,554

Tax impact of adjustments(c)

(2,364)

(9,768)

Adjusted net income

$

40,699

40,282

Adjusted net income

$

40,699

40,282

Weighted average number of common shares – diluted

92,618,269

101,502,438

Diluted adjusted earnings per share

$

0.44

0.40

Share Button
About the Author