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Dominos Pizza Inc (DPZ) SEC Filing 8-K Material Event for the period ending Thursday, July 21, 2022

Dominos Pizza Inc

CIK: 1286681 Ticker: DPZ

 

Exhibit 99.1

img153816887_0.jpg 

For Immediate Release

Contact: Ryan Goers

VP - Finance & IR

(734) 930-3925

Domino’s Pizza® Announces Second Quarter 2022 Financial Results

Global retail sales growth (excluding foreign currency impact) of 1.5%

U.S. same store sales decline of 2.9%

International same store sales decline (excluding foreign currency impact) of 2.2%

Global net store growth of 233

Diluted EPS down 7.8% to $2.82

ANN ARBOR, Michigan, July 21, 2022: Domino’s Pizza, Inc. (NYSE: DPZ), the largest pizza company in the world, announced results for the second quarter of 2022. Global retail sales, excluding the negative impact of foreign currency, grew 1.5% in the second quarter of 2022. Without adjusting for the impact of foreign currency, global retail sales declined 3.0% in the second quarter of 2022.

 

U.S. same store sales declined 2.9% and international same store sales (excluding foreign currency impact) declined 2.2% during the second quarter of 2022. The decline in international same store sales (excluding foreign currency impact) was driven in part by a value added tax holiday in the United Kingdom in the second quarter of 2021 that did not recur in the second quarter of 2022. The Company had second quarter global net store growth of 233 stores, comprised of 22 net U.S. store openings and 211 net international store openings.

 

Diluted EPS for the second quarter of 2022 was $2.82, a decrease of 7.8% from diluted EPS of $3.06 in the second quarter of 2021. Diluted EPS for the second quarter of 2021 was negatively impacted by expenses associated with the Company’s April 2021 recapitalization transaction (the “2021 Recapitalization”). Diluted EPS for the second quarter of 2022 decreased 9.6% from diluted EPS, as adjusted, of $3.12 in the second quarter of 2021. Refer to the Financial Results Comparability and the Comments on Regulation G sections below for additional information.

 

Subsequent to the end of the second quarter of 2022, on July 19, 2022, the Company’s Board of Directors declared a $1.10 per share quarterly dividend on its outstanding common stock for shareholders of record as of September 15, 2022 to be paid on September 30, 2022.

 

“Our results for the quarter faced challenges consistent to those I outlined back in April. We continued to navigate a difficult labor market, especially for delivery drivers, in addition to inflationary pressures combined with COVID and stimulus-fueled sales comps from the prior two years in the U.S.,” said Russell Weiner, Domino’s Chief Executive Officer. “However, the strength of our franchisees and team members, along with the strategies we are putting into place, make me confident we are on a path to overcome these short-term obstacles and make the Domino’s brand and business stronger than ever.”

 

Second Quarter Highlights (Unaudited):

 

(in millions, except share and per share data)

 

Second
Quarter of
2022

 

 

Second
Quarter of
2021

 

 

Two Fiscal
Quarters of
2022

 

 

Two Fiscal
Quarters of
2021

 

Net income

 

$

102.5

 

 

$

116.6

 

 

$

193.5

 

 

$

234.4

 

Weighted average diluted shares

 

 

36,296,277

 

 

 

38,122,515

 

 

 

36,368,297

 

 

 

38,665,325

 

Diluted EPS

 

$

2.82

 

 

$

3.06

 

 

$

5.32

 

 

$

6.06

 

Items affecting comparability (1)

 

 

 

 

 

0.06

 

 

 

 

 

 

0.06

 

Diluted EPS, as adjusted (1)

 

$

2.82

 

 

$

3.12

 

 

$

5.32

 

 

$

6.12

 

 

(1)

 

Refer to the Financial Results Comparability and the Comments on Regulation G sections below for additional information.

 

 


 

Revenues increased $32.7 million, or 3.2%, in the second quarter of 2022 as compared to the second quarter of 2021, due primarily to higher supply chain revenues attributable to increases in market basket pricing to stores, partially offset by lower supply chain volumes. The Company’s market basket pricing to stores increased 15.2% during the second quarter of 2022 over the second quarter of 2021. The increase in revenues was partially offset by lower U.S. stores and international franchise revenues. The decline in U.S. stores revenue was driven by a 0.6% decline in U.S. retail sales. Although international franchise retail sales (excluding foreign currency impact) increased 3.7%, the resulting increase in international franchise revenues was more than offset by the negative impact of changes in foreign currency exchange rates of approximately $5.9 million.
Income from Operations decreased $12.8 million, or 6.7%, in the second quarter of 2022 as compared to the second quarter of 2021, primarily due to lower U.S. Company-owned store and supply chain gross margins. These decreases were partially offset by lower general and administrative expenses.
Net Income decreased $14.1 million, or 12.1%, in the second quarter of 2022 as compared to the second quarter of 2021. This decrease was driven by lower income from operations and a higher provision for income taxes, partially offset by lower net interest expense. Provision for income taxes increased $2.5 million in the second quarter of 2022 due to a higher effective tax rate. The effective tax rate increased to 23.2% during the second quarter of 2022 as compared to 19.6% in the second quarter of 2021, driven primarily by a 2.2 percentage point change in the impact of excess tax benefits from equity-based compensation, which are recorded as a reduction to the income tax provision, as well as lower foreign tax credits. Net interest expense decreased $1.2 million in the second quarter of 2022, primarily due to approximately $2.3 million of incremental interest expense recorded in the second quarter of 2021 as part of the 2021 Recapitalization (see the Financial Results Comparability section below), and was partially offset by higher net interest expense due to a higher average debt balance.
Diluted EPS was $2.82 in the second quarter of 2022 versus $3.06 in the second quarter of 2021, representing a $0.24, or 7.8%, decrease from the prior year quarter. Diluted EPS was $2.82 in the second quarter of 2022 versus diluted EPS, as adjusted of $3.12 in the second quarter of 2021, representing a $0.30, or 9.6%, decrease from the prior year quarter. The decrease in diluted EPS was driven by lower net income in the second quarter of 2022 as compared to the prior year quarter, and was partially offset by a lower weighted average diluted share count, resulting from the Company’s share repurchases during the trailing four quarters. Refer to the Financial Results Comparability and the Comments on Regulation G sections below for additional information.

The tables below outline certain statistical measures utilized by the Company to analyze its performance (unaudited). Refer to Comments on Regulation G below for additional details.

 

 

 

Second
Quarter of
2022

 

Second
Quarter of
2021

 

Second
Quarter of
2020

Same store sales growth: (versus prior year period)

 

 

 

 

 

 

U.S. Company-owned stores (1)

 

(9.2)%

 

(2.6)%

 

+ 16.9%

U.S. franchise stores (1)

 

(2.5)%

 

+ 3.9%

 

+ 16.0%

U.S. stores

 

(2.9)%

 

+ 3.5%

 

+ 16.1%

International stores (excluding foreign currency impact)

 

(2.2)%

 

+ 13.9%

 

+ 1.3%

 

 

 

 

 

 

 

Global retail sales growth: (versus prior year period)

 

 

 

 

 

 

U.S. stores

 

(0.6)%

 

+ 7.4%

 

+ 19.9%

International stores

 

(5.4)%

 

+ 39.7%

 

(8.1)%

Total

 

(3.0)%

 

+ 21.6%

 

+ 5.7%

 

 

 

 

 

 

 

Global retail sales growth: (versus prior year period,
   excluding foreign currency impact)

 

 

 

 

 

 

U.S. stores

 

(0.6)%

 

+ 7.4%

 

+ 19.9%

International stores

 

+ 3.7%

 

+ 29.5%

 

(3.4)%

Total

 

+ 1.5%

 

+ 17.1%

 

+ 8.1%

 

(1)

 

As previously disclosed, during the first quarter of 2022, the Company purchased 23 U.S. franchised stores from certain of its existing U.S. franchisees. The same store sales growth for these stores is reflected in U.S. Company-owned stores in the second quarter of 2022.

 

 


 

 

 

 

U.S. Company-
owned Stores

 

U.S. Franchise
Stores

 

Total
U.S. Stores

 

International
Stores

 

Total

Store counts:

 

 

 

 

 

 

 

 

 

 

Store count at March 27, 2022

 

  400

 

  6,197

 

  6,597

 

  12,464

 

  19,061

Openings

 

  1

 

  23

 

  24

 

  249

 

  273

Closings (1)

 

  —

 

  (2)

 

  (2)

 

  (38)

 

  (40)

Store count at June 19, 2022

 

  401

 

  6,218

 

  6,619

 

  12,675

 

  19,294

Second quarter 2022 net store growth

 

  1

 

  21

 

  22

 

  211

 

  233

Trailing four quarters net store growth (2)

 

  12

 

  181

 

  193

 

  1,044

 

  1,237

 

(1)

 

Temporary store closures are not treated as store closures and affected stores are included in the ending store count. Based on information reported to the Company by its master franchisees, the Company estimates that as of June 19, 2022, there were fewer than 150 international stores temporarily closed.

(2)

 

Trailing four quarters net store growth does not include the effect of transfers. As previously disclosed, during the first quarter of 2022, the Company purchased 23 U.S. franchised stores from certain of its existing U.S. franchisees.

 

Financial Results Comparability

 

Financial results for the Company can be significantly affected by changes in its capital structure, its effective tax rate, adoption of new accounting pronouncements, store portfolio changes, calendar timing and other factors. The Company’s recapitalization transactions have historically resulted in higher net interest expense due primarily to higher net debt levels, as well as the amortization of debt issuance costs associated with the repayment of certain of the Company’s notes. Additionally, repurchases and retirements of shares of the Company’s common stock pursuant to its share repurchase programs have historically reduced its weighted average diluted shares outstanding.

 

In addition to the above factors impacting comparability, the table below presents certain items related to the Company's 2021 Recapitalization that affect comparability between the Company’s 2022 and 2021 financial results (unaudited). Management believes that including such information is critical to an understanding of the Company’s financial results for the second quarter of 2022 and two fiscal quarters of 2022 as compared to the same periods in 2021. Refer to the Comments on Regulation G section below for additional details.

 

 

 

Fiscal Quarter Ended June 20, 2021

 

 

Two Fiscal Quarters Ended June 20, 2021

 

(in thousands, except per share data)

 

Pre-tax

 

 

After-tax

 

 

Diluted EPS
Impact

 

 

Pre-tax

 

 

After-tax

 

 

Diluted EPS
Impact

 

2021 items affecting comparability:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recapitalization expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses (1)

 

$

(509

)

 

$

(397

)

 

$

(0.01

)

 

$

(509

)

 

$

(397

)

 

$

(0.01

)

Interest expense (2)

 

 

(309

)

 

 

(241

)

 

 

(0.01

)

 

 

(309

)

 

 

(241

)

 

 

(0.01

)

Debt issuance cost write-off (3)

 

 

(2,024

)

 

 

(1,581

)

 

 

(0.04

)

 

 

(2,024

)

 

 

(1,581

)

 

 

(0.04

)

Total of 2021 items

 

$

(2,842

)

 

$

(2,219

)

 

$

(0.06

)

 

$

(2,842

)

 

$

(2,219

)

 

$

(0.06

)

 

(1)

 

Represents legal, professional and administrative fees incurred in connection with the Company’s 2021 Recapitalization.

(2)

 

Represents interest expense the Company incurred on its 2017 five-year fixed rate notes and 2017 five-year floating rate notes subsequent to the closing of the Company’s 2021 Recapitalization, but prior to the repayment of the 2017 five-year fixed rate notes and 2017 five-year floating rate notes, resulting in the payment of interest on both the 2017 five-year fixed rate notes and 2017 five-year floating rate notes and the 2021 fixed-rate notes for a short period of time.

(3)

 

Represents the write-off of debt issuance costs related to the extinguishment of the 2017 five-year fixed rate notes and 2017 five-year floating rate notes in connection with the Company’s 2021 Recapitalization.

 

 


 

Fiscal 2022 Guidance Update

 

Based on actual results to date for the two fiscal quarters of 2022 and the Company’s outlook for the remainder of fiscal 2022, the Company has provided the following updates related to its fiscal 2022 guidance provided on April 28, 2022 for the impact of changes in foreign currency exchange rates on international franchise royalty revenues and for food basket pricing. The Company reaffirmed its previous fiscal 2022 guidance for general and administrative expenses and capital expenditures.

 

 

 

Previous Fiscal 2022 Guidance

 

Updated Fiscal 2022 Guidance

Negative impact of changes in foreign currency exchange rates on royalty revenues vs. 2021

 

$12.0 - $16.0 million

 

$22.0 - $26.0 million

Food basket pricing increase vs. 2021

 

10.0% - 12.0%

 

13.0% - 15.0%

General and administrative expense

 

$420.0 - $428.0 million

 

$420.0 - $428.0 million

Capital expenditures

 

$120.0 million

 

$120.0 million

 

Share Repurchases

 

During the second quarter of 2022, the Company repurchased and retired 148,248 shares of common stock for a total of $50.0 million. As of June 19, 2022, the Company had a total remaining authorized amount for share repurchases of $606.4 million.

 

Liquidity

As of June 19, 2022, the Company had approximately:

$114.4 million of unrestricted cash and cash equivalents;
$5.05 billion in total debt; and
$155.8 million of available borrowing capacity under its 2021 variable funding notes, net of letters of credit issued of $44.2 million.

Net cash provided by operating activities was $153.4 million during the two fiscal quarters of 2022. The Company invested $32.7 million in capital expenditures during the two fiscal quarters of 2022. Free cash flow, as reconciled below to net cash provided by operating activities, as determined under accounting principles generally accepted in the United States of America (“GAAP”), was approximately $120.8 million during the two fiscal quarters of 2022 (refer to Comments on Regulation G below for additional details).

 

(in thousands)

 

Two Fiscal
Quarters of
2022

 

Net cash provided by operating activities

 

$

153,415

 

Capital expenditures

 

 

(32,664

)

Free cash flow

 

$

120,751

 

Comments on Regulation G

 

In addition to the GAAP financial measures set forth in this press release, the Company has included non-GAAP financial measures within the meaning of Regulation G, including diluted EPS, as adjusted and free cash flow metrics. The Company has also included metrics such as global retail sales, global retail sales growth, global retail sales growth, excluding foreign currency impact and same store sales growth, which are commonly used statistical measures in the quick-service restaurant industry that are important to understanding Company performance.

 

The Company uses “Global retail sales” to refer to total worldwide retail sales at Company-owned and franchise stores. The Company believes global retail sales information is useful in analyzing revenues because franchisees pay royalties and advertising fees that are based on a percentage of franchise retail sales. The Company reviews comparable industry global retail sales information to assess business trends and to track the growth of the Domino’s Pizza brand. In addition, supply chain revenues are directly impacted by changes in franchise retail sales. Retail sales for franchise stores are reported to the Company by its franchisees and are not included in Company revenues. “Global retail sales growth” is calculated as the change of U.S. Dollar global retail sales against the comparable period of the prior year. “Global retail sales growth, excluding foreign currency impact” is calculated as the change of international local currency global retail sales against the comparable period of the prior year.

 

The Company uses “Same store sales growth,” which is calculated by including only sales from stores that also had sales in the comparable weeks of both years. International same store sales growth is calculated similarly to U.S. same store sales growth. Changes in international same store sales are reported excluding foreign currency impacts, which reflect changes in international local currency sales.

 


 

The Company uses “Diluted EPS, as adjusted,” which is calculated as reported diluted EPS, adjusted for the items that affect comparability to the prior year periods. The most directly comparable financial measure calculated and presented in accordance with GAAP is diluted EPS. The Company believes that the diluted EPS, as adjusted, measure is important and useful to investors and other interested persons and that such persons benefit from having a consistent basis for comparison between reporting periods. The Company uses diluted EPS, as adjusted, internally to evaluate operating performance, to evaluate itself against its peers and in long-range planning. Additionally, the Company believes that analysts covering the Company’s stock performance generally eliminate these items affecting comparability when preparing their financial models, when determining their published EPS estimates and when benchmarking the Company against its competitors.

 

The Company uses “Free cash flow,” which is calculated as net cash provided by operating activities, less capital expenditures, both as reported under GAAP. The Company believes that the free cash flow measure is important to investors and other interested persons, and that such persons benefit from having a measure which communicates how much cash flow is available for working capital needs or to be used for repurchasing debt, making acquisitions, repurchasing common stock or paying dividends.

 

Conference Call Information

The Company will file its Quarterly Report on Form 10-Q today. As previously announced, Domino’s Pizza, Inc. will hold a conference call today at 10 a.m. (Eastern) to review its second quarter 2022 financial results. The webcast is available at ir.dominos.com and will be archived for one year.

 

About Domino’s Pizza®

Founded in 1960, Domino’s Pizza is the largest pizza company in the world, with a significant business in both delivery and carryout pizza. It ranks among the world’s top public restaurant brands with a global enterprise of more than 19,200 stores in over 90 markets. Domino’s had global retail sales of nearly $17.8 billion in 2021, with over $8.6 billion in the U.S. and over $9.1 billion internationally. In the second quarter of 2022, Domino’s had global retail sales of over $4.0 billion, with over $2.0 billion in the U.S. and nearly $2.0 billion internationally. Its system is comprised of independent franchise owners who accounted for 98% of Domino’s stores as of the end of the second quarter of 2022. Emphasis on technology innovation helped Domino’s achieve more than half of all global retail sales in 2021 from digital channels. In the U.S., Domino’s generated more than 75% of U.S. retail sales in 2021 via digital channels and has developed several innovative ordering platforms, including those for Google Home, Facebook Messenger, Apple Watch, Amazon Echo, Twitter and more. In 2019, Domino’s announced a partnership with Nuro to further its exploration and testing of autonomous pizza delivery. In mid-2020, Domino’s launched a new way to order contactless carryout nationwide – via Domino’s Carside Delivery®, which customers can choose when placing a prepaid online order.

Order – dominos.com

Company Info – biz.dominos.com

Media Assets – media.dominos.com

 

Please visit our Investor Relations website at ir.dominos.com to view news, announcements, earnings releases, investor presentations and conference webcasts.

 


 

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

This press release contains various forward-looking statements about the Company within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”) that are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act. You can identify forward-looking statements by the use of words such as “anticipates,” “believes,” “could,” “should,” “estimates,” “expects,” “intends,” “may,” “will,” “plans,” “predicts,” “projects,” “seeks,” “approximately,” “potential,” “outlook” and similar terms and phrases that concern our strategy, plans or intentions, including references to assumptions. These forward-looking statements address various matters including information concerning future results of operations and business strategy, our anticipated profitability, estimates in same store sales growth, the growth of our U.S. and international business, our ability to service our indebtedness, our future cash flows, our operating performance, trends in our business and other descriptions of future events reflect the Company’s expectations based upon currently available information and data. While we believe these expectations and projections are based on reasonable assumptions, such forward-looking statements are inherently subject to risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from our expectations are more fully described in our filings with the Securities and Exchange Commission, including under the section headed “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 2, 2022. Actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including but not limited to: our substantial increased indebtedness as a result of our recapitalization transactions and our ability to incur additional indebtedness or refinance or renegotiate key terms of that indebtedness in the future; the impact a downgrade in our credit rating may have on our business, financial condition and results of operations; our future financial performance and our ability to pay principal and interest on our indebtedness; our ability to manage difficulties associated with or related to the ongoing COVID-19 pandemic and the effects of COVID-19 and related regulations and policies on our business and supply chain, including impacts on the availability of labor; labor shortages or changes in operating expenses resulting from changes in prices of food (particularly cheese), fuel and other commodity costs, labor, utilities, insurance, employee benefits and other operating costs; the effectiveness of our advertising, operations and promotional initiatives; shortages, interruptions or disruptions in the supply or delivery of fresh food products and store equipment; the strength of our brand, including our ability to compete in the U.S. and internationally in our intensely competitive industry, including the food service and food delivery markets; the impact of social media and other consumer-oriented technologies on our business, brand and reputation; the impact of new or improved technologies and alternative methods of delivery on consumer behavior; new product, digital ordering and concept developments by us, and other food-industry competitors; our ability to maintain good relationships with and attract new franchisees, and franchisees’ ability to successfully manage their operations without negatively impacting our royalty payments and fees or our brand’s reputation; our ability to successfully implement cost-saving strategies; our ability and that of our franchisees to successfully operate in the current and future credit environment; changes in the level of consumer spending given general economic conditions, including interest rates, energy prices and consumer confidence; our ability and that of our franchisees to open new restaurants and keep existing restaurants in operation; the impact that widespread illness, health epidemics or general health concerns, severe weather conditions and natural disasters may have on our business and the economies of the countries where we operate; changes in foreign currency exchange rates; changes in income tax rates; our ability to retain or replace our executive officers and other key members of management and our ability to adequately staff our stores and supply chain centers with qualified personnel; our ability to find and/or retain suitable real estate for our stores and supply chain centers; changes in government legislation and regulations, including changes in laws and regulations regarding information privacy, payment methods and consumer protection and social media; adverse legal judgments or settlements; food-borne illness or contamination of products or food tampering; data breaches, power loss, technological failures, user error or other cyber risks threatening us or our franchisees; the impact that environmental, social and governance matters may have on our business and reputation; the effect of war, terrorism, catastrophic events or climate change; our ability to pay dividends and repurchase shares; changes in consumer tastes, spending and traffic patterns and demographic trends; actions by activist investors; changes in accounting policies; and adequacy of our insurance coverage. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur. All forward-looking statements speak only as of the date of this press release and should be evaluated with an understanding of their inherent uncertainty. Except as required under federal securities laws and the rules and regulations of the Securities and Exchange Commission, or other applicable law, we will not undertake, and specifically disclaim, any obligation to publicly update or revise any forward-looking statements to reflect events or circumstances arising after the date of this press release, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on the forward-looking statements included in this press release or that may be made elsewhere from time to time by, or on behalf of, us. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

TABLES TO FOLLOW

 

 

 

 

 

 

 


 

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

 

 

 

Fiscal Quarter Ended

 

 

 

June 19,
2022

 

 

% of
Total
Revenues

 

 

June 20,
2021

 

 

% of
Total
Revenues

 

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

$

112,502

 

 

 

 

 

$

116,589

 

 

 

 

U.S. franchise royalties and fees

 

 

128,098

 

 

 

 

 

 

126,836

 

 

 

 

Supply chain

 

 

646,586

 

 

 

 

 

 

602,962

 

 

 

 

International franchise royalties and fees

 

 

66,915

 

 

 

 

 

 

69,745

 

 

 

 

U.S. franchise advertising

 

 

111,081

 

 

 

 

 

 

116,340

 

 

 

 

Total revenues

 

 

1,065,182

 

 

 

100.0

%

 

 

1,032,472

 

 

 

100.0

%

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

 

94,065

 

 

 

 

 

 

88,019

 

 

 

 

Supply chain

 

 

584,852

 

 

 

 

 

 

536,763

 

 

 

 

Total cost of sales

 

 

678,917

 

 

 

63.7

%

 

 

624,782

 

 

 

60.5

%

Gross margin

 

 

386,265

 

 

 

36.3

%

 

 

407,690

 

 

 

39.5

%

General and administrative

 

 

97,070

 

 

 

9.2

%

 

 

100,448

 

 

 

9.7

%

U.S. franchise advertising

 

 

111,081

 

 

 

10.4

%

 

 

116,340

 

 

 

11.3

%

Income from operations

 

 

178,114

 

 

 

16.7

%

 

 

190,902

 

 

 

18.5

%

Interest expense, net

 

 

(44,632

)

 

 

(4.2

)%

 

 

(45,809

)

 

 

(4.4

)%

Income before provision for income taxes

 

 

133,482

 

 

 

12.5

%

 

 

145,093

 

 

 

14.1

%

Provision for income taxes

 

 

30,989

 

 

 

2.9

%

 

 

28,474

 

 

 

2.8

%

Net income

 

$

102,493

 

 

 

9.6

%

 

$

116,619

 

 

 

11.3

%

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Common stock – diluted

 

$

2.82

 

 

 

 

 

$

3.06

 

 

 

 

 

 


 

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

 

 

 

Two Fiscal Quarters Ended

 

 

 

June 19,
2022

 

 

% of
Total
Revenues

 

 

June 20,
2021

 

 

% of
Total
Revenues

 

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

$

216,397

 

 

 

 

 

$

229,333

 

 

 

 

U.S. franchise royalties and fees

 

 

250,383

 

 

 

 

 

 

251,322

 

 

 

 

Supply chain

 

 

1,256,133

 

 

 

 

 

 

1,171,300

 

 

 

 

International franchise royalties and fees

 

 

135,748

 

 

 

 

 

 

136,515

 

 

 

 

U.S. franchise advertising

 

 

217,670

 

 

 

 

 

 

227,700

 

 

 

 

Total revenues

 

 

2,076,331

 

 

 

100.0

%

 

 

2,016,170

 

 

 

100.0

%

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Company-owned stores

 

 

181,440

 

 

 

 

 

 

173,761

 

 

 

 

Supply chain

 

 

1,140,002

 

 

 

 

 

 

1,045,568

 

 

 

 

Total cost of sales

 

 

1,321,442

 

 

 

63.6

%

 

 

1,219,329

 

 

 

60.5

%

Gross margin

 

 

754,889

 

 

 

36.4

%

 

 

796,841

 

 

 

39.5

%

General and administrative

 

 

194,564

 

 

 

9.4

%

 

 

191,701

 

 

 

9.5

%

U.S. franchise advertising

 

 

217,670

 

 

 

10.5

%

 

 

227,700

 

 

 

11.3

%

Income from operations

 

 

342,655

 

 

 

16.5

%

 

 

377,440

 

 

 

18.7

%

Other income

 

 

 

 

 

0.0

%

 

 

2,500

 

 

 

0.1

%

Interest expense, net

 

 

(91,455

)

 

 

(4.4

)%

 

 

(85,209

)

 

 

(4.2

)%

Income before provision for income taxes

 

 

251,200

 

 

 

12.1

%

 

 

294,731

 

 

 

14.6

%

Provision for income taxes

 

 

57,743

 

 

 

2.8

%

 

 

60,351

 

 

 

3.0

%

Net income

 

$

193,457

 

 

 

9.3

%

 

$

234,380

 

 

 

11.6

%

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Common stock – diluted

 

$

5.32

 

 

 

 

 

$

6.06

 

 

 

 

 

 


 

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

 

 

June 19,
2022

 

 

January 2,
2022

 

(In thousands)

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

114,353

 

 

$

148,160

 

Restricted cash and cash equivalents

 

 

158,215

 

 

 

180,579

 

Accounts receivable, net

 

 

274,957

 

 

 

255,327

 

Inventories

 

 

70,201

 

 

 

68,328

 

Prepaid expenses and other

 

 

45,645

 

 

 

27,242

 

Advertising fund assets, restricted

 

 

182,499

 

 

 

180,904

 

Total current assets

 

 

845,870

 

 

 

860,540

 

Property, plant and equipment, net

 

 

313,812

 

 

 

324,065

 

Operating lease right-of-use assets

 

 

222,780

 

 

 

210,702

 

Investments

 

 

125,840

 

 

 

125,840

 

Other assets

 

 

162,328

 

 

 

150,669

 

Total assets

 

$

1,670,630

 

 

$

1,671,816

 

Liabilities and stockholders’ deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of long-term debt

 

$

55,654

 

 

$

55,588

 

Accounts payable

 

 

99,465

 

 

 

91,547

 

Operating lease liabilities

 

 

41,682

 

 

 

37,155

 

Advertising fund liabilities

 

 

175,069

 

 

 

173,737

 

Other accrued liabilities

 

 

203,579

 

 

 

232,714

 

Total current liabilities

 

 

575,449

 

 

 

590,741

 

Long-term liabilities:

 

 

 

 

 

 

Long-term debt, less current portion

 

 

4,989,578

 

 

 

5,014,638

 

Operating lease liabilities

 

 

194,674

 

 

 

184,471

 

Other accrued liabilities

 

 

91,238

 

 

 

91,502

 

Total long-term liabilities

 

 

5,275,490

 

 

 

5,290,611

 

Total stockholders’ deficit

 

 

(4,180,309

)

 

 

(4,209,536

)

Total liabilities and stockholders’ deficit

 

$

1,670,630

 

 

$

1,671,816

 

 

 


 

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

Two Fiscal Quarters Ended

 

 

 

June 19,
2022

 

 

June 20,
2021

 

(In thousands)

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

193,457

 

 

$

234,380

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

37,093

 

 

 

33,641

 

Loss on sale/disposal of assets

 

 

448

 

 

 

456

 

Amortization of debt issuance costs

 

 

2,631

 

 

 

4,438

 

Provision for deferred income taxes

 

 

2,490

 

 

 

2,561

 

Non-cash compensation expense

 

 

15,738

 

 

 

13,500

 

Excess tax benefits from equity-based compensation

 

 

(174

)

 

 

(4,264

)

Provision for losses on accounts and notes receivable

 

 

2,326

 

 

 

296

 

Unrealized gain on investments

 

 

 

 

 

(2,500

)

Changes in operating assets and liabilities

 

 

(102,935

)

 

 

(17,098

)

Changes in advertising fund assets and liabilities, restricted

 

 

2,341

 

 

 

30,005

 

Net cash provided by operating activities

 

 

153,415

 

 

 

295,415

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(32,664

)

 

 

(33,163

)

Purchase of investments

 

 

 

 

 

(40,000

)

Purchase of franchise operations and other assets

 

 

(6,814

)

 

 

 

Other

 

 

(435

)

 

 

293

 

Net cash used in investing activities

 

 

(39,913

)

 

 

(72,870

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of long-term debt

 

 

 

 

 

1,850,000

 

Repayments of long-term debt and finance lease obligations

 

 

(27,528

)

 

 

(882,547

)

Proceeds from exercise of stock options

 

 

526

 

 

 

9,025

 

Purchases of common stock

 

 

(97,661

)

 

 

(1,025,000

)

Tax payments for restricted stock upon vesting

 

 

(2,395

)

 

 

(1,087

)

Payments of common stock dividends and equivalents

 

 

(39,662

)

 

 

(36,432

)

Cash paid for financing costs

 

 

 

 

 

(14,938

)

Other

 

 

 

 

 

(244

)

Net cash used in financing activities

 

 

(166,720

)

 

 

(101,223

)

Effect of exchange rate changes on cash

 

 

(635

)

 

 

302

 

Change in cash and cash equivalents, restricted cash and cash equivalents

 

 

(53,853

)

 

 

121,624

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

 

148,160

 

 

 

168,821

 

Restricted cash and cash equivalents, beginning of period

 

 

180,579

 

 

 

217,453

 

Cash and cash equivalents included in advertising fund assets, restricted,
   beginning of period

 

 

161,741

 

 

 

115,872

 

Cash and cash equivalents, restricted cash and cash equivalents and
   cash and cash equivalents included in advertising fund assets, restricted,
   beginning of period

 

 

490,480

 

 

 

502,146

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

 

114,353

 

 

 

292,095

 

Restricted cash and cash equivalents, end of period

 

 

158,215

 

 

 

184,695

 

Cash and cash equivalents included in advertising fund assets, restricted,
   end of period

 

 

164,059

 

 

 

146,980

 

Cash and cash equivalents, restricted cash and cash equivalents and cash and
   cash equivalents included in advertising fund assets, restricted,
   end of period

 

$

436,627

 

 

$

623,770

 

###

 


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Dominos Pizza Inc provided additional information to their SEC Filing as exhibits

Ticker: DPZ
CIK: 1286681
Form Type: 8-K Corporate News
Accession Number: 0000950170-22-012842
Submitted to the SEC: Thu Jul 21 2022 7:31:05 AM EST
Accepted by the SEC: Thu Jul 21 2022
Period: Thursday, July 21, 2022
Industry: Wholesale Groceries And Related Products
Events:
  1. Earnings Release
  2. Financial Exhibit

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