10-Q 1 dpz-10q_20150614.htm 10-Q dpz-10q_20150614.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 14, 2015

OR

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to                

Commission file number: 001-32242

 

Domino’s Pizza, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

 

38-2511577

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

 

30 Frank Lloyd Wright Drive

Ann Arbor, Michigan

 

48105

(Address of Principal Executive Offices)

 

(Zip Code)

(734) 930-3030

(Registrant’s Telephone Number, Including Area Code)

 

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

x

  

Accelerated filer

 

¨

 

 

 

 

Non-accelerated filer

 

¨

  

Smaller reporting company

 

¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No   x

As of July 9, 2015, Domino’s Pizza, Inc. had 54,913,919 shares of common stock, par value $0.01 per share, outstanding.

 

 

 

 

 


Domino’s Pizza, Inc.

TABLE OF CONTENTS

 

 

 

 

  

Page No.

PART I.

 

FINANCIAL INFORMATION

  

 

 

 

 

Item 1.

 

Financial Statements

  

3

 

 

 

 

 

Condensed Consolidated Balance Sheets (Unaudited) – As of June 14, 2015 and December 28, 2014

  

3

 

 

 

 

 

Condensed Consolidated Statements of Income (Unaudited) – Fiscal quarter and two fiscal quarters ended June 14, 2015 and June 15, 2014

  

4

 

 

 

 

 

Consolidated Statements of Comprehensive Income (Unaudited) – Fiscal quarter and two fiscal quarters ended June 14, 2015 and June 15, 2014

  

5

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited) – Two fiscal quarters ended June 14, 2015 and June 15, 2014

  

6

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

  

7

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

  

11

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

  

18

 

 

 

Item 4.

 

Controls and Procedures

  

18

 

 

 

PART II.

 

OTHER INFORMATION

  

 

 

 

 

Item 1.

 

Legal Proceedings

  

19

 

 

 

Item 1A.

 

Risk Factors

  

19

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

  

19

 

 

 

Item 3.

 

Defaults Upon Senior Securities

  

19

 

 

 

Item 4.

 

Mine Safety Disclosures

  

19

 

 

 

Item 5.

 

Other Information

  

20

 

 

 

Item 6.

 

Exhibits

  

21

 

 

SIGNATURES

  

22

 

 

 

2


PART I. FINANCIAL INFORMATION

 

 

Item 1. Financial Statements.

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

 

 

 

 

 

 

 

December 28, 2014

 

(In thousands)

 

June 14, 2015

 

 

(Note)

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

25,891

 

 

$

30,855

 

Restricted cash and cash equivalents

 

 

96,817

 

 

 

120,954

 

Accounts receivable

 

 

113,328

 

 

 

118,395

 

Inventories

 

 

36,283

 

 

 

37,944

 

Prepaid expenses and other

 

 

31,691

 

 

 

32,569

 

Advertising fund assets, restricted

 

 

90,302

 

 

 

72,055

 

Deferred income taxes

 

 

10,189

 

 

 

9,857

 

Asset held for sale

 

 

 

 

 

5,732

 

Total current assets

 

 

404,501

 

 

 

428,361

 

Property, plant and equipment:

 

 

 

 

 

 

 

 

Land and buildings

 

 

28,772

 

 

 

25,859

 

Leasehold and other improvements

 

 

102,950

 

 

 

99,804

 

Equipment

 

 

184,189

 

 

 

178,378

 

Construction in progress

 

 

4,773

 

 

 

6,179

 

 

 

 

320,684

 

 

 

310,220

 

Accumulated depreciation and amortization

 

 

(203,488

)

 

 

(196,174

)

Property, plant and equipment, net

 

 

117,196

 

 

 

114,046

 

Other assets:

 

 

 

 

 

 

 

 

Deferred financing costs

 

 

20,398

 

 

 

22,947

 

Goodwill

 

 

16,176

 

 

 

16,297

 

Capitalized software

 

 

22,111

 

 

 

20,562

 

Other assets

 

 

15,260

 

 

 

14,592

 

Deferred income taxes

 

 

2,259

 

 

 

2,475

 

Total other assets

 

 

76,204

 

 

 

76,873

 

Total assets

 

$

597,901

 

 

$

619,280

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' deficit

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

237

 

 

$

565

 

Accounts payable

 

 

76,961

 

 

 

86,552

 

Dividends payable

 

 

17,485

 

 

 

14,351

 

Insurance reserves

 

 

14,892

 

 

 

14,465

 

Advertising fund liabilities

 

 

90,302

 

 

 

72,055

 

Other accrued liabilities

 

 

69,336

 

 

 

77,620

 

Total current liabilities

 

 

269,213

 

 

 

265,608

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Long-term debt, less current portion

 

 

1,527,161

 

 

 

1,523,546

 

Insurance reserves

 

 

26,057

 

 

 

26,951

 

Deferred income taxes

 

 

3,457

 

 

 

5,588

 

Other accrued liabilities

 

 

17,668

 

 

 

17,052

 

Total long-term liabilities

 

 

1,574,343

 

 

 

1,573,137

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Common stock

 

 

548

 

 

 

556

 

Additional paid-in capital

 

 

79

 

 

 

29,561

 

Retained deficit

 

 

(1,243,353

)

 

 

(1,246,921

)

Accumulated other comprehensive loss

 

 

(2,929

)

 

 

(2,661

)

Total stockholders' deficit

 

 

(1,245,655

)

 

 

(1,219,465

)

Total liabilities and stockholders' deficit

 

$

597,901

 

 

$

619,280

 

 

Note: The balance sheet at December 28, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

See accompanying notes.

3


Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

 

 

 

Fiscal Quarter Ended

 

 

Two Fiscal Quarters Ended

 

 

 

June 14,

 

 

June 15,

 

 

June 14,

 

 

June 15,

 

(In thousands, except per share data)

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic Company-owned stores

 

$

88,794

 

 

$

78,814

 

 

$

181,169

 

 

$

161,271

 

Domestic franchise

 

 

60,827

 

 

 

52,038

 

 

 

122,601

 

 

 

105,459

 

Supply chain

 

 

302,903

 

 

 

284,928

 

 

 

614,559

 

 

 

569,262

 

International franchise

 

 

36,098

 

 

 

34,683

 

 

 

72,320

 

 

 

68,323

 

Total revenues

 

 

488,622

 

 

 

450,463

 

 

 

990,649

 

 

 

904,315

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic Company-owned stores

 

 

66,082

 

 

 

60,717

 

 

 

134,234

 

 

 

123,508

 

Supply chain

 

 

269,868

 

 

 

255,101

 

 

 

546,677

 

 

 

509,120

 

Total cost of sales

 

 

335,950

 

 

 

315,818

 

 

 

680,911

 

 

 

632,628

 

Operating margin

 

 

152,672

 

 

 

134,645

 

 

 

309,738

 

 

 

271,687

 

General and administrative

 

 

60,441

 

 

 

53,282

 

 

 

123,254

 

 

 

106,149

 

Income from operations

 

 

92,231

 

 

 

81,363

 

 

 

186,484

 

 

 

165,538

 

Interest income

 

 

57

 

 

 

27

 

 

 

139

 

 

 

58

 

Interest expense

 

 

(19,010

)

 

 

(19,851

)

 

 

(39,163

)

 

 

(40,177

)

Income before provision for income taxes

 

 

73,278

 

 

 

61,539

 

 

 

147,460

 

 

 

125,419

 

Provision for income taxes

 

 

27,369

 

 

 

23,077

 

 

 

55,262

 

 

 

46,483

 

Net income

 

$

45,909

 

 

$

38,462

 

 

$

92,198

 

 

$

78,936

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock - basic

 

$

0.84

 

 

$

0.70

 

 

$

1.68

 

 

$

1.43

 

Common stock - diluted

 

 

0.81

 

 

 

0.67

 

 

 

1.62

 

 

 

1.38

 

Dividends declared per share

 

$

0.31

 

 

$

0.25

 

 

$

0.62

 

 

$

0.50

 

 

See accompanying notes.

 

 

 

4


Domino’s Pizza, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)

 

 

 

Fiscal Quarter Ended

 

 

Two Fiscal Quarters Ended

 

 

 

June 14,

 

 

June 15,

 

 

June 14,

 

 

June 15,

 

(In thousands)

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Net income

 

$

45,909

 

 

$

38,462

 

 

$

92,198

 

 

$

78,936

 

Other comprehensive income (loss), before tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency translation adjustment

 

 

77

 

 

 

241

 

 

 

(733

)

 

 

(785

)

Tax attributes of items in other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency translation adjustment

 

 

84

 

 

 

(31

)

 

 

465

 

 

 

411

 

Other comprehensive income (loss), net of tax

 

 

161

 

 

 

210

 

 

 

(268

)

 

 

(374

)

Comprehensive income

 

$

46,070

 

 

$

38,672

 

 

$

91,930

 

 

$

78,562

 

 

See accompanying notes.

 

 

5


Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Two Fiscal Quarters Ended

 

 

 

June 14,

 

 

June 15,

 

(In thousands)

 

2015

 

 

2014

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

92,198

 

 

$

78,936

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

15,028

 

 

 

13,077

 

Gains on sale/disposal of assets

 

 

(272

)

 

 

(1,687

)

Amortization of deferred financing costs

 

 

2,550

 

 

 

2,771

 

Benefit from deferred income taxes

 

 

(1,964

)

 

 

(2,187

)

Non-cash compensation expense

 

 

7,776

 

 

 

8,080

 

Tax impact from equity-based compensation

 

 

(7,556

)

 

 

(8,319

)

Other

 

 

(725

)

 

 

(623

)

Changes in operating assets and liabilities

 

 

(3,441

)

 

 

(29,258

)

Net cash provided by operating activities

 

 

103,594

 

 

 

60,790

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(20,238

)

 

 

(18,948

)

Proceeds from sale of assets

 

 

8,785

 

 

 

4,967

 

Changes in restricted cash

 

 

24,137

 

 

 

50,743

 

Other

 

 

1,449

 

 

 

(1,049

)

Net cash provided by investing activities

 

 

14,133

 

 

 

35,713

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayments of long-term debt and capital lease obligations

 

 

(141

)

 

 

(12,022

)

Proceeds from exercise of stock options

 

 

2,067

 

 

 

2,648

 

Tax impact from equity-based compensation

 

 

7,556

 

 

 

8,319

 

Purchases of common stock

 

 

(97,634

)

 

 

(65,006

)

Tax payments for restricted stock upon vesting

 

 

(3,737

)

 

 

(4,363

)

Payments of common stock dividends and equivalents

 

 

(31,039

)

 

 

(25,130

)

Net cash used in financing activities

 

 

(122,928

)

 

 

(95,554

)

Effect of exchange rate changes on cash and cash equivalents

 

 

237

 

 

 

(28

)

Change in cash and cash equivalents

 

 

(4,964

)

 

 

921

 

Cash and cash equivalents, at beginning of period

 

 

30,855

 

 

 

14,383

 

Cash and cash equivalents, at end of period

 

$

25,891

 

 

$

15,304

 

 

See accompanying notes.

 

 

 

6


Domino’s Pizza, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited; tabular amounts in thousands, except percentages, share and per share amounts)

June 14, 2015

 

 

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes for the fiscal year ended December 28, 2014 included in our annual report on Form 10-K.

In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair statement have been included. Operating results for the fiscal quarter ended June 14, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending January 3, 2016.

 

 

2. Segment Information

The following table summarizes revenues, income from operations and earnings before interest, taxes, depreciation, amortization and other, which is the measure by which the Company allocates resources to its segments and which we refer to as Segment Income, for each of our reportable segments.

 

 

 

Fiscal Quarters Ended June 14, 2015 and June 15, 2014

 

 

 

Domestic

 

 

Supply

 

 

International

 

 

Intersegment

 

 

 

 

 

 

 

 

 

 

 

Stores

 

 

Chain

 

 

Franchise

 

 

Revenues

 

 

Other

 

 

Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

$

149,621

 

 

$

327,374

 

 

$

36,098

 

 

$

(24,471

)

 

$

 

 

$

488,622

 

2014

 

 

130,852

 

 

 

308,718

 

 

 

34,683

 

 

 

(23,790

)

 

 

 

 

 

450,463

 

Income from operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

$

52,723

 

 

$

26,012

 

 

$

29,569

 

 

N/A

 

 

$

(16,073

)

 

$

92,231

 

2014

 

 

44,014

 

 

 

23,124

 

 

 

28,971

 

 

N/A

 

 

 

(14,746

)

 

 

81,363

 

Segment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

$

54,279

 

 

$

28,315

 

 

$

29,509

 

 

N/A

 

 

$

(9,303

)

 

$

102,800

 

2014

 

 

45,673

 

 

 

25,126

 

 

 

28,710

 

 

N/A

 

 

 

(7,996

)

 

 

91,513

 

 

 

 

Two Fiscal Quarters Ended June 14, 2015 and June 15, 2014

 

 

 

Domestic

 

 

Supply

 

 

International

 

 

Intersegment

 

 

 

 

 

 

 

 

 

 

 

Stores

 

 

Chain

 

 

Franchise

 

 

Revenues

 

 

Other

 

 

Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

$

303,770

 

 

$

665,130

 

 

$

72,320

 

 

$

(50,571

)

 

$

 

 

$

990,649

 

2014

 

 

266,730

 

 

 

617,769

 

 

 

68,323

 

 

 

(48,507

)

 

 

 

 

 

904,315

 

Income from operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

$

108,250

 

 

$

53,207

 

 

$

58,284

 

 

N/A

 

 

$

(33,257

)

 

$

186,484

 

2014

 

 

92,105

 

 

 

47,092

 

 

 

56,394

 

 

N/A

 

 

 

(30,053

)

 

 

165,538

 

Segment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

$

111,552

 

 

$

57,771

 

 

$

58,258

 

 

N/A

 

 

$

(18,565

)

 

$

209,016

 

2014

 

 

93,652

 

 

 

51,151

 

 

 

56,173

 

 

N/A

 

 

 

(15,968

)

 

 

185,008

 

 

7


The following table reconciles Total Segment Income to consolidated income before provision for income taxes.

 

 

 

Fiscal Quarter Ended

 

 

Two Fiscal Quarters Ended

 

 

 

June 14,

 

 

June 15,

 

 

June 14,

 

 

June 15,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Total Segment Income

 

$

102,800

 

 

$

91,513

 

 

$

209,016

 

 

$

185,008

 

Depreciation and amortization

 

 

(7,681

)

 

 

(6,656

)

 

 

(15,028

)

 

 

(13,077

)

Gains on sale/disposal of assets

 

 

422

 

 

 

131

 

 

 

272

 

 

 

1,687

 

Non-cash compensation expense

 

 

(3,310

)

 

 

(3,625

)

 

 

(7,776

)

 

 

(8,080

)

Income from operations

 

 

92,231

 

 

 

81,363

 

 

 

186,484

 

 

 

165,538

 

Interest income

 

 

57

 

 

 

27

 

 

 

139

 

 

 

58

 

Interest expense

 

 

(19,010

)

 

 

(19,851

)

 

 

(39,163

)

 

 

(40,177

)

Income before provision for income taxes

 

$

73,278

 

 

$

61,539

 

 

$

147,460

 

 

$

125,419

 

 

 

3. Earnings Per Share

 

 

 

Fiscal Quarter Ended

 

 

Two Fiscal Quarters Ended

 

 

 

June 14,

 

 

June 15,

 

 

June 14,

 

 

June 15,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Net income available to common stockholders -

   basic and diluted

 

$

45,909

 

 

$

38,462

 

 

$

92,198

 

 

$

78,936

 

Basic weighted average number of shares

 

 

54,833,094

 

 

 

55,015,394

 

 

 

55,020,404

 

 

 

55,113,616

 

Earnings per share - basic

 

$

0.84

 

 

$

0.70

 

 

$

1.68

 

 

$

1.43

 

Diluted weighted average number of shares

 

 

56,628,237

 

 

 

57,124,457

 

 

 

56,820,743

 

 

 

57,246,871

 

Earnings per share - diluted

 

$

0.81

 

 

$

0.67

 

 

$

1.62

 

 

$

1.38

 

 

The denominators used in calculating diluted earnings per share for common stock for the second quarter and two fiscal quarters of 2015 do not include 70,910 options to purchase common stock, as the effect of including these options would have been anti-dilutive. The denominators used in calculating diluted earnings per share for common stock for the second quarter and two fiscal quarters of 2014 do not include 199,040 options to purchase common stock, as the effect of including these options would have been anti-dilutive.

 

 

4. Stockholders’ Deficit

The following table summarizes changes in Stockholders’ Deficit for the two fiscal quarters of 2015.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

Balance at December 28, 2014

 

 

55,553,149

 

 

$

556

 

 

$

29,561

 

 

$

(1,246,921

)

 

$

(2,661

)

Net income

 

 

 

 

 

 

 

 

 

 

 

92,198

 

 

 

 

Common stock dividends

 

 

 

 

 

 

 

 

 

 

 

(34,148

)

 

 

 

Issuance of common stock, net

 

 

23,155

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax payments for restricted stock upon vesting

 

 

(36,154

)

 

 

 

 

 

(3,737

)

 

 

 

 

 

 

Purchases of common stock

 

 

(928,464

)

 

 

(10

)

 

 

(43,142

)

 

 

(54,482

)

 

 

 

Exercise of stock options

 

 

191,572

 

 

 

2

 

 

 

2,065

 

 

 

 

 

 

 

Tax impact from equity-based compensation

 

 

 

 

 

 

 

 

7,556

 

 

 

 

 

 

 

Non-cash compensation expense

 

 

 

 

 

 

 

 

7,776

 

 

 

 

 

 

 

Currency translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(268

)

Balance at June 14, 2015

 

 

54,803,258

 

 

$

548

 

 

$

79

 

 

$

(1,243,353

)

 

$

(2,929

)

 

 

8


5. Dividends

During the two fiscal quarters of 2015, the Company paid approximately $31.0 million of common stock dividends. Additionally, during the second quarter of 2015, the Company’s Board of Directors declared a $0.31 per share quarterly dividend on its outstanding common stock for shareholders of record as of June 15, 2015 which was paid on June 30, 2015. The Company had approximately $17.5 million accrued for common stock dividends at June 14, 2015.

Subsequent to the second quarter, the Company’s Board of Directors declared a $0.31 per share quarterly dividend on its outstanding common stock for shareholders of record as of September 15, 2015 to be paid on September 30, 2015.

 

 

6. Accumulated Other Comprehensive Loss

The approximately $2.9 million of accumulated other comprehensive loss at June 14, 2015 and the approximately $2.7 million of accumulated other comprehensive loss at December 28, 2014 represent currency translation adjustments, net of tax. There were no reclassifications out of accumulated other comprehensive loss to net income in the two fiscal quarters of 2015 or the two fiscal quarters of 2014.

 

 

7. Open Market Share Repurchase Program

During the second quarter of 2015, the Company repurchased and retired 637,587 shares of common stock for a total of approximately $68.1 million; during the two fiscal quarters of 2015, the Company repurchased and retired 928,464 shares of common stock for approximately $97.6 million. As of June 14, 2015, the Company had $35.1 million remaining for future share repurchases under its Board of Directors approved $200.0 million open market share repurchase program. Subsequent to the second quarter, the Board of Directors reset the open market share repurchase program so that the Company had $200.0 million remaining for future share repurchases at July 15, 2015.

During the second quarter and two fiscal quarters of 2014, the Company repurchased and retired 687,750 and 909,231 shares of common stock for a total of approximately $49.9 million and $65.0 million, respectively, under the Company’s open market share repurchase program.

 

 

8. Fair Value Measurements

Fair value measurements enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The fair values of the Company’s cash equivalents and investments in marketable securities are based on quoted prices in active markets for identical assets. The following tables summarize the carrying amounts and fair values of certain assets at June 14, 2015 and December 28, 2014:

 

 

 

At June 14, 2015

 

 

 

 

 

 

 

Fair Value Estimated Using

 

 

 

Carrying

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

Cash equivalents

 

$

12,465

 

 

$

12,465

 

 

$