QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
Page | ||
Part I. – Financial Information | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II. – Other Information | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
June 27, 2020 | December 28, 2019 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | |||||
Restricted cash | ||||||
Accounts receivable, net of allowances of $11,111 and $6,533 as of June 27, 2020 and December 28, 2019, respectively | ||||||
Notes and other receivables, net of allowances of $1,348 and $778 as of June 27, 2020 and December 28, 2019, respectively | ||||||
Prepaid income taxes | ||||||
Prepaid expenses and other current assets | ||||||
Total current assets | ||||||
Property, equipment, and software, net of accumulated depreciation of $182,454 and $172,001 as of June 27, 2020 and December 28, 2019, respectively | ||||||
Operating lease assets | ||||||
Equity method investments | ||||||
Goodwill | ||||||
Other intangible assets, net of accumulated amortization of $262,409 and $253,641 as of June 27, 2020 and December 28, 2019, respectively | ||||||
Other assets | ||||||
Total assets | $ | |||||
Liabilities and Stockholders’ Deficit | ||||||
Current liabilities: | ||||||
Current portion of long-term debt | $ | |||||
Operating lease liabilities | ||||||
Accounts payable | ||||||
Deferred revenue | ||||||
Other current liabilities | ||||||
Total current liabilities | ||||||
Long-term debt, net | ||||||
Operating lease liabilities | ||||||
Deferred revenue | ||||||
Deferred income taxes, net | ||||||
Other long-term liabilities | ||||||
Total long-term liabilities | ||||||
Commitments and contingencies (note 9) | ||||||
Stockholders’ 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; 82,258,776 shares issued and 82,257,776 shares outstanding as of June 27, 2020; 82,835,830 shares issued and 82,834,830 shares outstanding as of December 28, 2019 | ||||||
Additional paid-in capital | ||||||
Treasury stock, at cost; 1,000 shares as of June 27, 2020 and December 28, 2019 | ( | ) | ( | ) | ||
Accumulated deficit | ( | ) | ( | ) | ||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||
Total stockholders’ deficit | ( | ) | ( | ) | ||
Total liabilities and stockholders’ deficit | $ |
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
Revenues: | ||||||||||||
Franchise fees and royalty income | $ | |||||||||||
Advertising fees and related income | ||||||||||||
Rental income | ||||||||||||
Sales of ice cream and other products | ||||||||||||
Other revenues | ||||||||||||
Total revenues | ||||||||||||
Operating costs and expenses: | ||||||||||||
Occupancy expenses—franchised restaurants | ||||||||||||
Cost of ice cream and other products | ||||||||||||
Advertising expenses | ||||||||||||
General and administrative expenses | ||||||||||||
Depreciation | ||||||||||||
Amortization of other intangible assets | ||||||||||||
Long-lived asset impairment charges | ||||||||||||
Total operating costs and expenses | ||||||||||||
Net income of equity method investments | ||||||||||||
Other operating income, net | ||||||||||||
Operating income | ||||||||||||
Other income (expense), net: | ||||||||||||
Interest income | ||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Loss on debt extinguishment | ( | ) | ( | ) | ||||||||
Other income (loss), net | ( | ) | ( | ) | ( | ) | ||||||
Total other expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Income before income taxes | ||||||||||||
Provision for income taxes | ||||||||||||
Net income | $ | |||||||||||
Earnings per share: | ||||||||||||
Common—basic | $ | |||||||||||
Common—diluted |
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
Net income | $ | |||||||||||
Other comprehensive income (loss), net: | ||||||||||||
Effect of foreign currency translation, net of deferred tax expense (benefit) of $(3) and $(18) for the three months ended June 27, 2020 and June 29, 2019, respectively, and $(65) and $8 for the six months ended June 27, 2020 and June 29, 2019, respectively. | ( | ) | ( | ) | ( | ) | ||||||
Other, net | ( | ) | ( | ) | ( | ) | ||||||
Total other comprehensive income (loss), net | ( | ) | ( | ) | ( | ) | ||||||
Comprehensive income | $ |
Stockholders' Deficit | |||||||||||||||||||||
Common stock | Additional paid-in capital | Treasury stock, at cost | Accumulated deficit | Accumulated other comprehensive loss | Total | ||||||||||||||||
Shares | Amount | ||||||||||||||||||||
Balance at March 28, 2020 | $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||
Other comprehensive income, net | — | — | — | — | — | ||||||||||||||||
Exercise of stock options | — | — | — | — | |||||||||||||||||
Share-based compensation expense | — | — | — | — | |||||||||||||||||
Other | — | — | ( | ) | — | ||||||||||||||||
Balance at June 27, 2020 | $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Balance at March 30, 2019 | $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||
Other comprehensive loss, net | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||
Dividends paid on common stock ($0.3750 per share) | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||
Share-based compensation expense | — | — | — | — | |||||||||||||||||
Repurchases of common stock | — | — | ( | ) | — | — | ( | ) | |||||||||||||
Retirement of treasury stock | ( | ) | ( | ) | ( | ) | — | ||||||||||||||
Other | — | — | |||||||||||||||||||
Balance at June 29, 2019 | $ | ( | ) | ( | ) | ( | ) | ( | ) |
Stockholders' Deficit | |||||||||||||||||||||
Common stock | Additional paid-in capital | Treasury stock, at cost | Accumulated deficit | Accumulated other comprehensive loss | Total | ||||||||||||||||
Shares | Amount | ||||||||||||||||||||
Balance at December 28, 2019 | $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||
Other comprehensive loss, net | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||
Exercise of stock options | — | — | — | — | |||||||||||||||||
Dividends paid on common stock ($0.4025 per share) | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||
Share-based compensation expense | — | — | — | — | |||||||||||||||||
Repurchases of common stock | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||
Retirement of treasury stock | ( | ) | ( | ) | ( | ) | ( | ) | — | — | |||||||||||
Other | — | — | ( | ) | — | ( | ) | ||||||||||||||
Balance at June 27, 2020 | $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Balance at December 29, 2018 | $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||
Other comprehensive loss, net | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||
Dividends paid on common stock ($0.7500 per share) | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||
Share-based compensation expense | — | — | — | — | |||||||||||||||||
Repurchases of common stock | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||
Retirement of treasury stock | ( | ) | — | ( | ) | ( | ) | — | — | ||||||||||||
Other | — | ( | ) | ( | ) | — | ( | ) | |||||||||||||
Balance at June 29, 2019 | $ | ( | ) | ( | ) | ( | ) | ( | ) |
Six months ended | ||||||
June 27, 2020 | June 29, 2019 | |||||
Cash flows from operating activities: | ||||||
Net income | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | ||||||
Amortization of debt issuance costs | ||||||
Loss on debt extinguishment | ||||||
Deferred income taxes | ( | ) | ||||
Provision for uncollectible accounts and notes receivable | ||||||
Share-based compensation expense | ||||||
Net income of equity method investments | ( | ) | ( | ) | ||
Dividends received from equity method investments | ||||||
Other, net | ( | ) | ||||
Change in operating assets and liabilities: | ||||||
Accounts, notes, and other receivables, net | ( | ) | ||||
Prepaid income taxes, net | ||||||
Prepaid expenses and other current assets | ( | ) | ( | ) | ||
Accounts payable | ( | ) | ( | ) | ||
Other current liabilities | ( | ) | ( | ) | ||
Deferred revenue | ( | ) | ( | ) | ||
Other, net | ( | ) | ||||
Net cash provided by operating activities | ||||||
Cash flows from investing activities: | ||||||
Additions to property, equipment, and software | ( | ) | ( | ) | ||
Other, net | ||||||
Net cash used in investing activities | ( | ) | ( | ) | ||
Cash flows from financing activities: | ||||||
Proceeds from issuance of long-term debt | ||||||
Repayment of long-term debt | ( | ) | ( | ) | ||
Payment of debt issuance and other debt-related costs | ( | ) | ||||
Dividends paid on common stock | ( | ) | ( | ) | ||
Repurchases of common stock | ( | ) | ( | ) | ||
Exercise of stock options | ||||||
Other, net | ( | ) | ( | ) | ||
Net cash used in financing activities | ( | ) | ( | ) | ||
Effect of exchange rates on cash, cash equivalents, and restricted cash | ( | ) | ||||
Decrease in cash, cash equivalents, and restricted cash | ( | ) | ( | ) | ||
Cash, cash equivalents, and restricted cash, beginning of period | ||||||
Cash, cash equivalents, and restricted cash, end of period | $ | |||||
Supplemental cash flow information: | ||||||
Cash paid for income taxes | $ | |||||
Cash paid for interest | ||||||
Noncash activities: | ||||||
Leased assets obtained in exchange for operating lease liabilities, net | ||||||
Property, equipment, and software included in accounts payable and other current liabilities |
June 27, 2020 | December 28, 2019 | |||||
Cash and cash equivalents | $ | |||||
Restricted cash | ||||||
Restricted cash, included in Other assets | ||||||
Total cash, cash equivalents, and restricted cash | $ |
June 27, 2020 | December 28, 2019 | |||||||||||
Significant other observable inputs (Level 2) | Total | Significant other observable inputs (Level 2) | Total | |||||||||
Assets: | ||||||||||||
Company-owned life insurance | $ | |||||||||||
Total assets | $ | |||||||||||
Liabilities: | ||||||||||||
Deferred compensation liabilities | $ | |||||||||||
Total liabilities | $ |
June 27, 2020 | December 28, 2019 | |||||||||||
Carrying value | Estimated fair value | Carrying value | Estimated fair value | |||||||||
Total long-term debt | $ |
Three months ended June 27, 2020 | ||||||||||||||||||||||||
Dunkin' U.S. | Baskin-Robbins U.S. | Dunkin' International | Baskin-Robbins International | U.S. Advertising Funds | Total reportable segment revenues | Other(a) | Total revenues | |||||||||||||||||
Revenues recognized under ASC 606 | ||||||||||||||||||||||||
Revenues recognized over time: | ||||||||||||||||||||||||
Royalty income | $ | ( | ) | |||||||||||||||||||||
Franchise fees | ( | ) | ||||||||||||||||||||||
Advertising fees and related income | ||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||
Total revenues recognized over time | ||||||||||||||||||||||||
Revenues recognized at a point in time: | ||||||||||||||||||||||||
Sales of ice cream and other products | ( | ) | ||||||||||||||||||||||
Other revenues | ( | ) | ||||||||||||||||||||||
Total revenues recognized at a point in time | ( | ) | ||||||||||||||||||||||
Total revenues recognized under ASC 606 | ||||||||||||||||||||||||
Revenues not subject to ASC 606 | ||||||||||||||||||||||||
Advertising fees and related income | ||||||||||||||||||||||||
Rental income | ||||||||||||||||||||||||
Total revenues not subject to ASC 606 | ||||||||||||||||||||||||
Total revenues | $ |
(a) | Revenues reported as “Other” include revenues earned through certain licensing arrangements, revenues generated from online training programs for franchisees, advertising fees and related income from international advertising funds, and breakage and other revenue related to the gift card program, all of which are not allocated to a specific segment. Additionally, the allocation of royalty income from sales of ice cream and other products, certain franchisee incentives, and corporate financial relief provided to franchisees are reported as “Other.” |
Three months ended June 29, 2019 | ||||||||||||||||||||||||
Dunkin' U.S. | Baskin-Robbins U.S. | Dunkin' International | Baskin-Robbins International | U.S. Advertising Funds | Total reportable segment revenues | Other(a) | Total revenues | |||||||||||||||||
Revenues recognized under ASC 606 | ||||||||||||||||||||||||
Revenues recognized over time: | ||||||||||||||||||||||||
Royalty income | $ | |||||||||||||||||||||||
Franchise fees | ||||||||||||||||||||||||
Advertising fees and related income | ||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||
Total revenues recognized over time | ||||||||||||||||||||||||
Revenues recognized at a point in time: | ||||||||||||||||||||||||
Sales of ice cream and other products | ( | ) | ||||||||||||||||||||||
Other revenues | ( | ) | ||||||||||||||||||||||
Total revenues recognized at a point in time | ( | ) | ||||||||||||||||||||||
Total revenues recognized under ASC 606 | ||||||||||||||||||||||||
Revenues not subject to ASC 606 | ||||||||||||||||||||||||
Advertising fees and related income | ||||||||||||||||||||||||
Rental income | ||||||||||||||||||||||||
Total revenues not subject to ASC 606 | ||||||||||||||||||||||||
Total revenues | $ |
(a) | Revenues reported as “Other” include revenues earned through certain licensing arrangements, revenues generated from online training programs for franchisees, advertising fees and related income from international advertising funds, and breakage and other revenue related to the gift card program, all of which are not allocated to a specific segment. Additionally, the allocation of royalty income from sales of ice cream and other products is reported as “Other.” |
Six months ended June 27, 2020 | ||||||||||||||||||||||||
Dunkin' U.S. | Baskin-Robbins U.S. | Dunkin' International | Baskin-Robbins International | U.S. Advertising Funds | Total reportable segment revenues | Other(a) | Total revenues | |||||||||||||||||
Revenues recognized under ASC 606 | ||||||||||||||||||||||||
Revenues recognized over time: | ||||||||||||||||||||||||
Royalty income | $ | ( | ) | |||||||||||||||||||||
Franchise fees | ( | ) | ||||||||||||||||||||||
Advertising fees and related income | ||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||
Total revenues recognized over time | ||||||||||||||||||||||||
Revenues recognized at a point in time: | ||||||||||||||||||||||||
Sales of ice cream and other products | ( | ) | ||||||||||||||||||||||
Other revenues | ( | ) | ||||||||||||||||||||||
Total revenues recognized at a point in time | ( | ) | ||||||||||||||||||||||
Total revenues recognized under ASC 606 | ||||||||||||||||||||||||
Revenues not subject to ASC 606 | ||||||||||||||||||||||||
Advertising fees and related income | ||||||||||||||||||||||||
Rental income | ||||||||||||||||||||||||
Total revenues not subject to ASC 606 | ||||||||||||||||||||||||
Total revenues | $ |
(a) | Revenues reported as “Other” include revenues earned through certain licensing arrangements, revenues generated from online training programs for franchisees, advertising fees and related income from international advertising funds, and breakage and other revenue related to the gift card program, all of which are not allocated to a specific segment. Additionally, the allocation of royalty income from sales of ice cream and other products, certain franchisee incentives, and corporate financial relief provided to franchisees are reported as “Other.” |
Six months ended June 29, 2019 | ||||||||||||||||||||||||
Dunkin' U.S. | Baskin-Robbins U.S. | Dunkin' International | Baskin-Robbins International | U.S. Advertising Funds | Total reportable segment revenues | Other(a) | Total revenues | |||||||||||||||||
Revenues recognized under ASC 606 | ||||||||||||||||||||||||
Revenues recognized over time: | ||||||||||||||||||||||||
Royalty income | $ | |||||||||||||||||||||||
Franchise fees | ||||||||||||||||||||||||
Advertising fees and related income | ||||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||
Total revenues recognized over time | ||||||||||||||||||||||||
Revenues recognized at a point in time: | ||||||||||||||||||||||||
Sales of ice cream and other products | ( | ) | ||||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||
Total revenues recognized at a point in time | ( | ) | ||||||||||||||||||||||
Total revenues recognized under ASC 606 | ||||||||||||||||||||||||
Revenues not subject to ASC 606 | ||||||||||||||||||||||||
Advertising fees and related income | ||||||||||||||||||||||||
Rental income | ||||||||||||||||||||||||
Total revenues not subject to ASC 606 | ||||||||||||||||||||||||
Total revenues | $ |
(a) | Revenues reported as “Other” include revenues earned through certain licensing arrangements, revenues generated from online training programs for franchisees, advertising fees and related income from international advertising funds, and breakage and other revenue related to the gift card program, all of which are not allocated to a specific segment. Additionally, the allocation of royalty income from sales of ice cream and other products is reported as “Other.” |
June 27, 2020 | December 28, 2019 | Balance Sheet Classification | ||||||
Receivables | $ | Accounts receivable, net, Notes and other receivables, net, and Other assets | ||||||
Contract assets | Other assets | |||||||
Deferred revenue: | ||||||||
Current | $ | Deferred revenue—current | ||||||
Long-term | Deferred revenue—long term | |||||||
Total | $ |
Fiscal year: | |||
2020(a) | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total | $ | ||
(a) Represents the estimate for remainder of fiscal year 2020 which excludes the six months ended June 27, 2020. |
June 27, 2020 | December 28, 2019 | |||||
2017 Class A-2-I Notes | $ | |||||
2017 Class A-2-II Notes | ||||||
2019 Class A-2-I Notes | ||||||
2019 Class A-2-II Notes | ||||||
2019 Class A-2-III Notes | ||||||
Other | ||||||
Debt issuance costs, net of amortization | ( | ) | ( | ) | ||
Total long-term debt, net | ||||||
Less: current portion of long-term debt | ||||||
Long-term debt, net | $ |
June 27, 2020 | December 28, 2019 | |||||
Gift card/certificate liability | $ | |||||
Accrued payroll and benefits | ||||||
Accrued interest | ||||||
Other current liabilities—advertising funds | ||||||
Franchisee profit-sharing liability | ||||||
Other | ||||||
Total other current liabilities | $ |
Revenues | ||||||||||||
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
Dunkin’ U.S. | $ | |||||||||||
Baskin-Robbins U.S. | ||||||||||||
Dunkin’ International | ||||||||||||
Baskin-Robbins International | ||||||||||||
U.S. Advertising Funds | ||||||||||||
Total reportable segment revenues | ||||||||||||
Other | ||||||||||||
Total revenues | $ |
Segment profit | ||||||||||||
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
Dunkin’ U.S. | $ | |||||||||||
Baskin-Robbins U.S. | ||||||||||||
Dunkin’ International | ||||||||||||
Baskin-Robbins International | ||||||||||||
U.S. Advertising Funds | ||||||||||||
Total reportable segments | ||||||||||||
Corporate and other | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Amortization of other intangible assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Long-lived asset impairment charges | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Loss on debt extinguishment | ( | ) | ( | ) | ||||||||
Other income (loss), net | ( | ) | ( | ) | ( | ) | ||||||
Income before income taxes | $ |
Net income (loss) of equity method investments | ||||||||||||
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
Dunkin’ International | $ | ( | ) | |||||||||
Baskin-Robbins International | ||||||||||||
Total reportable segments | ||||||||||||
Other | ||||||||||||
Total net income of equity method investments | $ |
Effect of foreign currency translation | Other | Accumulated other comprehensive loss | |||||||
Balance as of December 28, 2019 | $ | ( | ) | ( | ) | ( | ) | ||
Other comprehensive loss, net | ( | ) | ( | ) | ( | ) | |||
Balance as of June 27, 2020 | $ | ( | ) | ( | ) | ( | ) |
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
Net income—basic and diluted | $ | |||||||||||
Weighted-average number of shares of common stock: | ||||||||||||
Common—basic | ||||||||||||
Common—diluted | ||||||||||||
Earnings per share of common stock: | ||||||||||||
Common—basic | $ | |||||||||||
Common—diluted |
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
B-R 31 Ice Cream Company., Ltd. | $ | |||||||||||
BR-Korea Co., Ltd. | ||||||||||||
Palm Oasis Ventures Pty. Ltd. | ||||||||||||
$ |
June 27, 2020 | December 28, 2019 | |||||
Accounts receivable, net of allowances | $ | |||||
Notes and other receivables, net of allowances | ||||||
Prepaid income taxes | ||||||
Prepaid expenses and other current assets | ||||||
Total current assets | ||||||
Property, equipment, and software, net | ||||||
Operating lease assets | ||||||
Other assets | ||||||
Total assets | $ | |||||
Operating lease liabilities—current | $ | |||||
Accounts payable | ||||||
Deferred revenue—current(a) | ( | ) | ( | ) | ||
Other current liabilities | ||||||
Total current liabilities | ||||||
Operating lease liabilities—long-term | ||||||
Deferred revenue—long-term(a) | ( | ) | ( | ) | ||
Other long-term liabilities | ||||||
Total liabilities | $ |
(a) | Amounts represent franchisee incentives that have been deferred and are being recognized over the terms of the respective franchise agreements. |
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
Rental income—operating leases | $ | |||||||||||
Variable rental income | ||||||||||||
Rental income | $ |
Allowance for expected credit losses, excluding lease receivables(a) | Allowance for lease receivables | Total(b) | |||||||
Balance at March 28, 2020 | $ | ||||||||
Provision for uncollectible accounts and notes receivable, net | |||||||||
Write-offs and other | ( | ) | ( | ) | |||||
Balance at June 27, 2020 | $ |
Allowance for expected credit losses, excluding lease receivables(a) | Allowance for lease receivables | Total(b) | |||||||
Balance at December 28, 2019 | $ | ||||||||
Provision for uncollectible accounts and notes receivable, net | |||||||||
Write-offs and other | ( | ) | ( | ) | ( | ) | |||
Balance at June 27, 2020 | $ |
(a) | Balance primarily consists of allowances recorded on receivables arising from contracts with customers under ASC 606. |
(b) | Balance is included in accounts receivable, net; notes and other receivables, net; and other assets in the consolidated balance sheets. |
Amounts and percentages may not recalculate due to rounding | Three months ended | Six months ended | ||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
Financial data (in thousands): | ||||||||||||
Total revenues | $ | 287,376 | 359,337 | 610,520 | 678,428 | |||||||
Operating income | 81,616 | 122,652 | 182,928 | 224,024 | ||||||||
Adjusted operating income | 86,690 | 127,280 | 192,668 | 233,608 | ||||||||
Net income | 36,450 | 59,622 | 88,563 | 111,945 | ||||||||
Adjusted net income | 40,103 | 72,369 | 95,576 | 128,260 | ||||||||
Systemwide sales (in millions): | ||||||||||||
Dunkin’ U.S. | $ | 1,888.7 | 2,382.6 | 4,013.2 | 4,508.9 | |||||||
Baskin-Robbins U.S. | 171.2 | 184.8 | 301.4 | 313.3 | ||||||||
Dunkin’ International | 112.8 | 199.5 | 290.8 | 398.4 | ||||||||
Baskin-Robbins International | 319.0 | 377.7 | 648.5 | 692.2 | ||||||||
Total systemwide sales | $ | 2,491.7 | 3,144.6 | 5,253.9 | 5,912.8 | |||||||
Systemwide sales growth (decline) | (20.8 | )% | 3.8 | % | (11.1 | )% | 3.9 | % | ||||
Comparable store sales growth (decline): | ||||||||||||
Dunkin’ U.S. | (18.7 | )% | 1.7 | % | (10.6 | )% | 2.0 | % | ||||
Baskin-Robbins U.S. | (6.0 | )% | (1.4 | )% | (2.8 | )% | (1.9 | )% | ||||
Dunkin’ International | (34.9 | )% | 5.6 | % | (20.3 | )% | 4.3 | % | ||||
Baskin-Robbins International | (5.3 | )% | 3.2 | % | (1.6 | )% | 0.7 | % |
• | Dunkin’ U.S. systemwide sales declines of 20.7% and 11.0% for the three and six months ended June 27, 2020, respectively, were primarily a result of comparable store sales declines of 18.7% and 10.6%, respectively, offset by 98 net new restaurants opened since June 29, 2019. Comparable store sales declined for the three and six months ended June 27, 2020 as a decline in traffic driven by the COVID-19 pandemic was offset by an increase in average ticket. The increase in average ticket was driven primarily by favorable mix shift to family-size bulk orders and snacking attachment, as well as premium priced cold beverages, espresso, and other specialty beverages, and partially offset by |
• | Baskin-Robbins U.S. systemwide sales declines of 7.4% and 3.8% for the three and six months ended June 27, 2020, respectively, were primarily a result of comparable store sales declines of 6.0% and 2.8%, respectively, and 45 net restaurant closures since June 29, 2019. The comparable store sales declines were driven by a decline in traffic primarily driven by the COVID-19 pandemic, offset by an increase in average ticket. The increase in average ticket was driven primarily by take home products, specifically ice cream quarts and cakes. Comparable store sales improved sequentially in each month of the second quarter of fiscal year 2020. |
• | Dunkin’ International systemwide sales declines of 43.4% and 27.0% for the three and six months ended June 27, 2020, respectively, were driven by sales declines in Asia, Latin America, Europe, and South Korea. Sales in Latin America, South Korea, and Europe were negatively impacted by unfavorable foreign exchange rates for each of the three- and six-month periods ended June 27, 2020. On a constant currency basis, systemwide sales decreased by approximately 42% and 25% for the three and six months ended June 27, 2020, respectively. Dunkin’ International comparable store sales declines of 34.9% and 20.3% for the three and six months ended June 27, 2020, respectively, were due primarily to declines in the Middle East, Asia, Europe, and Latin America. |
• | Baskin-Robbins International systemwide sales declines of 15.5% and 6.3% for the three and six months ended June 27, 2020, respectively, were driven by sales declines in Japan, the Middle East, Asia, and Europe, offset by sales growth in South Korea. Sales in Japan were positively impacted by favorable foreign exchange rates while sales across all other regions were negatively impacted by unfavorable foreign exchange rates. On a constant currency basis, systemwide sales decreased by approximately 14% and 4% for the three and six months ended June 27, 2020, respectively. Baskin-Robbins International comparable store sales declines of 5.3% and 1.6% for the three and six months ended June 27, 2020, respectively, were driven primarily by declines in the Middle East, Europe, and Asia, offset by growth in South Korea. Also contributing to the decline in comparable store sales for the three months ended June 27, 2020 was a decline in Japan. |
June 27, 2020 | June 29, 2019 | ||||
Points of distribution, at period end(a): | |||||
Dunkin’ U.S. | 9,597 | 9,499 | |||
Baskin-Robbins U.S. | 2,511 | 2,556 | |||
Dunkin’ International | 3,528 | 3,458 | |||
Baskin-Robbins International | 5,470 | 5,516 | |||
Consolidated global points of distribution | 21,106 | 21,029 |
Three months ended | Six months ended | ||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | ||||||||
Net openings (closings) during the period: | |||||||||||
Dunkin’ U.S. | (40 | ) | 46 | (33 | ) | 80 | |||||
Baskin-Robbins U.S. | (7 | ) | 9 | (13 | ) | 6 | |||||
Dunkin’ International | (2 | ) | 11 | 21 | 6 | ||||||
Baskin-Robbins International | (180 | ) | 43 | (166 | ) | 25 | |||||
Consolidated global net openings | (229 | ) | 109 | (191 | ) | 117 |
(a) | Temporary restaurant closures due to COVID-19 are not treated as restaurant closures and affected restaurants are included in points of distribution. |
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
(In thousands) | ||||||||||||
Operating income | $ | 81,616 | 122,652 | 182,928 | 224,024 | |||||||
Adjustments: | ||||||||||||
Amortization of other intangible assets | 4,588 | 4,626 | 9,180 | 9,259 | ||||||||
Long-lived asset impairment charges | 486 | 2 | 560 | 325 | ||||||||
Adjusted operating income | $ | 86,690 | 127,280 | 192,668 | 233,608 | |||||||
Net income | $ | 36,450 | 59,622 | 88,563 | 111,945 | |||||||
Adjustments: | ||||||||||||
Amortization of other intangible assets | 4,588 | 4,626 | 9,180 | 9,259 | ||||||||
Long-lived asset impairment charges | 486 | 2 | 560 | 325 | ||||||||
Loss on debt extinguishment | — | 13,076 | — | 13,076 | ||||||||
Tax impact of adjustments(a) | (1,421 | ) | (4,957 | ) | (2,727 | ) | (6,345 | ) | ||||
Adjusted net income | $ | 40,103 | 72,369 | 95,576 | 128,260 |
(a) | Tax impact of adjustments calculated at effective tax rate of 28%. |
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
Earnings per share of common stock: | ||||||||||||
Common—basic | $ | 0.44 | 0.72 | 1.07 | 1.35 | |||||||
Common—diluted | 0.44 | 0.71 | 1.07 | 1.34 | ||||||||
Diluted adjusted earnings per share of common stock | 0.49 | 0.86 | 1.15 | 1.53 |
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
(In thousands, except share and per share data) | ||||||||||||
Adjusted net income | $ | 40,103 | 72,369 | 95,576 | 128,260 | |||||||
Weighted-average number of common shares—diluted | 82,588,746 | 83,696,721 | 82,905,616 | 83,564,388 | ||||||||
Diluted adjusted earnings per share of common stock | $ | 0.49 | 0.86 | 1.15 | 1.53 |
Three months ended | Six months ended | ||||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Increase (Decrease) | June 27, 2020 | June 29, 2019 | Increase (Decrease) | ||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Franchise fees and royalty income | $ | 115,965 | 158,258 | (42,293 | ) | (26.7 | )% | $ | 255,441 | 297,586 | (42,145 | ) | (14.2 | )% | |||||||||||
Advertising fees and related income | 109,631 | 129,259 | (19,628 | ) | (15.2 | )% | 226,601 | 246,457 | (19,856 | ) | (8.1 | )% | |||||||||||||
Rental income | 26,017 | 31,679 | (5,662 | ) | (17.9 | )% | 54,949 | 60,707 | (5,758 | ) | (9.5 | )% | |||||||||||||
Sales of ice cream and other products | 22,703 | 27,258 | (4,555 | ) | (16.7 | )% | 46,650 | 47,991 | (1,341 | ) | (2.8 | )% | |||||||||||||
Other revenues | 13,060 | 12,883 | 177 | 1.4 | % | 26,879 | 25,687 | 1,192 | 4.6 | % | |||||||||||||||
Total revenues | $ | 287,376 | 359,337 | (71,961 | ) | (20.0 | )% | $ | 610,520 | 678,428 | (67,908 | ) | (10.0 | )% |
Three months ended | Six months ended | ||||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Increase (Decrease) | June 27, 2020 | June 29, 2019 | Increase (Decrease) | ||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Occupancy expenses—franchised restaurants | $ | 18,133 | 19,697 | (1,564 | ) | (7.9 | )% | $ | 37,632 | 39,172 | (1,540 | ) | (3.9 | )% | |||||||||||
Cost of ice cream and other products | 17,986 | 22,018 | (4,032 | ) | (18.3 | )% | 36,134 | 38,658 | (2,524 | ) | (6.5 | )% | |||||||||||||
Advertising expenses | 111,081 | 130,961 | (19,880 | ) | (15.2 | )% | 229,350 | 249,052 | (19,702 | ) | (7.9 | )% | |||||||||||||
General and administrative expenses | 52,159 | 59,922 | (7,763 | ) | (13.0 | )% | 112,694 | 116,125 | (3,431 | ) | (3.0 | )% | |||||||||||||
Depreciation and amortization | 10,359 | 9,337 | 1,022 | 10.9 | % | 20,000 | 18,591 | 1,409 | 7.6 | % | |||||||||||||||
Long-lived asset impairment charges | 486 | 2 | 484 | 24,200.0 | % | 560 | 325 | 235 | 72.3 | % | |||||||||||||||
Total operating costs and expenses | $ | 210,204 | 241,937 | (31,733 | ) | (13.1 | )% | 436,370 | 461,923 | (25,553 | ) | (5.5 | )% | ||||||||||||
Net income of equity method investments | 4,283 | 4,427 | (144 | ) | (3.3 | )% | 7,949 | 6,657 | 1,292 | 19.4 | % | ||||||||||||||
Other operating income, net | 161 | 825 | (664 | ) | (80.5 | )% | 829 | 862 | (33 | ) | (3.8 | )% | |||||||||||||
Operating income | $ | 81,616 | 122,652 | (41,036 | ) | (33.5 | )% | $ | 182,928 | 224,024 | (41,096 | ) | (18.3 | )% |
Three months ended | Six months ended | ||||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Increase (Decrease) | June 27, 2020 | June 29, 2019 | Increase (Decrease) | ||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Interest expense, net | $ | 32,338 | 29,763 | 2,575 | 8.7 | % | $ | 62,320 | 60,061 | 2,259 | 3.8 | % | |||||||||||||
Loss on debt extinguishment | — | 13,076 | (13,076 | ) | (100.0 | )% | — | 13,076 | (13,076 | ) | (100.0 | )% | |||||||||||||
Other loss (income), net | (214 | ) | 46 | (260 | ) | (565.2 | )% | 456 | 50 | 406 | 812.0 | % | |||||||||||||
Total other expense | $ | 32,124 | 42,885 | (10,761 | ) | (25.1 | )% | $ | 62,776 | 73,187 | (10,411 | ) | (14.2 | )% |
Three months ended | Six months ended | |||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||
(In thousands, except percentages) | ||||||||||||
Income before income taxes | $ | 49,492 | 79,767 | 120,152 | 150,837 | |||||||
Provision for income taxes | 13,042 | 20,145 | 31,589 | 38,892 | ||||||||
Effective tax rate | 26.4 | % | 25.3 | % | 26.3 | % | 25.8 | % |
Three months ended | Six months ended | ||||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Increase (Decrease) | June 27, 2020 | June 29, 2019 | Increase (Decrease) | ||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Royalty income | $ | 103,019 | 131,682 | (28,663 | ) | (21.8 | )% | $ | 220,874 | 248,779 | (27,905 | ) | (11.2 | )% | |||||||||||
Franchise fees | 5,131 | 3,418 | 1,713 | 50.1 | % | 10,018 | 7,044 | 2,974 | 42.2 | % | |||||||||||||||
Rental income | 25,217 | 30,491 | (5,274 | ) | (17.3 | )% | 53,140 | 58,339 | (5,199 | ) | (8.9 | )% | |||||||||||||
Other revenues | 781 | 986 | (205 | ) | (20.8 | )% | 1,906 | 2,160 | (254 | ) | (11.8 | )% | |||||||||||||
Total revenues | $ | 134,148 | 166,577 | (32,429 | ) | (19.5 | )% | $ | 285,938 | 316,322 | (30,384 | ) | (9.6 | )% | |||||||||||
Segment profit | $ | 96,158 | 127,099 | (30,941 | ) | (24.3 | )% | $ | 205,464 | 238,133 | (32,669 | ) | (13.7 | )% |
Three months ended | Six months ended | ||||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Increase (Decrease) | June 27, 2020 | June 29, 2019 | Increase (Decrease) | ||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Royalty income | $ | 8,170 | 8,828 | (658 | ) | (7.5 | )% | $ | 14,407 | 14,931 | (524 | ) | (3.5 | )% | |||||||||||
Franchise fees | 245 | 344 | (99 | ) | (28.8 | )% | 600 | 656 | (56 | ) | (8.5 | )% | |||||||||||||
Rental income | 623 | 973 | (350 | ) | (36.0 | )% | 1,406 | 1,933 | (527 | ) | (27.3 | )% | |||||||||||||
Sales of ice cream and other products | 870 | 1,080 | (210 | ) | (19.4 | )% | 2,279 | 1,751 | 528 | 30.2 | % | ||||||||||||||
Other revenues | 2,499 | 3,063 | (564 | ) | (18.4 | )% | 4,559 | 5,294 | (735 | ) | (13.9 | )% | |||||||||||||
Total revenues | $ | 12,407 | 14,288 | (1,881 | ) | (13.2 | )% | $ | 23,251 | 24,565 | (1,314 | ) | (5.3 | )% | |||||||||||
Segment profit | $ | 9,299 | 10,076 | (777 | ) | (7.7 | )% | $ | 15,908 | 16,399 | (491 | ) | (3.0 | )% |
Three months ended | Six months ended | ||||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Increase (Decrease) | June 27, 2020 | June 29, 2019 | Increase (Decrease) | ||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Royalty income | $ | 2,296 | 5,396 | (3,100 | ) | (57.4 | )% | $ | 7,342 | 11,309 | (3,967 | ) | (35.1 | )% | |||||||||||
Franchise fees | 423 | 2,030 | (1,607 | ) | (79.2 | )% | 760 | 2,895 | (2,135 | ) | (73.7 | )% | |||||||||||||
Other revenues | 74 | 44 | 30 | 68.2 | % | 174 | 117 | 57 | 48.7 | % | |||||||||||||||
Total revenues | $ | 2,793 | 7,470 | (4,677 | ) | (62.6 | )% | $ | 8,276 | 14,321 | (6,045 | ) | (42.2 | )% | |||||||||||
Segment profit | $ | 1,845 | 5,484 | (3,639 | ) | (66.4 | )% | $ | 5,336 | 10,315 | (4,979 | ) | (48.3 | )% |
Three months ended | Six months ended | ||||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Increase (Decrease) | June 27, 2020 | June 29, 2019 | Increase (Decrease) | ||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Royalty income | $ | 1,686 | 1,953 | (267 | ) | (13.7 | )% | $ | 3,384 | 3,858 | (474 | ) | (12.3 | )% | |||||||||||
Franchise fees | 173 | 520 | (347 | ) | (66.7 | )% | 305 | 878 | (573 | ) | (65.3 | )% | |||||||||||||
Rental income | 177 | 215 | (38 | ) | (17.7 | )% | 403 | 435 | (32 | ) | (7.4 | )% | |||||||||||||
Sales of ice cream and other products | 24,529 | 29,997 | (5,468 | ) | (18.2 | )% | 49,786 | 53,072 | (3,286 | ) | (6.2 | )% | |||||||||||||
Other revenues | (8 | ) | (8 | ) | — | — | % | (19 | ) | 13 | (32 | ) | (246.2 | )% | |||||||||||
Total revenues | $ | 26,557 | 32,677 | (6,120 | ) | (18.7 | )% | $ | 53,859 | 58,256 | (4,397 | ) | (7.5 | )% | |||||||||||
Segment profit | $ | 9,930 | 12,089 | (2,159 | ) | (17.9 | )% | $ | 19,378 | 19,891 | (513 | ) | (2.6 | )% |
Three months ended | Six months ended | ||||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | Increase (Decrease) | June 27, 2020 | June 29, 2019 | Increase (Decrease) | ||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Advertising fees and related income | $ | 99,483 | 123,588 | (24,105 | ) | (19.5 | )% | $ | 208,114 | 232,230 | (24,116 | ) | (10.4 | )% | |||||||||||
Total revenues | $ | 99,483 | 123,588 | (24,105 | ) | (19.5 | )% | $ | 208,114 | 232,230 | (24,116 | ) | (10.4 | )% | |||||||||||
Segment profit | $ | — | — | — | — | % | $ | — | — | — | — | % |
Six months ended | ||||||
June 27, 2020 | June 29, 2019 | |||||
Net cash provided by operating activities | $ | 11,721 | 53,077 | |||
Plus: Decrease in cash held for advertising funds and gift card/certificate programs | 49,386 | 50,168 | ||||
Less: Net cash used in investing activities | (10,625 | ) | (17,832 | ) | ||
Adjusted operating and investing cash flow | $ | 50,482 | 85,413 |
June 27, 2020 | |||
Principal outstanding under 2017 Class A-2 Notes | $ | 1,368,500 | |
Principal outstanding under 2019 Class A-2 Notes | 1,687,250 | ||
Other notes payable | 1,175 | ||
Total finance lease obligations | 7,607 | ||
Less: cash and cash equivalents | (515,857 | ) | |
Less: restricted cash, current | (95,060 | ) | |
Plus: cash held for gift card/certificate programs | 165,080 | ||
Net Debt | $ | 2,618,695 |
Twelve months ended | |||
June 27, 2020 | |||
Net income | $ | 218,642 | |
Interest expense | 128,127 | ||
Income tax expense | 69,935 | ||
Depreciation and amortization(a) | 38,292 | ||
Impairment charges | 786 | ||
EBITDA | 455,782 | ||
Adjustments: | |||
Share-based compensation expense(a) | 12,017 | ||
Decrease in deferred revenue related to franchise and licensing agreements(b) | (11,947 | ) | |
COVID-19 related adjustments(c) | 11,945 | ||
Other(d) | 26,949 | ||
Total adjustments | 38,964 | ||
Adjusted EBITDA | $ | 494,746 |
(a) | Amounts exclude depreciation and share-based compensation of $6.7 million and $0.9 million, respectively, related to U.S. Advertising Funds. |
(b) | Amount excludes incentives paid to franchisees, primarily related to the Dunkin' U.S. Blueprint for Growth. |
(c) | Amount includes approximately $8.0 million of corporate financial relief and $2.1 million of rent waivers being provided to the Company's franchisees, net of waivers received from landlords, as well as additional general and administrative expenses incurred as a result of the COVID-19 pandemic. |
(d) | Represents costs and fees associated with various franchisee-related investments, including investments in the Dunkin' U.S. Blueprint for Growth, bank fees, legal reserves, and other non-cash gains and losses. |
Ex. 101.INS XBRL Instance Document - the instant document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||
Ex. 101.SCH Inline XBRL Taxonomy Extension Schema Document | ||
Ex. 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||
Ex. 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document | ||
Ex. 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||
Ex. 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document | ||
Ex. 104.Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Date: | August 5, 2020 | By: | /s/ Katherine Jaspon | ||
Katherine Jaspon Chief Financial Officer Principal Financial and Accounting 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. |
August 5, 2020 | /s/ David Hoffmann | |||
Date | David Hoffmann 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. |
August 5, 2020 | /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/ David Hoffmann | |
David Hoffmann 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 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 27, 2020 |
Dec. 28, 2019 |
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Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 11,111 | $ 6,533 |
Notes and other receivables, allowance for doubtful accounts | 1,348 | 778 |
Property and equipment, accumulated depreciation | 182,454 | 172,001 |
Other intangible assets, accumulated amortization | $ 262,409 | $ 253,641 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 475,000,000 | 475,000,000 |
Common stock, shares issued (in shares) | 82,258,776 | 82,835,830 |
Common stock, shares outstanding (in shares) | 82,257,776 | 82,834,830 |
Treasury Stock, Shares | 1,000 | 1,000 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
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Revenues: | ||||
Revenue | $ 287,376 | $ 359,337 | $ 610,520 | $ 678,428 |
Operating costs and expenses: | ||||
Advertising expenses | 111,081 | 130,961 | 229,350 | 249,052 |
General and administrative expenses | 52,159 | 59,922 | 112,694 | 116,125 |
Depreciation | 5,771 | 4,711 | 10,820 | 9,332 |
Amortization of other intangible assets | 4,588 | 4,626 | 9,180 | 9,259 |
Long-lived asset impairment charges | 486 | 2 | 560 | 325 |
Total operating costs and expenses | 210,204 | 241,937 | 436,370 | 461,923 |
Net income of equity method investments | 4,283 | 4,427 | 7,949 | 6,657 |
Other operating income, net | 161 | 825 | 829 | 862 |
Operating income | 81,616 | 122,652 | 182,928 | 224,024 |
Other income (expense), net: | ||||
Interest income | 312 | 3,079 | 2,367 | 4,910 |
Interest expense | (32,650) | (32,842) | (64,687) | (64,971) |
Gain (Loss) on Extinguishment of Debt | 0 | (13,076) | 0 | (13,076) |
Loss on debt extinguishment | 0 | (13,076) | 0 | (13,076) |
Other income (loss), net | 214 | (46) | (456) | (50) |
Total other expense, net | (32,124) | (42,885) | (62,776) | (73,187) |
Income before income taxes | 49,492 | 79,767 | 120,152 | 150,837 |
Provision for income taxes | 13,042 | 20,145 | 31,589 | 38,892 |
Net income | $ 36,450 | $ 59,622 | $ 88,563 | $ 111,945 |
Earnings per share: | ||||
Common-basic (in dollars per share) | $ 0.44 | $ 0.72 | $ 1.07 | $ 1.35 |
Common-diluted (in dollars per share) | $ 0.44 | $ 0.71 | $ 1.07 | $ 1.34 |
Franchise fees and royalty income | ||||
Revenues: | ||||
Revenue | $ 115,965 | $ 158,258 | $ 255,441 | $ 297,586 |
Advertising fees and related income | ||||
Revenues: | ||||
Revenue | 109,631 | 129,259 | 226,601 | 246,457 |
Rental income | ||||
Revenues: | ||||
Revenue | 26,017 | 31,679 | 54,949 | 60,707 |
Ice cream and other products | ||||
Revenues: | ||||
Revenue | 22,703 | 27,258 | 46,650 | 47,991 |
Operating costs and expenses: | ||||
Cost of goods sold | 17,986 | 22,018 | 36,134 | 38,658 |
Other revenues | ||||
Revenues: | ||||
Revenue | 13,060 | 12,883 | 26,879 | 25,687 |
Occupancy expenses—franchised restaurants | ||||
Operating costs and expenses: | ||||
Cost of goods sold | $ 18,133 | $ 19,697 | $ 37,632 | $ 39,172 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
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Other comprehensive income (loss), net: | ||||
Net income | $ 36,450 | $ 59,622 | $ 88,563 | $ 111,945 |
Effect of foreign currency translation, net of deferred tax expense (benefit) of $(3) and $(18) for the three months ended June 27, 2020 and June 29, 2019, respectively, and $(65) and $8 for the six months ended June 27, 2020 and June 29, 2019, respectively. | 1,476 | (1,660) | (4,911) | (4,013) |
Other, net | (2) | 42 | (593) | (131) |
Total other comprehensive income (loss), net | 1,474 | (1,618) | (5,504) | (4,144) |
Comprehensive income | $ 37,924 | $ 58,004 | $ 83,059 | $ 107,801 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
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Statement of Comprehensive Income [Abstract] | ||||
Deferred tax effect, foreign currency translation | $ (3) | $ (18) | $ 65 | $ (8) |
Description of Business and Organization |
6 Months Ended |
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Jun. 27, 2020 | |
Text Block [Abstract] | |
Description of Business and Organization | Description of business and organization Dunkin’ Brands Group, Inc. (“DBGI”), together with its consolidated subsidiaries, is one of the world’s leading franchisors of restaurants serving coffee and baked goods, as well as ice cream, within the quick service restaurant segment of the restaurant industry. We franchise and license a system of both traditional and nontraditional quick service restaurants. Through our Dunkin’ brand, we franchise restaurants featuring coffee, espresso, donuts, bagels, breakfast sandwiches, and related products. Additionally, we license Dunkin’ brand products sold in certain retail outlets such as retail packaged coffee, Dunkin’ K-Cup® pods, and ready-to-drink bottled iced coffee. Through our Baskin-Robbins brand, we franchise restaurants featuring ice cream, frozen beverages, and related products. Additionally, we distribute Baskin-Robbins ice cream products to certain international markets for sale in Baskin-Robbins restaurants and certain retail outlets. Throughout these unaudited consolidated financial statements, “Dunkin’ Brands,” “the Company,” “we,” “us,” “our,” and “management” refer to DBGI and its consolidated subsidiaries taken as a whole.
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | (a) Disaggregation of revenue Revenues are disaggregated by timing of revenue recognition related to contracts with customers (“ASC 606”) and reconciled to reportable segment revenues as follows (in thousands):
(b) Contract balances Information about receivables, contract assets, and deferred revenue subject to ASC 606 is as follows (in thousands):
Receivables relate primarily to payments due for royalties, franchise fees, advertising fees, sales of ice cream and other products, and licensing fees. Contract assets relate primarily to consideration paid to customers, including franchisee incentives, that exceeds the fixed consideration received for certain contracts, net of any revenue recognized. Deferred revenue primarily represents the Company’s remaining performance obligations under its franchise and license agreements for which consideration has been received or is receivable, and is generally recognized on a straight-line basis over the remaining term of the related agreement. The decrease in the deferred revenue balance as of June 27, 2020 was driven primarily by $18.4 million of revenues recognized that were included in the opening deferred revenue balance as of December 28, 2019, as well as franchisee incentives provided during fiscal year 2020, offset by cash payments received or due in advance of satisfying our performance obligations. (c) Transaction price allocated to remaining performance obligations Estimated revenue expected to be recognized in the future related to performance obligations that are either unsatisfied or partially satisfied at June 27, 2020 is as follows (in thousands):
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Summary of Significant Accounting Policies |
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Disclosure Summary Of Significant Accounting Policies Additional Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of significant accounting policies (a) Unaudited consolidated financial statements The consolidated balance sheet as of June 27, 2020, the consolidated statements of operations, comprehensive income, and stockholders' deficit for each of the three- and six-month periods ended June 27, 2020 and June 29, 2019, and the consolidated statements of cash flows for each of the six-month periods ended June 27, 2020 and June 29, 2019 are unaudited. The accompanying unaudited consolidated financial statements include the accounts of DBGI and its consolidated subsidiaries and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. All significant transactions and balances between subsidiaries and affiliates have been eliminated in consolidation. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements in accordance with U.S. GAAP have been recorded. Such adjustments consisted only of normal recurring items. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 28, 2019, included in the Company's Annual Report on Form 10-K. (b) Fiscal year The Company operates and reports financial information on a 52- or 53-week year on a 13-week quarter basis with the fiscal year ending on the last Saturday in December and fiscal quarters ending on the 13th Saturday of each quarter (or 14th Saturday when applicable with respect to the fourth fiscal quarter). The data periods contained within the three- and six-month periods ended June 27, 2020 and June 29, 2019 reflect the results of operations for the 13-week and 26-week periods ended on those dates. Operating results for the three- and six-month periods ended June 27, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 26, 2020. (c) Cash, cash equivalents, and restricted cash In accordance with the Company’s securitized financing facility, certain cash accounts have been established in the name of Citibank, N.A. (the “Trustee”) for the benefit of the Trustee and the noteholders, and are restricted in their use. The Company holds restricted cash which primarily represents (i) cash collections held by the Trustee, (ii) interest, principal, and commitment fee reserves held by the Trustee related to the Company’s notes (see note 4), and (iii) real estate reserves used to pay real estate obligations. Cash, cash equivalents, and restricted cash within the consolidated balance sheets that are included in the consolidated statements of cash flows as of June 27, 2020 and December 28, 2019 were as follows (in thousands):
(d) Fair value of financial instruments Financial assets and liabilities are categorized, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. Observable market data, when available, is required to be used in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Financial assets and liabilities measured at fair value on a recurring basis as of June 27, 2020 and December 28, 2019 are summarized as follows (in thousands):
The deferred compensation liabilities relate to the Dunkin’ Brands, Inc. non-qualified deferred compensation plans (“NQDC Plans”), which allow for pre-tax deferral of compensation for certain qualifying employees and directors. Changes in the fair value of the deferred compensation liabilities are derived using quoted prices in active markets of the asset selections made by the participants. The deferred compensation liabilities are classified within Level 2, as defined under U.S. GAAP, because their inputs are derived principally from observable market data by correlation to hypothetical investments. The Company holds company-owned life insurance policies to offset the Company’s liabilities under the NQDC Plans. The changes in the fair value of any company-owned life insurance policies are derived using determinable cash surrender value. As such, the company-owned life insurance policies are classified within Level 2, as defined under U.S. GAAP. The carrying value and estimated fair value of total long-term debt as of June 27, 2020 and December 28, 2019 were as follows (in thousands):
The estimated fair value of our long-term debt is estimated primarily based on current market rates for debt with similar terms and remaining maturities or current midpoint prices for our long-term debt. Judgment is required to develop these estimates. As such, the estimated fair value of long-term debt is classified within Level 2, as defined under U.S. GAAP. (e) Concentration of credit risk The Company is subject to credit risk through its accounts receivable consisting primarily of amounts due from franchisees and licensees for franchise fees, royalty income, advertising fees, and sales of ice cream and other products. In addition, we have note and lease receivables from certain of our franchisees and licensees. The financial condition of these franchisees and licensees is largely dependent upon the underlying business trends of our brands and market conditions within the quick service restaurant industry. This concentration of credit risk is mitigated, in part, by the large number of franchisees and licensees of each brand and the short-term nature of the franchise and license fee and lease receivables. As of June 27, 2020 and December 28, 2019, one master licensee, including its majority-owned subsidiaries, accounted for approximately 12% and 15%, respectively, of total accounts and notes receivable. No individual franchisee or master licensee accounted for more than 10% of total revenues for any of the three- and six-month periods ended June 27, 2020 and June 29, 2019. Additionally, the Company engages various third parties to manufacture and/or distribute certain Dunkin' and Baskin-Robbins products under licensing arrangements. As of June 27, 2020, one of these third parties accounted for approximately 13% of total accounts and notes receivable. No individual third party accounted for more than 10% of total accounts and notes receivable as of December 28, 2019. No individual third party accounted for more than 10% of total revenues for any of the three- and six-month periods ended June 27, 2020 and June 29, 2019. (f) Recent accounting pronouncements In June 2016, the Financial Accounting Standards Board (the “FASB”) issued new guidance for financial instruments which requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted this new guidance in fiscal year 2020 using the modified retrospective transition method. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. The Company closely monitors the financial condition of our franchisees, licensees, and other third parties and estimates the allowance for credit losses based upon the lifetime expected loss on receivables. These estimates are based on historical collection experience with our franchisees, licensees, and other third parties as well as other factors, including those related to current market conditions and events. Included in the allowance for credit losses is a provision for uncollectible royalty, franchise fee, advertising fee, ice cream, and licensing fee receivables (see note 13). The Company also monitors its off-balance sheet exposures under its letters of credit and supply chain and other guarantees. None of these arrangements has or is likely to have a material effect on the Company’s results of operations, financial condition, revenues, expenses or liquidity. (g) Subsequent events Subsequent events have been evaluated up through the date that these consolidated financial statements were filed.
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt at June 27, 2020 and December 28, 2019 consisted of the following (in thousands):
The Company's outstanding debt as of June 27, 2020 included Series 2017-1 3.629% Fixed Rate Senior Secured Notes, Class A-2-I (the “2017 Class A-2-I Notes”), Series 2017-1 4.030% Fixed Rate Senior Secured Notes, Class A-2-II (the “2017 Class A-2-II Notes” and, together with the 2017 Class A-2-I Notes, the “2017 Class A-2 Notes”), Series 2019-1 3.787% Fixed Rate Senior Secured Notes, Class A-2-I (the “2019 Class A-2-I Notes”), Series 2019-1 4.021% Fixed Rate Senior Secured Notes, Class A-2-II (the “2019 Class A-2-II Notes”), and Series 2019-1 4.352% Fixed Rate Senior Secured Notes, Class A-2-III (the “2019 Class A-2-III Notes” and, together with the 2019 Class A-2-I Notes and 2019 Class A-2-II Notes, the “2019 Class A-2 Notes”) issued by DB Master Finance LLC (the “Master Issuer”), a limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiary of DBGI. In addition, the Master Issuer issued Series 2019-1 Variable Funding Senior Secured Notes, Class A-1 (the “2019 Variable Funding Notes” and, together with the 2019 Class A-2 Notes, the “2019 Notes”), which allow for the issuance of up to $150.0 million of 2019 Variable Funding Notes and certain other credit instruments, including letters of credit. No principal payments are required on the Company's outstanding debt if a specified leverage ratio, which is a measure of outstanding debt to earnings before interest, taxes, depreciation, and amortization, adjusted for certain items (as specified in the base indenture and related supplemental indentures, collectively, the “Indenture”), is less than or equal to 5.0 to 1.0. As of March 28, 2020, the Company's leverage ratio was less than 5.0 to 1.0. As such, the Company did not make the scheduled principal payment of $7.8 million in May 2020. As of June 27, 2020, the Company's leverage ratio was greater than 5.0 to 1.0. As such, the Company intends to make the next scheduled principal payment of $7.8 million in August 2020. The Company has classified payments that are expected to be made within the next twelve month period as current portion of long-term debt in the consolidated balance sheet. On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus disease (“COVID-19”) as a pandemic. On March 16, 2020, the Company borrowed $116.0 million against the 2019 Variable Funding Notes as a precautionary measure given the market uncertainty arising from COVID-19 and to further strengthen financial flexibility. Borrowings under the 2019 Variable Funding Notes bear interest at a rate equal to a LIBOR rate plus 1.50%. The Company repaid all borrowings under the 2019 Variable Funding Notes during the second fiscal quarter of 2020. As of each of June 27, 2020 and December 28, 2019, $33.1 million of letters of credit were outstanding against the 2019 Variable Funding Notes, which related primarily to interest reserves required under the Indenture. There were no amounts drawn down on these letters of credit as of June 27, 2020 or December 28, 2019. The 2017 Class A-2 Notes and 2019 Notes were each issued in a securitization transaction pursuant to which most of the Company’s domestic and certain of its foreign revenue-generating assets, consisting principally of franchise-related agreements, real estate assets, and intellectual property and license agreements for the use of intellectual property, are held by the Master Issuer and certain other limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiaries of the Company that act as guarantors of the 2017 Class A-2 Notes and 2019 Notes and that pledged substantially all of their assets to secure the 2017 Class A-2 Notes and 2019 Notes.
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Other Current Liabilities |
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Other Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other current liabilities Other current liabilities consisted of the following (in thousands):
The franchisee profit-sharing liability represents amounts owed to franchisees from the net profits primarily on the sale of Dunkin’ K-Cup® pods, retail packaged coffee, and ready-to-drink bottled iced coffee in certain retail outlets.
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Segment Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment information The Company is strategically aligned into two global brands, Dunkin’ and Baskin-Robbins, which are further segregated between U.S. operations and international operations. Additionally, the Company administers and directs the development of all advertising and promotional programs in the U.S. As such, the Company has determined that it has five reportable segments: Dunkin’ U.S., Baskin-Robbins U.S., Dunkin’ International, Baskin-Robbins International, and U.S. Advertising Funds. Dunkin’ U.S., Baskin-Robbins U.S., and Dunkin’ International primarily derive their revenues through royalty income and franchise fees. Baskin-Robbins U.S. also derives revenue through license fees from a third-party license agreement and rental income. Dunkin’ U.S. also derives revenue through rental income. Baskin-Robbins International primarily derives its revenues from sales of ice cream products, as well as royalty income and franchise fees. U.S. Advertising Funds primarily derive revenues through continuing advertising fees from Dunkin’ and Baskin-Robbins franchisees. The operating results of each segment are regularly reviewed and evaluated separately by the Company’s senior management, which includes, but is not limited to, the chief executive officer. Senior management primarily evaluates the performance of its segments and allocates resources to them based on operating income adjusted for amortization of intangible assets, long-lived asset impairment charges, and certain non-recurring, infrequent or unusual charges, which does not reflect the allocation of any corporate charges. This profitability measure is referred to as segment profit. When senior management reviews a balance sheet, it is at a consolidated level. The accounting policies applicable to each segment are generally consistent with those used in the consolidated financial statements. Revenues for all operating segments include only transactions with unaffiliated customers and include no intersegment revenues. Revenues reported as “Other” include revenues earned through certain licensing arrangements with third parties in which our brand names are used, including the licensing fees earned from the Dunkin’ K-Cup® pod licensing agreement and sales of Dunkin’ branded ready-to-drink bottled iced coffee and retail packaged coffee, revenues generated from online training programs for franchisees, advertising fees and related income from international advertising funds, breakage and other revenue related to the gift card program, and corporate financial relief provided to franchisees, all of which are not allocated to a specific segment. Revenues by segment were as follows (in thousands):
Amounts included in “Corporate and other” in the segment profit table below include corporate overhead costs, such as payroll and related benefit costs and professional services, net of “Other” revenues reported above. Segment profit by segment was as follows (in thousands):
Net income of equity method investments is included in segment profit for the Dunkin’ International and Baskin-Robbins International reportable segments. Amounts reported as “Other” in the table below include the reduction in depreciation and amortization, net of tax, reported by our equity method investees as a result of previously recorded impairment charges. Net income of equity method investments by reportable segment was as follows (in thousands):
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Stockholders’ Equity (Deficit) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ deficit (a) Treasury stock During the six months ended June 27, 2020, the Company repurchased a total of 880,933 shares of common stock in the open market for total consideration of $64.3 million. The Company accounts for treasury stock under the cost method based on the cost of the shares on the dates of repurchase plus any direct costs incurred. During the six months ended June 27, 2020, the Company retired 880,933 shares of treasury stock repurchased in the open market. The repurchase and retirement of these shares of treasury stock resulted in a decrease in additional paid-in capital of $5.6 million and an increase in accumulated deficit of $58.7 million. (b) Equity incentive plans During the six months ended June 27, 2020, the Company granted stock options to purchase 681,862 shares of common stock and 59,944 restricted stock units (“RSUs”) to certain employees and members of our board of directors. The stock options vest in equal annual amounts over a four-year period subsequent to the grant date, and have a maximum contractual term of seven years. The stock options were granted with a weighted-average exercise price of $75.80 per share and had a weighted-average grant-date fair value of $11.55 per share. The RSUs granted to certain employees and members of our board of directors generally vest in equal annual amounts over a three-year period and a one-year period, respectively, subsequent to the grant date and had a weighted-average grant-date fair value of $69.75 per unit. In addition, the Company granted 45,964 performance stock units (“PSUs”) to certain employees during the six months ended June 27, 2020. These PSUs are generally eligible to cliff-vest approximately three years from the grant date. Of the total PSUs granted, 21,225 PSUs are subject to a service condition and a market vesting condition linked to the level of total shareholder return received by the Company’s stockholders during the performance period measured against the companies in the S&P 500 Composite Index (“TSR PSUs”). The remaining 24,739 PSUs granted are subject to a service condition and a performance vesting condition based on the level of adjusted operating income growth achieved over the performance period (“AOI PSUs”). The maximum vesting percentage that could be realized for each of the TSR PSUs and the AOI PSUs is 200% based on the level of performance achieved for the respective awards. All of the PSUs are also subject to a one-year post-vesting holding period. The TSR PSUs were valued based on a Monte Carlo simulation model to reflect the impact of the total shareholder return market condition, resulting in a weighted-average grant-date fair value of $81.64 per unit. The probability of satisfying a market condition is considered in the estimation of the grant-date fair value for TSR PSUs and the compensation cost is not reversed if the market condition is not achieved, provided the requisite service has been provided. The AOI PSUs had a weighted-average grant-date fair value of $72.95 per unit. Total compensation cost for the AOI PSUs is determined based on the most likely outcome of the performance condition and the number of awards expected to vest based on the outcome. Total compensation expense related to all share-based awards was $2.8 million and $3.7 million for the three months ended June 27, 2020 and June 29, 2019, respectively, and $6.2 million and $7.3 million for the six months ended June 27, 2020 and June 29, 2019, respectively, and was included in general and administrative expenses in the consolidated statements of operations. (c) Accumulated other comprehensive loss The changes in the components of accumulated other comprehensive loss were as follows (in thousands):
(d) Dividends The Company paid a quarterly dividend of $0.4025 per share of common stock on March 18, 2020, totaling approximately $33.1 million. On April 30, 2020, the Company announced that its board of directors had suspended the Company's regular dividend program in response to the uncertainty arising from the COVID-19 pandemic. On July 30, 2020, the Company announced that its board of directors had reinstated the Company's regular dividend program and declared a dividend of $0.4025 per share of common stock, payable on September 9, 2020 to shareholders of record as of the close of business on September 1, 2020.
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Earnings per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per share The computation of basic and diluted earnings per share of common stock is as follows (in thousands, except for share and per share data):
The weighted-average number of shares of common stock in the common diluted earnings per share calculation includes the dilutive effect of 282,682 and 918,392 equity awards for the three months ended June 27, 2020 and June 29, 2019, respectively, and includes the dilutive effect of 414,840 and 864,838 equity awards for the six months ended June 27, 2020 and June 29, 2019, respectively, using the treasury stock method. The weighted-average number of shares of common stock in the common diluted earnings per share calculation for all periods excludes all contingently issuable equity awards outstanding for which the contingent vesting criteria were not yet met as of the fiscal period end. As of June 27, 2020 and June 29, 2019, there were 86,176 and 40,340 shares, respectively, related to equity awards that were contingently issuable and for which the contingent vesting criteria were not yet met as of the fiscal period end. Additionally, the weighted-average number of shares of common stock in the common diluted earnings per share calculation excludes 2,020,419 and 656,958 equity awards for the three months ended June 27, 2020 and June 29, 2019, respectively, and 1,687,109 and 663,951 equity awards for the six months ended June 27, 2020 and June 29, 2019, respectively, as they would be antidilutive.
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Commitments and Contingencies |
6 Months Ended |
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Jun. 27, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and contingencies (a) Supply chain guarantees The Company has entered into various agreements with suppliers of franchisee products, the majority of which contain guarantees by the Company related to franchisees' purchases of certain volumes of products over specified periods. The Company's guarantees decrease as franchisees purchase products over their respective terms of the agreements. The guarantees have varying terms, many of which are one year or less, and the latest of which expires in 2022. As of June 27, 2020 and December 28, 2019, the Company was contingently liable under such supply chain agreements for approximately $70.3 million and $100.9 million, respectively. The Company assesses the risk of performing under each of these guarantees on a quarterly basis, and, based on various factors including internal forecasts, prior history, and ability to extend contract terms, the Company accrued an inconsequential amount of reserves related to supply chain guarantees as of June 27, 2020 and December 28, 2019. (b) Letters of credit As of each of June 27, 2020 and December 28, 2019, the Company had standby letters of credit outstanding for a total of $33.1 million. There were no amounts drawn down on these letters of credit as of each of June 27, 2020 and December 28, 2019. (c) Legal matters The Company is engaged in several matters of litigation arising in the ordinary course of its business as a franchisor. Such matters include disputes related to compliance with the terms of franchise and development agreements, including claims or threats of claims of breach of contract, negligence, and other alleged violations by the Company. As of each of June 27, 2020 and December 28, 2019, an inconsequential amount was accrued related to outstanding litigation.
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Related-Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related-Party Transactions | Related-party transactions The Company recognized revenues from its equity method investees, consisting of royalty income and sales of ice cream and other products, as follows (in thousands):
As of June 27, 2020 and December 28, 2019, the Company had $4.0 million and $3.7 million, respectively, of receivables from its equity method investees, which were recorded in accounts receivable, net of allowances, in the consolidated balance sheets. The Company made net payments to its equity method investees totaling approximately $1.0 million and $0.7 million during the three months ended June 27, 2020 and June 29, 2019, respectively, and $2.3 million and $1.8 million for the six months ended June 27, 2020 and June 29, 2019, respectively, primarily for the purchase of ice cream products.
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Advertising Funds |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising funds | Advertising funds Assets and liabilities of the advertising funds, which are restricted in their use, included in the consolidated balance sheets were as follows (in thousands):
(a) Amounts represent franchisee incentives that have been deferred and are being recognized over the terms of the respective franchise agreements.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company is party as a lessor and/or lessee to various leases for restaurants and other properties, including land and buildings, as well as leases for office equipment and automobiles. In addition, the Company has leased and subleased land and buildings to others, primarily franchisees. Rental income consisted of the following (in thousands):
As a result of the COVID-19 pandemic, the Company is waiving up to one month of rental payments and allowed franchisees to defer two months of rental payments on the approximately 900 properties leased by the Company to franchisees. Additionally, on properties the Company leases from third-party lessors, certain lessors provided waivers of rental payments, which the Company passed through to its franchisees, or permitted the short-term deferral of rental payments. The FASB staff issued interpretive guidance on the application of lease accounting guidance related to lease concessions as a result of the COVID-19 pandemic. Under existing lease accounting guidance, certain rent waivers and deferrals provided to franchisees or received from lessors would be accounted for as lease modifications. The interpretive guidance provides companies the option to account for eligible lease concessions either as if the rent concessions were part of the enforceable rights and obligations under the original lease contracts, or as lease modifications under the existing guidance. The Company has elected to account for eligible lease concessions as if they were part of the enforceable rights and obligations under the original lease contracts. Accordingly, the Company has not remeasured the related lease assets or lease liabilities for eligible leases, and has recognized waivers of rental payments as reductions of variable rental income and variable occupancy expenses for leases where the Company is the lessor and lessee, respectively. The deferral of rental payments had no impact on the Company’s recognition of rental income or occupancy expenses for the three or six months ended June 27, 2020. Variable rental income presented in the table above has been reduced by approximately $3 million of rent waivers being provided to the Company's franchisees for each of the three and six months ended June 27, 2020. Occupancy expenses—franchised restaurants in the consolidated statements of operations has been reduced by approximately $1 million of rent waivers received from lessors for each of the three and six months ended June 27, 2020.
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Allowances for Accounts and Notes Receivable Allowances for Accounts and Notes Receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowances for Accounts and Notes Receivable | Allowances for accounts and notes receivable The changes in the allowances for accounts and notes receivable were as follows (in thousands):
(b) Balance is included in accounts receivable, net; notes and other receivables, net; and other assets in the consolidated balance sheets.
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COVID-19 Pandemic |
6 Months Ended |
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Jun. 27, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |
COVID-19 Pandemic | COVID-19 Pandemic On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. The pandemic had an unfavorable impact on the Company’s business, financial condition, and results of operations for the three and six months ended June 27, 2020, including temporary closures of restaurants and decreased traffic. In response to the ongoing COVID-19 pandemic, the Company has taken a series of actions to preserve financial flexibility and support franchisees during this time of uncertainty. These actions include temporarily extending payment terms for royalties and advertising fees for franchisees in the U.S. and Canada from 12 to 45 days through mid-May, as well as providing payment plan options for these deferred fees, to provide franchisees with more financial flexibility to better support their employees and guests. Additionally, the Company provided extended payment terms and payment plan options to franchisees and licensees in certain international markets. The Company also provided $8.0 million of corporate financial relief to franchisees in the U.S. that were most significantly impacted by the pandemic. In addition, the Company is waiving up to one month of rental payments and allowed franchisees to defer two months of rental payments on the approximately 900 properties leased by the Company to franchisees (see note 12). While it is not possible at this time to estimate the full impact that the pandemic could have on our business due to numerous uncertainties, the continued spread of COVID-19 and the measures taken by local and national governments have disrupted and are expected to continue to disrupt our operations and may also impact the supply chain, resulting in an adverse impact on our business, financial condition, and results of operations.
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Summary of Significant Accounting Policies (Policies) |
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Disclosure Summary Of Significant Accounting Policies Additional Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited Financial Statements | Unaudited consolidated financial statements The consolidated balance sheet as of June 27, 2020, the consolidated statements of operations, comprehensive income, and stockholders' deficit for each of the three- and six-month periods ended June 27, 2020 and June 29, 2019, and the consolidated statements of cash flows for each of the six-month periods ended June 27, 2020 and June 29, 2019 are unaudited. The accompanying unaudited consolidated financial statements include the accounts of DBGI and its consolidated subsidiaries and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. All significant transactions and balances between subsidiaries and affiliates have been eliminated in consolidation. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements in accordance with U.S. GAAP have been recorded. Such adjustments consisted only of normal recurring items. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 28, 2019, included in the Company's Annual Report on Form 10-K.
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Fiscal Year | Fiscal year The Company operates and reports financial information on a 52- or 53-week year on a 13-week quarter basis with the fiscal year ending on the last Saturday in December and fiscal quarters ending on the 13th Saturday of each quarter (or 14th Saturday when applicable with respect to the fourth fiscal quarter). The data periods contained within the three- and six-month periods ended June 27, 2020 and June 29, 2019 reflect the results of operations for the 13-week and 26-week periods ended on those dates. Operating results for the three- and six-month periods ended June 27, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 26, 2020.
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Restricted Cash | Cash, cash equivalents, and restricted cash In accordance with the Company’s securitized financing facility, certain cash accounts have been established in the name of Citibank, N.A. (the “Trustee”) for the benefit of the Trustee and the noteholders, and are restricted in their use. The Company holds restricted cash which primarily represents (i) cash collections held by the Trustee, (ii) interest, principal, and commitment fee reserves held by the Trustee related to the Company’s notes (see note 4), and (iii) real estate reserves used to pay real estate obligations. Cash, cash equivalents, and restricted cash within the consolidated balance sheets that are included in the consolidated statements of cash flows as of June 27, 2020 and December 28, 2019 were as follows (in thousands):
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Fair Value of Financial Instruments | Fair value of financial instruments Financial assets and liabilities are categorized, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. Observable market data, when available, is required to be used in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Financial assets and liabilities measured at fair value on a recurring basis as of June 27, 2020 and December 28, 2019 are summarized as follows (in thousands):
The deferred compensation liabilities relate to the Dunkin’ Brands, Inc. non-qualified deferred compensation plans (“NQDC Plans”), which allow for pre-tax deferral of compensation for certain qualifying employees and directors. Changes in the fair value of the deferred compensation liabilities are derived using quoted prices in active markets of the asset selections made by the participants. The deferred compensation liabilities are classified within Level 2, as defined under U.S. GAAP, because their inputs are derived principally from observable market data by correlation to hypothetical investments. The Company holds company-owned life insurance policies to offset the Company’s liabilities under the NQDC Plans. The changes in the fair value of any company-owned life insurance policies are derived using determinable cash surrender value. As such, the company-owned life insurance policies are classified within Level 2, as defined under U.S. GAAP. The carrying value and estimated fair value of total long-term debt as of June 27, 2020 and December 28, 2019 were as follows (in thousands):
The estimated fair value of our long-term debt is estimated primarily based on current market rates for debt with similar terms and remaining maturities or current midpoint prices for our long-term debt. Judgment is required to develop these estimates. As such, the estimated fair value of long-term debt is classified within Level 2, as defined under U.S. GAAP.
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Concentration of Credit Risk | Concentration of credit risk The Company is subject to credit risk through its accounts receivable consisting primarily of amounts due from franchisees and licensees for franchise fees, royalty income, advertising fees, and sales of ice cream and other products. In addition, we have note and lease receivables from certain of our franchisees and licensees. The financial condition of these franchisees and licensees is largely dependent upon the underlying business trends of our brands and market conditions within the quick service restaurant industry. This concentration of credit risk is mitigated, in part, by the large number of franchisees and licensees of each brand and the short-term nature of the franchise and license fee and lease receivables. As of June 27, 2020 and December 28, 2019, one master licensee, including its majority-owned subsidiaries, accounted for approximately 12% and 15%, respectively, of total accounts and notes receivable. No individual franchisee or master licensee accounted for more than 10% of total revenues for any of the three- and six-month periods ended June 27, 2020 and June 29, 2019. Additionally, the Company engages various third parties to manufacture and/or distribute certain Dunkin' and Baskin-Robbins products under licensing arrangements. As of June 27, 2020, one of these third parties accounted for approximately 13% of total accounts and notes receivable. No individual third party accounted for more than 10% of total accounts and notes receivable as of December 28, 2019. No individual third party accounted for more than 10% of total revenues for any of the three- and six-month periods ended June 27, 2020 and June 29, 2019.
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Recent Accounting Pronouncements | Recent accounting pronouncements In June 2016, the Financial Accounting Standards Board (the “FASB”) issued new guidance for financial instruments which requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted this new guidance in fiscal year 2020 using the modified retrospective transition method. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. The Company closely monitors the financial condition of our franchisees, licensees, and other third parties and estimates the allowance for credit losses based upon the lifetime expected loss on receivables. These estimates are based on historical collection experience with our franchisees, licensees, and other third parties as well as other factors, including those related to current market conditions and events. Included in the allowance for credit losses is a provision for uncollectible royalty, franchise fee, advertising fee, ice cream, and licensing fee receivables (see note 13). The Company also monitors its off-balance sheet exposures under its letters of credit and supply chain and other guarantees. None of these arrangements has or is likely to have a material effect on the Company’s results of operations, financial condition, revenues, expenses or liquidity.
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Subsequent Events | Subsequent events Subsequent events have been evaluated up through the date that these consolidated financial statements were filed.
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | Revenues are disaggregated by timing of revenue recognition related to contracts with customers (“ASC 606”) and reconciled to reportable segment revenues as follows (in thousands):
(a) Revenues reported as “Other” include revenues earned through certain licensing arrangements, revenues generated from online training programs for franchisees, advertising fees and related income from international advertising funds, and breakage and other revenue related to the gift card program, all of which are not allocated to a specific segment. Additionally, the allocation of royalty income from sales of ice cream and other products, certain franchisee incentives, and corporate financial relief provided to franchisees are reported as “Other.”
(a) Revenues reported as “Other” include revenues earned through certain licensing arrangements, revenues generated from online training programs for franchisees, advertising fees and related income from international advertising funds, and breakage and other revenue related to the gift card program, all of which are not allocated to a specific segment. Additionally, the allocation of royalty income from sales of ice cream and other products is reported as “Other.”
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Contract balances | Information about receivables, contract assets, and deferred revenue subject to ASC 606 is as follows (in thousands):
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Estimated revenue expected to be recognized in the future related to performance obligations | Estimated revenue expected to be recognized in the future related to performance obligations that are either unsatisfied or partially satisfied at June 27, 2020 is as follows (in thousands):
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Summary of Significant Accounting Policies (Tables) |
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Disclosure Summary Of Significant Accounting Policies Additional Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of cash, cash equivalents and restricted cash | Cash, cash equivalents, and restricted cash within the consolidated balance sheets that are included in the consolidated statements of cash flows as of June 27, 2020 and December 28, 2019 were as follows (in thousands):
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis as of June 27, 2020 and December 28, 2019 are summarized as follows (in thousands):
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The carrying value and estimated fair value of total long-term debt as of June 27, 2020 and December 28, 2019 were as follows (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Debt at June 27, 2020 and December 28, 2019 consisted of the following (in thousands):
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Other Current Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other current liabilities consisted of the following (in thousands):
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues by Segment | Revenues by segment were as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Profit by Segment | Segment profit by segment was as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity in Net Income of Joint Ventures Reportable Segment | Net income of equity method investments by reportable segment was as follows (in thousands):
Assets and liabilities of the advertising funds, which are restricted in their use, included in the consolidated balance sheets were as follows (in thousands):
(a) Amounts represent franchisee incentives that have been deferred and are being recognized over the terms of the respective franchise agreements.
|
Stockholders’ Equity (Deficit) and Redeemable Noncontrolling Interests (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Components of Accumulated Other Comprehensive Income | The changes in the components of accumulated other comprehensive loss were as follows (in thousands):
|
Earnings per Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 27, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Common Share | The computation of basic and diluted earnings per share of common stock is as follows (in thousands, except for share and per share data):
|
Related-Party Transactions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | The Company recognized revenues from its equity method investees, consisting of royalty income and sales of ice cream and other products, as follows (in thousands):
|
Advertising Funds (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities of Adverting Funds | Net income of equity method investments by reportable segment was as follows (in thousands):
Assets and liabilities of the advertising funds, which are restricted in their use, included in the consolidated balance sheets were as follows (in thousands):
(a) Amounts represent franchisee incentives that have been deferred and are being recognized over the terms of the respective franchise agreements.
|
Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 27, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | Rental income consisted of the following (in thousands):
|
Allowances for Accounts and Notes Receivable (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | The changes in the allowances for accounts and notes receivable were as follows (in thousands):
(b) Balance is included in accounts receivable, net; notes and other receivables, net; and other assets in the consolidated balance sheets.
|
Revenue Recognition - Additional Information (Details) $ in Thousands |
Jun. 27, 2020
USD ($)
|
---|---|
Disaggregation of Revenue [Line Items] | |
Revenue, remaining performance obligation | $ 287,567 |
Restaurants, Not Yet Open [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue, remaining performance obligation | $ 45,500 |
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 27, 2020 |
Dec. 28, 2019 |
|
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 132,890 | $ 86,104 |
Other assets | 6,511 | 4,894 |
Current | 27,146 | 27,213 |
Long-term | 297,509 | 320,457 |
Total | 324,655 | $ 347,670 |
Deferred revenue, revenue recognized | $ 18,400 |
Summary of Significant Accounting Policies - Schedule of cash, cash equivalents, and restricted cash (Details) - USD ($) $ in Thousands |
Jun. 27, 2020 |
Dec. 28, 2019 |
Jun. 29, 2019 |
Dec. 29, 2018 |
---|---|---|---|---|
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 515,857 | $ 621,152 | ||
Restricted cash | 95,060 | 85,644 | ||
Restricted cash, included in Other assets | 549 | 1,181 | ||
Total cash, cash equivalents, and restricted cash | $ 611,466 | $ 707,977 | $ 564,416 | $ 598,321 |
Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands |
Jun. 27, 2020 |
Dec. 28, 2019 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Prepaid expenses and other current assets | $ 62,813 | $ 50,611 |
Operating lease assets | 358,705 | 371,264 |
Other intangibles assets, net | 1,293,530 | 1,302,721 |
Other assets | 68,932 | 72,520 |
Operating lease liabilities | 36,741 | 35,863 |
Operating lease liabilities | 367,148 | 380,647 |
Other long-term liabilities | $ 21,114 | $ 18,218 |
Revenue Recognition - Impacts of Revenue Guidance, Consolidated Statements of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
|
Revenues: | ||||
Revenue | $ 287,376 | $ 359,337 | $ 610,520 | $ 678,428 |
Operating costs and expenses: | ||||
Advertising expenses | 111,081 | 130,961 | 229,350 | 249,052 |
General and administrative expenses | 52,159 | 59,922 | 112,694 | 116,125 |
Depreciation | 5,771 | 4,711 | 10,820 | 9,332 |
Amortization of other intangible assets | 4,588 | 4,626 | 9,180 | 9,259 |
Long-lived asset impairment charges | 486 | 2 | 560 | 325 |
Total operating costs and expenses | 210,204 | 241,937 | 436,370 | 461,923 |
Net income of equity method investments | 4,283 | 4,427 | 7,949 | 6,657 |
Other operating income, net | 161 | 825 | 829 | 862 |
Operating income | 81,616 | 122,652 | 182,928 | 224,024 |
Other income (expense), net: | ||||
Interest income | 312 | 3,079 | 2,367 | 4,910 |
Interest expense | (32,650) | (32,842) | (64,687) | (64,971) |
Other income (loss), net | 214 | (46) | (456) | (50) |
Total other expense, net | (32,124) | (42,885) | (62,776) | (73,187) |
Income before income taxes | 49,492 | 79,767 | 120,152 | 150,837 |
Provision for income taxes | 13,042 | 20,145 | 31,589 | 38,892 |
Net income | $ 36,450 | $ 59,622 | $ 88,563 | $ 111,945 |
Common-basic (in dollars per share) | $ 0.44 | $ 0.72 | $ 1.07 | $ 1.35 |
Common-diluted (in dollars per share) | $ 0.44 | $ 0.71 | $ 1.07 | $ 1.34 |
Franchise fees and royalty income | ||||
Revenues: | ||||
Revenue | $ 115,965 | $ 158,258 | $ 255,441 | $ 297,586 |
Advertising fees and related income | ||||
Revenues: | ||||
Revenue | 109,631 | 129,259 | 226,601 | 246,457 |
Rental income | ||||
Revenues: | ||||
Revenue | 26,017 | 31,679 | 54,949 | 60,707 |
Ice cream and other products | ||||
Revenues: | ||||
Revenue | 22,703 | 27,258 | 46,650 | 47,991 |
Operating costs and expenses: | ||||
Cost of goods sold | 17,986 | 22,018 | 36,134 | 38,658 |
Other revenues | ||||
Revenues: | ||||
Revenue | 13,060 | 12,883 | 26,879 | 25,687 |
Occupancy expenses—franchised restaurants | ||||
Operating costs and expenses: | ||||
Cost of goods sold | 18,133 | 19,697 | 37,632 | 39,172 |
Accounting Standards Update 2014-09 | ||||
Revenues: | ||||
Revenue | $ 252,145 | $ 323,383 | $ 539,170 | $ 606,066 |
Summary of Significant Accounting Policies - Recent Adopted Accounting Pronouncements (Additional Information) (Details) - USD ($) $ in Thousands |
Jun. 27, 2020 |
Dec. 28, 2019 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Current | $ 27,146 | $ 27,213 |
Contract with Customer, Liability, Noncurrent | 297,509 | 320,457 |
Other current liabilities | 368,260 | 386,050 |
Other long-term liabilities | 21,114 | 18,218 |
Operating lease assets | $ 358,705 | $ 371,264 |
Revenue Recognition - Impacts of Revenue Guidance, Cash Flow (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net cash used in operating activities | $ 11,721 | $ 53,077 |
Net cash used in investing activities | (10,625) | (17,832) |
Net cash used in financing activities | (97,236) | (69,199) |
Decrease in cash, cash equivalents, and restricted cash | $ (96,511) | $ (33,905) |
Debt Schedule (Details) - USD ($) $ in Thousands |
Jun. 27, 2020 |
Dec. 28, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Debt issuance costs, net | $ (26,900) | $ (29,384) |
Long-term debt | 3,030,025 | 3,035,366 |
Current portion of long-term debt | 31,150 | 31,150 |
Long-term debt, net | 2,998,875 | 3,004,216 |
Twenty Seventeen Class A-2-I Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 586,500 | 588,000 |
Twenty Seventeen Class A-2-II Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 782,000 | 784,000 |
Twenty Nineteen Class A-2-I Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 595,500 | 597,000 |
Twenty Nineteen Class A-2-II Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 397,000 | 398,000 |
Twenty Nineteen Class A-2-III Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 694,750 | 696,500 |
Other [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,175 | $ 1,250 |
Other Current Liabilities (Detail) - USD ($) $ in Thousands |
Jun. 27, 2020 |
Dec. 28, 2019 |
---|---|---|
Other Liabilities, Current [Abstract] | ||
Gift card/certificate liability | $ 197,486 | $ 248,082 |
Accrued payroll and benefits | 14,826 | 27,208 |
Accrued interest | 13,180 | 13,086 |
Other current liabilities—advertising funds | 75,369 | 48,089 |
Franchisee profit-sharing liability | 15,712 | 14,184 |
Other | 51,687 | 35,401 |
Total other current liabilities | $ 368,260 | $ 386,050 |
Segment Information - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 27, 2020
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 5 |
Segment Information - Equity in Net Income of Joint Ventures Reportable Segment (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
|
Segment Reporting Disclosure [Line Items] | ||||
Net income of equity method investments, excluding impairment | $ 4,283 | $ 4,427 | $ 7,949 | $ 6,657 |
Other | ||||
Segment Reporting Disclosure [Line Items] | ||||
Net income of equity method investments, excluding impairment | 305 | 649 | 689 | 1,302 |
Operating Segments | ||||
Segment Reporting Disclosure [Line Items] | ||||
Net income of equity method investments, excluding impairment | 3,978 | 3,778 | 7,260 | 5,355 |
Operating Segments | Dunkin' Donuts | International | ||||
Segment Reporting Disclosure [Line Items] | ||||
Net income of equity method investments, excluding impairment | 85 | 161 | (40) | 21 |
Operating Segments | Baskin-Robbins | International | ||||
Segment Reporting Disclosure [Line Items] | ||||
Net income of equity method investments, excluding impairment | $ 3,893 | $ 3,617 | $ 7,300 | $ 5,334 |
Stockholders’ Equity (Deficit) - Changes in Total Shareholders' Equity (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance as of December 30, 2017 | $ (588,010) | |||
Net income | $ 36,450 | $ 59,622 | 88,563 | $ 111,945 |
Other comprehensive loss, net | 1,474 | (1,618) | (5,504) | (4,144) |
Dividends paid on common stock | (31,010) | (33,057) | (61,985) | |
Exercise of stock options | 6,992 | 12,914 | 10,243 | 16,745 |
Share-based compensation expense | 2,830 | 3,690 | 6,195 | 7,296 |
Other, net | 809 | $ 894 | (1,870) | $ (3,732) |
Balance as of September 29, 2018 | $ (587,732) | $ (587,732) |
Stockholders’ Equity (Deficit) - Changes in Components of Accumulated Other Comprehensive Income (Detail) $ in Thousands |
6 Months Ended |
---|---|
Jun. 27, 2020
USD ($)
| |
Movement in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance as of December 28, 2019 | $ (19,809) |
Other comprehensive loss, net | (5,504) |
Balance as of June 27, 2020 | (25,313) |
Effect of foreign currency translation | |
Movement in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance as of December 28, 2019 | (18,841) |
Other comprehensive loss, net | (4,911) |
Balance as of June 27, 2020 | (23,752) |
Accumulated other comprehensive loss | |
Movement in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance as of December 28, 2019 | (968) |
Other comprehensive loss, net | (593) |
Balance as of June 27, 2020 | $ (1,561) |
Earnings Per Shares - Additional Information (Detail) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Dilutive securities, effect on basic earnings per share, including options and restrictive units | 282,682 | 918,392 | 414,840 | 864,838 |
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive security excluded from calculation, restricted stock awards (in shares) | 86,176 | 40,340 | ||
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 2,020,419 | 656,958 | 1,687,109 | 663,951 |
Earnings per Share - Computation of Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
|
Earnings Per Share [Abstract] | ||||
Net Income (Loss) Attributable to Parent | $ 36,450 | $ 59,622 | $ 88,563 | $ 111,945 |
Weighted average number of common shares: | ||||
Common-basic (in shares) | 82,306,064 | 82,778,329 | 82,490,776 | 82,699,550 |
Common-diluted (in shares) | 82,588,746 | 83,696,721 | 82,905,616 | 83,564,388 |
Earnings (loss) per common share: | ||||
Common-basic (in dollars per share) | $ 0.44 | $ 0.72 | $ 1.07 | $ 1.35 |
Common-diluted (in dollars per share) | $ 0.44 | $ 0.71 | $ 1.07 | $ 1.34 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) |
Jun. 27, 2020 |
Dec. 28, 2019 |
---|---|---|
Commitments and Contingencies Disclosure [Line Items] | ||
Standby letters of credit | $ 33,100,000 | $ 33,100,000 |
Amounts drawn on letters of credit | 0 | 0 |
Supply Commitment | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Guarantee obligation, maximum exposure | $ 70,300,000 | $ 100,900,000 |
Related-Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
Dec. 28, 2019 |
|
Related Party Transaction [Line Items] | |||||
Revenue from related parties | $ 2,679 | $ 2,792 | $ 4,661 | $ 4,750 | |
Royalties receivable from joint ventures | 4,000 | 4,000 | $ 3,700 | ||
B-R 31 Ice Cream Company., Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 217 | 523 | 502 | 863 | |
BR-Korea Co., Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 1,409 | 1,191 | 2,573 | 2,374 | |
Palm Oasis Ventures Pty. Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 1,053 | 1,078 | 1,586 | 1,513 | |
Joint Ventures [Member] | |||||
Related Party Transaction [Line Items] | |||||
Payments to joint ventures | $ 1,000 | $ 700 | $ 2,300 | $ 1,800 |
Leases - Lease Costs and Rental Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 18,544 | $ 18,681 | $ 37,067 | $ 37,441 |
Variable lease cost | 7,473 | 12,998 | 17,882 | 23,266 |
Rental income | $ 26,017 | $ 31,679 | $ 54,949 | $ 60,707 |
Leases - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 27, 2020 |
Jun. 27, 2020 |
|
Lessee, Lease, Description [Line Items] | ||
Variable Lease, Cost, Increase (Decrease) | $ 3 | $ 3 |
Increase (Decrease) in Occupancy Expense | $ 1 | $ 1 |
Allowances for Accounts and Notes Receivable (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 27, 2020 |
Jun. 27, 2020 |
Jun. 29, 2019 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 12,583 | $ 8,850 | |
Provision for uncollectible accounts and notes receivable, net | 2,279 | 5,972 | $ 704 |
Write-offs and other | (741) | (701) | |
Ending balance | 14,121 | 14,121 | |
Allowance for expected credit losses, excluding lease receivables | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | 9,751 | 7,742 | |
Provision for uncollectible accounts and notes receivable, net | 1,859 | 3,817 | |
Write-offs and other | (741) | (690) | |
Ending balance | 10,869 | 10,869 | |
Allowance for lease receivables | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | 2,832 | 1,108 | |
Provision for uncollectible accounts and notes receivable, net | 420 | 2,155 | |
Write-offs and other | 0 | (11) | |
Ending balance | $ 3,252 | $ 3,252 |
COVID-19 Pandemic (Details) - COVID-19 Pandemic $ in Millions |
6 Months Ended |
---|---|
Jun. 27, 2020
USD ($)
property
| |
Unusual or Infrequent Item, or Both [Line Items] | |
Corporate financial relief to franchisees | $ | $ 8.0 |
Term Eligible To Waive Rental Payment | 1 month |
Term Eligible To Defer Rent | 2 months |
Number of Properties Leased Eligible For Financial Flexibility | property | 900 |
Minimum | |
Unusual or Infrequent Item, or Both [Line Items] | |
Financial flexibility term | 12 days |
Maximum | |
Unusual or Infrequent Item, or Both [Line Items] | |
Financial flexibility term | 45 days |
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