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 |
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(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) |
(Zip Code) |
Title of Each Class |
Trading Symbol |
Name of Each Exchange on Which Registered |
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Domino’s Pizza, Inc. |
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☒ |
Accelerated filer |
☐ |
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Non-accelerated filer |
☐ |
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☐ |
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☐ |
Page No. |
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PART I. |
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Item 1.
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3
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3
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4
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5
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6
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7
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Item 2.
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16
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Item 3.
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24
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Item 4.
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24
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PART II. |
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Item 1.
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25
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Item 1A.
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25
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Item 2.
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25
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Item 3.
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25
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Item 4.
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25
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Item 5.
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25
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Item 6.
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26
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27
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(In thousands) |
June 16, 2019 |
December 30, 2018 (1) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
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$ |
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||||
Restricted cash and cash equivalents |
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||||||
Accounts receivable, net |
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Inventories |
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Prepaid expenses and other |
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Advertising fund assets, restricted |
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Total current assets |
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Property, plant and equipment: |
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Land and buildings |
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Leasehold and other improvements |
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Equipment |
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Construction in progress |
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Accumulated depreciation and amortization |
( |
) |
( |
) | ||||
Property, plant and equipment, net |
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Other assets: |
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Operating lease
right-of-use assets |
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— |
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Goodwill |
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Capitalized software, net |
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Other assets |
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Deferred income taxes |
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Total other assets |
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Total assets |
$ |
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$ |
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||||
Liabilities and stockholders’ deficit |
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Current liabilities: |
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Current portion of long-term debt |
$ |
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$ |
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||||
Accounts payable |
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Operating lease liabilities |
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— |
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Insurance reserves |
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Dividends payable |
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Advertising fund liabilities |
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Other accrued liabilities |
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Total current liabilities |
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Long-term liabilities: |
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Long-term debt, less current portion |
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Operating lease liabilities |
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— |
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Insurance reserves |
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Other accrued liabilities |
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Total long-term liabilities |
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Stockholders’ deficit: |
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Common stock |
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Additional
paid-in capital |
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||||||
Retained deficit |
( |
) |
( |
) | ||||
Accumulated other comprehensive loss |
( |
) |
( |
) | ||||
Total stockholders’ deficit |
( |
) |
( |
) | ||||
Total liabilities and stockholders’ deficit |
$ |
|
$ |
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(1) | The balance sheet at December 30, 2018 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Fiscal Quarter Ended |
Two Fiscal Quarters Ended |
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June 16, |
June 17, |
June 16, |
June 17, |
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(In thousands, except per share data) |
2019 |
2018 |
2019 |
2018 |
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Revenues: |
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U.S. Company-owned stores |
$ |
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$ |
|
$ |
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$ |
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U.S. franchise royalties and fees |
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Supply chain |
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International franchise royalties and fees |
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U.S. franchise advertising |
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Total revenues |
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Cost of sales: |
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U.S. Company-owned stores |
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Supply chain |
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Total cost of sales |
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Operating margin |
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General and administrative |
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U.S. franchise advertising |
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Income from operations |
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Interest income |
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Interest expense |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Income before provision for income taxes |
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||||||||||||
Provision for income taxes |
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||||||||||||
Net income |
$ |
|
$ |
|
$ |
|
$ |
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||||||||
Earnings per share: |
||||||||||||||||
Common stock - basic |
$ |
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$ |
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$ |
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$ |
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Common stock - diluted |
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Fiscal Quarter Ended |
Two Fiscal Quarters Ended |
|||||||||||||||
June 16, |
June 17, |
June 16, |
June 17, |
|||||||||||||
(In thousands) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Net income |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Currency translation adjustment |
( |
) |
( |
) |
|
( |
) | |||||||||
Comprehensive income |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Two Fiscal Quarters Ended |
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June 16, |
June 17, |
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(In thousands) |
2019 |
2018 |
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Cash flows from operating activities: |
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Net income |
$ |
|
$ |
|
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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Loss on sale/disposal of assets |
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Amortization of debt issuance costs |
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Provision for deferred income taxes |
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Non-cash compensation expense |
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Excess tax benefits from equity-based compensation |
( |
) |
( |
) | ||||
Other |
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|
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Changes in operating assets and liabilities |
( |
) |
( |
) | ||||
Changes in advertising fund assets and liabilities, restricted |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
||||||||
Capital expenditures |
( |
) |
( |
) | ||||
Proceeds from sale of assets |
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||||||
Maturities of advertising fund investments, restricted |
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|
||||||
Purchases of advertising fund investments, restricted |
— |
( |
) | |||||
Other |
( |
) |
( |
) | ||||
Net cash used in investing activities |
( |
) |
( |
) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of long-term debt |
— |
|
||||||
Repayments of long-term debt and finance lease obligations |
( |
) |
( |
) | ||||
Proceeds from exercise of stock options |
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|
||||||
Purchases of common stock |
( |
) |
( |
) | ||||
Tax payments for restricted stock upon vesting |
( |
) |
( |
) | ||||
Payments of common stock dividends and equivalents |
( |
) |
( |
) | ||||
Cash paid for financing costs |
— |
( |
) | |||||
Net cash used in financing activities |
( |
) |
( |
) | ||||
Effect of exchange rate changes on cash |
|
( |
) | |||||
Change in cash and cash equivalents, restricted cash and cash equivalents |
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||||||
Cash and cash equivalents, beginning of period |
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Restricted cash and cash equivalents, beginning of period |
|
|
||||||
Cash and cash equivalents included in advertising fund assets, restricted, beginning of period |
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Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, beginning of period |
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Cash and cash equivalents, end of period |
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Restricted cash and cash equivalents, end of period |
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|
||||||
Cash and cash equivalents included in advertising fund assets, restricted, end of period |
|
|
||||||
Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, end of period |
$ |
|
$ |
|
||||
Fiscal Quarters Ended June 16, 2019 and June 17, 2018 |
||||||||||||||||||||||||
U.S. |
Supply |
International |
Intersegment |
|||||||||||||||||||||
Stores |
Chain |
Franchise |
Revenues |
Other |
Total |
|||||||||||||||||||
Revenues |
||||||||||||||||||||||||
2019 |
$ |
|
$ |
|
$ |
|
$ |
( |
) | $ |
— |
$ |
811,647 |
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2018 |
|
|
|
( |
) |
— |
|
|||||||||||||||||
Income from operations |
||||||||||||||||||||||||
2019 |
$ |
|
$ |
|
$ |
|
N/A |
$ |
( |
) | $ |
|
||||||||||||
2018 |
|
|
|
N/A |
( |
) |
|
|||||||||||||||||
Segment Income |
||||||||||||||||||||||||
2019 |
$ |
|
$ |
|
$ |
|
N/A |
$ |
( |
) | $ |
|
||||||||||||
2018 |
|
|
|
N/A |
( |
) |
|
Two Fiscal Quarters Ended June 16, 2019 and June 17, 2018 |
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U.S. |
Supply |
International |
Intersegment |
|||||||||||||||||||||
Stores |
Chain |
Franchise |
Revenues |
Other |
Total |
|||||||||||||||||||
Revenues |
||||||||||||||||||||||||
2019 |
$ |
|
$ |
|
$ |
|
$ |
( |
) | $ |
— |
$ |
|
|||||||||||
2018 |
|
|
|
( |
) |
— |
|
|||||||||||||||||
Income from operations |
||||||||||||||||||||||||
2019 |
$ |
|
$ |
|
$ |
|
N/A |
$ |
( |
) | $ |
|
||||||||||||
2018 |
|
|
|
N/A |
( |
) |
|
|||||||||||||||||
Segment Income |
||||||||||||||||||||||||
2019 |
$ |
|
$ |
|
$ |
|
N/A |
$ |
( |
) | $ |
|
||||||||||||
2018 |
|
|
|
N/A |
( |
) |
|
Fiscal Quarter Ended |
Two Fiscal Quarters Ended |
|||||||||||||||
June 16, |
June 17, |
June 16, |
June 17, |
|||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Total Segment Income |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Depreciation and amortization |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Loss on sale/disposal of assets |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Non-cash compensation expense |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Recapitalization-related expenses |
— |
( |
) |
— |
( |
) | ||||||||||
Income from operations |
|
|
|
|
||||||||||||
Interest income |
|
|
|
|
||||||||||||
Interest expense |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Income before provision for income taxes |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Fiscal Quarter Ended |
Two Fiscal Quarters Ended |
|||||||||||||||
June 16, |
June 17, |
June 16, |
June 17, |
|||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Net income available to common stockholders - basic and diluted |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Basic weighted average number of shares |
|
|
|
|
||||||||||||
Earnings per share – basic |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Diluted weighted average number of shares |
|
|
|
|
||||||||||||
Earnings per share – diluted |
$ |
|
$ |
|
$ |
|
$ |
|
Accumulated |
|||||||||||||||||||||
Additional |
Other |
||||||||||||||||||||
Common Stock |
Paid-in |
Retained |
Comprehensive |
||||||||||||||||||
Shares |
Amount |
Capital |
Deficit |
Loss |
|||||||||||||||||
Balance at March 24, 2019 |
|
$ |
|
$ |
|
$ |
( |
) | $ |
( |
) | ||||||||||
Net income |
— |
— |
— |
|
— |
||||||||||||||||
Dividends declared on common stock and equivalents ($ |
— |
— |
— |
( |
) |
— |
|||||||||||||||
Issuance and cancellation of stock awards, net |
( |
) |
— |
— |
— |
— |
|||||||||||||||
Tax payments for restricted stock upon vesting |
( |
) |
— |
( |
) |
— |
— |
||||||||||||||
Purchases of common stock |
( |
) |
( |
) |
( |
) |
— |
— |
|||||||||||||
Exercise of stock options |
|
|
|
— |
— |
||||||||||||||||
Non-cash compensation expense |
— |
— |
|
— |
— |
||||||||||||||||
Currency translation adjustment |
— |
— |
— |
— |
( |
) | |||||||||||||||
Balance at June 16, 2019 |
|
$ |
|
$ |
|
$ |
( |
) | $ |
( |
) | ||||||||||
Accumulated |
|||||||||||||||||||||
Additional |
Other |
||||||||||||||||||||
Common Stock |
Paid-in |
Retained |
Comprehensive |
||||||||||||||||||
Shares |
Amount |
Capital |
Deficit |
Loss |
|||||||||||||||||
Balance at December 30, 2018 |
|
$ |
|
$ |
|
$ |
( |
) | $ |
( |
) | ||||||||||
Net income |
— |
— |
— |
|
— |
||||||||||||||||
Dividends declared on common stock and equivalents ($ |
— |
— |
— |
( |
) |
— |
|||||||||||||||
Issuance and cancellation of stock awards, net |
|
— |
— |
— |
|||||||||||||||||
Tax payments for restricted stock upon vesting |
( |
) |
— |
( |
) |
— |
— |
||||||||||||||
Purchases of common stock |
( |
) |
( |
) |
( |
) |
( |
) |
— |
||||||||||||
Exercise of stock options |
|
|
|
— |
— |
||||||||||||||||
Non-cash compensation expense |
— |
— |
|
— |
— |
||||||||||||||||
Currency translation adjustment |
— |
— |
— |
— |
|
||||||||||||||||
Balance at June 16, 2019 |
|
$ |
|
$ |
|
$ |
( |
) | $ |
( |
) | ||||||||||
Accumulated |
|||||||||||||||||||||
Additional |
Other |
||||||||||||||||||||
Common Stock |
Paid-in |
Retained |
Comprehensive |
||||||||||||||||||
Shares |
Amount |
Capital |
Deficit |
Loss |
|||||||||||||||||
Balance at March 25, 2018 |
|
$ |
|
$ |
|
$ |
( |
) | $ |
( |
) | ||||||||||
Net income |
— |
— |
— |
|
— |
||||||||||||||||
Dividends declared on common stock and equivalents ($ |
— |
— |
— |
( |
) |
— |
|||||||||||||||
Issuance and cancellation of stock awards, net |
( |
) |
— |
— |
— |
— |
|||||||||||||||
Tax payments for restricted stock upon vesting |
(
|
) |
— |
( |
) |
— |
— |
||||||||||||||
Purchases of common stock |
( |
) |
( |
) |
( |
) |
( |
) |
— |
||||||||||||
Exercise of stock options |
|
|
|
— |
— |
||||||||||||||||
Non-cash compensation expense |
— |
— |
|
— |
— |
||||||||||||||||
Currency translation adjustment |
— |
— |
— |
— |
( |
) | |||||||||||||||
Balance at June 17, 2018 |
|
$ |
|
$ |
|
$ |
( |
) | $ |
( |
) | ||||||||||
Accumulated |
|||||||||||||||||||||
Additional |
Other |
||||||||||||||||||||
Common Stock |
Paid-in |
Retained |
Comprehensive |
||||||||||||||||||
Shares |
Amount |
Capital |
Deficit |
Loss |
|||||||||||||||||
Balance at December 31, 2017 |
|
$ |
|
$ |
|
$ |
( |
) | $ |
( |
) | ||||||||||
Net income |
— |
— |
— |
|
— |
||||||||||||||||
Dividends declared on common stock and equivalents ($ |
— |
— |
— |
( |
) |
— |
|||||||||||||||
Issuance and cancellation of stock awards, net |
|
— |
— |
— |
— |
||||||||||||||||
Tax payments for restricted stock upon vesting |
( |
) |
— |
( |
) |
— |
— |
||||||||||||||
Purchases of common stock |
( |
) |
( |
) |
( |
) |
( |
) |
— |
||||||||||||
Exercise of stock options |
|
|
|
— |
— |
||||||||||||||||
Non-cash compensation expense |
— |
— |
|
— |
— |
||||||||||||||||
Adoption of revenue recognition accounting standard |
— |
— |
— |
( |
) |
— |
|||||||||||||||
Currency translation adjustment |
— |
— |
— |
— |
( |
) | |||||||||||||||
Reclassification adjustment for stranded taxes |
— |
— |
— |
|
( |
) | |||||||||||||||
Balance at June 17, 2018 |
|
$ |
|
$ |
|
$ |
( |
) | $ |
( |
) | ||||||||||
At June 16, 2019 |
||||||||||||||||
Fair Value Estimated Using |
||||||||||||||||
Carrying |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Amount |
Inputs |
Inputs |
Inputs |
|||||||||||||
Cash equivalents
|
$ |
|
$ |
|
$ |
—
|
$ |
—
|
||||||||
Restricted cash equivalents
|
|
|
—
|
—
|
||||||||||||
Investments in marketable securities
|
|
|
—
|
—
|
||||||||||||
Advertising fund cash equivalents, restricted
|
|
|
—
|
—
|
||||||||||||
Advertising fund investments, restricted
|
|
|
—
|
—
|
||||||||||||
At December 30, 2018 | ||||||||||||||||
Fair Value Estimated Using | ||||||||||||||||
Carrying | Level 1 | Level 2 | Level 3 | |||||||||||||
Amount | Inputs | Inputs | Inputs | |||||||||||||
Cash equivalents | $ | $ | $ | — | $ | — | ||||||||||
Restricted cash equivalents | — | — | ||||||||||||||
Investments in marketable securities | — | — | ||||||||||||||
Advertising fund cash equivalents, restricted | — | — | ||||||||||||||
Advertising fund investments, restricted | — | — |
June 16, 2019 | December 30, 2018 | |||||||||||||||
Principal Amount | Fair Value | Principal Amount | Fair Value | |||||||||||||
2015 Ten-Year Fixed Rate Notes | $ | $ | $ | $ | ||||||||||||
2017 Five-Year Fixed Rate Notes | ||||||||||||||||
2017 Ten-Year Fixed Rate Notes | ||||||||||||||||
2017 Five-Year Floating Rate Notes | ||||||||||||||||
2018 7.5-Year Fixed Rate Notes | ||||||||||||||||
2018 9.25-Year Fixed Rate Notes |
Two Fiscal Quarters Ended | ||||||||
June 16, | June 17, | |||||||
2019 | 2018 | |||||||
Contract liabilities at beginning of period | $ | $ | ||||||
Revenue recognized during the period | ( | ) | ( | ) | ||||
New deferrals due to cash received and other | ||||||||
Contract liabilities at end of period | $ | $ |
Fiscal Quarter Ended | Two Fiscal Quarters Ended | |||||||
June 16, | June 16, | |||||||
2019 | 2019 | |||||||
Operating lease cost | $ | $ | ||||||
Finance lease cost: | ||||||||
Amortization of right-of-use assets | ||||||||
Interest on lease liabilities | ||||||||
Total finance lease cost | $ | $ |
June 16, | December 30, | |||||||
2019 | 2018 | |||||||
Land and buildings | $ | $ | ||||||
Accumulated depreciation and amortization | ( | ) | ( | ) | ||||
Finance lease assets, net | $ | $ | ||||||
Current portion of long-term debt | $ | $ | ||||||
Long-term debt, less current portion | ||||||||
Total principal payable on finance leases | $ | $ |
Operating | Finance | |||||||
Leases | Leases | |||||||
Weighted average remaining lease term | ||||||||
Weighted average discount rate | % | % |
Fiscal Quarter Ended | Two Fiscal Quarters Ended | |||||||
June 16, 2019 | June 16, 2019 | |||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows from operating leases | $ | $ | ||||||
Operating cash flows from finance leases | ||||||||
Financing cash flows from finance leases | ||||||||
Right-of-use assets obtained in exchange for new lease obligations: | ||||||||
Operating leases | ||||||||
Finance leases | — | — |
Operating |
Finance |
|||||||
Leases |
Leases |
|||||||
2019 |
$ |
|
$ |
|
||||
2020 |
|
|
||||||
2021 |
|
|
||||||
2022 |
|
|
||||||
2023 |
|
|
||||||
Thereafter |
|
|
||||||
Total future minimum rental commitments |
||||||||
Less – amounts representing interest |
(
|
) |
(
|
) | ||||
Total lease liabilities |
$ |
$ |
Operating |
Finance |
|||||||
Leases |
Leases |
|||||||
2019 |
$ |
|
$ |
|
||||
2020 |
|
|
||||||
2021 |
|
|
||||||
2022 |
|
|
||||||
2023 |
|
|
||||||
Thereafter |
|
|
||||||
Total future minimum rental commitments |
$ |
|
|
|||||
Less – amounts representing interest |
( |
) | ||||||
Total principal payable on finance leases |
$ |
|
Balance at December 30, 2018 | Adjustments Due to ASC 842 | Balance at December 31, 2018 | ||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Prepaid expenses and other | $ | $ | ( | ) | $ | |||||||
Property, plant and equipment: | ||||||||||||
Construction in progress | ( | ) | ||||||||||
Other assets: | ||||||||||||
Operating lease right-of-use assets | — | |||||||||||
Liabilities and stockholders’ deficit | ||||||||||||
Current liabilities: | ||||||||||||
Operating lease liabilities | — | |||||||||||
Other accrued liabilities | ( | ) | ||||||||||
Long-term liabilities: | ||||||||||||
Operating lease liabilities | — | |||||||||||
Other accrued liabilities | ( | ) |
Second Quarter of 2019 |
Second Quarter of 2018 |
Two Fiscal Quarters of 2019 |
Two Fiscal Quarters of 2018 |
|||||||||||||||||||||||||||||
Global retail sales growth |
+5.1 |
% |
+12.6 |
% |
+4.8 |
% |
+14.7 |
% | ||||||||||||||||||||||||
Same store sales growth: |
||||||||||||||||||||||||||||||||
U.S. Company-owned stores (1) |
+2.1 |
% |
+5.1 |
% |
+2.6 |
% |
+5.8 |
% | ||||||||||||||||||||||||
U.S. franchise stores (1) |
+3.1 |
% |
+7.0 |
% |
+3.5 |
% |
+7.7 |
% | ||||||||||||||||||||||||
U.S. stores |
+3.0 |
% |
+6.9 |
% |
+3.5 |
% |
+7.6 |
% | ||||||||||||||||||||||||
International stores (excluding foreign currency impact) |
+2.4 |
% |
+4.0 |
% |
+2.1 |
% |
+4.4 |
% | ||||||||||||||||||||||||
Store counts (at end of period): |
||||||||||||||||||||||||||||||||
U.S. Company-owned stores |
333 |
396 |
||||||||||||||||||||||||||||||
U.S. franchise stores |
5,612 |
5,296 |
||||||||||||||||||||||||||||||
U.S. stores |
5,945 |
5,692 |
||||||||||||||||||||||||||||||
International stores |
10,369 |
9,430 |
||||||||||||||||||||||||||||||
Total stores |
16,314 |
15,122 |
||||||||||||||||||||||||||||||
Income statement data: |
||||||||||||||||||||||||||||||||
Total revenues |
$ |
811.6 |
100.0 |
% | $ |
779.4 |
100.0 |
% | $ |
1,647.6 |
100.0 |
% | $ |
1,564.8 |
100.0 |
% | ||||||||||||||||
Cost of sales |
495.0 |
61.0 |
% |
485.8 |
62.3 |
% |
1,008.7 |
61.2 |
% |
971.3 |
62.1 |
% | ||||||||||||||||||||
General and administrative |
89.2 |
11.0 |
% |
86.5 |
11.1 |
% |
178.9 |
10.9 |
% |
170.7 |
10.9 |
% | ||||||||||||||||||||
U.S. franchise advertising |
88.5 |
10.9 |
% |
80.9 |
10.4 |
% |
177.6 |
10.8 |
% |
163.1 |
10.4 |
% | ||||||||||||||||||||
Income from operations |
138.9 |
17.1 |
% |
126.1 |
16.2 |
% |
282.4 |
17.1 |
% |
259.6 |
16.6 |
% | ||||||||||||||||||||
Interest expense, net |
(32.9 |
) |
(4.0 |
)% |
(34.9 |
) |
(4.5 |
)% |
(67.3 |
) |
(4.0 |
)% |
(64.8 |
) |
(4.1 |
)% | ||||||||||||||||
Income before provision for income taxes |
106.0 |
13.1 |
% |
91.2 |
11.7 |
% |
215.1 |
13.1 |
% |
194.9 |
12.5 |
% | ||||||||||||||||||||
Provision for income taxes |
13.6 |
1.7 |
% |
13.8 |
1.8 |
% |
30.1 |
1.9 |
% |
28.6 |
1.9 |
% | ||||||||||||||||||||
Net income |
$ |
92.4 |
11.4 |
% | $ |
77.4 |
9.9 |
% | $ |
185.0 |
11.2 |
% | $ |
166.2 |
10.6 |
% |
(1) | During the second quarter of 2019, the Company sold 59 U.S. Company-owned stores to certain of its existing U.S. franchisees. The same store sales growth for these stores is reflected in U.S. franchise stores in the second quarter and two fiscal quarters of 2019. |
Second Quarter |
Second Quarter |
Two Fiscal |
Two Fiscal |
|||||||||||||||||||||||||||||
of 2019 |
of 2018 |
Quarters of 2019 |
Quarters of 2018 |
|||||||||||||||||||||||||||||
U.S. Company-owned stores |
$ |
105.0 |
12.9 |
% | $ |
118.8 |
15.2 |
% | $ |
228.5 |
13.9 |
% | $ |
240.0 |
15.3 |
% | ||||||||||||||||
U.S. franchise royalties and fees |
95.6 |
11.8 |
% |
87.4 |
11.2 |
% |
192.3 |
11.7 |
% |
176.9 |
11.3 |
% | ||||||||||||||||||||
Supply chain |
467.6 |
57.6 |
% |
440.9 |
56.6 |
% |
939.7 |
57.0 |
% |
881.0 |
56.4 |
% | ||||||||||||||||||||
International franchise royalties and fees |
55.0 |
6.8 |
% |
51.3 |
6.6 |
% |
109.6 |
6.6 |
% |
103.8 |
6.6 |
% | ||||||||||||||||||||
U.S. franchise advertising |
88.5 |
10.9 |
% |
80.9 |
10.4 |
% |
177.6 |
10.8 |
% |
163.1 |
10.4 |
% | ||||||||||||||||||||
Total revenues |
$ |
811.6 |
100.0 |
% | $ |
779.4 |
100.0 |
% | $ |
1,647.6 |
100.0 |
% | $ |
1,564.8 |
100.0 |
% |
Second Quarter |
Second Quarter |
Two Fiscal |
Two Fiscal |
|||||||||||||||||||||||||||||
of 2019 |
of 2018 |
Quarters of 2019 |
Quarters of 2018 |
|||||||||||||||||||||||||||||
U.S. Company-owned stores |
$ |
105.0 |
36.3 |
% | $ |
118.8 |
41.4 |
% | $ |
228.5 |
38.2 |
% | $ |
240.0 |
41.4 |
% | ||||||||||||||||
U.S. franchise royalties and fees |
95.6 |
33.1 |
% |
87.4 |
30.4 |
% |
192.3 |
32.1 |
% |
176.9 |
30.5 |
% | ||||||||||||||||||||
U.S. franchise advertising |
88.5 |
30.6 |
% |
80.9 |
28.2 |
% |
177.6 |
29.7 |
% |
163.1 |
28.1 |
% | ||||||||||||||||||||
U.S. stores |
$ |
289.1 |
100.0 |
% | $ |
287.1 |
100.0 |
% | $ |
598.4 |
100.0 |
% | $ |
580.0 |
100.0 |
% |
Second Quarter |
Second Quarter |
Two Fiscal |
Two Fiscal |
|||||||||||||||||||||||||||||
of 2019 |
of 2018 |
Quarters of 2019 |
Quarters of 2018 |
|||||||||||||||||||||||||||||
U.S. supply chain |
$ |
424.6 |
90.8 |
% | $ |
399.7 |
90.7 |
% | $ |
853.3 |
90.8 |
% | $ |
798.6 |
90.6 |
% | ||||||||||||||||
International supply chain |
43.0 |
9.2 |
% |
41.2 |
9.3 |
% |
86.4 |
9.2 |
% |
82.4 |
9.4 |
% | ||||||||||||||||||||
Total supply chain |
$ |
467.6 |
100.0 |
% | $ |
440.9 |
100.0 |
% | $ |
939.7 |
100.0 |
% | $ |
881.0 |
100.0 |
% |
Second Quarter |
Second Quarter |
Two Fiscal |
Two Fiscal |
|||||||||||||||||||||||||||||
of 2019 |
of 2018 |
Quarters of 2019 |
Quarters of 2018 |
|||||||||||||||||||||||||||||
Consolidated revenues |
$ |
811.6 |
100.0 |
% | $ |
779.4 |
100.0 |
% | $ |
1,647.6 |
100.0 |
% | $ |
1,564.8 |
100.0 |
% | ||||||||||||||||
Consolidated cost of sales |
495.0 |
61.0 |
% |
485.8 |
62.3 |
% |
1,008.7 |
61.2 |
% |
971.3 |
62.1 |
% | ||||||||||||||||||||
Consolidated operating margin |
$ |
316.7 |
39.0 |
% | $ |
293.6 |
37.7 |
% | $ |
639.0 |
38.8 |
% | $ |
593.4 |
37.9 |
% |
Second Quarter |
Second Quarter |
Two Fiscal |
Two Fiscal |
|||||||||||||||||||||||||||||
of 2019 |
of 2018 |
Quarters of 2019 |
Quarters of 2018 |
|||||||||||||||||||||||||||||
Revenues |
$ |
105.0 |
100.0 |
% | $ |
118.8 |
100.0 |
% | $ |
228.5 |
100.0 |
% | $ |
240.0 |
100.0 |
% | ||||||||||||||||
Cost of sales |
80.4 |
76.5 |
% |
92.0 |
77.4 |
% |
175.9 |
77.0 |
% |
185.0 |
77.1 |
% | ||||||||||||||||||||
Store operating margin |
$ |
24.6 |
23.5 |
% | $ |
26.8 |
22.6 |
% | $ |
52.5 |
23.0 |
% | $ |
55.0 |
22.9 |
% |
• | Food costs decreased 0.6 percentage points to 26.9% in the second quarter of 2019 and decreased 0.4 percentage points to 27.0% in the two fiscal quarters of 2019 due primarily to the leveraging of higher same store sales and improvements in efficiency. These decreases were partially offset by higher food prices. |
• | Labor costs decreased 0.6 percentage points to 29.4% in the second quarter of 2019 and increased 0.4 percentage points to 30.2% in the two fiscal quarters of 2019. The Second Quarter Store Sale contributed to the reduction in labor costs as a percentage of store revenues in both the second quarter and two fiscal quarters of 2019 due to the high labor rates in the market in which the sold stores operated. These decreases were partially offset in the second quarter of 2019 and fully offset in the two fiscal quarters of 2019 by an increase in average labor rates in our remaining Company-owned store markets. |
Second Quarter |
Second Quarter |
Two Fiscal |
Two Fiscal |
|||||||||||||||||||||||||||||
of 2019 |
of 2018 |
Quarters of 2019 |
Quarters of 2018 |
|||||||||||||||||||||||||||||
Revenues |
$ |
467.6 |
100.0 |
% | $ |
440.9 |
100.0 |
% | $ |
939.7 |
100.0 |
% | $ |
881.0 |
100.0 |
% | ||||||||||||||||
Cost of sales |
414.6 |
88.7 |
% |
393.8 |
89.3 |
% |
832.7 |
88.6 |
% |
786.3 |
89.3 |
% | ||||||||||||||||||||
Supply chain operating margin |
$ |
53.0 |
11.3 |
% | $ |
47.1 |
10.7 |
% | $ |
106.9 |
11.4 |
% | $ |
94.7 |
10.7 |
% |
(In millions) |
Two Fiscal Quarters of 2019 |
Two Fiscal Quarters of 2018 |
||||||
Cash Flows Provided By (Used In) |
||||||||
Net cash provided by operating activities |
$ |
201.6 |
$ |
154.7 |
||||
Net cash used in investing activities |
(2.5 |
) |
(43.8 |
) | ||||
Net cash used in financing activities |
(114.3 |
) |
(30.1 |
) | ||||
Exchange rate changes |
0.1 |
(0.1 |
) | |||||
Change in cash and cash equivalents, restricted cash and cash equivalents |
$ |
84.8 |
$ |
80.7 |
||||
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. |
Controls and Procedures. |
Item 1. |
Legal Proceedings. |
Item 1A. |
Risk Factors. |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds. |
Maximum Approximate Dollar |
||||||||||||||||
Total Number of Shares |
Value of Shares that |
|||||||||||||||
Total Number |
Purchased as Part of |
May Yet Be Purchased |
||||||||||||||
of Shares |
Average Price Paid |
Publicly Announced |
Under the Program |
|||||||||||||
Period |
Purchased (1) |
Per Share |
Program (2) |
(in thousands) |
||||||||||||
Period #4 (March 25, 2019 to April 21, 2019) |
1,909 |
$ |
247.89 |
— |
$ |
150,645 |
||||||||||
Period #5 (April 22, 2019 to May 19, 2019) |
13,577 |
269.56 |
12,295 |
147,336 |
||||||||||||
Period #6 (May 20, 2019 to June 16, 2019) |
1,348 |
283.44 |
— |
147,336 |
||||||||||||
Total |
16,834 |
$ |
268.22 |
12,295 |
$ |
147,336 |
||||||||||
(1) | 4,539 shares in the second quarter of 2019 were purchased as part of the Company’s employee stock payroll deduction plan at an average price of $265.71. |
(2) | As previously disclosed, on February 14, 2018, the Company’s Board of Directors authorized a $750.0 million share repurchase program, which has no expiration date. As of June 16, 2019, the Company had approximately $147.3 million remaining for future share repurchases under this program. Authorization for the repurchase program may be modified, suspended, or discontinued at any time. The repurchase of shares in any particular period and the actual amount of such purchases remain at the discretion of the Board of Directors, and no assurance can be given that shares will be repurchased in the future. |
Item 3. |
Defaults Upon Senior Securities. |
Item 4. |
Mine Safety Disclosures. |
Item 5. |
Other Information. |
Item 6. |
Exhibits. |
Exhibit Number |
Description |
|||
10.1 |
||||
10.2 |
||||
31.1 |
||||
31.2 |
||||
32.1 |
||||
32.2 |
||||
101.INS |
XBRL Instance Document. |
|||
101.SCH |
XBRL Taxonomy Extension Schema Document. |
|||
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document. |
|||
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document. |
|||
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document. |
|||
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document. |
DOMINO’S PIZZA, INC. (Registrant) |
||||||
Date: July 16, 2019 |
/s/ Jeffrey D. Lawrence |
|||||
Jeffrey D. Lawrence |
||||||
Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer) |