Krispy Kreme Doughnuts, Inc. (Nasdaq: KREM) yesterday reported financial results for the fourth quarter and fiscal year ended January 28, 2001.
Systemwide sales, including sales of both company and franchise stores, increased 43.6% to $124.8 million in the fourth quarter, compared with $86.9 million in the fourth quarter of fiscal 2000. Sales were driven by an increase in company store sales of 32.5% to $57.1 million and an increase in franchise store sales of 54.6% to $67.7 million. On a comparable store basis, systemwide store sales were up 14.9% and company store sales increased 20.6%.
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Total company revenues, which include sales from company stores, franchise operations, and Krispy Kreme Manufacturing and Distribution (“KKM&D”), rose 39.3% to $81.8 million in the fourth quarter, compared with $58.7 million in the fourth quarter of fiscal 2000. Sales from company stores increased 32.5% to $57.1 million; revenues from franchise operations were up 58.3% to $2.7 million; and KKM&D sales increased 58.3% to $21.9 million.
Net income for the fourth quarter was $4.2 million, an increase of 265.3% compared with $1.2 million in the fourth quarter last year. Diluted earnings per share increased to $0.30 in the fourth quarter of fiscal 2001 from $0.11 per share in the prior year comparable period.
For the fiscal year ended January 28, 2001, systemwide sales increased 40.5% to $448.1 million from $318.9 million for the fiscal year ended January 30, 2000. This is a result of an increase in company store sales of 30.1% to $213.7 million and an increase in franchise store sales of 51.6% to $234.4 million.
Total company revenues rose 36.5% to $300.7 million for the year compared with $220.2 million in the prior year. Sales from company stores increased 30.1% to $213.7 million; revenues from franchise operations were up 70.8% to $9.4 million; and KKM&D sales increased 53.7% to $77.6 million.
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By GlobalDataNet income for the fiscal year was $14.7 million, an increase of 147.2% compared to $6.0 million a year ago. Diluted earnings per share increased to $1.10 for the year from $0.61 per share in the prior year.
Commenting on company’s financial performance, Scott Livengood, Chairman, President and CEO of Krispy Kreme Doughnuts, said: “I am pleased to report that our momentum from the first three quarters continued into the fourth quarter and contributed to record results for fiscal 2001. We once again achieved strong results across all major sales channels and across the country. I attribute our success during this first year as a public company to maintaining a clear focus on our business strategy, continued support by our loyal customers and an organization comprised of dedicated and passionate Krispy Kremers. It has been another great quarter and year for our company. I am very proud of what our employees and franchise partners have been able to accomplish.”
During the quarter, eleven new Krispy Kreme stores were opened. New markets entered included San Diego, New Orleans, Bakersfield, Rochester and Austin. In addition, six markets gained additional locations bringing the total number of stores at January 28, 2001 to 174. Since the end of the quarter, Krispy Kreme has opened two additional franchise stores in Southern California and one additional franchise store in Dallas/Ft. Worth.
The company also provided guidance for fiscal 2002 generally and for the first quarter specifically. The company’s long-term business model is for 20% revenue growth, mid-single digit comparable store sales growth, and 25% earnings per share growth annually. The company’s expectations for fiscal 2002 are consistent with this model, which would result in diluted earnings per share of $1.38. For the first quarter of fiscal 2002, the company expects comparable store sales growth of mid-single digits and diluted earnings per share of $.34, a 26% improvement above the comparable period last year. These earnings per share expectations do not give effect to the two-for-one stock split in the form of a stock dividend payable on March 19, 2001 to shareholders of record as of the close of business on March 5, 2001.
The 63-year-old North Carolina-based company is a leading branded specialty retailer of premium quality doughnuts, including the company’s signature Hot Original Glazed. Krispy Kreme currently operates 177 stores in 28 states.
Krispy Kreme can be found on the World Wide Web at www.krispykreme.com .
Information contained in this press release, other than historical information, may be considered forward-looking in nature and is subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on Krispy Kreme’s operating results, performance or financial condition are its dependence on franchisees to execute its store expansion strategy, supply issues, competition and numerous other factors discussed in Krispy Kreme’s periodic reports, proxy statement and other information statements filed with the Securities and Exchange Commission.
Krispy Kreme Doughnuts, Inc.
Summary Financial Results
For the Fourth Quarter Ended January 28, 2001
(All dollar amounts in thousands except per share data)
Quarter Ended
January January
28, 2001 30, 2000 $ Change % Change
Total revenues $ 81,811 $ 58,710 $ 23,101 39.3%
Operating expenses 67,857 51,459 16,398 31.9%
General and administrative
expenses 6,001 3,947 2,054 52.0%
Depreciation and amortization
expenses 1,471 1,049 422 40.2%
Income from operations 6,482 2,255 4,227 187.5%
Interest income 780 30 750 2500.0%
Interest expense 40 413 (373) -90.3%
Other expenses 61 — 61 —
Minority interest in
consolidated joint ventures 314 — 314 —
Income before income taxes 6,847 1,872 4,975 265.8%
Provision for income taxes 2,602 710 1,892 266.5%
Net income $ 4,245 $ 1,162 $ 3,083 265.3%
Diluted earnings per share $ 0.30 $ 0.11 $ 0.19 172.7%
Diluted shares outstanding 14,133 10,161 3,972 39.1%
After giving effect
to two-for-one
stock split: (1)
Diluted earnings per share $ 0.15 $ 0.06 $ 0.09 172.7%
Diluted shares outstanding 28,266 20,322 7,944 39.1%
Segment Information
Revenues
Company store operations $ 57,134 $ 43,126 $ 14,008 32.5%
Franchise operations 2,741 1,731 1,010 58.3%
KKM&D 21,936 13,853 8,083 58.3%
Total revenues $ 81,811 $ 58,710 $ 23,101 39.3%
Operating Income
Company store operations $ 7,568 $ 3,856 $ 3,712 96.3%
Franchise operations 1,867 642 1,225 190.8%
KKM&D 3,419 2,004 1,415 70.6%
Unallocated general and
administrative expenses (6,372) (4,247) (2,125) 50.0%
Total operating income $ 6,482 $ 2,255 $ 4,227 187.5%
Operating Margins
Company store operations 13.2% 8.9% 4.3%
Franchise operations 68.1% 37.1% 31.0%
KKM&D 15.6% 14.5% 1.1%
Unallocated general and
administrative expenses 7.8% 7.2% 0.6%
Total operating income 7.9% 3.8% 4.1%
Depreciation and Amortization
Expenses:
Company store operations $ 999 $ 669 $ 330 49.3%
Franchise operations 18 18 — 0.0%
KKM&D 83 62 21 33.9%
Corporate administration 371 300 71 23.7%
Total depreciation and
amortization expenses $ 1,471 $ 1,049 $ 422 40.2%
Systemwide Sales
Company stores $ 57,134 $ 43,126 $ 14,008 32.5%
Franchise stores 67,678 43,774 23,904 54.6%
Total $ 124,812 $ 86,900 $ 37,912 43.6%
Comparable Store Sales
Company stores 20.6%
Systemwide 14.9%
(1) The Company has declared a two-for-one stock split in the form of a
stock dividend payable on March 19, 2001 to shareholders of record at
the close of business on March 5, 2001.
Krispy Kreme Doughnuts, Inc.
Summary Financial Results
For the Fiscal Year Ended
January 28, 2001
(All dollar amounts in thousands
except per share data)
Fiscal Year Ended
January 28, January 30,
2001 2000 $ Change % Change
Total revenues $ 300,715 $ 220,243 $ 80,472 36.5%
Operating expenses 250,690 190,003 60,687 31.9%
General and administrative
expenses 20,061 14,856 5,205 35.0%
Depreciation and amortization
expenses 6,457 4,546 1,911 42.0%
Income from operations 23,507 10,838 12,669 116.9%
Interest income 2,325 293 2,032 693.5%
Interest expense 607 1,525 (918) -60.2%
Other expenses 726 — 726 —
Minority interest in
consolidated joint ventures 716 — 716 —
Income before income taxes 23,783 9,606 14,177 147.6%
Provision for income taxes 9,058 3,650 5,408 148.2%
Net income $ 14,725 $ 5,956 $ 8,769 147.2%
Diluted earnings
per share (1) $ 1.10 $ 0.61 $ 0.49 80.3%
Diluted shares outstanding 13,414 9,820 3,594 36.6%
After giving effect to
two-for-one
stock split: (2)
Diluted earnings per share $ 0.55 $ 0.30 $ 0.25 80.3%
Diluted shares outstanding 26,828 19,640 7,188 36.6%
Segment Information
Revenues
Company store operations $ 213,677 $ 164,230 $ 49,447 30.1%
Franchise operations 9,445 5,529 3,916 70.8%
KKM&D 77,593 50,484 27,109 53.7%
Total revenues $ 300,715 $ 220,243 $ 80,472 36.5%
Operating Income
Company store operations $ 27,370 $ 18,246 $ 9,124 50.0%
Franchise operations 5,730 1,445 4,285 296.5%
KKM&D 11,712 7,182 4,530 63.1%
Unallocated general and
administrative expenses (21,305) (16,035) (5,270) 32.9%
Total operating income $ 23,507 $ 10,838 $ 12,669 116.9%
Operating Margins
Company store operations 12.8% 11.1% 1.7%
Franchise operations 60.7% 26.1% 34.6%
KKM&D 15.1% 14.2% 0.9%
Unallocated general and
administrative expenses 7.1% 7.3% -0.2%
Total operating income 7.8% 4.9% 2.9%
Depreciation and Amortization
Expenses:
Company store operations $ 4,838 $ 3,059 $ 1,779 58.2%
Franchise operations 72 72 — 0.0%
KKM&D 303 236 67 28.4%
Corporate administration 1,244 1,179 65 5.5%
Total depreciation and
amortization expenses $ 6,457 $ 4,546 $ 1,911 42.0%
Systemwide Sales
Company stores $ 213,677 $ 164,230 $ 49,447 30.1%
Franchise stores 234,452 154,623 79,829 51.6%
Total $ 448,129 $ 318,853 $ 129,276 40.5%
Comparable Store Sales
Company stores 22.9%
Systemwide 17.1%
(1) Because earnings per share is computed independently for each
quarter, the sum of the quarterly earnings per share does not equal
the annual earnings per share for the fiscal year ended
January 28, 2001.
(2) The Company has declared a two-for-one stock split in the form of a
stock dividend payable on March 19, 2001 to shareholders of record at
the close of business on March 5, 2001.
