Dunkin' Brands Reports Fiscal Year 2010 Results

CANTON, Mass., March 23, 2011 /PRNewswire/ -- Dunkin' Brands, Inc., the parent company of Dunkin' Donuts (DD) and Baskin-Robbins (BR), today reported results for the year ended December 25, 2010. "As a result of a disciplined, operations-focused approach, Dunkin' Brands had strong system-wide sales and revenue growth as well as industry-leading new store development in 2010," said Nigel Travis, Chief Executive Officer, Dunkin' Brands, Inc. and President, Dunkin' Donuts. "Our brand-differentiating marketing and product innovations, continued growth in U.S. beverage sales, and strong international sales were all key contributors to our success."

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Consolidated Key Highlights

Full year 2010 financial highlights included:

• Global system-wide sales were approximately $7.7 billion compared to $7.2 billion for fiscal 2009, representing approximately a seven percent year-over-year increase.
• Consolidated U.S. comparable store sales were 1.6 percent.
• Dunkin' Brands franchisees and licensees opened 800 global net new Dunkin' Donuts and Baskin-Robbins locations, bringing total points of distribution to 16,193 in 52 countries.
• Total revenues were $577.1 million compared to $538.1 million for fiscal 2009, an increase of approximately seven percent.
• Net income for fiscal 2010 was $26.9 million as compared to $35.0 million in fiscal 2009 representing approximately a 23 percent decrease, primarily impacted by non-recurring pre-tax expenses of $62.0 million related to debt extinguishment, partially offset by a decrease in the Company's effective tax rate.
• Adjusted EBITDA* was $282.0 million, up slightly compared with $279.2 million in 2009.

Increases in both global system-wide sales and Dunkin' Brands revenues for fiscal 2010 are primarily attributable to Dunkin' Donuts U.S. comparable store sales growth (which includes stores open for 54 weeks or more), growth in Dunkin' Donuts and Baskin-Robbins international sales and global store development.

Comparable store sales growth for Dunkin' Donuts U.S., which represented more than 70 percent of Dunkin' Brands' system-wide sales, increased 2.3 percent for fiscal 2010 compared to fiscal 2009. Comparable store sales growth improved throughout the year with fourth quarter comparable store sales growth of 4.7 percent. This improvement was due to product and marketing innovation, increased operational focus on the guest experience and an improved economic environment.

In November 2010, Dunkin' Brands completed a refinancing comprised of a $1.25 billion term loan and $625 million of senior notes.  The proceeds raised were used to repay in full Dunkin' Brands' outstanding securitization debt and related refinancing expenses, as well as a cash dividend to Dunkin' Brands' shareholders.

In February 2011, the Company completed a re-pricing of its outstanding $1.25 billion term loan. Additionally, the Company increased the size of its term loan from $1.25 billion to $1.4 billion, with the incremental proceeds being used to repay an equal amount of the Company's senior notes, leaving the Company's total debt unchanged. The new interest rate on the term loan is LIBOR plus 3.00% with a LIBOR floor of 1.25% versus the previous interest rate of LIBOR plus 4.25% with a LIBOR floor of 1.50%.

"The re-pricing and reallocation of debt will save the Company approximately $26 million in cash interest annually," said Chief Financial Officer Neil Moses. "Overall it was a strong year for Dunkin' Brands; we continued to enhance the guest experience with operational improvements and to demonstrate the strength of our franchise business model with solid financial results."

"As a result of our business fundamentals, we delivered a strong performance with resilient comparable store sales and excellent store development, not only in 2010, but throughout the economic downturn," said Travis. "Our strategy has been to drive comparable store sales growth in our core U.S. markets, expand contiguously in the U.S. with a replicable business model, and drive accelerated international growth across both brands. This strategy will continue to guide us for the next several years."

* EBITDA is earnings before interest, taxes, depreciation, amortization and non-cash impairment of long-lived assets.  Adjusted EBITDA represents EBITDA adjusted for non-cash and non-recurring items, as well as other adjustments as defined within our credit agreement.  

Conference Call

As previously announced, Dunkin' Brands will be holding a conference call today at 8:00 am ET hosted by Chief Executive Officer, Nigel Travis, and Chief Financial Officer, Neil Moses. The dial-in number is (970) 315-0543 or (877) 533-8179, conference number 51870063.  Dunkin' Brands will broadcast the conference call live over the Internet at http://investor.dunkinbrands.com. A replay of the conference call will be available through April 23, 2011, and can be accessed on the Company's website at http://investor.dunkinbrands.com.

The Company's consolidated statements of operations, condensed consolidated balance sheets, condensed consolidated statements of cash flows and other additional information have been provided with this press release. This information should be reviewed in conjunction with this press release.

Forward-Looking Statements

Certain information in this press release, particularly information regarding future economic performance, finances, and expectations and objectives of management constitute forward-looking statements.  Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and generally contain words such as "believes," expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates" or "anticipates" or similar expressions. Our forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from those projected or implied by the forward-looking statement.

Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof.  We do not undertake to publicly update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law.

Non-GAAP Measures

In addition to the results provided in accordance with U.S. generally accepted accounting principles ("GAAP") throughout this document, the Company has provided non-GAAP measurements, including EBITDA and Adjusted EBITDA, for fiscal 2010 and 2009 which present operating results on a basis before certain adjustments. The Company uses Adjusted EBITDA to track compliance with its debt covenants as well as a key performance measure for the purpose of evaluating performance internally. We also believe EBITDA and Adjusted EBITDA provide our investors with useful information in respect to our historical operating results. These non-GAAP measurements are not intended to replace the presentation of our financial results in accordance with GAAP. Use of the terms EBITDA and Adjusted EBITDA may differ from similar measures reported by other companies.  EBITDA and Adjusted EBITDA are reconciled from net income determined under GAAP in the attached table "Dunkin' Brands Inc. Non-GAAP Reconciliation."

About Dunkin' Brands, Inc.

With 16,193 points of distribution in 52 countries worldwide, Dunkin' Brands, Inc. is renowned for its leadership in the quick quality category. At the end of 2010, Dunkin' Brands' nearly 100 percent franchised business model included 9,760 Dunkin' Donuts restaurants and 6,433 Baskin-Robbins restaurants, and the Company had system-wide sales of approximately $7.7 billion. Dunkin' Brands, Inc. is headquartered in Canton, Mass. For more information, visit www.dunkinbrands.com.

Contact(s):

Stacey Caravella (Investors)
Investor Relations
Dunkin' Brands, Inc.
investor.relations@dunkinbrands.com
781-737-3200

Michelle King (Media)
Director, Global Media Relations
Dunkin' Brands, Inc.
michelle.king@dunkinbrands.com
781-737-5200

SOURCE Dunkin' Brands, Inc.