Domino's Pizza Posts Strong Third Quarter 2005 Financial Results
ANN ARBOR, Mich., Oct 25, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- Domino's Pizza, Inc. (NYSE: DPZ), the recognized world leader in pizza delivery, today announced financial results for the third quarter and first three quarters of 2005, which ended September 11, 2005. Diluted earnings per share were $0.30 on net income of $20.8 million for the third quarter of 2005, driven primarily by strong global retail sales growth. Global retail sales were up 7.8% for the quarter versus the prior year period, driven by domestic and international same store sales and unit growth. Domestic same store sales increased 1.1% for the quarter, while international same store sales increased 4.5%, on a constant dollar basis, for the same period. Domestic and international same store sales increased 8.0% and 5.9%, respectively, for the same periods last year. The Company added 67 net stores worldwide during the quarter, and increased worldwide store counts by 342 net stores over the past four fiscal quarters.
Third Quarter Highlights (versus the prior year period):
* Diluted EPS increased 30.4% to $0.30, on net income of $20.8 million, compared to pro forma diluted EPS of $0.23 in the third quarter of 2004. See later in this release for a discussion of this pro forma measure.
* Global retail sales, comprised of all retail sales at Company-owned and franchise stores worldwide, increased 7.8%, driven by higher same store sales and store counts.
* Domestic same store sales increased 1.1%, comprised of a domestic Company-owned same store sales increase of 4.2% and a domestic franchise same store sales increase of 0.7%.
* International same store sales increased 4.5%, on a constant dollar basis, marking the 47th consecutive quarter of international same store sales growth.
* Worldwide store counts increased by a net 67 stores during the quarter, and increased by a net 342 stores over the past four fiscal quarters. At the end of the quarter, there were 7,945 Domino's Pizza stores in operation worldwide. The net store growth data includes 14 closed franchise stores during the third quarter as a result of Hurricane Katrina.
Domino's Pizza Chairman and CEO David A. Brandon, commented, "I am very pleased with the way we performed against our business plan for the third quarter. Both our domestic and international businesses drove positive same store sales growth, which was particularly noteworthy, considering our extremely strong sales performance in the same period last year. Together with lower cheese costs and healthy store growth, we were pleased to drive EPS growth of more than 30%."
"I would also like to highlight the strength and character of our team members and franchisees in the wake of hurricanes Katrina and Rita," Brandon continued. "Our largest domestic franchisee, RPM Pizza, is located in the center of Katrina's devastation, and many of our franchisees and team members displayed incredible acts of selflessness by traveling to RPM Pizza locations throughout Mississippi and Louisiana and helping them get most of their stores reopened in a remarkably short period of time. In addition, we were privileged to provide free, hot food to thousands of evacuees and rescue workers during the weeks immediately following the storms. I am very proud of the resiliency of the Domino's Pizza system and our ability to come together as a team during trying times to provide needed support to the communities we serve."
Conference Call Information
The Company plans to file its quarterly report on Form 10-Q this morning. Additionally, as previously announced, Domino's Pizza, Inc. will hold a conference call today at 11 a.m. (Eastern) to review its third quarter 2005 financial results. The call can be accessed by dialing (888) 306-6182 (U.S./Canada) or (706) 634-4947 (International). Ask for the Domino's Pizza conference call. The call will also be webcast at http://www.dominos.com . If you are unable to participate on the call, a replay will be available through midnight on November 25, 2005 by dialing (800) 642-1687 (U.S./Canada) or (706) 645-9291 (International), conference ID 3420972. The webcast will be archived for 30 days on http://www.dominos.com.
Board Declares Third Quarter Dividend
The Company's third quarter dividend, in the amount of 10 cents per share, will be paid on December 30, 2005 to shareholders of record as of the close of business on December 15, 2005. On an annualized basis, our third quarter dividend equates to an approximate 1.9% dividend yield, based on the Company's closing stock price of $21.31 on October 21, 2005.
Impact of Hurricanes Katrina and Rita
The Company's overall operations and financial condition were not significantly impacted by hurricanes Katrina or Rita. However, 14 franchise stores in Louisiana and Mississippi suffered significant damage and are not expected to re-open in the near term. These stores have been designated as closed stores for store count purposes. Our Company-owned distribution center in Louisiana suffered only minor damage and continues to be fully operational.
Summary of Financial Results
Global Retail Sales Growth
Global retail sales include all retail sales worldwide at Company-owned and franchise stores (see Definitions).
(versus the prior year period) Third Quarter First Three Quarters of 2005 of 2005 Domestic Stores +3.3% +8.0% International stores +17.7% +19.9% Global retail sales +7.8% +11.7%
The increases in third quarter and year-to-date global retail sales versus the prior year periods were driven by increases in same store sales and higher store counts as detailed in the following charts.
Same Store Sales Growth See Definitions. (versus the prior year period) Third Quarter of 2005 First Three Quarters of 2005 Domestic Company-owned stores +4.2% +8.9% Domestic franchise stores +0.7% +5.9% Total Domestic Stores +1.1% +6.3% International stores +4.5% +6.9% Store Counts and Net Unit Growth Domestic Domestic Total Company-owned Franchise Domestic International Stores Stores (1) Stores Stores Total Store count at June 19, 2005 569 4,460 5,029 2,849 7,878 Openings 3 27 30 76 106 Closings - (33) (33) (6) (39) Transfers 2 (2) - - - Store count at September 11, 2005 574 4,452 5,026 2,919 7,945 Third quarter of 2005 net growth 5 (8) (3) 70 67 First three quarters of 2005 net growth (6) 24 18 170 188 Trailing 4 quarters net growth (4) 85 81 261 342
(1) The domestic franchise store counts at September 11, 2005 reflect 14 closed stores as a result of Hurricane Katrina.
Revenues Third Quarter First Three Quarters (dollars in % % thousands) 2005 2004 Change 2005 2004 Change Domestic Company-owned stores $91,024 $87,471 4.1% $280,923 $259,497 8.3% Domestic franchise 35,914 35,199 2.0% 112,384 103,604 8.5% Domestic distribution 182,085 177,422 2.6% 572,127 529,199 8.1% International 28,553 24,886 14.7% 88,764 75,669 17.3% Total revenues (1) $337,576 $324,978 3.9% $1,054,198 $967,969 8.9%
(1) Total revenues primarily include retail sales at Company-owned stores, royalties from franchise stores, and related sales from distribution operations, which sell food and equipment to all Company-owned stores and certain franchise stores. Company-owned store and franchise store revenues may vary significantly from period to period due to changes in store count mix, while distribution revenues may vary significantly as a result of fluctuations in food prices, primarily cheese prices.
The increases in third quarter and year-to-date total revenues versus the prior year periods were due primarily to increases in domestic Company-owned store revenues, which were driven by higher same store sales, and increases in distribution volumes which were driven by increases in domestic franchise retail sales, offset in part by lower cheese costs. The published cheese block price-per-pound averaged $1.48 and $1.51 in the third quarter and first three quarters of 2005, respectively, down from $1.60 and $1.65 in the comparable periods of 2004. Total revenues were also positively impacted by increases in revenues from international operations, primarily as a result of higher same store sales and store counts.
Operating Margin Third Quarter (dollars in thousands) % of % of 2005 Revenues 2004 Revenues Domestic Company-owned stores $19,240 21.1% $15,353 17.6% Domestic franchise (1) 35,914 100.0% 35,199 100.0% Domestic distribution 17,655 9.7% 16,420 9.3% International 13,703 48.0% 12,310 49.5% Total operating margin $86,512 25.6% $79,282 24.4% First Three Quarters (dollars in thousands) % of % of 2005 Revenues 2004 Revenues Domestic Company-owned stores $57,906 20.6% $48,305 18.6% Domestic franchise (1) 112,384 100.0% 103,604 100.0% Domestic distribution 55,374 9.7% 49,516 9.4% International 42,260 47.6% 36,570 48.3% Total operating margin $267,924 25.4% $237,995 24.6%
(1) Domestic franchise operations do not have a cost of sales component. Accordingly, the domestic franchise operating margin equals domestic franchise revenues.
The increases in the third quarter and year-to-date total operating margin versus the prior year periods were due primarily to increases in retail sales from both international and domestic franchise operations, which drove higher royalty revenues. Total operating margin was also positively impacted by improvements in Company-owned store margins as a result of higher sales and lower insurance and food costs. In addition, operating margins in our domestic distribution operations increased as a result of higher volumes resulting from increases in domestic franchise retail sales. These increases were offset in part by increases in delivery costs due to higher fuel prices.
Total operating margin as a percentage of revenues increased 1.2 and 0.8 percentage points during the third quarter and year-to-date period, respectively, versus the prior year periods. Operating margin as a percentage of total revenues was positively impacted as a result of higher same store sales and store counts, which generated increased domestic and international franchise royalty revenues, higher distribution volumes and higher domestic Company-owned store revenues. Additionally, the total operating margin as a percentage of revenues was positively impacted as a result of lower food costs, including cheese and insurance costs, which benefited both domestic Company-owned store and distribution operating margins as a percentage of revenues. These increases were offset in part by increases in delivery costs due to higher fuel prices.
As mentioned above, the total operating margin as a percentage of revenues was positively impacted by lower cheese costs. Cheese price changes are a "pass-through" in domestic distribution revenues and cost of sales, and, as such, have no impact on the related operating margin. However, cheese price changes do impact operating margin as a percentage of revenues. Had the 2005 cheese prices been in effect during 2004, the total operating margin as a percentage of total revenues would have been approximately 24.6% and 24.8% for the third quarter and first three quarters of 2004, respectively, versus the reported 24.4% and 24.6%. This would have resulted in operating margin improvements of 1.0 and 0.6 percentage points in the third quarter and first three quarters of 2005, respectively, versus the reported improvements of 1.2 and 0.8 percentage points.
Similarly, had the 2005 cheese prices been in effect during 2004, the domestic distribution operating margin as a percentage of domestic distribution revenues would have been approximately 9.4% and 9.5% for the third quarter and first three quarters of 2004, respectively, versus the reported 9.3% and 9.4%. This would have resulted in operating margin improvements of 0.3 and 0.2 percentage points in the third quarter and first three quarters of 2005, respectively, versus the reported improvements of 0.4 and 0.3 percentage points.
General and Administrative Expenses
General and administrative expenses decreased $9.8 million, or 19.2%, during the third quarter of 2005 versus the prior year period, and decreased $1.3 million, or 1.1%, during the first three quarters of 2005 versus the prior year period. These decreases in general and administrative expenses were due primarily to the $10.0 million payment made to an affiliate of our former majority stockholder in connection with our initial public offering to terminate its management agreement with us, which occurred in the third quarter of 2004. The decrease for the year-to-date period was offset in part by increases in variable general and administrative expenses, including higher administrative labor due primarily to higher performance-based bonuses and increases in advertising contributions as a result of higher Company-owned store revenues. As a percentage of total revenues, general and administrative expenses decreased 3.5 percentage points to 12.2% in the third quarter of 2005 versus the prior year period, and decreased 1.2 percentage points to 11.9% in the first three quarters of 2005 versus the prior year period.
Income from Operations
Income from operations increased $17.0 million, or 59.9%, during the third quarter of 2005 versus the prior year period, and increased $31.3 million, or 28.1%, during the first three quarters of 2005 versus the prior year period. Income from operations was positively impacted by higher royalty revenues from domestic and international franchise stores, increases resulting from higher domestic Company-owned same store sales, lower food and insurance costs, and higher volumes in our distribution business. Additionally, income from operations was positively impacted by the aforementioned decreases in general and administrative expenses.
Interest Expense, net
Interest expense, net decreased $5.5 million, or 32.0%, during the third quarter of 2005 versus the prior year period, and decreased $12.3 million, or 27.4%, during the first three quarters of 2005 versus the prior year period. These decreases were due primarily to lower average debt balances and $3.7 million in deferred financing and bond discount expense related to our initial public offering in the third quarter of 2004. The average outstanding debt balance, excluding capital lease obligations, decreased $139.8 million to $758.4 million in the third quarter, from $898.2 million in the prior year period, and decreased $161.0 million to $760.9 million in the year-to-date period, from $921.9 million for the first three quarters of 2004.
The Company's effective borrowing rate increased 0.4 percentage points to 6.0% during the third quarter, from 5.6% in the prior year period, and decreased 0.2 percentage points to 5.5% during the year-to-date period, from 5.7% for the first three quarters of 2004. The effective borrowing rate during 2005 was positively impacted by reduced senior credit facility margin pricing, offset in part by higher market interest rates. The effective borrowing rate for the third quarter of 2005 was negatively impacted by changes in our outstanding interest rate swaps. At June 30, 2005, two floating-to-fixed interest rate derivatives expired with total notional amounts of $375 million. The Company paid 1.62% under a $300 million notional amount contract and 3.25% under a $75 million notional amount contract while the counterparty paid a floating interest rate under each contract. Concurrently, a $350 million notional amount floating-to-fixed interest rate derivative started with the Company paying 3.21% under the contract while the counterparty pays a floating interest rate.
The third quarter and year-to-date 2004 other amount of $9.8 million was comprised of losses incurred in connection with debt retirements, including $9.0 million incurred in connection with the redemption of $109.1 million of Domino's, Inc.'s senior subordinated notes in August 2004.
Net income increased $19.8 million to $20.8 million during the third quarter of 2005 versus the prior year period, and increased $33.9 million to $69.2 million during the first three quarters of 2005 versus the prior year period. These increases were due primarily to the aforementioned increases in income from operations as well as the reductions in interest expense and other expense. Additionally, net income for the year-to-date period was positively impacted by lower income taxes resulting from the reversal of valuation allowances related to net operating loss deferred tax assets from certain of our foreign operations.
Pro Forma EPS
Diluted earnings per share for the third quarter and year-to-date periods of 2005 were $0.30 and $1.00, respectively. Pro forma diluted earnings per share for the third quarter and year-to-date periods of 2004 were $0.23 and $0.75, respectively. Diluted EPS, as reported for the third quarter and first three quarters of 2004 is disclosed in the accompanying condensed consolidated statements of income.
Management believes it is helpful to investors to be presented with a pro forma EPS number for the third quarter and year-to-date periods of 2004, which is based on the Company's capital structure following the completion of its initial public offering in the third quarter of 2004. As a result, the Company is providing pro forma EPS amounts for the third quarter and first three quarters of 2004, assuming that the following transactions occurred at the beginning of 2004:
(i) the reclassification of previously outstanding Class A Common Stock and Class L Common Stock into Common Stock; and
(ii) the issuance of the 9,375,000 shares in the IPO and the redemption of $109.1 million of senior subordinated notes, resulting in a reduction of interest expense of approximately $2.1 million ($1.3 million after-tax) in each of the first two quarters of 2004 and $1.6 million ($1.0 million after- tax) for the third quarter of 2004.
The following table reconciles net income, as reported to pro forma net income for the third quarter and first three quarters of 2004, respectively, and also presents the pro forma diluted weighted average shares of common stock outstanding used to determine pro forma diluted earnings per share. The denominator in the pro forma diluted EPS calculations below assumes that the capital structure in place after the IPO was in place for the first three quarters of 2004.
First Three Third Quarter Quarters of 2004 of 2004 (In thousands, except per share data) Net income, as reported $979 $35,270 Adjustments: Reduction in interest expense from debt retirement 1,575 5,775 Elimination of payment to terminate management fee 10,000 10,000 Elimination of bond redemption premium and related expenses 12,749 12,749 Total adjustments (pre-tax) 24,324 28,524 Tax impact (9,183) (10,768) Total adjustments (net of tax) 15,141 17,756 Pro forma net income $16,120 $53,026 Weighted average shares outstanding - diluted 71,072 71,072 Earnings per share - diluted, pro forma $0.23 $0.75 The following table reconciles diluted EPS, as reported to pro forma diluted EPS for the third quarter and first three quarters of 2004, respectively. First Three Third Quarter Quarters of 2004 of 2004 Earnings per share - diluted, as reported $(0.02) $0.35 Impact of pro forma adjustments 0.21 0.25 Impact of the reclassification of the Class L conversion and issuance of common stock assuming the IPO occurred at the beginning of the year 0.04 0.15 Earnings per share - diluted, pro forma $0.23 $0.75 See Comments on Regulation G.
As of September 11, 2005, the Company had $755.2 million in total debt and $21.9 million of cash and cash equivalents. Including the effect of interest rate derivatives, approximately 70% of outstanding borrowings were contractually fixed at the end of the third quarter. The Company voluntarily repaid $25.0 million of senior credit facility borrowings in the first quarter of 2005. During the second and third quarters of 2005, the Company repaid $25.1 million and $15.1 million of outstanding borrowings, respectively, which consisted primarily of repayments of the $40.0 million of borrowings on our revolving credit facility that were used to repurchase approximately 4.4 million shares of the Company's common stock during the second quarter of 2005. The Company is currently not required to pay down principal on its senior subordinated notes until 2011. The next scheduled principal amortization payment of $1.2 million on its senior credit facility is due on March 31, 2006. As of September 11, 2005, the Company had no borrowings under its $125.0 million revolving credit facility. Letters of credit issued under the revolving credit facility were $28.9 million at September 11, 2005.
Additionally, during the third quarter of 2005, the Company received credit rating upgrades from Standard and Poor's. The rating on its senior secured debt improved to BB- from B+, while the rating on its senior subordinated debt improved to B from B-. According to Standard and Poor's, these rating upgrades were given due to the Company's leading market position, improving operating performance and a history of de-leveraging.
We did not have any material commitments for capital expenditures as of September 11, 2005. We currently expect our full year 2005 capital expenditures to total between $28 million and $38 million, including approximately $8 million relating to the completion of the renovation of our world headquarters.
The Company uses "global retail sales" to refer to total worldwide retail sales at Company-owned and franchise stores. Management believes global retail sales information is useful in analyzing revenues, because franchisees pay royalties that are based on a percentage of franchise retail sales. Management reviews comparable industry global retail sales information to assess business trends and to track the growth of the Domino's Pizza(R) brand. In addition, distribution revenues are directly impacted by changes in domestic franchise retail sales. Retail sales for franchise stores are reported to the Company by its franchisees and are not included in Company revenues.
The Company uses "same store sales growth," calculated including only sales from stores that also had sales in the comparable period of the prior year, but excluding sales from certain seasonal locations such as stadiums and concert arenas. International same store sales growth is calculated similarly to domestic same store sales growth. Changes in international same store sales are reported on a constant dollar basis which reflects changes in sales in international local currency.
Comments on Regulation G
In addition to the GAAP financial measures set forth in this press release, the Company has included certain non-GAAP financial measures within the meaning of Regulation G as a result of the significant changes in the Company's capital structure resulting from our initial public offering in 2004. The Company has included "Pro Forma EPS," calculated based on "Pro Forma Net Income," which are both non-GAAP financial measures. The Company's management believes that these measurements are important to investors and other interested persons and that such persons benefit from having a consistent basis for comparison between quarters and for comparison with other companies in the industry. While management believes that these non-GAAP financial measures will be helpful to investors in understanding and evaluating the Company's performance in the periods immediately following the IPO, management does not expect to continue to provide such non-GAAP financial measures once the effects of the significant changes to the Company's capital structure are able to be fully reflected in the Company's financial statements.
About Domino's Pizza
Founded in 1960, Domino's Pizza is the recognized world leader in pizza delivery. Domino's is listed on the NYSE under the symbol "DPZ." Through its primarily franchised system, Domino's operates a network of 7,945 franchised and Company-owned stores in the United States and more than 50 countries. The Domino's Pizza(R) brand, named a Megabrand by Advertising Age magazine, had global retail sales of more than $4.6 billion in 2004, comprised of nearly $3.2 billion domestically and more than $1.4 billion internationally. Domino's Pizza was named "Chain of the Year" by Pizza Today magazine, the leading publication of the pizza industry and is the "Official Pizza of NASCAR(R)." More information on the Company, in English and Spanish, can be found on the web at http://www.dominos.com .
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relating to our anticipated profitability and operating performance reflect management's expectations based upon currently available information and data. However, actual results are subject to future risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that can cause actual results to differ materially include: the uncertainties relating to litigation; consumer preferences, spending patterns and demographic trends; the effectiveness of our advertising, operations and promotional initiatives; our ability to retain key personnel; new product and concept developments by Domino's and other food-industry competitors; the ongoing profitability of our franchisees and the ability of Domino's and our franchisees to open new restaurants; changes in food prices, particularly cheese, labor, utilities, insurance, employee benefits and other operating costs; the impact that widespread illness or general health concerns may have on our business and the economy of the countries in which we operate; severe weather conditions and natural disasters; changes in our effective tax rate; changes in government legislation and regulations; adequacy of our insurance coverage; costs related to future financings and changes in accounting policies. Further information about factors that could affect Domino's financial and other results is included in the Company's filings with the Securities and Exchange Commission. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Domino's Pizza, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) Fiscal Quarter Ended September 11, % of Total September 5, % of Total (Dollars in thousands, 2005 Revenues 2004 Revenues except per share data) Revenues: Domestic Company-owned stores $91,024 $87,471 Domestic franchise 35,914 35,199 Domestic distribution 182,085 177,422 International 28,553 24,886 Total revenues 337,576 100.0% 324,978 100.0% Cost of sales: Domestic Company-owned stores 71,784 72,118 Domestic distribution 164,430 161,002 International 14,850 12,576 Total cost of sales 251,064 74.4% 245,696 75.6% Operating margin 86,512 25.6% 79,282 24.4% General and administrative 41,128 12.2% 50,904 15.7% Income from operations 45,384 13.4% 28,378 8.7% Interest expense, net 11,591 3.4% 17,054 5.2% Other - - 9,751 3.0% Income before provision for income taxes 33,793 10.0% 1,573 0.5% Provision for income taxes 12,977 3.8% 594 0.2% Net income $20,816 6.2% $979 0.3% Earnings per share: As reported: Common stock - diluted $0.30 $(0.02) Class L common stock - diluted N/A $0.50 Pro forma: Common stock - diluted N/A $0.23 Domino's Pizza, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) Three Fiscal Quarters Ended September 11, % of Total September 5, % of Total (Dollars in thousands, 2005 Revenues 2004 Revenues except per share data) Revenues: Domestic Company-owned stores $280,923 $259,497 Domestic franchise 112,384 103,604 Domestic distribution 572,127 529,199 International 88,764 75,669 Total revenues 1,054,198 100.0% 967,969 100.0% Cost of sales: Domestic Company-owned stores 223,017 211,192 Domestic distribution 516,753 479,683 International 46,504 39,099 Total cost of sales 786,274 74.6% 729,974 75.4% Operating margin 267,924 25.4% 237,995 24.6% General and administrative 125,466 11.9% 126,824 13.1% Income from operations 142,458 13.5% 111,171 11.5% Interest expense, net 32,479 3.1% 44,761 4.7% Other - - 9,751 1.0% Income before provision for income taxes 109,979 10.4% 56,659 5.8% Provision for income taxes 40,804 3.8% 21,389 2.2% Net income $69,175 6.6% $35,270 3.6% Earnings per share: As reported: Common stock - diluted $1.00 $0.35 Class L common stock - diluted N/A $5.57 Pro forma: Common stock - diluted N/A $0.75 Domino's Pizza, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) January 2, 2005 September 11, 2005 (Note) (In thousands) Assets Current assets: Cash and cash equivalents $21,902 $40,396 Accounts receivable 68,096 73,138 Inventories 23,194 21,505 Advertising fund assets, restricted 30,685 32,817 Other assets 24,622 21,635 Total current assets 168,499 189,491 Property, plant and equipment, net 135,225 136,883 Other assets 110,405 120,973 Total assets $414,129 $447,347 Liabilities and stockholders' deficit Current liabilities: Current portion of long-term debt $2,693 $25,295 Accounts payable 53,560 55,350 Advertising fund liabilities 30,685 32,817 Other accrued liabilities 78,843 76,205 Total current liabilities 165,781 189,667 Long-term liabilities: Long-term debt, less current portion 752,508 755,405 Other accrued liabilities 48,407 52,155 Total long-term liabilities 800,915 807,560 Total stockholders' deficit (552,567) (549,880) Total liabilities and stockholders' deficit $414,129 $447,347
Note: The balance sheet at January 2, 2005 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.
Domino's Pizza, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Three Fiscal Quarters Ended September 11, September 5, 2005 2004 (In thousands) Cash flows from operating activities: Net income $69,175 $35,270 Adjustments to reconcile net income to net cash flows provided by operating activities: Depreciation and amortization 22,240 21,428 Amortization of deferred financing costs and debt discount 2,057 6,535 Provision for deferred income taxes 1,933 8,927 Other 1,611 1,140 Changes in operating assets and liabilities 11,873 (14,155) Net cash provided by operating activities 108,889 59,145 Cash flows from investing activities: Capital expenditures (20,692) (28,640) Other 1,994 1,945 Net cash used in investing activities (18,698) (26,695) Cash flows from financing activities: Proceeds from issuance of common stock - 119,550 Proceeds from issuance of long-term debt 40,000 - Repayments of long-term debt and capital lease obligation (65,220) (155,593) Cash paid for financing fees (514) (654) Repurchase of common stock (75,000) - Dividends (13,512) - Proceeds from exercise of stock options 3,761 277 Distributions - (16,880) Other 1,581 (873) Net cash used in financing activities (108,904) (54,173) Effect of exchange rate changes on cash and cash equivalents 219 491 Decrease in cash and cash equivalents (18,494) (21,232) Cash and cash equivalents, at beginning of period 40,396 46,391 Cash and cash equivalents, at end of period $21,902 $25,159
SOURCE Domino's Pizza, Inc.
Lynn M. Liddle, EVP, Communications and Investor Relations of Domino's Pizza,