SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): March 4, 2003 Domino's, Inc. (Exact name of registrant as specified in its charter) 30 Frank Lloyd Wright Drive Ann Arbor, Michigan 48106 (Address of principal executive offices) (734) 930-3030 (Registrant's telephone number, including area code)
Delaware 333-74797 38-3025165 (State or other jurisdiction of (Commission File No.) (I.R.S. Employer incorporation or organization) Identification Number) Item 5. Other Events and Regulation FD Disclosure On March 4, 2003, the Company issued its annual press release announcing its 4th quarter and full year 2002 results. The press release is attached hereto as Exhibit 99.1. Item 7. Financial Statements and Exhibits (c) Exhibits Exhibit Number Description 99.1 Domino's, Inc. annual press release, dated March 4, 2003. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Domino's, Inc. (Registrant) Date: March 4, 2003 /s/ Harry J. Silverman --------------------------- Chief Financial Officer
EXHIBIT 99.1 Domino's Pizza Announces Record Results for 2002; Same Store Sales Growth Leads National Pizza Chains for Second Consecutive Year ANN ARBOR, Michigan - March 4, 2003 - Domino's, Inc., the recognized leader in pizza delivery, today announced record results for the fourth quarter and fiscal 2002, which ended December 29, 2002. In addition to achieving record earnings and system-wide sales, Domino's full year domestic same store sales growth (+2.6%) exceeded those of all reporting national pizza chains. Management attributed its success to continued emphasis on product quality and customer service as well as strong marketing promotions. 2002 Highlights (versus full year 2001) . Net income increased 64.9% to $60.7 million. . Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 16.7% to a record $189.3 million. . Domestic same store sales increased 2.6%; comprised of a domestic franchise same store sales increase of 3.0% and flat domestic Company-owned same store sales. . International same store sales increased 4.1%, on a constant dollar basis. . System-wide sales increased 4.7% to a record of nearly $4.0 billion. . The Company repaid $52.7 million of debt during 2002. Fourth Quarter 2002 Highlights (versus fourth quarter 2001) . Net income increased 90.3% to $23.1 million. . EBITDA increased 17.6% to $62.1 million. . Domestic same store sales remained flat; comprised of a domestic franchise same store sales increase of 0.6% and a domestic Company-owned same store sales decrease of 4.1%. . International same store sales increased 3.8%, on a constant dollar basis, marking the 36/th/ consecutive quarter of international same store sales growth. . System-wide sales increased 2.9% to $1.2 billion. . The Company repaid $8.8 million of debt during the fourth quarter of 2002. David A. Brandon, Domino's Chairman and Chief Executive Officer, said: "We have always believed that the pizza company with the best people will win. This philosophy has proven out once again through our strong 2002 financial results, and through our fourth consecutive year of improving quality and customer service, as ranked by the American Customer Satisfaction Index. Our exceptional people - franchisees, store managers and team members worldwide - continue to set us apart from our competitors." Management added that Domino's increased domestic market share in its core business of pizza delivery by nearly one full point, to 19.9%, as tracked by NPD Crest in 2002. Page Two: Domino's, Inc., FY02 Earnings Release Financial Summaries Revenues Fourth Quarter: The increase in fourth quarter system-wide sales was due primarily to an increase in worldwide store counts and, to a lesser extent, increases in domestic franchise and international same store sales. The decrease in fourth quarter total revenues was due primarily to a decrease in revenues from domestic distribution operations, offset in part by increases in revenues from domestic Company-owned stores and international operations. The decrease in revenues from domestic distribution operations was due primarily to a market decrease in overall food prices, primarily cheese, offset in part by an increase in volumes relating to an increase in domestic franchise system-wide sales. The increase in revenues from domestic Company-owned stores was due primarily to an increase in the average number of domestic Company-owned stores open during 2002, primarily as a result of the Company's acquisition of 83 franchised stores in Arizona during the first quarter of 2002. Domestic same store sales remained flat, comprised of a 0.6% increase in domestic franchise same store sales, offset by a 4.1% decrease in domestic Company-owned same store sales. International same store sales increased 3.8%, on a constant dollar basis. Fiscal Year: The increase in year-to-date system-wide sales was due primarily to increases in worldwide store counts and increases in both domestic and international same store sales. The increase in year-to-date total revenues was due primarily to increases in revenues from domestic Company-owned and franchised stores, and international operations, offset in part by a decrease in revenues from domestic distribution operations. The increase in revenues from domestic Company-owned and franchised stores, and international operations was due primarily to increases in same store sales and worldwide store counts. Domestic same store sales increased 2.6%, comprised of a 3.0% increase in domestic franchise same store sales and flat domestic Company-owned same store sales. International same store sales increased 4.1%, on a constant dollar basis. At year-end 2002, there were 7,230 stores in operation worldwide, comprised of 577 domestic Company-owned stores, 4,271 domestic franchised stores and 2,382 international stores. The decrease in revenues from domestic distribution operations was due primarily to a market decrease in overall food prices, primarily cheese, and a decrease in the average number of domestic franchised stores open in 2002, primarily as a result of the Company's acquisition of 83 franchised stores in Arizona during the first quarter of 2002. These decreases in revenues from domestic distribution were offset in part by an increase in volumes relating to increases in domestic franchise same store sales.
Fiscal Year Ended Fourth Quarter Ended --------------------------------------- --------------------------------------- December 29, December 30, % December 29, December 30, % (Dollars in millions) 2002 2001 Change 2002 2001 Change ---- ---- ------ ---- ---- ------ System-wide sales $3,961.7 $3,784.6 4.7% $1,230.8 $1,196.5 2.9% Total revenues 1,275.0 1,258.3 1.3 395.8 397.4 (0.4) EBITDA 189.3 162.2 16.7 62.1 52.8 17.6 Income from operations 156.2 126.9 23.1 52.7 39.7 32.7 Net income 60.7 36.8 64.9 23.1 12.2 90.3 Page Three: Domino's, Inc., FY02 Earnings Release Earnings: The increases in fourth quarter and year-to-date EBITDA were due primarily to increases in system-wide sales at our domestic Company-owned and franchised stores, and international operations, reductions in food costs at our Company-owned stores, driven primarily by decreases in cheese prices, increases in distribution volumes and lower general and administrative expenses. EBITDA was positively impacted by the favorable resolution of a contingent liability and collection of a previously reserved receivable, both related to our international operations. This resolution resulted in a $7.2 million favorable year over year impact on EBITDA. These increases in EBITDA were offset in part by an increase in insurance costs. The increases in fourth quarter and year-to-date net income were due primarily to increases in EBITDA, reductions in our interest costs due to lower debt levels and more favorable interest rates, the favorable impact of no longer amortizing goodwill and the absence of certain covenant not-to-compete amortization expense related to the covenant with our former majority stockholder which was fully amortized by the end of 2001. These increases in net income were offset in part by a $4.5 million write-off of financing fees through interest expense related to the Company's refinancing of its senior credit facility and increases in provision for income taxes due to increases in pre-tax income. Founded in 1960, Domino's Pizza operates a network of 7,230 Company-owned and franchised stores in the United States and more than 50 countries. For more information about the Company, visit our website at http://www.dominos.com/. ### Contact: Tim McIntyre, Vice President of Communications - Domino's, Inc. 734.930.3563 Conference Call Information On Tuesday, March 4, 2003, Domino's, Inc. will hold a conference call to review its 2002 financial results. The details are as follows: Time: 11:00 a.m. EST Domestic telephone number: (877) 531-2986 International telephone number: (612) 332-7516 Call ID: Ask for the Domino's, Inc. conference call moderated by Tim McIntyre A playback of the conference call will be available after the completion of the call through March 7, 2003, 11:59 p.m. EST, by calling (800) 475-6701 (domestic) or (320) 365-3844 (international) and dialing the number 674256. If you have any questions, please call Tim McIntyre at (734) 930-3563. EBITDA Reconciliation to GAAP Measure EBITDA represents earnings before interest, taxes, depreciation, amortization, gain (loss) on sale/disposal of assets and other, and gain (loss) on debt extinguishments. EBITDA information is provided as we use it extensively in internal management reporting to evaluate our business segments, we believe it assists the investing community in evaluating our company, and it is an important measure in our debt agreements. EBITDA should not be considered as an alternative to cash flows provided by operating activities as a measure of liquidity, as an alternative to income from operations or net income as a measure of our financial performance, or as an alternative to any other measure in accordance with accounting principles generally accepted in the United States. The following table reconciles EBITDA to consolidated income from operations (in thousands): SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Certain statements contained in this release relating to our anticipated profitability and operating performance are forward-looking and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Among these risks and uncertainties are competitive factors, increases in our operating costs, ability to retain our key personnel, our substantial leverage, ability to implement our growth and cost-saving strategies, industry trends and general economic conditions, adequacy of insurance coverage and other factors, all of which are described in our most recent annual report on Form 10-K, quarterly reports on Form 10-Q and other filings made 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.
Fiscal Year Ended Fourth Quarter Ended -------------------------------- ------------------------------ December 29, December 30, December 29, December 30, 2002 2001 2002 2001 ---- ---- ---- ---- EBITDA $ 189,262 $ 162,161 $ 62,078 $ 52,792 Depreciation and amortization (28,273) (33,092) (8,713) (11,931) Losses on sale/disposal of assets and other (2,919) (1,964) (56) (1,086) Loss on debt extinguishments (1,836) (217) (619) (71) --------- --------- --------- --------- Income from operations $ 156,234 $ 126,888 $ 52,690 $ 39,704 ========= ========= ========= ========= Domino's, Inc. and Subsidiaries Condensed Consolidated Statements of Income
Fiscal Year Ended Fourth Quarter Ended ------------------------------------ ----------------------------------- December 29, December 30, December 29, December 30, 2002 2001 2002 2001 ------------------------------------ ------------------------------------ (In thousands) Revenues: Domestic Company-owned stores $ 376,533 $ 362,189 $ 113,709 $ 108,865 Domestic franchise 140,667 134,195 43,448 43,153 Domestic distribution 676,018 691,902 211,938 221,847 International 81,762 69,995 26,707 23,577 ---------------- ---------------- ---------------- --------------- Total revenues 1,274,980 1,258,281 395,802 397,442 ---------------- ---------------- ---------------- --------------- Operating expenses: Cost of sales 938,972 937,899 294,394 294,865 General and administrative 179,774 193,494 48,718 62,873 ---------------- ---------------- ---------------- --------------- Total operating expenses 1,118,746 1,131,393 343,112 357,738 ---------------- ---------------- ---------------- --------------- Income from operations 156,234 126,888 52,690 39,704 Interest expense, net 59,784 66,602 15,787 19,807 ---------------- ---------------- ---------------- --------------- Income before provision for income taxes 96,450 60,286 36,903 19,897 Provision for income taxes 35,789 23,506 13,757 7,734 ---------------- ---------------- ---------------- --------------- Net income $ 60,661 $ 36,780 $ 23,146 $ 12,163 ================ ================ ================ =============== Domino's, Inc. and Subsidiaries Condensed Consolidated Balance Sheets - ----------- Note: The balance sheets have been derived from the audited consolidated financial statements, but do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
December 29, 2002 December 30, 2001 ----------------- ----------------- (In thousands) Assets Current assets: Cash and cash equivalents $ 22,472 $ 55,147 Accounts receivable 57,497 54,225 Inventories 21,832 22,088 Other assets 16,880 18,246 ----------------- ----------------- Total current assets 118,681 149,706 Property, plant and equipment, net 120,547 87,645 Other assets 154,968 165,247 ----------------- ----------------- Total assets $ 394,196 $ 402,598 ================= ================= Liabilities and stockholder's deficit Current liabilities: Current portion of long-term debt $ 2,843 $ 43,157 Accounts payable 46,131 50,430 Other accrued liabilities 80,023 80,852 ----------------- ----------------- Total current liabilities 128,997 174,439 Long-term liabilities: Long-term debt, less current portion 599,180 611,532 Other accrued liabilities 41,600 41,501 ----------------- ----------------- Total long-term liabilities 640,780 653,033 Stockholder's deficit (375,581) (424,874) ----------------- ----------------- Total liabilities and stockholder's deficit $ 394,196 $ 402,598 ================= =================