SEC Filing - Domino's Pizza

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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): May 6, 2003 Domino's, Inc. (Exact name of registrant as specified in its charter) Delaware 333-74797 38-3025165 (State or other jurisdiction of (Commission File No.) (I.R.S. Employer incorporation or organization) Identification Number) 30 Frank Lloyd Wright Drive Ann Arbor, Michigan 48106 (Address of principal executive offices) (734) 930-3030 (Registrant's telephone number, including area code)

Item 7. Financial Statements and Exhibits (c) Exhibits Exhibit Number Description - ------ ----------- 99.1 Domino's, Inc. first quarter press release, dated May 6, 2003. Item 9. Regulation FD Disclosure On May 6, 2003, the Company issued a press release announcing its first quarter 2003 results. The press release is attached hereto as Exhibit 99.1. This information is being is being provided under Item 12. SIGNATURES 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: May 6, 2003 /s/ Harry J. Silverman --------------------------- Chief Financial Officer

EXHIBIT 99.1 Domino's Pizza Announces First Quarter 2003 Results System-wide Sales Up 3%; Net Income Up 15.3% ANN ARBOR, Michigan - May 6, 2003 - Domino's, Inc., the recognized leader in pizza delivery, today announced strong earnings and system-wide sales results for the first quarter of 2003, which ended March 23, 2003. Management attributed the Company's positive results primarily to increases in worldwide store counts and international same store sales, continued emphasis on controlling overhead costs and increased volumes and efficiencies from distribution operations. Financial Highlights (versus first quarter 2002) . Net income increased 15.3% to $18.3 million. . Earnings before interest, taxes, depreciation and amortization, as defined (EBITDA) increased 8.9% to a record $49.8 million. . System-wide sales increased 3.0% to a record $976.3 million. . Domestic stores same store sales decreased 1.1%; comprised of a domestic franchise same store sales decrease of 0.4% and a domestic Company-owned same store sales decrease of 5.6%. . International same store sales increased 4.4%, on a constant dollar basis, marking the 37th consecutive quarter of international same store sales growth. . The Company repaid $20.5 million of debt during the first quarter of 2003, bringing total debt repayments over the trailing 12 months to nearly $59 million. . As of the end of the first quarter, there were 7,253 Domino's Pizza stores in operation worldwide, a net increase of 177 stores over the trailing 12 months. "Achieving record results during this period of economic uncertainty and soft sales is significant," said Domino's Chairman and Chief Executive Officer David A. Brandon. "We benefited not only from lower than expected cheese costs during the quarter, but from the growth in our worldwide store counts. Our international business unit, which is celebrating its 20/th/ anniversary this year, continues to drive positive sales and build a strong global brand." Brandon added: "Our system has weathered challenging market conditions before - and achieving first quarter domestic same store sales that were virtually even with our very strong first quarter of 2002 results is yet another measure of our resiliency. I'm also very proud of the recognition our industry continues to give to Domino's, as we were recently named Chain of the Year by Pizza Today magazine." More...

Page Two: Domino's, Inc., Q103 Earnings Release Financial Summaries First Quarter Ended ------------------------------------- (Dollars in millions) March 23, March 24, % 2003 2002 Change ---- ---- ------ System-wide sales ** $976.3 $947.6 3.0% Total revenues ** 312.3 308.1 1.4 EBITDA 49.8 45.7 8.9 Income from operations 41.3 38.5 7.3 Net income 18.3 15.9 15.3 ** System-wide sales most accurately represent total retail sales for our entire corporate and franchise system worldwide. Revenues primarily include retail sales at our Company-owned stores, royalties from franchise stores, and related sales from our 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, including cheese. Revenues: The increase in first quarter system-wide sales was due primarily to an increase in international same store sales and worldwide store counts, offset in part by a decrease in domestic stores same store sales. The increase in first quarter total revenues was due primarily to increases in revenues from domestic distribution and international operations. The increase in revenues from domestic distribution operations was due primarily to an increase in volumes, offset in part by a market decrease in overall food prices, including cheese. The cheese block price averaged $1.12 per pound in the first quarter of 2003, down $0.14 per pound from the first quarter of 2002. The increase in revenues from international operations was due primarily to increases in same store sales and store counts. International same store sales increased 4.4%, on a constant dollar basis. Additionally, revenues from domestic stores decreased slightly due primarily to a decrease in same store sales at both domestic Company-owned and franchise stores, offset in part by the timing of the Company's acquisition of 83 stores from our former franchisee in Arizona during the first quarter of 2002 (the "Arizona Acquisition"). As a result of the Arizona Acquisition, revenues from domestic Company-owned stores included the acquired stores' revenues for the full first quarter in 2003 compared to a partial first quarter in 2002. Domestic stores same store sales decreased 1.1%, comprised of a 0.4% decrease in domestic franchise same store sales and a 5.6% decrease in domestic Company-owned same store sales. These decreases in same store sales were a result of a continued weak economic climate, hesitant consumer spending and continued competitive pressures. The Company was also cycling over a 7.6% domestic stores same store sales increase in the same period of 2002. Earnings: The increase in first quarter EBITDA was due primarily to increases in system-wide sales, a reduction in certain commodity prices, including cheese, increases in distribution volumes and lower general and administrative expenses, including reductions in administrative labor. These increases in EBITDA were offset in part by higher food costs at our Company-owned stores due primarily to changes in product mix per order as a result of aggressive promotions and new product introductions. More...

Page Three: Domino's, Inc., Q103 Earnings Release The increase in first quarter net income was due primarily to increases in EBITDA and reductions in our interest costs due to lower debt levels and more favorable interest rates. The increase in net income was offset in part by an increase in provision for income taxes due to an increase in pre-tax income. EBITDA Reconciliation to GAAP Measure EBITDA represents earnings before interest, taxes, depreciation, amortization, gains (losses) on sale/disposal of assets and other, and gain (loss) on debt extinguishments. Management uses EBITDA as a primary profit measure as management believes it provides a clear year-to-year comparison of the Company's operating results. Furthermore, 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 the operating performance of our company and it is a required disclosure under SFAS No. 131 relating to the profitability of our reportable segments. EBITDA should not be considered as an alternative to cash flows provided by operating activities as a measure of liquidity. The following table reconciles EBITDA to consolidated income from operations (in thousands): First Quarter Ended ------------------------ March 23, March 24, 2003 2002 ---- ---- EBITDA $ 49,831 $ 45,741 Depreciation and amortization (6,738) (7,152) Gains (losses) on sale/disposal of assets and other (3) 171 Loss on debt extinguishments (1,743) (213) -------- -------- Income from operations $ 41,347 $ 38,547 ======== ======== About Domino's: Founded in 1960, Domino's Pizza operates a network of 7,253 Company-owned and franchised stores in the United States and more than 50 countries, and is the recognized leader in pizza delivery. Domino's Pizza was named "Chain of the Year" for 2003 by Pizza Today magazine, the leading publication of the pizza industry. More information on the Company, in English and Spanish, can be found on our web site at www.dominos.com. ### Contact: Tim McIntyre, Vice President of Communications - Domino's, Inc. 734.930.3563

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.

- -------------------------------------------------------------------------------- Domino's, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) - -------------------------------------------------------------------------------- First Quarter Ended ------------------------ March 23, March 24, 2003 2002 --------- --------- (In thousands) Revenues: Domestic Company-owned stores $ 89,942 $ 89,906 Domestic franchise 34,404 34,559 Domestic distribution 167,436 165,745 International 20,470 17,846 --------- --------- Total revenues 312,252 308,056 --------- --------- Operating expenses: Cost of sales 230,052 225,338 General and administrative 40,853 44,171 --------- --------- Total operating expenses 270,905 269,509 --------- --------- Income from operations 41,347 38,547 Interest expense, net 12,230 13,301 --------- --------- Income before provision for income taxes 29,117 25,246 Provision for income taxes 10,773 9,341 --------- --------- Net income $ 18,344 $ 15,905 ========= =========

- -------------------------------------------------------------------------------- Domino's, Inc. and Subsidiaries Condensed Consolidated Balance Sheets - -------------------------------------------------------------------------------- March 23, 2003 December 29, 2002 (Unaudited) (Note) -------------- ----------------- (In thousands) Assets Current assets: Cash and cash equivalents $ 30,238 $ 22,472 Accounts receivable 56,209 57,497 Inventories 21,486 21,832 Advertising fund assets, restricted 27,458 28,231 Other assets 19,159 16,880 ----------- ----------- Total current assets 154,550 146,912 Property, plant and equipment, net 118,935 120,547 Other assets 150,601 154,968 ----------- ----------- Total assets $ 424,086 $ 422,427 =========== =========== Liabilities and stockholder's deficit Current liabilities: Current portion of long-term debt $ 3,748 $ 2,843 Accounts payable 50,568 46,131 Advertising fund liabilities 27,458 28,231 Other accrued liabilities 79,086 80,023 ----------- ----------- Total current liabilities 160,860 157,228 Long-term liabilities: Long-term debt, less current portion 577,778 599,180 Other accrued liabilities 41,741 41,600 ----------- ----------- Total long-term liabilities 619,519 640,780 Stockholder's deficit (356,293) (375,581) ----------- ----------- Total liabilities and stockholder's deficit $ 424,086 $ 422,427 =========== =========== __________ Note: The balance sheet at December 29, 2002 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.