Dunkin´ Brands: Reports Third Quarter 2011 Results

Canton / MA. (db) Dunkin´ Brands Group Inc., the parent company of Dunkin´ Donuts (DD) and Baskin-Robbins (BR), reported results for the quarter ended September 24, 2011. «As a result of our successful product innovation, powerful marketing, and an intense focus on guest satisfaction and operational execution, we delivered robust third quarter results», said Nigel Travis, Chief Executive Officer, Dunkin´ Brands Group Inc. and President, Dunkin´ Donuts. «Our strong increases in system-wide sales and consolidated U.S. comparable store sales, which included positive growth for both Dunkin´ Donuts and Baskin-Robbins, reflect the strength of our overall business and underscore the opportunity we have to accelerate our profitable growth in the U.S. and around the world».

Consolidated Key Highlights

Third quarter 2011 financial highlights included:

• Global systemwide sales increased 8,9 percent over the third quarter of 2010, primarily attributable to system-wide sales growth of 8,3 percent for Dunkin´ Donuts U.S., as well as a 13,0 percent year-over year increase for Baskin-Robbins International sales and a 13,7 percent year-over-year increase for Dunkin´ Donuts International sales.
• Dunkin´ Donuts U.S. comparable store sales (which includes stores open 54 weeks or more) increased 6,0 percent, driven by an increase in ticket and traffic, while Baskin-Robbins U.S. comparable store sales increased 1,7 percent. As a result, consolidated U.S. comparable store sales increased 5,6 percent.
• Dunkin´ Brands´ franchisees and licensees opened 98 net new Dunkin´ Donuts and Baskin-Robbins locations on a global basis during the quarter and 332 net new locations, including one company-owned store, during the first nine months of 2011, increasing Dunkin´ Brands total points of distribution to 16’525. The Company expects franchisees to open more than 600 net new restaurants for the year on a global basis.
• Revenues grew by more than nine percent to 163,5 million USD for the third quarter of 2011 compared to the same period in 2010, primarily as a result of increased franchisee fees and royalty income.
• Operating income of 54,1 million USD for the third quarter remained relatively flat with the prior year, decreasing 0,8 percent, primarily due to one-time expenses of 14,7 million USD incurred in connection with the Company´s initial public offering (IPO).
• Adjusted operating income was 75,9 million USD, a 21,3 percent increase over the same time last year. Adjusted operating income margin was 46,4 percent, representing a 450 basis point improvement over the same period last year, as a result of strong revenues and flat expenses.
• Net income was 7,4 million USD, a decrease of 60,7 percent compared to the third quarter of 2010, due to one-time expenses incurred in connection with the Company´s IPO and related retirement of 375 million USD of senior notes.
• Adjusted net income for the quarter grew to 31,3 million USD, a 32,5 percent increase compared to the third quarter of 2010, as a result of an increase in adjusted operating income and lower interest expense.
• Diluted adjusted earnings per pro forma common share was 0,28 USD, an increase of 17 percent over the third quarter of 2010.

«Our performance for the quarter gives us confidence in our ability to achieve our longer term growth targets», said Neil Moses, Dunkin´ Brands Group Inc. Chief Financial Officer. «We believe these results demonstrate the opportunity that lies ahead for us and underscore the power of our nearly all-franchised business model with its high operating margins, low capital expenditure requirements and strong free cash flow».

About: With more than 16’500 points of distribution in 56 countries worldwide, Dunkin´ Brands Group Inc. is one of the world´s leading franchisors of quick service restaurants (QSR) serving hot and cold coffee and baked goods, as well as hard-serve ice cream. 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 USD. Dunkin´ Brands Group Inc. is headquartered in Canton, Massachusetts, USA.