Krispy Kreme Reports Strong Fourth Quarter 2022 Results
Krispy Kreme (NASDAQ: DNUT) reported a 9.2% increase in fourth-quarter net revenue to $404.6 million, driven by a 12.5% organic growth across all segments. Despite foreign currency exchange headwinds impacting results, sales per hub rose 15% in the U.S. and Canada. The company experienced a GAAP net loss of $1 million, primarily due to $12.4 million in non-cash expenses related to optimization efforts. Adjusted EBITDA grew 17% to $55.9 million, and free cash flow was $32.4 million. For 2023, Krispy Kreme anticipates net revenue of $1.65 to $1.68 billion, projecting organic revenue growth of 9% to 11% and adjusted EBITDA of $205 to $215 million.
- Fourth quarter net revenue increased 9.2% to $404.6 million.
- Organic revenue growth of 12.5% indicates strong performance in all segments.
- Adjusted EBITDA grew 17% to $55.9 million, with a 90 basis point margin expansion.
- Free cash flow for the fourth quarter reached $32.4 million.
- Guidance for 2023 includes net revenue of $1.65 to $1.68 billion, signaling continued growth.
- GAAP net loss of $1 million in the fourth quarter compared to a profit of $4.3 million a year prior.
- Optimization efforts led to significant expenses of $12.4 million, mostly non-cash.
Fourth quarter net revenue grew
Points of Access increased to 11,837, up
Introduces robust 2023 guidance
Our efforts to improve performance through our network optimization and closing unprofitable shops led to expenses of
Adjusted EBITDA grew
Commenting on the performance, CEO
Mike continued, “Looking to 2023, we are well-positioned to deliver another year of terrific growth with a great start led by premium offerings for celebrations. Our performance this year will be led by continued expansion of our capital efficient omni-channel model as we aim to grow our fresh points of access by
Financial Highlights
$ in millions, except per share data |
Q4 2022 |
vs Q4 2021 |
2022 |
vs 2021 |
Net Revenue |
|
|
|
|
Organic Revenue (1) |
|
|
|
|
GAAP Net Loss |
|
nm |
|
|
Adjusted Net Income, Diluted (1) |
|
|
|
(10.6)% |
Operating Income |
|
(68.4)% |
|
(29.5)% |
Operating Income Margin |
|
-310 bps |
|
-110 bps |
Adjusted EBITDA (1) |
|
|
|
|
Adjusted EBITDA Margin (1) |
|
+90 bps |
|
-110 bps |
GAAP Diluted Loss Per Share |
|
|
|
|
Adjusted Diluted EPS (1) |
|
|
|
|
Notes:
|
Key Operating Metrics
$ in millions, except access points |
Q4 2022 |
vs Q4 2021 |
Global Points of Access |
11,837 |
|
Sales per Hub ( |
|
|
Sales per Hub (International) TTM |
|
|
Ecommerce as a Percent of Retail Sales |
|
+260 bps |
Fourth Quarter and Full Year 2022 Consolidated Results
Net revenue grew
For the full year 2022, net revenue grew
GAAP Net Loss for the quarter was
Adjusted EBITDA in the quarter grew
For the full year 2022, GAAP Net Loss was
Weighted diluted average shares outstanding for the fourth quarter of 2022 were 169.8 million, compared to 169.1 million in the same quarter last year. Weighted diluted average shares outstanding for the full year 2022 were 169.5 million, compared to 150.3 million for the full year 2021, primarily as a result of the IPO.
Fourth Quarter and Full Year 2022 Segment Results
International: In the International segment, net revenue in the fourth quarter grew
International Adjusted EBITDA in the fourth quarter was approximately flat over the prior year at
Market Development: In the Market Development segment net revenue in the fourth quarter grew
Market Development Adjusted EBITDA in the fourth quarter increased
Balance Sheet and Capital Expenditures
During the fourth quarter 2022, the company invested
As of
2023 Financial Outlook
-
Net Revenue of
to$1.65 billion , +$1.68 billion 8% to +10% vs 2022 (+9% to +11% in constant currency) -
Organic Revenue growth of
9% to11% -
Adjusted EBITDA of
to$205 million , +$215 million 8% to +13% vs 2022 (+10% to +14% in constant currency) -
Adjusted Net Income, diluted, of
to$52 million , +$58 million 5% to +17% vs 2022 (+9% to +21% in constant currency) -
Adjusted Diluted EPS of
to$0.31 , +$0.34 7% to +17% vs 2022 (+10% to +21% in constant currency) -
Income Tax rate between
24.5% to26.0% -
Capital Expenditures between
to$105 million , or approximately$115 million 6.6% of revenue -
Interest Expense, net between
to$39 million $43 million
The above guidance assumes a negative
Definitions
The following definitions apply to terms used throughout this press release:
-
Global Points of Access: Reflects all locations at which fresh doughnuts or cookies can be purchased. We define global points of access to include all
Hot Light Theater Shops ,Fresh Shops , Carts and Food Trucks, DFD Doors andCookie Shops , at both Company-owned and franchise locations as of the end of the respective reporting period. We monitor global points of access as a metric that informs the growth of our omni-channel presence over time and believe this metric is useful to investors to understand our footprint in each of our segments. -
Hubs: Reflects locations where fresh doughnuts are produced and processed for sale at any point of access. We define Hubs to include self-sustaining
Hot Light Theater Shops and Doughnut Factories, at both Company-owned and franchise locations as of the end of the respective reporting period. - Sales Per Hub: Sales per Hub equals Fresh Revenues from Hubs with Spokes, divided by the average number of Hubs with Spokes at the end of the five most recent quarters.
-
Fresh Revenues from Hubs with Spokes: Fresh Revenues include product sales generated from our Doughnut Shop business (including ecommerce and delivery), as well as DFD sales, but excluding sales from our legacy wholesale business and our Branded Sweet
Treat Line . It also excludes all Insomnia Cookies revenues as the measure is focused on theKrispy Kreme business. Fresh Revenues from Hubs with Spokes equals the Fresh Revenues derived from those Hubs currently producing product for other shops, Carts and Food Trucks, and/or DFD doors, but excluding Fresh Revenues derived from those Hubs not currently producing product for other shops, Carts and Food Trucks, and/or DFD doors. - Free Cash Flow: Defined as cash provided by operating activities less purchases of property and equipment.
Conference Call
About
Headquartered in
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. The words “believe,” “may,” “could,” “will,” “should,” “anticipate,” “estimate,” “expect,” “outlook,” “guidance,” or similar words, or the negative of these words, identify forward-looking statements. Such forward-looking statements are based on certain assumptions and estimates that we consider reasonable but are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial conditions, business, prospects, growth strategy and liquidity. Accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. Our actual results could differ materially from the forward-looking statements included herein. Factors that could cause actual results to differ from those expressed in forward-looking statements include, without limitation, the risks and uncertainties described under the headings “Special Note Regarding Forward-Looking Statements” and “Risk Factors” in the Prospectus, dated
Non-GAAP Measures
This press release includes certain non-GAAP financial measures including organic revenue growth, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Fresh Revenue from Hubs with Spokes and Sales per Hub, which differ from results using
To the extent that the Company provides guidance, it does so only on a non-GAAP basis. The Company does not provide reconciliations of such forward-looking non-GAAP measures to GAAP due to the inability to predict the amount and timing of impacts outside of the Company’s control on certain items, such as net income and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.
Consolidated Statements of Operations (in thousands, except per share amounts) |
|||||||||||
|
Fiscal Years Ended |
||||||||||
|
|
|
|
|
|
||||||
|
(unaudited) |
|
|
|
|
||||||
Net revenues |
|
|
|
|
|
||||||
Product sales |
$ |
1,497,882 |
|
|
$ |
1,353,466 |
|
|
$ |
1,085,110 |
|
Royalties and other revenues |
|
32,016 |
|
|
|
30,925 |
|
|
|
36,926 |
|
Total net revenues |
|
1,529,898 |
|
|
|
1,384,391 |
|
|
|
1,122,036 |
|
Product and distribution costs |
|
406,227 |
|
|
|
354,093 |
|
|
|
310,909 |
|
Operating expenses |
|
704,287 |
|
|
|
630,239 |
|
|
|
488,061 |
|
Selling, general and administrative expense |
|
223,198 |
|
|
|
222,394 |
|
|
|
182,317 |
|
Marketing expenses |
|
42,566 |
|
|
|
39,489 |
|
|
|
34,000 |
|
Pre-opening costs |
|
4,227 |
|
|
|
5,568 |
|
|
|
11,583 |
|
Other expenses/(income), net |
|
10,157 |
|
|
|
(10,102 |
) |
|
|
10,488 |
|
Depreciation and amortization expense |
|
110,261 |
|
|
|
101,608 |
|
|
|
80,398 |
|
Operating income |
|
28,975 |
|
|
|
41,102 |
|
|
|
4,280 |
|
Interest expense, net |
|
34,102 |
|
|
|
32,622 |
|
|
|
34,741 |
|
Interest expense – related party |
|
— |
|
|
|
10,387 |
|
|
|
22,468 |
|
Other non-operating expense/(income), net |
|
3,036 |
|
|
|
2,191 |
|
|
|
(1,101 |
) |
Loss before income taxes |
|
(8,163 |
) |
|
|
(4,098 |
) |
|
|
(51,828 |
) |
Income tax expense |
|
612 |
|
|
|
10,745 |
|
|
|
9,112 |
|
Net loss |
|
(8,775 |
) |
|
|
(14,843 |
) |
|
|
(60,940 |
) |
Net income attributable to noncontrolling interest |
|
6,847 |
|
|
|
9,663 |
|
|
|
3,361 |
|
Net loss attributable to |
$ |
(15,622 |
) |
|
$ |
(24,506 |
) |
|
$ |
(64,301 |
) |
Net loss per share: |
|
|
|
|
|
||||||
Common stock - Basic |
$ |
(0.10 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.52 |
) |
Common stock - Diluted |
$ |
(0.10 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.52 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
||||||
Basic |
|
167,471 |
|
|
|
147,655 |
|
|
|
124,987 |
|
Diluted |
|
167,471 |
|
|
|
147,655 |
|
|
|
124,987 |
|
|
Quarter Ended |
||||||
|
|
|
|
||||
Net revenue |
|
|
|
||||
Product sales |
$ |
395,837 |
|
|
$ |
364,334 |
|
Royalties and other revenues |
|
8,762 |
|
|
|
6,263 |
|
Total net revenues |
|
404,599 |
|
|
|
370,597 |
|
Product and distribution costs |
|
106,688 |
|
|
|
96,927 |
|
Operating expenses |
|
184,027 |
|
|
|
167,506 |
|
Selling, general and administrative expense |
|
62,932 |
|
|
|
58,977 |
|
Marketing expenses |
|
10,197 |
|
|
|
7,868 |
|
Pre-opening costs |
|
713 |
|
|
|
1,233 |
|
Other expenses/(income), net |
|
8,357 |
|
|
|
(5,737 |
) |
Depreciation and amortization expense |
|
26,479 |
|
|
|
27,350 |
|
Operating income |
|
5,206 |
|
|
|
16,473 |
|
Interest expense, net |
|
10,294 |
|
|
|
7,394 |
|
Other non-operating expense, net |
|
953 |
|
|
|
2,317 |
|
(Loss)/income before income taxes |
|
(6,041 |
) |
|
|
6,762 |
|
Income tax (benefit)/expense |
|
(5,056 |
) |
|
|
2,479 |
|
Net (loss)/income |
|
(985 |
) |
|
|
4,283 |
|
Net income attributable to noncontrolling interest |
|
1,734 |
|
|
|
2,927 |
|
Net (loss)/income attributable to |
$ |
(2,719 |
) |
|
$ |
1,356 |
|
Net (loss)/income per share: |
|
|
|
||||
Common stock - Basic |
$ |
(0.02 |
) |
|
$ |
0.01 |
|
Common stock - Diluted |
$ |
(0.02 |
) |
|
$ |
0.01 |
|
Weighted average shares outstanding: |
|
|
|
||||
Basic |
|
167,826 |
|
|
|
167,246 |
|
Diluted |
|
167,826 |
|
|
|
169,130 |
|
Consolidated Balance Sheets (in thousands, except per share data) |
|||||||
|
As of |
||||||
|
|
|
|
||||
|
(unaudited) |
|
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
35,371 |
|
|
$ |
38,562 |
|
Restricted cash |
|
359 |
|
|
|
630 |
|
Accounts receivable, net |
|
51,089 |
|
|
|
47,491 |
|
Inventories |
|
46,239 |
|
|
|
34,851 |
|
Taxes receivable |
|
18,263 |
|
|
|
14,662 |
|
Prepaid expense and other current assets |
|
26,953 |
|
|
|
20,701 |
|
Total current assets |
|
178,274 |
|
|
|
156,897 |
|
Property and equipment, net |
|
472,358 |
|
|
|
438,918 |
|
|
|
1,087,908 |
|
|
|
1,105,322 |
|
Other intangible assets, net |
|
966,088 |
|
|
|
992,520 |
|
Operating lease right of use asset, net |
|
417,381 |
|
|
|
435,168 |
|
Other assets |
|
26,528 |
|
|
|
16,429 |
|
Total assets |
$ |
3,148,537 |
|
|
$ |
3,145,254 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Current portion of long-term debt |
$ |
40,034 |
|
|
$ |
36,583 |
|
Current operating lease liabilities |
|
43,160 |
|
|
|
50,359 |
|
Accounts payable |
|
225,276 |
|
|
|
182,104 |
|
Accrued liabilities |
|
104,424 |
|
|
|
140,750 |
|
Structured payables |
|
103,575 |
|
|
|
116,361 |
|
Total current liabilities |
|
516,469 |
|
|
|
526,157 |
|
Long-term debt, less current portion |
|
739,052 |
|
|
|
680,307 |
|
Noncurrent operating lease liabilities |
|
412,759 |
|
|
|
415,208 |
|
Deferred income taxes, net |
|
143,124 |
|
|
|
145,418 |
|
Other long-term obligations and deferred credits |
|
38,258 |
|
|
|
42,509 |
|
Total liabilities |
|
1,849,662 |
|
|
|
1,809,599 |
|
Commitments and contingencies |
|
|
|
||||
Shareholders’ equity: |
|
|
|
||||
Common stock, |
|
1,681 |
|
|
|
1,673 |
|
Additional paid-in capital |
|
1,426,105 |
|
|
|
1,415,185 |
|
Shareholder note receivable |
|
(4,813 |
) |
|
|
(4,382 |
) |
Accumulated other comprehensive loss, net of income tax |
|
(9,151 |
) |
|
|
(2,478 |
) |
Retained deficit |
|
(217,490 |
) |
|
|
(178,409 |
) |
Total shareholders’ equity attributable to |
|
1,196,332 |
|
|
|
1,231,589 |
|
Noncontrolling interest |
|
102,543 |
|
|
|
104,066 |
|
Total shareholders’ equity |
|
1,298,875 |
|
|
|
1,335,655 |
|
Total liabilities and shareholders’ equity |
$ |
3,148,537 |
|
|
$ |
3,145,254 |
|
Consolidated Statements of Cash Flows (in thousands) |
|||||||||||
|
Fiscal Years Ended |
||||||||||
|
|
|
|
|
|
||||||
|
(unaudited) |
|
|
|
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
||||||
Net loss |
$ |
(8,775 |
) |
|
$ |
(14,843 |
) |
|
$ |
(60,940 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
||||||
Depreciation and amortization expense |
|
110,261 |
|
|
|
101,608 |
|
|
|
80,398 |
|
Deferred income taxes |
|
(14,237 |
) |
|
|
(3,496 |
) |
|
|
(36 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
1,700 |
|
|
|
— |
|
Impairment and lease termination charges |
|
18,297 |
|
|
|
3,507 |
|
|
|
4,701 |
|
Loss on disposal of property and equipment |
|
393 |
|
|
|
458 |
|
|
|
2,771 |
|
Gain on sale-leaseback |
|
(6,549 |
) |
|
|
(8,673 |
) |
|
|
— |
|
Share-based compensation |
|
18,170 |
|
|
|
22,923 |
|
|
|
11,601 |
|
Change in accounts and notes receivable allowances |
|
570 |
|
|
|
275 |
|
|
|
1,047 |
|
Inventory write-off |
|
868 |
|
|
|
4,071 |
|
|
|
726 |
|
Gain on contingent consideration related to a business combination |
|
— |
|
|
|
— |
|
|
|
(1,521 |
) |
Settlement of interest rate swap derivatives |
|
8,476 |
|
|
|
— |
|
|
|
— |
|
Other |
|
2,232 |
|
|
|
594 |
|
|
|
410 |
|
Change in operating assets and liabilities, excluding business acquisitions and foreign currency translation adjustments: |
|
|
|
|
|
||||||
Accounts, notes, and taxes receivable |
|
(9,485 |
) |
|
|
(3,817 |
) |
|
|
(11,942 |
) |
Inventories |
|
(12,515 |
) |
|
|
(301 |
) |
|
|
(15,353 |
) |
Other current and noncurrent assets |
|
(24,057 |
) |
|
|
(316 |
) |
|
|
434 |
|
Operating lease assets and liabilities |
|
(793 |
) |
|
|
7,787 |
|
|
|
(1,575 |
) |
Accounts payable and accrued liabilities |
|
40,622 |
|
|
|
30,240 |
|
|
|
12,906 |
|
Other long-term obligations and deferred credits |
|
16,340 |
|
|
|
(493 |
) |
|
|
5,048 |
|
Net cash provided by operating activities |
|
139,818 |
|
|
|
141,224 |
|
|
|
28,675 |
|
CASH FLOWS USED FOR INVESTING ACTIVITIES: |
|
|
|
|
|
||||||
Purchase of property and equipment |
|
(111,717 |
) |
|
|
(119,497 |
) |
|
|
(97,826 |
) |
Proceeds from disposals of assets |
|
1,077 |
|
|
|
218 |
|
|
|
2,837 |
|
Proceeds from sale-leaseback |
|
8,401 |
|
|
|
11,091 |
|
|
|
— |
|
Acquisition of shops and franchise rights from franchisees, net of cash acquired |
|
(17,330 |
) |
|
|
(46,330 |
) |
|
|
(74,890 |
) |
Purchase of equity method investment |
|
(989 |
) |
|
|
— |
|
|
|
— |
|
Principal payments received from loans to franchisees |
|
59 |
|
|
|
92 |
|
|
|
684 |
|
Disbursement for loan receivable |
|
(975 |
) |
|
|
— |
|
|
|
— |
|
Purchases of held-to-maturity debt securities |
|
— |
|
|
|
— |
|
|
|
(57 |
) |
Maturities of held-to-maturity debt securities |
|
— |
|
|
|
1,019 |
|
|
|
1,124 |
|
Net cash used for investing activities |
|
(121,474 |
) |
|
|
(153,407 |
) |
|
|
(168,128 |
) |
CASH FLOWS (USED FOR)/FROM FINANCING ACTIVITIES: |
|
|
|
|
|
||||||
Proceeds from the issuance of debt |
|
149,000 |
|
|
|
695,000 |
|
|
|
288,097 |
|
Repayment of long-term debt and lease obligations |
|
(101,181 |
) |
|
|
(1,147,049 |
) |
|
|
(225,541 |
) |
Payment of financing costs |
|
— |
|
|
|
(1,700 |
) |
|
|
— |
|
Proceeds from structured payables |
|
282,023 |
|
|
|
266,851 |
|
|
|
292,756 |
|
Payments on structured payables |
|
(294,457 |
) |
|
|
(287,625 |
) |
|
|
(225,320 |
) |
Payment of contingent consideration related to a business combination |
|
(900 |
) |
|
|
— |
|
|
|
(506 |
) |
Capital contribution by shareholders, net of loans issued |
|
(288 |
) |
|
|
120,532 |
|
|
|
— |
|
Proceeds from IPO, net of underwriting discounts (excluding unpaid issuance costs) |
|
— |
|
|
|
527,329 |
|
|
|
— |
|
Payments of issuance costs in connection with IPO |
|
(12,458 |
) |
|
|
— |
|
|
|
— |
|
Proceeds from sale of noncontrolling interest in subsidiary |
|
593 |
|
|
|
53,404 |
|
|
|
21,386 |
|
Distribution to shareholders |
|
(23,430 |
) |
|
|
(48,187 |
) |
|
|
(42 |
) |
Payments for repurchase and retirement of common stock |
|
(4,019 |
) |
|
|
(139,103 |
) |
|
|
— |
|
Distribution to noncontrolling interest |
|
(11,721 |
) |
|
|
(23,356 |
) |
|
|
(11,389 |
) |
Net cash (used for)/provided by financing activities |
|
(16,838 |
) |
|
|
16,096 |
|
|
|
139,441 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(4,968 |
) |
|
|
(2,204 |
) |
|
|
2,045 |
|
Net (decrease)/increase in cash, cash equivalents and restricted cash |
|
(3,462 |
) |
|
|
1,709 |
|
|
|
2,033 |
|
Cash, cash equivalents and restricted cash at beginning of the fiscal year |
|
39,192 |
|
|
|
37,483 |
|
|
|
35,450 |
|
Cash, cash equivalents and restricted cash at end of the fiscal year |
$ |
35,730 |
|
|
$ |
39,192 |
|
|
$ |
37,483 |
|
|
|
|
|
|
|
||||||
Net cash provided by operating activities |
$ |
139,818 |
|
|
$ |
141,224 |
|
|
$ |
28,675 |
|
Less: Purchase of property and equipment |
|
(111,717 |
) |
|
|
(119,497 |
) |
|
|
(97,826 |
) |
Free cash flow |
$ |
28,101 |
|
|
$ |
21,727 |
|
|
$ |
(69,151 |
) |
Reconciliation of Non-GAAP Financial Measures (unaudited and in thousands, except per share amounts) |
|||||||||||||||
|
Quarter Ended |
|
Fiscal Years Ended |
||||||||||||
(in thousands) |
|
|
|
|
|
|
|
||||||||
Net (loss)/income |
$ |
(985 |
) |
|
$ |
4,283 |
|
|
$ |
(8,775 |
) |
|
$ |
(14,843 |
) |
Interest expense, net |
|
10,294 |
|
|
|
7,394 |
|
|
|
34,102 |
|
|
|
32,622 |
|
Interest expense — related party (1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,387 |
|
Income tax (benefit)/expense |
|
(5,056 |
) |
|
|
2,479 |
|
|
|
612 |
|
|
|
10,745 |
|
Depreciation and amortization expense |
|
26,479 |
|
|
|
27,350 |
|
|
|
110,261 |
|
|
|
101,608 |
|
Share-based compensation |
|
4,852 |
|
|
|
5,950 |
|
|
|
18,170 |
|
|
|
22,923 |
|
Employer payroll taxes related to share-based compensation |
|
220 |
|
|
|
32 |
|
|
|
312 |
|
|
|
2,044 |
|
Other non-operating expense, net (2) |
|
953 |
|
|
|
2,317 |
|
|
|
3,036 |
|
|
|
2,191 |
|
BST strategic initiatives (3) |
|
2,635 |
|
|
|
— |
|
|
|
2,841 |
|
|
|
— |
|
Acquisition and integration expenses (4) |
|
944 |
|
|
|
1,592 |
|
|
|
2,333 |
|
|
|
5,255 |
|
New market penetration expenses (5) |
|
828 |
|
|
|
— |
|
|
|
1,511 |
|
|
|
— |
|
Shop closure expenses (6) |
|
11,606 |
|
|
|
2,766 |
|
|
|
19,465 |
|
|
|
2,766 |
|
Restructuring and severance expenses (7) |
|
4,321 |
|
|
|
340 |
|
|
|
7,125 |
|
|
|
1,733 |
|
IPO-related expenses (8) |
|
— |
|
|
|
313 |
|
|
|
— |
|
|
|
14,534 |
|
Gain on sale-leaseback |
|
(2,238 |
) |
|
|
(8,673 |
) |
|
|
(6,549 |
) |
|
|
(8,673 |
) |
Other (9) |
|
1,066 |
|
|
|
1,589 |
|
|
|
6,285 |
|
|
|
4,653 |
|
Adjusted EBITDA |
$ |
55,919 |
|
|
$ |
47,732 |
|
|
$ |
190,729 |
|
|
$ |
187,945 |
|
|
Quarter Ended |
|
Fiscal Years Ended |
||||||||||||
(in thousands) |
|
|
|
|
|
|
|
||||||||
Segment Adjusted EBITDA: |
|
|
|
|
|
|
|
||||||||
|
$ |
36,962 |
|
|
$ |
31,811 |
|
|
$ |
118,483 |
|
|
$ |
107,571 |
|
International |
|
20,479 |
|
|
|
20,746 |
|
|
|
75,512 |
|
|
|
81,422 |
|
Market Development |
|
12,286 |
|
|
|
11,042 |
|
|
|
44,421 |
|
|
|
40,824 |
|
Corporate |
|
(13,808 |
) |
|
|
(15,867 |
) |
|
|
(47,687 |
) |
|
|
(41,872 |
) |
Total Adjusted EBITDA |
$ |
55,919 |
|
|
$ |
47,732 |
|
|
$ |
190,729 |
|
|
$ |
187,945 |
|
|
Quarter Ended |
|
Fiscal Years Ended |
||||||||||||
(in thousands) |
|
|
|
|
|
|
|
||||||||
Net (loss)/income |
$ |
(985 |
) |
|
$ |
4,283 |
|
|
$ |
(8,775 |
) |
|
$ |
(14,843 |
) |
Interest expense — related party (1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,387 |
|
Share-based compensation |
|
4,852 |
|
|
|
5,950 |
|
|
|
18,170 |
|
|
|
22,923 |
|
Employer payroll taxes related to share-based compensation |
|
220 |
|
|
|
32 |
|
|
|
312 |
|
|
|
2,044 |
|
Other non-operating expense, net (2) |
|
953 |
|
|
|
2,317 |
|
|
|
3,036 |
|
|
|
2,191 |
|
BST strategic initiatives (3) |
|
2,635 |
|
|
|
— |
|
|
|
2,841 |
|
|
|
— |
|
Acquisition and integration expenses (4) |
|
944 |
|
|
|
1,592 |
|
|
|
2,333 |
|
|
|
5,255 |
|
New market penetration expenses (5) |
|
828 |
|
|
|
— |
|
|
|
1,511 |
|
|
|
— |
|
Shop closure expenses (6) |
|
11,606 |
|
|
|
2,766 |
|
|
|
19,715 |
|
|
|
2,766 |
|
Restructuring and severance expenses (7) |
|
4,321 |
|
|
|
340 |
|
|
|
7,125 |
|
|
|
1,733 |
|
IPO-related expenses (8) |
|
— |
|
|
|
313 |
|
|
|
— |
|
|
|
14,534 |
|
Gain on sale-leaseback |
|
(2,238 |
) |
|
|
(8,673 |
) |
|
|
(6,549 |
) |
|
|
(8,673 |
) |
Other (9) |
|
1,066 |
|
|
|
1,589 |
|
|
|
6,285 |
|
|
|
4,653 |
|
Amortization of acquisition related intangibles (10) |
|
7,149 |
|
|
|
7,230 |
|
|
|
28,456 |
|
|
|
29,803 |
|
KKI Term Loan Facility interest and debt issuance costs (11) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,448 |
|
Tax impact of adjustments (12) |
|
(8,720 |
) |
|
|
(1,830 |
) |
|
|
(14,609 |
) |
|
|
(12,434 |
) |
Tax specific adjustments (13) |
|
(2,248 |
) |
|
|
103 |
|
|
|
(2,876 |
) |
|
|
3,936 |
|
Net income attributable to noncontrolling interest |
|
(1,734 |
) |
|
|
(2,927 |
) |
|
|
(6,847 |
) |
|
|
(9,663 |
) |
Adjustment to adjusted net income attributable to common shareholders |
|
— |
|
|
|
317 |
|
|
|
(374 |
) |
|
|
(1,468 |
) |
Adjusted net income attributable to common shareholders - Basic |
$ |
18,649 |
|
|
$ |
13,402 |
|
|
$ |
49,754 |
|
|
$ |
55,592 |
|
Additional income attributed to noncontrolling interest due to subsidiary potential common shares |
|
(37 |
) |
|
|
(5 |
) |
|
|
(143 |
) |
|
|
(122 |
) |
Adjusted net income attributable to common shareholders - Diluted |
$ |
18,612 |
|
|
$ |
13,397 |
|
|
$ |
49,611 |
|
|
$ |
55,470 |
|
Basic weighted average common shares outstanding |
|
167,826 |
|
|
|
167,246 |
|
|
|
167,471 |
|
|
|
147,655 |
|
Dilutive effect of outstanding common stock options and RSUs |
|
2,000 |
|
|
|
1,884 |
|
|
|
2,005 |
|
|
|
2,671 |
|
Diluted weighted average common shares outstanding |
|
169,826 |
|
|
|
169,130 |
|
|
|
169,476 |
|
|
|
150,326 |
|
Adjusted net income per share attributable to common shareholders: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.11 |
|
|
$ |
0.08 |
|
|
$ |
0.30 |
|
|
$ |
0.38 |
|
Diluted |
$ |
0.11 |
|
|
$ |
0.08 |
|
|
$ |
0.29 |
|
|
$ |
0.37 |
|
(1) |
Consists of interest expense related to the Related Party Notes which were paid off in full during the second quarter of fiscal 2021. | |
(2) |
Primarily foreign translation gains and losses in each period. | |
(3) |
Fiscal 2022 consists mainly of equipment disposals, equipment relocation and installation, consulting and advisory fees, and other costs associated with our shift of Branded Sweet |
|
(4) |
Consists of acquisition and integration-related costs in connection with the Company’s business and franchise acquisitions, including legal, due diligence, consulting and advisory fees incurred in connection with acquisition-related activities for the applicable period. | |
(5) |
Consists of start-up costs associated with entry into new countries for which the Company’s brands have not previously operated, including the Insomnia Cookies brand entering |
|
(6) |
Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment. | |
(7) |
Fiscal 2022 consists of costs associated with restructuring of the global and |
|
(8) |
Includes consulting and advisory fees incurred in connection with preparation for and execution of the Company’s IPO. | |
(9) |
Fiscal 2022 and fiscal 2021 consist primarily of legal expenses incurred outside the ordinary course of business, including the net settlement of approximately |
|
(10) |
Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the Consolidated Statements of Operations. | |
(11) |
Includes interest expense and debt issuance costs incurred and recognized as expenses in connection with the extinguishment of the KKI Term Loan Facility within four business days of receipt of the net proceeds from the IPO. | |
(12) |
Tax impact of adjustments calculated applying the applicable statutory rates. The Company’s adjusted effective tax rate is |
|
(13) |
Fiscal 2022 consists of the recognition of previously unrecognized tax benefits unrelated to ongoing operations, as well as benefits attributable to multiple tax years due to lapse of the statute of limitations. Fiscal 2022 also include the effect of discrete adjustments to the Company’s deferred tax liabilities that are unrelated to the Company’s ongoing operations. Fiscal 2021 consists primarily of the effect of tax law changes on existing temporary differences. |
Segment Reporting (unaudited and in thousands, except percentages or otherwise stated) |
||||||||
|
Quarter Ended |
|||||||
|
|
|
|
|
|
|||
Net revenues: |
|
|
|
|
|
|||
|
$ |
276,929 |
|
$ |
249,218 |
|
$ |
225,437 |
International |
|
92,928 |
|
|
89,990 |
|
|
71,610 |
Market Development |
|
34,742 |
|
|
31,389 |
|
|
28,568 |
Total net revenues |
$ |
404,599 |
|
$ |
370,597 |
|
$ |
325,615 |
Q4 2022 Organic Revenue |
|
|
International |
|
Market Development |
|
|
||||||||
Total net revenues in fourth quarter of fiscal 2022 (13 weeks) |
$ |
276,929 |
|
|
$ |
92,928 |
|
|
$ |
34,742 |
|
|
$ |
404,599 |
|
Total net revenues in fourth quarter of fiscal 2021 (13 weeks) |
|
249,218 |
|
|
|
89,990 |
|
|
|
31,389 |
|
|
|
370,597 |
|
Total Net Revenue Growth |
|
27,711 |
|
|
|
2,938 |
|
|
|
3,353 |
|
|
|
34,002 |
|
Total Net Revenue Growth % |
|
11.1 |
% |
|
|
3.3 |
% |
|
|
10.7 |
% |
|
|
9.2 |
% |
Less: Impact of shop optimization program closures |
|
(1,374 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,374 |
) |
Adjusted net revenues in fourth quarter of fiscal 2021 |
|
247,844 |
|
|
|
89,990 |
|
|
|
31,389 |
|
|
|
369,223 |
|
Adjusted Net Revenue Growth |
|
29,085 |
|
|
|
2,938 |
|
|
|
3,353 |
|
|
|
35,376 |
|
Impact of acquisitions |
|
(2,652 |
) |
|
|
— |
|
|
|
769 |
|
|
|
(1,883 |
) |
Impact of foreign currency translation |
|
2,299 |
|
|
|
7,211 |
|
|
|
3,221 |
|
|
|
12,731 |
|
Organic Revenue Growth |
$ |
28,732 |
|
|
$ |
10,149 |
|
|
$ |
7,343 |
|
|
$ |
46,224 |
|
Organic Revenue Growth % |
|
11.6 |
% |
|
|
11.3 |
% |
|
|
23.4 |
% |
|
|
12.5 |
% |
Q4 2021 Organic Revenue |
|
|
International |
|
Market Development |
|
|
||||||||
Total net revenues in fourth quarter of fiscal 2021 (13 weeks) |
$ |
249,218 |
|
|
$ |
89,990 |
|
|
$ |
31,389 |
|
|
$ |
370,597 |
|
Total net revenues in fourth quarter of fiscal 2020 (14 weeks) |
|
225,437 |
|
|
|
71,610 |
|
|
|
28,568 |
|
|
|
325,615 |
|
Total Net Revenue Growth |
|
23,781 |
|
|
|
18,380 |
|
|
|
2,821 |
|
|
|
44,982 |
|
Total Net Revenue Growth % |
|
10.5 |
% |
|
|
25.7 |
% |
|
|
9.9 |
% |
|
|
13.8 |
% |
Less: Impact of 53rd week |
|
(15,615 |
) |
|
|
(3,287 |
) |
|
|
(1,603 |
) |
|
|
(20,505 |
) |
Adjusted net revenues in fourth quarter of fiscal 2020 |
|
209,822 |
|
|
|
68,323 |
|
|
|
26,965 |
|
|
|
305,110 |
|
Adjusted Net Revenue Growth |
|
39,396 |
|
|
|
21,667 |
|
|
|
4,424 |
|
|
|
65,487 |
|
Impact of acquisitions |
|
(20,315 |
) |
|
|
— |
|
|
|
(2,591 |
) |
|
|
(22,906 |
) |
Impact of foreign currency translation |
|
— |
|
|
|
(624 |
) |
|
|
543 |
|
|
|
(81 |
) |
Organic Revenue Growth |
$ |
19,081 |
|
|
$ |
21,043 |
|
|
$ |
2,376 |
|
|
$ |
42,500 |
|
Organic Revenue Growth % |
|
9.1 |
% |
|
|
30.8 |
% |
|
|
8.8 |
% |
|
|
13.9 |
% |
|
Fiscal Years Ended |
|||||||
|
|
|
|
|
|
|||
Net revenues: |
|
|
|
|||||
|
$ |
1,033,125 |
|
$ |
928,413 |
|
$ |
782,717 |
International |
|
365,916 |
|
|
332,995 |
|
|
230,185 |
Market Development |
|
130,857 |
|
|
122,983 |
|
|
109,134 |
Total net revenues |
$ |
1,529,898 |
|
$ |
1,384,391 |
|
$ |
1,122,036 |
Full Year 2022 Organic Revenue |
|
|
International |
|
Market Development |
|
|
||||||||
Total net revenues in fiscal 2022 (52 weeks) |
$ |
1,033,125 |
|
|
$ |
365,916 |
|
|
$ |
130,857 |
|
|
$ |
1,529,898 |
|
Total net revenues in fiscal 2021 (52 weeks) |
|
928,413 |
|
|
|
332,995 |
|
|
|
122,983 |
|
|
|
1,384,391 |
|
Total Net Revenue Growth |
|
104,712 |
|
|
|
32,921 |
|
|
|
7,874 |
|
|
|
145,507 |
|
Total Net Revenue Growth % |
|
11.3 |
% |
|
|
9.9 |
% |
|
|
6.4 |
% |
|
|
10.5 |
% |
Less: Impact of shop optimization program closures |
|
(1,374 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,374 |
) |
Adjusted net revenues in fiscal 2021 |
|
927,039 |
|
|
|
332,995 |
|
|
|
122,983 |
|
|
|
1,383,017 |
|
Adjusted Net Revenue Growth |
|
106,086 |
|
|
|
32,921 |
|
|
|
7,874 |
|
|
|
146,881 |
|
Impact of acquisitions |
|
(24,391 |
) |
|
|
— |
|
|
|
6,899 |
|
|
|
(17,492 |
) |
Impact of foreign currency translation |
|
2,299 |
|
|
|
26,052 |
|
|
|
8,991 |
|
|
|
37,342 |
|
Organic Revenue Growth |
$ |
83,994 |
|
|
$ |
58,973 |
|
|
$ |
23,764 |
|
|
$ |
166,731 |
|
Organic Revenue Growth % |
|
9.1 |
% |
|
|
17.7 |
% |
|
|
19.3 |
% |
|
|
12.1 |
% |
Full Year 2021 Organic Revenue |
|
|
International |
|
Market Development |
|
|
||||||||
Total net revenues in fiscal 2021 (52 weeks) |
$ |
928,413 |
|
|
$ |
332,995 |
|
|
$ |
122,983 |
|
|
$ |
1,384,391 |
|
Total net revenues in fiscal 2020 (53 weeks) |
|
782,717 |
|
|
|
230,185 |
|
|
|
109,134 |
|
|
|
1,122,036 |
|
Total Net Revenue Growth |
$ |
145,696 |
|
|
$ |
102,810 |
|
|
$ |
13,849 |
|
|
$ |
262,355 |
|
Total Net Revenue Growth % |
|
18.6 |
% |
|
|
44.7 |
% |
|
|
12.7 |
% |
|
|
23.4 |
% |
Less: Impact of 53rd week |
|
(15,615 |
) |
|
|
(3,287 |
) |
|
|
(1,603 |
) |
|
|
(20,505 |
) |
Adjusted net revenues in fiscal 2020 |
|
767,102 |
|
|
|
226,898 |
|
|
|
107,531 |
|
|
|
1,101,531 |
|
Adjusted Net Revenue Growth |
|
161,311 |
|
|
|
106,097 |
|
|
|
15,452 |
|
|
|
282,860 |
|
Impact of acquisitions |
|
(119,377 |
) |
|
|
— |
|
|
|
(4,175 |
) |
|
|
(123,552 |
) |
Impact of foreign currency translation |
|
— |
|
|
|
(22,391 |
) |
|
|
543 |
|
|
|
(21,848 |
) |
Organic Revenue Growth |
$ |
41,934 |
|
|
$ |
83,706 |
|
|
$ |
11,820 |
|
|
$ |
137,460 |
|
Organic Revenue Growth % |
|
5.5 |
% |
|
|
36.9 |
% |
|
|
11.0 |
% |
|
|
12.5 |
% |
|
Fiscal Years Ended |
||||||||||
Sales per Hub |
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Revenues |
$ |
1,033,125 |
|
|
$ |
928,413 |
|
|
$ |
782,717 |
|
Non-Fresh Revenues (1) |
|
(38,380 |
) |
|
|
(37,311 |
) |
|
|
(128,619 |
) |
Fresh Revenues from Insomnia Cookies and Hubs without Spokes (2) |
|
(407,558 |
) |
|
|
(415,768 |
) |
|
|
(323,079 |
) |
Sales from Hubs with Spokes |
|
587,187 |
|
|
|
475,334 |
|
|
|
331,019 |
|
Sales per Hub (millions) |
|
4.6 |
|
|
|
4.0 |
|
|
|
3.5 |
|
|
|
|
|
|
|
||||||
International: |
|
|
|
|
|
||||||
Sales from Hubs with Spokes (3) |
$ |
365,916 |
|
|
$ |
332,995 |
|
|
$ |
230,185 |
|
Sales per Hub (millions) |
|
9.8 |
|
|
|
9.1 |
|
|
|
6.4 |
|
(1) |
Includes legacy wholesale business revenues and Branded Sweet |
|
(2) |
Includes Insomnia Cookies revenues and Fresh Revenues generated by Hubs without Spokes. | |
(3) |
Global Points of Access |
|||||
|
Global Points of Access (1) |
||||
|
Fiscal Years Ended |
||||
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
238 |
|
241 |
|
229 |
|
68 |
|
66 |
|
47 |
|
231 |
|
210 |
|
184 |
Carts, Food Trucks, and Other (3) |
— |
|
2 |
|
— |
DFD Doors |
5,741 |
|
5,204 |
|
4,137 |
Total |
6,278 |
|
5,723 |
|
4,597 |
International: |
|
|
|
|
|
|
37 |
|
32 |
|
28 |
|
388 |
|
370 |
|
359 |
Carts, Food Trucks, and Other (3) |
14 |
|
1 |
|
— |
DFD Doors |
3,032 |
|
2,488 |
|
1,986 |
Total |
3,471 |
|
2,891 |
|
2,373 |
Market Development: (4) |
|
|
|
|
|
|
111 |
|
109 |
|
119 |
|
867 |
|
782 |
|
732 |
Carts, Food Trucks, and Other (3) |
27 |
|
31 |
|
30 |
DFD Doors |
1,083 |
|
891 |
|
465 |
Total |
2,088 |
|
1,813 |
|
1,346 |
Total global points of access (as defined) |
11,837 |
|
10,427 |
|
8,316 |
|
386 |
|
382 |
|
376 |
|
1,323 |
|
1,218 |
|
1,138 |
|
231 |
|
210 |
|
184 |
|
1,940 |
|
1,810 |
|
1,698 |
Total Carts, Food Trucks, and Other |
41 |
|
34 |
|
30 |
Total DFD Doors |
9,856 |
|
8,583 |
|
6,588 |
Total global points of access (as defined) |
11,837 |
|
10,427 |
|
8,316 |
(1) |
Excludes Branded Sweet |
|
(2) |
Includes Points of Access that were acquired from franchisees in the |
|
(3) |
Carts and Food Trucks are non-producing, mobile (typically on wheels) facilities without walls or a door where product is received from a Hot Light Theater Shop or |
|
(4) |
Includes locations in |
Global Hubs |
|||||
|
Hubs |
||||
|
Fiscal Years Ended |
||||
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
232 |
|
238 |
|
226 |
Doughnut Factories |
4 |
|
4 |
|
5 |
Total |
236 |
|
242 |
|
231 |
Hubs with Spokes |
137 |
|
126 |
|
113 |
Hubs without Spokes |
99 |
|
116 |
|
118 |
International: |
|
|
|
|
|
|
28 |
|
25 |
|
27 |
Doughnut Factories |
11 |
|
11 |
|
9 |
Total |
39 |
|
36 |
|
36 |
Hubs with Spokes |
39 |
|
36 |
|
36 |
Market Development: |
|
|
|
|
|
|
106 |
|
106 |
|
116 |
Doughnut Factories |
27 |
|
27 |
|
26 |
Total |
133 |
|
133 |
|
142 |
Total Hubs |
408 |
|
411 |
|
409 |
(1) |
Includes only |
Net Debt and Leverage (in thousands, except leverage ratio) |
|||||||
|
As of |
||||||
|
|
|
|
||||
|
(unaudited) |
|
|
||||
Current portion of long-term debt |
$ |
40,034 |
|
|
$ |
36,583 |
|
Long-term debt, less current portion |
|
739,052 |
|
|
|
680,307 |
|
Total long-term debt, including debt issuance costs |
|
779,086 |
|
|
|
716,890 |
|
Add back: Debt issuance costs |
|
2,247 |
|
|
|
3,833 |
|
Total long-term debt, excluding debt issuance costs |
|
781,333 |
|
|
|
720,723 |
|
Less: Cash and cash equivalents |
|
(35,371 |
) |
|
|
(38,562 |
) |
Net debt |
$ |
745,962 |
|
|
$ |
682,161 |
|
Adjusted EBITDA - trailing four quarters |
|
190,729 |
|
|
|
187,945 |
|
Net leverage ratio |
3.9 x |
|
3.6 x |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230214005880/en/
Investor Relations
rballew@krispykreme.com
Financial Media
Source:
FAQ
What were Krispy Kreme's Q4 2022 financial results?
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