CHARLOTTE, N.C.--(BUSINESS WIRE)--Krispy Kreme, Inc. (NASDAQ: DNUT) ("Krispy Kreme" or the "Company") today reported financial results for the fourth quarter and full year ended January 1, 2023. Net revenue in the quarter grew 9.2%, inclusive of a negative 3.7% impact from foreign currency exchange ("FX") headwinds. Sales Per Hub grew 15.0% in the U.S. and Canada to $4.6 million and 7.7% in International to $9.8 million. Organic revenue in the quarter grew 12.5% driven by double digit organic growth in all three business segments. For the full year 2022, net revenue grew 10.5%, inclusive of a negative 2.7% impact from FX headwinds, and organic revenue grew 12.1%.
Our efforts to improve performance through our network optimization and closing unprofitable shops led to expenses of $12.4 million, over 90% non cash, which contributed to a GAAP Net Loss of $1.0 million for the fourth quarter. The Company is already seeing improved performance from our Hubs without Spokes in the U.S.
Adjusted EBITDA grew 17%, or an even stronger 25% in constant currency, and Adjusted EBITDA margins expanded 90 basis points in the quarter compared to the same quarter a year ago, led by strong performance from the U.S. and Canada and Market Development segments and sequential improvement in our International segment. GAAP Diluted Loss Per Share for the quarter was $0.02 compared to income of $0.01 in the same quarter last year. Adjusted Diluted Earnings Per Share was $0.11 for the quarter, up 38% compared to the same quarter a year ago. Free cash flow in the fourth quarter was $32.4 million.
Commenting on the performance, CEO Mike Tattersfield stated, "We are pleased with the strong end to 2022, with notable progress on expanding our omni-channel model, furthering our global growth strategy and executing successfully on the initial phase of our hub optimization efforts. Our global fresh, premium Halloween and winter holiday specialty doughnuts resonated strongly with consumers, helping drive a record of more than 1.6 billion doughnuts sold in 2022. Our Ecommerce business also achieved impressive growth of 23%, marking the best quarter in this channel since the pandemic, led by growth in Insomnia Cookies and Krispy Kreme in the U.S."
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 10% to 15% in 2023. We are particularly excited for our global growth this year as we expect to open in five to seven new countries in 2023, including in France, as we continue on our journey to being the most loved sweet treat brand in the world."
Financial Highlights
$ in millions, except per share data | Q4 2022 | vs Q4 2021 | 2022 | vs 2021 |
Net Revenue | $404.6 | 9.2% | $1,529.9 | 10.5% |
Organic Revenue (1) | $415.4 | 12.5% | $1,549.8 | 12.1% |
GAAP Net Loss | $(1.0) | nm | $(8.8) | 40.9% |
Adjusted Net Income, Diluted (1) | $18.6 | 38.9% | $49.6 | (10.6)% |
Operating Income | $5.2 | (68.4)% | $29.0 | (29.5)% |
Operating Income Margin | 1.3% | -310 bps | 1.9% | -110 bps |
Adjusted EBITDA (1) | $55.9 | 17.2% | $190.7 | 1.5% |
Adjusted EBITDA Margin (1) | 13.8% | +90 bps | 12.5% | -110 bps |
GAAP Diluted Loss Per Share | $(0.02) | $(0.03) | $(0.10) | $0.08 |
Adjusted Diluted EPS (1) | $0.11 | $0.03 | $0.29 | $(0.08) |
Notes: | ||||
Key Operating Metrics
$ in millions, except access points | Q4 2022 | vs Q4 2021 |
Global Points of Access | 11,837 | 13.5% |
Sales per Hub (U.S. and Canada) TTM | $4.6 | 15.0% |
Sales per Hub (International) TTM | $9.8 | 7.7% |
Ecommerce as a Percent of Retail Sales | 18.3% | +260 bps |
Fourth Quarter and Full Year 2022 Consolidated Results
Net revenue grew 9.2% in the quarter to $404.6 million, or 23.0% on a two-year stack basis. Total company organic revenue grew 12.5% in the quarter compared to the same quarter last year, and 26.4% on a two-year stack basis. Organic revenue growth in the quarter was strong across all segments due to the increase in Points of Access and a strong Delivered Fresh Daily ("DFD") performance.
For the full year 2022, net revenue grew 10.5% to $1.53 billion, or 33.9% on a two-year stack basis. Organic revenue grew 12.1% in 2022, or 24.6% on a two-year stack basis, driven by Points of Access growth and a 10% increase in sales per DFD door in the U.S. and Canada.
GAAP Net Loss for the quarter was $1.0 million, compared to a GAAP Net Income of $4.3 million a year ago. The decrease was driven by expenses of $12.4 million, over 90% of which were non-cash, associated with previously announced optimization efforts and shop closures. Excluding that expense, GAAP Net Income would have increased in the fourth quarter.
Adjusted EBITDA in the quarter grew 17.2% to $55.9 million, or 25.0% in constant currency, with Adjusted EBITDA margins expanding 90 basis points to 13.8%. Adjusted Net Income, diluted grew 38.9% to $18.6 million in the quarter. GAAP Diluted Loss per Share in the quarter was $0.02 compared to income of $0.01 in the same quarter last year. Adjusted Diluted EPS increased 37.5% to $0.11 from $0.08 in the same quarter last year.
For the full year 2022, GAAP Net Loss was $8.8 million, an improvement of 40.9% compared to 2021. GAAP Net Loss for the year included $19.0 million in expense related to the previously discussed optimization efforts, over 90% of which were non-cash. Adjusted EBITDA grew 1.5% to $190.7 million in 2022, or 7.1% in constant currency. Adjusted Net Income, diluted for 2022 declined 10.6% to $49.6 million. GAAP Diluted Loss per Share for the full year 2022 was $0.10 compared to a loss of $0.18 in 2021. Adjusted Diluted EPS for the year was $0.29.
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
U.S. and Canada: In the U.S. and Canada segment in the fourth quarter, net revenue grew 11.1% to $276.9 million from $249.2 million a year ago, driven by strong Points of Access expansion over the last year and a record average weekly revenue per door of approximately $620 driven by strong sales of specialty doughnuts. Sales per Hub increased 15.0% to $4.6 million. Organic revenue in the quarter increased 11.6% driven by our omni-channel model, primarily the strength of DFD, as well as double digit same-store sales growth from Insomnia Cookies. For the full year, net revenue grew 11.3% to $1.0 billion while organic revenue increased 9.1%.
U.S. and Canada Adjusted EBITDA in the fourth quarter increased 16.2% to $37.0 million, with margin expansion of 50 basis points to 13.3%, driven primarily by the strong performance of our Hub and Spoke model from increased DFD doors and sales per door as well as improved performance from our Hubs without Spokes as optimization efforts highlighted at our Investor Day in December 2022 are already producing results. Price increases were successfully implemented on fresh doughnuts in October 2022 showing low levels of elasticity. For the full year, U.S. and Canada Adjusted EBITDA increased 10.1% to $118.5 million while margins were approximately flat at 11.5%.
International: In the International segment, net revenue in the fourth quarter grew 3.3% to $92.9 million, with the stronger dollar reducing growth by 8.0%. Sales per Hub increased 7.7% to $9.8 million. Organic growth of 11.3% in the quarter was driven by successful specialty doughnut sales and expansion of DFD. The company saw growth across all of our International markets, including in the U.K. which saw sequential improvement compared to the third quarter. For the full year, the International segment saw net revenue increase 9.9% to $365.9 million, with organic growth of 17.7%, which excludes the impact of the stronger U.S. dollar.
International Adjusted EBITDA in the fourth quarter was approximately flat over the prior year at $20.5 million, or an increase of 13.5% in constant currency. International Adjusted EBITDA margin was 22.0% for the quarter, down 110 basis points from the prior year but an increase of 210 basis points from the prior quarter. For the full year, International Adjusted EBITDA declined 7.3% to $75.5 million, or an increase of 3.8% in constant currency.
Market Development: In the Market Development segment net revenue in the fourth quarter grew 10.7% to $34.7 million or 20.9% in constancy currency. Organic growth accelerated to 23.4% in the quarter with strong performances across our global franchise partners and our equity owned Japanese market. For the full year, Market Development net revenue increased 6.4% to $130.9 million, or 13.7% in constant currency, while organic growth was 19.3%.
Market Development Adjusted EBITDA in the fourth quarter increased 11.3% to $12.3 million, or 22.0% in constant currency, led by strong increases in international franchise and our equity owned Japan business, partially offset by domestic franchise acquisitions. For the full year, Market Development Adjusted EBITDA increased 8.8% to $44.4 million, or 17.1% in constant currency.
Balance Sheet and Capital Expenditures
During the fourth quarter 2022, the company invested $36.7 million in capital expenditures, primarily to support Hub and Spoke expansion. For the full year 2022, the Company invested $111.7 million in capital expenditures, or 7.3% of revenue, and $17.3 million for franchise acquisitions in the U.S.
As of January 1, 2023, the Company had $35.4 million of cash and cash equivalents and net debt of $746.0 million. Free cash flow in the fourth quarter was $32.4 million with the Adjusted EBITDA generated from operating activities in excess of capital expenditures reflecting the capital-efficient Hub and Spoke growth model and free cash flow of $28.1 million for the full year 2022.
2023 Financial Outlook
Krispy Kreme issues the following guidance for the full year 2023
- Net Revenue of $1.65 billion to $1.68 billion, +8% to +10% vs 2022 (+9% to +11% in constant currency)
- Organic Revenue growth of 9% to 11%
- Adjusted EBITDA of $205 million to $215 million, +8% to +13% vs 2022 (+10% to +14% in constant currency)
- Adjusted Net Income, diluted, of $52 million to $58 million, +5% to +17% vs 2022 (+9% to +21% in constant currency)
- Adjusted Diluted EPS of $0.31 to $0.34, +7% to +17% vs 2022 (+10% to +21% in constant currency)
- Income Tax rate between 24.5% to 26.0%
- Capital Expenditures between $105 million to $115 million, or approximately 6.6% of revenue
- Interest Expense, net between $39 million to $43 million
The above guidance assumes a negative 1% impact to 2023 revenue and a negative $3 million impact to 2023 Adjusted EBITDA from FX headwinds, with the impact entirely in the first half of the year. The Company expects to reduce its net leverage in 2023, as we make progress towards our 2026 goal of approximately 2.0x to 2.5x net leverage.
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 and Cookie 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 the Krispy 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
Krispy Kreme will host a public conference call at 8:30 AM Eastern Time today to discuss its results for the fourth quarter of 2022. The conference call can be accessed by dialing 1 (800) 599-5188 and entering the conference ID 5487868. International participants can access the call via the corresponding number listed HERE and entering the conference ID 5487868. To listen to the live audio webcast and Q&A, visit the Krispy Kreme investor relations website at investors.krispykreme.com. A replay and transcript of the webcast will be available on the website within 24 hours after the call. Krispy Kreme's earnings press release and related materials will also be available on the investor relations section of the Company's website.
About Krispy Kreme
Headquartered in Charlotte, N.C., Krispy Kreme is one of the most beloved and well-known sweet treat brands in the world. Our iconic Original Glazed® doughnut is universally recognized for its hot-off-the-line, melt-in-your-mouth experience. Krispy Kreme operates in over 30 countries through its unique network of fresh doughnut shops, partnerships with leading retailers, and a rapidly growing Ecommerce and delivery business with nearly 12,000 fresh points of access. Our purpose of touching and enhancing lives through the joy that is Krispy Kreme guides how we operate every day and is reflected in the love we have for our people, our communities and the planet. Connect with Krispy Kreme Doughnuts at www.KrispyKreme.com, or on one of its many social media channels, including www.Facebook.com/KrispyKreme and www.Twitter.com/KrispyKreme.
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 June 30, 2022, filed by us with the Securities and Exchange Commission ("SEC") and described in the other filings we make from time to time with the SEC. We believe that these factors include, but are not limited to, the impact of pandemics, changes in consumer preferences, the impact of inflation, and our ability to execute on our omni-channel business strategy. These forward-looking statements are made only as of the date of this document, and we do not undertake any obligation, other than as may be required by applicable law, to update or revise any forward-looking or cautionary statement to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise.
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 U.S. Generally Accepted Accounting Principles ("GAAP"). These non-GAAP financial measures are not universally consistent calculations, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently than we do or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance under GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine our non-GAAP financial measures in conjunction with our historical consolidated financial statements and notes thereto filed with the SEC.
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.
Krispy Kreme, Inc. Consolidated Statements of Operations (in thousands, except per share amounts) | |||||||||||
Fiscal Years Ended | |||||||||||
January 1, | January 2, | January 3, | |||||||||
(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 Krispy Kreme, Inc | $ | (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 | |||||||
January 1, | January 2, | ||||||
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 Krispy Kreme, Inc. | $ | (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 | |||||
Krispy Kreme, Inc. Consolidated Balance Sheets (in thousands, except per share data) | |||||||
As of | |||||||
January 1, 2023 | January 2, 2022 | ||||||
(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 | |||||
Goodwill | 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, $0.01 par value; 300,000 shares authorized as of both January 1, 2023 and January 2, 2022; 168,137 and 167,251 shares issued and outstanding as of January 1, 2023 and January 2, 2022, respectively | 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 Krispy Kreme, Inc. | 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 | |||
Krispy Kreme, Inc. Consolidated Statements of Cash Flows (in thousands) | |||||||||||
Fiscal Years Ended | |||||||||||
January 1, | January 2, | January 3, | |||||||||
(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 | ) | ||||
Krispy Kreme, Inc. Reconciliation of Non-GAAP Financial Measures (unaudited and in thousands, except per share amounts) | |||||||||||||||
Quarter Ended | Fiscal Years Ended | ||||||||||||||
(in thousands) | January 1, 2023 | January 2, 2022 | January 1, 2023 | January 2, 2022 | |||||||||||
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) | January 1, 2023 | January 2, 2022 | January 1, 2023 | January 2, 2022 | |||||||||||
Segment Adjusted EBITDA: | |||||||||||||||
U.S. and Canada | $ | 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) | January 1, 2023 | January 2, 2022 | January 1, 2023 | January 2, 2022 | |||||||||||
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 Treat Line manufacturing capability from Burlington, Iowa to Winston-Salem, North Carolina. | |
(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 Canada and the U.K. | |
(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 U.S. executive teams. Fiscal 2021 consists of severance and related benefits costs associated with the Company's realignment of the Company Shop organizational structure to better support the DFD and Branded Sweet Treat Line businesses. | |
(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 $3.3 million negotiated with TSW Foods, LLC in fiscal 2022. | |
(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 24.1% and 22.4% for the fiscal years 2022 and 2021, respectively. Fiscal 2022 includes the impact of disallowed executive compensation expense and a discrete tax benefit related to a legal accrual. Fiscal 2021 includes the impact of disallowed executive compensation expense incurred in connection with the IPO. | |
(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. |
Krispy Kreme, Inc. Segment Reporting (unaudited and in thousands, except percentages or otherwise stated) | ||||||||
Quarter Ended | ||||||||
January 1, 2023 | January 2, 2022 | January 3, 2021 | ||||||
Net revenues: | ||||||||
U.S. and Canada | $ | 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 | U.S. and Canada | International | Market Development | Total Company | |||||||||||
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 | U.S. and Canada | International | Market Development | Total Company | |||||||||||
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 | ||||||||
January 1, 2023 | January 2, 2022 | January 3, 2021 | ||||||
Net revenues: | ||||||||
U.S. and Canada | $ | 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 | U.S. and Canada | International | Market Development | Total Company | |||||||||||
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 | U.S. and Canada | International | Market Development | Total Company | |||||||||||
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 | January 1, 2023 (52 weeks) | January 2, 2022 (52 weeks) | January 3, 2021 (53 weeks) | ||||||||
U.S. and Canada: | |||||||||||
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 Treat Line revenues. | |
(2) | Includes Insomnia Cookies revenues and Fresh Revenues generated by Hubs without Spokes. | |
(3) | Total International net revenues is equal to Fresh Revenues from Hubs with Spokes for that business segment. |
Krispy Kreme, Inc. Global Points of Access | |||||
Global Points of Access (1) | |||||
Fiscal Years Ended | |||||
January 1, 2023 | January 2, 2022 | January 3, 2021 | |||
(unaudited) | |||||
U.S. and Canada: (2) | |||||
Hot Light Theater Shops | 238 | 241 | 229 | ||
Fresh Shops | 68 | 66 | 47 | ||
Cookie Shops | 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: | |||||
Hot Light Theater Shops | 37 | 32 | 28 | ||
Fresh Shops | 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) | |||||
Hot Light Theater Shops | 111 | 109 | 119 | ||
Fresh Shops | 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 | ||
Total Hot Light Theater Shops | 386 | 382 | 376 | ||
Total Fresh Shops | 1,323 | 1,218 | 1,138 | ||
Total Cookie Shops | 231 | 210 | 184 | ||
Total Shops | 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 Treat Line distribution points. | |
(2) | Includes Points of Access that were acquired from franchisees in the U.S. and Canada. These Points of Access were previously included in the Market Development segment prior to the respective acquisition dates. | |
(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 Doughnut Factory. Other includes a vending machine. Points of Access in this category are primarily found in international locations, in airports, train stations, etc. | |
(4) | Includes locations in Japan, which are Company-owned. All remaining Points of Access in the Market Development segment relate to our franchise business. As of January 1, 2023, there were five Hot Light Theater Shops, 54 Fresh Shops and 166 DFD Doors in Japan operating. As of January 2, 2022, there were four Hot Light Theater Shops, 48 Fresh Shops and 105 DFD Doors in Japan operating. |
Krispy Kreme, Inc. Global Hubs | |||||
Hubs | |||||
Fiscal Years Ended | |||||
January 1, 2023 | January 2, 2022 | January 3, 2021 | |||
(unaudited) | |||||
U.S. and Canada: | |||||
Hot Light Theater Shops (1) | 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: | |||||
Hot Light Theater Shops (1) | 28 | 25 | 27 | ||
Doughnut Factories | 11 | 11 | 9 | ||
Total | 39 | 36 | 36 | ||
Hubs with Spokes | 39 | 36 | 36 | ||
Market Development: | |||||
Hot Light Theater Shops (1) | 106 | 106 | 116 | ||
Doughnut Factories | 27 | 27 | 26 | ||
Total | 133 | 133 | 142 | ||
Total Hubs | 408 | 411 | 409 | ||
(1) | Includes only Hot Light Theater Shops and excludes Mini Theaters. A Mini Theater is a Spoke location that produces some doughnuts for itself and also receives doughnuts from another producing location. |
Krispy Kreme, Inc. Net Debt and Leverage (in thousands, except leverage ratio) | |||||||
As of | |||||||
January 1, 2023 | January 2, 2022 | ||||||
(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 | |||||
Contacts
Investor Relations
Rob Ballew, VP of Investor Relations
rballew@krispykreme.com
Financial Media
Edelman Smithfield for Krispy Kreme, Inc.
Allie McLarty & Ashley Firlan, KrispyKremeIR@edelman.com
FAQs
Krispy Kreme Reports Strong Fourth Quarter 2022 Results? ›
Opening a Krispy Kreme franchise may cost you about $1,210,000, yet you can expect to make on average $820,000 in revenue per year.
How much does a Krispy Kreme franchise owner make per year? ›Opening a Krispy Kreme franchise may cost you about $1,210,000, yet you can expect to make on average $820,000 in revenue per year.
Why is Krispy Kreme giving away free donuts? ›Krispy Kreme originally introduced the sweet gesture in 2020 when students were unable to have their traditional graduations due to COVID-19 — and brought it back every year since because of an overwhelming response. "We haven't forgotten that the lives of this year's graduates were heavily impacted by the pandemic.
How many days is Krispy Kreme good for? ›How long do Krispy Kreme glazed donuts last? A Krispy Kreme glazed donut will last about 2-3 days when stored at room temperature. However, if you want them to last a bit longer, you can store them in the fridge, and they'll be good for another 5-7 days. They'll last for about two months if you want to freeze them.
What's the secret of Krispy Kreme? ›What is the secret to Krispy Kreme Donuts? The secret to Krispy Kreme doughnuts is of course the sweet glaze, and this is achieved by bathing the doughnuts in a glaze of icing sugar, vanilla extract and milk, for a thicker glaze increase the quantity of icing sugar by a few spoons.
What franchise owner has the highest salary? ›| Percentile | Annual Salary | Hourly Rate |
|---|---|---|
| 90th Percentile | $62,000 | $30 |
| 75th Percentile | $56,000 | $27 |
| Average | $49,588 | $24 |
| 25th Percentile | $43,000 | $21 |
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CHARLOTTE, N.C. -- Buried deep in Krispy Kreme Doughnuts Inc.'s annual report, released earlier this month, was a startling revelation: sales of the once-trendy treats have dropped more than 18 percent in each of the last two years, The Associated Press reported.
What does Krispy Kreme do with the leftovers? ›Leftover Krispy Kremes are made into pig feed
They certainly aren't saved and resold the next day. The majority are sent off to be made into animal feed, specifically pig fodder.
Your Birthday
To get this sweet birthday treat, you'll need to be a member of Krispy Kreme Rewards. Be sure to enter your birthday when you register so they'll know when to send the coupon for your free birthday doughnut.
Can you freeze Krispy Kreme? ›
Yes—and the best way to freeze Krispy Kreme doughnuts is to seal them in an airtight package.
Can I freeze doughnuts? ›You can freeze donuts for up to three months. The best method for this is placing them in a large freezer bag. If you're stacking donuts, separate them with wax paper so they don't freeze together. Press the sides of the bag to remove any excess air before placing it in the freezer.
How do you make Krispy Kreme donuts last longer? ›To maintain your Krispy Kreme doughnuts in optimum condition, we recommend that you store them in a temperature under 18 degrees and out of direct sunlight. To keep Krispy Kreme doughnuts at their freshest after their first day at home, you can freeze the doughnuts and reheat in the microwave.
Is Krispy Kreme doughnuts baked or fried? ›Like most doughnuts, Krispy Kremes are fried (cooked in oil). Frying cooks the dough rapidly from the outside in to give the doughnuts their distinctive crispy texture. The flipper turns the doughnuts over midway through the oil.
What oil does Krispy Kreme use? ›We use vegetable shortening (palm, soybean, and/or cottonseed and canola oil) for zero gram of trans fat per one serving of doughnut. All monoglycerides and diglycerides are vegetable based. Enzymes are also present. The lecithin we use is soy-based.
Does Krispy Kreme put potatoes in their donuts? ›Absolutely. Potato doughnuts have been around for over 150 years; in fact, the original Krispy Kremes were made with potato, whose starch adds moisture to help keep doughnuts tender.
Can a franchise make you a millionaire? ›The bottom line is that while a franchise can make you independently wealthy, it isn't a guarantee. Choosing the right business in the right industry, and going in with preexisting entrepreneurial experience and/or existing wealth can help, but your income-generating potential may still be somewhat limited.
What is the richest franchise in America? ›The Dallas Cowboys are still king
The NFL has seen each team increase in value by 14% over the past year, and have signed a new media deal last March worth $112.6 billion.
As a franchisee, you earn money from the franchise's profits. This means that after your overhead costs are covered, you can draw a salary from the remaining profits.
What small business makes the most money? ›- Website and app development. It should be no surprise that tech is one of the fastest-growing industries. ...
- Financial consulting. ...
- Online business consulting. ...
- Information security. ...
- Digital marketing. ...
- Social media marketing. ...
- Writer or author. ...
- Graphic design.
Who is the most successful franchise in the world? ›
McDonald's. McDonald's has been the world's largest franchise for decades. That trend continues in 2023. With over 38,000 locations worldwide, McDonald's has a significant presence in more than 100 countries.
What is the most lucrative business? ›- Business Consulting. If you're an expert in your industry and have been working at it for years, you should consider consulting. ...
- IT Support, Technology Consulting, and Repair. ...
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- Accounting and Tax Preparation. ...
- Auto Repair. ...
- Real Estate. ...
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Krispy Kreme Plans to Close a Minimum of a Dozen Locations in 2023.
How is Krispy Kreme doing financially? ›Krispy Kreme's first quarter 2023 results reflect strong growth compared to the prior year. Net revenue grew 12.5% to $419.0 million and total company organic revenue grew 14.4% in the quarter.
Is Krispy Kreme doing beat the pump? ›Every Wednesday from April 13 to May 4, 2022, the price of a dozen original glazed doughnuts will match that of the national average price for a gallon of gasoline as determined the preceding Tuesday. The Beat The Pump deal is available at its U.S. locations in-store, drive-thru, and online.
Is it true that Krispy Kreme gives free donuts? ›Sign up for Krispy Kreme Rewards and earn a free doughnut of your choice – it's as simple as that.
Can Krispy Kreme warm up donuts? ›A dessert that will have your guests drooling. If you can't eat them fresh, take your frozen ones out of their airtight package in the freezer and pop them in the microwave for 8 seconds.
What happens when the red light is on at Krispy Kreme? ›Krispy Kreme Hot Light
When that neon red sign ignites, you best move quickly to your nearest Hot Light store to grab yourself a melt-in-your-mouth fresh OG doughnut. You can't beat an original, thank us later! Piping hot tip: …if you see that light beaming, you can score yourself a free OG with any purchase made.
JAB Holding Company is the privately-held parent company of foodservice concepts Bagel Brands, Caribou Coffee, Einstein Noah Restaurant Group, Espresso House, Krispy Kreme Doughnuts, Panera Bread, Peet's Coffee and Pret a Manger.
Can you buy a Krispy Kreme franchise? ›The initial investments to opening a Krispy Kreme franchise ranges from $275,000 to $1,911,250. Krispy Kreme franchise applicants must have financial resources to fund multi-unit store development plans including $300,000 in liquid assets.
Is Krispy Kreme kosher? ›
Are Krispy Kreme Doughnuts Kosher? All of our doughnuts are ingredient Kosher. Our mix plant in Winston-Salem, NC where the mix is made is certified Kosher. In addition, some of our stores, but not all, have been certified Kosher.
How do you keep donuts fresh for 2 days? ›To keep your donuts fresh, place them in a storage bag or airtight container and keep them for 1-2 days. When you want to eat them, put your donuts in the microwave for 5 seconds to soften them. Alternatively, place your donuts in a storage bag or container and keep them in the refrigerator for about a week.
How long do donuts last unrefrigerated? ›Properly stored, freshly baked donuts (not cream-filled) will last for about 1 to 2 days at normal room temperature; cream-filled donuts should be stored in the refrigerator. But always remember that it is better to refrigerate leftover donuts than to leave them on the counter.
How do you unfreeze donuts? ›To defrost: Place a doughnut on a microwave-safe plate and microwave for 15 to 20 seconds, checking for doneness after the first 10 seconds. You can also defrost doughnuts set out at room temperature on the kitchen counter overnight.
Should I store donuts in the fridge? ›Dairy-based fillings are likely to go bad at room temperature, and jelly fillings can grow mold. It's best to refrigerate any leftover filled doughnuts in an airtight container. Refrigerated doughnuts will keep for 3-4 days.
Can you freeze bagels? ›Depending on how many bagels you are freezing, you may need an extra-large freezer bag. Write the date on the freezer bag. This will help you know how long they are suitable for in the freezer. Typically bagels will be good for up to 4 months in the freezer.
Can you freeze donuts in foil? ›If you want to protect your donuts further, you can wrap them individually in wax paper, aluminum foil, or plastic wrap before storing them in the freezer bag. Stored this way, you'll protect them from freezer burn.
How much does a donut owner make? ›How much does a Donut Shop Owner make in Los Angeles, CA? The average Donut Shop Owner salary in Los Angeles, CA is $50,090 as of May 01, 2023, but the salary range typically falls between $44,172 and $58,412.
What is the average income of a donut shop owner? ›How much does a Donut Shop Owner make in California? The average Donut Shop Owner salary in California is $49,211 as of May 01, 2023, but the range typically falls between $43,396 and $57,387.
How much does a franchise owner make per store? ›On average, typical franchisees make about 80,000 dollars a year, not considering tax and expenses. Only a small part of franchise owners make over $200,000 annually, more than fifty percent of franchisees make about $50,000. The industry you're operating in impacts the amount of profit as well.
What is Krispy Kreme gross profit margin? ›
Current and historical gross margin, operating margin and net profit margin for Krispy Kreme (DNUT) over the last 10 years. Profit margin can be defined as the percentage of revenue that a company retains as income after the deduction of expenses. Krispy Kreme net profit margin as of March 31, 2023 is -1.26%.
What is the most successful donut business? ›Dunkin' Donuts
We all knew it would end with a showdown between Krispy Kreme and Dunkin' Donuts, didn't we? Dunkin' Donuts is the largest donut chain, with 11,000 stores in 33 countries. Originally named Kettle Donuts, it opened in 1948 and by 1950 adopted the name Dunkin' Donuts as it was sold as franchises.
Donut shops are usually rather small, so you may be able to get away with $5,000 to $6,000 a month for a small store in a prime location.
How much does a Dunkin Donuts owner make a year? ›While ZipRecruiter is seeing salaries as high as $207,421 and as low as $59,107, the majority of Dunkin Donuts Franchise salaries currently range between $68,400 (25th percentile) to $76,600 (75th percentile) with top earners (90th percentile) making $177,320 annually in Los Angeles.