Baskin Robbins 2012 Annual Report Download - page 41

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• Baskin-Robbins U.S. systemwide sales growth of 1.5% resulting primarily from comparable store sales growth of
3.8%, offset by approximately 140 basis points of a decline attributable to the extra week in fiscal year 2011, as well
as 30 net restaurant closures during 2012. Baskin-Robbins U.S. comparable store sales growth was driven by new
product news and signature Flavors of the Month, custom cake sales, and new beverages.
• Baskin-Robbins International systemwide sales growth of 5.5% resulting from increased sales in South Korea and
Japan, which resulted from both comparable store sales growth and net development. Offsetting this growth was
approximately 170 basis points of a decline attributable to the extra week in fiscal year 2011, as well as an unfavorable
foreign currency impact.
The increase in total revenues of $30.0 million, or 4.8%, for fiscal year 2012 primarily resulted from a $20.5 million increase in
franchise fees and royalty income driven by the increase in Dunkin’ Donuts U.S. systemwide sales, a $10.8 million increase in
sales at company-owned restaurants due to additional locations acquired, and a $4.7 million increase in rental income. The
overall $30.0 million growth in revenues reflects the unfavorable impact of the extra week in fiscal year 2011, which
contributed approximately $8.0 million of incremental revenue in the prior year consisting primarily of additional royalty
income and sales of ice cream products. Sales of ice cream products were also unfavorably impacted by approximately $5.8
million in the fourth quarter of 2012 from a one-time delay in revenue recognition as a result of a change in shipping terms
related to the shift in ice cream manufacturing to Dean Foods.
Operating income increased $34.1 million, or 16.6%, for fiscal year 2012 driven by the $20.5 million increase in franchise fees
and royalty income, as well as a $25.8 million increase in income from equity method investments driven by an impairment of
the investment in the Korea joint venture recorded in fiscal year 2011. The increase in operating income was also attributable to
a $14.7 million expense incurred in the prior year related to the termination of the Sponsor management agreement in
connection with the Company's initial public offering, as well as a $4.5 million increase in net rental income. Offsetting these
increases in operating income was a $20.7 million increase in the Bertico litigation legal reserve recorded in the second quarter
of 2012, and an approximately $14.0 million unfavorable impact associated with the closure of our ice cream manufacturing
plant in Peterborough, Ontario, Canada.
Adjusted operating income increased $36.4 million, or 13.5%, for fiscal year 2012 driven by the $20.5 million increase in
franchise fees and royalty income, a $7.1 million increase in income from equity method investments driven by our Korea joint
venture, and a $4.5 million increase in net rental income.
Net income increased $73.9 million, or 214.5%, for fiscal year 2012 as a result of the $34.1 million increase in operating
income, a $31.0 million decrease in net interest expense, and a $30.3 million decrease in loss on debt extinguishment and
refinancing transactions, offset by a $22.0 million increase in income tax expense driven by increased profit before tax.
Adjusted net income increased $48.0 million, or 47.1%, for fiscal year 2012 resulting primarily from a $36.4 million increase
in adjusted operating income and a $31.0 million decrease in net interest expense, offset by a $20.0 million increase in income
tax expense.
Fiscal year 2011 compared to fiscal year 2010
Overall growth in systemwide sales of 9.1% for fiscal year 2011, or 7.4% on a 52-week basis, resulted from the following:
• Dunkin’ Donuts U.S. systemwide sales growth of 9.4%, which was the result of comparable store sales growth of
5.1% driven by both increased average ticket and transaction counts, net restaurant development of 243 restaurants in
2011, and approximately 190 basis points of growth attributable to the extra week in fiscal year 2011.
• Dunkin’ Donuts International systemwide sales growth of 9.1% as a result of sales increases in South Korea and
Southeast Asia driven by net new restaurant development, comparable store sales growth, and favorable foreign
exchange.
• Baskin-Robbins U.S. systemwide sales growth of 0.4% resulting primarily from comparable store sales growth of
0.5% and the extra week in fiscal year 2011, contributing approximately 140 basis points of growth, offset by a
slightly reduced restaurant base.
• Baskin-Robbins International systemwide sales growth of 11.6% resulting from increased sales in South Korea and
Japan, which resulted from both sales growth and favorable foreign exchange, as well as in the Middle East, and
approximately 190 basis points of growth attributable to the extra week in fiscal year 2011.
The increase in total revenues of $51.1 million, or 8.8%, for fiscal year 2011 primarily resulted from increased franchise fees
and royalty income of $38.5 million, driven by the increase in Dunkin’ Donuts U.S. systemwide sales, as well as a $15.1