Baskin Robbins 2012 Annual Report Download - page 47

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-37-
decline in segment profit was an increase in income from the South Korea joint venture of $1.4 million, as well as the increase
in total revenues.
Baskin-Robbins U.S.
Fiscal year Increase (Decrease)
2012 2011 $ %
(In thousands, except percentages)
Royalty income $ 25,768 25,177 591 2.3 %
Franchise fees 775 1,271 (496) (39.0)%
Rental income 3,949 4,544 (595) (13.1)%
Sales of ice cream products 3,942 3,780 162 4.3 %
Sales at company-owned restaurants 157 390 (233) (59.7)%
Other revenues 7,483 8,293 (810) (9.8)%
Total revenues $ 42,074 43,455 (1,381) (3.2)%
Segment profit $ 26,274 21,593 4,681 21.7 %
The decline in Baskin-Robbins U.S. revenue for fiscal year 2012 resulted from a decline in other revenues of $0.8 million
primarily due to a decrease in licensing income related to the sale of Baskin-Robbins ice cream products to franchisees.
Additionally, rental income declined $0.6 million due to a reduction in the number of leased locations, and franchise fees
declined $0.5 million driven by fewer store openings. Offsetting these declines in revenue was an increase in royalty income of
$0.6 million driven by the increase in systemwide sales. Approximately $0.3 million of the overall decrease in total revenues
was attributable to the extra week in fiscal year 2011.
Baskin-Robbins U.S. segment profit for fiscal year 2012 increased as a result of a $4.6 million decline in general and
administrative expenses driven by costs incurred in the prior year related to the roll-out of a new point-of-sale system for
Baskin-Robbins franchisees and additional contributions made to the Baskin-Robbins advertising fund to support brand-
building advertising in the prior year. Additionally, occupancy expenses declined $1.5 million from the prior year as a result of
a reduction in the number of leased locations, as well as reserves recorded on leased locations in the prior year. Offsetting these
increases in segment profit was the $1.4 million decline in total revenues.
Baskin-Robbins International
Fiscal year Increase (Decrease)
2012 2011 $ %
(In thousands, except percentages)
Royalty income $ 9,301 8,422 879 10.4 %
Franchise fees 1,292 1,593 (301) (18.9)%
Rental income 561 616 (55) (8.9)%
Sales of ice cream products 90,717 96,288 (5,571) (5.8)%
Other revenues 104 (32) 136 (425.0)%
Total revenues $ 101,975 106,887 (4,912) (4.6)%
Segment profit $ 42,004 42,844 (840) (2.0)%
The decline in Baskin-Robbins International revenues for fiscal year 2012 was driven by a $5.6 million decline in sales of ice
cream products, primarily 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, which unfavorably impacted fiscal year 2012 revenue by approximately $5.8
million. The decline in sales of ice cream products also resulted from the impact of the extra week in the prior year, which
contributed approximately $1.2 million of revenue in fiscal year 2011. Without the effect of these two items, Baskin-Robbins
International sales of ice cream products increased $1.4 million driven by strong sales to the Middle East, offset by a decline in
sales to Afghanistan as a result of the border closure earlier in 2012.
Offsetting the decline in sales of ice cream products was an increase in royalty income of $0.9 million primarily as a result of
higher sales and additional royalties earned in South Korea and Russia.