Baskin Robbins 2013 Annual Report Download - page 49

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-39-
Baskin-Robbins U.S.
Fiscal year Increase (Decrease)
2013 2012 $ %
(In thousands, except percentages)
Royalty income $ 25,728 25,768 (40) (0.2)%
Franchise fees 1,160 775 385 49.7 %
Rental income 3,420 3,949 (529) (13.4)%
Sales of ice cream products 3,808 3,942 (134) (3.4)%
Sales at company-owned restaurants — 157 (157) (100.0)%
Other revenues 8,036 7,483 553 7.4 %
Total revenues $ 42,152 42,074 78 0.2 %
Segment profit $ 27,081 26,274 807 3.1 %
Baskin-Robbins U.S. revenue remained consistent from fiscal year 2012 to fiscal year 2013. Franchise fees increased $0.4
million driven primarily by incremental franchise renewals, while other revenues increased by $0.6 million primarily due to
additional income received from the licensing of ice cream manufacturing. The increases in revenue were offset by decreases in
rental income of $0.5 million due to a reduction in the number of leased locations, as well as decreases in sales at company-
owned restaurants and sales of ice cream products.
Baskin-Robbins U.S. segment profit for fiscal year 2013 increased primarily as a result of additional breakage income of $0.5
million related to unredeemed gift certificate balances, as well as increases in franchise fees and other revenues, offset by an
increase in personnel costs.
Baskin-Robbins International
Fiscal year Increase (Decrease)
2013 2012 $ %
(In thousands, except percentages)
Royalty income $ 9,109 9,301 (192) (2.1)%
Franchise fees 1,665 1,292 373 28.9 %
Rental income 535 561 (26) (4.6)%
Sales of ice cream products 108,435 90,717 17,718 19.5 %
Other revenues 589 104 485 466.3 %
Total revenues $ 120,333 101,975 18,358 18.0 %
Segment profit $ 54,321 42,004 12,317 29.3 %
The increase in Baskin-Robbins International revenues for fiscal year 2013 was driven by a $17.7 million increase in sales of
ice cream products, primarily due to increases in sales of ice cream products in the Middle East and an increase in distribution
costs billed to customers, as well as a one-time delay in revenue recognition related to the shift in manufacturing to Dean Foods
which unfavorably impacted fiscal year 2012 revenue by approximately $5.8 million.
Baskin-Robbins International segment profit increased $12.3 million for fiscal year 2013 primarily due to an increase in net
margin on ice cream of $7.9 million driven by increased sales volumes and cost savings from the transition to Dean Foods,
partially offset by Australia inventory write-offs. Also contributing to the increase was the $6.3 million gain recognized on the
sale of the Baskin-Robbins Australia business. The increases in segment profit were offset by a decrease in net income of equity
method investments of $0.7 million, driven by a decrease in income from our Japan joint venture, partially offset by an increase
in income from our South Korea joint venture. Offsetting these increases were incremental costs incurred to support the growth
of the Baskin-Robbins international segment.