Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
4-May-14 | 30-May-14 | |
Document and Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Entity Registrant Name | 'KRISPY KREME DOUGHNUTS INC | ' |
Entity Central Index Key | '0001100270 | ' |
Document Period End Date | 4-May-14 | ' |
Current Fiscal Year End Date | '--02-01 | ' |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock Shares Outstanding | ' | 64,214,174 |
CONSOLIDATED_STATEMENT_OF_INCO
CONSOLIDATED STATEMENT OF INCOME (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | 4-May-14 | 5-May-13 |
CONSOLIDATED STATEMENT OF INCOME | ' | ' |
Revenues | $121,580 | $120,625 |
Operating expenses: | ' | ' |
Direct operating expenses (exclusive of depreciation and amortization expense shown below) | 95,172 | 96,558 |
General and administrative expenses | 7,047 | 6,055 |
Depreciation and amortization expense | 3,173 | 2,820 |
Impairment charges and lease termination costs | 8 | 8 |
Operating income | 16,180 | 15,184 |
Interest income | 171 | 61 |
Interest expense | -143 | -437 |
Equity in losses of equity method franchisees | -57 | -53 |
Other non-operating income and (expense), net | 168 | -5 |
Income before income taxes | 16,319 | 14,750 |
Provision for income taxes | 6,663 | 6,751 |
Net income | $9,656 | $7,999 |
Earnings per common share: | ' | ' |
Basic | $0.15 | $0.12 |
Diluted | $0.14 | $0.11 |
CONSOLIDATED_STATEMENT_OF_COMP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | 4-May-14 | 5-May-13 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ' | ' |
Net income | $9,656 | $7,999 |
Other comprehensive income: | ' | ' |
Unrealized gain on cash flow hedge | ' | 10 |
Less income taxes | ' | -4 |
Total other comprehensive income | ' | 6 |
Comprehensive income | $9,656 | $8,005 |
CONSOLIDATED_BALANCE_SHEET
CONSOLIDATED BALANCE SHEET (USD $) | 4-May-14 | Feb. 02, 2014 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $43,555 | $55,748 |
Receivables | 27,512 | 25,268 |
Receivables from equity method franchisees | 721 | 675 |
Inventories | 16,689 | 16,750 |
Deferred income taxes | 23,794 | 23,847 |
Other current assets | 7,463 | 5,199 |
Total current assets | 119,734 | 127,487 |
Property and equipment | 96,610 | 92,823 |
Investments in equity method franchisees | ' | ' |
Goodwill and other intangible assets | 24,083 | 24,097 |
Deferred income taxes | 77,352 | 83,461 |
Other assets | 10,863 | 10,678 |
Total assets | 328,642 | 338,546 |
CURRENT LIABILITIES: | ' | ' |
Current portion of capital lease obligations | 313 | 344 |
Accounts payable | 16,765 | 16,788 |
Accrued liabilities | 26,392 | 29,276 |
Total current liabilities | 43,470 | 46,408 |
Capital lease obligations, less current portion | 1,633 | 1,659 |
Other long-term obligations and deferred credits | 26,527 | 25,386 |
Commitments and contingencies | ' | ' |
SHAREHOLDERS EQUITY: | ' | ' |
Preferred stock, no par value; 10,000 shares authorized; none issued and outstanding | ' | ' |
Common stock, no par value; 300,000 shares authorized; 64,568 shares and 64,940 shares outstanding, respectively | 320,398 | 338,135 |
Accumulated other comprehensive income | ' | ' |
Accumulated deficit | -63,386 | -73,042 |
Total shareholders' equity | 257,012 | 265,093 |
Total liabilities and shareholders' equity | $328,642 | $338,546 |
CONSOLIDATED_BALANCE_SHEET_Par
CONSOLIDATED BALANCE SHEET (Parenthenticals) (USD $) | 4-May-14 | Feb. 02, 2014 |
In Thousands, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEET | ' | ' |
Preferred stock, par value per share | ' | ' |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | ' | ' |
Common stock, shares authorized | 300,000 | 300,000 |
Common stock, shares outstanding | 64,568 | 64,940 |
CONSOLIDATED_STATEMENT_OF_CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | 4-May-14 | 5-May-13 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $9,656 | $7,999 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization expense | 3,173 | 2,820 |
Deferred income taxes | 6,162 | 6,105 |
Accrued rent expense | 140 | 217 |
(Gain) loss on disposal of property and equipment | 42 | -147 |
Share-based compensation | 1,167 | 946 |
Provision for doubtful accounts | -32 | 52 |
Amortization of deferred financing costs | 27 | 124 |
Equity in losses of equity method franchisees | 57 | 53 |
Unrealized (gains) on agricultural derivative positions | -1,402 | -190 |
Other | 3 | 17 |
Cash provided by operations | 18,993 | 17,996 |
Change in assets and liabilities: | ' | ' |
Receivables | -2,271 | -495 |
Inventories | 61 | -2,132 |
Other current and non-current assets | -682 | 3,084 |
Accounts payable and accrued liabilities | -2,279 | -4,290 |
Other long-term obligations and deferred credits | -161 | 230 |
Net cash provided by operating activities | 13,661 | 14,393 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchase of property and equipment | -6,869 | -5,459 |
Proceeds from disposals of property and equipment | 133 | 613 |
Other investing activities | 232 | 183 |
Net cash used for investing activities | -6,504 | -4,663 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Repayment of long-term debt and capital lease obligations | -105 | -1,608 |
Proceeds from exercise of stock options | 6,232 | 269 |
Repurchase of common shares | -25,477 | ' |
Net cash used for financing activities | -19,350 | -1,339 |
Net increase (decrease) in cash and cash equivalents | -12,193 | 8,391 |
Cash and cash equivalents at beginning of period | 55,748 | 66,332 |
Cash and cash equivalents at end of period | 43,555 | 74,723 |
Supplemental schedule of non-cash investing and financing activities: | ' | ' |
Assets acquired under leasing arrangements | $520 | $12 |
CONSOLIDATED_STATEMENT_OF_CHAN
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
In Thousands, except Share data | ||||
Balance at Feb. 03, 2013 | $246,432 | $354,068 | ($338) | ($107,298) |
Balance, shares at Feb. 03, 2013 | ' | 65,356,000 | ' | ' |
Comprehensive income | 8,005 | ' | 6 | 7,999 |
Exercise of stock options | 269 | 269 | ' | ' |
Exercise of stock options, shares | ' | 122,000 | ' | ' |
Share-based compensation | 946 | 946 | ' | ' |
Share-based compensation, shares | ' | 9,000 | ' | ' |
Balance at May. 05, 2013 | 255,652 | 355,283 | -332 | -99,299 |
Balance, shares at May. 05, 2013 | ' | 65,487,000 | ' | ' |
Balance at Feb. 02, 2014 | 265,093 | 338,135 | ' | -73,042 |
Balance, shares at Feb. 02, 2014 | 64,940,000 | 64,940,000 | ' | ' |
Comprehensive income | 9,656 | ' | ' | 9,656 |
Exercise of stock options | 6,232 | 6,232 | ' | ' |
Exercise of stock options, shares | ' | 1,057,000 | ' | ' |
Share-based compensation | 1,167 | 1,167 | ' | ' |
Share-based compensation, shares | ' | 8,000 | ' | ' |
Repurchase of common shares | -25,136 | -25,136 | ' | ' |
Repurchase of common shares, shares | -1,437,000 | -1,437,000 | ' | ' |
Balance at May. 04, 2014 | $257,012 | $320,398 | ' | ($63,386) |
Balance, shares at May. 04, 2014 | 64,568,000 | 64,568,000 | ' | ' |
Accounting_Policies
Accounting Policies | 3 Months Ended | |||||||
4-May-14 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Accounting Policies | ' | |||||||
Note 1 - Accounting Policies | ||||||||
Krispy Kreme Doughnuts, Inc. ("KKDI") and its subsidiaries (collectively, the "Company") are engaged in the sale of doughnuts and complementary products through Company-owned stores. The Company also licenses the Krispy Kreme business model and certain of its intellectual property to franchisees in the United States and over 20 other countries around the world, and derives revenue from franchise and development fees and royalties from those franchisees. Additionally, the Company sells doughnut mixes, other ingredients and supplies and doughnut-making equipment to franchisees. | ||||||||
Significant Accounting Policies | ||||||||
BASIS OF PRESENTATION. The consolidated financial statements contained herein should be read in conjunction with the Company's 2014 Form 10-K. The accompanying interim consolidated financial statements are presented in accordance with the requirements of Article 10 of Regulation S-X and, accordingly, do not include all the disclosures required by generally accepted accounting principles in the United States of America ("GAAP") with respect to annual financial statements. The interim consolidated financial statements have been prepared in accordance with the Company's accounting practices described in the 2014 Form 10-K, but have not been audited. In management's opinion, the financial statements include all adjustments, which consist only of normal recurring adjustments, necessary for a fair statement of the Company's results of operations for the periods presented. The consolidated balance sheet data as of February 2, 2014 were derived from the Company's audited financial statements but do not include all disclosures required by GAAP. | ||||||||
BASIS OF CONSOLIDATION. The financial statements include the accounts of KKDI and its subsidiaries, the most significant of which is KKDI's principal operating subsidiary, Krispy Kreme Doughnut Corporation. | ||||||||
Investments in entities over which the Company has the ability to exercise significant influence but which the Company does not control, and whose financial statements are not otherwise required to be consolidated, are accounted for using the equity method. | ||||||||
EARNINGS PER SHARE. The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share reflects the additional common shares that would have been outstanding if dilutive potential common shares had been issued, computed using the treasury stock method. Such potential common shares consist of shares issuable upon the exercise of stock options and the vesting of currently unvested restricted stock units. | ||||||||
The following table sets forth amounts used in the computation of basic and diluted earnings per share: | ||||||||
Three Months Ended | ||||||||
May 4, | May 5, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Numerator: net income | $ | 9,656 | $ | 7,999 | ||||
Denominator: | ||||||||
Basic earnings per share - weighted average shares outstanding | 66,522 | 67,012 | ||||||
Effect of dilutive securities: | ||||||||
Stock options | 2,607 | 2,751 | ||||||
Restricted stock units | 617 | 815 | ||||||
Diluted earnings per share - weighted average shares | ||||||||
outstanding plus dilutive potential common shares | 69,746 | 70,578 | ||||||
Stock options with respect to 173,000 and 617,000 shares for the three months ended May 4, 2014 and May 5, 2013, respectively, have been excluded from the computation of the number of shares used to compute diluted earnings per share because their inclusion would be antidilutive. | ||||||||
COMPREHENSIVE INCOME. Accounting standards on reporting comprehensive income require that certain items, including foreign currency translation adjustments and mark-to-market adjustments on derivative contracts accounted for as cash flow hedges (which are not reflected in net income) be presented as components of comprehensive income. The cumulative amounts recognized by the Company under these standards are reflected in the consolidated balance sheet as accumulated other comprehensive income, a component of shareholders' equity. | ||||||||
May 4, | May 5, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Accumulated other comprehensive loss: | ||||||||
Unrealized losses on cash flow hedge | $ | - | $ | (542 | ) | |||
Less: deferred income taxes | - | 210 | ||||||
Balance at end of period, net of tax | $ | - | $ | (332 | ) | |||
Recent Accounting Pronouncements | ||||||||
In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. The guidance is effective for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. The Company will evaluate the effects, if any, adoption of this guidance will have on the Company's consolidated financial statements. | ||||||||
In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. The guidance is effective for annual and interim periods beginning after December 15, 2014, with early adoption permitted. The Company will evaluate the effects, if any, adoption of this guidance will have on the Company's consolidated financial statements. | ||||||||
Segment_Information
Segment Information | 3 Months Ended | ||||||||
4-May-14 | |||||||||
Segment Information [Abstract] | ' | ||||||||
Segment Information | ' | ||||||||
Note 2 - Segment Information | |||||||||
The Company's operating and reportable segments are Company Stores, Domestic Franchise, International Franchise and KK Supply Chain. The Company Stores segment is comprised of the stores operated by the Company. These stores sell doughnuts and complementary products through both on-premises and wholesale sales channels, although some stores serve only one of these distribution channels. The Domestic Franchise and International Franchise segments consist of the Company's franchise operations. Under the terms of franchise agreements, domestic and international franchisees pay royalties and fees to the Company in return for the use of the Krispy Kreme name and ongoing brand and operational support. Expenses for these segments include costs to recruit new franchisees, to assist in store openings, to support franchisee operations and marketing efforts, as well as allocated corporate costs. The majority of the ingredients and materials used by Company stores are purchased from the KK Supply Chain segment, which supplies doughnut mix, other ingredients and supplies and doughnut-making equipment to both Company and franchisee-owned stores. | |||||||||
All intercompany sales by the KK Supply Chain segment to the Company Stores segment are at prices intended to reflect an arms-length transfer price and are eliminated in consolidation. Operating income for the Company Stores segment does not include any profit earned by the KK Supply Chain segment on sales of doughnut mix and other items to the Company Stores segment; such profit is included in KK Supply Chain operating income. | |||||||||
The following table presents the results of operations of the Company's operating segments for the three months ended May 4, 2014 and May 5, 2013. Segment operating income is consolidated operating income before general and administrative expenses, corporate depreciation and amortization, and impairment charges and lease termination costs. | |||||||||
Three Months Ended | |||||||||
May 4, | May 5, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Revenues: | |||||||||
Company Stores | $ | 80,448 | $ | 81,921 | |||||
Domestic Franchise | 3,499 | 2,871 | |||||||
International Franchise | 6,581 | 6,445 | |||||||
KK Supply Chain: | |||||||||
Total revenues | 60,312 | 59,811 | |||||||
Less - intersegment sales elimination | (29,260 | ) | (30,423 | ) | |||||
External KK Supply Chain revenues | 31,052 | 29,388 | |||||||
Total revenues | $ | 121,580 | $ | 120,625 | |||||
Operating income: | |||||||||
Company Stores | $ | 4,416 | $ | 5,314 | |||||
Domestic Franchise | 2,156 | 1,439 | |||||||
International Franchise | 4,280 | 4,531 | |||||||
KK Supply Chain | 12,754 | 10,239 | |||||||
Total segment operating income | 23,606 | 21,523 | |||||||
General and administrative expenses | (7,047 | ) | (6,055 | ) | |||||
Corporate depreciation and amortization expense | (371 | ) | (276 | ) | |||||
Impairment charges and lease termination costs | (8 | ) | (8 | ) | |||||
Consolidated operating income | $ | 16,180 | $ | 15,184 | |||||
Depreciation and amortization expense: | |||||||||
Company Stores | $ | 2,584 | $ | 2,354 | |||||
Domestic Franchise | 46 | 14 | |||||||
International Franchise | 1 | 3 | |||||||
KK Supply Chain | 171 | 173 | |||||||
Corporate | 371 | 276 | |||||||
Total depreciation and amortization expense | $ | 3,173 | $ | 2,820 | |||||
Segment information for total assets and capital expenditures is not presented as such information is not used in measuring segment performance or allocating resources among segments. | |||||||||
Income_Taxes
Income Taxes | 3 Months Ended |
4-May-14 | |
Income Taxes [Abstract] | ' |
Income Taxes | ' |
Note 3 - Income Taxes | |
The Company recognizes deferred income tax assets and liabilities based upon management's expectation of the future tax consequences of temporary differences between the income tax and financial reporting bases of assets and liabilities. Deferred tax liabilities generally represent tax expense recognized for which payment has been deferred, or expenses which have been deducted in the Company's tax returns but which have not yet been recognized as an expense in the financial statements. Deferred tax assets generally represent tax deductions or credits that will be reflected in future tax returns for which the Company has already recorded a tax benefit in its consolidated financial statements. | |
The Company establishes valuation allowances for deferred income tax assets in accordance with GAAP, which provides that such valuation allowances shall be established unless realization of the income tax benefits is more likely than not. | |
The valuation allowance of $2.7 million at May 4, 2014 and February 2, 2014 represents the portion of the Company's deferred tax assets management estimates will not be realized in the future. Such assets are associated principally with state net operating loss carryforwards related to states in which the scope of the Company's operations has decreased, which adversely affects the Company's ability to realize the net operating loss carryforwards because the Company has little income earned in or apportioned to those states. | |
The realization of deferred income tax assets is dependent on future events. While management believes its forecast of the amount of deferred tax assets expected to be realized is reasonable, actual results inevitably will vary from management's forecasts. Such variances could result in adjustments to the valuation allowance on deferred tax assets in future periods, and such adjustments could be material to the financial statements. | |
Receivables
Receivables | 3 Months Ended | ||||||||
4-May-14 | |||||||||
Receivables [Abstract] | ' | ||||||||
Receivables | ' | ||||||||
Note 4 - Receivables | |||||||||
The components of receivables are as follows: | |||||||||
May 4, | February 2, | ||||||||
2014 | 2014 | ||||||||
(In thousands) | |||||||||
Receivables: | |||||||||
Wholesale customers | $ | 10,198 | $ | 9,919 | |||||
Unaffiliated franchisees | 11,396 | 10,934 | |||||||
Due from third-party distributors | 4,273 | 3,262 | |||||||
Other receivables | 1,104 | 640 | |||||||
Current portion of notes receivable | 766 | 754 | |||||||
27,737 | 25,509 | ||||||||
Less - allowance for doubtful accounts: | |||||||||
Wholesale customers | (175 | ) | (191 | ) | |||||
Unaffiliated franchisees | (50 | ) | (50 | ) | |||||
(225 | ) | (241 | ) | ||||||
$ | 27,512 | $ | 25,268 | ||||||
Receivables from equity method franchisees (Note 6): | |||||||||
Trade | $ | 721 | $ | 675 | |||||
The changes in the allowance for doubtful accounts are summarized as follows: | |||||||||
Three Months Ended | |||||||||
May 4, | May 5, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Allowance for doubtful accounts related to receivables: | |||||||||
Balance at beginning of period | $ | 241 | $ | 615 | |||||
Provision for doubtful accounts | (13 | ) | 69 | ||||||
Net recoveries (chargeoffs) | (3 | ) | 22 | ||||||
Balance at end of period | $ | 225 | $ | 706 | |||||
Allowance for doubtful accounts related to receivables from equity method franchisees: | |||||||||
Balance at beginning of period | $ | - | $ | - | |||||
Provision for doubtful accounts | (16 | ) | (17 | ) | |||||
Net recoveries (chargeoffs) | 16 | 17 | |||||||
Balance at end of period | $ | - | $ | - | |||||
The Company also has notes receivable from franchisees included in "Other assets" in the accompanying consolidated balance sheet, which are summarized in the following table. | |||||||||
May 4, | February 2, | ||||||||
2014 | 2014 | ||||||||
(In thousands) | |||||||||
Notes receivable: | |||||||||
Notes receivable from franchisees | $ | 3,738 | $ | 3,980 | |||||
Less - portion due within one year included in receivables | (766 | ) | (754 | ) | |||||
Less - allowance for doubtful accounts | (51 | ) | (54 | ) | |||||
$ | 2,921 | $ | 3,172 | ||||||
Notes receivable at May 4, 2014 and February 2, 2014 consist principally of amounts payable to the Company related to a refranchising transaction, the sale of certain leasehold interests to a franchisee, and to sales of equipment. | |||||||||
The changes in the allowance for doubtful accounts related to notes receivable are summarized as follows: | |||||||||
Three Months Ended | |||||||||
May 4, | May 5, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Balance at beginning of period | $ | 54 | $ | 62 | |||||
Provision for doubtful accounts | (3 | ) | - | ||||||
Balance at end of period | $ | 51 | $ | 62 | |||||
In addition to the foregoing notes receivable, the Company had promissory notes totaling approximately $2.9 million at May 4, 2014 and February 2, 2014 representing principally royalties and fees due to the Company which, as a result of doubt about their collection, the Company has not yet recorded as revenues. During the three months ended May 4, 2014 and May 5, 2013, the Company collected $8,000 and $42,000, respectively, related to these promissory notes and recorded such collections in revenues as received. | |||||||||
Finally, the Company has a promissory note receivable from Krispy Kreme of South Florida, LLC ("KKSF") totaling approximately $1.3 million at May 4, 2014 and $1.5 million at February 2, 2014 arising from the Company's advance to KKSF of approximately $1.6 million in November 2013 to enable KKSF to retire certain indebtedness with respect to which KKSF had been in default since October 2009 and, payment of which was demanded by the lender in October 2013. The lender also made demand on the Company to perform under its guarantee of such indebtedness. The note receivable is not reflected as an asset in the accompanying consolidated balance sheet at May 4, 2014 or February 2, 2014. Because of the uncertainty of recovery of amounts advanced to KKSF, the Company is recording payments on the note as they are received from KKSF, and reflecting such amounts as a component of other non-operating income. During the three months ended May 4, 2014, the Company collected $170,000 related to this promissory note. | |||||||||
Inventories
Inventories | 3 Months Ended | ||||||
4-May-14 | |||||||
Inventories [Abstract] | ' | ||||||
Inventories | ' | ||||||
Note 5 - Inventories | |||||||
The components of inventories are as follows: | |||||||
May 4, | February 2, | ||||||
2014 | 2014 | ||||||
(In thousands) | |||||||
Raw materials | $ | 6,661 | $ | 6,200 | |||
Work in progress | 140 | 114 | |||||
Finished goods and purchased merchandise | 9,888 | 10,436 | |||||
$ | 16,689 | $ | 16,750 |
Investment_in_Franchisees
Investment in Franchisees | 3 Months Ended | |||||||||||||
4-May-14 | ||||||||||||||
Investment in Franchisees [Abstract] | ' | |||||||||||||
Investment in Franchisees | ' | |||||||||||||
Note 6 - Investments in Franchisees | ||||||||||||||
As of May 4, 2014, the Company had an ownership interest in three franchisees, the net carrying value of which was zero. The Company's financial exposures related to franchisees in which the Company has an investment are summarized in the tables below. | ||||||||||||||
4-May-14 | ||||||||||||||
Company | Investment | |||||||||||||
Ownership | and | Loan | ||||||||||||
Percentage | Advances | Receivables | Guarantees | |||||||||||
(Dollars in thousands) | ||||||||||||||
Kremeworks, LLC | 25 | % | $ | 900 | $ | 329 | $ | 106 | ||||||
Kremeworks Canada, LP | 24.5 | % | - | 36 | - | |||||||||
Krispy Kreme of South Florida, LLC | 35.3 | % | - | 356 | - | |||||||||
900 | 721 | $ | 106 | |||||||||||
Less: reserves and allowances | (900 | ) | - | |||||||||||
$ | - | $ | 721 | |||||||||||
2-Feb-14 | ||||||||||||||
Company | Investment | |||||||||||||
Ownership | and | Loan | ||||||||||||
Percentage | Advances | Receivables | Guarantees | |||||||||||
(Dollars in thousands) | ||||||||||||||
Kremeworks, LLC | 25.0 | % | $ | 900 | $ | 280 | $ | 140 | ||||||
Kremeworks Canada, LP | 24.5 | % | - | 19 | - | |||||||||
Krispy Kreme of South Florida, LLC | 35.3 | % | - | 376 | - | |||||||||
900 | 675 | $ | 140 | |||||||||||
Less: reserves and allowances | (900 | ) | - | |||||||||||
$ | - | $ | 675 | |||||||||||
The loan guarantee amounts in the preceding tables represent the portion of the principal amount outstanding under the related loan that is subject to the Company's guarantee. | ||||||||||||||
The Company has a 25% interest in Kremeworks, LLC ("Kremeworks"), and has guaranteed 20% of the outstanding principal balance of certain of Kremeworks' bank indebtedness which, as amended, matures in October 2014. The aggregate amount of such indebtedness was approximately $530,000 at May 4, 2014. The Company does not believe that it will be required to perform under the Kremeworks guarantee. | ||||||||||||||
Credit_Facilities_and_Capital_
Credit Facilities and Capital Lease Obligations | 3 Months Ended | ||||||||
4-May-14 | |||||||||
Credit Facilities and Capital Lease Obligations [Abstract] | ' | ||||||||
Credit Facilities and Capital Lease Obligations | ' | ||||||||
Note 7 - Credit Facilities and Capital Lease Obligations | |||||||||
Capital lease obligations consist of the following: | |||||||||
May 4, | February 2, | ||||||||
2014 | 2014 | ||||||||
(In thousands) | |||||||||
Capital lease obligations | $ | 1,946 | $ | 2,003 | |||||
Less: current portion | (313 | ) | (344 | ) | |||||
$ | 1,633 | $ | 1,659 | ||||||
2013 Revolving Credit Facility | |||||||||
On July 12, 2013, the Company entered into a $40 million revolving secured credit facility (the "2013 Revolving Credit Facility") which matures in July 2018. The 2013 Revolving Credit Facility is secured by a first lien on substantially all of the personal property assets of the Company and certain of its domestic subsidiaries. No borrowings were made on the 2013 Revolving Credit Facility on the closing date, and the Company repaid the $21.7 million remaining balance of the 2011 Term Loan and terminated the 2011 Secured Credit Facilities described below. The Company recorded a pretax charge of approximately $967,000 in the second quarter of fiscal 2014 to write off the unamortized deferred debt issuance costs related to the terminated facility and to reflect the termination of a related interest rate hedge. | |||||||||
Interest on borrowings under the 2013 Revolving Credit Facility is payable either at LIBOR or the Base Rate (which is the greatest of the prime rate, the Fed funds rate plus 0.50%, or the one-month LIBOR rate plus 1.00%), in each case plus the Applicable Percentage. The Applicable Percentage for LIBOR loans ranges from 1.25% to 2.15%, and for Base Rate loans ranges from 0.25% to 1.15%, in each case depending on the Company's leverage ratio. As of May 4, 2014, the Applicable Margin was 1.25%. | |||||||||
The 2013 Revolving Credit Facility contains provisions which permit the Company to obtain letters of credit, issuance of which constitutes usage of the lending commitments and reduces the amount available for cash borrowings. At closing, $9.2 million of letters of credit were issued under the 2013 Revolving Credit Facility to replace letters of credit issued under the terminated credit facilities, all of which secure the Company's reimbursement obligations to insurers under the Company's self-insurance programs. | |||||||||
The Company is required to pay a fee equal to the Applicable Percentage for LIBOR-based loans on the outstanding amount of letters of credit. There also is a fee on the unused portion of the 2013 Revolving Credit Facility lending commitment, ranging from 0.15% to 0.35%, depending on the Company's leverage ratio. | |||||||||
The 2013 Revolving Credit Facility requires the Company to meet certain financial tests, including a maximum leverage ratio and a minimum fixed charge coverage ratio. The leverage ratio is required to be not greater than 2.25 to 1.0 and the fixed charge coverage ratio is required to be not less than 1.3 to 1.0. | |||||||||
As of May 4, 2014, the Company's leverage ratio was 0.2 to 1.0 and the fixed charge coverage ratio was 3.8 to 1.0. | |||||||||
The leverage ratio is calculated by dividing total debt as of the end of each fiscal quarter by Consolidated EBITDA for the Reference Period (each consisting of the four most recent fiscal quarters). For this purpose, debt includes not only indebtedness reflected in the consolidated balance sheet, but also, among other things, the amount of undrawn letters of credit, the principal balance of indebtedness of third parties to the extent such indebtedness is guaranteed by the Company, and any amounts reasonably expected to be paid with respect to any other guaranty obligations. The fixed charge coverage ratio is calculated for each Reference Period by dividing (a) the sum of (i) Consolidated EBITDA, plus (ii) Cash Lease Payments, minus (iii) cash income taxes, minus (iv) unfinanced capital expenditures, minus (v) purchases, redemptions, retirements, and cash dividend payments or other distributions in respect of the Company's common stock in excess of certain amounts, and minus (vi) the purchase price of all acquisitions of all or substantially all of the assets of any Krispy Kreme store or franchisee shops by (b) Consolidated Fixed Charges. | |||||||||
"Consolidated EBITDA" is a non-GAAP measure and is defined in the 2013 Revolving Credit Facility to mean, for each Reference Period, generally, consolidated net income or loss, exclusive of unrealized gains and losses on hedging instruments, gains or losses on asset dispositions, and provisions for payments on guarantee obligations, plus the sum of interest expense, income taxes, depreciation, rent expense and lease termination costs, and certain non-cash charges; and minus the sum of non-cash credits, interest income, Cash Lease Payments, and payments on guaranty obligations in excess of $1 million during the Reference Period or $3 million in the aggregate. | |||||||||
"Cash Lease Payments" means the sum of cash paid or required to be paid for obligations under operating leases for real property and equipment (net of sublease income), lease payments on closed stores (but excluding payments in settlement of future obligations under terminated operating leases), and cash payments in settlement of future obligations under terminated operating leases to the extent the aggregate amount of such payments exceeds $1.5 million during a Reference Period or $5.0 million in the aggregate. | |||||||||
"Consolidated Fixed Charges" means the sum of cash interest expense, Cash Lease Payments, and scheduled principal payments of indebtedness. | |||||||||
The operation of the restrictive financial covenants described above may limit the amount the Company may borrow under the 2013 Revolving Credit Facility. The restrictive covenants did not limit the Company's ability to borrow the full $30.8 million of unused credit under the 2013 Revolving Credit Agreement as of May 4, 2014. | |||||||||
The 2013 Revolving Credit Facility also contains covenants which, among other things, generally limit (with certain exceptions): liquidations, mergers, and consolidations; the incurrence of additional indebtedness (including guarantees); the incurrence additional liens; the sale, assignment, lease, conveyance or transfer of assets; certain investments; dividends and stock redemptions or repurchases in excess of certain amounts; transactions with affiliates; engaging in materially different lines of business; certain sale-leaseback transactions; and other activities customarily restricted in such agreements. The 2013 Revolving Credit Facility also prohibits the transfer of cash or other assets to the Parent Company, whether by dividend, loan or otherwise, but provides for exceptions to enable the Parent Company to pay taxes, directors' fees and operating expenses, as well as exceptions to permit dividends in respect of the Company's common stock and stock redemptions and repurchases, to the extent permitted by the 2013 Revolving Credit Facility. | |||||||||
The 2013 Revolving Credit Facility also contains customary events of default including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other indebtedness in excess of $5 million, certain events of bankruptcy and insolvency, judgment defaults in excess of $5 million and the occurrence of a change of control. | |||||||||
Borrowings and issuances of letters of credit under the 2013 Revolving Credit Facility are subject to the satisfaction of usual and customary conditions, including the accuracy of representations and warranties and the absence of defaults. | |||||||||
2011 Secured Credit Facilities | |||||||||
On January 28, 2011, the Company entered into secured credit facilities (the "2011 Secured Credit Facilities"), consisting of a $25 million revolving credit line (the "2011 Revolver") and a $35 million term loan (the "2011 Term Loan"), each of which were scheduled to mature in January 2016. The 2011 Secured Credit Facilities were secured by a first lien on substantially all of the assets of the Company and its domestic subsidiaries. On July 12, 2013, the 2011 Term Loan was paid in full and the 2011 Secured Credit Facilities were terminated. | |||||||||
Interest on borrowings under the 2011 Secured Credit Facilities was payable either at LIBOR or the Base Rate (which is the greatest of the prime rate, the Fed funds rate plus 0.50%, or the one-month LIBOR rate plus 1.00%), in each case plus the Applicable Percentage. The Applicable Percentage for LIBOR loans ranged from 2.25% to 3.00%, and for Base Rate loans ranged from 1.25% to 2.00%, in each case depending on the Company's leverage ratio. | |||||||||
On March 3, 2011, the Company entered into an interest rate derivative contract having an aggregate notional principal amount of $17.5 million. The derivative contract entitled the Company to receive from the counterparty the excess, if any, of the three-month LIBOR rate over 3.00% for each of the calendar quarters in the period beginning April 2012 and ending December 2015. The Company accounted for this derivative contract as a cash flow hedge. The contract was terminated in July 2013 following the retirement in full of the 2011 Term Loan. In the second quarter of fiscal 2014, the $516,000 unrealized loss on the contract previously included in AOCI was reclassified to earnings in the consolidated statement of income because the hedged forecasted transaction (interest on the 2011 Term Loan) would not occur. | |||||||||
The 2011 Revolver contained provisions which permitted the Company to obtain letters of credit, issuance of which constituted usage of the lending commitments and reduced the amount available for cash borrowings. | |||||||||
The Company was required to pay a fee equal to the Applicable Percentage for LIBOR-based loans on the outstanding amount of letters of credit, as well as a fronting fee of 0.125% of the amount of such letter of credit. There also was a fee on the unused portion of the 2011 Revolver lending commitment ranging from 0.35% to 0.65%, depending on the Company's leverage ratio. | |||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
4-May-14 | |
Commitments and Contingencies [Abstract] | ' |
Commitments and Contingencies | ' |
Note 8 - Commitments and Contingencies | |
Except as disclosed below, the Company currently is not a party to any material legal proceedings. | |
Pending Litigation | |
K2 Asia Litigation | |
On April 7, 2009, a Cayman Islands corporation, K2 Asia Ventures, and its owners filed a lawsuit in Forsyth County, North Carolina Superior Court against the Company, its franchisee in the Philippines, and other persons associated with the franchisee. The suit alleges that the Company and the other defendants conspired to deprive the plaintiffs of claimed "exclusive rights" to negotiate franchise and development agreements with prospective franchisees in the Philippines, and seeks unspecified damages. The Company therefore does not know the amount or range of possible loss related to this matter. The Company believes that these allegations are false and intends to vigorously defend against the lawsuit. On July 26, 2013, the Superior Court dismissed the Philippines-based defendants for lack of personal jurisdiction, and the plaintiffs have noticed an appeal of that decision. The Court of Appeals docketed that appeal for consideration without oral argument on June 4, 2014; the Company expects the Court to render a decision in due course. | |
The Company does not believe it is probable that a loss has been incurred with respect to this matter, and accordingly no liability related to it has been reflected in the accompanying financial statements. | |
Other Legal Matters | |
The Company also is engaged in various legal proceedings arising in the normal course of business. The Company maintains insurance policies against certain kinds of such claims and suits, including insurance policies for workers' compensation and personal injury, all of which are subject to deductibles. While the ultimate outcome of these matters could differ from management's expectations, management currently does not believe their resolution will have a material adverse effect on the Company's financial condition or results of operations. | |
Other Commitments and Contingencies | |
The Company's primary bank had issued letters of credit on behalf of the Company totaling $9.2 million at May 4, 2014, substantially all of which secure the Company's reimbursement obligations to insurers under the Company's self-insurance arrangements. | |
Shareholders_Equity
Shareholders' Equity | 3 Months Ended | ||||||
4-May-14 | |||||||
Stockholders' Equity [Abstract] | ' | ||||||
Shareholders' Equity | ' | ||||||
Note 9 - Shareholders' Equity | |||||||
Share-Based Compensation for Employees and Directors | |||||||
The Company measures and recognizes compensation expense for share-based payment ("SBP") awards based on their fair values. The fair value of SBP awards for which employees and directors render the requisite service necessary for the award to vest is recognized over the related vesting period. | |||||||
The aggregate cost of SBP awards charged to earnings for the three months ended May 4, 2014 and May 5, 2013 is set forth in the following table. The Company did not realize any excess tax benefits from the exercise of stock options or the vesting of restricted stock units during any of the periods. | |||||||
Three Months Ended | |||||||
May 4, | May 5, | ||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Costs charged to earnings related to: | |||||||
Stock options | $ | 335 | $ | 217 | |||
Restricted stock units | 832 | 729 | |||||
Total costs | $ | 1,167 | $ | 946 | |||
Costs included in: | |||||||
Direct operating expenses | $ | 703 | $ | 496 | |||
General and administrative expenses | 464 | 450 | |||||
Total costs | $ | 1,167 | $ | 946 | |||
Repurchases of Common Stock | |||||||
On July 11, 2013, the Company's Board of Directors authorized the repurchase of up to $50 million of the Company's common stock. In the first quarter of fiscal 2015, the Board of Directors increased such authorization to $80 million. The authorization has no expiration date. Through May 4, 2014, the Company repurchased 2,622,500 shares under the repurchase authorization at an average price of $18.10 per share, for a total cost of $47.5 million. During the three months ended May 4, 2014, the Company repurchased 1,437,000 shares under the authorization at an average price of $17.49 per share, for a total cost of $25.1 million. Repurchases of approximately $25.5 million of the shares repurchased were settled during the quarter. | |||||||
Impairment_Charges_and_Lease_T
Impairment Charges and Lease Termination Costs | 3 Months Ended | ||||||||
4-May-14 | |||||||||
Impairment Charges and Lease Termination Costs [Abstract] | ' | ||||||||
Impairment Charges and Lease Termination Costs | ' | ||||||||
Note 10 - Impairment Charges and Lease Termination Costs | |||||||||
The components of impairment charges and lease termination costs are as follows: | |||||||||
Three Months Ended | |||||||||
May 4, | May 5, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Impairment of long-lived assets | $ | - | $ | - | |||||
Lease termination costs | 8 | 8 | |||||||
Total impairment charges and lease termination costs | $ | 8 | $ | 8 | |||||
The Company tests long-lived assets for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. These events and changes in circumstances include store closing and refranchising decisions, the effects of changing costs on current results of operations, observed trends in operating results, and evidence of changed circumstances observed as a part of periodic reforecasts of future operating results and as part of the Company's annual budgeting process. When the Company concludes that the carrying value of long-lived assets is not recoverable (based on future projected undiscounted cash flows), the Company records impairment charges to reduce the carrying value of those assets to their estimated fair values. | |||||||||
Lease termination costs represent the estimated fair value of liabilities related to unexpired leases, after reduction by the amount of accrued rent expense, if any, related to the leases, and are recorded when the lease contracts are terminated or, if earlier, the date on which the Company ceases use of the leased property. The fair value of these liabilities are estimated as the excess, if any, of the contractual payments required under the unexpired leases over the current market lease rates for the properties, discounted at a credit-adjusted risk-free rate over the remaining term of the leases. The provision for lease termination costs also includes adjustments to liabilities recorded in prior periods arising from changes in estimated sublease rentals and from settlements with landlords. | |||||||||
The transactions reflected in the accrual for lease termination costs are summarized as follows: | |||||||||
Three Months Ended | |||||||||
May 4, | May 5, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Balance at beginning of period | $ | 178 | $ | 646 | |||||
Provision for lease termination costs: | |||||||||
Adjustments to previously recorded provisions resulting from | |||||||||
settlements with lessors and adjustments of previous estimates | 5 | 2 | |||||||
Accretion of discount | 3 | 6 | |||||||
Total provision | 8 | 8 | |||||||
Payments on unexpired leases, including settlements with | |||||||||
lessors | (19 | ) | (29 | ) | |||||
Balance at end of period | $ | 167 | $ | 625 | |||||
Included in the lease termination accrual at May 4, 2014 was $76,000 expected to be paid within one year. | |||||||||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||
4-May-14 | ||||||||||||
Fair Value Measurements [Abstract] | ' | |||||||||||
Fair-Value Measurements | ' | |||||||||||
Note 11 - Fair Value Measurements | ||||||||||||
The accounting standards for fair value measurements define fair value as the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. | ||||||||||||
The accounting standards for fair value measurements establish a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: | ||||||||||||
Level 1 - Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. | ||||||||||||
Level 2 - Observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. | ||||||||||||
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value measurement of the assets or liabilities. These include certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. | ||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||||||||||||
The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis at May 4, 2014 and February 2, 2014. | ||||||||||||
4-May-14 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(In thousands) | ||||||||||||
Assets: | ||||||||||||
401(k) mirror plan assets | $ | 2,833 | $ | - | $ | - | ||||||
Agricultural commodity futures contracts | 1,089 | - | - | |||||||||
Total assets | $ | 3,922 | $ | - | $ | - | ||||||
2-Feb-14 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(In thousands) | ||||||||||||
Assets: | ||||||||||||
401(k) mirror plan assets | $ | 2,585 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||
Agricultural commodity futures contracts | $ | 313 | $ | - | $ | - | ||||||
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis | ||||||||||||
There were no material nonrecurring fair value measurements recorded during the three months ended May 4, 2014 and May 5, 2013. | ||||||||||||
Fair Values of Financial Instruments at the Balance Sheet Dates | ||||||||||||
The carrying values and approximate fair values of certain financial instruments as of May 4, 2014 and February 2, 2014 were as follows: | ||||||||||||
4-May-14 | 2-Feb-14 | |||||||||||
Carrying | Fair | Carrying | Fair | |||||||||
Value | Value | Value | Value | |||||||||
(In thousands) | ||||||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $ | 43,555 | $ | 43,555 | $ | 55,748 | $ | 55,748 | ||||
Receivables | 27,512 | 27,512 | 25,268 | 25,268 | ||||||||
Receivables from equity method franchisees | 721 | 721 | 675 | 675 | ||||||||
Agricultural commodity futures contracts | 1,089 | 1,089 | - | - | ||||||||
Liabilities: | ||||||||||||
Accounts payable | 16,765 | 16,765 | 16,788 | 16,788 | ||||||||
Agricultural commodity futures contracts | - | - | 313 | 313 | ||||||||
Capital lease obligations (including current portion) | 1,946 | 1,946 | 2,003 | 2,003 | ||||||||
The carrying values of all financial instruments approximate their fair values at May 4, 2014 and February 2, 2014. | ||||||||||||
Derivative_Instruments
Derivative Instruments | 3 Months Ended | |||||||||
4-May-14 | ||||||||||
Derivative Instruments [Abstract] | ' | |||||||||
Derivative Instruments | ' | |||||||||
Note 12 - Derivative Instruments | ||||||||||
The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are commodity price risk and interest rate risk. The Company does not hold or issue derivative instruments for trading purposes. | ||||||||||
The Company is exposed to credit-related losses in the event of non-performance by the counterparties to its derivative instruments. The Company mitigates this risk of nonperformance by dealing with highly rated counterparties. | ||||||||||
Additional disclosure about the fair value of derivative instruments is included in Note 11. | ||||||||||
Commodity Price Risk | ||||||||||
The Company is exposed to the effects of commodity price fluctuations in the cost of ingredients of its products, of which flour, sugar and shortening are the most significant. In order to bring greater stability to the cost of ingredients, from time to time the Company purchases exchange-traded commodity futures contracts, and options on such contracts, for raw materials which are ingredients of its products or which are components of such ingredients, including wheat and soybean oil. The Company is also exposed to the effects of commodity price fluctuations in the cost of gasoline used by its delivery vehicles. To mitigate the risk of fluctuations in the price of its gasoline purchases, the Company may purchase exchange-traded commodity futures contracts and options on such contracts. The difference between the cost, if any, and the fair value of commodity derivatives is reflected in earnings because the Company has not designated any of these instruments as hedges. Gains and losses on these contracts are intended to offset losses and gains on the hedged transactions in an effort to reduce the earnings volatility resulting from fluctuating commodity prices. The settlement of commodity derivative contracts is reported in the consolidated statement of cash flows as a cash flow from operating activities. At May 4, 2014, the Company had commodity derivatives with an aggregate contract volume of 940,000 bushels of wheat. Other than the requirement to meet minimum margin requirements with respect to the commodity derivatives, there are no collateral requirements related to such contracts. | ||||||||||
Interest Rate Risk | ||||||||||
The Company is exposed to market risk from increases in interest rates on any borrowings outstanding under its secured revolving credit facility. As of May 4, 2014, there were no borrowings outstanding under such facility. During the second quarter of fiscal 2014, the Company repaid in full the remaining balance of its term loan. | ||||||||||
On March 3, 2011, the Company entered into an interest rate derivative contract having an aggregate notional principal amount of $17.5 million. The derivative contract entitled the Company to receive from the counterparty the excess, if any, of the three-month LIBOR rate over 3.00% for each of the calendar quarters in the period beginning April 2012 and ending December 2015. The Company accounted for this derivative contract as a cash flow hedge. The contract was terminated in July 2013 following the retirement in full of the 2011 Term Loan. In the second quarter of fiscal 2014, the $516,000 unrealized loss on the contract previously included in AOCI was reclassified to earnings in the consolidated statement of income because the hedged forecasted transaction (interest on the 2011 Term Loan) would not occur. | ||||||||||
Quantitative Summary of Derivative Positions and Their Effect on Results of Operations | ||||||||||
The following table presents the fair values of derivative instruments included in the consolidated balance sheet as of May 4, 2014 and February 2, 2014: | ||||||||||
Asset Derivatives | ||||||||||
Fair Value | ||||||||||
May 4, | February 2, | |||||||||
Derivatives Not Designated as Hedging Instruments | Balance Sheet Location | 2014 | 2014 | |||||||
(In thousands) | ||||||||||
Agricultural commodity futures contracts | Other current assets | $ | 1,089 | $ | - | |||||
Liability Derivatives | ||||||||||
Fair Value | ||||||||||
May 4, | February 2, | |||||||||
Derivatives Not Designated as Hedging Instruments | Balance Sheet Location | 2014 | 2014 | |||||||
(In thousands) | ||||||||||
Agricultural commodity futures contracts | Accrued liabilities | $ | - | $ | 313 | |||||
The effects of derivative instruments on the consolidated statement of income for the three months ended May 4, 2014 and May 5, 2013 were as follows: | ||||||||||
Amount of Derivative Gain or (Loss) | ||||||||||
Recognized in Income | ||||||||||
Three Months Ended | ||||||||||
Location of Derivative Gain or (Loss) | May 4, | May 5, | ||||||||
Derivatives Not Designated as Hedging Instruments | Recognized in Income | 2014 | 2013 | |||||||
(In thousands) | ||||||||||
Agricultural commodity futures contracts | Direct operating expenses | $ | 1,444 | $ | (170 | ) | ||||
Amount of Derivative Gain or (Loss) | ||||||||||
Recognized in Income | ||||||||||
Three Months Ended | ||||||||||
Location of Derivative Gain or (Loss) | May 4, | May 5, | ||||||||
Derivatives Designated as a Cash Flow Hedge | Recognized in Income | 2014 | 2013 | |||||||
(In thousands) | ||||||||||
Interest rate derivative | Interest expense | $ | - | $ | (19 | ) | ||||
Amount of Derivative Gain or (Loss) | ||||||||||
Recognized in OCI | ||||||||||
Three Months Ended | ||||||||||
May 4, | May 5, | |||||||||
Derivatives Designated as a Cash Flow Hedge | Derivative Gain or (Loss) Recognized in OCI | 2014 | 2013 | |||||||
(In thousands) | ||||||||||
Interest rate derivative | Change in fair value of derivative | $ | - | $ | 10 | |||||
Less - income tax effect | - | (4 | ) | |||||||
Net change in amount recognized in OCI | $ | - | $ | 6 |
Acquisitions_and_Divestitures
Acquisitions and Divestitures | 3 Months Ended |
4-May-14 | |
Acquisitions and Divestitures [Abstract] | ' |
Acquisitions and Divestitures | ' |
Note 13 - Acquisitions and Divestitures | |
Acquisition of Krispy Kreme Shops | |
In December 2013, the Company acquired the land, building and doughnut-making equipment at a facility in Illinois. Such facility was being operated as a Krispy Kreme shop pursuant to a management agreement approved by the Company between the facility's former owner and one of the Company's franchisees. The management agreement was terminated in connection with the Company's acquisition of the facility, and was replaced by an operating agreement between the Company and the franchisee. Pursuant to the operating agreement, the Company has agreed to permit the franchisee to continue to operate the facility for its account through June 2014 in exchange for monthly rental payments, and the payment of amounts based on the facility's sales equivalent to the amounts that would be payable to the Company if the facility were subject to a franchise agreement. The operating agreement contemplates that the Company will assume operation of the facility for its own account in July 2014. The aggregate purchase price for the facility was approximately $1.6 million cash, all of which was allocated to property and equipment. | |
Asset Divestitures | |
On July 11, 2013, the Company refranchised three Company-owned stores in the Dallas market to a new franchisee. The aggregate purchase price for the assets was $681,000 cash. The three stores had total sales of approximately $7.0 million in fiscal 2013, of which approximately 45% represented wholesales sales. The franchise agreements with the new franchisee do not include wholesale sales rights. The Company Stores segment recorded a gain of $876,000 on the refranchising transaction, which was included in direct operating expenses in the second quarter of fiscal 2014. The gain includes approximately $462,000 related to the sale of equipment, and approximately $414,000 related to the reversal of accrued rent expense related to a store lease assigned to the franchisee where the Company has been relieved of the primary lease obligation. The Company leased the other two stores, which the Company owns, to the franchisee. In connection with the refranchising, the Company executed a development agreement with the franchisee to develop 15 additional Krispy Kreme locations in the market through fiscal 2019. | |
On February 22, 2013, the Company refranchised three stores in the Kansas/Missouri market to a new franchisee who was a former employee of the Company; the Company closed a fourth store in the market in January 2013 in anticipation of the transaction. The aggregate purchase price of the assets was approximately $1.1 million, evidenced by a 7% promissory note payable in installments equal to 3.5% of the stores' sales beginning in February 2013. The four stores had total sales of approximately $9 million in fiscal 2013. The Company did not record a significant gain or loss on this refranchising transaction. | |
Accounting_Policies_Policies
Accounting Policies (Policies) | 3 Months Ended | |||||||
4-May-14 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
BASIS OF PRESENTATION | ' | |||||||
BASIS OF PRESENTATION. The consolidated financial statements contained herein should be read in conjunction with the Company's 2014 Form 10-K. The accompanying interim consolidated financial statements are presented in accordance with the requirements of Article 10 of Regulation S-X and, accordingly, do not include all the disclosures required by generally accepted accounting principles in the United States of America ("GAAP") with respect to annual financial statements. The interim consolidated financial statements have been prepared in accordance with the Company's accounting practices described in the 2014 Form 10-K, but have not been audited. In management's opinion, the financial statements include all adjustments, which consist only of normal recurring adjustments, necessary for a fair statement of the Company's results of operations for the periods presented. The consolidated balance sheet data as of February 2, 2014 were derived from the Company's audited financial statements but do not include all disclosures required by GAAP. | ||||||||
BASIS OF CONSOLIDATION | ' | |||||||
BASIS OF CONSOLIDATION. The financial statements include the accounts of KKDI and its subsidiaries, the most significant of which is KKDI's principal operating subsidiary, Krispy Kreme Doughnut Corporation. | ||||||||
Investments in entities over which the Company has the ability to exercise significant influence but which the Company does not control, and whose financial statements are not otherwise required to be consolidated, are accounted for using the equity method. | ||||||||
EARNINGS PER SHARE | ' | |||||||
EARNINGS PER SHARE. The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share reflects the additional common shares that would have been outstanding if dilutive potential common shares had been issued, computed using the treasury stock method. Such potential common shares consist of shares issuable upon the exercise of stock options and the vesting of currently unvested restricted stock units. | ||||||||
The following table sets forth amounts used in the computation of basic and diluted earnings per share: | ||||||||
Three Months Ended | ||||||||
May 4, | May 5, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Numerator: net income | $ | 9,656 | $ | 7,999 | ||||
Denominator: | ||||||||
Basic earnings per share - weighted average shares outstanding | 66,522 | 67,012 | ||||||
Effect of dilutive securities: | ||||||||
Stock options | 2,607 | 2,751 | ||||||
Restricted stock units | 617 | 815 | ||||||
Diluted earnings per share - weighted average shares | ||||||||
outstanding plus dilutive potential common shares | 69,746 | 70,578 | ||||||
Stock options with respect to 173,000 and 617,000 shares for the three months ended May 4, 2014 and May 5, 2013, respectively, have been excluded from the computation of the number of shares used to compute diluted earnings per share because their inclusion would be antidilutive. | ||||||||
COMPREHENSIVE INCOME | ' | |||||||
COMPREHENSIVE INCOME. Accounting standards on reporting comprehensive income require that certain items, including foreign currency translation adjustments and mark-to-market adjustments on derivative contracts accounted for as cash flow hedges (which are not reflected in net income) be presented as components of comprehensive income. The cumulative amounts recognized by the Company under these standards are reflected in the consolidated balance sheet as accumulated other comprehensive income, a component of shareholders' equity. | ||||||||
May 4, | May 5, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Accumulated other comprehensive loss: | ||||||||
Unrealized losses on cash flow hedge | $ | - | $ | (542 | ) | |||
Less: deferred income taxes | - | 210 | ||||||
Balance at end of period, net of tax | $ | - | $ | (332 | ) | |||
Recent Accounting Pronouncements | ' | |||||||
Recent Accounting Pronouncements | ||||||||
In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. The guidance is effective for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. The Company will evaluate the effects, if any, adoption of this guidance will have on the Company's consolidated financial statements. | ||||||||
In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. The guidance is effective for annual and interim periods beginning after December 15, 2014, with early adoption permitted. The Company will evaluate the effects, if any, adoption of this guidance will have on the Company's consolidated financial statements. | ||||||||
Accounting_Policies_Tables
Accounting Policies (Tables) | 3 Months Ended | |||||||
4-May-14 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Schedule of Computation of Earnings Per Share | ' | |||||||
Three Months Ended | ||||||||
May 4, | May 5, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Numerator: net income | $ | 9,656 | $ | 7,999 | ||||
Denominator: | ||||||||
Basic earnings per share - weighted average shares outstanding | 66,522 | 67,012 | ||||||
Effect of dilutive securities: | ||||||||
Stock options | 2,607 | 2,751 | ||||||
Restricted stock units | 617 | 815 | ||||||
Diluted earnings per share - weighted average shares | ||||||||
outstanding plus dilutive potential common shares | 69,746 | 70,578 | ||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | ' | |||||||
May 4, | May 5, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Accumulated other comprehensive loss: | ||||||||
Unrealized losses on cash flow hedge | $ | - | $ | (542 | ) | |||
Less: deferred income taxes | - | 210 | ||||||
Balance at end of period, net of tax | $ | - | $ | (332 | ) |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||
4-May-14 | |||||||||
Segment Information [Abstract] | ' | ||||||||
Schedule of Operations by Reporting Segment | ' | ||||||||
Three Months Ended | |||||||||
May 4, | May 5, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Revenues: | |||||||||
Company Stores | $ | 80,448 | $ | 81,921 | |||||
Domestic Franchise | 3,499 | 2,871 | |||||||
International Franchise | 6,581 | 6,445 | |||||||
KK Supply Chain: | |||||||||
Total revenues | 60,312 | 59,811 | |||||||
Less - intersegment sales elimination | (29,260 | ) | (30,423 | ) | |||||
External KK Supply Chain revenues | 31,052 | 29,388 | |||||||
Total revenues | $ | 121,580 | $ | 120,625 | |||||
Operating income: | |||||||||
Company Stores | $ | 4,416 | $ | 5,314 | |||||
Domestic Franchise | 2,156 | 1,439 | |||||||
International Franchise | 4,280 | 4,531 | |||||||
KK Supply Chain | 12,754 | 10,239 | |||||||
Total segment operating income | 23,606 | 21,523 | |||||||
General and administrative expenses | (7,047 | ) | (6,055 | ) | |||||
Corporate depreciation and amortization expense | (371 | ) | (276 | ) | |||||
Impairment charges and lease termination costs | (8 | ) | (8 | ) | |||||
Consolidated operating income | $ | 16,180 | $ | 15,184 | |||||
Depreciation and amortization expense: | |||||||||
Company Stores | $ | 2,584 | $ | 2,354 | |||||
Domestic Franchise | 46 | 14 | |||||||
International Franchise | 1 | 3 | |||||||
KK Supply Chain | 171 | 173 | |||||||
Corporate | 371 | 276 | |||||||
Total depreciation and amortization expense | $ | 3,173 | $ | 2,820 |
Receivables_Tables
Receivables (Tables) | 3 Months Ended | |||||||
4-May-14 | ||||||||
Receivables [Abstract] | ' | |||||||
Schedule of Receivables | ' | |||||||
May 4, | February 2, | |||||||
2014 | 2014 | |||||||
(In thousands) | ||||||||
Receivables: | ||||||||
Wholesale customers | $ | 10,198 | $ | 9,919 | ||||
Unaffiliated franchisees | 11,396 | 10,934 | ||||||
Due from third-party distributors | 4,273 | 3,262 | ||||||
Other receivables | 1,104 | 640 | ||||||
Current portion of notes receivable | 766 | 754 | ||||||
27,737 | 25,509 | |||||||
Less - allowance for doubtful accounts: | ||||||||
Wholesale customers | (175 | ) | (191 | ) | ||||
Unaffiliated franchisees | (50 | ) | (50 | ) | ||||
(225 | ) | (241 | ) | |||||
$ | 27,512 | $ | 25,268 | |||||
Receivables from equity method franchisees (Note 6): | ||||||||
Trade | $ | 721 | $ | 675 | ||||
May 4, | February 2, | |||||||
2014 | 2014 | |||||||
(In thousands) | ||||||||
Notes receivable: | ||||||||
Notes receivable from franchisees | $ | 3,738 | $ | 3,980 | ||||
Less - portion due within one year included in receivables | (766 | ) | (754 | ) | ||||
Less - allowance for doubtful accounts | (51 | ) | (54 | ) | ||||
$ | 2,921 | $ | 3,172 | |||||
Schedule of Allowance for Doubtful Receivables | ' | |||||||
Three Months Ended | ||||||||
May 4, | May 5, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Allowance for doubtful accounts related to receivables: | ||||||||
Balance at beginning of period | $ | 241 | $ | 615 | ||||
Provision for doubtful accounts | (13 | ) | 69 | |||||
Net recoveries (chargeoffs) | (3 | ) | 22 | |||||
Balance at end of period | $ | 225 | $ | 706 | ||||
Allowance for doubtful accounts related to receivables from equity method franchisees: | ||||||||
Balance at beginning of period | $ | - | $ | - | ||||
Provision for doubtful accounts | (16 | ) | (17 | ) | ||||
Net recoveries (chargeoffs) | 16 | 17 | ||||||
Balance at end of period | $ | - | $ | - | ||||
Three Months Ended | ||||||||
May 4, | May 5, | |||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Balance at beginning of period | $ | 54 | $ | 62 | ||||
Provision for doubtful accounts | (3 | ) | - | |||||
Balance at end of period | $ | 51 | $ | 62 |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | ||||||
4-May-14 | |||||||
Inventories [Abstract] | ' | ||||||
Schedule of Inventories | ' | ||||||
May 4, | February 2, | ||||||
2014 | 2014 | ||||||
(In thousands) | |||||||
Raw materials | $ | 6,661 | $ | 6,200 | |||
Work in progress | 140 | 114 | |||||
Finished goods and purchased merchandise | 9,888 | 10,436 | |||||
$ | 16,689 | $ | 16,750 |
Investment_in_Franchisees_Tabl
Investment in Franchisees (Tables) | 3 Months Ended | |||||||||||||
4-May-14 | ||||||||||||||
Investment in Franchisees [Abstract] | ' | |||||||||||||
Schedule of Investments in Franchisees | ' | |||||||||||||
4-May-14 | ||||||||||||||
Company | Investment | |||||||||||||
Ownership | and | Loan | ||||||||||||
Percentage | Advances | Receivables | Guarantees | |||||||||||
(Dollars in thousands) | ||||||||||||||
Kremeworks, LLC | 25 | % | $ | 900 | $ | 329 | $ | 106 | ||||||
Kremeworks Canada, LP | 24.5 | % | - | 36 | - | |||||||||
Krispy Kreme of South Florida, LLC | 35.3 | % | - | 356 | - | |||||||||
900 | 721 | $ | 106 | |||||||||||
Less: reserves and allowances | (900 | ) | - | |||||||||||
$ | - | $ | 721 | |||||||||||
2-Feb-14 | ||||||||||||||
Company | Investment | |||||||||||||
Ownership | and | Loan | ||||||||||||
Percentage | Advances | Receivables | Guarantees | |||||||||||
(Dollars in thousands) | ||||||||||||||
Kremeworks, LLC | 25.0 | % | $ | 900 | $ | 280 | $ | 140 | ||||||
Kremeworks Canada, LP | 24.5 | % | - | 19 | - | |||||||||
Krispy Kreme of South Florida, LLC | 35.3 | % | - | 376 | - | |||||||||
900 | 675 | $ | 140 | |||||||||||
Less: reserves and allowances | (900 | ) | - | |||||||||||
$ | - | $ | 675 |
Credit_Facilities_and_Capital_1
Credit Facilities and Capital Lease Obligations (Tables) | 3 Months Ended | ||||||||
4-May-14 | |||||||||
Credit Facilities and Capital Lease Obligations [Abstract] | ' | ||||||||
Schedule of Capital Lease Obligations | ' | ||||||||
May 4, | February 2, | ||||||||
2014 | 2014 | ||||||||
(In thousands) | |||||||||
Capital lease obligations | $ | 1,946 | $ | 2,003 | |||||
Less: current portion | (313 | ) | (344 | ) | |||||
$ | 1,633 | $ | 1,659 |
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 3 Months Ended | ||||||
4-May-14 | |||||||
Stockholders' Equity [Abstract] | ' | ||||||
Schedule of Share-Based Compensation | ' | ||||||
Three Months Ended | |||||||
May 4, | May 5, | ||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Costs charged to earnings related to: | |||||||
Stock options | $ | 335 | $ | 217 | |||
Restricted stock units | 832 | 729 | |||||
Total costs | $ | 1,167 | $ | 946 | |||
Costs included in: | |||||||
Direct operating expenses | $ | 703 | $ | 496 | |||
General and administrative expenses | 464 | 450 | |||||
Total costs | $ | 1,167 | $ | 946 |
Impairment_Charges_and_Lease_T1
Impairment Charges and Lease Termination Costs (Tables) | 3 Months Ended | ||||||||
4-May-14 | |||||||||
Other Income and Expenses [Abstract] | ' | ||||||||
Schedule of Impairment Charges and Lease Termination Costs | ' | ||||||||
Three Months Ended | |||||||||
May 4, | May 5, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Impairment of long-lived assets | $ | - | $ | - | |||||
Lease termination costs | 8 | 8 | |||||||
Total impairment charges and lease termination costs | $ | 8 | $ | 8 | |||||
Schedule of Lease Termination Liability | ' | ||||||||
Three Months Ended | |||||||||
May 4, | May 5, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Balance at beginning of period | $ | 178 | $ | 646 | |||||
Provision for lease termination costs: | |||||||||
Adjustments to previously recorded provisions resulting from | |||||||||
settlements with lessors and adjustments of previous estimates | 5 | 2 | |||||||
Accretion of discount | 3 | 6 | |||||||
Total provision | 8 | 8 | |||||||
Payments on unexpired leases, including settlements with | |||||||||
lessors | (19 | ) | (29 | ) | |||||
Balance at end of period | $ | 167 | $ | 625 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||
4-May-14 | ||||||||||||
Fair Value Measurements [Abstract] | ' | |||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | ' | |||||||||||
4-May-14 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(In thousands) | ||||||||||||
Assets: | ||||||||||||
401(k) mirror plan assets | $ | 2,833 | $ | - | $ | - | ||||||
Agricultural commodity futures contracts | 1,089 | - | - | |||||||||
Total assets | $ | 3,922 | $ | - | $ | - | ||||||
2-Feb-14 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(In thousands) | ||||||||||||
Assets: | ||||||||||||
401(k) mirror plan assets | $ | 2,585 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||
Agricultural commodity futures contracts | $ | 313 | $ | - | $ | - | ||||||
Schedule of Fair Values of Financial Instruments | ' | |||||||||||
4-May-14 | 2-Feb-14 | |||||||||||
Carrying | Fair | Carrying | Fair | |||||||||
Value | Value | Value | Value | |||||||||
(In thousands) | ||||||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $ | 43,555 | $ | 43,555 | $ | 55,748 | $ | 55,748 | ||||
Receivables | 27,512 | 27,512 | 25,268 | 25,268 | ||||||||
Receivables from equity method franchisees | 721 | 721 | 675 | 675 | ||||||||
Agricultural commodity futures contracts | 1,089 | 1,089 | - | - | ||||||||
Liabilities: | ||||||||||||
Accounts payable | 16,765 | 16,765 | 16,788 | 16,788 | ||||||||
Agricultural commodity futures contracts | - | - | 313 | 313 | ||||||||
Capital lease obligations (including current portion) | 1,946 | 1,946 | 2,003 | 2,003 |
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 3 Months Ended | |||||||||
4-May-14 | ||||||||||
Derivative Instruments [Abstract] | ' | |||||||||
Schedule of Derivative Fair Value | ' | |||||||||
Asset Derivatives | ||||||||||
Fair Value | ||||||||||
May 4, | February 2, | |||||||||
Derivatives Not Designated as Hedging Instruments | Balance Sheet Location | 2014 | 2014 | |||||||
(In thousands) | ||||||||||
Agricultural commodity futures contracts | Other current assets | $ | 1,089 | $ | - | |||||
Liability Derivatives | ||||||||||
Fair Value | ||||||||||
May 4, | February 2, | |||||||||
Derivatives Not Designated as Hedging Instruments | Balance Sheet Location | 2014 | 2014 | |||||||
(In thousands) | ||||||||||
Agricultural commodity futures contracts | Accrued liabilities | $ | - | $ | 313 | |||||
Schedule of Derivative Gain (Loss) | ' | |||||||||
Amount of Derivative Gain or (Loss) | ||||||||||
Recognized in Income | ||||||||||
Three Months Ended | ||||||||||
Location of Derivative Gain or (Loss) | May 4, | May 5, | ||||||||
Derivatives Not Designated as Hedging Instruments | Recognized in Income | 2014 | 2013 | |||||||
(In thousands) | ||||||||||
Agricultural commodity futures contracts | Direct operating expenses | $ | 1,444 | $ | (170 | ) | ||||
Amount of Derivative Gain or (Loss) | ||||||||||
Recognized in Income | ||||||||||
Three Months Ended | ||||||||||
Location of Derivative Gain or (Loss) | May 4, | May 5, | ||||||||
Derivatives Designated as a Cash Flow Hedge | Recognized in Income | 2014 | 2013 | |||||||
(In thousands) | ||||||||||
Interest rate derivative | Interest expense | $ | - | $ | (19 | ) | ||||
Amount of Derivative Gain or (Loss) | ||||||||||
Recognized in OCI | ||||||||||
Three Months Ended | ||||||||||
May 4, | May 5, | |||||||||
Derivatives Designated as a Cash Flow Hedge | Derivative Gain or (Loss) Recognized in OCI | 2014 | 2013 | |||||||
(In thousands) | ||||||||||
Interest rate derivative | Change in fair value of derivative | $ | - | $ | 10 | |||||
Less - income tax effect | - | (4 | ) | |||||||
Net change in amount recognized in OCI | $ | - | $ | 6 |
Accounting_Policies_Schedule_o
Accounting Policies (Schedule of Computation of Earnings Per Share) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | 4-May-14 | 5-May-13 |
Accounting Policies [Abstract] | ' | ' |
Net income | $9,656 | $7,999 |
Basic earnings per share - weighted average shares outstanding | 66,522 | 67,012 |
Diluted earnings per share - weighted average shares outstanding plus dilutive potential common shares | 69,746 | 70,578 |
Stock Options [Member] | ' | ' |
Effect of dilutive securities: | ' | ' |
Share-based payment arrangement | 2,607 | 2,751 |
Restricted Stock Units [Member] | ' | ' |
Effect of dilutive securities: | ' | ' |
Share-based payment arrangement | 617 | 815 |
Accounting_Policies_Narrative_
Accounting Policies (Narrative) (Details) | 3 Months Ended | |
4-May-14 | 5-May-13 | |
Accounting Policies [Abstract] | ' | ' |
Antidilutive securities | 173,000 | 617,000 |
Accounting_Policies_Schedule_o1
Accounting Policies (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) | 4-May-14 | Feb. 02, 2014 | 4-May-14 | 5-May-13 |
In Thousands, unless otherwise specified | Cash flow hedge [Member] | Cash flow hedge [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' |
Unrealized losses on cash flow hedge | ' | ' | ' | ($542) |
Less: deferred income taxes | ' | ' | ' | 210 |
Balance at the end of the period, net of tax | ' | ' | ' | ($332) |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | 4-May-14 | 5-May-13 |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | $121,580 | $120,625 |
General and administrative expenses | -7,047 | -6,055 |
Depreciation and amortization expense | -3,173 | -2,820 |
Impairment charges and lease termination costs | -8 | -8 |
Operating income | 16,180 | 15,184 |
Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Operating income | 23,606 | 21,523 |
Corporate [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
General and administrative expenses | -7,047 | -6,055 |
Depreciation and amortization expense | -371 | -276 |
Impairment charges and lease termination costs | -8 | -8 |
Company Stores [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | 80,448 | 81,921 |
Depreciation and amortization expense | -2,584 | -2,354 |
Operating income | 4,416 | 5,314 |
Domestic Franchise [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | 3,499 | 2,871 |
Depreciation and amortization expense | -46 | -14 |
Operating income | 2,156 | 1,439 |
International Franchise [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | 6,581 | 6,445 |
Depreciation and amortization expense | -1 | -3 |
Operating income | 4,280 | 4,531 |
KK Supply Chain [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | 31,052 | 29,388 |
Depreciation and amortization expense | -171 | -173 |
Operating income | 12,754 | 10,239 |
KK Supply Chain [Member] | Intersegment Elimination [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | 29,260 | 30,423 |
KK Supply Chain [Member] | Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | $60,312 | $59,811 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 4-May-14 | Feb. 02, 2014 |
In Millions, unless otherwise specified | ||
Income Taxes [Abstract] | ' | ' |
Valuation allowance | $2.70 | $2.70 |
Receivables_Components_of_Rece
Receivables (Components of Receivables) (Details) (USD $) | 4-May-14 | Feb. 02, 2014 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Other receivables | $1,104 | $640 |
Current portion of notes receivable | 766 | 754 |
Receivables | 27,737 | 25,509 |
Allowance for doubtful accounts | -225 | -241 |
Receivables, net | 27,512 | 25,268 |
Receivables from equity method franchisees | 721 | 675 |
Wholesale Customers [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Trade receivables | 10,198 | 9,919 |
Allowance for doubtful accounts | -175 | -191 |
Unaffiliated Franchisees [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Trade receivables | 11,396 | 10,934 |
Allowance for doubtful accounts | -50 | -50 |
Third Party Distributors [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Trade receivables | $4,273 | $3,262 |
Receivables_Allowance_for_Doub
Receivables (Allowance for Doubtful Accounts) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | 4-May-14 | 5-May-13 |
Allowance for doubtful accounts | ' | ' |
Balance at beginning of period | $241 | ' |
Provision for doubtful accounts | -32 | 52 |
Balance at end of period | 225 | ' |
Trade Accounts Receivable [Member] | ' | ' |
Allowance for doubtful accounts | ' | ' |
Balance at beginning of period | 241 | 615 |
Provision for doubtful accounts | -13 | 69 |
Net recoveries (chargeoffs) | -3 | 22 |
Balance at end of period | 225 | 706 |
Equity Method Franchisees Receivables [Member] | ' | ' |
Allowance for doubtful accounts | ' | ' |
Balance at beginning of period | ' | ' |
Provision for doubtful accounts | -16 | -17 |
Net recoveries (chargeoffs) | 16 | 17 |
Balance at end of period | ' | ' |
Notes Receivable [Member] | ' | ' |
Allowance for doubtful accounts | ' | ' |
Balance at beginning of period | 54 | 62 |
Provision for doubtful accounts | -3 | ' |
Balance at end of period | $51 | $62 |
Receivables_Other_Notes_Receiv
Receivables (Other Notes Receivables) (Details) (USD $) | 4-May-14 | Feb. 02, 2014 |
In Thousands, unless otherwise specified | ||
Receivables [Abstract] | ' | ' |
Notes receivable from franchisees | $3,738 | $3,980 |
Less - portion due within one year included in receivables | -766 | -754 |
Less - allowance for doubtful accounts | -51 | -54 |
Non-current portion of notes receivable | $2,921 | $3,172 |
Receivables_Narrative_Details
Receivables (Narrative) (Details) (USD $) | 3 Months Ended | ||
4-May-14 | 5-May-13 | Feb. 02, 2014 | |
Receivables [Abstract] | ' | ' | ' |
Unrecognized franchise revenue | $2,900,000 | ' | $2,900,000 |
Collection of previously unrecognized franchise revenue | 8,000 | 42,000 | ' |
Krispy Kreme of South Florida, LLC [Member] | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' |
Unrecognized notes receivable | 1,600,000 | ' | ' |
Due from notes receivable | 1,300,000 | ' | 1,500,000 |
Collection of notes receivable | $170,000 | ' | ' |
Inventories_Details
Inventories (Details) (USD $) | 4-May-14 | Feb. 02, 2014 |
In Thousands, unless otherwise specified | ||
Inventories [Abstract] | ' | ' |
Raw materials | $6,661 | $6,200 |
Work in progress | 140 | 114 |
Finished goods and purchased merchandise | 9,888 | 10,436 |
Inventories | $16,689 | $16,750 |
Investments_in_Franchisees_Fin
Investments in Franchisees (Financial Exposure Related to Franchisee Investments) (Details) (USD $) | 4-May-14 | Feb. 02, 2014 |
In Thousands, unless otherwise specified | ||
Schedule of Equity Method Investments [Line Items] | ' | ' |
Investment and advances | $900 | $900 |
Reserves and allowances | -900 | -900 |
Investment and advances | ' | ' |
Receivables | 721 | 675 |
Reserves and allowances | ' | ' |
Receivables | 721 | 675 |
Loan guarantees | 106 | 140 |
Kremeworks, LLC [Member] | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' |
Ownership percentage | 25.00% | 25.00% |
Investment and advances | 900 | 900 |
Receivables | 329 | 280 |
Loan guarantees | 106 | 140 |
Kremeworks Canada, LP [Member] | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' |
Ownership percentage | 24.50% | 24.50% |
Investment and advances | ' | ' |
Receivables | 36 | 19 |
Loan guarantees | ' | ' |
Krispy Kreme of South Florida, LLC [Member] | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' |
Ownership percentage | 35.30% | 35.30% |
Investment and advances | ' | ' |
Receivables | 356 | 376 |
Loan guarantees | ' | ' |
Investments_in_Franchisees_Nar
Investments in Franchisees (Narrative) (Details) (USD $) | 3 Months Ended | |
4-May-14 | Feb. 02, 2014 | |
Schedule of Equity Method Investments [Line Items] | ' | ' |
Number of franchise investments | 3 | ' |
Kremeworks, LLC [Member] | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' |
Ownership percentage | 25.00% | 25.00% |
Maximum exposure | 20.00% | ' |
Underlying debt of guaranteed obligations | $530,000 | ' |
Maturity date | 1-Oct-14 | ' |
Credit_Facilities_and_Capital_2
Credit Facilities and Capital Lease Obligations (Schedule of Capital Lease Obligations) (Details) (USD $) | 4-May-14 | Feb. 02, 2014 |
In Thousands, unless otherwise specified | ||
Capital lease obligations: | ' | ' |
Capital lease obligations | $1,946 | $2,003 |
Less: current portion | -313 | -344 |
Capital lease obligations, less current portion | $1,633 | $1,659 |
Credit_Facilities_and_Capital_3
Credit Facilities and Capital Lease Obligations (2013 Revolving Credit Facility) (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | 4-May-14 |
Credit Facilities and Capital Lease Obligations [Abstract] | ' |
Letters of credit outstanding | $9.20 |
2013 Revolving Credit Facility [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Issuance date | 12-Jul-13 |
Maturity date | 12-Jul-18 |
Maximum borrowing capacity | 40 |
Available borrowing capacity | 30.8 |
Spread over variable rate | 1.25% |
Leverage ratio | 0.2 |
Fixed charge coverage ratio | 3.8 |
Default triggering event | 5 |
Covenant calculation, reference period threshold for guaranty obligations | 1 |
Covenant calculation, aggregate threshold for guaranty obligations | 3 |
Covenant calculation, reference period threshold for lease termination obligations | 1.5 |
Covenant calculation, aggregate threshold for lease termination obligations | $5 |
2013 Revolving Credit Facility [Member] | Base Rate [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Description of variable rate basis | 'greatest of the prime rate, the Fed funds rate plus 0.50%, or the one-month LIBOR rate plus 1.00% |
2013 Revolving Credit Facility [Member] | Minimum [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Fee on unused portion | 0.15% |
Fixed charge coverage ratio | 1.3 |
2013 Revolving Credit Facility [Member] | Minimum [Member] | LIBOR [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Spread over variable rate | 1.25% |
2013 Revolving Credit Facility [Member] | Minimum [Member] | Base Rate [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Spread over variable rate | 0.25% |
2013 Revolving Credit Facility [Member] | Maximum [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Fee on unused portion | 0.35% |
Leverage ratio | 2.25 |
2013 Revolving Credit Facility [Member] | Maximum [Member] | LIBOR [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Spread over variable rate | 2.15% |
2013 Revolving Credit Facility [Member] | Maximum [Member] | Base Rate [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Spread over variable rate | 1.15% |
Credit_Facilities_and_Capital_4
Credit Facilities and Capital Lease Obligations (2011 Secured Credit Facilities) (Details) (USD $) | 3 Months Ended |
Aug. 04, 2013 | |
Interest Rate Contract [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Inception date | 3-Mar-11 |
Effective date | 1-Apr-12 |
Maturity date | 31-Dec-15 |
Termination date | 12-Jul-13 |
Notional amount | $17,500,000 |
Loss on cash flow hedge reclassified from AOCI to earnings | 516,000 |
LIBOR [Member] | Interest Rate Contract [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Spread over variable rate | 3.00% |
2011 Secured Credit Facilities [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Issuance date | 28-Jan-11 |
Maturity date | 1-Jan-16 |
Retirement date | 12-Jul-13 |
Repayment of secured debt | 21,700,000 |
Loss on retirement of debt | 967,000 |
Fronting fee | 0.13% |
2011 Secured Credit Facilities [Member] | Base Rate [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Description of variable rate basis | 'greatest of the prime rate, the Fed funds rate plus 0.50%, or the one-month LIBOR rate plus 1.00% |
2011 Secured Credit Facilities [Member] | Minimum [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Fee on unused portion | 0.35% |
2011 Secured Credit Facilities [Member] | Minimum [Member] | LIBOR [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Spread over variable rate | 2.25% |
2011 Secured Credit Facilities [Member] | Minimum [Member] | Base Rate [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Spread over variable rate | 1.25% |
2011 Secured Credit Facilities [Member] | Maximum [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Fee on unused portion | 0.65% |
2011 Secured Credit Facilities [Member] | Maximum [Member] | LIBOR [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Spread over variable rate | 3.00% |
2011 Secured Credit Facilities [Member] | Maximum [Member] | Base Rate [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Spread over variable rate | 2.00% |
2011 Secured Credit Facilities [Member] | Revolving Credit Facility [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Maximum borrowing capacity | 25,000,000 |
2011 Secured Credit Facilities [Member] | Secured Debt [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Maximum borrowing capacity | $35,000,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | 4-May-14 |
Commitments and Contingencies [Abstract] | ' |
Letters of credit outstanding | 9.2 |
K2 Asia Litigation [Member] | ' |
Loss Contingencies [Line Items] | ' |
Lawsuit filing date | 'April 7, 2009 |
Plaintiff | 'K2 Asia Ventures |
Actions taken by plaintiff | 'On April 7, 2009, a Cayman Islands corporation, K2 Asia Ventures, and its owners filed a lawsuit in Forsyth County, North Carolina Superior Court against the Company, its franchisee in the Philippines, and other persons associated with the franchisee. The suit alleges that the Company and the other defendants conspired to deprive the plaintiffs of claimed "exclusive rights" to negotiate franchise and development agreements with prospective franchisees in the Philippines, and seeks unspecified damages. The Company therefore does not know the amount or range of possible loss related to this matter. The Company believes that these allegations are false and intends to vigorously defend against the lawsuit. On July 26, 2013, the Superior Court dismissed the Philippines-based defendants for lack of personal jurisdiction, and the plaintiffs have noticed an appeal of that decision. The Court of Appeals docketed that appeal for consideration without oral argument on June 4, 2014. |
Shareholders_Equity_Allocation
Shareholders' Equity (Allocation of Share-based Compensation) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | 4-May-14 | 5-May-13 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Share-based compensation | $1,167 | $946 |
Direct Operating Expense [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Share-based compensation | 703 | 496 |
General and Administration Expenses [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Share-based compensation | 464 | 450 |
Stock Options [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Share-based compensation | 335 | 217 |
Restricted Stock Units [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Share-based compensation | $832 | $729 |
Shareholders_Equity_Repurchase
Shareholders' Equity (Repurchases of Common Stock) (Details) (USD $) | 3 Months Ended | 7 Months Ended | 10 Months Ended | |
4-May-14 | 5-May-13 | Feb. 02, 2014 | 4-May-14 | |
Stockholders' Equity [Abstract] | ' | ' | ' | ' |
Authorization amount for repurchases of common stock | $80,000,000 | ' | $50,000,000 | ' |
Repurchase of common shares, shares | 1,437,000 | ' | ' | 2,622,500 |
Repurchase of common shares | 25,136,000 | ' | ' | 47,500,000 |
Repurchase of common shares, average price per share | $17.49 | ' | ' | $18.10 |
Repurchase of common shares settled during the period | $25,477,000 | ' | ' | ' |
Impairment_Charges_and_Lease_T2
Impairment Charges and Lease Termination Costs (Schedule of Impairment Charges and Lease Termination Costs) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | 4-May-14 | 5-May-13 |
Other Income and Expenses [Abstract] | ' | ' |
Impairment of long-lived assets | ' | ' |
Lease termination costs | 8 | 8 |
Total impairment charges and lease termination costs | $8 | $8 |
Impairment_Charges_and_Lease_T3
Impairment Charges and Lease Termination Costs (Schedule of Lease Termination Liability) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | 4-May-14 | 5-May-13 |
Lease Termination Costs [Roll Forward] | ' | ' |
Balance at beginning of period | $178 | $646 |
Adjustments to previously recorded provisions resulting from settlements with lessors and adjustments of previous estimates | 5 | 2 |
Accretion of discount | 3 | 6 |
Total provision | 8 | 8 |
Payments on unexpired leases, including settlements with lessors | -19 | -29 |
Balance at end of period | $167 | $625 |
Impairment_Charges_and_Lease_T4
Impairment Charges and Lease Termination Costs (Narrative) (Details) (USD $) | 4-May-14 |
Impairment Charges and Lease Termination Costs [Abstract] | ' |
Current lease termination accrual | $76,000 |
Fair_Value_Measurements_Assets
Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) (Recurring [Member], USD $) | 4-May-14 | Feb. 02, 2014 |
In Thousands, unless otherwise specified | ||
Level 1 [Member] | ' | ' |
Assets: | ' | ' |
401(k) mirror plan assets | $2,833 | $2,585 |
Agricultural commodity futures contracts | 1,089 | ' |
Total assets | 3,922 | ' |
Liabilities: | ' | ' |
Agricultural commodity futures contracts | ' | 313 |
Level 2 [Member] | ' | ' |
Assets: | ' | ' |
401(k) mirror plan assets | ' | ' |
Agricultural commodity futures contracts | ' | ' |
Total assets | ' | ' |
Liabilities: | ' | ' |
Agricultural commodity futures contracts | ' | ' |
Level 3 [Member] | ' | ' |
Assets: | ' | ' |
401(k) mirror plan assets | ' | ' |
Agricultural commodity futures contracts | ' | ' |
Total assets | ' | ' |
Liabilities: | ' | ' |
Agricultural commodity futures contracts | ' | ' |
Fair_Value_Measurements_Fair_V
Fair Value Measurements (Fair Values of Financial Instruments at Balance Sheet Dates) (Details) (USD $) | 4-May-14 | Feb. 02, 2014 |
In Thousands, unless otherwise specified | ||
Carrying Value [Member] | ' | ' |
Assets: | ' | ' |
Cash and cash equivalents | $43,555 | $55,748 |
Receivables | 27,512 | 22,268 |
Receivables from equity method franchisees | 721 | 675 |
Agricultural commodity futures contracts | 1,089 | ' |
Liabilities: | ' | ' |
Accounts payable | 16,765 | 16,788 |
Agricultural commodity futures contracts | ' | 313 |
Capital lease obligations (including current portion) | 1,946 | 2,003 |
Fair Value [Member] | ' | ' |
Assets: | ' | ' |
Cash and cash equivalents | 43,555 | 55,748 |
Receivables | 27,512 | 25,268 |
Receivables from equity method franchisees | 721 | 675 |
Agricultural commodity futures contracts | 1,089 | ' |
Liabilities: | ' | ' |
Accounts payable | 16,765 | 16,788 |
Agricultural commodity futures contracts | ' | 313 |
Capital lease obligations (including current portion) | $1,946 | $2,003 |
Derivative_Narrative_Details
Derivative (Narrative) (Details) (USD $) | 3 Months Ended | ||
4-May-14 | Aug. 04, 2013 | Aug. 04, 2013 | |
Agricultural Commodity Futures Contracts [Member] | Interest Rate Contract [Member] | Interest Rate Contract [Member] | |
bu | LIBOR [Member] | ||
Derivative [Line Items] | ' | ' | ' |
Aggregate contract volume | 940,000 | ' | ' |
Inception date | ' | 3-Mar-11 | ' |
Effective date | ' | 1-Apr-12 | ' |
Maturity date | ' | 31-Dec-15 | ' |
Termination date | ' | 12-Jul-13 | ' |
Notional amount | ' | $17,500,000 | ' |
Spread over variable rate | ' | ' | 3.00% |
Loss on cash flow hedge reclassified from AOCI to earnings | ' | $516,000 | ' |
Derivative_Instruments_Fair_Va
Derivative Instruments (Fair Value by Balance Sheet Location) (Details) (Agricultural Commodity Futures Contracts [Member], Not Designated as Hedging Instrument [Member], USD $) | 4-May-14 | Feb. 02, 2014 |
In Thousands, unless otherwise specified | ||
Other Current Assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Agricultural commodity futures contracts | $1,089 | ' |
Accrued Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Agricultural commodity futures contracts | ' | $313 |
Derivative_Instruments_Effect_
Derivative Instruments (Effect of Derivative Instuments by Income Statement Location) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | 4-May-14 | 5-May-13 |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Change in fair value of derivative | ' | $10 |
Less - income tax effect | ' | -4 |
Net change in amount recognized in OCI | ' | 6 |
Direct Operating Expense [Member] | Agricultural Commodity Futures Contracts [Member] | Not Designated as Hedging Instrument [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Gain (loss) recognized in income | 1,444 | -170 |
Interest Expense [Member] | Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Gain (loss) recognized in income | ' | ($19) |
Acquisitions_and_Divestitures_
Acquisitions and Divestitures (Details) (USD $) | 3 Months Ended | ||||
4-May-14 | 5-May-13 | Feb. 02, 2014 | Aug. 04, 2013 | 5-May-13 | |
Illinois Store Acquisition [Member] | Dallas Divestiture [Member] | Kansas and Missouri Divestiture [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' | ' |
Effective date of sale | ' | ' | ' | 11-Jul-13 | 22-Feb-13 |
Number of stores sold | ' | ' | ' | 3 | 3 |
Proceeds from refranchising | ' | ' | ' | $681,000 | ' |
Aggregate purchase price | ' | ' | ' | ' | 1,100,000 |
Notes receivable | ' | ' | ' | ' | 1,100,000 |
Percent of sales used to calculate principal payment on note receivable | ' | ' | ' | ' | 3.50% |
Notes receivable, interest rate | ' | ' | ' | ' | 7.00% |
Net sales attributable to refranchised stores | ' | ' | ' | 7,000,000 | 9,000,000 |
Wholesale percentage of net sales | ' | ' | ' | 45.00% | ' |
Gain on refranchising transaction | ' | ' | ' | 876,000 | ' |
Gain (loss) on sale of equipment | -42,000 | 147,000 | ' | 462,000 | ' |
Gain on reversal of accrued rent expense | ' | ' | ' | 414,000 | ' |
Leased stores to franchisee | ' | ' | ' | 2 | ' |
Future store locations required | ' | ' | ' | 15 | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Effective date of business acquisition | ' | ' | 1-Dec-13 | ' | ' |
Acquisitions of stores from franchisees | ' | ' | $1,600,000 | ' | ' |