Krispy Kreme Doughnuts (KKD) 8-K Reaffirms Fiscal 2016 Adjusted EPS Outlook of $0.79 to $0.85

KRISPY KREME REPORTS FINANCIAL RESULTS FOR THE
FOURTH QUARTER AND FISCAL YEAR ENDED FEBRUARY 1, 2015

Reaffirms Fiscal 2016 Adjusted EPS Outlook of $0.79 to $0.85

Winston-Salem, NC – March 11, 2015 –Krispy Kreme Doughnuts, Inc. (NYSE: KKD) (the “Company”) today reported financial results for the fourth quarter and fiscal year ended February 1, 2015, and reaffirmed its adjusted EPS outlook for fiscal 2016 (ending January 31, 2016).

Fourth Quarter Fiscal 2015 Highlights Compared to the Year-Ago Period:

● Revenues increased 11.2% to $125.4 million from $112.7 million

● Systemwide store count rose 6.7% in the quarter to 987 Company and franchise shops worldwide

● Systemwide domestic same store sales rose 3.6%, including a 1.7% gain at Company shops; constant-currency international franchise same store sales declined 2.6%

● Adjusted net income rose 36.3% to $11.4 million ($0.17 per share) from $8.3 million ($0.12 per share); adjusted net income and adjusted earnings per share are non-GAAP measures (see the reconciliation of GAAP to adjusted earnings accompanying this release)

● Net income was $6.5 million ($0.10 per share) compared to $14.8 million ($0.21 per share) last year; net income in the prior year quarter included unusual income tax credits totaling $10.3 million ($0.14 per share)

● Cash provided by operating activities was $17.2 million compared to $15.9 million last year

Fiscal 2015 Highlights Compared to Last Year:

● Revenues increased 6.5% to $490.3 million from $460.3 million

● Systemwide store count rose 19.2% during the year to 987 Company and franchise shops worldwide

● Systemwide domestic same store sales rose 3.1%, including a 1.2% gain at Company shops; constant-currency international franchise same store sales declined 2.6%

● Adjusted net income rose 11.6% to $48.3 million ($0.70 per share) from $43.2 million ($0.61 per share)

● Net income was $30.1 million ($0.44 per share) compared to $34.3 million ($0.48 per share) last year; net income in the prior year reflected unusual income tax credits totaling $10.3 million ($0.14 per share)

● Cash provided by operating activities was $62.9 million compared to $56.9 million in fiscal 2014

● The Company repurchased 2.2 million of its common shares for $39.2 million; $43.4 million remains under the current share repurchase authorization

President and Chief Executive Officer Tony Thompson commented: “We are pleased with the Company’s continuing momentum in fiscal 2015. This past year, we increased adjusted net income by nearly 12%, significantly outpacing our almost 7% revenue growth, and completed our sixth consecutive year of positive same-store sales at Company stores. Systemwide unit count increased over 19%, positioning Krispy Kreme as one of the fastest growing chains within the QSR industry. We are growing again in a disciplined and sustainable manner with a variety of shop formats designed to meet individual market needs. We continue to refine and improve our model to better meet consumer needs and deliver outstanding financial returns.”

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Thompson continued: “In the fourth quarter, we scaled back our promotional incentive activities, which had a positive effect on Company shop operating margins. We also achieved two significant development milestones – eight Company store openings in a single quarter, which is more than we have opened annually in any each year since 2005, and a record 57 international franchise store openings in 13 countries.”

Thompson concluded: “Realizing our vision for the Krispy Kreme brand is predicated on four key business drivers: accelerating global growth; leveraging technology; enhancing our core menu; and maximizing brand awareness. We are executing across all of these areas with the underlying goals of spreading the joy of Krispy Kreme and positioning ourselves for further value creation for our shareholders. Fiscal 2016 began with another important milestone, our 1,000^thstore worldwide celebration, which is a great way to start what we believe will be another year of sustainable growth at Krispy Kreme.”

Results for the Quarter Ended February 1, 2015

Consolidated Results

For the quarter ended February 1, 2015, revenues rose 11.2% to $125.4 million.

Direct operating expenses increased to $102.3 million from $93.3 million, but as a percentage of total revenues declined to 81.6% from 82.8%.

General and administrative expenses were $9.2 million (7.4% of revenues) compared to $7.7 million (6.8% of revenues) in the year-ago period. General and administrative expenses in fiscal 2015 include a $2.5 million charge for the settlement of amounts due under an employment agreement with the Company’s former chief executive officer. A reduction in share-based compensation costs due principally to a change in the timing of equity awards was partially offset by higher provisions for incentive compensation.

Operating income rose 5.4% to $9.6 million ($12.0 million exclusive of the $2.5 million contract settlement charge in fiscal 2015, or 32.6% over the fourth quarter last year).

Adjusted net income rose 36.3% to $11.4 million ($0.17 per share) compared to $8.3 million ($0.12 per share), in the fourth quarter last year. Adjusted net income and adjusted EPS are non-GAAP measures (see the reconciliation of GAAP to adjusted earnings accompanying this release).

Segment Results

For the quarter ended February 1, 2015, Company Stores revenues increased 12.7% to $83.7 million, while same store sales rose 1.7%. The Company Stores segment posted operating income of $1.4 million compared to $1.6 million last year. The Company opened eight new factory shops in the fourth quarter. Preopening and other start-up costs related to new shops, including shops not yet opened, were approximately $1.3 million in the fourth quarter of fiscal 2015 compared to approximately $150,000 in the fourth quarter last year. The segment’s results for the fourth quarter of fiscal 2015 also reflect charges of approximately $1.0 million for mark-to-market adjustments on wholesale gasoline futures contracts entered into in the fourth quarter to hedge the cost of fuel purchases for fiscal 2016 and 2017. The Company has not designated these derivative contacts as cash flow hedges and, accordingly, changes in their fair values are reflected in earnings as they occur. While a decline in gasoline prices resulted in the fourth quarter mark-to-market charge, significantly lower gasoline prices are expected to benefit fiscal 2016 operating costs and are reflected in management’s earnings outlook.

Domestic Franchise revenues increased 7.6% to $3.4 million, while same store sales rose 4.7%. Domestic Franchise segment operating income was $2.1 million compared to $2.0 million last year.

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International Franchise revenues increased 10.6% to $7.6 million, driven by higher royalties and a net 53 shop openings in the quarter. Sales by international franchise shops rose 9.0% to $128 million (16.2% excluding the effects of foreign exchange rate changes), while constant currency same store sales fell 2.6%. International Franchise segment operating income was $5.6 million compared to $4.8 million in the fourth quarter last year.

KK Supply Chain revenues (including sales to Company stores) increased 13.2% to $63.3 million. KK Supply Chain generated operating income of $11.1 million compared to $8.6 million in the fourth quarter last year.

Fiscal 2016 Outlook

Management is reaffirming its outlook for adjusted net income for fiscal 2016 of between $55 million and $59 million ($0.79 to $0.85 per share), compared to $48.3 million ($0.70 per share) in fiscal 2015.

The Company’s outlook reflects, among other things, the following assumptions:

● 10to15 net new Company shops

● 10to20 net new domestic franchise shops

● 95to110 net new international franchise shops

● Capital expenditures of between $35 million and $45 million including ongoing investments in technology

● Continued growth in domestic same store sales

● A reduction in agricultural commodity and fuel costs compared to fiscal 2015

● Negative effects of a stronger U.S. dollar

Conference Call

The Company will host a conference call to review fiscal 2015 fourth quarter and annual results, as well as management’s outlook for fiscal 2016, this afternoon at 4:30 p.m. (ET). A live webcast of the conference call will be available at www.krispykreme.com. The conference call also can be accessed over the phone by dialing (877) 407-0784 or, for international callers, by dialing (201) 689-8560. An archived replay of the call will be available shortly after its conclusion by dialing (877) 870-5176, or (858) 384-5517 for international callers; the passcode is 13601290. The audio replay will be available through March 18, 2015. A transcript of the conference call will be available on the Company’s website.

About Krispy Kreme

Krispy Kreme is a leading branded specialty retailer and wholesaler of premium quality sweet treats and complementary products, including its signature Original Glazed^® doughnut. Headquartered in Winston-Salem, N.C., the Company has offered the highest quality doughnuts and great tasting coffee since it was founded in 1937. Today, there are over 980 Krispy Kreme shops in more than 20 countries around the world. Connect with Krispy Kreme at www.krispykreme.com.

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Information contained in this press release, other than historical information, should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s beliefs, assumptions and expectations of our future economic performance, considering the information currently available to management. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements. The words “believe,” “may,” “forecast,” “could,” “will,” “should,” “would,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “strive” or similar words, or the negative of these words, identify forward-looking statements. Factors that could contribute to these differences include, but are not limited to: the quality of Company and franchise store operations; our ability, and our dependence on the ability of our franchisees, to execute on our and their business plans; our relationships with our franchisees; our ability to implement our domestic and international growth strategy; our ability to implement our domestic small shop operating model; political, economic, currency and other risks associated with our international operations; the price and availability of raw materials needed to produce doughnut mixes and other ingredients, and the price of motor fuel; our relationships with wholesale customers; our ability to protect our trademarks and trade secrets; changes in customer preferences and perceptions; risks related to the food service industry, including food safety and protection of personal information; compliance with government regulations relating to food products and franchising; increased costs or other effects of new government regulations relating to healthcare benefits; and risks associated with implementation of new technology platforms. These and other risks and uncertainties, which are described in more detail in the Company’s most recent Annual Report on Form 10-K and other reports and statements filed with the United States Securities and Exchange Commission, are difficult to predict, involve uncertainties that may materially affect actual results and may be beyond the Company’s control, and could cause actual results, performance or achievements to be materially different from those expressed or implied by any of these forward-looking statements. New factors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on the Company. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made. 

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KRISPY KREME DOUGHNUTS, INC.

CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

	Three Months Ended						Year Ended
	February 1,			February 2,			February 1,			February 2,
	2015			2014			2015			2014
	(In thousands, except per share amounts)
Revenues	$	125,367		$	112,746		$	490,334		$	460,331
Operating expenses:
Direct operating expenses (exclusive of depreciation and
amortization expense shown below)		102,323			93,302			399,744			376,132
General and administrative expenses		9,221			7,709			28,558			25,149
Depreciation and amortization expense		3,354			2,834			12,840			11,106
Impairment charges and lease termination costs		905			(169	)		955			1,374
Operating income		9,564			9,070			48,237			46,570
Interest income		109			144			406			616
Interest expense		(321	)		(135	)		(856	)		(1,057	)
Loss on retirement of debt		-			-			-			(967	)
Equity in losses of equity method franchisees		53			(47	)		(118	)		(221	)
Other non-operating income and (expense), net		136			96			547			119
Income before income taxes		9,541			9,128			48,216			45,060
Provision for income taxes		2,995			(5,632	)		18,156			10,804
Net income	$	6,546		$	14,760		$	30,060		$	34,256
Earnings per common share:
Basic	$	0.10		$	0.22		$	0.45		$	0.51
Diluted	$	0.10		$	0.21		$	0.44		$	0.48
Weighted average shares outstanding:
Basic		66,503			67,222			66,360			67,261
Diluted		68,590			71,045			68,929			71,054

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KRISPY KREME DOUGHNUTS, INC.

CONSOLIDATED BALANCE SHEET(Unaudited)

	February 1,			February 2,
	2015			2014
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	50,971		$	55,748
Receivables		27,799			25,268
Receivables from equity method franchisees		782			675
Inventories		18,194			16,750
Deferred income taxes		23,245			23,847
Other current assets		6,856			5,199
Total current assets		127,847			127,487
Property and equipment		115,758			92,823
Investments in equity method franchisees		-			-
Goodwill and other intangible assets		30,070			24,097
Deferred income taxes		68,278			83,461
Other assets		10,760			10,678
Total assets	$	352,713		$	338,546
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of lease obligations	$	333		$	344
Accounts payable		17,095			16,788
Accrued liabilities		32,530			29,276
Total current liabilities		49,958			46,408
Lease obligations, less current portion		9,354			1,659
Other long-term obligations and deferred credits		25,615			25,386
Commitments and contingencies
SHAREHOLDERS’ EQUITY:
Preferred stock, no par value		-			-
Common stock, no par value		310,768			338,135
Accumulated other comprehensive income		-			-
Accumulated deficit		(42,982	)		(73,042	)
Total shareholders’ equity		267,786			265,093
Total liabilities and shareholders’ equity	$	352,713		$	338,546

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KRISPY KREME DOUGHNUTS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

	Year Ended
	February 1,			February 2,
	2015			2014
	(In thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
Net income	$	30,060		$	34,256
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		12,840			11,106
Deferred income taxes		15,729			8,014
Impairment charges		901			-
Accrued rent expense		789			784
Loss on retirement of debt		-			967
(Gain) loss on disposal of property and equipment		238			(1,879	)
(Gain) on refranchising		(1,247	)		(876	)
Share-based compensation		4,466			6,452
Provision for doubtful accounts		90			(345	)
Amortization of deferred financing costs		108			285
Equity in losses of equity method franchisees		118			221
Unrealized losses on commodity derivative positions		1,498			298
Other		23			27
Change in assets and liabilities:
Receivables		(3,962	)		556
Inventories		(1,343	)		(4,553	)
Other current and non-current assets		(2,358	)		1,917
Accounts payable and accrued liabilities		4,867			(1,913	)
Other long-term obligations and deferred credits		57			1,595
Net cash provided by operating activities		62,874			56,912
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(31,447	)		(23,419	)
Proceeds from disposals of property and equipment		2,341			1,719
Proceeds from refranchising		1,847			681
Acquisition of stores from franchisees		(7,152	)		(1,603	)
Other investing activities		766			456
Net cash used for investing activities		(33,645	)		(22,166	)
CASH FLOW FROM FINANCING ACTIVITIES:
Repayment of long-term debt and lease obligations		(384	)		(24,658	)
Deferred financing costs		-			(132	)
Proceeds from exercise of stock options		10,259			2,517
Repurchase of common shares		(43,881	)		(23,057	)
Net cash used for financing activities		(34,006	)		(45,330	)
Net decrease in cash and cash equivalents		(4,777	)		(10,584	)
Cash and cash equivalents at beginning of year		55,748			66,332
Cash and cash equivalents at end of year	$	50,971		$	55,748
Supplemental schedule of non-cash investing and financing activities:
Assets acquired under leasing arrangements	$	8,045		$	918

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KRISPY KREME DOUGHNUTS, INC.

NON-GAAP FINANCIAL INFORMATION
(Unaudited)

As of February 1, 2015, the Company had net deferred income tax assets of approximately $92 million, of which approximately $44 million related to federal and state net operating loss carryovers. The Company’s federal net operating loss carryovers totaled approximately $159 million.

The Company has reported cumulative pretax income of over $160 million since the beginning of fiscal 2010, and the Company also has generated significant taxable income during this period. However, because of the Company’s utilization of its federal and state net operating loss carryovers and other deferred tax assets, the Company’s cash payments for income taxes have been relatively insignificant during this period. As a result, the provision for income tax expense has substantially exceeded cash payments for income taxes. Until such time as the Company’s net operating loss carryovers are exhausted or expire, GAAP income tax expense is expected to continue to substantially exceed the amount of cash income taxes payable by the Company.

The Company recorded a pretax charge of approximately $2.5 million in the fourth quarter of fiscal 2015 for the settlement of amounts due under an employment agreement with the Company’s former chief executive officer. That officer, who was most recently the Company’s Executive Chairman, transitioned from that role to the non-employee role of non-executive chairman of the board of directors in late January 2015. In the second quarter of fiscal 2014, the Company recorded a charge of $1.0 million related to the retirement of its secured credit facilities, consisting principally of the writeoff of deferred financing costs related to the Company’s term loan, which was retired in full, and the termination of an interest rate hedge related to the term loan. Charges of this nature are not expected to recur on a regular basis.

The following non-GAAP financial information and related reconciliation of adjusted net income to GAAP net income are provided to assist the reader in understanding the effects of the above facts and transactions on the Company’s results of operations. In addition, the non-GAAP financial information is intended to illustrate the material difference between the Company’s income tax expense and income taxes currently payable. These non-GAAP performance measures are consistent with other measurements made by management in the operation of the business which do not consider income taxes except to the extent to which those taxes currently are payable, for example, capital allocation decisions and incentive compensation measurements that are made on a pretax basis.

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	Management's				Historical Periods
	Earnings Outlook				Three Months Ended					Year Ended
	Year Ending January 31, 2016				February 1,		February 2,			February 1,		February 2,
	From		To		2015		2014			2015		2014
	(In thousands, except per share amounts)
Net income, as reported	$	34,800	$	37,200	$	6,546	$	14,760		$	30,060	$	34,256
Charge for settlement of employment
contract		-		-		2,464		-			2,464		-
Loss on retirement of debt		-		-		-		-			-		967
Provision for deferred income taxes		20,200		21,800		2,348		(6,424	)		15,729		8,014
Adjusted net income	$	55,000	$	59,000	$	11,358	$	8,336		$	48,253	$	43,237
Adjusted earnings per common share:
Basic	$	0.82	$	0.88	$	0.17	$	0.12		$	0.73	$	0.64
Diluted	$	0.79	$	0.85	$	0.17	$	0.12		$	0.70	$	0.61
Weighted average shares outstanding:
Basic		66,800		66,800		66,503		67,222			66,360		67,261
Diluted		69,500		69,500		68,590		71,045			68,929		71,054

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KRISPY KREME DOUGHNUTS, INC.

SEGMENT INFORMATION
(Unaudited)

	Three Months Ended						Year Ended
	February 1,			February 2,			February 1,			February 2,
	2015			2014			2015			2014
	(In thousands)
Revenues:
Company Stores:
On-premises sales:
Retail sales	$	42,235		$	34,590		$	151,956		$	136,921
Fundraising sales		2,829			2,782			15,406			14,591
Total on-premises sales		45,064			37,372			167,362			151,512
Wholesale sales		38,680			36,957			157,944			155,313
Company Stores revenues		83,744			74,329			325,306			306,825
Domestic Franchise		3,381			3,143			13,450			11,839
International Franchise		7,631			6,900			28,598			25,607
KK Supply Chain:
Total revenues		63,292			55,913			244,688			231,229
Less – intersegment sales elimination		(32,681	)		(27,539	)		(121,708	)		(115,169	)
External KK Supply Chain revenues		30,611			28,374			122,980			116,060
Total revenues	$	125,367		$	112,746		$	490,334		$	460,331
Operating income:
Company Stores	$	1,377		$	1,631		$	9,287		$	11,334
Domestic Franchise		2,058			1,962			8,103			8,083
International Franchise		5,587			4,758			20,026			17,977
KK Supply Chain		11,051			8,617			41,823			36,953
Total segment operating income		20,073			16,968			79,239			74,347
General and administrative expenses		(9,221	)		(7,709	)		(28,558	)		(25,149	)
Corporate depreciation and amortization expense		(383	)		(358	)		(1,489	)		(1,254	)
Impairment charges and lease termination costs		(905	)		169			(955	)		(1,374	)
Consolidated operating income	$	9,564		$	9,070		$	48,237		$	46,570
Depreciation and amortization expense:
Company Stores	$	2,782		$	2,256		$	10,534		$	9,039
Domestic Franchise		14			47			135			119
International Franchise		1			1			5			7
KK Supply Chain		174			172			677			687
Corporate		383			358			1,489			1,254
Total depreciation and amortization expense	$	3,354		$	2,834		$	12,840		$	11,106

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KRISPY KREME DOUGHNUTS, INC.

SELECTED OPERATING STATISTICS
(Unaudited)

	February 1,	November 2,	August 3,	May 4,
	2015	2014	2014	2014
Systemwide Store Count:
Company stores	111	104	103	97
Domestic Franchise stores	167	165	160	163
International Franchise stores	709	656	621	595
	987	925	884	855

	Three Months Ended								Year Ended
	February 1,				February 2,				February 1,				February 2,
	2015				2014				2015				2014
Systemwide sales (in thousands):(1)
Company stores	$	83,037			$	73,732			$	322,521			$	303,973
Domestic Franchise stores		83,496				80,537				337,072				317,864
International Franchise stores		127,550				116,974				476,364				438,027
International Franchise stores, in constant dollars(2)		127,550				109,729				476,364				428,950
Change in same store sales (on-premises sales only):(3)
Company stores		1.7		%		2.4		%		1.2		%		7.4		%
Domestic Franchise stores		4.7				7.0				4.2				10.4
International Franchise stores		(8.1	)			(6.5	)			(4.6	)			(8.0	)
International Franchise stores, in constant dollars(2)		(2.6	)			(0.8	)			(2.6	)			(3.3	)
Company Stores - change in same store sales attributable to:
Retail menu pricing		1.7		%		3.7		%		1.9		%		3.4		%
Guest check average (exclusive of menu of pricing)		1.7				(1.7	)			(0.9	)			(0.9	)
Customer count		(1.2	)			0.4				0.1				4.7
Fundraising pricing		0.5				-				0.6				-
Other		(1.0	)			-				(0.5	)			0.2
Total		1.7		%		2.4		%		1.2		%		7.4		%
Change in Same Store Customer Count - Company stores
(retail sales only)(3)		(1.3	)	%		0.5		%		0.1		%		5.3		%
Average guest check - Company stores (retail sales only)	$	7.66			$	7.32			$	7.56			$	7.47
Company Stores - store operating weeks		1,415				1,215				5,284				4,864
Wholesale Metrics - Company Stores:(4)
Grocers/mass merchants:
Change in average weekly number of doors		3.5		%		(6.4	)	%		1.5		%		(6.2	)	%
Change in average weekly sales per door		-				3.4				(0.3	)			9.7
Convenience stores:
Change in average weekly number of doors		0.2		%		(0.1	)	%		2.5		%		(0.3	)	%
Change in average weekly sales per door		0.8				(2.8	)			(2.0	)			3.2

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(1)	Systemwide sales, a non-GAAP financial measure, include sales by both Company and franchise Krispy Kreme stores. The Company believes systemwide sales data are useful in assessing consumer demand for the Company’s products, the overall success of the Krispy Kreme brand and, ultimately, the performance of the Company. All of the Company’s royalty revenues are computed as percentages of sales made by the Company’s domestic and international franchisees, and substantially all of KK Supply Chain’s external sales of doughnut mixes and other ingredients ultimately are determined by demand for the Company’s products at franchise stores. Accordingly, sales by the Company’s franchisees have a direct effect on the Company’s royalty and KK Supply Chain revenues, and therefore on the Company’s profitability. The Company’s consolidated financial statements appearing elsewhere herein include sales by Company stores, sales to franchisees by the KK Supply Chain business segment, and royalties and fees received from franchise stores based on their sales, but exclude sales by franchise stores to their customers.
(2)	Computed on a pro forma basis assuming the average rate of exchange between the U.S. dollar and each of the foreign currencies in which the Company’s international franchisees conduct business had been the same in the comparable prior year period.
(3)	The change in “same store sales” represents the aggregate on-premises sales (including fundraising sales) during the current year period for all stores which had been open for more than 78 consecutive weeks during the current year period (but only to the extent such sales occurred in the 79th or later week of each store’s operation) divided by the aggregate on-premises sales of such stores for the comparable weeks in the preceding year period. Once a store has been open for at least 79 consecutive weeks, its sales are included in the computation of same stores sales for all subsequent periods. In the event a store is closed temporarily (for example, for remodeling) and has no sales during one or more weeks, such store’s sales for the comparable weeks during the earlier or subsequent period are excluded from the same store sales computation. The change in “same store customer count” is similarly computed, but is based upon the number of retail transactions reported in the Company’s point-of-sale system.
(4)	For Company wholesale sales, “average weekly number of doors” represents the average number of customer locations to which product deliveries are made during a week by Company Stores, and “average weekly sales per door” represents the average weekly sales to each such location by Company Stores.

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KRISPY KREME DOUGHNUTS, INC.

STORE COUNT
(Unaudited)

	Number of Company Stores
	Factory
	Stores		Hot Shops		Fresh Shops	Total
Three months ended February 1, 2015
November 2, 2014	83		20		1	104
Opened	8		-		-	8
Closed	-		(1	)	-	(1	)
Change in store type	1		(1	)	-	-
February 1, 2015	92		18		1	111
Year ended February 1, 2015
February 2, 2014	76		18		1	95
Opened	13		-		-	13
Closed	-		(1	)	-	(1	)
Change in store type	2		(2	)	-	-
Transferred to Domestic Franchise	(1	)	-		-	(1	)
Transferred from Domestic Franchise	2		3		-	5
February 1, 2015	92		18		1	111
Three months ended February 2, 2014
November 3, 2013	75		18		1	94
Opened	1		-		-	1
Closed	-		-		-	-
February 2, 2014	76		18		1	95
Year ended February 2, 2014
February 3, 2013	76		20		1	97
Opened	6		-		-	6
Closed	(1	)	(1	)	-	(2	)
Change in store type	1		(1	)	-	-
Transferred to Domestic Franchise	(6	)	-		-	(6	)
February 2, 2014	76		18		1	95

12

KRISPY KREME DOUGHNUTS, INC.

STORE COUNT
(Unaudited)

	Number of Domestic Franchise Stores
	Factory
	Stores		Hot Shops		Fresh Shops		Total
Three months ended February 1, 2015
November 2, 2014	113		39		13		165
Opened	3		-		-		3
Closed	-		-		(1	)	(1	)
February 1, 2015	116		39		12		167
Year ended February 1, 2015
February 2, 2014	107		37		15		159
Opened	10		5		-		15
Closed	-		-		(3	)	(3	)
Transferred from Company Stores	1		-		-		1
Transferred to Company Stores	(2	)	(3	)	-		(5	)
February 1, 2015	116		39		12		167
Three months ended February 2, 2014
November 3, 2013	106		35		14		155
Opened	1		2		1		4
Closed	-		-		-		-
February 2, 2014	107		37		15		159
Year ended February 2, 2014
February 3, 2013	99		29		14		142
Opened	2		8		1		11
Closed	-		-		-		-
Transferred from Company stores	6		-		-		6
February 2, 2014	107		37		15		159

13

KRISPY KREME DOUGHNUTS, INC.

STORE COUNT
(Unaudited)

	Number of International Franchise Stores
	Factory
	Stores		Hot Shops		Fresh Shops		Kiosks		Total
Three months ended February 1, 2015
November 2, 2014	133		9		348		166		656
Opened	3		1		32		21		57
Closed	-		-		(2	)	(2	)	(4	)
Change in store type	(3	)	(1	)	3		1		-
February 1, 2015	133		9		381		186		709
Year ended February 1, 2015
February 2, 2014	125		9		296		144		574
Opened	15		1		89		46		151
Closed	(4	)	-		(7	)	(5	)	(16	)
Change in store type	(3	)	(1	)	3		1		-
February 1, 2015	133		9		381		186		709
Three months ended February 2, 2014
November 3, 2013	123		9		287		144		563
Opened	6		-		15		5		26
Closed	(3	)	-		(7	)	(5	)	(15	)
Change in store type	(1	)	-		1		-		-
February 2, 2014	125		9		296		144		574
Year ended February 2, 2014
February 3, 2013	120		9		257		123		509
Opened	15		-		53		28		96
Closed	(8	)	-		(17	)	(6	)	(31	)
Change in store type	(2	)	-		3		(1	)	-
February 2, 2014	125		9		296		144		574

Krispy Kreme Contacts:
Media:	Investor Relations:
Lafeea Watson	Anita K. Booe
(336) 726-8878	(336) 703-6902
lwatson@krispykreme.com	abooe@krispykreme.com

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