Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 19, 2016 | Jul. 14, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 19, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | DPZ | |
Entity Registrant Name | DOMINOS PIZZA INC | |
Entity Central Index Key | 1,286,681 | |
Current Fiscal Year End Date | --01-03 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 48,257,672 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 19, 2016 | Jan. 03, 2016 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 22,305 | $ 133,449 | |
Restricted cash and cash equivalents | 107,435 | 180,940 | |
Accounts receivable | 132,533 | 131,582 | |
Inventories | 36,473 | 36,861 | |
Prepaid expenses and other | 42,678 | 20,646 | |
Advertising fund assets, restricted | 109,025 | 99,159 | |
Total current assets | 450,449 | 602,637 | |
Property, plant and equipment: | |||
Land and buildings | 29,063 | 29,064 | |
Leasehold and other improvements | 115,172 | 111,071 | |
Equipment | 195,359 | 186,405 | |
Construction in progress | 6,141 | 9,633 | |
Property, plant and equipment, Gross, Total | 345,735 | 336,173 | |
Accumulated depreciation and amortization | (213,763) | (204,283) | |
Property, plant and equipment, net | 131,972 | 131,890 | |
Other assets: | |||
Goodwill | 16,097 | 16,097 | |
Capitalized software | 34,426 | 28,505 | |
Other assets | 15,697 | 14,851 | |
Deferred income taxes | 3,637 | 5,865 | |
Total other assets | 69,857 | 65,318 | |
Total assets | 652,278 | 799,845 | |
Current liabilities: | |||
Current portion of long-term debt | 48,870 | 59,333 | |
Accounts payable | 84,902 | 106,927 | |
Dividends payable | 18,815 | 557 | |
Insurance reserves | 18,495 | 17,597 | |
Advertising fund liabilities | 109,025 | 99,159 | |
Other accrued liabilities | 76,620 | 92,410 | |
Total current liabilities | 356,727 | 375,983 | |
Long-term liabilities: | |||
Long-term debt, less current portion | 2,165,177 | 2,181,460 | |
Insurance reserves | 24,642 | 23,314 | |
Other accrued liabilities | 20,486 | 19,339 | |
Total long-term liabilities | 2,210,305 | 2,224,113 | |
Stockholders' deficit: | |||
Common stock | 483 | 498 | |
Additional paid-in capital | 93 | 6,942 | |
Retained deficit | (1,912,755) | (1,804,143) | |
Accumulated other comprehensive loss | (2,575) | (3,548) | |
Total stockholders' deficit | (1,914,754) | (1,800,251) | |
Total liabilities and stockholders' deficit | $ 652,278 | $ 799,845 | |
[1] | The balance sheet at January 3, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 19, 2016 | Jun. 14, 2015 | Jun. 19, 2016 | Jun. 14, 2015 | |
Revenues: | ||||
Revenue | $ 547,341 | $ 488,622 | $ 1,086,517 | $ 990,649 |
Cost of sales: | ||||
Cost of sales | 375,503 | 335,950 | 747,462 | 680,911 |
Operating margin | 171,838 | 152,672 | 339,055 | 309,738 |
General and administrative | 68,137 | 60,441 | 136,641 | 123,254 |
Income from operations | 103,701 | 92,231 | 202,414 | 186,484 |
Interest income | 197 | 57 | 473 | 139 |
Interest expense | (25,206) | (19,010) | (51,353) | (39,163) |
Income before provision for income taxes | 78,692 | 73,278 | 151,534 | 147,460 |
Provision for income taxes | 29,431 | 27,369 | 56,822 | 55,262 |
Net income | $ 49,261 | $ 45,909 | $ 94,712 | $ 92,198 |
Earnings per share: | ||||
Common stock - basic | $ 1 | $ 0.84 | $ 1.92 | $ 1.68 |
Common stock - diluted | 0.98 | 0.81 | 1.86 | 1.62 |
Dividends declared per share | $ 0.38 | $ 0.31 | $ 0.76 | $ 0.62 |
Domestic Stores [Member] | Domestic Company Owned Stores [Member] | ||||
Revenues: | ||||
Revenue | $ 97,834 | $ 88,794 | $ 194,278 | $ 181,169 |
Cost of sales: | ||||
Cost of sales | 73,795 | 66,082 | 146,550 | 134,234 |
Domestic Stores [Member] | Domestic Franchise [Member] | ||||
Revenues: | ||||
Revenue | 69,675 | 60,827 | 137,826 | 122,601 |
Supply Chain [Member] | ||||
Revenues: | ||||
Revenue | 339,259 | 302,903 | 674,954 | 614,559 |
Cost of sales: | ||||
Cost of sales | 301,708 | 269,868 | 600,912 | 546,677 |
International Franchise [Member] | ||||
Revenues: | ||||
Revenue | $ 40,573 | $ 36,098 | $ 79,459 | $ 72,320 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 19, 2016 | Jun. 14, 2015 | Jun. 19, 2016 | Jun. 14, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 49,261 | $ 45,909 | $ 94,712 | $ 92,198 |
Other comprehensive income (loss), before tax: | ||||
Currency translation adjustment | 456 | 77 | 1,113 | (733) |
Tax attributes of items in other comprehensive income (loss): | ||||
Currency translation adjustment | (68) | 84 | (140) | 465 |
Other comprehensive income (loss), net of tax | 388 | 161 | 973 | (268) |
Comprehensive income | $ 49,649 | $ 46,070 | $ 95,685 | $ 91,930 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 19, 2016 | Jun. 14, 2015 | ||
Cash flows from operating activities: | |||
Net income | $ 94,712 | $ 92,198 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 16,756 | 15,028 | |
Loss (gain) on sale/disposal of assets | 247 | (272) | |
Amortization of debt issuance costs | 3,133 | 2,550 | |
Provision (benefit) for deferred income taxes | 1,775 | (1,964) | |
Non-cash compensation expense | 8,617 | 7,776 | |
Tax impact from equity-based compensation | (34,852) | (7,556) | |
Other | 16 | (725) | |
Changes in operating assets and liabilities | (20,951) | (3,441) | |
Net cash provided by operating activities | 69,453 | 103,594 | |
Cash flows from investing activities: | |||
Capital expenditures | (25,045) | (20,238) | |
Proceeds from sale of assets | 2,765 | 8,785 | |
Changes in restricted cash | 73,505 | 24,137 | |
Other | (904) | 1,449 | |
Net cash provided by investing activities | 50,321 | 14,133 | |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 10,000 | ||
Repayments of long-term debt and capital lease obligations | (39,878) | (141) | |
Proceeds from exercise of stock options | 10,848 | 2,067 | |
Tax impact from equity-based compensation | 34,852 | 7,556 | |
Purchases of common stock | (224,139) | (97,634) | |
Tax payments for restricted stock upon vesting | (3,036) | (3,737) | |
Payments of common stock dividends and equivalents | (19,099) | (31,039) | |
Net cash used in financing activities | (230,452) | (122,928) | |
Effect of exchange rate changes on cash and cash equivalents | (466) | 237 | |
Change in cash and cash equivalents | (111,144) | (4,964) | |
Cash and cash equivalents, at beginning of period | 133,449 | [1] | 30,855 |
Cash and cash equivalents, at end of period | $ 22,305 | $ 25,891 | |
[1] | The balance sheet at January 3, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 19, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes for the fiscal year ended January 3, 2016 included in our annual report on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair statement have been included. Operating results for the fiscal quarter ended June 19, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending January 1, 2017. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 19, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | 2. Segment Information The following table summarizes revenues, income from operations and earnings before interest, taxes, depreciation, amortization and other, which is the measure by which the Company allocates resources to its segments and which we refer to as Segment Income, for each of our reportable segments. Fiscal Quarters Ended June 19, 2016 and June 14, 2015 Domestic Supply International Intersegment Other Total Revenues 2016 $ 167,509 $ 367,858 $ 40,573 $ (28,599 ) $ — $ 547,341 2015 149,621 327,374 36,098 (24,471 ) — 488,622 Income from operations 2016 $ 58,731 $ 29,299 $ 32,204 N/A $ (16,533 ) $ 103,701 2015 52,723 26,012 29,569 N/A (16,073 ) 92,231 Segment Income 2016 $ 60,936 $ 31,682 $ 32,238 N/A $ (8,739 ) $ 116,117 2015 54,279 28,315 29,509 N/A (9,303 ) 102,800 Two Fiscal Quarters Ended June 19, 2016 and June 14, 2015 Domestic Supply International Intersegment Other Total Revenues 2016 $ 332,104 $ 730,377 $ 79,459 $ (55,423 ) $ — $ 1,086,517 2015 303,770 665,130 72,320 (50,571 ) — 990,649 Income from operations 2016 $ 117,150 $ 57,644 $ 61,945 N/A $ (34,325 ) $ 202,414 2015 108,250 53,207 58,284 N/A (33,257 ) 186,484 Segment Income 2016 $ 121,405 $ 62,354 $ 62,010 N/A $ (17,735 ) $ 228,034 2015 111,552 57,771 58,258 N/A (18,565 ) 209,016 The following table reconciles Total Segment Income to consolidated income before provision for income taxes. Fiscal Quarter Ended Two Fiscal Quarters Ended June 19, June 14, June 19, June 14, Total Segment Income $ 116,117 $ 102,800 $ 228,034 $ 209,016 Depreciation and amortization (8,535 ) (7,681 ) (16,756 ) (15,028 ) (Loss) gain on sale/disposal of assets (161 ) 422 (247 ) 272 Non-cash compensation expense (3,720 ) (3,310 ) (8,617 ) (7,776 ) Income from operations 103,701 92,231 202,414 186,484 Interest income 197 57 473 139 Interest expense (25,206 ) (19,010 ) (51,353 ) (39,163 ) Income before provision for income taxes $ 78,692 $ 73,278 $ 151,534 $ 147,460 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 19, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 3. Earnings Per Share Fiscal Quarter Ended Two Fiscal Quarters Ended June 19, 2016 June 14, 2015 June 19, 2016 June 14, 2015 Net income available to common stockholders - basic and diluted $ 49,261 $ 45,909 $ 94,712 $ 92,198 Basic weighted average number of shares 49,213,330 54,833,094 49,455,412 55,020,404 Earnings per share - basic $ 1.00 $ 0.84 $ 1.92 $ 1.68 Diluted weighted average number of shares 50,459,754 56,628,237 50,846,941 56,820,743 Earnings per share - diluted $ 0.98 $ 0.81 $ 1.86 $ 1.62 The denominators used in calculating diluted earnings per share for common stock for the second quarter of 2016 and two fiscal quarters of 2016 do not include 216,690 options to purchase common stock, as the effect of including these options would have been anti-dilutive. The denominators used in calculating diluted earnings per share for the second quarter of 2016 and two fiscal quarters of 2016 do not include 17,870 and 23,560 restricted performance shares, respectively, as the effect of including these shares would have been anti-dilutive. The denominators used in calculating diluted earnings per share for common stock for the second quarter and two fiscal quarters of 2015 do not include 70,910 options to purchase common stock, as the effect of including these options would have been anti-dilutive. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Jun. 19, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Deficit | 4. Stockholders’ Deficit The following table summarizes changes in Stockholders’ Deficit for the two fiscal quarters of 2016. Common Stock Additional Capital Retained Deficit Accumulated Loss Shares Amount Balance at January 3, 2016 49,838,221 $ 498 $ 6,942 $ (1,804,143 ) $ (3,548 ) Net income — — — 94,712 — Common stock dividends — — — (37,330 ) — Issuance of common stock, net 20,200 — — — — Tax payments for restricted stock upon vesting (24,947 ) — (3,036 ) — — Purchases of common stock (2,302,062 ) (23 ) (58,122 ) (165,994 ) — Exercise of stock options 805,100 8 10,840 — — Tax impact from equity-based compensation — — 34,852 — — Non-cash compensation expense — — 8,617 — — Currency translation adjustment, net of tax — — — — 973 Balance at June 19, 2016 48,336,512 $ 483 $ 93 $ (1,912,755 ) $ (2,575 ) On March 14, 2016, the Company received and retired 456,936 shares of its common stock in connection with the final settlement of its previously announced $600.0 million accelerated share repurchase (“ASR”) program. At the commencement of the program, in the fourth quarter of 2015, the Company paid $600.0 million to a counterparty and received and retired a portion of the shares from the ASR program, based on the terms of the related ASR agreement. |
Dividends
Dividends | 6 Months Ended |
Jun. 19, 2016 | |
Statement of Stockholders' Equity [Abstract] | |
Dividends | 5. Dividends During the second quarter of 2016, on April 26, 2016, the Company’s Board of Directors declared a $0.38 per share quarterly dividend on its outstanding common stock for shareholders of record as of June 15, 2016 which was paid on June 30, 2016. The Company had approximately $18.8 million accrued for common stock dividends at June 19, 2016. Subsequent to the second quarter, on July 20, 2016, the Company’s Board of Directors declared a $0.38 per share quarterly dividend on its outstanding common stock for shareholders of record as of September 15, 2016 to be paid on September 30, 2016. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 19, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | 6. Accumulated Other Comprehensive Loss The approximately $2.6 million of accumulated other comprehensive loss at June 19, 2016 and the approximately $3.5 million of accumulated other comprehensive loss at January 3, 2016 represent currency translation adjustments, net of tax. There were no reclassifications out of accumulated other comprehensive loss to net income in the two fiscal quarters of 2016 or the two fiscal quarters of 2015. |
Open Market Share Repurchase Pr
Open Market Share Repurchase Program | 6 Months Ended |
Jun. 19, 2016 | |
Equity [Abstract] | |
Open Market Share Repurchase Program | 7. Open Market Share Repurchase Program During the first quarter of 2016, the Company received and retired 456,936 shares of its common stock in connection with the final settlement of its previously announced $600.0 million accelerated share repurchase program. The Company did not repurchase any shares of its common stock under its Board of Directors approved open market share repurchase program in the first quarter of 2016. During the second quarter of 2016, the Company repurchased and retired 1,845,126 shares of its common stock under its Board of Directors approved open market share repurchase program for a total of approximately $224.1 million. On May 25, 2016, the Board of Directors approved an increase to the Company’s open market share repurchase program, so that the Company had an aggregate of $250.0 million available for future share repurchases as of May 25, 2016. As of June 19, 2016, the end of the second quarter, the Company had a total remaining authorized amount for share repurchases of approximately $225.2 million. Subsequent to the second quarter of 2016, the Company repurchased and retired 85,020 shares for approximately $10.8 million. As of July 14, 2016, the Company had $214.5 million remaining for future share repurchases under its Board of Directors approved open market share repurchase program. During the second quarter of 2015, the Company repurchased and retired 637,587 shares of common stock for a total of approximately $68.1 million; during the two fiscal quarters of 2015, the Company repurchased and retired 928,464 shares of common stock for approximately $97.6 million. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 19, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8. Fair Value Measurements Fair value measurements enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The fair values of the Company’s cash equivalents and investments in marketable securities are based on quoted prices in active markets for identical assets. The following tables summarize the carrying amounts and fair values of certain assets at June 19, 2016 and January 3, 2016: At June 19, 2016 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Cash equivalents $ 9,678 $ 9,678 $ — $ — Restricted cash equivalents 70,263 70,263 — — Investments in marketable securities 7,110 7,110 — — At January 3, 2016 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Cash equivalents $ 108,766 $ 108,766 $ — $ — Restricted cash equivalents 128,554 128,554 — — Investments in marketable securities 6,054 6,054 — — At June 19, 2016, management estimates that the approximately $929.4 million in principal amount of outstanding fixed rate notes from its 2012 recapitalization had a fair value of approximately $964.8 million; and at January 3, 2016, management estimates that the approximately $962.7 million in principal amount of outstanding fixed rate notes from its 2012 recapitalization had a fair value of approximately $991.6 million. At June 19, 2016, management estimates that the $497.5 million in principal amount of outstanding five-year fixed rate notes from its 2015 recapitalization had a fair value of approximately $504.5 million; and at January 3, 2016, management estimates that the $500.0 million in principal amount of outstanding five-year fixed rate notes from its 2015 recapitalization had a fair value of approximately $489.5 million. At June 19, 2016, management estimates that the $796.0 million in principal amount of outstanding ten-year fixed rate notes from its 2015 recapitalization had a fair value of approximately $812.7 million; and at January 3, 2016, management estimates that the $800.0 million in principal amount of outstanding ten-year fixed rate notes from its 2015 recapitalization had a fair value of approximately $781.6 million. The fixed rate notes are classified as a Level 2 measurement, as the Company estimates the fair value amount by using available market information. The Company obtained quotes from two separate brokerage firms that are knowledgeable about the Company’s fixed rate notes and, at times, trade these notes. The Company also performed its own internal analysis based on the information gathered from public markets, including information on notes that are similar to those of the Company. However, considerable judgment is required to interpret market data to estimate fair value. Accordingly, the fair value estimates presented are not necessarily indicative of the amount that the Company or the debtholders could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair values stated above. |
Legal Matters
Legal Matters | 6 Months Ended |
Jun. 19, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | 9. Legal Matters On February 14, 2011, Domino’s Pizza LLC was named as a defendant in a lawsuit along with Fischler Enterprises of C.F., Inc., a franchisee, and Jeffrey S. Kidd, the franchisee’s delivery driver, filed by Yvonne Wiederhold, the plaintiff, as Personal Representative of the Estate of Richard E. Wiederhold, deceased. The case involved a traffic accident in which the franchisee’s delivery driver is alleged to have caused an accident involving a vehicle driven by Richard Wiederhold. Mr. Wiederhold sustained spinal injuries resulting in quadriplegia and passed away several months after the accident. The jury returned a $10.1 million judgment for the plaintiff where the Company and Mr. Kidd were found to be 90% liable (after certain offsets and other deductions the final verdict was $8.9 million). In the second quarter of 2016, the trial court ruled on all post-judgment motions and entered the judgment. The Company denies liability and is in the process of filing an appeal of the verdict on a variety of grounds. On September 11, 2012, Domino’s Pizza LLC was named as a defendant in a lawsuit along with MAC Pizza Management, Inc., a large franchisee, and Joshua Balka, the franchisee’s delivery driver, filed by Raghurami Reddy, the plaintiff. The case involved a traffic accident in which the franchisee’s delivery driver collided with another vehicle, where the driver of the other vehicle sustained head injuries and the passenger of the other vehicle sustained fatal injuries. The jury delivered a $32.0 million judgment for the plaintiff where the Company was found to be 60% liable. The Company denied liability and filed an appeal of the verdict on a variety of grounds. In the first quarter of 2015, the appellate court reversed the trial court’s decision and dismissed the claims against the Company. The plaintiff filed a Petition for Review with the Supreme Court of the State of Texas. The Company filed opposition to the writ of review and asserted that the claims were appropriately dismissed by the Court of Appeals of the State of Texas. In the second quarter of 2016, the Texas Supreme Court rejected the plaintiffs’ writ of certiorari, leaving the appellate court’s favorable decision to stand. |
Supplemental Disclosures of Cas
Supplemental Disclosures of Cash Flow Information | 6 Months Ended |
Jun. 19, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures of Cash Flow Information | 10. Supplemental Disclosures of Cash Flow Information The Company had non-cash investing activities related to accruals for capital expenditures of $0.7 million at June 19, 2016 and $1.1 million at June 14, 2015. During the two fiscal quarters of 2015, the Company renewed the capital lease of a supply chain center building and extended the term of the lease through August 2028. As a result of the new lease, the Company recorded non-cash financing activities of $3.4 million for the increase in capital lease assets and liabilities during the first quarter of 2015. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Jun. 19, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | 11. New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU 2016-04, Liabilities – Extinguishment of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products Revenues from Contracts with Customers In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting Revenue from Contracts with Customers (Topic 606) The amendments in ASU 2016-08 clarify how an entity should identify the specified good or service for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements. ASU 2016-10 clarifies the following two aspects of ASU 2014-09: identifying performance obligations and licensing implementation guidance. ASU 2016-11 rescinds several SEC Staff Announcements that are codified in Topic 605, including, among other items, guidance relating to accounting for consideration given by a vendor to a customer, as well as accounting for shipping and handling fees and freight services. ASU 2016-12 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 19, 2016 | |
Segment Reporting [Abstract] | |
Revenues, Income from Operations and Earnings Before Interest, Taxes, Depreciation, Amortization and Other, for each of Reportable Segments | The following table summarizes revenues, income from operations and earnings before interest, taxes, depreciation, amortization and other, which is the measure by which the Company allocates resources to its segments and which we refer to as Segment Income, for each of our reportable segments. Fiscal Quarters Ended June 19, 2016 and June 14, 2015 Domestic Supply International Intersegment Other Total Revenues 2016 $ 167,509 $ 367,858 $ 40,573 $ (28,599 ) $ — $ 547,341 2015 149,621 327,374 36,098 (24,471 ) — 488,622 Income from operations 2016 $ 58,731 $ 29,299 $ 32,204 N/A $ (16,533 ) $ 103,701 2015 52,723 26,012 29,569 N/A (16,073 ) 92,231 Segment Income 2016 $ 60,936 $ 31,682 $ 32,238 N/A $ (8,739 ) $ 116,117 2015 54,279 28,315 29,509 N/A (9,303 ) 102,800 Two Fiscal Quarters Ended June 19, 2016 and June 14, 2015 Domestic Supply International Intersegment Other Total Revenues 2016 $ 332,104 $ 730,377 $ 79,459 $ (55,423 ) $ — $ 1,086,517 2015 303,770 665,130 72,320 (50,571 ) — 990,649 Income from operations 2016 $ 117,150 $ 57,644 $ 61,945 N/A $ (34,325 ) $ 202,414 2015 108,250 53,207 58,284 N/A (33,257 ) 186,484 Segment Income 2016 $ 121,405 $ 62,354 $ 62,010 N/A $ (17,735 ) $ 228,034 2015 111,552 57,771 58,258 N/A (18,565 ) 209,016 |
Reconciliation of Total Segment Income to Consolidated Income Before Provision for Income Taxes | The following table reconciles Total Segment Income to consolidated income before provision for income taxes. Fiscal Quarter Ended Two Fiscal Quarters Ended June 19, June 14, June 19, June 14, Total Segment Income $ 116,117 $ 102,800 $ 228,034 $ 209,016 Depreciation and amortization (8,535 ) (7,681 ) (16,756 ) (15,028 ) (Loss) gain on sale/disposal of assets (161 ) 422 (247 ) 272 Non-cash compensation expense (3,720 ) (3,310 ) (8,617 ) (7,776 ) Income from operations 103,701 92,231 202,414 186,484 Interest income 197 57 473 139 Interest expense (25,206 ) (19,010 ) (51,353 ) (39,163 ) Income before provision for income taxes $ 78,692 $ 73,278 $ 151,534 $ 147,460 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 19, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Fiscal Quarter Ended Two Fiscal Quarters Ended June 19, 2016 June 14, 2015 June 19, 2016 June 14, 2015 Net income available to common stockholders - basic and diluted $ 49,261 $ 45,909 $ 94,712 $ 92,198 Basic weighted average number of shares 49,213,330 54,833,094 49,455,412 55,020,404 Earnings per share - basic $ 1.00 $ 0.84 $ 1.92 $ 1.68 Diluted weighted average number of shares 50,459,754 56,628,237 50,846,941 56,820,743 Earnings per share - diluted $ 0.98 $ 0.81 $ 1.86 $ 1.62 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 6 Months Ended |
Jun. 19, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Changes in Stockholders' Deficit | The following table summarizes changes in Stockholders’ Deficit for the two fiscal quarters of 2016. Common Stock Additional Capital Retained Deficit Accumulated Loss Shares Amount Balance at January 3, 2016 49,838,221 $ 498 $ 6,942 $ (1,804,143 ) $ (3,548 ) Net income — — — 94,712 — Common stock dividends — — — (37,330 ) — Issuance of common stock, net 20,200 — — — — Tax payments for restricted stock upon vesting (24,947 ) — (3,036 ) — — Purchases of common stock (2,302,062 ) (23 ) (58,122 ) (165,994 ) — Exercise of stock options 805,100 8 10,840 — — Tax impact from equity-based compensation — — 34,852 — — Non-cash compensation expense — — 8,617 — — Currency translation adjustment, net of tax — — — — 973 Balance at June 19, 2016 48,336,512 $ 483 $ 93 $ (1,912,755 ) $ (2,575 ) On March 14, 2016, the Company received and retired 456,936 shares of its common stock in connection with the final settlement of its previously announced $600.0 million accelerated share repurchase (“ASR”) program. At the commencement of the program, in the fourth quarter of 2015, the Company paid $600.0 million to a counterparty and received and retired a portion of the shares from the ASR program, based on the terms of the related ASR agreement. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 19, 2016 | |
Fair Value Disclosures [Abstract] | |
Carrying Amounts and Fair Values of Certain Assets | The following tables summarize the carrying amounts and fair values of certain assets at June 19, 2016 and January 3, 2016: At June 19, 2016 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Cash equivalents $ 9,678 $ 9,678 $ — $ — Restricted cash equivalents 70,263 70,263 — — Investments in marketable securities 7,110 7,110 — — At January 3, 2016 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Cash equivalents $ 108,766 $ 108,766 $ — $ — Restricted cash equivalents 128,554 128,554 — — Investments in marketable securities 6,054 6,054 — — |
Revenues, Income from Operation
Revenues, Income from Operations and Earnings Before Interest, Taxes, Depreciation, Amortization and Other, for each of Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 19, 2016 | Jun. 14, 2015 | Jun. 19, 2016 | Jun. 14, 2015 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 547,341 | $ 488,622 | $ 1,086,517 | $ 990,649 |
Income from operations | 103,701 | 92,231 | 202,414 | 186,484 |
Segment Income | 116,117 | 102,800 | 228,034 | 209,016 |
Supply Chain [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 339,259 | 302,903 | 674,954 | 614,559 |
International Franchise [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 40,573 | 36,098 | 79,459 | 72,320 |
Operating Segments [Member] | Domestic Stores [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 167,509 | 149,621 | 332,104 | 303,770 |
Income from operations | 58,731 | 52,723 | 117,150 | 108,250 |
Segment Income | 60,936 | 54,279 | 121,405 | 111,552 |
Operating Segments [Member] | Supply Chain [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 367,858 | 327,374 | 730,377 | 665,130 |
Income from operations | 29,299 | 26,012 | 57,644 | 53,207 |
Segment Income | 31,682 | 28,315 | 62,354 | 57,771 |
Operating Segments [Member] | International Franchise [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 40,573 | 36,098 | 79,459 | 72,320 |
Income from operations | 32,204 | 29,569 | 61,945 | 58,284 |
Segment Income | 32,238 | 29,509 | 62,010 | 58,258 |
Intersegment Revenues [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (28,599) | (24,471) | (55,423) | (50,571) |
Segment Reconciling [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Income from operations | (16,533) | (16,073) | (34,325) | (33,257) |
Segment Income | $ (8,739) | $ (9,303) | $ (17,735) | $ (18,565) |
Reconciliation of Total Segment
Reconciliation of Total Segment Income to Consolidated Income Before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 19, 2016 | Jun. 14, 2015 | Jun. 19, 2016 | Jun. 14, 2015 | |
Segment Reconciliation [Abstract] | ||||
Total Segment Income | $ 116,117 | $ 102,800 | $ 228,034 | $ 209,016 |
Depreciation and amortization | (8,535) | (7,681) | (16,756) | (15,028) |
(Loss) gain on sale/disposal of assets | (161) | 422 | (247) | 272 |
Non-cash compensation expense | (3,720) | (3,310) | (8,617) | (7,776) |
Income from operations | 103,701 | 92,231 | 202,414 | 186,484 |
Interest income | 197 | 57 | 473 | 139 |
Interest expense | (25,206) | (19,010) | (51,353) | (39,163) |
Income before provision for income taxes | $ 78,692 | $ 73,278 | $ 151,534 | $ 147,460 |
Earnings Per Share (Detail)
Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 19, 2016 | Jun. 14, 2015 | Jun. 19, 2016 | Jun. 14, 2015 | |
Earnings Per Share [Abstract] | ||||
Net income available to common stockholders - basic and diluted | $ 49,261 | $ 45,909 | $ 94,712 | $ 92,198 |
Basic weighted average number of shares | 49,213,330 | 54,833,094 | 49,455,412 | 55,020,404 |
Earnings per share - basic | $ 1 | $ 0.84 | $ 1.92 | $ 1.68 |
Diluted weighted average number of shares | 50,459,754 | 56,628,237 | 50,846,941 | 56,820,743 |
Earnings per share - diluted | $ 0.98 | $ 0.81 | $ 1.86 | $ 1.62 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 19, 2016 | Jun. 14, 2015 | Jun. 19, 2016 | Jun. 14, 2015 | |
Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive Securities Excluded from Computation of Earnings Per Share | 216,690 | 70,910 | 216,690 | 70,910 |
Restricted Performance Shares [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive Securities Excluded from Computation of Earnings Per Share | 17,870 | 23,560 |
Changes in Stockholders' Defici
Changes in Stockholders' Deficit (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 19, 2016 | Mar. 27, 2016 | Jun. 14, 2015 | Jun. 19, 2016 | Jun. 14, 2015 | ||
Stockholders' Deficit [Line Items] | ||||||
Beginning Balance | [1] | $ (1,800,251) | $ (1,800,251) | |||
Net income | $ 49,261 | $ 45,909 | 94,712 | $ 92,198 | ||
Tax payments for restricted stock upon vesting | (3,036) | (3,737) | ||||
Purchases of common stock, (in shares) | 0 | |||||
Non-cash compensation expense | (3,720) | $ (3,310) | (8,617) | $ (7,776) | ||
Ending Balance | $ (1,914,754) | $ (1,914,754) | ||||
Common Stock [Member] | ||||||
Stockholders' Deficit [Line Items] | ||||||
Beginning Balance, (in shares) | 49,838,221 | 49,838,221 | ||||
Beginning Balance | $ 498 | $ 498 | ||||
Issuance of common stock, net, (in shares) | 20,200 | |||||
Issuance of common stock, net | $ 0 | |||||
Tax payments for restricted stock upon vesting, (in shares) | (24,947) | |||||
Purchases of common stock, (in shares) | (2,302,062) | |||||
Purchases of common stock | $ (23) | |||||
Exercise of stock options, (in shares) | 805,100 | |||||
Exercise of stock options | $ 8 | |||||
Ending Balance, (in shares) | 48,336,512 | 48,336,512 | ||||
Ending Balance | $ 483 | $ 483 | ||||
Additional Paid-in Capital [Member] | ||||||
Stockholders' Deficit [Line Items] | ||||||
Beginning Balance | 6,942 | 6,942 | ||||
Issuance of common stock, net | 0 | |||||
Tax payments for restricted stock upon vesting | (3,036) | |||||
Purchases of common stock | (58,122) | |||||
Exercise of stock options | 10,840 | |||||
Tax impact from equity-based compensation | 34,852 | |||||
Non-cash compensation expense | 8,617 | |||||
Ending Balance | 93 | 93 | ||||
Retained Deficit [Member] | ||||||
Stockholders' Deficit [Line Items] | ||||||
Beginning Balance | (1,804,143) | (1,804,143) | ||||
Net income | 94,712 | |||||
Common stock dividends | (37,330) | |||||
Issuance of common stock, net | 0 | |||||
Purchases of common stock | (165,994) | |||||
Ending Balance | (1,912,755) | (1,912,755) | ||||
Accumulated Other Comprehensive Loss [Member] | ||||||
Stockholders' Deficit [Line Items] | ||||||
Beginning Balance | $ (3,548) | (3,548) | ||||
Issuance of common stock, net | 0 | |||||
Currency translation adjustment, net of tax | 973 | |||||
Ending Balance | $ (2,575) | $ (2,575) | ||||
[1] | The balance sheet at January 3, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Stockholders' Deficit - Additio
Stockholders' Deficit - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 14, 2016 | Jun. 19, 2016 | Mar. 27, 2016 | Jan. 03, 2016 | Jun. 14, 2015 | Jun. 19, 2016 | Jun. 14, 2015 |
Stockholders' Deficit [Line Items] | |||||||
Common stock repurchased and retired (in shares) | 456,936 | 1,845,126 | 456,936 | 637,587 | 928,464 | ||
Accelerated share repurchase, agreement amount | $ 600,000 | ||||||
Payment to counterparty | $ 224,100 | $ 68,100 | $ 224,139 | $ 97,634 | |||
Counterparty [Member] | |||||||
Stockholders' Deficit [Line Items] | |||||||
Payment to counterparty | $ 600,000 |
Dividends - Additional Informat
Dividends - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jul. 20, 2016 | Jun. 19, 2016 | Jun. 14, 2015 | Jun. 19, 2016 | Jun. 14, 2015 | Jan. 03, 2016 | [1] |
Dividends Payable [Line Items] | |||||||
Dividends declared per share | $ 0.38 | $ 0.31 | $ 0.76 | $ 0.62 | |||
Common stock dividends accrued | $ 18,815 | $ 18,815 | $ 557 | ||||
Dividend declared date | Apr. 26, 2016 | ||||||
Record date of dividend | Jun. 15, 2016 | ||||||
Dividend payable date | Jun. 30, 2016 | ||||||
Subsequent Event [Member] | |||||||
Dividends Payable [Line Items] | |||||||
Dividends declared per share | $ 0.38 | ||||||
Record date of dividend | Sep. 15, 2016 | ||||||
Dividend payable date | Sep. 30, 2016 | ||||||
[1] | The balance sheet at January 3, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive Loss - Additional Information (Detail) - USD ($) | 6 Months Ended | |||
Jun. 19, 2016 | Jun. 14, 2015 | Jan. 03, 2016 | [1] | |
Equity [Abstract] | ||||
Accumulated other comprehensive loss | $ (2,575,000) | $ (3,548,000) | ||
Reclassification losses from accumulated other comprehensive loss to net income | $ 0 | $ 0 | ||
[1] | The balance sheet at January 3, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Open Market Share Repurchase 29
Open Market Share Repurchase Program - Additional Information (Detail) - USD ($) | Jul. 14, 2016 | Mar. 14, 2016 | Jun. 19, 2016 | Mar. 27, 2016 | Jun. 14, 2015 | Jun. 19, 2016 | Jun. 14, 2015 | May 25, 2016 |
Share Repurchases [Line Items] | ||||||||
Stock Repurchased During Period Shares | 0 | |||||||
Accelerated share repurchase agreement | $ 600,000,000 | |||||||
Common stock repurchased and retired (in shares) | 456,936 | 1,845,126 | 456,936 | 637,587 | 928,464 | |||
Common stock repurchased and retired | $ 224,100,000 | $ 68,100,000 | $ 224,139,000 | $ 97,634,000 | ||||
Share repurchase program, approved amount | $ 250,000,000 | |||||||
Stock repurchase program, amount remaining | $ 225,200,000 | $ 225,200,000 | ||||||
Subsequent Event [Member] | ||||||||
Share Repurchases [Line Items] | ||||||||
Common stock repurchased and retired (in shares) | 85,020 | |||||||
Common stock repurchased and retired | $ 10,800,000 | |||||||
Stock repurchase program, amount remaining | $ 214,500,000 |
Carrying Amounts and Fair Value
Carrying Amounts and Fair Values of Certain Assets (Detail) - USD ($) $ in Thousands | Jun. 19, 2016 | Jan. 03, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents, carrying amount | $ 9,678 | $ 108,766 |
Restricted cash equivalents, carrying amount | 70,263 | 128,554 |
Investments in marketable securities, carrying amount | 7,110 | 6,054 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents, fair value | 9,678 | 108,766 |
Restricted cash equivalents, fair value | 70,263 | 128,554 |
Investments in marketable securities, carrying amount | $ 7,110 | $ 6,054 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 19, 2016 | Jan. 03, 2016 | |
Fixed Rate Senior Notes [Member] | 2012 Recapitalization [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Principal amount of outstanding debt | $ 929.4 | $ 962.7 |
Fair value of debt outstanding | 964.8 | 991.6 |
Five Year Fixed Rate Notes [Member] | 2015 Recapitalization [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Principal amount of outstanding debt | 497.5 | 500 |
Fair value of debt outstanding | $ 504.5 | 489.5 |
Debt instrument, term | 5 years | |
Ten Year Fixed Rate Notes [Member] | 2015 Recapitalization [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Principal amount of outstanding debt | $ 796 | 800 |
Fair value of debt outstanding | $ 812.7 | $ 781.6 |
Debt instrument, term | 10 years |
Legal Matters - Additional Info
Legal Matters - Additional Information (Detail) - USD ($) $ in Millions | Sep. 11, 2012 | Feb. 14, 2011 |
Commitments and Contingencies Disclosure [Abstract] | ||
Amount delivered for plaintiff | $ 32 | $ 10.1 |
Percentage liable by company for plaintiff | 60.00% | 90.00% |
Litigation settlement, amount | $ 8.9 |
Supplemental Disclosures of C33
Supplemental Disclosures of Cash Flow Information - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 22, 2015 | Jun. 19, 2016 | Jun. 14, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |||
Accruals for capital expenditures related to non-cash investing activities | $ 0.7 | $ 1.1 | |
Extended lease agreement expiration date | 2028-08 | ||
Increase in capital lease assets and liabilities related to non-cash financing activities | $ 3.4 |