Cover Page
Cover Page - shares | 6 Months Ended | |
Jul. 04, 2021 | Aug. 10, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 4, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-04321 | |
Entity Registrant Name | Krispy Kreme, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 37-1701311 | |
Entity Address, Address Line One | 2116 Hawkins Street | |
Entity Address, City or Town | Charlotte | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28203 | |
City Area Code | 800 | |
Local Phone Number | 457-4779 | |
Title of 12(b) Security | Common stock, $0.01 par value per share | |
Entity Trading Symbol | DNUT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 167,112,953 | |
Entity Central Index Key | 0001857154 | |
Current Fiscal Year End Date | --01-02 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Total net revenues | $ 349,186 | $ 244,972 | $ 670,995 | $ 506,188 |
Product and distribution costs | 85,017 | 68,958 | 165,014 | 137,106 |
Operating expenses | 157,877 | 104,221 | 305,418 | 220,000 |
Selling, general and administrative expense | 60,930 | 41,487 | 110,467 | 82,569 |
Marketing expenses | 10,052 | 8,575 | 19,559 | 16,689 |
Pre-opening costs | 1,752 | 2,863 | 3,143 | 6,300 |
Other (income)/expenses, net | (761) | 1,339 | (4,006) | 2,510 |
Depreciation and amortization expense | 25,194 | 18,097 | 48,595 | 37,184 |
Operating income/(loss) | 9,125 | (568) | 22,805 | 3,830 |
Interest expense, net | 9,793 | 9,711 | 18,042 | 18,355 |
Interest expense — related party | 4,821 | 5,566 | 10,387 | 11,132 |
Other non-operating income, net | (416) | (2,660) | (858) | (112) |
Loss before income taxes | (5,073) | (13,185) | (4,766) | (25,545) |
Income tax expense/(benefit) | 9,923 | (1,500) | 10,608 | (2,912) |
Net loss | (14,996) | (11,685) | (15,374) | (22,633) |
Net income attributable to noncontrolling interest | 2,146 | 945 | 4,829 | 1,512 |
Net loss attributable to Krispy Kreme, Inc. | $ (17,142) | $ (12,630) | $ (20,203) | $ (24,145) |
Net loss per share: | ||||
Common stock — Basic (in dollars per share) | $ (0.13) | $ (0.10) | $ (0.16) | $ (0.19) |
Common stock — Diluted (in dollars per share) | $ (0.13) | $ (0.10) | $ (0.16) | $ (0.19) |
Weighted average shares outstanding: | ||||
Basic (in shares) | 132,351,087 | 124,987,370 | 128,669,228 | 124,987,370 |
Diluted (in shares) | 132,351,087 | 124,987,370 | 128,669,228 | 124,987,370 |
Product sales | ||||
Total net revenues | $ 341,223 | $ 236,608 | $ 654,808 | $ 488,144 |
Royalties and other revenues | ||||
Total net revenues | $ 7,963 | $ 8,364 | $ 16,187 | $ 18,044 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net loss | $ (14,996) | $ (11,685) | $ (15,374) | $ (22,633) | |
Other comprehensive (loss)/income, net of income taxes: | |||||
Foreign currency translation adjustment | (1,457) | 17,416 | (3,721) | (29,007) | |
Unrealized income/(loss) on cash flow hedges, net of income taxes | [1] | 1,131 | (1,893) | 6,233 | (17,328) |
Total other comprehensive (loss)/income, net of income taxes | (326) | 15,523 | 2,512 | (46,335) | |
Comprehensive (loss)/income | (15,322) | 3,838 | (12,862) | (68,968) | |
Net income attributable to noncontrolling interest | 2,146 | 945 | 4,829 | 1,512 | |
Total comprehensive income attributable to noncontrolling interest | 2,146 | 945 | 4,829 | 1,512 | |
Comprehensive (loss)/income attributable to Krispy Kreme, Inc. | $ (17,468) | $ 2,893 | $ (17,691) | $ (70,480) | |
[1] | Net of income tax benefit/(expense) of ($0.4 million) and ($2.1 million) for the quarter and two quarters ended July 4, 2021, respectively, and $0.6 million and $5.8 million for the quarter and two quarters ended June 28, 2020, respectively. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized income/(loss) on cash flow hedges, tax benefit (expense) | $ (0.4) | $ 0.6 | $ (2.1) | $ 5.8 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 37,377 | $ 37,460 |
Marketable securities | 744 | 1,048 |
Restricted cash | 82 | 23 |
Accounts receivable, net | 49,207 | 74,351 |
Inventories | 38,500 | 38,519 |
Prepaid expense and other current assets | 20,911 | 12,692 |
Total current assets | 146,821 | 164,093 |
Property and equipment, net | 415,319 | 395,255 |
Goodwill | 1,095,369 | 1,086,546 |
Other intangible assets, net | 1,003,948 | 998,014 |
Operating lease right of use asset, net | 414,096 | 399,688 |
Other assets | 18,027 | 17,399 |
Total assets | 3,093,580 | 3,060,995 |
Current Liabilities: | ||
Current portion of long-term debt | 538,985 | 41,245 |
Current operating lease liabilities | 46,763 | 45,675 |
Accounts payable | 156,564 | 148,645 |
Accrued liabilities | 165,826 | 124,951 |
Structured payables | 139,748 | 137,319 |
Total current liabilities | 1,047,886 | 497,835 |
Long-term debt, less current portion | 626,417 | 785,810 |
Related party notes payable | 0 | 344,581 |
Noncurrent operating lease liabilities | 390,962 | 376,099 |
Deferred income taxes, net | 150,687 | 144,866 |
Other long-term obligations and deferred credits | 55,822 | 63,445 |
Total liabilities | 2,271,774 | 2,212,636 |
Commitments and contingencies | ||
Shareholders’ Equity: | ||
Common stock, $0.01 par value; 300,000,000 and 174,500,000 shares authorized as of July 4, 2021 and January 3, 2021, respectively; 163,595,516 and 124,987,370 shares issued and outstanding as of July 4, 2021 and January 3, 2021, respectively | 1,636 | 1,250 |
Additional paid-in capital | 1,362,875 | 845,499 |
Subscription receivable | (471,250) | 0 |
Shareholder note receivable | (3,827) | (18,660) |
Accumulated other comprehensive income/(loss), net of income tax | 1,304 | (1,208) |
Retained deficit | (162,399) | (142,197) |
Total shareholders’ equity attributable to Krispy Kreme, Inc. | 728,339 | 684,684 |
Noncontrolling interest | 93,467 | 163,675 |
Total shareholders’ equity | 821,806 | 848,359 |
Total liabilities and shareholders’ equity | $ 3,093,580 | $ 3,060,995 |
Common stock, shares authorized (in shares) | 300,000,000 | 174,500,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 04, 2021 | Jan. 03, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 174,500,000 |
Common stock, shares issued (in shares) | 163,595,516 | 124,987,370 |
Common stock, shares outstanding (in shares) | 163,595,516 | 124,987,370 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 04, 2021 | Jun. 28, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (15,374) | $ (22,633) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization expense | 48,595 | 37,184 |
Deferred income taxes | 7,995 | (2,601) |
Loss on extinguishment of debt | 1,700 | 0 |
Impairment and lease termination charges | 1,126 | 1,693 |
Loss/(gain) on disposal of property and equipment | 148 | (1,164) |
Share-based compensation | 10,658 | 6,141 |
Change in accounts and notes receivable allowances | 110 | 717 |
Inventory write-off | 776 | 0 |
Other | (425) | (76) |
Change in operating assets and liabilities, excluding business acquisitions and foreign currency translation adjustments: | 1,536 | (5,325) |
Net cash provided by operating activities | 56,845 | 13,936 |
CASH FLOWS USED FOR INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (52,842) | (44,133) |
Proceeds from disposals of assets | 147 | 2,793 |
Acquisition of shops and franchise rights from franchisees, net of cash acquired | (33,888) | 212 |
Principal payments received from loans to franchisees | 45 | 362 |
Purchases of held-to-maturity debt securities | 0 | (55) |
Maturities of held-to-maturity debt securities | 277 | 116 |
Net cash used for investing activities | (86,261) | (40,705) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from the issuance of debt | 540,000 | 263,097 |
Repayment of long-term debt and lease obligations | (541,353) | (97,496) |
Payment of financing costs | (1,700) | 0 |
Proceeds from structured payables | 140,598 | 135,222 |
Payments on structured payables | (138,100) | (97,530) |
Capital contribution by shareholders | 120,932 | 0 |
Proceeds from sale of noncontrolling interest in subsidiary | 53,256 | 17,592 |
Distribution to shareholders | (34,364) | (19) |
Payments for repurchase and retirement of common stock | (102,698) | 0 |
Distribution to noncontrolling interest | (6,018) | (5,612) |
Net cash provided by financing activities | 30,553 | 215,254 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,161) | 249 |
Net (decrease)/increase in cash, cash equivalents and restricted cash | (24) | 188,734 |
Cash, cash equivalents and restricted cash at beginning of period | 37,483 | 35,450 |
Cash, cash equivalents and restricted cash at end of period | 37,459 | 224,184 |
Supplemental schedule of non-cash investing and financing activities: | ||
Accrual for property and equipment | 1,381 | 6,105 |
Stock issuance under shareholder notes | 446 | 0 |
Common stock issuance under subscription receivable in connection with initial public offering, net of underwriting discounts and issuance costs | 459,685 | 0 |
Accrual for distribution to shareholders | (7,970) | 0 |
Accrual for repurchase and retirement of common stock | (35,803) | 0 |
Reconciliation of cash, cash equivalents and restricted cash at end of period: | ||
Cash and cash equivalents | 37,377 | 224,050 |
Restricted cash | 82 | 134 |
Total cash, cash equivalents and restricted cash | $ 37,459 | $ 224,184 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Subscription Receivable | Shareholder Note Receivable | Foreign currency translation adjustment | Unrealized loss on cash flow hedges | Unrealized loss on employee benefit plans | Retained (Deficit) Earnings | Noncontrolling Interest |
Beginning balance (in shares) at Dec. 29, 2019 | 124,987,370 | |||||||||
Beginning balance at Dec. 29, 2019 | $ 883,417 | $ 1,250 | $ 834,233 | $ 0 | $ (17,232) | $ 4,629 | $ (10,180) | $ 0 | $ (77,880) | $ 148,597 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (10,948) | (11,515) | 567 | |||||||
Other comprehensive income/(loss), before reclassifications | (62,553) | (46,423) | (16,130) | |||||||
Reclassification from AOCI | 695 | 695 | ||||||||
Share-based compensation | 3,167 | 3,167 | ||||||||
Purchase of shares by noncontrolling interest | 17,562 | 17,562 | ||||||||
Distribution to shareholders | (15) | (15) | ||||||||
Distribution to noncontrolling interest | (2,506) | (2,506) | ||||||||
Other | (77) | (76) | (1) | |||||||
Ending balance (in shares) at Mar. 29, 2020 | 124,987,370 | |||||||||
Ending balance at Mar. 29, 2020 | 828,742 | $ 1,250 | 837,385 | 0 | (17,308) | (41,794) | (25,615) | 0 | (89,395) | 164,219 |
Beginning balance (in shares) at Dec. 29, 2019 | 124,987,370 | |||||||||
Beginning balance at Dec. 29, 2019 | 883,417 | $ 1,250 | 834,233 | 0 | (17,232) | 4,629 | (10,180) | 0 | (77,880) | 148,597 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (22,633) | |||||||||
Ending balance (in shares) at Jun. 28, 2020 | 124,987,370 | |||||||||
Ending balance at Jun. 28, 2020 | 832,458 | $ 1,250 | 840,359 | 0 | (17,148) | (24,378) | (27,508) | 0 | (102,028) | 161,911 |
Beginning balance (in shares) at Mar. 29, 2020 | 124,987,370 | |||||||||
Beginning balance at Mar. 29, 2020 | 828,742 | $ 1,250 | 837,385 | 0 | (17,308) | (41,794) | (25,615) | 0 | (89,395) | 164,219 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (11,685) | (12,630) | 945 | |||||||
Other comprehensive income/(loss), before reclassifications | 13,561 | 17,416 | (3,855) | |||||||
Reclassification from AOCI | 1,962 | 1,962 | ||||||||
Share-based compensation | 2,974 | 2,974 | ||||||||
Purchase of shares by noncontrolling interest | 30 | 30 | ||||||||
Distribution to shareholders | (4) | (4) | ||||||||
Distribution to noncontrolling interest | (3,106) | 178 | (3,284) | |||||||
Other | (16) | (18) | 1 | 1 | ||||||
Ending balance (in shares) at Jun. 28, 2020 | 124,987,370 | |||||||||
Ending balance at Jun. 28, 2020 | $ 832,458 | $ 1,250 | 840,359 | 0 | (17,148) | (24,378) | (27,508) | 0 | (102,028) | 161,911 |
Beginning balance (in shares) at Jan. 03, 2021 | 124,987,370 | 124,987,370 | ||||||||
Beginning balance at Jan. 03, 2021 | $ 848,359 | $ 1,250 | 845,499 | 0 | (18,660) | 23,508 | (24,610) | (106) | (142,197) | 163,675 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (378) | (3,061) | 2,683 | |||||||
Other comprehensive income/(loss), before reclassifications | 308 | (2,264) | 2,572 | |||||||
Reclassification from AOCI | 2,530 | 2,530 | ||||||||
Share-based compensation | 2,368 | 2,368 | ||||||||
Purchase of shares by noncontrolling interest | 12,187 | 139 | 12,048 | |||||||
Distribution to shareholders | 0 | |||||||||
Distribution to noncontrolling interest | (1,876) | 363 | (2,239) | |||||||
Other | (95) | (26) | (70) | 2 | (1) | |||||
Ending balance (in shares) at Apr. 04, 2021 | 124,987,370 | |||||||||
Ending balance at Apr. 04, 2021 | $ 863,403 | $ 1,250 | 847,841 | 0 | (18,228) | 21,244 | (19,508) | (106) | (145,256) | 176,166 |
Beginning balance (in shares) at Jan. 03, 2021 | 124,987,370 | 124,987,370 | ||||||||
Beginning balance at Jan. 03, 2021 | $ 848,359 | $ 1,250 | 845,499 | 0 | (18,660) | 23,508 | (24,610) | (106) | (142,197) | 163,675 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | $ (15,374) | |||||||||
Ending balance (in shares) at Jul. 04, 2021 | 163,595,516 | 163,595,516 | ||||||||
Ending balance at Jul. 04, 2021 | $ 821,806 | $ 1,636 | 1,362,875 | (471,250) | (3,827) | 19,787 | (18,377) | (106) | (162,399) | 93,467 |
Beginning balance (in shares) at Apr. 04, 2021 | 124,987,370 | |||||||||
Beginning balance at Apr. 04, 2021 | 863,403 | $ 1,250 | 847,841 | 0 | (18,228) | 21,244 | (19,508) | (106) | (145,256) | 176,166 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (14,996) | (17,142) | 2,146 | |||||||
Other comprehensive income/(loss), before reclassifications | (2,887) | (1,457) | (1,430) | |||||||
Reclassification from AOCI | 2,561 | 2,561 | ||||||||
Capital contribution from shareholders (in shares) | 6,997,450 | |||||||||
Capital contribution from shareholders | 120,932 | $ 70 | 120,862 | |||||||
Share-based compensation | 8,290 | 8,290 | ||||||||
Purchase of shares by noncontrolling interest | 41,069 | 14,421 | 26,648 | |||||||
Distribution to shareholders | (42,334) | (42,334) | ||||||||
Distribution to noncontrolling interest | (4,142) | (4,142) | ||||||||
Conversion of noncontrolling interest to additional paid-in capital in connection with the Merger (in shares) | 9,370,881 | |||||||||
Conversion of noncontrolling interest to additional paid-in capital in connection with the Merger | 0 | $ 93 | 107,258 | (107,351) | ||||||
Issuance of common stock in connection with initial public offering, net of underwriting discounts and issuance costs (in shares) | 29,411,765 | |||||||||
Issuance of common stock in connection with initial public offering, net of underwriting discounts and issuance costs | (11,565) | $ 294 | 459,391 | (471,250) | ||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld (in shares) | 1,267,491 | |||||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld | (15,494) | $ 13 | (15,507) | |||||||
Repurchase of common stock (in shares) | (8,439,441) | |||||||||
Repurchase of common stock | (123,006) | $ (84) | (122,922) | |||||||
Other | $ (25) | (4) | (20) | (1) | ||||||
Ending balance (in shares) at Jul. 04, 2021 | 163,595,516 | 163,595,516 | ||||||||
Ending balance at Jul. 04, 2021 | $ 821,806 | $ 1,636 | $ 1,362,875 | $ (471,250) | $ (3,827) | $ 19,787 | $ (18,377) | $ (106) | $ (162,399) | $ 93,467 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jul. 04, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business Krispy Kreme, Inc. (“KKI”) and its subsidiaries (collectively, the “Company” or “Krispy Kreme”) operates through its omni-channel business model to provide doughnut experiences and produce doughnuts for Doughnut Shops, Delivered Fresh Daily (“DFD”) outlets, Ecommerce and delivery, and Krispy Kreme branded sweet treats (“Branded Sweet Treat Line”) channels, expanding consumer access to the Krispy Kreme brand. The Company has three reportable operating segments: 1) U.S. and Canada, which includes all Krispy Kreme Company-owned operations in the U.S. and Canada, Insomnia-branded cookie shops and our Branded Sweet Treat Line; 2) International, which includes all Krispy Kreme Company-owned operations in the United Kingdom, Ireland, Australia, New Zealand and Mexico; and 3) Market Development, which includes franchise operations across the globe, as well as Krispy Kreme Company-owned shops in Japan. Unallocated corporate costs are excluded from the Company’s measurement of segment performance. Initial Public Offering The Company’s registration statement on Form S-1 related to its initial public offering (“IPO”) was declared effective on June 30, 2021 and the Company’s common stock began trading on the Nasdaq Global Select Market on July 1, 2021. On July 1, 2021, the Company completed its IPO, in which the Company sold 29.4 million shares of common stock at a price to the public of $17.00 per share. The Company received aggregate net proceeds of $459.7 million after deducting underwriting discounts and commissions of $28.7 million and offering expenses of $11.6 million. The net proceeds were received subsequent to quarter end on July 6, 2021 and, therefore, are recorded as Stock subscription receivable within Shareholders’ equity on the Condensed Consolidated Balance Sheet as of July 4, 2021. In connection with the IPO, the Company and its affiliates completed the following transactions: • On June 10, 2021, the Company's wholly-owned (excluding certain management equity interests) subsidiary, Krispy Kreme Holdings, Inc. (“KKHI”), entered into a term loan credit agreement, as borrower, which provided for term loans in an initial aggregate principal amount of $500.0 million (the “Term Loan Facility”). On June 17, 2021, KKHI borrowed $500.0 million under the Term Loan Facility, with debt issuance costs of $1.7 million which were included in Interest expense, net on the Condensed Consolidated Statements of Operations during the quarter ended July 4, 2021. The borrowings bore an all-in interest rate of 2.68175%. On June 28, 2021, following the Merger (as defined below), KKI assumed all of the obligations of KKHI as borrower under the Term Loan Facility. On July 7, 2021, the Company repaid in full and terminated the Term Loan Facility with a cash outflow of $500.7 million, which included $0.7 million of accrued interest. The Term Loan Facility would have matured on the earlier of (i) June 10, 2022 and (ii) within four business days following the consummation of the IPO. • On June 28, 2021, KKHI merged into KKI (the “Merger”). As a result of the Merger, the Company eliminated $107.4 million of noncontrolling interest at KKHI as of the merger date. The management equity interests at KKHI were exchanged for common shares in KKI. Restricted stock units (“RSUs”) and stock options held at KKHI were exchanged for RSUs and stock options held at KKI at a rate of 317.24 KKI shares to 1 KKHI share. • On June 30, 2021, the Company effected a 1,745-for-1 split of each outstanding share of common stock (the “Stock Split”). All share and per share information has been retroactively adjusted to effect the Stock Split for all periods presented. In connection with the IPO, the Company used the proceeds from the Term Loan Facility for the following: (1) repay the related party notes payable (including accrued interest of $17.8 million) of $355.0 million during the quarter ended July 4, 2021, (2) redeem certain common stock of $102.7 million held by Krispy Kreme, G.P. (“KK GP”) during the quarter ended July 4, 2021 and (3) pay a pro rata dividend to members of its management who, prior to the Merger, held equity interests in KKHI in an aggregate amount of $42.3 million ($34.4 million of which was paid during the quarter ended July 4, 2021 and $7.9 million of which was paid at the beginning of the third quarter of fiscal 2021). Additionally, at the beginning of the third quarter of fiscal 2021, the Company paid $20.3 million to repurchase approximately 1.3 million shares of common stock from certain of the Company’s executive officers at the price paid by the underwriters and $15.5 million to repurchase approximately 1.0 million shares of common stock from certain of its executive officers for payment of their withholding taxes with respect to the RSUs vesting or for which vesting was accelerated in connection with the offering. As a result of the above and the timing of certain payments across quarters, the Company’s Condensed Consolidated Balance Sheet as of July 4, 2021 reflected the following amounts: • The $500.0 million Term Loan Facility principal outstanding as Current portion of long-term debt, and • The cumulative $43.7 million unpaid equity distributions and share repurchases as Accrued liabilities. On August 2, 2021, the underwriters exercised their over-allotment option and purchased an additional 3.5 million shares of common stock at the IPO price less the underwriting discounts and commissions. The net proceeds received on August 2, 2021 were $56.1 million after deducting underwriting discounts and commissions of $3.4 million. As the option was exercised subsequent to the end of the quarter ended July 4, 2021, the shares will be reflected as outstanding beginning in the third quarter of fiscal 2021. Basis of Presentation and Consolidation The Company operates and reports financial information on a 52 or 53-week year with the fiscal year ending on the Sunday closest to December 31. The data periods contained within fiscal years 2020 and 2021 reflect the results of operations for the 53-week period ended January 3, 2021 and the 52-week period ended January 2, 2022, respectively. The quarters ended July 4, 2021 and June 28, 2020 were both 13-week periods. The unaudited Condensed Consolidated Financial Statements include the accounts of KKI and subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, these interim financial statements do not include all information and footnotes required under U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of results of operations, balance sheet, cash flows, and shareholders’ equity for the periods presented. All significant intercompany balances and transactions among KKI and subsidiaries have been eliminated in consolidation. Investments in entities over which the Company has the ability to exercise significant influence but which it does not control and whose financial statements are not otherwise required to be consolidated, are accounted for using the equity method. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto as of and for the year ended January 3, 2021, included in the IPO Prospectus. The Condensed Consolidated Balance Sheet as of January 3, 2021 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The results of operations for the second quarter ended July 4, 2021 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending January 2, 2022. Noncontrolling interest in the Company’s Condensed Consolidated Financial Statements represents the interest in subsidiaries held by joint venture partners and employee shareholders. The joint venture partners hold noncontrolling interests in the Company’s consolidated subsidiaries, Awesome Doughnut, LLC (“Awesome Doughnut”) and W.K.S. Krispy Kreme, LLC (“WKS Krispy Kreme”). Employee shareholders hold noncontrolling interests in the consolidated subsidiaries Krispy Kreme Holding UK Ltd. (“KKUK”), Krispy Kreme Holdings Pty Ltd (“KK Australia”), Krispy Kreme Mexico S. de R.L. de C.V. (“KK Mexico”) and Insomnia Cookies Holdings, LLC (“Insomnia Cookies”). Since the Company consolidates the financial statements of these subsidiaries, the noncontrolling owners’ share of each subsidiary’s net assets and results of operations are deducted and reported as noncontrolling interest on the Condensed Consolidated Balance Sheets and as net income attributable to noncontrolling interest in the Condensed Consolidated Statements of Operations and comprehensive income attributable to noncontrolling interest in the Condensed Consolidated Statements of Comprehensive Income/(Loss). Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 1, “Description of Business and Summary of Significant Accounting Policies,” to the Consolidated Financial Statements for the year ended January 3, 2021 included in the IPO Prospectus. There have been no material changes to the significant accounting policies during the quarter ended July 4, 2021. Reclassifications On the Condensed Consolidated Statements of Operations, Marketing expenses have been reclassified (formerly presented within Selling, general and administrative expense) to be consistent with the current quarter presentation. This reclassification does not have a significant impact on the reported financial position and does not impact the results of operations or cash flows. Recent Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes . ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions in Topic 740 and clarifying and amending existing guidance. The Company adopted ASU 2019-12 at the beginning of fiscal year 2021, and the adoption had no material impact to the Company’s Condensed Consolidated Financial Statements. In June 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Acquisitions
Acquisitions | 6 Months Ended |
Jul. 04, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions 2021 Acquisitions In the quarter ended July 4, 2021, there were no acquisitions. In the first quarter of fiscal 2021, the Company acquired the business and operating assets of two franchisees, collectively consisting of 17 Krispy Kreme shops in the United States. The Company paid total consideration of $38.1 million, consisting of $33.9 million of cash, $0.9 million of consideration payable to the sellers within 12 months of the respective acquisition dates, and $3.3 million settlement of amounts related to pre-existing relationships, to acquire substantially all of the shops’ assets. Consideration payable of $0.9 million was withheld to cover indemnification claims that could arise after closing. Absent any claims, these amounts are payable within 12 months of the respective acquisition dates. The settlement of pre-existing relationships included in the purchase consideration includes the write-off of accounts and notes receivable, net of deferred revenue, of $0.6 million. It also includes the disposal of the franchise intangible asset related to the two franchisees recorded at time of the acquisition of Krispy Kreme by JAB Holding Company (“JAB”). The cumulative net book value of the franchise intangible assets was $2.7 million at the acquisition dates. The Company accounted for the transactions as business combinations. The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition for the acquisitions above. KK U.S. Shops Assets acquired: Cash, cash equivalents and restricted cash $ 40 Other current assets 474 Property and equipment, net 3,829 Other intangible assets 23,906 Operating lease right of use asset 19,292 Other assets 115 Total identified assets acquired 47,656 Liabilities assumed: Accrued liabilities (334) Current operating lease liabilities (2,093) Noncurrent operating lease liabilities (17,199) Total liabilities assumed (19,626) Goodwill 10,036 Purchase consideration, net $ 38,066 Transaction costs in 2021 $ 1,225 Transaction costs in 2020 184 Reportable segment U.S. and Canada During the measurement period, the Company will continue to obtain information to assist in determining the fair value of net assets acquired, which may differ materially from these preliminary estimates. Measurement period adjustments, if applicable, will be applied in the reporting period in which the adjustment amounts are determined. Measurement period changes for the 2021 acquisitions did not have a material impact to the Condensed Consolidated Financial Statements for the second quarter of 2021. 2020 Acquisitions |
Inventories
Inventories | 6 Months Ended |
Jul. 04, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of Inventories are as follows: July 4, 2021 January 3, 2021 Raw materials $ 15,915 $ 16,263 Work in progress 603 871 Finished goods and purchased merchandise 21,982 21,385 Total Inventories $ 38,500 $ 38,519 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jul. 04, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill Changes in the carrying amount of goodwill by reportable segment are as follows: U.S. and Canada International Market Development Total Balance as of January 3, 2021 $ 642,704 $ 290,872 $ 152,970 $ 1,086,546 Acquisitions 27,560 — (17,524) 10,036 Measurement periods adjustments related to fiscal year 2020 acquisitions 186 — — 186 Foreign currency impact (1,399) — (1,399) Balance as of July 4, 2021 $ 670,450 $ 289,473 $ 135,446 $ 1,095,369 Acquisitions of franchises result in a reclassification of goodwill between segments. Other intangible assets Other intangible assets consist of the following: July 4, 2021 January 3, 2021 Gross Accumulated Net Amount Gross Accumulated Net Amount Intangible assets with indefinite lives Trade name $ 657,900 $ — $ 657,900 $ 657,900 $ — $ 657,900 Intangible assets with definite lives Franchise agreements 32,961 (7,697) 25,264 36,254 (7,519) 28,735 Customer relationships 15,000 (4,251) 10,749 15,000 (3,819) 11,181 Reacquired franchise rights 381,782 (72,197) 309,585 358,095 (59,432) 298,663 Website development costs 6,500 (6,050) 450 6,500 (4,965) 1,535 Total intangible assets with definite lives 436,243 (90,195) 346,048 415,849 (75,735) 340,114 Total intangible assets $ 1,094,143 $ (90,195) $ 1,003,948 $ 1,073,749 $ (75,735) $ 998,014 |
Leases
Leases | 6 Months Ended |
Jul. 04, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company included the following amounts related to operating and finance assets and liabilities within the Condensed Consolidated Balance Sheets: As of July 4, 2021 January 3, 2021 Assets Classification Operating lease Operating lease right of use asset, net $ 414,096 $ 399,688 Finance lease Property and equipment, net 24,236 23,556 Total leased assets $ 438,332 $ 423,244 Liabilities Current Operating lease Current operating lease liabilities $ 46,763 $ 45,675 Finance lease Current portion of long-term debt 3,985 6,245 Noncurrent Operating lease Noncurrent operating lease liabilities 390,962 376,099 Finance lease Long-term debt, less current portion 22,293 19,979 Total leased liabilities $ 464,003 $ 447,998 Lease costs were as follows: Quarter Ended Two Quarters Ended July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 609 $ 755 $ 1,319 $ 1,573 Operating lease cost Operating expenses 21,368 16,110 41,706 33,599 Short-term lease cost Operating expenses 792 797 1,564 1,429 Variable lease costs Operating expenses 4,218 676 7,297 3,888 Sublease income Royalties and other revenues (97) (130) (177) (239) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense 850 331 1,648 1,331 Interest on lease liabilities Interest expense, net $ 481 $ 836 $ 1,074 $ 1,062 Supplemental disclosures of cash flow information related to leases were as follows: Two Quarters Ended July 4, 2021 June 28, 2020 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 45,889 $ 35,638 Operating cash flows from finance leases 984 971 Financing cash flows from finance leases 1,705 1,899 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases 39,473 6,296 Finance leases $ 1,788 $ 6,827 The Company did not record any lease termination costs in the quarter and two quarters ended July 4, 2021. Lease termination charges included in Other expenses, net were $1.7 million in |
Leases | Leases The Company included the following amounts related to operating and finance assets and liabilities within the Condensed Consolidated Balance Sheets: As of July 4, 2021 January 3, 2021 Assets Classification Operating lease Operating lease right of use asset, net $ 414,096 $ 399,688 Finance lease Property and equipment, net 24,236 23,556 Total leased assets $ 438,332 $ 423,244 Liabilities Current Operating lease Current operating lease liabilities $ 46,763 $ 45,675 Finance lease Current portion of long-term debt 3,985 6,245 Noncurrent Operating lease Noncurrent operating lease liabilities 390,962 376,099 Finance lease Long-term debt, less current portion 22,293 19,979 Total leased liabilities $ 464,003 $ 447,998 Lease costs were as follows: Quarter Ended Two Quarters Ended July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 609 $ 755 $ 1,319 $ 1,573 Operating lease cost Operating expenses 21,368 16,110 41,706 33,599 Short-term lease cost Operating expenses 792 797 1,564 1,429 Variable lease costs Operating expenses 4,218 676 7,297 3,888 Sublease income Royalties and other revenues (97) (130) (177) (239) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense 850 331 1,648 1,331 Interest on lease liabilities Interest expense, net $ 481 $ 836 $ 1,074 $ 1,062 Supplemental disclosures of cash flow information related to leases were as follows: Two Quarters Ended July 4, 2021 June 28, 2020 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 45,889 $ 35,638 Operating cash flows from finance leases 984 971 Financing cash flows from finance leases 1,705 1,899 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases 39,473 6,296 Finance leases $ 1,788 $ 6,827 The Company did not record any lease termination costs in the quarter and two quarters ended July 4, 2021. Lease termination charges included in Other expenses, net were $1.7 million in |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 04, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table presents assets and liabilities that are measured at fair value on a recurring basis as of July 4, 2021 and January 3, 2021: July 4, 2021 Level 1 Level 2 Level 3 Assets: 401(k) mirror plan assets $ 215 $ — $ — Commodity derivatives — 1,890 — Total Assets $ 215 $ 1,890 $ — Liabilities: Foreign currency derivative — 393 — Interest rate derivative — 24,503 — Total Liabilities $ — $ 24,896 $ — January 3, 2021 Level 1 Level 2 Level 3 Assets: 401(k) mirror plan assets $ 237 $ — $ — Foreign currency derivative — 131 — Commodity derivatives — 420 — Total Assets $ 237 $ 551 $ — Liabilities: Interest rate derivative — 32,813 — Total Liabilities $ — $ 32,813 $ — There were no transfers of financial assets or liabilities among the levels within the fair value hierarchy during the quarter ended July 4, 2021 and fiscal year ended January 3, 2021. The Company’s derivatives are valued using discounted cash flow analyses that incorporate observable market parameters, such as interest rate yield curves and currency rates. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jul. 04, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Commodity Price Risk The Company uses forward contracts to protect against the effects of commodity price fluctuations in the cost of ingredients of its products, of which flour, sugar and shortening are the most significant, and the cost of gasoline used by its delivery vehicles. Management has not designated these forward contracts as hedges. As of July 4, 2021 and January 3, 2021, the total notional amount of commodity derivatives was 2.3 million and 3.0 million gallons of gasoline, respectively. They were scheduled to mature between July 5, 2021 and December 31, 2022 and January 4, 2021 and December 1, 2022, respectively. As of July 4, 2021 and January 3, 2021, the Company recorded an asset of $1.9 million and $0.4 million, respectively, related to the fair market values of its commodity derivatives. The settlement of commodity derivative contracts is reported in the Condensed Consolidated Statements of Cash Flows as a cash flow from operating activities. Interest Rate Risk The Company is exposed to interest rate risk related to its borrowing obligations. From time to time, the Company enters into interest rate swap arrangements to manage the risk. Management has designated the swap agreements as cash flow hedges and recognized the changes in the fair value of these swaps in other comprehensive income. As of July 4, 2021 and January 3, 2021, the Company has recorded liabilities of $24.5 million and $32.8 million, respectively, related to the fair market values of its interest rate derivatives. The cash flows associated with the interest rate swaps are reflected in the operating activities in the Condensed Consolidated Statements of Cash Flows, which is consistent with the classification as operating activities of the interest payments on the term loan. Foreign Currency Exchange Rate Risk The Company is exposed to foreign currency risk primarily from its investments in consolidated subsidiaries that operate in the United Kingdom, Ireland, Australia, New Zealand, Mexico and Japan. In order to mitigate foreign exchange fluctuations, the Company enters into foreign exchange forward contracts. Management has not designated these forward contracts as hedges. As of July 4, 2021 and January 3, 2021, the total notional amount of foreign exchange derivatives was $44.3 million and $26.7 million, respectively. They were scheduled to mature between July 2021 and September 2021, and in January 2021, respectively. The Company recorded a liability of $0.4 million and an asset of $0.1 million as of July 4, 2021 and January 3, 2021, respectively, related to the fair market values of its foreign exchange derivatives. Quantitative Summary of Derivative Positions and Their Effect on Results of Operations The following tables present the fair values of derivative instruments included in the Condensed Consolidated Balance Sheets as of July 4, 2021 and January 3, 2021, for derivatives not designated as hedging instruments and derivatives designated as hedging instruments, respectively. The Company only has cash flow hedges that are designated as hedging instruments. Derivatives Fair Value Derivatives Not Designated as Hedging Instruments July 4, January 3, Balance Sheet Location Foreign currency derivatives $ — $ 131 Prepaid expense and other current assets Commodity derivatives 1,890 420 Prepaid expense and other current assets $ 1,890 $ 551 Foreign currency derivatives $ 393 $ — Accrued liabilities $ 393 $ — Derivatives Fair Value Derivatives Designated as Hedging Instruments July 4, January 3, Balance Sheet Location Interest rate derivatives $ 9,935 $ 10,235 Accrued liabilities Interest rate derivatives 14,568 22,578 Other long-term obligations and deferred credits $ 24,503 $ 32,813 The effect of derivative instruments on the Condensed Consolidated Statements of Operations for the quarter and two quarters ended July 4, 2021 and June 28, 2020 is as follows: Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivative Gain/(Loss) Recognized in Income for the Two Quarters Ended Derivatives Designated as Hedging Instruments July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Location of Derivative Gain/(Loss) Loss on interest rate derivatives $ (2,561) $ (1,962) $ (5,091) $ (2,657) Interest expense, net $ (2,561) $ (1,962) $ (5,091) $ (2,657) Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivative Gain/(Loss) Recognized in Income for the Two Quarters Ended Derivatives Not Designated as Hedging Instruments July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Location of Derivative Gain/(Loss) Gain/(loss) on foreign currency derivatives $ 235 $ (294) $ (375) $ 185 Other non-operating income, net Gain/(loss) on commodity derivatives 477 1,419 1,470 (874) Other non-operating income, net $ 712 $ 1,125 $ 1,095 $ (689) |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jul. 04, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based Compensation Restricted Stock Units (“RSUs”) The Company and certain of its subsidiaries issue time-vested RSUs under their respective executive ownership plans and long-term incentive plans. The time-vested RSUs are awarded to eligible employees and non-employee directors and entitle the grantee to receive shares of common stock at the end of a vesting period. Certain RSUs vest in 54 months from the date of grant and include a minimum holding period of six months before the shareholder may redeem the shares. Certain RSUs granted during the second quarter of 2021 vest over a 60-month period subsequent to the grant date (with 60% vesting during the third year following the grant date, 20% vesting during the fourth year, and 20% vesting at the end of the 60-month term). Throughout the vesting period and the holding period, shareholders are subject to the market risk on the value of their shares. RSU activity under the Company’s various plans during the periods presented is as follows: Non-vested shares outstanding at January 3, Granted RSU Dividend Equivalents Vested Forfeited Non-vested shares outstanding at July 4, KKI (1) RSUs 4,649,551 2,772,199 1,018,629 2,389,567 224,675 5,826,137 Weighted Average Grant Date Fair Value $ 11.37 18.39 — 9.41 13.17 $ 13.46 KKUK RSUs 404,568 — — 351,500 — 53,068 Weighted Average Grant Date Fair Value $ 12.45 — — 12.22 — $ 13.98 Insomnia Cookies RSUs 29,279 15,173 — — 3,488 40,964 Weighted Average Grant Date Fair Value $ 68.87 97.77 — — 78.31 $ 78.77 KK Australia RSUs 1,844,241 78,534 — — — 1,922,775 Weighted Average Grant Date Fair Value $ 1.48 1.45 — — — $ 1.48 KK Mexico RSUs 25,055 167 — — — 25,222 Weighted Average Grant Date Fair Value $ 29.21 28.69 — — — $ 29.21 1. For KKI RSU holders that did not vest upon IPO, dividend equivalent shares were granted after the IPO at a weighted average grant date fair value of zero. The vesting terms for the dividend equivalent shares are the same as the underlying RSUs. The KKI shares presented have been retroactively adjusted to give effect to the Stock Split and the Merger. The Company recorded total non-cash compensation expense related to RSUs under the plans of $7.4 million and $9.8 million for the quarter and two quarters ended July 4, 2021, respectively, and $3.0 million and $6.2 million for the quarter and two quarters ended June 28, 2020, respectively. The unrecognized compensation cost related to the unvested RSUs and the weighted-average period over which such cost is expected to be recognized are as follows: As of July 4, 2021 Unrecognized Recognized over a KKI $ 62,542 3.4 years KKUK 327 0.9 years Insomnia Cookies 2,426 3.4 years KK Australia 944 1.2 years KK Mexico $ 654 4.0 years The estimated fair value of restricted stock is calculated using a market approach (i.e. market multiple is used for the KKUK and Insomnia Cookies’ plans and an agreed-upon EBITDA buyout multiple is used for KK Australia and KK Mexico plans). Time-Vested Stock Options KKI issues time-vested stock options under its Omnibus Incentive Plan. The stock options are awarded to eligible employees and entitle the grantee to purchase shares of common stock at the respective exercise price at the end of a vesting period. Stock options vest over a 60-month period subsequent to the grant date (with 60% vesting during the third year following the grant date, 20% vesting during the fourth year, and 20% vesting at the end of the 60-month term), and as such are subject to a service condition. The maximum contractual term of the stock options is 10 years. The fair value of time-vested stock options was estimated on the date of grant using the Black-Scholes option pricing model. This model is impacted by the Company’s stock price and certain assumptions related to the Company’s stock and employees’ exercise behavior. The expected term for stock options granted during fiscal year 2021 was estimated utilizing the simplified method. We utilized the simplified method because the Company did not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The risk-free interest rate assumption was based on yields of U.S. Treasury securities in effect at the date of grant with terms similar to the expected term. Expected volatility was estimated based on the Company’s historical volatility, and also considering historical volatility of peer companies over a period equivalent to the expected term. Additionally, the dividend yield was estimated based on dividends currently being paid on the underlying common stock at the date of grant. Estimated and actual forfeitures have not had a material impact on share-based compensation expense. The following weighted-average assumptions were utilized in determining the fair value of the time-vested stock options granted during fiscal year 2021: Quarter Ended Year Ended July 4, January 3, KKI Risk-free interest rate 1.3 % — % Expected volatility 34.4 % — % Dividend yield 1.0 % — % Expected term (years) 6.8 years — A summary of the status of the time-vested stock options as of January 3, 2021 and changes during fiscal year 2021 is presented below: Share options outstanding at Share options outstanding at January 3, Granted Exercised Forfeited or expired July 4, KKI Options — 2,817,398 — — 2,817,398 Weighted Average Grant Date Fair Value $ — $ 6.10 $ — $ — $ 6.10 Weighted Average Exercise Price $ — $ 14.61 $ — $ — $ 14.61 Weighted Average Remaining Contractual Term (years) — 9.8 years Aggregate Intrinsic Value (in thousands) $ — $ 12,714 The Company recorded total non-cash compensation expense related to the time-vested stock options of $0.9 million for the quarter and two quarters ended July 4, 2021. The unrecognized compensation cost related to the unvested stock options and the weighted-average period over which such cost is expected to be recognized are as follows: As of July 4, 2021 Unrecognized compensation cost Recognized over a weighted-average period of KKI $ 16,313 3.4 years |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 04, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For interim tax reporting, the Company estimates a worldwide annual effective tax rate and applies that rate to the year-to-date ordinary income/(loss). The tax effects of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur. The Company’s effective income tax rates were (195.60)% and (222.58)% for the quarter and two quarters ended July 4, 2021, respectively and 11.38% and 11.40% for the quarter and two quarters ended June 28, 2020, respectively. The Company’s effective income tax rate for the quarter and two quarters ended July 4, 2021 differed from the respective statutory rates primarily due to the revaluation of U.K. deferred taxes as a result of the increase in the corporate tax rate from 19.0% to 25.0% beginning in 2023 and disallowed executive compensation expense in connection with the IPO. The Company’s effective income tax rates were also impacted by the mix of income and taxes attributable to foreign jurisdictions. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 04, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Pending Litigation K 2 Asia litigation On April 7, 2009, a Cayman Islands corporation, K 2 Asia Ventures and its owners filed a lawsuit in Forsyth County, North Carolina Superior Court against the Company, the Company’s 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 sought at least $3.0 million. The Company believes that these allegations lack merit and continues to vigorously defend against the lawsuit. 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 Condensed Consolidated Financial Statements. Insomnia Cookies litigation related to employee wages Insomnia Cookies is currently a party to a class action lawsuit alleging violations of unfair competition, unpaid minimum wages, unpaid overtime, meal and rest period violations and unpaid premiums, failure to reimburse for business expenses, untimely paid wages, and violation of the California Private Attorneys General Act. Insomnia Cookies vigorously disputes these claims. On March 11, 2021, the parties participated in a mediation and reached a class wide settlement and release of claims in principle for $0.4 million, expected to be paid during the quarter ended October 3, 2021. The parties have executed a memorandum of understanding memorializing the key settlement terms and are in the process of finalizing long form settlement documents and seeking preliminary court approval of the settlement. TSW Food, LLC litigation On November 13, 2020, TSW Foods, LLC (“TSW”), a reseller of certain Krispy Kreme packaged products, filed a demand for arbitration and statement of claim alleging Anticipatory Repudiation of the Master Reseller Agreement, Breach of the Master Reseller Agreement, and Breach of the Implied Covenant of Good Faith and Fair Dealing. The Company intends to vigorously defend against TSW’s claims and prosecute its counterclaims. At this time the Company is unable to predict the outcome of this matter, the potential loss or range of loss, if any, associated with the resolution of this matter or any potential effect it may have on the Company or its operations. 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 Condensed Consolidated Financial Statements. Other Commitments and Contingencies |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jul. 04, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of July 4, 2021 and January 3, 2021, the Company had an equity ownership in two franchisees, KremeWorks USA, LLC (20% ownership) and KremeWorks Canada, L.P. (25% ownership), with an aggregate carrying value of $0.7 million and $0.9 million as of July 4, 2021 and January 3, 2021, respectively. Revenues from sales of ingredients and equipment to these franchisees were $1.9 million and $3.8 million for the quarter and two quarters ended July 4, 2021, respectively, and $1.7 million and $3.4 million for the quarter and two quarters ended June 28, 2020, respectively. Royalty revenues from these franchisees were $0.4 million and $0.7 million for the quarter and two quarters ended July 4, 2021, respectively, and $0.3 million and $0.6 million for the quarter and two quarters ended June 28, 2020. Trade receivables from these franchisees are included in Accounts receivable, net on the Condensed Consolidated Balance Sheets, which were $0.4 million and $0.4 million as of July 4, 2021 and January 3, 2021, respectively. Keurig Dr Pepper Inc. (“KDP”), an affiliated company of JAB, licenses the Krispy Kreme trademark for the Company in the manufacturing of portion packs for the Keurig brewing system. KDP also sells beverage concentrates and packaged beverages to Krispy Kreme for resale through Krispy Kreme’s shops. Licensing revenues from KDP were $0.5 million and $1.0 million for the quarter and two quarters ended July 4, 2021, respectively, and $0.3 million and $0.8 million for the quarter and two quarters ended June 28, 2020, respectively. The Company had service agreements with BDT Capital Partners, LLC (“BDT”), a minority investor in KKI, to provide advisory services to the Company, including valuation services related to certain acquisitions. The Company recognized expenses of $0.6 million related to the service agreements with BDT for the two quarters ended July 4, 2021, and $0.1 million and $0.6 million for the quarter and two quarters ended June 28, 2020, respectively. No related expenses were incurred for the quarter ended July 4, 2021. In connection with valuation assistance provided by BDT in preparation for the IPO, the Company incurred costs of $6.3 million that are capitalized in additional paid-in capital for the quarter and two quarters ended July 4, 2021. No related costs were incurred for the quarter and two quarters ended June 28, 2020. In connection with tax sharing arrangements with JAB and other JAB portfolio companies, the Company had a $7.4 million related party receivable from JAB and a $15.3 million related party payable to the other JAB portfolio companies offset by a $15.3 million income tax receivable due from taxing authorities as of January 3, 2021. No related party receivable or related party payable was due to JAB or other JAB portfolio companies as of July 4, 2021, as these amounts were settled. The related party receivable amounts were presented within Accounts receivable, net on the Condensed Consolidated Balance Sheet as of January 3, 2021. The Company was party to a senior unsecured note agreement (the “original agreement”) with KK GP. In the original agreement, which was outstanding prior to fiscal year ended December 30, 2018, the aggregate principal amount was $283.1 million. In April 2019, the Company entered into an additional unsecured note with KK GP for $54.0 million (the “additional agreement”). As of January 3, 2021, the outstanding amount of principal and interest was $344.6 million. The note was paid off in full during the quarter ended July 4, 2021. The interest expense was $4.8 million and $10.4 million for the quarter and two quarters ended July 4, 2021, respectively, and $5.6 million and $11.1 million for the quarter and two quarters ended June 28, 2020. The Company granted loans to employees of KKI, KKUK, KK Australia, KK Mexico and Insomnia Cookies for the purchase of shares in those subsidiaries. The loan balance was $3.8 million and $18.7 million as of July 4, 2021 and January 3, 2021, respectively, and it is presented as a reduction from Shareholders’ equity on the Condensed Consolidated Balance Sheet. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jul. 04, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenues Revenues are disaggregated as follows: Quarter Ended Two Quarters Ended July 4, June 28, July 4, June 28, Company shops, Branded Sweet Treat Line and DFD $ 329,775 $ 218,336 $ 630,270 $ 448,950 Mix and equipment revenue from franchisees 11,448 18,272 24,538 39,194 Franchise royalties and other 7,963 8,364 16,187 18,044 Total net revenues $ 349,186 $ 244,972 $ 670,995 $ 506,188 Other revenues include advertising fund contributions, rental income, development and franchise fees and licensing royalties from Keurig related to Krispy Kreme brands coffee sales. Contract Balances Deferred revenue subject to Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , and related receivables are as follows: July 4, January 3, Balance Sheet Classification Trade receivables, net of allowances of $954 and $1,437, respectively $ 38,344 $ 39,624 Accounts receivables, net Deferred revenue Current 17,341 16,045 Accrued liabilities Noncurrent 2,824 2,838 Other long-term obligations and deferred credits Total deferred revenue $ 20,165 $ 18,883 |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jul. 04, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share The following table presents the calculations of basic and diluted EPS: Quarter Ended Two Quarters Ended (In thousands, except share and per share amounts) July 4, June 28, July 4, June 28, Net loss attributable to Krispy Kreme, Inc. $ (17,142) $ (12,630) $ (20,203) $ (24,145) Adjustment to net loss attributable to common shareholders (424) (253) (417) (150) Net loss attributable to common shareholders - Basic $ (17,566) $ (12,883) $ (20,620) $ (24,295) Additional income attributed to noncontrolling interest due to subsidiary potential common shares (120) (18) (145) (27) Net loss attributable to common shareholders - Diluted $ (17,686) $ (12,901) $ (20,765) $ (24,322) Basic weighted average common shares outstanding 132,351,087 124,987,370 128,669,228 124,987,370 Dilutive effect of outstanding common stock options and RSUs — — — — Diluted weighted average common shares outstanding 132,351,087 124,987,370 128,669,228 124,987,370 Loss per share attributable to common shareholders: Basic $ (0.13) $ (0.10) $ (0.16) $ (0.19) Diluted $ (0.13) $ (0.10) $ (0.16) $ (0.19) Potential dilutive shares consist of unvested RSUs, calculated using the treasury stock method. The calculation of dilutive shares outstanding excludes certain unvested RSUs granted under certain subsidiaries’ executive ownership plans and long-term incentive plans, because their inclusion would have been antidilutive. Refer to Note 8 , Share-based Compensation, to the Condensed Consolidated Financial Statements for further information about the plans. The following table summarizes the number of unvested RSUs excluded due to antidilution: Quarter Ended Two Quarters Ended July 4, June 28, July 4, June 28, KKI 5,317,943 4,426,789 5,237,844 4,356,259 KKUK 3,258 416,068 3,258 416,068 Insomnia Cookies — 24,069 — 26,175 KK Australia — — — — KK Mexico — — — — The 2,817,398 KKI time-vested stock options were also excluded from the computations for the quarter and two quarters ended July 4, 2021 due to antidilution. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jul. 04, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company conducts business through the three reportable segments: U.S. and Canada, International, and Market Development. Unallocated corporate costs are excluded from the Company’s measurement of segment performance. These costs include general corporate expenses. The reportable segment results are as follows: Quarter Ended Two Quarters Ended July 4, June 28, July 4, June 28, Net revenues: U.S. and Canada $ 230,918 $ 184,255 $ 453,388 $ 354,705 International 89,237 34,412 155,743 95,071 Market Development 29,031 26,305 61,864 56,412 Total net revenues $ 349,186 $ 244,972 $ 670,995 $ 506,188 Quarter Ended Two Quarters Ended July 4, June 28, July 4, June 28, Segment adjusted EBITDA: U.S. and Canada $ 28,285 $ 27,551 $ 55,848 $ 49,188 International 23,673 1,618 39,021 12,811 Market Development 9,858 7,880 20,749 18,585 Corporate (9,423) (7,580) (16,822) (14,671) 52,393 29,469 98,796 65,913 Interest expense, net 9,793 9,711 18,042 18,355 Interest expense — related party (1) 4,821 5,566 10,387 11,132 Income tax expense/(benefit) 9,923 (1,500) 10,608 (2,912) Depreciation and amortization expense 25,194 18,097 48,595 37,184 Share-based compensation 8,290 2,970 10,658 6,141 Employer payroll taxes related to share-based compensation 841 — 841 — Other non-operating income, net (2) (416) (2,660) (858) (112) New York City flagship Hot Light Theater Shop opening (3) — 1,667 — 4,239 Strategic initiatives (4) — 5,661 — 9,274 Acquisition and integration expenses (5) 223 812 2,375 4,423 Shop closure expenses (6) — 2,786 — 2,786 Restructuring and severance expenses (7) 1,336 — 1,336 — IPO-related expenses (8) 6,727 — 10,203 — Other (9) 657 (1,956) 1,983 (1,964) Net Loss $ (14,996) $ (11,685) $ (15,374) $ (22,633) 1. Consists of interest expense related to the Related Party Notes which were paid off in full during the quarter ended July 4, 2021. 2. Primarily foreign translation gains and losses in each period. 3. C onsists of pre-opening costs related to our New York City flagship Hot Light Theater Shop opening, including shop design, rent, and additional consulting and training costs incurred and reflected in selling, general and administrative expenses. 4. The quarter and two quarters ended June 28, 2020 consists mainly of consulting and advisory fees, personnel transition costs, and network conversion and set-up costs related to the transformation of the Company’s legacy wholesale business in the United States. 5. Consists of acquisition and integration-related costs in connection with the Company’s business and franchise acquisitions, including legal, due diligence, consulting and advisory fees incurred in connection with acquisition-related activities for the applicable period. 6. Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment. 7. Consists of severance and related benefits costs associated with the Company’s realignment of the Company shop organizational structure to better support the DFD and Branded Sweet Treat Line businesses. 8. Includes consulting and advisory fees incurred in connection with preparation for the Company’s IPO. 9. The quarter and two quarters ended July 4, 2021 consist primarily of legal expenses incurred on matters described in Note 10 , Commitments and Contingencies. The quarter and two quarters ended June 28, 2020 consists primarily of a gain on the sale of land. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jul. 04, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company evaluated subsequent events and transactions for potential recognition or disclosure in the Condensed Consolidated Financial Statements through August 17, 2021, the date the Condensed Consolidated Financial Statements were available to be issued. All subsequent events requiring recognition and disclosure have been incorporated into these Condensed Consolidated Financial Statements. On July 7, 2021, the Company repaid in full and terminated the Term Loan Facility with a cash outflow of $500.7 million, which included $0.7 million of accrued interest. During July 2021, the Company took a drawdown of $100.0 million on the 2019 Facility’s (as defined below) revolving credit facility in part to fund IPO-related items discussed in Note 1 , Description of Business and Summary of Significant Accounting Policies to the Condensed Consolidated Financial Statements. Subsequent to the quarter ended July 4, 2021 and through August 9, 2021 the Company also repaid a cumulative $65.0 million on the 2019 Facility’s revolving credit facility, to reduce the outstanding balance on the revolving credit facility to $40.0 million as of August 9, 2021. This repayment activity in part was funded by the underwriters’ exercise of the over-allotment option discussed in Note 1 . During August 2021, the Company granted 431,115 RSUs to certain employees. The estimated fair value of the RSUs was $6.9 million. |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements (Policies) | 6 Months Ended |
Jul. 04, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The Company operates and reports financial information on a 52 or 53-week year with the fiscal year ending on the Sunday closest to December 31. The data periods contained within fiscal years 2020 and 2021 reflect the results of operations for the 53-week period ended January 3, 2021 and the 52-week period ended January 2, 2022, respectively. The quarters ended July 4, 2021 and June 28, 2020 were both 13-week periods.The unaudited Condensed Consolidated Financial Statements include the accounts of KKI and subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, these interim financial statements do not include all information and footnotes required under U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of results of operations, balance sheet, cash flows, and shareholders’ equity for the periods presented. All significant intercompany balances and transactions among KKI and subsidiaries have been eliminated in consolidation. Investments in entities over which the Company has the ability to exercise significant influence but which it does not control and whose financial statements are not otherwise required to be consolidated, are accounted for using the equity method. |
Consolidation | These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto as of and for the year ended January 3, 2021, included in the IPO Prospectus. The Condensed Consolidated Balance Sheet as of January 3, 2021 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The results of operations for the second quarter ended July 4, 2021 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending January 2, 2022. Noncontrolling interest in the Company’s Condensed Consolidated Financial Statements represents the interest in subsidiaries held by joint venture partners and employee shareholders. The joint venture partners hold noncontrolling interests in the Company’s consolidated subsidiaries, Awesome Doughnut, LLC (“Awesome Doughnut”) and W.K.S. Krispy Kreme, LLC (“WKS Krispy Kreme”). Employee shareholders hold noncontrolling interests in the consolidated subsidiaries Krispy Kreme Holding UK Ltd. (“KKUK”), Krispy Kreme Holdings Pty Ltd (“KK Australia”), Krispy Kreme Mexico S. de R.L. de C.V. (“KK Mexico”) and Insomnia Cookies Holdings, LLC (“Insomnia Cookies”). Since the Company consolidates the financial statements of these subsidiaries, the noncontrolling owners’ share of each subsidiary’s net assets and results of operations are deducted and reported as noncontrolling interest on the Condensed Consolidated Balance Sheets and as net income attributable to noncontrolling interest in the Condensed Consolidated Statements of Operations and comprehensive income attributable to noncontrolling interest in the Condensed Consolidated Statements of Comprehensive Income/(Loss). |
Reclassifications | Reclassifications On the Condensed Consolidated Statements of Operations, Marketing expenses have been reclassified (formerly presented within Selling, general and administrative expense) to be consistent with the current quarter presentation. This reclassification does not have a significant impact on the reported financial position and does not impact the results of operations or cash flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes . ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions in Topic 740 and clarifying and amending existing guidance. The Company adopted ASU 2019-12 at the beginning of fiscal year 2021, and the adoption had no material impact to the Company’s Condensed Consolidated Financial Statements. In June 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition for the acquisitions above. KK U.S. Shops Assets acquired: Cash, cash equivalents and restricted cash $ 40 Other current assets 474 Property and equipment, net 3,829 Other intangible assets 23,906 Operating lease right of use asset 19,292 Other assets 115 Total identified assets acquired 47,656 Liabilities assumed: Accrued liabilities (334) Current operating lease liabilities (2,093) Noncurrent operating lease liabilities (17,199) Total liabilities assumed (19,626) Goodwill 10,036 Purchase consideration, net $ 38,066 Transaction costs in 2021 $ 1,225 Transaction costs in 2020 184 Reportable segment U.S. and Canada |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The components of Inventories are as follows: July 4, 2021 January 3, 2021 Raw materials $ 15,915 $ 16,263 Work in progress 603 871 Finished goods and purchased merchandise 21,982 21,385 Total Inventories $ 38,500 $ 38,519 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill by Reportable Segment | Changes in the carrying amount of goodwill by reportable segment are as follows: U.S. and Canada International Market Development Total Balance as of January 3, 2021 $ 642,704 $ 290,872 $ 152,970 $ 1,086,546 Acquisitions 27,560 — (17,524) 10,036 Measurement periods adjustments related to fiscal year 2020 acquisitions 186 — — 186 Foreign currency impact (1,399) — (1,399) Balance as of July 4, 2021 $ 670,450 $ 289,473 $ 135,446 $ 1,095,369 |
Schedule of Indefinite-Lived Intangible Assets | Other intangible assets consist of the following: July 4, 2021 January 3, 2021 Gross Accumulated Net Amount Gross Accumulated Net Amount Intangible assets with indefinite lives Trade name $ 657,900 $ — $ 657,900 $ 657,900 $ — $ 657,900 Intangible assets with definite lives Franchise agreements 32,961 (7,697) 25,264 36,254 (7,519) 28,735 Customer relationships 15,000 (4,251) 10,749 15,000 (3,819) 11,181 Reacquired franchise rights 381,782 (72,197) 309,585 358,095 (59,432) 298,663 Website development costs 6,500 (6,050) 450 6,500 (4,965) 1,535 Total intangible assets with definite lives 436,243 (90,195) 346,048 415,849 (75,735) 340,114 Total intangible assets $ 1,094,143 $ (90,195) $ 1,003,948 $ 1,073,749 $ (75,735) $ 998,014 |
Schedule of Finite-Lived Intangible Assets | Other intangible assets consist of the following: July 4, 2021 January 3, 2021 Gross Accumulated Net Amount Gross Accumulated Net Amount Intangible assets with indefinite lives Trade name $ 657,900 $ — $ 657,900 $ 657,900 $ — $ 657,900 Intangible assets with definite lives Franchise agreements 32,961 (7,697) 25,264 36,254 (7,519) 28,735 Customer relationships 15,000 (4,251) 10,749 15,000 (3,819) 11,181 Reacquired franchise rights 381,782 (72,197) 309,585 358,095 (59,432) 298,663 Website development costs 6,500 (6,050) 450 6,500 (4,965) 1,535 Total intangible assets with definite lives 436,243 (90,195) 346,048 415,849 (75,735) 340,114 Total intangible assets $ 1,094,143 $ (90,195) $ 1,003,948 $ 1,073,749 $ (75,735) $ 998,014 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | The Company included the following amounts related to operating and finance assets and liabilities within the Condensed Consolidated Balance Sheets: As of July 4, 2021 January 3, 2021 Assets Classification Operating lease Operating lease right of use asset, net $ 414,096 $ 399,688 Finance lease Property and equipment, net 24,236 23,556 Total leased assets $ 438,332 $ 423,244 Liabilities Current Operating lease Current operating lease liabilities $ 46,763 $ 45,675 Finance lease Current portion of long-term debt 3,985 6,245 Noncurrent Operating lease Noncurrent operating lease liabilities 390,962 376,099 Finance lease Long-term debt, less current portion 22,293 19,979 Total leased liabilities $ 464,003 $ 447,998 |
Schedule of Lease Costs and Supplemental Cash Flow Information Related to Leases | Lease costs were as follows: Quarter Ended Two Quarters Ended July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 609 $ 755 $ 1,319 $ 1,573 Operating lease cost Operating expenses 21,368 16,110 41,706 33,599 Short-term lease cost Operating expenses 792 797 1,564 1,429 Variable lease costs Operating expenses 4,218 676 7,297 3,888 Sublease income Royalties and other revenues (97) (130) (177) (239) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense 850 331 1,648 1,331 Interest on lease liabilities Interest expense, net $ 481 $ 836 $ 1,074 $ 1,062 Supplemental disclosures of cash flow information related to leases were as follows: Two Quarters Ended July 4, 2021 June 28, 2020 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 45,889 $ 35,638 Operating cash flows from finance leases 984 971 Financing cash flows from finance leases 1,705 1,899 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases 39,473 6,296 Finance leases $ 1,788 $ 6,827 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents assets and liabilities that are measured at fair value on a recurring basis as of July 4, 2021 and January 3, 2021: July 4, 2021 Level 1 Level 2 Level 3 Assets: 401(k) mirror plan assets $ 215 $ — $ — Commodity derivatives — 1,890 — Total Assets $ 215 $ 1,890 $ — Liabilities: Foreign currency derivative — 393 — Interest rate derivative — 24,503 — Total Liabilities $ — $ 24,896 $ — January 3, 2021 Level 1 Level 2 Level 3 Assets: 401(k) mirror plan assets $ 237 $ — $ — Foreign currency derivative — 131 — Commodity derivatives — 420 — Total Assets $ 237 $ 551 $ — Liabilities: Interest rate derivative — 32,813 — Total Liabilities $ — $ 32,813 $ — |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Condensed Consolidated Balance Sheets, Fair Value | The following tables present the fair values of derivative instruments included in the Condensed Consolidated Balance Sheets as of July 4, 2021 and January 3, 2021, for derivatives not designated as hedging instruments and derivatives designated as hedging instruments, respectively. The Company only has cash flow hedges that are designated as hedging instruments. Derivatives Fair Value Derivatives Not Designated as Hedging Instruments July 4, January 3, Balance Sheet Location Foreign currency derivatives $ — $ 131 Prepaid expense and other current assets Commodity derivatives 1,890 420 Prepaid expense and other current assets $ 1,890 $ 551 Foreign currency derivatives $ 393 $ — Accrued liabilities $ 393 $ — Derivatives Fair Value Derivatives Designated as Hedging Instruments July 4, January 3, Balance Sheet Location Interest rate derivatives $ 9,935 $ 10,235 Accrued liabilities Interest rate derivatives 14,568 22,578 Other long-term obligations and deferred credits $ 24,503 $ 32,813 |
Schedule of Derivative Instruments in Condensed Consolidated Statements of Operations, Gain (Loss) | The effect of derivative instruments on the Condensed Consolidated Statements of Operations for the quarter and two quarters ended July 4, 2021 and June 28, 2020 is as follows: Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivative Gain/(Loss) Recognized in Income for the Two Quarters Ended Derivatives Designated as Hedging Instruments July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Location of Derivative Gain/(Loss) Loss on interest rate derivatives $ (2,561) $ (1,962) $ (5,091) $ (2,657) Interest expense, net $ (2,561) $ (1,962) $ (5,091) $ (2,657) Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivative Gain/(Loss) Recognized in Income for the Two Quarters Ended Derivatives Not Designated as Hedging Instruments July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Location of Derivative Gain/(Loss) Gain/(loss) on foreign currency derivatives $ 235 $ (294) $ (375) $ 185 Other non-operating income, net Gain/(loss) on commodity derivatives 477 1,419 1,470 (874) Other non-operating income, net $ 712 $ 1,125 $ 1,095 $ (689) |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | RSU activity under the Company’s various plans during the periods presented is as follows: Non-vested shares outstanding at January 3, Granted RSU Dividend Equivalents Vested Forfeited Non-vested shares outstanding at July 4, KKI (1) RSUs 4,649,551 2,772,199 1,018,629 2,389,567 224,675 5,826,137 Weighted Average Grant Date Fair Value $ 11.37 18.39 — 9.41 13.17 $ 13.46 KKUK RSUs 404,568 — — 351,500 — 53,068 Weighted Average Grant Date Fair Value $ 12.45 — — 12.22 — $ 13.98 Insomnia Cookies RSUs 29,279 15,173 — — 3,488 40,964 Weighted Average Grant Date Fair Value $ 68.87 97.77 — — 78.31 $ 78.77 KK Australia RSUs 1,844,241 78,534 — — — 1,922,775 Weighted Average Grant Date Fair Value $ 1.48 1.45 — — — $ 1.48 KK Mexico RSUs 25,055 167 — — — 25,222 Weighted Average Grant Date Fair Value $ 29.21 28.69 — — — $ 29.21 1. For KKI RSU holders that did not vest upon IPO, dividend equivalent shares were granted after the IPO at a weighted average grant date fair value of zero. The vesting terms for the dividend equivalent shares are the same as the underlying RSUs. The KKI shares presented have been retroactively adjusted to give effect to the Stock Split and the Merger. |
Share-based Payment Arrangement, Nonvested Award, Cost | The unrecognized compensation cost related to the unvested RSUs and the weighted-average period over which such cost is expected to be recognized are as follows: As of July 4, 2021 Unrecognized Recognized over a KKI $ 62,542 3.4 years KKUK 327 0.9 years Insomnia Cookies 2,426 3.4 years KK Australia 944 1.2 years KK Mexico $ 654 4.0 years The unrecognized compensation cost related to the unvested stock options and the weighted-average period over which such cost is expected to be recognized are as follows: As of July 4, 2021 Unrecognized compensation cost Recognized over a weighted-average period of KKI $ 16,313 3.4 years |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following weighted-average assumptions were utilized in determining the fair value of the time-vested stock options granted during fiscal year 2021: Quarter Ended Year Ended July 4, January 3, KKI Risk-free interest rate 1.3 % — % Expected volatility 34.4 % — % Dividend yield 1.0 % — % Expected term (years) 6.8 years — |
Share-based Payment Arrangement, Option, Activity | A summary of the status of the time-vested stock options as of January 3, 2021 and changes during fiscal year 2021 is presented below: Share options outstanding at Share options outstanding at January 3, Granted Exercised Forfeited or expired July 4, KKI Options — 2,817,398 — — 2,817,398 Weighted Average Grant Date Fair Value $ — $ 6.10 $ — $ — $ 6.10 Weighted Average Exercise Price $ — $ 14.61 $ — $ — $ 14.61 Weighted Average Remaining Contractual Term (years) — 9.8 years Aggregate Intrinsic Value (in thousands) $ — $ 12,714 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenues are disaggregated as follows: Quarter Ended Two Quarters Ended July 4, June 28, July 4, June 28, Company shops, Branded Sweet Treat Line and DFD $ 329,775 $ 218,336 $ 630,270 $ 448,950 Mix and equipment revenue from franchisees 11,448 18,272 24,538 39,194 Franchise royalties and other 7,963 8,364 16,187 18,044 Total net revenues $ 349,186 $ 244,972 $ 670,995 $ 506,188 |
Summary of Contract Balances with Customers | Deferred revenue subject to Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , and related receivables are as follows: July 4, January 3, Balance Sheet Classification Trade receivables, net of allowances of $954 and $1,437, respectively $ 38,344 $ 39,624 Accounts receivables, net Deferred revenue Current 17,341 16,045 Accrued liabilities Noncurrent 2,824 2,838 Other long-term obligations and deferred credits Total deferred revenue $ 20,165 $ 18,883 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share, Basic and Diluted | The following table presents the calculations of basic and diluted EPS: Quarter Ended Two Quarters Ended (In thousands, except share and per share amounts) July 4, June 28, July 4, June 28, Net loss attributable to Krispy Kreme, Inc. $ (17,142) $ (12,630) $ (20,203) $ (24,145) Adjustment to net loss attributable to common shareholders (424) (253) (417) (150) Net loss attributable to common shareholders - Basic $ (17,566) $ (12,883) $ (20,620) $ (24,295) Additional income attributed to noncontrolling interest due to subsidiary potential common shares (120) (18) (145) (27) Net loss attributable to common shareholders - Diluted $ (17,686) $ (12,901) $ (20,765) $ (24,322) Basic weighted average common shares outstanding 132,351,087 124,987,370 128,669,228 124,987,370 Dilutive effect of outstanding common stock options and RSUs — — — — Diluted weighted average common shares outstanding 132,351,087 124,987,370 128,669,228 124,987,370 Loss per share attributable to common shareholders: Basic $ (0.13) $ (0.10) $ (0.16) $ (0.19) Diluted $ (0.13) $ (0.10) $ (0.16) $ (0.19) |
Schedule of Antidilutive Unvested RSUs Excluded from Computation of Net Loss per Share | The following table summarizes the number of unvested RSUs excluded due to antidilution: Quarter Ended Two Quarters Ended July 4, June 28, July 4, June 28, KKI 5,317,943 4,426,789 5,237,844 4,356,259 KKUK 3,258 416,068 3,258 416,068 Insomnia Cookies — 24,069 — 26,175 KK Australia — — — — KK Mexico — — — — |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The reportable segment results are as follows: Quarter Ended Two Quarters Ended July 4, June 28, July 4, June 28, Net revenues: U.S. and Canada $ 230,918 $ 184,255 $ 453,388 $ 354,705 International 89,237 34,412 155,743 95,071 Market Development 29,031 26,305 61,864 56,412 Total net revenues $ 349,186 $ 244,972 $ 670,995 $ 506,188 Quarter Ended Two Quarters Ended July 4, June 28, July 4, June 28, Segment adjusted EBITDA: U.S. and Canada $ 28,285 $ 27,551 $ 55,848 $ 49,188 International 23,673 1,618 39,021 12,811 Market Development 9,858 7,880 20,749 18,585 Corporate (9,423) (7,580) (16,822) (14,671) 52,393 29,469 98,796 65,913 Interest expense, net 9,793 9,711 18,042 18,355 Interest expense — related party (1) 4,821 5,566 10,387 11,132 Income tax expense/(benefit) 9,923 (1,500) 10,608 (2,912) Depreciation and amortization expense 25,194 18,097 48,595 37,184 Share-based compensation 8,290 2,970 10,658 6,141 Employer payroll taxes related to share-based compensation 841 — 841 — Other non-operating income, net (2) (416) (2,660) (858) (112) New York City flagship Hot Light Theater Shop opening (3) — 1,667 — 4,239 Strategic initiatives (4) — 5,661 — 9,274 Acquisition and integration expenses (5) 223 812 2,375 4,423 Shop closure expenses (6) — 2,786 — 2,786 Restructuring and severance expenses (7) 1,336 — 1,336 — IPO-related expenses (8) 6,727 — 10,203 — Other (9) 657 (1,956) 1,983 (1,964) Net Loss $ (14,996) $ (11,685) $ (15,374) $ (22,633) 1. Consists of interest expense related to the Related Party Notes which were paid off in full during the quarter ended July 4, 2021. 2. Primarily foreign translation gains and losses in each period. 3. C onsists of pre-opening costs related to our New York City flagship Hot Light Theater Shop opening, including shop design, rent, and additional consulting and training costs incurred and reflected in selling, general and administrative expenses. 4. The quarter and two quarters ended June 28, 2020 consists mainly of consulting and advisory fees, personnel transition costs, and network conversion and set-up costs related to the transformation of the Company’s legacy wholesale business in the United States. 5. Consists of acquisition and integration-related costs in connection with the Company’s business and franchise acquisitions, including legal, due diligence, consulting and advisory fees incurred in connection with acquisition-related activities for the applicable period. 6. Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment. 7. Consists of severance and related benefits costs associated with the Company’s realignment of the Company shop organizational structure to better support the DFD and Branded Sweet Treat Line businesses. 8. Includes consulting and advisory fees incurred in connection with preparation for the Company’s IPO. 9. The quarter and two quarters ended July 4, 2021 consist primarily of legal expenses incurred on matters described in Note 10 , Commitments and Contingencies. The quarter and two quarters ended June 28, 2020 consists primarily of a gain on the sale of land. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | Aug. 02, 2021USD ($)shares | Jul. 07, 2021USD ($) | Jul. 01, 2021USD ($)$ / sharesshares | Jun. 30, 2021 | Jun. 28, 2021USD ($)shares | Jun. 17, 2021USD ($) | Aug. 17, 2021USD ($)shares | Jul. 04, 2021USD ($) | Apr. 04, 2021USD ($) | Jun. 28, 2020USD ($) | Mar. 29, 2020USD ($) | Jul. 04, 2021USD ($)segment | Jun. 28, 2020USD ($) | Jun. 10, 2021USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Number of reportable segments | segment | 3 | |||||||||||||
Proceeds from the issuance of debt | $ 540,000 | $ 263,097 | ||||||||||||
Conversion of noncontrolling interest to additional paid-in capital in connection with the Merger | $ 0 | |||||||||||||
Awards conversion ratio upon Merger (in shares) | shares | 317.24 | |||||||||||||
Stock split, conversion ratio | 1,745 | |||||||||||||
Payments for repurchase and retirement of common stock | 102,700 | 102,698 | 0 | |||||||||||
Accrual for distribution to shareholders | 42,334 | $ 0 | $ 4 | $ 15 | ||||||||||
Payments of dividends | 34,400 | 34,364 | $ 19 | |||||||||||
Unpaid equity distributions and share repurchases | 43,700 | 43,700 | ||||||||||||
Noncontrolling Interest | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Conversion of noncontrolling interest to additional paid-in capital in connection with the Merger | $ 107,400 | 107,351 | ||||||||||||
Notes Payable, Related Party | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Accrued interest | 17,800 | $ 17,800 | ||||||||||||
Repayments of related party debt | $ 355,000 | |||||||||||||
Subsequent Event | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Payments of dividends | $ 7,900 | |||||||||||||
Subsequent Event | Executive Officers, Shares Repurchased at Price Paid by Underwriters | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Payments for repurchase and retirement of common stock | $ 20,300 | |||||||||||||
Shares repurchased during period (in shares) | shares | 1,300,000 | |||||||||||||
Subsequent Event | Executive Officers, Share Repurchased for Payment of Withholding Taxes | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Payments for repurchase and retirement of common stock | $ 15,500 | |||||||||||||
Shares repurchased during period (in shares) | shares | 1,000,000 | |||||||||||||
Term Loan Facility | Secured Debt | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 500,000 | |||||||||||||
Term Loan Facility | Secured Debt | Krispy Kreme Holdings, Inc. (“KKHI”) | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 500,000 | |||||||||||||
Proceeds from the issuance of debt | $ 500,000 | |||||||||||||
Debt issuance costs, net | $ 1,700 | |||||||||||||
Debt, weighted average interest rate | 2.68175% | |||||||||||||
Term Loan Facility | Subsequent Event | Secured Debt | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Repayments of debt | $ 500,700 | |||||||||||||
Accrued interest | $ 700 | |||||||||||||
IPO | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Sale of stock, number of shares issued in transaction | shares | 29,400,000 | |||||||||||||
Sale of stock, consideration received on transaction | $ 459,700 | |||||||||||||
Payments for underwriting discounts and commissions | 28,700 | |||||||||||||
Payments of offering expenses | $ 11,600 | |||||||||||||
IPO | Common Stock | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 17 | |||||||||||||
Over-Allotment Option | Subsequent Event | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Sale of stock, number of shares issued in transaction | shares | 3,500,000 | |||||||||||||
Sale of stock, consideration received on transaction | $ 56,100 | |||||||||||||
Payments of stock issuance costs | $ 3,400 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Apr. 04, 2021USD ($)storeacquiredBusiness | Jan. 03, 2021acquiredBusiness | |
KK U.S. Shops | ||
Business Acquisition [Line Items] | ||
Number of businesses acquired | acquiredBusiness | 2 | |
Number of stores | store | 17 | |
Purchase consideration, net | $ 38.1 | |
Consideration transferred, cash | 33.9 | |
Consideration transferred, amount withheld to cover indemnification claims | $ 0.9 | |
Consideration payable, payment period | 12 months | |
Consideration transferred, settlement of liabilities | $ 3.3 | |
Consideration transferred, accounts and financing receivable, net of deferred revenue, write-off | 0.6 | |
Disposal of acquiree intangible assets, cumulative net book value | $ 2.7 | |
KK Japan | ||
Business Acquisition [Line Items] | ||
Number of businesses acquired | acquiredBusiness | 8 |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jul. 04, 2021 | Apr. 04, 2021 | Jan. 03, 2021 |
Liabilities assumed: | |||
Goodwill | $ 1,095,369 | $ 1,086,546 | |
KK U.S. Shops | |||
Assets acquired: | |||
Cash, cash equivalents and restricted cash | $ 40 | ||
Other current assets | 474 | ||
Property and equipment, net | 3,829 | ||
Other intangible assets | 23,906 | ||
Operating lease right of use asset | 19,292 | ||
Other assets | 115 | ||
Total identified assets acquired | 47,656 | ||
Liabilities assumed: | |||
Accrued liabilities | (334) | ||
Current operating lease liabilities | (2,093) | ||
Noncurrent operating lease liabilities | (17,199) | ||
Total liabilities assumed | (19,626) | ||
Goodwill | 10,036 | ||
Purchase consideration, net | $ 38,066 | ||
Transaction costs | $ 1,225 | $ 184 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 15,915 | $ 16,263 |
Work in progress | 603 | 871 |
Finished goods and purchased merchandise | 21,982 | 21,385 |
Inventories | $ 38,500 | $ 38,519 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jul. 04, 2021USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 1,086,546 |
Acquisitions | 10,036 |
Measurement periods adjustments related to fiscal year 2020 acquisitions | 186 |
Foreign currency impact | (1,399) |
Ending balance | 1,095,369 |
U.S. and Canada | |
Goodwill [Roll Forward] | |
Beginning balance | 642,704 |
Acquisitions | 27,560 |
Measurement periods adjustments related to fiscal year 2020 acquisitions | 186 |
Foreign currency impact | |
Ending balance | 670,450 |
International | |
Goodwill [Roll Forward] | |
Beginning balance | 290,872 |
Acquisitions | 0 |
Measurement periods adjustments related to fiscal year 2020 acquisitions | 0 |
Foreign currency impact | (1,399) |
Ending balance | 289,473 |
Market Development | |
Goodwill [Roll Forward] | |
Beginning balance | 152,970 |
Acquisitions | (17,524) |
Measurement periods adjustments related to fiscal year 2020 acquisitions | 0 |
Foreign currency impact | 0 |
Ending balance | $ 135,446 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | Jan. 03, 2021 | |
Intangible assets with definite lives | |||||
Gross Carrying Amount | $ 436,243 | $ 436,243 | $ 415,849 | ||
Accumulated Amortization | (90,195) | (90,195) | (75,735) | ||
Net Amount | 346,048 | 346,048 | 340,114 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Gross Carrying Amount | 1,094,143 | 1,094,143 | 1,073,749 | ||
Accumulated Amortization | (90,195) | (90,195) | (75,735) | ||
Net Amount | 1,003,948 | 1,003,948 | 998,014 | ||
Amortization of intangible assets | 7,600 | $ 6,200 | 15,100 | $ 12,600 | |
Trade name | |||||
Intangible assets with indefinite lives | |||||
Trade name | 657,900 | 657,900 | 657,900 | ||
Franchise agreements | |||||
Intangible assets with definite lives | |||||
Gross Carrying Amount | 32,961 | 32,961 | 36,254 | ||
Accumulated Amortization | (7,697) | (7,697) | (7,519) | ||
Net Amount | 25,264 | 25,264 | 28,735 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Accumulated Amortization | (7,697) | (7,697) | (7,519) | ||
Customer relationships | |||||
Intangible assets with definite lives | |||||
Gross Carrying Amount | 15,000 | 15,000 | 15,000 | ||
Accumulated Amortization | (4,251) | (4,251) | (3,819) | ||
Net Amount | 10,749 | 10,749 | 11,181 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Accumulated Amortization | (4,251) | (4,251) | (3,819) | ||
Reacquired franchise rights | |||||
Intangible assets with definite lives | |||||
Gross Carrying Amount | 381,782 | 381,782 | 358,095 | ||
Accumulated Amortization | (72,197) | (72,197) | (59,432) | ||
Net Amount | 309,585 | 309,585 | 298,663 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Accumulated Amortization | (72,197) | (72,197) | (59,432) | ||
Website development costs | |||||
Intangible assets with definite lives | |||||
Gross Carrying Amount | 6,500 | 6,500 | 6,500 | ||
Accumulated Amortization | (6,050) | (6,050) | (4,965) | ||
Net Amount | 450 | 450 | 1,535 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Accumulated Amortization | $ (6,050) | $ (6,050) | $ (4,965) |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Assets | ||
Operating lease | $ 414,096 | $ 399,688 |
Finance lease | $ 24,236 | $ 23,556 |
Finance lease assets, statement of financial position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Total leased assets | $ 438,332 | $ 423,244 |
Current | ||
Current operating lease liabilities | 46,763 | 45,675 |
Current finance lease liabilities | $ 3,985 | $ 6,245 |
Finance lease liabilities, current, statement of financial position [Extensible Enumeration] | Current portion of long-term debt | Current portion of long-term debt |
Noncurrent | ||
Noncurrent operating lease liabilities | $ 390,962 | $ 376,099 |
Noncurrent finance lease liabilities | $ 22,293 | $ 19,979 |
Finance lease liabilities, noncurrent, statement of financial position [Extensible Enumeration] | Long-term debt, less current portion | Long-term debt, less current portion |
Total leased liabilities | $ 464,003 | $ 447,998 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Operating lease cost | ||||
Short-term lease cost | $ 792 | $ 797 | $ 1,564 | $ 1,429 |
Variable lease costs | 4,218 | 676 | 7,297 | 3,888 |
Sublease income | (97) | (130) | (177) | (239) |
Amortization of right of use assets | 850 | 331 | 1,648 | 1,331 |
Interest on lease liabilities | 481 | 836 | 1,074 | 1,062 |
Selling, general and administrative expense | ||||
Operating lease cost | ||||
Operating lease cost | 609 | 755 | 1,319 | 1,573 |
Operating expenses | ||||
Operating lease cost | ||||
Operating lease cost | $ 21,368 | $ 16,110 | $ 41,706 | $ 33,599 |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 04, 2021 | Jun. 28, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 45,889 | $ 35,638 |
Operating cash flows from finance leases | 984 | 971 |
Financing cash flows from finance leases | 1,705 | 1,899 |
Right-of-use assets obtained in exchange for new lease liabilities: | ||
Operating leases | 39,473 | 6,296 |
Finance leases | $ 1,788 | $ 6,827 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Leases [Abstract] | ||||
Leases, termination costs | $ 0 | $ 1,700,000 | $ 0 | $ 1,700,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair value, recurring - USD ($) $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Level 1 | ||
Assets: | ||
401(k) mirror plan assets | $ 215 | $ 237 |
Total Assets | 215 | 237 |
Liabilities: | ||
Total Liabilities | 0 | 0 |
Level 1 | Commodity derivatives | ||
Assets: | ||
Derivative assets | 0 | 0 |
Level 1 | Foreign currency derivatives | ||
Assets: | ||
Derivative assets | 0 | |
Liabilities: | ||
Derivative liabilities | 0 | |
Level 1 | Interest rate derivatives | ||
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
401(k) mirror plan assets | 0 | 0 |
Total Assets | 1,890 | 551 |
Liabilities: | ||
Total Liabilities | 24,896 | 32,813 |
Level 2 | Commodity derivatives | ||
Assets: | ||
Derivative assets | 1,890 | 420 |
Level 2 | Foreign currency derivatives | ||
Assets: | ||
Derivative assets | 131 | |
Liabilities: | ||
Derivative liabilities | 393 | |
Level 2 | Interest rate derivatives | ||
Liabilities: | ||
Derivative liabilities | 24,503 | 32,813 |
Level 3 | ||
Assets: | ||
401(k) mirror plan assets | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities: | ||
Total Liabilities | 0 | 0 |
Level 3 | Commodity derivatives | ||
Assets: | ||
Derivative assets | 0 | 0 |
Level 3 | Foreign currency derivatives | ||
Assets: | ||
Derivative assets | 0 | |
Liabilities: | ||
Derivative liabilities | 0 | |
Level 3 | Interest rate derivatives | ||
Liabilities: | ||
Derivative liabilities | $ 0 | $ 0 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) $ in Thousands, gal in Millions | Jul. 04, 2021USD ($)gal | Jan. 03, 2021USD ($)gal |
Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative asset, fair value | $ 1,890 | $ 551 |
Derivative liability, fair value | 393 | 0 |
Derivatives Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative liability, fair value | $ 24,503 | $ 32,813 |
Commodity derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative, notional amount (in gallon) | gal | 2.3 | 3 |
Derivative asset, fair value | $ 1,900 | $ 400 |
Interest rate derivatives | Derivatives Designated as Hedging Instruments | Cash Flow Hedging | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative liability, fair value | 24,500 | 32,800 |
Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative asset, fair value | 100 | |
Derivative liability, fair value | 400 | |
Derivative, notional amount | $ 44,300 | $ 26,700 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Derivative Instruments in Condensed Consolidated Balance Sheets, Fair Value (Details) - USD ($) $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 1,890 | $ 551 |
Derivative liability, fair value | 393 | 0 |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 24,503 | 32,813 |
Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 100 | |
Derivative liability, fair value | 400 | |
Commodity derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 1,900 | 400 |
Prepaid expense and other current assets | Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 0 | 131 |
Prepaid expense and other current assets | Commodity derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 1,890 | 420 |
Accrued liabilities | Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 393 | 0 |
Accrued liabilities | Interest rate derivatives | Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 9,935 | 10,235 |
Other long-term obligations and deferred credits | Interest rate derivatives | Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $ 14,568 | $ 22,578 |
Derivative Instruments - Sche_2
Derivative Instruments - Schedule of Derivative Instruments in Condensed Consolidated Statements of Operations, Gain (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivative gain (loss) recognised in income, derivatives designated as hedging instruments | $ (2,561) | $ (1,962) | $ (5,091) | $ (2,657) |
Derivative gain (loss) recognised in income, derivatives not designated as hedging instruments | 712 | 1,125 | 1,095 | (689) |
Interest rate derivatives | Interest expense, net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivative gain (loss) recognised in income, derivatives designated as hedging instruments | (2,561) | (1,962) | (5,091) | (2,657) |
Foreign currency derivatives | Other non-operating income, net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivative gain (loss) recognised in income, derivatives not designated as hedging instruments | 235 | (294) | (375) | 185 |
Commodity derivatives | Other non-operating income, net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivative gain (loss) recognised in income, derivatives not designated as hedging instruments | $ 477 | $ 1,419 | $ 1,470 | $ (874) |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | Jan. 03, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award expiration period | 10 years | ||||
Stock option plan expense | $ 0.9 | $ 0.9 | |||
KKI | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vested (in shares) | 0 | 0 | |||
Stock option exercised (in shares) | 0 | 0 | |||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock unit expense | $ 7.4 | $ 3 | $ 9.8 | $ 6.2 | |
Restricted Stock Units (RSUs), Fifty-four month term | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 54 months | ||||
Restricted Stock Units (RSUs), Fifty-four month term | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award holding period | 6 months | ||||
Restricted Stock Units (RSUs), Sixty month term | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 60 months | ||||
Restricted Stock Units (RSUs), Sixty month term | Share-based payment arrangement, tranche one | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights, percentage | 60.00% | ||||
Restricted Stock Units (RSUs), Sixty month term | Share-based payment arrangement, tranche two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights, percentage | 20.00% | ||||
Restricted Stock Units (RSUs), Sixty month term | Share-based payment arrangement, tranche three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights, percentage | 20.00% | ||||
Share-based Payment Arrangement, Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 60 months | ||||
Share-based Payment Arrangement, Option | Share-based payment arrangement, tranche one | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights, percentage | 60.00% | ||||
Share-based Payment Arrangement, Option | Share-based payment arrangement, tranche two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights, percentage | 20.00% | ||||
Share-based Payment Arrangement, Option | Share-based payment arrangement, tranche three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights, percentage | 20.00% |
Share-based Compensation - Sche
Share-based Compensation - Schedule of RSU Activity (Details) - Restricted Stock Units (RSUs) | 6 Months Ended |
Jul. 04, 2021$ / sharesshares | |
KKI | |
RSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 4,649,551 |
Granted (in shares) | shares | 2,772,199 |
RSU Divided Equivalents (in shares) | shares | 1,018,629 |
Vested (in shares) | shares | 2,389,567 |
Forfeited (in shares) | shares | 224,675 |
Ending balance, non-vested shares outstanding (in shares) | shares | 5,826,137 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 11.37 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 18.39 |
RSU Divided Equivalents, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Vested, weighted average grant date fair value (in USD per share) | $ / shares | 9.41 |
Forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 13.17 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 13.46 |
KKUK | |
RSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 404,568 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 351,500 |
Forfeited (in shares) | shares | 0 |
Ending balance, non-vested shares outstanding (in shares) | shares | 53,068 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 12.45 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Vested, weighted average grant date fair value (in USD per share) | $ / shares | 12.22 |
Forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 13.98 |
Insomnia Cookies | |
RSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 29,279 |
Granted (in shares) | shares | 15,173 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 3,488 |
Ending balance, non-vested shares outstanding (in shares) | shares | 40,964 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 68.87 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 97.77 |
Vested, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 78.31 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 78.77 |
KK Australia | |
RSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 1,844,241 |
Granted (in shares) | shares | 78,534 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Ending balance, non-vested shares outstanding (in shares) | shares | 1,922,775 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 1.48 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 1.45 |
Vested, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 1.48 |
KK Mexico | |
RSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 25,055 |
Granted (in shares) | shares | 167 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Ending balance, non-vested shares outstanding (in shares) | shares | 25,222 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 29.21 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 28.69 |
Vested, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 29.21 |
Share-based Compensation - Sc_2
Share-based Compensation - Schedule of RSU Unrecognized Compensation Expense (Details) - Restricted Stock Units (RSUs) $ in Thousands | 6 Months Ended |
Jul. 04, 2021USD ($) | |
KKI | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 62,542 |
Recognized over a weighted-average period of | 3 years 4 months 24 days |
KKUK | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 327 |
Recognized over a weighted-average period of | 10 months 24 days |
Insomnia Cookies | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 2,426 |
Recognized over a weighted-average period of | 3 years 4 months 24 days |
KK Australia | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 944 |
Recognized over a weighted-average period of | 1 year 2 months 12 days |
KK Mexico | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 654 |
Recognized over a weighted-average period of | 4 years |
Share-based Compensation - Sc_3
Share-based Compensation - Schedule of Weighted-Average Assumptions, Stock Options (Details) - Share-based Payment Arrangement, Option - KKI | 6 Months Ended | 12 Months Ended |
Jul. 04, 2021 | Jan. 03, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.30% | 0.00% |
Expected volatility | 34.40% | 0.00% |
Dividend yield | 1.00% | 0.00% |
Expected term (years) | 6 years 9 months 18 days | 0 years |
Share-based Compensation - Sc_4
Share-based Compensation - Schedule of Stock Option Activity (Details) - KKI - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jul. 04, 2021 | Jan. 03, 2021 | |
Options | ||
Beginning balance, share options outstanding (in shares) | 0 | |
Granted (in shares) | 2,817,398 | |
Exercised (in shares) | 0 | 0 |
Forfeited or expired (in shares) | 0 | |
Ending balance, share options outstanding (in shares) | 2,817,398 | 0 |
Weighted Average Grant Date Fair Value | ||
Beginning balance, share options outstanding (in USD per share) | $ 0 | |
Granted (in USD per share) | 6.10 | |
Excercised (in USD per share) | 0 | |
Forfeited or expired (in USD per share) | 0 | |
Ending balance, share options outstanding (in USD per share) | 6.10 | $ 0 |
Weighted Average Exercise Price | ||
Beginning balance, share options outstanding (in USD per share) | 0 | |
Granted (in USD per share) | 14.61 | |
Exercised (in USD per share) | 0 | |
Forfeited or expired (in USD per share) | 0 | |
Ending balance, share options outstanding (in USD per share) | $ 14.61 | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted Average Remaining Contractual Term (years) | 9 years 9 months 18 days | 0 years |
Aggregate Intrinsic Value (in thousands) | $ 12,714 | $ 0 |
Share-based Compensation - Sc_5
Share-based Compensation - Schedule of Stock Option Unrecognized Compensation Expense (Details) - Share-based Payment Arrangement, Option - KKI $ in Thousands | 6 Months Ended |
Jul. 04, 2021USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 16,313 |
Recognized over a weighted-average period of | 3 years 4 months 24 days |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | (195.60%) | 11.38% | (222.58%) | 11.40% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Mar. 11, 2021 | Apr. 07, 2009 | Jul. 04, 2021 | Jan. 03, 2021 |
Loss Contingencies [Line Items] | ||||
Letters of credit outstanding | $ 8.5 | $ 14 | ||
K2 Asia litigation | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, damages sought | $ 3 | |||
Insomnia Cookies litigation, employee wages | ||||
Loss Contingencies [Line Items] | ||||
Litigation settlement, amount awarded to other party | $ 0.4 |
Related Party Transactions (Det
Related Party Transactions (Details) | 3 Months Ended | 6 Months Ended | |||||
Jul. 04, 2021USD ($)equityMethodInvestment | Jun. 28, 2020USD ($) | Jul. 04, 2021USD ($)equityMethodInvestment | Jun. 28, 2020USD ($) | Jan. 03, 2021USD ($)equityMethodInvestment | Apr. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Related Party Transaction [Line Items] | |||||||
Number of franchisees | equityMethodInvestment | 2 | 2 | 2 | ||||
Income taxes receivable | $ 15,300,000 | ||||||
Interest expense, related party | $ 4,821,000 | $ 5,566,000 | $ 10,387,000 | $ 11,132,000 | |||
Equity Method Investee | |||||||
Related Party Transaction [Line Items] | |||||||
Equity method investments | 700,000 | 700,000 | 900,000 | ||||
Trade receivables | 400,000 | 400,000 | 400,000 | ||||
Equity Method Investee | Sales of Ingredients and Equipment to Franchisees | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related parties | 1,900,000 | 1,700,000 | 3,800,000 | 3,400,000 | |||
Equity Method Investee | Royalty Revenues from Franchisees | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related parties | 400,000 | 300,000 | 700,000 | 600,000 | |||
Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Due from employees | 3,800,000 | 3,800,000 | 18,700,000 | ||||
Affiliated Entity | Keurig Dr Pepper Inc. (“KDP”) | Licensing Revenues | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related parties | 500,000 | 300,000 | 1,000,000 | 800,000 | |||
Affiliated Entity | BDT Capital Partners, LLC (“BDT”) | Advisory Services Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses from transactions with related party | 0 | 100,000 | 600,000 | 600,000 | |||
Affiliated Entity | BDT Capital Partners, LLC (“BDT”) | Valuation Assistance in Preparation for IPO | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses from transactions with related party | 6,300,000 | 0 | 6,300,000 | 0 | |||
Affiliated Entity | Krispy Kreme by JAB Holding Company | |||||||
Related Party Transaction [Line Items] | |||||||
Related party receivable | 0 | 0 | 7,400,000 | ||||
Affiliated Entity | Other JAB Portfolio Companies | |||||||
Related Party Transaction [Line Items] | |||||||
Related party payable | 0 | 0 | 15,300,000 | ||||
Affiliated Entity | Krispy Kreme, G.P. (“KK GP”) | Unsecured Debt | |||||||
Related Party Transaction [Line Items] | |||||||
Long-term debt | $ 344,600,000 | ||||||
Interest expense, related party | $ 4,800,000 | $ 5,600,000 | $ 10,400,000 | $ 11,100,000 | |||
Affiliated Entity | Krispy Kreme, G.P. (“KK GP”) | Unsecured Debt | Senior Unsecured Note (The Original Agreement) | |||||||
Related Party Transaction [Line Items] | |||||||
Debt instrument, face amount | $ 283,100,000 | ||||||
Affiliated Entity | Krispy Kreme, G.P. (“KK GP”) | Unsecured Debt | Senior Unsecured Note (The Additional Agreement) | |||||||
Related Party Transaction [Line Items] | |||||||
Debt instrument, face amount | $ 54,000,000 | ||||||
KremeWorks USA, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage | 20.00% | 20.00% | 20.00% | ||||
KremeWorks Canada, L.P. | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage | 25.00% | 25.00% | 25.00% |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 349,186 | $ 244,972 | $ 670,995 | $ 506,188 |
Company shops, Branded Sweet Treat Line and DFD | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 329,775 | 218,336 | 630,270 | 448,950 |
Mix and equipment revenue from franchisees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 11,448 | 18,272 | 24,538 | 39,194 |
Franchise royalties and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 7,963 | $ 8,364 | $ 16,187 | $ 18,044 |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Contract Balances with Customers (Details) - USD ($) $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Trade receivables, net of allowances of $954 and $1,437, respectively | $ 38,344 | $ 39,624 |
Trade receivables, allowance for credit loss | 954 | 1,437 |
Deferred revenue | ||
Current | 17,341 | 16,045 |
Noncurrent | 2,824 | 2,838 |
Total deferred revenue | $ 20,165 | $ 18,883 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Net Loss Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Earnings Per Share [Abstract] | ||||
Net loss attributable to Krispy Kreme, Inc. | $ (17,142) | $ (12,630) | $ (20,203) | $ (24,145) |
Adjustment to net loss attributable to common shareholders | (424) | (253) | (417) | (150) |
Net loss attributable to common shareholders - Basic | (17,566) | (12,883) | (20,620) | (24,295) |
Additional income attributed to noncontrolling interest due to subsidiary potential common shares | (120) | (18) | (145) | (27) |
Net loss attributable to common shareholders - Diluted | $ (17,686) | $ (12,901) | $ (20,765) | $ (24,322) |
Basic weighted average common shares outstanding (in shares) | 132,351,087 | 124,987,370 | 128,669,228 | 124,987,370 |
Dilutive effect of outstanding common stock options and RSUs (in shares) | 0 | 0 | 0 | 0 |
Diluted weighted average common shares outstanding (in shares) | 132,351,087 | 124,987,370 | 128,669,228 | 124,987,370 |
Loss per share attributable to common shareholders: | ||||
Basic loss per share (in dollars per shares) | $ (0.13) | $ (0.10) | $ (0.16) | $ (0.19) |
Diluted loss per share (in dollars per shares) | $ (0.13) | $ (0.10) | $ (0.16) | $ (0.19) |
Net Loss per Share - Schedule_2
Net Loss per Share - Schedule of Antidilutive Unvested RSUs Excluded from Computation of Net Loss per Share (Details) - Restricted Stock Units (RSUs) - shares | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
KKI | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 5,317,943 | 4,426,789 | 5,237,844 | 4,356,259 |
KKUK | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 3,258 | 416,068 | 3,258 | 416,068 |
Insomnia Cookies | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 0 | 24,069 | 0 | 26,175 |
KK Australia | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 0 | 0 | 0 | 0 |
KK Mexico | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 0 | 0 | 0 | 0 |
Net Loss per Share - Additional
Net Loss per Share - Additional Information (Details) - shares | 3 Months Ended | 6 Months Ended |
Jul. 04, 2021 | Jul. 04, 2021 | |
Share-based Payment Arrangement, Option | KKI | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share | 2,817,398 | 2,817,398 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 04, 2021USD ($) | Apr. 04, 2021USD ($) | Jun. 28, 2020USD ($) | Mar. 29, 2020USD ($) | Jul. 04, 2021USD ($)segment | Jun. 28, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||||||
Number of reportable segments | segment | 3 | |||||
Total net revenues | $ 349,186 | $ 244,972 | $ 670,995 | $ 506,188 | ||
Segment adjusted EBITDA | 52,393 | 29,469 | 98,796 | 65,913 | ||
Interest expense, net | 9,793 | 9,711 | 18,042 | 18,355 | ||
Interest expense — related party | 4,821 | 5,566 | 10,387 | 11,132 | ||
Income tax expense/(benefit) | 9,923 | (1,500) | 10,608 | (2,912) | ||
Depreciation and amortization expense | 25,194 | 18,097 | 48,595 | 37,184 | ||
Share-based compensation | 8,290 | 2,970 | 10,658 | 6,141 | ||
Employer payroll taxes related to share-based compensation | 841 | 0 | 841 | 0 | ||
Other non-operating income, net | (416) | (2,660) | (858) | (112) | ||
New York City flagship Hot Light Theater Shop opening | 0 | 1,667 | 0 | 4,239 | ||
Strategic initiatives | 0 | 5,661 | 0 | 9,274 | ||
Acquisition and integration expenses | 223 | 812 | 2,375 | 4,423 | ||
Shop closure expenses | 0 | 2,786 | 0 | 2,786 | ||
Restructuring and severance expenses | 1,336 | 0 | 1,336 | 0 | ||
IPO-related expenses | 6,727 | 0 | 10,203 | 0 | ||
Other | 657 | (1,956) | 1,983 | (1,964) | ||
Net loss | (14,996) | $ (378) | (11,685) | $ (10,948) | (15,374) | (22,633) |
Corporate | ||||||
Segment Reporting Information [Line Items] | ||||||
Segment adjusted EBITDA | (9,423) | (7,580) | (16,822) | (14,671) | ||
U.S. and Canada | ||||||
Segment Reporting Information [Line Items] | ||||||
Total net revenues | 230,918 | 184,255 | 453,388 | 354,705 | ||
U.S. and Canada | Operating Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Segment adjusted EBITDA | 28,285 | 27,551 | 55,848 | 49,188 | ||
International | ||||||
Segment Reporting Information [Line Items] | ||||||
Total net revenues | 89,237 | 34,412 | 155,743 | 95,071 | ||
International | Operating Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Segment adjusted EBITDA | 23,673 | 1,618 | 39,021 | 12,811 | ||
Market Development | ||||||
Segment Reporting Information [Line Items] | ||||||
Total net revenues | 29,031 | 26,305 | 61,864 | 56,412 | ||
Market Development | Operating Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Segment adjusted EBITDA | $ 9,858 | $ 7,880 | $ 20,749 | $ 18,585 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ in Millions | Jul. 07, 2021 | Aug. 31, 2021 | Aug. 09, 2021 | Jul. 31, 2021 |
Restricted Stock Units (RSUs) | ||||
Subsequent Event [Line Items] | ||||
Granted (in shares) | 431,115 | |||
Granted in period, fair value | $ 6.9 | |||
Revolving Credit Facility | ||||
Subsequent Event [Line Items] | ||||
Proceeds from long-term lines of credit | $ 100 | |||
Repayments of long-term lines of credit | $ 65 | |||
Long-term line of credit | $ 40 | |||
Term Loan Facility | Secured Debt | ||||
Subsequent Event [Line Items] | ||||
Repayments of debt | $ 500.7 | |||
Accrued interest | $ 0.7 |