Cover Page
Cover Page - shares | 3 Months Ended | |
Apr. 03, 2022 | May 04, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 3, 2022 | |
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, $0.01 par value per share | |
Entity Trading Symbol | DNUT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 167,296,522 | |
Entity Central Index Key | 0001857154 | |
Current Fiscal Year End Date | --01-01 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Total net revenues | $ 372,532 | $ 321,809 |
Product and distribution costs | 96,111 | 79,997 |
Operating expenses | 168,726 | 147,541 |
Selling, general and administrative expense | 53,711 | 49,537 |
Marketing expenses | 10,159 | 9,507 |
Pre-opening costs | 1,329 | 1,391 |
Other income, net | (2,633) | (3,245) |
Depreciation and amortization expense | 27,841 | 23,401 |
Operating income | 17,288 | 13,680 |
Interest expense, net | 7,351 | 8,249 |
Interest expense — related party | 0 | 5,566 |
Other non-operating income, net | (321) | (442) |
Income before income taxes | 10,258 | 307 |
Income tax expense | 3,800 | 685 |
Net income/(loss) | 6,458 | (378) |
Net income attributable to noncontrolling interest | 2,456 | 2,683 |
Net income/(loss) attributable to Krispy Kreme, Inc. | $ 4,002 | $ (3,061) |
Net income/(loss) per share: | ||
Common stock — Basic (in dollars per share) | $ 0.02 | $ (0.03) |
Common stock — Diluted (in dollars per share) | $ 0.02 | $ (0.03) |
Weighted average shares outstanding: | ||
Basic (in shares) | 167,261 | 124,987 |
Diluted (in shares) | 169,485 | 124,987 |
Product sales | ||
Total net revenues | $ 364,052 | $ 313,585 |
Royalties and other revenues | ||
Total net revenues | $ 8,480 | $ 8,224 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 03, 2022 | Apr. 04, 2021 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income/(loss) | $ 6,458 | $ (378) | |
Other comprehensive income/(loss), net of income taxes: | |||
Foreign currency translation adjustment | 1,334 | (2,264) | |
Unrealized income on cash flow hedges, net of income taxes | [1] | 14,234 | 5,102 |
Total other comprehensive income, net of income taxes | 15,568 | 2,838 | |
Comprehensive income | 22,026 | 2,460 | |
Net income attributable to noncontrolling interest | 2,456 | 2,683 | |
Total comprehensive income attributable to noncontrolling interest | 2,456 | 2,683 | |
Comprehensive income/(loss) attributable to Krispy Kreme, Inc. | $ 19,570 | $ (223) | |
[1] | Net of income tax expense of $4.7 million for the quarter ended April 3, 2022, and $1.7 million for the quarter ended April 4, 2021. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized income on cash flow hedges, tax expense | $ 4.7 | $ 1.7 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 31,615 | $ 38,562 |
Restricted cash | 676 | 630 |
Accounts receivable, net | 44,705 | 47,491 |
Inventories | 41,045 | 34,851 |
Taxes receivable | 11,723 | 14,662 |
Prepaid expense and other current assets | 19,894 | 20,701 |
Total current assets | 149,658 | 156,897 |
Property and equipment, net | 442,509 | 438,918 |
Goodwill | 1,105,123 | 1,105,322 |
Other intangible assets, net | 985,544 | 992,520 |
Operating lease right of use asset, net | 432,374 | 435,168 |
Other assets | 18,046 | 16,429 |
Total assets | 3,133,254 | 3,145,254 |
Current liabilities: | ||
Current portion of long-term debt | 36,667 | 36,583 |
Current operating lease liabilities | 49,474 | 50,359 |
Accounts payable | 171,005 | 182,104 |
Accrued liabilities | 105,727 | 140,750 |
Structured payables | 132,374 | 116,361 |
Total current liabilities | 495,247 | 526,157 |
Long-term debt, less current portion | 680,693 | 680,307 |
Noncurrent operating lease liabilities | 413,765 | 415,208 |
Deferred income taxes, net | 149,605 | 145,418 |
Other long-term obligations and deferred credits | 38,552 | 42,509 |
Total liabilities | 1,777,862 | 1,809,599 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, $0.01 par value; 300,000 shares authorized as of both April 3, 2022 and January 2, 2022; 167,297 and 167,251 shares issued and outstanding as of April 3, 2022 and January 2, 2022, respectively | 1,673 | 1,673 |
Additional paid-in capital | 1,419,831 | 1,415,185 |
Shareholder note receivable | (4,190) | (4,382) |
Accumulated other comprehensive income/(loss), net of income tax | 13,090 | (2,478) |
Retained deficit | (180,261) | (178,409) |
Total shareholders’ equity attributable to Krispy Kreme, Inc. | 1,250,143 | 1,231,589 |
Noncontrolling interest | 105,249 | 104,066 |
Total shareholders’ equity | 1,355,392 | 1,335,655 |
Total liabilities and shareholders’ equity | $ 3,133,254 | $ 3,145,254 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
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 | 300,000 |
Common stock, shares issued (in shares) | 167,297 | 167,251 |
Common stock, shares outstanding (in shares) | 167,297 | 167,251 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Shareholder Note Receivable | Foreign Currency Translation Adjustment | Unrealized (Loss)/Income on Cash Flow Hedges | Unrealized Loss on Employee Benefit Plans | Retained (Deficit)/Earnings | Noncontrolling Interest | |
Beginning balance (in shares) at Jan. 03, 2021 | 124,987 | |||||||||
Beginning balance at Jan. 03, 2021 | $ 848,359 | $ 1,250 | $ 845,499 | $ (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 noncontrolling interest | (1,876) | 363 | (2,239) | |||||||
Other | (95) | (26) | (70) | 2 | (1) | |||||
Ending balance (in shares) at Apr. 04, 2021 | 124,987 | |||||||||
Ending balance at Apr. 04, 2021 | $ 863,403 | $ 1,250 | 847,841 | (18,228) | 21,244 | (19,508) | (106) | (145,256) | 176,166 | |
Beginning balance (in shares) at Jan. 02, 2022 | 167,251 | 167,251 | ||||||||
Beginning balance at Jan. 02, 2022 | $ 1,335,655 | $ 1,673 | 1,415,185 | (4,382) | 8,967 | (11,001) | (444) | (178,409) | 104,066 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 6,458 | 4,002 | 2,456 | |||||||
Other comprehensive income/(loss), before reclassifications | 13,058 | 1,334 | 11,724 | |||||||
Reclassification from AOCI | 2,510 | 2,510 | ||||||||
Capital contribution from shareholders | 240 | (3) | 243 | |||||||
Share-based compensation | 5,041 | 5,041 | ||||||||
Purchase of shares by noncontrolling interest | 52 | (58) | 110 | |||||||
Dividends declared on common stock and equivalents | [1] | (5,855) | (5,855) | |||||||
Distribution to noncontrolling interest | (1,362) | 21 | (1,383) | |||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld (in shares) | 46 | |||||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld | (390) | (390) | ||||||||
Other | $ (15) | (2) | (14) | 1 | 0 | |||||
Ending balance (in shares) at Apr. 03, 2022 | 167,297 | 167,297 | ||||||||
Ending balance at Apr. 03, 2022 | $ 1,355,392 | $ 1,673 | $ 1,419,831 | $ (4,190) | $ 10,301 | $ 3,233 | $ (444) | $ (180,261) | $ 105,249 | |
[1] | Includes a $0.035 cash dividend per common share declared in the first quarter of fiscal 2022 and expected to be paid in the second quarter of fiscal 2022. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Parenthetical) (Unaudited) | 3 Months Ended |
Apr. 03, 2022$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Dividends declared on common stock and equivalents (in dollars per share) | $ 0.035 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income/(loss) | $ 6,458 | $ (378) |
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||
Depreciation and amortization expense | 27,841 | 23,401 |
Deferred income taxes | (822) | 593 |
Impairment and lease termination charges | 218 | 1,151 |
Loss on disposal of property and equipment | 24 | 116 |
Gain on sale-leaseback | (2,374) | 0 |
Share-based compensation | 5,041 | 2,368 |
Change in accounts and notes receivable allowances | (156) | 180 |
Inventory write-off | 251 | 870 |
Other | (1,345) | (2,798) |
Change in operating assets and liabilities, excluding business acquisitions and foreign currency translation adjustments | (6,745) | 15,138 |
Net cash provided by operating activities | 28,391 | 40,641 |
CASH FLOWS USED FOR INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (29,460) | (30,297) |
Proceeds from disposals of assets | 8 | 43 |
Proceeds from sale-leaseback | 3,000 | 0 |
Acquisition of shops and franchise rights from franchisees, net of cash acquired | 0 | (33,568) |
Principal payments received from loans to franchisees | 15 | 0 |
Maturities of held-to-maturity debt securities | 0 | 169 |
Net cash used for investing activities | (26,437) | (63,653) |
CASH FLOWS (USED FOR)/FROM FINANCING ACTIVITIES: | ||
Proceeds from the issuance of debt | 28,000 | 40,000 |
Repayment of long-term debt and lease obligations | (28,697) | (14,629) |
Proceeds from structured payables | 74,180 | 65,550 |
Payments on structured payables | (58,361) | (64,418) |
Payment of contingent consideration related to a business combination | (900) | 0 |
Capital contribution by shareholders | 240 | 0 |
Payments of issuance costs in connection with IPO | (12,458) | 0 |
Proceeds from sale of noncontrolling interest in subsidiary | 52 | 12,187 |
Distribution to shareholders | (5,855) | 0 |
Payments for repurchase and retirement of common stock | (1,466) | 0 |
Distribution to noncontrolling interest | (1,362) | (1,876) |
Net cash (used for)/provided by financing activities | (6,627) | 36,814 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2,228) | (507) |
Net (decrease)/increase in cash, cash equivalents and restricted cash | (6,901) | 13,295 |
Cash, cash equivalents and restricted cash at beginning of period | 39,192 | 37,483 |
Cash, cash equivalents and restricted cash at end of period | 32,291 | 50,778 |
Supplemental schedule of non-cash investing and financing activities: | ||
Increase in accrual for property and equipment | 5,489 | 1,123 |
Stock issuance under shareholder notes | 191 | 446 |
Accrual for distribution to shareholders | (5,855) | 0 |
Reconciliation of cash, cash equivalents and restricted cash at end of period: | ||
Cash and cash equivalents | 31,615 | 50,650 |
Restricted cash | 676 | 128 |
Total cash, cash equivalents and restricted cash | $ 32,291 | $ 50,778 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 03, 2022 | |
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 Cookies shops and the Branded Sweet Treat Line; 2) International, which includes all Krispy Kreme Company-owned operations in the U.K., 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. 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 2021 and 2022 reflect the results of operations for the 52-week periods ended January 2, 2022 and January 1, 2023, respectively. The quarters ended April 3, 2022 and April 4, 2021 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 2, 2022, included in the Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet as of January 2, 2022 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 first quarter ended April 3, 2022 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending January 1, 2023. 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”), W.K.S. Krispy Kreme, LLC (“WKS Krispy Kreme”), and Krispy K Canada, Inc. (“KK Canada”). Employee shareholders hold noncontrolling interests in the consolidated subsidiaries Krispy Kreme Holding U.K. 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 2, 2022 included in the Annual Report on Form 10-K. There have been no material changes to the significant accounting policies during the quarter ended April 3, 2022. Reclassifications As previously disclosed in the Quarterly Report on Form 10-Q issued for the second quarter of fiscal 2021, 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 April 2021, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. It is effective for all entities as of March 12, 2020 through December 31, 2022. A company may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. The Company is currently evaluating the effect of the new guidance on its Condensed Consolidated Financial Statements and related disclosures. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which prescribes the measurement of acquired contract assets and contract liabilities arising from revenue contracts with customers recognized in a business combination. It is effective for public business entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The amendments in this update should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the effect of the new guidance on its Condensed Consolidated Financial Statements and related disclosures. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance , which requires certain disclosures to be made when an entity receives government assistance, including the types of assistance, an entity’s accounting for the assistance, and the effect of the assistance on an entity’s financial statements. It is effective for all entities for financial statements issued for annual periods beginning after December 15, 2021. Early application of the amendments is permitted. The Company is currently evaluating the effect of the new guidance on its annual disclosures. |
Acquisitions
Acquisitions | 3 Months Ended |
Apr. 03, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions 2022 Acquisitions In the quarter ended April 3, 2022, there were no acquisitions. 2021 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 U.S. On October 4, 2021, the Company acquired a 60% controlling ownership interest in ten franchise shops in Canada (KK Canada). The valuation for the acquisitions requires significant estimates and assumptions. The estimates are inherently uncertain and subject to revision as additional information is obtained during the measurement period for the acquisitions. Measurement period adjustments for the 2021 acquisitions did not have a material impact to the Condensed Consolidated Financial Statements for the quarter ended April 3, 2022. |
Inventories
Inventories | 3 Months Ended |
Apr. 03, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of Inventories are as follows: April 3, 2022 January 2, 2022 Raw materials $ 17,042 $ 15,278 Work in progress 444 700 Finished goods and purchased merchandise 23,559 18,873 Total inventories $ 41,045 $ 34,851 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 3 Months Ended |
Apr. 03, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, net | Goodwill and Other Intangible Assets, net 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 2, 2022 $ 688,048 $ 283,342 $ 133,932 $ 1,105,322 Foreign currency impact 295 (494) — (199) Balance as of April 3, 2022 $ 688,343 $ 282,848 $ 133,932 $ 1,105,123 Acquisitions of franchises result in a reclassification of goodwill between segments. Other Intangible Assets, net Other intangible assets consist of the following: April 3, 2022 January 2, 2022 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 32,545 (8,756) 23,789 32,545 (8,369) 24,176 Customer relationships 15,000 (4,899) 10,101 15,000 (4,684) 10,316 Reacquired franchise rights 383,941 (90,187) 293,754 384,305 (84,177) 300,128 Website development costs 6,500 (6,500) — 6,500 (6,500) — Total intangible assets with definite lives 437,986 (110,342) 327,644 438,350 (103,730) 334,620 Total intangible assets $ 1,095,886 $ (110,342) $ 985,544 $ 1,096,250 $ (103,730) $ 992,520 |
Leases
Leases | 3 Months Ended |
Apr. 03, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company included the following amounts related to operating and finance lease assets and liabilities within the Condensed Consolidated Balance Sheets: As of April 3, 2022 January 2, 2022 Assets Classification Operating lease Operating lease right of use asset, net $ 432,374 $ 435,168 Finance lease Property and equipment, net 19,558 19,298 Total leased assets $ 451,932 $ 454,466 Liabilities Current Operating lease Current operating lease liabilities $ 49,474 $ 50,359 Finance lease Current portion of long-term debt 1,667 1,583 Noncurrent Operating lease Noncurrent operating lease liabilities 413,765 415,208 Finance lease Long-term debt, less current portion 23,129 22,890 Total leased liabilities $ 488,035 $ 490,040 Lease costs were as follows: Quarter Ended April 3, 2022 April 4, 2021 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 564 $ 710 Operating lease cost Operating expenses 21,883 20,338 Short-term lease cost Operating expenses 1,045 772 Variable lease costs Operating expenses 5,007 3,079 Sublease income Royalties and other revenues (69) (80) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense $ 584 $ 798 Interest on lease liabilities Interest expense, net 445 593 Supplemental disclosures of cash flow information related to leases were as follows: Quarter Ended April 3, 2022 April 4, 2021 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 25,080 $ 22,196 Operating cash flows for finance leases 449 512 Financing cash flows for finance leases 447 879 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 7,833 $ 26,275 Finance leases 284 1,788 There were no lease termination charges in the quarters ended April 3, 2022 and April 4, 2021. In March 2022, the Company completed a sale-leaseback transaction whereby it disposed of the land at one real estate property for proceeds of $3.0 million. The Company subsequently leased back the property, which is accounted for as an operating lease. The Company recognized a gain on sale of $2.6 million, which is included in Other income, net on the Condensed Consolidated |
Leases | Leases The Company included the following amounts related to operating and finance lease assets and liabilities within the Condensed Consolidated Balance Sheets: As of April 3, 2022 January 2, 2022 Assets Classification Operating lease Operating lease right of use asset, net $ 432,374 $ 435,168 Finance lease Property and equipment, net 19,558 19,298 Total leased assets $ 451,932 $ 454,466 Liabilities Current Operating lease Current operating lease liabilities $ 49,474 $ 50,359 Finance lease Current portion of long-term debt 1,667 1,583 Noncurrent Operating lease Noncurrent operating lease liabilities 413,765 415,208 Finance lease Long-term debt, less current portion 23,129 22,890 Total leased liabilities $ 488,035 $ 490,040 Lease costs were as follows: Quarter Ended April 3, 2022 April 4, 2021 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 564 $ 710 Operating lease cost Operating expenses 21,883 20,338 Short-term lease cost Operating expenses 1,045 772 Variable lease costs Operating expenses 5,007 3,079 Sublease income Royalties and other revenues (69) (80) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense $ 584 $ 798 Interest on lease liabilities Interest expense, net 445 593 Supplemental disclosures of cash flow information related to leases were as follows: Quarter Ended April 3, 2022 April 4, 2021 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 25,080 $ 22,196 Operating cash flows for finance leases 449 512 Financing cash flows for finance leases 447 879 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 7,833 $ 26,275 Finance leases 284 1,788 There were no lease termination charges in the quarters ended April 3, 2022 and April 4, 2021. In March 2022, the Company completed a sale-leaseback transaction whereby it disposed of the land at one real estate property for proceeds of $3.0 million. The Company subsequently leased back the property, which is accounted for as an operating lease. The Company recognized a gain on sale of $2.6 million, which is included in Other income, net on the Condensed Consolidated |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 03, 2022 | |
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 April 3, 2022 and January 2, 2022: April 3, 2022 Level 1 Level 2 Level 3 Assets: 401(k) mirror plan assets $ 104 $ — $ — Interest rate derivatives — 4,311 — Commodity derivatives — 2,347 — Total Assets $ 104 $ 6,658 $ — Liabilities: Foreign currency derivatives — 442 — Total Liabilities $ — $ 442 $ — January 2, 2022 Level 1 Level 2 Level 3 Assets: 401(k) mirror plan assets $ 111 $ — $ — Commodity derivatives — 1,486 — Total Assets $ 111 $ 1,486 $ — Liabilities: Foreign currency derivatives — 80 — Interest rate derivatives — 14,667 — Total Liabilities $ — $ 14,747 $ — There were no transfers of financial assets or liabilities among the levels within the fair value hierarchy during the quarter ended April 3, 2022 and fiscal year ended January 2, 2022. 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 | 3 Months Ended |
Apr. 03, 2022 | |
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 April 3, 2022 and January 2, 2022, the total notional amount of commodity derivatives was 2.3 million and 1.9 million gallons of gasoline, respectively. They were scheduled to mature between April 4, 2022 and December 1, 2023 and January 3, 2022 and March 31, 2023, respectively. As of April 3, 2022 and January 2, 2022, the Company recorded an asset of $2.3 million and $1.5 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 April 3, 2022 and January 2, 2022, the Company has recorded assets of $4.3 million and liabilities of $14.7 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 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 Canada, the U.K., 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 April 3, 2022 and January 2, 2022, the total notional amount of foreign exchange derivatives was $73.6 million and $51.8 million, respectively. They were scheduled to mature in April 2022 and between January 2022 and February 2022, respectively. The Company recorded a liability of $0.4 million and $0.1 million as of April 3, 2022 and January 2, 2022, 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 April 3, 2022 and January 2, 2022, 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 April 3, January 2, Balance Sheet Location Commodity derivatives $ 2,347 $ 1,486 Prepaid expense and other current assets Total Assets $ 2,347 $ 1,486 Foreign currency derivatives $ 442 $ 80 Accrued liabilities Total Liabilities $ 442 $ 80 Derivatives Fair Value Derivatives Designated as Hedging Instruments April 3, January 2, Balance Sheet Location Interest rate derivatives $ 3,097 $ — Prepaid expense and other current assets Interest rate derivatives 1,214 — Other assets Total Assets $ 4,311 $ — Interest rate derivatives — 8,535 Accrued liabilities Interest rate derivatives — 6,132 Other long-term obligations and deferred credits Total Liabilities $ — $ 14,667 The effect of derivative instruments on the Condensed Consolidated Statements of Operations for the quarter ended April 3, 2022 and April 4, 2021 is as follows: Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivatives Designated as Hedging Instruments April 3, 2022 April 4, 2021 Location of Derivative Gain/(Loss) Recognized in Income Loss on interest rate derivatives $ (2,510) $ (2,530) Interest expense, net $ (2,510) $ (2,530) Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivatives Not Designated as Hedging Instruments April 3, 2022 April 4, 2021 Location of Derivative Gain/(Loss) Recognized in Income Loss on foreign currency derivatives $ (363) $ (611) Other non-operating income, net Gain on commodity derivatives 861 993 Other non-operating income, net $ 498 $ 382 |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Apr. 03, 2022 | |
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. Effective March 22, 2022 (the “modification date”), the Company amended certain time-vested RSU agreements issued in fiscal 2021 to change the vesting terms to a graded-vesting schedule over a 54-month period subsequent to the original commencement date (with one-third vesting in 18 months following the vesting commencement date, one-third vesting in 36 months, and one-third vesting in 54 months). The impacted awards previously had a 54-month cliff vesting schedule. The modification affected approximately 615 grantees and approximately 1.1 million unvested RSUs. The amended vesting terms as of the modification date resulted in no incremental compensation cost and the remaining unrecognized compensation cost for each award will be recognized on a straight-line basis over the remaining requisite service period for the entire award. The majority of new awards granted in the first quarter of fiscal 2022 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). RSU activity under the Company’s various plans during the periods presented is as follows: (in thousands, except per share amounts) Non-vested shares outstanding at January 2, Granted Vested Forfeited Non-vested shares outstanding at April 3, KKI RSUs 5,866 888 73 152 6,530 Weighted Average Grant Date Fair Value $ 13.78 14.50 9.19 14.78 $ 13.91 KKUK RSUs 60 — — — 60 Weighted Average Grant Date Fair Value $ 15.77 — — — $ 15.77 Insomnia Cookies RSUs 33 10 — 2 41 Weighted Average Grant Date Fair Value $ 79.66 169.70 — 89.81 $ 101.03 KK Australia RSUs 1,897 21 — — 1,918 Weighted Average Grant Date Fair Value $ 1.48 1.73 — — $ 1.49 KK Mexico RSUs 58 2 — — 60 Weighted Average Grant Date Fair Value $ 32.86 40.14 — — $ 33.08 The Company recorded total non-cash compensation expense related to RSUs under the plans of $4.2 million for the quarter ended April 3, 2022, and $2.4 million for the quarter ended April 4, 2021. 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 April 3, 2022 Unrecognized Compensation Cost Recognized Over a KKI $ 63,775 3.4 years KKUK 370 1.7 years Insomnia Cookies 3,208 3.5 years KK Australia 512 0.8 years KK Mexico $ 1,676 3.7 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 fair value of time-vested stock options was estimated on the date of grant using the Black-Scholes option pricing model. Share Options Outstanding At Share Options Outstanding At (in thousands, except per share amounts) January 2, Granted Exercised Forfeited or Expired April 3, KKI Options 2,817 — — — 2,817 Weighted Average Grant Date Fair Value $ 6.10 — — — $ 6.10 Weighted Average Exercise Price $ 14.61 — — — $ 14.61 The Company recorded total non-cash compensation expense related to the time-vested stock options of $0.8 million for the quarter ended April 3, 2022. No such expenses were recorded for the quarter ended April 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 April 3, 2022 Unrecognized Compensation Cost Recognized Over a KKI $ 13,031 4.1 years |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 03, 2022 | |
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 37.04% for the quarter ended April 3, 2022 and 223.13% for the quarter ended April 4, 2021. The Company’s effective income tax rate for the quarter ended April 3, 2022 differed from the respective statutory rates primarily due to disallowed executive compensation expense and by the mix of income and taxes attributable to foreign jurisdictions. The Company’s effective income tax rate for the quarter ended April 4, 2021 was unusual given an insignificant discrete item and pre-tax income that was close to break-even during the period. The Company’s effective tax rate was also impacted by the mix of income and taxes attributable to foreign jurisdictions. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 03, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Pending Litigation 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. 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. The parties held a voluntary, non-binding mediation for November 11, 2021. 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 | 3 Months Ended |
Apr. 03, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of April 3, 2022 and January 2, 2022, 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 $1.0 million and $1.1 million as of April 3, 2022 and January 2, 2022, respectively. Revenues from sales of ingredients and equipment to these franchisees were $2.0 million for the quarter ended April 3, 2022, and $1.8 million for the quarter ended April 4, 2021. Royalty revenues from these franchisees were $0.3 million for the quarter ended April 3, 2022, and $0.3 million for the quarter ended April 4, 2021. Trade receivables from these franchisees are included in Accounts receivable, net on the Condensed Consolidated Balance Sheets, which were $0.5 million and $0.4 million as of April 3, 2022 and January 2, 2022, respectively. Keurig Dr Pepper Inc. (“KDP”), an affiliated company of JAB Holdings B.V. (“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 for the quarter ended April 3, 2022, and $0.5 million for the quarter ended April 4, 2021. 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 quarter ended April 4, 2021. No related expenses were incurred for the quarter ended April 3, 2022. The Company was party to a senior unsecured note agreement (the “original agreement”) with Krispy Kreme, G.P. (“KK GP”) for an aggregate principal amount of $283.1 million. In April 2019, the Company entered into an additional unsecured note with KK GP for $54.0 million (such notes together, the “Related Party Notes”). As of January 3, 2021, the outstanding amount of principal and interest was $344.6 million. The Related Party Notes were paid off in full during the second quarter of fiscal 2021. The interest expense was $5.6 million for the quarter ended April 4, 2021. No interest expense was incurred for the quarter ended April 3, 2022. The Company granted loans to employees of KKI, KKUK, KK Australia, KK Mexico and Insomnia Cookies for the purchase of shares in those entities. The loan balance was $4.2 million and $4.4 million as of April 3, 2022 and January 2, 2022, respectively, and it is presented as a reduction from Shareholders’ equity on the Condensed Consolidated Balance Sheet. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Apr. 03, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenues Revenues are disaggregated as follows: Quarter Ended April 3, 2022 April 4, 2021 Company Shops, DFD and Branded Sweet Treat Line $ 351,834 $ 300,495 Mix and equipment revenue from franchisees 12,218 13,090 Franchise royalties and other 8,480 8,224 Total net revenues $ 372,532 $ 321,809 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: April 3, 2022 January 2, 2022 Balance Sheet Location Trade receivables, net of allowances of $118 and $896, respectively $ 40,053 $ 41,132 Accounts receivables, net Deferred revenue: Current 16,649 17,458 Accrued liabilities Noncurrent 3,090 2,981 Other long-term obligations and deferred credits Total deferred revenue $ 19,739 $ 20,439 |
Net Earnings_(Loss) per Share
Net Earnings/(Loss) per Share | 3 Months Ended |
Apr. 03, 2022 | |
Earnings Per Share [Abstract] | |
Net Earnings/(Loss) per Share | Net Earnings/(Loss) per Share The following table presents the calculations of basic and diluted EPS: Quarter Ended (in thousands, except per share amounts) April 3, 2022 April 4, 2021 Net income/(loss) attributable to Krispy Kreme, Inc. $ 4,002 $ (3,061) Adjustment to net income/(loss) attributable to common shareholders (374) (141) Net income/(loss) attributable to common shareholders - Basic $ 3,628 $ (3,202) Additional income attributed to noncontrolling interest due to subsidiary potential common shares (40) (85) Net income/(loss) attributable to common shareholders - Diluted $ 3,588 $ (3,287) Basic weighted average common shares outstanding 167,261 124,987 Dilutive effect of outstanding common stock options and RSUs 2,224 — Diluted weighted average common shares outstanding 169,485 124,987 Earnings/(loss) per share attributable to common shareholders: Basic $ 0.02 $ (0.03) Diluted $ 0.02 $ (0.03) 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. The following table summarizes the gross number of potential dilutive unvested RSUs excluded due to antidilution (unadjusted for the treasury stock method): Quarter Ended (in thousands) April 3, 2022 April 4, 2021 KKI 11 4,809 KKUK — 3 Insomnia Cookies 10 — KK Australia — 1,923 KK Mexico 2 25 For the quarter ended April 3, 2022, all 2.8 million time-vested stock options were excluded from the computation of diluted weighted average common shares outstanding based on application of the treasury stock method. For the quarter ended April 4, 2021, no time-vested stock options were excluded from the computation as they were not granted until the second quarter of fiscal 2021. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Apr. 03, 2022 | |
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 April 3, 2022 April 4, 2021 Net revenues: U.S. and Canada $ 253,127 $ 222,470 International 87,201 66,506 Market Development 32,204 32,833 Total net revenues $ 372,532 $ 321,809 Quarter Ended April 3, 2022 April 4, 2021 Segment Adjusted EBITDA: U.S. and Canada $ 33,608 $ 27,563 International 17,244 15,348 Market Development 11,287 10,891 Corporate (13,232) (7,399) 48,907 46,403 Interest expense, net 7,351 8,249 Interest expense — related party (1) — 5,566 Income tax expense 3,800 685 Depreciation and amortization expense 27,841 23,401 Share-based compensation 5,041 2,368 Employer payroll taxes related to share-based compensation 55 — Other non-operating income, net (2) (321) (442) Acquisition and integration expenses (3) 517 2,152 Shop closure expenses (4) 230 — IPO-related expenses (5) — 3,476 Gain on sale-leaseback (2,374) — Other (6) 309 1,326 Net income/(loss) $ 6,458 $ (378) 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. 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 and integration-related activities for the applicable period. 4. Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment. 5. Includes consulting and advisory fees incurred in connection with preparation for and execution of the Company’s IPO. 6. The quarters ended April 3, 2022 and April 4, 2021 consist primarily of legal expenses incurred outside the ordinary course of business on matters described in Note 10 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Apr. 03, 2022 | |
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 May 11, 2022, 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. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 03, 2022 | |
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 2021 and 2022 reflect the results of operations for the 52-week periods ended January 2, 2022 and January 1, 2023, respectively. The quarters ended April 3, 2022 and April 4, 2021 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 2, 2022, included in the Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet as of January 2, 2022 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 first quarter ended April 3, 2022 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending January 1, 2023. 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”), W.K.S. Krispy Kreme, LLC (“WKS Krispy Kreme”), and Krispy K Canada, Inc. (“KK Canada”). Employee shareholders hold noncontrolling interests in the consolidated subsidiaries Krispy Kreme Holding U.K. 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 As previously disclosed in the Quarterly Report on Form 10-Q issued for the second quarter of fiscal 2021, 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 April 2021, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. It is effective for all entities as of March 12, 2020 through December 31, 2022. A company may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. The Company is currently evaluating the effect of the new guidance on its Condensed Consolidated Financial Statements and related disclosures. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which prescribes the measurement of acquired contract assets and contract liabilities arising from revenue contracts with customers recognized in a business combination. It is effective for public business entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The amendments in this update should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the effect of the new guidance on its Condensed Consolidated Financial Statements and related disclosures. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance , which requires certain disclosures to be made when an entity receives government assistance, including the types of assistance, an entity’s accounting for the assistance, and the effect of the assistance on an entity’s financial statements. It is effective for all entities for financial statements issued for annual periods beginning after December 15, 2021. Early application of the amendments is permitted. The Company is currently evaluating the effect of the new guidance on its annual disclosures. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The components of Inventories are as follows: April 3, 2022 January 2, 2022 Raw materials $ 17,042 $ 15,278 Work in progress 444 700 Finished goods and purchased merchandise 23,559 18,873 Total inventories $ 41,045 $ 34,851 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, net (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
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 2, 2022 $ 688,048 $ 283,342 $ 133,932 $ 1,105,322 Foreign currency impact 295 (494) — (199) Balance as of April 3, 2022 $ 688,343 $ 282,848 $ 133,932 $ 1,105,123 |
Schedule of Indefinite-Lived Intangible Assets | Other intangible assets consist of the following: April 3, 2022 January 2, 2022 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 32,545 (8,756) 23,789 32,545 (8,369) 24,176 Customer relationships 15,000 (4,899) 10,101 15,000 (4,684) 10,316 Reacquired franchise rights 383,941 (90,187) 293,754 384,305 (84,177) 300,128 Website development costs 6,500 (6,500) — 6,500 (6,500) — Total intangible assets with definite lives 437,986 (110,342) 327,644 438,350 (103,730) 334,620 Total intangible assets $ 1,095,886 $ (110,342) $ 985,544 $ 1,096,250 $ (103,730) $ 992,520 |
Schedule of Finite-Lived Intangible Assets | Other intangible assets consist of the following: April 3, 2022 January 2, 2022 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 32,545 (8,756) 23,789 32,545 (8,369) 24,176 Customer relationships 15,000 (4,899) 10,101 15,000 (4,684) 10,316 Reacquired franchise rights 383,941 (90,187) 293,754 384,305 (84,177) 300,128 Website development costs 6,500 (6,500) — 6,500 (6,500) — Total intangible assets with definite lives 437,986 (110,342) 327,644 438,350 (103,730) 334,620 Total intangible assets $ 1,095,886 $ (110,342) $ 985,544 $ 1,096,250 $ (103,730) $ 992,520 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | The Company included the following amounts related to operating and finance lease assets and liabilities within the Condensed Consolidated Balance Sheets: As of April 3, 2022 January 2, 2022 Assets Classification Operating lease Operating lease right of use asset, net $ 432,374 $ 435,168 Finance lease Property and equipment, net 19,558 19,298 Total leased assets $ 451,932 $ 454,466 Liabilities Current Operating lease Current operating lease liabilities $ 49,474 $ 50,359 Finance lease Current portion of long-term debt 1,667 1,583 Noncurrent Operating lease Noncurrent operating lease liabilities 413,765 415,208 Finance lease Long-term debt, less current portion 23,129 22,890 Total leased liabilities $ 488,035 $ 490,040 |
Schedule of Lease Costs and Supplemental Cash Flow Information Related to Leases | Lease costs were as follows: Quarter Ended April 3, 2022 April 4, 2021 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 564 $ 710 Operating lease cost Operating expenses 21,883 20,338 Short-term lease cost Operating expenses 1,045 772 Variable lease costs Operating expenses 5,007 3,079 Sublease income Royalties and other revenues (69) (80) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense $ 584 $ 798 Interest on lease liabilities Interest expense, net 445 593 Supplemental disclosures of cash flow information related to leases were as follows: Quarter Ended April 3, 2022 April 4, 2021 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 25,080 $ 22,196 Operating cash flows for finance leases 449 512 Financing cash flows for finance leases 447 879 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 7,833 $ 26,275 Finance leases 284 1,788 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
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 April 3, 2022 and January 2, 2022: April 3, 2022 Level 1 Level 2 Level 3 Assets: 401(k) mirror plan assets $ 104 $ — $ — Interest rate derivatives — 4,311 — Commodity derivatives — 2,347 — Total Assets $ 104 $ 6,658 $ — Liabilities: Foreign currency derivatives — 442 — Total Liabilities $ — $ 442 $ — January 2, 2022 Level 1 Level 2 Level 3 Assets: 401(k) mirror plan assets $ 111 $ — $ — Commodity derivatives — 1,486 — Total Assets $ 111 $ 1,486 $ — Liabilities: Foreign currency derivatives — 80 — Interest rate derivatives — 14,667 — Total Liabilities $ — $ 14,747 $ — |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
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 April 3, 2022 and January 2, 2022, 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 April 3, January 2, Balance Sheet Location Commodity derivatives $ 2,347 $ 1,486 Prepaid expense and other current assets Total Assets $ 2,347 $ 1,486 Foreign currency derivatives $ 442 $ 80 Accrued liabilities Total Liabilities $ 442 $ 80 Derivatives Fair Value Derivatives Designated as Hedging Instruments April 3, January 2, Balance Sheet Location Interest rate derivatives $ 3,097 $ — Prepaid expense and other current assets Interest rate derivatives 1,214 — Other assets Total Assets $ 4,311 $ — Interest rate derivatives — 8,535 Accrued liabilities Interest rate derivatives — 6,132 Other long-term obligations and deferred credits Total Liabilities $ — $ 14,667 |
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 ended April 3, 2022 and April 4, 2021 is as follows: Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivatives Designated as Hedging Instruments April 3, 2022 April 4, 2021 Location of Derivative Gain/(Loss) Recognized in Income Loss on interest rate derivatives $ (2,510) $ (2,530) Interest expense, net $ (2,510) $ (2,530) Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivatives Not Designated as Hedging Instruments April 3, 2022 April 4, 2021 Location of Derivative Gain/(Loss) Recognized in Income Loss on foreign currency derivatives $ (363) $ (611) Other non-operating income, net Gain on commodity derivatives 861 993 Other non-operating income, net $ 498 $ 382 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
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: (in thousands, except per share amounts) Non-vested shares outstanding at January 2, Granted Vested Forfeited Non-vested shares outstanding at April 3, KKI RSUs 5,866 888 73 152 6,530 Weighted Average Grant Date Fair Value $ 13.78 14.50 9.19 14.78 $ 13.91 KKUK RSUs 60 — — — 60 Weighted Average Grant Date Fair Value $ 15.77 — — — $ 15.77 Insomnia Cookies RSUs 33 10 — 2 41 Weighted Average Grant Date Fair Value $ 79.66 169.70 — 89.81 $ 101.03 KK Australia RSUs 1,897 21 — — 1,918 Weighted Average Grant Date Fair Value $ 1.48 1.73 — — $ 1.49 KK Mexico RSUs 58 2 — — 60 Weighted Average Grant Date Fair Value $ 32.86 40.14 — — $ 33.08 |
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 April 3, 2022 Unrecognized Compensation Cost Recognized Over a KKI $ 63,775 3.4 years KKUK 370 1.7 years Insomnia Cookies 3,208 3.5 years KK Australia 512 0.8 years KK Mexico $ 1,676 3.7 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 April 3, 2022 Unrecognized Compensation Cost Recognized Over a KKI $ 13,031 4.1 years |
Share-based Payment Arrangement, Option, Activity | A summary of the status of the time-vested stock options as of January 2, 2022 and changes during the first quarter of fiscal 2022 is presented below: Share Options Outstanding At Share Options Outstanding At (in thousands, except per share amounts) January 2, Granted Exercised Forfeited or Expired April 3, KKI Options 2,817 — — — 2,817 Weighted Average Grant Date Fair Value $ 6.10 — — — $ 6.10 Weighted Average Exercise Price $ 14.61 — — — $ 14.61 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenues are disaggregated as follows: Quarter Ended April 3, 2022 April 4, 2021 Company Shops, DFD and Branded Sweet Treat Line $ 351,834 $ 300,495 Mix and equipment revenue from franchisees 12,218 13,090 Franchise royalties and other 8,480 8,224 Total net revenues $ 372,532 $ 321,809 |
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: April 3, 2022 January 2, 2022 Balance Sheet Location Trade receivables, net of allowances of $118 and $896, respectively $ 40,053 $ 41,132 Accounts receivables, net Deferred revenue: Current 16,649 17,458 Accrued liabilities Noncurrent 3,090 2,981 Other long-term obligations and deferred credits Total deferred revenue $ 19,739 $ 20,439 |
Net Earnings_(Loss) per Share (
Net Earnings/(Loss) per Share (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
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 (in thousands, except per share amounts) April 3, 2022 April 4, 2021 Net income/(loss) attributable to Krispy Kreme, Inc. $ 4,002 $ (3,061) Adjustment to net income/(loss) attributable to common shareholders (374) (141) Net income/(loss) attributable to common shareholders - Basic $ 3,628 $ (3,202) Additional income attributed to noncontrolling interest due to subsidiary potential common shares (40) (85) Net income/(loss) attributable to common shareholders - Diluted $ 3,588 $ (3,287) Basic weighted average common shares outstanding 167,261 124,987 Dilutive effect of outstanding common stock options and RSUs 2,224 — Diluted weighted average common shares outstanding 169,485 124,987 Earnings/(loss) per share attributable to common shareholders: Basic $ 0.02 $ (0.03) Diluted $ 0.02 $ (0.03) |
Schedule of Antidilutive Unvested RSUs Excluded from Computation of Net Loss per Share | The following table summarizes the gross number of potential dilutive unvested RSUs excluded due to antidilution (unadjusted for the treasury stock method): Quarter Ended (in thousands) April 3, 2022 April 4, 2021 KKI 11 4,809 KKUK — 3 Insomnia Cookies 10 — KK Australia — 1,923 KK Mexico 2 25 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The reportable segment results are as follows: Quarter Ended April 3, 2022 April 4, 2021 Net revenues: U.S. and Canada $ 253,127 $ 222,470 International 87,201 66,506 Market Development 32,204 32,833 Total net revenues $ 372,532 $ 321,809 Quarter Ended April 3, 2022 April 4, 2021 Segment Adjusted EBITDA: U.S. and Canada $ 33,608 $ 27,563 International 17,244 15,348 Market Development 11,287 10,891 Corporate (13,232) (7,399) 48,907 46,403 Interest expense, net 7,351 8,249 Interest expense — related party (1) — 5,566 Income tax expense 3,800 685 Depreciation and amortization expense 27,841 23,401 Share-based compensation 5,041 2,368 Employer payroll taxes related to share-based compensation 55 — Other non-operating income, net (2) (321) (442) Acquisition and integration expenses (3) 517 2,152 Shop closure expenses (4) 230 — IPO-related expenses (5) — 3,476 Gain on sale-leaseback (2,374) — Other (6) 309 1,326 Net income/(loss) $ 6,458 $ (378) 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. 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 and integration-related activities for the applicable period. 4. Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment. 5. Includes consulting and advisory fees incurred in connection with preparation for and execution of the Company’s IPO. 6. The quarters ended April 3, 2022 and April 4, 2021 consist primarily of legal expenses incurred outside the ordinary course of business on matters described in Note 10 |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Apr. 03, 2022segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) | 3 Months Ended | ||
Apr. 03, 2022acquiredBusiness | Apr. 04, 2021storeacquiredBusiness | Oct. 04, 2021store | |
KKI | |||
Business Acquisition [Line Items] | |||
Number of businesses acquired | acquiredBusiness | 0 | ||
Krispy Kreme United States Shops 2021 | |||
Business Acquisition [Line Items] | |||
Number of businesses acquired | acquiredBusiness | 2 | ||
Number of stores | store | 17 | ||
Krispy Kreme Canada Shops 2021 | |||
Business Acquisition [Line Items] | |||
Number of stores | store | 10 | ||
Percentage of voting interests acquired | 60.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 17,042 | $ 15,278 |
Work in progress | 444 | 700 |
Finished goods and purchased merchandise | 23,559 | 18,873 |
Inventories | $ 41,045 | $ 34,851 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, net - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended |
Apr. 03, 2022USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 1,105,322 |
Foreign currency impact | (199) |
Ending balance | 1,105,123 |
U.S. and Canada | |
Goodwill [Roll Forward] | |
Beginning balance | 688,048 |
Foreign currency impact | 295 |
Ending balance | 688,343 |
International | |
Goodwill [Roll Forward] | |
Beginning balance | 283,342 |
Foreign currency impact | (494) |
Ending balance | 282,848 |
Market Development | |
Goodwill [Roll Forward] | |
Beginning balance | 133,932 |
Foreign currency impact | 0 |
Ending balance | $ 133,932 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, net - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 03, 2022 | Apr. 04, 2021 | Jan. 02, 2022 | |
Intangible assets with definite lives | |||
Gross Carrying Amount | $ 437,986 | $ 438,350 | |
Accumulated Amortization | (110,342) | (103,730) | |
Net Amount | 327,644 | 334,620 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | 1,095,886 | 1,096,250 | |
Accumulated Amortization | (110,342) | (103,730) | |
Net Amount | 985,544 | 992,520 | |
Amortization of intangible assets | 7,300 | $ 7,400 | |
Trade name | |||
Intangible assets with indefinite lives | |||
Trade name | 657,900 | 657,900 | |
Franchise agreements | |||
Intangible assets with definite lives | |||
Gross Carrying Amount | 32,545 | 32,545 | |
Accumulated Amortization | (8,756) | (8,369) | |
Net Amount | 23,789 | 24,176 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Accumulated Amortization | (8,756) | (8,369) | |
Customer relationships | |||
Intangible assets with definite lives | |||
Gross Carrying Amount | 15,000 | 15,000 | |
Accumulated Amortization | (4,899) | (4,684) | |
Net Amount | 10,101 | 10,316 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Accumulated Amortization | (4,899) | (4,684) | |
Reacquired franchise rights | |||
Intangible assets with definite lives | |||
Gross Carrying Amount | 383,941 | 384,305 | |
Accumulated Amortization | (90,187) | (84,177) | |
Net Amount | 293,754 | 300,128 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Accumulated Amortization | (90,187) | (84,177) | |
Website development costs | |||
Intangible assets with definite lives | |||
Gross Carrying Amount | 6,500 | 6,500 | |
Accumulated Amortization | (6,500) | (6,500) | |
Net Amount | 0 | 0 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Accumulated Amortization | $ (6,500) | $ (6,500) |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Assets | ||
Operating lease | $ 432,374 | $ 435,168 |
Finance lease | $ 19,558 | $ 19,298 |
Finance lease assets, statement of financial position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Total leased assets | $ 451,932 | $ 454,466 |
Current | ||
Current operating lease liabilities | 49,474 | 50,359 |
Current finance lease liabilities | $ 1,667 | $ 1,583 |
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 | $ 413,765 | $ 415,208 |
Noncurrent finance lease liabilities | $ 23,129 | $ 22,890 |
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 | $ 488,035 | $ 490,040 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Operating lease cost | ||
Short-term lease cost | $ 1,045 | $ 772 |
Variable lease costs | 5,007 | 3,079 |
Sublease income | (69) | (80) |
Amortization of right of use assets | 584 | 798 |
Interest on lease liabilities | 445 | 593 |
Selling, general and administrative expense | ||
Operating lease cost | ||
Operating lease cost | 564 | 710 |
Operating expenses | ||
Operating lease cost | ||
Operating lease cost | $ 21,883 | $ 20,338 |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 25,080 | $ 22,196 |
Operating cash flows for finance leases | 449 | 512 |
Financing cash flows for finance leases | 447 | 879 |
Right-of-use assets obtained in exchange for new lease liabilities: | ||
Operating leases | 7,833 | 26,275 |
Finance leases | $ 284 | $ 1,788 |
Leases - Additional Information
Leases - Additional Information (Details) | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2022USD ($)property | Apr. 03, 2022USD ($) | Apr. 04, 2021USD ($) | |
Leases [Abstract] | |||
Leases, termination costs | $ 0 | $ 0 | |
Number of real estate properties | property | 1 | ||
Proceeds from sale-leaseback | $ 3,000,000 | 3,000,000 | 0 |
Gain on sale-leaseback | $ 2,600,000 | $ 2,374,000 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair value, recurring - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Level 1 | ||
Assets: | ||
401(k) mirror plan assets | $ 104 | $ 111 |
Total Assets | 104 | 111 |
Liabilities: | ||
Total Liabilities | 0 | 0 |
Level 1 | Interest rate derivatives | ||
Assets: | ||
Derivative assets | 0 | |
Liabilities: | ||
Derivative liabilities | 0 | |
Level 1 | Commodity derivatives | ||
Assets: | ||
Derivative assets | 0 | 0 |
Level 1 | Foreign currency derivatives | ||
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
401(k) mirror plan assets | 0 | 0 |
Total Assets | 6,658 | 1,486 |
Liabilities: | ||
Total Liabilities | 442 | 14,747 |
Level 2 | Interest rate derivatives | ||
Assets: | ||
Derivative assets | 4,311 | |
Liabilities: | ||
Derivative liabilities | 14,667 | |
Level 2 | Commodity derivatives | ||
Assets: | ||
Derivative assets | 2,347 | 1,486 |
Level 2 | Foreign currency derivatives | ||
Liabilities: | ||
Derivative liabilities | 442 | 80 |
Level 3 | ||
Assets: | ||
401(k) mirror plan assets | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities: | ||
Total Liabilities | 0 | 0 |
Level 3 | Interest rate derivatives | ||
Assets: | ||
Derivative assets | 0 | |
Liabilities: | ||
Derivative liabilities | 0 | |
Level 3 | Commodity derivatives | ||
Assets: | ||
Derivative assets | 0 | 0 |
Level 3 | Foreign currency derivatives | ||
Liabilities: | ||
Derivative liabilities | $ 0 | $ 0 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) $ in Thousands, gal in Millions | Apr. 03, 2022USD ($)gal | Jan. 02, 2022USD ($)gal |
Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative asset, fair value | $ 2,347 | $ 1,486 |
Derivative liability, fair value | 442 | 80 |
Derivatives Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative asset, fair value | 4,311 | 0 |
Derivative liability, fair value | $ 0 | $ 14,667 |
Commodity derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative, notional amount (in gallon) | gal | 2.3 | 1.9 |
Derivative asset, fair value | $ 2,300 | $ 1,500 |
Interest rate derivatives | Derivatives Designated as Hedging Instruments | Cash Flow Hedging | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative liability, fair value | 4,300 | 14,700 |
Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative asset, fair value | 400 | 100 |
Derivative, notional amount | $ 73,600 | $ 51,800 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Derivative Instruments in Condensed Consolidated Balance Sheets, Fair Value (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 2,347 | $ 1,486 |
Derivative liability, fair value | 442 | 80 |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 4,311 | 0 |
Derivative liability, fair value | 0 | 14,667 |
Commodity derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 2,300 | 1,500 |
Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 400 | 100 |
Prepaid expense and other current assets | Commodity derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 2,347 | 1,486 |
Prepaid expense and other current assets | Interest rate derivatives | Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 3,097 | 0 |
Accrued liabilities | Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 442 | 80 |
Accrued liabilities | Interest rate derivatives | Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 0 | 8,535 |
Other assets | Interest rate derivatives | Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 1,214 | 0 |
Other long-term obligations and deferred credits | Interest rate derivatives | Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $ 0 | $ 6,132 |
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 | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative gain (loss) recognised in income, derivatives designated as hedging instruments | $ (2,510) | $ (2,530) |
Derivative gain (loss) recognised in income, derivatives not designated as hedging instruments | 498 | 382 |
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 | (2,510) | (2,530) |
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 | (363) | (611) |
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 | $ 861 | $ 993 |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) | Mar. 22, 2022granteeshares | Mar. 21, 2022 | Apr. 03, 2022USD ($)shares | Apr. 04, 2021USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option plan expense | $ | $ 800,000 | $ 0 | ||
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 | $ | $ 4,200,000 | $ 2,400,000 | ||
Restricted Stock Units (RSUs), Fifty-Four Month Vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 54 months | |||
Number of grantees affected | grantee | 615 | |||
Number of unvested shares affected (in shares) | 1,100,000 | |||
Restricted Stock Units (RSUs), Fifty-Four Month Vesting | Share-based payment arrangement, tranche one | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 18 months | |||
Award vesting rights, percentage | 33.33% | |||
Restricted Stock Units (RSUs), Fifty-Four Month Vesting | Share-based payment arrangement, tranche two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 36 months | |||
Award vesting rights, percentage | 33.33% | |||
Restricted Stock Units (RSUs), Fifty-Four Month Vesting | Share-based payment arrangement, tranche three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 54 months | |||
Award vesting rights, percentage | 33.33% | |||
Restricted Stock Units (RSUs), Sixty Month Vesting Period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 60 months | |||
Restricted Stock Units (RSUs), Sixty Month Vesting Period | 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 Vesting Period | 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 Compensation - Sche
Share-based Compensation - Schedule of RSU Activity (Details) - Restricted Stock Units (RSUs) shares in Thousands | 3 Months Ended |
Apr. 03, 2022$ / sharesshares | |
KKI | |
RSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 5,866 |
Granted (in shares) | shares | 888 |
Vested (in shares) | shares | 73 |
Forfeited (in shares) | shares | 152 |
Ending balance, non-vested shares outstanding (in shares) | shares | 6,530 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 13.78 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 14.50 |
Vested, weighted average grant date fair value (in USD per share) | $ / shares | 9.19 |
Forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 14.78 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 13.91 |
KKUK | |
RSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 60 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Ending balance, non-vested shares outstanding (in shares) | shares | 60 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 15.77 |
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 | 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 | $ 15.77 |
Insomnia Cookies | |
RSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 33 |
Granted (in shares) | shares | 10 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 2 |
Ending balance, non-vested shares outstanding (in shares) | shares | 41 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 79.66 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 169.70 |
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 | 89.81 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 101.03 |
KK Australia | |
RSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 1,897 |
Granted (in shares) | shares | 21 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Ending balance, non-vested shares outstanding (in shares) | shares | 1,918 |
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 | 1.73 |
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 | $ 1.49 |
KK Mexico | |
RSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 58 |
Granted (in shares) | shares | 2 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Ending balance, non-vested shares outstanding (in shares) | shares | 60 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 32.86 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 40.14 |
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 | $ 33.08 |
Share-based Compensation - Sc_2
Share-based Compensation - Schedule of RSU Unrecognized Compensation Expense (Details) - Restricted Stock Units (RSUs) $ in Thousands | 3 Months Ended |
Apr. 03, 2022USD ($) | |
KKI | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 63,775 |
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 | $ 370 |
Recognized Over a Weighted-Average Period of | 1 year 8 months 12 days |
Insomnia Cookies | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 3,208 |
Recognized Over a Weighted-Average Period of | 3 years 6 months |
KK Australia | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 512 |
Recognized Over a Weighted-Average Period of | 9 months 18 days |
KK Mexico | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 1,676 |
Recognized Over a Weighted-Average Period of | 3 years 8 months 12 days |
Share-based Compensation - Sc_3
Share-based Compensation - Schedule of Stock Option Activity (Details) - KKI - $ / shares | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Options | ||
Beginning balance, share options outstanding (in shares) | 2,817,000 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | 0 |
Forfeited or expired (in shares) | 0 | |
Ending balance, share options outstanding (in shares) | 2,817,000 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance, share options outstanding (in USD per share) | $ 6.10 | |
Granted (in USD per share) | 0 | |
Exercised (in USD per share) | 0 | |
Forfeited or expired (in USD per share) | 0 | |
Ending balance, share options outstanding (in USD per share) | 6.10 | |
Weighted Average Exercise Price | ||
Beginning balance, share options outstanding (in USD per share) | 14.61 | |
Granted (in USD per share) | 0 | |
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 |
Share-based Compensation - Sc_4
Share-based Compensation - Schedule of Stock Option Unrecognized Compensation Expense (Details) - Share-based Payment Arrangement, Option - KKI $ in Thousands | 3 Months Ended |
Apr. 03, 2022USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 13,031 |
Recognized Over a Weighted-Average Period of | 4 years 1 month 6 days |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 37.04% | 223.13% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Mar. 11, 2021 | Apr. 03, 2022 | Jan. 02, 2022 |
Loss Contingencies [Line Items] | |||
Letters of credit outstanding | $ 10.3 | $ 8.5 | |
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 | |||||
Apr. 03, 2022USD ($)equityMethodInvestment | Apr. 04, 2021USD ($) | Jan. 02, 2022USD ($)equityMethodInvestment | Jan. 03, 2021USD ($) | Apr. 30, 2019USD ($) | Dec. 31, 2017USD ($) | |
Related Party Transaction [Line Items] | ||||||
Number of franchisees | equityMethodInvestment | 2 | 2 | ||||
Interest expense, related party | $ 0 | $ 5,566,000 | ||||
Equity Method Investee | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investments | 1,000,000 | $ 1,100,000 | ||||
Trade receivables | 500,000 | 400,000 | ||||
Equity Method Investee | Sales of Ingredients and Equipment to Franchisees | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related parties | 2,000,000 | 1,800,000 | ||||
Equity Method Investee | Royalty Revenues from Franchisees | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related parties | 300,000 | 300,000 | ||||
Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Due from employees | 4,200,000 | $ 4,400,000 | ||||
Affiliated Entity | Keurig Dr Pepper Inc. (“KDP”) | Licensing Revenues | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related parties | 500,000 | 500,000 | ||||
Affiliated Entity | BDT Capital Partners, LLC (“BDT”) | Advisory Services Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | 0 | 600,000 | ||||
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 | $ 0 | $ 5,600,000 | ||||
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% | ||||
KremeWorks Canada, L.P. | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 25.00% | 25.00% |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total net revenues | $ 372,532 | $ 321,809 |
Company Shops, DFD and Branded Sweet Treat Line | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenues | 351,834 | 300,495 |
Mix and equipment revenue from franchisees | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenues | 12,218 | 13,090 |
Franchise royalties and other | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenues | $ 8,480 | $ 8,224 |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Contract Balances with Customers (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Trade receivables, net of allowances of $118 and $896, respectively | $ 40,053 | $ 41,132 |
Trade receivables, allowance for credit loss | 118 | 896 |
Deferred revenue: | ||
Current | 16,649 | 17,458 |
Noncurrent | 3,090 | 2,981 |
Total deferred revenue | $ 19,739 | $ 20,439 |
Net Earnings_(Loss) per Share -
Net Earnings/(Loss) per Share - Schedule of Net Loss Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Earnings Per Share [Abstract] | ||
Net income/(loss) attributable to Krispy Kreme, Inc. | $ 4,002 | $ (3,061) |
Adjustment to net income/(loss) attributable to common shareholders | (374) | (141) |
Net income/(loss) attributable to common shareholders - Basic | 3,628 | (3,202) |
Additional income attributed to noncontrolling interest due to subsidiary potential common shares | (40) | (85) |
Net income/(loss) attributable to common shareholders - Diluted | $ 3,588 | $ (3,287) |
Basic weighted average common shares outstanding (in shares) | 167,261 | 124,987 |
Dilutive effect of outstanding common stock options and RSUs (in shares) | 2,224 | 0 |
Diluted weighted average common shares outstanding (in shares) | 169,485 | 124,987 |
Earnings/(loss) per share attributable to common shareholders: | ||
Basic earnings/(loss) per share (in dollars per shares) | $ 0.02 | $ (0.03) |
Diluted earnings/(loss) per share (in dollars per shares) | $ 0.02 | $ (0.03) |
Net Earnings_(Loss) per Share_2
Net Earnings/(Loss) per Share - Schedule of Antidilutive Unvested RSUs Excluded from Computation of Net Loss per Share (Details) - Restricted Stock Units (RSUs) - shares shares in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
KKI | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share | 11 | 4,809 |
KKUK | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share | 0 | 3 |
Insomnia Cookies | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share | 10 | 0 |
KK Australia | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share | 0 | 1,923 |
KK Mexico | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share | 2 | 25 |
Net Earnings_(Loss) per Share_3
Net Earnings/(Loss) per Share - Additional Information (Details) shares in Millions | 3 Months Ended |
Apr. 03, 2022shares | |
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 | 2.8 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2022USD ($) | Apr. 03, 2022USD ($)segment | Apr. 04, 2021USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 3 | ||
Total net revenues | $ 372,532 | $ 321,809 | |
Segment adjusted EBITDA | 48,907 | 46,403 | |
Interest expense, net | 7,351 | 8,249 | |
Interest expense — related party | 0 | 5,566 | |
Income tax expense | 3,800 | 685 | |
Depreciation and amortization expense | 27,841 | 23,401 | |
Share-based compensation | 5,041 | 2,368 | |
Employer payroll taxes related to share-based compensation | 55 | 0 | |
Other non-operating income, net | (321) | (442) | |
Acquisition and integration expenses | 517 | 2,152 | |
Shop closure expenses | 230 | 0 | |
IPO-related expenses | 0 | 3,476 | |
Gain on sale-leaseback | $ (2,600) | (2,374) | 0 |
Other | 309 | 1,326 | |
Net income/(loss) | 6,458 | (378) | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Segment adjusted EBITDA | (13,232) | (7,399) | |
U.S. and Canada | |||
Segment Reporting Information [Line Items] | |||
Total net revenues | 253,127 | 222,470 | |
U.S. and Canada | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment adjusted EBITDA | 33,608 | 27,563 | |
International | |||
Segment Reporting Information [Line Items] | |||
Total net revenues | 87,201 | 66,506 | |
International | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment adjusted EBITDA | 17,244 | 15,348 | |
Market Development | |||
Segment Reporting Information [Line Items] | |||
Total net revenues | 32,204 | 32,833 | |
Market Development | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment adjusted EBITDA | $ 11,287 | $ 10,891 |