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Krispy Kreme Reports Financial Results for the Second Quarter of Fiscal 2015

By: Krispy Kreme |  4 Shares     73 Reads

Reaffirms Full Year Adjusted EPS Guidance

WINSTON-SALEM, N.C. - (BUSINESS WIRE) - Sep. 9, 2014 - Krispy Kreme Doughnuts, Inc. (NYSE: KKD) (the "Company") today reported financial results for the second quarter of fiscal 2015, ended August 3, 2014. The Company also reaffirmed its adjusted earnings guidance for the full year.

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

• Systemwide store count rose 3.4% in the quarter (6.8% year-to-date) to 884 Company and franchise shops worldwide
• Systemwide domestic same store sales rose 2.8%, including a 1.1% gain at Company shops; constant currency international franchise same store sales declined 2.4%
• Revenues increased 6.9% to $120.5 million from $112.7 million
• Operating income was $9.6 million compared to $10.6 million; losses on agricultural derivatives reduced second quarter fiscal 2015 operating income by approximately $1.3 million ($0.02 per share adjusted)
• Adjusted net income was $9.0 million ($0.13 per share) compared to $9.6 million ($0.14 per share); adjusted net income and adjusted EPS are non-GAAP measures (see the reconciliation of GAAP to adjusted earnings in the table accompanying this release)
• Net income was $5.8 million ($0.08 per share) compared to $4.7 million ($0.07 per share) in the second quarter last year
• Cash provided by operating activities was $14.0 million compared to $13.1 million in the second quarter last year

President and Chief Executive Officer Tony Thompson commented: "A key priority going into the quarter was to regain top line momentum in our Company shops. And we did, by very strategically using promotional incentives and other marketing tools to increase traffic count and top line growth.

"Our Company and domestic franchise shops posted same store sales gains of 1.1% and 3.8%, respectively, on top of double-digit growth in the second quarter last year. On a two-year stacked basis, same store sales rose 11.6% at Company stores and 15.8% at domestic franchise shops, enabling us to significantly outperform most, if not all, of our quick-service restaurant peers. Outside the U.S., our international franchisees continue to perform well, and we are excited about their success in their individual markets.

"With same store sales turning positive as we moved through the quarter and the momentum continuing into the current period, and with the acceleration of domestic unit growth and ongoing expansion in other countries, our 10%+ systemwide unit growth plan for fiscal 2015 is on track, and we are pleased to reaffirm our adjusted EPS guidance for the full year."

Thompson continued: "Our longer-term strategic focus remains on increasing doughnut sales and guest traffic by creating more "every day" doughnut use occasions for our products, while enhancing and expanding our beverage platform. The introduction of Krispy Kreme ready-to-drink coffee earlier this year and the August launch of Krispy Kreme K-Cup® packs demonstrate our recent progress in bringing Krispy Kreme-branded beverages to market. However, I firmly believe that we have only scratched the surface in capitalizing on our retail and licensing beverage opportunities. We will, therefore, be investing to strengthen our beverage capabilities with the intention of building consumer awareness and market share from current levels."

Thompson concluded: "Since joining Krispy Kreme in June, I have visited Company and franchise shops and commissaries across the country and met with team members, franchise partners, suppliers, guests and shareholders. Through these interactions, I have gained an even greater appreciation for Krispy Kreme’s inspiring culture, the talent of our team members and partners, and the widespread passion for our iconic brand from all our stakeholders. I am more excited than ever about our ability to grow our revenues, profitability and store count over the long-term."

Second Quarter Fiscal 2015 Results

Consolidated Results

Revenues increased 6.9% to $120.5 million from $112.7 million.

Direct operating expenses were $101.1 million, representing 83.9% of revenues compared to 83.2% of revenues last year.

General and administrative expenses were $6.7 million (5.6% of revenues) compared to $5.7 million (5.0% of revenues) in the year-ago period. The increase in general and administrative expenses in the second quarter of fiscal 2015 reflects, among other things, previously announced expenses related to the implementation of the new enterprise resource planning system totaling approximately $0.9 million; there were no comparable ERP costs in the second quarter last year.

Operating income was $9.6 million compared to $10.6 million last year.

Adjusted net income was $9.0 million ($0.13 per share) compared to $9.6 million ($0.14 per share) last year.

Segment Results

Company Stores’ revenues increased 3.8% to $78.5 million from $75.7 million. Same store sales at Company shops rose 1.1% against an extremely robust gain of 10.5% in the second quarter last year. The Company Stores segment posted operating income of $1.3 million compared to $1.8 million last year.

On June 17, 2014, the Company acquired the business and operating assets of its franchisee in Birmingham, Alabama, consisting of four Krispy Kreme shops that had fiscal 2014 sales of approximately $9 million. The acquired assets include the seller’s franchise rights for 13 counties in Alabama. The total transaction consideration was approximately $7.5 million cash.

The Company Stores segment recorded charges to earnings related to the acquisition of approximately $0.4 million in the second quarter. The charges reflect the settlement as part of the acquisition of the pre-existing franchise contract between the Company and the franchisee, as well as approximately $0.1 million of transaction costs.

Approximately $3.9 million of the purchase price was allocated to reacquired franchise rights, which is being amortized to earnings through 2020, which was the expiration date of the terminated franchise agreement. After accounting for such amortization, the Company does not expect that the acquisition will have a material accretive effect on the Company’s results of operations, at least in the short term.

Domestic Franchise revenues increased 17.8% to $3.3 million, reflecting higher royalties, initial franchise fees and ancillary revenues. Total sales by domestic franchisees rose 7.0%, while same store sales at Domestic Franchise shops increased 3.8%. Domestic Franchise segment operating income increased to $1.9 million from $1.5 million last year.

International Franchise revenues increased 24.4% to $7.5 million, driven by higher royalties. Sales by international franchise stores rose 11.4% to $115 million (9.3% excluding the effects of foreign exchange rate changes). International Franchise segment revenues for the quarter include approximately $0.9 million of royalties collected in the quarter related to franchisee sales in prior periods which had not previously been recorded due to uncertainty surrounding their collection; similar collections from the same franchisee recorded as revenue in the second quarter of fiscal 2014 were approximately $0.3 million. Constant currency same store sales at international franchise stores fell 2.4% in the quarter compared to a decline of 7.1% in the second quarter last year, continuing the overall trend of improving same store sales internationally in recent years. International Franchise segment operating income was $5.1 million compared to $4.2 million in the second quarter last year.

KK Supply Chain revenues (including sales to Company stores) rose 4.0% to $59.5 million; external KK Supply Chain revenues rose 10.5% to $31.2 million. KK Supply Chain generated operating income of $8.5 million in the second quarter of fiscal 2015 compared to $9.0 million last year. KK Supply Chain operating income in the second quarter of fiscal 2015 includes approximately $1.3 million of realized and unrealized losses on agricultural derivative positions, compared to approximately $0.4 million of losses in the second quarter last year.

Full Year Outlook

Based on year-to-date results and other current information, management is reaffirming its forecast of adjusted net income for fiscal 2015 of between $48 million and $51 million ($0.69 to $0.74 per share). Achievement of this forecast would represent a year-over-year increase in adjusted earnings per share of between 13% and 21% from the $0.61 reported for fiscal 2014 which was, in turn, up 30% from fiscal 2013.

Conference Call

The Company will host a conference call to review results for the second quarter as well as its outlook for the balance of the year this afternoon at 4:30 p.m. (ET). A webcast of the conference call will be available at www.krispykreme.com. The conference call also can be accessed over the phone by dialing (877) 312- 5514 or, for international callers, by dialing (970) 315-0452. An archived replay of the call will be available shortly after its conclusion by dialing (855) 859-2056, or (404) 537-3406 for international callers; the passcode is 84314242. The audio replay will be available through September 16, 2014. A transcript of the conference call also will be available on the Company’s website.

About Krispy Kreme

Krispy Kreme is a leading branded specialty retailer and wholesaler of premium quality sweet treats and complementary products, including its signature Original Glazed® doughnut. Headquartered in Winston-Salem, NC, the Company has offered the highest quality doughnuts and great tasting coffee since it was founded in 1937. Today, there are over 880 Krispy Kreme shops in more than 20 countries around the world. Connect with Krispy Kreme at www.krispykreme.com.

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

 

KRISPY KREME DOUGHNUTS, INC.
CONSOLIDATED STATEMENT OF INCOME
					Three Months Ended								Six Months Ended
				August 3,				August 4,				August 3,				August 4,
				2014				2013				2014				2013
				(In thousands, except per share amounts)
Revenues				$	120,516			$	112,729			$	242,096			$	233,354
Operating expenses:
	Direct operating expenses (exclusive of depreciation and
	amortization expense shown below)				101,084				93,806				196,256				190,364
	General and administrative expenses				6,737				5,655				13,784				11,710
	Depreciation and amortization expense				3,033				2,664				6,206				5,484
	Impairment charges and lease termination costs				38				4				46				12
Operating income					9,624				10,600				25,804				25,784
Interest income					64				70				235				131
Interest expense					(162	)			(354	)			(305	)			(791	)
Loss on retirement of debt					-				(967	)			-				(967	)
Equity in losses of equity method franchisees					(61	)			(60	)			(118	)			(113	)
Other non-operating income and (expense), net					152				(1	)			320				(6	)
Income before income taxes					9,617				9,288				25,936				24,038
Provision for income taxes					3,865				4,571				10,528				11,322
Net income				$	5,752			$	4,717			$	15,408			$	12,716
Earnings per common share:
	Basic			$	0.09			$	0.07			$	0.23			$	0.19
	Diluted			$	0.08			$	0.07			$	0.22			$	0.18
Weighted average shares outstanding:
	Basic				66,008				67,267				66,265				67,139
	Diluted				68,725				71,089				69,236				70,833

 

KRISPY KREME DOUGHNUTS, INC.
CONSOLIDATED BALANCE SHEET
				August 3,				February 2,
				2014				2014
				(In thousands)
	ASSETS
CURRENT ASSETS:
Cash and cash equivalents				$	35,680			$	55,748
Receivables					28,391				25,268
Receivables from equity method franchisees					739				675
Inventories					16,954				16,750
Deferred income taxes					23,774				23,847
Other current assets					7,736				5,199
	Total current assets				113,274				127,487
Property and equipment					103,780				92,823
Investments in equity method franchisees					-				-
Goodwill and other intangible assets					30,432				24,097
Deferred income taxes					74,146				83,461
Other assets					11,192				10,678
	Total assets			$	332,824			$	338,546
	LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of lease obligations				$	328			$	344
Accounts payable					16,049				16,788
Accrued liabilities					28,671				29,276
	Total current liabilities				45,048				46,408
Lease obligations, less current portion					5,263				1,659
Other long-term obligations and deferred credits					25,923				25,386
Commitments and contingencies
SHAREHOLDERS’ EQUITY:
Preferred stock, no par value					-				-
Common stock, no par value					314,224				338,135
Accumulated other comprehensive income					-				-
Accumulated deficit					(57,634	)			(73,042	)
	Total shareholders’ equity				256,590				265,093
		Total liabilities and shareholders’ equity		$	332,824			$	338,546

 

KRISPY KREME DOUGHNUTS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
					Six Months Ended
					August 3,				August 4,
					2014				2013
						(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income					$	15,408			$	12,716
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense						6,206				5,484
Deferred income taxes						9,388				10,050
Accrued rent expense						324				411
Loss on retirement of debt						-				967
(Gain) loss on disposal of property and equipment						99				(62	)
(Gain) on refranchising						-				(876	)
Share-based compensation						2,207				1,867
Provision for doubtful accounts						174				(63	)
Amortization of deferred financing costs						54				231
Equity in losses of equity method franchisees						118				113
Unrealized losses on agricultural derivative positions						121				150
Other						6				52
Change in assets and liabilities:
Receivables						(4,197	)			(464	)
Inventories						(80	)			(2,889	)
Other current and non-current assets						(2,259	)			918
Accounts payable and accrued liabilities						229				(2,378	)
Other long-term obligations and deferred credits						(111	)			1,241
Net cash provided by operating activities						27,687				27,468
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment						(13,063	)			(12,362	)
Proceeds from disposals of property and equipment						196				623
Proceeds from refranchising						-				681
Business acquisition, net of cash acquired						(7,152	)			-
Other investing activities						427				433
Net cash used for investing activities						(19,592	)			(10,625	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt and lease obligations						(200	)			(24,455	)
Deferred financing costs						-				(87	)
Proceeds from exercise of stock options						6,655				1,686
Repurchase of common shares						(34,618	)			-
Net cash used for financing activities						(28,163	)			(22,856	)
Net decrease in cash and cash equivalents						(20,068	)			(6,013	)
Cash and cash equivalents at beginning of period						55,748				66,332
Cash and cash equivalents at end of period					$	35,680			$	60,319

KRISPY KREME DOUGHNUTS, INC.

NON-GAAP FINANCIAL INFORMATION

As of February 2, 2014, the Company had net deferred income tax assets of approximately $107 million, of which approximately $58 millionrelated to federal and state net operating loss carryovers. The Company’s federal net operating loss carryovers totaled approximately $174 million.

The Company has reported cumulative pretax income of over $120 million since the beginning of fiscal 2010, and the Company also has generated significant taxable income during this period. However, because of the Company’s utilization of its federal and state net operating loss carryovers and other deferred tax assets, the Company’s cash payments for income taxes have been relatively insignificant during this period. As a result, the provision for income tax expense has substantially exceeded cash payments for income taxes. Until such time as the Company’s net operating loss carryovers are exhausted or expire, GAAP income tax expense is expected to continue to substantially exceed the amount of cash income taxes payable by the Company.

In the second quarter of fiscal 2014, the Company recorded a charge of $1.0 million related to the retirement of its secured credit facilities, consisting principally of the writeoff of deferred financing costs related to the Company’s term loan, which was retired in full, and the termination of an interest rate hedge related to the term loan. Charges of this nature are not expected to recur on a regular basis.

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

				Historical Periods
				Three Months Ended						Six Months Ended
				August 3,			August 4,			August 3,			August 4,
				2014			2013			2014			2013
				(In thousands, except per share amounts)
Net income, as reported				$	5,752		$	4,717		$	15,408		$	12,716
Loss on retirement of debt					-			967			-			967
Provision for deferred income taxes					3,226			3,945			9,388			10,050
Adjusted net income				$	8,978		$	9,629		$	24,796		$	23,733
Adjusted earnings per common share:
Basic				$	0.14		$	0.14		$	0.37		$	0.35
Diluted				$	0.13		$	0.14		$	0.36		$	0.34
Weighted average shares outstanding:
Basic					66,008			67,267			66,265			67,139
Diluted					68,725			71,089			69,236			70,833

 

			Management's Earnings Guidance						Historical Period
			Year Ending February 1, 2015						Year Ended
			From			To			February 2, 2014
			(In thousands, except per share amounts)
Net income, as reported			$	30,200		$	32,000		$	34,256
Loss on retirement of debt				-			-			967
Provision for deferred income taxes				17,800			19,000			8,014
Adjusted net income			$	48,000		$	51,000		$	43,237
Adjusted earnings per common share:
Basic			$	0.73		$	0.77		$	0.64
Diluted			$	0.69		$	0.74		$	0.61
Weighted average shares outstanding:
Basic				66,200			66,200			67,261
Diluted				69,200			69,200			71,054

 

KRISPY KREME DOUGHNUTS, INC.
SEGMENT INFORMATION
								Three Months Ended								Six Months Ended
								August 3,				August 4,				August 3,				August 4,
								2014				2013				2014				2013
								(In thousands)
Revenues:
	Company Stores:
		On-premises sales:
			Retail sales					$	36,124			$	33,581			$	72,231			$	69,598
			Fundraising sales						2,696				2,559				7,675				7,336
			Total on-premises sales						38,820				36,140				79,906				76,934
		Wholesale sales							39,715				39,549				79,077				80,676
		Company Stores revenues							78,535				75,689				158,983				157,610
	Domestic Franchise								3,296				2,799				6,795				5,670
	International Franchise								7,534				6,057				14,115				12,502
	KK Supply Chain:
				Total revenues					59,503				57,201				119,815				117,012
				Less – intersegment sales elimination					(28,352	)			(29,017	)			(57,612	)			(59,440	)
				External KK Supply Chain revenues					31,151				28,184				62,203				57,572
				Total revenues				$	120,516			$	112,729			$	242,096			$	233,354
Operating income:
	Company Stores							$	1,261			$	1,790			$	5,677			$	7,104
	Domestic Franchise								1,900				1,526				4,056				2,965
	International Franchise								5,111				4,239				9,391				8,770
	KK Supply Chain								8,489				8,999				21,243				19,238
				Total segment operating income					16,761				16,554				40,367				38,077
	General and administrative expenses								(6,737	)			(5,655	)			(13,784	)			(11,710	)
	Corporate depreciation and amortization expense								(362	)			(295	)			(733	)			(571	)
	Impairment charges and lease termination costs								(38	)			(4	)			(46	)			(12	)
				Consolidated operating income				$	9,624			$	10,600			$	25,804			$	25,784
Depreciation and amortization expense:
	Company Stores							$	2,457			$	2,174			$	5,041			$	4,528
	Domestic Franchise								49				22				95				36
	International Franchise								2				1				3				4
	KK Supply Chain								163				172				334				345
	Corporate								362				295				733				571
				Total depreciation and amortization expense				$	3,033			$	2,664			$	6,206			$	5,484

 

KRISPY KREME DOUGHNUTS, INC.
SELECTED OPERATING STATISTICS
							August 3,					May 4,					February 2,					November 3,
							2014					2014					2014					2013
Systemwide Store Count:
	Company stores							103					97					95					94
	Domestic Franchise stores							160					163					159					155
	International Franchise stores							621					595					574					563
								884					855					828					812
							Three Months Ended										Six Months Ended
							August 3,					August 4,					August 3,					August 4,
							2014					2013					2014					2013
Systemwide Sales (in thousands):(1)
	Company stores						$	77,806				$	74,893				$	157,624				$	156,014
	Domestic Franchise stores							84,096					78,616					171,807					159,602
	International Franchise stores							114,706					102,971					229,217					213,226
	International Franchise stores, in constant dollars(2)							114,706					104,958					229,217					213,137
Change in Same Store Sales (on-premises sales only):(3)
	Company stores							1.1		%			10.5		%			(0.2	)	%			11.4		%
	Domestic Franchise stores							3.8		%			12.0		%			4.2		%			11.9		%
	International Franchise stores							(1.0	)	%			(11.2	)	%			(2.8	)	%			(9.6	)	%
	International Franchise stores, in constant dollars(2)							(2.4	)	%			(7.1	)	%			(2.3	)	%			(5.8	)	%
Company Stores - change in same store sales attributable to:
	Retail pricing							1.8		%			3.8		%			2.1		%			3.3		%
	Guest check average (exclusive of pricing)							(1.4	)				(0.5	)				(1.1	)				(0.4	)
	Customer count							0.7					7.3					(1.6	)				8.4
	Fundraising pricing							0.5					-					0.5					-
	Other							(0.5	)				(0.1	)				(0.1	)				0.1
	Total							1.1		%			10.5		%			(0.2	)	%			11.4		%
Change in Same Store Customer Count - Company stores
	(retail sales only)							0.8		%			8.0		%			(1.8	)	%			9.7		%
Average guest check - Company stores (retail sales only)							$	7.67				$	7.68				$	7.56				$	7.49
Company stores - store operating weeks								1,289					1,221					2,523					2,439
Wholesale Metrics - Company stores:(4)
	Grocers/mass merchants:
	Change in average weekly number of doors							0.4		%			(5.4	)	%			(1.4	)	%			(4.8	)	%
	Change in average weekly sales per door							(0.3	)	%			9.6		%			(0.6	)	%			12.5		%
	Convenience stores:
	Change in average weekly number of doors							4.4		%			0.7		%			3.5		%			(0.9	)	%
	Change in average weekly sales per door							(4.6	)	%			6.5		%			(4.9	)	%			6.9		%

(1) Systemwide sales, a non-GAAP financial measure, include sales by both Company and franchise Krispy Kreme stores. The Company believes systemwide sales data are useful in assessing consumer demand for the Company’s products, the overall success of the Krispy Kreme brand and, ultimately, the performance of the Company. All of the Company’s royalty revenues are computed as percentages of sales made by the Company’s domestic and international franchisees, and substantially all of KK Supply Chain’s external sales of doughnut mixes and other ingredients ultimately are determined by demand for the Company’s products at franchise stores. Accordingly, sales by the Company’s franchisees have a direct effect on the Company’s royalty and KK Supply Chain revenues, and therefore on the Company’s profitability. The Company’s consolidated financial statements appearing elsewhere herein include sales by Company stores, sales to franchisees by the KK Supply Chain business segment, and royalties and fees received from franchise stores based on their sales, but exclude sales by franchise stores to their customers.

(2) Computed on a pro forma basis assuming the average rate of exchange between the U.S. dollar and each of the foreign currencies in which the Company’s international franchisees conduct business had been the same in the comparable prior year period.

(3) The change in “same store sales” represents the aggregate on-premises sales (including fundraising sales) during the current year period for all stores which had been open for more than 78 consecutive weeks during the current year period (but only to the extent such sales occurred in the 79th or later week of each store’s operation) divided by the aggregate on-premises sales of such stores for the comparable weeks in the preceding year period. Once a store has been open for at least 79 consecutive weeks, its sales are included in the computation of same stores sales for all subsequent periods. In the event a store is closed temporarily (for example, for remodeling) and has no sales during one or more weeks, such store’s sales for the comparable weeks during the earlier or subsequent period are excluded from the same store sales computation. The change in “same store customer count” is similarly computed, but is based upon the number of retail transactions reported in the Company’s point-of-sale system.

(4) For Company wholesale sales, “average weekly number of doors” represents the average number of customer locations to which product deliveries are made during a week by Company Stores, and “average weekly sales per door” represents the average weekly sales to each such location by Company Stores.

KRISPY KREME DOUGHNUTS, INC.
STORE COUNT
		Number of Company Stores
		Factory
		Stores		Hot Shops		Fresh Shops		Total
Three months ended August 3, 2014
May 4, 2014		78		18		1		97
Opened		1		-		-		1
Closed		-		-		-		-
Change in store type		1		(1)		-		-
Transferred from Domestic Franchise		2		3		-		5
August 3, 2014		82		20		1		103
Six months ended August 3, 2014
February 2, 2014		76		18		1		95
Opened		3		-		-		3
Closed		-		-		-		-
Change in store type		1		(1)		-		-
Transferred from Domestic Franchise		2		3		-		5
August 3, 2014		82		20		1		103
Three months ended August 4, 2013
May 5, 2013		74		20		1		95
Opened		2		-		-		2
Closed		(1)		-		-		(1)
Transferred to Domestic Franchise		(3)		-		-		(3)
August 4, 2013		72		20		1		93
Six months ended August 4, 2013
February 3, 2013		76		20		1		97
Opened		3		-		-		3
Closed		(1)		-		-		(1)
Transferred to Domestic Franchise		(6)		-		-		(6)
August 4, 2013		72		20		1		93

 

KRISPY KREME DOUGHNUTS, INC.
STORE COUNT
		Number of Domestic Franchise Stores
		Factory
		Stores		Hot Shops		Fresh Shops		Total
Three months ended August 3, 2014
May 4, 2014		109		40		14		163
Opened		2		1		-		3
Closed		-		-		(1)		(1)
Transferred to Company Stores		(2)		(3)		-		(5)
August 3, 2014		109		38		13		160
Six months ended August 3, 2014
February 2, 2014		107		37		15		159
Opened		4		4		-		8
Closed		-		-		(2)		(2)
Transferred to Company Stores		(2)		(3)		-		(5)
August 3, 2014		109		38		13		160
Three months ended August 4, 2013
May 5, 2013		102		30		14		146
Opened		-		1		-		1
Closed		-		-		-		-
Transferred from Company Stores		3		-		-		3
August 4, 2013		105		31		14		150
Six months ended August 4, 2013
February 3, 2013		99		29		14		142
Opened		-		2		-		2
Closed		-		-		-		-
Transferred from Company Stores		6		-		-		6
August 4, 2013		105		31		14		150

 

KRISPY KREME DOUGHNUTS, INC.
STORE COUNT
		Number of International Franchise Stores
		Factory
		Stores		Hot Shops		Fresh Shops		Kiosks		Total
Three months ended August 3, 2014
May 4, 2014		126		9		310		150		595
Opened		3		-		20		7		30
Closed		(1)		-		(3)		-		(4)
August 3, 2014		128		9		327		157		621
Six months ended August 3, 2014
February 2, 2014		125		9		296		144		574
Opened		5		-		34		14		53
Closed		(2)		-		(3)		(1)		(6)
August 3, 2014		128		9		327		157		621
Three months ended August 4, 2013
May 5, 2013		121		9		271		131		532
Opened		1		-		11		7		19
Closed		(2)		-		(3)		-		(5)
Change in store type		(1)		-		1		-		-
August 4, 2013		119		9		280		138		546
Six months ended August 4, 2013
February 3, 2013		120		9		257		123		509
Opened		4		-		27		15		46
Closed		(4)		-		(5)		-		(9)
Change in store type		(1)		-		1		-		-
August 4, 2013		119		9		280		138		546

Source: Krispy Kreme Doughnuts, Inc.

Contacts:

Lafeea Watson
Krispy Kreme
Media Relations
336-726-8878
lwatson@krispykreme.com

Anita K. Booe
Krispy Kreme
Investor Relations
336-703-6902
abooe@krispykreme.com

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