July 24, 2007 - 6:30 AM EST
Domino's Pizza Announces Second Quarter 2007 Financial Results
Posts Positive Domestic and International Same Store Sales Gains
ANN ARBOR, Mich., July 24 /PRNewswire-FirstCall/ -- Domino's Pizza, Inc. (NYSE: DPZ), the recognized world leader in pizza delivery, today announced results for the second quarter ended June 17, 2007. Management noted that, although it posted positive same store sales both domestically and internationally, the quarter's earnings were significantly impacted by expenses associated with the Company's recapitalization, which was completed in April 2007.
-- Revenues were up 3.8% for the second quarter, due primarily to an increase in domestic distribution revenues, driven by higher food prices, primarily cheese, and to a lesser extent, higher domestic Company-owned store and domestic franchise revenues, driven by increases in same store sales.
-- Net income was down 90.5% for the second quarter, driven primarily by the impact of the Company's recapitalization, offset in part by domestic same store sales growth and continued strong performance in international operations.
-- Diluted EPS was $0.04 on an as-reported basis for the second quarter, which reflected $0.24 per share of special items that affect comparability to the prior year period. As a result, diluted EPS on an as-reported basis was down $0.35 from the as-reported amount in the prior year period. However, excluding the effect of these special items, diluted EPS declined by $0.06, driven by higher interest expense related to increased debt levels as a result of the Company's recapitalization. (See the Items Affecting Comparability section and the Comments on Regulation G section.)
David A. Brandon, Domino's Chairman and Chief Executive Officer, said: 'We are pleased to report the sales momentum we created in our domestic system during the first quarter continued into the second quarter. The marketing and operational initiatives we implemented in our Team USA stores have been duplicated by many of our franchised stores over the past few quarters, and have helped drive the sales gains we are reporting today. And, we continue to benefit from the strong store growth and same store sales growth we have come to expect from our International division.'
Brandon continued: 'Our positive sales momentum is particularly important at this time, as we are currently experiencing a challenging cost environment with labor, commodity and energy prices all rising in unison, putting a short- term strain on store margins. Although we have nearly 47-years of experience successfully managing through commodity pricing cycles and fluctuating cost pressures, the current situation is unique due to the number of significant cost increases we are incurring at one time. We believe these conditions will lead to a material price increase in the pizza category.'
Conference Call Information
The Company plans to file its quarterly report on Form 10-Q this morning. Additionally, as previously announced, Domino's Pizza, Inc. will hold a conference call today at 11a.m. (Eastern) to review its second quarter 2007 financial results. The call can be accessed by dialing (888) 306-6182 (U.S./Canada) or (706) 634-4947 (International). Ask for the Domino's Pizza conference call. The call will also be web cast at www.dominos.com. If you are unable to participate on the call, a replay will be available through midnight August 24, 2007 by dialing (800) 642-1687 (U.S./Canada) or (706) 645- 9291 (International), Conference ID 2473543. The web cast will be archived for 30 days on www.dominos.com.
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