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Domino's Pizza, Inc. (NYSE:DPZ) , the recognized world leader in pizza delivery, today announced results for the second quarter ended June 15, 2008. Net income was up $16.4 million versus the prior year, due primarily to recapitalization expenses incurred during the second quarter of 2007 and gains on the sale of Company- owned stores in 2008, offset in part by continued challenges in the domestic environment and resulting domestic same store sales and supply chain volume decreases. The International division continued its strong performance, posting its 58th consecutive quarter of same store sales growth, up 7.0% during the second quarter of 2008.
Second Quarter Highlights:
First First
Second Second Two Two
Quarter Quarter Quarters Quarters
(dollars in millions, except of of of of
per share data) 2008 2007 2008 2007
Net income $18.7 $2.3 $32.8 $10.7
Weighted average diluted
shares 58,789,987 64,717,208 59,443,922 64,798,109
Diluted earnings per share, as
reported $0.32 $0.04 $0.55 $0.17
Items affecting comparability
(see section below) $(0.10) $0.24 $(0.13) $0.49
Diluted earnings per share, as
adjusted $0.22 $0.28 $0.43 $0.65
Diluted EPS was $0.32 on an as-reported basis for the second quarter, up $0.28 from the as-reported prior year period. However, excluding items affecting comparability, diluted EPS declined $0.06, primarily due to increased interest expense as a result of our 2007 recapitalization and lower operating income from domestic operations.
Second Second
Quarter of Quarter of
2008 2007
Same store sales growth:
(versus prior year period)
Domestic Company-owned stores (1.1)% + 4.4%
Domestic franchise stores (5.9)% + 1.8%
Domestic stores (5.4)% + 2.1%
International stores + 7.0 % + 3.9%
Global retail sales growth:
(versus prior year period)
Domestic stores (5.0)% + 3.2%
International stores +19.6 % +15.3%
Total + 4.7 % + 7.7%
Domestic
Company- Domestic Total Inter-
owned Franchise Domestic national
Stores Stores Stores Stores Total
Store counts:
Store count at March
23, 2008 542 4,586 5,128 3,513 8,641
Openings - 22 22 60 82
Closings - (43) (43) (9) (52)
Transfers (27) 27 - - -
Store count at June 15,
2008 515 4,592 5,107 3,564 8,671
Second quarter 2008 net
growth (27) 6 (21) 51 30
Trailing four quarters
net growth (52) 31 (21) 243 222
David A. Brandon, Domino's Chairman and Chief Executive Officer, said: "Returning to positive sales comps in the U.S. has proven difficult, as the external environment continues to make it tough to regain lost sales momentum. However, I am excited about our growth initiatives and the way we are transforming our business to better position ourselves for future expansion. I like our new product platforms, our technology innovations and the cost savings we are identifying in our supply chain division. We are driving significant change in our business and our focus on improving our franchisee base -- along with all of these initiatives -- will help to us regain positive momentum. We are in a turnaround mode, which is not fun. However, we see a light at the end of the tunnel and we plan to be growing our domestic business again soon."
Brandon continued, "We continue to achieve excellent results in our international division, along with strong store growth in all regions of the world. Our international division is celebrating its 25th anniversary this year, and we're proud of the impact this growth engine has had on our Company's results." He added, "The current domestic environment continues to be difficult and challenging. However our results show the resiliency of our business model as we have produced $36.6 million in free cash flow year-to- date, which we continue to deploy in ways that provide value to our shareholders."
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