Sep. 3, 2009 (PR Newswire) -- WINSTON-SALEM, N.C., Sept. 3 /PRNewswire-FirstCall/ -- Krispy Kreme Doughnuts, Inc. (NYSE: KKD) (the "Company") today reported financial results for the second quarter of fiscal 2010, ended August 2, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/19991216/NYTH146 )
Second Quarter Highlights:
-- Operating income for the second quarter was $2.9 million compared to an
operating loss of $1.0 million in the second quarter last year
-- The Company posted a net loss of $157,000 in the second quarter (nil per
share) compared to a net loss of $1.9 million ($0.03 per share) in the
second quarter last year
-- Same store sales at Company-owned stores rose 5.9% year-over-year in the
second quarter, compared to a gain of 2.1% in the first quarter this
year and a decline of 4.1% in the second quarter last year
"Our operating results continued to improve year-over-year in the second quarter," commented Jim Morgan, the Company's President and Chief Executive Officer. "The warm summer months traditionally are a challenging time for our domestic Krispy Kreme shops, but we believe our improved results in the second quarter show that we can succeed in making our business more profitable year-round through continued implementation of our strategic initiatives." Our second quarter progress included these accomplishments:
-- We opened our third new Company small retail concept shop on July 29, in
the Raleigh, North Carolina market;
-- We signed letters of intent for three leases in the Raleigh, North
Carolina market, bringing our total new small retail concept commitments
to eight;
-- Three domestic franchisees opened a total of four small retail concept
shops in the quarter in Texas, Arizona and New York;
-- International franchisees continued to expand, with a net increase of 11
stores in the quarter;
-- The Kool Kreme((R)) soft serve test was expanded into five additional
Company shops, bringing the total number of Company test locations to
ten; all Krispy Kreme shops in both the Piedmont Triad, North Carolina
and Nashville, Tennessee markets offer Kool Kreme, and our broadcast
advertising in these markets includes messaging about Kool Kreme;
-- Our use of broadcast media has expanded beyond the Piedmont Triad, North
Carolina and Nashville, Tennessee markets into Huntsville, Alabama and
Columbia, South Carolina;
-- We expanded the elements of our marketing mix beyond broadcast and print
media into social and interactive media, including Facebook and Twitter;
we also signed a new sponsorship agreement with the NFL Carolina
Panthers; and
-- We introduced new longer shelf-life, individually wrapped snack
products, including glazed cherry and apple pies and chocolate cupcakes,
in our off-premises distribution channels in selected markets.
"While there is still much work to be done to achieve sustained revenue growth and our long-term goals, we are pleased to have improved our financial performance in the second quarter and first half of fiscal 2010 compared to the same periods last year," Morgan continued. "These results reflect the hard work and dedication of our team members and franchisees. We continue to believe we have the right strategies, and that the results from their implementation will be more fully reflected in our financial results in the quarters and years ahead."
The Company has filed its Quarterly Report on Form 10-Q, which includes interim financial information as well as management's discussion and analysis of the Company's financial condition and results of operations.
Management will host a conference call to review second quarter results this afternoon at 4:30 p.m. (ET). A live webcast of the conference call will be available at www.KrispyKreme.com. To access an archived audio replay of the call, dial 888-203-1112 and enter the passcode 2904404. International callers may access the replay by dialing 719-457-0820 and entering passcode 2904404. The audio replay will be available through September 10, 2009.
About Krispy Kreme
Krispy Kreme is a leading branded retailer and wholesaler of high-quality doughnuts and packaged sweets, including its Original Glazed((R)) doughnut. Headquartered in Winston-Salem, North Carolina, the Company has offered the highest quality doughnuts and great tasting coffee since it was founded in 1937. Today, Krispy Kreme can be found in over 548 locations around the world. Visit us 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," "could," "will," "should," "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 international growth strategy; our ability to implement our new domestic operating model; currency, economic, political and other risks associated with our international operations; the price and availability of raw materials needed to produce doughnut mixes and other ingredients; compliance with government regulations relating to food products and franchising; our relationships with off-premises customers; our ability to protect our trademarks and trade secrets; risks associated with our high levels of indebtedness; restrictions on our operations and compliance with covenants contained in our secured credit facilities; changes in customer preferences and perceptions; and risks associated with competition. 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, contain uncertainties that may materially affect actual results and may be beyond the Company's control, and could cause actual results and developments 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.
