Net income up 21% in 2Q at Domino's Pizza

July 29, 2002

ANN ARBOR, Mich. -- Domino's, Inc., announced record results for the second quarter of 2002.

For the period, which ended June 16, net income increased 21.8 percent to $10.8 million, compared to $8.9 million in the same period last year.

System-wide sales increased 6 percent to $904 million, compared to $853 million in the same period last year.

Domestic same-store sales increased 4.2 percent, comprised of a 4.7 percent increase in domestic franchise same-store sales and a 1.5 percent increase in domestic company-owned same-store sales. International same-store sales increased 4.7 percent, on a constant dollar basis, marking the 34th-consecutive quarter of international same-store sales growth.

Earnings before interest, taxes, depreciation and amortization increased 13.9 percent to a second quarter record of $41.6 million.

A Domino's release credited increases in second-quarter and year-to-date system-wide sales to increases in domestic and international same-store sales, as well as worldwide store counts. It also called revenue gains the primary result of same-store sales increases at domestic company-owned and franchise stores.

In the release, Domino's chairman and chief executive officer David Brandon called the company's sales momentum the product of company-wide improvements in store operations and marketing.

During a conference call later that day, Brandon said that while company stores outperformed franchise stores in 2001, the unspoken rivalry between the two groups may have led the latter to outperform the former this year.

"When one beats the other, that wakes the other side up," said Brandon. "I think that is what's happened on the franchise side this year."

In reference to the company's ongoing store performance improvement initiatives, Brandon said franchise store closures are slowing a bit, but the company will continue to weed out poor performers. "We've raised the bar" and holding "franchisees to a higher standard. ... If they can't meet the standards we've set, then we have to take aggressive action."

Year to date, systemwide sales are up 7 percent to $1.8 billion, compared to $1.7 billion last year. Total revenues rose 5.4 percent, from $571 billion last year, to $602 billion this year.

Domino's Pizza operates 7,096 pizza stores in the U.S. and more than 50 countries.

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