Krispy kreme reports strong fourth quarter 2022 results
Charlotte, n.c.--(business wire)--krispy kreme, inc. (nasdaq: dnut) (“krispy kreme” or the “company”) today reported financial results for the fourth quarter and full year ended january 1, 2023. net revenue in the quarter grew 9.2%, inclusive of a negative 3.7% impact from foreign currency exchange (“fx”) headwinds. sales per hub grew 15.0% in the u.s. and canada to $4.6 million and 7.7% in international to $9.8 million. organic revenue in the quarter grew 12.5% driven by double digit organic growth in all three business segments. for the full year 2022, net revenue grew 10.5%, inclusive of a negative 2.7% impact from fx headwinds, and organic revenue grew 12.1%. our efforts to improve performance through our network optimization and closing unprofitable shops led to expenses of $12.4 million, over 90% non cash, which contributed to a gaap net loss of $1.0 million for the fourth quarter. the company is already seeing improved performance from our hubs without spokes in the u.s. adjusted ebitda grew 17%, or an even stronger 25% in constant currency, and adjusted ebitda margins expanded 90 basis points in the quarter compared to the same quarter a year ago, led by strong performance from the u.s. and canada and market development segments and sequential improvement in our international segment. gaap diluted loss per share for the quarter was $0.02 compared to income of $0.01 in the same quarter last year. adjusted diluted earnings per share was $0.11 for the quarter, up 38% compared to the same quarter a year ago. free cash flow in the fourth quarter was $32.4 million. commenting on the performance, ceo mike tattersfield stated, “we are pleased with the strong end to 2022, with notable progress on expanding our omni-channel model, furthering our global growth strategy and executing successfully on the initial phase of our hub optimization efforts. our global fresh, premium halloween and winter holiday specialty doughnuts resonated strongly with consumers, helping drive a record of more than 1.6 billion doughnuts sold in 2022. our ecommerce business also achieved impressive growth of 23%, marking the best quarter in this channel since the pandemic, led by growth in insomnia cookies and krispy kreme in the u.s.” mike continued, “looking to 2023, we are well-positioned to deliver another year of terrific growth with a great start led by premium offerings for celebrations. our performance this year will be led by continued expansion of our capital efficient omni-channel model as we aim to grow our fresh points of access by 10% to 15% in 2023. we are particularly excited for our global growth this year as we expect to open in five to seven new countries in 2023, including in france, as we continue on our journey to being the most loved sweet treat brand in the world.” financial highlights $ in millions, except per share data q4 2022 vs q4 2021 2022 vs 2021 net revenue $404.6 9.2% $1,529.9 10.5% organic revenue (1) $415.4 12.5% $1,549.8 12.1% gaap net loss $(1.0) nm $(8.8) 40.9% adjusted net income, diluted (1) $18.6 38.9% $49.6 (10.6)% operating income $5.2 (68.4)% $29.0 (29.5)% operating income margin 1.3% -310 bps 1.9% -110 bps adjusted ebitda (1) $55.9 17.2% $190.7 1.5% adjusted ebitda margin (1) 13.8% +90 bps 12.5% -110 bps gaap diluted loss per share $(0.02) $(0.03) $(0.10) $0.08 adjusted diluted eps (1) $0.11 $0.03 $0.29 $(0.08) notes: (1) non-gaap figures – please refer to reconciliation of non-gaap financial measures. key operating metrics $ in millions, except access points q4 2022 vs q4 2021 global points of access 11,837 13.5% sales per hub (u.s. and canada) ttm $4.6 15.0% sales per hub (international) ttm $9.8 7.7% ecommerce as a percent of retail sales 18.3% +260 bps fourth quarter and full year 2022 consolidated results net revenue grew 9.2% in the quarter to $404.6 million, or 23.0% on a two-year stack basis. total company organic revenue grew 12.5% in the quarter compared to the same quarter last year, and 26.4% on a two-year stack basis. organic revenue growth in the quarter was strong across all segments due to the increase in points of access and a strong delivered fresh daily (“dfd”) performance. for the full year 2022, net revenue grew 10.5% to $1.53 billion, or 33.9% on a two-year stack basis. organic revenue grew 12.1% in 2022, or 24.6% on a two-year stack basis, driven by points of access growth and a 10% increase in sales per dfd door in the u.s. and canada. gaap net loss for the quarter was $1.0 million, compared to a gaap net income of $4.3 million a year ago. the decrease was driven by expenses of $12.4 million, over 90% of which were non-cash, associated with previously announced optimization efforts and shop closures. excluding that expense, gaap net income would have increased in the fourth quarter. adjusted ebitda in the quarter grew 17.2% to $55.9 million, or 25.0% in constant currency, with adjusted ebitda margins expanding 90 basis points to 13.8%. adjusted net income, diluted grew 38.9% to $18.6 million in the quarter. gaap diluted loss per share in the quarter was $0.02 compared to income of $0.01 in the same quarter last year. adjusted diluted eps increased 37.5% to $0.11 from $0.08 in the same quarter last year. for the full year 2022, gaap net loss was $8.8 million, an improvement of 40.9% compared to 2021. gaap net loss for the year included $19.0 million in expense related to the previously discussed optimization efforts, over 90% of which were non-cash. adjusted ebitda grew 1.5% to $190.7 million in 2022, or 7.1% in constant currency. adjusted net income, diluted for 2022 declined 10.6% to $49.6 million. gaap diluted loss per share for the full year 2022 was $0.10 compared to a loss of $0.18 in 2021. adjusted diluted eps for the year was $0.29. weighted diluted average shares outstanding for the fourth quarter of 2022 were 169.8 million, compared to 169.1 million in the same quarter last year. weighted diluted average shares outstanding for the full year 2022 were 169.5 million, compared to 150.3 million for the full year 2021, primarily as a result of the ipo. fourth quarter and full year 2022 segment results u.s. and canada: in the u.s. and canada segment in the fourth quarter, net revenue grew 11.1% to $276.9 million from $249.2 million a year ago, driven by strong points of access expansion over the last year and a record average weekly revenue per door of approximately $620 driven by strong sales of specialty doughnuts. sales per hub increased 15.0% to $4.6 million. organic revenue in the quarter increased 11.6% driven by our omni-channel model, primarily the strength of dfd, as well as double digit same-store sales growth from insomnia cookies. for the full year, net revenue grew 11.3% to $1.0 billion while organic revenue increased 9.1%. u.s. and canada adjusted ebitda in the fourth quarter increased 16.2% to $37.0 million, with margin expansion of 50 basis points to 13.3%, driven primarily by the strong performance of our hub and spoke model from increased dfd doors and sales per door as well as improved performance from our hubs without spokes as optimization efforts highlighted at our investor day in december 2022 are already producing results. price increases were successfully implemented on fresh doughnuts in october 2022 showing low levels of elasticity. for the full year, u.s. and canada adjusted ebitda increased 10.1% to $118.5 million while margins were approximately flat at 11.5%. international: in the international segment, net revenue in the fourth quarter grew 3.3% to $92.9 million, with the stronger dollar reducing growth by 8.0%. sales per hub increased 7.7% to $9.8 million. organic growth of 11.3% in the quarter was driven by successful specialty doughnut sales and expansion of dfd. the company saw growth across all of our international markets, including in the u.k. which saw sequential improvement compared to the third quarter. for the full year, the international segment saw net revenue increase 9.9% to $365.9 million, with organic growth of 17.7%, which excludes the impact of the stronger u.s. dollar. international adjusted ebitda in the fourth quarter was approximately flat over the prior year at $20.5 million, or an increase of 13.5% in constant currency. international adjusted ebitda margin was 22.0% for the quarter, down 110 basis points from the prior year but an increase of 210 basis points from the prior quarter. for the full year, international adjusted ebitda declined 7.3% to $75.5 million, or an increase of 3.8% in constant currency. market development: in the market development segment net revenue in the fourth quarter grew 10.7% to $34.7 million or 20.9% in constancy currency. organic growth accelerated to 23.4% in the quarter with strong performances across our global franchise partners and our equity owned japanese market. for the full year, market development net revenue increased 6.4% to $130.9 million, or 13.7% in constant currency, while organic growth was 19.3%. market development adjusted ebitda in the fourth quarter increased 11.3% to $12.3 million, or 22.0% in constant currency, led by strong increases in international franchise and our equity owned japan business, partially offset by domestic franchise acquisitions. for the full year, market development adjusted ebitda increased 8.8% to $44.4 million, or 17.1% in constant currency. balance sheet and capital expenditures during the fourth quarter 2022, the company invested $36.7 million in capital expenditures, primarily to support hub and spoke expansion. for the full year 2022, the company invested $111.7 million in capital expenditures, or 7.3% of revenue, and $17.3 million for franchise acquisitions in the u.s. as of january 1, 2023, the company had $35.4 million of cash and cash equivalents and net debt of $746.0 million. free cash flow in the fourth quarter was $32.4 million with the adjusted ebitda generated from operating activities in excess of capital expenditures reflecting the capital-efficient hub and spoke growth model and free cash flow of $28.1 million for the full year 2022. 2023 financial outlook krispy kreme issues the following guidance for the full year 2023 net revenue of $1.65 billion to $1.68 billion, +8% to +10% vs 2022 (+9% to +11% in constant currency) organic revenue growth of 9% to 11% adjusted ebitda of $205 million to $215 million, +8% to +13% vs 2022 (+10% to +14% in constant currency) adjusted net income, diluted, of $52 million to $58 million, +5% to +17% vs 2022 (+9% to +21% in constant currency) adjusted diluted eps of $0.31 to $0.34, +7% to +17% vs 2022 (+10% to +21% in constant currency) income tax rate between 24.5% to 26.0% capital expenditures between $105 million to $115 million, or approximately 6.6% of revenue interest expense, net between $39 million to $43 million the above guidance assumes a negative 1% impact to 2023 revenue and a negative $3 million impact to 2023 adjusted ebitda from fx headwinds, with the impact entirely in the first half of the year. the company expects to reduce its net leverage in 2023, as we make progress towards our 2026 goal of approximately 2.0x to 2.5x net leverage. definitions the following definitions apply to terms used throughout this press release: global points of access: reflects all locations at which fresh doughnuts or cookies can be purchased. we define global points of access to include all hot light theater shops, fresh shops, carts and food trucks, dfd doors and cookie shops, at both company-owned and franchise locations as of the end of the respective reporting period. we monitor global points of access as a metric that informs the growth of our omni-channel presence over time and believe this metric is useful to investors to understand our footprint in each of our segments. hubs: reflects locations where fresh doughnuts are produced and processed for sale at any point of access. we define hubs to include self-sustaining hot light theater shops and doughnut factories, at both company-owned and franchise locations as of the end of the respective reporting period. sales per hub: sales per hub equals fresh revenues from hubs with spokes, divided by the average number of hubs with spokes at the end of the five most recent quarters. fresh revenues from hubs with spokes: fresh revenues include product sales generated from our doughnut shop business (including ecommerce and delivery), as well as dfd sales, but excluding sales from our legacy wholesale business and our branded sweet treat line. it also excludes all insomnia cookies revenues as the measure is focused on the krispy kreme business. fresh revenues from hubs with spokes equals the fresh revenues derived from those hubs currently producing product for other shops, carts and food trucks, and/or dfd doors, but excluding fresh revenues derived from those hubs not currently producing product for other shops, carts and food trucks, and/or dfd doors. free cash flow: defined as cash provided by operating activities less purchases of property and equipment. conference call krispy kreme will host a public conference call at 8:30 am eastern time today to discuss its results for the fourth quarter of 2022. the conference call can be accessed by dialing 1 (800) 599-5188 and entering the conference id 5487868. international participants can access the call via the corresponding number listed here and entering the conference id 5487868. to listen to the live audio webcast and q&a, visit the krispy kreme investor relations website at investors.krispykreme.com. a replay and transcript of the webcast will be available on the website within 24 hours after the call. krispy kreme’s earnings press release and related materials will also be available on the investor relations section of the company’s website. about krispy kreme headquartered in charlotte, n.c., krispy kreme is one of the most beloved and well-known sweet treat brands in the world. our iconic original glazed® doughnut is universally recognized for its hot-off-the-line, melt-in-your-mouth experience. krispy kreme operates in over 30 countries through its unique network of fresh doughnut shops, partnerships with leading retailers, and a rapidly growing ecommerce and delivery business with nearly 12,000 fresh points of access. our purpose of touching and enhancing lives through the joy that is krispy kreme guides how we operate every day and is reflected in the love we have for our people, our communities and the planet. connect with krispy kreme doughnuts at www.krispykreme.com, or on one of its many social media channels, including www.facebook.com/krispykreme and www.twitter.com/krispykreme. cautionary note regarding forward-looking statements this press release contains forward-looking statements that involve risks and uncertainties. the words “believe,” “may,” “could,” “will,” “should,” “anticipate,” “estimate,” “expect,” “outlook,” “guidance,” or similar words, or the negative of these words, identify forward-looking statements. such forward-looking statements are based on certain assumptions and estimates that we consider reasonable but are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial conditions, business, prospects, growth strategy and liquidity. accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. the inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. our actual results could differ materially from the forward-looking statements included herein. factors that could cause actual results to differ from those expressed in forward-looking statements include, without limitation, the risks and uncertainties described under the headings “special note regarding forward-looking statements” and “risk factors” in the prospectus, dated june 30, 2022, filed by us with the securities and exchange commission (“sec”) and described in the other filings we make from time to time with the sec. we believe that these factors include, but are not limited to, the impact of pandemics, changes in consumer preferences, the impact of inflation, and our ability to execute on our omni-channel business strategy. these forward-looking statements are made only as of the date of this document, and we do not undertake any obligation, other than as may be required by applicable law, to update or revise any forward-looking or cautionary statement to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise. non-gaap measures this press release includes certain non-gaap financial measures including organic revenue growth, adjusted ebitda, adjusted net income, adjusted diluted eps, fresh revenue from hubs with spokes and sales per hub, which differ from results using u.s. generally accepted accounting principles (“gaap”). these non-gaap financial measures are not universally consistent calculations, limiting their usefulness as comparative measures. other companies may calculate similarly titled financial measures differently than we do or may not calculate them at all. additionally, these non-gaap financial measures are not measurements of financial performance under gaap. in order to facilitate a clear understanding of our consolidated historical operating results, you should examine our non-gaap financial measures in conjunction with our historical consolidated financial statements and notes thereto filed with the sec. to the extent that the company provides guidance, it does so only on a non-gaap basis. the company does not provide reconciliations of such forward-looking non-gaap measures to gaap due to the inability to predict the amount and timing of impacts outside of the company’s control on certain items, such as net income and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant. krispy kreme, inc. consolidated statements of operations (in thousands, except per share amounts) fiscal years ended january 1, 2023 (52 weeks) january 2, 2022 (52 weeks) january 3, 2021 (53 weeks) (unaudited) net revenues product sales $ 1,497,882 $ 1,353,466 $ 1,085,110 royalties and other revenues 32,016 30,925 36,926 total net revenues 1,529,898 1,384,391 1,122,036 product and distribution costs 406,227 354,093 310,909 operating expenses 704,287 630,239 488,061 selling, general and administrative expense 223,198 222,394 182,317 marketing expenses 42,566 39,489 34,000 pre-opening costs 4,227 5,568 11,583 other expenses/(income), net 10,157 (10,102 ) 10,488 depreciation and amortization expense 110,261 101,608 80,398 operating income 28,975 41,102 4,280 interest expense, net 34,102 32,622 34,741 interest expense – related party — 10,387 22,468 other non-operating expense/(income), net 3,036 2,191 (1,101 ) loss before income taxes (8,163 ) (4,098 ) (51,828 ) income tax expense 612 10,745 9,112 net loss (8,775 ) (14,843 ) (60,940 ) net income attributable to noncontrolling interest 6,847 9,663 3,361 net loss attributable to krispy kreme, inc $ (15,622 ) $ (24,506 ) $ (64,301 ) net loss per share: common stock - basic $ (0.10 ) $ (0.18 ) $ (0.52 ) common stock - diluted $ (0.10 ) $ (0.18 ) $ (0.52 ) weighted average shares outstanding: basic 167,471 147,655 124,987 diluted 167,471 147,655 124,987 quarter ended january 1, 2023 (13 weeks) january 2, 2022 (13 weeks) net revenue product sales $ 395,837 $ 364,334 royalties and other revenues 8,762 6,263 total net revenues 404,599 370,597 product and distribution costs 106,688 96,927 operating expenses 184,027 167,506 selling, general and administrative expense 62,932 58,977 marketing expenses 10,197 7,868 pre-opening costs 713 1,233 other expenses/(income), net 8,357 (5,737 ) depreciation and amortization expense 26,479 27,350 operating income 5,206 16,473 interest expense, net 10,294 7,394 other non-operating expense, net 953 2,317 (loss)/income before income taxes (6,041 ) 6,762 income tax (benefit)/expense (5,056 ) 2,479 net (loss)/income (985 ) 4,283 net income attributable to noncontrolling interest 1,734 2,927 net (loss)/income attributable to krispy kreme, inc. $ (2,719 ) $ 1,356 net (loss)/income per share: common stock - basic $ (0.02 ) $ 0.01 common stock - diluted $ (0.02 ) $ 0.01 weighted average shares outstanding: basic 167,826 167,246 diluted 167,826 169,130 krispy kreme, inc. consolidated balance sheets (in thousands, except per share data) as of january 1, 2023 january 2, 2022 (unaudited) assets current assets: cash and cash equivalents $ 35,371 $ 38,562 restricted cash 359 630 accounts receivable, net 51,089 47,491 inventories 46,239 34,851 taxes receivable 18,263 14,662 prepaid expense and other current assets 26,953 20,701 total current assets 178,274 156,897 property and equipment, net 472,358 438,918 goodwill 1,087,908 1,105,322 other intangible assets, net 966,088 992,520 operating lease right of use asset, net 417,381 435,168 other assets 26,528 16,429 total assets $ 3,148,537 $ 3,145,254 liabilities and shareholders’ equity current liabilities: current portion of long-term debt $ 40,034 $ 36,583 current operating lease liabilities 43,160 50,359 accounts payable 225,276 182,104 accrued liabilities 104,424 140,750 structured payables 103,575 116,361 total current liabilities 516,469 526,157 long-term debt, less current portion 739,052 680,307 noncurrent operating lease liabilities 412,759 415,208 deferred income taxes, net 143,124 145,418 other long-term obligations and deferred credits 38,258 42,509 total liabilities 1,849,662 1,809,599 commitments and contingencies shareholders’ equity: common stock, $0.01 par value; 300,000 shares authorized as of both january 1, 2023 and january 2, 2022; 168,137 and 167,251 shares issued and outstanding as of january 1, 2023 and january 2, 2022, respectively 1,681 1,673 additional paid-in capital 1,426,105 1,415,185 shareholder note receivable (4,813 ) (4,382 ) accumulated other comprehensive loss, net of income tax (9,151 ) (2,478 ) retained deficit (217,490 ) (178,409 ) total shareholders’ equity attributable to krispy kreme, inc. 1,196,332 1,231,589 noncontrolling interest 102,543 104,066 total shareholders’ equity 1,298,875 1,335,655 total liabilities and shareholders’ equity $ 3,148,537 $ 3,145,254 krispy kreme, inc. consolidated statements of cash flows (in thousands) fiscal years ended january 1, 2023 (52 weeks) january 2, 2022 (52 weeks) january 3, 2021 (53 weeks) (unaudited) cash flows from operating activities: net loss $ (8,775 ) $ (14,843 ) $ (60,940 ) adjustments to reconcile net loss to net cash provided by operating activities: depreciation and amortization expense 110,261 101,608 80,398 deferred income taxes (14,237 ) (3,496 ) (36 ) loss on extinguishment of debt — 1,700 — impairment and lease termination charges 18,297 3,507 4,701 loss on disposal of property and equipment 393 458 2,771 gain on sale-leaseback (6,549 ) (8,673 ) — share-based compensation 18,170 22,923 11,601 change in accounts and notes receivable allowances 570 275 1,047 inventory write-off 868 4,071 726 gain on contingent consideration related to a business combination — — (1,521 ) settlement of interest rate swap derivatives 8,476 — — other 2,232 594 410 change in operating assets and liabilities, excluding business acquisitions and foreign currency translation adjustments: accounts, notes, and taxes receivable (9,485 ) (3,817 ) (11,942 ) inventories (12,515 ) (301 ) (15,353 ) other current and noncurrent assets (24,057 ) (316 ) 434 operating lease assets and liabilities (793 ) 7,787 (1,575 ) accounts payable and accrued liabilities 40,622 30,240 12,906 other long-term obligations and deferred credits 16,340 (493 ) 5,048 net cash provided by operating activities 139,818 141,224 28,675 cash flows used for investing activities: purchase of property and equipment (111,717 ) (119,497 ) (97,826 ) proceeds from disposals of assets 1,077 218 2,837 proceeds from sale-leaseback 8,401 11,091 — acquisition of shops and franchise rights from franchisees, net of cash acquired (17,330 ) (46,330 ) (74,890 ) purchase of equity method investment (989 ) — — principal payments received from loans to franchisees 59 92 684 disbursement for loan receivable (975 ) — — purchases of held-to-maturity debt securities — — (57 ) maturities of held-to-maturity debt securities — 1,019 1,124 net cash used for investing activities (121,474 ) (153,407 ) (168,128 ) cash flows (used for)/from financing activities: proceeds from the issuance of debt 149,000 695,000 288,097 repayment of long-term debt and lease obligations (101,181 ) (1,147,049 ) (225,541 ) payment of financing costs — (1,700 ) — proceeds from structured payables 282,023 266,851 292,756 payments on structured payables (294,457 ) (287,625 ) (225,320 ) payment of contingent consideration related to a business combination (900 ) — (506 ) capital contribution by shareholders, net of loans issued (288 ) 120,532 — proceeds from ipo, net of underwriting discounts (excluding unpaid issuance costs) — 527,329 — payments of issuance costs in connection with ipo (12,458 ) — — proceeds from sale of noncontrolling interest in subsidiary 593 53,404 21,386 distribution to shareholders (23,430 ) (48,187 ) (42 ) payments for repurchase and retirement of common stock (4,019 ) (139,103 ) — distribution to noncontrolling interest (11,721 ) (23,356 ) (11,389 ) net cash (used for)/provided by financing activities (16,838 ) 16,096 139,441 effect of exchange rate changes on cash, cash equivalents and restricted cash (4,968 ) (2,204 ) 2,045 net (decrease)/increase in cash, cash equivalents and restricted cash (3,462 ) 1,709 2,033 cash, cash equivalents and restricted cash at beginning of the fiscal year 39,192 37,483 35,450 cash, cash equivalents and restricted cash at end of the fiscal year $ 35,730 $ 39,192 $ 37,483 net cash provided by operating activities $ 139,818 $ 141,224 $ 28,675 less: purchase of property and equipment (111,717 ) (119,497 ) (97,826 ) free cash flow $ 28,101 $ 21,727 $ (69,151 ) krispy kreme, inc. reconciliation of non-gaap financial measures (unaudited and in thousands, except per share amounts) quarter ended fiscal years ended (in thousands) january 1, 2023 january 2, 2022 january 1, 2023 january 2, 2022 net (loss)/income $ (985 ) $ 4,283 $ (8,775 ) $ (14,843 ) interest expense, net 10,294 7,394 34,102 32,622 interest expense — related party (1) — — — 10,387 income tax (benefit)/expense (5,056 ) 2,479 612 10,745 depreciation and amortization expense 26,479 27,350 110,261 101,608 share-based compensation 4,852 5,950 18,170 22,923 employer payroll taxes related to share-based compensation 220 32 312 2,044 other non-operating expense, net (2) 953 2,317 3,036 2,191 bst strategic initiatives (3) 2,635 — 2,841 — acquisition and integration expenses (4) 944 1,592 2,333 5,255 new market penetration expenses (5) 828 — 1,511 — shop closure expenses (6) 11,606 2,766 19,465 2,766 restructuring and severance expenses (7) 4,321 340 7,125 1,733 ipo-related expenses (8) — 313 — 14,534 gain on sale-leaseback (2,238 ) (8,673 ) (6,549 ) (8,673 ) other (9) 1,066 1,589 6,285 4,653 adjusted ebitda $ 55,919 $ 47,732 $ 190,729 $ 187,945 quarter ended fiscal years ended (in thousands) january 1, 2023 january 2, 2022 january 1, 2023 january 2, 2022 segment adjusted ebitda: u.s. and canada $ 36,962 $ 31,811 $ 118,483 $ 107,571 international 20,479 20,746 75,512 81,422 market development 12,286 11,042 44,421 40,824 corporate (13,808 ) (15,867 ) (47,687 ) (41,872 ) total adjusted ebitda $ 55,919 $ 47,732 $ 190,729 $ 187,945 quarter ended fiscal years ended (in thousands) january 1, 2023 january 2, 2022 january 1, 2023 january 2, 2022 net (loss)/income $ (985 ) $ 4,283 $ (8,775 ) $ (14,843 ) interest expense — related party (1) — — — 10,387 share-based compensation 4,852 5,950 18,170 22,923 employer payroll taxes related to share-based compensation 220 32 312 2,044 other non-operating expense, net (2) 953 2,317 3,036 2,191 bst strategic initiatives (3) 2,635 — 2,841 — acquisition and integration expenses (4) 944 1,592 2,333 5,255 new market penetration expenses (5) 828 — 1,511 — shop closure expenses (6) 11,606 2,766 19,715 2,766 restructuring and severance expenses (7) 4,321 340 7,125 1,733 ipo-related expenses (8) — 313 — 14,534 gain on sale-leaseback (2,238 ) (8,673 ) (6,549 ) (8,673 ) other (9) 1,066 1,589 6,285 4,653 amortization of acquisition related intangibles (10) 7,149 7,230 28,456 29,803 kki term loan facility interest and debt issuance costs (11) — — — 2,448 tax impact of adjustments (12) (8,720 ) (1,830 ) (14,609 ) (12,434 ) tax specific adjustments (13) (2,248 ) 103 (2,876 ) 3,936 net income attributable to noncontrolling interest (1,734 ) (2,927 ) (6,847 ) (9,663 ) adjustment to adjusted net income attributable to common shareholders — 317 (374 ) (1,468 ) adjusted net income attributable to common shareholders - basic $ 18,649 $ 13,402 $ 49,754 $ 55,592 additional income attributed to noncontrolling interest due to subsidiary potential common shares (37 ) (5 ) (143 ) (122 ) adjusted net income attributable to common shareholders - diluted $ 18,612 $ 13,397 $ 49,611 $ 55,470 basic weighted average common shares outstanding 167,826 167,246 167,471 147,655 dilutive effect of outstanding common stock options and rsus 2,000 1,884 2,005 2,671 diluted weighted average common shares outstanding 169,826 169,130 169,476 150,326 adjusted net income per share attributable to common shareholders: basic $ 0.11 $ 0.08 $ 0.30 $ 0.38 diluted $ 0.11 $ 0.08 $ 0.29 $ 0.37 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) krispy kreme, inc. segment reporting (unaudited and in thousands, except percentages or otherwise stated) quarter ended january 1, 2023 january 2, 2022 january 3, 2021 net revenues: u.s. and canada $ 276,929 $ 249,218 $ 225,437 international 92,928 89,990 71,610 market development 34,742 31,389 28,568 total net revenues $ 404,599 $ 370,597 $ 325,615 q4 2022 organic revenue u.s. and canada international market development total company total net revenues in fourth quarter of fiscal 2022 (13 weeks) $ 276,929 $ 92,928 $ 34,742 $ 404,599 total net revenues in fourth quarter of fiscal 2021 (13 weeks) 249,218 89,990 31,389 370,597 total net revenue growth 27,711 2,938 3,353 34,002 total net revenue growth % 11.1 % 3.3 % 10.7 % 9.2 % less: impact of shop optimization program closures (1,374 ) — — (1,374 ) adjusted net revenues in fourth quarter of fiscal 2021 247,844 89,990 31,389 369,223 adjusted net revenue growth 29,085 2,938 3,353 35,376 impact of acquisitions (2,652 ) — 769 (1,883 ) impact of foreign currency translation 2,299 7,211 3,221 12,731 organic revenue growth $ 28,732 $ 10,149 $ 7,343 $ 46,224 organic revenue growth % 11.6 % 11.3 % 23.4 % 12.5 % q4 2021 organic revenue u.s. and canada international market development total company total net revenues in fourth quarter of fiscal 2021 (13 weeks) $ 249,218 $ 89,990 $ 31,389 $ 370,597 total net revenues in fourth quarter of fiscal 2020 (14 weeks) 225,437 71,610 28,568 325,615 total net revenue growth 23,781 18,380 2,821 44,982 total net revenue growth % 10.5 % 25.7 % 9.9 % 13.8 % less: impact of 53rd week (15,615 ) (3,287 ) (1,603 ) (20,505 ) adjusted net revenues in fourth quarter of fiscal 2020 209,822 68,323 26,965 305,110 adjusted net revenue growth 39,396 21,667 4,424 65,487 impact of acquisitions (20,315 ) — (2,591 ) (22,906 ) impact of foreign currency translation — (624 ) 543 (81 ) organic revenue growth $ 19,081 $ 21,043 $ 2,376 $ 42,500 organic revenue growth % 9.1 % 30.8 % 8.8 % 13.9 % fiscal years ended january 1, 2023 january 2, 2022 january 3, 2021 net revenues: u.s. and canada $ 1,033,125 $ 928,413 $ 782,717 international 365,916 332,995 230,185 market development 130,857 122,983 109,134 total net revenues $ 1,529,898 $ 1,384,391 $ 1,122,036 full year 2022 organic revenue u.s. and canada international market development total company total net revenues in fiscal 2022 (52 weeks) $ 1,033,125 $ 365,916 $ 130,857 $ 1,529,898 total net revenues in fiscal 2021 (52 weeks) 928,413 332,995 122,983 1,384,391 total net revenue growth 104,712 32,921 7,874 145,507 total net revenue growth % 11.3 % 9.9 % 6.4 % 10.5 % less: impact of shop optimization program closures (1,374 ) — — (1,374 ) adjusted net revenues in fiscal 2021 927,039 332,995 122,983 1,383,017 adjusted net revenue growth 106,086 32,921 7,874 146,881 impact of acquisitions (24,391 ) — 6,899 (17,492 ) impact of foreign currency translation 2,299 26,052 8,991 37,342 organic revenue growth $ 83,994 $ 58,973 $ 23,764 $ 166,731 organic revenue growth % 9.1 % 17.7 % 19.3 % 12.1 % full year 2021 organic revenue u.s. and canada international market development total company total net revenues in fiscal 2021 (52 weeks) $ 928,413 $ 332,995 $ 122,983 $ 1,384,391 total net revenues in fiscal 2020 (53 weeks) 782,717 230,185 109,134 1,122,036 total net revenue growth $ 145,696 $ 102,810 $ 13,849 $ 262,355 total net revenue growth % 18.6 % 44.7 % 12.7 % 23.4 % less: impact of 53rd week (15,615 ) (3,287 ) (1,603 ) (20,505 ) adjusted net revenues in fiscal 2020 767,102 226,898 107,531 1,101,531 adjusted net revenue growth 161,311 106,097 15,452 282,860 impact of acquisitions (119,377 ) — (4,175 ) (123,552 ) impact of foreign currency translation — (22,391 ) 543 (21,848 ) organic revenue growth $ 41,934 $ 83,706 $ 11,820 $ 137,460 organic revenue growth % 5.5 % 36.9 % 11.0 % 12.5 % fiscal years ended sales per hub january 1, 2023 (52 weeks) january 2, 2022 (52 weeks) january 3, 2021 (53 weeks) u.s. and canada: revenues $ 1,033,125 $ 928,413 $ 782,717 non-fresh revenues (1) (38,380 ) (37,311 ) (128,619 ) fresh revenues from insomnia cookies and hubs without spokes (2) (407,558 ) (415,768 ) (323,079 ) sales from hubs with spokes 587,187 475,334 331,019 sales per hub (millions) 4.6 4.0 3.5 international: sales from hubs with spokes (3) $ 365,916 $ 332,995 $ 230,185 sales per hub (millions) 9.8 9.1 6.4 (1) (2) (3) krispy kreme, inc. global points of access global points of access (1) fiscal years ended january 1, 2023 january 2, 2022 january 3, 2021 (unaudited) u.s. and canada: (2) hot light theater shops 238 241 229 fresh shops 68 66 47 cookie shops 231 210 184 carts, food trucks, and other (3) — 2 — dfd doors 5,741 5,204 4,137 total 6,278 5,723 4,597 international: hot light theater shops 37 32 28 fresh shops 388 370 359 carts, food trucks, and other (3) 14 1 — dfd doors 3,032 2,488 1,986 total 3,471 2,891 2,373 market development: (4) hot light theater shops 111 109 119 fresh shops 867 782 732 carts, food trucks, and other (3) 27 31 30 dfd doors 1,083 891 465 total 2,088 1,813 1,346 total global points of access (as defined) 11,837 10,427 8,316 total hot light theater shops 386 382 376 total fresh shops 1,323 1,218 1,138 total cookie shops 231 210 184 total shops 1,940 1,810 1,698 total carts, food trucks, and other 41 34 30 total dfd doors 9,856 8,583 6,588 total global points of access (as defined) 11,837 10,427 8,316 (1) (2) (3) (4) krispy kreme, inc. global hubs hubs fiscal years ended january 1, 2023 january 2, 2022 january 3, 2021 (unaudited) u.s. and canada: hot light theater shops (1) 232 238 226 doughnut factories 4 4 5 total 236 242 231 hubs with spokes 137 126 113 hubs without spokes 99 116 118 international: hot light theater shops (1) 28 25 27 doughnut factories 11 11 9 total 39 36 36 hubs with spokes 39 36 36 market development: hot light theater shops (1) 106 106 116 doughnut factories 27 27 26 total 133 133 142 total hubs 408 411 409 (1) krispy kreme, inc. net debt and leverage (in thousands, except leverage ratio) as of january 1, 2023 january 2, 2022 (unaudited) current portion of long-term debt $ 40,034 $ 36,583 long-term debt, less current portion 739,052 680,307 total long-term debt, including debt issuance costs 779,086 716,890 add back: debt issuance costs 2,247 3,833 total long-term debt, excluding debt issuance costs 781,333 720,723 less: cash and cash equivalents (35,371 ) (38,562 ) net debt $ 745,962 $ 682,161 adjusted ebitda - trailing four quarters 190,729 187,945 net leverage ratio 3.9 x 3.6 x
