<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 10, 2000
------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from: ___________ to ___________
Commission file number: 333-74797
Domino's, Inc.
(Exact name of registrant as specified in its charter)
Delaware 38-3025165
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
30 Frank Lloyd Wright Drive
Ann Arbor, Michigan 48106
(Address of principal executive offices)
(734) 930-3030
(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
The number of shares outstanding of the registrant's common stock as of October
16, 2000 was 10 shares.
<PAGE>
Domino's, Inc.
INDEX
PART I. FINANCIAL INFORMATION Page No.
--------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
September 10, 2000 and January 2, 2000 3
Condensed Consolidated Statements of Income -
Fiscal quarter and three fiscal quarters ended
September 10, 2000 and September 12, 1999 4
Condensed Consolidated Statements of Cash Flows -
Three fiscal quarters ended September 10, 2000
and September 12, 1999 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
PART II. OTHER INFORMATION 12
SIGNATURES 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Domino's, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 10, 2000 January 2, 2000
(Unaudited) (Note)
(in thousands) ------------------- ----------------
Assets
<S> <C> <C>
Current assets:
Cash $ 26,655 $ 30,278
Accounts receivable 46,456 40,902
Notes receivable 4,737 5,172
Inventories 16,258 18,624
Prepaid expenses and other 5,382 14,890
Deferred income taxes 10,498 10,498
------------------ ---------------
Total current assets 109,986 120,364
------------------ ---------------
Property, plant and equipment:
Land and buildings 14,253 14,246
Leasehold and other improvements 55,413 54,538
Equipment 118,833 117,018
Construction in progress 5,067 3,548
------------------ ---------------
193,566 189,350
Accumulated depreciation and amortization 113,117 116,287
------------------ ---------------
Property, plant and equipment, net 80,449 73,063
------------------ ---------------
Other assets:
Deferred income taxes 72,214 73,038
Deferred financing costs 32,750 37,208
Goodwill 15,823 16,034
Covenants not-to-compete 9,126 16,970
Capitalized software 26,627 26,113
Other 19,039 18,340
------------------ ---------------
Total other assets 175,579 187,703
------------------ ---------------
Total assets $ 366,014 $ 381,130
================== ===============
Liabilities and stockholder's deficit
Current liabilities:
Current portion of long-term debt $ 15,867 $ 21,438
Accounts payable 32,970 35,108
Insurance reserves 6,967 7,152
Accrued restructuring 956 3,020
Accrued income taxes 3,702 804
Other accrued liabilities 55,045 58,586
------------------ ---------------
Total current liabilities 115,507 126,108
------------------ ---------------
Long-term liabilities:
Long-term debt, less current portion 681,213 696,132
Insurance reserves 11,302 15,485
Other accrued liabilities 22,490 22,371
------------------ ---------------
Total long-term liabilities 715,005 733,988
------------------ ---------------
Stockholder's deficit:
Common stock - -
Additional paid-in capital 120,202 120,202
Retained deficit (584,420) (599,292)
Accumulated other comprehensive income (280) 124
------------------ ---------------
Total stockholder's deficit (464,498) (478,966)
------------------ ---------------
Total liabilities and stockholder's deficit $ 366,014 $ 381,130
================== ===============
</TABLE>
_____________
Note: The balance sheet at January 2, 2000 has been derived from the audited
consolidated financial statements at that date but does not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements.
See accompanying notes.
3
<PAGE>
Domino's, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Fiscal Quarter Ended Three Fiscal Quarters Ended
September 10, September 12, September 10, September 12,
2000 1999 2000 1999
(in thousands) ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Revenues:
Corporate stores $ 85,298 $ 88,081 $ 263,713 $ 258,443
Domestic franchise royalties 27,197 26,602 82,179 79,761
Domestic distribution 140,770 144,008 412,599 411,520
International 14,561 13,212 43,143 39,059
----------- ----------- ------------ -----------
Total revenues 267,826 271,903 801,634 788,783
----------- ----------- ------------ -----------
Operating expenses:
Cost of sales 200,543 201,018 591,685 581,570
General and administrative 41,725 50,756 132,349 148,390
Restructuring - 1,958 - 3,581
----------- ----------- ------------ -----------
Total operating expenses 242,268 253,732 724,034 733,541
----------- ----------- ------------ -----------
Income from operations 25,558 18,171 77,600 55,242
Interest income 675 289 1,738 618
Interest expense 17,570 17,028 52,363 51,190
----------- ----------- ------------ -----------
Income before provision (benefit)
for income taxes and
extraordinary item 8,663 1,432 26,975 4,670
Provision (benefit) for income taxes 3,724 678 11,569 (660)
----------- ----------- ------------ -----------
Income before extraordinary item 4,939 754 15,406 5,330
Loss on debt extinguishment, net
of tax benefit of $111 181 - 181 -
----------- ----------- ------------ -----------
Net income $ 4,758 $ 754 $ 15,225 $ 5,330
=========== =========== ============ ===========
</TABLE>
________
See accompanying notes.
4
<PAGE>
Domino's, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Fiscal Quarters Ended
September 10, September 12,
2000 1999
----------- ----------
<S> <C> <C>
(In thousands)
Cash flows from operating activities:
Net cash provided by operating activities $ 40,565 $ 33,235
----------- ----------
Cash flows from investing activities:
Purchases of property, plant and equipment,
and franchise stores and commissaries (27,756) (22,023)
Other 4,467 4,408
----------- ----------
Net cash used in investing activities (23,289) (17,615)
----------- ----------
Cash flows from financing activities:
Repayments of long-term debt (20,459) (3,945)
Distributions (353) -
Capital contribution - 1,465
----------- ----------
Net cash used in financing activities (20,812) (2,480)
Effect of exchange rate changes on cash (87) 119
----------- ----------
Increase (decrease) in cash (3,623) 13,259
Cash, at beginning of period 30,278 115
----------- ----------
Cash, at end of period $ 26,655 $ 13,374
=========== ==========
</TABLE>
________
See accompanying notes.
5
<PAGE>
Domino's, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited; tabular amounts in thousands)
September 10, 2000
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In the opinion
of management, all adjustments, consisting of normal recurring accruals,
considered necessary for a fair presentation have been included. Operating
results for the fiscal quarter and three fiscal quarters ended September 10,
2000 are not necessarily indicative of the results that may be expected for the
year ended December 31, 2000. For further information, refer to the consolidated
financial statements and footnotes thereto for the year ended January 2, 2000
included on our Form 10-K.
2. Comprehensive Income
<TABLE>
<CAPTION>
Fiscal Quarter Ended Three Fiscal Quarters Ended
------------------------------------- -----------------------------------
September 10, September 12, September 10, September 12,
2000 1999 2000 1999
------------------------------------- ------------------------------------
<S> <C> <C> <C> <C>
Net income $ 4,758 $ 754 $ 15,225 $ 5,330
Currency translation adjustment (131) 38 (227) 95
Unrealized gain (loss) on investments, net of tax (115) 8 (176) 39
------------ ------------------- ---------------- --------------
Comprehensive income $ 4,512 $ 800 $ 14,822 $ 5,464
============ =================== ================ ==============
</TABLE>
3. Restructuring
In fiscal 1999, the Company recognized approximately $7.6 million in
restructuring charges comprised of staff reduction costs of $6.3 million and
exit cost liabilities of $1.3 million, as defined below. The staff reduction
costs were incurred during the second, third and fourth quarters of 1999, in
connection with the reduction of 90 corporate and administrative employees. As
of September 10, 2000, the Company had paid $6.2 million of the staff reduction
costs and management expects the remaining amount to be paid during fiscal 2000.
The exit costs were recorded in the fourth quarter of 1999 in connection with
the planned closure and relocation of 50 specifically identified corporate-owned
stores. The exit cost liability is comprised of the operating lease obligations
after the expected closure or relocation dates and related leased premises
restoration costs. As of September 10, 2000, 22 corporate-owned stores have been
relocated as a part of the restructuring. Management expects that the remaining
exit cost liabilities will be paid as the related obligations become due.
4. Debt Extinguishment
In the third fiscal quarter of 2000, the Company retired $5.0 million of
outstanding senior subordinated notes through open market transactions. The
Company recognized a gain of approximately $213,000 reflecting the difference
between the face value of the notes and the open market purchase price. The
Company also paid approximately $207,000 in non-recurring amendment fees and
recorded approximately $297,000 of amortization of deferred financing costs
related to this transaction. This retirement resulted in an after-tax
extraordinary loss of approximately $181,000.
6
<PAGE>
5. Segment Data
The following table summarizes revenues and earnings before interest, taxes,
depreciation and amortization (EBITDA) for each of the Company's reportable
segments.
<TABLE>
<CAPTION>
Fiscal quarter ended September 10, 2000 and September 12, 1999
--------------------------------------------------------------
Domestic Domestic Intersegment
Stores Distribution International Revenues Other Total
------ ------------ ------------- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Revenues -
2000 $112,495 $164,434 $14,561 $(23,664) $ - $267,826
1999 114,683 168,515 13,212 (24,507) - 271,903
EBITDA -
2000 28,657 7,812 3,511 - (6,449) 33,531
1999 31,142 6,585 2,406 - (10,071) 30,062
</TABLE>
<TABLE>
<CAPTION>
Three fiscal quarters ended September 10, 2000 and September 12, 1999
---------------------------------------------------------------------
Domestic Domestic Intersegment
Stores Distribution International Revenues Other Total
------ ------------ ------------- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Revenues -
2000 $345,892 $483,829 $43,143 $(71,230) $ - $801,634
1999 338,204 480,109 39,059 (68,589) - 788,783
EBITDA -
2000 92,110 23,999 9,494 - (24,299) 101,304
1999 93,388 19,037 6,740 - (27,413) 91,752
</TABLE>
The following table reconciles total EBITDA to consolidated income before
provision (benefit) for income taxes and extraordinary item.
<TABLE>
<CAPTION>
Fiscal quarter ended Three fiscal quarters ended
-------------------- ---------------------------
September 10, September 12, September 10, September 12,
2000 1999 2000 1999
----------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Total EBITDA $ 33,531 $ 30,062 $101,304 $ 91,752
Depreciation and amortization (7,756) (11,883) (23,100) (36,575)
Interest expense (17,570) (17,028) (52,363) (51,190)
Interest income 675 289 1,738 618
Gain (loss) on sale of plant and equipment (217) (8) (604) 65
-------------- ------------- -------------- -------------
Income before provision (benefit)
for income taxes and extraordinary item $ 8,663 $ 1,432 $ 26,975 $ 4,670
============== ============== =============== ==============
</TABLE>
No customer accounted for more than 10% of total consolidated revenues in the
fiscal quarter or three fiscal quarters ended September 10, 2000 and September
12, 1999.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The 2000 and 1999 third fiscal quarters referenced herein represent the twelve-
week periods ended September 10, 2000 and September 12, 1999, respectively. The
2000 and 1999 three fiscal quarters referenced herein represent the thirty-six
weeks ended September 10, 2000 and September 12, 1999, respectively.
Results of Operations
---------------------
Revenues
--------
General. Revenues include retail sales of food by corporate-owned stores,
royalties and fees from domestic and international franchise stores, and sales
of food, equipment and supplies by our distribution commissaries to domestic and
international franchise stores.
Total revenues decreased 1.5% to $267.8 million for the fiscal quarter ended
September 10, 2000, from $271.9 million for the comparable period in 1999, and
increased 1.6% to $801.6 million for the three fiscal quarters ended September
10, 2000, from $788.8 million for the comparable period in 1999. The decrease in
total revenues for the fiscal quarter ended September 10, 2000 is due primarily
to decreased corporate store and domestic distribution revenues while the
increase in total revenues for the three fiscal quarters ended September 10,
2000 is due primarily to increased domestic stores and international revenues.
These results are more fully described below.
Domestic Stores
---------------
Corporate Stores. Revenues from corporate store operations decreased 3.2% to
$85.3 million for the fiscal quarter ended September 10, 2000, from $88.1
million for the comparable period in 1999, and increased 2.0% to $263.7 million
for the three fiscal quarters ended September 10, 2000, from $258.4 million for
the comparable period in 1999.
The decrease in revenues for the fiscal quarter ended September 10, 2000 is due
primarily to a decrease in same store sales while the increase in revenues for
the three fiscal quarters ended September 10, 2000 is due primarily to an
increase in the number of corporate stores offset in part by a decrease in same
store sales. Same store sales for corporate stores decreased 3.7% and 0.6% for
the fiscal quarter and three fiscal quarters ended September 10, 2000,
respectively, compared to the same period in 1999. The number of corporate
stores was 657 as of September 10, 2000, as compared to 654 as of September 12,
1999.
Domestic Franchise. Revenues from domestic franchise operations increased 2.2%
to $27.2 million for the fiscal quarter ended September 10, 2000, from $26.6
million for the comparable period in 1999, and increased 3.0% to $82.2 million
for the three fiscal quarters ended September 10, 2000, from $79.8 million for
the comparable period in 1999.
These increases are due primarily to an increase in the number of domestic
franchise stores and changes in same store sales. Same store sales for domestic
franchise stores decreased 2.0% and increased 0.9% for the fiscal quarter and
three fiscal quarters ended September 10, 2000, respectively, compared to the
same period in 1999. The number of domestic franchise stores was 4,089 as of
September 10, 2000, as compared to 3,909 as of September 12, 1999.
Domestic Distribution
---------------------
Revenues from domestic distribution operations decreased 2.2% to $140.8 million
for the fiscal quarter ended September 10, 2000, from $144.0 million for the
comparable period in 1999, and increased 0.3% to $412.6 million for the three
fiscal quarters ended September 10, 2000, from $411.5 million for the comparable
period in 1999.
The decrease in revenues for the fiscal quarter ended September 10, 2000 is due
primarily to decreased domestic franchise same store sales, a market decrease in
cheese prices and an increased demand for lower-priced fresh dough. The
increase in revenues for the three fiscal quarters ended September 10, 2000 is
due primarily to an increase in food volumes related to increased domestic
franchise same store sales and increased store counts, offset in part by a
market decrease in cheese prices and an increased demand for lower-priced fresh
dough.
8
<PAGE>
International
-------------
Revenues from international operations increased 10.2% to $14.6 million for the
fiscal quarter ended September 10, 2000, from $13.2 million for the comparable
period in 1999, and increased 10.5% to $43.1 million for the three fiscal
quarters ended September 10, 2000, from $39.1 million for the comparable period
in 1999.
These increases are due primarily to an increase in the number of international
franchise stores and an increase in same store sales. On a constant dollar
basis, same store sales increased by 3.7% and 3.5% for the fiscal quarter and
three fiscal quarters ended September 10, 2000, respectively, compared to the
same period in 1999. The number of international stores was 2,069 as of
September 10, 2000, as compared to 1,821 as of September 12, 1999.
Operating Expenses
------------------
Cost of sales decreased 0.2% to $200.5 million for the fiscal quarter ended
September 10, 2000, from $201.0 million for the comparable period in 1999, and
increased 1.7% to $591.7 million for the three fiscal quarters ended September
10, 2000, from $581.6 million for the comparable period in 1999. Gross profit
decreased 5.1% to $67.3 million for the fiscal quarter ended September 10, 2000,
from $70.9 million for the comparable period in 1999, and increased 1.3% to
$209.9 million for the three fiscal quarters ended September 10, 2000, from
$207.2 million for the comparable period in 1999.
The decrease in gross profit for the fiscal quarter ended September 10, 2000 is
due primarily to a decrease in total revenues and an increase in corporate store
labor expense. This decrease was partially offset by lower food costs due to an
increased demand for fresh dough, which costs less to produce than our thin
crust and deep dish products. The increase in gross profit for the three fiscal
quarters ended September 10, 2000 is due primarily to an increase in total
revenues and lower food costs due to an increased demand for fresh dough. This
increase was partially offset by increases in corporate store labor and delivery
expenses.
General and administrative expenses decreased 17.8% to $41.7 million for the
fiscal quarter ended September 10, 2000, from $50.8 million for the comparable
period in 1999, and decreased 10.8% to $132.3 million for the three fiscal
quarters ended September 10, 2000, from $148.4 million for the comparable period
in 1999. As a percentage of total revenues, general and administrative expenses
decreased 3.1% to 15.6% for the fiscal quarter ended September 10, 2000 and
decreased 2.3% to 16.5% for the three fiscal quarters ended September 10, 2000,
compared to the same periods in 1999.
These decreases in general and administrative expense as a percentage of total
revenues are due primarily to a decrease in covenants not-to-compete
amortization expense and, to a lesser extent, savings realized from our
corporate restructuring in late 1999 . Covenants not-to-compete amortization
expense decreased 66.4% to $2.6 million for the fiscal quarter ended September
10, 2000, from $7.8 million for the comparable period in 1999, and decreased
66.7% to $7.9 million for the three fiscal quarters ended September 10, 2000,
from $23.6 million for the comparable period in 1999, due to the use of an
accelerated amortization method.
Provision (Benefit) for Income Taxes
------------------------------------
Provision (benefit) for income taxes increased $3.0 million to $3.7 million for
the fiscal quarter ended September 10, 2000, from $0.7 million for the
comparable period in 1999, and increased $12.3 million to $11.6 million for the
three fiscal quarters ended September 10, 2000, from a benefit of $0.7 million
for the comparable period in 1999. These increases are due primarily to a non-
recurring reversal of state tax reserves of $2.9 million, net of federal tax, in
the fiscal quarter ended June 20, 1999 and increases in taxable income in 2000
compared to the same periods in 1999.
Liquidity and Capital Resources
-------------------------------
We had negative working capital of $5.5 million and cash of $26.7 million at
September 10, 2000. Historically, we have operated with minimal positive working
capital or negative working capital primarily because our receivable collection
periods and inventory turn rates are faster than the normal payment terms on our
current liabilities. In addition, our sales are not typically seasonal, which
further limits our working capital requirements. Our primary sources of
liquidity are cash flows from operations and availability of borrowings under
our revolving credit facility. We expect to fund planned capital expenditures
and debt commitments from these sources.
9
<PAGE>
As of September 10, 2000, we had $697.1 million of long-term debt, of which
$15.9 million was classified as a current liability, there were no borrowings
under our $100 million revolving credit facility and letters of credit issued
under that facility were $14.2 million. The borrowings under the revolving
credit facility are available to fund our working capital requirements, capital
expenditures and other general corporate purposes.
Cash provided by operating activities was $40.6 million and $33.2 million for
the three fiscal quarters ended September 10, 2000 and September 12, 1999,
respectively. The $7.4 million increase is due primarily to a $7.2 million net
change in operating assets and liabilities, an increase in net income of $9.9
million, and a $2.7 million decrease in deferred income taxes, offset in part by
a $13.5 million decrease in depreciation and amortization.
Cash used in investing activities was $23.3 million and $17.6 million for the
three fiscal quarters ended September 10, 2000 and September 12, 1999,
respectively. The $5.7 million increase is due primarily to a $5.7 million
increase in purchases of property, plant and equipment and franchise stores and
commissaries, including $4.8 million relating to the purchase of 15 franchise
stores, and a $2.6 million decrease in cash provided by notes receivable
repayments. These increases were partially offset by a $2.9 million increase in
cash provided by proceeds from sales of property, plant and equipment, including
$3.1 million relating to the sale of 8 corporate stores.
Cash used in financing activities was $20.8 million and $2.5 million for the
three fiscal quarters ended September 10, 2000 and September 12, 1999,
respectively. The $18.3 million increase is due primarily to additional
principal payments required under our term loan agreements as a result of excess
cash on hand, as defined, and a $5.0 million extinguishment of senior
subordinated notes during the fiscal quarter ended September 10, 2000.
Based upon the current level of operations and anticipated growth, we believe
that the cash generated from operations and amounts available under the
revolving credit facility will be adequate to meet our anticipated debt service
requirements, capital expenditures and working capital needs for the next
several years. There can be no assurance, however, that our business will
generate sufficient cash flow from operations or that future borrowings will be
available under the senior credit facilities or otherwise to enable us to
service our indebtedness, including the senior credit facilities and the Senior
Subordinated Notes, to redeem or refinance TISM's, our Parent company,
Cumulative Preferred Stock when required or to make anticipated capital
expenditures. Our future operating performance and our ability to service or
refinance the Senior Subordinated Notes and to service, extend or refinance the
senior credit facilities will be subject to future economic conditions and to
financial, business and other factors, many of which are beyond our control.
Forward-Looking Statements
Certain statements contained in this filing relating to capital spending levels
and the adequacy of our capital resources are forward-looking. Also statements
that contain words such as "believes," "expects," "anticipates," "intends,"
"estimates" or similar expressions are forward-looking statements. Forward-
looking statements involve risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by such forward-
looking statements. Among these risks and uncertainties are competitive factors,
increases in our operating costs, ability to retain our key personnel, our
substantial leverage, ability to implement our growth and cost-saving
strategies, industry trends and general economic conditions, adequacy of
insurance coverage and other factors, all of which are described in the 10-K for
the year ended January 2, 2000 and our other filings with the Securities and
Exchange Commission. We do not undertake to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
10
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market Risk
-----------
The Company is exposed to market risks primarily from interest rate changes on
our variable rate debt and foreign currency fluctuations relating to
international revenues. Management actively monitors these exposures. As a
policy, the Company does not engage in speculative transactions nor does it hold
or issue financial instruments for trading purposes.
Interest Rate Swaps
-------------------
The Company may enter into interest rate swaps or similar instruments with the
objective of reducing our volatility in borrowing costs. In 1999, we entered
into two interest rate swap agreements to effectively convert the Eurodollar
interest rate component on a portion of our variable rate debt to a fixed rate
of 5.12% through December 2001. As of September 10, 2000, the total notional
amount of these swap agreements was $176.0 million.
Interest Rate Risk
------------------
The Company's variable interest expense is sensitive to changes in the general
level of interest rates. As of September 10, 2000, a portion of the Company's
debt is borrowed at Eurodollar rates plus a blended margin rate of approximately
3.3%. At September 10, 2000, the weighted average interest rate on our $250.9
million of variable interest debt was approximately 10.1% and the fair value of
the debt approximates its carrying value.
The Company had total interest expense of approximately $52.4 million for the
three fiscal quarters ended September 10, 2000. The estimated increase in
interest expense from a hypothetical 200 basis point adverse change in
applicable variable interest rates would be approximately $3.6 million.
Foreign Currency Forward Contracts
----------------------------------
The Company may enter into forward exchange contracts or similar instruments
with the objective of reducing fluctuations in cash flows associated with
changes in the related foreign currency rates. As of September 10, 2000, we had
no outstanding forward exchange contracts. No significant gains or losses
relating to forward exchange contracts have been recognized during fiscal 2000.
11
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use Of Proceeds
None.
Item 3. Defaults Under Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit
Number Description
------ -----------
10.1 Employment agreement dated as of July 10, 2000 between Domino's
Pizza LLC and Patricia A. Wilmot
10.2 Supplemental Indenture dated as of June 7, 2000
27 Financial Data Schedule which is submitted electronically to the
Securities and Exchange Commission for information only and not
deemed to be filed with the Commission.
b. Current Reports on Form 8-K
There were no reports filed on Form 8-K during the quarter ended September
10, 2000.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DOMINO'S, INC.
(Registrant)
Date: October 24, 2000 /s/ Harry J. Silverman
--------------------------------
Chief Financial Officer
13
