DOMINO'S PIZZA

Domino's Pizza

Domino's Pizza

Overview

As of 1997 Domino's Pizza, Inc. was the largest pizza delivery company in the world and the world's second largest pizza chain, behind Tricon Restaurant Group's Pizza Hut. Domino's had 4,431 pizza delivery stores in the United States and more than 1,521 units in 59 foreign countries by the end of 1997. Its 1997 sales were $3.16 billion, earning Domino's a place as the two-hundredth largest private company on the Forbes Private 500 list. Domino's sells a variety of pizza products, including deep-dish, pan, and thin-crust pizzas, as well as specialty items such as flavored-crust pizzas.

In 1997 Domino's sold over 325 million pizzas, with pepperoni being the most popular topping. The chain used over 27 million pounds of pepperoni that year, as well as over 174 million pounds of part-skim mozzarella cheese and over 3 million pounds of pizza sauce, among other ingredients.

Company Finances

Following several difficult years, Domino's annual sales have risen steadily since 1993: $2.2 billion in 1993; $2.5 billion in 1994; $2.6 billion in 1995; and $2.8 billion in 1996. In 1996 the firm saw a 2-percent increase in sales at stores open more than one year. By the end of 1997 Domino's had achieved record sales of almost $3.2 billion, a 14.3-percent increase over 1996. (Because Domino's is a privately held company, it does not issue stock to the public.)

In the mid-1990s Domino's began to experience some financial difficulty, and in 1993 the company reported a 4.3-percent decline in total sales to $2.2 billion and a 1.2-percent decrease in the number of operating units. According to John McLaughlin, writing in Restaurant Business, Domino's experienced sharp losses in the mid-1990s due to Monaghan's "previous financial excesses," but added that more prudent financial management helped the company regain profitability.

Domino's began to restructure its product and marketing operations, adding new products and changing some of its long-time practices. In 1994 Domino's eliminated its 30-minute delivery guarantee after a jury in St. Louis, Missouri, awarded $78 million to a woman who was injured in a collision with a Domino's delivery van. Other accidents involving Domino's delivery vehicles had led to fatalities. Critics charged that the company's guarantee caused safety problems, and while Domino's denied the charges, the negative publicity prompted the company to abandon its policy.

While Domino's distribution division was a key part of its strategy, some franchisees challenged its business practices in a 1995 anti-trust lawsuit, charging that the company was allegedly overcharging for supplies, including raw pizza dough. The 11 franchisees who filed the suit said they were prevented from contracting with outside raw dough suppliers. The lawsuit claimed that Domino's was charging franchisees five times the market price for pizza dough, and also claimed that Domino's practices added between $3,000 and $10,000 in costs annually to each franchise's costs. Domino's denied the charges in the suit.

Financial Highlights (In AUD as of 06/28/2009)

Total Revenue

239,015,000

EBITDA

28,153,000

Operating Income

20,184,000

Net Income

15,353,000

Total Assets

149,260,000

Current Assets

47,255,000

Total Liabilities

54,355,000

Current Liabilities

30,489,000

Long Term Debt

20,977,000

Stockholders' Equity

94,905,000

Financial Summary (In AUD as of 06/28/2009)

Total Revenue

239,015,000

EBITDA

28,153,000

Operating Income

20,184,000

Net Income

15,353,000

Total Assets

149,260,000

Current Assets

47,255,000

Total Liabilities

54,355,000

Current ...