We have made substantial progress in the past two years in building a stronger foundation for our company and improving our business model.
Our survival is no longer in question. Our net debt of slightly over $23 million (down from $52 million two years ago) is manageable, and we are continuing to look for ways to further strengthen our balance sheet. Our cash flow is healthy, and we have budgeted in excess of $13 million in fiscal 2011 for capital expenditures, much of which will be devoted to store renovation and construction of new stores.
We generated positive company same store sales in all four quarters of fiscal 2010 and, despite the difficult economy, we delivered substantially higher operating income. We essentially broke even in fiscal 2010, compared to a net loss of $67.1 million in fiscal 2008 and $4.1 million in fiscal 2009.
We ended fiscal 2010 with 582 Krispy Kreme stores across the U.S. and 18 other countries, up from 449 stores 2 years ago.

By shifting to the small shop focus and increasing the number of Krispy Kreme retail shops in high traffic areas, we are making ourselves more convenient for our customers, which should enable us to increase on-premises sales of doughnuts and complementary products. We also are trial testing new products to create broader appeal, addressing both seasonal and day part issues. In our off-premises grocery and convenience store channels, we are re-energizing the business by introducing and marketing new longer shelf-life products and rationalizing delivery routes.

We currently have commitments for almost 200 new franchise stores, a pipeline we intend to build upon