AFC Enterprises Reports Preliminary Fiscal 2013 Operating Results

2014-01-13
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  • AFC Enterprises Global same-store sales increased 0.8% in the fourth quarter, rolling over a 6.2% increase last year. For the full year, global same-store sales increased 3.7%. Two-year global same-store sales growth was 10.6%.

    AFC Enterprises, Inc. (NASDAQ: AFCE), the franchisor and operator of Popeyes® restaurants, today reported selected unaudited results for its fiscal fourth quarter and fiscal year which ended December 29, 2013.

    AFC Enterprises Chief Executive Officer Cheryl Bachelder stated, “We are very pleased with our performance for fiscal 2013. Popeyes’ sustained market share growth and increased restaurant profitability continue to inspire new restaurant openings. The Popeyes system opened more new restaurants in 2013 than in any single year in the last 15 years. The energy and hard work of our franchisees and employees provide the foundation of our 13% to 15% long-term earnings growth plan.”

                 
    FY 2013 Metric     Actual    

    Previous

    Guidance

    Global same-store sales     3.7%     3.5% to 4.0%
    Global new restaurant openings 194 185 to 195
    Global net restaurants     126     100 to 120
     

    Global same-store sales increased 0.8% in the fourth quarter, rolling over a 6.2% increase last year. For the full year, global same-store sales increased 3.7%. Two-year global same-store sales growth was 10.6%.

    During the fourth quarter, the Popeyes’ system opened 49 domestic and 22 international restaurants, bringing full year 2013 openings to 194 restaurants, compared to 141 restaurants last year. Included in 2013 openings were the conversions of 24 restaurants acquired in Minnesota and California in 2012. The Popeyes system permanently closed 68 restaurants in fiscal 2013, resulting in net unit growth of 126 restaurants, compared to 66 net restaurants in 2012.

    The Company expects final general and administrative expenses for fiscal 2013 will be approximately $73.5 million. The Company’s previous guidance was $74 to $75 million at approximately 3.0% of system-wide sales.

    Based on its fourth quarter sales and store opening performance, the Company now expects fiscal 2013 reported earnings per diluted share (“EPS”) will be $1.40 to $1.41. Adjusted earnings per diluted share are expected to be $1.42 to $1.43, compared to $1.24 in fiscal 2012, an increase of approximately 15%. The Company's previous guidance for adjusted EPS was $1.39 to $1.42.

    The Company’s Annual Report on Form 10-K for its fiscal year 2013, which ended December 29, 2013, will be filed on Wednesday, February 26, 2014, after market close. The Company will host a conference call on Thursday, February 27, 2014, at 9:00 a.m. Eastern Time to review results and provide guidance for fiscal 2014.

    Corporate Profile

    AFC Enterprises, Inc. is the franchisor and operator of Popeyes® restaurants, the world's second-largest Quick-Service Restaurant (“QSR”) chicken concept based on number of units. As of December 29, 2013, Popeyes had 2,225 operating restaurants in the United States, 3 territories, and 28 foreign countries. AFC’s primary objective is to deliver sales and profits by offering excellent investment opportunities in its Popeyes brand and providing exceptional franchisee support systems and services to its owners.

           
    12 Weeks Ended   Fiscal Year
    12/29/13     12/30/12   12/29/13     12/30/12
    Same-store sales growth  
    Company-operated restaurants (1.2 %) 7.8 % 2.1 % 5.3 %
    Domestic franchised restaurants 0.3 % 6.4 % 3.6 % 7.5 %
    Total domestic (company-operated and franchised restaurants) 0.3 % 6.4 % 3.6 % 7.5 %
    International franchised restaurants 4.2 % 4.3 % 4.7 % 2.6 %
    Total global system 0.8 % 6.2 % 3.7 % 6.9 %
     
    Company-operated restaurants (all domestic)
    Restaurants at beginning of period 49 40 45 40
    New restaurant openings 4 5 9 5
    Permanent closings - - (1 ) -
    Temporary (closings)/re-openings, net -   -   -   -  
    Restaurants at end of period 53 45 53 45
     
    Franchised restaurants (domestic)
    Restaurants at beginning of period 1,696 1,606 1,634 1,587
    New restaurant openings 45 37 115 79
    Less: Permanent closings (14 ) (6 ) (27 ) (29 )
    Temporary (closings)/re-openings, net (11 ) (3 ) (6 ) (3 )
    Restaurants at end of period 1,716 1,634 1,716 1,634
     
    Franchised restaurants (international)
    Restaurants at beginning of period 442 414 425 408
    New restaurant openings 22 20 70 57
    Less: Permanent closings (8 ) (13 ) (40 ) (46 )
    Temporary (closings)/re-openings, net -   4   1   6  
    Restaurants at end of period 456 425 456 425
     
    Total restaurant count at end of period 2,225   2,104   2,225   2,104  
     

    Management’s Use of Non-GAAP Financial Measures

    Adjusted Earnings per Diluted Share: Calculation and Definition

    The Company defines adjusted earnings for fiscal 2012 as the Company’s reported net income after adjusting for certain non-operating items consisting of the following: (i) other expenses (income) net of $0.9 million in gains on sale of real estate assets to franchisees, partially offset by $0.3 million loss on disposals of property and equipment and $0.1 million of hurricane-related expenses, net; (ii) $0.5 million in legal fees related to licensing arrangements; and (iii) the tax effect of these adjustments.

    Adjusted earnings per diluted share provides the per share effect of adjusted net income on a diluted basis. The following table reconciles on a historical basis for fiscal 2012, the Company’s adjusted earnings per diluted share on a consolidated basis to the line on its Consolidated Statement of Operations entitled Net income, which the Company believes is the most directly comparable GAAP measure on its Consolidated Statement of Operations:

             
    (in millions, except per share data)      

    Fiscal

    2012

    Net income       $ 30.4
    Other expense (income), net (0.5)
    Legal fees related to licensing arrangements 0.5
    Tax effect       -
    Adjusted earnings       $ 30.4
    Adjusted earnings per diluted share       $ 1.24
    Weighted average diluted shares outstanding       24.5
     



    Logos, product and company names mentioned are the property of their respective owners.

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