AFC Enterprises Reports Preliminary Fiscal 2012 Operating Results; Expected to Beat Prior Fiscal 2012 Earnings Guidance

  AFC Enterprises Reports Preliminary Fiscal 2012 Operating Results; Expected
  to Beat Prior Fiscal 2012 Earnings Guidance

Business Wire

ATLANTA -- January 23, 2013

AFC Enterprises, Inc., the franchisor and operator of Popeyes® restaurants,
today reported selected unaudited results for its fiscal fourth quarter and
fiscal year which ended December 30, 2012.

Global same-store sales increased 6.0% in the fourth quarter, on top of a 5.8%
increase last year. For the full year, global same store sales increased 6.8%
compared to a 3.1% increase in 2011, exceeding the Company’s previous guidance
of positive 6% to 6.5%.

During the fourth quarter, the Popeyes system opened 42 domestic and 20
international restaurants, bringing full year 2012 openings to 141
restaurants, compared to 140 restaurants last year. Openings were in line with
the Company’s previous guidance of 140 to 150 new restaurants. The Popeyes
system permanently closed 75 restaurants in fiscal 2012, resulting in net unit
growth of 66 restaurants, compared to 65 net restaurants in 2011. The 2012 net
unit growth was in the range of the Company’s previous guidance of 65-85 net
restaurants.

The Company expects final general and administrative expenses for fiscal 2012
will be approximately $67.6 million. At approximately 3.0% of system-wide
sales, the Company’s general and administrative expenses remain among the most
efficient in the restaurant industry. The Company’s previous guidance was $67
to 68 million at approximately 3.0% of system-wide sales.

Based on its fourth quarter sales and store opening performance, the Company
now expects fiscal 2012 reported earnings per diluted share (“EPS”) will be
$1.23-$1.24, compared to $0.97 in fiscal 2011, an increase of 27%. Adjusted
EPS for fiscal 2012, which included approximately $0.01 for the 53rd week of
operations, is now expected to be $1.23-$1.24, compared to adjusted EPS of
$0.99 last year. This is an increase from the Company's previous 2012 adjusted
EPS guidance of $1.19-$1.21. Adjusted EPS is a supplemental non-GAAP measure
of performance. See Adjusted EPS calculations under the heading entitled
"Management's Use of Non-GAAP Financial Measures."

AFC Enterprises Chief Executive Officer Cheryl Bachelder stated “We had a
great finish to an excellent year. The results are the product of each team
member’s execution of Popeyes’ strategic plan. We view 2012 results as a step
toward our bold goals of doubling the size of Popeyes’ domestic system and
emerging as a successful international QSR brand.”

Management will provide fiscal 2013 guidance concurrent with the filing of the
Company’s 2012 Annual Report on Form 10-K, which is due to be filed no later
than March 15, 2013.

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 30, 2012, Popeyes had 2,104 operating
restaurants in the United States, 3 territories, and 26 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. AFC Enterprises can be
found at www.afce.com.

                              12 Weeks ended          Fiscal Year
                               12/30/12   12/25/11    12/30/12   12/25/11
Same-store sales growth
Company-operated restaurants   7.8    %     (1.5  %)     5.3   %      1.1    %
Domestic franchised            6.3    %     6.2   %      7.5   %      3.1    %
restaurants
Total domestic
(company-operated and          6.4    %     5.9   %      7.5   %      3.0    %
franchised restaurants)
International franchised       3.5    %     4.6   %      2.4   %      3.3    %
restaurants
Total global system            6.0    %     5.8   %      6.8   %      3.1    %
                                                                      
Company-operated restaurants
(all domestic)
Restaurants at beginning of    40           38           40           38
period
New restaurant openings        5            2            5            2
Permanent closings             -            -            -            -
Temporary                      -           -           -           -      
(closings)/re-openings, net
Restaurants at end of period   45           40           45           40
                                                                      
Franchised restaurants
(domestic)
Restaurants at beginning of    1,606        1,560        1,587        1,542
period
New restaurant openings        37           30           79           71
Less: Permanent closings       (6     )     (2    )      (29   )      (27    )
Temporary                      (3     )     (1    )      (3    )      1      
(closings)/re-openings, net
Restaurants at end of period   1,634        1,587        1,634        1,587
                                                                      
Franchised restaurants
(international)
Restaurants at beginning of    414          400          408          397
period
New restaurant openings        20           20           57           67
Less: Permanent closings       (13    )     (9    )      (46   )      (48    )
Temporary                      4           (3    )      6           (8     )
(closings)/re-openings, net
Restaurants at end of period   425          408          425          408
                                                                      
Total restaurant count at      2,104       2,035       2,104       2,035  
end of period*
                                                                             

* Restaurant count in 2012 includes 3 net restaurants that were temporarily
closed in prior periods but were reopened by year end.

Management’s Use of Non-GAAP Financial Measures

Adjusted Earnings per Diluted Share: Calculation and Definition

The Company calculates fiscal 2012 full year Adjusted Earnings per Diluted
Share by excluding (i) $0.5 million in other income, net, and (ii) $0.5
million in legal fees related to licensing arrangements.

The Company defines Adjusted Earnings for fiscal 2011 as the Company's
reported net income after adjusting for certain non-operating items consisting
of: (i) $0.8 million in expenses for the Global Service Center relocation, and
$0.5 million in impairments and disposals of fixed assets offset by a $0.8 net
gain on the sale of assets; (ii) accelerated depreciation of $0.5 million
related to the Company’s relocation to a new Global Service Center; and (iii)
the tax effect of such adjustments. Adjusted Earnings per Diluted Share
provides the per share effect of Adjusted Earnings on a diluted basis. The
following table reconciles on a historical basis for fiscal year 2011, the
Company’s Adjusted Earnings per Diluted Share on a consolidated basis to the
line on its Condensed Consolidated Statement of Operations entitled “Net
income”, which the Company believes is the most directly comparable GAAP
measure on its Condensed Consolidated Statement of Operations to Adjusted
Earnings per Diluted Share:

(in millions, except per share data)                             Fiscal 2011
Net income                                                       $  24.2
Other expense (income), net                                           0.5
Accelerated depreciation related to the Company’s relocation          0.5
to a new Global Service Center
Tax effect                                                         (0.5  )
Adjusted earnings                                                $  24.7  
Adjusted earnings per diluted share                              $  0.99  
Weighted average diluted shares outstanding                        25.0  
                                                                            

Forward-Looking Statement: Certain statements in this release contain
“forward-looking statements” within the meaning of the federal securities
laws. Statements regarding future events and developments and our future
performance, as well as management’s current expectations, beliefs, plans,
estimates or projections relating to the future, are forward-looking
statements within the meaning of these laws. These forward-looking statements
are subject to a number of risks and uncertainties. Examples of such
statements in this press release include discussions regarding the Company’s
planned implementation of its strategic plan, including domestic and
international growth, and the Company’s anticipated 2012 and long-term
performance including projections regarding general and administrative
expenses, EPS and adjusted EPS and similar statements of belief or expectation
regarding future events. Among the important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements are: competition from other restaurant concepts and food retailers,
continued disruptions in the financial markets, the loss of franchisees and
other business partners, labor shortages or increased labor costs, increased
costs of our principal food products, changes in consumer preferences and
demographic trends, as well as concerns about health or food quality,
instances of avian flu or other food-borne illnesses, general economic
conditions, the loss of senior management and the inability to attract and
retain additional qualified management personnel, limitations on our business
under our credit facility, our ability to comply with the repayment
requirements, covenants, tests and restrictions contained in our credit
facility, failure of our franchisees, a decline in the number of franchised
restaurants, a decline in our ability to franchise new restaurants, slowed
expansion into new markets, unexpected and adverse fluctuations in quarterly
results, increased government regulation, effects of volatile gasoline prices,
supply and delivery shortages or interruptions, currency, economic and
political factors that affect our international operations, inadequate
protection of our intellectual property and liabilities for environmental
contamination and the other risk factors detailed in our 2011 Annual Report on
Form 10-K and other documents we file with the Securities and Exchange
Commission. Therefore, you should not place undue reliance on any
forward-looking statements.

Contact:

AFC Enterprises, Inc.
Investor inquiries:
Rebecca Gardy, 404-459-4673
Director, Finance & Investor Relations
investor.relations@afce.com
or
Media inquiries:
Alicia Thompson, 404-459-4572
Vice President, Popeyes Communications & Public Relations
popeyescommunications@popeyes.com
 
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