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

Wed Jan 23, 2013 5:15pm EST

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


* 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 to a new Global Service Center            0.5         
 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.

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

Copyright Business Wire 2013

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