Industry News | November 12, 2002

AFC Enterprises Reports 34% Earnings Increase for Third Quarter

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AFC Enterprises, Inc. (Nasdaq: AFCE), today announced financial results for the third quarter ended October 6, 2002.

Third quarter of 2002 versus third quarter of 2001 highlights include:

  • Diluted earnings per share from continuing operations increased 34.5% to $0.39 excluding adjustments, and increased 17.2% to $0.34 after adjustments
  • Net income from continuing operations increased 33.8% to $12.2 million excluding adjustments, and increased 17.3% to $10.7 million after adjustments
  • Net income margin from continuing operations gained 320 basis points to 9.0% excluding adjustments, and increased 210 basis points to 7.9% after adjustments
  • Net income increased 44.1%, to $12.1 million excluding adjustments, and increased 26.3% to $10.6 million after adjustments
  • Operating EBITDA margin rose 240 basis points to 21.0% excluding adjustments, and increased 80 basis points to 19.4% after adjustments
  • Adjustments of $1.5 million after tax were recorded at AFC's Seattle Coffee Company subsidiary in the third quarter of 2002, including an inventory write-down of $1.3 million and a $0.2 million impairment of leasehold improvements on its old headquarters facility

    Other Highlights

  • System-wide sales increased 2.1% to $619.6 million
  • Franchise revenues were up 6.3% to $26.5 million
  • Wholesale revenues increased 3.3% to $14.6 million
  • Total system-wide domestic comparable store sales were down 2.7%
  • AFC and its franchisees opened 104 new restaurants, bakeries and cafes
  • Completed the repurchase of 2.3 million shares of common stock under the initial $50 million share repurchase program
  • Increased share repurchase authorization by an additional $50 million

    Excluding adjustments recorded in the third quarter 2002, AFC is currently estimating full year 2002 earnings per share from continuing operations of $1.66, a 37% increase versus 2001. Including adjustments, AFC expects earnings per share from continuing operations for 2002 of $1.61, a 32% increase versus 2001.

    AFC Enterprises, Inc. is the franchisor and operator of 3,970 restaurants, bakeries and cafes in the United States, Puerto Rico and 30 foreign countries under the brand names Church's Chicken(TM), Popeyes(R) Chicken & Biscuits, Cinnabon(R), Seattle's Best Coffee(R) and Torrefazione Italia(R) Coffee.