Industry News | May 28, 2009

Popeye's Reports Turn Around in Q1

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AFC Enterprises, Inc. (Nasdaq: AFCE - News), the franchisor and operator of Popeyes, reported results for its first fiscal quarter of 2009 which ended April 19, 2009. The company also updated earnings guidance for fiscal 2009 and provided an update on its strategic plan.

First Quarter 2009 Highlights compared to First Quarter 2008:

* Net income was above street expectations at $5.0 million, or $0.20 per diluted share, compared to $6.4 million, or $0.24 per diluted share, last year. Excluding the impact from other non-operating expenses or income, net income would have been $5.2 million, or $0.21 per diluted share, compared to $5.6 million, or $0.21 per diluted share last year.

* System-wide sales increased by 1.1 percent compared to an increase of 1.5 percent last year.

* Global same-store sales increased 0.2 percent compared to a decrease of 1.3 percent last year. Domestic same-store sales decreased 0.3 percent compared to a decrease of 1.8 percent last year. International same-store sales increased 4.8 percent compared to an increase of 3.5 percent last year.

* The company opened 14 restaurants and closed 31 restaurants, resulting in net closings of 17 restaurants. At the end of the first quarter of 2009, total unit count was 1,909 compared to 1,889 last year.

* The company generated free cash flow of $7.1 million and repaid $3.9 million on its 2005 Credit Facility. AFC's free cash flow computation and reconciliation to GAAP measures are described in detail under the heading "Use of Non-GAAP Financial Measures."

AFC Enterprises CEO Cheryl Bachelder says, "Our first quarter performance was good. Global same-store sales for the quarter were positive for the first time since the second quarter of 2006, and according to independent data, our quarterly domestic same-store sales significantly outpaced the chicken QSR category. This trend improvement is the result of promoting our famous and favorite bone-in chicken and seafood with more compelling price points and an advertising campaign that is resonating with our core consumers. The guest response is very encouraging given the intensely competitive QSR marketplace."