First quarter 2001 highlights include:
* Diluted earnings per share (EPS) rose over 50 percent to $0.27 versus first quarter 2000
* Net income from continuing operations increased 57 percent to $8.0 million versus first quarter 2000
* System-wide sales increased 8.6 percent to $753.4 million versus first quarter 2000
* Operating EBITDA margin increased 170 basis points to 16.7 percent versus first quarter 2000
* Franchise revenues increased 13.1 percent versus first quarter 2000
The first quarters of the 2000 and 2001 fiscal years each consisted of 16 weeks.
Net income from continuing operations increased 57 percent to $8.0 million compared with $5.1 million in the first quarter 2000, well ahead of AFC's long-term growth goal of 25 percent. Diluted earnings per share of $0.27 for the first quarter 2001 increased 50 percent compared with $0.18 for the first quarter 2000.
System-wide sales at AFC's 3,628 restaurants, bakeries and cafes and Seattle Coffee Company's wholesale operations were $753.4 million compared with system-wide sales of $693.6 million during the first quarter of 2000. This 8.6 percent increase was primarily due to new franchise unit growth, domestic system-wide comparable sales growth and wholesale revenue growth.
Company revenue for the first quarter 2001 was $211.4 million compared to $217.9 million for the first quarter of 2000. The revenue decline of 3.0 percent reflects AFC's strategy to selectively sell company-operated units to existing and new franchise partners. This revenue reduction was offset by increases in domestic system-wide comparable sales, franchise royalties, development fees and wholesale revenues.
The 13.1 percent growth in franchise revenues was driven primarily by the addition of 289 franchised units, as well as a domestic franchised comparable sales increase of 2.4 percent.
Operating EBITDA in the first quarter 2001 increased 7.6 percent to $35.2 million versus $32.7 million in the comparable period in 2000. EBITDA margin for the first quarter 2001 increased by 170 basis points to 16.7 percent, up from 15.0 percent for the first quarter 2000. The improved operating EBITDA margin was primarily due to the higher profit flow-through associated with franchise related revenue.
On a comparable store basis, Popeyes Chicken & Biscuits domestic system-wide restaurants recorded a 2.8 percent increase and Church's Chicken domestic system-wide restaurants posted a 0.9 percent increase for the first quarter 2001 from the comparable period in the prior year. Comparable sales at Seattle Coffee Company's domestic system-wide retail cafes, Seattle's Best Coffee and Torrefazione Italia increased 0.8 percent for the first quarter 2001 compared to the first quarter 2000 and wholesale coffee revenues grew by 20.9 percent. Comparable sales at Cinnabon system-wide domestic bakeries increased 6.5 percent for the first quarter 2001 from the first quarter 2000.
International franchised Popeyes and Church's restaurants recorded a comparable sales decrease of 8.7 percent and 3.4 percent, respectively, for the first quarter 2001 compared to the first quarter 2000. International franchised Cinnabon bakeries experienced a comparable sales decrease of 7.7 percent for the first quarter 2001 compared to the first quarter 2000. International franchised Seattle's Best Coffee cafes recorded a comparable sales increase of 5.8 percent during the first quarter 2001 compared to the first quarter 2000.
The AFC system opened 97 restaurants, bakeries and cafes during the first quarter 2001, including 36 international openings. The company's new commitments for development of franchised restaurants around the world increased 12.6 percent to 179 commitments for the first quarter 2001, up from 159 new commitments in the first quarter 2000. Currently, AFC has more than 2,250 outstanding commitments.
"We are pleased that in our first quarter as a public company we were able to achieve substantial growth,'' said Frank Belatti, Chairman and CEO of AFC Enterprises. "Our 57 percent increase in net income from continuing operations and the notable increase in operating EBITDA margins are a direct result of our ongoing franchising and brand building efforts. The record financial results for the first quarter 2001 demonstrate the direct benefits received by our shareholders as we execute our strategic plan.''
Earnings Conference Call and Internet Web Cast. The company will host its first quarter conference call and Internet web cast with the investment community, at 10:00 a.m. EDT, on Monday, May 21. To access the company's web cast, go to www.afce.com, select ``Investor Information'' and then select ``Q1 2001 AFC Enterprises Earnings Conference Call.''
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