AFC Enterprises (Nasdaq: AFCE – News), the franchisor and operator of Popeyes, today reported results for its fiscal year 2008 which ended December 28, 2008. The company also provided guidance for fiscal 2009 and provided a business update on its strategic plan.
Fiscal 2008 Highlights:
* Net income was $19.4 million, or $0.76 per diluted share, compared to $23.1 million, or $0.80 per diluted share, in fiscal 2007. Fiscal 2008 diluted earnings per share were consistent with the company’s previous guidance of $0.75-$0.77. Excluding other non-operating income, net income would have been $16.8 million or $0.65 per diluted share, compared to $21.4 million or $0.74 per diluted share last year.
* Total system-wide sales increased by 0.6 percent compared to an increase of 0.3 percent in fiscal 2007.
* Total global same-store sales decreased 1.7 percent compared to a decrease of 2.0 percent last year. Total domestic same-store sales decreased 2.2 percent compared to a decrease of 2.3 percent in fiscal 2007. International same-store sales increased 4.1 percent compared to an increase of 1.1 percent in fiscal 2007.
* The Popeyes system opened 140 restaurants and closed 120 restaurants, resulting in net openings of 20 restaurants, exceeding the company’s previous guidance of 5-15 units. At the end of 2008, total unit count was 1,922 compared to 1,905 at the end of 2007.
* The company repurchased 2.1 million shares of common stock for approximately $19.0 million and made $13.4 million in net debt repayments under its 2005 Credit Facility.
* The company’s free cash flow remains strong at $26.2 million, compared to $28.5 million last year. 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 states, “In 2008 we built a sound foundation for our strategic plan. While our domestic same-store sales fell short of our goals, we outpaced the chicken quick-serve category for the third consecutive quarter according to independent data. Our international restaurants enjoyed a good year in both same-store sales and unit growth. In total, we met our earnings expectations at $0.76 per diluted share and we exceeded our opening guidance with 140 new restaurants globally.”
“Going forward, we will continue to execute our strategic plan with an emphasis on compelling value, improving the guest experience, and strengthening restaurant profitability. In the current environment, we believe that our superior food matched with greater quick-service value and service will be the recipe for our success.”