Popeye's 2008 Annual Report Download - page 10

8 AFC ENTERPRISES, INC.
Cautionary Note Regarding Forward-Looking Statements
(1) Additional information concerning financial performance can be found in AFC’s Consolidated Financial Statements, Selected Financial Data and Management’s Discussion & Analysis of Financial
Condition and Results of Operations in the 2008 Annual Report on Form 10-K, including, without limitation, information in Item 6 of the financial statements related to total revenues.
(2) Discontinued operations provided after-tax income of $0.2 million in 2006.
(3) Weighted average common shares for the computation of diluted earnings per common share were 25.7 million, 28.8 million and 29.8 million for 2008, 2007 and 2006, respectively.
Financial Highlights & Key Operational Metrics(1)
(Dollars in millions, except per common share data) 2008 2007 2006
Franchise revenues $ 84.6 $ 82.8 $ 82.6
Total revenues(1) $ 166.8 $ 167.3 $ 153.0
Net income(2) $ 19.4 $ 23.1 $ 22.4
Earnings per common share, diluted(3) $ 0.76 $ 0.80 $ 0.75
EBITDA(4,6) $ 46.6 $ 52.5 $ 51.9
EBITDA margin(4,6) 27.9% 31.4% 33.9%
Free cash flow(5,6) $ 26.2 $ 28.5 $ 29.4
Global system-wide sales growth(7) 0.6% 0.3% 7.0%
Domestic system-wide same-store sales growth (2.2)% (2.3)% 1.6%
Global system-wide same-store sales growth (1.7)% (2.0)% 1.1%
New restaurant openings 140 124 142
Total restaurants 1,922 1,905 1,878
(Dollars in millions) 2008 2007 2006
Net income $ 19.4 $ 23.1 $ 22.4
Interest expense, net $ 8.1 $ 8.7 $ 11.1
Income tax expense $ 12.8 $ 13.8 $ 12.0
Depreciation and amortization $ 6.3 $ 6.9 $ 6.4
EBITDA $ 46.6 $ 52.5 $ 51.9
Total revenues $ 166.8 $ 167.3 $ 153.0
EBITDA margin 27.9% 31.4% 33.9%
(Dollars in millions) 2008 2007 2006
Net income $ 19.4 $ 23.1 $ 22.4
Depreciation and amortization $ 6.3 $ 6.9 $ 6.4
Stock-based compensation expense $ 2.5 $ 1.7 $ 3.4
Maintenance capital expenses $ (2.0) $ (3.2) $ (2.8)
Free cash flow $ 26.2 $ 28.5 $ 29.4
(5) The following table reconciles on a historical basis for
2008, 2007 and 2006, the Company’s free cash flow on a
consolidated basis to the line on our consolidated statements
of operations entitled net income, which we believe is the
most directly comparable GAAP measure on our consolidated
statements of operations to free cash flow:
(4) EBITDA margin is an expression of EBITDA as a percentage of
total revenues. The following table reconciles on a historical
basis for 2008, 2007 and 2006, the Company’s earnings
before interest expense, taxes, depreciation and amortization
(“EBITDA”) on a consolidated basis to the line on our consoli-
dated statements of operations entitled net income, which we
believe is the most directly comparable GAAP measure on our
consolidated statements of operations to EBITDA and provides
the calculation of EBITDA margin:
Forward-Looking Statements: Certain statements in this Annual Report 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 Annual Report
include discussions regarding the Company’s planned implementation of its new strategic
plan, projections and expectations regarding same-store sales for fiscal 2009 and beyond,
the Company’s ability to improve restaurant-level margins, guidance for new openings and
restaurant closures, and the Company’s anticipated 2009 performances including projec-
tions regarding general and administrative expenses, net earnings per diluted share, EBITDA
margins and free cash flows 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, 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, gen-
eral economic conditions, the loss of senior management and the inability to attract and retain
additional qualified management personnel, limitations on our business under our 2005 Credit
Facility, our ability to comply with the repayment requirements, covenants, tests and restrictions
contained in the 2005 Credit Facility, our ability to refinance our outstanding indebtedness,
failure of our franchisees, a decline in the number of franchised units, a decline in our ability to
franchise new units, slowed expansion into new markets, unexpected and adverse fluctuations
in quarterly results, increased government regulation, adverse effects of regulatory actions
arising in connection with the restatement of our previously issued financial statements,
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 2008 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.
Design: Eisenman Associates. Photography: Dan Dry, Rafal Krolik courtesy of FRANCHISE TIMES, Tadd Myers, Grover Sterling. Printing: Earth–Thebault, Bowne.