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2007 ANNUAL REPORT 1
Cheryl A. Bachelder
Chief Executive Officer, AFC Enterprises, Inc.
President, Popeyes Chicken & Biscuits
In November 2007, I accepted the opportunity
to expand my role from AFC Enterprises Board
Member to President and CEO. It is a true
privilege to lead this Company, a Company
that I believe is a gem just waiting to be
polished and shined. The combination of
the Popeyes menu steeped in the culinary
excellence of Southern Louisiana and the
passionate and experienced employees and
franchise owners who embody this brand is
a powerful one. With 2008 already underway,
franchisees, employees, shareholders and our
guests will begin to experience the benefits of
our disciplined and dynamic operating plan.
The truth be told, 2007 was a tough year.
Our same-store sales momentum of 2006
slowed in 2007, and rising food and labor costs
industry-wide pressured the profitability of our
restaurants. These challenges, coupled with
construction delays in international markets
and the U.S., further pressured new restaurant
development resulting in 124 new openings.
That said, a challenging year also
demonstrated the strength of our franchise
business model. In 2007 we again posted an
impressive EBITDA margin of approximately
30 percent, among the best in our industry.
In 2007, we generated free cash flow of
$28.5 million(1). And we were able to selectively
buy back more than $39.4 million worth of
shares of our common stock throughout
the year, demonstrating our confidence in
the future.
This year, 2008, will be about building on the
strength of our franchise model to deliver more
consistent growth and stronger shareholder
returns. We have assembled a top flight
executive team with more than 70 years of
hands-on experience running restaurant
companies and we have developed a focused
plan to claim what I believe is our rightful
position as the “better” chicken quick service
restaurant—a cut above the rest.
To Our Stakeholders
(1) EBITDA and free cash flow are non-GAAP financial measures. For a reconciliation of EBITDA and free cash flow please
see “Financial Highlights” on page 8 of this Annual Report.