Popeye's 2013 Annual Report Download - page 43

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Based primarily upon our generation of cash flows from operations, coupled with its existing cash reserves of
$9.6 million and $61.1 million available borrowings under its 2013 Credit Facility as of December 29, 2013, the
Company believes that it will have adequate cash flow (primarily from operating cash flows) to meet its anticipated
future requirements for working capital, various contractual obligations and expected capital expenditures for 2014.
Our franchise model provides strong, diverse and reliable cash flows. Net cash provided by operating activities of
the Company was $44.8 million and $40.2 million for 2013 and 2012, respectively. The increase in cash provided by
operating activities was primarily attributable higher segment operating profit in franchise operations and company-
operated restaurants. See our Company’sConsolidated Statements of Cash Flows in our Consolidated Financial
Statements included in this Form 10-K.
Our cash flows and available borrowings allow us to pursue our growth strategies. Our priorities in the use of
available cash are:
•reinvestment in core business activities that promote the Company’s strategic initiatives,
•repurchase of shares of our common stock, and
•reduction of long-term debt.
Our investment in core business activities includes our obligation to maintain and re-image our company-operated
restaurants, construct company-operated restaurants and provide operations support to our franchise system.
Substantially all of our capital expenditures have been financed using cash provided from operating activities and
borrowings under our bank credit facilities.
Our capital expenditures consist primarily of re-imaging activities associated with company-operated restaurants,
new restaurant construction, equipment replacements, investments in information technology and other property and
equipment. Capital expenditures related to re-imaging activities consist of significant renovations, upgrades and
improvements, which on a per restaurant basis typically cost between $70,000 and $190,000. Capital expenditures
associated with new freestanding restaurant construction typically cost, on a per restaurant basis, between $0.7 million
and $1.1 million.
The table below summarizes our capital expenditures for fiscal years 2013, 2012 and 2011:
(dollars in millions) 2013 2012 2011
Construction of new company-operated restaurants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15.3 $7.2 $1.5
Acquisition and conversion of restaurants in California and Minnesota . . . . . . . . . . . . . . . . 13.8 16.9 —
Reimaging activities at company-operated restaurants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 0.6 1.5
Information technology hardware and software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 1.1 0.2
Point of sale hardware and software at company-operated restaurants . . . . . . . . . . . . . . . . . — — 0.6
Construction of the new corporate office(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 3.3
Other capital assets(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 1.5 0.5
Total capital expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $33.3 $27.3 $7.6
(1) Net of $2.8 million tenant improvement allowances and incentives.
(2) Maintain, replace and extend the lives of company-operated restaurant equipment and facilities.
See Operating and Financial Outlook for 2014 for adiscussion of expected capital expenditures during 2014.
The Company’sBoard of Directors has approved ashare repurchase program. During 2013, 2012 and 2011, we
repurchased and retired 504,295 shares, 741,228 shares and 1,465,436 shares of common stock for $19.9 million, $15.2
million and $22.3 million, respectively. As of February 26, 2014, the remaining dollar amount of shares that may be
repurchased under the program was $31.5 million. See Note 12 to our Consolidated Financial Statements included in
this Form 10-K.