Popeye's 2013 Annual Report Download - page 49

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33
(dollars in millions)
Fiscal
2013
Fiscal
2012
Fiscal
2011
Sales by company-operated restaurants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $78.7 $64.0 $54.6
Restaurant food, beverages and packaging. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26.1)(21.7)(18.3)
Restaurant employee, occupancy and other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . (37.9)(31.2)(26.1)
Company-operated restaurant operating profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14.7 $11.1 $10.2
Company-operated restaurant operating profit margin. . . . . . . . . . . . . . . . . . . . . . . . . . 18.7%17.3%18.7%
Free Cash Flow: Calculation and Definition
The Company defines free cash flow as net income plus depreciation and amortization plus stock-based compensation
expense minus maintenance capital expenditures which includes: for fiscal 2013, $2.2 million in company-operated
restaurant reimages, $0.9 million of information technology hardware and software and $1.1 million in other capital
assets to maintain, replace and extend the lives of company-operated restaurant facilities and equipment, and for fiscal
2012 $0.6 million in company-operated restaurant reimages, $1.1 million of information technology hardware and
software and $1.5 million in other capital assets to maintain, replace and extend the lives of company-operated restaurant
facilities. In 2013, maintenance capital expenditures exclude $13.8 million related to the acquired restaurants in
Minnesota and California and $15.3 million for the construction of new company-operated restaurants. In 2012,
maintenance capital expenditures exclude $16.9 million related to the acquired restaurants in Minnesota and California
and $7.2 million for the construction of new company-operated restaurants.
The following table reconciles on ahistorical basis for fiscal years 2013 and 2012, the Company’sfree cash flow
on aconsolidated basis to the line on its consolidated statement of operations entitled net income, which the Company
believes is the most directly comparable GAAP measure on its consolidated statement of operations.
(dollars in millions)
Fiscal
2013
Fiscal
2012
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $34.1 $30.4
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7 4.6
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 4.9
Maintenance capital expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.2)(3.2)
Free cash flow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $42.0 $36.7
Forward-Looking Statements
Forward-Looking Statement: Certain statements in this Annual Report on Form 10-K 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 anumber of risks and uncertainties. Examples of such statements in this Annual Report on
Form 10-K include discussions regarding the Company’s planned implementation of its strategic plan, expectations
regarding future growth, planned share repurchases, projections and expectations regarding same-store sales for fiscal
2014 and beyond, the Company’sability to improve restaurant level margins, guidance for new restaurant openings
and closures, effective income tax rate, and the Company’santicipated 2014 and long-term performance, including
projections regarding general and administrative expenses, net earnings per diluted share, operating profit, operating
EBITDA 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, continued 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, general economic conditions, the loss of senior management and the inability