ATLANTA - February 26, 2014 - (BUSINESS WIRE) - Popeyes Louisiana Kitchen, Inc. (NASDAQ: PLKI), the franchisor and operator of Popeyes® restaurants, today reported results for fiscal 2013 which ended December 29, 2013. The Company also provided guidance for fiscal 2014 as well as an update on its Strategic Plan.
Popeyes Louisiana Kitchen, Inc. Chief Executive Officer Cheryl Bachelder stated "Popeyes momentum continued to accelerate in 2013. Our market share of the domestic chicken QSR category grew to 20.8%. We opened 194 new restaurants -- the highest opening count in 15 years. Over 550 domestic restaurants were remodeled, bringing the total to more than 60% of the domestic system in the new Popeyes Louisiana Kitchen image. These accomplishments reflect our disciplined execution of our strategic plan and our exceptional alignment with our franchisees. Looking forward, we will continue to invest in building leader capabilities to support our ambition of becoming a best in class employer, consistently delivering superior service to our guests."
Earnings:
Same-store Sales:
Openings:
Other:
The Company expects:
Consistent with previous guidance, over the course of the upcoming five years, the Company believes the execution of its Strategic Plan will deliver on an average annualized basis the following: same-store sales growth of 1% to 3%; net unit growth of 4% to 6%; and earnings per diluted share growth of 13% to 15%.
The Company will host a conference call and internet webcast with the investment community at 9:00 A.M. Eastern Time on February 27, 2014, to review the results of fiscal 2013. To access the Company's webcast, go to www.popeyes.com/investors, select "Investor Information" and then select "Popeyes Louisiana Kitchen, Inc. Fiscal 2013 Earnings Conference Call." A replay of the conference call will be available for 90 days at the Company's website or through a dial-in number for a limited time following the call.
Popeyes Louisiana Kitchen, Inc. is the franchisor and operator of Popeyes® restaurants, the world's second-largest quick-service chicken concept based on number of units. As of December 29, 2013, Popeyes had 2,225 operating restaurants in the United States, three territories, and 28 foreign countries. The Company's primary objective is to deliver sales and profits by offering excellent investment opportunities in its Popeyes brand and providing exceptional franchisee support systems and services to its owners. Popeyes Louisiana Kitchen, Inc. can be found at www.popeyes.com.
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Management's Use of Non-GAAP Financial Measures
Adjusted Earnings per Diluted Share, Operating EBITDA and Free Cash Flow are supplemental non-GAAP financial measures. The Company uses Adjusted Earnings per Diluted Share, Operating EBITDA and Free Cash Flow, in addition to net income, operating profit and cash flows from operating activities, to assess its performance and believes it is important for investors to be able to evaluate the Company using the same measures used by management. The Company believes these measures are important indicators of its operational strength and the performance of its business. Adjusted Earnings per Diluted Share, Operating EBITDA and Free Cash Flow as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. In addition, Adjusted Earnings per Diluted Share, Operating EBITDA and Free Cash Flow: (a) do not represent net income, cash flows from operations or earnings per share as defined by GAAP; (b) are not necessarily indicative of cash available to fund cash flow needs; and (c) should not be considered as an alternative to net income, earnings per share, operating profit, cash flows from operating activities or other financial information determined under GAAP.
Adjusted Earnings Per Diluted Share: Calculation and Definition
The Company defines Adjusted Earnings for the periods presented as the Company's reported net income after adjusting for certain non-operating items consisting of the following:
(i) other expense (income), net, as follows:
(ii) for fourth quarter 2013 and fiscal 2013, $0.4 million in interest expense from the retirement of the 2010 Credit Facility,
(iii) for fiscal 2012, $0.5 million in legal fees related to licensing arrangements, and
(iii) the tax effect of these adjustments at the effective statutory rates.
Adjusted Earnings per Diluted Share provides the per share effect of adjusted net income on a diluted basis. The following table reconciles on a historical basis the fourth quarter 2013, fourth quarter 2012, fiscal 2013 and fiscal 2012, the Company's Adjusted Earnings per Diluted Share on a consolidated 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.
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Operating EBITDA: Calculation and Definition
The Company defines Operating EBITDA as "earnings before interest expense, taxes, depreciation and amortization, other expenses (income), net and legal fees related to licensing arrangements". The following table reconciles on a historical basis for fiscal years 2013 and 2012, the Company's Operating EBITDA on a consolidated 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. Operating EBITDA margin is defined as operating EBITDA divided by total revenues.
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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 year 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 andCalifornia and $7.2 million for the construction of new Company-operated restaurants.
The following table reconciles on a historical basis for fiscal 2013 and fiscal 2012, the Company's Free Cash Flow on a consolidated basis to the line on its consolidated statements of operations entitled net income, which the Company believes is the most directly comparable GAAP measure on its consolidated statements of operations.
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Certain statements in this Press Release 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 Press Release include discussions regarding the Company's planned implementation of its strategic plan, planned share repurchases, projections and expectations regarding same-store sales for fiscal 2014 and beyond, expectations regarding future growth and commodity costs, expectations regarding restaurant reimaging, guidance for new restaurant openings and closures, effective income tax rate, and the Company's anticipated 2014 and long-term performance, including projections regarding general and administrative expenses, capital expenditures and adjusted earnings per diluted share, 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 to attract and retain additional qualified management personnel, limitations on our business under our 2013 Credit Facility, our ability to comply with the repayment requirements, covenants, tests and restrictions contained in our 2013 Credit Facility, 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, 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 the Company's 2013 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.
Rebecca Gardy
Popeyes Louisiana Kitchen, Inc.
Director
Finance & Investor Relations
404-459-4673
investor.relations@popeyes.com
Jennifer Webb
Coltrin & Associates, Inc.
Senior Vice President, Operations
212-221-1616 ext. 111
jennifer_webb@coltrin.com
Source: Popeyes Louisiana Kitchen, Inc.
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Popeyes® distinguishes itself with a unique New Orleans style menu featuring fried chicken, chicken tenders, fried shrimp, and other regional items.