Burger King Worldwide Inc. (NYSE: BKW) today reported financial results
for its third quarter ended September 30, 2012.
Third Quarter Highlights:
-- System-wide comparable sales increased 1.4% and system-wide sales
increased 3.9% on a constant currency basis
-- Adjusted EBITDA increased 6% on an organic basis to $162.0 million
-- Adjusted Diluted EPS increased 11% to $0.17
-- Refinanced Term Loan B, lowering annualized cash interest costs by
approximately $25 million
-- Initiated new quarterly cash dividend of $0.04 per share
BKW Chief Executive Officer Bernardo Hees said, "We completed our first
full quarter as a public company with continued positive momentum
despite the challenging global economic environment. BKW is fortunate to
have one of the most widely recognized and resilient brands in the
global QSR industry and we are proud of the hard work and dedication of
our employees and franchisees who are striving to deliver a strong
finish to a critical year for the BURGER KING system. In the U.S. and
Canada, we are executing on our four pillar strategy, while
internationally we completed additional refranchisings and development
agreements that we believe will accelerate restaurant growth in the
years to come." Chief Financial Officer Daniel Schwartz added, "We are
excited to begin returning cash to our shareholders with the initiation
of a quarterly cash dividend, underscoring our confidence in BKW's
business model and commitment to disciplined capital allocation."
Organic revenue growth was 0.2%, excluding the impact of refranchising
and FX headwinds. On a reported basis, total revenues decreased 25.8% to
$451.1 million, compared to $607.7 million in the prior year period due
to refranchising transactions in the U.S. and Canada, EMEA and APAC as
well as unfavorable FX impact, partially offset by comparable sales
growth and increased franchise and property revenues.
Organic Adjusted EBITDA growth was 6.3%, excluding the impact of
refranchising and FX headwinds. On a reported basis, Adjusted EBITDA
increased 0.6% to $162.0 million, compared to $161.0 million in the
prior year period. Organic growth was driven by comparable sales and net
restaurant growth, as well as G&A cost control, while growth was lower
on a reported basis due to significant progress on our global
refranchising initiative and FX headwinds primarily related to a weaker
Euro. Year to date, Adjusted EBITDA grew 11%.
Adjusted net income and Adjusted Diluted EPS increased 12.7% and 10.6%,
respectively, compared to the prior year, primarily due to an increase
in Adjusted EBITDA, lower Depreciation and Amortization and lower
interest expense. Year to date, Adjusted Net Income increased 26% and
Adjusted Diluted EPS grew 25%.
Operational and Segment Highlights
System-wide comparable sales growth was positive across all segments
except APAC. The U.S. and Canada delivered 1.6% comparable sales growth
driven by the company's Summer BBQ and Chicken offerings. The company
was pleased with the results of its limited time offerings and progress
in attracting a more diverse customer base, but experienced a
deceleration in comparable sales growth due to more challenging prior
year comparisons and the loss of some value based traffic.
EMEA delivered comparable sales growth of 1.8%, driven by double digit
