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Popeyes Louisiana Kitchen Reports Results for Second Quarter 2014; Reiterates Earnings Guidance

August 21, 2014



ENP Newswire - 21 August 2014

Release date- 20082014 - ATLANTA - Popeyes Louisiana Kitchen, Inc. (NASDAQ: PLKI), the franchisor and operator of Popeyes restaurants, today reported results for its fiscal second quarter of 2014 which ended July 13, 2014. The Company also reiterated guidance for fiscal 2014.

'Popeyes strong second quarter demonstrates our focused execution of our strategic roadmap. We have consistently delivered excellent results quarter after quarter for the past six years. The sustainability of our performance is a reflection of our principles, priorities and processes. As we look ahead, we are excited about this new era for Popeyes - an innovative menu, beautifully remodeled restaurants, an expanding global footprint, and a renewed focus on our employees and guests,' commented Cheryl Bachelder, Popeyes Chief Executive Officer.

Second Quarter 2014 Highlights

Earnings:

Reported net income was $8.3 million, or $0.35 per diluted share.

Adjusted earnings per diluted share were $0.39, excluding the impact of executive transition expenses, compared to $0.35 in 2013, representing an increase of 11.4%.

Same-store Sales:

Global same-store sales increased 3.6% in 2014, for a two-year growth rate of 8.0%.

Total domestic same-store sales increased 3.8%, compared to 4.3% last year.

International same-store sales increased 2.2%, compared to 5.8% last year.

Popeyes domestic same-store sales have outpaced the chicken-QSR segment for 25 consecutive quarters and overall QSR for 11 consecutive quarters according to independent data.

Popeyes market share of the domestic chicken-QSR segment reached 23.1%, compared to 20.5% in the prior year.

Openings:

The Popeyes system opened 36 restaurants, which included 20 domestic and 16 international restaurants, compared to 44 openings in the prior year.

Included in second quarter 2013 domestic openings were the conversion of eight restaurant properties which were acquired in 2012 in Minnesota and California.

Net restaurant openings were 21, compared to 28 net restaurant openings last year.

Other:

Total system-wide sales increased by 9.5%.

Total revenues increased approximately 12% to $53.7 million in 2014 from $47.9 million in the prior year.

Through the end of the second quarter, Operating EBITDA was $38.9 million, or 31.4% of total revenue, compared to $34.1 million last year, a 14% increase.

Company-operated restaurant operating profit was $4.2 million, or 18.8% of sales, compared to $3.2 million, or 18.3% of sales in 2013. The restaurant operating profit of company restaurants through the end of the second quarter was $10.2 million, or 19.7% of sales, compared to $7.9 million, or 19.1% of sales last year.

Average restaurant operating profit margins of Popeyes domestic freestanding franchised restaurants before rent was 23.4% in the first quarter 2014, compared to 22.2% last year.

Through the end of the second quarter, free cash flow was $24.2 million, compared to $22.0 million in 2013.

The Company repurchased approximately 222,000 shares of its common stock for approximately $10.0 million. Through the second quarter, total shares repurchased were 462,000, for approximately $20.0 million.

On June 16, 2014, the Company announced the purchase of the recipes and formulas used in the preparation of many of its core menu items from Diversified Foods and Seasonings, L.L.C. ('Diversified') for $43 million. In connection with the purchase of the recipes and formulas, the Company and Diversified entered into a new supply agreement whereby Diversified continues as the exclusive supplier of certain agreed upon core products in the Company's domestic markets through March 2034. Going forward, the $3.1 million annual royalty that would otherwise have been paid to Diversified had the prior agreement remained in effect will be reinvested, net of incremental interest expense, into various growth initiatives.

Fiscal 2014 Guidance

Based on second quarter year-to-date performance, the Company reiterates full year guidance as follows:

Same-store sales growth of 3.0% to 4.0%.

Adjusted earnings per diluted share in the range of $1.58 to $1.63.

New restaurant openings of 180 to 200, with net restaurant openings of 100 to 130, for a system growth rate of approximately 5%. During 2014, the Company expects to open 10 to 15 new company-operated restaurants.

General and administrative expenses of approximately 3.0% of system-wide sales.

An effective income tax rate of approximately 38%.

Capital expenditures for the year of $30 to $35 million.

Share repurchases of $20 to $30 million.

Conference Call

The Company will host a conference call and internet webcast with the investment community at 9:00 A.M. Eastern Time on August 21, 2014, to review second quarter 2014 results. To access the Company's webcast, go to www.plki.com, select 'Webcast and Presentations' and then select 'Popeyes Louisiana Kitchen, Inc. Second Quarter 2014 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.

Corporate Profile

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 July 13, 2014, Popeyes had 2,262 operating restaurants in the United States, three territories, and 26 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.

Popeyes Louisiana Kitchen, Inc.

Condensed Consolidated Balance Sheets (unaudited): See Full Press Release at:

http://investor.popeyes.com/releasedetail.cfm?ReleaseID=867142

Forward-Looking Statement: 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.

Popeyes Louisiana Kitchen, Inc.

Investor inquiries:

Rebecca Gardy, 404-459-4673

Director, Finance & Investor Relations

investor.relations@popeyes.com

or

Media inquiries:

Todd Burke, 404-459-4737

VP, Corporate Communications

todd.burke@popeyes.com

Source: Popeyes Louisiana Kitchen, Inc.


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Source: ENP Newswire


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