Popeyes Louisiana Kitchen, Inc. Reports Results for Third Quarter 2015; Increases Fiscal Year 2015 Same-Store Sales and EPS Guidance
ATLANTA–(BUSINESS WIRE)–Popeyes Louisiana Kitchen, Inc. (NASDAQ: PLKI), the franchisor and
operator of Popeyes® restaurants, today reported results for its fiscal
third quarter of 2015, which ended October 4, 2015. The Company also
announced increased same-store sales and earnings guidance for fiscal
2015.
“We are pleased to report another quarter of strong sales and earnings.
Our combination of innovative menu offerings, media, and messaging
delivered global same-store sales of 6.0% and continued market share
gains. Going forward, increasing cash flows give us the opportunity to
invest in key organic growth strategies, including people initiatives,
technology and international expansion. We believe the execution of
these strategies will help ensure strong, sustainable financial
performance for all of our stakeholders. The Board approved a $200
million dollar share repurchase authorization to replace the current
authorization,” commented Cheryl Bachelder, Popeyes Chief Executive
Officer.
Third Quarter Highlights:
We accomplished the following results in the third quarter 2015,
principally as a result of continued disciplined execution against our
business strategies:
-
Reported net income was $10.6 million, or $0.46 per diluted share,
compared to $9.8 million, or $0.42 per diluted share in the third
quarter 2014. Adjusted earnings per diluted share were $0.47, compared
to $0.42 in 2014, representing an increase of 11.9%. -
Global same-store sales increased 6.0% in 2015 compared to a 7.3%
increase in 2014 for a two-year compounded growth rate of 13.7%. This
positive sales growth reflects Popeyes’ continued menu innovation,
supported by compelling advertising and strengthened restaurant
execution. -
Total domestic same-store sales increased 5.6%, compared to a 7.2%
increase last year, for a two-year compounded growth rate of 13.2%. -
International same-store sales increased 9.1%, compared to 8.3% last
year. -
Total system-wide sales increased by 11.7% in the third quarter 2015
as a result of same-store sales performance and net unit growth of the
system. -
Popeyes’ domestic same-store sales have outpaced the chicken-QSR
segment for 30 consecutive quarters and overall QSR for 16 consecutive
quarters, according to independent data. -
Popeyes has increased its domestic market share of the chicken-QSR
category to 26.0% compared to 23.7% last year. -
The Popeyes system opened 47 restaurants, which included 24 domestic
and 23 international restaurants, compared to 60 total openings in the
same period last year. Net restaurant openings were 39, compared to 44
net restaurant openings in the same period last year. -
As of the end of the third quarter in 2015, the Company operated and
franchised 2,475 restaurants, compared to 2,315 at the end of the
third quarter in 2014, representing net unit growth of 6.9% over the
last twelve months. -
Total revenues increased approximately 11.3% to $61.1 million in 2015,
from $54.9 million in the prior year. The $6.2 million increase in
revenues was primarily due to a $2.9 million increase in sales by
Company-operated restaurants and a $3.4 million increase in franchise
royalties. Sales by company-operated restaurants and franchise
royalties were driven by positive same store sales increases and net
unit growth. -
Company-operated restaurant operating profit (“ROP”) was $4.9 million,
or 19.3% of sales, compared to $4.4 million, or 19.6% of sales in
2014. Improved management of food, beverage and packaging was offset
primarily by a $0.2 million out-of-period adjustment to rent expense
resulting in a decrease in Company-operated restaurant operating
profit margin in the third quarter 2015. -
Through the first 40 weeks of fiscal 2015, Operating EBITDA was $65.9
million, or 33.0% of total revenue, compared to $57.9 million, or
32.4% of total revenue, last year, a 13.8% increase. -
Through the first 40 weeks of fiscal 2015, free cash flow was $45.6
million, compared to $35.9 million in 2014. -
The Company repurchased 339,573 shares of its common stock for
approximately $19.0 million in the third quarter 2015. -
The Board of Directors approved a $200 million dollar stock repurchase
authorization to replace the current authorization. -
During the second quarter of 2015, Popeyes domestic freestanding
franchised restaurants recorded average restaurant operating profit
margins before rent of 23.1% compared to 22.4% during the second
quarter of 2014.
Fiscal 2015 Guidance
Based on performance through the third quarter 2015, the Company is
making the following changes to our guidance for full-year fiscal 2015:
-
Same-store sales growth in the range of 5.0% to 5.5%, an increase from
previous guidance in the range of 4.5% to 5.5%. -
General and administrative expenses in the range of $84 to $86
million, which is approximately 2.8% of system-wide sales compared to
previous guidance of 2.9% of system-wide sales. -
Adjusted earnings per diluted share in the range of $1.86 to $1.91,
compared to previous guidance of $1.85 to $1.90. -
Share repurchases in the range of $55 to $65 million, compared to
previous guidance of $50 to $60 million.
In addition, the Company reiterates the following guidance for full year
fiscal 2015:
-
New restaurant openings of 200 to 225, including approximately 85 to
95 internationally. Net restaurant openings are expected to be in the
range of 115 to 150, for a system growth rate of approximately 5%.
During 2015, the Company expects to open 4 to 5 new Company-operated
restaurants. -
Capital expenditures for the year of $15 to $20 million, including
approximately $12.5 million for Company-operated restaurant
development and relocation. - An effective income tax rate of approximately 38%.
Conference Call
The Company will host a conference call and internet webcast with the
investment community at 9:00 A.M. Eastern Time on November 12, 2015, to
review the results of the third quarter 2015. To access the Company’s
webcast, go to www.plki.com,
select “Investor Information” and then select “Popeyes Louisiana
Kitchen, Inc. Third Quarter 2015 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. Due to the intervening Veteran’s Day Holiday on November 11, 2015,
the Company’s Q3 2015 filing on Form 10-Q will be available on the EDGAR
web-site on Thursday morning November 12, 2015.
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 October 4, 2015, Popeyes had
2,475 operating restaurants in the United States, Guam, Puerto Rico, the
Cayman Islands and 27 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. |
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Condensed Consolidated Balance Sheets (unaudited) |
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(In millions, except share and per share data) |
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10/4/2015 | 12/28/2014 | ||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 7.9 | $ | 8.4 | |||||||||
Accounts and current notes receivable, net | 8.8 | 8.6 | |||||||||||
Other current assets | 5.5 | 7.4 | |||||||||||
Advertising cooperative assets, restricted | 40.1 | 32.4 | |||||||||||
Total current assets | 62.3 | 56.8 | |||||||||||
Long-term assets: |
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Property and equipment, net | 98.3 | 95.7 | |||||||||||
Goodwill | 11.1 | 11.1 | |||||||||||
Trademarks and other intangible assets, net | 94.3 | 94.7 | |||||||||||
Other long-term assets, net | 1.6 | 2.0 | |||||||||||
Total long-term assets | 205.3 | 203.5 | |||||||||||
Total assets | $ | 267.6 | $ | 260.3 | |||||||||
Current liabilities: | |||||||||||||
Accounts payable | $ | 5.8 | $ | 7.4 | |||||||||
Other current liabilities | 11.7 | 12.4 | |||||||||||
Current debt maturities | 0.3 | 0.3 | |||||||||||
Advertising cooperative liabilities | 40.1 | 32.4 | |||||||||||
Total current liabilities | 57.9 | 52.5 | |||||||||||
Long-term liabilities: | |||||||||||||
Long-term debt | 109.4 | 109.6 | |||||||||||
Deferred credits and other long-term liabilities | 37.6 | 32.4 | |||||||||||
Total long-term liabilities | 147.0 | 142.0 | |||||||||||
Commitments and contingencies | |||||||||||||
Shareholders’ equity: | |||||||||||||
Preferred stock ($.01 par value; 2,500,000 shares authorized; 0 shares issued and outstanding) |
— | — | |||||||||||
Common stock ($.01 par value; 150,000,000 shares authorized; 22,648,070 and 23,143,609 shares issued and outstanding at October 4, 2015 and December 28, 2014, respectively) |
0.2 | 0.2 | |||||||||||
Capital in excess of par value | 9.3 | 46.4 | |||||||||||
Accumulated earnings | 53.8 | 19.3 | |||||||||||
Accumulated other comprehensive loss | (0.6 | ) | (0.1 | ) | |||||||||
Total shareholders’ equity | 62.7 | 65.8 | |||||||||||
Total liabilities and shareholders’ equity | $ | 267.6 | $ | 260.3 | |||||||||
Popeyes Louisiana Kitchen, Inc. |
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Condensed Consolidated Statements of Operations (unaudited) |
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(In millions, except per share data) |
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12 Weeks Ended | 40 Weeks Ended | |||||||||||||||||||||||
10/4/2015 | 10/5/2014 | 10/4/2015 | 10/5/2014 | |||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Sales by Company-operated restaurants | $ | 25.4 | $ | 22.5 | $ | 85.2 | $ | 74.2 | ||||||||||||||||
Franchise royalties and fees | 34.5 | 30.9 | 110.6 | 99.7 | ||||||||||||||||||||
Rent from franchised restaurants | 1.2 | 1.5 | 4.2 | 4.8 | ||||||||||||||||||||
Total revenues | 61.1 | 54.9 | 200.0 | 178.7 | ||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Restaurant food, beverages and packaging | 8.2 | 7.5 | 27.6 | 24.4 | ||||||||||||||||||||
Restaurant employee, occupancy and other expenses | 12.3 | 10.6 | 40.3 | 35.2 | ||||||||||||||||||||
General and administrative expenses | 19.6 | 17.1 | 63.9 | 58.9 | ||||||||||||||||||||
Occupancy expenses – franchise restaurants | 0.7 | 0.7 | 2.3 | 2.3 | ||||||||||||||||||||
Depreciation and amortization | 2.3 | 2.1 | 7.5 | 6.7 | ||||||||||||||||||||
Other expenses (income), net | 0.1 | 0.2 | (0.1 | ) | 1.7 | |||||||||||||||||||
Total expenses | 43.2 | 38.2 | 141.5 | 129.2 | ||||||||||||||||||||
Operating profit | 17.9 | 16.7 | 58.5 | 49.5 | ||||||||||||||||||||
Interest expense, net | 0.9 | 0.8 | 2.8 | 2.4 | ||||||||||||||||||||
Income before income taxes | 17.0 | 15.9 | 55.7 | 47.1 | ||||||||||||||||||||
Income tax expense | 6.4 | 6.1 | 21.2 | 17.9 | ||||||||||||||||||||
Net income | $ | 10.6 | $ | 9.8 | $ | 34.5 | $ | 29.2 | ||||||||||||||||
Earnings per common share, basic: |
$ | 0.47 | $ | 0.42 | $ | 1.51 | $ | 1.25 | ||||||||||||||||
Earnings per common share, diluted: | $ | 0.46 | $ | 0.42 | $ | 1.49 | $ | 1.23 | ||||||||||||||||
Weighted-average shares outstanding: | ||||||||||||||||||||||||
Basic | 22.6 | 23.2 | 22.8 | 23.4 | ||||||||||||||||||||
Diluted | 22.8 | 23.5 | 23.1 | 23.8 | ||||||||||||||||||||
Popeyes Louisiana Kitchen, Inc. |
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Condensed Consolidated Statements of Cash Flows (unaudited) |
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(In millions) |
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40 Weeks Ended | |||||||||||||
10/4/2015 | 10/5/2014 | ||||||||||||
Cash flows provided by (used in) operating activities: | |||||||||||||
Net income | $ | 34.5 | $ | 29.2 | |||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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Depreciation and amortization | 7.5 | 6.7 | |||||||||||
Net (gain) loss on sale and disposal of assets | (0.1 | ) | 0.1 | ||||||||||
Deferred income taxes | 1.9 | (0.1 | ) | ||||||||||
Non-cash interest expense, net | 0.4 | 0.9 | |||||||||||
Provision for credit losses | 0.1 | — | |||||||||||
Excess tax benefits from stock-based payment arrangements | (6.8 | ) | (1.7 | ) | |||||||||
Stock-based compensation expense | 5.1 | 3.6 | |||||||||||
Change in operating assets and liabilities: | |||||||||||||
Accounts receivable | (0.2 | ) | 0.7 | ||||||||||
Other operating assets | 8.8 | 7.9 | |||||||||||
Accounts payable and other operating liabilities | (3.0 | ) | (1.3 | ) | |||||||||
Net cash provided by operating activities | 48.2 | 46.0 | |||||||||||
Cash flows provided by (used in) investing activities: | |||||||||||||
Capital expenditures | (11.2 | ) | (19.4 | ) | |||||||||
Purchase of recipes and formulas | — |
(41.8 |
) | ||||||||||
Proceeds from dispositions of property and equipment | 0.1 | — | |||||||||||
Net cash used in investing activities | (11.1 | ) | (61.2 | ) | |||||||||
Cash flows provided by (used in) financing activities: | |||||||||||||
Borrowings under 2013 credit facility | — | 43.0 | |||||||||||
Share repurchases | (45.0 | ) | (30.0 | ) | |||||||||
Proceeds from exercise of employee stock options | 1.0 | 1.5 | |||||||||||
Excess tax benefits from stock-based payment arrangements | 6.8 | 1.7 | |||||||||||
Other financing activities, net | (0.4 | ) | (0.4 | ) | |||||||||
Net cash provided by (used in) financing activities | (37.6 | ) | 15.8 | ||||||||||
Net increase (decrease) in cash and cash equivalents | (0.5 | ) | 0.6 | ||||||||||
Cash and cash equivalents at beginning of year | 8.4 | 9.6 | |||||||||||
Cash and cash equivalents at end of quarter | $ | 7.9 | $ | 10.2 | |||||||||
Popeyes Louisiana Kitchen, Inc. |
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Same-store sales and restaurant count |
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12 Weeks Ended | 40 Weeks Ended | ||||||||||||||||||||
10/4/2015 | 10/5/2014 | 10/4/2015 | 10/5/2014 | ||||||||||||||||||
Same-store sales increase |
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Company-operated restaurants | (1.0 | )% | 8.5 | % | 0.6 | % | 5.3 | % | |||||||||||||
Domestic franchised restaurants | 5.9 | % | 7.1 | % | 7.2 | % | 5.0 | % | |||||||||||||
Total domestic (Company-operated and franchised restaurants) | 5.6 | % | 7.2 | % | 6.9 | % | 5.0 | % | |||||||||||||
International franchised restaurants | 9.1 | % | 8.3 | % | 6.5 | % | 5.4 | % | |||||||||||||
Total global system | 6.0 | % | 7.3 | % | 6.8 | % | 5.1 | % | |||||||||||||
Company-operated restaurants (all |
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Restaurants at beginning of period | 67 | 56 | 65 | 53 | |||||||||||||||||
New restaurant openings | 1 | 2 | 3 | 6 | |||||||||||||||||
Permanent closings | — | — | — | (1 | ) | ||||||||||||||||
Restaurants at end of quarter | 68 | 58 | 68 | 58 | |||||||||||||||||
Franchised restaurants (domestic) |
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Restaurants at beginning of period | 1,842 | 1,745 | 1,805 | 1,716 | |||||||||||||||||
New restaurant openings | 23 | 30 | 68 | 65 | |||||||||||||||||
Permanent closings | (2 | ) | (8 | ) | (13 | ) | (19 | ) | |||||||||||||
Temporary (closings)/re-openings, net | (6 | ) | 5 | (3 | ) | 10 | |||||||||||||||
Restaurants at end of quarter | 1,857 | 1,772 | 1,857 | 1,772 | |||||||||||||||||
Franchised restaurants (international) |
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Restaurants at beginning of period | 534 | 461 | 509 | 456 | |||||||||||||||||
New restaurant openings | 23 | 28 | 66 | 52 | |||||||||||||||||
Permanent closings | (6 | ) | (8 | ) | (19 | ) | (27 | ) | |||||||||||||
Temporary (closings)/re-openings, net | (1 | ) | 4 | (6 | ) | 4 | |||||||||||||||
Restaurants at end of quarter | 550 | 485 | 550 | 485 | |||||||||||||||||
Total restaurant count at end of quarter |
2,475 | 2,315 | 2,475 | 2,315 | |||||||||||||||||
Management’s Use of Non-GAAP Financial Measures
Adjusted earnings per diluted share, operating EBITDA, Company-operated
restaurant operating profit, free cash flow and consolidated total
leverage ratio are supplemental non-GAAP financial measures. The Company
uses adjusted earnings per diluted share, operating EBITDA,
Company-operated restaurant operating profit, free cash flow and
consolidated total leverage ratio, 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, Company-operated
restaurant operating profit, free cash flow and consolidated total
leverage ratio 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,
Company-operated restaurant operating profit, free cash flow and
consolidated total leverage ratio: (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, which included $0.1 million net loss on disposals of fixed assets for the twelve and forty weeks ended October 4, 2015, $0.2 million net loss on disposals for the forty weeks ended October 5, 2014, and $0.2 million and $0.1 million net gain on sales of assets for the 40 weeks ended October 4, 2015 and October 5, 2014, respectively. |
|
ii. |
$0.4 million in executive transition expenses in the forty weeks ended October 4, 2015 and $0.2 million and $1.6 million for the twelve and forty weeks ended October 5, 2014, respectively, |
|
iii. |
other income of $0.4 million for recoveries under the Deepwater Horizon Economic and Property Damages Settlement Program for the forty weeks ended October 4, 2015, and |
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iv. | 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 for the twelve week and forty week periods ended
October 4, 2015 and October 5, 2014, respectively, the Company’s
adjusted earnings per diluted share on a consolidated basis to the line
on its condensed consolidated statement of operations entitled net
income, which the Company believes is the most directly comparable GAAP
measure.
12 Weeks Ended | 40 Weeks Ended | ||||||||||||||||||||||
(In millions, except per share data) | 10/4/2015 | 10/5/2014 | 10/4/2015 | 10/5/2014 | |||||||||||||||||||
Net income | $ | 10.6 | $ | 9.8 | $ | 34.5 | $ | 29.2 | |||||||||||||||
Other expense (income), net | 0.1 | 0.2 | (0.1 | ) | 1.7 | ||||||||||||||||||
Tax effect | — | (0.1 | ) | 0.1 | (0.7 | ) | |||||||||||||||||
Adjusted earnings | $ | 10.7 | $ | 9.9 | $ | 34.5 | $ | 30.2 | |||||||||||||||
Adjusted earnings per diluted share | $ | 0.47 | $ | 0.42 | $ | 1.49 | $ | 1.27 | |||||||||||||||
Weighted average diluted shares outstanding | 22.8 | 23.5 | 23.1 | 23.8 | |||||||||||||||||||
Operating EBITDA: Calculation and Definition
The Company defines operating EBITDA as earnings before interest
expense, taxes, depreciation and amortization, other expenses (income),
net. The following table reconciles on a historical basis for the forty
weeks ended October 4, 2015 and October 5, 2014, the Company’s operating
EBITDA on a consolidated basis to the line on its condensed consolidated
statements of operations entitled net income, which the Company believes
is the most directly comparable GAAP measure. Operating EBITDA margin is
defined as operating EBITDA divided by total revenues.
40 Weeks Ended | |||||||||||||
(Dollars in millions) | 10/4/2015 | 10/5/2014 | |||||||||||
Net income | $ | 34.5 | $ | 29.2 | |||||||||
Interest expense, net | 2.8 | 2.4 | |||||||||||
Income tax expense | 21.2 | 17.9 | |||||||||||
Depreciation and amortization | 7.5 | 6.7 | |||||||||||
Other expenses (income), net | (0.1 | ) | 1.7 | ||||||||||
Operating EBITDA | $ | 65.9 | $ | 57.9 | |||||||||
Total revenues | $ | 200.0 | $ | 178.7 | |||||||||
Operating EBITDA margin | 33.0 | % | 32.4 | % | |||||||||
Company-operated restaurant operating profit: Calculation and
Definition
The Company defines Company-operated restaurant operating profit as
sales by Company-operated restaurants minus restaurant food, beverages
and packaging minus restaurant employee, occupancy and other expenses.
The following table reconciles on a historical basis for the twelve and
forty week periods ended October 4, 2015 and October 5, 2014,
respectively, company-operated restaurant operating profit to the line
item on its condensed consolidated statement of operations entitled
sales by company-operated restaurants, which the Company believes is the
most directly comparable GAAP measure. Company-operated restaurant
operating profit margin is defined as Company-operated restaurant
operating profit divided by sales by Company-operated restaurants.
12 Weeks Ended | 40 Weeks Ended | ||||||||||||||||||||
(Dollars in millions) | 10/4/2015 | 10/5/2014 | 10/4/2015 | 10/5/2014 | |||||||||||||||||
Sales by Company-operated restaurants | $ | 25.4 | $ | 22.5 | $ | 85.2 | $ | 74.2 | |||||||||||||
Restaurant food, beverages and packaging | 8.2 | 7.5 | 27.6 | 24.4 | |||||||||||||||||
Restaurant employee, occupancy and other expenses | 12.3 | 10.6 | 40.3 | 35.2 | |||||||||||||||||
Company-operated restaurant operating profit | $ | 4.9 | $ | 4.4 | $ | 17.3 | $ | 14.6 | |||||||||||||
Company-operated restaurant operating profit margin | 19.3 | % | 19.6 | % | 20.3 | % | 19.7 | % | |||||||||||||
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 the forty weeks ended
October 4, 2015, $0.8 million of information technology and other
corporate assets, and $0.7 million in other capital assets to maintain,
replace and extend the lives of Company-operated restaurant facilities
and equipment; and for the forty weeks ended October 5, 2014, $0.6
million in Company-operated restaurant reimaging, $2.0 million of
information technology and other corporate assets, and $1.0 million in
other capital assets to maintain, replace and extend the lives of
Company-operated restaurant facilities.
The following table reconciles on a historical basis for the forty week
periods ended October 4, 2015 and October 5, 2014, respectively, 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.
40 Weeks Ended | |||||||||||||
(Dollars in millions) | 10/4/2015 | 10/5/2014 | |||||||||||
Net income | $ | 34.5 | $ | 29.2 | |||||||||
Depreciation and amortization | 7.5 | 6.7 | |||||||||||
Stock-based compensation expense | 5.1 | 3.6 | |||||||||||
Maintenance capital expenditures | (1.5 | ) | (3.6 | ) | |||||||||
Free cash flow | $ | 45.6 | $ | 35.9 | |||||||||
The Company uses Consolidated Total Leverage Ratio (“total leverage
ratio”) to measure compliance with its covenants and borrowing capacity
under its 2013 Credit Facility. The Company also believes that its total
leverage ratio is a helpful measure for investors to assess its overall
debt leverage which affects its ability to refinance its long-term debt
as it matures, the cost of existing debt, the capacity to incur
additional debt to invest in its strategic initiatives, and the ability
to repurchase and retire its common shares.
The Company calculates Consolidated Total Leverage Ratio, in accordance
with its 2013 Credit Facility, as the ratio of Consolidated Total
Indebtedness divided by Consolidated EBITDA. Consolidated Total
Indebtedness is generally defined under the 2013 Credit Facility as
total indebtedness reflected on our balance sheet plus outstanding
letters of credit. Consolidated EBITDA is defined in the 2013 Credit
Facility as earnings before interest expense, taxes, depreciation and
amortization, other expenses (income), net, and stock-based compensation
expense for the four immediately preceding fiscal quarters.
Set forth below is the calculation of Consolidated Total Leverage Ratio
as of October 4, 2015 and December 28, 2014 and the reconciliations of
Consolidated Total Indebtedness and Consolidated EBITDA to their most
comparable GAAP measures: current debt maturities and long-term debt,
for Consolidated Indebtedness, and net income, for Consolidated EBITDA.
52 Weeks Ended | ||||||||||||
(Dollars in millions) | 10/4/2015 | 12/28/2014 | ||||||||||
Current debt maturities | $ | 0.3 | $ | 0.3 | ||||||||
Long-term debt | 109.4 | 109.6 | ||||||||||
Total indebtedness | 109.7 | 109.9 | ||||||||||
Outstanding letters of credit | 0.1 | 0.1 | ||||||||||
Consolidated Total Indebtedness | $ | 109.8 | $ | 110.0 | ||||||||
Net income | $ | 43.3 | $ | 38.0 | ||||||||
Interest expense, net | 3.4 | 3.0 | ||||||||||
Income tax expense | 27.1 | 23.8 | ||||||||||
Depreciation and amortization | 9.5 | 8.7 | ||||||||||
Other expenses (income), net | (0.6 | ) | 1.2 | |||||||||
Stock-based compensation expense | 6.8 | 5.3 | ||||||||||
Consolidated EBITDA | $ | 89.5 | $ | 80.0 | ||||||||
Consolidated Total Leverage Ratio | 1.2 | 1.4 | ||||||||||
Forward Looking Statements:
This Press Release contains “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 2015 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 2015 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.
Contacts
Popeyes Louisiana Kitchen, Inc.
Investor inquiries:
Grady
Walker, 404-459-4584
Treasurer and Director of Investor Relations
investor.relations@popeyes.com
or
Media
inquiries:
Coltrin & Associates, Inc.
Jennifer Webb,
212-221-1616
SVP-Operations
jennifer_webb@coltrin.com