AFC Reports Strong Operating Performance for Fiscal Year 2005

News - Franchise Information
AFC Enterprises, Inc. Consolidated Statements of Cash Flows For Fiscal Years 2005 and 2004 (In millions) Cash flows provided by (used in) operating activities: 2005 2004 Net income $149.6 $24.6 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Discontinued operations (158.0) (39.1) Depreciation and amortization 7.3 10.0 Asset write-downs 5.8 4.8 Net gain on sale of assets (1.4) (0.5) Cumulative effect of accounting changes, pre-tax - 0.2 Deferred income taxes 9.3 3.2 Non-cash interest, net 2.7 1.3 Provision for credit losses (0.3) 0.9 Minority Interest - 0.1 Stock-based compensation expense 2.9 0.4 Change in operating assets and liabilities, exclusive of opening VIE balances: Accounts receivable (3.9) (2.4) Prepaid income taxes (69.2) (5.5) Other operating assets 5.1 (6.5) Accounts payable and other operating liabilities (15.2) 16.9 Net cash provided by (used in) operating activities of continuing operations (65.3) 8.4 Net cash provided by (used in) operating activities of discontinued operations (7.4) 35.6 Cash flows provided by (used in) investing activities: Capital expenditures of continuing operations (4.2) (8.5) Capital expenditures of discontinued operations - (16.9) Proceeds from dispositions of property and equipment 3.1 2.0 Proceeds relating to the sale of discontinued operations, net 367.6 18.6 Acquisition of franchised restaurants (2.2) - Purchases of short-term investments (275.0) - Sales and maturities of short-term investments 244.2 - Proceeds from notes receivable 1.2 - Issuances of notes receivable (0.3) - Other, net - 2.0 Net cash provided by (used in) investing activities 334.4 (2.8) Cash flows provided by (used in) financing activities: Proceeds from 2005 Credit Facility 190.0 - Principal payments - 2005 Credit Facility (term loans) (0.5) - Principal payments - 2002 Credit Facility, net (90.3) (39.0) Principal payments - other notes (including VIEs in 2004 and 2005) (0.1) (0.2) Special dividend (350.8) - Stock repurchases (15.4) - Proceeds from exercise of employee stock options 17.5 3.8 Issuance of common stock, net - 0.1 Increase (decrease) in bank overdrafts, net (6.4) 4.3 Increase in restricted cash (3.8) (1.4) Debt issuance costs (3.7) - Other, net (3.0) 0.4 Net cash (used in) financing activities (266.5) (32.0) Net increase (decrease) in cash and cash equivalents (4.8) 9.2 Cash and cash equivalents at beginning of year 13.0 3.8 Cash and cash equivalents at end of year $8.2 $13.0 Cash and cash equivalents of continuing operations $8.2 $12.8 Cash and cash equivalents of discontinued operations $- $ 0.2 4Q Ended 4Q Ended Year Ended Year Ended 12/25/05 12/26/04 12/25/05 12/26/04 Total Same-Store Sales(1) Company 25.0% 3.8% 6.5% 0.9% Franchised 6.4% 3.2% 3.2% 1.4% Total Domestic 6.9% 3.2% 3.3% 1.3% New Unit Openings Company 0 0 1 0 Franchised 30 11 71 57 Total Domestic 30 11 72 57 International 13 17 51 52 Total Global 43 28 123 109 Unit Count Company 32 56 32 56 Franchised 1,451 1,416 1,451 1,416 Total Domestic 1,483 1,472 1,483 1,472 International 345 353 345 353 Total Global 1,828 1,825 1,828 1,825 (1) On January 9, 2006, AFC released fourth quarter and full year operational results for 2005. The Company has provided a summary chart of these results.

Forward-Looking Statement: Certain statements in this release, and other written or oral statements made by or on behalf of AFC or its brand are "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. 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, 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, the need to continue to improve our internal controls, adverse effects on operations from Hurricane Katrina, the Company's ability to recover related losses from its insurers and the economic impact on consumer spending in markets affected by Katrina, the loss of senior management and the inability to attract and retain additional qualified management personnel, limitations on our business under our 2005 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, adverse effects of regulatory actions arising in connection with the restatement of our previously issued financial statements, effects of increased gasoline prices, general economic conditions, 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 our 2005 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.

SOURCE  AFC Enterprises, Inc.


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