AFC Reports Financial Results for Second Quarter 2010; Raises Fiscal 2010 Earnings Guidance

ATLANTA ATLANTA--(BUSINESS WIRE)--AFC Enterprises, Inc. (NASDAQ: AFCE), the franchisor and operator of Popeyes® restaurants, today reported results for second quarter 2010 which ended July 11, 2010. The Company also raised earnings guidance for fiscal 2010 and provided a business update on its Strategic Plan.

“earnings before interest expense, taxes, depreciation and amortization”

Second Quarter 2010 Highlights Compared to Second Quarter 2009:

• Reported net income was $6.8 million, or $0.26 per diluted share, compared to $6.4 million, or $0.25 per diluted share, last year. Adjusted earnings per diluted share were $0.21 compared to $0.18 last year. Year-to-date adjusted earnings per diluted share were $0.44 compared to $0.39 last year. Adjusted earnings per diluted share is a supplemental non-GAAP measure of performance. See the heading entitled “Management’s Use of Non-GAAP Financial Measures.”
• Total system-wide sales increased 2.8 percent compared to a 4.9 percent increase last year.
• Global same-store sales increased 0.6 percent compared to a 4.3 percent increase last year. Domestic same-store sales increased 0.4 percent compared to a 4.3 percent increase last year. International same-store sales increased 2.7 percent compared to a 3.9 percent increase in 2009.
• The Popeyes system opened 17 restaurants and permanently closed 17 restaurants in the second quarter.
• Year-to-date EBITDA of $24.5 million was 31.4 percent of total revenue, which included $0.1 million of other income, compared to EBITDA of $24.0 million, at 28.7 percent of total revenue, which included $2.5 million of other income last year. EBITDA is a supplemental non-GAAP measure of performance. See the heading entitled “Management’s Use of Non-GAAP Financial Measures.”
• In the second quarter, the Company recorded a tax benefit of $1.4 million, or $0.05 per diluted share, related to the completion of a federal income tax audit for years 2004 and 2005.
• During the second quarter, outstanding debt was reduced by $8.2 million to $67.6 million.
• Year-to-date, the Company generated $14.9 million of free cash flow, which included $0.1 million of other income, compared to $14.7 million in 2009, which included $2.5 million of other income. Free cash flow is a supplemental non-GAAP measure of performance. See the heading entitled “Management’s Use of Non-GAAP Financial Measures.”

AFC Enterprises Chief Executive Officer Cheryl Bachelder stated, “Popeyes delivered another strong earnings quarter driven primarily by positive same-store sales. We are especially pleased with these results as we rolled over strong same-store sales from last year, and we continued to significantly outpace the chicken QSR category for the ninth straight quarter. This performance reflects top-line momentum generated by the introduction of Popeyes Wicked Chicken. We believe our success is also driven by our Strategic Plan, which is focused on offering more value and innovation, married with improved guest experience. This has proven to be the right formula for these times, improving the profitability of our restaurants and driving heightened interest in building new restaurants.”

Strategic Plan Update

The Company’s Strategic Plan is built on the foundation of the Four Pillars below.

1. Build the Popeyes Brand

• In April, Popeyes promoted its 2-piece Louisiana tenders with Cajun fries and a buttermilk biscuit for $2.99, supported with national media advertising. On April 21^st, the first week of the second quarter, the system offered its Popeyes Pay Day promotion for the second consecutive year. This national one-day event featured 8-pieces of Popeyes signature Bonafide® chicken for only $5.99.
• On May 31st, Popeyes launched two new menu items — Popeyes Wicked Chicken and Cane Sweeeet Iced Tea. Popeyes Wicked Chicken featured a portable box with Wicked Chicken, Cajun fries, a buttermilk biscuit, ranch dipping sauce and a mini bottle of TABASCO® Pepper Sauce for only $3.99. Cane Sweeeet Iced Tea, a permanent menu addition, is a fresh brewed tea sweetened with all natural, pure cane sugar.

2. Run Great Restaurants

• Second quarter year-to-date Guest Experience Monitor, GEM, “% Delighted” scores were at 72 percent, up 7 percentage points from a year ago. The Company’s speed of service focus continues to show benefits as “Speed of Service” scores were 8 percentage points higher than the third quarter last year when the program was initiated.

3. Strengthen Unit Economics

• In the second quarter, Popeyes restaurants achieved a 3.5 percent decrease in food costs compared to last year. The improvement was primarily the result of successful renegotiation of vendor contracts, restaurant efficiency initiatives, and declines in commodity costs. On a full year basis, the Company expects these cost savings to improve system-wide operating margins at the restaurant level by approximately one full percentage point compared to last year.

4. Ramp Up New Unit Growth

• The Company’s global development pipeline for new unit openings continues to improve. During the first and second quarters, the Company opened 34 new restaurants, including two new restaurants in Vietnam and one restaurant in the Cayman Islands. The Company now expects to open 120-130 new restaurants for full year 2010. Consistent with prior years, many of these openings are expected to occur in December. Additionally, due to improved restaurant performance and a favorable restaurant closure rate, the Company now expects closures to be 80-90 restaurants, resulting in 30-50 net restaurant openings.

Second Quarter 2010 Financial Performance Compared to Second Quarter 2009

Total system-wide sales increased by 2.8 percent. System-wide sales were comprised of $426.4 million in franchise restaurant sales and $12.1 million in company-operated restaurant sales.

Global same-store sales increased 0.6 percent compared to a 4.3 percent increase in 2009. Total domestic same-store sales increased 0.4 percent compared to a 4.3 percent increase last year, an improvement over the 0.4 percent decrease in the first quarter. The second quarter increase was primarily due to the strong sales performance of the Company’s new product introduction of Popeyes Wicked Chicken. According to independent data, Popeyes’ second quarter domestic same-store sales outpaced the chicken QSR category for the ninth consecutive quarter. Through the remainder of 2010, Popeyes’ efforts will be focused on offering its guests the brand’s distinctive products at compelling value to drive traffic into the restaurants.

International same-store sales increased 2.7 percent compared to a 3.9 percent increase in 2009. The increase was due primarily to strong sales in Canada, Turkey and overseas U.S. military bases, partially offset by negative performance in Latin America, Korea and the Middle East. To address the softer sales in certain international markets, the Company will continue to shift its marketing focus to value promotions to drive traffic into the restaurants.

Total revenues were $34.3 million, compared to $35.7 million last year. This decrease was primarily due to the Company’s successful re-franchising of 13 company-operated restaurants in the Atlanta market during the second quarter of 2009.

Company-operated restaurant expenses include “restaurant food, beverages and packaging” and “restaurant employee, occupancy and other expenses”. Company-operated restaurant expenses as a percentage of sales were 3.9 percentage points lower than the second quarter of last year. This improvement was primarily a result of lower food costs attributable to successful renegotiation of vendor contracts, restaurant efficiency initiatives and declines in commodity costs, and the re-franchising of lower performing company-operated restaurants.

General and administrative expenses were $12.6 million, or 2.9 percent of system-wide sales, compared to $13.2 million, or 3.1 percent of system-wide sales, last year. General and administrative expenses as a percent of system-wide sales were lower than the Company’s full year guidance due to timing of expenses. The Company expects to apply these expenses over the next two quarters and that its general and administrative expenses for fiscal 2010 will be in the range of 3.1-3.2 percent of system-wide sales, among the lowest in the restaurant industry.

Other income was $0.0 million compared to other income of $2.9 million last year. In 2009, other income primarily included the net gain associated with the sale of 9 properties in the Texas market.

Year-to-date EBITDA of $24.5 million was 31.4 percent of total revenue, compared to EBITDA of $24.0 million, at 28.7 percent of total revenue, last year. The increase in EBITDA was primarily due to an improvement in costs at company-operated restaurants, higher franchise revenues, and lower general and administrative expenses. This increase was partially offset by $2.5 million of other income recognized last year. EBITDA is a supplemental non-GAAP measure of performance. See the heading entitled “Management’s Use of Non-GAAP Financial Measures.”

Operating profit was $10.2 million, compared to operating profit of $11.4 million last year, which included $2.9 million in other income.

Interest expense, net was $1.7 million in the second quarter, a $0.4 million increase from 2009. This increase was primarily due to higher average interest rates on debt and amortization fees expensed in connection with the Company’s amended credit facility, partially offset by lower average debt balances compared to 2009. Interest expense, net included $0.4 million of non-cash charges related to amortization of bank fees and interest rate swap costs, compared to $0.5 million last year.

Income tax expense was $1.7 million, at an effective tax rate of 20.0 percent, compared to an effective tax rate of 36.6 percent in the prior year. In the second quarter, the Company recorded a tax benefit of $1.4 million, or $0.05 per diluted share, related to the completion of a federal income tax audit for years 2004 and 2005. Excluding the tax benefit, the effective tax rate would have been 36.5 percent for the second quarter, which differs from statutory rates due to adjustments in estimated tax reserves, other permanent differences and inter-period allocations. Excluding the tax benefit, the Company expects its effective tax rate will be in the range of 37 to 38 percent for 2010.

Reported net income was $6.8 million, or $0.26 per diluted share, compared to $6.4 million, or $0.25 per diluted share, last year. Excluding the tax benefit and other income, adjusted earnings per diluted share were $0.21 compared to $0.18 last year. Year-to-date adjusted earnings per diluted share were $0.44 compared to $0.39 last year. Adjusted earnings per diluted share is a supplemental non-GAAP measure of performance. See the heading entitled “Management’s Use of Non-GAAP Financial Measures.”

During the second quarter, the Company made $8.2 million in debt repayments, including $8.0 million of voluntary payments, and reduced its outstanding debt to $67.6 million. The Company’s Total Leverage Ratio is now at 1.47 to 1.

Year-to-date, the Company generated $14.9 million of free cash flow, which included $0.1 million of other income, compared to $14.7 million in 2009, which included $2.5 million of other income. Free cash flow is a supplemental non-GAAP measure of performance. See the heading entitled “Management’s Use of Non-GAAP Financial Measures.”

The Popeyes system opened 17 restaurants in the second quarter, which included 6 domestic and 11 international restaurants. The Popeyes system permanently closed 17 restaurants, including 7 domestic and 10 international. Year-to-date, Popeyes opened 34 restaurants and permanently closed 29 restaurants, resulting in 5 net openings, compared to 30 restaurants openings and 53 permanent closures year-to-date last year. The lower closure rate reflects improved restaurant performance as a result of higher sales, cost savings initiatives, and improved operations.

On a system-wide basis, Popeyes had 1,945 restaurants operating at the end of the second quarter, compared to 1,905 restaurants at the end of the second quarter last year. Total unit count was comprised of 1,570 domestic and 375 international restaurants in 26 foreign countries, Guam, Puerto Rico, and the Cayman Islands. Of this total, 1,908 were franchised restaurants and 37 were company-operated restaurants.

Fiscal 2010 Guidance

Given its year-to-date same-store sales performance, the Company now projects that its global same-store sales for fiscal 2010 will be in the range of flat to positive 2.0 percent, an increase from the Company’s previous guidance of negative 1.0 percent to positive 2.0 percent.

Popeyes now expects its global new openings will be in the range of 120-130 restaurants, an increase from previous guidance of 110-130 restaurants. Consistent with prior years, many of these new openings are expected to occur in December. Due to improved restaurant performance and a favorable year-to-date restaurant closure rate, the Company now expects its closures will be 80-90 restaurants, resulting in 30-50 net restaurant openings, compared to previous guidance of approximately 100 restaurant closures and 10-30 net restaurant openings. Popeyes restaurant closures typically have sales significantly lower than the system average.

The Company continues to expect its fiscal 2010 general and administrative expense rate will be consistent with last year’s rate of 3.1-3.2 percent of system-wide sales, among the lowest in the restaurant industry. The Company will continue to invest in its international business and core initiatives of the Company’s Strategic Plan. This includes new product innovation to drive traffic, operational tools and training to improve the guest experience, and productivity initiatives to strengthen restaurant profitability.

The Company now expects 2010 adjusted earnings per diluted share will be $0.75-$0.79, an increase from previous guidance of $0.73-$0.77 per diluted share. The Company calculates adjusted earnings per diluted share by excluding its year-to-date tax benefit of $1.4 million, or $0.05 per diluted share. Adjusted earnings per diluted share is a supplemental non-GAAP measure of performance. See the heading entitled “Management’s Use of Non-GAAP Financial Measures.”

Long-Term Guidance

Consistent with previous guidance, over the course of the next five years, the Company believes the execution of its Strategic Plan will deliver on an average annualized basis the following results: same-store sales growth of 1 to 3 percent; net new unit growth of 4 to 6 percent; and earnings per diluted share growth of 13 to 15 percent.

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 19, 2010, to review the results of the second quarter 2010. To access the Company’s webcast, go to www.afce.com, select “Investor Information” and then select “AFC Enterprises Second Quarter 2010 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

AFC Enterprises, 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 11, 2010, Popeyes had 1,945 operating restaurants in the United States, Guam, Puerto Rico, the Cayman Islands and 26 foreign countries. AFC’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. AFC Enterprises can be found at www.afce.com.

TABASCO® is a registered trademark exclusively of McIlhenny Company, Avery Island, LA 70513.

AFC Enterprises, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(In millions, except share data)
ASSETS		7/11/2010			12/27/2009
Current assets:
Cash and cash equivalents	$	4.6		$	4.1
Accounts and current notes receivable, net		6.7			9.1
Other current assets		4.9			3.9
Advertising cooperative assets, restricted		16.6			16.0
Total current assets		32.8			33.1
Long-term assets:
Property and equipment, net		20.9			21.5
Goodwill		11.1			11.1
Trademarks and other intangible assets, net		47.3			47.6
Other long-term assets, net		2.4			3.3
Total long-term assets		81.7			83.5
Total assets	$	114.5		$	116.6
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	4.2		$	4.8
Other current liabilities		11.3			13.7
Current debt maturities		0.9			1.3
Advertising cooperative liabilities		16.6			16.0
Total current liabilities		33.0			35.8
Long-term liabilities:
Long-term debt		66.7			81.3
Deferred credits and other long-term liabilities		18.8			17.7
Total long-term liabilities		85.5			99.0
Total liabilities		118.5			134.8
Commitments and contingencies
Shareholders' deficit:
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; 25,557,996 and 25,455,917 shares issued and outstanding at July 11, 2010 and December 27, 2009, respectively)		0.3			0.3
Capital in excess of par value		113.5			112.3
Accumulated deficit		(117.7	)		(130.3	)
Accumulated other comprehensive loss		(0.1	)		(0.5	)
Total shareholders' deficit		(4.0	)		(18.2	)
Total liabilities and shareholders' deficit	$	114.5		$	116.6

AFC Enterprises, Inc.
Condensed Consolidated Statements of Operations (unaudited)
(In millions, except per share data)
	12 Weeks Ended					28 Weeks Ended
	7/11/2010		7/12/2009			7/11/2010			7/12/2009
Revenues:
Sales by company-operated restaurants	$	12.1	$	14.1		$	28.2		$	34.9
Franchise revenues		21.2		20.6			47.6			46.3
Rent and other revenues		1.0		1.0			2.3			2.4
Total revenues		34.3		35.7			78.1			83.6
Expenses:
Restaurant employee, occupancy and other expenses		6.2		7.5			14.0			18.3
Restaurant food, beverages and packaging		3.8		4.7			8.9			11.6
Rent and other occupancy expenses		0.6		0.7			1.4			1.3
General and administrative expenses		12.6		13.2			29.4			30.9
Depreciation and amortization		0.9		1.1			2.1			2.7
Other expenses (income), net		-		(2.9	)		(0.1	)		(2.5	)
Total expenses		24.1		24.3			55.7			62.3
Operating profit		10.2		11.4			22.4			21.3
Interest expense, net		1.7		1.3			4.5			3.0
Income before income taxes		8.5		10.1			17.9			18.3
Income tax expense		1.7		3.7			5.3			6.9
Net income	$	6.8	$	6.4		$	12.6		$	11.4
Earnings per common share, basic:	$	0.27	$	0.25		$	0.50		$	0.45
Earnings per common share, diluted:	$	0.26	$	0.25		$	0.49		$	0.45

AFC Enterprises, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(In millions)
	28 Weeks Ended
		7/11/2010			7/12/2009
Cash flows provided by (used in) operating activities:
Net income	$	12.6		$	11.4
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		2.1			2.7
Asset write-downs		0.2			0.2
Net gain on sale of assets		(0.3	)		(3.0	)
Deferred income taxes		0.2			0.8
Non-cash interest expense, net		1.1			0.4
Provision for credit losses		(0.2	)		0.3
Stock-based compensation expense		1.2			1.0
Change in operating assets and liabilities:
Accounts receivable		0.8			0.1
Other operating assets		(0.4	)		1.1
Accounts payable and other operating liabilities		(2.4	)		(1.4	)
Net cash provided by operating activities		14.9			13.6
Cash flows provided by (used in) investing activities:
Capital expenditures		(1.4	)		(0.5	)
Proceeds from dispositions of property and equipment		-			7.7
Proceeds from notes receivable and other		2.2			0.8
Net cash provided by investing activities		0.8			8.0
Cash flows provided by (used in) financing activities:
Principal payments - 2005 Credit Facility (term loan)		(14.9	)		(3.7	)
Principal payments - 2005 revolving credit facility		-			(0.5	)
Other financing activities, net		(0.3	)		(0.5	)
Net cash used in financing activities		(15.2	)		(4.7	)
Net increase in cash and cash equivalents		0.5			16.9
Cash and cash equivalents at beginning of year		4.1			2.1
Cash and cash equivalents at end of quarter	$	4.6		$	19.0

Total Same-Store Sales	Q2 Ended 7/11/2010		Q2 Ended 7/12/2009		Year-to-date 7/11/2010		Year-to-date 7/12/2009
Company-operated	0.3	%	1.8	%	0.2	%	(1.8	%)
Franchised ^a	0.4	%	4.4	%	(0.1	%)	1.8	%
Total Domestic	0.4	%	4.3	%	(0.1	%)	1.7	%
International ^b	2.7	%	3.9	%	1.9	%	4.4	%
Global	0.6	%	4.3	%	0.1	%	1.9	%
Total Franchised ^(a and b)	0.6	%	4.3	%	0.1	%	2.1	%
New Unit Openings
Company-operated	0		0		0		0
Franchised	6		5		11		10
Total Domestic	6		5		11		10
International	11		11		23		20
Global	17		16		34		30
Unit Count
Company-operated	37		37		37		37
Franchised	1,533		1,531		1,533		1,531
Total Domestic	1,570		1,568		1,570		1,568
International	375		337		375		337
Global	1,945		1,905		1,945		1,905

Management’s Use of Non-GAAP Financial Measures

EBITDA: Calculation and Definition

The Company defines EBITDA as “earnings before interest expense, taxes, depreciation and amortization”. The following table reconciles on a historical basis for second quarter year-to-date of 2010 and second quarter year-to-date of 2009, the Company’s earnings before interest expense, taxes, depreciation and amortization (“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 to EBITDA:

(dollars in millions)	Year-to-date 7/11/2010			Year-to-date 7/12/2009
Net income	$	12.6		$	11.4
Interest expense, net	$	4.5		$	3.0
Income tax expense	$	5.3		$	6.9
Depreciation and amortization	$	2.1		$	2.7
EBITDA	$	24.5		$	24.0
Total Revenue	$	78.1		$	83.6
EBITDA as a percentage of Total Revenue (EBITDA margin)		31.4	%		28.7	%

Free cash flow: Calculation and Definition

The Company defines Free Cash Flow as net income plus depreciation and amortization, plus stock compensation expense, minus maintenance capital expenses (which includes: for second quarter year-to-date of 2010 $0.5 million for restaurant re-image projects, and $0.5 million in other capital assets to maintain, replace and extend the lives of company-operated QSR equipment and facilities; and for second quarter year-to-date of 2009 $0.4 million in other capital assets to maintain, replace and extend the lives of company-operated QSR equipment and facilities). The following table reconciles on a historical basis for second quarter year-to-date of 2010 and second quarter year-to-date of 2009, the Company’s free cash flow 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 to free cash flow:

(dollars in millions)	Year-to-date 7/11/2010			Year-to-date 7/12/2009
Net income	$	12.6		$	11.4
Depreciation and amortization	$	2.1		$	2.7
Stock compensation expense	$	1.2		$	1.0
Maintenance capital expenses	$	(1.0	)	$	(0.4	)
Free cash flow	$	14.9		$	14.7
Total Revenue	$	78.1		$	83.6
Free cash flow as a percentage of Total Revenue (Free cash flow margin)		19.1	%		17.6	%

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 (i) other income, net (which for second quarter 2010 includes $0.1 million for impairments and disposals of fixed assets and $0.1 million for net gain on sales of assets; and for second quarter year-to-date 2010 includes $0.2 million for impairments and disposals of fixed assets and $0.3 million for net gain on sales of assets; and for second quarter 2009 includes $2.9 million for net gain on sales of assets; and for second quarter year-to-date 2009 includes $0.2 million for impairments and disposals of fixed assets, $3.0 million for net gain on sales of assets, and $0.3 million for other costs), (ii) the tax effect of these adjustments, and (iii) the tax audit benefit. 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 second quarter 2010, second quarter year-to-date of 2010, second quarter 2009, and second quarter year-to-date of 2009, 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 to adjusted earnings per diluted share:

(in millions, except per share data)	Q2 2010			Q2 2009			Year-to-date 7/11/2010			Year-to-date 7/12/2009
Net income	$	6.8		$	6.4		$	12.6		$	11.4
Other expense (income), net		-		$	(2.9	)	$	(0.1	)	$	(2.5	)
Tax effect		-		$	1.1		$	0.1		$	0.9
Tax audit benefit		($1.4	)		-			($1.4	)		-
Adjusted net income	$	5.4		$	4.6		$	11.2		$	9.8
Adjusted earnings per diluted share	$	0.21		$	0.18		$	0.44		$	0.39
Weighted-average diluted shares outstanding		25.5			25.3			25.4			25.3

Management’s Use of Non-GAAP Financial Measures

EBITDA, free cash flow and adjusted earnings per diluted share are supplemental non-GAAP financial measures. The Company uses EBITDA, free cash flow and adjusted earnings per diluted share, 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 performance of its business because they provide a link between profitability and operating cash flow. EBITDA, free cash flow and adjusted earnings per diluted share as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. In addition, EBITDA, free cash flow and adjusted earnings per diluted share: (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.

Forward-Looking Statement: Certain statements in this 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, the Company’s plan to own and operate its current company-operated restaurants, projections and expectations regarding same-store sales for fiscal 2010 and beyond, the Company’s ability to improve restaurant level margins, guidance for new restaurant openings and closures, and the Company’s anticipated 2010 and long-term performance, including projections regarding general and administrative expenses, and net 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 credit facility, our ability to comply with the repayment requirements, covenants, tests and restrictions contained in our 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 our 2009 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.