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AFC Enterprises Reports Preliminary Fiscal 2012 Operating Results; Expected To Beat Prior Fiscal 2012 Earnings Guidance

Management’s Use of Non-GAAP Financial Measures

Adjusted Earnings per Diluted Share: Calculation and Definition

The Company calculates fiscal 2012 full year Adjusted Earnings per Diluted Share by excluding (i) $0.5 million in other income, net, and (ii) $0.5 million in legal fees related to licensing arrangements.

The Company defines Adjusted Earnings for fiscal 2011 as the Company's reported net income after adjusting for certain non-operating items consisting of: (i) $0.8 million in expenses for the Global Service Center relocation, and $0.5 million in impairments and disposals of fixed assets offset by a $0.8 net gain on the sale of assets; (ii) accelerated depreciation of $0.5 million related to the Company’s relocation to a new Global Service Center; and (iii) the tax effect of such adjustments. Adjusted Earnings per Diluted Share provides the per share effect of Adjusted Earnings on a diluted basis. The following table reconciles on a historical basis for fiscal year 2011, 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 on its Condensed Consolidated Statement of Operations to Adjusted Earnings per Diluted Share:
(in millions, except per share data)     Fiscal 2011
Net income     $ 24.2
Other expense (income), net 0.5
Accelerated depreciation related to the Company’s relocation to a new Global Service Center 0.5
Tax effect       (0.5 )
Adjusted earnings     $ 24.7  
Adjusted earnings per diluted share     $ 0.99  
Weighted average diluted shares outstanding       25.0  

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, including domestic and international growth, and the Company’s anticipated 2012 and long-term performance including projections regarding general and administrative expenses, EPS and adjusted EPS 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 restaurants, a decline in our ability to franchise new restaurants, 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 2011 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.

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