OAKVILLE, ON, Mar. 8, 2010 (Canada NewsWire Group) -- /CNW/ -- (TSX: THI, NYSE: THI): Tim Hortons outlined our 2010 and four-year (2010 to 2013) strategic objectives and expectations in our 2009 Annual Report on Form 10-K filed on March 4th, 2010, and in a news release issued prior to an investor conference on March 5th. We are reproducing below our 2010 and four-year strategic plan objectives as disclosed in the Form 10-K to address certain media misreporting subsequent to the conference pertaining to restaurant development.
The Company's 2010 operational objectives (See Accompanying Notes)
In support of the initiatives outlined [in the 2009 Annual Report on Form 10-K] for 2010, we have established the following objectives:
- we are targeting same-store sales growth of 3% to 5% in Canada and 2%
to 4% in the U.S.;
- we expect to open a total of 170 to 210 restaurant locations. Of these
openings, we are planning to open 130 to 150 restaurants in Canada and
40 to 60 locations in the U.S. The majority of these locations will be
standard restaurants. The targeted openings also include non-standard
locations in both markets;
- we plan to work together with our franchisees to convert up to
60 Tim Hortons locations to include Cold Stone Creamery, and we expect
to convert between 15 to 20 existing restaurants in the U.S. to the
co-branded Cold Stone Creamery concept. In addition, of our total
planned 40 to 60 new restaurant openings in the U.S., we expect that
between 10 to 15 will be opened as co-branded Tim Hortons and Cold
Stone Creamery locations;
- we plan to test approximately 10 new concept restaurants in certain
U.S. markets, as described [in the 2009 Annual Report on Form 10-K];
- we plan to pilot new Canadian development models, as described [in the
2009 Annual Report on Form 10-K].
2010 Financial Outlook (See Accompanying Notes)
Based on our strategic and operational plans, we have established the following 2010 financial targets:
- EPS of $1.95 to $2.05;
- Operating income growth of 8% to 10% (52-week basis)(2);
- Tax rate of approximately 32%; and
- Capital expenditures of $180 million to $200 million.
Long-Term Aspirations (See Accompanying Notes)
- EPS: long-term aspirational earnings per share (EPS) compounded annual
growth beyond 2010 and through 2013 is expected to be between 12% to
- New restaurant development from 2010 to 2013:
- Canada: approximately 600;
- U.S.: approximately 300; and
- Total North America: approximately 900.
(1) (Intentionally deleted, not referenced)
(2) Operating income year-over-year growth rate for 2010 is based on 52 weeks to remove the benefit from 2009 of approximately 1.5% associated with 53 weeks of operations in 2009.
(3) The operational objectives, financial outlook, and aspirational goals (collectively, "targets") established for 2010 and long-term EPS growth are based on the accounting, tax, and other legislative rules in place at the time the targets were issued and on the continuation of share repurchase programs relatively consistent with historical levels. The impact of future changes in accounting, tax and/or other legislative rules that may or may not become effective in fiscal 2010 and future years, changes to our share repurchase activities, and other matters not contemplated at the time the targets were established that could affect our business, are not included in the determination of these targets. In addition, the targets are forward-looking and are based on our expectations and outlook on, and shall be effective only as of, the date the targets were originally issued. Except as required by applicable securities laws, we do not intend to update these targets. You should refer to the Company's public filings for any reported updates. These targets and our performance generally are subject to various risks and uncertainties and are based on certain underlying assumptions, set forth in Item 1A of (the 2009) Annual Report on Form 10-K, which may impact future performance and our achievement of these targets.
Safe Harbor Statement
Certain information in this news release, particularly information regarding future expectations and objectives of management, constitute forward-looking information within the meaning of Canadian securities laws and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We refer to all of these as forward-looking statements. Various factors including competition in the quick service segment of the food service industry, general economic conditions and others described as "risk factors" in the Company's 2009 Annual Report on Form 10-K, filed March 4th, 2010 with the U.S. Securities and Exchange Commission and Canadian securities regulators, could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. As such, readers are cautioned not to place undue reliance on forward-looking statements contained in this news release, which speak only as of the date hereof. Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about: the absence of a material increase in competition within the quick service restaurant segment of the food service industry; the absence of an adverse event or condition that damages our strong brand position and reputation; continuing positive working relationships with the majority of the Company's franchisees; there being no significant change in the Company's ability to comply with current or future regulatory requirements; the absence of any material adverse effects arising as a result of litigation; and general worldwide economic conditions. We are presenting this information for the purpose of informing you of management's current expectations regarding these matters, and this information may not be appropriate for any other purpose. We assume no obligation to update or alter any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law. Please review the Company's Safe Harbor Statement at www.timhortons.com/en/about/safeharbor.html.
Tim Hortons Inc. Overview
Tim Hortons is the fourth largest publicly-traded restaurant chain in North America based on market capitalization, and the largest in Canada. Operating in the quick service segment of the restaurant industry, Tim Hortons appeals to a broad range of consumer tastes, with a menu that includes premium coffee, flavored cappuccinos, specialty teas, home-style soups, fresh sandwiches, wraps, hot breakfast sandwiches and fresh baked goods, including our trademark donuts. As of January 3rd, 2010, Tim Hortons had 3,578 systemwide restaurants, including 3,015 in Canada and 563 in the United States. More information about the Company is available at www.timhortons.com.