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Wendy's/Arby's Group, Inc. Reports 2nd Quarter 2009 Results.

Article Excerpt
Wendy's Restaurant Margin Improved 370 Basis Points

Key Profit Drivers Remain on Track

Board Authorized a Stock Repurchase Program

ATLANTA -- Wendy's/Arby's Group, Inc. (NYSE: WEN), the third largest quick-service restaurant company in the United States, today reported results for the second quarter ended June 28, 2009. These results include the effect of the September 29, 2008 merger between Triarc Companies, Inc. ("Triarc") and Wendy's International, Inc. The results for the 2008 second quarter and year-to-date periods only include results for Triarc, except where presented on a pro-forma basis.

Second-Quarter and Year-to-Date Highlights

* Wendy's[R] North America systemwide same-store sales were approximately flat (a decrease of 0.4%). Wendy's company-operated restaurant margin improved 370 basis points compared to the second quarter a year ago.

* Arby's[R] North America systemwide same-store sales decreased 6.9% and reflected an improved trend from the first quarter of 2009. Arby's company-operated restaurant margin decreased 100 basis points compared to the second quarter a year ago.

* Consolidated revenues were $913 million in the second quarter and $1.8 billion year-to-date.

* Second quarter 2009 adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA")1, excluding pre-tax integration-related costs of $7.3 million, was $117.2 million, and increased 13.2% as compared to pro-forma 2008 second quarter adjusted EBITDA of $103.5 million.

* Year-to-date adjusted EBITDA, excluding pre-tax integration-related costs of $15.1 million, was $197.5 million, and increased 10.6% as compared to pro-forma 2008 year-to-date adjusted EBITDA of $178.5 million.

* Second quarter 2009 net income was $14.9 million, or $0.03 per share, including after-tax special charges of $12.4 million, or $0.03 per share. Year-to-date net income was $4.0 million, or $0.01 per share, including after-tax special charges of $27.4 million, or $0.06 per share.

Roland Smith, President and Chief Executive Officer of Wendy's/Arby's Group, stated: "We were pleased with our strong adjusted EBITDA growth for the quarter of 13.2%. We produced significant margin improvement of 370 basis points at Wendy's and Arby's continued to show improvement despite aggressive competitive discounting. We remain on track with our key profit drivers to deliver $100 million in restaurant margin improvement at Wendy's and $60 million in general and administrative ("G&A") savings by the end of 2011 as we continue to effectively manage costs and achieve efficiencies."

Smith added: "Beyond our key profit drivers, we see significant future revenue opportunities for our company, including international expansion, dual branding development and breakfast, which can substantially enhance shareholder value."

Wendy's Brand Highlights

For the second quarter, Wendy's sales were $539.1 million from company-operated restaurants and franchise revenues were $76.1 million. Total revenue was $615.2 million compared to pro-forma revenue of $632.2 million in the second quarter a year ago, which was a year-over-year decrease of $17.0 million primarily due to the effect of foreign exchange rates, lower same-store sales due to the reduction in the number of company-operated restaurants serving breakfast and fewer restaurants.

* Wendy's North America company-operated same-store sales decreased 1.2%, which included the effect of approximately 300 fewer Wendy's...