Wendy's International, Inc. Announces 2008 Second Quarter Results



    
    - Company generated continuing operations net income of $19.9 million and
    EBITDA of $69.0 million

    - Company produced continuing operations adjusted net income of $26.1
    million and adjusted EBITDA of $79.1 million

    - Quarterly U.S. same-store sales were positive

    
    DUBLIN, Ohio, Aug. 5 /CNW/ -- Wendy's International, Inc. (NYSE:   WEN)
today announced its financial results for the second quarter of 2008, which
ended on Sunday, June 29.
    
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20080104/CLF020LOGO )
    
    -- Earnings before interest, taxes, depreciation and amortization
(EBITDA) from continuing operations of $69.0 million, compared to $84.7
million for the second quarter of 2007;
    -- Income from continuing operations of $19.9 million, compared to $29.3
million for the second quarter of 2007; and
    -- Diluted earnings per share (EPS) from continuing operations of $0.22,
compared to $0.33 for the second quarter of 2007.
    These results include 2008 pre-tax expenses related to the Board of
Directors' Special Committee of $8.6 million and $1.5 million of restructuring
charges, and include 2007 pre-tax Special Committee expenses of $4.7 million
and restructuring charges of $5.9 million.
    Excluding 2008 and 2007 expenses related to the Special Committee and
restructuring charges, the Company reported for the second quarter of 2008:
    -- Adjusted EBITDA from continuing operations of $79.1 million, compared
to $95.3 million for the second quarter of 2007;
    -- Adjusted income from continuing operations of $26.1 million, compared
to $35.9 million for the second quarter of 2007; and
    -- Adjusted diluted EPS from continuing operations of $0.30, compared to
$0.41 for the second quarter of 2007.


    
                           Including expenses            Excluding expenses(i)
                        2Q 2008        2Q 2007        2Q 2008        2Q 2007
    Income from
     continuing
     operations     $19.9 million  $29.3 million  $26.1 million  $35.9 million
    Diluted EPS
     from continuing
     operations     $0.22          $0.33          $0.30          $0.41
    EBITDA from
     continuing
     operations     $69.0 million  $84.7 million  $79.1 million  $95.3 million
    

    
    (i) See reconciliations below.  Adjusted income from continuing
        operations, EBITDA and EPS excludes expenses related to the Board's
        Special Committee and restructuring charges.
    
    There were several items affecting the comparability of 2008 second-
quarter adjusted results to a year ago, including higher commodity costs of
approximately $11 million, which were 220 basis points higher as a percentage
of sales in the U.S., compared to a year ago, due primarily to rising grain
and fuel prices. Profits were also impacted by higher 2008 breakfast
investments of $4.7 million.  Also, in 2007 the Company recorded $4.5 million
in insurance proceed settlement gains for damages incurred due to Hurricane
Katrina.  There was no similar insurance settlement in 2008.
    Wendy's(R) Chief Executive Officer and President Kerrii Anderson said:
"We generated nearly $80 million in adjusted EBITDA and achieved slightly
positive same-store sales during the quarter in a challenging operating
environment. We are working to build on our performance in the second half of
2008 as we finalize our merger with Triarc.  Our highest priority is to drive
transactions and profitable same-store sales with a balance of premium
products, like our Baconator(R) and Frosty(TM) Shakes, and enhancements to our
value menu for consumers. We are also working on menu management and supply
chain initiatives to offset soaring commodity costs that are affecting Wendy's
and the restaurant industry."
    Anderson added: "As we look to complete our merger with Triarc, everyone
in our organization is focused on improving business going forward.  We are
committed to innovation and continue to focus on our quality heritage by
spotlighting our fresh beef, premium chicken, new Frosty shakes and new
salads. In the second quarter, we launched our new "Waaaay Better" marketing
campaign and are pleased to report it is gaining high awareness among
consumers.  Finally, we have been focused on strengthening relations with our
franchisees and open communications with our employees, and we continue to
work constructively with Triarc to develop a comprehensive integration plan
and organizational structure that will support enhanced operating performance
at both Wendy's and Arby's."
    Due to the pending merger with Triarc, management does not plan to
provide detailed earnings guidance or a commodity outlook for the remainder of
2008. In addition, management does not plan to hold a conference call to
discuss second-quarter results.
    
    Product promotions highlight Wendy's premium quality
    
    This month, the Company is featuring its premium Baconator hamburger and
popular Frosty Shakes, with a promotion highlighting Wendy's signature Frosty
brand and its hot and juicy hamburgers.
    Wendy's is currently testing several additions to its breakfast menu,
including a new Mornin' Melt(TM) Panini, a premium breakfast sandwich that's
grilled fresh on sourdough bread, and a new hand-crafted cinnamon roll served
warm with vanilla icing.
    In July, the Company re-launched its premium salad lineup with national
advertising, featuring the transition from cold chicken to a warm chicken
fillet available in three varieties - Grilled, Homestyle, or Spicy - on its
entree salads.
    During the second quarter, Wendy's introduced its new Frosty Shakes,
which are hand-spun in three flavors: Vanilla Bean, Chocolate Fudge and
Strawberry. The shakes highlight Wendy's commitment to quality, using syrups
made from real vanilla beans, five kinds of cocoa and real strawberries. 
Wendy's offered for a limited-time in May its premium Southwest Chicken Caesar
Salad. Also, the Company launched its new Chicken Go Wraps, featuring a
center-cut, chicken breast fillet - available Grilled, Homestyle, or Spicy -
with cheddar cheese, fresh lettuce and Ranch or Honey Mustard sauce wrapped in
a warm flour tortilla.
    In addition, Wendy's raised more than $1.7 million dollars during its
annual Father's Day Frosty Weekend event in June to support the Dave Thomas
Foundation for Adoption.  This includes about $260,000 raised in Wendy's
Canadian restaurants.
    
    Safe Harbor statement
    
    Certain information in this news release, particularly information
regarding future economic performance and finances, and plans, expectations
and objectives of management, is forward looking.  Factors set forth in our
Safe Harbor under the Private Securities Litigation Reform Act of 1995, in
addition to other possible factors not listed, could affect the Company's
actual results and cause such results to differ materially from those
expressed in forward-looking statements.
    Please review the Company's Safe Harbor statement at
http://www.wendys-invest.com/safeharbor .
    
    Wendy's International, Inc. overview
    
    Wendy's International, Inc. is one of the world's largest and most
successful restaurant operating and franchising companies.  More information
about the Company is available at www.wendys-invest.com .
    
    Pending Merger
    
    In connection with the proposed  merger, Triarc filed an amended
Registration Statement on Form S-4 on August 4, 2008 with the SEC
(Registration No. 333-151336) that includes a preliminary joint proxy
statement of Triarc and Wendy's and that also constitutes a preliminary
prospectus of Triarc. Before making any voting decision, Triarc and Wendy's
urge investors and security holders to read the definitive joint proxy
statement/final prospectus regarding the proposed merger when it becomes
available because it will contain important information. Triarc and Wendy's
each will mail the definitive proxy statement/final prospectus to its
stockholders.  You may obtain copies of all documents filed with the SEC
regarding this transaction, free of charge, at the SEC's website
(www.sec.gov). You may also obtain these documents, free of charge, from
Triarc's website (www.triarc.com ) under the heading "Investor Relations" and
then under the item "SEC Filings and Annual Reports." You may also obtain
these documents, free of charge, from Wendy's website (www.wendys.com) under
the tab "Investors" and then under the heading "SEC Filings."
    Triarc, Wendy's and their respective directors, executive officers and
certain other members of management and employees may be soliciting proxies
from Triarc and Wendy's stockholders in favor of the stockholder approvals
required in connection with the merger.  Information regarding the persons who
may, under the rules of the SEC, be considered participants in the
solicitation of the Triarc and Wendy's stockholders in connection with the
stockholder approvals required in connection with the proposed merger is set
forth in the proxy statement/prospectus contained in the above-referenced
Registration Statement on Form S-4. You can find information about Triarc's
executive officers and directors in its Amendment No. 2 to its Form 10-K filed
with the SEC on April 25, 2008. You can find information about Wendy's
executive officers and directors in its Amendment No. 1 to its Form 10-K filed
with the SEC on April 28, 2008. Additional information about Triarc's
executive officers and directors and Wendy's executive officers and directors
can be found in the above-referenced Registration Statement on Form S-4. You
can obtain free copies of these documents from Triarc and Wendy's using the
contact information above.
    
    Appendix
    2nd Quarter Financial Information
    
    The Company reported retail sales of $556.1 million in the second quarter
of 2008, compared to $558.3 million in the second quarter of 2007.  The
Company had 42 fewer company-operated restaurants open at the end of the
second quarter compared to the same quarter a year ago.  During the quarter,
the Company sold 14 stores to franchisees.
    -- The total number of system-wide Wendy's restaurants as of June 29,
2008, was 6,625, compared to 6,661 as of the end of the same quarter a year
ago.
    -- U.S. company-operated restaurant EBITDA margins were 9.4% in the
second quarter of 2008, compared to 12.1% in the second quarter of 2007.  The
year- over-year difference is due primarily to higher commodity costs, lower
transactions and higher breakfast expense, partially offset by menu price
increases.
    -- Total company-operated restaurant EBITDA margins were 9.3% in the
second quarter of 2008, compared to 11.8% one year ago.
    -- As previously announced, second-quarter same-store sales at U.S.
company-operated restaurants increased 0.1%, compared to an increase of 0.7%
in the second quarter of 2007.  Second-quarter same-store sales at U.S.
franchise restaurants increased 1.1%, compared to an increase of 0.4% in the
second quarter of 2007.
    
    The Company's results from continuing operations include the impact of:
    
    -- Franchise revenues - $75.8 million in the second quarter of 2008,
compared to $74.6 million in the second quarter of 2007.
    -- Cost of sales - $345.4 million, or 62.1% of retail sales, in the
second quarter of 2008, compared to $337.2 million, or 60.4% of retail sales,
in the second quarter of 2007. The year-over-year difference is due primarily
to increased commodity costs (up 220 basis points in the U.S. as a percentage
of sales) and a decline in transactions, partially offset by menu price
increases.
    -- Company restaurant operating costs - $156.2 million, or 28.1% of
sales, in the second quarter of 2008, compared to $152.4 million, or 27.3% of
sales, in the second quarter of 2007.  The year-over-year difference as a
percentage of sales includes investments related to the Company's new
breakfast program and other cost increases.
    -- Operating costs - $8.1 million in the second quarter of 2008, compared
to $4.9 million in the second quarter of 2007.  The year-over-year increase is
due primarily to higher franchise incentives of $0.8 million and higher
breakfast advertising support for franchisees of $2.3 million.
    -- General and administrative expense - $45.3 million, or 7.2% of
revenue, in the second quarter of 2008, compared to $51.4 million, or 8.1% of
revenue, in the second quarter of 2007.  The year-over-year difference
includes lower product testing costs, lower bonus accruals and lower
professional and legal fees.
    -- Restructuring costs - $1.5 million in the second quarter of 2008. 
This compares to $5.9 million in restructuring costs in the second quarter of
2007.
    -- Special Committee related charges - $8.6 million in the second quarter
of 2008 in expenses related to the Board's Special Committee, compared to $4.7
million in the second quarter of 2007.  The Company announced the formation of
the Special Committee on April 26, 2007.
    -- Other income/expense - $2.0 million of income in the second quarter of
2008, compared to $8.0 million of income in the second quarter of 2007.  The
year-over-year change is due primarily to 2007 insurance proceed settlement
gains of $4.5 million for damages incurred due to Hurricane Katrina.  There
was no similar insurance settlement in 2008.
    -- Interest - Interest expense of $9.0 million in the second quarter of
2008, compared to $10.9 million in the second quarter of 2007.  The year-over-
year decrease reflects the retirement of the debt associated with the sale of
approximately 40% of the 2007 U.S. royalty stream.  Interest income of $1.8
million in the second quarter of 2008, compared to $2.6 million a year ago,
reflects a decrease in interest rates as well as lower cash balances.
    -- Taxes - The Company's second-quarter tax rate was 37.5%.  This
compares to 38.2% in the second quarter of 2007.


    
    Second-Quarter Average Same-Store Sales Summary
    

    
                                          2Q 2008              2Q 2007
    U.S. Company                            0.1 %               0.7 %
    U.S. Franchise                          1.1 %               0.4 %
    


    
    Monthly Average Same-Store Sales Summary for April, May and June
    

    
                   Apr 2008  Apr 2007  May 2008   May 2007 Jun 2008  Jun 2007
    U.S. Company      0.2 %     0.6 %    -0.7 %      0.9 %    0.7 %     0.6 %
    U.S. Franchise    1.1 %     0.5 %     0.4 %      0.5 %    2.0 %     0.0 %
    Disclosure regarding non-GAAP financial measures
    
    The Company uses adjusted income and adjusted EPS from continuing
operations as internal measures of operating performance.  Management believes
adjusted income and adjusted EPS from continuing operations provide a
meaningful perspective of the underlying operating performance of the
business.
    EBITDA is used by management as a performance measure for benchmarking
against its peers and competitors. The Company believes EBITDA is useful to
investors because it is frequently used by securities analysts, investors and
other interested parties to evaluate companies in the restaurant industry.
EBITDA is not a recognized term under GAAP.
    The Company also uses adjusted EBITDA, which accounts for certain items
unrelated to ongoing operations, as an internal measure of business operating
performance.  Management believes adjusted EBITDA provides a meaningful
perspective of the underlying operating performance of the business.
    Company EBITDA margins from continuing operations consist of operating
income plus depreciation and amortization divided by revenue.
    Company-operated restaurant EBITDA margins consist of sales from company-
operated restaurants minus cost of sales from company-operated restaurants
minus company restaurant operating costs divided by sales from company-
operated restaurants.
    
    EBITDA and Adjusted EBITDA Reconciliations
    
    The following are reconciliations of 2008 and 2007 second-quarter
reported operating income to second-quarter EBITDA from continuing operations
and adjusted EBITDA:
    
                                        2nd Quarter         2nd Quarter
                                           2008                2007
    Reported operating income         $ 39.0 million      $ 55.7 million
    Depreciation and amortization     $ 30.0 million      $ 29.0 million
        EBITDA from continuing ops    $ 69.0 million      $ 84.7 million
    Restructuring charges             $  1.5 million      $  5.9 million
    Special Committee expenses        $  8.6 million      $  4.7 million
        Adjusted EBITDA from          $ 79.1 million      $ 95.3 million
         continuing ops
    


    
    Income and EPS Reconciliations
    
    The following are reconciliations of 2008 and 2007 second-quarter income
from continuing operations to second-quarter adjusted income from continuing
operations:
    
                                                  2nd Quarter     2nd Quarter
                                                     2008              2007
    Income from continuing operations           $ 19.9 million  $ 29.3 million
    Restructuring charges, net of tax (1)       $  0.9 million  $  3.7 million
    Special Committee expenses, net of tax (1)  $  5.3 million  $  2.9 million
       Adjusted income from continuing ops      $ 26.1 million  $ 35.9 million
    Diluted shares                                88.5 million    88.3 million
    Adjusted diluted EPS from continuing ops     $0.30           $0.41
    

    
    (1) After tax amounts are computed using a tax rate of 38%.
    



    
                   WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands, except per share data)
    

    
                                            (Unaudited)
    

    
                                        Second Quarter Ended
                                       06/29/2008 07/01/2007 $ Change % Change
                                       ---------- ---------- -------- --------
    

    
      REVENUES
      Sales                              $556,085  $558,312  ($2,227)   -0.4%
      Franchise revenues                   75,838    74,600    1,238     1.7%
                                       ---------- ---------- -------- --------
      TOTAL REVENUES                      631,923   632,912     (989)   -0.2%
                                       ---------- ---------- -------- --------
    

    
      COSTS & EXPENSES
      Cost of sales                       345,373   337,177    8,196     2.4%
      Company restaurant operating costs  156,205   152,405    3,800     2.5%
      Operating costs                       8,076     4,852    3,224    66.4%
      Depreciation of property &
       equipment                           29,886    28,749    1,137     4.0%
      General & administrative expenses    45,310    51,391   (6,081)  -11.8%
      Restructuring and special
       committee related charges           10,053    10,605     (552)   -5.2%
      Other income, net                    (2,005)   (8,011)   6,006   -75.0%
                                       ---------- ---------- -------- --------
      TOTAL COSTS & EXPENSES              592,898   577,168   15,730     2.7%
                                       ---------- ---------- -------- --------
    

    
      OPERATING INCOME                     39,025    55,744  (16,719)  -30.0%
    

    
      Interest expense                     (8,998)  (10,898)   1,900    17.4%
      Interest income                       1,837     2,551     (714)  -28.0%
                                       ---------- ---------- -------- --------
    

    
      INCOME FROM CONTINUING OPERATIONS
       BEFORE INCOME TAXES                 31,864    47,397  (15,533)  -32.8%
    

    
      INCOME TAXES                         11,948    18,115   (6,167)  -34.0%
                                       ---------- ---------- -------- --------
    

    
      INCOME from continuing operations   $19,916   $29,282  ($9,366)  -32.0%
    

    
      LOSS from discontinued operations        $0      ($49)     $49  -100.0%
                                       ---------- ---------- -------- --------
    

    
      NET INCOME                          $19,916   $29,233  ($9,317)  -31.9%
                                       ========== ========== ======== ========
    

    
      Diluted earnings per common share
       from continuing operations           $0.22     $0.33   ($0.11)
                                       ========== ========== ========
    

    
      Diluted earnings per common share
       from discontinued operations         $0.00    ($0.00)   $0.00
                                       ========== ========== ========
      Total diluted earnings per common
       share                                $0.22     $0.33   ($0.11)
                                       ========== ========== ========
      Diluted shares                       88,540    88,316
                                       ========== ==========
    



    
                   WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands, except per share data)
    

    
                                        (Unaudited)
    

    
                                      Year-to-Date Ended
                                    06/29/2008  07/01/2007  $ Change % Change
                                    ----------  ----------  -------- --------
      REVENUES
      Sales                         $1,069,102  $1,081,256 ($12,154)   -1.1%
      Franchise revenues               145,012     141,820    3,192     2.3%
                                    ----------  ---------- --------- --------
      TOTAL REVENUES                 1,214,114   1,223,076   (8,962)   -0.7%
                                    ----------  ---------- --------- --------
    

    
      COSTS & EXPENSES
      Cost of sales                    665,203     661,238    3,965     0.6%
      Company restaurant operating
       costs                           307,449     304,793    2,656     0.9%
      Operating costs                   14,920       8,787    6,133    69.8%
      Depreciation of property &
       equipment                        58,692      56,801    1,891     3.3%
      General & administrative
       expenses                         98,546     102,213   (3,667)   -3.6%
      Restructuring and special
       committee related charges        16,916      11,636    5,280    45.4%
      Other income, net                   (551)     (6,693)   6,142   -91.8%
                                    ----------  ---------- --------- --------
      TOTAL COSTS & EXPENSES         1,161,175   1,138,775   22,400     2.0%
                                    ----------  ----------  -------- --------
    

    
      OPERATING INCOME                  52,939      84,301  (31,362)  -37.2%
    

    
      Interest expense                 (18,105)    (23,105)   5,000    21.6%
      Interest income                    3,991       7,967   (3,976)  -49.9%
    

    
      INCOME FROM CONTINUING
       OPERATIONS BEFORE
       INCOME TAXES                     38,825      69,163  (30,338)  -43.9%
    

    
      INCOME TAXES                      14,766      25,400  (10,634)  -41.9%
                                    ----------  ---------- --------- --------
    

    
      INCOME from continuing
       operations                      $24,059     $43,763 ($19,704)  -45.0%
    

    
      INCOME from discontinued
       operations                           $0        $157    ($157) -100.0%
                                    ----------  ---------- --------- --------
    

    
      NET INCOME                       $24,059     $43,920 ($19,861)  -45.2%
                                    ==========  ========== ========= ========
    

    
      Diluted earnings per common
       share from continuing
       operations                        $0.27       $0.48   ($0.21)
                                    ==========  ========== =========
      Diluted earnings per common
       share from discontinued
       operations                        $0.00       $0.00   ($0.00)
                                    ==========  ========== =========
      Total diluted earnings per
       common share                      $0.27       $0.48   ($0.21)
                                    ==========  ========== =========
      Diluted shares                    88,412      92,011
                                    ==========  ==========
    



    
                  WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
    

    
                                                  June 29,        December 30,
                                                    2008              2007
                                              -------------     -------------
                                                         (Unaudited)
                                                     (Dollars in thousands)
    ASSETS
    

    
    Current assets
      Cash and cash equivalents                   $221,916          $211,200
      Accounts receivable, net                      73,195            72,069
      Deferred income taxes                          9,876             7,304
      Inventories and other                         32,034            29,590
      Advertising fund restricted assets            52,337            42,665
      Assets held for disposition                    4,566             3,338
                                              -------------     -------------
                                                   393,924           366,166
                                              -------------     -------------
    

    
    Property and equipment                       2,138,102         2,119,140
      Accumulated depreciation                    (903,458)         (872,255)
                                              -------------     -------------
                                                 1,234,644         1,246,885
                                              -------------     -------------
    


    
    Goodwill                                        83,923            84,001
    

    
    Deferred income taxes                            5,269             4,899
    

    
    Intangible assets, net                           2,982             2,704
    

    
    Other assets                                    81,062            84,742
                                              -------------     -------------
    

    
                                                $1,801,804        $1,789,397
                                              =============     =============
    



    
                  WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
    

    
                                                June 29,        December 30,
                                                  2008              2007
                                              -------------     -------------
                                                       (Unaudited)
                                                  (Dollars in thousands)
    

    
    LIABILITIES AND SHAREHOLDERS' EQUITY
    

    
    Current liabilities
      Accounts payable                             $77,058           $85,662
      Accrued expenses:
         Salaries and wages                         26,881            39,157
         Taxes                                      33,849            31,033
         Insurance                                  62,722            57,190
         Other                                      55,126            45,612
      Advertising fund restricted liabilities       52,337            35,760
      Current portion of long-term obligations         922            26,591
                                              -------------     -------------
                                                   308,895           321,005
                                              -------------     -------------
    Long-term obligations
      Term debt                                    521,426           521,343
      Capital leases                                21,663            21,680
                                              -------------     -------------
                                                   543,089           543,023
                                              -------------     -------------
    

    
    Deferred income taxes                           53,048            45,351
    Other long-term liabilities                     77,538            75,887
    

    
    Commitments and contingencies
    

    
    Shareholders' equity
      Preferred stock, Authorized:
       250,000 shares
      Common stock, $.10 stated value per
       share,
       Authorized:  200,000,000 shares,
       Issued:  130,940,000 and
        130,241,000 shares, respectively            13,094            13,024
      Capital in excess of stated value          1,125,038         1,110,363
      Retained earnings                          1,290,042         1,287,963
      Accumulated other comprehensive
       income (expense):
       Cumulative translation adjustments
        and other                                   25,431            28,949
       Pension liability                           (17,193)          (18,990)
                                              -------------     -------------
                                                 2,436,412         2,421,309
      Treasury stock at cost: 42,844,000
       shares                                   (1,617,178)       (1,617,178)
                                              -------------     -------------
                                                   819,234           804,131
                                              -------------     -------------
                                                $1,801,804        $1,789,397
                                              =============     =============
    



    
                   WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
                              SYSTEMWIDE RESTAURANTS
    

    
                                               Increase/            Increase/
                          As of       As of   (Decrease)   As of   (Decrease)
                         June 29,   March 30, From Prior  July 1,  From Prior
                           2008       2008     Quarter     2007       Year
                      -------------------------------------------------------
    Wendy's
     U.S.
        Company            1,263      1,267       (4)       1,297       (34)
        Franchise          4,655      4,650        5        4,661        (6)
                      -------------------------------------------------------
                           5,918      5,917        1        5,958       (40)
     Canada
        Company              139        140       (1)         145        (6)
        Franchise            236        237       (1)         231         5
                      -------------------------------------------------------
                             375        377       (2)         376        (1)
     Other International
        Company                0          0        0            2        (2)
        Franchise            332        328        4          325         7
                      -------------------------------------------------------
                             332        328        4          327         5
    

    
    Total Wendy's
        Company            1,402      1,407       (5)       1,444       (42)
        Franchise          5,223      5,215        8        5,217         6
                      -------------------------------------------------------
                           6,625      6,622        3        6,661       (36)
                      =======================================================
    



    
                   WENDY'S INTERNATIONAL, INC.
                   Income Statement Definitions
    

    
    Sales                      Includes sales from company operated
                               restaurants.  Also included are sales of kids'
                               meal toys and the sales to franchisees from
                               Wendy's bun baking facilities.
    

    
    Franchise Revenues         Consists primarily of royalties, rental income,
                               gains from the sales of properties to
                               franchisees and franchise fees.  Franchise fees
                               include charges for various costs and expenses
                               related to establishing a franchisee's
                               business.
    

    
    Cost of Sales              Includes food, paper and labor costs for
                               restaurants.  Also included are the cost of
                               kids' meal toys and cost of goods sold to
                               franchisees from Wendy's bun baking facilities.
    

    
    Company Restaurant         Consists of all costs necessary to manage and
    Operating Costs            operate restaurants, except cost of sales and
                               depreciation.  These include advertising,
                               insurance, maintenance, rent, etc., as well as
                               support costs for personnel directly related to
                               restaurant operations.
    

    
    Operating Costs            Includes rent expense related to properties
                               leased to franchisees and other franchisee
                               related costs such as remodel incentives.  Also
                               includes costs to operate and maintain Wendy's
                               bun baking facilities.
    

    
    General and Administrative Costs that cannot be directly related to
    Expenses                   generating revenue.
    

    
    Restructuring and Special  Includes restructuring costs and costs related
    Committee Related Charges  to the Special Committee of the Board of
                               Directors, which was formed to explore
                               strategic alternatives for the Company.
    

    
    Other Income, net          Includes expenses (income) that are not
                               directly derived from the Company's primary
                               businesses.  This includes income from the
                               Company's investments in joint ventures and
                               other minority investments.  Expenses include
                               store closures, other asset write-offs, and
                               sales of properties to non-franchisees.
    

    
    Income (Loss) from         Reflects net income (loss) from Cafe Express.
    Discontinued Operations

    




For further information:

For further information: INVESTOR CONTACTS: John Barker,
+1-614-764-3044, john_barker@wendys.com, Marsha Gordon, +1-614-764-3019,
marsha_gordon@wendys.com, Kim Messner, +1-614-764-6796,
kim_messner@wendys.com, or MEDIA CONTACTS: Denny Lynch, +1-614-764-3553,
denny_lynch@wendys.com, Bob Bertini, +1-614-764-3327, bob_bertini@wendys.com,
all of Wendy's International, Inc. Web Site: http://www.wendys-invest.com

Organization Profile

WENDY'S INTERNATIONAL, INC.

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