Fourth Quarter 2011 Earnings Call March 1, 2012 ©2012 Oldemark LLC Exhibit 99.1 |
JOHN BARKER CHIEF COMMUNICATIONS OFFICER |
TODAY’S AGENDA The Wendy’s Company Financial Update Steve Hare CEO Overview Emil Brolick Q&A Session 3 |
Forward-Looking Statements and Non-GAAP Financial Measures This presentation, and certain information that management may discuss in connection with this presentation, contains certain statements that are not historical facts, including information concerning possible or assumed future results of our operations. Those statements constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (The “Reform Act”). For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Reform Act. Many important factors could affect our future results and could cause those results to differ materially from those expressed in or implied by our forward-looking statements. Such factors, all of which are difficult or impossible to predict accurately, and many of which are beyond our control, include but are not limited to those identified under the caption “Forward-Looking Statements” in our news release issued on March 1, 2012 and in the “Special Note Regarding Forward-Looking Statements and Projections” and “Risk Factors” sections of our most recent Form 10-K / Form 10-Qs. In addition, this presentation and certain information management may discuss in connection with this presentation reference non- GAAP financial measures, such as adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, and adjusted earnings per share. Adjusted EBITDA and adjusted earnings per share exclude certain expenses, net of certain benefits. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the Appendix to this presentation, and are included in our news release issued on March 1, 2012 and posted on www.aboutwendys.com. The Wendy’s Company 4 |
STEVE HARE CHIEF FINANCIAL OFFICER |
Q4 2011 Financial Highlights Q4 2011 N.A. Same- Store Sales Company-owned +5.1% Franchise +4.2% Systemwide +4.4% Company Restaurant Margin Q4 2011 15.0% Q4 2010 14.0% +100 bps Q4 2011 Adjusted EBITDA* * See reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in the appendix. Q4 2011 $80.9 million Q4 2010 $73.2 million |
2011 Full-Year Highlights ($ in Millions) 2011 2010 Better/ (Worse) Sales 2,126.6 $ 2,079.1 $ 47.5 $ Franchise revenues 304.8 296.3 8.5 Total revenues 2,431.4 $ 2,375.4 $ 56.0 $ Adjusted EBITDA* 331.1 $ 341.9 $ (10.8) $ (Less) plus: Transaction related and other costs (45.7) - (45.7) Arby's indirect corporate overhead in general and administrative (G&A) (14.6) (32.7) 18.1 SSG purchasing cooperative expenses in G&A 2.2 (5.2) 7.4 Integration costs in G&A - (5.5) 5.5 Reversal of pension withdrawal expense in cost of sales - 5.0 (5.0) Depreciation and amortization (123.0) (126.8) 3.8 Impairment of long-lived assets (12.9) (26.3) 13.4 Operating profit 137.1 $ 150.4 $ (13.3) $ * See reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in the appendix. |
2011 Income from Continuing Operations and Special Items ($ in Millions, except per share amounts) per share per share Adjusted income from continuing operations and adjusted earnings per share* 62.1 $ 0.15 $ 71.7 $ 0.17 $ (Less) plus: Arby's transaction related and other costs (28.5) (0.07) - - Impairment of long-lived assets (7.9) (0.02) (16.3) (0.04) Arby's indirect corporate overhead in G&A (9.2) (0.02) (20.5) (0.05) SSG purchasing cooperative expenses in G&A 1.4 - (3.2) (0.01) Integration costs in G&A - - (3.5) (0.01) Reversal of pension withdrawal expense in cost of sales - - 3.1 0.01 Loss on early extinguishment of debt - - (16.3) (0.04) Gain on collection of note receivable - - 3.1 0.01 (44.2) (0.11) (53.6) (0.13) Income from continuing operations and earnings per share 17.9 $ 0.04 $ 18.1 $ 0.04 $ 2011 2010 * See reconciliation of Adjusted Income from Continuing Operations and Adjusted Earnings Per Share in the appendix. |
2011 Cash Flow ($ in Millions) 2011 Cash flow from operations 246.7 $ Capital expenditures (146.8) Restaurant acquisitions (11.2) Proceeds from dispositions, net 104.9 Repurchases of common stock (157.6) Dividends paid (32.4) Other financing / investing activities (2.2) Net cash flow before debt payments 1.4 Repayments of long-term debt (38.7) Net decrease in cash after debt payments (37.3) Beginning cash balance 512.5 Ending cash balance 475.2 $ 9 |
2011 Consolidated Debt ($ in Millions) Senior Debt 1,327.9 $ Capital Leases and Other Debt 29.1 Total Debt 1,357.0 Less: Cash and Cash Equivalents 475.2 Net Debt 881.8 $ 2011 Adjusted EBITDA* 331.1 $ Total Debt / 2011 Adjusted EBITDA* 4.1x Net Debt / 2011 Adjusted EBITDA* 2.7x Y/E 2011 * See reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in the appendix. |
Stock Repurchases and Dividends (In Millions, except per share amounts) 2009-2011 2011 Total Shares purchased 31 83 Average price per share $5.07 $4.83 Repurchase amount $157 $402 Authorization expired at 2011 year end. Quarterly Cash Dividend • $0.02 per share • Payable on March 15, 2012 to stockholders of record as of March 1, 2012 Quarterly Cash Dividend • $0.02 per share • Payable on March 15, 2012 to stockholders of record as of March 1, 2012 11 |
2012 OUTLOOK The Wendy’s Company Company-Operated Same-Store Sales 2 to 3% Company-Operated Restaurant Margin Flat to +50 bps Commodity Basket Increase 115 to 145 bps Adjusted EBITDA $335 to $345 million |
2012 Capital Expenditures The Wendy’s Company Investing to increase long-term shareholder value New Units $40 Remodels 40 Restaurant Equipment/Maintenance 65 Product Development 20 Technology 30 Other 30 Total Estimated Capex $225 $ IN MILLIONS |
The Wendy’s Company * International Growth (outside of North America) 2012 Low-single digit Adjusted EBITDA growth rate 2013 & Beyond High-single to low-double digit Adjusted EBITDA growth rate 14 Breakfast Image Activation: New North America Business Improvement Financial Strategies Image Activation: Remodels Int’l* |
EMIL BROLICK PRESIDENT & CHIEF EXECUTIVE OFFICER |
WENDY’S RECIPE TO WIN The Wendy’s Company |
A CUT ABOVE A CUT ABOVE Foundation of Recipe to Win BRAND VISION Foundation of Recipe to Win BRAND VISION |
A CUT ABOVE Why it will work Reimaging the Restaurants Reimaging the People Reimaging the Experience Reimaging the Food Reimaging the Brand Communications |
A CUT ABOVE A Quick Casual Experience at a QSR Price! |
IMAGE ACTIVATION Contemporizing Wendy’s is key to growth Moves us from a functional to an emotional experience Makes other Ps work better P LACE The Wendy’s Company |
TRADITIONAL ULTRA-MODERN URBAN CONTEMPORARY |
Image Activation Strategy 22 2011 Initial 10 remodels • Customer feedback very positive • Sales exceeding expectations 2012 50 remodels • $750 to $850K investment • Targeting 15% ROI • Develop financing sources for franchisees 20 new restaurants 2013 and beyond Accelerate growth • Value-engineered investment / lower costs • Meet return target |
In each Image Activation restaurant: The Wendy’s Company P EOPLE Re-interview staff Change leadership if needed Focus on “Five-Stars” / hire exceptional new employees IMPROVING RELIABILITY AND PREDICTABILITY |
Win with “Five-Star Athletes” |
RESTAURANT OPERATING LEVELS U.S. Company and Franchise Restaurants The Wendy’s Company 2008 2011 2008 2011 A & B LEVEL F LEVEL P ERFORMANCE 83.5% 32.5% 24.8% 0.6% |
P ROMOTION Message Creative Media The Wendy’s Company |
PROMOTION…Creative Ad Campaign Chronology…There was Dave and then… 24 Ads 30 Ads 55 Ads 50 Ads 9 Ads 700+ Ads 1989-2002 2004 2005-2006 2007 2008-2009 2009-2011 2012 Dave Mr. Wendy Do What Tastes Right Red Wig/ That’s Right Waaaay Better You Know When It’s Real Code Name: RED The Wendy’s Company 2003 Town of Dublin 15 Ads 2 nd Qtr New Campaign 2 nd Qtr New Campaign |
NEW CAMPAIGN SUCCESS CRITERIA GOAL Win the Hearts and Minds of Consumers Competing for share of mind, not just selling products HOW Tactically and Strategically Brilliant Creates emotional connection to “Big Brand,” gains trial of promoted idea Unique look, tone and feel … you will know it is Wendy’s The Wendy’s Company |
The Wendy’s Company P RODUCT Successful launch of new core product in 2011 |
The Wendy’s Company PREMIUM HAMBURGER TASTES PREMIUM HAMBURGER TASTES PREMIUM SEASONAL SALAD PREMIUM SEASONAL SALAD NEW NEWS ON A CLASSIC NEW NEWS ON A CLASSIC NEW TWIST ON NATURAL CUT FRIES NEW TWIST ON NATURAL CUT FRIES P RODUCT 2012 HIGHLIGHTS 2012 HIGHLIGHTS |
DIFFERENTIATED MENU OFFERINGS FRESH INGREDIENTS AND FRESH PREPARATION SANDWICHES BEVERAGES SIDES The Wendy’s Company Consumers rate Wendy’s breakfast products notably higher than the competition’s P RODUCT |
The Wendy’s Company BREAKFAST OPERATIONALLY SUCCESSFUL breakfast business Committed to earning our share of the Able to execute at various volumes among our best Operational attribute scores at breakfast are P RODUCT |
The Wendy’s Company BREAKFAST EXPANSION – 2012 New market in Northeast Adding breakfast to select company remodels and new builds Focused on building awareness and driving sales growth |
OUR COMPETITIVE ADVANTAGES The Wendy’s Company 35 Iconic brand, latent equities Clear brand vision … A CUT ABOVE Well-defined growth platforms We have the RECIPE TO WIN Focused on EXECUTION |
Upcoming Investor Calendar 36 March 7: Bank of America Merrill Lynch Conference March 12: Roth Growth Stock Conference March 15: UBS Global Consumer Conference May 8: 1Q Earnings Release |
Q&A |
The Wendy’s Company ©2012 Oldemark LLC |
Appendix |
Reconciliation of Adjusted EBITDA to Income from Continuing Operations (Unaudited) (In Millions) 2011 2010 2011 2010 Adjusted EBITDA 80.9 $ 73.2 $ 331.1 $ 341.9 $ (Less) plus: Transaction related and other costs (15.0) - (45.7) - Arby's indirect corporate overhead in general and administrative (G&A) - (7.9) (14.6) (32.7) SSG purchasing cooperative expenses in G&A - (0.3) 2.2 (5.2) Integration costs in G&A - (1.2) - (5.5) Reversal of pension withdrawal expense in cost of sales - 5.0 - 5.0 Depreciation and amortization (32.0) (30.4) (123.0) (126.8) Impairment of long-lived assets (4.6) (4.9) (12.9) (26.3) Operating profit 29.3 33.5 137.1 150.4 Interest expense (28.2) (28.6) (114.1) (118.4) Loss on early extinguishment of debt - - - (26.2) Investment income, net 0.3 0.0 0.5 5.3 Other income, net 0.2 0.3 0.9 2.5 Income from continuing operations before income taxes 1.6 5.2 24.4 13.6 Benefit from (provision for) income taxes 2.7 0.9 (6.5) 4.5 Income from continuing operations 4.3 $ 6.1 $ 17.9 $ 18.1 $ Fourth Quarter Twelve Months |
Reconciliation of Adjusted Income from Continuing Operations and Adjusted Earnings per Share to Income from Continuing Operations and Earnings per Share (Unaudited) (in millions, except per share amounts) per share per share per share per share Adjusted income from continuing operations and adjusted earnings per share 16.4 $ 0.04 $ 12.0 $ 0.03 $ 62.1 $ 0.15 $ 71.7 $ 0.17 $ (Less) plus: Arby's transaction related and other costs (9.3) (0.02) - - (28.5) (0.07) - - Impairment of long-lived assets (2.8) (0.01) (3.0) (0.01) (7.9) (0.02) (16.3) (0.04) Arby's indirect corporate overhead in G&A - - (5.0) (0.02) (9.2) (0.02) (20.5) (0.05) SSG purchasing cooperative expenses in G&A - - (0.2) - 1.4 - (3.2) (0.01) Integration costs in G&A - - (0.8) - - - (3.5) (0.01) Reversal of pension withdrawal expense in cost of sales - - 3.1 0.01 - - 3.1 0.01 Loss on early extinguishment of debt - - - - - - (16.3) (0.04) Gain on collection of Deerfield Capital Corp. note receivable - - - - - - 3.1 0.01 (12.1) (0.03) (5.9) (0.02) (44.2) (0.11) (53.6) (0.13) Income from continuing operations and earnings per share 4.3 $ 0.01 $ 6.1 $ 0.01 $ 17.9 $ 0.04 $ 18.1 $ 0.04 $ Fourth Quarter Twelve Months 2011 2010 2011 2010 |