© 2013 Oldemark LLC First Quarter 2013 First Quarter 2013 Earnings Conference Call Earnings Conference Call May 8, 2013 May 8, 2013 Exhibit 99.1 |
© 2013 Oldemark LLC JOHN BARKER JOHN BARKER Chief Communications Chief Communications Officer Officer 2 |
Today’s Agenda Today’s Agenda CEO Overview Emil Brolick Financial Update Steve Hare Q&A 3 |
4 Forward-Looking Statements and Non-GAAP Financial Measures 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 May 8, 2013 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 May 8, 2013 and posted on www.aboutwendys.com. |
© 2013 Oldemark LLC EMIL BROLICK EMIL BROLICK President & CEO President & CEO 5 |
Adjusted EBITDA* $77.3 mil vs. $63.9 mil Adjusted EPS* $0.03 vs. $0.01 Company-Operated 1.0% vs. 0.8% SSS 6 Q1 2013 Highlights Q1 2013 Highlights 2013 2012 *See reconciliation of Adjusted EBITDA and Adjusted EPS in the appendix. |
© 2013 Oldemark LLC Adjusted EBITDA Adjusted EBITDA $350 to $360 million $350 to $360 million Reaffirm Reaffirm Adjusted EPS Adjusted EPS $0.20 to $0.22 $0.20 to $0.22 Raising Raising 2013 OUTLOOK: 2013 OUTLOOK: 7 |
Expect 2012 Expect 2012 Initiatives to Initiatives to Contribute to Contribute to Solid 2013 Solid 2013 8 |
Right Price Right Size Menu Development Right Price Right Size Menu Development 9 |
Image Activation Beginning to Support SSS Image Activation Beginning to Support SSS and Accelerate Re-imaging and Accelerate Re-imaging Opened 48 Tier I Reimages Completed Tier II & III Design Work 10 |
Reduction in Number of Restaurants Reduction in Number of Restaurants Serving Breakfast Serving Breakfast Negative Impact on SSS Positive Impact on EBITDA 11 |
Ongoing Cost Reduction Ongoing Cost Reduction G&A Management & Efficiencies Reduction in Beverage Costs Packaging Optimization RFPs with Purchasing Co-op 12 |
HIGH LOW FUNCTIONAL EMOTIONAL BRAND VISION… BRAND VISION… 13 COMPETITOR A COMPETITOR B NEW QSRs |
PRICE PRICE New QSR Quality at QSR Price New QSR Quality at QSR Price PRODUCT PRODUCT Play a different game … Play a different game … Superior Superior perceived quality, competitive price perceived quality, competitive price PEOPLE PEOPLE 5-Star Performers 5-Star Performers PERFORMANCE PERFORMANCE Keeping the brand promise Keeping the brand promise PROMOTION PROMOTION Strategically driven, tactically brilliant Strategically driven, tactically brilliant PLACE PLACE The complete brand experience The complete brand experience 14 Enabling Profitable Growth Enabling Profitable Growth THE RECIPE TO WIN THE RECIPE TO WIN |
NEW QSR QUALITY AT QSR PRICE 15 |
PLAYING A DIFFERENT GAME 16 |
PREMIUM PRICE / VALUE BUILD BIG BRAND, DRIVE TRAFFIC 17 |
2013 Tier II 2013 Tier II Columbus, OH Columbus, OH 2013 Tier III 2013 Tier III Salt Lake City Salt Lake City 18 |
19 Tier III Tier III Interior Interior |
20 Core Organic Growth Strategies Shareholder Value-Enhancing Initiatives |
Todd Penegor to Become Chief Financial Officer September 1, 2013 CFO Steve Hare to Retire from Wendy’s 21 |
© 2013 Oldemark LLC STEVE HARE STEVE HARE Chief Financial Officer Chief Financial Officer 22 |
23 Wendy’s Q1 2013 Highlights Wendy’s Q1 2013 Highlights Company Restaurant Margin +100bps Q1 2013 12.8% Q1 2012 11.8% Company Restaurant Margin +100bps Q1 2013 12.8% Q1 2012 11.8% February March (local) January Q1 2013 North America Same-Store Sales 1-Year 2-Year Company-Operated 1.0% 1.8% Franchise 0.6% 1.3% |
24 Q1 2013 Financial Summary Q1 2013 Financial Summary Q1 2013 Q1 2012 $ Change % Change Sales 530.7 $ 519.9 $ 10.8 $ 2.1% Franchise revenues 73.0 73.3 (0.3) -0.4% Total revenues 603.7 $ 593.2 $ 10.5 $ 1.8% Adjusted EBITDA* 77.3 $ 63.9 $ 13.4 $ 21.0% Adjusted EPS* 0.03 $ 0.01 $ 0.02 $ 200.0% ($ in millions except per share amounts) (Unaudited) *See reconciliation of Adjusted EBITDA and Adjusted EPS in the appendix. |
Adjusted Income and Special Items Adjusted Income and Special Items 25 *See reconciliation of Adjusted Income and Adjusted EPS in the appendix. (In Thousands Except Per Share Amounts) (Unaudited) Per share Per share Adjusted income and adjusted earnings per share* 13,101 $ 0.03 $ 3,347 $ 0.01 $ (Less) plus: Depreciation of assets that will be replaced as part of the Image Activation initiative (9,068) (0.02) - - Facilities relocation costs and other transactions (1,900) (0.00) (3,808) (0.01) Impairment of long-lived assets - - (2,783) (0.01) Gain on sale of investment, net - - 17,978 0.05 Total adjustments (10,968) (0.02) 11,387 0.03 Net income 2,133 0.01 14,734 0.04 Net income attributable to noncontrolling interests - - (2,384) (0.01) Net income and earnings per share attributable to The Wendy's Company 2,133 $ 0.01 $ 12,350 $ 0.03 $ First Quarter 2013 2012 |
26 2013 Image Activation Depreciation 2013 Image Activation Depreciation Assets replaced are depreciated from the beginning of the year until closure for construction Q1 Q2 Q3 Q4 2013 # of reopenings 3 24 44 29 100 # of restaurants depreciated 100 73 29 - 100 % of IA depreciation adjustment ~65% ~25% ~10% 0% $20M to $25M |
27 Q1 2013 Cash Flow Highlights Q1 2013 Cash Flow Highlights ($ in millions) (unaudited) Cash flow from operations 32.6 $ Capital expenditures 40.0 Beginning cash balance 453.4 $ Change in cash (24.7) Ending cash balance 428.7 $ Q1 2013 |
28 Selected Balance Sheet Highlights Selected Balance Sheet Highlights ($ in millions) (unaudited) Cash 429 $ Senior Debt 1,419 $ Capital Leases and Other Debt 37 Total Debt 1,456 $ TTM Adjusted EBITDA* 347 $ Total Debt / TTM Adjusted EBITDA* 4.2x Net Debt / TTM Adjusted EBITDA* 3.0x March 31, 2013 *See reconciliation of Adjusted EBITDA in the appendix. |
29 •Refinancing of $350M of the $1,119M senior secured Term Loan B into a new senior secured Term Loan A •Repricing of the remaining Term Loan B balance of approximately $769M by reducing the interest rate margin and floor •Extension of the maturity of the $200M revolving credit facility by one year 2013 Debt Refinancing Expected to Save 2013 Debt Refinancing Expected to Save ~$20 million in Annualized Interest Expense ~$20 million in Annualized Interest Expense $50M $50M Annualized Net Interest Expense Savings Annualized Net Interest Expense Savings vs. 2011 from 2012 and 2013 Refinancings vs. 2011 from 2012 and 2013 Refinancings |
Image Activation Results* Image Activation Results* Year 1 average sales lift exceeded 25% Sales sustaining at ~20% vs. pre-remodel volumes 2011 10 concept reimages Average sales lift exceeding 25% since re-opening Sales sustaining at ~18% vs. pre-remodel volumes 2012 48 Tier I reimages * Results exclude 2 non-comparable restaurants in 2011 and 5 non-comparable restaurants in 2012. 30 |
Image Activation Designs Expanding Image Activation Designs Expanding Franchise Restaurant San Antonio, TX International Restaurants 714 Third Ave June 2013 New Build 650 Broadway June 2013 Reimage 85 Nassau St July 2013 Reimage Elmsford August 2013 Reimage NY Openings 31 |
Image Activation Multi-Year Growth Plan Image Activation Multi-Year Growth Plan 32 10 48 100 200 200 100 200 300 20 16 25 25 25 69 45 40 40 40 2011 2012 2013 2014 2015 Fr. New Co. New Fr. Reimage Co. Reimage Cumulative IA Restaurants 10 76 301 766 1,331 Image Activation Progress by Year-End 2015: •50% of Company restaurants •1 out of 5 restaurants in the Wendy’s System Note: New Company restaurants were Image Activation building design beginning in 2012; 2 of 45 new Franchise restaurants were Image Activation in 2012. Estimates based on Company’s current outlook. |
Strong Free Cash Flow & Balance Sheet Strong Free Cash Flow & Balance Sheet 33 Accelerating Investment in Image Activation: Expect $440 to $500 million 2013 to 2015* RETURN CAPITAL TO SHAREHOLDERS RETURN CAPITAL TO SHAREHOLDERS * Estimates based on Company’s current outlook. $100 million share repurchase program authorized through 12/29/13 Current dividend yield of 2.7% (based on share price as of 5/3/13) CORE GROWTH PRIORITY CORE GROWTH PRIORITY |
2013 and Long-Term Earnings Outlook 2013 and Long-Term Earnings Outlook Adjusted EBITDA: $350 to $360 million, 5% to 8% increase vs. 2012 Adjusted EPS: $0.20 to $0.22, 18% to 29% increase vs. 2012 Average annual Adjusted EBITDA and Adjusted EPS growth rates in high-single-digit to low- double-digit range 2013 Long-Term Estimates based on Company’s current outlook. 34 |
© 2013 Oldemark LLC JOHN BARKER JOHN BARKER Chief Communications Chief Communications Officer Officer 35 |
2013 Events May 23: Annual Stockholder Meeting June: Begin Image Activation Market Visits with Investors Aug. 7: Second Quarter Earnings Release & Conference Call 36 Investor Relations Calendar Investor Relations Calendar |
Q&A Q&A 37 |
Appendix Appendix 38 |
Reconciliation of Adjusted EBITDA to Net Income Attributable to The Wendy's Company (In Thousands) (Unaudited) 2013 2012 Adjusted EBITDA 77,299 $ 63,881 $ Less: Depreciation and amortization (51,797) (32,311) Impairment of long-lived assets - (4,511) Facilities relocation costs and other transactions (3,038) (6,143) Operating profit 22,464 20,916 Interest expense (20,964) (28,235) Other expense, net and investment income, net (2,271) 28,931 (Loss) income before income taxes and noncontrolling interests (771) 21,612 Benefit from (provision for) income taxes 2,904 (6,878) Net income 2,133 14,734 Net income attributable to noncontrolling interests - (2,384) Net income attributable to The Wendy's Company 2,133 $ 12,350 $ First Quarter 39 |
40 Reconciliation of Adjusted Income and Adjusted Earnings Per Share to Net Income and Earnings Per Share Attributable to The Wendy's Company (In Thousands Except Per Share Amounts) (Unaudited) Per share Per share Adjusted income and adjusted earnings per share 13,101 $ 0.03 $ 3,347 $ 0.01 $ (Less) plus: Depreciation of assets that will be replaced as part of the Image Activation initiative (9,068) (0.02) - - Facilities relocation costs and other transactions (1,900) (0.00) (3,808) (0.01) Impairment of long-lived assets - - (2,783) (0.01) Gain on sale of investment, net - - 17,978 0.05 Total adjustments (10,968) (0.02) 11,387 0.03 Net income 2,133 0.01 14,734 0.04 Net income attributable to noncontrolling interests - - (2,384) (0.01) Net income and earnings per share attributable to The Wendy's Company 2,133 $ 0.01 $ 12,350 $ 0.03 $ First Quarter 2013 2012 |