![]() First Quarter 2014 Conference Call May 8, 2014 Exhibit 99.1 © 2013 Oldemark LLC |
![]() DAVID POPLAR Vice President Investor Relations 2 © 2013 Oldemark LLC |
![]() Today’s Agenda CEO Overview Emil Brolick Financial Update Todd Penegor Q&A 3 |
![]() 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, 2014 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, 2014 and posted on www.aboutwendys.com. 4 Forward-Looking Statements and Non-GAAP Financial Measures |
![]() EMIL BROLICK President & CEO 5 © 2013 Oldemark LLC |
![]() IA TRANSFORMING BRAND; PACE ACCELERATING COMPLETED SALE OF 418 COMPANY RESTAURANTS SOLID COMPANY-OPERATED SRS OF 1.3% BRAND MOMENTUM CONTINUES IN FIRST QUARTER 6 STRONG ADJUSTED EBITDA AND ADJUSTED EPS GROWTH © 2013 Oldemark LLC |
![]() 7 GROWTH…THE IMPERATIVE |
![]() KEYS TO SUSTAINED GROWTH BRAND RELEVANCE ECONOMIC MODEL RELEVANCE 8 |
![]() 9 RECIPE TO WIN PEOPLE 5-Star Talent PRICE New QSR Quality / QSR Price PRODUCT Playing a Different Game PLACE Brand Transformation PERFORMANCE Keeping Brand Promise Tactically Brilliant PROMOTION |
![]() 10 % Traffic Share Millennials and Boomers Key to Growth Period ending February 2014 / Source: The NPD Group / CREST Total QSR MILLENNIALS 25% BOOMERS 33% 10% 10% 20% 20% 15% 15% 22% 22% 21% 21% 12% 12% |
![]() Messaging: "Engage Me; Don't Sell Me" 11 |
![]() Menu Vision: Limited Time Offerings + Core 12 Asiago Ranch Chicken Club Ciabatta Bacon Cheeseburger BBQ Ranch Chicken Salad Asian Cashew Chicken Salad |
![]() Technology: Engage Millennial Consumers When, Where & How THEY Want To Be Engaged 13 |
![]() HOW WE GROW BRAND RELEVANCE + ECONOMIC RELEVANCE = GROWTH Shareholder Value-Enhancing Initiatives Core Organic Growth Strategies 14 Financial Management Global Growth Restaurant Utilization & Brand Access Restaurant Ownership Optimization New Restaurant Growth Image / Experience Activation North America Same-Restaurant Sales Growth |
![]() RESTAURANT OPTIMIZATION: GROWTH DRIVER SOLD 418 RESTAURANTS 15 GOALS Net New Restaurant Growth Assuring Brand Relevance Efficiency and Effectiveness Restaurant Ownership Optimization • Franchisee Franchisee • Company Franchisee |
![]() The TOTAL Experience Matters 16 |
![]() STRATEGIC REASONS TO BELIEVE • Strong Latent Brand Equity • Unique Brand Position…A Cut Above • Image Activation Contemporizing Brand Image • Economic Model Improving: Restaurant and The Wendy’s Company • Exceptional Franchisee Base and Commitment 17 |
![]() TODD PENEGOR Chief Financial Officer 18 © 2013 Oldemark LLC |
![]() Q1 2014 Highlights Q1 2014 NORTH AMERICA Same-Restaurant Sales Company 1.3% Franchise 0.6% N.A. COMPANY-OPERATED RESTAURANT MARGIN + 30 bps Q1 2014 13.1% Q1 2013 12.8% EARNINGS GROWTH *Adjusted EBITDA +13% *Adjusted EPS +133% 19 (Unaudited) *See reconciliation of Adjusted EBITDA and Adjusted EPS in the appendix. |
![]() Fundamentals of Business Continue to Improve 20 STRONG UNDERLYING FUNDAMENTALS Five Sequential Quarters of Company SRS Growth First Half Second Half Half Improvement of 500+ bps vs. first half Q1 Q1 2014 Company SRS SRS Q1 2014 Q4 2013 Q1 2013 Q2 2013 Q3 2013 1.0% % 0.4% % 3.2% % 3.1% 1.3% |
![]() 21 *See reconciliation of Adjusted EBITDA in the appendix. SALES $432.6 $530.7 -18.5% FRANCHISE REVENUES 90.6 73.0 24.1% TOTAL REVENUES $523.2 $603.7 -13.3% ADJUSTED EBITDA* $87.3 $77.3 13% Q1 2014 Q1 2013 % Change (Unaudited) $ in millions Q1 2014 Highlights |
![]() Q1 2014 Highlights G&A $70.4 $65.3 $5.1 OPERATING PROFIT* 89.0 22.5 66.5 ADJUSTED EPS* 0.07 0.03 0.04 REPORTED EPS 0.12 0.01 0.11 Q1 Q1 2014 Q1 Q1 2013 $ $ Change (Unaudited) $ in millions, except per-share amounts 22 * First-quarter 2014 operating profit includes a $12.1 million gain on the sale of assets and a $44.0 million net gain from the Company’s system optimization initiative. Significant items affecting first-quarter 2013 operating profit include a $3.0 million facilities action charge. See reconciliation of Adjusted EPS in the appendix. |
![]() 23 Cash Flow Highlights CASH FLOW FROM OPERATIONS $14.7 CAPITAL EXPENDITURES 53.1 BEGINNING CASH BALANCE $580.2 CHANGE IN CASH (195.5) ENDING CASH BALANCE $384.7 Q1 2014 (Unaudited) $ in millions |
![]() 24 Selected Balance Sheet Highlights CASH CASH $385 $385 TOTAL DEBT TOTAL DEBT $1,462 $1,462 TTM Adjusted EBITDA TTM Adjusted EBITDA $377 $377 Total Debt/TTM Adjusted EBITDA Total Debt/TTM Adjusted EBITDA 3.9 3.9 Net Debt/TTM Adjusted EBITDA Net Debt/TTM Adjusted EBITDA 2.9 2.9 March 30, 2014 March 30, 2014 (Unaudited) $ in millions |
![]() Image Activation Franchise Adoption Accelerating 2011A 2012A 2013A 2014E • Solid Financial Returns • Financial Incentives • Joint Market and Capital Planning • Turn-Key Franchise Development Program • Construction Coaching Support ULTRA-MODERN DESIGN WITH UPGRADES 25 236 59 10 410-460 TOTAL SYSTEM REIMAGES AND NEW BUILDS FRANCHISEES: KEY DRIVERS |
![]() Economic Model And Brand Relevance To Accelerate Growth ECONOMIC MODEL • $2 million AUV Target • Hi-Lo Strategy: Build Check vs. Price • Image Activation Acceleration • Brand Relevance • Build Loyalty • People Activation / Customer Service • Leverage Technology • Mobile Pay, Mobile Order, CRM • Margin Activation • Fuel for Reinvestment 26 COMPANY AND FRANCHISEES GROWTH DRIVERS |
![]() Reaffirming 2014 Adjusted EBITDA and EPS Outlook Estimates based on Company’s current outlook. 27 Company-operated Same-Restaurant Sales growth of 2.5 to 3.5 percent Reduction in interest expense of approximately $15 million Capital expenditures of $280 to $290 million Adjusted EBITDA of $390 to $400 million / Adjusted EPS of $0.34 to $0.36 Company-operated restaurant margin outlook of 16.3 to 16.8 percent • Higher-than-expected beef costs, primarily in 2Q and 3Q Reaffirming: Revising: |
![]() 28 On Target For $30 Million In G&A Savings from System Optimization HIGHER EQUITY COMPENSATION EXPENSE TO PARTIALLY OFFSET SAVINGS 2012 Actual $288 2014 Estimate $275 Estimated Savings $ 13 Stock Comp. Increase $ 17 Savings Excl. Stock Comp. $ 30 $ in millions 2014 ESTIMATE vs. 2012 ACTUAL 2014 ESTIMATE vs. 2013 ACTUAL 2013 Actual $294 2014 Estimate $275 Estimated Savings $ 19 Stock Comp. Increase $ 11 Savings Excl. Stock Comp. $ 30 |
![]() Reaffirming Long-Term Outlook SAME-RESTAURANT SALES 3%+ ADJUSTED EBITDA ADJUSTED EPS Growth Rate in the High-Single to Low-Double Digit Range Growth Rate in Mid-Teens 29 Estimates based on Company’s current outlook. |
![]() CASH PRIORITIES Building Shareholder Value Invest in our Business Dividend Growth Share Repurchases 30 Ended Q1 with $385M of Cash Offset dilutive impact of equity awards Generally in line with EPS growth (subject to Board approval) Image Activation: Increasing Scrape & Rebuilds |
![]() DAVID POPLAR Vice President Investor Relations 31 © 2013 Oldemark LLC |
![]() 2014 Investor Relations Calendar MAY 13 Image Activation Tour – Dublin, Ohio Sponsored by Sanford Bernstein MAY 21-22 Texas Road Show – Dallas and Houston Sponsored by Stifel, Nicolaus & Company JUNE 3-4 West Coast Road Show – San Fran. and L.A. Sponsored by Key 32 |
![]() Q&A 33 |
![]() Appendix 34 |
![]() Reconciliation of Adjusted EBITDA to Net Income 35 2014 2013 Adjusted EBITDA 87,334 $ 77,299 $ (Less) plus: Depreciation and amortization (42,021) (51,797) Facilities action (income) charges, net 44,033 (3,038) Impairment of long-lived assets (332) - Operating profit 89,014 22,464 Interest expense (12,994) (20,964) Other income (expense), net 523 (2,271) Income (loss) before income taxes 76,543 (771) (Provision for) benefit from income taxes (30,240) 2,904 Net income 46,303 $ 2,133 $ (In Thousands) Reconciliation of Adjusted EBITDA to Net Income (Unaudited) Three Months |
![]() 36 Reconciliation of Adjusted Income and Adjusted Earnings Per Share to Net Income and Earnings Per Share Per share Per share Adjusted income and adjusted earnings per share 26,249 $ 0.07 $ 13,101 $ 0.03 $ Plus (less): Facilities action (income) charges, net 26,156 0.07 (1,900) (0.00) Depreciation of assets that will be replaced as part of the Image Activation initiative (5,897) (0.02) (9,068) (0.02) Impairment of long-lived assets (205) (0.00) - - Total adjustments 20,054 0.05 (10,968) (0.02) Net income 46,303 $ 0.12 $ 2,133 $ 0.01 $ 2014 2013 Reconciliation of Adjusted Income and Adjusted Earnings Per Share to Net Income and Earnings Per Share (In Thousands Except Per Share Amounts) (Unaudited) Three Months |