Exhibit 99.1
Triarc Companies, Inc.
280 Park Avenue
New York, NY 10017
For Immediate Release
CONTACT: Anne A. Tarbell
(212) 451-3030
www.triarc.com
TRIARC REPORTS THIRD QUARTER 2004 RESULTS
New York, NY, November 5, 2004 - Triarc Companies, Inc. (NYSE: TRY; TRY.B)
announced today the results of operations for its third quarter and nine months
ended September 26, 2004.
Consolidated Highlights
o Consolidated revenues increased to $86.0 million in the 2004 third quarter
($232.6 million in the 2004 first nine months) from $74.6 million in the
2003 third quarter ($219.2 million in the 2003 first nine months) primarily
reflecting $6.9 million in asset management fees of Deerfield & Company LLC
("Deerfield"), in which Triarc acquired a majority interest in July 2004,
as well as increases in royalties and franchise and related fees and an
increase in net sales from company-owned Arby's(R) restaurants for the 2004
periods. Third quarter 2004 systemwide Arby's same store sales for
restaurants were up 7% (up 4% in the first nine months).
o Consolidated operating profit increased to $5.5 million in the 2004 third
quarter ($8.8 million in the 2004 first nine months) compared with $5.1
million in the 2003 third quarter ($14.6 million in the 2003 first nine
months), reflecting the revenue increases noted above, partially offset by
increases in cost of sales, higher general and administrative expenses,
higher depreciation and amortization and the cost of services of Deerfield.
For the nine month periods, the revenue increases were more than offset by
the cost increases noted above.
o Consolidated gross margin declined to 22% in the 2004 third quarter from
25% in the 2003 third quarter and to 21% in the 2004 first nine months from
26% in the 2003 first nine months, resulting from higher beef and other
commodity costs and start-up costs related to new product introductions at
our company owned Arby's restaurants. We currently expect our 2004 fourth
quarter gross margin to be relatively unchanged versus our 2004 third
quarter gross margin of 22% and to improve compared with the 21% for the
first nine months of 2004, due to better operating efficiencies and price
increases implemented in August 2004 for some of our new and existing
Arby's products as well as more limited price promotions.
o Consolidated depreciation and amortization was $4.8 million in the 2004
third quarter ($11.6 million in the 2004 first nine months) versus $3.4
million in the 2003 third quarter ($10.2 million in the 2003 first nine
months). These increases reflect the Deerfield acquisition and the
implementation of new back office and point-of-sale systems at
company-owned Arby's restaurants.
o Consolidated interest expense was $5.0 million in the 2004 third quarter
($23.7 million in the 2004 first nine months) compared with $10.0 million
in the 2003 third quarter ($27.9 million in the 2003 first nine months).
These decreases reflect the release in the 2004 third quarter of $4.3
million of interest accruals no longer required upon the finalization of
certain Internal Revenue Service ("IRS") examinations and lower balances of
the majority of the Company's debt. For the nine-month periods, the
decrease was partially offset by a $3.6 million increase representing the
full period effect of $175.0 million of Triarc's 5% convertible notes due
2023 issued in May 2003.
o Consolidated net investment income (loss) declined to a loss of $(3.7)
million in the 2004 third quarter (income of $7.4 million in the 2004 first
nine months) from income of $4.0 million in the 2003 third quarter (income
of $10.9 million in the 2003 first nine months), due to the effect of
several investment writedowns and realized losses from sales of investments
in the 2004 periods, reflecting declines in the market values of certain
debt and equity securities, partially offset by higher interest income from
higher-yielding debt securities.
o The Company finalized IRS and state income tax examinations in the 2004
third quarter and determined that it had income tax reserves and interest
accruals that were no longer required. The release of these reserves and
accruals resulted in a $14.6 million increase to the benefit from income
taxes, a $10.8 million gain on disposal of discontinued operations and a
$4.3 million reversal of interest accruals through interest expense.
o Consolidated net income was $22.0 million, or $0.31 per diluted Class A and
$0.34 per diluted Class B share, in the 2004 third quarter (net income of
$17.5 million, or $0.24 per diluted Class A and $0.27 per diluted Class B
share in the 2004 first nine months) compared with net income of $0.5
million, or $0.01 per diluted Class A and Class B share, in the 2003 third
quarter (net loss of $(2.9) million, or $(0.05) per diluted Class A and
Class B share in the 2003 first nine months). These changes reflect the
after-tax effect of the factors discussed above. The per share amounts
discussed above give effect to the Company's September 2003 stock
distribution of two shares of Class B Common Stock, Series 1, for each
share of Class A Common Stock.
o Consolidated earnings before interest, taxes, depreciation and amortization
("EBITDA") (which we define as operating profit plus depreciation and
amortization, other than amortization of deferred financing costs) was
$10.3 million in the 2004 third quarter ($20.4 million in the 2004 first
nine months) compared with $8.5 million in the 2003 third quarter ($24.8
million in the 2003 first nine months), reflecting the factors discussed
above. The attached table provides the calculation of EBITDA and a
reconciliation of EBITDA to our net income (loss).
Restaurant Operations Highlights
o Net sales from the company-owned Arby's restaurants were $52.3 million in
the 2004 third quarter ($151.7 million in the 2004 first nine months),
compared with $51.1 million in the 2003 third quarter ($151.0 million in
the 2003 first nine months). Royalties and franchise and related fees were
$26.7 million in the 2004 third quarter ($74.0 million in the 2004 first
nine months), up from $23.5 million in the 2003 third quarter ($68.2
million in the 2003 first nine months).
o The 2004 third quarter increase in sales from company-owned restaurants
reflects a 3% increase (1% in the 2004 first nine months) in same store
sales primarily as a result of new product introductions, notably Market
Fresh(R) salads and wraps, which began in April 2004, partially offset by
the impact of continuing weak sales in two key markets (Michigan and
Dallas, TX) and the closure of 2 underperforming company-owned stores since
September 28, 2003. During the 2004 third quarter, Arby's introduced a new
Market Fresh chicken salad sandwich which has been positively received by
consumers.
o 2004 third quarter same store sales for franchised restaurants increased 8%
(4% for the 2004 first nine months) compared with the weak same store sales
performance of the 2003 comparable periods, reflecting the impact of the
new product introductions discussed above. Royalties and franchise fees
were also positively impacted by royalties from 114 franchised Arby's
restaurants opened since September 28, 2003, with generally higher than
average sales volumes, replacing the royalties from 76 generally
underperforming franchised restaurants closed since September 28, 2003.
o Our restaurant business posted an operating profit of $18.2 million in the
2004 third quarter ($45.1 million in the 2004 first nine months) versus
$16.7 million in the 2003 third quarter ($51.1 million in the 2003 first
nine months). The increase for the 2004 third quarter reflects the revenue
increase noted above, partially offset by a $2.6 million increase in cost
of sales, which was the result of higher beef and other commodity costs and
start-up costs related to new product introductions, as well an increase in
depreciation and amortization discussed below. Restaurant operating profit
for the 2004 first nine months declined $6.0 million reflecting the factors
noted above as well as a $2.6 million increase in general and
administrative expenses, principally reflecting severance, recruiting and
relocation costs attributable to personnel changes and a $1.2 million
increase in advertising and selling expenses, primarily reflecting
increased advertising related to 2004 new product introductions as well as
the effect of a recovery in the 2003 periods of a fully-reserved franchisee
note receivable.
o Depreciation and amortization from our restaurant operations was $2.6
million in the 2004 third quarter ($7.0 million in the 2004 first nine
months) versus $2.0 million in the 2003 third quarter ($6.1 million in the
2003 first nine months). These increases reflect our implementation of new
back office and point-of-sale restaurant systems in our company-owned
restaurants.
o Restaurant business EBITDA was $20.8 million in the 2004 third quarter
($52.0 million in the 2004 first nine months) compared with $18.7 million
in the 2003 third quarter ($57.1 million in the 2003 first nine months),
reflecting the factors discussed above.
o Systemwide same store sales were up 7% in the 2004 third quarter (up 4% in
the 2004 first nine months) versus a decline of (4)% in the 2003 third
quarter (down (3)% in the 2003 first nine months). We currently expect
systemwide same store sales to be positive for the remainder of 2004,
primarily reflecting the impact of new product introductions which began in
April 2004.
o In the 2004 third quarter, the Arby's system opened 18 new units (61 in the
2004 first nine months) and closed 16 generally underperforming units (56
in the 2004 first nine months). As of September 26, 2004, Arby's had
commitments from franchisees to build 451 new units through 2011.
Asset Management Highlights
o On July 22, 2004, Triarc completed the acquisition of an approximate 64%
capital interest (representing in excess of 90% of the outstanding voting
interests) of Deerfield, a Chicago-based alternative asset manager, for an
aggregate $94.8 million, including expenses. The remainder of Deerfield is
owned by senior management of Deerfield. In connection with the
acquisition, Triarc invested $100 million on October 4, 2004 to seed a new
multi-strategy hedge fund managed by Deerfield. The new fund will invest
primarily in fixed income securities, focusing on bank loans, credit
instruments and debt and equity tranches of collateralized debt obligations
("CDOs"). As part of its strategies, the new fund is expected to use
leverage as well as swaps and other derivatives.
o Triarc accounts for Deerfield as a consolidated subsidiary with a minority
interest. For the period July 23, 2004 through September 30, 2004, the
close of Deerfield's's 2004 third quarter, Deerfield's asset management
fees, operating profit, depreciation and amortization and EBITDA, before
the effect of minority interests, were $6.9 million, $0.1 million, $0.8
million and $0.9 million, respectively.
o As of September 30, 2004, Deerfield had over $8.3 billion in third party
assets under management ("AUM") composed of approximately $7.3 billion in
CDOs, approximately $800 million in fixed income arbitrage hedge funds and
approximately $200 million in separately managed accounts.
o Triarc and Deerfield previously formed an investment adviser, TDM Advisors
LLC ("TDM"), to manage the assets of Triarc Deerfield Investment
Corporation, a newly-formed business development company. Due to market
conditions, a registration statement with the Securities and Exchange
Commission relating to a proposed $500 million initial public offering of
TDM's common stock was recently withdrawn. Deerfield is currently reviewing
alternative options for raising additional capital.
Commenting on asset management operations, Nelson Peltz, Triarc's Chairman
and Chief Executive Officer, said: "We have worked closely with the Deerfield
team in the last several months to smoothly and carefully integrate their
operations into Triarc. We are very excited by Deerfield's significant growth
potential. Going forward, we will focus on opportunities to substantially build
Deerfield's AUM and asset management expertise."
Peltz added: "Deerfield is a unique opportunity to establish a platform in
the asset management business. Deerfield has a strong management team, a
scalable operational structure, a history of successful innovation, a broad
range of fixed income management capabilities, a leading position in the growing
CDO market, a strong risk management culture and strong performance across
market cycles. Together with the Deerfield senior team, we look forward to
building a powerful asset management brand."
Commenting on future Triarc corporate opportunities, Peltz said: "As we
look ahead, we continue to review our options to deploy our substantial
liquidity through acquisitions, additional share repurchases and investments,
with the goal of further increasing stockholder value."
Commenting on Arby's 2004 third quarter results, Peter May, Triarc's
President and Chief Operating Officer, said: "We are very pleased with the
significant sales turnaround which has been achieved by our Arby's franchisees
over the last several quarters. Third quarter 2004 same store sales for
franchised restaurants were among the best our system has posted in the brand's
40-year history. Despite continuing high beef and other commodity costs, we are
also beginning to see improvement in our operating margins at company-owned
stores due to improved efficiencies."
May added: "Today, the Arby's franchisee system is well aligned with our
operating management. As we look ahead, our product pipeline is full of
promising new products. New advertising is also planned to retain loyal
customers and promote discovery of our highly successful Market Fresh products
by new customers. In 2005, our management will be very focused on improving new
store development. As a result, I believe Arby's is poised to achieve continued
growth and financial improvement."
Triarc is a holding company and, through its subsidiaries, the franchisor
of the Arby's restaurant system and the operator of approximately 235
restaurants located in the United States. Triarc also owns an approximate 64%
capital interest in Deerfield & Company LLC, a Chicago-based alternative asset
manager, offering a diverse range of fixed income strategies to institutional
investors.
# # #
Notes and Table To Follow
NOTES TO PRESS RELEASE
1. In addition to the results provided in accordance with U.S. Generally
Accepting Accounting Principles ("GAAP") in this press release, we present
EBITDA because we believe it is a useful supplement to operating profit in
understanding and assessing our consolidated results as well as the results
of our segments. We also use EBITDA to evaluate our segment performance and
allocate resources. Because all companies do not calculate EBITDA or
similarly titled financial measures in the same way, those measures may not
be consistent with the way we calculate EBITDA. Our presentation of EBITDA
is not intended to replace the presentation of our financial results in
accordance with GAAP. EBITDA should not be considered as an alternative to
operating profit or net income or loss.
2. Systemwide same store sales represent sales at all company-owned and all
franchised stores. We believe that reviewing the increase or decrease in
systemwide same store sales compared with the same period in the prior year
is useful to investors in analyzing the growth of the Arby's brand and
assessing trends in our restaurant operations.
3. There can be no assurance that we will be able to successfully integrate
Deerfield into our existing operations. The description of the acquisition
contained herein is only a summary and is qualified in its entirety by
reference to the definitive agreements relating to the acquisition, copies
of which have been filed by us with the Securities and Exchange Commission.
4. There can be no assurance that we or Deerfield will be able to identify
appropriate future acquisition targets or that we or Deerfield will be able
to successfully integrate any future acquisitions into our or Deerfield's
existing operations.
5. The statements in this press release that are not historical facts,
including, most importantly, information concerning possible or assumed
future results of operations of Triarc Companies, Inc. and its subsidiaries
(collectively, "Triarc" or the "Company") and statements preceded by,
followed by, or that include the words "may," "believes," "expects,"
"anticipates" or the negation thereof, or similar expressions, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). All statements that
address operating performance, events or developments that are expected or
anticipated to occur in the future, including statements relating to
revenue growth, earnings per share growth or statements expressing general
optimism about future operating results, are forward-looking statements
within the meaning of the Reform Act. These forward-looking statements are
based on our current expectations, speak only as of the date of this press
release and are susceptible to a number of risks, uncertainties and other
factors. Our actual results, performance and achievements may differ
materially from any future results, performance or achievements expressed
or implied by such forward-looking statements. For those 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 the forward-looking statements contained herein. Such factors
include, but are not limited to, the following: competition, including
pricing pressures, the potential impact of competitors' new units on sales
by Arby's(R) restaurants and consumers' perceptions of the relative
quality, variety and value of the food products offered; success of
operating initiatives; development costs; advertising and promotional
efforts; brand awareness; the existence or absence of positive or adverse
publicity; new product and concept development by the Company and its
competitors, and market acceptance of such new product offerings and
concepts; changes in consumer tastes and preferences, including changes
resulting from concerns over nutritional or safety aspects of beef,
poultry, french fries or other foods or the effects of food-borne illnesses
such as "mad cow disease" and avian influenza or "bird flu"; changes in
spending patterns and demographic trends; the business and financial
viability of key franchisees; the timely payment of franchisee obligations
due to the Company; availability, location and terms of sites for
restaurant development by the Company and its franchisees; the ability of
franchisees to open new restaurants in accordance with their development
commitments, including the ability of franchisees to finance restaurant
development; delays in opening new restaurants or completing remodels;
anticipated or unanticipated restaurant closures by the Company and its
franchisees; the ability to identify, attract and retain potential
franchisees with sufficient experience and financial resources to develop
and operate Arby's restaurants; changes in business strategy or development
plans, and the willingness of franchisees to participate in the Company's
strategy; business abilities and judgment of the Company's and franchisees'
management and other personnel; availability of qualified restaurant
personnel to the Company and to franchisees; the Company's ability, if
necessary, to secure alternative distribution of supplies of food,
equipment and other products to Arby's restaurants at competitive rates and
in adequate amounts, and the potential financial impact of any
interruptions in such distribution; adverse weather conditions; changes in
commodity (including beef), labor, supplies and other operating costs and
availability and cost of insurance; significant reductions in the Company's
client assets under management (and thus in the Company's advisory fee
revenue), due to such factors as weak performance of the Company's
investment products (either on an absolute basis or relative to the
Company's competitors), substantial illiquidity or volatility in the fixed
income markets and instruments in which the Company trades, loss of key
portfolio management personnel, reduced investor demand for alternative
fixed income investment products, and loss of investor confidence due to
adverse publicity; increased competition from other alternative fixed
income investment managers; pricing pressure on the advisory fees that the
Company can charge for its investment advisory services; difficulty in
increasing assets under management, or managing existing assets, due to
market-related constraints on trading capacity; the removal of the Company
as investment manager of one or more of the collateral debt obligations
(CDOs) it manages, or the reduction in the Company's CDO management fees
because of payment defaults by issuers of the underlying collateral;
availability, terms (including changes in interest rates) and deployment of
capital; changes in national, regional and local economic, market, business
or political conditions in the countries and other territories in which the
Company and its franchisees operate; changes in government regulations,
including franchising laws, investment management regulations, accounting
standards, environmental laws, overtime rules, minimum wage rates and
taxation rates; the costs, uncertainties and other effects of legal,
environmental and administrative proceedings; the impact of general
economic conditions on consumer spending, including a slower consumer
economy and the effects of war or terrorist activities; our ability to
identify appropriate acquisition targets in the future and to successfully
integrate any future acquisitions into our existing operations; and other
risks and uncertainties affecting the Company and its subsidiaries referred
to in our Annual Report on Form 10-K for the fiscal year ended December 28,
2003 (see especially "Item 1. Business--Risk Factors" and "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations") and in our other current and periodic filings with the
Securities and Exchange Commission, all of which are difficult or
impossible to predict accurately and many of which are beyond our control.
We will not undertake and specifically decline any obligation to publicly
release the results of any revisions that may be made to any
forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events. In addition, it is our policy generally not to make
any specific projections as to future earnings, and we do not endorse any
projections regarding future performance that may be made by third parties.
Triarc Companies, Inc.
Condensed Consolidated Statements of Operations
Third Quarter and Nine Months Ended September 28, 2003 and September 26, 2004
Third Quarter Ended Nine Months Ended
2003 2004 2003 2004
(In thousands except per share amounts)
(Unaudited)
Revenues:
Net sales.......................................................$ 51,093 $ 52,324 $150,988 $ 151,709
Royalties and franchise and related fees........................ 23,542 26,721 68,181 73,992
Asset management fees and related fees (a)...................... -- 6,915 -- 6,915
--------- --------- -------- ---------
74,635 85,960 219,169 232,616
--------- --------- -------- ---------
Costs and expenses:
Cost of sales, excluding depreciation and amortization.......... 38,295 40,902 112,139 119,891
Cost of services, excluding depreciation and amortization (a)... -- 2,042 -- 2,042
Advertising and selling......................................... 4,412 3,971 11,555 12,767
General and administrative, excluding depreciation and
amortization ................................................. 23,402 28,713 70,681 77,495
Depreciation and amortization, excluding amortization of
deferred financing costs...................................... 3,379 4,804 10,176 11,619
--------- --------- -------- ---------
69,488 80,432 204,551 223,814
--------- --------- -------- ---------
Operating profit............................................ 5,147 5,528 14,618 8,802
Interest expense.................................................. (10,032) (5,017) (27,857) (23,655)
Insurance expense related to long-term debt....................... (1,025) (934) (3,163) (2,883)
Investment income (loss), net..................................... 4,014 (3,730) 10,884 7,439
Gain (costs) related to proposed business acquisitions
not consummated................................................ 2,994 (26) 2,064 (793)
Other income, net................................................. 449 373 1,424 1,901
--------- --------- -------- ---------
Income (loss) from continuing operations before
income taxes and minority interests....................... 1,547 (3,806) (2,030) (9,189)
(Provision for) benefit from income taxes......................... (1,052) 15,618 (985) 16,559
Minority interests in (income) loss of consolidated subsidiaries.. -- (663) 112 (653)
--------- --------- -------- ---------
Income (loss) from continuing operations.................... 495 11,149 (2,903) 6,717
Gain on disposal of discontinued operations....................... -- 10,823 -- 10,823
--------- --------- -------- ---------
Net income (loss)...........................................$ 495 $ 21,972 $ (2,903) $ 17,540
========= ========= ======== =========
EBITDA (b)........................................................$ 8,526 $ 10,332 $ 24,794 $ 20,421
========= ========= ======== =========
Basic income (loss) per share: Class A common stock:
Continuing operations..............................$ .01 $ .16 $ (.05) $ .10
Discontinued operations............................ -- .16 -- .16
--------- --------- -------- ---------
Net income (loss)..................................$ .01 $ .32 $ (.05) $ .26
========= ========= ======== =========
Class B common stock:
Continuing operations..............................$ .01 $ .18 $ (.05) $ .11
Discontinued operations............................ -- .18 -- .18
--------- --------- -------- ---------
Net income (loss)..................................$ .01 $ .36 $ (.05) $ .29
========= ========= ======== =========
Diluted income (loss) per share: Class A common stock:
Continuing operations..............................$ .01 $ .16 $ (.05) $ .09
Discontinued operations............................ -- .15 -- .15
--------- --------- -------- ---------
Net income (loss)..................................$ .01 $ .31 $ (.05) $ .24
========= ========= ======== =========
Class B common stock:
Continuing operations..............................$ .01 $ .17 $ (.05) $ .10
Discontinued operations............................ -- .17 -- .17
--------- --------- -------- ---------
Net income (loss)..................................$ .01 $ .34 $ (.05) $ .27
========= ========= ======== =========
Shares used to calculate income (loss) per share (c):
Class A
Basic..................................................... 19,628 23,144 20,072 21,818
--------- --------- -------- ---------
Diluted................................................... 21,213 23,995 20,072 (d) 23,058
--------- --------- -------- ---------
Class B
Basic..................................................... 39,256 41,057 40,144 40,629
--------- --------- -------- ---------
Diluted................................................... 42,426 42,760 40,144 (d) 43,108
--------- --------- -------- ---------
- -----------------------------------------------------------------------------------------------------------------------------------
(a) On July 22, 2004 the Company completed the acquisition of 63.6% capital
interest in Deerfield. Deerfield, through its wholly-owned subsidiary
Deerfield Capital Management LLC, is an alternative asset manager offering
a diverse range of fixed income strategies to institutional investors.
(b) The calculation of EBITDA by segment and a reconciliation of consolidated
EBITDA to net income or loss follow:
Third Quarter Ended Nine Months Ended
2003 2004 2003 2004
(In thousands)
Operating Profit:
Restaurants...................................................$ 16,695 $ 18,197 $ 51,055 $ 45,059
Asset management.............................................. -- 128 -- 128
General corporate............................................. (11,548) (12,797) (36,437) (36,385)
--------- --------- -------- ---------
Total operating profit...................................... 5,147 5,528 14,618 8,802
--------- --------- -------- ---------
Plus: depreciation and amortization, excluding
amortization of deferred financing costs:
Restaurants................................................... 1,994 2,640 6,051 6,988
Asset management.............................................. -- 836 -- 836
General corporate............................................. 1,385 1,328 4,125 3,795
--------- --------- -------- ---------
Total depreciation and amortization......................... 3,379 4,804 10,176 11,619
--------- --------- -------- ---------
EBITDA:
Restaurants................................................... 18,689 20,837 57,106 52,047
Asset management.............................................. -- 964 -- 964
General corporate............................................. (10,163) (11,469) (32,312) (32,590)
--------- --------- -------- ---------
Total EBITDA................................................ 8,526 10,332 24,794 20,421
Depreciation and amortization, excluding
amortization of deferred financing costs...................... (3,379) (4,804) (10,176) (11,619)
Interest expense................................................ (10,032) (5,017) (27,857) (23,655)
Insurance expense related to long-term debt..................... (1,025) (934) (3,163) (2,883)
Investment income (loss), net................................... 4,014 (3,730) 10,884 7,439
Gain (costs) related to proposed business acquisitions
not consummated............................................... 2,994 (26) 2,064 (793)
Other income, net............................................... 449 373 1,424 1,901
--------- --------- -------- ---------
Income (loss) from continuing operations before
income taxes and minority interests....................... 1,547 (3,806) (2,030) (9,189)
(Provision for) benefit from income taxes....................... (1,052) 15,618 (985) 16,559
Minority interests in (income) loss of consolidated subsidiaries -- (663) 112 (653)
--------- --------- -------- ---------
Income (loss) from continuing operations.................... 495 11,149 (2,903) 6,717
Gain on disposal of discontinued operations..................... -- 10,823 -- 10,823
--------- --------- -------- ---------
Net income (loss)...........................................$ 495 $ 21,972 $ (2,903) $ 17,540
========= ========= ======== =========
(c) The calculations of income (loss) per share reflect the effect of the
Company's September 2003 stock distribution of two shares of a newly
designated series of Class B common stock for each issued share of Class A
common stock.
(d) The shares used to calculate diluted loss per share are the same as those
used to calculate basic loss per share for the period with a loss and,
therefore, the effect of all potentially dilutive securities would have
been antidilutive. Had the Company reported net income for the first nine
months of 2003, the shares used to calculate diluted income per Class A and
Class B common share would have been 21,503,000 and 43,006,000,
respectively, for that period reflecting the effect of dilutive stock
options. The effects of dilutive stock options represented in such amounts
reflect the average price of the Company's stock during that period. These
dilutive effects may not be representative of the effects that may occur in
future periods. Accordingly, this information is presented for
informational purposes only. In addition to the effect of dilutive stock
options, the Company's 5% Convertible Notes are convertible into 4,375,000
shares of the Company's Class A common stock and 8,750,000 shares of the
Company's Class B common stock. Such additional shares were not included in
the diluted shares above due to the substantial income that would be
required before the Convertible Notes became dilutive.