The Wendy’s Company Reports Preliminary Fourth-Quarter And Full-Year 2011 Results

The Wendy’s Company (NASDAQ: WEN) today reported preliminary, unaudited results for the fourth quarter and full year ended Jan. 1, 2012. The Company also issued its 2012 and long-term outlook. The Company plans to release its audited 2011 results on March 1.

Emil Brolick, President and Chief Executive Officer said, “In the fourth quarter, we produced our strongest same-store sales growth since the second quarter of 2004 primarily due to the introduction of our premium Dave’s Hot ‘N Juicy™ cheeseburger line, which received a positive response from consumers. For 2011, we also generated positive transactions for the first year since 2002. Adjusted EBITDA ¹ was $331.1 million for fiscal 2011, and income from continuing operations for the year was $17.9 million.

“We expect another positive year in 2012, with same-store sales growth in a range of 2 to 3 percent,” Brolick said. “We estimate 2012 Adjusted EBITDA will be in a range of $335 million to $345 million.”

Preliminary Fourth Quarter 2011 Summary

• Consolidated revenues were $615.0 million in the fourth quarter of 2011, an increase of 5.6 percent compared to $582.6 million in the fourth quarter of 2010.
• Adjusted EBITDA was $80.9 million in the fourth quarter of 2011, an increase of 10.5 percent compared to fourth-quarter 2010 Adjusted EBITDA of $73.2 million.
• Fourth-quarter 2011 income from continuing operations was $4.3 million. This compares to fourth-quarter 2010 income from continuing operations of $6.1 million.
• Adjusted Earnings Per Share ¹ was $0.04 in the fourth quarter of fiscal 2011 compared to fourth quarter 2010 Adjusted Earnings Per Share of $0.03. Earnings per share was $0.01 in the fourth quarter of fiscal 2011 and in the fourth quarter of 2010.
• Wendy’s® North America systemwide same-store sales increased 4.4 percent.
• Wendy’s North America company-operated restaurants same-store sales increased 5.1 percent, resulting from increases in average check and transactions.
• Wendy’s North America franchise same-store sales increased 4.2 percent.
• Wendy’s company-operated restaurant margin increased 100 basis points to 15.0 percent. The year-over-year improvement was primarily due to sales leverage from increased pricing and transactions and favorable insurance adjustments more than offsetting a 170 basis-point negative impact from commodity cost increases.

Preliminary 2011 Summary

• Consolidated revenues were $2.431 billion in fiscal 2011, a 2.4 percent increase compared to $2.375 billion in fiscal 2010.
• Adjusted EBITDA was $331.1 million in fiscal 2011 compared to 2010 Adjusted EBITDA of $341.9 million.
• Fiscal 2011 income from continuing operations was $17.9 million. This compares to 2010 income from continuing operations of $18.1 million.
• Adjusted Earnings Per Share was $0.15 in fiscal 2011 compared to 2010 Adjusted Earnings Per Share of $0.17. Earnings per share was $0.04 in fiscal 2011 and fiscal 2010.
• Wendy’s North America company-operated restaurants same-store sales increased 2.0 percent, resulting from increases in average check and transactions.
• Wendy’s company-operated restaurant margin decreased 80 basis points to 14.0 percent. The year-over-year decrease was primarily due to the negative impact from commodity cost increases of 140 basis points, partially offset by sales leverage from pricing and transactions gains, as well as favorable insurance adjustments.

“We are making progress on re-establishing Wendy’s as the quality leader and innovator in QSR with our ‘Recipe to Win,’” Brolick said. “Our recent introductions such as Dave’s Hot ‘N Juicy cheeseburger line and Asiago Ranch Chicken Club Sandwiches have been outstanding, and our goal is to continue to build a menu that is relevant to consumers and drives profitable sales growth. As part of our remodel effort – which we call ‘Image Activation’ – we are working to enhance the entire customer experience, including the restaurant design, inside environment, elevated food preparation standards and higher customer service standards.”