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TheStreet Open House

The Wendy’s Company Reports 2012 Second-Quarter Results

Stocks in this article: WEN

The Company acquired 30 franchised Wendy’s restaurants in the Austin, Texas area during the second quarter. In July, the Company acquired 24 franchised Wendy’s restaurants in the Albuquerque, New Mexico area. As previously stated, the Company is working to optimize its system by purchasing restaurants from selected franchisees. The Company plans to either operate those restaurants or sell them to new or existing franchisees, with the ultimate goal of accelerating the Image Activation program.

As of the end of the second quarter, Wendy’s and its franchisees were operating 354 restaurants outside of North America. The Company also had more than 600 restaurants under development agreements outside of North America.

As of July 1, 2012, the Company’s total number of worldwide restaurants was 6,547.

Company Completes Refinancing; Anticipates Annual Interest Savings of About $25 Million

In July, the Company completed its refinancing initiative with the redemption of the remaining outstanding Wendy’s Restaurants, LLC 10.0 percent Senior Notes due 2016. The refinancing enables the Company to increase its liquidity, extend its debt maturities and realize ongoing annual interest savings of approximately $25 million.

Same-store Sales Reporting Methodology

As previously announced, the Company has revised its reporting methodology for same-store sales to more accurately reflect comparable sales performance, including the impact of its new and reimaged restaurants. Using the new methodology, the Company calculates Wendy’s same-store sales beginning after new restaurants have been open for at least 15 continuous months and after reimaged restaurants have been reopened for three continuous months. The calculation of same-store sales previously began after a restaurant had been open for at least 15 continuous months and as of the beginning of the previous fiscal year. Under the old methodology, the same-store sales increase at North America Company-operated restaurants for the second quarter of 2012 would have been approximately 3.1 percent. The new methodology has virtually no impact on previously reported same-store sales results prior to 2012.

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