EX-99.1 2 d348118dex991.htm EARNINGS CONFERENCE CALL SLIDE PRESENTATION

First Quarter 2012 Earnings Conference Call May 8, 2012 ©2012 Oldemark LLC Exhibit 99.1

JOHN BARKER CHIEF COMMUNICATIONS OFFICER

Today’s Agenda The Wendy’s Company Financial Update Steve Hare CEO Overview Emil Brolick Q&A

The Wendy’s Company 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, 2012 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, 2012 and posted on www.aboutwendys.com. The Wendy’s Company

STEVE HARE CHIEF FINANCIAL OFFICER

The Wendy’s Company Q1 2012 Financial Summary Fourth consecutive quarter of positive SSS Q1 2012 system SSS of 0.8% lower than expected Lost momentum from strong +5.1% SSS in 4Q 2011 Margin negatively impacted by product mix and commodities Revising Adjusted EBITDA from continuing operations outlook to $320 to $335 million Investing in business to drive future growth

Q1 2012 Financial Highlights Q1 2012 N.A. Same- Store Sales Company-owned +0.8% Franchise Systemwide Company Restaurant Margin Q1 2012 11.8% Q1 2011 13.4% (160) bps Key Margin Variance Commodities (220) bps January February March +0.7% +0.7%

The Wendy’s Company Q1 2012 Financial Highlights * See reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), Adjusted Income and Adjusted Earnings per Share from continuing operations attributable to The Wendy’s Company in the appendix. ($ in Millions except per share amounts) Q1 2012 Q1 2011 Better/ (Worse) Sales 519.9 $ 509.3 $ 10.6 $ Franchise revenues 73.3 73.2 0.1 Total revenues 593.2 $ 582.5 $ 10.7 $ Adjusted EBITDA* 63.9 $ 73.7 $ (9.8) $ Income from continuing operations attributable to The Wendy's Company 12.4 $ $ (0.3) 12.7 $ Reported EPS 0.03 $ $ 0.00 0.03 $ Adjusted income from continuing operations attributable to The Wendy's Company* 3.3 $ 9.3 $ (6.0) $ Adjusted EPS* 0.01 $ 0.02 $ (0.01) $

Income from Continuing Operations and Special Items * See reconciliation of Adjusted Income and Adjusted Earnings Per Share from Continuing Operations in the appendix. The Wendy’s Company Reconciliation of Adjusted Income and Adjusted Earnings per Share from Continuing Operations to Income (Loss) and Earnings per Share from Continuing Operations Attributable to The Wendy's Company (Unaudited) (In thousands, except per share amounts) Adjusted income and adjusted earnings per share from continuing operations Plus (less): Gain on sale of investment, net Impairment of long-lived assets Facilities relocation and other transition costs Transaction related costs Arby's indirect corporate overhead in general and administrative (G&A) SSG purchasing cooperative expense reversal in G&A Total Adjustments Income (loss) from continuing operations and earnings per share Net income attributable to noncontrolling interests Income (loss) and earnings per share from continuing operations attributable to The Wendy's Company per share per share 3,347 $ 0.01 $ 9,300 $ 0.02 $ 17,978 0.05 - - (2,783) (0.01) (4,873) (0.01) (3,429) (0.01) - - (379) (0.00) (1,187) (0.00) - - (4,970) (0.01) - - 1,434 0.00 11,387 0.03 (9,596) (0.02) 14,734 0.04 (296) (0.00) (2,384) (0.01) - - 12,350 $ 0.03 $ (296) $ (0.00) $ 2012 2011 First Quarter

The Wendy’s Company Q1 2012 Cash Flow ($ in Millions) Q1 2012 Net Income 14.7 $ Less: Adjustments (29.8) Cash flow used in operations (15.1) Capital expenditures (47.0) Restaurant acquisitions (2.6) Proceeds from sale of investment 24.4 Dividends paid (7.8) Other financing / investing activities (2.3) Net cash decrease before debt payments (50.4) Repayments of long-term debt (6.4) Net decrease in cash after debt payments (56.8) Beginning cash balance 475.2 Ending cash balance 418.4 $

Q1 2012 Consolidated Debt * See reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in the appendix ($ in Millions) Senior Debt 1,328.2 $ Capital Leases and Other Debt 24.2 Total Debt 1,352.4 Less: Cash and Cash Equivalents 418.4 Net Debt 934.0 $ TTM Adjusted EBITDA* 321.2 $ Total Debt / TTM Adjusted EBITDA* 4.2x Net Debt / TTM Adjusted EBITDA* 2.9x April 1, 2012 The Wendy’s Company

The Wendy’s Company Refinancing: Transaction Summary Wendy’s International, Inc. raising $1.125 billion of new secured term loans and $200 million of revolving Credit Facility Improves covenant flexibility, extends maturity and increases liquidity Annual interest savings of $25 million Transaction proceeds will be used*: To redeem or repurchase Wendy’s Restaurants’ existing 10% Senior Notes due 2016 To refinance the Company’s existing credit facilities For general corporate purposes, including the funding of related transaction fees and expenses Timing May 15: Settlement of tender July 16: Expected completion of the call * Subject to market conditions and other factors, Wendy’s Restaurants currently intends to redeem on July 16 any Senior Notes that remain outstanding following consummation of the tender offer.

2012 and Long-Term Outlook 2012 outlook for Adjusted EBITDA from Continuing Operations lowered to a range of $320 to $335 million Reaffirming long-term average annual Adjusted EBITDA growth rate in the high-single-digit to low-double-digit range beginning in 2013 The Wendy’s Company

2012 Revised Outlook Sales momentum from October 2011 launch of Dave’s Hot ‘N Juicy Cheeseburger line did not carry over into Q1 2012 The “W” Cheeseburger diluted marketing message and cannibalized positive momentum from Dave’s Hot ‘N’ Juicy Q1 marketing calendar did not drive sales Intense competitive couponing and discounting Wendy’s marketing messages were less effective in driving transactions The Wendy’s Company

2012 Revised Outlook Unfavorable product mix resulted in negative impact on margin The “W” Cheeseburger was mispriced at $2.99 More beef on the “W” (4.5 ounces) than on Dave’s Hot ‘N’ Juicy (4 ounces) Caused trade-down from premium rather than trade-up from value Raising the “W” a la carte price from $2.99 to $3.19 prior to March promotion did not achieve desired results Consumers changed buying behavior Managed check by buying fewer or different items to maintain or reduce spending Resulted in less leverage on fixed costs The Wendy’s Company

The Wendy’s Company

Wendy’s Long-Term Strategic Growth Components 2013 & Beyond High-single to low-double digit Adjusted EBITDA growth rate Int’l Franchise Acquisitions/ Sales Financial Mgmt. Breakfast / 24 HR New Restaurant Development Image Activation North American Business Improvement The Wendy’s Company

EMIL BROLICK PRESIDENT & CHIEF EXECUTIVE OFFICER

The Wendy’s Company 1 st Quarter Below Expectations Refining marketing messages Dynamic consumer & market environment Restaurant execution improving Big brand image building 2012: Transition year

The Wendy’s Company We Remain Confident in Our Strategies “A Cut Above” brand positioning “Recipe to Win” Growth platforms to produce shareholder value Financial resources Building people capabilities Iron-willed determination

“A CUT ABOVE”

The Wendy’s Company A CUT ABOVE Why it will work The Wendy’s Company The Wendy’s Company Reimaging the Restaurants Reimaging the People Reimaging the Experience Reimaging the Food Reimaging the Brand Communications

The Wendy’s Company The Wendy’s Company

The Wendy’s Company Wendy’s Advertising Awareness Levels Have Spiked to Highest Levels in Over 2 Years Jan ‘09 Jul ‘09 Jan ‘10 Jul ‘10 Jan ‘11 Jul ‘11 Feb ‘12 TV Advertising (Aided)

Source: Millward Brown. Data based on Q3 2011, Q4 2011, Q1 2012. Since the Launch of Dave’s Hot ‘N Juicy Cheeseburgers, Wendy’s has Made Gains in Hamburger Attributes Great Tasting Hamburgers Use Fresh, Never Frozen Beef Q3 ‘11 Q4 ‘11 Q1 ‘12 Competitor B Competitor A Competitor B Competitor A The Wendy’s Company

The Wendy’s Company P P RICE RICE P P RODUCT RODUCT P P ROMOTION ROMOTION P P LACE LACE P P ERFORMANCE ERFORMANCE P P EOPLE EOPLE RECIPE TO WIN

PRICE: Price/Value Imbalance Company Stores In 2011, Single transitioned to include cheese in standard build. 2011 pricing reflects blended cheese/no cheese price, prior years show pricing for Single no cheese. $4.09 $2.49 $3.49 $1.69 $0.99 $0.99 Annual Price Trends Annual Price Trends The Wendy’s Company +$1.50 - $0.70 Gap +$3.10 - $2.50 Gap +$3.10 - $2.50 Gap

The Wendy’s Company P Right Price … Right Size … Right Quality … Moving to a tighter 99-cent value menu EVERYDAY VALUE MENU JR. CHEESEBURGER 99 ? CRISPY CHICKEN SANDWICH 99 ? 5-PC. SPICY CHICKEN NUGGETS 99 ? VALUE NATURAL-CUT FRIES 99 ? VALUE SOFT DRINK 99 ? SMALL FROSTY 99 ? The Wendy’s Company RICE Testing products / prices at “value” tiers above 99 cents

IMAGE ACTIVATION • •Customer reaction extremely positive • P The Wendy’s Company Ten 2011 prototypes exceeding sales expectations LACE Elevates customer experience with innovative interior and exterior designs

IMAGE ACTIVATION PERFORMANCE Consumer Insights on Restaurant Design Consumer Insights on Restaurant Design All Interiors are a “WOW” customer experience Welcoming, Positive Ambiance: Fireplaces, Lounge Seating, Booths, TVs Separation Between Order Placement and Pick Up New Queue and Front Counter are Differentiators, Not Typical QSR The Wendy’s Company

The Wendy’s Company IMAGE ACTIVATION PROGRESS • 2012 • 50 reimages • 20 new builds • Testing with select franchisees • 2013 • Plan to accelerate with tiered investment approach • Developing financing sources for franchisees

Deliver “A Cut Above” customer experience Provide a Fast Casual experience at traditional QSR price The Wendy’s Company P EOPLE Improving Reliability and Predictability

Executive Leadership: Hired Craig Bahner, Chief Marketing Officer Hired Scott Weisberg, Chief People Officer Promoted John Peters, SVP of Operations The Wendy’s Company P EOPLE

The Wendy’s Company PERFORMANCE Sparkle Operators Evaluation (SOE) scores at all-time highs “A” Restaurants “F” Restaurants SOE Score 2.1% 3.6% 6.3% 13.3% 16.2% 25.1% 29.3% 17.4% 1.0% 0.3% 0.5% 0.4% 75.3% 79% 82% 85% 85% 86% 66% 70% 74% 78% 82% 86% 0% 10% 20% 30% 40% 2007 2008 2009 2010 2011 Q1 '12 A F SOE

The Wendy’s Company PROMOTION: Advertising New advertising campaign and strategy: Began April 2 Features two consumer champions: Consumer advocate Wendy Thomas Smartly challenges consumer food choices and promotes the benefits of choosing Wendy’s

The Wendy’s Company PROMOTION: Advertising Product / Promotion • Contemporizes brand • Sets expectations for the Wendy’s experience • 76% positive sentiment in social media; 18,000+ new campaign conversations; mentioned every 132 seconds. Advocate for consumers “Now, That’s Better”

The Wendy’s Company PROMOTION: Advertising Brand Promise • Demonstrates brand values: Quality, Fresh preparation, Honest Food • Sets expectation for Wendy’s quality Brand heritage and ambassador: Wendy Thomas

P RODUCT Spicy Chicken Guacamole Club

The Wendy’s Company PRODUCT: Strengthen The Core Hamburgers: Promotional LTO Heritage Products: Baked Potato, Frosty and Chili Salads: Seasonal favorite

The Wendy’s Company P RODUCT Direct Mail Coupons

The Wendy’s Company Brand Access and Asset Utilization Breakfast is most rapidly growing QSR daypart past five years & next five years Breakfast is 22% of QSR traffic, 17% of QSR sales Puts Wendy’s in position to serve 24 hours

The Wendy’s Company Breakfast Menu Strategy Premium ingredients and authentic preparation Distinctive Artisan Egg Sandwich Mornin’ Melt Panini Biscuit Sandwiches Coffee Credibility Red Head Roasters Orange Juice Soft Drinks Differentiation Home-Style Potatoes Steel-Cut Oatmeal Fruit Cup Everyday Affordability Sausage & Egg Burrito Oatmeal Bar Sausage Biscuit Signature Sandwiches Beverages/Coffee Sides Value

The Wendy’s Company Breakfast Next Steps Focused on improving breakfast sales and profitability Expand to Northeastern U.S. market in summer 2012 Adding breakfast to certain reimaged and new restaurants Evaluating optimal expansion strategy

INTERNATIONAL OPPORTUNITY

The Wendy’s Company International Update Development Update Total (open / commitments) ~ 1,000 restaurants Buenos Aires, Argentina Opened 4 restaurants in Q1, increasing total restaurant count to 354 Added 37 new restaurant commitments increasing total commitments to 636 Signed development agreement with Wissol Group for Georgia & Republic of Azerbaijan for 25 restaurants

The Wendy’s Company International Update Following Recipe to Win: 6 P’s Refining menu architecture to drive “A Cut Above” positioning Launching Dave’s Hot ‘N Juicy in many markets in May and June Translating and activating “Now That’s Better” campaign Premium Porcini Mushroom Chicken Sandwich in Japan

The Wendy’s Company Wendy’s Long-Term Strategic Growth Components Int’l New Restaurant Development Image Activation 2013 & Beyond High-single to low-double digit Adjusted EBITDA growth rate Franchise Acquisitions/ Sales Financial Mgmt. Breakfast / 24 HR North American Business Improvement

The Wendy’s Company Summary We know what we want to be…“A Cut Above” We know how to get there…“The Recipe to Win” We have the growth platforms to produce shareholder value We have the financial resources We are building the people capability We have great franchise partners We have iron-willed determination

JOHN BARKER CHIEF COMMUNICATIONS OFFICER

The Wendy’s Company May 23: Morgan Stanley Retail Conference May 24: The Wendy’s Company Annual Meeting June 28: Investor Day in Dublin, OH August 9: 2Q Earnings Release Upcoming Investor Calendar

The Wendy’s Company JUNE INVESTOR DAY • Management Presentations • Image Activation restaurant tours • Formal invitations will be e-mailed Thursday, June 28 in Dublin, OH The Wendy’s Company Restaurant Support Center June 28, 2012 8:00 am – 4:00 pm

©2012 Oldemark LLC The Wendy’s Company

Appendix

Reconciliation of Adjusted EBITDA from Continuing Operations to Net Income (Loss) Attributable to The Wendy’s Company (Unaudited) 2012 2011 Adjusted EBITDA from continuing operations 63,881 $ 73,725 $ (Less) plus: Depreciation and amortization (32,311) (30,314) Impairment of long-lived assets (4,511) (7,897) Facilities relocation and other transition costs (5,531) - Transaction related costs (612) (1,884) Arby's indirect corporate overhead in general and administrative (G&A) - (7,888) SSG purchasing cooperative expense reversal in G&A - 2,275 Operating profit 20,916 28,017 Interest expense (28,235) (29,442) Gain on sale of investment, net 27,407 - Other income, net 1,524 253 Income (loss) from continuing operations before income taxes and noncontrolling interests 21,612 (1,172) (Provision for) benefit from income taxes (6,878) 876 Income (loss) from continuing operations 14,734 (296) Loss from discontinued operations, net of income taxes - (1,113) Net income (loss) 14,734 (1,409) Net income attributable to noncontrolling interests (2,384) - Net income (loss) attributable to The Wendy's Company 12,350 $ (1,409) $ First Quarter (In thousands) The Wendy’s Company

Reconciliation of Adjusted Income from Continuing Operations and Adjusted Earnings per Share to Income (Loss) from Continuing Operations and Earnings per Share Attributable to The Wendy’s Company (Unaudited) (In thousands, except per share amounts) per share per share Adjusted income and adjusted earnings per share from continuing operations 3,347 $ 0.01 $ 9,300 $ 0.02 $ Plus (less): Gain on sale of investment, net 17,978 0.05 - - Impairment of long-lived assets (2,783) (0.01) (4,873) (0.01) Facilities relocation and other transition costs (3,429) (0.01) - - Transaction related costs (379) (0.00) (1,187) (0.00) Arby's indirect corporate overhead in general and administrative (G&A) - - (4,970) (0.01) SSG purchasing cooperative expense reversal in G&A - - 1,434 0.00 Total Adjustments 11,387 0.03 (9,596) (0.02) Income (loss) from continuing operations and earnings per share 14,734 0.04 (296) (0.00) Net income attributable to noncontrolling interests (2,384) (0.01) - - Income (loss) and earnings per share from continuing operations attributable to The Wendy's Company 12,350 $ 0.03 $ (296) $ (0.00) $ 2012 2011 First Quarter The Wendy’s Company