Slide 1: First Quarter 2014 Conference Call
First Quarter 2014 Conference Call Exhibit 99.1 © 2013 Oldemark LLC May 8, 2014
Slide 2: David Poplar, Vice President Investor Relations
DAVID POPLAR 2 © 2013 Oldemark LLC Vice President Investor Relations
Slide 3: Today's Agenda
Today’s Agenda CEO Overview Emil Brolick Financial Update Todd Penegor Q&A
Slide 4: Emil Brolick, President & CEO
EMIL BROLICK 5 © 2013 Oldemark LLC President & CEO
Slide 5: Transforming Brand; Pace Accelerating
IA TRANSFORMING BRAND; PACE ACCELERATING COMPLETED SALE OF 418 COMPANY RESTAURANTS SOLID COMPANY-OPERATED SRS OF 1.3% BRAND MOMENTUM CONTINUES IN FIRST QUARTER STRONG ADJUSTED EBITDA AND ADJUSTED EPS GROWTH © 2013 Oldemark LLC
Slide 6: Growth...The Imperative
7 GROWTH…THE IMPERATIVE
Slide 7: Keys to Sustained Growth
KEYS TO SUSTAINED GROWTH BRAND RELEVANCE ECONOMIC MODEL RELEVANCE
Slide 8: Recipe to Win
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
Slide 9: Millennials and Boomers Key to Growth
Millennials and Boomers Key to Growth 10% 20% 15% 22% 21% 12% % Traffic Share Period ending February / Source: The NPD Group / CREST Total QSR MILLENNIALS 25% BOOMERS 33% 10% 20% 15% 22% 21% 12%
Slide 10: Messaging: "Engage Me; Don't Sell Me"
Messaging: "Engage Me; Don't Sell Me"
Slide 11: Menu Vision: Limited Time Offerings + Core
Menu Vision: Limited Time Offerings + Core Asiago Ranch Chicken Club Ciabatta Bacon Cheeseburger BBQ Ranch Chicken Salad Asian Cashew Chicken Salad
Slide 12: Technology: Engage Millennial Consumers
Technology: Engage Millennial Consumers When, Where & How THEY Want To Be Engaged
Slide 13: How We Grow
HOW WE GROW BRAND RELEVANCE + ECONOMIC RELEVANCE = GROWTH Shareholder Value-Enhancing Initiatives Core Organic Growth Strategies 14 Financial Management Restaurant Ownership Optimization New Restaurant Growth Image / Experience Activation North America Same-Restaurant Sales Growth Global Growth Rest
Slide 14: Restaurant Ownership Optimization: Growth Driver
Net New Restaurant Growth Assuring Brand Relevance Efficiency and Effectiveness Restaurant Ownership Optimization • Franchisee Franchisee • Company Franchisee RESTAURANT OPTIMIZATION: GROWTH DRIVER SOLD 418 RESTAURANTS GOALS
Slide 15: The Total Experience Matters
The TOTAL Experience Matters
Slide 16: Todd Penegor, Chief Financial Officer
TODD PENEGOR 18 © 2013 Oldemark LLC Chief Financial Officer
Slide 17: Q1 2014 Highlights
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% (Unaudited) *See reconciliation of Adjusted EBITDA and Adjusted EPS in the
Slide 18: Fundamentals of Business Continue to Improve
Fundamentals of Business Continue to Improve 1.0 % % 0.4 % % 3.2 % % 3.1% 1.3% 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 Q4 Q1 Q2 Q3
Slide 19: Q1 2014 Highlights
Q1 2014 Highlights *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 Q1 % Change (Unaudited) $ in millions
Slide 20: 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 Q1 Q1 $ $ Change (Unaudited) $ in millions, except per-share amounts * First-quarter 2014 operating profit includes a $12.1 million gain on the sale of assets and a
Slide 21: Cash Flow Highlights
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 (Unaudited) $ in millions
Slide 22: Selected Balance Sheet Highlights
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,
Slide 23: Image Activation Franchise Adoption Accelerating
Image Activation Franchise Adoption Accelerating ULTRA-MODERN DESIGN WITH UPGRADES 236 59 10 410-460 TOTAL SYSTEM REIMAGES AND NEW BUILDS FRANCHISEES: KEY DRIVERS 2011A 2012A 2013A 2014E • Solid Financial Returns • Financial Incentives • Joint Market and Capital Planning • Turn-Key Franchise Develop
Slide 24: Economic Model and Brand Relevance to Accelerate Growth
Economic Model And Brand Relevance To Accelerate Growth COMPANY AND FRANCHISEES GROWTH DRIVERS 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
Slide 25: Reaffirming 2014 Adjusted EBITDA and EPS Outlook
Reaffirming 2014 Adjusted EBITDA and EPS Outlook Adjusted EBITDA of $390 to $400 million / Adjusted EPS of $0.34 to $0.36 Estimates based on Company’s current outlook. Company-operated Same-Restaurant Sales growth of 2.5 to 3.5 percent Reduction in interest expense of approximately $15 million Capit
Slide 26: On Target for $30 Million in G&A Savings
On Target For $30 Million In G&A Savings from System Optimization 2014 ESTIMATE vs. 2012 ACTUAL 2014 ESTIMATE vs. 2013 ACTUAL 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.
Slide 27: Reaffirming Long-Term Outlook
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 Estimates based on Company’s current outlook.
Slide 28: Cash Priorities
CASH PRIORITIES Ended Q1 with $385M of Cash Building Shareholder Value Invest in our Business Dividend Growth Share Repurchases Offset dilutive impact of equity awards Generally in line with EPS growth (subject to Board approval) Image Activation: Increasing Scrape & Rebuilds
Slide 29: David Poplar, Vice President Investor Relations
DAVID POPLAR 31 © 2013 Oldemark LLC Vice President Investor Relations
Slide 30: 2014 Investor Relations Calendar
2014 Investor Relations Calendar MAY 13 MAY 21-22 JUNE 3-4 Image Activation Tour – Dublin, Ohio Sponsored by Sanford Bernstein Texas Road Show – Dallas and Houston Sponsored by Stifel, Nicolaus & Company West Coast Road Show – San Fran. and L.A. Sponsored by Key
Slide 31: Q&A
Q&A
Slide 32: Appendix
Appendix
Slide 33: Reconciliation of Adjusted EBITDA to Net Income
Reconciliation of Adjusted EBITDA to Net Income 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) (20,9
Slide 34: Reconciliation of Adjusted Income and Adjusted EPS
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 a