Slide 1: Second-Quarter 2014 Conference Call
© 2013 Oldemark LLC Second-Quarter 2014 Conference Call Exhibit 99.1 August 7, 2014
Slide 2: David Poplar, Vice President Investor Relations
© 2013 Oldemark LLC DAVID POPLAR 2 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
© 2013 Oldemark LLC EMIL BROLICK 5 President & CEO President & CEO
Slide 5: Company Restaurant Margin Improved to 17.8 Percent
© 2013 Oldemark LLC COMPANY RESTAURANT MARGIN IMPROVED 110 bps TO 17.8 PERCENT PLANNED SALE OF ~ 135 RESTAURANTS IN CANADA LEADS GROWTH INITIATIVE ACHIEVED EARNINGS GROWTH WITH 418 FEWER COMPANY RESTAURANTS ADJUSTED EBITDA & ADJUSTED EPS GROWTH IN LINE WITH EXPECTATIONS STRONG COMPANY-OPERATED SAME-
Slide 6: Fresh chicken salad
FIELDS CHICKEN SALAD
Slide 7: Achieving Consistent Same-Restaurant Sales Growth
Achieving Consistent Same-Restaurant Sales Growth Improvement of 500+ bps in second half vs. first half of Q1 TWO-YEAR: 4.3% TWO-YEAR: 2.3% TWO-YEAR: 2.9% TWO-YEAR: 5.9% North America Company-Operated Same-Restaurant Sales
Slide 8: Restaurant Margin Improvement Continues
Restaurant Margin Improvement Continues
Slide 9: Selling Approximately 135 Restaurants in Canada to Franchisees
SELLING APPROXIMATELY 135 RESTAURANTS IN CANADA TO NEW AND EXISTING FRANCHISEES Grow Canadian Restaurant Base by ~1/3 by 2020 Reimage ~60% of Canadian Restaurants by 2020 Improve Quality of Earnings Through Increased Rental Income and Royalties GOALS: Leverage turnkey development programs and other
Slide 10: Prospective Buyers
PROSPECTIVE BUYERS • New and existing franchisees • Strong operators with proven success • Strong financially and well-capitalized • Growth mindset – commitment to Image Activation and new restaurant development • Demonstrated commitment to customer service
Slide 11: Todd Penegor, Chief Financial Officer
© 2013 Oldemark LLC TODD PENEGOR 12 Chief Financial Officer
Slide 12: 2014 Second Quarter Results
2014 Second Quarter Results © 2013 Oldemark LLC
Slide 13: Q2 2014 Highlights
Q2 2014 Highlights *See reconciliation of Adjusted EBITDA in the appendix. SALES $424.8 $571.2 -25.6 FRANCHISE REVENUES 98.6 79.3 24.3 TOTAL REVENUES $523.4 $650.5 -19.5 ADJUSTED EBITDA* $104.2 $102.1 2.1 Q2 Q2 % Change (Unaudited) $ in millions
Slide 14: Q2 2014 Highlights
Q2 2014 Highlights G&A $67.0 $74.8 -10.4 OPERATING PROFIT* 63.9 57.0 +12.1 ADJUSTED EPS* 0.09 0.08 +12.5 REPORTED EPS 0.08 0.03 +166.7 Q2 Q2 % Change (Unaudited) $ in millions, except per-share amounts * The 2014 Operating profit results include Facilities action charges (net of benefits) of $0.9 mi
Slide 15: Q2 2014 vs. Q2 2013 – Adjusted EBITDA
Q2 2014 vs. Q2 2013 – Adjusted EBITDA Improved Quality of Earnings: Adjusted EBITDA growth in first full quarter after sale of 418 U.S. restaurants *Includes unfavorable commodities impact of 80 bps $ in millions
Slide 16: Selected Balance Sheet Highlights
Selected Balance Sheet Highlights Cash $372 Senior Debt $1,405 Capital Leases and Other Debt Total Debt $1,454 TTM Adjusted EBITDA $379 Total Debt / TTM Adjusted EBITDA 3.8x Net Debt / TTM Adjusted EBITDA 2.9x $ in millions Q2 2014
Slide 17: 2014 Q2 Year to Date Cash Flow Highlights
2014 Q2 Year to Date Cash Flow Highlights Cash Flow from Operations $81.0 Capital Expenditures 114.5 Beginning Cash Balance $580.2 Change In Cash (208.5) Ending Cash Balance $371.7 Q2 2014 $ in millions
Slide 18: Canadian Growth Strategy
Canadian Growth Strategy © 2013 Oldemark LLC
Slide 19: Canadian Growth Strategy: Overview and Strategic Rationale
Canadian Growth Strategy Overview of Wendy’s Canada Strategic rationale • 367 total restaurants; 137 Company operated • Plan is to sell all Company-operated restaurants in Canada by end of Q1 2015, lowering total system company ownership from 15% to 13% • Develops under-scale Canadian presence over
Slide 20: Expected Outcomes
Expected Outcomes • Reduce ongoing annualized G&A by ~ $8 million • Adjusted EBITDA-dilutive by up to $5 million in 2015 • Adjusted EBITDA-neutral in 2016 • Adjusted EBITDA-accretive in 2017 and beyond • Net income-neutral in 2015 • Slightly net income-accretive in 2016 and beyond
Slide 21: Cash Priorities
CASH PRIORITIES Ended 2014 Q2 with $372M of Cash Invest in our Business Dividend Growth Share Repurchase • Image Activation Reimages, including Increasing Scrape & Rebuilds • Generally in line with earnings growth (subject to Board approval) • $100MM share repurchase authorization through 12/31/15 t
Slide 22: 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. Reaffirming: • Company-operated Same-Restaurant Sales growth of 2.5 to 3.5% • Reduction in interest expense of approximately $15 mil
Slide 23: Image Activation Franchise Adoption Accelerating
Image Activation Franchise Adoption Accelerating HIGHER INVESTMENT CORRELATES WITH HIGHER SALES LIFTS AND FLOW-THROUGH TOTAL SYSTEM REIMAGES AND NEW BUILDS 2014 REIMAGE TARGETS* 236 59 10 410-460 2011A 2012A 2013A 2014E • Investment: $450,000 to $650,000 • Sales lifts: 10% to 20% • Flow-through: 40%
Slide 24: 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 COMPANY EXPECTS INCREMENTAL ANNUALIZED G&A REDUCTION OF ~$8 MM FROM CANADIAN GROWTH INITIATIVE BY BEGINNING OF Q1 2015 HIGHER EQUITY COMPENSATION EXPENSE TO PARTIALLY OFFSET
Slide 25: Long-Term Outlook
Long-Term Outlook SAME-RESTAURANT SALES 3%+ 2015 ADJUSTED EBITDA ADJUSTED EPS Growth Rate in Mid-to-High Single-Digits Growth Rate in Mid-Teens 2016 ADJUSTED EBITDA Growth Rate in High-Single-Digits 2017 & BEYOND ADJUSTED EBITDA Growth Rate in Low-Double Digits NEW
Slide 26: David Poplar, Vice President Investor Relations
© 2013 Oldemark LLC DAVID POPLAR 28 Vice President Investor Relations
Slide 27: Q&A
Q&A
Slide 28: Appendix
Appendix
Slide 29: Reconciliation of Adjusted EBITDA to Net Income
Reconciliation of Adjusted EBITDA to Net Income Adjusted EBITDA 104,232 $ 102,086 $ 191,566 $ 179,385 $ (Less) plus: Depreciation and amortization (39,495) (38,719) (81,516) (90,516) Facilities action charges (income), net (883) (6,377) 43,150 (9,415) Impairment of long-lived assets - - (332) - Oper
Slide 30: Reconciliation of Adjusted Income and Adjusted EPS to Net Income and 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 34,217 $ 0.09 $ 31,779 $ 0.08 $ (Less) plus: Depreciation of assets that will be replaced as part of the Image Activation initiat
Slide 31: Slide 31