Form 8-K Wendy's Co For: May 11
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 11, 2016
THE WENDYS COMPANY
(Exact name of registrant as specified in its charter)
Delaware | 1-2207 | 38-0471180 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
One Dave Thomas Blvd., Dublin, Ohio | 43017 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (614) 764-3100
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 | Regulation FD Disclosure. |
On May 11, 2016, management of The Wendys Company (the Company) gave a slide presentation during the Companys fiscal 2016 first quarter conference call. The presentation materials are attached hereto as Exhibit 99.1 and incorporated herein by reference. These materials may also be used by the Company at one or more subsequent conferences with analysts and investors.
The information contained in the attached presentation materials is summary information that is intended to be considered in the context of the Companys Securities and Exchange Commission filings and other public announcements. The Company undertakes no duty or obligation to publicly update or revise this information, although it may do so from time to time.
The information in this Current Report on Form 8-K, including the exhibit furnished pursuant to Item 9.01, shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that section. Furthermore, the information in this Current Report on Form 8-K, including the exhibit furnished pursuant to Item 9.01, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit No. | Description | |
99.1 | Conference call slide presentation materials used beginning on May 11, 2016. |
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
THE WENDYS COMPANY | ||||||
Date: May 11, 2016 | By: | /s/ Dana Klein | ||||
Dana Klein | ||||||
Senior Vice President Corporate and Securities | ||||||
Counsel, and Assistant Secretary interim General Counsel |
EXHIBIT INDEX
Exhibit No. | Description | |
99.1 | Conference call slide presentation materials used beginning on May 11, 2016. |
© 2015 Quality Is Our Recipe, LLC First-Quarter 2016 Conference Call May 11, 2016 Exhibit 99.1 |
© 2015 Quality Is Our Recipe, LLC LILIANA ESPOSITO Chief Communications Officer |
Todays Agenda First Quarter Update Todd Penegor President & Chief Financial Officer CFO Introduction Gunther Plosch Incoming Chief Financial Officer Q&A 3 |
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 11, 2016
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), adjusted EBITDA margin and adjusted earnings per
share. Adjusted EBITDA, adjusted EBITDA margin 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 11, 2016 and posted on
www.aboutwendys.com. Forward-Looking Statements and
Non-GAAP Financial Measures
4 |
5 |
1968-2016 David Poplar |
7 |
© 2015 Quality Is Our Recipe, LLC TODD PENEGOR President and Chief Financial Officer |
© 2015 Quality Is Our Recipe, LLC NA COMPANY-OPERATED RESTAURANT MARGIN INCREASES 250 BPS TO 17.2% SYSTEM OPTIMIZATION, IMAGE ACTIVATION, NEW RESTAURANT DEVELOPMENT ON TRACK 9 Q1 NA SYSTEM SRS OF 3.6%; TWO-YEAR SRS OF 6.8% HIGHEST IN 10+ YEARS COMPANY RAISES 2016 ADJ. EPS OUTLOOK TO $0.38 TO $0.40 COMPANY RAISES 2016 ADJ. EBITDA OUTLOOK TO DOWN 1% TO UP 1% |
Long-Term Growth Drivers 10 2016 & Beyond SRS Acceleration (~3% System Growth) 2017 & Beyond N.A. Net Restaurant Development (~500 Net New Restaurants) 2019 & Beyond International Expansion (Establish Foundation for Accelerated Growth) |
|
12 Balance Across the Menu Price/Value Core LTO |
Customers Are Noticing the Stronger Wendys Source: Wendys Brand Health Tracking, Q1 2016 vs.Q1 2015
High Quality
Food Worth What You Pay Modern and Up To Date Restaurants 13 +25% +12% +16% |
N.A. System SRS 3.6% 3.2% 2-Year 6.8% N.A. Co. Rest. Margin 17.2% 14.7% +250 bps G&A $64.6 $59.7 (8.2%) Adjusted EBITDA** $98.1 $80.8 21.4% Adjusted EBITDA Margin** 25.9% 17.9% +800 bps Adjusted EPS** $0.11 $0.06 83.3% $ Mils (except per share amounts) First Quarter Financial Highlights 2016* 2015* B/(W) ** See Reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS in the Appendix.
14 (Unaudited) * Due to the May 2015 sale of its bakery business, the Company has presented its bakery results as discontinued operations in its financial statements. |
Q1 2016 vs. Q1 2015: Adjusted EBITDA 15 * * Excludes ~$3M of Bakery EBITDA (Unaudited) $ in millions Q1 2015 Restaruant EBITDA (incl IA) $81 $10 Lease Buyout $7 ($16) ($5) $21 Disposed Restaurant EBITDA (Sys Op) Q1 2016 G&A $98 Royalties, Franchise Fees & Net Rental Income 375 Fewer Company Restaurant |
Q1 2016 vs. Q1 2015: Adjusted EPS Interest Expense Q1 2016 $0.04 $0.06 Q1 2015 Adjusted EBITDA Share Repurchases Depreciation $0.01 ($0.03) $0.03 $0.11 16 (Unaudited) |
Committed to Returning Cash to Shareholders 17 Ended Q1 with $313 million of cash Repurchased 4.9 Million shares for $48.2 Million in Q1 Approximately $308 Million remains against $1.4 Billion share repurchase
authorization
Remain committed to utilize remaining authorization as proceeds come in
from System Optimization sales
|
System Optimization Update System Optimization III On track to complete by the end of 2016 55 restaurants sold in Q1 Continue to expect pre-tax proceeds of $400-$475M Expect Company ownership of ~5% at YE Ongoing System Optimization Facilitated 113 franchisee-to-franchisee transfers via Buy and Flip in Q1 Catalyst for growth by evolving franchisee base & driving new restaurant development / reimaging 18 |
Reimaging Momentum Continues 10 74 308 794 1,313 1,853 2011 2012 2013 2014 2015 2016E Total System Annual Reimages & New Builds* Total System Cumulative Reimages & New Builds* 10 64 234 486 519 540 2011 2012 2013 2014 2015 2016E ~24% of NA system Image Activated at the end of Q1 2016 * Counts include Franchise Reimages open or under construction 19 |
Compelling Reimaging Economics Mid-Single Digit to Low-Double Digit Sales Lift Minimal Closure Time ~70-80% of Sales Retained During Closure Time Profit Flow Through 40-50%** Optional Upgrades to Tailor to Trade Area STANDARD REFRESH $300K US Investment* $500K US Investment* * Does not include deferred maintenance or franchisee chosen upgrades, ** Profit Before Occupancy Flow Through
20 |
2016 Outlook Reaffirming NA System SRS of ~3% Company-operated restaurant margin of 18.5 to 19.0 percent CAPEX of ~$135 million to $145 million Free Cash Flow of ~$50 million to $75 million Revising Commodity costs to decrease ~3% Reported effective tax rate of ~38 to 40% / Adjusted tax rate of ~32 to 34%
G&A expense of ~$245 to $250 million COMPANY NOW EXPECTS ADJ. EPS OF $0.38-$0.40
AND ADJ. EBITDA OF DOWN 1% TO UP 1% 21 |
2020 North America System Goals Are On Track! AUVs Restaurant Margins Sales to Investment Ratio New Restaurants Total Reimaged Restaurants Achievement requires two growth drivers: 22 (~500 Net) $2MM 20% 1.3x 1,000 60% + BRAND RELEVANCE ECONOMIC MODEL RELEVANCE |
© 2015 Quality Is Our Recipe, LLC GUNTHER PLOSCH Incoming Chief Financial Officer |
© 2015 Quality Is Our Recipe, LLC Peter Koumas Manager Investor Relations Peter.Koumas@wendys.com (614) 764 - 8478 |
2016 Investor Relations Calendar: Key Dates May 20 Kansas City (SunTrust) June 6 CFO Reception (New York) June 7 Goldman Sachs (New York) June 8 Stephens (New York) June 13-14 Los Angeles, Pasadena, Santa Monica (Guggenheim debt / CL King equity) August 10 2Q earnings release 25 |
Q&A 26 |
Appendix 27 |
Reconciliation of Income from Continuing Operations to Adjusted EBITDA from
Continuing Operations
28 In Thousands (Unaudited) |
Reconciliation of Income and Diluted Earnings Per Share from Continuing Operations to
Adjusted Income and Adjusted Earnings Per Share from Continuing
Operations 29
In Thousands except per-share amounts
(Unaudited) |
30 |
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