1
FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 1, 2001
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-8116
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WENDY'S INTERNATIONAL, INC.
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(Exact name of Registrant as specified in its charter)
Ohio 31-0785108
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 256, 4288 West Dublin-Granville Road, Dublin, Ohio 43017-0256
----------------------------------------------------------- ----------
(Address of principal executive offices) (Zip code)
(Registrant's telephone number, including area code) 614-764-3100
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Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. YES X NO .
Indicate the number of shares outstanding in each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 4, 2001
-------------------------------------------- --------------------------
Common shares, $.10 stated value 113,654,000 shares
Exhibit index on page 15.
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WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
Pages
-----
PART I: Financial Information
Item 1. Financial Statements:
Consolidated Condensed Statements of Income for the quarters
ended April 1, 2001 and April 2, 2000 3
Consolidated Condensed Balance Sheets as of April 1, 2001
and December 31, 2000 4-5
Consolidated Condensed Statements of Cash Flows for the
quarters ended April 1, 2001 and April 2, 2000 6
Notes to the Consolidated Condensed Financial Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-12
PART II: Other Information
Item 6. Exhibits and Reports on Form 8-K 13
Signature 14
Index to Exhibits 15
Exhibit 99 16-17
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WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
QUARTER ENDED QUARTER ENDED
APRIL 1, 2001 APRIL 2, 2000
------------- --------------
REVENUES
Retail sales .................... $449,603 $422,325
Franchise revenues .............. 105,935 96,247
-------- --------
555,538 518,572
-------- --------
COSTS AND EXPENSES
Cost of sales ................... 288,502 267,587
Company restaurant operating
costs ......................... 98,409 91,216
Operating costs ................. 21,029 18,801
General and administrative
expenses ...................... 53,761 50,998
Depreciation and amortization
of property and equipment ..... 28,706 25,837
Other expense (income) .......... (531) 3,198
Interest, net ................... 4,236 3,456
-------- --------
494,112 461,093
-------- --------
INCOME BEFORE INCOME TAXES .......... 61,426 57,479
INCOME TAXES ........................ 22,727 21,554
-------- --------
NET INCOME .......................... $ 38,699 $ 35,925
======== ========
BASIC EARNINGS PER COMMON SHARE ..... $.34 $.31
==== ====
DILUTED EARNINGS PER COMMON SHARE ... $.33 $.30
==== ====
DIVIDENDS PER COMMON SHARE .......... $.06 $.06
==== ====
BASIC SHARES ........................ 114,341 116,398
======== ========
DILUTED SHARES ...................... 123,116 124,269
======== ========
The accompanying Notes are an integral part of the Consolidated
Condensed Financial Statements.
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WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
APRIL 1, 2001 DECEMBER 31, 2000
------------- -----------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents .. $ 135,603 $ 169,718
Accounts receivable, net ... 70,204 75,960
Notes receivable, net ...... 11,785 11,832
Deferred income taxes ...... 20,409 21,503
Inventories and other ...... 40,956 40,086
---------- ----------
278,957 319,099
---------- ----------
PROPERTY AND EQUIPMENT ......... 2,081,930 2,074,574
Accumulated depreciation and
amortization ............. (594,784) (577,484)
---------- ----------
1,487,146 1,497,090
---------- ----------
NOTES RECEIVABLE, NET .......... 37,940 38,932
GOODWILL, NET .................. 42,974 43,719
DEFERRED INCOME TAXES .......... 19,243 20,572
OTHER ASSETS ................... 37,764 38,304
---------- ----------
$1,904,024 $1,957,716
========== ==========
The accompanying Notes are an integral part of the Consolidated
Condensed Financial Statements.
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WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
APRIL 1, 2001 DECEMBER 31, 2000
------------- -----------------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ........................... $ 82,384 $ 125,564
Accrued expenses:
Salaries and wages ...................... 16,241 34,663
Taxes ................................... 52,424 50,867
Insurance ............................... 39,115 38,414
Other ................................... 40,424 42,965
Current portion of long-term
obligations ............................. 3,961 3,943
---------- ----------
234,549 296,416
---------- ----------
LONG-TERM OBLIGATIONS
Term debt .................................. 203,940 204,027
Capital leases ............................. 43,665 44,357
---------- ----------
247,605 248,384
---------- ----------
DEFERRED INCOME TAXES .......................... 71,625 72,750
OTHER LONG-TERM LIABILITIES .................... 14,826 14,023
COMMITMENTS AND CONTINGENCIES
COMPANY-OBLIGATED MANDATORILY REDEEMABLE
PREFERRED SECURITIES OF WENDY'S
FINANCING I, HOLDING SOLELY WENDY'S
CONVERTIBLE DEBENTURES ...................... 200,000 200,000
SHAREHOLDERS' EQUITY
Preferred stock, authorized: 250,000 shares
Common stock, $.10 stated value per share
Authorized: 200,000,000 shares
Issued and Exchangeable:
136,753,000 and 136,188,000 shares,
respectively ........................... 12,130 12,074
Capital in excess of stated value .......... 434,335 423,144
Retained earnings .......................... 1,242,847 1,211,015
Accumulated other comprehensive expense .... (45,994) (27,133)
---------- ----------
1,643,318 1,619,100
Treasury stock at cost: 22,678,000 and
21,978,000 shares, respectively .......... (507,899) (492,957)
---------- ----------
1,135,419 1,126,143
---------- ----------
$1,904,024 $1,957,716
========== ==========
The accompanying Notes are an integral part of the Consolidated
Condensed Financial Statements.
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WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
QUARTER QUARTER
ENDED ENDED
APRIL 1, 2001 APRIL 2, 2000
------------- -------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES ........................................ $ 41,244 $ 41,221
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from asset dispositions .................. 6,840 11,264
Capital expenditures .............................. (66,012) (62,411)
Payments on notes receivable ...................... 1,712 1,629
Other investing activities ........................ (4,755) 304
-------- --------
Net cash used in investing activities ........... (62,215) (49,214)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock ............ 9,630 994
Repurchase of common shares ....................... (14,942) (73,718)
Principal payments on long-term
obligations ..................................... (965) (1,520)
Dividends paid on common and
exchangeable shares ............................. (6,867) (7,051)
-------- --------
Net cash used in financing activities ........... (13,144) (81,295)
-------- --------
DECREASE IN CASH AND CASH
EQUIVALENTS ......................................... (34,115) (89,288)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD ........................................... 169,718 210,785
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ............ $135,603 $121,497
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid ..................................... $ 3,863 $ 3,782
Capitalized lease obligations incurred ............ 1,283 323
Income taxes paid ................................. 20,138 16,416
The accompanying Notes are an integral part of the Consolidated
Condensed Financial Statements.
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WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. MANAGEMENT'S STATEMENT
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments (all of which are normal and recurring
in nature) necessary to present fairly the condensed financial position of
Wendy's International, Inc. and Subsidiaries (the Company) as of April 1,
2001 and December 31, 2000 and the condensed results of operations and
comprehensive income (see Note 3) for the quarters ended April 1, 2001 and
April 2, 2000 and cash flows for the quarters ended April 1, 2001 and April
2, 2000. The Notes to the audited Consolidated Financial Statements which
are contained in the Financial Statements and Other Information furnished
with the Company's 2001 Proxy Statement should be read in conjunction with
these Consolidated Condensed Financial Statements.
NOTE 2. NET INCOME PER SHARE
Basic earnings per common share are computed by dividing net income
available to common shareholders by the weighted average number of common
shares outstanding. Diluted computations include assumed conversions of
stock options, net of shares repurchased from proceeds, and
company-obligated mandatorily redeemable preferred securities, when
dilutive, and the elimination of related expenses, net of income taxes.
Options to purchase 3.5 million and 8.2 million shares of common stock for
the quarters ended April 1, 2001 and April 2, 2000, respectively, were not
included in the computation of diluted earnings per common share. Because
the exercise price of these options was greater than the average market
price of the common shares in the respective periods, they are excluded
from the calculation due to the antidilutive effect.
The computations of basic and diluted earnings per common share are shown
below:
QUARTER QUARTER
ENDED ENDED
APRIL 1, 2001 APRIL 2, 2000
------------- -------------
(In thousands, except per share data)
Income for computation of basic earnings
per common share ....................... $ 38,699 $ 35,925
Interest savings (net of taxes) on assumed
conversions ............................ 1,598 1,585
-------- --------
Income for computation of diluted
earnings per common share .............. $ 40,297 $ 37,510
======== ========
Weighted average shares for computation
of basic earnings per common share ..... 114,341 116,398
Dilutive stock options ................... 1,202 298
Assumed conversions ...................... 7,573 7,573
-------- --------
Weighted average shares for computation
of diluted earnings per common share ... 123,116 124,269
======== ========
Basic earnings per common share .......... $.34 $.31
==== ====
Diluted earnings per common share ........ $.33 $.30
==== ====
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NOTE 3. CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
The components of other comprehensive expense and total comprehensive income are
shown below:
QUARTER QUARTER
ENDED ENDED
APRIL 1, 2001 APRIL 2, 2000
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(In thousands)
Net income................................................. $ 38,699 $ 35,925
Other comprehensive expense:
Translation adjustments.................................... (18,861) (1,051)
-------- --------
Comprehensive income....................................... $ 19,838 $ 34,874
======== ========
The translation adjustment change of $17.8 million primarily reflects the
weakening of the Canadian dollar. The currency rate was $1.58 at the end of the
first quarter 2001, versus $1.45 at the end of the first quarter 2000.
NOTE 4. SEGMENT REPORTING
The Company operates exclusively in the food-service industry and has determined
that its reportable segments are those that are based on the Company's methods
of internal reporting and management structure. The Company's reportable
segments are Wendy's and Tim Hortons. There were no material amounts of revenues
or transfers between reportable segments. The table below presents information
about reportable segments (in thousands):
WENDY'S TIM HORTONS TOTAL
------- ----------- -----
QUARTER ENDED APRIL 1, 2001
Revenues $424,949 $130,589 $555,538
Income before income taxes 62,520 28,340 90,860
Capital expenditures 48,062 17,950 66,012
QUARTER ENDED APRIL 2, 2000
Revenues $401,135 $117,437 $518,572
Income before income taxes 62,741 24,993 87,734
Capital expenditures 42,045 20,366 62,411
A reconciliation of reportable segment income before income taxes to
consolidated income before income taxes follows:
QUARTER QUARTER
ENDED ENDED
APRIL 1, 2001 APRIL 2, 2000
------------- -------------
(In thousands)
Income before income taxes................................. $ 90,860 $ 87,734
Corporate charges.......................................... (29,434) (30,255)
-------- --------
Consolidated income before income taxes.................... $ 61,426 $ 57,479
======== ========
Corporate charges include certain overhead costs and net interest expense.
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WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company's diluted earnings per common share increased 10.0% to $.33 in the
first quarter 2001. Also in the quarter, consolidated revenues increased 7.1% to
$556 million and systemwide sales increased 7.1% to $1.9 billion. Average
same-store sales increased for both Wendy's and Tim Horton's Canadian and U.S.
restaurants during the quarter.
WENDY'S
RETAIL SALES
Wendy's retail sales for the first quarter 2001 increased $20.1 million, or
5.8%, to $365.5 million. Of this total, domestic Wendy's retail sales increased
7.0% to $329.7 million. For domestic company operated Wendy's, average
restaurant sales increased 1.2% to $316,674 per restaurant and average
same-store sales increased 1.4% in the first quarter. The average number of
transactions in domestic company operated Wendy's decreased .6% in the quarter
and domestic selling prices increased 1.8%. In the first quarter, the average
number of Wendy's company operated domestic restaurants increased by 57 compared
to the prior year.
Canadian Wendy's retail sales increased $2.2 million, or 9.8% in the first
quarter. Canadian Wendy's same-store sales for company operated restaurants, in
local currency, increased 4.6% in the first quarter 2001. With the closure of
the Company's Argentina market in fourth quarter 2000, nearly all international
company operated restaurants outside Canada have been shut down. Therefore,
other international retail sales decreased $4.1 million in the quarter.
FRANCHISE REVENUES
Wendy's franchise revenues increased $3.8 million, or 6.7%, to $59.5 million in
the quarter. Royalties, before reserves, increased $2.7 million, or 5.9%, to
$47.8 million. This was primarily a result of an average of 175 more Wendy's
domestic franchise restaurants being open in 2001 compared to 2000. In addition,
average net sales at franchise domestic restaurants increased 1.4% to $270,430
in the quarter. In local currency, Canadian Wendy's same-store franchise sales
increased 2.7%, while other international same-store franchise sales decreased
1.1%. Total Wendy's franchise restaurants open at quarter-end were 4,666 and
4,441, respectively, in 2001 and 2000.
In the first quarter, asset gains in franchise revenues increased $1.0 million
in 2001, primarily from more domestic company operated stores sold to
franchisees.
COST OF SALES AND RESTAURANT OPERATING COSTS
Wendy's cost of sales increased $15.1 million, or 7.2%, to $222.9 million in the
quarter. Of this total, Wendy's domestic restaurant cost of sales increased 8.4%
to $200.3 million. Cost of sales as a percent of Wendy's domestic retail sales,
increased .8%. Domestic food costs, as a percent of domestic retail sales,
increased .2% in the quarter, primarily reflecting an 8.8% increase in beef
costs, partly offset by a 1.8% selling price increase. Domestic labor costs
increased .8%, as a percent of sales, reflecting a 4.1% increase in the average
hourly crew rate, and average sales increases insufficient to leverage labor
costs.
Canadian Wendy's cost of sales increased .8%, as a percent of retail sales,
reflecting higher commodity prices. Other international restaurants reduced cost
of sales $2.5 million, primarily due to the closure of the Argentina market.
Wendy's company restaurant operating costs increased $7.7 million, or 8.9%, to
$93.9 million in the quarter. Of this total, domestic Wendy's company restaurant
operating costs increased 12.1% to $86.6 million. As a percent of retail sales,
domestic restaurant costs increased 1.2% versus the same quarter a year ago,
reflecting higher utility costs as well as increased health insurance and
pension costs.
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The factors discussed above resulted in Wendy's domestic company operating
margin decreasing 2.0% to 13.8% compared with first quarter 2000.
Canadian Wendy's company restaurant operating costs increased $641,000, and as a
percent of retail sales, were 27.5% and 27.4% for 2001 and 2000, respectively.
Other international restaurant operating costs decreased $2.3 million reflecting
the closure of the Argentina market.
OPERATING COSTS
Wendy's operating costs increased 2.8% to $3.7 million in first quarter 2001,
reflecting higher percentage rent due to higher retail sales.
TIM HORTONS
RETAIL SALES
Tim Hortons (Hortons) retail sales increased $7.2 million, or 9.4%, to $84.1
million in first quarter 2001. Of this total, Canadian warehouse sales (sales of
dry goods to franchisees) increased $8.2 million, or 13.4% to $68.8 million.
This reflected the increase in the number of Hortons' franchised restaurants
serviced and 9.9% same-store sales growth in local currency. Retail sales in the
U.S. decreased $2.5 million reflecting the strategy to franchise most of the
company operated restaurants.
FRANCHISE REVENUES
Hortons franchise revenues, net of reserves, increased $5.9 million, or 14.6%,
to $46.5 million in first quarter 2001. Canadian royalties increased 14.1% to
$9.8 million. Canadian rental income from restaurants leased to franchisees
increased 16.1% to $27.8 million. These increases reflected the increase in the
number of Canadian franchise restaurants open and the 9.9% same-store sales
growth in local currency.
COST OF SALES
The Hortons' Canadian warehouse cost of sales increased $6.6 million, or 13.7%,
to $54.5 million in 2001, reflecting additional sales to Canadian franchisees
due to the increased number of restaurants serviced and higher average sales per
restaurant. Warehouse cost of sales, as a percent of warehouse sales, increased
to 79.1% in 2001 from 78.9% in 2000 reflecting commodity prices. Hortons U.S.
cost of sales decreased $1.9 million reflecting the strategy to franchise most
of the company operated restaurants.
OPERATING COSTS
Hortons operating costs increased $2.1 million, or 14.0%, to $17.4 million in
the quarter. Canadian Hortons rent expense increased 6.0% to $7.6 million in the
quarter, reflecting the growth in the number of properties being leased and then
subleased to Canadian franchisees, as well as higher percentage rent due to
higher sales. Cost of equipment increased 23.0% to $4.4 million in 2001 due to
an increase in the number of franchise store openings. Costs of operating and
maintaining Canadian warehouse operations increased 22.6% to $4.2 million in
first quarter 2001.
CONSOLIDATED
GENERAL AND ADMINISTRATIVE EXPENSES
Company general and administrative expenses for the first quarter 2001 increased
5.4% to $53.8 million. As a percent of revenues, costs were .1% lower at 9.7%
versus 9.8% last year. The dollar increase in 2001 primarily reflects an
increase in salaries and benefits.
DEPRECIATION AND AMORTIZATION EXPENSES
Depreciation and amortization expenses for the quarter increased over 2000
reflecting the Company's information technology initiatives and additional
restaurant development.
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OTHER EXPENSE
In the first quarter of last year, a $3.0 million legal reserve and $900,000 in
executive search charges were incurred. There were no similar charges in the
current quarter, which resulted in a $3.7 million reduction of other expense.
INTEREST, NET
Net interest expense increased $780,000 to $4.2 million in the first quarter
2001, as a result of lower interest rates on investments, more cash invested in
nontaxable investments and a lower average investable cash balance.
FOREIGN CURRENCY
The primary currency exposure the Company has is to the Canadian dollar. The
results of Wendy's and Tim Hortons' Canadian operations are translated into U.S.
dollars. The change in the Canadian dollar this year versus last year reduced
income $.01 in the first quarter of 2001.
COMPREHENSIVE INCOME
Comprehensive income decreased $15.0 million in the quarter. Reported net income
increased $2.8 million. However, due to unfavorable movement in the Canadian
exchange rate, translation adjustments included in other comprehensive expense
increased $17.8 million (see Note 3).
FINANCIAL CONDITION
The Company's financial condition continues to be very strong at the end of the
first quarter of 2001. The long-term debt to equity and debt-to-total
capitalization ratios were 22% and 18%, respectively, at April 1, 2001. Cash
flow from operations was $41.2 million in both years. During the quarter, cash
of $14.9 million was used to repurchase 700,000 common shares. A total of $506
million in cash has been used to purchase 22.5 million shares since 1998.
Capital expenditures amounted to $66 million for 2001 compared with $62 million
for 2000.
OUTLOOK
The Company continues to employ its strategic initiatives as outlined in the
Financial Statements and Other Information furnished with the Company's 2001
Proxy Statement. These initiatives include leveraging the Company's core assets,
growing same-store sales, improving store-level productivity to enhance margins,
improving underperforming operations, repurchasing common shares and
implementing new technology initiatives. The Company intends to allocate
resources to improve long-term return on assets and invested capital, and to
remain focused on established operational strategies of exceeding customer
expectations, fostering a performance-driven culture, delivering a balanced
message of brand equity plus value in marketing and growing a healthy restaurant
system. New restaurant development continues to be very important. The Company
also intends to evaluate potential mergers, acquisitions, joint venture
investments, alliances, vertical integration opportunities and divestitures. The
Company's long-term goal for EPS growth continues to be in the 12% to 15% range,
excluding unusual items.
The Company currently anticipates that 515-555 new Wendy's and Hortons
restaurants could be opened systemwide (both company and franchise) during 2001,
subject to the continued ability of the Company and its franchisees to complete
permitting and meet other conditions and to comply with other regulatory
requirements for the completion of stores and to obtain financing for new
restaurant development. Year-to-date 2001, there have been 92 new restaurants
opened.
Cash flow from operations, cash and investments on hand, possible asset sales,
and cash available through existing revolving credit agreements and through the
possible issuance of securities should provide for the Company's projected cash
requirements, including cash for capital expenditures, future acquisitions of
restaurants from franchisees, stock repurchases or other corporate purposes. If
additional funds are needed for mergers, acquisitions or other strategic
investments, the Company believes it could borrow additional cash and still
maintain its investment grade rating.
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MARKET RISK
The Company adopted Financial Accounting Standard Number 133 - "Accounting for
Derivative Instruments and Hedging Activities" in the first quarter 2001. This
statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It requires recognition of all
derivatives as either assets or liabilities in the financial statements at fair
value. Currently this statement does not materially impact the Company's
financial statements.
The Company's debt is primarily denominated in U.S. dollars, at fixed interest
rates, which limits financial instruments risk. Therefore, the Company does not
currently utilize any derivatives to alter interest rate risk. Currency exposure
is predominately related to Canadian operations, since cash exposure outside
North America is primarily limited to royalties. The Canadian currency has been
reasonably stable over time, and the Company currently does not hedge its cash
flow exposure to Canadian currency fluctuations. Also, the Company does not
hedge its exposure to currency fluctuations related to royalty collections
outside North America, because it does not feel the risk is material.
The Company purchases certain products in the normal course of business, which
are affected by commodity prices. Therefore, the Company is exposed to some
price volatility related to weather, and various other market conditions outside
the Company's control. However, the Company does employ various purchasing and
pricing contract techniques, in an effort to minimize volatility. The Company
does not generally make use of financial instruments to hedge commodity prices,
partly because of the contract pricing utilized. While volatility can occur,
which would impact profit margins, there are generally alternative suppliers
available and if the pricing problem is prolonged, the Company has some ability
to increase selling prices to offset the commodity prices.
SAFE HARBOR STATEMENT
Certain information contained in this Form 10-Q, particularly information
regarding future economic performance and finances, plans and objectives of
management, is forward looking. In some cases, information regarding certain
important factors that could cause actual results to differ materially from any
such forward-looking statement appears together with such statement. In
addition, the following factors, in addition to other possible factors not
listed, could affect the Company's actual results and cause such results to
differ materially from those expressed in forward-looking statements. These
factors include: competition within the quick-service restaurant industry, which
remains extremely intense, both domestically and internationally, with many
competitors pursuing heavy price discounting; changes in economic conditions;
changes in consumer perceptions of food safety; harsh weather, particularly in
the first and fourth quarters; changes in consumer tastes; labor and benefit
costs; legal claims; risks inherent to international development (including
currency fluctuations); the continued ability of the Company and its franchisees
to obtain suitable locations and financing for new restaurant development;
governmental initiatives such as minimum wage rates, taxes and possible
franchise legislation; the ability of the Company to successfully complete
transactions designed to improve its return on investment; and other factors set
forth in Exhibit 99 attached hereto.
The number of Wendy's and Tim Hortons restaurants open as of April 1, 2001 and
April 2, 2000 was as follows:
2001 2000
----- -----
Wendy's
Company ........................ 1,162 1,114
Franchise ...................... 4,666 4,441
----- -----
Total Wendy's .................. 5,828 5,555
===== =====
Tim Hortons
Company ........................ 105 107
Franchise ...................... 1,912 1,722
----- -----
Total Tim Hortons............... 2,017 1,829
===== =====
Total System ................... 7,845 7,384
===== =====
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PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Index to Exhibits on Page 15.
(b) The Company filed one Report on Form 8-K during the first
quarter 2001. The Form 8-K filed March 6, 2001 announced a
joint venture to build a state-of-the-art bakery facility in
Ontario, Canada. A copy of the press release issued March 6,
2001 was attached.
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WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WENDY'S INTERNATIONAL, INC.
---------------------------
(Registrant)
Date: 05/15/01 /s/ Kerrii B. Anderson
--------- --------------------------------
Kerrii B. Anderson
Executive Vice President and
Chief Financial Officer
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WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit
Number Description Page No.
------ ----------- --------
Safe Harbor Under
the Private Securities
99 Litigation Reform Act of 1995 16-17
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