Triarc Reports Strong Second Quarter 1999 Results With Adjusted EBITDA Up 12%Premium beverage adjusted EBITDA increases 20% Restaurant franchising adjusted EBITDA increases 12% Premium beverage case sales grow 11%NEW YORK--(BUSINESS WIRE)--Aug. 19, 1999-- Triarc Companies, Inc. (NYSE: TRY - news) announced today a 12% increase in adjusted EBITDA in the second quarter of 1999, due to continued strong results at both Snapple®, Triarc's leading premium beverage brand, and Arby's®, Triarc's restaurant franchising business. Second quarter 1999 revenues from premium beverages increased 11% to $196.4 million versus the comparable 1998 quarter, while revenues for restaurant franchising improved 5% to $20.1 million. Adjusted EBITDA, defined as earnings before interest, taxes, depreciation and amortization, other non-operating items and unusual or non-recurring charges, was $35.6 million for the 1999 second quarter, up 12% compared to 1998. Second quarter 1999 adjusted EBITDA from premium beverages increased 20% to $23.5 million versus the comparable 1998 quarter, while adjusted EBITDA for restaurant franchising improved 12% in the 1999 second quarter to $12.0 million. Excluding unusual or non-recurring charges and credits, second quarter net income was $6.0 million or $.22 per diluted share, compared with 1998 second quarter net income on the same basis of $7.1 million or $.22 per diluted share. Commenting on second quarter 1999 results, Nelson Peltz, Chairman and Chief Executive Officer of Triarc said: ``Both our premium beverage and restaurant franchising businesses achieved strong results in the 1999 second quarter. Snapple's volume continued to grow at a double-digit rate both in the second quarter and year-to-date. New products have begun to aid sales for both Mistic and Royal Crown. Arby's posted positive same store sales and its pipeline for new restaurant franchise units grew to a record 1,125 during the second quarter. We remain optimistic that Triarc's branded consumer businesses will continue to grow steadily in 1999 and beyond.'' Premium Beverages Triarc's premium beverage operations, comprised of Snapple, Mistic® and Stewart's®, reported adjusted EBITDA of $23.5 million for the 1999 second quarter on revenues of $196.4 million, compared to adjusted EBITDA of $19.6 million on revenues of $177.7 million for the comparable period in 1998. The significant improvement in premium beverage adjusted EBITDA, compared to the 1998 second quarter, was fueled by a 10% volume increase for Snapple. Snapple's core diet and fruit drinks and Elements(TM), a new product platform of herbally enhanced drinks introduced in April 1999, were the primary factors contributing to this growth. During the second quarter, approximately 1.4 million cases of Elements were sold, indicating positive initial reaction from both distributors and consumers. Mistic year-over-year sales comparisons benefited from the October 1998 introduction of Mistic Orange Carrot juice drink, as well as the April 1999 introductions of Mistic Italian Ice Smoothies(TM), which uses the WhipperSnapple® technology, and Sun Valley Squeeze(TM), a line of fruit flavored drinks packaged in a proprietary 20 ounce plastic bottle with dramatic graphics. Initial results for July 1999 suggest that Mistic's performance continued to improve as a consequence of the further rollout of these new products. Triarc's third premium brand, Stewart's, continued its streak of double-digit volume growth in the second quarter of 1999. Finally, the Millrose New Jersey distribution operation, acquired in February 1999, positively impacted case sales in the second quarter of 1999. Royal Crown® Triarc's carbonated soft drink concentrate company, Royal Crown, reported adjusted EBITDA for the 1999 second quarter of $5.3 million on revenues of $34.3 million, compared to adjusted EBITDA of $5.0 million on revenues of $36.0 million for the comparable period in 1998. The improvement in adjusted EBITDA was the result of strength in RC's private label business. Recently introduced RC Edge(TM), the ``maximum power cola,'' which is specially formulated with energy enhancing ingredients and packaged in a 20 oz. blue bottle, also continued to show positive sales momentum in the 1999 second quarter. Triarc Restaurant Group Triarc Restaurant Group (``TRG'') reported adjusted EBITDA for the 1999 second quarter of $12.0 million on revenues of $20.1 million compared to adjusted EBITDA of $10.7 million on revenues of $19.2 million for the comparable period in 1998. Results were favorably impacted by an increase in domestic system-wide comparative store sales of 2.7% in the second quarter (2.3% for the first six months of 1999). Second quarter 1999 results were also favorably impacted by the continuing strong pace of Arby's new store openings. During the second quarter of 1999, franchisees added 38 new restaurants (60 for the first six months of 1999) to the Arby's system. In addition, Arby's franchisees added 11 new T.J. Cinnamons® bakeries, with their gourmet cinnamon rolls and premium coffees, to existing Arby's restaurants in the second quarter of 1999 (16 for the first six months of 1999), bringing the total now open to over 320. TRG also reported that Pasta Connection(TM), its pasta brand, continues to show encouraging results. As of August 15, 39 Pasta Connections have been opened by franchisees in existing Arby's locations. On July 8, Arby's announced an agreement with Sybra UK Ltd. to develop 102 Arby's units in southern England. As of August 15, Arby's franchisees had entered into commitments to build over 1,125 new units over the next several years, the largest level of new opening commitments in the brand's history. Operating Results Following is a comparison of revenues and adjusted EBITDA, from operations, for the
second quarter and first six-month periods of 1999 and 1998. Fiscal Second Quarter
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1998 1999
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Adjusted Adjusted
Revenues EBITDA Revenues EBITDA
(In millions)
Premium Beverage $ 177.7 $ 19.6 $ 196.4 $ 23.5
Royal Crown 36.0 5.0 34.3 5.3
--------- ------ -------- -------
Total Beverage Group 213.7 24.6 230.7 28.8
Restaurant Group 19.2 10.7 20.1 12.0
--------- ------ -------- -------
Total $ 232.9 35.3 $250.8 40.8
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Unallocated Corporate (3.6) (5.2)
------ -------
Total $ 31.7 $35.6
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-0-
Fiscal Six Months
-----------------------------------------
1998 1999
------------------ -------------------
Adjusted Adjusted
Revenues EBITDA Revenues EBITDA
(In millions)
Premium Beverage $ 299.4 $ 28.1 $ 325.5 $ 34.6
Royal Crown 68.2 10.1 65.3 10.5
--------- ------ -------- -------
Total Beverage Group 367.6 38.2 390.8 45.1
Restaurant Group 37.3 20.4 38.2 21.7
--------- ------ -------- -------
Total $ 404.9 58.6 $429.0 66.8
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Unallocated Corporate (7.8) (10.1)
------ -------
Total $50.8 $56.7
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Consolidated Results Following is a discussion of consolidated results for the second quarter and first six months of 1999 and 1998. Both the second quarter and first six months of 1999 were impacted by capital structure reorganization-related charges and other non-recurring charges described below. Excluding non-recurring charges and credits, 1999 second quarter net income was $6.0 million, or $.22 per share, versus net income of $7.1 million, or $.22 per share, in the comparable 1998 period. Including non-recurring charges and credits, the 1999 second quarter net income was $4.2 million, or $.15 per share, versus net income of $8.1 million, or $.25 per share, for the 1998 quarter. Excluding non-recurring charges and credits, Triarc reported net income for the first six months of 1999 of $6.5 million, or $.23 per share, compared to net income of $8.1 million, or $.25 per share for 1998. Including non-recurring charges and credits, Triarc reported a net loss for the first six months of 1999 of $9.1 million, or $.33 per share, and, for the first six months of 1998, net income of $12.3 million or $.37 per share. The following tables reconcile net income excluding unusual and non-recurring charges and credits to reported net income for the second quarter and first six months on a comparative basis. Fiscal Second Quarter
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1998 1999
--------------- --------------
Diluted Diluted
After Tax EPS After Tax EPS
(In millions, except per share amounts)
Net income excluding
unusual or non-recurring
charges and credits $7.1 $.22 $6.0 $.22
----- ----- ----- -----
Capital structure
reorganization related
charges -- -- (0.8) (.03)
Gain on the sale of Select 2.4 .07 -- --
Loss from discontinued
operations - Propane (1.4) (.04) (1.0) (.04)
----- ----- ----- -----
Total 1.0 .03 (1.8) (.07)
----- ----- ----- -----
Net income as reported $8.1 $.25 $4.2 $.15
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-0-
Fiscal Six Months Ended
----------------------------------
1998 1999
-------------- --------------
Diluted Diluted
After Tax EPS After Tax EPS
(In millions, except per share amounts)
Net income excluding
unusual or non-recurring
charges and credits $8.1 $.25 $6.5 $.23
----- ----- ----- -----
Capital structure
reorganization related
charges -- -- (3.0) (.11)
Gain on the sale of Select 2.4 .07 -- --
Income from discontinued
operations -
SEPSCO 2.6 .09 -- --
Propane (0.8) (.04) (0.5) (.02)
Extraordinary charges -
Refinancing related write-off
of deferred financing costs
and payment of redemption premium -- -- (12.1) (.43)
----- ----- ----- -----
Total 4.2 .12 (15.6) (.56)
----- ----- ----- -----
Net income as reported $12.3 $.37 $(9.1) $(.33)
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Unusual and Non-Operating Factors Triarc's results for the 1999 second quarter reflect capital structure reorganization-related charges of approximately $1.2 million, lower investment income of approximately $0.4 million, lower other income of approximately $2.7 million, primarily due to the $3.9 million gain on the sale of Select Beverages recognized in 1998, and increased interest expense. Interest expense for the 1999 quarter was approximately $5.2 million higher due to increased average borrowings from the February 1999 refinancings. Triarc's results for the 1999 first six months reflect capital structure reorganization-related charges of approximately $4.9 million, lower investment income of approximately $2.7 million, lower other income of $2.6 million, primarily due to the $3.9 million gain on the sale of Select Beverages recognized in the second quarter of 1998, and increased interest expense of approximately $8.5 million. Triarc's results for the 1999 second quarter and first six months reflect the impact of several charges related to its February 1999 debt refinancings. Triarc Beverage Holdings Corp. (``TBHC''), an indirect wholly-owned subsidiary of Triarc, has paid net dividends to, and incurred other charges benefiting, Triarc totaling $91 million. To provide for an equitable adjustment to options outstanding under TBHC's option plan due to these refinancing-related net dividends and charges incurred for the benefit of Triarc, capital structure reorganization-related charges of $1.2 million ($0.8 million after tax or $.03 per share) are reflected in the 1999 second quarter operating profit and $4.9 million ($3.0 million after tax or $.11 per share) in the 1999 first six months operating profit. Additional charges of $0.7 million pre-tax will be recorded during the remainder of 1999 as the options vest. Triarc also recorded an extraordinary charge of $12.1 million after tax, or $.43 per share, in the 1999 first quarter for the write-off of deferred financing costs and payment of redemption premium related to the debt repaid as part of the February 1999 debt refinancings. Triarc's result for the 1999 second quarter and first six months also reflect the results of its propane business investment as a discontinued operation. On July 19, 1999 Triarc sold substantially all of its remaining 42.7% interest in the propane business, retaining a 1% limited partner interest. The equity in the losses of the propane business and the recognition of deferred gain from the 1996 sale of a 57% interest in Triarc's propane business for the second quarter of 1999 are reported as discontinued operations and the equity in losses and deferred gain for the three and six months ended June 28, 1998 and the three months ended April 4, 1999 (included in the six months ended July 4, 1999) have been reclassified to reflect the propane business as discontinued operations. In addition, discontinued operations for the six months ended June 30, 1998 includes a credit to amounts provided in prior years for the estimated loss on disposal of certain discontinued operations of Southeastern Public Service Company, a subsidiary of Triarc. Triarc is a leading premium beverage company (Snapple, Mistic, Stewart's), a restaurant franchisor (Arby's, T.J. Cinnamons and Pasta Connection) and a producer of soft drink concentrates (Royal Crown, Diet Rite®, Nehi®). NOTE TO PRESS RELEASE The statements in this press release that are not historical facts, including most importantly, those statements preceded by, followed by, or that include the words ``may'', ``believes'', ``expects'', ``anticipates'' or the negation thereof, or similar expressions, constitute ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995 (the ``Reform Act''). For those statements, Triarc Companies, Inc. (the ``Company'') claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. Such forward-looking statements involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of Triarc and its subsidiaries to be materially different from any future results, performance or achievements express or implied by such forward-looking statements. Such factors include, but are not limited to, the following: competition, including product and pricing pressures; success of operating initiatives; the ability to attract and retain customers; development and operating costs; advertising and promotional efforts; brand awareness; the existence or absence of adverse publicity; market acceptance of new product offerings; new product and concept development by competitors; changing trends in customer tastes; the success of multi-branding; availability, location and terms of sites of restaurant development by franchisees; the ability of franchisees to open new restaurants in accordance with their development commitments; the performance by material customers of their obligations under their purchase agreements; changes in business strategy or development plans; quality of management; availability, terms and deployment of capital; business abilities and judgement of personnel; availability of qualified personnel; labor and employee benefit costs; availability and cost of raw materials and supplies; the success of the Company in identifying systems and programs that are not Year 2000 compliant; unexpected costs associated with Year 2000 compliance or the business risk associated with Year 2000 non-compliance by customers and/or suppliers; general economic, business and political conditions in the countries and territories in which the Company operates, including the ability to form successful strategic business alliances with local participants; changes in, or failure to comply with, government regulations (including accounting standards, environmental laws and taxation requirements); the costs and other effects of legal and administrative proceedings; the impact of general economic conditions on consumer spending; and other risks and uncertainties detailed in other current and periodic filings by Triarc with the Securities and Exchange Commission. Triarc will not undertake and specifically declines any obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. In addition, it is Triarc's policy generally not to make any specific projections as to future earnings, and Triarc does not endorse any projections regarding future performance that may be made by third parties. Triarc Companies, Inc.
Condensed Consolidated Statement of Earnings
Second Quarter and Six Months Ended June 28, 1998 and July 4, 1999
Second Quarter Six Months
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1998 1999 1998 1999
---- ---- ---- ----
(In thousands except per share amounts)
Revenues $232,891 $250,826 $404,944 $429,017
======== ======== ======== ========
Earnings before interest,
taxes, other non-operating
items, depreciation,
amortization and capital
structure reorganization
related charges $ 31,692 $ 35,626 $ 50,800 $ 56,722
Depreciation and amortization (8,858) (8,773) (18,070) (17,197)
-------- -------- -------- --------
22,834 26,853 32,730 39,525
Capital structure reorganization
related charges -- (1,217) -- (4,867)
-------- -------- -------- --------
22,834 25,636 32,730 34,658
Interest expense (16,996) (22,193) (32,859) (41,328)
Investment income, net 7,447 7,023 15,032 12,307
Other, net (a) 4,416 1,743 4,978 2,401
-------- -------- -------- --------
Income before taxes 17,701 12,209 19,881 8,038
Provision for income taxes (8,219) (7,004) (9,367) (4,582)
-------- -------- -------- --------
Income from continuing
operations 9,482 5,205 10,514 3,456
Discontinued operations (b) (1,413) ( 985) 1,750 (484)
Extraordinary charges (c) -- -- -- (12,097)
-------- -------- -------- --------
Net income (loss) $ 8,069 $ 4,220 $ 12,264 $ (9,125)
======== ======== ======== ========
Basic income (loss)
per share:
Income from continuing
operations $ .31 $ .20 $ .34 $ .12
Discontinued operations (b) (.05) (.04) .06 (.02)
Extraordinary charges (c) -- -- -- (.43)
-------- -------- -------- --------
Net income (loss) $ .26 $ .16 $ .40 $ (.33)
======== ======== ======== ========
Diluted income (loss)
per share:
Income from continuing
operations $ .29 $ .19 $ .32 $ .12
Discontinued operations (b) (.04) (.04) .05 (.02)
Extraordinary charges (c) -- -- -- (.43)
-------- -------- -------- --------
Net income (loss) $ .25 $ .15 $ .37 $ (.33)
======== ======== ======== ========
Share used to calculate
income (loss) per share:
Basic 30,596 26,434 30,841 27,875
Diluted 32,374 27,339 32,655 28,328
Contact: Triarc Companies, Inc.
Anne A. Tarbell, 212/451-3030
www.triarc.com
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