Triarc Reports Full Year and Fourth Quarter 2007 Results

Business Wire, Feb 29, 2008

Arby's operating profit increases 14% to $109 million due to new unit development, positive franchisee same store sales and steady operating margins

ATLANTA -- Triarc Companies, Inc. (NYSE: TRY; TRY.B) announced today the results of operations for its fiscal year and fourth quarter ended December 30, 2007.

Consolidated Highlights

* Consolidated revenues increased to $1,263.7 million in the 2007 fiscal year ($320.6 million in the 2007 fourth quarter) from $1,243.3 million in the 2006 fiscal year ($332.0 million in the 2006 fourth quarter), primarily reflecting the impact of net additional 103 systemwide restaurants and flat systemwide same-store sales for the 2007 fiscal year and fourth quarter periods, partially offset by a decrease in asset management and related fees.

* Franchise revenues increased to $87.0 million in the 2007 fiscal year ($24.1 million in the 2007 fourth quarter) compared to $82.0 million in the 2006 fiscal year ($21.0 million in the 2006 fourth quarter), primarily reflecting the impact on franchise revenues of net additional 58 franchised restaurants opened during 2007 as well as an increase in same-store sales for franchisees of 1% for the 2007 fiscal year (2% for the 2007 fourth quarter).

* Consolidated revenues were negatively impacted by decreases in asset management and related fees of Deerfield & Company, LLC ("Deerfield"). Deerfield's revenues decreased to $63.3 million in the 2007 fiscal year to the date of the sale ($13.6 million in the 2007 fourth quarter to the date of the sale) from $88.0 million in the full 2006 fiscal year ($39.6 million in the full 2006 fourth quarter) primarily due to decreases in incentive and management fees recognized during 2007.

* Consolidated operating profit decreased to $19.9 million in the 2007 fiscal year, compared with $44.6 million in the 2006 fiscal year. This decrease was primarily due to the decline in asset management and related fees and the $82.1 million increase in our facilities relocation and corporate restructuring charges related to the transfer of our corporate headquarters and responsibilities from New York to Atlanta. The impact of these amounts was partially offset by a $40.2 million gain on the sale of our majority capital interest in Deerfield in December 2007 (the "Deerfield Sale") and a decrease in general and administrative expense primarily related to the corporate restructuring. Consolidated operating profit for the fourth quarter increased to $57.9 million in 2007 from $18.7 million in the 2006 fourth quarter primarily as a result of the gain related to the Deerfield Sale.

* Consolidated earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA") (which we define as operating profit (loss) plus depreciation and amortization, other than amortization of deferred financing costs) decreased to $93.2 million in the 2007 fiscal year ($76.8 million in the 2007 fourth quarter), compared with $110.9 million in the 2006 fiscal year ($40.6 million in the 2006 fourth quarter), primarily due to the decline in asset management and related fees and the increase in corporate restructuring charges partially offset by the gain from the Deerfield Sale and a decrease in general and administrative expense, as discussed above. The attached table provides the calculation of EBITDA and a reconciliation of EBITDA to our consolidated net income (loss).

* Consolidated net income was $16.1 million, or $0.16 per share of Class A basic and diluted common stock and $0.18 per share of Class B basic and diluted common stock in the 2007 fiscal year (net income of $33.3 million in the 2007 fourth quarter or $0.33 per share of Class A basic and diluted common stock and $0.37 per share of Class B basic and diluted common stock), compared with a net loss of $(10.9) million, or $(0.13) per share of Class A and Class B basic and diluted common stock in the 2006 fiscal year (net loss of $(2.1) million, or $(0.02) per share of Class A and Class B basic and diluted common stock in the 2006 fourth quarter).

* Facilities relocation and corporate restructuring charges were $85.4 million in the 2007 fiscal year ($4.2 million in the 2007 fourth quarter) compared with $3.3 million in the 2006 fiscal year (a credit of ($0.5) million in the 2006 fourth quarter). The charges in the 2007 fiscal year principally reflect costs related to negotiated contractual settlements with former executives in connection with the transfer of substantially all of our senior executive responsibilities to the Arby's Restaurant Group, Inc. ("ARG") management team in Atlanta.

* Consolidated interest expense was $61.3 million in the 2007 fiscal year ($15.2 million in the 2007 fourth quarter), compared with $114.1 million in the 2006 fiscal year ($14.0 million in the 2006 fourth quarter). The 2007 fiscal year decrease principally reflects the effective redemption as of September 29, 2006 of the investment in the Deerfield Opportunities Fund, a multi-strategy hedge fund managed by Deerfield in which the Company had an investment and which employed leverage in its investment strategies. The increase in the fourth quarter of 2007 represents higher borrowing costs due to changes in base interest rates and an increase in the Company's level of debt as compared to the fourth quarter of 2006.