Triarc Reports First Quarter 2008 Results

Business Wire, May 9, 2008

Operating profit of $8.1 million in the first quarter of 2008 increased 18.4%, from first quarter 2007 adjusted operating profit of $6.8 million, which excludes $1.7 million of operating profit related to the asset management segment (see reconciliation of Non-GAAP measurements results to GAAP results below).

Consolidated EBITDA of $24.1 million in the first quarter of 2008 increased 11.7%, as compared to adjusted consolidated EBITDA of $21.5 million in the first quarter of 2007, which excludes $2.9 million of EBITDA related to the asset management segment (see reconciliation of Non-GAAP measurements to GAAP results below). Included in the first quarter 2008 Restaurant EBITDA of $32.3 million (see reconciliation of consolidated EBITDA to net income (loss)) is $1.2 million of allocated corporate expenses (or approximately $5.0 million per annum).

Investment income declined $89.0 million to a loss of $65.9 million in the first quarter of 2008 from income of $23.1 million in the first quarter of 2007. This decline is attributed principally to the $68.1 million loss on our investment in the common stock of DFR that was distributed to our stockholders on April 4, 2008 (see Deerfield Distribution below).

The effective tax rate for the first quarter of 2008 was 11%, compared to 42% in the first quarter of 2007. The difference between the 35% statutory expected benefit in 2008 and the effective tax benefit is principally the result of a loss which is not deductible for tax purposes in connection with the decline in value of our investment in the common stock of DFR and related declared dividend.

Net income declined $74.6 million to a loss of $67.5 million in the first quarter of 2008 from net income of $7.1 million in the first quarter of 2007. This decline is attributed principally to the investment loss described above. Diluted loss per share was $0.73 for both Class A and Class B common stock in the first quarter of 2008 compared to diluted earnings per share of $0.07 for Class A common stock and $0.08 for Class B common stock, respectively, in the first quarter of 2007.

As of March 30, 2008, there were a total of 3,694 Arby's restaurants in the system, including 1,156 Company-owned and 2,538 franchised locations.

Outlook

For the remainder of 2008, Triarc anticipates the following:

* A sales increase from the opening of approximately 40 new Company-owned restaurants;

* Lower gross margin compared to that of the comparable periods in 2007 primarily as a result of higher input costs that will not be fully offset by price increases; and

* Lower general and administrative expenses as a result of the completion of the corporate restructuring and the sale of the asset management segment.

Roland Smith, Chief Executive Officer of Triarc said, "As we progress through 2008, we look forward to executing on the many opportunities we have to enhance shareholder value at Triarc. To improve sales, we are significantly increasing national advertising spending to focus on the unique qualities and benefits of our food and we have a strong product and promotional calendar, which includes new product offerings and increased emphasis on value and affordability. We will also continue to focus on further improving operations and aim to aggressively address our input and other costs."