Wendy's Reports High Quality Third Quarter Results / Systemwide Sales Up 12%, Margins Expand and Base EPS Increases 21%

Dublin, Ohio (PROTEXT) - Wendy's International, Inc. (NYSE: WEN) today announced results for the third quarter ended October 3, 1999. The results included strong same-store sales growth at Wendy's U.S. and Tim Hortons in Canada, margin expansion and a 21% increase in base earnings per share. Third Quarter Highlights * Systemwide sales increased 12.1% to a record $1.9 billion for the three-month period. * Total revenue increased 11.4% to $541 million. * Retail sales grew 13% to $439 million. * Average unit volumes (AUVs) at Wendy's(R) company restaurants in the United States increased 7.3% on top of 7.8% growth a year ago. It was the 41st consecutive month of positive AUVs at Wendy's company units. AUVs at franchise restaurants grew 6.2%. * Same-store sales at Wendy's U.S. were up 7.1% during the quarter, driven primarily by transaction growth, and are up 8.4% year to date. * Same-store sales at Tim Hortons(R) in Canada increased 12.5% on top of 9.3% growth a year ago. * Wendy's domestic margin improved to 16.8%, up 40 basis points from the same quarter a year ago. * Net income was $44.5 million versus $42.9 million a year ago. * Base EPS grew 21% from $0.28 a year ago to $0.34. * Total diluted EPS for the third quarter was $0.35, including $0.01 in asset gains. That compared to total EPS of $0.33 a year ago, including $0.05 in asset gains. Third Quarter Diluted Earnings Per Share 3Q 1999 3Q 1998 Increase Base EPS $0.34 $0.28 21% Assets Gains $0.01 $0.05 -- Total EPS $0.35 $0.33 -- "We had another outstanding quarter at both Wendy's and Tim Hortons," said Chairman, CEO and President Gordon F. Teter. "We strengthened our quality brand position with customers. Our top-line growth was exceptional due to a focus on maintaining consistent store-level operations, the continued rollout of our Service Excellence(TM) program at Wendy's, balanced marketing and quality products. Customer reaction to the French Onion Chicken Grill(TM) promotion at Wendy's and a sandwich promotion at Tim Hortons was excellent. "Additionally, we effectively controlled general and administrative costs and we expanded Wendy's domestic margins with the strong sales performance and programs to significantly improve store-level productivity." Progress on Strategic Initiatives The Company made progress during the quarter on its strategic initiatives to improve return on capital. * The Company repurchased 2.1 million common shares for $58.8 million during the quarter. Since the beginning of the repurchase program in 1998 through October 3, 1999, the Company repurchased a total of 13.9 million shares for $337 million. The Company's total share repurchase authorization is up to $600 million. * Wendy's domestic margins expanded by 40 basis points during the quarter, despite higher food costs and labor inflation, and are up 130 basis points year to date, from 15.5% a year ago to 16.8%. The Company is effectively leveraging strong same-store sales at Wendy's and executing several store-level productivity programs. * The Company continues to focus nearly all new store development capital on Wendy's in North America and Tim Hortons in Canada, where the Company achieves the highest returns. The Company expects to open about 520 new units systemwide during 1999, up approximately 13% compared to 460 a year ago. * The Company acquired from a franchisee 21 Wendy's stores in Argentina and is now operating the market as part of its Latin America/Caribbean region. Early in the fourth quarter, the Company advanced its plan to improve corporate profitability and return on capital by closing seven company operated Wendy's in the United Kingdom. The underperforming units were closed due to high real estate and operating costs. Fourth Quarter and 2000 Plans The Company's strong performance continues in the fourth quarter, with same-store sales during October up about 8.5% at both Wendy's U.S. and Tim Hortons in Canada. Wendy's marketing program during the fourth quarter includes a balance of the current national promotion for the Bacon Mushroom Melt(TM) hamburger, an upcoming national pillar highlighting the popular Spicy Chicken(TM) sandwich, special cable and print advertising targeting core hamburger consumers and a Kids' Meal(TM) promotion featuring Snoopy. Tim Hortons marketing in the fourth quarter features its core coffee products. The Company's year 2000 goal and long-term goal for base EPS growth continues to be in the 12% to 15% range. For the year 2000, the earnings goal includes: * Continued same-store sales growth at Wendy's and Tim Hortons. * New store development of at least 525 units systemwide. * Margin expansion at domestic Wendy's. * Store-level productivity gains. * Effective control of general and administrative costs. * Share repurchase. "We continue to make progress executing our strategic plans," said Chief Financial Officer Frederick R. Reed. "Our sales momentum is strong, the margin expansion is encouraging considering cost pressures and earnings quality is outstanding. "Looking at the year 2000, we are optimistic that our momentum will continue," said Reed. "Overall consumer spending trends are positive, traffic growth in the quick-service restaurant industry is strong and demand continues to outpace new store supply. Most importantly, we are intent on maintaining a disciplined, long-term approach to managing the business, our brands and our balance sheet." Quarterly Dividend Approved The Board of Directors today approved a quarterly dividend of 6 cents per share, payable on November 30 to shareholders of record as of November 15. It will be the Company's 87th consecutive dividend payment to shareholders. Wendy's International, Inc. is one of the world's largest restaurant operating and franchising companies with $6.5 billion in systemwide sales during 1998 and two quality brands -- Wendy's and Tim Hortons. Wendy's Old Fashioned Hamburgers was founded in 1969 by Dave Thomas and is the third- largest quick-service hamburger restaurant chain with more than 5,400 units in the United States, Canada and other international markets. Tim Hortons was founded in 1964 by Tim Horton and Ron Joyce and is the largest coffee and baked goods restaurant chain in Canada. There are more than 1,700 Tim Hortons restaurants in North America. NOTE: Snoopy is a registered mark of United Feature Syndicate, Inc. WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data - Unaudited) Third Quarter Ended Year-to-Date Ended 10/3/99 10/4/98 10/3/99 10/4/98 (39 wks) (40 wks) REVENUES Retail sales $438,868 $388,881 $1,251,026 $1,205,942 Franchise revenues 99,456 85,017 282,354 249,068 Asset gains 2,385 11,277 12,422 15,702 Total 540,709 485,175 1,545,802 1,470,712 COSTS & EXPENSES Cost of sales 276,082 241,756 784,528 755,862 Company restaurant operating costs 96,061 88,319 273,476 275,262 Operating costs 19,857 14,516 57,386 47,028 General & administrative expenses 48,369 46,578 144,169 136,432 Depreciation & amortization of property & equipment 24,796 23,267 72,439 72,347 Other expense (income) 1,585 19 3,639 (399) Interest, net 2,249 908 6,948 1,461 Total 468,999 415,363 1,342,585 1,287,993 INCOME BEFORE INCOME TAXES 71,710 69,812 203,217 182,719 INCOME TAXES 27,250 26,877 77,222 70,347 NET INCOME $44,460 $42,935 $125,995 $112,372 Basic earnings per common share $0.37 $0.34 $1.03 $0.87 Diluted earnings per common share $0.35 $0.33 $0.99 $0.85 Base diluted earnings per common share* $0.34 $0.28 $0.93 $0.78 Basic shares 121,482 126,567 122,887 129,673 Diluted shares 130,739 135,182 132,080 138,471 * excludes asset gains SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain information in this news release, particularly information regarding future economic performance and finances, and plans, expectations and objectives of management, is forward looking. 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: Competition: The quick-service restaurant industry is intensely competitive with respect to price, service, location, personnel, and type and quality of food. The Company and its franchisees compete with international, regional, and local organizations primarily through the quality, variety, and value perception of food products offered. The number and location of units, quality and speed of service, attractiveness of facilities, effectiveness of advertising and marketing programs, and new product development by the Company and its competitors are also important factors. The Company anticipates that intense competition will continue to focus on pricing. Certain of the Company's competitors have substantially larger marketing budgets. Economic, Market and Other Conditions: The quick-service restaurant industry is affected by changes in national, regional, and local economic conditions, consumer preferences and spending patterns, demographic trends, consumer perceptions of food safety, weather, traffic patterns, and the type, number and location of competing restaurants. Factors such as inflation, food costs, labor and benefit costs, legal claims, and the availability of management and hourly employees also affect restaurant operations and administrative expenses. The ability of the Company and its franchisees to finance new restaurant development, improvements and additions to existing restaurants, and the acquisition of restaurants from, and sale of restaurants to franchisees is affected by economic conditions, including interest rates and other government policies impacting land and construction costs and the cost and availability of borrowed funds. Importance of Locations: The success of Company and franchised restaurants is dependent in substantial part on location. There can be no assurance that current locations will continue to be attractive, as demographic patterns change. It is possible the neighborhood or economic conditions where restaurants are located could decline in the future, thus resulting in potentially reduced sales in those locations. Government Regulation: The Company and its franchisees are subject to various federal, state, and local laws affecting their business. The development and operation of restaurants depend to a significant extent on the selection and acquisition of suitable sites, which are subject to zoning, land use, environmental, traffic, and other regulations. Restaurant operations are also subject to licensing and regulation by state and local departments relating to health, sanitation and safety standards, federal and state labor laws (including applicable minimum wage requirements, overtime, working and safety conditions, and citizenship requirements), federal and state laws which prohibit discrimination, and other laws regulating the design and operation of facilities, such as the Americans with Disabilities Act of 1990. Changes in these laws and regulations, particularly increases in applicable minimum wages, may adversely affect financial results. The operation of the Company's franchisee system is also subject to regulation enacted by a number of states and rules promulgated by the Federal Trade Commission. The Company cannot predict the effect on its operations, particularly on its relationship with franchisees, of the future enactment of additional legislation regulating the franchise relationship. Growth Plans: The Company plans to increase the number of systemwide Wendy's and Tim Hortons restaurants open or under construction. There can be no assurance that the Company or its franchisees will be able to achieve growth objectives or that new restaurants opened or acquired will be profitable. The opening and success of restaurants depends on various factors, including the identification and availability of suitable and economically viable locations, sales levels at existing restaurants, the negotiation of acceptable lease or purchase terms for new locations, permitting and regulatory compliance, the ability to meet construction schedules, the financial and other development capabilities of franchisees, the ability of the Company to hire and train qualified management personnel, and general economic and business conditions. International Operations: The Company's business outside of the United States is subject to a number of additional factors, including international economic and political conditions, differing cultures and consumer preferences, currency regulations and fluctuations, diverse government regulations and tax systems, uncertain or differing interpretations of rights and obligations in connection with international franchise agreements and the collection of royalties from international franchisees, the availability and cost of land and construction costs, and the availability of experienced management, appropriate franchisees, and joint venture partners. Although the Company believes it has developed the support structure required for international growth, there is no assurance that such growth will occur or that international operations will be profitable. Disposition of Restaurants: The disposition of company-operated restaurants to new or existing franchisees is part of the Company's strategy to develop the overall health of the system by acquiring restaurants from, and disposing of restaurants to, franchisees where prudent. The expectation of gains from future dispositions of restaurants depends in part on the ability of the Company to complete disposition transactions on acceptable terms. Transactions to Improve Return on Investment: The sale of real estate previously leased to franchisees is generally part of the program to improve the Company's return on invested capital. There are various reasons why the program might be unsuccessful, including changes in economic, credit market, real estate market or other conditions, and the ability of the Company to complete sale transactions on acceptable terms and at or near the prices estimated as attainable by the Company. Year 2000: The Company anticipates timely completion of its program to address year 2000 issues. However, if the new information systems are not implemented on a timely basis, modifications to existing systems cannot be accomplished on a timely basis, information technology resources do not remain available, or other unanticipated events occur, there would be adverse financial and operational effects on the Company. The amount of these effects cannot be ascertained at this time. Although the Company has not been informed of material year 2000 issues by third parties with which it has a material relationship or franchisees, there is no assurance that these entities will be year 2000 compliant on a timely basis. Unanticipated failures or significant delays in furnishing products or services by third parties or general public infrastructure service providers, or the inability of franchisees to perform sales reporting and financial management functions or to make timely payments to the Company or suppliers, could have a material adverse effect on results of operations, financial condition and/or liquidity. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. The Company undertakes no obligation to publicly release any revisions to the forward-looking statements contained in this release, or to update them to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events. ots Original Text Service: Wendy's International, Inc. Internet: http://www.newsaktuell.de Contact: John D. Barker of Wendy's International, Inc. (USA) 614-764- 3044, or john_barker@wendys.com Web site: http://www.wendys.com Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. Protext is a commercial service providing distribution of press releases from clients, who are identified in the text of Protext reports and who bear full responsibility for their contents. PROTEXT