Wendy's Reports Strong 2nd Quarter Sales, Margin & EPS

Growth DUBLIN, Ohio (PROTEXT) - Wendy's International, Inc. (NYSE:WEN) today announced sales and earnings results for the secondquarter, which ended on July 4, 1999. The results included robustsame-store sales growth at Wendy's(R) in the United States andTim Hortons(R) in Canada, the best quarterly domestic margin in14 years and a 21% increase in Base EPS compared to the 13-weekperiod a year ago. Second Quarter Highlights * Systemwide sales increased 3.7% to $1.8 billion. * Average unit volumes (AUVs) at Wendy's company restaurantsin the U.S. increased 10.4%. It was the 38th consecutive monthof positive AUVs. Same-store sales were up 8.3% and AUVs atfranchise restaurants in the U.S. increased 6.7%. * Tim Hortons' same-store sales increased 10.9% in Canada andstrongly in the U.S. * Wendy's domestic margin improved to 17.7%, up 110 basispoints from 16.6% a year ago, due to the sales growth andeffective store-level productivity initiatives. * Net income was $49.5 million compared to $45.6 million ayear ago. * Total diluted earnings per share for the second quarter were$0.39, a 15% increase from $0.34 reported a year ago. Total EPSfor the quarter included $0.04 in asset gains from the sale ofreal estate, franchising and fees. That compared to $0.02 inasset gains in the same quarter a year ago. Total EPS resultsfor the second quarter a year ago included 14 weeks and $0.03 inEPS from the extra accounting week (see chart below). * Base EPS (total diluted EPS less asset gains) was $0.35 forthe quarter, up 21% from $0.29 in the equivalent 13-week quartera year ago.

Second Quarter Diluted Earnings Per Share

2Q 1999

2Q 1998

Increase

Base EPS

$0.35

$0.29

21%

Extra Week

--

$0.03

--

Asset Gains

$0.04

$0.02

--

Total EPS

$0.39

$0.34

15% "Our core businesses of Wendy's in North America and TimHortons in Canada are extremely healthy," said Gordon F. Teter,Chairman, CEO and President. "The North American economy isstrong, consumer traffic in our restaurants is growing and wehave good sales momentum. "We are encouraged with results from our Service Excellenceprogram at Wendy's. It is delivering incremental sales andimproved customer service at the restaurant level," said Teter."In addition, other sales driving programs were effective in thesecond quarter and productivity initiatives at the store levelhelped offset increasing crew wage rates." Earlier this month, management raised the Company's Base EPSgrowth goal for 1999 to 18% to 21%, up from a previous range of16% to 18%. Base EPS was $1.03 in 1998 excluding non-recurringcharges. Total EPS for 1999 is expected to include a total of$0.06 to $0.07 in asset gains. First Half Highlights * For the first six months of the year, ended July 4, 1999,systemwide sales increased 7.4% to $3.4 billion. * AUVs at Wendy's company restaurants in the U.S. increased11.7% while same-store sales were up 9.0%. Tim Hortons' same-store sales in Canada were up 10.5%. * Wendy's domestic margin for the first half improved to16.8%, up 180 basis points from 15.0% a year ago. * Net income was $81.5 million compared to $69.4 million ayear ago. * Total diluted EPS for the first six months was $0.64,compared to $0.52 a year ago. * Base EPS was $0.59 for the first six months compared to$0.50 a year ago (the first half of 1999 included 26 weekscompared to 27 weeks in 1998). * The Company opened a total of 188 new restaurants during thefirst six months of the year: 24 company Wendy's in the U.S.; 79franchised Wendy's in the U.S.; 27 Wendy's in internationalmarkets and 58 Tim Hortons in Canada and the U.S. Quality Products and Service Excellence at Wendy's The Company continues to emphasize quality products andbalanced marketing at Wendy's and Tim Hortons. Customers reactedfavorably to Wendy's "Cheddar Lovers' Bacon Cheeseburger"introduced during the second quarter. A new promotional sandwich,the "French Onion Chicken Grill," was introduced earlier thismonth and a national advertising campaign for the sandwich debutstoday. The French onion grilled chicken sandwich achieved strongresults in test markets. Wendy's "Service Excellence" program is being expanded fromthe Company's Western U.S. region to the rest of the U.S. andCanada. About 30% of the system has implemented the program. Allcompany stores are expected to be converted by late 1999 andfranchised units by the end of the first quarter 2000. "Our restaurant managers and crew have utilized ServiceExcellence to deliver incremental sales gains, improved speed andbetter service at pick-up windows in the Western region," saidTeter. "We look forward to a positive impact in our other regionsas we extend the program to company and franchise storesthroughout North America." Iced Cappuccino Popular at Tim Hortons Customer demand for the new iced cappuccino drink at TimHortons continues to be strong following the introduction of theproduct during the second quarter. Tim Hortons is currentlypromoting its popular Timbits(R) products with a nationaltelevision campaign in Canada. "In addition to the outstanding results in Canada, TimHortons' same-store sales are improving in our three U.S. marketsas we focus on operations," said Teter. "Customers in the U.S.are becoming more familiar with the Tim Hortons brand and qualityproducts." Progress on Strategic Initiatives The Company made progress during the second quarter on itsstrategic initiatives: * Repurchasing 1.9 million shares for $52.6 million during thequarter. Through the end of the second quarter the Companyrepurchased a total of nearly 12 million shares and completed$280 million of the $350 million stock repurchase programauthorized by the board and previously announced.

* Completing more than $50 million of the program torefinance with third-party lenders $150 million in notesreceivable held by the Company. The program is essentiallycomplete. "We are pleased with our progress and to be ahead of plan onthe share repurchase and the notes programs," said Frederick R.Reed, Chief Financial Officer. "Furthermore, the domestic marginexpansion has been much stronger than expected. Our cash flow isstrong and the balance sheet is healthy." Dividend Approved The Board of Directors today approved a quarterly dividend of6 cents per share, payable on August 23 to shareholders of recordas of August 9. It will be the Company's 86th consecutivedividend payment to shareholders. Tim Hortons Website Launched The Company recently launched a website profiling Tim Hortons.The new website can be accessed at www.wendys.com orwww.timhortons.com . The Tim Hortons website features interestinghistorical and current information, in both English and French,about the coffee and fresh baked goods restaurant chain. It alsohas information about products, promotions, a nutrition guide andthe Tim Hortons Children's Foundation. Wendy's International, Inc. is one of the world's largestrestaurant operating and franchising companies with $6.5 billionin systemwide sales during 1998. Wendy's Old Fashioned Hamburgerswas founded in 1969 by Dave Thomas and is the third-largestquick-service hamburger restaurant chain with more than 5,400units in the United States, Canada and other internationalmarkets. Tim Hortons was founded in 1964 by Tim Horton and RonJoyce and is the largest coffee and baked goods restaurant chainin Canada. There are more than 1,700 Tim Hortons restaurants inNorth America. SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACTOF 1995 Certain information in this news release, particularlyinformation regarding future economic performance and finances,and plans, expectations and objectives of management, is forwardlooking. The following factors, in addition to other possiblefactors not listed, could affect the Company's actual results andcause such results to differ materially from those expressed inforward-looking statements: Competition: The quick-service restaurant industry isintensely competitive with respect to price, service, location,personnel, and type and quality of food. The Company and itsfranchisees compete with international, regional, and localorganizations primarily through the quality, variety, and valueperception of food products offered. The number and location ofunits, quality and speed of service, attractiveness offacilities, effectiveness of advertising and marketing programs,and new product development by the Company and its competitorsare also important factors. The Company anticipates that intensecompetition will continue to focus on pricing. Certain of theCompany's competitors have substantially larger marketingbudgets. Economic, Market and Other Conditions: The quick-servicerestaurant industry is affected by changes in national, regional,and local economic conditions, consumer preferences and spendingpatterns, demographic trends, consumer perceptions of foodsafety, weather, traffic patterns, and the type, number andlocation of competing restaurants. Factors such as inflation,food costs, labor and benefit costs, legal claims, and theavailability of management and hourly employees also affectrestaurant operations and administrative expenses. The ability ofthe Company and its franchisees to finance new restaurantdevelopment, improvements and additions to existing restaurants,and the acquisition of restaurants from, and sale of restaurantsto franchisees is affected by economic conditions, includinginterest rates and other government policies impacting land andconstruction costs and the cost and availability of borrowedfunds. Importance of Locations: The success of Company and franchisedrestaurants is dependent in substantial part on location. Therecan be no assurance that current locations will continue to beattractive, as demographic patterns change. It is possible theneighborhood or economic conditions where restaurants are locatedcould decline in the future, thus resulting in potentiallyreduced sales in those locations. Government Regulation: The Company and its franchisees aresubject to various federal, state, and local laws affecting theirbusiness. The development and operation of restaurants depend toa significant extent on the selection and acquisition of suitablesites, which are subject to zoning, land use, environmental,traffic, and other regulations. Restaurant operations are alsosubject to licensing and regulation by state and localdepartments relating to health, sanitation and safety standards,federal and state labor laws (including applicable minimum wagerequirements, overtime, working and safety conditions, andcitizenship requirements), federal and state laws which prohibitdiscrimination, and other laws regulating the design andoperation of facilities, such as the Americans with DisabilitiesAct of 1990. Changes in these laws and regulations, particularlyincreases in applicable minimum wages, may adversely affectfinancial results. The operation of the Company's franchiseesystem is also subject to regulation enacted by a number ofstates and rules promulgated by the Federal Trade Commission. TheCompany cannot predict the effect on its operations, particularlyon its relationship with franchisees, of the future enactment ofadditional legislation regulating the franchise relationship. Growth Plans: The Company plans to increase the number ofsystemwide Wendy's and Tim Hortons restaurants open or underconstruction. There can be no assurance that the Company or itsfranchisees will be able to achieve growth objectives or that newrestaurants opened or acquired will be profitable. The opening and success of restaurants depends on variousfactors, including the identification and availability ofsuitable and economically viable locations, sales levels atexisting restaurants, the negotiation of acceptable lease orpurchase terms for new locations, permitting and regulatorycompliance, the ability to meet construction schedules, thefinancial and other development capabilities of franchisees, theability of the Company to hire and train qualified managementpersonnel, and general economic and business conditions. International Operations: The Company's business outside ofthe United States is subject to a number of additional factors,including international economic and political conditions,differing cultures and consumer preferences, currency regulationsand fluctuations, diverse government regulations and tax systems,uncertain or differing interpretations of rights and obligationsin connection with international franchise agreements and thecollection of royalties from international franchisees, theavailability and cost of land and construction costs, and theavailability of experienced management, appropriate franchisees,and joint venture partners. Although the Company believes it hasdeveloped the support structure required for internationalgrowth, there is no assurance that such growth will occur or thatinternational operations will be profitable. Disposition of Restaurants: The disposition of company-operated restaurants to new or existing franchisees is part ofthe Company's strategy to develop the overall health of thesystem by acquiring restaurants from, and disposing ofrestaurants to, franchisees where prudent. The expectation ofgains from future dispositions of restaurants depends in part onthe ability of the Company to complete disposition transactionson acceptable terms. Transactions to Improve Return on Investment: The sale of realestate previously leased to franchisees is generally part of theprogram 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 marketor other conditions, and the ability of the Company to completesale transactions on acceptable terms and at or near the pricesestimated as attainable by the Company. Year 2000: The Company anticipates timely completion of itsprogram to address year 2000 issues. However, if the newinformation systems are not implemented on a timely basis,modifications to existing systems cannot be accomplished on atimely basis, information technology resources do not remainavailable, or other unanticipated events occur, there would beadverse financial and operational effects on the Company. Theamount of these effects cannot be ascertained at this time. Although the Company has not been informed of material year2000 issues by third parties with which it has a materialrelationship or franchisees, there is no assurance that theseentities will be year 2000 compliant on a timely basis.Unanticipated failures or significant delays in furnishingproducts or services by third parties or general publicinfrastructure service providers, or the inability of franchiseesto perform sales reporting and financial management functions orto make timely payments to the Company or suppliers, could have amaterial adverse effect on results of operations, financialcondition and/or liquidity. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. TheCompany undertakes no obligation to publicly release anyrevisions to the forward-looking statements contained in thisrelease, or to update them to reflect events or circumstancesoccurring after the date of this release, or to reflect theoccurrence of unanticipated events. ots Original Text Service:Wendy's International, Inc. Internet: http://www.newsaktuell.deContact: John D. Barker of Wendy's International, Inc., 614-764-3044, or john_barker@wendys.com Web site:http://www.timhortons.com http://www.wendys.com

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