Triarc Companies, Inc. (NYSE: TRY) announced today a 10% increase in Snapple(R) case sales in the 2000 first quarter which fueled a 26% increase to $14.0 million in premium beverage adjusted EBITDA (earnings before interest, taxes, other non-operating items, depreciation and amortization and unusual or non-recurring items). Compared to the first quarter of 1999, total adjusted EBITDA for consumer products increased 14% to $29.6 million reflecting continued strength at Snapple, Stewart's(R), Royal Crown(R) and Arby's(R).

Including unusual or non-recurring items, 2000's first quarter net income was $2.7 million, or $.11 per share, compared with 1999's first quarter net loss on the same basis of $(13.3) million, or $(.46) per share. Excluding unusual or non-recurring items, 2000's first quarter net income was $2.9 million, or $.12 per share, compared with 1999 first quarter net income on the same basis of $0.6 million, or $.02 per share. Adjusted cash EPS in the first quarter of 2000 was $.38 per share compared to $.23 per share. The improvement in EPS, adjusted EPS and adjusted cash EPS in 2000, versus the 1999 first quarter, reflects the strong operating trends discussed above as well as increased investment income. Per share amounts are presented on a diluted basis.

Highlights

  • In the first quarter of 2000, Snapple case sales increased 10% versus the 1999 quarter. Snapple's case sales have increased for ten consecutive quarters.
  • Adjusted EBITDA for the premium beverage business increased 26% to $14.0 million in the first quarter of 2000, reflecting continued growth at both Snapple and Stewart's and a strong contribution from company-owned beverage distribution operations. The adjusted EBITDA margin for the premium beverage business improved from 9% in 1999 to 10% in the firstquarter of 2000.
  • Royal Crown's first quarter 2000 adjusted EBITDA increased 4% to $5.4 million, reflecting improving domestic and international trends as well as tight cost controls.
  • Arby's first quarter 2000 adjusted EBITDA increased 6% to $10.2 million. The first quarter of 2000 was the Arby's system's thirteenth consecutive quarter of increases in same-store sales. Results were also positively impacted by higher average unit volumes ("AUV's") at newly opened stores.
  • First quarter 2000 adjusted EBITDA, on a consolidated basis, was $21.9 million, up 4%, reflecting improvements noted above partially offset by higher corporate expenses.
  • EPS, adjusted EPS and adjusted cash EPS all rose substantially in the 2000 first quarter, reflecting strong operating trends as well as increased investment income. Adjusted EPS is calculated by adjusting reported EPS to remove the after tax EPS effect of unusual or non-recurring charges and credits. Adjusted cash EPS is calculated by adding back to adjusted EPS the after tax effect of depreciation and amortization charges.

Such calculations for the 2000 and 1999 first quarters are as follows:

 

                                     Fiscal First Quarter
                                         1999         2000
                                         ----         ----
 EPS as reported                       $(.46)         $.11
 Adjustments for the after
      tax effect of unusual
      or non-recurring charges
      and credits                         .48          .01
                                       ------         ----
 Adjusted EPS                             .02          .12
 Adjustments for the after tax
      effect of depreciation and
      amortization charges                .21          .26
                                         ----         ----
 Adjusted cash EPS                       $.23         $.38
                                         ====         ====
 
 

Commenting on first quarter 2000 results, Nelson Peltz, Chairman and Chief Executive Officer of Triarc, said: "Our businesses are off to a great start in 2000. Snapple and Stewart's continue to post excellent volume gains, our company-owned beverage distribution operations posted strong results and we are optimistic about the potential for improvement at both Mistic and Royal Crown. Arby's experienced yet another quarter of solid growth, fueled by continued strength in system-wide sales, new unit openings, brand development growth and an exciting new 'adult fast food' brand repositioning strategy. We believe we are poised to achieve the growth goals we have set for 2000."

Peter May, President and Chief Operating Officer of Triarc, added: "As we enter the second and third quarters, our peak operating quarters, we remain strongly focused on improving our operating margins and maximizing free cash flow. We will also continue to evaluate strategies to build and crystallize the significant value in our businesses for the benefit of Triarc shareholders."

Premium Beverages

Triarc's premium beverage operations, comprised of Snapple, Mistic and Stewart's, reported adjusted EBITDA of $14.0 million for the 2000 first quarter on revenues of $140.6 million, compared to adjusted EBITDA of $11.2 million on revenues of $129.2 million for the comparable period in 1999.

Premium beverage adjusted EBITDA increased primarily due to an approximate 10% improvement in Snapple case sales. Snapple's core products continued to grow in the first quarter 2000, augmented by continued exceptionally strong case sales of Snapple Elements(R), a line of herbally enhanced drinks launched in April 1999.

Growth in core products, new products and line extensions are expected to result in continued case sales growth for Snapple in 2000. During the first quarter of 2000, Snapple rolled out three new 16 ounce flavors: Cactus Iced Tea, Diet Orange Carrot and Raspberry Peach. Two new flavors - Gravity(TM) and Meteor(TM) - were also added to the fast-growing Elements platform, with additional flavors scheduled for introduction later this year. In addition, logistical and productivity initiatives are currently underway which should lower costs, resulting in margin improvement for premium beverages in 2000.

For 2000, Mistic plans to capitalize on the success it has achieved with its 50% juice drinks, having recently introduced another new flavor, Tropical Carrot. Mistic also launched Zotics(TM) in mid-April which has exhibited encouraging initial results. Zotics are a line of all natural, vitamin-enhanced fruit drinks and one tea packaged in a distinctive three-sided 20-ounce bottle. Zotics feature flavors from regions like Africa, South America and the Far East. Another new platform, Mistic Hip-Hop(TM) was launched in February 2000. Both new platforms, in addition to the anticipated continued success of Mistic's 50% juice drinks, are expected to enhance Mistic's results in 2000.

Triarc's third premium brand, Stewart's, exhibited continued strong double-digit case sales growth in the first quarter of 2000. In March 2000, Stewart's introduced "S"(TM) - a new platform of super-premium carbonated diet soft drinks in five exciting flavors. Distributor reaction and consumer testing results of "S" have been highly positive, suggesting continued strong growth for Stewart's in 2000.

Royal Crown

Triarc's carbonated soft drink concentrate company, Royal Crown, reported adjusted EBITDA for the 2000 first quarter of $5.4 million on revenues of $30.0 million, compared to adjusted EBITDA of $5.2 million on revenues of $30.9 million for the comparable period in 1999. The improvement in adjusted EBITDA was the result of improving domestic and international trends and cost controls.

Beginning in early 2000, Royal Crown introduced "The Great Taste -Great Value Guarantee" on all Royal Crown products. This guarantee is unique in the cola category and early indications suggest it will help stimulate domestic sales of Royal Crown products as consumers seek value and taste alternatives in a rising price environment for domestic branded colas.

Early in 2000, Royal Crown also introduced a reformulated Diet Rite(R) and Diet Rite flavors line-up. The new Diet Rite products use a blend of Sucralose and Ace-K sweeteners without compromising their original great taste. These products also have a much longer shelf life than soft drinks containing aspartame and are now available with newly designed package graphics.

Triarc Restaurant Group

Triarc Restaurant Group ("TRG") reported adjusted EBITDA for the 2000 first quarter of $10.2 million on revenues of $19.4 million compared to adjusted EBITDA of $9.7 million on revenues of $18.1 million for the comparable period in 1999.

Results were favorably impacted by an increase in domestic system-wide comparative store sales of 3.6% in first quarter 2000. First quarter 2000 results were also favorably impacted by the continuing strong pace of Arby's new store openings with franchisees adding 22 new restaurants to the Arby's system. AUV's at new stores continue to be well above the system average.

As of April 2, 2000, Arby's franchisees had entered into commitments to build approximately 1,100 new units over the next several years, the highest level of new opening commitments in the brand's history and Arby's franchisees continued to open TRG dual brand units throughout the first quarter of 2000.

Finally, in early March 2000, Arby's launched a system-wide brand positioning campaign to establish itself as the leader in a rapidly emerging industry niche - adult fast food. Arby's adult positioning with the tagline - "Now That Your Tastes Have Grown-Up"(TM) - is the culmination of significant consumer research, numerous facility upgrades, menu enhancements, brand development and improved in-store training which have been undertaken by TRG and its franchisees over the last three years. The campaign is designed to intensify franchisees' focus on Arby's core strengths and to build upon Arby's solid equity as the "cut above" fast food for more discriminating adults.

Operating Results

Following is a comparison of revenues and adjusted EBITDA from operations for the first quarter of 1999 and 2000.

 

                                    Fiscal First Quarter
                                1999                     2000
                        -------------------    -----------------------
                                   Adjusted                    Adjusted
                        Revenues    EBITDA         Revenues     EBITDA
                        --------    ------         --------     ------
                                         (In millions)
 
 Premium Beverage      $   129.2    $ 11.2         $  140.6      $14.0
 Royal Crown                30.9       5.2             30.0        5.4
                       ---------    -------        --------    -------
      Total Beverage
        Group              160.1      16.4            170.6       19.4
 Restaurant Group           18.1       9.7             19.4       10.2
                       ---------    -------        --------    -------
      Total Consumer
        Products       $   178.2     $26.1           $190.0      $29.6
                       =========     =====         ========      =====
 
 Unallocated Corporate               $(5.0)                      $(7.7)
                                     ======                      ======
 
      Total                        $  21.1                       $21.9
                                   =======                       =====
 
     

 

Consolidated Results

Following is a discussion of consolidated results for the first quarter of 1999 and 2000. Both periods were impacted by unusual or non-recurring charges and credits described below.

Including unusual or non-recurring charges and credits, the 2000 first quarter net income was $2.7 million, or $.11 per share, versus a net loss of $(13.3) million, or $(.46) per share, for the 1999 quarter. Excluding unusual or non-recurring charges and credits, 2000 first quarter net income was $2.9 million, or $.12 per share, versus net income of $0.6 million, or $.02 per share, in the comparable 1999 period.

The following table reconciles net income excluding unusual or non-recurring charges and credits to reported net income for the first quarter on a comparative basis.

 

                                         Fiscal First Quarter
                                       1999                 2000
                              -------------------   -------------------
                                            Per                     Per
                              After Tax     Share     After Tax   Share
                              ---------     -----     ---------   -----
                                (In millions, except per share amounts)
 
 Net income excluding
      unusual or non-recurring
      charges and credits        $0.6         $.02     $2.9     $.12
                                 ----         ----     ----     ----
 Capital structure
   reorganization
   related charges               (2.3)        (.08)    (0.2)    (.01)
 Income from discontinued
      operations                  0.5          .02       --       --
 Extraordinary charges -
   Refinancing
      related write-off of
      deferred financing costs
      and payment of
      redemption premium        (12.1)       (.42)       --       --
                                ------       ------    ------    ----
 Total                          (13.9)       (.48)      (0.2)   (.01)
                                ------      ------     -----     ----
 
 Net income (loss) as reported $(13.3)      $(.46)      $2.7     $.11
                               =======      ======      =====    ====
 
 

Unusual and Non-Operating Factors

Triarc's results for the 1999 first quarter reflect the impact of several charges related to its February 1999 debt refinancings. Capital structure reorganization related charges of $(3.7) million ($(2.3) million after tax or $(.08) per share) are reflected in the 1999 first quarter operating profit. Triarc also recorded an extraordinary charge of $(12.1) million after tax, or $(.42) per share, 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.

On July 19, 1999 Triarc sold substantially all of its remaining 42.7% interest in its propane business, retaining a 1% limited partner interest. Triarc's results for the 1999 first quarter reflect the results of the propane business as a discontinued operation.

In addition to the unusual and non-recurring charges and credits discussed above, Triarc's results for the 2000 first quarter reflect increased interest expense of $4.0 million due to increased average borrowings from the February 1999 refinancings and increased corporate expenses of $2.7 million principally due to the impact of a new executive compensation plan approved by shareholders in 1999, offset by increased investment income of $10.9 million.

Triarc is a leading premium beverage company (Snapple, Mistic, Stewart's), a restaurant franchisor (Arby's, T.J. Cinnamons, Pasta Connection) and a producer of soft drink concentrates (Royal Crown, Diet Rite, Nehi(R)).

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. These forward-looking statements are based on our expectations and are susceptible to a number of risks, uncertainties and other factors, and our actual results, performance and achievements may differ materially from any future results, performance or achievements expressed 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 and demographic patterns; the success of multi-branding; availability, location and terms of sites for restaurant development by franchisees; the ability of franchisees to open new restaurants in accordance with their development commitments, including the ability of franchisees to finance restaurant development; 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 judgment of personnel; availability of qualified personnel; labor and employee benefit costs; availability and cost of raw materials, ingredients and supplies; the potential impact on franchisees' store level sales and resulting royalty revenues that could arise from interruptions in the distribution of supplies of food and other products to franchisees; 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 franchising laws, accounting standards, environmental laws and taxation requirements; the costs, uncertainties and other effects of legal and administrative proceedings; the impact of general economic conditions on consumer spending; and other risks and uncertainties affecting the Company and its subsidiaries detailed in the Company's Annual Report on Form 10-K and other current and periodic filings by the Company with the Securities and Exchange Commission, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. The Company 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 the Company's policy generally not to make any specific projections as to future earnings, and the Company does not endorse any projections regarding future performance that may be made by third parties.

 

                        Triarc Companies, Inc.
              Condensed Consolidated Statement of Earnings
              Quarter Ended April 4, 1999 and April 2, 2000
 
                                              1999                2000
                                              ----                ----
                                (In thousands except per share amounts)
 
 Revenues                                $     178,191   $     190,018
                                         =============   =============
 
 Earnings before interest, taxes,
  other non-operating items,
  depreciation,
  amortization and capital
  structure reorganization
  related charges                        $      21,096   $      21,941
 Depreciation and amortization                  (8,424)         (9,133)
                                         -------------   -------------
                                                12,672          12,808
 Capital structure reorganization
  related charges (a)                           (3,650)           (334)
                                         -------------   -------------
          Operating profit                       9,022          12,474
 Interest expense                              (19,135)        (23,123)
 Investment income, net                          5,284          16,176
 Other, net                                        658             516
                                         -------------   -------------
          Income (loss) from
           continuing operations
           before taxes                         (4,171)          6,043
  (Provision for) benefit from
   income taxes                                  2,422          (3,323)
                                         -------------   -------------
          Income (loss) from
           continuing operations                (1,749)          2,720
 Discontinued operations (b)                       501             --
 Extraordinary charges (c)                     (12,097)            --
                                         -------------   ------------
          Net income (loss)              $     (13,345)  $       2,720
                                         =============   =============
 Basic and diluted income (loss)
  per share (d):
          Income (loss) from
            continuing operations        $        (.06)   $        .11
          Discontinued operations (b)              .02              --
          Extraordinary charges (c)               (.42)             --
                                         -------------   -------------
          Net income (loss)              $        (.46)   $        .11
                                         ================ ============
 
 Share used to calculate income
  (loss) per share:
          Basic                                 29,316          23,806
          Diluted                               29,316          25,100
 
 
 

(a) Represents charges related to equitable adjustments that were made to the terms of outstanding options under a stock option plan of a subsidiary of Triarc to adjust for the effects of net special large and non-recurring distributions from the subsidiary to Triarc of (1) $3.7 million ($2.3 million after tax or $.08 per diluted share) and (2) $0.3 million ($0.2 million after tax or $.01 per diluted share) for the 1999 quarter and the 2000 quarter, respectively.

(b) In July 1999 the Company sold 41.7% of its remaining 42.7% interest in a propane business, retaining a 1% limited partner interest. The Company's equity in the income of the propane business for the 1999 quarter has been reclassified to reflect the propane business as discontinued operations.

(c) Represents the after tax write-off of previously unamortized deferred debt costs and interest rate cap agreement costs and the payment of redemption premium associated with the early extinguishment of debt.

(d) Basis and diluted income (loss) per share are the same for both the 1999 and 2000 quarters since in the 1999 quarter the effect of dilutive securities would have been antidilutive and in the 2000 quarter the effect of dilutive securities is less than $.01 per share.