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USA: Triarc Reports Second Quarter 2000 Results

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Triarc Companies, Inc. (NYSE:TRY) announced today a 7% increase in Snapple(R) case sales in the 2000 second quarter which contributed to an 11% increase to $26.0 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 second quarter of 1999, total adjusted EBITDA for consumer products increased 9% to $44.3 million reflecting continued strength at Snapple, Stewart's(R), Royal Crown(R) and Arby's(R).

Including unusual or non-recurring items, 2000's second quarter net income was $4.6 million, or $.18 per share, compared with 1999's second quarter net income on the same basis of $4.2 million, or $.15 per share. Excluding unusual or non-recurring items, 2000's second quarter net income was $3.3 million, or $.13 per share, compared with 1999 second quarter net income on the same basis of $6.0 million, or $.22 per share. Cash EPS in the second quarter of 2000 was $.44 per share compared to $.38 per share in the comparable 1999 period. Per share amounts are presented on a diluted basis.

Highlights

- In the second quarter of 2000, Snapple case sales increased 7%versus the 1999 quarter. Snapple's case sales have increased for eleven consecutive quarters.

- Adjusted EBITDA for the premium beverage business increased 11% to $26.0 million in the second quarter of 2000, reflecting continued growth at both Snapple and Stewart's. The adjusted EBITDA margin for the premium beverage business also improved to 12.5% in the second quarter of 2000 from 12.0% in the 1999 period.

- Royal Crown's second quarter 2000 adjusted EBITDA increased 9% to $5.8 million, reflecting improving domestic and international sales trends as well as raw material cost savings.

- Arby's second quarter 2000 adjusted EBITDA increased 4% to $12.5 million. The second quarter of 2000 was the Arby's system's fourteenth consecutive quarter of increases in same-store sales.

Results were also positively impacted by higher average unit volumes ("AUV's") at newly opened stores.

-- Second quarter 2000 adjusted EBITDA, on a consolidated basis, increased to $36.1 million from $35.6 million for the comparable 1999 period, reflecting improvements noted above substantially offset by higher corporate expenses.

Earnings Per Share

We provide supplementary disclosure in addition to reported EPS by presenting "Cash EPS", "Adjusted EPS" and "Adjusted Cash EPS". Cash EPS is calculated by adding back the after tax effect of depreciation and amortization charges to reported EPS. 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 second quarter and first six months comparable periods are as follows:

 

Fiscal Fiscal
Second Quarter Six Months
-------------- --------------
1999 2000 1999 2000
---- ---- ---- ----

EPS as reported $.15 $.18 $(.33) $.29
Adjustments for the after tax
effect of depreciation
and amortization charges .23 .26 .44 .52
---- ---- ---- ----
Cash EPS $.38 $.44 $.11 $.81
==== ==== ==== ====


Fiscal Fiscal
Second Quarter Six Months
-------------- --------------
1999 2000 1999 2000
---- ---- ---- ----

EPS as reported $.15 $.18 $(.33) $.29
Adjustments for the after tax
effect of unusual or
non-recurring charges and
credits .07 (.05) .56 (.04)
---- ---- ---- ----
Adjusted EPS .22 .13 .23 .25
Adjustments for the after tax
effect of depreciation and
amortization charges .23 .26 .44 .52
---- ---- ---- ----
Adjusted cash EPS $.45 $.39 $.67 $.77
==== ==== ==== ====



Premium Beverages

Triarc's premium beverage operations, comprised of Snapple, Mistic and Stewart's, reported adjusted EBITDA of $26.0 million for the 2000 second quarter on revenues of $208.8 million, compared to adjusted EBITDA of $23.5 million on revenues of $196.4 million for the comparable period in 1999.

Premium beverage adjusted EBITDA increased primarily due to a 7% improvement in Snapple case sales. Snapple's core products continued to grow in the second quarter 2000, augmented by continued exceptionally strong case sales of Snapple Elements(R), a line of herbally enhanced drinks launched in April 1999.

In the second quarter of 2000, Mistic's results reflected the impact of the continued success of its 50% fruit drinks as well as the mid-April launch of Zotics(TM), a line of all natural, vitamin-enhanced fruit drinks and a tea packaged in a distinctive three-sided 20-ounce bottle featuring flavors such as Acerola Berry from the West Indies, Yuzu Fruit from Japan and Pitaya Fruit from Brazil.

Triarc's third premium brand, Stewart's, exhibited continued strong double-digit case sales growth in the second 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 positive, suggesting continued strong growth for Stewart's.

Royal Crown

Triarc's carbonated soft drink concentrate company, Royal Crown, reported adjusted EBITDA for the 2000 second quarter of $5.8 million on revenues of $36.1 million, compared to adjusted EBITDA of $5.3 million on revenues of $34.3 million for the comparable period in 1999. The improvement in adjusted EBITDA was the result of improving domestic and international sales trends and raw material cost savings.

Triarc Restaurant Group

Triarc Restaurant Group ("TRG") reported adjusted EBITDA for the 2000 second quarter of $12.5 million on revenues of $21.3 million compared to adjusted EBITDA of $12.0 million on revenues of $20.1 million for the comparable period in 1999.

Results were favorably impacted by an increase in domestic system-wide comparative store sales of 0.5% in 2000 second quarter (2.0% in the six month period). Second quarter 2000 results were also favorably impacted by the continuing strong pace of Arby's new store openings with franchisees adding 54 new restaurants to the Arby's system. AUV's at new stores continue to be well above the system average.

As of July 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. Those commitments continue at this level even as new stores are opened.

Operating Results

Following is a comparison of revenues and adjusted EBITDA from operations for the second quarter and first six-month periods of 1999 and 2000.


Fiscal Second Quarter
----------------------------------
1999 2000
----------------------------------
Adjusted Adjusted
Revenues EBITDA Revenues EBITDA
----------------------------------
(In millions)

Premium Beverage $196.4 $23.5 $208.8 $26.0
Royal Crown 34.3 5.3 36.1 5.8
------ ----- ----- -----
Total Beverage Group 230.7 28.8 244.9 31.8
Restaurant Group 20.1 12.0 21.3 12.5
------ ----- ----- -----
Total Consumer Products $250.8 $40.8 $266.2 $44.3
====== ===== ===== =====

Unallocated Corporate $(5.2) $(8.2)
===== =====

Total $35.6 $36.1
===== =====



Fiscal Six Months
----------------------------------
1999 2000
----------------------------------
Adjusted Adjusted
Revenues EBITDA Revenues EBITDA
----------------------------------
(In millions)

Premium Beverage $325.5 $34.6 $349.4 $40.1
Royal Crown 65.3 10.5 66.1 11.2
------ ----- ----- -----
Total Beverage Group 390.8 45.1 415.5 51.3
Restaurant Group 38.2 21.7 40.7 22.7
------ ----- ----- -----
Total Consumer Products $429.0 $66.8 $456.2 $74.0
====== ===== ===== =====

Unallocated Corporate $(10.1) $(15.9)
===== =====

Total $56.7 $58.1
===== =====




Consolidated Results

Following is a discussion of consolidated results for the second quarter and first six months 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 second quarter net income was $4.6 million, or $.18 per share, versus net income of $4.2 million, or $.15 per share, for the 1999 quarter. Excluding unusual or non-recurring charges and credits, 2000 second quarter net income was $3.3 million, or $.13 per share, versus net income of $6.0 million, or $.22 per share, in the comparable 1999 period.

Including unusual or non-recurring charges and credits, Triarc reported net income for the first six months of 2000 of $7.3 million, or $.29 per share, compared to a net loss of $(9.1) million, or $(.33) per share, for the 1999 period. Excluding unusual or non-recurring charges and credits, 2000 first six months net income was $6.2 million, or $.25 per share, versus net income of $6.5 million, or $.23 per share, in the comparable 1999 period.

The following tables reconcile net income excluding unusual or non-recurring charges and credits to reported net income for the second quarter and first six months on a comparative basis.


Fiscal Second 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 $6.0 $.22 $3.3 $.13
---- ---- ---- ----
Capital structure reorganization
related charges (0.8) (.03) (0.2) (.01)
Adjustments to insurance
reserves -- -- 1.0 .04
Other credits -- -- 0.5 .02
Loss from discontinued operations -
Propane (1.0) (.04) -- --
---- ---- ---- ----
Total (1.8) (.07) 1.3 .05
---- ---- ---- ----

Net income as reported $4.2 $.15 $4.6 $.18
==== ==== ==== ====



Fiscal Six Months
----------------------------------
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 $6.5 $.23 $6.2 $.25
---- ---- ---- ----
Capital structure reorganization
related charges (3.0) (.11) (0.4) (.02)
Adjustments to insurance
reserves -- -- 1.0 .04
Other credits -- -- 0.5 .02
Loss from discontinued operations -
Propane (0.5) (.02) -- --
Extraordinary charges
- Refinancing
related write-off of deferred
financing costs and payment of
redemption premium (12.1) (.43) -- --
---- ---- ---- ----
Total (15.6) (.56) 1.1 .04
---- ---- ---- ----

Net income (loss) as reported $(9.1) $(.33) $7.3 $.29
==== ==== ==== ====


Unusual and Non-Operating Factors

Results for Triarc's second quarter and six month periods reflect the impact of charges related to its February 1999 debt refinancings. Capital structure reorganization related charges of $(0.3) million ($(0.2) million after tax or $(.01) per share) and $(1.2) million ($(0.8) million after tax or $(.03) per share) are reflected in the 2000 and 1999 second quarter periods, respectively. Capital structure reorganization related charges of $(0.6) million ($(0.4) million after tax or $(.02) per share) and $(4.9) million ($(3.0) million after tax or $(.11) per share) are reflected in the first six months of 2000 and 1999, respectively. Triarc also recorded an extraordinary charge of $(12.1) million after tax, or $(.43) 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 in the 1999 six month period.

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 periods 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 second quarter and first six months reflect increased corporate expenses of $3.0 million and $5.8 million, respectively, principally due to the impact of a new executive compensation plan approved by shareholders in 1999. Results for the first six months of 2000 also reflect increased interest expense of $5.3 million due to higher average borrowings from the February 1999 refinancing more than offset by increased investment income of $9.2 million. Other income decreased for the 2000 second quarter and first six month periods by $1.3 million and $1.5 million, respectively. Such decreases include a $0.9 million credit for the partial collection of secured loans from a bankrupt former affiliate.

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

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 for the year ended January 2, 2000, other current and periodic filings by the Company with the Securities and Exchange Commission and the Registration Statement on Form S-1 filed by the Snapple Beverage Group, Inc. on June 27, 2000, 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


Triarc Companies, Inc.
Condensed Consolidated Statement of Earnings
Second Quarter and Six Months Ended July 4, 1999 and July 2, 2000

Second Quarter
-------------------------------
1999 2000
---- ----
(In thousands except per share amounts)

Revenues $ 250,826 $ 266,169
=========== ===========

Earnings before interest,
taxes, other
non-operating items,
depreciation,
amortization and
capital structure
reorganization related charges (a) $ 35,626 $ 37,614
Depreciation and amortization (8,773) (9,332)
----------- -----------
26,853 28,282
Capital structure
reorganization related
charges (b) (1,217) (315)
----------- -----------
Operating profit 25,636 27,967
Interest expense (22,193) (23,495)
Investment income, net 7,023 5,312
Other, net (c) 1,743 418
----------- -----------
Income from continuing
operations before
income taxes 12,209 10,202
Provision for income taxes (7,004) (5,612)
----------- -----------
Income from continuing
operations 5,205 4,590
Discontinued operations (d) (985) --
Extraordinary charges (e) -- --
----------- -----------
Net income (loss) $ 4,220 $ 4,590
=========== ===========
Basic income (loss)
per share:
Income from
continuing operations $ .20 $ .19
Discontinued operations (d) (.04) --
Extraordinary charges (e) -- --
----------- -----------
Net income (loss) $ .16 $ .19
=========== ===========
Diluted income (loss) per share:
Income from continuing operations $ .19 $ .18
Discontinued operations (d) (.04) --
Extraordinary charges (e) -- --
----------- -----------
Net income (loss) $ .15 $ .18
=========== ===========

Shares used to calculate
income (loss) per share:
Basic 26,434 23,954
Diluted 27,339 25,132



Six Months
---------------------------------
1999 2000
---- ----
(In thousands except per share amounts)

Revenues $ 429,017 $ 456,187
=========== ===========

Earnings before interest,
taxes, other
non-operating items,
depreciation,
amortization and
capital structure
reorganization related charges (a) $ 56,722 $ 59,555
Depreciation and amortization (17,197) (18,465)
----------- -----------
39,525 41,090
Capital structure
reorganization related
charges (b) (4,867) (649)
----------- -----------
Operating profit 34,658 40,441
Interest expense (41,328) (46,618)
Investment income, net 12,307 21,488
Other, net (c) 2,401 934
----------- -----------
Income from continuing
operations before
income taxes 8,038 16,245
Provision for income taxes (4,582) (8,935)
----------- -----------
Income from continuing
operations 3,456 7,310
Discontinued operations (d) (484) --
Extraordinary charges (e) (12,097) --
----------- -----------
Net income (loss) $ (9,125) $ 7,310
=========== ===========
Basic income (loss)
per share:
Income from
continuing operations $ .12 $ .31
Discontinued operations (d) (.02) --
Extraordinary charges (e) (.43) --
----------- -----------
Net income (loss) $ (.33) $ .31
=========== ===========
Diluted income (loss) per share:
Income from continuing operations $ .12 $ .29
Discontinued operations (d) (.02) --
Extraordinary charges (e) (.43) --
----------- -----------
Net income (loss) $ (.33) $ .29
=========== ===========

Shares used to calculate
income (loss) per share:
Basic 27,875 23,880
Diluted 28,328 25,116





(a) Includes a non-recurring credit of $1.5 million ($1.0 million after tax or $.04 per share) for the second quarter and six months ended July 2, 2000 from the favorable settlement of insurance claims by the purchaser of an insurance subsidiary of the Company sold in 1998. Such income was reported as a reduction of general and administrative expenses since the settlement effectively represents an adjustment to prior period insurance reserves.

(b) 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) $1.2 million ($0.8 million after tax or $.03 per share) and $4.9 million ($3.0 million after tax or $.11 per share) for the second quarter and six months ended July 4, 1999, respectively, and (2) $0.3 million ($0.2 million after tax or $.01 per share) and $0.6 million ($0.4 million after tax or $.02 per share) for the second quarter and six months ended July 2, 2000, respectively.

(c) Includes a non-recurring credit of $0.9 million ($0.5 million after tax or $.02 per share) for the second quarter and six months ended July 2, 2000 resulting from the partial collection in June 2000 of secured loans from a bankrupt former affiliate which had been fully reserved in the fiscal year ended April 30, 1993 and prior years.

(d) On July 19, 1999 the Company sold 41.7% of its remaining 42.7%interest in a propane business, retaining a 1% limited partner interest. The equity in the losses of the propane business and the recognition of deferred gain from the 1996 sale of a 57% interest in the Company's propane business for the second quarter and six months ended July 4, 1999 are reported as discontinued operations.

(e) 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.

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