UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 12, 2003
TRIARC COMPANIES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-2207 38-0471180
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(State or other (Commission (I.R.S. Employer
jurisdiction of File No.) Identification No.)
incorporation of
organization)
280 Park Avenue
New York, NY 10017
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (212) 451-3000
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(Former name or former address, (Zip Code)
if changed since last report)
Item 9. Regulation FD Disclosure (including information provided under
Item 12, "Results of Operations and Financial Condition")
The information required by Item 12 is being furnished under Item 9 in
accordance with the Securities and Exchange Commission's interim filing guidance
provided in SEC Release No. 33-8216.
On May 12, 2003, Triarc Companies, Inc. (the "Company") issued a press
release announcing its financial results for the fiscal quarter ended March 30,
2003. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information in this report, including the Exhibit, is being furnished
and shall not be deemed to be "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that Section. In addition, the information in this report,
including the Exhibit, shall not be incorporated by reference into the filings
of the Company under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except as shall be expressly set forth by
specific reference in such filing.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRIARC COMPANIES, INC.
By: Francis T. McCarron
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Francis T. McCarron
Senior Vice President and
Chief Financial Officer
Dated: May 12, 2003
EXHIBIT INDEX
Exhibit Description
99.1 Press Release dated May 12, 2003
Exhibit 99.1
For Immediate Release
CONTACT: Anne A. Tarbell
(212) 451-3030
www.triarc.com
TRIARC REPORTS FIRST QUARTER 2003 RESULTS
New York, NY, May 12, 2003 - Triarc Companies, Inc. (NYSE: TRY) announced
today the results of operations for its first quarter ended March 30, 2003.
Highlights
o Consolidated revenues increased to $69.7 million in the first quarter of
2003 from $22.4 million in the first quarter of 2002 primarily reflecting
the December 2002 acquisition of Sybra, Inc. ("Sybra"), the owner of 239
Arby's(R) restaurants as of March 30, 2003. Sybra's net sales for the first
quarter of 2003 were $48.5 million.
o Consolidated revenues were also positively impacted by royalties from 115
restaurants opened since March 31, 2002 with generally higher sales volumes
replacing the royalties from 56 generally underperforming restaurants
closed since March 31, 2002. Partially offsetting the above was the
elimination upon consolidation of $1.7 million of Sybra royalties paid to
Arby's, Inc. in the 2003 first quarter and a decline in same store sales.
o System wide same store sales declined (2.0)% in the first quarter of 2003
versus a strong 4.0% increase in the 2002 first quarter, reflecting the
adverse effects in 2003 of severe weather, restaurant industry discounting
and sluggish economic conditions.
o Consolidated operating profit increased to $3.6 million in the 2003 first
quarter from $1.3 million in the 2002 first quarter. Consolidated operating
profit included operating profit of our restaurant operations which
increased to $16.1 million in the 2003 first quarter from $13.5 million in
the 2002 first quarter. These increases reflect a $2.3 million positive net
impact on operating profit of the Sybra acquisition. The remaining increase
was mainly due to an increase in royalties as a result of net new store
openings.
o Consolidated depreciation and amortization increased to $3.4 million in the
2003 first quarter from $1.6 million in the 2002 first quarter.
Consolidated depreciation and amortization included depreciation and
amortization of our restaurant operations which increased to $2.0 million
in the 2003 first quarter from $0.3 million in the 2002 first quarter as a
result of the Sybra acquisition.
o Consolidated interest expense increased to $(8.5) million in the 2003 first
quarter from $(6.4) million in the 2002 first quarter reflecting the
inclusion of approximately $98 million of Sybra debt as of the beginning of
the 2003 first quarter, the effect of which was partially offset by lower
balances of the Arby's securitization debt.
o Consolidated net investment income declined to $3.1 million in the 2003
first quarter from $6.1 million in the 2002 first quarter primarily due to
lower net realized gains on the sale of investments and to a lesser extent
lower available yields on cash equivalents and short-term debt instruments.
o The 2003 first quarter consolidated net loss was $(2.0) million, or $(.10)
per share, compared to a net loss of $(1.0) million, or $(.05) per share,
for the first quarter of 2002. This change reflects the effect of the
increase in operating profit discussed above which was more than offset by
the effects of higher consolidated interest expense and a decline in
consolidated net investment income, also discussed above.
o In the first quarter of 2003, the Arby's system opened 17 new units and
closed 15 units (generally underperforming stores). As of March 30, 2003,
Arby's had commitments from franchisees to build approximately 550 new
units through 2010.
Commenting on corporate developments, Nelson Peltz, Triarc's Chairman and
Chief Executive Officer, said: "With our significant cash, cash equivalents and
short-term investments, potential to issue equity securities and borrowing
capacity beyond that, I believe we are well positioned to make acquisitions. I
am confident that our selection process will yield the right opportunities."
Peltz added: "The Sybra integration is progressing smoothly. We are excited
about the many opportunities that Sybra will present to strengthen the Arby's
brand which we believe can enhance Triarc shareholder value."
Discussing restaurant operations, Peter May, Triarc's President and Chief
Operating Officer, said: "Over the last several months, Arby's, like many of its
restaurant peers, was impacted by several factors which adversely affected
financial results. Looking ahead, Arby's management, together with franchisees,
have developed a number of growth initiatives for 2003, including new Market
Fresh(R) sandwiches, new `artisan' breads, new equipment technologies and
exciting new advertising. We believe that these initiatives can bridge the gap
between fast food and fast casual offerings, thus broadening Arby's consumer
appeal."
Triarc is a holding company and through its subsidiaries, the franchisor of
the Arby's(R) restaurant system and, as of March 30, 2003, an operator of 239
Arby's restaurants located in the United States.
# # #
Note and Table To Follow
NOTE TO PRESS RELEASE
The statements in this press release that are not historical facts,
including, most importantly, information concerning possible or assumed future
results of operations of Triarc Companies, Inc. and its subsidiaries
(collectively, "Triarc" or the "Company") and 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"). All statements which address operating performance,
events or developments that are expected or anticipated to occur in the future,
including statements relating to revenue growth, earnings per share growth or
statements expressing general optimism about future operating results, are
forward-looking statements within the meaning of the Reform Act. These
forward-looking statements are based on our current expectations, speak only of
the date of this press release and are susceptible to a number of risks,
uncertainties and other factors. Our actual results, performance and
achievements may differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. For those
statements, we claim the protection of the safe-harbor for forward-looking
statements contained in the Reform Act. Many important factors could affect our
future results and could cause those results to differ materially from those
expressed in the forward-looking statements contained herein. Such factors
include, but are not limited to, the following: competition, including pricing
pressures, the potential impact of competitors' new units on sales by Arby's
restaurants and consumers' perceptions of the relative quality, variety and
value of the food products offered; success of operating initiatives;
development and operating costs; advertising and promotional efforts; brand
awareness; the existence or absence of positive or adverse publicity; market
acceptance of new product offerings; new product and concept development by
competitors; changing trends in consumer tastes and preferences (including
changes resulting from health or safety concerns with respect to the consumption
of beef, french fries or other foods or the effects of food-borne illnesses) and
in spending and demographic patterns; the business and financial viability of
key franchisees; availability, location and terms of sites for restaurant
development by the Company and its franchisees; the ability of franchisees to
open new restaurants in accordance with their development commitments, including
the ability of franchisees to finance restaurant development; delays in opening
new restaurants or completing remodels; anticipated or unanticipated restaurant
closures by the Company and its franchisees; the ability to identify, attract
and retain potential franchisees with sufficient experience and financial
resources to develop and operate Arby's restaurants; changes in business
strategy or development plans; quality of the Company's and franchisees'
management; availability, terms and deployment of capital; business abilities
and judgment of the Company's and franchisees' personnel; availability of
qualified personnel to the Company and to franchisees; labor and employee
benefit costs; availability and cost of energy, raw materials, ingredients and
supplies; the potential impact that interruptions in the distribution of
supplies of food and other products to Arby's restaurants could have on sales at
Company-owned restaurants and the royalties that Arby's receives from
franchisees; availability and cost of workers' compensation and general
liability premiums and claims experience; changes in national, regional and
local economic, business or political conditions in the countries and other
territories in which the Company and its franchisees operate; changes in
government regulations, including franchising laws, accounting standards,
environmental laws, minimum wage rates and taxation requirements; the costs,
uncertainties and other effects of legal, environmental and administrative
proceedings; the impact of general economic conditions on consumer spending,
including a slower consumer economy and the effects of war or terrorist
activities; adverse weather conditions; and other risks and uncertainties
affecting the Company and its subsidiaries detailed in the Company's Form 10-K
for the fiscal year ended December 29, 2002 (see especially "Item 1.
Business-Risk Factors" and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations"), and in our other current and
periodic filings with the Securities and Exchange Commission, all of which are
difficult or impossible to predict accurately and many of which are beyond our
control. We will not undertake and specifically decline any obligation to
publicly release the results 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 our policy generally not to make any specific
projections as to future earnings, and we do not endorse any projections
regarding future performance that may be made by third parties.
Triarc Companies, Inc.
Condensed Consolidated Statements of Operations (a)
Quarter Ended March 31, 2002 and March 30, 2003
2002 2003
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(In thousands except per share amounts)
(Unaudited)
Revenues:
Net sales $ -- $ 48,497
Royalties and franchise and related fees (b) 22,381 21,237
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22,381 69,734
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Costs and expenses:
Cost of sales, excluding depreciation and amortization -- 36,255
Advertising and selling 45 3,100
General and administrative 19,461 23,380
Depreciation and amortization, excluding amortization
of deferred financing costs 1,581 3,383
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21,087 66,118
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Operating profit 1,294 3,616
Interest expense (6,360) (8,458)
Insurance expense related to long-term debt (1,175) (1,092)
Investment income, net 6,062 3,141
Other income (expense), net (570) 557
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Loss before income taxes (749) (2,236)
(Provision for) benefit from income taxes (297) 262
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Net loss $ (1,046) $ (1,974)
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Loss per share:
Basic $ (.05) $ (.10)
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Diluted $ (.05) $ (.10)
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Shares used to calculate loss per share:
Basic 20,422 20,413
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Diluted(c) 20,422 20,413
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(a) On December 27, 2002, the Company completed the acquisition of Sybra,
Inc. As of March 30, 2003, Sybra owned and operated 239 Arby's
restaurants in nine states and, prior to the Sybra Acquisition, was the
second largest franchisee of Arby's restaurants. As a result of the
Sybra Acquisition, the consolidated results of operations for the 2003
first quarter include Sybra's results but do not include royalties and
franchise and related fees paid by Sybra to Arby's, Inc., which are
eliminated in consolidation. The consolidated results of operations for
the 2002 first quarter, however, include royalties and franchise fees
from Sybra but do not include Sybra's results.
(b) Includes royalties from Sybra for the 2002 first quarter whereas the
royalties from Sybra for the 2003 first quarter were eliminated in
consolidation. Such royalties were approximately $1.7 million in both
periods.
(c) The shares used to calculate diluted loss per share for the quarters
ended March 31, 2002 and March 30, 2003 are the same as those used to
calculate basic loss per share since the Company reported a net loss
and, therefore, the effect of all potentially dilutive securities
would have been antidilutive. Had the Company reported net income for
the quarters ended March 31, 2002 and March 30, 2003, the shares used
to calculate diluted income per share would have been 21,823,000 and
21,747,000, respectively, reflecting the effect of dilutive stock
options. The effects of dilutive stock options represented in such
amounts reflect the average price of the Company's stock during the
indicated periods. These dilutive effects may not be representative
of the effects that may occur in future periods. Accordingly, this
information is presented for informational purposes only.