Industry News | May 12, 2007

Arby's Parent Shows 1Q Profit

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Restaurant Operations Highlights

* Systemwide same-store sales were down 1% in the 2007 first quarter versus an increase of 4% in the 2006 first quarter primarily due to poor weather conditions and continued under-performance of company-owned stores in the economically-weaker Michigan and Ohio regions.

* Net sales from company-owned Arby’s restaurants were $266.5 million in the 2007 first quarter, compared with $258.8 million in the 2006 first quarter. The increase reflects the addition of 44 net company-owned restaurants since April 2, 2006. Same-store sales for company-owned restaurants decreased 2% in the 2007 first quarter (2% increase in the 2006 first quarter).

* 2007 first quarter year same-store sales for franchised restaurants decreased 1% (5% increase in the 2006 first quarter).

* Royalties and franchise and related fees increased to $19.7 million in the 2007 first quarter, compared with $18.4 million in the 2006 first quarter, due primarily to 95 openings of franchised restaurants since April 2, 2006, with generally higher average unit volumes, and the 7 restaurants that sold to franchisees since April 2, 2006 replacing the royalties from 30 franchised restaurants closed and the elimination of royalties from 17 restaurants that were acquired from franchisees since April 2, 2006.

* The gross margin for company-owned restaurants increased to 27% of sales in the 2007 first quarter, compared with 26% of sales in the 2006 first quarter.

*Restaurant business operating profit increased to $22.8 million in the 2007 first quarter versus $19.2 million in the 2006 first quarter.

* In the 2007 first quarter, the Arby’s system opened 32 new units and closed 11 generally under-performing units. Triarc plans to open 35 new company-owned units during the remainder of 2007. As of April 1, 2007, Arby’s had commitments from franchisees to build 338 new units through 2013.

News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.