Wendy's Reports First Quarter Results

Wendy's International, Inc. (NYSE: WEN) announced May 3 strong sales and earnings performance for the first quarter. The results included same-store sales growth at Wendy's¨ U.S. company stores and Tim Hortons¨ restaurants in Canada, 20% earnings per share growth and progress on strategic initiatives to improve return on invested capital.

First Quarter Highlights Highlights for the quarter, which ended on April 2, 2000, included:

• Total diluted earnings per share were $0.30, up 20% from $0.25 earned in the first quarter of 1999. Base earnings per share (excluding asset gains) were $0.29, up 21% from $0.24 reported a year ago. This was the fifth consecutive quarter in which
• Base EPS grew by at least 20%.
• Systemwide sales grew 9.9% to $1.8 billion. Total revenues increased 9.1% to $520 million.
• Same-store sales at Wendy's U.S. company restaurants grew 3.5%, on top of 9.9% growth in the same period a year ago.
• Same-store sales at Tim Hortons Canadian restaurants increased 9.9%, on top of 10.1% growth in the same period a year ago.
• Wendy's domestic operating margin was 15.8%, equal to a year ago.
• Net income was $36 million, up 12% from a year ago.
• The Company made significant progress on its strategic initiatives to improve shareholder value, highlighted by the purchase of 4.3 million shares of Wendy's common stock during the quarter for $74 million. Since the beginning of the Company's repurchase program in 1998 through the end of the first quarter, the Company has purchased a total of approximately 21 million shares for $470 million.
• The board has authorized share repurchase up to a total of $600 million.

"We continue to deliver excellent results in our core Wendy's [7] North America and Tim Hortons [8] Canadian businesses," said Jack Schuessler, CEO and president of the company. "We are pleased with the 20% increase in EPS. It was a high quality quarter and the earnings results exceeded our stated goal of producing 12% to 15% annual EPS growth.

"Our other business units, including Wendy's bakery, International Wendy's and Tim Hortons U.S., performed better than expected. In particular, our Tim Hortons U.S. business continues to improve, posting a 14.8% increase in same- store sales for the quarter," Schuessler added. "At the same time, we continued to implement store-level productivity initiatives to improve profitability and aggressively purchased our common shares during the quarter. Our primary goal is to improve shareholder value."

Management is focused on several programs to build its brands, sales and profits.

"Our Service Excellence(TM) rollout at Wendy's continues throughout the system and it is clear that the program is having a very positive impact on our sales performance, brand equity and customer service," said Tom Mueller, President and Chief Operating Officer of Wendy's North America.

"A key to our sales performance during the first quarter was effective and balanced marketing with our Super Value Menu(TM), the Cheddar Lovers' Bacon Cheeseburger(TM) and Chicken Nuggets(TM)," added Mueller. "We just completed a successful promotion with our Monterey Ranch Chicken(TM) sandwich and plan to emphasize our growing late night business during the second quarter."

Tim Hortons performance in Canada was again outstanding.

"We continue to drive our sales by increasing customer transactions with improved speed of service initiatives, especially at the drive-though window," said Paul House, President and Chief Operating Officer of Tim Hortons. "Our Always Fresh¨ coffee and baked goods promise continues as the foundation of our success.

"We introduced coffee cake as a new product during the first quarter and it was a hit with customers. Our marketing during the second quarter will be focused on our iced cappuccino product," said House.

Company Hosts Annual Meeting of Shareholders

The Company held its Annual Meeting of Shareholders today in Columbus, Ohio. Shareholders elected five directors to three-year terms: James V. Pickett, Thomas F. Keller, Ronald V. Joyce, Andrew G. McCaughey and David P. Lauer.

Additionally, shareholders ratified the selection of PricewaterhouseCoopers LLP as independent public accountants, approved a proposal to amend the Company's 1990 Stock Option Plan and approved an amendment to permit electronic proxy voting.

Quarterly Dividend Approved

The Board of Directors has approved a quarterly dividend of $0.06 per share, payable on May 26 to shareholders of record as of May 15. It will be the Company's 89th consecutive dividend payment to shareholders.

April Sales Trends Positive

Preliminary results for the April reporting period, which ends on May 7, include same-store sales growth at Wendy's U.S. company stores in the 2.5% to 3% range and at Tim Hortons in Canada in the 7% to 8% range.

Wendy's International, Inc. is one of the world's largest restaurant operating and franchising companies, with more than $7 billion in systemwide sales in 1999 and two quality brands—Wendy's and Tim Hortons. Wendy's Old Fashioned Hamburgers¨ was founded in 1969 by Dave Thomas and is the third largest quick-service hamburger chain in the world with more than 5,500 restaurants in the U.S., Canada and international markets. Tim Hortons was founded in 1964 by Tim Horton and Ron Joyce and is the largest coffee and fresh baked goods chain in Canada. There are more than 1,800 restaurants in North America.