Triarc Companies, Inc. (NYSE: TRY) announced today the results of operations for its third quarter of 2002.
Domestic comparative store results of Arby's®, Triarc's restaurant franchising business, increased 4.6% (4.2% year-to-date) in the 2002 third quarter versus the 2001 third quarter. Compared to prior year periods, Arby's 2002 third quarter and first nine months results were favorably impacted by higher sales of Arby's Market Fresh(TM) premium sandwiches spurred in part by more national advertising in 2002, and by higher sales of core products. While year-to-date 2002 EBITDA (which we define as earnings before interest, taxes, other non-operating items, depreciation and amortization) of $45.1 million was 7% higher than in the prior year comparable period, third quarter 2002 Arby's EBITDA of $15.8 million was relatively flat reflecting higher advertising expenses, as a result of an additional flight of national TV advertising in 2002. Arby's also incurred costs associated with its 2002 bi-annual national convention and had higher compensation expenses versus the 2001 comparable quarter.
Twenty-three new Arby's units were opened and 13 units (principally low volume stores) were closed in the 2002 third quarter (for a total of 65 new store openings and 47 store closings in the first nine months of 2002). As of September 29, 2002, Arby's has commitments from franchisees to build approximately 600 new units over the next eight years.
Triarc Companies reported a net loss from continuing operations for the 2002 third quarter of $(2.6) million, or $(.12) per share, compared to a net loss of $(1.8) million, or $(.08) per share, for the 2001 third quarter. The higher loss principally reflected a 2002 third quarter investment loss of $(0.4) million compared to $5.9 million of investment income in the 2001 third quarter. This decline in investment income principally resulted from lower available yields on cash equivalents and short-term debt instruments as well as investment write-downs. Additionally, expenses for a proposed acquisition that was not consummated were recorded in the 2002 third quarter. The effects of the above were partially offset by both improved operating factors, notably an increase in Arby's royalties and franchise fees and lower consolidated general and administrative expenses, as well as the catch-up effect of an increase in the effective tax rate for the 2002 third quarter resulting in a greater tax benefit.
Commenting on corporate developments, Nelson Peltz, Triarc's Chairman and Chief Executive Officer, said: "With our significant cash and investment position, we continue to evaluate strategic opportunities with the objective of increasing value at Triarc. We also believe our stock remains a very compelling investment and, between July and October 2002, we purchased approximately 290,000 shares at an average price of approximately $24 per share."
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