New York-based Triarc Companies, a holding firm and, through its subsidiaries, the franchisor of Arby’s restaurants, has reported domestic comparative store results of Arby’s up 3.9% year on year (4% year to date) in the Q2 2002.
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Arby’s generated Q2 2002 EBITDA of US$15.5m, up 16% year on year. For the H1 2002, Arby’s EBITDA increased 13% to US$29.3m.
Arby’s Q2 and H1 2002 results were favourably impacted by higher sales of core products as well as the continuing positive impact of Arby’s Market Fresh premium sandwiches. The introduction of two new Market Fresh sandwiches and the resumption of Arby’s national advertising in February and May were particularly important factors.
In total, 24 new Arby’s units were opened and 11 low volume units were closed in Q2 2002 (compared to 42 new store openings and 34 store closings in the H1 2002). As of 30 June 2002, Arby’s has commitments from franchisees to build approximately 600 new units. Triarc reported a net loss from continuing operations for the Q2 2002 of US$(7.5)m, or US$(0.37) per share, compared to net income from continuing operations of US$1m, or US$0.04 per share, for the Q2 2001. This fall principally reflected a Q2 2002 investment loss of US$(4.9)m compared to US$8.1m of investment income in the Q2 2001. This fall in investment income results from several investment writedowns, reflecting currently weak financing and stock market conditions, as well as lower available yields on cash equivalents and short-term debt instruments. The effect of the decline in investment income was partially offset by improved operating factors, notably an increase in Arby’s royalties and franchise fees and lower general and administrative expenses.
Nelson Peltz, chairman and CEO, said: “With our significant cash and investment position, we continue to evaluate strategic opportunities, including share repurchases, with the objective of increasing value at Triarc. We are confident our selection process will yield the right opportunities.”
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By GlobalDataDiscussing Arby’s operations, Peter May, president and COO, said: “Arby’s 2002 results have been characterised by continued strong comparative store results and by new store openings. We are optimistic about the balance of the year at Arby’s.”
Operating results
Arby’s EBITDA increased US$2.1m and US$3.3m in the Q2 and H1 2002, respectively, reflecting increases in royalties and franchise fees which resulted from the factors described above. There were no significant unusual or non-recurring items that affected Arby’s results for these periods.
