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May 10, 2002

USA: Wendy’s reports strong April sales, calls TECONS to strengthen balance sheet

Dublin, Ohio-based Wendy's International, one of the world's largest restaurant operating and franchising companies, has reported its actual April same-store sales results, which were in-line with or higher than preliminary results announced on 1 May. For the April period, same-store sales increased 5.7% at Wendy's US company restaurants. Same-store sales increased 9% at Tim Hortons restaurants in Canada, and 16.1% at Tim Hortons restaurants in the US.

Dublin, Ohio-based Wendy’s International, one of the world’s largest restaurant operating and franchising companies, has reported its actual April same-store sales results, which were in-line with or higher than preliminary results announced on 1 May.

For the April period, same-store sales increased 5.7% at Wendy’s US company restaurants. Same-store sales increased 9% at Tim Hortons restaurants in Canada, and 16.1% at Tim Hortons restaurants in the US.

The company also announced that all of the outstanding US$2.50 Term Convertible Securities, Series A, issued by Wendy’s Financing I are being called for redemption. The redemption date has been set for 10 June 2002.

Wendy’s management said that if all of the securities are converted to equity, the company’s balance sheet would become stronger as its debt to total capital ratio would improve from 39% (including the TECONS), as of 30 December 2001, to about 27%.

There would be no negative impact on diluted earnings per share as the shares are already included in the company’s diluted EPS calculation, but there would be an increase of the float in common equity by 7.6 million shares. There would also be an increase in the company’s market capitalisation by about US$280m to US$290m, based on recent market prices.

As of 31 March 2002, there was US$200m in TECONS outstanding. The redemption price is 102.5% of the principal amount (or US$51.25 per US$50 TECONS), plus accrued and unpaid distributions to the day before the redemption date. The TECONS are convertible into Wendy’s common shares at any time prior to the close of business on 7 June at the conversion rate of 1.8932 common shares for each TECONS (equal to a conversion price of US$26.41 per common share).

Wendy’s has also declared a dividend of US$0.06 per common share, payable on 24 May 2002, to shareholders of record at the close of business on 13 May. Common shares issuable for TECONS properly surrendered for conversion to the conversion agent by the close of business on 13 May will be deemed outstanding for purposes of the dividend.

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