UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) March 27, 2003
TRIARC COMPANIES, INC.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 1-2207 38-0471180
----------------- -------------- --------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File No.) Identification No.)
incorporation of
organization)
280 Park Avenue
New York, NY 10017
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (212) 451-3000
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(Former name or former address, (Zip Code)
if changed since last report)
Page 1 of 14 Pages
Exhibit Index appears on Page 3
Item 9. Regulation FD Disclosure
On March 27, 2003, Triarc Companies, Inc. issued a press release announcing
the results of operations for its fiscal year and fourth quarter ended December
29, 2002. A copy of the press release is attached to this Current Report on Form
8-K as Exhibit 99.1 and is incorporated herein solely for purposes of this Item
9.
The information in this Current Report on Form 8-K, including the exhibit,
is furnished pursuant to Item 9 and shall not be deemed "filed" for the purposes
of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the
liabilities under that Section. Furthermore, the information in this Current
Report on Form 8-K, including the exhibit, shall not be deemed to be
incorporated by reference into the filings of Triarc Companies, Inc. under the
Securities Act of 1933.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on behalf by the undersigned
hereunto duly authorized.
TRIARC COMPANIES, INC.
By: /s/ Stuart I. Rosen
------------------------------
Stuart I. Rosen
Senior Vice President
and Associate General Counsel
Dated: March 27, 2003
EXHIBIT INDEX
Exhibit
Number Description of Document Page No.
99.1 Press Release dated March 27, 2003.
Exhibit 99.1
For Immediate Release
CONTACT: Anne A. Tarbell
(212) 451-3030
www.triarc.com
TRIARC REPORTS FULL YEAR AND FOURTH QUARTER 2002 RESULTS
New York, NY, March 27, 2003 - Triarc Companies, Inc. (NYSE: TRY) announced
today the results of operations for its fiscal year and fourth quarter ended
December 29, 2002.
Triarc reported net income of $1.3 million for 2002, or $.06 per share,
compared with net income of $52.4 million, or $2.31 per share, for 2001. This
decrease reflects the impact in 2001 of a $43.5 million after-tax gain from
discontinued operations, or $1.91 per share, for adjustments to the gain from
the October 2000 sale of the Snapple Beverage Group to Cadbury Schweppes plc
(compared with a gain of $11.1 million, or $.54 per share, for further
adjustments to the Snapple gain recorded in 2002 related to tax refunds). This
decrease also reflects a $32.8 million decrease in investment income principally
resulting from lower available yields on cash equivalents and short-term debt
instruments, the writedown of certain investments and, to a lesser extent, lower
balances of cash and short-term debt instruments. Other factors contributing to
the decrease were a non-recurring after-tax credit of $3.2 million in 2001 from
a litigation settlement and the after-tax effects of (1) 2002 third quarter
expenses related to a proposed acquisition that was not consummated and (2) a
decline in other income, net. The effects of the above were partially offset by
improved operating factors, notably an increase in Arby's(R) royalties and
franchise fees, as well as lower consolidated general and administrative
expenses.
Triarc reported a loss from continuing operations of ($9.8) million for
2002, or $(.48) per share, compared with income from continuing operations of
$9.0 million, or $.40 per share, for 2001. This decrease was due to the factors
discussed above other than the income resulting from the adjustments to the gain
from the sale of Snapple.
Domestic comparative store results of Arby's, Triarc's restaurant
franchising business, increased 2.2% for 2002 compared with 2001. Arby's results
were favorably impacted by higher sales of Market Fresh(R) premium sandwiches
spurred in part by more national advertising in 2002, higher sales of core
products and net new store openings. Fourth quarter 2002 same store sales
declined 3.3% versus a strong 3.9% increase in same store sales in 2001
reflecting the adverse effects in 2002 of severe weather, industry discounting
and sluggish economic conditions. Comparable store results in the first quarter
of 2003 remain challenging due to the factors discussed above.
Arby's 2002 EBITDA (which we define as earnings before interest, taxes,
other non-operating items, depreciation and amortization) of $60.6 million was
6.1% higher than in the prior year and increased 2.6% in the fourth quarter of
2002 compared with the 2001 fourth quarter to $15.5 million.
In 2002, 116 new Arby's units were opened and 64 units (generally,
underperforming stores) were closed (including 51 new store openings and 17
store closings in the fourth quarter). Average unit volumes at newly opened
domestic stores continued to be above the 2002 system average of approximately
$843,000, which was up 3.5% from 2001. As of December 29, 2002, Arby's had
commitments from franchisees to build approximately 550 new units through 2010.
Commenting on corporate developments, Nelson Peltz, Triarc's Chairman and
Chief Executive Officer, said: "In 2002, we completed the purchase of Sybra,
Arby's second largest franchisee and the owner of 239 Arby's restaurants, we
repurchased approximately 290,000 shares of our stock for approximately $7.0
million and we evaluated a number of potential acquisitions. I am proud of our
disciplined approach to our strategic options and believe we are well positioned
to continue to create shareholder value at Triarc."
Peltz added: "While the QSR environment remains challenging, Arby's will
continue to focus on growing its existing products, new product offerings,
continued national advertising and new unit openings."
Discussing Arby's operations, Peter May, Triarc's President and Chief
Operating Officer, said: "Together with franchisees, Arby's management has
developed a number of initiatives for 2003, including new Market Fresh
sandwiches, new `artisan' breads, new equipment technologies and advertising,
which should enhance Arby's `cut above' brand positioning and spur Arby's
growth."
May continued: "Triarc completed its acquisition of Sybra in late December
2002 at an attractive valuation. Our team at Arby's is working closely with
Sybra's experienced management to ensure a successful integration. We are
excited about the many opportunities that Sybra will present to strengthen the
Arby's brand. We also believe that ownership of these restaurants will increase
the value of the Arby's brand and thus enhance Triarc shareholder value."
Operating Results
Following is a calculation of Arby's EBITDA:
Fourth Quarter Fiscal Year
---------------- --------------
2001 2002 2001 2002
------ ------ ------- -------
(in millions)
Royalties and franchise and related fees $24.9 $24.9 $92.8 $97.8
General and administrative expenses (9.8) (9.4) (35.7) (37.2)
---- ---- ------ -----
EBITDA $15.1 $15.5 $57.1 $60.6
===== ===== ===== ======
Arby's EBITDA increased $0.4 million and $3.5 million in the fourth quarter
and fiscal year of 2002, respectively, reflecting lower expenses, primarily as a
result of timing differences associated with franchise development programs, in
the 2002 fourth quarter and increases in royalties and franchise and related
fees for fiscal year 2002, resulting from the factors discussed above.
Consolidated Results
Following is a discussion of consolidated results for the fourth quarters
and fiscal years of 2002 and 2001. All per share amounts are presented on a
fully diluted basis, where applicable.
Triarc reported income from continuing operations for the fourth quarter of
2002 of $1.4 million, or $.06 per share, compared with income from continuing
operations of $1.6 million, or $.07 per share, for the 2001 fourth quarter. This
comparison reflects a decrease in investment income due to the factors discussed
above partially offset by lower consolidated general and administrative
expenses. Triarc reported net income for the 2002 fourth quarter of $12.5
million, or $.58 per share, compared with net income of $6.5 million, or $.30
per share, for the 2001 fourth quarter. This increase reflected adjustments to
the Snapple sale gain recorded in the 2002 fourth quarter of $11.1 million, or
$.52 per share, (compared with $4.9 million, or $.23 per share, in the 2001
fourth quarter), also discussed above.
Triarc reported a loss from continuing operations of ($9.8) million for
2002, or $(.48) per share, compared with income from continuing operations of
$9.0 million, or $.40 per share, for 2001. The factors contributing to this
decline were discussed above. Triarc reported net income of $1.3 million for
2002, or $.06 per share, compared with net income of $52.4 million, or $2.31 per
share, for 2001. This decrease, in addition to the decline in income (loss) from
continuing operations noted above, reflects the impact in 2001 of a $43.5
million after-tax gain, or $1.91 per share, from the October 2000 sale of the
Snapple Beverage Group to Cadbury Schweppes plc (compared with $11.1 million or
$.54 per share, of adjustments to the Snapple gain recorded in 2002).
Triarc is a holding company and through its subsidiaries, the franchisor of
the Arby's(R) restaurant system and an operator of 239 Arby's restaurants
located in the United States.
..
# # #
Note and Table To Follow
NOTE TO PRESS RELEASE
The statements in this press release that are not historical facts,
including, most importantly, information concerning possible or assumed future
results of operations of Triarc Companies, Inc. and its subsidiaries
(collectively, "Triarc" or the "Company") and statements preceded by, followed
by, or that include the words "may," "believes," "expects," "anticipates" or the
negation thereof, or similar expressions, constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Reform Act"). All statements which address operating performance,
events or developments that are expected or anticipated to occur in the future,
including statements relating to revenue growth, earnings per share growth or
statements expressing general optimism about future operating results, are
forward-looking statements within the meaning of the Reform Act. These
forward-looking statements are based on our current expectations, speak only of
the date of this press release and are susceptible to a number of risks,
uncertainties and other factors. Our actual results, performance and
achievements may differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. For those
statements, we claim the protection of the safe-harbor for forward-looking
statements contained in the Reform Act. Many important factors could affect our
future results and could cause those results to differ materially from those
expressed in the forward-looking statements contained herein. Such factors
include, but are not limited to, the following: competition, including pricing
pressures, the potential impact of competitors' new units on sales by Arby's
restaurants and consumers' perceptions of the relative quality, variety and
value of the food products offered; success of operating initiatives;
development and operating costs; advertising and promotional efforts; brand
awareness; the existence or absence of positive or adverse publicity; market
acceptance of new product offerings; new product and concept development by
competitors; changing trends in consumer tastes and preferences (including
changes resulting from health or safety concerns with respect to the consumption
of beef, french fries or other foods or the effects of food-borne illnesses) and
in spending and demographic patterns; the business and financial viability of
key franchisees; availability, location and terms of sites for restaurant
development by the Company and its franchisees; the ability of franchisees to
open new restaurants in accordance with their development commitments, including
the ability of franchisees to finance restaurant development; delays in opening
new restaurants or completing remodels; anticipated or unanticipated restaurant
closures by the Company and its franchisees; the ability to identify, attract
and retain potential franchisees with sufficient experience and financial
resources to develop and operate Arby's restaurants; changes in business
strategy or development plans; quality of the Company's and franchisees'
management; availability, terms and deployment of capital; business abilities
and judgment of the Company's and franchisees' personnel; availability of
qualified personnel to the Company and to franchisees; labor and employee
benefit costs; availability and cost of energy, raw materials, ingredients and
supplies; the potential impact that interruptions in the distribution of
supplies of food and other products to Arby's restaurants could have on sales at
Company-owned restaurants and the royalties that Arby's receives from
franchisees; availability and cost of workers' compensation and general
liability premiums and claims experience; changes in national, regional and
local economic, business or political conditions in the countries and other
territories in which the Company and its franchisees operate; changes in
government regulations, including franchising laws, accounting standards,
environmental laws, minimum wage rates and taxation requirements; the costs,
uncertainties and other effects of legal, environmental and administrative
proceedings; the impact of general economic conditions on consumer spending,
including a slower consumer economy and the effects of war or terrorist
activities; adverse weather conditions; and other risks and uncertainties
affecting the Company and its subsidiaries detailed in the Company's Form 10-K
for the fiscal year ended December 29, 2002 (see especially "Item 1.
Business-Risk Factors" and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations"), and in our other current and
periodic filings with the Securities and Exchange Commission, all of which are
difficult or impossible to predict accurately and many of which are beyond our
control. We will not undertake and specifically decline any obligation to
publicly release the results of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events. In addition, it is our policy generally not to make any specific
projections as to future earnings, and we do not endorse any projections
regarding future performance that may be made by third parties.
Triarc Companies, Inc.
Condensed Consolidated Statements of Operations
Fourth Quarter and Fiscal Year Ended December 30, 2001 and December 29, 2002
Fourth Quarter Year
------------------------ ------------------------
2001 2002 2001 2002
---------- ---------- ---------- ----------
(In thousands except per share amounts)
Revenues, investment income and
other income (a) $ 30,485 $ 26,197 $ 137,146 $ 98,773
========== ========== ========== ==========
Costs and expenses:
General and administrative (e) $ 19,180 $ 16,906 $ 77,355 $ 75,893
Depreciation and amortization, excluding
amortization of deferred financing costs (f) 1,787 1,690 6,506 6,550
Interest expense (g) 6,962 6,208 30,447 26,210
Insurance expense related to long-term debt 1,181 1,102 4,805 4,516
Costs of proposed business acquisitions not
consummated 51 6 623 2,238
--------- -------- ---------- ----------
Total costs and expenses 29,161 25,912 119,736 115,407
---------- ---------- ---------- ----------
Income (loss) from continuing operations before
income taxes and minority interests 1,324 285 17,410 (16,634)
Benefit from (provision for) income taxes (10) (223) (8,696) 3,329
Minority interests in loss of a consolidated subsidiary (h) 252 1,293 252 3,548
------- --------- ------- ---------
Income (loss) from continuing operations 1,566 1,355 8,966 (9,757)
Discontinued operations:
Gain on disposal, net of income taxes (i) 4,933 11,100 43,450 11,100
---------- ---------- ---------- ----------
Net income $ 6,499 $ 12,455 $ 52,416 $ 1,343
========== ========== ========== ==========
Adjusted EBITDA (d) $ 5,712 $ 7,987 $ 10,468 $ 21,889
=========== ========== ========== ==========
Basic income (loss) per share:
Continuing operations $ .08 $ .07 $ .42 $ (.48)
Discontinued operations (i) .24 .54 2.02 .54
---------- ---------- ---------- ----------
Net income $ .32 $ .61 $ 2.44 $ .06
========== ========== ========== ==========
Diluted income (loss) per share:
Continuing operations $ .07 $ .06 $ .40 $ (.48)
Discontinued operations (i) .23 .52 1.91 .54
---------- ---------- ---------- ----------
Net income $ .30 $ .58 $ 2.31 $ .06
========== ========== ========== ===========
Shares to calculate income (loss) per share:
Basic 20,363 20,370 21,532 20,446
========== ========== ========== ==========
Diluted (j) 21,319 21,514 22,692 20,446
========== ========== ========== ==========
(a) The components of revenues, investment income Fourth Quarter Year
and other income follow: ---------------------- ------------------------
2001 2002 2001 2002
----------- --------- -------- --------
(In thousands)
Royalties and franchise and related fees $ 24,892 $ 24,893 $ 92,823 $ 97,782
Investment income, net (b) 4,403 145 33,632 851
Gain (loss) on sale of businesses 500 -- 500 (1,218)
Other income, net (c) 690 1,159 10,191 1,358
---------- ---------- ---------- ----------
Total revenues and other income $ 30,485 $ 26,197 $ 137,146 $ 98,773
========== ========== ========== ==========
(b) Includes other than temporary losses of $2.1 million ($1.3 million after
tax or $.06 per share) for the fourth quarter ended December 30, 2001 and
$3.5 million ($2.2 million after tax or $.10 per share) for the year ended
December 30, 2001, $3.5 million ($2.3 million after tax or $.10 per share)
for the fourth quarter ended December 29, 2002 and $14.5 million ($9.3
million after tax or $.45 per share) for the year ended December 29, 2002.
The provisions for unrealized losses deemed to be other than temporary
resulted from declines in the underlying economics of specific marketable
equity securities and other investments and/or volatility in capital
markets.
(c) Includes $8.3 million ($5.3 million after tax or $.23 per share) for the
year ended December 30, 2001 of interest income representing interest on
the proceeds from Cadbury Schweppes plc (in connection with the 338 (h)(10)
election discussed in (i) below).
(d) The components of Adjusted EBITDA and a Fourth Quarter Year
------------------------- --------------------------
reconciliation of Adjusted EBITDA to 2001 2002 2001 2002
-------- --------- ------- ----------
EBITDA and net income follow: In thousands)
Royalties and franchise and related fees $ 24,892 $ 24,893 $ 92,823 $ 97,782
General and administrative expenses before
non-recurring credit (19,180) (16,906) (82,355) (75,893)
---------- ---------- ---------- ----------
Adjusted EBITDA 5,712 7,987 10,468 21,889
Litigation settlement -- see (e) below -- -- 5,000 --
---------- ---------- ---------- ----------
EBITDA 5,712 7,987 15,468 21,889
Depreciation and amortization, excluding
amortization of deferred financing costs (f) (1,787) (1,690) (6,506) (6,550)
Interest expense (g) (6,962) (6,208) (30,447) (26,210)
Insurance expense related to long-term debt (1,181) (1,102) (4,805) (4,516)
Investment income, net 4,403 145 33,632 851
Gain (loss) on sale of businesses 500 -- 500 (1,218)
Costs of proposed business acquisitions not
consummated (51) (6) (623) (2,238)
Other income, net 690 1,159 10,191 1,358
---------- ---------- ---------- ----------
Income (loss) from continuing operations
before income taxes and minority interests 1,324 285 17,410 (16,634)
Benefit from (provision for) income taxes (10) (223) (8,696) 3,329
Minority interests in loss of a consolidated subsidiary (h) 252 1,293 252 3,548
----- ---------- ---------- ----------
Income (loss) from continuing operations 1,566 1,355 8,966 (9,757)
Discontinued operations:
Gain on disposal, net of income taxes (i) 4,933 11,100 43,450 11,100
---------- ---------- ---------- ----------
Net income $ 6,499 $ 12,455 $ 52,416 $ 1,343
========== ========== ========== ===========
(e) Includes a non-recurring credit of $5.0 million ($3.2 million after tax or
$.14 per share) for the year ended December 30, 2001 resulting from the
settlement of a class action lawsuit involving compensation previously paid
to the Company's Chairman and Chief Executive Officer and President and
Chief Operating Officer.
(f) Amortization of goodwill for the fourth quarter ended December 30, 2001
amounted to $0.2 million on both a pre-tax and after-tax basis, or $.01 per
share, and for the year ended December 30, 2001 amounted to $0.8 million on
both a pre-tax and after-tax basis, or $.04 per share. Effective December
31, 2001, the Company adopted Statement of Financial Accounting Standards
No. 142 "Goodwill and Other Intangible Assets." In accordance with the
provisions of SFAS No. 142, the Company no longer amortizes goodwill.
(g) Includes for the year ended December 30, 2001 expenses of $3.1 million
($2.0 million after tax or $.09 per share) representing interest on the
estimated tax liability in connection with the 338(h)(10) election
discussed in (i) below.
(h) Represents minority interests in loss of a consolidated subsidiary of $0.3
million or $.01 per share for both the fourth quarter and the year ended
December 30, 2001, $1.3 million or $.06 per share for the fourth quarter
ended December 29, 2002 and $3.5 million or $.17 per share in the year
ended December 29, 2002 principally for the 44.1% (through September 2002,
42.6% thereafter) minority interests in the net loss of 280 BT Holdings
LLC. The losses of 280 BT Holdings were due to other than temporary
unrealized losses on investments.
(i) On October 25, 2000 the Company sold its former premium beverage and soft
drink concentrate businesses. The income from discontinued operations for
the fourth quarter and year ended December 30, 2001 resulted entirely from
adjustments to the previously recognized estimated gain on disposal of the
Snapple Beverage Group and Royal Crown. These net adjustments principally
resulted from the realization of the estimated proceeds from Cadbury
Schweppes plc associated with the Company's agreement with Cadbury whereby
both the Company and Cadbury jointly elected to treat certain portions of
the Snapple Beverage Group sale as an asset sale in lieu of a stock sale
under the provisions of Section 338(h)(10) of the United States Internal
Revenue Code, net of estimated income taxes related to the election,
partially offset by the accrual of additional estimated costs and expenses
directly associated with the Snapple Beverage Group sale. The income from
discontinued operations for the fourth quarter and year ended December 29,
2002 resulted from the release of income tax reserves related to the sale
of the Snapple Beverage Group, discussed above, in connection with the
receipt of related income tax refunds.
(j) The shares used to calculate diluted loss per share for the year ended
December 29, 2002 are the same as those used to calculate basic loss per
share since the Company reported a loss from continuing operations and,
therefore, the effect of all potentially dilutive securities would have
been antidilutive. Had the Company reported income from continuing
operations for the year ended December 29, 2002, shares used to calculate
diluted income per share would have been 21,737,000 reflecting the effect
of dilutive stock options. The effects of dilutive stock options
represented in such amounts reflect the average price of the Company's
stock during the indicated periods. These dilutive effects may not be
representative of the effects that may occur in future periods.
Accordingly, this information is presented for informational purposes only.