Wendy's International, Inc.

Wendy's International, Inc.

April 06, 2006 08:01 ET

Wendy's International, Inc. Announces 2006 First Quarter Sales; Tim Hortons Posts Strong Results in Canada and U.S.

DUBLIN, Ohio--(CCNMatthews - Apr 6, 2006) -

Wendy's International, Inc. (NYSE:WEN) today announced first quarter same-store sales and provided an update on continued progress with its strategic initiatives.

First Quarter sales

The Company announced preliminary same-store sales results for the first quarter, which ended on Sunday, April 2, 2006:

-- Tim Hortons® first quarter same-store sales increased 8.7% at restaurants in Canada and 9.8% in the United States.

-- Wendy's® same-store sales decreased 4.8% at U.S. company stores and 5.2% at U.S. franchised restaurants.

-- Baja Fresh® Mexican Grill's system same-store sales declined 3.6% to 3.8%.

First Quarter Same-Store Sales Summary

1Q 2006 1Q 2005
Wendy's U.S. Company -4.8% -2.2%
Wendy's U.S. Franchise -5.2% -1.0%
Tim Hortons Canada 8.7% 5.8%
Tim Hortons U.S. 9.8% 7.7%
Baja Fresh System -3.6% to -3.8% -6.1%

Tim Hortons promoted its Yogurt and Berries (in Canada) and its Coffee and Bagel combo (in the U.S.) during January. In Canada during February, the Company promoted its chicken noodle soup and turkey bacon club combo and ran coffee-specific advertising in Canada during the Olympics. In the U.S. during February, the Company promoted its flavoured coffees and began to roll out its new Hot Breakfast Sandwich. In March, Tim Hortons ran its annual "Roll Up the Rim to Win®" contest that provides consumers in Canada and the U.S. the opportunity to win valuable prizes.

The Company completed the initial public offering of 17.25% of Tim Hortons in March, and has announced that it intends to spin off the remainder of the company by December 31, 2006. As a result of the successful completion of the IPO, as well as certain other factors, the Company now expects to record unanticipated tax benefits in the first quarter. The Company does not expect to realize benefits of a similar nature in subsequent periods.

Wendy's launched several initiatives during the first quarter under its three-tiered "Combo Plan" to grow sales, improve restaurant margins and reduce costs throughout the organization. Wendy's has been promoting its Spicy Chicken sandwich, launched three new Garden Sensations salads in March and plans to introduce its new Frescata line of deli sandwiches with national advertising this month.

"While we are not happy with our first-quarter sales performance, we are making progress on many aspects of our Combo Plan," said Jack Schuessler, Chairman and Chief Executive Officer. "We are optimistic about the potential for our new salads and Frescata deli sandwiches to boost sales, and we are working to significantly reduce general and administrative costs throughout our organization."

Wendy's paid an average of $1.38 per pound for fresh ground beef during the first quarter of 2006, versus $1.42 per pound a year ago. The Company expects to pay $1.425 per pound in the second quarter of 2006, versus $1.52 per pound a year ago.

First Quarter conference call and webcast scheduled for April 27

The Company will release first-quarter earnings on Thursday, April 27 and host a conference call, along with executive management of Tim Hortons, at 2:00 p.m. (Eastern). Investors and the public may participate in the conference call in either one of the following ways:

-- Phone Call: The dial-in number is 877-572-6014 (U.S. and Canada) or 706-679-4852 (International). No need to register in advance.

-- Simultaneous Web Cast: Available at www.wendys-invest.com. The call will also be archived at that site.

Monthly Same-Store Sales Summary for January, February and March(a)

Jan. Jan. Feb. Feb. March March
2006 2005 2006 2005 2006 2005
---------------------------------- ----- ---- ----- ----- ----- -----
Wendy's U.S. Company -4.8% 0.5% -6.4% -2.4% -3.2% -5.1%
---------------------------------- ----- ---- ----- ----- ----- -----
Wendy's U.S. Franchise -4.6% 1.9% -6.8% -1.0% -4.1% -4.0%
---------------------------------- ----- ---- ----- ----- ----- -----
Tim Hortons Canada 9.2% 7.6% 7.8% 6.4% 9.0% 3.2%
---------------------------------- ----- ---- ----- ----- ----- -----
Tim Hortons U.S. 8.7% 9.2% 9.7% 8.2% 11.3% 5.5%
---------------------------------- ----- ---- ----- ----- ----- -----

(a) Easter was in March a year ago, but will be in April this year.

Safe Harbor statement

Certain information in this news release, particularly information regarding future economic performance and finances, and plans, expectations and objectives of management, is forward looking. Factors set forth in our Safe Harbor under the Private Securities Litigation Reform Act of 1995, in addition to other possible factors not listed, could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. Please review the Company's Safe Harbor statement at http://www.wendys-invest.com/safeharbor.

Wendy's International, Inc. overview

Wendy's International, Inc. is one of the world's largest restaurant operating and franchising companies with more than 9,900 total restaurants and quality brands, including Wendy's Old Fashioned Hamburgers® and Baja Fresh Mexican Grill. The Company also has investments in three additional quality brands - Tim Hortons, Cafe Express and Pasta Pomodoro®. More information about the Company is available at www.wendys-invest.com.

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