Triarc Companies Inc. (TRY)

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Wednesday, August 6, 2008
Wendy's second-quarter profit plunges 32 percentDayton Business Journal

Wendy's International Inc. late Tuesday reported its second-quarter profit sunk 32 percent because of higher commodity prices and costs related to the chain's pending acquisition.

The Dublin-based hamburger chain posted quarterly earnings of $19.9 million, or 22 cents a share, versus $29.2 million, or 33 cents a share, in the same period a year ago. Surging commodity prices cost the company an extra $11 million for the quarter compared to last year. Another factor was the absence of a $4.5 million gain from insurance proceeds which the company pulled in last year related to damage caused by Hurricane Katrina.

Wendy's also recorded $8.6 million in expenses, up from $4.7 million in last year's second quarter, related to the special committee formed in April 2007 to explore "strategic alternatives" for the chain. That led to a $2.34 billion deal announced this April to be acquired by Arby's owner Triarc Companies Inc. (NYSE:TRY). The transaction is expected to close by the end of the year.

Second-quarter revenue for Wendy's was down marginally at $631.9 million, versus $632.9 million last year. Sales at franchised restaurants open at least a year increased 1.1 percent while same-restaurant sales at Wendy's-owned stores were nearly flat, up 0.1 percent.

For the year's first half, the chain's profit was down 45 percent at $24.1 million, or 27 cents a share, versus $43.9 million, or 48 cents a share, in the first half of 2007. This year's total included nearly $17 million in restructuring and special committee-related costs, up from $11.6 million for the first six months of last year.

Revenue in the first half was down marginally at $1.21 billion, versus $1.22 billion last year.

Wendy's (NYSE:WEN) closed 2007 with profit of $87.9 million on revenue of $2.45 billion.

When merged with Arby's, the company will become the third-largest quick-service chain - passing up Subway Restaurants - and have approximately $12.5 billion in annual sales and more than 10,000 restaurants.






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