Wendy's/Arby's Group 3Q 'difficult' for both brands

by Bryan Salvage
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ATLANTA – Wendy’s/Arby’s Group, Inc., the third-largest quick-service restaurant company in the United States, said for the third quarter ended Oct. 3 it had a net loss was $0.9 million, or $0.00 per share, including net after-tax special charges of $20.7 million, or $0.05 per share. For the third quarter 2009, net income was $14.7 million, or $0.03 per share, including after-tax special charges of $12.8 million, or $0.03 per share.

Year-to-date net income was $6.4 million, or $0.01 per share, including net after-tax special charges of $48.2 million, or $0.11 per share, as compared to year-to-date 2009 net income of $18.7 million, or $0.04 per share, including after-tax special charges of $40.2 million, or $0.09 per share.

Consolidated revenues for the third quarter were $861.2 million as compared to third-quarter 2009 revenues of $903.2 million. Year-to date consolidated revenues were $2.6 billion as compared to year-to-date 2009 revenues of $2.7 billion.

Wendy’s third-quarter revenue was $600.7 million compared to revenue of $613.6 million in the third quarter a year ago, a year-over-year decrease of $12.9 million due primarily to the decline in company same-store sales. Arby’s third-quarter revenue was $260.5 million compared to $289.6 million in the third quarter a year ago, a decrease of $29.1 million, which was primarily due to the decrease in company same-store sales.

“The third quarter was a difficult one for both brands,” said Roland Smith, president and CEO of Wendy’s/Arby’s Group. “These third-quarter results are simply not satisfactory to us. We will not be satisfied until we are driving consistent and positive same-store sales, capturing the operating leverage inherent in the business and growing free cash flow.

In light of the company’s year-to-date results and updated expectations for the remainder of the year, it now anticipates 2010 adjusted EBITDA to be at the lower end of its previously communicated range, which was an estimated 3% to 5% decline as compared to 2009 adjusted EBITDA of $411.6 million. 2009 was normalized for the effect of the 53rd week (2009 net income was $5.1 million).
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