Wendy’s International, Inc. Announces 2008 First Quarter Results

• Continuing operations net income was $4.1 million and EBITDA were $42.8 million
• Continuing operations adjusted income was $8.4 million and adjusted EBITDA were $49.7 million

Company Focused on Quality and Innovation in Challenging Operating Environment

DUBLIN, Ohio – April 24, 2008 –    Wendy’s International, Inc. (NYSE: WEN) today announced its financial results for the first quarter of 2008, which ended on Sunday, March 30. 
     Including 2008 pre-tax expenses related to the Board of Director’s Special Committee of $6.7 million and $0.2 million of pre-tax restructuring charges, the Company reported for the first quarter of 2008:

• Income from continuing operations of $4.1 million, compared to $14.5 million for the first quarter of 2007;
• Diluted earnings per share (EPS) from continuing operations of $0.05, compared to $0.15 per share for the first quarter of 2007; and
• Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations of $42.8 million, compared to $57.0 million for the first quarter of 2007.

 The Company did not incur any Special Committee expense in the first quarter of 2007.
     Excluding 2008 expenses related to the Board’s Special Committee and restructuring charges and excluding 2007 restructuring charges, the Company reported for the first quarter of 2008:Adjusted income from continuing operations of $8.4 million, compared to $15.1 million for the first quarter of 2007;

• Adjusted diluted EPS from continuing operations of $0.10, compared to $0.16 per share for the first quarter of 2007; and
• Adjusted EBITDA from continuing operations of $49.7 million, compared to $58.0 million for the first quarter of 2007.

See reconciliations below. Adjusted income from continuing operations, EBITDA and EPS excludes expenses related to the Board’s Special Committee and restructuring charges.

      There were several unusual items affecting the comparability of 2008 first-quarter adjusted results to a year ago, including higher 2008 breakfast investments of $4.2 million, higher 2008 legal fees and reserves of $1.6 million, higher 2008 franchisee incentives of $1.3 million and higher 2008 convention costs of $0.6 million.  Excluding these expenses, EBITDA from continuing operations were approximately flat from a year ago.
      Commenting on the quarter, Chief Executive Officer and President Kerrii Anderson said, “We are not satisfied with first-quarter results.  We know we must do better and we are focused on driving sales and performance in future quarters.  We recently launched several high-quality products and introduced compelling, new advertising, as we continue to execute many elements of our strategic plan. 
      “After a very challenging January, same-store sales were better in February and March.  April same-store sales, which benefit from the Easter holiday shift, are running positive month to date,” said Anderson.  “We continue to highlight Wendy’s® quality value offerings, as our consumers feel the pressures of a weakened economy, record-high gasoline prices and soaring food costs.”
      Due to the uncertainties resulting from the economy, commodities and the Board’s Special Committee process, the Company does not plan to provide detailed earnings guidance for 2008 and beyond.

2008 1st Quarter Financial Highlights

• U.S. company-operated restaurant EBITDA margins were 8.1% in the first quarter of 2008, compared to 9.2% in the first quarter of 2007.  The year-over-year difference is due primarily to higher breakfast costs, lower-than-expected sales and higher commodity costs, partially offset by labor efficiency and menu price increases.
• Total company-operated restaurant EBITDA margins were 7.6% in the first quarter of 2008, compared to 8.6% one year ago. 
• As previously announced, first-quarter same-store sales at U.S. franchise-operated restaurants decreased 0.1%, compared to an increase of 3.7% in the first quarter of 2007.  First-quarter same-store sales at U.S. company-operated restaurants decreased 1.6%, compared to an increase of 3.8% in the first quarter of 2007. Sales trends improved in February and March compared to January, as sales rolled over the strongest quarter of the previous year.
• The Company faced a calendar shift in 2008 with the Easter holiday falling in the first quarter (March 21-23), as opposed to the second quarter a year ago. This negatively impacted same-store sales at company restaurants by an estimated 0.3% during the quarter. First-quarter sales also were impacted by the severe winter weather in March in the Midwest and North.
• The total number of system-wide Wendy’s restaurants as of March 30, 2008, was 6,622, compared to 6,658 as of the end of the same quarter a year ago. 

Company focused on quality, innovation and operations excellence
      The Company recently introduced its high-quality Chicken Go Wrap, featuring center-cut, chicken breast fillets – available Grilled, Spicy or Homestyle.  In addition, Wendy’s is offering for a limited-time its popular Southwest Chicken Caesar Salad.
      “New product introductions such as our Chicken Go Wrap are expected to drive customer traffic and strengthen our focus on quality,” Anderson said. 
      “Our enhanced strategic plan – ‘Doing What’s Right for Our Customers’ – leverages our strong history of quality and innovation and focuses on attracting new and important customer segments with value, beverage, snack and core sandwich strategies,” said Anderson. 
      The Company previously announced that Steve Farrar has returned to Wendy’s as Chief of North America Operations, a new position in the Company.  Reporting directly to Chief Operations Officer Dave Near, Farrar will be responsible for improving restaurant operations at company and franchise stores in all three U.S. regions and Canada, while growing sales and driving profit margins.  Farrar also will serve on Wendy’s strategic planning council.
      The Company’s search for a permanent Chief Marketing Officer is ongoing.  In February, Paul Kershisnik was named interim Chief Marketing Officer and is a candidate for the position.  Kershisnik, who joined Wendy’s in March 2007 as Senior Vice President of Marketing Strategy and Innovation, has responsibility for research and development, strategic insights, operations innovation, brand marketing, field marketing, media, diversity marketing and creative/advertising production.

Board approves 121st consecutive quarterly dividend
      The Board of Directors approved a quarterly dividend of 12.5 cents per share, payable May 19, 2008 to shareholders of record as of May 5, 2008.  The dividend payment will represent the Company’s 121st consecutive quarterly dividend.

Company will not hold its 2008 first-quarter conference call
      The previously announced first quarter conference call and webcast which was scheduled for Friday, April 25 has been cancelled as a result of today’s joint announcement by Wendy’s and Triarc Companies.

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 and most successful restaurant operating and franchising companies.  More information about the Company is available at www.wendys-invest.com.

INVESTOR CONTACTS:
John Barker (614) 764-3044 or john_barker@wendys.com
Marsha Gordon (614) 764-3019 or marsha_gordon@wendys.com
Kim Messner (614) 764-6796 or kim_messner@wendys.com

MEDIA CONTACT:
Denny Lynch: (614) 764-3553 or denny_lynch@wendys.com
Bob Bertini: (614) 764-3327 or bob_bertini@wendys.com

Appendix

1st Quarter Financial and Income Statement Information
     The Company’s first-quarter 2008 reported results from continuing operations include the impact of:

• Cost of sales – $319.8 million, or 62.3% of retail sales, in the first quarter of 2008, compared to $324.1 million, or 62.0% of retail sales, in the first quarter of 2007. The year-over-year difference is due primarily to a decline in sales, breakfast sales at lower margins and increased commodity costs, partially offset by labor efficiency and menu price increases.
• Company restaurant operating costs – $151.2 million, or 29.5% of sales, in the first quarter of 2008, compared to $152.4 million, or 29.1% of sales, in the first quarter of 2007.  The year-over-year difference as a percent of sales is due to lower sales. 
• Operating costs – $6.8 million in the first quarter of 2008, compared to $3.9 million in the first quarter of 2007.  The year-over-year increase is due primarily to incremental franchisee incentives of $1.3 million during the quarter and breakfast advertising costs to support franchisees of $1.0 million during the quarter.  Spending to support franchisee breakfast advertising began in the second half of 2007.  
• General and administrative expense – $53.2 million, or 9.1% of revenue, in the first quarter of 2008, compared to $50.8 million, or 8.6% of revenue, in the first quarter of 2007.  The year-over-year difference includes higher professional and legal fees of $1.8 million, higher salaries and benefits of $1.2 million, 2008 convention expenses of $0.6 million as well as other higher expenses.  Also, 2008 includes lower bonus accruals of $3.8 million.
• Restructuring costs – $0.2 million in the first quarter of 2008.  This compares to $1.0 million in restructuring costs in the first quarter of 2007.
• Special Committee related charges – $6.7 million in the first quarter of 2008 in expenses related to the Board’s Special Committee.  Wendy’s Chairman Jim Pickett announced the formation of the Special Committee on April 26, 2007.  The Company did not incur any Special Committee expense in the first quarter of 2007.
• Other income/expense – $1.5 million of expense in the first quarter of 2008, compared to $1.3 million of expense in the first quarter of 2007, including lower 2008 gains on asset dispositions of $0.5 million and lower 2008 store closure charges of $0.5 million.
• Interest – Interest expense of $9.1 million in the first quarter of 2008, compared to $12.2 million a year ago.  The year-over-year decrease reflects the pay down of the debt associated with the sale of approximately 40% of the 2007 U.S. royalty stream.  Interest income of $2.1 million in the first quarter of 2008, compared to $5.4 million a year ago, reflects lower cash balances as well as a decrease in interest rates.
• Taxes – The Company’s first-quarter tax rate was a higher-than-expected 40.5%.  This compares to 33.5% in the first quarter of 2007 which benefited from non recurring refund claims.
• Shares outstanding – A lower share count of 88.3 million average diluted shares in the first quarter of 2008, compared to 95.7 million average diluted shares in the first quarter of 2007.  The Company repurchased 9.0 million shares in an accelerated share repurchase in the first quarter of 2007.

First-Quarter Average Same-Store Sales Summary

Monthly Average Same-Store Sales Summary for January, February and March

Discontinued operations
      During the third quarter of 2007, the Company completed the sale of Cafe Express.  Accordingly, the after-tax operating results of Cafe Express appear in the “Discontinued Operations” line on the income statement.

Disclosure regarding non-GAAP financial measures
The Company uses adjusted income and adjusted EPS from continuing operations as internal measures of operating performance.  Management believes adjusted income and adjusted EPS from continuing operations provide a meaningful perspective of the underlying operating performance of the business.
EBITDA is used by management as a performance measure for benchmarking against its peers and competitors. The Company believes EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties to evaluate companies in the restaurant industry. EBITDA is not a recognized term under GAAP. 
The Company also uses adjusted EBITDA, which accounts for certain items unrelated to ongoing operations, as an internal measure of business operating performance.   Management believes adjusted EBITDA provides a meaningful perspective of the underlying operating performance of the business.
Company EBITDA margins from continuing operations consist of operating income plus depreciation and amortization divided by revenue. 
Company-operated restaurant EBITDA margins consist of sales from company-operated restaurants minus cost of sales from company-operated restaurants minus company restaurant operating costs divided by sales from company-operated restaurants.

EBITDA and Adjusted EBITDA Reconciliations

Income and EPS Reconciliations

(1) After tax amounts are computed using a tax rate of 38%.

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