The Wendy’s Company

John Min Appointed Chief Legal Officer and Secretary 
Mary Greenlee Named Senior Vice President, U.S. Operations

DUBLIN, Ohio — The Wendy’s Company (Nasdaq: WEN) (“Wendy’s” or the “Company”) announced today the appointment of John Min as the Company’s Chief Legal Officer and Secretary and Mary Greenlee as Senior Vice President, U.S. Operations, effective today. These appointments represent the continued evolution of the Company’s leadership structure to drive accountability and accelerate growth. Min will report to President and Chief Executive Officer, Kirk Tanner, and Greenlee will report to President, U.S., Abigail Pringle. Min succeeds E.J. Wunsch, who was appointed as Wendy’s President, International in June 2024.

“I’m pleased to welcome John and Mary to the Wendy’s team,” said Tanner. “John’s proven track record of managing complex commercial transactions, his extensive background in legal strategy and corporate governance and his unique global experience will be invaluable as we look to further solidify our development plans. Mary brings significant experience managing franchise relationships, generating significant market expansion and driving innovation from her career in the QSR industry, which align perfectly with our growth pillars. I look forward to John and Mary’s substantial contributions to our team.”

Min most recently served as Senior Vice President, Chief Legal Officer and Secretary of Kellanova following the separation of Kellogg Company into two companies. He brings two decades of corporate legal experience and a wealth of expertise in leading high-performing teams, providing strategic legal counsel and managing compliance risks in diverse markets. Min will oversee Wendy’s global legal department, playing a pivotal role in guiding Wendy’s legal strategy and operations, as well as managing global risk and compliance functions. Prior to the separation of Kellogg, Min worked for 13 years at Kellogg, where, among other roles he served as General Counsel in Europe and General Counsel of the Asia Pacific, Middle East, and Africa region. Previously, Min practiced law at the law firms of Jenner & Block LLP and Jones Day. He holds a law degree from the University of Chicago Law School and a B.A. in Economics from the University of Chicago.

Greenlee has over 25 years of experience in the restaurant and beverage industries, bringing a deep understanding of franchise systems and strategic thinking to elevate performance. Greenlee will oversee the performance of Wendy’s company and franchise operations to support the brand’s strategic growth initiatives, including continuing to drive the restaurant economic model and building out the Company’s U.S. footprint to ensure it reaches its full growth potential. Greenlee has held significant operational roles over her career, most recently serving as Vice President of U.S. Field Operations at Subway and Director of Business Development and General Manager of Coca-Cola Freestyle Strategy for Wendy’s. Greenlee holds a B.A. in History from the University of Louisiana Monroe.

“This is an exciting opportunity to join an iconic brand,” said Min. “I am honored to join such a talented team and contribute my experience to uphold and enhance Wendy’s high standards of legal and ethical practices to support the Company’s continued growth on a global scale.”

“Wendy’s has consistently set a standard for quality and creativity in the QSR industry, and I’ve long admired the brand’s commitment to value and innovation,” said Greenlee. “I look forward to working closely with the team to drive strategic growth, enhance operations and continue delivering an exceptional customer experience.”

Forward Looking Statements
This press release contains certain statements that are not historical facts, including statements regarding the Company’s growth pillars, development growth plans and driving the restaurant economic model. Those statements, as well as statements preceded by, followed by or that include the words “will,” “may,” “believes,” “intends,” “plans,” “expects,” “anticipates,” or similar expressions constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). The forward-looking statements are based on the Company’s expectations at the time, speak only as of the dates they are made and are susceptible to a number of risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement. These factors include, but are not limited to, the factors identified in the “Special Note Regarding Forward-Looking Statements and Projections” and “Risk Factors” sections of our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and in our other filings with the Securities and Exchange Commission. For all forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act.

Plus, Wendy’s launches new Sausage Breakfast Burrito, available at participating locations

DUBLIN, Ohio

WHAT:
Wendy’s^® is doubling down on better breakfast with unmatched value and quality on the go.

The Company continues to make advancements toward delivering high-quality food responsibly, creating more equitable and inclusive workplaces and reducing emissions across Company operations and franchise restaurants

DUBLIN, Ohio — The Wendy’s Company released its 2023 Corporate Responsibility report today, highlighting continued progress against Good Done Right, the Company’s corporate responsibility strategy. In the report, Wendy’s® details progress the Company has made across initiatives focused on responsible sourcing, fostering equitable workplaces and communities, and reducing greenhouse gas (GHG) emissions from restaurant operations and the supply chain. In 2023, Wendy’s also strengthened stakeholder collaboration – a key ingredient to advancements across its Food, People and Footprint pillars – particularly with franchisees and direct and indirect suppliers.

“Our Good Done Right strategy is backed by action— from sourcing our quality ingredients responsibly to engaging and making a positive difference in our communities,” said Chief Corporate Affairs & Sustainability Officer, Liliana Esposito. “We are deliberate about gaining greater visibility into our supply chain, making measurable progress against our goals and transparently sharing the results of our efforts – all possible thanks to the commitment and collaboration of our employees, franchisees and industry partners.”

Wendy’s 2023 Corporate Responsibility report demonstrates progress against the Company’s Good Done Right goals and includes the following highlights.

Food – Delivering high-quality food responsibly and transparently:

• Evaluated 26 of our suppliers with whom we directly do business under Wendy’s Animal Care Standards Program for animal welfare best practices. We also extended the program deeper into our protein supply chain, driving greater visibility into an extended supply chain that includes more than 20,000 farms, ranches and facilities.
• Invited 100% of suppliers in scope for our responsible sourcing program to enroll in our self-assessment platform, which helps the Company better understand and track supplier performance on key environmental, social and governance metrics.
• Aligned with the U.S. Roundtable for Responsible Beef’s retail sector targets for air and GHG emissions, conservation of natural resources and more.
• Completed more than 12,000 global Food Safety Assessments at Wendy’s restaurants in partnership with EcoSure®, a division of Ecolab®.

People – Fostering more equitable workplaces and communities:

• Increased the diversity of representation among senior leadership at the Company and received recognition in the U.S. and Canada for industry-leading franchisee support and training as the Wendy’s System continues to grow across the globe.
• Raised more than $27 million for the Dave Thomas Foundation for Adoption®, including record support during the annual Frosty® Boo! Books® campaign, which raised an unprecedented $9.2 million across the Wendy’s System.
• Supported Company employees by hosting more than 40 Employee Resource Group events and implementing a new Human Capital Management System to enable greater automation and self-service, while also simplifying business processes.

Footprint – Delivering more with less environmental impact:

• Decreased Company GHG emissions (Scope 1 and 2) by 26%, and franchisee emissions by 11% per restaurant (Scope 3) – both compared to 2019 levels.
• More than doubled the number of franchisees reporting through Wendy’s Energy Challenge, with 37 franchisees reporting energy data* in 2023, up from 18 franchisees reporting data* in 2022. More than 2,700 franchise-operated restaurants are participating in WEC as of the end of 2023.
• Initiated a deforestation risk assessment to prepare for measuring and managing forestry, land and agriculture (FLAG) related emissions.

Wendy’s recognizes leading reporting industry standards, including the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) and United Nations Sustainable Development Goals (SDGs) and strives to embed their principles and frameworks throughout the Company’s report.

For more information on Wendy’s corporate responsibility work, please visit https://www.wendys.com/whatwevalue.

DUBLIN, Ohio — The Wendy’s Company (Nasdaq: WEN) today reported unaudited results for the fourth quarter and full year ended December 31, 2023.

“The Wendy’s® system delivered strong sales, profit, and cash flow growth in 2023, all supported by progress on our strategic growth pillars,” President and Chief Executive Officer Kirk Tanner said. “2023 marked the brand’s 13th consecutive year of global same-restaurant sales growth, highlighting the system’s consistent execution and strong franchisee alignment as the team continued to grow the beloved Wendy’s brand. The team also significantly accelerated digital sales, opened nearly 250 new restaurants across the globe, and expanded U.S. Company-operated restaurant margin to pre-COVID levels despite extreme inflationary headwinds in recent years.

“I am excited to begin this next chapter for Wendy’s with new plans and investments to accelerate our global growth, deliver significant restaurant margin expansion, and drive long-term shareholder value. I am looking forward to working with the team to deliver on the significant opportunities ahead.”

Fourth Quarter Financial Highlights

Total Revenues

The increase in revenues resulted primarily from an increase in advertising funds revenue and an increase in franchise royalty revenue, both primarily driven by higher same-restaurant sales. These increases were partially offset by lower franchise rental income primarily driven by fewer lease assignments.

U.S. Company-Operated Restaurant Margin

The decrease in U.S. Company-operated restaurant margin was primarily the result of higher commodity costs, customer count declines, and higher labor costs. These were partially offset by a higher average check.

General and Administrative Expense

The decrease in general and administrative expense was primarily driven by a decrease in employee compensation and benefits.

Operating Profit

The increase in operating profit resulted primarily from higher franchise royalty revenue, a decrease in the Company’s incremental investment in breakfast advertising, and lower general and administrative expense. These were partially offset by a decrease in U.S. Company-operated restaurant margin and higher amortization of cloud computing arrangement costs.

Net Income

The increase in net income resulted primarily from a gain on early extinguishment of debt related to the repurchase of securitized debt in the fourth quarter of 2023 and an increase in operating profit.

Adjusted EBITDA

The increase in adjusted EBITDA resulted primarily from higher franchise royalty revenue, a decrease in the Company’s incremental investment in breakfast advertising, and lower general and administrative expense. These were partially offset by a decrease in U.S. Company-operated restaurant margin and higher franchise support and other costs primarily resulting from increased information technology and digital services provided to franchisees.

Adjusted Earnings Per Share

The decrease in adjusted earnings per share was driven by higher amortization of cloud computing arrangement costs and a higher tax rate. These were partially offset by an increase in adjusted EBITDA.

Full Year Financial Highlights

Total Revenues

The increase in revenues resulted primarily from higher sales at Company-operated restaurants, an increase in franchise royalty revenue, and an increase in advertising funds revenue. These increases were primarily driven by higher same-restaurant sales.

U.S. Company-Operated Restaurant Margin

The increase in U.S. Company-operated restaurant margin was primarily the result of a higher average check. This increase was partially offset by higher labor costs, higher commodity costs, and customer count declines.

General and Administrative Expense

The decrease in general and administrative expense was primarily driven by a decrease in employee compensation and benefits, a decrease in stock compensation, and lower professional fees resulting primarily from the completion of the Company’s ERP implementation. These were partially offset by a higher incentive compensation accrual.

Operating Profit

The increase in operating profit resulted primarily from higher franchise royalty revenue, a decrease in the Company’s incremental investment in breakfast advertising, an increase in U.S. Company-operated restaurant margin, and lower general and administrative expense. These were partially offset by higher amortization of cloud computing arrangement costs and lower other operating income primarily due to lapping a gain from insurance recoveries in the prior year.

Net Income

The increase in net income resulted primarily from an increase in operating profit and higher other income primarily driven by an increase in interest income. These increases were partially offset by a decrease in investment income.

Adjusted EBITDA

The increase in adjusted EBITDA resulted primarily from higher franchise royalty revenue, a decrease in the Company’s incremental investment in breakfast advertising, and an increase in U.S. Company-operated restaurant margin. These were partially offset by lower other operating income primarily due to lapping a gain from insurance recoveries in the prior year.

Adjusted Earnings Per Share

The increase in adjusted earnings per share was driven by an increase in adjusted EBITDA and higher interest income. These increases were partially offset by a decrease in investment income and higher amortization of cloud computing arrangement costs.

Free Cash Flow

The increase in free cash flow resulted primarily from higher net income adjusted for non-cash expenses and a decrease in payments for incentive compensation.

Company Declares Quarterly Dividend
The Company announced today the declaration of its regular quarterly cash dividend of 25 cents per share. The dividend is payable on March 15, 2024, to shareholders of record as of March 1, 2024. The number of common shares outstanding as of February 8, 2024 was approximately 205.5 million.

Share Repurchases
The Company repurchased 2.4 million shares for $45.7 million in the fourth quarter of 2023. The Company has not repurchased any shares in the first quarter of 2024 as of the date of this release. As of February 15, approximately $310.0 million remains available under the Company’s existing share repurchase authorization that expires in February 2027.

Company Announces Investments to Drive Accelerated Global Growth
The Company announced today investments that are expected to accelerate global growth, deliver significant restaurant margin expansion, and drive long-term shareholder value. The Company plans to invest:

• Approximately $55 million in incremental breakfast advertising in the U.S. and Canada split evenly over the next two years;
• Approximately $15 million, primarily in 2024, to support digital growth through mobile app enhancements and a step change in personalized marketing capabilities;
• Approximately $30 million to support a rollout of digital menu boards to all U.S. Company-operated restaurants by the end of 2025 and digital menu board enhancements for the global system over the next two years.

2024 Outlook
This release includes forward-looking projections for certain non-GAAP financial measures, including systemwide sales, adjusted EBITDA, adjusted earnings per share and free cash flow. The Company excludes certain expenses and benefits from adjusted EBITDA, adjusted earnings per share and free cash flow, such as the impact from our advertising funds, including the net change in the restricted operating assets and liabilities and any excess or deficit of advertising fund revenues over advertising fund expenses, impairment of long-lived assets, reorganization and realignment costs, system optimization gains, net, amortization of cloud computing arrangements, gain on early extinguishment of debt, net, and the timing and resolution of certain tax matters. Due to the uncertainty and variability of the nature and amount of those expenses and benefits, the Company is unable without unreasonable effort to provide projections of net income, earnings per share or net cash provided by operating activities, or a reconciliation of those projected measures.

During 2024 the Company Expects:

• Global systemwide sales growth: 5 to 6 percent
• Adjusted EBITDA: $535 to $545 million
• Adjusted earnings per share: $0.98 to $1.02
• Cash flows from operations: $370 to $390 million
• Capital expenditures: $90 to $100 million
• Free cash flow: $280 to $290 million

Conference Call and Webcast Scheduled for 8:30 a.m. Today, February 15
The Company will host a conference call on Thursday, February 15 at 8:30 a.m. ET, with a simultaneous webcast from the Company’s Investor Relations website at www.irwendys.com. The related presentation materials will also be available on the Company’s Investor Relations website. The live conference call will be available by telephone at (844) 200-6205 for domestic callers and (929) 526-1599 for international callers, both using event ID 796998. An archived webcast and presentation materials will be available on the Company’s Investor Relations website.

Forward-Looking Statements
This release contains certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Generally, forward-looking statements include the words “may,” “believes,” “plans,” “expects,” “anticipates,” “intends,” “estimate,” “goal,” “upcoming,” “outlook,” “guidance” or the negation thereof, or similar expressions. In addition, all statements that address future operating, financial or business performance, strategies or initiatives, future efficiencies or savings, anticipated costs or charges, future capitalization, anticipated impacts of recent or pending investments or transactions and statements expressing general views about future results or brand health are forward-looking statements within the meaning of the Reform Act. Forward-looking statements are based on the Company’s expectations at the time such statements are made, speak only as of the dates they are made and are susceptible to a number of risks, uncertainties and other factors. For all such forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. The Company’s actual results, performance and achievements may differ materially from any future results, performance or achievements expressed or implied by the Company’s forward-looking statements.

Many important factors could affect the Company’s future results and cause those results to differ materially from those expressed in or implied by the Company’s forward-looking statements. Such factors include, but are not limited to, the following: (1) the impact of competition or poor customer experiences at Wendy’s restaurants; (2) adverse economic conditions or disruptions, including in regions with a high concentration of Wendy’s restaurants; (3) changes in discretionary consumer spending and consumer tastes and preferences; (4) the disruption to the Company’s business from COVID-19 and its impact on the Company’s results of operations, financial condition and prospects; (5) impacts to the Company’s corporate reputation or the value and perception of the Company’s brand; (6) the effectiveness of the Company’s marketing and advertising programs and new product development; (7) the Company’s ability to manage the impact of social media; (8) the Company’s ability to protect its intellectual property; (9) food safety events or health concerns involving the Company’s products; (10) our ability to deliver accelerated global sales growth and achieve or maintain market share across our dayparts; (11) the Company’s ability to achieve its growth strategy through new restaurant development and its Image Activation program; (12) the Company’s ability to effectively manage the acquisition and disposition of restaurants or successfully implement other strategic initiatives; (13) risks associated with leasing and owning significant amounts of real estate, including environmental matters; (14) risks associated with the Company’s international operations, including the ability to execute its international growth strategy; (15) changes in commodity and other operating costs; (16) shortages or interruptions in the supply or distribution of the Company’s products and other risks associated with the Company’s independent supply chain purchasing co-op; (17) the impact of increased labor costs or labor shortages; (18) the continued succession and retention of key personnel and the effectiveness of the Company’s leadership and organizational structure; (19) risks associated with the Company’s digital commerce strategy, platforms and technologies, including its ability to adapt to changes in industry trends and consumer preferences; (20) the Company’s dependence on computer systems and information technology, including risks associated with the failure or interruption of its systems or technology or the occurrence of cyber incidents or deficiencies; (21) risks associated with the Company’s securitized financing facility and other debt agreements, including compliance with operational and financial covenants, restrictions on its ability to raise additional capital, the impact of its overall debt levels and the Company’s ability to generate sufficient cash flow to meet its debt service obligations and operate its business; (22) risks associated with the Company’s capital allocation policy, including the amount and timing of equity and debt repurchases and dividend payments; (23) risks associated with complaints and litigation, compliance with legal and regulatory requirements and an increased focus on environmental, social and governance issues; (24) risks associated with the availability and cost of insurance, changes in accounting standards, the recognition of impairment or other charges, changes in tax rates or tax laws and fluctuations in foreign currency exchange rates; (25) conditions beyond the Company’s control, such as adverse weather conditions, natural disasters, hostilities, social unrest, health epidemics or pandemics or other catastrophic events; and (26) other risks and uncertainties cited in the Company’s releases, public statements and/or filings with the Securities and Exchange Commission, including those identified in the “Risk Factors” sections of the Company’s Forms 10-K and 10-Q.

In addition to the factors described above, there are risks associated with the Company’s predominantly franchised business model that could impact its results, performance and achievements. Such risks include the Company’s ability to identify, attract and retain experienced and qualified franchisees, the Company’s ability to effectively manage the transfer of restaurants between and among franchisees, the business and financial health of franchisees, the ability of franchisees to meet their royalty, advertising, development, reimaging and other commitments, participation by franchisees in brand strategies and the fact that franchisees are independent third parties that own, operate and are responsible for overseeing the operations of their restaurants. The Company’s predominantly franchised business model may also impact the ability of the Wendy’s system to effectively respond and adapt to market changes.

All future written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and uncertainties arise from time to time, and factors that the Company currently deems immaterial may become material, and it is impossible for the Company to predict these events or how they may affect the Company.

The Company assumes no obligation to update any forward-looking statements after the date of this release as a result of new information, future events or developments, except as required by federal securities laws, although the Company may do so from time to time. The Company does not endorse any projections regarding future performance that may be made by third parties.

There can be no assurance that any additional regular quarterly cash dividends will be declared or paid after the date hereof, or of the amount or timing of such dividends, if any. Future dividend payments, if any, are subject to applicable law, will be made at the discretion of the Board of Directors and will be based on factors such as the Company’s earnings, financial condition and cash requirements and other factors.

Disclosure Regarding Non-GAAP Financial Measures
In addition to the financial measures presented in this release in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company has included certain non-GAAP financial measures in this release, including adjusted revenue, adjusted EBITDA, adjusted earnings per share, free cash flow and systemwide sales.

The Company uses adjusted revenue, adjusted EBITDA, adjusted earnings per share and systemwide sales as internal measures of business operating performance and as performance measures for benchmarking against the Company’s peers and competitors. Adjusted EBITDA and systemwide sales are also used by the Company in establishing performance goals for purposes of executive compensation. The Company believes its presentation of adjusted revenue, adjusted EBITDA, adjusted earnings per share and systemwide sales provides a meaningful perspective of the underlying operating performance of our current business and enables investors to better understand and evaluate our historical and prospective operating performance. The Company believes these non-GAAP financial measures are important supplemental measures of operating performance because they eliminate items that vary from period to period without correlation to our core operating performance and highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. Due to the nature and/or size of the items being excluded, such items do not reflect future gains, losses, expenses or benefits and are not indicative of our future operating performance. The Company believes investors, analysts and other interested parties use adjusted revenue, adjusted EBITDA, adjusted earnings per share and systemwide sales in evaluating issuers, and the presentation of these measures facilitates a comparative assessment of the Company’s operating performance in addition to the Company’s performance based on GAAP results.

This release also includes disclosure regarding the Company’s free cash flow. Free cash flow is a non-GAAP financial measure that is used by the Company as an internal measure of liquidity. Free cash flow is also used by the Company in establishing performance goals for purposes of executive compensation. The Company defines free cash flow as cash flows from operations minus (i) capital expenditures and (ii) the net change in the restricted operating assets and liabilities of the advertising funds and any excess/deficit of advertising funds revenue over advertising funds expense included in net income, as reported under GAAP. The impact of our advertising funds is excluded because the funds are used solely for advertising and are not available for the Company’s working capital needs. The Company may also make additional adjustments for certain non-recurring or unusual items to the extent identified in the reconciliation tables that accompany this release. The Company believes free cash flow is an important liquidity measure for investors and other interested persons because it communicates how much cash flow is available for working capital needs or to be used for repurchasing shares, paying dividends, repaying or refinancing debt, financing possible acquisitions or investments or other uses of cash.

Adjusted revenue, adjusted EBITDA, adjusted earnings per share, free cash flow and systemwide sales are not recognized terms under GAAP, and the Company’s presentation of these non-GAAP financial measures does not replace the presentation of the Company’s financial results in accordance with GAAP. Because all companies do not calculate adjusted revenue, adjusted EBITDA, adjusted earnings per share, free cash flow and systemwide sales (and similarly titled financial measures) in the same way, those measures as used by other companies may not be consistent with the way the Company calculates such measures. The non-GAAP financial measures included in this release should not be construed as substitutes for or better indicators of the Company’s performance than the most directly comparable GAAP financial measures. See the reconciliation tables that accompany this release for additional information regarding certain of the non-GAAP financial measures included herein.

Key Business Measures
The Company tracks its results of operations and manages its business using certain key business measures, including same-restaurant sales, systemwide sales and Company-operated restaurant margin, which are measures commonly used in the quick-service restaurant industry that are important to understanding Company performance.

Same-restaurant sales and systemwide sales each include sales by both Company-operated and franchise restaurants. The Company reports same-restaurant sales for new restaurants after they have been open for 15 continuous months and for reimaged restaurants as soon as they reopen. Restaurants temporarily closed for more than one fiscal week are excluded from same-restaurant sales.

Franchise restaurant sales are reported by our franchisees and represent their revenues from sales at franchised Wendy’s restaurants. Sales by franchise restaurants are not recorded as Company revenues and are not included in the Company’s consolidated financial statements. However, the Company’s royalty revenues are computed as percentages of sales made by Wendy’s franchisees and, as a result, sales by franchisees have a direct effect on the Company’s royalty revenues and profitability.

Same-restaurant sales and systemwide sales exclude sales from Argentina due to the highly inflationary economy of that country.

The Company calculates same-restaurant sales and systemwide sales growth on a constant currency basis. Constant currency results exclude the impact of foreign currency translation and are derived by translating current year results at prior year average exchange rates. The Company believes excluding the impact of foreign currency translation provides better year over year comparability.

U.S. Company-operated restaurant margin is defined as sales from U.S. Company-operated restaurants less cost of sales divided by sales from U.S. Company-operated restaurants. Cost of sales includes food and paper, restaurant labor and occupancy, advertising and other operating costs. Cost of sales excludes certain costs that support restaurant operations that are not allocated to individual restaurants, which are included in “General and administrative.” Cost of sales also excludes depreciation and amortization expense and impairment of long-lived assets. Therefore, as restaurant margin as presented excludes certain costs as described above, its usefulness may be limited and may not be comparable to other similarly titled measures of other companies in our industry.

CLEVELAND — In a strategic move to enhance local advertising efforts and engage with modern consumers, Tiger Pistol, the most advanced local social media advertising platform, and The Wendy’s Company are thrilled to announce the expansion of their partnership to include TikTok advertising.

SEE THE SCALE, PERFORMANCE, AND VERSATILITY OF THE TIGER PISTOL PLATFORM. 

“Wendy’s values Tiger Pistol as an essential partner in our mission to empower our local markets with top-tier advertising solutions,” said Kristin Tormey, Global Director, Social Media & Digital Engagement at The Wendy’s Company. “Having already achieved remarkable success together in running Facebook and Instagram ads across our extensive network of over 6,000 restaurants, we aim to continue our industry leadership by facilitating the creation of high-quality, brand approved TikTok ads for our franchisees. Tiger Pistol has been instrumental in developing the necessary technology to bring this vision to life. Together, we are setting significant milestones and continue to lead the industry forward.”

Working together, Tiger Pistol is helping Wendy’s franchise restaurants engage with their local communities through vertical video to capture higher levels of engagement from their target audiences. This format minimizes distractions and provides a visually appealing experience, maximizing each ad’s impact. Additionally, shorter video ads are easier for consumers to digest quickly and share with others. According to Capterra’s TikTok Marketing Survey, over half of small retailers and restaurants marketing themselves on TikTok have found immense value in the platform, with 78% realizing a positive return on investment with TikTok ads.

“TikTok’s explosive growth continues unabated, making it an essential addition to Tiger Pistol’s advertising ecosystem,” said Paul Elliott, CEO, Tiger Pistol. “Our collaboration reflects Wendy’s dedication to aligning with contemporary consumer preferences and its commitment to delivering top-tier advertising solutions to its franchisees.”

Tiger Pistol links brands to franchise locations using an easy-to-use, but powerful advertising platform. This platform harnesses the influence of social advertising to attract new customers. Franchise owners or their agency partners can select from a variety of brand-created ads designed to meet their specific business objectives, whether it’s recruiting, increasing foot traffic, or promoting special deals.

For franchise owners and agencies managing multiple locations, Tiger Pistol’s campaign editor simplifies the process by consolidating all campaigns into one efficient workflow. This streamlines the creation of multiple campaigns, even those with complex funding structures. With just a single click, a user can allocate funds for individual store-level campaigns or make collective payments across numerous store locations.

Learn more about how Tiger Pistol removes the complexity of social media advertising at scale to enable companies to easily find and engage with local customers. Visit tigerpistol.com.

Jayhawks can now enjoy their Wendy’s favorites in the heart of KU campus

LAWRENCE, Kan. — Amid cheers and a sea of blue and crimson, Wendy’s franchise organization Legacy Restaurant Group proudly inaugurated its new restaurant, located inside the University of Kansas Memorial Union. Yesterday marked the official opening, complete with a ribbon-cutting ceremony attended by university officials, students, and KU student athletes.

The ceremony, attended by university officials and partners included David Girod (University of Kansas Chancellor), David Hayob (Executive Director of Jayhawk Community Partners), Marc Tuttle (Vice President and General Manager of Learfield and Jayhawk Sports Properties) and J.J. O’Toole-Curran (Interim Executive Director of KU Memorial Union).

Hayob emphasized Wendy’s positive impact on student life and the strategic importance of bringing key business partners like Wendy’s to campus for an enhanced student experience. In a similar vein, Tuttle highlighted Legacy Restaurant Group’s longtime partnership, proudly serving as the Official Hamburger of Kansas Athletics. He also touched upon the ongoing collaboration with student athletes through NIL, further strengthening the partnership.

“We’re thrilled to continue to champion the KU experience, and we welcome the opportunity to make Wendy’s a beloved spot for all current and future students on campus,” says Felix Tollinche, President & CEO of Legacy Restaurant Group. “Through our ongoing partnership with KU and student athletes, we’re excited to continue to bring the Wendy’s family and Jayhawk family together – we know it’s family over everything.”

Open Monday through Saturday, 10 a.m. to 8 p.m., Wendy’s invites hungry Jayhawks to savor Wendy’s favorites, including the iconic Baconator^®, the official hamburger of Kansas Athletics. Whether students are craving a quick bite between classes or a casual meal with friends, Wendy’s at KU Memorial Union is the new hot spot.

*Fresh beef available in the contiguous U.S., Alaska and Canada.

Kirk Tanner to Succeed Todd Penegor as President & CEO

Company Reaffirms Previously Provided FY 2023 Outlook and Plans to Release Q4 2023 Results and 2024 and Long-Term Outlook February 15

DUBLIN, Ohio — The Wendy’s Company (Nasdaq: WEN) today announced that its Board of Directors has appointed Kirk Tanner as Wendy’s President and CEO, effective February 5, 2024. Mr. Tanner will succeed Todd Penegor, who will depart from the Company and Board in February after serving in senior leadership positions at Wendy’s for more than a decade. Mr. Tanner has also been elected to serve on the Wendy’s Board of Directors.

Mr. Tanner most recently served as Chief Executive Officer of North American Beverages at PepsiCo, Inc., and joins Wendy’s with more than 30 years of experience across beverages, snacks and foodservice. At PepsiCo, he oversaw the $26+ billion business unit, which accounts for approximately 30% of PepsiCo’s overall business, driving operational performance and revenue growth, the incubation and launch of new products and the entrance into new markets over the course of his tenure. Prior to his most recent role, Mr. Tanner oversaw PepsiCo’s Global Foodservice division, during which time he expanded the Company’s presence in foodservice through strategic partnerships, new product lines and significant deals with major sports leagues and restaurant chains.

“We are thrilled to welcome an executive of Kirk’s caliber to the Wendy’s team,” said Nelson Peltz, Chairman of the Wendy’s Board. “Kirk is a proven operational leader whose customer-centric mindset and broad experience positioning and growing some of the most well-known global brands make him the ideal candidate to lead Wendy’s into its next phase of growth and expansion.”

“I am honored to have the opportunity to lead this iconic brand at such a pivotal time in the industry,” said Mr. Tanner. “I am energized by the future potential and expansion opportunities for the business. I look forward to working with the talented Wendy’s team and franchisees to drive future growth and success.”

Mr. Peltz continued, “On behalf of the Board, I would like to thank Todd for his tremendous contributions to Wendy’s over the years. Through his leadership, Wendy’s has driven strong growth in sales, earnings and new restaurant counts, forging an industry-leading partnership with the franchise community and a robust digital business. We wish him nothing but the best in his next chapter.”

“I am grateful to the Wendy’s team for their dedication and am immensely proud of all we have achieved together,” said Mr. Penegor. “I’m confident the Company is in highly capable hands with Kirk at the helm. My Wendy’s roots run deep, and while the time is right for me to move on as an executive of this great organization, I will forever be a supporter as a loyal customer.”

Wendy’s Reaffirms Previously Provided FY 2023 Outlook
Wendy’s continues to expect its full year 2023 results to fall within the outlook ranges provided in its third quarter earnings release issued on November 2, 2023. The Company will release its fourth quarter and full year 2023 results and share its 2024 and long-term financial outlook on February 15, 2024.

Forward-Looking Statements
This release contains certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Generally, forward-looking statements include the words “may,” “believes,” “plans,” “expects,” “anticipates,” “intends,” “estimate,” “goal,” “upcoming,” “outlook,” “guidance” or the negation thereof, or similar expressions. In addition, all statements that address future operating, financial or business performance, strategies or initiatives, future efficiencies or savings, anticipated costs or charges, future capitalization, anticipated impacts of recent or pending investments or transactions and statements expressing general views about future results or brand health are forward-looking statements within the meaning of the Reform Act. Forward-looking statements are based on the Company’s expectations at the time such statements are made, speak only as of the dates they are made and are susceptible to a number of risks, uncertainties and other factors. For all such forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. The Company’s actual results, performance and achievements may differ materially from any future results, performance or achievements expressed or implied by the Company’s forward-looking statements.

Many important factors could affect the Company’s future results and cause those results to differ materially from those expressed in or implied by the Company’s forward-looking statements. Such factors include, but are not limited to, the following: (1) the impact of competition or poor customer experiences at Wendy’s restaurants; (2) adverse economic conditions or disruptions, including in regions with a high concentration of Wendy’s restaurants; (3) changes in discretionary consumer spending and consumer tastes and preferences; (4) the disruption to the Company’s business from the COVID-19 pandemic and the impact of the pandemic on the Company’s results of operations, financial condition and prospects; (5) impacts to the Company’s corporate reputation or the value and perception of the Company’s brand; (6) the effectiveness of the Company’s marketing and advertising programs and new product development; (7) the Company’s ability to manage the accelerated impact of social media; (8) the Company’s ability to protect its intellectual property; (9) food safety events or health concerns involving the Company’s products; (10) our ability to deliver accelerated global sales growth and achieve or maintain market share across our dayparts; (11) the Company’s ability to achieve its growth strategy through new restaurant development and its Image Activation program; (12) the Company’s ability to effectively manage the acquisition and disposition of restaurants or successfully implement other strategic initiatives; (13) risks associated with leasing and owning significant amounts of real estate, including environmental matters; (14) risks associated with the Company’s international operations, including the ability to execute its international growth strategy; (15) changes in commodity and other operating costs; (16) shortages or interruptions in the supply or distribution of the Company’s products and other risks associated with the Company’s independent supply chain purchasing co-op; (17) the impact of increased labor costs or labor shortages; (18) the continued succession and retention of key personnel and the effectiveness of the Company’s leadership and organizational structure; (19) risks associated with the Company’s digital commerce strategy, platforms and technologies, including its ability to adapt to changes in industry trends and consumer preferences; (20) the Company’s dependence on computer systems and information technology, including risks associated with the failure or interruption of its systems or technology or the occurrence of cyber incidents or deficiencies; (21) risks associated with the Company’s securitized financing facility and other debt agreements, including compliance with operational and financial covenants, restrictions on its ability to raise additional capital, the impact of its overall debt levels and the Company’s ability to generate sufficient cash flow to meet its debt service obligations and operate its business; (22) risks associated with the Company’s capital allocation policy, including the amount and timing of equity and debt repurchases and dividend payments; (23) risks associated with complaints and litigation, compliance with legal and regulatory requirements and an increased focus on environmental, social and governance issues; (24) risks associated with the availability and cost of insurance, changes in accounting standards, the recognition of impairment or other charges, changes in tax rates or tax laws and fluctuations in foreign currency exchange rates; (25) conditions beyond the Company’s control, such as adverse weather conditions, natural disasters, hostilities, social unrest, health epidemics or pandemics or other catastrophic events; (26) risks associated with the Company’s organizational redesign; and (27) other risks and uncertainties cited in the Company’s releases, public statements and/or filings with the Securities and Exchange Commission, including those identified in the “Risk Factors” sections of the Company’s Forms 10-K and 10-Q.

In addition to the factors described above, there are risks associated with the Company’s predominantly franchised business model that could impact its results, performance and achievements. Such risks include the Company’s ability to identify, attract and retain experienced and qualified franchisees, the Company’s ability to effectively manage the transfer of restaurants between and among franchisees, the business and financial health of franchisees, the ability of franchisees to meet their royalty, advertising, development, reimaging and other commitments, participation by franchisees in brand strategies and the fact that franchisees are independent third parties that own, operate and are responsible for overseeing the operations of their restaurants. The Company’s predominantly franchised business model may also impact the ability of the Wendy’s system to effectively respond and adapt to market changes.

All future written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and uncertainties arise from time to time, and factors that the Company currently deems immaterial may become material, and it is impossible for the Company to predict these events or how they may affect the Company.

The Company assumes no obligation to update any forward-looking statements after the date of this release as a result of new information, future events or developments, except as required by federal securities laws, although the Company may do so from time to time. The Company does not endorse any projections regarding future performance that may be made by third parties.

DUBLIN, Ohio — The Wendy’s Company (Nasdaq: WEN) today reported unaudited results for the third quarter ended October 1, 2023.

“We continued to make meaningful progress across our strategic growth pillars during the third quarter,” President and Chief Executive Officer Todd Penegor said. “Global same-restaurant sales accelerated on a 2-year basis and digital sales grew 30% versus the prior year, driving another quarter of Company-operated restaurant margin expansion. Additionally, we have now opened 152 new restaurants across the globe this year and further solidified our development pipeline through significant new agreements in key growth markets. This success drives best in class franchisee satisfaction and alignment. We remain relentlessly focused on delivering meaningful global growth, supported by compelling restaurant economic model improvement and acceleration across our strategic pillars.”

Third Quarter Financial Highlights

Total Revenues
The increase in revenues resulted primarily from higher sales at Company-operated restaurants, an increase in franchise royalty revenue, and an increase in advertising funds revenue. These increases were primarily driven by higher same-restaurant sales.

U.S. Company-Operated Restaurant Margin
The increase in U.S. Company-operated restaurant margin was primarily the result of a higher average check. This increase was partially offset by customer count declines, higher labor costs, and higher commodity costs.

General and Administrative Expense
The decrease in general and administrative expense was primarily driven by lower professional fees resulting primarily from the completion of the Company’s ERP implementation.

Operating Profit
The increase in operating profit resulted primarily from higher franchise royalty revenue, a decrease in the Company’s incremental investment in breakfast advertising, lower general and administrative expense, and an increase in U.S. Company-operated restaurant margin. These were partially offset by lower other operating income due to lapping a gain from insurance recoveries in the prior year and higher amortization of cloud computing arrangement costs.

Net Income
The increase in net income resulted primarily from higher other income primarily driven by an increase in interest income and an increase in operating profit.

Adjusted EBITDA
The increase in adjusted EBITDA resulted primarily from higher franchise royalty revenue, lower general and administrative expense, a decrease in the Company’s incremental investment in breakfast advertising, and an increase in U.S. Company-operated restaurant margin. These were partially offset by lower other operating income due to lapping a significant gain from insurance recoveries in the prior year.

Adjusted Earnings Per Share
The increase in adjusted earnings per share was driven by an increase in adjusted EBITDA and higher interest income. These increases were partially offset by higher amortization of cloud computing arrangement costs.

Year to Date Free Cash Flow
The increase in free cash flow resulted primarily from higher net income adjusted for non-cash expenses and a decrease in payments for incentive compensation. These were partially offset by higher capital expenditures.

Company Declares Quarterly Dividend
The Company announced today the declaration of its regular quarterly cash dividend of 25 cents per share. The dividend is payable on December 15, 2023, to shareholders of record as of December 1, 2023. The number of common shares outstanding as of October 26, 2023 was approximately 206.3 million.

Share Repurchases
The Company repurchased 2.7 million shares for $56.1 million in the third quarter of 2023. In the fourth quarter of 2023, the Company has repurchased 1.2 million shares for $23.6 million through October 26. As of October 26, approximately $332.1 million remains available under the Company’s existing share repurchase authorization that expires in February 2027.

2023 Outlook and Long-Term Outlook for 2024-2025
This release includes forward-looking projections for certain non-GAAP financial measures, including systemwide sales, adjusted EBITDA, adjusted earnings per share and free cash flow. The Company excludes certain expenses and benefits from adjusted EBITDA, adjusted earnings per share and free cash flow, such as the impact from our advertising funds, including the net change in the restricted operating assets and liabilities and any excess or deficit of advertising fund revenues over advertising fund expenses, impairment of long-lived assets, reorganization and realignment costs, system optimization gains, net, amortization of cloud computing arrangements, loss on early extinguishment of debt and the timing and resolution of certain tax matters. Due to the uncertainty and variability of the nature and amount of those expenses and benefits, the Company is unable without unreasonable effort to provide projections of net income, earnings per share or net cash provided by operating activities, or a reconciliation of those projected measures.

During 2023 the Company Now Expects:

• Global systemwide sales growth: 6 to 7 percent
• Cash flows from operations: $345 to $360 million
• Capital expenditures: $80 to $85 million

In Addition, the Company Continues to Expect:

• Adjusted EBITDA: $530 to $540 million
• Adjusted earnings per share: $0.95 to $1.00
• Free cash flow: $265 to $275 million

Company Maintains Long-Term Outlook for 2024-2025:

• Systemwide sales growth: Mid-Single Digits
• Free cash flow growth: High-Single to Low-Double Digits

Conference Call and Webcast Scheduled for 8:30 a.m. Today, November 2
The Company will host a conference call on Thursday, November 2 at 8:30 a.m. ET, with a simultaneous webcast from the Company’s Investor Relations website at www.irwendys.com. The related presentation materials will also be available on the Company’s Investor Relations website. The live conference call will be available by telephone at (844) 200-6205 for domestic callers and (929) 526-1599 for international callers, both using event ID 804841. An archived webcast and presentation materials will be available on the Company’s Investor Relations website.

Forward-Looking Statements
This release contains certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”).  Generally, forward-looking statements include the words “may,” “believes,” “plans,” “expects,” “anticipates,” “intends,” “estimate,” “goal,” “upcoming,” “outlook,” “guidance” or the negation thereof, or similar expressions.  In addition, all statements that address future operating, financial or business performance, strategies or initiatives, future efficiencies or savings, anticipated costs or charges, future capitalization, anticipated impacts of recent or pending investments or transactions and statements expressing general views about future results or brand health are forward-looking statements within the meaning of the Reform Act.  Forward-looking statements are based on the Company’s expectations at the time such statements are made, speak only as of the dates they are made and are susceptible to a number of risks, uncertainties and other factors.  For all such forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act.  The Company’s actual results, performance and achievements may differ materially from any future results, performance or achievements expressed or implied by the Company’s forward-looking statements.

Many important factors could affect the Company’s future results and cause those results to differ materially from those expressed in or implied by the Company’s forward-looking statements.  Such factors include, but are not limited to, the following: (1) the impact of competition or poor customer experiences at Wendy’s restaurants; (2) adverse economic conditions or disruptions, including in regions with a high concentration of Wendy’s restaurants; (3) changes in discretionary consumer spending and consumer tastes and preferences; (4) the disruption to the Company’s business from the COVID-19 pandemic and the impact of the pandemic on the Company’s results of operations, financial condition and prospects; (5) impacts to the Company’s corporate reputation or the value and perception of the Company’s brand; (6) the effectiveness of the Company’s marketing and advertising programs and new product development; (7) the Company’s ability to manage the accelerated impact of social media; (8) the Company’s ability to protect its intellectual property; (9) food safety events or health concerns involving the Company’s products; (10) our ability to deliver accelerated global sales growth and achieve or maintain market share across our dayparts; (11) the Company’s ability to achieve its growth strategy through new restaurant development and its Image Activation program; (12) the Company’s ability to effectively manage the acquisition and disposition of restaurants or successfully implement other strategic initiatives; (13) risks associated with leasing and owning significant amounts of real estate, including environmental matters; (14) risks associated with the Company’s international operations, including the ability to execute its international growth strategy; (15) changes in commodity and other operating costs; (16) shortages or interruptions in the supply or distribution of the Company’s products and other risks associated with the Company’s independent supply chain purchasing co-op; (17) the impact of increased labor costs or labor shortages; (18) the continued succession and retention of key personnel and the effectiveness of the Company’s leadership and organizational structure; (19) risks associated with the Company’s digital commerce strategy, platforms and technologies, including its ability to adapt to changes in industry trends and consumer preferences; (20) the Company’s dependence on computer systems and information technology, including risks associated with the failure or interruption of its systems or technology or the occurrence of cyber incidents or deficiencies; (21) risks associated with the Company’s securitized financing facility and other debt agreements, including compliance with operational and financial covenants, restrictions on its ability to raise additional capital, the impact of its overall debt levels and the Company’s ability to generate sufficient cash flow to meet its debt service obligations and operate its business; (22) risks associated with the Company’s capital allocation policy, including the amount and timing of equity and debt repurchases and dividend payments; (23) risks associated with complaints and litigation, compliance with legal and regulatory requirements and an increased focus on environmental, social and governance issues; (24) risks associated with the availability and cost of insurance, changes in accounting standards, the recognition of impairment or other charges, changes in tax rates or tax laws and fluctuations in foreign currency exchange rates; (25) conditions beyond the Company’s control, such as adverse weather conditions, natural disasters, hostilities, social unrest, health epidemics or pandemics or other catastrophic events; (26) risks associated with the Company’s organizational redesign; and (27) other risks and uncertainties cited in the Company’s releases, public statements and/or filings with the Securities and Exchange Commission, including those identified in the “Risk Factors” sections of the Company’s Forms 10-K and 10-Q.

In addition to the factors described above, there are risks associated with the Company’s predominantly franchised business model that could impact its results, performance and achievements. Such risks include the Company’s ability to identify, attract and retain experienced and qualified franchisees, the Company’s ability to effectively manage the transfer of restaurants between and among franchisees, the business and financial health of franchisees, the ability of franchisees to meet their royalty, advertising, development, reimaging and other commitments, participation by franchisees in brand strategies and the fact that franchisees are independent third parties that own, operate and are responsible for overseeing the operations of their restaurants.  The Company’s predominantly franchised business model may also impact the ability of the Wendy’s system to effectively respond and adapt to market changes.

All future written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and uncertainties arise from time to time, and factors that the Company currently deems immaterial may become material, and it is impossible for the Company to predict these events or how they may affect the Company.

The Company assumes no obligation to update any forward-looking statements after the date of this release as a result of new information, future events or developments, except as required by federal securities laws, although the Company may do so from time to time. The Company does not endorse any projections regarding future performance that may be made by third parties.

There can be no assurance that any additional regular quarterly cash dividends will be declared or paid after the date hereof, or of the amount or timing of such dividends, if any.  Future dividend payments, if any, are subject to applicable law, will be made at the discretion of the Board of Directors and will be based on factors such as the Company’s earnings, financial condition and cash requirements and other factors.

Disclosure Regarding Non-GAAP Financial Measures
In addition to the financial measures presented in this release in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company has included certain non-GAAP financial measures in this release, including adjusted revenue, adjusted EBITDA, adjusted earnings per share, free cash flow and systemwide sales.

The Company uses adjusted revenue, adjusted EBITDA, adjusted earnings per share and systemwide sales as internal measures of business operating performance and as performance measures for benchmarking against the Company’s peers and competitors.  Adjusted EBITDA and systemwide sales are also used by the Company in establishing performance goals for purposes of executive compensation.  The Company believes its presentation of adjusted revenue, adjusted EBITDA, adjusted earnings per share and systemwide sales provides a meaningful perspective of the underlying operating performance of our current business and enables investors to better understand and evaluate our historical and prospective operating performance.  The Company believes these non-GAAP financial measures are important supplemental measures of operating performance because they eliminate items that vary from period to period without correlation to our core operating performance and highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures.  Due to the nature and/or size of the items being excluded, such items do not reflect future gains, losses, expenses or benefits and are not indicative of our future operating performance.  The Company believes investors, analysts and other interested parties use adjusted revenue, adjusted EBITDA, adjusted earnings per share and systemwide sales in evaluating issuers, and the presentation of these measures facilitates a comparative assessment of the Company’s operating performance in addition to the Company’s performance based on GAAP results.

This release also includes disclosure regarding the Company’s free cash flow.  Free cash flow is a non-GAAP financial measure that is used by the Company as an internal measure of liquidity.  Free cash flow is also used by the Company in establishing performance goals for purposes of executive compensation.  The Company defines free cash flow as cash flows from operations minus (i) capital expenditures and (ii) the net change in the restricted operating assets and liabilities of the advertising funds and any excess/deficit of advertising funds revenue over advertising funds expense included in net income, as reported under GAAP.  The impact of our advertising funds is excluded because the funds are used solely for advertising and are not available for the Company’s working capital needs. The Company may also make additional adjustments for certain non-recurring or unusual items to the extent identified in the reconciliation tables that accompany this release. The Company believes free cash flow is an important liquidity measure for investors and other interested persons because it communicates how much cash flow is available for working capital needs or to be used for repurchasing shares, paying dividends, repaying or refinancing debt, financing possible acquisitions or investments or other uses of cash.

Adjusted revenue, adjusted EBITDA, adjusted earnings per share, free cash flow and systemwide sales are not recognized terms under GAAP, and the Company’s presentation of these non-GAAP financial measures does not replace the presentation of the Company’s financial results in accordance with GAAP.  Because all companies do not calculate adjusted revenue, adjusted EBITDA, adjusted earnings per share, free cash flow and systemwide sales (and similarly titled financial measures) in the same way, those measures as used by other companies may not be consistent with the way the Company calculates such measures.  The non-GAAP financial measures included in this release should not be construed as substitutes for or better indicators of the Company’s performance than the most directly comparable GAAP financial measures.  See the reconciliation tables that accompany this release for additional information regarding certain of the non-GAAP financial measures included herein.

Key Business Measures
The Company tracks its results of operations and manages its business using certain key business measures, including same-restaurant sales, systemwide sales and Company-operated restaurant margin, which are measures commonly used in the quick-service restaurant industry that are important to understanding Company performance.

Same-restaurant sales and systemwide sales each include sales by both Company-operated and franchise restaurants. The Company reports same-restaurant sales for new restaurants after they have been open for 15 continuous months and for reimaged restaurants as soon as they reopen. Restaurants temporarily closed for more than one fiscal week are excluded from same-restaurant sales.

Franchise restaurant sales are reported by our franchisees and represent their revenues from sales at franchised Wendy’s restaurants. Sales by franchise restaurants are not recorded as Company revenues and are not included in the Company’s consolidated financial statements. However, the Company’s royalty revenues are computed as percentages of sales made by Wendy’s franchisees and, as a result, sales by franchisees have a direct effect on the Company’s royalty revenues and profitability.

Same-restaurant sales and systemwide sales exclude sales from Argentina due to the highly inflationary economy of that country.

The Company calculates same-restaurant sales and systemwide sales growth on a constant currency basis. Constant currency results exclude the impact of foreign currency translation and are derived by translating current year results at prior year average exchange rates. The Company believes excluding the impact of foreign currency translation provides better year over year comparability.

U.S. Company-operated restaurant margin is defined as sales from U.S. Company-operated restaurants less cost of sales divided by sales from U.S. Company-operated restaurants. Cost of sales includes food and paper, restaurant labor and occupancy, advertising and other operating costs. Cost of sales excludes certain costs that support restaurant operations that are not allocated to individual restaurants, which are included in “General and administrative.” Cost of sales also excludes depreciation and amortization expense and impairment of long-lived assets. Therefore, as restaurant margin as presented excludes certain costs as described above, its usefulness may be limited and may not be comparable to other similarly titled measures of other companies in our industry.