<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended July 3, 1994
------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________ to ______________________
Commission File Number 1-8116
------
WENDY'S INTERNATIONAL, INC.
- - ---------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Ohio 31-0785108
- - --------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 256, 4288 West Dublin-Granville Road, Dublin, Ohio 43017-0256
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 614-764-3100
----------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. YES X NO .
----- -----
Indicate the number of shares outstanding in each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at August 5, 1994
- - ------------------------------------ -----------------------------
Common shares, $.10 stated value 101,241,000 shares
Exhibit index on page 13.
- 1 of 15 -
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
Pages
-----
PART I: Financial Information
Item 1. Financial Statements:
Consolidated Statement of Income for the quarters
and year-to-date periods ended
July 3, 1994 and July 4, 1993 3 - 4
Consolidated Balance Sheet as of July 3, 1994
and January 2, 1994 5 - 6
Consolidated Statement of Cash Flows for the
year-to-date periods ended July 3, 1994 and July 4, 1993 7
Notes to the Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9 - 10
PART II: Other Information
Item 1 10
Item 4 11
Item 6 11
Signature 12
Index to Exhibits 13
Exhibit 11 - Computation of Net Income Per Share 14 - 15
-2-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE DATA)
QUARTER ENDED QUARTER ENDED
JULY 3 JULY 4
1994 1993
------ ------
<S> <C> <C>
REVENUES
Retail sales . . . . . . . . . . . . . . . $326,425 $307,978
Royalties. . . . . . . . . . . . . . . . . 29,830 27,371
Other. . . . . . . . . . . . . . . . . . . 10,949 9,811
-------- --------
367,204 345,160
-------- --------
COSTS AND EXPENSES
Cost of sales. . . . . . . . . . . . . . . 187,408 181,507
Company restaurant operating
costs. . . . . . . . . . . . . . . . . . 84,319 79,315
General and administrative
expenses . . . . . . . . . . . . . . . . 23,346 21,922
Depreciation and amortization
of property and equipment. . . . . . . . 16,842 16,632
Interest, net. . . . . . . . . . . . . . . 3,183 3,045
-------- --------
315,098 302,421
-------- --------
INCOME BEFORE INCOME TAXES . . . . . . . . . 52,106 42,739
INCOME TAXES . . . . . . . . . . . . . . . . 18,758 15,387
-------- --------
NET INCOME . . . . . . . . . . . . . . . . . $ 33,348 $ 27,352
-------- --------
-------- --------
PRIMARY EARNINGS PER SHARE . . . . . . . . . $.32 $.27
---- ----
---- ----
FULLY DILUTED EARNINGS PER SHARE . . . . . . $.31 $.26
---- ----
---- ----
DIVIDENDS PER SHARE. . . . . . . . . . . . . $.06 $.06
---- ----
---- ----
PRIMARY SHARES . . . . . . . . . . . . . . . 104,499 102,531
-------- --------
-------- --------
FULLY DILUTED SHARES . . . . . . . . . . . . 112,629 112,601
-------- --------
-------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
-3-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE DATA)
YEAR-TO-DATE ENDED YEAR-TO-DATE ENDED
JULY 3 JULY 4
1994 1993
------ ------
<S> <C> <C>
REVENUES
Retail sales . . . . . . . . . . . . . . . $618,217 $594,132
Royalties. . . . . . . . . . . . . . . . . 54,351 50,273
Other. . . . . . . . . . . . . . . . . . . 14,426 11,126
-------- --------
686,994 655,531
-------- --------
COSTS AND EXPENSES
Cost of sales. . . . . . . . . . . . . . . 360,796 351,317
Company restaurant operating
costs. . . . . . . . . . . . . . . . . . 164,755 159,819
General and administrative
expenses . . . . . . . . . . . . . . . . 50,526 47,070
Depreciation and amortization
of property and equipment. . . . . . . . 33,499 33,017
Interest, net. . . . . . . . . . . . . . . 5,802 6,196
-------- --------
615,378 597,419
-------- --------
INCOME BEFORE INCOME taxes . . . . . . . . . 71,616 58,112
INCOME TAXES . . . . . . . . . . . . . . . . 25,782 20,921
-------- --------
NET INCOME . . . . . . . . . . . . . . . . . $ 45,834 $ 37,191
-------- --------
-------- --------
PRIMARY EARNINGS PER SHARE . . . . . . . . . $.44 $.36
---- ----
---- ----
FULLY DILUTED EARNINGS PER SHARE . . . . . . $.43 $.36
---- ----
---- ----
DIVIDENDS PER SHARE. . . . . . . . . . . . . $.12 $.12
---- ----
---- ----
PRIMARY SHARES . . . . . . . . . . . . . . . 104,520 102,398
-------- --------
-------- --------
FULLY DILUTED SHARES . . . . . . . . . . . . 112,650 110,677
-------- --------
-------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
-4-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(IN THOUSANDS)
JULY 3 JANUARY 2
1994 1994
----------- ---------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents. . . . . . . . . $ 93,937 $ 71,698
Short-term investments, at cost
which approximates market. . . . . . . . 32,713 40,647
Accounts receivable, net . . . . . . . . . 24,327 27,381
Notes receivable, net. . . . . . . . . . . 4,547 5,259
Deferred income taxes. . . . . . . . . . . 10,244 12,244
Inventories and other. . . . . . . . . . . 20,352 21,478
---------- ----------
186,120 178,707
---------- ----------
PROPERTY AND EQUIPMENT, AT COST
Land . . . . . . . . . . . . . . . . . . . 212,202 203,651
Buildings. . . . . . . . . . . . . . . . . 339,169 329,023
Leasehold improvements . . . . . . . . . . 184,821 182,519
Restaurant equipment . . . . . . . . . . . 315,886 289,242
Other equipment. . . . . . . . . . . . . . 50,198 65,197
Capital leases . . . . . . . . . . . . . . 66,237 64,148
---------- ----------
1,168,513 1,133,780
Accumulated depreciation
and amortization . . . . . . . . . . . . (442,433) (426,496)
---------- ----------
726,080 707,284
---------- ----------
COST IN EXCESS OF NET ASSETS
ACQUIRED, NET. . . . . . . . . . . . . . . 30,513 24,314
DEFERRED INCOME TAXES. . . . . . . . . . . . 14,636 15,250
OTHER ASSETS . . . . . . . . . . . . . . . . 78,018 70,931
---------- ----------
$1,035,367 $ 996,486
---------- ----------
---------- ----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
-5-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(IN THOUSANDS)
JULY 3 JANUARY 2
1994 1994
----------- ---------
(UNAUDITED)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts and drafts payable. . . . . . . . $ 55,173 $ 68,735
Accrued expenses:
Salaries and wages . . . . . . . . . . . 15,711 16,288
Taxes. . . . . . . . . . . . . . . . . . 16,186 14,935
Insurance. . . . . . . . . . . . . . . . 22,857 21,345
Other. . . . . . . . . . . . . . . . . . 14,585 11,160
Income taxes . . . . . . . . . . . . . . . 13,927 2,896
Deferred income taxes. . . . . . . . . . . 1,785 2,299
Current portion of long-term
obligations. . . . . . . . . . . . . . . 55,793 5,611
---------- ----------
196,017 143,269
---------- ----------
LONG-TERM OBLIGATIONS
Term debt. . . . . . . . . . . . . . . . . 106,598 156,741
Capital leases . . . . . . . . . . . . . . 44,888 43,892
---------- ----------
151,486 200,633
---------- ----------
DEFERRED INCOME TAXES. . . . . . . . . . . . 38,960 40,859
OTHER LONG-TERM LIABILITIES. . . . . . . . . 11,511 10,930
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock,
Authorized: 250,000 shares
Common stock, $.10 stated value
Authorized: 200,000,000 shares
Issued: 101,224,000 and
100,823,000 shares, respectively . . . . 10,122 10,082
Capital in excess of stated value. . . . . 165,173 161,238
Retained earnings. . . . . . . . . . . . . 464,565 430,866
Translation adjustments. . . . . . . . . . 271 1,347
Pension liability adjustment . . . . . . . (2,572) (2,572)
---------- ----------
637,559 600,961
---------- ----------
Treasury stock at cost: 29,000 shares. . . (166) (166)
---------- ----------
637,393 600,795
---------- ----------
$1,035,367 $ 996,486
---------- ----------
---------- ----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
-6-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
YEAR-TO-DATE ENDED YEAR-TO-DATE ENDED
JULY 3 JULY 4
1994 1993
------ ------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING
ACTIVITIES . . . . . . . . . . . . . . . . . . . . $ 85,413 $ 75,711
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from asset dispositions . . . . . . . . . 15,250 11,541
Capital expenditures . . . . . . . . . . . . . . . (63,764) (50,700)
Acquisition of franchises. . . . . . . . . . . . . (11,148) (8,532)
Investment in marketable securities. . . . . . . . (863) (10,384)
Proceeds from marketable securities. . . . . . . . 8,797 -
Other investing activities . . . . . . . . . . . . 457 (715)
-------- --------
Net cash used in investing activities. . . . . (51,271) (58,790)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock . . . . . . 2,870 2,075
Principal payments on long-term
obligations. . . . . . . . . . . . . . . . . . . (2,638) (2,626)
Dividends paid . . . . . . . . . . . . . . . . . . (12,135) (11,879)
-------- --------
Net cash used in financing activities. . . . . (11,903) (12,430)
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS. . . . . . . . 22,239 4,491
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD . . . . . . . . . . . . . . . . . . . . . . 71,698 77,412
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . $ 93,937 $ 81,903
-------- --------
-------- --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Interest paid. . . . . . . . . . . . . . . . . . . $ 9,524 $ 10,874
Interest received. . . . . . . . . . . . . . . . . 3,366 4,453
Income taxes paid. . . . . . . . . . . . . . . . . 12,958 13,494
Acquisition of franchises:
Fair value of assets acquired, net . . . . . . . . $ 15,586 $ 13,173
Cash paid. . . . . . . . . . . . . . . . . . . . . 11,148 8,532
-------- --------
Liabilities assumed. . . . . . . . . . . . . . $ 4,438 $ 4,641
-------- --------
-------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
-7-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. MANAGEMENT'S STATEMENT
In the opinion of management the accompanying unaudited financial
statements contain all adjustments (all of which are normal and recurring
in nature) necessary to present fairly the financial position of Wendy's
International, Inc. and Subsidiaries (the company) at July 3, 1994, and
January 2, 1994 and the results of operations for the quarters and year-to-
date periods ended July 3, 1994 and July 4, 1993 and cash flows for the
year-to-date periods ended July 3, 1994 and July 4, 1993. The Notes to the
Consolidated Financial Statements which are contained in the 1993 Form 10-K
should be read in conjunction with these Consolidated Financial Statements.
NOTE 2. ACQUISITIONS AND DISPOSITIONS
In both the first quarter of 1994 and 1993, one restaurant was franchised
for a net pretax gain of $25,000 and $400,000, respectively. During the
second quarter of 1994 and 1993, the company franchised 23 restaurants for
a net pretax gain of $6,700,000 and 61 restaurants for a net pretax gain of
$5,000,000, respectively.
During the first quarter of 1993, the company acquired 27 restaurants in
the Ft. Lauderdale, Florida market and three restaurants in the Milwaukee,
Wisconsin market for approximately $8,500,000. During the second quarter
of 1994, the company acquired 30 restaurants, 29 of which where in the
Kansas City market for approximately $11,000,000.
-8-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The company recorded net income of $33.3 million for the second quarter ended
July 3, 1994, while $27.4 million was reported for the second quarter ended
July 4, 1993. Net income for the year-to-date period was $45.8 million for 1994
compared with $37.2 million for 1993.
RETAIL SALES
Domestic retail sales increased 6.2% for the second quarter of 1994 compared to
the second quarter of 1993. This was primarily a result of a 5.2% increase in
average domestic net sales. Year-to-date domestic retail sales increased $22.3
million in 1994 compared with 1993 reflecting a 3.6% increase in average
domestic net sales. Selling prices remained constant throughout the first half
of 1994.
The company believes its value strategy, such as Combo Meals, Kids' Meals, and
Super Value Menu, along with solid restaurant operations and effective marketing
campaigns, have contributed to sales increases.
Average net sales per domestic Wendy's restaurant for the quarters and year-to-
date periods ended July 3, 1994 and July 4, 1993 were as follows:
<TABLE>
<CAPTION>
Second Quarter % Year-to-date %
1994 1993 Increase 1994 1993 Increase
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Company. . . . . . . . $261,150 $248,250 5.2 $498,450 $480,950 3.6
Franchise. . . . . . . 256,200 245,050 4.6 484,200 470,350 2.9
Total Domestic . . . . 257,650 246,050 4.7 488,450 473,650 3.1
</TABLE>
The number of systemwide Wendy's restaurants open as of July 3, 1994 and July 4,
1993 was as follows:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Company. . . . . . . . . . . 1,250 1,197
Franchise. . . . . . . . . . 3,014 2,846
----- -----
Total Wendy's. . . . . . . . 4,264 4,043
----- -----
----- -----
</TABLE>
COST OF SALES AND RESTAURANT OPERATING COSTS
The company restaurant operating profit margin increased in the second quarter
1994 to 16.8% versus 15.3% for 1993. The restaurant operating margin increased
to 15.0% for the year-to-date 1994 period from 14.0% in 1993. The increase
reflected an improvement in domestic cost of sales related to lower beef,
chicken and produce prices. In addition, margins reflected the leveraging
benefit of higher average sales and continued efficiency improvements at the
restaurant level. Restaurant operating costs were substantially the same, as a
percent of retail sales, in both the second quarter and year-to-date periods.
ROYALTIES
Royalties before reserve provisions increased $3.2 million in the second quarter
1994 compared with 1993. This was primarily a result of increases in franchise
domestic average net sales of 4.6% over the second quarter of 1993 and an
increase of 173 average domestic restaurants open. Royalties before reserve
provisions increased $5.4 million for the year-to-date period of 1994 with
franchise domestic average net sales up 2.9% and 181 more average domestic
restaurants open. Reserves provided were $1.9 million for the first half of
1994 and $.6 million for the first half of 1993. The increase reflects
provisions for potential international franchise situations in 1994 and reserve
reductions in 1993 as a result of favorable developments for certain domestic
franchises.
-9-
<PAGE>
OTHER REVENUES
Other revenues increased $1.1 million over the second quarter of 1993. This was
primarily a result of increased gains related to franchising restaurants of $1.7
million. For the year-to-date periods other revenue increased $3.3 million
reflecting increased gains on franchising restaurants of $1.4 million and
reserves provisions in 1993 of $1.2 million related to surplus property held for
disposition and potential casualty losses.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the second quarter of 1994 increased
$1.4 million over 1993 and increased $3.5 million over the year-to-date period
of 1993. This primarily reflects increases in salaries and benefits of $1.4
million for the quarter and $3.4 million for the year-to-date periods. This was
a result of annual employee merit and performance pay increases and minimal
increases in staffing of overhead personnel throughout 1993 and the first half
of 1994 to support new restaurant development planned for 1994 and beyond.
FINANCIAL CONDITION
The company's financial condition remains solid at the end of the second quarter
of 1994. The debt to equity and debt to total capitalization ratios were 24%
and 19%, respectively, at July 3, 1994. These compare to a debt to equity ratio
and debt to total capitalization ratio of 33% and 25%, respectively, at fiscal
year-end 1993. The decline in these ratios reflects the transfer of long-term
debt to current liabilities as $50 million of 12 1/8% Notes is payable April 1,
1995. Capital expenditures amounted to $63.8 million for 1994 compared to $50.7
million for 1993. Cash generated from operating activities in the first half of
1994 exceeded capital expenditures and dividend payments.
OUTLOOK
The company continues to employ its strategies as outlined in the company's 1993
Annual Report. As was expected, competition in the quick-service restaurant
industry has remained intense. Emphasis continues to be on solid restaurant
operations, new products, effective marketing, new restaurant development, and
the overall financial health of the entire system. The company anticipates that
as many as 350 new restaurants will be opened or under construction systemwide
(both company and franchise) during 1994. During the first half of 1994, the
company and its franchisees opened 124 new restaurants with another 67 under
construction. Cash flow from operations, cash and investments on hand, and
possible asset sales should adequately provide for projected cash requirements.
-10-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
PART II: OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Annual Meeting of the company's shareholders was held on May 2, 1994.
(b) The following table sets forth the name of each director elected at the
meeting and the number of votes for or withheld from each director.
<TABLE>
<CAPTION>
Director For Withheld
-------- --- --------
<S> <C> <C>
Fielden B. Nutter, Sr. 87,153,909 689,191
James W. Near 87,193,634 649,467
James V. Pickett 87,191,886 651,215
Thomas F. Keller 87,184,000 659,100
</TABLE>
The following directors did not stand for reelection at the meeting (the year in
which each directors term expires is indicated in parenthesis): R. David Thomas
(1995), John K. Casey (1995), Ernest S. Hayeck (1995), Arthur I. Vorys (1996),
Thekla R. Shackelford (1996), Ronald E. Musick (1996), W. Clay Hamner (1996),
Gordon F. Teter (1996).
(c) The following table sets forth a brief description of each other matter
voted on at the Annual Meeting and the number of votes cast of, against or
abstaining from each matter.
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C> <C>
Approve Coopers & Lybrand as
auditors of the company 86,618,706 409,626 814,759
Approve amendments to the 1978
Stock Option Plan 84,631,086 2,020,131 1,191,865
Approve amendments to the 1982
Stock Option Plan 84,472,258 2,113,288 1,257,541
Approve amendments to the 1984
Stock Option Plan 84,370,912 2,207,023 1,265,153
Approve amendments to the 1987
Stock Option Plan 84,384,249 2,194,772 1,263,068
Approve amendments to the 1990
Stock Option Plan 79,184,255 7,349,789 1,309,039
Approve performance goals of the
Senior Executive Earnings
Maximization Plan 81,180,101 5,435,709 1,227,272
</TABLE>
There were no broker nonvotes (as described by the Securities and Exchange
Commission) in connection with any of the matters set forth in this Item 4.
Item 6. Exhibits and Reports on Form 8-K.
(a) Index to Exhibits on Page 13.
(b) No report on Form 8-K was filed during the quarter ended July 3, 1994.
-11-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WENDY'S INTERNATIONAL, INC.
---------------------------
(Registrant)
Date: 8/12/94 /s/ John K. Casey
----------------------- -----------------------
John K. Casey
Vice Chairman and Chief
Financial Officer
-12-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit
Number Description Page No.
- - ------- ----------- --------
11 Computation of Net 14 - 15
Income Per Share.
-13-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
EXHIBIT 11
COMPUTATION OF NET INCOME PER COMMON SHARE
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE DATA)
QUARTER ENDED QUARTER ENDED
JULY 3 JULY 4
1993 1993
------ ------
<S> <C> <C>
Weighted average number
of common shares outstanding . . . . . . . . . . . . 101,157 99,098
Add net shares issuable pursuant
to employee stock option plans
less shares assumed repurchased
at the average market price. . . . . . . . . . . . 3,342 3,433
------- -------
Number of shares for computation of
primary earnings per share . . . . . . . . . . . . . 104,499 102,531
Add net additional shares issuable
pursuant to employee stock option plans at
period-end market price. . . . . . . . . . . . . . 216
Add additional shares issuable
assuming conversion of
subordinated debentures. . . . . . . . . . . . . . 8,130 9,854
------- -------
Number of shares for computation of
fully diluted earnings per share . . . . . . . . . . 112,629 112,601
------- -------
------- -------
Net income . . . . . . . . . . . . . . . . . . . . . . $33,348 $ 27,352
Less requirements of preferred stock of
subsidiary . . . . . . . . . . . . . . . . . . . . 8
------- -------
Net income for computation of primary
earnings per share . . . . . . . . . . . . . . . . . 33,348 27,344
Add savings on assumed dilutive conversion
of subordinated debentures net of tax. . . . . . . 1,136 1,465
------- -------
Net income for computation of fully diluted
earnings per share . . . . . . . . . . . . . . . . . $34,484 $28,809
------- -------
------- -------
Net income per share:
Assuming primary dilution. . . . . . . . . . . . . . $.32 $.27
---- ----
---- ----
Assuming full dilution . . . . . . . . . . . . . . . $.31 $.26
---- ----
---- ----
</TABLE>
-14-
<PAGE>
WENDY'S INTERNATIONAL, INC. AND SUBSIDIARIES
EXHIBIT 11
COMPUTATION OF NET INCOME PER COMMON SHARE
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE DATA)
YEAR-TO-DATE ENDED YEAR-TO-DATE ENDED
ENDED ENDED
JULY 3 JULY 4
1994 1993
------ ------
<S> <C> <C>
Weighted average number
of common shares outstanding . . . . . . . . . . . . 101,049 99,017
Add net shares issuable pursuant
to employee stock option plans
less shares assumed repurchased
at the average market price . . . . . . . . . . . 3,471 3,381
------- -------
Number of shares for computation of
primary earnings per share . . . . . . . . . . . . . 104,520 102,398
Add net additional shares issuable
pursuant to employee stock option plans at
period-end market price. . . . . . . . . . . . . . 149
Add additional shares issuable
assuming conversion of
subordinated debentures. . . . . . . . . . . . . . 8,130 8,130
------- -------
Number of shares for computation of
fully diluted earnings per share . . . . . . . . . . 112,650 110,677
Add additional shares issuable
assuming conversion of
subordinated debentures. . . . . . . . . . . . . . 1,724 (a)
------- -------
Number of shares for computation of
fully diluted earnings per share (a) . . . . . . . . 112,650 112,401
------- -------
------- -------
Net income . . . . . . . . . . . . . . . . . . . . . . $ 45,834 $ 37,191
Less requirements of preferred stock of
subsidiary . . . . . . . . . . . . . . . . . . . . 23
------- -------
Net income for computation of primary
earnings per share . . . . . . . . . . . . . . . . . 45,834 37,168
Add savings on assumed dilutive conversion
of subordinated debentures net of tax. . . . . . . 2,272 2,234
------- -------
Net income for computation of fully diluted
earnings per share . . . . . . . . . . . . . . . . . 48,106 39,402
Additional savings on assumed conversion
of subordinated debentures (a) . . . . . . . . . . 695 (a)
------- -------
Net income for computation of fully diluted
earnings per share (a) . . . . . . . . . . . . . . . $48,106 $40,097
------- -------
------- -------
Net income per share:
Assuming primary dilution. . . . . . . . . . . . . . $.44 $.36
---- ----
---- ----
Assuming full dilution . . . . . . . . . . . . . . . $.43 $.36
---- ----
---- ----
<FN>
(a) THIS CALCULATION IS SUBMITTED IN ACCORDANCE WITH REGULATION S-K ITEM
601(b)(11) ALTHOUGH IT IS CONTRARY TO PARAGRAPH 40 OF APB OPINION NO. 15 BECAUSE
IT PRODUCES AN ANTI-DILUTIVE RESULT.
</TABLE>
-15-
