SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 28, 1998
TRIARC COMPANIES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-2207 38-0471180
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
280 Park Avenue
New York, New York 10017
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 451-3000
---------------------------------------------
(Former Name or Former Address, if
Changed Since Last Report)
Item 5. Other Events.
On July 28, 1998, the Registrant issued a press release with respect to
its results of operations for the fiscal quarter ended June 28, 1998. In
addition, the Registrant announced that its Board of Directors authorized an
increase in the Registrant's share repurchase program bringing the total
availability under the share repurchase program to $50 million. A copy of the
press release is being filed herewith as an exhibit hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 Press release dated July 28, 1998
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 hereunto duly authorized.
TRIARC COMPANIES, INC.
By: BRIAN L. SCHORR
Date: August 6, 1998 Brian L. Schorr
Executive Vice President
and General Counsel
Exhibit Index
Exhibit
No. Description Page No.
- -------- -------------- --------
99.1 Press release dated July 28, 1998 4
Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT: ANNE A. TARBELL
(212) 451-3030
TRIARC REPORTS STRONG SECOND QUARTER RESULTS
- NEAR 10% SNAPPLE VOLUME IMPROVEMENT FUELS EPS FROM CONSUMER
PRODUCTS BUSINESSES OF $0.20
- BOARD INCREASES CASH AVAILABLE FOR SHARE REPURCHASES TO $50 MILLION
NEW YORK, NY, JULY 28, 1998 -- Triarc Companies, Inc. (NYSE: TRY) today
reported second quarter net income, excluding non-recurring charges and credits,
of $5.2 million or $0.16 per share, compared with the 1997 second quarter net
loss of $(7.4) million or $(0.25) per share. Net income from consumer products
businesses (i.e. beverages and restaurants) was $6.6 million, or $0.20 per
share, compared with the 1997 second quarter net loss of $(6.6) million or
$(0.22) per share. Earnings before interest, taxes, other non-operating items,
depreciation and amortization (EBITDA) from wholly-owned ongoing operations for
the 1998 quarter was $31.7 million versus EBITDA before non-recurring charges
and credits (adjusted EBITDA) of $12.9 million in the 1997 second quarter.
Revenues from wholly-owned ongoing operations of $232.9 million were 30% above
the $178.8 million in the 1997 quarter. Per share amounts are presented on a
diluted basis.
Commenting on 1998 second quarter results, Nelson Peltz, Chairman and
Chief Executive Officer of Triarc said: "We're very pleased with our operating
results all-around. Led by a near 10% volume increase at Snapple, Triarc's
premium beverages posted volume gains which we will build on as our peak summer
season continues. Snapple's teas and diet drinks, which account for over 50% of
its volume, showed particular strength in the second quarter as did
WhipperSnapple, our newly introduced proprietary smoothie-like beverage. The
Triarc Restaurant Group's results were equally impressive: same store sales were
up 3% year-to-date, new store openings continued at a pace commensurate with our
1998 goals of 150 new Arby's and 250 new T.J. Cinnamons, and Arby's development
pipeline grew to over 800 new units. Looking ahead, we are enthusiastic about
our ability to grow our consumer products businesses for the benefit of our
shareholders."
Peter W. May, President and Chief Operating Officer of Triarc, noted:
"While Triarc's most recent results are strong and our outlook is positive, our
stock price performance has been disappointing. During the second quarter, we
continued to repurchase stock and since our share repurchase program was
announced last fall, we have repurchased, at an average price of $25.50,
approximately 1.3 million shares or nearly 4% of our shares outstanding. Earlier
this week, our Board of Directors authorized an increase in Triarc's share
repurchase program bringing the total cash now available for share repurchases
to $50 million. This will allow us to continue to repurchase Triarc shares going
forward, as market conditions warrant."
SEGMENT RESULTS
TRIARC BEVERAGE GROUP
Premium Beverages
Triarc's premium beverage operations, comprised of Snapple Beverages,
Mistic Brands and Stewart's, reported EBITDA of $19.6 million for the 1998
second quarter on revenues of $177.7 million compared to adjusted EBITDA of $1.4
million on revenues of $97.0 million for the comparable period in 1997. Results
for the 1997 quarter do not include the full quarter results for Snapple,
acquired on May 22, 1997, or the results for Stewart's, acquired on November 25,
1997.
In the second quarter of 1998, Snapple's volume increased nearly 10%
over its volume for the full second quarter of 1997. This increase was led by
strength in teas and diet drinks, as well as WhipperSnapple, which was launched
in April. Over one million cases of WhipperSnapple have been sold, reflecting an
excellent initial reception for this product from both consumers and
distributors. Mistic's volume was down versus a year ago, reflecting no major
new product launches in the first half of 1998 as well as some weakness in the
juice category, which accounts for approximately 70% of total Mistic volume.
Stewart's volume increased over 20% reflecting increased focus from Triarc's
distribution network.
In the second half of 1998 and early 1999, new packaging and product
introductions are planned for Mistic, which will expand the brand into new and
growing categories. WhipperSnapple production is also expected to double as the
peak summer season continues.
Royal Crown
Triarc's carbonated soft drink concentrate company, Royal Crown,
reported EBITDA for the 1998 second quarter of $5.0 million on revenues of $36.0
million, compared to adjusted EBITDA of $7.7 million on revenues of $43.4
million for the comparable period in 1997.
In April 1998, Royal Crown began rolling out new graphics and
advertising geared towards RC's traditionally strong heartland market. These
initiatives are aimed at improving RC sales both domestically, where the
business environment remains competitive, and internationally, where RC
volume continues to grow 20% year-to-date. The RC private label business
remains strong and stable. In addition, in the second quarter, Royal Crown
introduced a reformulated Diet RC cola, the first product in the U.S. contain-
ing Sucralose and initial results are very good. With new graphics,
advertising and products now firmly in place, the outlook for Royal Crown is
encouraging.
TRIARC RESTAURANT GROUP ("TRG")
TRG reported EBITDA for the 1998 second quarter of $10.7 million on
revenues of $19.2 million compared to adjusted EBITDA of $7.7 million on
revenues of $38.4 million for the comparable period in 1997. Results were
favorably impacted year-to-date by a system-wide comparative store sales
increase of 3.0% and the continuing strong pace of openings of Arby's stores and
T.J. Cinnamon's, with its gourmet cinnamon rolls and premium coffee concept, in
existing Arby's stores.
Triarc indicated that periods are not comparable as results for the 1997
period reflect the impact of company-owned Arby's restaurants operations which
were sold on May 5, 1997. Subsequent to such sale, TRG is solely focused on
growth by franchising new Arby's restaurants as well as increasing individual
store sales by offering complementary product lines such as T. J. Cinnamon's
to the system.
During the second quarter of 1998, franchisees added 24 new restaurants
to the Arby's system. TRG expects that 150 new restaurants will be opened by its
franchisees during 1998. TRG further reported that its Arby's franchisees had
added T.J. Cinnamon's to an additional 80 Arby's restaurants in second quarter
1998, bringing the total open to 284. TRG anticipates approximately 400 T. J.
Cinnamon's will be open by year end 1998.
TRG also changed the name of its pasta brand to Pasta Connection during
the second quarter of 1998 to more clearly communicate the essence of the brand.
In addition, the menu and equipment packages were refined for franchisees to
improve the overall economics. Pasta Connection added two new test markets --
New Milford, CT and Tri Cities, TN -- to its Cincinnati, OH and Chattanooga, TN
markets. There are plans for additional expansion into new test markets as well
as further expansion in existing test markets.
OPERATING RESULTS
Below is a comparison of revenues and EBITDA from wholly owned ongoing
operations, for the second quarter and first six months of 1998 and 1997.
Comparability between both the three month and six month periods is not
meaningful as results for the 1997 periods include the results of company-owned
Arby's restaurants through May 5, 1997, the date on which they were sold,
include Snapple's operations only from May 22, 1997, the date such operations
were acquired and, for the 1998 periods, include Stewart's operations, acquired
on November 25, 1997.
Fiscal Second Quarter
------------------------------------------------
1997 1998
-------------------- ----------------------
Adjusted
Revenues EBITDA Revenues EBITDA
-------- -------- -------- ------
(In millions)
Premium beverage $ 97.0 $ 1.4 $177.7 $19.6
Royal Crown 43.4 7.7 36.0 5.0
------- ------- ------- ------
Total Beverage Group 140.4 9.1 213.7 24.6
Restaurant Group 38.4 7.7 19.2 10.7
-------- ------- ------- ------
Total $178.8 16.8 $232.9 35.3
====== ======
Unallocated corporate (3.9) (3.6)
------- -------
Total Consumer Businesses $12.9 $31.7
===== =====
Fiscal Six Months
-------------------------------------------------
1997 1998
--------------------- --------------------
Adjusted
Revenues EBITDA Revenues EBITDA
-------- -------- -------- ------
(In millions)
Premium beverage $124.2 $ 4.7 $299.4 $28.1
Royal Crown 80.8 13.6 68.2 10.1
------- ----- -------- ------
Total Beverage Group 205.0 18.3 367.6 38.2
Restaurant Group 103.8 15.3 37.3 20.4
------- ----- -------- ------
Total $308.8 33.6 $404.9 58.6
====== ======
Unallocated corporate (7.3) (7.8)
------ -------
Total Consumer Businesses $26.3 $50.8
===== =====
Triarc's investment in National Propane Partners, L.P. (NYSE: NPL) is
reported on the equity accounting basis in Triarc's June 28, 1998 financial
statements. National Propane's revenues for the second quarter and first six
months of 1998 were $25.3 million and $71.4 million, respectively, compared to
$29.5 million and $88.7 million, respectively, for the comparable 1997 periods.
National Propane's EBITDA for the second quarter and first half of 1998 were
$0.9 million and $11.0 million, respectively, compared to $2.8 million and $14.2
million, respectively, for the comparable 1997 periods. The weakness in 1998
results is largely attributable to the impact of unseasonably warm weather.
Following is a discussion of consolidated results for the second quarter
and first six months of 1998 and 1997.
For the 1998 second quarter, net income was $5.2 million, or $0.16 per
share, versus a net loss of $(7.4) million, or $(0.25) per share, in the
comparable 1997 period, excluding non-recurring charges and credits. Net income
from consumer products businesses (i.e. beverages and restaurants) was $6.6
million, or $0.20 per share, compared with the 1997 second quarter net loss of
$(6.6) million, or $(0.22) per share. Including non-recurring charges and
credits, the 1998 second quarter net income was $8.1 million, or $0.25 per
share, versus a net loss of $(34.1) million, or $(1.14) per share, for the 1997
quarter. 1998 second quarter results include a net loss of $(1.4) million, or
$(0.04) per share, from Triarc's equity interest in National Propane and a
non-recurring credit of $2.9 million, or $0.09 per share, reflecting a gain from
the sale of businesses, primarily Snapple's 20% interest in Select Beverages,
Inc. 1997 second quarter results include a net loss of $(0.8) million, or
$(0.03) per share, from Triarc's equity interest in National Propane as well as
non-recurring charges and credits totaling net charges of $(26.7) million, or
$(0.89) per share. These non-recurring after-tax charges and credits for the
1997 second quarter consist of Snapple acquisition related charges of $(19.8)
million, restructuring charges of $(3.3) million, Arby's losses on the
consummation of the sale of its company owned restaurants of $(1.4) million, net
income from the discontinued operations of Triarc's dyes and chemicals
subsidiary, sold in late 1997, of $0.8 million and an extraordinary charge of
$(3.0) million for the write-off of deferred financing costs upon the early
retirement of debt.
For the first six months of 1998, Triarc reported net income of $6.8
million, or $0.21 per share, versus a net loss of $(7.9) million, or $(0.26) per
share, for the comparable first half of 1997, excluding non-recurring charges
and credits. Net income from consumer products businesses (i.e. beverages and
restaurants) was $7.1 million, or $0.22 per share, compared with the 1997 first
half net of $(8.6) million, or $(0.28) per share. Including non-recurring
charges and credits, for the first half of 1998, Triarc reported net income of
$12.3 million, or $0.38 per share, versus a net loss of $(35.3) million, or
$(1.18) per share, for the 1997 first half. 1998 first half results include a
net loss of $(0.3) million, or $(0.01) per share, from Triarc's equity interest
in National Propane and non-recurring credits from the sale of businesses of
$2.9 million, primarily Snapple's 20% interest in Select Beverages, Inc. and net
income from discontinued operations of $2.6 million reported in the first
quarter, such credits totaling $5.5 million, or $0.17 per share. 1997 first half
results include net income of $0.7 million, or $0.02 per share, from Triarc's
equity interest in National Propane, as well as non-recurring charges and
credits, totaling net charges of $(27.4) million, or $(0.92) per share. These
non-recurring charges and credits consist of Snapple acquisition related charges
of $(19.8) million, restructuring charges of $(4.4) million, Arby's losses on
the consummation of the sale of the company owned restaurants of $(1.4) million,
net income from the discontinued operations of Triarc's dyes and chemicals
subsidiary, sold in late 1997, of $1.2 million and an extraordinary charge for
the write-off of deferred financing costs upon the early retirement of debt of
$(3.0) million.
Triarc is a growth-oriented, branded consumer products company in
beverages (Snapple Beverages, Mistic Brands, Stewart's and Royal Crown) and
restaurants (Arby's, T.J. Cinnamon's and Pasta Connection).
# # #
Table To Follow
Notes To Follow
NOTE TO PRESS RELEASE
1. The statements in this press release that are not historical facts, including
most importantly, information concerning possible or assumed future results of
operations of the Company and statements preceded by, followed by, or that
include the words "may", "believes", "expects", "anticipates" or the negation
thereof, or similar expressions, constitute "forward-looking statements." All
statements which address operating performance, events or developments that are
expected or anticipated to occur in the future, including statements relating to
volume and revenue growth, earnings per share growth or statements expressing
general optimism about future operating results, are forward-looking statements.
Such forward-looking statements involve risks, uncertainties and other factors
which may cause actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. For those statements,
Triarc claims the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995. Such factors
include, but are not limited to, the following: general economic business and
political conditions in the countries and territories where the Company
operates, including the ability to form successful strategic business alliances
with local participants; competition, including product and pricing pressures;
success of operating initiatives; development and operating costs; advertising
and promotional efforts; brand awareness; the existence or absence of adverse
publicity; market acceptance of new product offerings; new product and concept
development by competitors; changing trends in consumer tastes; the success of
multi-branding; availability, locations and terms of sites of restaurant
development by franchisees; the ability of franchisees to open new restaurants
in accordance with their development commitments; the performance by material
customers of their obligations under purchase agreements; change in business
strategy or development plans; quality of management; availability, terms and
deployment of capital; business abilities and judgment of personnel;
availability of qualified personnel; labor and employee benefit costs;
availability and cost of raw materials and supplies; unexpected costs associated
with Year 2000 compliance or the business risk associated with Year 2000
non-compliance by customers and/or suppliers; changes in, or failure to comply
with, government regulations, including accounting standards, environmental laws
and taxation requirements; the costs, uncertainties and other effects of legal
and administrative proceedings; the impact of general economic conditions on
consumer spending and other risks and uncertainties detailed in Triarc's
Securities and Exchange Commission filings. Triarc will not undertake and
specifically declines any obligation to publicly release the result of any
revisions to any forward-looking statements to reflect events or circumstances
after the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
2. No purchases have been made to date under the $50 million stock repurchase
program and there can be no assurance that any such repurchases will be made in
the future.
TRIARC COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
Quarter Ended June 29, 1997 and June 28, 1998
1997
WITH
PROPANE
SUBSIDIARY
1997 (a) DECONSOLIDATED (b) 1998
--------- ------------------ -----
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Revenues $ 208,287 (c) $ 178,784 (c) $ 232,891
========= ========= =========
Earnings before interest, taxes,
other non-operating items,
depreciation, amortization,
restructuring charges and
acquisition related charges $ 15,684 $ 12,863 $ 31,692
Depreciation and amortization (8,895) (5,885) (8,858)
--------- --------- --------
6,789 6,978 22,834
Restructuring charges (5,467) (5,467) --
Acquisition related charges (32,440) (32,440) --
--------- --------- -------
(31,118) (30,929) 22,834
Interest expense (17,393) (15,057) (17,781)
Investment income 1,569 1,569 7,324
Equity in loss of propane
partnership (b) -- (1,286) (2,320)
Other, net (d) 1,212 795 5,339
---------- ---------- --------
Income (loss) before taxes (45,730) (44,908) 15,396
(Provision for) benefit from
income taxes 12,818 12,935 (7,327)
Minority interests in income of
propane subsidiary (b) 939 -- --
---------- --------- -------
Income (loss) from
continuing operations (31,973) (31,973) 8,069
Discontinued operations (a) 804 804 --
Extraordinary charges (e) (2,954) (2,954) --
---------- ---------- --------
Net income (loss) $ (34,123) $(34,123) $ 8,069
========== ======== ========
Diluted income (loss) per share (f):
Income (loss) from
continuing operations $ (1.07) $ (1.07) $ .25
Discontinued operations (a) .03 .03 --
Extraordinary charges (e) (.10) (.10) --
----------- ---------- --------
Net income (loss) $ (1.14) $ (1.14) $ .25
=========== ========== =========
Shares used to calculate income
(loss) per share (f) 29,961 29,961 32,374
=========== ========== ========
(a) On December 23, 1997 the Company sold the stock of C.H. Patrick & Co.,
Inc. (C.H. Patrick). The results of operations of C.H. Patrick for the
1997 second quarter have been retroactively restated to reflect C.H.
Patrick as discontinued operations.
(b) In accordance with amendments to the partnership agreements of the
Company's investment in a propane partnership effective December 28,
1997, the Company no longer has substantive control over the partnership
to the point where it now exercises only significant influence and,
accordingly, no longer consolidates the partnership. Accordingly, the
1997 second quarter is also presented on a deconsolidated basis for
comparative purposes.
(c) Revenues for the second quarter of 1997 include $22.1 million of sales
from company-owned Arby's restaurants which were sold on May 5, 1997.
(d) Includes non-recurring items from the sale of businesses consisting of,
in the 1997 quarter, $2.3 million of loss from the sale of the
company-owned restaurants ($1.4 million after tax or $.05 per diluted
share) and, in the 1998 quarter, $3.9 million of gain from the sale of
Snapple's 20% interest in Select Beverages ($2.4 million after tax or
$.07 per diluted share) and $0.8 million of recognition of deferred gain
from the sale of a 57% interest in the Company's propane business ($0.5
million after tax or $.02 per diluted share).
(e) Represents the after tax write-off of deferred debt costs associated
with (i) debt assumed by the buyer of the Company's restaurants and (ii)
debt of Mistic refinanced, both in May 1997.
(f) Basic and diluted loss per share are the same for the 1997 second
quarter since all potentially dilutive securities would have had
an antidilutive effect for such period. Diluted income per share
for the 1998 second quarter reflects the effect of dilutive stock
options. Basic income from continuing operations and net income
per share for the 1998 second quarter was $.26, reflecting
weighted average shares of 30,596,000.
TRIARC COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
SIX MONTHS ENDED JUNE 29, 1997 AND JUNE 28, 1998
1997
WITH
PROPANE
SUBSIDIARY
1997 (a) DECONSOLIDATED (b) 1998
-------- ------------------ ----
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Revenues $397,443 (c) $308,756 (c) $404,944
======== ======== ========
Earnings before interest, taxes,
other non-operating items,
depreciation, amortization,
restructuring charges and
acquisition related charges $ 40,514 $ 26,323 $ 50,800
Depreciation and amortization (15,858) (9,949) (18,070)
---------- --------- ---------
24,656 16,374 32,730
Restructuring charges (7,350) (7,350) --
Acquisition related charges (32,440) (32,440) --
---------- --------- ---------
(15,134) (23,416) 32,730
Interest expense (32,231) (27,711) (34,419)
Investment income 4,271 4,271 14,909
Equity in earnings (loss) of
propane partnership (b) -- 1,209 (535)
Other, net (d) 2,602 1,867 5,901
---------- --------- ---------
Income (loss) before taxes (40,492) (43,780) 18,586
Benefit from (provision for)
income taxes 10,052 10,169 (8,922)
Minority interests in income of
propane subsidiary (b) (3,171) -- --
---------- --------- ---------
Income (loss) from
continuing operations (33,611) (33,611) 9,664
Discontinued operations 1,265 (a) 1,265 (a) 2,600 (e)
Extraordinary charge (f) (2,954) (2,954) --
---------- --------- ----------
Net income (loss) $(35,300) $(35,300) $ 12,264
======== ========= =========
Diluted income (loss) per share (g):
Income (loss) from
continuing operations $ (1.12) $ (1.12) $ .30
Discontinued operations .04 (a) .04 (a) .08 (e)
Extraordinary charge (f) (.10) (.10) --
--------- --------- ---------
Net income (loss) $ (1.18) $ (1.18) $ .38
========= ========= =========
Shares used to calculate income
(loss) per share (g) 29,931 29,931 32,655
========= ========= =========
(a) On December 23, 1997 the Company sold the stock of C.H. Patrick & Co.,
Inc. (C.H. Patrick). The results of operations of C.H. Patrick for the
1997 first half have been retroactively restated to reflect C.H. Patrick
as discontinued operations.
(b) In accordance with amendments to the partnership agreements of the
Company's investment in a propane partnership effective December 28,
1997, the Company no longer has substantive control over the partner-
ship to the point where it now exercises only significant influence
and, accordingly, no longer consolidates the partnership.
Accordingly, the 1997 first half is also presented on a deconsolidated
basis for comparative purposes.
(c) Revenues for the first half of 1997 include $74.2 million of sales from
company-owned Arby's restaurants which were sold on May 5, 1997.
(d) Includes non-recurring items from the sale of businesses
consisting of, in the 1997 period, $2.3 million of loss from the
sale of the company-owned restaurants ($1.4 million after tax or
$.05 per diluted share) and, in the 1998 period, $3.9 million of
gain from the sale of Snapple's 20% interest in Select Beverages
($2.4 million after tax or $.07 per diluted share) and $0.8
million of recognition of deferred gain from the sale of a 57%
interest in the Company's propane business ($0.5 million after
tax or $.02 per diluted share).
(e) Represents an adjustment during the first quarter of 1998 to
amounts provided in prior years for the estimated loss on
disposal of certain discontinued operations of Southeastern
Public Service Company, a subsidiary of the Company.
(f) Represents the after tax write-off of deferred debt costs associated
with (i) debt assumed by buyer of the Company's restaurants and (ii)
debt of Mistic refinanced, both in May 1997.
(g) Basic and diluted loss per share are the same for the six months ended
June 29, 1997 since all potentially dilutive securities would have had
an antidilutive effect for such period. Diluted income per share for the
six months ended June 28, 1998 reflects the effect of dilutive stock
options. Basic income from continuing operations per share and net
income per share for the six months ended June 28, 1998 were $.32 and
$.40, respectively, reflecting weighted average shares of 30,841,000.
