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These Terms and Conditions (“Terms”) are a binding contract between you and Alphaminr, (“Alphaminr”, “we”, “us” and “service”). You must agree to and accept the Terms. These Terms include the provisions in this document as well as those in the Privacy Policy. These terms may be modified at any time.
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||||
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(X)
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
( )
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
38-0471180
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
|
One Dave Thomas Blvd., Dublin, Ohio
|
|
43017
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
||||
|
|
Page
|
|
|
|
|
|
|
|
|
July 2,
2017 |
|
January 1,
2017 |
||||
|
ASSETS
|
(Unaudited)
|
||||||
|
Current assets:
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
204,543
|
|
|
$
|
198,240
|
|
|
Restricted cash
|
39,144
|
|
|
57,612
|
|
||
|
Accounts and notes receivable, net
|
106,649
|
|
|
98,825
|
|
||
|
Inventories
|
2,922
|
|
|
2,851
|
|
||
|
Prepaid expenses and other current assets
|
27,438
|
|
|
19,244
|
|
||
|
Advertising funds restricted assets
|
60,227
|
|
|
75,760
|
|
||
|
Total current assets
|
440,923
|
|
|
452,532
|
|
||
|
Properties
|
1,254,750
|
|
|
1,192,339
|
|
||
|
Goodwill
|
742,407
|
|
|
741,410
|
|
||
|
Other intangible assets
|
1,338,645
|
|
|
1,322,531
|
|
||
|
Investments
|
56,999
|
|
|
56,981
|
|
||
|
Net investment in direct financing leases
|
213,069
|
|
|
123,604
|
|
||
|
Other assets
|
61,870
|
|
|
49,917
|
|
||
|
Total assets
|
$
|
4,108,663
|
|
|
$
|
3,939,314
|
|
|
|
|
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
|
Current liabilities:
|
|
|
|
|
|
||
|
Current portion of long-term debt
|
$
|
28,988
|
|
|
$
|
24,652
|
|
|
Accounts payable
|
23,963
|
|
|
27,635
|
|
||
|
Accrued expenses and other current liabilities
|
116,352
|
|
|
102,034
|
|
||
|
Advertising funds restricted liabilities
|
60,227
|
|
|
75,760
|
|
||
|
Total current liabilities
|
229,530
|
|
|
230,081
|
|
||
|
Long-term debt
|
2,699,760
|
|
|
2,487,630
|
|
||
|
Deferred income taxes
|
415,479
|
|
|
446,513
|
|
||
|
Other liabilities
|
276,845
|
|
|
247,354
|
|
||
|
Total liabilities
|
3,621,614
|
|
|
3,411,578
|
|
||
|
Commitments and contingencies
|
|
|
|
|
|
||
|
Stockholders’ equity:
|
|
|
|
||||
|
Common stock, $0.10 par value; 1,500,000 shares authorized; 470,424 shares issued; 244,313 and 246,574 shares outstanding, respectively
|
47,042
|
|
|
47,042
|
|
||
|
Additional paid-in capital
|
2,882,494
|
|
|
2,878,589
|
|
||
|
Accumulated deficit
|
(302,939
|
)
|
|
(290,857
|
)
|
||
|
Common stock held in treasury, at cost; 226,111 and 223,850 shares, respectively
|
(2,085,301
|
)
|
|
(2,043,797
|
)
|
||
|
Accumulated other comprehensive loss
|
(54,247
|
)
|
|
(63,241
|
)
|
||
|
Total stockholders’ equity
|
487,049
|
|
|
527,736
|
|
||
|
Total liabilities and stockholders’ equity
|
$
|
4,108,663
|
|
|
$
|
3,939,314
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
|
(Unaudited)
|
||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
||||||||
|
Sales
|
$
|
160,859
|
|
|
$
|
259,235
|
|
|
$
|
309,071
|
|
|
$
|
518,567
|
|
|
Franchise royalty revenue and fees
|
112,548
|
|
|
88,952
|
|
|
207,238
|
|
|
177,847
|
|
||||
|
Franchise rental income
|
46,935
|
|
|
34,531
|
|
|
89,852
|
|
|
65,091
|
|
||||
|
|
320,342
|
|
|
382,718
|
|
|
606,161
|
|
|
761,505
|
|
||||
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
|
Cost of sales
|
129,360
|
|
|
202,554
|
|
|
252,767
|
|
|
417,290
|
|
||||
|
Franchise rental expense
|
21,897
|
|
|
17,493
|
|
|
40,765
|
|
|
32,150
|
|
||||
|
General and administrative
|
51,280
|
|
|
61,124
|
|
|
103,730
|
|
|
125,770
|
|
||||
|
Depreciation and amortization
|
31,309
|
|
|
30,749
|
|
|
60,474
|
|
|
63,094
|
|
||||
|
System optimization losses (gains), net
|
41,050
|
|
|
(1,924
|
)
|
|
39,643
|
|
|
(10,350
|
)
|
||||
|
Reorganization and realignment costs
|
17,699
|
|
|
2,487
|
|
|
17,880
|
|
|
5,737
|
|
||||
|
Impairment of long-lived assets
|
253
|
|
|
5,525
|
|
|
763
|
|
|
12,630
|
|
||||
|
Other operating expense (income), net
|
1,700
|
|
|
(938
|
)
|
|
3,625
|
|
|
(14,293
|
)
|
||||
|
|
294,548
|
|
|
317,070
|
|
|
519,647
|
|
|
632,028
|
|
||||
|
Operating profit
|
25,794
|
|
|
65,648
|
|
|
86,514
|
|
|
129,477
|
|
||||
|
Interest expense
|
(28,935
|
)
|
|
(28,643
|
)
|
|
(57,910
|
)
|
|
(56,752
|
)
|
||||
|
Other income, net
|
2,844
|
|
|
276
|
|
|
3,233
|
|
|
538
|
|
||||
|
(Loss) income before income taxes
|
(297
|
)
|
|
37,281
|
|
|
31,837
|
|
|
73,263
|
|
||||
|
Provision for income taxes
|
(1,548
|
)
|
|
(10,801
|
)
|
|
(11,341
|
)
|
|
(21,420
|
)
|
||||
|
Net (loss) income
|
$
|
(1,845
|
)
|
|
$
|
26,480
|
|
|
$
|
20,496
|
|
|
$
|
51,843
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Basic and diluted net (loss) income per share
|
$
|
(.01
|
)
|
|
$
|
.10
|
|
|
$
|
.08
|
|
|
$
|
.19
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Dividends per share
|
$
|
.07
|
|
|
$
|
.06
|
|
|
$
|
.14
|
|
|
$
|
.12
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
|
(Unaudited)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Net (loss) income
|
$
|
(1,845
|
)
|
|
$
|
26,480
|
|
|
$
|
20,496
|
|
|
$
|
51,843
|
|
|
Other comprehensive income, net:
|
|
|
|
|
|
|
|
||||||||
|
Foreign currency translation adjustment
|
6,065
|
|
|
1,580
|
|
|
8,010
|
|
|
14,256
|
|
||||
|
Change in unrecognized pension loss, net of income tax (provision) benefit of $(60) for the six months ended July 2, 2017 and $34 for the three and six months ended July 3, 2016
|
—
|
|
|
(56
|
)
|
|
96
|
|
|
(56
|
)
|
||||
|
Effect of cash flow hedges, net of income tax provision of $281 and $559 for both the three and six months ended July 2, 2017 and July 3, 2016, respectively
|
443
|
|
|
443
|
|
|
888
|
|
|
888
|
|
||||
|
Other comprehensive income, net
|
6,508
|
|
|
1,967
|
|
|
8,994
|
|
|
15,088
|
|
||||
|
Comprehensive income
|
$
|
4,663
|
|
|
$
|
28,447
|
|
|
$
|
29,490
|
|
|
$
|
66,931
|
|
|
|
Six Months Ended
|
||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
||||
|
|
(Unaudited)
|
||||||
|
Cash flows from operating activities:
|
|
|
|
||||
|
Net income
|
$
|
20,496
|
|
|
$
|
51,843
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
|
Depreciation and amortization
|
60,474
|
|
|
64,694
|
|
||
|
Share-based compensation
|
11,372
|
|
|
9,925
|
|
||
|
Impairment of long-lived assets
|
763
|
|
|
12,630
|
|
||
|
Deferred income tax
|
(2,496
|
)
|
|
(10,353
|
)
|
||
|
Non-cash rental income, net
|
(5,286
|
)
|
|
(2,561
|
)
|
||
|
Net receipt of deferred vendor incentives
|
7,077
|
|
|
8,230
|
|
||
|
System optimization losses (gains), net
|
39,643
|
|
|
(10,350
|
)
|
||
|
Gain on sale of investments, net
|
(2,553
|
)
|
|
—
|
|
||
|
Distributions received from TimWen joint venture
|
5,524
|
|
|
5,786
|
|
||
|
Equity in earnings in joint ventures, net
|
(3,786
|
)
|
|
(4,275
|
)
|
||
|
Accretion of long-term debt
|
617
|
|
|
608
|
|
||
|
Amortization of deferred financing costs
|
3,974
|
|
|
3,769
|
|
||
|
Reclassification of unrealized losses on cash flow hedges
|
1,447
|
|
|
1,447
|
|
||
|
Other, net
|
3,552
|
|
|
1,731
|
|
||
|
Changes in operating assets and liabilities:
|
|
|
|
||||
|
Restricted cash
|
44
|
|
|
135
|
|
||
|
Accounts and notes receivable, net
|
(9,557
|
)
|
|
(26,956
|
)
|
||
|
Inventories
|
(71
|
)
|
|
148
|
|
||
|
Prepaid expenses and other current assets
|
(2,116
|
)
|
|
(4,638
|
)
|
||
|
Accounts payable
|
(4,484
|
)
|
|
(1,884
|
)
|
||
|
Accrued expenses and other current liabilities
|
(4,051
|
)
|
|
5,867
|
|
||
|
Net cash provided by operating activities
|
120,583
|
|
|
105,796
|
|
||
|
Cash flows from investing activities:
|
|
|
|
|
|
||
|
Capital expenditures
|
(32,117
|
)
|
|
(68,495
|
)
|
||
|
Acquisitions
|
(86,788
|
)
|
|
(2,209
|
)
|
||
|
Dispositions
|
77,980
|
|
|
45,078
|
|
||
|
Proceeds from sale of investments
|
3,282
|
|
|
—
|
|
||
|
Payments for investments
|
(375
|
)
|
|
(113
|
)
|
||
|
Notes receivable, net
|
(2,225
|
)
|
|
(3,439
|
)
|
||
|
Changes in restricted cash
|
18,711
|
|
|
7,040
|
|
||
|
Other, net
|
—
|
|
|
(17
|
)
|
||
|
Net cash used in investing activities
|
(21,532
|
)
|
|
(22,155
|
)
|
||
|
Cash flows from financing activities:
|
|
|
|
|
|
||
|
Repayments of long-term debt
|
(13,646
|
)
|
|
(12,651
|
)
|
||
|
Deferred financing costs
|
(740
|
)
|
|
(867
|
)
|
||
|
Repurchases of common stock
|
(50,527
|
)
|
|
(108,057
|
)
|
||
|
Dividends
|
(34,447
|
)
|
|
(32,152
|
)
|
||
|
Proceeds from stock option exercises
|
6,385
|
|
|
6,696
|
|
||
|
Payments related to tax withholding for share-based compensation
|
(2,956
|
)
|
|
(3,064
|
)
|
||
|
Net cash used in financing activities
|
(95,931
|
)
|
|
(150,095
|
)
|
||
|
Net cash provided by (used in) operations before effect of exchange rate changes on cash
|
3,120
|
|
|
(66,454
|
)
|
||
|
Effect of exchange rate changes on cash
|
3,183
|
|
|
5,418
|
|
||
|
Net increase (decrease) in cash and cash equivalents
|
6,303
|
|
|
(61,036
|
)
|
||
|
Cash and cash equivalents at beginning of period
|
198,240
|
|
|
327,216
|
|
||
|
Cash and cash equivalents at end of period
|
$
|
204,543
|
|
|
$
|
266,180
|
|
|
|
Six Months Ended
|
||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
||||
|
|
(Unaudited)
|
||||||
|
Supplemental cash flow information:
|
|
|
|
||||
|
Cash paid for:
|
|
|
|
|
|
||
|
Interest
|
$
|
62,090
|
|
|
$
|
57,501
|
|
|
Income taxes, net of refunds
|
12,886
|
|
|
39,745
|
|
||
|
|
|
|
|
||||
|
Supplemental non-cash investing and financing activities:
|
|
|
|
||||
|
Capital expenditures included in accounts payable
|
$
|
8,965
|
|
|
$
|
17,228
|
|
|
Capitalized lease obligations
|
238,201
|
|
|
91,579
|
|
||
|
|
Three Months Ended
|
||
|
|
July 2,
2017 |
||
|
Acquisition (a)
|
|
||
|
Total consideration paid
|
$
|
86,788
|
|
|
Identifiable assets and liabilities assumed:
|
|
|
|
|
Net assets held for sale
|
70,688
|
|
|
|
Capital lease assets
|
49,360
|
|
|
|
Deferred taxes
|
27,493
|
|
|
|
Capital lease obligations
|
(97,046
|
)
|
|
|
Net unfavorable leases (b)
|
(22,211
|
)
|
|
|
Other liabilities (c)
|
(6,999
|
)
|
|
|
Total identifiable net assets
|
21,285
|
|
|
|
Goodwill (d)
|
$
|
65,503
|
|
|
|
|
||
|
Disposition
|
|
||
|
Proceeds
|
$
|
70,688
|
|
|
Net assets sold
|
(70,688
|
)
|
|
|
Goodwill (d)
|
(65,503
|
)
|
|
|
Net favorable leases (e)
|
24,034
|
|
|
|
Other (f)
|
(1,680
|
)
|
|
|
Loss on DavCo and NPC transactions
|
$
|
(43,149
|
)
|
|
(a)
|
The fair values of the identifiable intangible assets and taxes related to the acquisition are provisional amounts as of
July 2, 2017
, pending final valuations and purchase accounting adjustments. The Company utilized management estimates and consultation with an independent third-party valuation firm to assist in the valuation process.
|
|
(b)
|
Includes favorable lease assets of
$1,228
and unfavorable lease liabilities of
$23,439
.
|
|
(c)
|
Includes a supplemental purchase price estimated at
$6,344
to be paid to DavCo for the resolution of certain lease-related matters, which is included in “Accrued expenses and other current liabilities.”
|
|
(d)
|
Includes tax deductible goodwill of
$21,871
.
|
|
(e)
|
The Company recorded favorable lease assets of
$30,068
and unfavorable lease liabilities of
$6,034
as a result of subleasing land, buildings and leasehold improvements to NPC.
|
|
(f)
|
Includes cash payments for selling and other costs associated with the transaction.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
July 2, 2017
|
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
Number of restaurants sold to franchisees
|
—
|
|
|
—
|
|
|
—
|
|
|
55
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Proceeds from sales of restaurants
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39,615
|
|
|
Net assets sold (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,055
|
)
|
||||
|
Goodwill related to sales of restaurants
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,376
|
)
|
||||
|
Net unfavorable leases (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,906
|
)
|
||||
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(795
|
)
|
||||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,483
|
|
||||
|
Post-closing adjustments on sales of restaurants (c)
|
27
|
|
|
545
|
|
|
927
|
|
|
(1,590
|
)
|
||||
|
Gain on sales of restaurants, net
|
27
|
|
|
545
|
|
|
927
|
|
|
8,893
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Gain on sales of other assets, net (d)
|
2,072
|
|
|
1,379
|
|
|
2,579
|
|
|
1,457
|
|
||||
|
Loss on DavCo and NPC transactions
|
(43,149
|
)
|
|
—
|
|
|
(43,149
|
)
|
|
—
|
|
||||
|
System optimization (losses) gains, net
|
$
|
(41,050
|
)
|
|
$
|
1,924
|
|
|
$
|
(39,643
|
)
|
|
$
|
10,350
|
|
|
(a)
|
Net assets sold consisted primarily of equipment.
|
|
(b)
|
During the
six months ended
July 3, 2016
, the Company recorded favorable lease assets of
$183
and unfavorable lease liabilities of
$5,089
as a result of leasing and/or subleasing land, buildings and/or leasehold improvements to franchisees in connection with sales of restaurants.
|
|
(c)
|
The
three and six months ended
July 2, 2017
includes cash proceeds of
$300
related to post-closing reconciliations with franchisees. The
six months ended
July 2, 2017
also includes the recognition of a deferred gain of
$312
as a result of the resolution of certain contingencies related to the extension of lease terms for a Canadian restaurant.
|
|
(d)
|
During the
three and six months ended
July 2, 2017
, the Company received cash proceeds of
$5,342
and
$6,992
, respectively, primarily from the sale of surplus properties. The
six months ended
July 2, 2017
also includes the recognition of a deferred gain of
$375
related to the sale of a share in an aircraft. During the
three and six months ended
July 3, 2016
, the Company received cash proceeds of
$3,893
and
$5,463
, respectively, primarily from the sale of surplus properties.
|
|
|
Six Months Ended
|
||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
||||
|
Restaurants acquired from franchisees
|
—
|
|
|
2
|
|
||
|
|
|
|
|
||||
|
Total consideration paid, net of cash received
|
$
|
—
|
|
|
$
|
2,209
|
|
|
Identifiable assets acquired and liabilities assumed:
|
|
|
|
||||
|
Properties
|
—
|
|
|
2,218
|
|
||
|
Deferred taxes and other assets
|
—
|
|
|
9
|
|
||
|
Other liabilities
|
—
|
|
|
(18
|
)
|
||
|
Total identifiable net assets
|
—
|
|
|
2,209
|
|||
|
Goodwill
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
System optimization initiative
|
$
|
454
|
|
|
$
|
2,081
|
|
|
$
|
635
|
|
|
$
|
4,804
|
|
|
G&A realignment - November 2014 plan
|
—
|
|
|
406
|
|
|
—
|
|
|
933
|
|
||||
|
G&A realignment - May 2017 plan
|
17,245
|
|
|
—
|
|
|
17,245
|
|
|
—
|
|
||||
|
Reorganization and realignment costs
|
$
|
17,699
|
|
|
$
|
2,487
|
|
|
$
|
17,880
|
|
|
$
|
5,737
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Total
Incurred Since Inception
|
||||||||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
|
|||||||||||
|
Severance and related employee costs
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
3
|
|
|
$
|
18
|
|
|
$
|
18,237
|
|
|
Professional fees
|
432
|
|
|
1,445
|
|
|
562
|
|
|
3,146
|
|
|
17,172
|
|
|||||
|
Other (a)
|
22
|
|
|
(37
|
)
|
|
70
|
|
|
40
|
|
|
5,813
|
|
|||||
|
|
454
|
|
|
1,426
|
|
|
635
|
|
|
3,204
|
|
|
41,222
|
|
|||||
|
Accelerated depreciation and amortization (b)
|
—
|
|
|
655
|
|
|
—
|
|
|
1,600
|
|
|
25,398
|
|
|||||
|
Share-based compensation (c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,013
|
|
|||||
|
Total system optimization initiative
|
$
|
454
|
|
|
$
|
2,081
|
|
|
$
|
635
|
|
|
$
|
4,804
|
|
|
$
|
71,633
|
|
|
(a)
|
The
three and six months ended
July 3, 2016
include a reversal of an accrual of
$50
as a result of a change in estimate.
|
|
(b)
|
Primarily includes accelerated amortization of previously acquired franchise rights related to Company-operated restaurants in territories that have been sold in connection with our system optimization initiative.
|
|
(c)
|
Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our system optimization initiative.
|
|
|
Balance
January 1,
2017
|
|
Charges
|
|
Payments
|
|
Balance
July 2, 2017
|
||||||||
|
Severance and related employee costs
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
Professional fees
|
101
|
|
|
562
|
|
|
(655
|
)
|
|
8
|
|
||||
|
Other
|
—
|
|
|
70
|
|
|
(70
|
)
|
|
—
|
|
||||
|
|
$
|
101
|
|
|
$
|
635
|
|
|
$
|
(728
|
)
|
|
$
|
8
|
|
|
|
Balance
January 3, 2016
|
|
Charges
|
|
Payments
|
|
Balance July 3,
2016
|
||||||||
|
Severance and related employee costs
|
$
|
77
|
|
|
$
|
18
|
|
|
$
|
(35
|
)
|
|
$
|
60
|
|
|
Professional fees
|
708
|
|
|
3,146
|
|
|
(3,497
|
)
|
|
357
|
|
||||
|
Other
|
90
|
|
|
40
|
|
|
(130
|
)
|
|
—
|
|
||||
|
|
$
|
875
|
|
|
$
|
3,204
|
|
|
$
|
(3,662
|
)
|
|
$
|
417
|
|
|
|
Three Months Ended
|
||
|
|
July 2,
2017 |
||
|
Severance and related employee costs
|
$
|
13,226
|
|
|
Recruitment and relocation costs
|
—
|
|
|
|
Third-party and other costs
|
325
|
|
|
|
|
13,551
|
|
|
|
Share-based compensation (a)
|
3,694
|
|
|
|
Total G&A realignment - May 2017 plan
|
$
|
17,245
|
|
|
(a)
|
Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under our May 2017 plan.
|
|
|
Balance
January 1,
2017
|
|
Charges
|
|
Payments
|
|
Balance
July 2, 2017
|
||||||||
|
Severance and related employee costs
|
$
|
—
|
|
|
$
|
13,226
|
|
|
$
|
(507
|
)
|
|
$
|
12,719
|
|
|
Recruitment and relocation costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
Third-party and other costs
|
—
|
|
|
325
|
|
|
(246
|
)
|
|
79
|
|
||||
|
|
$
|
—
|
|
|
$
|
13,551
|
|
|
$
|
(753
|
)
|
|
$
|
12,798
|
|
|
|
Six Months Ended
|
||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
||||
|
Balance at beginning of period
|
$
|
54,545
|
|
|
$
|
55,541
|
|
|
|
|
|
|
||||
|
Investment
|
375
|
|
|
113
|
|
||
|
|
|
|
|
||||
|
Equity in earnings for the period
|
4,915
|
|
|
5,410
|
|
||
|
Amortization of purchase price adjustments (a)
|
(1,129
|
)
|
|
(1,135
|
)
|
||
|
|
3,786
|
|
|
4,275
|
|
||
|
Distributions received
|
(5,524
|
)
|
|
(5,786
|
)
|
||
|
Foreign currency translation adjustment included in “Other comprehensive income, net”
|
2,110
|
|
|
3,952
|
|
||
|
Balance at end of period
|
$
|
55,292
|
|
|
$
|
58,095
|
|
|
(a)
|
Purchase price adjustments that impacted the carrying value of the Company’s investment in TimWen are being amortized over the average original aggregate life of
21
years.
|
|
•
|
Level 1 Inputs - Quoted prices for identical assets or liabilities in active markets.
|
|
•
|
Level 2 Inputs - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
|
|
•
|
Level 3 Inputs - Pricing inputs are unobservable for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value require significant management judgment or estimation.
|
|
|
July 2,
2017 |
|
January 1,
2017 |
|
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Fair Value
Measurements
|
||||||||
|
Financial assets
|
|
|
|
|
|
|
|
|
|
||||||||
|
Cash equivalents
|
$
|
6,345
|
|
|
$
|
6,345
|
|
|
$
|
5,335
|
|
|
$
|
5,335
|
|
|
Level 1
|
|
Non-current cost method investments (a)
|
1,707
|
|
|
348,322
|
|
|
2,436
|
|
|
326,283
|
|
|
Level 3
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
|
Series 2015-1 Class A-2-I Notes (b)
|
859,688
|
|
|
862,181
|
|
|
864,063
|
|
|
857,349
|
|
|
Level 2
|
||||
|
Series 2015-1 Class A-2-II Notes (b)
|
884,250
|
|
|
895,215
|
|
|
888,750
|
|
|
880,005
|
|
|
Level 2
|
||||
|
Series 2015-1 Class A-2-III Notes (b)
|
491,250
|
|
|
496,457
|
|
|
493,750
|
|
|
474,543
|
|
|
Level 2
|
||||
|
7% debentures, due in 2025 (b)
|
88,893
|
|
|
105,250
|
|
|
88,277
|
|
|
99,750
|
|
|
Level 2
|
||||
|
Guarantees of franchisee loan obligations (c)
|
229
|
|
|
229
|
|
|
280
|
|
|
280
|
|
|
Level 3
|
||||
|
(a)
|
The fair value of our indirect investment in Arby’s Restaurant Group, Inc. (“Arby’s”) is based on applying a multiple to Arby’s adjusted earnings before income taxes, depreciation and amortization per its current unaudited financial information. The carrying value of our indirect investment in Arby’s was reduced to
zero
during 2013 in connection with the receipt of a dividend. The fair values of our remaining investments are not significant and are based on our review of information provided by the investment managers or investees which was based on (1) valuations performed by the investment managers or investees, (2) quoted market or broker/dealer prices for similar investments and (3) quoted market or broker/dealer prices adjusted by the investment managers for legal or contractual restrictions, risk of nonperformance or lack of marketability, depending upon the underlying investments.
|
|
(b)
|
The fair values were based on quoted market prices in markets that are not considered active markets.
|
|
(c)
|
Wendy’s has provided loan guarantees to various lenders on behalf of franchisees entering into debt arrangements for new restaurant development and equipment financing. In addition, during 2012, Wendy’s provided a guarantee to a lender for a franchisee in connection with the refinancing of the franchisee’s debt. We have accrued a liability for the fair value of these guarantees, the calculation of which was based upon a weighted average risk percentage established at inception and adjusted for a history of defaults.
|
|
|
|
|
Fair Value Measurements
|
||||||||||||
|
|
July 2,
2017 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
Held and used
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Held for sale
|
1,083
|
|
|
—
|
|
|
—
|
|
|
1,083
|
|
||||
|
Total
|
$
|
1,083
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,083
|
|
|
|
|
|
Fair Value Measurements
|
||||||||||||
|
|
January 1,
2017 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
Held and used
|
$
|
5,462
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,462
|
|
|
Held for sale
|
1,552
|
|
|
—
|
|
|
—
|
|
|
1,552
|
|
||||
|
Total
|
$
|
7,014
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,014
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
Restaurants leased or subleased to franchisees
|
$
|
—
|
|
|
$
|
5,490
|
|
|
$
|
—
|
|
|
$
|
12,491
|
|
|
Surplus properties
|
52
|
|
|
—
|
|
|
545
|
|
|
104
|
|
||||
|
Company-operated restaurants
|
201
|
|
|
35
|
|
|
218
|
|
|
35
|
|
||||
|
|
$
|
253
|
|
|
$
|
5,525
|
|
|
$
|
763
|
|
|
$
|
12,630
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||
|
Common stock:
|
|
|
|
|
|
|
|
||||
|
Weighted average basic shares outstanding
|
245,261
|
|
|
265,915
|
|
|
245,933
|
|
|
268,065
|
|
|
Dilutive effect of stock options and restricted shares
|
—
|
|
|
4,350
|
|
|
7,963
|
|
|
4,442
|
|
|
Weighted average diluted shares outstanding
|
245,261
|
|
|
270,265
|
|
|
253,896
|
|
|
272,507
|
|
|
|
Six Months Ended
|
||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
||||
|
Balance at beginning of period
|
$
|
527,736
|
|
|
$
|
752,914
|
|
|
Comprehensive income
|
29,490
|
|
|
66,931
|
|
||
|
Cash dividends
|
(34,447
|
)
|
|
(32,152
|
)
|
||
|
Repurchases of common stock
|
(52,501
|
)
|
|
(109,348
|
)
|
||
|
Share-based compensation
|
11,372
|
|
|
9,925
|
|
||
|
Exercises of stock options
|
6,161
|
|
|
6,238
|
|
||
|
Vesting of restricted shares
|
(2,732
|
)
|
|
(2,841
|
)
|
||
|
Cumulative effect of change in accounting principle (a)
|
1,880
|
|
|
—
|
|
||
|
Tax benefit from share-based compensation
|
—
|
|
|
1,402
|
|
||
|
Other
|
90
|
|
|
95
|
|
||
|
Balance at end of period
|
$
|
487,049
|
|
|
$
|
693,164
|
|
|
(a)
|
During the six months ended
July 2, 2017
, the Company recognized a tax benefit as a reduction to the Company’s deferred tax liability with an equal offsetting increase to “Accumulated deficit.” The adjustment was recognized as a result of adoption of an amendment to the accounting for employee share-based payment transactions. See
Note 15
for further information.
|
|
|
Foreign Currency Translation
|
|
Cash Flow Hedges (a)
|
|
Pension
|
|
Total
|
||||||||
|
Balance at January 1, 2017
|
$
|
(60,299
|
)
|
|
$
|
(1,797
|
)
|
|
$
|
(1,145
|
)
|
|
$
|
(63,241
|
)
|
|
Current-period other comprehensive income
|
8,010
|
|
|
888
|
|
|
96
|
|
|
8,994
|
|
||||
|
Balance at July 2, 2017
|
$
|
(52,289
|
)
|
|
$
|
(909
|
)
|
|
$
|
(1,049
|
)
|
|
$
|
(54,247
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at January 3, 2016
|
$
|
(66,163
|
)
|
|
$
|
(3,571
|
)
|
|
$
|
(1,089
|
)
|
|
$
|
(70,823
|
)
|
|
Current-period other comprehensive income (loss)
|
14,256
|
|
|
888
|
|
|
(56
|
)
|
|
15,088
|
|
||||
|
Balance at July 3, 2016
|
$
|
(51,907
|
)
|
|
$
|
(2,683
|
)
|
|
$
|
(1,145
|
)
|
|
$
|
(55,735
|
)
|
|
(a)
|
Current-period other comprehensive income (loss) includes the reclassification of unrealized losses on cash flow hedges from “Accumulated other comprehensive loss” to our condensed consolidated statements of operations of
$443
and
$888
for both the three and six months ended
July 2, 2017
and July 3, 2016, respectively. The reclassification of unrealized losses on cash flow hedges consists of
$724
and
$1,447
for both the three and six months ended
July 2, 2017
and July 3, 2016, respectively, recorded to “Interest expense,” net of the related income tax benefit of
$281
and
$559
for both the three and six months ended
July 2, 2017
and July 3, 2016, respectively, recorded to “Provision for income taxes.” See Note 6 for further information.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
July 2,
2017
|
|
July 3,
2016
|
|
July 2,
2017
|
|
July 3,
2016
|
||||||||
|
Rental expense:
|
|
|
|
|
|
|
|
||||||||
|
Minimum rentals
|
$
|
22,786
|
|
|
$
|
20,513
|
|
|
$
|
42,704
|
|
|
$
|
40,003
|
|
|
Contingent rentals
|
4,722
|
|
|
4,749
|
|
|
9,010
|
|
|
8,531
|
|
||||
|
Total rental expense (a)
|
$
|
27,508
|
|
|
$
|
25,262
|
|
|
$
|
51,714
|
|
|
$
|
48,534
|
|
|
(a)
|
Amounts exclude sublease income of
$30,849
and
$57,412
recognized during the
three and six months ended
July 2, 2017
, respectively, and
$23,541
and
$43,273
recognized during the
three and six months ended
July 3, 2016
, respectively.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
July 2,
2017
|
|
July 3,
2016
|
|
July 2,
2017
|
|
July 3,
2016
|
||||||||
|
Rental income:
|
|
|
|
|
|
|
|
||||||||
|
Minimum rentals
|
$
|
41,560
|
|
|
$
|
29,709
|
|
|
$
|
80,165
|
|
|
$
|
55,507
|
|
|
Contingent rentals
|
5,375
|
|
|
4,822
|
|
|
9,687
|
|
|
9,584
|
|
||||
|
Total rental income
|
$
|
46,935
|
|
|
$
|
34,531
|
|
|
$
|
89,852
|
|
|
$
|
65,091
|
|
|
|
Rental Payments
|
|
Rental Receipts
|
||||||||||||||||
|
Fiscal Year
|
Capital
Leases
|
|
Operating
Leases
|
|
Capital
Leases
|
|
Operating
Leases
|
|
Owned
Properties
|
||||||||||
|
2017 (a)
|
$
|
22,290
|
|
|
$
|
47,844
|
|
|
$
|
30,774
|
|
|
$
|
37,348
|
|
|
$
|
26,845
|
|
|
2018
|
43,323
|
|
|
92,786
|
|
|
60,714
|
|
|
74,613
|
|
|
53,849
|
|
|||||
|
2019
|
42,615
|
|
|
92,484
|
|
|
61,228
|
|
|
74,626
|
|
|
54,820
|
|
|||||
|
2020
|
43,549
|
|
|
91,565
|
|
|
62,318
|
|
|
74,253
|
|
|
55,440
|
|
|||||
|
2021
|
45,140
|
|
|
91,166
|
|
|
64,106
|
|
|
73,948
|
|
|
57,051
|
|
|||||
|
Thereafter
|
745,523
|
|
|
1,176,424
|
|
|
1,039,315
|
|
|
965,140
|
|
|
1,007,246
|
|
|||||
|
Total minimum payments
|
$
|
942,440
|
|
|
$
|
1,592,269
|
|
|
$
|
1,318,455
|
|
|
$
|
1,299,928
|
|
|
$
|
1,255,251
|
|
|
Less interest
|
(506,980
|
)
|
|
|
|
|
|
|
|
|
|||||||||
|
Present value of minimum capital lease payments (b)
|
$
|
435,460
|
|
|
|
|
|
|
|
|
|
||||||||
|
(a)
|
Represents future minimum rental payments and rental receipts for non-cancelable leases and subleases for the remainder of our 2017 fiscal year.
|
|
(b)
|
The present value of minimum capital lease payments of
$6,238
and
$429,222
are included in “Current portion of long-term debt” and “Long-term debt,” respectively.
|
|
|
July 2, 2017
|
|
January 1, 2017
|
||||
|
Land
|
$
|
271,775
|
|
|
$
|
271,160
|
|
|
Buildings and improvements
|
312,397
|
|
|
312,067
|
|
||
|
Restaurant equipment
|
1,491
|
|
|
1,507
|
|
||
|
|
585,663
|
|
|
584,734
|
|
||
|
Accumulated depreciation and amortization
|
(118,669
|
)
|
|
(110,166
|
)
|
||
|
|
$
|
466,994
|
|
|
$
|
474,568
|
|
|
|
July 2, 2017
|
|
January 1, 2017
|
||||
|
Future minimum rental receipts
|
$
|
634,085
|
|
|
$
|
401,452
|
|
|
Unearned interest income
|
(420,761
|
)
|
|
(277,747
|
)
|
||
|
Net investment in direct financing leases
|
213,324
|
|
|
123,705
|
|
||
|
Net current investment in direct financing leases (a)
|
(255
|
)
|
|
(101
|
)
|
||
|
Net non-current investment in direct financing leases (b)
|
$
|
213,069
|
|
|
$
|
123,604
|
|
|
(a)
|
Included in “Accounts and notes receivable, net.”
|
|
(b)
|
Included in “Net investment in direct financing leases.”
|
|
•
|
Same-Restaurant Sales - We report same-restaurant sales commencing after new restaurants have been open for 15 continuous months and as soon as reimaged restaurants reopen. This methodology is consistent with the metric used by our management for internal reporting and analysis. The table summarizing same-restaurant sales below in “Results of Operations” provides the same-restaurant sales percent changes. Same-restaurant sales exclude the impact of currency translation.
|
|
•
|
Restaurant Margin - We define restaurant margin as sales from Company-operated restaurants less cost of sales divided by sales from Company-operated restaurants. Cost of sales includes food and paper, restaurant labor and occupancy, advertising and other operating costs. Restaurant margin is influenced by factors such as restaurant openings, remodels and closures, price increases, the effectiveness of our advertising and marketing initiatives, featured products, product mix, the level of our fixed and semi-variable costs and fluctuations in food and labor costs.
|
|
•
|
Systemwide Sales - Systemwide sales is a non-GAAP financial measure, which includes sales by both Company-operated restaurants and franchised restaurants. Franchised restaurants’ sales are reported by our franchisees and represent their revenues from sales at franchised Wendy’s restaurants. The Company’s consolidated financial statements do not include sales by franchised restaurants to their customers. The Company believes systemwide sales data is useful in assessing consumer demand for the Company’s products, the overall success of the Wendy’s brand and, ultimately, the performance of the Company. The Company’s royalty revenues are computed as percentages of sales made by Wendy’s franchisees. As a result, sales by Wendy’s franchisees have a direct effect on the Company’s royalty revenues and therefore on the Company’s profitability.
|
|
|
Second Quarter
|
|
Six Months
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Sales
|
$
|
160.9
|
|
|
$
|
259.2
|
|
|
$
|
(98.3
|
)
|
|
$
|
309.1
|
|
|
$
|
518.6
|
|
|
$
|
(209.5
|
)
|
|
Franchise royalty revenue and fees
|
112.5
|
|
|
89.0
|
|
|
23.5
|
|
|
207.2
|
|
|
177.8
|
|
|
29.4
|
|
||||||
|
Franchise rental income
|
46.9
|
|
|
34.5
|
|
|
12.4
|
|
|
89.9
|
|
|
65.1
|
|
|
24.8
|
|
||||||
|
|
320.3
|
|
|
382.7
|
|
|
(62.4
|
)
|
|
606.2
|
|
|
761.5
|
|
|
(155.3
|
)
|
||||||
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cost of sales
|
129.4
|
|
|
202.6
|
|
|
(73.2
|
)
|
|
252.8
|
|
|
417.3
|
|
|
(164.5
|
)
|
||||||
|
Franchise rental expense
|
21.9
|
|
|
17.5
|
|
|
4.4
|
|
|
40.8
|
|
|
32.2
|
|
|
8.6
|
|
||||||
|
General and administrative
|
51.3
|
|
|
61.1
|
|
|
(9.8
|
)
|
|
103.7
|
|
|
125.8
|
|
|
(22.1
|
)
|
||||||
|
Depreciation and amortization
|
31.3
|
|
|
30.7
|
|
|
0.6
|
|
|
60.5
|
|
|
63.1
|
|
|
(2.6
|
)
|
||||||
|
System optimization losses (gains), net
|
41.0
|
|
|
(1.9
|
)
|
|
42.9
|
|
|
39.6
|
|
|
(10.4
|
)
|
|
50.0
|
|
||||||
|
Reorganization and realignment costs
|
17.7
|
|
|
2.5
|
|
|
15.2
|
|
|
17.9
|
|
|
5.7
|
|
|
12.2
|
|
||||||
|
Impairment of long-lived assets
|
0.2
|
|
|
5.5
|
|
|
(5.3
|
)
|
|
0.8
|
|
|
12.6
|
|
|
(11.8
|
)
|
||||||
|
Other operating expense (income), net
|
1.7
|
|
|
(0.9
|
)
|
|
2.6
|
|
|
3.6
|
|
|
(14.3
|
)
|
|
17.9
|
|
||||||
|
|
294.5
|
|
|
317.1
|
|
|
(22.6
|
)
|
|
519.7
|
|
|
632.0
|
|
|
(112.3
|
)
|
||||||
|
Operating profit
|
25.8
|
|
|
65.6
|
|
|
(39.8
|
)
|
|
86.5
|
|
|
129.5
|
|
|
(43.0
|
)
|
||||||
|
Interest expense
|
(28.9
|
)
|
|
(28.6
|
)
|
|
(0.3
|
)
|
|
(57.9
|
)
|
|
(56.7
|
)
|
|
(1.2
|
)
|
||||||
|
Other income, net
|
2.8
|
|
|
0.3
|
|
|
2.5
|
|
|
3.2
|
|
|
0.5
|
|
|
2.7
|
|
||||||
|
(Loss) income before income taxes
|
(0.3
|
)
|
|
37.3
|
|
|
(37.6
|
)
|
|
31.8
|
|
|
73.3
|
|
|
(41.5
|
)
|
||||||
|
Provision for income taxes
|
(1.5
|
)
|
|
(10.8
|
)
|
|
9.3
|
|
|
(11.3
|
)
|
|
(21.5
|
)
|
|
10.2
|
|
||||||
|
Net (loss) income
|
$
|
(1.8
|
)
|
|
$
|
26.5
|
|
|
$
|
(28.3
|
)
|
|
$
|
20.5
|
|
|
$
|
51.8
|
|
|
$
|
(31.3
|
)
|
|
|
Second Quarter
|
|
Six Months
|
||||||||||||||||||||||||
|
|
2017
|
|
% of
Total Revenues
|
|
2016
|
|
% of
Total Revenues
|
|
2017
|
|
% of
Total Revenues
|
|
2016
|
|
% of
Total Revenues
|
||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Sales
|
$
|
160.9
|
|
|
50.2
|
%
|
|
$
|
259.2
|
|
|
67.7
|
%
|
|
$
|
309.1
|
|
|
51.0
|
%
|
|
$
|
518.6
|
|
|
68.1
|
%
|
|
Franchise royalty revenue and fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Royalty revenue
|
94.1
|
|
|
29.4
|
%
|
|
86.3
|
|
|
22.6
|
%
|
|
181.3
|
|
|
29.9
|
%
|
|
167.0
|
|
|
21.9
|
%
|
||||
|
Franchise fees
|
18.4
|
|
|
5.7
|
%
|
|
2.7
|
|
|
0.7
|
%
|
|
25.9
|
|
|
4.3
|
%
|
|
10.8
|
|
|
1.4
|
%
|
||||
|
Total franchise royalty revenue and fees
|
112.5
|
|
|
35.1
|
%
|
|
89.0
|
|
|
23.3
|
%
|
|
207.2
|
|
|
34.2
|
%
|
|
177.8
|
|
|
23.3
|
%
|
||||
|
Franchise rental income
|
46.9
|
|
|
14.7
|
%
|
|
34.5
|
|
|
9.0
|
%
|
|
89.9
|
|
|
14.8
|
%
|
|
65.1
|
|
|
8.6
|
%
|
||||
|
Total revenues
|
$
|
320.3
|
|
|
100.0
|
%
|
|
$
|
382.7
|
|
|
100.0
|
%
|
|
$
|
606.2
|
|
|
100.0
|
%
|
|
$
|
761.5
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Second Quarter
|
|
Six Months
|
||||||||||||||||||||||||
|
|
2017
|
|
% of
Sales |
|
2016
|
|
% of
Sales |
|
2017
|
|
% of
Sales |
|
2016
|
|
% of
Sales |
||||||||||||
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Food and paper
|
$
|
50.3
|
|
|
31.2
|
%
|
|
$
|
78.4
|
|
|
30.2
|
%
|
|
$
|
95.3
|
|
|
30.8
|
%
|
|
$
|
157.6
|
|
|
30.4
|
%
|
|
Restaurant labor
|
45.8
|
|
|
28.5
|
%
|
|
70.8
|
|
|
27.3
|
%
|
|
90.2
|
|
|
29.2
|
%
|
|
146.8
|
|
|
28.3
|
%
|
||||
|
Occupancy, advertising and other operating costs
|
33.3
|
|
|
20.7
|
%
|
|
53.4
|
|
|
20.6
|
%
|
|
67.3
|
|
|
21.8
|
%
|
|
112.9
|
|
|
21.8
|
%
|
||||
|
Total cost of sales
|
$
|
129.4
|
|
|
80.4
|
%
|
|
$
|
202.6
|
|
|
78.1
|
%
|
|
$
|
252.8
|
|
|
81.8
|
%
|
|
$
|
417.3
|
|
|
80.5
|
%
|
|
|
Second Quarter
|
|
Six Months
|
||||||||||||||||||||||||
|
|
2017
|
|
% of
Sales
|
|
2016
|
|
% of
Sales
|
|
2017
|
|
% of
Sales
|
|
2016
|
|
% of
Sales
|
||||||||||||
|
Restaurant margin
|
$
|
31.5
|
|
|
19.6
|
%
|
|
$
|
56.6
|
|
|
21.9
|
%
|
|
$
|
56.3
|
|
|
18.2
|
%
|
|
$
|
101.3
|
|
|
19.5
|
%
|
|
|
Second Quarter
|
|
Six Months
|
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
|
Key business measures:
|
|
|
|
|
|
|
|
||||
|
North America same-restaurant sales:
|
|
|
|
|
|
|
|
||||
|
Company-operated
|
1.7
|
%
|
|
1.2
|
%
|
|
1.3
|
%
|
|
3.0
|
%
|
|
Franchised
|
3.3
|
%
|
|
0.3
|
%
|
|
2.5
|
%
|
|
1.8
|
%
|
|
Systemwide
|
3.2
|
%
|
|
0.4
|
%
|
|
2.4
|
%
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
|
||||
|
Total same-restaurant sales:
|
|
|
|
|
|
|
|
||||
|
Company-operated
|
1.7
|
%
|
|
1.2
|
%
|
|
1.3
|
%
|
|
3.0
|
%
|
|
Franchised (a)
|
3.3
|
%
|
|
0.2
|
%
|
|
2.6
|
%
|
|
1.7
|
%
|
|
Systemwide (a)
|
3.2
|
%
|
|
0.3
|
%
|
|
2.5
|
%
|
|
1.8
|
%
|
|
|
Second Quarter
|
|
Six Months
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
Key business measures (continued):
|
|
|
|
|
|
|
|
||||||||
|
Systemwide sales: (a)
|
|
|
|
|
|
|
|
||||||||
|
Company-operated
|
$
|
160.9
|
|
|
$
|
259.2
|
|
|
$
|
309.1
|
|
|
$
|
518.6
|
|
|
North America franchised
|
2,360.3
|
|
|
2,167.3
|
|
|
4,549.8
|
|
|
4,183.6
|
|
||||
|
International franchised (b)
|
118.8
|
|
|
103.5
|
|
|
231.2
|
|
|
202.7
|
|
||||
|
Global systemwide sales
|
$
|
2,640.0
|
|
|
$
|
2,530.0
|
|
|
$
|
5,090.1
|
|
|
$
|
4,904.9
|
|
|
(a)
|
During the second quarter of 2017 and 2016, North America systemwide sales increased 4.1% and 1.8%, respectively, international franchised sales increased 16.4% and 2.5%, respectively, and global systemwide sales increased 4.6% and 1.8%, respectively, on a constant currency basis. During the first six months of 2017 and 2016, North America systemwide sales increased 3.4% and 3.5%, respectively, international franchised sales increased 15.2% and 1.7%, respectively, and global systemwide sales increased 3.9% and 3.4%, respectively, on a constant currency basis.
|
|
(b)
|
Excludes Venezuela due to the impact of Venezuela’s highly inflationary economy.
|
|
|
Second Quarter
|
|||||||
|
|
Company-operated
|
|
Franchised
|
|
Systemwide
|
|||
|
Restaurant count:
|
|
|
|
|
|
|||
|
Restaurant count at April 2, 2017
|
331
|
|
|
6,220
|
|
|
6,551
|
|
|
Opened
|
2
|
|
|
33
|
|
|
35
|
|
|
Closed
|
(2
|
)
|
|
(20
|
)
|
|
(22
|
)
|
|
Restaurant count at July 2, 2017
|
331
|
|
|
6,233
|
|
|
6,564
|
|
|
|
|
|
|
|
|
|||
|
|
Six Months
|
|||||||
|
|
Company-operated
|
|
Franchised
|
|
Systemwide
|
|||
|
|
|
|
|
|
|
|||
|
Restaurant count at January 1, 2017
|
330
|
|
|
6,207
|
|
|
6,537
|
|
|
Opened
|
3
|
|
|
65
|
|
|
68
|
|
|
Closed
|
(2
|
)
|
|
(39
|
)
|
|
(41
|
)
|
|
Restaurant count at July 2, 2017
|
331
|
|
|
6,233
|
|
|
6,564
|
|
|
Sales
|
Change
|
||||||
|
|
Second Quarter
|
|
Six
Months
|
||||
|
Sales
|
$
|
(98.3
|
)
|
|
$
|
(209.5
|
)
|
|
Franchise Royalty Revenue and Fees
|
Change
|
||||||
|
|
Second Quarter
|
|
Six
Months
|
||||
|
Royalty revenue
|
$
|
7.8
|
|
|
$
|
14.3
|
|
|
Franchise fees
|
15.7
|
|
|
15.1
|
|
||
|
|
$
|
23.5
|
|
|
$
|
29.4
|
|
|
Franchise Rental Income
|
Change
|
||||||
|
|
Second Quarter
|
|
Six
Months
|
||||
|
Franchise rental income
|
$
|
12.4
|
|
|
$
|
24.8
|
|
|
Cost of Sales, as a Percent of Sales
|
Change
|
||||
|
|
Second Quarter
|
|
Six
Months
|
||
|
Food and paper
|
1.0
|
%
|
|
0.4
|
%
|
|
Restaurant labor
|
1.2
|
%
|
|
0.9
|
%
|
|
Occupancy, advertising and other operating costs
|
0.1
|
%
|
|
—
|
%
|
|
|
2.3
|
%
|
|
1.3
|
%
|
|
Franchise Rental Expense
|
Change
|
||||||
|
|
Second Quarter
|
|
Six
Months
|
||||
|
Franchise rental expense
|
$
|
4.4
|
|
|
$
|
8.6
|
|
|
General and Administrative
|
Change
|
||||||
|
|
Second Quarter
|
|
Six
Months
|
||||
|
Professional services
|
$
|
(1.2
|
)
|
|
$
|
(6.2
|
)
|
|
Employee compensation and related expenses
|
(3.0
|
)
|
|
(5.5
|
)
|
||
|
Incentive compensation
|
(1.1
|
)
|
|
(3.1
|
)
|
||
|
Severance
|
(2.4
|
)
|
|
(2.8
|
)
|
||
|
Share-based compensation
|
(0.7
|
)
|
|
(2.2
|
)
|
||
|
Legal reserves
|
(0.4
|
)
|
|
(1.6
|
)
|
||
|
Other, net
|
(1.0
|
)
|
|
(0.7
|
)
|
||
|
|
$
|
(9.8
|
)
|
|
$
|
(22.1
|
)
|
|
Depreciation and Amortization
|
Change
|
||||||
|
|
Second Quarter
|
|
Six
Months
|
||||
|
Restaurants
|
$
|
(0.6
|
)
|
|
$
|
(4.6
|
)
|
|
Corporate and other
|
1.2
|
|
|
2.0
|
|
||
|
|
$
|
0.6
|
|
|
$
|
(2.6
|
)
|
|
System Optimization Losses (Gains), Net
|
Second Quarter
|
|
Six Months
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
System optimization losses (gains), net
|
$
|
41.0
|
|
|
$
|
(1.9
|
)
|
|
$
|
39.6
|
|
|
$
|
(10.4
|
)
|
|
Reorganization and Realignment Costs
|
Second Quarter
|
|
Six Months
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
System optimization initiative
|
$
|
0.5
|
|
|
$
|
2.1
|
|
|
$
|
0.7
|
|
|
$
|
4.8
|
|
|
G&A realignment - November 2014 plan
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.9
|
|
||||
|
G&A realignment - May 2017 plan
|
17.2
|
|
|
—
|
|
|
17.2
|
|
|
—
|
|
||||
|
|
$
|
17.7
|
|
|
$
|
2.5
|
|
|
$
|
17.9
|
|
|
$
|
5.7
|
|
|
Impairment of Long-Lived Assets
|
Change
|
||||||
|
|
Second Quarter
|
|
Six
Months
|
||||
|
Impairment of long-lived assets
|
$
|
(5.3
|
)
|
|
$
|
(11.8
|
)
|
|
Other Operating Expense (Income), Net
|
Second Quarter
|
|
Six Months
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
Lease buyout
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
(11.6
|
)
|
|
Equity in earnings in joint ventures, net
|
(1.9
|
)
|
|
(2.4
|
)
|
|
(3.8
|
)
|
|
(4.3
|
)
|
||||
|
Other, net
|
3.8
|
|
|
1.5
|
|
|
7.6
|
|
|
1.6
|
|
||||
|
|
$
|
1.7
|
|
|
$
|
(0.9
|
)
|
|
$
|
3.6
|
|
|
$
|
(14.3
|
)
|
|
Interest Expense
|
Change
|
||||||
|
|
Second Quarter
|
|
Six
Months
|
||||
|
Interest expense
|
$
|
0.3
|
|
|
$
|
1.2
|
|
|
Provision for Income Taxes
|
Second Quarter
|
|
Six Months
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Loss) income before income taxes
|
$
|
(0.3
|
)
|
|
$
|
37.3
|
|
|
$
|
31.8
|
|
|
$
|
73.3
|
|
|
Provision for income taxes
|
1.5
|
|
|
10.8
|
|
|
11.3
|
|
|
21.5
|
|
||||
|
Effective tax rate on (loss) income
|
NM
|
|
|
29.0
|
%
|
|
35.6
|
%
|
|
29.2
|
%
|
||||
|
•
|
capital expenditures of approximately
$52.9 million
, resulting in total anticipated cash capital expenditures for the year of approximately
$85.0 million
.
|
|
•
|
cash dividends aggregating up to approximately
$34.1 million
as discussed below in “Dividends;” and
|
|
•
|
potential stock repurchases of up to
$97.6 million
, of which
$14.3 million
was repurchased subsequent to
July 2, 2017
through
August 3, 2017
as discussed below in “Stock Repurchases.”
|
|
|
Six Months
|
||||||||||
|
|
2017
|
|
2016
|
|
Change
|
||||||
|
Net cash provided by (used in):
|
|
|
|
|
|
||||||
|
Operating activities
|
$
|
120.6
|
|
|
$
|
105.8
|
|
|
$
|
14.8
|
|
|
Investing activities
|
(21.5
|
)
|
|
(22.1
|
)
|
|
0.6
|
|
|||
|
Financing activities
|
(96.0
|
)
|
|
(150.1
|
)
|
|
54.1
|
|
|||
|
Effect of exchange rate changes on cash
|
3.2
|
|
|
5.4
|
|
|
(2.2
|
)
|
|||
|
Net increase (decrease) in cash and cash equivalents
|
$
|
6.3
|
|
|
$
|
(61.0
|
)
|
|
$
|
67.3
|
|
|
•
|
competition, including pricing pressures, couponing, aggressive marketing and the potential impact of competitors’ new unit openings on sales of Wendy’s restaurants;
|
|
•
|
consumers’ perceptions of the relative quality, variety, affordability and value of the food products we offer;
|
|
•
|
food safety events, including instances of food-borne illness (such as salmonella or E. coli) involving Wendy’s or its supply chain;
|
|
•
|
consumer concerns over nutritional aspects of beef, poultry, french fries or other products we sell, concerns regarding the ingredients in our products and/or cooking processes used in our restaurants, or concerns regarding the effects of disease outbreaks, epidemics or pandemics impacting the Company’s customers or food supplies;
|
|
•
|
the effects of negative publicity that can occur from increased use of social media;
|
|
•
|
success of operating and marketing initiatives, including advertising and promotional efforts and new product and concept development by us and our competitors;
|
|
•
|
the impact of general economic conditions and increases in unemployment rates on consumer spending, particularly in geographic regions that contain a high concentration of Wendy’s restaurants;
|
|
•
|
changes in consumer tastes and preferences, and in discretionary consumer spending;
|
|
•
|
changes in spending patterns and demographic trends, such as the extent to which consumers eat meals away from home;
|
|
•
|
certain factors affecting our franchisees, including the business and financial viability of franchisees, the timely payment of such franchisees’ obligations due to us or to national or local advertising organizations, and the ability of our franchisees to open new restaurants and remodel existing restaurants in accordance with their development and franchise commitments, including their ability to finance restaurant development and remodels;
|
|
•
|
increased labor costs due to competition or increased minimum wage or employee benefit costs;
|
|
•
|
changes in commodity costs (including beef, chicken and corn), labor, supplies, fuel, utilities, distribution and other operating costs;
|
|
•
|
availability, location and terms of sites for restaurant development by us and our franchisees;
|
|
•
|
development costs, including real estate and construction costs;
|
|
•
|
delays in opening new restaurants or completing reimages of existing restaurants, including risks associated with the Image Activation program;
|
|
•
|
the timing and impact of acquisitions and dispositions of restaurants;
|
|
•
|
anticipated or unanticipated restaurant closures by us and our franchisees;
|
|
•
|
our ability to identify, attract and retain potential franchisees with sufficient experience and financial resources to develop and operate Wendy’s restaurants successfully;
|
|
•
|
availability of qualified restaurant personnel to us and to our franchisees, and the ability to retain such personnel;
|
|
•
|
our ability, if necessary, to secure alternative distribution of supplies of food, equipment and other products to Wendy’s restaurants at competitive rates and in adequate amounts, and the potential financial impact of any interruptions in such distribution;
|
|
•
|
availability and cost of insurance;
|
|
•
|
adverse weather conditions;
|
|
•
|
availability, terms (including changes in interest rates) and deployment of capital;
|
|
•
|
changes in, and our ability to comply with, legal, regulatory or similar requirements, including franchising laws, payment card industry rules, overtime rules, minimum wage rates, wage and hour laws, government-mandated health care benefits, tax legislation, federal ethanol policy and accounting standards (including the amended guidance for revenue recognition that will become effective for the Company’s 2018 fiscal year and the new guidance on leases that will become effective for fiscal 2019);
|
|
•
|
the costs, uncertainties and other effects of legal, environmental and administrative proceedings;
|
|
•
|
the effects of charges for impairment of goodwill or for the impairment of other long-lived assets;
|
|
•
|
the effects of war or terrorist activities;
|
|
•
|
risks associated with failures, interruptions or security breaches of the Company’s computer systems or technology, or the occurrence of cyber incidents or a deficiency in cybersecurity that impacts the Company or its franchisees, including the cybersecurity incident described in Item 1 below;
|
|
•
|
the difficulty in predicting the impact of the sale of Company-operated restaurants to franchisees on ongoing operations, any tax impact from the sale of restaurants and the future impact to the Company’s earnings, restaurant operating margins, cash flow and depreciation;
|
|
•
|
the difficulty in predicting the ultimate costs that will be incurred in connection with the Company’s plan to reduce its general and administrative expense, and the future impact on the Company’s earnings;
|
|
•
|
risks associated with the Company’s securitized financing facility, including the ability to generate sufficient cash flow to meet increased debt service obligations, compliance with operational and financial covenants, and restrictions on the Company’s ability to raise additional capital;
|
|
•
|
risks associated with the amount and timing of share repurchases under the $150.0 million share repurchase program approved by the Board of Directors; and
|
|
•
|
other risks and uncertainties affecting us and our subsidiaries referred to in our Annual Report on Form 10-K for the fiscal year ended January 1, 2017 (the “Form 10-K”) (see especially “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”) and in our other current and periodic filings with the Securities and Exchange Commission.
|
|
Period
|
Total Number of Shares Purchased (1)
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plans
|
Approximate Dollar
Value of Shares
that May Yet Be
Purchased Under
the Plans (2)
|
||||||
|
April 3, 2017
through May 7, 2017 |
809,065
|
|
|
$13.97
|
|
803,427
|
|
|
$120,982,172
|
|
|
May 8, 2017
through June 4, 2017 |
589,217
|
|
|
$16.15
|
|
554,675
|
|
|
$112,028,027
|
|
|
June 5, 2017
through July 2, 2017 |
951,049
|
|
|
$15.51
|
|
934,666
|
|
|
$97,551,816
|
|
|
Total
|
2,349,331
|
|
|
$15.14
|
|
2,292,768
|
|
|
$97,551,816
|
|
|
(1)
|
Includes
56,563
shares reacquired by the Company from holders of share-based awards to satisfy certain requirements associated with the vesting or exercise of the respective awards. The shares were valued at the average of the high and low trading prices of our common stock on the vesting or exercise date of such awards.
|
|
(2)
|
In February 2017, our Board of Directors authorized the repurchase of up to
$150 million
of our common stock through March 4, 2018, when and if market conditions warrant and to the extent legally permissible.
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EXHIBIT NO.
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DESCRIPTION
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31.1
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31.2
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32.1
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101.INS
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XBRL Instance Document*
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101.SCH
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XBRL Taxonomy Extension Schema Document*
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document*
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document*
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document*
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document*
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*
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Filed herewith.
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THE WENDY’S COMPANY
(Registrant)
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Date: August 9, 2017
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By:
/s/ Gunther Plosch
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Gunther Plosch
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Chief Financial Officer
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(On behalf of the Company)
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Date: August 9, 2017
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By:
/s/ Scott A. Kriss
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Scott A. Kriss
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Senior Vice President,
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Chief Accounting and Tax Officer
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(Principal Accounting Officer)
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EXHIBIT NO.
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DESCRIPTION
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31.1
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31.2
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32.1
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101.INS
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XBRL Instance Document*
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101.SCH
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XBRL Taxonomy Extension Schema Document*
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document*
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document*
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document*
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document*
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*
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Filed herewith.
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No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|---|---|---|
In determining that nine of our ten directors are independent, our Board of Directors did not identify any material relationship that would potentially cause Mses. Carter and Ricciardello and Messrs. Beckwitt, Damiris, Gregorio, Ellen, Nicolais, Powers and Stewart not to be independent for purposes of the Exchange Act or the corporate governance rules of the NYSE. Our Board of Directors considered the fact that Mr. Powers served as Chief Executive Officer of the Company until July 1, 2019 and thereafter entered into an Advisory Agreement with the Company which expired in March 31, 2020—but determined that over three years have passed since the expiration of the Advisory Agreement, and Mr. Powers does not have other ties with the company that the Board of Directors considers to affect his independence. | |||
During fiscal year 2024, we experienced two retirements involving our Named Executive Officers, each as contemplated by our ongoing succession planning. Effective on June 1, 2023, Steven L. Wentzel retired from his position as President of American Gypsum, and effective July 3, 2023, Robert S. Stewart retired from his position as Executive Vice President – Strategy, Corporate Development and Communications. Their respective successors were in position at the time of their retirement to ensure a smooth transition of their duties. | |||
The positions of Chairman of the Board and Chief Executive Officer (“CEO”) are performed by two different individuals. Mr. Haack, our CEO, focuses on the day-to-day operation of the Company’s businesses and also participates in long-term strategy and development. Mr. Nicolais, our Chairman, oversees the Company’s general strategic direction and leads and manages the Board. In particular, Mr. Nicolais (i) presides at Board meetings; (ii) approves agendas and adds agenda items for Board meetings and meetings of independent directors; (iii) acts as liaison between independent directors and the CEO; (iv) presides over executive sessions of independent directors; (v) where appropriate, engages and consults with major shareholders and other constituencies; (vi) meets one-on-one with the CEO following executive sessions of independent directors; and (vii) guides the Board in its consideration of CEO succession. | |||
The positions of Chairman of the Board and Chief Executive Officer (“CEO”) are performed by two different individuals. Mr. Haack, our CEO, focuses on the day-to-day operation of the Company’s businesses and also participates in long-term strategy and development. Mr. Nicolais, our Chairman, oversees the Company’s general strategic direction and leads and manages the Board. In particular, Mr. Nicolais (i) presides at Board meetings; (ii) approves agendas and adds agenda items for Board meetings and meetings of independent directors; (iii) acts as liaison between independent directors and the CEO; (iv) presides over executive sessions of independent directors; (v) where appropriate, engages and consults with major shareholders and other constituencies; (vi) meets one-on-one with the CEO following executive sessions of independent directors; and (vii) guides the Board in its consideration of CEO succession. | |||
In determining that nine of our ten directors are independent, our Board of Directors did not identify any material relationship that would potentially cause Mses. Carter and Ricciardello and Messrs. Beckwitt, Damiris, Gregorio, Ellen, Nicolais, Powers and Stewart not to be independent for purposes of the Exchange Act or the corporate governance rules of the NYSE. Our Board of Directors considered the fact that Mr. Powers served as Chief Executive Officer of the Company until July 1, 2019 and thereafter entered into an Advisory Agreement with the Company which expired in March 31, 2020—but determined that over three years have passed since the expiration of the Advisory Agreement, and Mr. Powers does not have other ties with the company that the Board of Directors considers to affect his independence. | |||
All of the Audit Committee members are independent as defined in the current NYSE listing standards and the applicable rules of the Securities Exchange Act of 1934, and Mr. Ellen is our “audit committee financial expert” within the meaning of the rules of the SEC. The Audit Committee charter sets forth the duties and responsibilities of the Audit Committee. The Audit Committee is primarily responsible for assisting the Board in fulfilling its responsibility to oversee the following: the integrity of our financial statements, our compliance with legal and regulatory requirements, the qualifications and independence and appointment of our independent auditors and the performance of our internal audit function and independent auditors. Management has primary responsibility for the preparation of the financial statements, completeness and accuracy of financial reporting and the overall system of internal control over financial reporting. | |||
All of the Audit Committee members are independent as defined in the current NYSE listing standards and the applicable rules of the Securities Exchange Act of 1934, and Mr. Ellen is our “audit committee financial expert” within the meaning of the rules of the SEC. The Audit Committee charter sets forth the duties and responsibilities of the Audit Committee. The Audit Committee is primarily responsible for assisting the Board in fulfilling its responsibility to oversee the following: the integrity of our financial statements, our compliance with legal and regulatory requirements, the qualifications and independence and appointment of our independent auditors and the performance of our internal audit function and independent auditors. Management has primary responsibility for the preparation of the financial statements, completeness and accuracy of financial reporting and the overall system of internal control over financial reporting. | |||
Margot L. Carter Director Since: 2017 Age: 53 Committees: Compensation Governance Other Public Boards: Installed Building Products, Inc. | |||
In determining that nine of our ten directors are independent, our Board of Directors did not identify any material relationship that would potentially cause Mses. Carter and Ricciardello and Messrs. Beckwitt, Damiris, Gregorio, Ellen, Nicolais, Powers and Stewart not to be independent for purposes of the Exchange Act or the corporate governance rules of the NYSE. Our Board of Directors considered the fact that Mr. Powers served as Chief Executive Officer of the Company until July 1, 2019 and thereafter entered into an Advisory Agreement with the Company which expired in March 31, 2020—but determined that over three years have passed since the expiration of the Advisory Agreement, and Mr. Powers does not have other ties with the company that the Board of Directors considers to affect his independence. | |||
In determining that nine of our ten directors are independent, our Board of Directors did not identify any material relationship that would potentially cause Mses. Carter and Ricciardello and Messrs. Beckwitt, Damiris, Gregorio, Ellen, Nicolais, Powers and Stewart not to be independent for purposes of the Exchange Act or the corporate governance rules of the NYSE. Our Board of Directors considered the fact that Mr. Powers served as Chief Executive Officer of the Company until July 1, 2019 and thereafter entered into an Advisory Agreement with the Company which expired in March 31, 2020—but determined that over three years have passed since the expiration of the Advisory Agreement, and Mr. Powers does not have other ties with the company that the Board of Directors considers to affect his independence. |
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Name and Principal
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Fiscal
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Salary
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Stock
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Option
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Non-Equity
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All Other
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Total
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||||||
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Michael R. Haack |
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2024 |
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1,040,000 |
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4,800,000 |
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— |
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2,107,341 |
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108,736 |
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8,056,077 |
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President and Chief |
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2023 |
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1,000,000 |
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3,375,000 |
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1,125,000 |
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2,012,014 |
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102,774 |
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7,614,788 |
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Executive Officer |
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2022 |
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900,000 |
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4,000,000 |
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— |
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1,641,881 |
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93,869 |
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6,635,750 |
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D. Craig Kesler |
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2024 |
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590,000 |
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1,300,000 |
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— |
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1,016,039 |
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62,703 |
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2,968,742 |
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Executive Vice President - |
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2023 |
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515,036 |
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750,000 |
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250,000 |
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1,257,509 |
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57,063 |
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2,829,608 |
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Finance and Administration |
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2022 |
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500,035 |
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1,000,000 |
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— |
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1,260,730 |
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55,938 |
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2,816,703 |
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& Chief Financial Officer |
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Matt Newby |
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2024 |
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475,000 |
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750,000 |
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— |
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564,466 |
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49,497 |
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1,838,963 |
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Executive Vice President |
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2023 |
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392,268 |
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700,000 |
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— |
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462,209 |
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41,398 |
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1,595,875 |
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General Counsel and |
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||||||
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Secretary |
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||||||
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Eric Cribbs |
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2024 |
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346,286 |
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500,000 |
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— |
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443,260 |
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39,904 |
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1,329,450 |
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President - American |
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||||||
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Gypsum Company |
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||||||
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Tony Thompson |
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2024 |
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323,912 |
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450,000 |
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— |
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329,169 |
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38,124 |
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1,141,205 |
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Senior Vice President - |
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||||||
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Cement East |
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||||||
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Robert S. Stewart |
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2024 |
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148,449 |
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2,203,870 |
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— |
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— |
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— |
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2,352,319 |
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Retired Executive Vice |
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2023 |
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494,833 |
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900,000 |
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— |
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1,066,637 |
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49,783 |
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2,511,253 |
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President - Strategy, Corporate |
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2022 |
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480,420 |
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900,000 |
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— |
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1,084,814 |
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48,702 |
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2,513,936 |
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Development & Communications |
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||||||
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Steven L. Wentzel |
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2024 |
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59,697 |
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1,469,304 |
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56,115 |
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— |
|
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— |
|
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1,585,116 |
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Retired President - |
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2023 |
|
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350,100 |
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|
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600,000 |
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— |
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675,000 |
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37,694 |
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1,662,794 |
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American Gypsum Company |
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2022 |
|
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339,900 |
|
|
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600,000 |
|
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— |
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672,047 |
|
|
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36,862 |
|
|
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1,648,809 |
|
No Customers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|---|---|---|
| Haack Michael | - | 104,229 | 0 |
| Haack Michael | - | 80,539 | 0 |
| Kesler Dale Craig | - | 62,610 | 160 |
| Kesler Dale Craig | - | 60,488 | 160 |
| NICOLAIS MICHAEL R | - | 48,395 | 1,386 |
| Devlin William R | - | 26,159 | 1,943 |
| Newby Matt | - | 21,819 | 0 |
| BECKWITT RICHARD | - | 20,941 | 0 |
| Devlin William R | - | 20,682 | 1,936 |
| Newby Matt | - | 19,898 | 0 |
| Cribbs Eric | - | 15,654 | 0 |
| STEWART ROBERT S | - | 13,547 | 0 |
| Thompson Tony | - | 13,212 | 0 |
| Thompson Tony | - | 13,043 | 0 |
| Cribbs Eric | - | 12,937 | 0 |
| RICCIARDELLO MARY P | - | 8,804 | 0 |
| Damiris George John | - | 7,943 | 0 |
| STEWART RICHARD ROSS | - | 4,028 | 2,817 |
| Haddock Alex | - | 3,105 | 0 |
| Rush David E | - | 2,000 | 0 |
| Gregorio Mauro | - | 1,000 | 4,717 |
| Powers David B | - | 655 | 18,009 |