Wendy's 2010 Annual Report Download - page 2

2010 was a productive year for the Company as we strength-
ened Wendy’s® core business for future growth, made progress
on the early stages of Arby’s® turnaround and produced
$396.9 million in adjusted earnings before interest, taxes,
depreciation and amor ti zation (EBITDA).1
Our adjusted EBITDA fell about 4% on a comparable basis
and our stock price traded in a range of $3.83 to $5.55 during
the year. To improve our ability to grow both earnings and
stockholder value, we made the strategic decision to focus our
resources on continuing to build the Wendy’s brand. As a
result, on January 20, 2011, we announced that we are explor-
ing strategic alternatives for Arby’s, including a sale of the
brand. We believe in the long-term success of Arby’s, but we
also believe that the Wendy’s brand, given its relative size and
scope, will be our key driver of earnings growth and stock-
holder return.
Wendy’s currently has more than 6,500 restaurants worldwide
and is one of the most attractive growth stories in the quick-
service restaurant (QSR) industry. We will focus our energies
on growing the Wendy’s brand via new store growth both in
North American and international markets and with increased
same-store sales through the introduction of new dayparts and
core menu innovation.
In 2010, we focused on brand building and strengthening
Wendy’s ’Real’ positioning with innovative, great-tasting, high-
quality premium and value products that are made with real
and fresh ingredients. We also invested in initiatives such as the
launch of our new breakfast menu and restaurant remodels,
and we added to our pipeline for international expansion by
signing significant new development agreements.
WENDY’S UPGRADING CORE MENU
During 2010, we upgraded our core menu to reinforce our qual-
ity reputation with consumers:
• We introduced four premium entree salads—Apple Pecan
Chicken, BLT Cobb, Spicy Chicken Caesar and Baja—each
with 11 different greens. We also paired smaller sizes
of the salads with Wendy’s classic sides such as baked
potatoes, chili and fries.
• We launched new natural-cut, skin-on fries, made from
premium Russet potatoes, with sea salt.
• We introduced a new everyday value platform called
“My 99,” which offers consumers the choice of several of
our great products at a value price of 99 cents each.
• To further enhance our core hamburger product, we
began testing a new premium cheeseburger line called
“Dave’s Hot ‘N Juicy Cheeseburgers,” which consists of a
40% thicker patty made from fresh beef, melted cheese,
crinkle-cut pickles, red onions and a butter-toasted bun. We
believe these will be the best cheeseburgers in the QSR
industry and plan to introduce this product line in the
second half of 2011.
DEAR FELLOW STOCKHOLDERS:
Wendy’s/Arby’s Group, Inc. is the third largest quick-service restau-
rant company in the United States and includes Wendy’s International, Inc., the
franchisor of the Wendy’s® restaurant system, and Arby’s Restaurant Group, Inc.,
the franchisor of the Arby’s® restaurant system. The combined restaurant systems
include more than 10,000 restaurants in the U.S. and 26 other
countries and U.S. territories worldwide as of March 2011.
1See Selected Financial Data and Reconciliation of EBITDA to adjusted EBITDA following this letter to stockholders.
Wendy’s/Arby’s Group, Inc. 2010 Annual Report