Company Increases Quarterly Dividend to 12 Cents
The Wendy’s Company (Nasdaq: WEN) today reported unaudited results for the second quarter ended July 4, 2021.
“We are thrilled to once again increase our 2021 financial outlook across all key financial metrics, driven by a transformative quarter that showcased our continued momentum and the overall strength of our business,” President and Chief Executive Officer Todd Penegor said. “Our robust growth continued in the second quarter, as sales significantly exceeded our expectations, leading to restaurant level margins of more than 20 percent and record profits, fueling our restaurant economic model. We are also excited to meaningfully increase our 2025 Global restaurant target to 8,500 to 9,000, driven by a development commitment with REEF Kitchens, a new build to suit development fund, and incremental commitments through our latest new restaurant incentive program. Our business momentum, strong partnership and health of our franchisees, and the dedication of our restaurant crew and support center teams reaffirms our confidence that we will achieve our vision of becoming the world’s most thriving and beloved restaurant brand.”
Second Quarter 2021 Summary
|
Operational Highlights |
Second Quarter |
Year-to-Date |
|||||
|
2021 |
2020 |
2021 |
2020 |
||||
|
Systemwide Sales Growth(1) |
|||||||
|
U.S. |
20.6% |
(4.0)% |
16.9% |
(1.6)% |
|||
|
International(2) |
48.2% |
(24.5)% |
25.6% |
(12.4)% |
|||
|
Global |
22.9% |
(6.2)% |
17.7% |
(2.7)% |
|||
|
Same-Restaurant Sales Growth(1) |
|||||||
|
U.S. |
16.1% |
(4.4)% |
14.9% |
(2.3)% |
|||
|
International(2) |
31.4% |
(18.4)% |
19.0% |
(10.1)% |
|||
|
Global |
17.4% |
(5.8)% |
15.2% |
(3.1)% |
|||
|
Systemwide Sales (In US$ Millions)(3) |
|||||||
|
U.S. |
$2,897 |
$2,403 |
$5,545 |
$4,744 |
|||
|
International(2) |
$354 |
$220 |
$657 |
$493 |
|||
|
Global |
$3,251 |
$2,624 |
$6,202 |
$5,237 |
|||
|
Restaurant Openings |
|||||||
|
U.S. – Total / Net |
22 / 10 |
19 / 1 |
42 / 14 |
46 / 10 |
|||
|
International – Total / Net |
21 / 18 |
3 / 0 |
39 / 24 |
17 / 8 |
|||
|
Global – Total / Net |
43 / 28 |
22 / 1 |
81 / 38 |
63 / 18 |
|||
|
Global Reimaging Completion Percentage |
68% |
61% |
|||||
|
(1) Systemwide sales growth and same-restaurant sales growth are calculated on a constant currency basis and include sales by both Company-operated and franchise restaurants. |
|||||||
|
(2) Excludes Venezuela and Argentina. |
|||||||
|
(3) Systemwide sales include sales at both Company-operated and franchise restaurants. |
|||||||
|
Financial Highlights |
Second Quarter |
Year-to-Date |
|||||||||||||||||||
|
2021 |
2020 |
B / (W) |
2021 |
2020 |
B / (W) |
||||||||||||||||
|
(In Millions Except Per Share Amounts) |
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
|
Total Revenues |
$ |
493.3 |
$ |
402.3 |
22.6 |
% |
$ |
953.5 |
$ |
807.3 |
18.1 |
% |
|||||||||
|
Adjusted Revenues(1) |
$ |
391.1 |
$ |
324.2 |
20.6 |
% |
$ |
761.8 |
$ |
650.6 |
17.1 |
% |
|||||||||
|
Company-Operated Restaurant Margin |
20.3% |
14.4% |
5.9 |
% |
18.7% |
12.2% |
6.5 |
% |
|||||||||||||
|
General and Administrative Expense |
$ |
63.1 |
$ |
48.6 |
(29.9) |
% |
$ |
115.7 |
$ |
100.2 |
(15.5) |
% |
|||||||||
|
Operating Profit |
$ |
126.7 |
$ |
60.7 |
108.9 |
% |
$ |
209.9 |
$ |
109.4 |
91.9 |
% |
|||||||||
|
Net Income |
$ |
65.7 |
$ |
24.9 |
163.9 |
% |
$ |
107.1 |
$ |
39.3 |
172.5 |
% |
|||||||||
|
Adjusted EBITDA |
$ |
131.1 |
$ |
97.4 |
34.5 |
% |
$ |
252.1 |
$ |
186.8 |
35.0 |
% |
|||||||||
|
Reported Diluted Earnings Per Share |
$ |
0.29 |
$ |
0.11 |
163.6 |
% |
$ |
0.47 |
$ |
0.17 |
176.5 |
% |
|||||||||
|
Adjusted Earnings Per Share |
$ |
0.27 |
$ |
0.12 |
125.0 |
% |
$ |
0.47 |
$ |
0.21 |
123.8 |
% |
|||||||||
|
Cash Flows from Operations |
$ |
158.8 |
$ |
30.6 |
nm |
||||||||||||||||
|
Capital Expenditures |
$ |
(24.1) |
$ |
(29.4) |
18.0 |
% |
|||||||||||||||
|
Free Cash Flow(2) |
$ |
185.8 |
$ |
12.7 |
nm |
||||||||||||||||
|
(1) Total revenues less advertising funds revenue. |
|||||||||||||||||||||
|
(2) Cash flows from operations minus capital expenditures, the impact of our advertising funds and cash paid for taxes related to the disposition of the New York market in Q2 2021. |
|||||||||||||||||||||
Second Quarter Financial Highlights
Total Revenues
The increase in revenues was primarily driven by higher sales at Company-operated restaurants, an increase in franchise royalty revenue, and an increase in advertising funds. These increases were primarily driven by positive same-restaurant sales. Revenues also increased due to higher franchise fees primarily as the result of the Company’s new technology fee that was implemented in 2021.
Adjusted Revenues
The increase in adjusted revenues was primarily driven by higher sales at Company-operated restaurants and an increase in franchise royalty revenue. These increases were primarily driven by positive same-restaurant sales. Revenues also increased due to higher franchise fees primarily as the result of the Company’s new technology fee that was implemented in 2021.
Company-Operated Restaurant Margin
The increase in Company-operated restaurant margin was primarily the result of increased customer counts, a higher average check, and lapping recognition pay where the Company increased pay for all restaurant level employees by 10% for April and May in the prior year. The increase was partially offset by labor rate increases and higher commodity costs.
General and Administrative Expense
The increase in general and administrative expense was primarily driven by higher incentive and stock compensation accruals and technology costs primarily related to the Company’s ERP implementation.
Operating Profit
The increase in operating profit resulted primarily from higher franchise royalty revenue and fees, system optimization gains primarily related to the sale of the New York market, and an increase in Company-operated restaurant margin. These increases were partially offset by higher general and administrative expense.
Net Income
The increase in net income resulted primarily from higher operating profit. This was partially offset by a loss on early extinguishment of debt that the Company incurred as part of its debt refinancing completed in the second quarter of 2021.
Adjusted EBITDA
The increase in adjusted EBITDA resulted primarily from higher franchise royalty revenue and fees and an increase in Company-operated restaurant margin. These increases were partially offset by higher general and administrative expense.
Adjusted Earnings Per Share
The increase in adjusted earnings per share was primarily driven by an increase in adjusted EBITDA.
Year to Date Free Cash Flow
The increase in free cash flow resulted primarily from higher net income, higher royalties collected as the result of lapping the three month extension of royalty payment terms that was provided to franchisees in 2020 as part of the Company’s COVID relief package, the impact from the cash payment related to the settlement of the financial institutions case in January 2020, the timing of receipts of franchisee rental payments, and the timing of accrued compensation payments.
Company Adds $10 Million of Incremental Breakfast Advertising Spending to Its 2021 Plan
The Company announced today a $10 million incremental investment in breakfast advertising in 2021, taking the Company’s total expected incremental investment to $25 million for the year. The Company expects that this incremental investment will continue to drive trial and acceleration of the Company’s breakfast offering. The Company remains committed to growing its breakfast business to 10% of sales by the end of 2022.
Company Adds Significant Fuel to New Restaurant Development; Raises 2025 Target Meaningfully to 8,500 to 9,000 Global Restaurants
REEF Kitchens Development Commitment
The Company announced today a development commitment by REEF to open and operate 700 delivery kitchens over the next five years across the U.S., Canada, and the United Kingdom. This commitment is building on the successful test of eight delivery kitchens that opened in Canada. The Company expects REEF to open approximately 50 delivery kitchens in 2021 with the remainder being opened in 2022-2025.
Strategic Build to Suit Development Fund
The Company announced today the creation of a $100 million strategic build to suit development fund to drive additional new restaurant growth that is being funded by the additional cash that was obtained as part of the Company’s debt refinancing completed in the second quarter. We are expecting that this program, along with newly implemented lower and more competitive liquidity and net worth requirements for new franchisees, will transform how we recruit and engage diverse franchisees into the brand. The Company expects the development fund to drive approximately 80-90 new franchise restaurants in 2022-2025.
Groundbreaker Incentive Program Update
The Company also provided an update on the successful completion of its 2021 “Groundbreaker” new restaurant incentive program. As part of this program, the Company received incremental commitments for approximately 240 new restaurants in the U.S. and Canada that will help to solidify its significant growth plans over the next several years.
Company Increases Quarterly Dividend to 12 Cents
The Company announced today a 20% increase in its regular quarterly cash dividend to 12 cents per share, payable on September 15, 2021, to stockholders of record as of September 1, 2021. The Company believes that its strengthening liquidity position, along with the momentum it is seeing in its business, supports this increase, while still leaving flexibility to invest in growth. The number of common shares outstanding as of August 4, 2021 was approximately 223 million.
Company Increases Share Repurchase Authorization by $70 million
The Company announced today that its Board of Directors has approved an increase to the Company’s existing share repurchase authorization by $70 million to a total of $220 million.
The Company repurchased 1.2 million shares for $27.3 million in the second quarter of 2021 and has repurchased 0.2 million shares for approximately $4.4 million thus far in the third quarter of 2021. As of the date of this release, approximately $100 million remains available under the Company’s newly increased $220 million share repurchase authorization that expires in February 2022.
2021 Outlook
During 2021, the Company Now Expects:
- Global systemwide sales growth: 11 to 13 percent (excluding the impact of the 53rd week)
- Adjusted EBITDA: $465 to $475 million (including $25 million of incremental Company breakfast advertising spending)
- Adjusted earnings per share: $0.79 to $0.81
- Cash flows from operations: $350 to $370 million
- Capital expenditures: $80 to $90 million
- Free cash flow: $270 to $280 million
|
The Wendy’s Company and Subsidiaries |
|||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
2021 |
2020 |
2021 |
2020 |
||||||||||||
|
Revenues: |
|||||||||||||||
|
Sales |
$ |
193,525 |
$ |
164,217 |
$ |
382,582 |
$ |
331,015 |
|||||||
|
Franchise royalty revenue |
119,566 |
97,191 |
227,900 |
192,547 |
|||||||||||
|
Franchise fees |
17,095 |
5,929 |
31,591 |
12,278 |
|||||||||||
|
Franchise rental income |
60,868 |
56,857 |
119,744 |
114,713 |
|||||||||||
|
Advertising funds revenue |
102,283 |
78,112 |
191,723 |
156,713 |
|||||||||||
|
493,337 |
402,306 |
953,540 |
807,266 |
||||||||||||
|
Costs and expenses: |
|||||||||||||||
|
Cost of sales |
154,154 |
140,626 |
311,004 |
290,625 |
|||||||||||
|
Franchise support and other costs |
8,885 |
5,454 |
16,571 |
13,467 |
|||||||||||
|
Franchise rental expense |
34,068 |
31,297 |
66,634 |
60,598 |
|||||||||||
|
Advertising funds expense |
107,875 |
81,317 |
202,113 |
161,305 |
|||||||||||
|
General and administrative |
63,114 |
48,592 |
115,736 |
100,231 |
|||||||||||
|
Depreciation and amortization |
30,761 |
34,714 |
62,303 |
65,760 |
|||||||||||
|
System optimization gains, net |
(30,766) |
(1,987) |
(31,282) |
(2,310) |
|||||||||||
|
Reorganization and realignment costs |
2,102 |
2,911 |
7,036 |
6,821 |
|||||||||||
|
Impairment of long-lived assets |
630 |
117 |
1,265 |
4,704 |
|||||||||||
|
Other operating income, net |
(4,232) |
(1,396) |
(7,708) |
(3,328) |
|||||||||||
|
366,591 |
341,645 |
743,672 |
697,873 |
||||||||||||
|
Operating profit |
126,746 |
60,661 |
209,868 |
109,393 |
|||||||||||
|
Interest expense, net |
(28,204) |
(29,085) |
(56,990) |
(57,610) |
|||||||||||
|
Loss on early extinguishment of debt |
(17,917) |
— |
(17,917) |
— |
|||||||||||
|
Other income (expense), net |
161 |
(144) |
290 |
932 |
|||||||||||
|
Income before income taxes |
80,786 |
31,432 |
135,251 |
52,715 |
|||||||||||
|
Provision for income taxes |
(15,062) |
(6,528) |
(28,161) |
(13,370) |
|||||||||||
|
Net income |
$ |
65,724 |
$ |
24,904 |
$ |
107,090 |
$ |
39,345 |
|||||||
|
Net income per share: |
|||||||||||||||
|
Basic |
$ |
.30 |
$ |
.11 |
$ |
.48 |
$ |
.18 |
|||||||
|
Diluted |
.29 |
.11 |
.47 |
.17 |
|||||||||||
|
Number of shares used to calculate basic income per share |
221,874 |
223,123 |
222,604 |
223,329 |
|||||||||||
|
Number of shares used to calculate diluted income per share |
225,400 |
227,174 |
226,063 |
227,591 |
|||||||||||
|
The Wendy‘s Company and Subsidiaries Condensed Consolidated Balance Sheets As of July 4, 2021 and January 3, 2021 (In Thousands Except Par Value) (Unaudited) |
|||||||
|
July 4, |
January 3, |
||||||
|
ASSETS |
|||||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
568,139 |
$ |
306,989 |
|||
|
Restricted cash |
37,792 |
33,973 |
|||||
|
Accounts and notes receivable, net |
103,257 |
109,891 |
|||||
|
Inventories |
4,261 |
4,732 |
|||||
|
Prepaid expenses and other current assets |
24,219 |
89,732 |
|||||
|
Advertising funds restricted assets |
101,858 |
142,306 |
|||||
|
Total current assets |
839,526 |
687,623 |
|||||
|
Properties |
881,798 |
915,889 |
|||||
|
Finance lease assets |
206,586 |
206,153 |
|||||
|
Operating lease assets |
791,924 |
821,480 |
|||||
|
Goodwill |
752,552 |
751,049 |
|||||
|
Other intangible assets |
1,217,275 |
1,224,960 |
|||||
|
Investments |
43,676 |
44,574 |
|||||
|
Net investment in sales-type and direct financing leases |
302,694 |
268,221 |
|||||
|
Other assets |
130,843 |
120,057 |
|||||
|
Total assets |
$ |
5,166,874 |
$ |
5,040,006 |
|||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Current portion of long-term debt |
$ |
32,750 |
$ |
28,962 |
|||
|
Current portion of finance lease liabilities |
14,547 |
12,105 |
|||||
|
Current portion of operating lease liabilities |
45,269 |
45,346 |
|||||
|
Accounts payable |
32,430 |
31,063 |
|||||
|
Accrued expenses and other current liabilities |
137,991 |
155,321 |
|||||
|
Advertising funds restricted liabilities |
109,799 |
140,511 |
|||||
|
Total current liabilities |
372,786 |
413,308 |
|||||
|
Long-term debt |
2,373,610 |
2,218,163 |
|||||
|
Long-term finance lease liabilities |
521,608 |
506,076 |
|||||
|
Long-term operating lease liabilities |
838,585 |
865,325 |
|||||
|
Deferred income taxes |
279,837 |
280,755 |
|||||
|
Deferred franchise fees |
89,286 |
89,094 |
|||||
|
Other liabilities |
120,806 |
117,689 |
|||||
|
Total liabilities |
4,596,518 |
4,490,410 |
|||||
|
Commitments and contingencies |
|||||||
|
Stockholders’ equity: |
|||||||
|
Common stock, $0.10 par value; 1,500,000 shares authorized; 470,424 shares issued; 222,960 and 224,268 shares outstanding, respectively |
47,042 |
47,042 |
|||||
|
Additional paid-in capital |
2,907,274 |
2,899,276 |
|||||
|
Retained earnings |
303,475 |
238,674 |
|||||
|
Common stock held in treasury, at cost; 247,464 and 246,156 shares, respectively |
(2,643,361) |
(2,585,755) |
|||||
|
Accumulated other comprehensive loss |
(44,074) |
(49,641) |
|||||
|
Total stockholders’ equity |
570,356 |
549,596 |
|||||
|
Total liabilities and stockholders’ equity |
$ |
5,166,874 |
$ |
5,040,006 |
|||
|
The Wendy’s Company and Subsidiaries |
|||||||
|
Six Months Ended |
|||||||
|
2021 |
2020 |
||||||
|
Cash flows from operating activities: |
|||||||
|
Net income |
$ |
107,090 |
$ |
39,345 |
|||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
|
Depreciation and amortization |
62,303 |
65,760 |
|||||
|
Share-based compensation |
11,033 |
9,326 |
|||||
|
Impairment of long-lived assets |
1,265 |
4,704 |
|||||
|
Deferred income tax |
(2,137) |
1,920 |
|||||
|
Non-cash rental expense, net |
20,075 |
12,251 |
|||||
|
Change in operating lease liabilities |
(23,074) |
(19,233) |
|||||
|
Net receipt of deferred vendor incentives |
3,332 |
7,728 |
|||||
|
System optimization gains, net |
(31,282) |
(2,310) |
|||||
|
Distributions received from joint ventures, net of equity in earnings |
2,354 |
1,262 |
|||||
|
Long-term debt-related activities, net |
21,328 |
3,141 |
|||||
|
Changes in operating assets and liabilities and other, net |
(13,536) |
(93,332) |
|||||
|
Net cash provided by operating activities |
158,751 |
30,562 |
|||||
|
Cash flows from investing activities: |
|||||||
|
Capital expenditures |
(24,069) |
(29,402) |
|||||
|
Acquisitions |
4,879 |
— |
|||||
|
Dispositions |
50,531 |
4,320 |
|||||
|
Notes receivable, net |
611 |
138 |
|||||
|
Net cash provided by (used in) investing activities |
31,952 |
(24,944) |
|||||
|
Cash flows from financing activities: |
|||||||
|
Proceeds from long-term debt |
1,100,000 |
153,315 |
|||||
|
Repayments of long-term debt |
(941,220) |
(24,271) |
|||||
|
Repayments of finance lease liabilities |
(5,777) |
(3,707) |
|||||
|
Deferred financing costs |
(20,873) |
(2,122) |
|||||
|
Repurchases of common stock |
(83,658) |
(45,137) |
|||||
|
Dividends |
(42,279) |
(37,974) |
|||||
|
Proceeds from stock option exercises |
25,933 |
11,865 |
|||||
|
Payments related to tax withholding for share-based compensation |
(3,197) |
(3,704) |
|||||
|
Net cash provided by financing activities |
28,929 |
48,265 |
|||||
|
Net cash provided by operations before effect of exchange rate changes on cash |
219,632 |
53,883 |
|||||
|
Effect of exchange rate changes on cash |
2,283 |
(3,132) |
|||||
|
Net increase in cash, cash equivalents and restricted cash |
221,915 |
50,751 |
|||||
|
Cash, cash equivalents and restricted cash at beginning of period |
418,241 |
358,707 |
|||||
|
Cash, cash equivalents and restricted cash at end of period |
$ |
640,156 |
$ |
409,458 |
|||
|
The Wendy’s Company and Subsidiaries |
|||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
2021 |
2020 |
2021 |
2020 |
||||||||||||
|
Net income |
$ |
65,724 |
$ |
24,904 |
$ |
107,090 |
$ |
39,345 |
|||||||
|
Provision for income taxes |
15,062 |
6,528 |
28,161 |
13,370 |
|||||||||||
|
Income before income taxes |
80,786 |
31,432 |
135,251 |
52,715 |
|||||||||||
|
Other (income) expense, net |
(161) |
144 |
(290) |
(932) |
|||||||||||
|
Loss on early extinguishment of debt |
17,917 |
— |
17,917 |
— |
|||||||||||
|
Interest expense, net |
28,204 |
29,085 |
56,990 |
57,610 |
|||||||||||
|
Operating profit |
126,746 |
60,661 |
209,868 |
109,393 |
|||||||||||
|
Plus (less): |
|||||||||||||||
|
Advertising funds revenue |
(102,283) |
(78,112) |
(191,723) |
(156,713) |
|||||||||||
|
Advertising funds expense (a) |
103,885 |
79,132 |
194,589 |
159,120 |
|||||||||||
|
Depreciation and amortization |
30,761 |
34,714 |
62,303 |
65,760 |
|||||||||||
|
System optimization gains, net |
(30,766) |
(1,987) |
(31,282) |
(2,310) |
|||||||||||
|
Reorganization and realignment costs |
2,102 |
2,911 |
7,036 |
6,821 |
|||||||||||
|
Impairment of long-lived assets |
630 |
117 |
1,265 |
4,704 |
|||||||||||
|
Adjusted EBITDA |
$ |
131,075 |
$ |
97,436 |
$ |
252,056 |
$ |
186,775 |
|||||||
|
Revenues |
$ |
493,337 |
$ |
402,306 |
$ |
953,540 |
$ |
807,266 |
|||||||
|
Less: |
|||||||||||||||
|
Advertising funds revenue |
(102,283) |
(78,112) |
(191,723) |
(156,713) |
|||||||||||
|
Adjusted revenues |
$ |
391,054 |
$ |
324,194 |
$ |
761,817 |
$ |
650,553 |
|||||||
|
(a) Excludes advertising funds expense of $3,990 and $7,524 for the three and six months ended July 4, 2021, respectively, and $2,185 for the three and six months ended June 28, 2020 related to the Company funding of incremental advertising. |
|
The Wendy’s Company and Subsidiaries |
|||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
2021 |
2020 |
2021 |
2020 |
||||||||||||
|
Net income |
$ |
65,724 |
$ |
24,904 |
$ |
107,090 |
$ |
39,345 |
|||||||
|
Plus (less): |
|||||||||||||||
|
Advertising funds revenue |
(102,283) |
(78,112) |
(191,723) |
(156,713) |
|||||||||||
|
Advertising funds expense (a) |
103,885 |
79,132 |
194,589 |
159,120 |
|||||||||||
|
System optimization gains, net |
(30,766) |
(1,987) |
(31,282) |
(2,310) |
|||||||||||
|
Reorganization and realignment costs |
2,102 |
2,911 |
7,036 |
6,821 |
|||||||||||
|
Impairment of long-lived assets |
630 |
117 |
1,265 |
4,704 |
|||||||||||
|
Loss on early extinguishment of debt |
17,917 |
— |
17,917 |
— |
|||||||||||
|
Total adjustments |
(8,515) |
2,061 |
(2,198) |
11,622 |
|||||||||||
|
Income tax impact on adjustments (b) |
3,429 |
(268) |
1,520 |
(3,698) |
|||||||||||
|
Total adjustments, net of income taxes |
(5,086) |
1,793 |
(678) |
7,924 |
|||||||||||
|
Adjusted income |
$ |
60,638 |
$ |
26,697 |
$ |
106,412 |
$ |
47,269 |
|||||||
|
Diluted earnings per share |
$ |
.29 |
$ |
.11 |
$ |
.47 |
$ |
.17 |
|||||||
|
Total adjustments per share, net of income taxes |
(.02) |
.01 |
— |
.04 |
|||||||||||
|
Adjusted earnings per share |
$ |
.27 |
$ |
.12 |
$ |
.47 |
$ |
.21 |
|||||||
|
(a) Excludes advertising funds expense of $3,990 and $7,524 for the three and six months ended July 4, 2021, respectively, and $2,185 for the three and six months ended June 28, 2020 related to the Company funding of incremental advertising. |
|
(b) The provision for (benefit from) income taxes on “System optimization gains, net” was $8,742 and $512 for the three months ended July 4, 2021 and June 28, 2020, respectively, and $8,266 and $(734) for the six months ended July 4, 2021 and June 28, 2020, respectively. The benefit from income taxes on all other adjustments (excluding the advertising funds adjustments) was calculated using an effective tax rate of 25.73% and 25.76% for the three months ended July 4, 2021 and June 28, 2020, respectively, and 25.73% and 25.72% for the six months ended July 4, 2021 and June 28, 2020, respectively. |
|
The Wendy’s Company and Subsidiaries |
|||||||
|
Six Months Ended |
|||||||
|
2021 |
2020 |
||||||
|
Net cash provided by operating activities |
$ |
158,751 |
$ |
30,562 |
|||
|
Less: |
|||||||
|
Capital expenditures |
(24,069) |
(29,402) |
|||||
|
Cash paid for taxes related to New York disposition |
9,512 |
— |
|||||
|
Advertising funds impact (a) |
41,621 |
11,526 |
|||||
|
Free cash flow |
$ |
185,815 |
$ |
12,686 |
|||
|
(a) Represents the net change in the restricted operating assets and liabilities of our advertising funds, which is included in “Changes in operating assets and liabilities and other, net,” and the excess of advertising funds expense over advertising funds revenue, which is included in “Net income.” |
SOURCE The Wendy’s Company