The Wendy’s Company (NASDAQ:WEN) Q4 2022 Earnings Call Transcript

Nick Setyan: Thank you. Obviously, just given the long tail on the buyback through 2027, how are you thinking about the timing across, I guess, the next four years or so? Is it going to be relatively balanced? And then also what was the unit level margin ex the UK?

Gunther Plosch: Good morning, Nick. So yes, you’re right. The authorization is for four years. It gives us a little bit flexibility. As I said, at a minimum, you can expect us to spend $70 million a year just to simply manage dilution in terms of how we then manage the rest, which I would call discretionary share repurchases is going to be the function in terms of what is our outlook on the fair value of the company. What is the timing when it makes sense for us to make the share repurchases. So we are going to make that decision on a quarterly basis and decide together with the Board how we’re going to pace and sequence those share repurchase programs. I didn’t fully understand. So can you repeat that one, second part?

Kelsey Freed: All right. I think we can move to the next question.

Operator: Certainly. Our next question comes from the line of Jim Sanderson with Northcoast Research. Jim, your line is now open.

James Sanderson: Thanks for the question. I wanted to follow-up on the cash balance issue. You mentioned about a $300 million minimum cash level necessary. How has that changed? And given the lower G&A spend and the stronger sales, shouldn’t that start to narrow or improve going forward potentially freeing up more discretionary cash flow for share repurchases?

Gunther Plosch: Yes, Jim, you’re not wrong, right. If you step back, pre-COVID, if you go back to a balance sheet pre-COVID, you would manage the company at around $200 million in cash and obviously COVID happened. Remember, we had to do the famous relief, working capital relief package for franchisees and we realized maybe we’re living in the volatile world and basically say, you know, what, we want to be a little bit more prudent and try to target around $300 million. If volatility comes down, we’re moving through something between $200 million and $300 million to comfortably manage what we need to manage is definitely an option and you’re absolutely right. I think clearly means there is a little bit more cash available for capital allocation actions.

Operator: Our final question comes from the line of Jared Garber with Goldman Sachs. Jared, your line is now open.