Imvescor Restaurant Group Inc. - Reports Improved First Quarter Financial Results

MONCTON, NB, March 5, 2014 /CNW/ - Imvescor Restaurant Group Inc. ("IRG" or the "Company") (TSX: IRG) reported financial results today for the 13 weeks ended January 26, 2014 (or "first quarter"). The 2013 results are for the 13 weeks ended January 27, 2013.

Improved Financial Results

 
(in thousands of dollars) Q1 2014   Q1 2013
  13 weeks ended   13 weeks ended
  January 26, 2014   January 27, 2013
 
Total revenues $ 12,431   $ 10,197
           
Net earnings   2,797     1,011
           
Interest on long-term debt   607     968
Interest income   (13)     (24)
Income tax expense   1,130     897
Depreciation and amortization   231     187
EBITDA (*) $ 4,752   $ 3,039
 
Reorganization costs $ -   $ 43
Loss on redemption of debentures   -     1,000
Adjusted EBITDA (*) $ 4,752   $ 4,082
 
Franchised restaurants $ 3,300   $ 3,657
Company-owned restaurants   (297)     (322)
Manufacturing and retail   1,749     747
Adjusted EBITDA (*) $ 4,752   $ 4,082
* Refer to non-GAAP measures


The Company's total revenues increased by $2.2 million (22%) and adjusted EBITDA increased by $670 thousand (16%) for the first quarter of 2014 compared to the first quarter of 2013, primarily attributable to the increase in retail royalties. Retail royalties for the 13 weeks ended January 26, 2014 increased $959 thousand from the 13 weeks ended January 27, 2013 mostly from an increase in the sales of Bâton Rouge ribs and Mikes sauces as a result of the expansion of the sales of these products to provinces outside of Quebec in the third quarter of 2013.  The sale of manufactured goods increased by $1.1 million for the 13 weeks ended January 26, 2014 from the 13 weeks ended January 27, 2013.

Acquisition of manufacturing facilities

On November 29, 2013, the Company bought the assets of Commensal 2007 S.E.C., including its manufacturing facility which will permit IRG to pursue the commercialization of several additional products under the Commensal brand as well as begin the production of additional Mikes, Bâton Rouge and Scores products for sale into the retail network. The facility will also increase the Company's sale of proprietary manufactured products within the franchise network

Strategic initiatives for 2014

The Company's strategy for 2014 and beyond is to give priority to all initiatives aimed at revitalizing its franchisee network, including building on the positive results already achieved from the testing of new renovations and the continued pursuit of effective menu engineering and marketing initiatives. The company will also continue to focus on growing the manufacturing and retail segment.

Same Store Sales ("SSS") *

 
(in thousands of dollars)   Q1 2014   Q1 2013
    13 weeks ended   13 weeks ended
    January 26, 2014   January 27, 2013
   
Pizza Delight   -3.7%   0.3%
Mikes   -0.3%   1.6%
Scores   -5.3%   -2.5%
Bâton Rouge   -4.8%   -4.3%
Same store sales   -3.6%   -1.5%
* Refer to non-GAAP measures


Same store sales for the 13 weeks ended January 26, 2014 were 3.6% lower than those of the 13 weeks ended January 27, 2013, all brands experiencing same store sales declines. The decline in same store sales is primarily due to the extreme weather conditions experienced by Atlantic Canada, Quebec and some parts of Ontario during the first quarter of 2014. The month of December 2013 and the beginning of January 2014 brought ice storms, heavy snow fall, extreme low temperatures and multiple-day power outages to many of the locations in which the Company operates, which resulted in major declines in traffic count to the restaurants.

Resignation of Director

The Company also announced today that the Chair of the Board of Directors, Mr. Robb Chase, had resigned as director and that Mr. Chase advised the company that he would also not be standing for re-election as director at the annual meeting of shareholders to be held tomorrow, March 6, 2014. The Company and the Board of Directors extend their thanks and gratitude to Mr. Chase for his leadership and contribution during his tenure.

About Imvescor Restaurant Group Inc.

Headquartered in Moncton, New Brunswick, Imvescor Restaurant Group Inc. owns franchised and corporate restaurants throughout Canada under four brands: Pizza Delight, operating primarily in Atlantic Canada, where it dominates the family/mid-scale segment, Mikes and Scores, operating primarily in Quebec in the family and casual dining segments and the take-out and delivery segments, and Bâton Rouge, operating in Quebec, Ontario and Nova Scotia in the casual dining segment.  The Company also has manufacturing and retail operations which sells prepared foods with the Commensal brand name and with its restaurant's brand names.

Non-GAAP Measures and Financial Metrics

The information contained in this press release includes some figures that are not performance measures consistent with IFRS.  Because they do not have a standardized meaning prescribed by IFRS, they may not be comparable with similar measures presented by other issuers.

For instance, the Company uses earnings before interest income, interest on long-term debt, depreciation and amortization and income tax expense ("EBITDA") and earnings before interest income, interest on long-term debt, loss on redemption of debentures, depreciation and amortization, reorganization costs and income tax expense ("adjusted EBITDA") because these measures enable management to assess the Company's operational performance.  Those measures are a financial indicator of the Company's ability to service and incur debt.  EBITDA  and  adjusted EBITDA should not be considered by an investor as an alternative to earnings, an indicator of operating performance or cash flows, or as a measure of liquidity. 

In addition, the following financial metrics are not performance measures consistent with IFRS.  Same store sales, which are defined as sales generated by stores that have been open for at least one year compared to the sales from the same group of restaurants in the comparable period.  The Company believes this is a meaningful measure of operating performance.

Cautionary Note Regarding Forward-Looking Statements

Certain information in this MD&A regarding the Company, including, but not limited to, the Company's business objectives, strategies and priorities, the generation of cash flows, the growth of the same store sales, and other statements that are not historical facts, are "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Forward-looking statements can generally be identified by words such as "may", "should", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "outlook" and similar expressions. All such forward-looking statements are made pursuant to the "safe harbour" provisions of applicable securities laws. These statements are based on information currently available to the Company's management and on the current assumptions, intentions, plans, expectations and estimates of the management regarding the Company's future growth, results of operations, performance and opportunities as well as the economic environment in which it operates. Forward-looking statements involve known and unknown risks, uncertainties and other factors outside the Company's control. A number of factors could cause actual results of the Company to differ materially from the results discussed in the forward-looking statements, including, but not limited to: market conditions for financing; competitive conditions, whether related to new competitors or current competitors; change in the Company's or its competitors current pricing strategies; changes in demographic trends; changes in consumer preferences and discretionary spending patterns; changes in national and local business and economic conditions; risks associated with the closure of restaurants; risk associated with ownership of restaurants by the Company; costs associated with strategically exiting locations; the ability of the Company to pay dividends; the Company successfully offering new and innovative products and executing its strategies as planned; legislation and governmental regulation; changes in accounting policies, practices and standards; and the results of operations and financial condition of the Company and other factors referenced in the Company's Annual Information Form and the Company's other continuous disclosure filings which are available on SEDAR at www.sedar.com. Although the forward-looking statements contained herein are based upon what the Company believes to be reasonable assumptions on the date of this MD&A, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. Certain assumptions underlying the forward-looking statements contained herein include assumptions related to the Company's ability to obtain financing on conditions favorable to the Company, future cash flows, market conditions, sales estimates, estimates relating to the Company's ability to settle and exit leases. Readers should not place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this MD&A and, accordingly, are subject to change after such date. Forward-looking statements are provided herein for the purpose of giving information about the Company's current strategic priorities, expectations and plans, allowing investors and others to get a better understanding of the Company's business outlook and operating environment. Readers are cautioned, however, that such information may not be appropriate for other purposes. The Company assumes no obligation to update such forward-looking statements to reflect new information, future events or otherwise, except as required by applicable securities laws. Except as otherwise indicated, forward-looking statements do not reflect the potential impact of any non-recurring or other special items or of any transactions that may be announced or that may occur after the date of this MD&A. The financial impact of these transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them. The Company therefore cannot describe the expected impact in a meaningful way or in the same way it presents known risks affecting the business. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

SOURCE Imvescor Restaurant Group Inc.

For further information:

Denis Richard
President and Chief Executive Officer
Imvescor Restaurant Group Inc.

http://www.imvescor.ca
514-341-5544

For more information about our brands:

Pizza Delight  http://www.pizzadelight.com 
Mikes  http://www.mikes.ca 
Scores  http://www.scores.ca 
Bâton Rouge http://www.batonrougerestaurants.com