Imvescor Restaurant Group Inc. Reports Third Quarter Financial Results

MONCTON, NB, Sept. 8, 2014 /CNW/ - Imvescor Restaurant Group Inc. ("IRG" or the "Company") (TSX: IRG) reported financial results today for the 13 and 39 weeks ended July 27, 2014 (or "third quarter"). The 2013 results are for the 13 and 39 weeks ended July 28, 2013.

Improved Financial Results

         
(in thousands of dollars) Q3 2014
13 weeks ended
July 27, 2014
Q3 2013
13 weeks ended
July 28, 2013
YTD 2014
39 weeks ended
July 27, 2014
YTD 2013
39 weeks ended
July 28, 2013
Total revenues $   11,786 $ 12,304 $ 36,251 $ 34,010
Net earnings (loss)   1,780   (29)   6,716   1,702
Interest on long-term debt    563   658   1,709   2,382
Interest income   (18)   (16)   (49)   (70)
Income tax expense   654   579   2,527   2,463
Depreciation and amortization   257   257   765   653
EBITDA (*) $ 3,236 $ 1,449 $ 11,668 $ 7,130
Impairment of long-lived assets $ 500 $   - $   500 $ -
Costs of special committee   464   -   464   -
Reorganization costs   -   1,690   100   1,775
Bargain purchase gain   -   (216)   -   (216)
Loss on redemption of debentures   -   1,195    -   3,163
Adjusted EBITDA (*) $  4,200 $ 4,118 $  12,732 $ 11,852
Franchised restaurants $ 4,637 $ 5,001 $ 13,746 $  14,551
Company-owned restaurants   (333)   (321)   (843)   (1,041)
Manufacturing and retail   1,575   1,105   4,882   3,327
Corporate   (1,679)   (1,667)   (5,053)   (4,985)
Adjusted EBITDA (*) $         4,200 $    4,118 $  12,732 $  11,852

* Refer to Non-GAAP Measures and Financial Metrics section of this press release

The Company's total revenues of $11.8 million for the third quarter of 2014 were lower than those of the third quarter of 2013, while year-to-date 2014 revenues of $36.3 million increased from year-to-date 2013. Sales of manufactured goods increased by $1.3 million and $3.5 million, respectively, for the third quarter and year-to-date 2014 compared to the same periods of 2013 from the sale of Commensal branded products. Retail royalties for the 13 and 39 weeks ended July 27, 2014 increased $749 thousand and $1.7 million, respectively from the 13 and 39 weeks ended July 28, 2013 mostly from an increase in the sales of Bâton Rouge ribs. Corporate restaurant sales for the third quarter and year-to-date 2014 were $2.0 million and $3.1 million lower, respectively, than the comparable periods of 2013 due to a decrease in the number of company-owned restaurants.

The Company's adjusted EBITDA for the third quarter of 2014 was $4.2 million, consistent with the third quarter of 2013. The adjusted EBITDA for the 39 weeks of 2014 was $12.8 million, which represents an increase of $880 thousand from the first 39 weeks of 2013. This increase is primarily attributable to an increase in the manufacturing and retail operations of $1.6 million, partially offset by the decrease in franchised restaurants of $805 thousand.

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) Q3 2014
13 weeks ended
July 27, 2014
YTD 2014
39 weeks ended
July 27, 2014
Pizza Delight -0.9% -1.4%
Mikes 1.2% 0.4%
Scores -9.0% -6.0%
Bâton Rouge -2.2% -3.5%
Same store sales -3.1% -2.8%

* Refer to Non-GAAP Measures and Financial Metrics section of this press release

Same store sales for the 13 weeks and 39 weeks ended July 27, 2014 were 3.1% and 2.8% lower, respectively, than those of the 13 weeks and 39 weeks ended July 28, 2013. Same store sales on a year-to-date basis have been impacted by adverse weather conditions experienced in the first quarter of 2014 by Atlantic Canada, Quebec and some parts of Ontario, which resulted in major declines in traffic count to the restaurants. Scores' sales have also been impacted by competitive entry and aggressive promotional offers by competitors in a number of locations, while Bâton Rouge's same store sales have been negatively impacted by competitive entry in several of its locations as well as a temporary closure due to a fire.

About Imvescor Restaurant Group Inc.

Headquartered in Moncton, New Brunswick, Imvescor Restaurant Group Inc. is a national franchise business that operates Canadian restaurants under four brands: Pizza Delight, operating primarily in Atlantic Canada in 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 restaurants' 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 International Financial Reporting Standards "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, impairment of long-lived assets, costs of special committee 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. Additional details and a reconciliation of EBITDA and adjusted EBITDA to the most directly comparable measure under IFRS are available in the Company's MD&A for the third quarter, available on SEDAR at www.sedar.com.

In addition, same store sales is not a performance measure 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 press release regarding the Company, including, but not limited to, the Company's business objectives, estimates, outlook, 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 press release, 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 press release 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 press release.

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:

Stéphane LeBlanc
Chief Financial 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


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