TSX Trading Symbol: "MTY"
MONTREAL, April 7 /CNW Telbec/ - (TSX: MTY) - MTY Food Group Inc. (MTY),
franchisor and operator of over 1,740 quick service restaurants today
reports its first quarter operating results ending February 28, 2011.
Highlights of the first quarter:
Net income increased by 15%, at $0.18 per share, compared to $0.16 in
the first quarter of 2010;
Acquisition of a 51% interest in a 60,000 square feet food processing
Number of locations at quarter end at 1,741, up from 1,727 at in
Revenues increased 22%, reaching $17.5 million;
EBITDA rose by 13% to $6.2 million;
Cash and short term investments total $31.2 million at the end of the
System wide sales were $117.7 million for the quarter, a 12% increase
over the same period in 2010; and
Same store sales declined by 0.4% during the quarter, with the adverse
impacts felt from the cold weather in most parts of Canada during the
quarter and weaker performance from the Company's coffee chain.
Results of operations for the first quarter ended February 28, 2010
MTY reported a net income of $3.5 million or $0.18 per share ($0.18 per
diluted share) compared to a net income of $3.0 million or $0.16 per
share ($0.16 per diluted share) for the same period last year,
representing a net income increase of 15%. The increase in net income
for the period is mainly attributable to generic growth as well as to
the gain on sale of a corporate store, while there was some downward
pressure caused by the transition period in the food processing plant
and the weak performance of some corporate stores.
The following table presents selected financial information for the
three months ended February 28 of 2011 and 2010:
(in millions of dollars except per share item)
Earnings per share
During the first quarter of our 2011 fiscal year, the Company's total
revenue increased by 22%, cumulating to $17.5 million in 2011 compared
to $14.3 million last year.
Revenue from franchise locations progressed from $12.3 million in 2010
to $12.8 million in 2011. Revenue from Valentine's franchise operations
accounted for $0.8 million of the increase, while royalties generated
by new stores opened during the last 12 months contributed $0.3 million
to the increase. These increases were partially offset by a weaker
performance from our coffee chain in Ontario, resulting in a decrease
in revenues from turn-key projects, rent and products sold to
Revenue from corporate owned locations increased to $2.5 million during
the first three months of our 2011 fiscal period, from $2.0 million for
the same period last year. This increase is due to the $0.7 million
generated by the Valentine corporate stores acquired in the third
quarter of 2010.
During the first quarter of 2011, the Company also generated
distribution and food processing revenues of $1.2 million and $1.0
million respectively. There were no such revenues streams in the first
quarter of 2010. The food processing business has been ramping up its
activities throughout the three-month period, going through a
transition period between the former management and the new team that
was put in place in the months following the acquisition.
Total EBITDA increased by 13%, from $5.5 million to $6.2 million for the
three months ended February 28, 2011.
EBITDA from franchised locations increased from $5.3 million in 2010 to
$6.2 million in 2011. Two main elements drove this 17% increase; the
increase in mainstream revenues such as royalties, which are mainly
attributable to the stores opened in the last twelve months, and a $0.7
million gain realized on the sale of assets by one of the Company's
subsidiary which was operating a corporate store.
EBITDA from corporate owned locations decreased from $0.2 million in
2010 to $0.0 million in 2011, mainly due to relatively weaker stores
EBITDA from the Company's distribution center was $0.1 million for the
three-month period. The newly acquired food processing plant generated
a negative EBITDA of $0.1 million. The loss is mainly attributable to
one-time costs incurred during the transition period.
System wide sales reached to $117.7 million during the first quarter of
2011, compared to $105.0 million for the same period last year,
representing an increase of 12%. Approximately half of the increase in
system wide sales is attributable to the acquisition of Valentine. The
remainder is generated by new locations opened in the last twelve
For the first quarter of our 2011 fiscal period, same store sales
decreased 0.41%. As a general tendency, our mall locations did well
with a growth in same store sales, while street front and, to a greater
extent, non-traditional locations lost ground compared to the first
quarter of last year. We were heavily impacted in some parts of Canada
by factors such as the colder weather in the first three months of our
2011 fiscal period than for the same period last year. In addition to
colder than usual weather, free coffee and other ongoing promotions
initiated by some of players in the quick service industry have had an
adverse impact on the sales of our coffee chain in Ontario. Weaker
local economies in the different parts of the territory covered by our
concepts were also a factor.
For 2011, management plans on opening 85 new locations and remains
committed in seeking potential acquisitions to further strengthen its
Certain information in this News Release may constitute
"forward-looking" information that involves known and unknown risks,
uncertainties, future expectations and other factors which may cause
the actual results, performance or achievements of the Company or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking information. When used in this News Release, this
information may include words such as "anticipate", "estimate", "may",
"will", "expect", "believe", "plan" and other terminology. This
information reflects current expectations regarding future events and
operating performance and speaks only as of the date of this News
Release. Except as required by law, we assume no obligation to update
or revise forward-looking information to reflect new events or
circumstances. Additional information is available in the Company's
Management Discussion and Analysis, which can be found on SEDAR at www.sedar.com.
On Behalf of the Board of Directors of
MTY Food Group Inc.
Stanley Ma, Chairman, President & CEO
SOURCE MTY FOOD GROUP INC.
For further information:
Please contact Jean-Francois Dube, Investor Relations at 1-450-226-8475 or by email at email@example.com or visits our website: www.mtygroup.com or visit SEDAR's website at www.sedar.com under the Company's name.