Imvescor Restaurant Group Reports Continued Improvement in Financial Results for Third Quarter Fiscal 2015

 - Company Generates Same Restaurant Sales Growth of 1.2%, EBITDA growth of 28% -

MONTREAL, Sept. 3, 2015 /CNW/ - Imvescor Restaurant Group Inc. ("Imvescor" or the "Company") (TSX: IRG), a leading franchisor of restaurants operating 228 locations in Eastern Canada, reported financial results today for the 13 and 39 weeks ended July 26, 2015 ("Q3 2015"). This press release should be read in conjunction with the Company's management discussion and analysis and financial statements for Q3 2015 which are available on the Company's website at and have been posted on SEDAR at

"Our third quarter results demonstrate the potential and early momentum of our strategic plan, which focuses on growing same restaurant sales, rationalizing expenses, rejuvenating our restaurants and increasing franchisee network profitability," said Frank Hennessey, President and Chief Executive Officer of Imvescor. "We saw improved results across key financial metrics, in particular a return to growth in both system sales and same restaurant sales. Bâton Rouge, Trattoria di Mikes and Pizza Delight all realized positive same restaurant sales, while Scores delivered improved performance during the quarter. This is the first time in eight quarters that the Company has experienced growth in both System Sales and Same Restaurant Sales. We are very encouraged by these results, as we have yet to fully ramp up our plan to renovate at least 100 locations by the end of 2018. We are well on our way to this goal, with four restaurants renovated over Q2 and Q3 and expressions of interest from franchisees for over 80 additional restaurants to participate".

Q3 2015 Financial and Operational Highlights
(All comparable figures are to third quarter 2014 ("Q3 2014") unless otherwise specified.)

  • Same Restaurant Sales (SRS) grew 1.2%, an improvement of 4.3 percentage points compared with Q3 2014; it was also an improvement of 1.4 percentage points over Q2 2015.

  • System Sales growth was positive at 1% in Q3 2015 compared to a decline of 3.7% in Q3 2014, despite 2% fewer operating weeks in the quarter due to restaurant closures.

  • Operating expenses decreased by 16% due primarily to non-recurring charges in Q3 2014 and other expense rationalization.

  • EBITDA increased by 28% to $4.2 million compared with $3.2 million and as a proportion of revenue increased to 40.5% from 31.6%;

  • Operating EBITDA decreased 3.8% to $4.3 million compared with $4.5 million due to an intentional decrease in supplier revenue targeted to improve franchisee profitability. Quarter over quarter, Operating EBITDA as a percentage of revenue increased to 37.3% from 34.0%.

  • Net earnings increased by 39% to $2.5 million compared with $1.8 million; net earnings for Q3 2014 included $0.5 million in impairment charges and $0.5 million in special committee costs.

Highlights Subsequent to Quarter End

On August 31st 2015, the Company entered into a new three-year senior secured revolving reducing credit facility in an aggregate amount of $35 million. A portion of the proceeds of the credit facility were used to settle the Company's existing term loan due August 30, 2015.  Annual interest expense savings are estimated to be in excess of $1 million.

Q3 2015 and YTD Selected Financial Data

(in thousands of dollars, where applicable)



July 26,


July 27,


% Change 

July 26,

July 27,

% Change


System Sales (i)














SRS (i)







Number of restaurant operating weeks







Number of restaurants














Operating expenses







Results from operating activities














Operating EBITDA (i)







Operating EBITDA as a percentage of revenue







Net earnings and comprehensive income







Net earnings as a percentage of revenue






















Free cash flow







Dividends paid







(in thousands of dollars)

Q3 2015


As at July 26, 2015

As at October 26, 2014

% Change







Working capital excluding debt to be refinanced




Total debt




(i) System Sales, SRS, EBITDA, Operating EBITDA and Free cash flow are non-IFRS measures. Please refer to the "Non-IFRS Measures and Financial Metrics" section of this press release for the definitions.


In April 2015, the Company unveiled its strategic plan consisting of three key initiatives: (1) growing Same Restaurant Sales (SRS); (2) rejuvenating its restaurants and improving franchisee profitability; and (3) enhancing and leveraging its shared services through optimization and expense rationalization. 

Fundamental to growing SRS is the Company's commencement of its restaurant rejuvenation plan, which will see it invest up to $5.5 million towards 20% of the capital costs of renovating guest-facing areas by those franchisees who choose to participate in and meet the criteria for the program.  To date, franchisees have submitted expressions of interest in the rejuvenation program covering 84 restaurants, and the Company is on track for its target of renovating 100 restaurants by the end of fiscal year 2018. Renovations have been completed at four restaurants and management is encouraged by the early indication of SRS growth from these locations post-renovations. Management believes that the current environment of overall lower interest rates is beneficial to Imvescor and its franchisees as they undertake their plans to rejuvenate their network.

The Company is continuing to invest in its shared services, primarily purchasing and restaurant development (which includes leasing, franchising, and construction), while continuing to pursue means by which to generate efficiencies from the system.  Management expects that successful execution on this component of its strategic plan will deliver meaningful improvements in both revenue and profitability.

Dividend Declaration

Pursuant to its previously announced dividend policy, the board of directors (the "Board") today declared a dividend of $0.02 per common share. The quarterly cash dividend will be paid on October 2, 2015 to shareholders of record as of the close of business on September 18, 2015.

The declaration and payment of any future dividend remains at the discretion of the Board and will depend on the Company's current and anticipated cash requirements and surplus, capital expenditures requirements, regulatory restrictions, financial results, future prospects, current and future contractual restrictions such as restrictions under credit or other arrangements, the satisfaction of solvency tests imposed by the Canada Business Corporations Act for the declaration of dividends and other factors deemed relevant by the Board. Any dividend policy established by the Board, including the Company's current dividend policy can be changed at any time and is not binding on the Company. There can be no guarantee that the Company will maintain its current dividend policy or any dividend policy or that any dividend will be declared or paid.

Conference Call Details

Frank Hennessey, President and Chief Executive Officer, and Tania M. Clarke, Chief Financial Officer will host the conference call to discuss Q3 2015 results at 8:30 am E.S.T on Thursday, September 3, 2015. To access the conference call by telephone, dial 1-888-231-8191 (Toll-Free), (514) 807-9895 (Montreal) or 647-427-7450 (Toronto). 

A live audio webcast of the conference call will be available at A recording of the conference call will be archived for replay by telephone until Thursday, September 10, 2015 at midnight. To access the archived conference call, dial 1-855-859-2056 (Toll-Free), 514-807-9274 (Montreal) or 416-849-0833 (Toronto) and enter the reservation number 15385254  

About Imvescor Restaurant Group Inc. Imvescor Restaurant Group Inc. is a dynamic and innovative organisation in the family and casual dining restaurant industry. The Company is a franchise and licensing business that operates restaurants in Eastern Canada under four banners: Pizza Delight®, operating primarily in Atlantic Canada, in the family/mid-scale segment, Trattoria di Mikes® and Scores®, operating primarily in Québec in the family and casual dining segments and the take-out and delivery segments, and Bâton Rouge®, operating in Québec, Ontario and Nova Scotia in the casual dining segment. The Company also licenses to third parties the right to manufacture and sell prepared food products under the Pizza Delight®, Trattoria di Mikes®, Scores® and Bâton Rouge® brands and through its wholly-owned subsidiary, Groupe Commensal Inc. manufactures and sells vegetarian branded food products in grocery stores and retail outlets under the Commensal® brand.

Non- IFRS 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. 

"Operating EBITDA" is defined as earnings or loss before interest income, interest expense, depreciation and amortization, income tax expense, gain or loss on redemption of debentures, impairment or impairment reversal of long-lived assets, impairment or impairment reversal of Imvescor rights, gain or losses on sale of property and equipment, change in onerous contract provisions, costs of special committee, goodwill, bargain purchase gains, reorganization costs, franchisee rejuvenation program, gain or loss on derivative financial liability and earnings or loss from discontinued operations. The definition of Operating EBITDA can change from time to time to account for unusual items or items not considered to be consistent with the Company's normal recurring operations.

"System Sales" is the aggregate sales achieved by all "Pizza Delight", "Trattoria di Mikes", "Scores" and "Bâton Rouge" restaurants, whether they are company-owned restaurants or franchises.  This performance measure indicates the Company's overall growth and reflects the direct impact of the restaurant openings and closures. 

"Same Restaurant Sales" or "SRS" is a metric used in the restaurant industry to compare sales earned in established locations over a certain period of time, such as a fiscal quarter, for the current period against sales in the same period in the previous year. SRS growth helps explain what portion of sales growth can be attributed to growth in established locations. The Company defines SRS growth as sales generated by stores that have been open for at least one fiscal 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.

"Free cash flow" is defined as cash from operating activities less cash used in the purchases of property, plant and equipment and intangible assets.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of applicable securities laws, including, but not limited to, the Company's business objectives, estimates, outlook, strategies and priorities and all other statements other than statements of historical facts. All statements contained in this press release other than statements of 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.

Forward-looking statements involve known and unknown risks, uncertainties and other factors outside the Company's control. A number of factors could cause the actual results of the Company to differ materially from the results discussed in the forward-looking statements, including, but not limited to: the Company's dependence on royalty stream, risks associated with quality control, food borne illnesses and health concerns, adverse changes to economic conditions, potential litigation and other complaints, the Company's ability to respond to various competitive factors affecting its operations, the impact of an increase in Company-owned restaurants, compliance with government regulations, the impact of sales tax upon system sales, the Company's dependence on key personnel and third parties, the closure of restaurants, changes in laws concerning employees, changes in the Company's relationships with its employees, changes in consumer preferences, the availability and quality of raw materials, franchise development and growth of the Company's royalties, risks associated with franchise regulations, compliance with regulations governing alcoholic beverages, the protection of the Company's intellectual property, the Company's retail products dependence on the strength of the Company's restaurant brands, environmental risks and regulations, the Company's dependence on technology, inherent risks associated with internal control over financing reporting, the indebtedness of the Company and the restrictive covenants to which it is subject and the risk associated with the Company's dividend policy 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 These factors and assumptions are not intended to represent a complete list of the factors and assumptions that could affect the Company. These factors and assumptions, however, should be considered carefully

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 and should not place undue reliance on the forward-looking statements contained in this press release. 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 nonrecurring 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.

Our brands:
Pizza Delight®:
Trattoria di Mikes®:
Bâton Rouge®:

SOURCE Imvescor Restaurant Group Inc.

For further information: Imvescor: 514.341.5544,; Investor Relations:; Frank Hennessey, President and Chief Executive Officer; Tania M. Clarke, Chief Financial Officer; Media Relations: ACJ Communication, Daniel Granger, 514.840.7990


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