Imvescor Restaurant Group Reports Continuing Strong Results for Q3 Fiscal 2016

Company Reports Fifth Consecutive Quarter of Positive System Sales and Same Restaurant Sales Growth, and Continued Growth in Operating EBITDA of 13%

MONTREAL, Sept. 7, 2016 /CNW Telbec/ - Imvescor Restaurant Group Inc. ("IRG" or the "Company") (TSX: IRG), a leading franchisor of restaurants operating 223 locations in Eastern Canada, reported financial results today for the 13 weeks ended July 31, 2016 ("Q3 2016"). This press release should be read in conjunction with the Company's management discussion and analysis and financial statements for Q3 2016 which are available on the Company's website at and have been posted on SEDAR at

"The third quarter of fiscal 2016 was once again demonstrative of the ongoing success of our strategic focus on the four pillars of our business (Quality of Food, Quality of Service, Value and Ambience), " said Frank Hennessey, President and Chief Executive Officer of Imvescor Restaurant Group Inc. "We delivered our fifth consecutive quarter of positive year-over-year growth in System Sales and Same Restaurant Sales at 3.2% and 1.2% respectively, and our highest Operating EBITDA since the initiation of our strategic plan. Our steady progress coupled with top line growth contributed to a 13% year-over-year increase in Operating EBITDA. We achieved this growth in the context of 3% fewer operating weeks, in part due to planned restaurant closures as part of the Restaurant Rejuvenation Plan (the "RRP") and the closure of underperforming locations", added Frank Hennessey.

"Since announcing our strategic plan in April 2015, we have made progress – progress that is having a positive impact on all stakeholders. We increased by 12.5% the return to capital to shareholders by way of dividend in January 2016. Our RRP, which was purposely muted over the busy summer months, has seen 20 renovations completed to date with 15 more planned for this year," commented Frank Hennessey.

Q3 2016 Financial and Operational Highlights

(All comparable figures are to third quarter 2015 ("Q3 2015") unless otherwise specified.

  • System Sales grew 3.2% to $99.8 million, partly from Same Restaurant Sales ("SRS") growth of 1.2%, and furthered by the increase in sales from new restaurants and restaurants temporarily closed and reopened under the RRP.
  • SRS grew 1.2% from Q3 2015 which is consistent with the growth achieved in Q3 2015. The positive impact of the RRP on the SRS was offset by the related temporary closures due to the renovations, positive SRS from the third quarter of 2015 and other macro-economic factors in the Atlantic Provinces.
  • Revenue increased 19%, partly from the Company temporarily taking over the operations of the manufacturer of certain Trattoria di Mikes licensed retail products, as well as the System Sales growth of 3.2% and increased retail promotional activities.
  • Operating expenses increased 21% versus Q3 2015, of which 12% was due to the temporary manufacture of certain Trattoria di Mikes licensed retail products and 5% due to the additional company-owned restaurant purchased and operated during the quarter. The remaining increase mainly related to increased corporate costs for stock based compensation, largely as a result of the increase in the Company's share price in the quarter, and public company expenses.
  • EBITDA of $4.6 million increased by 11% over Q3 2015 and stemmed from the 19% increase in revenue, partially offset by the increase in operating expenses.
  • Operating EBITDA increased 13% to $4.8 million in Q3 2016 versus $4.3 million in Q3 2015. Notably, Franchising Operating EBITDA increased 21% from increased System Sales, and increased retail promotional activities for Bâton Rouge ribs. Franchising Operating EBITDA as a percentage of franchising revenue and System Sales increased 3% and 1% respectively over Q3 2015.
  • Net earnings of $3.1 million increased 25% versus Q3 2015.

Capital Allocation Strategy

On April 15, 2015, the Company formally announced a strategic plan and approach to capital allocation that charts a roadmap for the transformation and growth of the Company for the three following years, including an investment by the Company of up to $5.5M over that period of time to rejuvenate its restaurant network under the RRP. The Company has built on its strengths, including a dedicated franchisee network, a solid balance sheet, an experienced and focused management team, a robust regional position for each of its brands and a healthy retail presence. The trading price of the common shares of the Company has increased 72%, from $1.79 to $3.08. Finally, the Company has repaid $10 million on its long-term debt over the past three quarters in fiscal 2016.

On January 13, 2016, the Board approved an increase of 12.5% in the Company's quarterly dividend from $0.02 to $0.0225 per common share. The dividend policy has been designed to allow sufficient flexibility to continue investing in the Company's growth and its franchise network, while providing returns to its shareholders. The Company also instituted a normal course issuer bid, which allows for the repurchase and cancellation of shares, which was approved by the Toronto Stock Exchange on January 18, 2016.

In addition to continuing growing our business through a combination of organic growth, including through the investment in the RRP and other infrastructure areas, we are actively pursuing a strategic acquisition strategy of brands that complements IRG's existing brands and that could either consolidate our solid position in Quebec or expand our geographic footprint outside of Quebec, and broaden our customer base and leverage our platform. We plan on using cash on hand and available capital under our credit facility to finance the cash portion of such acquisitions while using the common shares of the Company as an attractive acquisition currency when appropriate. In evaluating any potential acquisition candidates, the Company will take into account whether such acquisition is accretive for the Company and whether it provides an opportunity for substantive growth while allowing the Company to leverage the fixed cost of its shared services platform. There is no certainty that the Company will be able to identify targets that will fit its objectives or that the Company will be able to complete a transaction.

The Company carefully explores, as it has done from time to time, any commercially reasonable strategic opportunity that could maximize the value of the Company.


Q3 2016 Selected Financial Data

(in thousands of dollars, where applicable)



July 31,

July 26,



July 31,

July 26,


Number of weeks





System Sales (i)

$ 99,792

$ 96,683


$ 292,761

$ 275,912


SRS (i)



- %




Number of restaurant operating weeks






- %

Number of restaurants







Number of Company-owned restaurants







Consolidated results:








Operating expenses







Results from operating activities














EBITDA as a % of Revenue







Restaurant rejuvenation plan expense







Operating EBITDA (i)







Operating EBITDA as a % of Revenue







Operating EBITDA as a % of System Sales







Net earnings and comprehensive income







Net earnings as a % of Revenue











- %











Cash flow:

Free cash flow (i)







Free cash flow as a % of Revenue







Dividends paid







(in thousands of dollars, where applicable)

Q3 2016
As at
July 31, 2016

Fiscal 2015
As at
October 25, 2015






Working capital excluding gift cards liability




Total debt, including current portion




Net debt to Operating EBITDA (i)





System Sales, SRS, EBITDA, Operating EBITDA, Free cash flow and Net debt to Operating EBITDA are non-IFRS measures. Refer to the "Non-IFRS Measures and Financial Metrics" section of this press release for the definition.


Dividend Declaration

Pursuant to its previously announced dividend policy, the board of directors of the Company (the "Board") today declared a dividend of $0.0225 per common share. The quarterly cash dividend will be paid on October 5, 2016 to shareholders of record as of the close of business on September 21, 2016.

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 a conference call to discuss Q3 2016 results at 8:30 am E.S.T on Wednesday, September 7, 2016. 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 Wednesday, September 14, 2016 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 63934548.

About Imvescor Restaurant Group Inc. Imvescor Restaurant Group Inc. is a dynamic and innovative organization 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.

"EBITDA" is defined as earnings or loss before interest income, interest expense, depreciation and amortization and income tax expense.

"Operating EBITDA" is defined as EBITDA adjusted for the following items: impairment or impairment reversal of non-current assets, impairment or impairment reversal of Imvescor rights, gain or losses on sale of property, plant and equipment, change in onerous contract provisions, costs of special committee, shareholder proposal costs, impairment of goodwill, bargain purchase gains, reorganization costs, restaurant rejuvenation plan, 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.

The Company uses EBITDA and Operating EBITDA because those measures enable management to assess the Company's operational performance and are financial indicators of the Company's ability to service and incur debt. Those measures 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. Refer to the Reconciliations of Non-IFRS Measures section of this MD&A for more details.

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

"Net debt to Operating EBITDA" is calculated as long-term debt, including the current portion, less cash, divided by Operating EBITDA for the last four fiscal quarters.

"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 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

This press release contains "forward-looking statements" within the meaning of applicable securities laws, including but not limited to, IRG's business objectives, estimates, outlook, strategies and priorities and all other statements other than statements of historical facts. Forward-looking statements may include estimates, intentions, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Forward-looking statements are often, but not always, identified by the use of words such as "may", "should", "would", "will", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential, "targeting", "intend", "could", "might", "continue", "outlook" or the negative of these terms or other comparable terminology. 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 of IRG's control. A number of factors could cause the actual results of IRG to differ materially from the results discussed in the forward-looking statements, including, but not limited to: risks associated with quality control, food borne illnesses and health concerns, adverse changes to economic conditions, the Company's ability to retain certain key personnel, the Company's ability to identify potential strategic acquisition candidates and/or to complete a transaction, the Company's ability to respond to various competitive factors affecting its operations, franchise development and growth of the retail licensing opportunities, changes in consumer preferences, the Company's retail products dependence on the strength of the Company's restaurant brands, the protection of the Company's intellectual property, the success of the restaurant rejuvenation plan, the Company's dependence on royalty stream, the Company's reliance on suppliers and availability and quality of raw materials, changes in the Company's relationships with its franchisees, the Company's ability to open new restaurants, the closure of restaurants, the impact of an increase in Company-owned restaurants, the Company's ability to renew leases and limit lease exposure, the risks associated with negative publicity and its impact on the Company's reputation, compliance with regulations governing confidentiality of guest information, potential litigation and other complaints, compliance with government regulations, the Company's dependence on third parties, changes in laws concerning employees, changes in the Company's relationships with its employees, the Company's ability to ensure workplace safety, risks associated with franchise regulations, compliance with regulations governing alcoholic beverages, environmental risks and regulations, public safety issues, the Company's dependence on technology, risks of underreporting of sales by franchisees, inherent risks associated with internal control over financing reporting, the indebtedness of the Company and the restrictive covenants to which it is subject, the impact of sales tax upon System Sales, the risk associated with the Company's dividend policy, the impact of seasonality and other factors on quarterly operating results, the risk of uninsured losses, changes in commodity prices 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 are not intended to represent a complete list of the factors that could affect IRG but should, however, be considered carefully.

Further, although the forward-looking statements contained herein are based on information currently available to IRG's management and on the current assumptions, intentions, plans, expectations, estimates, opinions, forecasts, projections and other assumptions made by IRG's management in light of its experience and perception of historical trends, current conditions and expected future developments (such as IRG's future growth, results of operations, performance and opportunities as well as the future of the economic environment in which it operates), as well as other factors that IRG's management believes are appropriate and reasonable in the circumstances and on the date of this press release, there can be no assurance that such assumptions, intentions, plans, expectations, estimates, opinions, forecasts, projections and other assumptions will prove to be correct or that actual results will not differ materially from those anticipated in such forward-looking statements.

Forward-looking statements are provided herein for the purpose of giving information about IRG's current strategic priorities, expectations and plans, thereby allowing investors and others to get a better understanding of IRGI'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. IRG assumes no obligation to update or revise 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. IRG therefore cannot describe the expected impact in a meaningful way or in the same way it presents known risks affecting the business. IRG'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 Offier; Media Relations: ACJ Communication - Daniel Granger 514.840.7990


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890