SIR Royalty Income Fund announces SIR Corp. fiscal 2008 first quarter results



    BURLINGTON, ON, Dec. 20 /CNW/ - SIR Royalty Income Fund (TSX: SRV.UN)
("the Fund") today announced that SIR Corp. ("SIR"), the operating entity from
which the Fund derives distribution income and interest income, has filed its
financial results for the 12-week period ended November 18, 2007 ("first
quarter").
    SIR has advised the Fund that revenue for the first quarter of fiscal
2008 increased 9.8% to $40.0 million compared to $36.4 million in revenue for
the same period a year ago. Increased revenue in the first quarter resulted
from same store sales growth(1) ("SSSG") and the increase in number of
restaurants to 40 at the end of the first quarter of fiscal 2008 from 38 at
the end of the first quarter of fiscal 2007.
    As at November 18, 2007, the Concept Restaurants (Jack Astor's(R), Alice
Fazooli's!(R) and Canyon Creek Chop House(R)) accounted for approximately
88.2% of Pooled Revenue and the Signature Restaurants (reds(R), Far
Niente (R)/Soul of the Vine(R) & Petit Four(TM), Brasserie Frisco(R), and The
Loose Moose Tap & Grill(R)) accounted for approximately 11.8%.
    SIR's loss from continuing operations decreased 50.7% to $1.1 million in
the first quarter of fiscal 2008 compared to $2.2 million for the comparable
period in fiscal 2007.
    SIR's cash provided by continuing operations increased by $0.5 million
for the 12-week period ended November 18, 2007 as compared to the 12-week
period ended November 19, 2006. SIR used cash in continuing investing
activities of $2.7 million and $2.8 million for the first quarter of fiscal
2008 and the first quarter of fiscal 2007, respectively. The cash was used
primarily for the purchase of property and equipment, and restaurant
preopening costs. Fiscal 2008 purchases are the result of the first quarter
renovations of Soul of the Vine, to introduce the innovative bakery concept,
Petit Four, the renovation of the Loose Moose Tap & Grill, as well as
construction costs of the new Jack Astor's in Burlington, Ontario and the
continuing costs for the new Jack Astor's and Canyon Creek restaurants
expected to open later in fiscal 2008.
    SIR has advised the Fund that same store sales(1) ("SSS") for the first
quarter of fiscal 2008 increased 4.1% to $36.9 million compared to
$35.5 million for the comparable period a year ago. SSSG(1) for the 12-week
period ended November 18, 2007 was primarily attributable to the performance
of SIR's Concept Restaurants (Jack Astor's, Alice Fazooli's! and Canyon
Creek).

    
    SSSG(1)                   12-week period ended      12-week period ended
                                November 18, 2007         November 19, 2006
                                  (unaudited)               (unaudited)
    -------------------------------------------------------------------------
    Jack Astor's                     3.1%                      2.0%
    Alice Fazooli's!                 6.0%                      6.5%
    Canyon Creek Chop House          7.1%                      8.0%
    Signature Restaurants            3.1%                      0.1%
    -------------------------------------------------------------------------
    Overall SSSG(1)                  4.1%                      2.9%
    

    During the first quarter of fiscal 2008, a new Jack Astor's restaurant
opened in Burlington, Ontario. The former Jack Astor's restaurant in
Burlington was closed on September 29, 2007. Also during the first quarter of
fiscal 2008, SIR announced that Brasserie Frisco will be closing on December
22, 2007 and a new Jack Astor's is expected to open in the former Brasserie
Frisco location in the first half of calendar year 2008. After evaluating a
range of options, SIR determined that converting Brasserie Frisco into a new
Jack Astor's is the best use of this prime downtown Toronto location.
    The closed Jack Astor's Burlington location and Brasserie Frisco will
both be treated as 2007 Closed Restaurants and are expected to be removed from
the Royalty Pool effective January 1, 2008. SIR is and will be required to pay
a Make-Whole Payment for each of these closed restaurants, respectively, from
their date of closure to December 31, 2007.
    A new Jack Astor's is expected to open in Don Mills, Ontario in the
second half of calendar year 2008 in the same location where a former Jack
Astor's restaurant existed. This former Jack Astor's was closed in fiscal 2006
and removed from the Royalty pool effective January 1, 2007.
    SIR has secured four additional sites for Jack Astor's and Canyon Creek
restaurants with expected openings in calendar year 2008. One of these new
sites is for a Jack Astor's at the corner of Dundas and Yonge Streets in
Toronto, Ontario. Two new sites have been secured, under one lease, for a Jack
Astor's and a Canyon Creek near Toronto's Pearson International Airport. The
fourth site is for a Jack Astor's in Boisbriand, Quebec.
    SIR's 2008 first quarter filings, which include its consolidated
financial statements and management's discussion & analysis, can be accessed
via the Fund's profile on the SEDAR web site at www.sedar.com under "Other".

    About SIR Corp.

    SIR is a privately held Canadian corporation that owns and operates a
portfolio of more than 40 restaurants in Canada. SIR's concept brands include:
Jack Astor's Bar and Grill(R), with 24 locations; Alice Fazooli's!(R), with
five locations; and Canyon Creek Chop House(R), with seven locations. SIR also
operates one-of-a-kind "signature" brands in downtown Toronto, which comprise
the upscale reds(R), Far Niente(R)/Soul of the Vine(R) & Petit Four(TM),
Brasserie Frisco(R) and the Loose Moose Tap & Grill(R). All trademarks related
to the concept and signature brands noted above are used by SIR under a
license agreement with SIR Royalty Limited Partnership in consideration for a
Royalty, payable by SIR to the Partnership, equal to six percent of the
revenue of the 38 restaurants currently included in the Royalty pool. For more
information on SIR Corp. or the SIR Royalty Income Fund, please visit
www.sircorp.com

    About SIR Royalty Income Fund

    The Fund is a trust governed by the laws of the province of Ontario that
receives distribution income from its investment in the SIR Royalty Limited
Partnership and interest income from the SIR Loan. The Fund intends to pay
distributions to unitholders on a monthly basis.

    Caution concerning forward-looking statements
    ---------------------------------------------
    Certain statements in this news release may constitute "forward-looking"
statements which involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
Fund to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. When
used in this document, such statements are such words as "may", "will",
"expect", "believe", "plan", "anticipate", "intend", "estimate" and other
similar terminology. These statements reflect SIR Management's current
expectations regarding future events and operating performance and speak only
as of the date of this document. The Fund and SIR expressly disclaim any
obligation or undertaking to publicly release any updates or revisions to any
forward-looking statements contained herein to reflect any change in
expectations with regard thereto or any changes in events, conditions or
circumstances on which any statement is based.
    In formulating the forward-looking statements contained herein,
management has assumed, among other things, that business and economic
conditions affecting SIR's restaurants and the Fund will continue
substantially in the ordinary course, including without limitation with
respect to industry conditions, general levels of economic activity (including
in downtown Toronto), regulations (including regarding employees, food safety,
tobacco and alcohol), weather, taxes, foreign exchange rates and interest
rates, that there will be no pandemics or other outbreaks of disease or safety
issues affecting humans or animals or food products, and that there will be no
unplanned material changes in its facilities, equipment, customer and employee
relations, or credit arrangements. For more information concerning the Fund's
risks and uncertainties, please refer to the Fund's periodic interim filings
and/or its March 30, 2007 Annual Information Form.

    (1) Same store sales and same store sales growth exclude revenue from
    restaurants which are not included in the Royalty pool, and exclude
    revenue from restaurants opened or closed during the current or prior
    fiscal year and therefore not open for the full period in both years.
    Same store sales growth is the percentage increase in SSS over the prior
    comparable period. SSS and SSSG are non-GAAP measures that do not have
    standardized meanings prescribed by GAAP. However, SIR believes that SSS
    and SSSG are useful measures and provide investors with an indication of
    the change in year-over-year sales. SIR's method of calculating SSS and
    SSSG may differ from those of other issuers and, accordingly, SSS and
    SSSG may not be comparable to measures used by other issuers.

    %SEDAR: 00020914E




For further information:

For further information: Jeff Good, Chief Financial Officer, SIR Corp.,
Tel: (905) 681-2997; Bruce Wigle, Investor Relations, Tel: (416) 815-0700 ext.
228, Email: bwigle@equicomgroup.com


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