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



    BURLINGTON, ON, March 26 /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 and 24-week periods ended February 10,
2008("second quarter").
    SIR has advised the Fund that revenue for the second quarter of fiscal
2008 increased 7.4% to $41.2 million compared to $38.4 million in revenue for
the same period a year ago. Increased revenue in the second quarter resulted
from same store sales growth(1) ("SSSG") and the increase in number of
restaurants to 39 at the end of the second quarter of fiscal 2008 from 38 at
the end of the second quarter of fiscal 2007. Three new Jack Astor's(R)
restaurants were added to the Royalty Pool effective January 1, 2008, and two
closed restaurants were removed from the Royalty Pool effective January 1,
2008.
    For the 24-week period ended February 10, 2008, revenue for the
restaurants in the Royalty Pool increased 8.6% to $81.2 million compared to
$74.8 million for restaurants in the Royalty Pool for the 24-week period ended
February 11, 2007.
    As at February 10, 2008, the Concept Restaurants (Jack Astor's, Alice
Fazooli's!(R) and Canyon Creek Chop House(R)) accounted for approximately 88%
of Pooled Revenue and the Signature Restaurants (reds(R), Far Niente(R)/Soul
of the Vine(R) & Petit Four(TM), and The Loose Moose Tap & Grill(R)) accounted
for approximately 12%.
    SIR's loss from continuing operations decreased 30.2% to $0.6 million in
the second quarter of fiscal 2008 compared to $0.8 million in the
second quarter of fiscal 2007. SIR's loss from continuing operations totaled
$1.7 million for the 24-week period ended February 10, 2008, down 45.0% from
$3.0 million during the same period a year ago.
    SIR's cash provided by continuing operations decreased by $1.2 million
for the 12-week period ended February 10, 2008 as compared to the 12-week
period ended February 11, 2007. Cash provided by continuing operations
decreased by $0.8 million for the 24-week period ended February 10, 2008 as
compared to the 24-week period ended February 11, 2007. Cash used in investing
activities for the 12-week periods ended February 10, 2008 and February 11,
2007 was $2.7 million and $2.3 million, respectively. Cash used in investing
activities for the 24-week periods ended February 10, 2008 and February 11,
2007 was $5.5 million and $5.2 million, respectively. Purchases of property
and equipment and restaurant pre-opening costs amounted to $2.6 million and
$2.3 million for the 12-week periods ended February 10, 2008 and February 11,
2007, respectively and $5.3 million and $4.7 million for the 24-week periods
ended February 10, 2008 and February 11, 2007, respectively. Fiscal
2008 purchases are a result of the first and second quarter renovations of
Soul of the Vine (conversion to Four(TM) and Petit Four), the first quarter
renovation of The Loose Moose Tap & Grill, the construction costs of the new
Jack Astor's location in Burlington, Ontario and the continuing construction
costs for the new Jack Astor's and Canyon Creek restaurants expected to open
in calendar year 2008.
    SIR has advised the Fund that same store sales(1) ("SSS") for restaurants
in the Royalty Pool for the second quarter of 2008 increased 2.0% to
$37.5 million compared to $36.7 million for the comparable period a year ago.
For the 24-week period ended February 10, 2008, SSS(1) increased 3.2% to
$73.9 million compared to $71.6 million for the comparable period a year ago.
    Snow fall in southern Ontario during Q2 of fiscal 2008 was significantly
higher than average and SIR's Management believes that this had a negative
effect on the SSSG(1) of SIR's Concept and Signature Restaurants. In
particular, in the GTA (where the majority of SIR's restaurants are located),
the snowfall received in Q2 of fiscal 2008 was nearly double the average
snowfall received in Q2 of the preceding five years.

    
    SSSG(1)                                        12-week        24-week
                                                period ended   period ended
                                                 February 10,   February 10,
                                                     2008           2008
                                                  (unaudited)    (unaudited)
    -------------------------------------------------------------------------
    Jack Astor's                                         0.1%           1.6%
    Alice Fazooli's!                                     3.4%           4.6%
    Canyon Creek Chop House                              2.0%           4.4%
    Signature Restaurants                                9.9%           7.9%
    -------------------------------------------------------------------------
    Overall SSSG(1)                                      2.0%           3.2%


    (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.
    


    During the second quarter of fiscal 2008, Brasserie Frisco(R) was closed
and SIR expects to open a new Jack Astor's in the former Brasserie Frisco
location during fiscal 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. Brasserie Frisco was treated
as a 2007 Closed Restaurant and it is expected that the new Jack Astor's will
be added to the Royalty Pool effective January 1, 2009.
    SIR's 2008 second quarter filings, which include its unaudited
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-/Four(TM) & Petit Four(TM), 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 39 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
    ---------------------------------------------
    Statements in this report that are not current or historical factual
    statements may constitute forward-looking information within the meaning
    of securities laws. Such forward-looking statements involve known and
    unknown risks, uncertainties and other factors which may cause the actual
    results, performance or achievements of SIR and 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, estimates and projections regarding future events and
    operating performance and speak only as of the date of this document.
    Readers should not place undue importance on forward-looking statements
    and should not rely upon this information as of any other date. 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, estimates and
    projections 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 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. These
    assumptions, although considered reasonable by SIR Management at the time
    of preparation, may prove to be incorrect. For more information
    concerning the Fund's risks and uncertainties, please refer to the Fund's
    periodic interim filings, its October 2004 final prospectus, and/or its
    March 30, 2007 Annual Information Form, all of which are available under
    the Fund's profile at www.sedar.com.

    %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


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