Imvescor Restaurant Group Reports Continuing Strong Results for First Quarter Fiscal 2016

SRS +2.9%, System Sales +3.8% and Operating EBITDA +21%

MONTREAL, March 10, 2016 /CNW/ - Imvescor Restaurant Group Inc. ("IRG" or the "Company") (TSX: IRG), a leading franchisor of restaurants operating 227 locations in Eastern Canada, reported financial results today for the 14 weeks ended January 31, 2016 ("Q1 2016"). This press release should be read in conjunction with the Company's management discussion and analysis and financial statements for Q1 2016 which are available on the Company's website at and have been posted on SEDAR at

"The first quarter of fiscal 2016 saw the continuation of the momentum begun last year as we increasingly benefit from the early success of our strategic plan," said Frank Hennessey, President and Chief Executive Officer of Imvescor Restaurant Group Inc. "It is our third consecutive quarter of positive year-over-year Same Restaurant Sales growth and System Sales growth, and the second in which all our brands reported positive Same Restaurant Sales. Notably, the year-over-year increases in Same Restaurant Sales and System Sales of 2.9% and 3.8%, respectively, were the largest since we launched our strategic plan at the beginning of last year.  In addition, our continued progress on cost management contributed to a 21% year-over-year increase in operating EBITDA."

"As we move forward, we remain firmly focused on continuing to enhance the fundamentals of our business, represented by our four key pillars – Quality of Food, Quality of Service, Value and Ambiance. The Rejuvenation Plan is in full swing, with our first Scores location completed during Q1 2016, for a total of 11 restaurants renovated to date and 26 more planned for fiscal 2016. The improved operating results from these restaurants post-renovation are not only indicative of the potential of the plan but are also continuing to drive participation in the program by franchisees. I want to publicly acknowledge our franchisees and employees, whose hard work and dedication to our guests day in and day out, contributed to another successful quarter," added Mr. Hennessey.

Q1 2016 Financial and Operational Highlights

(All comparable figures are to first quarter 2015 ("Q1 2015") unless otherwise specified.  Note that Q1 2016 had 14 weeks compared to 13 weeks in Q1 2015 and the highlights include variance on a normalized basis unless otherwise noted.)

  • Same Restaurant Sales (SRS) grew 2.9%, an improvement of 3.7 percentage points versus Q1 2015;
  • System Sales grew 12% (3.8% on a normalized basis);
  • Revenue increased 30% (23% on a normalized basis) versus Q1 2015 from increases in royalties and the Company taking over the operations of a manufacturer of certain Trattoria di Mikes licensed retail products temporarily this quarter;
  • Operating expenses increased 25% (18% on a normalized basis) versus Q1 2015 due mainly to the Company taking over the operations of the manufacturer of certain Trattoria di Mikes licensed retail products;
  • EBITDA increased 39% to $4.1 million (29% on a normalized basis) versus $2.9 million in Q1 2015;
  • Operating EBITDA increased 31% to $4.3 million (21% on a normalized basis) versus $3.3 million;
  • Net earnings increased 68% to $2.7 million (56% on a normalized basis) versus $1.6 million in Q1 2015 and, as a percentage of revenue, increased to 18% from 14% in Q1 2015.

Highlights Subsequent to Quarter End

As previously announced, in November 2015, IRG temporarily took over the operations of the manufacturer of certain Trattoria di Mikes licensed retail products to enable IRG to honour its commitments to its grocery partners. IRG entered into a management agreement (the "Management Agreement") with the receiver (the "Receiver") appointed to 4513444 Canada Inc., formerly carrying business under the trade name of "Aliments T&N Foods" ("T&N") in the context of the issuance by the Québec Superior Court of an order in the context of T&N's receivership proceedings under the Bankruptcy and Insolvency Act which culminated in a bankruptcy order rendered on December 22, 2015 against the manufacturer. Under the management agreement, IRG is operating the facility, assuming all expenses and responsibilities pertaining to the manufacturing of the licensed retail products and is collecting the revenues directly from the retailers selling the Trattoria di Mikes retail pizzas.

The Receiver received a conditional bona fide offer from a third party food manufacturer to purchase the T&N assets. In February 2016, IRG and such proposed acquirer of T&N's assets executed a term sheet setting out the key terms and conditions of an agreement for the production of Trattoria di Mikes retail pizzas by the acquirer. This agreement is subject to certain conditions, including court approval of an asset purchase agreement between the Receiver and the acquirer and the successful implementation of the transactions contemplated in that agreement. The Management Agreement will cease to have effect upon completion of the above sale transactions which is scheduled to occur on or about May 4, 2016.


Q1 2016 Selected Financial Data

(in thousands of dollars, where applicable)

Q1 2016

14 weeks ended
January 31, 2016

Q1 2015

13 weeks ended

January 25, 2015

% Change

# of weeks





System Sales (i)

$    99,815

$   89,316


SRS (i)




Number of restaurant operating weeks




Number of restaurants




Number of Company-owned restaurants








Operating expenses




Results from operating activities








EBITDA as a percentage of revenue




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




Free cash flow as a percentage of revenue




Dividends paid




(in thousands of dollars, where applicable)

Q1 2016

 As at

January 31, 2016

Fiscal 2015

As at

October 25, 2015

% Change





Working capital excluding gift cards liability




Total debt, including current portion




Net debt to Operating EBITDA (i)




(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 definitions.


Dividend Declaration

Pursuant to its previously announced dividend policy, the board of directors (the "Board") today declared a dividend of $0.0225 per common share. The quarterly cash dividend will be paid on April 7, 2016 to shareholders of record as of the close of business on March 24, 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 the conference call to discuss Q1 2016 results at 8:30 am E.S.T on Thursday, March 10, 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 Thursday, March 17, 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 56523879.    

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, 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.

"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.

"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.

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 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, 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 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. 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 Officer; Media Relations: ACJ Communication - Daniel Granger 514.840.7990


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