Imvescor Restaurant Group Reports Results for Second Quarter of Fiscal 2017

Company Reports Eighth Consecutive Quarter of Same Restaurant Sales Growth

MONTREAL, June 9, 2017 /CNW Telbec/ - Imvescor Restaurant Group Inc. ("IRG" or the "Company") (TSX: IRG), a leading franchisor of restaurants with 260 locations in Eastern Canada, reported financial results today for the 13 and 26 weeks ended April 30, 2017 ("Q2 2017" and "YTD 2017"). This press release should be read in conjunction with the Company's management discussion and analysis (the "MD&A") and unaudited condensed consolidated interim financial statements for Q2 2017 which are available on the Company's website at and have been posted on SEDAR at

"Same Restaurant Sales increased for the eighth consecutive quarter on the strength of contributions from Toujours Mikes, Baton Rouge and our latest acquisition, Ben & Florentine," said Frank Hennessey, President and Chief Executive Officer of IRG. "Ongoing execution against our strategic plan, in combination with the acquisition of Ben & Florentine, supported solid growth across key financial metrics including a 2.4% improvement in Same Restaurant Sales ("SRS") with four out of five brands showing SRS growth.  This growth helped contribute to a 9.8% increase in revenue, a 5.2% improvement in Operating EBITDA and a 12.2% increase in net earnings over Q2 2016."

"As an organization, we remain focused on the four pillars that are supporting the ongoing improvement in our business, including franchisee performance and profitability. During the second quarter, we continued to streamline menus across our brands and invest in training initiatives to support improved guest experience. We also accelerated the pace of our restaurant rejuvenation plan ("RRP") by completing the renovation of eight restaurants, more than doubling the number of renovations completed in the first quarter, and opened four new Ben & Florentine restaurants.  Looking to the second half of the fiscal year, the RRP remains a core priority as does the opening of new Ben & Florentine, Toujours Mikes and Scores locations. We are also continuing to look for ways to improve the agility and efficiency of the organization over the longer term to ensure we capitalize on emerging new business opportunities that can support further growth."  

Q2 2017 Financial and Operational Highlights

(All comparable figures are to the second fiscal quarter 2016 ("Q2 2016") unless otherwise specified. Note that Q1 2017 had 13 weeks compared to 14 weeks in Q1 2016 and the year-to-date highlights include variances on a normalized basis, removing the impact of the additional week in Q1 2016.)

  • Q2 2017 SRS grew 2.4% over SRS growth of 1.2% in Q2 2016, representing eight consecutive quarters of positive overall SRS growth. On a year-to-date basis, SRS grew 1.8% over SRS growth of 2.1% in year-to-date fiscal 2016, led by Toujours Mikes, Baton Rouge and Ben & Florentine.
  • Eight restaurants were renovated under the RRP in Q2 2017 and 11 in YTD 2017. A total of 44 restaurants have been renovated since the inception of the RRP.
  • Four new Ben & Florentine restaurants were opened during Q2 2017.
  • Q2 2017 and year-to-date System Sales increased 5.4% and 2.2%, respectively, on a normalized basis, primarily from the newly acquired Ben & Florentine brand, partially offset by restaurant closures.
  • Q2 2017 and YTD results from operating activities decreased 5.4% and 12.0%, respectively (6.7% on a normalized basis).
  • Q2 2017 Operating EBITDA increased 5.2% from Q2 2016, mostly from the two-month contribution of the Ben & Florentine brand acquired during the quarter and improved results from the Bâton Rouge and Toujours Mikes brands, partially offset by increased share based compensation, a lower retail contribution from the shifting of promotional activities to later in fiscal 2017, listing fees for new retail products and income recognized in Q2 2016 on a supplier agreement for certain Toujours Mikes licensed retail products. Operating EBITDA increased 5.6% on a normalized basis for year-to-date fiscal 2017.
  • Q2 2017 net earnings increased 12.2% from Q2 2016 and on a year-to-date basis increased 3.9% (7.9% on a normalized basis).
  • Q2 2017 Free cash flow increased 15.5% from Q2 2016 due to an increase in cash flows generated from operating activities, partly offset by renovations at company-owned restaurants during the quarter. On a year-to-date basis, free cash flow decreased 31.8% over the comparable period of fiscal 2016 (28.5% on a normalized basis) due to the corporate buy back of a franchised location and renovations at three company-owned restaurants.

Highlights Subsequent to Quarter End

On March 7, 2017, the Company announced that it had entered into a binding definitive agreement to sell substantially all of the assets of its wholly-owned subsidiary Groupe Commensal Inc., to an affiliate of Pasta Romana Foods Inc. for an aggregate sum of approximately $4.2 million payable upon closing. Management believes that the divestiture of Commensal is consistent with IRG's desire to remain focused on its core restaurant franchising business and to remain an asset light entity. The transaction is scheduled to close on July 14, 2017 and is subject to certain customary closing conditions and purchase price adjustments.

Capital Allocation Strategy

On April 15, 2015, the Company announced a strategic plan and approach to capital allocation that charts a roadmap for the transformation and growth of the Company until the end of fiscal 2018, including an investment by the Company of up to $5.5 million over that period of time to rejuvenate its restaurant network under the RRP. To date, the Company has renovated 44 restaurants, and expects to renovate over 125 restaurants in total under the RRP. Since April 15, 2015, being the date of the announcement of the strategic plan, the trading price of the common shares of the Company has more than doubled from $1.79 to $3.80. Finally, the Company fully repaid its long-term debt in fiscal 2016, and used the availability under its credit facility to fund a portion of the Ben & Florentine acquisition in Q2 2017.

On January 13, 2016, the board of directors of the Company (the "Board") approved an increase of 12.5% in the Company's quarterly cash dividend payable under the Company's dividend policy 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 renewed its normal course issuer bid, which allows for the repurchase and cancellation of up to 3,024,297 common shares during the period commencing January 20, 2017 and ending no later than January 19, 2018, representing approximately 5% of the 60,485,954 common shares outstanding as at the close of market on January 9, 2017.

In addition to the expansion of its business through organic growth under the four-pillar strategy, the Company is continuing its pursuit of other brands it can add to its portfolio via acquisition.  The goal of the Company's acquisition strategy is to leverage its current platform and to seek opportunities to expand its base in other markets. The Company plans on using cash on hand and available capital under its credit facility to finance the cash portion of such acquisitions while using its common shares 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 IRG.

Q2 2017 Selected Financial Data

(in thousands of dollars, where applicable)



April 30,


May 1,



April 30,


May 1,



Number of weeks





System Sales (i)

$  98,184

$  93,154


$  190,189

$  192,969


SRS (i)







Restaurant operating weeks







Restaurant count









Consolidated results:








Operating expenses







Results from operating activities














EBITDA as a % of revenue 







Restaurant rejuvenation plan expense







Operating EBITDA (i)







% of Adjusted revenue (i)







% of System Sales







Profit from discontinued operations, net of tax







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











Working capital excluding gift cards liability




Total debt





EBITDA, Operating EBITDA, Adjusted revenue and Free cash flow are non-IFRS measures. Refer to the "Non-IFRS Measures and Financial Metrics" section of this press release for the respective definition of such terms.


Dividend Declaration

Pursuant to its previously announced dividend policy, the Board today declared a dividend of $0.0225 per common share. The quarterly cash dividend will be paid on July 7, 2017 to shareholders of record as of the close of business on June 23, 2017.

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 Q2 results today at 8:30 am E.S.T. 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 Friday, June 16, 2017 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 19240965.

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 five banners: Bâton Rouge®, operating in Québec, Ontario and Nova Scotia in the casual dining segment, Pizza Delight®, operating primarily in Atlantic Canada, in the family/mid-scale segment, Scores® and Toujours Mikes, operating primarily in Québec in the family and casual dining segments and the take-out and/or delivery segments, and Ben & Florentine®, operating primarily in Québec, with individual stores in Ontario and Manitoba, in the breakfast and lunch industry. The Company also licenses to third parties the right to manufacture and sell prepared food products under the Bâton Rouge®, Pizza Delight®, Scores® and Toujours Mikes brands.

This press release refers to trademarks, such as Pizza Delight®, Toujours Mikes, Scores®, Bâton Rouge® and Ben & Florentine®, which are protected under applicable intellectual property laws and are the property of the Company or of one of its subsidiaries. Solely for convenience, such trademarks and tradenames referred to in this press release may appear without the ® or ™ symbol, but such references are not intended to indicate, in any way, that the owner of any such trademarks will not assert, to the fullest extent under applicable law, its rights to these trademarks and tradenames.

Key Performance Metrics and Non-IFRS Measures: The information contained in this press release includes some measures that are not performance measures consistent with International Financial Reporting Standards ("IFRS"). The key performance metrics and non-IFRS measures include measures that are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. Because the measures included in the key performance metrics and the non-IFRS measures do not have standardized meanings prescribed by IFRS, they may not be comparable with similar measures presented by other issuers. 

Key Performance Metrics

"System Sales" is the aggregate sales achieved by all "Pizza Delight", "Toujours Mikes", "Scores", "Bâton Rouge" and "Ben & Florentine" restaurants, whether they are company-owned restaurants or franchised restaurants.  System Sales include sales from existing locations as well as new restaurants. This performance measure indicates the Company's overall growth and reflects the direct impact of restaurant openings and closures. The Company's franchisee and supplier royalty revenues vary directly with the level of System Sales in its franchisee restaurant network.

"Net new restaurants" represents the aggregate number of restaurants openings net of restaurant closures.

"Normalized System Sales" is defined as System Sales less the sales from the additional week of operations in the first quarter of fiscal 2016.

"Same Restaurant Sales" or "SRS" or "SRS growth" 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 a given period against sales in the same period in the previous fiscal year. SRS growth provides the portion of System Sales growth that is from established locations rather than from the opening of Net new restaurants. The Company defines SRS as sales generated by company-owned and franchised restaurants that have been open for at least one year compared to the sales from the same group of restaurants in the comparable period. 

Non-IFRS Measures

The Company uses non-IFRS measures to complement IFRS measures, to provide investors with supplemental measures of its operating performance and to provide further understanding of the Company's results of operations from management's perspective. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Non-IFRS measures should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. The definition and rationale for the use of each non-IFRS measure used by the Company in this press release is as follows:

"EBITDA" is defined as earnings or loss before interest income, interest expense, depreciation and amortization and income tax expense. The Company believes this measure is used by investors to compare and value companies in the Company's industry. The Company uses EBITDA because the measure enables management to assess the Company's operational performance and is a financial indicator of the Company's ability to service and incur debt. The most comparable IFRS financial measure is results from operating activities. Refer to "Reconciliations of Non-IFRS Measures" section of the MD&A for more details.

"Operating EBITDA" is defined as EBITDA adjusted for the following items: impairment or impairment reversal of non-current assets, impairment or impairment reversal of IRG rights, gains 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 expenses, acquisition and disposition costs, gains or losses on derivative financial liability and earnings or losses from discontinued operations. The Company excludes these items because they affect the comparability of the Company's financial results from period to period and could potentially distort the analysis of trends in the performance of its business. Excluding these items does not imply they are non-recurring. 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 this measure and believes it is useful to investors because it can facilitate period-to-period comparisons as it excludes items which, amongst other things, do not necessarily arise as part of the Company's day-to-day operations or are not reflective of the Company's underlying business operations. The most comparable IFRS financial measure is results from operating activities. Refer to "Reconciliations of Non-IFRS Measures" section of the MD&A for more details.

"Normalized Operating EBITDA" is defined as Operating EBITDA less the estimated impact from the additional week of operations in the first quarter of fiscal 2016.

"Free cash flow" is calculated as cash flows from operating activities less cash used for the purchase of property, plant and equipment and intangible assets. The Company believes this measure is used by investors to value businesses and their underlying assets and to evaluate their financial strength and performance. The Company uses Free cash flow because it enables management to assess the Company's ability to generate cash and profits. The most comparable IFRS financial measure is cash flows from operating activities and investing activities. Refer to "Reconciliations of Non-IFRS Measures" section of the MD&A for more details.

"Adjusted revenue" is calculated as revenue less construction sales related to the turnkey operations of Ben & Florentine and sale of manufactured goods related to the manufacture of certain Toujours Mikes licensed retail products on a temporary basis. The Company believes this measure is useful to investors since it facilitates period-to-period comparisons by excluding the new revenue stream from the Ben & Florentine turnkey operations and revenues earned in the first three quarters of fiscal 2016 from the temporary manufacturing of certain Toujours Mikes licensed retail products. The most comparable IFRS financial measure is revenue. Refer to "Reconciliations of Non-IFRS Measures" section of the MD&A for more details.

These non-IFRS measures should not be considered by an investor as alternatives to earnings, indicators of operating performance or cash flows, or as measures of liquidity.  Refer to the Reconciliations of Non-IFRS Measures section of the MD&A for more details.

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 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: risks associated with the acquisition of Ben & Florentine, risks relating to the Company's expectations with respect to the sale of its manufacturing segment, including the timing of the completion of its previously announced transaction, risks associated with quality control, food borne illnesses and health concerns, 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 and brand, the success of the restaurant rejuvenation plan, the Company's dependence on its franchisees' ability to generate revenues and pay franchise fees and other amounts to the Company, 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, negative publicity and its impact on the Company's reputation, compliance with regulations governing confidentiality and privacy 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 health and safety, franchise regulations, compliance with regulations governing alcoholic beverages, environmental risks and regulations, public safety issues, the Company's dependence on technology, 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, payment of dividends, the impact of seasonality and other factors on quarterly operating results, uninsured losses or claims that the Company believes are not economically reasonable to insure, 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 an exhaustive list of the factors that could adversely affect the Company and its results but should, however, be considered carefully.

Further, although the forward-looking statements contained herein are based on information currently available to the Company's management and on the current intentions, plans, expectations, estimates, opinions, forecasts, projections and other assumptions made by the Company's management in light of its experience and perception of historical trends, current conditions and expected future developments (such as the Company'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 the Company'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 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.  Unless otherwise noted or the context indicates, forward-looking statements in this press release speak only as of the date of this press release.

Forward-looking statements are provided herein for the purpose of assisting the Company's security holders, investors and others in understanding its current strategic priorities, expectations and plans, as well as its financial position and results of operations as at and for the periods ended on the date presented. 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 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. 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®:


Toujours Mikes:

Bâton Rouge®:

Ben & Florentine®:


SOURCE Imvescor Restaurant Group Inc.

For further information: Imvescor Restaurant Group Inc: 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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