MONTREAL, April 6, 2020 /CNW Telbec/ - MTY Food Group Inc. ("MTY" or the "Company") (TSX: MTY), franchisor and operator of multiple concepts of restaurants worldwide announces that it intends to rely on exemptions recently granted by Canadian securities regulatory authorities that allow issuers to delay the issue of the financial statements and MD&A. Without the exemptions, the Company would be required to issue and file its quarterly financial statements and MD&A by April 14, 2020. In response to the global Coronavirus (COVID-19) pandemic, securities regulatory authorities in Canada have granted blanket exemptions allowing companies an additional 45 days to complete their regulatory filings, implying a filing deadline of May 29, 2020 for MTY. The Company is making every effort to issue and file the first quarter interim consolidated financial statements and MD&A at the earliest opportunity and currently expects to file no later than May 15, 2020.
The Company confirms that management and the Company's insiders remain subject to a trading black out period as per its internal Insider Trading Policy. MTY also confirms that since the press release issued on February 24, 2020 when the Company filed its annual financial results and March 16, 2020 regarding the measures taken to help the Company's franchisees, there have been material business developments with regards to temporary restaurant closures and restaurants operating in a reduced capacity due to the COVID-19 pandemic.
As of the date of this release, MTY's network had approximately 2,100 restaurants temporarily closed while the rest of the network typically operates in a reduced capacity. Most of the Company's corporate restaurants are currently closed, with the exception of those operating under the Papa Murphy's brand.
In response to the impact of the global pandemic on MTY's business, the following actions have been taken in an effort to preserve capital resources during this very difficult and unpredictable time:
- The quarterly dividend that would normally have been paid in May 2020 is suspended
- The Company has temporarily laid off over half of its global workforce
- The Company's leadership team has voluntarily reduced their base salaries on a temporary basis
- Capital and operational spending has been reduced to a minimum
- The Company's Annual General Meeting is scheduled to be held on May 1st, 2020 under a hybrid format
Recent global events pertaining to COVID-19 have impacted the Company's ability to rely on timely information for its financial reporting obligations. "Ensuring a safe and healthy working environment for our workforce as well as helping our franchisees and business partners during these difficult times is a primary focus for MTY and we continue to implement and enforce additional precautionary health and safety measures" said Eric Lefebvre, Chief Executive Officer of MTY. "MTY is extremely thankful to all its business partners, financial institutions, landlords and the authorities that are for the vast majority of them making significant sacrifices to help MTY and its franchise partners weather the storm and bounce back when the situation goes back to normal".
Although the disruption is currently expected to be temporary, there is significant uncertainty around the ultimate extent, duration, severity of the pandemic itself and effects on consumer behaviour and other factors associated with or resulting from that pandemic. The impact of the virus and the efforts to contain it affect the business, operations and financial performance of MTY and its franchise network daily. Therefore, as we expect this matter to materially impact the Company's results for at least our second and third quarters of 2020, the related financial impact cannot be reasonably estimated at this time. While MTY cannot forecast its financial impact, the Company expects potential material impacts on the following categories on its second quarter interim consolidated statement of financial position:
- Expected credit losses on accounts receivables, loans receivables and lease receivables
- Impairment of franchise rights and trademarks
- Impairment of goodwill
- Provisions for closed stores, litigations and disputes
- Fair value adjustment on the $100 million credit facility interest rate swap
- Changes to lease liability
The severity of the impact will depend on multiple factors, including the duration of the disruption and assistance from governments, financial institutions, landlords and business partners available to MTY and its franchisees.
Certain information in this News Release may constitute "forward-looking" information that involves known and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance or achievements of the Company or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. When used in this News Release, this information may include words such as "anticipate", "estimate", "may", "will", "expect", "believe", "plan" and other terminology. This information reflects current expectations regarding future events and operating performance and speaks only as of the date of this News Release. Except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances. In addition, the impact of COVID-19 on operational, cash flow and financial condition of the industry in which the Company operates and on the Company itself continues to evolve and any forward looking information set forth herein with respect to such matters is subject to change and actual impact may differ from expectations in a material way.
Additional information is available in the Company's Management Discussion and Analysis, which can be found on SEDAR at www.sedar.com.
On Behalf of the Board of Directors of
MTY Food Group Inc.
Eric Lefebvre, CEO
SOURCE MTY Food Group Inc.
For further information: Eric Lefebvre, CEO at 1-514-336-8885 or by email at [email protected], or visit our website: www.mtygroup.com or SEDAR's website at www.sedar.com under the Company's name.