SIR Royalty Income Fund announces SIR Corp. fiscal 2007 year end results

    BURLINGTON, ON, Nov. 22 /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 16-week period ("fourth quarter") and the 52-week
period ended August 26, 2007 ("fiscal 2007").
    SIR has advised the Fund that revenue for the fourth quarter of fiscal
2007 increased 13.6% to $53.7 million compared to $47.2 million in revenue for
the same period a year ago and increased 9.2% to $167.2 million for fiscal
2007 compared to $153.1 million for fiscal 2006. Increased revenue in the
fourth quarter and fiscal 2007 resulted from same store sales growth(1)
("SSSG") and the increase in number of restaurants to 40 at the end of fiscal
2007 from 37 at the end of fiscal 2006.
    As at August 26, 2007, the Concept Restaurants (Jack Astor's(R), Alice
Fazooli's!(R) and Canyon Creek Chop House(R)) accounted for approximately
88.0% of Pooled Revenue and the Signature Restaurants (reds(R), Far
Niente(R)/Soul of the Vine(R), Brasserie Frisco(R), Armadillo Texas
Grill(R)/the Loose Moose Tap & Grill(R)) accounted for approximately 12.0%.
    SIR's loss from continuing operations decreased 30.2% to $1.0 million in
the fourth quarter of fiscal 2007, compared to $1.4 million in the comparable
period in 2006. SIR's loss from continuing operations decreased 10.4% to
$4.4 million for fiscal 2007 compared to $4.9 million for fiscal 2006.
    SIR's cash provided by continuing operations increased by $1.5 million
for the 16-week period ended August 26, 2007 as compared to the 16-week period
ended August 27, 2006. Cash provided by continuing operations was $7.6 million
for fiscal 2007, an increase of $1.6 million as compared to fiscal 2006. SIR
used cash in continuing investing activities of $3.2 million and $11.1 million
for the fourth quarter and fiscal 2007, respectively, primarily for the
purchase of property and equipment related to new and renovated restaurants.
    On August 9, 2007, SIR entered into a Credit Agreement with a Canadian
Schedule 1 bank. The Credit Agreement is a seven-year facility for a maximum
amount of $16.0 million and is intended primarily to facilitate construction
of new restaurants by SIR. These new restaurants are expected to become part
of the Royalty Pooled Restaurants over the next few years as they are
completed. This is expected to benefit the Fund both as a result of geographic
diversification and increased scale and because new restaurant growth is
designed to be accretive to Fund unitholders. Copies of the Credit Agreement
and the Interlender Agreement have been filed on SEDAR. With this financing in
place, SIR believes that it has sufficient cash resources to fund its current
working capital requirements and current commitments for estimated
construction costs for new restaurants.
    SIR has advised the Fund that same store sales(1) ("SSS") for the fourth
quarter of 2007 increased 5.3% to $47.2 million compared to $44.9 million for
the comparable period a year ago. For fiscal 2007, SSS(1) increased by 3.9% to
$151.9 million compared to $146.3 million for fiscal 2006. SSSG(1) for the 16
and 52-week periods ended August 26, 2007 was primarily attributable to the
strong performance of SIR's Concept Restaurants (Jack Astor's, Alice
Fazooli's! and Canyon Creek).

                                                      16-week       52-week
    SSSG(1)                                        period ended  period ended
                                                    August 26,    August 26,
                                                       2007          2007
                                                    (unaudited)   (unaudited)
    Jack Astor's                                          5.1%          3.0%
    Alice Fazooli's!                                      7.1%          5.9%
    Canyon Creek Chop House                               5.5%          6.3%
    Signature Restaurants                                 4.0%          4.1%
    Overall SSSG                                          5.3%          3.9%

    Subsequent to the end of fiscal 2007, 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 subsequent to the end of
fiscal 2007, SIR announced that Brasserie Frisco would be closed 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
    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 required to pay a
Make-Whole Payment for these closed restaurants from their date of closure to
December 31, 2007.
    SIR's fourth quarter and fiscal 2007 year-end 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
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

    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:

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