MONTREAL, July 11, 2018 /CNW Telbec/ - MTY Food Group
Inc. ("MTY" or the "Company") (TSX: MTY), franchisor and operator
of multiple concepts of restaurants, reports today the results of
its operations for the second quarter of its 2018 fiscal year.
Highlights of the second quarter of the 2018 fiscal year:
ACQUISITIONS
On March 1, 2018, the Company,
through the merger of a wholly-owned subsidiary with Imvescor
Restaurant Group Inc. ("IRG"), acquired all the outstanding shares
of IRG. The total consideration for the transaction was
$249.5 million, of which $ 52.4 million was settled in cash and the
remaining in shares. At closing IRG operated 5 brands in
Canada and had 261 locations in
operation.
On March 15, 2018, one of the
Company's wholly-owned subsidiaries acquired the assets of
Grabbagreen®. The total consideration amounted to $ 3.4 million (US$ 2.6
million), of which $3.1
million (US$2.4 million) was
paid on closing. At closing, there were 27 locations in operation
in the United States.
On April 4, 2018, one of the
Company's wholly-owned subsidiaries acquired the assets of
Timothy's World Coffee® and Mmmuffins®. The total
consideration amounted to $1.5
million, of which $1.2 million
was paid on closing. At closing, there were 39 locations in
operation in Canada.
EBITDA AND NET INCOME
- EBITDA for the second quarter was $35.5
million, a historical high for the Company. For the first
six months of 2018, EBITDA has reached $55.4
million, a growth of $14.5
million. Of the $55.4 million,
$34.6 million was generated in
Canada and $20.8 million in the US.
- The year to date growth of $14.5
million included $11.1 million
from acquisitions while $3.4 million
was realized organically.
- Net income attributable to owners for the quarter increased by
13%, to $18.0 million or $0.72 per share ($0.72 per diluted share) when compared to
$16.0 million or $0.75 per share ($0.75 per diluted share) for the same period last
year.
- Normalizing for the non-recurring impacts of a foreign exchange
gain in the second quarter of 2017 and of charges related to
impairment and revaluation of liabilities affecting 2018, net
income attributable to owners would have increased from
$9.2 million in 2017 ($0.43 per share and per diluted share) to
$19.8 million ($0.79 per share and per diluted share) in
2018.
NETWORK SALES
- System sales for the second quarter of 2018 were up 23%
compared to 2017, reaching $744.7
million. For the first half of 2018, sales were $1,287.2 million, up 15% compared to the same
period the year before. The growth is attributable to recent
acquisitions and was realized despite the adverse impact of the
variation in foreign exchange rates.
- Same store sales for the quarter were unchanged compared to the
same period last year. Canadian sales grew by 1.8%, with most
territories showing positive results, with the exception of
Saskatchewan. Sales in
the United States declined by
1.6%, affected by the adverse impact of cooler than normal weather
in some regions more importantly in March and April.
- In the United States, the
network's largest market, the state of California experienced a decline of 5.5%
following a growth of 5.1% in the first quarter. The states of
Florida, New York and Utah, three of the network's biggest markets,
were all positive during the second quarter.
- For the first half, same store sales have increased 0.2%, with
Canada growing 1.4% and
the United States declining
0.7%.
- At the end of the period, MTY's network had 5,734 locations in
operation, of which 85 were corporate and 5,649 were franchised.
The geographical split of MTY's locations remained steady with 44%
in the United States, 47% in
Canada and 9% abroad.
- Same store sales for Imvescor restaurants, which are not
included in the consolidated same store sales, have grown by 4.2%
since the closing of the transaction on March 1st, 2018.
LIQUIDITY AND CAPITAL RESOURCES
- At the end of the quarter, the Company had $45.7 million of cash on hand, and a long-term
debt of $292.6 million in the form of
holdbacks on acquisition and bank facilities. Factoring in the
$11.6 million of holdbacks payable
had been presented as income taxes payable, total net debt is
currently $258.5 million
- Excluding the variation in non-cash working capital items,
income taxes and interest paid, operations generated $35.9 million in cash flows during the second
quarter of 2018, compared to $27.6
million in 2017.
SELECTED FINANCIAL
INFORMATION
|
|
(in thousands of
$, except per share information)
|
|
|
Three-month period
ended May 31
|
Six-month period
ended May 31
|
|
|
|
|
2018
|
2017
|
Variance
|
2018
|
2017
|
Variance
|
|
|
|
|
|
|
|
Revenues
|
89,829
|
69,962
|
28%
|
153,544
|
133,978
|
15%
|
|
|
|
|
|
|
|
Operating
expenses
|
54,323
|
45,367
|
20%
|
98,126
|
93,047
|
5%
|
|
|
|
|
|
|
|
EBITDA
|
35,506
|
24,595
|
44%
|
55,418
|
40,931
|
35%
|
|
|
|
|
|
|
|
Amortization and
depreciation charges
|
7,312
|
6,284
|
16%
|
12,910
|
12,824
|
1%
|
Interest on long-term
debt
|
3,219
|
2,444
|
32%
|
5,666
|
5,145
|
10%
|
|
|
|
|
|
|
|
Foreign exchange
gain
|
89
|
5,984
|
(99%)
|
49
|
619
|
(92%)
|
|
|
|
|
|
|
|
Other income and
(charges), including interest
|
(2,019)
|
577
|
n/a
|
(1,961)
|
963
|
n/a
|
Income before
taxes
|
23,045
|
22,428
|
3%
|
34,930
|
25,544
|
37%
|
|
|
|
|
|
|
|
Net income
attributable to shareholders
|
18,040
|
16,033
|
13%
|
63,372
|
18,048
|
251%
|
Basic and diluted
EPS
|
$0.72
|
$0.75
|
|
$2.72
|
$0.84
|
|
|
|
|
|
|
|
|
Normalized net income
attributable to shareholders
|
19,776
|
9,235
|
114%
|
28,908
|
16,834
|
72%
|
Normalized and
diluted EPS
|
$0.79
|
$0.43
|
|
$1.24
|
$0.79
|
|
|
|
|
|
|
|
|
Note: These are
financial highlights only. Management's Discussion and Analysis,
the condensed interim consolidated financial statements and notes
thereto for the quarter ended May 31, 2018 are available on the
SEDAR website at www.sedar.com and on the Company's
website at www.mtygroup.com.
|
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. 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.
_____________________________________
Stanley Ma, Chairman, President & CEO
SOURCE MTY Food Group Inc.