- Network sales increased 24%, owing to the acquired concepts
and a slightly positive same store sales growth.
- Revenues increased 26% to $91.2
million compared to $72.4
million last year.
- EBITDA(1) increased 55% to $39.6 million, a historical high for the Company,
versus $25.6 million last
year.
- Net income attributable to shareholders increased
85%, to $22.3 million or
$0.89 per share ($0.88 per diluted share), versus $12.0 million and $0.56 per share (basic and diluted) last
year.
- Cash flows generated by operating activities were
$28.4 million, compared to
$24.9 million. Operating cash flow
before variation in non-cash working capital items, income taxes
and interest paid(1) increased to $38.1 million, compared to $27.3 million last year.
- Acquired substantially all of the assets of the sweetFrog
Premium Frozen Yogurt franchise system on September 26, 2018.
MONTREAL, Oct. 10, 2018 /CNW Telbec/ - MTY Food Group Inc.
("MTY" or the "Company") (TSX: MTY), franchisor and operator of
multiple concepts of restaurants, reported today its results for
the third quarter ended August 31,
2018.
"We are extremely pleased with our third quarter results with
EBITDA marking a historical high for the Company in a seasonally
strong period. Our results benefited from a strong performance from
some of our recent acquisitions, more particularly Imvescor
Restaurant Group and The Counter Custom Burgers, as well as cost
control initiatives and operational leverage which together drove
EBITDA margins to new levels," said Eric
Lefebvre, Chief Financial Officer of MTY. Looking forward,
we will focus on maximizing shareholder value by integrating recent
acquisitions, adding new locations of our existing brands and
seeking potential acquisitions to increase market share."
|
|
|
|
|
Financial
Highlights (in thousands
of $, except per share information and margin)
|
Q3-18
|
Q3-17
|
YTD
Q3-18
|
YTD
Q3-17
|
System
Sales
|
787,900
|
634,900
|
2,075,100
|
1,757,600
|
Revenues
|
91,236
|
72,372
|
244,780
|
206,350
|
EBITDA(1)
|
39,578
|
25,576
|
94,996
|
66,507
|
EBITDA margin
(%)(1)
|
43.4%
|
35.3%
|
38.8%
|
32.2%
|
Net income
attributable to shareholders
|
22,275
|
12,035
|
85,647
|
30,083
|
EPS basic
|
0.89
|
0.56
|
3.58
|
1.40
|
EPS
diluted
|
0.88
|
0.56
|
3.58
|
1.40
|
|
(1) This is a
non-IFRS measure. Please refer to the "Non-IFRS Measures" section
at the end of this press release.
|
THIRD QUARTER RESULTS
Network:
- At the end of the period, MTY's network had 5,690 locations in
operation, of which 75 were corporate and 5,615 were franchised.
The geographical split of MTY's locations remained steady with 44%
in the United States, 47% in
Canada and 9% abroad.
- System sales were up 24% compared to 2017, reaching
$787.9 million. The growth is
primarily attributable to recent acquisitions.
- Same store sales were slightly positive compared to the same
period last year. Canadian sales grew by 1.2%, with most
territories showing positive results, with the exception of
Saskatchewan which remains under
significant pressure following the introduction of the meal tax in
the second quarter of 2017. Sales in the
United States declined slightly by 0.3%, affected by
California, Arizona and Oregon.
- Same store sales for Imvescor restaurants, which are not
included in the consolidated same store sales, have grown by 0.7%
in the third quarter.
MTY Results:
- The Company's revenue increased 26%, from $72.4 million to $91.2
million mainly driven by the acquisition of Imvescor
Restaurant Group in Canada and The
Counter Custom Burger.
- Cost of sales and other operating expenses increased 10%, from
$46.8 million to $51.7 million, mainly driven by acquisitions. As
a percentage of sales, cost of sales and other operating expenses
decreased from 64.7% to 56.6%, reflecting operational
leverage.
- EBITDA increased 55% to $39.6
million, or 43% of sales, a historical high for the Company,
as compared to $25.6 million, or 35%
of sales for the same period last year.
- Net income attributable to shareholders increased by 85%, to
$22.3 million or $0.89 per share ($0.88 diluted) when compared to $12.0 million or $0.56 per share for the same period last
year.
NINE-MONTH RESULTS
System sales were $2,075.1
million, up 18% compared to the same period the year before.
Same store sales increased 0.1%, with Canada growing 1.3% and the United States declining 0.6%.
EBITDA increased 43% to $95.0
million, or 39% of sales, as compared to $66.5 million, or 32% of sales for the same
period last year. Net income attributable to shareholders increased
to $85.6 million or $3.58 per share (basic and diluted) when compared
to $30.1 million or $1.40 per share for the same period last year,
mainly because of the adjustment to deferred income taxes arising
from the change in prospective tax rates in the United States.
LIQUIDITY AND CAPITAL RESOURCES
- During the third quarter, cash flows generated by operating
activities were $28.4 million,
compared to $24.9 million for the
same period in 2017. Excluding the variation in non-cash working
capital items, income taxes and interest paid, operations generated
$38.1 million in cash flows during
the third quarter of 2018, compared to $27.3
million in 2017.
- As at August 31, 2018, the
Company had $49.1 million of cash on
hand, and a long-term debt of $273.5
million in the form of holdbacks on acquisition and bank
facilities. Factoring in the $11.7
million of holdbacks payable had been presented as income
taxes payable, total net debt is currently $236.1 million.
SUBSEQUENT EVENT
On September 26, 2018, the Company
announced that one of its wholly-owned subsidiaries had acquired
substantially all of the assets of the sweetFrog Premium Frozen
Yogurt franchise system ("sweetFrog') for a consideration of
approximately US$35 million. A total
of approximately US$28.9 million was
paid on closing, financed from MTY's cash on hand and existing
credit facilities, while US$2.6
million in liabilities was assumed and US$3.5 million was held back.
DIVIDEND
On October 10, 2018, the MTY Group
Inc. Board of Directors declared a quarterly dividend of
$0.15 per share payable on
November 15, 2018 to shareholders
registered in the Company's records at the end of business on
November 5, 2018. This dividend is an
eligible dividend for income tax purposes.
CONFERENCE CALL
MTY Group will hold a conference call to discuss these results
on October 10, 2018, at 8:30 AM Eastern Time. Interested parties can join
the call by dialing 1-647-788-4922 (Toronto or overseas) or 1-877-223-4471
(elsewhere in North America).
Parties unable to call in at this time may access a recording by
calling 1‑800-585-8367 and entering the passcode 8895705. This
recording will be available on Wednesday,
October 10, 2018 as of 11:00 AM
Eastern Time until 11:59 PM Eastern Time on Wednesday,
October 17, 2018.
ABOUT MTY FOOD GROUP INC.
MTY Group franchises and operates quick-service and casual
dining restaurants under approximately 75 different banners in
Canada, the United States and internationally. Based
in Montreal, MTY is a family whose
heart beats to the rhythm of its brands, the very soul of its
multi-branded strategy. For over 35 years, it has been increasing
its presence by delivering new concepts in quick-service
restaurants and making acquisitions and strategic alliances that
have allowed it to reach new heights year after year. By combining
new trends with operational know-how, the brands forming the MTY
Group now touch the lives of millions of people every year. With
approximately 5,700 locations, the many flavours of the MTY Group
have the key to responding to the different tastes and needs of
consumers today and tomorrow.
NON-IFRS FINANCIAL MEASURES
EBITDA (earnings before interest, taxes, depreciation and
amortization), same-store sales growth, system sales, operating
cash flow before variation in non-cash working capital items,
income taxes and interest paid are widely accepted financial
indicators but are not a measurement determined in accordance with
International Financial Reporting Standards ("IFRS") and may not be
comparable to those presented by other companies. The Company uses
these measures to evaluate the performance of the business as they
reflect its ongoing operations. Refer to the section "Compliance
with International Financial Reporting Standards" in the Company's
MD&A.
FORWARD-LOOKING STATEMENTS
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.
Note to readers: Management's Discussion and
Analysis, the condensed interim consolidated financial statements
and notes thereto for the third quarter ended August 31, 2018 are available on the SEDAR
website at www.sedar.com and on the Company's website at
www.mtygroup.com.
SOURCE MTY Food Group Inc.