Diversified Royalty Corp. (TSX: DIV and DIV.DB) (the
“Corporation” or “DIV”) is pleased to announce its financial
results for the three months ended September 30, 2020 (“Q3 2020”)
and nine months ended September 30, 2020.
Highlights
- Revenue of $8.0 million and
adjusted revenue of $9.2 million for Q3 2020.
- Distributable cash of $6.3 million
and payout ratio of 96.0% for Q3 2020.
- Effective May 1, 2021, the Mr. Lube
royalty rate will increase from 7.45% to 7.95% on non-tire sales
and 13 locations will be added to the Mr. Lube royalty pool –
resulting in an estimated accretion of over 1 cent to distributable
cash per share, which is expected to further improve DIV’s payout
ratio.
Third Quarter Results
In Q3 2020, DIV generated $8.0 million of
revenue compared to $8.1 million in the three months ended
September 30, 2019 (“Q3 2019”). After taking into account the DIV
Royalty Entitlement (defined below) related to DIV’s royalty
arrangements with Nurse Next Door Professional Homecare Services
Inc. (“Nurse Next Door”), DIV’s adjusted revenue was $9.2 million
in Q3 2020 compared to $8.1 million in Q2 2019. Adjusted revenue
increased in Q3 2020 compared to Q3 2019 primarily due to the
incremental revenues related to the Nurse Next Door royalty
transaction in November 2019 and the acquisition of the Oxford
Rights from Oxford Learning Centres, Inc. (“Oxford”) in February
2020, partially offset by the impact of the COVID-19 pandemic,
which included royalty and management fee waivers for Mr. Mikes
Restaurants Corporation (“Mr. Mikes”) and lower royalty income from
the AIR MILES® licenses.
For the nine months ended September 30, 2020,
DIV generated $21.6 million of revenue compared to $22.1 million
for the nine months ended September 30, 2019. After taking into
account the DIV Royalty Entitlement related to DIV’s royalty
arrangements with Nurse Next Door, DIV’s adjusted revenue was $25.2
million for the nine months ended September 30, 2020 and $22.1
million for the nine months ended September 30, 2019. The increase
in adjusted revenue was primarily due to the incremental revenues
related to the Nurse Next Door royalty transaction in November
2019, the acquisition of the Oxford Rights in February 2020 and the
acquisition of the MRM Rights from Mr. Mikes in May 2019. The
increase was partially offset by the impact of the COVID-19
pandemic, which included negative same-store-sales-growth (“SSSG”)
at Mr. Lube Canada Limited Partnership (“Mr. Lube”), lower royalty
income from the AIR MILES® licenses and the royalty and management
fee waivers granted to Mr. Mikes and Sutton Group Realty Services
Ltd. (“Sutton”).
Royalty Partner Business Updates
Mr. Lube: SSSG for the Mr. Lube
stores in the royalty pool was 0.5% in Q3 2020 and -6.4% for the
nine months ended September 30, 2020, compared to positive SSSG of
5.9% and 4.8%, respectively, in the same prior periods in 2019. Mr.
Lube’s business continued to stabilize in Q3 2020 as various
governments eased certain of the restrictions put in place to fight
the COVID-19 pandemic and Canadians started driving more. Mr.
Lube’s SSSG for the nine months ended September 30, 2020 was
negatively impacted by the COVID-19 pandemic, which resulted in a
slow-down in consumer activity across the country and
recommendations from all levels of government for people to work
from home and self-isolate.
AIR
MILES®: According to
Alliance Data Systems Inc.’s (“ADS”) news release dated October 29,
2020, the number of AIR MILES® reward miles issued decreased by
7.8% in Q3 2020 and 10.3% for the nine months ended September 30,
2020, reflecting a decline in discretionary spending, including
credit card spend and delays in promotions by sponsors. In
addition, ADS announced that AIR MILES reward miles redeemed
decreased by 36.3% in Q3 2020 and 28.8% for the nine months ended
September 30, 2020, reflecting the impact of the COVID-19 pandemic
on travel-related categories, partially offset by strength from
merchandise redemptions. According to ADS, on a sequential basis,
AIR MILES reward miles issued and redeemed improved 18% and 13% in
Q3 2020 compared to Q2 2020, respectively, reflecting better
business conditions than in Q2 2020. ADS also noted that LoyaltyOne
is continuing to pivot the AIR MILES reward portfolio to emphasize
more non-travel options, which drove higher merchandise redemptions
in Q3 2020. Royalty income from the AIR MILES® licenses was down
11% in the three months and 9.4% in the nine months ended September
30, 2020 compared to the same prior periods.
Nurse Next Door: The royalty
entitlement to DIV (the “DIV Royalty Entitlement”) from Nurse Next
Door was $1.2 million in Q3 2020.
As previously disclosed, St. Joseph Health
Personal Care Services, LLC (“St. Joseph”) terminated its master
license agreement with Nurse Next Door, which covers 42 Nurse Next
Door franchise locations in California, effective August 14, 2020.
Nurse Next Door has advised DIV that this termination resulted in
the payment of a termination fee of approximately US$1.1 million by
St. Joseph to Nurse Next Door in September 2020. Nurse Next Door
expects to focus its business development efforts in California,
which is an attractive market where Nurse Next Door intends to sell
approximately 50 new franchises following the expiry of the
12-month restricted period with St. Joseph, which will end in
August 2021. These new franchises, once sold, are expected to be
subject to Nurse Next Door’s standard franchise fees and other
charges, which are higher than the rates paid by St. Joseph under
the master licence agreement, and are expected by Nurse Next Door
to achieve higher sales volumes than the St. Joseph’s
franchises.
In recent months, Nurse Next Door has received a
high level of interest from existing franchisees about adding to
their current territories and from potential franchisees enquiring
about franchise opportunities. Specifically, in September 2020,
Nurse Next Door sold 19 new franchises in attractive markets (8 in
Canada and 11 in the US). In addition, Nurse Next Door is in the
process of re-selling the territories previously held by franchise
partners that issued notices of their purported termination of
their respective franchise agreements. These territories are also
being sub-divided to optimize the market penetration of the Nurse
Next Door brand. The initial franchise fees generated from the sale
of these territories, along with the incremental franchise revenues
from these new operations are expected to enhance Nurse Next Door’s
profitability and provide improved royalty coverage. In addition,
Nurse Next Door is pursuing legal remedies from all franchisees who
issued notices of their purported termination of their respective
franchise agreements. DIV expects that the termination of the St.
Joseph’s contract and the purported franchise agreement
terminations noted above may cause Nurse Next Door to temporarily
generate less than full royalty coverage in the short term.
However, Nurse Next Door has a strong balance sheet with positive
working capital and no debt outstanding at September 30, 2020.
Accordingly, DIV currently expects Nurse Next Door to continue to
make its royalty payments to DIV in full.
Sutton: Two of Sutton’s primary
markets, Vancouver and Toronto, have experienced strong recoveries
following a period of low transactional activity in April and May
2020. Since June 2020, DIV has been collecting 100% of the fixed
royalty and management fee payments from Sutton. The fixed royalty
payable by Sutton increases at a rate of 2.0% per year.
Oxford: SSSG for the Oxford
locations in the royalty pool on a constant currency basis was -24%
in Q3 2020 and -28% for the period from February 20, 2020 to
September 30, 2020. Oxford’s SSSG was negatively impacted by the
COVID-19 pandemic, which resulted in the temporary suspension of
in-person tutoring services for all its locations. In mid-March,
Oxford management pivoted its business to provide online tutoring
with over 95% of its locations able to provide this service. In
early July, in accordance with regional guidelines, certain Oxford
locations started transitioning back to in-centre services at a
reduced capacity, which resulted in an improvement in Oxford’s Q3
2020 SSSG compared to Q2 2020. Currently, over 90% of Oxford’s 154
locations are open for in-centre services at a reduced
capacity.
Mr. Mikes: Currently, 43 of 45
Mr. Mikes restaurants have re-opened for in-restaurant or patio
dining. Overall SSSG for Mr. Mikes restaurants in the royalty pool,
including stores that were temporarily closed due to the COVID-19
pandemic, was -15% in Q3 2020. Notwithstanding the partial
re-opening of such Mr. Mikes restaurants, Mr. Mikes expects a slow
recovery as we move into fall, including the potential effects of
cooler weather, decreased patio utilization and further government
restrictions on operations. DIV waived 100% of Mr. Mikes’ fixed
royalty and management fee payment for the period from February 24,
2020 to July 12, 2020. For the royalty payment period from July 13,
2020 to October 4, 2020, DIV collected $0.4 million, which
represents 50% of Mr. Mikes royalty payment for the period. DIV
expects continued royalty relief will be required by Mr. Mikes
going forward.
Third Quarter Commentary
Sean Morrison, President and Chief Executive
Officer of DIV stated, “Our royalty partners continue to
proactively support their franchisees as they navigate the evolving
and protracted effects of the COVID-19 pandemic. We remain
steadfast in monitoring the developments impacting the businesses
of our royalty partners with the objective of preserving
shareholder value and the long-term success of DIV and its royalty
partners.”
Distributable Cash and Dividends Declared
In Q3 2020, distributable cash increased to $6.3
million ($0.0521 per share), compared to $5.4 million ($0.0501 per
share) in Q3 2019. The increase in distributable cash was primarily
due to higher adjusted revenue on account of the reasons discussed
above and lower current tax expense, partially offset by lower
interest income and higher interest expense. The increase in
distributable cash per share was primarily due to the increase in
distributable cash, partially offset by a higher weighted average
number of shares outstanding in Q3 2020 compared to Q3 2019.
For the nine months ended September 30, 2020,
distributable cash increased to $16.7 million ($0.1411 per share),
compared to $15.7 million ($0.1453 per share) for the nine months
ended September 30, 2019. The increase in distributable cash was
due to higher adjusted revenue, largely offset by lower interest
income, higher interest expense and higher current tax expense. The
decrease in distributable cash per share was primarily due to a
higher weighted average number of common shares outstanding for the
nine months ended September 30, 2020, partially offset by the
increase in the total distributable cash. As at September 30, 2020,
DIV had $10.3 million of cash on hand.
In Q3 2020, the Corporation’s payout ratio was
96.0%. For the nine months ended September 30, 2020, dividends
declared exceeded distributable cash by $1.9 million, and the
Corporation’s payout ratio was 111.9%. However, the Company’s
dividend reinvestment plan (“DRIP”) was open for participation
during the three months ended March 31, 2020. As a portion of the
dividends declared during the first quarter of 2020 were settled
through a reinvestment in the Company’s shares for participants in
the DRIP, the payout ratio for the nine months ended September 30,
2020 on a cash basis was 105.6%. The shortfall in distributable
cash was funded by a $3.8 million GST refund related to the
acquisition of the Nurse Next Door trademarks.
As announced on March 31, 2020, given the
economic uncertainty facing DIV and its royalty partners as a
result of the COVID-19 pandemic, the Board of Directors of the
Corporation approved changing the monthly dividend from $0.01958
per share per month ($0.2350 per share on an annualized basis) to
$0.01667 per share per month ($0.20 per share on an annualized
basis) effective with the dividend declared in the month of April
2020. The Board of Directors continues to believe the reduction of
the monthly dividend was a prudent measure to preserve capital and
maintain liquidity in the current market environment. In addition,
starting with the April 2020 monthly dividend, the Board approved
the temporary suspension of the DRIP until further notice as the
Board does not believe it is in the best interests of the Company
or its shareholders to issue shares at current prices.
Net Income (Loss)
Net loss for Q3 2020 was $0.9 million, compared
to net income of $5.4 million in Q3 2019. Net income decreased
primarily due to the non-cash fair value loss on financial
instruments related to DIV’s investment in NND Royalties Limited
Partnership (“NND LP”) and interest rate swaps, higher interest
expense and finance costs, as well as lower income from operations,
partially offset by lower tax expense. As discussed above, DIV
expects that Nurse Next Door may temporarily generate less than
full royalty coverage in the short term. As a result, to reflect
the increased risk, DIV increased the discount rate used to
calculate the fair value of its investment in NND LP, which
resulted in the fair value loss.
Net loss for the nine months ended September 30,
2020 was $9.7 million, compared to net income of $9.9 million for
the prior period. The net loss for the nine months ended September
30, 2020 was primarily due to a non-cash impairment related to the
MRM Rights and the non-cash fair value loss on financial
instruments related to DIV’s investment in NND LP, interest rate
swaps and the exchangeable partnership units. In connection with
the COVID-19 pandemic, Mr. Mikes was experiencing constrained cash
flows and advised DIV that Mr. Mikes would likely be unable to pay
its fixed royalty payments to DIV in full. In light of these
developments, the Corporation recorded a non-cash impairment of
$19.8 million ($14.5 million net of tax) related to the Mr. Mikes
trademarks, which is discussed in more detail in the notes to the
Corporation’s consolidated financial statements for Q3 2020. The
net loss for the nine months ended September 30, 2020 was also due
to higher interest expense and lower revenues, slightly offset by
lower tax expense.
Mr. Lube Royalty Rate Increase and Mr. Lube
Royalty Pool Additions
On November 9, 2020, DIV and Mr. Lube entered
into an amendment to the amended and restated limited partnership
agreement of DIV’s direct subsidiary ML Royalties Limited
Partnership (the “LP Amendment”) to confirm the
terms on which (i) the Mr. Lube royalty rate on non-tire sales at
flagship locations (the “Mr. Lube Royalty Rate”) will be increased
by 0.5% from 7.45% to 7.95% effective May 1, 2021, and (ii) the Mr.
Lube royalty pool will be adjusted to include royalties from 13
additional Mr. Lube locations effective May 1, 2021.
Sean Morrison, President and CEO of DIV, stated,
“The agreement to increase in the Mr. Lube Royalty Rate and add 13
locations to the Mr. Lube royalty pool is a testament to Mr. Lube’s
continued growth and strong performance. We believe the acquisition
of these incremental royalties from Mr. Lube will serve as a
prudent use of DIV’s capital, and is expected to be over 1 cent
accretive to distributable cash per share thereby further improving
DIV’s payout ratio. DIV expects to use a combination of
cash-on-hand and incremental debt in ML Royalties Limited
Partnership to fund these transactions at closing on May 1,
2021.”
Mr. Lube Royalty Rate Increase
Mr. Lube has the option, subject to meeting
certain performance criteria (which were agreed to be satisfied
with respect to current Mr. Lube Royalty Rate increase pursuant to
the LP Amendment), to increase the Mr. Lube Royalty Rate in four,
0.5% increments during the life of the royalty. The increase of the
Mr. Lube Royalty Rate from 7.45% to 7.95% on non-tire sales on May
1, 2021 will represent the second such royalty rate increase. The
royalty rate on tire sales will remain unchanged at 2.50%.
The Mr. Lube Royalty Rate increase is currently
expected to generate additional royalty revenue for DIV of
approximately $1.1 million per annum. The total consideration for
the increase of the Mr. Lube Royalty Rate is currently estimated to
be $8.2 million, and will be paid to Mr. Lube on May 1, 2021 in
cash. The actual amount of the consideration payable for the
increase to the Mr. Lube Royalty Rate has not yet been determined
and will be calculated in accordance with the LP Amendment, a copy
of which has been filed on SEDAR at www.sedar.com.
Additions to the Mr. Lube Royalty Pool
Subject to certain performance criteria being
met, the Mr. Lube royalty pool is adjusted annually on May 1 to
include new Mr. Lube locations that have been open since July 1 of
the previous reporting period and to remove Mr. Lube locations that
have been permanently closed during the previous year. Pursuant to
the LP Amendment, such performance criteria have been agreed to be
satisfied with respect to 13 Mr. Lube locations that will be added
to the Mr. Lube Royalty Pool on May 1, 2021.
The initial consideration payable to Mr. Lube on
May 1, 2021 for the estimated net additional royalty revenue from
the 13 Mr. Lube locations to be added to the Mr. Lube royalty pool
is currently estimated to be $6.2 million, representing 80% of the
total current estimated consideration of $7.8 million, which
consideration will be paid in cash. The remaining consideration
payable for the net additional royalty revenue related to 7 of the
13 locations will be paid to Mr. Lube on May 1, 2022 and will be
adjusted to reflect the actual system sales of these locations for
the year ending December 31, 2021. The remaining consideration
payable for the net additional royalty revenue related to 6 of the
13 locations will be paid to Mr. Lube on May 1, 2023 and will be
adjusted to reflect the actual system sales of these locations for
the year ending December 31, 2022. The actual amount of the
consideration payable for the addition of the 13 Mr. Lube locations
to the Mr. Lube Royalty Pool has not yet been determined and will
be calculated in accordance with the LP Amendment, a copy of which
has been filed on SEDAR at www.sedar.com.
About Diversified Royalty Corp.
DIV is a multi-royalty corporation, engaged in
the business of acquiring top-line royalties from well-managed
multi-location businesses and franchisors in North America. DIV’s
objective is to acquire predictable, growing royalty streams from a
diverse group of multi-location businesses and franchisors.
DIV currently owns the Mr. Lube, AIR MILES®,
Sutton, Mr. Mikes, Nurse Next Door and Oxford Learning Centres
trademarks. Mr. Lube is the leading quick lube service business in
Canada, with locations across Canada. AIR MILES® is Canada’s
largest coalition loyalty program with approximately two-thirds of
Canadian households actively participating in the AIR MILES®
Program. Sutton is among the leading residential real estate
brokerage franchisor businesses in Canada. Mr. Mikes currently
operates casual steakhouse restaurants primarily in western
Canadian communities. Nurse Next Door is one of North America’s
fastest growing home care providers with locations across Canada
and the United States as well as in Australia. Oxford Learning
Centres is one of Canada’s leading franchised supplemental
education services in Canada and the United States.
DIV expects to increase cash flow per share by
making accretive royalty purchases and through the growth of
purchased royalties. DIV expects to pay a predictable and stable
dividend to shareholders and increase the dividend as cash flow per
share increases allow.
Forward-Looking Statements
Certain statements contained in this news
release may constitute “forward-looking information” or “financial
outlook” within the meaning of applicable securities laws that
involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
information or financial outlook. The use of any of the words
“anticipate”, “continue”, “estimate”, “expect”, “intend”, “may”,
“will”, ”project”, “should”, “believe”, “confident”, “plan” and
“intends” and similar expressions are intended to identify
forward-looking information or financial outlook, although not all
forward-looking information and financial outlook contain these
identifying words. Specifically, forward-looking information and
financial outlook in this news release includes, but is not limited
to, statements made in relation to: LoyaltyOne continuing to pivot
the AIR MILES® reward portfolio to emphasize more non-travel
options; Nurse Next Door’s expectation that it will focus its
business development efforts in California, where it intends to
sell approximately 50 new franchises following the expiry of the
12-month restricted period ending August 2021; Nurse Next Door’s
expectation that these new franchises, once sold, will be subject
to Nurse Next Door’s standard franchise fees and other charges,
which are higher than the rates previously paid by St. Joseph under
the master licence agreement and will achieve higher sales volumes
than the St. Joseph’s franchises; Nurse Next Door’s intention to
re-sell the territories previously held by the franchise partners
that issued the purported termination notices of their respective
franchise agreements; the expectation that the initial franchise
fees generated from the sale of the territories noted above will
enhance Nurse Next Door’s profitability and provide improved
royalty coverage; DIV’s expectation that the termination of the St.
Joseph’s contract and the purported franchise agreement
terminations by certain franchisees, may cause Nurse Next Door to
temporarily generate less than full royalty coverage in the short
term; DIV’s expectation that Nurse Next Door will continue to make
its fixed royalty payments in full; DIV’s expectation that Mr.
Mikes will require royalty relief going forward; Mr. Mikes’
expectation that it will experience a slow recovery, including the
potential effects of cooler weather, decreased patio utilization
and further government restrictions on operations in the fall;
DIV’s royalty partners continuing to proactively support their
franchisees; DIV’s objective to preserve shareholder value and the
long-term success of DIV and its Royalty Partners; the terms and
details of the increase to the Mr. Lube Royalty Rate and addition
of the 13 Mr. Lube locations to the Mr. Lube royalty pool,
including the estimated consideration payable by DIV to Mr. Lube
and the expected timing thereof under the LP Amendment; DIV’s
belief that the transactions contemplated under the LP Amendment
will be over 1 cent accretive to distributable cash per share
thereby further improving DIV’s payout ratio; DIV’s expectation
that it will use a combination of cash on hand and incremental debt
in ML Royalties Limited Partnership to fund the transactions
contemplated under the LP Amendment; and DIV’s intention to pay
monthly dividends to shareholders; and DIV’s corporate objectives.
These statements involve known and unknown risks, uncertainties and
other factors that may cause actual results or events, performance,
or achievements of DIV to differ materially from those anticipated
or implied by such forward-looking information and financial
outlook. DIV believes that the expectations reflected in the
forward-looking information and financial outlook included in this
news release are reasonable but no assurance can be given that
these expectations will prove to be correct. In particular, risks
and uncertainties include: Mr. Mikes may not make its fixed royalty
payments to DIV, in whole or in part; the impact of the termination
by St. Joseph of the master licence agreement on Nurse Next Door’s
business could be greater than expected; Nurse Next Door may not be
successful in selling new franchises in the territories currently
covered by the St. Joseph master licence agreement or those
territories covered by the franchisees that have recently purported
to terminate their franchise agreements, or may be delayed in
completing such sales or may not complete such sales on terms
currently contemplated; Nurse Next Door may not realize the
expected financial benefits of re-selling franchises in such
locations; Nurse Next Door may experience constrained cash flows
and could potentially request some form of royalty relief from DIV
in the future, or fail to make all or a portion of its royalty
payments and/or draw on its credit facilities in order to fund its
royalty payments to DIV; DIV’s royalty partners may request further
royalty relief; COVID-19 may have a more significant negative
impact on DIV and its royalty partners than currently expected and
the businesses of DIV’s royalty partners may not fully recover post
COVID-19; current improvement trends being experienced by certain
of DIV’s royalty partners may not continue and may regress;
recently re-opened royalty partner locations may be required to
temporarily close in the future; royalty partner locations that are
temporarily closed may not reopen; franchisee support provided by
DIV’s royalty partners to their respective franchisees may be
reduced or terminated at any time, which may negatively impact the
franchisees and the royalties payable to DIV; the transactions
contemplated under the LP Amendment may not completed in accordance
with currently expected timing, or at all; the actual consideration
payable by DIV to Mr. Lube for the transactions contemplated under
the LP Amendment has not yet been determined and may be materially
different than the amounts currently estimated; the transactions
contemplated under the LP Amendment may be less accretive to
distributable cash per share than currently estimated, or not at
all, and therefore may not improve DIV’s payout ratio; DIV may not
be successful in obtaining additional debt financing for purposes
of completing the transactions contemplated under the LP Amendment,
or may only be able to obtain such financing on terms
disadvantageous to DIV; DIV may not be able to make monthly
dividend payments to the holders of its common shares; dividends
are not guaranteed and may be further reduced, suspended or
terminated; or DIV may not achieve any of its corporate objectives.
Given these uncertainties, readers are cautioned that
forward-looking information and financial outlook included in this
news release are not guarantees of future performance, and such
forward-looking information and financial outlook should not be
unduly relied upon. More information about the risks and
uncertainties affecting DIV’s business and the businesses of its
royalty partners can be found in the “Risk Factors” section of its
Annual Information Form dated March 18, 2020 and in DIV’s most
recently filed management’s discussion and analysis, copies of
which are available under DIV’s profile on SEDAR at
www.sedar.com.
In formulating the forward-looking information
and financial outlook contained herein, management has assumed that
DIV will generate sufficient cash flows from its royalties to
service its debt and pay dividends to shareholders; lenders will
provide any necessary waivers required in order to allow DIV to
continue to pay dividends; lenders will provide any necessary
covenant waivers to DIV and its royalty partners; the impacts of
COVID-19 on DIV and its royalty partners will be consistent with
DIV’s expectations and the expectations of management of each of
its royalty partners, both in extent and duration; DIV and its
royalty partners will be able to reasonably manage the impacts of
the COVID-19 pandemic and related government regulations on their
respective businesses; the impact of the termination by St. Joseph
of its master licence agreement on Nurse Next Door’s business will
be consistent with DIV’s current expectations; Nurse Next Door will
be successful in selling new franchises in the territories covered
by the St. Joseph master licence agreement and those territories
covered by the franchisees that have purported to terminate their
franchise agreements, which sales will be completed in accordance
with Nurse Next Door’s currently estimated timing, and such
locations will achieve Nurse Next Door’s financial targets and have
a positive financial impact on Nurse Next Door; Nurse Next Door
will continue to make its royalty payments to DIV in full and will
not request royalty relief in relation to such events; the
transactions contemplated under the LP Amendment will be completed
on the terms and in accordance with currently expected timing; and
DIV will be able to obtain debt financing for such transactions on
reasonable terms. These assumptions, although considered reasonable
by management at the time of preparation, may prove to be
incorrect.
To the extent any forward-looking information in
this news release constitute a “financial outlook” within the
meaning of applicable securities laws, such information is being
provided to provide investors with an estimate of the financial
impact to DIV of the increase to the Mr. Lube Royalty Rate and the
addition of 13 Mr. Lube locations to the Mr. Lube royalty pool on
May 1, 2021.
All of the forward-looking information and
financial outlook in this news release is qualified by these
cautionary statements and other cautionary statements or factors
contained herein, and there can be no assurance that the actual
results or developments will be realized or, even if substantially
realized, that it will have the expected consequences to, or
effects on, DIV. The forward-looking information and financial
outlook in this news release is made as of the date of this news
release and DIV assumes no obligation to publicly update or revise
such information to reflect new events or circumstances, except as
may be required by applicable law.
DIV notes that the financial results reported in
this news release for the three and nine months ended September 30,
2020 are consistent with the preliminary results for such period
reported in DIV’s news release dated October 29, 2020.
Non-IFRS Financial Measures
Management believes that disclosing certain
non-IFRS financial measures provides readers with important
information regarding the Corporation’s financial performance and
its ability to pay dividends and the performance of DIV’s royalty
partners. By considering these measures in combination with the
most closely comparable IFRS measure, management believes that
investors are provided with additional and more useful information
about the Corporation and its royalty partners than investors would
have if they simply considered IFRS measures alone. The non-IFRS
financial measures do not have standardized meanings prescribed by
IFRS and therefore are unlikely to be comparable to similar
measures presented by other issuers. Investors are cautioned that
non-IFRS measures should not be construed as a substitute or an
alternative to cash flows from operating activities as determined
in accordance with IFRS.
“Adjusted revenue”, “DIV Royalty Entitlement”,
“distributable cash”, “same store sales growth” or “SSSG”, and
“payout ratio” are used as non-IFRS measures in this news release.
For further details, see the “Description of Non-IFRS and
Additional IFRS Measures” in the Corporation’s management’s
discussion and analysis for the three and nine months ended
September 30, 2020, a copy of which is available on SEDAR at
www.sedar.com.
Third Party Information
This news release includes information obtained
from third party company filings and reports and other publicly
available sources. Although DIV believes these sources to be
generally reliable, such information cannot be verified with
complete certainty. Accordingly, the accuracy and completeness of
this information is not guaranteed. DIV has not independently
verified any of the information from third party sources referred
to in this news release nor ascertained the underlying assumptions
relied upon by such sources.
THE TORONTO STOCK EXCHANGE HAS NOT
REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE
ACCURACY OF THIS RELEASE.
Additional Information
The information in this news release should be
read in conjunction with DIV’s audited consolidated financial
statements and management’s discussion and analysis (“MD&A”)
for the three and nine months ended September 30, 2020, which are
available on SEDAR at www.sedar.com.
Additional information relating to the
Corporation and other public filings, is available on SEDAR at
www.sedar.com.
Contact: Sean Morrison, President and Chief
Executive Officer Diversified Royalty Corp. (604) 235-3146
Greg Gutmanis, Chief Financial Officer and VP
Acquisitions Diversified Royalty Corp. (604) 235-3146
Diversified Royalty (TSX:DIV.DB)
Historical Stock Chart
From Jun 2024 to Jul 2024
Diversified Royalty (TSX:DIV.DB)
Historical Stock Chart
From Jul 2023 to Jul 2024