Diversified Royalty Corp. (TSX: DIV and DIV.DB) (the
“Corporation” or “DIV”) is pleased to announce its financial
results for the three months ended December 31, 2020 (“Q4 2020”)
and year ended December 31, 2020.
Highlights
- Revenue of $8.9 million for Q4 2020 and $30.5 million for the
year ended December 31, 2020.
- Adjusted revenue of $10.1 million for Q4 2020 and $35.3 million
for the year ended December 31, 2020.
- Distributable cash of $7.1 million for Q4 2020 and $23.7
million for the year ended December 31, 2020.
- Dividend was decreased to $0.01667 per share per month ($0.20
per share on an annualized basis) effective April 2020 given the
uncertainty facing DIV and its royalty partners as a result of the
COVID-19 pandemic.
- Payout ratio of 85.5% for Q4 2020 and 104.1% for the year ended
December 31, 2020.
- Acquired the Oxford Learning Centres, Inc. trademarks and
certain other intellectual property rights (the Oxford Rights”) on
February 20, 2020.
- Bought deal public offering of 10,810,000 common shares for
gross proceeds of $34.6 million, at a price of $3.20 per common
share, on March 5, 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.
Fourth Quarter and Year Results
|
Three months ended December 31, |
|
Year ended December 31, |
(000's) |
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
Mr. Lube |
$ |
4,232 |
$ |
4,240 |
|
$ |
15,414 |
$ |
16,222 |
AIR MILES |
|
1,940 |
|
2,140 |
|
|
7,026 |
|
7,751 |
Sutton |
|
1,033 |
|
1,011 |
|
|
3,415 |
|
4,006 |
Mr. Mikes1 |
|
812 |
|
1,007 |
|
|
1,845 |
|
2,474 |
Oxford2 |
|
879 |
|
- |
|
|
2,720 |
|
- |
Nurse Next Door3 |
|
1,246 |
|
625 |
|
|
4,912 |
|
625 |
Adjusted revenue4 |
$ |
10,142 |
$ |
9,023 |
|
$ |
35,332 |
$ |
31,078 |
1) 2019 figures include royalties and management fees from Mr.
Mikes from the date of the MRM Rights acquisition on May 20,
2019. |
2) 2020 figures include royalties and management fees from
Oxford from the date of the Oxford Rights acquisition on February
20, 2020. |
3) 2019 and 2020 figures include the impact of the DIV Royalty
Entitlement and management fees received from Nurse Next Door, with
2019 figures including such amounts from the date of the
acquisition of the NND Rights closed on November 15, 2019. |
4) Adjusted revenue is a non-IFRS measure and as such, do not
have standardized meetings under IFRS. For additional information
regarding these financial metrics, refer to “Non-IFRS Financial
Measures” in this press release. |
In Q4 2020, DIV generated $8.9 million of
revenue compared to $8.4 million in the three months ended December
31, 2019 (“Q4 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 $10.1 million in Q4 2020
compared to $9.0 million in Q4 2019. Adjusted revenue increased in
Q4 2020 compared to Q4 2019 primarily due to the incremental
adjusted revenues related to the Nurse Next Door royalty
transaction that closed 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 relief for Mr.
Mikes Restaurants Corporation (“Mr. Mikes”) and lower royalty
income from the AIR MILES® licenses.
For the year ended December 31, 2020, DIV
generated $30.5 million of revenue, flat compared to the year ended
December 31, 2019. After taking into account the DIV Royalty
Entitlement related to DIV’s royalty arrangements with Nurse Next
Door, DIV’s adjusted revenue was $35.3 million for the year ended
December 31, 2020 and $31.1 million for the year ended December 31,
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, the acquisition of the MRM Rights from Mr. Mikes
in May 2019 and the addition of four locations to the Mr. Lube
royalty pool 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 relief 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 1.1% in Q4 2020 and -4.4% for the
year ended December 31, 2020, compared to positive SSSG of 2.1% and
4.1%, respectively, in the same prior periods in 2019. Mr. Lube’s
SSSG for the year ended December 31, 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. Due to a
growing number of COVID-19 cases in various regions, certain
governments have increased restrictions to fight the COVID-19
pandemic in Q4 2020 and early 2021, including restrictions aimed to
reduce travel and encourage or mandate work from home arrangements
which restrictions negatively impacted sales at Mr. Lube locations
in the second half of the fourth quarter and in the current year to
date. In January 2021, SSSG for the 140 flagship locations (122 of
which are in the Mr. Lube Royalty Pool) was approximately -7.8%
year-over-year and February 2021 SSSG was -7.7%.
AIR
MILES®: According to
Alliance Data Systems Inc.’s (“ADS”) news release dated January 28,
2021, the number of AIR MILES® reward miles issued decreased by
8.8% in Q4 2020 and 9.9% for the year ended December 31, 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 30.1%
in Q4 2020 and 29.2% for the year ended December 31, 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 9% and 22% in Q4 2020
compared to Q3 2020, respectively, reflecting better business
conditions than in Q3 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 Q4 2020. Royalty income from the AIR MILES® licenses was down
9.3% for the three months and 9.4% for the year ended December 31,
2020 compared to the same prior periods.
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. DIV waived 50% of Sutton’s March 2020 royalty and management
fees that were due in April and 75% of Sutton’s April and May 2020
royalty and management fees (due in May and June 2020,
respectively). However, 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, with the most recent increase effective July 1, 2020.
Mr. Mikes: As a result of the
significant impacts of the COVID-19 pandemic on Mr. Mikes’
business, DIV waived 100% of Mr. Mikes’ fixed royalty and
management fee payment for the period from February 24, 2020 to
July 12, 2020. Partial royalty and management fee relief was
granted to Mr. Mikes for the remainder of 2020. In Q4 2020 and
early 2021, certain governments have implemented increased
restrictions in various regions to combat the growing number of
COVID-19 cases, including restrictions on restaurant operations. As
a result of these restrictions, SSSG in Q4 2020 for the Mr. Mikes
restaurants in the royalty pool, including stores that were
temporarily closed due to the COVID-19 pandemic, was -33%. As some
of these restrictions were subsequently lifted, currently all 43
Mr. Mikes restaurants are open for in-restaurant or patio dining at
a reduced capacity, based on government mandated regulations in
each jurisdiction. Mr. Mikes continues to expect a slow recovery
from the impacts of COVID-19 on its business. Accordingly, DIV
expects continued royalty relief will be required by Mr. Mikes
until such time as all government restrictions are lifted and the
business stabilizes.
Oxford: SSSG for the Oxford
locations in the royalty pool on a constant currency basis was -23%
in Q4 2020 and -26% for the period from February 20, 2020 to
December 31, 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
2020, Oxford management pivoted its business to provide online
tutoring with over 95% of its locations able to provide this
service. In September 2020, over 90% of Oxford’s locations
re-opened for in-centre services at a reduced capacity. However,
due to a growing number of COVID-19 cases in various regions in Q4
2020 and early 2021, certain governments have required the closure
of in-person tutoring at many locations, including Ontario, Quebec,
Alberta, Manitoba and Saskatchewan. Although some of these
restrictions were subsequently lifted, we expect there to be some
softness in the first quarter of 2021. Currently, approximately 85%
of Oxford’s locations are open for in-centre services at a reduced
capacity.
Nurse Next Door: The royalty
entitlement to DIV (the “DIV Royalty Entitlement”) from Nurse Next
Door was $1.2 million in Q4 2020 and $4.8 million for the year
ended December 31, 2020. The DIV Royalty Entitlement from Nurse
Next Door grows at a fixed rate of 2.0% per annum during the term
of the license, with the most recent increase effective October 1,
2020.
As previously disclosed, the termination of the
St. Joseph Health Personal Care Services, LLC (“St. Joseph”) master
license agreement with Nurse Next Door and the purported
termination of franchise agreements by certain franchises (certain
of which disputes have now been settled) may cause Nurse Next Door
to temporarily generate less than fully royalty coverage in the
short term. However, Nurse Next Door has a strong balance sheet
with positive working capital. In addition, 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. During the three months
ended September 30, 2020, Nurse Next Door signed 24 new franchises
primarily in major metropolitan markets (8 in Canada, 13 in the US
and 3 in Australia). The momentum continued in Q4 2020 where Nurse
Next Door signed 17 new franchises (6 in Canada, 9 in the US and 2
in Australia). Nurse Next Door continues to make its fixed royalty
payment to DIV in full, which DIV expects will continue.
Fourth Quarter Commentary
Sean Morrison, President and Chief Executive
Officer of DIV stated, “The second wave of COVID-19 and the new
COVID-19 variants resulted in various governments re-imposing
restrictions to combat the growing number of cases. Although
navigating these restrictions can be challenging, the management
teams of our Royalty Partners remain resilient and dedicated to
supporting their franchisees. While we expect Q1 2021 to be soft as
Alberta, Ontario and Quebec were in lock downs in early Q1 2021,
our royalty partners are well-positioned to recover post
vaccinations. We continue to monitor the developments impacting the
businesses of our Royalty Partners with a focus on long-term
success and preserving shareholder value.”
Distributable Cash and Dividends Declared
In Q4 2020, distributable cash increased to $7.1
million ($0.0585 per share), compared to $6.6 million ($0.0603 per
share) in Q4 2019. The increase in distributable cash was primarily
due to higher adjusted revenue on account of the reasons discussed
above and lower salaries and benefits, partially offset by higher
current tax expense, lower interest income and higher interest
expense. The decrease in distributable cash per share was primarily
due to a higher weighted average number of common shares
outstanding in Q4 2020 compared to Q4 2019, partially offset by the
increase in distributable cash.
For the year ended December 31, 2020,
distributable cash increased to $23.7 million ($0.1998 per share),
compared to $22.3 million ($0.2057 per share) for the year ended
December 31, 2019. The increase in distributable cash was due to
higher adjusted revenue and lower salaries and benefits, largely
offset by lower interest income, higher interest expense, an
increase in professional fees 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
year ended December 31, 2020, partially offset by the increase in
the total distributable cash.
In Q4 2020, the Corporation’s payout ratio was
85.5%, compared to the payout ratio of 93.2% in Q4 2019. The
decrease was primarily due to higher distributable cash and lower
dividends declared, partially offset by a higher weighted average
number of common shares outstanding. The fourth quarter is our best
quarter for payout ratios due to seasonality.
For the year ended December 31, 2020, the
Corporation’s payout ratio was 104.1%, compared to 108.5% in the
prior year. The decrease was primarily due to higher distributable
cash, partially offset by a higher amount of dividends declared and
a higher weighted average number of common shares outstanding.
Dividends declared exceeded distributable cash by $0.9 million.
However, the Corporation’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
Corporation’s shares for participants in the DRIP, the payout ratio
on a cash basis was 99.6% for the year ended December 31, 2020 and
there was no cash shortfall.
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 of
Directors approved the temporary suspension of the DRIP, which was
subsequently reinstated effective with the January 2021 monthly
dividend.
Net Income (Loss)
Net income for Q4 2020 was $0.8 million,
compared to net income of $4.2 million in Q4 2019. Net income
decreased in Q4 2020 primarily due to the non-cash impairment on
the Oxford Rights. Oxford continues to be negatively impacted by
the COVID-19 pandemic, which resulted in reduced capacity for
in-centre services and the temporary closure of in-person tutoring
at various locations. As there is significant uncertainty
surrounding the timing of the recovery of Oxford’s operations to
pre-COVID levels, the Corporation recorded a non-cash impairment of
$6.1 million related to the Oxford Rights, which is discussed in
more detail in the notes to the Corporation’s consolidated
financial statements for the year ended December 31, 2020. The
decrease in net income was also due to higher interest expense and
finance costs, partially offset by higher revenues, lower tax
expense and a fair value gain on financial instruments.
Net loss for the year ended December 31, 2020
was $8.9 million, compared to net income of $14.0 million for the
prior year. The net loss for the year ended December 31, 2020 was
primarily due to the non-cash impairment related to the MRM Rights
and Oxford Rights and the non-cash fair value loss on financial
instruments (primarily on the Company’s investment in NND Holdings
LP and on interest rate swaps). 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
related to the Mr. Mikes trademarks, which is discussed in more
detail in the notes to the Corporation’s consolidated financial
statements for the year ended December 31, 2020. The net loss for
the year ended December 31, 2020 was also due to higher interest
expense, offset by lower tax expense.
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; DIV’s expectation that the termination of the St. Joseph’s
contract and the purported franchise agreement terminations by
certain franchisees (certain of which disputes have now been
settled), 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 there will be some
softness in Oxford’s performance in Q1 2021; DIV’s expectation that
Mr. Mikes will require royalty relief until such time as all
government restrictions are lifted and the business stabilizes; Mr.
Mikes’ expectation that it will experience a slow recovery; DIV’s
expectation that Q1 2021 will be soft, but that DIV’s royalty
partners are well-positioned to recover post vaccinations; DIV’s
focus on DIV’s long-term success and preserving shareholder value;
the details of the increase to the Mr. Lube royalty rate and
addition of the 13 Mr. Lube locations to the Mr. Lube royalty pool
and the expected timing thereof; 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; 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 (including their respective franchisees) than currently
expected and the businesses of DIV’s royalty partners (including
their respective franchisees) may not fully recover post COVID-19;
recent improvement trends being experienced by certain of DIV’s
royalty partners may not continue and may regress, or further
regress, as applicable; 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; governments may re-impose or add further
restrictions on the businesses of DIV’s Royalty Partners (including
their respective franchisees); the rates of recovery for DIV’s
Royalty Partners will be dependent upon, among other things, the
availability and effectiveness of vaccines for the COVID-19 virus,
government responses, rates of economic recovery, precautionary
measures taken by consumers and the rate at which social
restrictions will be lifted; the increase to the Mr. Lube royalty
rate and additions to the Mr. Lube royalty pool may not completed
in accordance with currently expected timing, or at all; the actual
consideration payable by DIV to Mr. Lube for such transactions has
not yet been determined and may be materially different than the
amounts currently estimated, and such transactions 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 11, 2021 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 (including their
respective franchisees) 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
(including their respective franchisees) 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 the increase to the Mr. Lube
royalty rate and additions to the Mr. Lube royalty pool will be
completed on the terms and in accordance with currently expected
timing; vaccination programs will be successful and vaccines
effective, and the expected positive impacts thereof on DIV and the
businesses of its Royalty Partners (including their respective
franchisees) will be consistent with DIV’s expectations; 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 months and year ended December 31,
2020 are consistent with the preliminary results for such period
reported in DIV’s news release dated January 28, 2021.
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 months and year ended
December 31, 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 months and year ended December 31, 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
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