Canada NewsWire
MONTREAL, July 9, 2021
(1) This is a non-GAAP measure. Please refer to the "Non-GAAP Measures" section at the end of this press release. |
MONTREAL, July 9, 2021 /CNW Telbec/ - MTY Food Group Inc. ("MTY", "MTY Group" or the "Company") (TSX: MTY), one of the largest franchisors and operators of multiple restaurant concepts worldwide, reported its results for the second quarter ended May 31, 2021.
"We are satisfied with our second quarter results especially since some of our key markets remained impacted by heavy restrictions throughout the quarter. During this year's second quarter, MTY's network remained impacted by more than 38,000 lost business days. While this marked a sequential improvement over the first quarter, lost business days were higher than in the fourth quarter of last year owing to the December 2020 wave of restrictions in Quebec and Ontario which hadn't yet been lifted at the end of May 2021."
"We are extremely pleased to note that the adjusted EBITDA for the quarter more than doubled over last year to $43.5 million despite the lingering impact of the pandemic, making it one of our best quarters ever. This reflects a marked recovery in Canada as well as organic growth of $15.3 million in the US and International segment. This translated into strong cash flows from operating activities, which reached $29.5 million. This allowed us to further reduce our debt level by $15 million, bringing total repayments since the start of the pandemic to close to $145 million," stated Eric Lefebvre, Chief Executive Officer of MTY.
"The outlook for the industry is clearly improving as government restrictions abate at various speeds. However, the industry continues to face challenges resulting from severe labour shortages and food price inflation. Overall, we are confident about our prospects and aim to reestablish the business momentum we experienced just prior to the pandemic. Since the beginning of the pandemic, we have had to take many difficult but necessary actions, but today, these place us in an excellent financial position with $41.5 million of cash on hand, over $205 million in available credit and ratios that are well within our comfort zone."
"In light of our financial situation and with a more favorable outlook, we feel the time has come to review our capital allocation strategy; we are very proud to restore our quarterly dividend effective immediately, and will be paying a quarterly dividend of $0.185 per share on August 13, 2021, to shareholders registered in the Company's records at the end of the business day on August 3, 2021."
"We have also renewed our Normal Course Issuer Bid and will continue to have the ability to buy back our shares in the future based on our internal circumstances and market conditions. With regards to potential acquisitions, we remain active and are in a strong position to take advantage of opportunities," concluded Mr. Lefebvre.
Financial Highlights
(in thousands of $, except per | Q2-2021 | Q2-2020 | 6 Months | 6 Months |
Revenues | 135,857 | 97,808 | 254,817 | 248,588 |
Adjusted EBITDA(1) | 43,481 | 18,213 | 76,118 | 59,250 |
Adjusted EBITDA per diluted share(1) | 1.76 | 0.74 | 3.08 | 2.39 |
Net income (loss) attributable | 23,028 | (99,126) |
36,425 |
(80,118) |
Cash flows from operations | 29,541 | 19,207 | 60,848 | 50,187 |
Free cash flows(1) | 27,497 | 28,926 | 57,797 | 59,664 |
Free cash flows per diluted | 1.11 | 1.17 |
2.34 |
2.41 |
EPS basic | 0.93 | (4.01) | 1.47 | (3.23) |
EPS diluted | 0.93 | (4.01) | 1.47 | (3.23) |
System sales(1) | 891,500 | 670,700 | 1,652,600 | 1,670,200 |
Digital sales(1) | 203,400 | 146,900 | 418,600 | 245,300 |
(1) This is a non-GAAP measure. Please refer to the "Non-GAAP Measures" section at the end of this press release. |
SECOND QUARTER RESULTS
Network:
Financial:
LIQUIDITY AND CAPITAL RESOURCES
NEAR-TERM OUTLOOK
The Company is closely monitoring the global situation surrounding COVID-19 and taking proactive steps to adapt to the changes for the well-being and safety of its employees, franchisees and customers, and the continuity of its operations and businesses. Given the dynamic nature of the situation, it is not possible to ascertain what impact there may be on the Company's long-term financial performance. MTY is taking the necessary steps to mitigate the potential consequences that this situation may have on its operations, franchisees, partners and service to MTY's customers. Please refer to section "Highlights of Significant Events" in the Company's Management's Discussion and Analysis ("MD&A") for further details on actions taken in response to COVID-19.
In the very short term, management's primary focus is to reopen the restaurants that have been temporarily closed as a result of the pandemic and to rebuild customer confidence by implementing proper safety measures and adjusting the way customers are served. Even after the pandemic is over, customer consumption patterns may shift temporarily or permanently from those traditionally witnessed and MTY will have to adapt to new customer behaviours. Management believes the Company will be able to regain customer confidence in the brands and restore the positive momentum it saw in the first quarter of 2020. The Company's focus, after the pandemic, will still be on innovation, quality of food and customer service in each of the outlets and maximizing the value offered to customers.
The restaurant industry will remain more than ever challenging in the future as customer consumption patterns change and management believes that the focus on the food offering, innovation, consistency and store design will give MTY's restaurants a stronger position to face challenges. Given this difficult competitive context in which more restaurants compete for a finite amount of consumer dollars, each concept needs to preserve and improve the relevance of its offerings to consumers.
For further details, please refer to the MD&A.
CONFERENCE CALL
The MTY Group will hold a conference call to discuss these results on July 9, 2021, at 8:30 AM Eastern Time. Interested parties can join the call by dialing 1-514-400-4402 (Montreal or overseas) or 1-800-399-9540 (elsewhere in North America). Parties unable to call in at this time may access a recording by calling 1-800-770-2030 and entering the passcode 4629934. This recording will be available on Friday, July 9, 2021 as of 11:30 AM Eastern Time until 11:59 PM Eastern Time on Friday, July 16, 2021.
ABOUT MTY FOOD GROUP INC.
MTY Group franchises and operates quick-service, fast casual and casual dining restaurants under more than 80 different banners in Canada, the US 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 40 years, it has been increasing its presence by delivering new concepts of restaurants, making acquisitions, and forging strategic alliances, which 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 6,907 locations, the many flavours of the MTY Group hold the key to responding to the different tastes and needs of today's consumers as well as those of tomorrow.
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA (revenues less operating expenses (excludes income tax, interest, depreciation and amortization and all other income (charges)) plus share of net profit (loss) of a joint venture accounted for using the equity method), system sales, digital sales and free cash flows are widely accepted financial indicators but are not a measurement determined in accordance with International Financial Reporting Standards 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 "Compliance with International Financial Reporting Standards" section of the Company's MD&A.
FORWARD-LOOKING STATEMENTS
Certain information in this press 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 to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. This includes statements regarding the impacts that the novel COVID-19 pandemic may have on the Company's future operations as found in this release. When used in this press 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 press release. Except as required by law, the Company assumes no obligation to update or revise forward-looking information to reflect new events or circumstances. Additional information is available in the Company's MD&A, which can be found on SEDAR at www.sedar.com.
Note to readers: The MD&A, the condensed interim consolidated financial statements and notes thereto for the three and six-months periods ended May 31, 2021, 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.
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