Canada NewsWire
MONTREAL, Oct. 9, 2020
Note that effective December 1, 2019, the Company implemented IFRS 16, Leases, but has not restated comparatives for the 2019 reporting period, as permitted under the specific transitional provisions in the standard. Please refer to the section Changes in accounting policies in the Management's Discussion and Analysis for further details.
MONTREAL, Oct. 9, 2020 /CNW Telbec/ - MTY Food Group Inc. ("MTY" or the "Company") (TSX: MTY), one of the largest franchisors and the operator of multiple concepts of restaurants in North America, reported today its results for the third quarter ended August 31, 2020.
"We are extremely pleased with our third quarter results given the current context. While our system sales were down 17% year-over-year due to the pandemic, our adjusted EBITDA, net income attributable to shareholders, cash flows from operations and free cash flows all surpassed last year. This improvement was driven by several factors including the strong performance of several brands including our two largest, Cold Stone Creamery and Papa Murphy's, a reduction of recurring controllable expenses as well as tight cash management. As announced in our last conference call, we used the cash generated by our operations to pay down debt, resulting in a repayment of $38.0 million during the quarter. As at the end of the quarter, we were in a solid financial position with $43.8 million of cash on hand and over $230 million available on our credit facilities, and our leverage ratios remain well within the prescribed limit" stated Eric Lefebvre, Chief Executive Officer of MTY.
"We began the third quarter with 1,470 temporary closed locations and ended the quarter with 364 as our franchisees continued to fight to save their businesses. For the next quarter, we will continue to monitor the impacts of the pandemic, adjust our operations to these volatile market conditions, help our franchisees access government programs that are available to them and aggressively manage our expense levels and liquidity. Our primary focus is to re-open restaurants, help our franchisees succeed to the best of our ability and provide customers with a safe and friendly environment while optimizing the profitability of our restaurants in these challenging times," concluded Mr. Lefebvre.
Financial Highlights | Q3-2020 | Q3-2019 | 9 Months | 9 Months |
Revenues | 135,366 | 161,290 | 383,954 | 394,158 |
Adjusted EBITDA(1) | 43,388 | 41,847 | 102,638 | 104,368 |
Income (loss) before taxes | 29,328 | 28,754 | (64,831) | 72,495 |
Net income (loss) attributable to | 22,932 | 22,902 | (57,186) | 56,987 |
Cash flows from operations | 38,624 | 27,220 | 88,811 | 75,054 |
Cash flows from operations per | 1.56 | 1.08 | 3.59 | 2.98 |
Free cash flows(1) | 37,078 | 26,680 | 96,742 | 73,361 |
EPS basic | 0.93 | 0.91 | (2.31) | 2.26 |
EPS diluted | 0.93 | 0.91 | (2.31) | 2.26 |
System Sales(1) | 897,500 | 1,076,200 | 2,567,700 | 2,596,300 |
(1) This is a non-GAAP measure. Please refer to the "Non-GAAP Measures" section at the end of this press release. |
THIRD 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 ensure 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" for further details on actions taken in response to COVID-19.
In the very short term, management's primary focus is to re-open 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 Management's Discussion and Analysis.
CONFERENCE CALL
MTY Group will hold a conference call to discuss these results on October 9, 2020, 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 9672062. This recording will be available on Friday, October 9, 2020 as of 11:30 AM Eastern Time until 11:59 PM Eastern Time on Friday, October 16, 2020.
ABOUT MTY FOOD GROUP INC.
MTY Group franchises and operates quick-service and casual dining restaurants under over 80 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 40 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 7,123 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-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 of a joint venture accounted for using the equity method), system sales, and free cash flows 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. This includes statements regarding the impacts that the novel COVID-19 pandemic may have on our future operations as found in this release. 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 consolidated financial statements and notes thereto for the third quarter ended August 31, 2020 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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