- Free cash flows(1) for Q4-20 of
$43.9 million, up 1% compared to
Q4-19; on a per diluted share basis, free cash flows were
$1.78 per share in the quarter,
compared to $1.74 a year
before.
- For fiscal year 2020, free cash flows were $140.7 million, up 20% compared to 2019; on a per
diluted share basis, free cash flows for 2020 reached $5.68, compared to $4.64 in 2019.
- Adjusted EBITDA(1) for Q4-20 decreased 18% to
reach $35.2 million; adjusted
EBITDA(1) for 2020 down 6% to $137.8 million.
- Long-term debt repayments of $37.6
million for the quarter.
- Net income attributable to shareholders for Q4-20 at
$20.1 million or $0.81 per share.
- System sales(1) of $891.4
million in Q4-20, compared to $1,023.5 million in Q4-19; on a geographical
basis, system sales increased 4% in the
United States and decreased 30% and 40% respectively for
Canada and for International
locations.
- Digital sales(1) in Q4-20 more than doubled
compared to Q4-19, now representing 22.5% of system sales.
- The MTY network counted 7,001 locations at year end,
including 338 that were temporarily closed as a result of
restrictions imposed by various authorities. During the fourth
quarter, the network lost over 30,000 days of business because of
temporary closures.
- As at February 17, 2021, there
were 408 locations still temporarily closed.
(1)
|
This is a non-GAAP
measure. Please refer to the "Non-GAAP Measures" section at the end
of this press release.
|
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 ("MD&A") for further
details.
MONTREAL, Feb. 18, 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 fourth quarter and
year ended November 30, 2020.
"2020 was unquestionably marked by its share of
challenges for MTY but the resilience of our franchisees, team
and business model as well as the strong performance of our brands
was affirmed and ultimately allowed us to achieve record
levels of cash flow from operations and free cash flows. In light
of the unique circumstances of the past year, we focused our
capital allocation priorities on debt reduction, repaying a total
of $109 million, shoring up our
balance sheet and building a treasure chest for the future. Our
ability to adapt was also showcased in our response to the rapid
pandemic-induced consumer shift to online ordering and delivery. To
this end, we expanded our third-party delivery
partnerships and developed and further enhanced our
brands' online ordering platforms. There was a major
acceleration in the proportion of sales generated digitally, which
represented 22.5% of system sales in the fourth quarter" stated
Eric Lefebvre, Chief Executive
Officer of MTY.
"While evolving regional COVID-19 restrictions impacted our Q4
system sales, which were down 13% year-over-year, our adjusted
EBITDA reached $35 million. This
performance was spearheaded by our two largest brands, Cold Stone
Creamery and Papa Murphy's, as well as by the continuing measures
implemented to manage our expense levels. To put things in
perspective, over 30,000 business days were lost during the quarter
while approximately 5% of the network was temporarily closed
and many of the operating restaurants were doing so in a very
limited capacity.
We enter our 2021 fiscal year in a solid financial position with
$44.3 million of cash on hand and
over $265 million available on our
credit facilities. With an improving balance sheet, we remain
attentive to M&A opportunities that may emerge in the
post-pandemic market and environment. Our road to recovery in
upcoming quarters remains closely tied to the lifting of
COVID-19 restrictions. We spent the past year adapting our
operations, marketing strategy and sales channels to a new and
evolving business environment, which in many ways has positioned
MTY more strongly for the future," concluded Mr. Lefebvre.
|
|
|
|
|
Financial
Highlights
|
Q4-2020
|
Q4-2019
|
2020
|
2019
|
|
|
|
|
|
(in thousands of
$,
except per share
information)
|
|
(not restated
for
IFRS 16)
|
|
(not restated
for IFRS
16)
|
Revenues
|
127,163
|
156,784
|
511,117
|
550,942
|
Adjusted
EBITDA(1)
|
35,181
|
43,027
|
137,819
|
147,395
|
Net income (loss)
attributable to shareholders
|
20,078
|
20,688
|
(37,108)
|
77,675
|
Cash flows from
operations
|
44,841
|
37,897
|
133,652
|
112,951
|
Free cash
flows(1)
|
43,910
|
43,577
|
140,652
|
116,938
|
Free cash flows per
diluted share(1)
|
1.78
|
1.74
|
5.68
|
4.64
|
EPS basic
|
0.81
|
0.83
|
(1.50)
|
3.09
|
EPS
diluted
|
0.81
|
0.83
|
(1.50)
|
3.08
|
System
sales(1)
|
891,400
|
1,023,500
|
3,459,100
|
3,619,800
|
Digital
sales(1)
|
193,900
|
83,100
|
636,400
|
199,200
|
|
|
(1)
|
This is a non-GAAP
measure. Please refer to the "Non-GAAP Measures" section at the end
of this press release.
|
FOURTH QUARTER RESULTS
Network:
- At the end of the period, MTY's network had 7,001 locations in
operation, of which 113 were corporate, 6,867 were franchised and
21 were joint ventures. The geographical split of MTY's locations
remained relatively steady as compared to the fourth quarter of
2019 with 55% in the United
States, 38% in Canada and
7% International.
- System sales were down 13% from the same period in 2019,
reaching $891.4 million. The quarter
was impacted heavily by a second wave of restrictions related to
the COVID-19 pandemic in Quebec
and Ontario. US system sales for
the fourth quarter increased 4%, while Canada and International system sales
decreased by 30% and 40% respectively. Additional restrictions
recently imposed in some jurisdictions have caused some restaurants
that had re-opened to close again.
- At the end of the quarter, 338 locations were temporarily
closed because of the pandemic. As at February 17, 2021, 408 locations remained
temporarily closed. The increase in temporary closures is the
result of more government restrictions imposed by some provinces in
Canada in late December.
Financial:
- Cash flows from operations increased 18% to $44.8 million during the quarter.
- The Company's revenue decreased 19%, from $156.8 million to $127.2
million, mainly due to the impact of the COVID-19
pandemic.
- Adjusted EBITDA decreased 18% to $35.2
million, compared to $43.0
million for the same period last year. Excluding the
favourable impact of IFRS 16, adjusted EBITDA would have been
$32.3 million.
- Net income attributable to shareholders was $20.1 million, or $0.81 per share ($0.81 per diluted share), as compared to
$20.7 million, or $0.83 per share ($0.83 per diluted share), for the same period
last year.
2020 RESULTS
Network:
- System sales were down 4% compared to 2019, reaching
$3,459.1 million. The decrease is
primarily attributable to the restrictions related to the COVID-19
pandemic. Excluding the contribution of recent acquisitions, sales
would have decreased 21% compared to 2019.
- Digital sales in 2020 grew to $636.4
million, or 19% of system sales, compared to $199.2 million or 6% in 2019. The COVID-19
pandemic accelerated consumer shifts to online ordering and
delivery.
- During the year, MTY's network opened 185 locations (303 in
2019) and closed 578 (558 in 2019). The Company also added 23
locations via an investment in a joint venture; 2 of those
locations closed during the year.
Financial:
- The Company's revenue decreased 7%, from $550.9 million to $511.1
million, mainly due to the impact of the pandemic.
- Adjusted EBITDA decreased 6% to $137.8
million, as compared to the record-high of $147.4 million posted in 2019.
- Net loss attributable to shareholders was $37.1 million, or $1.50 per share ($1.50 per diluted share), as compared to net
income of $77.7 million, or
$3.09 per share ($3.08 per diluted share), in 2019.
LIQUIDITY AND CAPITAL RESOURCES
- In 2020, cash flows generated by operating activities were
$133.7 million, compared to
$113.0 million in 2019. Excluding the
variation in non-cash working capital items, income taxes, interest
paid and other, operations generated $141.9
million in cash flows, compared to $149.2 million in 2019.
- In 2020, the Company used its cash to pay down $109.1 million of its long-term debt, invested in
a joint venture that had acquired assets of Turtle Jack's Muskoka
Grill, COOP Wicked Chicken and Frat's Cucina (together "Tortoise
Group") for a cash consideration of $19.1
million and repurchased and cancelled shares for
$18.9 million. It paid $4.6 million in dividends to its shareholders
but, as of the second quarter, the payment of dividends to its
shareholders was suspended due to the COVID-19 pandemic.
- As at November 30, 2020, the
Company had $44.3 million of cash on
hand, and a long-term debt of $460.5
million mainly in the form of bank facilities and holdbacks
on acquisition.
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, as well as the continuity of its operations and
businesses. Given the dynamic nature of the situation, it is not
possible to determine what impact it may have on the
Company's long-term financial performance. However, MTY is taking
the necessary steps to mitigate the potential consequences on
its operations, franchisees, partners and service to MTY's
customers. Please refer to the "Highlights of Significant
Events" section in the Company's MD&A for further
details on actions taken in response to COVID-19.
In the very short term, management's primary focus is on
reopening 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. After the pandemic is over, there may be a
temporary or permanent shift in customer consumption patterns from
those traditionally experienced and MTY will have to adapt.
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
experience, and customer service in each of the outlets,
thereby maximizing the value offered to customers.
The restaurant industry will remain more challenging than ever
in the future as customer consumption patterns change and the
competitive landscape shifts. Management believes that, by
focusing on the food offering, innovation, a seamless customer
experience in store or off premise, consistency and store
design, MTY's restaurants will be well-positioned to face
the challenges that will arise. Given the difficult
context in which more restaurants compete for a finite amount of
consumer dollars, each concept needs to preserve and improve the
relevance of its consumer offering.
For further details, please refer to the MD&A.
CONFERENCE CALL
The MTY Group will hold a conference call to discuss these
results on February 18, 2021, 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 3099028. This
recording will be available on Thursday,
February 18, 2021 as of 11:30 AM
Eastern Time until 11:59 PM Eastern Time on Thursday,
February 25, 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 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 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 7,001 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 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 ("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 "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 our 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 consolidated
financial statements and notes thereto for the fourth quarter and
year ended November 30, 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.