- Adjusted EBITDA(1) of $49.7 million in the quarter, compared to
$43.4 million in Q3-20.
- Cash flows from operating activities of $46.6 million, up by 21% compared to Q3-20,
despite duration of COVID-19 pandemic.
- Free cash flows per diluted share(2) increased by
23% compared to Q3-20 to reach $1.84,
in part due to higher adjusted EBITDA.
- Net income attributable to shareholders of $24.3 million in the quarter, or $0.98 per diluted share, up from a net income
attributable to shareholders of $22.9
million, or $0.93 per diluted
share, in Q3-20.
- Long-term debt repayments of $35.2
million for the quarter.
- System sales(3) of $1,016.2 million, up 13% compared to Q3-20.
System sales up 29% in Canada, 5%
in the US and 7% Internationally.
- Third quarter digital sales(3) represent 16% and
21% of total system sales for Canada and the US, respectively compared to
15% and 25% in Q3-20.
- 359 restaurants were temporarily closed at the beginning of
the quarter and 164 at the end of the quarter. 139 remain
temporarily closed as at the date of this press release.
- 456 locations were closed one or more days during the
quarter, representing approximately 19,300 lost business
days.
- Quarterly dividend restored with payment of $0.185 per share on August
13, 2021.
(1)
|
This is a non-GAAP
measure. Please refer to the "Non-GAAP Measures" section at the end
of this press release.
|
|
|
(2)
|
This is a non-GAAP
ratio. Please refer to "Non-GAAP Ratios" section at the end of this
press release.
|
|
|
(3)
|
This is a
supplementary financial measure. Please refer to "Supplementary
financial measures" section at the end of this press
release.
|
MONTREAL, Oct. 8, 2021 /CNW Telbec/ - MTY Food Group Inc.
("MTY", "MTY Group" or the "Company") (TSX: MTY), franchisors and
operators of multiple restaurant concepts worldwide, reported today
its results for the third quarter ended August 31, 2021.
"We are highly encouraged by our financial results in the third
quarter of 2021, which was marked by solid double-digit percentage
increases in system sales (+13%), adjusted EBITDA (+15%) and cash
flows from operating activities (+21%)," stated Eric Lefebvre, Chief Executive Officer of MTY.
"This strong financial performance reflects a rebound in customer
traffic for many of our brands. It was realized in a difficult
context of lingering supply-chain issues, labour shortages and the
continuing impact of the COVID-19 pandemic, as shown by the
business days lost due to temporary closures (19,300)."
"On the strength of record free cash flows, an improved
financial situation, and a positive outlook for our business, we
now have more options in terms of our capital allocation strategy,"
Mr. Lefebvre added. "During the third quarter, we lowered our
long-term debt by an additional $35.2
million in repayments, restored our quarterly dividend with
a payment of $0.185 per share and
renewed our NCIB share buyback program. Looking ahead, our
long-term strategic plan remains to deliver organic growth, while
searching for accretive acquisition targets at the right price and
with the right attributes."
Financial
Highlights
(in thousands of $,
except per
share information)
|
Q3-2021
|
Q3-2020
|
9
Months 2021
|
9
Months 2020
|
Revenue
|
150,801
|
135,366
|
405,618
|
383,954
|
Adjusted
EBITDA(1)
|
49,673
|
43,388
|
125,791
|
102,638
|
Adjusted EBITDA per
diluted
share(2)
|
2.00
|
1.76
|
5.09
|
4.14
|
Net income (loss)
attributable
to shareholders
|
24,337
|
22,932
|
60,762
|
(57,186)
|
Cash flows from
operations
|
46,553
|
38,624
|
107,401
|
88,811
|
Free cash
flows(1)
|
45,601
|
37,078
|
103,398
|
96,742
|
Free cash flows per
diluted
share(2)
|
1.84
|
1.50
|
4.17
|
3.91
|
EPS basic
|
0.99
|
0.93
|
2.46
|
(2.31)
|
EPS diluted
|
0.98
|
0.93
|
2.46
|
(2.31)
|
System
sales(3)
|
1,016,200
|
897,500
|
2,668,800
|
2,567,700
|
Digital
sales(3)
|
185,500
|
184,100
|
604,100
|
429,400
|
|
|
(1)
|
This is a non-GAAP
measure. Please refer to the "Non-GAAP Measures" section at the end
of this press release.
|
|
|
(2)
|
This is a non-GAAP
ratio. Please refer to "Non-GAAP Ratios" section at the end of this
press release.
|
|
|
(3)
|
This is a
supplementary financial measure. Please refer to "Supplementary
financial measures" section at the end of this press
release.
|
THIRD QUARTER RESULTS
Network:
- At the end of the period, MTY's network had 6,848 locations in
operation, of which 6,701 were franchised or under operator
agreements, 23 were operated through the joint venture and 124 were
operated by MTY. The geographical split of MTY's locations remained
steady as compared to the third quarter of 2020 with 54% in the US,
39% in Canada and 7%
International.
- System sales were up 13% from the same period in 2020, reaching
$1,016.2 million. The casual dining
concept contributed to $47.8 million
of the increase and represented a 45% increase year-over-year. The
increase was partially offset by a $43.4
million unfavourable variation in CAD/USD foreign exchange
rates.
- Digital sales in North America
were $185.5 million in the third
quarter, compared to $184.2 million
the year before.
- At the end of the quarter, 164 locations were still temporarily
closed because of the COVID-19 pandemic. Of the closed locations,
118 were in Canada, 16 in the US
and 30 were Internationally located. During the quarter, 456
locations were temporarily closed for at least one day, resulting
in approximately 19,300 business days lost. As at October 8, 2021, 139 locations remained
temporarily closed.
Financial:
- Cash flows from operations increased 21% to $46.6 million, compared to $38.6 million for the third quarter of last
year.
- The Company's revenues improved 11%, from $135.4 million to $150.8
million, mainly due to Canadian sales growth in malls and
office towers which outperformed prior year sales with increases of
43% and 68% respectively, as well as an increase of 45% in the
casual dining concept.
- Adjusted EBITDA increased 15% to $49.7
million, compared to $43.4
million for the third quarter of last year. Major brands
such as Cold Stone, SweetFrog, Baton Rouge, Thai Express, Sushi
Shop and Mikes to name a few greatly outperformed prior year as
mall and street locations generated year-over-year growth of 42%
and 26% respectively. The network's overall scalability through
cost management also allowed margins to increase to 59% for the
franchising division.
- Net income attributable to shareholders was $24.3 million, or $0.99 per share ($0.98 per diluted share), as compared to
$22.9 million, or $0.93 per share ($0.93 per diluted share), for the same period
last year.
LIQUIDITY AND CAPITAL RESOURCES
- In the third quarter of 2021, cash flows generated by operating
activities were $46.6 million,
compared to $38.6 million for the same period last year.
Excluding the variation in non-cash working capital items, income
taxes, interest paid and other, operations generated $46.0 million in cash flows, compared to
$45.5 million for the third quarter
of 2020.
- In the third quarter of 2021, the Company reimbursed
$35.2 million of its long-term
debt.
- As at August 31, 2021, the
Company had $56.4 million of cash on
hand, and a long-term debt of $387.3
million mainly in the form of bank facilities and holdbacks
on acquisitions.
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" of the Company's Management's Discussion and Analysis of
the financial position and financial performance (the "MD&A")
for further details on actions taken in response to COVID-19.
Despite the lingering impacts of the pandemic and the obvious
obligations to address the related short-term challenges,
management's focus is now shifting back to a longer-term growth
perspective. Sales are back to pre-pandemic levels for many of the
brands and progressing in the right direction for the others. The
restaurant industry will remain challenging in the future, with
labour shortages and supply chain disruptions being felt across the
network, adding to the existing pressure of competing in a market
approaching saturation. Management believes however that the
brands' continued focus on innovation, product quality, innovation,
consistency and store design combined with the adjustments made
during the pandemic to adjust to new customer expectations
positions the network well for the future.
Before the pandemic, MTY's objectives were to generate organic
growth while actively seeking potential accretive acquisitions.
Those objectives have not changed and remain at the center of MTY's
actions. To the extent possible, MTY's teams are focused on helping
franchise partners generate positive same-store sales, open new
locations of existing concepts and ultimately achieve their
profitability objectives. The individual success of franchisees is
the basis for the success of MTY for the years to come.
Given the Company's capital allocation since the onset of the
pandemic and the amount of debt that was repaid since, the Company
is financially well positioned to seize acquisition opportunities
that are presented to management. However, despite its appetite to
make associations and grow its network, the Company will remain
disciplined in its search for the right acquisition targets, at the
right price and with the right attributes. For further details,
please refer to the Company's MD&A.
CONFERENCE CALL
The MTY Group will hold a conference call to discuss these
results on October 8, 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, October 8, 2021 as
of 11:30 AM Eastern Time until 11:59 PM Eastern Time on Friday, October
15, 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 6,848 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 MEASURES
Adjusted EBITDA (net income (loss), excluding income tax, all
other income (expenses), interest, depreciation and amortization,
and impairment charges), and free cash flows (sum total cash flows
from operating activities less capital expenditures) 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 believes that non-GAAP measures are useful because they are
consistent with the indicators management uses internally to
measure the Company's performance, and they provide investors with
a supplemental measure of the operating performance and financial
position and thus highlight trends in the core business that may
not otherwise be apparent when relying solely on GAAP measures.
Refer to the "Compliance with International Financial Reporting
Standards" section of the Company's MD&A.
NON-GAAP RATIOS
Management discloses non-GAAP ratios as they have been
identified as relevant metrics to evaluate the performance of the
Company. These include Adjusted EBITDA per diluted share (Adjusted
EBITDA divided by diluted shares) and free cash flows per diluted
share (free cash flows divided by diluted shares).
SUPPLEMENTARY FINANCIAL MEASURES
Management discloses supplementary financial measures as they
have been identified as relevant metrics to evaluate the
performance of the Company. These include system sales (sales of
all existing restaurants including those that have closed or have
opened during the period, as well as the sales of new concepts
acquired from the closing date of the transaction and forward) and
digital sales (sales made by customers through online ordering
platforms).
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 nine-month periods ended August 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.