Toronto Stock Exchange: BPF.UN
HIGHLIGHTS
- Highest ever fourth quarter and annual Franchise
Sales1 of $234.2 million
for the Period and $931.7 million for
the Year, representing increases of 2.9% and 0.6%, respectively,
versus the same periods one year ago.
- Same Restaurant Sales2 of 3.4% for the Period and
0.9% for the Year.
- Cash flows generated from operating activities of $9.4 for the Period and $38.1 million for the Year, representing
increases of 1.4% and 0.5%, respectively, versus the same periods
one year ago.
- Distributable Cash3 increased 1.5% for the Period
and decreased 0.9% for the Year, and Distributable Cash per
Unit4 increased 1.4% for the Period and decreased 0.2%
for the Year.
- Payout Ratio5 of 118.4% for the Period and 99.9% for
the Year. Cash balance at the end of the Period was $4.6 million.
- On February 13, 2024, the Fund
increased its monthly distribution rate to $0.113 per unit of the Fund ("Unit") for
the January 2024 distribution from
the previous monthly rate of $0.107
per Unit, being an increase of $0.006
per Unit or 5.6%. On December 9,
2024, the Fund increased its monthly distribution rate for
the second time in 2024 to $0.115 per
Unit for the November 2024
distribution, being an increase of $0.002 per Unit or 1.8%.
- On December 9, 2024, the Fund
also announced a special cash distribution to unitholders of
$0.075 per Unit.
- On February 11, 2025, the
trustees of the Fund declared a distribution for the period of
January 1, 2025 to January 31, 2025 of $0.115 per Unit, which will be payable on
February 28, 2025 to unitholders of
the Fund ("Unitholders") of record on February 21, 2025.
VANCOUVER, BC, Feb. 14,
2025 /CNW/ - Boston Pizza Royalties Income Fund (the
"Fund") and Boston Pizza International Inc. ("BPI")
reported financial results today for the fourth quarter period from
October 1, 2024 to December 31, 2024 (the
"Period") and January 1, 2024
to December 31, 2024 (the
"Year"). A copy of this press release, the audited
annual consolidated financial statements and related management's
discussion and analysis ("MD&A") of the Fund and BPI are
available at www.sedarplus.ca and www.bpincomefund.com. The
Fund will host a conference call to discuss the results on
February 14, 2025 at 8:30 am
Pacific Time (11:30 am Eastern Time). The call can
be accessed by dialling 1-844-763-8274 or +1-647-484-8814. A
replay will be available until March 14,
2025 by dialling 1-855-669-9658 or +1-412-317-0088 and
entering the access code: 2489857 followed by the # sign. The
replay will also be available at www.bpincomefund.com. Capitalized
terms used in this press release that are not otherwise defined
have the meanings ascribed to them in the Fund's MD&A for the
Period and the Year.
"In the fourth quarter, Boston Pizza delivered its strongest
performance of the year in terms of year-over-year growth, capping
off the highest year for total franchise sales," said Jordan Holm, President of BPI. "Effective
promotions were instrumental in Boston Pizza overcoming
macroeconomic challenges faced in the earlier quarters of the
Year. As we enter 2025, we remain vigilant in monitoring the
evolving trade landscape, its potential impact on Boston Pizza
restaurants in Canada and adapting
the business accordingly. We are encouraged by the momentum
in our business and remain focused on enhancing guest experiences,
supporting our franchisees, and driving sustainable long-term
growth through innovation and operational excellence."
PERIOD AND YEAR RESULTS
SRS, a key driver of distribution growth for Unitholders, was
3.4% for the Period compared to 0.6% reported in the fourth quarter
of 2023. SRS for the Period was principally due to menu price
increases. SRS was 0.9% for the Year compared to 8.7%
reported in 2023. For the Year, SRS was principally due to
menu prices increases, partially offset by macroeconomic challenges
faced by the full-service restaurant industry.
Franchise Sales of Boston Pizza restaurants in the Royalty
Pool were $234.2 million for the
Period compared to $227.7 million for the fourth quarter of
2023. The $6.5 million
increase in Franchise Sales for the Period was primarily due to
positive SRS. Franchise Sales of Boston Pizza restaurants in
the Royalty Pool were $931.7 million for the Year compared to
$925.7 million in 2023.
The $6.0 million increase in
Franchise Sales for the Year was primarily due to positive SRS.
The Fund's net and comprehensive income was $6.6 million for the Period compared to
$5.2 million for the fourth
quarter of 2023. The $1.4 million increase in the Fund's net and
comprehensive income for the Period compared to the fourth quarter
of 2023 was primarily due to a $1.3 million decrease in fair value loss, a
$0.3 million increase in
Royalty6 and Distribution Income7 and a
$0.2 million decrease in deferred
income tax expense, partially offset by a $0.4 million increase in net interest
expense and a $0.1 million
increase in current income tax expense. The Fund's net and
comprehensive income was $31.9 million for the Year compared to
$29.6 million in 2023. The
$2.3 million increase in the
Fund's net and comprehensive income for the Year compared to 2023
was primarily due to a $4.6 million increase in fair value gain and
a $0.3 million increase in Royalty
and Distribution Income, partially offset by a $1.7 million increase in deferred income tax
expense, a $0.6 million increase in
net interest expense and a $0.2
million increase in administrative expenses.
Cash generated from operating activities for the Period was
$9.4 million compared to $9.3 million in the fourth quarter of
2023. The increase of $0.1 million was primarily due to an
increase in Royalty and Distribution Income of $0.3 million, partially offset by a decrease
in changes in working capital of $0.1 million and an increase in income taxes
paid of $0.1 million. Cash
generated from operating activities for the Year was $38.1 million compared to $37.9 million in 2023. The increase of
$0.2 million was primarily due
to an increase in Royalty and Distribution Income of $0.3 million and an increase in changes in
working capital of $0.2 million,
partially offset by an increase in administrative expenses of
$0.2 million and an increase in
income taxes paid of $0.1 million.
The Fund generated Distributable Cash of $7.5 million for the Period compared to
$7.4 million for the fourth
quarter of 2023. The increase in Distributable Cash of
$0.1 million or 1.5% was
primarily due to an increase in cash flows generated from operating
activities of $0.1 million. The Fund generated
Distributable Cash of $30.4 million for the Year compared to
$30.7 million for the same
period in 2023. The decrease in Distributable Cash of
$0.3 million or 0.9% was
primarily due to higher Class B Unit entitlement8
of $0.6 million, partially
offset by an increase in cash flows generated from operating
activities of $0.2 million and
lower interest paid on debt of $0.1 million.
The Fund generated Distributable Cash per Unit of
$0.351 for the Period compared to
$0.346 per Unit for the same period
in 2023. The increase in Distributable Cash per Unit of
$0.005 or 1.4% was primarily
attributable to the increase in Distributable Cash outlined
above. The Fund generated Distributable Cash per Unit of
$1.429 for the Year compared to
$1.432 per Unit in 2023. The
decrease in Distributable Cash per Unit of $0.003 or 0.2% was primarily attributable to the
decrease in Distributable Cash outlined above, partially offset by
fewer Units outstanding compared to the same period in 2023 due to
the Fund's normal course issuer bid that was in effect from
June 20, 2023 to June 19, 2024 ("NCIB").
The Fund's Payout Ratio for the Period was 118.4% compared to
92.7% in the fourth quarter of 2023. The increase in the
Fund's Payout Ratio for the Period was due to distributions paid
increasing by $2.1 million or
29.6% as a result of the 2024 Distribution Increases (defined
below) and the 2024 Special Distribution (defined below), partially
offset by Distributable Cash increasing by $0.1 million or 1.5%. For the Year,
the Fund's Payout Ratio was 99.9% compared to 88.6% in 2023.
The increase in the Fund's Payout Ratio for the Year was due to
distributions paid increasing by $3.2 million or 11.8% as a result of the
2024 Distribution Increases and the 2024 Special Distribution and
Distributable Cash decreasing by $0.3 million or 0.9%. Payout Ratio is
calculated by dividing the amount of distributions paid during the
applicable period by the Distributable Cash for that period.
The Fund's Payout Ratio fluctuates quarter-to-quarter depending
upon the amount of distributions paid during a quarter and the
amount of Distributable Cash generated during that quarter.
DISTRIBUTIONS
During the Period, the Fund declared distributions on the Units
in the aggregate amount of $11.3 million or $0.531 per Unit. During the fourth
quarter of 2023, the Fund declared distributions on the Units in
the aggregate amount of $9.1 million or $0.428 per Unit. During the Period,
the Fund paid distributions on the Units in the aggregate amount of
$8.9 million or $0.416 per Unit. During the fourth
quarter of 2023, the Fund paid distributions on the Units in the
aggregate amount of $6.8 million
or $0.321 per Unit. The
amount of distributions declared and paid during the Period
increased by $2.2 million and
$2.1 million, respectively, or
$0.103 per Unit and $0.095 per Unit, respectively, due to the
monthly distribution rate increasing from $0.107 per Unit to $0.113 per Unit commencing with the
January 2024 distribution and
increasing again from $0.113 per
Unit to $0.115 per Unit
commencing with the November 2024
distribution (together, the "2024 Distribution Increases"),
and the special cash distribution to Unitholders of $0.075 per Unit, which was declared on
December 9, 2024 and paid to Unitholders on December 31,
2024 (the "2024 Special Distribution"). During the
Year, the Fund declared distributions on the Units in the aggregate
amount of $30.5 million or
$1.435 per Unit. In 2023,
the Fund declared distributions on the Units in the aggregate
amount of $27.3 million or
$1.274 per Unit. During
the Year, the Fund paid distributions on the Units in the aggregate
amount of $30.4 million or
$1.427 per Unit. In 2023,
the Fund paid distributions on the Units in the aggregate amount of
$27.2 million or $1.269 per Unit. The amount of
distributions declared and paid during the Year increased by
$3.2 million and $3.2 million, respectively, or $0.161 per Unit and $0.158 per Unit, respectively, due to the
2024 Distribution Increases and the 2024 Special Distribution,
partially offset by fewer Units being outstanding during the Year
compared to 2023 due to the Fund's NCIB.
The Fund pays distributions on the Units in respect of any
calendar month not later than the last business day of the
immediately subsequent month. Consequently, monthly distributions
payable by the Fund on the Units in respect of the Period were the
October 2024 distribution (which was paid on November 29,
2024), the November 2024 distribution (which was paid on
December 31, 2024) and the December 2024 distribution
(which was paid on January 31, 2025). Similarly, the
distributions payable by the Fund on the Units in respect of any
other period are paid in the immediately subsequent month of such
period.
On February 11, 2025, the trustees
of the Fund declared a distribution for the period of January 1, 2025 to January
31, 2025 of $0.115 per Unit,
which will be payable on February 28,
2025 to Unitholders of record on February 21, 2025. Including the
January 2025 distribution, which will
be paid on February 28, 2025, the
Fund will have paid out total distributions of $455.8 million or $27.57 per Unit, which includes 265 monthly
distributions and three special distributions.
FINANCIAL SUMMARY
The tables below set out selected information from the Fund's
audited annual consolidated financial statements together with
other data and should be read in conjunction with the audited
annual consolidated financial statements and MD&A of the Fund
for the years ended December 31, 2024 and 2023.
|
For the
years ended December 31
|
|
2024
|
2023
|
2022
|
|
(in thousands of
dollars – except restaurants, SRS, Payout Ratio and per Unit
items)
|
|
|
|
|
Number of restaurants
in Royalty Pool
|
|
372
|
377
|
383
|
|
Franchise Sales
reported by restaurants in the Royalty Pool
|
|
931,652
|
925,655
|
854,997
|
|
|
|
|
|
|
Royalty
income
|
|
37,266
|
37,026
|
34,200
|
|
Distribution
Income
|
|
12,242
|
12,167
|
11,273
|
|
Total
revenue
|
|
49,508
|
49,193
|
45,473
|
|
Administrative
expenses
|
|
(1,713)
|
(1,489)
|
(1,390)
|
|
Interest expense on
debt and financing fees
|
|
(3,517)
|
(3,370)
|
(3,614)
|
|
Interest expense on
Class B Unit liability
|
|
(4,506)
|
(3,990)
|
(3,690)
|
|
Interest
income
|
|
274
|
276
|
107
|
|
Profit before fair
value gain (loss) and income taxes
|
|
40,046
|
40,620
|
36,886
|
|
Fair value gain (loss)
on investment in BP Canada LP
|
|
11,730
|
1,364
|
(2,019)
|
|
Fair value (loss) gain
on Class B Unit liability
|
|
(5,226)
|
(608)
|
899
|
|
Fair value (loss) gain
on Swaps
|
|
(2,607)
|
(1,436)
|
3,891
|
|
Current and deferred
income tax expense
|
|
(12,071)
|
(10,374)
|
(9,074)
|
|
Net and comprehensive
income
|
|
31,872
|
29,566
|
30,583
|
|
|
|
|
|
|
Basic earnings per
Unit
|
|
1.50
|
1.38
|
1.42
|
|
Diluted earnings per
Unit
|
|
1.50
|
1.34
|
1.31
|
|
|
|
|
|
|
Distributable
Cash / Distributions / Payout Ratio
|
|
|
|
|
|
Cash flows generated
from operating activities
|
|
38,122
|
37,926
|
34,355
|
|
BPI Class B Unit
entitlement
|
|
(4,459)
|
(3,865)
|
(3,679)
|
|
Interest paid on
debt
|
|
(3,277)
|
(3,404)
|
(3,576)
|
|
Principal repayments
on long-term debt
|
|
-
|
-
|
(1,500)
|
|
Current income tax
expense
|
|
(9,993)
|
(9,949)
|
(8,914)
|
|
Current income tax
paid
|
|
10,012
|
9,961
|
8,904
|
|
Distributable
Cash
|
|
30,405
|
30,669
|
25,590
|
|
Distributions
paid
|
|
30,365
|
27,172
|
25,438
|
|
Payout Ratio
|
|
99.9 %
|
88.6 %
|
99.4 %
|
|
Distributable Cash per
Unit
|
|
1.429
|
1.432
|
1.189
|
|
Distributions paid per
Unit
|
|
1.427
|
1.269
|
1.182
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
Same Restaurant
Sales
|
|
0.9 %
|
8.7 %
|
30.4 %
|
|
Number of restaurants
opened
|
|
4
|
1
|
0
|
|
Number of restaurants
closed
|
|
4
|
6
|
6
|
|
|
|
|
As at December
31
|
2024
|
2023
|
2022
|
|
Total assets
|
|
422,888
|
413,055
|
413,701
|
|
Total
liabilities
|
|
142,665
|
134,169
|
133,123
|
SUMMARY OF QUARTERLY RESULTS
|
Q4
2024
|
Q3
2024
|
Q2
2024
|
Q1 2024
|
|
(in thousands of
dollars – except restaurants, SRS, Payout Ratio and per Unit
items)
|
|
|
|
|
|
Number of restaurants
in Royalty Pool
|
372
|
372
|
372
|
372
|
|
Franchise Sales
reported by restaurants in the Royalty Pool
|
234,215
|
238,613
|
236,792
|
222,032
|
|
|
|
|
|
|
Royalty
income
|
9,369
|
9,544
|
9,472
|
8,881
|
|
Distribution
Income
|
3,077
|
3,135
|
3,111
|
2,919
|
|
Total
revenue
|
12,446
|
12,679
|
12,583
|
11,800
|
|
Administrative
expenses
|
(401)
|
(379)
|
(497)
|
(436)
|
|
Interest expense on
debt and financing fees
|
(870)
|
(887)
|
(932)
|
(828)
|
|
Interest expense on
Class B Unit liability
|
(1,681)
|
(1,033)
|
(1,063)
|
(729)
|
|
Interest
income
|
68
|
71
|
69
|
66
|
|
Profit before fair
value (loss) gain and income taxes
|
9,562
|
10,451
|
10,160
|
9,873
|
|
Fair value (loss) gain
on investment in BP Canada LP
|
(382)
|
8,511
|
1,473
|
2,128
|
|
Fair value gain (loss)
on Class B Unit liability
|
170
|
(3,792)
|
(656)
|
(948)
|
|
Fair value (loss) gain
on Swaps
|
(200)
|
(1,923)
|
(672)
|
188
|
|
Current and deferred
income tax expense
|
(2,593)
|
(3,863)
|
(2,841)
|
(2,774)
|
|
Net and comprehensive
income
|
6,557
|
9,384
|
7,464
|
8,467
|
|
|
|
|
|
|
Basic earnings per
Unit
|
0.31
|
0.44
|
0.35
|
0.40
|
|
Diluted earnings per
Unit
|
0.28
|
0.44
|
0.33
|
0.37
|
|
|
|
|
|
|
Distributable
Cash / Distributions / Payout Ratio
|
|
|
|
|
|
Cash flows generated
from operating activities
|
9,419
|
9,990
|
9,613
|
9,100
|
|
BPI Class B Unit
entitlement
|
(1,097)
|
(1,195)
|
(1,095)
|
(1,072)
|
|
Interest paid on
debt
|
(840)
|
(758)
|
(871)
|
(808)
|
|
Current income tax
expense
|
(2,523)
|
(2,584)
|
(2,521)
|
(2,365)
|
|
Current income tax
paid
|
2,520
|
2,660
|
2,370
|
2,462
|
|
Distributable
Cash
|
7,479
|
8,113
|
7,496
|
7,317
|
|
Distributions
paid
|
8,852
|
7,214
|
7,213
|
7,086
|
|
Payout Ratio
|
118.4 %
|
88.9 %
|
96.2 %
|
96.8 %
|
|
Distributable Cash per
Unit
|
0.351
|
0.381
|
0.352
|
0.344
|
|
Distributions paid per
Unit
|
0.416
|
0.339
|
0.339
|
0.333
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
Same Restaurant
Sales
|
3.4 %
|
(0.6 %)
|
1.7 %
|
(1.0 %)
|
|
Number of restaurants
opened
|
2
|
0
|
1
|
1
|
|
Number of restaurants
closed
|
0
|
1
|
0
|
3
|
SUMMARY OF QUARTERLY RESULTS (continued)
|
Q4 2023
|
Q3 2023
|
Q2 2023
|
Q1 2023
|
|
(in thousands of
dollars – except restaurants, SRS, Payout Ratio and per Unit
items)
|
|
|
|
|
|
Number of restaurants
in Royalty Pool
|
377
|
377
|
377
|
377
|
|
Franchise Sales
reported by restaurants in the Royalty Pool
|
227,665
|
240,139
|
233,650
|
224,201
|
|
|
|
|
|
|
Royalty
income
|
9,106
|
9,606
|
9,346
|
8,968
|
|
Distribution
Income
|
2,992
|
3,155
|
3,071
|
2,949
|
|
Total
revenue
|
12,098
|
12,761
|
12,417
|
11,917
|
|
Administrative
expenses
|
(347)
|
(350)
|
(401)
|
(391)
|
|
Interest expense on
debt and financing fees
|
(839)
|
(838)
|
(843)
|
(850)
|
|
Interest expense on
Class B Unit liability
|
(1,321)
|
(1,055)
|
(982)
|
(632)
|
|
Interest
income
|
57
|
72
|
79
|
68
|
|
Profit before fair
value (loss) gain and income taxes
|
9,648
|
10,590
|
10,270
|
10,112
|
|
Fair value gain (loss)
on investment in BP Canada LP
|
928
|
(7,857)
|
8,511
|
(218)
|
|
Fair value (loss) gain
on Class B Unit liability
|
(414)
|
3,501
|
(3,792)
|
97
|
|
Fair value (loss) gain
on Swaps
|
(2,250)
|
333
|
1,373
|
(892)
|
|
Current and deferred
income tax expense
|
(2,695)
|
(1,673)
|
(3,576)
|
(2,430)
|
|
Net and comprehensive
income
|
5,217
|
4,894
|
12,786
|
6,669
|
|
|
|
|
|
|
Basic earnings per
Unit
|
0.25
|
0.23
|
0.59
|
0.31
|
|
Diluted earnings per
Unit
|
0.24
|
0.06
|
0.59
|
0.24
|
|
|
|
|
|
|
Distributable
Cash / Distributions / Payout Ratio
|
|
|
|
|
|
Cash flows generated
from operating activities
|
9,288
|
9,659
|
9,759
|
9,220
|
|
BPI Class B Unit
entitlement
|
(1,081)
|
(740)
|
(1,006)
|
(1,038)
|
|
Interest paid on
debt
|
(817)
|
(825)
|
(848)
|
(914)
|
|
Current income tax
expense
|
(2,445)
|
(2,603)
|
(2,511)
|
(2,390)
|
|
Current income tax
paid
|
2,424
|
2,770
|
2,456
|
2,311
|
|
Distributable
Cash
|
7,369
|
8,261
|
7,850
|
7,189
|
|
Distributions
paid
|
6,830
|
6,848
|
6,909
|
6,585
|
|
Payout Ratio
|
92.7 %
|
82.9 %
|
88.0 %
|
91.6 %
|
|
Distributable Cash per
Unit
|
0.346
|
0.387
|
0.365
|
0.334
|
|
Distributions paid per
Unit
|
0.321
|
0.321
|
0.321
|
0.306
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
Same Restaurant
Sales
|
0.6 %
|
5.3 %
|
6.6 %
|
25.7 %
|
|
Number of restaurants
opened
|
1
|
0
|
0
|
0
|
|
Number of restaurants
closed
|
4
|
0
|
1
|
1
|
SHORT-TERM OUTLOOK
The success of the Fund, BPI, BP Canada LP, and Boston Pizza
Restaurants, including the amount of Franchise Sales, Royalty,
Distributions, and cash available for distribution to Unitholders,
depends on both consumer demand and restaurant-level
operations. Consumer demand is driven by consumer confidence
and discretionary spending, both of which are influenced by
macroeconomic factors such as inflation and interest rates, wage
growth and unemployment levels, , recession risks, competition
within the restaurant industry, evolving consumer preferences,
changes in taxation, and major geopolitical developments, including
tariffs. At the restaurant level, success is also impacted by
supply chain disruptions, labor availability, rising input costs,
and other operational challenges. Despite these obstacles,
Boston Pizza restaurants have consistently generated strong
Franchise Sales by providing guests with appealing dining options
that emphasize quality, value, and convenience, both on-premise and
off-premise. BPI, BP Canada LP, and Boston Pizza restaurants
have demonstrated adaptability in navigating changing economic
conditions and challenging operating environments. BPI's
management remains proactive and committed to adjusting its
business strategy to effectively address these challenges and
sustain positive sales momentum in 2025.
The trustees of the Fund will continue to closely monitor the
Fund's available cash balances and distribution levels to maintain
a stable and sustainable return for the Unitholders.
The financial information relating to BPI (the "BPI Financial
Information") contained in this press release has been derived
from the financial statements and management's discussion and
analysis of BPI (the "BPI Disclosures"), which have been
filed by the Fund on behalf of BPI pursuant to an undertaking dated
July 9, 2002 provided by BPI to the
various securities commissions in Canada. BPI's senior management prepares
the BPI Disclosures and provides them to the Fund for filing.
The auditors of BPI report to the sole shareholder of BPI, and not
to the trustees or Unitholders of the Fund. The Fund does not
own, control, or consolidate BPI and therefore, the Fund's
disclosure controls and procedures and its internal controls over
financial reporting do not encompass BPI or BPI's internal controls
over financial reporting. The BPI Disclosures are the
responsibility of BPI and its directors and officers and not the
Fund and its trustees and officers. The Fund provides no
assurances as to its accuracy or completeness. The Fund
disclaims any and all liability for the BPI Financial
Information.
Forward Looking Information
Certain information in this press release constitutes
"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
Fund, Boston Pizza Holdings Trust, Boston Pizza Royalties Limited
Partnership, Boston Pizza Holdings Limited Partnership, Boston
Pizza Holdings GP Inc., Boston Pizza GP Inc., BPI, BP Canada LP,
Boston Pizza Canada Holdings Inc., Boston Pizza Canada Holdings
Partnership, Boston Pizza restaurants, or industry results, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
information. All statements, other than statements of
historical facts, included in this press release that address
activities, events or developments that the Fund or its trustees
expect or anticipate will or may occur in the future, including
such things as, our continued vigilance in monitoring the evolving
trade landscape, the potential impact on Boston Pizza Restaurants
in Canada and adapting the
business accordingly, our continued focus on enhancing guest
experiences, supporting our franchisees, and driving sustainable
long-term growth through innovation and operational excellence, the
success of BPI, BP Canada LP and Boston Pizza restaurants, and
the amount of Franchise Sales, Royalty, Distribution Income and
Distributable Cash available for distribution to Unitholders,
depending on both consumer demand and restaurant-level operations,
consumer demand being driven by consumer confidence and
discretionary spending, both of which are influenced by
macroeconomic factors such as inflation and interest rates, wage
growth and unemployment levels, recession risks, competition within
the restaurant industry, evolving consumer preferences, changes in
taxation and major geopolitical developments, including tariffs,
restaurant-level success being impacted by supply chain
disruptions, labour availability, rising input costs, and other
operational challenges, BPI's management remaining proactive and
committed to adjusting its business strategy to effectively address
challenges and sustain positive sales momentum in 2025, the
trustees of the Fund continuing to closely monitor the Fund's
available cash balances and distribution levels to maintain a
stable and sustainable return for the Unitholders, and other such
matters are forward-looking information. When used in this
press release, forward-looking information may include words such
as "anticipate", "estimate", "may", "will", "expect", "believe",
"plan", "should", "continue" and other similar terminology.
The material factors and assumptions used to develop the
forward-looking information contained in this press release include
the following: the Fund maintaining the same distribution policy,
expectations related to future general economic conditions,
expectations related to guest traffic and average guest cheques,
expectations related to the resiliency of the Boston Pizza system,
the impact of and response to changing competitive landscapes and
guest behaviours, strategies and efforts to strive for
profitability of BPI, BP Canada LP and Boston Pizza Restaurants,
ability to maintain a stable supply chain, ability to attract and
retain qualified employees, key personnel and qualified franchisees
and operators, and Boston Pizza restaurants maintaining operational
excellence. Risks, uncertainties and other factors that may
cause actual results, performance or achievements to be materially
different from any future results, performance or achievement
expressed or implied by the forward-looking information contained
herein, relate to (among others): competition, demographic trends,
business and economic conditions, interest rates and inflationary
pressures, legislation and regulation, reliance on operating
revenues, financial reporting and accounting controls, policies and
practices, the results of operations and financial condition of
BPI, BP Canada LP and the Fund, labour availability, cost and
efficiency, extreme weather events, as well as those factors
discussed under the heading "Risks and Uncertainties" in the most
recent Annual Information Form of the Fund. 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, neither the Fund nor BPI
assumes any obligation to update previously disclosed
forward-looking information. For a complete list of the risks
associated with forward-looking information and the Fund's
business, please refer to the "Risks & Risk Management" and
"Note Regarding Forward-Looking Information" sections of the Fund's
MD&A for the Period and Year, a copy of which is available at
www.sedarplus.ca and www.bpincomefund.com.
The trustees of the Fund have approved the contents of this news
release.
|
® Boston
Pizza Royalties Limited Partnership. All Boston Pizza registered
Canadian trademarks and unregistered Canadian trademarks containing
the words "Boston", "BP", and/or "Pizza" are trademarks owned by
the Boston Pizza Royalties Limited Partnership and licensed by the
Boston Pizza Royalties Limited Partnership to Boston Pizza
International Inc. © Boston Pizza International Inc.
2025.
|
|
__________________________
|
|
Notes – Non-GAAP,
Specified Financial Measures and Other Information
|
|
|
|
1
|
"Franchise
Sales" is the basis upon which Royalty and Distribution Income
are payable, and means the gross revenue: (i) of the corporate
Boston Pizza restaurants in Canada owned by BPI that are in the
Royalty Pool; and (ii) reported to BP Canada LP by franchised
Boston Pizza restaurants in Canada that are in the Royalty Pool,
without audit or other form of independent assurance, and in the
case of both (i) and (ii), after deducting revenue from the sale of
liquor, beer, wine and revenue from BP Canada LP approved national
promotions and discounts and excluding applicable sales and similar
taxes. Nevertheless, BP Canada LP periodically conducts audits of
the Franchise Sales reported to it by its franchisees, and the
Franchise Sales reported herein include results from sales audits
of earlier periods.
|
|
2
|
"Same Restaurant
Sales" or "SRS" is a supplementary financial measure
under NI 52-112 and therefore may not be comparable to similar
measures presented by other issuers. The Fund defines SRS as
the change in Franchise Sales of Boston Pizza restaurants in the
Royalty Pool as compared to the Franchise Sales for the same period
in the previous year (where restaurants were open for a minimum of
24 months). The Fund believes that SRS provides Unitholders
meaningful information regarding the performance of Boston Pizza
restaurants.
|
|
3
|
"Distributable
Cash" is a non-GAAP financial measure under
NI 52-112. Distributable Cash is not a standardized
financial measure under IFRS and may not be comparable to similar
financial measures disclosed by other issuers. The Fund
defines Distributable Cash to be, in respect of any particular
period, the Fund's cash flows generated from operating activities
for that period (being the most comparable financial measure in the
Fund's primary financial statements) minus (a) BPI's
entitlement in respect of its Class B general partner units of
Royalties LP (the "Class B Units") in respect of
the period (see note 8 below), minus (b) interest paid on
debt during the period, minus (c) principal repayments on debt
that are contractually required to be made during the period, minus
(d) the current income tax expense in respect of the period,
plus (e) current income tax paid during the period (the sum of
(d) and (e) being "SIFT Tax on Units"). Management
believes that Distributable Cash provides investors with useful
information about the amount of cash the Fund has generated and has
available for distribution on the Units in respect of any
period. The tables in the "Financial Highlights" section of
this press release provide a reconciliation from this non-GAAP
financial measure to cash flows generated from operating
activities, which is the most directly comparable IFRS
measure. Current income tax expense in respect of any period
is prepared using reasonable and supportable assumptions (including
that the base rate of SIFT Tax will not increase throughout the
calendar year and that certain expenses of the Fund will continue
to be deductible for income tax purposes), all of which reflect the
Fund's planned courses of action given management's judgment about
the most probable set of economic conditions. There is a risk
that the federal government of Canada could increase the base rate
of SIFT Tax or that applicable taxation authorities could assess
the Fund on the basis that certain expenses of the Fund are not
deductible. Investors are cautioned that if either of these
possibilities occurs, then the actual results for this component of
Distributable Cash may vary, perhaps materially, from the amounts
used in the reconciliation.
|
|
4
|
"Distributable Cash
per Unit" is a non-GAAP ratio under NI 52-112.
Distributable Cash per Unit is not a standardized financial measure
under IFRS and may not be comparable to similar financial measures
disclosed by other issuers. The Fund defines Distributable
Cash per Unit for any period as the Distributable Cash generated in
that period divided by the weighted average number of Units
outstanding during that period. Management believes that
Distributable Cash per Unit provides investors with useful
information regarding the amount of cash per Unit that the Fund has
generated and has available for distribution in respect of any
period.
|
|
5
|
"Payout Ratio"
is a non-GAAP ratio under NI 52-112. Payout Ratio is not
a standardized financial measure under IFRS and may not be
comparable to similar financial measures disclosed by other
issuers. The Fund defines Payout Ratio for any period as the
aggregate distributions paid by the Fund during that period divided
by the Distributable Cash generated in that period.
Management believes that Payout Ratio provides investors with
useful information regarding the extent to which the Fund
distributes cash generated on Units.
|
|
6
|
Boston Pizza Royalties
Limited Partnership ("Royalties LP") licenses BPI the
right to use various Boston Pizza trademarks in return for BPI
paying Boston Pizza Royalties Limited Partnership a royalty equal
to 4% of Franchise Sales of Boston Pizza restaurants (the
"Royalty") in the Fund's royalty pool (the "Royalty
Pool").
|
|
7
|
"Distribution
Income" is income received indirectly by the Fund on
Class 1 LP Units and Class 2 LP Units of BP Canada
LP. See the "Overview – Purpose of the Fund / Sources of
Revenue" section of the Fund's MD&A for the Period and the Year
for more details.
|
|
8
|
"BPI Class B
Unit entitlement" is a supplementary financial measure under
NI 52-112 and therefore may not be comparable to similar
measures presented by other issuers. The BPI Class B
Unit entitlement is the interest expense on Class B Units in
respect of a period plus management's estimate of how much cash BPI
would be entitled to receive pursuant to the limited partnership
agreement governing Royalties LP (a copy of which is available
on www.sedarplus.ca) on its Class B Units if Royalties LP fully
distributed any residual cash generated in respect of that period
after the Fund pays interest on long-term debt, principal
repayments on long-term debt and SIFT Tax on Units in respect of
that period. Management believes that the BPI Class B Unit
entitlement is an important component in calculating Distributable
Cash since it represents the amount of residual cash generated that
BPI would be entitled to receive and therefore would not be
available for distribution to Unitholders. Management
prepares such estimate using reasonable and supportable assumptions
that reflect the Fund's planned courses of action given
management's judgment about the most probable set of economic
conditions.
|
SOURCE Boston Pizza Royalties Income Fund
