- Adjusted EBITDA(1) of $35.6 million in the quarter, compared to
$32.6 million in Q1-21.
- Cash flows from operating activities of $39.7 million in the quarter.
- Free cash flows per diluted share(2) reached
$1.51.
- Net income attributable to owners of $16.6 million in the quarter, or $0.68 per diluted share, up from a net income
attributable to owners of $13.4
million, or $0.54 per diluted
share, in Q1-21.
- Long-term debt repayments of $10.1
million for the quarter.
- Repurchased and cancelled 256,400 shares for a total
consideration of $14.6 million in
Q1-22.
- System sales(3) of $885.7
million, up 16% compared to Q1-21. System sales up 46% in
Canada, 12% Internationally and 4%
in the US.
- 82 restaurants were temporarily closed at the beginning of
the quarter and 69 at the end of the quarter. 67 restaurants
remained temporarily closed as at the date of this press release.
225 locations were closed one or more days during the
quarter.
- Quarterly dividend payment of $0.21 per share on February 15, 2022.
- Acquisition of Küto Comptoir à Tartares in December 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 the "Non-GAAP Ratios" section at the end of
this press release.
|
(3)
|
This is a supplementary
financial measure. Please refer to the "Supplementary Financial
Measures" section at the end of this press release.
|
MONTREAL, April 8,
2022 /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 first quarter ended February 28, 2022.
"Our network showed great resilience again in the first quarter
of 2022. We are pleased with our overall financial results,
realized while facing stringent public health measures in
Canada for the better part of the
first quarter of 2022 due to the Omicron variant," stated
Eric Lefebvre, Chief Executive
Officer of MTY. "Profitability in terms of net income attributable
to owners and adjusted EBITDA increased 24% and 9% year-over-year,
respectively, while system sales grew 16% during the same period.
Canadian sales continue to recover, with a 46% year-over-year
growth in system sales, including a strong rebound from the casual
dining concept, while our US sales continue their strong
performance, with a 4% growth over last year. We are also highly
encouraged by the opening of 75 new locations throughout MTY's
network in the first quarter, which makes it the best first quarter
in our history in terms of restaurant openings."
"Looking ahead, we anticipate continued recovery in Canada as public health measures get lifted.
In the US, we're facing a tougher comparable since most states had
already loosened measures on the restaurant industry during the
past year. As always, we're opportunistically seeking acquisitions
to supplement organic growth in order to generate added value for
shareholders," concluded Mr. Lefebvre.
Financial
Highlights
(in thousands of $,
except per share information)
|
Q1-2022
|
Q1-2021
|
Revenue
|
140,494
|
118,960
|
Adjusted
EBITDA(1)
|
35,637
|
32,637
|
Net income attributable
to owners
|
16,637
|
13,397
|
Cash flows from
operations
|
39,696
|
31,307
|
Free cash
flows(1)
|
36,970
|
30,300
|
Free cash flows per
diluted share(2)
|
1.51
|
1.23
|
Net income per share,
basic
|
0.68
|
0.54
|
Net income per share,
diluted
|
0.68
|
0.54
|
System
sales(3)
|
885,700
|
761,100
|
Digital
sales(3)
|
210,800
|
215,200
|
(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 the "Non-GAAP Ratios" section at the end of
this press release.
|
(3)
|
This is a supplementary
financial measure. Please refer to the "Supplementary Financial
Measures" section at the end of this press release.
|
FIRST QUARTER RESULTS
Network:
- At the end of the quarter, MTY's network had 6,704 locations in
operation, of which 89 were corporate and 6,615 were franchised.
The geographical split of MTY's locations remained stable compared
to the first quarter of 2021 with 54% in the US, 39% in
Canada and 7% International.
- System sales increased 16% year-over-year to $885.7 million mainly due to the momentum in the
recovery from the COVID-19 pandemic. Despite the effects of the
Omicron variant, Canada
contributed most of the growth with a 46% increase year-over-year.
US system sales grew 4% in the first quarter of 2022 with the
removal of most government-imposed restrictions in key states and
territories, while International system sales improved 12%. Casual
dining concepts added $44.0 million
to overall growth in the first quarter of 2022, an increase of 86%
year-over-year.
- At the end of the quarter, 69 locations were still temporarily
closed because of the pandemic compared to 321 at the end of the
same quarter last year. Of these temporarily closed locations, 52
were in Canada, 8 in the US and 9
Internationally. As at April 7, 2022,
67 locations remained temporarily closed.
Financial:
- The Company's revenue grew 18% to $140.5
million in the first quarter of 2022 mainly due to increased
recurring revenue streams from franchise locations in Canada and higher food processing,
distribution and retail revenues in Canada. Altogether, revenue from franchise
locations in Canada surged 54%
year-over-year. Food processing, distribution and retail revenue in
Canada, meanwhile, improved 27%
year-over-year on the strength of new listings in retail and
expansion into new territories, as well as higher revenues
generated by the Company's processing and distribution
centers.
- Adjusted EBITDA increased 9% year-over-year to $35.6 million in the first quarter of 2022. Major
brands such as Cold Stone, Baton Rouge, Ben & Florentine, Thai
Express and Sushi Shop greatly outperformed year-over-year. Mall
and street locations generated growth of 63% and 11%,
respectively.
- Net income attributable to owners reached $16.6 million, or $0.68 per share ($0.68 per diluted share) in the first quarter of
2022 compared to $13.4 million, or
$0.54 per share ($0.54 per diluted share), in the same period last
year.
LIQUIDITY AND CAPITAL RESOURCES
- In the first quarter of 2022, cash flows generated by operating
activities reached $39.7 million,
compared to
$31.3 million for the same period
last year. Excluding the variation in non-cash working capital
items, income taxes, interest paid and other, operations generated
$36.9 million in cash flows, compared
to $34.4 million for the first
quarter of 2021.
- MTY reimbursed $10.1 million of
its long-term debt and paid $5.1
million in dividends to its shareholders in the first
quarter of 2022. The Company also repurchased and cancelled 256,400
shares for $14.6 million through its
Normal Course Issuer Bid during the quarter.
- As at February 28, 2022, the
Company had $52.5 million of cash on
hand and long-term debt of
$362.2 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 for
the three months ended February 28,
2022 ("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, 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. In the wake
of COVID-19, MTY has diversified its sources of revenue by
expanding into other sales channels, such as: launching multiple
ghost kitchens in existing restaurant locations, thus benefitting
from the synergies of shared costs, streamlined workflows as well
as being able to respond to the increase in delivery and takeout
orders; and launching new products in the retail division and
expanding into new territories, in response to increased consumer
spending in grocery stores that has continued throughout the waves
of the pandemic.
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 acquisitions 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 synergies. For further
details, please refer to the MD&A.
CONFERENCE CALL
The MTY Group will hold a conference call to discuss its
results on April 8, 2022, 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, April 8, 2022, as
of 11:30 AM Eastern Time until 11:59 PM Eastern Time on Friday, April
15, 2022.
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 6,704 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 net impairment charges), and free cash flows (sum total cash
flows from operating activities less capital expenditures net of
disposals) 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,
non-GAAP ratios (defined below) and supplemental financial measures
(defined below) are useful because they are consistent with the
indicators management uses internally to measure the Company's
performance, to prepare operating budgets and to determine
components of executive compensation. The Company also believes
that these measures are used by securities analysts, investors and
other interested parties and that these measures allow them to
compare the Company's operations and financial performance from
period to period and provide them 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 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 first
quarter ended February 28, 2022, 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.