- Adjusted EBITDA(1) of $47.6 million in the quarter, compared to
$43.5 million in Q2-21.
- Cash flows from operating activities of $30.7 million in the quarter.
- Free cash flows per diluted share(2) reached
$1.06.
- Net income attributable to owners of $28.6 million in the quarter, or $1.17 per diluted share, up from a net income
attributable to owners of $23.0
million, or $0.93 per diluted
share, in Q2-21.
- Long-term debt repayments of $12.1
million for the quarter.
- System sales(3) of $1,054.3 million, up 18% compared to Q2-21.
System sales up 55% in Canada, 19%
Internationally and 1% in the US.
- Quarterly dividend payment of $0.21 per share on August
15, 2022 and NCIB renewed until July
2023.
(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, July 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 today its
results for the second quarter ended May 31,
2022 and declares its quarterly dividend of 21.0¢ per share,
payable on August 15, 2022 to
shareholders registered in the Company's records at the end of the
business day on August 3, 2022.
"We are delighted with our strong financial performance in the
second quarter of 2022, highlighted by an 18% year-over-year
increase in system sales, quarterly net income attributable to
owners increasing sharply to $28.6
million and robust adjusted EBITDA of $47.6 million," stated Eric Lefebvre, Chief Executive Officer of MTY.
"The lifting of government-imposed restrictions in Canada related to the COVID-19 pandemic
largely benefited our business as revenue from franchise operations
grew 46% year-over-year north of the border. Altogether, system
sales in Canada improved 55% in
the second quarter of 2022. Globally, the casual dining concepts
profited most from the pandemic recovery with system sales growth
of 107% in the second quarter. Our top 20 brands, which accounted
for 84% of our network sales in the most recent quarter, performed
very well with average sales growth of 14% year-over-year."
"Restaurant closings were at their lowest level in 16 quarters,
at 91. This was realized despite one franchisee closing 22
locations during the quarter. Although we still aim at closing
fewer restaurants, this is a small step in the right direction. The
opening of new locations, which reached 47 restaurants during the
quarter, continues to be under pressure due to ongoing supply chain
and construction issues, but there are encouraging signs these
matters are beginning to subside, particularly in the US."
"From a balance sheet perspective, we continued our disciplined
debt reduction program by reimbursing $12.1
million in the second quarter. We are in an excellent
position to realize acquisitions with more than $300 million in liquidities available, including
our available credit facility and cash on hand," Mr. Lefebvre
added.
Financial
Highlights
(in thousands of $,
except per
share information)
|
Q2-2022
|
Q2-2021
|
6
Months
2022
|
6
Months
2021
|
Revenue
|
162,518
|
135,857
|
303,012
|
254,817
|
Adjusted
EBITDA(1)
|
47,649
|
43,481
|
83,286
|
76,118
|
Adjusted EBITDA per
diluted
share(2)
|
1.95
|
1.76
|
3.40
|
3.08
|
Net income attributable
to
owners
|
28,619
|
23,028
|
45,256
|
36,425
|
Cash flows from
operations
|
30,739
|
29,541
|
70,435
|
60,848
|
Free cash
flows(1)
|
25,983
|
27,497
|
62,953
|
57,797
|
Free cash flows per
diluted
share(2)
|
1.06
|
1.11
|
2.57
|
2.34
|
Net income per share,
basic
|
1.17
|
0.93
|
1.85
|
1.47
|
Net income per share,
diluted
|
1.17
|
0.93
|
1.85
|
1.47
|
System
sales(3)
|
1,054,300
|
891,500
|
1,940,000
|
1,652,600
|
Digital
sales(3)
|
206,900
|
203,400
|
417,700
|
418,600
|
(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.
|
SECOND QUARTER RESULTS
Network:
- At the end of the quarter, MTY's network had 6,660 locations in
operation, of which 89 were corporate and 6,571 were franchised.
The geographical split of MTY's locations remained stable compared
to the second quarter of 2021 with 54% in the US, 39% in
Canada and 7% International.
- System sales increased 18% year-over-year to $1,054.3 million mainly due to the momentum in
the recovery from the COVID-19 pandemic. Canada contributed to most of the increase
with a 55% improvement, given the removal of most
government-imposed restrictions during the quarter. US system sales
grew 1% in the second quarter of 2022 compared to the same period
in 2021. Globally, the casual dining concepts contributed
$94.8 million to overall growth in
the second quarter of 2022, an increase of 107%
year-over-year.
Financial:
- Company revenue increased 20% year-over-year to $162.5 million in the second quarter of 2022
mainly due to a 46% surge in revenue from franchise locations in
Canada and a 32% improvement in
food processing, distribution and retail revenue in Canada. Altogether, revenue in Canada grew 42% in the second quarter of 2022
as government-imposed restrictions related to the COVID-19 pandemic
were mostly lifted, while revenue in the US and International
segment declined by 1%.
- Adjusted EBITDA increased 10% year-over-year to $47.6 million in the second quarter of 2022. Mall
and street locations generated growth of 61% and 13%,
respectively.
- Net income attributable to owners reached $28.6 million, or $1.17 per share ($1.17 per diluted share) in the second quarter of
2022 compared to $23.0 million, or
$0.93 per share ($0.93 per diluted share), in the same period last
year.
LIQUIDITY AND CAPITAL
RESOURCES
- Cash flows generated by operating activities reached
$30.7 million in the second quarter
of 2022 compared to $29.5 million in
the same period last year.
- MTY reimbursed $12.1 million of
its long-term debt and paid $5.1
million in dividends to its shareholders in the second
quarter of 2022.
- As at May 31, 2022, the Company
had $56.2 million of cash on hand and
long-term debt of
$348.9 million, mainly in the form of
bank facilities and holdbacks on acquisitions.
NEAR-TERM OUTLOOK
The Company continues to monitor the global situation
surrounding COVID-19 even as restrictions are lifted and is 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 and
six months ended May 31, 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 most brands
and geographies and continue their progression 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.
CONFERENCE CALL
The MTY Group will hold a conference call to discuss its
results on July 8, 2022, at
8:30 AM Eastern Time. Interested parties can join the call by
dialing 1-416-764-8646 (Toronto or overseas) or 1-888-396-8049
(elsewhere in North America).
Parties unable to call in at this time may access a recording by
calling 1-877-674-7070 and entering the passcode 863814.
This recording will be available on Friday,
July 8, 2022, as of 11:30 AM Eastern Time until
11:59 PM Eastern Time on Friday,
July 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 6,660 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) and adjusted EBITDA per diluted
share (adjusted EBITDA 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 second
quarter ended May 31, 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.