Boston Pizza Royalties Income Fund Announces 2019 Fourth Quarter and Annual Results Along with a Distribution Reduction

Monthly distribution reduced by 11.3%, providing the Fund a greater ability to maintain a payout ratio of 100% over time.

Toronto Stock Exchange: BPF.UN

VANCOUVER, Feb. 13, 2020 /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, 2019 to December 31, 2019 (the "Period") and January 1, 2019 to December 31, 2019 (the "Year").  A copy of this press release, the annual consolidated financial statements and related Management's Discussion and Analysis ("MD&A") of the Fund and BPI are available at www.sedar.com and www.bpincomefund.com. The Fund will host a conference call to discuss the results on February 13, 2020 at 8:30 am Pacific Time (11:30 am Eastern Time). The call can be accessed by dialling 1-800-319-4610 or 604-638-5340. A replay will be available until March 13, 2020 by dialling 1-800-319-6413 or 604-638-9010. and entering the access code: 3975 followed by the # sign. The replay will also be available at www.bpincomefund.com.

"The Trustees of the Fund decided to reduce the monthly cash distribution from $0.115 to $0.102 per unit for the January 2020 distribution," said Marc Guay, Chairman of the Fund. "Adjusting the distribution level to align with anticipated future revenues provides the Fund with greater certainty over its ability to sustain distributions into the foreseeable future. We are optimistic about the long-term prospects for the business and, because of the expanded credit facilities that the Fund entered into in January 2020, we are prepared to be active with a Normal Course Issuer Bid in the periods ahead. The Trustees believe that current market conditions may provide an opportunity for the Fund to acquire units at an attractive price and in a manner that is immediately accretive to Unitholders."

"This quarter and most of 2019 have been challenging for Boston Pizza and the full-service restaurant industry in Canada," said Jordan Holm, President of BPI. "As Canada's largest full-service restaurant brand, Boston Pizza is well-positioned to leverage its scale and push through current economic headwinds.  We are aggressively pursuing strategies to increase guest visits to our restaurants.  Initiatives include new menu innovation, targeted promotional campaigns and substantial renovations of existing Boston Pizza restaurants across the country.  In addition, we are taking advantage of the growing consumer preference for take-out and delivery meal occasions by enhancing our online ordering capabilities via www.bostonpizza.com and the MyBP app, and by partnering with third party delivery service providers."

Highlights

• System-Wide Gross Sales¹ of $276.5 million for the Period and $1.1 billion for the Year, representing decreases of 0.7% and 0.8%, respectively, versus the same periods one year ago.
• Franchise Sales² from royalty pool restaurants of $211.2 million for the Period and $853.7 million for the Year, representing decreases of 0.1% and 0.2%, respectively, versus the same periods one year ago.
• Same Restaurant Sales³ of negative 2.1% for the Period and negative 2.2% for the Year.
• Same Restaurant Sales on a Franchise Sales basis of negative 1.8% for the Period and negative 1.5% for the Year.
• Distributable Cash³ per Unit decreased 3.9% for the Period and decreased 1.4% for the Year.
• Payout Ratio⁴ of 108.0% for the Period and 104.8% for the Year.  Cash balance at the end of the Year was $1.8 million.
• Boston Pizza opened five new full-service restaurants and closed five full-service and one quick express restaurants for a net decrease of one restaurant in 2019.
• Boston Pizza completed 36 restaurant renovations in 2019.
• On January 24, 2020, the Fund amended and extended its credit facilities with a Canadian chartered bank, increasing available credit from approximately $90.3 million to $97.0 million and extending the maturity date from May 5, 2020 to January 24, 2025.
• Cash distribution of $0.102 per unit declared for January 2020, being a reduction of 1.3 cents or 11.3% from previous distribution rate of $0.115 per unit, and payable on February 28, 2020 to unitholders of record on February 21, 2020.

Same Restaurant Sales ("SRS"), a key driver of distribution growth for unitholders of the Fund, was negative 2.1% for the Period and negative 2.2% for the Year compared with negative 0.2% and positive 0.1%, respectively, for the same periods in 2018.  Franchise Sales, the basis upon which Royalty⁶ and Distribution Income⁶ are paid to the Fund, exclude revenue from the sale of liquor, beer, wine and approved national promotions and discounts. On a Franchise Sales basis, SRS was negative 1.8% for the Period and negative 1.5% for the Year compared with positive 0.1% and negative 0.3%, respectively, for the same periods in 2018. The SRS for the Period and the Year was principally due to declines in restaurant guest traffic, partially offset by increased take-out and delivery sales and menu price increases.  Management of BPI believes that such declines in guest traffic are the results of increased competition in the full‑service restaurant sector, shifts in consumer spending habits in response to increased menu pricing tied to rising minimum wages, waning consumer confidence in the retail sector, increasing levels of household debt and high proportions of Boston Pizza restaurants being located in regions of Canada that are facing economic challenges. Franchise Sales of restaurants in the Fund's Royalty Pool were $211.2 million for the Period and $853.7 million for the Year compared to $211.4 million and $855.1 million, respectively, for the same periods in 2018.  The decreases in Franchise Sales for the Period and the Year are primarily due to negative SRS on a Franchise Sales basis, partially offset by additional Franchise Sales from five Net New Restaurants⁷ added to the Royalty Pool on January 1, 2019.

The Fund's net and comprehensive loss was $4.6 million for the Period compared to net and comprehensive loss of $1.0 million for fourth quarter of 2018.  The $3.6 million decrease in the Fund's net and comprehensive income for the Period compared to the fourth quarter of 2018 was primarily due to a $3.5 million change in fair value adjustments. The Fund's net and comprehensive income was $22.5 million for the Year compared to net and comprehensive income of $8.7 million in 2018.  The $13.8 million increase in the Fund's net and comprehensive income for the Year compared to the same period in 2018 was primarily due to a $17.0 million change in fair value adjustments, partially offset by higher non-cash deferred income taxes of $2.5 million.  For a detailed discussion on the Fund's net and comprehensive income, please see the "Operating Results – Net and Comprehensive Income / Basic and Diluted Earnings" section in the Fund's MD&A for the Period and the Year. The Fund's net income under International Financial Reporting Standards ("IFRS") contains non-cash items, such as the fair value adjustments on financial instruments and deferred income taxes, that do not affect the Fund's business operations or its ability to pay distributions to unitholders.  In the Fund's view, net income is not the only or most meaningful measurement of the Fund's ability to pay distributions.  Consequently, the Fund reports the non-IFRS metrics of Distributable Cash and Payout Ratio to provide investors with more meaningful information regarding the amount of cash that the Fund has generated to pay distributions and the extent to which the Fund has distributed that cash.  The Fund also reports the non-IFRS metric of SRS to provide investors useful information regarding the change in gross sales of Boston Pizza restaurants.  Readers are cautioned that Distributable Cash, Payout Ratio and SRS are non-IFRS financial measures that do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.  For a reconciliation between cash flow from operating activities (the most directly comparable IFRS measure) and Distributable Cash see the "Financial Summary" section of this press release.  For a detailed discussion on the Fund's Distributable Cash and Payout Ratio, please see the "Operating Results – Distributable Cash / Payout Ratio" section in the Fund's MD&A for the Period and the Year. A reconciliation of SRS to an IFRS measure is not possible.

The Fund generated Distributable Cash of $7.0 million for the Period, compared to $7.3 million for the fourth quarter of 2018.  The decrease in Distributable Cash of $0.3 million or 4.2% was primarily due to an increase in BPI's entitlement related to Class B general partner units of Boston Pizza Royalties Limited Partnership ("Royalties LP") of $0.1 million combined with a slightly higher working capital.  The Fund generated Distributable Cash of $28.7 million for the Year compared to $29.2 million in 2018.  The decrease in Distributable Cash of $0.5 million or 1.8% was primarily attributable to an increase in BPI's Class B Unit entitlement of $0.4 million and lower Royalty and Distribution Income of $0.2 million.

The Fund generated Distributable Cash per unit of the Fund ("Unit") of $0.319 for the Period compared to $0.332 per Unit for the fourth quarter of 2018.  The decrease in Distributable Cash per Unit of $0.013 or 3.9% was primarily attributable to the decrease in Distributable Cash outlined above, partially offset by there being fewer Units outstanding compared to the same period in 2018 due to the Fund's normal course issuer bid that was active from November 26, 2018 to December 14, 2018, which resulted in the purchase and cancellation of 98,300 Units at an average price of $15.86 per Unit (the "2018 NCIB"). The Fund generated Distributable Cash per Unit of $1.317 for the Year compared to $1.336 in 2018.  The decrease in Distributable Cash per Unit of $0.019 or 1.4% was primarily attributable to the decrease in Distributable Cash outlined above, partially offset by there being fewer Units outstanding compared to the same period in 2018 due to the Fund's 2018 NCIB.

The Fund's Payout Ratio was 108.0% for the Period and 104.8% for the Year compared to 103.8% and 103.3%, respectively, for the same periods in 2018. The increase in the Fund's Payout Ratio for the Period compared to the same period in 2018 was due to the combined effects of Distributable Cash decreasing by $0.3 million or 4.2%, and distributions paid decreasing by a nominal amount or 0.3%. The increase in the Fund's Payout Ratio for the Year compared to the same period in 2018 was due to the combined effects of Distributable Cash decreasing by $0.5 million or 1.8%, and distributions paid decreasing by $0.1 million or 0.4%. Distributions paid for the Period and the Year decreased as a result of there being fewer Units outstanding compared to same period in 2018 due to the 2018 NCIB.  The Fund strives to provide unitholders with consistent monthly distributions, and as a result, the Fund will generally experience seasonal fluctuations in its Payout Ratio.  The Fund's Payout Ratio is likely to be higher in the first and fourth quarters each year compared to the second and third quarters each year since Boston Pizza restaurants generally experience higher Franchise Sales during the summer months when restaurants open their patios and benefit from increased tourist traffic.  Higher Franchise Sales generally result in increases in Distributable Cash. A key feature of the Fund is that it is a "top line" structure, in which BPI and Boston Pizza Canada Limited Partnership ("BP Canada LP") pay the Fund an amount based on Franchise Sales from restaurants in the Royalty Pool.  Accordingly, unitholders of the Fund are not directly exposed to changes in the operating costs or profitability of BPI, BP Canada LP or individual Boston Pizza restaurants.  Given this structure, and that the Fund has no current mandate to retain capital for other purposes, it is expected that the Fund will maintain a Payout Ratio close to 100% over time as the trustees of the Fund continue to distribute all available cash in order to maximize returns to unitholders.

On February 12, 2020, the Trustees declared a distribution for January 2020 of $0.102 per unit, which will be payable on February 28, 2020 to unitholders of record on February 21, 2020.  The monthly distribution rate of $0.102 per unit represents a reduction of 1.3 cents or 11.3% from the previous monthly distribution rate of $0.115 per unit and represents an annual distribution rate of $1.224 per unit compared to the previous annual distribution rate of $1.38 per unit.  If the Fund had distributed $1.224 per unit in respect of the Year instead of the $1.38 per unit that it did, the Fund's Payout Ratio for the Year would have been 93.4% rather than 104.8%.

Including the January 2020 distribution, which will be paid on February 28, 2020, the Fund will have paid 211 consecutive monthly distributions totaling $339.1 million or $22.12 per Unit.  The Fund periodically reviews distribution levels based on its policy of stable and sustainable distribution flow to unitholders.

FINANCIAL SUMMARY

The tables below set out selected information from the Fund's annual consolidated financial statements together with other data and should be read in conjunction with the annual consolidated financial statements and MD&A of the Fund for the years ended December 31, 2019 and 2018.

For the years ended December 31	2019	2018	2017
(in thousands of dollars – except restaurants, SRS, Payout Ratio and per Unit items)
System-Wide Gross Sales	1,106,687	1,115,200	1,099,107
Number of restaurants in Royalty Pool	396	391	383
Franchise Sales reported by restaurants in the Royalty Pool	853,728	855,108	844,496
Royalty income	34,149	34,204	33,780
Distribution Income	11,246	11,407	10,904
Interest income	40	33	1,217
Total revenue	45,435	45,644	45,901
Administrative expenses	(1,248)	(1,255)	(1,209)
Interest expense on debt	(2,830)	(2,676)	(2,437)
Interest expense on Class B Unit liability and Class C GP Unit liabilities	(4,133)	(3,722)	(5,818)
Profit before fair value adjustments and income taxes	37,224	37,991	36,437
Fair value adjustment on investment in BP Canada LP	(9,002)	(37,099)	(4,441)
Fair value adjustment on Class B Unit liability	4,120	14,814	3,122
Fair value adjustment on interest rate swaps	(824)	(412)	1,275
Current and deferred income tax expense	(9,015)	(6,625)	(9,400)
Net and comprehensive income	22,503	8,669	26,993
Basic earnings per Unit	1.03	0.40	1.30
Diluted earnings (loss) per Unit	0.88	(0.12)	1.16
Distributable Cash / Distributions / Payout Ratio
Cash flows from operating activities	35,621	35,678	36,823
Class C GP Unit distributions to BPI	-	-	(1,200)
BPI Class B Unit entitlement	(4,133)	(3,722)	(4,618)
Interest paid on long-term debt	(2,821)	(2,710)	(2,440)
SIFT Tax on Units	33	(6)	(9)
Distributable Cash	28,700	29,240	28,556
Distributions paid	30,067	30,191	28,547
Payout Ratio	104.8%	103.3%	100.0%
Distributable Cash per Unit	1.317	1.336	1.379
Distributions paid per Unit	1.380	1.380	1.380
Other
Same Restaurant Sales	(2.2%)	0.1%	(0.3%)
Number of restaurants opened	5	10	11
Number of restaurants closed	6	5	3
As at December 31	2019	2018	2017
Total assets	396,426	403,686	434,939
Total liabilities	131,323	131,019	139,201

Notes:
1)	"System-Wide Gross Sales" means the gross revenue: (i) of the corporate Boston Pizza restaurants in Canada owned by BPI; and (ii) reported to BP Canada LP by franchised Boston Pizza restaurants in Canada, without audit or other form of independent assurance, and in the case of both (i) and (ii), including 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.
2)	"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 Fund's Royalty Pool; and (ii) reported to BP Canada LP by franchised Boston Pizza restaurants in Canada that are in the Fund's 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.
3)	"Same Restaurant Sales" or "SRS" (previously named "same store sales growth" – see the "Overview – Top-Line Fund / Increases in Franchise Sales" section of the Fund's MD&A for the Period and YTD for more details) is the change in gross revenue of Boston Pizza restaurants as compared to the gross revenue for the same period in the previous year for Boston Pizza restaurants that have been open for a minimum 24 months.  SRS is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.  Management believes SRS provides investors useful information regarding the change in gross sales of Boston Pizza restaurants.
4)	"Distributable Cash" is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.  Management believes that this non-IFRS financial measure provides useful information to investors regarding the amount of cash the Fund has generated for distribution on the Units.  The preceding table provides a reconciliation from this non-IFRS financial measure to cash flows from operating activities, which is the most directly comparable IFRS measure.  Investors are cautioned that this should not be construed as an alternative to cash flows from operating activities.  For additional information regarding this financial metric, see the heading "Description of Non-IFRS and Additional IFRS Measures" in the Fund's MD&A for the Period and the Year.
5)	"Payout Ratio" is calculated by dividing the aggregate distributions paid by the Fund during a period by the Distributable Cash generated in that period.  Payout Ratio is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.  Management believes that this non-IFRS financial measure provides investors with useful information regarding the extent to which the Fund distributes cash on the Units.  As the Payout Ratio is calculated from a formula which includes Distributable Cash, which is a non-IFRS measure, a reconciliation of Payout Ratio to an IFRS measure is not possible.  For additional information regarding this financial metric, see the heading "Description of Non-IFRS and Additional IFRS Measures" in the Fund's MD&A for the Period and the Year.
6)	Royalties LP licenses BPI the right to use various Boston Pizza trademarks in return for BPI paying Royalties LP a royalty equal to 4% of Franchise Sales of Boston Pizza restaurants (the "Royalty") in the Fund's royalty pool (the "Royalty Pool").  "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.
7)	On January 1 of each year, an adjustment is made to add the Fund's Royalty Pool new Boston Pizza restaurants that opened and to remove any Boston Pizza restaurants that permanently closed since January 1 of the previous year (the "Net New Restaurants").
8)	Profit before fair value adjustments and income taxes is an additional IFRS measure.  For additional information regarding these financial metrics, see the heading "Description of Non-IFRS and Additional IFRS Measures" in the Fund's MD&A for the Period and the Year.
9)	Capitalized terms used in this press release that are undefined have the meanings ascribed to them in the Fund's MD&A for the Period and the Year.

SUMMARY OF QUARTERLY RESULTS

	Q4 2019	Q3 2019	Q2 2019	Q1 2019
(in thousands of dollars – except restaurants, SRS, Payout Ratio and per Unit items)
System-Wide Gross Sales	276,509	283,570	281,310	265,298
Number of restaurants in Royalty Pool	396	396	396	396
Franchise Sales reported by restaurants in the Royalty Pool	211,173	219,226	216,882	206,447
Royalty income	8,447	8,769	8,675	8,258
Distribution Income	2,785	2,886	2,856	2,719
Interest income	9	9	10	12
Total revenue	11,241	11,664	11,541	10,989
Administrative expenses	(280)	(345)	(307)	(316)
Interest expense on debt	(713)	(712)	(709)	(696)
Interest expense on Class B Unit liability	(1,383)	(1,010)	(1,030)	(710)
Profit before fair value adjustments and income taxes	8,865	9,597	9,495	9,267
Fair value adjustment on investment in BP Canada LP	(20,677)	(873)	4,201	8,347
Fair value adjustment on Class B Unit liability	9,107	385	(1,851)	(3,521)
Fair value adjustment on interest rate swaps	324	97	(363)	(882)
Current and deferred income tax expense	(2,247)	(2,343)	(2,313)	(2,112)
Net and comprehensive income (loss)	(4,628)	6,863	9,169	11,099
Basic earnings (loss) per Unit	(0.21)	0.31	0.42	0.51
Diluted earnings (loss) per Unit	(0.53)	0.27	0.42	0.51
Distributable Cash / Distributions / Payout Ratio
Cash flows from operating activities	8,721	9,497	9,039	8,364
BPI Class B Unit entitlement	(1,031)	(1,025)	(1,029)	(1,048)
Interest paid on long-term debt	(702)	(710)	(723)	(686)
SIFT Tax on Units	(27)	52	37	(29)
Distributable Cash	6,961	7,814	7,324	6,601
Distributions paid	7,517	7,516	7,517	7,517
Payout Ratio	108.0%	96.2%	102.6%	113.9%
Distributable Cash per Unit	0.319	0.359	0.336	0.303
Distributions paid per Unit	0.345	0.345	0.345	0.345
Other
Same Restaurant Sales	(2.1%)	(4.2%)	(1.2%)	(1.3%)
Number of restaurants opened	0	2	3	0
Number of restaurants closed	2	0	3	1

SUMMARY OF QUARTERLY RESULTS (continued)

(in thousands of dollars – except restaurants, SRS, Payout Ratio and per Unit items)	Q4 2018	Q3 2018	Q2 2018	Q1 2018
System-Wide Gross Sales	278,486	290,331	280,848	265,535
Number of restaurants in Royalty Pool	391	391	391	391
Franchise Sales reported by restaurants in the Royalty Pool	211,350	224,368	215,353	204,037
Royalty income	8,454	8,974	8,615	8,161
Distribution Income	2,823	2,991	2,871	2,722
Interest income	9	8	7	9
Total revenue	11,286	11,973	11,493	10,892
Administrative expenses	(299)	(303)	(327)	(326)
Interest expense on debt	(693)	(672)	(662)	(649)
Interest expense on Class B Unit liability	(1,239)	(908)	(934)	(641)
Profit before fair value adjustments and income taxes	9,055	10,090	9,570	9,276
Fair value adjustment on investment in BP Canada LP	(11,675)	(13,476)	(1,800)	(10,148)
Fair value adjustment on Class B Unit liability	4,661	5,380	719	4,054
Fair value adjustment on interest rate swaps	(732)	298	17	5
Current and deferred income tax expense	(2,270)	(1,361)	(2,219)	(775)
Net and comprehensive income (loss)	(961)	931	6,287	2,412
Basic earnings (loss) per Unit	(0.04)	0.04	0.29	0.11
Diluted earnings (loss) per Unit	(0.21)	(0.17)	0.23	(0.07)
Distributable Cash / Distributions / Payout Ratio
Cash flows from operating activities	8,882	9,548	8,958	8,290
BPI Class B Unit entitlement	(926)	(915)	(931)	(950)
Interest paid on long-term debt	(683)	(687)	(669)	(671)
SIFT Tax on Units	(7)	25	(29)	5
Distributable Cash	7,266	7,971	7,329	6,674
Distributions paid	7,539	7,551	7,550	7,551
Payout Ratio	103.8%	94.7%	103.0%	113.1%
Distributable Cash per Unit	0.332	0.364	0.335	0.305
Distributions paid per Unit	0.345	0.345	0.345	0.345
Other
Same Restaurant Sales	(0.2%)	0.0%	0.3%	0.2%
Number of restaurants opened	7	2	1	0
Number of restaurants closed	0	4	0	1

OUTLOOK

The Fund's and Boston Pizza's growth plans are largely dependent upon the ability to generate positive SRS.  The two principal factors that affect SRS are changes in guest traffic and changes in average guest cheque.  BPI's and BP Canada LP's strategies to drive higher guest traffic include attracting a wide variety of guests into the restaurant, sports bar and take-out and delivery channels of each restaurant, offering a compelling value proposition to guests and leveraging a large marketing budget to drive national and local restaurant promotions.  Increased average cheque levels are expected to be achieved through a combination of culinary innovation and periodic menu re-pricing.  In addition, the franchise agreement governing each Boston Pizza Restaurant requires a complete restaurant renovation every seven years.  Restaurants typically close for two to three weeks to complete the renovation and experience an incremental sales increase in the year following the re-opening.

The Canadian full-service restaurant sector has recently experienced declines in guest traffic and Boston Pizza is no exception.  Management of BPI believes that such declines are the results of increased competition in the full-service restaurant sector, shifts in consumer spending habits in response to increased menu pricing tied to rising minimum wages, waning consumer confidence in the retail sector, increasing levels of household debt and high proportions of Boston Pizza restaurants being located in regions of Canada that are facing economic challenges.  These factors have contributed to the decline in Boston Pizza's recent SRS performance.  Management of BPI is aggressively implementing various initiatives to mitigate the effects current industry challenges are having on Boston Pizza's results, however, if current industry challenges persist, they will continue to negatively affect SRS.  Notwithstanding the current industry challenges, management of BPI continues to believe that Boston Pizza is well-positioned to attract guests, achieve positive SRS over the long term and continue to strengthen its position as the number one casual dining brand in Canada.  In addition, management of BPI continues to believe that Boston Pizza remains well positioned for long term future expansion.

ABOUT US

The Fund is a limited purpose open ended trust with an excellent track record for investors since its IPO in 2002.  Including the January 2020 distribution which is payable on February 28, 2020, the Fund will have paid 211 consecutive monthly distributions totaling $339.1 million or $22.12 per Unit. The Fund earns revenue based on the franchise system sales of the 395 Boston Pizza restaurants in the Fund's royalty pool.

BPI is Canada's number one casual dining brand with annual gross sales of over $1.1 billion serving more than 50 million guests through over 390 mainly franchisee operated restaurants. The Boston Pizza brand has successfully existed for over 55 years since opening its first restaurant in Edmonton, Alberta in 1964. BPI has been recognized as a Platinum Member of Canada's 50 Best Managed Companies and has been a Franchisees' Choice Designation winner for eight consecutive years.

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 management of BPI expects or anticipates will or may occur in the future, including such things as, that adjusting the distribution level will align with anticipated future revenues and provide the Fund with greater certainty over its ability to sustain distributions into the foreseeable future, the trustees being optimistic about the long-term prospects for the business, the Fund being prepared to be active with a Normal Course Issuer Bid in the periods ahead, the trustees believing that current market conditions may provide an opportunity for the Fund to acquire units at an attractive price that will be immediately accretive to Unitholders, increased average cheque levels are expected to be achieved through a combination of culinary innovation and periodic menu re-pricing, Boston Pizza aggressively pursuing strategies to increase guest visits to restaurants including new menu innovation, targeted promotional campaigns and substantial renovations of existing BP restaurants across the country, growing consumer preference for take-out and delivery meal occasions by enhancing online ordering capabilities and partnering with third party delivery services, seasonal fluctuations in the Payout Ratio, the Payout Ratio is likely to be higher in the first and fourth quarters, higher Franchise Sales generally result in increases in Distributable Cash, a Payout Ratio close to 100% will be maintained, trustees of the Fund will continue to distribute all available cash in order to maximize returns to unitholders, management of BPI aggressively implementing various initiatives to mitigate the effects current industry challenges are having on Boston Pizza's results, the persistence of industry challenges continuing to negatively affect SRS, management of BPI continuing to believe that Boston Pizza is well positioned to attract guests, achieve positive SRS over the long term, continue to strengthen its position as the number one casual dining brand in Canada and for long-term future expansion, attracting a wide variety of guests into the restaurant, sports bar and take-out and delivery channels at each restaurant, offering compelling value proposition to guests, leveraging a large marketing budget to drive national and restaurant promotions, increases in average guest cheques levels, incremental sales increasing after restaurant renovations, plans to pursue restaurant development opportunities 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: future results being similar to historical results, expectation related to future general economic conditions, business plans, receipt of franchise fees and other amounts, franchisees access to financing, pace of commercial real estate development, protection of intellectual property rights of Boston Pizza Royalties Limited Partnership and absence of changes of laws.  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, consumer preferences and discretionary spending patterns, business and economic conditions, legislation, and regulation, Distributable Cash and reliance on operating revenues, accounting policies and practices, the results of operations and financial condition of BPI, BP Canada LP and the Fund, changes in consumer spending habits, consumer confidence in the retail sector, household debt, 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, the Fund and BPI assume no 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 and Uncertainties" and "Note Regarding Forward-Looking Information" sections included in the Fund's MD&A for the Period and the Year available at www.sedar.com and www.bpincomefund.com.

The trustees of the Fund approved the contents of this press release.

® Boston Pizza Royalties Limited Partnership. All Boston Pizza registered Canadian trade-marks and unregistered Canadian trade-marks containing the words "Boston", "BP", and/or "Pizza" are trade-marks owned by the Boston Pizza Royalties Limited Partnership and licensed by the Boston Pizza Royalties Limited Partnership to Boston Pizza International Inc.

SOURCE Boston Pizza Royalties Income Fund

Michael Harbinson, Chief Financial Officer, Tel: [phone], E-mail: [email protected], www.bpincomefund.com

Related Links

www.bpincomefund.com