Imvescor Restaurant Group Inc. Announces First Quarter Fiscal 2015 Results

MONTREAL, March 6, 2015 /CNW Telbec/ - Imvescor Restaurant Group Inc. ("Imvescor" or the "Company") (TSX: IRG), a leading franchiser of restaurants operating 232 locations in Eastern Canada under the Pizza Delight^®, Mikes^®, Scores^® and Bâton Rouge^® banners, reported financial results today for the 13 weeks ended January 25, 2015 ("Q1 2015").

Highlights

The Company refers to Total System Sales, SRS growth, Operating EBITDA and Free cash flow in this review. These are non-GAAP measures, refer to the "Non-GAAP Measures and Financial Metrics" section of this press release for the definitions.

• Same Restaurant Sales growth of -0.8% improved by 2.6 percentage points versus last year. Pizza Delight had a strong quarter while Mikes and Bâton Rouge were relatively flat to last year.
• Total System Sales decreased by 2% quarter over quarter due principally to a 7% reduction in the Scores brand. Management continues to focus on both operational and marketing improvements for the Scores brand.
• The Company's Operating EBITDA for Q1 2015 decreased compared to the first quarter of fiscal 2014, to $3.3 million, due mainly to lower retail royalties of $0.7 million resulting from a onetime promotional event at one grocery customer, in Q1 2014, to support the launch of Bâton Rouge ribs.
• During the quarter, the Company announced its office consolidation plan, incurring $0.7 million in costs related to this initiative. Concurrently, the management team was enhanced by the addition of a new CFO, VP Purchasing and Scores Brand Leader and others.
• Free cash flow for Q1 2015 was $3.6 million, compared to $4.7 million for Q1 2014, a decrease of $1.1 million or 24%, primarily due to the decrease in net earnings.
• The Company paid a dividend of $0.02 per common share in Q1, representing an aggregate payment of $0.9 million.
• The Board of Directors was strengthened with the addition of 3 new members with proven and relevant industry experience and the appointment of Francois-Xavier Seigneur as the Chair of the Board.
• The strategic plan will be presented at the annual and special meeting of shareholders scheduled to be held on April 15, 2015.
• The Company will institute earnings calls as it announces its second quarter results next June.

First Quarter Fiscal 2015 Selected Financial Data
(in thousands of dollars, except for share data, % amounts and number of
restaurant and restaurant operating weeks)		Q1 2015			Q1 2014
13 weeks ended		January 25, 2015			January 26, 2014			% Change
Total System Sales (*)		$	89,316		$	91,212		-2%
SRS growth (*)			-0.8%			-3.4%		2.6%
Number of restaurant operating weeks			2,993			3,076		-3%
Number of restaurants			232			237		-2%
Total revenues			11,200			12,431		-10%
Cost of goods sold			1,817			1,690		8%
General, administrative and franchise support expenses			6,744			6,220		8%
Results from operating activities			2,639			4,521		-42%
Operating EBITDA (*)			3,253			4,079		-20%
Net earnings and comprehensive income			1,576			2,797		-44%
EPS:
Basic			0.04			0.07		-43%
Diluted			0.03			0.05		-40%
Free cash flow (*)			3,612			4,740		24%
Dividends paid			929			-		100%
(in thousands of dollars)		Q1 2015			F2014
As at		January 25, 2015			October 26, 2014			% Change
Cash		$	13,166		$	10,398		27%
Working capital excluding debt to be refinanced			4,910			3,238		52%
Total debt			29,847			30,540		-2%

*Total System Sales, SRS growth, Operating EBITDA and Free cash flow are non-GAAP measures. Please refer to the "Non-GAAP Measures and Financial Metrics" section of this press release for the definitions.

Appointment of Chair of the Board of Directors

The Company today announced the appointment of Mr. Francois-Xavier Seigneur as Chair of the Board of Directors (the "Board"), effective immediately. Also effective as of the date hereof, Mr. Pierre A. Raymond will succeed to Mr. Seigneur as Chair of the Corporate Governance, Human Resources and Compensation Committee of Imvescor (the "CGHRC Committee") and will be joined on the CGHRC Committee by Mr. Patrick H. Sugrue. Mr. Seigneur will remain a member of the CGHRC Committee.

"We are very pleased to have a prominent and high-caliber individual such as Mr. Seigneur agree to be our next Chair of the Board" said Mr. Frank Hennessey, President and Chief Executive Officer of Imvescor. "We believe the appointment of Mr. Seigneur as Chairman of the Board and of Mr. Raymond as Chair of the Corporate Governance, Human Resources and Compensation Committee will be of great benefit to finalize Imvescor's vision and develop and implement our strategic plan."

Dividend Declaration

Pursuant to its previously announced dividend policy, the Board today declared a dividend of $0.02 per common share. The dividend will be paid on April 7, 2015 to shareholders of record as at the close of business on March 20, 2015 and is designated as an "eligible dividend" for Canadian tax purposes.

The declaration and payment of any future dividend remains at the discretion of the Board and will depend on the Company's current and anticipated cash requirements and surplus, capital expenditures requirements, regulatory restrictions, financial results, future prospects, current and future contractual restrictions such as restrictions under credit or other arrangements, the satisfaction of solvency tests imposed by the CBCA for the declaration of dividends and other factors deemed relevant by the Board. Any dividend policy established by the Board, including the Company's current dividend policy, can be changed at any time and is not binding on the Company. There can be no guarantee that the Company will maintain its current dividend policy or any dividend policy or that any dividend will be declared or paid.

About Imvescor Restaurant Group Inc. Imvescor Restaurant Group Inc. is a dynamic and innovative organisation in the family and casual dining restaurant industry. The Company is a franchise and licensing business that operates restaurants in Eastern Canada under four banners: Pizza Delight^®, operating primarily in Atlantic Canada, in the family/mid-scale segment, Mikes^® and Scores^®, operating primarily in Québec in the family and casual dining segments and the take-out and delivery segments, and Bâton Rouge^®, operating in Québec, Ontario and Nova Scotia in the casual dining segment. The Company also licenses to third parties the right to manufacture and sell prepared food products under the Pizza Delight^®, Mikes^®, Scores^® and Bâton Rouge^® brands and manufactures and sells vegetarian branded food products in grocery stores and retail outlets under the Commensal^® brand.

Non-GAAP Measures and Financial Metrics The information contained in this press release includes some figures that are not performance measures consistent with International Financial Reporting Standards ("IFRS"). Because they do not have a standardized meaning prescribed by IFRS, they may not be comparable with similar measures presented by other issuers. 

"Operating EBITDA" is defined as earnings or loss before interest income, interest expense, depreciation and amortization, income tax expense, gain or loss on redemption of debentures, impairment or impairment reversal of long-lived assets, impairment or impairment reversal of Imvescor rights, gain or losses on sale of property and equipment, change in onerous contract provisions, costs of special committee, goodwill, bargain purchase gains, reorganization costs, gain or loss on derivative financial liability and earnings or loss from discontinued operations. The definition of Operating EBITDA can change from time to time to account for unusual items or items not considered to be consistent with the Company's normal recurring operations.

"Total System Sales" is the aggregate sales achieved by all "Pizza Delight", "Mikes", "Scores" and "Bâton Rouge" restaurants, whether they are company-owned restaurants or franchises.  This performance measure indicates the Company's overall growth and reflects the direct impact of the restaurant openings and closures. 

"Same Restaurant Sales growth" or "SRS growth" is a metric used in the restaurant industry to compare sales earned in established locations over a certain period of time, such as a fiscal quarter, for the current period against sales in the same period in the previous year. SRS growth helps explain what portion of sales growth can be attributed to growth in established locations. The Company defines SRS growth as sales generated by stores that have been open for at least one fiscal year compared to the sales from the same group of restaurants in the comparable period.  The Company believes this is a meaningful measure of operating performance.

"Free cash flow" is defined as cash from operating activities less cash used in the purchases of property, plant and equipment and intangible assets.

Cautionary Note Regarding Forward-Looking Statements

Certain information in this press release regarding the Company, including, but not limited to, the Company's business objectives, estimates, outlook, strategies and priorities, the generation of cash flows, the growth of the same store sales, and all other statements other than statements of historical facts, are "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Forward-looking statements can generally be identified by words such as "may", "should", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "outlook" and similar expressions. All such forward-looking statements are made pursuant to the "safe harbour" provisions of applicable securities laws. These statements are based on information currently available to the Company's management and on the current assumptions, intentions, plans, expectations and estimates of the management regarding the Company's future growth, results of operations, performance and opportunities as well as the economic environment in which it operates. Forward-looking statements involve known and unknown risks, uncertainties and other factors outside the Company's control. A number of factors could cause actual results of the Company to differ materially from the results discussed in the forward-looking statements, including, but not limited to: market conditions for financing; competitive conditions, whether related to new competitors or current competitors; change in the Company's or its competitors current pricing strategies; changes in demographic trends; changes in consumer preferences and discretionary spending patterns; changes in national and local business and economic conditions; risks associated with the closure of restaurants; risk associated with ownership of restaurants by the Company; costs associated with strategically exiting locations; the ability of the Company to pay dividends; the Company successfully offering new and innovative products and executing its strategies as planned; legislation and governmental regulation; the Company's relationships with its franchisees and litigation; changes in accounting policies, practices and standards; and the results of operations and financial condition of the Company and other factors referenced in the Company's Annual Information Form and the Company's other continuous disclosure filings which are available on SEDAR at www.sedar.com. Although the forward-looking statements contained herein are based upon what the Company believes to be reasonable assumptions on the date of this press release, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. Certain assumptions underlying the forward-looking statements contained herein include assumptions related to the Company's ability to obtain financing on conditions favorable to the Company, future cash flows, market conditions, sales estimates, estimates relating to the Company's ability to settle and exit leases. Readers should not place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this press release and, accordingly, are subject to change after such date. Forward-looking statements are provided herein for the purpose of giving information about the Company's current strategic priorities, expectations and plans, allowing investors and others to get a better understanding of the Company's business outlook and operating environment. Readers are cautioned, however, that such information may not be appropriate for other purposes. The Company assumes no obligation to update such forward-looking statements to reflect new information, future events or otherwise, except as required by applicable securities laws. Except as otherwise indicated, forward-looking statements do not reflect the potential impact of any non-recurring or other special items or of any transactions that may be announced or that may occur after the date of this press release. The financial impact of these transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them. The Company therefore cannot describe the expected impact in a meaningful way or in the same way it presents known risks affecting the business. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

SOURCE Imvescor Restaurant Group Inc.

Tania M. Clarke, Chief Financial Officer, Imvescor Restaurant Group Inc., http://www.imvescor.ca, 514-341-5544; Daniel Granger, ACJ Communication, Tél. [phone]; Pizza Delight®: www.pizzadelight.com; Mikes®: www.mikes.ca; Scores®: www.scores.ca; Bâton Rouge®: www.batonrouge.ca