SIR Royalty Income Fund reports first quarter results
BURLINGTON, ON, May 13 /CNW/ - SIR Royalty Income Fund (TSX: SRV.UN) ("the Fund") today reported its financial results for the three months ended March 31, 2010. All comparisons are to the first quarter in the prior fiscal year.
First quarter highlights:
- Net earnings for the Fund increased to $1.8 million, or $0.33 per
unit, from $1.7 million, or $0.32 per unit;
- Pooled revenue increased to $47.5 million from $45.5 million. The
4.5% increase was due to same store sales growth (SSSG(1))
- Distributable cash(2) per unit (basic and diluted) increased to $0.33
from $0.32;
- The Fund's payout ratio(2) for the quarter was 104.5% of
distributable cash(2), improved from 108.7%.
"We experienced same store sales growth(1) in each of our concept brands as well as from our signature restaurants, and we increased net earnings and distributable cash(2)," said Peter Fowler, Chief Executive Officer of SIR Corp. "Nevertheless, while we are encouraged by our first quarter results, we remain cautiously optimistic about the remainder of the year as consumer confidence is not yet back to pre-recession levels. Given the continued uncertainty in the economy, we continue to focus on sustaining and growing restaurant sales and profits while managing costs."
Financial Results
3 month 3 month
period period
ended ended
($000s except restaurant and per unit amounts) March 31, March 31,
(unaudited) 2010 2009
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Royalty Pooled Restaurants 45 45
Pooled Revenue generated by SIR 47,540 45,492
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Royalty income to Partnership - 6% of Pooled Revenue 2,852 2,730
Partnership other income 6 9
Partnership expenses (30) (46)
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Partnership earnings 2,828 2,693
SIR Corp.'s interest (Class A, B, and C GP Units) (1,731) (1,615)
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Partnership income allocated to Fund 1,097 1,078
Interest income 750 750
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Total income of the Fund 1,847 1,828
General & administrative expenses (78) (128)
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Net earnings of the Fund 1,769 1,700
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Earnings per Fund unit (basic and fully diluted) 0.33 0.32
Distributable cash per Fund unit 0.33 0.32
The Fund's net earnings for the quarter totaled $1.8 million, or $0.33 per Fund Unit (basic and diluted), compared to $1.7 million, or $0.32 per Fund Unit (basic and diluted), for the first quarter of last year.
Revenue for the Royalty Pooled Restaurants for the quarter increased 4.5% to $47.5 million compared to $45.5 million for the same period in 2009. The increase was the result of growth in SSS(1). There were no new restaurants opened during the comparable periods.
Distributable cash(2) for the quarter totaled $1.8 million, or $0.33 per Fund unit (basic and diluted), and declared distributions to unitholders totaled $1.8 million, representing a payout ratio(2) of 104.5% for the period. For Q1, 2009, distributable cash(2) totaled $1.7 million, or $0.32 per Fund unit (basic and diluted), and declared distributions totaled $1.8 million, representing a payout ratio(2) of 108.7%.
Same Store Sales
For the three-month period ended March 31, 2010, SIR reported to the Fund SSSG(1). of 4.5% for the Royalty Pooled Restaurants. During 2010, the Canadian Restaurant and Foodservices Association is projecting a modest increase in sales.
3 month period
ended
March 31,
SSSG(1) for Royalty Pooled Restaurants 2010
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Jack Astor's 5.5%
Canyon Creek Chop House 0.2%
Alice Fazooli's 5.1%
Signature Restaurants 3.8%
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Overall SSSG(1) 4.5%
The Fund's 2010 first quarter unaudited consolidated Financial Statements and Management's Discussion & Analysis ("MD&A") and the SIR Royalty Limited Partnership's Financial Statements, for the three-month period ended March 31, 2010 will be filed on SEDAR today and will be available via the SEDAR web site at www.sedar.com tomorrow. The Fund's 2010 first quarter consolidated Financial Statements and MD&A are also available via SIR's website at www.sircorp.com.
(1) Same store sales ("SSS") and same store sales growth ("SSSG") exclude
revenue from restaurants which are not included in Royalty Pooled
Restaurants, and exclude revenue from restaurants opened or closed
during the current or prior fiscal year and therefore not open for
the full period in both years. SSSG is the percentage increase in SSS
over the prior comparable period. SSS and SSSG are non-GAAP measures
that do not have standardized meanings prescribed by GAAP. However,
SIR believes that SSS and SSSG are useful measures and provide
investors with an indication of the change in year-over-year sales.
SIR's method of calculating SSS and SSSG may differ from those of
other issuers and, accordingly, SSS and SSSG may not be comparable to
measures used by other issuers.
(2) Distributable cash and payout ratio are non-GAAP financial measures
and do not have a standardized meaning prescribed by GAAP. However,
the Fund believes that distributable cash and the payout ratio are
useful measures as they provide investors with an indication of cash
available for distribution. The Fund's method of calculating
distributable cash and the payout ratio may differ from that of other
issuers and, accordingly, distributable cash and the payout ratio may
not be comparable to measures used by other issuers. Investors are
cautioned that distributable cash and the payout ratio should not be
construed as an alternative to the statement of cash flows as a
measure of liquidity and cash flows of the Fund. The payout ratio is
calculated as cash distributed for the period as a percentage of the
distributable cash for the period. For a detailed explanation of how
the Fund's distributable cash is calculated, please refer to the
Fund's MD&A for the three-month period ended March 31, 2010, which
can be accessed via the SEDAR web site (www.sedar.com).
About SIR Corp.
SIR is a privately held Canadian corporation that owns and operates a portfolio of 45 restaurants in Canada. SIR's concept brands include: Jack Astor's Bar and Grill(R), with 29 locations; Alice Fazooli's(R), with five locations; and Canyon Creek Chop House(R), with eight locations. SIR also operates one-of-a-kind "signature" brands in downtown Toronto, which comprise the upscale reds(R), Far Niente(R)/FOUR(TM)/Petit Four(TM), and the Loose Moose Tap & Grill(R). All trademarks related to the concept and signature brands noted above are used by SIR under a license agreement with SIR Royalty Limited Partnership in consideration for a Royalty, payable by SIR to the Partnership, equal to six percent of the revenue of the 45 Royalty Pooled Restaurants. For more information on SIR Corp. or the SIR Royalty Income Fund, please visit www.sircorp.com.
About SIR Royalty Income Fund
The Fund is a trust governed by the laws of the province of Ontario that receives distribution income from its investment in the SIR Royalty Limited Partnership and interest income from the SIR Loan. The Fund intends to pay distributions to unitholders on a monthly basis.
Caution concerning forward-looking statements
Statements in this release, including the information set forth as to the future financial or operating performance of the Fund or SIR, that are not current or historical factual statements may constitute "forward-looking" information within the meaning of securities laws. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund, the Trust, the Partnership, SIR, the SIR Restaurants, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this document, such statements may include, among other language, such words as "may", "will", "expect", "believe", "plan", "anticipate", "intend", "estimate" and other similar terminology. These statements reflect Management's current expectations, estimates and projections regarding future events and operating performance and speak only as of the date of this document. Readers should not place undue importance on forward-looking statements and should not rely upon this information as of any other date. These forward-looking statements involve a number of risks and uncertainties. The following are some of the factors that could cause actual results to differ materially from those expressed in or underlying such forward-looking statements: competition; changes in demographic trends; changing consumer preferences and discretionary spending patterns; changes in consumer confidence; changes in national and local business and economic conditions; changes in availability of credit; legal proceedings and challenges to intellectual property rights; dependence of the Fund on the financial condition of SIR; legislation and governmental regulation; accounting policies and practices; and the results of operations and financial condition of SIR. The foregoing list of factors is not exhaustive. Many of these issues can affect the Fund's or SIR's actual results and could cause their actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Fund or SIR. Readers are cautioned that forward-looking statements are not guarantees of future performance, and should not place undue reliance on them. The Fund and SIR expressly disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein to reflect any change in expectations, estimates and projections with regard thereto or any changes in events, conditions or circumstances on which any statement is based, except as expressly required by law.
In formulating the forward-looking statements contained herein, Management has assumed that business conditions affecting SIR's restaurants and the Fund will continue substantially in the ordinary course, including without limitation with respect to general industry conditions, general levels of economic activity (including in downtown Toronto), regulations (including those regarding employees, food safety, tobacco and alcohol), weather, taxes, foreign exchange rates and interest rates, that there will be no pandemics or other material outbreaks of disease or safety issues affecting humans or animals or food products, and that there will be no unplanned material changes in its facilities, equipment, customer and employee relations, or credit arrangements. These assumptions, although considered reasonable by Management at the time of preparation, may prove to be incorrect. For more information concerning the Fund's risks and uncertainties, please refer to the March 31, 2010 Annual Information Form which is available under the Fund's profile at www.sedar.com.
%SEDAR: 00020914E
For further information: Jeff Good, Chief Financial Officer, SIR Corp., 5360 South Service Road, Suite 200, Burlington, Ontario, Canada, L7L 5L1, Tel: (905) 681-2997; Trevor Heisler, Investor Relations, Tel: (416) 815-0700 ext. 270, Email: [email protected]
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