Market Overview

Imvescor Restaurant Group Reports Results for Third Quarter of Fiscal 2017


Company Reports Ninth Consecutive Quarter of Same Restaurant Sales Growth

MONTREAL, Sept. 6, 2017 /CNW/ - Imvescor Restaurant Group Inc. ("IRG" or the "Company") (TSX: IRG), a leading franchisor of restaurants with 262 locations in Eastern Canada, reported financial results today for the 13 and 39 weeks ended July 30, 2017 ("Q3 2017" and "YTD 2017"). This press release should be read in conjunction with the Company's management discussion and analysis (the "MD&A") and unaudited condensed consolidated interim financial statements for Q3 2017 which are available on the Company's website at and have been posted on SEDAR at

"Same Restaurant Sales increased 4.9%, with all brands reporting positive growth. This represents our ninth consecutive quarter of positive Same Restaurant Sales" said Frank Hennessey, President and Chief Executive Officer of IRG. "The hard work of our franchisee partners, our frontline teammates and our brand teams have all combined to deliver a positive quarter. This growth helped contribute to a 15.6% increase in revenue, a 23.3% improvement in Operating EBITDA and a 23.0% increase in net earnings over Q3 2016."

"Our results were solid across the board during the quarter. I am especially pleased with the performance of Scores, which delivered strong results. The integration of Ben & Florentine has proceeded extremely well and demonstrates the strategic fit of this brand into the IRG family. Going forward we will continue our focus on improving our core business through continual improvement on our four pillars of quality of food, quality of service, value and ambiance while continuing to seek out attractive acquisition candidates."  

Q3 2017 Financial and Operational Highlights

(All comparable figures are to the third fiscal quarter 2016 ("Q3 2016") unless otherwise specified. Note that Q1 2017 had 13 weeks compared to 14 weeks in Q1 2016 and the year-to-date highlights include variances on a normalized basis, removing the impact of the additional week in Q1 2016.)

  • For Q3 2017, all five of the Company's brands achieved Same Restaurant Sales ("SRS") growth which resulted in overall SRS growth of 4.9% over Q3 2016 SRS growth of 1.2%, representing the ninth consecutive quarter of positive overall SRS growth for the Company. On a year-to-date basis, SRS grew 2.9% over SRS growth of 1.8% in year-to-date fiscal 2016, with four out of five brands positively contributing, led by Toujours Mikes and Ben & Florentine.

  • Seven restaurants were renovated under the Restaurant Rejuvenation Plan (the "RRP") in Q3 2017 and 18 in YTD 2017. A total of 51 restaurants have been renovated since the inception of the RRP.

  • The Company opened a new Toujours Mikes, reopened a previously closed location and also opened a new Ben & Florentine restaurant. A total of six new restaurants have opened and one restaurant has reopened in YTD 2017.

  • Q3 2017 System Sales increased 10.6%, primarily from the newly acquired Ben & Florentine brand and SRS growth of 4.9%, partially offset by a 3.8% decrease due to net restaurant closures. On a year to date basis, System Sales increased 5.2% on a normalized basis.

  • Q3 2017 and YTD results from operating activities increased 16.2% and 2.2%, respectively, on a normalized basis.

  • Q3 2017 Operating EBITDA increased 23.3% mostly from the contribution of the Ben & Florentine brand acquired during the second quarter of fiscal 2017 and control on corporate operating expenses, partially offset by a lower retail contribution from a promotion in Q3 2016 that did not repeat in 2017 and increased listing fees for new Toujours Mikes retail products. Operating EBITDA increased 11.1% on a normalized basis for year-to-date fiscal 2017.

  • Q3 2017 net earnings increased 23.0% from Q3 2016 and 13.6% on a year-to-date normalized basis.

  • The Company repurchased and cancelled 43,954 common shares during Q3 2017 under its previously announced normal course issuer bid.

  • In Q3 2017, the Company continued to invest in its network – investing $0.1 million for signage replacement for the Toujours Mikes brand and $0.2 million for the construction and renovation of company-owned restaurants. On a year to date basis, the Company has invested $0.4 million for signage replacement and $2.0 million for the purchase, construction and renovation of company-owned restaurants.

  • During Q3, 2017, in accordance with the purchase and sale agreement, the Company made an escrow payment of $4.5 million in connection with the earn-out related to the acquisition of Ben & Florentine.

  • Free Cash Flow decreased 49.5% from Q3 2016 and 36.8% on a normalized basis over year-to-date fiscal 2016 from the Company's continued investment in signage and corporate restaurants. The Company's Free Cash Flow was also impacted by an increase in the EBITDA, lower cash taxes paid, and by the timing of cash payments and receipts and changes in inventory levels.

  • The closing date of the Commensal divestiture has been postponed upon mutual agreement of the parties, and is now scheduled to close before the end of fiscal 2017, subject to the satisfaction of certain closing conditions.

Capital Allocation Strategy

On April 15, 2015, the Company announced a strategic plan and approach to capital allocation that charts a roadmap for the transformation and growth of the Company until the end of fiscal 2018, including an investment by the Company of up to $5.5 million over that period of time to rejuvenate its restaurant network under the RRP. To date, the Company has renovated 51 restaurants, and expects to renovate over 100 restaurants in total under the RRP. Since April 15, 2015, being the date of the announcement of the strategic plan, the trading price of the common shares of the Company has increased from $1.79 to $3.70. Finally, the Company fully repaid its then outstanding long-term debt in fiscal 2016 and used the availability under its credit facility to fund a portion of the Ben & Florentine acquisition in Q2 2017.

On January 13, 2016, the board of directors of the Company (the "Board") approved an increase of 12.5% in the Company's quarterly cash dividend payable under the Company's dividend policy from $0.02 to $0.0225 per common share. The dividend policy has been designed to allow sufficient flexibility to continue investing in the Company's growth and its franchise network, while providing returns to its shareholders. The Company also renewed its normal course issuer bid, which allows for the repurchase and cancellation of up to 3,024,297 common shares during the period commencing January 20, 2017 and ending no later than January 19, 2018, representing approximately 5% of the 60,485,954 common shares outstanding as at the close of market on January 9, 2017.

In addition to the expansion of its business through organic growth under the four-pillar strategy, the Company is continuing its pursuit of other brands it can add to its portfolio via acquisitions.  The goal of the Company's acquisition strategy is to leverage its current platform and to seek opportunities to expand its base in other markets. The Company plans on using cash on hand and available capital under its credit facility to finance the cash portion of such acquisitions while using its common shares as an attractive acquisition currency when appropriate. In evaluating any potential acquisition candidates, the Company will take into account whether such acquisition is accretive for the Company and whether it provides an opportunity for substantive growth, while allowing the Company to leverage the fixed cost of its shared services platform. There is no certainty that the Company will be able to identify targets that will fit its objectives or that the Company will be able to complete a transaction.

The Company carefully explores, as it has done from time to time, any commercially reasonable strategic opportunity that could maximize the value of IRG.


Q3 2017 Selected Financial Data

(in thousands of dollars, where applicable)



July 30,


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July 30,


July 31,



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Consolidated results:








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Results from operating activities














EBITDA as a % of revenue 







Restaurant rejuvenation plan expense







Operating EBITDA (i)







% of Adjusted Revenue (i)







% of System Sales







Profit from discontinued operations, net of tax







Net earnings and comprehensive income







Net earnings as a % of revenue














- %








Cash flow:

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Dividends paid











Working capital excluding gift cards liability




Total debt





System Sales and SRS are key performance metrics. EBITDA, Operating EBITDA, Adjusted Revenue and Free Cash Flow are non-IFRS measures. Refer to the "Key Performance Metrics and Non-IFRS Measures" section of this press release for the respective definition of such terms.


Dividend Declaration

Pursuant to its previously announced dividend policy, the Board today declared a dividend of $0.0225 per common share. The quarterly cash dividend will be paid on October 4, 2017 to shareholders of record as of the close of business on September 20, 2017.

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 Canada Business Corporations Act 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.

Conference Call Details

Frank Hennessey, President and Chief Executive Officer, and Tania M. Clarke, Chief Financial Officer will host a conference call to discuss Q3 2017 results on Thursday, September 7, 2017 at 8:30 am (ET). To access the conference call by telephone, dial 1-888-231-8191 (Toll-Free), 514-807-9895 (Montreal) or 647-427-7450 (Toronto). 

A live audio webcast of the conference call will be available at A recording of the conference call will be archived for replay by telephone until Thursday, September 14, 2017 at midnight. To access the archived conference call, dial 1-855-859-2056 (Toll-Free), 514-807-9274 (Montreal) or 416-849-0833 (Toronto) and enter the reservation number 66314815.

About Imvescor Restaurant Group Inc. Imvescor Restaurant Group Inc. is a dynamic and innovative organization in the family and casual dining restaurant industry. The Company is a franchise and licensing business that operates restaurants in Eastern Canada under five banners: Bâton Rouge®, operating in Québec, Ontario and Nova Scotia in the casual dining segment, Pizza Delight®, operating primarily in Atlantic Canada, in the family/mid-scale segment, Scores® and Toujours Mikes, operating primarily in Québec in the family and casual dining segments and the take-out and/or delivery segments, and Ben & Florentine®, operating primarily in Québec, with individual stores in Ontario and Manitoba, in the breakfast and lunch industry. The Company also licenses to third parties the right to manufacture and sell prepared food products under the Bâton Rouge®, Pizza Delight®, Scores® and Toujours Mikes brands.

This press release refers to trademarks, such as Pizza Delight®, Toujours Mikes, Scores®, Bâton Rouge® and Ben & Florentine®, which are protected under applicable intellectual property laws and are the property of the Company or of one of its subsidiaries. Solely for convenience, such trademarks and tradenames referred to in this press release may appear without the ® or ™ symbol, but such references are not intended to indicate, in any way, that the owner of any such trademarks will not assert, to the fullest extent under applicable law, its rights to these trademarks and tradenames.

Key Performance Metrics and Non-IFRS Measures: The information contained in this press release includes some measures that are not performance measures consistent with International Financial Reporting Standards ("IFRS"). The key performance metrics and non-IFRS measures include measures that are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. Because the measures included in the key performance metrics and the non-IFRS measures do not have standardized meanings prescribed by IFRS, they may not be comparable with similar measures presented by other issuers. 

Key Performance Metrics

"System Sales" is the aggregate sales achieved by all "Pizza Delight", "Toujours Mikes", "Scores", "Bâton Rouge" and "Ben & Florentine" restaurants, whether they are company-owned restaurants or franchised restaurants.  System Sales include sales from existing locations as well as new restaurants. This performance measure indicates the Company's overall growth and reflects the direct impact of restaurant openings and closures. The Company's franchisee and supplier royalty revenues vary directly with the level of System Sales in its franchisee restaurant network.

"Net New Restaurants" represents the aggregate number of restaurant openings net of restaurant closures.

"Normalized System Sales" is defined as System Sales less the sales from the additional week of operations in the first quarter of fiscal 2016.

"Same Restaurant Sales" or "SRS" 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 a given period against sales in the same period in the previous fiscal year. SRS growth provides the portion of System Sales growth that is from established locations rather than from the opening of Net New Restaurants. The Company defines SRS as sales generated by company-owned and franchised restaurants that have been open for at least one year compared to the sales from the same group of restaurants in the comparable period. 

Non-IFRS Measures

The Company uses non-IFRS measures to complement IFRS measures, to provide investors with supplemental information of its operating performance and to provide further understanding of the Company's results of operations from management's perspective. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Non-IFRS measures should not be considered in isolation nor as a substitute for an analysis of the Company's financial information reported under IFRS. The definition and rationale for the use of each non-IFRS measure used by the Company in this press release is as follows:

"EBITDA" is defined as earnings or loss before interest income, interest expense, depreciation and amortization and income tax expense. The Company believes this measure is used by investors to compare and value companies in the Company's industry. The Company uses EBITDA because the measure enables management to assess the Company's operational performance and is a financial indicator of the Company's ability to service and incur debt. The most comparable IFRS financial measure is results from operating activities. Refer to the "Reconciliations of Non-IFRS Measures" section of the MD&A for more details.

"Operating EBITDA" is defined as EBITDA adjusted for the following items: impairment or impairment reversal of non-current assets, impairment or impairment reversal of IRG rights, gains or losses on sale of property, plant and equipment, change in onerous contract provisions, costs of special committee, shareholder proposal costs, impairment of goodwill, bargain purchase gains, reorganization costs, Restaurant Rejuvenation Plan expenses, acquisition and disposition costs, gains or losses on derivative financial liability and earnings or losses from discontinued operations. The Company excludes these items because they affect the comparability of the Company's financial results from period to period and could potentially distort the analysis of trends in the performance of its business. Excluding these items does not imply they are non-recurring. 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. The Company uses this measure and believes it is useful to investors because it can facilitate period-to-period comparisons as it excludes items which, amongst other things, do not necessarily arise as part of the Company's day-to-day operations or are not reflective of the Company's underlying business operations. The most comparable IFRS financial measure is results from operating activities. Refer to the "Reconciliations of Non-IFRS Measures" section of the MD&A for more details.

"Free Cash Flow" is calculated as cash flows from operating activities less cash used for the purchase of property, plant and equipment and intangible assets. The Company believes this measure is used by investors to value businesses and their underlying assets and to evaluate their financial strength and performance. The Company uses Free Cash Flow because it enables management to assess the Company's ability to generate cash and profits. The most comparable IFRS financial measure is cash flows from operating activities and investing activities. Refer to the "Reconciliations of Non-IFRS Measures" section of the MD&A for more details.

"Adjusted Revenue" is calculated as revenue less restaurant construction sales related to the Company's turnkey operations and sale of manufactured goods related to the manufacture of certain Toujours Mikes licensed retail products on a temporary basis. The Company believes this measure is useful to investors since it facilitates period-to-period comparability by excluding the new revenue stream earned on the transfer of turnkey franchised restaurants and revenues earned in the first three quarters of fiscal 2016 from the temporary manufacturing of certain Toujours Mikes licensed retail products. The most comparable IFRS financial measure is revenue. Refer to the "Reconciliations of Non-IFRS Measures" section of the MD&A for more details.

These non-IFRS measures should not be considered by an investor as alternatives to earnings, indicators of operating performance or cash flows, or as measures of liquidity.  Refer to the "Reconciliations of Non-IFRS Measures section of the MD&A" for more details.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of applicable securities laws, including but not limited to, IRG's business objectives, estimates, outlook, strategies and priorities and all other statements other than statements of historical facts. Forward-looking statements may include estimates, intentions, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Forward-looking statements are often, but not always, identified by the use of words such as "may", "should", "would", "will", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential, "targeting", "intend", "could", "might", "continue", "outlook" or the negative of these terms or other comparable terminology. All such forward-looking statements are made pursuant to the "safe harbour" provisions of applicable securities laws.

Forward-looking statements involve known and unknown risks, uncertainties and other factors outside of the Company's control. A number of factors could cause the actual results of the Company to differ materially from the results discussed in the forward-looking statements, including, but not limited to: risks associated with the acquisition of Ben & Florentine, risks relating to the Company's expectations with respect to the sale of its manufacturing segment, including the timing of the completion of its previously announced transaction, risks associated with quality control, food borne illnesses and health concerns, the Company's ability to retain certain key personnel, the Company's ability to respond to various competitive factors affecting its operations, franchise development and growth of the retail licensing opportunities, changes in consumer preferences, the Company's retail products dependence on the strength of the Company's restaurant brands, the protection of the Company's intellectual property and brand, the success of the RRP, the Company's dependence on its franchisees' ability to generate revenues and pay franchise fees and other amounts to the Company, the Company's reliance on suppliers and availability and quality of raw materials, changes in the Company's relationships with its franchisees, the Company's ability to open new restaurants, the closure of restaurants, the impact of an increase in company-owned restaurants, the Company's ability to renew leases and limit lease exposure, negative publicity and its impact on the Company's reputation, compliance with regulations governing confidentiality and privacy of guest information, potential litigation and other complaints, compliance with government regulations, the Company's dependence on third parties, changes in laws concerning employees, changes in the Company's relationships with its employees, the Company's ability to ensure workplace health and safety, franchise regulations, compliance with regulations governing alcoholic beverages, environmental risks and regulations, public safety issues, the Company's dependence on technology, underreporting of sales by franchisees, inherent risks associated with internal control over financial reporting, the indebtedness of the Company and the restrictive covenants to which it is subject, the impact of sales tax upon System Sales, payment of dividends, the impact of seasonality and other factors on quarterly operating results, uninsured losses or claims that the Company believes are not economically reasonable to insure, changes in commodity prices 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 These factors are not intended to represent an exhaustive list of the factors that could adversely affect the Company and its results but should, however, be considered carefully.

Further, although the forward-looking statements contained herein are based on information currently available to the Company's management and on the current intentions, plans, expectations, estimates, opinions, forecasts, projections and other assumptions made by the Company's management in light of its experience and perception of historical trends, current conditions and expected future developments (such as the Company's future growth, results of operations, performance and opportunities as well as the future of the economic environment in which it operates), as well as other factors that the Company's management believes are appropriate and reasonable in the circumstances and on the date of this press release, there can be no assurance that such intentions, plans, expectations, estimates, opinions, forecasts, projections and other assumptions will prove to be correct or that actual results will not differ materially from those anticipated in such forward-looking statements.  Unless otherwise noted or the context indicates, forward-looking statements in this press release speak only as of the date of this press release.

Forward-looking statements are provided herein for the purpose of assisting the Company's security holders, investors and others in understanding its current strategic priorities, expectations and plans, as well as its financial position and results of operations as at and for the periods ended on the date presented. Readers are cautioned, however, that such information may not be appropriate for other purposes and should not place undue reliance on the forward-looking statements contained in this press release. The Company assumes no obligation to update or revise 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 its business. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement.


Our brands:

Pizza Delight®:


Toujours Mikes:

Bâton Rouge®:

Ben & Florentine®:


SOURCE Imvescor Restaurant Group Inc.

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