The Keg Royalties Income Fund Announces 2013 Results

Vancouver – February 25, 2014 – The Keg Royalties Income Fund (KEG.UN:TSX, the “Fund”) is pleased to announce its financial results for the three and twelve months ended December 31, 2013.

The gross sales reported by the 102 Keg restaurants in the Royalty Pool were $120,093,000 for the quarter, a decrease of $2,299,000 or 1.9% from the comparable quarter of the prior year. For the year, gross sales were $474,864,000, a decrease of $9,704,000 or 2.0% over the prior year. These gross sales reflect the closure of four corporate restaurants in the current year, and a same store sales increase of 0.04% for the quarter and a same store sales decrease of 0.3% for the year.
 
DOWNLOAD THE 2013 Financial Highlights - Year End Results (PDF)
 
The Keg’s same store sales (sales of restaurants that operated during the entire period of both the current and prior years) decreased by 0.6% in Canada and increased by 0.3% in the United States (“U.S.”) for the 13-week period ended December 29, 2013. For the 52-week period ended December 29, 2013, same store sales decreased by 0.8% in Canada and increased by 1.5% in the U.S. After translating the sales of the U.S. restaurants into their Canadian dollar equivalent, consolidated same store sales increased by 0.04% for the 13-week period and decreased by 0.3% for the 52-week period. The average exchange rate moved from 0.99 to 1.05 in the comparable 13-week period, significantly increasing the Canadian dollar equivalent of the U.S. restaurant sales, and from 1.00 to 1.03 in the comparable 52-week period, somewhat increasing the Canadian dollar equivalent of the U.S. restaurant sales.
 
Royalty income increased by $65,000 or 1.3% from $4,896,000 in the three months ended December 31, 2012 to $4,961,000 in the three months ended December 31, 2013. For the year ended December 31, 2013, royalty income increased by $95,000 or 0.5% from $19,401,000 to $19,496,000. Distributable cash before SIFT tax increased by $17,000 from $3,441,000 (30.3 cents/Fund unit) to $3,458,000 (30.5 cents/Fund unit) for the quarter, but decreased by $9,000 from $14,650,000 ($1.290/Fund unit) to $14,641,000 ($1.290/Fund unit) for the year. Distributable cash available to pay distributions to public unitholders decreased by $24,000 from $2,558,000 (22.5 cents/Fund unit) to $2,534,000 (22.3 cents/Fund unit) for the quarter and by $144,000 from $11,168,000 (98.4 cents/Fund unit) to $11,024,000 (97.1 cents/Fund unit) for the year. The decrease in distributable cash for both the quarter and the year was primarily due to the increase in the SIFT tax rate on April 1, 2013.
 
The Fund remains financially well-positioned with cash on hand of $798,000 and a positive working capital balance of $1,198,000 as at December 31, 2013. The Fund’s payout ratio was 107.5% for the fourth quarter of 2013 and was 98.9% for the year.
 
"We are pleased that the Fund has had another strong year in 2013," said David Aisenstat, President and CEO of The Keg. "Our results are a clear indication that the Keg guests continue to enjoy the experience we provide in our restaurants."
 
This press release may contain certain "forward looking" statements reflecting The Keg Royalties Income Fund's current expectations in the casual dining segment of the restaurant food industry. Investors are cautioned that all forward looking statements involve risks and uncertainties, including those relating to the Keg’s ability to continue to realize historical same store sales growth, changes in market and existing competition, new competitive developments, and potential downturns in economic conditions generally. Additional information on these and other potential factors that could affect the Fund's financial results are detailed in documents filed from time to time with the provincial securities commissions in Canada.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of the prospectus, nor shall there be any sale of the Fund units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state, province or jurisdiction. The Keg Royalties Income Fund units have not been, and will not be registered under the U.S. Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an application for exemption from the registration requirement under U.S. securities laws.
The Trustees of the Fund have approved the contents of this press release.
 
For further information:
Ryan Bullock, Director of Marketing
Tel: (416) 646-4960
ryan.bullock@kegrestaurants.com
www.kegincomefund.com 
 
DOWNLOAD THE 2013 Financial Highlights - Year End Results (PDF)