Vancouver – February 16, 2010 – The Keg Royalties Income Fund (KEG.UN:TSX,the “Fund”) and Keg Restaurants Ltd. (“KRL”) today announced sales results for the 14 and 53-week periods ended January 3, 2010.
KRL’s year end falls on the Sunday closest to September 30th in any year, and as a result, approximately every fifth year contains 53 trading weeks of operation. KRL’s fiscal year ending October 3, 2010 will contain 53 weeks of sales and related costs, and the period ending January 3, 2010 therefore contains 14 weeks of sales and related costs. System sales generated during the extra week of operation were $8.6 million and Royalty Pool sales generated during the extra week of operation were $8.1 million.
KRL’s total system sales for the 14 weeks ended January 3, 2010 were $126.9 million compared to $116.8 for the 13 weeks ended December 28, 2008, an increase of $10.1 million or 8.6%. For the 53-week period ended January 3, 2010, total system sales were $473.1 million compared to $457.4 million for the 52-week period ended December 28, 2008, an increase of $15.7 million or 3.4%. Royalty Pool sales increased by 11.4% to $117.9 million for the quarter, and by 5.0% to $454.9 million for the year. The increase in gross sales reflects the addition of net new sales to the Royalty Pool on January 1, 2009, and the extra week of sales, net of a decrease in same store sales.
The Keg’s same store sales (sales of restaurants that operated during the entire 14-week period of the current year and the 13-week period of the prior year) increased by 7.3% in Canada and decreased by 2.9% in the United States. Same store sales for the year (sales of restaurants that operated during the entire 53-week period of the current year and the 52-week period of the prior year) decreased by 1.2% in Canada and by 10.6% in the United States. After deducting the additional week of sales for comparative purposes, same store sales increased by 0.1% in Canada and decreased by 9.6% in the United States for the 13-week periods, and decreased by 3.1% in Canada and by 12.3% in the United States for the 52-week periods. After translating the sales of the U.S. restaurants into their Canadian dollar equivalent, consolidated same store sales decreased by 2.5% for the comparable 13-week periods and by 3.4% for the comparable 52-week periods.
“We remain very pleased with our sales performance, particularly considering the difficult economic conditions of the past year,” said David Aisenstat, President and CEO of The Keg. “Close to ninety percent of our sales are in Canada, and that part of our business has experienced very little negative impact. In the United States we have felt more downward pressure, but are satisfied that our position relative to our competitors remains favorable. We believe that our company-wide commitment to delivering the same high levels of quality, service and value that our guests have enjoyed at The Keg for many years remains the cornerstone of our success.”
Vancouver-based Keg Restaurants Ltd. is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. Keg Restaurants Ltd. continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. The Keg has been named one of the “50 Best Employers in Canada” for the past eight years by the Globe and Mail’s Report on Business Magazine. For information on our brand, visit www.kegsteakhouse.com.
This press release may contain or refer to certain "forward looking" statements reflecting the Fund’s business, operations and financial condition. These forward looking statements are based on assumptions that management of the Fund believe to be reasonable. However, investors are cautioned that all forward looking statements involve risks and uncertainties that could cause actual results to differ from those expected or projected, including changes in the foodservice market, competitive developments, potential downturns in economic conditions generally and currency fluctuations. The foregoing list is not exhaustive and 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.
The Fund undertakes no obligation to update or revise any forward looking statements.
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:
Karyn Byrne, Investor Relations Manager
Tel: (416) 646-4960