VANCOUVER, BRITISH COLUMBIA--(May 19, 2011) The Keg Royalties Income Fund (TSX:KEG.UN) (the "Fund") and Keg Restaurants Ltd. ("KRL") today announced sales results for the 13 week period ended April 3, 2011.
Total system sales for KRL for the 13 weeks ended April 3, 2011 were $122.1 million compared to $120.3 million for the 13 weeks ended April 4, 2010, an increase of $1.8 million or 1.5%.
Royalty Pool sales for the Fund increased by 3.1% from $117.0 million for the first quarter of 2010 to $120.6 million for the first quarter of 2011. These increased sales reflect the very successful new Keg restaurants which were added to the Royalty Pool on January 1, 2011, as well as very solid same store sales growth for the quarter.
The Keg's same store sales (sales of restaurants that operated during the entire 13-week period of both the current and prior years) increased by 3.8% in Canada and by 3.2% in the United States. After translating the sales of the U.S. restaurants into their Canadian dollar equivalent, consolidated same store sales for the comparable 13-week periods increased 3.1%. The average exchange rate moved from 1.04 in the first quarter of 2010 to 0.99 in the first quarter of 2011, significantly decreasing the Canadian dollar equivalent of the U.S. restaurant sales.
"We are very pleased with our sales performance during the quarter in both Canada and the U.S.", said David Aisenstat, President and CEO of The Keg. "All indications are that the foodservice industry in both countries will continue to improve and we are confident The Keg will benefit."
The Fund (TSX:KEG.UN) is a limited purpose, open-ended trust established under the laws of the Province of Ontario that, through The Keg Rights Limited Partnership, owns certain trademarks and other related intellectual property used by Keg Restaurants Ltd. ("KRL"). In exchange for use of those trademarks, Keg Restaurants Ltd pays the Fund a royalty of 4% of gross sales of Keg restaurants included in the royalty pool.
Vancouver-based KRL is the leading operator and franchisor of the steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. KRL continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. KRL has been named one of the "50 Best Employers in Canada" for the past nine years by Aon Hewitt. For more information on our brand, visit www.kegsteakhouse.com.
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:
Karyn Byrne, Investor Relations Manager
Tel: (416) 646-4960