Vancouver, November 6, 2009 – The Keg Royalties Income Fund (the “Fund”) has reported its financial results for the three and nine months ended September 30, 2009.
Gross sales reported by Keg restaurants in the Royalty Pool increased by $297,000 or 0.3% to $108,332,000 during the quarter and by $9,739,000 or 3.0% to $337,014,000 year to date. The increase in gross sales reflects the addition of net new sales to the Royalty Pool at the beginning of the year and a decrease in same store sales.
KRL’s same store sales (sales of restaurants that operated during the entire period of both the current and prior years) decreased by 4.7% in Canada and by 19.8% in the United States for the 13-week period ended September 27, 2009 and decreased by 4.4% in Canada and by 13.2% in the U.S. for the 39-week period ended September 27, 2009. After translating the sales of the U.S. restaurants into their Canadian dollar equivalent, consolidated same store sales decreased by 5.9% for the 13-week period and by 4.0% for the 39-week period. The average exchange rate moved from 1.04 to 1.08 in the comparable 13-week period, and from 1.02 to 1.17 in the comparable 39-week period, increasing the Canadian dollar equivalent of the U.S. restaurant sales.
“The effects of the current economic situation are certainly having a predictable impact on our sales performance,” said David Aisenstat, The Keg’s President and Chief Executive Officer. “However, overall we are not unhappy with our results and feel that The Keg brand is very well positioned relative to our competitors. We remain very pleased with the solid financial position of The Keg Royalties Income Fund and foresee no problems in maintaining the current monthly distributions to unitholders.”
Royalty income increased by $71,000 or 1.6% to $4,454,000 for the quarter and by $561,000 or 4.2% to $13,766,000 year to date, as a result of the increase in gross sales.
Q3 FINANCIAL RESULTS
View The 2009 Q3 Financial Results (PDF)
Earnings before income taxes decreased by 5.1% to 30.0 cents/Fund unit from 31.6 cents/Fund unit during the quarter, and by 1.6% to 94.9 cents/Fund unit from 96.4 cents/Fund unit year to date. Distributable cash available to pay distributions to Fund unitholders decreased by 4.3% to 30.8 cents/Fund unit from 32.2 cents/Fund unit for the quarter, and by 0.7% to 96.0 cents/Fund unit from 96.7 cents/Fund unit year to date. The Fund has paid distributions of 32.0 cents/Fund unit during the quarter and 95.9 cents/Fund unit year to date.
The Keg Royalties Income 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, KRL pays the Fund a royalty of 4% of gross sales of Keg restaurants included in the royalty pool. Vancouver-based Keg Restaurants Ltd. 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.
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. KRL continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. Keg Restaurants Ltd. has been named one of the “50 Best Employers in Canada” for the past seven years by the Globe and Mail’s Report on Business Magazine.
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,