Financial Highlights of the Second Quarter of Fiscal 2020
- 17.3% increase in consolidated revenues to
$34.7 million ; - 34.3% improvement in net income, amounting to
$0.7 million or$0.09 per share (basic and diluted); - 67.1% increase in consolidated adjusted EBITDA(3), to
$4.1 million , and 21.5% when excluding the effect of the adoption of IFRS 16, to$3.0 million ; - 36.1% increase in operating cash flows, amounting to
$4.9 million .
"Following on the momentum of the last three years, our second quarter financial results have performed very well. We recorded an increase in total restaurant sales, which supported profitability growth. In addition, grocery store sales of our La Cage and Moishes products now represent almost 15% of our consolidated revenues and this segment continues to grow," said Jean Bédard, President and CEO of
"Although our sales are significantly lower since the start of the pandemic, the recent diversification measures that we implemented are allowing us to serve a portion of our customers. As of today, one third of our restaurants are still offering delivery and takeout orders. With a strong balance sheet at the end of the second quarter and the recently deployed cash preservation measures, we are therefore in a position to maintain a certain financial health for the duration of the pandemic," mentioned Mr. Bédard.
Necessary Measures to Deal with the Effects of the COVID-19 Pandemic
"Over the last few years, we expanded our distribution networks and the arrival of the crisis will certainly accelerate the transformation of our business model. We are already working to adapt our restaurant offering to meet our consumers' changing reality and to develop new channels that will allow us to reach our customers beyond our dining rooms," added Mr. Bédard.
"In addition, we must continue to show solidarity and support our employees and the community. This is why we deployed several mitigation measures to reduce the impact of this unprecedented crisis. We are already working on preparing our operations so that we can be in a good position to restart all of our restaurant activities when the time comes," concluded Mr. Bédard.
Since the start of the COVID-19 pandemic, the Company put in place various cash preservation measures, including:
- Obtained capital payment holidays on most of its debt and extended terms until 2023;
- Drew down
$5 million in cash from its available credit facility; - Renegotiated payment terms with the majority of suppliers;
- Analyzed all available government programs and took the first steps to access them;
- Initiated discussions with lessors regarding rent payments;
- Temporarily suspended renovation and technological development activities;
- Important reduction of the total payroll;
- Temporarily suspended the remuneration of the President and of the Members of the Board of Directors.
Financial Performance for the 13-Week Period Ended
During the second quarter of fiscal 2020, total restaurant sales(1) reached
Consolidated revenues during the second quarter of fiscal 2020 increased by
Financial Performance for the 26-Week Period Ended
During the first semester of fiscal 2020, total restaurant sales(1) grew by
Consolidated revenues increased by
For the cumulative period, net earnings stood at
Cash and Financial Strength
During the first semester, excluding the impact of the adoption of IFRS 16(5), operating activities provided operating cash flows of
After the end of the second quarter, the Company drew an additional
Suspension of Dividends for Fiscal 2020
The Board of Directors' practice in this matter is to assess, on a timely basis, the relevance of paying dividends in light of market conditions, the Company's financial position and working capital requirements, as well as the achievement of performance indicators in line with management's objectives.
Considering the recent developments affecting the restaurant industry and the Company's desire to preserve its cash, no dividend will be declared before the end of the current fiscal year.
Outlook and Objectives for Fiscal 2020
After successfully completing the repositioning of the La Cage – Brasserie sportive banner, the Company developed new expansion avenues, optimized its main banner to extract additional value and completed the modernization of most of its restaurants. These measures sustained significant revenue and profitability growth over the recent years.
The recent events affecting the restaurant industry and the entire population will have an impact on the Company's activities, projects, revenues, operating results, cash and debt levels. So far, this resulted notably in extreme volatility in the financial markets and in commodity prices, as well as a significant reduction in general economic activity, which in many cases led to prolonged business closures and severe supply chain disruptions. In fact, the pandemic is already affecting
"We are currently working with the entire industry and government authorities to ensure the safe and sustainable recovery of the restaurant sector. Together, we will have to overcome several challenges, including the solidity of our supply chain, the need to have a clear reopening schedule, the deployment of new sanitary measures that do not affect the customer's experience and ensure that our businesses, entrepreneurs and employees that are affected are adequately supported," concluded Mr. Bédard.
Disclaimer
This press release contains forward-looking statements relating to the Company. Statements based on management's current expectations contain known and unknown inherent risks and uncertainties, including risks associated with public health issues such as those resulting from the COVID-19 pandemic. Actual results may vary from expectations. The reader is cautioned not to place undue reliance on forward-looking information. The Company does not undertake any obligation to update or revise any forward-looking statements as a result of new information, future events and other changes, except if required by applicable laws.
Neither
Profile
Non-IFRS Measures
The following measures used by the Company are not measures consistent with International Financial Reporting Standards ("IFRS"):
- Total restaurant sales correspond to sales made by all restaurants operating under the Company's various banners whether corporate, joint venture or franchised.
- Average same-restaurant sales isolate the effect of restaurant openings and closures in order to assess the real evolution of restaurant sales.
- Consolidated adjusted EBITDA corresponds to "Earnings before financial expenses, amortization, share of net income of joint ventures and income tax", from which other (gains) losses are excluded and to which is added the share of earnings before financial expenses, amortization and income tax of joint ventures.
- Earnings per share and the weighted average number of shares reflect, on a retroactive basis, the two-for-one stock split effected on
February 8, 2019 . - For comparative purposes with the financial information for fiscal year 2019, the figures presented excluding the impact of IFRS 16 have been calculated as if the Company was still applying IAS 17 for fiscal 2020 and that it had not adopted IFRS 16.
Reconciliation of Non-IFRS Financial Measures | ||||
(in thousands of $) | ||||
(unaudited) | ||||
13-Week Periods Ended | 26-Week Periods Ended | |||
2020 | 2019 | 2020 | 2019 | |
Restaurant revenues – La Cage(1) | 22,691 | 19,667 | 46,420 | 38,478 |
Restaurant revenues – Other banners(1) | 2,518 | 3,112 | 5,369 | 5,085 |
Sales generated by franchises and joint ventures | 13,287 | 12,742 | 25,202 | 26,201 |
Total restaurant sales | 38,496 | 35,521 | 76,991 | 69,764 |
Income before financial expenses, amortization, net income of joint ventures and income taxes | 3,531 | 2,178 | 8,742 | 4,871 |
Other losses (gains) | 173 | (128) | (310) | (129) |
Earnings before financial expenses, amortization and income taxes of joint ventures(2) | 392 | 401 | 606 | 816 |
Consolidated adjusted EBITDA | 4,096 | 2,451 | 9,038 | 5,558 |
Impact of IFRS 16 | (1,118) | - | (2,321) | - |
Consolidated adjusted EBITDA excluding the impact of IFRS 16 | 2,978 | 2,451 | 6,717 | 5,558 |
(1) | Restaurant revenue figures are disclosed in Note 5 "Revenues" accompanying the interim condensed consolidated financial statements. |
(2) | For further details, see Note 11 "Investments in joint ventures" accompanying the interim condensed consolidated financial statements. |
For further information regarding the results and financial position of
Interim Condensed Consolidated Statements of Comprehensive Income | ||||
(in thousands of Canadian dollars, except for earnings per share and number of outstanding shares) | ||||
(unaudited) | ||||
13-Week Periods Ended | 26-Week Periods Ended | |||
2020 | 2019 | 2020 | 2019 | |
$ | $ | $ | $ | |
Revenues | 34,678 | 29,551 | 73,051 | 57,538 |
Cost of sales | 12,533 | 9,574 | 26,818 | 18,221 |
Selling and administrative expenses, excluding amortization | 18,441 | 17,927 | 37,801 | 34,575 |
Other losses (gains)(1) | 173 | (128) | (310) | (129) |
Earnings before financial expenses, amortization, net income of joint ventures and income tax | 3,531 | 2,178 | 8,742 | 4,871 |
Amortization | 2,432 | 1,469 | 4,845 | 2,859 |
Financial expenses | 505 | 265 | 1,048 | 485 |
Net income of joint ventures | (358) | (244) | (410) | (477) |
2,579 | 1,490 | 5,483 | 2,867 | |
Income before income tax expenses | 952 | 688 | 3,259 | 2,004 |
Income tax expenses | 220 | 143 | 819 | 432 |
Net income and comprehensive income | 732 | 545 | 2,440 | 1,572 |
Net income and comprehensive income attributable to: | ||||
The Company's shareholders | 741 | 562 | 2,444 | 1,639 |
Non-controlling interests | (9) | (17) | (4) | (67) |
Net income and comprehensive income | 732 | 545 | 2,440 | 1,572 |
Earnings per share (in dollars): | ||||
Basic | 0.09 | 0.07 | 0.29 | 0.19 |
Diluted | 0.09 | 0.07 | 0.28 | 0.19 |
Weighted average number of outstanding Class A shares (in thousands): | ||||
Basic(2) | 8,548 | 8,545 | 8,548 | 8,538 |
Diluted(2) | 8,763 | 8,575 | 8,763 | 8,568 |
(1) | Other losses (gains) include gains on business combinations and gains/losses on the disposal and impairment of property, plant and equipment. For further details, see Note 7 accompanying the interim condensed consolidated financial statements. |
(2) | The weighted average number of Class A shares (basic and dilutive) reflects the retrospective application of the two-for-one stock split effected on |
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