"Although our third quarter results were affected by COVID-19, I am proud of the work accomplished by our employees, franchisees and partners during these unprecedented times. Their creativity and ability to adapt never cease to impress me and it is in large part thanks to their collective efforts that we have been able to continue serving a portion of our clientele during this major confinement period, notably through La Cage – Chez vous with an enhanced offering of meals for delivery, takeout and ready-to-cook. In addition, retail sales of La Cage and Moishes products continue to grow with the roll-out in several new grocery stores," said Jean Bédard, President and CEO of
"Since mid-June, we have gradually reopened most of our establishments across the province and we are encouraged by the traffic and the positive response from our customers. I am proud of our restaurant teams who have been able to implement the best sanitary protocols while preserving our dining experience. The investments we have made in modernizing our network over the past few years, our cutting-edge technology and our redesigned menus featuring a local offering provide us with an important differentiation factor and enable us to adapt more easily to the new context in which restaurants have to operate. Our extensive presence across the province also positions us well to potentially benefit from the wave of tourism experienced in certain regions this summer," added Mr. Bédard.
Financial Performance for the Quarter Ended
For the third quarter of fiscal 2020,
Financial Performance for the First Nine Months of the Fiscal Year
On a cumulative basis, consolidated adjusted EBITDA(2) stood at
Renegotiated financing agreements
In order to ensure the continuity of its access to credit, the Company obtained from its financial institution an amendment to its financing agreements after the end of the third quarter. The Company was granted an easing of its financial and restrictive covenants, but will be required to respect a minimum EBITDA for each of the next five quarters. The amended agreement also contains various limitations regarding the distribution of dividends, the repurchase of share capital, as well as investments in fixed assets.
Industry Challenges
After successfully repositioning the La Cage – Brasserie Sportive banner, the Company undertook to develop new expansion avenues, continued to enhance and optimize its main banner, and completed the modernization of most of its restaurants. These measures have supported the significant growth in
Recent developments affecting the restaurant industry and the population as a whole had, and will continue to have, an impact on the Company's operations in the short and medium term. Although the duration of the pandemic and its longer-term effect on the economy are still difficult to predict, the Company is currently working to ensure the optimization of its network and operations based on the permitted occupancy rate of its restaurants and to adjust its expenditures to preserve its cash. Based on the duration of this outbreak and the additional measures that may be put in place,
"The pandemic has brought about profound changes in our industry and in consumer habits. The industry must adapt, innovate, develop new niches and invest more in order to reach and serve customers in a safe and enjoyable manner. We must operate with high fixed costs and an increase in operating expenses that are not aligned with our limited accommodation capacity due to the required social distancing measures. The industry must therefore adapt, but also work with lessors and government authorities to obtain concessions and adjustments to aid programs that reflect our new reality," 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.
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Profile
Non-IFRS Measures
The following measures used by the Company are not measures consistent with International Financial Reporting Standards ("IFRS"):
(1) | Total restaurant sales correspond to sales made by all restaurants operating under the Company's various banners whether corporate, joint venture or franchised |
(2) | Consolidated adjusted EBITDA corresponds to "Earnings before financial expenses, amortization, share of net income of joint ventures and income tax", from which other losses (gains) are excluded and to which is added the share of earnings before financial expenses, amortization and income tax of joint ventures |
Reconciliation of Non-IFRS Financial Measures | ||||
(in thousands of $) | ||||
13-Week Periods Ended | 39-Week Periods Ended | |||
2020 | 2019 | 2020 | 2019 | |
Restaurant revenues – La Cage(1) | 6,642 | 21,894 | 53,062 | 60,372 |
Restaurant revenues – Other banners(1) | 590 | 3,453 | 5,959 | 8,538 |
Sales generated by franchises and joint ventures | 1,652 | 13,277 | 26,854 | 39,478 |
Total restaurant sales | 8,884 | 38,624 | 85,875 | 108,388 |
Earnings before financial expenses, amortization, net income of joint ventures and income taxes | (6,631) | 3,055 | 2,111 | 7,926 |
Other losses (gains) | 5,062 | (42) | 4,752 | (171) |
Earnings before financial expenses, amortization and income taxes of joint ventures(2) | (42) | 440 | 564 | 1,256 |
Consolidated adjusted EBITDA | (1,611) | 3,453 | 7,427 | 9,011 |
Impact of IFRS 16 | (1,060) | - | (3,381) | - |
Consolidated adjusted EBITDA, excluding the impact of IFRS 16 (3) | (2,671) | 3,453 | 4,046 | 9,011 |
(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 |
(3) | 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 |
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) | ||||
13-Week Periods Ended | 39-Week Periods Ended | |||
2020 | 2019 | 2020 | 2019 | |
$ | $ | $ | $ | |
Revenues | 16,672 | 31,553 | 89,723 | 89,091 |
Cost of sales | 9,623 | 9,772 | 36,441 | 27,993 |
Selling and administrative expenses, excluding amortization | 8,618 | 18,768 | 46,419 | 53,343 |
Other losses (gains)(1) | 5,062 | (42) | 4,752 | (171) |
Earnings before financial expenses, amortization, net income of joint ventures and income tax | (6,631) | 3,055 | 2,111 | 7,926 |
Amortization | 2,392 | 1,496 | 7,237 | 4,355 |
Financial expenses | 503 | 344 | 1,551 | 829 |
Net loss (income) of joint ventures | 204 | (205) | (206) | (682) |
3,099 | 1,635 | 8,582 | 4,502 | |
(Loss) income before income tax expenses | (9,730) | 1,420 | (6,471) | 3,424 |
Income tax (recovery) expenses | (2,592) | 324 | (1,773) | 756 |
Net and comprehensive (loss) income | (7,138) | 1,096 | (4,698) | 2,668 |
Net and comprehensive (loss) income attributable to: | ||||
The Company's shareholders | (7,082) | 1,097 | (4,638) | 2,736 |
Non-controlling interests | (56) | (1) | (60) | (68) |
Net and comprehensive (loss) income | (7,138) | 1,096 | (4,698) | 2,668 |
Earnings per share (in dollars): | ||||
Basic | (0.83) | 0.13 | (0.54) | 0.32 |
Diluted | (0.83) | 0.13 | (0.54) | 0.32 |
Weighted average number of outstanding Class A shares (in thousands): | ||||
Basic(2) | 8,548 | 8,548 | 8,548 | 8,541 |
Diluted(2) | 8,548 | 8,685 | 8,548 | 8,678 |
(1) | Other losses (gains) include gains on business combinations and gains/losses on the disposal, write-off 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 as disclosed in Note 14 (a) accompanying the interim condensed consolidated financial statements |
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