In c4969, originally transmitted on August 13, 2009, an error occurred in the third column of the "Same Store Sales" table, as well as in the description of the same in the paragraph that follows. The figure (0.8%) for Jack Astor's six-month year-to-date same store sales should have read (3.4%) and the figure (5.1%) for the overall six-month year-to-date same store sales should have read (6.7%). Corrected copy follows: SIR Royalty Income Fund reports fiscal 2009 second quarter results
BURLINGTON, ON, Aug. 13 /CNW/ - SIR Royalty Income Fund (TSX: SRV.UN) ("the Fund") today reported its fiscal 2009 second quarter ("Q2") results for the three-month and six-month periods ended June 30, 2009.
Second Quarter 2009 Highlights
- Net earnings totaled $1.9 million or $0.35 per Fund unit (basic and
diluted) compared to $2.0 million or $0.37 per fund unit (basic and
diluted) for the same period in 2008;
- The Fund generated distributable cash(2) of $1.9 million and declared
distributions totaling $1.8 million, representing a payout ratio(2)
of 97.5%. This compares to Q2 2008 distributable cash(2) of $2.0
million and declared distributions of $1.8 million, representing a
payout ratio(2) of 90.6%;
- Same store sales(1) ("SSS") for the Royalty Pooled Restaurants
declined 7.6% compared to Q2 2008
"Despite the continued recessionary climate, we have maintained our monthly distributions to unitholders of $0.115 per unit and still achieved a payout ratio(2) below 100% in the second quarter. Since our initial public offering in October 2004, the Fund has consistently declared stable or increasing monthly distributions to our unitholders," said Peter Fowler, Chief Executive Officer of SIR Corp. ("SIR") "Going forward, as we do not expect to see substantive economic recovery in the near term, we will combat these external pressures on our sales by providing our guests with consistently excellent food and service supported by effective advertising campaigns," continued Mr. Fowler. "In addition, Jack Astor's sales have been supported by the 'Get Fresh' campaign launched in Q2 2009. Subsequent to Q2 2009, SIR launched a four-week media campaign for Canyon Creek that includes print, television, on-line and radio advertisements. We will continue to focus on our core strategy of providing our guests with excellence and innovation in their dining experience, and providing our investors with stable distributions. "
Financial Results
Revenue for Royalty Pooled Restaurants for the three-month period ended June 30, 2009, increased by 9.3% to $49.6 million compared to $45.4 million for the same period in 2008. For the six-month period ended June 30, 2009, Pooled Revenue increased 8.8% to $95.1 million compared to $87.4 million for the same period in 2008. The increase in Pooled Revenue in 2009 resulted primarily from the addition of six new restaurants to Royalty Pooled Restaurants effective January 1, 2009.
Distributable cash(2) for Q2 2009 totaled $1.9 million or $0.35 per Fund Unit (basic and diluted), and declared distributions to unitholders totaled $1.8 million, representing a payout ratio(2) of 97.5% for the period. For Q2 2008, distributable cash(2) totaled $2.0 million or $0.37 per Fund Unit (basic and diluted) and declared distributions totaled $1.8 million, representing a payout ratio(2) of 90.6%. For the six-month periods ended June 30, 2009 and 2008 distributable cash(2) totaled $3.6 million and $3.8 million, respectively. With distributions declared of $3.7 million and $3.6 million in 2009 and 2008 respectively, the payout ratio was 102.8% and 93.9% in 2009 and 2008 respectively.
The Fund's net earnings for Q2 2009 totaled $1.9 million, or $0.35 per Fund Unit (basic and diluted), compared to $2.0 million or $0.37 per Fund Unit (basic and diluted) for the same period in 2008. For the six-month periods ended June 30, 2009 and 2008 net earnings totaled $3.6 million and $3.8 million, respectively.
3 month 3 month 6 month 6 month
Financial Highlights period period period period
($000s except restaurant and ended ended ended ended
per unit amounts) June 30, June 30, June 30, June 30,
(unaudited) 2009 2008 2009 2008
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Royalty Pooled Restaurants 45 39 45 39
Pooled Revenue generated by SIR 49,627 45,424 95,119 87,448
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Royalty income to Partnership -
6% of Pooled Revenue 2,977 2,725 5,707 5,247
Partnership other income 6 15 15 32
Partnership expenses (27) (24) (73) (68)
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Partnership earnings 2,956 2,716 5,649 5,211
SIR Corp.'s interest (Class A,
B, and C GP Units) (1,715) (1,360) (3,330) (2,668)
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Partnership income allocated
to Fund 1,241 1,356 2,319 2,543
Interest income 750 750 1,500 1,500
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Total income of the Fund 1,991 2,106 3,819 4,043
General & administrative expenses (96) (124) (224) (248)
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Net earnings of the Fund 1,895 1,982 3,595 3,795
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Earnings per Fund unit (basic
and fully diluted) 0.35 0.37 0.67 0.71
Distributable cash(2) per Fund
unit 0.35 0.37 0.67 0.71
Management believes that weaknesses in the general economy in the first
half of 2009 have negatively impacted Pooled Revenue and the resulting
Royalty, the Fund's net earnings, distributable cash(2) and payout ratios(2)
for the three and six month periods ended June 30, 2009 compared to the same
period in 2008.
Same Store Sales(1)
3 month 3 month 6 month 6 month
period period period period
ended ended ended ended
SSSG(1) for Royalty June 30, June 30, June 30, June 30,
Pooled Restaurants 2009 2008 2009 2008
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Jack Astor's (4.0%) 6.6% (3.4%) 4.3%
Canyon Creek Chop House (14.2%) 6.2% (12.2%) 3.2%
Alice Fazooli's (9.8%) 8.1% (8.3%) 4.7%
Signature Restaurants (19.8%) 7.6% (16.7%) 5.8%
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Overall SSSG(1) (7.6%) 6.8% (6.7%) 4.3%
For the three and six-month periods ended June 30, 2009, SIR reported to the Fund a decline in SSS(1) of 7.6% and 6.7% respectively compared to same store sales growth ("SSSG")(1) of 6.8% and 4.3% respectively for the same periods in 2008. Broken out for the quarter, Jack Astor's, which accounts for approximately 68% of Pooled Revenue, reported SSS(1) declines of 4.0% and 3.4% for the three- and six-month periods ended June 30, 2009 respectively compared to SSSG(1) of 6.6% and 4.3% respectively for the same periods in 2008. Alice Fazooli's had SSS(1) declines of 9.8% and 8.3% for the three- and six-month periods ended June 30, 2009 respectively compared to SSSG(1) of 8.1% and 4.7% respectively for the same periods in 2008. Canyon Creek reported SSS(1) declines of 14.2% and 12.2% for the three- and six-month periods ended June 30, 2009 respectively compared to SSSG(1) of 6.2% and 3.2% respectively for the same periods in 2008. For the downtown Toronto Signature Restaurants which includes reds(R), Loose Moose Tap & Grill(R), Far Niente(R)/FOUR(TM)/Petit Four(TM), SSS(1) declined 19.8% and 16.7% for the three- and six-month periods ended June 30, 2009 respectively compared to SSSG(1) of 7.6% and 5.8% respectively for the same period in 2008. Management believes that the Jack Astor's restaurants with its somewhat lower average cheque has been less affected by the weaker economy than the higher average cheque restaurants such as Alice Fazooli's, Canyon Creek and Signature Restaurants. In addition, sales have been supported by the Jack Astor's "Get Fresh" campaign launched in Q2 2009. The campaign includes direct mail, radio and television banner advertisements supporting Jack Astor's key markets. Subsequent to Q2 2009, SIR launched a four-week media campaign for Canyon Creek that includes print, television, on-line, and radio advertisements.
Corporate Development and Liquidity
SIR has secured sites for three additional new restaurants. Two sites are located at the corners of Yonge and Gerrard Streets in Toronto, Ontario with estimated openings in 2011, and the third site is located in Boisbriand, Quebec where SIR plans to construct a Jack Astor's restaurant with an estimated opening in fiscal 2010.
Management believes that there are sufficient cash resources retained in SIR to finance the construction of these restaurants. SIR also has in place a credit agreement with a Canadian Schedule one bank (the "Credit Agreement") totaling $16.0 million. The Credit Agreement provides for a $2.0 million revolving facility, a $13.0 million construction facility, and a $1.0 million treasury management facility to hedge the construction facility. As at May 10, 2009, SIR had drawn an aggregate of $12.7 million under these facilities, and SIR is in compliance with the covenants of the Credit Agreement.
During Q2 2009, the lender approved the extension of the credit facilities for 364 days maturing on July 30, 2010, at which time, the construction line, if not extended, would be converted into a five-year term loan due in 60 equal monthly installments. The interest rates on the financing will be banker's acceptance plus 3.75% and prime rate plus 2.25%. All other terms and conditions remain unchanged.
The Fund's 2009 second quarter consolidated Financial Statements and Management's Discussion & Analysis ("MD&A"), and the SIR Royalty Limited Partnership's Financial Statements, for the three-month and six-month periods ended June 30, 2009 will be filed on SEDAR today and will be available via the SEDAR web site at www.sedar.com tomorrow. The Fund's 2009 second quarter consolidated Financial Statements and MD&A are also available via SIR's website at www.sircorp.com.
2009 Second Quarter Conference Call & Web Cast
Management of SIR Royalty Income Fund will host a conference call to discuss the Fund's 2009 second quarter financial results on Friday, August 14, 2009 at 10:00 a.m. (EST). The call will be audio-cast live and archived for 90 days at www.newswire.ca or www.sircorp.com. A replay of the conference call will be available until Saturday, August 22, 2009 at midnight by calling 1-877-289-8525 or 416-640-1917, reference number 21311203(number sign).
(1) Same store sales and same store sales growth exclude revenue from
restaurants which are not included in the Royalty Pooled Restaurants,
and exclude revenue from restaurants opened or closed during the
current or prior fiscal year and therefore not open for the full
period in both years. SSSG is the percentage increase in SSS over the
prior comparable period. SSS and SSSG are non-GAAP measures that do
not have standardized meanings prescribed by GAAP. However, SIR
believes that SSS and SSSG are useful measures and provide investors
with an indication of the change in year-over-year sales. SIR's
method of calculating SSS and SSSG may differ from those of other
issuers and, accordingly, SSS and SSSG may not be comparable to
measures used by other issuers.
(2) Distributable cash and payout ratio are non-GAAP financial measures
and do not have a standardized meaning prescribed by GAAP. However,
the Fund believes that distributable cash and the payout ratio are
useful measures as they provide investors with an indication of cash
available for distribution. The Fund's method of calculating
distributable cash and the payout ratio may differ from that of other
issuers and, accordingly, distributable cash and the payout ratio may
not be comparable to measures used by other issuers. Investors are
cautioned that distributable cash and the payout ratio should not be
construed as an alternative to the statement of cash flows as a
measure of liquidity and cash flows of the Fund. The payout ratio is
calculated as cash distributed for the period as a percentage of the
distributable cash for the period. For a detailed explanation of how
the Fund's distributable cash is calculated, please refer to the
Fund's MD&A for the three-month and six-month periods ended June 30,
2009, which can be accessed via the SEDAR web site (www.sedar.com).
About SIR Corp.
SIR is a privately held Canadian corporation that owns and operates a portfolio of 45 restaurants in Canada. SIR's concept brands include: Jack Astor's Bar and Grill(R), with 29 locations; Alice Fazooli's(R), with five locations; and Canyon Creek Chop House(R), with eight locations. SIR also operates one-of-a-kind "signature" brands in downtown Toronto, which comprise the upscale reds(R), Far Niente(R)/FOUR(TM)/Petit Four(TM), and the Loose Moose Tap & Grill(R). All trademarks related to the concept and signature brands noted above are used by SIR under a license agreement with SIR Royalty Limited Partnership in consideration for a Royalty, payable by SIR to the Partnership, equal to six percent of the revenue of the 45 Royalty Pooled Restaurants. For more information on SIR Corp. or the SIR Royalty Income Fund, please visit www.sircorp.com.
About SIR Royalty Income Fund
The Fund is a trust governed by the laws of the province of Ontario that receives distribution income from its investment in the SIR Royalty Limited Partnership and interest income from the SIR Loan. The Fund intends to pay distributions to unitholders on a monthly basis.
Caution concerning forward-looking statements ---------------------------------------------
Statements in this release, including the information set forth as to the future financial or operating performance of the Fund or SIR, that are not current or historical factual statements may constitute "forward-looking" information within the meaning of securities laws. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund, the Trust, the Partnership, SIR, the SIR Restaurants, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this document, such statements may include, among other language, such words as "may", "will", "expect", "believe", "plan", "anticipate", "intend", "estimate" and other similar terminology. These statements reflect Management's current expectations, estimates and projections regarding future events and operating performance and speak only as of the date of this document. Readers should not place undue importance on forward-looking statements and should not rely upon this information as of any other date. These forward-looking statements involve a number of risks and uncertainties. The following are some of the factors that could cause actual results to differ materially from those expressed in or underlying such forward-looking statements: competition; changes in demographic trends; changing consumer preferences and discretionary spending patterns; changes in consumer confidence; changes in national and local business and economic conditions; changes in availability of credit; legal proceedings and challenges to intellectual property rights; dependence of the Fund on the financial condition of SIR; legislation and governmental regulation; accounting policies and practices; and the results of operations and financial condition of SIR. The foregoing list of factors is not exhaustive. Many of these issues can affect the Fund's or SIR's actual results and could cause their actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Fund or SIR. Readers are cautioned that forward-looking statements are not guarantees of future performance, and should not place undue reliance on them. The Fund and SIR expressly disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein to reflect any change in expectations, estimates and projections with regard thereto or any changes in events, conditions or circumstances on which any statement is based, except as expressly required by law.
In formulating the forward-looking statements contained herein, Management has assumed that business conditions affecting SIR's restaurants and the Fund will continue substantially in the ordinary course, including without limitation with respect to general industry conditions, regulations (including those regarding employees, food safety, tobacco and alcohol), weather, taxes, foreign exchange rates and interest rates, that there will be no pandemics or other material outbreaks of disease or safety issues affecting humans or animals or food products, and that there will be no unplanned material changes in its facilities, equipment, customer and employee relations, or credit arrangements. Management is not anticipating an improvement, in the near future, in economic conditions (particularly as it relates to the recent unprecedented deterioration of the economic environment and consumer confidence, which could significantly negatively affect sales and profit prospects in the near future). Management is not anticipating an improvement, in the near future, in the availability of credit (particularly as it relates to the recent disruption of world credit markets, which could significantly negatively affect sales and profit prospects in the near future). These assumptions, although considered reasonable by Management at the time of preparation, may prove to be incorrect. In particular, in estimating the revenues for the five new Jack Astor's restaurants and the one new Canyon Creek restaurant, added to Royalty Pooled Restaurants on January 1, 2009, Management has assumed that they will operate consistent with other Jack Astor's and Canyon Creek restaurants. For more information concerning the Fund's risks and uncertainties, please refer to the March 31, 2009 Annual Information Form which is available under the Fund's profile at www.sedar.com.
In formulating the forward-looking statements contained herein, management has assumed that business and economic conditions affecting SIR's restaurants and the Fund will continue substantially in the ordinary course, including without limitation with respect to industry conditions, general levels of economic activity (including in downtown Toronto), regulations (including regarding employees, food safety, tobacco and alcohol), weather, taxes, foreign exchange rates and interest rates, that there will be no pandemics or other outbreaks of disease or safety issues affecting humans or animals or food products, and that there will be no unplanned material changes in its facilities, equipment, customer and employee relations, or credit arrangements. These assumptions, although considered reasonable by SIR management at the time of preparation, may prove to be incorrect. For more information concerning the Fund's risks and uncertainties, please refer to the Fund's periodic interim filings and its March 31, 2009 Annual Information Form, all of which are available under the Fund's profile at www.sedar.com
