MONCTON, NB, Jan. 29 /CNW/ -- Imvescor Restaurant Group Inc. ("IRG" or the "Company") (TSX: IRG), formerly PDM Royalties Income Fund (or "PDM"), reported audited financial results today from January 1, 2009 to October 25, 2009 (the "2009 Financial Year"). As previously announced, IRG changed its year end to the final Sunday in October. Accordingly, the 2009 Financial Year ended on October 25, 2009. The audited results for IRG for the 2009 Financial Year include the results of PDM for the nine months ending September 30, 2009 and for the first nine days of October, prior to the completion of the previously announced plan of arrangement (the "Arrangement") on October 9, 2009, and the results for IRG post-Arrangement from October 10 to October 25, 2009.
The results for the 2009 Fiscal Year are compared to the prior 12-month year ended December 31, 2008 and are, therefore, not directly comparable.
The period from July 1, 2009 to October 25, 2009, being the period from the beginning of PDM's third quarter until the newly established year end is referred to herein as the Interim Period.
IRG derives its revenues from royalties based on system sales from each of its four brands: Pizza Delight(R), Mikes(R), Scores(R) and Baton Rouge(R), as well as from franchise fees and the operation of company-owned restaurants.
Total system sales for the restaurants in the royalty pool for the Interim Period were $121.5 million for that 117-day period, compared to $105.2 million for the 92-day period ending September 30, 2008. Total system sales for the restaurants in the royalty pool for 2009 Fiscal Year were $324.8 million.
For the Interim Period, IRG reported net earnings of $9.5 million or $1.17 per common share ("Common Share") of IRG. IRG reported a $20.0 million net loss for the 2009 Fiscal Year. The net loss included a previously reported $35.5 million non-cash impairment of the Imvescor rights taken in the second quarter, offset in part by a $8.5 million gain on the settlement of pre-existing relationships and $1.6 million for the future recovery of income taxes, and by royalty fees and interest income. For the 2009 Financial Year, IRG recorded a net loss of $2.47 per Common Share.
Same-stores sales ("SSS") for the interim period declined 4.6%, due largely to the severe economic conditions that continue to affect the entire restaurant industry. At Pizza Delight, SSS were -1.7% in the Interim Period compared to 3.7% growth in the third quarter of 2008. SSS at Mikes declined 4.6% in the Interim Period compared to a 4.1% gain in the third quarter of 2008. SSS at Scores grew 0.3% in the Interim Period, compared to -1.2% in the third quarter of 2008. Baton Rouge SSS were -13.1% in the Interim Period compared to -1.2% in the third quarter of 2008.
There was a 4.1% decline of SSS in the 2009 Fiscal Year, due largely to the severe economic conditions that continue to affect the entire restaurant industry. At Pizza Delight, SSS grew 0.1% in the 2009 Fiscal Year compared to 4.3% in 2008. At Mikes SSS declined by 3.6% in the year 2009 Fiscal Year compared to a 3.5% gain in fiscal 2008. SSS at Scores fell 0.5% in the 2009 Fiscal Year, compared to a 3.9% decline in 2008. Baton Rouge SSS declined 12.5% in the 2009 Fiscal Year compared to a decline of 1.9% in 2008.
During the 2009 Fiscal Year, Scores and Baton Rouge each had unforeseen temporary restaurant closures due to fires that significantly impacted SSS percentages. Removing the two locations affected by fire, it is estimated that SSS would have been +0.3% at Scores, -8.6% at Baton Rouge and -2.9% for IRG overall.
During the 2009 Fiscal Year, IRG opened one new Scores restaurant, and renovated 4 Pizza Delight restaurants, 5 Mikes restaurants and one Scores, while closing 6 Pizza Delights, 2 Mikes and 1 Scores.
IRG will continue to focus on renovations and new store openings to increase revenues, while finding efficiencies to increase all profitability and cash flow. IRG will also focus on building cash reserves and paying down debt.
"The general economic conditions have been a challenge to our industry and IRG has felt this impact. While we are disappointed in the results from last year, we believe we are well-positioned with our brands and our new structure to successfully compete in the market place," said Ron Magruder, President and Chief Executive Officer of IRG. "Last year we only opened one new restaurant. In contrast, we have already opened one new Mikes and one new Scores since our financial year commenced on October 26th and both are doing well. We have 2 more Scores, one Pizza Delight and one Baton Rouge under construction so our outlook continues to improve. We are moving into 2010 in a better place and we are excited about our potential under the new corporate structure, which is less complicated, provides us with easier access to cash flow and increased growth opportunities."
"We regret the delay in reporting our year-end results. As we previously announced, the delay was a result of the complexity in the accounting rules arising from our transition from an income fund to a public company in 2009. Our Board, management, auditors and external financial advisors have all worked diligently to ensure that our audit process was thorough, complete and accurately accomplished. We believe it was important to take the time to get it right," concluded Mr. Magruder.
About Imvescor Restaurant Group
Headquartered in Moncton, New Brunswick, Imvescor Restaurant Group owns franchised and corporate stores throughout Canada, under four brands: Pizza Delight(R) operates primarily in Atlantic Canada, where it dominates the family/mid-scale segment. Mikes(R) and Scores(R) restaurants operate primarily in Quebec in the family and casual dining segments and the take-out and delivery segments. Baton Rouge(R) operates in the Province of Quebec and Ontario in the casual dining segment.
Certain information regarding IRG contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although IRG believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. IRG cautions that actual performance will be affected by a number of factors, many of which are beyond IRG's control, and that future events and results may vary substantially from what IRG currently foresees. IRG assumes no obligation to update such forward-looking statements, except as required by applicable securities laws. IRG's forward-looking statements are expressly qualified in their entirety by this cautionary statement.