MONCTON, NB, April 3 /CNW/ - PDM ROYALTIES INCOME FUND (the "Fund") Subsequent to filing the Press Release on March 30, 2007 with respect to the financials results of PDM Royalties Income Fund (the "Fund") for the year ended December 31, 2006, management noted an error whereby certain quarterly numbers were described as full year results. The MD&A and financial statements of the Fund for the year ended December 31, 2007 and released on March 30, 2007 are correct as filed. Management felt it was important to have the correct information consistent in the press release and has therefore stated the corrected quarterly results below.
Pizza Delight Corporation Ltd. (PDC) achieved same store sales growth (SSSG) of 2.8% for the fourth quarter of 2006 (2005 (equal sign) 1.6%). Scores was the strongest division for the quarter with SSSG of 15.7% (2005 (equal sign) 1.7%) with Pizza Delight at 6.8% (2005 (equal sign) 1.6%), Mikes -6.0% (2005 (equal sign) 1.5%), and Baton Rouge (for 18 days) was 5.8%.
On a full year basis PDC was 1.5% (2005 (equal sign) 2.1%). The Scores brand performed very well with SSSG of 7.4% (2005 for 4 months (equal sign) 0.3%), Pizza Delight was 4.2% (2005 (equal sign) 0.9%), Mikes was -3.0% (2005 (equal sign) 3.0%), and Baton Rouge (for 18 days) was 5.8%.
Total revenues during the year were $10.6 million compared to $8.1 million for 2005. Distributable cash for the year was $1.450 per basic unit outstanding compared to actual distributions paid of $1.440 per unit. The revenue increase was generated by a full year of royalty revenue from the Scores restaurants compared to only a partial year in 2005 compounded with the acquisition of the Baton Rouge Restaurants on December 13, 2006.
System sales for the 251 restaurants plus 16 Baton Rouge restaurants added on December 13, 2006 (2005 - 224 plus 24 Scores restaurants added August 31, 2005) included in the royalty pool in 2006 increased to $284.5 million compared to $227.3 million for 2005. The growth reflects a full year of operations for Scores Restaurants versus a partial year in 2005 plus the addition of the Baton Rouge Restaurants on December 13, 2006.
2006 was a record year for PDC in terms of sales and profits. The addition of Scores in 2005 and Baton Rouge in 2006 has positioned PDC to achieve another level of records in 2007.
In 2006, PDC completed significant brand research and evaluation of its Pizza Delight and Mikes brands to better understand its positioning in the market place. Based on the research, Pizza Delight has completed its design process for a new concept and expects to open its prototype restaurant in April 2007. The modified concept is an enhancement to its already well received decor while providing several new products and styles of service in a very inviting atmosphere. Mikes Restaurants are in the final stages of design of its new concept that is intended to focus the brand towards its core Italian offerings. Mikes Restaurants is concentrating on improving the quality of the core menu items while streamlining its menu.
Management expects significant SSSG from renovations to these new concepts in its current markets while the new concept will provide a solid platform in the new markets where the Company plans to expand. The prototyping and testing of these new concepts will be completed in 2007 with a roll out of a renovation plan for existing restaurants to commence in 2008.
Having multiple brands enables the company to continue opening new restaurants while the prototype is being completed. There were 5 Scores restaurants opened in 2006. PDC expects to open 10 Scores restaurants and 5 Baton Rouge restaurants and renovate 10 restaurants in 2007.
The addition of Ron Magruder, a 36 year veteran of the restaurant industry, as the President and Chief Executive Officer of PDC adds substantial depth, knowledge and resources at the senior executive level. Ron will provide positive guidance to all brands in their expansion into new markets as well as providing increased direction and focus for each brand.
On January 1, 2007 the Fund acquired an additional six restaurants with sales estimated at $12.3 million annually, less the closure of twelve underperforming locations with annual sales of $7.5 million have been removed from the Royalty Pool, resulting in an estimated net increase in Royalty Pool Sales of $4.8 million annually. As a result of the contribution of the additional sales to the Royalty Pool, PDC's Additional Entitlement is equivalent to 259,366 Fund units, subject to final adjustment when actual sales for the new restaurants are confirmed. These net new restaurants are expected to generate an additional $414,000 in royalties. PDC now holds an 18.6% interest in the Fund.
Complete financial statements are available at www.sedar.com
The Fund is a limited purpose open-ended trust established under the laws of Ontario. The Fund will make monthly distributions of its available cash to holders of units. The Fund indirectly owns the trade marks and intellectual property for the Pizza Delight, Mikes, Scores, and Baton Rouge brands and has licensed them to PDC in consideration for a royalty equal to 4% of system sales for Pizza Delight and Mikes restaurants, and a royalty rate of 6% for Scores and Baton Rouge restaurants.
PDC is a privately owned corporation, headquartered in Moncton, New Brunswick. It operates franchised and corporate restaurants under the brand names Pizza Delight(R), Mikes(R), Scores(R), and Baton Rouge(R) restaurants. 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.