For Immediate Release Toronto Stock Exchange: BPF.UN
BOSTON PIZZA ROYALTIES INCOME FUND AND BOSTON PIZZA INTERNATIONAL INC. ANNOUNCE FIRST QUARTER SALES RESULTS AND APRIL DISTRIBUTION TO UNITHOLDERS
Fund's earnings before taxes rise 16% with royalty pool growing to 300 restaurants
VANCOUVER, BC, (May 7, 2008) - Boston Pizza Royalties Income Fund (the "Fund") and Boston Pizza International Inc. ("BPI") each reported today financial results for the period of January 1, 2008 to March 31, 2008 (the "Period"). A copy of the management's discussion and analysis and financial statements are available at http://www.sedar.com/ and http://www.bpincomefund.com/. The Fund will host a conference call to discuss the results on May 8, 2008 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time). The call can be accessed by dialling 1-800-319-4610 or 604-638-5340. A replay will be available until May 15, 2008 by dialling 1-800-319-6413 or 604-638-9010 and entering the pin code: 4452 followed by # sign.
Same Store Sales Growth ("SSSG"), the key metric for revenue growth of the Fund, was 0.9% for the Period. Overall growth in franchise sales of restaurants in the royalty pool was 10.9% for the Period. This was achieved through the addition of 34 new restaurants to the royalty pool on January 1, 2008. During the Period, BPI opened two new Boston Pizza restaurants and renovated ten existing locations to the latest design standards.
"As we had indicated in our previous financial release, the first quarter of 2008 held some challenges for same store sales growth at Boston Pizza," said Mike Cordoba, Chief Executive Officer. "In addition to the extremely cold weather and snowstorms which impacted customer traffic in some regions of the country, we had a record number of locations that closed for renovations during the quarter. Those restaurants have now re-opened for business and we fully expect that the great new look of the renovated locations, along with our new menu and national advertising campaign launching in the second quarter, will contribute to sales growth going forward".
Earnings before income taxes increased by 16.0% during the Period compared to the same period in 2007. Earnings before income taxes of the Fund for the Period were $4.3 million or $0.324 per unit compared to the first quarter of 2007 in which earnings before income taxes were $3.7 million or $0.317 per unit. Distributions declared for the Period were $0.230 per unit compared to the first quarter of 2007 in which distributions declared were $0.222 per unit. Distributions for the Period were funded entirely by cash flow from operations. No debt was incurred at any point during the Period to fund distributions.
The Trustees of the Fund are pleased to announce a monthly cash distribution to Unitholders of 11.5 cents per unit for April 2008. The April distribution will be paid to Unitholders of record at the close of business on May 21, 2008 and will be payable on May 31, 2008. The Fund periodically reviews distribution levels based on its policy of stable and sustainable distribution flow to Unitholders.
The Fund is a limited purpose, open-ended trust established under the laws of British Columbia to acquire indirectly certain trade-marks and trade names used by BPI in its Boston Pizza restaurants in Canada. The trade-marks are licensed to BPI for 99 years for which BPI pays the Fund 4% of franchise revenues of royalty pooled restaurants.
HIGHLIGHTS
The following table sets out selected historical information and other data from the financial statements of the Fund and the Boston Pizza Royalties Limited Partnership (the "Partnership"), which should be read in conjunction with the attached consolidated financial statements of the Fund.
| | Jan. 1, 2008 to Mar. 31, 2008 | Jan. 1, 2007 to Mar. 31, 2007 |
| | (in thousands of dollars - except restaurants, SSSG and per unit items) |
| System-Wide Gross Sales | $191,487 | $171,173 |
| Number of restaurants in Royalty Pool | 300 | 266 |
| Franchise Sales reported by restaurants in Royalty Pool | $152,638 | $137,592 |
| Royalty Income - 4% of Franchise Sales of Royalty Pool Restaurants | $6,106 | $5,504 |
| Partnership administrative and interest expenses | $388 | $332 |
| Partnership earnings for the period before undernoted | $5,718 | $5,172 |
| BPI's interest in the earnings of the Partnership | $1,841 | $1,892 |
| Equity income related to BPI royalties earned by the Fund | $3,877 | $3,280 |
| Interest income | $450 | $450 |
| Earnings before income taxes | $4,327 | 3,730 |
| Future income tax expense | $116 | - |
| Net earnings | $4,211 | $3,730 |
| Basic and Diluted Earnings per Fund unit | $0.316 | $0.317 |
| Distributions declared per Fund unit | $0.230 | $0.222 |
| Same store sales growth (SSSG) | 0.9% | 6.6% |
| Number of restaurants opened during period | 2 | 1 |
| Number of restaurants closed during period | 0 | 0 |
| | | | |
OUTLOOK
Boston Pizza is well positioned for future growth and should continue to strengthen its position as the number one casual dining brand in Canada. In 2008, BPI management anticipates that approximately 30 to 35 new locations will open across Canada. Management will continue to pursue further development in Western Canada, while the majority of new locations are expected to be in Eastern Canada and Quebec.
SSSG in the year ahead will be driven by a new television advertising campaign, a larger national marketing budget and an updated menu roll-out. In addition, Boston Pizza is continuing to aggressively pursue its renovation program with plans to complete a record 25 to 30 major restaurant renovations during 2008. Renovated restaurants have historically experienced an average sales increase of 10% - 15% in the year following the renovation.
Certain information in this press release may constitute "forward-looking" information that involves known and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance or achievements of the Fund, the Boston Pizza Holdings Trust, the Partnership, BPI, Boston Pizza restaurants, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. When used in this press release, such information uses words including "anticipate", "estimate", "may", "will", "expect", "believe", "plan" and other similar terminology. This information reflects current expectations regarding future events and operating performance and speak only as of the date of this press release. Such forward-looking information involves a number of risks, uncertainties and future expectations including, but not limited to the risks and uncertainties set out in the Fund's management's discussion and analysis under "Risks and Uncertainties". Forward-looking information is made as of the date hereof and, except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances.
The trustees of the Fund have approved the contents of this press release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Boston Pizza Royalties Income Fund
Jordan Holm - Vice President of Investor Relations
Tel: 604-303-6083
investorrelations(at)bostonpizza.com
www.bpincomefund.com
® Boston Pizza Royalties Limited Partnership. All Boston Pizza registered Canadian trade-marks and unregistered Canadian trade-marks containing the words "Boston", "BP", and/or "Pizza" are trade-marks owned by the Boston Pizza Royalties Limited Partnership and licensed by the Boston Pizza Royalties Limited Partnership to Boston Pizza International Inc.
© Boston Pizza International Inc. 2008