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Boston Pizza Royalties Income Fund and Boston Pizza International Inc. Announce Fourth Quarter Results and January Distribution to Unitholders

February 10, 2010

For Immediate Release                                                                           The Toronto Stock Exchange: BPF.UN


 System wide sales of $848.3 million from 340 locations across Canada in 2009

VANCOUVER, BC, (February 10, 2010) - Boston Pizza Royalties Income Fund (the "Fund") and Boston Pizza International Inc. ("BPI") each reported today financial results for the period from October 1, 2009 to December 31, 2009 (the "Period") and the full year results from January 1, 2009 to December 31, 2009 (the "Year"). A copy of management's discussion and analysis and financial statements of the Fund and BPI for the Period and the Year are available at and The Fund will host a conference call to discuss the results on February 10, 2010 at 8:30 a.m. Pacific Time (11:30 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 February 17, 2010 by dialling 1-800-319-6413 or 604-638-9010 and entering the pin code: 4452 followed by # sign.

Same store sales growth ("SSSG"), a key driver of yield growth for Unitholders of the Fund, was negative 4.4% for the Period and negative 4.0% for the Year compared to the same periods one year ago.  Franchise sales of restaurants in the royalty pool decreased 1.7% for the Period and were roughly unchanged for the Year versus the same periods in 2008. Franchise sales results for the Period and the Year were negatively impacted by weaker general economic conditions partially offset by the addition of 23 net new restaurants to the royalty pool on January 1, 2009 and by a successful new national promotion which ran in January and October.

"We are very pleased that, as a result of the recent unit buyback programs, the Fund was able to increase earnings per unit before non-cash items for the fourth quarter and full year 2009 despite the challenging market conditions. In addition, Boston Pizza continued its growth strategy by opening 18 new restaurants in Canada and renovating another 16 locations to the latest design standards" said George Melville, Co-Chairman and Owner of Boston Pizza International Inc. "The steps we have taken to expand and strengthen the Boston Pizza brand during 2009 will be a significant benefit as economic conditions improve going forward."   

The Fund's earnings before income taxes and dilution gains or losses per unit increased by 2.5% for the Period and by 0.7% for the Year compared to the same periods in 2008.  The Fund's earnings before income taxes and dilution gains or losses for the Period were $4.7 million or $0.329 per unit compared to the fourth quarter of 2008 in which earnings before income taxes were $5.0 million or $0.321 per unit. Distributions declared for the Period were $6.5 million or $0.460 per unit compared to the fourth quarter of 2008 in which distributions declared were $7.1 million or $0.460 per unit.  The Fund's earnings before income taxes and dilution gains or losses for the Year were $19.5 million or $1.347 per unit compared to 2008 in which earnings before income taxes and dilution gains or losses were $20.2 million or $1.338 per unit. Despite the decrease in earnings for the Period and Year, the Fund's earnings before non-cash items including future income taxes and dilution gains or losses on a per unit basis increased for the Period and Year compared to the same periods in 2008 largely due to the lower number of Units outstanding during the Period and Year versus the same periods one year ago as a result of the Fund's acquisition of units pursuant to normal course issuer bids during 2008 and 2009. Distributions declared for the Year were $19.8 million or $1.380 per unit compared to 2008 in which distributions declared were $21.2 million or $1.380 per unit. Distributions for the Period and Year were funded entirely by cash flow from operations. No debt was incurred at any point during the Period or Year 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 January 2010. The distribution will be payable to Unitholders of record at the close of business on February 21, 2010 and will be paid on February 26, 2010.  The Fund periodically reviews distribution levels based on its policy of stable and sustainable distribution flow to Unitholders.   

On September 21, 2009, the Fund announced that it has received Toronto Stock Exchange ("TSX") approval of a Notice of Intention to Make a Normal Course Issuer Bid (the "2009 NCIB") through the facilities of the TSX which permits the Fund to repurchase for cancellation up to 1,201,783 units, being approximately 8.4% of the Fund's issued and outstanding units, and approximately 10.0% of its public float, then comprised of 12,017,833 units. 

Purchases under the 2009 NCIB commenced on October 1, 2009 and as of February 9, 2010, the Fund has acquired 568,370 units at an average price of $11.79 per unit.  The 2009 NCIB will terminate on the earlier of September 30, 2010, the date upon which the Fund terminates the plan in accordance with the terms of the plan, or the date that the Fund has acquired the maximum number of units under the 2009 NCIB. Units acquired under the 2009 NCIB will be cancelled.

Subsequent to December 31, 2009, Boston Pizza Royalties Limited Partnership (the "Partnership") reached an agreement with a Canadian chartered bank (the "Lender") to establish an additional $5.0 million credit facility for the purpose of funding purchases of units under the Fund's normal course issuer bids (the "Supplementary NCIB Credit Facility").  The Supplementary NCIB Credit Facility will bear interest, at the Partnership's choice, at either:  (a) variable rates, comprised of either or a combination of the bank's prime rate plus 1.50% per annum or bankers' acceptance rates plus 3.00%; or (b) fixed rates equal to the Lender's cost of funds plus 2.00% for the term selected; as selected by the Partnership, and has a maturity date of September 22, 2012.  The key covenants under the Supplementary NCIB Credit Facility are the same as under the $1.0 million operating loan (the "Operating Loan"), the $5.0 million term loan (the "Term Loan") and $20.0 million normal course issuer bid credit facility (the "NCIB Credit Facility").  Like the Operating Loan, Term Loan and NCIB Credit Facility, the Supplementary NCIB Credit Facility will be secured by a first charge over the assets of the Partnership and will be guaranteed by the Fund and its other subsidiaries, some of whom have also granted security for their obligations under those guarantees.  The establishment of the Supplementary NCIB Credit Facility is subject to formal documentation being completed in a form satisfactory to the Partnership and the Lender.

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 beginning in 2002 for which BPI pays the Fund 4% of franchise revenues of royalty pooled restaurants.


The following table sets out selected historical information and other data from the financial statements of the Fund and the Partnership, which should be read in conjunction with the attached consolidated financial statements of the Fund.


Oct 1, 2009
Dec 31, 2009

Oct 1, 2008
Dec 31, 2008

 Jan 1, 2009
Dec 31, 2009

Jan 1, 2008
Dec 31, 2008

(in thousands of dollars - except restaurants, SSSG and per unit items)

System-Wide Gross Sales





Number of restaurants in Royalty Pool





Franchise sales reported by restaurants in Royalty Pool





Royalty Income - 4% of Franchise Sales of Royalty Pool Restaurants





Partnership administrative and interest expenses





Partnership earnings for the period before undernoted





BPI's interest in the earnings of the Partnership





Equity income related to BPI royalties earned by the Fund





Net interest income





Earnings before undernoted





Future income taxes expense





Dilution gain (loss)





Net earnings





Earnings before undernoted per fund unit





Basic and Diluted Earnings per fund unit





Distributions declared per fund unit





Same store sales growth (SSSG)





Number of restaurants opened during period





Number of restaurants closed during period






BPI's management believes that the prevailing weaker economic conditions will persist in 2010 resulting in continued pressure on SSSG and franchise sales at Boston Pizza Restaurants in Canada. However, Boston Pizza is well positioned to attract a wide variety of guests into the restaurant, sports bar and take-out/delivery parts of each location and offer a compelling value proposition to Canadians in these challenging economic times. BPI's strategies to drive guest traffic and higher average cheque levels include a larger marketing budget versus the previous year, national and local store promotions and menu re-pricing as part of the new menu launched each year in June. In addition, BPI's management anticipates that 15 to 25 restaurants will complete renovations in 2010. Renovated restaurants typically experience an incremental sales increase in the year following the re-opening.

BPI's management has determined that 10 to 15 new locations will open across Canada in 2010. Boston Pizza remains well positioned for future expansion and will continue to strengthen its position as the number one casual dining brand in Canada by pursuing further restaurant development opportunities across the country.

Under the Specified Investment Flow Through tax legislation, which was substantively enacted into law on June 12, 2007, the Fund will be subject to a tax at the prevailing corporate rate beginning on January 1, 2011. This tax will reduce net earnings and will affect cash distributions to Unitholders by approximately the same amount. Monthly cash distributions to Unitholders will be reclassified for tax purposes as eligible dividends and Canadian residents who hold their Units in a non-tax deferred account may claim the dividend tax credit for eligible dividends, thereby reducing the after-tax impact of this legislative change. Since the announcement of this change in tax legislation, management and the Trustees have monitored the changes in the income trust environment and capital markets and continue to review potential impacts on the Fund's current strategies and the alternatives available to the Fund, consistent with protecting and enhancing Unitholder value. No determination regarding a change to the current trust structure has been made by the Trustees at this time.

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, Boston Pizza Holdings Limited Partnership, Boston Pizza Holdings GP Inc., Boston Pizza GP Inc., 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 speaks 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: competition; changes in demographic trends; changes in consumer preferences and discretionary spending patterns; changes in national and local business and economic conditions; legislation and government regulation; accounting policies and practices; and the results of operations and financial conditions of BPI and the Fund.  The foregoing list of factors is not exhaustive and should be considered in conjunction with 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.


Boston Pizza Royalties Income Fund
Jordan Holm - Vice President of Investor Relations
Tel: 604-303-6083

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