MTY Food Group Inc.: MTY Food Group Inc.: Third Quarter 2009 Results

Published in House and Home on Friday, October 16th 2009 at 6:19 GMT by Market Wire
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MONTREAL, QUEBEC--(Marketwire - Oct. 16, 2009) - MTY Food Group Inc. (MTY), (TSX VENTURE:MTY) franchisor and operator of over 1,534 quick service restaurants, reported today its operating results for the nine month period ended August 31, 2009.

MTY reported a net income of $8.49 million or $0.44 per share ($0.44 per fully diluted share) compared to a net income of $7.07 million or $0.37 per share ($0.37 per fully diluted share) for the same period last year, representing a net income increase of 20%. The increase in net income is mainly attributed to the acquisitions of Tutti Frutti, Taco Time and Country Style banners in September 2008, October 2008 and May 2009, respectively.

Total revenue increased by 42%, to $36.05 million from $25.41 million for the same period last year. Revenue from franchise locations increased by 65% to $28.88 million from $17.46 million. The increase in revenue from franchise stores is attributed to the acquisitions and organic growth. Revenue from corporate owned stores decreased 10% to $7.18 million from $7.95 million. The decrease is the result of fewer corporate stores owned and operated in the nine months of 2009 compared to 2008.

EBITDA increased 24% from $12.20 million to $15.19 million for the nine month period ended August 31, 2009. EBITDA from franchise stores increased from $11.14 million to $14.62 million due primarily to the acquisitions of Tutti Frutti, Taco Time and Country Style. EBITDA as a percentage of revenue decreased mainly due to the higher volume in turnkey projects and sales made to franchisees during the period which generated minimal margins. EBITDA from corporate owned stores decreased from $1.06 million to $0.57 million since fewer stores were in operation throughout the nine month period.

Total system wide sales increased 57% to $286.6 million compared to $182.6 million for 2008. Same store sales decreased by 1.2%.

For the quarter ended August 31, 2009, MTY reported a net income of $3.38 million or $0.18 per share ($0.18 per fully diluted share) compared to a net income of $2.67 million or $0.14 per share ($0.14 per fully diluted share) for the same quarter last year, representing a net income increase of 27%. The increase in net income for the quarter is mainly attributable to the integration of its three most recent acquisitions.

For the quarter ended August 31, 2009, total revenue increased by 61%, to $14.84 million from $9.22 million for the same quarter last year. Revenue from franchise stores increased to $11.98 million from $6.53 million due mainly to the recent acquisitions. Revenue from corporate owned stores increased to $2.86 million from $2.69 million, representing an increase of 6%. The increase is a result of the acquisition of five Country Style corporate stores.

EBITDA increased from $4.55 million to $5.94 million for the quarter ended August 31, 2009 representing an increase of 30%. EBITDA from franchise stores increased from $4.19 million in 2008 to $5.62 million in 2009 due primarily to the acquisitions of Tutti Frutti, Taco Time and Country Style.

EBITDA as a percentage of revenue decreased from 63% in 2008 to 47% in 2009 due mainly to larger number of sales of turnkey projects and sales made to franchisees, which have lower profit margins. EBITDA from corporate owned locations decreased from $0.36 million to $0.32 million. EBITDA as a percentage of revenue from corporate-owned locations also decreased from 13% in 2008 to 11%.

MTY's total system wide sales amounted to $113.3 million during the third quarter ended August 31, 2009 compared to $67.1 million for the same period last year, representing an increase of 68.7%. Same store sales in the third quarter of 2009 decreased by 3.6%.

The company has $11.24 million in cash and temporary investments as of August 31, 2009. MTY has 1,534 stores, including 25 corporate owned stores, in operation as of August 31, 2009.

Sixty four new locations have been opened during the nine month period ended August 31, 2009 exceeding the original target of 60 new locations planned for 2009. Management remains committed to seek out potential acquisitions to further strengthen its market position.

On Behalf of the Board of Directors of

MTY Food Group Inc.

Stanley Ma, Chairman, President & CEO

This news release was prepared by management who takes full responsibility for its contents. Neither the TSX Venture Exchange nor its Regulation Services Provide (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.