The Keg Royalties Income Fund Announces Strong First Quarter Results
May 14, 2008 // Franchising.com // Vancouver,– The Keg Royalties Income Fund (the "Fund") has reported its financial results for the three months ended March 31, 2008. Gross sales and same stores sales reported by Keg Restaurants Ltd. ("KRL"), royalty income, earnings before income taxes, and distributable cash all increased from the comparable period of the prior year.
Total system sales reported by KRL for the 13 weeks ended March 30, 2008 increased by $4.6 million or 4.3% to $111.6 million for the quarter. Royalty Pool sales increased by 6.0% to $111.5 million for the quarter compared to $105.2 million for the same quarter of the previous year. The increase in gross sales reflects the net impact of the addition of net new sales to the Royalty Pool at the beginning of the year and an increase in same store sales.
KRL's same store sales (sales of restaurants that operated during the entire period of both the current and prior years) increased by 6.2% in Canada and decreased by 3.6% in the United States for the 13-week period ended March 30, 2008. After translating the sales of the U.S. restaurants into their Canadian dollar equivalent, consolidated same store sales increased by 2.2% for the 13-week period, despite the negative effect of the exchange rate between Canadian and U.S. dollars.
Royalty income increased by $228,000 or 5.4% to $4,488,000 for the quarter as a result of the increase in gross sales.
Earnings before income taxes increased slightly to .329 cents/Fund unit from .328 cents/Fund unit during the quarter. Distributable cash available to pay distributions to Fund unitholders increased to .330 cents/Fund unit from .328 cents/Fund unit for the quarter. The Fund paid distributions of .314 cents/Fund unit during the quarter.
A copy of the complete financial results will be available at www.sedar.com and the Fund's website at www.kegincomefund.com.
Vancouver-based Keg Restaurants Ltd. is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. KRL continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. Keg Restaurants Ltd. has been named one of the "50 Best Employers in Canada" for the past six years by the Globe and Mail's Report on Business Magazine.
This press release may contain or refer to certain "forward looking" statements reflecting the Fund's business, operations and financial condition. These forward looking statements are based on assumptions that management of the Fund believe to be reasonable. However, investors are cautioned that all forward looking statements involve risks and uncertainties that could cause actual results to differ from those expected or projected, including changes in the foodservice market, competitive developments, potential downturns in economic conditions generally and currency fluctuations. The foregoing list is not exhaustive and additional information on these and other potential factors that could affect the Fund's financial results are detailed in documents filed from time to time with the provincial securities commissions in Canada. The Fund undertakes no obligation to update or revise any forward looking statements.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of the prospectus, nor shall there be any sale of the Fund units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state, province or jurisdiction. The Keg Royalties Income Fund units have not been, and will not be registered under the U.S. Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an application for exemption from the registration requirement under U.S. securities laws.
The Trustees of the Fund have approved the contents of this press release.