VAUGHAN,
ON, May 4, 2022 /CNW/ - Recipe Unlimited
Corporation reported financial results today for the 13 weeks ended
March 27, 2022.
- Total System Sales(1) increased 34.2% to
$721.4 million for the
quarter
- 61.2% of operating weeks impacted by government
mandated restrictions or closures in the quarter
- E-Commerce System Sales(1) increased 13.3% to
$169.8 million in Q1 2022
- Same Restaurant Sales Growth(1) of 38.8%
- Operating Income increased to $24.5
million from $10.5 million in
Q1 2021 and Adjusted EBITDA(2) increased 36.3% to
$32.7 million from Q1 2021
- Named as a Top 50 Best Workplaces™ in Canada by Great Place to Work®
(1)
|
This is a supplementary
financial measure. Please refer to "Non-GAAP Measures -
Supplementary Financial Measures" section of this press release for
a definition of this measure.
|
(2)
|
This is a non-GAAP
financial measure. Please refer to the "Non-GAAP Measures -
Non-GAAP Financial Measures" section of this press release for a
definition of this measure.
|
"I am proud of the resilience of our franchise partners and all
of our front line teammates, who once again did a remarkable job
managing through a difficult environment. The Omicron variant
forced the closure of dining rooms and reduced capacity for 61% of
our Operating weeks in Q1. Despite these restrictions, System Sales
increased 34% as our teams welcomed Guests back to our restaurants
with strong sales in March as restrictions eased.
Recipe is emerging from the pandemic with a strong balance
sheet. We are confident in our ability to manage through the macro
environment, while still delivering a great experience and value
for our Guests. Our immediate growth plans call for 30 new
restaurants in 2022, with plans for renovations at an additional 40
locations. To support our growth plans, we recently renewed and
extended our $550 million revolving
term credit facility on terms that are substantially unchanged from
our credit facility pre-pandemic.
To win in this environment takes a great team that is engaged.
Recipe is proud to be named as a Top 50 Best Workplaces™ in
Canada, as voted on by our
teammates."
– Frank Hennessey, CEO
Highlights for the 13 weeks ended
March 27, 2022:
- Total System Sales(1) for the 13 weeks ended
March 27, 2022 was $721.4 million, compared to $537.6 million in 2021, representing an increase
from 2021 of 34.2%. The increase from 2021 was largely driven by
fewer complete and partial dining room closures, which affected
61.2% of operating weeks during the first quarter of 2022 compared
to 88.7% in the same quarter last year.
- Gross revenue for the 13 weeks ended March 27, 2022 was $272.6
million, compared to $194.1
million in 2021 , representing an increase from 2021 of
40.4% driven by significantly higher System Sales(1) in
both our corporate and franchise segments.
- E-Commerce System Sales(1) for the 13 weeks ended
March 27, 2022 was $169.8 million, compared to $149.8 million in 2021, representing an increase
from 2021 of 13.3%. Consumer demand through e-commerce channels
remained strong even as dining room restrictions returned in the
first quarter of 2022.
- Sales for Retail and Catering for the 13 weeks ended
March 27, 2022 was $90.5 million compared to $87.6 million in 2021, representing an increase
from 2021 of 3.3%. The increase was driven by increased sales to
retail grocery customers and modest sales recovery of the catering
segment in the first quarter of 2022.
- Same Restaurant Sales ("SRS") Growth(1) for the 13
weeks ended March 27, 2022 was an
increase of 38.8% compared to 2021. Contributing factors to our SRS
Growth(1) include fewer dining restrictions, consumers
returning to pre-pandemic behaviors and increased E-Commerce System
Sales(1).
- Operating Income for the 13 weeks ended March 27, 2022 was $24.5
million compared to $10.5
million in 2021, an increase of $14.0
million for the quarter. Adjusted EBITDA(2) for
the 13 weeks ended March 27, 2022 was
$32.7 million compared to
$24.0 million in 2021, an increase of
$8.7 million. The Operating Income
and Adjusted EBITDA(2) increases were driven by
increased System Sales(1), partially offset by a
decrease in government subsidies and an increase in food
costs.
- Cash flows from operating activities for the 13 weeks ended
March 27, 2022 was $5.3 million, compared to $21.4 million in 2021, representing a decrease of
$16.1 million. The decrease is
primarily related to a higher investment in working capital,
notably in raw materials inventory used in Recipe's food processing
divisions, partially offset by higher Adjusted
EBITDA(2).
- Free Cash Flow(2) for the 13 weeks ended
March 27, 2022 was $(20.0) million, compared to $(6.4) million in 2021 representing a decrease of
$13.6 million mainly due to the
decrease in cash flows from operating activities.
- Net earnings for the 13 weeks ended March 27, 2022 were $21.1
million, compared to net earnings of $13.0 million in 2021, representing an increase
of $8.1 million for the quarter. The
increase was primarily driven by an increase in Operating Income
partially offset by a net increase in current and deferred
taxes.
- Basic EPS for the 13 weeks ended March
27, 2022 was $0.36 compared to
$0.23 in 2021, representing an
increase of $0.13. Diluted EPS for
the 13 weeks ended March 27, 2022 was
$0.36 compared to $0.22 in 2021, representing an increase of
$0.14.
- The Company continues to execute its restaurant network
improvement strategy plan, which included the planned closures of
restaurants that no longer fit its long-term strategic plan and the
addition of new locations with high growth potential. For the 13
weeks ended March 27, 2022, the
Company successfully added 2 franchised locations and exited 12
restaurants.
(1)
|
This is a supplementary
financial measure. Please refer to "Non-GAAP Measures -
Supplementary Financial Measures" section of this press release for
a definition of this measure.
|
(2)
|
This is a non-GAAP
financial measure. Please refer to the "Non-GAAP Measures -
Non-GAAP Financial Measures" section of this press release for a
definition of this measure.
|
Financial Summary
|
|
|
For the 13 weeks
ended
|
(C$ millions
unless otherwise stated)
|
|
|
March 27,
2022
|
|
March 28,
2021
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
Total System Sales
(1)(2)
|
|
$
|
721.4
|
|
$
|
537.6
|
System Sales Growth
(1)(2)
|
|
|
34.2 %
|
|
|
(28.1) %
|
SRS Growth
(1)(2)(5)
|
|
|
38.8 %
|
|
|
n/a
|
|
|
|
|
|
|
|
Total gross
revenue
|
|
$
|
272.6
|
|
$
|
194.1
|
|
|
|
|
|
|
|
Total number of
restaurants (at period end)
|
|
|
1,251
|
|
|
1,330
|
|
|
|
|
|
|
|
Operating
Income
|
|
$
|
24.5
|
|
$
|
10.5
|
Adjusted EBITDA
(3)
|
|
$
|
32.7
|
|
$
|
24.0
|
Adjusted EBITDA Margin
on System Sales (4)
|
|
|
|
|
|
|
Corporate restaurant
sales.
|
|
$
|
141.2
|
|
$
|
79.6
|
Number of corporate
restaurants (at period
end)
|
|
|
221
|
|
|
215
|
Operating Income
from Corporate segment
|
|
$
|
15.6
|
|
$
|
3.9
|
Operating Income as a %
of corporate sales
|
|
|
11.1 %
|
|
|
4.8 %
|
|
|
|
|
|
|
|
Franchise restaurant
System Sales
|
|
$
|
489.8
|
|
$
|
367.0
|
Number of franchised
& JV restaurants (at period
end
|
|
|
1,030
|
|
|
1,115
|
Operating Income
from Franchise segment
|
|
$
|
22.9
|
|
$
|
16.0
|
Operating Income as a %
of Franchise sales
|
|
|
4.7
%
|
|
|
4.4
%
|
|
|
|
|
|
|
|
Retail and Catering
sales
|
|
$
|
90.5
|
|
$
|
87.6
|
Operating Income
from Retail and Catering
|
|
$
|
5.0
|
|
$
|
8.0
|
Operating Income as a %
of Retail & Catering sales
|
|
|
5.5
%
|
|
|
9.1
%
|
|
|
|
|
|
|
|
Adjusted EBITDA
(3) from Central segment
|
|
$
|
(10.8)
|
|
$
|
(3.9)
|
|
|
|
|
|
|
|
Cash flows from
operations
|
|
$
|
5.3
|
|
$
|
21.4
|
Free Cash
Flow(3)
|
|
$
|
(20.0)
|
|
$
|
(6.4)
|
|
|
|
|
|
|
|
Earnings before income
taxes
|
|
$
|
26.6
|
|
$
|
13.8
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
21.1
|
|
$
|
13.0
|
Basic EPS (in
dollars)
|
|
$
|
0.36
|
|
$
|
0.23
|
Diluted EPS (in
dollars)
|
|
$
|
0.36
|
|
$
|
0.22
|
|
|
(1)
|
Results from New York
Fries located outside of Canada, East Side Mario's restaurants in
the United States, and Casey's restaurants are excluded from System
Sales Growth.
|
(2)
|
This is a supplementary
financial measure. Please refer to "Non-GAAP Measures -
Supplementary Financial Measures" section of this press release for
a definition of this measure.
|
(3)
|
This is a non-GAAP
financial measure. Please refer to the "Non-GAAP Measures -
Non-GAAP Financial Measures" section of this press release for a
definition of this measure.
|
(4)
|
This is a non-GAAP
ratio. Please refer to the "Non-GAAP Measures - Non-GAAP Ratios"
section of this press release for a definition of this
measure.
|
(5)
|
SRS Growth was
reintroduced as a non-GAAP financial measure in Q1 2022.
|
Outlook
The restaurant and food services industry continues to
experience disruptions as a result of the COVID-19 pandemic. Near
the end of the fourth quarter of 2021, Canada began to experience a surge in new
COVID-19 infections driven by the omicron variant. As a result,
restaurants in certain provinces were mandated to limit their
capacity in December 2021 and dining
rooms in Ontario and Quebec were subsequently mandated to
temporarily close in January 2022. In
March 2022, most dining room
restrictions were lifted.
The actions we have taken to strengthen our overall business
during the COVID-19 pandemic (including streamlining menus,
improving our digital platform, testing and introducing higher
efficiency kitchen equipment, investing in our people and
franchisees, as well as the strategic changes made to our brand
portfolio mix and restaurant network) will also allow us to recover
from the effects of the pandemic. The Company's restaurants are
predominantly situated in non-urban locations and its recovery is
not dependent on the recovery in urban city-center areas, where the
effects of the COVID-19 pandemic were the most significant due to
offices being closed and the reduction in business travel. Since
the latest lifting of major restrictions in January, Management has
been pleased with the return of Guests to restaurants.
We have and always will be committed to the health and safety of
our guests, associates and franchise partners, and with the
continuation of the Company's Social Safely program, we will
continue to focus on delivering best in class experiences while
operating safe and clean restaurants across all of our
locations.
The effects of the global pandemic on supply chains will take
time to stabilize. Also impacting supply chains is the current
conflict in Europe, as
Ukraine and Russia are key global suppliers of wheat, corn
and vegetable oil. Multiple economic sectors reopening at once have
also created a significant labour shortage in North America. Management expects that this
labour shortage, combined with increases to minimum wage rates, may
lead to short term higher labour costs due to increased overtime
hours, retention pay programs and higher training costs as new
employees are brought onboard. The recovery and industry wide
labour shortages are also negatively impacting commodity food
prices and other input and support costs until supply and demand
dynamics normalize.
Management believes that Recipe is well positioned to continue
to increase its market share through its omni-channel customer
relationships and the continuation of its off-premise sales growth,
expanded and enhanced patios (including many that will operate for
three seasons). The actions taken throughout the COVID-19
disruption period have allowed the Company to generate positive
Adjusted EBITDA(2), positive operating cash flows and
enhance the strength of its balance sheet, which will enable the
Company to pursue strategic acquisitions and accelerate growth.
Focus on the short to medium term will include:
- Reopening restaurants that have been temporarily closed as a
result of the COVID-19 pandemic and providing exceptional service,
food, ambience and value that reinforces to customers what they
have been missing, while focusing on being an employer of choice in
Canada;
- Continue to practice amplified "Social Safely" safety protocols
across all of our corporate and franchise locations to protect the
health of our Guests, teammates and franchise partners. This
includes comprehensive protocols related to food safety, strict
standard operating procedures, independent third party audits and
our rigorous safety training programs;
- Continue to execute on our plans to support the expansion of
our multi-channel offerings for post-COVID success. This includes
the introduction of new restaurant layouts and designs with
separate entrances to facilitate delivery, takeout and curb-side
pick-up orders, tailored menus for dine-in and off-premise
experiences, as well as the investments in our restaurants to
comfortably extend outdoor patio season to three seasons;
- Actively negotiate early exit and permanent closure of
under-performing restaurants that were identified at the end of
2019 to strengthen each brand portfolio and improve the long term
Adjusted EBITDA(2) contribution rates of both the
Corporate and Franchise restaurant segments;
- Prepare Recipe's portfolio of brands for post-COVID success
including accelerating the growth of brands like Burger's Priest,
Fresh, Añejo and Blanco Cantina,
pursuing complementary brand acquisitions, expanding New York Fries
international franchising and rationalizing under-performing
brands;
- Continue to expand the Company's off-premise business,
including Ultimate Kitchens, for all brands with digital and mobile
order applications and brand appropriate features including
curb-side pick-up, preorder and pay, as well as other payment
convenience options; and
- Mitigate cost increases for food and other inputs, as well as
supply chain disruptions caused by the COVID-19 pandemic or the
current conflict in Europe,
through the Company's ability to leverage its significant sourcing
capabilities.
The foregoing description of Recipe's outlook is based on
management's current strategies and its assessment of the outlook
for the business and the Canadian restaurant industry as a whole
and may be considered to be forward‑looking information for
purposes of applicable Canadian securities legislation. Readers are
cautioned that actual results may vary. See "Forward‑Looking
Information" and "Risks & Uncertainties" for a description of
the risks and uncertainties that impact the Company's business and
that could cause actual results to vary.
(2)
|
This is a supplementary
financial measure. Please refer to "Non-GAAP Measures -
Supplementary Financial Measures" section of this press release for
a definition of this measure.
|
Non‑GAAP Measures
This press release makes reference to certain measures that are
not calculated in accordance with IFRS. These measures are
provided as additional information to complement IFRS measures by
providing further understanding of the Company's results of
operations from management's perspective. Accordingly, they should
not be considered in isolation nor as a substitute for analysis of
the Company's financial information reported under IFRS. The
Company uses the following non-GAAP measures to provide investors
with supplemental measures on its operating performance and thus
highlight trends in its core business that may not otherwise be
apparent when relying solely on IFRS financial measures: "System
Sales", "System Sales Growth", "E-Commerce System Sales", "SRS
Growth", "Adjusted EBITDA", "Adjusted EBITDA Margin on System
Sales" and "Free Cash Flow". The Company also believes that
securities analysts, investors and other interested parties
frequently use non‑GAAP measures in the evaluation of issuers. The
Company's management also uses non‑IFRS measures in order to
facilitate operating performance comparisons from period to period,
to prepare annual operating budgets, and to determine components of
management compensation. In addition, the Company believes that
securities analysts, investors and other parties frequently use
non-GAAP measures in the evaluation of issuers, including the
Company.
National Instrument 52-112 Non-GAAP and Other Financial
Measures Disclosure ("NI 52-112") prescribes disclosure
requirements that apply to certain non-IFRS measures known as
"specified financial measures". This section of this Press Release
provides a description and classification of the specified
financial measures as contemplated by NI 52-112 that the Company
uses in this press release.
Non-GAAP Financial Measures
A non-GAAP financial measure is a financial measure not
disclosed in the Company's financial statements that depicts the
Company's historical or expected future financial performance,
financial positions or cash flow and, with respect to its
composition, either excludes an amount that is included in, or
includes an amount that is excluded from, the composition of the
most directly comparable financial measures disclosed in the
Company's interim financial statements.
"Adjusted EBITDA" is a non-GAAP financial measure and is
defined as Operating Income adjusted to remove (i) depreciation and
amortization; (ii) amortization of deferred gain; (iii) impairment,
net of reversals, of restaurant assets and lease receivables; (iv)
restructuring and other; (v) net (gain) loss on early
buyout/cancellation of equipment rental contracts; (vi)
amortization of unearned conversion fees; (vii) net (gain) loss on
disposal of property, plant and equipment and other assets; (viii)
(gain) loss on settlement of lease liabilities; (ix) stock-based
compensation; * transaction costs; (xi) the Company's proportionate
share of equity accounted investment in joint ventures; (xii)
Interest income on Partnership units and KRIF units; and (xiii)
rent impact.
Adjusted EBITDA is used by management as a key measure to assess
the performance of its Corporate, Franchise, Retail and Catering
and Central segments and to make decisions on the allocation of
resources. Management believes that investors use this measure to
evaluate the health and profitability of each segment. This measure
is not a standardized measure prescribed by IFRS and therefore is
unlikely to be comparable to similar measures presented by other
companies. The most directly comparable IFRS financial measure is
Operating Income.
The following table provides reconciliations of Operating Income
and Adjusted EBITDA:
|
|
|
13 weeks
ended
|
|
|
March 27,
2022
|
|
March 28,
2021
|
|
|
|
|
|
|
|
Operating
Income
|
|
$
|
24.5
|
|
$
|
10.5
|
Adjustments
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
23.0
|
|
|
24.4
|
Amortization of deferred gain
|
|
|
(0.5)
|
|
|
(0.4)
|
Transaction costs (1)
|
|
|
0.1
|
|
|
—
|
Impairment reversals
|
|
|
(2.8)
|
|
|
—
|
Restructuring and other
|
|
|
0.5
|
|
|
1.1
|
Loss on early buyout/cancellation of equipment rental
contracts
|
|
|
0.5
|
|
|
0.3
|
Net
gain on disposal of property, plant and equipment and other
assets
|
|
|
|
|
|
|
Net
gain on settlement of lease liabilities
|
|
|
(0.3)
|
|
|
(0.1)
|
Stock based compensation
|
|
|
0.4
|
|
|
0.2
|
Proportionate share of joint venture results
(2)
|
|
|
—
|
|
|
0.4
|
Interest income on Partnership units and KRIF
|
|
|
2.9
|
|
|
1.8
|
Lease expenses for corporate restaurants and head office
locations (3)
|
|
|
(13.2)
|
|
|
(14.2)
|
Total
adjustments
|
|
$
|
8.2
|
|
$
|
13.4
|
|
|
|
|
|
|
|
Adjusted
EBITDA(4)
|
|
$
|
32.7
|
|
$
|
24.0
|
|
|
(1)
|
Transaction costs
represent acquisition related expenses.
|
(2)
|
The Company has equity
investments in certain restaurants at varying ownership interests.
This adjustment represents the increase or decrease of the
proportionate share of the income (loss) earned on the Company's
investment in these joint ventures.
|
(3)
|
In connection with the
adoption of IFRS 16 Leases, lease expenses are now recorded
in depreciation and interest expense. This adjustment includes
lease expenses in Adjusted EBITDA as management views lease expense
as an important component when evaluating the profitability of the
business.
|
(4)
|
Figures may not total
due to rounding.
|
"Free Cash Flow" is a non-GAAP financial measure and is
defined as Cash flows from operating activities less amounts
incurred for (i) purchases of property, plant and equipment; (ii)
interest paid on long-term debt and notes payable; (iii) net lease
payments; (iv) proceeds on disposal of property, plant and
equipment; (v) dividends paid on subordinate and multiple voting
common shares; and (vi) shares repurchased under the Normal Course
Issuer Bid ("NCIB").
Free Cash Flow is used by management to determine the Company's
cash available for debt repayments, investments in new restaurant
development and major renovations, other capital projects, to pay
and increase dividends to shareholders and to repurchase the
Company's subordinate voting shares. This measure is useful to
investors to determine the Company's cash available for
discretionary spending. This measure is not a standardized measure
prescribed by IFRS and therefore is unlikely to be comparable to
similar measures presented by other companies. The most directly
comparable IFRS financial measure is Cash flows from operating
activities.
The following table provides reconciliations from Cash flows
from operating activities to Free Cash Flow:
|
|
|
13 weeks
ended
|
(C$ millions
unless otherwise stated)
|
|
|
March 27,
2022
|
|
|
March 28,
2021
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
$
|
5.3
|
|
$
|
21.4
|
Purchases of property,
plant and equipment
|
|
|
|
|
|
|
Interest paid on
long-term debt and notes payable
|
|
|
(2.5)
|
|
|
(3.7)
|
Net lease payments
(1).
|
|
|
(18.7)
|
|
|
(20.0)
|
Proceeds on disposal of
property, plant and equipment
|
|
|
2.4
|
|
|
—
|
Free Cash Flow
(2)
|
|
$
|
(20.0)
|
|
$
|
(6.4)
|
|
|
(1)
|
Net lease payments
consist of lease liabilities paid, net of lease payments
received.
|
(2)
|
Figures may not total
due to rounding.
|
Non-GAAP Ratios
A non-GAAP ratio is a financial measure disclosed in the form of
a ratio, fraction, percentage or similar representation that is not
disclosed in the Company's financial statements and that has a
non-GAAP financial measure as one or more of its components.
"Adjusted EBITDA Margin on System Sales" is a non-GAAP
ratio and is defined as Adjusted EBITDA divided by
System Sales. Adjusted EBITDA Margin on System Sales is used
by management to determine profitability. This measure is used by
investors to determine the operating efficiency of the Company.
This measure is not a standardized measure prescribed by IFRS and
therefore is unlikely to be comparable to similar measures
presented by other companies.
Supplementary Financial Measures
A supplementary financial measure is a financial measure that is
not disclosed in the Company's consolidated financial statements,
and is, or is intended to be, disclosed on a periodic basis to
depict the historical or expected future financial performance,
financial position or cash flows.
The following are the supplementary financial measures used in
this press release:
"System Sales" represents top‑line sales from restaurant
guests at both corporate owned and franchise restaurants including
take‑out and delivery customer orders. System Sales includes sales
from both established restaurants as well as new restaurants.
System Sales also includes sales received from its food processing
and distribution division. System Sales is not the same as sales
under IFRS as it includes the sales from franchise restaurants
which are not recorded in the financial statements of the Company.
Management believes System Sales provides meaningful information to
investors regarding the size of Recipe's restaurant network, the
total market share of the Company's brands sold in restaurant and
grocery and the overall financial performance of its brands and
restaurant owner base, which ultimately impacts Recipe's
consolidated financial performance.
"System Sales Growth" is a metric used in the restaurant
industry to compare System Sales over a certain period of time,
such as a fiscal quarter, for the current period against System
Sales in the same period in the previous year.
"SRS Growth" is a metric used in the restaurant industry
to compare sales earned in established locations over a certain
period of time, such as a fiscal quarter, for the current period
against sales in the same period in the previous year. SRS Growth
helps explain what portion of sales growth can be attributed to
growth in established locations and what portion can be attributed
to the opening of net new restaurants. Recipe defines SRS Growth as
the percentage increase or decrease in sales during a period of
restaurants open for at least 24 complete fiscal months relative to
the sales of those restaurants during the same period in the prior
year. Recipe's SRS Growth results excludes Milestone's restaurants
which were sold in 2021, and sales from international operations of
New York Fries.
"E-commerce System Sales" represent System Sales
made through the Company's web and mobile ordering platforms for
its brands or aggregators for delivery and pick up.
"Net Debt" is composed of current and long-term
portions of long-term debt (excluding deferred financing fees) net
of cash.
Forward-Looking
Information
Certain statements in this press release may constitute
"forward-looking information" or "forward-looking statements"
within the meaning of applicable Canadian securities legislation.
Such statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of the Company or the industry in which they operate
to be materially different from any future results, performance or
achievements expressed or implied by such forward looking
statements. When used in this press release, such statements use
words such as "may", "will", "expect", "believe", "plan" and other
similar terminology. These statements are based on opinions,
assumptions and estimates made by the Company in light of its
experience and perception of historical trends, current conditions
and expected future developments, as well as factors that the
Company believes are appropriate and reasonable in the
circumstances, but there are no assurance that such estimates and
assumptions will prove to be correct. These statements also reflect
management's current expectations regarding future events and
operating performance and speak only as of the date of this press
release. These forward-looking statements involve a number of risks
and uncertainties, including those related to: (a) the Company's
ability to maintain profitability and manage its growth including
SRS Growth, System Sales Growth, increases in net income, Adjusted
EBITDA, Adjusted EBITDA Margin on System Sales and Free Cash Flow;
(b) competition in the industry in which the Company operates; (c)
the general state of the economy; (d) integration of acquisitions
by the Company; and (e) risk of future legal proceedings against
the Company. These risk factors and others are discussed in detail
under the heading "Risk Factors" in the Company's Annual
Information Form dated March 22, 2022. New risk factors may arise
from time to time and it is not possible for management of the
Company to predict all of those risk factors or the extent to which
any factor or combination of factors may cause actual results,
performance or achievements of the Company to be materially
different from those contained in forward-looking statements. Given
these risks and uncertainties, investors should not place undue
reliance on forwarding-looking statements as a prediction of actual
results. Although the forward-looking statements contained in this
press release are based upon what management believes to be
reasonable assumptions, the Company cannot assure investors that
actual results will be consistent with these forward-looking
statements. These forward-looking statements are made as of the
date of this press release. The Company does not undertake to
update any forward-looking information contained herein except as
required by applicable securities laws.
The financial performance of the Company is subject to a number
of factors that affect the commercial food service industry
generally and the full‑service restaurant and limited‑service
restaurant segments of this industry in particular. The Canadian
restaurant industry is intensely competitive with respect to price,
value proposition, service, location and food quality. There are
many well‑established competitors, including those with greater
financial and other resources than the Company. Competitors include
national and regional chains, as well as numerous individually
owned restaurants. Recently, competition has increased in the
mid‑price, full‑service, casual dining segment of this industry in
which many of the Company's restaurants operate. Some of the
Company's competitors may have restaurant brands with longer
operating histories or may be better established in markets where
the Company's restaurants are located or may be located. If the
Company is unable to successfully compete in the segments of the
Canadian restaurant industry in which it operates, the financial
condition and results of operations of the Company may be adversely
affected.
The Canadian restaurant industry business is also affected by
changes in demographic trends, traffic patterns, and the type,
number, locations of competing restaurants and public health
issues. In addition, factors such as inflation, increased food,
labour and benefit costs, and the availability of experienced
management and hourly employees may adversely affect the restaurant
industry in general and the Company in particular. Food costs and
availability are also influenced by factors and events outside of
the jurisdictions the Company operates in, such as wars. Changing
consumer preferences and discretionary spending patterns and
factors affecting the availability of certain foodstuffs could
force the Company to modify its restaurant content and menu and
could result in a reduction of revenue. Even if the Company is able
to successfully compete with other restaurant companies, it may be
forced to make changes in one or more of its concepts in order to
respond to changes in consumer tastes or dining patterns. If the
Company changes a restaurant concept, it may lose additional
customers who do not prefer the new concept and menu, and it may
not be able to attract a sufficient new customer base to produce
the revenue needed to make the restaurant profitable. Similarly,
the Company may have different or additional competitors for its
intended customers as a result of such a concept change and may not
be able to successfully compete against such competitors. The
Company's success also depends on numerous other factors affecting
discretionary consumer spending, including general economic
conditions, disposable consumer income, consumer confidence and
consumer concerns over food safety, the genetic origin of food
products, public health issues and related matters. Adverse changes
in these factors could reduce guest traffic or impose practical
limits on pricing, either of which could reduce revenue and
operating income, which would adversely affect the Company.
The Company's unaudited condensed consolidated interim financial
statements for the 13 weeks ended March 27, 2022 and
Management's Discussion and Analysis are available under the
Company's profile on SEDAR at www.sedar.com.
Related Communications
Frank Hennessey, Chief Executive
Officer and Ken Grondin, Chief
Financial Officer, will hold a teleconference with the investment
community to discuss 2022 first quarter results at 9:00 am Eastern Time on Thursday May 5, 2022.
To access the webcast, please visit
https://produceredition.webcasts.com/starthere.jsp?ei=1540219&tp_key=94b33a1202.
A replay will be available via the same URL until midnight on
May 26, 2022.
To dial in by telephone, please call (416) 764-8609 or
1-888-390-0605, five to ten minutes prior to the start time. The
Conference ID is 75784250. A telephone replay of the call will be
available until midnight on May 26,
2022. To access the replay, please dial (416) 764-8677 or
1-888-390-0541 and enter passcode 784250#.
About Recipe
Founded in 1883, RECIPE Unlimited Corporation is Canada's largest full-service restaurant
company. The Company franchises and/or operates some of the most
recognized brands in the country including Swiss Chalet, Harvey's,
St-Hubert, The Keg, Montana's, Kelseys, East Side Mario's, New
York Fries, Fionn MacCool's, Bier Markt, The Landing Group of
Restaurants, Original Joe's, State & Main, Elephant &
Castle, The Burger's Priest, The Pickle Barrel, Marigolds &
Onions, Blanco Cantina, Añejo, Fresh
and Ultimate Kitchens.
RECIPE's iconic brands have established the organization as a
nationally recognized franchisor of choice. As at March 27,
2022, Recipe had 21 brands and 1,251 restaurants, 82% of which are
operated by franchisees and joint venture partners, operating in
several countries including Canada, USA,
Saudi Arabia, India and the UAE. RECIPE's shares trade
on the Toronto Stock Exchange under the ticker symbol RECP. More
information about the Company is available at
www.recipeunlimited.com.
SOURCE Recipe Unlimited Corp.