TORONTO, ONTARIO -- (Marketwire) -- 02/17/11 -- Pizza Pizza Royalty Income Fund (the "Fund") (TSX: PZA.UN) today announced a cash distribution of $0.0584 per unit for the month of February 2011. The distribution will be payable to unitholders of record at the close of business on February 28, 2011, and will be paid on March 15, 2011.
The Fund also announced the following unaudited financial results for the fourth quarter and year ended December 31, 2010.
3 months ended 12 months ended
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December December December December
31, 2010 31, 2009 31, 2010 31, 2009
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(in thousands of dollars,
except number of
restaurants and per unit
amounts)
Restaurants in Royalty Pool 671 637 671 637
Same store sales growth 1.3% -4.0% 0% -5.9%
System sales reported by
Pizza Pizza restaurants in
the Royalty Pool $ 101,920 $ 98,340 $ 379,623 $ 370,115
System sales reported by
Pizza 73 restaurants in the
Royalty Pool 20,410 20,484 76,225 81,297
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$ 122,330 $ 118,824 $ 455,848 $ 451,412
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Royalty - 6% on Pizza Pizza
system sales $ 6,115 $ 5,900 $ 22,777 $ 22,207
Royalty - 9% on Pizza 73
system sales 1,837 1,844 6,860 7,317
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Total Royalty on System
Sales 7,952 7,744 29,637 29,524
Partnership interest and
admin. expenses (888) (868) (3,230) (3,343)
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Earnings available for
distribution to the Fund
and Pizza Pizza Limited 7,064 6,876 26,407 26,181
Pizza Pizza Limited's
interest (2,306) (2,156) (8,739) (8,298)
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4,758 4,720 17,668 17,883
Interest income 450 450 1,800 1,800
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Net earnings before non-cash
future income tax expense $ 5,208 $ 5,170 $ 19,468 $ 19,683
Provision for (recovery of)
future income taxes - - 248 (293)
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Net earnings $ 5,208 $ 5,170 $ 19,220 $ 19,976
Basic earnings per Fund unit
excluding the impact of
non-cash future income tax
expense $ 0.239 $ 0.237 $ 0.892 $ 0.902
Basic earnings per Fund unit$ 0.239 $ 0.237 $ 0.881 $ 0.916
Diluted earnings per Fund
unit $ 0.239 $ 0.237 $ 0.881 $ 0.912
Distributions declared $ 5,073 $ 5,073 $ 20,291 $ 20,291
Distributions per Fund unit $ 0.233 $ 0.233 $ 0.930 $ 0.930
Payout ratio 97% 98% 104% 103%
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SALES
Total sales for restaurants included in the pool for which a royalty is payable (the "Royalty Pool") in 2010 increased 1% to $455.8 million compared to $451.4 million in 2009. For the fourth quarter, Royalty Pool sales increased 2.9% to $122.3 million compared to $118.8 million for the same quarter in 2009.
The fourth quarter 2010 same store sales growth ("SSSG") was 1.3% compared to the same quarter in 2009. By brand, SSSG in the fourth quarter for Pizza Pizza was 1.1% and was 2.2% for Pizza 73. For the year, SSSG was flat (0%) compared to 2009, with Pizza Pizza reporting 2010 SSSG of 0.9% and Pizza 73 reporting negative SSSG of 4.4%.
As previously announced, the number of restaurants in the Royalty Pool increased from 671 to 695 on the January 1, 2011 adjustment date, to include the royalties from 24 net, new restaurants.
DISTRIBUTIONS
The Fund declared distributions of $5.1 million or $0.233 per unit for the quarter ended December 31, 2010, equating to a 97% payout ratio; for the 2009 comparable quarter the Fund declared distributions of $5.1 million or $0.233 per unit for a payout ratio of 98%. For the year, the Fund declared distributions of $20.3 million or $0.93 per unit for a payout ratio of 104% compared to a 103% payout ratio in 2009.
Pizza Pizza Royalty Limited Partnership increased its working capital balance by $165,000 during the fourth quarter. For the year, $1.2 million of the available reserve was used principally to fund the payment of distributions, bringing the working capital reserve balance to $1.2 million at December 31, 2010.
The audited, consolidated financial statements of the Fund, together with the related Management's Discussion and Analysis, will be available on or before March 30, 2011.
Forward Looking Statements
Certain statements in this report may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this report, such statements include such words as "may", "will", "expect", "believe", "plan", and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this report. These forward-looking statements involve a number of risks and uncertainties. The following are some factors that could cause actual results to differ materially from those expressed in or underlying such forward-looking statements: competition; changes in demographic trends; changing consumer preferences and discretionary spending patterns; changes in national and local business and economic conditions; legislation and governmental regulation; accounting policies and practices; changes in the Fund's distribution policy, tax position and availability and use of deductions and related structuring decisions; and the results of operations and financial condition of the Fund. The foregoing list of factors is not exhaustive and should be considered in conjunction with the other risks and uncertainties described in the Fund's Annual Information Form. The Fund assumes no obligation to update these forward looking statements, except as required by applicable securities laws.
Contacts:
Pizza Pizza Limited
Curt Feltner
Chief Financial Officer
(416) 967-1010
cfeltner@pizzapizza.ca
www.pizzapizza.ca and www.pizza73.com or www.sedar.com
