Toronto Stock Exchange: BPF.UN
VANCOUVER, BC , Dec. 16, 2020 /CNW/ - Boston Pizza Royalties Income Fund (the " Fund ") (TSX: BPF.UN) announced today a cash distribution to unitholders of $0.065 per unit for December 2020 (the " December 2020 Distribution ") and a special one-time cash distribution to unitholders of $0.20 per unit (the " Special Distribution "). Both the December 2020 Distribution and the Special Distribution will be paid on January 29, 2021 to unitholders of record at the close of business on December 31, 2020.
In deciding to declare the Special Distribution, the trustees of the Fund considered, among other factors, the recent financial performance of the Fund, Boston Pizza International Inc. (" BPI ") and Boston Pizza restaurants in the Fund's royalty pool, the Fund's cash position and debt repayment obligations, internal financial projections for the Fund, BPI and Boston Pizza restaurants in the Fund's royalty pool for the remainder of 2020 and 2021, and the increase in the effective tax rate that would be paid by the Fund if the Fund does not distribute sufficient cash in respect of 2020.
The trustees of the Fund continue to closely monitor BPI's and Boston Pizza Canada Limited Partnership's business as the COVID-19 pandemic continues and consider the best interests of the Fund and its stakeholders. While the COVID-19 pandemic persists, the trustees of the Fund expect that Franchise Sales 1 and SRS 2 at Boston Pizza restaurants and resulting Royalty 3 , Distribution Income 3 and cash that is available for distribution to unitholders will continue to be adversely affected.
The declaration of the Special Distribution is a departure from the Fund's historical distribution practices and is not expected to become a regular practice in future years. However, the trustees believe that declaring the Special Distribution at this time is a prudent approach to deal with the challenges presented in 2020 by the ongoing COVID-19 pandemic. The trustees of the Fund will continue to closely monitor the Fund's available cash balances and distribution levels, based on its policy of stable and sustainable distribution flow to unitholders.
Certain information in this press release constitutes "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, BPI, their respective subsidiaries, 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. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Fund or its trustees expect or anticipate will or may occur in the future, including such things as, the Special Distribution not being expected to become a regular practice in future years, the Fund continuing to review distribution levels, the Trustees of the Fund continuing to closely monitor BPI's and BP Canada LP's business, the trustees expecting that Franchise Sales and SRS at Boston Pizza Restaurants and resulting Royalty, Distribution Income and cash available for distribution to unitholders will continue to be adversely affected, and other such matters are forward-looking information. When used in this press release, forward-looking information may include words such as "anticipate", "estimate", "may", "will", "expect", "believe", "plan", "should", "continue" and other similar terminology. The material factors and assumptions used to develop the forward-looking information contained in this press release include the following: the COVID-19 pandemic will continue to negatively impact the restaurant industry, Franchise Sales, SRS and the resulting Royalty, Distribution Income and cash available for distribution to unitholders. Risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by the forward-looking information contained herein, relate to (among others) competition, demographic trends, consumer preferences and discretionary spending patterns, business and economic conditions, legislation and regulation, reliance on operating revenues, accounting policies and practices, the results of operations and financial condition of the Fund, BPI and their respective subsidiaries, as well as those factors discussed under the heading "Risks and Uncertainties" in the most recent Annual Information Form of the Fund. In particular, the continued payment of monthly distributions will be dependent on the financial performance of the Fund and BPI, and the Fund cautions that monthly distributions could be negatively impacted by the reintroduction or continuation of shutdowns on Boston Pizza restaurants due to the COVID-19 pandemic. This information reflects current expectations regarding future events and operating performance and speaks only as of the date of this press release. Except as required by law, neither the Fund nor BPI assumes any obligation to update previously disclosed forward-looking information. For a complete list of the risks associated with forward-looking information and the Fund's business, please refer to the "Risks and Uncertainties" and "Note Regarding Forward-Looking Information" sections included in the most recent Annual Information Form of the Fund available at www.sedar.com and www.bpincomefund.com .
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1
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" Franchise Sales " is the basis upon which Royalty and Distribution Income are payable, and means the gross revenue: (i) of the corporate Boston Pizza restaurants in Canada owned by BPI that are in the Fund's royalty pool; and (ii) reported to Boston Pizza Canada Limited Partnership (" BP Canada LP ") by franchised Boston Pizza restaurants in Canada that are in the Fund's royalty pool, without audit or other form of independent assurance, and in the case of both (i) and (ii), after deducting revenue from the sale of liquor, beer, wine and revenue from BP Canada LP approved national promotions and discounts and excluding applicable sales and similar taxes. Nevertheless, BP Canada LP periodically conducts audits of the Franchise Sales reported to it by its franchisees, and the Franchise Sales reported herein include results from sales audits of earlier periods.
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2
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" Same Restaurant Sales " or " SRS " is the change in gross revenue of Boston Pizza restaurants as compared to the gross revenue for the same period in the previous year for Boston Pizza restaurants that have been open for a minimum 24 months. SRS is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Management believes SRS provides investors useful information regarding the change in gross sales of Boston Pizza restaurants.
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3
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Boston Pizza Royalties Limited Partnership licenses BPI the right to use various Boston Pizza trademarks in return for BPI paying a royalty equal to 4% of Franchise Sales of Boston Pizza restaurants (the " Royalty ") in the Fund's royalty pool. " Distribution Income " is income received indirectly by the Fund on Class 1 LP Units and Class 2 LP Units of BP Canada LP.
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The trustees of the Fund have approved the contents of this news release.
® Boston Pizza Royalties Limited Partnership. All Boston Pizza registered Canadian trademarks and unregistered Canadian trademarks containing the words "Boston", "BP", and/or "Pizza" are trademarks owned by the Boston Pizza Royalties Limited Partnership and licensed by the Boston Pizza Royalties Limited Partnership to Boston Pizza International Inc.
© Boston Pizza International Inc. 2020
SOURCE Boston Pizza Royalties Income Fund
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