TORONTO, Dec. 30 /CNW/ - Pizza Pizza Limited ("Pizza Pizza") reported its
annual consolidated financial results today for the fiscal year ended
October 2, 2005. The annual financial statements and the related Management's
Discussion and Analysis are available at www.sedar.com, under the Pizza Pizza
Royalty Income Fund company profile.
This is the initial filing for Pizza Pizza Limited, a privately-held
company, following the initial public offering by the Pizza Pizza Royalty
Income Fund (the "Fund"). The Pizza Pizza consolidated financial statements
consolidate Pizza Pizza Royalty Limited Partnership, in which the Fund holds
an effective 80% interest. The Fund has previously filed quarterly financial
statements for the period ended September 30, 2005, which are available at
www.sedar.com and www.pizzapizzaroyaltyincomefund.com. Subsequent to this
filing, Pizza Pizza Limited is changing its fiscal year date to end on the
Sunday closest to December 31st. Pizza Pizza and the Fund will then have
coterminous year end dates.
Same store sales at Pizza Pizza restaurants grew by 6% for the quarter
ended September 30, 2005, over the same quarter in 2004. These results are
consistent with the 5.7% total same store sales growth for Pizza Pizza's
fiscal year 2005, when compared with 5.9% for the fiscal year 2004.
Pizza Pizza opened six traditional and ten non-traditional locations
during fiscal 2005; three traditional locations and one non-traditional
location closed during the fiscal year. In 2006, management of Pizza Pizza
expects to grow the number of restaurants in Ontario by 3% and to continue
researching potential expansion opportunities outside its predominantly
Ontario market, with potential expansion coming either through organic growth
or acquisitions. Additionally, Pizza Pizza expects to continue franchising its
company-owned restaurants.
Pizza Pizza continues its innovative history by recently introducing the
electronic Pizza Pizza Club Card, which allows customers to receive prizes and
discount offerings in addition to loading the card for personal use or to give
as a gift. The Club Card is part of Pizza Pizza's strategy to encourage
customers to visit our re-imaged restaurants. With over 90% of our traditional
restaurants expanded or relocated within the last five years and the final 10%
(approximately 35 locations) to be completed in 2006, Pizza Pizza offers
expanded dine-in capacity, thereby targeting additional day-parts and allowing
for additional product offerings to enable restaurants to increase same store
sales. With this increased network capacity and a continued focus on our
promotional campaigns, Pizza Pizza is well-positioned for continued growth and
to strengthen its position as "Ontario's No. 1 Pizza".
Selected Financial Data
The selected financial data set forth below should be read in conjunction
with the consolidated financial statements and related notes of Pizza Pizza
Limited for the fiscal year ended October 2, 2005, and should be read with
reference to the related Management's Discussion and Analysis.
<<
Pizza Pizza Limited
Consolidated financial data and EBITDA(1) calculation
For the 53-week For the 52-week
period ended period ended
October 2, 2005 September 26, 2004
----------------------------------------
(in thousands of dollars)
System Sales (52 weeks)(x) $ 334,677 $ 315,983
Same store sales growth 5.7% 5.9%
Restaurants:
Traditional 341 338
Non-traditional 165 156
New restaurants opened 16 18
Restaurants closed 4 7
Revenue
Food sales 139,062 127,873
Royalties, franchise fees
and other related revenue 21,063 19,764
Other income 1,009 429
----------------------------------------
161,134 148,066
Cost of food sales and general
and administrative (net of
amortization) 139,782 140,407
----------------------------------------
EBITDA(1) $ 21,352 $ 7,659
Reconciliation of EBITDA to
Net Earnings
EBITDA $ 21,352 $ 7,659
Add (deduct)
Charitable contribution (20,000) 0
Non-recurring employee and
franchisee bonuses and
retention payments (7,143) 0
Structuring costs (11,850)
Non-controlling interest in
Partnership earnings 6,102 0
Amortization (6,773) (7,005)
Interest expense on loan
from the Fund (430) 0
Interest on long-term debt (182) (304)
Interest income 927 433
Gain on sale of company stores 1,574 2,730
Provision for income taxes
Current (21,200) 0
Future 30,644 (1,281)
----------------------------------------
Net earnings (loss) for the
period $ (6,979) $ 2,232
----------------------------------------
(x)System sales reported are for the 52 weeks ended September 25,
2005 in order to be comparable to the prior year
(1) "EBITDA" is not a recognized measure under Canadian generally
accepted accounting principles. References to EBITDA are to earnings
determined in accordance with generally accepted accounting principles
applicable to the financial statements before amounts for interest, taxes
and depreciation and amortization are included in the earnings.
Pizza Pizza believes that, in addition to net income, EBITDA is a useful
supplemental measure in evaluating its performance as it provides
investors with an indication of cash available for debt service, working
capital needs and capital expenditures. Investors are cautioned, however,
that EBITDA should not be construed as an alternative to the statement of
cash flows as a measure of liquidity and cash flows. The method of
calculating EBITDA for the purposes of this annual report may differ from
that used by other issuers and, accordingly, EBITDA in this annual report
may not be comparable to EBITDA used by other issuers.
Pizza Pizza is one of Canada's most popular and successful pizza
restaurant operations. The company is guided by a mission to provide the "best
food, made especially for you" and a focus on quality ingredients, customer
service, community contribution and continual innovation.
Pizza Pizza's trust units are listed on the Toronto Stock Exchange
(PZA.UN). For further information, please visit
www.pizzapizzaroyaltyincomefund.com or www.pizzapizza.ca.
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%SEDAR: 00022262EF
