The Keg Royalties Income Fund Reports First Quarter 2021 Financial Results

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Not for distribution to U.S. Information wire companies or dissemination within the U.S.

VANCOUVER, British Columbia, Might 11, 2021 (GLOBE NEWSWIRE) — The Keg Royalties Revenue Fund (the “Fund”) (TSX: KEG.UN) and Keg Eating places Ltd (“KRL”) are happy to announce the monetary outcomes of the Fund for the primary quarter of 2021.

HIGHLIGHTS

KRL’s eating places closed for 53.4% of the quarter
KRL system gross sales down 52.4% to $68.6M for the 13-week interval
Royalty Pool gross sales down 51.9% to $68.6M for the quarter
Distributable money down 76.7% to 12.0 cents/Fund unit for the quarter
Payout ratio was 140.6% for the primary quarter of 2021

Royalty Pool gross sales reported by the 106 Keg eating places within the Royalty Pool had been $68,575,000 for the quarter, a lower of $74,078,000 or 51.9% from the comparable quarter of the prior 12 months.

Royalty revenue decreased by $2,963,000 or 51.9% from $5,706,000 within the three months ended March 31, 2020 to $2,743,000 within the three months ended March 31, 2021.

Distributable money out there to pay distributions to public unitholders decreased by $3,184,000 from $4,153,000 (36.6 cents/Fund unit) to $969,000 (8.5 cents/Fund unit) for the quarter. Distributions paid to Fund unitholders decreased by $1,859,000 from $3,222,000 (28.4 cents/Fund unit) to $1,362,000 (12.0 cents/Fund unit) through the first quarter of the present 12 months. Throughout the first quarter of 2020, previous to any materials influence on gross sales from the Covid-19 pandemic, distributions paid to Fund unitholders had been 9.46 cents/Fund unit monthly. On account of the lack of gross sales from authorities mandated restaurant closures in early 2021, distributions to Fund unitholders had been diminished to five.0 cents/Fund unit for the month of January 2021, and three.5 cents/Fund unit for every of the months of February and March of 2021. The payout ratio for the quarter was 140.6% as in contrast with 77.6% for the comparable quarter of the prior 12 months.

The Fund stays financially effectively positioned with money available of $2,549,000 and a optimistic working capital steadiness of $3,256,000 as at March 31, 2021.

“As soon as once more, the headwinds offered by the COVID-19 pandemic and the provincial governments’ associated restrictions on full-service eating have been the driving forces behind our disappointing gross sales for the quarter.” mentioned David Aisenstat, CEO of Keg Eating places Ltd. “It seems extremely unlikely that almost all Canadian eating places will see any significant reduction from the total and partial shutdowns earlier than the tip of June, so our expectations for the second quarter stay comparatively low. On the brighter aspect, the place eating has returned in different international locations, together with the U.S., eating places have been extraordinarily busy. Our perception is the pent-up demand and the will for individuals to get again out within the ‘actual’ world will result in a swift and powerful restoration for eating places in Canada as effectively. With our robust aggressive place and dependable friends, we’re hopeful that The Keg specifically will see very strong gross sales recoveries by means of the summer time and the steadiness of 2021.”

FINANCIAL HIGHLIGHTS

($000’s besides per unit quantities)	Jan. 1 to Mar. 31, 2021			Jan. 1 to Mar. 31, 2020

Eating places within the Royalty Pool		106			106
Royalty Pool gross sales ⁽¹⁾	$	68,575		$	142,653
Royalty revenue ⁽²⁾	$	2,743		$	5,706
Curiosity revenue ⁽³⁾		1,054			1,070
Complete revenue	$	3,797		$	6,776
Administrative bills ⁽⁴⁾		(105	)		(98	)
Curiosity and financing bills ⁽⁵⁾		(97	)		(141	)
Working revenue	$	3,595		$	6,537
Distributions to KRL ⁽⁶⁾		(1,844	)		(2,675	)
Revenue earlier than honest worth achieve (loss) and revenue taxes	$	1,751		$	3,862
Honest worth achieve (loss) ⁽⁷⁾		(7,051	)		32,600
Revenue tax restoration (expense) ⁽⁸⁾		(473	)		(883	)
Revenue (loss) and complete revenue (loss)	$	(5,773	)	$	35,579
Distributable money earlier than SIFT tax ⁽⁹⁾	$	1,426		$	5,175
Distributable money ⁽¹⁰⁾	$	969		$	4,153
Distributions to Fund unitholders ⁽¹¹⁾	$	1,362		$	3,222
Payout ratio ⁽¹²⁾		140.6	%		77.6	%
Per Fund unit info ⁽¹³⁾
Revenue earlier than honest worth achieve (loss) and revenue taxes	$	.154		$	.340
Revenue (loss) and complete revenue (loss)	$	(.508	)	$	3.134
Distributable money earlier than SIFT tax ⁽⁹⁾	$	.126		$	.456
Distributable money ⁽¹⁰⁾	$	.085		$	.366
Distributions to Fund unitholders ⁽¹¹⁾	$	.120		$	.284

Notes:
⁽¹⁾	Royalty Pool gross sales are the product sales reported by Keg Eating places included within the Royalty Pool in any interval. As of March 31, 2021, the Royalty Pool contains 106 Keg eating places, 51 of that are owned and operated by KRL and its subsidiaries, (41 in Canada and 10 within the United Sates), and 55 Keg eating places that are owned and operated by Keg franchisees (all of that are in Canada).
⁽²⁾	The Fund, not directly by means of The Keg Rights Restricted Partnership (the “Partnership”), earns royalty revenue equal to 4% of product sales of Keg eating places within the Royalty Pool.
⁽³⁾	The Fund straight earns curiosity revenue on the $57.0 million Keg Mortgage, with curiosity revenue accruing at 7.5% each year, payable month-to-month.
⁽⁴⁾	The Fund, not directly by means of the Partnership, incurs administrative bills and curiosity on the working line of credit score, to the extent utilized.
⁽⁵⁾	The Fund, not directly by means of The Keg Holdings Belief (the “Belief”), incurs curiosity expense on the $14.0 million time period mortgage and amortization of deferred financing expenses.
⁽⁶⁾	Represents the distributions of the Partnership attributable to KRL through the respective durations on the Class A, entitled Class B, and Class D Partnership models (“Exchangeable models”) and Class C Partnership models held by KRL. The Exchangeable models are exchangeable into Fund models on a one-for-one foundation. These distributions are offered as curiosity expense within the monetary statements. (7)Honest worth achieve (loss) is the non-cash lower or improve available in the market worth of the Exchangeable models held by KRL through the respective interval. Exchangeable models are labeled as a monetary legal responsibility below IFRS. The Fund is required to find out the honest worth of that legal responsibility on the finish of every reporting interval and modify for any improve or lower, considering the sale of any Exchangeable models and Further Entitlements throughout the identical interval.
⁽⁸⁾	Revenue taxes embrace the Specified Funding Circulation-through Belief tax (“SIFT tax”) expense, and both a non-cash deferred tax expense or deferred tax restoration. The deferred tax expense or restoration primarily outcomes from variations in revenue recognition between the Fund’s accounting strategies and enacted tax legal guidelines. Additionally it is partially on account of momentary variations between accounting and tax bases of the Keg Rights owned by the Partnership.
⁽⁹⁾	Distributable money earlier than SIFT tax is outlined because the periodic money flows from working actions as reported within the IFRS condensed consolidated monetary statements, together with the results of modifications in non-cash working capital, plus SIFT tax paid (together with present 12 months instalments), much less curiosity and financing charges paid on the time period mortgage, much less the Partnership distributions attributable to KRL by means of its possession of Exchangeable models. Distributable money earlier than SIFT tax is a non-IFRS monetary measure that doesn’t have a standardized that means prescribed by IFRS, and subsequently will not be akin to related measures offered by different issuers.
⁽¹⁰⁾	Distributable money is the amount of money out there for distribution to the Fund’s public unitholders and is calculated as distributable money earlier than SIFT tax, much less present 12 months SIFT tax expense. Distributable money is a non-IFRS monetary measure that doesn’t have a standardized that means prescribed by IFRS, and subsequently will not be akin to related measures offered by different issuers. Nonetheless, the Fund believes that distributable money, each earlier than and after SIFT tax, offers helpful info relating to the amount of money out there for distribution to the Fund’s public unitholders.
⁽¹¹⁾	Distributions to Fund unitholders embrace all common month-to-month money distributions paid to Fund unitholders throughout a interval and any particular distributions, both declared or paid, to Fund unitholders in the identical interval.
⁽¹²⁾	Payout ratio is computed because the ratio of mixture money distributions paid through the interval plus any particular distributions declared or paid throughout the identical interval (numerator) to the combination distributable money of the interval (denominator).
⁽¹³⁾	All per unit quantities are calculated based mostly on the weighted common variety of Fund models excellent, that are these models held by public unitholders through the respective interval. The weighted common variety of Fund models excellent for the three months ended March 31, 2021 had been 11,353,500 (three months ended March 31, 2020 – 11,353,500).

The Fund (TSX: KEG.UN) is a restricted function, open-ended belief established below the legal guidelines of the Province of Ontario that, by means of The Keg Rights Restricted Partnership, owns sure emblems and different associated mental property utilized by Keg Eating places Ltd. (“KRL”). In trade to be used of these emblems, KRL pays the Fund a royalty of 4% of product sales of Keg eating places included within the royalty pool.

Vancouver-based KRL is the main operator and franchisor of steakhouse eating places in Canada and has a considerable presence in choose regional markets in america. KRL continues to function The Keg restaurant system and increase that system by means of the addition of each company and franchised Keg steakhouses. KRL has been named one of many “50 Greatest Employers in Canada” for the previous seventeen years by Aon Hewitt. For extra info on our model, go to www.kegsteakhouse.com.

This press launch could comprise sure “ahead wanting” statements reflecting The Keg Royalties Revenue Fund’s present expectations within the informal eating phase of the restaurant meals business. Traders are cautioned that every one ahead wanting statements contain dangers and uncertainties, together with these regarding the Keg’s capacity to proceed to appreciate historic identical retailer gross sales progress, modifications in market and present competitors, new aggressive developments, and potential downturns in financial situations usually. Further info on these and different potential elements that would have an effect on the Fund’s monetary outcomes are detailed in paperwork filed once in a while with the provincial securities commissions in Canada.

This press launch shall not represent a proposal to promote or the solicitation of a proposal to purchase, which can be made solely via the prospectus, nor shall there be any sale of the Fund models in any state, province or different jurisdiction through which such provide, solicitation or sale can be illegal previous to registration or qualification below the securities legal guidelines of any state, province or jurisdiction. The Keg Royalties Revenue Fund models haven’t been, and won’t be registered below the U.S. Securities Act of 1933, as amended and will not be provided or offered in america absent registration or an software for exemption from the registration requirement below U.S. securities legal guidelines.

The Trustees of the Fund have authorised the contents of this press launch.

For additional info: Neil Maclean, Chief Monetary Officer Tel: (604) 821-6416 neilm@kegrestaurants.com www.kegincomefund.com