MTY Food Group Inc.
TSX VENTURE : MTY

MTY Food Group Inc.

July 23, 2009 11:01 ET

MTY Food Group Inc.: Second Quarter 2009 Results

MONTREAL, QUEBEC--(Marketwire - July 23, 2009) - MTY Food Group Inc. (MTY)(TSX VENTURE:MTY), franchisor and operator of over 1,500 quick service restaurants, reported today its operating results for the six month period ended May 31, 2009.

MTY reported a net income of $5.10 million or $0.27 per share ($0.27 per fully diluted share) compared to a net income of $4.40 million or $0.23 per share ($0.23 per fully diluted share) for the same period last year, representing a net income increase of 16%. The increase in net income is mainly attributed to the acquisitions of the Tutti Frutti and Taco Time banners in September 2008 and October 2008, respectively.

Total revenue increased by 31%, to $21.21 million from $16.19 million for the same period last year. Franchise stores revenues increased by 55% to $16.90 million from $10.93 million. The increase in revenue from franchise stores is attributed to the acquisitions and organic growth. Revenue from corporate owned stores decreased 18% to $4.32 million from $5.26 million. The decrease is the result of fewer corporate stores owned and operated in the first six months of 2009 compared to 2008.

EBITDA increased 21% from $7.65 million to $9.25 million for the six month period ended May 31, 2009. EBITDA from franchise stores increased from $6.95 million to $9.0 million due primarily to the acquisitions of Tutti Frutti, Taco Time and Country Style. The acquisition of Country Style closed on May 1, 2009. EBITDA as a percentage of revenue decreased mainly due to the higher volume in turnkey projects during the quarter which generate minimal margins. EBITDA from corporate owned stores decreased from $0.70 million to $0.25 million since fewer stores were in operation throughout the six months period.

Total system wide sales increased 49.9% to $173.1 million compared to $115.4 million for 2008. Same store sales decreased by 0.2%.

For the quarter ended May 31, 2009, MTY reported a net income of $2.90 million or $0.15 per share ($0.15 per fully diluted share) compared to a net income of $2.35 million or $0.12 per share ($0.12 per fully diluted share) for the same quarter last year, representing a net income increase of 24%. The increase in net income for the quarter is mainly attributable to the integration of its recent Tutti Frutti, Taco Time and Country Style acquisitions and to organic growth.

For the quarter ended May 31, 2009, total revenue increased by 33%, to $11.43 million from $8.61 million for the same quarter last year. Revenue from franchise stores increased to $9.06 million from $5.84 million due mainly to the recent acquisitions. Revenue from corporate owned stores decreased to $2.37 million from $2.78 million, representing a decrease of 15% as a result of fewer corporate stores in operation in the second quarter.

EBITDA increased from $4.04 million to $5.20 million for the quarter ended May 31, 2009 representing an increase of 29%. EBITDA from franchise stores increased from $3.62 million in 2008 to $4.96 million in 2009 due primarily to the acquisitions of Tutti Frutti, Taco Time, Country Style and organic growth. EBITDA as a percentage of revenue decreased from 60% in 2008 to 55% in 2009 due mainly to larger number of sales of turnkey projects and sales made to franchisees, which have lower profit margins. EBITDA from corporate owned locations decreased from $0.42 million to $0.23 million. EBITDA as a percentage of revenue from corporate owned locations also decreased from 15% in 2008 to 10%.

MTY's total system wide sales amounted to $92.5 million during the second quarter ended May 31, 2009 compared to $59.8 million for the same period last year, representing an increase of 54.7%. Same store sales in the second quarter of 2009 decreased by 0.5%.

The company has $6.38 million in cash and temporary investments as of May 31, 2009. MTY has 1,516 stores, including 27 corporate owned stores, in operation as at May 31, 2009.

Approximately 65 new locations have been planned for the 2009 fiscal year and Management remains committed to seek out potential acquisitions to further strengthen its market position.

On Behalf of the Board of Directors of MTY Food Group Inc., Stanley Ma, Chairman, President & CEO.

This news release was prepared by management who takes full responsibility for its contents. Neither the TSX Venture Exchange nor its Regulation Services Provide (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

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