Q3 2025 Boston Pizza Royalties Income Fund Earnings Call

Speaker #1: Should you need assistance during the conference, you may reach an operator by pressing star then zero on your phone. At this time, I would like to turn the conference over to Michael Harbinson, Chief Financial Officer.

Speaker #1: Please go ahead.

Speaker #2: Thank you, and welcome to the call, everyone. Today, we'll be discussing the 2025 Q3 results for both Boston Pizza Royalties Income Fund, or the Fund, and for Boston Pizza International, or BPI.

Speaker #2: For complete details on our financial results, please see our Q3 materials filed earlier today on CDAR Plus, or visit the fund's website at bpincomefund.com.

Speaker #2: Should you require additional information after the call, you can reach out to our investor relations email address at investorrelations@bostonpizza.com. The fund is a limited purpose open-ended trust established under the laws of British Columbia to acquire, indirectly, certain trademarks and trade names used by BPI in its Boston Pizza restaurants in Canada.

Speaker #2: BPI pays royalty income and distribution income to the fund based on franchise revenues of royalty pool restaurants. For a complete description of the fund and its business, please see the annual information form dated March the 28th, 2025, which was filed on CDAR Plus.

Speaker #2: Before I turn the call over to Jordan Holm, President of BPI, I would like to note that certain information in the following discussion may constitute forward-looking information.

Speaker #2: For a more complete definition of forward-looking information and the associated risks, please refer to the fund's management discussion and analysis issued earlier today. Forward-looking information is provided as of the date of this call, and, except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances.

Speaker #2: And with that, I will now turn the call over to Jordan. Jordan?

Speaker #3: Thank you, Michael, and welcome everyone to Boston Pizza's Q3 investor conference call. Today, I'll be discussing our Q3 results and share a brief outlook.

Speaker #3: Michael will summarize our key financial highlights, and as usual, we'll leave time for your questions at the end of today's call. Boston Pizza delivered its third consecutive quarter of record franchise sales.

Speaker #3: Continuing the strong performance seen throughout the year, these results show that our current promotions remain effective in driving guest engagement and that our takeout and delivery business continues to contribute meaningfully to sales.

Speaker #3: The fund posted franchise sales from restaurants in the royalty pool of $248.9 million for the quarter and $731.9 million year to date, representing increases of 4.3% and 4.9% respectively versus the same period's one year ago.

Speaker #3: Same restaurant sales was 4.1% for the quarter and 5.0% year to date. Same restaurant sales for the quarter and year to date was principally due to the continued momentum in takeout and delivery, effective promotional initiatives, and favorable comparisons to a softer performance in the same period in the prior year.

Speaker #3: From a marketing standpoint, the third quarter of 2025 included a summer promotion in partnership with Live Nation. Launching a national giveaway of over 400 concert tickets alongside a refreshed main menu, our popular kids' cards promotion made a return in the third quarter as well with families receiving a card for five free kids' meals in exchange for a $5 donation to the Boston Pizza Foundation.

Speaker #3: This promotion raised over $1 million in total for local charities. Near the end of the quarter, the Kids Eat Free promotion engaged families further by offering one free kids' meal per child with each qualifying purchase.

The 5.8 million increase in the funds, net and comprehensive income year to date, compared to the same period in Prior year was primarily due to a 5.1 million increase in Fair Value, gain 1.8 million, increase in royalty and distribution income and a 0.1 million decrease in administrative expenses. All partially offset by a 1.2 million increase in income taxes, uh, expense

The funds cash flows generated from operating activities for the quarter was 10.6 million compared to 10 million. In the third quarter of 2024, the increase of 0.6 million was primarily due to an increase in royalty and distribution income of 0.6 million, and an increase in changes in working capital of 0.1 million, partially offset by an increase in income taxes, paid of 0.1 million,

Cash flows generated from operating activities year to date was 29.8 Million compared to 28.7 million. In the same period in 2024. The increase of 1.1 million was primarily due to an increase in royalty income and distribution, income of 1.8 million. A decrease in administrative expenses of 0.1 million partially offset by an increase in income taxes paid of 0.5 million and a decrease in changes in working capital of 0.3 million

While net and comprehensive income or loss and cash. Flows from operating activities are both measures under IFRS Accounting, Standards or IFRS. The fund is of the view that net income or loss, and cash flows from operating activities, do not provide the most meaningful measurement of the funds ability to pay distributions. Net income contains non-cash items that do not affect the funds. Cash flow, whereas cash flow from operating activities is not inclusive of all of the funds required cash outflows and is therefore not indicative of the cash available for distribution to unit holders.

To provide the investors with in the funds opinion, more meaningful information regarding the funds ability to pay distributions to you and holders.

The fund generated distributable cash of $8.5 million for the quarter compared to $8.1 million for the same period in the prior year. The increase in distributable cash of $0.4 million, or 4.9%, was primarily due to an increase in cash flows generated from operating activities of $6 million, partially offset by higher Class B unit entitlement of $0.1 million and higher interest paid on debt of $0.1 million. The fund generated distributable cash of $23.8 million year to date, compared to $22.9 million in 2024.

The increase in distributable. Cash of 0.9 million or 3.8% was primarily due to an increase in cash flows generated from operating activities of 1.1 million, partially offset by higher class, B and entitlement of 0.1 million, and higher interests paid on debt of 0.1 million.

the fund generated, distributable cash per unit of 40 cents for the quarter and a dollar and 11.8 cents year to date, compared to 38.1 cents and a dollar and 7.7 cents, respectively for the same periods in 2024, the increase in distributable, cash per unit of 1.9 cents or 5%, for the quarter and 4,

.1 cents or 3.8% year to date was primarily attributable to the increase industry in distributable cash outlined above

The funds payout ratio for the quarter was 88.8%, compared to 88.9% in the third quarter of 2024.

The decrease in the fund's payout ratio for the quarter was due to distributable cash increasing by $0.4 million, or 4.9%, partially offset by distributions paid increasing by $0.3 million, or 4.7%.

Year to date, the fund's payout ratio was 93.5% compared to 93.8% year to date last year. In 2024, the decrease in the fund's payout ratio year to date was due to distributable cash increasing by $0.9 million, or 3.88%, while our staff debt by distributions paid increased by $7 million, or 3.4%.

Trailing 12-month basis to their ratio was 99.4% as of September 30, 2025.

on November the 7th, 2025, the trustees of the fund approved, a cash distribution for the period of October 1st 2025, to October, 31st of 2025 of 12 cents per unit, which will be paid on November the 28th 2025 to unit holders of record at the close of business on November 21st, 2025,

The trustees objective and setting a monthly distribution amount? Is that a b sustainable, the trustees will continue to closely monitor the funds available, cash balances, given the fluctuating economic Outlook,

I will turn the call back over to Jordan for more on the outlook. Jordan?

Thank you. Michael, with the end of 2025 in sight, the fourth quarter has been off to a strong start with the launch of the game Day menu to align with the football season, offering Great Value, drinks and food. On each game day, this promotion was coupled with a weekly giveaway, with prizes such as free food, and football merchandise, alongside extensive marketing campaigns targeting at boosting engagement with football fans. This promotion will run through the regular football season offering guests and exciting viewing experience with a chance to win. Great prizes.

In addition, our 2025 holiday campaign launched last week, showcasing an array of new favorites and innovative dishes that inspire holiday cheer.

The holiday menu features delectable options like stuffed crust and mozza sticks.

Crispy chicken, vodka penne, garlic shrimp, mac and cheese puto on mushroom, pizza.

Fa la la la lava cake and new holiday drinks such as the frosty Hawaiian espresso and mistleto martinis and Mrs. Claus Fishbowl. Our third quarter franchise sales have remained Strong by offering guests value quality and convenience through both on premise and off- premise channels. We have a proven track record of adapting to evolving economic conditions and overcoming operational challenges while remaining focused on proactively driving sales and deepening guest loyalty.

And protecting the profitability of Boston Pizza restaurants.

Combined, with a strong National presence and trusted brand. Boston Pizza is well positioned for sustained growth throughout 2025 and Beyond.

With that, I'd like to begin the question and answer session over to you operator.

Thank you. We will now begin the question and answer session.

anyone who wishes to ask a question, may press star, then 1 on their telephone keypad or send the question via email to investor relations at Boston pizza.com

Please note that those questions we do not get to during the call will be answered via email immediately following the end of the investor conference call.

Please stand by as we pull for questions.

Our first question today is from Ed McAulay with a Voca Vest. Please go ahead.

Could you please comment on.

sales during the

series.

Assume that.

This is after the quarter end, but you would have had very good attendance during this exciting World Series.

Yes. Thank you. Ed. Appreciate the question. And you're right most of the benefit of the strong uh postseason run that the Blue Jays went on did happen. After the end of uh the Q3 period. But as an official partner of the Toronto Blue Jays and as their official sports bar, uh we definitely saw uh a benefit in terms of guests visitation and also off- premise and online ordering in line with the game days.

Sir and the Yankees series, The Mariner series and of course the World Series against the Dodgers 2 of those Series. Going to the seventh game which really brings fans out to share those experiences together. So a great call out in terms of uh a contributor to the fourth quarter results so far. Uh and definitely uh we're a proud Canadian company. It was great to see a Canadian team, take it as far as they could. Uh, we would have liked a different ending but all other parts of that, uh, experience were wonderful for, uh, for um, Baseball fans and, and for Boston, pizza restaurants. So thank you for that question.

This concludes the question and answer session. I would like to turn the conference back over to Jordan Holmes, for any closing remarks.

Thank you, operator. And since there are no further questions, we'd like to thank you for taking the time to join us today and invite you to celebrate the holiday season at your local Boston Pizza.

We also look forward to speaking with you all. Again at our fourth quarter conference call in February 2026. So thank you, everyone, and enjoy the rest of your day.

this brings,

Excuse me. This brings to an end today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.