Boston Pizza Royalties Income Fund

Hello, this is the Chorus Call conference operator. Thank you for standing by. Welcome to Boston Pizza's first quarter 2021 conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded on May 12th, 2021. After the presentation, there will be a question and answer session. Participants on the call may also pose their questions via email to Boston Pizza's Investor Relations Department at investorrelationsatbostonpizza.com. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Michael Harbinson, Chief Financial Officer. Please go ahead.

Thank you and welcome everyone to the call. We'll be discussing the 2021 first quarter results for both Boston Pizza Royalties Income Fund, or the fund, and for Boston Pizza International, or BPI. For complete details on our financial results, please see our first quarter materials that were filed earlier today on CDAR, or visit the fund's website at bpincomefund.com. Should you require additional information after the call, you can reach us via the Investor Relations phone number listed in our press release. 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 and its Boston Pizza restaurants in Canada. BPI pays royalty and distribution income to the fund based on franchise revenue of royalty pool restaurants. For a complete description of the fund and its business, please see the annual information form dated February 9, 2021. This was filed earlier today on CDAR.com. 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. 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. And with that, I will now turn the call over to Joyce.

Thank you, Michael, and welcome everyone to Boston Pizza's first quarter investor conference call. Today, I'll be discussing our first quarter results and sharing a brief outlook. Michael will summarize our key financial highlights. As usual, we'll leave time for your questions at the end of today's call. The first quarter continued to present challenges brought on by COVID-19, adversely affecting the business of Boston Pizza restaurants across Canada. Overall guest traffic remained weakened as a result of public health restrictions having a negative impact on in-restaurant dining. With the rise in COVID-19 cases due mainly to COVID-19 variants and the resulting increase in local government restrictions, we anticipate that the business of Boston Pizza restaurants will continue to be negatively impacted during 2021 and particularly during the first half of 2021. Throughout the first quarter, approximately 375 Boston Pizza restaurants were providing takeout and delivery services, with a low of approximately 100 Boston Pizza restaurants and a high of approximately 350 Boston Pizza restaurants also having their dining rooms, sports bars, and patios open with reduced seating capacity. Looking forward, our focus continues to be on the safety of our guests and our restaurant staff. Serving our communities with takeout and delivery and on-premise dining where permitted, and helping our franchisees manage through these challenging times. Franchise sales were 74.1% of the levels they were in the same period one year ago, resulting in corresponding royalty and distribution income decreases compared to the prior year period. SRS on a franchise sales basis for the first quarter was negative 24.9% compared to negative 15.9% reported in the first quarter of 2020. As COVID-19 began to adversely affect the sales in Boston Pizza restaurants in March of 2020, the fund believes that it is also useful to calculate and report SRS comparing the 2021 franchise sales to 2019 franchise sales. If SRS were calculated comparing franchise sales in the quarter to franchise sales in the first quarter of 2019, SRS would be negative 36.7%. Franchise sales and the resulting royalty and distribution income for April 2021 were approximately 164% of the level they were in April 2020 and approximately 56% of the level they were in April 2019. SRS for April 2021 was approximately positive 74% when compared to the same period in 2020 and approximately negative 47% when compared to the same period in 2019. While we've been pleased with our ability to manage through the pandemic, our outlook remains cautious due to the high-level uncertainty that remains. Turning to our financial results, as shared in the press release and financial statements filed on CDAR this morning, Boston Pizza posted system-wide gross sales of $156.7 million for the quarter, representing a decrease of 30.3% versus the same period one year ago. In addition, The fund posted franchise sales from restaurants in the royalty pool of $129.0 million for the period, representing a decrease of 25.9% versus the same period one year ago. From a marketing standpoint, we began the first quarter with a guest favorite meal deals promotion, which offered varying combinations of pizza, pasta, and wing bundles at compelling price points. Also in the first quarter of 2021, for the first time ever, Boston Pizza extended its popular Valentine's Day promotion to sell heart-shaped pizzas on both Saturday, February 13th and Sunday, February 14th to give our guests more opportunities to enjoy a heart-shaped pizza and give back to the local communities. These first quarter promotions helped increase takeout delivery sales, which offset some of the negative same-restaurant sales results due to COVID-19. We would like to thank our generous customers for supporting Valentine's Day promotion during these challenging times. The Boston Pizza Foundation raised over $270,000 this year to help local charities in communities across Canada. Turning to restaurant development, no new Boston Pizza restaurants were opened during the first quarter, and one restaurant was permanently closed. DPI continues to work diligently to build a consortium of financial support to help offset the otherwise unprecedented financial impact facing our franchisees. Our focus continues to be on the safety of our guests and restaurant staff, serving our communities with takeout and delivery, and in-restaurant dining where permitted, and supporting our franchisees during these challenging times. I'll now pass it over to Michael for a review of the fund's financial performance.