The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Sabahat Khan - RBC Capital Markets, Research Division - Analyst
: Just a question on -- you provided some color on the prepayment that you were able to collect on the royalties. Can you maybe give us an idea of
where you stand on that? And in terms of -- is that another offer you're making franchisees for fiscal Q3? And then in terms of the amounts that
you collected in Q2, was there any sort of pull forward of some of those collections? Or was it sort of a "Hey, look, you owe us this much by the end
of May. You can pay us and then you deal with it in a quarter." Just I want to understand that timing as well as is that an offer you're continuing to
make to your franchisees?
Question: Sabahat Khan - RBC Capital Markets, Research Division - Analyst
: Okay. And then in terms of the relief that you were able to get from your banks for the next 4 quarters, are you able to share sort of any details in
terms of the amount of flexibility you're getting underneath that? And then how you're just generally feeling about the balance sheet over the
next few quarters? In terms of results, do you think it's more of the LTM calculation on the EBITDA that will impact? Or do you see potential sequential
downside to the EBITDA? Just want to get your perspective on how you see the business evolving for the next few quarters.
Question: Sabahat Khan - RBC Capital Markets, Research Division - Analyst
: Okay. And then just the last one for me on the store closures. Was that sort of in line with what you're expecting for the quarter? And were there
any surprises by geography or banner in that mix -- in the 112 stores that were announced for Q2?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Can you hear me?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. Great. So I understand that management doesn't want to necessarily provide performance by banner. However, maybe I just thought I'd try
on Cold Stone because the situation is so unique given its dependence on -- strong dependence on a particular season and the materiality in your
business. Maybe you can give some qualitative color on Cold Stone and what you think about that banner.
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. And I understand that some of your businesses, you don't get the ability to track how the franchisees are doing. But is Cold Stone one where
you have better data on the franchisee health? Or is that kind of in line with the average of the business?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. The management's tone, at least from my perspective, it certainly sounds more encouraged relative to last quarter. And you talked about
looking at acquisitions to the extent that you're allowed by your creditors. So maybe you can give us a sense of what you see in terms of that
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Eric, before the pandemic hit, you and the team were making a lot of changes to the business, focusing on organic growth initiatives, among one
of many initiatives. Looking at this pandemic and reflecting on the changes that the consumer is going through at this moment and potentially in
the future, has that caused you to revisit any of MTY's strategies in terms of the types of businesses it acquires, where it wants to acquire if, in fact,
they'll be as quick as it was in the past, and where management will put its focus? And if so, maybe you can highlight some of those to us.
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. And just switching gears here. Management highlighted that there are $10 million of OpEx savings as part of the initiatives that's taken early
in the pandemic hit. I understand, and you highlighted, that some of these initiatives are now fading away, and we're starting to reinvest back into
certain franchisee support. So just wondering, of that $10 million, how should we forecast those savings looking forward? Is the bulk of that saving?
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JULY 10, 2020 / 12:30PM, MTY.TO - Q2 2020 MTY Food Group Inc Earnings Call
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