MTY Food Group Inc Q4 2019 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Sabahat Khan - RBC Capital Markets, Research Division - Analyst : Can you maybe give us some updates on some of the specific initiatives that you said you were going to be working on at Papa Murphy's, specifically things around technology updates there and the menu innovation? I just want to get an understanding of how far along you are right now?

Question: Sabahat Khan - RBC Capital Markets, Research Division - Analyst : All right. And then I think for store closures at Papa Murphy's a while ago, it was a number mentioned something on the ballpark of potentially up to 100. I guess now that you've had that business for some time, is that the number you're still thinking about in terms of over the long run or do you have a different view on that? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. FEBRUARY 24, 2020 / 1:30PM, MTY.TO - Q4 2019 MTY Food Group Inc Earnings Call

Question: Sabahat Khan - RBC Capital Markets, Research Division - Analyst : Okay. And then on acquisitions, I mean if I heard you correctly, you mentioned that you might sort of moderate the larger ticker ones over the next while. Is that more sort of focus on the core business? Or is the pipeline any different than it was a little while ago? What would you look at? What's kind of driving that thought process?

Question: Sabahat Khan - RBC Capital Markets, Research Division - Analyst : Okay. And then just one last one for me. I guess more just on the process around the commentary on the whistleblower stuff. I guess from your perspective, this is the end of that announcement, and we shouldn't expect to hear anything else from your end?

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : In your disclosure documents, you note increased competition and increased uncertainty. Just hoping you can provide some perspective on this. And particularly in light with your strategy to grow same-store and help reduce the store closures as much as possible, so maybe you can help me understand how those 2 things interact? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. FEBRUARY 24, 2020 / 1:30PM, MTY.TO - Q4 2019 MTY Food Group Inc Earnings Call

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : Okay. So I guess what I was trying to get at is, in light of this increasing competition and uncertainty, is there any path for MTY to provide royalty-type relief to your franchisees in order to help them transition against this challenging backdrop?

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : Okay. So I guess this comment of royalty-type relief to address this competitive backdrop isn't materially bigger than it's been in prior years. Is that a fair way to look at it?

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : Okay. On Papa Murphy's, the same-store sales, I know you have a lot of things on the go, but it kind of weakened a little bit sequentially. Is that due to the all the disruption happening from all the initiatives? Or how would you characterize that? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. FEBRUARY 24, 2020 / 1:30PM, MTY.TO - Q4 2019 MTY Food Group Inc Earnings Call

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : Okay. In terms of -- just changing topics here. And I know acquisitions aren't going to be as big of a theme in 2020 as it was in 2019. But when you look at the acquisition multiples, are you noticing them trend higher generally over time? Or is it stablish for the ones you look at?

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : Okay. And you touched on this already, but the rail blockages and coronavirus. Is it fair to say impact is fairly limited at this point in your business?

Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst : I do have a whistleblower question. Maybe without getting into them too specifically, but just wondering, over the last 10 days, to what extent did your auditors maybe look into any of your specific financial allegations made?

Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. That's helpful. And some pretty good numbers on a -- from a comp trend in the U.S., especially in the East. Is that predominantly favorable weather? Or maybe can you call out some other trends or some other factors that contribute to that strength?

Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst : I guess it leads to my next question. Like, we're well into Q1, just wondering if the same trends you're seeing, I guess, maybe in Canada as well as the U.S., are they kind of -- is the momentum there as well?

Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. Great. The retail operations have been doing really well. I'm just wondering, is that deliberately an area that you would like to maybe build up over the next little bit? Do you see that being a significant percent of sales maybe you're -- through M&A as well, maybe about that specific part of the business?

Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And just one last one, if I may, Eric. On the buyback activities, it seems like it's kind of going up compared to historical standards. So I'm just wondering, is that something that you plan on maybe stepping up if the share price doesn't fully recover? Is that in your mind right now, a good way to deploy capital to shareholders as opposed to maybe M&A? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. FEBRUARY 24, 2020 / 1:30PM, MTY.TO - Q4 2019 MTY Food Group Inc Earnings Call