BOSTON PIZZA ROYALTIES INCOME FUND ANNOUNCES 2025 SECOND QUARTER RESULTS AND 4.3% INCREASE TO MONTHLY CASH DISTRIBUTIONS TO UNITHOLDERS

Toronto Stock Exchange: BPF.UN

HIGHLIGHTS

Franchise Sales1 of $251.8 million for the Period and $483.0 million YTD, representing an increase of 6.3% and 5.3%, respectively, versus the same periods one year ago.

Same Restaurant Sales2 of 6.4% for the Period and 5.5% YTD.

Cash flows generated from operating activities of $9.9 million for the Period and $19.2 million YTD, representing increases of 3.4% and 2.6%, respectively, versus the same periods one year ago.

Distributable Cash3 increased 6.1% for the Period and 3.1% YTD, and Distributable Cash per Unit4 increased 6.3% for the Period and 3.2% YTD.

Payout Ratio5 of 92.3% for the Period, 96.1% YTD and 99.6% on a trailing 12-month basis. Cash balance at the end of the Period was $5.3 million.

On August 13, 2025, the trustees of the Fund declared a distribution for the period of July 1, 2025 to July 31, 2025 of $0.120 per Unit, which is payable on August 29, 2025 to unitholders of the Fund ("Unitholders") of record on August 21, 2025. This is an increase of $0.005 per Unit, or 4.3%, from the previous monthly distribution rate of $0.115 per Unit.  On an annualized basis, the new monthly distribution rate equates to $1.440 per Unit compared to $1.380 per Unit for the previous monthly distribution rate.

VANCOUVER, BC, Aug. 14, 2025 /CNW/ - Boston Pizza Royalties Income Fund (the "Fund") and Boston Pizza International Inc. ("BPI") reported financial results today for the second quarter period from April 1, 2025 to June 30, 2025 (the "Period") and January 1, 2025 to June 30, 2025 ("YTD").  A copy of this press release, the unaudited condensed consolidated interim financial statements and related management's discussion and analysis ("MD&A") of the Fund and BPI are available at www.sedarplus.ca and www.bpincomefund.com.  The Fund will host a conference call to discuss the results on August 14, 2025 at 8:30 am Pacific Time (11:30 am Eastern Time).  The call can be accessed by dialling 1-833-821-3078 or +1-647-846-2537.  A replay will be available until September 14, 2025 by dialling 1-855-669-9658 or +1-412-317-0088 and entering the access code: 3010624 followed by the # sign.  The replay will also be available at www.bpincomefund.com.  Capitalized terms used in this press release that are not otherwise defined have the meanings ascribed to them in the Fund's MD&A for the Period and YTD.

"We are pleased to announce a 4.3% increase in the monthly cash distribution rate to a new rate of $0.120 per Unit, the highest level ever in the history of the Fund", said Marc Guay, Chair of the Board of Trustees.  "The strong continued financial performance of the Boston Pizza system, along with the Fund's growing cash balance, have enabled the trustees of the Fund to increase the monthly distribution rate payable to Unitholders.  While we are encouraged by recent business performance, given the ongoing economic uncertainty, the trustees of the Fund remain cautious and will continue to closely monitor the Fund's available cash balances and distribution levels, based on our goal of stable and sustainable distribution flow to Unitholders."

PERIOD RESULTS

SRS, a key driver of distribution growth for Unitholders, was 6.4% for the Period compared to 1.7% reported in the second quarter of 2024.  SRS was 5.5% YTD compared to 0.4% reported year-to-date in 2024.  SRS for the Period and YTD was principally due to effective promotional initiatives, continued momentum in take-out and delivery, and favourable comparisons to a softer performance in the same period in the prior year.

Franchise Sales of Boston Pizza restaurants in the Royalty Pool were $251.8 million for the Period compared to $236.8 million for the second quarter of 2024.  The $15.0 million increase in Franchise Sales for the Period was primarily due to positive SRS. Franchise Sales of Boston Pizza restaurants in the Royalty Pool were $483.0 million YTD compared to $458.8 million year-to-date in 2024.  The $24.2 million increase in Franchise Sales YTD was primarily due to positive SRS.

The Fund's net and comprehensive income was $14.3 million for the Period compared to $7.5 million for the second quarter of 2024.  The $6.8 million increase in the Fund's net and comprehensive income for the Period compared to the second quarter of 2024 was primarily due to a $7.9 million increase in fair value gain, a $0.8 million increase in Royalty Income6 and Distribution Income7 and a $0.1 million decrease in interest expense on debt and financing fees, partially offset by a $2.0 million increase in current and deferred income tax expense.  The Fund's net and comprehensive income was $20.7 million YTD compared to $15.9 million year-to-date in 2024.  The $4.8 million increase in the Fund's net and comprehensive income YTD compared to the same period in 2024 was primarily due to a $4.8 million increase in fair value gain, a $1.3 million increase in Royalty Income and Distribution Income, a $0.1 million decrease in administrative expenses and a $0.1 million decrease in interest expense on debt and financing fees, partially offset by a $1.5 million increase in current and deferred income tax expense.

Cash generated from operating activities for the Period was $9.9 million compared to $9.6 million in the second quarter of 2024.  The increase of $0.3 million was primarily due to an increase in Royalty Income and Distribution Income of $0.8 million, partially offset by an increase in income taxes paid of $0.4 million and a decrease in changes in working capital of $0.1 million.  Cash generated from operating activities YTD was $19.2 million compared to $18.7 million in the same period in 2024.  The increase of $0.5 million was primarily due to an increase in Royalty Income and Distribution Income of $1.3 million, partially offset by an increase in income taxes paid of $0.4 million and a decrease in changes in working capital of $0.4 million.

The Fund generated Distributable Cash of $8.0 million for the Period compared to $7.5 million for the second quarter of 2024.  The increase in Distributable Cash of $0.5 million or 6.1% was primarily due to an increase in cash flows generated from operating activities of $0.3 million, SIFT Tax on Units3 adjustment of $0.2 million and lower interest paid on debt of $0.1 million, partially offset by an increase in Class B Unit entitlement of $0.1 million.  The Fund generated Distributable Cash of $15.3 million YTD compared to $14.8 million for the same period in 2024.  The increase in Distributable Cash of $0.5 million or 3.1% was primarily due to an increase in cash generated from operating activities of $0.5 million.

The Fund generated Distributable Cash per Unit of $0.374 for the Period and $0.718 YTD compared to $0.352 per Unit and $0.696 per Unit, respectively, for the same periods in 2024.  The increase in Distributable Cash per Unit of $0.022 or 6.3% for the Period and $0.022 or 3.2% YTD was primarily attributable to the increase in Distributable Cash outlined above.

The Fund's Payout Ratio for the Period was 92.3% compared to 96.2% in the second quarter of 2024.  The decrease in the Fund's Payout Ratio for the Period was due to Distributable Cash increasing by $0.5 million or 6.1%, partially offset by distributions paid increasing by $0.1 million or 1.8%.  The Fund's Payout Ratio YTD was 96.1% compared to 96.5% year-to-date in 2024.  The decrease in the Fund's Payout Ratio YTD was due to Distributable Cash increasing by $0.5 million or 3.1%, partially offset by distributions paid increasing by $0.4 million or 2.7%.  Payout Ratio is calculated by dividing the amount of distributions paid during the applicable period by the Distributable Cash for that period.  The Fund's Payout Ratio fluctuates quarter-to-quarter depending upon the amount of distributions paid during a quarter and the amount of Distributable Cash generated during that quarter.  On a trailing 12-month basis, the Fund's Payout Ratio was 99.6% as at June 30, 2025.

DISTRIBUTIONS

During the Period, the Fund declared distributions on the Units in the aggregate amount of $7.3 million or $0.345 per Unit.  During the second quarter of 2024, the Fund declared distributions on the Units in the aggregate amount of $7.2 million or $0.339 per Unit. During the Period, the Fund paid distributions on the Units in the aggregate amount of $7.3 million or $0.345 per Unit.  During the second quarter of 2024, the Fund paid distributions on the Units in the aggregate amount of $7.2 million or $0.339 per Unit.  The amount of distributions declared and paid during the Period increased by $0.1 million or $0.006 per Unit due to the monthly distribution rate increasing from $0.113 per Unit to $0.115 per Unit commencing with the November 2024 distribution (the "November 2024 Distribution Increase").  YTD, the Fund declared distributions on the Units in the aggregate amount of $12.2 million or $0.575 per Unit.  During the same period in 2024, the Fund declared distributions on the Units in the aggregate amount of $12.0 million or $0.565 per Unit. YTD, the Fund paid distributions on the Units in the aggregate amount of $14.7 million or $0.690 per Unit.  During the same period in 2024, the Fund paid distributions on the Units in the aggregate amount of $14.3 million or $0.672 per Unit.  The amount of distributions declared YTD increased by $0.2 million or $0.010 per Unit due to the November 2024 Distribution Increase.  The amount of distributions paid YTD increased by $0.4 million or $0.018 per Unit due to an increase to the monthly distribution rate from $0.107 to $0.113 per Unit commencing with the January 2024 distribution and the November 2024 Distribution Increase.

On August 13, 2025, the trustees of the Fund declared a distribution for the period of July 1, 2025 to July 31, 2025 of $0.120 per Unit, which will be payable on August 29, 2025 to Unitholders of record on August 21, 2025.  This is an increase of $0.005 per Unit, or 4.3%, from the previous monthly distribution rate of $0.115 per Unit.  On an annualized basis, the new monthly distribution rate equates to $1.440 per Unit compared to $1.380 per Unit for the previous monthly distribution rate.  Including the July 2025 distribution, which will be paid on August 29, 2025, the Fund will have paid out total distributions of $470.5 million or $28.26 per Unit, which includes 271 monthly distributions and three special distributions.

FINANCIAL SUMMARY

The tables below set out selected information from the Fund's unaudited condensed consolidated interim financial statements together with other data and should be read in conjunction with the unaudited condensed consolidated interim financial statements and MD&A of the Fund for the three-month and six-month periods ended June 30, 2025 and June 30, 2024, and the Fund's audited annual consolidated financial statements for the year-ended December 31, 2024.

For the periods ended June 30

Q2 2025

Q2 2024

YTD 2025

YTD 2024

(in thousands of dollars, except restaurants, SRS, Payout Ratio and per Unit items)

Number of restaurants in Royalty Pool

372

372

372

372

Franchise Sales reported by restaurants in the Royalty Pool

251,812

236,792

482,954

458,824

Royalty Income

10,072

9,472

19,318

18,353

Distribution Income

3,306

3,111

6,342

6,030

Total revenue

13,378

12,583

25,660

24,383

Administrative expenses

(412)

(497)

(821)

(933)

Interest expense on debt and financing fees

(833)

(932)

(1,667)

(1,760)

Interest expense on Class B Unit liability

(1,046)

(1,063)

(1,776)

(1,792)

Interest income

37

69

84

135

Profit before fair value gain and income taxes

11,124

10,160

21,480

20,033

Fair value gain on investment in BP Canada LP

14,294

1,473

12,384

3,601

Fair value loss on Class B Unit liability

(6,369)

(656)

(5,518)

(1,604)

Fair value gain (loss) on Swaps

94

(672)

(609)

(484)

Current and deferred income tax expense

(4,825)

(2,841)

(7,072)

(5,615)

Net and comprehensive income

14,318

7,464

20,665

15,931

Basic earnings per Unit

0.67

0.35

0.97

0.75

Diluted earnings per Unit

0.67

0.33

0.97

0.74

Distributable Cash / Distributions / Payout Ratio

Cash flows generated from operating activities

9,939

9,613

19,204

18,713

BPI Class B Unit entitlement8

(1,171)

(1,095)

(2,247)

(2,167)

Interest paid on debt

(818)