A&W Revenue Royalties Income Fund reports Q3 profit up, raises distributions to long-time investors
Published on March 7, 2018
(BMO Capital Markets) — A&W Restaurants, LLC (NYSE: AWH) today reported a positive earnings per share for the third quarter ended March 31, 2018, and raised distributions to its long-term shareholders to offset the impact of the recent acquisition of Southeastern Grocery Holdings, which increased the effective tax rate on its shareholders when they transfer their shares.
The Company reported adjusted net income of $4.12 million or $1.10 per share, compared with negative adjusted net income of $0.09 million or a loss of $1.04 per share in the year ago period. Adjusted EBITDA(1) was $14.40 million, or $0.51 per share, compared with negative adjusted EBITDA for the year-ago period of $2.47 million or a loss of $0.17 per share. Adjusted Diluted Earnings Per Share was $0.38 per share. Adjusted EBITDA and Adjusted Diluted Earnings Per Share exclude the impact of stock-based compensation.
Adjusted net income and Adjusted EBITDA were substantially above the estimate of the Company’s investors in their First Quarter 2018 Earnings Conference call.
“Our strong third-quarter performance is a direct result of our robust execution strategy and strong execution across our core value drivers in the restaurant segment. We saw a very positive impact from the Southeastern acquisition through the third quarter. Our investors were very encouraged by the first half results as this was the first time we’ve hit our estimates. At the same time, we’re continuing to make progress to address our structural headwinds and to close out the year with full year results in line with our expectations,” said John Wawrzyniak, chairman and CEO.
Third quarter results were highlighted by the contribution from the new restaurants and new market areas to