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Hamilton Spectator
14-05-2025
- Business
- Hamilton Spectator
Diversified Royalty Corp. Announces First Quarter 2025 Results and Leadership Update
VANCOUVER, British Columbia, May 14, 2025 (GLOBE NEWSWIRE) — Diversified Royalty Corp. (TSX: DIV and (the 'Corporation' or 'DIV') is pleased to announce its financial results for the three months ended March 31, 2025 ('Q1 2025') and an update to its leadership structure. Highlights First Quarter Commentary Sean Morrison, President and Chief Executive Officer of DIV stated, 'The first quarter of 2025 once again saw a strong performance from our top royalty partner, Mr. Lube + Tires, which continues to produce strong growth across the system, generating SSSG6 of 9.5%. DIV's other variable royalty partners generated mixed results with both Oxford and Mr. Mikes generating positive SSSG in Q1. DIV's fixed royalty partners, Nurse Next Door, Stratus and BarBurrito made their fixed royalty payments. As previously announced, the deferral of 20% of Sutton's royalties that began in the fourth quarter of 2024 will continue to the end of 2025, to help Sutton invest in the business, and build on the positive momentum that began in the last quarter. DIV continues to see a decrease in royalty income from AIR MILES® because of the continued softness across the AIR MILES® Rewards Program.' 1. Adjusted revenue and distributable cash are non-IFRS financial measures, payout ratio is a non-IFRS ratio and weighted average organic royalty growth and Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. First Quarter Results a) Stratus royalty income for the three months ended March 31, 2025, was US$1.7 million, translated at an average foreign exchange rate of $1.4344 to US$1 (March 31, 2024 - US$1.6 million, translated at a foreign exchange rate of $1.3483 to US$1). b) Represents the DIV Royalty Entitlement plus management fees received from Nurse Next Door. c) DIV Royalty Entitlement and adjusted revenue are non-IFRS financial measures and as such, do not have standardized meanings under IFRS. For additional information, refer to 'Non-IFRS Measures' in this news release. In Q1 2025, DIV generated $15.6 million of revenue compared to $15.1 million in Q1 2024. After taking into account the DIV Royalty Entitlement2 (defined below) related to DIV's royalty arrangements with Nurse Next Door, DIV's adjusted revenue2 was $17.0 million in Q1 2025, compared to $16.4 million in Q1 2024. Adjusted revenue increased primarily due to positive SSSG2 (defined below) at Mr. Lube + Tires, Oxford and Mr. Mikes, the annual contractual increases at Stratus, Nurse Next Door and BarBurrito, partially offset by lower royalty income from AIR MILES® and Sutton's 20% royalty deferral, all as discussed in further detail below. 2. Adjusted revenue and DIV Royalty Entitlement are non-IFRS financial measures and SSSG are supplementary financial measures – see 'Non-IFRS Measures' below. Royalty Partner Business Updates Mr. Lube + Tires: Mr. Lube + Tires generated SSSG3 of 9.5% for the Mr. Lube + Tires stores in the royalty pool for Q1 2025, compared to SSSG of 14.6% in Q1 2024. SSSG in the current period is primarily due to the sustained growth across the Mr. Lube + Tires system. 3. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. Stratus: Royalty income from SBS Franchising LLC ('Stratus') was $2.4 million (US$1.7 million translated at an average foreign exchange rate of $1.4344 to US$1.00) for Q1 2025. The fixed royalty payable by Stratus increases each November at a rate of 5% until and including November 2026 and 4% each November thereafter during the term of the license, with the most recent increase effective November 15, 2024. Nurse Next Door: The royalty entitlement to DIV (the 'DIV Royalty Entitlement4') from Nurse Next Door Professional Homecare Services Inc. ('Nurse Next Door') was $1.3 million in Q1 2025. The DIV Royalty Entitlement from Nurse Next Door grows at a fixed rate of 2.0% per annum during the term of the license, with the most recent increase effective October 1, 2024. 4. DIV Royalty Entitlement is a non-IFRS measure – see 'Non-IFRS Measures' below. Mr. Mikes: SSSG5 for the Mr. Mikes Restaurants Corporation ('Mr. Mikes') restaurants in the Mr. Mikes royalty pool was 1.5% in Q1 2025, compared to SSSG of -5.5% in Q1 2024. The higher SSSG percentage in the current period is due to an increase in restaurant guest traffic. Royalty income and management fees of $1.0 million were generated from Mr. Mikes for Q1 2025 and 2024, respectively. 5. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. Oxford: The Oxford Learning Centres, Inc. ('Oxford') locations in the Oxford royalty pool generated SSSG6 (on a constant currency basis) of 5.5% in Q1 2025, compared to SSSG -2.1% in Q1 2024. Oxford's positive SSSG for the quarter is due to the solid performance of the Oxford system during the quarter. 6. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. AIR MILES®: In Q1 2025, royalty income of $0.8 million was generated from the AIR MILES® Licenses compared to $0.9 million generated in Q1 2024, a decrease of 15.2% from the comparable quarter. The decrease is largely due to continued softness in the AIR MILES® Rewards Program. Sutton: In Q1 2025, royalty income of $0.9 million was generated from Sutton, which includes a 20% royalty deferral for Q1, 2025, compared to $1.1 million for Q1, 2024. The deferred royalties do not accrue interest and are due in full on December 31, 2027. The fixed royalty payable by Sutton increases at a rate of 2% per year, with the most recent increase effective July 1, 2024. BarBurrito: Royalty income from BarBurrito Restaurants Inc. ('BarBurrito') was $2.1 million for Q1 2025. The royalty payable by BarBurrito initially grows at a fixed rate of 4% per annum each March from and including March 2025 to and including March 2030 and, commencing on January 1, 2031, will fluctuate based on the gross sales of the BarBurrito locations in the royalty pool. Distributable Cash and Dividends Declared In Q1 2025, distributable cash7 increased to $11.1 million ($0.0666 per share), compared to $9.6 million ($0.0629 per share), in Q1 2024. The increase in distributable cash per share7 for the quarter was primarily due to an increase in distributable cash, partially offset by a higher weighted average number of common shares outstanding7. In Q1 2025, the payout ratio7 was 93.8% on dividends of $0.0625 per share, compared to the payout ratio of 97.2% on dividends of $0.0611 per share for the same respective period in 2024. The decrease to the payout ratio was primarily due to higher distributable cash per share7, partially offset by higher dividends declared per share7. 7. Distributable cash is a non-IFRS financial measure and distributable cash per share and payout ratio are non-IFRS ratios – see 'Non-IFRS Measures' below. Net Income Net income for Q1 2025 was $8.0 million compared to net income of $7.5 million for the three months ended March 31, 2024. The increase in net income in Q1 2025, was primarily due to the higher adjusted revenues8, lower interest expenses and share-based compensation expenses, partially offset by higher salaries and benefits, income tax expenses, and other finance costs. 8. Adjusted revenue is a non-IFRS financial measure – see 'Non-IFRS Measures' below. Availability of Annual General Meeting Materials and Leadership Update The proxy-related materials for DIV's upcoming Annual General meeting of shareholders (the 'Meeting') to be held on Thursday, June 19, 2025 are now available and have been posted under DIV's profile on SEDAR+ at and on DIV's website at: . At the Meeting, shareholders will be asked to: (i) receive the consolidated financial statements of DIV for the fiscal year ended December 31, 2024, together with the report of the auditors thereon, (ii) elect directors of the Corporation for the ensuing year, and (iii) appoint KPMG LLP as auditors of the Corporation for the ensuing year and to authorize the directors of the Corporation to fix their remuneration. The Board is pleased to nominate Sean Morrison, our President and Chief Executive Officer, for election to the Board, alongside the current directors. The Board is also pleased to announce the promotion of Greg Gutmanis from Chief Financial Officer and Vice President, Acquisitions, to President and Chief Financial Officer, effective July 1, 2025. In his expanded role, Greg will assume greater responsibility for DIV's day-to-day operations, including oversight of our Royalty Partners' businesses, identifying and executing new acquisition opportunities, and engaging with DIV's shareholders and prospective investors. Greg has played a key role in DIV's growth since its inception. He is widely recognized within Vancouver's finance community, having received the 2020 BC CFO Award and being named one of Business in Vancouver's 'Top Forty Under 40' in 2017. During his tenure at DIV, Greg has managed approximately $400 million in equity and convertible debenture offerings and over $200 million in senior debt. Prior to joining DIV, he co-managed $165 million across two private equity funds and worked as an investment banker. Sean Morrison, stated, 'Greg's promotion to President and Chief Financial Officer is well deserved. I've had the pleasure of working with Greg for nearly 20 years in investment banking, private equity, and for the past decade at DIV. Greg is a consummate professional who continues to broaden his expertise and expand his leadership role each year. As continuing CFO and incoming President, I'm confident Greg will continue to grow his responsibilities, and I look forward to working closely with him to deliver value to DIV shareholders.' Sean will continue to lead DIV's strategic direction and overall business as its Chief Executive Officer. About Diversified Royalty Corp. DIV is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America. DIV's objective is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors. DIV currently owns the Mr. Lube + Tires, AIR MILES®, Sutton, Mr. Mikes, Nurse Next Door, Oxford Learning Centres, Stratus Building Solutions and BarBurrito trademarks. Mr. Lube + Tires is the leading quick lube service business in Canada, with locations across Canada. AIR MILES® is Canada's largest coalition loyalty program. Sutton is among the leading residential real estate brokerage franchisor businesses in Canada. Mr. Mikes operates casual steakhouse restaurants primarily in western Canadian communities. Nurse Next Door is a home care provider with locations across Canada and the United States as well as in Australia. Oxford Learning Centres is one of Canada's leading franchisee supplemental education services. Stratus Building Solutions is a leading commercial cleaning service franchise company providing comprehensive building cleaning, and office cleaning services primarily in the United States. BarBurrito is the largest quick service Mexican restaurant food chain in Canada. DIV's objective is to increase cash flow per share by making accretive royalty purchases and through the growth of purchased royalties. DIV intends to continue to pay a predictable and stable monthly dividend to shareholders and increase the dividend over time, in each case as cash flow per share allows. Forward-Looking Statements Certain statements contained in this news release may constitute 'forward-looking information' within the meaning of applicable securities laws that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. The use of any of the words 'anticipate', 'continue', 'estimate', 'expect', 'intend', 'may', 'will', 'project', 'should', 'believe', 'confident', 'plan' and 'intend' and similar expressions are intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Specifically, forward-looking information in this news release includes, but is not limited to, statements made in relation to: the deferral of Sutton Royalties continuing for the remainder of 2025 to help Sutton invest in the business and build on the positive momentum that began in the last quarter; the terms on which the deferred royalties are required to be paid by Sutton; the promotion of Greg Gutmanis to President and Chief Financial Officer effective July 1, 2025, and that Sean Morrisson will continue to lead DIV's strategic direction and overall business as Chief Executive Officer; details of DIV's upcoming Annual General Meeting; DIV's intention to pay monthly dividends to shareholders; and DIV's corporate objectives. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events, performance, or achievements of DIV to differ materially from those anticipated or implied by such forward-looking information. DIV believes that the expectations reflected in the forward-looking information included in this news release are reasonable but no assurance can be given that these expectations will prove to be correct. In particular, risks and uncertainties include: DIV's royalty partners may not make their respective royalty payments to DIV, in whole or in part; the decline in royalties received under the AIR MILES® licenses could cause AM Royalties Limited Partnership ('AM LP') to be required to make partial or full repayment of the outstanding principal amount under its credit agreement, or cause AM LP to be in default under its credit agreement; current positive trends being experienced by certain of DIV's royalty partners (and their respective franchisees) may not continue and may regress, and negative trends experienced by certain of DIV's Royalty Partners (including their respective franchisees) may continue and may regress; Sutton may not pay all deferred royalties in accordance with the timing required or at all; Sutton's investment of the deferred royalties may not achieve their intended effects; Sutton may require further deferrals of royalties beyond those contemplated by the current deferral agreement; DIV and its royalty partners performance in the remainder of 2025 may not meet management's expectations; DIV may not be able to make monthly dividend payments to the holders of its common shares; dividends are not guaranteed and may be reduced, suspended or terminated at any time; or DIV may not achieve any of its corporate objectives. Given these uncertainties, readers are cautioned that forward-looking information included in this news release is not a guarantee of future performance, and such forward-looking information should not be unduly relied upon. More information about the risks and uncertainties affecting DIV's business and the businesses of its royalty partners can be found in the 'Risk Factors' section of its Annual Information Form dated March 24, 2025 and in DIV's management's discussion and analysis for the three months ended March 31, 2025, copies of which are available under DIV's profile on SEDAR+ at . In formulating the forward-looking information contained herein, management has assumed that DIV will generate sufficient cash flows from its royalties to service its debt and pay dividends to shareholders; lenders will provide any necessary waivers required in order to allow DIV to continue to pay dividends; lenders will provide any other necessary covenant waivers to DIV and its royalty partners; the performance of DIV's royalty partners will be consistent with DIV's and its royalty partners' respective expectations; recent positive trends for certain of DIV's royalty partners (including their respective franchisees) will continue and not regress; current negative trends experienced by certain of DIV's royalty partners (including their respective franchisees) will not materially regress; Sutton will pay all deferred royalties in accordance with the required timing in full and will not require further deferrals; Sutton's investment of the deferred royalties will achieve its intended effects; the businesses of DIV's respective royalty partners will not suffer any material adverse effect; and the business and economic conditions affecting DIV and its royalty partners will continue substantially in the ordinary course, including without limitation with respect to general industry conditions, general levels of economic activity and regulations. These assumptions, although considered reasonable by management at the time of preparation, may prove to be incorrect. All of the forward-looking information in this news release is qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that it will have the expected consequences to, or effects on, DIV. The forward-looking information in this news release is made as of the date of this news release and DIV assumes no obligation to publicly update or revise such information to reflect new events or circumstances, except as may be required by applicable law. Non-IFRS Measures Management believes that disclosing certain non-IFRS financial measures, non-IFRS ratios and supplementary financial measures provides readers with important information regarding the Corporation's financial performance and its ability to pay dividends and the performance of its royalty partners. By considering these measures in combination with the most closely comparable IFRS measure, management believes that investors are provided with additional and more useful information about the Corporation and its royalty partners than investors would have if they simply considered IFRS measures alone. The non-IFRS financial measures, non-IFRS ratios and supplementary financial measures do not have standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS measures should not be construed as a substitute or an alternative to net income or cash flows from operating activities as determined in accordance with IFRS. 'Adjusted revenue', 'adjusted royalty income', 'DIV Royalty Entitlement' and 'distributable cash' are used as non-IFRS financial measures in this news release. Adjusted revenue is calculated as royalty income plus DIV Royalty Entitlement and management fees. The following table reconciles adjusted revenue and adjusted royalty income to royalty income, the most directly comparable IFRS measure disclosed in the financial statements: For further details with respect to adjusted revenue and adjusted royalty income, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at . The most closely comparable IFRS measure to DIV Royalty Entitlement is 'distributions received from NND LP'. DIV Royalty Entitlement is calculated as distributions received from NND LP, before any deduction for expenses incurred by NND Holdings Limited Partnership ('NND LP'), which expenses include legal, audit, tax and advisory services. Note that distributions received from NND LP is derived from the royalty paid by Nurse Next Door to NND LP. The following table reconciles DIV Royalty Entitlement to distributions received from NND LP in the financial statements: For further details with respect to DIV Royalty Entitlement, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at . The following table reconciles distributable cash to cash flows generated from operating activities, the most directly comparable IFRS measure disclosed in the financial statements: For further details with respect to distributable cash, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at . 'Distributable cash per share' and 'payout ratio' are non-IFRS ratios that do not have a standardized meaning prescribed by IFRS , and therefore may not be comparable to similar ratios presented by other issuers. Distributable cash per share is defined as distributable cash, a non-IFRS measure, divided by the weighted average number of common shares outstanding during the period. The payout ratio is calculated by dividing the dividends per share during the period by the distributable cash per share, a non-IFRS measure, generated in that period. For further details, refer to the subsection entitled 'Non-IFRS Ratios' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at . 'Weighted average organic royalty growth' is the average same store sales growth percentage related to Mr. Lube + Tires, Oxford and Mr. Mikes plus the average increase in adjusted royalty income from AIR MILES®, Sutton (less 20% deferral in Q1, 2025), Nurse Next Door, BarBurrito and Stratus over the prior comparable period taking into account the percentage weighting of each royalty partner's adjusted royalty income in proportion of the total adjusted royalty income for the period. Weighted average organic royalty growth is a supplementary financial measure and does not have a standardized meaning prescribed by IFRS. However, the Corporation believes that weighted average organic royalty growth is a useful measure as it provides investors with an indication of the change in year-over-year growth of each royalty partner, taking into account the percentage weighting of royalty partner's growth in proportion of total growth, as applicable. The Corporation's method of calculating weighted average organic royalty growth may differ from those of other issuers or companies and, accordingly, weighted average organic royalty growth may not be comparable to similar measures used by other issuers or companies. 'Same store sales growth' or 'SSSG' and 'system sales' are supplementary financial measures and do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. SSSG and system sales figures are reported to DIV by its Royalty Partners – see 'Third Party Information' . For further details, refer to the subsection entitled 'Supplementary Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at . Third Party Information This news release includes information obtained from third party company filings and reports and other publicly available sources as well as financial statements and other reports provided to DIV by its royalty partners. Although DIV believes these sources to be generally reliable, such information cannot be verified with complete certainty. Accordingly, the accuracy and completeness of this information is not guaranteed. DIV has not independently verified any of the information from third party sources referred to in this news release nor ascertained the underlying assumptions relied upon by such sources. THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE. Additional Information The information in this news release should be read in conjunction with DIV's consolidated financial statements and management's discussion and analysis ('MD&A') for the three months ended March 31, 2025, which are available on SEDAR+ at . Additional information relating to the Corporation and other public filings, is available on SEDAR+ at . Contact: Sean Morrison, President and Chief Executive Officer Diversified Royalty Corp. (236) 521-8470 Greg Gutmanis, Chief Financial Officer and VP Acquisitions Diversified Royalty Corp. (236) 521-8471
Yahoo
14-05-2025
- Business
- Yahoo
Diversified Royalty Corp. Announces First Quarter 2025 Results and Leadership Update
VANCOUVER, British Columbia, May 14, 2025 (GLOBE NEWSWIRE) -- Diversified Royalty Corp. (TSX: DIV and (the 'Corporation' or 'DIV') is pleased to announce its financial results for the three months ended March 31, 2025 ('Q1 2025') and an update to its leadership structure. Highlights The weighted average organic royalty growth1 of DIV's diversified royalty portfolio was 4.9% in Q1 2025, compared to 6.0% for the three months ended March 31, 2024 ('Q1 2024'). The weighted average organic royalty growth1 on a consistent currency basis was 3.9% in Q1 2025, compared to 6.0% in Q1 2024. Revenue was $15.6 million in Q1 2025, up 3.7%, compared to $15.1 million in Q1 2024. Adjusted revenue1 was $17.0 million in Q1 2025, up 3.6%, compared to $16.4 million in Q1 2024. Distributable cash1 was $11.1 million in Q1 2025, up 16.3%, compared to $9.6 million in Q1 2024. Payout ratio1 was 93.8% in Q1 2025 on dividends of $0.0625 per share ($0.2500 per share annualized), compared to 97.2% in Q1 2024 on dividends of $0.0611 per share ($0.2444 per share annualized), which is an annualized growth of 2.3% in dividends year-over-year. First Quarter Commentary Sean Morrison, President and Chief Executive Officer of DIV stated, 'The first quarter of 2025 once again saw a strong performance from our top royalty partner, Mr. Lube + Tires, which continues to produce strong growth across the system, generating SSSG6 of 9.5%. DIV's other variable royalty partners generated mixed results with both Oxford and Mr. Mikes generating positive SSSG in Q1. DIV's fixed royalty partners, Nurse Next Door, Stratus and BarBurrito made their fixed royalty payments. As previously announced, the deferral of 20% of Sutton's royalties that began in the fourth quarter of 2024 will continue to the end of 2025, to help Sutton invest in the business, and build on the positive momentum that began in the last quarter. DIV continues to see a decrease in royalty income from AIR MILES® because of the continued softness across the AIR MILES® Rewards Program.' 1. Adjusted revenue and distributable cash are non-IFRS financial measures, payout ratio is a non-IFRS ratio and weighted average organic royalty growth and Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. First Quarter Results Three months ended March 31, (000's) 2025 2024 Mr. Lube + Tires $ 7,180 $ 6,644 Stratusa 2,380 2,130 BarBurrito 2,129 2,100 Nurse Next Doorb 1,349 1,323 Oxford 1,249 1,182 Mr. Mikes 1,026 1,016 Sutton 899 1,096 AIR MILES® 756 892 Adjusted revenuec $ 16,968 $ 16,383 a) Stratus royalty income for the three months ended March 31, 2025, was US$1.7 million, translated at an average foreign exchange rate of $1.4344 to US$1 (March 31, 2024 - US$1.6 million, translated at a foreign exchange rate of $1.3483 to US$1).b) Represents the DIV Royalty Entitlement plus management fees received from Nurse Next Door.c) DIV Royalty Entitlement and adjusted revenue are non-IFRS financial measures and as such, do not have standardized meanings under IFRS. For additional information, refer to 'Non-IFRS Measures' in this news release. In Q1 2025, DIV generated $15.6 million of revenue compared to $15.1 million in Q1 2024. After taking into account the DIV Royalty Entitlement2 (defined below) related to DIV's royalty arrangements with Nurse Next Door, DIV's adjusted revenue2 was $17.0 million in Q1 2025, compared to $16.4 million in Q1 2024. Adjusted revenue increased primarily due to positive SSSG2 (defined below) at Mr. Lube + Tires, Oxford and Mr. Mikes, the annual contractual increases at Stratus, Nurse Next Door and BarBurrito, partially offset by lower royalty income from AIR MILES® and Sutton's 20% royalty deferral, all as discussed in further detail below. 2. Adjusted revenue and DIV Royalty Entitlement are non-IFRS financial measures and SSSG are supplementary financial measures – see 'Non-IFRS Measures' below. Royalty Partner Business Updates Mr. Lube + Tires: Mr. Lube + Tires generated SSSG3 of 9.5% for the Mr. Lube + Tires stores in the royalty pool for Q1 2025, compared to SSSG of 14.6% in Q1 2024. SSSG in the current period is primarily due to the sustained growth across the Mr. Lube + Tires system. 3. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. Stratus: Royalty income from SBS Franchising LLC ('Stratus') was $2.4 million (US$1.7 million translated at an average foreign exchange rate of $1.4344 to US$1.00) for Q1 2025. The fixed royalty payable by Stratus increases each November at a rate of 5% until and including November 2026 and 4% each November thereafter during the term of the license, with the most recent increase effective November 15, 2024. Nurse Next Door: The royalty entitlement to DIV (the 'DIV Royalty Entitlement4') from Nurse Next Door Professional Homecare Services Inc. ('Nurse Next Door') was $1.3 million in Q1 2025. The DIV Royalty Entitlement from Nurse Next Door grows at a fixed rate of 2.0% per annum during the term of the license, with the most recent increase effective October 1, 2024. 4. DIV Royalty Entitlement is a non-IFRS measure – see 'Non-IFRS Measures' below. Mr. Mikes: SSSG5 for the Mr. Mikes Restaurants Corporation ('Mr. Mikes') restaurants in the Mr. Mikes royalty pool was 1.5% in Q1 2025, compared to SSSG of -5.5% in Q1 2024. The higher SSSG percentage in the current period is due to an increase in restaurant guest traffic. Royalty income and management fees of $1.0 million were generated from Mr. Mikes for Q1 2025 and 2024, respectively. 5. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. Oxford: The Oxford Learning Centres, Inc. ('Oxford') locations in the Oxford royalty pool generated SSSG6 (on a constant currency basis) of 5.5% in Q1 2025, compared to SSSG -2.1% in Q1 2024. Oxford's positive SSSG for the quarter is due to the solid performance of the Oxford system during the quarter. 6. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. AIR MILES®: In Q1 2025, royalty income of $0.8 million was generated from the AIR MILES® Licenses compared to $0.9 million generated in Q1 2024, a decrease of 15.2% from the comparable quarter. The decrease is largely due to continued softness in the AIR MILES® Rewards Program. Sutton: In Q1 2025, royalty income of $0.9 million was generated from Sutton, which includes a 20% royalty deferral for Q1, 2025, compared to $1.1 million for Q1, 2024. The deferred royalties do not accrue interest and are due in full on December 31, 2027. The fixed royalty payable by Sutton increases at a rate of 2% per year, with the most recent increase effective July 1, 2024. BarBurrito: Royalty income from BarBurrito Restaurants Inc. ('BarBurrito') was $2.1 million for Q1 2025. The royalty payable by BarBurrito initially grows at a fixed rate of 4% per annum each March from and including March 2025 to and including March 2030 and, commencing on January 1, 2031, will fluctuate based on the gross sales of the BarBurrito locations in the royalty pool. Distributable Cash and Dividends Declared In Q1 2025, distributable cash7 increased to $11.1 million ($0.0666 per share), compared to $9.6 million ($0.0629 per share), in Q1 2024. The increase in distributable cash per share7 for the quarter was primarily due to an increase in distributable cash, partially offset by a higher weighted average number of common shares outstanding7. In Q1 2025, the payout ratio7 was 93.8% on dividends of $0.0625 per share, compared to the payout ratio of 97.2% on dividends of $0.0611 per share for the same respective period in 2024. The decrease to the payout ratio was primarily due to higher distributable cash per share7, partially offset by higher dividends declared per share7. 7. Distributable cash is a non-IFRS financial measure and distributable cash per share and payout ratio are non-IFRS ratios – see 'Non-IFRS Measures' below. Net Income Net income for Q1 2025 was $8.0 million compared to net income of $7.5 million for the three months ended March 31, 2024. The increase in net income in Q1 2025, was primarily due to the higher adjusted revenues8, lower interest expenses and share-based compensation expenses, partially offset by higher salaries and benefits, income tax expenses, and other finance costs. 8. Adjusted revenue is a non-IFRS financial measure – see 'Non-IFRS Measures' below. Availability of Annual General Meeting Materials and Leadership Update The proxy-related materials for DIV's upcoming Annual General meeting of shareholders (the 'Meeting') to be held on Thursday, June 19, 2025 are now available and have been posted under DIV's profile on SEDAR+ at and on DIV's website at: At the Meeting, shareholders will be asked to: (i) receive the consolidated financial statements of DIV for the fiscal year ended December 31, 2024, together with the report of the auditors thereon, (ii) elect directors of the Corporation for the ensuing year, and (iii) appoint KPMG LLP as auditors of the Corporation for the ensuing year and to authorize the directors of the Corporation to fix their remuneration. The Board is pleased to nominate Sean Morrison, our President and Chief Executive Officer, for election to the Board, alongside the current directors. The Board is also pleased to announce the promotion of Greg Gutmanis from Chief Financial Officer and Vice President, Acquisitions, to President and Chief Financial Officer, effective July 1, 2025. In his expanded role, Greg will assume greater responsibility for DIV's day-to-day operations, including oversight of our Royalty Partners' businesses, identifying and executing new acquisition opportunities, and engaging with DIV's shareholders and prospective investors. Greg has played a key role in DIV's growth since its inception. He is widely recognized within Vancouver's finance community, having received the 2020 BC CFO Award and being named one of Business in Vancouver's 'Top Forty Under 40' in 2017. During his tenure at DIV, Greg has managed approximately $400 million in equity and convertible debenture offerings and over $200 million in senior debt. Prior to joining DIV, he co-managed $165 million across two private equity funds and worked as an investment banker. Sean Morrison, stated, 'Greg's promotion to President and Chief Financial Officer is well deserved. I've had the pleasure of working with Greg for nearly 20 years in investment banking, private equity, and for the past decade at DIV. Greg is a consummate professional who continues to broaden his expertise and expand his leadership role each year. As continuing CFO and incoming President, I'm confident Greg will continue to grow his responsibilities, and I look forward to working closely with him to deliver value to DIV shareholders.' Sean will continue to lead DIV's strategic direction and overall business as its Chief Executive Officer. About Diversified Royalty Corp. DIV is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America. DIV's objective is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors. DIV currently owns the Mr. Lube + Tires, AIR MILES®, Sutton, Mr. Mikes, Nurse Next Door, Oxford Learning Centres, Stratus Building Solutions and BarBurrito trademarks. Mr. Lube + Tires is the leading quick lube service business in Canada, with locations across Canada. AIR MILES® is Canada's largest coalition loyalty program. Sutton is among the leading residential real estate brokerage franchisor businesses in Canada. Mr. Mikes operates casual steakhouse restaurants primarily in western Canadian communities. Nurse Next Door is a home care provider with locations across Canada and the United States as well as in Australia. Oxford Learning Centres is one of Canada's leading franchisee supplemental education services. Stratus Building Solutions is a leading commercial cleaning service franchise company providing comprehensive building cleaning, and office cleaning services primarily in the United States. BarBurrito is the largest quick service Mexican restaurant food chain in Canada. DIV's objective is to increase cash flow per share by making accretive royalty purchases and through the growth of purchased royalties. DIV intends to continue to pay a predictable and stable monthly dividend to shareholders and increase the dividend over time, in each case as cash flow per share allows. Forward-Looking Statements Certain statements contained in this news release may constitute 'forward-looking information' within the meaning of applicable securities laws that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. The use of any of the words 'anticipate', 'continue', 'estimate', 'expect', 'intend', 'may', 'will', 'project', 'should', 'believe', 'confident', 'plan' and 'intend' and similar expressions are intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Specifically, forward-looking information in this news release includes, but is not limited to, statements made in relation to: the deferral of Sutton Royalties continuing for the remainder of 2025 to help Sutton invest in the business and build on the positive momentum that began in the last quarter; the terms on which the deferred royalties are required to be paid by Sutton; the promotion of Greg Gutmanis to President and Chief Financial Officer effective July 1, 2025, and that Sean Morrisson will continue to lead DIV's strategic direction and overall business as Chief Executive Officer; details of DIV's upcoming Annual General Meeting; DIV's intention to pay monthly dividends to shareholders; and DIV's corporate objectives. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events, performance, or achievements of DIV to differ materially from those anticipated or implied by such forward-looking information. DIV believes that the expectations reflected in the forward-looking information included in this news release are reasonable but no assurance can be given that these expectations will prove to be correct. In particular, risks and uncertainties include: DIV's royalty partners may not make their respective royalty payments to DIV, in whole or in part; the decline in royalties received under the AIR MILES® licenses could cause AM Royalties Limited Partnership ('AM LP') to be required to make partial or full repayment of the outstanding principal amount under its credit agreement, or cause AM LP to be in default under its credit agreement; current positive trends being experienced by certain of DIV's royalty partners (and their respective franchisees) may not continue and may regress, and negative trends experienced by certain of DIV's Royalty Partners (including their respective franchisees) may continue and may regress; Sutton may not pay all deferred royalties in accordance with the timing required or at all; Sutton's investment of the deferred royalties may not achieve their intended effects; Sutton may require further deferrals of royalties beyond those contemplated by the current deferral agreement; DIV and its royalty partners performance in the remainder of 2025 may not meet management's expectations; DIV may not be able to make monthly dividend payments to the holders of its common shares; dividends are not guaranteed and may be reduced, suspended or terminated at any time; or DIV may not achieve any of its corporate objectives. Given these uncertainties, readers are cautioned that forward-looking information included in this news release is not a guarantee of future performance, and such forward-looking information should not be unduly relied upon. More information about the risks and uncertainties affecting DIV's business and the businesses of its royalty partners can be found in the 'Risk Factors' section of its Annual Information Form dated March 24, 2025 and in DIV's management's discussion and analysis for the three months ended March 31, 2025, copies of which are available under DIV's profile on SEDAR+ at In formulating the forward-looking information contained herein, management has assumed that DIV will generate sufficient cash flows from its royalties to service its debt and pay dividends to shareholders; lenders will provide any necessary waivers required in order to allow DIV to continue to pay dividends; lenders will provide any other necessary covenant waivers to DIV and its royalty partners; the performance of DIV's royalty partners will be consistent with DIV's and its royalty partners' respective expectations; recent positive trends for certain of DIV's royalty partners (including their respective franchisees) will continue and not regress; current negative trends experienced by certain of DIV's royalty partners (including their respective franchisees) will not materially regress; Sutton will pay all deferred royalties in accordance with the required timing in full and will not require further deferrals; Sutton's investment of the deferred royalties will achieve its intended effects; the businesses of DIV's respective royalty partners will not suffer any material adverse effect; and the business and economic conditions affecting DIV and its royalty partners will continue substantially in the ordinary course, including without limitation with respect to general industry conditions, general levels of economic activity and regulations. These assumptions, although considered reasonable by management at the time of preparation, may prove to be incorrect. All of the forward-looking information in this news release is qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that it will have the expected consequences to, or effects on, DIV. The forward-looking information in this news release is made as of the date of this news release and DIV assumes no obligation to publicly update or revise such information to reflect new events or circumstances, except as may be required by applicable law. Non-IFRS Measures Management believes that disclosing certain non-IFRS financial measures, non-IFRS ratios and supplementary financial measures provides readers with important information regarding the Corporation's financial performance and its ability to pay dividends and the performance of its royalty partners. By considering these measures in combination with the most closely comparable IFRS measure, management believes that investors are provided with additional and more useful information about the Corporation and its royalty partners than investors would have if they simply considered IFRS measures alone. The non-IFRS financial measures, non-IFRS ratios and supplementary financial measures do not have standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS measures should not be construed as a substitute or an alternative to net income or cash flows from operating activities as determined in accordance with IFRS. 'Adjusted revenue', 'adjusted royalty income', 'DIV Royalty Entitlement' and 'distributable cash' are used as non-IFRS financial measures in this news release. Adjusted revenue is calculated as royalty income plus DIV Royalty Entitlement and management fees. The following table reconciles adjusted revenue and adjusted royalty income to royalty income, the most directly comparable IFRS measure disclosed in the financial statements: Three months ended March 31, (000's) 2025 2024 Mr. Lube + Tires $ 7,120 $ 6,585 Stratus 2,380 2,130 BarBurrito 2,108 2,080 Oxford 1,238 1,172 Mr. Mikes 1,015 1,006 Sutton 871 1,068 AIR MILES® 756 892 Royalty income $ 15,488 $ 14,933 DIV Royalty Entitlement 1,329 1,303 Adjusted royalty income $ 16,817 $ 16,236 Management fees 151 147 Adjusted revenue $ 16,968 $ 16,383 For further details with respect to adjusted revenue and adjusted royalty income, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at The most closely comparable IFRS measure to DIV Royalty Entitlement is 'distributions received from NND LP'. DIV Royalty Entitlement is calculated as distributions received from NND LP, before any deduction for expenses incurred by NND Holdings Limited Partnership ('NND LP'), which expenses include legal, audit, tax and advisory services. Note that distributions received from NND LP is derived from the royalty paid by Nurse Next Door to NND LP. The following table reconciles DIV Royalty Entitlement to distributions received from NND LP in the financial statements: Three months ended March 31, (000's) 2025 2024 Distributions received from NND LP $ 1,325 $ 1,300 Add: NND Royalties LP expenses 4 3 DIV Royalty Entitlement 1,329 1,303 Less: NND Royalties LP expenses (4 ) (3 ) DIV Royalty Entitlement, net of NND Royalties LP expenses $ 1,325 $ 1,300 For further details with respect to DIV Royalty Entitlement, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at The following table reconciles distributable cash to cash flows generated from operating activities, the most directly comparable IFRS measure disclosed in the financial statements: Three months ended March 31, (000's) 2025 2024 Cash flows generated from operating activities $ 10,160 $ 10,850 Current tax expense (1,719 ) (1,291 ) Accrued interest on convertible debentures (788 ) (788 ) Accrued interest on bank loans (374 ) - Distributions on MRM units earned in current periods (48 ) (41 ) Mandatory principal payments on credit facilities - (628 ) Payment of lease obligations (28 ) (27 ) NND LP expenses (4 ) (3 ) Accrued DIV Royalty Entitlement, net of distributions 4 3 Foreign exchange and other 49 42 Changes in working capital 850 263 Taxes paid 3,036 1,498 Note receivable - (305 ) Distributable cash $ 11,138 $ 9,573 For further details with respect to distributable cash, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at 'Distributable cash per share' and 'payout ratio' are non-IFRS ratios that do not have a standardized meaning prescribed by IFRS, and therefore may not be comparable to similar ratios presented by other issuers. Distributable cash per share is defined as distributable cash, a non-IFRS measure, divided by the weighted average number of common shares outstanding during the period. The payout ratio is calculated by dividing the dividends per share during the period by the distributable cash per share, a non-IFRS measure, generated in that period. For further details, refer to the subsection entitled 'Non-IFRS Ratios' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at 'Weighted average organic royalty growth' is the average same store sales growth percentage related to Mr. Lube + Tires, Oxford and Mr. Mikes plus the average increase in adjusted royalty income from AIR MILES®, Sutton (less 20% deferral in Q1, 2025), Nurse Next Door, BarBurrito and Stratus over the prior comparable period taking into account the percentage weighting of each royalty partner's adjusted royalty income in proportion of the total adjusted royalty income for the period. Weighted average organic royalty growth is a supplementary financial measure and does not have a standardized meaning prescribed by IFRS. However, the Corporation believes that weighted average organic royalty growth is a useful measure as it provides investors with an indication of the change in year-over-year growth of each royalty partner, taking into account the percentage weighting of royalty partner's growth in proportion of total growth, as applicable. The Corporation's method of calculating weighted average organic royalty growth may differ from those of other issuers or companies and, accordingly, weighted average organic royalty growth may not be comparable to similar measures used by other issuers or companies. 'Same store sales growth' or 'SSSG' and 'system sales' are supplementary financial measures and do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. SSSG and system sales figures are reported to DIV by its Royalty Partners – see 'Third Party Information'. For further details, refer to the subsection entitled 'Supplementary Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at Third Party Information This news release includes information obtained from third party company filings and reports and other publicly available sources as well as financial statements and other reports provided to DIV by its royalty partners. Although DIV believes these sources to be generally reliable, such information cannot be verified with complete certainty. Accordingly, the accuracy and completeness of this information is not guaranteed. DIV has not independently verified any of the information from third party sources referred to in this news release nor ascertained the underlying assumptions relied upon by such sources. THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE. Additional Information The information in this news release should be read in conjunction with DIV's consolidated financial statements and management's discussion and analysis ('MD&A') for the three months ended March 31, 2025, which are available on SEDAR+ at Additional information relating to the Corporation and other public filings, is available on SEDAR+ at Contact:Sean Morrison, President and Chief Executive OfficerDiversified Royalty Corp. (236) 521-8470 Greg Gutmanis, Chief Financial Officer and VP Acquisitions Diversified Royalty Corp. (236) 521-8471Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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14-05-2025
- Business
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Diversified Royalty Corp. Announces First Quarter 2025 Results and Leadership Update
VANCOUVER, British Columbia, May 14, 2025 (GLOBE NEWSWIRE) -- Diversified Royalty Corp. (TSX: DIV and (the 'Corporation' or 'DIV') is pleased to announce its financial results for the three months ended March 31, 2025 ('Q1 2025') and an update to its leadership structure. Highlights The weighted average organic royalty growth1 of DIV's diversified royalty portfolio was 4.9% in Q1 2025, compared to 6.0% for the three months ended March 31, 2024 ('Q1 2024'). The weighted average organic royalty growth1 on a consistent currency basis was 3.9% in Q1 2025, compared to 6.0% in Q1 2024. Revenue was $15.6 million in Q1 2025, up 3.7%, compared to $15.1 million in Q1 2024. Adjusted revenue1 was $17.0 million in Q1 2025, up 3.6%, compared to $16.4 million in Q1 2024. Distributable cash1 was $11.1 million in Q1 2025, up 16.3%, compared to $9.6 million in Q1 2024. Payout ratio1 was 93.8% in Q1 2025 on dividends of $0.0625 per share ($0.2500 per share annualized), compared to 97.2% in Q1 2024 on dividends of $0.0611 per share ($0.2444 per share annualized), which is an annualized growth of 2.3% in dividends year-over-year. First Quarter Commentary Sean Morrison, President and Chief Executive Officer of DIV stated, 'The first quarter of 2025 once again saw a strong performance from our top royalty partner, Mr. Lube + Tires, which continues to produce strong growth across the system, generating SSSG6 of 9.5%. DIV's other variable royalty partners generated mixed results with both Oxford and Mr. Mikes generating positive SSSG in Q1. DIV's fixed royalty partners, Nurse Next Door, Stratus and BarBurrito made their fixed royalty payments. As previously announced, the deferral of 20% of Sutton's royalties that began in the fourth quarter of 2024 will continue to the end of 2025, to help Sutton invest in the business, and build on the positive momentum that began in the last quarter. DIV continues to see a decrease in royalty income from AIR MILES® because of the continued softness across the AIR MILES® Rewards Program.' 1. Adjusted revenue and distributable cash are non-IFRS financial measures, payout ratio is a non-IFRS ratio and weighted average organic royalty growth and Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. First Quarter Results Three months ended March 31, (000's) 2025 2024 Mr. Lube + Tires $ 7,180 $ 6,644 Stratusa 2,380 2,130 BarBurrito 2,129 2,100 Nurse Next Doorb 1,349 1,323 Oxford 1,249 1,182 Mr. Mikes 1,026 1,016 Sutton 899 1,096 AIR MILES® 756 892 Adjusted revenuec $ 16,968 $ 16,383 a) Stratus royalty income for the three months ended March 31, 2025, was US$1.7 million, translated at an average foreign exchange rate of $1.4344 to US$1 (March 31, 2024 - US$1.6 million, translated at a foreign exchange rate of $1.3483 to US$1).b) Represents the DIV Royalty Entitlement plus management fees received from Nurse Next Door.c) DIV Royalty Entitlement and adjusted revenue are non-IFRS financial measures and as such, do not have standardized meanings under IFRS. For additional information, refer to 'Non-IFRS Measures' in this news release. In Q1 2025, DIV generated $15.6 million of revenue compared to $15.1 million in Q1 2024. After taking into account the DIV Royalty Entitlement2 (defined below) related to DIV's royalty arrangements with Nurse Next Door, DIV's adjusted revenue2 was $17.0 million in Q1 2025, compared to $16.4 million in Q1 2024. Adjusted revenue increased primarily due to positive SSSG2 (defined below) at Mr. Lube + Tires, Oxford and Mr. Mikes, the annual contractual increases at Stratus, Nurse Next Door and BarBurrito, partially offset by lower royalty income from AIR MILES® and Sutton's 20% royalty deferral, all as discussed in further detail below. 2. Adjusted revenue and DIV Royalty Entitlement are non-IFRS financial measures and SSSG are supplementary financial measures – see 'Non-IFRS Measures' below. Royalty Partner Business Updates Mr. Lube + Tires: Mr. Lube + Tires generated SSSG3 of 9.5% for the Mr. Lube + Tires stores in the royalty pool for Q1 2025, compared to SSSG of 14.6% in Q1 2024. SSSG in the current period is primarily due to the sustained growth across the Mr. Lube + Tires system. 3. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. Stratus: Royalty income from SBS Franchising LLC ('Stratus') was $2.4 million (US$1.7 million translated at an average foreign exchange rate of $1.4344 to US$1.00) for Q1 2025. The fixed royalty payable by Stratus increases each November at a rate of 5% until and including November 2026 and 4% each November thereafter during the term of the license, with the most recent increase effective November 15, 2024. Nurse Next Door: The royalty entitlement to DIV (the 'DIV Royalty Entitlement4') from Nurse Next Door Professional Homecare Services Inc. ('Nurse Next Door') was $1.3 million in Q1 2025. The DIV Royalty Entitlement from Nurse Next Door grows at a fixed rate of 2.0% per annum during the term of the license, with the most recent increase effective October 1, 2024. 4. DIV Royalty Entitlement is a non-IFRS measure – see 'Non-IFRS Measures' below. Mr. Mikes: SSSG5 for the Mr. Mikes Restaurants Corporation ('Mr. Mikes') restaurants in the Mr. Mikes royalty pool was 1.5% in Q1 2025, compared to SSSG of -5.5% in Q1 2024. The higher SSSG percentage in the current period is due to an increase in restaurant guest traffic. Royalty income and management fees of $1.0 million were generated from Mr. Mikes for Q1 2025 and 2024, respectively. 5. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. Oxford: The Oxford Learning Centres, Inc. ('Oxford') locations in the Oxford royalty pool generated SSSG6 (on a constant currency basis) of 5.5% in Q1 2025, compared to SSSG -2.1% in Q1 2024. Oxford's positive SSSG for the quarter is due to the solid performance of the Oxford system during the quarter. 6. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. AIR MILES®: In Q1 2025, royalty income of $0.8 million was generated from the AIR MILES® Licenses compared to $0.9 million generated in Q1 2024, a decrease of 15.2% from the comparable quarter. The decrease is largely due to continued softness in the AIR MILES® Rewards Program. Sutton: In Q1 2025, royalty income of $0.9 million was generated from Sutton, which includes a 20% royalty deferral for Q1, 2025, compared to $1.1 million for Q1, 2024. The deferred royalties do not accrue interest and are due in full on December 31, 2027. The fixed royalty payable by Sutton increases at a rate of 2% per year, with the most recent increase effective July 1, 2024. BarBurrito: Royalty income from BarBurrito Restaurants Inc. ('BarBurrito') was $2.1 million for Q1 2025. The royalty payable by BarBurrito initially grows at a fixed rate of 4% per annum each March from and including March 2025 to and including March 2030 and, commencing on January 1, 2031, will fluctuate based on the gross sales of the BarBurrito locations in the royalty pool. Distributable Cash and Dividends Declared In Q1 2025, distributable cash7 increased to $11.1 million ($0.0666 per share), compared to $9.6 million ($0.0629 per share), in Q1 2024. The increase in distributable cash per share7 for the quarter was primarily due to an increase in distributable cash, partially offset by a higher weighted average number of common shares outstanding7. In Q1 2025, the payout ratio7 was 93.8% on dividends of $0.0625 per share, compared to the payout ratio of 97.2% on dividends of $0.0611 per share for the same respective period in 2024. The decrease to the payout ratio was primarily due to higher distributable cash per share7, partially offset by higher dividends declared per share7. 7. Distributable cash is a non-IFRS financial measure and distributable cash per share and payout ratio are non-IFRS ratios – see 'Non-IFRS Measures' below. Net Income Net income for Q1 2025 was $8.0 million compared to net income of $7.5 million for the three months ended March 31, 2024. The increase in net income in Q1 2025, was primarily due to the higher adjusted revenues8, lower interest expenses and share-based compensation expenses, partially offset by higher salaries and benefits, income tax expenses, and other finance costs. 8. Adjusted revenue is a non-IFRS financial measure – see 'Non-IFRS Measures' below. Availability of Annual General Meeting Materials and Leadership Update The proxy-related materials for DIV's upcoming Annual General meeting of shareholders (the 'Meeting') to be held on Thursday, June 19, 2025 are now available and have been posted under DIV's profile on SEDAR+ at and on DIV's website at: At the Meeting, shareholders will be asked to: (i) receive the consolidated financial statements of DIV for the fiscal year ended December 31, 2024, together with the report of the auditors thereon, (ii) elect directors of the Corporation for the ensuing year, and (iii) appoint KPMG LLP as auditors of the Corporation for the ensuing year and to authorize the directors of the Corporation to fix their remuneration. The Board is pleased to nominate Sean Morrison, our President and Chief Executive Officer, for election to the Board, alongside the current directors. The Board is also pleased to announce the promotion of Greg Gutmanis from Chief Financial Officer and Vice President, Acquisitions, to President and Chief Financial Officer, effective July 1, 2025. In his expanded role, Greg will assume greater responsibility for DIV's day-to-day operations, including oversight of our Royalty Partners' businesses, identifying and executing new acquisition opportunities, and engaging with DIV's shareholders and prospective investors. Greg has played a key role in DIV's growth since its inception. He is widely recognized within Vancouver's finance community, having received the 2020 BC CFO Award and being named one of Business in Vancouver's 'Top Forty Under 40' in 2017. During his tenure at DIV, Greg has managed approximately $400 million in equity and convertible debenture offerings and over $200 million in senior debt. Prior to joining DIV, he co-managed $165 million across two private equity funds and worked as an investment banker. Sean Morrison, stated, 'Greg's promotion to President and Chief Financial Officer is well deserved. I've had the pleasure of working with Greg for nearly 20 years in investment banking, private equity, and for the past decade at DIV. Greg is a consummate professional who continues to broaden his expertise and expand his leadership role each year. As continuing CFO and incoming President, I'm confident Greg will continue to grow his responsibilities, and I look forward to working closely with him to deliver value to DIV shareholders.' Sean will continue to lead DIV's strategic direction and overall business as its Chief Executive Officer. About Diversified Royalty Corp. DIV is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America. DIV's objective is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors. DIV currently owns the Mr. Lube + Tires, AIR MILES®, Sutton, Mr. Mikes, Nurse Next Door, Oxford Learning Centres, Stratus Building Solutions and BarBurrito trademarks. Mr. Lube + Tires is the leading quick lube service business in Canada, with locations across Canada. AIR MILES® is Canada's largest coalition loyalty program. Sutton is among the leading residential real estate brokerage franchisor businesses in Canada. Mr. Mikes operates casual steakhouse restaurants primarily in western Canadian communities. Nurse Next Door is a home care provider with locations across Canada and the United States as well as in Australia. Oxford Learning Centres is one of Canada's leading franchisee supplemental education services. Stratus Building Solutions is a leading commercial cleaning service franchise company providing comprehensive building cleaning, and office cleaning services primarily in the United States. BarBurrito is the largest quick service Mexican restaurant food chain in Canada. DIV's objective is to increase cash flow per share by making accretive royalty purchases and through the growth of purchased royalties. DIV intends to continue to pay a predictable and stable monthly dividend to shareholders and increase the dividend over time, in each case as cash flow per share allows. Forward-Looking Statements Certain statements contained in this news release may constitute 'forward-looking information' within the meaning of applicable securities laws that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. The use of any of the words 'anticipate', 'continue', 'estimate', 'expect', 'intend', 'may', 'will', 'project', 'should', 'believe', 'confident', 'plan' and 'intend' and similar expressions are intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Specifically, forward-looking information in this news release includes, but is not limited to, statements made in relation to: the deferral of Sutton Royalties continuing for the remainder of 2025 to help Sutton invest in the business and build on the positive momentum that began in the last quarter; the terms on which the deferred royalties are required to be paid by Sutton; the promotion of Greg Gutmanis to President and Chief Financial Officer effective July 1, 2025, and that Sean Morrisson will continue to lead DIV's strategic direction and overall business as Chief Executive Officer; details of DIV's upcoming Annual General Meeting; DIV's intention to pay monthly dividends to shareholders; and DIV's corporate objectives. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events, performance, or achievements of DIV to differ materially from those anticipated or implied by such forward-looking information. DIV believes that the expectations reflected in the forward-looking information included in this news release are reasonable but no assurance can be given that these expectations will prove to be correct. In particular, risks and uncertainties include: DIV's royalty partners may not make their respective royalty payments to DIV, in whole or in part; the decline in royalties received under the AIR MILES® licenses could cause AM Royalties Limited Partnership ('AM LP') to be required to make partial or full repayment of the outstanding principal amount under its credit agreement, or cause AM LP to be in default under its credit agreement; current positive trends being experienced by certain of DIV's royalty partners (and their respective franchisees) may not continue and may regress, and negative trends experienced by certain of DIV's Royalty Partners (including their respective franchisees) may continue and may regress; Sutton may not pay all deferred royalties in accordance with the timing required or at all; Sutton's investment of the deferred royalties may not achieve their intended effects; Sutton may require further deferrals of royalties beyond those contemplated by the current deferral agreement; DIV and its royalty partners performance in the remainder of 2025 may not meet management's expectations; DIV may not be able to make monthly dividend payments to the holders of its common shares; dividends are not guaranteed and may be reduced, suspended or terminated at any time; or DIV may not achieve any of its corporate objectives. Given these uncertainties, readers are cautioned that forward-looking information included in this news release is not a guarantee of future performance, and such forward-looking information should not be unduly relied upon. More information about the risks and uncertainties affecting DIV's business and the businesses of its royalty partners can be found in the 'Risk Factors' section of its Annual Information Form dated March 24, 2025 and in DIV's management's discussion and analysis for the three months ended March 31, 2025, copies of which are available under DIV's profile on SEDAR+ at In formulating the forward-looking information contained herein, management has assumed that DIV will generate sufficient cash flows from its royalties to service its debt and pay dividends to shareholders; lenders will provide any necessary waivers required in order to allow DIV to continue to pay dividends; lenders will provide any other necessary covenant waivers to DIV and its royalty partners; the performance of DIV's royalty partners will be consistent with DIV's and its royalty partners' respective expectations; recent positive trends for certain of DIV's royalty partners (including their respective franchisees) will continue and not regress; current negative trends experienced by certain of DIV's royalty partners (including their respective franchisees) will not materially regress; Sutton will pay all deferred royalties in accordance with the required timing in full and will not require further deferrals; Sutton's investment of the deferred royalties will achieve its intended effects; the businesses of DIV's respective royalty partners will not suffer any material adverse effect; and the business and economic conditions affecting DIV and its royalty partners will continue substantially in the ordinary course, including without limitation with respect to general industry conditions, general levels of economic activity and regulations. These assumptions, although considered reasonable by management at the time of preparation, may prove to be incorrect. All of the forward-looking information in this news release is qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that it will have the expected consequences to, or effects on, DIV. The forward-looking information in this news release is made as of the date of this news release and DIV assumes no obligation to publicly update or revise such information to reflect new events or circumstances, except as may be required by applicable law. Non-IFRS Measures Management believes that disclosing certain non-IFRS financial measures, non-IFRS ratios and supplementary financial measures provides readers with important information regarding the Corporation's financial performance and its ability to pay dividends and the performance of its royalty partners. By considering these measures in combination with the most closely comparable IFRS measure, management believes that investors are provided with additional and more useful information about the Corporation and its royalty partners than investors would have if they simply considered IFRS measures alone. The non-IFRS financial measures, non-IFRS ratios and supplementary financial measures do not have standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS measures should not be construed as a substitute or an alternative to net income or cash flows from operating activities as determined in accordance with IFRS. 'Adjusted revenue', 'adjusted royalty income', 'DIV Royalty Entitlement' and 'distributable cash' are used as non-IFRS financial measures in this news release. Adjusted revenue is calculated as royalty income plus DIV Royalty Entitlement and management fees. The following table reconciles adjusted revenue and adjusted royalty income to royalty income, the most directly comparable IFRS measure disclosed in the financial statements: Three months ended March 31, (000's) 2025 2024 Mr. Lube + Tires $ 7,120 $ 6,585 Stratus 2,380 2,130 BarBurrito 2,108 2,080 Oxford 1,238 1,172 Mr. Mikes 1,015 1,006 Sutton 871 1,068 AIR MILES® 756 892 Royalty income $ 15,488 $ 14,933 DIV Royalty Entitlement 1,329 1,303 Adjusted royalty income $ 16,817 $ 16,236 Management fees 151 147 Adjusted revenue $ 16,968 $ 16,383 For further details with respect to adjusted revenue and adjusted royalty income, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at The most closely comparable IFRS measure to DIV Royalty Entitlement is 'distributions received from NND LP'. DIV Royalty Entitlement is calculated as distributions received from NND LP, before any deduction for expenses incurred by NND Holdings Limited Partnership ('NND LP'), which expenses include legal, audit, tax and advisory services. Note that distributions received from NND LP is derived from the royalty paid by Nurse Next Door to NND LP. The following table reconciles DIV Royalty Entitlement to distributions received from NND LP in the financial statements: Three months ended March 31, (000's) 2025 2024 Distributions received from NND LP $ 1,325 $ 1,300 Add: NND Royalties LP expenses 4 3 DIV Royalty Entitlement 1,329 1,303 Less: NND Royalties LP expenses (4 ) (3 ) DIV Royalty Entitlement, net of NND Royalties LP expenses $ 1,325 $ 1,300 For further details with respect to DIV Royalty Entitlement, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at The following table reconciles distributable cash to cash flows generated from operating activities, the most directly comparable IFRS measure disclosed in the financial statements: Three months ended March 31, (000's) 2025 2024 Cash flows generated from operating activities $ 10,160 $ 10,850 Current tax expense (1,719 ) (1,291 ) Accrued interest on convertible debentures (788 ) (788 ) Accrued interest on bank loans (374 ) - Distributions on MRM units earned in current periods (48 ) (41 ) Mandatory principal payments on credit facilities - (628 ) Payment of lease obligations (28 ) (27 ) NND LP expenses (4 ) (3 ) Accrued DIV Royalty Entitlement, net of distributions 4 3 Foreign exchange and other 49 42 Changes in working capital 850 263 Taxes paid 3,036 1,498 Note receivable - (305 ) Distributable cash $ 11,138 $ 9,573 For further details with respect to distributable cash, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at 'Distributable cash per share' and 'payout ratio' are non-IFRS ratios that do not have a standardized meaning prescribed by IFRS, and therefore may not be comparable to similar ratios presented by other issuers. Distributable cash per share is defined as distributable cash, a non-IFRS measure, divided by the weighted average number of common shares outstanding during the period. The payout ratio is calculated by dividing the dividends per share during the period by the distributable cash per share, a non-IFRS measure, generated in that period. For further details, refer to the subsection entitled 'Non-IFRS Ratios' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at 'Weighted average organic royalty growth' is the average same store sales growth percentage related to Mr. Lube + Tires, Oxford and Mr. Mikes plus the average increase in adjusted royalty income from AIR MILES®, Sutton (less 20% deferral in Q1, 2025), Nurse Next Door, BarBurrito and Stratus over the prior comparable period taking into account the percentage weighting of each royalty partner's adjusted royalty income in proportion of the total adjusted royalty income for the period. Weighted average organic royalty growth is a supplementary financial measure and does not have a standardized meaning prescribed by IFRS. However, the Corporation believes that weighted average organic royalty growth is a useful measure as it provides investors with an indication of the change in year-over-year growth of each royalty partner, taking into account the percentage weighting of royalty partner's growth in proportion of total growth, as applicable. The Corporation's method of calculating weighted average organic royalty growth may differ from those of other issuers or companies and, accordingly, weighted average organic royalty growth may not be comparable to similar measures used by other issuers or companies. 'Same store sales growth' or 'SSSG' and 'system sales' are supplementary financial measures and do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. SSSG and system sales figures are reported to DIV by its Royalty Partners – see 'Third Party Information'. For further details, refer to the subsection entitled 'Supplementary Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months ended March 31, 2025, a copy of which is available on SEDAR+ at Third Party Information This news release includes information obtained from third party company filings and reports and other publicly available sources as well as financial statements and other reports provided to DIV by its royalty partners. Although DIV believes these sources to be generally reliable, such information cannot be verified with complete certainty. Accordingly, the accuracy and completeness of this information is not guaranteed. DIV has not independently verified any of the information from third party sources referred to in this news release nor ascertained the underlying assumptions relied upon by such sources. THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE. Additional Information The information in this news release should be read in conjunction with DIV's consolidated financial statements and management's discussion and analysis ('MD&A') for the three months ended March 31, 2025, which are available on SEDAR+ at Additional information relating to the Corporation and other public filings, is available on SEDAR+ at Contact:Sean Morrison, President and Chief Executive OfficerDiversified Royalty Corp. (236) 521-8470 Greg Gutmanis, Chief Financial Officer and VP Acquisitions Diversified Royalty Corp. (236) 521-8471Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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24-03-2025
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Diversified Royalty Corp. Announces Fourth Quarter and Year End 2024 Results
VANCOUVER, British Columbia, March 24, 2025 (GLOBE NEWSWIRE) -- Diversified Royalty Corp. (TSX: DIV and (the 'Corporation' or 'DIV') is pleased to announce its financial results for the three months ('Q4 2024') and year ended December 31, 2024. Highlights The weighted average organic royalty growth1 of DIV's diversified royalty portfolio was 5.9% in Q4 2024 and 5.0% for the year ended December 31, 2024, compared to 6.8% for the three months ended December 31, 2023 ('Q4 2023') and 8.4% for the year ended December 31, 2023. The weighted average organic royalty growth1 on a constant currency basis was 5.4% in Q4 2024 and 4.8% for the year ended December 31, 2024. Revenue was $17.0 million in Q4 2024 and $65.0 million for the year ended December 31, 2024, up 3.9% and 15.0%, respectively, compared to the same periods in 2023. Adjusted revenue1 was $18.4 million in Q4 2024 and $70.2 million for the year ended December 31, 2024, up 3.8% and 14.0%, respectively, compared to the same periods in 2023. Distributable cash1 was $12.6 million in Q4 2024 and $44.8 million for the year ended December 31, 2024, up 21.5% and 17.5%, respectively, compared to the same periods in 2023. Payout ratio1 was 82.3% in Q4 2024 based on dividends of $0.0625 per share for the quarter, compared to 84.2% in Q4 2023 based on dividends of $0.0609 per share for the comparable quarter and 90.0% for the year ended December 31, 2024 based on dividends of $0.2487 per share for the year, compared to 90.2% based on dividends of $0.2415 per share for the comparable year. In celebration of DIV's 10-year anniversary, we are proud to recognize the following: On October 6, 2014, we announced our name change to 'Diversified Royalty Corp.' DIV's very first dividend was $0.0157 per share, paid on November 28, 2014 The total dividends paid to shareholders since then is $269.1 million, or $2.25 per share Fourth Quarter Commentary Sean Morrison, President and Chief Executive Officer of DIV stated, 'Overall, DIV is pleased with how its royalty partners performed with weighted average organic royalty growth of 5.9% in Q4 2024 and 5.0% for the year ended December 31, 2024. As with all portfolios, there are varying degrees of performance within the portfolio. Mr. Lube, our largest royalty partner, continued to see strong double-digit growth, generating SSSG1 (defined below) of 12.0% for the three-month period ended December 31, 2024, and 10.5% for the year ended December 31, 2024. This exceptional performance is the result of Mr. Lube's management team working with their franchisees to share best practices and optimize the performance of each location. DIV's other variable royalty partners generated mixed results with Oxford generating positive SSSG and Mr. Mikes generating negative SSSG in Q4. DIV's fixed royalty partners, Nurse Next Door, Stratus and BarBurrito made their fixed royalty payments. DIV is deferring 20% of Sutton's royalties to help them invest in the business and build on the positive momentum in Q4. DIV continues to see a decrease in royalty income from AIR MILES® because of the loss of Metro as a loyalty partner and continued softness across the AIR MILES® Rewards Program.' 1. Adjusted revenue and distributable cash are non-IFRS financial measures, payout ratio is a non-IFRS ratio and weighted average organic royalty growth and Same-store-sales growth or SSSG are supplementary financial measures – see 'Non-IFRS Measures' below. Fourth Quarter Results Three months ended December 31, Year ended December 31, (000's) 2024 2023 2024 2023 Mr. Lube + Tires $ 8,602 $ 7,810 $ 31,190 $ 28,429 Stratusa 2,268 2,099 8,714 8,171 BarBurrito 2,101 2,032 8,403 2,032 Nurse Next Doorb 1,341 1,316 5,309 5,207 Oxford 1,206 1,162 4,530 4,521 Sutton 899 1,095 4,206 4,339 Mr. Mikes 1,040 1,130 4,226 4,570 AIR MILES® 896 1,044 3,640 4,352 Adjusted revenuec $ 18,352 $ 17,688 $ 70,218 $ 61,621 a) Stratus royalty income for the three months and year ended December 31, 2024, was US$1.6 million and US$6.4 million, respectively, translated at an average foreign exchange rate of $1.4000 and $1.3703 to US$1, respectively (three months and year ended December 31, 2023 – royalty income of US$1.5 million and US$6.1 million, respectively, translated at an average foreign exchange rate of $1.3610 and $1.3493 to US$1, respectively).b) Represents the DIV Royalty Entitlement plus management fees received from Nurse Next Door.c) DIV Royalty Entitlement and adjusted revenue are non-IFRS financial measures and as such, do not have standardized meanings under IFRS. For additional information, refer to 'Non-IFRS Measures' in this news release. In Q4 2024, DIV generated $17.0 million of revenue compared to $16.4 million in Q4 2023. After considering the DIV Royalty Entitlement2 (defined below) related to DIV's royalty arrangements with Nurse Next Door, DIV's adjusted revenue2 was $18.4 million in Q4 2024, compared to $17.7 million in Q4 2023. Adjusted revenue increased primarily due to incremental revenue received through the acquisition of the BarBurrito rights on October 4, 2023, positive SSSG2 at Mr. Lube + Tires and Oxford, the annual contractual royalty increases at Stratus and Nurse Next Door, partially offset by negative SSSG from Mr. Mikes and lower royalty income from AIR MILES® and the 20% deferral of the Sutton royalties, all as discussed in further detail below. 2. Adjusted revenue and DIV Royalty Entitlement are non-IFRS financial measures and SSSG are supplementary financial measures – see 'Non-IFRS Measures' below. Royalty Partner Business Updates Mr. Lube + Tires: Mr. Lube Canada Limited Partnership ('Mr. Lube + Tires') generated SSSG3 of 12.0% for the Mr. Lube + Tires stores in the royalty pool for Q4 2024 and 10.5% for the year ended December 31, 2024, compared to SSSG of 14.0% and 17.1%, for the same respective prior periods in 2023. 3. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. Stratus: Royalty income from SBS Franchising LLC ('Stratus') was $2.3 million (US$1.6 million translated at an average foreign exchange rate of $1.4000 to US$1.00) for Q4 2024 and $8.7 million (US$6.4 million translated at an average foreign exchange rate of $1.3703 to US$1.00) for the year ended December 31, 2024. The fixed royalty payable by Stratus increases each November at a rate of 5% until and including November 2026 and 4% each November thereafter during the term of the license, with the most recent increase effective November 15, 2024. Nurse Next Door: The royalty entitlement to DIV (the 'DIV Royalty Entitlement4') from Nurse Next Door Professional Homecare Services Inc. ('Nurse Next Door') was $1.3 million in Q4 2024 and $5.2 million for the year ended December 31, 2024. The DIV Royalty Entitlement from Nurse Next Door grows at a fixed rate of 2.0% per annum during the term of the license, with the most recent increase effective October 1, 2024. 4. DIV Royalty Entitlement is a non-IFRS measure – see 'Non-IFRS Measures' below. Mr. Mikes: SSSG5 for the Mr. Mikes Restaurants Corporation ('Mr. Mikes') restaurants in the Mr. Mikes royalty pool was -4.7% in Q4 2024 and -3.4% for the year ended December 31, 2024, compared to SSSG of 7.3% and 10.1%, for the same respective prior periods in 2023. The lower SSSG percentage in the current period is primarily due to lower restaurant guest traffic. In addition, in the comparable period, SSSG was measured against quarters that included the impact from COVID-19 related government regulations, including vaccine mandates. Royalty income and management fees of $1.0 million were generated by Mr. Mikes in Q4 2024, compared to $1.2 million in Q4 2023, which excludes approximately $0.05 million from the partial payment of deferred contractual royalty fees and accrued management fees. Royalty income and management fees of $4.2 million were generated for the year ended December 31, 2024, compared to $4.4 million generated for the year ended December 31, 2023, excluding approximately $0.18 million from the partial payment of deferred contractual royalty fees and accrued management fees. 5. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. Oxford: The Oxford Learning Centres, Inc. ('Oxford') locations in the Oxford royalty pool generated SSSG6 (on a constant currency basis) of 4.0% in Q4 2024 and 0.2% for the year ended December 31, 2024, compared to SSSG of -0.2% and 5.9%, for the same respective prior periods in 2023. Oxford's SSSG has returned to being positive after lapping the completion of the Ontario Government funding of student learning support, which included private tutoring, which funding completed in the first half of 2023. 6. Same-store-sales growth or SSSG is a supplementary financial measure – see 'Non-IFRS Measures' below. AIR MILES®: In Q4 2024, royalty income of $0.9 million was generated from the AIR MILES® Licenses compared to $1.0 million generated in Q4 2023, a decrease of 14.2% from the comparable quarter. For the year ended December 31, 2024, royalty income of $3.6 million was generated compared to $4.4 million generated in the comparable year, a decrease of 16.4%. The decrease is largely due to the loss of AIR MILES® sponsor Metro and continued softness in the AIR MILES® Rewards Program. Sutton: In Q4 2024, royalty income of $0.9 million was generated by Sutton, which is net of a 20% royalty deferral, compared to $1.1 million generated in Q4 2023. For the year ended December 31, 2024, royalty income of $4.1 million was generated, which includes a 20% royalty deferral for Q4, 2024, compared to $4.3 million generated in the comparable year. DIV and Sutton entered into a royalty deferral agreement during Q4 2024, which provides Sutton with a 20% deferral of royalties from October 1, 2024 to December 31, 2025. The deferred royalties do not accrue interest and are due in full on December 31, 2027. Sutton finished 2024 on a strong note, opening two new franchise locations in Q4 and has a growing pipeline of franchise opportunities across Canada. Sutton intends to invest the deferred royalties to complete the rebuild of its management team, increase investment in marketing, roll out its rebranded logo across Canada, increase business development, and build on the positive momentum that began in the back half of 2024. BarBurrito: Royalty income from BarBurrito Restaurants Inc. ('BarBurrito') was $2.1 million for Q4 2024 and $8.3 million for the year ended December 31, 2024. The royalty payable by BarBurrito initially grows at a fixed rate of 4% per annum each March from and including March 2025 to and including March 2030 and, commencing on January 1, 2031, will fluctuate based on the gross sales of the BarBurrito locations in the royalty pool. Distributable Cash and Dividends Declared In Q4 2024 and for the year ended December 31, 2024, distributable cash7 increased to $12.6 million ($0.0759 per share) and $44.8 million ($0.2762 per share), respectively, compared to $10.4 million ($0.0723 per share) and $38.1 million ($0.2671 per share), in the respective periods in 2023. The increase in distributable cash7 for the quarter was primarily due to higher adjusted revenue7, lower general and administrative expenses, lower professional fees, lower interest expense, and lower salaries and benefits. The increase in distributable cash7 for the year was primarily due to higher adjusted revenue7, lower general and administrative expenses, and lower professional fees, partially offset by higher interest expense and higher and salaries and benefits. The increase in distributable cash per share7 for the quarter and year end were primarily due to an increase in distributable cash, partially offset by a higher weighted average number of common shares outstanding. In Q4 2024 and for the year ended December 31, 2024, the payout ratio7 was 82.3% on dividends of $0.0625 per share and 90.0% on dividends of $0.2487 per share, respectively, compared to the payout ratio of 84.2% on dividends of $0.0609 per share and 90.2% on dividends of $0.2410 per share for the same respective periods in 2023. The decrease in payout ratio for the quarter and year end were primarily due to higher distributable cash per share7, partially offset by higher dividends declared per share. 7. Adjusted revenue and distributable cash are non-IFRS financial measures and distributable cash per share and payout ratio are non-IFRS ratios – see 'Non-IFRS Measures' below. Net Income Net income for Q4 2024 and for the year ended December 31, 2024, was $4.0 million and $26.6 million, respectively, compared to net income of $9.1 million and $31.7 million for the same respective periods in 2023. The decrease in net income in Q4 2024 was primarily due to impairment loss on intangible assets and higher share-based compensation expense, partially offset by higher adjusted revenue8 and lower general and administrative expenses, interest expense on credit facilities, and income tax expense. The decrease in net income for the year was primarily due to impairment loss on intangible assets, higher share-based compensation expense, salaries and benefits, and interest expense on credit facilities, partially offset by higher adjusted revenue8 and lower general and administrative expenses, and income tax expense. 8. Adjusted revenue is a non-IFRS financial measure – see 'Non-IFRS Measures' below. About Diversified Royalty Corp. DIV is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America. DIV's objective is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors. DIV currently owns the Mr. Lube + Tires, AIR MILES®, Sutton, Mr. Mikes, Nurse Next Door, Oxford Learning Centres, Stratus Building Solutions and BarBurrito trademarks. Mr. Lube + Tires is the leading quick lube service business in Canada, with locations across Canada. AIR MILES® is Canada's largest coalition loyalty program. Sutton is among the leading residential real estate brokerage franchisor businesses in Canada. Mr. Mikes operates casual steakhouse restaurants primarily in western Canadian communities. Nurse Next Door is a home care provider with locations across Canada and the United States as well as in Australia. Oxford Learning Centres is one of Canada's leading franchisee supplemental education services. Stratus Building Solutions is a leading commercial cleaning service franchise company providing comprehensive building cleaning, and office cleaning services primarily in the United States. BarBurrito is the largest quick service Mexican restaurant food chain in Canada. DIV's objective is to increase cash flow per share by making accretive royalty purchases and through the growth of purchased royalties. DIV intends to continue to pay a predictable and stable monthly dividend to shareholders and increase the dividend over time, in each case as cash flow per share allows. Forward-Looking Statements Certain statements contained in this news release may constitute 'forward-looking information' within the meaning of applicable securities laws that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. The use of any of the words 'anticipate', 'continue', 'estimate', 'expect', 'intend', 'may', 'will', 'project', 'should', 'believe', 'confident', 'plan' and 'intend' and similar expressions are intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Specifically, forward-looking information in this news release includes, but is not limited to, statements made in relation to: Sutton having a growing pipeline of franchise opportunities across Canada; Sutton intends to invest the deferred royalties to complete the rebuild of its management team, increase investment in marketing, roll out its rebranded logo across Canada, increase business development and build on the positive momentum that began in the back half of 2024; DIV's intention to pay monthly dividends to shareholders; and DIV's corporate objectives. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events, performance, or achievements of DIV to differ materially from those anticipated or implied by such forward-looking information. DIV believes that the expectations reflected in the forward-looking information included in this news release are reasonable but no assurance can be given that these expectations will prove to be correct. In particular, risks and uncertainties include: DIV's royalty partners may not make their respective royalty payments to DIV, in whole or in part; the decline in royalties received under the AIR MILES® licenses could cause AM Royalties Limited Partnership ('AM LP') to be required to make partial or full repayment of the outstanding principal amount under its credit agreement, or cause AM LP to be in default under its credit agreement; current positive trends being experienced by certain of DIV's royalty partners (and their respective franchisees) may not continue and may regress, and current negative trends experienced by certain of DIV's royalty partners (including their respective franchisees) may continue and may regress; DIV and its royalty partners performance may not meet management's expectations; DIV may not be able to make monthly dividend payments to the holders of its common shares; Sutton may not pay all deferred royalties in accordance with the timing required or at all; Sutton's investment of the deferred royalties may not achieve their intended effects; Sutton may require further deferrals of royalties beyond those contemplated by the current deferral agreement; dividends are not guaranteed and may be reduced, suspended or terminated at any time; or DIV may not achieve any of its corporate objectives. Given these uncertainties, readers are cautioned that forward-looking information included in this news release is not a guarantee of future performance, and such forward-looking information should not be unduly relied upon. More information about the risks and uncertainties affecting DIV's business and the businesses of its royalty partners can be found in the 'Risk Factors' section of its Annual Information Form dated March 24, 2025 and in DIV's management's discussion and analysis for the three months and year ended December 31, 2024, copies of which are available under DIV's profile on SEDAR+ at In formulating the forward-looking information contained herein, management has assumed that DIV will generate sufficient cash flows from its royalties to service its debt and pay dividends to shareholders; lenders will provide any necessary waivers required in order to allow DIV to continue to pay dividends; lenders will provide any other necessary covenant waivers to DIV and its royalty partners; the performance of DIV's royalty partners will be consistent with DIV's and its royalty partners' respective expectations; recent positive trends for certain of DIV's royalty partners (including their respective franchisees) will continue and not regress; current negative trends experienced by certain of DIV's royalty partners (including their respective franchisees) will not materially regress; Sutton will pay all deferred royalties in accordance with the required timing in full and will not require further deferrals; Sutton's investment of the deferred royalties will achieve its intended effects; the businesses of DIV's respective royalty partners will not suffer any material adverse effect; and the business and economic conditions affecting DIV and its royalty partners will continue substantially in the ordinary course, including without limitation with respect to general industry conditions, general levels of economic activity and regulations. These assumptions, although considered reasonable by management at the time of preparation, may prove to be incorrect. All of the forward-looking information in this news release is qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that it will have the expected consequences to, or effects on, DIV. The forward-looking information in this news release is made as of the date of this news release and DIV assumes no obligation to publicly update or revise such information to reflect new events or circumstances, except as may be required by applicable law. Non-IFRS Measures Management believes that disclosing certain non-IFRS financial measures, non-IFRS ratios and supplementary financial measures provides readers with important information regarding the Corporation's financial performance and its ability to pay dividends and the performance of its royalty partners. By considering these measures in combination with the most closely comparable IFRS measure, management believes that investors are provided with additional and more useful information about the Corporation and its royalty partners than investors would have if they simply considered IFRS measures alone. The non-IFRS financial measures, non-IFRS ratios and supplementary financial measures do not have standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS measures should not be construed as a substitute or an alternative to net income or cash flows from operating activities as determined in accordance with IFRS. 'Adjusted revenue', 'adjusted royalty income', 'DIV Royalty Entitlement' and 'distributable cash' are used as non-IFRS financial measures in this news release. Adjusted revenue is calculated as royalty income plus DIV Royalty Entitlement and management fees. The following table reconciles adjusted revenue and adjusted royalty income to royalty income, the most directly comparable IFRS measure disclosed in the financial statements: Three months ended December 31, Year ended December 31, (000's) 2024 2023 2024 2023 Mr. Lube + Tires $ 8,543 $ 7,750 $ 30,953 $ 28,196 Stratus 2,269 2,099 8,714 8,171 BarBurrito 2,080 2,013 8,320 2,013 Oxford 1,194 1,152 4,487 4,481 Sutton 872 1,068 4,096 4,229 Mr. Mikes 1,025 1,115 4,181 4,520 AIR MILES® 896 1,044 3,640 4,352 Royalty income $ 16,879 $ 16,241 $ 64,391 $ 55,962 DIV Royalty Entitlement 1,320 1,295 5,228 5,126 Adjusted royalty income $ 18,199 $ 17,536 $ 69,619 $ 61,088 Management fees 153 152 599 533 Adjusted revenue $ 18,352 $ 17,688 $ 70,218 $ 61,621 For further details with respect to adjusted revenue and adjusted royalty income, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months and year ended December 31, 2024, a copy of which is available on SEDAR+ at The most closely comparable IFRS measure to DIV Royalty Entitlement is 'distributions received from NND LP'. DIV Royalty Entitlement is calculated as distributions received from NND LP, before any deduction for expenses incurred by NND Holdings Limited Partnership ('NND LP'), which expenses include legal, audit, tax and advisory services. Note that distributions received from NND LP is derived from the royalty paid by Nurse Next Door to NND LP. The following table reconciles DIV Royalty Entitlement to distributions received from NND LP in the financial statements: Three months ended December 31, Year ended December 31, (000's) 2024 2023 2024 2023 Distributions received from NND LP $ 1,314 $ 1,284 $ 5,197 $ 5,095 Add: NND Royalties LP expenses 2 2 27 22 DIV Royalty Entitlement 1,316 1,286 5,224 5,117 Less: NND Royalties LP expenses (2 ) (2 ) (27 ) (22 ) DIV Royalty Entitlement, net of NND Royalties LP expenses $ 1,314 $ 1,284 $ 5,197 $ 5,095 For further details with respect to DIV Royalty Entitlement, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months and year ended December 31, 2024, a copy of which is available on SEDAR+ at The following table reconciles distributable cash to cash flows generated from operating activities, the most directly comparable IFRS measure disclosed in the financial statements: Three months ended December 31, Year ended December 31, (000's) 2024 2023 2024 2023 Cash flows generated from operating activities $ 11,724 $ 7,400 $ 46,491 $ 30,816 Current tax expense (1,300 ) (845 ) (6,516 ) (5,061 ) Accrued interest on convertible debentures 788 788 - - Accrued interest on bank loans (13 ) - (438 ) - Distributions on MRM units earned in current periods (34 ) (38 ) (138 ) (164 ) Mandatory principal payments on credit facilities - (577 ) (643 ) (1,008 ) Payment of lease obligations (28 ) (28 ) (110 ) (107 ) NND LP expenses (2 ) (2 ) (27 ) (22 ) Accrued DIV Royalty Entitlement, net of distributions 2 - 27 - Foreign exchange and other (13 ) 394 146 229 Changes in working capital (33 ) (527 ) 303 3,579 Transactions costs - 32 - 32 Taxes paid 1,512 1,648 6,012 7,691 Note receivable - 2,130 (305 ) 2,130 Distributable cash $ 12,603 $ 10,376 $ 44,802 $ 38,115 For further details with respect to distributable cash, refer to the subsection 'Non-IFRS Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months and year ended December 31, 2024, a copy of which is available on SEDAR+ at 'Distributable cash per share' and 'payout ratio' are non-IFRS ratios that do not have a standardized meaning prescribed by IFRS, and therefore may not be comparable to similar ratios presented by other issuers. Distributable cash per share is defined as distributable cash, a non-IFRS measure, divided by the weighted average number of common shares outstanding during the period. The payout ratio is calculated by dividing the dividends per share during the period by the distributable cash per share, a non-IFRS measure, generated in that period. For further details, refer to the subsection entitled 'Non-IFRS Ratios' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months and year ended December 31, 2024, a copy of which is available on SEDAR+ at 'Weighted average organic royalty growth' is the average same store sales growth percentage related to Mr. Lube + Tires, Oxford and Mr. Mikes (excluding the collection of Mr. Mikes deferred royalty management fees) plus the average increase in adjusted royalty income from AIR MILES®, Sutton (less 20% deferral in Q4, 2024), Nurse Next Door and Stratus over the prior comparable period taking into account the percentage weighting of each royalty partner's adjusted royalty income in proportion of the total adjusted royalty income for the period, excluding BarBurrito as there was no full-period adjusted royalty income generated from BarBurrito in the prior period. Weighted average organic royalty growth is a supplementary financial measure and does not have a standardized meaning prescribed by IFRS. However, the Corporation believes that weighted average organic royalty growth is a useful measure as it provides investors with an indication of the change in year-over-year growth of each royalty partner, taking into account the percentage weighting of royalty partner's growth in proportion of total growth, as applicable. The Corporation's method of calculating weighted average organic royalty growth may differ from those of other issuers or companies and, accordingly, weighted average organic royalty growth may not be comparable to similar measures used by other issuers or companies. 'Same store sales growth' or 'SSSG' and 'system sales' are supplementary financial measures and do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. SSSG and system sales figures are reported to DIV by its Royalty Partners – see 'Third Party Information'. For further details, refer to the subsection entitled 'Supplementary Financial Measures' under 'Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures' in the Corporation's management's discussion and analysis for the three months and year ended December 31, 2024, a copy of which is available on SEDAR+ at Third Party Information This news release includes information obtained from third party company filings and reports and other publicly available sources as well as financial statements and other reports provided to DIV by its royalty partners. Although DIV believes these sources to be generally reliable, such information cannot be verified with complete certainty. Accordingly, the accuracy and completeness of this information is not guaranteed. DIV has not independently verified any of the information from third party sources referred to in this news release nor ascertained the underlying assumptions relied upon by such sources. THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE. Additional Information The information in this news release should be read in conjunction with DIV's consolidated financial statements and management's discussion and analysis ('MD&A') for the three months and year ended December 31, 2024, which are available on SEDAR+ at Additional information relating to the Corporation and other public filings, is available on SEDAR+ at Contact:Sean Morrison, President and Chief Executive OfficerDiversified Royalty Corp. (236) 521-8470 Greg Gutmanis, Chief Financial Officer and VP Acquisitions Diversified Royalty Corp. (236) 521-8471Sign in to access your portfolio
