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Operator: Hello. This is the Chorus Call conference operator. Thank you for standing by. Welcome to Boston Pizza's Fourth Quarter Conference Call. [Operator Instructions] The conference is being recorded on February 13, 2026. [Operator Instructions] At this time, I would like to turn the conference over to Michael Harbinson, Chief Financial Officer. Please go ahead.
Michael Harbinson: Very good. Thank you, and welcome to the call. Today, we'll be discussing the 2025 Fourth Quarter Results for both Boston Pizza Royalties Income Fund or the Fund, and for Boston Pizza International, or BPI. For complete details on our financial results, please see our fourth quarter materials filed earlier today on SEDAR+ or visit the Fund's website at www.bpincomefund.com. Should you require additional information after the call, you can reach out to our Investor Relations e-mail address at investorrelations@bostonpizza.com. The Fund is a limited purpose, open-ended trust established under the laws of British Columbia to acquire indirectly certain trademarks and trade names used by BPI in its Boston Pizza Restaurants in Canada. BPI pays royalty income and distribution income to the Fund based on franchise revenue of Royalty Pool restaurants. For a complete description of the Fund and its business, please see the annual information form filed earlier today on SEDAR+. Before I turn the call over to Jordan Holm, President of BPI, I would like to note that certain information in the following discussion may constitute forward-looking information. For a more complete definition of forward-looking information and the associated risks, please refer to the Fund's management discussion and analysis issued earlier today. Forward-looking information is provided as of the date of this call, and except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances. And with that, I will now turn the call over to Jordan. Jordan?
Jordan Holm: Thank you, Michael, and welcome, everyone, to Boston Pizza's fourth quarter investor conference call. Today, I'll be discussing our fourth quarter results and share a brief outlook and Michael will summarize our key financial highlights. As usual, we'll leave time for your questions at the end of today's call. In the fourth quarter, Boston Pizza continued to deliver strong sales results, sustaining the momentum built throughout the preceding quarters of 2025. This strong performance was hallmarked by Boston Pizza Restaurants achieving the highest annual total franchise sales ever recorded in 2025. These results were achieved despite mounting trade tensions and broader macroeconomic uncertainties underscoring the resilience and strength of our business. The Fund posted franchise sales from restaurants in the Royalty Pool of $244.4 million for the fourth quarter and $976.3 million for the year, representing increases of 4.3% and 4.8%, respectively, versus the same periods 1 year ago. Same restaurant sales or SRS, was 3.7% for the fourth quarter and 4.7% for the year. SRS for the fourth quarter was principally due to continued momentum in takeout and delivery and effective promotional initiatives. The major league baseball playoffs also positively impacted SRS for the period. For the year, SRS was principally due to continued momentum in takeout delivery, effective promotional initiatives and favorable comparisons to a softer performance in the prior year. Hockey and baseball playoffs also positively impacted SRS for the year. From a marketing perspective, we kicked off the fourth quarter with the exciting launch of our game day menu in coordination with the football season, offering value deals for food and beverages and holding weekly giveaways with prizes such as free food and football merchandise. Our game day promotion was complemented by extensive TV, digital and social media coverage to boost guest engagement. The fourth quarter also saw the launch of our holiday menu with new festive menu creations from both food and beverages. This included the Pepperoni Stinger Pizza and Stuffed Crust Mozza Sticks, both of which quickly became guest favorites and will become part of our core menu offering going forward. Complementing the holiday menu was our annual gift card incentive program, where guests who purchase $50 or more in gift cards receive a $10 promotional card redeemable from January to March of 2026. In terms of restaurant development, 9 Boston Pizza restaurants were renovated during the fourth quarter and 40 restaurants were renovated in total during the year. We have an array of exciting initiatives lined up for the first quarter of 2026 designed to maintain our strong sales momentum. I'll continue -- I'll share the details with you shortly. But first, let's hear from Michael about the Fund's financial performance. Michael?
Michael Harbinson: Thank you, Jordan. The Fund posted royalty income of $9.8 million for the fourth quarter and $39.1 million for the year compared to $9.4 million and $37.3 million, respectively, for the same periods 1 year ago. The Fund posted distribution income of $3.2 million for the fourth quarter and $12.8 million for the year compared to $3.1 million and $12.2 million, respectively, for the same periods 1 year ago. Royalty income and distribution income for the fourth quarter and year were based on the 372 Boston Pizza restaurants in the Royalty Pool which reported franchise sales of $244.4 million and $976.3 million, respectively. For the same periods in 2024, the Royalty Pool reported franchise sales of $234.2 million and $931.7 million. The Fund's net and comprehensive income was $11.1 million for the fourth quarter compared to $6.6 million for the fourth quarter of 2024. The $4.5 million increase in the Fund's net and comprehensive income for the fourth quarter compared to the same period in 2024 was primarily due to a $5.7 million increase in fair value gain and a $0.6 million increase in royalty income and distribution income, all partially offset by a $1.5 million increase in income tax expense and a $0.3 million increase in net interest expense. The Fund's net and comprehensive income was $42.2 million for the year compared to $31.9 million in 2024. The $10.3 million increase in the Fund's net and comprehensive income for the year compared to 2024 was primarily due to a $10.7 million increase in fair value gain, a $2.4 million increase in royalty income and distribution income and a $2.2 million decrease in administrative expenses, partially offset by a $2.6 million increase in income tax expense and a $0.3 million increase in net interest expense. The Fund's cash flows generated from operating activities for the fourth quarter was $9.9 million compared to $9.4 million in the fourth quarter of 2024. The increase of $0.5 million was primarily due to an increase in royalty income and distribution income of $0.6 million and an increase in royalty income and distribution income of sorry, and increase in changes in working capital of $0.1 million, partially offset by an increase in income taxes paid of $0.2 million. Cash flows generated from operating activities for the year was $39.7 million compared to $38.1 million in 2024. The increase of $1.6 million was primarily due to an increase in royalty income and distribution income of $2.4 million, a decrease in administrative expenses of $0.2 million partially offset by an increase in income taxes paid of $0.7 million, a decrease in changes in working capital of $0.2 million and a decrease in interest received of $0.1 million. While net and comprehensive income or loss and cash flows from operating activities are both measures under IFRS accounting standards or IFRS, the Fund is of the view that net income or loss and cash flows from operating activities do not provide the most meaningful measurement of the Fund's ability to pay distributions. Net income contains noncash items that do not affect the Fund's cash flows, whereas cash flows from operating activities is not inclusive of all of the Fund's cash required outflows, and therefore, is not indicative of the cash available for distribution to unitholders. Noncash items include fair value adjustments on the investment in Boston Pizza Canada Limited Partnership, the Class B unit liability, interest rate swaps and changes in deferred income taxes. Consequently, the Fund reports the non-IFRS metrics of distributable cash and payout ratio to provide investors with, in the Fund's opinion, more meaningful information regarding the Fund's ability to pay distributions to unitholders. The Fund generated distributable cash of $7.9 million for the fourth quarter compared to $7.5 million for the same period in 2024. The increase in distributable cash of $0.4 million or 5.1% was primarily due to an increase in cash flows generated from operating activities of $0.5 million, partially offset by a $0.1 million increase in BPI Class B unit entitlement. The Fund generated distributable cash of $31.6 million for the year compared to $30.4 million in 2024. The increase in distributable cash of $1.2 million or 4.1% was primarily due to an increase in cash flows generated from operating activities of $1.6 million partially offset by higher Class B unit entitlement of $0.2 million and higher interest paid on debt of $0.1 million. The Fund generated distributable cash per unit of $0.369 for the fourth quarter and $1.487 for the year compared to $0.351 and $1.429, respectively, for the same periods in 2024. The increase in distributable cash per unit of $0.018 or 5.1% for the fourth quarter was primarily due to the increase in distributable cash discussed earlier. For the year, the increase in distributable cash per unit of $.058 or 4.1% was primarily due to the increase in distributable cash discussed earlier. As Jordan highlighted previously, during the fourth quarter, Boston Pizza broke its record for the highest year for total franchise sales in the brand's history, enabling the fund to issue a special cash distribution of $0.11. This special distribution was declared on December 8, 2025 and paid to unitholders on December 31, 2025. The special distribution effect of the fund's payout ratio for the fourth quarter and year. The fund's payout ratio for the fourth quarter was 127.3% compared to 118.4% in the fourth quarter of 2024. The increase in the fund's payout ratio for the fourth quarter was due to distributions paid increasing by $1.1 million or 13%, including the special distribution, partly offset by distributable cash increasing by $0.4 million or 5.1%. For the year, the fund's payout ratio was 101.9% compared to 99.9% in 2024. The increase in the fund's payout ratio for the year was due to distributions paid increasing by $1.9 million or 6.2% including the special distribution, partially offset by distributable cash increasing by $1.2 million or 4.1%. For illustration, the payout ratio for the fourth quarter and the year would have been 97.5% and 94.5%, respectively, without taking a special distribution into account. The fund's payout ratio fluctuates quarter-to-quarter depending on the amount of distributions paid during a quarter and the amount of distributable cash generated during that quarter. On February 12, 2026, the trustees of the fund approved a cash distribution for the period of January 1, 2026 to January 31, 2026, of $0.12 per unit and that will be paid on February 27, 2026 to unitholders of record at the close of business on February 21, 2026. The trustees objective in setting a monthly distribution amount is simply that it be sustainable. The trustees will continue to closely monitor the funds available cash balances given the fluctuating economic outlook. And with that, I will turn the call back over to Jordan for more on the outlook. Jordan?
Jordan Holm: Thank you, Michael. We are excited to begin 2026 with a lineup of guest favorite campaigns. Boston Pizza launched its first quarter with the Popular Pasta Tuesday all month long promotion in January, giving guests the chance to enjoy pastas every day of the week starting at just $11.99 with gourmet pastas available for $15.99. Additionally, to celebrate the NFL playoff season, we partnered with Pepsi to offer guests the chance to win exclusive NFL prizes, including a trip to a regular season football game. Tomorrow, February 14, we'll be celebrating one of our favorite traditions, Valentine's Day with heart-shaped pizzas at Boston Pizza. For every pizza sold, $1 will be donated to help support local charities in our communities. Further into 2026, we'll be activating on marketing opportunities and supporting franchisees to engage with our communities to cheer on Canadian athletes in the Olympics and in the World Cup. As we enter 2026, we aim to build on the strong momentum of the past year, continuing to monitor the evolving trade landscape and proactively adapting our business to support Boston Pizza Restaurants across Canada. We are encouraged by our sustained performance and remain committed to elevating the guest experience, supporting our franchisees and driving long-term sustainable growth through innovation and operational excellence. With that, I'd like to begin the question-and-answer session. Operator?
Operator: [Operator Instructions] The first question comes from Nick Corcoran with Acumen Capital.
Nick Corcoran: Congrats on the record quarter and record year.
Jordan Holm: Thank you, Nick.
Nick Corcoran: Just a couple of questions for me. The first is you're lapping the GST holiday that was the end of '24 and went to '25. I'm just wondering if you saw any impact either in your fourth quarter results or if you've seen anything in your -- I understand you're only a few weeks into '26, but any impact from that?
Jordan Holm: Michael, do you want to take that one?
Michael Harbinson: So the GST holiday last year a stretched into the -- from December into January, and its impact, I think, on the business was most pronounced in December. So as we lapped kind of December with December. I think elsewhere we saw some impact. But just to put that in context, it wasn't -- the magnitude of that wasn't overly significant. And then in terms of the forward kind of looking aspect of that, without saying anything kind of too substantive, the kind of January over January impact was negligible. I would say, it wasn't overly significant.
Nick Corcoran: Good. And then with the Olympics, are you expecting an uptick in traffic as well?
Jordan Holm: Yes, we are. And certainly, some of the events of the Winter Olympics are more popular for I'll say, community viewing or viewing in restaurants versus other ones that are more often enjoyed at home, hockey, women's and men's tend to be the 2 larger team sport draws, I'll say. So as those progress into the metal rounds, we expect people to be coming out to Boston Pizza restaurants to celebrate the games together. And the further those go and the more meaningful the games are. There is, of course, the consideration of time zone when the Olympics are over in Europe. But nonetheless, a semifinal or a gold medal game, should we reach that for either men's or women hockey or other sports when it's a gold medal on the line. We definitely have plans in place to make sure that Boston Pizza is the destination to watch those events.
Nick Corcoran: Great. And you had a pretty good year, I think, for renovation. Any indication of what you're expecting for 2026?
Jordan Holm: Yes. We had 40 renovations last year, which was an increase of 12 from 28 the prior year. So we were pleased with the number of renovations completed in 2025. And that's about the number that we're looking at for this year capacity-wise, it's a lot of projects, a lot of work with our franchisees to schedule with our construction teams those different upgrades to the interior and exterior of the restaurants. But we're really encouraged by the motivation, the engagement of our franchisees in moving forward with the renovations. They are required under our franchise agreement every 7 years. So that's the legal requirement. But nonetheless, we get franchisees reaching out talking to people who have just completed renovations, looking at things like audiovisual investments, tend to be a large part of the upgrade that the guest-facing element of the renovation impacts. So yes, we'll be in that neighborhood of about 40 renovations in fact, in this time of year when restaurants can be a little bit quieter in some locations. We'll often take that opportunity to close down for a week or 10 days and complete a substantial renovation. So we're already off and running in rentals for 2026.
Nick Corcoran: Great. And maybe one last question for me. How is the pipeline for new restaurants.
Jordan Holm: Yes. So Boston Pizza has a history of continuing to grow, and we have franchising and real estate teams east, west and Quebec-based looking at new opportunities for growth. Traditionally, our growth has come kind of 50% with existing franchisees and 50% with new investors, and that has continued to be the case. We haven't had as many growth opportunities in the last couple of years, including no new restaurants opening in 2025, but we do have projects underway for 2026. We don't give a forecast of exactly the number, but -- and sometimes the reason we don't do that is that it does depend on construction schedules and permitting and those kinds of things. But we -- 2 things, we have projects underway, 1 in BC and 1 in Ontario, in particular, that were originally intended to be 2025 openings that got pushed into 2026. So they'll open relatively earlier in the year, just based on completing those projects. And then we've got others in the pipeline for later in the year. And beyond that, we have lots of pins and maps of locations that we have franchisees who have expressed interest in. We've got underserviced, full-service restaurant marketplaces out there. And because of the resilience and the diversity of the guests -- the resilience of our platform, having takeout delivery, dining rooms, sports bar patio, we can go into markets like Hope, British Columbia, which we entered in 2024 that are relatively small communities, but have great trade areas and can -- to grow into our national average of about $3.3 million of average sales per location. So the development pipeline is heating up for us, and we're looking forward to reporting back as the quarters progress in 2026 on our new restaurant openings.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Jordan Holm for any closing remarks.
Jordan Holm: Thank you, operator. With no further questions, we'd like to thank you all for taking the time to join us today. As we have closed out 2025 and on behalf of everyone at Boston Pizza International, we want to express our deepest gratitude to our loyal guests, and thank you for your unwavering support. To our dedicated staff and franchisees, we appreciate your hard work and passion. To our business partners, we value your collaboration. And to the incredible communities we are honored to serve, thank you for welcoming us into your lives. You are an essential part of the Boston Pizza family. We wish you all a happy Valentine's Day, and we invite you to celebrate with a heart shaped pizza at your local Boston Pizza where $1 from every pizza sold goes to a charitable cause in your local community, and we look forward to reconnecting with you all during our first quarter conference call in May 2026. Thank you all, and have a wonderful day.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.