Operator: Hello. This is Chorus Call conference operator. Thank you for standing by. Welcome to Boston Pizza's second quarter conference call. As a reminder, all participants are in listen only mode. And the conference is being recorded on 08/13/2026. After the presentation, there will be an opportunity to ask questions. Participants on the call may also pose their questions via e mail to Boston Pizza's Investor Relations department at investorrelations@bostonpizza.com. Should you need assistance during the conference, you may reach an-- At this time, I would like to turn the conference over to Michael Harbinson, Chief Financial Officer. Please go ahead.
Michael Harbinson: Good morning, and welcome to the call. Today, we will be discussing the 26 second quarter results for both Boston Pizza Royalties Income Fund or the Fund and for Boston Pizza or BPI. For complete details on our financial results, please see our second quarter materials filed earlier today on SEDAR+ or visit the Fund's website at bpincomefund.com. Should you require additional information after the call, you can reach out to our Investor Relations at investorrelations@bostonpizza.com. The fund is a limited purpose open ended trust established under the laws of British Columbia. Its purpose is 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 revenues of royalty pool restaurants. For a complete description of the fund and its business, please see the annual information form dated February 12, 2026, which was filed on SEDAR+ ca. 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 Holm: Thank you, Michael, and welcome everyone to Boston Pizza second quarter investor conference call. I will discuss our second quarter results and provide a brief outlook. Michael will summarize our key financial highlights and as usual, we will leave time for you at the end of today's call. Boston Pizza maintains strong same restaurant sales in the second quarter, driven in part by heightened guest engagement during the FIFA World Cup tournament, and these results reflect the continued success of our promotions and ongoing momentum across takeout and delivery. During the quarter, the Fund posted record franchise sales from restaurants in the Royalty Pool of $256.5 million and $494.9 million year to date representing an increase of 1.9%, 2.5% respectively versus the same periods 1 year ago. SRS was 2.3% for the second quarter and 2.7% year to date SRS for the second quarter and year to date was principally driven by continued momentum in the takeout delivery business promotional initiatives and increased restaurant traffic associated with the FIFA World Cup. We began the second quarter of 26 with the launch of a playoff promotion to accompany the hockey and basketball playoff season. This initiative introduced a variety of new menu innovations supported by extensive national advertising centered on our Feast Like a Hockey God campaign. During which guests were encouraged to call upon the hockey gods and gather at Boston Pizza Restaurants throughout the playoff season. In June, we also launched several promotional campaigns in alignment with the beginning of the FIFA World Cup, aimed at boosting guest engagement and celebrating Team Canada. To continue the momentum and excitement built with the FIFA World Cup, we introduced a new summer feature menu alongside a giveaway offering and a chance to win concert prizes through our ongoing partnership with Live Nation Canada. Turning to restaurant development, no new restaurants opened, 2 restaurants permanently closed, and 10 restaurants completed restaurant renovations during the second quarter. To date, no new restaurants have opened, 4 restaurants in total have closed and 21 restaurants have been renovated. We have an array of exciting initiatives lined up to maintain our strong sales momentum and guest engagement in the third quarter of 2026, which I will discuss shortly. But first, I will hand the call back to Michael for a review of the Fund's financial performance. Michael?
Michael Harbinson: Thank you, Jordan. The Fund posted royalty income of $10.3 million for the quarter and $19.8 million year to date compared to $10.1 million and $19.3 million respectively, for the same periods 1 year ago. The fund posted distribution income of $3.4 million for the quarter and $6.5 million year to date compared to $3.3 million and $6.3 million respectively for the same periods 1 year ago. Royalty income and distribution income for the quarter and year to date were based on 372 Boston Pizza restaurants in the Royalty Pool, that reported franchise sales of $257 million for the quarter and $495 million year to date. For the same periods in 2025, royalty income and distribution income were based on the royalty pool of 372 Boston Pizza Restaurants reporting franchise sales of $251.8 million and $483.0 million respectively. The fund's net and comprehensive income was $5.9 million for the quarter compared to $14.3 million for the second quarter of 2025. The $8.4 million decrease in the fund's net and comprehensive income for the quarter compared to the second quarter of 2025 was primarily due to an $11.1 million increase in fair value loss and a $300 thousand increase net interest expense, partially offset by a $2.6 million decrease in income tax expense and a $300 thousand increase in royalty income and distribution income. The fund's net and comprehensive income was $18.1 million year to date compared to $20.7 million year-to-date in 2025. The $2.6 million decrease in the fund's net and comprehensive income year to date compared to the same period in 2025 was primarily due to a $3.7 million decrease in fair value gain and a $400 thousand increase in net interest expense partially offset by a $900 thousand decrease in income tax expense and a $600 thousand increase in royalty income and distribution income. The funds cash flows generated from operating activities for the quarter was $10.4 million compared to $9.9 million in the second quarter of 2025. The increase of $500 thousand was primarily due to an increase in royalty income and distribution income of $300 thousand and an increase in changes in working capital of $300 thousand partially offset by nominally higher income taxes paid. Cash flows generated from operating activities year-to-date was CAD 20 million compared to CAD 19.2 million in the same period in 2025. The increase of $800 thousand was primarily due to an increase in royalty income and distribution income of $600 thousand and an increase in changes in working capital of CAD 0.3 million partially offset by higher income taxes paid of $100 thousand. Our net and comprehensive income or loss and cash flows from operating activities are both measurements 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 the fund's ability to pay distributions. Net income contains non cash items that do not affect the funds cash flow, whereas cash flow from operating activities is not inclusive of all of the funds required cash outflows and therefore is not indicative of cash available for distribution to unitholders. Non cash items include the fair value adjustments, 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 non IFRS metrics of distributable cash and payout ratio to provide investors within the fund's opinion more meaningful information regarding the fund's ability to pay distributions to unitholders. The fund generated distributable cash of $8.2 million for the quarter compared to $8.0 million for the same period in 2025. The increase in distributable cash of $200 thousand or 3.4% was primarily due to an increase in cash flows generated from operating activities of $500 thousand partially offset by higher interest paid on debt of $200 thousand and higher Class B unit entitlement of $100 thousand. The fund generated distributable cash of $15.8 million year to date compared to $15.3 million for the same period in the prior year. The increase in distributable cash of $500 thousand or 3.2% was primarily due to an increase in cash flows generated from operating activities of $800 thousand partially offset by higher interest paid on debt of $200 thousand and higher Class B unit entitlement of $100 thousand. The fund generated distributable cash per unit of $0.386 for the quarter and $0.741 year-to-date compared to $0.374 and $0.718 respectively for the same periods in 2025. The increase in distributable cash per unit of $0.012 or 3.4% for the quarter and $0.023 or 3.2% year-to-date was primarily due to the increase in distributable cash outlined just now. The funds payout ratio for the quarter was 96.3% compared to 92.3% in the second quarter of 2025. The increase in the funds payout ratio for the quarter was due to distributions paid increasing by $600 thousand or 7.8%, partially offset by distributable cash increasing by $200 thousand or 3.4%. Year to date, the funds payout ratio was 98.8% compared to 96.1% year-to-date in 2025. The increase in the funds payout ratio year-to-date was due to distributions paid increasing by $900 thousand or 6.1% partially offset by distributable cash increasing by $500 thousand or 3.2%. On a trailing 12 month basis, the funds payout ratio was 103.1% as at June 30, 2026. On August 12, 2026, the trustees of the fund approved a cash distribution for the period of July 1, 2026 to July 31, 2026 of $0.124 per unit, which will be paid on August 31, 2026 to unit holders of record at the close of business on August 21, 2026. The trustee's objective in setting a monthly distribution amount is 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 now turn the call back over to Jordan for more on the outlook. Jordan?
Jordan Holm: Thank you, Michael. This season nationwide Boston Pizza locations are celebrating summer with Live and Local, a new initiative designed to strengthen guest engagement and support local artists and talent by hosting live performances, music performances at our restaurants As we head into the fall, we will be launching an exciting promotion plan in tandem with the start of this year's football season with a feature menu containing new guest favorites and crowd pleasers. Additionally, popular BP Kids Cards promotion will run in the third quarter for a $5 donation to the Boston Pizza Foundation families will receive a card for 5 free kids meals making it a perennial favorite. Though we attained record franchise sales during this second quarter of 2026, reflecting the sustained strength and resilience of our business model, continue to closely monitor the evolving trade landscape and underlying geopolitical developments that could impact operations including the ongoing conflict in The Middle East. Although the conflict has not yet led to material increases in input costs for our restaurants, belongs global supply chain disruptions could potentially elevate future costs and weigh on consumer discretionary spending. Remain prepared to adapt as conditions evolve. Looking ahead, our core priorities remain focused on delivering excellent guest experiences empowering our franchisees and driving sustainable long term growth. With that, I would like to turn it back to the operator to begin the question and answer session. Operator?
Operator: Thank you. We will now begin the question and answer session. Or send the question via email to investorrelations@bostonpizza.com. Please note those questions that we do not get to during the call will be answered via email immediately following the end of the investor conference call. Our first question comes from Nick Corcoran with Acumen Capital. Please go ahead.
Nick Corcoran: Good morning, guys, and thanks for taking my questions.
Jordan Holm: Good morning, Nick.
Nick Corcoran: Just the first question, you had relatively strong same store sales growth in the quarter. Any indication how much was from guest traffic versus higher ticket?
Jordan Holm: Yes, great question. So this is the 7th consecutive quarter of positive same restaurant sales which is a great trend for us, shows a lot of momentum. And we have been talking over that 7-quarter period about the contributions from guest visitation that we are seeing more people coming in and more of the overall growth coming from more guests versus menu price adjustments. This quarter was a little bit of the reverse, just a little bit more came from still positive on both fronts, should add, but a little bit more came from menu pricing. that is just seasonal. We tend to take main menu pricing in June and November. And so that had a factor in the results But fair to say that continue to be focused on both aspects. We are always going to need to take a little bit of menu pricing here and there and we do that very carefully and judiciously as we possibly can. But our focus and you heard it through the promotional calendar and some of the whether it is menu or events certainly sports was a big part of the Q2 results. That drawing more people in has really been the focus. But to answer your question succinctly, the second quarter had a little bit more contribution from menu pricing but still positive on a year over year traffic trend.
Nick Corcoran: that is good color. And any indication, was might be in the pipeline for, for opening?
Jordan Holm: Yes, absolutely. So we have 3 under construction today. Revelstoke British Columbia, Dryden Ontario and The Pas, Manitoba. I can share that with you because they are approaching their opening dates and they are all public. We have some other irons in the fire. We are just not sure whether we are going to get them in, in this construction season. Whether they will get pushed into early 27. That happens sometimes just with permitting and trades delays and supply chain and other things that affect our construction I will point out here in addition to the new restaurant openings, we are really excited about the investment that our franchisees are continuing to make in restaurant renovations. Our target for the year was around 40. It looks like we might even be ahead of the 40 number. Last year we had 40 completed renovations I think the number before that for 2024 was 26 renovations. So really ramping up to make those investments in the before and after experience for our guests and for our staff quite frankly is really powerful. So we are we are really encouraged by those investments and by the, the impact that it makes And we are look at about approaching 30 of renovations completed. And like I said, even be above 40 for the full year 2026. So we are excited about that in addition to the new restaurants that I mentioned.
Nick Corcoran: Great. And maybe 1 last question for me. You closed stores in the quarter. I think it is 4 for the year. Any color on what might have driven those closures? And the health of the remaining restaurants is?
Jordan Holm: Yeah, fair. So last year, just for comparison last year, 25 full year, we had 0 closures. that is a little unusual and I would say a little unusual for us to have 4 year to date so far this year, meaning that last year was a little under the average overall for a system of our size with close to 370 restaurants to have 0 closures. And then this year, we have 4 year to date and each 1 is an individual story, some of them are lease expiration, some of them are expropriation for development. We are in a lot of cases we are leasing the land or the land and building or our franchisees are this case and the developer, the owner of the land wants to do something different with it. And so that necessitates a closure and hopefully a reopening somewhere else if it is a strong market for us. I guess the tight answer for unitholders and investors on the call is that does the rate of closures signal brand weakness? Are these a sign of things to come. We do not feel that way at all. it is not unusual for a group of our size and our age as well over 60 years, some of our restaurants have been in locations for a really, really long time. And there just comes a time when have to make a call about the long term sustainability of that location And we have some of those examples in the 4 closures. This year. So it is not something that we are troubled about. We obviously do not like to see BP restaurants close, we like to see the new ones that I mentioned open. We want to continue to grow the system for the benefit of our guests and the brand overall. But we did have those 2 closures in the quarter, 4 year to date and we do not see that as a concerning trend.
Nick Corcoran: Great. Thanks for taking my questions. I will pass the line.
Jordan Holm: Thank you, Nick. Okay. Well, I can assume that there are not other folks in the queue for questions today, which I understand it is a busy time. But since there are no further questions, I would like to thank everyone for joining us on the call today. The proud Canadian restaurant, Boston Pizza continues to appreciate your interest and support. We look forward to reconnecting with you during our third quarter conference call. Which will be held in November of this year. thank you and enjoy the rest of your day.
Operator: This brings to an end today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day. Thank you.
