MTY Food Group (MTY) investor relations material

Executive summary

• Q3 revenue was $277.7M; normalized adjusted EBITDA was $60.8M and net income attributable to owners was $24.8M. Strategic review concluded with a focus on efficiency, asset-light franchising and shareholder returns.

• Network ended the quarter at 6,966 locations after 74 net closures, including 50 corporate locations tied to the closure plan.

Financial highlights

• Revenue fell 7.1% YoY to $277.7M; adjusted EBITDA was $60.0M versus $73.2M, and normalized adjusted EBITDA was $60.8M versus $74.0M.

• Net income attributable to owners was $24.8M, or $1.08 diluted EPS, versus $27.9M and $1.22; adjusted EPS rose 5.9% to $1.26 from $1.19.

• Free cash flow net of lease payments rose 10.3% to $28.5M from $25.8M, or $1.25 per diluted share versus $1.13; operating cash flow was $37.6M versus $39.0M.

• System sales held steady at $1.5B; digital sales grew 2% to $279.2M, representing 19.8% of system sales versus 19.3%.

• Reporting shifted to a 52-week basis ending on the Sunday closest to quarter-end; Q3 had one fewer day than the prior-year period.

Outlook and guidance

• Priorities include optimizing brands, transitioning toward asset-light franchising, and restructuring some functions and offices to improve efficiency; the objective is a return to EBITDA and free cash flow growth, with no timeline or numerical target set.

• Remaining planned corporate-store closures are anticipated in Q4; closure benefits begin in Q4 and build into 2027, including an estimated $2.5M benefit directly attributable to closures.

• Twenty-seven planned Q3 openings shifted to Q4 due to delays; management expects Q4 could be its strongest-ever quarter for openings and sees a strong 2027 pipeline.

• Management expects Food Processing, Distribution and Retail sales momentum to improve by next year; new products have launched in the segment.