PIZZA PIZZA ROYALTY CORP. ANNOUNCES THIRD QUARTER 2025 RESULTS

Executive Summary

• Pizza Pizza Royalty Corp. reported Q3 2025 system sales of $158.8 M (up 2.0% YoY) and adjusted EPS of $0.236, down 1.3% YoY.
• Same‑store sales growth (SSSG) turned positive at +0.1% for the quarter and +1.1% year‑to‑date after a decline in 2024.
• The company declared quarterly dividends of $5.7 M ($0.2325 per share), maintaining its monthly dividend policy; payout ratio was 111%.

Key Details

• System Sales & Royalty Income
• Q3 2025 total system sales: $158,809 K (up 2.0% YoY).
• Pizza Pizza brand sales: $138,000 K (+2.3%).
• Pizza 73 brand sales: $20,812 K (flat).

• Royalty income Q3 2025: $10,159 K (up from $9,971 K).

• Same‑Store Sales Growth (SSSG)

• Combined SSSG Q3 2025: +0.1% (vs. –5.3% in Q3 2024).

• Year‑to‑date combined SSSG: +1.1% (vs. –2.7% in 2024).

• Earnings

• Adjusted EPS Q3 2025: $0.236, down 1.3% YoY.
• Basic EPS Q3 2025: $0.231, down 0.9% YoY.

• Adjusted earnings from operations Q3 2025: $7,865 K (virtually flat YoY).

• Dividends & Payout

• Quarterly dividend declared: $5.724 M ($0.2325 per share).
• Annualized payout ratio based on adjusted earnings: 111% (Q3), 112% YTD.

• Working capital reserve at Sep‑30‑2025: $4.0 M (down $2.1 M YoY, excluding debt reclassification).

• Restaurant Network

• Royalty Pool size as of Jan 1 2025: 794 locations (694 Pizza Pizza, 100 Pizza 73).

• Q3 2025 openings/closings:

  • Pizza Pizza – 4 traditional & 10 non‑traditional opened; 1 traditional & 3 non‑traditional closed.
  • Pizza 73 – 2 traditional opened; 1 traditional closed.

• Credit Facility

• Existing facility extended to April 24 2028 (three‑year term).
• Interest rate: CORRA + credit spread (1.00%–1.50%).
• New three‑year forward swap effective Apr 24 2025; blended rate now 3.51% (2.51% fixed + 1.00% spread).

• Covenant compliance as of Jun 30 2025: debt/EBITDA = 1.19× (≤ 2.5×); interest coverage = 27.6× (≥ 3×).

• Financial Highlights (selected)

• Total assets Sep‑30‑2025: $377,515 K; total liabilities: $75,369 K.
• Interest expense Q3 2025: $(444) K (up from $(322) K YoY).

• Administrative expenses Q3 2025: $(181) K (slightly higher YoY).

• Management Commentary

• CEO Paul Goddard noted modest performance improvement versus prior year, highlighted competitive pressure, and outlined focus on digital ordering, speed of service, and new product offerings.

Notable Quotes

“While our performance was slightly stronger versus the prior year, we've seen heightened competition across the QSR category. We're responding by investing in digital ordering, improving speed of service, and delivering craveable new offerings that will differentiate our brand and drive growth.” – Paul Goddard, President & CEO

The release includes a conference call scheduled for November 5 2025 at 9:30 a.m. ET (call‑in details provided). All forward‑looking statements are subject to the usual risk factors disclosed in the MD&A.