Diversified Royalty Corp. Announces Additions to the Mr. Lube + Tires Royalty Pool, May 2025 Cash Dividend and Q1 2025 Earnings Release Date
VANCOUVER, British Columbia, May 01, 2025 (GLOBE NEWSWIRE) -- Diversified Royalty Corp. (TSX: DIV and DIV.DB.A) (the “Corporation” or “DIV”) and Mr. Lube Canada Limited Partnership (“Mr. Lube + Tires”) announced today that effective May 1, 2025 the Mr. Lube + Tires royalty pool (the “Mr. Lube + Tires Royalty Pool”) has been adjusted to include the royalties from six new flagship Mr. Lube + Tires locations and remove one flagship Mr. Lube + Tires location that has permanently closed. With the adjustment for these five net new locations, the Mr. Lube + Tires Royalty Pool now includes 149 flagship locations.
Sean Morrison, President and Chief Executive Officer of DIV, stated, “Mr. Lube + Tires continues to generate strong same-store-sales-growth across its franchise system and is well positioned to continue this impressive growth moving forward”.
Pamela Lee, President and Chief Executive Officer of Mr. Lube + Tires, stated, “Mr. Lube + Tires is proud of the performance of our franchisees in 2024. We continue to be focused on growing the Mr. Lube + Tires brand, strengthening the store level economics of our franchisees, and continuing to provide best-in-class service to our customers”.
Additions to the Mr. Lube + Tires Royalty Pool
Subject to certain performance criteria being met, and the LP Amendment as described further below, the Mr. Lube + Tires Royalty Pool is adjusted annually on May 1 (the “Adjustment Date”) to include new Mr. Lube + Tires locations that have been open since July 1 of the previous reporting period and to remove Mr. Lube + Tires locations that have been permanently closed during the previous year.
The initial consideration paid to Mr. Lube + Tires for the estimated net additional royalty revenue was $4.0 million, representing 80% of the total estimated consideration of $5.0 million. The initial consideration of $4.0 million was elected by DIV to be paid in the form of 1,460,419 Common Shares of DIV on the basis of the 20-day volume weighted average closing price of the Common Shares for the period ended April 24, 2025 of $2.7363 per Common Share.
The remaining consideration payable for the additional royalty revenue of the six new Mr. Lube + Tires locations added to the Royalty Pool on May 1, 2025 will be paid to Mr. Lube + Tires on May 1, 2026, the next Adjustment Date, and will be adjusted to reflect the actual system sales of these six new locations for the year ending December 31, 2025, net of the lost system sales of the one permanently closed Mr. Lube + Tires location removed from the Mr. Lube + Tires Royalty pool on May 1, 2025.
On May 1, 2023, the Mr. Lube + Tires Royalty Pool was adjusted to include royalties from five new flagship Mr. Lube + Tires locations. The initial consideration previously paid by DIV was $4.7 million, which represented 80% of the total estimated consideration for those five locations, which estimate was based on the forecast system sales of these five locations for year ending December 31, 2023. As a result of a previously-announced amendment (the “LP Amendment”) to the amended and restated limited partnership agreement (the “LP Agreement”) of DIV’s direct subsidiary ML Royalties Limited Partnership (“ML LP”), the remaining consideration payable for the additional royalty revenue of the five Mr. Lube + Tires locations (the “2023 True-Up Locations”) added to the Mr. Lube + Tires Royalty Pool on May 1, 2023 was to be paid to Mr. Lube + Tires on May 1, 2025 (as opposed to May 1, 2024), and adjusted to reflect the actual system sales of these five new locations for the year ending December 31, 2024 (as opposed to the actual system sales for the year ending December 31, 2023).
The actual system sales for the 2023 True-Up Locations added to the Royalty Pool on May 1, 2023 has now been determined for the year ended December 31, 2024 to be $10.1 million. The total consideration payable to Mr. Lube + Tires for the net additional royalty revenue of these 2023 True-Up Locations based on their actual system sales for the year ended December 31, 2024 is $7.1 million. After taking into account the $4.7 million previously paid by DIV to Mr. Lube + Tires on May 1, 2023 for the 2023 True-Up Locations, DIV paid Mr. Lube + Tires the remaining $2.4 million of cash consideration for the net additional royalty revenue of these 2023 True-Up Locations on May 1, 2025.
For further details with respect to the manner in which annual adjustments of the Mr. Lube + Tires Royalty Pool occur and the agreements underlying the procedures therefor, see DIV’s Annual Information Form dated March 24, 2025 as well as the LP Amendment, copies of each of which are available on SEDAR+ at www.sedarplus.com.
May 2025 Cash Dividend
DIV is pleased to announce that its board of directors has approved a cash dividend of $0.02083 per common share for the period of May 1, 2025 to May 31, 2025, which is equal to $0.25 per common share on an annualized basis. The dividend will be paid on May 30, 2025 to shareholders of record as of the close of business on May 15, 2025.
Q1 2025 Earnings Release Date
DIV will release earnings results for the three months ended March 31, 2025 following the closing of regular trading on the Toronto Stock Exchange on May 14, 2025.
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 janitorial, 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” or “financial outlook” 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 or financial outlook. 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 and financial outlook, although not all forward-looking information and financial outlook contain these identifying words. Specifically, forward-looking information and financial outlook in this news release includes, but is not limited to, statements made in relation to: the amount and timing of the payment for the remaining consideration payable to Mr. Lube + Tires for the additional royalty revenue from the six Mr. Lube + Tires locations added to the Mr. Lube + Tires Royalty Pool on May 1, 2025; DIV’s belief that Mr. Lube + Tires will continue to generate strong same-store-sales-growth across its franchise system and is well positioned to continue its impressive growth moving forward; Mr. Lube + Tires being focused on growing the Mr. Lube + Tires brand, strengthening the store level economics of its franchisees, and continuing to provide best-in-class service to its customers; the amount and timing of the May 2025 dividend to be paid to DIV’s shareholders; the timing of DIV releasing earnings results for the three months ended March 31, 2025; DIV’s objective to continue to pay predictable and stable 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 in such forward-looking information and financial outlook. DIV believes that the expectations reflected in the forward-looking information and financial outlook are reasonable but no assurance can be given that these expectations will prove to be correct. In particular there can be no assurance that: Mr. Lube + Tires will continue to make royalty payments in the amounts and at the times required, or at all; the amount of, or timing of the payment for, the additional consideration payable to Mr. Lube + Tires for the six additional Mr. Lube + Tires locations added to the Mr. Lube + Tires Royalty Pool on May 1, 2025 will occur in the amount or at the time estimated; that transactions completed with Mr. Lube + Tires for the additions to the Mr. Lube + Tires Royalty Pool will be accretive to DIV shareholders; that Mr. Lube + Tires will realize any of the intended benefits of its growth strategy; that Mr. Lube + Tires will continue to grow its brand; that Mr. Lube + Tires will continue opening new stores, or that such stores will be successful if opened; that Mr. Lube + Tires will succeed in strengthening store level economics of its franchisees; that Mr. Lube + Tires will continue to provide best-in-class service to its customers; DIV will be able to make monthly dividend payments to the holders of its common shares; or DIV will achieve any of its corporate objectives. Given these uncertainties, readers are cautioned that forward-looking information and financial outlook included in this news release are not guarantees of future performance, and such forward-looking information and financial outlook 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 most recently filed management’s discussion and analysis, copies of which are available under DIV’s profile on SEDAR+ atwww.sedarplus.com.
In formulating the forward-looking information and financial outlook 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; the performance of the Mr. Lube + Tires flagship locations in the Mr. Lube + Tires Royalty Pool will be consistent with DIV’s expectations; 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.
To the extent any forward-looking information in this news release constitutes a “financial outlook” within the meaning of applicable securities laws, such information is being provided to provide investors with an estimate of the financial impact to DIV of transactions with Mr. Lube + Tires described in this news release.
All of the forward-looking information and financial outlook in this news release is qualified in its entirety 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 they will have the expected consequences to, or effects on, DIV. The forward-looking information and financial outlook included in this news release is presented 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.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.
Additional Information
Additional information relating to the Corporation and other public filings, is available on SEDAR+ at www.sedarplus.com.
Contact:
Sean Morrison, President and Chief Executive Officer
Diversified Royalty Corp.
(604) 235-3146
Greg Gutmanis, Chief Financial Officer and VP Acquisitions
Diversified Royalty Corp.
(604) 235-3146
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