BURLINGTON, ON, March 25, 2026 /CNW/ - SIR Royalty Income Fund (TSX: SRV.UN) (the "Fund") today announced that SIR Corp. ("SIR" or the "Company"), the operating entity from which the Fund's equity income is ultimately derived, has filed its financial results for the 12-week and 24-week periods ended February 15, 2026 ("Q2 2026" and "YTD 2026", respectively). SIR's unaudited interim consolidated financial statements and management's discussion & analysis ("MD&A") for Q2 2026 / YTD 2026 can be accessed via the Fund's profile on the SEDAR+ website at www.sedarplus.ca under "Other", or the SIR website at www.sircorp.com/sir-royalty-income-fund/financial-reports.

Q2 2026 Business Update

   -- Food and beverage revenue from corporate restaurant operations increased 
      by 4.0% to $68.1 million, compared to $65.5 million for the 12-week 
      period ended February 9, 2025 ("Q2 2025"). 
 
   -- Consolidated Same Store Sales ("SSS")(1) increased by 0.5%. 
 
   -- On December 3, 2025, SIR opened a new Jack Astor's$(R)$ Bar & Grill ("Jack 
      Astor's") location in Oshawa, Ontario that includes its new concept, 
      Freida's Beverage Kitchen$(TM)$ ("Freida's"). This Jack Astor's + Freida's 
      location is expected to be added to the Royalty Pooled Restaurants (the 
      "Royalty Pool") effective January 1, 2027. 
 
   -- Effective January 1, 2026, the new Scaddabush Italian Kitchen & Bar(R) 
      ("Scaddabush") location in Barrie, Ontario was added to the Royalty 
      Pooled Restaurants, and the closed Jack Astor's location in Longueuil, 
      Quebec was removed. The Royalty Pool currently consists of 52 restaurants, 
      including: 35 Jack Astor's restaurants, 14 Scaddabush locations, REDS 
      Square One(R), The Loose Moose Tap + Grill(R) and Edna + Vita(R). 

Results of Operations Summary

SIR has advised the Fund that food and beverage revenue from corporate restaurant operations totaled $68.1 million and $132.9 million in Q2 2026 and YTD 2026, respectively, representing increases of 4.0% and 7.0% compared to $65.5 million and $124.2 million in Q2 2025 and YTD 2025 (the 24-week period ended February 9, 2025), respectively. The increases were primarily attributable to consolidated SSS(1) growth of 0.5% and 4.2% for Q2 2026 and YTD 2026, respectively, and the opening of the new Scaddabush location in Barrie, Ontario (on June 25, 2025) and the new Jack Astor's + Freida's location in Oshawa, Ontario (on December 3, 2025), partially offset by the permanent closure of the Jack Astor's locations in North York, Ontario (on September 4, 2024) and Longueuil, Quebec (on April 27, 2025) and the Duke's Refresher(R) + Bar ("Duke's Refresher") location at Queen Street East and Broadview Avenue in Toronto (on September 15, 2025).

 
 Same Store Sales(1)   12-WeekPeriod EndedFebruary 15,2026  12-WeekPeriod EndedFebruary 9,  Variance  24-WeekPeriod EndedFebruary 15,2026  24-WeekPeriod EndedFebruary 9,  Variance 
  ($000s)                                                    2025                                                                           2025 
Jack Astor's                                        39,533                          39,428     0.3 %                               77,071                          74,498     3.5 % 
Scaddabush                                          20,000                          19,760     1.2 %                               39,291                          37,780     4.0 % 
Signature Restaurants                                5,380                           5,434   (1.0 %)                               11,196                          10,195     9.8 % 
Same Store Sales(1)                                 64,913                          64,622     0.5 %                              127,558                         122,473     4.2 % 
 

SSS(1) performance includes all SIR restaurants, except for those restaurants that were not open for the entire comparable periods in Fiscal 2026 and Fiscal 2025. Accordingly, SSS(1) performance for Q2 2026 and YTD 2026 does not include the new Jack Astor's restaurant in Oshawa, Ontario, the new Scaddabush restaurant in Barrie, Ontario, the closed Jack Astor's locations in North York, Ontario and Longueuil, Quebec, and the closed Duke's Refresher at the intersection of Queen Street East and Broadview Avenue, since these were not open for both comparable periods in Fiscal 2026 and Fiscal 2025. The seasonal Abbey's Bakehouse(R) is also not included as it is not a SIR restaurant.

Net loss and comprehensive loss was $21.5 million for Q2 2026, compared to $1.6 million for Q2 2025. Net loss and comprehensive loss was $15.6 million for YTD 2026, compared to $6.9 million for YTD 2025. The negative variances primarily reflect changes in the amortized cost of the Ordinary LP Units and Class A Units of the SIR Royalty Limited Partnership (the "Partnership") that SIR holds, partially offset by increased earnings from restaurant operations in both periods. The changes in the amortized cost of the Ordinary LP Units and Class A Units of the Partnership resulted in expenses of $20.6 million and $15.6 million in Q2 2026 and YTD 2026, respectively, compared to expenses of $3.3 million and $7.1 million in Q2 2025 and YTD 2025, respectively. These non-cash changes in Q2 2026 and YTD 2026 are due to increases in the underlying unit price of the Fund compared to the end of the first quarter of Fiscal 2026 and the end of Fiscal 2025, respectively.

Adjusted Net Loss(2) was $0.9 million in Q2 2026, compared to Adjusted Net Earnings(2) of $1.7 million in Q2 2025. The negative variance is primarily attributable to a $2.6 million increase in the cost of corporate restaurant operations and a $3.2 million increase in corporate costs, partially offset by a $2.7 million increase in revenue from corporate restaurant operations, a $0.2 million decrease in interest expense and a $0.2 million decrease in other expenses. Adjusted Net Loss(2) was $0.02 million in YTD 2026, compared to Adjusted Net Earnings(2) of $0.1 million in YTD 2025. The negative variance is primarily attributable to a $5.6 million increase in the costs of corporate restaurant operations and a $4.2 million increase in corporate costs, partially offset by an $8.8 million increase in revenue from corporate restaurant operations, a $0.2 million decrease in interest expense, a $0.5 million decrease in other expenses, and a $0.2 million decrease in interest on lease obligations.

Liquidity and Capital Resources

As at February 15, 2026, SIR had cash of $5.9 million (net of the cash balance of the SIR Royalty Limited Partnership) compared to $12.5 million as at August 31, 2025, and had drawn approximately $37.3 million against the $68.0 million maximum principal borrowing amount under the Company's credit facility.

Outlook

SIR continues to monitor consumer spending behavior in light of current evolving macroeconomic factors, including inflation, interest rates and the impact of cross-border tariffs between Canada and the United States, and their potential impact on the Canadian economy and consumer confidence. Ongoing business impacts due to changes in the minimum wage and rising commodity costs have been influential in the bar and restaurant industry's changes in pricing overall.

SIR continues to innovate and provide immersive new product and service offerings to increase dine-in guest visits and to capitalize on the growth of take-out and delivery services in commercial foodservice.

The new Jack Astor's + Freida's location in Oshawa, Ontario (opened in December 2025) is expected to be added to the Royalty Pooled Restaurants effective January 1, 2027.

SIR has leased three properties -- in Windsor, Aurora, and Kanata, Ontario -- upon which it plans to develop three new Scaddabush locations. There can be no assurance at this time that these planned new restaurants will be opened, or that any of these three new locations will become part of the Royalty Pooled Restaurants.

SIR is pursuing additional sites to continue the successful growth of Scaddabush. SIR will also continue its practice of investing in existing restaurants to drive improved sales and earnings. In consideration of the ongoing economic and market conditions mentioned above, restaurant opening and renovation plans will be reviewed regularly and adjusted as necessary.

Reconciliation of Adjusted Net Earnings (Loss)(2)

The following table reconciles net loss and comprehensive loss to Adjusted Net Earnings (Loss)(2) for the 12-week and 24-week periods ended February 15, 2026 and February 9, 2025, respectively.

 
                12-Week                    12-WeekPeriod EndedFebruary 9,  24-WeekPeriod EndedFebruary 15,  24-WeekPeriod EndedFebruary 9, 
                 Period EndedFebruary 15,   2025                            2026                             2025 
                 2026 
                (in thousands of dollars) (unaudited) 
 
Net loss and 
 comprehensive 
 loss for the 
 period                          (21,469)                         (1,644)                         (15,632)                         (6,943) 
Change in 
 amortized 
 cost of 
 Ordinary LP 
 Units and 
 Class A 
 LP Units of 
 the 
 Partnership                       20,557                           3,347                           15,608                           7,051 
Adjusted Net 
 Earnings 
 (Loss)(2)                          (912)                           1,703                             (24)                             108 
 

About SIR Corp.

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