Financial Review Franchise Group Inc.
Commitment to prudent financial policy
Leverage Profile
Target net leverage of 2x-3x through cycles; willingness to stretch to 4x opportunistically for
acquisitions that offer rapid deleveraging through refranchising or non-core asset sales
• Acquisition strategy includes actions in order to maintain conservative net leverage metrics
through the cycle
M&A and Capital
Investments
Discretionary cash flow provides substantial resources for FRG to allocate capital towards
highest ROI investments, including support of franchise unit growth, growing corporate units for
highest cash-on-cash return profiles (American Freight), and M&A opportunities that are
additive to exiting brands or new verticals
• Cash plus ABL liquidity
Liquidity
•
Significant revolver capacity to fund working capital and strategic initiatives
Return of Capital
Management and
Governance
1 Including PSP
FRANCHISE
GROUP INC.
.
Long-term dividend payout target is 25% of EBITDA; currently paying significantly below target
and will continue to balance dividend payout with growth and de-leveraging opportunities as
appropriate
Raised dividend rate from $1.00 to $1.50 per share
•
Proven track record of successful acquisition integration and backing outstanding
management teams
•
Continue utilizing decentralized business model to promote local operational flexibility at
subsidiaries, while gaining the benefits of the scale and shared expertise across subsidiaries
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