Sportscene Group's Results and Achievements for the First Quarter Ended November 27, 2011

Expansion of La Cage aux Sports Network Drives Sales Growth

MONTREAL, Feb. 16, 2012 /CNW Telbec/ - During the Annual Shareholders' Meeting held this morning in Montreal, management of SPORTSCENE GROUP INC. ("Sportscene" or "the Company" SPS.A / TSX Venture Exchange), operator of LA CAGE AUX SPORTS restaurant chain, disclosed the financial results and highlights for the first quarter of fiscal 2012. It is to be noted that the first quarter's interim condensed consolidated financial statements and comparative figures reflect International Financial Reporting Standards ("IFRS") for the first time. A detailed description of Sportscene's changeover to IFRS is provided in its management's report and notes accompanying the interim condensed consolidated financial statements for the 13-week period ended November 27, 2011.

During this period, La Cage aux Sports' total network sales(1) grew by 1.9% to $28.1 million. The contribution of the new Cages inaugurated within the past year more than compensated for the decline in average same-Cage sales attributable to a sluggish economic climate and a less favourable sporting context than last year. Sportscene's consolidated revenues increased by 9.5% to $23.6 million. Conversely, EBITDA(1) amounted to $2.5 million, compared with $2.8 million for the same quarter of last year. Besides the pressures exerted on profit margins by challenging business conditions, the decrease in EBITDA can be partly explained by certain non-recurring costs incurred in connection with the opening of Cages and the expansion of the sports complex. Sportscene therefore closed the quarter with net earnings attributable to shareholders of $1.0 million or $0.24 per share, compared with $1.3 million or $0.31 per share the previous year.

Investments of some $2.8 million were made during the first quarter, mainly to expand the Company's sports complex and build new Cages. Two new La Cage aux Sports units were inaugurated in the first quarter, while construction work was also initiated on a third Cage that opened to the public in January 2012, being in the second quarter. Since the beginning of its 2011 fiscal year and up to now, Sportscene has invested more than $12 million in the expansion of its infrastructures, including the opening and reopening of a total of five Cages.

Finally operating activities provided cash flows of $2.4 million during the first quarter of fiscal 2012, contributing to maintain Sportscene' solid financial position, including short-term available cash(1) of $9.6 million and a total net debt (1) to invested capital ratio of 12.2% as at November 27, 2011.

Declaration of a Dividend of $0.30 Per Share

Sportscene's Board of Directors today declared a dividend of $0.30 per Class A share. This dividend will be paid on March 22, 2012 to shareholders of record as at March 2, 2012.

Outlook

"We maintain a cautious approach since, in addition to a less favourable sporting climate, economic conditions continue to exert some pressure on the restaurant industry's customer traffic and selling prices," indicated Jean Bédard, President and Chief Executive Officer of Sportscene Group. "However, we are confident that the recent expansion of La Cage aux Sports' network will bring a positive contribution to the Company's performance and financial health for fiscal 2012 and will allow us to fully benefit from the eventual recovery of business conditions in our industry. Furthermore, in upcoming months, we will continue to constantly adapt La Cage aux Sports' offering to consumer needs and to promote the efficiency and profitability of all our operations, in order to foster average same-Cage sales and maintain sound profit margins."

Profile

In business since 1984, Sportscene Group Inc. operates Quebec's leading chain of sports-themed resto-bars: La Cage aux Sports. As of February 16, 2012, this banner comprises 52 "Cages", of which 39 are wholly or jointly owned by the Company, and 13 are franchises. Enjoying a strong brand image, La Cage aux Sports' most distinctive feature is its "Sports, Gang, Fun" culture, showcased by an original decor, a festive ambience, the use of the latest telecommunications technologies and the organization of a host of contests and special events for customers. In addition, the Company manages real estate holdings, including a sports complex and several buildings housing La Cage aux Sports restaurants. Lastly, Sportscene has developed expertise in certain other complementary activities, such as the construction, fitting-out and renovation of Cages, technological development related to the expansion of the La Cage aux Sports network, as well as the organization of sports-related activities including international-calibre boxing events.

(1) The following items are not performance measures consistent with IFRS. In Sportscene's financial statements, EBITDA corresponds to "Operating earnings". Total network sales are the aggregate sales achieved by all La Cage aux Sports restaurants, including franchised, jointly-owned and corporate outlets. Short-term available cash includes cash and cash equivalents, and temporary investments. The total net debt consists of the long-term debt, including its current portion, net of the short-term available cash.
 
(2) Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Interim Condensed Consolidated Statements of Net Earnings and Comprehensive Income

(in thousands of Canadian dollars, except for earnings per share and number of outstanding shares)

(unaudited)
    13 weeks ended
  November 27, November 28,
  2011  2010
  $ $
Revenues  23,607 21,562
Cost of sales  6,536  6,804
Employee benefits expenses  5,857  5,206
Selling and administrative expenses  8,761  6,711
Operating earnings  2,453 2,841
     
Interest on long-term debt  128 82
Other interest expenses  23 28
Amortization of property, plant and equipment  953 869
Amortization of intangible assets  24  28
Other (gains) losses  (31) 69
  1,097  1,076
Earnings before income tax  1,356 1,765
Income tax  367 519
Net earnings and comprehensive income  989 1,246
       
Net earnings and comprehensive income attributable to:    
The Company's shareholders  992 1,280
Non-controlling interests  (3)  (34)
Net earnings and comprehensive income  989 1,246
       
Earnings per share (in $)      
  Basic  $0.24  $0.31
  Diluted  $0.24 $0.31
       
Weighted average number of outstanding Class A    
shares (in thousands):    
  Basic  4,165 4,168
  Diluted  4,165 4,172

Interim Condensed Consolidated Statements of Changes in Shareholders' Equity

(in thousands of Canadian dollars, except number of outstanding shares)

(unaudited)
  Shareholders' Equity attributable to the Company's shareholders
  Number of
shares 
Share
capital
Stock-based
compensation
reserve
Retained
earnings
Total Non-
controlling
interests
Total
Shareholders'
equity
  (in thousands)  $ $ $ $ $ $
Balance on August 28, 2011  4,165 3,551 222 25,121 28,894 293 29,187
  Stock-based compensation  - - 5 5  -  5
  Net earnings and comprehensive              
  income  - - - 992 992 (3) 989
  Dividends paid to non-controlling interests  - - - - - (35) (35)
Balance on November 27, 2011  4,165 3,551 227 26,113 29,891 255 30,146
                 
Balance on August 30, 2010  4,168 3,554 199 23,684 27,437 286  27,723
  Stock-based compensation  - - 5 - 5 5
  Net earnings and comprehensive              
  income  -  - 1,280 1,280 (34) 1,246
  Capital transactions with non-controlling interests - - (6) (6) (15) (21)
Balance on November 28, 2010  4,168 3,554 204 24,958 28,716 237 28,953

Interim Condensed Consolidated Statements of Financial Position

(in thousands of Canadian dollars)

(unaudited)
  As at November 27,  As at August 28,  As at August 30,
  2011 2011 2010
  $  $  $
Assets      
Current assets      
  Cash and cash equivalents   9,593 9,453 7,727
  Temporary investments  - - 2,000
  Accounts receivable  6,495 4,498 3,658
  Income tax receivable  420 - 28
  Inventories  1,367 1,349 1,141
  Prepaid expenses   311 313 446
  Current portion of notes receivable  396 37  75
Total current assets  18,582 15,650 15,075
         
Notes receivable  692 893 989
Property, plant and equipment   34,005 32,112 27,667
Goodwill   2,702 2,696 2,208
Intangible assets  954 759 429
Deferred tax asset  1,532 1,525 1,356
         
Total assets  58,467  53,635 47,724
         
Liabilities and shareholders' equity      
         
Current liabilities      
  Accounts payable and accrued liabilities   10,944 7,704 6,651
  Income tax payable  - 32 -
  Deferred revenues and credits  1,345 1,190 1,270
  Current portion of long-term debt  2,111 1,953 1,471
Total current liabilities  14,400 10,879 9,392
Long-term debt 11,651 11,196 8,580
Deferred revenues and credits  1,712 1,815 1,423
Deferred tax liability  558 558 606
Total liabilities  28,321 24,448  20,001
         
Shareholders' equity      
  Share capital  3,551 3,551 3,554
  Stock-based compensation reserve   227 222 199
  Retained earnings  26,113 25,121 23,684
Shareholders' equity attributable to the Company's      
shareholders  29,891 28,894 27,437
Non-controlling interests  255 293  286
Total shareholders' equity  30,146 29,187 27,723
         
Total liabilities and shareholders' equity  58,467 53,635 47,724


Interim Condensed Consolidated Statements of Cash Flows

(in thousands of Canadian dollars)

(unaudited)
    13 weeks ended
  November 27, November 28,
  2011 2010
  $ $
Operating activities:    
  Net earnings  989 1,246
  Adjustments to reconcile net earnings to cash
flows from operating activities:
   
    Loss on disposal of property, plant and equipment  30 27
    Loss on disposal of interests in joint ventures  - 26
    Gain on business combination achieved in stage  (3) -
    Amortization of property, plant and equipment  953 869
    Amortization of intangible assets  24 28
    Stock-based compensation  5 5
    Interest expenses recognized in net earnings  151 110
    Interest paid  (155) (87)
    Interest included in the cost of property, plant and equipment  11 8
    Income tax expenses recognized in net earnings  367  519
    Income tax paid  (825) (506)
      1,547 2,245
  Net change in non-cash working capital items, net of
acquisitions and disposals of subsidiaries and
joint ventures
 870 (993)
  2,417 1,252
         
Financing activities:    
  Increase of long-term debt  801 150
  Repayment of long-term debt  (511) (372)
  Dividends paid to non-controlling interests  (35) -
  255 (222)
         
Investing activities:    
  Acquisitions of subsidiaries and joint ventures, net of
cash and cash equivalents acquired
 (19) (73)
  Proceeds from disposal of joint ventures, net of disposal
of cash and cash equivalents  
- 204
  Change in notes receivable  (158) (96)
  Acquisitions of property, plant and equipment  (2,138) (968)
  Proceeds from disposals of property, plant    
  and equipment   1 5
  Acquisitions of intangible assets  (218) (113)
  (2,532) (1,041)
Increase (decrease) in cash and cash equivalents  140 (11)
Cash and cash equivalents, beginning of the period  9,453 7,727
Cash and cash equivalents, end of period  9,593 7,716

 

SOURCE SPORTSCENE GROUP INC.

For further information:

Source: 
Sportscene Group Inc. 

Contact: 
Jean Bédard, Chairman of the Board, President and Chief Executive Officer
Josée Pépin, Manager, Accounting and Disclosure
450-641-3011

Profil de l'entreprise

SPORTSCENE GROUP INC.

Renseignements sur cet organisme


FORFAITS PERSONNALISÉS

Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .

ADHÉSION À CNW

Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.

RENSEIGNEZ-VOUS SUR LES SERVICES DE CNW

Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.