Annual General Meeting of Shareholders: Sportscene Group increases its net earnings by 10.8% for the first quarter of fiscal 2008 and declares a dividend of $0.30 per share



    MONTREAL, Jan. 10 /CNW Telbec/ - At the Annual General Meeting of
Shareholders held this morning in Montreal, management of SPORTSCENE GROUP
INC. ("Sportscene" or "the Company"; SPS.A/TSX Venture Exchange), operator of
the LA CAGE AUX SPORTS chain of resto-bars, disclosed upward financial results
for the first quarter of fiscal 2008. In addition to solid operating
profitability, this period was highlighted by the pursuit of the various
strategic initiatives comprising the new development plan implemented in 2006.
    For the 13-week period ended November 25, 2007, Sportscene posted net
earnings of $1.5 million or $0.36 per share ($0.35 diluted), up 10.8% over the
corresponding period of the previous fiscal year, due in part to a
non-recurring gain of $0.2 million (before income taxes) on the disposal of
interests in subsidiaries to partners. In terms of operations, the Company
improved its operating profit margins as a result of the gradual optimization
of the profitability of the five Cages inaugurated during the previous six
quarters, increasingly efficient control and monitoring of the performance of
the La Cage aux Sports network and head office activities, and the
non-recurrence of certain expenses. For the first time in La Cage's history,
quarterly network sales topped the $30 million mark to reach $30.1 million,
reflecting a 2.6% growth over the same period last year despite the closure,
at very beginning of the quarter, of a corporate Cage that the Company intends
to eventually relocate to a better site. Notwithstanding this closure, the
network's sales growth mostly benefited from the several Cage construction and
expansion projects carried out in fiscal 2007, and to the initial contribution
of the latest corporate Cage inaugurated on November 7, 2007.
    Finally, Sportscene retains a solid balance sheet, as reflected by a
total net debt/invested capital ratio of only 15% as at November 25, 2007.
    "The implementation of our 2006-2010 development plan is progressing as
planned, in a dynamic and orderly manner," indicated Jean Bédard, Chairman of
the Board, President and Chief Executive Officer. "Consistent with our
program, our key initiatives are aimed at fostering revenue growth by adding
new business units and maximizing sales per unit, while optimizing the
profitability of each entity to build further shareholder value."
    Having recently inaugurated its 47th Cage, Sportscene is actively seeking
quality sites on which to build a few additional Cages before 2009. The
Company also intends to further develop its expertise and sources of revenues
in non-traditional areas consistent with its "Sports, Gang, Fun" concept, as
it has successfully achieved in recent years through the organization of
boxing galas, sports trips and on-site catering services. With this in mind,
as Jean Bédard pointed out, Sportscene is currently negotiating to acquire
certain strategic assets complementary to its core business. "Our goal is to
build upon our passion for sports, our strengths in branding and events
management and our long association with the sports community to open up new
growth avenues for the Company and raise its profile with consumers."
    Furthermore, to sustain the organic growth and profitability of its core
business, Sportscene is banking on innovation and the continuous updating of
its concept. In this regard, its teams are currently working on a project to
modernize La Cage's physical design; the Company also intends to renew its
advertising strategies and to implement new tools based on the latest
technologies in order to bring additional and distinctive value to customers.
For instance, its new exclusive Cage TV channel, gift card and virtual
boutique are some of the initiatives through which management aims to enhance
La Cage's unique personality, increase its visibility and foster restaurant
traffic. Finally, the Company is currently involved in a pilot project to
implement a network-wide kitchen process optimization program that will
improve the efficiency and lower the costs of restaurant operations.
    "All in all, the upcoming quarters will likely provide new growth
opportunities for Sportscene Group, while also bringing new challenges that we
will take up with as much dynamism and diligence as in the past," added the
President.

    Declaration of a $0.30 Per Share Dividend
    -----------------------------------------

    This morning, the Board of Directors of Sportscene Group declared a
dividend of $0.30 per share on Class A voting shares, which will be paid on
February 22, 2008 to shareholders of record as at January 25, 2008. As has
been the case over the past three years, the Board will contemplate the
payment of a second dividend toward July 2008.

    Departure of a Director
    -----------------------

    Sportscene's Board of Directors wishes to thank Robert Normand, who has
just stepped down from the Board of Directors after serving on it for more
than ten years. "Sportscene has greatly benefited from Mr. Normand's active
participation and wise counsel, including as Chairman of the Audit Committee
since 1997," said Jean Bédard. Nelson Gentiletti has taken over the
responsibility of Chairman of the Audit Committee.

    Profile
    -------

    In business since 1984, Sportscene Group Inc. operates Quebec's leading
chain of sports-themed resto-bars: La Cage aux Sports. The chain comprises
47 "Cages", 32 of which are wholly or jointly owned by the Company, and 15 are
franchises. Enjoying a strong brand image, La Cage aux Sports serves some
seven million guests each year. 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 including the
broadcasting of sporting events on high-definition giant screens, and the
scheduling of a host of contests and special events for customers. In support
of its network expansion strategy and dynamic promotion of the La Cage aux
Sports trademark, Sportscene has developed special skill in the construction,
fitting-out and renovation of sites. The Company is also involved in certain
other complementary, sports-related activities, such as the organization and
closed-circuit broadcasting of international-calibre boxing events, the
organization of group trips to sports destinations and the provision of
on-site catering services at sporting and popular events. Employing a total of
over 2,300 people throughout the network and at head office, Sportscene has
built La Cage aux Sports' business and financial success on a three-tiered
strategy: a foodservice quality comparable to the best chains in its category,
first-class marketing focused on dynamic promotion of its trademark, and
operational management practices that rank among the most efficient in the
industry.

    TSX Venture Exchange does not accept responsibility for the adequacy or
    accuracy of this release. This news release contains forward-looking
    statements that reflect the current outlook of the Company regarding the
    future. Such statements are subject to certain risks, uncertainties and
    assumptions. Actual results and events may vary significantly.

    
    Consolidated Statements of Earnings and Comprehensive Income
    (Amounts are expressed in thousands of dollars except per-share amounts)
    (unaudited)

                                                        13 weeks ended
    -------------------------------------------------------------------------
                                                 November 25,    November 26,
                                                        2007            2006
    -------------------------------------------------------------------------
    Revenues                                        $ 19,380        $ 20,860
    Cost of products sold, selling,
     general and administrative expenses              16,493          17,998
    -------------------------------------------------------------------------
    Earnings before other items                        2,887           2,862
    Interest on long-term debt                           114             113
    Other interest                                        42              32
    Amortization of capital assets                       761             719
    Amortization of other assets                         122             102
    Loss on disposal of assets                            17              28
    Gain on business disposals                          (246)            (78)
    -------------------------------------------------------------------------
    Earnings before income taxes and
     non-controlling interest                          2,077           1,946
    Income taxes                                         587             591
    -------------------------------------------------------------------------
    Net earnings before non-controlling interest       1,490           1,355
    Non-controlling interest                               8              17
    -------------------------------------------------------------------------
    Net earnings and comprehensive
     income for the period                          $  1,482        $  1,338
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings per share:
        Basic                                       $   0.36        $   0.32
        Diluted                                     $   0.35        $   0.32
    Weighted average number of
     Class A shares outstanding:
        Basic                                          4,171           4,133
        Diluted                                        4,197           4,170
    -------------------------------------------------------------------------


    Consolidated Statements of Retained Earnings
    (Amounts are expressed in thousands of dollars)
    (unaudited)
                                                         13 weeks ended
    -------------------------------------------------------------------------
                                                 November 25,    November 26,
                                                        2007            2006
    -------------------------------------------------------------------------
    Retained earnings, beginning of the period      $ 18,964        $ 16,561
    Net earnings for the period                        1,482           1,338
    -------------------------------------------------------------------------
    Retained earnings, end of period                $ 20,446        $ 17,899
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Balance Sheets
    (amounts are expressed in thousands of dollars)
    (unaudited)
                                                       As at           As at
                                                 November 25,      August 26,
                                                        2007            2007
    -------------------------------------------------------------------------
                                                           $               $
    Assets
    Current assets:
     Cash and cash equivalents                         3,127           3,149
     Restricted cash                                     138             266
     Temporary investments                                 -              40
     Accounts receivable                               7,612           5,002
     Inventories                                       1,123           1,126
     Income taxes receivable                             108              26
     Prepaid expenses                                  1,146             834
     Current portion of notes receivable                  50              41
     ------------------------------------------------------------------------
     Total current assets                             13,304          10,484

    Notes receivable                                     168             184
    Capital assets                                    25,638          24,828
    Other assets                                         978             973
    Future income taxes                                  768             768
    Goodwill                                           2,088           2,096
    -------------------------------------------------------------------------
    Total assets                                      42,944          39,333
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
    Current liabilities:
     Accounts payable and accrued liabilities          8,514           6,387
     Future income taxes                                 114             114
     Deferred income and credits                         938             976
     Current portion of long-term debt                 1,237           1,274
    -------------------------------------------------------------------------
     Total current liabilities                        10,803           8,751

    Long-term debt                                     6,233           6,493
    Deferred income and credits                        1,147           1,097
    Future income taxes                                  324             262
    Non-controlling interest                             553             345
    -------------------------------------------------------------------------
    Total liabilities                                 19,060          16,948

    Shareholders' equity:
     Share capital                                     3,264           3,255
     Contributed surplus                                 174             166
     Retained earnings                                20,446          18,964
    -------------------------------------------------------------------------
    Total shareholders' equity                        23,884          22,385
    -------------------------------------------------------------------------
    Total liabilities and shareholders' equity        42,944          39,333
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Cash Flows
    (Amounts are expressed in thousands of dollars)
    (unaudited)
                                                          13 weeks ended
    -------------------------------------------------------------------------
                                                 November 25,    November 26,
                                                        2007            2006
    -------------------------------------------------------------------------
    Cash flows from operating activities:
     Net earnings for the period                    $  1,482        $  1,338
     Adjustments for:
       Gain on business disposals                       (246)            (78)
       Loss on disposal of assets                         17              28
       Amortization of capital assets                    761             719
       Amortization of other assets                      122             102
       Non-controlling interest                            8              17
       Stock-based compensation                            8              24
       Future income taxes                                62             (22)
    -------------------------------------------------------------------------
                                                       2,214           2,128

    Net change in non-cash balances
     related to operations,
     net of acquisitions and business disposals         (653)         (2,274)
    ------------------------------------------------------------------------
                                                       1,561            (146)
    ------------------------------------------------------------------------
    Cash flows from financing activities:
     Proceeds from issuance of long-term debt            120             983
     Repayment of long-term debt                        (381)           (266)
     Proceeds from issuance of equity shares
      of a subsidiary to non-controlling interest        174               -
     Dividends paid to non-controlling interests           -             (11)
    ------------------------------------------------------------------------
                                                         (87)            706
    ------------------------------------------------------------------------
    ------------------------------------------------------------------------
    Cash flows from investing activities:
     Proceeds from business disposals,
      net of cash disposal                               187              75
     Increase in restricted cash                         128               -
     Disposal of temporary investments                    40           1,552
     Change in notes receivable                           18              68
     Additions to capital assets                      (1,727)         (2,042)
     Increase in other assets                           (154)           (171)
     Proceeds from disposal of capital assets             12              15
    ------------------------------------------------------------------------
                                                      (1,496)           (503)
    ------------------------------------------------------------------------
    Increase (decrease) in cash and cash
     equivalents during the period                       (22)             57
    Cash and cash equivalents, beginning
     of the period                                     3,149           4,205
    ------------------------------------------------------------------------
    Cash and cash equivalents, end of the period     $ 3,127        $  4,262
    ------------------------------------------------------------------------
    ------------------------------------------------------------------------
    




For further information:

For further information: Jean Bédard, Chairman of the Board, President
and Chief Executive Officer; Gilles Lacombe, Vice-President, Finance and
Administration, (450) 641-3011; Source: Sportscene Group Inc.


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