BMTC Group Inc. announces financial results for its nine-month period ended September 30, 2007



    MONTREAL, Nov. 8 /CNW Telbec/ - For the nine-month period ended
September 30, 2007, the Company's revenue increased by $2.2 million to     
$617.9 million, from the $615.7 million recorded in the corresponding
2006 period. Net income for the nine-month period ended September 30, 2007,
stood at $32,903,000 compared with $29,094,000, for the corresponding 2006
period. Earnings per share ("EPS") increased by $0.17 to $1.02 for the period
ended September 30, 2007.
    For the nine-month period ended September 30, 2007, results from the
costing of options had the effect of reducing net earnings by $0.19 per share,
compared to a reduction of $0.08 per share for the corresponding 2006 period.
While the Company costs options as either an expense or revenue in the net
earnings calculation, the Company believes it is preferable to inform readers
of its financial statements of the impact of this element, which is outside
the Company's control and which varies along with the course of the Company's
share price in any given time period. An increase in the Company's share price
incurs an expense, while a decrease in the Company's share price incurs
revenue. Of particular concern is that the reader could be made to believe
that the Company's profitability had risen in the context of a major decrease
in the Company's share price. It is for this reason that the Company includes
net earnings in absolute dollars and per-share dollars excluding this costing
of options effect, even though doing so does not conform to GAAPs, it is
therefore unlikely that we can compare them with the same type of measures
presented by other issuers. It is worth noting that the Company is one of few
public companies to expense options on an ongoing basis. The sale of fixed
assets during the period resulted in an increase in net per share earnings of
$0.06 compared with $0.01 for the corresponding period. The Superior Court of
Montreal rendered a judgment against the Company's subsidiary Brault &
Martineau Inc. ordering Brault & Martineau to pay punitive damages. The
Company recorded an extraordinary charge in the amount of $2.545 million, or
$1.731 million on an after-tax basis, representing the full amount of the
award by the Superior Court and the Company's estimate of the ancillary
distribution costs. This net amount represents a reduction of $0.05 to the net
per share earnings for the period ended September 30th, 2007. The share
repurchase program contributed $0.05 to net per share earnings for the
nine-month period ended September 30, 2007. Excluding all these effects, net
earnings would have increased by 7,4 M$ or $0.23 per share for the nine-month
period ended September 30th, 2007.
    The adjusted 7,4 M$ in net earnings breaks down as follows for the
nine-month period ended September 30th 2007:

    
                                                            2007        2006
                                                     ($ in thousands, except
                                                       for per share amounts)

    Net Earnings                                          32,903      29,094
    Cost (gain) of options (after-tax)                     6,216       2,622
    (Gain) resulting from the sale
     of fixed assets (after-tax)                          (1,958)       (254)
    Provision for judgment (after-tax)                     1,731           -
                                                       ----------  ----------
    Adjusted Net Earnings                                 38,892      31,462

    MINUS : Adjusted Net Earnings 2006                    31,462
                                                       ----------

    Increase  2007                                         7,430


    On October 17, 2007, the Superior Court of Montreal rendered a judgment
against the Company's subsidiary Brault & Martineau Inc. ordering Brault &
Martineau to pay punitive damages in the amount of $2 million (plus interest
from the judgment date and costs of distribution) in relation to a class
action instituted by a group of consumers that had purchased goods from
Brault & Martineau using the financing programs offered by Brault & Martineau
and its credit supplier.
    Based on its analysis of the judgment rendered, the Company has decided to
appeal the judgment to the Québec Court of Appeal. The Company intends to
vigorously defend its position. The Company believes its appeal is
well-founded and is confident that it will ultimately succeed. Pending this
appeal, the Company recorded an extraordinary charge in the amount of
$2.545 million, or $1.731 million on an after-tax basis, representing the full
amount of the award by the Superior Court and the Company's estimate of the
ancillary distribution costs.
    As at September 30th, 2007, the Company held Canadian asset-backed
commercial paper (ABCP) investments having a nominal value of $6,1 million,
representing 6% of the aggregate of its cash and investments as at
September 30th, 2007. The Company's ABCP investments matured on August 30th,
2007 but no payment has yet been received. The Company is assessing its
alternatives and recourses, including legal action, to recover the full value
of these ABCP investments.
    The Company records its investments at market value. However, due to the
liquidity issue with respect to ABCP, there is currently no market for the
Company's ABCP investments. Therefore, any adjustment to the value of the
Company's ABCP investments in order to reflect their market value will be made
when there will be a market for such ABCP investments.

    Annual Financial Information

                                                2006        2005        2004
                                           ----------  ----------  ----------
                               ($ in thousands, except for per share amounts)
    Revenue(*)                             $ 835,681   $ 804,361   $ 788,721
    Net earnings                              45,633      41,891      44,464
    Total Assets                             284,963     274,702     248,754
    Net Earnings per share
      Basic                                    $1.35       $1.20       $1.21
      Diluted                                   1.30        1.16        1.18

    Dividends per share                         0.24        0.13        0.11

    (*) Following the changes in the interpretation of the accounting
        principles in EIC-123 of the CICA entitled "Reporting Revenue Gross
        as a Principal Versus Net as an Agent", the Company modified its
        presentation of revenues from extended services contracts on certain
        products in order to present them at the net amount obtained for the
        services rendered. Consequently, the Company adjusted the results for
        the year ended December 31, 2005 and 2004 by reducing operating
        revenues as well as the cost of products sold, and commercial and
        administrative expenses in the amount of $14,409,000 and $13,125,000.
        These changes had no impact on net earnings.


    Quarterly Results (unaudited)

    ($ in thousands, except for per share amounts)

                                     Quarter Ended           Quarter Ended
                                        March 31                June 30
                                    2007        2006        2007        2006
                               ----------  ----------  ----------  ----------

    Revenue(*)                 $ 178,452   $ 182,969   $ 216,109   $ 215,959
    Net earnings                   2,055         285      14,878      12,143
    Net Earnings per share
      Basic                        0.060       0.010       0.460       0.350
      Diluted                      0.060       0.010       0.440       0.340

                                     Quarter Ended           Quarter Ended
                                      September 30            December 31
                                    2007        2006        2006        2005
                               ----------  ----------  ----------  ----------

    Revenue(*)                 $ 223,355   $ 216,731   $ 220,022   $ 208,992
    Net earnings                  15,970      16,666      16,539       8,598
    Net Earnings per share
      Basic                        0.500       0.490       0.500       0.260
      Diluted                      0.480       0.470       0.480       0.240


    (*) Following the changes in the interpretation of the accounting
        principles in EIC-123 of the CICA entitled "Reporting Revenue Gross
        as a Principal Versus Net as an Agent", the Company modified its
        presentation of revenues from extended services contracts on certain
        products in order to present them at the net amount obtained for the
        services rendered. Consequently, the Company adjusted its quarterly
        results for 2006 and 2005 by reducing operating revenues as well as
        the cost of products sold, and commercial and administrative
        expenses. These changes had no impact on net earnings.


    As for the three-month period ended September 30th, 2007 revenues from
operations totaled 223,4 M$, representing an increase of 6,7 M$ over the   
216,7 M$ for the corresponding 2006 period. The Company's net income for the
three-month period ended September 30th, 2007, totaled $ 15,970,000, or    
$0.50 per share, compared with $ 16,666,000 or $0.49 per share for the
corresponding 2006 period. For the three-month period ended September 30th,
2007, the results from costing of options had the effect of reducing the
earnings per share by $0.01 compared with an increase in earnings of $0.01 for
the corresponding 2006 period. The Superior Court of Montreal rendered a
judgment against the Company's subsidiary Brault & Martineau Inc. ordering
Brault & Martineau to pay punitive damages. The Company recorded an
extraordinary charge in the amount of $2.545 million, or $1.731 million on an
after-tax basis, representing the full amount of the award by the Superior
Court and the Company's estimate of the ancillary distribution costs. This net
amount represents a reduction of $0.05 to the net per share earnings for the
period ended September 30th, 2007. The share repurchase program contributed
$0.03 to net per share earnings for the quarter ended September 30th, 2007.
Excluding all these effects, net earnings would have increased by 1,5 M$ or
$0.05 per share for the three-month period ended September 30th, 2007.
    The adjusted 1,5 M$ in net earnings breaks down as follows for the
three-month period ended September 30th, 2007:

                                                            2007        2006
                                                     ($ in thousands, except
                                                       for per share amounts)

    Net Earnings                                          15,970      16,666
    Cost (gain) of options
     (after-tax)                                             259        (341)
    (Gain) resulting from the sale
     of fixed assets (after-tax)                               -         108
    Provision for judgment (after-tax)                     1,731           -
                                                       ----------  ----------
    Adjusted Net Earnings                                 17,960      16,433

    MINUS : Adjusted Net Earnings 2006                    16,433
                                                       ----------

    Increase  2007                                         1,527
    

    A semi-annual eligible dividend of $0.15 per share has been declared to
holders of Class A Subordinate voting shares and Class B Multiple voting
shares of record as of the close of business on December 20th, 2007 which will
be payable on January 3rd, 2008.
    No options have been granted or exercised during the third quarter. As at
September 30th, 2007, options for 1 613 370 Class A Subordinate Voting Shares
therefore remain outstanding and 2,986,832 options may still be issued
pursuant to the Plan. The outstanding options may be exercised at prices
ranging between $2.52 and $7.19 per Class A Subordinate Voting Shares.
    The number of outstanding shares of the Company changed during 2007 due
to the share redemption programs implemented in September 2006 and renewed in
2007, and the conversion of Class B Multiple Voting Shares. Accordingly,
602,226 Class B Multiple Voting Shares and 1,213,428 Class A Subordinate
Voting Shares were redeemed by the Company and cancelled, while
767,244 Class B Multiple Voting Shares were converted into as many Class A
Subordinate Voting Shares. Also, 50,630 Class A Subordinate Voting Shares were
issued following the exercise of a similar amount of options. As a result of
these changes, the Company had, as of October 31st, 2007, 11,039,883 Class B
Multiple Voting Shares and 20,109,493 Class A Subordinate Voting Shares
outstanding.

    BMTC Group Inc., which Class A Subordinate Voting Shares are listed on
the Toronto Stock Exchange, is an important retailer of furniture, electronic
goods and household appliances in the Montreal, Quebec City, Laval,
Ste-Hyacinthe, St-Jean-sur-le-Richelieu, Granby, Repentigny, Ste-Foy,
Sherbrooke, Trois-Rivières, Rimouski, St-Georges, Rivière-du-Loup, Chicoutimi,
and Gatineau regions through its affiliates Brault & Martineau Inc. and
Ameublements Tanguay.




For further information:

For further information: Mr. Yves Des Groseillers, Chairman, President
and Chief Executive Officer, BMTC Group Inc., (514) 648-5757


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