BMTC Group Inc. announces financial results for its quarter ended September 30th, 2015

MONTREAL, Nov. 5, 2015 /CNW Telbec/ - For the nine month period ended September 30th, 2015, the Company's revenues increased by $8,832,000 to $527,038,000, compared to $518,206,000 recorded in the corresponding 2014 period, a 2% increase. Same store revenues remained unchanged for the same period. Net earnings for the nine month period ended September 30th, 2015, amounted to $25,292,000 compared to $30,629,000 for the corresponding 2014 period. Basic net earnings per share decreased to $0.58 compared to $0.68 in 2014.

During the period ended September 30th, 2015, the Company proceeded with the sale of land for an amount of $2,393,000 resulting in an after tax gain of $1,617,000 or $0.04 per basic share.

The effect of costing options had no impact on net basic earnings per share for the nine month period ended September 30th, 2015 and 2014.

For the nine month period ended September 30th, 2015, the share repurchase program contributed to an increase in net earnings per basic share of $0.04.

Excluding these effects, the variation to the adjusted net earnings would have been $7,492,000 or $0.17 per basic share for the nine month period ended September 30th, 2015.

The $7,492,000 variation in adjusted net earnings in 2015 is as follows:

 



($ in thousands)



2015


2014






Net Earnings


25 292


30 823

Gain on disposal of land (after-tax)


(1 617)


-

Variation of cost of options (after-tax)


(197)


147

Adjusted Net Earnings


23 478


30 970

Minus: Adjusted Net Earnings for 2014


30 970








Variation


(7 492)



 

This variation in adjusted after-tax income is allocated as follows for the first three quarters:

 



($ in thousands)






Increase


Increase


Increase



(decrease)


(decrease)


(decrease)



retail operating
earnings


investment
income


adjusted
operating earnings








1st quarter 2015


1 464


(214)


1 250

2nd quarter 2015


(1 427)


(446)


(1 873)

3rd quarter 2015


(3 468)


(3 401)


(6 869)

Total


(3 431)


(4 061)


(7 492)

 

The decrease in net earnings for the period ended September 30th, 2015, was due to the decrease of investment revenues as well as the increase of non-recurrent expenses, the details are as follows.

 



 ($ in thousands)




Increase:

Depreciation of fixed assets (after tax)


(779)


Marketing expenses (after tax)


(890)


Web related expenses (after tax)


(1 253)


Expenses related to capital reorganisation (after tax)


(509)



(3 431)




Decrease:

Investment income (after tax)


(4 061)



(7 492)

 

Annual Financial Information


($ in thousands, except for per share amounts)




2014


2013



$


$

Revenue


701 356


694 743

Net Earnings


48 647


57 254

Total Assets


362 350


306 296

Net Earnings Per Share






Basic


1,08


1,24


Diluted


1,08


1,24

Dividends Per Share


0,24


0,24

 

Financial Position and Dividends

Cash and investments decreased by $96,261,000 during the nine month period ended September 30th, 2015. Investments consist primarily of bank notes and common shares, which at the close of the period had a market value of $61,404,000 (including cash).

As of September 30th, 2015, the working capital showed a deficit of $4,311,000 a decrease of $21,284,000 compared to December 31st, 2014. The Company's shareholders' equity decreased from $255,426,000 in 2014 to $166,772,000 as at September 30th, 2015. As of September 30th, 2015, the book value per share stood at $4.40, compared to $5.68 as at December 31st, 2014.

Pursuant to the normal course issuer bids on March 12th, 2014 and renewed on March 13th, 2015. Accordingly, 67,838 Class A Subordinate Voting Shares were repurchased and cancelled by the Company. As a result of this change the Company had on May 10th, 2015, 1,748,796 Class B Multiple Voting Shares and 43,145,066 Class A Subordinate Voting Shares issued and outstanding.

On May 11th, 2015, the Company announced the completion of the reorganization to eliminate the Company's dual-class share capital structure by way of court-approved plan of arrangement. The Company received all required approvals to complete the arrangement, including a final order from the Superior Court of Québec. Pursuant to the arrangement, all issued and outstanding Class B Multiple Voting Shares were converted into Class A Subordinate Voting Shares on a one-for-one basis, without any monetary consideration being paid. The Class A Subordinate Voting Shares were also renamed "Common Shares". As at May 12th, 2015, the Company had 44,893,862 Common Shares issued and outstanding.

On July 10th, 2015, the Company announced that it has repurchased for cancellation 6,980,012 common shares at a price of $15.50 per share, for a total consideration of $108,190,186, which was paid from the Company's cash on hand. This price represents a discount of 5.5% to the trading price of the last independent transaction on the Toronto Stock Exchange and a discount of 1.2% to the simple average of the closing price of the Company's common shares on the Toronto Stock Exchange for the 20 days ending on July 9th, 2015 on which common shares of the Company were traded.

A favorable decision was obtained from the Autorité des marchés financiers to exempt the Company from the issuer bid requirements under applicable securities legislation in connection with the transaction. Post-transaction, there were 37,913,850 common shares issued and outstanding (compared with 44,893,862 common shares pre-transaction), representing a decrease of approximately 15.5% of the total number of common shares issued and outstanding.

In the context of the share repurchase, the Company amended its normal course issuer bid that will be in effect until March 12th, 2016 in order to specifically authorize purchases effected outside the facilities of the Toronto Stock Exchange pursuant to exemption orders issued by Canadian securities regulatory authorities. The price that the Company will pay for purchases effected outside the facilities of the Toronto Stock Exchange pursuant to exemption orders issued by securities regulatory authorities will be at discount to the prevailing market prices in compliance with the requirements under such exemption orders.

In accordance with the rules of the Toronto Stock Exchange, because the number of common shares repurchased exceeds the annual aggregate limit of shares that the Company may repurchase by March 12th, 2016 under its current normal course issuer bid, the Company may no longer repurchase shares under its current normal course issuer bid. Therefore, as at September 30th, 2015, the Company had 37,913,850 Common Shares.

During the nine month period ended September 30th, 2015, no options were granted or exercised. On August 7th, 2015, 10,950 options were cancelled. As at September 30th, 2015, options for 219,000 Common Shares, representing 0.58% of the Company's outstanding shares remain issued and 5,710,864 authorized share options, representing approximately 15.06% of the Company's outstanding shares, may still be granted pursuant to the Plan. The issued and outstanding options may be exercised at a price of $17.85 per Common Shares.

A semi-annual eligible dividend of $0.12 per Common Share has been declared to holders registered at the close of business on December 21st, 2015 which will be payable on January 4th, 2015.

 

Quarterly Results (Unaudited)


($ in thousands, except for per share amounts)









March 31st


June 30th




2015

2014

2015

2014



$

$

$

$

Revenu


149 280

145 118

188 373

182 881

Net (Loss) Earnings


59

(1 468)

12 196

14 020

Net (Loss) Earnings Per Share







Basic


-

(0,03)

0,27

0,31


Diluted


-

(0,03)

0,27

0,31















Sept. 30th


Dec. 31st




2015

2014

2014

2013



$

$

$

$

Revenu


189 385

190 207

183 150

174 168

Net (Loss) Earnings


13 037

18 271

17 824

26 625

Net (Loss) Earnings Per Share







Basic


0,31

0,40

0,40

0,58


Diluted


0,31

0,40

0,40

0,58

 

For the three month period ended September 30th, 2015, the Company's revenues decreased by $822,000 to $189,385,000, compared to $190,207,000 recorded in the corresponding 2014 period Net earnings for the three month period ended September 30th, 2015, amounted to $13,037,000 compared to $18,271,000 for the corresponding 2014 period. Basic net earnings per share amounted to $0.31 compared to $0.40 in 2014.

During the period ended September 30th, 2015, the Company proceeded with the sale of land for an amount of $2,393,000 resulting in an after tax gain of $1,617,000 or $0.04 per basic share.

The effect of costing options had no impact on net basic earnings per share for the three month period ended September 30th, 2015 and 2014.

For the three month period ended September 30th, 2015, the share repurchase program contributed to an increase in net earnings per basic share of $0.04.

Excluding these effects, the variation to the adjusted net earnings would have been $6,869,000 or $0.17 per basic share for the nine month period ended September 30th, 2015.

The $6,869,000 variation in adjusted net earnings in 2015 is as follows:

 



($ in thousands)








2015


2014






Net Earnings


13 037


18 271

Gain on disposal of land (after-tax)


(1 617)


-

Variation of cost of options (after-tax)


4


22

Adjusted Net Earnings


11 424


18 293

Minus: Adjusted Net Earnings for 2014


18 293








Variation


(6 869)



 

Exploitation

Groupe BMTC Inc.

On July 10th, 2015, the Company proceeded with a simplified vertical merger with its subsidiary Groupe ATBM Inc. (Brault & Martineau and EconoMax division).

The Company has started the restructuration of all of its websites. The first phase of the implementation of a distinct e-commerce platform for its banner Brault & Martineau will be completed and operational in November, 2015. The process of implementation will continue throughout 2016 for the second phase as well as for all the other banners of the Company. The Company is also reviewing its IT systems in order standardise them throughout the banners, as well as to allow them to be more aligned with our e-commerce strategies. The costs related to these modifications are estimated to be $10,600,000 and will be charged in 2015 and 2016.

Brault & Martineau Division

The Company is presently evaluating the refitting its furniture and electronic departments in all of its stores. The objective of this improvement is to offer our clients a unique shopping experience which will help differentiate us from online shopping. The costs related to these renovations for the next two years, 2016 and 2017, are estimated to be $15,000,000.

EconoMax Division

In October, 2015, the Company proceeded with the opening of a new store in Drummondville the costs related this opening were charged in the period ended September 30th, 2015. The EconoMax banner now has 11 stores in the province of Quebec.

Ameublements Tanguay

In July 2015, the Company purchased land in Trois-Rivières of 220,000 square feet for the construction and opening of a new store in the fall of 2016. The existing store will be converted into a liquidation center.

Management Discussion and Outlook for the Future of the Company

In spite of a difficult economic context, the Quebec economy has seen a slight growth in 2014. The loss of more than 100,000 jobs in Quebec as well as government austerity measures caused a slowdown in consumer spending. According to the Conseil québécois du commerce de detail (CQCD), the Quebec economy progressed by nearly 3.5% during 2014 and forecasts for 2015 are not very promising. It is expected that 2015 will be one of the worst years since 2010 for bankruptcy chapters in the retail industry. The decrease in the purchasing power of Quebec consumers is therefore making them look for deals and they tend to purchase more affordable products. This is putting a downward pressure on our sales as well as on our average invoices.

During 2015, the Company continued its expansion of the EconoMax banner. Following the opening of the Granby store in April 2015, and a new store in Drummondville in October 2015, this has brought to a total of eleven EconoMax stores in the metropolitan area of Montreal, giving the banner the visibility needed to properly develop.

Management feels that the Company's financial position provides the Company with a competitive advantage, particularly in difficult market conditions. It permits the Company to continue its aggressive marketing campaigns, allowing it to remain a leading participant in its market, while continuing to offer a superior financial performance.

Caution regarding forward-looking statements

This Quarterly Management Report contains certain forward-looking statements with respect to the Company. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate", expect", "intend", "may", "plan", "predict", "project", "will", "would", as well as the negative of these terms and similar terminology, including references to assumptions.

Forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons which the Company has identified in the 2014 Annual Information Form under "Narrative Description of the Business - Risk Factors", and other risks detailed from time to time in the Company's continuous disclosure documents.

The reader is cautioned that the factors we refer above are not exhaustive of the factors that may affect any of the Company's forward-looking statements. The reader is also cautioned to consider these and other factors carefully and not to put undue reliance on forward-looking statements.

The Company made a number of assumptions in making forward-looking statements in this Quarterly Management Report. The Company considers the assumptions on which these forward-looking statements are based to be reasonable.

These statements reflect current expectations regarding future events and operating performance and speak only as of the date of release of this Quarterly Management Report, and represent the Company's expectations as of that date. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.

Non International Financial Reporting Standards (IFRS) financial measures

The Company discloses adjusted net earnings, which includes or excludes certain amounts that are not considered representative of performance measures and financial recurrence of the Company. Management believes that this measure is useful in understanding and analysing the operational performance of the Company.

Adjusted net earnings are not an earnings measure recognised by IFRS and does not have a standardised meaning prescribed by IFRS. Therefore, adjusted net earnings as discussed in this MD&A may not be compared to similar measures presented by other issuers. This measure of performance should not be considered as an alternative as an indicator of performance, but rather as additional information.

The Company discloses in this MD&A under the section "Results" a reconciliation between net earnings and adjusted net earnings.

Same store revenues are not an earnings measure recognised by IFRS and does not have a standardised meaning prescribed by IFRS. Therefore, same store sales as discussed in this MD&A may not be compared to similar measures presented by other issuers.

BMTC Group Inc.'s Common Shares are listed on the Toronto Stock Exchange and through its subsidiary, Ameublements Tanguay Inc., is a major retailer of furniture, electronic goods and household appliances operating in the province of Quebec.

 

SOURCE BMTC Group Inc.

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

RELATED LINKS
www.braultetmartineau.com

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