Brick Group posts a record Q2 EBITDA, an increase of 17.8%



    
    /NOT FOR DISTRIBUTION THROUGH U.S. NEWS WIRE SERVICES OR DISSEMINATION IN
    THE U.S/

    EDMONTON, Aug. 7 /CNW/ - (TSX:BRK.UN):

    HIGHLIGHTS - SECOND QUARTER 2008
    --------------------------------

    -   TOTAL CORPORATE AND FRANCHISE SALES GROWTH OF 6.3%
    -   TOTAL CORPORATE SALES GROWTH OF 5.2%
    -   SAME STORE SALES GROWTH OF 2.0%
    -   17.8% EBITDA GROWTH/$2.5 MILLION OVER LAST YEAR
    -   PAYOUT RATIO IMPROVES BY 11.5 PPTS FROM 99.9% TO 88.4 %
    

    The Brick Group Income Fund (the "Brick Group") today announced its
financial results for the second quarter ended June 30, 2008. The Brick
Group's second quarter results and Management's Discussion and Analysis can be
found on the Brick Group's website at www.thebrickgroup.ca.
    The Brick Group's second quarter EBITDA of $16.6 million is $2.5 million
or 17.8% higher than in the prior year, after the second quarter results for
2007 are normalized for a $1.8 million one-time gain on the sale of a
redundant real estate asset. We increased gross margins and managed costs to
drive a record second quarter EBITDA.
    Against a backdrop of challenging economic conditions, we achieved
positive total corporate and franchise sales growth of 6.3%, consolidated
corporate sales and operating revenue growth of 5.2%, and same store sales
growth of 2.0%.
    Based on the June 30, 2008 closing price of $7.92 per Class A Unit, our
June 2008 distribution of $0.10 per unit represents an annualized cash-on-cash
yield of approximately 15.2%. The Brick Group's payout ratio for the twelve
month period ended June 30, 2008 was 88.4%, a significant improvement of
11.5 ppts from 99.9% the prior year.
    "With two strong quarters of year-over-year growth in EBITDA and our
second quarter positive same store sales growth, we believe we are well
positioned to continue to deliver against our objectives for the year." said
Kim Yost, President and Chief Executive Officer. "For the remainder of the
year we will maintain our focus on an aggressive marketing approach to supply
our customers, coast to coast, with quality and value opportunities. As we did
last year, we will continue to focus on driving sales, maximizing margins and
controlling costs. We have a clearly defined strategy and a long-term focus to
increase our market share."

    
    SECOND QUARTER HIGHLIGHTS

    -------------------------------------------------------------------------
                                   For the three months ended June 30
                          ---------------------------------------------------
    (000's of $ except %,                            $ Increase   % Increase
     and store amounts)       2008         2007       (Decrease)   (Decrease)
    -------------------------------------------------------------------------
    Retail Segment - Sales
     and operating revenue $  338,319   $  324,301       14,018          4.3%
    Financial Services
     Segment - Sales and
     operating revenue         14,908       11,600        3,308         28.5%
                          ------------ ------------
    Consolidated - Sales
     and operating revenue    353,227      335,901       17,326          5.2%
    Franchise Sales            30,693       25,139        5,554         22.1%
                          ------------ ------------

    Consolidated and
     Franchise Sales and
     operating revenue     $  383,920   $  361,040       22,880          6.3%
                          ------------ ------------
                          ------------ ------------

    Same Store Sales
     Growth (corporate
     stores)                      2.0%         4.8%

    Same Store Sales
     Growth (corporate and
     franchise stores)            2.0%         4.4%

    Retail Segment -
     EBITDA                $    9,030   $    9,301         (271)        -2.9%
    Financial Services
     Segment - EBITDA           7,529        6,558          971         14.8%
                          ------------ ------------
    Consolidated - EBITDA  $   16,559   $   15,859          700          4.4%
                          ------------ ------------
                          ------------ ------------

      EBITDA as a
       percentage of sales
       and operating
       revenue                    4.7%         4.7%

    Retail Segment -
     Net loss              $     (866)  $  (44,343)      43,477        -98.0%
    Financial Services
     Segment - Net income       7,631        6,801          830         12.2%
                          ------------ ------------
    Consolidated - Net
     income (loss)         $    6,765   $  (37,542)      44,306       -118.0%
                          ------------ ------------
                          ------------ ------------

    EBITDA - Adjusted      $   17,947   $   18,843         (896)        -4.8%

      Adjusted EBITDA as
       a percentage of
       sales and operating
       revenue                    5.1%         5.6%

    Distributable cash
     per unit for the
     three months ended
     June 30               $     0.25   $     0.27        (0.02)        -6.5%

    Payout Ratio for the
     three months ended
     June 30                    118.2%       110.5%

    Distributable cash per
     unit for the twelve
     months ended June 30

    Payout Ratio for the
     twelve months ended
     June 30

    Stores at period end          211          203
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                    For the six months ended June 30
                          ---------------------------------------------------

    (000's of $ except %,                            $ Increase   % Increase
     and store amounts)       2008         2007       (Decrease)   (Decrease)
    -------------------------------------------------------------------------
    Retail Segment - Sales
     and operating revenue $  651,778   $  640,223       11,555          1.8%
    Financial Services
     Segment - Sales and
     operating revenue         29,368       23,118        6,250         27.0%
                          ------------ ------------
    Consolidated - Sales
     and operating revenue    681,146      663,341       17,805          2.7%
    Franchise Sales            60,836       51,092        9,744         19.1%
                          ------------ ------------

    Consolidated and
     Franchise Sales and
     operating revenue     $  741,982   $  714,433       27,549          3.9%
                          ------------ ------------
                          ------------ ------------

    Same Store Sales
     Growth (corporate
     stores)                     -0.1%         5.7%

    Same Store Sales
     Growth (corporate and
     franchise stores)           -0.2%         5.5%

    Retail Segment -
     EBITDA                $   14,088   $   13,843          245          1.8%
    Financial Services
     Segment - EBITDA          14,919       12,783        2,136         16.7%
                          ------------ ------------
    Consolidated - EBITDA  $   29,007   $   26,626        2,380          8.9%
                          ------------ ------------
                          ------------ ------------

      EBITDA as a
       percentage of sales
       and operating
       revenue                    4.3%         4.0%

    Retail Segment -
     Net loss              $   (4,750)  $  (48,451)      43,701        -90.2%
    Financial Services
     Segment - Net income      15,200       13,641        1,559         11.4%
                          ------------ ------------
    Consolidated - Net
     income (loss)         $   10,450   $  (34,810)      45,260       -130.0%
                          ------------ ------------
                          ------------ ------------

    EBITDA - Adjusted      $   31,959   $   32,009          (50)        -0.2%

      Adjusted EBITDA as
       a percentage of
       sales and operating
       revenue                    4.7%         4.8%

    Distributable cash
     per unit for the
     three months ended
     June 30

    Payout Ratio for the
     three months ended
     June 30

    Distributable cash per
     unit for the twelve
     months ended June 30  $     1.36   $     1.20         0.16         13.0%

    Payout Ratio for the
     twelve months ended
     June 30                     88.4%        99.9%

    Stores at period end          211          203
    -------------------------------------------------------------------------
    

    Overview

    Management is pleased to report continued growth and strong results for
the second quarter ended June 30, 2008.
    Consolidated EBITDA of $16.6 million was the highest ever reported for
the second quarter since the Brick Group became an income fund in 2004. Based
on regular operations, consolidated EBITDA increased by 17.8%, and was
0.4 ppts higher as a percentage of sales and operating revenue, compared to
the same quarter last year.
    Against a backdrop of challenging economic conditions, we achieved
positive same store sales growth of 2.0% for our corporate stores. Our
consolidated sales and operating revenue of $353.2 million represents
quarter-over-quarter growth of $17.3 million, or 5.2%.
    In addition to growing our sales, we were able to improve margins and
control costs to drive quarter-over-quarter EBITDA growth. Our 17.8% increase
in consolidated EBITDA from regular operations excludes the impact of a
one-time gain of $1.8 million recorded in the second quarter of 2007. This
one-time gain related to the disposal of a redundant real estate asset.
Including the impact of this one-time gain, consolidated EBITDA of $16.6
million increased by 4.4%.
    For the second quarter, consolidated net income was $6.8 million compared
to a loss of $37.5 million for the same quarter last year. Our 2007 second
quarter loss included a one-time charge for future income tax expense of
$44.4 million related to the "Tax Fairness Plan" announced on October 31, 2006
by the Department of Finance (Canada). The impact on comparability of this
one-time charge is discussed further under the heading Consolidated Operating
and Financial Results.
    While concern over the slowing U.S. economy and its impact on Canada
continues, management believes it is well positioned with its promotions,
mid-market offerings and improved supply chain to continue to drive same store
and total sales.
    Through the end of June 30, 2008, and for the 47th consecutive month
since becoming an income fund, we have continued to meet all of our
distribution commitments. This represents $267 million distributed to our
unitholders. Based on the June 30, 2008 closing price of $7.92 per Class A
Trust Unit, our June 2008 distribution of $0.10 per unit represents an
annualized cash-on-cash yield of approximately 15.2%.
    The payout ratio for the twelve months ended June 30, 2008 was 88.4%,
reflecting an improvement of 11.5 ppts from the same period last year.
    Under our alternative view of distributable cash, the payout ratio for
the twelve months ended June 30, 2008 was 87.3% compared to 100.3% in the
previous year, a 13.0 ppts improvement.
    On April 22nd, 2008, The Brick Group announced the closing of the
refinancing of its $100 million revolving credit facility for a 3 year term,
with its existing syndicate of lenders. The terms of the credit agreement,
including financial covenants, remain substantially unchanged, and the pricing
of the credit facilities did not materially increase. The new credit agreement
also provides for an additional $25 million in financing, subject to certain
conditions being met. With the long term financing put into place in March
2007, combined with the renewal of the $100 million revolving credit facility,
management believes it is well positioned from both a capital and cash
liquidity perspective to drive its strategic initiatives.

    Consolidated and Franchise Sales and Operating Revenue
    ------------------------------------------------------
    Second quarter consolidated and franchise sales and operating revenue was
$383.9 million, including $30.7 million of franchise sales, compared to
$361.0 million, including $25.1 million of franchise sales, in the same
quarter last year, representing an increase of 6.3%. Same store sales growth
for corporate stores together with franchise stores was 2.0% compared to 4.4%
for the second quarter in 2007.
    Compared to the same quarter a year ago, sales at our franchise stores
increased by 22.1%, to $30.7 million.
    We began the quarter with 32 franchise stores and ended with 33, while in
2007, we began the quarter with 26 and ended with 29 franchise stores.

    Webcast
    -------
    The Brick Group will host an investor conference call at 11:00 a.m.
eastern time (9:00 a.m. Alberta time) on Friday, August 8, 2008. To access the
call, please call either (416) 915-5765 or (866) 250-4910 five minutes prior.
For a listen-only version of the conference, log on to
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2349380

    
    Replay Audience Dial-in Number & Codes:

    From: Friday, August 8, 2008, 1:00 p.m. (MT)
    To: Friday, August 15, 2008, 11:59 P.M. (MT)
    Access Number: 416-640-1917 Passcode 21278703 followed by the pound sign
    Access Number: 877-289-8525 Passcode 21278703 followed by the pound sign
    

    Notice to Readers

    Certain forward-looking statements are made in this news release, within
the meaning of applicable securities laws. These statements reflect the Brick
Group's current expectations and are based on information currently available
to management. The words "may", "will", "should", "believe", "expect, "plan",
"anticipate", "intend", "estimate", "predict", "potential", "continue", or the
negative of these terms, identify forward-looking matters. These statements
speak only as of the date of this press release. The actual results could
differ materially from those anticipated in these forward-looking statements.
    Reliance should not be placed on forward-looking statements because they
involve known and unknown risks, uncertainties and other factors, which may
cause the actual results, performance or achievements of the Brick Group to
differ materially from anticipated future results, performance or achievement
expressed or implied by such forward-looking statements. Factors that could
cause actual results to differ materially from those set forth in the
forward-looking statements include, but are not limited to, the
non-satisfaction of any conditions precedent to the completion of the offering
of Notes, fluctuations in interest rates and currency values, legislative and
regulatory developments, legal developments, the occurrence of weather-related
and other natural catastrophes, changes in tax laws, and those risks and
uncertainties detailed in the section entitled "Risk Factors" in the Brick
Group's Management's Discussion and Analysis. The preceding list is not an
exhaustive list of possible factors. These and other factors should be
considered carefully and readers are cautioned not to place undue reliance on
these forward-looking statements. The Brick Group undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise, other than as required by
applicable law.





For further information:

For further information: Kim Yost, President and CEO, The Brick Group,
(780) 930-6300, investor@thebrickgroup.ca

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