Indigo Reports Q1 Results - 7th consecutive quarter of revenue growth

Comp Superstore Sales grow by 5.3% and Online Sales grow by 18.2%

TORONTO, Aug. 4, 2015 /CNW/ - Indigo Books & Music Inc. (TSX: IDG), Canada's largest book, gift and specialty toy retailer reported 2.3% growth in revenue for its first quarter ended June 27, 2015.

Revenue for the quarter was $184.9 million, up $4.1 million from last year, despite operating two fewer superstores and five fewer small format stores.  On a comparable store basis, Indigo and Chapters superstores posted 5.3% growth, while Coles and IndigoSpirit small format stores decreased by 1.0%.  Sales from Indigo's online channel, indigo.ca, grew by 18.2%.

Revenue growth was driven by the continued double digit growth of the General Merchandise business. On a comparable store basis, we also experienced positive growth in the Print business.

Commenting on the results, CEO Heather Reisman said, "This is the 7th consecutive quarter of revenue growth and the 5th quarter of profitability improvement which confirms our strategy is taking us in the right direction.  We are excited by the initiatives we are currently working on which will continue to build our growth momentum."

The net loss for the 13-week period ended June 27, 2015 was $9.0 million (net loss per common share of $0.35), compared to a loss of $14.0 million (net loss per common share of $0.55) for the period ended June 28, 2014.  The improvement of $5.0 million was driven by improved revenue performance and proceeds from the disposal of a lease.    

The Indigo Love of Reading Foundation celebrated its 11th anniversary during the quarter and announced that it will once again donate $1.5 million to 20 high-needs elementary schools in an effort to bolster literacy and transform school libraries across the country.  To date, the Foundation has committed more than $19.5 million to over 2,000 elementary schools in Canada through its Literacy Fund grant and community Adopt a School program.

Analyst/Investor Call
Indigo will host a conference call for analysts and investors to review these results at 10:00 a.m. (ET) tomorrow, August 5th, 2015.  The call can be accessed by dialling 416-764-8688 from within the Toronto area, or 1-888-390-0546 outside of Toronto.  The eight digit participant code is 40547764. 

A playback of the call will also be available by telephone until 10:00 a.m. (ET) on August 12th, 2015.  The call playback can be accessed after 12:00 p.m. (ET) on August 5th, 2015, by dialing 416-764-8677 from within the Toronto area, or 1-888-390-0541 outside of Toronto. The six-digit replay passcode number is 547764#.  The conference call transcript will be archived in the Investor Relations section of the Indigo website, www.indigo.ca.

Forward-Looking Statements

Statements contained in this news release that are not historical facts are forward-looking statements which involve risk and uncertainties that could cause results to differ materially from those expressed in the forward-looking statements. Among the key factors that could cause such differences are: general economic, market or business conditions in Canada; competitive actions by other companies; changes in laws or regulations; and other factors, many of which are beyond the control of the Company.

Non-IFRS Financial Measures

The Company prepares its unaudited interim condensed consolidated financial statements in accordance with International Financial Reporting Standards and International Accounting Standards 34, "Interim Financial Reporting."  In order to provide additional insight into the business, the Company has also provided non-IFRS data, including comparative store sales growth, in the press release above. This measure does not have a standardized meaning prescribed by IFRS and is therefore specific to Indigo and may not be comparable to similar measures presented by other companies. Comparative store sales growth is a key indicator used by the Company to measure performance against internal targets and prior period results. This measure is commonly used by financial analysts and investors to compare Indigo to other retailers. Comparable store sales are defined as sales generated by stores that have been open for more than 12 months on a 52-week basis.

About Indigo Books & Music Inc.

Indigo is a publicly traded Canadian company listed on the Toronto Stock Exchange (IDG). As the largest book, gift and specialty toy retailer in Canada, Indigo operates in all provinces under different banners including Indigo Books & Music; Indigo Books, Gifts, Kids; Indigospirit; Chapters; and Coles. The online channel, indigo.ca, offers a one-stop online shop with a robust selection of books, toys, home décor, stationery, and gifts.

Indigo founded the Indigo Love of Reading Foundation in 2004 to address the underfunding of public elementary school libraries. Every year the Indigo Love of Reading Foundation grants $1.5 million to 20 high-needs elementary schools so they can transform their libraries with the purchase of new books and education resources. To date, the Indigo Love of Reading Foundation has committed over $19.5 million to over 2,000 schools through our signature programs.

To learn more about Indigo, please visit the Our Company section at indigo.ca.

Consolidated Balance Sheets

(Unaudited)








As at

As at

As at



June 27,

June 28,

March 28,

(thousands of Canadian dollars)


2015

2014

2015






ASSETS





Current





Cash and cash equivalents


176,711

150,667

203,162

Accounts receivable


13,370

8,802

4,896

Inventories


205,528

213,185

208,395

Income taxes recoverable


25

-

25

Prepaid expenses


5,627

6,182

5,477

Total current assets


401,261

378,836

421,955

Property, plant, and equipment


52,897

56,931

54,886

Intangible assets


15,536

20,723

16,587

Equity investment


219

79

726

Deferred tax assets


44,241

44,604

44,241

Total assets


514,154

501,173

538,395

LIABILITIES AND EQUITY





Current





Accounts payable and accrued liabilities


145,599

138,553

160,645

Unredeemed gift card liability


48,470

46,776

48,211

Provisions


745

911

913

Deferred revenue


13,560

13,002

13,298

Current portion of long-term debt


144

446

172

Total current liabilities


208,518

199,688

223,239

Long-term accrued liabilities


2,661

2,719

3,841

Long-term provisions


99

153

110

Long-term debt


33

177

56

Total liabilities


211,311

202,737

227,246

Equity





Share capital


206,118

204,204

205,871

Contributed surplus


10,170

9,198

9,770

Retained earnings


86,555

85,034

95,508

Total equity


302,843

298,436

311,149

Total liabilities and equity


514,154

501,173

538,395

Consolidated Statements of Loss and Comprehensive Loss

(Unaudited)





13-week

13-week


period ended

period ended


June 27,

June 28,

(thousands of Canadian dollars, except per share data)

2015

2014




Revenue

184,894

180,802

Cost of sales

(103,510)

(100,849)

Gross profit

81,384

79,953

Operating, selling, and administrative expenses

(90,219)

(93,810)

Operating loss

(8,835)

(13,857)

Interest on long-term debt and financing charges

(2)

(9)

Interest income on cash and cash equivalents

391

377

Share of loss from equity investment

(507)

(519)

Net loss and comprehensive loss for the period

(8,953)

(14,008)




Net loss per common share



Basic

$(0.35)

$(0.55)

Diluted

$(0.35)

$(0.55)

Consolidated Statements of Cash Flows

(Unaudited)



13-week

13-week


period ended

period ended


June 27,

June 28,

(thousands of Canadian dollars)

2015

2014




CASH FLOWS FROM OPERATING ACTIVITIES



Net loss for the period

(8,953)

(14,008)

Add (deduct) items not affecting cash




Depreciation of property, plant, and equipment

3,584

3,698


Amortization of intangible assets

2,454

2,868


Disposal of capital assets

659

7


Share-based compensation

332

335


Directors' compensation

111

104


Other

439

1,231

Net change in non-cash working capital balances

(21,641)

3,587

Interest on long-term debt and financing charges

2

9

Interest income on cash and cash equivalents

(391)

(377)

Share of loss from equity investment

507

519

Cash flows used in operating activities

(22,897)

(2,027)




CASH FLOWS FROM INVESTING ACTIVITIES



Purchase of property, plant, and equipment

(2,253)

(2,160)

Addition of intangible assets

(1,404)

(2,004)

Interest received

227

291

Cash flows used in investing activities

(3,430)

(3,873)




CASH FLOWS FROM FINANCING ACTIVITIES



Repayment of long-term debt

(51)

(186)

Interest paid

(17)

(10)

Proceeds from share issuances

204

331

Cash flows from financing activities

136

135




Effect of foreign currency exchange rate changes on cash and cash
equivalents

(260)

(1,146)




Net decrease in cash and cash equivalents during the period

(26,451)

(6,911)

Cash and cash equivalents, beginning of period

203,162

157,578

Cash and cash equivalents, end of period

176,711

150,667

SOURCE Indigo Books & Music Inc.

For further information: Janet Eger, Vice President, Public Affairs, 416 342 8561, jeger@indigo.ca

RELATED LINKS
http://www.indigo.ca

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