Sportscene Carries On its Strategic Repositioning Plan

MONTREAL, July 16, 2015 /CNW Telbec/ - SPORTSCENE GROUP INC. ("Sportscene" or "the Company") (TSXV: SPS.A) today disclosed its financial results and main achievements for the third quarter and first nine months of fiscal 2015, being the 13 and 39 week periods ended May 31, 2015. The past few months were mostly dedicated to the implementation of the strategic plan aimed at repositioning the La Cage aux Sports network for a new growth cycle, beginning with an overall enhancement of its foodservices in order to better meet the evolving expectations of consumers.

Achievements and Results for the 13 and 39-Week Periods Ended May 31, 2015

During the third quarter, in particular, the Company continued to upgrade La Cage's menu and to adapt its procurement strategies and kitchen processes accordingly, while investing in staff training. Concurrently, the physical transformation of the La Cage aux Sports network is progressing, so that all units will showcase the new design within the next three to five years. 

For the 13-week period ended May 31, 2015, the Company recorded a 10.4% decline in La Cage aux Sports' total network sales (1) and achieved net earnings of $0.2 million or $0.05 per share, compared with net earnings of $1.4 million or $0.33 (basic) per share for the same quarter of 2014. Adjusted EBITDA (3) amounted to $1.4 million, compared with $2.7 million for the same quarter of the previous year, due to a decrease in same-Cage sales (2) combined with the costs related to the strategic shift. In addition, quarterly results were negatively impacted by external factors including a persistently harsh economic environment for the restaurant industry and a less exciting sporting context than in 2014.  

For the first nine months of fiscal 2015, total network sales (1) decreased by 7.1% to $80.8 million. However, the Company's revenues increased by 4.8% to $58.7 million, thanks mainly to activities other than the operation of the La Cage aux Sports network, namely the sale of branded products in grocery stores, the organization of sporting events and the renovation of Cages. Adjusted EBITDA (3) totalled $3.2 million, compared with $6.3 million for the same period of the previous year, due to the aforementioned factors. Sportscene therefore closed the period with a net loss of $0.2 million or $0.03 per share, compared with net earnings of $3.0 million or $0.72 per share for the previous year.

Sportscene benefits from a sound financial position, posting short-term available cash (4) of $7.6 million and a total net debt ratio (5) of 16.3% as at May 31, 2015.

Outlook

"We are in the process of achieving an in-depth change in our foodservices and in our corporate culture itself. Such an investment is made possible based on our belief that the initiatives under way will give Sportscene access to a new growth cycle. Based on the facts that we have brought together one of the best development and management teams in the industry and that Sportscene's financial position remains very healthy, we are on an excellent footing to successfully achieve our ambitious action plan. We estimate that its benefits will gradually materialize and ultimately allow the Company to resume its growth and create superior value for its shareholders," indicated Jean Bédard, President and Chief Executive Officer of Sportscene.

Profile

In business since 1984, Sportscene Group Inc. operates Quebec's leading chain of sports-themed resto-bars: La Cage aux Sports. This banner comprises 50 "Cages", 39 of which are wholly or jointly owned by the Company, and 11 are franchises. Enjoying a strong brand image, 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, and the hosting and organization of multiple contests and special events.

 

The following items are not performance measures consistent with IFRS: 

(1)

Total network sales correspondent to sales achieved by all of La Cage aux Sports' restaurants: franchisees, partnerships and corporate units.

(2)

Average same-Cage sales isolate the impact of restaurant openings and closures to assess the actual trend in restaurant sales.

(3)

In Sportscene's statement of comprehensive income, adjusted EBITDA corresponds to "Earnings before financial expenses, amortization, share of net earnings of joint ventures and associates and income taxes", from which gains and losses on the disposal of property, plant and equipment are excluded.

(4)

Short-term available cash includes cash and cash equivalents as well as investments, if any.

(5)

Total net debt consists of long-term debt including its current portion, net of short-term available cash.


For further information regarding the results and financial position of Sportscene Group Inc., refer to the interim management's report as well as the interim consolidated financial statements and accompanying notes for the 13 and 39-week periods ended May 31, 2015, available on SEDAR.


Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

                                                

Interim Condensed Consolidated Statements of Comprehensive Income

(in thousands of Canadian dollars, except for earnings per share and number of outstanding shares)*

(unaudited)


13 weeks ended

39 weeks ended


May 31,
2015

May 25,
2014

May 31,
2015

May 25,
2014


$

$

$

$






Revenues

21,705

20,366

58,727

56,015

Cost of sales

6,198

6,335

19,132

17,569

Selling and administrative expenses, excluding amortization

14,075

11,352

36,391

32,140

(Gain) loss on disposal of property, plant and equipment

12

26

(212)

39

Earnings before financial expenses, amortization, share of net loss (income) of joint ventures and associates and income tax

1,420

2,653

3,416

6,267






Amortization

979

977

2,945

2,820

Financial expenses

158

159

455

435

Share of net loss (income) of joint ventures and associates  

51

(321)

235

(873)

Income (loss) before income tax expenses  

232

1,838

(219)

3,885






Income tax expenses

38

454

(24)

864

Net income (loss) and comprehensive income (loss)  

194

1,384

(195)

3,021






Net income (loss) and comprehensive income (loss) attributable to:










The Company's shareholders

214

1,369

(122)

2,998

Non-controlling interests

(20)

15

(73)

23

Net income (loss) and comprehensive income (loss)   

194

1,384

(195)

3,021






Earnings (loss) per share (in $):  






Basic

0.05

0.33

(0.03)

0.72


Diluted

0.05

0.32

(0.03)

0.71






Weighted average number of outstanding






Class A shares (in thousands):






Basic

4,165

4,165

4,165

4,165


Diluted

4,220

4,231

4,165

4,231

 

SOURCE Sportscene Group Inc.

For further information: Jean Bédard, Chairman of the Board, President and Chief Executive Officer; François-Xavier Pilon, Interim Vice-President, Finance; 450-641-3011

RELATED LINKS
http://www.cage.ca

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890