Sportscene Group Maintains its Performance Despite the Economic Uncertainty



    
    - Net earnings of $1.5 million or $0.35 per share, up more than 16%
      excluding the non-recurring gain recorded in the same quarter of last
      year;
    - Corporate revenues of $22.9 million, up 18.3% over last year;
    - Declaration of a dividend of $0.30 per share.
    

    MONTREAL, Jan. 9 /CNW Telbec/ - At the annual shareholders' meeting held
this morning in Montreal, the management of SPORTSCENE GROUP INC.
("Sportscene" or "the Company"; SPS.A/TSX Venture Exchange), operator of the
LA CAGE AUX SPORTS resto-bar chain, announced results in line with its
expectations for the first quarter of fiscal 2009. For the 13-week period
ended November 30, 2008, the Company achieved net earnings comparable to those
for the same period last year, that is, $1.5 million or $0.35 per share (basic
and diluted), compared with $1.5 million and $0.36 per share ($0.35 diluted)
in 2007. It should be noted that the previous year's first-quarter results
included a $0.2 million gain on the sale of interests in Cages to partners.
Excluding this non-recurring gain, net earnings for the first quarter of the
current year would show a growth of more than 16% over last year.
    Sportscene's corporate revenues rose by 18.3% to $22.9 million. In
addition to a 7% increase in restaurant revenues, this performance is mainly
attributable to stronger activity in the Company's other business segments,
including the renovation of franchises and joint ventures, the organization of
a major boxing championship in October and the contribution of the new sports
complex. The same factors also contributed to increase operating income, or
consolidated EBITDA(1), by 12.6% and to reduce the pressure exerted on the
profit margin by the slowdown in the La Cage aux Sports network's organic
growth. The La Cage aux Sports' network sales slightly decreased, to stand at
$29.7 million this year compared with $30.1 million last year. In addition to
the economic uncertainty, this 1.6 % decline, which is mainly organic, is
primarily attributable to the renovation of three Cages that were closed
during various periods, one of which for most of the quarter, in order notably
to implement the updated interior concept launched in 2008.
    "Overall, Sportscene has done well since the beginning of the economic
slowdown, thanks to the considerable investments made in recent years to
expand and improve the La Cage aux Sports network, and to add complementary
activities compatible with our "Sports, gang, fun" concept," said Chairman and
Chief Executive Officer, Jean Bédard.

    Declaration of a dividend of $0.30 per share
    --------------------------------------------

    In light of the Company's satisfactory performance and outlook, this
morning, Sportscene's Board of Directors declared a dividend of $0.30 per
share on Class A voting shares, which will be paid on February 20, 2009 to
shareholders of record on January 23, 2009. In keeping with previous years,
the Board will reach a decision during the year regarding the payment of a
second dividend around August 2009.

    Main Objective for fiscal 2009: maximize the pay back on past investments
    -------------------------------------------------------------------------

    "After several years of strong development, and considering the current
economic uncertainty, we have set as our main objective to maximize the pay
back on our past investments," said Jean Bédard. "With this in mind, we have
undertaken a review of all our activities, practices and processes in order to
ensure that our efforts are strictly focused on initiatives that generate
tangible added value for our clients and shareholders." The President
explained that the recent restructuring of part of the organization fits into
this line of action, as it allows for a stronger focus on the growth and
strength of Sportscene's most valuable asset - La Cage aux Sports - while
promoting a more productive and targeted management of its other activities.
The Company also proceeded to eliminate from its operational and
administrative practices all elements that provide little added value in
relation to the efforts and investments they require. This undertaking applies
to every aspect of the organization: marketing, day to day Cage operation,
technological development, management of other activities and investments. In
upcoming months, Sportscene will also launch a major customer service
optimization program, where everything will be enhanced - dining rooms
ergonomics, service standards, manager coaching and employee training - so
that employees spend more time and are more proactive with customers.
    "While it is difficult at the current time to predict the extent and
length of the economic downturn affecting the global economy, and its specific
impact on our industry, we remain confident about the short- and medium-term
outlook of Sportscene and La Cage aux Sports. The sports environment is
favourable, our business segments and units are all solid and staffed with
competent resources, and the Company enjoys a sound financial position. For
the current year, in addition to the general reinforcement of our business
model, we will strive to maintain the traffic and sales of the La Cage aux
Sports network, protect our profit margins and manage our investments wisely.
To promote the achievement of these objectives, an important operation has
been launched throughout the network to inform and coach Cages franchisees and
other operators, which is already having beneficial effects on our
performance."

    La Cage aux Sports is 25 years young!
    -------------------------------------

    "This fall, La Cage aux Sports celebrated its 25th anniversary. We are
proud to see that our concept has withstood the test of time and is still as
young and actual as ever... because it has constantly been able to reinvent
itself in order to adapt to the generations that have filed successively
through its doors over the years. We are determined to project this success
into the future, which is why we have undertaken an in-depth analysis of the
tastes and aspirations of the new generation that will soon form the bulk of
our clientele and personnel," Jean Bédard concluded.

    Profile
    -------

    In business since 1984, Sportscene Group Inc. operates Quebec's leading
chain of sports-themed resto-bars: La Cage aux Sports. The chain comprises 48
"Cages", 33 of which are wholly or jointly owned by the Company, and 15 are
franchises. Enjoying a strong brand image, La Cage aux Sports serves some
seven million guests each year. 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 including the
broadcasting of sporting events on high-definition giant screens, and the
scheduling of a host of contests and special events for customers. In support
of its network expansion strategy and dynamic promotion of the La Cage aux
Sports trademark, Sportscene also provides on-site catering services at
sporting and popular events. In addition, the Company manages real estate
holdings, including a sports center and several buildings housing La Cage aux
Sports restaurants. Lastly, Sportscene has developed expertise in certain
other complementary activities, such as the construction, fitting-out and
renovation of Cages, technological development related to the expansion of the
La Cage aux Sport network, as well as the organization of sports-related
activities, such as international-calibre boxing events, and group trips to
sports destinations.

    
    (1) EBITDA is not a measure consistent with Canadian generally accepted
        accounting principles. Sportscene uses this measure because it
        enables management to assess the Company's operational performance
        and it is a widely accepted financial indicator of a company's
        ability to service and incur debt. In Sportscene's statement of
        earnings, EBITDA corresponds to "Earnings before other items".

    (2) TSX Venture Exchange does not accept responsibility for the adequacy
        or accuracy of this release. This news release contains forward-
        looking statements that reflect the current outlook of the Company
        regarding the future. Such statements are subject to certain risks,
        uncertainties and assumptions. Actual results and events may vary
        significantly.



    Consolidated statements of earnings and comprehensive income

    (amounts are expressed in thousands of dollars except for per-share
     amounts and number of shares)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                         13 weeks ended
                                                   November 30,  November 25,
                                                          2008          2007
    -------------------------------------------------------------------------
                                                    (unaudited)   (unaudited)
                                                             $             $

    Revenue                                             22,920        19,380
    Cost of sales, selling, general and
     administrative expenses                            19,669        16,493
    -------------------------------------------------------------------------
    Earnings before other items                          3,251         2,887
    -------------------------------------------------------------------------

    Interest on long-term debt                             131           114
    Other interest expense                                  48            42
    Amortization of capital assets                         840           761
    Amortization of intangibles and other assets           146           122
    Loss on disposal of assets                               4            17
    Gain on business disposals                               -          (246)
    -------------------------------------------------------------------------
                                                         1,169           810
    -------------------------------------------------------------------------
    Earnings before income taxes and
     non-controlling interest                            2,082         2,077
    Income taxes                                           617           587
    -------------------------------------------------------------------------
    Net earnings before non-controlling interest         1,465         1,490
    Non-controlling interest                               (15)            8
    -------------------------------------------------------------------------
    Net earnings and comprehensive income                1,480         1,482
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share :
      Basic                                              $0.35         $0.36
      Diluted                                            $0.35         $0.35

    Weighted average number of Class A
     shares outstanding (in thousands):
      Basic                                              4,191         4,171
      Diluted                                            4,191         4,197
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated statements of variations in shareholders' equity

    (amounts are expressed in thousands of dollars)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                         13 weeks ended
                                                   November 30,  November 25,
                                                          2008          2007
    -------------------------------------------------------------------------
                                                    (unaudited)   (unaudited)
                                                             $             $
    Share capital, beginning of period                   3,499         3,255
    Redemption of stock                                    (23)            -
    Retraction of notes receivable                           2             9
    -------------------------------------------------------------------------
    Share capital, end of period                         3,478         3,264
    -------------------------------------------------------------------------

    Contributed surplus, beginning of period               171           166
    Stock-based compensation                                 6             8
    Excess of the purchase price over the carrying
     amount of the Class A shares redeemed                  (1)            -
    -------------------------------------------------------------------------
    Contributed surplus, end of period                     176           174
    -------------------------------------------------------------------------

    Retained earnings, beginning of period              21,452        18,964
    Net earnings                                         1,480         1,482
    Excess of the purchase price over the carrying
     amount of the Class A shares redeemed                (329)            -
    -------------------------------------------------------------------------
    Retained earnings, end of period                    22,603        20,446
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated balance sheets

    (amounts are expressed in thousands of dollars)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                         As at         As at
                                                   November 30,    August 31,
                                                          2008          2008
    -------------------------------------------------------------------------
                                                    (unaudited)     (audited)
                                                             $             $
    Assets

    Current assets:
      Cash and cash equivalents                          4,395         6,867
      Restricted cash                                      217           260
      Temporary investment                                   -           100
      Accounts receivable                                5,247         5,169
      Inventories                                        2,397         1,766
      Prepaid expenses                                     925           679
      Current portion of notes receivable                   38            36
    -------------------------------------------------------------------------
      Total current assets                              13,219        14,877

    Notes receivable                                       969           959
    Capital assets                                      30,987        29,265
    Intangibles and other assets                         1,309         1,381
    Future income taxes                                    380           380
    Goodwill                                             2,604         2,363
    -------------------------------------------------------------------------
    Total assets                                        49,468        49,225
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and shareholders' equity

    Current liabilities:
      Accounts payable and accrued liabilities           7,060         9,337
      Income taxes payable                                 149            29
      Future income taxes                                  116           116
      Deferred revenues and credits                      2,266         1,307
      Current portion of long-term debt                  1,776         1,791
    -------------------------------------------------------------------------
      Total current liabilities                         11,367        12,580

    Long-term debt                                       9,795         9,510
    Deferred revenues and credits                          934           927
    Future income taxes                                    613           569
    Non-controlling interest                               502           517
    -------------------------------------------------------------------------
    Total liabilities                                   23,211        24,103

    Shareholders' equity:
      Share capital                                      3,478         3,499
      Contributed surplus                                  176           171
      Retained earnings                                 22,603        21,452
    -------------------------------------------------------------------------
                                                        26,257        25,122
    -------------------------------------------------------------------------
    Total liabilities and shareholders' equity          49,468        49,225
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated statements of cash flows

    (amounts are expressed in thousands of dollars)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                         13 weeks ended
                                                   November 30,  November 25,
                                                          2008          2007
    -------------------------------------------------------------------------
                                                    (unaudited)   (unaudited)
                                                             $             $

    Cash flows from operating activities:
      Net earnings                                       1,480         1,482
      Non-cash items:
        Gain on business disposals                           -          (246)
        Loss on disposal of assets                           4            17
        Amortization                                       986           883
        Non-controlling interest                           (15)            8
        Stock-based compensation                             6             8
        Future income taxes                                 19            62
    -------------------------------------------------------------------------
                                                         2,480         2,214
    Net change in non-cash balances related to
     operations, net of business acquisitions
     and disposals                                      (2,909)         (653)
    -------------------------------------------------------------------------
                                                          (429)        1,561
    -------------------------------------------------------------------------
    Cash flows from financing activities:
      Proceeds from issuance of long-term debt             740           120
      Repayment of long-term debt                         (892)         (381)
      Redemption of Class A shares                        (353)            -
      Proceeds from issuance of equity shares of a
       subsidiary to non-controlling interest                -           174
    -------------------------------------------------------------------------
                                                          (505)          (87)
    -------------------------------------------------------------------------
    Cash flow from investing activities:
      Acquisition of businesses, net of cash acquired     (538)            -
      Proceeds from business disposals, net of
       cash disposed                                         -           187
      Change in restricted cash                             43           128
      Disposal of temporary investments                    100            40
      Change in notes receivable                           (10)           18
      Additions to capital assets                       (1,059)       (1,727)
      Proceeds from disposal of capital assets               -            12
      Increase in intangibles and other assets             (74)         (154)
    -------------------------------------------------------------------------
                                                        (1,538)       (1,496)
    -------------------------------------------------------------------------
    Decrease in cash and cash equivalents               (2,472)          (22)
    Cash and cash equivalents, beginning of period       6,867         3,149
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of period             4,395         3,127
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

For further information: Jean Bédard, Chairman of the Board, President
and Chief Executive Officer; Gilles Lacombe, Vice-President, Finance and
Administration, (450) 641-3011; Source: Sportscene Group Inc.


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