Sportscene Group Announces - Net Earnings of $1.2 Million or $0.30 Per Share for the First-Quarter

A series of initiatives will be implemented to restore La Cage aux Sports' growth

MONTREAL, Jan. 13 /CNW Telbec/ - During the Annual Shareholders' Meeting held this morning at the Bell Centre LA CAGE AUX SPORTS in Montreal, management of SPORTSCENE GROUP INC. ("Sportscene" or "the Company" SPS.A/TSX Venture Exchange) disclosed the Company's financial results for the first quarter of fiscal 2011 and discussed the action plan implemented since October 2010 to restore La Cage aux Sports' sales growth after two years of adverse economic conditions for the Quebec restaurant industry.

Financial Performance

Operating results for the 13-week period ended November 28, 2010 reflect the still uncertain business context for the restaurant industry in Québec. La Cage aux Sports' total network sales posted a 3.7% decline to stand at $27.5 million, due to a decrease in customer traffic during September and increased competition in terms of selling prices. However, the marketing initiatives taken in October and November, combined with the opening of the chain's 50th Cage on October 22, 2010, contributed to reverse the trend in the last two months of the quarter. For their part, Sportscene Group's revenues grew by 2.7% to $21.7 million, driven primarily by a sale growth of La Cage aux Sports frozen products in grocery stores, and by the contribution of the new corporate Cage for the last five weeks of the period. Sportscene posted operating earnings or EBITDA(1) of $2.8 million, compared with $3.3 million the previous year, largely due to the fact that two boxing championships were organized in the first quarter of fiscal 2010, as opposed to only one event this year. The Company's profitability was affected by certain other factors, including the decrease in average same-Cage sales, the costs associated with the opening of the latest Cage, downward pressures exerted on selling prices and a different revenue mix from the previous year. For the same reasons, the first-quarter net earnings amounted to $1.2 million or $0.30 per share (basic and diluted), compared with $1.5 million or $0.36 per share (basic and diluted) in the same quarter last year.

2011 Outlook

"We set as a top priority for fiscal 2010-2011 to restore La Cage aux Sports banner's sales growth, through both organic growth and the network's expansion," indicated Jean Bédard, President and Chief Executive Officer of Sportscene Group. From that perspective, as of October 2010, Sportscene implemented an action plan featuring a series of targeted initiatives aimed at fostering the growth in same-Cage sales. For instance, the Company drew up more aggressive and competitive "products / events / promotions" programs in response to consumers' new reality and increased competition resulting from the current economic context. It also undertook to update the "menu" component of the La Cage aux Sports concept by modifying its food and beverage offering in order to meet the specific tastes and needs of the new generation of consumers who account for a growing share of its customer base, while also forging new value-added alliances, notably in the boxing field. In regard to expansion, last October, Sportscene inaugurated its 50th Cage in East Montreal, a large-scale outlet where everything is designed to offer customers an unrivalled experience.

"We expect that Sportscene Group will begin to reap the benefits of its organic sales growth and network expansion strategy primarily as of the second half of the fiscal year. In this regard, not only will we benefit from the full contribution of the Cage inaugurated last October, but two other Cages will open in upcoming quarters, while our Old Montreal Cage, which has been inoperative since June 2010, will reopen. We also continue to develop alternative concepts in order to create further sources of revenues and profits and to increase the visibility of our brand," added Jean Bédard.

Finally, banking on its excellent balance sheet — which included short-term available cash of $9.7 million and practically no total net debt as at November 28, 2010 —, Sportscene Group remains on the lookout for business opportunities consistent with its vision and business model, which would create additional sources of growth and shareholder value.

Payment of a Dividend of $0.30 Per Share

Sportscene Group's Board of Directors today declared a dividend of $0.30 per share on Class A voting shares, which will be paid on February 17, 2011 to shareholders of record as at January 28, 2011. In keeping with previous years, the Board will decide during the year regarding the payment of a second dividend in August 2011.


In business since 1984, Sportscene Group Inc. operates Quebec's leading chain of sports-themed resto-bars: La Cage aux Sports. As at January 13, 2011, this banner comprises 50 "Cages", 35 of which are wholly or jointly owned by the Company, and 15 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 organization of a host of contests and special events for customers. In addition, the Company manages real estate holdings, including a sports centre 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 Sports network, as well as the organization of sports-related activities including international-calibre boxing events.

(1)    EBITDA is not a measure consistent with Canadian generally accepted accounting principles. In Sportscene's statement of earnings, EBITDA corresponds to "Earnings before other items".
(2)    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.

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 28, November 29,
  2010 2009
  $  $
Revenues  21,654 21,093
Cost of sales, selling, general and administrative expenses  18,813 17,810
Earnings before other items  2,841 3,283
Interest on long-term debt  82  91
Other interest expense  52  42
Amortization of capital assets  906  881
Amortization of intangibles and other assets  30 80
Loss on disposal of assets  27 73
Loss on business disposals  26 -
  1,123 1,167
Earnings before income taxes and non-controlling interest  1,718 2,116
Income taxes  508  611
Earnings before non-controlling interest  1,210 1,505
Non-controlling interest  (34) (18)
Net earnings and comprehensive income  1,244 1,523
Earnings per share:
  Basic  $0.30 $0.36
  Diluted  $0.30  $0.36
Weighted average number of Class A shares outstanding (in thousands):
  Basic  4,168 4,180
  Diluted   4,172 4,181

Consolidated statements of variations in shareholders' equity

(amounts are expressed in thousands of dollars)
  13 weeks ended
  November 28,  November 29,
  2010 2009
  $ $
Share capital, beginning of period  3,554  3,555
Retraction of notes receivable  -  2
Share capital, end of period  3,554  3,557
Contributed surplus, beginning of period  199 180
Stock-based compensation  5 6
Contributed surplus, end of period  204 186
Retained earnings, beginning of period  24,623  22,989
Net earnings  1,244 1,523
Retained earnings, end of period  25,867 24,512

Consolidated balance sheets

 (amounts are expressed in thousands of dollars)
  As at November 28,  As at August 29,
  2010 2010
  (unaudited) (audited)
  $ $
Current assets:
  Cash and cash equivalents  7,716  7,586
  Restricted cash  -  141
  Temporary investments    2,000  2,000
  Accounts receivable  5,748  3,536
  Inventories  1,145  1,291
  Income taxes receivable  -  28
  Prepaid expenses  461  446
  Current portion of notes receivable  33  75
Total current assets   17,103  15,103
Notes receivable  1,094  989
Capital assets  29,829  28,773
Intangibles and other assets  591  437
Future income taxes  1,170  1,057
Goodwill   2,217  2,332
Total assets  52,004  48,691
Liabilities and shareholders' equity
Current liabilities:
  Accounts payable and accrued liabilities  8,714  6,651
  Income taxes payable  87  -
  Future income taxes  91  91
  Deferred income and credits  1,339  1,298
  Current portion of long-term debt  1,444  1,471
Total current liabilities  11,675  9,511
Long-term debt  8,343  8,580
Deferred income and credits  1,609  1,423
Future income taxes  515  515
Non-controlling interest  237  286
Total liabilities  22,379  20,315
Shareholders' equity
Share capital  3,554  3,554
Contributed surplus  204  199
Retained earnings  25,867  24,623
  29,625  28,376
Total liabilities and shareholders' equity  52,004  48,691

Consolidated statements of cash flows

(amounts are expressed in thousands of dollars)
  13 weeks ended
  November 28, November 29,
  2010 2009
  $ $
Cash flows from operating activities:
  Net earnings  1,244 1,523
  Non-cash items:
    Loss on business disposals  26 -
    Loss on disposal of assets  27 73
    Amortization of capital assets  906 881
    Amortization of intangibles and other assets  30 80
    Non-controlling interest  (34) (18)
    Stock-based compensation  5 6
    Future income taxes  (112) 58
  2,092  2,603
  Net change in non-cash operating items, net of acquisitions and
business disposals
 (877) (712)
  1,215 1,891
Cash flows from financing activities:
  Proceeds from the issuance of long-term debt   150  -
  Repayment of long-term debt  (372)  (464)
  Increase in deferred financing costs  -  (2)
  Dividends paid to non-controlling interest  -  (30)
  (222) (496)
Cash flows from investing activities:
  Acquisition of businesses, net of cash and cash equivalents acquired  (100) (208)
  Proceeds from business disposals, net of disposal of cash and cash equivalents  345 3
  Change in restricted cash  -  65
  Change in temporary investments  -  (2,000)
  Change in notes receivable  (96) (55)
  Acquisition of capital assets  (959) (167)
  Proceeds from disposal of capital assets  5  2
  Increase in intangibles and other assets  (58) -
  (863)  (2,360)
Increase (decrease) in cash and cash equivalents  130 (965)
Cash and cash equivalents, beginning of period  7,586 8,451
Cash and cash equivalents, end of period  7,716 7,486


For further information:

Source:  Sportscene Group Inc.
Contact:  Jean Bédard, Chairman of the Board, President and Chief Executive Officer

Josée Pépin, Manager, Accounting and Disclosure

Profil de l'entreprise


Renseignements sur cet organisme


Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .


Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.


Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.