BMTC GROUP INC. ANNOUNCES FINANCIAL RESULTS FOR THE NINE MONTH PERIOD ENDED OCTOBER 31st, 2023

MONTRÉAL, Dec. 11, 2023 /CNW/ -

Results

For the third quarter ended October 31, 2023, the Company's revenues decreased by $125,902,000 to $444,255,000 compared to $570,157,000 recorded for the period ended October 31, 2022, a 22.1% decrease. Net earnings for the third quarter ended October 31, 2023, amounted to $32,931,000 compared to $28,900,000 recorded for the period ended October 31, 2022. Basic net earnings per share amounted to $1.00 compared to $0.87 recorded for the third quarter ended October 31, 2022.

For the period ended October 31, 2023, the share repurchase program contributed to a decrease of $0.01 on basic net earnings per share. As for the corresponding period of 2022, the share repurchase program had no impact on basic net earnings per share.

During the period ended April 30, 2023, the Company proceeded with the sale of its Montreal distribution center for an amount of $66,500,000 resulting in an after-tax gain of $50,962,000 or $1.54 per basic share.

The variation in adjusted net results would be ($46,931,000) or ($1.42) per basic share for third quarter ended October 31, 2023, as well as the comparable period ended October 31, 2022, are explained as follows:

				(Unaudited and $ in thousands)
				October 31, 2023					October 31, 2022
Net earnings					32 931				28 900
Gain on disposal of fixed assets (after-tax)					(50 962)				-
Adjusted net earnings					(18 031)				28 900
Minus: Adjusted net earnings for 2021					28 900
Variation					(46 931)

The variations in net adjusted earnings are allocated as follows:

			(Unaudited and $ in thousands)
							Increase
			Increase		Increase		(decrease)
			(decrease)		(decrease)		in adjusted
			in retail operations		in investment		net earnings
As at April 30, 2023			(15 637)		1 885		(13 752)
As at July 31, 2023			(16 237)		5 354		(10 883)
As at October 31, 2023			(11 348)		(10 948)		(22 296)
Total			(43 222)		(3 709)		(46 931)

Annual financial information
($ in thousands, except for per share amounts)

				January 31, 2023		January 31, 2022
				$		$
Revenue				717 972		819 445
Net earnings				40 838		81 931
Total assets				581 964		549 926
Net earnings per share basic and diluted				1,23		2,43
Dividends per share				0,36		0,34

Financial position and dividends

Cash and investments, net of bank overdraft, increased by $50,477,000 during the third quarter ended October 31, 2023. Investments consist of treasuries bearing interest, government and corporate bonds, common  and preferred shares, which at the close of the quarter had a market value of $270,107,000 (including cash).

As at October 31, 2023, the working capital showed a surplus of $12,596,000, a decrease of $8,970,000 compared to the year ended January 31, 2023. The Company's shareholders' equity increased from $440,899,000 as at January 31, 2023, to $463,041,000 as at October 31, 2023. As at October 31, 2023, the book value per share stood at $14.15 compared to $13.34 as at January 31, 2023.

Pursuant to the normal course issuer-bid put in place on April 15, 2022, and renewed on April 15, 2023, accordingly, 324,350 common shares were repurchased and cancelled by the Company. As a result of this change, the Company had as at October 31, 2023, 32,716,050 common shares issued and outstanding.

During the period ended October 31, 2023, no options were granted. The Company may still grant pursuant to the Plan a total of 5,710,864 options, representing 17.39% of the issued and outstanding shares of the Company.

A semi-annual eligible dividend of $0.18 per Common Share has been declared to holders registered at the close of business on December 20, 2023, which will be paid on January 3, 2024.

Quarterly results *
(Unaudited and $ in thousands, except for per share amounts)

			April 30,		April 30,		July 31,		July 31,
			2023		2022		2023		2022
			$		$		$		$
Revenue			135 102		175 659		169 075		218 939
Net earnings			38 017		807		3 363		14 246
Net basic earnings per share			1,15		0,02		0,10		0,43
			October 31,		October 31,		January 31,		January 31,
			2023		2022		2023		2022
			$		$		$		$
Revenue			140 078		213 955		147 815		196 658
Net earnings			(8 449)		20 189		11 938		22 580
Net basic earnings per share			(0,25)		0,60		0,36		0,67

For the three month period ended October 31, 2023, the Company's revenues decreased by $35,481,000 to $140,078,000, compared to $175,559,000 recorded for the corresponding 2022 period, a 20.2% decrease.  Net earnings for the three month period ended October 31, 2023, amounted to ($8,449,000) compared to $13,847,000 recorded for the corresponding 2022 period. Basic net earnings per share decreased to ($0.25) compared to $0.42 for the corresponding 2022 period.

For the three month period ended October 31, 2023, the share repurchase program contributed to a decrease of $0.01 on basic net earnings per share. As for the corresponding period of 2022, the share repurchase program had no impact on basic net earnings per share.

The variation in adjusted net earnings would be ($22,296,000) or ($0.68) per basic share for the three month period ended October 31, 2023, as well as the comparable 2022 period, are explained as follows:

				(Unaudited and $ in thousands)
				October 31, 2023				October 31, 2022
Net earnings					(8 449)				13 847
Adjusted net earnings					(8 449)				13 847
Minus: Adjusted net earnings for 2021					13 847
Variation					(22 296)

Operations

BMTC Group Inc.

On May 16, 2023, the Company announced the deployment of its Tanguay division across Quebec, with management having identified Tanguay stores as those with the greatest potential for expansion. All Brault & Martineau stores and 3 EconoMax stores have been converted. Following these changes, the Tanguay banner now has 11 new stores in the western part of the province. In addition, the Liquida Meubles banner as well as 3 EconoMax were converted into Tanguay L'Entrepôt. In total, there are 5 Tanguay L'Entrepôt stores across the province to offer clearance furniture as well as new entry-level products. To ensure this deployment, the Company had to close five EconoMax stores, namely those in Kirkland, Sainte-Thérèse, Brossard, Ste-Eustache and LaSalle.

The Company has decided to make significant changes to transform its former Brault & Martineau and EconoMax stores into Tanguay store in order to provide a better product and service offering and a unique customer experience in its market. The renovations to our entire network are valued at $28,000,000. During the period ended October 31, 2023, $14,434,000 of these costs were incurred and the balance will be charged in subsequent periods of the fiscal year ending January 31, 2024.

This decision comes at an opportune time for the Company. The difficulty of obtaining qualified labour, the retail trade which is in constant transformation and evolution, the competition which is now extended across Canada and the United States and the shift towards e-commerce, therefore this decision will allow the Company to be much more agile in its business decisions. We believe that these IT, organizational, structural and commercial changes will enable the Company to exercise leadership in its market, significantly improve its profitability and financial structure and maintain its objectives of increasing its market share in Quebec.

The Company entered into a partnership agreement with Urbania for the development of its property at 500 boulevard Le Corbusier in Laval into several residential rental towers. The Company created a new subsidiary, Le Corbusier-Concorde S.E.C. for this real estate project on January 31st, 2022. This real estate project will begin in the summer of 2024 and will span for a period of 8 to 10 years with the construction of 5 rental residential towers for a total of approximately 1,200 doors.

On February 1, 2023, the Company concluded the sale of its distribution centre in Montreal for an amount of $66,500,000, resulting in an after-tax gain of $50,962,000, or $1.54 per basic share.  The Company will remain a tenant under a 2 year lease with renewal options.

The Company intends to proceed with the real estate development of several rental residential towers on its property located at 125 boul. Desjardins Est in Sainte-Thérèse. This real estate project is currently in the exploratory phase.

Management discussion and outlook for the Future of the Company

The Company continues to focus on online sales by actively pursuing the improvement of its Tanguay digital platform, its live chat initiative with online customers as well as the improvement of our telephone sales department.

It is also Management's opinion that the digital platform of our Tanguay banner is essential in order to allow the Company to increase its market shares as well as to allow customers to start their shopping experience online to then complete their purchases in one of our stores with the help of our sales representatives.

It is difficult to predict the future level of consumer spending, although we are now seeing that the Company's results in the last quarters are not reflecting the performance of the last two years. This downward trend continued in subsequent months. We can therefore expect a significant drop, if the trend continues. This is partly explained by the high rate of inflation in terms of the cost of food, the cost of gas and the rise in interest rates, which has a direct impact on consumer spending. Also, management is aware that the increase in the last two years was partly due to the fact that the Company benefited from a transfer of consumer spending related to the restrictions imposed by the various levels of government due to COVID-19 pandemic, more precisely the restrictions related to travel, the closure of restaurants and all other forms of entertainment in the cultural and sporting world. Since these restrictions are no longer in place, consumer spending has in part transfer back to these types of spending.

Caution regarding forward-looking statements

This press release contains certain forward-looking statements with respect to the Company. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate", expect", "intend", "may", "plan", "predict", "project", "will", "would", as well as the opposites of these terms and similar terminology, including references to assumptions.

Forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, which the Company has identified in the 2023 Annual Information Form under "Narrative Description of the Business - Risk Factors", and other risks detailed from time to time in the Company's continuous disclosure documents.

The reader is cautioned that the factors we refer above are not exhaustive of the factors that may affect any of the Company's forward-looking statements. The reader is also cautioned to consider these and other factors carefully and not to put undue reliance on forward-looking statements.

The Company made a number of assumptions in making forward-looking statements in this press release. The Company considers the assumptions on which these forward-looking statements are based to be reasonable.

These statements reflect current expectations regarding future events and operating performance and speak only as of the date of release of this press release and represent the Company's expectations as of that date. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.

Non International Financial Reporting Standards (IFRS) financial measures

The Company discloses adjusted net earnings, which includes or excludes certain amounts that are not considered representative of the performance measures and financial recurrence of the Company. Management believes that this measure is useful in understanding and analyzing the operational performance of the Company and that it can provide additional information.

Adjusted net earnings as well as same store revenues are not an earnings measure recognized by IFRS and do not have a standardized meanings prescribed by IFRS. Therefore, adjusted net earnings and same store revenues as discussed in this press release may not be compared to similar measures presented by other issuers. These measures of performance should not be considered as alternatives to indicators of performance calculated according to IFRS, but rather as a source of additional information.

The Company discloses in this press release under the section "Results" a reconciliation between net earnings and adjusted net earnings.

BMTC Group Inc. is a company governed the Business Companies Act (Quebec). Its registered office and principal place of business is located at 8500 Place Marien, Montreal East, Quebec, H1B 5W8. Its common shares are listed on the Toronto Stock Exchange. The structure of BMTC Group Inc. is now formed of the Tanguay division and its subsidiary Le Corbusier-Concorde S.E.C. (collectively designated as the "Company"), manages and operates a retail network of furniture, household appliances and electronic products, in Quebec.

SOURCE BMTC Group Inc.

Marie-Berthe Des Groseillers,President and Chief Executive Officer, Groupe BMTC Inc., [phone]