In difficult market conditions BMTC Group Inc. was able to maintain it's revenues for its year ended December 31st, 2014
MONTREAL, Feb. 12, 2015 /CNW Telbec/ - For the fiscal year ended December 31, 2014, the Company's revenue (delivered sales) increased by $6,613,000 to $701,356,000, from the $694,743,000 recorded in the 2013 year. Same store revenues (delivered sales) decreased by 1.8% for the same period. Although, during the fiscal year ended December 31, 2014, client orders increased by $14,400,000 to $722,352,000 from the $707,952,000 recorded in 2013. This increase occurred during the last quarter of 2014 and was not entirely reflected in the Company's revenues for the fiscal year ended December 31, 2014. Same store client orders remained comparable to the fiscal year ended December 31, 2013. Net income for the fiscal year ended December 31, 2014, stood at $48,647,000 compared with $57,254,000 for the previous fiscal year. Basic earnings per share decreased from $1.24 in 2013 to $1.08 in 2014.
The 0.70% decrease of gross margin for the fiscal year ended December 31, 2014, is primarily due to the sale of products with lower margins as well as the effect of foreign currency exchange rates on cost of sales.
Recognition of the cost of options in earnings had a minimal impact on basic net earnings per share in 2014 and 2013. The share repurchase program contributed to a decrease of $0.02 to basic earnings per share during the year.
During the fourth quarter of 2013, the Company re-evaluated the amortized cost of their Asset-backed commercial paper (MAV). The Company concluded that the market for MAV showed signs of a liquid market with indications of bids and offers varying between approximately 80% and 90% depending on the class of the papers. Based on this information, the Company recorded an impairment reversal of $5,400,000 before taxes ($4,674,000 net of taxes) or $0.10 basic earnings per share.
Excluding these effects, the variation of net earnings would have decreased by $3,583,000 or $0.08 basic earnings per share.
The $3,583,000 variation in net adjusted earnings in 2014 breaks down as follows:
|
(in thousands of $) | |||
|
2014 |
2013 | ||
|
Net earnings |
48 647 |
57 254 | |
|
Impairment reversal MAV (net of taxes) |
- |
(4 674) | |
|
Change in option costs (net of taxes) |
151 |
(199) | |
|
Adjusted net earnings |
48 798 |
52 381 | |
|
Minus: Adjusted net earnings for the 2013 period |
52 381 |
||
|
Variation |
(3 583) |
||
This decrease in adjusted and after-tax operating income is allocated as follows:
|
(in thousands of $) | ||||
|
Increase |
Increase |
Increase | ||
|
1st quarter 2014 |
(2 031) |
(401) |
(2 432) | |
|
2nd quarter 2014 |
(1 447) |
1 861 |
414 | |
|
3rd quarter 2014 |
2 133 |
401 |
2 534 | |
|
4th quarter 2014 |
(3 924) |
(175) |
(4 099) | |
|
Total: |
(5 269) |
1 686 |
(3 583) | |
The decrease in retail operations of $7,208,000 before tax or $5,269,000 after tax can be explained by the decrease of gross margins and by the increase of certain expenses.
|
(in thousands $) | |
|
2014 | |
|
Decrease in gross margin |
2 301 |
|
Building maintenance |
700 |
|
Amortization |
1 407 |
|
Pension funds |
1 257 |
|
Marketing expenses |
1 400 |
|
Administrative expenses |
143 |
|
Total : |
7 208 |
|
Quarterly Results (unaudited) | |||||||||
|
March 31 |
June 30 |
Sept. 30 |
Dec. 31 | ||||||
|
2014 |
2013 |
2014 |
2013 |
2014 |
2013 |
2014 |
2013 | ||
|
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ | ||
|
Revenue |
145 118 |
151 849 |
182 881 |
181 411 |
190 207 |
187 315 |
183 150 |
174 168 | |
|
Net earnings |
(1 468) |
1 215 |
14 020 |
13 574 |
18 271 |
15 840 |
17 824 |
26 625 | |
|
Net earnings per share |
|||||||||
|
Basic |
(0,03) |
0,03 |
0,31 |
0,29 |
0,40 |
0,34 |
0,40 |
0,58 | |
|
Diluted |
(0,03) |
0,03 |
0,31 |
0,29 |
0,40 |
0,34 |
0,40 |
0,58 | |
For the three-month period ended December 31, 2014, revenue totaled $183,150,000, an increase of $8,982,000 from $174,168,000 for the corresponding period in 2013. For the three-month period ended December 31, 2014, net earnings amounted to $17,824,000, or $0.40 basic earnings per share, compared with $26,625,000, or $0.58 basic earnings per share for the corresponding period in 2013.
For the three-month period ended December 31, 2014 and 2013 recognition in earnings of the change in the cost of options had a minimal effect on earnings per basic share.
During the fourth quarter of 2013, the Company re-evaluated the amortized cost of their Asset-backed commercial paper (MAV). The Company concluded that the market for MAV showed signs of a liquid market with indications of bids and offers varying between approximately 80% and 90% depending on the class of the papers. Based on this information, the Company recorded an impairment reversal of $5,400,000 before taxes ($4,674,000 net of taxes) or $0.10 basic earnings per share.
The share redemption program during the quarter resulted in a $0.01 decrease in basic earnings per share.
Excluding these effects, the variation in net earnings would have been $4,099,000 or $0.09 basic earnings share which breaks down as follows:
|
(in thousands of $) | |||
|
2014 |
2013 | ||
|
Net earnings |
17 824 |
26 625 | |
|
Impairment reversal MAV (net of taxes) |
- |
(4 674) | |
|
Change in option costs (net of taxes) |
4 |
(24) | |
|
Adjusted net earnings |
17 828 |
21 927 | |
|
Minus: Adjusted net earnings for the 2013 period |
21 927 |
||
|
Variation |
(4 099) |
||
During the twelve-month period ended December 31, 2014, no options were exercised or granted. As at December 31, 2014, options for 251,850 Class "A" Subordinate Shares were outstanding, representing 0.58% of the Company's issued and outstanding shares, and 5,710,864 options, representing 13.21% of the Company's issued and outstanding shares, may still be granted pursuant to the Plan. The outstanding options may be exercised at a price of $17.85 per Class "A" Subordinate Shares.
The number of the Company's outstanding shares changed again during the 12-month period ended December 31, 2014, due to the share redemption program implemented on March 13th, 2014 and the conversion of Class "B" Multiple Voting Shares. Accordingly, 306,300 Class "A" Subordinate Shares were redeemed by the Company and cancelled, whereas 62,484 Class "B" Multiple Voting Shares were converted into the same number of Class "A" Subordinate Shares. As a result of these changes, as at December 31, 2014, there were 1,748,796 Class "B" Multiple Voting Shares and 43,212,904 Class "A" Subordinate Shares outstanding.
During the fiscal year, the Company paid eligible dividends of $0.24 per share to holders of Class "A" Subordinate Shares and Class "B" Multiple Voting Shares.
Operations
During 2014, the Company proceeded with a complete upgrade of all of its websites and plans to implement a distinct e-commerce platform for all of its banners. This upgrade commenced in 2014 and will continue throughout 2015. The Company has already established its e-commerce strategy as well as its web tactics with the help of external advisors and specialists. During the third quarter of 2014, the Company signed a contract and proceeded with the purchase of an e-commerce platform. The implementation of which has also started during this period. The Company has also reviewed its IT systems in order to standardise them throughout the banners, as well as to allow them to be more aligned with our e-commerce strategies. Following this evaluation, the Company has decided to invest in a new IT system for all of its banners. The integration and implementation has also begun and will continue over the next 18 months.
Brault & Martineau
During 2014, the Company proceeded with replacing all the existing signs on our stores for a total cost of approximately $3,500,000. Also, the Company is also presently evaluating the remodeling of all of its furniture and electronic departments. The strategy behind this remodeling is to offer our clients a unique experience in our store that will help allow us to differentiate ourselves from electronic commerce.
EconoMax
During the 2014 fiscal year, the Company proceeded with the opening of 2 stores, in LaSalle and in Joliette. The costs of these stores were incurred during the 2014 fiscal year. In April 2015 the Company intends to open a new store in Granby. The Company has purchased land in Drummondville, where the construction of the store will begin in the first quarter of 2015 for an eventual store opening in 2015. Following the opening in Drummondville, the banner will have 11 stores in the province of Quebec.
Tanguay
The Company proceeded with the purchase of a 200,000 square foot parcel of land in Trois-Rivières, the construction of the store has not yet been established. Finally, the Company closed, following the end of its lease, its electronic store in Place Laurier in Quebec City.
Management Discussion and Outlook for the Future of the Company
The Quebec economy remained under pressure throughout the year. During 2014, more than 100,000 jobs were lost in the province of Quebec alone. Also, the real-estate sector has experienced an important slowdown. This weakness in our economy translates to a significant decrease in consumer spending in our business sector. Even in these difficult market conditions, the Company was able to maintain its revenues in 2014 primarily due to effective leadership by management, a solid market and financial position and its aggressive marketing campaigns.
During the last quarter of 2014 the Company saw its revenues increase substantially compared with the corresponding period of 2013. Management believes that this trend in revenue growth will remain in 2015 due to the considerable decrease in gas prices and the additionnal decrease in interest rates. This should improve considerably consumer spending in 2015.
|
BMTC Group Inc. |
|
2014 |
2013 | |||||
|
$ |
$ | |||||
|
Revenue |
701 356 |
694 743 | ||||
|
Cost of sales |
(423 298) |
(414 404) | ||||
|
Gross profit |
278 058 |
280 339 | ||||
|
Other income |
631 |
679 | ||||
|
Selling expenses |
(185 992) |
(183 397) | ||||
|
Administrative expenses |
(36 333) |
(35 167) | ||||
|
Operating profit |
56 364 |
62 454 | ||||
|
Realized and unrealized change in fair value of financial assets, held at fair value |
6 526 |
5 575 | ||||
|
Investment income |
2 142 |
7 483 | ||||
|
Earnings before income tax expense |
65 032 |
75 512 | ||||
|
Income tax (recovery) expense |
(16 385) |
(18 258) | ||||
|
Net earnings |
48 647 |
57 254 | ||||
|
Other comprehensive income |
||||||
|
Items that will not be reclassified to earnings |
||||||
|
Re-measurements of defined benefit pension plans |
33 184 |
(28 037) | ||||
|
Income tax (recovery) expense relating to items that will |
(8 927) |
7 541 | ||||
|
Other comprehensive income, net of tax |
24 257 |
(20 496) | ||||
|
Total comprehensive income |
72 904 |
36 758 | ||||
|
Net earnings per share |
||||||
|
Basic |
1,08 |
1,24 | ||||
|
Diluted |
1,08 |
1,24 | ||||
|
BMTC Group Inc. | |||||||
|
Capital stock |
Retained earnings |
Total equity | |||||
|
$ |
$ |
$ | |||||
|
Balance as at January 1, 2014 |
3 579 |
194 303 |
197 882 | ||||
|
Share redemption |
(27) |
- |
(27) | ||||
|
Share redemption premium |
- |
(4 526) |
(4 526) | ||||
|
Dividends |
- |
(10 807) |
(10 807) | ||||
|
Transactions with owners |
(27) |
(15 333) |
(15 360) | ||||
|
Net earnings |
- |
48 647 |
48 647 | ||||
|
Other comprehensive income |
- |
24 257 |
24 257 | ||||
|
Comprehensive income |
- |
72 904 |
72 904 | ||||
|
Balance as at December 31, 2014 |
3 552 |
251 874 |
255 426 | ||||
|
Balance as at January 1, 2013 |
3 730 |
194 089 |
197 819 | ||||
|
Share redemption |
(151) |
- |
(151) | ||||
|
Share redemption premium |
- |
(25 609) |
(25 609) | ||||
|
Dividends |
- |
(10 935) |
(10 935) | ||||
|
Transactions with owners |
(151) |
(36 544) |
(36 695) | ||||
|
Net earnings |
- |
57 254 |
57 254 | ||||
|
Other comprehensive income (loss) |
- |
(20 496) |
(20 496) | ||||
|
Comprehensive income |
- |
36 758 |
36 758 | ||||
|
Balance as at December 31, 2013 |
3 579 |
194 303 |
197 882 | ||||
|
BMTC Group Inc. | |||||
|
2014 |
2013 | ||||
|
$ |
$ | ||||
|
OPERATING ACTIVITIES |
|||||
|
Earnings before income tax expense |
65 032 |
75 512 | |||
|
Adjustments |
(4 164) |
(12 720) | |||
|
Net changes in working capital |
12 499 |
3 485 | |||
|
Taxes paid |
(14 661) |
(17 845) | |||
|
Cash flow from operating activities |
58 706 |
48 432 | |||
|
INVESTING ACTIVITIES |
|||||
|
Acquisition of other financial assets |
(59 120) |
(25 320) | |||
|
Proceeds from disposal of other financial assets |
39 638 |
23 568 | |||
|
Purchase of property, plant and equipment |
(9 665) |
(7 992) | |||
|
Proceeds from disposal of property, plant and equipment |
90 |
137 | |||
|
Interest received |
484 |
417 | |||
|
Dividends received |
1 617 |
1 624 | |||
|
Cash flow from investing activities |
(26 956) |
(7 566) | |||
|
FINANCING ACTIVITIES |
|||||
|
Payments for share redemption |
(4 553) |
(25 760) | |||
|
Dividends paid |
(10 807) |
(10 935) | |||
|
Cash flow from financing activities |
(15 360) |
(36 695) | |||
|
Net change in cash |
16 390 |
4 171 | |||
|
Cash, beginning of year |
17 105 |
12 934 | |||
|
Cash, end of year |
33 495 |
17 105 | |||
|
BMTC Group Inc. | |||||||
|
2014 |
2013 | ||||||
|
$ |
$ | ||||||
|
ASSETS |
|||||||
|
Current |
|||||||
|
Cash |
33 495 |
17 105 | |||||
|
Trade and other receivables |
3 599 |
4 632 | |||||
|
Current tax assets |
165 |
639 | |||||
|
Inventory |
82 722 |
75 544 | |||||
|
Prepaid expenses |
1 171 |
940 | |||||
|
Current assets |
121 152 |
98 860 | |||||
|
Non-current |
|||||||
|
Other financial assets |
124 170 |
98 058 | |||||
|
Property, plant and equipment |
103 989 |
101 715 | |||||
|
Defined benefit plan |
13 039 |
- | |||||
|
Deferred tax assets |
- |
7 663 | |||||
|
Total assets |
362 350 |
306 296 | |||||
|
LIABILITIES |
|||||||
|
Current |
|||||||
|
Trade and other payables |
103 454 |
84 579 | |||||
|
Share-based compensation liability |
725 |
519 | |||||
|
Current liabilities |
104 179 |
85 098 | |||||
|
Non-current |
|||||||
|
Defined benefit plan |
- |
22 931 | |||||
|
Lease incentive |
231 |
385 | |||||
|
Differed tax liabilities |
2 514 |
- | |||||
|
Total liabilities |
106 924 |
108 414 | |||||
|
SHAREHOLDERS' EQUITY |
|||||||
|
Capital stock |
3 552 |
3 579 | |||||
|
Retained earnings |
251 874 |
194 303 | |||||
|
Total shareholders' equity |
255 426 |
197 882 | |||||
|
Total liabilities and shareholders' equity |
362 350 |
306 296 | |||||
Caution regarding forward-looking statements
This Annual Management Report 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 negative 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 2014 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 to which 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 Annual Management Report. 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 Annual Management Report, 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 includs or excluds certain amounts that are not considered representative of performance measures and financial recurrence of the Company. Management believes that this measure is useful in understanding and analysing the operational performance of the Company.
The Company discloses in this MD&A under the section "Results" a reconciliation between net earnings and adjusted net earnings.
Adjusted net earnings are not an earnings measure recognised by IFRS and does not have a standardised meaning prescribed by IFRS. Therefore, adjusted net earnings as discussed in this MD&A may not be compared to similar measures presented by other issuers. This measure of performance should not be considered as an alternative as an indicator of performance, but rather as additional information.
Same store revenues are not an earnings measure recognised by IFRS and does not have a standardised meaning prescribed by IFRS. Therefore, same store sales as discussed in this MD&A may not be compared to similar measures presented by other issuers.
BMTC Group Inc.'s Class A Subordinate Voting Shares are listed on the Toronto Stock Exchange and through its subsidiaries, ABTM Group Inc. and Ameublements Tanguay Inc., is a major retailer of furniture, electronic goods and household appliances operating in the province of Quebec.
SOURCE BMTC Group Inc.
Mr. Yves Des Groseillers, Chairman, President and Chief Executive Officer, BMTC Group inc., (514) 648-5757
Share this article