Indigo Reports Full Year Results, Strong Revenue Growth, Improved Profitability

Comparable Superstore Sales grow by 6.8% and Online Sales grow by 11.8%

TORONTO, May 26, 2015 /CNW/ - Indigo Books & Music Inc. (TSX: IDG), Canada's largest book, gift and specialty toy retailer reported revenue of $895.4 million for its fiscal year ended March 28, 2015. Total revenue increased by $27.7 million compared to the previous year despite operating eight fewer stores.

On a comparable store basis, Indigo and Chapters superstore revenue increased 6.8%, while Coles and Indigospirit small format store revenue increased 0.8%.  Sales from Indigo's online channel, indigo.ca, grew by 11.8%.

The core trade books business returned to growth despite having no major hit titles during the year. Additionally, Lifestyle, Paper and Toys experienced double-digit growth and the launch of American Girl during the year far exceeded expectations.

Commenting on the results, CEO Heather Reisman said, "We're pleased with our full year results which confirm we are moving out of transformation and into growth mode."

The Company reported a net loss for the year of $3.5 million compared to net loss of $31.0 million last year.  The improvement in earnings was driven by revenue growth and margin rate, lower operating expenses and lower tax expense.

Revenue for the fourth quarter was $186.2 million, up $1.9 million from the same quarter last year. Net loss for the quarter was $13.9 million compared to a net loss of $14.4 million last year. The improvement in earnings was a result of higher revenues, margin rate and lower operating expenses off-set by increased long-term incentive costs.

Analyst/Investor Call

Indigo will host a conference call for analysts and investors to review these results at 10 A.M. (Eastern Time) tomorrow, May 27, 2015.  The call can be accessed by dialling 416-764-8688 from within the Toronto area, or 1-888-390-0546 outside of Toronto. The eight digit participant code is 18223739. 

A playback of the call will also be available by telephone until 11:59 p.m. (ET) on Wednesday, June 3rd, 2015. The call playback can be accessed after 7:00 p.m. (ET) on Wednesday, May 27th, 2015, by dialing 416-764-8677 from within the Toronto area, or 1-888-390-0541 outside of Toronto.  The six-digit replay passcode number is 223739#.  The conference call transcript will be archived in the Investor Relations section of the Indigo website, www.indigo.ca.

Forward-Looking Statements

Statements contained in this news release that are not historical facts are forward-looking statements which involve risk and uncertainties that could cause results to differ materially from those expressed in the forward-looking statements. Among the key factors that could cause such differences are: general economic, market or business conditions in Canada; competitive actions by other companies; changes in laws or regulations; and other factors, many of which are beyond the control of the Company.

Non-IFRS Financial Measures

The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS"). In order to provide additional insight into the business, the Company has also provided non-IFRS data, including comparative store sales growth, in the press release above. This measure does not have a standardized meaning prescribed by IFRS and is therefore specific to Indigo and may not be comparable to similar measures presented by other companies. Comparative store sales growth is a key indicator used by the Company to measure performance against internal targets and prior period results. This measure is commonly used by financial analysts and investors to compare Indigo to other retailers. Comparable store sales are defined as sales generated by stores that have been open for more than 12 months on a 52-week basis.

About Indigo Books & Music Inc.

Indigo is a publicly traded Canadian company listed on the Toronto Stock Exchange (IDG). As the largest book, gift and specialty toy retailer in Canada, Indigo operates in all provinces under different banners including Indigo Books & Music; Indigo Books, Gifts, Kids; Indigospirit; Chapters; and Coles. The online channel, indigo.ca, offers a one-stop online shop with a robust selection of books, toys, home décor, stationery, and gifts.

Indigo founded the Indigo Love of Reading Foundation in 2004 to address the underfunding of public elementary school libraries. Every year the Indigo Love of Reading Foundation grants $1.5 million to 20 high-needs elementary schools so they can transform their libraries with the purchase of new books and education resources. To date, the Indigo Love of Reading Foundation has committed over $19.5 million to over 2000 schools through our signature programs.

To learn more about Indigo, please visit the Our Company section at indigo.ca.

Consolidated Balance Sheets
							As at			As at
							March 28,			March 29,
(thousands of Canadian dollars)							2015			2014
ASSETS
Current
Cash and cash equivalents							203,162			157,578
Accounts receivable							4,896			5,582
Inventories							208,395			218,979
Income taxes recoverable							25			-
Prepaid expenses							5,477			5,184
Total current assets							421,955			387,323
Property, plant and equipment							54,886			58,476
Intangible assets							16,587			21,587
Equity investment							726			598
Deferred tax assets							44,241			44,604
Total assets							538,395			512,588
LIABILITIES AND EQUITY
Current
Accounts payable and accrued liabilities							160,645			136,428
Unredeemed gift card liability							48,211			46,827
Provisions							913			928
Deferred revenue							13,298			12,860
Current portion of long-term debt							172			584
Total current liabilities							223,239			197,627
Long-term accrued liabilities							3,841			2,896
Long-term provisions							110			164
Long-term debt							56			227
Total liabilities							227,246			200,914
Equity
Share capital							205,871			203,812
Contributed surplus							9,770			8,820
Retained earnings							95,508			99,042
Total equity							311,149			311,674
Total liabilities and equity							538,395			512,588

Consolidated Statements of Cash Flows
			13-week		13-week		52-week		52-week
			period ended		period ended		period ended		period ended
			March 28,		March 29,		March 28,		March 29,
(thousands of Canadian dollars)			2015		2014		2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period			(13,946)		(14,378)		(3,534)		(30,999)
Add (deduct) items not affecting cash
	Depreciation of property, plant and equipment		3,753		4,144		14,789		16,358
	Amortization of intangible assets		3,032		2,925		11,913		11,123
	Net impairment (reversal) of capital assets		-		2,099		(458)		2,604
	Loss on disposal of capital assets		58		189		92		302
	Stock-based compensation		97		317		910		1,242
	Directors' compensation		89		81		341		425
	Deferred tax assets		(3,475)		(5,783)		363		4,127
	Other		(1,244)		224		(1,960)		(206)
Net change in non-cash working capital balances			(71,705)		(93,143)		37,841		(19,196)
Interest on long-term debt and financing charges			21		13		69		95
Interest income on cash and cash equivalents			(653)		(611)		(1,906)		(2,377)
Income taxes received			-		-		26		26
Share of loss (earnings) from equity investment			431		211		(655)		(789)
Cash flows from (used in) operating activities			(83,542)		(103,712)		57,831		(17,265)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment			(1,925)		(2,512)		(10,832)		(18,700)
Addition of intangible assets			(1,718)		(2,473)		(6,914)		(10,546)
Distributions from equity investment			527		800		527		1,159
Interest received			903		640		1,898		2,463
Cash flows used in investing activities			(2,213)		(3,545)		(15,321)		(25,624)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt			(50)		(194)		(586)		(814)
Interest paid			(17)		(40)		(67)		(110)
Proceeds from share issuances			770		-		1,758		7
Dividends paid			-		-		-		(8,348)
Repurchase of options			-		-		-		(975)
Cash flows from (used in) financing activities			703		(234)		1,105		(10,240)
Effect of foreign currency exchange rate changes on cash and cash equivalents			987		(223)		1,969		145
Net increase (decrease) in cash and cash equivalents during the period			(84,065)		(107,714)		45,584		(52,984)
Cash and cash equivalents, beginning of period			287,227		265,292		157,578		210,562
Cash and cash equivalents, end of period			203,162		157,578		203,162		157,578

Consolidated Statements of Loss and Comprehensive Loss
			13-week		13-week		52-week		52-week
			period ended		period ended		period ended		period ended
			March 28,		March 29,		March 28,		March 29,
(thousands of Canadian dollars, except per share data)			2015		2014		2015		2014
Revenue			186,155		184,333		895,376		867,668
Cost of sales			(104,794)		(106,298)		(503,059)		(493,955)
Gross profit			81,361		78,035		392,317		373,713
Operating, selling, and administrative expenses			(99,034)		(98,620)		(398,031)		(403,693)
Operating loss			(17,673)		(20,585)		(5,714)		(29,980)
Interest on long-term debt and financing charges			(21)		(13)		(69)		(95)
Interest income on cash and cash equivalents			653		611		1,906		2,377
Share of earnings (loss) from equity investment			(431)		(211)		655		789
Loss before income taxes			(17,472)		(20,198)		(3,222)		(26,909)
Income tax recovery (expense)
	Current		51		37		51		37
	Deferred		3,475		5,783		(363)		(4,127)
Net loss and comprehensive loss for the period			(13,946)		(14,378)		(3,534)		(30,999)
Net loss per common share
Basic			$(0.54)		$(0.56)		$(0.14)		$(1.21)
Diluted			$(0.54)		$(0.56)		$(0.14)		$(1.21)

SOURCE Indigo Books & Music Inc.

Janet Eger, Vice President, Public Affairs, 416 342 8561, [email protected]

Related Links

http://www.indigo.ca