MONTREAL, April 19, 2012 /CNW Telbec/ - During the second quarter of fiscal 2012, SPORTSCENE GROUP INC. ("Sportscene" or "the Company") (TSXV: SPS.A), operator of LA CAGE AUX SPORTS resto-bar chain, carried on its capital investment program by injecting an additional $1.7 million in the expansion of its infrastructures.
During the 13-week period ended February 26, 2012, La Cage aux Sports' total network sales(1) grew by 5.8% to $28.3 million. For the first half of fiscal 2012, sales totalled $56.4 million, up 3.9% over the previous year. During the same 13 and 26-week periods ended February 26, 2012, the Company's consolidated revenues amounted to $19.2 million and $42.9 million, posting increases of 2.0% and 6.0% respectively over the corresponding periods of the prior fiscal year.
The expansion program in which Sportscene has invested more than $12 million over the past 18 months continued to drive the growth in La Cage aux Sports network's total sales and the Company's revenues. Another Cage was inaugurated during the second quarter, becoming the third new unit to open since the beginning of the current fiscal year, and the fifth since the fall of 2010. In addition, the various measures implemented to enhance La Cage aux Sports' menu offering combined with a dynamic promotional program yielded the expected benefits, as they helped preserve customer traffic in existing Cages and thereby stabilize average same-Cage sales, despite a persisting sluggish economy and a less favourable sporting environment than the previous year.
Second-quarter consolidated EBITDA(1) amounted to $2.2 million, compared with $2.4 million for the same quarter of the previous year. For the first half of fiscal 2012, Sportscene recorded year-to-date EBITDA of $4.6 million, compared with $5.2 million for the first six months of the prior year. Sportscene closed the second quarter with net earnings attributable to shareholders of $0.6 million or $0.15 per share (basic and diluted), compared with $0.9 million or $0.22 per share (basic and diluted) for the same quarter of the previous year. For the first half of fiscal 2012, the Company posted net earnings attributable to shareholders of $1.6 million or $0.39 per share, compared with $2.2 million or $0.53 per share for the same period of the previous year.
In addition to the competitive pressures exerted by current economic conditions on the restaurant industry's profit margins, a significant portion of the decrease in Sportscene's net earnings is attributable to the costs associated with the recent expansion of its infrastructures, more specifically the new Cages' start-up costs and the increase in amortization and financial expenses.
In terms of cash flows, operating activities for the first six months of fiscal 2012 provided liquidities of $4.9 million, contributing to maintain the Company's solid financial position.
Outlook
For the rest of the current fiscal year, given the benefits derived from the various initiatives implemented in the past quarters, Sportscene Group will pursue its action plan aimed at alleviating the effects of a rather unfavourable context in a creative and profitable manner. The Company will concentrate its efforts on protecting the Cages' customer traffic by further enhancing its foodservices offering and standing apart through original marketing, while constantly promoting operational excellence throughout its organization.
"Considering Sportscene Group's achievements and performance since the beginning of the economic slowdown, we look to the future with confidence. Once more favourable economic conditions are restored, the Company will be ready to take advantage of growth opportunities armed with a larger operational base, a healthy financial position and new development projects," indicated Jean Bédard, President and Chief Executive Officer of Sportscene Group Inc.
Profile
In business since 1984, Sportscene Group Inc. operates Quebec's leading chain of sports-themed resto-bars: La Cage aux Sports. As of today, this banner comprises 52 "Cages", 39 of which are wholly or jointly owned by the Company, and 13 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 complex 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) | The following items are not performance measures consistent with IFRS. In Sportscene's financial statements, EBITDA corresponds to "Operating earnings". Total network sales are the aggregate sales achieved by all La Cage aux Sports restaurants, including franchised, jointly-owned and corporate units. |
(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. |
Interim Condensed Consolidated Statements of Net Earnings and Comprehesive Income | |||||
(in thousands of Canadian dollars, except for earnings per share and number of outstanding shares) |
(unaudited) | |||||
13 weeks ended | 26 weeks ended | ||||
|
February 26, 2012 |
February 27, 2011 |
February 26, 2012 |
February 27, 2011 |
|
$ | $ | $ | $ | ||
Revenues | 19,243 | 18,858 | 42,850 | 40,420 | |
Cost of sales | 5,818 | 6,763 | 12,354 | 13,567 | |
Employee benefits expense | 5,839 | 4,955 | 11,696 | 10,161 | |
Selling and administrative expenses | 5,405 | 4,773 | 14,166 | 11,484 | |
Operating earnings | 2,181 | 2,367 | 4,634 | 5,208 | |
Interest on long-term debt | 143 | 96 | 271 | 178 | |
Other interest expenses | 37 | 34 | 60 | 62 | |
Amortization of property, plant and equipment | 1,023 | 884 | 1,976 | 1,753 | |
Amortization of intangible assets | 21 | 27 | 45 | 55 | |
Other (gains) losses | 121 | 63 | 90 | 132 | |
1,345 | 1,104 | 2,442 | 2,180 | ||
Earnings before income tax | 836 | 1,263 | 2,192 | 3,028 | |
Income tax | 210 | 353 | 577 | 872 | |
Net earnings and comprehensive income | 626 | 910 | 1,615 | 2,156 | |
Net earnings and comprehensive income attributable to: | |||||
The Company's shareholders | 634 | 917 | 1,626 | 2,197 | |
Non-controlling interests | (8) | (7) | (11) | (41) | |
Net earnings and comprehensive income | 626 | 910 | 1,615 | 2,156 | |
Earnings per share (in $): | |||||
Basic | $0.15 | $0.22 | $0.39 | $0.53 | |
Diluted | $0.15 | $0.22 | $0.39 | $0.53 | |
Weighted average number of outstanding | |||||
Class A shares (in thousands): | |||||
Basic | 4,165 | 4,168 | 4,165 | 4,168 | |
Diluted | 4,165 | 4,173 | 4,165 | 4,173 |
Interim Condensed Consolidated Statements of Changes in Shareholders' Equity | ||||||||
(in thousands of Canadian dollars, except number of outstanding shares) | ||||||||
(unaudited) | ||||||||
Shareholders' Equity attributable to the Company's shareholders | ||||||||
|
Number of shares |
Share capital |
Stock-based compensation reserve |
Retained earnings |
Total |
Non- controlling interests |
Total Shareholders' equity |
|
(in thousands) | $ | $ | $ | $ | $ | $ | ||
Balance on August 28, 2011 | 4,165 | 3,551 | 222 | 25,121 | 28,894 | 293 | 29,187 | |
Stock-based compensation | - | - | 16 | - | 16 | - | 16 | |
Net earnings and comprehensive income | - | - | - | 1,626 | 1,626 | (11) | 1,615 | |
Dividends declared to the company's shareholders | - | - | - | (1,250) | (1,250) | - | (1,250) | |
Dividends paid to non-controlling interests | - | - | - | - | - | (35) | (35) | |
Balance on February 26, 2012 | 4,165 | 3,551 | 238 | 25,497 | 29,286 | 247 | 29,533 | |
Balance on August 30, 2010 | 4,168 | 3,554 | 199 | 23,684 | 27,437 | 286 | 27,723 | |
Stock-based compensation | - | - | 11 | - | 11 | - | 11 | |
Net earnings and comprehensive income | - | - | - | 2,197 | 2,197 | (41) | 2,156 | |
Dividends paid to the company's shareholders | - | - | - | (1,251) | (1,251) | - | (1,251) | |
Redemption of shares of a subsidiary owned by a non-controlling shareholder | - | - | - | - | - | (5) | (5) | |
Capital transactions with non-controlling interests | - | - | - | (60) | (60) | 39 | (21) | |
Balance on February 27, 2011 | 4,168 | 3,554 | 210 | 24,570 | 28,334 | 279 | 28,613 |
Interim Condensed Consolidated Statements of Financial Position | |||
(in thousands of Canadian dollars) | |||
(unaudited) | |||
|
As at February 26, 2012 |
As at August 28, 2011 |
|
$ | $ | ||
Assets | |||
Current assets | |||
Cash and cash equivalents | 9,638 | 9,453 | |
Accounts receivable | 5,442 | 4,498 | |
Income tax receivable | 505 | - | |
Inventories | 1,516 | 1,349 | |
Prepaid expenses | 479 | 313 | |
Current portion of notes receivable | 152 | 37 | |
Total current assets | 17,732 | 15,650 | |
Notes receivable | 998 | 893 | |
Property, plant and equipment | 35,194 | 32,112 | |
Goodwill | 2,833 | 2,696 | |
Intangible assets | 938 | 759 | |
Deferred tax asset | 1,549 | 1,525 | |
Total assets | 59,244 | 53,635 | |
Liabilities and shareholders' equity | |||
Current liabilities | |||
Accounts payable and accrued liabilities | 8,572 | 7,704 | |
Dividends payable | 1,250 | - | |
Income tax payable | - | 32 | |
Deferred revenues and credits | 2,042 | 1,190 | |
Current portion of long-term debt | 2,266 | 1,953 | |
Total current liabilities | 14,130 | 10,879 | |
Long-term debt | 13,076 | 11,196 | |
Deferred revenues and credits | 1,947 | 1,815 | |
Deferred tax liability | 558 | 558 | |
Total liabilities | 29,711 | 24,448 | |
Shareholders' equity | |||
Share capital | 3,551 | 3,551 | |
Stock-based compensation reserve | 238 | 222 | |
Retained earnings | 25,497 | 25,121 | |
Shareholders' equity attributable to the Company's shareholders | 29,286 | 28,894 | |
Non-controlling interests | 247 | 293 | |
Total shareholders' equity | 29,533 | 29,187 | |
Total liabilities and shareholders' equity | 59,244 | 53,635 |
Interim Condensed Consolidated Statements of Cash Flows | ||||||
(in thousands of Canadian dollars) | ||||||
(unaudited) | ||||||
13 weeks ended | 26 weeks ended | |||||
|
February 26, 2012 |
February 27, 2011 |
February 26, 2012 |
February 27, 2011 |
||
$ | $ | $ | $ | |||
Operating activities: | ||||||
Net earnings | 626 | 910 | 1,615 | 2,156 | ||
Adjustments to reconcile net earnings to cash flows from operating activities: | ||||||
Loss on disposal of property, plant and equipment | 85 | 32 | 115 | 59 | ||
Loss on disposal of interests in joint ventures | - | - | - | 26 | ||
Gain on business combination achieved in stages | - | - | (3) | - | ||
Amortization of property, plant and equipment | 1,023 | 884 | 1,976 | 1,753 | ||
Amortization of intangible assets | 21 | 27 | 45 | 55 | ||
Stock-based compensation | 11 | 6 | 16 | 11 | ||
Interest expenses recognized in net earnings | 180 | 130 | 331 | 240 | ||
Interest paid | (178) | (98) | (333) | (185) | ||
Interest included in the cost of property, plant and equipment | 5 | 3 | 16 | 11 | ||
Income tax expenses recognized in net earnings | 210 | 353 | 577 | 872 | ||
Income tax paid | (290) | (222) | (1,115) | (728) | ||
1,693 | 2,025 | 3,240 | 4,270 | |||
Net change in non-cash working capital items, net of acquisitions and disposals of subsidiaries and joint ventures |
808 | 1,526 | 1,678 | 533 | ||
2,501 | 3,551 | 4,918 | 4,803 | |||
Financing activities: | ||||||
Increase of long-term debt | 1,620 | - | 2,421 | 150 | ||
Repayment of long-term debt | (495) | (403) | (1,006) | (775) | ||
Dividends paid to non-controlling interests | - | - | (35) | - | ||
Redemption of shares of a subsidiary owned by a non-controlling shareholder | - | (5) | - | (5) | ||
Dividends on Class A share | (1,250) | (1,251) | (1,250) | (1,251) | ||
(125) | (1,659) | 130 | (1,881) | |||
13 weeks ended | 26 weeks ended | |||||
|
February 26, 2012 |
February 27, 2011 |
February 26, 2012 |
February 27, 2011 |
||
$ | $ | $ | $ | |||
Investing activities: | ||||||
Acquisitions of subsidiaries and joint ventures, net of cash and cash equivalents acquired | (168) | - | (187) | (73) | ||
Proceeds from business disposals, net of disposal of cash and cash equivalents | - | - | - | 204 | ||
Change in notes receivable | (212) | (437) | (370) | (533) | ||
Retraction of investments | - | 1,500 | - | 1,500 | ||
Acquisitions of property, plant and equipment | (1,959) | (1,650) | (4,097) | (2,618) | ||
Proceeds from disposals of property, plant and equipment | 13 | 3 | 14 | 8 | ||
Acquisitions of intangible assets | (5) | (6) | (223) | (119) | ||
(2,331) | (590) | (4,863) | (1,631) | |||
Increase in cash and cash equivalents | 45 | 1,302 | 185 | 1,291 | ||
Cash and cash equivalents, beginning of the period | 9,593 | 7,716 | 9,453 | 7,727 | ||
Cash and cash equivalents, end of period | 9,638 | 9,018 | 9,638 | 9,018 |
Source: Sportscene Group Inc.
Contact:
Jean Bédard, Chairman of the Board, President and Chief Executive Officer
Josée Pépin, Manager, Accounting and Disclosure
450-641-3011
Share this article