BMTC Group inc. announces financial results for its quarter ended April 30th, 2018

MONTREAL, June 7, 2018 /CNW Telbec/ -

Results *

For the first quarter ended April 30th, 2018, the Company's revenues increased by $196,000 to $162,194,000, compared to $161,998,000 recorded in the first quarter ended March 31st, 2017. The increase in revenues for the comparable periods and stores would have been 3%. Net earnings for the first quarter ended April 30th, 2018, amounted to $4,806,000 compared to $57,000 for the first quarter ended March 31st, 2017. Basic net earnings per share amounted to $0.13 compared to $0.00 recorded in the first quarter ended March 31st, 2017.

The effect of the cost of options had no impact on basic net earnings per share for the fisrt quarter ended April 30th, 2018 and the first quarter ended March 31st, 2017.

For the fisrt quarter ended April 30th, 2018, the share repurchase program had no impact on basic net earnings per share.

During the period ended April 30th, 2018, the Company proceeded with the sale of the Repentigny store for an amount of $9,000,000 resulting in an after tax gain of $4,522,000 or $0.13 per basic share.

Excluding all these effects, the variation to the adjusted net earnings would have been $119,000 or $0.00 per basic share for the the fisrt quarter ended April 30th, 2018.

The $119,000 variation in adjusted net earnings for the first quarter of 2018 is as follows:
		(Unaudited and $ in thousands)
		April 30, 2018		March 31, 2017
Net earnings		4,806		57
Gain on disposal of building (after-tax)		(4,522)		-
Variation of cost of options (after-tax)		(138)		(30)
Adjusted net earnings		146		27
Minus: Adjusted net earnings for 2017		27
Variation		119

* The Company proceded to change it's financial year end date from December 31st to January 31st. This change came into effect with the 2018 financial year end, therefore the accounting period of the 2018 consolidated financial statements corresponds to a 13 month period ending January 31st, 2018 compared to a 12 month period for the current consolidated financial statements. Starting February 1st, 2018, these unaudited interim financial statements will correspond to the quarters ending in April 30th, July 31st and October 31st.

This variation in adjusted after-tax income is allocated throughout the quarters as follows:
		(Unaudited and $ in thousands)
	Increase		Increase	Increase
	(decrease)		(decrease)	(decrease)
	retail operating		investment	adjusted
	earnings		income	operating earnings
1st quarter	1,934		(1,815)	119

Annual Financial Information
($ in thousands, except for per share amounts)
			January 31, 2018		December 31, 2016
			13 months		12 months
			$		$
Revenue			810,144		746,649
Net Earnings			49,335		43,830
Total Assets			312,569		309,483
Net Earnings Per Share
	Basic		1.36		1.17
	Diluted		1.36		1.17
Dividends Per Share			0.24		0.24

Financial Position and Dividends

Cash and investments increased by $29,175,000 during the first quarter ended April 30th, 2018. Investments consist of bank notes, which at the close of the period had a market value of $120,023,000 (including cash).

As of April 30th, 2018, the working capital showed a surplus of $816,000 an increase of $9,147,000 compared to January 31st, 2018. The Company's shareholders' equity increased from $204,376,000 as at January 31st, 2018 to $208,635,000 as at April 30th, 2018. As of April 30th, 2018, the book value per share stood at $5.95, compared to $5.82 as at January 31st, 2018.

Pursuant to the normal course issuer bid put in place on March 23rd, 2017, and renewed on April 13th, 2018, accordingly, 34,600 Common Shares were repurchased and cancelled by the Company. As a result of this change, the Company had as of April 30th, 2018, 35,085,400 Common Shares issued and outstanding.

During the first quarter ended April 30th, 2018, no options were granted or exercises. As at April 30th, 2018, options for 219,000 Common Shares, representing 0.6% of the Company's outstanding shares remain issued and 5,710,864 authorized share options, representing approximately 16.28% of the Company's outstanding shares, may still be granted pursuant to the Plan. The issued and outstanding options may be exercised at a price of $17.85 per Common Shares.

A semi-annual eligible dividend of $0.14 per Common Share has been declared to holders registered at the close of business on July 5th, 2018 which will be payable on July 12th, 2018. This represents a $0.02 or 16.5% increase compared to the semi-annual eligible dividend declared for previous years.

Quarterly Results
(Unaudited and $ in thousands, except for per share amounts)
			April 30th		March 31st		June 30th
			2018		2016		2016		2016
			$		$		$		$
Revenue			162,194		161,998		199,314		197,043
Net (Loss) Earnings			4,806		57		14,014		12,407
Net (Loss) Earnings Per Share
	Basic		0.13		-		0.38		0.32
	Diluted		0.13		-		0.38		0.32
			September 30th				January 31st		December 31st
			2017		2016		2018		2017
							(4 months)		(3 months)
			$		$		$		$
Revenue			203,722		197,612		245,110		197,051
Net (Loss) Earnings			17,544		14,708		17,720		17,673
Net (Loss) Earnings Per Share
	Basic		0.48		0.40		0.50		0.47
	Diluted		0.48		0.40		0.50		0.47

Operations

BMTC Inc.

The Company proceeded to change its financial year end date from December 31st to January 31st. This change came into effect with the 2018 financial year end, therefore the accounting period of the 2018 consolidated financial statements corresponds to a 13 month period ending January 31st, 2018 compared to a 12 month period for the current consolidated financial statements. Starting February 1st, 2018, these unaudited interim financial statements will correspond to the quarters ending in April 30th, July 31st and October 31st.

The Company continues to restructure all of its websites and the first phase of the implementation of a distinct e-commerce platform for its banner Brault & Martineau and EconoMax is now completed and operational. The process of implementation will continue throughout 2018 and 2019 for the following phases as well as the restructuring for all the other banners of the Company. The Company is also reviewing its IT systems in to order standardise them throughout the banners, as well as to allow them to be more aligned with our e-commerce strategies. Following this evaluation, the Corporation decided to invest and to modify its existing IT systems, the integration and implementation will continue for a 3 to 5 year period. The cost of these modifications are estimated to be $17,000,000. A portion of these costs, $8,600,000 were incurred and the balance will be recorded in the subsequent years.

Brault & Martineau Division

In February 2018, the Company sold the Repentigny store for an amount of $9,000,000, which resulted in after tax profit of $4,522,000.  

Management Discussion and Outlook for the Future of the Company

The Quebec economy in 2017 has known the most important growth since the last recession in 2008. This trend seems to be in line with the first quarter of 2018. The Company recorded a 3% growth for the comparable periods and stores. The unemployment rate is at a historic low in Quebec, which should conjugate with an increase of disposable income, although a survey conducted by the Canadian Association of pay revealed that in Quebec, 34% of people live from one pay check to the other, mainly due to the increase of their debt burden. The continuing trend of interest rate increase during 2018 would certainly risk to further undermine this situation and would therefore have a negative impact on consumer spending.

The retail sector is in complete transformation. The e-commerce and the client's shopping experience are at the heart of this transformation. In fact, the bankruptcy forecast for the traditional brick and mortar retailers south of the border would reach and all-time record. According to Credit Suisse forecast, no less than 8,600 stores would close their operations in 2018.

In Quebec, one person out of ten now shop online with a monthly average basket of $281, according to the data compiled by CEFRIO. Online sales in retail represent 10%, although influences drive to store up to 56%.

The Company is confident that its market positioning thanks to the different banners, the innovation of its brick and mortar stores and the major investments towards IT systems and e-commerce will permit to respond to the changing reality of the retail sector and allow to maintain its leading market shares.

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 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 2018 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 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 and more appropriate to provide additional information.

The Company also discloses same store revenues, which have been realised in stores opened or closed for comparable months. This measure is used by management and is a similar measures presented by other issuers in our industry.

Adjusted net earnings, adjusted operating earnings, adjusted administrative expenses as well as same store revenues are not an earnings measure recognised by IFRS and does not have a standardised meaning 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. This measure of performance should not be considered as an alternative as an indicator of performance calculated according to IFRS, but rather as 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.'s Common Shares are listed on the Toronto Stock Exchange and through its subsidiary Ameublements Tanguay Inc., and its two divisions, Brault & Martineau and EconoMax, the Company 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., [phone]

Related Links

www.braultetmartineau.com