BMTC Group Inc. announces Financial Results for its year ended December 31st, 2015

MONTREAL, Feb. 18, 2016 /CNW Telbec/ - For the year ended December 31st, 2015, the Company's revenues increased by $15,982,000 to $717,338,000, compared to $701,356,000 recorded in the corresponding 2014 period, a 2.3% increase. This increase is the result of $10,850,000 increase in new stores sales and a $5,132,000 increase in same store sales. Net earnings for the year ended December 31st, 2015, amounted to $41,528,000 compared to $48,647,000 for the corresponding 2014 period. Basic net earnings per share decreased to $0.99 compared to $1.08 in 2014.

The increase in gross margins of $5,657,000 was erased by the selling expenses related to new stores.

During the fiscal year ended December 31st, 2015, the Company proceeded with the sale of land for an amount of $2,393,000 resulting in an after tax gain of $1,617,000 or $0.04 per basic share.

The effect the cost of options increased basic net earnings per share of $0.01 for the year ended December 31st, 2015 compared to $0.00 for the year ended December 31st, 2014.

For the year ended December 31st, 2015, the share repurchase program contributed to an increase in basic net earnings per share of $0.09.

Excluding these effects, the variation to the adjusted net earnings would have been $9,249,000 or $0.22 per basic share for the year ended December 31st, 2015.

The $9,249,000 variation in adjusted net earnings in 2015 is as follows:

	($ in thousands)
	2015	2014
Net Earnings	41 528	48 647
Gain on disposal of land (after-tax)	(1 617)	-
Variation of cost of options (after-tax)	(362)	151
Adjusted Net Earnings	39 549	48 798
Minus: Adjusted Net Earnings for 2014	48 798
Variation	(9 249)

This variation in adjusted after-tax income is allocated throughout the quarters as follows:
		($ in thousands)
	Increase (decrease)  retail operating earnings	Increase (decrease) investment income	Increase (decrease) adjusted operating earnings
1st  quarter 2015	1 464	(214)	1 250
2nd quarter 2015	(1 427)	(446)	(1 873)
3rd quarter 2015	(3 468)	(3 401)	(6 869)
4th quarter 2015	(1 101)	(656)	(1 757)
Total	(4 532)	(4 717)	(9 249)

The decrease in net earnings for the year ended December 31st, 2015, compared to 2014, was due to the decrease of investment revenues as well as the increase and/or decrease of expenses, the details are as follows:

($ in thousands)
Depreciation of fixed assets (after tax)	(902)
Marketing expenses non related to new stores (after tax)	(915)
Pension plans expense after tax)	1 203
Store opening expenses  (after tax)	(1 014)
Web related expenses (after tax)	(1 827)
Expenses related to capital reorganisation (after tax)	(844)
Other expenses (after tax)	(233)
	(4 532)
Investment income (after tax)	(4 717)
	(9 249)

Annual Financial Information
($ in thousands, except for per share amounts)
		2015		2014
		$		$
Revenue		717 338		701 356
Net Earnings		41 528		48 647
Total Assets		274 022		362 350
Net Earnings Per Share
	Basic	0,99		1,08
	Diluted	0,99		1,08
Dividends Per Share		0,24		0,24

Quarterly Results (Unaudited)
($ in thousands, except for per share amounts)
		March 31 st		June 30th
		2015	2014	2015	2014
		$	$	$	$
Revenue		149 280	145 118	188 373	182 881
Net (Loss) Earnings		59	(1 468)	12 196	14 020
Net (Loss) Earnings Per Share
	Basic		(0,03)	0,27	0,31
	Diluted		(0,03)	0,27	0,31
		September 30th		December 31 st
		2015	2014	2015	2014
		$	$	$	$
Revenue		189 385	190 207	190 300	183150
Net (Loss) Earnings		13 037	18 271	16 236	17 824
Net (Loss) Earnings Per Share
	Basic	0,31	0,40	0,41	0,40
	Diluted	0,31	0,40	0,41	0,40

For the three month period ended December 31st, 2015, the Company's revenues increased by $7,150,000 to $190,300,000, compared to $183,150,000 recorded in the corresponding 2014 period. Net earnings for the three month period ended December 31st, 2015, amounted to $16,236,000 compared to $17,824,000 for the corresponding 2014 period. Basic net earnings per share amounted to $0.41 compared to $0.40 in 2014.

The effect of the cost of options increased basic net earnings per share of $0.01 for the year ended December 31st, 2015 compared to $0.00 for the year ended December 31st, 2014.

For the three month period ended December 31st, 2015, the share repurchase program contributed to an increase in basic net earnings per share of $0.05.

Excluding these effects, the variation to the adjusted net earnings would have been $1,757,000 or $0.04 per basic share for the three month period ended December 31st, 2015.

The $1,757,000 variation in adjusted net earnings in 2015 is as follows:

	($ in thousands)
	2015		2014
Net Earnings	16 236		17 824
Variation of cost of options (after-tax)	(165)		4
Adjusted Net Earnings	16 071		17 828
Minus: Adjusted Net Earnings for 2014	17 828
Variation	(1 757)

Pursuant to the normal course issuer bids on March 12^th, 2014 and renewed on March 13th, 2015. Accordingly, 67,838 Class A Subordinate Voting Shares were repurchased and cancelled by the Company. As a result of this change, the Company had on May 10th, 2015, 1,748,796 Class B Multiple Voting Shares and 43,145,066 Class A Subordinate Voting Shares issued and outstanding.

On May 11^th, 2015, the Company announced the completion of the reorganization to eliminate the Company's dual-class share capital structure by way of court-approved plan of arrangement. The Company received ail required approvals to complete the arrangement, including a final order from the Superior Court of Québec. Pursuant to the arrangement, ail issued and outstanding Class B Multiple Voting Shares were converted into Class A Subordinate Voting Shares on a one-for-one basis, without any monetary consideration being paid. The Class A Subordinate Voting Shares were also renamed "Common Shares". As at May 12th, 2015, the Company had 44,893,862 Common Shares issued and outstanding.

On July 10^th, 2015, the Company announced that it has repurchased for cancellation 6,980,012 common shares at a price of $15.50 per share, for a total consideration of $108,190,186, which was paid from the Company's cash on hand. This price represents a discount of 5.5% to the trading price of the last independent transaction on the Toronto Stock Exchange and a discount of 1.2% to the simple average of the closing price of the Company's common shares on the Toronto Stock Exchange for the 20 days ending on July 9^th, 2015 on which common shares of the Company were traded.

A favorable decision was obtained from the Autorité des marchés financiers to exempt the Company from the issuer bid requirements under applicable securities legislation in connection with the transaction. Post-transaction, there were 37,913,850 common shares issued and outstanding (compared with 44,893,862 common shares pre-transaction), representing a decrease of approximately 15.5% of the total number of common shares issued and outstanding.

In the context of the share repurchase, the Company amended its normal course issuer bid that will be in effect until March 12^th, 2016 in order to specifically authorize purchases effected outside the facilities of the Toronto Stock Exchange pursuant to exemption orders issued by Canadian securities regulatory authorities. The price that the Company will pay for purchases effected outside the facilities of the Toronto Stock Exchange pursuant to exemption orders issued by securities regulatory authorities will be at discount to the prevailing market prices in compliance with the requirements under such exemption orders.

In accordance with the rules of the Toronto Stock Exchange, because the number of common shares repurchased exceeds the annual aggregate limit of shares that the Company may repurchase by March 12^th, 2016 under its current normal course issuer bid, the Company may no longer repurchase shares under its current normal course issuer bid. Therefore, as at December 31st, 2015, the Company had 37,913,850 Common Shares.

During the year ended December 31st, 2015, no options were granted. On March 31st, 2015, 21,900 options were cancelled and on August 7th, 2015, 10,950 options were cancelled. As at December 31st, 2015, options for 219,000 Common Shares, representing 0.58% of the Company's outstanding shares remain issued and 5,710,864 authorized share options, representing approximately 15.06% 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.

During the fiscal year ended December 31st, 2015, the Company paid eligible dividends of $0.24 per Common Shares to holders.

Operations

BMTC Group Inc.

On July 10^th, 2015, the Company proceeded with a simplified vertical merger with its subsidiary ATBM Group Inc. (Brault & Martineau and EconoMax division).

The Company has started the restructuration of ail of its websites. The first phase of the implementation of a distinct e-commerce platform for its banner Brault & Martineau is now completed and operational since November 2015. The process of implementation will continue throughout 2016 for the second phase as well as for all the other banners of the Company. The Company is also reviewing its IT Systems in 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 Company decided to invest in a new computer system, its integration and implementation began in the third quarter of 2014. The costs related to these modifications are estimated to be $10,600,000. A portion of these costs were charged in 2015.

Brault & Martineau Division

The Company is presently evaluating the refitting of its furniture and electronic departments in all of its stores. The objective of this improvement is to offer our clients a unique shopping experience which will help differentiate us from online shopping. The costs related to these renovations for the next two years, 2016 and 2017, are estimated to be $15,000,000.

EconoMax Division

In October, 2015, the Company proceeded with the opening of a new store in Drummondville, the costs related this opening were charged in the period ended September 30^th, 2015. The EconoMax banner now has 11 stores in the province of Québec.

Ameublements Tanguay

In July 2015, the Company purchased land in Trois-Rivières of 220,000 square feet for the construction and opening of a new store in the fall of 2016. The existing store will be converted into a liquidation center.

Management Discussion and Outlook for the Future of the Company

In spite of a difficult economic context, the Québec economy has seen a slight growth in 2015. The loss of more than thousands of jobs in Québec as well as government austerity measures caused a slowdown in consumer spending. In fact 2015 was the worst year since 2010 for bankruptcy filings in the retail industry. According to Statistics Canada, sales for furniture stores grew by 1.2% in the last quarter of 2015, while the first nine months of the year were flat.

During 2015, the Company continued its expansion of the EconoMax banner. Following the opening of the Granby store in April 2015, and a new store in Drummondville in October 2015, there are now eleven EconoMax stores in the metropolitan area of Montréal, giving the banner the visibility needed for proper development.

Management is confident that the Company's operational efficiency and financial position provide with a competitive advantage, particularly in difficult market conditions. It permits the Company to continue its aggressive marketing campaigns, allowing it to remain a leading participant in its market.

 

BMTC Group Inc.
Consolidated Statement of Comprehensive Income
Years ended December 31, 2015 and 2014
(In thousands of Canadian dollars, except per share data)
			2015		2014
			$		$
Revenue			717 338		701 356
Cost of sales			(433 623)		(423 298)
Gross profit			283 715		278 058
Other income			502		631
Selling expenses			(193 628)		(185 992)
Administrative expenses			(36 295)		(36 333)
Operating profit			54 294		56 364
Realized and unrealized change in fair value of financial assets, at fair value			195		6 526
Investment income			1 776		2 142
Earnings before income tax expense			56 265		65 032
Income tax expense			(14 737)		(16 385)
Net earnings			41 528		48 647
Other comprehensive income
	Items that will not be reclassified to earnings
		Remeasurements of defined benefit pension plans	(7 511)		33 184
		Income tax recovery (expense) relating to items that will not be reclassified	2 020		(8 927)
Other comprehensive income, net of tax			(5 491)		24 257
Total comprehensive income			36 037		72 904
Net earnings per share
Basic			0,99		1,08
Diluted			0,99		1,08

BMTC Group Inc.
Consolidated Statement of Changes in Equity
Years ended December 31, 2015 and 2014
(In thousands of Canadian dollars)
			Retained
	Capital stock		earnings		Total equity
	$		$		$
Balance as at January 1, 2015	3 552		251 874		255 426
Share redemption	(556)				(556)
Share redemption premium			(108 840)		(108 840)
Dividends			(9 099)		(9 099)
Transactions with owners	(556)		(117 939)		(118 495)
Net earnings			41 528		41 528
Other comprehensive income			(5 491)		(5 491)
Comprehensive income			36 037		36 037
Balance as at December 31, 2015	2 996		169 972		172 968
	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

BMTC Group Inc.
Consolidated Statement of Cash Flows
Years ended December 31, 2015 and 2014
(In thousands of Canadian dollars)
	2015		2014
	$		$
OPERATING ACTIVITIES
Earnings before income tax expense	56 265		65 032
Adjustments	1 378		(4 164)
Net changes in working capital	(8 095)		12 499
Taxes paid	(16 271)		(14 661)
Cash flow from operating activities	33 277		58 706
INVESTING ACTIVITIES
Acquisition of other financial assets	(77 343)		(59 120)
Proceeds from disposal of other financial assets	147 339		39 638
Purchase of property, plant and equipment	(13 825)		(9 665)
Proceeds from disposal of property, plant and equipment	2 547		90
Interest received	341		484
Dividends received	1 407		1 617
Cash flow from investing activities	60 466		(26 956)
FINANCING ACTIVITIES
Payments for share redemption	(109 396)		(4 553)
Dividends	(9 099)		(10 807)
Cash flow from investing activities	(118 495)		(15 360)
Net change in cash	(24 752)		16 390
Cash, beginning of year	33 495		17 105
Cash, end of year	8 743		33 495

BMTC Group Inc.
Consolidated Statement of Financial Position
As at December 31, 2015 and 2014
(In thousands of Canadian dollars)
		2015		2014
ASSETS		$		$
Current
	Cash	8 743		33 495
	Trade and other receivables	3 163		3 599
	Current tax assets	1 264		165
	Inventory	88 526		82 722
	Prepaid expenses	1 132		1 171
Current assets		102 828		121 152
Non-current
	Other financial assets	53 746		124 170
	Property, plant and equipment	108 637		103 989
	Defined benefit plan	8 811		13 039
		171 194		241 198
Total assets		274 022		362 350
LIABILITIES
Current
	Trade and other payables	100 688		103 454
	Share-based payment liability	230		725
Current liabilities		100 918		104 179
Non-current
	Lease incentive	77		231
	Deffered tax liabilities	59		2 514
		136		2 745
Total liabilities		101 054		106 924
SHAREHOLDERS' EQUITY
Capital stock		2 996		3 552
Retained earnings		169 972		251 874
Total shareholders' equity		172 968		255 426
Total liabilities and shareholders'  equity		274 022		362 350

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 2015 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 and more appropriate to provide additional information.

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 calculated according to IFRS, 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 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]