Sportscene Group Inc. Posts A Good Financial Performance in the 3rd Quarter and Intensifies its Development Efforts - Declaration of a Second Dividend of $0.30 Per Share

MONTREAL, July 17, 2014 /CNW Telbec/ - SPORTSCENE GROUP INC. ("Sportscene" or "the Company") (TSXV: SPS.A) continued to improve its financial results in the third quarter ended May 25, 2014, which closed with net earnings of $1.4 million or $0.33 basic per share, up 17.2% over the corresponding period of 2013. The Company's revenues rose 17.4% to $20.2 million. La Cage aux Sports' total network sales ⁽¹⁾ grew by 5.7% to reach $32.1 million, their highest level since 2008. The network's performance is attributable to the favourable sporting environment in the spring of 2014 and the contribution of the Boucherville Cage inaugurated in November 2013, which showcases La Cage aux Sports' renewed design.

"Our flagship Cage continues to meet our expectations and its success prompts us to accelerate the implementation of our new design network-wide. Two Cages were modernized in the second and third quarters of 2014, another will be converted during the fourth quarter, and we intend to convert at least one unit one per quarter over the next fiscal year," commented Jean Bédard, President and Chief Executive Officer of Sportscene Group.

For the 39-week period ended May 25, 2014, the La Cage aux Sports network posted a 5.3% growth in sales ⁽¹⁾, which totalled $86.9 million, whereas Sportscene's revenues grew by 8.4% to $55.7 million. The Company achieved year-to-date net earnings of $3.0 million or $0.72 basic per share, up 34.3% over the previous year. Furthermore, the Company closed the period in solid financial health, posting a working capital of $4.2 million as at May 25, 2014, short-term available cash ⁽²⁾ of $7.8 million and a total net debt ratio ⁽³⁾ of 21%.

"We are satisfied with fiscal 2014 results so far, and thus confident Sportscene will close the year with a financial performance in line with our objectives," added Jean Bédard. In a longer-term perspective, Sportscene is currently working on various projects aimed at further consolidating its banner's competitive edge and its leadership in the entertainment-themed restaurant industry. Such projects include a menu overhaul and technological advances focused on enhancing the customer's experience.

Declaration of a Dividend of $0.30 Per Share

Considering the Company's positive outlook, good results and financial health, the Board of Directors has approved the payment of a second dividend for fiscal 2014, in the amount of $ 0.30 per share. This brings to $0.60 per share the total dividend for fiscal 2014. The new dividend will be paid on August 21, 2014 to shareholders of record as at July 31, 2014.

Profile

In business since 1984, Sportscene Group Inc. operates Quebec's leading chain of sports-themed resto-bars: La Cage aux Sports. This banner comprises 51 "Cages", 40 of which are wholly or jointly owned by the Company, and 11 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 national and international-calibre sporting events.

(1) Total network sales are the aggregate sales achieved by all La Cage aux Sports franchised, joint venture and corporate restaurants.
(2) Short-term available cash includes cash and cash equivalents and investments, if any.
(3) The total net ratio corresponds to long-term debt including its current portion, net of short-term available cash, divided by invested capital, i.e. the total of total net debt and shareholders' equity.

For further information about results and changes in Sportscene Group's financial position, refer to the interim management's report and interim condensed consolidated financial statements and accompanying notes for the 13 and 39-week periods ended May 25, 2014, available on SEDAR.

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 Comprehensive Income

(in thousands of Canadian dollars, except for earnings per share and number of outstanding shares)
(unaudited)
		13 weeks ended		39 weeks ended
		May 25, 2014	May 26, 2013	May 25,  2014	May 26, 2013
		$	$	$	$
			(Restated)		(Restated)
Revenues		20,249	17,255	55,740	51,426
Cost of sales		6,218	4,958	17,294	15,790
Selling and administrative expenses, excluding amortization		11,352	9,955	32,140	29,775
Other losses (gains)		26	35	39	(126)
Earnings before financial expenses, amortization and income tax		2,653	2,307	6,267	5,987
Amortization		977	852	2,820	2,673
Financial expenses		159	147	435	474
Share of net earnings of joint ventures and associates		(321)	(248)	(873)	(197)
Earnings before income tax expenses		1,838	1,556	3,885	3,037
Income tax expenses		454	375	864	788
Net earnings and comprehensive income		1,384	1,181	3,021	2,249
Net earnings and comprehensive income attributable to:
The Company's shareholders		1,369	1,169	2,998	2,247
Non-controlling interests		15	12	23	2
Net earnings and comprehensive income		1,384	1,181	3,021	2,249
Earnings per share (in $):
	Basic	0.33	0.28	0.72	0.54
	Diluted	0.32	0.28	0.71	0.54
Weighted average number of outstanding
	Class A shares (in thousands):
	Basic	4,165	4,165	4,165	4,165
	Diluted	4,231	4,165	4,231	4,165

Interim Condensed Consolidated Statements of Financial Position

(in thousands of Canadian dollars)
(unaudited)
		May 25, 2014	May 26, 2013	August 25, 2013	August 27, 2012
		$	$	$	$
Assets			(Restated)	(Restated)	(Restated)
Current assets
	Cash and cash equivalents	7,836	8,371	7,825	9,308
	Accounts receivable	4,456	5,163	4,175	3,377
	Income tax receivable	294	301	423	309
	Inventories	1,970	1,475	1,486	1,394
	Prepaid expenses	794	528	401	302
	Current portion of notes receivable	-	83	22	282
Total current assets		15,350	15,921	14,332	14,972
Notes receivable		553	958	655	1,303
Property, plant and equipment		36,411	30,111	30,221	29,706
Intangible assets		730	656	647	698
Deferred tax asset		1,541	1,456	2,209	1,259
Investments in joint ventures and associates, accounted for using the equity method		6,246	6,514	6,585	5,119
Goodwill		2,792	2,770	2,792	2,406
Total assets		63,623	58,386	57,441	55,463
Liabilities and shareholders' equity
Current liabilities
	Accounts payable and accrued liabilities	7,419	7,689	6,816	7,957
	Income tax payable	364	169	80	176
	Deferred revenues and credits	1,100	1,821	1,292	818
	Current portion of long-term debt	2,241	2,181	2,109	1,904
Total current liabilities		11,124	11,860	10,297	10,855
Long-term debt		15,053	11,268	10,748	11,505
Deferred revenues and credits		1,139	1,331	1,273	1,490
Deferred tax liability		458	420	991	405
Total liabilities		27,774	24,879	23,309	24,255
Shareholders' equity
	Share capital	3,551	3,551	3,551	3,551
	Stock-based compensation reserve	349	286	299	260
	Retained earnings	31,642	29,335	29,980	27,088
Shareholders' equity attributable to the Company's shareholders		35,542	33,172	33,830	30,899
Non-controlling interests		307	335	302	309
Total shareholders' equity		35,849	33,507	34,132	31,208
Total liabilities and shareholders' equity		63,623	58,386	57,441	55,463

Interim Condensed Consolidated Statements of Cash Flows

(in thousands of Canadian dollars)
(unaudited)
			13 weeks ended		39 weeks ended
			May 25, 2014	May 26,    2013	May 25,  2014	May 26,   2013
			$	$	$	$
				(Restated)		(Restated)
Operating activities
	Net earnings		1,384	1,181	3,021	2,249
		Adjustments to reconcile net earnings to cash flows from operating activities
		Loss on disposal of property, plant and equipment	26	7	39	40
		Gain on business combination achieved in stages	-	(72)	-	(266)
		Loss on impairment of non current assets	-	100	-	100
		Amortization of property, plant and equipment	964	840	2,790	2,633
		Amortization of intangible assets	13	12	30	40
		Share of net earnings of joint ventures and associates	(321)	(248)	(873)	(197)
		Dividends received from joint ventures and associates	300	100	720	131
		Stock-based compensation	19	8	50	26
		Financial expenses recognized in net earnings	159	147	435	474
		Financial expenses paid	(147)	(147)	(437)	(479)
		Income tax expenses recognized in net earnings	454	375	864	788
		Income tax paid	(213)	(197)	(487)	(946)
			2,638	2,106	6,152	4,593
	Net change in non-cash working capital items, net of acquisitions and disposals of subsidiaries		(1,034)	423	(522)	(1,429)
			1,604	2,529	5,630	3,164
Financing activities
	Increase of long-term debt		490	-	1,990	1,000
	Repayment of long-term debt		(657)	(512)	(1,757)	(1,452)
	Dividends paid to the Company's shareholders		-	-	(1,250)	-
	Dividends paid to non-controlling interest		(5)	-	(5)	-
	Redemption of non-controlling interest		(5)	-	(5)	-
			(177)	(512)	(1,027)	(452)
Investing activities
	Business combination and acquisition of assets, net of cash and cash equivalents acquired		-	(295)	(881)	(736)
	Investments in joint ventures and associates		181	-	181	(1,387)
	Change in notes receivable		37	(136)	39	(274)
	Acquisitions of property, plant and equipment		(447)	(391)	(3,922)	(1,262)
	Proceeds from disposals of property, plant and equipment		4	2	9	10
	Acquisitions of intangible assets		-	-	(18)	-
			(225)	(820)	(4,592)	(3,649)
Increase (decrease) in cash and cash equivalents			1,202	1,197	11	(937)
Cash and cash equivalents, beginning of period			6,634	7,174	7,825	9,308
Cash and cash equivalents, end of period			7,836	8,371	7,836	8,371

 

 

 

 

SOURCE: Sportscene Group Inc.

Jean Bédard, Chairman of the Board, President and Chief Executive Officer
Josée Pépin, Vice-President, Finance
450-641-3011