Sportscene Group Inc.'s Results Further Improve in the 2nd Quarter

MONTREAL, April 17, 2014 /CNW Telbec/ - Management of SPORTSCENE GROUP INC. ("Sportscene" or "the Company") (TSXV: SPS.A) is pleased to announce that the Company's results continued to grow during the 13 and 26-week periods ended February 23, 2014.

For the second quarter, the Company's net earnings attributable to shareholders almost doubled to reach $842,000 or $0.20 per share (basic and diluted), compared with $431,000 or $0.11 per share in the same quarter of fiscal 2013. Year-to-date net earnings for the first half of fiscal 2014 thus amounted to $1.6 million or $0.39 per share, up 53.3% over the same period in 2013. Sportscene attributes this growth to the good performance of the La Cage aux Sports network and to the success of the sporting events held in the second quarter.

Sportscene's revenues grew by 8.3% in the second quarter and 3.9% in the first six months of the year, amounting to $18.1 million and $35.5 million respectively, thanks mainly to the performance of the La Cage aux Sports network combined with the acquisition of additional interests in certain Cages over the past 12 months. La Cage aux Sports' total network sales ⁽¹⁾ amounted to $27.1 million in the second quarter and $54.8 million for the first half, posting increases of 2.4% and 5.0% respectively over the same periods of the previous fiscal year.

These increases are explained by the solid organic growth in La Cage aux Sports' total network sales during the first quarter, due primarily to a much more favourable sporting environment than a year earlier, coupled with the added contribution of the new Boucherville Cage as of the second quarter. The inauguration of this Cage on November 8, 2013 paved the way for the rollout of La Cage aux Sports' renewed concept. During the second quarter, a second Cage was converted to the new design, which will be gradually implemented network-wide in upcoming quarters. The new unit continues to exert strong attraction among customers and its performance has thus far met management's expectations.

Sportscene Group remains well positioned financially to carry on its development and to consolidate its leadership in the entertainment-themed restaurant niche in Quebec. In the first half of the year, the Company notably generated cash flows from operating activities of $4.1 million, enabling it to invest $4.4 million in its development and to pay $1.3 million in shareholder dividends while retaining a comfortable debt ratio.

"We are pleased to see that all of Sportscene's performance indicators are evolving in line with our objectives and we are confident that this trend will hold in the next few quarters," commented President and Chief Executive Officer Jean Bédard. "In the coming months, we will continue to focus on enhancing our restaurant offering, optimizing our operations, fine-tuning the La Cage aux Sports concept and constantly developing our technological platform. In doing so, we will ensure that fiscal 2014 — which marks La Cage aux Sports' 30^th anniversary — stands out in the Company's history as a year of innovation and renewal and the springboard toward a new growth era."

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 52 "Cages", 41 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.

For further information on 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 26-week periods ended February 23, 2014, available on SEDAR.

(1)	Total network sales are the aggregate sales achieved by all La Cage aux Sports franchised, joint venture and corporate restaurants.
(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 Comprehensive Income
(in thousands of Canadian dollars, except for earnings per share and number of outstanding shares)
(unaudited) 

		13 weeks ended		26 weeks ended
		February 23,	February 24,	February 23,	February 24,
		2014	2013	2014	2013
		$	$	$	$
			(Restated)		(Restated)
Revenues		18,071	16,687	35,491	34,170
Cost of sales		6,144	5,698	11,076	10,831
Selling and administrative expenses, excluding amortization		10,250	9,172	20,788	19,820
Other losses (gains)		7	17	13	(160)
Earnings before financial expenses, amortization and income tax		1,670	1,800	3,614	3,679
Amortization		940	914	1,843	1,821
Financial expenses		133	147	276	327
Share of net earnings of joint ventures and associates		(420)	108	(552)	50
Earnings before income tax expenses		1,017	631	2,047	1,481
Income tax expenses		169	200	410	413
Net earnings and comprehensive income		848	431	1,637	1,068
Net earnings and comprehensive income attributable to:
The Company's shareholders		842	435	1,629	1,079
Non-controlling interests		6	(4)	8	(11)
Net earnings and comprehensive income		848	431	1,637	1,068
Earnings per share (in $):
	Basic	0.20	0.11	0.39	0.26
	Diluted	0.20	0.11	0.39	0.26
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) 

		February 23,	February 24,	August 25,	August 27,
		2014	2013	2013	2012
		$	$	$	$
Assets			(Restated)	(Restated)	(Restated)
Current assets
	Cash and cash equivalents	6,634	7,174	7,825	9,308
	Accounts receivable	4,674	4,868	4,175	3,377
	Income tax receivable	215	295	423	309
	Inventories	2,307	1,351	1,486	1,394
	Prepaid expenses	745	346	401	302
	Current portion of notes receivable	4	86	22	282
Total current assets		14,579	14,120	14,332	14,972
Notes receivable		576	648	655	1,303
Property, plant and equipment		36,830	29,919	30,221	29,706
Intangible assets		743	668	647	698
Deferred tax asset		1,596	1,458	2,209	1,259
Investments in joint ventures and associates,accounted for using the equity method		6,476	6,635	6,585	5,119
Goodwill		2,792	2,770	2,792	2,406
Total assets		63,592	56,218	57,441	55,463
Liabilities and shareholders' equity
Current liabilities
	Accounts payable and accrued liabilities	8,335	6,755	6,816	7,957
	Income tax payable	162	10	80	176
	Deferred revenues and credits	1,580	1,523	1,292	818
	Current portion of long-term debt	2,395	2,122	2,109	1,904
Total current liabilities		12,472	10,410	10,297	10,855
Long-term debt		15,062	11,733	10,748	11,505
Deferred revenues and credits		1,179	1,383	1,273	1,490
Deferred tax liability		423	398	991	405
Total liabilities		29,136	23,924	23,309	24,255
Shareholders' equity
	Share capital	3,551	3,551	3,551	3,551
	Stock-based compensation reserve	330	278	299	260
	Retained earnings	30,273	28,167	29,980	27,088
Shareholders' equity attributable to the Company's shareholders		34,154	31,996	33,830	30,899
Non-controlling interests		302	298	302	309
Total shareholders' equity		34,456	32,294	34,132	31,208
Total liabilities and shareholders' equity		63,592	56,218	57,441	55,463

Interim Condensed Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)

			13 weeks ended		26 weeks ended
			February 23,	February 24,	February 23,	February 24,
			2014	2013	2014	2013
			$	$	$	$
				(Restated)		(Restated)
Operating activities
	Net earnings		848	431	1,637	1,068
	Adjustments to reconcile net earnings to cash flows from operating activities
		Loss on disposal of property, plantand equipment	7	17	13	33
		Gain on business combination achieved in stages	-	-	-	(193)
		Amortization of property, plant andequipment	935	901	1,826	1,793
		Amortization of intangible assets	5	13	17	28
		Share of net earnings of joint venturesand associates	(420)	108	(552)	50
		Dividends received from joint ventures and associates	120	31	420	31
		Stock-based compensation	19	9	31	18
		Financial expenses recognizedin net earnings	133	147	276	327
		Financial expenses paid	(150)	(155)	(290)	(332)
		Income tax expenses recognized in net earnings	169	200	410	413
		Income tax paid	26	(168)	(274)	(749)
			1,692	1,534	3,514	2,487
	Net change in non-cash working capital items,net of acquisitions and disposals ofsubsidiaries		1,143	(428)	512	(1,852)
			2,835	1,106	4,026	635
Financing activities
	Increase of long-term debt		-	-	1,500	1,000
	Repayment of long-term debt		(584)	(473)	(1,100)	(940)
	Dividends paid to the Company's shareholders		(1,250)	-	(1,250)
			(1,834)	(473)	(850)	60
Investing activities
	Business combination and acquisition of assets, net of cash and cash equivalents acquired		-	-	(881)	(441)
	Investments in joint ventures and associates		-	(637)	-	(1,387)
	Change in notes receivable		70	(72)	2	(138)
	Acquisitions of property, plant and equipment		(1,915)	(197)	(3,475)	(871)
	Proceeds from disposals of property,plant and equipment		-	-	5	8
	Acquisitions of intangible assets		-	-	(18)	-
			(1,845)	(906)	(4,367)	(2,829)
Decrease in cash and cash equivalents			(844)	(273)	(1,191)	(2,134)
Cash and cash equivalents, beginning of period			7,478	7,447	7,825	9,308
Cash and cash equivalents, end of period			6,634	7,174	6,634	7,174

 

SOURCE: Sportscene Group Inc.

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