Sportscene Group's Results and Achievements for the First Quarter Ended November 27, 2011

Expansion of La Cage aux Sports Network Drives Sales Growth

MONTREAL, Feb. 16, 2012 /CNW Telbec/ - During the Annual Shareholders' Meeting held this morning in Montreal, management of SPORTSCENE GROUP INC. ("Sportscene" or "the Company" SPS.A / TSX Venture Exchange), operator of LA CAGE AUX SPORTS restaurant chain, disclosed the financial results and highlights for the first quarter of fiscal 2012. It is to be noted that the first quarter's interim condensed consolidated financial statements and comparative figures reflect International Financial Reporting Standards ("IFRS") for the first time. A detailed description of Sportscene's changeover to IFRS is provided in its management's report and notes accompanying the interim condensed consolidated financial statements for the 13-week period ended November 27, 2011.

During this period, La Cage aux Sports' total network sales⁽¹⁾ grew by 1.9% to $28.1 million. The contribution of the new Cages inaugurated within the past year more than compensated for the decline in average same-Cage sales attributable to a sluggish economic climate and a less favourable sporting context than last year. Sportscene's consolidated revenues increased by 9.5% to $23.6 million. Conversely, EBITDA⁽¹⁾ amounted to $2.5 million, compared with $2.8 million for the same quarter of last year. Besides the pressures exerted on profit margins by challenging business conditions, the decrease in EBITDA can be partly explained by certain non-recurring costs incurred in connection with the opening of Cages and the expansion of the sports complex. Sportscene therefore closed the quarter with net earnings attributable to shareholders of $1.0 million or $0.24 per share, compared with $1.3 million or $0.31 per share the previous year.

Investments of some $2.8 million were made during the first quarter, mainly to expand the Company's sports complex and build new Cages. Two new La Cage aux Sports units were inaugurated in the first quarter, while construction work was also initiated on a third Cage that opened to the public in January 2012, being in the second quarter. Since the beginning of its 2011 fiscal year and up to now, Sportscene has invested more than $12 million in the expansion of its infrastructures, including the opening and reopening of a total of five Cages.

Finally operating activities provided cash flows of $2.4 million during the first quarter of fiscal 2012, contributing to maintain Sportscene' solid financial position, including short-term available cash⁽¹⁾ of $9.6 million and a total net debt ⁽¹⁾ to invested capital ratio of 12.2% as at November 27, 2011.

Declaration of a Dividend of $0.30 Per Share

Sportscene's Board of Directors today declared a dividend of $0.30 per Class A share. This dividend will be paid on March 22, 2012 to shareholders of record as at March 2, 2012.

Outlook

"We maintain a cautious approach since, in addition to a less favourable sporting climate, economic conditions continue to exert some pressure on the restaurant industry's customer traffic and selling prices," indicated Jean Bédard, President and Chief Executive Officer of Sportscene Group. "However, we are confident that the recent expansion of La Cage aux Sports' network will bring a positive contribution to the Company's performance and financial health for fiscal 2012 and will allow us to fully benefit from the eventual recovery of business conditions in our industry. Furthermore, in upcoming months, we will continue to constantly adapt La Cage aux Sports' offering to consumer needs and to promote the efficiency and profitability of all our operations, in order to foster average same-Cage sales and maintain sound profit margins."

Profile

In business since 1984, Sportscene Group Inc. operates Quebec's leading chain of sports-themed resto-bars: La Cage aux Sports. As of February 16, 2012, this banner comprises 52 "Cages", of which 39 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 outlets. Short-term available cash includes cash and cash equivalents, and temporary investments. The total net debt consists of the long-term debt, including its current portion, net of the short-term available cash.
(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 Comprehensive Income (in thousands of Canadian dollars, except for earnings per share and number of outstanding shares) (unaudited)
			13 weeks ended
		November 27,	November 28,
		2011	2010
		$	$
Revenues		23,607	21,562
Cost of sales		6,536	6,804
Employee benefits expenses		5,857	5,206
Selling and administrative expenses		8,761	6,711
Operating earnings		2,453	2,841
Interest on long-term debt		128	82
Other interest expenses		23	28
Amortization of property, plant and equipment		953	869
Amortization of intangible assets		24	28
Other (gains) losses		(31)	69
		1,097	1,076
Earnings before income tax		1,356	1,765
Income tax		367	519
Net earnings and comprehensive income		989	1,246
Net earnings and comprehensive income attributable to:
The Company's shareholders		992	1,280
Non-controlling interests		(3)	(34)
Net earnings and comprehensive income		989	1,246
Earnings per share (in $)
	Basic	$0.24	$0.31
	Diluted	$0.24	$0.31
Weighted average number of outstanding Class A
shares (in thousands):
	Basic	4,165	4,168
	Diluted	4,165	4,172

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	-	-	5	-	5	-	5
	Net earnings and comprehensive
	income	-	-	-	992	992	(3)	989
	Dividends paid to non-controlling interests	-	-	-	-	-	(35)	(35)
Balance on November 27, 2011		4,165	3,551	227	26,113	29,891	255	30,146
Balance on August 30, 2010		4,168	3,554	199	23,684	27,437	286	27,723
	Stock-based compensation	-	-	5	-	5	-	5
	Net earnings and comprehensive
	income	-	-	-	1,280	1,280	(34)	1,246
	Capital transactions with non-controlling interests	-	-	-	(6)	(6)	(15)	(21)
Balance on November 28, 2010		4,168	3,554	204	24,958	28,716	237	28,953

Interim Condensed Consolidated Statements of Financial Position (in thousands of Canadian dollars) (unaudited)
		As at November 27,	As at August 28,	As at August 30,
		2011	2011	2010
		$	$	$
Assets
Current assets
	Cash and cash equivalents	9,593	9,453	7,727
	Temporary investments	-	-	2,000
	Accounts receivable	6,495	4,498	3,658
	Income tax receivable	420	-	28
	Inventories	1,367	1,349	1,141
	Prepaid expenses	311	313	446
	Current portion of notes receivable	396	37	75
Total current assets		18,582	15,650	15,075
Notes receivable		692	893	989
Property, plant and equipment		34,005	32,112	27,667
Goodwill		2,702	2,696	2,208
Intangible assets		954	759	429
Deferred tax asset		1,532	1,525	1,356
Total assets		58,467	53,635	47,724
Liabilities and shareholders' equity
Current liabilities
	Accounts payable and accrued liabilities	10,944	7,704	6,651
	Income tax payable	-	32	-
	Deferred revenues and credits	1,345	1,190	1,270
	Current portion of long-term debt	2,111	1,953	1,471
Total current liabilities		14,400	10,879	9,392
Long-term debt		11,651	11,196	8,580
Deferred revenues and credits		1,712	1,815	1,423
Deferred tax liability		558	558	606
Total liabilities		28,321	24,448	20,001
Shareholders' equity
	Share capital	3,551	3,551	3,554
	Stock-based compensation reserve	227	222	199
	Retained earnings	26,113	25,121	23,684
Shareholders' equity attributable to the Company's
shareholders		29,891	28,894	27,437
Non-controlling interests		255	293	286
Total shareholders' equity		30,146	29,187	27,723
Total liabilities and shareholders' equity		58,467	53,635	47,724

Interim Condensed Consolidated Statements of Cash Flows (in thousands of Canadian dollars) (unaudited)
				13 weeks ended
			November 27,	November 28,
			2011	2010
			$	$
Operating activities:
	Net earnings		989	1,246
	Adjustments to reconcile net earnings to cash flows from operating activities:
		Loss on disposal of property, plant and equipment	30	27
		Loss on disposal of interests in joint ventures	-	26
		Gain on business combination achieved in stage	(3)	-
		Amortization of property, plant and equipment	953	869
		Amortization of intangible assets	24	28
		Stock-based compensation	5	5
		Interest expenses recognized in net earnings	151	110
		Interest paid	(155)	(87)
		Interest included in the cost of property, plant and equipment	11	8
		Income tax expenses recognized in net earnings	367	519
		Income tax paid	(825)	(506)
			1,547	2,245
	Net change in non-cash working capital items, net of acquisitions and disposals of subsidiaries and joint ventures		870	(993)
			2,417	1,252
Financing activities:
	Increase of long-term debt		801	150
	Repayment of long-term debt		(511)	(372)
	Dividends paid to non-controlling interests		(35)	-
			255	(222)
Investing activities:
	Acquisitions of subsidiaries and joint ventures, net of cash and cash equivalents acquired		(19)	(73)
	Proceeds from disposal of joint ventures, net of disposal of cash and cash equivalents		-	204
	Change in notes receivable		(158)	(96)
	Acquisitions of property, plant and equipment		(2,138)	(968)
	Proceeds from disposals of property, plant
	and equipment		1	5
	Acquisitions of intangible assets		(218)	(113)
			(2,532)	(1,041)
Increase (decrease) in cash and cash equivalents			140	(11)
Cash and cash equivalents, beginning of the period			9,453	7,727
Cash and cash equivalents, end of period			9,593	7,716

 

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