Sportscene remains focused on its goal despite the current economic conditions

MONTREAL, Jan. 22, 2015 /CNW Telbec/ - At the Annual Meeting of Shareholders held this morning at the La Cage aux Sports restaurant in Boucherville, SPORTSCENE GROUP INC., ("Sportscene" or "the Company") (TSXV: SPS.A) reported its financial results for the first quarter of fiscal 2015, the 13-week period ended November 30, 2014. Affected by difficult economic conditions, the La Cage aux Sports network saw its total sales ⁽¹⁾ decline by 5.2% to amount to $26.3 million. This decrease is mainly attributable to lower average same-Cage sales ⁽²⁾.

Sportscene's revenues posted a slight decline of 1.0% to stand at $17.3 million, as the decrease in restaurant revenues was partially compensated by an increase in revenues from activities related to the renovation of Cages. Adjusted EBITDA ⁽³⁾ was down from $2.0 million during the first quarter of the previous fiscal year to $1.2 million this year, primarily as a result of lower average same-Cage sales and the upgrading of the menu. The Company therefore closed the first quarter of fiscal 2015 with net earnings attributable to shareholders of $25,000 or $0.01 per share (basic and diluted), compared with $787,000 or $0.19 per share for the same period of last year. 

Sportscene is currently rolling out its strategic plan aimed at positioning La Cage aux Sports for a new growth cycle through a series of in-depth enhancements. The current economic context prompts us to pursue the execution of this strategic plan, the highlight of which is to upgrade every aspect of the customers' experience. To that end, we undertook the following key initiatives:

• Introduction of a new interior design, which was inaugurated upon the opening of the Boucherville Cage. In recent months, four other restaurants have been transformed according to these new standards. The transformation will continue in 2015 pursuant to a well-established renovation plan.
• Complete upgrading of the menu, which is being deployed throughout the network.

"Considering the current business context and the costs associated with the implementation of our action plan, we remain cautious as to Sportscene's short-term financial outlook," indicated Jean Bédard, President and Chief Executive Officer of Sportscene. "However, we are confident that our ongoing strategy will pave the way for increased competitiveness and profitability over the medium and long term. In addition, Sportscene continues to benefit from a healthy financial position to carry out its global upgrading process."

New Director on the Board of Sportscene Group

Sportscene is pleased to announce the nomination of Annick Mongeau as a member of the Company's Board of Directors. Mrs. Mongeau has over 20 years of experience as a communication and public affairs specialist. She currently manages her own communications agency and is also a member of the Board of Directors of Groupe TVA Inc.

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 majority-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.

Notes:
The following measures used by the Company are not performance measures consistent with the International Financial Reporting Standards ("IFRS"):

(1)	Total network sales are the aggregate sales achieved by all La Cage aux Sports franchised, partnership-owned and corporate restaurants.
(2)	Average same-Cage sales isolate the impact of restaurant openings and closures to assess the actual trend in restaurant sales.
(3)	In Sportscene's statement of comprehensive income, adjusted EBITDA corresponds to "Earnings before financial expenses, amortization, share of earnings of joint ventures and associates and income taxes", from which other gains and losses are excluded.

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-week period ended November 30, 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
		November 30,	November 24,
		2014	2013
		$	$
Revenues		17,342	17,521
Cost of sales		5,633	5,033
Selling and administrative expenses, excluding amortization		10,522	10,538
Loss on disposal of property, plant and equipment		10	6
Earnings before financial expenses, amortization, share of net earnings of joint ventures and associates and income tax		1,177	1,944
Amortization		981	903
Financial expenses		163	143
Share of net earnings of joint ventures and associates		19	(132)
		1,163	914
Earnings before income tax expenses		14	1,030
Income tax expenses		9	241
Net earnings and comprehensive income		5	789
Net earnings and comprehensive income attributable to:
The Company's shareholders		25	787
Non-controlling interests		(20)	2
Net earnings and comprehensive income		5	789
Earnings per share (in $):
	Basic	0.01	0.19
	Diluted	0.01	0.19
Weighted average number of outstanding Class A shares (in thousands):
	Basic	4,165	4,165
	Diluted	4,221	4,231

Interim Condensed Consolidated Statements of Financial Position (in thousands of Canadian dollars) (unaudited)
		November 30,	August 31,
		2014	2014
		$	$
Assets
Current assets
	Cash and cash equivalents	6,169	8,528
	Accounts receivable	5,233	3,722
	Income tax receivable	687	568
	Inventories	2,073	2,041
	Prepaid expenses	468	336
Total current assets		14,630	15,195
Notes receivable		1,607	1,514
Property, plant and equipment		36,107	36,046
Intangible assets		730	719
Deferred tax asset		1,486	1,783
Investments in joint ventures and associates		4,058	4,137
Goodwill		2,792	2,792
Total assets		61,410	62,186
Liabilities and shareholders' equity
Current liabilities
	Accounts payable and accrued liabilities	8,719	7,560
	Income tax payable	158	216
	Deferred revenues and credits	788	872
	Current portion of long-term debt	2,643	2,052
Total current liabilities		12,308	10,700
Long-term debt		12,613	14,531
Deferred revenues and credits		995	1,078
Deferred tax liability		765	1,168
Total liabilities		26,681	27,477
Shareholders' equity
	Share capital	3,551	3,551
	Stock-based compensation reserve	383	368
	Retained earnings	30,531	30,506
Shareholders' equity attributable to the Company's shareholders		34,465	34,425
Non-controlling interests		264	284
Total shareholders' equity		34,729	34,709
Commitments, guarantees and contingencies
Total liabilities and shareholders' equity		61,410	62,186

Interim Condensed Consolidated Statements of Cash Flows (in thousands of Canadian dollars) (unaudited)
		13 weeks ended
			November 30,	November 24,
			2014	2013
			$	$
Operating activities
	Net earnings and comprehensive income		5	789
	Adjustments to reconcile net earnings to cash flows from operating activities:
		Loss on disposal of property, plant and equipment	10	6
		Amortization of property, plant and equipment	967	891
		Amortization of intangible assets	14	12
		Share of net earnings of joint ventures and associates	19	(132)
		Dividends received from joint ventures and associates	125	300
		Stock-based compensation	15	12
		Financial expenses recognized in net earnings	163	143
		Interest paid	(157)	(140)
		Income tax expenses recognized in net earnings	9	241
		Income tax paid	(292)	(300)
			878	1,822
	Net change in non-cash working capital items, net of acquisitions and disposals of subsidiaries		(1,078)	(631)
			(200)	1,191
Financing activities
	Increase of long-term debt		800	1,500
	Repayment of long-term debt		(2,133)	(516)
			(1,333)	984
Investing activities
	Acquisition of assets, net of cash and cash equivalents acquired		-	(881)
	Investments in joint ventures and associates		(65)	-
	Change in notes receivable		(93)	(68)
	Acquisitions of property, plant and equipment		(651)	(1,560)
	Proceeds from disposals of property, plant and equipment		8	5
	Acquisitions of intangible assets		(25)	(18)
			(826)	(2,522)
Decrease in cash and cash equivalents			(2,359)	(347)
Cash and cash equivalents, beginning of period			8,528	7,825
Cash and cash equivalents, end of period			6,169	7,478

SOURCE Sportscene Group Inc.

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