Broadview Press Inc.

Broadview Press Inc.

May 24, 2006 09:00 ET

Broadview Press Gross Sales Up in Q1 2006

CALGARY, ALBERTA--(CCNMatthews - May 24, 2006) -

Net Results Down from Previous Year

First Quarter Results at March 31, 2006

(All figures are in Canadian dollars unless otherwise stated.)

Broadview Press Inc. (TSX VENTURE:BDP) reports a net loss in Q1 2006 of $235,154 (Q1 2005 net loss of $145,162). This represents a loss per share of $0.02 (Q1 2005 net loss of $0.01). The increased loss is due primarily to two factors: an increased allowance for sales returns compared with Q1 2005, which the company believes will help its Q2 2006 performance versus Q2 2005, and increased operating expenses.

Net sales for Q1 2006 were $374,995 (Q1 2005 = $466,173). The chart below shows that gross sales are actually up by 7.5 per cent, and that the decrease in net sales is primarily because the company is allowing for significantly more returns in Q2 2006 than it did in Q2 2005.

2006 2005
--------- ---------
Actual gross sales for Q1 $674,095 $627,335
Projected sales returns in Q2 (319,958) (133,759)
Adjustment of Q4 projection 20,858 (27,403)
--------- ---------
Net sales (in CDN $) $374,995 $466,173

The main reason for the increased allowance is that the company, in consultation with its auditors, has improved the model by which it predicts future returns. Under the previous model, the company's allowance at the end of Q1 2005 turned out to be significantly insufficient, and the resulting correction created a large downward adjustment of net sales at Q2 2005; by improving the model by which it projects future sales returns, the company is hoping to avoid a large adjustment not only at Q2 2006, but for all future quarters.

The company has been investing in new titles which are expected to fuel revenue growth in late 2006 and in 2007. Related operating expenses in Q1 2006 were $631,409, up 23 per cent from $513,392 in Q1 2005. Of the $117,692 increase, $82,679 (or 70 per cent) has gone to sales and marketing expenditures. The bulk of annual sales occur in the company's third and fourth quarters. The company will continue to closely monitor operating expenses against its budget throughout the fiscal year.

Broadview's quarterly financial statements, as well as its management discussion and analysis of these results, can be read by visiting Alternately, please contact Craig Lawson (see below) to have these documents sent to you directly.

Broadview is an internationally-oriented, Canadian-based publisher of books aimed at the university and college textbook market.

Forward-Looking Statements:

This document contains forward-looking statements involving Broadview's expectations about future financial results and other matters. These statements reflect management's current forecast of certain aspects of Broadview's future business. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical results or current expectations. The words "plan," "expect," "believe," "intent," "anticipate," "forecast," "target," "estimate," "should," "will" and similar expressions identify forward-looking statements. Risk factors include shifts in consumer demand, product schedules, product mix, competitive products and pricing, technological shifts, foreign exchange changes and other variables. Readers are referred to Broadview's other public documents for further discussions of risks and uncertainties. The factors underlying forecasts are dynamic and subject to change. As a result, forecasts speak only as of the date they are given and do not necessarily reflect Broadview's outlook at any other point in time.

Closing Share Price: $0.13 (at March 31, 2006)

Shares issued: 11,081,107 (at March 31, 2006)

Contact Information

  • Broadview Press Inc.
    Michael Harrison
    President and CEO
    (519) 837-0915 (Guelph, ON)
    Broadview Press Inc.
    Craig Lawson
    Corporate Affairs Coordinator
    (403) 232-6863 (Calgary, AB)