Benvest New Look Income Fund

Benvest New Look Income Fund

March 26, 2007 11:40 ET

Benvest New Look Income Fund Reports: Increases in EBITDA for Fourth Quarter 2006 of 48% and for the Full Year of 37%

MONTREAL, QUEBEC--(CCNMatthews - March 26, 2007) - Benvest New Look Income Fund (TSX:BCI.UN). For the fourth quarter of 2006, revenues increased 14.1% to $13.3 million while EBITDA(1) increased 48.4% to $1.9 million compared with last year. Comparable stores revenues rose 2.7% compared with last year, while new stores revenues and other income increased total revenues by 11.4%.

For the year 2006, revenues rose 15.0% to $49.9 million while EBITDA(1) rose 37.4% to $7.5 million compared with the 12-month period ended December 31, 2005(2). Comparable stores revenues were up 3.2% while new stores revenues increased total revenues by 11.8% compared with last year.

Net earnings from the eye care segment in the fourth quarter and year were $916,000 (or $0.093 per diluted unit) and $3.5 million (or $0.356 per diluted unit) respectively, compared with $554,000 (or $0.057 per diluted unit) and $2.4 million (or $0.246 per diluted unit) for the corresponding periods of last year.

Net earnings from the eye care segment increased 65% in the fourth quarter and 47% for the year.

In the fourth quarter, a provision of $3.7 million and a reversal of $322,000 of interest accrued in 2006 were recorded with respect to the loans and advances to The Fitness Company, reducing their book value to nil reflecting its continuing negative outlook. The book value of the equity investment in this non-core asset held for sale had been reduced to nil last year.

Net losses for the fourth quarter and the year were respectively $2.9 million and $112,000 (or $0.295 and $0.012 per diluted unit), compared with net losses of $2.3 million and $292,000 (or $0.243 and $0.031 per diluted unit) for the corresponding periods of last year. The loss in 2006 was due to the aforementioned provision and reversal of accrued interest regarding the remaining non-core portfolio asset held for sale.

During 2006, New Look made strong progress in operations. Eight new stores were opened: one in the Greater Quebec City, two in Ottawa and five in the Greater Montreal. The total number of stores at December 31st 2006 was 52 compared to 44 a year earlier. New Look has opened one additional store since year-end. Overall operating efficiency improved, as EBITDA(1) , expressed as a percentage of revenues, increased to 14.6% compared with 11.2% the same period last year and to 15.0% for the year compared with 12.5% last year.

In October 2006, the annualized monthly distribution of the Fund was increased to $0.60 from $0.55 per unit, the third increase since the inception of the Fund in May 2005. The aforementioned provision and reversal will not impact monthly distributions.

"We achieved record sales, EBITDA and net earnings from the eye care segment in 2006 as a result of the expansion of our chain and the delivery to our customers of high quality value added services. We are benefiting from economies of scale as administrative and distribution costs are decreasing as a percentage to revenues while the contribution of our laboratory is increasing. The contribution of our many new stores should continue to improve as optical stores typically require three to five years to achieve maturity." stated C. Emmett Pearson, President & Chief Executive Officer of New Look.


Consolidated Earnings

In thousands of dollars, except per unit or share amount
3 months ended 12 months ended
December 31, December 31,
2006 2005 2006 2005
(Unaudited) (Unaudited) (Audited) (Unaudited)
$ $ $ $
Revenues from eye care
Revenues 13,168 11,518 49,438 42,930
Fees and rent 112 126 445 450
13,280 11,644 49,883 43,380
Cost of goods sold,
operating, selling and
administration expenses 11,346 10,341 42,412 37,941

EBITDA(1) 1,934 1,303 7,471 5,439
As % of total revenues 14.6% 11.2% 15.0% 12.5%
Amortization 868 632 3,024 2,097
Financial expenses, net of
interest revenues 430 2 374 (7)
1,298 634 3,398 2,090

Earnings before the
following items 636 669 4,073 3,349

Gain (loss) on foreign
currency translation 106 (99) 37 23

Income trust expenses (1,192)

Gain (loss) related to
portfolio investment held
for sale (3,659) (2,903) (3,659) (2,903)
Earnings before income
taxes and non
controlling interest (2,917) (2,333) 451 (723)

Income taxes (recovery) (88) (7) 521 (444)

Earnings before
non-controlling interest (2,829) (2,326) (70) (279)
Non-controlling interest 22 8 42 13
Net earnings (loss) (2,851) (2,334) (112) (292)

Segmented information(3)
Net earnings from eye care 916 554 3,485 2,363
Net loss from other segment (3,767) (2,889) (3,597) (2,655)
(2,851) (2,334) (112) (292)

Diluted net earnings (loss)
per unit or share
Eye care 0.093 0.057 0.356 0.246
All segments (0.295) (0.243) (0.012) (0.031)

(1) EBITDA refers to consolidated earnings before amortization, interest income and expenses, income trust expenses, gain and loss on foreign currency translation, income taxes and non-controlling interest. EBITDA is not a recognized measure under Canadian generally accepted accounting principles ("GAAP") and may not be comparable to similar measures used by other companies. The Fund believes it is a useful financial metric as it assists in determining the ability to generate cash from operations.

(2) Because the fiscal year ended December 31, 2006 has 12 months while the previous one had only 8 months, the data in this press release is compared with the unaudited data for the 12-month period ended December 31, 2005.

(3) The Fund has two reportable segments: eye care products and services, and other. The other segment relates to the remaining portfolio investment held for sale and the escrowed proceeds from the sale of a portfolio investment.

On May 1, 2005, Benvest Capital Inc. was converted into an income trust named the Benvest New Look Income Fund, the purpose of which is to hold securities of New Look Eyewear Inc. This subsidiary is a leading enterprise in the eye care industry in Eastern Canada, with growth opportunities based on demographic trends and the consolidation of the industry in Canada. As of March 1st, 2007, 5,779,795 units of the Fund were issued and outstanding. In addition, 3,870,404 exchangeable shares (on a consolidated basis) of the subsidiary were also issued and outstanding. These shares, which are not listed or freely tradable, have been exchangeable on a one-for-one basis into units of the Fund since May 1st, 2006.

This press release may contain certain forward-looking statements that reflect the current views and / or expectations of Benvest New Look Income Fund with respect to its performance, business, and future events. Such statements are subject to a number of risks, uncertainties, and assumptions. Actual results and events may vary.

Contact Information

  • Benvest New Look Income Fund
    Lise Melanson
    514-877-4299, ext. 2234