Benvest New Look Income Fund

Benvest New Look Income Fund

March 25, 2008 10:11 ET

Benvest New Look Income Fund's 2007 Annual Report-Record Revenues, Earnings and Growth

MONTREAL, QUEBEC--(Marketwire - March 25, 2008) - Benvest New Look Income Fund (TSX:BCI.UN) announced today that, for the twelve months ended December 31st, 2007 eye care operations generated $10 million of EBITDA(1), an increase of 33% over results of last year. Net earnings from eye care increased by $1.2 million or 34% compared to last year to reach $4.7 million.

Last year's investment in a new technology has allowed New Look to launch, in the beginning of 2007, revolutionary products known as Evolution HD™ and Ultra Evolution HD™ lenses. These lenses are custom made in our laboratory using direct surfacing computer technology. These value-added products have contributed to the increased EBITDA and net earnings.

New Look continued to focus on its expansion plan, examining potential sites or acquisitions to accelerate growth. The Company invested $7.4 million in capital expenditures, business acquisitions, working capital and start-up costs.

The highlights of investments can be summarized as follows:

- Addition of four stores in Montreal, including two by acquisition;

- Addition of one store in Ottawa;

- Major renovations to nine stores;

- Addition of robotized equipment in our laboratory;

- Updating of optical equipment in many stores; and

- First phase of implementation of an ERP system.

Benvest New Look Income Fund consolidated net earnings for the year reached $4.4 million (or $0.466 per diluted unit) in comparison of a loss of $0.1 million (or $0.012 per diluted unit) last year.

In October 2007, the annualized monthly distribution of the Fund was increased to $0.625 from $0.60 per unit, the fourth increase since the inception of the Fund in May 2005.

"These great results confirm New Look's strategic and leadership position in the eye care industry. Our attractive and renewed store network, our dedicated eye care staff and professionals and our merchandising offer to consumers are supported by a strong team in our laboratory equipped with the state-of-the-art direct surfacing computer technology. All these ingredients put us in an excellent position to increase our market share in future year" stated Martial Gagne, newly named President of New Look.

The fourth quarter of 2007

Revenues for the fourth quarter of 2007 increased by $675 or 5.1% compared with the corresponding quarter of 2006. However same store sales decreased by 1.7% and EBITDA decreased by $319 (16.3%) compared with the fourth quarter of 2006. This was primarily due to the results for the month of December, 2007 which was adversely impacted by inclement weather.

In the fourth quarter of 2007, New Look invested $1.2 million in capital expenditures in accordance with the plan of store renovations and development.

(1) Refer to Note 1 in the attached table for a definition of EBITDA.

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 February 29th, 2008, 5,798,461 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.

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. The statements contained in this release are not to be construed as tax advice and holders of units and exchangeable shares should seek their own independent tax advice.

Consolidated Earnings
In thousands of dollars, except
per unit amounts (Unaudited)
3 months ended 12 months ended
December 31, December 31,
2007 2006 2007 2006
$ $ $ $
Revenues from eye care 13,955 13,280 58,218 49,883
Cost of goods sold, operating, selling
and administration expenses 12,318 11,324 48,195 42,324
EBITDA(1) 1,637 1,956 10,023 7,559
Amortization 1,067 868 3,614 3,024
Financial expenses, net of
interest revenues 89 430 583 374
Equity-based compensation expense 125 4 134 37
1,281 1,302 4,331 3,435
Earnings before the following items 356 654 5,692 4,124

Net gain on foreign currency translation 2 106 126 37

Expenses and write-down of assets
related to portfolio investments (177) (3,677) (369) (3,710)
Earnings before income taxes and
non-controlling interest 181 (2,917) 5,449 451
Income taxes (recovery) (224) (88) 981 521
Earnings before non-controlling interest 405 (2,829) 4,468 (70)
Non-controlling interest 4 22 31 42
Net earnings (loss) 401 (2,851) 4,437 (112)
Segmented information(2)
Net earnings from eye care 558 829 4,654 3,485
Net loss from other segment (157) (3,680) (217) (3,597)
401 (2,851) 4,437 (112)
Diluted net earnings (loss)
per unit or share

Basic 0.057 (0.295) 0.475 (0.012)
Diluted 0.057 (0.295) 0.466 (0.012)

(1) EBITDA is defined as earnings before interest income and expenses,
income taxes, amortization and non- controlling interest. It excludes
any gain or loss on foreign currency translation (except if related to
cost of goods sold), net gains or losses related to portfolio
investments, and equity-based compensation expense. 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. Investors should be cautioned that EBITDA should
not be construed as an alternative to net earnings as determined in
accordance with GAAP. The Fund believes it is a useful financial metric
as it assists in determining the ability to generate cash from

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

Contact Information

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