Groupe Bikini Village inc.
TSX : GBV

Groupe Bikini Village inc.

September 09, 2010 15:40 ET

Groupe Bikini Village Inc. Increases its Comparable Sales by 28% and Delivers Strong Profits in its Second Quarter of 2010

SAINTE-JULIE, QUEBEC--(Marketwire - Sept. 9, 2010) - Groupe Bikini Village inc. (TSX:GBV) ("Groupe Bikini Village" or the "Company") today reported strong results in its second quarter of 2010. Highlights included a 25% increase in sales volume; an overall increase in gross margins; continued tight control over expenses; and a disciplined approach to inventory management, which led to a further reduction of the Company's level of inventory. 

"The second quarter of 2010 offered a return to normal conditions for Groupe Bikini Village, after its results in the comparable quarter of 2009 were affected by the economic recession; unseasonable weather conditions; and the H1N1 influenza virus, which had a chilling effect on its customers," said President and CEO Yves Simard.

"As we reported our results in that difficult quarter last year, we explained how our strategies looked beyond the challenges of the times, and aimed to prepare the Company for a strong performance once outside factors turned back in our favour. Now, with these adverse conditions behind us, our performance in the second quarter of this year has validated the appropriateness of our sustained investments of the last three years in retail renovations, upgraded systems and supply chain. We are – and will remain – committed to focusing on operational excellence to deliver increased sales and profitability." 

Second quarter and first half of 2010 results

Reflecting the Company's response to the improved sales conditions in the market, net sales for the second quarter and the six-month period ended July 31, 2010 were $14.2 million and $24.3 million respectively, compared to $11.4 million and $21.3 million in the corresponding periods of the previous year. Comparable sales, which is the comparison of the sales from the same number of stores from year to year, increased by 27.9% for the quarter and 13.9% for the six-month period.

Groupe Bikini Village delivered EBITDA(1) of $2.2 million in the second quarter of 2010 and $2.5 million in the first six-month period, compared to EBITDA(1) of $332,000 for the second quarter of 2009 and $581,000 for the first six-month period of the previous year. The $1.9 million increase in operating income in the second quarter of 2010 compared to the second quarter of 2009 was primarily the result of increased gross margin on sales attributable to both the increase in sales volume and our strategy to focus on full-price selling and to tightly manage inventories.

For the quarter ended July 31, 2010, the Company's net earnings was $1.2 million ($0.01 per share, basic and diluted), as compared to net loss of $221,000 (nil per share, basic and diluted) for the same quarter in the previous year. For the six-month period ended on that date, net earnings totalled $957,000 ($0.01 per share, basic and diluted), as compared to net loss of $479,000 (nil per share, basic and diluted) in the same period in 2009.

Outlook(2)

"The patient and disciplined approach Groupe Bikini Village initiated three years ago has made us more competitive, and we are confident and enthusiastic as we look ahead. This approach will remain central to our activities in the months to come, as we continue to focus on sales and profitability," says Simard.

"We have also undertaken activities under our capital strategy which will provide increased latitude to build shareholder value, either by creating our own opportunities or by taking advantage of other strategic alternatives," said Simard. At the Company's annual shareholders' meeting on June 11, 2010, a resolution was approved to authorize the directors to consolidate Groupe Bikini Village's common shares within a range of one new share for every 100 shares currently outstanding to one new share for every 150 shares currently outstanding. The consolidation ratio has now been determined to be one new share for every 125 shares currently outstanding and should take effect on or about September 27, 2010. In addition, on August 17, 2010, the Company completed its previously-announced rights offering and concurrent private placement, raising gross proceeds of $2.1 million. 

"Between the improved balance sheet which resulted from our second quarter performance and successful rights offering and private placement, Groupe Bikini Village enters the second half of the year with a stronger cash position. We look forward to employing these strengths and the flexibility they afford us, to further our efforts in building shareholder value," said Simard.

Groupe Bikini Village inc.'s full second quarter 2010 report, as well as previous shareholder reports and other information of interest to investors, is available on SEDAR at www.sedar.com, and on the Company's website at www.bikinivillage.com.

About Groupe Bikini Village

Groupe Bikini Village inc., serving Canadians for almost a quarter-century, is a leading swimwear retailer with a network of new and renovated boutiques across Eastern Canada. In its bright and inviting stores with comfortable change rooms and knowledgeable staff, Groupe Bikini Village helps its customers choose from among Canada's widest selection of swimsuits, beach accessories, and cruisewear, in the most popular brands the industry has to offer and in styles to suit every figure. The newest addition to its retail network, Lanaï, offers the most popular clothing brands for young women in Brossard, Quebec. Headquartered in Sainte-Julie, Quebec, Groupe Bikini Village inc. operates 60 stores and employs approximately 500 people; its securities trade on the Toronto Stock Exchange under the stock symbol GBV. For more information about Groupe Bikini Village inc., please visit our website at www.bikinivillage.com.

Notes

(1) The term EBITDA (earnings before interest, taxes, depreciation, amortization and reorganization fees and unusual items) does not have any standardized meaning prescribed by Canadian Generally Accepted Accounting Principles ("GAAP") and may not be comparable to similar measures presented by other companies. Please refer to the section of Groupe Bikini Village inc.'s MD&A for the six-month period ended July 31, 2010, dated September 9, 2010, entitled "Non-GAAP Financial Measures". It is available on SEDAR at www.sedar.com.

(2) To be read in conjunction with "Forward-looking Statements" below.

Forward-looking statements

This news release contains certain forward-looking statements concerning Groupe Bikini Village inc.'s future operations, economic performance, financial conditions and financing plans. These statements are based on certain assumptions and analyses made by management in light of their experience and their perception of historical trends, current conditions and expected future developments, as well as other factors they believe are appropriate under the circumstances. However, whether actual results and developments will conform to management's expectations and predictions is subject to a number of risks, uncertainties and assumptions. Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements, and there can be no assurance that the results or developments anticipated by management will be realized or, even if substantially realized, that they will have the expected consequences or effects on the Company. Management undertakes no obligation and does not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable law.

GROUPE BIKINI VILLAGE INC.
STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands of dollars except per share amounts)
(unautited)
  Three months ended   Six months ended  
  July 31,
2010
August 1,
2009
  July 31,
2010
August 1,
2009
 
    Restated(3)     Restated(3)  
             
Operating revenue $ 14,230 $ 11,408   $ 24,258 $ 21,322  
                     
Cost of goods sold, operating and administrative expenses   12,018   11,076     21,757   20,741  
                     
                     
Operating earnings - EBITDA(1)   2,212   332     2,501   581  
                     
Interest   170   196     349   389  
                     
Amortization   370   401     763   786  
                     
Earnings (loss) before income taxes   1,672   (265 )   1,389   (594 )
                     
Income taxes (recovery)   477   (44 )   432   (115 )
                     
                     
NET EARNINGS (NET LOSS) AND COMPREHENSIVE INCOME (LOSS) $ 1,195 $ (221 ) $ 957 $ (479 )
                     
                     
                     
EARNINGS (LOSS) PER SHARE, basic and diluted   0.01   -     0.01   -  
                     
                     
                     
Weighted average number of shares outstanding, basic and diluted   167,678,115   167,678,115     167,678,115   167,678,115  
                     
(3) Certain figures for the quarter and year ended August 1, 2009 were restated as a result of the Company's adoption of CICA Section 3064 - Goodwill and Intangible Assets effective February 1, 2009.

Contact Information

  • Groupe Bikini Village Inc.
    Yves Simard
    President and Chief Executive Officer
    450-449-1310 ext 4797
    ysimard@bikinivillage.com