Groupe Bikini Village inc.
TSX : GBV

Groupe Bikini Village inc.

July 05, 2011 15:34 ET

Groupe Bikini Village inc. Reports Its Results for the First Quarter of 2011

SAINTE-JULIE, QUEBEC--(Marketwire - July 5, 2011) - Groupe Bikini Village inc. (TSX:GBV) ("Groupe Bikini Village" or the "Corporation") today reported the results of its first quarter of 2011, reflecting slight decreases in sales and gross margins; effective control over direct and indirect expenses; and market-responsive, dynamic inventory management.

First quarter 2011 results

Net sales for the first quarter of 2011 were $9.9 million, a decrease of 1.4% from the $10 million posted in the first quarter of last year – while comparable sales, which compares the sales from the same number of stores year-over-year, increased by 0.5% over the same period.

Groupe Bikini Village delivered EBITDA1 of $83,000, or 0.8%, in the first quarter of 2011, compared to EBITDA1 of $148,000, or 1.5%, in the comparable quarter last year. The $65,000 decrease in operating margin in the first quarter of 2011 compared to the first quarter of 2010 is due to a $162,000 reduction in marginal contribution on sales, partially offset by a $97,000 reduction in operating expenses. The reduced marginal contribution on sales was due to a slight decrease in sales volume as well as targeted promotional activities in April; the reduction in operating expenses was mostly related to reduced occupancy costs following the closure of underperforming stores, as we had planned in the retail networks optimization strategy we initiated four years ago.

Net loss for the for the three-month period ended April 30, 2011 was $353,000 (($0.18) per share*, basic and diluted), as compared to net loss of $338,000 (($0.25) per share*, basic and diluted) for the same quarter in the previous year.

All figures in this release, including including comparative data, are presented according to International Financial Reporting Standards ("IFRS").

Outlook 2

"Groupe Bikini Village inc. worked diligently to preserve its solid positions in both inventory and cash in the first quarter (the latter made possible by improved performance and our successful rights offering and private placement in 2010), despite a difficult retail environment that necessitated targeted promotional activities in April," said Yves Simard, President and CEO of Groupe Bikini Village inc. "Despite challenging conditions in May and June, in the months and quarters to come, we will be well-positioned to further improve profitability by executing on our proven strategies, paying particular attention to performance at all levels of the Corporation, and increasing our business volumes."

"Moving into the second quarter and throughout 2011, we look forward to strengthening our competitive position – and thereby building shareholder value – by leveraging the strengths that have enabled us to improve our retail offering and deliver solid results in the past. We will continue to explore strategic opportunities that present themselves, and to create opportunities of our own, as well," he said.

Groupe Bikini Village inc.'s full first quarter of 2011 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 Corporation's website at www.bikinivillage.com.

About Groupe Bikini Village

Groupe Bikini Village inc., serving Canadians for more than 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. Headquartered in Sainte-Julie, Quebec, Groupe Bikini Village inc. operates 59 stores and employs approximately 475 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

*Comparable data have been adjusted to take into account the 1 for 125 stock consolidation which took effect on September 30, 2010.

1 The term EBITDA (earnings before interest, taxes, depreciation, amortization, impairment, reorganization fees and unusual items) does not have any standardized meaning prescribed by Canadian Generally Accepted Accounting Principles applicable to publicly accountable enterprises ("GAAP") and may not be comparable to similarly-titled measures presented by other companies. Please refer to the section of Groupe Bikini Village inc.'s MD&A for the for the three-month period ended April 30, 2011, dated July 5, 2011, 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 Corporation. 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.
INTERIM CONDENSED STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS
(in thousands of Canadian dollars, except per share amounts)
(unaudited)
Three months ended
April 30, 2011 May 1, 2010
Revenues $ 9,890 $ 10,028
Cost of goods sold 4,265 4,241
Gross profit 5,625 5,787
Operating and administrative expenses 5,876 5,983
Net finance costs 216 257
Loss before income tax (1) (467 ) (453 )
Income tax recovery (114 ) (115 )
NET LOSS AND COMPREHENSIVE LOSS $ (353 ) $ (338 )
LOSS PER SHARE*, basic and diluted (0.18 ) (0.25 )
Weighted average number of oustanding shares *, basic and diluted 1,910,597 1,341,425
* Comparable data have been adjusted to take into account the 1 for 125 stock consolidation which took effect on September 30, 2010.
(1) A reconciliation of loss before income taxes to earnings before interest, taxes, depreciation and amortization ("EBITDA") is as follows :
Loss before income tax $ (467 ) $ (453 )
Net finance costs 216 257
Depreciation, amortization and impairment of capital
and intangible assets 334 344
EBITDA $ 83 $ 148

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