Groupe Bikini Village inc.
TSX : GBV

Groupe Bikini Village inc.

June 12, 2014 15:02 ET

Groupe Bikini Village inc. Reports its Results for the First Quarter of 2014

SAINTE-JULIE, QUEBEC--(Marketwired - June 12, 2014) - Groupe Bikini Village inc. (TSX:GBV) ("Groupe Bikini Village" or the "Corporation") today reported its results for the first quarter of 2014. Despite lower sales, the Corporation decreases its operating losses (EBITDA1), achieved through tight controls on both operating and administrative expenses, and proactive management of inventory.

2014 first quarter results

Net sales for the first quarter, which ended May 3, 2014, were $8 million, compared to $8.5 million in the corresponding quarter of the previous year. Comparable sales, which compares sales from the same number of stores year-over-year, decreased by 4.5% for the quarter. Management attributed the decrease in net sales to lower consumer demand driven by a harsh and prolonged winter season, and a retail sector environment that continues to be challenging.

The Corporation's proactive efforts to reduce both selling expenses and overall expenses through implementation of its reorganization plan resulted in a decrease in first-quarter operating loss (EBITDA1) as compared to the similar period in the previous year. Although sales volumes and gross margins decreased, the Corporation reduced its operating loss to $610,000 in the first quarter of 2014 from $745,000 in the first quarter of 2013.

For the quarter ended May 3, 2014, the Corporation recorded a $927,000 loss before income tax recovery, as compared to loss before income tax recovery of $1.2 million for the same period in the previous year.

The Corporation's first-quarter net loss was $927,000 (($0.48) per share, basic and diluted) in 2014, as compared to net loss of $859,000 (($0.45) per share, basic and diluted) for the same quarter in the previous year.

Outlook 2

"While our market remains challenging, highly-competitive and price-sensitive, we are working on initiatives to return the Corporation to profitability. Management focuses the company's resources and energies on ways to generate revenues and to reduce costs: for example, we have re-launched our website at bikinivillage.com, and will shortly be able to leverage its revenue-generating potential through e-commerce" said Scott Leckie, Chairman of the Board of Groupe Bikini Village inc..

"On other fronts, we are implementing new tactics to stimulate sales, and continue to work toward alternative new ways to improve shareholder value. While our market environment will continue to offer challenges and our approaches will address a number of different fronts, our focus remains consistent: returning the company to profitability. The Board of Directors' also continues its search for a new President," he said.

"As reported previously, the Toronto Stock Exchange informed the Corporation on March 26, 2014 that its common shares were under review with respect to meeting the continued listing requirements. At that time, the Corporation has been granted 120 days in which to regain compliance with these requirements, pursuant to the remedial review process of the Toronto Stock Exchange. The Corporation continues to evaluate its options to address the issue within the established timeline," also indicated Mr. Leckie.

Groupe Bikini Village inc.'s full First-quarter 2014 report, as well as previous shareholder reports and other information of interest to investors, are 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 leader in the retail sale of beachwear products, with a network of 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 and cruise wear and accessories, 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 operates 54 stores and employs approximately 400 people; its securities trade on the Toronto Stock Exchange under the stock symbol GBV. For more information about Groupe Bikini Village, please visit our website at www.bikinivillage.com.

Notes

1 The term EBITDA (earnings before net finance costs, income taxes, depreciation, amortization, net impairment loss, 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 three-month period ended May 3, 2014, dated June 12, 2014, 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.
STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS
(in thousands of Canadian dollars, except amounts related to shares)
(unaudited)
Three months ended
May 3, 2014 May 4, 2013
Revenues$8,025 $8,478
Cost of goods sold$3,778 $3,893
Gross profit 4,247 4,585
Operating and administrative expenses 5,096 5,691
Net finance costs 78 66
Loss before income tax recovery (927) (1,172)
Income tax recovery - (313)
NET LOSS AND COMPREHENSIVE LOSS (1)$(927) $(859)
LOSS PER SHARE
Basic and diluted (0.48) (0.45)
Weighted average number of oustanding shares
Basic and diluted 1,912,230 1,912,230
(1) A reconciliation of net loss and comprehensive loss to earning before interest, taxes, depreciation and amortization ("EBITDA") is as follows:
Net loss and comprehensive loss$(927) $(859)
Income tax recovery - (313)
Net finance costs 78 66
Depreciation and amortization of capital and intangible assets 239 361
EBITDA$(610) $(745)

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