Groupe Bikini Village inc.
TSX : GBV

Groupe Bikini Village inc.

September 12, 2013 15:45 ET

Groupe Bikini Village inc. Reports its Results for the Second Quarter of 2013

SAINTE-JULIE, QUEBEC--(Marketwired - Sept. 12, 2013) - In the second quarter of 2013, Groupe Bikini Village inc. (TSX:GBV) ("Groupe Bikini Village" or the "Corporation")'s sales declined compared to the second quarter of 2012. Market conditions remained difficult during the quarter, despite a favourable shift in the timing of the quarter caused by the 53rd week in the Corporation's fiscal 2012.

2013 second quarter and first six-month period results

Net sales for the second quarter and the first six-month period of fiscal 2013 were $11.4 million and $19.9 million, respectively, compared to $13.6 million and $23.3 million in the corresponding periods the previous year. Sales decreased 14.7% in the first half of 2013. Due to the 53rd week in fiscal 2012, the comparable sales results (which compares sales from the same number of stores year-over-year) for the second quarter and the first half of fiscal 2013 are compared to 13- and 26-week periods ending August 4, 2012 as opposed to July 28, 2012. Comparable sales, which compare the sales from the same number of stores year-over-year, decreased by 18.8% for the quarter and 13.4% for the six-month period, due to difficult market conditions for a swimwear retailer - in particular, unfavourable weather conditions and aggressive competition.

The Corporation reports an operating margin (EBITDA(1)) for the second quarter of $256,000 and an operating loss (EBITDA(1)) of $489,000 for the first six-month period of 2013, compared to operating margins (EBITDA(1)) of $1.5 million for the second quarter and $1.7 million for the first half of the previous year. The decrease in the operating margin is due to lower sales volume caused by unfavourable weather conditions, and a decrease in gross margins owing to increased promotional activities.

For the quarter ended August 3, 2013, the Corporation's net loss was $133,000 (($0.07) per share, basic and diluted), as compared to net earnings of $748,000 ($0.39 per share, basic and diluted) for the same quarter in the previous year. For the six-month period ended on that date, net loss totalled $992,000 (($0.52) per share, basic and diluted), as compared to net earnings of $448,000 ($0.23 per share, basic and diluted) in the same period in 2012.

Outlook (2)

As previously announced, Groupe Bikini Village has undertaken a change in its management; Chantal Létourneau has assumed the role of interim President and Chief Executive Officer. Ms. Létourneau will be supported by the Directors and management. "Our team will focus on revenue generation, efficiencies and implementing a customer focussed culture that will position the Corporation for future growth," said Scott Leckie, Chairman of the Board of Groupe Bikini Village inc.. Concurrent with these efforts, the Corporation will continue to seek out and leverage opportunities to create value for shareholders.

Groupe Bikini Village inc.'s full second quarter 2013 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.

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 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 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 55 stores and employs approximately 450 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 for the six-month period ended August 3, 2013, dated September 12, 2013, 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 EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(in thousands of Canadian dollars, except amounts related to shares)
(unaudited)
Three months ended Six months ended
August 3, 2013 July 28, 2012 August 3, 2013 July 28, 2012
Revenues $ 11,400 $ 13,587 $ 19,878 $ 23,307
Cost of goods sold 5,718 6,386 9,611 10,486
Gross profit 5,682 7,201 10,267 12,821
Operating and administrative expenses 5,793 6,011 11,484 11,860
Net finance costs 69 158 135 327
Earnings (loss) before income tax expense (recovery) (180 ) 1,032 (1,352 ) 634
Income tax expense (recovery) (47 ) 284 (360 ) 186
NET EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) (1) $ (133 ) $ 748 $ (992 ) $ 448
EARNINGS (LOSS) PER SHARE
Basic and diluted (0.07 ) 0.39 (0.52 ) 0.23
Weighted average number of oustanding shares
Basic 1,912,230 1,910,597 1,912,230 1,910,597
Diluted 1,912,230 1,937,987 1,912,230 1,932,361
(1) A reconciliation of net earnings (loss) and comprehensive income (loss) to earnings before interest, taxes, depreciation and amortization ("EBITDA") is as follows:
Net earnings (loss) and comprehensive income (loss) $ (133 ) $ 748 $ (992 ) $ 448
Income tax expense (recovery) (47 ) 284 (360 ) 186
Net finance costs 69 158 135 327
Depreciation and amortization of capital and intangible assets 367 352 728 690
EBITDA $ 256 $ 1,542 $ (489 ) $ 1,651

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