Groupe Bikini Village inc.
TSX : GBV

Groupe Bikini Village inc.

September 16, 2014 08:46 ET

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

SAINTE-JULIE, QUEBEC--(Marketwired - Sept. 16, 2014) - Groupe Bikini Village inc. (TSX:GBV) ("Groupe Bikini Village" or the "Corporation") today reported its results for the second quarter of 2014.

2014 second quarter results

Net sales for the second quarter, which ended August 2, 2014, were $9.9 million, compared to $11.4 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 6.7% for the quarter.

The Corporation's initiative to reduce selling, store and corporate expenses, elements of its reorganization plan, partly offset the impact resulting from the $1.5 million reduction in sales. The Corporation reports an operating margin (EBITDA(1)) of $14,000 in the second quarter of 2014 compared to an operating margin of $256,000 in the second quarter of 2013.

For the quarter ended August 2, 2014, the Corporation recorded a $676,000 loss before income tax recovery, as compared to loss before income tax recovery of $180 000 for the same period in the previous year. The loss before income tax recovery for the second quarter of 2014 includes a net impairment loss on capital assets of $296,000 (nil in 2013).

The Corporation's second quarter net loss was $619,000 (($0.32) per share, basic and diluted) in 2014, as compared to net loss of $133,000 (($0.07) per share, basic and diluted) for the same quarter in the previous year.

Results for the first six months of 2014

Net sales for the first six-month period of fiscal 2014 were $18 million, compared to $19.9 million in the corresponding period the previous year. The comparable sales decreased by 5.8%.

The Corporation reports an operating loss (EBITDA(1)) of $596 000 for the first six-month period of 2014, compared to operating loss (EBITDA(1)) of $489,000 for the same period of the previous year. The increase in the operating loss is due to a reduction in marginal contribution mainly due to lower sales partially offset by the reduction in selling expenses and by the overall reduction of expenses achieved through the reorganization plan.

For the six- month period ended August 2, 2014, the Corporation recorded a $1.6 million loss before income tax recovery, as compared to loss before income tax recovery of $1.4 million for the same period the previous year. The loss before income tax recovery for the first semester of 2014 includes a net impairment loss on capital assets of $296,000 (nil in 2013).

For the six-month period ended on that date, net loss totalled $1.5 million (($0.81) per share, basic and diluted), as compared to net loss of $1 million (($0.52) per share, basic and diluted) in the same period in 2013.

Outlook(2)

"Recognizing the challenge ahead, I see an opportunity to build on the Corporation's solid assets to reposition our brand and improve our performance at the execution level," said Jocelyn Dumas, Executive Chairman of the Board of Groupe Bikini Village inc.. "Through fixing the fundamentals and setting a clear direction, we believe Groupe Bikini Village can take a leadership position in the Canadian marketplace offering value and premium swimwear brands delivered through a unique customer experience".

"I also find important to communicate that the full realization of our plan and the Corporation's continuance as a going concern remain dependent on our ability to obtain further financing, either through debt, equity issuances, or strategic alliances. At the present time, it is not possible to predict whether additional financing efforts will be successful. Furthermore, the Corporation will continue to seek out and leverage new initiatives and opportunities to create long-term value for shareholders", added Mr. Dumas.

Groupe Bikini Village inc.'s full second-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. is a leading swimwear retailer with a network of boutiques across Eastern Canada. In its inviting stores, Bikini Village helps its customers choose from among Canada's widest selection of swimwear, beachwear, travel clothing and beach accessories. Headquartered in Sainte-Julie, Quebec, Groupe Bikini Village operates 52 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 six-month period ended August 2, 2014, dated September 16, 2014, entitled "Non-GAAP Financial Measures." It is available on SEDAR at http://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 Six months ended
August 2, 2014 August 3, 2013 August 2, 2014 August 3, 2013
Revenues $ 9,941 $ 11,400 $ 17,967 $ 19,878
Cost of goods sold $ 4,864 $ 5,718 $ 8,642 $ 9,611
Gross profit 5,077 5,682 9,325 10,267
Operating and administrative expenses 5,606 5,793 10,703 11,484
Net finance costs 147 69 225 135
Loss before income tax recovery (676 ) (180 ) (1,603 ) (1,352 )
Income tax recovery (57 ) (47 ) (57 ) (360 )
NET LOSS AND COMPREHENSIVE LOSS (1) $ (619 ) $ (133 ) $ (1,546 ) $ (992 )
LOSS PER SHARE
Basic and diluted (0.32 ) (0.07 ) (0.81 ) (0.52 )
Weighted average number of oustanding shares
Basic and diluted 1,912,230 1,912,230 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 $ (619 ) $ (133 ) $ (1,546 ) $ (992 )
Income tax recovery (57 ) (47 ) (57 ) (360 )
Net finance costs 147 69 225 135
Depreciation and amortization of capital and intangible assets 247 367 486 728
EBITDA $ 14 $ 256 $ (596 ) $ (489 )

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