Groupe Bikini Village inc.
TSX : GBV

Groupe Bikini Village inc.

December 07, 2011 15:50 ET

Groupe Bikini Village inc. Reports its Results for the Third Quarter of 2011

SAINTE-JULIE, QUEBEC--(Marketwire - Dec. 7, 2011) - Groupe Bikini Village inc. (TSX:GBV) ("Groupe Bikini Village" or the "Corporation") today reported the results of its third quarter of 2011. During the quarter, the Corporation reduced its traditional seasonal loss by delivering sales consistent with its performance in the same quarter a year earlier, while operating a smaller number of stores.

2011 third quarter results

Net sales for the third quarter, which ended October 29, 2011 were $6.6 million compared to $6.5 million in the corresponding quarter of the previous year. Comparable sales, which compares the sales from the same number of stores year-over-year, increased by 3.1% for the quarter.

The Company's operating loss (EBITDA1) for the third quarter at $1,495,000, was reduced from its $1,565,000 operating loss (EBITDA1) in the same period in 2010, due to a reduction in operating expenses offset negatively by a slight decrease in the marginal contribution. The reduction in operating expenses was mostly related to reduced occupancy costs following the closure of underperforming stores.

For the quarter ended October 29, 2011, the Company's net loss was $1,465,000 compared to net loss of $1,538,000 for the same quarter in the previous year.

The Corporation's activities are seasonal, and merchandise sales are generally higher in the second and fourth quarters. As a result, the operating loss for the quarter ended October 29, 2011 is not necessarily indicative of the operating results for a full year.

Results for the first nine months of 2011

Net sales for the nine-month period ended October 29, 2011 were $30.1 million, down from $30.8 million in the corresponding period of the previous year. Comparable sales were 0.4% lower in the first nine months of 2011 than they were in the first nine months of 2010.

Groupe Bikini Village delivered EBITDA1 of $432,000 in the nine-month period ended October 29, 2011 compared to EBITDA1 of $957,000 in the comparable nine-month period in the previous year. The underlying reason for the negative variance in EBITDA1 for the first nine months of 2011 compared to 2010 is a decrease in sales volume (principally in the second quarter) due to the late arrival of summer weather conditions and targeted promotional activities.

For the nine-month period ended on October 29, 2011, net loss totalled $928,000 compared to net loss of $566,000 in the same period of 2010.

Since the first quarter of 2011, Groupe Bikini Village has reported its financial results in accordance with International Financial Reporting Standards ("IFRS"), including comparative information. The changeover to IFRS has had impacts on a number of aspects of the Corporation's financial reporting; these are highlighted in Note 24 to the unaudited interim condensed financial statements.

Outlook 2

"Operating in a challenging retail environment, Groupe Bikini Village worked diligently to preserve its positions in both inventory and cash throughout the third quarter of 2011, and to limit the operational loss characteristic of the third quarter," said Yves Simard, President and CEO of Groupe Bikini Village inc. "Recognizing the continuing difficult market conditions forecast for the months and quarters ahead, we will continue to apply our prudent and proven strategies, paying close attention to performance at all levels of the Corporation."

"Our disciplined management approach allows Groupe Bikini Village to enter its fourth quarter with the financial resources and the flexibility we need to perform. The resources we have invested to strengthen our retail offering over the last few years have given us an excellent platform from which to reinforce our competitive position - and we will continue to do that, as we work to increase our earnings. As we look for further opportunities to improve shareholder value, we will continue to explore strategic prospects that arise, and to create opportunities of our own," Mr. Simard said.

Groupe Bikini Village inc.'s full third quarter 2011 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, 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 operates 58 stores and employs approximately 450 people; its securities trade on the Toronto Stock Exchange under the stock symbol GBV. For more information about the Corporation, please visit our website at www.bikinivillage.com.

Notes

1 The term EBITDA (earnings before finance costs, income 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 nine-month period ended October 29, 2011, dated December 7, 2011, entitled "Non-GAAP Financial Measures" 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.
INTERIM CONDENSED STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS
(in thousands of Canadian dollars, except amounts related to shares)
(unaudited)
Three months ended Nine months ended
October 29, 2011 October 30, 2010 October 29, 2011 October 30, 2010
Revenues $ 6,594 $ 6,527 $ 30,126 $ 30,785
Cost of goods sold 2,931 2,839 13,293 13,190
Gross profit 3,663 3,688 16,833 17,595
Operating and administrative expenses 5,485 5,591 17,451 17,655
Net finance costs 188 231 607 735
Loss before income tax recovery (1) (2,010 ) (2,134 ) (1,225 ) (795 )
Income tax recovery (545 ) (596 ) (297 ) (229 )
NET LOSS AND COMPREHENSIVE LOSS $ (1,465 ) $ (1,538 ) $ (928 ) $ (566 )
LOSS PER SHARE
Basic and diluted (0.77 ) (0.85 ) (0.49 ) (0.39 )
Weighted average number of oustanding shares
Basic and diluted 1,910,597 1,819,280 1,910,597 1,460,889
(1) A reconciliation of loss before income tax recovery to earnings before interest, taxes, depreciation and amortization ("EBITDA") is as follows:
Loss before income tax recovery $ (2,010 ) $ (2,134 ) $ (1,225 ) $ (795 )
Net finance costs 188 231 607 735
Depreciation, amortization and impairment of capital and intangible assets 327 338 1,050 1,017
EBITDA $ (1,495 ) $ (1,565 ) $ 432 $ 957

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