Groupe Bikini Village inc.

TSX : GBV


Groupe Bikini Village inc.

April 18, 2013 15:08 ET

Groupe Bikini Village inc. Reports its Results for the Fourth Quarter and the Year 2012

SAINTE-JULIE, QUEBEC--(Marketwired - April 18, 2013) - Groupe Bikini Village inc. (TSX:GBV) ("Groupe Bikini Village" or the "Corporation") reported a decline in sales compared to fiscal 2011, despite an extra week of sales. An overall challenging retail environment and the revenue impact of the Corporation's decision to close certain non-performing stores exerted negative pressure on sales.

2012 fourth quarter results

Net sales for the fourth quarter, which ended February 2, 2013 and comprised 14 weeks, were $12.9 million, compared to $13.1 million for the fourth quarter (which comprised 13 weeks) in the previous year. Comparable sales, which compares the sales from the same number of stores year-over-year, decreased by 11.9% for the quarter when the same number of weeks is compared.

The Corporation's operating margin (EBITDA1) for the fourth quarter, with an extra week of sales and corresponding expenses, was $1.2 million, compared to operating margin (EBITDA1) of $2 million for the fourth quarter of the previous year. The decrease in the operating margin is due to a decrease in the marginal contribution resulting from lower sales volume and a decrease in gross margins.

For the quarter ended February 2, 2013, the Corporation's net earnings was $231,000 ($0.12 per share, basic and diluted), as compared to net earnings of $942,000 ($0.49 per share, basic and diluted) for the same quarter in the previous year.

Results for 2012

Net sales for the 53 weeks in the fiscal year ended February 2, 2013 were $42.5 million, down from $43.2 million for the 52-week fiscal year that preceded it. Comparable sales were 4.8% lower in fiscal 2012 than they were in fiscal 2011, when the same number of weeks is compared.

EBITDA1 for the fiscal year ended February 2, 2013, with an extra week of sales and corresponding expenses, was $925,000, compared to EBITDA1 of $2.5 million in the previous year. The underlying reasons for the negative variance in comparative EBITDA1 between fiscal 2012 and 2011 are a decrease in sales due to the continuing challenging retail environment and sustained competition, and the increased promotional activities the Corporation undertook to address them - which, combined, led to reduced gross margins.

For fiscal 2012, net loss totalled $1.1 million (($0.58) per share, basic and diluted), as compared to net earnings of $14,000 ($0.01 per share, basic and diluted) in the same period of 2011.

Outlook2

"In the midst of a drawn-out economic recovery, national retailers are operating in a challenging retail environment and are facing an ever-increasing competition," said Yves Simard, President and CEO of Groupe Bikini Village inc. "We are focusing on improving our customers' in-store experience, to attract shoppers, - and at the same time, are working to control costs and improve margins to preserve and grow profitability."

Simard said Groupe Bikini Village expects its market to remain challenging, highly competitive and price-sensitive, which will continue to put pressure on comparable sales. "However, the change and the investments we have made in our retail network - and the resulting in-store experience it offers our customers - position us for competitive success."

"We recognize that an outstanding customer experience is as important to our success as the high quality of our offers," Simard said. "These two factors are at the root of our ongoing strategies to bring more qualified customers, both new and returning, into our stores and motivate purchases. These revenue growth strategies, together with disciplined control of expenses, will allow us to build profitability and shareholder value."

We will also persist in our efforts to identify and take advantage of opportunities to create long-term value," Mr. Simard said.

Groupe Bikini Village inc.'s full 2012 annual 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 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 54 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 year ended February 2, 2013, dated April 18, 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)
Three months ended Year ended
February 2, 2013 *January 28, 2012 February 2, 2013 * January 28, 2012
(unaudited)(unaudited) (audited) (audited)
Revenues$12,917$13,101 $42,470 $43,227
Cost of goods sold 5,865 5,604 19,324 18,897
Gross profit 7,052 7,497 23,146 24,330
Operating and administrative expenses 6,440 5,968 23,840 23,419
Net finance costs 133 182 603 789
Loss on convertible debentures renegotiation 153 - 153 -
Earnings (loss) before income tax expense (recovery) 326 1,347 (1,450) 122
Income tax expense (recovery) 95 405 (350) 108
NET EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) (1)$231$942 $(1,100)$14
EARNINGS (LOSS) PER SHARE
Basic and diluted 0.12 0.49 (0.58) 0.01
Weighted average number of oustanding shares
Basic and diluted 1,912,230 1,910,597 1,911,291 1,910,597
Diluted 1,929,675 1,918,468 1,911,291 1,912,143
(1) A reconciliation of net earnings (loss) and comprehensive income (loss) to earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA") is as follows:
Net earnings (loss) and comprehensive income (loss)$231$942 $(1,100)$14
Income tax expense (recovery) 95 405 (350) 108
Net finance costs 133 182 603 789
Depreciation and amortization of capital and intangible assets 405 462 1,452 1,512
Net impairment loss on capital assets 167 43 167 43
Loss on convertible debentures renegotiation 153 - 153 -
EBITDA$1,184$2,034 $925 $2,466
* The fiscal quarters ended February 2, 2013 and January 28, 2012 included 14 and 13 weeks or operations, respectively. The fiscal years ended February 2, 2013 and January 28, 2012 included 53 and 52 weeks of operations, respectively.

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