Groupe Bikini Village inc.

TSX : GBV


Groupe Bikini Village inc.

May 01, 2014 18:09 ET

Groupe Bikini Village inc. Reports its Results for the Fourth Quarter and the Year 2013

SAINTE-JULIE, QUEBEC--(Marketwired - May 1, 2014) - Groupe Bikini Village inc. (TSX:GBV) ("Groupe Bikini Village" or the "Corporation") today reported fourth quarter and annual results for 2013 which reflected the ongoing impacts of a challenging market.

2013 fourth quarter results

Net sales for the fourth quarter of fiscal 2013, which ended February 1, 2014, were $10.7 million, compared to $12.9 million for the fourth quarter in the previous year (which comprised 14 weeks). On a comparable sales basis (which compare sales from the same number of stores year-over-year), results decreased by 13.1% for the fourth quarter of 2013 over the 13-week period ending February 2, 2013. The significant decrease in net sales is primarily due to a decrease in traffic that resulted from abnormal weather conditions, as well as aggressive competition.

The Corporation shows an operating margin (EBITDA(1)) for the fourth quarter of $220,000 (excluding reorganization fees of $22,000), compared to operating margin (EBITDA(1)) of $1.2 million for the same quarter of the previous year. The decrease in the operating margin is mainly attributable to decreased sales volumes and gross margins. Lower selling expenses and overall expense reductions achieved by implementing the reorganization plan were not sufficient to compensate for the lower sales volumes and margins.

For the quarter ended February 1, 2014, the Corporation recorded a $1.4 million loss before income tax provision, as compared to earnings before income tax provision of $326,000 for the same period in the previous year. The loss before income tax provision for the fourth quarter of 2013 includes a net impairment loss on capital assets of $1.2 million, compared to $167,000 in the fourth quarter of 2012.

The Corporation also recorded, in the fourth quarter of 2013, a valuation allowance of $1.8 million against the income tax recovery which will remain available to the Corporation as Groupe Bikini Village returns to profitability.

For the quarter ended February 1, 2014, the Corporation's net loss was $3.3 million (($1.71) per share, basic and diluted), as compared to net earnings of $231,000 ($0.12 per share, basic and diluted) for the same quarter in the previous year.

Results for 2013

Net sales for the 52-week fiscal year ended February 1, 2014 were $36 million, compared to $42.5 million for the 53-week fiscal year 2012. As mentioned above, the comparable sales results (which compare sales from the same number of stores year-over-year) for fiscal year 2013 are compared to the 52-week period ending February 2, 2013. The comparable sales decreased by 11.5% due to difficult market conditions, including unfavourable weather conditions, in the second and fourth quarters, and aggressive competition which necessitated additional promotional activities.

The Corporation shows an operating loss (EBITDA(1)) of $2.5 million for the fiscal year 2013 (excluding reorganization fees of $276,000), compared to operating margin (EBITDA(1)) of $925,000 for the previous year. The decrease in operating margin is mainly caused by decreased sales volumes and gross margins. The lower selling expenses and overall expense reductions achieved by implementing the reorganization plan in the second half of the year were not sufficient to compensate for the lower sales volumes and margins.

For the year ended February 1, 2014, the Corporation recorded $5.8 million in loss before income tax provision, compared to loss before income tax recovery of $1.5 million for 2012. The loss before income tax provision for 2013 includes net impairment loss on capital assets of $1.4 million, as compared to $167,000 in 2012.

For fiscal 2013, net loss totalled $6.4 million (($3.37) per share, basic and diluted), as compared to net loss of $1.1 million (($0.58) per share, basic and diluted) in fiscal 2012.

Outlook(2)

Groupe Bikini Village operates in a challenging, highly-competitive and price-sensitive market.

"The management team continues to focus on revenue generation and cost efficiencies," said Scott Leckie, Chairman of the Board of Groupe Bikini Village inc.. Mr. Leckie also indicated the Corporation's intention to launch an e-commerce-enabled website, which will allow the Corporation to engage and transact business with its customers online. "We will also undertake a range of actions aimed at stimulating sales," he said. "We are focused and taking strategic actions to return the Corporation to profitability."

"The Board of Directors' search for a new President and Chief Executive Officer is well under way and will be completed following the closing of the most recently announced financing", also indicated Mr. Leckie.

Mr. Leckie said the Corporation will continue to seek out and leverage new and existing opportunities to create value for shareholders.

Groupe Bikini Village inc.'s full 2013 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 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 53 stores and employs approximately 425 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 year ended February 1, 2014, dated May 1st, 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 EARNINGS AND COMPREHENSIVE INCOME
(in thousands of Canadian dollars, except amounts related to shares)
Three months ended Year ended
February 1, 2014 February 2, 2013 * February 1, 2014 February 2, 2013 *
(unaudited) (unaudited) (audited) (audited)
Revenues $ 10,689 $ 12,917 $ 36,002 $ 42,470
Cost of goods sold $ 5,595 $ 5,865 $ 18,068 $ 19,324
Gross profit 5,094 7,052 17,934 23,146
Operating and administrative expenses 6,456 6,440 23,431 23,840
Net finance costs 79 133 283 603
Loss on convertible debentures renegotiation - 153 - 153
Earnings (loss) before income tax expense (recovery) (1,441 ) 326 (5,780 ) (1,450 )
Income tax expense (recovery) 1,829 95 663 (350 )
NET EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)(1) $ (3,270 ) $ 231 $ (6,443 ) $ (1,100 )
EARNINGS (LOSS) PER SHARE
Basic and diluted (1.71 ) 0.12 (3.37 ) (0.58 )
Weighted average number of oustanding shares
Basic and diluted
Diluted 1,912,230 1,912,230 1,912,230 1,911,291
(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) $ (3,270 ) $ 231 $ (6,443 ) $ (1,100 )
Income tax expense (recovery) 1,829 95 663 (350 )
Net finance costs 79 133 283 603
Depreciation and amortization of capital and intangible assets 315 405 1,401 1,452
Net impairment loss on capital assets 1,245 167 1,357 167
Loss on convertible debentures renegotiation - 153 - 153
Reorganisation costs 22 - 276 -
EBITDA $ 220 $ 1,184 $ (2,463 ) $ 925
* The fiscal quarters ended February 1, 2014 & February 2, 2013 included 13 and 14 weeks or operations, respectively.
The fiscal years ended February 1, 2014 & February 2, 2013 included 52 and 53 weeks of operations, respectively.

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