New Look Eyewear Inc.
TSX : BCI

New Look Eyewear Inc.

November 05, 2014 21:22 ET

New Look Eyewear Inc. Announces Its Results for the Third Quarter of 2014 and Its Quarterly Dividend

MONTRÉAL, QUÉBEC--(Marketwired - Nov. 5, 2014) - New Look Eyewear Inc. (TSX:BCI) ("New Look") today announced its results for the third quarter of 2014 and its quarterly dividend.

Third quarter results

New Look reported revenues of $32.5 million and an adjusted EBITDA(1) of $6.2 million for the third quarter ended September 27, 2014, representing increases of 54% and 96% respectively over last year. The increases are essentially attributable to the addition of Vogue Optical's 65 stores last December. Same store sales(2) for the quarter increased by 3.7% over last year.

Net earnings attributed to shareholders of $1.65 million for the quarter were up 48.5% from last year. This included a provision for acquisition-related costs of $0.81 million. This is in line with the EBITDA increase following the Vogue Optical acquisition and reflects additional depreciation, amortization and financial expenses, as well as acquisition costs related to Greiche & Scaff. In spite of these additional expenses and the issuance of shares, mainly pursuant to the financing of the Vogue Optical acquisition, net earnings per share(3) for the quarter increased to $0.13 from $0.10 last year. Net earnings per share adjusted to remove the impact of acquisition-related costs increased to $0.17 from $0.11 last year.

Cash flows from operating activities (before changes in working capital) reached $5.3 million or $0.41 per share(3) in the third quarter of 2014 compared to $3.0 million and $0.28 last year.

Year-to-date results

Year-to-date revenues and adjusted EBITDA reached a record $99.4 million and $19.5 million respectively, which represent increases of 52% and 72% respectively over last year. Net earnings attributed to shareholders of $5.75 million were up 12.1% from last year, including a provision for acquisition-related costs of $1.31 million. Net earnings per share were $0.44 compared to $0.49 last year, thus reflecting additional depreciation, amortization and financial expenses, acquisition costs related to Greiche & Scaff as well as the issuance of shares over 2013 and 2014. Net earnings per share (3) adjusted to remove the impact of acquisition-related costs increased to $0.51 from $0.50 last year. Same store sales year-to-date were up 0.4% over last year.

Cash flows from operating activities (before changes in working capital) increased significantly to $17.8 million or $1.36 per share from $11.0 million or $1.05 per share last year.

More details on the financial performance of the third quarter and the year-to-date period are available in the attachments.

Martial Gagné, the President of New Look, commented: "This was our highest third quarter on record in terms of revenues, adjusted EBITDA and cash flows reflecting the impact of the Vogue acquisition late in 2013 and of other acquisitions and store openings since the beginning of 2013. Same store sales increased 3.7% over last year, anchoring a strong operating and financial performance for the company as a whole for the quarter."

Antoine Amiel, the Vice-Chairman of New Look, stated that: "During the quarter, the integration of Vogue and the achievement of synergies and efficiencies progressed well. In October, we completed the acquisition of Greiche & Scaff, a significant step forward, making the combined New Look businesses the second largest integrated optical retailer in Canada and the eighth largest in North America with estimated combined sales of $160 million."

Events after the reporting period

On October 14, 2014, New Look announced that it had completed the acquisition of Greiche & Scaff and confirmed the increase of its senior secured debt facility with its bank syndicate by $10 million to $53 million as well as the issuance of 500,000 Class A common shares at $20 per share.

Dividend approval

Following the approval of the results of the third quarter of 2014 and taking into account the solid cash inflows from operations in the quarter, the Board of Directors of New Look approved the payment of dividends totalling $0.15 per Class A common shares payable on December 31st, 2014 to the shareholders of record as of December 22nd, 2014. One dividend, in the amount of $0.13 per share, has been designated as "eligible dividend", that is a dividend entitling shareholders who are Canadian resident individuals to a higher dividend tax credit.

Shareholders residing in Canada are allowed to elect to re-invest their cash dividends into New Look shares, without any brokerage commissions, fees and transaction costs through the dividend reinvestment plan implemented in 2014. Until any further announcement, shares will be issued from treasury at 95% of the weighted average trading price for the five days preceding the dividend payment date. Any shareholder wishing to benefit from this opportunity only has to make the election through his or her broker.

Tax status of dividend equivalent amount paid to holders of subscription receipts

Holders of subscription receipts issued on August 19, 2014 received upon the exchange of their receipts for Class A common share of New Look on October 14, 2014 an amount equal to the dividends totalling $0.15 per Class A common share declared payable on September 30, 2014 to the holders of record as of September 23, 2014. New Look has determined that this dividend equivalent amount is a non-taxable refund of a portion of the purchase price of the subscription receipts.

Attachments

  • Table A - Highlights
  • Table B - Consolidated statement of earnings (unaudited)
  • Table C - Reconciliation of net earnings to adjusted EBITDA
  • Table D - Reconciliation of net earnings to adjusted net earnings
(1) EBITDA, adjusted EBITDA and adjusted net earnings are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. See Table C and Table D attached for a reconciliation of net earnings to these measures.
(2) Comparable stores are those opened before 2013 by New Look and Vogue. Revenues are recognized at time of delivery of goods to customers, but management measures the comparable store performance on the basis of sales orders, whether delivered or not.
(3) Per share amounts are expressed on a diluted basis.

As of October 31, 2014, New Look had 13,257,205 Class A common shares issued and outstanding. New Look is a leader in the eye care industry in Eastern Canada having a network of 190 corporate stores mainly under the New Look, Vogue Optical and Greiche & Scaff banners and laboratory facilities using state-of-the-art technologies. Tax information regarding payments to shareholders is available at www.newlook.ca in the Investors section.

All statements other than statements of historical fact contained in this press release are forward-looking statements, including, without limitation, statements regarding the future financial position, business strategy, projected costs and plans and objectives of, or involving New Look. Readers can identify many of these statements by looking for words such as "believe", "expects", "will", "intends", "projects", "anticipates", "estimates", "plans", "may", "would" or similar words or the negative thereof. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will be achieved. Forward-looking statements are subject to risks, uncertainties and assumptions. Although management of New Look believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Some of the factors which could affect future results and could cause results to differ materially from those expressed in the forward-looking statements contained herein include: pending and proposed legislative or regulatory developments, competition from established competitors and new market entrants, technological change, interest rate fluctuations, general economic conditions, acceptance and demand for new products and services, and fluctuations in operating results, as well as other risks included in New Look's current Annual Information Form (AIF) which can be found at www.sedar.com. The forward-looking statements included in this press release are made as of the date hereof, and New Look undertakes no obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise, except as provided by law.

For additional information please see our Web site www.newlook.ca.

TABLE A

NEW LOOK EYEWEAR INC.
Highlights
for the 13 and 39-week periods ended September 27, 2014 and September 28, 2013
Unaudited - In thousands of Canadian dollars, except per share amounts
13 weeks 39 weeks
Sept 27, 2014 Sept 28, 2013 Sept 27, 2014 Sept 28, 2013
Revenues $32,504 $21,110 $99,436 $65,375
Variance 54 % 52 %
Adjusted EBITDA(a) $6,213 $3,169 $19,529 $11,352
Variance 96 % 72 %
% of revenues 19.1 % 14.7 % 19.6 % 17.1 %
Per share (diluted) $0.47 $0.30 $1.49 $1.08
Net earnings attributed to shareholders $1,650 $1,111 $5,751 $5,128
Variance 48.5 % 12.1 %
Net earnings per share
Basic $0.13 $0.11 $0.45 $0.49
Diluted $0.13 $0.10 $0.44 $0.49
Adjusted net earnings attributed to shareholders (a) $2,245 $1,162 $6,712 $5,244
Variance 6.9 % 6.8 %
Per share (diluted) $0.17 $0.11 $0.51 $0.50
Cash flows from operating activities, before changes in working capital $5,321 $3,008 $17,782 $11,012
Per share (diluted) $0.41 $0.28 $1.36 $1.05
Capital expenditures $811 $1,594 $3,387 $11,670
Net debt increase (decrease) in the period ($2,298 ) $797 ($7,773 ) $3,944
Cash dividend per share $0.15 $0.15 $0.45 $0.45
Total dividends $1,912 $1,569 $5,742 $4,690
Number of stores 141 76
Variance in comparable store sales orders(b) 3.7 % 0.4 %
Acquisition-related costs 814 70 1,314 159
a) EBITDA, adjusted EBITDA and adjusted net earnings are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. See Table C and D for a reconciliation of net earnings to these measures.
b) Comparable stores are those opened before 2013 by New Look and Vogue Optical.

TABLE B

NEW LOOK EYEWEAR INC.
Consolidated Statement of Earnings
for the 13 and 39-week periods ended September 27, 2014 and September 28, 2013
Unaudited - In thousands of Canadian dollars, except per share amounts
13 weeks 39 weeks
Sept 27, 2014 Sept 28, 2013 Sept 27, 2014 Sept 28, 2013
$ $ $ $
Revenues 32,504 21,110 99,436 65,375
Materials consumed, net of changes in inventory 6,835 4,811 20,940 14,431
Employee remuneration expense 10,862 6,518 33,212 20,030
Other operating expenses 9,443 6,743 27,441 19,837
Earnings before depreciation, amortization and financial expenses 5,364 3,038 17,843 11,077
Depreciation and amortization 2,164 1,326 6,475 3,540
Financial expenses 901 121 3,073 304
Earnings before income taxes 2,299 1,591 8,295 7,233
Income taxes
Current 195 29 491 29
Deferred 439 435 1,998 2,041
Total income taxes 634 464 2,489 2,070
Net earnings and comprehensive income 1,665 1,127 5,806 5,163
Net earnings and comprehensive income attributed to:
Non-controlling interest 15 16 55 35
Shareholders of New Look 1,650 1,111 5,751 5,128
1,665 1,127 5,806 5,163
Net earnings per share
Basic 0.13 0.11 0.45 0.49
Diluted 0.13 0.10 0.44 0.49

TABLE C

NEW LOOK EYEWEAR INC.
Reconciliation of net earnings to adjusted EBITDA
for the 13 and 39-week periods ended September 27, 2014 and September 28, 2013
Unaudited - In thousands of Canadian dollars
13 weeks 39 weeks
Sept 27, 2014 Sept 28, 2013 Sept 27, 2014 Sept 28, 2013
$ $ $ $
Net earnings 1,665 1,127 5,806 5,163
Depreciation and amortization 2,164 1,326 6,475 3,540
Financial expenses 901 121 3,073 304
Income taxes 634 464 2,489 2,070
EBITDA 5,364 3,038 17,843 11,077
Equity-based compensation 68 34 357 140
Net loss (gain) from changes in fair value of foreign exchange contracts (33 ) 27 15 (24 )
Acquisition-related costs 814 70 1,314 159
Adjusted EBITDA 6,213 3,169 19,529 11,352
Variance in $ 3,044 8,177
Variance in % 96 % 72 %
% of revenues 19.1 % 14.7 % 19.6 % 17.1 %
Per share (diluted) 0.47 0.30 1.49 1.08

EBITDA and adjusted EBITDA are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. New Look believes that they are useful financial metrics as they assist in determining the ability to generate cash from operations. Investors should be cautioned that EBITDA and Adjusted EBITDA should not be construed as an alternative to net earnings or cash flows as determined under IFRS.

TABLE D

NEW LOOK EYEWEAR INC.
Reconciliation of net earnings to adjusted net earnings
for the 13 and 39-week periods ended September 27, 2014 and September 28, 2013
Unaudited - In thousands of Canadian dollars
13 weeks 39 weeks
Sept 27, 2014 Sept 28, 2013 Sept 27, 2014 Sept 28, 2013
$ $ $ $
Net earnings attributed to shareholders 1,665 1,127 5,806 5,163
Acquisition-related costs 814 70 1,314 159
Related income taxes (219 ) (19 ) (353 ) (43 )
Adjusted net earnings 2,260 1,178 6,767 5,279
Adjusted net earnings attributed to shareholders 2,245 1,162 6,712 5,244
Variance in $ 1,083 1,468
Variance in % 93.0 % 28.0 %
% of revenues 6.9 % 5.5 % 6.8 % 8.0 %
Per share amount
Diluted 0.17 0.11 0.51 0.50

Adjusted net earnings are not a recognized measure under IFRS and may not be comparable to similar measures used by other entities. New Look believes New Look believes that this disclosure provides useful information as the amount of acquisition-related costs varied substantially from last year. Investors should be cautioned that adjusted net earnings should not be construed as an alternative to net earnings as determined under IFRS.

Contact Information

  • New Look Eyewear Inc.
    Lise Melanson
    (514) 877-4299, ext. 2234
    www.newlook.ca