New Look Eyewear Inc.
TSX : BCI

New Look Eyewear Inc.

August 05, 2014 16:17 ET

New Look Eyewear Inc. Announces Record Revenues for the Second Quarter of 2014 and its Quarterly Dividend

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

Second quarter results: Record revenues, adjusted EBITDA and cash flows from operations

New Look reported record revenues of $35.1 million and a record adjusted EBITDA(1) of $8.3 million for the second quarter ended June 28, 2014, representing increases of 47% and 61% respectively over last year. The increases are essentially attributable to the addition of Vogue Optical's 65 stores last December and the addition of six other stores since the beginning of the second quarter of 2013. Same store sales(2) for the quarter declined 3.2% over a very strong quarter last year.

Net earnings of $3.1 million for the quarter were up 14.4% from last year reflecting the addition of Vogue Optical, but also included $0.4 million of one-time net development costs related to future acquisitions booked in the quarter. Net earnings per share(3) of $0.24 compared to $0.26 last year. This reflects the impact of the one-time development costs for future acquisitions and the issuance of 2.2 million shares in December of 2013 to finance the Vogue Optical acquisition. Excluding the one-time expenses, adjusted net earnings per share(3) were $0.27.

Cash flows from operating activities (before changes in working capital), reached a record amount of $7.6 million or $0.59 per share(3) in the second quarter of 2014 compared to $5.0 million and $0.48 last year.

Subsequent to the end of the quarter, New Look announced that it had entered into agreements to acquire certain assets and business operating under the Greiche & Scaff banner.

Year-to-date results

Revenues and adjusted EBITDA reached $66.9 million and $13.3 million respectively, which represents increases of 51% and 63% over last year. Net earnings year to date of $4.1 million were up 2.1% from last year. Net earnings per share were $0.31 compared to $0.38 last year, reflecting the one-time future acquisition costs incurred in the second quarter and the additional shares issued in December 2013. Excluding the one-time expenses, adjusted net earnings per share year to date were $0.34.

Cash flows from operating activities (before changes in working capital) increased significantly to $12.5 million or $0.96 per share from $8.0 million or $0.76 per share last year.

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

Martial Gagné, the President of New Look, commented: "The second quarter achieved record revenues and adjusted EBITDA and strong cash flows reflecting the impact of the Vogue acquisition late in 2013 and of other acquisitions and store openings since the beginning of 2013. As a result the Company was able to successfully begin its debt reductions programme post the Vogue acquisition. Same store sales declined compared to a strong Q2 last year."

Antoine Amiel, the Vice-Chairman of New Look, stated that: "During the quarter, Vogue's integration progressed according to plans with sharing of best practices and leveraging of the combined entities purchasing power. Considerable progress was made on our strategic growth plan in the quarter with the announcement post quarter end of the agreement to acquire Greiche & Scaff which will consolidate our leadership position in the Québec retail optical market."

Dividend approval

Following the approval of the results of the second 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 September 30th, 2014 to the shareholders of record as of September 23rd, 2014. One dividend, representing $0.14 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.

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 July 31, 2014, New Look had 12,706,550 Class A common shares issued and outstanding. New Look is a leader in the eye care industry in Eastern Canada having a network of 141 corporate stores mainly under the New Look and Vogue Optical banners and laboratory facilities using state-of-the-art technologies.

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.

TABLE A

NEW LOOK EYEWEAR INC.
Highlights
for the 13 and 26-week periods ended June 28, 2014 and June 29, 2013

Unaudited - In thousands of Canadian dollars, except per share amounts

13 weeks 26 weeks
June 28, 2014 June 29 2013 June 28, 2014 June 29 2013
Revenues $35,122 $23,967 $66,932 $44,265
Variance 47 % 51 %
Adjusted EBITDA(a) $8,282 $5,148 $13,316 $8,183
Variance 61 % 63 %
% of revenues 23.6 % 21.1 % 19.9 % 18.3 %
Per share (diluted) $0.63 $0.49 $1.02 $0.78
Net earnings attributed to shareholders $3,098 $2,709 $4,101 $4,017
Variance 14.4 % 2.1 %
Net earnings per share
Basic $0.24 $0.26 $0.32 $0.39
Diluted $0.24 $0.26 $0.31 $0.38
Adjusted net earnings attributed to shareholders (a) $3,463 $2,774 $4,466 $4,082
Variance 24.8 % 9.4 %
Per share (diluted) $0.27 $0.26 $0.34 $0.39
Cash flows from operating activities, before changes in working capital $7,633 $5,014 $12,461 $8,004
Per share (diluted) $0.59 $0.48 $0.96 $0.76
Capital expenditures $1,327 $9,159 $2,576 $10,076
Net debt increase (decrease) in the period ($4,704 ) $3,646 ($5,475 ) $3,147
Cash dividend per share $0.15 $0.15 $0.30 $0.30
Total dividends $1,912 $1,561 $3,830 $3,121
Number of stores 141 76
Variance in comparable store sales orders(b) (3.2 %) (1.4 %)
Acquisition-related costs 500 89 500 89
(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 26-week periods ended June 28, 2014 and June 29, 2013

Unaudited - In thousands of Canadian dollars, except per share amounts

13 weeks 26 weeks
June 28, 2014 June 29, 2013 June 28, 2014 June 29, 2013
$ $ $ $
Revenues 35,122 23,967 66,932 44,265
Materials consumed, net of changes in inventory 7,158 5,216 14,105 9,620
Employee remuneration expense 11,123 7,094 22,350 13,512
Other operating expenses 9,266 6,647 17,998 13,094
Earnings before depreciation, amortization and financial expenses 7,575 5,010 12,479 8,039
Depreciation and amortization 2,199 1,127 4,311 2,214
Financial expenses 911 93 2,172 183
Earnings before income taxes 4,465 3,790 5,996 5,642
Income taxes
Current 278 296
Deferred 1,075 1,069 1,559 1,606
Total income taxes 1,353 1,069 1,855 1,606
Net earnings and comprehensive income 3,112 2,721 4,141 4,036
Net earnings and comprehensive income attributed to:
Non-controlling interest 14 12 40 19
Shareholders of New Look 3,098 2,709 4,101 4,017
3,112 2,721 4,141 4,036
Net earnings per share
Basic 0.24 0.26 0.32 0.39
Diluted 0.24 0.26 0.31 0.38

TABLE C

NEW LOOK EYEWEAR INC.
Reconciliation of net earnings to adjusted EBITDA
for the 13 and 26-week periods ended June 28, 2014 and June 29, 2013

Unaudited - In thousands of Canadian dollars

13 weeks 26 weeks
June 28, 2014 June 29, 2013 June 28, 2014 June 29, 2013
$ $ $ $
Net earnings 3,112 2,721 4,141 4,036
Depreciation and amortization 2,199 1,127 4,311 2,214
Financial expenses 911 93 2,172 183
Income taxes 1,353 1,069 1,855 1,606
EBITDA 7,575 5,010 12,479 8,039
Equity-based compensation 143 81 289 106
Net loss (gain) from changes in fair value of foreign exchange contracts 64 (32 ) 48 (51 )
Acquisition-related costs 500 89 500 89
Adjusted EBITDA 8,282 5,148 13,316 8,183
Variance in $ 3,134 5,133
Variance in % 61 % 63 %
% of revenues 23.6 % 21.1 % 19.9 % 18.3 %
Per share (diluted) 0.63 0.49 1.02 0.78

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 26-week periods ended June 28, 2014 and June 29, 2013

Unaudited - In thousands of Canadian dollars

13 weeks 26 weeks
June 28, 2014 June 29 2013 June 28, 2014 June 29 2013
$ $ $ $
Net earnings attributed to shareholders 3,098 2,709 4,101 4,017
Acquisition-related costs 500 89 500 89
Related income taxes (135 ) (24 ) (135 ) (24 )
Adjusted net earnings attributed to shareholders 3,463 2,774 4,466 4,082
Analysis of net earnings attributed to shareholders
Variance in $ 389 84
Variance in % 14.4 % 2.1 %
% of revenues 8.8 % 11.3 % 6.1 % 9.1 %
Per share amount
Basic 0.24 0.26 0.32 0.39
Diluted 0.24 0.26 0.31 0.38
Analysis of adjusted net earnings attributed to shareholders
Variance in $ 689 384
Variance in % 24.8 % 9.4 %
% of revenues 9.9 % 11.6 % 6.7 % 9.2 %
Per share amount
Basic 0.27 0.27 0.35 0.39
Diluted 0.27 0.26 0.34 0.39

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

  • Lise Melanson
    (514) 877-4299, ext. 2234