New Look Vision Group Inc.
TSX : BCI

New Look Vision Group Inc.

November 09, 2015 18:00 ET

New Look Vision Group Inc. Announces its Results for the Third Quarter of 2015 and its Quarterly Dividend

MONTRÉAL, QUÉBEC--(Marketwired - Nov. 9, 2015) - New Look Vision Group Inc. (TSX:BCI) ("New Look Vision" or the "Company"), formerly New Look Eyewear Inc., announced today its financial results for the third quarter ended September 26, 2015 and its quarterly dividend.

Third quarter results

New Look Vision reported revenues of $41.4 million and an adjusted EBITDA(1) of $7.1 million for the third quarter ended September 26, 2015 representing increases of 27.3% and 13.9% respectively over last year. The increases were mainly due to the addition of the Greiche & Scaff stores acquired in October 2014 as well as to same store sales growth. Comparable store sales orders(2) for the quarter increased by 3.3% over last year.

Adjusted net earnings(1), that is net earnings adjusted to remove the impact of a tax settlement with Canadian tax authorities, as described in more details below, and acquisition-related costs were $2.2 million or $0.16 per share(3) for the third quarter, down by $67,000 (or $0.01 per share) from last year due to additional depreciation, amortization, and financial expenses stemming from the negative impact of an interest rate swap. This one-time tax settlement resulted in a net loss attributed to shareholders of $641,000 for the quarter or $0.05 per share(3).

Cash flows from operating activities (before changes in working capital) reached $5.7 million or $0.41 per share(3) in the third quarter of 2015 compared to $5.3 million or $0.41 per share last year. The cash flow situation improved despite payments of current income taxes of $1.1 million in the third quarter of 2015 compared to $22,000 last year.

Year-to-date results

Year-to-date revenues and adjusted EBITDA reached $129.9 million and $23.9 million respectively, which represent increases of 30.7% and 22.2% respectively over last year. Net earnings attributed to shareholders of $5.4 million ($0.39 per share)(3) were down compared to $5.8 million last year ($0.44 per share). However, net earnings adjusted to remove the impact of the tax settlement and acquisition-related costs attained $8.5 million, that is $1.8 million over last year. Adjusted net earnings per share (3) increased to $0.62 from $0.51 last year, despite additional depreciation, amortization and financial expenses and additional shares issued over the last four quarters. Same store sales orders year-to-date were up 5.1% over last year.

Cash flows from operating activities (before changes in working capital) increased significantly to $20.8 million or $1.49 per share from $17.8 million or $1.36 per share last year. The cash flow situation improved despite payments of current income taxes of $2.4 million compared to $11,000 last year.

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

Settlement with the Canada Revenue Agency

New Look Vision has recently reached an agreement with the Canada Revenue Agency (CRA) regarding the use of tax attributes resulting from the amalgamation with Sonomax Hearing Healthcare Inc. (Sonomax) in March 2010 further to the conversion of the former trust known as Benvest New Look Income Fund into the current corporation. Under the settlement agreement, the CRA will not challenge the use of the tax attributes for the 2010, 2011 and 2012 taxation years and the Company will relinquish the right to use the tax attributes for the 2013, 2014 and following taxation years.

Based on this agreement and a similar agreement expected to be reached with provincial tax authorities, New Look Vision recorded in the third quarter of 2015 an additional tax expense of $2.6 million along with estimated accrued interest of $0.2 million. The Company intends to pay these balances in the fourth quarter of 2015.

President's comments

Antoine Amiel, the President of New Look Vision, stated that: "New Look Vision Group delivered another solid quarter for revenues and profitability, due to its operational focus, aggressive growth strategy and timely integration of acquired business units. We continue to monitor the opportunities arising from the ongoing consolidation of the Canadian retail optical industry. In the quarter, we also reached a settlement with the Canada Revenue Agency regarding the use of tax attributes resulting from the amalgamation with Sonomax Hearing Healthcare Inc."

Dividend approval

Following the approval of the results of the third quarter of 2015 and taking into account the solid cash inflows from operations in the quarter, the Board of Directors of New Look Vision approved the payment of a dividend of $0.15 per Class A common shares payable on December 31, 2015 to the shareholders of record as of December 21, 2015. The dividend has been designated as an "eligible dividend", that is a dividend entitling shareholders who are Canadian resident individuals to a higher dividend tax credit.

Through the dividend reinvestment plan implemented in 2014, shareholders residing in Canada may elect to re-invest their cash dividends into New Look Vision shares, without incurring brokerage commissions, fees and transaction costs. 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 may do so through his or her broker.

Attachments

  • Table A - Highlights
  • Table B - Consolidated Statement of Earnings
  • 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) Refer to footnote a) in Table A for the definition of comparable stores and how management measures comparable store performance.
(3) Per share amounts are expressed on a diluted basis.

As of September 30, 2015, New Look Vision had 13,419,448 Class A common shares issued and outstanding. New Look Vision is a leader in the eye care industry in Eastern Canada comprised of a network of 192 corporate stores mainly under the New Look Eyewear, 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.newlookvision.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 Vision. 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 Vision 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 Vision'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 Vision 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 VISION GROUP INC.
Highlights
for the 13 and 39-week periods ended September 26, 2015 and September 27, 2014
In thousands of Canadian dollars, except per share amounts
13 weeks 39 weeks
Sept. 26, 2015 Sept. 27, 2014 Sept. 26, 2015 Sept. 27, 2014
Revenues $41,379 $32,504 $129,941 $99,436
Variance 27.3 % 30.7 %
Variance in comparable store sales orders(a) 3.3 % 5.1 %
Adjusted EBITDA(b) $7,079 $6,213 $23,861 $19,529
Variance 13.9 % 22.2 %
% of revenues 17.1 % 19.1 % 18.4 % 19.6 %
Per share (diluted) $0.51 $0.47 $1.73 $1.49
Net earnings (net loss) attributed to shareholders(c) ($641 ) $1,650 $5,402 $5,751
Variance (138.8 %) (6.1 %)
Net earnings (net loss) per share(c)
Basic ($0.05 ) $0.13 $0.40 $0.45
Diluted ($0.05 ) $0.13 $0.39 $0.44
Adjusted net earnings(b) attributed to shareholders $2,178 $2,245 $8,473 $6,712
Variance (3.0 %) 26.2 %
Per share (diluted) $0.16 $0.17 $0.62 $0.51
Cash flows from operating activities, before changes in non-cash working capital $5,693 $5,321 $20,771 $17,782
Per share (diluted) $0.41 $0.41 $1.49 $1.36
Capital expenditures $2,019 $791 $5,885 $3,319
Net debt decrease in the period ($2,339 ) ($2,298 ) ($9,789 ) ($7,773 )
Cash dividend per share $0.15 $0.15 $0.45 $0.45
Total dividends $2,011 $1,912 $6,023 $5,742
At end of period
Number of stores 192 141
a) Comparable stores are those which have been operating for at least 12 months either by New Look Eyewear, Vogue Optical or Greiche & Scaff. 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.
b) Adjusted EBITDA and adjusted net earnings are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. Refer to Table C and Table D for a reconciliation of these measures to net earnings.
c) One-time expenses totaling $2,768,000 were recorded in the third quarter of 2015 in relation with a tax settlement. Consequently, net earnings (net loss) attributable to shareholders and net earnings (net loss) per share for the 13-week and 39-week periods ended September 26, 2015 are reflective of this amount.

TABLE B

NEW LOOK VISION GROUP INC.
Consolidated Statement of Earnings
for the 13 and 39-week periods ended September 26, 2015 and September 27, 2014
In thousands of Canadian dollars, except per share amounts
13 weeks 39 weeks
Sept. 26, 2015 Sept. 27, 2014 Sept. 26, 2015 Sept. 27, 2014
$ $ $ $
Revenues 41,379 32,504 129,941 99,436
Materials consumed 9,001 6,835 28,086 20,940
Employee remuneration expenses 13,806 10,862 43,000 33,212
Other operating expenses 11,727 9,443 35,877 27,441
Earnings before depreciation, amortization, loss on disposal of property, plant and equipment, and financial expenses 6,845 5,364 22,978 17,843
Depreciation, amortization and loss on disposal of property, plant and equipment 2,823 2,164 8,251 6,475
Financial expenses, net of interest revenues 1,262 901 3,500 3,073
Earnings before income taxes 2,760 2,299 11,227 8,295
Income taxes
Current 3,570 195 5,402 491
Deferred (187 ) 439 365 1,998
Total income taxes 3,383 634 5,767 2,489
Net earnings and comprehensive income (net loss and comprehensive loss)(a) (623 ) 1,665 5,460 5,806
Net earnings and comprehensive income (net loss and comprehensive loss) attributed to:
Non-controlling interest 18 15 58 55
Shareholders of New Look (641 ) 1,650 5,402 5,751
(623 ) 1,665 5,460 5,806
Net earnings (net loss) per share
Basic (0.05 ) 0.13 0.40 0.45
Diluted (0.05 ) 0.13 0.39 0.44
a) One-time expenses totaling $2,768,000 were recorded in the third quarter of 2015 in relation with a tax settlement. Consequently, net earnings and comprehensive income (net loss and comprehensive loss) for the 13-week and 39-week periods ended September 26, 2015 are reflective of this amount

TABLE C

NEW LOOK VISION GROUP INC.
Reconciliation of Net Earnings to Adjusted EBITDA
for the 13 and 39-week periods ended September 26, 2015 and September 27, 2014
In thousands of Canadian dollars, except per share amounts
13 weeks 39 weeks
Sept. 26, 2015 Sept. 27, 2014 Sept. 26, 2015 Sept. 27, 2014
$ $ $ $
Net earnings (623 ) 1,665 5,460 5,806
Depreciation, amortization and loss on disposal of property, plant and equipment 2,823 2,164 8,251 6,475
Financial expenses, net of interest revenues 1,262 901 3,500 3,073
Income taxes 3,383 634 5,767 2,489
EBITDA(a) 6,845 5,364 22,978 17,843
Equity-based compensation 102 68 449 357
Net loss (gain) from changes in fair value of foreign exchange contracts 62 (33 ) 19 15
Acquisition-related costs 70 814 415 1,314
Adjusted EBITDA(a) 7,079 6,213 23,861 19,529
Variance in $ 866 4,332
Variance in % 13.9 % 22.2 %
% of revenues 17.1 % 19.1 % 18.4 % 19.6 %
Per share (diluted) 0.51 0.47 1.73 1.49
a) EBITDA and adjusted EBITDA are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. New Look Vision believes that EBITDA and adjusted EBITDA 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 VISION GROUP INC.
Reconciliation of Net Earnings to Adjusted Net Earnings
for the 13 and 39-week periods ended September 26, 2015 and September 27, 2014
In thousands of Canadian dollars, except per share amounts
13 weeks 39 weeks
Sept. 26, 2015 Sept. 27, 2014 Sept. 26, 2015 Sept. 27, 2014
$ $ $ $
Net earnings (net loss) attributable to shareholders (641 ) 1,650 5,402 5,751
Net expenses related to a tax settlement 2,768 2,768
Acquisition-related costs 70 814 415 1,314
Related income taxes (19 ) (219 ) (112 ) (353 )
Adjusted net earnings attributable to shareholders(a) 2,178 2,245 8,473 6,712
Variance in $ (67 ) 1,761
Variance in % (3.0 %) 26.2 %
% of revenues 5.3 % 6.9 % 6.5 % 6.8 %
Per share amount
Diluted 0.16 0.17 0.62 0.51
a) Adjusted net earnings are not a recognized measure under IFRS and may not be comparable to similar measures used by other entities. New Look Vision believes that this disclosure provides useful information as it allows the comparison of net results excluding acquisition and development costs, which may vary significantly from quarter to quarter. Investors should be cautioned that adjusted net earnings should not be construed as an alternative to net earnings as determined under IFRS.

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