The Forzani Group Ltd./Le Groupe Forzani Ltee
TSX : FGL

The Forzani Group Ltd./Le Groupe Forzani Ltee

April 28, 2009 09:00 ET

The Forzani Group Establishes Long Term Growth Objectives

Management Team to Present Strategic Plan at Investor Day

CALGARY, ALBERTA--(Marketwire - April 28, 2009) - The Forzani Group Ltd. (TSX:FGL) (the "Company" or "FGL") announced today that it has established long term growth objectives for the next four to five years.

FGL's senior management team will discuss the Company's strategic plan and growth objectives at an Investor Day presentation today in Toronto. The presentation will also be available simultaneously via webcast.

The objectives include the following average annual increases in key metrics:

- 10% in sales;

- 15% in earnings before interest, taxes and amortization (EBITA);

- 20% in earnings per share and dividends; and

- 100 basis points in return on equity (ROE).

"We are advancing with an array of initiatives that we have been testing for more than a year," said Bob Sartor, FGL's Chief Executive Officer. "We're encouraged by the early results, which met or surpassed our expectations despite the challenges of a weakening Canadian economy."

The major initiatives underway at FGL include:

- Increasing by 5,000 square feet the average size of its Sport Chek outlets, the largest FGL banner with 128 stores, because bigger stores deliver a better return on investment;

- Adding concept shops within many of the Sport Chek outlets, including 21 Nevada Bob's Golf boutiques in the current fiscal year, following a successful test of six such boutiques last year. This strategy is capital efficient and less risky than adding free-standing Nevada Bob's stores;

- Focusing Sport Mart, with 82 stores, more sharply on opening price point customers to capture a much greater share of this $3.5 billion market;

- Adding vendor managed performance nutrition departments in Sport Chek and Fitness Source stores. The business has sound margins, faster inventory turns than sporting goods, and the potential to add to store visits as customers replenish supplies;

- Reducing our banner count to improve efficiency and reduce overlap and competition between our own outlets; and

- Striving for average franchise retail margins in our corporate stores, which would be a 150 basis point increase in corporate store margins.

"Our plan should see retail system sales increase to $2.6 billion by 2014 from $1.6 billion last year, before taking acquisitions into account," said Mr. Sartor. "Our plan also allows us to gradually buy back shares and return capital to our shareholders through dividend growth. We have an experienced and performance-driven management team, and we are confident that they can implement the plan and achieve the objectives that we have established."

The simultaneous webcast of the Investor Day event will be available beginning at 9:00 a.m. EDT at www.forzanigroup.com. As well, the webcast replay of the event will be available beginning later that day at www.forzanigroup.com. This replay will be maintained for at least twelve months.

The Forzani Group Ltd. is Canada's largest national retailer of sporting goods, offering a comprehensive assortment of brand-name and private-brand products, operating stores from coast to coast, under the following corporate and franchise banners: Sport Chek, Coast Mountain Sports, Sport Mart, National Sports, Athletes World, Sports Experts, Intersport, Econosports, Atmosphere, Tech Shop/Pegasus, Nevada Bob's Golf, Hockey Experts, S3 and Fitness Source. The Company also has websites for several of its corporate and franchise banners, which can be accessed through its main website at www.forzani.com.

Corporate Website: www.forzanigroup.com.

Non-GAAP Measures

Retail system sales are retail sales from corporate and franchise stores and are not a recognized performance measure under GAAP in Canada. Management believes that this measure is useful supplemental information which provides the reader with an indication of the Company's total retail sales, but may not be comparable to measures used by other companies.

Earnings before interest, taxes and amortization (EBITA) is not a recognized performance measure under GAAP in Canada. Management believes that, in additional to net earnings, this measure is useful supplemental information, which provides the reader with an indication of operating earnings prior to amortization, debt services and provision for income taxes. This may not be comparable to measures used by other companies.

Forward-Looking Information

This news release contains certain statements that may constitute forward-looking information within the meaning of applicable securities laws. This forward-looking information relates to, among other things, the Company's growth objectives, strategic and operating initiatives, revenue, retail system sales, share buy-backs and dividend growth, and can generally be identified by the use of such words as "may", "will", "expect", "believe", "plan", "intend", "are confident" and other similar terminology, including statements concerning possible or assumed future results. Certain material factors or assumptions are applied in making statements regarding forward-looking information, and actual results may differ materially from those expressed or implied in such information. The forward-looking information in this news release is based upon material factors and assumptions that management believes are reasonable as of the date of this news release, including the successful execution of the initiatives described herein; however, the Company cannot assure actual results will be consistent with this forward-looking information. Information about material factors that could cause actual results to differ materially from expectations include, but are not limited to, the factors discussed in the Company's Management Discussion and Analysis and Annual Information Form filed with the securities regulatory authorities in Canada, available at www.sedar.com.

When relying on the forward-looking information to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves significant risks and uncertainties, should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. While the Company may elect to do so, unless required by applicable law, it undertakes no obligation to update this information to reflect new information or circumstances at any particular time.

Contact Information

  • The Forzani Group Ltd.
    Robert Sartor, CA
    Chief Executive Officer
    (403) 717-1342
    or
    The Forzani Group Ltd.
    Michael Lambert, CA
    Chief Financial Officer
    (403) 717-1666
    Website: www.forzani.com