MONTRÉAL, Sept. 10, 2020 /CNW
Telbec/ -
Results*
For the semester ended July 31,
2020, the Company's revenues decreased by $88,959,000 to $276,418,000 compared to $365,377,000 recorded in the corresponding 2019
period, a 24.3% decrease. Net earnings for the semester
July 31, 2020 amounted to
$7,152,000 compared to $10,025,000 recorded in the corresponding 2019
period. Basic net earnings per share amounted to $0.21 compared to $0.29 recorded in the corresponding 2019
period.
For the semesters ended July 31,
2020 and 2019, the share repurchase program had no impact on
basic net earnings per share.
Excluding all these effects, the variation in adjusted net
earnings would have been ($2,788,000)
or ($0.08) per basic share for the
semester ended July 31, 2020.
The ($2,788,000) variation in
adjusted net earnings is as follows:
|
|
(Unaudited and $ in
thousands)
|
|
|
|
|
|
July 31,
2020
|
July 31,
2019
|
|
|
|
|
Net
earnings
|
|
7
152
|
10 025
|
Variation in cost of
options (after-tax)
|
|
-
|
(85)
|
Adjusted net
earnings
|
|
7
152
|
(9 940)
|
Minus: Adjusted net
earnings for 2019
|
|
9
940
|
|
|
|
|
|
Variation
|
|
(2
788)
|
|
This variation in adjusted after-tax income is allocated
throughout the quarters as follows:
|
(Unaudited and $ in
thousands)
|
|
|
|
|
|
|
|
Increase (decrease)
in
retail operating earnings
|
|
Increase
(decrease)
in investment income
|
|
Increase (decrease)
in
adjusted operating earnings
|
|
|
|
|
|
|
April 30,
2020
|
784
|
|
(9 695)
|
|
(8 911)
|
July 31,
2020
|
1
707
|
|
4
416
|
|
6
123
|
Total
|
2
491
|
|
(5
279)
|
|
(2
788)
|
|
* As of February 1,
2019, the Company has applied IFRS 16 retrospectively, without
restating comparative information as permitted by the
standard.
|
Despite the significant drop in sales in the first semester of
2020, the Company managed to improve its retail operating results
by $2,976,000 or an after tax
increase of $2,491,000.
Annual financial
information
|
($ in thousands,
except for per share amounts)
|
|
|
|
|
|
|
January 31,
2020
|
January 31,
2019
|
Revenue
|
|
720
169
|
742 474
|
Net
earnings
|
|
36
034
|
45 165
|
Total
assets
|
|
382
040
|
367 624
|
Net earnings per
share
|
|
|
|
Basic
|
|
1,05
|
1,29
|
Diluted
|
|
1,05
|
1,29
|
Dividends per
share
|
|
0,28
|
0,28
|
Financial position and dividends
Cash, net of the bank overdraft, and investments increased by
$87,329,000 during the semester ended
July 31, 2020. Investments consist of
bank notes, government and corporate bonds, preferred and common
shares, which at the close of the semester had a market value of
$211,314,000 (including cash). As at
July 31, 2020, the working capital
showed a deficit of $41,350,000, an
increase of $21,883,000 compared to
the year ended January 31, 2020. The
Company's shareholders' equity increased from $216,624,000 as at January
31, 2020, to $218,275,000 as
at July 31, 2020. As at July 31, 2020, the book value per share stood at
$6.42, compared to $6.35 as at January 31,
2020.
Pursuant to the normal course issuer-bid put in place on
April 15, 2019, and renewed on
April 15, 2020, accordingly, 82,000
common shares were repurchased and cancelled by the Company. As a
result of this change, the Company had as at July 30, 2020, 34,006,000 common shares issued
and outstanding.
During the semester ended July 31,
2020, no options were granted. As at April 1st, 2020, options regarding 197,100 Common
Shares expired and were cancelled as they were out of money. As at
April 1st, 2020, the closing price of
the Common Shares on the Toronto Stock Exchange was $5.97. The Company may still grant pursuant to
the Plan a total of 5,710,864 options, representing 16.79% of the
issued and outstanding shares of the Company.
Quarterly results
*
|
(Unaudited and $ in
thousands, except for per share amounts)
|
|
|
|
|
|
|
April
30,
2020
|
April 30,
2019
|
July
31,
2020
|
July 31,
2019
|
Revenue
|
100
445
|
150 310
|
175
973
|
215 067
|
Net (loss)
earnings
|
(12
427)
|
(3 455)
|
19
579
|
13 480
|
Net (loss) earnings
per share
|
|
|
|
|
Basic
|
(0,36)
|
(0,10)
|
0,57
|
0,39
|
Diluted
|
(0,36)
|
(0,10)
|
0,57
|
0,39
|
|
|
|
|
|
|
October 31,
2019
|
October 31,
2018
|
January 31,
2020
|
January 31,
2019
|
Revenue
|
183
312
|
184 718
|
171
480
|
174 634
|
Net
earnings
|
10
649
|
11 613
|
15
360
|
11 813
|
Net earnings per
share
|
|
|
|
|
Basic
|
0,31
|
0,34
|
0,45
|
0,34
|
Diluted
|
0,31
|
0,34
|
0,45
|
0,34
|
|
*Comparative data
relating to revenue have been restated following a change in
presentation.
|
For the three-month period ended July 31,
2020, the Company's revenues decreased by $39,094,000 to $175,973,000, compared to $215,067,000 recorded for the corresponding
period, a 18.2 % decrease. Net earnings for the three-month period
ended July 31, 2020, amounted to
$19,579,000 compared to $13,480,000 recorded for the corresponding 2019
period. Basic net earnings per share increased to $0.57 compared to $0.39 for the corresponding 2019 period.
For the three-month period ended July 31,
2020, the share repurchase program had no impact on basic
net earnings per share.
Excluding all these effects, the variation to the adjusted net
earnings would have been $6,123,000
or $0.18 per basic share for the
quarter ended July 31, 2020.
The $6,123,000 variation in
adjusted net earnings is as follows:
|
|
(Unaudited and
$ in thousands)
|
|
|
|
|
|
|
July 31,
2020
|
July 31,
2019
|
|
|
|
|
Net
earnings
|
|
19
579
|
13 480
|
Variation in cost of
options (after-tax)
|
|
-
|
(24)
|
Adjusted net
earnings
|
|
19
579
|
13 456
|
Minus: Adjusted net
earnings for 2019
|
|
13
456
|
|
|
|
|
|
Variation
|
|
6
123
|
|
Operations
BMTC Inc.
The Company continues to restructure all of its websites and the
first phase of the implementation of a distinct e-commerce platform
for its banners Brault & Martineau and EconoMax is now
completed and operational. The process of implementation will
continue throughout 2020 for the following phases as well as the
restructuring for all the other banners of the Company. The Company
also reviewed its IT systems in to order standardize them
throughout the banners, as well as to allow them to be more aligned
with its e-commerce strategies. Following this review, the Company
decided to invest and to modify its existing IT systems, the
integration and implementation which will continue for a 3 to 5
year period.
Brault & Martineau Division
On November 6, 2019, the Company
proceeded with the sale of the Kirkland store. During this same transaction,
the Company purchased land along the Autoroute 40 in the city of
Kirkland in order to build a new
Brault & Martineau store of approximately 80,000 square feet
which will replace the actual Kirkland store. On this same land, the Company
is building an EconoMax store of approximately 50,000 square feet
which will replace the EconoMax store on Côte-Vertu. The
construction of these two stores has already begun, and their
openings are scheduled for fall 2020. The transfer of operations of
these two existing stores will be done following the completion of
these new stores.
The Company continues the evaluation process for different sites
as well as its existing stores to modify them or in certain cases
proceed with the reconstruction of a new store based on its new
prototype. The new Kirkland store
will be the second of the banner to be modified. The Company
anticipates that in the next few years it will incur costs related
to the modification and improvement of its actual network is to be
considered.
Management discussion and outlook for the Future of the
Company
The Company's first and second quarters of 2020 delivered strong
operational results, despite the negative financial impact of
COVID-19. The decrease in revenues during the first semester was
totally due to the temporary physical store closures. During this
second quarter the Company was able to reopen all of its 32 points
of sale and in order to mitigate the loss of revenues during the
closure, the Company proactively aligned its cost structure
accordingly. These steps were taken throughout the first semester
in order to protect the Company's viability and preserve its
working capital during these highly uncertain times. Thanks to
these new measures the Company was able to produce positive
operating results. This new cost structure will remain effective
throughout the remainder of the 2020 fiscal year.
On March 11th, 2020, the World
Health Organization declared COVID-19 a global pandemic. The
financial impact of COVID-19 began to manifest itself by a decrease
in store traffic and consequently store revenues in the early weeks
of March 2020. Following the rapid
rise of COVID-19 cases in the province of Quebec, our priority during this difficult
period remains at all times the health and safety of our employees
and clients. In order to protect the Quebec population and to prevent the spread of
COVID-19 by encouraging social distancing initiatives recommended
by both levels of government, the Company decided on March 18th, 2020, to temporarily close its retail
sales network, namely our Ameublements Tanguay banner in the
Quebec City area and the Brault
& Martineau and EconoMax banners in the Montreal area. On March
23rd, 2020, the Quebec
government announced, for the same reason, the closure of all
non-essential retail stores across the province.
In order to address the devastating effects of COVID-19 and to
assure its short and long-term financial health, the Company
decided to maintain its operations at a strict minimum level while
preserving its presence in our market and controlling its working
capital position. The following actions were undertaken by the
Company during these last weeks in order to support its operating
and working capital objectives:
- Following the closure of our retail sales network on
March 18th, 2020, the
Company temporarily laid off approximately 75% of its personnel,
the vast majority stemming from our retail stores.
- Our online and delivery services remained operational across
Quebec to ensure the population in
confinement the ability to rely on essential goods while respecting
government-mandated security protocols. We modified our services to
offer contactless home delivery.
- During this period, the Company introduced several measures and
protocols in preparation for the reopening of our stores across our
sales network to ensure and protect the health and security of our
employees and our clients. These new measures and protocols will be
in effect until the end of the COVID-19 pandemic.
- The Company has also made technological and operational
improvements to its sales network. These modifications will allow
us to reduce our fixed costs and will contribute to our initiatives
of effective cost controls.
- The Company applied for the Canada Emergency Wage Subsidy given the 30% or
more decrease in revenues during the prescribed period.
During the closure of our retail stores, from March 19th to May 3rd, 2020, online sales
increase significantly. Despite this significant increase, the
online sales only partially compensated for in-store sales for the
2019 corresponding period.
During the first quarter of 2020, the Company had all of its 32
points of sale closed for a period of 43 consecutive days, leaving
only online sales operational. The loss of revenues arising from
the first quarter closure produced a revenue decrease of
$52,029,000. During the second
quarter of 2020, the Company had a total of 15 points of sale
closed for a period of 25 consecutive days while the other 17
points of sale were closed for the first 5 days of the quarter,
again leaving only online sales operational. The loss of revenues
arising from the second quarter closure produced a revenue decrease
of $25,465,000.
On May 4th, 2020, the Quebec government authorized the reopening of
non-essential businesses situated outside of the Greater Montreal Area. The Ameublements
Tanguay banner was able to reopen all retail locations, except for
one. The EconoMax banner was able to reopen the Drummondville, Joliette and Granby stores, while the Brault &
Martineau banner reopened the Sherbrooke and Gatineau stores. As at May 4th, 2020, the Company had 16 of 32 stores
operational. In the days following the reopening on May 4th, in-store sales increased between 45% and
65% compared to the same period in 2019. This increase, however,
has slowed down in recent weeks to stabilize to comparable results
to the 2019 period. In addition, online sales continued to increase
significantly during this period compared to the corresponding
period of 2019.
On May 25th, 2020, the
Quebec government authorized the
reopening of non-essential businesses situated in the Greater Montreal Area. This allowed the
Company to reopen a total of 31 of 32 stores across the province of
Quebec. Finally on June 1st, 2020 the Quebec government authorized the reopening of
commercial centers, therefore Ameublements Tanguay was able to
reopen its 11th store. As at June 1st,
2020, all of the 32 stores were fully operational. In-store
sales in the Greater Montreal Area
increased by 83% in the days following their reopening on
May 25th, 2020. However, the in-store
sales has slowed down in recent weeks to stabilize to comparable
results to the 2019 period. During the month of May 2020, the Company's online sales continued to
grow despite the gradual reopening of its stores.
The rehiring of temporarily laid-off employees is in progress
and proceeding as the situation evolves. The Company has actively
worked to promote a call-back of its employees as soon as possible
and according to operational needs.
As a result of the increase in sales since the gradual reopening
of our stores, the Company was able to call-back about 75% of its
sales staff. The Company must continue to respect social distancing
as well as the maximum number of people allowed in a commercial
establishment due to the regulations set by the provincial
government with COVID-19, thus limiting the number of possible
sales staff per store.
The new measure related to COVID-19 which the Company had to
implement in its stores and distribution centers and the effects of
the closures and re-openings of our stores had a significant impact
on the Company's financial results in the first semester. Despite
these additional costs, the Company still managed to improve its
operating results by approximately $2,976,000 before tax. Finally, since mid-June,
the Company has had issues with its supply logistics. Many of the
Company's suppliers, who have also been affected by the
consequences of COVID-19, are unable to honour and deliver placed
orders. This problem seems widespread in our industry and is not
unique to the Company. Therefore, it is possible that this could
have a negative impact on future results, because the Company has
orders on hand it may not be able to deliver due to this short
coming.
In this new economy the widespread cost restructuring as well as
technological and operational improvements has produced a massive
increase in unemployment rate in response to the COVID-19 pandemic.
In addition, to the increase in the cost of living and the high
level of Quebecers who are in debt are all factors which could
inhibit consumer spending in the near future.
As at July 31, 2020, cash and
investments had a market value of $211,314,000. The Company's financial position
will allow it to weather through this period of uncertainty with
more ease. Also, the Company owns nearly all of its stores and
distribution centers, which reduces pressure on cash flow
requirements.
Management is confident that the Company's operational
efficiency during this crisis, its market leadership and solid
financial position will allow us to emerge a stronger organization
even in these difficult market conditions.
We would like to take this opportunity to thank all our fellow
citizens who are relentlessly working day and night with extreme
dedication to reduce spread of COVID-19 and who to caring for those
who have been infected. Our thoughts are also with all those who
have in any way been affected by the virus.
Caution regarding forward-looking statements
This press release contains certain forward-looking statements
with respect to the Company. These forward-looking statements are
identified by the use of terms and phrases such as "anticipate",
"believe", "estimate", expect", "intend", "may", "plan", "predict",
"project", "will", "would", as well as the opposites of these terms
and similar terminology, including references to assumptions.
Forward-looking statements, by their nature, necessarily involve
risks and uncertainties that could cause actual results to differ
materially from those contemplated by these forward-looking
statements. Results indicated in forward-looking statements may
differ materially from actual results for a number of reasons,
which the Company has identified in the 2020 Annual Information
Form under "Narrative Description of the Business - Risk Factors",
and other risks detailed from time to time in the Company's
continuous disclosure documents.
The reader is cautioned that the factors we refer above are not
exhaustive of the factors that may affect any of the Company's
forward-looking statements. The reader is also cautioned to
consider these and other factors carefully and not to put undue
reliance on forward-looking statements.
The Company made a number of assumptions in making
forward-looking statements in this press release. The Company
considers the assumptions on which these forward-looking statements
are based to be reasonable.
These statements reflect current expectations regarding future
events and operating performance and speak only as of the date of
release of this press release and represent the Company's
expectations as of that date. The Company disclaims any intention
or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
other than as required by law.
Non International Financial Reporting Standards (IFRS)
financial measures
The Company discloses adjusted net earnings, which includes or
excludes certain amounts that are not considered representative of
the performance measures and financial recurrence of the Company.
Management believes that this measure is useful in understanding
and analyzing the operational performance of the Company and that
it can provide additional information.
Adjusted net earnings as well as same store revenues are not an
earnings measure recognized by IFRS and do not have a standardized
meanings prescribed by IFRS. Therefore, adjusted net earnings and
same store revenues as discussed in this press release may not be
compared to similar measures presented by other issuers. These
measures of performance should not be considered as alternatives to
indicators of performance calculated according to IFRS, but rather
as a source of additional information.
The Company discloses in this press release under the section
"Results" a reconciliation between net earnings and adjusted net
earnings.
BMTC Group Inc.'s Common Shares are listed on the Toronto Stock
Exchange and through its subsidiary Ameublements Tanguay Inc., and
its two divisions, Brault & Martineau and EconoMax, the Company
is a major retailer of furniture, electronic goods and household
appliances operating in the province of Quebec.
SOURCE BMTC Group Inc.