TORONTO, Nov. 9 /CNW/ -- Digital and Lifestyle Businesses Grow
Rapidly TORONTO, Nov. 9 /CNW/ - Indigo Books & Music Inc. (TSX:
IDG), Canada's largest book, gift and specialty toy retailer
reported a 3.8% growth in revenue for its second quarter ending
October 2, 2010. Revenue for the quarter was $214.8 million, up
$7.8 million from last year. On a comparable store basis, Indigo
and Chapters superstores posted a 0.7% decline in revenue, while
small format stores were down 4.8%. Commenting on the results, CEO
Heather Reisman said, "We are pleased with our top line revenue
growth, particularly in our rapidly growing digital business.
Consumers have responded very favourably to our Kobo eReader,
launched in the middle of our first quarter, and are showing even
greater response to the new Wi-Fi model launched this past
month." Ms. Reisman noted, "Our core retail book business
experienced a challenging quarter against a very strong line up of
titles in the same period last year. Our gift and toy
businesses continued to show significant growth and reinforced our
decision to expand these categories meaningfully in a majority of
stores moving forward." Net loss for the quarter was $1.7
million compared to a net profit of $2.2 million last year.
Ms. Reisman noted, "The increased loss was expected as we continue
to invest in the growth and development of our digital initiatives
and the re-development of our stores to accommodate growth in our
gift and toy businesses". The Board of Directors today also
approved a quarterly dividend of 11 cents per common share to be
paid on December 14(th), 2010, to all shareholders of record as of
November 30(th), 2010. During the quarter, Kobo, the global
eReading service of which Indigo owns 59%, announced plans for its
application to be preloaded on both the Samsung Galaxy and the
BlackBerry® PlayBook™ tablets. They also announced their 3rd
Quarter launch of the new Kobo Wireless eReader which adds Wi-Fi
connectivity, upgraded hardware with faster performance, longer
battery life, a sharper eInk screen and easy access to the Kobo
store hosting more than 2.2 million books. Shortly after the
close of the quarter, Kobo announced the addition of dozens of
newspaper and magazines to the assortment including The Globe and
Mail, The New York Times, The Wall Street Journal, and Harvard
Business Review. Kobo will continue to expand its
newspaper and magazine offering. Kobo also announced that it will
now be selling in 2,500 Walmart locations throughout the United
States, expanding on its current availability at Canadian Walmart
stores. Given the continued growth of Kobo's business, Kobo is
seeking to raise additional financing by way of a private placement
to cover working capital needs. The amount to be raised, the
financial terms, and the timing of the financing will be determined
by Kobo in consultation with its financial advisors. Also in the
second quarter, Indigo launched expanded toy sections in six stores
nationally, with the Company poised to become the largest specialty
toy retailer in Canada in time for the holiday period. Indigo also
hosted the first "Teen Read Awards", a three month national online
and in-store celebration of young adult fiction, where fans cast
over 300 thousand votes to select and honour their favourite books.
Forward-Looking Statements Statements contained in this news
release that are not historical facts are forward-looking
statements which involve risk and uncertainties that could cause
results to differ materially from those expressed in the
forward-looking statements. Among the key factors that could cause
such differences are: general economic, market or business
conditions in Canada; competitive actions by other companies;
changes in laws or regulations; and other factors, many of which
are beyond the control of the Company. Non-GAAP Financial Measures
The Company prepares its consolidated financial statements in
accordance with Canadian generally accepted accounting principles.
In order to provide additional insight into the business, the
Company has also provided non-GAAP data, including comparative
store sales growth, in the press release above. This measure does
not have a standardized meaning prescribed by GAAP, and is
therefore specific to Indigo and may not be comparable to similar
measures presented by other companies. Comparative store
sales growth is a key indicator used by the Company to measure
performance against internal targets and prior period results. This
measure is commonly used by financial analysts and investors to
compare Indigo to other retailers. Comparable store sales are
defined as sales generated by stores that have been open for more
than 12 months on a 52-week basis. About Indigo Books & Music
Inc. Indigo is a publicly traded Canadian company listed on the
Toronto Stock Exchange (TSX:IDG). As the largest book, gift and
specialty toy retailer in the country, Indigo operates in all
provinces under different banners including Indigo Books &
Music; Indigo Books, Gifts, Kids; Indigospirit, Chapters, The
World's Biggest Bookstore, and Coles. The online division,
www.chapters.indigo.ca, features books, eBooks, toys, music and
DVDs, and hosts the award winning Indigo Online Community. In 2008,
Indigo launched Pistachio, an eco-aware lifestyle store. In 2009,
Indigo spun off their digital eReading division to launch KOBO Inc.
- a leading destination for eReading. In 2004, Indigo founded the
Indigo Love of Reading Foundation, a registered charity that
provides new books and education materials to high-needs Canadian
elementary schools, to address the literacy crisis in Canada. To
date the Foundation has contributed $9 mm to schools in need. Visit
loveofreading.org for more information. To learn more about Indigo,
please visit the About Our Company section of
www.chapters.indigo.ca. Consolidated Balance Sheets (Unaudited) As
at As at As at October 2, September 26, April 3, (thousands of
dollars) 2010 2009 2010 ASSETS Current Cash and cash equivalents
59,350 78,589 103,489 Restricted cash 2,472 466 409 Accounts
receivable 10,535 8,470 8,455 Inventories 267,316 234,190 224,406
Income taxes recoverable 899 866 899 Prepaid expenses 22,152 6,577
6,771 Future tax assets 6,578 5,885 6,615 Total current assets
369,302 335,043 351,044 Property, plant and equipment 85,580 79,672
77,478 Intangible assets 26,781 18,393 23,794 Future tax assets
40,894 36,422 40,894 Goodwill 26,632 27,523 26,632 Total assets
549,189 497,053 519,842 LIABILITIES AND SHAREHOLDERS' EQUITY
Current Accounts payable and accrued 263,314 247,273 229,920
liabilities Deferred revenue 23,619 12,537 12,882 Current portion
of long-term debt 1,392 2,408 1,863 Total current liabilities
288,325 262,218 244,665 Long-term accrued liabilities 6,962 6,296
8,203 Long-term debt 2,347 1,827 1,174 Total liabilities 297,634
270,341 254,042 Non-controlling interest 3,738 - 6,831
Shareholders' equity Share capital 199,906 196,638 198,635
Contributed surplus 4,992 4,351 4,670 Retained earnings 42,919
25,723 55,664 Total shareholders' equity 247,817 226,712 258,969
Total liabilities and shareholders' 549,189 497,053 519,842 equity
Consolidated Statements of Earnings (Loss) and Comprehensive
Earnings (Loss) (Unaudited) 13-week 13-week 26-week 26-week
(thousands of period ended period ended period ended period ended
dollars, except October 2, September 26, October 2, September 26,
per share data) 2010 2009 2010 2009 Revenues 214,764 206,990
419,050 400,541 Cost of sales, 212,040 197,075 417,054 386,667
operations, selling and administration 2,724 9,915 1,996 13,874
Depreciation of 4,465 4,918 8,970 9,830 property, plant and
equipment Amortization of 2,518 2,124 4,930 3,965 intangible assets
6,983 7,042 13,900 13,795 Earnings (loss) (4,259) 2,873 (11,904) 79
before the undernoted items Interest on 10 61 43 118 long-term debt
and financing charges Interest income (104) (125) (184) (136) on
cash and cash equivalents Earnings (loss) (4,165) 2,937 (11,763) 97
before income taxes and non-controlling interest Income tax 458 737
37 201 expense Earnings (loss) (4,623) 2,200 (11,800) (104) before
non-controlling interest Non-controlling (2,814) - (4,683) -
interest Net earnings (1,809) 2,200 (7,117) (104) (loss) and
comprehensive earnings (loss) for the period Net earnings (loss)
per common share Basic $(0.07) $0.09 $(0.29) $(0.00) Diluted
$(0.07) $0.09 $(0.29) $(0.00) Consolidated Statements of Cash Flows
(Unaudited) 13-week 13-week 26-week 26-week period ended period
ended period ended period ended (thousands of October 2, September
26, October 2, September 26, dollars) 2010 2009 2010 2009 CASH
FLOWS FROM OPERATING ACTIVITIES Net earnings (1,809) 2,200 (7,117)
(104) (loss) Add (deduct) items not affecting cash Depreciation of
4,465 4,918 8,970 9,830 property, plant and equipment Amortization
of 2,518 2,124 4,930 3,965 intangible assets Stock-based 131 268
306 511 compensation Directors' 204 68 316 193 stock-based
compensation Future tax assets 458 832 37 296 Loss on disposal 2
165 69 173 of capital assets Non-controlling (2,814) - (4,683) -
interest Other 1,449 (70) 523 35 Net change in non-cash working
capital balances related to operations Accounts 292 (560) (2,080)
1,420 receivable Inventories (43,480) (25,982) (42,910) (12,423)
Prepaid expenses (16,204) (946) (15,381) (1,459) Income taxes -
(1,210) - (1,210) recoverable Deferred revenue 8,770 103 10,737 925
Accounts payable 40,017 49,587 32,153 13,915 and accrued
liabilities Cash flows used (6,001) 31,497 (14,130) 16,067 in
operating activities CASH FLOWS FROM INVESTING ACTIVITIES Change in
(1,276) (103) (2,063) (98) restricted cash Purchase of (10,535)
(13,567) (14,812) (16,805) property, plant and equipment Addition
of (4,438) (2,905) (7,917) (6,059) intangible assets Cash flows
used (16,249) (16,575) (24,792) (22,962) in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of (961) (762)
(1,627) (1,504) long-term debt Proceeds from 1,107 101 1,181 129
share issuances Repurchase of (74) - (387) - common shares Issuance
of 1,190 - 1,190 - equity securities by subsidiary to
non-controlling interest Dividends paid (2,729) (4,907) (5,451)
(4,907) Cash flows used (1,467) (5,568) (5,094) (6,282) in
financing activities Effect of foreign (1,247) 70 (123) (35)
currency exchange rate changes on cash and cash equivalents Net
increase (24,964) 9,424 (44,139) (13,212) (decrease) in cash and
cash equivalents during the period Cash and cash 84,314 69,165
103,489 91,801 equivalents, beginning of period Cash and cash
59,350 78,589 59,350 78,589 equivalents, end of period p
align="justify"Janet Egerbr/ Director, Public Relationsbr/ 416 342
8561br/ a href="mailto:jeger@indigo.ca"jeger@indigo.ca/a/p
Copyright
Indigo Books and Music (TSX:IDG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Indigo Books and Music (TSX:IDG)
Historical Stock Chart
From Jul 2023 to Jul 2024