Groupe Bikini Village inc. Reports its Results for the Third Quarter of 2012

Marketwired

SAINTE-JULIE, QUEBEC--(Marketwire - Dec 6, 2012) - Groupe Bikini Village inc. (GBV.TO) ("Groupe Bikini Village" or the "Corporation") today reported the results of its third quarter of 2012. The Corporation experienced a decline in sales following the closure of under-performing stores, as well as reduced sales in comparable stores due to the challenging retail environment, especially in Ontario.

2012 third quarter results

Net sales for the third quarter, which ended October 27, 2012, were $6.2 million, compared to $6.6 million in the corresponding period the previous year. Comparable sales, which compares the sales from the same number of stores year-over-year, decreased by 5.6% for the quarter.

The Corporation''s operating loss (EBITDA1) for the third quarter was $1.9 million, compared to operating loss (EBITDA1) of $1.5 million for the third quarter of the previous year. The increase in the operating loss is principally due to a decrease in the marginal contribution, which is affected by lower sales volume compared to 2011 as well as a decrease in gross margins which resulted from promotional activities undertaken to stimulate sales.

For the quarter ended October 27, 2012, the Corporation''s net loss was $1.8 million (($0.93) per share, basic and diluted), as compared to net loss of $1.5 million (($0.77) per share, basic and diluted) for the same quarter in the previous year.

The Corporation''s activities are seasonal, and merchandise sales are generally higher in the second and fourth quarters. As a result, the operating loss for the quarter ended October 27, 2012 is not necessarily indicative of the operating results for a full year.

Results for the first nine months of 2012

Net sales for the nine-month period ended October 27, 2012 were $29.6 million, down from $30.1 million in the corresponding period of the previous year. Comparable sales were 1.2% lower in the first nine months of 2012 than they were in the first nine months of 2011. 

The operating loss (EBITDA1) for the nine-month period ended October 27, 2012 was $259,000, compared to positive EBITDA1 of $432,000 in the comparable nine-month period in the previous year. The negative variance in EBITDA1 for this period was the result of decreased sales revenues caused by additional promotional activities required in the competitive summer season, as well as a continuing challenging retail environment in the third quarter and the lower gross margins resulting from it.

For the nine-month period ended on October 27, 2012, net loss totalled $1.3 million (($0.70) per share basic and diluted), as compared to net loss of $0.9 million (($0.49) per share, basic and diluted) in the same period of 2011.

Outlook 2

"Because the economy continues to be impacted by uncertainty and ambivalence, short-term prospects are modest; a reduction in consumer spending for non-essential goods could result," said Mr. Simard President and CEO of Groupe Bikini Village inc.. "We expect our market to remain highly-competitive and price-sensitive, which will continue to put pressure on our comparable sales."

"While the current environment is challenging, the work we have undertaken in recent years has prepared us well - and the foundations for creating value for our shareholders are in place," Mr. Simard said. "In the coming months, we plan to achieve our business objectives as well as our goal to increase shareholder value by focussing on customer-centric activities that drive revenues, cash generation and profits."

Mr. Simard indicated that acquisition and retention of new and existing customers, respectively, through an approach focussed on the needs and wants of Groupe Bikini Village''s most valuable customer segments, will be a Corporation''s priority.

"We will also persist in our efforts to identify and take advantage of opportunities to create long-term value," Mr. Simard said.

Groupe Bikini Village inc.''s full third quarter 2012 report, as well as previous shareholder reports and other information of interest to investors, are available on SEDAR at www.sedar.com, and on the Corporation''s website at www.bikinivillage.com.

About Groupe Bikini Village

Groupe Bikini Village inc., serving Canadians for more than a quarter-century, is a leader in the retail sale of beachwear products, with a network of new and renovated boutiques across Eastern Canada. In its bright and inviting stores with comfortable change rooms and knowledgeable staff, Groupe Bikini Village helps its customers choose from among Canada''s widest selection of swimsuits, beach and cruise wear and accessories, in the most popular brands the industry has to offer and in styles to suit every figure. Headquartered in Sainte-Julie, Quebec, Groupe Bikini Village operates 55 stores and employs approximately 450 people; its securities trade on the Toronto Stock Exchange under the stock symbol GBV. For more information about Groupe Bikini Village, please visit our website at www.bikinivillage.com.

Notes

1 The term EBITDA (earnings before net finance costs, income taxes, depreciation, amortization, net impairment loss, reorganization fees and unusual items) does not have any standardized meaning prescribed by Canadian Generally Accepted Accounting Principles applicable to publicly accountable enterprises ("GAAP") and may not be comparable to similarly-titled measures presented by other companies. Please refer to the section of Groupe Bikini Village inc''s MD&A for the for the nine-month period ended October 27, 2012, dated December 6, 2012, entitled "Non-GAAP Financial Measures." It is available on SEDAR at www.sedar.com.

2To be read in conjunction with "Forward-looking statements" below.

Forward-looking statements

This news release contains certain forward-looking statements concerning Groupe Bikini Village inc.''s future operations, economic performance, financial conditions and financing plans. These statements are based on certain assumptions and analyses made by management in light of their experience and their perception of historical trends, current conditions and expected future developments, as well as other factors they believe are appropriate under the circumstances. However, whether actual results and developments will conform to management''s expectations and predictions is subject to a number of risks, uncertainties and assumptions. Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements, and there can be no assurance that the results or developments anticipated by management will be realized or, even if substantially realized, that they will have the expected consequences or effects on the Corporation. Management undertakes no obligation and does not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable law.

   
GROUPE BIKINI VILLAGE INC.  
STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS  
(in thousands of Canadian dollars, except amounts related to shares)  
(unaudited)  
                       
  Three months ended     Nine months ended  
  October 27, 2012     October 29, 2011     October 27, 2012     October 29, 2011  
                       
                               
Revenues $ 6,246     $ 6,594     $ 29,553     $ 30,126  
                               
Cost of goods sold   2,973       2,931       13,459       13,293  
                               
                               
Gross profit   3,273       3,663       16,094       16,833  
                               
Operating and administrative expenses   5,540       5,485       17,400       17,451  
                               
Net finance costs   143       188       470       607  
                               
Loss before income tax recovery   (2,410 )     (2,010 )     (1,776 )     (1,225 )
                               
Income tax recovery   (631 )     (545 )     (445 )     (297 )
                               
                               
NET LOSS AND COMPREHENSIVE LOSS (1) $ (1,779 )   $ (1,465 )   $ (1,331 )   $ (928 )
                               
                               
                               
LOSS PER SHARE                              
  Basic and diluted   (0.93 )     (0.77 )     (0.70 )     (0.49 )
                               
                               
                               
Weighted average number of oustanding shares                              
  Basic and diluted   1,910,920       1,910,597       1,910,705       1,910,597  
                               
                               
                               
                               
                               
(1) A reconciliation of net loss and comprehensive loss to earnings before interest, taxes, depreciation and amortization ("EBITDA") is as follows:  
                               
                               
Net loss and comprehensive loss $ (1,779 )   $ (1,465 )   $ (1,331 )   $ (928 )
                               
Income tax recovery   (631 )     (545 )     (445 )     (297 )
                               
Net finance costs   143       188       470       607  
                               
Depreciation and amortization of capital and intangible assets   357       327       1,047       1,050  
                               
                               
EBITDA $ (1,910 )   $ (1,495 )   $ (259 )   $ 432  
                               
                               
                               
Contact:
Yves Simard
President and Chief Executive Officer
(450) 449-1310 ext 4797
ysimard@bikinivillage.com

View Comments