Sainte-Julie, Quebec, April 19, 2012 – Groupe Bikini Village inc. (TSX: GBV) ("Groupe Bikini Village" or the "Corporation") today reported the results of its fourth quarter of 2011; notwithstanding lower sales, the Corporation maintained its EBITDA1 and increased its net earnings. The Corporation delivered these quarterly results, despite decreased sales, through a tight control on expenses.
2011 fourth quarter results
Net sales for the fourth quarter, which ended January 28, 2012, were $13.1 million, compared to $13.8 million in the corresponding quarter of the previous year, a decrease of 5.3%. Comparable sales, which compares the sales from the same number of stores year-over-year, decreased by 2.4% for the quarter.
The Corporation’s operating margin (EBITDA1) for the fourth quarter was $2 million, consistent with the $2 million operating margin (EBITDA1) it achieved in the same period in 2010. Groupe Bikini Village maintained its operating margin – despite lower sales and the related reduced contribution – through reductions in operating expenses. Stores not performing according to our standards were closed and the Corporation benefited from decreased incentive compensation due to lower sales volume compared to 2010, which also helped decrease spending. The decline in the marginal contribution of sales can be mainly explained by the decrease in sales and a slight decrease in gross margin.
For the quarter ended January 28, 2012, the Corporation registered $1.3 million in earnings before income tax expenses, as compared to earnings before income tax expense of $846,000 for the same previous-year period. The earnings before income tax expense for the fourth quarter of 2011 reflects net impairment loss on capital assets of $43,000 compared to $505,000 in the fourth quarter of 2010.
The Corporation’s net earnings for the quarter ended January 28, 2012 were $942,000 ($0.49 per share, basic and diluted), as compared to net earnings of $584,000 ($0.31 per share, basic and diluted) for the same quarter in the previous year.
Results for 2011
Net sales for 2011 were $43.2 million, down from $44.6 million in the previous year, a decrease of 3.1%. Comparable sales were 1% lower in 2011 than in 2010.
Groupe Bikini Village delivered EBITDA1 of $2.5 million in the year ended January 28, 2012, compared to EBITDA1 of $3 million in the previous year. The underlying reasons for the negative variance in EBITDA1 for 2011 compared to 2010 is a decrease in sales due to the late arrival of summer weather conditions; a very mild winter and low consumer confidence in Canada, partially offset by a reduction in occupancy costs due to the reduced number of stores in operation and lower incentive compensation compared to 2010.
For the year ended January 28, 2012, the Corporation registered $122,000 in earnings before income tax expense, compared to earnings before income tax expense of $51,000 for 2010. The earnings before income tax expense for 2011 reflects net impairment loss on capital assets of $43,000, as compared to $505,000 in 2010.
For 2011, net earnings totalled $14,000 ($0.01 per share basic and diluted), as compared to net earnings of $18,000 ($0.01 per share*, basic and diluted) in 2010.
Since the first quarter of 2011, Groupe Bikini Village has reported its financial results in accordance with International Financial Reporting Standards (“IFRS”), including comparative information. The changeover to IFRS has had impacts on a number of aspects of the Corporation’s financial reporting; these are highlighted in Note 24 to the audited financial statements.
“Our retail markets have witnessed a wide range of challenges in recent quarters, from sustained weather anomalies to economic downturns – but Groupe Bikini Village’s flexible and disciplined management strategy has enabled the Corporation to mitigate negative impact and retain the required level of financial flexibility to achieve our 2012 goals ,” said Yves Simard, President and CEO of Groupe Bikini Village inc.
In the year ahead, Groupe Bikini Village intends to leverage its positive financial condition, and the flexibility it give us, to continue improving its offering to customers. “Our fundamental promise to our customers is selection ensured by the arrival of trendy fresh goods every month, quality, and service in an attractive and comfortable environment – and we will continue to invest in our retail network, our product mix and our people to ensure we live up to that promise every day. Forecasts for our market call for continued pressure on retailers like Groupe Bikini Village in 2012; accordingly, we will focus our efforts on ensuring our systems work as efficiently as possible, and leveraging our every strengths. As our 2011 performance illustrates, our business strategies give us the ability to drive performance and mitigate negative impact even when external factors pressure sales,” Mr. Simard said.
Groupe Bikini Village inc.’s full 2011 annual report, 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, serving Canadians for more than a quarter-century, is a leading swimwear retailer 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 accessories, and cruisewear, 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 56 stores and employs approximately 475 people; its securities trade on the Toronto Stock Exchange under the stock symbol GBV. For more information about the Corporation, please visit our website at www.bikinivillage.com.
* After taking into account the 1 for 125 stock consolidation which took effect on September 30, 2010.
1 The term EBITDA (earnings before finance costs, income taxes, depreciation, amortization, impairment, 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 29, 2011, dated December 7, 2011, entitled “Non-GAAP Financial Measures” available on SEDAR at www.sedar.com.
2 To be read in conjunction with “Forward-looking Statements” below.
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.
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For more information, please contact:
President and Chief Executive Officer
(450) 449-1310 ext 4797
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