BMTC Group Inc. Announces Financial Results for its Quarter Ended October 31st, 2018

MONTREAL, Dec. 6, 2018 /CNW Telbec/ -

Results *

For the nine month period ended October 31st, 2018, the Company's revenues increased by $915,000 to $565,949,000, compared to $565,034,000 recorded in the period ended September 30th, 2017. Same store revenues grew by 2.5% during the same period. Net earnings for the nine month period ended October 31th, 2018, amounted to $33,352,000 compared to $31,615,000 for the period ended September 30th, 2017. Basic net earnings per share amounted to $0.95 compared to $0.86 in 2017.

The effect of the cost of options had no impact on basic net earnings per share for the nine month period ended October 31st, 2018 and for the nine month period ended September 30th 2017. 

During the nine moth period ended October 31st, 2018, the Company proceeded with the sale of the Repentigny store for an amount of $9,000,000 resulting in an after tax gain of $4,522,000 or $0.13 per basic share.

For the nine month period ended October 31st, 2018, the share repurchase program contributed to an increase in basic net earnings per share of $0.04.

Excluding all these effects, the variation to the adjusted net earnings would have been ($2,927,000) or ($0.08) per basic share for the nine month period ended October 31st, 2018.

The ($2,927,000) variation in adjusted net earnings is as follows:

* The Company proceded to change it's financial year end date from December 31st to January 31st. This change came into effect with the 2018 financial year end, therefore the accounting period of the 2018 consolidated financial statements corresponds to a 13 month period ending January 31st, 2018 compared to a 12 month period for the current consolidated financial statements. Starting February 1st, 2018, these unaudited interim financial statements will correspond to the quarters ending in April 30th, July 31st and October 31st.

Net earnings per quarter is not comparable following the modification of the quarterly periods for the current fiscal year. The nine month period ended October 31st, 2018 does however allow more adequate comparison. The decrease in adjusted net earnings after the nine month period, is due to the decrease in gross margins and the increase in sales financing fees.

This variation in adjusted after-tax income is allocated throughout the quarters as follows:

Financial Position and Dividends

Cash and investments increased by $26,626,000 during the nine month period ended October 31st, 2018. Investments consist primarily of bank notes and common stocks, which at the close of the quarter had a market value of $117,474,000 (including cash).

As of October 31st, 2018, the working capital showed a surplus of $18,363,000 an increase of $26,694,000 compared to January 31st, 2018. The Company's shareholders' equity, at the end of the nine month period ended October 31st, 2018, increased from $204,376,000 as at January 31st, 2018 to $226,664,000 as at October 31st, 2018. As of October 31st, 2018, the book value per share stood at $6.53, compared to $5.82 as at January 31st, 2018.

Pursuant to the normal course issuer bid put in place on March 23th, 2017, and renewed on April 13th 2018, accordingly, 401,800 Common Shares were repurchased and cancelled by the Company. As a result of this change, the Company had as of October 31st, 2018, 34,718,200 Common Shares issued and outstanding.

During the nine month period ended October 31st, 2018, no options were granted or exercises. During the nine month period ended October 31st, 2018, 21,900 options were cancelled.  As at October 31st, 2018, options for 197,100 Common Shares, representing 0.57% of the Company's outstanding shares remain issued and 5,710,864 authorized share options, representing approximately 16.45% of the Company's outstanding shares, may still be granted pursuant to the Plan. The issued and outstanding options may be exercised at a price of $17.85 per Common Shares.

A semi-annual eligible dividend of $0.14 per Common Share has been declared to holders registered at the close of business on December 21st, 2018 which will be payable on January 3rd, 2019.

For the quarter ended October 31st, 2018, the Company's revenues decreased by $19,607,000 to $184,115,000, compared to $203,772,000 recorded in the quarter ended September 30th, 2017, a 9.6% decrease. Same store revenues grew by 0.3% during the same period. Net earnings for the quarter ended October 31st, 2018, amounted to $11,613,000 compared to net earnings of $17,544,000 for the quarter ended September 30th, 2017. Basic net earnings per share decreased to $0.34 compared to $0.48 in 2017.

The effect of the cost of options had no impact on basic net earnings per share for the three month periods ended October 31st, 2018 and the three month period ended September 30th, 2017.

For the three month period ended October 31st, 2018, the share repurchase program contributed to an increase in basic net earnings per share of $0.03.

Excluding all these effects, the variation to the adjusted net earnings would have been ($6,011,000) or ($0.17) per basic share for the three month period ended October 31st, 2018.

The ($6,011,000) variation in adjusted net earnings in 2018 is as follows for the three month period ended October 31st, 2018 is as follow:

Operations

BMTC Inc.

The Company proceeded to change its financial year end date from December 31st to January 31st. This change came into effect with the 2018 financial year end, therefore the accounting period of the 2018 consolidated financial statements corresponds to a 13 month period ending January 31st, 2018 compared to a 12 month period for the current consolidated financial statements. Starting February 1st, 2018, these unaudited interim financial statements will correspond to the quarters ending in April 30th, July 31st and October 31st.

The Company continues to restructure all of its websites and the first phase of the implementation of a distinct e-commerce platform for its banner Brault & Martineau and EconoMax is now completed and operational. The process of implementation will continue throughout 2018 and 2019 for the following phases as well as the restructuring for all the other banners of the Company. The Company is also reviewing its IT systems in to order standardise them throughout the banners, as well as to allow them to be more aligned with our e-commerce strategies. Following this evaluation, the Corporation decided to invest and to modify its existing IT systems, the integration and implementation will continue for a 3 to 5 year period. The cost of these modifications are estimated to be $17,000,000. A portion of these costs, $9,686,000 were incurred and the balance will be recorded in the subsequent years.

On October 11th, 2018, Raymond Chabot Grant Thornton S.E.N.C.R.L.  resigned as auditor of the Company at the request of the Company. The Board of Directors of the Company, upon recommendation of the Audit Committee of the Board of Directors of the Company, approved the appointment of the Successor Auditor to fill the vacancy created by the resignation of the Former Auditor and to hold such position until the next annual meeting of shareholders of the Company.

There were no modifications of opinion by the Former Auditor in the Former Auditor's reports on the Company's financial statements for the two most recently completed fiscal years ended December 31, 2016 and January 31, 2018.

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 negative 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 2018 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 performance measures for the Company. Management believes that this measure is useful in understanding and analysing the operational performance of the Company and more appropriate to provide additional information.

The Company also discloses same store revenues, which have been realised in stores opened or closed for comparable months.

Adjusted net earnings as well as same store revenues are not an earnings measure recognised by IFRS and does not have a standardised meaning prescribed by IFRS. Therefore, adjusted net earnings and same store revenues as discussed in this MD&A may not be compared to similar measures presented by other issuers. This measure of performance should not be considered as an alternative as an indicator of performance calculated according to IFRS, but rather as additional information.

The Company discloses in this MD&A 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.