Le Lézard
Classified in: Business, Covid-19 virus
Subject: ERN

Birks Group Reports its Mid-Year FY2021 Results


MONTREAL, Nov. 25, 2020 /CNW Telbec/ - Birks Group Inc. (the "Company" or "Birks Group") (NYSE American: BGI), today reported its financial results for the twenty-six week period ended September 26, 2020.

Highlights

All figures presented herein are in Canadian dollars.

The Company's financial results for the twenty-six week period ended September 26, 2020 were significantly impacted by the COVID-19 pandemic, most notably by the temporary closure of the Company's stores from the start of the fiscal year through June 2020 as a consequence of the restrictions imposed by provincial government authorities.  

In the twenty-six week period ended September 26, 2020, the Company achieved net sales of $57.0 million, a decrease of $28.3 million, or 33.2%, from the comparable prior period in fiscal 2020, yielding gross profit of $22.8 million, a decrease of $9.8 million, or 30.0%, compared to the same period in fiscal 2020, as a direct result of the negative impact of COVID-19. Gross profit as a percentage of sales was 40.1%, an increase of 190 basis points from the gross profit as a percentage of sales of 38.2% in the twenty-six week period ended September 28, 2019.  Despite the decline in sales and gross profit volumes, the Company was able, through its proactive management of the impact of the pandemic, to control costs. Total operating expenses was $24.2 million in the twenty-six week period ended September 26, 2020, representing a decrease of $10.4 million, or 30.1%, as compared to same period in fiscal 2020. Overall, the Company reported a net loss of $2.8 million, an improvement of $1.8 million, or 38.3%, compared to the twenty-six week period ended September 28, 2019. A significant factor leading to the overall improvement was the fact that during the second thirteen-week period ended September 26, 2020, subsequent to the re-opening of our store network, the Company generated a 4% increase in comparable store sales.

As of July 2020, the Company had re-opened all of its 30 stores, albeit at reduced operating hours. As a result of provincial restrictions to address the "second wave" of the COVID-19 pandemic, our Winnipeg store is currently temporarily closed for in-person shopping for a four-week period since November 12, 2020 and six of our Ontario stores, including our Bloor street flagship store, are also temporarily closed for in-person shopping,  for a four-week period since November 23, 2020. However, all of the affected stores remain available for concierge telephone service and curbside pickup.

Mr. Jean-Christophe Bédos, President and Chief Executive Officer of Birks Group, commented: "Since the start of the fiscal year, we have shown great resilience and agility in taking the necessary steps to mitigate the negative impacts of the COVID-19 pandemic on the Company, notably by managing liquidity tightly, by working with our various partners and stakeholders to contain costs, by increasing our focus on generating revenues from our e-commerce business and concierge service, and by adapting to emerging trends to better serve our clients. At the outset of the pandemic, we established a cross-functional management team that reviewed business goals, objectives and processes in order to steer the Company through this global crisis and protect the well-being of our employees, clients, partners and communities. The cross-functional management team continues to monitor the situation very closely, on a provincial, national and global basis."  

Mr. Bédos further commented: "Thanks to the dedication of our employees and the support from our key stakeholders and partners, we have been able to achieve improved results in the twenty-six week period ended September 26, 2020 as compared to last year. Our fiscal discipline during the period has also allowed us to deliver improvements to results from operations. As we continue to navigate through the pandemic, I believe that the actions we have taken since the start of the fiscal year and during the pandemic, has better positioned the Company for managing challenges through uncertain times."

Financial overview for the twenty-six week period ended September 26, 2020:

About Birks Group Inc.

Birks Group is a leading designer of fine jewellery, timepieces and gifts and operator of luxury jewellery stores in Canada. As of November 25, 2020, the Company operates 26 stores under the Maison Birks brand in most major metropolitan markets in Canada, one retail location in Calgary under the Brinkhaus brand, one retail location in Vancouver operated under the Graff brand and one location in Vancouver under the Patek Philippe brand. Bijoux Birks fine jewellery collections are also available through Mappin & Webb and Goldsmiths locations in the United Kingdom in addition to several jewellery retailers across North America. Birks was founded in 1879 and has become Canada's premier retailer and designer of fine jewellery, timepieces and gifts. Additional information can be found on Birks' web site, www.birks.com.

Forward Looking Statements

This press release contains forward- looking statements which can be identified by their use of words like "plans," "expects," "believes," "will," "anticipates," "intends," "projects," "estimates," "could," "would," "may," "planned," "goal," and other words of similar meaning. All statements that address expectations, possibilities or projections about the future, including without limitation, statements about our strategies for growth, expansion plans, sources or adequacy of capital, expenditures and financial results are forward-looking statements.

Because such statements include various risks and uncertainties, actual results might differ materially from those projected in the forward- looking statements and no assurance can be given that the Company will meet the results projected in the forward-looking statements. These risks and uncertainties include, but are not limited to the following: (i) the magnitude and length of economic disruption as a result of the worldwide COVID-19 outbreak, including its impact on macroeconomic conditions, generally, as well as its impact on the results of operations and financial condition of the Company and the trading price of the shares; (ii) economic, political and market conditions, including the economies of Canada, and the U.S., which could adversely affect our business, operating results or financial condition, including our revenue and profitability, through the impact of changes in the real estate markets, changes in the equity markets and decreases in consumer confidence and the related changes in consumer spending patterns, the impact on store traffic, tourism and sales; (iii) the impact of fluctuations in foreign exchange rates, increases in commodity prices and borrowing costs and their related impact on the Company's costs and expenses; (iv) changes in interest rates; (v) the Company's ability to maintain and obtain sufficient sources of liquidity to fund its operations, to achieve planned sales, gross margin and net income, to keep costs low, to implement its business strategy, maintain relationships with its primary vendors, to mitigate fluctuations in the availability and prices of the Company's merchandise, to compete with other jewelers, to succeed in its marketing initiatives, and to have a successful customer service program; (vi) the Company's ability to continue to borrow under its credit facilities, (vii) the Company's ability to maintain profitable operations, as well as maintain specified excess availability levels under its credit facilities, make scheduled payments of principal and interest, and fund capital expenditures; (viii) the Company's financial performance in the second half of fiscal 2021 and the level of capital expenditures requirements related to renewing store leases; (ix) the Company's ability to execute its strategic vision; and * the Company's ability to continue as a going concern.

Information concerning factors that could cause actual results to differ materially is set forth under the captions "Risk Factors" and "Operating and Financial Review and Prospects" and elsewhere in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission on July 8, 2020 and subsequent filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this statement or to reflect the occurrence of unanticipated events, except as required by law.

BIRKS GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ? UNAUDITED









26 weeks ended
September 26, 2020



26 weeks ended
September 28, 2019







Net sales


$

57,025



$

85,343

Cost of sales



34,182




52,719

Gross profit



22,843




32,624

Selling, general and administrative expenses



21,404




32,289

Depreciation and amortization



2,829




2,386

Total operating expenses



24,233




34,675

Operating loss



(1,390)




(2,051)

Interest and other financial costs



1,437




2,417

Loss from continuing operations



(2,827)




(4,468)

Income taxes (benefits)



-




-

Net loss from continuing operations



(2,827)




(4,468)

(Loss) income from discontinued operations, net of tax



-




(117)

Net loss


$

(2,827)



$

(4,585)




Weighted average common shares outstanding








   Basic



17,971




17,965

   Diluted



17,971




17,965

Net loss per common share








   Basic


$

(0.16)



$

(0.26)

   Diluted


$

(0.16)



$

(0.26)

Net loss from continuing operations per common share








   Basic


$

(0.16)



$

(0.25)

   Diluted


$

(0.16)



$

(0.25)

 

BIRKS GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS ? UNAUDITED





As of


September 26, 2020


March 28, 2020


(In thousands)

Assets






Current assets:






Cash and cash equivalents

$

2,408


$

565

Accounts receivable and other receivables


6,274



6,019

Inventories


100,327



101,899

Prepaids and other current assets


2,030



2,007

Total current assets


111,039



110,490







Long-term receivables


4,725



4,538

Property and equipment


24,310



26,613

Operating lease right-of-use asset


60,973



64,069

Intangible assets and other assets


4,931



4,942

Total non-current assets


94,939



100,162

Total assets

$

205,978


$

210,652







Liabilities and Stockholders' Equity






Current liabilities:






Bank indebtedness

$

59,951


$

58,035

Accounts payable


36,157



48,183

Accrued liabilities


7,145



4,661

Current portion of long-term debt


2,569



64

Current portion of operating lease liabilities


5,754



5,823

Total current liabilities


111,576



116,766







Long-term debt


23,551



16,217

Long-term portion of operating lease liabilities


69,189



72,636

Other long-term liabilities


1,021



1,623

Total long-term liabilities


93,761



90,476

Stockholders' equity:






Class A common stock ? no par value, unlimited shares authorized, issued and outstanding 10,252,911


35,613



35,613

Class B common stock ? no par value, unlimited shares authorized, issued and outstanding 7,717,970


57,755



57,755

 Preferred stock ? no par value, unlimited shares authorized, none issued


?



?

Additional paid-in capital


19,131



19,131

Accumulated deficit


(111,689)



(108,862)

Accumulated other comprehensive loss


(169)



(227)

Total stockholders' equity


641



3,410

Total liabilities and stockholders' equity

$

205,978


$

210,652

 

SOURCE Birks Group Inc.


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