MONTRÉAL, Sept. 9, 2021 /CNW/ -
Results
For the first semester ended July 31,
2021, the Company's revenues increased by $132,414,000 to $408,832,000 compared to $276,418,000 recorded in the corresponding 2020
period, a 48% increase. Net earnings for first semester ended
July 31, 2021, amounted to
$39,162,000 compared to $7,152,000 recorded in the corresponding 2020
period. Basic net earnings per share amounted to $1,16 compared to $0.21 recorded in the corresponding 2020
period.
For the first semester ended July 31,
2021, the share repurchase program contributed to an
increase in basic earnings of 0.01$ per share where during the
corresponding 2020 period, it had no impact on basic net earnings
or losses per share.
The Company met the eligibility criteria for the Canadian
Emergency Wage Subsidy (CEWS) during the last quarter ended
April 30, 2021. The Company
received $1,244,000 after-tax which
contributed to an increase of $0.04
on basic net earnings per share.
The Company has chosen to provide readers in this quarterly
management report the results for the comparable periods ending
July 31, 2019 and 2018 in addition to
those of July 31, 2020. Management
believes that the results for the corresponding period of 2020 are
not representative of the normal course results of the company. The
impact of COVID-19 on the corresponding period 2020 makes it
difficult to compare and analyze the results.
The variation in adjusted net earnings would be $30,766,000 or $0.90 per basic share for the semester period
ended July 31, 2021, as well as the
comparable periods of 2019 and 2018 is explained as follows:
|
|
|
|
|
(Unaudited and $ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
July 31,
2021
|
|
July 31,
2020
|
|
July 31,
2019
|
|
July 31,
2018
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
|
39
162
|
|
7 152
|
|
10 025
|
|
21 739
|
Gain on disposal of
fixed assets (after-tax)
|
-
|
|
-
|
|
-
|
|
(4 522)
|
Variation in cost of
options (after-tax)
|
|
-
|
|
-
|
|
(85)
|
|
(162)
|
CEWS
(after-tax)
|
|
|
(1
244)
|
|
-
|
|
-
|
|
-
|
Adjusted net
earnings
|
|
|
37
918
|
|
7 152
|
|
9 940
|
|
17 055
|
|
|
|
|
|
|
|
|
|
|
|
Minus: Adjusted net
earnings for the previous period
|
7
152
|
|
9 940
|
|
17 055
|
|
13 971
|
|
|
|
|
|
|
|
|
|
|
|
Variation
|
|
|
|
30
766
|
|
(2 788)
|
|
(7 115)
|
|
3 084
|
The variations in net adjusted earnings is allocated as follows
for the six month periods ended July 31,
2021, 2020, 2019 and 2018:
|
|
|
(Unaudited and $ in
thousands)
|
|
|
|
|
|
|
|
Increase
|
|
Increase
|
|
Increase
|
|
(decrease)
|
|
(decrease)
|
|
(decrease)
|
|
in
adjusted
|
|
in retail
operations
|
|
in
investment
|
|
net
earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at April 30,
2021
|
5 733
|
|
15 929
|
|
21 662
|
As at July 31,
2021
|
7
524
|
|
1
580
|
|
9
104
|
Total
|
13
257
|
|
17
509
|
|
30
766
|
|
|
|
|
|
|
As at April 30,
2020
|
784
|
|
(9 695)
|
|
(8 911)
|
As at July 31,
2020
|
1 707
|
|
4 416
|
|
6 123
|
Total
|
2
491
|
|
(5
279)
|
|
(2
788)
|
|
|
|
|
|
|
|
|
|
As at April 30,
2019
|
(5 586)
|
|
1 924
|
|
(3 662)
|
As at July 31,
2019
|
(1 869)
|
|
(1 584)
|
|
(3 453)
|
Total
|
(7
455)
|
|
340
|
|
(7
115)
|
|
|
|
|
|
|
|
|
|
As at April 30,
2018
|
1 934
|
|
(1 815)
|
|
119
|
As at July 31,
2018
|
1 870
|
|
1 095
|
|
2 965
|
Total
|
3
804
|
|
(720)
|
|
3
084
|
During the first semester ended July 31,
2021, the Company managed to improve its retail operating
results by $18,304,000 or an
after-tax increase of $13,293,000.
Annual financial information
($ in thousands, except
for per share amounts)
|
|
|
|
January 31,
2021
|
|
January
31, 2020
|
|
January 31,
2019
|
|
January 31,
2018
|
|
|
|
|
|
|
|
|
|
|
(13
months)
|
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
Revenue
|
|
649
056
|
|
720 169
|
|
742 474
|
|
812 689
|
Net
earnings
|
|
|
54
842
|
|
36 034
|
|
45 165
|
|
49 335
|
Total
assets
|
|
|
450
207
|
|
382 040
|
|
367 624
|
|
312 569
|
|
|
|
|
|
|
|
|
|
Net earnings per
share
basic and
diluted
|
|
1,61
|
|
1,05
|
|
1,29
|
|
1,36
|
Dividends per
share
|
|
|
0,29
|
|
0,28
|
|
0,28
|
|
0,24
|
Financial position and dividends
Cash, net of the bank overdraft, and investments increased by
$73,397,000 during the first semester
ended July 31, 2021. Investments
consist of treasuries bearing interest, government and corporate
bonds and common shares, which at the close of the semester had a
market value of $248,489,000
(including cash net of bank overdraft).
As at July 31, 2021, the working
capital showed a deficit of $24,025,000, a decrease of $10,581,000 compared to the year ended
January 31, 2021. The Company's
shareholders' equity increased from $270,708,000 as at January
31, 2021, to $301,610,000 as
at July 31, 2021. As at July 31, 2021, the book value per share stood at
$8,96, compared to $7.99 as at January 31,
2021.
Pursuant to the normal course issuer-bid put in place on
April 15, 2020, and renewed on
April 15, 2021, accordingly,
201,200 common shares were repurchased and cancelled by the
Company. As a result of this change, the Company had as at
July 31, 2021, 33,678,800 common
shares issued and outstanding.
During the semester ended July 31,
2021, no options were granted. The Company may still grant
pursuant to the Plan a total of 5,710,864 options, representing
16.96% of the issued and outstanding shares of the Company.
Quarterly results *
(Unaudited and $ in thousands,
except for per share amounts)
|
April
30
|
|
April 30
|
|
April 30
|
|
April 30
|
|
2021
|
|
2020
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Revenue
|
177
208
|
|
100 445
|
|
150 310
|
|
162 754
|
Net (loss)
earnings
|
10
479
|
|
(12 427)
|
|
(3 455)
|
|
4 806
|
Net (loss) earnings
per share
|
|
|
|
|
|
|
|
Basic and diluted
|
0,31
|
|
(0,36)
|
|
(0,10)
|
|
0,13
|
|
|
|
|
|
|
|
|
|
July
31
|
|
July 31
|
|
July 31
|
|
July 31
|
|
2021
|
|
2020
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Revenue
|
231
624
|
|
175 973
|
|
215 067
|
|
220 368
|
Net
earnings
|
28
683
|
|
19 579
|
|
13 480
|
|
16 933
|
Net earnings per
share
|
|
|
|
|
|
|
|
Basic and diluted
|
0,85
|
|
0,57
|
|
0,39
|
|
0,48
|
|
|
|
|
|
|
|
|
|
|
|
October
31
|
|
October 31
|
|
October 31
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
194
352
|
|
183 312
|
|
184 718
|
Net
earnings
|
|
|
20
775
|
|
10 649
|
|
11 613
|
Net earnings per
share
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
0,61
|
|
0,31
|
|
0,34
|
|
|
|
|
|
|
|
|
|
|
|
January
31
|
|
January 31
|
|
January 31
|
|
|
|
2021
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
178
286
|
|
171 480
|
|
174 634
|
Net
earnings
|
|
|
26
915
|
|
15 360
|
|
11 813
|
Net earnings per
share
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
0,79
|
|
0,45
|
|
0,34
|
For the three month period ended July 31,
2021, the Company's revenues increased by $55,561,000 to $231,624,000, compared to $175,973,000 recorded for the corresponding 2020
period, a 31.6% increase. Net earnings for the three month
period ended July 31, 2021, amounted
to $28,683,000 compared to
$19,579,000 recorded for the
corresponding 2020 period. Basic net earnings per share increased
to $0.85 compared to $0.57 for the corresponding 2020 period.
For the three month period ended July 31,
2021 and 2020, the share repurchase program had no impact on
basic net earnings per share.
The variation in adjusted net earnings would be $9,104,000 or $0.28
per basic share for the three month period ended July 31, 2021 and is explained as follows:
|
|
|
|
|
(Unaudited and $ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
July 31,
2021
|
|
July 31,
2020
|
|
July 31,
2019
|
|
July 31,
2018
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
|
28
683
|
|
19 579
|
|
13 480
|
|
16 933
|
Gain on disposal of
fixed assets (after-tax)
|
-
|
|
-
|
|
-
|
|
-
|
Variation in cost of
options (after-tax)
|
|
-
|
|
-
|
|
(24)
|
|
(24)
|
CEWS
(after-tax)
|
|
|
-
|
|
-
|
|
-
|
|
-
|
Adjusted net
earnings
|
|
|
28
683
|
|
19 579
|
|
13 456
|
|
16 909
|
|
|
|
|
|
|
|
|
|
|
|
Minus: Adjusted net
earnings for the previous period
|
19
579
|
|
13 456
|
|
16 909
|
|
13 944
|
|
|
|
|
|
|
|
|
|
|
|
Variation
|
|
|
|
9
104
|
|
6 123
|
|
(3 453)
|
|
2 965
|
Operations
BMTC Inc.
The Company continues to restructure all of its websites and the
first phase of the implementation of a distinct e-commerce platform
for its banners Brault & Martineau and EconoMax is now
completed and operational. The process of implementation will
continue throughout 2020 for the following phases as well as the
restructuring for all the other banners of the Company. The Company
also reviewed its IT systems in to order standardize them
throughout the banners, as well as to allow them to be more aligned
with its e-commerce strategies. Following this review, the Company
decided to invest and to modify its existing IT systems, the
integration and implementation which will continue for a 3 to 5
year period.
Brault & Martineau Division
The Company continues the evaluation process for different sites
as well as its existing stores to modify them or in certain cases
proceed with the reconstruction of a new store based on its new
prototype. The Company anticipates that in the next few years it
will incur costs related to the modification and improvement of its
actual network is to be considered.
Management discussion and outlook for the Future of the
Company
On March 11th, 2020, the World
Health Organization declared COVID-19 a global pandemic. The
financial impact of COVID-19 began to manifest itself by a decrease
in store traffic and consequently store revenues in the early weeks
of March 2020. Following the rapid
rise of COVID-19 cases in the province of Quebec, our priority during this difficult
period remains at all times the health and safety of our employees
and clients. In order to protect the Quebec population and to prevent the spread of
COVID-19 by encouraging social distancing initiatives recommended
by both levels of government, the Company decided on March 18th, 2020, to temporarily close its retail
sales network, namely our Ameublements Tanguay subsidiary in the
Quebec City area and the Brault
& Martineau and EconoMax banners in the Montreal area. On March
23rd, 2020, the Quebec
government announced, for the same reason, the closure of all
non-essential retail stores across the province.
In order to address the devastating effects of COVID-19 and to
assure its short and long-term financial health, the Company
decided to maintain its operations at a strict minimum level while
preserving its presence in our market and controlling its working
capital position. The following actions were undertaken by the
Company during these last weeks in order to support its operating
and working capital objectives:
- Following the closure of our retail sales network on
March 18th, 2020, the Company
temporarily laid off approximately 75% of its personnel, the vast
majority stemming from our retail stores.
- Our online and delivery services remained operational across
Quebec to ensure the population in
confinement the ability to rely on essential goods while respecting
government-mandated security protocols. We modified our services to
offer contactless home delivery.
- During this period, the Company introduced several measures and
protocols in preparation for the reopening of our stores across our
sales network to ensure and protect the health and security of our
employees and our clients. These new measures and protocols will be
in effect until the end of the COVID-19 pandemic.
- The Company has also made technological and operational
improvements to its sales network. These modifications will allow
us to reduce our fixed costs and will contribute to our initiatives
of effective cost controls.
- The Company applied for the Canada Emergency Wage Subsidy given the 30% or
more decrease in revenues during the prescribed period (CEWS).
During the first quarter of 2020, the Company had all of its 32
points of sale closed for a period of 43 consecutive days, leaving
only online sales operational. The loss of revenues arising from
the store closures during this period amounted to $52,029,000. During the second quarter of 2020,
the Company had 15 points of sale closed for a period of 25
consecutive days, leaving only online sales operational. The loss
of revenues arising from the store closures during this period
amounted to $25,465,000.
The Company has proactively aligned its cost structure in order
to mitigate the loss of revenues incurred during the last fiscal
year due to the store closures. The Company intends to maintain
these measures throughout the fiscal year 2022, in order to protect
the Company's viability and preserve its working capital during
these highly uncertain times. Thanks to these new measures the
Company believes it will be able to produce positive operating
results.
The Company continues to focus on online sales, which
experienced a record increase since the start of the pandemic, by
actively pursuing the improvement of its digital platforms, its
live chat initiative with online customers as well as the
improvement of our telephone sales department for all of the BMTC
Group Inc. banners.
It is also Management's opinion that the digital platforms of
our banners are essential in order to allow the Company to increase
its market shares as well as to allow customers to start their
shopping experience online to then complete their purchases in one
of our stores with the help of our sales representatives.
The Company was able to increase significantly it's revenues
during the period quarter ended July 31,
2021 compared to results during the corresponding 2020
period as well as the corresponding 2019 and 2018 periods. In fact,
the Company recorded one of the highest revenues in its history.
This is partly due to improvements in marketing and strategic
measures implemented, our extensive store network and the strength
of digital platforms, which have enabled the Company to increase
its market share in Quebec. On the
other hand, Management is aware that this increase is also partly
due to the fact that it has benefited from a transfer of consumer
spending related to the restrictions imposed by the various levels
of government due to COVID-19 pandemic, more precisely the
restrictions related to travel, the closure of restaurants and all
forms of entertainment in the cultural and sporting world.
Finally, since mid-June, the Company has had issues with its
supply logistics. Many of the Company's suppliers, who have also
been affected by the consequences of COVID-19, are unable to honour
and deliver placed orders. This problem seems widespread in our
industry and is not unique to the Company. Therefore, it is
possible that this could have a negative impact on future results
because orders on hand may not be able to be delivered due to this
shortcoming.
The Company is faced today with two major problems. On
May 5, 2021, the Canadian federal
government imposed tariffs of up to 295% on upholstered furniture
imported from Vietnam and
China while not allowing any grace
period either for orders in production or for products already in
transit to Canada, which can take
up 3 to 4 months to reach our ports.
The majority of these products in production as well as those in
transit to Canada have already
been sold to our customers. It is not possible for the Company to
add these new tariffs to the price tags of these products since it
increases by more than four times the price initially paid by our
customers. The Company will therefore incur significant losses on
the sale of these products in order to honor existing contracts
with our customers.
Secondly, the Company was able to cancel the production of
products affected by these tariffs with some of our suppliers.
However, some of these orders have already been sold to our
customers, so if the Company is unable to replace it with a similar
product at a reasonable price, those sales will need to be
canceled. As a result, the Company could be subject to a slew of
customers cancelling orders.
It is difficult to predict the future level of consumer
confidence and the possible impact on sales of BMTC Group Inc.
Management is confident that the Company's operational efficiency
during this crisis, its market leadership and solid financial
position will allow us to emerge a stronger organization despite
these difficult market conditions and maintain its objectives
increasing its market share and profitability in Quebec.
Complaints about unfairly priced Chinese and Vietnamese-made
products have been a long simmering issue in the furniture
business. Although, when the Canadian federal government announced
it was seeking to level the playing fields with tariffs, everyone
in the industry was expecting tariffs in the range of 10 to 20 per
cent, similar to what the U.S. recently implemented. The tariffs
imposed so far are preliminary, which means they can be raised,
lowered or removed altogether when the government finishes its
investigation into the matter later this summer.
We would like to take this opportunity to thank all our fellow
citizens who are relentlessly working day and night with extreme
dedication to reduce spread of COVID-19 and who to caring for those
who have been infected. Our thoughts are also with all those who
have in any way been affected by the virus.
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 opposites 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 2021 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
the performance measures and financial recurrence of the Company.
Management believes that this measure is useful in understanding
and analyzing the operational performance of the Company and that
it can provide additional information.
Adjusted net earnings as well as same store revenues are not an
earnings measure recognized by IFRS and do not have a standardized
meanings prescribed by IFRS. Therefore, adjusted net earnings and
same store revenues as discussed in this press release may not be
compared to similar measures presented by other issuers. These
measures of performance should not be considered as alternatives to
indicators of performance calculated according to IFRS, but rather
as a source of additional information.
The Company discloses in this press release 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.