Indigo First Quarter Results Improved Significantly
Growth in Trade Books; Continued Double Digit Growth in Gift, Lifestyle,
TORONTO, Aug. 8, 2012 /CNW/ – Indigo Books & Music Inc. (TSX: IDG),
Canada’s largest book, gift and specialty toy retailer reported a 0.8%
decrease in net revenue for its first quarter ending June 30, 2012.
Revenue for the quarter was $186.5 million, down $1.5 million from last
year driven significantly by lower sales of eReaders due to the strong
launch of the Kobo Touch in the same period last year and a delay in
the launch of new Kobo devices. Trade book sales were up 0.6% behind
strong sales of the Fifty Shades and Hunger Game trilogies and the
Indigo Spotlight programs highlighting hidden gems.
On a comparable store basis, Indigo and Chapters superstores posted a
0.9% decrease in revenue, while Coles and IndigoSpirit small format
stores were up 6.0%.
Commenting on the results, CEO Heather Reisman said, “We are very
pleased to see continued double digit growth in our general merchandise
businesses as we expand our exciting gift, lifestyle and IndigoKids
categories. We’re also happy to see positive comp sales in our small
format stores driven by the strong book titles this quarter and the
expansion of some general merchandise to our smaller stores.”
The net loss attributable to shareholders of the Company from continuing
operations improved $6.5 million from a loss of $12.0 million last year
to a loss of $5.5 million this year. The significant reduction in net
loss was due to improvements in net margins and lower operating
Ms. Reisman noted, “While a loss in this quarter is typical for our
business, we’re encouraged that our efforts to improve margins and
drive productivity, two of our top strategic priorities for this year,
are clearly showing positive results.”
The net loss per share improved from a loss of $0.72 per share last year
to a loss of $0.22 per share due to the improvements mentioned above
and to the elimination of losses from discontinued operations as a
result of the sale of Kobo in January 2012.
During the quarter, the Company completed the upgrade of its retail
distribution facility to support the growth of its general merchandise
business and improve the efficiency of its supply chain operations.
The Company also completed the launch of its talent management software
tool, along with enhancements to existing human resources reporting
The Board of Directors today approved a quarterly dividend of 11 cents
per common share to be paid on September 5(th), 2012, to all shareholders of record as of August 22, 2012.
Statements contained in this news release that are not historical facts
are forward-looking statements which involve risk and uncertainties
that could cause results to differ materially from those expressed in
the forward-looking statements. Among the key factors that could cause
such differences are: general economic, market or business conditions
in Canada; competitive actions by other companies; changes in laws or
regulations; and other factors, many of which are beyond the control of
Non-IFRS Financial Measures
The Company prepares its consolidated financial statements in accordance
with International Financial Reporting Standards. In order to provide
additional insight into the business, the Company has also provided
non-IFRS data, including comparative store sales growth, in the press
release above. This measure does not have a standardized meaning
prescribed by IFRS and is therefore specific to Indigo and may not be
comparable to similar measures presented by other companies.
Comparative store sales growth is a key indicator used by the Company
to measure performance against internal targets and prior period
results. This measure is commonly used by financial analysts and
investors to compare Indigo to other retailers. Comparable store sales
are defined as sales generated by stores that have been open for more
than 12 months on a 52-week basis.
About Indigo Books & Music Inc.
Indigo is a publicly traded Canadian company listed on the Toronto Stock
Exchange (IDG). As the largest book, gift and specialty toy retailer in
Canada, Indigo operates in all provinces under different banners
including Indigo Books & Music; Indigo Books, Gifts, Kids;
IndigoSpirit; Chapters; The World’s Biggest Bookstore; and Coles. The
online channel, indigo.ca, offers a one-stop online shop with a robust selection of books, toys,
home dÃ©cor, stationery and gifts.
In 2004, Indigo founded the Indigo Love of Reading Foundation, a
registered charity that provides new books and education materials to
high-needs Canadian elementary schools, to address the literacy crisis
in Canada. To date the Foundation, as well as the Indigo “Adopt A
School” program, have contributed $13 million, equating to more than a
million books, to high-needs elementary schools across Canada. Visit loveofreading.org for more information.
To learn more about Indigo, please visit the Our Company section at indigo.ca.
Consolidated Balance Sheets (Unaudited) As at As at As at June 30, July 2, March 31, (thousands of Canadian dollars) 2012 2011 2012 ASSETS Current Cash and cash equivalents 188,595 73,385 207,601 Accounts receivable 13,586 14,380 12,627 Inventories 219,964 215,746 229,706 Prepaid expenses 4,520 6,840 3,695 Total current assets 426,665 310,351 453,629 Property, plant and equipment 63,537 76,532 67,464 Intangible assets 22,198 30,620 22,810 Goodwill - 26,632 - Deferred tax assets 52,675 66,093 48,633 Total assets 565,075 510,228 592,536 LIABILITIES AND EQUITY Current Accounts payable and accrued liabilities 154,690 165,382 174,201 Unredeemed gift card liability 43,174 41,600 42,711 Provisions 237 - 232 Deferred revenue 11,980 11,467 11,234 Income taxes payable 69 649 65 Notes payable - 4,896 - Current portion of long-term debt 1,006 1,281 1,060 Total current liabilities 211,156 225,275 229,503 Long-term accrued liabilities 4,644 5,275 5,800 Long-term provisions 391 - 460 Long-term debt 1,135 1,685 1,141 Total liabilities 217,326 232,235 236,904 Equity Share capital 203,482 202,962 203,373 Contributed surplus 7,310 6,646 7,039 Retained earnings 136,957 42,135 145,220 Total equity attributable to shareholders 347,749 251,743 355,632 of the Company Non-controlling interest - 26,250 - Total equity 347,749 277,993 355,632 Total liabilities and equity 565,075 510,228 592,536
Consolidated Statements of Loss and Comprehensive Loss (Unaudited) 13-week 13-week period ended period ended June 30, July 2, (thousands of Canadian dollars, except per share data) 2012 2011 Revenues 186,483 188,005 Cost of sales 106,388 111,082 Gross profit 80,095 76,923 Operating and administrative expenses 90,174 92,691 Operating loss (10,079) (15,768) Interest on long-term debt and financing charges 31 44 Interest income on cash and cash equivalents (581) (71) Loss before income taxes (9,529) (15,741) Income tax recovery (4,042) (3,778) Loss and comprehensive loss for the period from continuing operations (5,487) (11,963) Loss and comprehensive loss for the period from discontinued operations (net of tax) - (12,231) Net loss and comprehensive loss for the period (5,487) (24,194) Net loss and comprehensive loss attributable to: Shareholders of the Company (5,487) (18,105) Non-controlling interest - (6,089) Total net loss and comprehensive loss for the period (5,487) (24,194) Net loss per common share from continuing operations Basic $(0.22) $(0.48) Diluted $(0.22) $(0.48) Net loss per common share from discontinued operations Basic $ - $(0.24) Diluted $ - $(0.24) Net loss per common share Basic $(0.22) $(0.72) Diluted $(0.22) $(0.72)
Consolidated Statements of Cash Flows (Unaudited) 13-week 13-week period ended period ended June 30, July 2, (thousands of Canadian dollars) 2012 2011 CASH FLOWS FROM OPERATING ACTIVITIES Net loss from continuing operations for the period (5,487) (11,963) Add (deduct) items not affecting cash Depreciation of property, plant and 4,459 equipment 4,719 Amortization of intangible assets 2,422 2,081 Impairment of capital assets 250 - Loss on disposal of capital assets 44 4 Stock-based compensation 159 595 Directors' compensation 133 149 Deferred tax assets (4,042) (3,602) Other (753) (286) Net change in non-cash working capital balances related to continuing operations (11,564) 6,805 Interest on long-term debt and financing charges 31 44 Interest income on cash and cash equivalents (581) (71) Income taxes received 4 - Operating cash flows of discontinued operations - (16,531) Cash flows used in operating activities (14,665) (18,316) CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of non-capital tax losses - (10,109) Purchase of property, plant and equipment (784) (2,197) Addition of intangible assets (1,830) (1,629) Investing cash flows of discontinued operations - (2,158) Cash flows used in investing activities (2,614) (16,093) CASH FLOWS FROM FINANCING ACTIVITIES Notes payable - 5,055 Repayment of long-term debt (346) (319) Interest received 559 84 Proceeds from share issuances 88 578 Purchase of shares in subsidiary - (3,009) Dividends paid (2,776) (2,767) Financing cash flows of discontinued operations - 24,442 Cash flows used in financing activities (2,475) 24,064 Effect of foreign currency exchange rate changes on cash and cash equivalents 748 69 Net decrease in cash and cash equivalents during the period (19,006) (10,276) Cash and cash equivalents, beginning of period 207,601 83,661 Cash and cash equivalents, end of period 188,595 73,385 Cash and cash equivalents attributable to: Continuing operations 188,595 43,656 Discontinued operations - 29,729 188,595 73,385
SOURCE Indigo Books & Music Inc.