Sportscene Group reports its fourth quarter and fiscal 2021 results
Canada NewsWire
MONTREAL, Nov. 25, 2021
MONTREAL, Nov. 25, 2021 /CNW Telbec/ - Sportscene Group Inc. ("Sportscene" or "the Company"); (TSXV: SPS.A) announced its financial results today for the fourth quarter and fiscal year ended August 29, 2021.
"We ended our financial year in a good position due to the receipt of various government subsidies, the complete reopening of our dining rooms in June as well as diversification of our revenues, most notably our retail product offering. We also benefited from the Canadiens participating in the Stanley Cup finals," said Jean Bédard, President and CEO.
"We are particularly grateful for the collective efforts of our employees, franchisees and partners who have helped us adapt and even innovate to this new operating environment," concluded Mr. Bédard.
Financial Performance for the Fourth Quarter Ended August 29, 2021
The increase of 31.2%, or $6.3 million, of the Company's consolidated revenues, to $26.4 million, stems primarily from the easing of public health measures allowing the complete reopening of our restaurant's dining rooms. However, when compared with the fourth quarter of fiscal 2019, prior to the pandemic, the Company's consolidated revenues were lower by 21.2%, from $33.5 million. Revenues from the restaurant, franchising and other segments together increased by $9.1 million, compared to fiscal 2020, while revenues from the retail segment decreased by $2.8 million, or 26.9%, to $7.5 million. Supply chain issues and stronger orders during the fourth quarter of last fiscal year when new customers accounts were building their inventory explain a portion of this reduction.
Consolidated adjusted EBITDA(1) for the fourth quarter was $6.3 million, an increase of 110.8% or $3.3 million from the support of government subsidies and from gross margin improvements following the reopening of restaurant dining rooms across the network.
Sportscene ended the fourth quarter of fiscal 2021 with net earnings of $2.4 million or $0.28 per share (basic and diluted), compared to net earnings of $0.7 million or $0.09 per share (basic and diluted) in the same quarter last fiscal year.
Financial Performance for Fiscal 2021
Sportscene's fiscal 2021 consolidated revenues decreased by 38.3% or $42.1 million, to $67.7 million. The COVID-19 pandemic and associated public health measures imposed by the government resulted in a significant slowdown in the restaurant, franchising and other activities segments particularly during the first three quarters of the fiscal year. However, retail revenues grew 6.5% to $31.1 million due to dedicated efforts in the last few years to grow the offering and the distribution network.
Consolidated adjusted EBITDA(1) for fiscal 2021 grew by 6.7%, or $0.7 million, to $11.1 million. Lower consolidated revenues and consolidated gross margins brought on by a more restrictive operating environment in the context of the COVID-19 pandemic was mitigated by various government support measures, the reopening of restaurant dine-in operations since the fourth quarter, the diversification of activities towards the retail sector and efforts dedicated to optimizing costs.
Sportscene ended fiscal 2021 with net earnings of $0.6 million or $0.07 per share (basic and diluted), compared to a net loss of $4.0 million or $0.45 per share (basic and diluted) during the previous fiscal year when a $4.7 million depreciation charge was recognized in the context of the COVID-19 pandemic.
Important Subsequent Event
On November 18, 2021, the Corporation announced that it had entered into a final combination agreement pursuant to which Jean Bédard, the President and Chief Executive Officer of Sportscene, and a consortium of Québec investors led by Champlain Financial Corporation will acquire, through a newly incorporated corporation, all of the issued and outstanding Class A shares of Sportscene, except for 1.7 million shares held, directly or indirectly, by Jean Bédard, for a cash consideration of $7.25 per share. Under the terms of the Transaction, Sportscene will therefore become a private corporation and its shares will cease to be listed on the TSX Venture Exchange. For further information on the Transaction, please refer to the Company's press release issued on November 18, 2021.
Disclaimer on forward-looking statements
This press release contains forward-looking statements relating to the Company. Statements based on management's current expectations involve known and unknown inherent risks and uncertainties, including risks associated with public health issues such as those resulting from the COVID-19 pandemic. Actual results may differ from expectations. The reader is cautioned not to place undue reliance on forward-looking information. The Company does not undertake any obligation to update or revise any forward-looking statements as a result of new information, future events or other changes except if required by applicable laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
About Sportscene Group
Sportscene Group Inc. is a pioneer and leader in the ambiance restaurant niche in Quebec. Since 1984, it has been operating the La Cage -- Brasserie Sportive ("La Cage") restaurant chain, differentiated by its sporting ambiance and food made from fresh, local products. With a strong brand image, La Cage is established throughout the province and has currently 38 locations. Sportscene continues to diversify its restaurant activities, notably through the operation of P.F. Chang's, an Asian cuisine restaurant and its catering business for special events, making the Company a key player in Quebec's restaurant industry. Besides its restaurant operations, Sportscene is active in the sale of La Cage and Moishes branded products in grocery stores, ready-to-eat meals and ready-to-cook boxes.
Non-IFRS measures
The following measures used by the Company are not measures recognized under International Financial Reporting Standards ("IFRS"):
(1) "Consolidated adjusted EBITDA" corresponds to "earnings
before financial expenses, amortization, net loss
(income) of joint ventures and income taxes", from
which other (gains) losses are excluded and to which
the share of earnings before financial expenses, amortization
and income tax of joint ventures is added. See "Reconciliation
of non-IFRS financial measures", below.
Reconciliation of Non-IFRS Financial Measures
(Audited, in thousands of $)
Fourth Quarter Fiscal Year
Ended Ended
August 29, August 30, August 29, August 30,
2021 2020 2021 2020
Income before financial
expenses, amortization, net
loss (income) of joint
ventures and income taxes 5,053 3,453 7,420 5,564
Other (gains) losses 52 (699) (431) 4,053
Government assistance deducted
from amortization and
financial expenses(1) 689 - 3,453 -
Loss (income) before financial
expenses, amortization
and
income taxes of joint
ventures(2) 477 222 653 786
Consolidated Adjusted EBITDA 6,271 2,976 11,095 10,403
(1) In accordance with IFRS, a portion of government rent
assistance has been applied against amortization of
right-of-use assets and interest on lease liabilities.
These amounts have been included in the calculation
of the consolidated adjusted EBITDA as they are considered
monetary items.
(2) For further details, see Note 18, "Investments in
joint ventures", of the notes to the annual consolidated
financial statements.
For more information on the operating results and financial position of Sportscene Group Inc., please see the annual management discussion and analysis and consolidated financial statements and accompanying notes for the fiscal year ended August 29, 2021, available on SEDAR.
Interim Condensed Consolidated Statements of Comprehensive Income
(Audited, in thousands of Canadian dollars, except for earnings per share and number of outstanding shares)
Fiscal Year
Ended
August 29, August 30,
2021 2020
$ $
Revenues 67,724 109,848
Cost of sales 36,202 48,372
Selling and administrative expenses, excluding
amortization 24,533 51,859
Other (gains) losses (1) (431) 4,053
Income before financial expenses, amortization, net
loss (income) of joint ventures and income tax 7,420 5,564
Amortization 5,335 9,469
Financial expenses 1,129 2,122
Net loss (income) of joint ventures 45 (136)
6,509 11,455
Income (loss) before income tax 911 (5,891)
Income tax expense (recovery) 299 (1,851)
Net and comprehensive income (loss) 612 (4,040)
Net and comprehensive income (loss) attributable to: