Indigo Reports Full Year Results, Strong Revenue Growth, Improved Profitability

May 26, 2015, 16:01 ET from Indigo Books & Music Inc.

Comparable Superstore Sales grow by 6.8% and Online Sales grow by 11.8%

TORONTO, May 26, 2015 /CNW/ - Indigo Books & Music Inc. (TSX: IDG), Canada's largest book, gift and specialty toy retailer reported revenue of $895.4 million for its fiscal year ended March 28, 2015. Total revenue increased by $27.7 million compared to the previous year despite operating eight fewer stores.

On a comparable store basis, Indigo and Chapters superstore revenue increased 6.8%, while Coles and Indigospirit small format store revenue increased 0.8%.  Sales from Indigo's online channel, indigo.ca, grew by 11.8%.

The core trade books business returned to growth despite having no major hit titles during the year. Additionally, Lifestyle, Paper and Toys experienced double-digit growth and the launch of American Girl during the year far exceeded expectations.

Commenting on the results, CEO Heather Reisman said, "We're pleased with our full year results which confirm we are moving out of transformation and into growth mode."

The Company reported a net loss for the year of $3.5 million compared to net loss of $31.0 million last year.  The improvement in earnings was driven by revenue growth and margin rate, lower operating expenses and lower tax expense.

Revenue for the fourth quarter was $186.2 million, up $1.9 million from the same quarter last year. Net loss for the quarter was $13.9 million compared to a net loss of $14.4 million last year. The improvement in earnings was a result of higher revenues, margin rate and lower operating expenses off-set by increased long-term incentive costs.

Analyst/Investor Call

Indigo will host a conference call for analysts and investors to review these results at 10 A.M. (Eastern Time) tomorrow, May 27, 2015.  The call can be accessed by dialling 416-764-8688 from within the Toronto area, or 1-888-390-0546 outside of Toronto. The eight digit participant code is 18223739. 

A playback of the call will also be available by telephone until 11:59 p.m. (ET) on Wednesday, June 3rd, 2015. The call playback can be accessed after 7:00 p.m. (ET) on Wednesday, May 27th, 2015, by dialing 416-764-8677 from within the Toronto area, or 1-888-390-0541 outside of Toronto.  The six-digit replay passcode number is 223739#.  The conference call transcript will be archived in the Investor Relations section of the Indigo website, www.indigo.ca.

Forward-Looking Statements

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 the Company.

Non-IFRS Financial Measures

The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS"). 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; and Coles. The online channel, indigo.ca, offers a one-stop online shop with a robust selection of books, toys, home décor, stationery, and gifts.

Indigo founded the Indigo Love of Reading Foundation in 2004 to address the underfunding of public elementary school libraries. Every year the Indigo Love of Reading Foundation grants $1.5 million to 20 high-needs elementary schools so they can transform their libraries with the purchase of new books and education resources. To date, the Indigo Love of Reading Foundation has committed over $19.5 million to over 2000 schools through our signature programs.

To learn more about Indigo, please visit the Our Company section at indigo.ca.

Consolidated Balance Sheets



















As at



As at








March 28,



March 29,

(thousands of Canadian dollars)







2015



2014












ASSETS











Current











Cash and cash equivalents







203,162



157,578

Accounts receivable







4,896



5,582

Inventories







208,395



218,979

Income taxes recoverable







25



-

Prepaid expenses







5,477



5,184

Total current assets







421,955



387,323

Property, plant and equipment







54,886



58,476

Intangible assets







16,587



21,587

Equity investment







726



598

Deferred tax assets







44,241



44,604

Total assets







538,395



512,588

LIABILITIES AND EQUITY











Current











Accounts payable and accrued liabilities







160,645



136,428

Unredeemed gift card liability







48,211



46,827

Provisions







913



928

Deferred revenue







13,298



12,860

Current portion of long-term debt







172



584

Total current liabilities







223,239



197,627

Long-term accrued liabilities







3,841



2,896

Long-term provisions







110



164

Long-term debt







56



227

Total liabilities







227,246



200,914

Equity











Share capital







205,871



203,812

Contributed surplus







9,770



8,820

Retained earnings







95,508



99,042

Total equity







311,149



311,674

Total liabilities and equity







538,395



512,588

 

Consolidated Statements of Cash Flows




13-week


13-week


52-week


52-week



period ended


period ended


period ended


period ended



March 28,


March 29,


March 28,


March 29,

(thousands of Canadian dollars)


2015


2014


2015


2014










CASH FLOWS FROM OPERATING ACTIVITIES









Net loss for the period


(13,946)


(14,378)


(3,534)


(30,999)

Add (deduct) items not affecting cash










Depreciation of property, plant and equipment


3,753


4,144


14,789


16,358


Amortization of intangible assets


3,032


2,925


11,913


11,123


Net impairment (reversal) of capital assets


-


2,099


(458)


2,604


Loss on disposal of capital assets


58


189


92


302


Stock-based compensation


97


317


910


1,242


Directors' compensation


89


81


341


425


Deferred tax assets


(3,475)


(5,783)


363


4,127


Other


(1,244)


224


(1,960)


(206)

Net change in non-cash working capital balances


(71,705)


(93,143)


37,841


(19,196)

Interest on long-term debt and financing charges


21


13


69


95

Interest income on cash and cash equivalents


(653)


(611)


(1,906)


(2,377)

Income taxes received


-


-


26


26

Share of loss (earnings) from equity investment


431


211


(655)


(789)

Cash flows from (used in) operating activities


(83,542)


(103,712)


57,831


(17,265)










CASH FLOWS FROM INVESTING ACTIVITIES









Purchase of property, plant and equipment


(1,925)


(2,512)


(10,832)


(18,700)

Addition of intangible assets


(1,718)


(2,473)


(6,914)


(10,546)

Distributions from equity investment


527


800


527


1,159

Interest received


903


640


1,898


2,463

Cash flows used in investing activities


(2,213)


(3,545)


(15,321)


(25,624)










CASH FLOWS FROM FINANCING ACTIVITIES









Repayment of long-term debt


(50)


(194)


(586)


(814)

Interest paid


(17)


(40)


(67)


(110)

Proceeds from share issuances


770


-


1,758


7

Dividends paid


-


-


-


(8,348)

Repurchase of options


-


-


-


(975)

Cash flows from (used in) financing activities


703


(234)


1,105


(10,240)










Effect of foreign currency exchange rate changes
on cash and cash equivalents


987


(223)


1,969


145










Net increase (decrease) in cash and cash
equivalents during the period


(84,065)


(107,714)


45,584


(52,984)

Cash and cash equivalents, beginning of period


287,227


265,292


157,578


210,562

Cash and cash equivalents, end of period


203,162


157,578


203,162


157,578

 

Consolidated Statements of Loss and Comprehensive Loss












13-week


13-week


52-week


52-week



period ended


period ended


period ended


period ended



March 28,


March 29,


March 28,


March 29,

(thousands of Canadian dollars, except per share data)


2015


2014


2015


2014










Revenue


186,155


184,333


895,376


867,668

Cost of sales


(104,794)


(106,298)


(503,059)


(493,955)

Gross profit


81,361


78,035


392,317


373,713

Operating, selling, and administrative expenses


(99,034)


(98,620)


(398,031)


(403,693)

Operating loss


(17,673)


(20,585)


(5,714)


(29,980)

Interest on long-term debt and financing charges


(21)


(13)


(69)


(95)

Interest income on cash and cash equivalents


653


611


1,906


2,377

Share of earnings (loss) from equity investment


(431)


(211)


655


789

Loss before income taxes


(17,472)


(20,198)


(3,222)


(26,909)

Income tax recovery (expense)










Current


51


37


51


37


Deferred


3,475


5,783


(363)


(4,127)

Net loss and comprehensive loss for the period


(13,946)


(14,378)


(3,534)


(30,999)










Net loss per common share









Basic


$(0.54)


$(0.56)


$(0.14)


$(1.21)

Diluted


$(0.54)


$(0.56)


$(0.14)


$(1.21)

SOURCE Indigo Books & Music Inc.



RELATED LINKS

http://www.indigo.ca