MONTREAL, Nov. 8 /CNW Telbec/ - For the nine-month period ended September 30, 2007, the Company's revenue increased by $2.2 million to $617.9 million, from the $615.7 million recorded in the corresponding 2006 period. Net income for the nine-month period ended September 30, 2007, stood at $32,903,000 compared with $29,094,000, for the corresponding 2006 period. Earnings per share ("EPS") increased by $0.17 to $1.02 for the period ended September 30, 2007.
For the nine-month period ended September 30, 2007, results from the costing of options had the effect of reducing net earnings by $0.19 per share, compared to a reduction of $0.08 per share for the corresponding 2006 period. While the Company costs options as either an expense or revenue in the net earnings calculation, the Company believes it is preferable to inform readers of its financial statements of the impact of this element, which is outside the Company's control and which varies along with the course of the Company's share price in any given time period. An increase in the Company's share price incurs an expense, while a decrease in the Company's share price incurs revenue. Of particular concern is that the reader could be made to believe that the Company's profitability had risen in the context of a major decrease in the Company's share price. It is for this reason that the Company includes net earnings in absolute dollars and per-share dollars excluding this costing of options effect, even though doing so does not conform to GAAPs, it is therefore unlikely that we can compare them with the same type of measures presented by other issuers. It is worth noting that the Company is one of few public companies to expense options on an ongoing basis. The sale of fixed assets during the period resulted in an increase in net per share earnings of $0.06 compared with $0.01 for the corresponding period. The Superior Court of Montreal rendered a judgment against the Company's subsidiary Brault & Martineau Inc. ordering Brault & Martineau to pay punitive damages. The Company recorded an extraordinary charge in the amount of $2.545 million, or $1.731 million on an after-tax basis, representing the full amount of the award by the Superior Court and the Company's estimate of the ancillary distribution costs. This net amount represents a reduction of $0.05 to the net per share earnings for the period ended September 30th, 2007. The share repurchase program contributed $0.05 to net per share earnings for the nine-month period ended September 30, 2007. Excluding all these effects, net earnings would have increased by 7,4 M$ or $0.23 per share for the nine-month period ended September 30th, 2007.
The adjusted 7,4 M$ in net earnings breaks down as follows for the nine-month period ended September 30th 2007:
2007 2006
($ in thousands, except
for per share amounts)
Net Earnings 32,903 29,094
Cost (gain) of options (after-tax) 6,216 2,622
(Gain) resulting from the sale
of fixed assets (after-tax) (1,958) (254)
Provision for judgment (after-tax) 1,731 -
---------- ----------
Adjusted Net Earnings 38,892 31,462
MINUS : Adjusted Net Earnings 2006 31,462
----------
Increase 2007 7,430
On October 17, 2007, the Superior Court of Montreal rendered a judgment
against the Company's subsidiary Brault & Martineau Inc. ordering Brault &
Martineau to pay punitive damages in the amount of $2 million (plus interest
from the judgment date and costs of distribution) in relation to a class
action instituted by a group of consumers that had purchased goods from
Brault & Martineau using the financing programs offered by Brault & Martineau
and its credit supplier.
Based on its analysis of the judgment rendered, the Company has decided to
appeal the judgment to the Quebec Court of Appeal. The Company intends to
vigorously defend its position. The Company believes its appeal is
well-founded and is confident that it will ultimately succeed. Pending this
appeal, the Company recorded an extraordinary charge in the amount of
$2.545 million, or $1.731 million on an after-tax basis, representing the full
amount of the award by the Superior Court and the Company's estimate of the
ancillary distribution costs.
As at September 30th, 2007, the Company held Canadian asset-backed
commercial paper (ABCP) investments having a nominal value of $6,1 million,
representing 6% of the aggregate of its cash and investments as at
September 30th, 2007. The Company's ABCP investments matured on August 30th,
2007 but no payment has yet been received. The Company is assessing its
alternatives and recourses, including legal action, to recover the full value
of these ABCP investments.
The Company records its investments at market value. However, due to the
liquidity issue with respect to ABCP, there is currently no market for the
Company's ABCP investments. Therefore, any adjustment to the value of the
Company's ABCP investments in order to reflect their market value will be made
when there will be a market for such ABCP investments.
Annual Financial Information
2006 2005 2004
---------- ---------- ----------
($ in thousands, except for per share amounts)
Revenue(x) $ 835,681 $ 804,361 $ 788,721
Net earnings 45,633 41,891 44,464
Total Assets 284,963 274,702 248,754
Net Earnings per share
Basic $1.35 $1.20 $1.21
Diluted 1.30 1.16 1.18
Dividends per share 0.24 0.13 0.11
(x) Following the changes in the interpretation of the accounting
principles in EIC-123 of the CICA entitled "Reporting Revenue Gross
as a Principal Versus Net as an Agent", the Company modified its
presentation of revenues from extended services contracts on certain
products in order to present them at the net amount obtained for the
services rendered. Consequently, the Company adjusted the results for
the year ended December 31, 2005 and 2004 by reducing operating
revenues as well as the cost of products sold, and commercial and
administrative expenses in the amount of $14,409,000 and $13,125,000.
These changes had no impact on net earnings.
Quarterly Results (unaudited)
($ in thousands, except for per share amounts)
Quarter Ended Quarter Ended
March 31 June 30
2007 2006 2007 2006
---------- ---------- ---------- ----------
Revenue(x) $ 178,452 $ 182,969 $ 216,109 $ 215,959
Net earnings 2,055 285 14,878 12,143
Net Earnings per share
Basic 0.060 0.010 0.460 0.350
Diluted 0.060 0.010 0.440 0.340
Quarter Ended Quarter Ended
September 30 December 31
2007 2006 2006 2005
---------- ---------- ---------- ----------
Revenue(x) $ 223,355 $ 216,731 $ 220,022 $ 208,992
Net earnings 15,970 16,666 16,539 8,598
Net Earnings per share
Basic 0.500 0.490 0.500 0.260
Diluted 0.480 0.470 0.480 0.240
(x) Following the changes in the interpretation of the accounting
principles in EIC-123 of the CICA entitled "Reporting Revenue Gross
as a Principal Versus Net as an Agent", the Company modified its
presentation of revenues from extended services contracts on certain
products in order to present them at the net amount obtained for the
services rendered. Consequently, the Company adjusted its quarterly
results for 2006 and 2005 by reducing operating revenues as well as
the cost of products sold, and commercial and administrative
expenses. These changes had no impact on net earnings.
As for the three-month period ended September 30th, 2007 revenues from
operations totaled 223,4 M$, representing an increase of 6,7 M$ over the
216,7 M$ for the corresponding 2006 period. The Company's net income for the
three-month period ended September 30th, 2007, totaled $ 15,970,000, or
$0.50 per share, compared with $ 16,666,000 or $0.49 per share for the
corresponding 2006 period. For the three-month period ended September 30th,
2007, the results from costing of options had the effect of reducing the
earnings per share by $0.01 compared with an increase in earnings of $0.01 for
the corresponding 2006 period. The Superior Court of Montreal rendered a
judgment against the Company's subsidiary Brault & Martineau Inc. ordering
Brault & Martineau to pay punitive damages. The Company recorded an
extraordinary charge in the amount of $2.545 million, or $1.731 million on an
after-tax basis, representing the full amount of the award by the Superior
Court and the Company's estimate of the ancillary distribution costs. This net
amount represents a reduction of $0.05 to the net per share earnings for the
period ended September 30th, 2007. The share repurchase program contributed
$0.03 to net per share earnings for the quarter ended September 30th, 2007.
Excluding all these effects, net earnings would have increased by 1,5 M$ or
$0.05 per share for the three-month period ended September 30th, 2007.
The adjusted 1,5 M$ in net earnings breaks down as follows for the
three-month period ended September 30th, 2007:
2007 2006
($ in thousands, except
for per share amounts)
Net Earnings 15,970 16,666
Cost (gain) of options
(after-tax) 259 (341)
(Gain) resulting from the sale
of fixed assets (after-tax) - 108
Provision for judgment (after-tax) 1,731 -
---------- ----------
Adjusted Net Earnings 17,960 16,433
MINUS : Adjusted Net Earnings 2006 16,433
----------
Increase 2007 1,527
A semi-annual eligible dividend of $0.15 per share has been declared to holders of Class A Subordinate voting shares and Class B Multiple voting shares of record as of the close of business on December 20th, 2007 which will be payable on January 3rd, 2008.
No options have been granted or exercised during the third quarter. As at September 30th, 2007, options for 1 613 370 Class A Subordinate Voting Shares therefore remain outstanding and 2,986,832 options may still be issued pursuant to the Plan. The outstanding options may be exercised at prices ranging between $2.52 and $7.19 per Class A Subordinate Voting Shares.
The number of outstanding shares of the Company changed during 2007 due to the share redemption programs implemented in September 2006 and renewed in 2007, and the conversion of Class B Multiple Voting Shares. Accordingly, 602,226 Class B Multiple Voting Shares and 1,213,428 Class A Subordinate Voting Shares were redeemed by the Company and cancelled, while 767,244 Class B Multiple Voting Shares were converted into as many Class A Subordinate Voting Shares. Also, 50,630 Class A Subordinate Voting Shares were issued following the exercise of a similar amount of options. As a result of these changes, the Company had, as of October 31st, 2007, 11,039,883 Class B Multiple Voting Shares and 20,109,493 Class A Subordinate Voting Shares outstanding.
BMTC Group Inc., which Class A Subordinate Voting Shares are listed on the Toronto Stock Exchange, is an important retailer of furniture, electronic goods and household appliances in the Montreal, Quebec City, Laval, Ste-Hyacinthe, St-Jean-sur-le-Richelieu, Granby, Repentigny, Ste-Foy, Sherbrooke, Trois-Rivieres, Rimouski, St-Georges, Riviere-du-Loup, Chicoutimi, and Gatineau regions through its affiliates Brault & Martineau Inc. and Ameublements Tanguay.