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New Look Vision Group Inc Reports Record Results for the Second Quarter of 2018

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MONTRÉAL, Aug. 09, 2018 (GLOBE NEWSWIRE) -- New Look Vision Group Inc. ("New Look Vision" or the "Company") (TSX:BCI), a leader in the Canadian retail optical industry with 376 stores across Canada, reported financial results today for the 13 and 26 week periods ended June 30, 2018 ("Q2 2018"). This press release should be read in conjunction with the Company's management discussion and analysis (the "MD&A") and interim consolidated financial statements for the second quarter of 2018, which are available on the Company's website at http://www.newlookvision.ca/en/reports.aspx and have been posted on SEDAR at www.sedar.com.

Q2 2018 Financial and Operational Highlights

  • Revenues reached a record $77.2 million and adjusted EBITDA(1) reached $15.3 million for the period, representing increases of 39.5% and 40.3% respectively over the same period last year. The revenue increase was mainly due to the previously announced acquisition of Iris, as well as comparable stores sales growth of 2.6% over the same period last year. As a percentage of revenues, adjusted EBITDA in the second quarter increased to 19.8% from 19.7% for the same period last year.
  • Net earnings attributed to shareholders were $4.0 million, compared to $2.6 million last year, the increase being mainly due to a higher EBITDA, offset by depreciation, financial expenses, and income taxes.
  • Adjusted net earnings attributed to shareholders(1) (defined as net earnings adjusted to remove the impact of depreciation, acquisition-related costs, equity-based compensation, and other non-comparable costs) for the second quarter increased by $2.3 million to $9.3 million. Adjusted net earnings attributed to shareholders for the quarter compared to Q2 2017 increased 20.0% to $0.60 per diluted share. The increase is mainly due to higher EBITDA offset by higher depreciation, financial expenses, and income taxes. Depreciation and amortization expenses increased principally as a result of the acquisition of Iris and capital investments made in stores, manufacturing and distribution facilities, and computer equipment and softwares.
  • Free cash flow(1) reached $7.0 million, an 84.2% increase over the same period last year, principally due to increased EBITDA, offset by higher taxes paid and variations in working capital.
  • When adjusted for acquisition-related costs and other non-comparable costs, Adjusted cash flows from operating activities(1) were $14.6 million or $0.93 per diluted share, an increase of $3.8 million, or 35.4% over the same period last year.

Year-to-date Financial and Operating Results

  • Year-to-date revenues and adjusted EBITDA reached a record $147.0 million and $26.7 million respectively, which represent increases of 38.1% and 41.9% respectively over last year.
  • Net earnings attributed to shareholders were $6.2 million ($0.40 per diluted share) compared to $3.9 million last year ($0.28 per diluted share).
  • Adjusted net earnings attributed to shareholders, which is net earnings adjusted to remove the impact of depreciation, acquisition-related costs, equity-based compensation, and other non-comparable costs were $16.2 million, or $4.6 million  over last year. Adjusted net earnings attributed to shareholders increased to $1.04 per diluted share, up 25.3% from $0.83 in 2017. Comparable store sales year-to-date were up 2.1% over last year.
  • Free cash flow reached $11.7 million, a 130.8% increase over last year, principally due to increased EBITDA, offset by higher taxes paid.
  • Adjusted cash flows from operating activities were $25.3 million or $1.62 per diluted share, an increase of $6.8 million, or 36.4% over last year.

President & CEO's comments

Antoine Amiel, the President and CEO of New Look Vision, stated that: "The record second quarter ended with strong financial and operating results and progress toward our deleveraging goals. While overall results benefited significantly from the Iris acquisition, Q2 is the 16th consecutive quarter of comparable store sales growth. Entering the second half of the year, we maintain our unwavering focus on integration efforts and strengthening our position in the consolidating Canadian retail optical industry."

Dividend Approval

On August 9, 2018, the Board of Directors of New Look Vision declared a dividend of $0.15 per common share. The quarterly cash dividend will be paid on September 28, 2018 to the shareholders of record as of September 21, 2018.  The dividend has been designated as an "eligible dividend", that is a dividend entitling shareholders who are Canadian resident individuals to a higher dividend tax credit.

As of July 30, 2018, New Look Vision had 15,550,347 Class A common shares issued and outstanding.

Through the dividend reinvestment plan, shareholders residing in Canada may elect to re-invest their cash dividends into New Look Vision shares, without incurring brokerage commissions, fees and transaction costs. Until any further announcement, shares will be issued from treasury at 95% of the weighted average trading price for the five days preceding the dividend payment date. Any shareholder wishing to benefit from this opportunity may do so through his or her broker.

Attachments

  • Table A - Highlights
  • Table B - Consolidated Statement of Earnings
  • Table C - Reconciliation of Net Earnings to Adjusted EBITDA and Adjusted EBITDA Attributed to Shareholders
  • Table D - Reconciliation of Net Earnings to Adjusted Net Earnings
  • Table E - Reconciliation of Free Cash Flows and  and Adjusted Cash Flows from Operating Activities
  1. EBITDA, Adjusted EBITDA, Adjusted EBITDA attributed to shareholders, Adjusted net earnings, Free cash flow and Adjusted cash flows from operating activities are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. See Table C and Table D attached for a reconciliation of net earnings to EBITDA and Adjusted net earnings, respectively. See Table E for a reconciliation of cash flows and Table F for a reconciliation of debt.

About New Look Vision Group Inc.  New Look Vision is a leader in the eye care industry in Canada with a network of 376 stores operating mainly under the New Look Eyewear, Vogue Optical, Greiche & Scaff and Iris banners and laboratory facilities using state-of-the-art technologies. Tax information regarding payments to shareholders is available at www.newlookvision.ca in the Investors section.

All statements other than statements of historical fact contained in this press release are forward-looking statements, including, without limitation, statements regarding the future financial position, business strategy, projected costs and plans and objectives of, or involving New Look Vision. Readers can identify many of these statements by looking for words such as "believe", "expects",  "will", "intends", "projects", "anticipates", "estimates", "plans", "may", "would" or similar words or the negative thereof. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will be achieved. Forward-looking statements are subject to risks, uncertainties and assumptions. Although management of New Look Vision believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Some of the factors which could affect future results and could cause results to differ materially from those expressed in the forward-looking statements contained herein include: pending and proposed legislative or regulatory developments, competition from established competitors and new market entrants, technological change, interest rate fluctuations, general economic conditions, acceptance and demand for new products and services, and fluctuations in operating results, as well as other risks included in New Look Vision's current Annual Information Form (AIF) which can be found at www.sedar.com. The forward-looking statements included in this press release are made as of the date hereof, and New Look Vision undertakes no obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise, except as provided by law.

For additional information please see our Web site www.newlookvision.ca. For enquiries, please contact Lise Melanson (514) 877-4299, ext. 2234.

TABLE A
NEW LOOK VISION GROUP INC.
Highlights
for the periods ended June 30, 2018 and July 1, 2017
 
In thousands of Canadian dollars, except per share amounts
 
  13 weeks 26 weeks
  June 30, 2018   July 1, 2017   June 30, 2018   July 1, 2017  
Revenues $77,244   $55,389   $147,021   $106,432  
Variance % 39.5 %     38.1 %    
Variance in comparable store sales orders(a) 2.6 %     2.1 %    
Adjusted EBITDA(b) $15,307   $10,913   $26,652   $18,785  
Variance % 40.3 %     41.9 %    
% of revenues 19.8 % 19.7 % 18.1 % 17.6 %
Per share (diluted) $0.98   $0.79   $1.71   $1.35  
Variance % 24.1 %     26.7 %    
Net earnings attributed to shareholders $4,003   $2,625   $6,230   $3,909  
Variance % 52.5 %     59.4 %    
% of revenues 5.2 % 4.7 % 4.2 % 3.7 %
Adjusted EBITDA attributed to shareholders(b) $15,267   $10,879   $26,738   $18,706  
Per share (diluted) $0.98   $0.78   $1.71   $1.35  
Variance % 25.6 %     26.7 %    
Net earnings per share                
Per share (diluted) $0.26   $0.19   $0.40   $0.28  
Variance % 36.8 %     42.9 %    
Adjusted net earnings attributed to shareholders(b) $9,302   $6,977   $16,201   $11,565  
Variance % 33.3 %     40.1 %    
% of revenues 12.0 % 12.6 % 11.0 % 10.9 %
Per share (diluted) $0.60   $0.50   $1.04   $0.83  
Variance % 20.0 %     25.3 %    
Free cash flow(b)(f) $6,979   $3,788   $11,698   $5,069  
Variance % 84.2 %     130.8 %    
Per share (diluted) $0.45   $0.27   $0.75   $0.37  
Variance % 66.7 %     102.7 %    
Adjusted cash flows from operating activities(b)(g) $14,593   $10,781   $25,329   $18,568  
Variance % 35.4 %     36.4 %    
Per share (diluted) $0.93   $0.78   $1.62   $1.34  
Variance % 19.2 %     20.9 %    
Total debt(c)         $164,940   $95,234  
Cash dividend per share(d) $0.15   $0.15   $0.30   $0.30  
Number of stores(e)         376   227  
  1. Comparable stores are stores which have been operating for at least 12 months. Revenues are recognized at time of delivery of goods to customers, however management measures the comparable store performance on the basis of sales orders, whether delivered or not.
  2. EBITDA, Adjusted EBITDA , Adjusted EBITDA attributed to shareholders, Adjusted net earnings, Free cash flow, Adjusted cash flows from operating activities are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. Refer to Table C and Table D for a reconciliation of these measures to net earnings. Also, refer to Table E for reconciliation of cash flows.
  3. Combined contractual and voluntary long-term debt repayments were $3.9 million and $8.2 million in the quarter and year-to-date periods, respectively.
  4. The amounts of dividends shown in the table above refer to amounts declared in the periods.
  5. The increase in the number of stores in the last twelve months reflects the acquisitions of 152 stores, three openings, and six closures.
  6. Free cash flow is defined as cash flows from operating activities, less acquisitions of property, plant and equipment.
  7. Adjusted cash flows from operating activities is defined as cash flows from operating activities before income taxes paid, changes in working capital items, and acquisition-related costs.
TABLE B
NEW LOOK VISION GROUP INC.
Consolidated Statement of Earnings
for the periods ended June 30, 2018 and July 1, 2017
 
In thousands of Canadian dollars, except per share amounts
 
  13  weeks  26 weeks 
  June 30, 2018   July 1, 2017   June 30, 2018   July 1, 2017  
  $   $   $   $  
Revenues 77,244   55,389   147,021   106,432  
Materials consumed 17,428   12,536   32,420   23,800  
Employee remuneration expenses 25,605   18,193   50,321   36,433  
Other operating expenses 21,254   15,861   41,160   30,780  
Earnings before depreciation, amortization, loss on disposal,
financial expenses, and income from investments in joint ventures
and associates
12,957   8,799   23,120   15,419  
Depreciation, amortization and loss on disposal 5,285   3,374   10,663   6,413  
Financial expenses, net of interest revenue 2,280   909   4,085   2,288  
Earnings before income from investments in joint ventures and
associates and income taxes
5,392   4,516   8,372   6,718  
Income from investments in joint ventures and associates 676     1,135    
Earnings before income taxes 6,068   4,516   9,507   6,718  
Income taxes        
Current 1,955   2,137   3,185   3,226  
Deferred (34 ) (265 ) (123 ) (464 )
Total income taxes 1,921   1,872   3,062   2,762  
Net earnings and comprehensive income 4,147   2,644   6,445   3,956  
Net earnings and comprehensive income attributed to:        
Non-controlling interest 144   19   215   47  
Shareholders of New Look Vision 4,003   2,625   6,230   3,909  
  4,147   2,644   6,445   3,956  
         
Net earnings per share        
Basic 0.26   0.19   0.40   0.29  
Diluted 0.26   0.19   0.40   0.28  


TABLE C
NEW LOOK VISION GROUP INC.
Reconciliation of Net Earnings to Adjusted EBITDA and Adjusted EBITDA Attributed to Shareholders
for the periods ended June 30, 2018 and July 1, 2017
 
In thousands of Canadian dollars, except per share amounts
 
  13 weeks 26 weeks
  June 30, 2018   July 1, 2017   June 30, 2018   July 1, 2017  
  $   $   $   $  
Net earnings 4,147   2,644   6,445   3,956  
Depreciation, amortization and loss on disposal 5,285   3,374   10,663   6,413  
Financial expenses, net of interest revenue 2,280   909   4,085   2,288  
Income taxes 1,921   1,872   3,062   2,762  
EBITDA(a) 13,633   8,799   24,255   15,419  
Equity-based compensation(b) 440   337   646   877  
Net loss (gain) from changes in fair value of foreign exchange contracts (1 ) 107   (42 ) 126  
Acquisition-related costs(c) 622   1,365   1,180   2,058  
Other non-comparable costs(d) 613   305   613   305  
Adjusted EBITDA(a) 15,307   10,913   26,652   18,785  
Variance in $ 4,394       7,867      
Variance in % 40.3 %     41.9 %    
% of revenues 19.8 % 19.7 % 18.1 % 17.6 %
Per share (basic) 0.99   0.80   1.72   1.38  
Per share (diluted) 0.98   0.79   1.71   1.35  

The following table represents the adjusted EBITDA available to New Look Vision shareholders, which takes into consideration the investments in joint ventures and associates.

  13 weeks 26 weeks
  2018   2017   2018   2017  
  $   $   $   $  
Adjusted EBITDA 15,307   10,913   26,652   18,785  
Income from investments in joint ventures and associates (676 )   (1,135 )  
EBITDA from investments in joint ventures and associates 1,056     1,987    
EBITDA attributed to non-controlling interest (420 ) (34 ) (766 ) (79 )
Adjusted EBITDA attributed to shareholders(a) 15,267   10,879   26,738   18,706  
  1. EBITDA, Adjusted EBITDA and Adjusted EBITDA attributed to shareholders are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. New Look Vision believes that EBITDA, Adjusted EBITDA and Adjusted EBITDA attributed to shareholders are useful financial metrics as they assist in determining the ability to generate cash from operations. Investors should be cautioned that EBITDA, Adjusted EBITDA and Adjusted EBITDA attributed to shareholders should not be considered as an alternative to net earnings or cash flows as determined under IFRS.
  2. Equity-based compensation represents the fair value of New Look Vision stock options vested in the period.
  3. Acquisition-related costs are mainly comprised of legal and other fees related to the business acquisitions, whether completed or in progress. 
  4. Other non-comparable costs include one-time expenses connected with personnel transition costs and related matters.
TABLE D
NEW LOOK VISION GROUP INC.
Reconciliation of Net Earnings to Adjusted Net Earnings
for the periods ended June 30, 2018 and July 1, 2017
 
In thousands of Canadian dollars, except per share amounts
 
  13 weeks 26 weeks
  June 30, 2018   July 1, 2017   June 30, 2018   July 1, 2017  
  $   $   $   $  
Net earnings attributed to shareholders 4,003   2,625   6,230   3,909  
Depreciation, amortization and loss on disposal of assets 5,285   3,374   10,663   6,413  
Acquisition-related costs 622   1,365   1,180   2,058  
Equity-based compensation 440   337   646   877  
Other non-comparable costs 613   305   613   305  
Related income taxes (1,661 ) (1,029 ) (3,131 ) (1,997 )
Adjusted net earnings attributed to shareholders(a) 9,302   6,977   16,201   11,565  
Variance in $ 2,325       4,636      
Variance in % 33.3 %     40.1 %    
% of revenues 12.0 % 12.6 % 11.0 % 10.9 %
Per share amount                
Basic 0.60   0.51   1.05   0.85  
Diluted 0.60   0.50   1.04   0.83  
  1. Adjusted net earnings attributed to shareholders are not a recognized measure under IFRS and may not be comparable to similar measures used by other entities. New Look Vision believes that this disclosure provides useful information as it allows the comparison of net results excluding depreciation, amortization and loss on disposal of assets, acquisition-related costs, equity-based compensation, and other non-comparable costs which may vary significantly from quarter to quarter. Investors should be cautioned that adjusted net earnings should not be considered as an alternative to net earnings as determined under IFRS.


TABLE E
NEW LOOK VISION GROUP INC.
Reconciliation of Free Cash Flow and Adjusted Cash Flows from Operating Activities
for the periods ended June 30, 2018 and July 1, 2017
 
In thousands of Canadian dollars, except per share amounts
 
  13 weeks 26 weeks
  June 30, 2018   July 1, 2017   June 30, 2018   July 1, 2017  
  $   $   $   $  
Earnings before income taxes 6,068   4,516   9,507   6,718  
Adjustments:        
Depreciation, amortization and loss on disposal 5,285   3,374   10,663   6,413  
Amortization of deferred lease inducements and variation of deferred rent (39 ) (37 ) (89 ) (103 )
Equity-based compensation expense 440   337   646   877  
Financial expenses 2,350   922   4,225   2,307  
  Interest revenue (70 ) (13 ) (140 ) (19 )
Other   12   (141 ) 12  
Income from investments in joint ventures and associates (676 )   (1,135 )  
Income taxes paid (1,294 ) (663 ) (4,125 ) (2,381 )
Cash flows related to operating activities, before changes in working capital items 12,064   8,448   19,411   13,824  
Changes in working capital items (2,920 ) (1,085 ) (1,513 ) (1,132 )
Cash flows related to operating activities 9,144   7,363   17,898   12,692  


Free cash flow    
  13 weeks 26 weeks
  June 30, 2018   July 1, 2017   June 30, 2018   July 1, 2017  
  $   $   $   $  
Cash flows related to operating activities 9,144   7,363   17,898   12,692  
Acquisitions of property, plant and equipment (2,165 ) (3,575 ) (6,200 ) (7,623 )
Free cash flow 6,979   3,788   11,698   5,069  

Free cash flow is not a recognized measure under IFRS and may not be comparable to similar measures used by other entities. New Look Vision believes that this disclosure provides useful information as it provides insight on operating cash flows available after considering necessary capital investments. Investors should be cautioned that free cash flow should not be considered as an alternative to cash flows related to operating activities as determined under IFRS.

Free cash flow has increased in both the quarter and year-to-date periods, by $3.2 million and $6.6 million, respectively, indicating a favourable trend in cash flows from operations, after considering necessary capital investments.

Adjusted cash flows from operating activities
  13 weeks 26 weeks
  June 30, 2018   July 1, 2017   June 30, 2018   July 1, 2017  
  $   $   $   $  
Cash flows related to operating activities 9,144   7,363   17,898   12,692  
Income taxes paid 1,294   663   4,125   2,381  
Changes in working capital items 2,920   1,085   1,513   1,132  
Acquisition-related costs 622   1,365   1,180   2,058  
Other non-comparable costs 613   305   613   305  
Adjusted cash flows from operating activities(a) 14,593   10,781   25,329   18,568  
  1. Adjusted cash flows from operating activities are not a recognized measure under IFRS and may not be comparable to similar measures used by other entities. New Look Vision believes that this disclosure provides useful information as it allows the comparison of net operating cash flows excluding acquisition-related costs and other non-comparable costs, which may vary significantly from quarter to quarter. Investors should be cautioned that adjusted cash flows from operating activities should not be considered as an alternative to cash flows related to operating activities as determined under IFRS.

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