Q2 2020 Financial and Operational Highlights
Q2 2020 highlights, which were significantly impacted by COVID-19, are as follows:
- Revenues decreased by 64.9% to
$27.4 million , resulting principally from COVID-19 temporary store closures, as well as scheduled store closures offset by revenue from newly acquired stores. - Adjusted EBITDA attributed to shareholders(a) was
$1.2 million , a decrease of$14.1 million or 92.3% from last year and decreased 91.8% on a per diluted share basis to$0.08 . - Net loss attributed to shareholders was
$12.4 million , a decrease of 281.5% from last year. - Adjusted net (loss)/earnings attributed to shareholders(a) decreased by 231.7% to
($9.7) million or ($0.62 ) on a per diluted share basis. - Cash flows related to operating activities reached
$5.5 million , a decrease of$4.7 million or 46.3% from last year and decreased 47.0% on a per diluted share basis to$0.35 . - During the quarter, the Company successfully secured
$73.9 million of additional bank and subordinated debt financing. - The Board of Directors suspended the regular quarterly dividend and the corresponding dividend reinvestment plan until further notice, effective
March 19, 2020 in order to improve liquidity during the COVID-19 period.
Year-to-date Financial and Operating Results
It should be noted that the Company has adopted IFRS 16 Leases effective Q1 2020. The Company has applied a modified retrospective approach; the operating results of previous fiscal periods have not been restated. Occupancy costs previously recorded as operating expenses are now recorded through depreciation of right-of-use assets and interest expenses on lease liabilities.
- Year-to-date revenues and adjusted EBITDA attributed to shareholders(a) were
$95.5 million and$16.6 million respectively, which represent decreases of 36.2% and 38.9% respectively from last year. - The increase in the number of stores in the last twelve months reflects the acquisition of 19 stores net of five planned closures and the sale of one clinic.
- Net (loss)/earnings attributed to shareholders were
($12.7) million or ($0.81 ) per diluted share, compared to$8.9 million last year or$0.57 per diluted share. - Adjusted net (loss)/earnings attributed to shareholders(a) decreased to
($8.3) million , a decrease of$19.6 million , as compared to last year. Adjusted net (loss)/earnings attributed to shareholders(a) reached ($0.53 ) per diluted share, down 173.6% from$0.72 in 2019. - Cash flows related to operating activities reached
$19.0 million , a decrease of 16.7% as compared to last year and decreased 17.1% on a per diluted share basis to$1.21 .
Actions in response to COVID-19
- Participation in stemming the pandemic spread by closing a large number of locations early on (stores, offices, factories and distribution centers).
- Protection for our employees with a supplemental pay program for those placed on temporary leave. Protection of our financial autonomy with immediate cash burn optimization (expense freeze, CAPEX postponement, dividend suspension, executive pay reduction) and expansion of our available funding from both our lenders. As a result, the Company is confident that it has the necessary financial resource to sustain the ongoing impact of the pandemic.
- Responsibility, as eye care professionals, to keep open a minimum number of stores to serve those in urgent need of eye care and eyewear. The Company launched the Guardian Angel program on
March 25 th giving hospital personnel the opportunity to replace broken eyewear quickly. Our central lens processing facility retooled to produce safety eyewear for use in health care facilities.
Throughout the shutdown, teams working on strategic initiatives, both internal and external, have carried on.
Network Re-Opening
Gradual store reopening started on
New Financing Arrangements
In Q2 2020, the Company successfully secured an additional
President & CEO's comments
Status of Dividend
The Board of Directors suspended the regular quarterly dividend and the corresponding dividend reinvestment plan until further notice, effective
The decision to declare a dividend is made quarterly when the financial statements for a quarter or a financial year are made available to the Board of Directors. Although there is no guarantee that a dividend will be declared in the future,
As at
Attachments
- Table A - Highlights
- Table B - Impact of IFRS 16
- Table C - Consolidated Statement of Earnings
- Table D - Reconciliation of Net (Loss)/Earnings to Adjusted EBITDA and Adjusted EBITDA Attributed to Shareholders
- Table E - Reconciliation of Net (Loss)/Earnings Attributed to Shareholders to Adjusted Net Earnings Attributed to Shareholders
- Table F - Reconciliation of Free Cash Flow and Adjusted Cash Flows Related to Operating Activities
- EBITDA, adjusted EBITDA, adjusted EBITDA attributed to shareholders, adjusted net (loss)/earnings, free cash flow and adjusted cash flows related to operating activities are not recognized measures under IFRS and may not be comparable to similar measures used by other entities.
About New Look Vision Group Inc.
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
For additional information please see our website at www.newlookvision.ca. For enquiries, please contact
TABLE A
Highlights
for the periods ended
In thousands of Canadian dollars, except per share amounts
13 weeks | 26 weeks | |||||
Revenues | $27,423 | $27,423 | $78,053 | $95,457 | $95,457 | $149,519 |
Variance % | (64.9%) | (64.9%) | (36.2%) | (36.2%) | ||
Variance in comparable store sales orders(a)(b) | — | — | 1.6 % | — | — | 2.1% |
Adjusted EBITDA attributed to shareholders(b) | $1,181 | ($4,834) | $15,269 | $16,584 | $5,116 | $27,151 |
Variance % | (92.3%) | (131.7%) | (38.9%) | (81.2%) | ||
% of revenues | 4.3% | (17.6%) | 19.6% | 17.4% | 5.4 % | 18.2% |
Per share (diluted) | ( | |||||
Variance % | (91.8 %) | (131.6%) | (39.1%) | (81.0%) | ||
Net (loss)/earnings attributed to shareholders | ($12,380) | ($11,827) | $6,820 | ($12,697) | ($11,643) | $8,890 |
Variance % | (281.5 %) | (273.4%) | (242.8%) | (231.0%) | ||
% of revenues | (45.1 %) | (43.1%) | 8.7% | (13.3%) | (12.2%) | 5.9% |
Net (loss)/earnings per share | ||||||
Per share (diluted) | ( | ( | ( | ( | ||
Variance % | (279.5%) | (272.7%) | (242.1%) | (229.8%) | ||
Adjusted net (loss)/earnings attributed to shareholders(b) | ($9,705) | ($9,152) | $7,370 | ($8,272) | ($7,218) | $11,288 |
Variance % | (231.7%) | (224.2%) | (173.3%) | (163.9%) | ||
% of revenues | (35.4%) | (33.4%) | 9.4% | (8.7%) | (7.6%) | 7.5% |
Per share (diluted) | ( | ( | ( | ( | ||
Variance % | (231.9%) | (223.4%) | (173.6%) | (163.9%) | ||
Cash flows related to operating activities | $5,505 | $4,893 | $10,249 | $18,982 | $12,917 | $22,792 |
Variance % | (46.3%) | (52.3%) | (16.7%) | (43.3%) | ||
Per share (diluted) | ||||||
Variance % | (47.0%) | (53.0%) | (17.1%) | (43.8%) | ||
Free cash flow(b)(c) | $4,466 | $3,854 | $8,532 | $14,388 | $8,323 | $18,799 |
Variance % | (47.7%) | (54.8%) | (23.5%) | (55.7%) | ||
Per share (diluted) | ||||||
Variance % | (47.3%) | (54.5%) | (23.3%) | (55.8%) | ||
Total debt | $223,735 | $223,735 | $154,486 | |||
Net debt / Adjusted EBITDA attributed to shareholders(b)(d) | 3.90 | 5.22 | 2.69 | |||
Cash dividend per share(e) | — | — | — | — | ||
Number of stores(f) | 391 | 391 | 378 |
- Comparable stores are stores which have been operating for at least 12 months. Due to the exceptional circumstances in the quarter whereby the majority of the Company’s stores were closed for most of the period, management deems the period to be non-comparable and is therefore not reporting a comparable store sales metric. 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.
- Adjusted EBITDA attributed to shareholders, adjusted net (loss)/earnings attributed to shareholders, free cash flow and comparable store sales orders are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. Refer to Table D and Table E for the reconciliations of these measures to net (loss)/earnings, and to Table F for the reconciliation of cash flows.
- Free cash flow is defined as cash flows related to operating activities, less acquisitions of property, plant and equipment.
- Net debt is defined as total debt less cash. Adjusted EBITDA attributed to shareholders represents the amount over the last four rolling quarters.
- The amounts of dividends shown in the table above refer to amounts declared in the periods.
- The increase in the number of stores in the last twelve months reflects the acquisition of 19 stores net of five planned closures and the sale of one clinic.
TABLE B
Impact of IFRS 16
for the periods ended
In thousands of Canadian dollars, except per share amounts
The Company has adopted IFRS 16 Leases effective Q1 2020. This standard replaces IAS 17 Leases. The Company has applied a modified retrospective approach; the operating results of previous fiscal periods have not been restated. The adoption of this standard has impacted the Company’s financial results in 2020. Certain occupancy-related expenses previously recorded under the caption other operating expenses are now recorded as depreciation and interest expense.
This change has resulted in a reduction to Other operating expenses with a corresponding increase in EBITDA when compared to the same metrics under IAS 17. Depreciation and financial expenses have increased as a result of the application of the standard.
The impact of IFRS 16 on the key metrics in the second quarter and year-to-date period ended
13 weeks | 26 weeks | |||||||||||||||||||
Impact of IFRS 16 | Change (excl. IFRS 16) | Impact of IFRS 16 | Change (excl. IFRS 16) | |||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||
Adjusted EBITDA attributed to shareholders(a) | ( | ) | ( | ) | ( | ) | ||||||||||||||
% of revenues | 4.3% | 21.9% | (17.6% | ) | 19.6% | (37.2% | ) | 17.4% | 12.0% | 5.4% | 18.2% | (12.8% | ) | |||||||
Per share (diluted) | ( | ) | ( | ) | ( | ) | ||||||||||||||
Net (loss)/earnings attributed to shareholders | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||
% of revenues | (45.1% | ) | (2.0% | ) | (43.1% | ) | 8.7% | (51.8% | ) | (13.3% | ) | (1.1% | ) | (12.2% | ) | 5.9% | (18.1% | ) | ||
Per share (diluted) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Adjusted net (loss)/earnings attributed to shareholders(a) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||
% of revenues | (35.4% | ) | (2.0% | ) | (33.4% | ) | 9.4% | (42.8% | ) | (8.7% | ) | (1.1% | ) | (7.6% | ) | 7.5% | (15.1% | ) | ||
Per share (diluted) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Cash flows related to operating activities | ( | ) | ( | ) | ||||||||||||||||
Per share (diluted) | ( | ) | ( | ) | ||||||||||||||||
Free cash flow(a) | ( | ) | ( | ) | ||||||||||||||||
Per share (diluted) | ( | ) | ( | ) | ||||||||||||||||
- Adjusted EBITDA attributed to shareholders, adjusted net (loss)/earnings attributed to shareholders and free cash flow are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. Refer to Table D and Table E for the reconciliations of these measures to net (loss)/earnings, and to Table F for the reconciliation of cash flows.
TABLE C
Consolidated Statement of Earnings
for the periods ended
In thousands of Canadian dollars, except per share amounts
13 weeks | 26 weeks | |||||||
$ | $ | $ | $ | |||||
Revenues | 27,423 | 78,053 | 95,457 | 149,519 | ||||
Materials consumed | 8,475 | 17,094 | 24,113 | 32,746 | ||||
Employee remuneration expenses | 8,265 | 26,056 | 31,882 | 50,829 | ||||
Other operating expenses | 11,509 | 19,638 | 25,809 | 40,138 | ||||
Earnings before depreciation, amortization, loss on disposal, financial expenses, and income from investments in joint ventures and associates | (826 | ) | 15,265 | 13,653 | 25,806 | |||
Depreciation, amortization and loss on disposal | 9,972 | 4,444 | 19,285 | 8,864 | ||||
Financial expenses, net of interest revenue | 6,175 | 2,297 | 11,804 | 5,535 | ||||
Earnings (loss) before income from investments in joint ventures and associates and income taxes | (16,973 | ) | 8,524 | (17,436 | ) | 11,407 | ||
Income from investments in joint ventures and associates | 128 | 729 | 313 | 1,058 | ||||
Earnings (loss) before income taxes | (16,845 | ) | 9,253 | (17,123 | ) | 12,465 | ||
Income taxes | ||||||||
Current | (2,827 | ) | 2,061 | (1,855 | ) | 3,116 | ||
Deferred | (1,460 | ) | 143 | (2,438 | ) | 115 | ||
Total income taxes | (4,287 | ) | 2,204 | (4,293 | ) | 3,231 | ||
Net earnings (loss) | (12,558 | ) | 7,049 | (12,830 | ) | 9,234 | ||
Net earnings (loss) attributed to: | ||||||||
Non-controlling interest | (178 | ) | 229 | (133 | ) | 344 | ||
Shareholders of | (12,380 | ) | 6,820 | (12,697 | ) | 8,890 | ||
(12,558 | ) | 7,049 | (12,830 | ) | 9,234 | |||
Net earnings (loss) per share | ||||||||
Basic | (0.79 | ) | 0.44 | (0.81 | ) | 0.57 | ||
Diluted | (0.79 | ) | 0.44 | (0.81 | ) | 0.57 |
TABLE D
Reconciliation of Net (Loss)/Earnings to Adjusted EBITDA and Adjusted EBITDA Attributed to Shareholders
for the periods ended
In thousands of Canadian dollars, except per share amounts
13 weeks | 26 weeks | |||||||||||
$ | $ | $ | $ | $ | $ | |||||||
Net (loss)/earnings | (12,558 | ) | (11,978 | ) | 7,049 | (12,830 | ) | (11,749 | ) | 9,234 | ||
Depreciation, amortization and loss on disposal | 9,972 | 4,939 | 4,444 | 19,285 | 9,542 | 8,864 | ||||||
Financial expenses, net of interest revenue | 6,175 | 4,675 | 2,297 | 11,804 | 8,870 | 5,535 | ||||||
Income taxes | (4,287 | ) | (4,062 | ) | 2,204 | (4,293 | ) | (3,878 | ) | 3,231 | ||
EBITDA(a) | (698 | ) | (6,426 | ) | 15,994 | 13,966 | 2,785 | 26,864 | ||||
Equity-based compensation(b) | 104 | 104 | 277 | 272 | 272 | 483 | ||||||
Net loss from changes in fair value of foreign exchange contracts | — | — | 12 | — | — | 12 | ||||||
Acquisition-related costs(c) | 428 | 428 | 359 | 860 | 860 | 747 | ||||||
Other non-comparable items(d) | 948 | 948 | (1,095 | ) | 1,118 | 1,118 | (954 | ) | ||||
Adjusted EBITDA(a) | 782 | (4,946 | ) | 15,547 | 16,216 | 5,035 | 27,152 | |||||
Variance in $ | (14,765 | ) | (20,493 | ) | (10,936 | ) | (22,117 | ) | ||||
Variance in % | (95.0 | %) | (131.8 | %) | (40.3 | %) | (81.5 | %) | ||||
% of revenues | 2.9 | % | (18.0 | %) | 19.9 | % | 17.0 | % | 5.3 | % | 18.2 | % |
Per share (basic) | 0.05 | (0.32 | ) | 1 | 1.04 | 0.32 | 1.74 | |||||
Per share (diluted) | 0.05 | (0.32 | ) | 0.99 | 1.04 | 0.32 | 1.74 |
The following table represents the adjusted EBITDA available to
13 weeks | 26 weeks | |||||||||||
$ | $ | $ | $ | $ | $ | |||||||
Adjusted EBITDA(a) | 782 | (4,946 | ) | 15,547 | 16,216 | 5,035 | 27,152 | |||||
Income from investments in joint ventures and associates | (128 | ) | (197 | ) | (729 | ) | (313 | ) | (382 | ) | (1,058 | ) |
EBITDA from investments in joint ventures and associates | 984 | 512 | 1,036 | 1,381 | 909 | 1,894 | ||||||
EBITDA attributed to non-controlling interest | (457 | ) | (203 | ) | (585 | ) | (700 | ) | (446 | ) | (837 | ) |
Adjusted EBITDA attributed to shareholders(a) | 1,181 | (4,834 | ) | 15,269 | 16,584 | 5,116 | 27,151 |
- 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. - Equity-based compensation represents the fair value of
New Look Vision stock options vested in the period. - Acquisition-related costs are composed of wages and professional fees specifically incurred in the business acquisition process, whether an acquisition is completed or not.
- Other non-comparable items include one-time expenses (income) connected with personnel costs related to acquisition, restructuring and transition related matters.
TABLE E
Reconciliation of Net (Loss)/Earnings Attributed to Shareholders to Adjusted Net (Loss)/Earnings Attributed to Shareholders
for the periods ended
In thousands of Canadian dollars, except per share amounts
13 weeks | 26 weeks | |||||||||||
$ | $ | $ | $ | $ | $ | |||||||
Net (loss)/earnings attributed to shareholders | (12,380 | ) | (11,827 | ) | 6,820 | (12,697 | ) | (11,643 | ) | 8,890 | ||
Amortization of acquired intangibles | 1,788 | 1,788 | 1,659 | 3,436 | 3,436 | 3,261 | ||||||
Acquisition-related costs | 428 | 428 | 359 | 860 | 860 | 747 | ||||||
Equity-based compensation | 104 | 104 | 277 | 272 | 272 | 483 | ||||||
Other non-comparable items | 948 | 948 | (1,095 | ) | 1,118 | 1,118 | (954 | ) | ||||
Related income taxes | (593 | ) | (593 | ) | (650 | ) | (1,261 | ) | (1,261 | ) | (1,139 | ) |
Adjusted net (loss)/earnings attributed to shareholders(a) | (9,705) | ) | (9,152 | ) | 7,370 | (8,272 | ) | (7,218 | ) | 11,288 | ||
Variance in $ | (17,075 | ) | (16,522 | ) | (19,560 | ) | (18,506 | ) | ||||
Variance in % | (231.7 | %) | (224.2 | %) | (173.3 | %) | (163.9 | %) | ||||
% of revenues | (35.4 | %) | (33.4 | %) | 9.4 | % | (8.7 | %) | (7.6 | %) | 7.5 | % |
Per share amount | ||||||||||||
Basic | (0.62 | ) | (0.58 | ) | 0.47 | (0.53 | ) | (0.46 | ) | 0.72 | ||
Diluted | (0.62 | ) | (0.58 | ) | 0.47 | (0.53 | ) | (0.46 | ) | 0.72 |
- Adjusted net (loss)/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 amortization of acquired intangibles, acquisition-related costs, equity-based compensation, other non-comparable items and related income taxes, which may vary significantly from quarter to quarter. Investors should be cautioned that adjusted net (loss)/earnings should not be considered as an alternative to net earnings as determined under IFRS.
TABLE F
Reconciliation of Free Cash Flow and Adjusted Cash Flows Related to Operating Activities
for the periods ended
In thousands of Canadian dollars, except per share amounts
13 weeks | 26 weeks | |||||||||||
$ | $ | $ | $ | $ | $ | |||||||
Earnings/(loss) before income taxes | (16,845 | ) | (16,040 | ) | 9,253 | (17,123 | ) | (15,627 | ) | 12,465 | ||
Adjustments: | ||||||||||||
Depreciation, amortization and loss on disposal | 9,972 | 4,939 | 4,444 | 19,285 | 9,542 | 8,864 | ||||||
Equity-based compensation | 104 | 104 | 277 | 272 | 272 | 483 | ||||||
Financial expenses | 6,301 | 4,801 | 2,380 | 12,073 | 9,139 | 5,696 | ||||||
Interest revenue | (126 | ) | (126 | ) | (83 | ) | (269 | ) | (269 | ) | (161 | ) |
Other | (302 | ) | (302 | ) | (16 | ) | (1,014 | ) | (1,014 | ) | (85 | ) |
Income from investments in joint ventures and associates | (128 | ) | (197 | ) | (729 | ) | (313 | ) | (382 | ) | (1,058 | ) |
Income taxes received (paid) | 89 | 89 | (1,066 | ) | (1,084 | ) | (1,084 | ) | (2,745 | ) | ||
Cash flows related to operating activities, before changes in working capital items | (935 | ) | (6,732 | ) | 14,460 | 11,827 | 577 | 23,459 | ||||
Changes in working capital items | 6,440 | 11,625 | (4,211 | ) | 7,155 | 12,340 | (667 | ) | ||||
Cash flows related to operating activities | 5,505 | 4,893 | 10,249 | 18,982 | 12,917 | 22,792 |
Free cash flow
13 weeks | 26 weeks | |||||||||||
$ | $ | $ | $ | $ | $ | |||||||
Cash flows related to operating activities | 5,505 | 4,893 | 10,249 | 18,982 | 12,917 | 22,792 | ||||||
Acquisitions of property, plant and equipment | (1,039 | ) | (1,039 | ) | (1,717 | ) | (4,594 | ) | (4,594 | ) | (3,993 | ) |
Free cash flow(a) | 4,466 | 3,854 | 8,532 | 14,388 | 8,323 | 18,799 |
- 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.
Adjusted cash flows related to operating activities
13 weeks | 26 weeks | |||||||||||
$ | $ | $ | $ | $ | $ | |||||||
Cash flows related to operating activities | 5,505 | 4,893 | 10,249 | 18,982 | 12,917 | 22,792 | ||||||
Income taxes paid | (89 | ) | (89 | ) | 1,066 | 1,084 | 1,084 | 2,745 | ||||
Changes in working capital items | (6,440 | ) | (11,625 | ) | 4,211 | (7,155 | ) | (12,340 | ) | 667 | ||
Acquisition-related costs | 428 | 428 | 359 | 860 | 860 | 747 | ||||||
Other non-comparable items | 948 | 948 | (1,095 | ) | 1,118 | 1,118 | (954 | ) | ||||
Adjusted cash flows related to operating activities(a) | 352 | (5,445 | ) | 14,790 | 14,889 | 3,639 | 25,997 |
- Adjusted cash flows related to 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 income taxes paid, changes in working capital items, acquisition-related costs and other non-comparable items, which may vary significantly from quarter to quarter. Certain occupancy-related expenses previously recorded in the cash flows related to operating activities are now presented in the cash flows related to financing activities. Investors should be cautioned that adjusted cash flows related to operating activities should not be considered as an alternative to cash flows related to operating activities as determined under IFRS.
Source:
2020 GlobeNewswire, Inc., source