BMTC 3Q sales up 3.1%
By Michael J. Knell -- Furniture Today, November 25, 2007
Montreal — BMTC, Quebec's largest full-line furniture retailer, recorded a 3.1% sales gain in the third quarter despite what it described as a fiercely competitive environment. Profits, however, slipped in the period, although they rose 13% in the nine months.
The company had revenues of C$223.4 million in the latest quarter, compared with C$216.7 million in last year's third quarter. Net earnings were C$16 million, or 50 Canadian cents per share, compared with C$16.7 million, or 49 cents per share, in 2006.
BMTC said its share repurchase plan absorbed three cents per share of the decline in profits. But earnings were hurt by the costing of options and money set aside in the wake of a court ruling.
The Superior Court of Montreal has ordered BMTC's Brault & Martineau division to pay punitive damages of C$2 million plus interest and costs of distribution in a class action suit brought by consumers who purchased goods under a financing program.
BMTC said it will appeal the ruling, but recorded an extraordinary charge of C$2.54 million, or C$1.73 million after taxes, to potentially satisfy the full amount of the award.
In the nine months, BMTC reported revenues of C$617.9 million, a small increase over last year's C$615.7 million. Net earnings, however, improved to C$32.9 million, or C$1.02 per share, from C$29.1 million, or 85 Canadian cents a share, in last year's nine months.
The company noted that although nine-months sales rose only C$2.2 million, written sales, or transactions recorded in the stores, rose by $19 million, or 3%, in the first three quarter.
At the end of the quarter, BMTC operated 32 stores, including five freestanding Brault & Martineau Sleep Gallery stores. The rest are under the Brault & Martineau and Ameublesment Tanguay banners.
The company said it remained in a strong financial position, with no bank debt, an unused line of credit valued at C$20 million, and C$106 million in cash and investments in reserve.
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