UPDATE: BMTC Group sales rise 3% in fourth quarter
Earnings per share down 14% for furniture, appliance retailer
Michael Knell -- Furniture Today, February 22, 2010
MONTREAL — BMTC Group, Quebec's dominant full-line furniture and appliance retailer, said sales for the fourth quarter of 2009 were C$232.1 million, a gain of 3% over the same period in 2008.
However, profitability fell 14% per share. Net earnings of C$18.7 million or 72 cents per share were down from C$21.8 million or 79 cents per share in the 2008 fourth quarter.
BMTC said several factors affected profitability in the latest quarter. Its method of costing stock options for senior management reduced basic earnings per share by 30 cents, whereas last year it added 3 cents per share.
The cost of options varies with the changes in the company's share price as it's traded on the Toronto Stock Exchange. Any increase in the price incurs an expense while a decrease is shown as revenue. BMTC says it is one of the few public companies that both expenses options on an ongoing basis and allows the holder to exercise his or her options in lieu of cash.
Also driving down earnings were losses related to the company's asset-backed commercial paper investments. BMTC recorded a charge of C$1.3 million or 5 cents per share after tax, for them. In the 2008 period, the same charge totalled C$2.5 million or 9 cents per share.
Contributing to earnings in the latest quarter were the sale of fixed assets (adding 6 cents per share) and the company's ongoing share repurchase program (adding another 6 cents).
Excluding these factors, net earnings would have higher by C$5.9 million or 22 cents per share, BMTC said.
For the full year, total revenue of C$818.1 million was down 4.4% from C$856.2 million in 2008.
While net earnings fell 4% to C$67 million in 2009 from the C$69.9 million booked for 2008, the buyback program meant that earnings per share climbed 7% to C$2.53, up from C$2.36 a year earlier.
While the costing of options reduced earnings by 44 cents per share, the sale of assets added 17 cents and the share repurchase program contributed another 24 cents per share.
Over the past year, BMTC bought back 581,100 of its Class A shares at an average price of C$20.52 per share. There are now just over 16 million Class A shares outstanding.
The company also announced it will renew the buyback program on March 1. Over the next 12 months it will be authorized to acquire for cancellation as many as 800,088 of its Class A shares, or about 5% of the total outstanding.
BMTC's board of directors also has endorsed a 2-for-1 split of both its Class A and Class B shares on April 6 - although the move is still subject to approval by the Toronto Stock Exchange.
Headquartered here, BMTC Group operates some 23 stores in Quebec under the Brault & Martineau and Ameublements Tanguay banners.
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