BMTC Group earnings dip 8% as sales rise 1%
Quebec retailer earns C$17.9 million in second quarter
Michael Knell -- Furniture Today, August 12, 2010
MONTREAL — Furniture, appliances and electronics retailer BTMC Group has reported a slight increase in sales but an 8% drop in earnings for the second quarter, attributing the latter to the costs of stock options it offers to senior management.
The company reported revenues of C$207.8 million, up just 1% from the C$204.9 million rung up for the corresponding 2009 period. Net income was C$17.9 million or 34 cents per share, down from C$19.7 million or 36 cents per share a year earlier.
BMTC said that the cost of options reduced net earnings by four cents per share, double the decrease of two cents per share for the same period last year. However, the company's ongoing share buyback program added two cents a share.
Excluding these items, net earnings fell by C$944,000 or two cents per share year-over-year.
For the first half, BMTC revenues of C$390.9 million were up 4% from the first half of 2009. Net income was C$21.5 million or 41 cents per share, down 5% from the C$22.8 million or 42 cents per share a year ago.
The company said the cost of options reduced basic net earnings by 13 cents per share this year compared with a decrease of four cents per share last year. The share repurchase program contributed an additional two cents per share this year.
Excluding these factors, net earnings would have increased by C$3.1 million or six cents per share over last year.
BMTC said that during the quarter, the company completed renovations to the electronics department at all nine of its Brault & Martineau bannered stores.
"Sales grew by 3% during the final quarter of 2009, 8% during the first quarter of 2010 and 1% during the second quarter of 2010," BMTC chairman, president and chief executive officer Yves Des Groseillers said in a note to shareholders.
He attributed those gains primarily to government stimulus initiatives in the wake of the recession.
"The months of June and July were rather disappointing, which would possibly foresee the same outcome for the fall," Des Grosseillers said. "The company's moderate growth could therefore be compromised."
As stimulus spending ends, he noted that government will then turn its attention to reducing deficits which "will probably result in higher interest rates as well as higher direct and indirect taxation, which will probably have the effect of reducing consumption."
However, Des Grosseillers believes the company's strong financial position will provide it will a competitive advantage in a difficult market.
Quebec's largest full-line furniture and appliance merchant, BMTC operated a total of 32 stores under the Brault & Martineau and Ameublements Tanguay banners throughout the province.
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