BMTC Group sales fall 10.9% in first quarter

Tighter credit, Quebec sales tax rise cited as factors

Michael J. Knell -- Furniture Today, May 17, 2011

MONTREAL — BMTC Group's revenue fell 10.9% in the first quarter as the retail environment became increasingly difficult in Quebec, partly because of a hike in its provincial sales tax at the beginning of the year.

Revenue of C$163.2 million was down from the C$183.1 million recorded for the same period of 2010.

Net earnings were C$2.8 million or seven Canadian cents a share, compared with C$3.8 million or five cents per share - a drop of 28.5% on a per share basis.

"The weakness recorded at the end of 2010 intensified during the first quarter of 2011," Yves Des Groseillers, BMTC chairman, president and CEO, said in a statement to shareholders. "The tightening of credit as well as the increase of the Quebec sales tax did not favor domestic and household consumption during the first quarter of 2011. Some signs of improvement occurred during the month of April 2011."

The company said its method of costing the options offered to senior executives reduced first quarter earnings per share by six cents, compared to a decrease of nine cents for the corresponding 2010 period.

BMTC costs options as either an expense or revenue in its net earnings calculation. An increase in the company's share price incurs an expense, with a decrease incurs revenue.

During the first quarter, the company paid out a pre-tax amount of C$21.1 million as a cash award as the result of the exercise of one million options by undisclosed recipients.

Although it didn't affect earnings, the company also said it repurchased 944,600 of its Class A shares during the first quarter, Also, some 212,143 Class B multiple voting shares were converted to Class A.

Quebec's largest full-line furniture retailer, BMTC operated 32 stores under the Brault & Martineau and Ameublements Tanguay banners as of March 31.