New Look Vision Group reported financial results for
the 13 and 26 week periods ended June 27, 2020 (“Q2 2020”) and provided updates
on actions in response to COVID-19, store re-openings, and new financing
arrangements.
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.
• 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.
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.
• 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 decreased to ($8.3) million, a decrease of $19.6 million, as compared to last year. Adjusted net (loss)/earnings attributed to shareholders 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
New Look Vision has and continues to respond swiftly to the crisis along
three principles: participation, protection and responsibility.
1. Participation in stemming the pandemic spread by closing a large number of locations early on (stores, offices, factories and distribution centers).
2. 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.
3. 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 25th 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. New Look Vision continues to diligently
control its cost structure while actively monitoring market conditions.
Antoine Amiel, the President and CEO of New Look Vision, stated that: “The
second quarter started after most of the Company’s retail stores stopped
operating mid-March. Gradual reopening started mid-May and was completed by
June 21st when the last
local retail operation restrictions were lifted. In March, the Company
implemented a high impact cash conservation plan which yielded minimum cash
burn throughout the 90+ day physical retail shutdown. This, in addition to
revenues generated online, is reflected in the strong cash position at quarter’s
end, given the circumstances. Retail operations re-started in each market as
soon as local regulatory restrictions allowed and under all-encompassing safety-first
internal protocols. Trade has been brisk since the re-start. Strengthened by
its resilience, financial and organizational strengths throughout the COVID-19
disruption, the Company has resumed its profitable growth journey, organic and
external. I am, more than ever, in awe of the New Look Vision Group people’s fortitude
through the ordeal and dedication to eyecare and eyewear since the re-start.
They deserve the highest praise and deepest gratitude.”
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