Third Quarter Highlights
- Revenue increased by
$32.4 million or 15.4% from$210.0 million in Q3 2019 to$242.4 million in Q3 202 - Same Store Sales ("SSS"1) increased by 14.5% in Q3 2020 from Q3 2019
- Triple-digit eCommerce revenue growth across all platforms (Sleep Country, Dormez-vous? and Endy), with 18.1% of total revenue generated through eCommerce in Q3 2020
- Gross profit margin increased by 0.6% from 34.1% in Q3 2019 to 34.7% in Q3 2020
- Operating EBITDA1 margin increased by 3.3% from 23.6% in Q3 2019 to 26.9% in Q3 2020
- Net income increased by
$10.7 million or 50.0% from$21.5 million in Q3 2019 to$32.2 million in Q3 2020 - Diluted EPS increased by
$0.30 or 52.6% from$0.57 in Q3 2019 to$0.87 in Q3 2020 - Adjusted Net Income1 increased by
$11.0 million or 49.2% from$22.4 million in Q3 2019 to$33.4 million in Q3 2020 - Diluted Adjusted EPS1 increased by
$0.30 or 50.0% from$0.60 in Q3 2019 to$0.90 in Q3 2020 - Ended Q3 2020 with a cash balance of
$54.8 million and an additional$144.2 million of liquidity available under the existing credit agreement - The Board approved and restored the Company's dividend, declaring a
$0.195 dividend per share on the Company's common shares, payable onNovember 30, 2020 to shareholders of record at the close of business onNovember 20, 2020 - Additionally, the Board approved the reinstatement of the following:
- The NCIB program which provides the Company the option to purchase common shares for cancellation
- All NEO's base salaries and the payment of all amounts previously deferred
- The Board's cash compensation and the payment of all amounts previously deferred
- Welcomed
Mandeep Chawla to the Board of Directors - Announced exclusive partnership with
Malouf , a premium sleep innovation brand - Subsequent to quarter end, announced exclusive partnership with Purple Innovation, a leader in comfort and creator of the renowned Purple® Mattress
CEO's Commentary and Outlook
"This period was the most successful third quarter in our history with record revenue, net income and EPS. These tremendous results are a direct outcome of our advanced omnichannel infrastructure and reaffirm that our strategy to best serve Canadians' sleep needs, across all channels, is powerfully resonating with consumers," said
"We have never felt more optimistic about the return from our ongoing investments in our digital platforms, highlighted by our explosive triple-digit eCommerce growth, while still delivering robust growth through our brick and mortar network. With 18.1% of the quarter's revenue driven through our digital platforms, it is clearer than ever that our seamless omnichannel experience is what Canadians want. In addition, we further strengthened our market presence through the expansion of our partnership strategy alongside premier international sleep brands like
Beyond our exceptional performance, the quarter also highlighted the trust Canadians place in us. Despite the uncertainty resulting from the pandemic, new and loyal customers continue to choose our family of brands as trusted destinations for superior experience, knowledgeable service and quality sleep solutions. Looking ahead, our omnichannel infrastructure, financial flexibility, stable supply chain and dedicated employees will enable us to continue executing our strategy with excellence and agility. We remain committed to expanding our market share, delivering profitable growth and building value for our customers, employees, communities and shareholders," concluded Friesema.
(C$ thousands unless otherwise stated; other than store and share data) | Q3 2020 | Q3 2019 | % Change |
Revenues | 15.4% | ||
SSS1 | 14.5% | 0.5% | |
Gross profit margin | 34.7% | 34.1% | |
Stores opened | 4 | 4 | |
Stores renovated/relocated | - | - | |
Operating EBITDA1 | 31.8% | ||
Operating EBITDA margin1 | 26.9% | 23.6% | |
Net Income | 50.0% | ||
Adjusted Net Income1 | 49.2% | ||
Earnings per share – Basic | 51.7% | ||
Adjusted Earnings Per Share – Basic1 | 51.7% | ||
Adjusted Earnings Per Share – Diluted1 | 50.0% |
1 See the Non-IFRS Measures section of this news release |
Summary of Third Quarter Financial Results
Revenues increased by
Gross profit increased by
Total General and Administrative ("G&A") expenses decreased by
Finance related expenses increased by
Operating EBITDA1 increased by
Net Income increased by
Summary of YTD 2020 Financial Results
The outbreak of the COVID-19 pandemic has had an adverse impact on the Company's operations and financial results for YTD 2020 compared to prior year.
Revenues decreased by
Gross profit decreased by
Total G&A expenses increased by
Finance related expenses increased by
Operating EBITDA1 increased by
Net income decreased by
Adjusted Net Income1 increased by
Conference Call
About Sleep Country
Sleep Country is
Non-IFRS Measures
This news release makes reference to certain measures that are not recognized under IFRS and do not have a standardized meaning prescribed by IFRS. They are therefore unlikely to be comparable to similar measures presented by other companies. These measures are provided as additional information to complement IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. The Company uses non-IFRS measures including "Same Store Sales" or "SSS", "Operating Days", "EBITDA", "Operating EBITDA", "Adjusted Net Income" and "Adjusted Earnings Per Share" to provide investors with supplemental measures of its operating performance and thus highlight trends in its business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. The Company's management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management compensation. For a reconciliation of these non IFRS measures refer to the Company's MD&A for Q3 2020 which is available on SEDAR at www.sedar.com.
Forward-Looking Information
Certain information in this news release contains forward-looking information and forward-looking statements which reflect the current view of management with respect to the Company's objectives, plans, goals, strategies, outlook, results of operations, financial and operating performance, prospects and opportunities. Wherever used, the words "may", "will", "anticipate", "intend", "estimate", "expect", "plan", "believe" and similar expressions identify forward-looking information and forward-looking statements. Forward-looking information and forward-looking statements should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved. All of the information in this news release containing forward-looking information or forward-looking statements is qualified by these cautionary statements.
Forward-looking information and forward-looking statements are based on information available to management at the time they are made, underlying estimates, opinions and assumptions made by management and management's current good faith belief with respect to future strategies, prospects, events, performance and results, and are subject to inherent risks and uncertainties surrounding future expectations generally. Such risks and uncertainties include, but are not limited to, those described in the Company's 2019 annual information form (the "AIF") filed on
Readers are urged to consider the risks, uncertainties, and assumptions carefully in evaluating the forward-looking information and forward-looking statements and are cautioned not to place undue reliance on such information and statements. The Company does not undertake to update any such forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
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