IDG Indigo Books and Music Inc

Indigo delivers strong omnichannel sales meaningfully beating last year and pre-COVID 2^nd quarter results

TORONTO, Nov. 9, 2021 /CNW/ - Indigo Books & Music Inc. (TSX: IDG), Canada's largest book and lifestyle retailer reported financial results for the 13-week period ended October 2, 2021 compared to the 13-week period ended September 26, 2020.

Revenue for the quarter increased 16% to $238.8 million from $205.3 million, exceeding both last year and pre-pandemic levels. It is worth noting that these results were achieved notwithstanding occupancy constraints in several key jurisdictions and footfall meaningfully below pre-pandemic levels in the central cores of most major cities.

The revenue improvements were delivered by a strengthened omnichannel business, with the online channel delivering 85% growth over the same quarter in fiscal 2020.  Retail does remain traffic-challenged but customers who came to shop demonstrated a strong commitment to books and a continuing positive response to our lifestyle offering. The Company's proprietary brands OUI (home) and Nóta (paper) delivered well above expectations.  These brands are a key pillar in our efforts to drive profitable growth.

Commenting on the results, CEO Heather Reisman said: "Our customers are clearly demonstrating a positive response to all aspects of our omnichannel approach delivering the second quarter revenues well above pre-pandemic levels." 

Adjusted EBITDA for the quarter was $10.6 million compared to a loss of $11.3 million for the same period last year, an improvement of $21.9 million. It should be noted that these results were achieved with lower external COVID-19 labour support for home office and field leadership, and a corresponding increase in retail operating expenses, off-set by a one-time payment of $17.0 million, resulting from the renegotiation of the Company's partnership with Starbucks. Moving forward, thirty-six cafés will continue to operate as Starbucks within Indigo stores, while the remaining cafés, which have been closed throughout the course of the COVID-19 pandemic, will be reimagined under the evolving Indigo brand retail experience.

Indigo reported net earnings of $3.5 million ($0.13 net earnings per basic common share) compared to a net loss of $17.5 million ($0.63 net loss per basic common share) last year, for the reasons discussed.

The Company is pleased to announce the following organizational changes. This quarter, the Company appointed Katharine Poulter as Chief Commercial Officer and Martin Thibodeau as Chief Technology and Information Officer. Each bring and will contribute a wealth of experience to their respective areas.  The Company is also pleased to announce the promotion of Andrea Limbardi to Chief Digital Officer.

With no outstanding debt, an undrawn $25.0 million revolving credit facility, and a cash balance of $71.9 million, the Company continues to be well positioned to manage through any further uncertainty stemming from COVID-19.

Analyst/Investor Call 
Indigo will host a conference call for analysts and investors to review these results at 9:00 a.m. (Eastern Time) tomorrow, November 10^th, 2021. The call can be accessed by dialing 416-764-8659 from within the Toronto area, or 1-888-664-6392 outside of Toronto. The eight-digit participant code is 23999151.          

A playback of the call will also be available by telephone until 11:59 p.m. (ET) on November 17^th, 2021. The call playback can be accessed after 12:00 p.m. (ET) on November 10^th, 2021, by dialing 416-764-8677 from within the Toronto area, or 1-888-390-0541 outside of Toronto. The six-digit replay passcode number is 999151. The conference call transcript will be archived in the Investor Relations section of the Indigo website, www.indigo.ca. 

Forward-Looking Statements 
Statements contained in this news release that are not historical facts are "forward-looking information" within the meaning of applicable Canadian securities legislation. To the extent any forward-looking information constitutes "financial outlooks" within the meaning of applicable Canadian securities laws, such information is being provided as preliminary financial and operational results. Financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to various risks and uncertainties that could cause actual results to differ materially from those expressed in or implied in this news release. Among the key factors that could cause such differences are: general economic, market or business conditions; the future impacts and government response to the COVID-19 pandemic, including any impact to online and/or retail operations of the Company; competitive actions by other companies; changes in laws or regulations; and other factors, many of which are beyond the control of the Company, as set out in the Company's annual information form dated June 1, 2021 and available on the Company's issuer profile on SEDAR at www.sedar.com.

Undue reliance should not be placed on such forward-looking information and no assurance can be given that such events will occur in the disclosed time frames or at all. Any forward-looking information included in this news release is made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.

Non-IFRS Financial Measures 
The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS"). In order to provide additional insight into the business, the Company has also provided non-IFRS data, specifically adjusted EBITDA, in this press release. These measures do not have standardized meanings prescribed by IFRS and are therefore specific to Indigo and may not be comparable to similar measures presented by other companies. 

For additional context see "Results of Operations" and "Non-IFRS Financial Measures" in the Management's Discussion and Analysis (which can be found at www.indigo.ca/investor-relations or www.sedar.com).

About Indigo Books & Music Inc. 
Indigo is a publicly traded Canadian company listed on the Toronto Stock Exchange (IDG). Indigo is Canada's leading book and lifestyle retailer, offering a curated assortment of books, gifts, baby, kids, wellness and lifestyle products, that support their customers every day and at key life stages by simplifying their journey to live with intention. Indigo believes in real books, in living life fully and generously, in being kind to each other and that stories – big and little – connect us.

Indigo founded the Indigo Love of Reading Foundation in 2004 to address the underfunding of public elementary school libraries and the literacy challenges faced by children in high-needs communities across Canada. The Foundation provides grants to high-needs elementary schools so they can transform their libraries with the purchase of new books and educational resources. Most recently, in the wake of the COVID-19 pandemic and unprecedented nation-wide school closures, the Foundation committed $1.0 million to provide books to families in need. With the support of the Company, its customers, employees, and suppliers, the Foundation has committed over $33 million to more than 3,000 high-needs elementary schools across Canada since 2004.

SOURCE Indigo Books & Music Inc.