TORONTO, Aug. 8, 2017 /CNW/ - For the first quarter ended July 1, 2017, Indigo Books & Music Inc. (TSX: IDG), Canada's largest book, gift and specialty toy retailer, delivered a 15^th straight quarter of topline comparable growth to achieve its highest ever first-quarter revenue and positive adjusted EBITDA.

Revenue for the quarter increased $13.2 million or 6.8% from last year to reach $206.3 million. Total comparable sales, which includes both online sales and comparable store sales, increased by 5.0%. Revenue growth was strong in retail operations and continued to surpass expectations online.  This performance was driven by continued double digit growth in the general merchandise business, with exceptional growth in the Lifestyle, Paper and Toy categories.  The core trade book business remains healthy, showing growth over last year despite no blockbuster title launches this quarter.

Adjusted EBITDA for the quarter increased by $6.2M to turn slightly positive, an impressive performance in a traditionally challenging quarter and the result of margin improvement, higher gift card breakage and lower operating and home office costs, as a percentage of sales.

Commenting on the results, CEO Heather Reisman said, "Our outstanding first quarter performance, with strong growth across channels and categories, as well as greatly improved profitability, is a clear reflection of our customers' passion for our brand and the strong engagement of our employees.  We are thrilled with our results and energized to keep up the momentum to continue delivering the best customer experience in the market."

After the launch of its new Sherway Gardens store in Toronto last year, the Company continued to roll out its new store concept in Oshawa and Ancaster during this quarter. These newly renovated stores, which reflect Indigo's transformation from a bookstore to a cultural department store for booklovers, are all a great success, showing strong revenue growth and improved retail performance metrics. On the basis of these compelling results, the Company will continue to roll out this concept to more stores in the coming quarters.  

Net loss for the first quarter was $5.3 million (net loss per common share of $0.20) improved from a net loss of $9.0 million (net loss per common share of $0.34) last year.

The Company ended the period with cash and short-term investment balance of $196.7 million, up $20 million from last year, and no debt, which demonstrates its very solid financial position.

In May 2017, the Indigo Love of Reading Foundation granted an additional $1.5 million to 30 high-need elementary schools across Canada, bringing the total committed by the Foundation, since its inception in 2004, to $25 million.  By helping to bring more books to kids and improving literacy, the Foundation is making a tremendous impact on the lives of young Canadians across the country.

Analyst/Investor Call

Indigo will host a conference call for analysts and investors to review these results at 10:00 a.m. (Eastern Time) tomorrow, August 9th, 2017. The call can be accessed by dialing 416-764-8688 from within the Toronto area, or 1-888-390-0546 outside of Toronto. The eight digit participant code is 33541518.

A playback of the call will also be available by telephone until 11:59 p.m. (ET) on Wednesday, August 16^th, 2017. The call playback can be accessed after 12:00 p.m. (ET) on Wednesday, August 9^th, 2017, 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 541518#. 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 statements which involve risk and uncertainties that could cause results to differ materially from those expressed in the forward-looking statements. Among the key factors that could cause such differences are: general economic, market or business conditions in Canada; competitive actions by other companies; changes in laws or regulations; and other factors, many of which are beyond the control of the Company.

Non-IFRS Financial Measures

The Company prepares its unaudited interim condensed consolidated financial statements in accordance with International Financial Reporting Standards and International Accounting Standards 34, "Interim Financial Reporting."  In order to provide additional insight into the business, the Company has also provided non-IFRS data, including total comparable sales, in the press release above. This measure does not have a standardized meaning prescribed by IFRS and is therefore specific to Indigo and may not be comparable to similar measures presented by other companies. Total comparable sales and adjusted EBITDA are key indicators used by the Company to measure performance against internal targets and prior period results. This measure is commonly used by financial analysts and investors to compare Indigo to other retailers.

Total comparable sales is based on comparable retail store sales and includes online sales for the same period. Comparable retail store sales are defined as sales generated by stores that have been open for more than 52-weeks. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, impairment, asset disposals, and equity investments. The method of calculating adjusted EBITDA is consistent with that used in prior periods.

About Indigo Books & Music Inc.

Indigo is a publicly traded Canadian company listed on the Toronto Stock Exchange (IDG). As the largest book, gift and specialty toy retailer in Canada, Indigo operates in all provinces under different banners including Indigo Books & Music; Indigo Books, Gifts, Kids; Indigospirit; Chapters; and Coles. The online channel, indigo.ca, offers a one-stop online shop with a robust selection of books, toys, home décor, stationery, and gifts.

Indigo founded the Indigo Love of Reading Foundation in 2004 to address the underfunding of public elementary school libraries.  Every year the Love of Reading Foundation makes grants to high-needs elementary schools so they can transform their libraries with the purchase of new books and educational resources. To date, the Love of Reading Foundation has committed over $25 million to 3,000 elementary schools, benefitting more than 900,000 students.

To learn more about Indigo, please visit the Our Company section at indigo.ca.

Non-IFRS Financial Measures

The following table reconciles Adjusted EBITDA to Net loss, the most comparable IFRS measure.

The following table reconciles total comparable sales to revenue, the most comparable IFRS measure.

SOURCE Indigo Books & Music Inc.

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