Form 6-K BIRKS GROUP INC. For: Jun 21
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 or 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of June, 2021
Commission file number: 001-32635
BIRKS GROUP INC.
(Translation of Registrants name into English)
2020 Robert Bourassa
Suite 200
Montreal, Québec
Canada
H3A 2A5
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
☒ Form 20-F ☐ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrants home country), or under the rules of the home country exchange on which the registrants securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrants security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
CONTENTS
The following document of the Registrant is submitted herewith:
99.1 | Press release dated June 17, 2021 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BIRKS GROUP INC. | ||||||
(Registrant) | ||||||
By: | /s/ Katia Fontana | |||||
Katia Fontana | ||||||
Date: June 21, 2021 | Vice President, Chief Financial Officer |
Exhibit 99.1
Company Contacts:
Katia Fontana
Vice President and Chief Financial
Officer
(514) 397-2592
For all press and media inquiries,
please contact:
OverCat Communications
Audrey Hyams Romoff, [email protected],
(647) 223-9970
Gillian DiCesare, [email protected],
(647) 223-5590
Chelsea Brooks, [email protected],
(289) 221-6006
BIRKS GROUP REPORTS ITS FISCAL 2021 RESULTS
Montreal, Quebec. June 17, 2021 - Birks Group Inc. (the Company or Birks Group) (NYSE American: BGI), today reported its financial results for the fiscal year ended March 27, 2021.
Highlights
All figures presented herein are in Canadian dollars.
The Companys financial results for the fiscal year ended March 27, 2021 were significantly impacted by the COVID-19 pandemic, most notably by the temporary closure of certain of the Companys stores at intermittent periods during fiscal 2021 as a consequence of the restrictions imposed by provincial governmental authorities.
During the fiscal year ended March 27, 2021, or fiscal 2021, the Company achieved net sales of $143.1 million, a decrease of $26.3 million, or 15.5%, from the fiscal year ended March 28, 2020, or fiscal 2020, yielding gross profit of $56.4 million, a decrease of $8.1 million, or 12.6%, compared to fiscal 2020, as a direct result of the negative impacts of COVID-19.
Gross profit as a percentage of sales was 39.4%, an increase of 130 basis points from the gross profit as a percentage of sales of 38.1% in fiscal 2020. Despite the decline in sales and gross profit volumes, the Company was able, through its proactive management of the impact of the
pandemic, to control costs. Total operating expenses were $59.2 million in the fiscal year ended March 27, 2021, representing a decrease of $11.8 million, or 16.6%, as compared to fiscal 2020. The Companys fiscal 2021 EBITDA(1) was $2.6 million, an increase of $4.3 million compared to EBITDA(1) of negative $1.7 million for fiscal 2020.
As of June 17, 2021, 20 of the Companys 29 stores are open, albeit at reduced operating hours. The remaining nine stores, all located in Ontario, are expected to remain closed for in-person shopping in accordance with the Ontario governments orders until at least July 6, 2021.
Mr. Jean-Christophe Bédos, President and Chief Executive Officer of Birks Group, commented: I am very proud of how we have navigated through the challenges brought about by COVID-19 during the past fiscal year and I believe that our results reflect the agility, hard work and adaptability of our employees as we ended the year stronger than we started. In response to the pandemic, our teams reacted very quickly to ensure that we continuously met the evolving needs of our customers throughout these unprecedented times, including the improvement of our omni-channel offering which was reflected in the 201% increase in our e-commerce sales during fiscal 2021.
Mr. Bédos further commented: Thanks to our disciplined approach at managing liquidity, our focus on cost containment and our emphasis on generating revenues from our retail network while open under strict health and safety protocols, our concierge service, and our e-commerce business, as well as the continued support from our key stakeholders and partners, we have been able to achieve improved results in fiscal 2021 as compared to last year. Looking forward, I believe that the actions we have taken since the start of the pandemic and our lessons learned have placed the Company in a stronger position in terms of customer focus and dedication, innovation, and productivity which we can leverage to fuel long-term growth.
Financial overview for the fiscal 2021:
| Net sales were $143.1 million for fiscal 2021, a decrease of $26.3 million, or 15.5% compared to net sales of $169.4 million in fiscal 2020. The decrease in net sales in fiscal 2021 was primarily attributable to the effects of COVID-19, and the resulting temporary closures of all stores across the retail channel, which were in effect throughout the first quarter of fiscal 2021 and the temporary closures of certain stores (in Ontario, Québec and Manitoba) at intermittent periods throughout the fiscal year including during the third and fourth quarters of fiscal 2021. The overall decrease was partially offset by strong e-commerce sales, growing by 201% and representing approximately 4.9% of total net sales, as compared to approximately 1.4% in fiscal 2020. |
| Comparable store sales decreased by 14.3% compared to fiscal 2020 driven primarily by the temporary store closures in fiscal 2021 due to the COVID-19 pandemic. |
| Gross profit was $56.4 million, or 39.4% of net sales, for fiscal 2021 compared to $64.5 million, or 38.1% of net sales, for fiscal 2020. This decrease was primarily due to the reduction of sales volume caused by COVID-19, partially offset by an improvement of gross margin of 130 basis points. The increase of 130 basis points in gross margin percentage was mainly attributable to the Companys strategic focus on reducing sales |
promotions and discounting, and foreign currency gains due to the strengthened Canadian dollar, partially offset by a shift in product sales mix towards branded timepieces. |
| SG&A expenses were $53.7 million, or 37.5% of net sales, in fiscal 2021 compared to $65.9 million, or 38.9% of net sales, in fiscal 2020. SG&A expenses in fiscal 2021 decreased by $12.2 million versus SG&A expenses in fiscal 2020. This decrease was driven primarily by the effects of COVID-19 and various cost containment initiatives undertaken by management including lower occupancy costs ($3.5 million) driven by the negotiation of rent abatements with the Companys landlords, lower compensation costs ($6.5 million) driven by the impact of temporary lay-offs, reduced operating hours at retail locations, lower sales commissions due to the decrease in net sales, and temporary wage reductions at the corporate head office, wage subsidies ($1.4 million) and rent subsidies ($0.5 million), lower credit cards fees ($0.7 million) due to lower sales volume, lower marketing costs ($1.0 million) and lower general operating costs ($2.5 million) driven by cost containment measures. These year-over-year reductions in SG&A expenses were partially offset by the impact of the revaluation of certain deferred stock units, restricted stock units and share appreciation rights which increased the Companys non-cash stock based compensation expense ($3.6 million) during the year due to the fluctuations in the Companys stock price during the fiscal year. As a percentage of sales, SG&A expenses in fiscal 2021 have decreased by 140 basis points as compared to fiscal 2020. |
| The Companys fiscal 2021 EBITDA(1) was $2.6 million, an increase of $4.3 million compared to EBITDA(1) of negative $1.7 million for fiscal 2020. Adjusted EBITDA(1) for fiscal 2021 was $2.6 million, an increase of $4.0 million compared to adjusted EBITDA(1) of negative $1.4 million for fiscal 2020. |
| The Companys fiscal 2021 reported operating loss from continuing operations was $2.8 million, an improvement of $3.7 million compared to a reported operating loss from continuing operations of $6.5 million for fiscal 2020. Adjusted operating loss(1) from continuing operations was $2.8 million, a decrease of $3.4 million compared to an adjusted operating loss(1) from continuing operations of $6.2 million in fiscal 2020. |
| The Company recognized a net loss for fiscal 2021 of $5.8 million, or $0.32 per share, all of which was comprised of a net loss from continuing operations, compared to a net loss for fiscal 2020 of $12.8 million, or $0.71 per share, comprised of a net loss from continuing operations of $12.2 million or $0.68 per share, and a net loss from discontinued operations of $0.6 million, or $0.03 per share. |
(1) | This is a non-GAAP financial measure defined below under Non-GAAP Measures and accompanied by a reconciliation to the most directly comparable GAAP financial measure. |
About Birks Group Inc.
Birks Group is a leading designer of fine jewellery, timepieces and gifts and operator of luxury jewellery stores in Canada. As of June 17, 2021, the Company operates twenty-six stores under the Maison Birks brand in most major metropolitan markets in Canada, one retail location in Calgary under the Brinkhaus brand, one retail location in Vancouver operated under the Graff brand and one retail location in Vancouver under the Patek Philippe brand. Bijoux Birks fine jewellery collections are also available through Mappin & Webb and Goldsmiths locations in the United Kingdom in addition to several jewellery retailers across North America, including Mayors Jewelers, as well as select SAKS Fifth Avenue locations. Birks was founded in 1879 and has become Canadas premier retailer and designer of fine jewellery, timepieces and gifts. Additional information can be found on Birks web site, www.birks.com.
NON-GAAP MEASURES
The Company reports financial information in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP). The Companys performance is monitored and evaluated using various sales and earnings measures that are adjusted to include or exclude amounts from the most directly comparable GAAP measure (non-GAAP measures). The Company presents such non-GAAP measures in reporting its financial results to investors and other external stakeholders to provide them with useful complimentary information which will allow them to evaluate the Companys operating results using the same financial measures and metrics used by the Company in evaluating performance. The Company does not, nor does it suggest that investors and other external stakeholders should, consider non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. These non-GAAP measures may not be comparable to similarly-titled measures presented by other companies. In addition to our results determined in accordance with U.S. GAAP, we use non-GAAP measures including: EBITDA, adjusted operating expenses, adjusted operating loss and adjusted EBITDA.
EBITDA
EBITDA is defined as net income (loss) from continuing operations before interest expense and other financing costs, income taxes expense (recovery) and depreciation and amortization.
Adjusted operating expenses, adjusted operating loss & adjusted EBITDA
The Company evaluates its operating earnings performance using financial measures which exclude expenses associated with operational restructuring plans and impairment losses. The Company believes that such measures provide useful supplemental information with which to assess the Companys results relative to the corresponding period in the prior year and can result in a more meaningful comparison of the Companys performance between the periods presented. The table below provides a reconciliation of the non-GAAP measures presented to the most directly comparable financial measures calculated with GAAP.
Total Adjusted Operating Expenses |
||||||||||||
For the fiscal year ended | ||||||||||||
($000s) |
March 27, 2021 | March 28, 2020 | March 30, 2019 | |||||||||
Total operating expenses (GAAP measure) |
59,171 | 71,021 | 72,193 | |||||||||
as a % of net sales |
41.4 | % | 41.9 | % | 47.8 | % | ||||||
Remove the impact of: |
||||||||||||
Restructuring costs (a) |
| | (1,182 | ) | ||||||||
Impairment of long-lived assets (b) |
| (309 | ) | (46 | ) | |||||||
|
|
|
|
|
|
|||||||
Total adjusted operating expenses (non-GAAP measure) |
$ | 59,171 | $ | 70,712 | $ | 70,965 | ||||||
|
|
|
|
|
|
|||||||
as a % of net sales |
41.4 | % | 41.7 | % | 47.0 | % |
Adjusted operating income (loss) |
||||||||||||
For the fiscal year ended | ||||||||||||
($000s) |
March 27, 2021 | March 28, 2020 | March 30, 2019 | |||||||||
Operating income (loss) (GAAP measure) |
(2,821 | ) | (6,544 | ) | (13,616 | ) | ||||||
as a % of net sales |
-2.0 | % | -3.9 | % | -9.0 | % | ||||||
Add the impact of: |
||||||||||||
Restructuring costs (a) |
| | 1,182 | |||||||||
Impairment of long-lived assets (b) |
| 309 | 46 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted operating income (loss) (non-GAAP measure) |
$ | (2,821 | ) | $ | (6,235 | ) | $ | (12,388 | ) | |||
|
|
|
|
|
|
|||||||
as a % of net sales |
-2.0 | % | -3.7 | % | -8.2 | % |
EBITDA & Adjusted EBITDA |
||||||||||||
For the fiscal year ended | ||||||||||||
($000s) |
March 27, 2021 | March 28, 2020 | March 30, 2019 | |||||||||
Net income (loss) from continuing operations (GAAP measure) |
(5,838 | ) | (12,227 | ) | (18,305 | ) | ||||||
as a % of net sales |
-4.1 | % | -7.2 | % | -12.1 | % | ||||||
Add the impact of: |
||||||||||||
Interest expense and other financing costs |
3,017 | 5,683 | 4,689 | |||||||||
Income taxes expense (recovery) |
| | | |||||||||
Depreciation and amortization |
5,458 | 4,845 | 3,859 | |||||||||
|
|
|
|
|
|
|||||||
EBITDA (non-GAAP measure) |
$ | 2,637 | $ | (1,699 | ) | $ | (9,757 | ) | ||||
|
|
|
|
|
|
|||||||
as a % of net sales |
1.8 | % | -1.0 | % | -6.5 | % | ||||||
Add the impact of: |
||||||||||||
Restructuring costs (a) |
| | 1,182 | |||||||||
Impairment of long-lived assets (b) |
| 309 | 45 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA (non-GAAP measure) |
$ | 2,637 | $ | (1,390 | ) | $ | (8,530 | ) | ||||
|
|
|
|
|
|
|||||||
as a % of net sales |
1.8 | % | -0.8 | % | -5.6 | % |
(a) | Expenses associated with the Companys operational restructuring plan |
(b) | Non-cash impairment of long-lived assets in fiscal 2020 related to leasehold improvements that are associated to store leases that have a possibility of early lease termination. Non-cash impairment of long-lived assets in fiscal 2019 relate to leasehold improvements that are associated with a retail location due to the projected operating performance of the location. |
Forward Looking Statements
This press release contains forward- looking statements which can be identified by their use of words like plans, expects, believes, will, anticipates, intends, projects, estimates, could, would, may, planned, goal, and other words of similar meaning. All statements that address expectations, possibilities or projections about the future, including without limitation, statements about the lessons learned from the pandemic and the Companys position going forward with respect to customer focus and dedication, innovation, and productivity, our strategies for growth, expansion plans, sources or adequacy of capital, expenditures and financial results are forward-looking statements.
Because such statements include various risks and uncertainties, actual results might differ materially from those projected in the forward- looking statements and no assurance can be given that the Company will meet the results projected in the forward-looking statements.
These risks and uncertainties include, but are not limited to the following: (i) the magnitude and length of economic disruption as a result of the worldwide novel coronavirus (COVID-19) outbreak, including its impact on macroeconomic conditions, generally, as well as its impact on the results of operations and financial condition of the Company and the trading price of its shares; (ii) a decline in consumer spending or deterioration in consumer financial position; (iii) economic, political and market conditions, including the economies of Canada and the U.S., which could adversely affect the Companys business, operating results or financial condition, including its revenue and profitability, through the impact of changes in the real estate markets, changes in the equity markets and decreases in consumer confidence and the related changes in consumer spending patterns, the impact on store traffic, tourism and sales; (iv) the impact of fluctuations in foreign exchange rates, increases in commodity prices and borrowing costs and their related impact on the Companys costs and expenses; (v) the Companys ability to maintain and obtain sufficient sources of liquidity to fund its operations, to achieve planned sales, gross margin and net income, to keep costs low, to implement its business strategy, maintain relationships with its primary vendors, to mitigate fluctuations in the availability and prices of the Companys merchandise, to compete with other jewelers, to succeed in its marketing initiatives, and to have a successful customer service program; (vi) the Companys ability to execute its strategic vision; (vii) the Companys completion of the filing requirements for the Canada Emergency Rent Subsidy; and (viii) the Companys ability to invest in and finance capital expenditures.
Information concerning factors that could cause actual results to differ materially is set forth under the captions Risk Factors and Operating and Financial Review and Prospects and elsewhere in the Companys Annual Report on Form 20-F filed with the Securities and Exchange Commission on June 17, 2021 and subsequent filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this statement or to reflect the occurrence of unanticipated events, except as required by law.
BIRKS GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - AUDITED
Fiscal Year Ended | ||||||||||||
March 27, 2021 | March 28, 2020 | March 30, 2019 | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Net sales |
$ | 143,068 | $ | 169,420 | $ | 151,049 | ||||||
Cost of sales |
86,718 | 104,943 | 92,472 | |||||||||
|
|
|
|
|
|
|||||||
Gross profit |
56,350 | 64,477 | 58,577 | |||||||||
Selling, general and administrative expenses |
53,713 | 65,867 | 67,106 | |||||||||
Restructuring charges |
| | 1,182 | |||||||||
Depreciation and amortization |
5,458 | 4,845 | 3,859 | |||||||||
Impairment of long-lived assets |
| 309 | 46 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
59,171 | 71,021 | 72,193 | |||||||||
|
|
|
|
|
|
|||||||
Operating loss |
(2,821 | ) | (6,544 | ) | (13,616 | ) | ||||||
Interest and other financial costs |
3,017 | 5,683 | 4,689 | |||||||||
|
|
|
|
|
|
|||||||
Loss from continuing operations |
(5,838 | ) | (12,227 | ) | (18,305 | ) | ||||||
Income taxes (benefits) |
| | | |||||||||
|
|
|
|
|
|
|||||||
Loss from continuing operations |
(5,838 | ) | (12,227 | ) | (18,305 | ) | ||||||
Discontinued operations: |
||||||||||||
Loss income from discontinued operations, net of tax |
| (552 | ) | (381 | ) | |||||||
Gain on disposal of discontinued operations |
| | | |||||||||
|
|
|
|
|
|
|||||||
Net (loss) income from discontinued operations, net of tax |
| (552 | ) | (381 | ) | |||||||
|
|
|
|
|
|
|||||||
Net (loss) income |
$ | (5,838 | ) | $ | (12,779 | ) | $ | (18,686 | ) | |||
|
|
|
|
|
|
|||||||
Weighted average common shares outstanding: |
||||||||||||
Basic |
18,005 | 17,968 | 17,961 | |||||||||
Diluted |
18,005 | 17,968 | 17,961 | |||||||||
Net (loss) income per common share: |
||||||||||||
Basic |
$ | (0.32 | ) | $ | (0.71 | ) | $ | (1.04 | ) | |||
Diluted |
(0.32 | ) | (0.71 | ) | (1.04 | ) | ||||||
Net (loss) income from continuing operations per common share: |
||||||||||||
Basic |
$ | (0.32 | ) | $ | (0.68 | ) | $ | (1.02 | ) | |||
Diluted |
(0.32 | ) | (0.68 | ) | (1.02 | ) |
BIRKS GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS AUDITED
As of | ||||||||
March 27, 2021 | March 28, 2020 | |||||||
(In thousands) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 1,807 | $ | 565 | ||||
Accounts receivable and other receivables |
7,307 | 6,019 | ||||||
Inventories |
97,789 | 101,899 | ||||||
Prepaids and other current assets |
2,044 | 2,007 | ||||||
|
|
|
|
|||||
Total current assets |
108,947 | 110,490 | ||||||
Long-term receivables |
5,673 | 4,538 | ||||||
Property and equipment |
24,496 | 26,613 | ||||||
Operating lease right-of-use asset |
57,670 | 64,069 | ||||||
Intangible assets and other assets |
4,894 | 4,942 | ||||||
|
|
|
|
|||||
Total non-current assets |
92,733 | 100,162 | ||||||
|
|
|
|
|||||
Total assets |
$ | 201,680 | $ | 210,652 | ||||
|
|
|
|
|||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities: |
||||||||
Bank indebtedness |
$ | 53,387 | $ | 58,035 | ||||
Accounts payable |
37,975 | 48,183 | ||||||
Accrued liabilities |
11,209 | 4,661 | ||||||
Current portion of long-term debt |
2,960 | 64 | ||||||
Current portion of operating lease liabilities |
6,298 | 5,823 | ||||||
|
|
|
|
|||||
Total current liabilities |
111,829 | 116,766 | ||||||
Long-term debt |
23,062 | 16,217 | ||||||
Long-term portion of operating lease liabilities |
66,713 | 72,636 | ||||||
Other long-term liabilities |
1,498 | 1,623 | ||||||
|
|
|
|
|||||
Total long-term liabilities |
91,273 | 90,476 | ||||||
Stockholders equity (deficiency): |
||||||||
Class A common stock no par value, unlimited shares authorized, issued and outstanding 10,610,973 (10,252,911 as of March 28, 2020) |
37,361 | 35,613 | ||||||
Class B common stock no par value, unlimited shares authorized, issued and outstanding 7,717,970 |
57,755 | 57,755 | ||||||
Preferred stock no par value, unlimited shares authorized, none issued |
| | ||||||
Additional paid-in capital |
18,259 | 19,131 | ||||||
Accumulated deficit |
(114,700 | ) | (108,862 | ) | ||||
Accumulated other comprehensive loss |
(97 | ) | (227 | ) | ||||
|
|
|
|
|||||
Total stockholders equity (deficiency) |
(1,422 | ) | 3,410 | |||||
|
|
|
|
|||||
Total liabilities and stockholders equity |
$ | 201,680 | $ | 210,652 | ||||
|
|
|
|
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