IDG Indigo Books and Music Inc

TORONTO, June 1, 2021 /CNW/ - Indigo Books & Music Inc. (TSX: IDG), Canada's largest book and lifestyle retailer reported financial results for the 53-week period ended April 3, 2021 compared to the 52-week period ended March 28, 2020.

Indigo's exceptional online growth showed resilience against severe disruption from the COVID-19 global health crisis and is driving the Company's transformational strategy. Over 1 million new and existing customers embraced the Online channel in fiscal 2021, providing Indigo with a compelling market opportunity to strengthen its position beyond a COVID-19 recovery. Strength in the Company's core book business stabilized against macro-economic headwinds, while the successful launch of proprietary lifestyle brand OUI showcased customers' affinity for Indigo's evolving product lines and the success of assortment expansion as a growth lever for the business.

The impact on revenue from extensive COVID-19 related store closures was contained to a decline of 5.5% or $53.0 million on full-year results, with Indigo reporting revenue of $904.7 million compared to $957.7 million last year. Key markets like the Greater Toronto Area were impacted for around six months' time, including over the critical holiday period. Revenue was buoyed by remarkable online performance, the delivery of enhanced omnichannel capabilities and continued demand for core categories of reading, wellness, and at-home learning and entertainment, which partially offset the adverse COVID-19 impacts.  

Commenting on the results, CEO Heather Reisman said: "This sustained acceleration in e-commerce presents an extraordinary opportunity for Indigo. The new initiatives we are embarking on, from further assortment expansion to becoming a truly omni-channel retailer, strategically align the business to deliver profitable growth. With the welcome of our new President, Peter Ruis, these efforts strongly position us to build upon the hoped-for COVID-19 recovery in fiscal 2022."

Adjusted EBITDA for the year was a loss of $28.3 million compared to a loss of $7.3 million last year. This was driven by the top-line decline resulting from COVID-19 rolling store closures, pressure on margin stemming from the subsequent need to clear goods and elevated shipping costs during store closure periods, and other pandemic-related costs, partially offset by external COVID-19 labour and occupancy support.

Indigo reported a net loss of $57.9 million ($2.09 net loss per basic common share) compared to a net loss of $185.0 million ($6.72 net earnings per basic common share) last year. This improvement was a result of cycling over non-cash impairment losses and the non-cash deferred income tax expense associated with the write-down of the Company's deferred tax assets in the prior year.

Revenue for the fourth quarter was $199.0 million compared to revenue of $178.1 million for the same quarter last year, an increase of 11.7%. The Online channel more than doubled, offsetting the adverse impact of lengthy COVID-19 store closures in the fourth quarter of fiscal 2021. Net loss for the fourth quarter was $39.5 million compared to a net loss of $171.3 million last year, an improvement of $131.8 million as the Company cycles over impairment and deferred tax charges recorded in the prior year.

With no outstanding debt and a cash balance of $84.9 million, the Company continues to be well positioned to manage through these uncertain times.

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, June 2, 2021. The call can be accessed by dialing 647-427-7450 from within the Toronto area, or 1-888-231-8191 outside of Toronto. The seven-digit participant code is 1264749.             

A playback of the call will also be available by telephone until 11:59 p.m. (ET) on June 9, 2021. The call playback can be accessed after 12:00 p.m. (ET) on June 2, 2021, by dialing 416-849-0833 from within the Toronto area, or 1-855-859-2056 outside of Toronto. The seven-digit replay passcode number is 1264749. 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 23, 2020 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 the world's first Cultural Department Store – a physical and digital meeting place inspired by and filled with books, music, art, ideas, and beautifully designed lifestyle products. 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. Every year the Foundation provides grants to high-needs elementary schools so they can transform their libraries with the purchase of new books and educational resources. To date, the Foundation has committed over $32 million to more than 3,000 elementary schools, benefitting more than 1,000,000 students. Most recently in April 2020, 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.

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

SOURCE Indigo Books & Music Inc.