Form 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 December, 2006

Commission file number: 001-32635

 


BIRKS & MAYORS INC.

(Exact name of Registrant as specified in its charter)

 


Not Applicable

(Translation of Registrant’s name into English)

Canada

(Jurisdiction of incorporation or organization)

1240 Phillips Square

Montreal Québec

Canada

H3B 3H4

(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.

x  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 registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s 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 registrant’s 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.

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

¨  Yes            x  No

If “Yes” is marked, indicated below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-            

 



CONTENTS

The following document of the Registrant is submitted herewith:

 

99.1    Press release dated December 4, 2006.

 

2


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 & MAYORS INC.
  (Registrant)
  By:  

/s/ Michael Rabinovitch

    Michael Rabinovitch
Date: December 4, 2006     Senior Vice President and Chief Financial Officer

 

3


EXHIBIT INDEX

 

Exhibit

Number

 

Description

Exhibit 99.1   Press release dated December 4, 2006.

 

4


EXHIBIT 99.1

 

    Company Contact:
    Michael Rabinovitch
    SVP & Chief Financial Officer
    (954) 590-9000
    Investor Contact:
    Integrated Corporate Relations
    Jean Fontana / Allison Malkin
    (203) 682-8272 / (203) 682-8225

BIRKS & MAYORS REPORTS IMPROVED SECOND QUARTER FISCAL 2007 RESULTS

Montreal, Quebec. December 4, 2006 /BUSINESS WIRE/ — Birks & Mayors Inc. (the “Company” or “Birks & Mayors”) (AMEX:BMJ), which operates 68 luxury jewelry stores across Canada, Florida and Georgia, reported results for the thirteen weeks ended September 30, 2006 (“Second Quarter”). The Company noted that its current fiscal year, ending March 31, 2007 (“Fiscal 2007”) represents a 53-week period and compares to a 52-week period in Fiscal 2006. As a result, the first six months of Fiscal 2007 include 27 weeks versus the first six months of Fiscal 2006 that included 26 weeks.

For the Second Quarter of Fiscal 2007:

 

    Net sales increased 4.8% to $54.5 million, from $52.0 million in the prior year period;

 

    Comparable store sales increased 2%, as compared to a 14% increase in the prior year period;

 

    Gross margin rose 250 basis points to 48.4% of net sales;

 

    EBITDA increased 107% to $779,000;

 

    Net loss was $3.6 million, or $0.32 per diluted share, as compared to a net loss of $2.9 million, or $0.40 per diluted share in the prior year period; and

 

  Adjusted net loss excluding certain costs was $3.2 million, or $0.28 per diluted share, as compared to adjusted net loss of $3.6 million, or $0.49 per diluted share in the prior year period. (See Table 1 for a reconciliation of adjusted net loss to net loss for the Second Quarter.)

Thomas A. Andruskevich, President and Chief Executive Officer said, “We advanced our key initiatives, which generated improved second quarter results for Birks & Mayors. Sales were consistent with our expectations for a low single digit comparable stores sales increase. We successfully increased our penetration of distinctive jewelry and timepieces, and continued our vertical integration strategy, which drove a 250 basis point increase in gross margin and a significant increase in EBITDA, as compared to the prior year. We recognize that we face a difficult comparison in the upcoming holiday season, as comparable store sales increased 15% for the November and December holiday period last year. We remain confident in our strategies and our ability to generate sales and earnings growth in Fiscal 2007.”


For the Six Months Ended September 30, 2006:

 

    Net sales increased 13.7% to $123.1 million, from $108.3 million in the prior year period; excluding one extra week in the first twenty-seven weeks of Fiscal 2007, net sales increased by approximately 10%;

 

    Comparable store sales increased 6% after increasing 9% in the prior year period;

 

    Gross profit margin rose 130 basis points to 48.1% of net sales;

 

    EBITDA increased 59% to $4.0 million;

 

    Net loss was $4.5 million, or $0.40 per diluted share, as compared to a net loss of $4.2 million, or $0.57 per diluted share in the prior year period; and

 

  Adjusted net loss excluding certain costs was $3.7 million, or $0.33 per diluted share, as compared to a net loss of $5.7 million or $0.78 per diluted share in the prior year period. (See table 2 for a reconciliation of adjusted net loss to net loss for the year to date period)

Second Quarter Fiscal 2007 Results

For the thirteen weeks ended September 30, 2006, net sales increased 4.8%, or $2.5 million to $54.5 million, as compared to $52.0 million for the thirteen weeks ended September 24, 2005. Comparable store sales increased 2%, following a 14% rise during the same period last year, due to the successful expansion of the Company’s retail marketing strategies, which include raising the level of exclusive merchandise and enhancing brand awareness. Comparable store sales in the Company’s Canadian markets increased 3%, while comparable store sales in the Company’s U.S. markets grew 1%. Comparable store sales are measured on a constant exchange rate basis which excludes the impact of changes in foreign exchange rates while all dollar amounts are reported in U.S. Dollars. Also contributing to the increase in second quarter Fiscal 2007 net sales was approximately $1.9 million due to the translation of the Canadian operations into U.S. Dollars at higher exchange rates due to the strengthening of the Canadian Dollar.

Gross margin increased to 48.4% of sales from 45.9% of sales, a 250 basis-point improvement. Gross profit dollars increased $2.5 million to $26.4 million from $23.9 million in the prior year period. The improvement in gross margin resulted from ongoing execution of the Company’s retail and merchandising strategies aimed at increasing sales of higher margin merchandise that is designed and manufactured or sourced directly by the Company.

EBITDA was $779,000, as compared to $377,000 in the prior year second quarter, an improvement of $402,000, or 107%. The improvement in EBITDA during the quarter resulted primarily from gross margin expansion. Adjusted EBITDA was $811,000 in the Second Quarter of Fiscal 2007, as compared to an adjusted loss before interest, depreciation and amortization of $85,000 for the comparable period in Fiscal 2006. Adjusted EBITDA excludes approximately $32,000 of non-cash stock-based compensation expense in the second quarter of Fiscal 2007 and also excludes $462,000 of non-cash stock-based compensation income in the second quarter of Fiscal 2006. (See Table 1 for a reconciliation of EBITDA to adjusted EBITDA.)

 


Net loss was $3.6 million, or $0.32 per diluted share, as compared to a net loss of $2.9 million, or $0.40 per diluted share in the second quarter last year. Adjusted net loss excluding certain items was $3.2 million, or $0.28 per diluted share, as compared to a net loss of $3.6 million, or $0.49 per diluted share for the same period in the prior year. Adjusted net loss excludes certain items such as: (i) non-cash compensation expense (income) from both periods; (ii) accelerated depreciation expense in connection with the Company’s information technology systems implemented this summer in Canada; (iii) a write-off of certain leasehold improvements related to the downsizing of one of the Company’s stores, which should improve that location’s contribution; and (iv) a foreign exchange gain realized on convertible notes outstanding in the prior year period (See Table 1 below for a reconciliation to GAAP net loss to adjusted net loss.)

Table 1: Reconciliation of the Second Quarter GAAP Net Loss and EBITDA to Adjusted Net Loss and Adjusted EBITDA

In thousands, except per share amounts

 

      13-Weeks Ended
September 30, 2006
    13-Weeks Ended
September 24, 2005
 

Net loss

   $ (3,597 )   $ (2,896 )

Interest expense and other financial costs

     2,524       1,955  

Depreciation and amortization

     1,852       1,318  

Income taxes

     —         —    
                

EBITDA

     779       377  

Non-cash compensation expense (income)

     32       (462 )
                

Adjusted EBITDA

   $ 811     $ (85 )
                

Net loss

   $ (3,597 )   $ (2,896 )

Non-cash compensation expense (income)

     32       (462 )

Accelerated depreciation for information technology systems

     156       —    

Write-off of leasehold improvements for remodeled store

     234       —    

FX gain on convertible notes

     —         (230 )
                

Adjusted Net Loss

   $ (3,175 )   $ (3,588 )
                

Shares

     11,210       7,290  

Adjusted loss per diluted share

   $ (0.28 )   $ (0.49 )

To supplement the Company’s unaudited condensed consolidated financial statements presented in accordance with GAAP, the Company provides EBITDA and adjusted net loss, which are non-GAAP financial measures. EBITDA is defined as net loss plus the provision for income taxes, interest expense, and depreciation and amortization as presented in the Company’s Unaudited Condensed Consolidated Statement of Operations. EBITDA should not be considered as an alternative to operating income or net income (as determined in accordance with generally accepted accounting principles (GAAP)) as a measure of our operating performance or to net cash provided by operating, investing and financing activities (as determined in accordance with GAAP) as a measure of our ability to meet cash needs. The Company believes that EBITDA is a measure commonly reported and widely used by investors and other interested parties as a measure of a company’s operating performance and debt servicing ability because it assists in comparing performance on a consistent basis without regard to capital structure, depreciation and amortization or non-operating factors (such as historical cost). Accordingly, as a result of our capital structure, we believe EBITDA is a relevant measure. This information has been disclosed here to permit a more complete comparative analysis of our operating performance relative to other companies and of our debt servicing ability. EBITDA may not, however, be comparable in all instances to other similar types of measures. The presentation of adjusted net loss

 


should be considered in addition to the Company’s GAAP results and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The Company believes that adjusted net loss is useful to investors to enhance the overall understanding of the Company’s current financial performance and to allow for greater transparency with respect to supplemental information used by management in its financial and operational decision making.

For the Six-Months Ended September 30, 2006:

Net sales increased 13.7%, or $14.8 million to $123.1 million, as compared to $108.3 million for the six months ended September 24, 2005. The Company estimates that an extra week in the first six months of Fiscal 2007 increased net sales by approximately $4.3 million, as compared to the same period in the prior year. Comparable store sales increased 6%, driven primarily by a higher average unit retail. Comparable store sales in the Company’s Canadian markets increased 8%, while comparable store sales in the Company’s U.S. markets grew 5%. Also, contributing to the increase in the first six months of Fiscal 2007 net sales was approximately $4.5 million due to the translation of the Canadian operations into U.S. Dollars at higher exchange rates due to the strengthening of the Canadian Dollar.

EBITDA was $4.0 million for the first six months of Fiscal 2007, as compared to $2.5 million for the comparable period in Fiscal 2006, an improvement of $1.5 million, or 59%. The improvement in EBITDA during the current period resulted primarily from gross margin expansion and the impact of $4.3 million of additional sales and $1.0 million of additional operating expenses related to the extra week included in the twenty-seven week period ended September 30, 2006. Adjusted EBITDA was $4.1 million for the first six months of Fiscal 2007, as compared to $1.2 million for the comparable period in Fiscal 2006. Adjusted EBITDA excludes approximately $110 thousand of non-cash stock-based compensation expense for the first six months of Fiscal 2007 and also excludes $1.3 million of non-cash stock-based compensation income for the first six months of Fiscal 2006. (See Table 2 for a reconciliation of EBITDA to adjusted EBITDA.)

Net loss was $4.5 million, or $0.40 per diluted share for the first six months of Fiscal 2007, as compared to a net loss of $4.2 million or $0.57 per diluted share for the first six months of Fiscal 2006. Adjusted net loss was $3.7 million, or $0.33 per diluted share, as compared to a net loss of $5.7 million, or $0.78 per diluted share in the prior year period. Adjusted net loss excludes certain items such as: (i) non-cash compensation expense (income) in both periods, (ii) accelerated depreciation expense in connection with the Company’s information technology systems implemented this summer in Canada; (iii) a write-off of certain leasehold improvements related to the downsizing of one of the Company’s stores, which should improve that location’s contribution; and (iv) foreign exchange gain realized on convertible notes outstanding in the prior year period. (See Table 2 below for a reconciliation of GAAP net loss to adjusted net loss).


Table 2: Reconciliation of the First Six Months GAAP Net Loss and EBITDA to Adjusted Net Loss and Adjusted EBITDA

In thousands, except per share amounts

 

     27-Weeks Ended
September 30, 2006
    26-Weeks Ended
September 24, 2005
 

Net loss

   $ (4,510 )   $ (4,184 )

Interest expense and other financial costs

     4,973       4,164  

Depreciation and amortization

     3,546       2,536  

Income taxes

     —         —    
                

EBITDA

     4,009       2,516  

Non-cash compensation expense (income)

     110       (1,346 )
                

Adjusted EBITDA

   $ 4,119     $ 1,170  
                

Net loss

   $ (4,510 )   $ (4,184 )

Non-cash compensation expense (income)

     110       (1,346 )

Accelerated depreciation for information technology systems

     450       —    

Write-off of leasehold improvements for remodeled store

     234       —    

FX gain on convertible notes

     —         (170 )
                

Adjusted Net Loss

   $ (3,716 )   $ (5,700 )
                

Shares

     11,209       7,294  

Adjusted loss per diluted share

   $ (0.33 )   $ (0.78 )


Business Outlook

The Company reiterated the following guidance on the business outlook for Fiscal 2007.

Comparable store sales are projected to increase in Fiscal 2007, however, at a more moderate rate of increase for the full year than realized in Fiscal 2006. Gross margins are planned to improve from the prior year through successful merchandising and retail strategies. These strategies include the continued emphasis on internally manufactured and distinctively designed products that are exclusive to Birks & Mayors.

The luxury retail market continues to be very competitive. In addition, factors such as: rising interest rates, tourism and mall traffic, the impact of changes in the real estate markets, (especially in the state of Florida), the equity markets, the general level of consumer confidence, and the increased cost of oil and commodity prices may have an influence on the realization of the Company’s sales and gross margin plans for Fiscal 2007.

Conference Call Information

A conference call to discuss second quarter Fiscal 2007 results is scheduled for today, December 4, 2006 at 4:45 p.m. Eastern Time. Investors and analysts in the U.S. and Canada interested in participating in the call are invited to dial (800) 819-9193, or for all other International callers (913) 981-4911 approximately ten minutes prior to the start of the call. The conference call will also be web-cast live at www.birksandmayors.com. A replay of this call will be available until December 11, 2006 and can be accessed by dialing (888) 203-1112 and entering pin number 1834005.

Birks & Mayors is a leading operator of luxury jewelry stores in the United States and Canada. As of December 4, 2006, the Company operated 39 stores (Birks Brand) across most major metropolitan markets in Canada and 29 stores (Mayors Brand) across Florida and Georgia. Birks was founded in 1879 and developed over the years into Canada’s premier retailer, designer and manufacturer of fine jewelry, timepieces, sterling and plated silverware and gifts. Mayors was founded in 1910 and has maintained the intimacy of a family-owned boutique while becoming renowned for its fine jewelry, timepieces, giftware and service. Additional information can be found on Birks & Mayors web site, www.birksandmayors.com.

This press release contains certain “forward-looking” statements concerning expectations for strong sales, success of the Company’s merchandising, marketing and retail initiatives, continued growth in sales, earnings and improvement in gross margins. Actual results might differ materially from those projected in the forward-looking statements as they are subject to various risks and uncertainties. These risks and uncertainties include the Company’s ability to maintain strong sales throughout the remainder of the fiscal year, the ability of the Company to maintain strong growth and profitability, the Company’s ability to keep costs low, the Company’s ability to implement its business strategy, the Company’s ability to maintain relationships with its primary vendors, the Company’s ability to limit its exposure to currency exchange risk and fluctuations in the availability and prices of the Company’s merchandise, the Company’s ability to compete with other jewelers, the success of the Company’s marketing initiatives, the Company’s ability to have a successful customer service program, and the Company’s ability to attract and retain its key personnel. Information concerning factors that could cause actual results to differ materially are set forth in the Company’s annual report on Form 20-F filed 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 & MAYORS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

(In thousands, except per share amounts)

 

     Thirteen
Weeks Ended
September 30,
2006
    Thirteen
Weeks Ended
September 24,
2005
 

Net sales

   $ 54,506     $ 52,018  

Cost of sales

     28,112       28,159  
                

Gross profit

     26,394       23,859  
                

Selling, general and administrative expenses

     25,615       23,482  

Depreciation and amortization

     1,852       1,318  
                
     27,467       24,800  
                

Operating loss

     (1,073 )     (941 )

Interest and other financial costs

     2,524       1,955  
                

Loss before income taxes

     (3,597 )     (2,896 )

Income taxes

     —         —    
                

Net loss

   $ (3,597 )   $ (2,896 )
                

Weighted average shares outstanding:

    

Basic and diluted

     11,210       7,290  

Loss per share:

    

Basic and diluted

   $ (0.32 )   $ (0.40 )

 


BIRKS & MAYORS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

(In thousands, except per share amounts)

 

     Twenty-seven
Weeks Ended
September 30,
2006
    Twenty-six
Weeks Ended
September 24,
2005
 

Net sales

   $ 123,063     $ 108,257  

Cost of sales

     63,845       57,573  
                

Gross profit

     59,218       50,684  
                

Selling, general and administrative expenses

     55,209       48,168  

Depreciation and amortization

     3,546       2,536  
                
     58,755       50,704  
                

Operating income (loss)

     463       (20 )

Interest and other financial costs

     4,973       4,164  
                

Loss before income taxes

     (4,510 )     (4,184 )

Income taxes

     —         —    
                

Net loss

   $ (4,510 )   $ (4,184 )
                

Weighted average shares outstanding:

    

Basic and diluted

     11,209       7,294  

Loss per share:

    

Basic and diluted

   $ (0.40 )   $ (0.57 )


BIRKS & MAYORS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET – UNAUDITED

(In thousands)

 

     September 30,
2006
    September 24,
2005
 

ASSETS

    

Current Assets:

    

Cash and cash equivalents

   $ 2,496     $ 2,324  

Accounts receivable

     9,674       8,976  

Inventories

     175,386       152,837  

Other current assets

     6,125       2,971  
                

Total current assets

     193,681       167,108  
                

Property and equipment

     34,298       31,939  

Goodwill and other intangible assets

     30,241       15,908  

Other assets

     1,473       2,975  
                

Total non-current assets

     66,012       50,822  
                

Total assets

   $ 259,693     $ 217,930  
                

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current Liabilities:

    

Bank indebtedness

   $ 117,169     $ 105,392  

Accounts payable

     46,687       32,797  

Accrued liabilities

     9,753       10,673  

Current portion of long-term debt

     1,644       3,311  
                

Total current liabilities

     175,253       152,173  
                

Long-term debt

     17,432       16,877  

Convertible Notes

     —         5,000  

Other long-term liabilities

     3,708       4,528  
                

Total long-term liabilities

     21,140       26,405  
                

Convertible Preferred Stock

     —         5,050  

Stockholders’ Equity:

    

Common stock

     60,455       36,364  

Additional paid-in capital

     16,012       15,231  

Accumulated deficit

     (12,558 )     (17,944 )

Accumulated other comprehensive (loss) income

     (609 )     651  
                

Total stockholders’ equity

     63,300       34,302  
                

Total liabilities and stockholders’ equity

   $ 259,693     $ 217,930