IDG - Indigo Q2 Results Reflect Strong Margin and Productivity Improvements (CAD 0.11)

Company: Indigo Books & Music Inc.
Stock Name: IDG
Amount: CAD 0.11
Announcement Date: 06/11/2012
Record Date: 16/11/2012

Dividend Detail:

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Plum Rewards Membership Tops 5 Million Customers

TORONTO, Nov. 6, 2012 /CNW/ - Indigo Books & Music Inc. (TSX: IDG),
Canada's largest book, gift and specialty toy retailer reported a 5.9%
decrease in net revenue for its second quarter ending September 29,
2012. Revenue for the quarter was $185.6 million, down $11.6 million
from last year driven primarily by a delay in the planned launch of the
new Kobo devices.�� In addition, the Company operated seven fewer Coles
stores.�� Book sales for the quarter were down only modestly to last
year owing to strong titles as well as effective efforts to drive book
sales both in store and online.

On a comparable store basis, Indigo and Chapters superstores posted a
6.5% decrease in revenue, while Coles and IndigoSpirit small format
stores were down 2.2%.

Commenting on the results, CEO Heather Reisman said, "We are focused on
driving significant margin and productivity improvements and are
pleased that our on-going efforts are reflected in our results.�� We
will continue to broaden our assortment in our key growth categories to
drive higher top line sales to offset the decline in physical books.
We're also pleased to have the newest Kobo eReaders now in store as top
gift picks for the upcoming holiday season."

The net loss attributable to shareholders of the Company from continuing
operations improved $24.8 million from a loss of $28.8 million last
year to a loss of $4.0 million this year.�� The significant reduction in
net loss was due to there being no impairment charges in the current
year.�� In the same period last year, the Company recorded a full write
down of the $25.4 million of goodwill allocated to the Indigo segment.��
In addition, the Company experienced improvements in margin and
productivity in the current year.

The net loss per share from continuing operations improved from a loss
of $1.14 per share last year to a loss of $0.16 per share due to the
above noted factors.

In the quarter, the Company's plum rewards program was recognized for
global leadership, earning the award for Loyalty Innovation in Retail at the 3^rd Annual COLLOQUY Loyalty Awards.�� In less than 18 months, five million
Canadians joined the plum rewards program, collecting over seven
billion plum points.�� Designed in response to customer feedback, plum
rewards help shoppers discover products that match their interests and
passions while rewarding and recognizing their purchases. Plum rewards
members can collect points on virtually every in-store purchase, have
self-service access to personalized recommendations and offers online
or at in-store kiosks, and enjoy special member pricing on online book
purchases.

Also in the second quarter, Indigo launched its award winning annual
Adopt-A-School program, a three week national fundraising campaign that
raised over $580 thousand ��� the equivalent of over 50 thousand books ���
to support 570 participating schools across Canada. Through the program
Indigo helps augment the $1.5 million in grants made annually by the
Indigo Love of Reading Foundation to benefit high needs elementary
schools.

The Board of Directors today approved a quarterly dividend of 11 cents
per common share to be paid on December 5, 2012, to all shareholders of
record as of November 20, 2012.

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
comparative store sales growth, 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.�� Comparative store sales growth
is a key indicator 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. Comparable store sales are defined as sales generated by
stores that have been open for more than 12 months on a 52-week basis.

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; The World's Biggest Bookstore; and Coles. The
online channel, indigo.ca, offers a one-stop online shop with a robust
selection of books, toys, home d��cor, stationery and gifts.

In 2004, Indigo founded the Indigo Love of Reading Foundation, a
registered charity that provides new books and education materials to
high-needs Canadian elementary schools, to address the literacy crisis
in Canada. To date the Foundation, as well as the Indigo "Adopt A
School" program, have contributed $13 million, equating to more than a
million books, to high-needs elementary schools across Canada.�� Visit loveofreading.org for more information.

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

Consolidated Balance Sheets
(Unaudited)
��	��	��	��	��
��	��	As at	As at	As at
��	��	September 29,	October 1,	March 31,
(thousands of Canadian dollars)	��	2012	2011	2012
ASSETS	��	��	��	��
Current	��	��	��	��
Cash and cash equivalents	��	192,598	45,491	207,601
Accounts receivable	��	14,092	21,831	12,627
Inventories	��	247,604	263,918	229,706
Prepaid expenses	��	4,835	15,285	3,695
Total current assets	��	459,129	346,525	453,629
Property, plant and equipment	��	62,111	76,031	67,464
Intangible assets	��	22,467	31,251	22,810
Goodwill	��	-	1,216	-
Deferred tax assets	��	53,986	68,250	48,633
Total assets	��	597,693	523,273	592,536
LIABILITIES AND EQUITY	��	��	��	��
Current	��	��	��	��
Accounts payable and accrued liabilities	��	198,435	224,159	174,201
Unredeemed gift card liability	��	37,912	36,292	42,711
Provisions	��	175	-	232
Deferred revenue	��	12,882	12,401	11,234
Income taxes payable	��	111	650	65
Notes payable	��	-	5,168	-
Current portion of long-term debt	��	900	1,305	1,060
Total current liabilities	��	250,415	279,975	229,503
Long-term accrued liabilities	��	4,448	5,038	5,800
Long-term provisions	��	391	-	460
Long-term debt	��	1,045	1,623	1,141
Total liabilities	��	256,299	286,636	236,904
Equity	��	��	��	��
Share capital	��	203,660	202,962	203,373
Contributed surplus	��	7,570	6,839	7,039
Retained earnings	��	130,164	4,882	145,220
Total equity attributable to shareholders of Indigo	��	341,394	214,683	355,632
Non-controlling interest	��	-	21,954	-
Total equity	��	341,394	236,637	355,632
Total liabilities and equity	��	597,693	523,273	592,536

Consolidated Statements of Loss and Comprehensive Loss
(Unaudited)
��	��	��	��	��
��	13-week	13-week	26-week	26-week
��	period ended	period ended	period ended	period ended
��	September 29,	October 1,	September 29,	October 1,
(thousands of Canadian dollars, except per share data)	2012	2011	2012	2011
��	��	��	��	��
Revenues	185,589	197,248	372,072	385,253
Cost of sales	100,487	111,497	206,875	222,579
Gross profit	85,102	85,751	165,197	162,674
Operating and administrative expenses	90,975	115,579	181,149	208,270
Operating loss	(5,873)	(29,828)	(15,952)	(45,596)
Interest on long-term debt and financing charges	29	39	60	83
Interest expense (income) on cash and cash equivalents	(578)	56	(1,159)	(15)
Loss before income taxes	(5,324)	(29,923)	(14,853)	(45,664)
Income tax recovery	(1,311)	(1,074)	(5,353)	(4,852)
Loss and comprehensive loss for the period from continuing operations	(4,013)	(28,849)	(9,500)	(40,812)
Loss and comprehensive loss for the period from discontinued operations (net of tax)	-	(11,542)	-	(23,773)
Net loss and comprehensive loss for the period	(4,013)	(40,391)	(9,500)	(64,585)
��	��	��	��	��
Net loss and comprehensive loss attributable to:	��	��	��	��
Shareholders of Indigo	(4,013)	(35,120)	(9,500)	(53,225)
Non-controlling interest	-	(5,271)	-	(11,360)
��	��	��	��	��
Net loss per common share from continuing operations	��	��	��	��
Basic	$(0.16)	$(1.14)	$(0.38)	$(1.62)
Diluted	$(0.16)	$(1.14)	$(0.38)	$(1.62)
��	��	��	��	��
��	��	��	��	��
Net loss per common share from discontinued operations	��	��	��	��
Basic	$ -	$(0.25)	$ -	$(0.49)
Diluted	$ -	$(0.25)	$ -	$(0.49)
��	��	��	��	��
Net loss per common share	��	��	��	��
Basic	$(0.16)	$(1.39)	$(0.38)	$(2.11)
Diluted	$(0.16)	$(1.39)	$(0.38)	$(2.11)

Consolidated Statements of Cash Flows
(Unaudited)
��		13-week	13-week	26-week	26-week
��		period ended	period ended	period ended	period ended
��		September 29,	October 1,	September 29,	October 1,
(thousands of Canadian dollars)		2012	2011	2012	2011
��		��	��	��	��
CASH FLOWS FROM OPERATING ACTIVITIES		��	��	��	��
Net loss from continuing operations for the period		(4,013)	(28,849)	(9,500)	(40,812)
Add (deduct) items not affecting cash		��	��	��	��
��	Depreciation of property, plant and equipment	4,329	4,557	9,048	9,016
��	Amortization of intangible assets	2,515	2,103	4,937	4,184
��	Impairment of capital assets	-	-	250	-
��	Impairment of goodwill	-	25,416	-	25,416
��	Loss on disposal of capital assets	-	11	44	15
��	Stock-based compensation	200	75	359	670
��	Directors' compensation	96	118	229	267
��	Deferred tax assets	(1,311)	(1,250)	(5,353)	(4,852)
��	Other	510	(2,125)	(243)	(2,411)
Net change in non-cash working capital balances related to continuing operations		10,667	(18,306)	(897)	(11,501)
Interest on long-term debt and financing charges		29	39	60	83
Interest expense (income) on cash and cash equivalents		(578)	56	(1,159)	(15)
Income taxes received		41	-	45	-
Operating cash flows of discontinued operations		-	(282)	-	(16,813)
Cash flows from (used in) operating activities		12,485	(18,437)	(2,180)	(36,753)
��		��	��	��	��
CASH FLOWS FROM INVESTING ACTIVITIES		��	��	��	��
Acquisition of non-capital tax losses		-	(450)	-	(10,559)
Purchase of property, plant and equipment		(2,764)	(3,651)	(3,548)	(5,848)
Addition of intangible assets		(2,784)	(2,259)	(4,614)	(3,888)
Investing cash flows of discontinued operations		-	(2,488)	-	(4,646)
Cash flows used in investing activities		(5,548)	(8,848)	(8,162)	(24,941)
��		��	��	��	��
CASH FLOWS FROM FINANCING ACTIVITIES		��	��	��	��
Notes payable		-	225	-	5,280
Repayment of long-term debt		(338)	(393)	(684)	(712)
Interest received		565	10	1,124	94
Proceeds from share issuances		142	-	230	578
Purchase of shares in subsidiary		-	-	-	(3,009)
Dividends paid		(2,780)	(2,772)	(5,556)	(5,539)
Financing cash flows of discontinued operations		-	36	-	24,478
Cash flows from (used in) financing activities		(2,411)	(2,894)	(4,886)	21,170
��		��	��	��	��
Effect of foreign currency exchange rate changes on cash and cash equivalents		(523)	2,285	225	2,354
��		��	��	��	��
Net increase (decrease) in cash and cash equivalents during the period		4,003	(27,894)	(15,003)	(38,170)
Cash and cash equivalents, beginning of period		188,595	73,385	207,601	83,661
Cash and cash equivalents, end of period		192,598	45,491	192,598	45,491
��		��	��	��	��
Cash and cash equivalents attributable to:		��	��	��	��
Continuing operations		192,598	18,497	192,598	18,497
Discontinued operations		-	26,994	-	26,994
��		192,598	45,491	192,598	45,491

��

��

SOURCE: Indigo Books & Music Inc.

For further information:

Janet Eger
Vice President, Public Relations
416 342 8561
jeger@indigo.ca

IDG - <span class="simulate_din_font">Indigo Revenue Up in Third Quarter</span> (CAD 0.11)

Company: Indigo Books & Music Inc.
Stock Name: IDG
Amount: CAD 0.11
Announcement Date: 08/02/2012
Record Date: 22/02/2012

Dividend Detail:

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-Sales Up In Store, Online with Double Digit Increases in Gift,
Lifestyle and Toys-

TORONTO, Feb. 8, 2012 /CNW/ - Indigo Books & Music Inc. (TSX: IDG),
Canada's largest book, gift and specialty toy retailer reported a 0.5%
growth in revenue for its third quarter ending December 31, 2011.
Revenue for the quarter was $352.9 million, up $1.7 million from last
year driven by growth in the gift, lifestyle, toy, and eReader
businesses.

On a comparable store basis, Indigo and Chapters superstores posted a
1.8% increase in revenue, and Coles and IndigoSpirit small format
stores were up by 2.5%. Sales from Indigo's online channel,
chapters.indigo.ca were up 9.3% compared to last year.

Commenting on the results, CEO Heather Reisman said, "We were very
pleased with our holiday results. We recorded the highest sales day in
the history of our Company during December and experienced double digit
growth in our gift, lifestyle, and toy businesses".

Net profit from continuing operations for the quarter was $23.7 million
compared to a net profit from continuing operations of $27.0 million
last year. Ms. Reisman noted, "The reduced profit was due to lower
gross margins as a result of increased promotional discounts to drive
print sales and increased sales of low margin eReaders. This margin
impact has not yet been offset by expected growth in the gift,
lifestyle and toy businesses. The Company also recorded a $4.0 million
non-cash asset impairment charge during the quarter. Excluding this
charge, net profit increased $0.7 million."

During the quarter, the Company entered into an agreement with Rakuten,
Inc. to acquire all of the outstanding shares of Kobo Inc. on a fully
diluted basis for an aggregate price of US$315 million. The sale was
completed shortly after quarter end and Indigo received US$146.1
million from the proceeds of the sale. The Company noted that it
intends to keep the cash proceeds to support its growth and
transformation strategy.

The Company also announced that Ted Marlow decided to return to the U.S.
and has stepped down from his role as President. "We thank Ted for his
leadership over the past year," said Ms. Reisman.

The Board of Directors today approved a quarterly dividend of 11 cents
per common share to be paid on March 12, 2012, to all shareholders of
record as of February 24, 2012.

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 consolidated financial statements in accordance
with International Financial Reporting Standards. In order to provide
additional insight into the business, the Company has also provided
non-IFRS data, including comparative store sales growth, 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.
Comparative store sales growth is a key indicator 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. Comparable store sales
are defined as sales generated by stores that have been open for more
than 12 months on a 52-week basis.

About Indigo Books & Music Inc.

Indigo is a publicly traded Canadian company listed on the Toronto Stock
Exchange (IDG) and the majority shareholder ofthe global eReading
service Kobo Inc. 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, The World's Biggest Bookstore, and Coles. The
online channel, indigo.ca, features books, eBooks, toys, gifts and, and hosts the award winning
Indigo Online Community. In 2004, Indigo founded the Indigo Love of
Reading Foundation, a registered charity that provides new books and
education materials to high-needs Canadian elementary schools, to
address the literacy crisis in Canada. To date the Foundation has
contributed $10.5 million to schools in need. Visit loveofreading.org
for more information.

To learn more about Indigo, please visit the About Our Company section
of www.indigo.ca.

Consolidated Balance Sheets
(Unaudited)
				
		As at	As at	As at
		December 31,	January 1,	April 2,
(thousands of Canadian dollars)		2011	2011	2011
ASSETS				
Current				
Cash and cash equivalents		148,610	144,643	83,661
Accounts receivable		21,690	26,007	12,684
Inventories		234,705	255,750	232,694
Income taxes recoverable		-	899	-
Prepaid expenses		3,915	13,729	7,941
Derivatives		1,747	-	-
Assets held for sale		117,551	-	-
Total current assets		528,218	441,028	336,980
Property, plant and equipment		70,409	85,722	78,777
Intangible assets		22,333	28,359	30,614
Deferred tax assets		60,290	34,847	38,004
Goodwill		1,216	26,632	26,632
Total assets		682,466	616,588	511,007
LIABILITIES AND EQUITY				
Current				
Accounts payable and accrued liabilities		241,553	256,432	180,899
Unredeemed gift card liability		60,959	57,094	40,991
Provisions		-	 33	-
Deferred revenue		12,110	12,639	11,528
Income taxes payable		310	-	657
Notes payable		5,224	-	-
Current portion of long-term debt		1,163	1,302	1,290
Liabilities associated with assets held for sale		114,400	-	-
Total current liabilities		435,719	327,500	235,365
Long-term accrued liabilities		4,820	6,822	6,284
Long-term debt		1,327	2,081	1,995
Total liabilities		441,866	336,403	243,644
Equity				
Share capital		203,254	201,294	202,220
Contributed surplus		6,860	5,986	6,066
Retained earnings		16,468	70,825	48,629
Total equity attributable to shareholders of the Company		226,582	278,105	256,915
Non-controlling interest		14,018	2,080	10,448
Total equity		240,600	280,185	267,363
Total liabilities and equity		682,466	616,588	511,007

Consolidated Statements of Earnings (Loss) and Comprehensive Earnings (Loss)
(Unaudited)
								
	13-week		13-week		39-week		39-week
	period ended		period ended		period ended		period ended
	December 31,		January 1,		December 31,		January 1,
(thousands of Canadian dollars, except per share data)	2011		2011		2011		2011
							
Revenues	352,858		351,225		738,111		756,289
Cost of sales	208,456		199,335		431,035		426,615
Gross profit	144,402		151,890		307,076		329,674
Cost of operations	82,277		84,041		213,986		213,948
Selling and administrative expenses	21,376		20,838		58,708		56,846
Foreign currency translation	(1,780)		75		(1,167)		339
Operating earnings before the following	42,529		46,936		35,549		58,541
Depreciation of property, plant and equipment	4,810		4,801		13,826		13,424
Amortization of intangible assets	2,082		1,955		6,266		5,793
Impairment of capital assets	3,956		-		3,956		-
Impairment of goodwill	-		-		25,416		-
Interest on long-term debt and financing charges	34		72		117		115
Interest income on cash and cash equivalents	(25)		(122)		(40)		(295)
Earnings (loss) before income taxes	31,672		40,230		(13,992)		39,504
Income tax expense	7,961		13,280		3,109		13,367
Earnings (loss) and comprehensive earnings (loss) from continuing operations	23,711		26,950		(17,101)		26,137
Loss and comprehensive loss from discontinued operations, net of taxes	(17,906)		(10,107)		(41,679)		(21,151)
Net earnings (loss) and comprehensive earnings (loss) for the period	5,805		16,843		(58,780)		4,986
							
Net earnings (loss) and comprehensive earnings (loss) attributable to:							
Shareholders of the Company	14,362		20,827		(38,863)		13,699
Non-controlling interest	(8,557)		(3,984)		(19,917)		(8,713)
Total net earnings (loss) and comprehensive earnings (loss) for the period	5,805		16,843		(58,780)		4,986
							
Net earnings (loss) per common share							
Basic	$0.57		$0.84		$(1.54)		$0.55
Diluted	$0.56		$0.82		$(1.54)		$0.54

Consolidated Statements of Cash Flows
(Unaudited)
	13-week	13-week	39-week	39-week
	period ended	period ended	period ended	period ended
	December 31,	January 1,	December 31,	January 1,
(thousands of Canadian dollars)	2011	 2,011	2011	 2,011
				
CASH FLOWS FROM OPERATING ACTIVITIES				
Net earnings (loss) from continuing operations for the period	23,711	26,950	 (17,101)	26,137
Add (deduct) items not affecting cash				
Depreciation of property, plant and equipment	 4,810	 4,801	13,826	13,424
Amortization of intangible assets	 2,082	 1,955	 6,266	 5,793
Impairment of capital assets	 3,956	 -	 3,956	 -
Impairment of goodwill	 -	 -	25,416	 -
Loss on disposal of capital assets	50	4	65	73
Stock-based compensation	 196	 243	 866	 532
Directors' compensation	 117	 100	 384	 416
Deferred tax assets	 7,961	13,280	 3,109	13,367
Interest on long-term debt and financing charges	34	72	 117	 115
Interest income on cash and cash equivalents	 (25)	(122)	 (40)	(295)
Other	 2,453	 363	43	 494
Net change in non-cash working capital balances related to continuing operations	97,121	56,514	85,620	32,325
Operating cash flows of discontinued operations	 (51,874)	(9,102)	 (68,687)	 (11,587)
Cash flows from operating activities	90,592	95,058	53,840	80,794
				
CASH FLOWS FROM INVESTING ACTIVITIES				
Acquisition of non-capital tax losses	 -	 -	 (10,559)	 -
Purchase of property, plant and equipment	(4,682)	(7,382)	 (10,530)	 (21,878)
Addition of intangible assets	(2,152)	(3,182)	(6,040)	(8,893)
Investing cash flows of discontinued operations	(3,289)	(1,267)	(7,936)	(3,789)
Cash flows used in investing activities	 (10,123)	 (11,831)	 (35,065)	 (34,560)
				
CASH FLOWS FROM FINANCING ACTIVITIES				
Notes payable	 -	 -	 5,280	 -
Repayment of long-term debt	(335)	(356)	(1,047)	(1,983)
Interest received	15	54	 109	 177
Proceeds from share issuances	 -	 1,093	 578	 2,274
Repurchase of common shares	 -	 -	 -	(387)
Purchase of shares in subsidiary	 -	(5,714)	(3,009)	(9,286)
Dividends paid	(2,776)	(2,742)	(8,315)	(8,193)
Financing cash flows of discontinued operations	50,604	 7,628	75,082	12,401
Cash flows from (used in) financing activities	47,508	 (37)	68,678	(4,997)
				
Effect of foreign currency exchange rate changes on cash and cash equivalents	(2,422)	(369)	 (68)	(492)
				
Net increase in cash and cash equivalents during the period	 125,555	82,821	87,385	40,745
Cash and cash equivalents, beginning of period	45,491	61,822	83,661	 103,898
Cash and cash equivalents, end of period	 171,046	 144,643	 171,046	 144,643
				
Cash and cash equivalents attributable to:				
Continuing operations	 148,610	 136,648	 148,610	 136,648
Discontinued operations	22,436	 7,995	22,436	 7,995
	 171,046	 144,643	 171,046	 144,643

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For further information:

Janet Eger

Vice President, Public Relations

416 342 8561

jeger@indigo.ca