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Press release from CNW Group

Reitmans (Canada) Limited Announces Year-End Results

Wednesday, March 30, 2011

Reitmans (Canada) Limited Announces Year-End Results16:16 EDT Wednesday, March 30, 2011MONTREAL, March 30 /CNW Telbec/ - Sales for the year ended January 29, 2011 increased 1.3% to $1,070,277,000 as compared with $1,056,527,000 for the year ended January 30, 2010. Same store sales decreased 0.1%. Earnings before interest, taxes, depreciation and amortization and investment income ("EBITDA") increased 15.2% to $182,604,000 as compared with $158,488,000 last year. The Company's gross margin increased from 64.2% to 67.2% in the year ended January 29, 2011, primarily due to the strengthening of the Canadian dollar vis-à-vis the US dollar. Net earnings increased 29.4% to $87,021,000 or $1.29 diluted earnings per share as compared with $67,236,000 or $0.98 diluted earnings per share last year.Sales for the fourth quarter ended January 29, 2011 increased 0.5% to $269,484,000 as compared with $268,120,000 for the fourth quarter ended January 30, 2010. Same store sales for the fourth quarter decreased 0.6%. For the fourth quarter ended January 29, 2011, EBITDA decreased 15.4% to $31,582,000 as compared with $37,317,000 for the same period last year. The Company's gross margin decreased slightly from 65.0% to 64.7% for the fourth quarter ended January 29, 2011. An improvement in the gross margin attributable to the strength of the Canadian dollar in the fourth quarter ended January 29, 2011 was offset by a reduction due to increased promotional activity. Net earnings for the fourth quarter ended January 29, 2011 decreased 19.1% to $11,401,000 or $0.17 diluted earnings per share as compared to $14,088,000 or $0.21 diluted earnings per share for the same period last year.During the year, the Company opened 31 new stores and closed 40. Accordingly, at January 29, 2011, there were 968 stores in operation, consisting of 364 Reitmans, 158 Smart Set, 67 RW & CO., 75 Thyme Maternity, 22 Cassis, 161 Penningtons and 121 Addition Elle, as compared with a total of 977 stores as at January 30, 2010.At the Board of Directors meeting held on March 30, 2011, a quarterly cash dividend (constituting eligible dividends) of $0.20 per share on all outstanding Class A non-voting and Common shares of the Company was declared, payable April 28, 2011 to shareholders of record on April 15, 2011.Non-GAAP Financial MeasuresIn addition to discussing earnings measures in accordance with generally accepted accounting principles ("GAAP"), this press release provides earnings before interest, taxes, depreciation and amortization and investment income ("EBITDA") as a supplementary earnings measure. Depreciation and amortization includes the write-off of capital assets. The Company also discloses same store sales, which are defined as sales generated by stores that have been open for at least one year. The Company believes these measures provide meaningful information on the Company's performance and operating results. However, readers should know that these non-GAAP financial measures have no standardized meaning as prescribed by GAAP and may not be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation.The following table reconciles EBITDA to GAAP measures disclosed in the statements of earnings for the twelve and three months ended January 29, 2011 and January 30, 2010: << (in thousands) For the For the (Unaudited) twelve months ended three months ended ------------------------------------------------------ January 29, January 30, January 29, January 30, 2011 2010 2011 2010 ------------------------------------------------------ Earnings before income taxes $ 125,137 $ 99,015 $ 17,099 $ 21,647 Interest on long- term debt 767 846 184 204 Investment income (3,756) (1,992) (1,082) 28 Depreciation and amortization 60,456 60,619 15,381 15,438 ------------------------------------------------------ EBITDA $ 182,604 $ 158,488 $ 31,582 $ 37,317 ------------------------------------------------------ ------------------------------------------------------ Forward-Looking Statements >>All of the statements contained herein, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond the Company's control. Such risks include but are not limited to: the impact of general economic conditions, general conditions in the retail industry, seasonality, weather and other risks included in public filings of the Company. Consequently, actual future results may differ materially from the anticipated results expressed in forward-looking statements. The reader should not place undue reliance on the forward-looking statements included herein. These statements speak only as of the date made and the Company is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, except to the extent required under applicable securities law.The Company's complete financial statements including notes and Management's Discussion and Analysis for the year ended January 29, 2011 are available online at www.sedar.com. << Montreal, March 30, 2011 Jeremy H. Reitman Chairman and Chief Executive Officer Telephone: (514) 385-2630 Corporate Website: www.reitmans.ca >>STATEMENTS OF EARNINGS (Unaudited)(in thousands except per share amounts) << For the For the twelve months ended three months ended January 29, January 30, January 29, January 30, 2011 2010 2011 2010 Sales $ 1,070,277 $ 1,056,527 $ 269,484 $ 268,120 Cost of goods sold and selling, general and administrative expenses 887,673 898,039 237,902 230,803 ------------ ------------ ------------ ------------ 182,604 158,488 31,582 37,317 Depreciation and amortization 60,456 60,619 15,381 15,438 ------------ ------------ ------------ ------------ Operating earnings before the undernoted 122,148 97,869 16,201 21,879 Investment income 3,756 1,992 1,082 (28) Interest on long- term debt 767 846 184 204 ------------ ------------ ------------ ------------ Earnings before income taxes 125,137 99,015 17,099 21,647 Income taxes: Current 41,669 34,705 6,635 8,062 Future (3,553) (2,926) (937) (503) ------------ ------------ ------------ ------------ 38,116 31,779 5,698 7,559 ------------ ------------ ------------ ------------ Net earnings $ 87,021 $ 67,236 $ 11,401 $ 14,088 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Earnings per share: Basic $ 1.30 $ 0.98 $ 0.17 $ 0.21 Diluted 1.29 0.98 0.17 0.21 >>STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)(in thousands) << For the For the twelve months ended three months ended January 29, January 30, January 29, January 30, 2011 2010 2011 2010 Net earnings $ 87,021 $ 67,236 $ 11,401 $ 14,088 Other comprehensive income: Net unrealized gain on available-for- sale financial assets arising during the period (net of tax of $427 for the year ended and $33 for the three months ended January 29, 2011; $960 for the year ended and $411 for the three months ended January 30, 2010) 2,866 5,991 223 2,557 Reclassification of losses on available-for- sale financial assets to net earnings (net of tax of $14 for the year ended and $6 for the three months ended January 29, 2011; $103 for the year ended and $95 for the three months ended January 30, 2010) 95 691 95 638 ------------ ------------ ------------ ------------ 2,961 6,682 318 3,195 ------------ ------------ ------------ ------------ Comprehensive income $ 89,982 $ 73,918 $ 11,719 $ 17,283 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ >>BALANCE SHEETS (Unaudited)(in thousands) << 2011 2010 ASSETS CURRENT ASSETS Cash and cash equivalents $ 230,034 $ 228,577 Marketable securities 70,413 48,026 Accounts receivable 2,866 2,926 Inventories 73,201 63,127 Prepaid expenses 13,258 11,873 Future income taxes 2,001 2,395 ------------ ------------ Total Current Assets 391,773 356,924 CAPITAL ASSETS Property and equipment 194,612 210,612 Intangibles 13,841 9,964 ------------ ------------ Total Capital Assets 208,453 220,576 GOODWILL 42,426 42,426 FUTURE INCOME TAXES 14,972 11,466 ------------ ------------ $ 657,624 $ 631,392 ------------ ------------ ------------ ------------ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued items $ 88,372 $ 77,766 Income taxes payable 5,998 4,677 Current portion of long-term debt 1,384 1,300 ------------ ------------ Total Current Liabilities 95,754 83,743 DEFERRED LEASE CREDITS 19,011 20,609 LONG-TERM DEBT 10,047 11,431 ACCRUED PENSION LIABILITY 9,112 5,443 SHAREHOLDERS' EQUITY Share capital 29,614 25,888 Contributed surplus 6,266 5,164 Retained earnings 486,367 480,622 Accumulated other comprehensive income (loss) 1,453 (1,508) ------------ ------------ 487,820 479,114 ------------ ------------ Total Shareholders' Equity 523,700 510,166 ------------ ------------ $ 657,624 $ 631,392 ------------ ------------ ------------ ------------ >>STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)(in thousands) << For the For the twelve months ended three months ended January 29, January 30, January 29, January 30, 2011 2010 2011 2010 SHARE CAPITAL Balance, beginning of the period $ 25,888 $ 23,830 $ 27,985 $ 25,370 Cash consideration on exercise of stock options 3,569 2,614 1,296 710 Ascribed value credited to share capital from exercise of stock options 888 655 333 22 Cancellation of shares pursuant to stock repurchase program (731) (1,211) - (214) ------------ ------------ ------------ ------------ Balance, end of the period 29,614 25,888 29,614 25,888 ------------ ------------ ------------ ------------ CONTRIBUTED SURPLUS Balance, beginning of the period 5,164 4,538 6,134 4,715 Stock option compensation costs 1,990 1,281 465 471 Ascribed value credited to share capital from exercise of stock options (888) (655) (333) (22) ------------ ------------ ------------ ------------ Balance, end of the period 6,266 5,164 6,266 5,164 ------------ ------------ ------------ ------------ RETAINED EARNINGS Balance, beginning of the period 480,622 502,361 488,206 486,920 Net earnings 87,021 67,236 11,401 14,088 Dividends (51,895) (49,351) (13,240) (12,250) Premium on repurchase of Class A non- voting shares (29,381) (39,624) - (8,136) ------------ ------------ ------------ ------------ Balance, end of the period 486,367 480,622 486,367 480,622 ------------ ------------ ------------ ------------ ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Balance, beginning of the period (1,508) (8,190) 1,135 (4,703) Net unrealized gain on available-for- sale financial assets arising during the period (net of tax of $427 for the year ended and $33 for the three months ended January 29, 2011; $960 for the year ended and $411 for the three months ended January 30, 2010) 2,866 5,991 223 2,557 Reclassification of losses on available-for- sale financial assets to net earnings (net of tax of $14 for the year ended and $6 for the three months ended January 29, 2011; $103 for the year ended and $95 for the three months ended January 30, 2010) 95 691 95 638 ------------ ------------ ------------ ------------ Balance, end of the period 1,453 (1,508) 1,453 (1,508) ------------ ------------ ------------ ------------ Total Shareholders' Equity $ 523,700 $ 510,166 $ 523,700 $ 510,166 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ >>STATEMENTS OF CASH FLOWS (Unaudited)(in thousands) << For the For the twelve months ended three months ended January 29, January 30, January 29, January 30, 2011 2010 2011 2010 CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES Net earnings $ 87,021 $ 67,236 $ 11,401 $ 14,088 Adjustments for: Depreciation and amorti- zation 60,456 60,619 15,381 15,438 Future income taxes (3,553) (2,926) (937) (503) Stock-based compensation 1,990 1,281 465 471 Amortization of deferred lease credits (4,956) (5,254) (1,225) (1,384) Deferred lease credits 3,358 3,738 645 426 Pension contribution (629) (612) (164) (158) Pension expense 4,298 2,137 2,885 787 Loss on sale of marketable securities 109 794 109 733 Foreign exchange (gain) loss (31) 1,382 (389) 660 Changes in non- cash working capital relating to operations (883) 17,744 20,085 33,779 ------------ ------------ ------------ ------------ 147,180 146,139 48,256 64,337 CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES Purchases of marketable securities (20,803) (12,951) (20,521) (11,108) Proceeds on sale of marketable securities 1,709 4,694 1,709 3,304 Additions to capital assets (46,922) (33,185) (6,465) (5,374) ------------ ------------ ------------ ------------ (66,016) (41,442) (25,277) (13,178) CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES Dividends paid (51,895) (49,351) (13,240) (12,250) Purchase of Class A non- voting shares for cancellation (30,112) (40,835) - (8,350) Repayment of long-term debt (1,300) (1,220) (334) (313) Proceeds from exercise of stock options 3,569 2,614 1,296 710 ------------ ------------ ------------ ------------ (79,738) (88,792) (12,278) (20,203) FOREIGN EXCHANGE GAIN (LOSS) ON CASH HELD IN FOREIGN CURRENCY 31 (1,382) 389 (660) ------------ ------------ ------------ ------------ NET INCREASE IN CASH AND CASH EQUIVALENTS 1,457 14,523 11,090 30,296 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 228,577 214,054 218,944 198,281 ------------ ------------ ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 230,034 $ 228,577 $ 230,034 $ 228,577 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ >>For further information: Jeremy H. Reitman, Chairman and Chief Executive Officer, (514) 385-2630, Corporate Website: www.reitmans.ca