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Press release from CNW Group

Leon's Furniture Limited - 2011 Fourth Quarter

Thursday, February 23, 2012

Leon's Furniture Limited - 2011 Fourth Quarter13:19 EST Thursday, February 23, 2012TORONTO, Feb. 23, 2012 /CNW/ - Leon's Furniture Limited is pleased to announce its results for the full year 2011 and the fourth quarter 2011. For the year ended December 31, 2011, total Leon's sales were $879,561,000 including $196,725,000 franchise sales ($907,497,000 including $197,062,000 franchise sales in 2010), a decrease of 3.1%. Same store corporate sales were down 6.4% from the prior year. Net income was $56,666,000, $0.81 per common share ($63,284,000, $0.90 per common share in 2010), a decrease of 10% per share.For the three months ended December 31, 2011, total Leon's sales were $254,989,000 including $61,166,000 of franchise sales ($257,708,000 including $59,820,000 of franchise sales in 2010), a decrease of 1.1%. Same store corporate sales were down 7.4% from the prior year fourth quarter. Net income was $19,872,000, $0.28 per common share ($21,360,000 $0.30 per common share in 2010), a decrease of 6.7% per share.2011 proved to be another very challenging year where we saw a further weakening in our economy, a shrinking market and a very competitive retail environment. We want to thank all our associates for their efforts and dedication in helping us to mitigate the impact of these challenges on our financial results.In the third quarter of 2011, we opened a new corporate store in Guelph, Ontario. That was followed by grand openings in the fourth quarter of 2011 of three additional corporate stores in Mississauga, Ontario; Rosemère, Quebec; and Regina, Saskatchewan. As well, during the fourth quarter of 2011 new Leon's franchise locations had grand openings in Bathurst, New Brunswick; and Drummondville, Quebec.In addition to these new locations, renovations are well underway in our Sudbury and Sault Ste. Marie, Ontario corporate stores. Our Trenton, Ontario franchise recently completed a renovation of their store and a renovation and expansion will commence shortly at our Simcoe, Ontario franchise. Our Kentville franchise has recently completed construction of a new and larger replacement store in Coldbrook, Nova Scotia. Construction has also started for a brand new franchise store to replace our existing St. John, New Brunswick store.Finally, the Company has recently secured sites for four new corporate stores in: Orangeville and Brantford, Ontario; Sherbrooke, Quebec; and Rocky View County, which is just north of Calgary, Alberta. Our current plan is to open these locations during the later part of 2012 and 2013.The Directors are pleased to declare a quarterly dividend of 10¢ per common share, payable on April 5, 2012 to the shareholders of record at the close of business on March 5, 2012. Dividends paid by Leon's Furniture Limited are "eligible dividends" pursuant to the changes to the Income Tax Act under Bill C-28, Canada.EARNINGS PER SHARE FOR EACH QUARTER  MARCH 31JUNE 30SEPT. 30DEC. 31YEAR TOTAL2011--BasicFullyDiluted15¢14¢16¢15¢22¢21¢28¢27¢$0.81$0.782010--BasicFullyDiluted17¢16¢17¢16¢26¢25¢30¢29¢$0.90$0.872009--BasicFullyDiluted12¢12¢12¢12¢22¢21¢34¢33¢$0.80$0.78LEON'S FURNITURE LIMITED / MEUBLES LEON LTÉEMark J. LeonChairman of the Board   Leon's Furniture LimitedCONSOLIDATED STATEMENTS OF FINANCIAL POSITION(UNAUDITED)    As at December 31As at December 31($ in thousands)20112010   ASSETS  Current  assets  Cash and cash equivalents72,50571,589Available-for-sale financial assets 149,318140,224Trade receivables28,93728,569Income taxes receivable5,182-Inventory87,83085,423Total current assets343,772325,805Other assets1,4311,574Property, plant and equipment 214,158201,492Investment property 8,3668,417Intangible assets3,9584,902Goodwill 11,28211,282Deferred income tax assets12,37213,202Total assets595,339566,674   LIABILITIES AND SHAREHOLDERS' EQUITY  Current liabilities  Trade and other payables 75,12671,724Provisions 11,23112,341Income taxes payable-524Customers' deposits19,15717,198Dividends payable 17,4576,310Deferred warranty plan revenue16,15216,882Total current liabilities139,123124,979Deferred warranty plan revenue19,44521,392Redeemable share liability 382172Deferred income tax liabilities10,9289,845Total liabilities169,878156,388   Shareholders' equity attributable to the shareholders of the Company  Common shares 20,91819,177Retained earnings404,647390,629Accumulated other comprehensive income (104)480Total shareholders' equity425,461410,286Total liabilities and shareholder's equity595,339566,674     Leon's Furniture LimitedCONSOLIDATED INCOME STATEMENTS (UNAUDITED)  Three months ended December 31Twelve months ended December 31($ in thousands)2011201020112010     Revenue193,823197,888682,836710,435Cost of sales108,010112,130394,099412,379Gross profit85,81385,758288,737298,056Operating expenses     General and administrative expenses24,33825,47596,03898,684Sales and marketing expenses22,99322,34478,38778,221Occupancy expenses9,9287,21732,73129,551Other operating expenses2,3541,4776,2395,780 59,61356,513213,395212,236Operating profit26,20029,24575,34285,820Gain on sale of capital property---1,231Finance income1,0889913,5063,134Profit before income tax27,28830,23678,84890,185Income tax expense 7,4168,87622,18226,901Profit for the period attributable to the shareholders of the Company19,87221,36056,66663,284     Earnings per share    Basic$0.28$0.30$0.81$0.90Diluted$0.28$0.29$0.78$0.87     Dividends declared per share    Common$0.25$0.09$0.52$0.32Convertible, non-voting$0.20$0.18$0.20$0.18          Weighted average number of common shares outstanding     Basic69,824,75070,125,65769,969,41770,371,744Diluted72,152,05072,780,84972,305,42473,133,906 Leon's Furniture LimitedCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(UNAUDITED)  Three months ended December 31   Net of tax($ in thousands)2011 Tax effect 2011    Profit for the period19,872-19,872Other comprehensive income, net of tax     Unrealized gains on available-for-sale financial assets arising during the period1,060148912  Reclassification adjustment for net gains and (losses) included in profit for the period(51)(7)(44)  Change in unrealized gains on available-for-sale financial      assets arising during the period1,009141868Comprehensive income for the period attributable to the shareholders of the Company20,88114120,740       Net of tax 2010 Tax effect 2010    Profit for the period21,360-21,360Other comprehensive income, net of tax     Unrealized gains on available-for-sale financial assets arising during the period16023137  Reclassification adjustment for net gains and (losses) included in profit for the period(168)(25)(143)  Change in unrealized gains on available-for-sale financial      assets arising during the period(8)(2)(6)Comprehensive income for the period attributable to the shareholders of the Company21,352(2)21,354  Twelve months ended December 31   Net of tax($ in thousands)2011 Tax effect 2011    Profit for the period56,666-56,666Other comprehensive income, net of tax     Unrealized (losses) on available-for-sale financial assets arising during the period(621)(87)(534)  Reclassification adjustment for net gains and (losses) included in profit for the period(58)(8)(50)  Change in unrealized (losses) on available-for-sale financial      assets arising during the period(679)(95)(584)Comprehensive income for the period attributable to the shareholders of the Company55,987(95)56,082       Net of tax 2010 Tax effect 2010    Profit for the period63,284-63,284Other comprehensive income, net of tax     Unrealized gains on available-for-sale financial assets arising during the period917144773  Reclassification adjustment for net gains and (losses) included in profit for the period(178)(27)(151)  Change in unrealized gains on available-for-sale financial      assets arising during the period739117622Comprehensive income for the period attributable to the shareholders of the Company64,02311763,906      Leon's Furniture LimitedCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(UNAUDITED)     ($ in thousands)Common sharesAccumulated other comprehensive incomeRetained earningsTotal     At January 1, 201017,704(142)357,576375,138     Comprehensive income    Profit for the period——63,28463,284Change in unrealized gains on available-for-sale —622—622   financial assets arising during the period     Total comprehensive income—62263,28463,906     Transactions with shareholders    Dividends declared——(22,492)(22,492)Management share purchase plan1,768——1,768Repurchase of common shares (295)—(7,739)(8,034)Total transactions with shareholders1,473—(30,231)(28,758)     At December 31, 201019,177480390,629410,286     At January 1, 201119,177480390,629410,286     Comprehensive income    Profit for the period——56,66656,666Change in unrealized (losses) on available-for-sale —(584)——   financial assets arising during the period     Total comprehensive income—(584)56,66656,082     Transactions with shareholders    Dividends declared ——(36,371)(36,371)Management share purchase plan1,798——1,798Repurchase of common shares (57)—(6,277)(6,334)Total transactions with shareholders1,741—(42,648)(40,907)     At December 31, 201120,918(104)404,647425,461    Leon's Furniture LimitedCONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)   Twelve months ended December 31 ($ in thousands)20112010   OPERATING ACTIVITIES  Profit for the period56,66663,284Add (deduct) items not involving an outlay of cash     Depreciation of property, plant and equipment and investment properties12,70515,354   Amortization of intangible assets880802   Amortization of deferred warranty plan revenue(17,271)(16,838)   Gain on sale of property, plant and equipment(21)(1,236)   Deferred income taxes2,008295   Gain (loss) on sale of available-for-sale financial assets35(337)   Cash received on warranty plan sales14,59416,714 69,59678,038Net change in non-cash working capital balances related     to operations(4,426)1,391Cash provided by operating activities65,17079,429   INVESTING ACTIVITIES  Purchase of property, plant & equipment(24,999)(13,567)Purchase of intangible assets64(370)Proceeds on sale of property, plant & equipment392,117Purchase of available-for-sale financial assets(569,050)(524,414)Proceeds on sale of available-for-sale financial assets559,242497,691Decrease in employee share purchase loans 2,0081,556Cash used in investing activities(32,696)(36,987)   FINANCING ACTIVITIES  Dividends paid(25,224)(21,120)Repurchase of common shares (6,334)(8,034)Cash used in financing activities(31,558)(29,154)Net decrease in cash and cash equivalents     during the period91613,288Cash and cash equivalents, beginning of period71,58958,301Cash and cash equivalents,end of period72,50571,589     For further information: Dominic Scarangella, Tel: 416.243.4073