The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

Reitmans (Canada) Limited announces its results for the three months ended April 28, 2012

Tuesday, May 29, 2012

Reitmans (Canada) Limited announces its results for the three months ended April 28, 201217:20 EDT Tuesday, May 29, 2012MONTREAL, May 29, 2012 /CNW Telbec/ - Sales for the first quarter ended April 28, 2012 decreased 1% to $217,094,000 as compared with $219,296,000 for the first quarter ended April 30, 2011. Same store sales1 decreased 0.7%.  The first quarter ended April 28, 2012 resulted in weaker sales attributable to a difficult retail environment marked by increased promotional activity. Other factors included the impact of higher gasoline and food prices reducing consumer disposable income for apparel.  The Company's gross margin for the first quarter ended April 28, 2012 decreased to 64.6% from 65.8% for the first quarter ended April 30, 2011, which was primarily attributable to the fluctuation in the US dollar.  In the first quarter ended April 28, 2012, adjusted EBITDA1 decreased by $1,829,000 or 12.7% to $12,540,000 as compared with $14,369,000 for the first quarter ended April 30, 2011.  The Company recorded a net loss for the first quarter ended April 28, 2012 of $53,000 ($0.00 diluted loss per share) as compared with net earnings of $624,000 ($0.01 diluted earnings per share) for the first quarter ended April 30, 2011.During the quarter, the Company opened 16 new stores, comprised of 4 Reitmans, 4 Smart Set, 1 RW & CO., 1 Thyme Maternity, 5 Penningtons and 1 Addition Elle.  The Company closed 33 stores, comprised of 2 Reitmans, 1 Smart Set, 1 RW&CO., 3 Thyme Maternity, 3 Penningtons, 3 Addition Elle and 20 Cassis.  Accordingly, at April 28, 2012, there were 925 stores in operation, consisting of 364 Reitmans, 153 Smart Set, 66 RW & CO., 74 Thyme Maternity, 154 Penningtons and 114 Addition Elle, as compared with a total of 965 stores as at April 30, 2011.Sales for the month of May (the four weeks ended May 26, 2012) decreased 1.7% with same store sales1 increasing 0.8%.At the Board of Directors meeting held on May 29, 2012, 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 July 26, 2012 to shareholders of record on July 12, 2012.1Non-GAAP Financial MeasuresIn addition to discussing earnings in accordance with IFRS, this press release provides adjusted EBITDA as a supplementary earnings measure, which is defined as earnings before income taxes, dividend income, interest income, realized gain on disposal of available-for-sale financial assets, impairment losses on available-for-sale financial assets, interest expense, depreciation, amortization and net impairment losses related to property and equipment. 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 IFRS and may not be comparable to similar measures presented by other companies.  Accordingly, they should not be considered in isolation.The following table reconciles adjusted EBITDA to (loss) earnings before income taxes for the three months ended April 28, 2012 and April 30, 2011:  (Unaudited)For the threemonths ended April 28, 2012April 30, 2011(Loss) earnings before income taxes      $ (210,000)      $ 869,000Dividend income            (874,000)            (880,000)Interest income            (330,000)            (284,000)Interest expense            157,000            179,000Depreciation and amortization            13,797,000 14,485,000ADJUSTED EBITDA      $ 12,540,000 $ 14,369,000Forward-Looking StatementsAll 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 unaudited condensed interim financial statements including notes and Management's Discussion and Analysis for the first quarter ended April 28, 2012 are available online at www.sedar.com.Montreal, May 29, 2012Jeremy H. ReitmanChairman and Chief Executive OfficerTelephone:  (514) 385-2630REITMANS (CANADA) LIMITEDCONDENSED STATEMENTS OF EARNINGS(Unaudited)(in thousands of Canadian dollars except per share amounts)    For the three months ended April 28, 2012April 30, 2011     Sales$217,094$219,296Cost of goods sold 76,778 74,941Gross profit 140,316 144,355Selling and distribution expenses 129,468 129,225Administrative expenses 10,958 10,112Results from operating activities  (110) 5,018     Finance income 1,204 1,164Finance costs 1,304 5,313(Loss) earnings before income taxes (210) 869     Income tax (recovery) expense (157) 245     Net (loss) earnings$(53)$624     Earnings per share:     Basic$0.00$0.01 Diluted  0.00  0.01      REITMANS (CANADA) LIMITEDCONDENSED STATEMENTS OF COMPREHENSIVE INCOME(Unaudited)(in thousands of Canadian dollars)   For the threemonthsended April 28, 2012April 30, 2011     Net (loss) earnings$ (53)$624Other comprehensive income:     Net change in fair value of available-for-sale financial assets(net of tax of $29; 2011 - $60) (197) 401     Total comprehensive (loss) income$(250)$1,025     REITMANS (CANADA) LIMITEDCONDENSED BALANCE SHEETS(Unaudited)(in thousands of Canadian dollars)   April 28, 2012April 30, 2011January 28, 2012ASSETS      CURRENT ASSETS       Cash and cash equivalents$138,187$176,871$196,835 Marketable securities 71,321 70,979 71,442 Trade and other receivables 3,783 4,214 3,033 Derivative financial asset 74 - 751 Income taxes recoverable 15,507 10,846 4,735 Inventories 102,625 99,066 78,285 Prepaid expenses 12,330 12,715 11,902  Total Current Assets 343,827 374,691 366,983       NON-CURRENT ASSETS       Property and equipment 191,577 189,487 184,221 Intangible assets 17,329 14,012 17,057 Goodwill 42,426 42,426 42,426 Deferred income taxes 23,198 19,438 23,174  Total Non-Current Assets 274,530 265,363 266,878       TOTAL ASSETS$ 618,357$ 640,054$ 633,861       LIABILITIES AND SHAREHOLDERS' EQUITY      CURRENT LIABILITIES       Trade and other payables$71,616$67,940$63,875 Derivative financial liability 914 - 1,505 Deferred revenue 13,557 13,870 22,278 Current portion of long-term debt 1,497 1,406 1,474  Total Current Liabilities 87,584 83,216 89,132       NON-CURRENT LIABILITIES       Other payables 11,095 10,393 11,110 Deferred revenue - 2,395  - Deferred lease credits 16,768 18,112 17,317 Long-term debt 8,191 9,688 8,573 Pension liability 15,044 13,876 14,877  Total Non-Current Liabilities 51,098 54,464 51,877       SHAREHOLDERS' EQUITY       Share capital 39,890 31,426 39,890 Contributed surplus 5,348 6,291 5,158 Retained earnings 425,897 456,113 439,067 Accumulated other comprehensive income 8,540 8,544 8,737  Total Shareholders' Equity 479,675 502,374 492,852       TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$618,357$640,054$633,861       REITMANS (CANADA) LIMITEDCONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY(Unaudited)(in thousands of Canadian dollars)  Share CapitalContributed SurplusRetained EarningsAccumulated Other Comprehensive IncomeTotal Shareholders' EquityBalance as at January 29, 2012 $39,890$5,158   $  439,067$8,737$492,852            Share-based compensation costs  - 190 - - 190Net loss  - - (53) - (53)Dividends  - - (13,117) - (13,117)Net change in fair value of available-for-sale financial assets (net of tax of $29)  - - - (197) (197)            Balance as at April 28, 2012 $39,890$ 5,348$ 425,897$8,540$479,675                                                Balance as at January 30, 2011 $29,614$ 6,266$ 468,777$8,143$512,800            Cash consideration on exercise of share options  1,443 - - - 1,443Ascribed value credited to share capital from exercise of share options  369 (369) - - -Share-based compensation costs  - 394 - - 394Net earnings  - - 624 - 624Dividends  - - (13,288) - (13,288)Net change in fair value of available-for-sale financial assets (net of tax of $60)  - - - 401 401            Balance as at April 30, 2011 $31,426$6,291$456,113$8,544$502,374           REITMANS (CANADA) LIMITEDCONDENSED STATEMENTS OF CASH FLOWS(Unaudited)(in thousands of Canadian dollars)   For the three months ended April 28, 2012April 30, 2011CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES     Net (loss) earnings$ (53)$ 624 Adjustments for:      Depreciation and amortization 13,797 14,485  Share-based compensation costs 190 394  Amortization of deferred lease credits (1,194) (1,214)  Deferred lease credits 645 315  Pension contribution (163) (129)  Pension expense 330 379  Net change in fair value of derivatives 86 -  Foreign exchange loss 623 2,931  Interest and dividend income, net (1,047) (985)  Interest paid (157) (179)  Interest received 368 322  Dividends received 868 862  Income tax (recovery) expense (157) 245  14,136 18,050 Changes in:      Trade and other receivables (782) (1,368)  Inventories (24,340) (25,865)  Prepaid expenses (428) (224)  Trade and other payables 6,546 6,143  Deferred revenue (8,721) (5,953) Cash used in operating activities (13,589) (9,217) Income taxes paid (10,610) (15,566) Net cash flows used in operating activities (24,199) (24,783)     CASH FLOWS USED IN INVESTING ACTIVITIES     Purchases of marketable securities (105) (105) Additions to property and equipment and intangible assets (20,245) (13,162) Cash flows used in investing activities (20,350) (13,267)     CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES     Dividends paid (13,117) (13,288) Repayment of long-term debt (359) (337) Proceeds from exercise of share options - 1,443 Cash flows used in financing activities (13,476) (12,182)     FOREIGN EXCHANGE LOSS ON CASH HELD IN FOREIGN CURRENCY (623) (2,931)NET DECREASE IN CASH AND CASH EQUIVALENTS (58,648) (53,163)CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD 196,835 230,034     CASH AND CASH EQUIVALENTS, END OF THE PERIOD$ 138,187$ 176,871       For further information: Jeremy H. Reitman Chairman and Chief Executive Officer Telephone:  (514) 385-2630