Reitmans (Canada) Limited Announces Year-End ResultsMar 30, 2011 MONTREAL, 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 Measures In 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:
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(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
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EBITDA $ 182,604 $ 158,488 $ 31,582 $ 37,317
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Forward-Looking Statements
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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.
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Montreal, March 30, 2011
Jeremy H. Reitman
Chairman and Chief Executive Officer
Telephone: (514) 385-2630
Corporate Website: www.reitmans.ca
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STATEMENTS OF EARNINGS (Unaudited) (in thousands except per share amounts)
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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
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STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands)
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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
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
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BALANCE SHEETS (Unaudited) (in thousands)
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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
------------ ------------
------------ ------------
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STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (in thousands)
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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
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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
------------ ------------ ------------ ------------
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STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
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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
------------ ------------ ------------ ------------
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For further information: Jeremy H. Reitman, Chairman and Chief Executive Officer, (514) 385-2630, Corporate Website: www.reitmans.ca |