MONTREAL, April 8 /CNW Telbec/ - Le Château Inc. (TSX: CTU.A) today reported that sales for the 52-week period ended January 30, 2010 decreased 6.9% to $321.7 million from $345.6 million for the 53-week period ended January 31, 2009. On a comparable week basis (52-week period ended January 30, 2010 versus the 52-week period ended January 31, 2009), total sales decreased 5.8% while comparable store sales decreased by 8.5%.
Net earnings for the 52-week period ended January 30, 2010 were $29.8 million compared to $38.6 million for the 53-week period ended January 31, 2009. Earnings per share (diluted) for the year were $1.22 per share versus $1.55 per share the previous year. Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the year amounted to $61.7 million or 19.2% of sales, compared to $74.5 million or 21.6% of sales last year.
During the year, the Company opened 12 stores, closed 3 and expanded 12 existing locations, resulting in the addition of 98,000 square feet or 9.4% to the Le Château network, bringing the total floor space at end of period to 1,146,000 square feet.
Fourth Quarter Results
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Net earnings for the 13-week period ended January 30, 2010 were $11.4 million or $0.46 per share (diluted) compared to $13.2 million or $0.54 per share for the 14-week period ended January 31, 2009. EBITDA for the fourth quarter amounted to $20.7 million or 22.2% of sales, compared to $23.9 million or 23.3% of sales last year.
Sales decreased 9.2% to $93.2 million for the 13-week period ended January 30, 2010, compared to $102.6 million for the 14-week period ended January 31, 2009. On a comparable week basis (13-week period ended January 30, 2010 versus the 13-week period ended January 31, 2009), total sales decreased 3.5% while comparable store sales decreased by 6.7%.
Dividend declaration
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The Board of Directors has declared a quarterly dividend (constituting eligible dividends for income tax purposes) of $0.175 per Class A subordinate voting share and Class B voting share. This is the 66th consecutive dividend declared by Le Château, and is payable on May 18, 2010 to the shareholders of record at the close of business on May 4, 2010.
Profile
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Le Château is a leading Canadian brand in specialty retailing, offering a broad array of contemporary fashion apparel, accessories and footwear for style-conscious women and men. The Le Château brand is synonymous with ageless fashion at accessible prices and is sold exclusively through the Company's 231 retail locations, of which 227 are located in Canada and 4 in the New York City area. The Company's outlets are primarily found in major urban shopping malls, complemented with high pedestrian-traffic, street-front locations. In addition, the Company has 9 stores under license in the Middle East.
The Company's 50-year tradition of vertical integration, a design and manufacturing approach to retailing, makes it unique among Canadian fashion merchants.
Non-GAAP Measures
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In addition to discussing earnings measures in accordance with Canadian generally accepted accounting principles ("GAAP"), this press release provides earnings before interest, income taxes, depreciation and amortization ("EBITDA") as a supplementary earnings measure. Depreciation and amortization include the write-off of fixed assets. EBITDA is provided to assist readers in determining the ability of the Company to generate cash from operations and to cover financial charges. It is also widely used for valuation purposes for public companies in our industry.
The Company also discloses comparable store sales which are defined as sales generated by stores that have been opened for at least one year.
The above measures do not have a standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies.
Forward-Looking Statements
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This news release may contain forward-looking statements relating to the Company and/or the environment in which it operates that are based on the Company's expectations, estimates and forecasts. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond the Company's control. A number of factors may cause actual outcomes and results to differ materially from those expressed. These factors include those set forth in other public filings of the Company. Therefore, readers should not place undue reliance on these forward-looking statements. In addition, these forward-looking statements speak only as of the date made and the Company disavows any intention or obligation to update or revise any such statements as a result of any event, circumstance or otherwise except to the extent required under applicable securities law.
Factors which could cause actual results or events to differ materially from current expectations include, among other things: the ability of the Company to successfully implement its business initiatives and whether such business initiatives will yield the expected benefits; competitive conditions in the businesses in which the Company participates; changes in consumer spending; general economic conditions and normal business uncertainty; customer preferences towards product offerings; seasonal weather patterns; fluctuations in foreign currency exchange rates; changes in the Company's relationship with its suppliers; interest rate fluctuations and other changes in borrowing costs; and changes in laws, rules and regulations applicable to the Company.
The Company's full financial statements and Management's Discussion and Analysis for the year ended January 30, 2010 are available online at www.sedar.com
CONSOLIDATED BALANCE SHEETS
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As at As at
(Unaudited) January 30, January 31,
(In thousands of dollars) 2010 2009
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ASSETS
Current
Cash and cash equivalents $ 23,411 $ 10,034
Short-term investments 45,000 56,643
Accounts receivable 2,454 4,791
Income taxes receivable 1,602 -
Derivative financial instruments 59 1,530
Inventories 61,234 54,012
Prepaid expenses 1,308 778
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Total current assets 135,068 127,788
Long-term investments 10,000 -
Fixed assets 88,437 86,156
Intangible assets 2,527 2,487
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$ 236,032 $ 216,431
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 27,151 $ 25,403
Dividend payable 4,293 4,239
Income taxes payable - 2,285
Current portion of capital lease obligations - 1,008
Current portion of long-term debt 11,752 8,746
Future income taxes 19 487
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Total current liabilities 43,215 42,168
Long-term debt 21,464 18,982
Future income taxes 3,910 3,176
Deferred lease inducements 10,222 9,691
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Total liabilities 78,811 74,017
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Shareholders' equity
Capital stock 34,335 30,997
Contributed surplus 2,159 2,460
Retained earnings 120,687 107,914
Accumulated other comprehensive income 40 1,043
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Total shareholders' equity 157,221 142,414
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$ 236,032 $ 216,431
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CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
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For the three months ended For the year ended
(Unaudited) January 30, January 31, January 30, January 31,
(In thousands 2010 2009 2010 2009
of dollars) (13 weeks) (14 weeks) (52 weeks) (53 weeks)
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Balance, beginning of
period $ 113,592 $ 100,020 $ 107,914 $ 99,884
Excess of cost over
stated value of
Class A subordinate
voting shares
purchased and
cancelled - (1,034) - (8,989)
Net earnings 11,388 13,167 29,837 38,621
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124,980 112,153 137,751 129,516
Dividends declared 4,293 4,239 17,064 21,602
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Balance, end of
period $ 120,687 $ 107,914 $ 120,687 $ 107,914
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CONSOLIDATED STATEMENTS OF EARNINGS
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(Unaudited) For the three months ended For the year ended
(In thousands of January 30, January 31, January 30, January 31,
dollars, except 2010 2009 2010 2009
per share data) (13 weeks) (14 weeks) (52 weeks) (53 weeks)
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Sales $ 93,216 $ 102,555 $ 321,733 $ 345,614
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Cost of sales and
expenses
Cost of sales and
selling, general and
administrative 72,553 78,648 260,010 271,119
Depreciation and
amortization 4,173 4,233 17,216 16,705
Write-off of fixed
assets 371 401 538 585
Interest on long-term
debt and capital
lease obligations 502 426 1,503 1,798
Interest income (175) (505) (780) (2,299)
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77,424 83,203 278,487 287,908
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Earnings before income
taxes 15,792 19,352 43,246 57,706
Provision for income
taxes 4,404 6,185 13,409 19,085
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Net earnings $ 11,388 $ 13,167 $ 29,837 $ 38,621
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Net earnings per share
Basic $ 0.47 $ 0.54 $ 1.23 $ 1.56
Diluted 0.46 0.54 1.22 1.55
Weighted average number
of shares outstanding
('000) 24,458 24,355 24,339 24,796
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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For the three months ended For the year ended
(Unaudited) January 30, January 31, January 30, January 31,
(In thousands 2010 2009 2010 2009
of dollars) (13 weeks) (14 weeks) (52 weeks) (53 weeks)
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Net earnings $ 11,388 $ 13,167 $ 29,837 $ 38,621
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Other comprehensive
income
Change in fair value
of forward exchange
contracts (27) (194) (1,401) 5,260
Realized forward
exchange contracts
reclassified
to net earnings (168) (3,336) (70) (3,980)
Income tax recovery
(expense) 62 1,122 468 (403)
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(133) (2,408) (1,003) 877
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Comprehensive income $ 11,255 $ 10,759 $ 28,834 $ 39,498
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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For the three months ended For the year ended
(Unaudited) January 30, January 31, January 30, January 31,
(In thousands 2010 2009 2010 2009
of dollars) (13 weeks) (14 weeks) (52 weeks) (53 weeks)
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OPERATING ACTIVITIES
Net earnings $ 11,388 $ 13,167 $ 29,837 $ 38,621
Adjustments to
determine net cash
from operating
activities
Depreciation and
amortization 4,173 4,233 17,216 16,705
Write-off of fixed
assets 371 401 538 585
Amortization of
deferred lease
inducements (419) (358) (1,540) (1,414)
Stock-based
compensation 18 190 341 836
Future income taxes 734 285 734 (642)
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16,265 17,918 47,126 54,691
Net change in non-cash
working capital items
related to operations 7,756 (963) (7,554) (15,402)
Deferred lease
inducements 150 733 2,071 2,532
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Cash flows related to
operating activities 24,171 17,688 41,643 41,821
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FINANCING ACTIVITIES
Repayment of capital
lease obligations - (435) (1,008) (1,384)
Proceeds of long-term
debt - - 15,000 18,000
Repayment of long-term
debt (2,647) (2,432) (9,512) (10,074)
Issue of capital stock
upon exercise of
options 1,318 - 2,696 614
Purchase of Class A
subordinate voting
shares for
cancellation - (1,303) - (10,537)
Dividends paid (4,269) (4,278) (17,010) (20,496)
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Cash flows related to
financing activities (5,598) (8,448) (9,834) (23,877)
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INVESTING ACTIVITIES
Decrease (increase) in
short-term investments (15,000) - 11,643 9,711
Increase in long-term
investments - - (10,000) -
Additions to fixed
assets and intangible
assets (3,672) (1,611) (20,075) (21,467)
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Cash flows related to
investing activities (18,672) (1,611) (18,432) (11,756)
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Increase (decrease) in
cash and cash
equivalents (99) 7,629 13,377 6,188
Cash and cash
equivalents, beginning
of period 23,510 2,405 10,034 3,846
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Cash and cash
equivalents, end of
period $ 23,411 $ 10,034 $ 23,411 $ 10,034
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Supplementary
information:
Interest paid during
the period $ 502 $ 426 $ 1,503 $ 1,798
Income taxes paid
during the period (90) 4,206 15,929 22,009
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SEGMENTED INFORMATION
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For the three months ended For the year ended
(Unaudited) January 30, January 31, January 30, January 31,
(In thousands 2010 2009 2010 2009
of dollars) (13 weeks) (14 weeks) (52 weeks) (53 weeks)
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Sales by country
Canada $ 92,218 $ 100,982 $ 317,161 $ 339,660
United States 998 1,573 4,572 5,954
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$ 93,216 $ 102,555 $ 321,733 $ 345,614
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Sales by division
Ladies' Clothing $ 50,468 $ 53,549 $ 179,158 $ 190,676
Men's Clothing 16,179 18,462 53,686 57,847
Footwear 9,393 10,719 35,160 38,562
Accessories 17,176 19,825 53,729 58,529
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$ 93,216 $ 102,555 $ 321,733 $ 345,614
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Net earnings (loss)
Canada $ 11,810 $ 13,523 $ 31,395 $ 39,259
United States (422) (356) (1,558) (638)
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$ 11,388 $ 13,167 $ 29,837 $ 38,621
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Fixed assets and
intangible assets
Canada $ 90,296 $ 87,667 $ 90,296 $ 87,667
United States 668 976 668 976
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$ 90,964 $ 88,643 $ 90,964 $ 88,643
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For further information: Emilia Di Raddo, CA, President, (514) 738-7000; Johnny Del Ciancio, CA, Vice-President, Finance, (514) 738-7000; Maison Brison: Pierre Boucher, (514) 731-0000; Source: Le Château Inc.
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