Leon's Furniture Limited - 2009 Fourth Quarter
TORONTO, Feb. 17 /CNW/ - Leon's Furniture Limited is pleased to announce its results for the fourth quarter and full year 2009. For the three months ended December 31, 2009, total Leon's sales were $255,665,000 including $57,679,000 of franchise sales ($269,891,000 including $63,803,000 of franchise sales in 2008), a decrease of 5.3%. Same store corporate sales were down 4.5% from the prior year fourth quarter. Despite this sales decrease, net income was $24,030,000, $0.34 per common share ($23,205,000, $0.33 per common share in 2008), an increase of 3.0% per share.
Although sales were down in the fourth quarter 2009 compared to the prior year, we are very pleased with the strong profit results this quarter. We thank our Associates for all their efforts this year in improving our productivity. Working as a team, we were able to put in place stronger controls which resulted in a reduction of overall expenditures. What makes all of this extra special is that it was accomplished in a year in which we celebrated our Company's 100th Anniversary. Once again, we thank all our Associates across Canada for their hard work and dedication in helping to achieve these goals.
For the year ended December 31, 2009, total Leon's sales were $897,470,000 including $194,290,000 franchise sales ($950,224,000 including $209,848,000 franchise sales in 2008), a decrease of 5.6%. Net income was $56,864,000, $0.80 per common share ($63,390.000, $0.90 per common share in 2008), a decrease of 11.1% per share. Same store corporate sales were down 5.4% from the prior year.
During 2009, the Company continued its renovation and expansion program. In the spring of 2009, a major renovation was completed in our warehouse and showroom store in Laval, Quebec. That was followed by the opening of our first downtown Toronto, Ontario showroom store known as the "Roundhouse" in the summer of 2009. Renovations were also completed in the third quarter of 2009 at our Barrie and Whitby, Ontario stores. Construction will commence shortly on two new superstores in Thunder Bay, Ontario (75,000 sq ft) and in Regina, Saskatchewan (85,000 sq ft).
The Directors are pleased to declare a quarterly dividend of 7 cents per common share, payable on April 5, 2010 to the shareholders of record at the close of business on March 5, 2010. Dividends paid by Leon's Furniture Limited are "eligible dividends" pursuant to the changes to the Income Tax Act under Bill C-28, Canada.
The 2009 Annual Report will be mailed in early April to shareholders of record on March 24, 2010. The Annual Meeting of Shareholders will take place on May 12, 2010.
EARNINGS PER SHARE FOR EACH QUARTER ----------------------------------- MARCH 31 JUNE 30 SEPT. 30 DEC. 31 YEAR -------- ------- -------- ------- ---- TOTAL ----- 2009 - Basic 12 cents 12 cents 22 cents 34 cents $0.80 - Fully Diluted 12 cents 12 cents 21 cents 33 cents $0.78 2008 - Basic 16 cents 16 cents 25 cents 33 cents $0.90 - Fully Diluted 15 cents 16 cents 24 cents 32 cents $0.87 2007 - Basic 15 cents 14 cents 23 cents 31 cents $0.83 - Fully Diluted 15 cents 13 cents 22 cents 30 cents $0.80 LEON'S FURNITURE LIMITED/MEUBLES LEON Ltèe Mark J. Leon Chairman of the Board Leon's Furniture Limited-Meubles Leon Ltee Incorporated under the laws of Ontario CONSOLIDATED BALANCE SHEETS (UNAUDITED) As at As at December 31 December 31 ($ in thousands) 2009 2008 ------------------------------------------------------------------------- ASSETS Current Cash and cash equivalents 58,301 39,483 Marketable securities 94,337 83,194 Restricted marketable securities 18,088 16,598 Accounts receivable 31,501 30,291 Income taxes recoverable - 2,037 Inventory 83,957 92,904 Future tax assets 1,133 270 ------------------------------------------------------------------------- Total current assets 287,317 264,777 Prepaid expenses 1,560 1,490 Goodwill 11,282 11,282 Intangibles 5,334 5,401 Other receivables - 419 Future tax assets 11,465 10,752 Property, plant & equipment net 212,198 219,287 ------------------------------------------------------------------------- 529,156 513,408 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued liabilities 83,880 95,247 Income taxes payable 1,958 - Customers' deposits 15,632 14,119 Dividends payable 4,938 4,952 Deferred warranty plan revenue 16,150 15,267 ------------------------------------------------------------------------- Total current liabilities 122,558 129,585 Deferred warranty plan revenue 22,248 21,712 Redeemable share liability 383 285 Future tax liabilities 8,829 8,468 ------------------------------------------------------------------------- Total liabilities 154,018 160,050 ------------------------------------------------------------------------- Shareholders' equity Common shares 17,704 16,493 Retained earnings 357,576 338,960 Accumulated other comprehensive income (142) (2,095) ------------------------------------------------------------------------- Total shareholders' equity 375,138 353,358 ------------------------------------------------------------------------- 529,156 513,408 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Leon's Furniture Limited-Meubles Leon Ltee CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED) Period ended December 31st ($ in thousands) 3 months ended 12 months ended 2009 2008 2009 2008 Sales 197,986 206,088 703,180 740,376 Cost of sales 111,735 116,866 419,819 440,360 ------------------------------------------------------------------------- Gross profit 86,251 89,222 283,361 300,016 ------------------------------------------------------------------------- Operating expenses (income) Salaries and commissions 26,166 28,882 103,977 112,270 Advertising 9,140 10,452 34,732 33,752 Rent and property taxes 3,183 2,864 12,165 11,268 Amortization 4,154 4,474 16,562 16,253 Employee profit-sharing plan 1,350 1,350 4,177 4,321 Other operating expenses 11,553 12,177 42,359 46,447 Interest income (796) (1,302) (3,165) (4,836) Other income (2,871) (3,191) (9,980) (13,595) ------------------------------------------------------------------------- 51,879 55,706 200,827 205,880 ------------------------------------------------------------------------- Income before income taxes 34,372 33,516 82,534 94,136 Provision for income taxes 10,342 10,311 25,670 30,746 ------------------------------------------------------------------------- Net income for the period 24,030 23,205 56,864 63,390 Retained earnings, beginning of the period 355,519 320,711 338,960 307,068 Dividends declared (19,094) (4,952) (33,951) (26,873) Excess of cost of share repurchase over carrying value of related shares (2,879) (4) (4,297) (4,625) ------------------------------------------------------------------------- Retained earnings, end of period 357,576 338,960 357,576 338,960 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of common shares outstanding ('000's) Basic 70,682 70,730 70,714 70,729 Diluted 73,399 72,629 73,321 72,818 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per share Basic $0.34 $0.33 $0.80 $0.90 Diluted $0.33 $0.32 $0.78 $0.87 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Dividends declared per share Common $0.27 $0.07 $0.48 $0.38 Convertible, non-voting 0.14 0.14 0.14 0.14 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Leon's Furniture Limited-Meubles Leon Ltee CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) Three month period ended December 31st ($ in thousands) Net of tax 2009 Tax effect 2009 Net income for the period 24,030 - 24,030 Other comprehensive income, net of tax Unrealized gains on available-for-sale financial assets arising during the period 268 45 223 Reclassification adjustment for net gains and (losses) included in net income (247) (39) (208) Change in unrealized gains on available-for-sale financial assets arising during the period 21 6 15 ------------------------------ Comprehensive income for the period 24,051 6 24,045 ------------------------------ ------------------------------ Net of tax 2008 Tax effect 2008 Net income for the period 23,205 - 23,205 Other comprehensive income, net of tax Unrealized losses on available-for-sale financial assets arising during the period (424) (73) (351) Reclassification adjustment for net gains and (losses) included in net income 16 3 13 Change in unrealized losses on available-for-sale financial assets arising during the period (408) (70) (338) ------------------------------ Comprehensive income for the period 22,797 (70) 22,867 ------------------------------ ------------------------------ Twelve month period ended December 31st ($ in thousands) Net of tax 2009 Tax effect 2009 Net income for the period 56,864 56,864 Other comprehensive income, net of tax Unrealized gains on available-for-sale financial assets arising during the period 2,578 430 2,148 Reclassification adjustment for net gains and (losses) included in net income (232) (37) (195) Change in unrealized gains on available-for-sale financial assets arising during the period 2,346 393 1,953 ------------------------------ Comprehensive income for the period 59,210 393 58,817 ------------------------------ ------------------------------ Net of tax 2008 Tax effect 2008 Net income for the period 63,390 - 63,390 Other comprehensive income, net of tax Unrealized losses on available-for-sale financial assets arising during the period (2,671) (454) (2,217) Reclassification adjustment for net gains and (losses) included in net income (957) (162) (795) Change in unrealized losses on available-for-sale financial assets arising during the period (3,628) (616) (3,012) ------------------------------ Comprehensive income for the period 59,762 (616) 60,378 ------------------------------ ------------------------------ Leon's Furniture Limited-Meubles Leon Ltee CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Period ended December 31st ($ in thousands) 3 months ended 12 months ended 2009 2008 2009 2008 ------------------------------------------------------------------------- OPERATING ACTIVITIES Net income for the period 24,030 23,201 56,864 63,390 Add (deduct) items not involving a current cash payment Amortization of property, plant & equipment 3,967 4,162 15,810 15,472 Amortization of intangible assets 187 312 752 781 Amortization of deferred warranty revenue (3,951) (3,714) (15,900) (14,541) Loss (gain) on sale of marketable securities (229) 65 275 (411) Future tax expense (2,087) 1,190 (1,608) 1,350 Gain on sale of property, plant & equipment 1 - (32) (1,665) Cash received on warranty sales 5,009 5,155 17,319 17,834 ------------------------------------------------------------------------- 26,927 30,371 73,480 82,210 Net change in non-cash working capital balances related to operations 21,517 (14,012) 4,035 (12,482) ------------------------------------------------------------------------- Cash provided by operating activities 48,444 16,359 77,515 69,728 ------------------------------------------------------------------------- INVESTING ACTIVITIES Purchase of property, plant & equipment (1,480) (7,161) (10,545) (22,587) Purchase of intangibles (330) - (685) (81) Proceeds on sale of property, plant & equipment - - 48 2,775 Purchase of marketable securities 80,882 (124,737) (285,311) (287,913) Proceeds on sale of marketable securities (92,262) 138,776 274,749 301,482 Issuance of series 2009 redeemable share liability - - 10,683 - Decrease(increase) in employee share purchase loans 217 670 (9,154) 2,626 Purchase of Appliance Canada Ltd. - (1,982) - (20,704) ------------------------------------------------------------------------- Cash used in investing activities (12,973) 5,566 (20,215) (24,402) ------------------------------------------------------------------------- FINANCING ACTIVITIES Dividends paid (19,111) (4,943) (33,965) (26,870) Repurchase of common shares (3,023) - (4,517) (4,672) ------------------------------------------------------------------------- Cash used in financing activities (22,134) (4,943) (38,482) (31,542) ------------------------------------------------------------------------- Net increase in cash and cash equivalents during the period 13,337 16,982 18,818 13,784 Cash and cash equivalents, beginning of period 44,964 22,501 39,483 25,699 ------------------------------------------------------------------------- Cash and cash equivalents, end of period 58,301 39,483 58,301 39,483 ------------------------------------------------------------------------- -------------------------------------------------------------------------
For further information: Dominic Scarangella, (416) 243-4073
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