Leon's Furniture Limited - 2011 Fourth Quarter

TORONTO, 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 31	JUNE 30	SEPT. 30	DEC. 31	YEAR TOTAL
2011	- -	Basic Fully Diluted	15¢ 14¢	16¢ 15¢	22¢ 21¢	28¢ 27¢	$0.81 $0.78
2010	- -	Basic Fully Diluted	17¢ 16¢	17¢ 16¢	26¢ 25¢	30¢ 29¢	$0.90 $0.87
2009	- -	Basic Fully Diluted	12¢ 12¢	12¢ 12¢	22¢ 21¢	34¢ 33¢	$0.80 $0.78

LEON'S FURNITURE LIMITED / MEUBLES LEON LTÉE

Mark J. Leon
Chairman of the Board

Leon's Furniture Limited
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(UNAUDITED)
	As at December 31	As at December 31
($ in thousands)	2011	2010
ASSETS
Current  assets
Cash and cash equivalents	72,505	71,589
Available-for-sale financial assets	149,318	140,224
Trade receivables	28,937	28,569
Income taxes receivable	5,182	-
Inventory	87,830	85,423
Total current assets	343,772	325,805
Other assets	1,431	1,574
Property, plant and equipment	214,158	201,492
Investment property	8,366	8,417
Intangible assets	3,958	4,902
Goodwill	11,282	11,282
Deferred income tax assets	12,372	13,202
Total assets	595,339	566,674
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade and other payables	75,126	71,724
Provisions	11,231	12,341
Income taxes payable	-	524
Customers' deposits	19,157	17,198
Dividends payable	17,457	6,310
Deferred warranty plan revenue	16,152	16,882
Total current liabilities	139,123	124,979
Deferred warranty plan revenue	19,445	21,392
Redeemable share liability	382	172
Deferred income tax liabilities	10,928	9,845
Total liabilities	169,878	156,388
Shareholders' equity attributable to the shareholders of the Company
Common shares	20,918	19,177
Retained earnings	404,647	390,629
Accumulated other comprehensive income	(104)	480
Total shareholders' equity	425,461	410,286
Total liabilities and shareholder's equity	595,339	566,674

Leon's Furniture Limited
CONSOLIDATED INCOME STATEMENTS
(UNAUDITED)
	Three months ended December 31		Twelve months ended December 31
($ in thousands)	2011	2010	2011	2010
Revenue	193,823	197,888	682,836	710,435
Cost of sales	108,010	112,130	394,099	412,379
Gross profit	85,813	85,758	288,737	298,056
Operating expenses
General and administrative expenses	24,338	25,475	96,038	98,684
Sales and marketing expenses	22,993	22,344	78,387	78,221
Occupancy expenses	9,928	7,217	32,731	29,551
Other operating expenses	2,354	1,477	6,239	5,780
	59,613	56,513	213,395	212,236
Operating profit	26,200	29,245	75,342	85,820
Gain on sale of capital property	-	-	-	1,231
Finance income	1,088	991	3,506	3,134
Profit before income tax	27,288	30,236	78,848	90,185
Income tax expense	7,416	8,876	22,182	26,901
Profit for the period attributable to the shareholders of the Company	19,872	21,360	56,666	63,284
Earnings per share
Basic	$0.28	$0.30	$0.81	$0.90
Diluted	$0.28	$0.29	$0.78	$0.87
Dividends declared per share
Common	$0.25	$0.09	$0.52	$0.32
Convertible, non-voting	$0.20	$0.18	$0.20	$0.18
Weighted average number of common shares outstanding
Basic	69,824,750	70,125,657	69,969,417	70,371,744
Diluted	72,152,050	72,780,849	72,305,424	73,133,906

Leon's Furniture Limited
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
	Three months ended December 31
			Net of tax
($ in thousands)	2011	Tax effect	2011
Profit for the period	19,872	-	19,872
Other comprehensive income, net of tax
Unrealized gains on available-for-sale financial assets arising during the period	1,060	148	912
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 period	1,009	141	868
Comprehensive income for the period attributable to the shareholders of the Company	20,881	141	20,740
			Net of tax
	2010	Tax effect	2010
Profit for the period	21,360	-	21,360
Other comprehensive income, net of tax
Unrealized gains on available-for-sale financial assets arising during the period	160	23	137
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 Company	21,352	(2)	21,354
	Twelve months ended December 31
			Net of tax
($ in thousands)	2011	Tax effect	2011
Profit for the period	56,666	-	56,666
Other 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 Company	55,987	(95)	56,082
			Net of tax
	2010	Tax effect	2010
Profit for the period	63,284	-	63,284
Other comprehensive income, net of tax
Unrealized gains on available-for-sale financial assets arising during the period	917	144	773
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 period	739	117	622
Comprehensive income for the period attributable to the shareholders of the Company	64,023	117	63,906

 

Leon's Furniture Limited
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
($ in thousands)	Common shares	Accumulated other comprehensive income	Retained earnings	Total
At January 1, 2010	17,704	(142)	357,576	375,138
Comprehensive income
Profit for the period	—	—	63,284	63,284
Change in unrealized gains on available-for-sale	—	622	—	622
financial assets arising during the period
Total comprehensive income	—	622	63,284	63,906
Transactions with shareholders
Dividends declared	—	—	(22,492)	(22,492)
Management share purchase plan	1,768	—	—	1,768
Repurchase of common shares	(295)	—	(7,739)	(8,034)
Total transactions with shareholders	1,473	—	(30,231)	(28,758)
At December 31, 2010	19,177	480	390,629	410,286
At January 1, 2011	19,177	480	390,629	410,286
Comprehensive income
Profit for the period	—	—	56,666	56,666
Change in unrealized (losses) on available-for-sale	—	(584)	—	—
financial assets arising during the period
Total comprehensive income	—	(584)	56,666	56,082
Transactions with shareholders
Dividends declared	—	—	(36,371)	(36,371)
Management share purchase plan	1,798	—	—	1,798
Repurchase of common shares	(57)	—	(6,277)	(6,334)
Total transactions with shareholders	1,741	—	(42,648)	(40,907)
At December 31, 2011	20,918	(104)	404,647	425,461

 

Leon's Furniture Limited
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
	Twelve months ended December 31
($ in thousands)	2011	2010
OPERATING ACTIVITIES
Profit for the period	56,666	63,284
Add (deduct) items not involving an outlay of cash
Depreciation of property, plant and equipment and investment properties	12,705	15,354
Amortization of intangible assets	880	802
Amortization of deferred warranty plan revenue	(17,271)	(16,838)
Gain on sale of property, plant and equipment	(21)	(1,236)
Deferred income taxes	2,008	295
Gain (loss) on sale of available-for-sale financial assets	35	(337)
Cash received on warranty plan sales	14,594	16,714
	69,596	78,038
Net change in non-cash working capital balances related
to operations	(4,426)	1,391
Cash provided by operating activities	65,170	79,429
INVESTING ACTIVITIES
Purchase of property, plant & equipment	(24,999)	(13,567)
Purchase of intangible assets	64	(370)
Proceeds on sale of property, plant & equipment	39	2,117
Purchase of available-for-sale financial assets	(569,050)	(524,414)
Proceeds on sale of available-for-sale financial assets	559,242	497,691
Decrease in employee share purchase loans	2,008	1,556
Cash 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 period	916	13,288
Cash and cash equivalents, beginning of period	71,589	58,301
Cash and cash equivalents,end of period	72,505	71,589

 

 

 

 

 

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