METRO's fully diluted net earnings per share increased 8.8% in the second
quarter of 2010
-------------------------------------------------------------------------
2010 SECOND QUARTER HIGHLIGHTS
- Net earnings of $80.3 million, up 5.2%
- Fully diluted net earnings per share of $0.74, up 8.8%
- Sales of $2,576.7 million, up 1.1%
- Declared dividend of $0.17 per share, up 23.6%
-------------------------------------------------------------------------
MONTREAL, April 21 /CNW Telbec/ - METRO INC. (TSX : MRU.A) realized net earnings of $80.3 million in the second quarter ended March 13, 2010, an increase of 5.2% over the same quarter last year, and fully diluted net earnings per share of $0.74 versus $0.68 last year, an increase of 8.8%.
"We are pleased with our second quarter results. Despite persistent deflation in certain product categories, our results improved on last year's excellent second quarter. Consumers remain cautious and our teams constantly strive to provide them excellent value across all of our banners. On April 12, 2010, we launched the Metro & Me loyalty card in the Québec City region in phase 1 of a new program that will allow our Québec customers to accumulate points that can be applied towards purchases at Metro supermarkets. We are confident(2) that we will continue our growth in 2010," stated Eric R. La Flèche, President and Chief Executive Officer.
SALES
2010 second quarter sales reached $2,576.7 million compared to $2,549.7 million last year, an increase of 1.1%. Sales for the first 24 weeks of 2010 reached $5,221.7 million, up 1.4% compared to sales of $5,150.2 million for the corresponding period of fiscal 2009.
These increases were achieved despite a slight drop in the value of our basket, whereas last year, high food price inflation and the temporary closing of several stores of a competitor due to a labour conflict had a positive impact on our first and second quarter sales. Same-store sales declined 0.7% in the second quarter due to deflation in certain product categories.
EARNINGS BEFORE FINANCIAL COSTS, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)(1)
Second quarter EBITDA(1) in 2010 was $171.6 million, up 5.5% from $162.6 million for the same quarter last year. Second quarter EBITDA(1) represented 6.7% of sales versus 6.4% last year.
EBITDA(1) for the first 24 weeks of 2010 was $353.7 million or 6.8% of sales compared to $332.8 million or 6.5% of sales for the same period last year. Excluding banner conversion costs of $0.9 million and $5.8 million before taxes recorded for the first 24 weeks of 2010 and 2009 respectively, adjusted EBITDA(1) represented 6.8% of sales in 2010 and 6.6% in 2009.
These increases are due mainly to an increase in our gross margins driven by our improved store operations.
Our share of earnings from our investment in Alimentation Couche-Tard for the second quarter and the first 24 weeks of 2010 were $6.5 million and $17.3 million respectively, compared to $9.4 million and $20.5 million for the corresponding periods of fiscal 2009. Excluding non-recurring items as well as our share of earnings from our investment in Alimentation Couche-Tard, our adjusted EBITDA(1) for the second quarter and the first 24 weeks of 2010 were $165.1 million and $337.3 million respectively or 6.4% and 6.5% of sales versus $154.5 million or 6.1% of sales for the second quarter of 2009 and $318.1 million or 6.2% of sales for the 24-week period.
EBITDA(1) Adjustments
(Millions of 12 weeks / Fiscal Year
dollars, 2010 2009
unless ------------------------------------------------------------
otherwise EBITDA Sales EBITDA/ EBITDA Sales EBITDA/
indicated) Sales (%) Sales (%)
-------------------------------------------------------------------------
EBITDA 171.6 2,576.7 6.7 162.6 2,549.7 6.4
Banner
conversion
costs - - 1.3 -
-------------------------------------------------------------------------
Adjusted
EBITDA 171.6 2,576.7 6.7 163.9 2,549.7 6.4
Share of
earnings
from our
investment in
Alimentation
Couche-Tard (6.5) - (9.4) -
-------------------------------------------------------------------------
Adjusted EBITDA
excluding share
of earnings 165.1 2,576.7 6.4 154.5 2,549.7 6.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Millions of 24 weeks / Fiscal Year
dollars, 2010 2009
unless ------------------------------------------------------------
otherwise EBITDA Sales EBITDA/ EBITDA Sales EBITDA/
indicated) Sales (%) Sales (%)
-------------------------------------------------------------------------
EBITDA 353.7 5,221.7 6.8 332.8 5,150.2 6.5
Banner
conversion
costs 0.9 - 5.8 -
-------------------------------------------------------------------------
Adjusted
EBITDA 354.6 5,221.7 6.8 338.6 5,150.2 6.6
Share of
earnings
from our
investment in
Alimentation
Couche-Tard (17.3) - (20.5) -
-------------------------------------------------------------------------
Adjusted EBITDA
excluding share
of earnings 337.3 5,221.7 6.5 318.1 5,150.2 6.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION AND FINANCIAL COSTS
Total amortization expenses for the second quarter and the first 24 weeks of fiscal 2010 amounted to $47.0 million and $93.7 million respectively, compared with $42.6 million and $84.2 million for the same periods last year. Second quarter financial costs totalled $10.3 million in 2010 versus $10.8 million last year, while 2010 24-week financial costs totalled $21.3 million versus $23.3 million last year. Interest rates for the first 24 weeks of 2010 averaged 3.9% versus 4.8% for the corresponding period last year.
INCOME TAXES
The 2010 second quarter and 24-week period income tax expenses of $34.0 million and $60.3 million represented the effective tax rates of 29.7% and 25.3% respectively. In 2009, the second quarter and 24-week period income tax expenses of $32.9 million and $67.9 million represented an effective tax rate of 30.1% for both periods. In the first quarter of 2010, we benefited from a $10.0 million reduction in our net future income tax liabilities and income tax expenses. Excluding this reduction, our effective tax rate for the first 24 weeks of 2010 was 29.5%.
NET EARNINGS
The 2010 second quarter net earnings were $80.3 million compared to $76.3 million for the corresponding quarter last year, an increase of 5.2%. Fully diluted net earnings per share rose 8.8% to $0.74 from $0.68 last year.
Net earnings for the first 24 weeks of 2010 reached $178.4 million versus $157.4 million last year, up 13.3%. Fully diluted net earnings per share were $1.65 compared to $1.41, an increase of 17.0%. Excluding the first quarter income tax expense decrease of $10.0 million in 2010 and pre-tax banner conversion costs of $0.9 million in 2010 and $5.8 million in 2009, adjusted net earnings(1) for the 2010 24-week period were $169.0 million, up 4.8% from the $161.3 million for the corresponding period of 2009. Adjusted fully diluted net earnings per share(1) were $1.56, up 8.3% from $1.44 last year.
Net Earnings Adjustments
12 weeks / Fiscal Year
2010 2009 Change (%)
------------------------------------------------------------
(Millions Fully (Millions Fully Net Fully
of diluted of diluted earnings diluted
dollars) EPS dollars) EPS EPS
(Dollars) (Dollars)
-------------------------------------------------------------------------
Net earnings 80.3 0.74 76.3 0.68 5.2 8.8
Banner
conversion
costs after
taxes - - 0.9 -
Decrease in
tax expense - - - -
-------------------------------------------------------------------------
Adjusted net
earnings(1) 80.3 0.74 77.2 0.68 4.0 8.8
-------------------------------------------------------------------------
-------------------------------------------------------------------------
24 weeks / Fiscal Year
2010 2009 Change (%)
------------------------------------------------------------
(Millions Fully (Millions Fully Net Fully
of diluted of diluted earnings diluted
dollars) EPS dollars) EPS EPS
(Dollars) (Dollars)
-------------------------------------------------------------------------
Net earnings 178.4 1.65 157.4 1.41 13.3 17.0
Banner
conversion
costs after
taxes 0.6 - 3.9 0.03
Decrease in
tax expense (10.0) (0.09) - -
-------------------------------------------------------------------------
Adjusted net
earnings(1) 169.0 1.56 161.3 1.44 4.8 8.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Quarterly Highlights
(Millions of dollars, unless 2010 2009 2008 Change
otherwise indicated) (%)
-------------------------------------------------------------------------
Sales
Q1 2,645.0 2,600.5 - 1.7
Q2 2,576.7 2,549.7 - 1.1
Q3 - 3,513.3 3,370.0 4.3
Q4 - 2,532.5 2,476.0 2.3
-------------------------------------------------------------------------
Net earnings
Q1 98.1 81.1 - 21.0
Q2 80.3 76.3 - 5.2
Q3 - 112.6 91.9 22.5
Q4 - 84.4 72.5 16.4
-------------------------------------------------------------------------
Adjusted net earnings(1)
Q1 88.7 84.1 - 5.5
Q2 80.3 77.2 - 4.0
Q3 - 111.8 91.9 21.7
Q4 - 85.9 72.5 18.5
-------------------------------------------------------------------------
Fully diluted net earnings
per share (Dollars)
Q1 0.91 0.73 - 24.7
Q2 0.74 0.68 - 8.8
Q3 - 1.01 0.81 24.7
Q4 - 0.77 0.65 18.5
-------------------------------------------------------------------------
Adjusted fully diluted net
earnings per share(1) (Dollars)
Q1 0.82 0.76 - 7.9
Q2 0.74 0.68 - 8.8
Q3 - 1.01 0.81 24.7
Q4 - 0.78 0.65 20.0
-------------------------------------------------------------------------
First and second quarter sales for 2010 were up 1.7% and 1.1% respectively over those for 2009. These increases were achieved despite a slight drop in the value of our basket, whereas last year high food price inflation and the temporary closing of several stores of a competitor due to a labour conflict, had a positive impact on our first and second quarter sales.
Third and fourth quarter sales for 2009 were up 4.3% and 2.3% respectively over those for 2008. Effective merchandising programs allowed us to post increases. Excluding decreased tobacco sales, 2009 third and fourth quarter sales were up 5.2% and 3.2% respectively over 2008.
First quarter net earnings and fully diluted net earnings per share for 2010 were up 21.0% and 24.7% respectively over those for 2009. Excluding banner conversion costs of $0.9 million and $4.5 million before taxes recorded respectively in the first quarters of 2010 and 2009, as well as the income tax expense decrease of $10.0 million in the first quarter of 2010 further to future decreases in the Ontario tax rate, adjusted net earnings(1) were up 5.5% and adjusted fully diluted net earnings per share(1) were up 7.9%.
Second quarter net earnings and fully diluted net earnings per share for 2010 were up 5.2% and 8.8% respectively from those in 2009.
Our sales growth and ongoing efforts to improve store operations in Ontario allowed us to increase our gross margins in the third and fourth quarters of 2009.
Third quarter net earnings and fully diluted net earnings per share in 2009 were up 22.5% and 24.7% respectively from 2008. Excluding non-recurring items recorded in the third quarter of 2009, namely $2.9 million before taxes to convert our Ontario supermarkets to the Metro banner as well as an income tax expense decrease of $2.7 million, adjusted net earnings(1) and adjusted fully diluted net earnings per share(1) for the third quarter of 2009 were up 21.7% and 24.7%, compared to adjusted net earnings(1) and adjusted fully diluted net earnings per share(1) for the third quarter of 2008.
Fourth quarter net earnings and fully diluted net earnings per share in 2009 were up 16.4% and 18.5% over those for 2008. Excluding 2009 fourth quarter banner conversion costs of $2.3 million before taxes, adjusted net earnings(1) and adjusted fully diluted net earnings per share(1) for the fourth quarter of 2009 were up 18.5% and 20.0% over adjusted net earnings(1) and adjusted fully diluted net earnings per share(1) for the fourth quarter of 2008.
2010 2009 2008
(Millions of -------------------------------------------------------
dollars) Q1 Q2 Q1 Q2 Q3 Q4 Q3 Q4
-------------------------------------------------------------------------
Net earnings 98.1 80.3 81.1 76.3 112.6 84.4 91.9 72.5
Banner conversion
costs after taxes 0.6 - 3.0 0.9 1.9 1.5 - -
Decrease in tax
expense (10.0) - - - (2.7) - - -
-------------------------------------------------------------------------
Adjusted net
earnings(1) 88.7 80.3 84.1 77.2 111.8 85.9 91.9 72.5
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2010 2009 2008
(Dollars and -------------------------------------------------------
per share) Q1 Q2 Q1 Q2 Q3 Q4 Q3 Q4
-------------------------------------------------------------------------
Fully diluted net
earnings 0.91 0.74 0.73 0.68 1.01 0.77 0.81 0.65
Banner conversion
costs after taxes - - 0.03 - 0.02 0.01 - -
Decrease in tax
expense (0.09) - - - (0.02) - - -
-------------------------------------------------------------------------
Adjusted fully
diluted net
earnings(1) 0.82 0.74 0.76 0.68 1.01 0.78 0.81 0.65
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash Position
OPERATING ACTIVITIES
Operating activities generated cash flows of $168.6 million in the second quarter and $178.1 million over the first 24 weeks of 2010, compared to $123.3 million and $174.1 million respectively in the corresponding periods of fiscal 2009. The increases in generated cash are due primarily to increased net earnings and variations in non-cash working capital.
INVESTING ACTIVITIES
Investing activities required outflows of $46.0 million in the second quarter and $254.2 million in the first 24 weeks of 2010 versus $35.2 million in the second quarter and $90.3 million in the first 24 weeks of 2009. The increase in second quarter outflows in 2010 compared with 2009 is due primarily to greater disposal of fixed assets in 2009, while the increase in 24-week outflows in 2010 compared with 2009 is attributable to the 2010 acquisition of 18 stores for valuable cash consideration of $152.2 million.
During the first 24 weeks of 2010, the Company and its retailers invested $158.0 million in our retail network, for a gross expansion of 703,400 square feet and a net expansion of 435,600 square feet or 2.3%. Major renovations and expansions of 20 stores were completed, and 11 new stores were opened.
FINANCING ACTIVITIES
Financing activities required outflows of $50.7 million and $93.4 million in the second quarter and 24-week period of 2010 versus 2009 second quarter and 24-week outflows of $21.6 million and $26.9 million. The increase in outflows between the 2010 periods and the 2009 periods is largely attributable to the greater issuance of shares in 2009, for $18.8 million in the second quarter and $36.2 million over the 24-week period, versus $2.0 million and $4.2 million for the corresponding periods of 2010, as well as to the increased redemption of Class A Subordinate shares in the second quarter and first 24 weeks of 2010 compared to the corresponding periods of 2009.
Financial Position
Despite the difficult economic environment, we do not anticipate(2) any liquidity risk and consider our financial position at the end of the second quarter of fiscal 2010 as very solid. We had an unused authorized revolving line of credit of $400.0 million. Our long-term debt corresponded to 29.9% of the combined total of long-term debt and shareholders' equity (long-term debt/total capital).
At the end of the second quarter of 2010, the main elements of our long-term debt were as follows:
Interest Rate Balance Maturity
(Millions
of dollars)
-------------------------------------------------------------------------
Credit A Facility Rates fluctuate with 369.3 August 15, 2012
changes in bankers'
acceptance rates
Series A Notes 4.98% fixed rate 200.0 October 15, 2015
Series B Notes 5.97% fixed rate 400.0 October 15, 2035
-------------------------------------------------------------------------
At the end of the quarter, one interest rate swap agreement in the notional amount of $50.0 million was outstanding under our Credit A Facility. This agreement provides for the exchange of variable interest payment for fixed interest payment according to the following term:
Fixed Rate Notional Amount Maturity
(Millions of dollars)
-------------------------------------------------------------------------
4.0425% 50.0 December 16, 2010
-------------------------------------------------------------------------
Giving effect to this swap agreement, at the end of the quarter, long-term indebtedness comprised $650.0 million at fixed rates ranging from 4.4925% to 5.97% and $319.3 million at variable rates which fluctuate with changes in bankers' acceptance rates.
At the end of the second quarter, we also had foreign exchange forward contracts to hedge against the effect of foreign exchange rate fluctuations on our future U.S. dollar denominated purchases. The fair value of these short-term foreign exchange forward contracts was insignificant.
FINANCIAL RATIOS
As at As at
March 13, September 26,
2010 2009
-------------------------------------------------------------------------
Financial structure
Long-term debt (Millions of dollars) 1,004.9 1,004.3
Shareholders' equity (Millions of dollars) 2,360.7 2,264.1
Long-term debt/total capital (%) 29.9 30.7
Fiscal 2010 Fiscal 2009
(24 weeks) (24 weeks)
----------------------------
Results
EBITDA(1)/Financial costs (Times) 16.6 14.3
-------------------------------------------------------------------------
CAPITAL STOCK, STOCK OPTIONS AND PERFORMANCE SHARE UNITS
As at As at
March 13, September 26,
2010 2009
-------------------------------------------------------------------------
Number of Class A Subordinate Shares
outstanding (Thousands) 106,643 107,830
Number of Class B Shares outstanding
(Thousands) 642 718
Stock options:
Number outstanding (Thousands) 1,672 1,864
Exercise prices (Dollars) 19.00 to 17.23 to
39.17 39.17
Weighted average exercise price (Dollars) 29.40 28.53
Performance share units:
Number outstanding (Thousands) 311 268
Weighted average maturity (Months) 23 18
-------------------------------------------------------------------------
NORMAL COURSE ISSUER BID PROGRAM
Under the normal course issuer bid program, the Company may repurchase up to 6,000,000 of its Class A Subordinate shares between September 8, 2009 and September 7, 2010. Since September 8, 2009, the Company has repurchased 1,702,200 Class A Subordinate shares at an average price of $36.66 for a total of $62.4 million. This program offers us an additional option for using excess funds. Thus, we can decide, in the shareholders' best interest, to reimburse debt or to repurchase shares.
DIVIDENDS
On April 20, 2010, the Company's Board of Directors declared a quarterly dividend of $0.17 per Class A Subordinate Share and Class B Share payable June 8, 2010, an increase of 23.6% over last year. On an annualized basis, this dividend represents 20.7% of 2009 net earnings.
SHARE TRADING
The value of METRO shares remained in the $33.02 to $43.59 range over the first two quarters of fiscal 2010. During this period, a total of 37.4 million shares traded on the Toronto Stock Exchange. The closing price on Friday, April 9, 2010 was $41.79, compared with $34.73 at the end of fiscal 2009.
NEW ACCOUNTING POLICY RECENTLY PUBLISHED
International Financial Reporting Standards
On February 13, 2008, the Accounting Standards Board confirmed the date of the changeover from GAAP to International Financial Reporting Standards (IFRS). Canadian enterprises with public disclosure obligations must adopt IFRS for their interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. The Company's IFRS changeover date will be the first day of fiscal 2012, namely September 25, 2011.
We set up a project structure to achieve the changeover of our consolidated financial statements to IFRS. A multidisciplinary working group analyzes, recommends accounting policy choices and implements each IFRS standard. A steering committee made up of senior executives approves accounting policy choices and makes sure that information technology, internal control, contractual and any other adjustments are made. The external auditors are notified of our choices and consulted on them. The Company's Audit Committee ensures that management fulfills its responsibilities and successfully accomplishes the changeover to IFRS.
We developed a work plan whose phases are outlined in the following tables, with actions, timetable and progress.
Phase 1: Preliminary Study and Diagnostic
-------------------------------------------------------------------------
Actions Identification of the IFRS standards that will require
changes with regard to measurement in consolidated financial
statements and disclosure.
-------------------------------------------------------------
Rank of standards based on their anticipated impact on our
consolidated financial statements and the effort their
implementation requires.
-------------------------------------------------------------------------
Timetable End of our 2008 fiscal year.
-------------------------------------------------------------------------
Progress Completed.
-------------------------------------------------------------------------
Phase 2: Standards Analysis
-------------------------------------------------------------------------
Actions Analysis of the differences between GAAP and IFRS.
-------------------------------------------------------------
Selection of the accounting policies that the Company will
apply on an ongoing basis.
-------------------------------------------------------------
Company's selection of IFRS 1 exemptions at the date of
transition.
-------------------------------------------------------------
Calculation of the quantitative impact on the consolidated
financial statements.
-------------------------------------------------------------
Disclosure analysis.
-------------------------------------------------------------
Preparation of draft consolidated financial statements and
notes.
-------------------------------------------------------------
Identification of the collateral impact in the following
areas:
- information technology (IT)
- internal control over financial reporting
- disclosure controls and procedures
- contracts
- compensation
- taxation
- training
-------------------------------------------------------------------------
Timetable We have prepared a detailed timetable that contemplates the
bulk of the analysis that will be completed by the end of
September 2010. We prioritized standards, based on their
ranking in the diagnostic, the time needed to complete the
analysis and implementation as well as working group
members' availability.
-------------------------------------------------------------------------
Progress At the end of the second quarter of fiscal 2010, we began
analysis of 38 IFRS standards and interpretations out of a
total of approximately 50 that may have an impact on our
Company.
-------------------------------------------------------------------------
Phase 3: Implementation
-------------------------------------------------------------------------
Actions Preparation of the opening balance sheet at the date of
transition.
-------------------------------------------------------------
Compilation of the comparative financial data.
-------------------------------------------------------------
Production of the interim consolidated financial statements
and the associated disclosure.
-------------------------------------------------------------
Production of the annual consolidated financial statements
and the associated disclosure.
-------------------------------------------------------------
Implementation of changes regarding collateral impacts.
-------------------------------------------------------------------------
Timetable At the end of fiscal 2011, our opening balance sheet,
comparative financial data under IFRS and changes regarding
collateral impacts will be completed.
-------------------------------------------------------------
In fiscal 2012, we will produce our interim and annual
consolidated financial statements and disclosure in
accordance with IFRS.
-------------------------------------------------------------------------
Progress We have identified and begun implementation of an IT solution
that will allow us to run parallel integrated GAAP and IFRS
systems from the start of fiscal 2011 for the comparative
financial statements.
-------------------------------------------------------------------------
So far, we have analyzed a number of IFRS standards. We have made choices, as warranted, with regard to these standards and noted the differences between some of these standards and our current accounting policies. The most significant ones are set out in the following table:
-------------------------------------------------------------------------
Standards Comparison between IFRS Preliminary Findings
and GAAP
-------------------------------------------------------------------------
Borrowing costs IFRS: We have to We will not capitalize
capitalize borrowing borrowing costs on
costs on qualifying qualifying assets, as
assets, i.e. assets that they are deemed to be
require an extended immaterial.
period of preparation
before they are usable
or saleable.
GAAP: These borrowing
costs may be capitalized.
-------------------------------------------------------------------------
Fixed assets IFRS: After initial We will continue to use
recognition, we can the cost model in order
measure our fixed assets to avoid balance sheet
using the cost model or variations in the fair
the revaluation model. value of fixed assets and
GAAP: The revaluation the corresponding impact
model is not allowed. on P&L statements.
---------------------------------------------------------
IFRS: We have to amortize The roof and HVAC system
our fixed assets based will be amortized
on their components. separately from the
GAAP: Component building.
identification rules are The carrying value of
less stringent. these assets and
corresponding depreciation
expense will be different,
but the impact should not
be material.
-------------------------------------------------------------------------
Investment IFRS: After initial We will continue to use
property recognition, we can the cost model in order
measure our investment to avoid balance sheet
property using the cost variations in the fair
model or the revaluation value of investment
model. property and the
GAAP: The revaluation model corresponding impact on
is not allowed. P&L statements.
-------------------------------------------------------------------------
Impairment of IFRS: We have to conduct Our impairment testing
assets impairment testing of our will be conducted at the
assets at the independent level of each store and
cash generating unit (CGU) each warehouse that
level. supplies external clients.
GAAP: The unit is defined Impairment testing of
as it generates both corporate assets and
independent cash inflows goodwill will be conducted
and outflows. at the level of groups of
CGUs.
Impairment testing results
may be different, but
their impact should not be
material.
-------------------------------------------------------------------------
Share-based IFRS: When stock option The compensation expense
payment awards vest gradually, will have to be recognized
each tranche is to be over the expected term of
considered as a each vested tranche. It
separate award. will be different, but the
GAAP: The gradually impact should not be
vested tranches could be material.
considered as a single
award.
-------------------------------------------------------------------------
Earnings per IFRS: We have to Diluted earnings per share
share independently determine, will be different, but the
for the interim period impact should not be
and the year-to-date, material.
the number of potentially
dilutive shares to
consider in calculating
diluted earnings per
share.
GAAP: The number is
independently determined
for the interim period,
but the year-to-date is
a weighted average of the
periods.
-------------------------------------------------------------------------
Customer IFRS: As we are acting as Sales will be different,
loyalty an authorized agent of but the impact should not
programs the Air Miles(TM) reward be material.
program, we have to There will be no impact on
record the cost of points net earnings.
as a reduction in sales.
GAAP: No standard exists,
but the Canadian practice
is to record the cost of
points in the cost of
sales and operating
expenses.
-------------------------------------------------------------------------
Employee IFRS: We have the choice We will recognize full
Benefits of deferring recognition actuarial gains and losses
of actuarial gains and immediately in
losses using the corridor comprehensive income,
approach or of without impacting P&L.
immediately recognizing
actuarial gains and
losses in full in P&L or
in comprehensive income.
GAAP: We have a similar
choice of accounting
policy without the
possibility of immediate
recognition to
comprehensive income.
---------------------------------------------------------
IFRS: We have to At the date of transition,
recognize past service we will recognize past
cost for vested benefits service cost for vested
immediately in P&L. benefits in retained
GAAP: Past service cost earnings. After the
has to be amortized in a changeover, past service
straight line over the cost for vested benefits
average remaining service will be recognized in P&L.
period of active
participants until the
full eligibility date,
regardless of vesting.
---------------------------------------------------------
IFRS: Recognition of Valuation of future
defined benefit assets obligations calculated on
is limited to the a going concern and
availability of future solvency basis should
contribution reductions decrease the availability
based on future of future contribution
obligations calculated reductions and increase
on an accounting, going our defined benefit
concern and solvency obligations. We will
basis. recognize differences at
GAAP: Recognition of the date of transition in
defined benefit assets retained earnings, and
is limited to the future variations in
availability of future comprehensive income.
contribution reductions
based on future
obligations calculated
solely on an accounting
basis.
---------------------------------------------------------
IFRS: A multi-employer Our multi-employer plans
plan with implicit are defined benefit plans,
obligations shall be however they will be
accounted for as a accounted for as if they
defined benefit plan. were defined contribution
However, when plans since sufficient
sufficient information information is not
is not available, it available to accurately
shall be accounted for determine our obligations.
as if it were a defined Additional information
contribution plan. regarding this situation
Additional information will have to be disclosed.
shall be added to the
financial statements.
Furthermore, if there
is a contractual
commitment, it shall be
recognized in P&L.
GAAP: A multi-employer
plan is generally
accounted for as a
defined contribution
plan because
information is usually
not available. However,
if sufficient
information is
available, it must be
accounted for as a
defined benefit plan.
The employee future
benefits standard
doesn't specifically
address the accounting
treatment of a
contractual agreement.
However, other GAAP
standards cover this
type of commitment and
the accounting
treatment is the same
as IFRS.
-------------------------------------------------------------------------
Joint ventures IFRS: We may account We will use the equity
for our interests in method.
joint ventures using There will be no material
proportionate impact on the presentation
consolidation or the of financial statements
equity method. and no impact on net
GAAP: We have to account earnings.
for them using
proportionate
consolidation.
-------------------------------------------------------------------------
We have also made choices concerning certain exemptions from retrospective application at the time of changeover provided by IFRS 1 and which are set out in the following table:
-------------------------------------------------------------------------
Optional Preliminary Findings
Exemptions
-------------------------------------------------------------------------
Borrowing costs This exemption allows us not to capitalize borrowing
costs on our qualifying assets before the IFRS
transition date.
Given that we will not capitalize these borrowing
costs, we will not use the exemption.
-------------------------------------------------------------------------
Deemed cost On the IFRS transition date, we can recognize each
fixed asset and investment property at its deemed
cost, which shall be its fair value.
We shall analyze our fixed assets and investment
property to determine whether or not to use the
exemption.
-------------------------------------------------------------------------
Share-based This exemption would relieve us from applying the
payment standard to equity instruments acquired before the
IFRS transition date.
We have decided not to avail ourselves of this
exemption.
-------------------------------------------------------------------------
Employee The exemption allows us to recognize all actuarial
benefits gains or losses at the date of transition to IFRS in
retained earnings, regardless of the subsequent
accounting treatment chosen.
We have chosen to take advantage of this exemption.
-------------------------------------------------------------------------
Other key analyses are in progress or will be undertaken shortly. Consequently, preliminary findings on them do not appear in the above tables. Any choices made or variances identified will be communicated once the analyses have been completed. Furthermore, the release of International Accounting Standards Board discussion papers, exposure drafts and new standards could change our preliminary findings.
Press Release
This press release sets out the financial position and consolidated results of METRO INC. on March 13, 2010. It should be read in conjunction with the unaudited interim consolidated financial statements and accompanying notes in this press release along with the consolidated financial statements for the fiscal year ended September 26, 2009 and related notes and MD&A presented in the Company's 2009 Annual Report. This press release is based upon information as at April 9, 2010 unless otherwise stated. Additional information, including the Certification of Interim Filings letters for the quarter ended March 13, 2010 signed by the President and Chief Executive Officer and the Senior Vice-President, Chief Financial Officer and Treasurer, is also available on the SEDAR website at: www.sedar.com.
Non-GAAP Measurements
In addition to the Canadian Generally Accepted Accounting Principles (GAAP) earnings measurements provided, we have included certain non-GAAP earnings measurements. These measurements are presented for information purposes only. They do not have a standardized meaning prescribed by GAAP and therefore may not be comparable to similar measurements presented by other public companies.
Earnings before financial costs, taxes, depreciation and amortization (EBITDA)
EBITDA is a measurement of earnings that excludes financial costs, taxes, depreciation and amortization. We believe that EBITDA is a measurement commonly used by readers of financial statements to evaluate a company's operational cash-generating capacity and ability to discharge its financial expenses.
Adjusted EBITDA, adjusted net earnings and adjusted fully diluted net earnings per share
Adjusted EBITDA, adjusted net earnings and adjusted fully diluted net earnings per share are earnings measurements that exclude non-recurring items. We believe that presenting earnings without non-recurring items leaves readers of financial statements better informed as to the current period and corresponding period's earnings, thus enabling them to better evaluate the Company's performance and judge its future outlook.
Forward-looking Information
We have used, throughout this press release, different statements that could, within the context of regulations issued by the Canadian Securities Administrators, be construed as being forward-looking information. In general, any statement contained herein, which does not constitute a historical fact, may be deemed a forward-looking statement. Expressions such as "confident", "anticipate" and other similar expressions are generally indicative of forward-looking statements. The forward-looking statements contained herein are based upon certain assumptions regarding the Canadian food industry, the general economy, our annual budget, as well as our 2010 action plan.
These forward-looking statements do not provide any guarantees as to the future performance of the Company and are subject to potential risks, known and unknown, as well as uncertainties that could cause the outcome to differ significantly. An economic slowdown or recession, or the arrival of a new competitor, are examples described under the "Risk Management" section of the 2009 Annual Report which could have an impact on these statements. We believe these statements to be reasonable and pertinent as at the date of publication of this press release and represent our expectations. The Company does not intend to update any forward-looking statement contained herein, except as required by applicable law.
Conference Call
Financial analysts and institutional investors are invited to participate in a conference call on the 2010 second quarter results at 10:00 a.m. (EDT) on Wednesday, April 21, 2010. To access the conference call, please dial (514) 807-9895 or (647) 427-7450 or (888) 231-8191. The media and investing public are invited to listen to the call in real time or delayed time on the METRO INC. Web site at www.metro.ca.
(1) See section on "Non-GAAP measurements"
(2) See section on "Forward-looking information"
Consolidated Statements of Earnings
Periods ended March 13, 2010 and March 14, 2009
(Unaudited) (Millions of dollars, except for net earnings per share)
12 weeks 24 weeks
Fiscal Year Fiscal Year
---------- ----------
2010 2009 2010 2009
-------------------------------------------------------------------------
Sales $ 2,576.7 $ 2,549.7 $ 5,221.7 $ 5,150.2
Cost of sales and operating
expenses (note 8) (2,411.6) (2,395.2) (4,884.4) (4,832.1)
Share of earnings in a public
company subject to
significant influence 6.5 9.4 17.3 20.5
Banner conversion costs
(note 3) - (1.3) (0.9) (5.8)
-------------------------------------------------------------------------
Earnings before financial
costs, taxes, depreciation
and amortization 171.6 162.6 353.7 332.8
Depreciation and amortization (47.0) (42.6) (93.7) (84.2)
-------------------------------------------------------------------------
Operating income 124.6 120.0 260.0 248.6
Financial costs, net (note 5) (10.3) (10.8) (21.3) (23.3)
-------------------------------------------------------------------------
Earnings before income taxes 114.3 109.2 238.7 225.3
Income taxes (note 6) (34.0) (32.9) (60.3) (67.9)
-------------------------------------------------------------------------
Net earnings $ 80.3 $ 76.3 $ 178.4 $ 157.4
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings per share
(Dollars) (note 7)
Basic 0.75 0.69 1.66 1.42
Fully diluted 0.74 0.68 1.65 1.41
-------------------------------------------------------------------------
---------- ----------
See accompanying notes
Consolidated Balance Sheets
(Unaudited) (Millions of dollars)
----------
As at As at
March 13, September 26,
2010 2009
-------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 71.9 $ 241.4
Accounts receivable 306.5 315.8
Inventories (note 8) 708.5 681.3
Prepaid expenses 23.3 8.3
Income taxes receivable 7.1 6.6
Future income taxes 14.1 29.8
-------------------------------------------------------------------------
1,131.4 1,283.2
Investments and other assets 222.5 204.0
Fixed assets 1,339.4 1,305.8
Intangible assets 318.3 325.4
Goodwill 1,598.5 1,478.6
Future income taxes 3.7 3.6
Accrued benefit asset 66.6 65.6
-------------------------------------------------------------------------
$ 4,680.4 $ 4,666.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank loans $ 0.4 $ 0.8
Accounts payable 1,039.6 1,111.2
Income taxes payable 35.7 24.8
Future income taxes 11.0 9.2
Current portion of long-term debt 4.6 6.4
-------------------------------------------------------------------------
1,091.3 1,152.4
Long-term debt 1,004.9 1,004.3
Accrued benefit liability 49.0 49.0
Future income taxes 149.1 165.0
Other long-term liabilities 25.4 31.4
-------------------------------------------------------------------------
2,319.7 2,402.1
-------------------------------------------------------------------------
Shareholders' equity
Capital stock (note 9) 712.5 716.7
Contributed surplus (note 10) 4.1 3.7
Retained earnings 1,645.1 1,545.7
Accumulated other comprehensive income
(note 11) (1.0) (2.0)
-------------------------------------------------------------------------
2,360.7 2,264.1
-------------------------------------------------------------------------
$ 4,680.4 $ 4,666.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
----------
See accompanying notes
Consolidated Statements of Cash Flows
Periods ended March 13, 2010 and March 14, 2009
(Unaudited) (Millions of dollars)
12 weeks 24 weeks
Fiscal Year Fiscal Year
---------- ----------
2010 2009 2010 2009
-------------------------------------------------------------------------
Operating activities
Net earnings $ 80.3 $ 76.3 $ 178.4 $ 157.4
Non-cash items
Share of earnings in a
public company subject to
significant influence (6.5) (9.4) (17.3) (20.5)
Depreciation and
amortization 47.0 42.6 93.7 84.2
Amortization of deferred
financing costs 0.4 0.5 0.9 1.0
Loss (gain) on disposal and
write-off of fixed and
intangible assets 0.1 (0.6) 0.2 (0.6)
Interest income on
investments - (0.2) - (0.2)
Future income taxes 4.4 5.8 1.0 11.6
Stock-based compensation
cost 1.3 1.0 2.5 2.1
Difference between amounts
paid for employee future
benefits and current
period cost (1.3) (2.2) (1.0) (8.7)
-------------------------------------------------------------------------
125.7 113.8 258.4 226.3
Net change in non-cash
working capital items
related to operations 42.9 9.5 (80.3) (52.2)
-------------------------------------------------------------------------
168.6 123.3 178.1 174.1
-------------------------------------------------------------------------
Investing activities
Business acquisition (note 2) (15.5) - (152.2) -
Net change in investments and
other assets (1.6) (2.5) (4.4) (2.7)
Dividends from public company
subject to significant
influence 0.9 0.8 1.6 1.5
Additions to fixed assets (22.3) (37.0) (88.3) (89.1)
Proceeds on disposal of fixed
assets 1.9 11.1 4.3 11.8
Additions to intangible assets (9.4) (7.6) (15.2) (11.8)
-------------------------------------------------------------------------
(46.0) (35.2) (254.2) (90.3)
-------------------------------------------------------------------------
Financing activities
Net change in bank loans (7.3) (2.1) (0.1) 0.2
Issuance of shares (note 9) 2.0 18.8 4.2 36.2
Redemption of shares (note 9) (22.9) (13.8) (55.9) (23.1)
Acquisition of treasury shares
(note 9) - (4.3) - (4.3)
Performance share units cash
settlement (note 10) (0.5) - (0.5) -
Increase in long-term debt 0.3 1.1 2.1 3.8
Repayment of long-term debt (1.7) (3.4) (5.6) (5.7)
Net change in other long-term
liabilities (2.3) (2.6) (4.5) (4.9)
Dividends paid (18.3) (15.3) (33.1) (29.1)
-------------------------------------------------------------------------
(50.7) (21.6) (93.4) (26.9)
-------------------------------------------------------------------------
Net change in cash and cash
equivalents 71.9 66.5 (169.5) 56.9
Cash and cash equivalents -
beginning of period - 142.1 241.4 151.7
-------------------------------------------------------------------------
Cash and cash equivalents -
end of period $ 71.9 $ 208.6 $ 71.9 $ 208.6
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Supplementary information
Interest paid 1.9 1.0 21.9 23.3
Income taxes paid 28.6 29.2 51.3 52.9
-------------------------------------------------------------------------
---------- ----------
See accompanying notes
Consolidated Statements of Retained Earnings
24-week periods ended March 13, 2010 and March 14, 2009
(Unaudited) (Millions of dollars)
Fiscal Year
----------
2010 2009
-------------------------------------------------------------------------
Balance - beginning of period $ 1,545.7 $ 1,366.8
Net earnings 178.4 157.4
Dividends (33.1) (29.1)
Share redemption premium (note 9) (45.9) (18.7)
-------------------------------------------------------------------------
Balance - end of period $ 1,645.1 $ 1,476.4
-------------------------------------------------------------------------
-------------------------------------------------------------------------
----------
See accompanying notes
Consolidated Statements of Comprehensive Income
Periods ended March 13, 2010 and March 14, 2009
(Unaudited) (Millions of dollars)
12 weeks 24 weeks
Fiscal Year Fiscal Year
---------- ----------
2010 2009 2010 2009
-------------------------------------------------------------------------
Net earnings $ 80.3 $ 76.3 $ 178.4 $ 157.4
Other comprehensive income
(note 11)
Change in fair value of
derivative designated as
cash flow hedge 0.5 (0.4) 1.5 (3.1)
Corresponding income taxes (0.2) 0.1 (0.5) 0.9
-------------------------------------------------------------------------
Comprehensive income $ 80.6 $ 76.0 $ 179.4 $ 155.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
---------- ----------
See accompanying notes
Notes to Interim Consolidated Statements
Periods ended March 13, 2010 and March 14, 2009
(Unaudited) (Millions of dollars, unless otherwise indicated)
1. Statement Presentation
The unaudited interim consolidated financial statements were prepared by management in accordance with Canadian generally accepted accounting principles (GAAP). The accounting policies and procedures used in preparing these interim consolidated financial statements are the same as those used in preparing the audited annual consolidated financial statements for the year ended September 26, 2009. The unaudited interim consolidated financial statements should be read along with the audited annual consolidated financial statements and notes to the statements in the Company's 2009 Annual Report. The operating results for the interim period covered do not necessarily reflect overall results for the fiscal year. Certain comparative figures have been reclassified to conform to the presentation being used in the current fiscal year.
2. Business Acquisition
In the first quarter of 2010, the Company acquired 18 affiliated stores which it already supplied. The total purchase price was $152.2 in cash.
The acquisition was accounted for using the purchase method. The stores' results have been consolidated as of their respective acquisition dates. The preliminary total purchase price allocation was as follows:
Cash consideration paid $ 152.2
Net assets acquired
Inventories 15.0
Other current assets 0.7
Fixed assets 22.8
Short-term liabilities assumed (3.6)
-------------------------------------------------------------------------
Total net assets acquired 34.9
-------------------------------------------------------------------------
Excess consideration paid over net assets acquired $ 117.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Management is currently carrying out a more specific analysis and changes will be made to the allocation of the excess consideration paid over net assets acquired as the information becomes available. Amoung others, since the measurement of the fair value of fixed assets had not yet been completed at the time of the preliminary allocation, fixed assets have been presented at cost. Furthermore, the Company has not completed the assessment of possible costs related to the restructuring and integration of activities potentially giving rise to the recognition of a liability in the allocation of the purchase price. As a result, the actual amounts allocated to the identifiable assets acquired and liabilities assumed and the related operating results may vary according to the amounts initially recorded.
The tax treatment of the goodwill will be as eligible capital property with the related tax deductions.
3. Banner Conversion Costs
In the first quarter of 2010, the Company completed the conversion of its 159 stores of its five Ontario banners to the Metro banner begun in the summer of 2008. Therefore, no conversion cost was recorded in the second quarter of 2010 (2009 - $1.3). For the first 24-week period of 2010, conversion costs totalled $0.9 (2009 - $5.8).
4. Employee Future Benefits
The Company maintains several defined benefit and defined contribution plans which provide most participants with pension and other retirement benefits and other post-employment benefits. The Company's defined contribution plan and defined benefit plan expense was as follows:
12 weeks
Fiscal Year
--------------------
2010 2009
-------------------------------------------------------------------------
Pension Other Pension Other
plans plans plans plans
-------------------------------------------------------------------------
Defined contribution plans $ 5.4 $ 0.2 $ 6.2 $ 0.2
-------------------------------------------------------------------------
Defined benefit plans
Current service costs 5.5 0.4 4.7 0.3
Interest cost 8.1 0.5 7.8 0.5
Projected return on plan assets (9.7) - (9.2) -
Amortization of actuarial
losses (gains) and past
service costs 0.3 - 0.4 (0.1)
Plan amendments - (0.1) - -
-------------------------------------------------------------------------
4.2 0.8 3.7 0.7
-------------------------------------------------------------------------
$ 9.6 $ 1.0 $ 9.9 $ 0.9
-------------------------------------------------------------------------
-------------------------------------------------------------------------
--------------------
24 weeks
Fiscal Year
--------------------
2010 2009
-------------------------------------------------------------------------
Pension Other Pension Other
plans plans plans plans
-------------------------------------------------------------------------
Defined contribution plans $ 12.5 $ 0.3 $ 12.8 $ 0.3
-------------------------------------------------------------------------
Defined benefit plans
Current service costs 10.9 0.7 9.6 0.6
Interest cost 16.2 0.9 15.5 0.9
Projected return on plan assets (19.3) - (18.3) -
Amortization of actuarial
losses (gains) and past
service costs 0.7 - 0.7 (0.1)
Plan amendments - (0.1) - -
-------------------------------------------------------------------------
8.5 1.5 7.5 1.4
-------------------------------------------------------------------------
$ 21.0 $ 1.8 $ 20.3 $ 1.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
--------------------
5. Financial Costs, net
12 weeks 24 weeks
Fiscal Year Fiscal Year
---------- ----------
2010 2009 2010 2009
-------------------------------------------------------------------------
Short-term interest $ 0.4 $ 0.3 $ 0.9 $ 0.9
Long-term interest 9.9 10.7 20.2 22.8
Amortization of deferred
financing costs 0.4 0.5 0.9 1.0
Interest income (0.4) (0.7) (0.7) (1.4)
-------------------------------------------------------------------------
$ 10.3 $ 10.8 $ 21.3 $ 23.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
---------- ----------
6. Income Taxes
The effective income tax rates were as follows:
12 weeks 24 weeks
Fiscal Year Fiscal Year
---------- ----------
(Percentage) 2010 2009 2010 2009
-------------------------------------------------------------------------
Combined statutory income tax
rate 30.5 31.2 30.5 31.3
Changes
Impact on future taxes
of 4.0% total future
decreases in Ontario tax
rate - - (4.2) -
Share of earnings in a
public company subject to
significant influence (1.0) (1.4) (1.2) (1.5)
Others 0.2 0.3 0.2 0.3
-------------------------------------------------------------------------
29.7 30.1 25.3 30.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
---------- ----------
7. Net Earnings per Share
Basic net earnings per share and fully diluted net earnings per share
were calculated based on the following number of shares:
12 weeks 24 weeks
Fiscal Year Fiscal Year
---------- ----------
(Millions) 2010 2009 2010 2009
-------------------------------------------------------------------------
Weighted average number of
shares outstanding - Basic 107.6 111.2 107.7 110.9
Dilutive effect under stock
option and performance
share units plans 0.5 0.9 0.5 0.9
-------------------------------------------------------------------------
Weighted average number of
shares outstanding -
Diluted 108.1 112.1 108.2 111.8
-------------------------------------------------------------------------
-------------------------------------------------------------------------
---------- ----------
8. Inventories
Inventories were detailed as follows:
----------
As at
As at September
March 13, 26,
2010 2009
-------------------------------------------------------------------------
Warehouse inventories $ 295.1 $ 304.0
Retail inventories 413.4 377.3
-------------------------------------------------------------------------
$ 708.5 $ 681.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
----------
The cost of inventories expensed for the 12-week period ended March 13,
2010 totalled $2,105.7 (2009 - $2,101.9) and $4,265.8 for the 24-week
period of 2010 (2009 - $4,241.8).
9. Capital Stock
Outstanding
Class A Class B Total
Subordinate Shares Shares
----------------------- -----------------------
Number Number
(Thousands) (Thousands)
-------------------------------------------------------------------------
Balance as at
September 26,
2009 107,830 $ 715.3 718 $ 1.4 $ 716.7
Shares issued
for cash 199 4.2 - - 4.2
Shares redeemed
for cash,
excluding
premium of
$45.9 (1,515) (10,0) - - (10.0)
Released
treasury
shares 53 0.3 - - 0.3
Stock options
exercised - 1.3 - - 1.3
Conversion of
Class B
Shares into
Class A
Subordinate
Shares 76 0.1 (76) (0.1) -
-------------------------------------------------------------------------
Balance as at
March 13,
2010 106,643 $ 711.2 642 $ 1.3 $ 712.5
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Stock Option Plan
The outstanding options and the changes during the 24-week period ended
March 13, 2010 were summarized as follows:
Weighted
average
exercise
Number price
(Thousands) (Dollars)
-------------------------------------------------------------------------
Balance as at September 26, 2009 1,864 28.53
Exercised (192) 21.02
-------------------------------------------------------------------------
Balance as at March 13, 2010 1,672 29.40
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The exercise prices of the outstanding options ranged from $19.00 to $39.17 as at March 13, 2010 with expiration dates up to 2016. 352,520 of those options could be exercised at a weighted average exercise price of $26.82.
Compensation expense for these options amounted to $0.6 for the 12-week period ended March 13, 2010 (2009 - $0.5) and to $1.1 for the 24-week period of 2010 (2009 - $1.0).
Performance Share Unit Plan
Performance share units (PSUs) outstanding and changes during the 24-week period ended March 13, 2010 were summarized as follows:
Number
(Units)
-------------------------------------------------------------------------
Balance as at September 26, 2009 267,570
Granted 107,583
Settled (63,794)
Cancelled (389)
-------------------------------------------------------------------------
Balance as at March 13, 2010 310,970
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Class A Subordinate Shares of the Company are held in trust for participants until the PSUs vest or are cancelled. The trust, considered a variable interest entity, is consolidated in the Company's financial statements with the cost of the acquired shares recorded as treasury shares in reduction of capital stock.
As at March 13, 2010, 204,581 shares were held in trust for participants until the PSUs shall have vested or been cancelled (as at September 26, 2009 - 257,255 shares).
The compensation expense comprising all of these PSUs amounted to $0.7 for the 12-week period ended March 13, 2010 (2009 - $0.5) and to $1.4 for the 24-week period of fiscal 2010 (2009 - $1.1).
10. Contributed Surplus
-------------------------------------------------------------------------
Balance as at September 26, 2009 $ 3.7
Stock-based compensation cost 2.5
Stock options exercised (1.3)
Released treasury shares (0.3)
PSUs cash settlement (0.5)
-------------------------------------------------------------------------
Balance as at March 13, 2010 $ 4.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
11. Accumulated Other Comprehensive Income
Derivative designated as cash flow hedge constitutes the sole component of
Accumulated Other Comprehensive Income. The changes during the 24-week periods
ended March 13, 2010 and March 14, 2009 were as follows:
-------------
2010 2009
-------------------------------------------------------------------------
Balance - beginning of period $ (2.0) $ (1.0)
Change in fair value of designated
derivative net of income taxes of $0.5 (2009
- $0.9) 1.0 (2.2)
Balance - end of period $ (1.0) $ (3.2)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
----------
%SEDAR: 00001783EF
For further information: Richard Dufresne, Senior Vice-President, Chief Financial Officer and Treasurer, (514) 643-1003; Investor Relations Department, (514) 643-1055, [email protected]; METRO INC.'s corporate information and press releases are available on the Internet at: www.metro.ca; Source: METRO INC
Share this article