MONTRÉAL, April 1, 2015 /CNW Telbec/ -
Twelve months ended January 31, 2015
Sales for the twelve months ended January 31, 2015 were $939.4 million as compared with $960.4 million for the twelve months ended February 1, 2014, a decrease of 2.2%, impacted by a net reduction of 55 stores as the Company closes underperforming locations and converts or closes Smart Set stores. Same store sales increased 1.2% with mall and power centre stores decreasing 0.2% and e-commerce sales increasing 63.5%. Mall and power centre stores were impacted by e-commerce alternatives, a highly competitive environment and consumers with near record high debt levels. The initiative to close the Smart Set banner negatively impacted sales, despite same store sales for the Smart Set banner showing positive results. Sales through the various banners' e-commerce channels continued to show strong growth, although representing a small proportion of total Company sales.
The Company's gross margin for the twelve months ended January 31, 2015 was 60.4% compared with 61.9% for the twelve months ended February 1, 2014. The Company's gross margin includes gains on foreign exchange contracts previously reported in finance income (gain of $10,921 for the twelve months ended January 31, 2015 and $12,455 for the twelve months ended February 1, 2014).
Net earnings for the twelve months ended January 31, 2015 were $13.4 million ($0.21 diluted earnings per share) as compared with net earnings of $10.8 million ($0.17 diluted earnings per share) for the twelve months ended February 1, 2014. The increase in net earnings was primarily attributable to the closure of non-performing stores and previously reported initiatives aimed at reducing costs across the organization. For the twelve months ended January 31, 2015, adjusted EBITDA1 was $64.8 million as compared with $70.5 million in the twelve months ended February 1, 2014, a decrease of $5.7 million or 8.0% largely attributable to lower sales and margins.
On November 25, 2014 the Company announced its plan to close all Smart Set stores. Management determined that its optimum strategy to improve operating results was to refocus its sales and merchandising efforts either through conversion of Smart Set stores to other Company banners or through store closures. The majority of the stores that will be converted will occur by October 31, 2015 while the remaining stores are anticipated to close by the year ending January 28, 2017.
The Smart Set banner sales for the twelve months ended January 31, 2015 were $88.9 million as compared to $95.8 million for the twelve months ended February 1, 2014, while losses from operating activities for the twelve months ended January 31, 2015 were $10.0 million as compared to $29.5 million for the twelve months ended February 1, 2014 (including an allocation of general overhead costs). The Smart Set banner non-cash asset write-offs amounted to $3.1 million for the twelve months ended January 31, 2015. The Company does not anticipate inventory write-downs or material employee severance costs.
Three months ended January 31, 2015
Sales for the three months ended January 31, 2015 were $236.3 million as compared with $240.7 million for the three months ended February 1, 2014, a decrease of 1.8%, impacted by a net reduction of 55 stores as the Company closes underperforming locations and converts or closes Smart Set stores. Same store sales increased by 2.1% with mall and power centre stores decreasing 0.6% and e-commerce sales increasing 84.9%.
The Company's gross margin for the three months ended January 31, 2015 increased to 61.0% from 58.7% for the three months ended February 1, 2014, largely due to improved margins in the plus-size banners and e-commerce. The Company's gross margin includes gains on foreign exchange contracts previously reported in finance income (gain of $10,041 for the three months ended January 31, 2015 and $9,505 for the three months ended February 1, 2014).
Net earnings for the three months ended January 31, 2015 were $4.4 million ($0.07 diluted earnings per share) as compared with a net loss of $2.6 million ($0.04 diluted loss per share) for the three months ended February 1, 2014. Adjusted EBITDA1 for the three months ended January 31, 2015 was $14.1 million as compared with $8.1 million for the three months ended February 1, 2014, an increase of $6.0 million or 73.8%. The increase in net earnings and adjusted EBITDA1 was primarily attributable to improved gross margins in the fourth quarter of fiscal 2015 combined with reduced operating costs both at store level and head office.
Dividends
At the Board of Directors meeting held on April 1, 2015, a quarterly cash dividend (constituting eligible dividends) of $0.05 per share on all outstanding Class A non-voting and Common shares of the Company was declared, payable April 30, 2015 to shareholders of record on April 16, 2015.
About Reitmans (Canada) Limited
The Company is a leading ladieswear specialty apparel retailer with retail outlets throughout Canada. The Company operates 823 stores consisting of 341 Reitmans, 139 Penningtons, 105 Addition Elle, 76 RW & CO., 68 Thyme Maternity and 94 Smart Set. The Company also operates 21 Thyme Maternity shop-in-shop boutiques in select Babies"R"Us locations in Canada.
1Non-GAAP Financial Measures
In addition to discussing earnings in accordance with IFRS, this press announcement provides adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") as a non-GAAP financial measure. Adjusted EBITDA is defined as net earnings before income tax expense, other income, dividend income, interest income, realized gains or losses on disposal of available-for-sale financial assets, interest expense, depreciation, amortization and net impairment losses. The following table reconciles the most comparable GAAP measure, net earnings, to adjusted EBITDA. Management believes that adjusted EBITDA is an important indicator of the Company's ability to generate liquidity through operating cash flow to fund working capital needs and fund capital expenditures and uses the metric for this purpose. The exclusion of dividend and interest income eliminates the impact of revenue derived from non-operational activities. The exclusion of depreciation, amortization and impairment charges eliminates the non-cash impact. The intent of adjusted EBITDA is to provide additional useful information to investors and analysts and the measure does not have any standardized meaning under IFRS. Adjusted EBITDA should therefore not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate adjusted EBITDA differently. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.
The Company uses a key performance indicator ("KPI"), same store sales, to assess store performance (including each banner's e-commerce store) and sales growth. Same store sales are defined as sales generated by stores that have been continuously open during both of the periods being compared and include e-commerce sales. The same store sales metric compares the same calendar days for each period. Although this KPI is expressed as a ratio, it is a non-GAAP financial measure that does not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures used by other companies. Management uses same store sales in evaluating the performance of stores and considers it useful in helping to determine what portion of new sales has come from sales growth and what portion can be attributed to the opening of new stores. Same store sales is a measure widely used amongst retailers and is considered useful information for both investors and analysts. Same store sales should therefore not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS.
The following table reconciles net earnings (loss) to adjusted EBITDA for the three months and fiscal year ended January 31, 2015 and February 1, 2014:
For the three months ended |
For the fiscal year ended |
|||
(Unaudited) (in thousands of Canadian dollars) |
January 31, 2015 |
February 1, 2014 |
January 31, 2015 |
February 1, 2014 |
Net earnings (loss) |
$ 4,407 |
$ (2,571) |
$ 13,415 |
$ 10,788 |
Depreciation, amortization and net impairment losses |
12,265 |
17,312 |
54,038 |
63,724 |
Other Income1 |
- |
(6,054) |
- |
(6,054) |
Dividend income |
(409) |
(873) |
(2,298) |
(3,481) |
Interest income |
(377) |
(184) |
(994) |
(621) |
Realized (gains) losses on disposal of available-for-sale financial assets |
(4,045) |
248 |
(4,820) |
248 |
Impairment losses on available-for-sale financial assets |
384 |
2,007 |
958 |
2,699 |
Interest expense |
88 |
114 |
394 |
496 |
Income tax expense (recovery) |
1,829 |
(1,863) |
4,112 |
2,654 |
ADJUSTED EBITDA |
$ 14,142 |
$ 8,136 |
$ 64,805 |
$ 70,453 |
ADJUSTED EBITDA as % of Sales |
5.99% |
3.38% |
6.90% |
7.34% |
1 Other income comprises a gain on sale of intellectual property rights and proceeds from the settlement of a trademark dispute |
Forward-Looking Statements
All of the statements contained herein, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond the Company's control. Such risks include but are not limited to: the impact of general economic conditions, general conditions in the retail industry, seasonality, weather and other risks included in public filings of the Company, including those described in the Operating Risk Management and Financial Risk Management sections of the Company's Management Discussion and Analysis. Consequently, actual future results may differ materially from the anticipated results expressed in forward-looking statements, which reflect the Company's expectations only as of the date of this press announcement. Forward-looking statements are based upon the Company's current estimates, beliefs and assumptions, which are based on management's perception of historical trends, current conditions and currently expected future developments, as well as other factors it believes are appropriate in the circumstances. Specific forward-looking statements in this press announcement include, but are not limited to, statements with respect to the Company's anticipated future results and events, future liquidity, planned capital expenditures, amount of pension plan contributions, status and impact of systems implementation, the ability of the Company to successfully implement its strategic initiatives and cost reduction and productivity improvement initiatives as well as the impact of such initiatives. The reader should not place undue reliance on any forward-looking statements included herein. These statements speak only as of the date made and the Company is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, except to the extent required under applicable securities law.
The Company's complete financial statements including notes and Management's Discussion and Analysis for the year ended January 31, 2015 are available online at www.sedar.com.
Montreal, April 1, 2015
Jeremy H. Reitman
Chairman and Chief Executive Officer
Telephone: (514) 385-2630
Corporate Website: www.reitmans.ca
REITMANS (CANADA) LIMITED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (in thousands of Canadian dollars except per share amounts) |
|||||
For the three months ended |
For the years ended |
||||
January 31, 2015 |
February 1, 2014 |
January 31, 2015 |
February 1, 2014 |
||
Sales |
$ 236,277 |
$ 240,677 |
$ 939,376 |
$ 960,397 |
|
Cost of goods sold |
92,173 |
99,289 |
372,033 |
365,458 |
|
Gross profit |
144,104 |
141,388 |
567,343 |
594,939 |
|
Selling and distribution expenses |
127,545 |
140,307 |
507,244 |
544,448 |
|
Administrative expenses |
12,416 |
12,454 |
47,603 |
47,385 |
|
Results from operating activities |
4,143 |
(11,373) |
12,496 |
3,106 |
|
Other income |
- |
6,054 |
- |
6,054 |
|
Finance income |
4,831 |
3,254 |
8,112 |
7,725 |
|
Finance costs |
2,738 |
2,369 |
3,081 |
3,443 |
|
Earnings (loss) before income taxes |
6,236 |
(4,434) |
17,527 |
13,442 |
|
Income tax expense (recovery) |
1,829 |
(1,863) |
4,112 |
2,654 |
|
Net earnings (loss) |
$ 4,407 |
$ (2,571) |
$ 13,415 |
$ 10,788 |
|
Earnings (loss) per share: |
|||||
Basic |
$ 0.07 |
$ (0.04) |
$ 0.21 |
$ 0.17 |
|
Diluted |
0.07 |
(0.04) |
0.21 |
0.17 |
REITMANS (CANADA) LIMITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands of Canadian dollars) |
||||||
For the three months ended |
For the years ended |
|||||
January 31, 2015 |
February 1, 2014 |
January 31, 2015 |
February 1, 2014 |
|||
Net earnings (loss) |
$ 4,407 |
$ (2,571) |
$ 13,415 |
$ 10,788 |
||
Other comprehensive (loss) income |
||||||
Items that are or may be reclassified subsequently to net earnings: |
||||||
Reclassification of realized (gains) losses on available-for-sale financial assets to net earnings (net of tax of $538 for the three months and $639 for the year ended January 31, 2015; $31 for the three months and the year ended February 1, 2014) |
(3,507) |
217 |
(4,181) |
217 |
||
Net change in fair value of available-for-sale financial assets (net of tax of $681 for the three months and $557 for the year ended January 31, 2015; $170 for the three months and $592 for the year ended February 1, 2014) |
(4,462) |
(1,126) |
(3,637) |
(3,896) |
||
Reclassification of impairment loss on available-for-sale financial assets to net earnings (net of tax of $51 for the three months and $127 for the year ended January 31, 2015; $265 for the three months and $358 for the year ended February 1, 2014) |
333 |
1,742 |
831 |
2,341 |
||
Net change in fair value of cash flow hedges (net of tax of $2,177 for the three months and for the year ended January 31, 2015; 2014 - nil) |
6,026 |
- |
6,026 |
- |
||
Foreign currency translation differences |
(491) |
(194) |
(754) |
29 |
||
(2,101) |
639 |
(1,715) |
(1,309) |
|||
Items that will not be reclassified to net earnings: |
||||||
Actuarial (loss) gain on defined benefit plans (net of tax of $692 for the three months and year ended January 31, 2015; $124 for the three months and year ended February 1, 2014) |
(1,917) |
373 |
(1,917) |
373 |
||
Total other comprehensive (loss) income |
(4,018) |
1,012 |
(3,632) |
(936) |
||
Total comprehensive income (loss) |
$ 389 |
$ (1,559) |
$ 9,783 |
$ 9,852 |
REITMANS (CANADA) LIMITED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of Canadian dollars) |
|||||
As at January 31, 2015 |
As at February 1, 2014 |
||||
ASSETS |
|||||
CURRENT ASSETS |
|||||
Cash and cash equivalents |
$ 139,913 |
$ 122,355 |
|||
Marketable securities |
57,364 |
55,062 |
|||
Trade and other receivables |
4,599 |
6,422 |
|||
Derivative financial asset |
20,635 |
11,775 |
|||
Income taxes recoverable |
1,977 |
5,656 |
|||
Inventories |
106,440 |
109,601 |
|||
Prepaid expenses |
12,148 |
12,512 |
|||
Total Current Assets |
343,076 |
323,383 |
|||
NON-CURRENT ASSETS |
|||||
Property and equipment |
152,349 |
178,341 |
|||
Intangible assets |
20,077 |
17,211 |
|||
Goodwill |
42,426 |
42,426 |
|||
Deferred income taxes |
26,463 |
28,578 |
|||
Total Non-Current Assets |
241,315 |
266,556 |
|||
TOTAL ASSETS |
$ 584,391 |
$ 589,939 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
CURRENT LIABILITIES |
|||||
Trade and other payables |
$ 91,719 |
$ 90,734 |
|||
Derivative financial liability |
96 |
3,065 |
|||
Deferred revenue |
21,073 |
19,998 |
|||
Current portion of long-term debt |
1,780 |
1,672 |
|||
Total Current Liabilities |
114,668 |
115,469 |
|||
NON-CURRENT LIABILITIES |
|||||
Other payables |
9,903 |
11,842 |
|||
Deferred lease credits |
13,178 |
15,607 |
|||
Long-term debt |
3,551 |
5,331 |
|||
Pension liability |
21,968 |
18,259 |
|||
Total Non-Current Liabilities |
48,600 |
51,039 |
|||
SHAREHOLDERS' EQUITY |
|||||
Share capital |
39,227 |
39,227 |
|||
Contributed surplus |
8,014 |
7,188 |
|||
Retained earnings |
368,241 |
369,660 |
|||
Accumulated other comprehensive income |
5,641 |
7,356 |
|||
Total Shareholders' Equity |
421,123 |
423,431 |
|||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ 584,391 |
$ 589,939 |
REITMANS (CANADA) LIMITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (in thousands of Canadian dollars) |
|||||||
Share Capital |
Contributed |
Retained |
Accumulated Other |
Total |
|||
Balance as at November 2, 2014 |
$ 39,227 |
$ 7,847 |
$ 368,980 |
$ 7,742 |
$ 423,796 |
||
Total comprehensive income for the period |
|||||||
Net earnings |
- |
- |
4,407 |
- |
4,407 |
||
Total other comprehensive loss |
- |
- |
(1,917) |
(2,101) |
(4,018) |
||
Total comprehensive income for the period |
- |
- |
2,490 |
(2,101) |
389 |
||
Contributions by and distributions to owners of the Company |
|||||||
Share-based compensation costs |
- |
167 |
- |
- |
167 |
||
Dividends |
- |
- |
(3,229) |
- |
(3,229) |
||
Total contributions by and distributions to owners of the Company |
- |
167 |
(3,229) |
- |
(3,062) |
||
Balance as at January 31, 2015 |
$ 39,227 |
$ 8,014 |
$ 368,241 |
$ 5,641 |
$ 421,123 |
||
Balance as at February 2, 2014 |
$ 39,227 |
$ 7,188 |
$ 369,660 |
$ 7,356 |
$ 423,431 |
||
Total comprehensive income for the year |
|||||||
Net earnings |
- |
- |
13,415 |
- |
13,415 |
||
Total other comprehensive loss |
- |
- |
(1,917) |
(1,715) |
(3,632) |
||
Total comprehensive income for the year |
- |
- |
11,498 |
(1,715) |
9,783 |
||
Contributions by and distributions to owners of the Company |
|||||||
Share-based compensation costs |
- |
826 |
- |
- |
826 |
||
Dividends |
- |
- |
(12,917) |
- |
(12,917) |
||
Total contributions by and distributions to owners of the Company |
- |
826 |
(12,917) |
- |
(12,091) |
||
Balance as at January 31, 2015 |
$ 39,227 |
$ 8,014 |
$ 368,241 |
$ 5,641 |
$ 421,123 |
||
Share Capital |
Contributed |
Retained |
Accumulated Other |
Total |
|||
Balance as at November 3, 2013 |
$ 39,227 |
$ 7,126 |
$ 375,088 |
$ 6,717 |
$ 428,158 |
||
Total comprehensive loss for the period |
|||||||
Net loss |
- |
- |
(2,571) |
- |
(2,571) |
||
Total other comprehensive income |
- |
- |
373 |
639 |
1,012 |
||
Total comprehensive loss for the period |
- |
- |
(2,198) |
639 |
(1,559) |
||
Contributions by and distributions to owners of the Company |
|||||||
Share-based compensation costs |
- |
62 |
- |
- |
62 |
||
Dividends |
- |
- |
(3,230) |
- |
(3,230) |
||
Total contributions by and distributions to owners of the Company |
- |
62 |
(3,230) |
- |
(3,168) |
||
Balance as at February 1, 2014 |
$ 39,227 |
$ 7,188 |
$ 369,660 |
$ 7,356 |
$ 423,431 |
||
Balance as at February 3, 2013 |
$ 39,227 |
$ 6,521 |
$ 400,480 |
$ 8,665 |
$ 454,893 |
||
Total comprehensive income for the year |
|||||||
Net earnings |
- |
- |
10,788 |
- |
10,788 |
||
Total other comprehensive income (loss) |
- |
- |
373 |
(1,309) |
(936) |
||
Total comprehensive income for the year |
- |
- |
11,161 |
(1,309) |
9,852 |
||
Contributions by and distributions to owners of the Company |
|||||||
Share-based compensation costs |
- |
667 |
- |
- |
667 |
||
Dividends |
- |
- |
(41,981) |
- |
(41,981) |
||
Total contributions by and distributions to owners of the Company |
- |
667 |
(41,981) |
- |
(41,314) |
||
Balance as at February 1, 2014 |
$ 39,227 |
$ 7,188 |
$ 369,660 |
$ 7,356 |
$ 423,431 |
REITMANS (CANADA) LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of Canadian dollars) |
|||||||
For the three months ended |
For the years ended |
||||||
January 31, 2015 |
February 1, 2014 |
January 31, 2015 |
February 1, 2014 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|||||||
Net earnings (loss) |
$ 4,407 |
$ (2,571) |
$ 13,415 |
$ 10,788 |
|||
Adjustments for: |
|||||||
Depreciation, amortization and net impairment losses |
12,265 |
17,312 |
54,038 |
63,724 |
|||
Share-based compensation costs |
167 |
62 |
826 |
667 |
|||
Amortization of deferred lease credits |
(994) |
(1,110) |
(3,935) |
(4,517) |
|||
Deferred lease credits |
(122) |
104 |
1,506 |
3,319 |
|||
Pension contribution |
(166) |
(298) |
(875) |
(960) |
|||
Pension expense |
499 |
807 |
1,975 |
2,157 |
|||
Other income |
- |
(6,054) |
- |
(6,054) |
|||
Realized (gain) loss on sale of marketable securities |
(4,045) |
248 |
(4,820) |
248 |
|||
Impairment loss on available-for-sale financial assets |
384 |
2,007 |
958 |
2,699 |
|||
Net change in fair value of derivatives |
(8,650) |
(7,388) |
(3,625) |
(8,428) |
|||
Foreign exchange gain on cash and cash equivalents |
(532) |
(1,334) |
(2,120) |
(1,604) |
|||
Interest and dividend income, net |
(698) |
(695) |
(2,898) |
(3,358) |
|||
Interest paid |
(88) |
(114) |
(394) |
(496) |
|||
Interest received |
341 |
149 |
904 |
594 |
|||
Dividends received |
564 |
752 |
2,473 |
3,355 |
|||
Income tax expense |
1,829 |
(1,863) |
4,112 |
2,654 |
|||
5,161 |
14 |
61,540 |
64,788 |
||||
Changes in: |
|||||||
Trade and other receivables |
877 |
630 |
713 |
(533) |
|||
Inventories |
17,884 |
18,327 |
3,161 |
(15,945) |
|||
Prepaid expenses |
672 |
14,921 |
364 |
13,432 |
|||
Trade and other payables |
9,128 |
13,493 |
(3,007) |
20,929 |
|||
Deferred revenue |
8,651 |
13,574 |
1,075 |
3,701 |
|||
Cash from operating activities |
42,373 |
60,959 |
63,846 |
86,372 |
|||
Income taxes received |
876 |
- |
6,009 |
650 |
|||
Income taxes paid |
(871) |
- |
(4,743) |
(2,306) |
|||
Net cash flows from operating activities |
42,378 |
60,959 |
65,112 |
84,716 |
|||
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES |
|||||||
Purchases of marketable securities |
(39,719) |
(105) |
(39,904) |
(420) |
|||
Proceeds on sale of marketable securities |
25,586 |
12,500 |
33,408 |
12,500 |
|||
Proceeds on sale of trademarks |
941 |
4,329 |
1,025 |
4,329 |
|||
Additions to property and equipment and intangible assets |
(6,769) |
(5,485) |
(28,960) |
(34,524) |
|||
Proceeds on disposal of property and equipment and intangibles |
101 |
- |
101 |
- |
|||
Cash flows (used in) from investing activities |
(19,860) |
11,239 |
(34,330) |
(18,115) |
|||
CASH FLOWS USED IN FINANCING ACTIVITIES |
|||||||
Dividends paid |
(3,229) |
(3,230) |
(12,917) |
(41,981) |
|||
Repayment of long-term debt |
(429) |
(403) |
(1,672) |
(1,570) |
|||
Cash flows used in financing activities |
(3,658) |
(3,633) |
(14,589) |
(43,551) |
|||
FOREIGN EXCHANGE GAIN ON CASH HELD IN FOREIGN CURRENCY |
39 |
1,409 |
1,365 |
1,679 |
|||
NET INCREASE IN CASH AND CASH EQUIVALENTS |
18,899 |
69,974 |
17,558 |
24,729 |
|||
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD |
121,014 |
52,381 |
122,355 |
97,626 |
|||
CASH AND CASH EQUIVALENTS, END OF THE PERIOD |
$ 139,913 |
$ 122,355 |
$ 139,913 |
$ 122,355 |
SOURCE Reitmans (Canada) Limited
![](http://rt.newswire.ca/rt.gif?NewsItemId=C4194&Transmission_Id=201504011850CANADANWCANADAPR_C4194&DateId=20150401)
Jeremy H. Reitman, Chairman and Chief Executive Officer, Telephone: (514) 385-2630, Corporate Website: www.reitmans.ca
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