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

 

 

 

 

 

SOURCE Leon's Furniture Limited

For further information:

Dominic Scarangella, Tel: 416.243.4073


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