Dollarama Group Holdings L.P. and Dollarama Group L.P. Announce Financial Results for First Quarter of Fiscal Year 2009



    MONTREAL, June 16 /CNW/ - Dollarama Group Holdings L.P. and Dollarama
Group L.P. today announced financial results for the first quarter ended May
4, 2008. The results of operations of Dollarama Group Holdings L.P. are almost
identical to those of Dollarama Group L.P., with the main exception being
interest expense, financing costs and foreign exchange gain or loss associated
with Dollarama Group Holdings L.P.'s outstanding balance of senior floating
rate deferred interest notes. Note: All dollar amounts in this press release
are in Canadian dollars unless otherwise indicated.
    Dollarama Group Holdings L.P. reported that sales increased
$20.9 million, or 9.7%, to $236.8 million for the 13-week period ended May 4,
2008, up from $215.9 million for the same period in the prior year.  Sales
growth was driven primarily by 53 new store openings since the end of the
first quarter of fiscal year 2008 and by the full 13-week effect of the stores
opened during the first quarter of last year.  Comparable stores sales were
flat year over year.
    Adjusted EBITDA (as defined in the attached tables) was $29.5 million for
the 13-week period ended May 4, 2008, flat versus the prior year.
    "The first quarter was impacted by very harsh winter conditions across
Canada as record snow accumulation led to the temporary closure of more than
30 stores for an average period of two days each.  We also encountered some
major logistical issues as a result of the bad weather.  Our sales were also
affected by the Easter holiday, which fell in March this year," said Larry
Rossy, Chief Executive Officer of Dollarama.  "Despite these circumstances, I
am pleased that our same store sales were flat for the quarter.  I believe
this is indicative of the significant progress we are making on our various
operational initiatives as we continue to focus on improving our execution."

    About Dollarama

    Dollarama is the leading operator of dollar discount stores in Canada.
Currently, the company operates more than 530 stores in 10 provinces, each
offering a broad assortment of quality everyday merchandise sold in individual
or multiple units primarily at a fixed price of $1.00.  All stores are
company-operated, and nearly all are located in high traffic areas such as
strip malls and shopping centers in various locations, including metropolitan
areas, mid-sized cities, and small towns.  In 1910, the company was
established as a single variety store in Quebec.

    Safe Harbor for Forward-Looking and Cautionary Statements

    This release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended.  As such, final results could
differ from estimates or expectations due to risks and uncertainties,
including among others, changes in customer demand for products, changes in
raw material and equipment costs and availability, seasonal changes in
customer demand, pricing actions by competitors and general changes in
economic conditions; and other risks.  For any of these factors, the Company
claims the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995, as amended.



    Summary Consolidated Financial Data

    
                                    Dollarama Group     Dollarama Group L.P.
                                     Holdings L.P.

                                 13-Week     13-Week     13-Week      13-Week
                                  Period      Period      Period       Period
                                   Ended       Ended       Ended        Ended
                                  May 4,      May 6,      May 4,       May 6,
    (dollars in thousands)          2008        2007        2008         2007


    Statement of Operations Data:
    Sales                        $236,815    $215,875   $236,815    $215,875
    Cost of sales                 160,205     145,296    160,205     145,296

    Gross profit                   76,610      70,579     76,610      70,579
    Expenses:
    General administrative and
     store operating expenses      48,529      43,317     48,529      43,317
    Amortization(1)                 4,773       4,099      4,773       4,099

    Total expenses                 53,302      47,416     53,302      47,416

    Operating income               23,308      23,163     23,308      23,163
    Other (income)/expense:
    Amortization of financing
     costs                          1,243       1,615        997       1,068
    Interest expense               14,115      17,262      8,866      11,027
    Foreign exchange loss
     (gain) on derivative
     financial instruments
     and long-term debt             8,454     (14,228)     3,768         866

    Earnings before income taxes     (504)     18,514      9,677      10,202
    Income taxes                       45          42         45          42

    Net earnings                    $(549)    $18,472     $9,632     $10,160

    Statement of Cash Flows Data:
    Cash flows provided by (used in):
      Operating activities        $29,030     $12,484    $28,822     $12,264
      Investing activities         (9,091)    (10,581)    (9,091)    (10,581)
      Financing activities        (13,909)     (1,926)   (13,702)     (1,707)

    Other Financial Data:
    Adjusted EBITDA(2)            $29,547     $29,548    $29,547     $29,548
    Capital expenditures           $9,153     $10,619     $9,153     $10,619
    Rent expenses(3)              $16,635     $13,796    $16,635     $13,796
    Gross margin(4)                  32.4%       32.7%      32.4%       32.7%
    Number of stores (at end of
     period)                          530         477        530         477
    Comparable store sales
     growth(5)                      (0.0%)      (1.8%)     (0.0%)      (1.8%)



                                   Dollarama Group     Dollarama Group L.P.
                                    Holdings L.P.

                                   As of       As of      As of       As of
                                   May 4,      May 6,     May 4,      May 6,
    (dollars in thousands)          2008        2007       2008        2007

    Balance Sheet Data:
    Cash and cash equivalents     $32,244     $47,680    $32,229     $47,671

    Merchandise inventories       186,231     163,813    186,231     163,813

    Property and equipment        115,860      91,277    115,860      91,277

    Total assets                1,203,914   1,167,932  1,203,876   1,168,163

    Long-term debt                657,092     754,126    474,062     540,037
    Partners' capital             338,942     266,265    531,111     490,006



    (1) Amortization represents amortization of tangible and amortizable
        intangible assets, including amortization of favourable and
        unfavourable lease rights.
    (2) EBITDA represents net income (loss) before net interest expense,
        income taxes, and depreciation and amortization expense. Adjusted
        EBITDA represents EBITDA as further adjusted to reflect items set
        forth in the table below, all of which are required in determining
        our compliance with financial covenants under our senior secured
        credit facility. We have included EBITDA and Adjusted EBITDA to
        provide investors with a supplemental measure of our operating
        performance and information about the calculation of some of the
        financial covenants that are contained in the senior secured credit
        facility. We believe EBITDA is an important supplemental measure of
        operating performance because it eliminates items that have less
        bearing on our operating performance and thus highlights trends in
        our core business that may not otherwise be apparent when relying
        solely on Canadian GAAP financial measures. We also believe that
        securities analysts, investors and other interested parties
        frequently use EBITDA in the evaluation of issuers, many of which
        present EBITDA when reporting their results. Adjusted EBITDA is a
        material component of the covenants imposed on us by the senior
        secured credit facility. Under the senior secured credit facility, we
        are subject to financial covenant ratios that are calculated by
        reference to Adjusted EBITDA. Non-compliance with the financial
        covenants contained in our senior secured credit facility could
        result in a default, an acceleration in the repayment of amounts
        outstanding under the senior secured credit facility, and a
        termination of the lending commitments under the senior secured
        credit facility. Generally, any default under the senior secured
        credit facility that results in the acceleration in the repayment of
        amounts outstanding under the senior secured credit facility would
        result in a default under the indentures governing the 8.875% senior
        subordinated notes and the senior floating rate deferred interest
        notes. While an event of default under the senior secured credit
        facility or the indentures is continuing, we would be precluded from,
        among other things, paying dividends on our capital stock or
        borrowing under the revolving credit facility. Our management also
        uses EBITDA and Adjusted EBITDA in order to facilitate operating
        performance comparisons from period to period, prepare annual
        operating budgets and assess our ability to meet our future debt
        service, capital expenditure and working capital requirements and our
        ability to pay dividends on our capital stock.

        EBITDA and Adjusted EBITDA are not presentations made in accordance
        with Canadian GAAP. As discussed above, we believe that the
        presentation of EBITDA and Adjusted EBITDA in this summary
        consolidated financial data section is appropriate. However, EBITDA
        and Adjusted EBITDA have important limitations as analytical tools,
        and you should not consider them in isolation, or as substitutes for
        analysis of our results as reported under Canadian GAAP. For example,
        neither EBITDA nor Adjusted EBITDA reflect (a) our cash expenditures,
        or future requirements for capital expenditures or contractual
        commitments; (b) changes in, or cash requirements for, our working
        capital needs; (c) the significant interest expense, or the cash
        requirements necessary to service interest or principal payments, on
        our debt; and (d) tax payments or distributions to our parent to make
        payments with respect to taxes attributable to us that represent a
        reduction in cash available to us. Because of these limitations, we
        primarily rely on our results as reported in accordance with Canadian
        GAAP and use EBITDA and Adjusted EBITDA only supplementally. In
        addition, because other companies may calculate EBITDA and Adjusted
        EBITDA differently than we do, EBITDA may not be, and Adjusted EBITDA
        as presented in this summary consolidated financial data section is
        not, comparable to similarly titled measures reported by other
        companies.


    A reconciliation of net earnings to EBITDA and to Adjusted EBITDA is
included below:


                                  Dollarama Group      Dollarama Group L.P.
                                   Holdings L.P.

                                13-Week      13-Week      13-Week     13-Week
                                 Period       Period       Period      Period
                                  Ended        Ended        Ended       Ended
                                 May 4,       May 6,       May 4,      May 6,
    (dollars in thousands)         2008         2007         2008        2007

    Net earnings                  $(549)     $18,472       $9,632     $10,160
    Income taxes                     45           42           45          42
    Interest expense             14,115       17,262        8,866      11,027
    Amortization of financing
     costs                        1,243        1,615          997       1,068
    Amortization of fixed
     tangible and intangible
     assets                       4,773        4,099        4,773       4,099

    EBITDA                       19,627       41,490       24,313      26,396
    Foreign exchange loss
     (gain) on derivative
     financial instruments
     and long-term debt           8,454      (14,228)       3,768         866
    Management fees(a)              795          834          795         834
    Deferred lease inducements(b)   449          709          449         709
    Stock-based compensation
     expense(c)                     222          743          222         743

    Adjusted EBITDA             $29,547      $29,548      $29,547     $29,548


       (a) Reflects the management fees incurred and paid or payable to the
           company's majority owners.
       (b) Represents the elimination of non-cash straight-line rent expense.
       (c) Represents the elimination of non-cash stock-based compensation
           expense.

    (3) Rent expense represents (i) basic rent expense on a straight-line
        basis and (ii) contingent rent expense, net of amortization of
        inducements received from landlords.
    (4) Gross margin represents gross profit as a percentage of sales.
    (5) Comparable store sales is a measure of the percentage increase or
        decrease of the sales of stores open for at least 13 complete months
        and that remain open at the end of the reporting period relative to
        the same period in the prior year.  We include sales from stores
        expanded or relocated in the calculation of comparable store sales.
        To provide more meaningful results, the company measures comparable
        store sales over periods containing an integral number of weeks
        beginning on a Monday and ending on a Sunday that best approximate
        the fiscal period to be analyzed.
    




For further information:

For further information: Investors, Robert Coallier, Chief Financial
Officer of Dollarama Group Holdings L.P., +1-514-737-1006 x1238; Media, Alex
Stanton of Stanton Crenshaw Communications, +1-212-780-0701,
alex@stantoncrenshaw.com

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DOLLARAMA GROUP HOLDINGS L.P.

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