Dollarama Group L.P. and Dollarama Group Holdings L.P. Announce Financial Results for First Quarter of Fiscal Year 2010



    
    Dollarama Group L.P. Highlights for the First Quarter

    - Sales Increased 15.5% Over Prior Year Period

    - Comparable Store Sales Rose by 7.5%

    - Adjusted EBITDA Increased 23.5%

    - Net Earnings Grew 88.0%

    
    MONTREAL, June 12 /PRNewswire/ -- Dollarama Group L.P. and Dollarama
Group Holdings L.P. today announced financial results for the first quarter of
fiscal year 2010, which ended May 3, 2009.  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 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.

    For the 13-week period ended May 3, 2009, Dollarama Group L.P. recorded
sales of $273.4 million, a 15.5% increase from $236.8 million the prior year. 
Comparable store sales rose 7.5% over the same quarter last year, lifted in
part by 4.0% increase in average transaction size, as well as a 3.5% increase
in store traffic.  The remaining sales growth, or $22.4 million, was driven
primarily by the incremental full period impact of the 10 stores opened during
the quarter ending May 4, 2008 and the opening of 50 new stores in the last
four quarters ending May 3, 2009.  This performance was also fueled in part by
the introduction of the new selection of items at higher price points ranging
from $1.25 to $2.00.

    Gross margin for the period was 34.1% compared to 32.4% for the same
period last year. While overall costs were generally higher, they were offset
by a gain in foreign exchange currency contracts.

    Adjusted EBITDA (as defined in the attached tables) was $36.5 million for
the 13-week period ended May 3, 2009, up 23.5% versus the prior year.

    Dollarama Group L.P.'s net earnings increased 88.0% to $18.1 million in
the first quarter of fiscal 2010, up from $9.6 million in the first quarter of
fiscal 2009.

    Dollarama Group L.P. ended the first quarter with $66.7 million in cash
compared with $32.2 million for the same period last year, largely due to the
company's increased profitability and continued efforts to improve working
capital management.

    "We are pleased to report strong financial and operating results despite
the difficult retail market environment.  We recorded solid growth in revenue
and earnings, comparable store sales, average ticket price as well as in-store
traffic," said Larry Rossy, Chief Executive Officer of Dollarama.  "While our
financial results were strong, the highlight of the quarter was the roll-out
of the new product selection, which contributed measurably to our performance.
 Our organization was well prepared, and our employees and management executed
the product introduction in a smooth, organized and efficient way.  As we will
continue to introduce new products with a great value to our customers, we
expect them to continue to have a favorable impact on performance as these
value-added items become a permanent and attractive feature within all our
stores."
    

    About Dollarama

    
    Dollarama is the leading operator of dollar discount stores in Canada. 
Currently, the company operates more than 575 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
Partnership 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 L.P.         Dollarama Group
                                                           Holdings L.P.
    (dollars in thousands)   13-Week     13-Week        13-Week     13-Week
                             Period      Period         Period      Period
                            Ended May   Ended May      Ended May   Ended May
                             3, 2009     4, 2008        3, 2009     4, 2008
    

    
    Statement of Operations
     Data:
    Sales                   $273,409    $236,815       $273,409    $236,815
    Cost of sales            180,179     160,205        180,179     160,205
    

    
    Gross profit              93,230      76,610         93,230      76,610
    Expenses:
    General administrative
     and store operating
     expenses                 58,375      48,529         58,375      48,529
    Amortization(1)            6,041       4,773          6,041       4,773
    

    Total expenses            64,416      53,302         64,416      53,302

    
    Operating income          28,814      23,308         28,814      23,308
    Interest expense(6)        9,726       9,863         15,424      15,358
    Foreign exchange loss
     (gain) on derivative
     financial instruments
     and long-term debt          955       3,768         (7,505)      8,454
    

    
    Earnings (loss) before
     income taxes             18,133       9,677         20,895        (504)
    Provision for current
     income taxes                 22          45             22          45
    

    
    Net earnings (loss) for
     the period              $18,111      $9,632        $20,873       $(549)
    

    
    Statement of Cash Flows
     Data:
    Cash flows provided by
     (used in):
      Operating activities   $19,436     $28,822        $19,436     $29,030
      Investing activities    (8,108)     (9,091)        (8,108)     (9,091)
      Financing activities   (10,722)    (13,702)       (10,718)    (13,909)
    

    
    Other Financial Data:
    Adjusted EBITDA(2)       $36,499     $29,547        $36,499     $29,547
    Capital expenditures       8,108       9,153          8,108       9,153
    Rent expenses(3)          18,823      16,635         18,823      16,635
    Gross margin(4)             34.1%       32.4%          34.1%       32.4%
    Number of stores (at end
     of period)                  577         530            577         530
    Comparable store sales
     growth(5)                   7.5%       (0.0%)          7.5%       (0.0%)

    

    
                                 Dollarama Group L.P.    Dollarama Group
                                                          Holdings L.P.
    (dollars in thousands)        As of       As of      As of       As of
                                  May 3,      May 4,     May 3,      May 4,
                                  2009        2008       2009        2008
    Balance Sheet Data:
    Cash and cash equivalents   66,729      32,229     66,751      32,244
    Merchandise inventories     52,514     186,231    252,514     186,231
    Property and equipment     131,861     115,860    131,861     115,860
    Total assets             1,340,540   1,203,876  1,340,610   1,203,914
    Long-term debt (excluding
     current portion and net
     of financing costs)       544,931     474,062    781,403     657,092
    Fair value of foreign
     currency and interest
     rate swaps                 (9,408)     84,736     (9,408)     84,736
    Long-term debt net of fair
     value of swaps            535,523     558,798    771,995     741,828
    Partners' capital          667,890     531,111    422,565     338,942
    

    
    (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 indenture governing the 8.875% senior
         subordinated notes. While an event of default under the senior
         secured credit facility or the indenture 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 (loss) to EBITDA and to Adjusted
         EBITDA is included below

    

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

    
    (dollars in thousands)   13-Week       13-Week      13-Week      13-Week
                              Period        Period       Period       Period
                              Ended         Ended        Ended        Ended
                              May 3,        May 4,       May 3,       May 4,
                               2009          2008         2009         2008
    

    
    Net earnings (loss)     $18,111        $9,632      $20,873       $(549)
    Income taxes                 22            45           22          45
    Interest expense(6)       9,726         9,863       15,424      15,358
    Amortization of fixed
     tangible and intangible
     assets                   6,041         4,773        6,041       4,773
    

    
    EBITDA                   33,900        24,313       42,360      19,627
    Foreign exchange loss
     (gain) on derivative
     financial instruments
     and long-term debt         955         3,768       (7,505)      8,454
    Management fees(a)          810           795          810         795
    Deferred lease
     inducements(b)             473           449          473         449
    Stock-based compensation
    expense(c)                  361           222          361         222
    

    Adjusted EBITDA         $36,499       $29,547      $36,499     $29,547


    
       (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 fiscal
         months relative to the same period in the prior year. We include
         sales from relocated stores and expanded stores in comparable store
         sales.
    (6)  Interest expense amount includes amortization of financing costs.



    




For further information:

For further information: Alex Stanton, for Dollarama Group,
+1-212-780-0701

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DOLLARAMA GROUP L.P.

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