Dollarama Group L.P. and Dollarama Group Holdings L.P. Announce Fourth Quarter and Fiscal Year 2009 Results



    
    Group L.P. Highlights for the Fourth Quarter ended February 1, 2009

    - Sales increased 12.1% over prior year period

    - Comparable store sales rose 4.8%

    - Adjusted EBITDA increased 8.4%

    Group L.P. Highlights for Fiscal Year 2009 ended February 1, 2009

    - Sales increased 12.0% over prior year period

    - Comparable store sales rose 3.4%

    - Adjusted EBITDA increased 4.2%

    
    MONTREAL, April 17 /PRNewswire/ -- Dollarama Group L.P. and Dollarama
Group Holdings L.P., today announced financial results for the fourth quarter
and fiscal year ended February 1, 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, 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.
    

    Fourth Quarter results
    
    For the 13-week period ended February 1, 2009, Dollarama reported a sales
increase of $34.2 million, or 12.1% over the prior year period.  Net sales
totalled $315.5 million compared to $281.4 million for the 13-week period
ended February 3, 2008.  Comparable store sales rose 4.8% over the same
quarter last year.  The increase was partly attributable to a 3.8% increase in
the average transaction size, as well as a 1.0% increase in store traffic. 
The remaining portion of the sales growth was driven primarily by 47 new store
openings (offset by the closure of four stores) since the end of the fourth
quarter of fiscal year 2008, and by the full 13-week effect of the 16 stores
opened during the fourth quarter of last year.
    

    
    Gross margin for the period was 34.6%, compared to 35.0% for the same
period last year, mainly due to higher product, labour, freight, and occupancy
costs.  These costs were partially offset by a $1.8 million positive effect on
the cost of goods sold resulting from the adoption of a new GAAP standard
which includes in inventory certain supply chain costs associated with
purchasing in bulk and the redistribution of merchandise within the store
network.  In all prior years, these supply chain costs were treated as period
costs.
    

    
    Adjusted EBITDA (as defined in the tables below) was $48.6 million for
the 13-week period ended February 1, 2009, up 8.4% versus the prior year.
    

    
    Dollarama Group L.P. recorded net earnings of $30.3 million for the
fourth quarter of fiscal year 2009, up from $27.7 million for the
corresponding quarter in fiscal year 2008.  Sales growth and lower interest
costs contributed to the increase.  Higher cost of goods sold, higher general
administration and store expenses, and a foreign exchange loss on derivative
financial instruments and long-term debt partially offset the earnings
increase.
    

    
    Dollarama Group Holdings' net earnings rose to $20.5 million in the
fourth fiscal quarter of 2009, up from $10.8 million last year, due to the
same factors affecting Dollarama Group L.P.'s net earnings, as well as a
smaller foreign exchange loss as compared to the fourth quarter of fiscal
2008.
    

    Fiscal Year 2009 Results
    
    For the fiscal year ended February 1, 2009, Dollarama Group L.P. reported
sales of $1.1 billion, a 12.0% increase over the $972.4 million in sales
recorded for the fiscal year ended February 3, 2008.
    

    
    Comparable store sales rose 3.4% over the same period a year ago, driven
by a 3.9% increase in the average transaction size per customer that was
slightly offset by a 0.5% decrease in store traffic.  The remaining portion of
the sales growth was driven primarily by the incremental full period impact of
the 47 new store openings (offset by the closure of four stores) in the last
four quarters ending February 1, 2009, and by the full effect of the 61 stores
opened (offset by the closure of three stores) during fiscal year 2008.
    

    
    Gross margin was 34.1%, even with the previous fiscal year.  Higher
transportation, freight, and occupancy costs were offset by a positive effect
of $1.8 million on the cost of goods sold resulting from adoption of a new
GAAP standard with respect to inventory that better reflects the total costs
included in the supply chain, which involve purchasing in bulk and
redistribution of the goods within the store network.  Without the change in
accounting policy, gross margin for fiscal year 2009 would have been 34.0%.
    

    Adjusted EBITDA was $158.4 million, a 4.2% increase versus the previous
year.

    
    Dollarama Group L.P.'s net earnings for fiscal year 2009 increased to
$90.1 million, from $76.8 million in fiscal year 2008.  Sales growth, lower
interest costs and a gain on foreign exchange on derivative financial
instruments and long-term debt contributed to the increase.  Higher general
administration and store expenses, and increased amortization of property and
equipment -- both associated with the growth of the business -- partially
offset the earnings increase.
    

    
    For Dollarama Group Holdings, net earnings decreased to $24.0 million for
the fiscal year 2009 from $88.9 million in the prior year.  This was due to
the same factors affecting Dollarama Group L.P.'s net earnings, and was
further reduced by the foreign exchange loss on long-term debt on the
outstanding senior deferred notes.
    

    
    The partnership's efforts to improve its working capital continued to
have a favourable impact.  Dollarama ended fiscal year 2009 with $66.1 million
in cash compared to $26.2 million at the end of fiscal 2008.
    

    
    "I am very encouraged by Dollarama's financial and operating performance
in fiscal year 2009 during a challenging economic environment," said Larry
Rossy, Chief Executive Officer of Dollarama Group L.P.  "We recorded solid
sales growth driven by new store openings and healthy comparable store sales
growth.  Strong operations management including improved store replenishment
and in-store execution and completion of our chain-wide debit card roll-out
contributed to increased revenue and earnings.
    

    
    "As we embark on a new fiscal year, our priorities and initiatives will
continue to focus on growing and improving operations and on enhancing our
recently-introduced new product offering at select price points greater than
$1.00.  In the near term, we will continue to research our customers' needs
and remain proactive in implementing and improving merchandising and in-store
processes to support this initiative."
    

    About Dollarama
    
    Dollarama is the leading operator of discount retail stores in Canada.
Currently, the company operates more than 565 stores, each offering a broad
assortment of quality everyday merchandise sold in individual or multiple
units primarily at fixed prices of $1.00, $1.25, $1.50 and $2.00. 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 L.P.
    

    
                                    13-Week   13-Week
                                    Period    Period      Year       Year
                                     Ended     Ended      Ended      Ended
                                   February  February   February   February
    (dollars in thousands)          1, 2009   3, 2008    1, 2009    3, 2008
    

    
    Statement of Operations Data:
    Sales                          $315,546  $281,367  $1,089,011  $972,352
    Cost of sales                   206,438   182,772     717,141   640,885
    

    
    Gross profit                    109,108    98,595     371,870   331,467
    Expenses:
    General administrative and
     store operating expenses        62,530    55,257     219,797   186,263
    Amortization(1)                   5,980     5,463      21,818    18,389
    

    
    Total expenses                   68,510    60,720     241,615   204,652
    

    
    Operating income                 40,598    37,875     130,255   126,815
    Other (income)/expense:
    Amortization of
     financing costs                  1,040     1,040       4,186     4,275
    Interest expense                  8,616    10,560      36,129    43,299
    Foreign exchange loss (gain)
     on derivative financial
     instruments and long-term debt     670    (1,432)       (387)    2,183
    

    
    Earnings before income taxes     30,272    27,707      90,327    77,058
    Provision for current income
     taxes                               19        13         218       280
    

    
    Net earnings                    $30,253   $27,694     $90,109   $76,778
    

    
    Statement of Cash Flows Data:
    Cash flows provided by
     (used in):
      Operating activities          $13,513   $57,737    $118,008   $79,109
      Investing activities          (14,118)  (11,469)    (49,728)  (45,562)
      Financing activities              394   (21,897)    (28,357)  (55,042)
    

    
    Other Financial Data:
    Adjusted EBITDA(2)              $48,568   $44,797    $158,421  $152,075
    Capital expenditures            $14,557   $11,671     $40,502   $45,994
    Rent expenses(3)                $18,520   $15,677     $68,981   $58,765
    Gross margin(4)                    34.6%     35.0%       34.1%     34.1%
    Number of stores
     (at end of period)                 564       521         564       521
    Comparable store sales
     growth(5)                          4.8%     (3.4%)       3.4%     (1.5%)
    



    
                                          Dollarama Group Holdings L.P.
    

    
                                    13-Week   13-Week
                                    Period    Period       Year      Year
                                     Ended     Ended       Ended     Ended
                                   February  February    February  February
    (dollars in thousands)          1, 2009   3, 2008     1, 2009   3, 2008
    

    
    Statement of Operations Data:
    Sales                          $315,546  $281,367  $1,089,011  $972,352
    Cost of sales                   206,438   182,772     717,141   640,885
    

    
    Gross profit                    109,108    98,595     371,870   331,467
    Expenses:
    General administrative and
     store operating expenses        62,530    55,259     219,823   186,265
    Amortization(1)                   5,980     5,463      21,818    18,389
    

    
    Total expenses                   68,510    60,722     241,641   204,654
    

    
    Operating income                 40,598    37,873     130,229   126,813
    Other (income)/expense:
    Amortization of
     financing costs                  1,481     1,270       5,802     6,340
    Interest expense                 13,609    15,754      55,390    65,713
    Foreign exchange loss (gain)
     on derivative financial
     instruments and long-term debt   5,007    10,027      44,793   (34,411)
    

    
    Earnings before income taxes     20,501    10,882      24,244    89,171
    Provision for current income
     taxes                               19        12         241       302
    

    
    Net earnings                    $20,482   $10,810     $24,003   $88,869
    

    
    Statement of Cash Flows Data:
    Cash flows provided by (used in):
      Operating activities          $13,513   $47,378    $118,216   $57,258
      Investing activities          (14,118)  (11,469)    (49,728)  (45,562)
      Financing activities              395   (11,524)    (28,561)  (33,185)
    

    
    Other Financial Data:
    Adjusted EBITDA(2)              $48,568   $44,795    $158,395  $152,073
    Capital expenditures            $14,557   $11,671     $40,502   $45,994
    Rent expenses(3)                $18,520   $15,677     $68,981   $58,765
    Gross margin(4)                    34.6%     35.0%       34.1%     34.1%
    Number of stores
     (at end of period)                 564       521         564       521
    Comparable store sales
     growth(5)                          4.8%     (3.4%)       3.4%     (1.5%)
    



    
                                                          Dollarama Group
                                 Dollarama Group L.P.      Holdings L.P.
                                   As of      As of      As of      As of
                                 February   February   February   February
    (dollars in thousands)        1, 2009    3, 2008    1, 2009    3, 2008
    

    
    Balance Sheet Data:
    Cash and cash equivalents     $66,123    $26,200    $66,141    $26,214
    Merchandise inventories       249,644    198,500    249,644    198,500
    Property and equipment        129,878    111,936    129,878    111,936
    Total assets                1,362,993  1,197,951  1,363,041  1,197,983
    

    
    Long-term debt (including
     current portion less
     financing costs)             577,319    500,287    821,686    678,740
    Fair value of foreign
     currency and interest rate
     swaps                        (33,423)    89,732    (33,423)    89,732
    Long-term debt less fair
     value of swaps               543,896    590,019    788,263    768,472
    Partners' capital             684,561    513,150    436,470    331,161
    


    
    (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.
                                 13-Week    13-Week
                                 Period     Period      Year       Year
                                  Ended      Ended      Ended      Ended
                                February   February   February   February
    (dollars in thousands)       1, 2009    3, 2008    1, 2009    3, 2008
    

    
    Net earnings                 $30,253    $27,694    $90,109    $76,778
    Provision for current
     income taxes                     19         13        218        280
    Interest expense               8,616     10,560     36,129     43,299
      Amortization of financing
       costs                       1,040      1,040      4,186      4,275
      Amortization of fixed
       assets                      5,980      5,463     21,818     18,389
    

    
    EBITDA                        45,908     44,770    152,460    143,021
      Foreign exchange loss
       (gain) on derivative
       financial instruments
       and long-term debt            670     (1,432)      (387)     2,183
      Management fees(a)             912        872      3,331      3,247
      Deferred lease
       inducements(b)                952        354      2,276      2,312
      Stock-based
       compensation expense(c)       126        233        741      1,312
    

    
    Adjusted EBITDA              $48,568    $44,797   $158,421   $152,075
    



    
                                       Dollarama Group Holdings L.P.
                                 13-Week    13-Week
                                 Period     Period      Year       Year
                                  Ended      Ended      Ended      Ended
                                February   February   February   February
    (dollars in thousands)       1, 2009    3, 2008    1, 2009    3, 2008
    

    
    Net earnings                 $20,482    $10,810    $24,003    $88,869
    Provision for current
     income taxes                     19         12        241        302
    Interest expense              13,609     15,754     55,390     65,713
      Amortization of financing
       costs                       1,481      1,270      5,802      6,340
      Amortization of fixed
       assets                      5,980      5,463     21,818     18,389
    

    
    EBITDA                        41,571     33,309    107,254    179,613
      Foreign exchange loss
       (gain) on derivative
       financial instruments
       and long-term debt          5,007     10,027     44,793    (34,411)
      Management fees(a)             912        872      3,331      3,247
      Deferred lease
       inducements(b)                952        354      2,276      2,312
      Stock-based
       compensation expense(c)       126        233        741      1,312
    

    
    Adjusted EBITDA              $48,568    $44,795   $158,395   $152,073
    


    
       (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 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, +1-514-737-1006 x1238, or Media, Alex Stanton of Stanton Public
Relations & Marketing, +1-212-366-5300, astanton@stantonprm.com

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DOLLARAMA GROUP L.P.

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