LE CHÂTEAU REPORTS THIRD QUARTER RESULTS

MONTREAL, Dec. 10 /CNW Telbec/ - Le Château Inc. (TSX: CTU.A) today reported that sales for the third quarter ended October 30, 2010 decreased 1.2% to $74.4 million from $75.3 million for the third quarter ended October 31, 2009. Comparable store sales decreased by 3.5% versus the same period a year ago.

Net earnings for the third quarter ended October 30, 2010 decreased to $2.7 million from $5.6 million for the third quarter ended October 31, 2009. Earnings per share (diluted) for the third quarter were $0.11 per share versus $0.23 per share the previous year. Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the third quarter amounted to $8.7 million or 11.7% of sales, compared to $12.8 million or 17.0% of sales last year.

    
    Nine-month Results
    ------------------
    

Net earnings for the nine-month period were $15.3 million or $0.62 per share (diluted) compared to $18.4 million or $0.76 per share the previous year. EBITDA for the first nine months amounted to $36.3 million or 15.7% of sales, compared to $41.1 million or 18.0% of sales last year.

Sales increased 1.5% to $231.9 million for the nine months ended October 30, 2010, compared to $228.5 million last year. Comparable store sales decreased 2.3% versus the same period a year ago.

During the first nine months of the year, the Company opened 9 stores, closed 4 and expanded 17 existing locations, resulting in the addition of 66,000 square feet or 5.8% to the Le Château network, bringing the total floor space at end of period to 1,212,000 square feet.

In June 2010, the Toronto Stock Exchange approved the Company's previously announced normal course issuer bid to purchase up to 1,003,328 Class A subordinate voting shares. Since June 21, 2010, no Class A subordinate voting shares have been purchased by the Company.

    
    Dividend declaration
    --------------------
    

The Board of Directors has declared a quarterly dividend (constituting eligible dividends for income tax purposes) of $0.175 per Class A subordinate voting share and Class B voting share. This is the 69th consecutive dividend declared by Le Château, and is payable on February 15, 2011 to the shareholders of record at the close of business on January 28, 2011.

    
    Profile
    -------
    

Le Château is a leading Canadian brand in specialty retailing, offering a broad array of contemporary fashion apparel, accessories and footwear for style-conscious women and men. The Le Château brand is synonymous with ageless fashion at accessible prices and is sold exclusively through the Company's 238 retail locations, of which 236 are located in Canada and 2 in the New York City area. The Company's stores are primarily found in major urban shopping malls, complemented with high pedestrian-traffic, street-front locations. In addition, the Company has 9 stores under license in the Middle East.

The Company's 51-year tradition of vertical integration, a design and manufacturing approach to retailing, makes it unique among Canadian fashion merchants.

    
    Non-GAAP Measures
    -----------------
    

In addition to discussing earnings measures in accordance with Canadian generally accepted accounting principles ("GAAP"), this press release provides EBITDA as a supplementary earnings measure. Depreciation and amortization include the write-off of fixed assets. EBITDA is provided to assist readers in determining the ability of the Company to generate cash from operations and to cover financial charges. It is also widely used for valuation purposes for public companies in our industry.

The Company also discloses comparable store sales which are defined as sales generated by stores that have been opened for at least one year.

The above measures do not have a standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies.

    
    Forward-Looking Statements
    --------------------------
    

This news release may contain forward-looking statements relating to the Company and/or the environment in which it operates that are based on the Company's expectations, estimates and forecasts. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond the Company's control. A number of factors may cause actual outcomes and results to differ materially from those expressed. These factors include those set forth in other public filings of the Company. Therefore, readers should not place undue reliance on these forward-looking statements. In addition, these forward-looking statements speak only as of the date made and the Company disavows any intention or obligation to update or revise any such statements as a result of any event, circumstance or otherwise except to the extent required under applicable securities law.

Factors which could cause actual results or events to differ materially from current expectations include, among other things: the ability of the Company to successfully implement its business initiatives and whether such business initiatives will yield the expected benefits; competitive conditions in the businesses in which the Company participates; changes in consumer spending; general economic conditions and normal business uncertainty; customer preferences towards product offerings; seasonal weather patterns; fluctuations in foreign currency exchange rates; changes in the Company's relationship with its suppliers; interest rate fluctuations and other changes in borrowing costs; and changes in laws, rules and regulations applicable to the Company.

The Company's financial statements and Management's Discussion and Analysis for the third quarter ended October 30, 2010 are available online at www.sedar.com

    
    CONSOLIDATED BALANCE SHEETS
    ---------------------------
                                            As at        As at        As at
    (Unaudited)                        October 30,  October 31,  January 30,
    (In thousands of dollars)                2010         2009         2010
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents           $   9,746    $  23,510    $  23,411
    Short-term investments                 25,300       30,000       45,000
    Accounts receivable                     3,062        2,638        2,454
    Income taxes refundable                 3,608        5,278        1,602
    Derivative financial instruments           75          254           59
    Inventories                            92,281       62,750       61,234
    Prepaid expenses                        2,392        1,396        1,308
    -------------------------------------------------------------------------
    Total current assets                  136,464      125,826      135,068
    Long-term investments                       -       10,000       10,000
    Fixed assets                           95,161       89,585       88,437
    Intangible assets                       4,824        2,251        2,527
    -------------------------------------------------------------------------
                                        $ 236,449    $ 227,662    $ 236,032
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued
     liabilities                        $  30,848    $  24,859    $  27,151
    Dividend payable                        4,338        4,269        4,293
    Current portion of long-term debt      12,246       11,803       11,752
    Future income taxes                        22           81           19
    -------------------------------------------------------------------------
    Total current liabilities              47,454       41,012       43,215
    Long-term debt                         12,217       24,060       21,464
    Future income taxes                     3,910        3,176        3,910
    Deferred lease inducements             10,175       10,491       10,222
    -------------------------------------------------------------------------
    Total liabilities                      73,756       78,739       78,811
    -------------------------------------------------------------------------

    Shareholders' equity
    Capital stock                          37,707       32,683       34,335
    Contributed surplus                     1,880        2,475        2,159
    Retained earnings                     123,053      113,592      120,687
    Accumulated other comprehensive
     income                                    53          173           40
    -------------------------------------------------------------------------
    Total shareholders' equity            162,693      148,923      157,221
    -------------------------------------------------------------------------
                                        $ 236,449    $ 227,662    $ 236,032
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
    --------------------------------------------

                                   For the                   For the
    (Unaudited)              three months ended         nine months ended
    (In thousands         October 30,  October 31,  October 30,  October 31,
     of dollars)                2010         2009         2010         2009
    -------------------------------------------------------------------------
    Balance, beginning
     of period             $ 124,705    $ 112,263    $ 120,687    $ 107,914
    Net earnings               2,686        5,599       15,327       18,449
    -------------------------------------------------------------------------
                             127,391      117,862      136,014      126,363
    Dividends declared         4,338        4,270       12,961       12,771
    -------------------------------------------------------------------------
    Balance, end of
     period                $ 123,053    $ 113,592    $ 123,053    $ 113,592
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF EARNINGS
    -----------------------------------

    (Unaudited)                    For the                   For the
    (In thousands of         three months ended         nine months ended
     dollars, except      October 30,  October 31,  October 30,  October 31,
     per share data)            2010         2009         2010         2009
    -------------------------------------------------------------------------
    Sales                  $  74,458    $  75,305    $ 231,890    $ 228,517
    -------------------------------------------------------------------------

    Cost of sales and
     expenses
    Cost of sales and
     selling, general
     and administrative       65,722       62,509      195,588      187,457
    Depreciation and
     amortization              4,470        4,256       13,029       13,043
    Write-off of fixed
     assets                      168           78          383          167
    Interest on long-term
     debt and capital
     lease obligations           363          298        1,209        1,001
    Interest income             (146)        (170)        (456)        (605)
    -------------------------------------------------------------------------
                              70,577       66,971      209,753      201,063
    -------------------------------------------------------------------------
    Earnings before
     income taxes              3,881        8,334       22,137       27,454
    Provision for income
     taxes                     1,195        2,735        6,810        9,005
    -------------------------------------------------------------------------
    Net earnings           $   2,686    $   5,599    $  15,327    $  18,449
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings per share
      Basic                $    0.11    $    0.23    $    0.62    $    0.76
      Diluted                   0.11         0.23         0.62         0.76

    Weighted average
     number of shares
     outstanding ('000)       24,700       24,365       24,628       24,300


    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    -----------------------------------------------

                                   For the                   For the
    (Unaudited)              three months ended         nine months ended
    (In thousands         October 30,  October 31,  October 30,  October 31,
     of dollars)                2010         2009         2010         2009
    -------------------------------------------------------------------------
    Net earnings           $   2,686    $   5,599    $  15,327    $  18,449
    -------------------------------------------------------------------------
    Other comprehensive
     income
    Change in fair value
     of forward exchange
     contracts                    73          329          368       (1,374)
    Realized forward
     exchange contracts
     reclassified to
     net earnings               (256)       1,202         (352)          98
    Income tax recovery
     (expense)                    55         (487)          (3)         406
    -------------------------------------------------------------------------
                                (128)       1,044           13         (870)
    -------------------------------------------------------------------------
    Comprehensive income   $   2,558    $   6,643    $  15,340    $  17,579
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF CASH FLOWS
    -------------------------------------

                                   For the                   For the
    (Unaudited)              three months ended         nine months ended
    (In thousands         October 30,  October 31,  October 30,  October 31,
     of dollars)                2010         2009         2010         2009
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net earnings           $   2,686    $   5,599    $  15,327    $  18,449
    Adjustments to
     determine net cash
     from operating
     activities
      Depreciation and
       amortization            4,470        4,256       13,029       13,043
      Write-off of
       fixed assets              168           78          383          167
      Amortization of
       deferred lease
       inducements              (431)        (392)      (1,300)      (1,121)
      Stock-based
       compensation              154          160          377          323
    -------------------------------------------------------------------------
                               7,047        9,701       27,816       30,861
    Net change in
     non-cash working
     capital items
     related to operations   (13,608)        (610)     (31,048)     (15,310)
    Deferred lease
     inducements                 578          745        1,253        1,921
    -------------------------------------------------------------------------
    Cash flows related to
     operating activities     (5,983)       9,836       (1,979)      17,472
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Repayment of capital
     lease obligations             -         (341)           -       (1,008)
    Proceeds of long-term
     debt                          -       15,000            -       15,000
    Repayment of long-term
     debt                     (2,560)      (2,231)      (8,753)      (6,865)
    Issue of capital
     stock upon exercise
     of options                1,646          368        2,716        1,378
    Dividends paid            (4,313)      (4,263)     (12,916)     (12,741)
    -------------------------------------------------------------------------
    Cash flows related to
     financing activities     (5,227)       8,533      (18,953)      (4,236)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Decrease (increase) in
     short-term investments   13,320      (10,000)      19,700       26,643
    Decrease (increase) in
     long-term investments         -            -       10,000      (10,000)
    Additions to fixed
     assets and intangible
     assets                   (8,331)      (4,485)     (22,433)     (16,403)
    -------------------------------------------------------------------------
    Cash flows related to
     investing activities      4,989      (14,485)       7,267          240
    -------------------------------------------------------------------------

    Increase (decrease)
     in cash and cash
     equivalents              (6,221)       3,884      (13,665)      13,476
    Cash and cash
     equivalents,
     beginning of period      15,967       19,626       23,411       10,034
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end
     of period             $   9,746    $  23,510    $   9,746    $  23,510
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplementary
     information:
    Interest paid during
     the period            $     363    $     298    $   1,209    $   1,001
    Income taxes paid
     during the period         2,863        4,675        8,456       16,019
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    SEGMENTED INFORMATION
    ---------------------

                                   For the                   For the
    (Unaudited)              three months ended         nine months ended
    (In thousands         October 30,  October 31,  October 30,  October 31,
     of dollars)                2010         2009         2010         2009
    -------------------------------------------------------------------------
    Sales by country
    Canada                 $  73,903    $  74,425    $ 229,538    $ 224,943
    United States                555          880        2,352        3,574
    -------------------------------------------------------------------------
                           $  74,458    $  75,305    $ 231,890    $ 228,517
    -------------------------------------------------------------------------

    Sales by division
    Ladies' Clothing       $  43,635    $  42,118    $ 136,691    $ 128,690
    Men's Clothing            12,315       12,088       37,512       37,507
    Footwear                   8,166        9,055       24,364       25,767
    Accessories               10,342       12,044       33,323       36,553
    -------------------------------------------------------------------------
                           $  74,458    $  75,305    $ 231,890    $ 228,517
    -------------------------------------------------------------------------

    Net earnings (loss)
    Canada                 $   3,215    $   6,158    $  16,654    $  19,585
    United States               (529)        (559)      (1,327)      (1,136)
    -------------------------------------------------------------------------
                           $   2,686    $   5,599    $  15,327    $  18,449
    -------------------------------------------------------------------------

    Fixed assets and
     intangible assets
    Canada                 $  99,416    $  91,037    $  99,416    $  91,037
    United States                569          799          569          799
    -------------------------------------------------------------------------
                           $  99,985    $  91,836    $  99,985    $  91,836
    -------------------------------------------------------------------------
    

SOURCE Le Château Inc.

For further information: For further information: Emilia Di Raddo, CA, President, (514) 738-7000; Johnny Del Ciancio, CA, Vice-President, Finance, (514) 738-7000; MaisonBrison: Pierre Boucher, (514) 731-0000; Source: Le Château Inc.

Organization Profile

Le Château Inc.

More on this organization

MaisonBrison Communications

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890