Le Château reports year-end results

MONTREAL, April 8 /CNW Telbec/ - Le Château Inc. (TSX: CTU.A) today reported that sales for the 52-week period ended January 30, 2010 decreased 6.9% to $321.7 million from $345.6 million for the 53-week period ended January 31, 2009. On a comparable week basis (52-week period ended January 30, 2010 versus the 52-week period ended January 31, 2009), total sales decreased 5.8% while comparable store sales decreased by 8.5%.

Net earnings for the 52-week period ended January 30, 2010 were $29.8 million compared to $38.6 million for the 53-week period ended January 31, 2009. Earnings per share (diluted) for the year were $1.22 per share versus $1.55 per share the previous year. Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the year amounted to $61.7 million or 19.2% of sales, compared to $74.5 million or 21.6% of sales last year.

During the year, the Company opened 12 stores, closed 3 and expanded 12 existing locations, resulting in the addition of 98,000 square feet or 9.4% to the Le Château network, bringing the total floor space at end of period to 1,146,000 square feet.

    
    Fourth Quarter Results
    ----------------------
    

Net earnings for the 13-week period ended January 30, 2010 were $11.4 million or $0.46 per share (diluted) compared to $13.2 million or $0.54 per share for the 14-week period ended January 31, 2009. EBITDA for the fourth quarter amounted to $20.7 million or 22.2% of sales, compared to $23.9 million or 23.3% of sales last year.

Sales decreased 9.2% to $93.2 million for the 13-week period ended January 30, 2010, compared to $102.6 million for the 14-week period ended January 31, 2009. On a comparable week basis (13-week period ended January 30, 2010 versus the 13-week period ended January 31, 2009), total sales decreased 3.5% while comparable store sales decreased by 6.7%.

    
    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 66th consecutive dividend declared by Le Château, and is payable on May 18, 2010 to the shareholders of record at the close of business on May 4, 2010.

    
    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 231 retail locations, of which 227 are located in Canada and 4 in the New York City area. The Company's outlets 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 50-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 earnings before interest, income taxes, depreciation and amortization ("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 full financial statements and Management's Discussion and Analysis for the year ended January 30, 2010 are available online at www.sedar.com

    
    CONSOLIDATED BALANCE SHEETS
    ---------------------------
                                                         As at        As at
    (Unaudited)                                     January 30,  January 31,
    (In thousands of dollars)                             2010         2009
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                        $  23,411    $  10,034
    Short-term investments                              45,000       56,643
    Accounts receivable                                  2,454        4,791
    Income taxes receivable                              1,602            -
    Derivative financial instruments                        59        1,530
    Inventories                                         61,234       54,012
    Prepaid expenses                                     1,308          778
    -------------------------------------------------------------------------
    Total current assets                               135,068      127,788
    Long-term investments                               10,000            -
    Fixed assets                                        88,437       86,156
    Intangible assets                                    2,527        2,487
    -------------------------------------------------------------------------
                                                     $ 236,032    $ 216,431
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities         $  27,151    $  25,403
    Dividend payable                                     4,293        4,239
    Income taxes payable                                     -        2,285
    Current portion of capital lease obligations             -        1,008
    Current portion of long-term debt                   11,752        8,746
    Future income taxes                                     19          487
    -------------------------------------------------------------------------
    Total current liabilities                           43,215       42,168
    Long-term debt                                      21,464       18,982
    Future income taxes                                  3,910        3,176
    Deferred lease inducements                          10,222        9,691
    -------------------------------------------------------------------------
    Total liabilities                                   78,811       74,017
    -------------------------------------------------------------------------

    Shareholders' equity
    Capital stock                                       34,335       30,997
    Contributed surplus                                  2,159        2,460
    Retained earnings                                  120,687      107,914
    Accumulated other comprehensive income                  40        1,043
    -------------------------------------------------------------------------
    Total shareholders' equity                         157,221      142,414
    -------------------------------------------------------------------------
                                                     $ 236,032    $ 216,431
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

                        For the three months ended     For the year ended
    (Unaudited)           January 30,  January 31,  January 30,  January 31,
    (In thousands               2010         2009         2010         2009
     of dollars)           (13 weeks)   (14 weeks)   (52 weeks)   (53 weeks)
    -------------------------------------------------------------------------
    Balance, beginning of
     period                $ 113,592    $ 100,020    $ 107,914    $  99,884
    Excess of cost over
     stated value of
     Class A subordinate
     voting shares
     purchased and
     cancelled                     -       (1,034)           -       (8,989)
    Net earnings              11,388       13,167       29,837       38,621
    -------------------------------------------------------------------------
                             124,980      112,153      137,751      129,516
    Dividends declared         4,293        4,239       17,064       21,602
    -------------------------------------------------------------------------
    Balance, end of
     period                $ 120,687    $ 107,914    $ 120,687    $ 107,914
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

    (Unaudited)         For the three months ended     For the year ended
    (In thousands of      January 30,  January 31,  January 30,  January 31,
     dollars, except            2010         2009         2010         2009
     per share data)       (13 weeks)   (14 weeks)   (52 weeks)   (53 weeks)
    -------------------------------------------------------------------------
    Sales                  $  93,216    $ 102,555    $ 321,733    $ 345,614
    -------------------------------------------------------------------------
    Cost of sales and
     expenses
    Cost of sales and
     selling, general and
     administrative           72,553       78,648      260,010      271,119
    Depreciation and
     amortization              4,173        4,233       17,216       16,705
    Write-off of fixed
     assets                      371          401          538          585
    Interest on long-term
     debt and capital
     lease obligations           502          426        1,503        1,798
    Interest income             (175)        (505)        (780)      (2,299)
    -------------------------------------------------------------------------
                              77,424       83,203      278,487      287,908
    -------------------------------------------------------------------------
    Earnings before income
     taxes                    15,792       19,352       43,246       57,706
    Provision for income
     taxes                     4,404        6,185       13,409       19,085
    -------------------------------------------------------------------------
    Net earnings           $  11,388    $  13,167    $  29,837    $  38,621
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings per share
      Basic                $    0.47    $    0.54    $    1.23    $    1.56
      Diluted                   0.46         0.54         1.22         1.55

    Weighted average number
     of shares outstanding
     ('000)                   24,458       24,355       24,339       24,796



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

                        For the three months ended     For the year ended
    (Unaudited)           January 30,  January 31,  January 30,  January 31,
    (In thousands               2010         2009         2010         2009
     of dollars)           (13 weeks)   (14 weeks)   (52 weeks)   (53 weeks)
    -------------------------------------------------------------------------
    Net earnings           $  11,388    $  13,167    $  29,837    $  38,621
    -------------------------------------------------------------------------
    Other comprehensive
     income
    Change in fair value
     of forward exchange
     contracts                   (27)        (194)      (1,401)       5,260
    Realized forward
     exchange contracts
     reclassified
     to net earnings            (168)      (3,336)         (70)      (3,980)
    Income tax recovery
     (expense)                    62        1,122          468         (403)
    -------------------------------------------------------------------------
                                (133)      (2,408)      (1,003)         877
    -------------------------------------------------------------------------
    Comprehensive income   $  11,255    $  10,759    $  28,834    $  39,498
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

                        For the three months ended     For the year ended
    (Unaudited)           January 30,  January 31,  January 30,  January 31,
    (In thousands               2010         2009         2010         2009
     of dollars)           (13 weeks)   (14 weeks)   (52 weeks)   (53 weeks)
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net earnings           $  11,388    $  13,167    $  29,837    $  38,621
    Adjustments to
     determine net cash
     from operating
     activities
      Depreciation and
       amortization            4,173        4,233       17,216       16,705
      Write-off of fixed
       assets                    371          401          538          585
      Amortization of
       deferred lease
       inducements              (419)        (358)      (1,540)      (1,414)
      Stock-based
       compensation               18          190          341          836
      Future income taxes        734          285          734         (642)
    -------------------------------------------------------------------------
                              16,265       17,918       47,126       54,691
    Net change in non-cash
     working capital items
     related to operations     7,756         (963)      (7,554)     (15,402)
    Deferred lease
     inducements                 150          733        2,071        2,532
    -------------------------------------------------------------------------
    Cash flows related to
     operating activities     24,171       17,688       41,643       41,821
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Repayment of capital
     lease obligations             -         (435)      (1,008)      (1,384)
    Proceeds of long-term
     debt                          -            -       15,000       18,000
    Repayment of long-term
     debt                     (2,647)      (2,432)      (9,512)     (10,074)
    Issue of capital stock
     upon exercise of
     options                   1,318            -        2,696          614
    Purchase of Class A
     subordinate voting
     shares for
     cancellation                  -       (1,303)           -      (10,537)
    Dividends paid            (4,269)      (4,278)     (17,010)     (20,496)
    -------------------------------------------------------------------------
    Cash flows related to
     financing activities     (5,598)      (8,448)      (9,834)     (23,877)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Decrease (increase) in
     short-term investments  (15,000)           -       11,643        9,711
    Increase in long-term
     investments                   -            -      (10,000)           -
    Additions to fixed
     assets and intangible
     assets                   (3,672)      (1,611)     (20,075)     (21,467)
    -------------------------------------------------------------------------
    Cash flows related to
     investing activities    (18,672)      (1,611)     (18,432)     (11,756)
    -------------------------------------------------------------------------

    Increase (decrease) in
     cash and cash
     equivalents                 (99)       7,629       13,377        6,188
    Cash and cash
     equivalents, beginning
     of period                23,510        2,405       10,034        3,846
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end of
     period                $  23,411    $  10,034    $  23,411    $  10,034
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplementary
     information:
    Interest paid during
     the period            $     502    $     426    $   1,503    $   1,798
    Income taxes paid
     during the period           (90)       4,206       15,929       22,009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

                        For the three months ended     For the year ended
    (Unaudited)           January 30,  January 31,  January 30,  January 31,
    (In thousands               2010         2009         2010        2009
     of dollars)           (13 weeks)   (14 weeks)   (52 weeks)   (53 weeks)
    -------------------------------------------------------------------------
    Sales by country
    Canada                 $  92,218    $ 100,982    $ 317,161    $ 339,660
    United States                998        1,573        4,572        5,954
    -------------------------------------------------------------------------
                           $  93,216    $ 102,555    $ 321,733    $ 345,614
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Sales by division
    Ladies' Clothing       $  50,468    $  53,549    $ 179,158    $ 190,676
    Men's Clothing            16,179       18,462       53,686       57,847
    Footwear                   9,393       10,719       35,160       38,562
    Accessories               17,176       19,825       53,729       58,529
    -------------------------------------------------------------------------
                           $  93,216    $ 102,555    $ 321,733    $ 345,614
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings (loss)
    Canada                 $  11,810    $  13,523    $  31,395    $  39,259
    United States               (422)        (356)      (1,558)        (638)
    -------------------------------------------------------------------------
                           $  11,388    $  13,167    $  29,837    $  38,621
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Fixed assets and
     intangible assets
    Canada                 $  90,296    $  87,667    $  90,296    $  87,667
    United States                668          976          668          976
    -------------------------------------------------------------------------
                           $  90,964    $  88,643    $  90,964    $  88,643
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

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; Maison Brison: Pierre Boucher, (514) 731-0000; Source: Le Château Inc.

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