Le Château reports year-end results and increases regular dividend



    MONTREAL, April 12 /CNW Telbec/ - Le Château Inc. (TSX: CTU.A) today
reported that sales increased 8.9% to $303.9 million for the year ended
January 27, 2007 as compared with $279.1 million last year. Comparable store
sales increased by 3.8% versus the same period a year ago. During the year,
the Company opened ten new stores and expanded twenty existing locations,
resulting in the addition of 92,000 square feet or 12% to the Le Château
network.
    Net earnings for the year increased 5.3% to $24.8 million or $4.09 per
share from $23.5 million or $3.95 per share last year. Earnings before
interest, income taxes, depreciation and amortization (EBITDA) for the year
increased 9.5% to $52.8 million or 17.4% of sales, compared to $48.2 million
or 17.3% of sales last year. Included in expenses for the year were
non-recurring costs of approximately $732,000 relating to the strategic review
which was completed during the year.
    Le Château's CEO Jane Silverstone Segal said, "We give our customers
fashion innovation. We are relentless in finding the right product and putting
it in the store at the right time. Fashion remains, and will always remain,
the DNA of Le Château."

    Fourth quarter results
    ----------------------

    Sales rose 15.9% to $93.0 million for the fourth quarter as compared with
$80.2 million last year. Comparable store sales increased 11.0% over the same
period a year ago.
    Net earnings for the fourth quarter increased 27.0% to $8.2 million or
$1.35 per share from $6.5 million or $1.08 per share for the same quarter last
year. Earnings before interest, income taxes, depreciation and amortization
(EBITDA) for the fourth quarter increased 27.1% to $17.0 million or 18.3% of
sales, compared to $13.4 million or 16.7% of sales last year.

    First quarter of fiscal 2008
    ----------------------------

    For the first ten weeks ended April 7, 2007, total retail sales have
increased 15.6% and comparable store sales have increased 11.0% over the same
period a year ago.

    Stock split
    -----------

    The Company intends to proceed with a four-for-one stock split of its
Class A subordinate voting shares and Class B voting shares. The stock split
will be subject to approval by the Company's shareholders at the forthcoming
meeting of shareholders to be held on June 27, 2007. Further information
relating to the stock split will be provided in the Company's information
circular for the meeting.

    Dividend increase
    -----------------

    The Board of Directors has declared a quarterly dividend of
$0.50 per Class A subordinate voting share and Class B voting share (on a
pre-split basis), representing an increase of 33% from the previous dividend
rate of $0.375 per share. This is the 54th consecutive dividend declared by Le
Château, and is payable on May 25, 2007 to the shareholders of record at the
close of business on May 11, 2007.

    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 through the Company's 195 retail
locations, of which 190 are located in Canada and 5 in the New York City area.
The Company's outlets are primarily found in major urban shopping malls and
complemented with high pedestrian-traffic, street-front locations.
    The Company's 48-year tradition of vertical integration, a design and
manufacturing approach to retailing, makes it unique among Canadian fashion
merchants.

    Supplementary Earnings Measure
    ------------------------------

    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 above measure does 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.
    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 strategic initiatives and whether such
strategic 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.


    
    CONSOLIDATED BALANCE SHEETS
    ---------------------------
                                                        (Audited)   (Audited)
                                                           As at       As at
                                                      January 27, January 28,
    (In thousands of dollars)                               2007        2006
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                          $   2,743   $  17,979
    Short-term investments                                58,899      43,083
    Accounts receivable and prepaid expenses               4,457       3,746
    Inventories                                           40,967      35,444
    -------------------------------------------------------------------------
    Total current assets                                 107,066     100,252
    Fixed assets                                          78,643      65,984
    -------------------------------------------------------------------------
                                                       $ 185,709   $ 166,236
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities           $  32,870   $  27,668
    Dividend payable                                      20,992       1,507
    Income taxes payable                                     833       3,740
    Current portion of capital lease obligations           2,051       2,634
    Current portion of long-term debt                      4,392       4,212
    -------------------------------------------------------------------------
    Total current liabilities                             61,138      39,761
    Capital lease obligations                              2,288       4,339
    Long-term debt                                         5,934      10,326
    Future income taxes                                    2,891       2,365
    Deferred lease inducements                             5,284       4,200
    -------------------------------------------------------------------------
    Total liabilities                                     77,535      60,991
    -------------------------------------------------------------------------

    Shareholders' Equity
    Capital stock                                         30,221      27,210
    Contributed surplus                                    1,139         458
    Retained earnings                                     76,814      77,577
    -------------------------------------------------------------------------
    Total shareholders' equity                           108,174     105,245
    -------------------------------------------------------------------------
                                                       $ 185,709   $ 166,236
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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

                                          (Unaudited)               (Audited)
                          For the three months ended      For the year ended
    (In thousands of          January 27, January 28, January 27, January 28,
     dollars)                       2007        2006        2007        2006
    -------------------------------------------------------------------------
    Balance, beginning of
     period                    $  89,557   $  72,592   $  77,577   $  58,851
    Net earnings                   8,248       6,492      24,751      23,513
    -------------------------------------------------------------------------
                                  97,805      79,084     102,328      82,364
    Dividends declared            20,991       1,507      25,514       4,787
    -------------------------------------------------------------------------
    Balance, end of period     $  76,814   $  77,577   $  76,814   $  77,577
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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

                                          (Unaudited)               (Audited)
    (In thousands of      For the three months ended      For the year ended
     dollars,except per       January 27, January 28, January 27, January 28,
     share data)                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    Sales                      $  92,959   $  80,225   $ 303,879   $ 279,064
    -------------------------------------------------------------------------

    Cost of sales and expenses
    Cost of sales and
     selling, general and
     administrative               75,914      66,813     251,090     230,872
    Depreciation and
     amortization                  3,743       3,088      13,798      11,238
    Write-off of fixed assets        739         858       1,244       1,164
    Interest on long term debt
     and capital lease
     obligations                     233         269       1,079         803
    Interest Income                 (528)       (383)     (1,738)       (976)
    -------------------------------------------------------------------------
                                  80,101      70,645     265,473     243,101
    -------------------------------------------------------------------------
    Earnings before income
     taxes                        12,858       9,580      38,406      35,963
    Provision for income taxes     4,610       3,088      13,655      12,450
    Net earnings               $   8,248   $   6,492   $  24,751   $  23,513
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings per share
      Basic                    $    1.35   $    1.08   $    4.09   $    3.95
      Diluted                       1.33        1.05        3.98        3.82

    Weighted average number
     of shares outstanding
     ('000)                        6,092       5,999       6,045       5,953


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

                                          (Unaudited)               (Audited)
                          For the three months ended      For the year ended
    (In thousands             January 27, January 28, January 27, January 28,
     of dollars)                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net earnings               $   8,248   $   6,492   $  24,751   $  23,513
    Adjustments to determine
     net cash from operating
     activities
      Depreciation and
       amortization                3,743       3,088      13,798      11,238
      Write-off of fixed
       assets                        739         858       1,244       1,164
      Amortization of
       deferred lease
       inducements                  (264)       (215)       (874)       (732)
      Stock-based compensation       203         207         929         458
      Future income taxes            578         670         526         670
    -------------------------------------------------------------------------
                                  13,247      11,100      40,374      36,311
    Net change in non-cash
     working capital items
     related to operations         8,474      10,089      (3,939)       (620)
    Deferred lease inducements       360         820       1,958       2,445
    -------------------------------------------------------------------------
    Cash flows related to
     operating activities         22,081      22,009      38,393      38,136
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Proceeds of capital leases         -       4,943           -       4,943
    Repayment of capital lease
     obligations                    (673)       (657)     (2,634)     (1,698)
    Proceeds of long-term debt         -           -           -       8,081
    Repayment of long-term debt   (1,058)     (1,050)     (4,212)     (3,240)
    Issue of capital stock         2,590         324       2,763         817
    Dividends paid                (1,508)          -      (6,029)     (4,307)
    -------------------------------------------------------------------------
    Cash flows related to
     financing activities           (649)      3,560     (10,112)      4,596
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Increase in short-term
     investments                 (21,724)    (28,189)    (15,816)    (43,083)
    Additions to fixed assets     (4,806)     (4,588)    (27,701)    (27,655)
    -------------------------------------------------------------------------
    Cash flows related to
     investing activities        (26,530)    (32,777)    (43,517)    (70,738)
    -------------------------------------------------------------------------

    Decrease in cash and cash
     equivalents                  (5,098)     (7,208)    (15,236)    (28,006)
    Cash and cash equivalents,
     beginning of period           7,841      25,187      17,979      45,985
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period             $   2,743   $  17,979   $   2,743   $  17,979
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplementary information:
    Interest paid during the
     period                    $     233   $     269   $   1,079   $     803
    Income taxes paid during
     the period                    3,172       2,151      15,437       9,930
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    SEGMENTED INFORMATION
    ---------------------
                                          (Unaudited)               (Audited)
                          For the three months ended      For the year ended
    (In thousands of          January 27, January 28, January 27, January 28,
    dollars)                        2007        2006        2007        2006
    -------------------------------------------------------------------------
    Sales by country
    Canada                     $  90,575   $  78,061   $ 295,609   $ 271,348
    United States                  2,384       2,164       8,270       7,716
    -------------------------------------------------------------------------
                               $  92,959   $  80,225   $ 303,879   $ 279,064
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Sales by division
    Ladies' Clothing           $  51,451   $  43,211   $ 170,160   $ 153,362
    Men's Clothing                15,461      12,716      45,970      38,019
    JUNIOR GIRL Clothing             153       2,758       1,974      10,995
    Footwear                      10,003       6,973      36,905      25,128
    Accessories                   15,891      14,567      48,870      51,560
    -------------------------------------------------------------------------
                               $  92,959   $  80,225   $ 303,879   $ 279,064
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings (loss)
    Canada                     $   8,554   $   6,940   $  25,912   $  24,406
    United States                   (306)       (448)     (1,161)       (893)
    -------------------------------------------------------------------------
                               $   8,248   $   6,492   $  24,751   $  23,513
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Identifiable assets
    Canada                     $ 180,736   $ 161,217   $ 180,736   $ 161,217
    United States                  4,973       5,019       4,973       5,019
    -------------------------------------------------------------------------
                               $ 185,709   $ 166,236   $ 185,709   $ 166,236
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




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: Rick Leckner, (514) 731-0000; Source: Le Château Inc.

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