Pet Valu reports 2007 first quarter net income of US$1,749,000



    All financial results are expressed in U.S. dollars unless otherwise
    indicated

    MARKHAM, ON, April 30 /CNW/ - Pet Valu, Inc. announced today unaudited
first quarter results for fiscal 2007. On a consolidated basis, net income was
$1.7 million or $0.20 per share as compared to $0.9 million or $0.12 per share
for the first quarter of fiscal 2006. Earnings per share for the most recent
52 week period ending March 31, 2007 were $1.01 or C$1.15 based on the average
exchange rate for the trailing twelve month period ending March 31, 2007 of
1.1384.

    
    (in thousands of U.S. dollars, except EPS)

                                              13 Weeks ended  13 Weeks ended
                                              March 31, 2007   April 1, 2006
    No. of Stores                                        350             350
    Sales and Revenue                                $35,893         $34,081
    Gross Profit                                     $10,246          $9,223
    EBITDA (1)                                        $3,528          $2,736
    EBITDA excluding non-comparable items             $3,528          $2,820

    Net Income                                        $1,749            $922
    Net Income excluding non-comparable items (2)     $1,749            $976

    Basic EPS                                          $0.20           $0.12
    Fully Diluted EPS                                  $0.17           $0.11

    Basic EPS excluding non-comparable items (3)       $0.20           $0.13
    Diluted EPS excluding non-comparable items         $0.17           $0.11

    Non-comparable items (before tax)
    Financing initiatives costs                            -             $84
    Applicable tax on non-comparable items                 -            ($30)
    

    NON-COMPARABLE ITEMS

    Non-comparable items in fiscal 2006 included legal and other costs
related to a financing initiative that was ultimately not pursued.

    SALES

    Comparable store sales for the thirteen week period ending March 31, 2007
increased by 5.6% in Canada and by 2.4% in the U.S. as compared to the
thirteen week period ending April 1, 2006. During the quarter, the Company
continued with the implementation of programs designed to shift its product
offering to higher-margin, high-quality pet products.

    
    CANADIAN OPERATIONS

    (in thousands of U.S. dollars)
                                              13 Weeks ended  13 Weeks ended
                                              March 31, 2007   April 1, 2006
    No. of Stores                                        281             283
    Sales and Revenue                                $27,077         $25,661
    Gross Profit                                      $7,755          $6,915
    EBITDA                                            $3,231          $2,489
    EBITDA excluding non-comparable items             $3,231          $2,573

    Net Income                                        $1,522            $769
    Net Income excluding non-comparable items         $1,522            $823

    Non-comparable items (before tax)
    Financing initiatives costs                            -             $84
    Applicable tax on non-comparable items                 -            ($30)
    


    U.S. OPERATIONS

    There were no non-comparable items in the U.S. operations in the first
quarter of either fiscal 2007 or fiscal 2006.

    
    (in thousands of U.S. dollars)
                                              13 Weeks ended  13 Weeks ended
                                              March 31, 2007   April 1, 2006
    No. of Stores                                         69              67
    Sales and Revenue                                 $8,816          $8,420
    Gross Profit                                      $2,491          $2,432
    EBITDA                                              $422            $370
    Net Income                                          $352            $277
    

    VENDOR PRODUCT RECALLS

    In the first quarter of fiscal 2007, certain vendors announced recalls of
certain production runs for certain products. These recalls received
significant media attention and raised some concern within the industry.
However, the number of recalled products carried by the Company is limited and
none of the Company's private label products were among the products recalled.
Accordingly, the recalls did not have a material affect on the sales or the
results of operations of the Company. The Company's long-term objective of
shifting its product offering to higher-margin, high-quality pet products,
which include pet specialty brands and private label products featuring a
wellness-focused approach to pet nutrition is believed to be providing a
competitive advantage to the Company with respect to consumers looking for
alternative foods for their pets.

    OUTLOOK

    The Company has several key operating objectives for 2007 and 2008. A
primary objective will be to continue re-engineering existing operating
practices to highest industry standards. In this regard, the Company will be
seeking to improve its technological systems, including those related to
materials handling, as well as those where there are opportunities to increase
automation of routine practices throughout the business. The Company will also
be reviewing its fuel and energy strategies so as to improve distribution
efficiencies; its merchandising models so as to be able to fully utilize
varying store sizes within the scope of small box retailing; its franchising
systems in Canada; and its risk management strategies.
    As well, the Company plans to upgrade the shopping experience at its
stores under "Better Pet Nutrition" reniching, including enhancements to store
image and services, expansion of differentiated product selection, the
identification of more targeted store location criteria, improvements to space
management programs, and the integration of an e-commerce component to the
business.
    The Company intends to validate a U.S. market expansion platform that
addresses changes in both the niche positioning of competitors as well as
changes in consumer purchasing trends. On another front, the Company plans on
strengthening the capacity of management to complete its operating and growth
objectives, as well as improving the productivity of management by
establishing higher levels of accountability in relation to strategic business
planning, project management and inter-departmental coordination.
    The Company's financial goal will be to efficiently utilize available
capital by applying cash flow to projects that meet targeted returns. In that
regard, the Company is reviewing potential purchases of real property, such as
warehouses to replace currently leased facilities. The Company may also
utilize available capital for acquisitions as opportunities arise.
    In general, the current focus of the Company will be toward generating
profit improvements from existing operations and re-engineering the platform
for future growth.

    CONFERENCE CALL

    Pet Valu, Inc. will host a live conference call on May 02, 2007 at
10:00 a.m. (EDT) to discuss its financial results for its first quarter of
fiscal 2007 and to answer questions from participants concerning those
results. The discussion will be led by the Company's Chief Executive Officer,
Geoffrey Holt and its Chief Financial Officer, Dale Winkworth. To access via
tele-conference please dial 416-915-9608, if calling within the Greater
Toronto Area, and toll free at 1-866-214-7077, if calling outside the GTA. A
playback of the event will be made available for seven days after the event.
To access the playback of the event, please dial 416-915-1028 along with the
passcode number of 339299, if calling within the GTA, and toll free at
1-866-244-4494 (along with passcode) if outside the GTA.

    
    NON-GAAP FINANCIAL MEASURES

    (1) EBITDA is not a recognized measure under GAAP. As this measure does
        not have a standardized meaning prescribed by GAAP, the Company's
        method of calculating EBITDA may differ from other companies. The
        Company believes that EBITDA is a useful supplemental measure as it
        provides investors with an indication of cash available prior to debt
        service, capital expenditures and income taxes.
    (2) Net Income excluding non-comparable items is not a recognized measure
        under GAAP. As this measure does not have a standardized meaning
        prescribed by GAAP, it is unlikely to be comparable to similar
        measures presented by other companies. The Company believes that
        earnings excluding non-comparable items is a useful supplemental
        measure. It is used by the Company to assess its underlying
        performance from continuing operations and to provide a more useful
        comparison by eliminating non-recurring items.
    (3) EPS excluding non-comparable items is not a recognized measure under
        GAAP. As this measure does not have a standardized meaning prescribed
        by GAAP, it is unlikely to be comparable to similar measures
        presented by other companies. The Company believes that earnings
        excluding non-comparable items is a useful supplemental measure. It
        is used by the Company to assess its underlying performance from
        continuing operations and to provide a more useful comparison by
        eliminating non-recurring items
    

    FORWARD-LOOKING STATEMENTS

    Certain information in this news release is forward-looking and is
subject to important risks and uncertainties. Forward-looking information
includes information concerning the Company's future financial performance,
business strategy, plans, goals, objectives, business prospects and
opportunities. The forward-looking information reflects predictions and does
not in any way reflect a guarantee. 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; the outcome of legal proceedings
as they arise; general economic conditions and normal business uncertainty;
the availability of suitable store locations; customer preferences towards
product offerings; adverse climate changes; the occurrence of a pandemic or
other catastrophic event which could create shortages of labour, products or
services required to operate the business profitably; fluctuations in foreign
currency exchange rates; changes in the Company's relationship with its
merchandise and service suppliers; interest rate fluctuations and other
changes in borrowing costs; and changes in laws, rules and regulations
applicable to the Company or the markets in which the Company operates. The
Company cautions that this is not an exhaustive list of factors that may
affect the forward-looking information in this news release. Potential
investors and readers are urged to give careful consideration to all of these
factors in evaluating any forward-looking information and are cautioned not to
place undue reliance on such information. While the Company believes that its
forecasts and assumptions are reasonable, results or events predicted in this
forward-looking information may differ materially from actual results or
events.

    Pet Valu is a specialty retailer of pet food and pet-related supplies
operating Company-owned and franchised locations in Canada and the U.S. The
TSX stock symbol for Pet Valu Canada Inc., Pet Valu, Inc.'s publicly traded
Canadian operating subsidiary, is PVC.





For further information:

For further information: Michael Fitzgerald, Secretary, (905) 946-1200,
extension 3503

Organization Profile

PET VALU CANADA INC.

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