Reitmans (Canada) Limited announces its results for the three months ended April 30, 2011

MONTREAL, May 31 /CNW Telbec/ - Sales for the first quarter ended April 30, 2011 decreased 7.0% to $219,296,000 as compared with $235,745,000 for the first quarter ended May 1, 2010. Same store sales decreased 8.7%. The first quarter ended April 30, 2011 yielded disappointing sales results primarily due to poor weather which resulted in a difficult retail environment marked by increased promotional activity. Other factors that contributed to the sales decline included the impact of higher gasoline prices reducing consumer disposable income for apparel purchases and a late Easter holiday that traditionally initiates increased sales of spring and summer merchandise. The Company's gross margin decreased from 67.8% to 65.8% for the quarter ended April 30, 2011. An improvement in the gross margin attributable to the strength of the Canadian dollar in the quarter ended April 30, 2011 was offset by a reduction due to increased promotional activity. Earnings before interest, taxes, depreciation and amortization and investment income ("EBITDA") decreased 47.7% to $19,503,000 as compared with $37,278,000 last year. Net earnings decreased 96.0% to $624,000 or $0.01 diluted earnings per share as compared with $15,770,000 or $0.23 diluted earnings per share last year.

During the quarter, the Company opened 8 new stores comprised of 2 Reitmans, 2 Smart Set, 1 Thyme Maternity, 1 Cassis and 2 Addition Elle. Eleven stores were closed comprised of 3 Reitmans, 3 Smart Set, 3 Thyme Maternity, 1 Penningtons and 1 Addition Elle. Accordingly, at April 30, 2011, there were 965 stores in operation, consisting of 363 Reitmans, 157 Smart Set, 67 RW & CO., 73 Thyme Maternity, 23 Cassis, 160 Penningtons and 122 Addition Elle, as compared with a total of 982 stores as at May 1, 2010.

Sales for the month of May (the four weeks ended May 28, 2011) decreased 8% with same store sales decreasing 8% due to the continuing unseasonable weather conditions.

At the Board of Directors meeting held on May 31, 2011, a quarterly cash dividend (constituting eligible dividends) of $0.20 per share on all outstanding Class A non-voting and Common shares of the Company was declared, payable July 28, 2011 to shareholders of record on July 14, 2011.

Effective for the first quarter ended April 30, 2011, Reitmans began reporting its financial results in accordance with International Financial Reporting Standards ("IFRS"), including comparative information. Previously reported financial results prepared in accordance with Canadian generally accepted accounting principles have been presented to conform to the new standards adopted.

    <<
    Non-GAAP Financial Measures
    ---------------------------
    >>

In addition to discussing earnings in accordance with IFRS, this press release provides EBITDA as a supplementary earnings measure, which is defined as earnings before income taxes, finance income, finance costs and depreciation and amortization. Depreciation and amortization includes the write-off of property and equipment. The Company also discloses same store sales, which are defined as sales generated by stores that have been open for at least one year. The Company believes these measures provide meaningful information on the Company's performance and operating results. However, readers should know that these non-GAAP financial measures have no standardized meaning as prescribed by IFRS and may not be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation.

    <<
    Forward-Looking Statements
    --------------------------
    >>

All of the statements contained herein, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond the Company's control. Such risks include but are not limited to: the impact of general economic conditions, general conditions in the retail industry, seasonality, weather and other risks included in public filings of the Company. Consequently, actual future results may differ materially from the anticipated results expressed in forward-looking statements. The reader should not place undue reliance on the forward-looking statements included herein. These statements speak only as of the date made and the Company is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, except to the extent required under applicable securities law.

The Company's unaudited interim condensed financial statements including notes and Management's Discussion and Analysis for the first quarter ended April 30, 2011 are available online at www.sedar.com.

    <<
    Montreal, May 31, 2011

    Jeremy H. Reitman
    Chairman and Chief Executive Officer

    Telephone:  (514) 385-2630
    Corporate Website: www.reitmans.ca
    >>
    <<
    CONDENSED STATEMENTS OF EARNINGS (Unaudited)
    (in thousands of Canadian dollars except per share amounts)

                                                  ---------------------------
                                                  For the three months ended
                                                        April 30,      May 1,
                                                            2011        2010
                                                  ---------------------------

    Sales                                              $ 219,296   $ 235,745
    Cost of goods sold                                    74,941      75,972
                                                  ---------------------------
    Gross profit                                         144,355     159,773
    Selling and distribution expenses                    129,225     126,482
    Administrative expenses                               10,112      10,466
                                                  ---------------------------
    Results from operating activities                      5,018      22,825

    Finance income                                         1,164         810
    Finance costs                                          5,313       1,391
                                                  ---------------------------
    Earnings before income taxes(1)                          869      22,244

    Income taxes                                             245       6,474
                                                  ---------------------------

    Net earnings                                       $     624   $  15,770
                                                  ---------------------------
                                                  ---------------------------

    Earnings per share:
      Basic                                            $    0.01   $    0.23
      Diluted                                               0.01        0.23

    (1) A reconciliation of earnings before income taxes to earnings before
        interest, taxes, depreciation and amortization and investment income
        ("EBITDA") is as follows:
    >>
    <<
    Earnings before income taxes                       $     869   $  22,244
    Finance income                                         1,164         810
    Finance costs                                          5,313       1,391
    Depreciation and amortization                         14,485      14,453
                                                  ---------------------------

    EBITDA                                             $  19,503   $  37,278
                                                  ---------------------------
                                                  ---------------------------
    >>
    <<
    CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
    (in thousands of Canadian dollars)
                                                  ---------------------------
                                                  For the three months ended
                                                        April 30,      May 1,
                                                            2011        2010
                                                  ---------------------------

    Net earnings                                       $     624   $  15,770
    Other comprehensive income:
      Net unrealized gain on available-for-sale
       financial assets arising during the
       period (net of tax of $60; $89 for the
       three months ended May 1, 2010)                       401         598
                                                  ---------------------------

    Total comprehensive income                           $ 1,025   $  16,368
                                                  ---------------------------
                                                  ---------------------------
    >>
    <<
    CONDENSED BALANCE SHEETS (Unaudited)
    (in thousands of Canadian dollars)

                              -----------------------------------------------
                               April 30,     May 1,  January 29,  January 31,
                                   2011       2010         2011         2010
                              -----------------------------------------------
    ASSETS
    CURRENT ASSETS
      Cash and cash
       equivalents            $ 176,871  $ 209,148    $ 230,034    $ 228,577
      Marketable securities      70,979     48,783       70,413       48,026
      Trade and other
       receivables                4,214      3,765        2,866        2,926
      Income taxes
       recoverable               10,846      8,540            -            -
      Inventories                99,066     81,858       73,201       63,127
      Prepaid expenses           12,715     11,631       12,491       11,010
                              -----------------------------------------------
        Total Current
         Assets                 374,691    363,725      389,005      353,666
                              -----------------------------------------------

    NON-CURRENT ASSETS
      Property and
       equipment                189,487    207,594      193,064      208,362
      Intangibles                14,012      8,455       13,841        9,964
      Goodwill                   42,426     42,426       42,426       42,426
      Deferred income taxes      19,438     19,445       21,021       18,313
                              -----------------------------------------------
        Total Non-Current
         Assets                 265,363    277,920      270,352      279,065
                              -----------------------------------------------

    TOTAL ASSETS              $ 640,054  $ 641,645    $ 659,357    $ 632,731
                              -----------------------------------------------
                              -----------------------------------------------

    LIABILITIES AND
     SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES
      Trade and other
       payables               $  67,940  $  66,068    $  64,093    $  54,684
      Deferred revenue           13,870     14,789       19,834       18,122
      Income taxes payable            -          -        5,998        4,677
      Current portion of
       long-term debt             1,406      1,320        1,384        1,300
                              -----------------------------------------------
        Total Current
         Liabilities             83,216     82,177       91,309       78,783
                              -----------------------------------------------

    NON-CURRENT LIABILITIES
      Other payables             10,393      9,306       10,180        9,105
      Deferred revenue            2,395      2,575        2,384        2,686
      Deferred lease credits     18,112     20,245       19,011       20,609
      Long-term debt              9,688     11,093       10,047       11,431
      Pension liability          13,876     12,048       13,626       11,865
                              -----------------------------------------------
        Total Non-Current
         Liabilities             54,464     55,267       55,248       55,696
                              -----------------------------------------------

    SHAREHOLDERS' EQUITY
      Share capital              31,426     27,524       29,614       25,888
      Contributed surplus         6,291      5,296        6,266        5,164
      Retained earnings         456,890    465,428      469,554      461,845
      Accumulated other
       comprehensive income       7,767      5,953        7,366        5,355
                              -----------------------------------------------
      Total Shareholders'
       Equity                   502,374    504,201      512,800      498,252
                              -----------------------------------------------

    TOTAL LIABILITIES AND
     SHAREHOLDERS' EQUITY     $ 640,054  $ 641,645    $ 659,357    $ 632,731
                              -----------------------------------------------
                              -----------------------------------------------
    >>
    <<
    CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
    (in thousands of Canadian dollars)
                                                  ---------------------------
                                                  For the three months ended
                                                        April 30,      May 1,
                                                            2011        2010
                                                  ---------------------------
    SHARE CAPITAL
    Balance, beginning of the period                   $  29,614   $  25,888
      Cash consideration on exercise of share
       options                                             1,443       1,314
      Ascribed value credited to share capital
       from exercise of share options                        369         322
                                                  ---------------------------
    Balance, end of the period                            31,426      27,524
                                                  ---------------------------

    CONTRIBUTED SURPLUS
    Balance, beginning of the period                       6,266       5,164
      Share-based compensation costs                         394         454
      Ascribed value credited to share capital
       from exercise of share options                       (369)       (322)
                                                  ---------------------------
    Balance, end of the period                             6,291       5,296
                                                  ---------------------------

    RETAINED EARNINGS
    Balance, beginning of the period                     469,554     461,845
      Net earnings                                           624      15,770
      Dividends                                          (13,288)    (12,187)
                                                  ---------------------------
    Balance, end of the period                           456,890     465,428
                                                  ---------------------------

    ACCUMULATED OTHER COMPREHENSIVE INCOME
    Balance, beginning of the period                       7,366       5,355
      Net unrealized gain on available-for-sale
       financial assets arising during the
       period (net of tax of $60; $89 for the
       three months ended May 1, 2010)                       401         598
                                                  ---------------------------
    Balance, end of the period                             7,767       5,953
                                                  ---------------------------

    Total Shareholders' Equity                         $ 502,374   $ 504,201
                                                  ---------------------------
                                                  ---------------------------
    >>
    <<
    CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
    (in thousands of Canadian dollars)
                                                  ---------------------------
                                                  For the three months ended
                                                        April 30,      May 1,
                                                            2011        2010
                                                  ---------------------------
    CASH FLOWS FROM (USED IN) OPERATING
     ACTIVITIES
      Net earnings                                     $     624   $  15,770
      Adjustments for:
        Depreciation and amortization                     14,485      14,453
        Share-based compensation costs                       394         454
        Amortization of deferred lease credits            (1,214)     (1,269)
        Deferred lease credits                               315         905
        Pension contribution                                (129)       (155)
        Pension expense                                      379         338
        Foreign exchange loss                              2,931         490
        Interest and dividend income, net                   (985)       (611)
        Interest paid                                       (179)       (199)
        Interest received                                    322          86
        Dividends received                                   862         797
        Income taxes                                         245       6,474
                                                  ---------------------------
                                                          18,050      37,533
      Changes in:
        Trade and other receivables                       (1,368)       (912)
        Inventories                                      (25,865)    (18,731)
        Prepaid expenses                                    (224)       (621)
        Trade and other payables                           6,143      13,263
        Deferred revenue                                  (5,953)     (4,207)
                                                  ---------------------------
      Cash (used in) generated from operating
       activities                                         (9,217)     26,325
      Income taxes paid                                  (15,566)    (20,912)
                                                  ---------------------------
      Net cash flows (used in) from operating
       activities                                        (24,783)      5,413


    CASH FLOWS USED IN INVESTING ACTIVITIES
      Purchases of marketable securities                    (105)        (70)
      Additions to property and equipment and
       intangibles                                       (13,162)    (13,091)
                                                  ---------------------------
      Cash flows used in investing activities            (13,267)    (13,161)

    CASH FLOWS (USED IN) FROM FINANCING
     ACTIVITIES
      Dividends paid                                     (13,288)    (12,187)
      Repayment of long-term debt                           (337)       (318)
      Proceeds from exercise of share options              1,443       1,314
                                                  ---------------------------
      Cash flows used in financing activities            (12,182)    (11,191)

    FOREIGN EXCHANGE LOSS ON CASH HELD IN FOREIGN
     CURRENCY                                             (2,931)       (490)
                                                  ---------------------------

    NET DECREASE IN CASH AND CASH EQUIVALENTS            (53,163)    (19,429)

    CASH AND CASH EQUIVALENTS, BEGINNING OF THE
     PERIOD                                              230,034     228,577
                                                  ---------------------------

    CASH AND CASH EQUIVALENTS, END OF THE PERIOD       $ 176,871   $ 209,148
                                                  ---------------------------
                                                  ---------------------------
    >>

SOURCE REITMANS (CANADA) LIMITED

For further information: Jeremy H. Reitman, Chairman and Chief Executive Officer, (514) 385-2630, Corporate Website: www.reitmans.ca

Organization Profile

REITMANS (CANADA) LIMITED

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