Richelieu pursues its growth and expansion



    
    -------------------------------------------------------------------------
                    FIRST QUARTER ENDED FEBRUARY 29, 2008
                    -------------------------------------

    - Sales totalled $96.1 million, up 1.7%, net earnings amounted to
      $6.6 million, up 11.0%, or $0.29 per share.

    - U.S. sales grew by 11.0% (in U.S. dollars) and accounted for 18% of the
      quarter's total sales.

    - Excellent financial position - the interest-bearing debt/equity ratio
      stood at 3.0% and working capital at $125.8 million.

    Subsequent events
    -----------------

    - Purchase of 286,500 common shares under the normal course issuer bid,
      for a cash consideration of $5.3 million.

    - Agreement in principle to acquire a distributor in the United States
      expected to close by late April 2008.
    -------------------------------------------------------------------------
    

    TSX: RCH

    MONTREAL, March 27 /CNW Telbec/ - During its Annual General and Special
Meeting of Shareholders held today, Richelieu announced record first-quarter
sales, which reached $96.1 million. The Company's sales increased by 3% in
Canada, driven by a solid performance in the kitchen cabinet makers and
residential and commercial woodworking segments as well as gains in the
hardware retailers and renovation superstore market. In the United States,
sales grew by more than 11% (in U.S. dollars), representing 18% of
consolidated sales. During the first quarter, Richelieu maintained its profit
margins at a very sound level and achieved net earnings of $6.6 million, up
11%. These results are all the more satisfactory since this period is
generally the year's weakest and the Company had to deal with an increase in
the Canadian dollar in relation to the U.S. dollar for its U.S. sales
expressed in Canadian dollars. Excluding the effect of the exchange rate,
total first-quarter sales would have increased by 4.5%.
    "We ended our first quarter with an excellent balance sheet:
interest-bearing debt stood at $6.4 million, down by more than 50% from
February 28, 2007; cash amounted to $5.7 million and working capital to
$125.8 million - leaving us in a very sound financial position to meet our
growth needs and to pursue our expansion; in that regard, we have just signed
an agreement in principle for a new U.S.-based acquisition expected to close
in April," indicated Richard Lord, President and Chief Executive Officer of
Richelieu.

    
    OPERATING RESULTS FOR THE FIRST QUARTER ENDED FEBRUARY 29, 2008 COMPARED
    WITH THE FIRST QUARTER ENDED FEBRUARY 28, 2007

    Consolidated sales totalled $96.1 million, which is an excellent
first-quarter result since this period is generally the year's weakest and the
Company had to deal with an increase in the Canadian dollar in relation to the
U.S. dollar for its U.S. sales expressed in Canadian dollars. They grew by
1.7% over the first quarter of 2007 - excluding the effect of the increase in
the Canadian dollar in relation to the U.S. dollar, first-quarter consolidated
sales would have grown by 4.5%.

    Sales
    (in thousands of $)

    Quarters ended February 29 and 28         2008         2007   Variation %
    -------------------------------------------------------------------------
    Canada                                  78,853       76,608       + 2.9
    United States (CA$)                     17,229       17,901       - 3.8
                  (US$)                     17,149       15,432      + 11.1
    Average exchange rate                   1.0047       1.1670
    -------------------------------------------------------------------------
    Consolidated sales                      96,082       94,509       + 1.7
    -------------------------------------------------------------------------

    Sales to manufacturers amounted to $78.5 million, up 1.3% over the
corresponding quarter of 2007. Sales to hardware retailers, including
renovation superstores, totalled $17.6 million, up 3.4%.
    In Canada, sales amounted to $78.9 million, an increase of 2.9%, including
2.5% from internal growth and 0.4% from the acquisition of Sasco Products
(Nova Scotia), closed in the second quarter of 2007. They accounted for 82% of
the period's consolidated sales. This growth was primarily achieved in the
kitchen cabinet makers, residential and commercial woodworking and hardware
retailers markets including renovation superstores.
    Sales in the United States totalled US$17.1 million, an increase of 11.1%
(in U.S. dollars), of which 3.2% came from internal growth and 7.9% from the
acquisition of Village Square Cabinet Supply (Tennessee), closed in the second
quarter of 2007. Considering the rise in the Canadian dollar in relation to
the U.S. dollar, sales in the United States amounted to $17.2 million,
compared with $17.9 million in the first quarter of 2007. They accounted for
18% of the period's consolidated sales.

    Consolidated EBITDA and EBITDA margin
    (in thousands of $)

    Quarters ended February 29 and 28                      2008         2007
    -------------------------------------------------------------------------
    Sales                                                96,082       94,509
    EBITDA                                               10,569       10,470
    EBITDA margin (%)                                      11.0         11.1
    -------------------------------------------------------------------------

    Earnings before income taxes, interest, amortization and non-controlling
interest (EBIDTA) stood at $10.6 million, an increase of approximately 1%. The
Company maintained its gross profit and EBITDA margins at a most satisfactory
level. The EBITDA margin was stable at 11.0%.
    Interest decreased to $27,000, down from $0.2 million for the comparable
quarter of 2007, as interest-bearing debt was reduced by more than half from
the first quarter of 2007. Amortization of capital assets increased by
$0.1 million, whereas amortization of intangible assets was unchanged at
$0.2 million.
    Income taxes totalled $2.7 million, down from $3.2 million in the first
quarter of 2007, reflecting the reduction in the Canadian tax rate effective
January 1, 2008.

    Consolidated net earnings
    (in thousands of $)

    Quarters ended February 29 and 28                      2008         2007
    -------------------------------------------------------------------------
    EBITDA                                               10,569       10,470
    Amortization of capital and intangible assets         1,252        1,104
    Interest                                                 27          233
    Income taxes                                          2,659        3,151
    Non-controlling interest                                  3            9
    -------------------------------------------------------------------------
    Net earnings                                          6,628        5,973
    Net profit margin (%)                                   6.9          6.3
    -------------------------------------------------------------------------
    Comprehensive income                                  6,089        5,963
    -------------------------------------------------------------------------

    Net earnings increased by 11.0% to $6.6 million. The net profit margin
improved to 6.9% of consolidated sales, compared with 6.3% for the first
quarter of 2007. Earnings per share amounted to $0.29 ($0.29 diluted), up
11.5%, whereas the number of shares and options outstanding did not vary
significantly over the past 12 months.
    Comprehensive income totalled $6.1 million, on account of latent foreign
exchange losses of $0.6 million on translation of the financial statements of
the subsidiary in the United States. It should be noted that effective
September 1, 2007, Richelieu changed the classification of its U.S. subsidiary
from integrated to self-sustaining foreign operations.

    FINANCIAL POSITION

    Analysis of principal cash flows

    Operating activities

    Cash flows from operating activities (before net change in non-cash
working capital balances related to operations) grew by 11.2% to $8.0 million
or $0.34 per share, compared with $7.2 million or $0.31 per share for the
first quarter of 2007, mainly reflecting the growth in net earnings. Net
change in non-cash working capital balances related to operations used cash
flows of $6.9 million due to the increase in inventories in anticipation of
upcoming quarters. Consequently, operating activities provided cash flows of
$1.1 million, whereas they had used cash flows of $2.5 million in the
corresponding period of 2007.

    Financing activities

    Richelieu paid a total of $1.8 million in shareholder dividends, up from
$1.6 million for the first quarter of 2007; this rise reflects the 14.3%
dividend rate increase announced on January 31, 2008. The Company repaid
$0.2 million in interest-bearing debt, compared with $0.3 million in the first
quarter of 2007. Common shares were purchased for a consideration of
$0.8 million under the normal course issuer bid, whereas no shares were
purchased in the first quarter of 2007. Consequently, financing activities
used total cash flows of $2.7 million, compared with $1.7 million for the
first quarter of 2007.

    Investing activities

    Richelieu invested $0.5 million in capital expenditures during the first
quarter, mainly for the purchase of equipment and improvement of business
premises, compared with $1.4 million for the first quarter of 2007.

    Sources of financing

    As at February 29, 2008, cash and cash equivalents totalled $5.7 million,
up from $1.3 million at the end of the corresponding period of 2007. The
Company had an excellent working capital of $125.8 million for a current ratio
of 4.0:1, compared with $121.0 million and a 3.7:1 ratio as at November 30,
2007.
    Richelieu estimates that it has the capital resources needed to fulfill
its commitments and respect its ongoing obligations in 2008. Its cash flows
from operating activities should suffice for the funding requirements arising
from its growth strategy and its financing and investing activities planned
for the year. Furthermore, Richelieu has an authorized line of credit of
$26.0 million, renewable annually and bearing interest at the bank's prime
rate, as well as easy access to other outside financing if necessary.

    The expectation set forth above consists of forward-looking information
based on the assumption that economic conditions and exchange rate will not
deteriorate significantly, operating expenses will not increase considerably,
deliveries will be sufficient to fulfill the Company's requirements and no
unusual events will entail additional capital expenditures. This expectation
also remains subject to the risks identified under "Risk Management" on page
38 of the Company's 2007 Annual Report.

    Balance sheet analysis

    Summary balance sheet

    As at February 29 and 28                               2008         2007
    (in thousands of $)
    -------------------------------------------------------------------------
    Current assets                                      167,561      151,638
    Long-term assets                                     92,036       93,599
    -------------------------------------------------------------------------
    Total                                               259,597      245,237
    -------------------------------------------------------------------------
    Current liabilities                                  41,724       43,453
    Long-term liabilities                                 4,976       10,590
    Shareholders' equity                                212,897      191,194
    -------------------------------------------------------------------------
    Total                                               259,597      245,237
    -------------------------------------------------------------------------

    Assets

    As at February 29, 2008, total assets amounted to $259.6 million, up from
$245.2 million a year earlier, an increase of 5.9%. Current assets grew by
10.5% or $15.9 million, due primarily to a $4.3 million increase in cash and
cash equivalents, a $10.9 million rise in inventories related to acquisitions,
the new distribution centre located in Barrie, Ontario, the innovations
introduced over the past 12 months, the medium and long-term agreements signed
with major Canadian renovation chains and to meet future demand.

    Total interest-bearing debt

    As at February 29 and 28                               2008         2007
    (in thousands of $)
    -------------------------------------------------------------------------
    Bank indebtedness                                         -          138
    Current portion of long-term debt                     5,553        6,721
    Long-term debt                                          847        6,637
    -------------------------------------------------------------------------
    Total                                                 6,400       13,496
    -------------------------------------------------------------------------
    less cash and cash equivalents                        5,670        1,335
    Total debt net of cash                                  730       12,161
    -------------------------------------------------------------------------

    Richelieu has reduced its total interest-bearing debt by $7.1 million over
the past 12 months, bringing it to $6.4 million as at February 29, 2008. After
deducting cash and cash equivalents, the Company had a total net debt of $0.7
million as at February 29, 2008. Richelieu remains in a healthy and solid
financial position, with low indebtedness and substantial cash flows generated
every year, enabling it to pursue its growth and expansion, particularly
through the acquisition of companies specializing in its business sector.
    Shareholders' equity totalled $212.9 million as at February 29, 2008, up
from $191.2 million a year earlier, a growth of 11.4% mainly reflecting the
increases of $27.1 million in retained earnings which amounted to
$199.5 million as at February 29, 2008, and of approximately $1.0 million in
contributed surplus, less accumulated comprehensive income of $6.7 million. At
the end of the first quarter of 2008, the book value per share was $9.23, up
from $8.29 as at February 28, 2007.
    The total interest-bearing debt/equity ratio stood at 3.0%, compared with
7.1% as at February 28, 2007.
    As at February 29, 2008, Richelieu's share capital consisted of 23,077,937
common shares (23,100,737 common shares as at November 30, 2007) due to the
issue of 15,500 common shares under the share option plan and 778,500 options
(640,000 options as at November 30, 2007) were outstanding.

    EVENTS SUBSEQUENT TO BALANCE SHEET DATE

    On March 12, 2008, the Company purchased 286,500 common shares of
Richelieu under its normal course issuer bid, for a cash consideration of
$5.3 million.
    Also in March 2008, Richelieu signed an agreement in principle to acquire
the assets of a specialty hardware product distributor in the United States,
which achieves annual sales of US$2.5 million. This transaction is expected to
close in April 2008 and will be financed by way of the Company's working
capital.

    NEXT DIVIDEND PAYMENT

    At its meeting on March 27, 2008, the Board of Directors approved the
payment of a quarterly dividend of $0.08 per share. This dividend is payable
on April 24, 2008 to shareholders of record as at April 10, 2008.

    GROWTH OUTLOOK

    "We are confident we will obtain satisfactory results in upcoming
quarters. Building on strengthened marketing programs and sales teams, a
product mix enhanced with innovations and our value-added service, we are
further intensifying our North American market development. We are in
excellent financial health and remain on the lookout for acquisition
opportunities matching our criteria in both Canada and the United States,"
added Mr. Lord.

    The expectation set forth above consists of forward-looking information
based on the assumption that economic conditions and exchange rates will not
deteriorate significantly, operating expenses will not increase considerably,
deliveries will be sufficient to fulfill the Company's requirements and no
unusual events will entail additional capital expenditures. This expectation
also remains subject to the risks identified under "Risk Management" on page
38 of the Company's 2007 Annual Report.

    PROFILE as at February 29, 2008

    Richelieu Hardware Ltd. is a leading North American distributor, importer
and manufacturer of specialty hardware and complementary products. Its
products are targeted to an extensive customer base of kitchen and bathroom
cabinet, furniture, and window and door manufacturers plus the residential and
commercial woodworking industry, as well as a large customer base of hardware
retailers, including renovation superstores. Richelieu offers customers a
broad mix of high-end products sourced from manufacturers around the world.
Its product selection consists of close to 55,000 different items targeted to
a base of over 38,000 customers who are served by 47 centres in North America
- 30 distribution centres across Canada, 15 in the United States and two
manufacturing plants in Canada, specifically Cedan Industries Inc. which
specializes in the manufacture of a wide variety of veneer sheets and
edgebanding products, and Menuiserie des Pins Ltée which manufactures
components for the window and door industry, a broad selection of mouldings,
and various types of tackboards and whiteboards.

    Notes to readers - Richelieu uses earnings before income taxes, interest,
amortization and non-controlling interest ("EBITDA") because this measure
enables management to assess the Company's operational performance. This
measure is a widely accepted financial indicator of a company's ability to
service and incur debt. However, EBITDA should not be considered by an
investor as an alternative to operating income or net earnings, an indicator
of operating performance or cash flows, or as a measure of liquidity. Because
EBITDA is not a standardized measurement as prescribed by GAAP, it may not be
comparable to the EBITDA of other companies. Certain statements set forth in
this press release, such as statements about the growth outlook, constitute
forward-looking statements. In some cases, these statements are identified by
the use of terms such as "may", "could", "might", "intend" "should", "expect",
"project", "plan", "believe", "estimate" or the negative form of these
expressions or other comparable variants. These statements are based on the
information available at the time they are written, on assumptions made by
management and on the expectations of management, acting in good faith,
regarding future events, including those relating to economic conditions,
fluctuations in exchange rates and operating expenses, and the absence of
unusual events entailing supplementary expenditures. Although management
considers thse assumptions and expectations reasonable based on the
information available at the time they are written, they could proved
inaccurate. Forward-looking statements are also subject, by their very nature,
to known and unknown risks and uncertainties such as those related to the
industry, acquisitions, labour relations, credit, key officers, supply,
product liability, and other factors set forth in the Management's Report
included in the Company's Annual Report as well as its Annual Information
Form, which are available on the System for Electronic Document Analysis and
Retrieval (SEDAR) website at www.sedar.com. Richelieu's actual results could
differ materially from those indicated or underlying these forward-looking
statements. The reader is therefore recommended not to unduly rely on these
forward-looking statements. Forward-looking statements do not reflect the
potential impact of special items, any business combination or any other
transaction that may be announced or occur subsequent to the date hereof.
Richelieu undertakes no obligation to update or revise the forward-looking
statements to account for new events or new circumstances, except where
provided for by applicable legislation.

        CONFERENCE CALL ON MARCH 27, 2008 AT 3:00 P.M. (EASTERN TIME)
        -------------------------------------------------------------

    Financial analysts and investors interested in participating in the
conference call on Richelieu's results to be held at 3:00 p.m. on March 27,
2008, can dial 1-800-732-9307 a few minutes before the start of the call. For
those unable to participate, a taped rebroadcast will be available as of
5:00 p.m. on March 27, 2008, until midnight on April 3, 2008, by dialing
1-877-289-8525, access code: 21265575#. Members of the media are invited to
listen in.


    Consolidated statements of earnings (unaudited)
    (in thousands of dollars, except per-share amounts)

                                                        For the three months
                                                    ended February 29 and 28,
    -------------------------------------------------------------------------
                                                           2008         2007
    -------------------------------------------------------------------------
                                                              $            $

    Sales                                                96,082       94,509
    Cost of sales, warehouse, selling
     and administrative expenses                         85,513       84,039
    -------------------------------------------------------------------------
    Earnings before the following                        10,569       10,470

    Interest on short-term debt, net                        (68)         (12)
    Interest on long-term debt                               95          245
    Amortization of capital assets                        1,011          903
    Amortization of intangible assets                       241          201
    -------------------------------------------------------------------------
    Earnings before income taxes and
     non-controlling interest                             9,290        9,133
    Income taxes                                          2,659        3,151
    -------------------------------------------------------------------------
    Earnings before non-controlling interest              6,631        5,982
    Non-controlling interest                                  3            9
    -------------------------------------------------------------------------
    Net earnings                                          6,628        5,973
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share
      Basic                                                0.29         0.26
      Diluted                                              0.29         0.26


    Consolidated statements of comprehensive income (unaudited)
    (in thousands of dollars)

                                                        For the three months
                                                    ended February 29 and 28,
    -------------------------------------------------------------------------
                                                           2008         2007
    -------------------------------------------------------------------------
                                                              $            $

    Net earnings                                          6,628        5,973
    Other comprehensive income:
    Change in fair value of derivatives designated
     as cash flow hedges net of income taxes of $27          18          (10)
    Exchange loss due to change in translation method
     of foreign operation reclassified as self-sustaining  (557)           -
    -------------------------------------------------------------------------
                                                           (539)         (10)
    -------------------------------------------------------------------------
    Comprehensive income                                  6,089        5,963
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated statements of retained earnings (unaudited)
    (in thousands of dollars)

                                                        For the three months
                                                    ended February 29 and 28,
    -------------------------------------------------------------------------
                                                           2008         2007
    -------------------------------------------------------------------------
                                                              $            $

    Balance, beginning of period                        195,511      168,020
    Net earnings                                          6,628        5,973
    -------------------------------------------------------------------------
                                                        202,139      173,993
    Dividends                                            (1,849)      (1,615)
    Premium on redemption of common shares for
     cancellation                                          (770)           -
    -------------------------------------------------------------------------
    Balance, end of period                              199,520      172,378
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated statements of cash flows (unaudited)
    (in thousands of dollars)

                                                        For the three months
                                                    ended February 29 and 28,
    -------------------------------------------------------------------------
                                                           2008         2007
    -------------------------------------------------------------------------
                                                              $            $

    OPERATING ACTIVITIES
    Net earnings                                          6,628        5,973
    Non-cash items
      Amortization of capital assets                      1,011          903
      Amortization of intangible assets                     241          201
      Future income taxes                                  (131)         (75)
      Non-controlling interest                                3            9
      Stock-based compensation expense                      251          184
    -------------------------------------------------------------------------
                                                          8,003        7,195
    Net change in non-cash working capital
     balances related to operations                      (6,901)      (9,716)
    -------------------------------------------------------------------------
                                                          1,102       (2,521)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Increase in bank loans                                    -          138
    Repayment of long-term debt                            (206)        (277)
    Dividends paid                                       (1,849)      (1,615)
    Issue of common shares                                  109           78
    Redemption of common shares for cancellation           (800)           -
    -------------------------------------------------------------------------
                                                         (2,746)      (1,676)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to capital assets                            (507)      (1,432)
    -------------------------------------------------------------------------
                                                           (507)      (1,432)
    -------------------------------------------------------------------------

    Effect of exchange rate fluctuations on cash
     and cash equivalents                                   (58)           -
    -------------------------------------------------------------------------
    Net change in cash and cash equivalents              (2,209)      (5,629)
    Cash and cash equivalents beginning of period         7,879        6,964
    -------------------------------------------------------------------------
    Cash and cash equivalents end of period               5,670        1,335
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental information
    Income taxes paid                                     4,786        6,455
    Interest paid (received)                                 (8)         155


    Consolidated balance sheets (unaudited)
    (in thousands of dollars)
                                             As at        As at        As at
                                       February 29, February 28, November 30,
                                              2008         2007         2007
    -------------------------------------------------------------------------
                                                 $            $            $

    ASSETS
    Current assets
    Cash and cash equivalents                5,670        1,335        7,879
    Accounts receivable                     56,015       56,134       60,976
    Income taxes receivable                  1,046          970            -
    Inventories                            103,596       92,664       95,971
    Prepaid expenses                         1,234          535          732
    -------------------------------------------------------------------------
                                           167,561      151,638      165,558
    -------------------------------------------------------------------------

    Capital assets                          19,267       18,993       19,774
    Intangible assets                       12,598       13,026       12,974
    Goodwill                                60,171       61,580       60,472
    -------------------------------------------------------------------------
                                           259,597      245,237      258,778
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Bank loans                                   -          138            -
    Accounts payable and accrued
     liabilities                            36,171       36,594       37,371
    Income taxes payable                         -            -        1,081
    Current portion of long term debt        5,553        6,721        6,111
    -------------------------------------------------------------------------
                                            41,724       43,453       44,563
    -------------------------------------------------------------------------

    Long-term debt                             847        6,637          860
    Future income taxes                      1,619        1,762        1,751
    Non-controlling interest                 2,510        2,191        2,508
    -------------------------------------------------------------------------
                                            46,700       54,043       49,862
    -------------------------------------------------------------------------
    Shareholders' equity
    Capital stock                           17,880       17,548       17,800
    Contributed surplus                      2,233        1,278        1,982
    Retained earnings                      199,520      172,378      195,511
    Accumulated other comprehensive
     income                                 (6,736)         (10)      (6,197)
    -------------------------------------------------------------------------
                                           212,897      191,194      209,096
    -------------------------------------------------------------------------
                                           259,597      245,237      258,778
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

For further information: Richard Lord, President and Chief Executive
Officer; Alain Giasson, Vice-President and Chief Financial Officer, (514)
336-4144, www.richelieu.com


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