Leon's Furniture Limited - 2009 Fourth Quarter
TORONTO, Feb. 17 /CNW/ - Leon's Furniture Limited is pleased to announce its results for the fourth quarter and full year 2009. For the three months ended December 31, 2009, total Leon's sales were $255,665,000 including $57,679,000 of franchise sales ($269,891,000 including $63,803,000 of franchise sales in 2008), a decrease of 5.3%. Same store corporate sales were down 4.5% from the prior year fourth quarter. Despite this sales decrease, net income was $24,030,000, $0.34 per common share ($23,205,000, $0.33 per common share in 2008), an increase of 3.0% per share.
Although sales were down in the fourth quarter 2009 compared to the prior year, we are very pleased with the strong profit results this quarter. We thank our Associates for all their efforts this year in improving our productivity. Working as a team, we were able to put in place stronger controls which resulted in a reduction of overall expenditures. What makes all of this extra special is that it was accomplished in a year in which we celebrated our Company's 100th Anniversary. Once again, we thank all our Associates across Canada for their hard work and dedication in helping to achieve these goals.
For the year ended December 31, 2009, total Leon's sales were $897,470,000 including $194,290,000 franchise sales ($950,224,000 including $209,848,000 franchise sales in 2008), a decrease of 5.6%. Net income was $56,864,000, $0.80 per common share ($63,390.000, $0.90 per common share in 2008), a decrease of 11.1% per share. Same store corporate sales were down 5.4% from the prior year.
During 2009, the Company continued its renovation and expansion program. In the spring of 2009, a major renovation was completed in our warehouse and showroom store in Laval, Quebec. That was followed by the opening of our first downtown Toronto, Ontario showroom store known as the "Roundhouse" in the summer of 2009. Renovations were also completed in the third quarter of 2009 at our Barrie and Whitby, Ontario stores. Construction will commence shortly on two new superstores in Thunder Bay, Ontario (75,000 sq ft) and in Regina, Saskatchewan (85,000 sq ft).
The Directors are pleased to declare a quarterly dividend of 7 cents per common share, payable on April 5, 2010 to the shareholders of record at the close of business on March 5, 2010. Dividends paid by Leon's Furniture Limited are "eligible dividends" pursuant to the changes to the Income Tax Act under Bill C-28, Canada.
The 2009 Annual Report will be mailed in early April to shareholders of record on March 24, 2010. The Annual Meeting of Shareholders will take place on May 12, 2010.
EARNINGS PER SHARE FOR EACH QUARTER
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MARCH 31 JUNE 30 SEPT. 30 DEC. 31 YEAR
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TOTAL
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2009 - Basic 12 cents 12 cents 22 cents 34 cents $0.80
- Fully Diluted 12 cents 12 cents 21 cents 33 cents $0.78
2008 - Basic 16 cents 16 cents 25 cents 33 cents $0.90
- Fully Diluted 15 cents 16 cents 24 cents 32 cents $0.87
2007 - Basic 15 cents 14 cents 23 cents 31 cents $0.83
- Fully Diluted 15 cents 13 cents 22 cents 30 cents $0.80
LEON'S FURNITURE LIMITED/MEUBLES LEON Ltèe
Mark J. Leon
Chairman of the Board
Leon's Furniture Limited-Meubles Leon Ltee
Incorporated under the laws of Ontario
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As at As at
December 31 December 31
($ in thousands) 2009 2008
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ASSETS
Current
Cash and cash equivalents 58,301 39,483
Marketable securities 94,337 83,194
Restricted marketable securities 18,088 16,598
Accounts receivable 31,501 30,291
Income taxes recoverable - 2,037
Inventory 83,957 92,904
Future tax assets 1,133 270
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Total current assets 287,317 264,777
Prepaid expenses 1,560 1,490
Goodwill 11,282 11,282
Intangibles 5,334 5,401
Other receivables - 419
Future tax assets 11,465 10,752
Property, plant & equipment net 212,198 219,287
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529,156 513,408
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 83,880 95,247
Income taxes payable 1,958 -
Customers' deposits 15,632 14,119
Dividends payable 4,938 4,952
Deferred warranty plan revenue 16,150 15,267
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Total current liabilities 122,558 129,585
Deferred warranty plan revenue 22,248 21,712
Redeemable share liability 383 285
Future tax liabilities 8,829 8,468
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Total liabilities 154,018 160,050
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Shareholders' equity
Common shares 17,704 16,493
Retained earnings 357,576 338,960
Accumulated other comprehensive income (142) (2,095)
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Total shareholders' equity 375,138 353,358
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529,156 513,408
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Leon's Furniture Limited-Meubles Leon Ltee
CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS
(UNAUDITED)
Period ended December 31st
($ in thousands) 3 months ended 12 months ended
2009 2008 2009 2008
Sales 197,986 206,088 703,180 740,376
Cost of sales 111,735 116,866 419,819 440,360
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Gross profit 86,251 89,222 283,361 300,016
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Operating expenses (income)
Salaries and commissions 26,166 28,882 103,977 112,270
Advertising 9,140 10,452 34,732 33,752
Rent and property taxes 3,183 2,864 12,165 11,268
Amortization 4,154 4,474 16,562 16,253
Employee profit-sharing plan 1,350 1,350 4,177 4,321
Other operating expenses 11,553 12,177 42,359 46,447
Interest income (796) (1,302) (3,165) (4,836)
Other income (2,871) (3,191) (9,980) (13,595)
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51,879 55,706 200,827 205,880
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Income before income taxes 34,372 33,516 82,534 94,136
Provision for income taxes 10,342 10,311 25,670 30,746
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Net income for the period 24,030 23,205 56,864 63,390
Retained earnings, beginning
of the period 355,519 320,711 338,960 307,068
Dividends declared (19,094) (4,952) (33,951) (26,873)
Excess of cost of share
repurchase over carrying
value of related shares (2,879) (4) (4,297) (4,625)
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Retained earnings, end
of period 357,576 338,960 357,576 338,960
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Weighted average number of
common shares outstanding
('000's)
Basic 70,682 70,730 70,714 70,729
Diluted 73,399 72,629 73,321 72,818
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Earnings per share
Basic $0.34 $0.33 $0.80 $0.90
Diluted $0.33 $0.32 $0.78 $0.87
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Dividends declared per share
Common $0.27 $0.07 $0.48 $0.38
Convertible, non-voting 0.14 0.14 0.14 0.14
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Leon's Furniture Limited-Meubles Leon Ltee
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
Three month period ended December 31st
($ in thousands)
Net of
tax
2009 Tax effect 2009
Net income for the period 24,030 - 24,030
Other comprehensive income, net of tax
Unrealized gains on available-for-sale
financial assets arising during
the period 268 45 223
Reclassification adjustment for net gains
and (losses) included in net income (247) (39) (208)
Change in unrealized gains on
available-for-sale financial assets
arising during the period 21 6 15
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Comprehensive income for the period 24,051 6 24,045
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Net of
tax
2008 Tax effect 2008
Net income for the period 23,205 - 23,205
Other comprehensive income, net of tax
Unrealized losses on available-for-sale
financial assets arising during
the period (424) (73) (351)
Reclassification adjustment for net gains
and (losses) included in net income 16 3 13
Change in unrealized losses on
available-for-sale financial assets
arising during the period (408) (70) (338)
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Comprehensive income for the period 22,797 (70) 22,867
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Twelve month period ended December 31st
($ in thousands)
Net of
tax
2009 Tax effect 2009
Net income for the period 56,864 56,864
Other comprehensive income, net of tax
Unrealized gains on available-for-sale
financial assets arising during
the period 2,578 430 2,148
Reclassification adjustment for net gains
and (losses) included in net income (232) (37) (195)
Change in unrealized gains on
available-for-sale financial assets
arising during the period 2,346 393 1,953
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Comprehensive income for the period 59,210 393 58,817
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Net of
tax
2008 Tax effect 2008
Net income for the period 63,390 - 63,390
Other comprehensive income, net of tax
Unrealized losses on available-for-sale
financial assets arising during
the period (2,671) (454) (2,217)
Reclassification adjustment for net gains
and (losses) included in net income (957) (162) (795)
Change in unrealized losses on
available-for-sale financial assets
arising during the period (3,628) (616) (3,012)
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Comprehensive income for the period 59,762 (616) 60,378
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Leon's Furniture Limited-Meubles Leon Ltee
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Period ended December 31st
($ in thousands) 3 months ended 12 months ended
2009 2008 2009 2008
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OPERATING ACTIVITIES
Net income for the period 24,030 23,201 56,864 63,390
Add (deduct) items not involving
a current cash payment
Amortization of property,
plant & equipment 3,967 4,162 15,810 15,472
Amortization of intangible
assets 187 312 752 781
Amortization of deferred
warranty revenue (3,951) (3,714) (15,900) (14,541)
Loss (gain) on sale of
marketable securities (229) 65 275 (411)
Future tax expense (2,087) 1,190 (1,608) 1,350
Gain on sale of property,
plant & equipment 1 - (32) (1,665)
Cash received on
warranty sales 5,009 5,155 17,319 17,834
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26,927 30,371 73,480 82,210
Net change in non-cash working
capital balances related to
operations 21,517 (14,012) 4,035 (12,482)
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Cash provided by operating
activities 48,444 16,359 77,515 69,728
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INVESTING ACTIVITIES
Purchase of property,
plant & equipment (1,480) (7,161) (10,545) (22,587)
Purchase of intangibles (330) - (685) (81)
Proceeds on sale of property,
plant & equipment - - 48 2,775
Purchase of marketable
securities 80,882 (124,737) (285,311) (287,913)
Proceeds on sale of marketable
securities (92,262) 138,776 274,749 301,482
Issuance of series 2009
redeemable share liability - - 10,683 -
Decrease(increase) in employee
share purchase loans 217 670 (9,154) 2,626
Purchase of Appliance Canada Ltd. - (1,982) - (20,704)
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Cash used in investing
activities (12,973) 5,566 (20,215) (24,402)
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FINANCING ACTIVITIES
Dividends paid (19,111) (4,943) (33,965) (26,870)
Repurchase of common shares (3,023) - (4,517) (4,672)
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Cash used in financing
activities (22,134) (4,943) (38,482) (31,542)
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Net increase in cash and
cash equivalents
during the period 13,337 16,982 18,818 13,784
Cash and cash equivalents,
beginning of period 44,964 22,501 39,483 25,699
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Cash and cash equivalents,
end of period 58,301 39,483 58,301 39,483
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For further information: Dominic Scarangella, (416) 243-4073
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