Strong growth for Richelieu in the third quarter of 2010
5 acquisitions since the beginning of 2010
40.6% increase in net earnings for the first nine months
-------------------------------------------------------------------------
- Net earnings grew by 16.7% in the third quarter to $10.3 million or
$0.48 per share, and by 40.6% for the first nine months of the year to
$28.9 million or $1.33 per share
- Consolidated sales stood at $116.0 million, an increase of 8.2% for the
third quarter, and at $329.1 million, an increase of 7.2% for the first
nine months of the year
- Acquisition of Gordon Industrial Materials Ltd. (Montreal, Qc and
Mississauga, Ont.) and New Century Distributors Grp LLC (Avenel,
New Jersey)
- Cash totalled $53.1 million as at August 31, 2010
- SUBSEQUENT EVENT - Acquisition of E. Kinast Distributors, Inc. in the
Greater Chicago market, Illinois, U.S.
-------------------------------------------------------------------------TSX: RCH
</pre>
<p/>
<p><span class="xn-location">MONTREAL</span>, <span class="xn-chron">Sept. 30</span> /CNW Telbec/ - Richelieu achieved strong growth during the third quarter and ended the period as at <span class="xn-chron">August 31, 2010</span> with an excellent balance sheet. With the strength of its organization, its innovation strategy and development initiatives, the Company benefited from the sustained robustness of Canadian markets and won new market share in the <span class="xn-location">United States</span>, where economic conditions remain uncertain. During the quarter, Richelieu closed one acquisition in <span class="xn-location">Canada</span> and another in the <span class="xn-location">United States</span>, and on <span class="xn-chron">September 27</span>, it closed its fifth acquisition since the beginning of 2010.</p>
<p>"Our strongest growth was posted in our key customer segments, notably the kitchen cabinet makers niche where sales grew by 18.5% in <span class="xn-location">Canada</span> and 14.2% in the <span class="xn-location">United States</span>, and we recorded significant increases in the Canadian home furnishing and office furniture manufacturers markets. We also highlight the 16.7% growth in our sales in U.S. dollars in the U.S. manufacturers market, attesting to our successful efforts to win new market share. Our consolidated sales totalled <span class="xn-money">$116.0 million</span>, up 8.2% over the third quarter of 2009, of which 4.6% from internal growth and 3.6% from acquisitions. As for the EBITDA margin, it improved to 14.7%, up from 13.9% in the corresponding quarter of 2009, and for the first nine months of the year, it stood at 14.2%, compared with 11.6% for the first nine months of 2009," indicated <span class="xn-person">Richard Lord</span>, President and Chief Executive Officer.</p>
<p/>
<p>CENTRE START-UP AND ACQUISITIONS</p>
<p/>
<p>During the first quarter, the Company opened a new distribution centre in <span class="xn-location">Raleigh</span>, North Carolina, while also completing the acquisition of Woodland Specialities, Inc. in New York State and Raybern Company in Connecticut - both of which contributed to third-quarter results. On <span class="xn-chron">July 14</span>, Richelieu closed the acquisition of Gordon Industrial Materials Ltd., a distributor operating in <span class="xn-location">Quebec</span> and Ontario, which brought a six week contribution to the quarterly results, and on <span class="xn-chron">August 30, 2010</span> came the closing of the acquisition of New Century Distributors Grp LLC in New Jersey. Then on <span class="xn-chron">September 27</span>, Richelieu closed the acquisition of E. Kinast Distributors, Inc., with operations in the Greater <span class="xn-location">Chicago</span> market. Another acquisition project (announced in <span class="xn-chron">July 2010</span>) is currently undergoing due diligence and negotiation of the acquisition agreement to the satisfaction of both parties. With these five acquisitions and the transaction in progress, Richelieu will increase its sales by some <span class="xn-money">$70 million</span> annually and, as was the case for previous acquisitions, the Company will focus on creating attractive synergies in upcoming periods.</p>
<p/>
<p>NEXT DIVIDEND PAYMENT</p>
<p/>
<p>At its meeting on <span class="xn-chron">September 30, 2010</span>, the Board of Directors approved the payment of a quarterly dividend of <span class="xn-money">$0.09</span> per share. This dividend is payable on <span class="xn-chron">October 28, 2010</span> to shareholders of record as at <span class="xn-chron">October 14, 2010</span>.</p>
<p/>
<p>ANALYSIS OF OPERATING RESULTS FOR THE THIRD QUARTER AND FIRST NINE MONTHS ENDED <span class="xn-chron">AUGUST 31, 2010</span> COMPARED WITH THOSE OF THE THIRD QUARTER AND FIRST NINE MONTHS ENDED <span class="xn-chron">AUGUST 31, 2009</span></p>
<p/>
<p>Third-quarter consolidated sales totalled <span class="xn-money">$116.0 million</span>, up by <span class="xn-money">$8.8 million</span> or 8.2% over the third quarter of 2009. Richelieu continued to build upon all its product offering and quality of service strengths to benefit from the sustained robustness of its Canadian markets, while successfully making further efforts to win market share in the <span class="xn-location">United States</span>. This sales increase came from a 4.6% internal growth and a 3.6% growth from the acquisition of Paint Direct Inc. ("Paint Direct") (<span class="xn-location">Calgary</span>, Alberta) and Woodland Specialties, Inc. ("Woodland") (<span class="xn-location">Syracuse</span>, New York), acquired on <span class="xn-chron">November 4</span> and <span class="xn-chron">December 1, 2009</span> respectively, Raybern Company, Inc. ("Raybern") (<span class="xn-person">Rocky Hill</span>, Connecticut), acquired on <span class="xn-chron">April 26, 2010</span>, and the six-week contribution of Gordon Industrial Materials Ltd. ("Gordon") (<span class="xn-location">Montreal</span>, <span class="xn-location">Quebec</span> and Mississauga, Ontario), acquired on <span class="xn-chron">July 14, 2010</span>.</p>
<p>Richelieu's sales to manufacturers grew by 10.2% to <span class="xn-money">$96.3 million</span>, up from <span class="xn-money">$87.4 million</span> for the corresponding period of 2009, an increase of <span class="xn-money">$8.9 million</span>. The strongest growth was posted in the kitchen and bathroom cabinet makers, residential and commercial woodworking and office furniture manufacturers markets. In the hardware retailers and renovation superstore markets, sales remained relatively stable at <span class="xn-money">$19.6 million</span>, compared with <span class="xn-money">$19.8 million</span> for the same quarter of 2009.</p>
<p>In <span class="xn-location">Canada</span>, Richelieu achieved sales of <span class="xn-money">$98.1 million</span>, compared with <span class="xn-money">$90.8 million</span> for the third quarter of 2009, an increase of <span class="xn-money">$7.3 million</span> or 8.0%, of which 7.3% from internal growth and 0.7% from the contribution of Paint Direct and Gordon. The three Canadian markets remained robust, favouring solid growth over the same quarter of 2009, with more significant increases in Eastern <span class="xn-location">Canada</span> and Ontario.</p>
<p>In the <span class="xn-location">United States</span>, Richelieu's sales grew by 16.7% to US$17.2 million, an increase of US$2.5 million, of which 5.2% from internal growth and 11.5% from the contribution of Woodland and Raybern, acquired in the first quarter of the year. The Company won further market share in the <span class="xn-location">United States</span> thanks to its diversified and distinctive product offering and the dynamism of its sales force. Considering the effect of exchange rates, U.S. sales rose 9.1% upon conversion to Canadian dollars; they stood at <span class="xn-money">$17.9 million</span>, compared with <span class="xn-money">$16.4 million</span> for the corresponding quarter of 2009, thereby accounting for 15.4% of the quarter's consolidated sales.</p>
<p>For the first nine months, Richelieu recorded consolidated sales of <span class="xn-money">$329.1 million</span>, up by <span class="xn-money">$22.1 million</span> or 7.2% over the corresponding period of 2009, of which 5.0% from internal growth and 2.2% from the acquisition of Paint Direct, Woodland and Raybern as well as Gordon's contribution for a six-week period.</p>
<p>Sales to manufacturers totalled <span class="xn-money">$271.0 million</span>, an increase of <span class="xn-money">$16.7 million</span> or 6.6% over the first nine months of the previous year. Sales to hardware retailers and renovation superstores stood at <span class="xn-money">$58.1 million</span>, up by <span class="xn-money">$5.4 million</span> or 10.3% over the corresponding period of 2009.</p>
<p>In <span class="xn-location">Canada</span>, Richelieu achieved sales of <span class="xn-money">$280.5 million</span>, an increase of <span class="xn-money">$26.2 million</span> or 10.3%, of which 9.6% from internal growth and 0.7% from the contribution of Paint Direct and Gordon. Canadian sales accounted for 85.2% of consolidated sales for the first nine months of 2010.</p>
<p>In the <span class="xn-location">United States</span>, sales amounted to US$46.8 million, up 5.6% - the 7.8% growth from the acquisition of Woodland and Raybern was partially offset by the 2.2% internal decrease due to the major market slowdown during the first two quarters of the year. Considering the effect of exchange rates, U.S sales declined by 7.7% upon conversion to Canadian dollars; they stood at US$48.6 million, compared with <span class="xn-money">$52.6 million</span> for the corresponding period of 2009, thereby accounting for 14.8% of consolidated sales for the first nine months of 2010.</p>
<p>Third-quarter earnings before income taxes, interest, amortization and non-controlling interest (EBITDA) amounted to <span class="xn-money">$17.1 million</span>, up 14.2% over the corresponding quarter of 2009. The gross margin was positively affected by the strong Canadian dollar and the product mix sold in <span class="xn-location">Canada</span>. Combined with these positive factors, the increase in consolidated sales and tight cost control measures raised the EBITDA profit margin to 14.7%, up from 13.9% in the third quarter of 2009.</p>
<p>Income taxes increased by <span class="xn-money">$0.8 million to $5.1 million</span>, due to the period's earnings growth.</p>
<p>For the first nine months, earnings before income taxes, interest, amortization and non-controlling interest (EBITDA) totalled <span class="xn-money">$46.7 million</span>, up 31.2% over the first nine months of 2009. The gross margin was positively affected by the strength of the Canadian dollar in 2010 and the product mix sold in <span class="xn-location">Canada</span> during the third quarter, and by the fact that the costs incurred to penetrate the retailers market were lower than last year and the Company is now reaping the benefits of this investment. Combined with these positive factors, the increase in consolidated sales and tight cost control measures raised the EBITDA profit margin to 14.2%, up from 11.6% for the first nine months of the previous year.</p>
<p>Income taxes increased by <span class="xn-money">$3.7 million to $13.6 million</span>, due to the earnings growth in the first nine months of 2010.</p>
<p>In the third quarter, considering the major aforementioned factors for the EBITDA, net earnings grew by 16.7% to <span class="xn-money">$10.3 million</span>. The net profit margin from continuing operations improved to 8.9% of consolidated sales, up from 8.3% for the third quarter of the previous year. Earnings per share amounted to <span class="xn-money">$0.48</span> (basic and diluted), an increase of 20.0%.</p>
<p>Comprehensive income amounted to <span class="xn-money">$11.3 million</span>, on account of a positive adjustment of <span class="xn-money">$1.0 million</span> on translation of the financial statements of the self-sustaining subsidiary in the <span class="xn-location">United States</span>, compared with comprehensive income of <span class="xn-money">$9.0 million</span> for the third quarter of the previous year, on account of a positive adjustment of <span class="xn-money">$0.1 million</span> on translation of this same subsidiary's financial statements.</p>
<p>For the first nine months, net earnings totalled <span class="xn-money">$28.9 million</span>, up 40.6% over the corresponding period of 2009. This growth reflects the various aforementioned factors for the EBITDA as well as an after-tax non-recurring gain of <span class="xn-money">$0.7 million</span> on the disposal of the ceramics activities during the first quarter of the current fiscal year. The net profit margin improved significantly to 8.8% of consolidated sales, up from 6.7% for the first nine months of the previous year. Earnings per share amounted to <span class="xn-money">$1.33</span> (basic and diluted), up 43.0% on account of the contribution of the discontinued operations of <span class="xn-money">$0.03</span> per share for 2010, compared with a negative effect of <span class="xn-money">$0.01</span> per share for 2009.</p>
<p>On account of the positive adjustment of <span class="xn-money">$0.5 million</span> on translation of the financial statements of the self-sustaining subsidiary in the <span class="xn-location">United States</span>, comprehensive income totalled <span class="xn-money">$29.3 million</span> for the first nine months, whereas comprehensive income for the corresponding period of 2009 stood at <span class="xn-money">$14.4 million</span>, on account of a negative adjustment of <span class="xn-money">$6.1 million</span> on translation of this same subsidiary's financial statements.</p>
<p/>
<p>Operating activities</p>
<p/>
<p>Third-quarter cash flows provided by operating activities (before net change in non-cash working capital balances related to operations) totalled <span class="xn-money">$12.8 million</span> or <span class="xn-money">$0.59</span> per share, up from <span class="xn-money">$10.9 million</span> or <span class="xn-money">$0.50</span> per share for the third quarter of 2009, mainly reflecting the <span class="xn-money">$1.4 million</span> growth in net earnings for the quarter. Net change in non-cash working capital balances related to operations represented a cash outflow of <span class="xn-money">$3.6 million</span> due primarily to the increase in inventories, compared with a cash inflow of <span class="xn-money">$17.1 million</span> for the third quarter of 2009, generated by accounts payable, income taxes, inventories and accounts receivable. Consequently, operating activities provided cash flows of <span class="xn-money">$9.2 million</span>, compared with <span class="xn-money">$28.1 million</span> for the third quarter of 2009.</p>
<p>In the first nine months, operating activities provided cash flows (before net change in non-cash working capital balances related to operations) of <span class="xn-money">$34.0 million</span> or <span class="xn-money">$1.56</span> per share, up from <span class="xn-money">$26.7 million</span> or <span class="xn-money">$1.21</span> per share for the first nine months of 2009, mainly reflecting the <span class="xn-money">$7.4 million</span> growth in net earnings. Net change in non-cash working capital balances related to operations represented a cash outflow of <span class="xn-money">$6.2 million</span>, compared with a cash inflow of <span class="xn-money">$13.9 million</span> for the corresponding period of 2009. This variation is due to an increase in accounts receivable, inventories and prepaid expenses totalling <span class="xn-money">$14.6 million</span>, whereas accounts payable and income taxes payable represented a variance of <span class="xn-money">$8.4 million</span>. Consequently, operating activities provided cash flows of <span class="xn-money">$27.8 million</span>, compared with <span class="xn-money">$40.5 million</span> for the first nine months of 2009.</p>
<p/>
<p>Financing activities</p>
<p/>
<p>Third-quarter financing activities represented a cash outflow of <span class="xn-money">$4.3 million</span>, compared with <span class="xn-money">$1.8 million</span> for the third quarter of 2009. The Company paid <span class="xn-money">$1.9 million</span> in dividends to its shareholders, up by <span class="xn-money">$0.2 million</span> over the third quarter of the previous year considering the 12.5% increase in the quarterly dividend announced on <span class="xn-chron">January 28, 2010</span>. In addition, a total of 102,800 common shares were repurchased for cancellation for a consideration of <span class="xn-money">$2.6 million</span> under Richelieu's normal course issuer bid, whereas no shares were repurchased in the third quarter of the previous year.</p>
<p>In the first nine months, financing activities represented a cash outflow of <span class="xn-money">$16.9 million</span>, compared with <span class="xn-money">$5.4 million</span> for the corresponding period of 2009. The Company paid <span class="xn-money">$5.8 million</span> in dividends to its shareholders, a growth of <span class="xn-money">$0.6 million</span> reflecting the 12.5% increase in the quarterly dividend announced on <span class="xn-chron">January 28, 2010</span>. In addition, a total of 466,900 common shares were repurchased for cancellation for a consideration of <span class="xn-money">$11.5 million</span>, compared with a repurchase of 4,000 common shares for a consideration of approximately <span class="xn-money">$0.1 million</span> during the first nine months of the previous year.</p>
<p/>
<p>Investing activities</p>
<p/>
<p>In the third quarter, the Company made investments of <span class="xn-money">$4.8 million</span>, of which <span class="xn-money">$4.2 million</span> in the acquisition of the principal net assets of Gordon and New Century Distributors Grp LLC ("New Century") (as at <span class="xn-chron">August 30</span>, 2010), and the balance in leasehold improvements, equipment to improve the distribution centres' productivity and showrooms.</p>
<p>In the first nine months, the Company invested <span class="xn-money">$8.2 million</span>, of which <span class="xn-money">$6.0 million</span> in the acquisition of the principal assets of Woodland, Raybern and Gordon, and the balance in various leasehold improvements, equipment to improve the distribution centres' productivity and showrooms.</p>
<p/>
<p>Sources of financing</p>
<p/>
<p>As at <span class="xn-chron">August 31, 2010</span>, cash and cash equivalents totalled <span class="xn-money">$53.1 million</span>, up from <span class="xn-money">$37.0 million</span> for the same period of 2009. The Company posted an excellent working capital of <span class="xn-money">$164.0 million</span> for a current ratio of 4.0:1, compared with <span class="xn-money">$150.5 million</span> and a 4.7:1 ratio as at <span class="xn-chron">November 30, 2009</span>.</p>
<p/>
<p>Assets</p>
<p/>
<p>As at <span class="xn-chron">August 31, 2010</span>, total assets amounted to <span class="xn-money">$313.4 million</span>, up from <span class="xn-money">$285.2 million</span> a year earlier, a 9.9% growth reflecting the increase in cash and the expansion completed since the beginning of the year. Current assets grew by 15.9% or <span class="xn-money">$30.0 million</span> over <span class="xn-chron">August 31, 2009</span>; this growth is due mainly to the <span class="xn-money">$16.1 million</span> increase in cash and cash equivalents, a nil amount of income taxes receivable, compared with an amount receivable of <span class="xn-money">$1.1 million</span> as at <span class="xn-chron">August 31, 2009</span>, a <span class="xn-money">$2.9 million</span> increase in accounts receivable related to acquisitions completed within the last 12 months and a <span class="xn-money">$12.7 million</span> increase in inventories derived from acquisitions and in response to the greater demand.</p>
<p/>
<p>Net cash</p>
<p/>
<pre>
As at August 31 2010 2009
(in thousands of $)
-------------------------------------------------------------------------
Current portion of long-term debt 1,536 223
Long-term debt 751 328
-------------------------------------------------------------------------
Total 2,287 551
-------------------------------------------------------------------------
Cash and cash equivalents 53,149 37,000
Total net cash 50,862 36,449
-------------------------------------------------------------------------
</pre>
<p/>
<p>After deducting total interest-bearing debt of <span class="xn-money">$2.3 million</span>, the Company posted total net cash of <span class="xn-money">$50.9 million</span> as at <span class="xn-chron">August 31, 2010</span>, showing that it continues to benefit from a healthy and solid financial position that enables it to pursue its business strategy.</p>
<p>Shareholders' equity totalled <span class="xn-money">$253.5 million</span> as at <span class="xn-chron">August 31, 2010</span>, up from <span class="xn-money">$238.0 million</span> a year earlier; this 6.5% growth mainly reflects the <span class="xn-money">$16.0 million</span> increase in retained earnings, which amounted to <span class="xn-money">$235.8 million</span> at the end of the period, and an increase of <span class="xn-money">$0.5 million</span> in capital stock and of approximately <span class="xn-money">$0.2 million</span> in contributed surplus, less the <span class="xn-money">$3.8 million</span> reduction in accumulated comprehensive income. At the close of the first nine months, the book value per share stood at <span class="xn-money">$11.87</span>, compared with <span class="xn-money">$10.84</span> as at <span class="xn-chron">August 31, 2009</span>.</p>
<p/>
<p>Subsequent event</p>
<p/>
<p>On <span class="xn-chron">September 27, 2010</span>, Richelieu closed the acquisition of the net assets of E. Kinast Distributors, Inc. ("EKD"), located in <span class="xn-location">Hannover</span> Park, in the <span class="xn-location">Chicago</span> region, Illinois (U.S.) for a cash consideration of US$2.4 million and a conditional balance of sale of US$0.7 million. EKD is a distributor of hardware, laminates, finishing and complementary products targeted to a customer base of kitchen cabinet makers and the residential and commercial woodworking industry.</p>
<p>Through this acquisition, Richelieu establishes its presence in the Greater <span class="xn-location">Chicago</span> Area, increases its sales by some <span class="xn-money">$10 million</span> annually and adds a new distribution centre to its U.S. network, which now comprises 22 centres. EKD's activities are fully compatible with Richelieu's operations and acquisition criteria and will contribute to the Company's earnings.</p>
<p/>
<p>Outlook</p>
<p/>
<p>The Company remains focused on its innovation strategy, the sales synergies arising from its acquisitions, the opening of new distribution centres, and winning new market share in <span class="xn-location">Canada</span> and the <span class="xn-location">United States</span>. Management expects Richelieu to end the year as at <span class="xn-chron">November 30, 2010</span> with increased results thanks to internal growth, the benefits of the new <span class="xn-location">Raleigh</span>, North Carolina centre and the acquisitions closed during the year.</p>
<p/>
<pre>
Profile as at August 31, 2010
-----------------------------
</pre>
<p/>
<p>Richelieu 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 more than 70,000 different items targeted to a base of over 40,000 customers who are served by 53 centres in <span class="xn-location">North America</span> - 30 distribution centres across <span class="xn-location">Canada</span>, 21 in the <span class="xn-location">United States</span> and two manufacturing plants in <span class="xn-location">Canada</span>, 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 and a broad selection of decorative mouldings.</p>
<p/>
<p>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 these assumptions and expectations reasonable based on the information available at the time they are written, they could prove 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 2008 Annual Report as well as its Annual Information Form, which are available on the System for Electronic Document Analysis and Retrieval (SEDAR) website at <a href="http://www.sedar.com">www.sedar.com</a>. 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.</p>
<p/>
<pre>
-------------------------------------------------------------------------
CONFERENCE CALL - SEPTEMBER 30, 2010 AT 2:30 P.M. (EASTERN TIME)
-------------------------------------------------------------------------
</pre>
<p/>
<p>Financial analysts and investors interested in participating in the conference call on Richelieu's results to be held at <span class="xn-chron">2:30 p.m.</span> on <span class="xn-chron">September 30, 2010</span> can dial 1-866-865-3087 a few minutes before the start of the call. For those unable to participate, a taped rebroadcast will be available as of <span class="xn-chron">5:30 p.m.</span> on <span class="xn-chron">September 30, 2010</span> until midnight on <span class="xn-chron">October 7, 2010</span>, by dialing 1-800-642-1687, access code: 11942791. Members of the media are invited to listen in.</p>
<p/>
<pre>
-------------------------------------------------------------------------
Photos are available under "About Richelieu" - "Media" section at
www.www.richelieu.com
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
(In thousands of dollars,
except earnings per share)
For the For the
three-month period nine-month period
ended August 31, ended August 31,
2010 2009 2010 2009
Adjusted(1) Adjusted(1)
$ $ $ $
--------------------------------------------
Sales 115,957 107,181 329,100 307,005
Cost of sales and warehouse,
selling and administrative
expenses 98,903 92,252 282,402 271,406
--------------------------------------------
Earnings before the
following 17,054 14,929 46,698 35,599
--------------------------------------------
Amortization of capital
assets 1,295 1,281 3,851 3,797
Amortization of intangible
assets 322 328 974 1,032
Financial costs, net (94) (17) (154) (64)
--------------------------------------------
1,523 1,592 4,671 4,765
--------------------------------------------
Earnings before income
taxes, non-controlling
interest and discontinued
operations 15,531 13,337 42,027 30,834
Income taxes 5,049 4,297 13,614 9,879
--------------------------------------------
Earnings before
non-controlling interest
and discontinued operations 10,482 9,040 28,413 20,955
Non-controlling interest 134 117 220 183
--------------------------------------------
Net earnings from continued
operations 10,348 8,923 28,193 20,722
--------------------------------------------
--------------------------------------------
Net profit (net loss) from
discontinued operations - (53) 659 (248)
--------------------------------------------
Net earnings 10,348 8,870 28,852 20,524
--------------------------------------------
--------------------------------------------
Earnings per share
Basic
From continued operations 0.48 0.40 1.30 0.94
From discontinued operations - - 0.03 (0.01)
--------------------------------------------
0.48 0.40 1.33 0.93
--------------------------------------------
--------------------------------------------
Diluted
From continued operations 0.48 0.40 1.30 0.94
From discontinued operations - - 0.03 (0.01)
--------------------------------------------
0.48 0.40 1.33 0.93
--------------------------------------------
--------------------------------------------
(1) The comparative figures included in the consolidated statements of
earnings and cash flows have been adjusted subsequent to the
classification of the ceramic sales activities' results as
discontinued operations.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(unaudited)
(In thousands of dollars)
For the For the
three-month period nine-month period
ended August 31, ended August 31,
2010 2009 2010 2009
$ $ $ $
--------------------------------------------
Net earnings 10,348 8,870 28,852 20,524
Retained earnings, beginning
of period 229,938 212,672 223,986 204,591
Dividends (1,922) (1,758) (5,845) (5,274)
Premium on redemption of
common shares for
cancellation (2,521) - (11,150) (57)
--------------------------------------------
Retained earnings, end
of period 235,843 219,784 235,843 219,784
--------------------------------------------
--------------------------------------------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(In thousands of dollars)
For the For the
three-month period nine-month period
ended August 31, ended August 31,
2010 2009 2010 2009
$ $ $ $
--------------------------------------------
Net earnings 10,348 8,870 28,852 20,524
Other comprehensive income
Translation adjustment of
the net investment in
self-sustaining foreign
operations 985 146 496 (6,141)
--------------------------------------------
Comprehensive income 11,333 9,016 29,348 14,383
--------------------------------------------
--------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands of dollars)
For the For the
three-month period nine-month period
ended August 31, ended August 31,
2010 2009 2010 2009
Adjusted(1) Adjusted(1)
$ $ $ $
--------------------------------------------
OPERATING ACTIVITIES
Net earnings from continued
operations 10,348 8,923 28,193 20,772
Non-cash items
Amortization of capital
assets 1,295 1,281 3,851 3,797
Amortization of intangible
assets 322 328 974 1,032
Future income taxes 515 76 225 226
Non-controlling interest 134 117 220 183
Stock-based compensation
expense 177 213 562 673
--------------------------------------------
12,791 10,938 34,025 26,683
Net change in non-cash
working capital balances
related to operations (3,578) 17,136 (6,193) 13,859
--------------------------------------------
9,213 28,074 27,832 40,542
--------------------------------------------
FINANCING ACTIVITIES
Reimbursement of long
term debt - - - (36)
Dividends paid (1,922) (1,758) (5,845) (5,274)
Issue of common shares 197 - 441 -
Redemption of common shares
for cancellation (2,602) - (11,521) (60)
--------------------------------------------
(4,327) (1,758) (16,925) (5,370)
--------------------------------------------
INVESTING ACTIVITIES
Business acquisitions (4,239) - (6,006) -
Additions to capital assets (591) (673) (2,242) (2,445)
--------------------------------------------
(4,830) (673) (8,248) (2,445)
--------------------------------------------
Effect of exchange rate
fluctuations on cash and
cash equivalents (156) (8) (207) (31)
Net change in cash and cash
equivalents from continued
operations (100) 25,635 2,452 32,696
Cash flows from discontinued
operations - (1,288) 2,255 (1,822)
--------------------------------------------
Cash and cash equivalents,
beginning of year 53,249 12,653 48,442 6,126
--------------------------------------------
Cash and cash equivalents,
end of year 53,149 37,000 53,149 37,000
--------------------------------------------
--------------------------------------------
Supplemental information
Income taxes paid 3,113 2,232 10,909 11,945
Interest received, net (64) (18) (115) (105)
--------------------------------------------
(1) The comparative figures included in the consolidated statements of
earnings and cash flows have been adjusted subsequent to the
classification of the ceramic sales activities' results as
discontinued operations.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands of dollars)
As at As at As at
August 31, August 31, November 30,
2010 2009 2009
$ $ $
--------------------------------------
ASSETS
Current assets
Cash and cash equivalents 53,149 37,000 48,442
Accounts receivable 57,604 54,716 55,793
Income tax receivable - 1,134 -
Inventories 107,804 95,153 87,058
Prepaid expenses 295 800 327
--------------------------------------
218,852 188,803 191,620
--------------------------------------
Capital assets 18,184 20,241 19,569
Intangible assets 12,668 13,138 12,853
Goodwill 63,719 62,979 62,449
--------------------------------------
313,423 285,161 286,491
--------------------------------------
--------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities 49,875 41,154 40,108
Income taxes payable 3,471 - 676
Current portion of long-term debt 1,536 223 351
--------------------------------------
54,882 41,377 41,135
--------------------------------------
Long-term debt 751 328 317
Future income taxes 952 2,478 1,407
Non-controlling interest 3,352 3,021 3,132
--------------------------------------
59,937 47,204 45,991
--------------------------------------
Shareholders' equity
Capital stock 17,613 17,102 16,916
Contributed surplus 3,858 3,711 3,922
Retained earnings 235,843 219,784 223,986
Accumulated other comprehensive
income (3,828) (2,640) (4,324)
--------------------------------------
253,486 237,957 240,500
--------------------------------------
313,423 285,161 286,491
--------------------------------------
--------------------------------------
For further information: Richard Lord, President and Chief Executive Officer; Alain Giasson, Vice-President and Chief Financial Officer, Tel: (514) 336-4144, www.richelieu.com
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