TORONTO, Aug. 11 /CNW/ - For the three months ended June 30, 2006, total
Leon's sales were $173,082,000 including $39,054,000 of franchise sales
($160,886,000 including $38,953,000 of franchise sales in 2005), an increase
of 7.6%. Net income was $8,252,000, 47 cents per common share ($7,850,000,
43 cents per common share in 2005), an increase of 9.3% per common share.
For the six months ended June 30, 2006, total Leon's sales were
$328,055,000 including $74,009,000 of franchise sales ($308,953,000 including
$73,438,000 of franchise sales in 2005), an increase of 6.2% and net income
was $18,004,000, $1.02 per common share ($15,676,000, 86 cents per common
share in 2005), an increase of 18.6% per common share. The first quarter 2006
includes a net after tax gain from sale of property of $1,500,000 or 8 cents
per common share.
Overall, we are pleased that we were able to continue to improve our
financial results in the second quarter of 2006. Our strong capital position
will allow us to focus on increasing market share in existing and new markets
going forward. Renovation and expansion plans will continue during 2006 and
beyond. We have just completed a successful opening of our renovated showroom
and warehouse in Dartmouth, Nova Scotia. Renovations have been completed at
our Winnipeg, Manitoba store with a grand re-opening scheduled in the third
quarter 2006. We also plan to open new showrooms and warehouses in Saskatoon,
Saskatchewan this fall and Newmarket, Ontario in early 2007. Major renovations
of existing stores in Calgary, Alberta; and Kitchener, Ontario are ongoing and
should be completed within the next year.
The Directors have declared a quarterly dividend of 25 cents per common
share payable on the 12th day of October 2006 to shareholders of record at the
close of business on the 12th day of September 2006.
The Directors have also approved, subject to obtaining regulatory
approvals, the continuation of the Company's ongoing Normal Course Issuer Bid,
which expires on September 2, 2006. Pursuant to the continued bid, the Company
intends, in the twelve months commencing September 3, 2006, to purchase up to
the lesser of 883,473 of its Common Shares, representing approximately 4.99%
of its approximately 17,704,887 Common Shares outstanding on August 11, 2006,
and the amount equal to 4.99% of its Common Shares outstanding on the date the
Toronto Stock Exchange accepts the notice of intention to make a normal course
issuer bid.
Since September 3, 2005, the date on which Leon's current issuer bid
commenced, the company has purchased 240,000 Common Shares at an average price
of $38.56 per share. The Company's management believes that the purchase of
its common shares is an appropriate use of its corporate funds, given its very
strong liquidity position.
EARNINGS PER SHARE FOR EACH QUARTER
-----------------------------------
<<
YEAR
----
MARCH 31 JUNE 30 SEPT. 30 DEC. 31 TOTAL
-------- ------- -------- ------- -----
2006 - Basic 55 cents 47 cents $1.02
- Fully Diluted 53 cents 45 cents $0.98
2005 - Basic 43 cents 43 cents 76 cents $1.11 $2.73
- Fully Diluted 41 cents 42 cents 74 cents $1.04 $2.61
2004 - Basic 40 cents 41 cents 75 cents 93 cents $2.49
- Fully Diluted 39 cents 40 cents 73 cents 89 cents $2.41
LEON'S FURNITURE LIMITED - MEUBLES LEON LTEE
Mark J. Leon
Chairman of the Board
MANAGEMENT'S DISCUSSION AND ANALYSIS
>>
August 11, 2006
Management's Discussion and Analysis ("MD&A") should be read in
conjunction with the unaudited consolidated interim financial statements of
the Company for the six months ended June 30, 2006, MD&A for the year ended
December 31, 2005, the audited consolidated financial statements for the year
ended December 31, 2005 and the Company's Annual Information Form dated
March 24, 2006.
Financial Statements Governance Practice
Leon's Furniture Limited's financial statements have been prepared in
accordance with Canadian Generally Accepted Accounting Principles and the
amounts expressed are in Canadian dollars.
This MD&A is intended to provide readers with the information that
management believes is required to gain an understanding of Leon's Furniture
Limited's current results and to assess the Company's future prospects.
Accordingly, sections of this report contain forward-looking statements that
are based on current plans and expectations. These forward-looking statements
are effected by risks and uncertainties that could have a material impact on
future prospects. Readers are cautioned that actual events and results will
vary.
The Audit Committee of the Board of Directors of Leon's Furniture Limited
reviewed the MD&A and the financial statements, and recommended the Board of
Directors approve them. Following review by the full Board, the financial
statements and MD&A were approved.
Introduction
Leon's Furniture Limited has been in the furniture retail business for
close to 100 years. The company's 33 corporate and 26 franchise stores can be
found in every province across Canada, except British Columbia. Main product
lines sold at retail include furniture, appliances and electronics.
Revenues and Expenses
For the three months ended June 30, 2006, total Leon's sales were
$173,082,000 including $39,054,000 of franchise sales ($160,886,000 including
$38,953,000 of franchise sales in 2005), an increase of 7.6%.
Leon's corporate sales of $134,028,000 in the second quarter of 2006,
increased by $12,095,000 or 9.9%, compared to the second quarter of 2005. As
was the case in the first quarter of 2006, a major factor for the increase in
sales was attributable to the new showroom and warehouse opened in Hamilton,
Ontario in October, 2005 and a new showroom and warehouse opened in Vaughan,
Ontario in January 2006. In addition, in the second quarter of 2006, our
Sarnia franchise store was converted to a corporate store, helping to increase
corporate sales in the quarter compared to the prior year's quarter. For the
quarter, all regions were up in sales with the exception of Eastern Canada
which was down marginally from the prior year's quarter. Regionally our
strongest sales growth was in Western Canada. For the quarter, same store
corporate sales were up by 4.2% compared to the prior year's quarter.
Leon's franchise sales of $39,054,000 in the second quarter of 2006,
increased by $101,000 or 0.3%, compared to the second quarter of 2005.
Regionally we saw some marginal sales growth in Western and Eastern Canada,
with slightly lower sales in Central Canada compared to the same quarter the
prior year.
Our gross margin for the second quarter of 2006 of 40.9% was up just
under one percentage point from the second quarter of 2005. This was mainly
the result of an improvement in product margins and a more favorable product
mix.
Net operating expenses of $42,256,000 were up $5,461,000 or 14.8% for the
second quarter of 2006 compared to the second quarter of 2005. Payroll and
commission costs were up 13.9% in the quarter compared to the prior year. This
was mainly due to higher sales in the quarter as well as higher start-up
payroll costs associated with new store openings in Hamilton, Vaughan and
Sarnia, Ontario. We saw advertising expenses increase by $715,000 or 9.8% for
the second quarter compared to the prior year. A large portion of the increase
in advertising dollars over the prior year was due to three main factors:
grand opening costs related to our new showroom and warehouse in Sarnia,
Ontario; a more aggressive marketing campaign; and high advertising costs
related to two new stores opened in late 2005 and early 2006. Other operating
expenses were up 16% over the prior year's second quarter, mainly due to start
up costs relating to the openings of Vaughan and Sarnia stores in 2006. With
the exception of inflationary increases, all other operating costs in the
quarter were in line with the prior year's second quarter.
As a result of the above, net income for the second quarter of 2006 was
$8,252,000, 47 cents per common share ($7,850,000, 43 cents per common share
in 2005), an increase of 9.3% per common share.
Annual Financial Information
<<
($ in thousands, except earnings
per share) 2005 2004 2003
Net Corporate Sales 547,744 504,591 455,702
Leon's Franchise Sales 173,043 165,252 133,422
Total Leon's Sales 720,787 669,843 589,124
Net Income 48,964 46,104 38,438
Earnings Per Share
Basic $ 2.73 $ 2.49 $ 1.99
Diluted $ 2.61 $ 2.41 $ 1.92
Total Assets 381,702 370,931 340,093
Common Share Dividends Declared $ 0.80 $ 0.74 $ 0.50
Convertible, Non-Voting Shares
Dividends Declared $ 0.40 $ 0.40 $ 0.24
Liquidity and Financial Resources
In $000 - except Per Share Data
Balances as at: June 30/06 Dec. 31/05 June 30/05
---------- ---------- ----------
Cash and marketable securities 88,835 $ 95,720 $ 80,797
Accounts receivable 9,301 20,705 7,893
Inventory 71,099 72,644 68,359
Total assets 373,695 381,702 341,805
Working capital 82,101 90,111 90,437
Current Prior Prior
Quarter Quarter Quarter
For the 3 Months Ended June 30/06 March 31/06 Dec. 31/05
---------- ----------- ----------
Cash flow from operations $ 17,980 $ 4,228 $ 33,454
Purchase of capital assets 8,445 6,319 6,303
Repurchase of capital stock 74
Dividends paid 13,274 3,535 3,563
Dividends paid per share $ 0.75 $ 0.20 $ 0.20
>>
Cash, investments and marketable securities decreased by $3,584,000 in
the quarter mainly as the result of the special 50 cents dividend paid during
the second quarter.
Marketable securities consist primarily of bonds with maturities not
exceeding nine years with an interest rate range of 2.8% to 6.75% and are
stated at the lower of cost and market value. The second quarter 2006 results
reflect a $450,000 mark-to-market writedown of our investment portfolio.
As part of the warranty reinsurance agreement with a subsidiary, the
Company has pledged assets, which are part of the investment portfolio. The
pledged assets are for the benefit of the primary insurance company. The
assets are in the form of a trust with a financial institution amounting to
$11,636,000.
Inventory increased by $1,965,000 from the first quarter of 2006. The
addition of the Sarnia store in the second quarter and the build up of stock
for our fall sales season are the main reasons for this increase.
The cash provided by operating activities of $17,980,000 is the result of
the improvement in after tax profits in the quarter and the net changes in
non-cash working capital balances, primarily accounts payable and accrued
liabilities.
As mentioned, a new showroom and warehouse opened in Vaughan, Ontario
(70,000 sq. ft.) in the first quarter of 2006 and to date sales continue to
meet management expectations. Construction is near completion on a new
warehouse and showroom in Saskatoon, Saskatchewan (80,000 sq. ft.) which we
anticipate opening in late fall of 2006. Construction has also commenced on a
new warehouse and showroom in Newmarket, Ontario (98,000 sq. ft.) which will
most likely open in early 2007.
Renovations were completed in the second quarter of 2006 at our
Dartmouth, Nova Scotia store, which celebrated a grand re-opening in July
2006. Renovations at our Winnipeg, Manitoba store were just completed with a
grand re-opening scheduled for August 2006. In addition, renovations have also
commenced at our Calgary, Alberta and Kitchener, Ontario stores with
anticipated completion in 2007.
We plan to fund these new store projects and renovations from our
existing cash resources.
Common Shares
At June 30, 2006 there were 17,704,687 common shares issued and
outstanding. During the second quarter of 2006, the company repurchased 1,800
common shares and 8,758 convertible, non-voting series 1998 shares and 306
convertible, non-voting 2002 shares were converted to common shares.
For the six month period ending June 30, 2006, the Company repurchased
1,800 common shares and 29,163 convertible, non-voting series 1998 shares and
306 convertible, non-voting 2002 shares were converted to common shares.
<<
Commitments
-------------------------------------------------------------------------
Payments Due by Period 000's
------------------------------------------------
Less
than 2-3 4-5 After
Contractual Obligations Total 1 year years years 5 years
-------------------------------------------------------------------------
Operating Leases(1) 10,136 604 1,786 1,661 6,085
-------------------------------------------------------------------------
Purchase
Obligations(2) 19,581 19,581
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Contractual
Obligations 29,717 20,185 1,786 1,661 6,085
-------------------------------------------------------------------------
(1) The Company is obligated under operating leases to future minimum
annual rental payments for various land and building sites across
Canada.
(2) The estimated cost to complete construction in progress at five
locations in Canada.
In addition, the Company has commitments related to redeemable shares as
follows:
As at As at
June 30, December
($ in thousands) 2006 31, 2005
Authorized
350,000 convertible, non-voting, series 1998 shares
571,000 convertible, non-voting, series 2002 shares
201,500 convertible, non-voting, series 2005 shares
Issued
164,170 series 1998 shares (2005 - 186,195) $ 2,735 $ 3,249
387,320 series 2002 shares (2005 - 407,623) 11,003 11,135
199,500 series 2005 shares (2005 - nil) 7,404 7,535
Less employees share purchase loans (20,511) (21,513)
-------------------------------------------------------------------------
Redeemable Share Liability $ 631 $ 406
-------------------------------------------------------------------------
-------------------------------------------------------------------------
>>
Under the terms of its Management Share Purchase Plan, the Company
advanced non-interest bearing loans to certain of its employees in 1998, 2002
and 2005 to allow them to acquire convertible, non-voting, series 1998 shares,
series 2002 shares and series 2005 shares, respectively, of the Company. These
loans are repayable through the application against the loans of any dividends
on the shares, with any remaining balance repayable on the date the shares are
converted to common shares. Each issued and fully paid for series 1998, 2002
and 2005 share may be converted into one common share at any time after the
fifth anniversary date of the issue of these shares and prior to the tenth
anniversary of such issue. Each series 1998 and 2002 shares may also be
redeemed at the option of the holder or by the Company at any time after the
fifth anniversary date of the issue of these shares and must be redeemed prior
to the tenth anniversary of such issue. The series 2005 shares are redeemable
at the option of the holder for a period of one business day following the
date of issue of such shares. The Company has the option to redeem the series
2005 shares at any time after the fifth anniversary date of the issue of these
shares and must redeem prior to the tenth anniversary of such issue. The
redemption price is equal to the original issue price of the shares adjusted
for subsequent subdivisions of shares plus accrued and unpaid dividends. The
purchase prices of the shares are $17.60 per series 1998 share, $28.75 per
series 2002 share and $37.77 per series 2005 share.
Dividends paid to holders of series 1998, 2002, 2005 shares of
approximately $309,000 (2005 - $251,000) have been used to reduce the
respective shareholder loans.
During the second quarter 2006, 8,758 convertible, non-voting, series
1998 shares were converted into common shares with a stated value of $154,000
(2005 - 9,714 for a stated value of $171,000). For the six month period,
29,163 convertible, non-voting, series 1998 shares were converted into common
shares with a stated value of $513,000 (2005 - 21,916 for a stated value of
$386,000).
During the period 4,302 convertible, non-voting series 2002 shares and
3,463 convertible, non-voting series 2005 shares were cancelled with a stated
value of $76,000 and $131,000 respectively (2005 - 3,393 series 2002 shares
for a stated value of $97,500)
Quarterly Results (2006, 2005, 2004)
Quarterly Income Statement ($000) - except Per Share Data
<<
-------------------------------------------------------------------------
Quarter Ended Quarter Ended
June 30 March 31
-------------------------------------------------------------------------
2006 2005 2006 2005
-------------------------------------------------------------------------
Leon's Corporate Sales 134,028 $121,933 $120,018 $113,582
-------------------------------------------------------------------------
Leon's Franchise sales 39,054 38,953 34,955 34,485
-------------------------------------------------------------------------
Total Leon's sales 173,082 $160,886 $154,973 $148,067
-------------------------------------------------------------------------
Net Income
Per Share $ 0.47 $ 0.43 $ 0.55 $ 0.43
-------------------------------------------------------------------------
Fully Diluted
Per Share $ 0.45 $ 0.42 $ 0.53 $ 0.41
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Quarter Ended Quarter Ended
December 31 September 30
-------------------------------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------
Leon's Corporate Sales $170,244 $153,080 $141,985 $131,145
-------------------------------------------------------------------------
Leon's Franchise sales 54,535 54,867 45,070 42,076
-------------------------------------------------------------------------
Total Leon's sales $224,779 $207,947 $187,055 $173,221
-------------------------------------------------------------------------
Net Income
Per Share $ 1.11 $ 0.93 $ 0.76 $ 0.75
-------------------------------------------------------------------------
Fully Diluted
Per Share $ 1.04 $ 0.89 $ 0.74 $ 0.73
-------------------------------------------------------------------------
>>
Revenue Recognition
Sales are recognized as revenue for accounting purposes upon the customer
either picking up the merchandise or when merchandise is delivered to the
customers' home.
The Company offers customers the option to finance purchases through
various third party financing companies. In situations where a customer elects
to take advantage of delayed payment terms, the costs of financing these sales
are deducted from sales. Finance costs deducted from sales year to date for
2006 are up $1,550,000 when compared to the same period for 2005. These
additional costs were the result of increased sales and higher finance rates.
Warranty Revenue
Warranty revenues are deferred and taken into income on a straight-line
basis over the life of the warranty period. Warranty revenues included in
sales year to date for 2006 are $5,691,000 compared to $5,138,000 in 2005.
Warranty expenses deducted through costs of goods sold year to date for 2006
are $1,732,000 compared to $1,300,000 in 2005.
Franchise Royalties
Leon's franchisees operate as independent owners. The Company charges the
franchisee a royalty fee based primarily on a percentage of the franchisees
gross sales. This royalty income is recorded by the Company on an accrual
basis under the heading "other income" and is up 1% year to date for 2006
compared to 2005 which is in line with the increase in franchise sales for the
year.
Volume Rebates
The Company receives vendor rebates on certain products based on the
volume of purchases made during specified periods. The rebates are deducted
from the inventory value of goods received and are recognized as a reduction
of cost of goods sold as sales occur.
Accounting Estimates
Reserves for slow moving and damaged inventory are deducted in our
evaluation of inventories. The reserve for slow moving inventory is based on
many years of historic retail experience. The reserve is calculated by
analyzing all inventory on hand older than one year. Damaged inventory is
coded as such and placed in specific locations. The amount of damaged reserve
is determined by specific product categories.
Outlook
During the first two quarters of 2006 we saw a slight improvement in
consumer spending which enabled us to increase sales and profits over the
comparable period for the prior year. We expect the second half of 2006 to
show moderate growth over last year. The opening of a new store in the second
half of this year will also help grow sales going forward. Our Company's
strong financial position, combined with our constant effort to improve
productivity and our renewed efforts to improve market share, enable us to
look forward with cautious optimism.
Forward-Looking Statements
This news release, in particular the section under heading "Outlook",
includes forward-looking statements, which are not historic facts based on
certain assumptions and reflect Leon's Furniture Limited's current
expectations. These forward-looking statements are subject to a number of
risks and uncertainties that could cause actual results to differ materially
from current expectations. Some of the factors that can cause actual results
to differ materially from current expectations are: sudden slow down in the
Canadian economy; drop in consumer confidence and dependency of product from
third party suppliers. Given these risks and uncertainties, investors should
not place undue reliance on forward-looking statements as a prediction of
actual results.
<<
Leon's Furniture Limited
P.O. Box 1100, Stn. "B"
Weston, ON
M9L 2R8
Phone: (416) 243-4073 Fax: (416) 243-7890
NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an
auditor has not performed a review of the interim financial statements,
they must be accompanied by a notice indicating that the financial
statements have not been reviewed by an auditor.
The accompanying unaudited interim financial statements of the company
have been prepared by and are the responsibility of the company's
management.
No auditor has performed a review of these financial statements.
-------------------------------- --------------------------------
Terrence T. Leon Dominic Scarangella
President & Chief Executive Vice President & Chief Financial
Officer Officer
Dated as of the 11th day of August 2006.
Leon's Furniture Limited-Meubles Leon Ltee
Incorporated under the laws of Ontario
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As at As at
June 30 December 31
(in thousands) 2006 2005
$ $
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 15,357 20,592
Marketable securities 73,478 75,128
Accounts receivable 9,301 20,705
Inventory 71,099 72,644
Income taxes recoverable 2,333 621
-------------------------------------------------------------------------
Total current assets 171,568 189,690
Future tax assets 10,106 9,989
Capital assets, net 192,021 182,023
-------------------------------------------------------------------------
373,695 381,702
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 65,691 75,485
Customers' deposits 9,737 9,496
Dividends payable 4,426 3,844
Deferred warranty plan revenue 9,610 10,299
Future tax liabilities 3 455
-------------------------------------------------------------------------
Total current liabilities 89,467 99,579
Deferred warranty plan revenue 18,040 17,220
Redeemable share liability 631 406
Future tax liabilities 4,368 4,059
-------------------------------------------------------------------------
Total liabilities 112,506 121,264
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Shareholders' equity
Common shares 11,489 10,968
Retained earnings 249,700 249,470
-------------------------------------------------------------------------
Total shareholders' equity 261,189 260,438
-------------------------------------------------------------------------
373,695 381,702
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Leon's Furniture Limited-Meubles Leon Ltee
CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS
(UNAUDITED)
Period ended June 30th
(in thousands, except earnings per share)
3 months ended 6 months ended
2006 2005 2006 2005
$ $ $ $
Sales 134,028 121,933 254,046 235,515
Cost of sales 79,090 73,092 147,444 138,769
-------------------------------------------------------------------------
Gross profit 54,938 48,841 106,602 96,746
-------------------------------------------------------------------------
Operating expenses (income)
Salaries and commissions 21,952 19,278 42,600 37,927
Advertising 8,022 7,307 15,193 14,085
Rent and property taxes 2,604 2,317 5,295 4,725
Amortization 3,270 2,902 6,413 5,763
Employee profit-sharing plan 848 818 1,648 1,551
Other operating expenses 8,363 7,208 16,333 15,209
Interest income (867) (691) (1,872) (1,445)
Other income (1,936) (2,344) (4,096) (5,127)
-------------------------------------------------------------------------
42,256 36,795 81,514 72,688
-------------------------------------------------------------------------
Income before gain on sale of
capital property and
income taxes 12,682 12,046 25,088 24,058
Gain on sale of capital
property - - 2,010 -
-------------------------------------------------------------------------
Income before income taxes 12,682 12,046 27,098 24,058
Provision for income taxes 4,430 4,196 9,094 8,382
-------------------------------------------------------------------------
Net income for the period 8,252 7,850 18,004 15,676
Retained earnings,
beginning of the period 254,798 243,502 249,470 239,335
Dividends declared (13,276) (3,660) (17,700) (7,319)
Excess of cost of share
repurchase over carrying
value of related shares (74) (7,538) (74) (7,538)
-------------------------------------------------------------------------
Retained earnings, end of
period 249,700 240,154 249,700 240,154
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of
common shares outstanding
Basic 17,702 18,242 17,697 18,181
Diluted 18,436 18,844 18,431 18,783
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per share
Basic $ 0.47 $ 0.43 $ 1.02 $ 0.86
Diluted $ 0.45 $ 0.42 $ 0.98 $ 0.83
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Leon's Furniture Limited-Meubles Leon Ltee
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Period ended June 30th
(in thousands)
3 months ended 6 months ended
2006 2005 2006 2005
$ $ $ $
OPERATING ACTIVITIES
Net income for the period 8,252 7,850 18,004 15,676
Add (deduct) items not
involving a current cash
payment
Amortization of capital
assets 3,270 2,902 6,413 5,763
Amortization of deferred
warranty revenue (2,716) (2,600) (6,027) (5,298)
Loss (gain) on sale of
marketable securities (50) (352) 1 (507)
Future tax expense
(recovery) (206) 433 (417) 247
Loss (gain) on sale of
capital assets 6 (60) (2,004) (75)
Cash received on warranty
sales 3,251 2,620 6,158 5,300
-------------------------------------------------------------------------
11,807 10,793 22,128 21,106
Net change in non-cash
working capital balances
related to operations 6,173 11,351 80 (17,938)
-------------------------------------------------------------------------
Cash provided by operating
activities 17,980 22,144 22,208 3,168
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of capital assets (8,445) (5,313) (14,764) (7,578)
Proceeds on sale of capital
assets 25 332 2,115 355
Purchase of marketable
securities (432,002) (588,171) (920,856) (1,027,047)
Proceeds on sale of
marketable securities 436,086 588,824 922,505 1,039,350
Decrease in employee share
purchase loans 154 171 440 298
-------------------------------------------------------------------------
Cash (used in) provided by
investing activities (4,182) (4,157) (10,560) 5,378
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Dividends paid (13,274) (3,659) (16,809) (7,315)
Repurchase of capital stock (74) (7,635) (74) (7,635)
-------------------------------------------------------------------------
Cash used in financing
activities (13,348) (11,294) (16,883) (14,950)
-------------------------------------------------------------------------
Net increase (decrease) in
cash and cash equivalents
during the period 450 6,693 (5,235) (6,404)
Cash and cash equivalents,
beginning of period 14,907 1,898 20,592 14,995
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period 15,357 8,591 15,357 8,591
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
1. BASIS OF PREPARATION
The Company prepares its financial statements in accordance with
accounting principles generally accepted in Canada. The disclosures
contained in these unaudited interim consolidated financial statements do
not include all requirements of Generally Accepted Accounting Principles
for annual financial statements. The unaudited interim consolidated
financial statements should be read in conjunction with the annual
consolidated financial statements for the year ended December 31, 2005.
These interim consolidated financial statements were prepared following
the same policies and standards as in in the most recent annual
consolidated financial statements.
2. INCOME TAXES
The Company's total cash payments for income taxes paid in the three
month period ending June 30, 2006 were $6,890,000 (2005 - $4,591,000)
and for the six month period were $14,920,000 (2005 - $11,990,000).
3. COMPARATIVE FINANCIAL STATEMENTS
The comparative financial statements have been reclassified from
statements previously presented to conform to the presentation of the
2006 financial statements.
>>
