TORONTO, Nov. 14 /CNW/ - For the three months ended September 30, 2006,
total Leon's sales were $203,632,000 including $46,500,000 of franchise sales
($187,055,000 including of $45,070,000 franchise sales in 2005), an increase
of 8.9%. Net income was $14,886,000, 84 cents per common share ($13,630,000,
76 cents per common share in 2005), an increase of 10.5% per common share.
For the nine months ended September 30, 2006, total Leon's sales were
$531,687,000 including $120,509,000 of franchise sales ($496,008,000 including
$118,508,000 of franchise sales in 2005), an increase of 7.2% and net income
was $32,890,000, $1.86 per common share ($29,306,000, $1.62 per common share
in 2005), an increase of 14.8% per common share. The first quarter of 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 third 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 showrooms
and warehouses in Dartmouth, Nova Scotia and Winnipeg, Manitoba in the third
quarter 2006. We also plan to open new showrooms and warehouses in Saskatoon,
Saskatchewan in November 2006, Newmarket, Ontario and Longueil, Quebec in
2007. Major renovations of existing stores in Calgary, Alberta; and Kitchener,
Ontario are ongoing and should be completed by late spring 2007.
Later this November 2006, we plan to open a new franchise in Nanaimo,
British Columbia. When this happens, we will have stores in every province and
be coast-to-coast in Canada.
The Directors have declared a quarterly dividend of 25 cents per common
share payable on the 12th day of January 2007 to shareholders of record at the
close of business on the 12th day of December 2006. In addition, the annual
dividend on the convertible non-voting series shares of 50 cents, will be
payable on January 12th, 2007 to the shareholders of record at the close of
business on December 12th, 2006.
The Directors have also authorized the Company, subject to shareholder
approval at its annual meeting in May 2007, to seek regulatory approval of the
subdivision of its common shares and the convertible non-voting shares on a
four for one basis. The stock will start trading on a split basis after these
approvals have been obtained.
<<
EARNINGS PER SHARE FOR EACH QUARTER
-----------------------------------
YEAR
MARCH 31 JUNE 30 SEPT. 30 DEC. 31 TOTAL
-------- -------- -------- -------- --------
2006 - Basic 55 cents 47 cents 84 cents $1.86
- Fully Diluted 53 cents 45 cents 81 cents $1.79
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
November 14, 2006
Management's Discussion and Analysis should be read in conjunction with
the unaudited consolidated interim financial statements of the Company for the
nine months ended September 30, 2006, Management's Discussion and Analysis 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 February 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 may
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 across Canada. Main product lines sold at retail include furniture,
appliances and electronics.
Revenues and Expenses
For the three months ended September 30, 2006, total Leon's sales were
$203,632,000 including $46,500,000 of franchise sales ($187,055,000 including
$45,070,000 of franchise sales in 2005), an increase of 8.9%.
Leon's corporate sales of $157,132,000 in the third quarter of 2006,
increased by $15,147,000 or 10.7%, compared to the third quarter of 2005. Part
of our increase in sales was related to our new store locations in Hamilton,
Ontario opened in October of 2005 and Vaughan, Ontario, opened in January,
2006. During the second quarter of 2006 we also converted a franchise store in
Sarnia, Ontario to a corporate store. These factors combined with our
continued emphasis on effective marketing and merchandising strategies,
enabled our company to achieve increased sales. All regions had increased
sales in the quarter, with Western Canada showing the most improvement. Same
store corporate sales were up 6.4% in the 3rd quarter compared to the same
quarter in 2005.
Leon's franchise sales of $46,500,000 in the third quarter of 2006,
increased by $1,430,000, or 3.2% store for store, compared to the third
quarter of 2005. We saw good growth in all regions of Canada.
Our gross margin of 41.67% for the third quarter 2006 increased
marginally from the third quarter 2005.
Net operating expenses of $42,618,000 were up $4,589,000 or 12.1% for the
third quarter 2006 compared to the third quarter 2005. Payroll and commission
costs were up 10.5% in the third quarter compared to the prior year. These
costs were in line with the increase in sales of 10.7% for the quarter as well
as higher payroll costs related to new store operations in 2006. We saw
advertising expenses increase by $681,000 or 10.3% for the third 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 newly renovated showrooms and warehouses in Dartmouth, Nova
Scotia and Winnipeg, Manitoba; an aggressive marketing campaign to help drive
higher sales; and additional advertising costs related to three new stores
which were opened in late 2005 and early 2006. Other operating expenses were
up $851,000 or 10.1% over the prior year. The main reason for this increase
was the opening of the three new stores in late 2005 and 2006 together with
generally higher sales volumes. Finally, in the third quarter 2006, we had a
nominal investment gain of $7,000 as compared to an investment gain of
$669,000 in 2005. Excluding these items, operating expenses as a percentage of
sales in the third quarter 2006 were lower at 26.7% versus 26.8% for 2005.
As a result of the above, net income for the third quarter 2006 was
$14,886,000, 84 cents per common share (as compared to $13,630,000, 76 cents
per common share in 2005), an increase of 10.5% per common share.
<<
Annual Financial Information
($ in thousands, except earnings per
share and dividends) 2005 2004 2003
Leon's Corporate Sales (Net) 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: Sept 30/06 Dec 31/05 Sept 30/05
Cash and marketable securities $ 103,225 $ 95,720 $ 71,318
Accounts receivable 13,579 20,705 11,093
Inventory 76,852 72,644 78,597
Total assets 404,670 381,702 351,950
Working capital 84,166 90,111 76,596
Current Prior Prior
Quarter Quarter Quarter
For the 3 Months Ended Sept 30/06 June 30/06 March 31/06
---------- ---------- -----------
Cash flow from operations $ 30,683 $ 17,980 $ 4,228
Purchase of capital assets 11,933 8,445 6,319
Repurchase of capital stock - 74
Dividends paid 4,426 13,274 3,535
Dividends paid per share $ 0.25 $ 0.75 $ 0.20
>>
Cash investments and marketable securities increased by $14,390,000 in
the quarter. In the third quarter of 2006, $11,933,000 of the Company's
financial resources were used for the acquisition of land and buildings.
Marketable securities consist primarily of bonds with maturities not
exceeding ten years with an interest rate range of 3.15% to 6.75% and are
stated at the lower of cost and market value. As of September 30, 2006 the
market value exceeds the cost of the marketable securities.
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 for the
purposes of insuring customer product warranty sales. The assets are in the
form of a trust with a financial institution amounting to $11,688,000.
Inventory increased by $5,753,000 from the second quarter. The increase
in inventory is mainly attributable to having the necessary product available
for the Christmas season.
The cash provided by operating activities of $30,683,000 is the result of
the improvement in after tax profits in the quarter and the net changes in
non-cash working capital balances.
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 has been completed on a new
warehouse and showroom in Saskatoon, Saskatchewan (80,000 sq. ft.) which will
open this November 2006. Construction is well on its way on a new warehouse
and showroom in Newmarket, Ontario (98,000 sq. ft.) which we plan to open in
early 2007. We have also recently begun construction on our new 71,000 sq. ft.
store in Longueil, Quebec.
Renovations were completed in the third quarter of 2006 at our Dartmouth,
Nova Scotia store and Winnipeg, Manitoba store. We celebrated a grand
re-opening for these stores in the third quarter 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.
Later this month our new franchise in Nanaimo, British Columbia will open
its doors. When it does, it will become our first store in British Columbia
and we will be coast-to-coast in Canada with locations from Newfoundland to
Vancouver Island.
Common Shares
At September 30, 2006 there were 17,707,237 common shares issued and
outstanding. During the third quarter of 2006, no common shares were
repurchased by the Company and 2,550 convertible, non-voting series 1998
shares were converted to common shares.
For the nine-month period ending September 30, 2006, the Company
repurchased 1,800 common shares and 32,019 convertible, non-voting series 1998
and 2002 shares were converted to common shares. In addition, 9,676
convertible, non voting series 2002 and 2005 shares were cancelled.
<<
Commitments
-------------------------------------------------------------------------
Payments Due by Period in $000's
---------------------------------------------------
Contractual Less than 2-3 4-5 After
Obligations Total 1 year years years 5 years
-------------------------------------------------------------------------
Operating Leases(1) 9,834 302 1,786 1,661 6,085
-------------------------------------------------------------------------
Purchase
Obligations(2) 18,856 18,856
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Contractual
Obligations 28,690 19,158 1,786 1,661 6,085
-------------------------------------------------------------------------
(1) The Company is obligated under operating leases to future minimum
annual rental payments for various land and building sites across
Canada.
(2) The estimated cost to complete construction in progress at six
locations in Canada.
In addition, the Company has commitments related to redeemable shares as
follows:
($ in thousands) As at Sep 30, 2006 As at Dec 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) $ 2,690 $ 3,249
387,320 series 2002 shares
(2005 - 407,623) 10,948 11,135
199,500 series 2005 shares
(2005 - nil) 7,404 7,535
Less employees share purchase loans (20,411) (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 allowing 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 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 third quarter 2006, 2,550 convertible, non-voting, series 1998
shares were converted into common shares with a stated value of $45,000 (2005
- 11,407 for a stated value of $201,000). For the nine month period,
31,713 convertible, non-voting, series 1998 shares were converted into common
shares with a stated value of $558,000 (2005 - 21,916 for a stated value of
$386,000).
During the period 1,911 convertible, non-voting series 2002 shares were
cancelled with a stated value of $55,000 (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
September 30 June 30
-------------------------------------------------------------------------
2006 2005 2006 2005
-------------------------------------------------------------------------
Leon's Corporate Sales $157,132 $141,985 $134,028 $121,933
-------------------------------------------------------------------------
Leon's Franchise Sales $46,500 $45,070 $39,054 $38,953
-------------------------------------------------------------------------
Total Leon sales $203,632 $187,055 $173,082 $160,886
-------------------------------------------------------------------------
Net Income Per Share $0.84 $0.76 $0.47 $0.43
-------------------------------------------------------------------------
Fully Diluted Per Share $0.81 $0.74 $0.45 $0.42
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Quarter Ended Quarter Ended
March 31 December 31
-------------------------------------------------------------------------
2006 2005 2005 2004
-------------------------------------------------------------------------
Leon's Corporate Sales $120,018 $113,582 $170,244 $153,080
-------------------------------------------------------------------------
Leon's Franchise Sales $34,955 $34,485 $54,535 $51,867
-------------------------------------------------------------------------
Total Leon sales $154,973 $148,067 $224,779 $204,947
-------------------------------------------------------------------------
Net Income Per Share $0.55 $0.43 $1.11 $0.93
-------------------------------------------------------------------------
Fully Diluted Per Share $0.53 $0.41 $1.04 $0.89
-------------------------------------------------------------------------
>>
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 cost of financing these sales
are deducted from sales. Finance costs deducted from sales for the third
quarter 2006 are up $1,158,000 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 2006 are $9,052,000 compared to $8,066,000 in 2005.
Warranty expenses deducted through costs of goods sold year to date 2006 are
$2,549,000 compared to $1,894,000 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 3.1% for the third quarter
2006 compared to 2005 which is in line with the increase in franchise sales
for the quarter.
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 reserve for
damaged inventory is determined by specific product categories.
Outlook
During the first three quarters of 2006 we saw an improvement in consumer
spending which enabled us to increase sales and profits over the comparable
period for the prior year. We expect the final quarter of 2006 to show a
moderation in growth as compared to last year. The opening of a new Saskatoon
store in the forth quarter 2006 should help grow sales going forward. However,
we believe profit growth may be more difficult due to pressure on margins and
the costs of servicing our increase in sales. Despite these concerns, our
Company's strong financial position, combined with our constant effort to
improve productivity allow us to continue to look forward to the future with
cautious optimism.
Forward-Looking Statements
This MD&A, 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.
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 Officer Vice President & Chief Financial
Officer
>>
Dated as of the 14th day of November 2006.
<<
Leon's Furniture Limited-Meubles Leon Ltee
Incorporated under the laws of Ontario
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As at As at
September 30 December 31
(in thousands) 2006 2005
$ $
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 9,353 20,592
Marketable securities 93,872 75,128
Accounts receivable 13,579 20,705
Inventory 76,852 72,644
Income taxes recoverable 350 621
-------------------------------------------------------------------------
Total current assets 194,006 189,690
Future tax assets 10,456 9,989
Capital assets, net 200,208 182,023
-------------------------------------------------------------------------
404,670 381,702
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 82,631 75,485
Customers' deposits 11,544 9,496
Dividends payable 4,427 3,844
Deferred warranty plan revenue 11,235 10,299
Future tax liabilities 3 455
-------------------------------------------------------------------------
Total current liabilities 109,840 99,579
Deferred warranty plan revenue 18,138 17,220
Redeemable share liability 631 406
Future tax liabilities 4,368 4,059
-------------------------------------------------------------------------
Total liabilities 132,977 121,264
-------------------------------------------------------------------------
Shareholders' equity
Common shares 11,534 10,968
Retained earnings 260,159 249,470
-------------------------------------------------------------------------
Total shareholders' equity 271,693 260,438
-------------------------------------------------------------------------
404,670 381,702
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Leon's Furniture Limited-Meubles Leon Ltee
CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS
(UNAUDITED)
Period ended September 30th
(in thousands, except earnings per share)
3 months ended 9 months ended
2006 2005 2006 2005
$ $ $ $
Sales 157,132 141,985 411,178 377,500
Cost of sales 91,658 83,139 239,799 222,931
-------------------------------------------------------------------------
Gross profit 65,474 58,846 171,379 154,569
-------------------------------------------------------------------------
Operating expenses (income)
Salaries and commissions 22,995 20,804 64,898 57,708
Advertising 7,288 6,607 22,481 20,692
Rent and property taxes 2,552 2,566 7,847 7,291
Amortization 3,465 3,015 9,878 8,778
Employee profit-
sharing plan 822 725 2,470 2,276
Other operating expenses 9,199 8,348 25,532 23,557
Interest income (970) (587) (2,842) (2,032)
Other income (2,733) (3,449) (6,829) (8,576)
-------------------------------------------------------------------------
42,618 38,029 123,435 109,694
-------------------------------------------------------------------------
Income before gain on sale
of capital property and
income taxes 22,856 20,817 47,944 44,875
Gain on sale of capital
property - - 2,010 -
-------------------------------------------------------------------------
Income before income taxes 22,856 20,817 49,954 44,875
Provision for income taxes 7,970 7,187 17,064 15,569
-------------------------------------------------------------------------
Net income for the period 14,886 13,630 32,890 29,306
Retained earnings,
beginning of the period 249,700 240,154 249,470 239,335
Dividends declared (4,427) (3,563) (22,127) (10,882)
Excess of cost of share
repurchase over carrying
value of related shares - (16,566) (74) (24,104)
-------------------------------------------------------------------------
Retained earnings,
end of period 260,159 233,655 260,159 233,655
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of
common shares outstanding
Basic 17,706 18,009 17,698 18,050
Diluted 18,436 18,594 18,428 18,635
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per share
Basic $ 0.84 $ 0.76 $ 1.86 $ 1.62
Diluted $ 0.81 $ 0.74 $ 1.78 $ 1.57
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Leon's Furniture Limited-Meubles Leon Ltee
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Period ended September 30th
(in thousands)
3 months ended 9 months ended
2006 2005 2006 2005
$ $ $ $
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income for the period 14,886 13,630 32,890 29,306
Add (deduct) items not
involving a current
cash payment
Amortization of capital
assets 3,465 3,015 9,878 8,778
Amortization of deferred
warranty revenue (2,368) (2,476) (8,395) (7,774)
Gain on sale of
marketable securities (7) (669) (6) (1,176)
Future tax expense
(recovery) (193) 74 (610) 321
Gain on sale of
capital assets (12) (22) (2,016) (97)
Cash received on
warranty sales 4,091 3,381 10,249 8,681
-------------------------------------------------------------------------
19,862 16,933 41,990 38,039
Net change in non-cash
working capital balances
related to operations 10,821 4,228 10,901 (13,710)
-------------------------------------------------------------------------
Cash provided by operating
activities 30,683 21,161 52,891 24,329
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of capital assets (11,933) (11,305) (26,697) (18,883)
Proceeds on sale of
capital assets 14 62 2,129 417
Purchase of marketable
securities (738,970) (584,161) (1,659,826) (1,611,208)
Proceeds on sale of
marketable securities 718,583 590,486 1,641,088 1,629,836
Decrease in employee
share purchase loans 45 368 485 666
-------------------------------------------------------------------------
Cash (used in) provided
by investing activities (32,261) (4,550) (42,821) 828
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Dividends paid (4,426) (3,660) (21,235) (10,975)
Repurchase of capital stock - (16,772) (74) (24,407)
-------------------------------------------------------------------------
Cash used in financing
activities (4,426) (20,432) (21,309) (35,382)
-------------------------------------------------------------------------
Net decrease in cash and
cash equivalents during
the period (6,004) (3,821) (11,239) (10,225)
Cash and cash equivalents,
beginning of period 15,357 8,591 20,592 14,995
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period 9,353 4,770 9,353 4,770
-------------------------------------------------------------------------
-------------------------------------------------------------------------
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 September 30, 2006 were $2,936,000 (2005-$5,615,000)
and for the nine month period were $17,856,000 (2005-$17,605,000).
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.
>>
