TORONTO, Feb. 19 /CNW/ - Leon's Furniture Limited is pleased to announce record fourth quarter and full year 2008 results. For the three months ended December 31, 2008, total Leon's sales were $269,891,000 including $63,803,000 of franchise sales ($246,853,000 including $60,931,000 of franchise sales in 2007), an increase of 9.3% and net income was $23,203,000, $0.33 per common share ($21,610,000, $0.31 per common share in 2007), an increase of 7.4% per share.
The increase in sales in the fourth quarter 2008 was attributable to the acquisition of Appliance Canada. We saw evidence that the Canadian economy was slowing down in the latter part of 2008 as same store corporate sales were down 1.7% in the fourth quarter of 2008 when compared to the same quarter 2007.
For the year ended December 31, 2008, total Leon's sales were $950,221,000 including $209,848,000 franchise sales ($833,381,000 including $195,925,000 franchise sales in 2007), an increase of 14.0%. Net income was $63,388,000, $0.90 per common share ($58,494.000, $0.83 per common share in 2007), an increase of 8.4% per share. Excluding Appliance Canada, same store corporate sales were up 2.3% over the prior year.
Even with an economic slowdown that commenced in the later part of the year, we are pleased to report that Leon's Furniture Limited continued to increase sales and grow profits in 2008. Once again, we thank all our Associates across Canada for their hard work, and dedication in helping achieve these goals. We are also pleased with the first year performance of our Appliance Canada division which was acquired in January 2008. Appliance Canada is involved in the wholesale of appliances to the building and apartment trade, as well as some retail of high-end appliances to the public.
Major renovations are well on their way at our Laval, Quebec warehouse and showroom and the grand re-opening is scheduled for late spring 2009. Our new store in downtown Toronto at the John Street Roundhouse is currently being renovated and is scheduled to open this summer.
The Directors are pleased to declare a quarterly dividend of 7 cents per common share, payable on April 6, 2009 to the shareholders of record at the close of business on March 6, 2009. As of 2007, dividends paid by Leon's Furniture Limited are "eligible dividends" pursuant to the changes to the Income Tax Act under Bill C-28, Canada.
The 2008 Annual Report will be mailed in early April to shareholders of record on March 24, 2009. The Annual Meeting of Shareholders will take place on May 13, 2009.
EARNINGS PER SHARE FOR EACH QUARTER
-----------------------------------
YEAR
MARCH 31 JUNE 30 SEPT. 30 DEC. 31 TOTAL
-------- -------- -------- -------- --------
2008 - Basic 16 cents 16 cents 25 cents 33 cents $0.90
- Fully Diluted 15 cents 16 cents 24 cents 32 cents $0.87
2007 - Basic 15 cents 14 cents 23 cents 31 cents $0.83
- Fully Diluted 15 cents 13 cents 22 cents 30 cents $0.80
2006 - Basic 14 cents 12 cents 21 cents 29 cents $0.76
- Fully Diluted 14 cents 11 cents 20 cents 28 cents $0.73
LEON'S FURNITURE LIMITED / MEUBLES LEON LTEE
Mark J. Leon
Chairman of the Board
Leon's Furniture Limited / Meubles Leon Ltee
Incorporated under the laws of Ontario
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As at As at
December 31 December 31
($ in thousands) 2008 2007
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ASSETS
Current
Cash and cash equivalents 39,483 25,699
Marketable securities 83,194 102,013
Restricted marketable securities 16,598 14,567
Accounts receivable 30,291 33,684
Income taxes recoverable 2,037 -
Inventory 92,904 75,640
Income taxes recoverable - -
Future tax assets 270 -
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Total current assets 264,777 251,603
Prepaid expenses 1,490 1,282
Goodwill 11,282 -
Intangibles 4,875 -
Other receivables 419 -
Future tax assets 10,752 10,722
Property, plant & equipment net 219,813 211,619
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513,408 475,226
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 95,247 92,051
Income taxes payable - 2,137
Customers' deposits 14,119 13,533
Dividends payable 4,952 4,949
Deferred warranty plan revenue 15,267 13,812
Future tax liabilities - 355
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Total current liabilities 129,585 126,837
Deferred warranty plan revenue 21,712 19,124
Redeemable share liability 285 180
Future tax liabilities 8,468 7,080
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Total liabilities 160,050 153,221
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Shareholders' equity
Common shares 16,493 14,020
Retained earnings 338,960 307,068
Accumulated other comprehensive income (2,095) 917
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Total shareholders' equity 353,358 322,005
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513,408 475,226
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Leon's Furniture Limited / Meubles Leon Ltee
CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS
(UNAUDITED)
Period ended December 31st
($ in thousands) 3 months ended 12 months ended
2008 2007 2008 2007
Sales 206,088 185,922 740,376 637,456
Cost of sales 116,866 100,159 440,360 363,261
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Gross profit 89,222 85,763 300,016 274,195
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Operating expenses (income)
Salaries and commissions 28,882 27,025 112,270 99,461
Advertising 10,452 9,833 33,752 32,008
Rent and property taxes 2,864 2,555 11,268 10,486
Amortization 4,474 3,733 16,253 14,034
Employee profit-sharing plan 1,350 1,345 4,321 4,200
Other operating expenses 12,177 11,340 46,447 39,251
Interest income (1,302) (1,253) (4,836) (4,695)
Other income (3,191) (3,467) (13,595) (11,573)
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55,706 51,111 205,880 183,172
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Income before income taxes 33,516 34,652 94,136 91,023
Provision for income taxes 10,311 13,042 30,746 32,529
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Net income for the period 23,205 21,610 63,390 58,494
Retained earnings, beginning of
the period 320,711 290,837 307,068 276,037
Dividends declared (4,956) (4,949) (26,873) (19,828)
Excess of cost of share
repurchase over carrying
value of related shares - (430) (4,625) (7,635)
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Retained earnings, end of period 338,960 307,068 338,960 307,068
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Weighted average number of common
shares outstanding ('000's)
Basic 70,730 70,634 70,729 70,777
Diluted 72,629 72,986 72,818 73,403
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Earnings per share
Basic $0.33 $0.31 $0.90 $0.83
Diluted $0.32 $0.30 $0.87 $0.80
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Dividends declared per share
Common $0.07 $0.07 $0.38 $0.2725
Convertible, non-voting $0.14 $0.14 $0.14 $0.14
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
Three month period ended December 31st
($ in thousands)
Net
Tax of tax
2008 effect 2008
Net income for the period 33,516 - 33,516
Other comprehensive income, net of tax
Unrealized losses on available-for-sale
financial assets arising during the
period (6) (1) (5)
Reclassification adjustment for net gains
and (losses) included in net income - - -
------------------------------
Change in unrealized losses on
available-for-sale financial
assets arising during the
period (6) (1) (5)
------------------------------
Comprehensive income for the period 33,510 (1) 33,511
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------------------------------
Net
Tax of tax
2007 effect 2007
Net income for the period 34,652 - 34,652
Other comprehensive income, net of tax
Unrealized gains on available-for-sale
financial assets arising during the
period 71 12 59
Reclassification adjustment for net gains
and (losses) included in net income 54 11 43
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Change in unrealized gains on
available-for-sale financial
assets arising during the
period 125 23 102
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Comprehensive income for the period 34,777 23 34,754
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------------------------------
Twelve month period ended December 31st
($ in thousands)
Net
Tax of tax
2008 effect 2008
Net income for the period 94,136 94,136
Other comprehensive income, net of tax
Unrealized losses on available-for-sale
financial assets arising during the
period (9) (1) (8)
Reclassification adjustment for net gains
and (losses) included in net income - - -
------------------------------
Change in unrealized losses on
available-for-sale financial
assets arising during the
period (9) (1) (8)
------------------------------
Comprehensive income for the period 94,127 (1) 94,128
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Net
Tax of tax
2007 effect 2007
Net income for the period 91,023 - 91,023
Other comprehensive income, net of tax
Unrealized losses on available-for-sale
financial assets arising during the
period (357) (67) (290)
Reclassification adjustment for net gains
and (losses) included in net income (1,428) (243) (1,185)
------------------------------
Change in unrealized losses on
available-for-sale financial
assets arising during the
period (1,785) (310) (1,475)
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Comprehensive income for the period 89,238 (310) 89,548
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Leon's Furniture Limited / Meubles Leon Ltee
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three month period ended December 31st
($ in thousands) 3 months ended 12 months ended
2008 2007 2008 2007
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OPERATING ACTIVITIES
Net income for the period 23,201 21,610 63,390 58,494
Add (deduct) items not involving
a current cash payment
Amortization of property, plant
& equipment 4,162 3,733 15,628 14,034
Amortization of intangible
assets 312 - 625 -
Amortization of deferred
warranty revenue (3,714) (3,653) (14,541) (13,610)
Loss (gain) on sale of
marketable securities 65 (136) (411) (698)
Future tax expense 1,190 2,765 1,350 1,577
Loss (gain) on sale of
property, plant &
equipment - (16) (1,665) 5
Cash received on warranty sales 5,155 4,891 17,834 15,843
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30,371 29,194 82,210 75,645
Net change in non-cash working
capital balances related to
operations (14,012) (2,220) (12,482) (7,112)
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Cash provided by operating
activities 16,359 26,974 69,728 68,533
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INVESTING ACTIVITIES
Purchase of property, plant &
equipment (7,161) (4,221) (22,668) (23,404)
Proceeds on sale of property,
plant & equipment - 31 2,775 218
Purchase of marketable securities (124,737) (135,697) (287,913) (253,617)
Proceeds on sale of marketable
securities 138,776 122,350 301,482 230,888
Decrease in employee share
purchase loans 670 595 2,626 2,286
Purchase of Appliance Canada (1,982) - (20,704) -
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Cash used in investing activities 5,566 (16,942) (24,402) (43,629)
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FINANCING ACTIVITIES
Dividends paid (4,943) (5,602) (26,870) (19,671)
Repurchase of capital stock - (434) (4,672) (7,706)
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Cash used in financing activities (4,943) (6,036) (31,542) (27,377)
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Net increase (decrease) in cash
and cash equivalents during
the period 16,982 3,996 13,784 (2,473)
Cash and cash equivalents,
beginning of period 22,501 21,703 25,699 28,172
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Cash and cash equivalents, end of
period 39,483 25,699 39,483 25,699
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