TORONTO, Feb. 23, 2012 /CNW/ - Leon's Furniture Limited is pleased to announce its results for the full year 2011 and the fourth quarter 2011. For the year ended December 31, 2011, total Leon's sales were $879,561,000 including $196,725,000 franchise sales ($907,497,000 including $197,062,000 franchise sales in 2010), a decrease of 3.1%. Same store corporate sales were down 6.4% from the prior year. Net income was $56,666,000, $0.81 per common share ($63,284,000, $0.90 per common share in 2010), a decrease of 10% per share.
For the three months ended December 31, 2011, total Leon's sales were $254,989,000 including $61,166,000 of franchise sales ($257,708,000 including $59,820,000 of franchise sales in 2010), a decrease of 1.1%. Same store corporate sales were down 7.4% from the prior year fourth quarter. Net income was $19,872,000, $0.28 per common share ($21,360,000 $0.30 per common share in 2010), a decrease of 6.7% per share.
2011 proved to be another very challenging year where we saw a further weakening in our economy, a shrinking market and a very competitive retail environment. We want to thank all our associates for their efforts and dedication in helping us to mitigate the impact of these challenges on our financial results.
In the third quarter of 2011, we opened a new corporate store in Guelph, Ontario. That was followed by grand openings in the fourth quarter of 2011 of three additional corporate stores in Mississauga, Ontario; Rosemère, Quebec; and Regina, Saskatchewan. As well, during the fourth quarter of 2011 new Leon's franchise locations had grand openings in Bathurst, New Brunswick; and Drummondville, Quebec.
In addition to these new locations, renovations are well underway in our Sudbury and Sault Ste. Marie, Ontario corporate stores. Our Trenton, Ontario franchise recently completed a renovation of their store and a renovation and expansion will commence shortly at our Simcoe, Ontario franchise. Our Kentville franchise has recently completed construction of a new and larger replacement store in Coldbrook, Nova Scotia. Construction has also started for a brand new franchise store to replace our existing St. John, New Brunswick store.
Finally, the Company has recently secured sites for four new corporate stores in: Orangeville and Brantford, Ontario; Sherbrooke, Quebec; and Rocky View County, which is just north of Calgary, Alberta. Our current plan is to open these locations during the later part of 2012 and 2013.
The Directors are pleased to declare a quarterly dividend of 10¢ per common share, payable on April 5, 2012 to the shareholders of record at the close of business on March 5, 2012. Dividends paid by Leon's Furniture Limited are "eligible dividends" pursuant to the changes to the Income Tax Act under Bill C-28, Canada.
EARNINGS PER SHARE FOR EACH QUARTER
| MARCH 31 | JUNE 30 | SEPT. 30 | DEC. 31 | YEAR TOTAL | |||
| 2011 | - - | Basic Fully Diluted | 15¢ 14¢ | 16¢ 15¢ | 22¢ 21¢ | 28¢ 27¢ | $0.81 $0.78 |
| 2010 | - - | Basic Fully Diluted | 17¢ 16¢ | 17¢ 16¢ | 26¢ 25¢ | 30¢ 29¢ | $0.90 $0.87 |
| 2009 | - - | Basic Fully Diluted | 12¢ 12¢ | 12¢ 12¢ | 22¢ 21¢ | 34¢ 33¢ | $0.80 $0.78 |
LEON'S FURNITURE LIMITED / MEUBLES LEON LTÉE
Mark J. Leon
Chairman of the Board
| Leon's Furniture Limited | ||
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||
| (UNAUDITED) | ||
| As at December 31 | As at December 31 | |
| ($ in thousands) | 2011 | 2010 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 72,505 | 71,589 |
| Available-for-sale financial assets | 149,318 | 140,224 |
| Trade receivables | 28,937 | 28,569 |
| Income taxes receivable | 5,182 | - |
| Inventory | 87,830 | 85,423 |
| Total current assets | 343,772 | 325,805 |
| Other assets | 1,431 | 1,574 |
| Property, plant and equipment | 214,158 | 201,492 |
| Investment property | 8,366 | 8,417 |
| Intangible assets | 3,958 | 4,902 |
| Goodwill | 11,282 | 11,282 |
| Deferred income tax assets | 12,372 | 13,202 |
| Total assets | 595,339 | 566,674 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities | ||
| Trade and other payables | 75,126 | 71,724 |
| Provisions | 11,231 | 12,341 |
| Income taxes payable | - | 524 |
| Customers' deposits | 19,157 | 17,198 |
| Dividends payable | 17,457 | 6,310 |
| Deferred warranty plan revenue | 16,152 | 16,882 |
| Total current liabilities | 139,123 | 124,979 |
| Deferred warranty plan revenue | 19,445 | 21,392 |
| Redeemable share liability | 382 | 172 |
| Deferred income tax liabilities | 10,928 | 9,845 |
| Total liabilities | 169,878 | 156,388 |
| Shareholders' equity attributable to the shareholders of the Company | ||
| Common shares | 20,918 | 19,177 |
| Retained earnings | 404,647 | 390,629 |
| Accumulated other comprehensive income | (104) | 480 |
| Total shareholders' equity | 425,461 | 410,286 |
| Total liabilities and shareholder's equity | 595,339 | 566,674 |
| Leon's Furniture Limited | ||||
| CONSOLIDATED INCOME STATEMENTS | ||||
| (UNAUDITED) | ||||
| Three months ended December 31 | Twelve months ended December 31 | |||
| ($ in thousands) | 2011 | 2010 | 2011 | 2010 |
| Revenue | 193,823 | 197,888 | 682,836 | 710,435 |
| Cost of sales | 108,010 | 112,130 | 394,099 | 412,379 |
| Gross profit | 85,813 | 85,758 | 288,737 | 298,056 |
| Operating expenses | ||||
| General and administrative expenses | 24,338 | 25,475 | 96,038 | 98,684 |
| Sales and marketing expenses | 22,993 | 22,344 | 78,387 | 78,221 |
| Occupancy expenses | 9,928 | 7,217 | 32,731 | 29,551 |
| Other operating expenses | 2,354 | 1,477 | 6,239 | 5,780 |
| 59,613 | 56,513 | 213,395 | 212,236 | |
| Operating profit | 26,200 | 29,245 | 75,342 | 85,820 |
| Gain on sale of capital property | - | - | - | 1,231 |
| Finance income | 1,088 | 991 | 3,506 | 3,134 |
| Profit before income tax | 27,288 | 30,236 | 78,848 | 90,185 |
| Income tax expense | 7,416 | 8,876 | 22,182 | 26,901 |
| Profit for the period attributable to the shareholders of the Company | 19,872 | 21,360 | 56,666 | 63,284 |
| Earnings per share | ||||
| Basic | $0.28 | $0.30 | $0.81 | $0.90 |
| Diluted | $0.28 | $0.29 | $0.78 | $0.87 |
| Dividends declared per share | ||||
| Common | $0.25 | $0.09 | $0.52 | $0.32 |
| Convertible, non-voting | $0.20 | $0.18 | $0.20 | $0.18 |
| Weighted average number of common shares outstanding | ||||
| Basic | 69,824,750 | 70,125,657 | 69,969,417 | 70,371,744 |
| Diluted | 72,152,050 | 72,780,849 | 72,305,424 | 73,133,906 |
| Leon's Furniture Limited | |||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
| (UNAUDITED) | |||
| Three months ended December 31 | |||
| Net of tax | |||
| ($ in thousands) | 2011 | Tax effect | 2011 |
| Profit for the period | 19,872 | - | 19,872 |
| Other comprehensive income, net of tax | |||
| Unrealized gains on available-for-sale financial assets arising during the period | 1,060 | 148 | 912 |
| Reclassification adjustment for net gains and (losses) included in profit for the period | (51) | (7) | (44) |
| Change in unrealized gains on available-for-sale financial | |||
| assets arising during the period | 1,009 | 141 | 868 |
| Comprehensive income for the period attributable to the shareholders of the Company | 20,881 | 141 | 20,740 |
| Net of tax | |||
| 2010 | Tax effect | 2010 | |
| Profit for the period | 21,360 | - | 21,360 |
| Other comprehensive income, net of tax | |||
| Unrealized gains on available-for-sale financial assets arising during the period | 160 | 23 | 137 |
| Reclassification adjustment for net gains and (losses) included in profit for the period | (168) | (25) | (143) |
| Change in unrealized gains on available-for-sale financial | |||
| assets arising during the period | (8) | (2) | (6) |
| Comprehensive income for the period attributable to the shareholders of the Company | 21,352 | (2) | 21,354 |
| Twelve months ended December 31 | |||
| Net of tax | |||
| ($ in thousands) | 2011 | Tax effect | 2011 |
| Profit for the period | 56,666 | - | 56,666 |
| Other comprehensive income, net of tax | |||
| Unrealized (losses) on available-for-sale financial assets arising during the period | (621) | (87) | (534) |
| Reclassification adjustment for net gains and (losses) included in profit for the period | (58) | (8) | (50) |
| Change in unrealized (losses) on available-for-sale financial | |||
| assets arising during the period | (679) | (95) | (584) |
| Comprehensive income for the period attributable to the shareholders of the Company | 55,987 | (95) | 56,082 |
| Net of tax | |||
| 2010 | Tax effect | 2010 | |
| Profit for the period | 63,284 | - | 63,284 |
| Other comprehensive income, net of tax | |||
| Unrealized gains on available-for-sale financial assets arising during the period | 917 | 144 | 773 |
| Reclassification adjustment for net gains and (losses) included in profit for the period | (178) | (27) | (151) |
| Change in unrealized gains on available-for-sale financial | |||
| assets arising during the period | 739 | 117 | 622 |
| Comprehensive income for the period attributable to the shareholders of the Company | 64,023 | 117 | 63,906 |
| Leon's Furniture Limited | ||||
| CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||||
| (UNAUDITED) | ||||
| ($ in thousands) | Common shares | Accumulated other comprehensive income | Retained earnings | Total |
| At January 1, 2010 | 17,704 | (142) | 357,576 | 375,138 |
| Comprehensive income | ||||
| Profit for the period | — | — | 63,284 | 63,284 |
| Change in unrealized gains on available-for-sale | — | 622 | — | 622 |
| financial assets arising during the period | ||||
| Total comprehensive income | — | 622 | 63,284 | 63,906 |
| Transactions with shareholders | ||||
| Dividends declared | — | — | (22,492) | (22,492) |
| Management share purchase plan | 1,768 | — | — | 1,768 |
| Repurchase of common shares | (295) | — | (7,739) | (8,034) |
| Total transactions with shareholders | 1,473 | — | (30,231) | (28,758) |
| At December 31, 2010 | 19,177 | 480 | 390,629 | 410,286 |
| At January 1, 2011 | 19,177 | 480 | 390,629 | 410,286 |
| Comprehensive income | ||||
| Profit for the period | — | — | 56,666 | 56,666 |
| Change in unrealized (losses) on available-for-sale | — | (584) | — | — |
| financial assets arising during the period | ||||
| Total comprehensive income | — | (584) | 56,666 | 56,082 |
| Transactions with shareholders | ||||
| Dividends declared | — | — | (36,371) | (36,371) |
| Management share purchase plan | 1,798 | — | — | 1,798 |
| Repurchase of common shares | (57) | — | (6,277) | (6,334) |
| Total transactions with shareholders | 1,741 | — | (42,648) | (40,907) |
| At December 31, 2011 | 20,918 | (104) | 404,647 | 425,461 |
| Leon's Furniture Limited | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (UNAUDITED) | ||
| Twelve months ended December 31 | ||
| ($ in thousands) | 2011 | 2010 |
| OPERATING ACTIVITIES | ||
| Profit for the period | 56,666 | 63,284 |
| Add (deduct) items not involving an outlay of cash | ||
| Depreciation of property, plant and equipment and investment properties | 12,705 | 15,354 |
| Amortization of intangible assets | 880 | 802 |
| Amortization of deferred warranty plan revenue | (17,271) | (16,838) |
| Gain on sale of property, plant and equipment | (21) | (1,236) |
| Deferred income taxes | 2,008 | 295 |
| Gain (loss) on sale of available-for-sale financial assets | 35 | (337) |
| Cash received on warranty plan sales | 14,594 | 16,714 |
| 69,596 | 78,038 | |
| Net change in non-cash working capital balances related | ||
| to operations | (4,426) | 1,391 |
| Cash provided by operating activities | 65,170 | 79,429 |
| INVESTING ACTIVITIES | ||
| Purchase of property, plant & equipment | (24,999) | (13,567) |
| Purchase of intangible assets | 64 | (370) |
| Proceeds on sale of property, plant & equipment | 39 | 2,117 |
| Purchase of available-for-sale financial assets | (569,050) | (524,414) |
| Proceeds on sale of available-for-sale financial assets | 559,242 | 497,691 |
| Decrease in employee share purchase loans | 2,008 | 1,556 |
| Cash used in investing activities | (32,696) | (36,987) |
| FINANCING ACTIVITIES | ||
| Dividends paid | (25,224) | (21,120) |
| Repurchase of common shares | (6,334) | (8,034) |
| Cash used in financing activities | (31,558) | (29,154) |
| Net decrease in cash and cash equivalents | ||
| during the period | 916 | 13,288 |
| Cash and cash equivalents, beginning of period | 71,589 | 58,301 |
| Cash and cash equivalents,end of period | 72,505 | 71,589 |
Dominic Scarangella, Tel: 416.243.4073