Reitmans (Canada) Limited Announces Year-End Results

MONTREAL, April 4, 2013 /CNW Telbec/ - The fiscal year ended February 2, 2013 
("fiscal 2013") includes 53 weeks instead of the normal 52 weeks. The 
inclusion of an extra week occurs every fifth or sixth fiscal year due to the 
Company's floating year-end. 
Sales for fiscal 2013 decreased 1.9% to $1,000,513,000 as compared with 
$1,019,397,000 for the year ended January 28, 2012 ("fiscal 2012"). This 
decrease in sales is due primarily to a net reduction of 31 stores in fiscal 
2013 and a same stores sales(1) decrease of 2.0% partially offset by an 
additional week of sales. The Company experienced lower store traffic in a 
challenging retail environment and was impacted by a disruption in the planned 
flow of inventory to stores as described below. The Company's gross margin 
for fiscal 2013 decreased to 62.8% from 64.4% for fiscal 2012. Net earnings 
for fiscal 2013 decreased 44.0% to $26,619,000 ($0.41 diluted earnings per 
share) as compared with $47,539,000 ($0.72 diluted earnings per share) for 
fiscal 2012. For fiscal 2013, adjusted EBITDA(1) decreased by $35,837,000 or 
28.3% to $90,951,000 as compared with $126,788,000 for fiscal 2012. 
Sales for the fourth quarter of fiscal 2013 increased 3.0% to $267,659,000 as 
compared with $259,954,000 for the fourth quarter of fiscal 2012. This 
increase in sales is due to an additional week of sales partially offset by a 
reduction in the number of stores and a same store sales(1) decrease of 
1.5%. The fourth quarter sales of fiscal 2013 were impacted by a difficult 
retail environment. The Company's gross margin for the fourth quarter of 
fiscal 2013 decreased to 59.2% from 60.4% for the fourth quarter of fiscal 
2012. The Company recorded a net loss for the fourth quarter of fiscal 2013 
of $1,080,000 ($0.01 diluted loss per share) as compared with a profit of 
$4,674,000 ($0.07 diluted earnings per share) for the fourth quarter of fiscal 
2012.This loss reflects operational losses of approximately $1,200,000, 
including start-up expenses, directly relating to the new Thyme Maternity 
boutiques initiative in the Babies"R"Us stores in the United States.Adjusted 
EBITDA(1) decreased by $8,881,000 or 40.3% to $13,140,000 as compared with 
$22,021,000 for the fourth quarter of fiscal 2012. 
In June 2012, the Company installed a new warehouse management system. As 
previously announced on August 15, 2012, complications associated with the 
system resulted in a disruption in the flow of inventory to stores in the 
third quarter of fiscal 2013. The disruption resulted in estimated loss of 
sales and a corresponding decline in gross margin, earnings before income 
taxes and adjusted EBITDA(1) between $7,000,000 and $15,000,000 in the third 
quarter of fiscal 2013. There was no significant impact in the fourth 
quarter of fiscal 2013. The Company has addressed the issues related to the 
warehouse management system and continues to improve the flow of goods to the 
stores and optimize system performance. 
Management is disappointed with the results for fiscal 2013 and has taken 
action in the merchandising and marketing efforts of each of its banners to 
improve sales and profitability. Additionally, the Company has undertaken an 
initiative to improve efficiencies and reduce overhead across head office and 
field activities. 
During the year, the Company opened 54 new stores and closed 85. 
Accordingly, at February 2, 2013, there were 911 stores in operation, 
consisting of 361 Reitmans, 146 Smart Set, 73 RW & CO., 72 Thyme Maternity, 
153 Penningtons, and 106 Addition Elle, as compared with a total of 942 stores 
as at January 28, 2012. In addition, there were 20 Thyme Maternity boutiques 
("shop-in-shop") in select Babies"R"Us locations in Canada and 154 boutiques 
in Babies"R"Us stores in the United States. 
At the Board of Directors meeting held on April 4, 2013, a quarterly cash 
dividend (constituting eligible dividends) of $0.20 per share on all 
outstanding Class A non-voting and Common shares of the Company was declared, 
payable April 25, 2013 to shareholders of record on April 12, 2013. With 
regard to dividend policy, the Board of Directors considered the Company's 
earnings per share, cash flow from operations, the level of planned capital 
expenditures and its cash and marketable securities. The Board of Directors 
decided to maintain its quarterly dividend on the basis of a targeted payout 
ratio of approximately 50% to 80% of sustainable earnings per share, 50% to 
75% of cash flow from operations and the ability to augment the dividend from 
the approximately $170,000,000 of liquidity on the Company's balance sheet, if 
these targets are missed in a given year. The Board of Directors will review 
these guidelines again at the end of its current fiscal year. 
(1)Non-GAAP Financial Measures 
In addition to discussing earnings in accordance with IFRS, this press release 
provides adjusted EBITDA as a supplementary earnings measure, which is defined 
as earnings (loss) before income taxes, dividend income, interest income, 
realized gains or losses on disposal of available-for-sale financial assets, 
impairment losses on available-for-sale financial assets, interest expense, 
depreciation, amortization and net impairment losses related to property and 
equipment. The Company also discloses same store sales, which are defined as 
sales generated by stores that have been open for at least one year. The 
Company believes these measures provide meaningful information on the 
Company's performance and operating results. However, readers should know that 
these non-GAAP financial measures have no standardized meaning as prescribed 
by IFRS and may not be comparable to similar measures presented by other 
companies. Accordingly, they should not be considered in isolation. 
The following table reconciles earnings (loss) before income taxes to adjusted 
EBITDA for the years and three months ended February 2, 2013 and January 28, 
2012: 


                      
                           For the years ended     For the three months ended
                     February 2,   January 28,     February 2,   January 28,
                     2013          2012            2013          2012

Earnings (loss)                                   
before income
taxes                $  35,136,000 $  65,872,000   $ (1,449,000) $  6,700,000

Dividend income        (3,526,000)   (3,462,000)       (911,000)    (864,000)

Interest income        (1,062,000)   (1,367,000)       (203,000)    (419,000)

Impairment losses                                                 
on
available-for-sale
financial assets           156,000        73,000          50,000            -

Interest expense           592,000       682,000         139,000      162,000

Depreciation,                                                     
amortization and
net impairment
losses                  59,655,000    64,990,000      15,514,000   16,442,000

ADJUSTED EBITDA      $  90,951,000 $ 126,788,000   $  13,140,000 $ 22,021,000

Forward-Looking Statements

All of the statements contained herein, other than statements of fact that are 
independently verifiable at the date hereof, are forward-looking statements. 
Such statements, based as they are on the current expectations of management, 
inherently involve numerous risks and uncertainties, known and unknown, many 
of which are beyond the Company's control. Such risks include but are not 
limited to: the impact of general economic conditions, general conditions in 
the retail industry, seasonality, weather and other risks included in public 
filings of the Company. Consequently, actual future results may differ 
materially from the anticipated results expressed in forward-looking 
statements. The reader should not place undue reliance on the forward-looking 
statements included herein. These statements speak only as of the date made 
and the Company is under no obligation and disavows any intention to update or 
revise such statements as a result of any event, circumstances or otherwise, 
except to the extent required under applicable securities law.

The Company's complete financial statements including notes and Management's 
Discussion and Analysis for the year ended February 2, 2013 are available 
online at www.sedar.com.

Montreal, April 4, 2013

Jeremy H. Reitman
Chairman and Chief Executive Officer

Telephone:(514) 385-2630
Corporate Website:www.reitmans.ca

REITMANS (CANADA) LIMITED
CONSOLIDATED STATEMENTS OF EARNINGS 
(Unaudited)
(in thousands of Canadian dollars except per share amounts) 
                   
                     For the years ended    For the three months ended
                  February 2, January 28,   February 2,    January 28,
                         2013        2012          2013           2012
                                                                      

Sales             $ 1,000,513 $ 1,019,397   $   267,659 $      259,954

Cost of goods                              
sold                  372,135     363,333       109,332        102,959

Gross profit          628,378     656,064       158,327        156,995

Selling and                                
distribution
expenses              550,165     547,367       147,396        138,420

Administrative                             
expenses               47,371      46,878        13,552         13,351

Results from                               
operating
activities             30,842      61,819       (2,621)          5,224
                                                                      

Finance income          5,624       5,562         1,361          2,392

Finance costs           1,330       1,509           189            916

Earnings (loss)                            
before income
taxes                  35,136      65,872       (1,449)          6,700
                                                                      

Income tax                                 
expense
(recovery)              8,517      18,333         (369)          2,026
                                                                      

Net earnings                               
(loss)            $    26,619 $    47,539   $   (1,080) $        4,674
                                                                      

Earnings (loss)                            
per share:                                                            

  Basic           $      0.41 $      0.72   $    (0.01) $         0.07

  Diluted                0.41        0.72        (0.01)           0.07

REITMANS (CANADA) LIMITED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
(Unaudited)
(in thousands of Canadian dollars) 
                      
                        For the years ended      For the three months
                                                         ended
                        February January 28,   February 2, January 28,
                         2, 2013        2012          2013        2012
                                                                      

Net earnings (loss)    $  26,619 $    47,539   $   (1,080) $     4,674

Other comprehensive   
income (loss)                                                         

Items that are or     
may be reclassified
subsequently to net
earnings:                                                             

  Reclassification
  of impairment loss
  on
  available-for-sale
  financial assets
  to net earnings
  (net of tax of $21
  for the year ended
  February 2, 2013;
  $12 for the three
  months ended
  February 2, 2013
  and $9 for the
  year ended January
  28, 2012)                  135          64            43           -

  Net change in fair
  value of
  available-for-sale
  financial assets
  (net of tax of $25
  for the year ended
  February 2, 2013
  and $96 for the
  three months ended
  February 2, 2013;
  $79 for the year
  ended January 28,
  2012 and $200 for
  the three months
  ended January 28,
  2012)                    (207)         530           497       1,338
                            (72)         594           540       1,338

Items that will not   
be reclassified to
net earnings:                                                         

  Actuarial losses
  on defined benefit
  plans (net of tax
  of $410 for the
  year and three
  months ended
  February 2, 2013;
  $1,041 for the
  year and three
  months ended
  January 28, 2012)      (1,061)     (2,965)       (1,061)     (2,965)

Total other           
comprehensive loss       (1,133)     (2,371)         (521)     (1,627)
                                                                      

Total comprehensive
income (loss)          $  25,486 $    45,168   $   (1,601) $     3,047

REITMANS (CANADA) LIMITED
CONSOLIDATED BALANCE SHEETS 
(Unaudited)
(in thousands of Canadian dollars)
                                                                       
                                    February 2, 2013   January 28, 2012

ASSETS                                                                 

CURRENT ASSETS                                                         

  Cash and cash equivalents         $         97,626   $        196,835

  Marketable securities                       71,630             71,442

  Trade and other receivables                  3,600              3,033

  Derivative financial asset                     548                751

  Income taxes recoverable                     8,709              4,735

  Inventories                                 93,317             93,188

  Prepaid expenses                            25,944             11,902
    Total Current Assets                     301,374            381,886
                                                                       

NON-CURRENT ASSETS                                                     

  Property and equipment                     205,131            184,221

  Intangible assets                           19,224             17,057

  Goodwill                                    42,426             42,426

  Deferred income taxes                       26,400             23,174
    Total Non-Current Assets                 293,181            266,878
                                                                       

TOTAL ASSETS                        $        594,555   $        648,764
                                                                       

LIABILITIES AND SHAREHOLDERS'                         
EQUITY                                                                 

CURRENT LIABILITIES                                                    

  Trade and other payables          $         68,781   $         78,778

  Derivative financial liability                 266              1,505

  Deferred revenue                            16,297             22,278

  Current portion of long-term                        
  debt                                         1,570              1,474
    Total Current Liabilities                 86,914            104,035
                                                                       

NON-CURRENT LIABILITIES                                                

  Other payables                              11,425             11,110

  Deferred lease credits                      16,805             17,317

  Long-term debt                               7,003              8,573

  Pension liability                           17,390             14,877
    Total Non-Current Liabilities             52,623             51,877
                                                                       

SHAREHOLDERS' EQUITY                                                   

  Share capital                               39,227             39,890

  Contributed surplus                          6,521              5,158

  Retained earnings                          400,605            439,067

  Accumulated other comprehensive                     
  income                                       8,665              8,737
    Total Shareholders' Equity               455,018            492,852
                                                                       

TOTAL LIABILITIES AND                                 
SHAREHOLDERS' EQUITY                $        594,555   $        648,764

REITMANS (CANADA) LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 
(Unaudited)
(in thousands of Canadian dollars) 
                                                      Accumulated
                                                         Other          Total
                      Share Contributed     Retained Comprehensive  Shareholders'
                    Capital   Surplus       Earnings    Income         Equity
                                                                                  

Balance as at    
January 29,
2012              $  39,890 $     5,158   $  439,067 $       8,737 $       492,852
                                                                                  

Total            
comprehensive
income for the
year                                                                              

  Net earnings                                26,619                        26,619

  Total other    
  comprehensive
  loss                                       (1,061)          (72)         (1,133)

Total            
comprehensive
income for the
year                      -           -       25,558          (72)          25,486
                                                                                  

Contributions    
by and
distributions
to owners of
the Company                                                                       

  Cancellation   
  of shares
  pursuant to
  share
  repurchase
  program             (663)                                                  (663)

  Share-based    
  compensation
  costs                           1,363                                      1,363

  Dividends                                 (52,068)                      (52,068)

  Premium on     
  repurchases
  of Class A
  non-voting
  shares                                    (11,952)                      (11,952)

Total            
contributions
by and
distributions
to owners of
the Company           (663)       1,363     (64,020)             -        (63,320)
                                                                                  

Balance as at    
February 2,
2013              $  39,227 $     6,521   $  400,605 $       8,665 $       455,018
                                                                                  
                                                                                  
                                                                                  

Balance as at    
January 30,
2011              $  29,614 $     6,266   $  468,777 $       8,143 $       512,800
                                                                                  

Total            
comprehensive
income for the
year                                                                              

  Net earnings                                47,539                        47,539

  Total other    
  comprehensive
  loss                                       (2,965)           594         (2,371)

Total            
comprehensive
income for the
year                      -           -       44,574           594          45,168
                                                                                  

Contributions    
by and
distributions
to owners of
the Company                                                                       

  Cash           
  consideration
  on exercise
  of share
  options             8,828                                                  8,828

  Ascribed       
  value
  credited to
  share capital
  from exercise
  of share
  options             2,228     (2,228)                                          -

  Cancellation   
  of shares
  pursuant to
  share
  repurchase
  program             (780)                                                  (780)

  Share-based    
  compensation
  costs                           1,120                                      1,120

  Dividends                                 (52,654)                      (52,654)

  Premium on     
  repurchases
  of Class A
  non-voting
  shares                                    (21,630)                      (21,630)

Total            
contributions
by and
distributions
to owners of
the Company          10,276     (1,108)     (74,284)             -        (65,116)
                                                                                  

Balance as at    
January 28,
2012              $  39,890 $     5,158   $  439,067 $       8,737 $       492,852

REITMANS (CANADA) LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 
(Unaudited)
(in thousands of Canadian dollars) 
                                                      Accumulated
                                                         Other            Total
                    Share   Contributed    Retained  Comprehensive    Shareholders'
                   Capital    Surplus      Earnings     Income           Equity
                                                                                    

Balance as at                            
October 28,
2012              $  39,227 $     5,979   $  415,663 $       8,125 $         468,994
                                                                                    

Total                                    
comprehensive
income for the
year                                                                                

  Net loss                                   (1,080)                         (1,080)

  Total other                            
  comprehensive
  loss                                       (1,061)           540             (521)

Total                                    
comprehensive
loss for the
year                      -           -      (2,141)           540           (1,601)
                                                                                    

Contributions                            
by and
distributions
to owners of
the Company                                                                         

  Share-based                            
  compensation
  costs                             542                                          542

  Dividends                                 (12,917)                        (12,917)

Total                                    
contributions
by and
distributions
to owners of
the Company               -         542     (12,917)             -          (12,375)
                                                                                    

Balance as at                            
February 2,
2013              $  39,227 $     6,521   $  400,605 $       8,665 $         455,018
                                                                                    
                                                                                    

Balance as at                            
October 30,
2011              $  31,512 $     6,462   $  450,431 $       7,399 $         495,804
                                                                                    

Total                                    
comprehensive
income for the
year                                                                                

  Net earnings                                 4,674                           4,674

  Total other                            
  comprehensive
  loss                                       (2,965)         1,338           (1,627)

Total                                    
comprehensive
income for the
year                      -           -        1,709         1,338             3,047
                                                                                    

Contributions                            
by and
distributions
to owners of
the Company                                                                         

  Cash                                   
  consideration
  on exercise
  of share
  options             6,695                                                    6,695

  Ascribed                               
  value
  credited to
  share capital
  from exercise
  of share
  options             1,683     (1,683)                                            -

  Share-based                            
  compensation
  costs                             379                                          379

  Dividends                                 (13,073)                        (13,073)

Total                                    
contributions
by and
distributions
to owners of
the Company           8,378     (1,304)     (13,073)             -           (5,999)
                                                                                    

Balance as at                            
January 28,
2012              $  39,890 $     5,158   $  439,067 $       8,737 $         492,852

REITMANS (CANADA) LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands of Canadian dollars) 
                          
                            For the years ended     For the three months
                                                            ended
                           February   January 28,     February    January
                            2, 2013          2012      2, 2013   28, 2012

CASH FLOWS FROM (USED                              
IN) OPERATING
ACTIVITIES                                                               

  Net earnings           $   26,619 $      47,539   $  (1,080) $    4,674

  Adjustments for:                                                       
    Depreciation,                                  
    amortization and
    impairment losses        59,655        64,990       15,514     16,442
    Share-based                                    
    compensation costs        1,363         1,120          542        379
    Amortization of                                
    deferred lease
    credits                 (4,485)       (4,635)      (1,104)    (1,167)
    Deferred lease                                 
    credits                   3,973         2,941          190       (29)
    Pension                                        
    contribution              (303)       (4,245)         (32)    (3,429)
    Pension expense           1,345         1,490          355        352
    Impairment loss on                             
    available-for-sale
    financial assets            156            73           50          -
    Net change in fair                             
    value of
    derivatives             (1,036)           754        (178)        754
    Foreign exchange                               
    (gain) loss on
    cash and cash
    equivalents                 (4)         2,942        (207)        149
    Interest and                                   
    dividend income,
    net                     (3,996)       (4,147)        (975)    (1,123)
    Interest paid             (592)         (682)        (139)      (160)
    Interest received         1,184         1,316          207        347
    Dividends received        3,871         3,460        1,261        868
    Income taxes                                   
    expense (recovery)        8,517        18,333        (369)      2,026
                             96,267       131,249       14,035     20,083

  Changes in:                                                            
    Trade and other                                
    receivables             (1,034)         (114)           51        551
    Inventories                                    
                              (129)           (5)       24,478     23,906
    Prepaid expenses       (14,042)           589     (14,155)      2,062
    Trade and other                                
    payables                (7,981)       (4,575)     (11,978)      2,373
    Deferred revenue        (5,981)            60        8,144     10,676

  Cash generated from                              
  operating activities       67,100       127,204       20,575     59,651

  Income taxes                                     
  received                    4,497           793            -        793

  Income taxes paid        (19,800)      (31,060)            -          -

  Net cash flows from                              
  operating activities       51,797        96,937       20,575     60,444
                                                                         

CASH FLOWS (USED IN)                               
FROM INVESTING
ACTIVITIES                                                               

  Purchases of                                     
  marketable
  securities                  (420)         (420)        (105)      (105)

  Additions to                                     
  property and
  equipment and
  intangible assets        (84,433)      (59,154)     (18,691)   (15,931)

  Cash flows used in                               
  investing activities     (84,853)      (59,574)     (18,796)   (16,036)
                                                                         

CASH FLOWS (USED IN)                               
FROM FINANCING
ACTIVITIES                                                               

  Dividends paid           (52,068)      (52,654)     (12,917)   (13,073)

  Purchase of Class A                              
  non-voting shares
  for cancellation         (12,615)      (22,410)            -          -

  Repayment of                                     
  long-term debt            (1,474)       (1,384)        (378)      (355)

  Proceeds from                                    
  exercise of share
  options                         -         8,828            -      6,695

  Cash flows used in                               
  financing activities     (66,157)      (67,620)     (13,295)    (6,733)
                                                                         

FOREIGN EXCHANGE GAIN                              
(LOSS) ON CASH HELD IN
FOREIGN CURRENCY                  4       (2,942)          207      (149)
                                                                         

NET (DECREASE)                                     
INCREASE IN CASH AND
CASH EQUIVALENTS           (99,209)      (33,199)     (11,309)     37,526
                                                                         

CASH AND CASH                                      
EQUIVALENTS, BEGINNING
OF THE PERIOD               196,835       230,034      108,935    159,309
                                                                         

CASH AND CASH                                      
EQUIVALENTS, END OF
THE PERIOD               $   97,626 $     196,835   $   97,626 $  196,835





Jeremy H. Reitman Chairman and Chief Executive Officer

Telephone:(514) 385-2630 Corporate Website:www.reitmans.ca

SOURCE: Reitmans (Canada) Limited

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/April2013/04/c2324.html

CO: Reitmans (Canada) Limited
ST: Quebec
NI: CLO RET TEX ERN ECO 

-0- Apr/05/2013 01:10 GMT


 
Press spacebar to pause and continue. Press esc to stop.