Reitmans (Canada) Limited announces its results for the three months ended May 4, 2013

Reitmans (Canada) Limited announces its results for the three months ended May 
4, 2013 
MONTREAL, June 4, 2013 /CNW Telbec/ - Sales for the first quarter ended May 4, 
2013 were $216,861,000 as compared with $217,094,000 for the first quarter 
ended April 28, 2012, a decrease of 0.1%. Same store sales(1) decreased 
3.5%, compared to the comparable 13 weeks ended May 5, 2012, impacted by our 
customers' preference to focus their expenditures on non-discretionary 
purchases, as well as unseasonable weather conditions that were prevalent 
during the period. Sales through the various banners' e-commerce channels 
showed significant gains, with a 96% increase in sales for the first quarter 
ended May 4, 2013 as compared to the first quarter ended April 28, 2012. The 
Company's gross margin remained unchanged at 64.6% for the first quarter ended 
May 4, 2013 as compared to the first quarter ended April 28, 2012. The 
Company recorded a net loss of $2,586,000 ($0.04 diluted loss per share) for 
the first quarter ended May 4, 2013 as compared with a net loss of $119,000 
($0.00 diluted loss per share) for the first quarter ended April 28, 2012. 
In the first quarter ended May 4, 2013, adjusted EBITDA(1) was $10,683,000 as 
compared with $12,451,000 for the first quarter ended April 28, 2012, a 
decrease of 14.2%. 
Early in 2013, management began a corporate initiative to analyze and review 
its processes, expenditures and complement of employees throughout the 
Company. The purpose of this initiative is to develop and implement a plan 
targeted at improving efficiencies and costs at the Company. We have made 
progress during the first quarter ended May 4, 2013 on this initiative and 
identified areas within our business that will enable us to realize 
considerable savings without adversely affecting our business. This 
initiative included a reduction in the number of our employees and resulted in 
severance costs of approximately $1,000,000 in the first quarter ended May 4, 
2013. These terminations are projected to result in annualized savings of 
approximately $3,000,000. 
During the first quarter, the Company opened 13 new stores, comprised of 2 
Reitmans, 1 Smart Set, 9 Penningtons and 1 Addition Elle. Fifteen stores 
were closed, comprised of 4 Reitmans, 2 Smart Set, 5 Penningtons and 4 
Addition Elle. At May 4, 2013, there were 909 stores in operation, 
consisting of 359 Reitmans, 145 Smart Set, 73 RW & CO., 72 Thyme Maternity, 
157 Penningtons and 103 Addition Elle, as compared with a total of 925 stores 
as at April 28, 2012. In addition, there were 20 Thyme Maternity boutiques 
in select Babies"R"Us locations in Canada and 154 boutiques in Babies"R"Us 
stores in the United States. 
Sales for the month of May (the four weeks ended June 1, 2013) decreased 4.7% 
with same store sales(1) decreasing 5.5%. 
At the Board of Directors meeting held on June 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 July 25, 2013 to shareholders of record on July 11, 2013. 
(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 adjusted EBITDA to loss before income taxes for 
the three months ended May 4, 2013 and April 28, 2012: 
                                  
(unaudited)                              For the three months ended 


                                     May 4, 2013    April 28, 2012(2)

Loss before income taxes            $ (3,495,000)   $       (299,000)

Dividend income                         (868,000)           (874,000)

Interest income                         (134,000)           (330,000)

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

Interest expense                          134,000             157,000

Depreciation, amortization and net
impairment losses                      14,996,000          13,797,000

ADJUSTED EBITDA                     $  10,683,000   $      12,451,000

(2) Adjusted to reflect the impact from the implementation of the
    amendments to IAS 19, Employee Benefits, which can be found  in
    Note 3 of the May 4, 2013 unaudited condensed consolidated interim
    financial statements.
    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 unaudited condensed consolidated interim financial statements 
including notes and Management's Discussion and Analysis for the first quarter 
ended May 4, 2013 are available online at www.sedar.com.

Montreal, June 4, 2013

Jeremy H. Reitman
Chairman and Chief Executive Officer

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

REITMANS (CANADA) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands of Canadian dollars except per share amounts)
                                                                 
                                     For the three months ended
                                  May 4, 2013   April 28, 2012(2)
                                                                 

Sales                             $   216,861   $         217,094

Cost of goods sold                     76,687              76,778

Gross profit                          140,174             140,316

Selling and distribution expenses     132,376             129,468

Administrative expenses                11,871              11,047

Results from operating activities     (4,073)               (199)
                                                                 

Finance income                          2,361               1,204

Finance costs                           1,783               1,304

Loss before income taxes              (3,495)               (299)
                                                                 

Income tax recovery                       909                 180
                                                                 

Net loss                          $   (2,586)   $           (119)
                                                                 

Earnings per share:                                              

  Basic                           $    (0.04)   $            0.00

  Diluted                              (0.04)                0.00

(2) Adjusted to reflect the impact from the implementation of the
    amendments to IAS 19, Employee Benefits, which can be found in Note
    3 of the May 4, 2013 unaudited condensed consolidated interim
    financial statements.

 
REITMANS (CANADA) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in thousands of Canadian dollars)
                                                                       
                                            For the three months ended
                                           May 4, 2013   April 28, 2012
                                                                       

Net loss                                   $   (2,586)   $        (119)

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
    $8)                                             42                -
    Net change in fair value of
    available-for-sale financial assets
    (net of tax of $101; 2012 - $29)               663            (197)
                                                                       

Total other comprehensive income (loss)            705            (197)
                                                                       

Total comprehensive loss                   $   (1,881)   $        (316)

 
REITMANS (CANADA) LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of Canadian dollars)
                                                                       
                                                       February 2, 2013
                     May 4, 2013   April 28, 2012(2)                (2)
                                                                       

ASSETS                                                                 

CURRENT ASSETS                                                         

  Cash and cash
  equivalents        $    66,729   $         138,187   $         97,626

  Marketable
  securities              72,499              71,321             71,630

  Trade and other
  receivables              5,194               3,783              3,600

  Derivative
  financial asset            903                  74                548

  Income taxes
  recoverable             10,174              15,507              8,709

  Inventories            112,253             112,785             93,317

  Prepaid expenses        25,791              12,330             25,944
    Total Current
    Assets               293,543             353,987            301,374
                                                                       

NON-CURRENT ASSETS                                                     

  Property and
  equipment              200,953             191,577            205,131

  Intangible assets       18,892              17,329             19,224

  Goodwill                42,426              42,426             42,426

  Deferred income
  taxes                   27,439              23,287             26,444
    Total
    Non-Current
    Assets               289,710             274,619            293,225
                                                                       

TOTAL ASSETS         $   583,253   $         628,606   $        594,599
                                                                       

LIABILITIES AND
SHAREHOLDERS' EQUITY                                                   

CURRENT LIABILITIES                                                    

  Trade and other
  payables           $    75,158   $          81,776   $         68,781

  Derivative
  financial
  liability                2,220                 914                266

  Deferred revenue        11,126              13,557             16,297

  Current portion of
  long-term debt           1,595               1,497              1,570
    Total Current
    Liabilities           90,099              97,744             86,914
                                                                       

NON-CURRENT
LIABILITIES                                                            

  Other payables          11,415              11,095             11,425

  Deferred lease
  credits                 16,797              16,768             16,805

  Long-term debt           6,596               8,191              7,003

  Pension liability       17,977              15,386             17,559
    Total
    Non-Current
    Liabilities           52,785              51,440             52,792
                                                                       

SHAREHOLDERS' EQUITY                                                   

  Share capital           39,227              39,890             39,227

  Contributed
  surplus                  6,795               5,348              6,521

  Retained earnings      384,977             425,644            400,480

  Accumulated other
  comprehensive
  income                   9,370               8,540              8,665
    Total
    Shareholders'
    Equity               440,369             479,422            454,893
                                                                       

TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY               $   583,253   $         628,606   $        594,599

(2) Adjusted to reflect the impact from the implementation of the
    amendments to IAS 19, Employee Benefits, which can be found in Note
    3 of the May 4, 2013 unaudited condensed consolidated interim
    financial statements.

 
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
February 3,
2013            $ 39,227   $     6,521   $  400,480   $       8,665   $     454,893
                                                                                   

Total
comprehensive
loss for the
period                                                                             

  Net loss                                  (2,586)                         (2,586)

  Total other
  comprehensive
  income                                                        705             705

Total
comprehensive
loss for the
period                 -             -      (2,586)             705         (1,881)
                                                                                   

Contributions
by and
distributions
to owners of
the Company                                                                        

  Share-based
  compensation
  costs                            274                                          274

  Dividends                                (12,917)                        (12,917)

Total
contributions
by and
distributions
to owners of
the Company            -           274     (12,917)               -        (12,643)
                                                                                   

Balance as at
May 4, 2013     $ 39,227   $     6,795   $  384,977   $       9,370   $     440,369
                                                                                   
                                                                                   

Balance as at
January 29,
2012            $ 39,890   $     5,158   $  438,880   $       8,737   $     492,665
                                                                                   

Total
comprehensive
loss for the
period                                                                             

  Net loss                                    (119)                           (119)

  Total other
  comprehensive
  loss                                                        (197)           (197)

Total
comprehensive
loss for the
period                 -             -        (119)           (197)           (316)
                                                                                   

Contributions
by and
distributions
to owners of
the Company                                                                        

  Share-based
  compensation
  costs                            190                                          190

  Dividends                                (13,117)                        (13,117)

Total
contributions
by and
distributions
to owners of
the Company            -           190     (13,117)               -        (12,927)
                                                                                   

Balance as at
April 28, 2012  $ 39,890   $     5,348   $  425,644   $       8,540   $     479,422


REITMANS (CANADA) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands of Canadian dollars) 


                                                            
                                             For the three months ended
                                           May 4, 2013   April 28, 2012

CASH FLOWS FROM (USED IN) OPERATING                     
ACTIVITIES                                                             

  Net loss                                 $   (2,586)   $        (119)

  Adjustments for:                                                     
    Depreciation, amortization and                      
    impairment losses                           14,996           13,797
    Share-based compensation costs                 274              190
    Amortization of deferred lease credits     (1,176)          (1,194)
    Deferred lease credits                       1,168              645
    Pension contribution                          (32)            (163)
    Pension expense                                450              418
    Impairment loss on available-for-sale               
    financial assets                                50                -
    Net change in fair value of                         
    derivatives                                  1,599               86
    Foreign exchange loss on cash and cash              
    equivalents                                     41              623
    Interest and dividend income, net            (868)          (1,047)
    Interest paid                                (134)            (157)
    Interest received                              138              368
    Dividends received                             867              868
    Income tax recovery                          (909)            (180)
                                                13,878           14,135

  Changes in:                                                          
    Trade and other receivables                (1,598)            (782)
    Inventories                               (18,936)         (19,597)
    Prepaid expenses                               153            (428)
    Trade and other payables                     5,987            1,804
    Deferred revenue                           (5,171)          (8,721)

  Cash from operating activities               (5,687)         (13,589)

  Income taxes received                            647                -

  Income taxes paid                            (2,306)         (10,610)

  Net cash flows from operating activities     (7,346)         (24,199)
                                                                       

CASH FLOWS USED IN INVESTING ACTIVITIES                                

  Purchases of marketable securities             (105)            (105)

  Additions to property and equipment and               
  intangible assets                           (10,106)         (20,245)

  Cash flows used in investing activities     (10,211)         (20,350)
                                                                       

CASH FLOWS USED IN FINANCING ACTIVITIES                                

  Dividends paid                              (12,917)         (13,117)

  Repayment of long-term debt                    (382)            (359)

  Cash flows used in financing activities     (13,299)         (13,476)
                                                                       

FOREIGN EXCHANGE LOSS ON CASH HELD IN                   
FOREIGN CURRENCY                                  (41)            (623)
                                                                       

NET DECREASE IN CASH AND CASH EQUIVALENTS     (30,897)         (58,648)
                                                                       

CASH AND CASH EQUIVALENTS, BEGINNING OF                 
THE PERIOD                                      97,626          196,835
                                                                       

CASH AND CASH EQUIVALENTS, END OF THE                   
PERIOD                                     $    66,729   $      138,187





Jeremy H. Reitman Chairman and Chief Executive Officer

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

SOURCE: Reitmans (Canada) Limited

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

-0- Jun/04/2013 21:13 GMT


 
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