Dollarama announces solid first quarter results and renews normal course issuer bid

Dollarama announces solid first quarter results and renews normal course 
issuer bid 
MONTREAL, June 12, 2013 /CNW Telbec/ - Dollarama Inc. (TSX: DOL) ("Dollarama" 
or the "Corporation") today reported an increase in sales and an improvement 
in net earnings for the first quarter ended May 5, 2013. The quarter was 
characterized by strong sales growth and solid comparable store sales growth 
despite difficult weather conditions. 
Financial and Operating Highlights 
(All comparative figures below and in the "Financial Results" section that 
follows, are for the first quarter ended May 5, 2013 compared to the first 
quarter ended April 29, 2012. All financial information presented in this 
news release has been prepared in accordance with generally accepted 
accounting principles in Canada ("GAAP") as set out in the Handbook of the 
Canadian Institute of Chartered Accountants - Part 1 which incorporates 
International Financial Reporting Standards ("IFRS") as issued by the 
International Accounting Standards Board. Throughout this news release, 
EBITDA, which is referred to as the "Non-GAAP Measure", is used to provide a 
better understanding of the Corporation'sfinancial results. For a full 
explanation of the Corporation's use of the Non-GAAP Measure, please refer to 
footnote 1 of the "Selected Consolidated Financial Information" section of 
this news release.) 
Throughout this news release, all references to "Fiscal 2013" are to the 
Corporation's fiscal year ended February 3, 2013 and to "Fiscal 2014" are to 
the Corporation's fiscal year ending February 2, 2014. 
Compared to the first quarter of Fiscal 2013 

    --  Sales increased by 12.6%;
    --  Comparable store sales grew 3.7%;
    --  EBITDA((1)) grew 7.5% to $76.3 million, or 17.0% of sales;
    --  Operating income grew 5.0% to $65.0 million, or 14.5% of sales;
    --  Diluted net earnings per share increased by 10.7%, from $0.56
        to $0.62; and

In addition, 85 net new stores were opened over the past 12 months, including 
21 net new stores opened during the first quarter of Fiscal2014.

The acceleration of net new store openings over the past 12 months to 85 
compared to 54 net new stores during the prior comparable period had a 
temporary cost impact in the first quarter of approximately 0.40% on gross 
margin and of 0.20% on general, administrative and store operating expenses 
("SG&A") due to costs associated with new store openings. This cost impact is 
expected to continue over the next three quarters after which the Corporation 
expects to realize the positive effects of an increase in the number of net 
new stores.

"We are pleased with our first quarter financial and operating results. Our 
business continues to deliver improved sales and earnings as we remain focused 
on providing great value to our customers from our growing number of 
conveniently located stores. For Fiscal 2014, we are committed to opening a 
minimum of 80 net new stores thereby maintaining the increased pace of new 
store openings established in Fiscal 2013," stated Larry Rossy, Chairman and 
Chief Executive Officer of Dollarama.

Financial Results

Sales for the first quarter of Fiscal 2014 increased by 12.6% to 
$448.1million from $398.0million in the corresponding period of the prior 
fiscal year. The increase was driven by the growth in the number of stores 
over the past twelve months from 721 stores on April 29, 2012 to 806 stores on 
May 5, 2013, and continued organic sales growth driven by comparable store 
sales growth of 3.7% in the first quarter of Fiscal 2014, over and above 
comparable store sales growth of 8.1% in the first quarter of Fiscal 2013. 
Comparable store sales growth for the first quarter of Fiscal 2014 consisted 
of a 4.6% increase in average transaction size partially offset by a 0.9% 
decrease in the number of transactions. The increase in comparable store sales 
is particularly satisfying given the difficult weather conditions in February 
and March of 2013 compared to the very favourable conditions in the prior 
year. Weather conditions had an adverse impact on the number of transactions 
compared to the prior year while transaction sizes improved as a result of the 
increased sales on higher price point items. In this quarter, 58% of our sales 
originated from products priced higher than $1.00 compared to 51% in the 
corresponding quarter last year. Debit card penetration also increased, as 40% 
of sales were paid with debit cards compared to 39% in the corresponding 
period of the previous fiscal year.

The gross margin was 35.9% of sales in the first quarter of Fiscal 2014, 
compared to 36.3% of sales in the first quarter of Fiscal 2013, mainly due to 
stable product margins offset by additional occupancy and logistics costs 
associated with the increased pace of new store openings in the first quarter 
of Fiscal 2014. The cost effects associated to the acceleration of net new 
store openings is expected to have a greater impact during the first half of 
Fiscal 2014. This impact will be offset by the positive contributions of these 
stores as they mature.

SG&A expenses for the first quarter of Fiscal2014 increased to 18.8% of 
sales, compared to 18.5% of sales in the corresponding period of Fiscal2013. 
During the quarter we realized the benefit of several productivity initiatives 
implemented to date, however, these were offset by (i) training and labour 
costs associated with the incremental impact of a greater number of new store 
openings that are not contributing sales and earnings to the extent of more 
mature stores, and (ii) the timing of other operating expenses incurred 
including the costs of rolling out various productivity initiatives. SG&A( 
)expenses in the first quarter of Fiscal2014 stood at $84.4million, a 
14.9% increase over $73.5million in the corresponding period of Fiscal 2013. 
The increase is due primarily to the opening of 85 net new stores over the 
past twelve months. The Corporation's ongoing productivity initiatives are 
expected to result in a slight improvement in our SG&A as a percentage of 
sales( )for Fiscal 2014 when compared to Fiscal 2013.

Net financing costs decreased by $0.4million, from $2.7million for the 
first quarter of Fiscal2013 to $2.3 million for the first quarter of 
Fiscal2014. This decrease is attributable to a lower interest rate on the 
long-term debt compared to the corresponding period of Fiscal2013.

For the first quarter of Fiscal2014, net earnings increased to 
$45.6million, or $0.62 per diluted share, compared to $42.6million, or 
$0.56 per diluted share, for the corresponding period of Fiscal2013.


On June 12, 2013, the Corporation's Board of Directors announced that it had 
approved a quarterly dividend for holders of its common shares of $0.14 per 
common share. The Corporation's quarterly dividend will be paid on August 7, 
2013 to shareholders of record at the close of business on July 5, 2013 and is 
designated as an "eligible dividend" for Canadian tax purposes.

Renewal of Normal Course Issuer Bid

On June 12, 2013, the Corporation also announced that its Board of Directors 
had approved the renewal of the normal course issuer bid and that Dollarama 
had received approval from the Toronto Stock Exchange to purchase, for 
cancellation, up to 3,364,523 common shares, or 5% of the public float of 
67,290,467 common shares as of May 31,2013. Purchases may commence on 
June17, 2013 and will terminate no later than June16,2014. Dollarama 
also announced that it had entered into an automatic purchase plan agreement 
with a broker to allow for the purchase of its common shares under the NCIB at 
times when Dollarama ordinarily would not be active in the market due to 
self-imposed trading blackout periods. Outside of these pre-determined 
blackout periods, common shares will be purchased in accordance with 
management's discretion. The Board of Directors believes that the purchase by 
Dollarama of its common shares represents an appropriate and desirable use of 
its available cash to increase shareholder value.

About Dollarama

Dollarama is Canada's leading dollar store operator with 806 locations across 
the country. Our stores provide customers with compelling value in convenient 
locations, including metropolitan areas, mid-sized cities and small towns. 
Dollarama aims to provide customers with a consistent shopping experience, 
offering a broad assortment of everyday consumer products, general merchandise 
and seasonal items. Products are currently sold in individual or multiple 
units at select fixed price points up to $3.00.

Forward-Looking Statements

Certain statements in this news release about our current and future plans, 
expectations and intentions, results, levels of activity, performance, goals 
or achievements or any other future events or developments constitute 
forward-looking statements. The words "may", "will", "would", "should", 
"could", "expects", "plans", "intends", "trends", "indications", 
"anticipates", "believes", "estimates", "predicts", "likely" or "potential" or 
the negative or other variations of these words or other comparable words or 
phrases, are intended to identify forward-looking statements. Forward-looking 
statements are based on information currently available to us and on estimates 
and assumptions made by us in light of our experience and perception of 
historical trends, current conditions and expected future developments, as 
well as other factors that we believe are appropriate and reasonable in the 
circumstances, but there can be no assurance that such estimates and 
assumptions will prove to be correct. Many factors could cause our actual 
results, level of activity, performance or achievements or future events or 
developments to differ materially from those expressed or implied by the 
forward-looking statements, including, without limitation, the following 
factors, which are discussed in greater detail in the "Risks and 
Uncertainties" section of the Corporation's management's discussion and 
analysis (MD&A) for Fiscal 2013 and in its continuous disclosure filings 
(available on SEDAR at future increases in operating and 
merchandise costs, inability to sustain assortment and replenishment of our 
merchandise, increase in the cost or a disruption in the flow of imported 
goods, disruption of distribution infrastructure, inventory shrinkage, 
inability to renew store, warehouse, distribution center and head office 
leases on favourable terms, inability to increase our warehouse and 
distribution center capacity in a timely manner, seasonality, market 
acceptance of our private brands, failure to protect trademarks and other 
proprietary rights, foreign exchange rate fluctuations, potential losses 
associated with using derivative financial instruments, level of indebtedness 
and inability to generate sufficient cash to service our debt, interest rate 
risk associated with variable rate indebtedness, competition in the retail 
industry, current economic conditions, failure to attract and retain qualified 
employees, departure of senior executives, disruption in information 
technology systems, unsuccessful execution of our growth strategy, holding 
company structure, adverse weather, natural disasters and geo-political 
events, unexpected costs associated with our current insurance program, 
litigation, product liability claims and product recalls, and environmental 
and regulatory compliance.

These factors are not intended to represent a complete list of the factors 
that could affect us; however, they should be considered carefully. The 
purpose of the forward-looking statements is to provide the reader with a 
description of management's expectations regarding the Corporation's financial 
performance and may not be appropriate for other purposes; readers should not 
place undue reliance on forward-looking statements made herein. Furthermore, 
unless otherwise stated, the forward-looking statements contained in this news 
release are made as of June12, 2013, and we have no intention and undertake 
no obligation to update or revise any forward-looking statements, whether as a 
result of new information, future events or otherwise, except as required by 
law. The forward-looking statements contained in this news release are 
expressly qualified by this cautionary statement.

Selected Consolidated Financial Information
                                                13-Week Period Ended

(dollars and shares in thousands,       May 5, 2013     April 29, 2012
except per share amounts)
                                                $                 $

Earnings Data                                                          

Sales                                        448,120            397,967

Cost of sales                                287,446            253,548

Gross profit                                 160,674            144,419

SG&A                                          84,406             73,489

Depreciation and amortization                 11,229              9,005

Operating income                              65,039             61,925

Net financing costs                            2,313              2,730

Earnings before income taxes                  62,726             59,195

Provision for income taxes                    17,081             16,612

Net earnings                                  45,645             42,583

Basic net earnings per common share            $0.62              $0.58

Diluted net earnings per common share          $0.62              $0.56

Weighted average number of common                     
shares outstanding during the period:                                  

  Basic                                       73,102             73,808

  Diluted                                     73,274             75,701

Other Data                                                             

Year-over-year sales growth                    12.6%              14.9%

Comparable store sales growth ((2))             3.7%               8.1%

Gross margin ((3))                             35.9%              36.3%

SG&A as a % of sales ((3))                     18.8%              18.5%

EBITDA ((1))                                  76,268             70,930

Operating margin ((3))                         14.5%              15.6%

Capital expenditures                          20,050             14,124

Number of stores ((4))                           806                721

Average store size (gross square                      
feet) ((4))                                    9,939              9,916

Declared dividends per common share (                 
(5))                                           $0.14              $0.11
                                                           As at
                                        May 5, 2013    February 3, 2013
                                                $                 $

Statement of Financial Position Data                                   

Cash and cash equivalents                     39,975             52,566

Merchandise inventories                      332,119            338,385

Property and equipment                       216,426            207,697

Total assets                               1,458,285          1,453,692

Total debt ((6))                             266,478            264,420

Net debt ((7))                               226,503            211,854
    ((1)) In this press release EBITDA is referred to as the "Non-GAAP
      measure". EBITDA represents operating income plus depreciation
      and amortization. Non-GAAP measures are not generally accepted
      measures under GAAP and do not have a standardized meaning under
      GAAP. The Non-GAAP measure, as calculated by the Corporation, may
      not be comparable to those of other issuers and should be
      considered as a supplement to, not a substitute for, or superior
      to, the comparable measures calculated in accordance with GAAP.
      We have included the Non-GAAP measure to provide investors with
      supplemental measures of our operating and financial performance.
      We believe that Non-GAAP measures are important supplemental
      metrics of operating and financial performance because they
      eliminate items that have less bearing on our operating and
      financial performance and thus highlight trends in our core
      business that may not otherwise be apparent when relying solely
      on GAAP measures. We also believe that securities analysts,
      investors and other interested parties frequently use non-GAAP
      measures in the evaluation of issuers, many of which present
      non-GAAP measures when reporting their results. Our management
      also uses the Non-GAAP measure in order to facilitate operating
      and financial performance comparisons from period to period, to
      prepare annual budgets, and to assess our ability to meet our
      future debt service, capital expenditure and working capital
                                                   13-Week Period Ended

(dollars in thousands)                    May 5, 2013   April 29, 2012
                                                 $               $

A reconciliation of operating income to                
EBITDA is included below:                                             

Operating income                               65,039           61,925

Add: Depreciation and amortization             11,229            9,005

EBITDA                                         76,268           70,930

  EBITDA margin ((3))                           17.0%            17.8%

((2) ) Comparable store sales represents sales of stores, including
       relocated and expanded stores, open for at least 13 complete
       fiscal months relative to the same period in the prior year.

((3))  Gross margin represents gross profit divided by sales. SG&A as a
       % of sales represents SG&A divided by sales. Operating margin
       represents operating income divided by sales. EBITDA margin
       represents EBITDA divided by sales.

((4) ) At the end of the period.

((5))  On April 11, 2013, the Corporation's Board of Directors approved
       a 27% increase of the quarterly dividend, from $0.11 to $0.14
       per common share. Dividends are usually paid at the beginning of
       the quarter following the declaration date.

((6))  Total debt is comprised of long-term debt before debt issue
       costs and discounts.

((7))  Net debt is defined as total debt minus cash and cash

Investors Michael Ross, FCPA, FCA Chief Financial Officer and Secretary 
(514)737-1006 x1237

Media Lyla Radmanovich NATIONAL Public Relations (514)843-2336

SOURCE: Dollarama Inc.

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CO: Dollarama Inc.
ST: Quebec

-0- Jun/12/2013 11:30 GMT

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