Empire Company Reports Second Quarter Results

STELLARTON, NS, Dec. 12, 2013 /CNW/ - Empire Company Limited ("Empire" or the 
"Company") (TSX: EMP.A) today announced financial results for its second 
quarter ended November 2, 2013. In the second quarter, the Company recorded 
adjusted net earnings from continuing operations, net of non-controlling 
interest, of $78.1 million ($1.15 per diluted share) compared to $82.7 million 
($1.21 per diluted share) in the second quarter last year. 
Second Quarter Highlights 


    --  Sales of $4.43 billion, up $79.7 million or 1.8 percent.
    --  Sobeys' same-store sales increased 0.2 percent.
    --  Adjusted EBITDA ((1)) of $214.8 million versus $213.2 million
        last year. 
    --  Adjusted net earnings from continuing operations ((1)), net of
        non-controlling interest, of $78.1 million ($1.15 per diluted
        share) versus $82.7 million ($1.21 per diluted share) last
        year.
    --  Funded debt to total capital ratio of 22.4 percent compared to
        21.5 percent last year.

____________________
(1)Excludes items which are considered not indicative of underlying business 
operating performance.

Marc Poulin, President and CEO of Empire Company Limited stated: "In the 
second quarter, we achieved same-store sales growth in an environment which 
remains very competitive. Although the current market dynamic did impact our 
overall gross margin, the impact on our adjusted net earnings was largely 
offset as a result of operating cost control.

"Subsequent to the end of the quarter, we announced the completion of the 
acquisition of Canada Safeway and are very pleased to have begun the 
integration in accordance with our plans.Notwithstanding the significant 
focus on this, we are also advancing our business through our Better Food for 
All movement and recently opened our first Sobeys Extra store in Burlington, 
Ontario which offers shoppers extra departments, products, experts, services 
and savings."

Dividend Declaration

The Board of Directors declared a quarterly dividend of 26.0 cents per share 
on both the Non-Voting Class A shares and the Class B common shares that will 
be payable on January 31, 2014 to shareholders of record on January 15, 
2014.These dividends are eligible dividends as defined for the purposes of 
the Income Tax Act (Canada) and applicable provincial legislation and, 
therefore, qualify for the favourable tax treatment applicable to such 
dividends.

Discontinued Operations

On November 1, 2013, the Company announced that Empire Theatres completed the 
sale of 46 theatres with 397 screens in separate transactions with Cineplex 
Inc. and Landmark Cinemas as previously announced on June 27, 2013.As a 
result of the sale, financial results related to Empire Theatres, as 
previously reported in the investments and other operations segment, have been 
included in discontinued operations in the condensed consolidated statements 
of earnings for the 13 and 26 weeks ended November 2, 2013 and November 3, 
2012.

CONSOLIDATED FINANCIAL RESULTS
                   13 Weeks Ended        ($)     26 Weeks Ended        ($)

($ in                                                           
millions,
except per               Nov. 3,
share          Nov. 2,    2012 (            Nov. 2,    Nov. 3,
amounts)          2013      (1))   Change      2013 2012 ((1))   Change

Sales        $ 4,428.5 $ 4,348.8 $   79.7 $ 9,037.9 $  8,857.9 $  180.0

Adjusted
EBITDA ((2)
(3))             214.8     213.2      1.6     447.2      466.4   (19.2)

EBITDA ((2))     196.8     223.2   (26.4)     419.0      483.9   (64.9)

Adjusted
operating
income ((2)
(3))             124.4     128.2    (3.8)     268.5      295.7   (27.2)

Operating
income ((2))     106.4     138.2   (31.8)     240.3      313.2   (72.9)

Adjusted net
earnings
from
continuing
operations (
(2)(3)(4))        78.1      82.7    (4.6)     167.8      185.3   (17.5)

Net earnings
from
continuing
operations (
(4))              60.5      90.3   (29.8)     143.1      198.4   (55.3)

Net earnings     108.7       1.6    107.1      91.1        1.1     90.0
from
discontinued
operations

Net earnings
((4))        $   169.2 $    91.9 $   77.3 $   234.2 $    199.5 $   34.7
                                                                       

Adjusted EPS
from
continuing
operations
(fully
diluted) (
(2)(3)(4))   $    1.15 $    1.21 $ (0.06) $    2.46 $     2.72 $ (0.26)

EPS from
continuing
operations
(fully
diluted) (
(4))         $    0.89 $    1.33 $ (0.44) $    2.10 $     2.91 $ (0.81)

(1) Amounts have been restated as a result of a change in
    accounting policy and reclassification of discontinued
    operations.  See Notes 3 and 12 of the Company's second
    quarter unaudited condensed consolidated financial
    statements.

(2) See "Non-GAAP Financial Measures" section of this news
    release.

(3) Excludes items which are considered not indicative of
    underlying business operating performance.

(4) Net of non-controlling interest.

Sales

Consolidated sales for the 13 weeks ended November 2, 2013 were $4.43 billion 
compared to $4.35 billion in the second quarter last year, an increase of 
$79.7 million or 1.8 percent. During this period, sales from the food 
retailing segment increased $85.4 million or 2.0 percent.

The following table reconciles sales reported by Sobeys to Empire's food 
retailing segmented sales, and food retailing and investments and other 
operations' segmented sales to Empire's consolidated sales from continuing 
operations.
                    
                      13 Weeks Ended       ($)     (%)    26 Weeks Ended       ($)     (%)


                 Nov. 2,   Nov. 3,                   Nov. 2,   Nov. 3,
($ in millions)         2013      2012  Change  Change      2013      2012  Change  Change 
Food retailing                                                                            
segment 
Sobeys' reported   $ 4,416.8 $ 4,330.4 $  86.4    2.0% $ 9,011.7 $ 8,827.1 $ 184.6    2.1%
sales 
Reclassification      14.2      15.0                      28.3      28.3                
  of lease revenue
  from owned
  property
  recorded by
  Sobeys 
                 4,431.0   4,345.4    85.6    2.0%   9,040.0   8,855.4   184.6    2.1% 
Elimination of       (3.3)     (3.1)                     (6.3)     (6.0)                
  sales to
  discontinued
  operations 
Empire's food        4,427.7   4,342.3    85.4    2.0%   9,033.7   8,849.4   184.3    2.1%
retailing
segmented sales 
                                                                                       
Investments and
other operations
segmented sales (
(1))                     0.8       6.5   (5.7) (87.7)%       4.2       8.5   (4.3) (50.6)% 
Empire             $ 4,428.5 $ 4,348.8 $  79.7    1.8% $ 9,037.9 $ 8,857.9 $ 180.0    2.0%
consolidated sales 
(1) Sales generated from Empire Theatres have been recorded in 


    discontinued operations.   

During the second quarter, Sobeys reported sales of $4.42 billion, an increase 
of $86.4 million or 2.0 percent from the $4.33 billion reported in the second 
quarter of fiscal 2013. The growth in Sobeys' reported sales in the second 
quarter of fiscal 2014 was a result of Sobeys' continued investment in its 
retail network, coupled with the continued implementation of sales and 
merchandising initiatives. Sobeys' same-store sales increased 0.2 percent 
from the prior year. Sales growth was impacted by low food inflation and 
increased competition during the 13 weeks ended November 2, 2013.

Investments and other operations' sales in the second quarter were $0.8 
million compared to $6.5 million in the second quarter last year, a decrease 
of $5.7 million. Sales generated from Empire Theatres have been recorded in 
discontinued operations. Up to the date of closing of the Empire Theatres 
sale of assets on November 1, 2013, sales generated from discontinued 
operations were $71.9 million in the second quarter of fiscal 2014 compared to 
$55.3 million last year, an increase of $16.6 million.

EBITDA

Consolidated EBITDA in the second quarter was $196.8 million compared to 
$223.2 million in the second quarter last year. EBITDA in the second quarter 
was largely impacted by lower gross margin and increased selling and 
administrative expenses as a result of transaction costs related to the Canada 
Safeway acquisition of $16.8 million and organizational realignment and 
restructuring costs of $8.4 million.

After adjusting EBITDA for items which are considered not indicative of 
underlying business operating performance, as presented in the following 
table, second quarter adjusted EBITDA amounted to $214.8 million compared to 
$213.2 million in the second quarter last year.
                    
                          13 Weeks Ended             26 Weeks Ended


                          Nov. 3, 2012               Nov. 3, 2012 (
($ in millions)  Nov. 2, 2013         ((1)) Nov. 2, 2013           (1)) 
EBITDA ((2)(3))
(consolidated)   $      196.8 $       223.2 $      419.0 $        483.9 
Adjustments:                                                            
Transaction            16.8             -         26.9              -
  costs
  associated
  with the
  Canada Safeway
  acquisition 
Organizational          8.4           0.9          8.4            3.8
  realignment
  and
  restructuring
  costs 
Gain on               (2.8)        (10.4)        (2.7)         (11.8)
  disposal of
  assets 
Dilution gains        (4.4)             -        (4.4)         (12.1) 
Québec                    -         (0.5)            -            2.6
  distribution
  network
  restructuring 


                         18.0        (10.0)         28.2         (17.5)

Adjusted EBITDA
((2))
(consolidated)   $      214.8 $       213.2 $      447.2 $        466.4

(1) Amounts have been restated as a result of a change in accounting
    policy and reclassification of discontinued operations.  See Notes
    3 and 12 of the Company's second quarter unaudited condensed
    consolidated financial statements.

(2) See "Non-GAAP Financial Measures" section of this news release.

(3) EBITDA generated from Empire Theatres has been recorded in
    discontinued operations.

Operating Income

Consolidated operating income in the second quarter was $106.4 million, a 
decrease of $31.8 million from the $138.2 million recorded in the second 
quarter last year. After adjusting operating income for items which are 
considered not indicative of underlying business operating performance, as 
presented in the preceding table for EBITDA, quarterly adjusted consolidated 
operating income amounted to $124.4 million compared to $128.2 million in the 
second quarter last year, a decrease of $3.8 million.

Net Earnings from Continuing Operations

Consolidated net earnings from continuing operations, net of non-controlling 
interest, in the second quarter equalled $60.5 million ($0.89 per diluted 
share) compared to $90.3 million ($1.33 per diluted share) in the second 
quarter last year, a $29.8 million decrease. The decline is the result of 
lower gross profit, transaction and finance costs related to the Canada 
Safeway acquisition, organizational realignment and restructuring costs and 
lower gains on disposal of assets compared to the prior year.

Adjusted Net Earnings from Continuing Operations

The table below adjusts reported net earnings from continuing operations, net 
of non-controlling interest, for items which are considered not indicative of 
underlying business operating performance. After factoring in the impact of 
the adjustments noted in the table, Empire recorded adjusted net earnings from 
continuing operations, net of non-controlling interest, of $78.1 million 
($1.15 per diluted share) for the 13 weeks ended November 2, 2013 compared to 
$82.7 million ($1.21 per diluted share) recorded in the second quarter last 
year.
                  
                          13 Weeks Ended             26 Weeks Ended

($ in millions,
except per share
amounts, net of               Nov. 3, 2012               Nov. 3, 2012 (
tax)             Nov. 2, 2013         ((1)) Nov. 2, 2013           (1))

Net earnings                                                           
from continuing
operations by
segment ((2)):

  Food retailing $       56.3 $        83.4 $      135.5 $        179.1

  Investments             4.2           6.9          7.6           19.3
  and other
  operations

Net earnings
from continuing
operations  (
(2))             $       60.5 $        90.3 $      143.1 $        198.4

EPS from         $       0.89 $        1.33 $       2.10 $         2.91
continuing
operations
(fully diluted)
                                                                       

Adjustments (                                                          
(3)):

  Transaction    $       12.0 $           - $       19.1 $            -
  costs
  associated
  with the
  Canada Safeway
  acquisition

  Finance costs           5.9             -          5.9              -
  associated
  with the
  Canada Safeway
  acquisition

  Organizational          5.1           0.7          5.1            2.8
  realignment
  and
  restructuring
  costs

  Gain on               (2.3)         (7.9)        (2.3)          (9.2)
  disposal of
  assets

  Dilution gains        (3.1)             -        (3.1)          (8.6)

  Québec                    -         (0.4)            -            1.9
  distribution
  network
  restructuring
                         17.6         (7.6)         24.7         (13.1)

Adjusted net
earnings from
continuing
operations ((2)
(4))             $       78.1 $        82.7 $      167.8 $        185.3
                                                                       

Adjusted net                                                           
earnings from
continuing
operations by
segment ((2)):

  Food retailing $       71.7 $        75.8 $      158.6 $        174.1

  Investments             6.4           6.9          9.2           11.2
  and other
  operations

Adjusted net
earnings from
continuing
operations ((2)
(4))             $       78.1 $        82.7 $      167.8 $        185.3

Adjusted EPS     $       1.15 $        1.21 $       2.46 $         2.72
from continuing
operations
(fully diluted)

(1) Amounts have been restated as a result of a change in accounting
    policy.  See Note 3 of the Company's second quarter unaudited
    condensed consolidated financial statements.

(2) Net of non-controlling interest.

(3) All adjustments are net of income taxes.

(4) See "Non-GAAP Financial Measures" section of this news release.

Net Earnings from Discontinued Operations

Up to the date of closing of the Empire Theatres sale of assets on November 1, 
2013, the Company recorded net earnings from discontinued operations in the 
second quarter of fiscal 2014 of $108.7 million ($1.59 per diluted share) 
compared to $1.6 million ($0.02 per diluted share) in the prior year, an 
increase of $107.1 million, primarily as a result of the gain, net of tax, on 
the sale of Empire Theatres' assets of $105.3 million in the 13 weeks ended 
November 2, 2013.

Net Earnings

After including earnings from discontinued operations, Empire's consolidated 
net earnings, net of non-controlling interest, in the second quarter of fiscal 
2014 equalled $169.2 million ($2.48 per diluted share) compared to $91.9 
million ($1.35 per diluted share) in the second quarter last year, an increase 
of $77.3 million.

The following table reconciles Empire's segmented net earnings from continuing 
operations, net of non-controlling interest, to net earnings, net of 
non-controlling interest, for the 13 and 26 weeks ended November 2, 2013 
compared to the 13 and 26 weeks ended November 3, 2012.
                                  
                 13 Weeks Ended       ($)     26 Weeks Ended        ($)

($ in                                                           
millions,
except per
share
amounts, net  Nov. 2,    Nov. 3,          Nov. 2, Nov. 3, 2012
of tax)          2013 2012 ((1))   Change    2013        ((1))   Change

Net earnings                                                           
from
continuing
operations by
segment  (
(2)):

  Food        $  56.3 $     83.4 $ (27.1) $ 135.5 $      179.1 $ (43.6)
  retailing

  Investments     4.2        6.9    (2.7)     7.6         19.3   (11.7)
  and other
  operations

Net earnings
from
continuing
operations  (
(2))          $  60.5 $     90.3 $ (29.8) $ 143.1 $      198.4 $ (55.3)

EPS from      $  0.89 $     1.33 $ (0.44) $  2.10 $       2.91 $ (0.81)
continuing
operations
(fully
diluted)
                                                                       

Net earnings    108.7        1.6    107.1    91.1          1.1     90.0
from
discontinued
operations
                                                                       

Net earnings                                                           
by segment (
(2)):

  Food        $  56.3 $     83.4 $ (27.1) $ 135.5 $      179.1 $ (43.6)
  retailing

  Investments   112.9        8.5    104.4    98.7         20.4     78.3
  and other
  operations

Net earnings
((2))         $ 169.2 $     91.9 $   77.3 $ 234.2 $      199.5 $   34.7

EPS (fully    $  2.48 $     1.35 $   1.13 $  3.44 $       2.93 $   0.51
diluted)

(1) Amounts have been restated as a result of a change in accounting
    policy.  See Note 3 of the Company's second quarter unaudited
    condensed consolidated financial statements.

(2) Net of non-controlling interest.

SEGMENTED FINANCIAL RESULTS

The Company operates and reports on two business segments:

1)  Food Retailing, which consists of wholly-owned Sobeys Inc.
    ("Sobeys"), and

2)  Investments and Other Operations, which as of November 2, 2013
    included investments in Crombie REIT (42.1 percent equity accounted
    interest; 40.8 percent fully diluted) and interests in Genstar.

FOOD RETAILING

The following table presents the food retailing segment's contribution to 
Empire's consolidated sales, adjusted EBITDA, EBITDA, adjusted operating 
income, operating income, adjusted net earnings, net of non-controlling 
interest, and net earnings, net of non-controlling interest.
           
          13 Weeks Ended ((1))      ($)  26 Weeks Ended ((1))       ($)

($ in      Nov.  2,    Nov. 3,            Nov. 2, Nov. 3, 2012
millions)      2013 2012 ((2))   Change      2013        ((2))   Change

Sales     $ 4,427.7 $  4,342.3 $   85.4 $ 9,033.7 $    8,849.4 $  184.3

Adjusted
EBITDA (
(3)(4))       203.8      201.7      2.1     430.0        446.6   (16.6)

EBITDA (                 211.7   (21.6)     405.3        452.7   (47.4)
(3))          190.1

Adjusted                 117.5    (4.0)     251.5        277.4   (25.9)
operating
income (
(3)(4))       113.5

Operating
income (
(3))           99.8      127.5   (27.7)     226.8        283.5   (56.7)

Adjusted
net
earnings
((3)(4)
(5))           71.7       75.8    (4.1)     158.6        174.1   (15.5)

Net
earnings
((5))          56.3       83.4   (27.1)     135.5        179.1   (43.6)

(1) Net of consolidation adjustments which includes a purchase price
    allocation from the privatization of Sobeys.

(2) Amounts have been restated as a result of a change in accounting
    policy.  See Note 3 of the Company's second quarter unaudited
    condensed consolidated financial statements.

(3) See "Non-GAAP Financial Measures" section of this news release.

(4) Excludes items which are considered not indicative of underlying
    business operating performance.

(5) Net of non-controlling interest.

Sales

Empire's food retailing segment achieved sales of $4.43 billion for the 13 
weeks ended November 2, 2013, an increase of $85.4 million or 2.0 percent over 
the same quarter last year.The growth in Sobeys' reported sales in the 
second quarter of fiscal 2014 was a result of Sobeys' continued investment in 
its retail network, coupled with the continued implementation of sales and 
merchandising initiatives.Sobeys' same-store sales increased 0.2 percent 
from the prior year.Sales growth was impacted by low inflation and increased 
competition during the 13 weeks ended November 2, 2013.

Gross Profit

Sobeys recorded gross profit for the 13 weeks ended November 2, 2013 of $993.3 
million, a decrease of $2.9 million or 0.3 percent compared to $996.2 million 
in the same quarter last year. Gross margin percentage decreased 51 basis 
points to 22.49 percent in the current quarter compared to 23.00 percent for 
the quarter ended November 3, 2012.The decrease in gross margin is a result 
of a highly promotional retail grocery environment.

EBITDA

Sobeys contributed EBITDA to Empire in the second quarter of $190.1 million 
(4.29 percent of sales) compared to $211.7 million (4.88 percent of sales) 
last year, a decrease of $21.6 million. EBITDA was largely impacted by lower 
gross margin and increased selling and administrative expenses as a result of 
transaction costs of $16.8 million related to the Canada Safeway acquisition, 
and a reduction in gains on the disposal of assets compared to the prior year.

After adjusting for items which are considered not indicative of underlying 
business operating performance, as presented in the following table, resulted 
in an adjusted EBITDA contribution from Sobeys to Empire of $203.8 million 
(4.60 percent of sales) in the second quarter compared to a $201.7 million 
(4.65 percent of sales) contribution in the second quarter last year.
                                               
                          13 Weeks Ended             26 Weeks Ended


                          Nov. 3, 2012               Nov. 3, 2012 (
($ in millions)  Nov. 2, 2013         ((1)) Nov. 2, 2013           (1)) 
EBITDA ((2) )
(contributed by
Sobeys)          $      190.1 $       211.7 $      405.3 $        452.7 
Adjustments:                                                            
Transaction            16.8             -         26.9              -
  costs
  associated
  with the
  Canada Safeway
  acquisition 
Gain on               (2.8)        (10.4)        (1.9)         (11.8)
  disposal of
  assets 
Dilution gains        (0.3)             -        (0.3)          (0.7) 
Organizational            -           0.9            -            3.8
  realignment
  costs 
Québec                    -         (0.5)            -            2.6
  distribution
  network
  restructuring 


                         13.7        (10.0)         24.7          (6.1)

Adjusted EBITDA
((2))            $      203.8 $       201.7 $      430.0 $        446.6

(1) Amounts have been restated as a result of a change in accounting
    policy.  See Note 3 of the Company's second quarter unaudited
    condensed consolidated financial statements.

(2) See "Non-GAAP Financial Measures" section of this news release.

Operating Income

Sobeys' operating income contribution to Empire in the second quarter was 
$99.8 million (2.25 percent of sales) compared to $127.5 million (2.94 percent 
of sales) in the same quarter last year, a decrease of $27.7 million. As 
mentioned, this decrease is the result of a heightened competitive 
environment, higher depreciation and amortization expense, transaction costs 
related to the Canada Safeway acquisition and lower gains on the disposal of 
assets.

After adjusting Sobeys' operating income for items which are considered not 
indicative of underlying business operating performance, as presented in the 
previous table for EBITDA, adjusted operating income contribution amounted to 
$113.5 million (2.56 percent of sales) in the second quarter compared to 
$117.5 million (2.71 percent of sales) in the second quarter last year, a 
decrease of $4.0 million.

Net Earnings

During the second quarter of fiscal 2014, Sobeys contributed net earnings, net 
of non-controlling interest, to Empire of $56.3 million compared to $83.4 
million in the second quarter last year.The decrease is largely the result 
of lower gross profit, transaction and finance costs related to the Canada 
Safeway acquisition and lower gains on the disposal of assets compared to the 
prior year.

Sobeys contributed adjusted net earnings, net of non-controlling interest, to 
Empire of $71.7 million compared to $75.8 million in the second quarter last 
year, a decrease of $4.1 million.

INVESTMENTS AND OTHER OPERATIONS

The table below presents investments and other operations' contribution to 
Empire's consolidated sales, adjusted EBITDA, EBITDA, operating income, 
adjusted net earnings from continuing operations, net earnings from continuing 
operations, net earnings from discontinued operations and net earnings.
                          
               13 Weeks Ended      ($)       26 Weeks Ended      ($)

($ in          Nov. 2, Nov. 3,         Nov. 2,
millions)         2013    2012  Change    2013 Nov. 3, 2012   Change

Sales ((1))    $   0.8 $   6.5 $ (5.7) $   4.2 $        8.5 $  (4.3)

Adjusted
EBITDA ((2)
(3))              11.0    11.5   (0.5)    17.2         19.8    (2.6)

EBITDA ((1)
(2))               6.7    11.5   (4.8)    13.7         31.2   (17.5)

Operating                                                           
income ((2))

  Crombie REIT
  ((4))            5.4     4.2     1.2    12.1          9.7      2.4

  Real estate
  partnerships
  ((5))            8.0     4.6     3.4    11.1          9.2      1.9

  Other
  operations,
  net of
  corporate
  expenses (
  (1)(6))        (6.8)     1.9   (8.7)   (9.7)         10.8   (20.5)
                   6.6    10.7   (4.1)    13.5         29.7   (16.2)

Adjusted net
earnings from
continuing
operations (
(2)(3))            6.4     6.9   (0.5)     9.2         11.2    (2.0)

Net earnings       4.2     6.9   (2.7)     7.6         19.3   (11.7)
from
continuing
operations

Net earnings     108.7     1.6   107.1    91.1          1.1     90.0
from
discontinued
operations

Net earnings     112.9     8.5   104.4    98.7         20.4     78.3

(1) Results generated from Empire Theatres have been recorded in
    discontinued operations.

(2) See "Non-GAAP Financial Measures" section of this news release.

(3) Excludes items which are considered not indicative of underlying
    business operating performance.

(4) 42.1 percent equity accounted interest in Crombie REIT (as at
    November 3, 2012 - 43.0 percent interest). 

(5) Interests in Genstar.

(6) 13 and 26 weeks ended November 2, 2013 included: organizational
    realignment and restructuring costs of $8.4 million and $8.4
    million, respectively;  and dilution gains of $4.1 million and $4.1
    million, respectively (13 and 26 weeks ended November 3, 2012 -
    organizational realignment and restructuring costs of $nil and
    $nil; and dilution gains of $nil and $11.4 million).

Sales

Investments and other operations' sales equalled $0.8 million in the second 
quarter ended November 2, 2013 versus $6.5 million in the second quarter last 
year, a $5.7 million decrease. Sales generated from Empire Theatres have 
been recorded in discontinued operations.Up to the date of closing of the 
Empire Theatres sale of assets on November 1, 2013, sales from the Company's 
discontinued operations totalled $71.9 million in the second quarter of fiscal 
2014 compared to $55.3 million last year, an increase of $16.6 million.

EBITDA

Investments and other operations contributed EBITDA to Empire in the second 
quarter of $6.7 million compared to $11.5 million last year. After adjusting 
for items which are considered not indicative of underlying business operating 
performance, as presented in the following table, resulted in adjusted EBITDA 
from investments and other operations of $11.0 million compared to $11.5 
million last year.
                      
                           13 Weeks Ended            26 Weeks Ended

($ in millions)    Nov. 2, 2013 Nov. 3, 2012 Nov. 2, 2013 Nov. 3, 2012

EBITDA ((1)(2))
(investments and
other operations)  $        6.7 $       11.5 $       13.7 $       31.2

Adjustments:                                                          

  Organizational            8.4            -          8.4            -
  realignment and
  restructuring
  costs

  Dilution gains          (4.1)            -        (4.1)       (11.4)

  Gain on disposal            -            -        (0.8)            -
  of assets
                            4.3            -          3.5       (11.4)

Adjusted EBITDA (
(1))               $       11.0 $       11.5 $       17.2 $       19.8

(1) See "Non-GAAP Financial Measures" section of this news release.

(2) EBITDA generated from Empire Theatres has been recorded in
    discontinued operations.

Operating Income

Investments and other operations contributed operating income of $6.6 million 
in the second quarter ended November 2, 2013 compared to $10.7 million in the 
second quarter last year, a decrease of $4.1 million. The contributors to 
operating income in the second quarter of fiscal 2014 were as follows:
    --  Equity accounted earnings from the Company's investment in
        Crombie REIT were $5.4 million in the 13 weeks ended November
        2, 2013, up $1.2 million from the $4.2 million recorded in the
        13 weeks ended November 3, 2012.
    --  Equity accounted earnings from the Company's investments in
        real estate partnerships (Genstar) were $8.0 million in the 13
        weeks ended November 2, 2013, an increase of $3.4 million
        compared to $4.6 million recorded in the same period last year.
    --  Other operations, net of corporate expenses, contributed
        operating income of $(6.8) million in the second quarter of
        fiscal 2014, down $8.7 million from the $1.9 million recorded
        in the same period last year.  The 13 weeks ended November 2,
        2013 included organizational realignment and restructuring
        costs of $8.4 million and dilution gains of $4.1 million (13
        weeks ended November 3, 2012 - $nil and $nil).

After adjusting investments and other operations' operating income for items 
which are considered not indicative of underlying business operating 
performance, as presented in the previous table for EBITDA, resulted in an 
adjusted operating income contribution during the second quarter of $10.9 
million versus $10.7 million last year.

Net Earnings from Continuing Operations

During the 13 weeks ended November 2, 2013, investments and other operations 
contributed $4.2 million to Empire's consolidated net earnings from continuing 
operations compared to a contribution of $6.9 million in the same period last 
year. The 13 weeks ended November 2, 2013, included organizational 
realignment and restructuring costs, net of tax, of $5.1 million and dilution 
gains, net of tax, of $2.9 million (13 weeks ended November 3, 2012 - $nil and 
$nil). After adjusting for these items, investments and other operations 
contributed adjusted net earnings from continuing operations of $6.4 million 
for the 13 weeks ended November 2, 2013 compared to $6.9 million in the second 
quarter last year.

Net Earnings

Investments and other operations contributed $112.9 million to Empire's 
consolidated net earnings in the second quarter of fiscal 2014 compared to a 
contribution of $8.5 million in the same period last year. The increase of 
$104.4 is due primarily to the gain, net of tax, of $105.3 million on the sale 
of Empire Theatres' assets in the 13 weeks ended November 2, 2013.

FINANCIAL CONDITION

The Company's overall financial position and liquidity remain healthy as 
evidenced by the capital structure and key financial condition measures 
presented in the table below.
                                    

($ in millions,                                      Nov. 3, 2012 ((1))
except per share and
ratio calculations)   Nov. 2, 2013 May 4, 2013 ((1))

Shareholders' equity, $    3,957.7 $         3,724.8 $          3,553.0
net of
non-controlling
interest

Book value per common
share ((2))           $      58.23 $           54.82 $            52.29

Bank indebtedness     $          - $             6.0 $             34.3

Long-term debt,       $    1,140.5 $           963.5 $            939.8
including current
portion

Funded debt to total
capital ((2)(3))             22.4%             20.7%              21.5%

Net funded debt to
net total capital (
(2))                          8.1%             12.1%              14.1%

Funded debt to EBITDA
((2)(3)(4)(5))                1.3x              1.1x               1.1x

EBITDA to interest
expense ((2)(4)(6))          12.9x             17.9x              16.5x

Current assets to
current liabilities (
(2))                          1.1x              1.0x               1.0x

Total assets          $   10,279.7 $         7,140.4 $          6,897.4

(1)  Amounts have been restated as a result of a change in accounting
     policy.  See Note 3 of the Company's second quarter unaudited
     condensed consolidated financial statements.

(2)  See "Non-GAAP Financial Measures" section of this news release.

(3)  When the $1.0 billion in notes payable in escrow become included
     in long-term debt, funded debt to total capital would be 35.1
     percent and funded debt to EBITDA would be 2.5 times as at
     November 2, 2013.

(4)  Ratios for November 2, 2013 and May 4, 2013 exclude EBITDA and
     interest expense relating to discontinued operations.

(5)  Calculation uses trailing four-quarter EBITDA.

(6)  Calculation uses trailing four-quarter EBITDA and interest
     expense.

At the end of the second quarter, Empire's consolidated ratio of funded debt 
to total capital was 22.4 percent (November 3, 2012 - 21.5 percent) with cash 
and cash equivalents of $792.5 million (May 4, 2013 - $455.2 million).

Shareholders' equity, net of non-controlling interest, increased $405 million 
or 11.4 percent over the second quarter last year to $3.96 billion.Book 
value per share increased to $58.23 at the end of the second quarter versus 
$54.82 at the start of the fiscal year.

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information that reflects 
management's current expectations related to matters such as future financial 
performance and operating results of the Company. Expressions such as 
"anticipates", "expects", "believes", "estimates", "could", "intend", "may", 
"plans", "will", "would" and other similar expressions or the negative of 
these terms are generally indicative of forward-looking statements. 
Forward-looking statements contained in this news release include those 
relating to our expectations that we will have sustainable and profitable 
growth which may be impacted by economic and competitive conditions.

By its very nature, forward-looking information requires the Company to make 
assumptions and is subject to inherent risks and uncertainties which give rise 
to the possibility that the Company's expectations or objectives will not 
prove to be accurate.These forward-looking statements are subject to 
uncertainties and other factors that could cause actual results to differ 
materially from such statements.These uncertainties and risks are discussed 
in the Company's materials filed with the Canadian securities regulatory 
authorities from time to time, including the Risk Management section of the 
annual Management's Discussion and Analysis report and the Short Form 
Prospectus filed July 24, 2013.

Readers are urged to consider these and other risks, uncertainties and 
assumptions carefully in evaluating the forward-looking information and are 
cautioned not to place undue reliance on such forward-looking 
information.The forward-looking information in this news release reflects 
the Company's expectations as at December 12, 2013 and is subject to change 
after this date.The Company does not undertake to update any forward-looking 
statements that may be made from time to time by or on behalf of the Company 
other than as required by applicable securities laws.

SUBSEQUENT EVENT

Subsequent to the close of the second quarter, on November 4, 2013, Sobeys, 
through its Asset Purchase Agreement with Safeway Inc. and its subsidiaries, 
closed the transaction to purchase substantially all of the assets and select 
liabilities of Canada Safeway for a cash purchase price of $5.8 billion, 
subject to a working capital adjustment.The agreement provides for the 
purchase of 213 full service grocery stores under the Safeway banner in 
Western Canada, 200 in-store pharmacies, 62 co-located fuel stations, 10 
liquor stores, 4 primary distribution centres and 12 manufacturing facilities, 
plus the assumption of certain liabilities.

NON-GAAP FINANCIAL MEASURES

There are measures included in this news release that do not have a 
standardized meaning under GAAP and therefore may not be comparable to 
similarly titled measures presented by other publicly traded companies.The 
Company includes these measures because it believes certain investors use 
these measures as a means of assessing financial performance.

Empire's definition of the non-GAAP terms are as follows:
    --  Same-store sales are sales from stores in the same location in
        both reporting periods.
    --  Gross profit is calculated as sales less cost of sales.
    --  Gross margin is gross profit divided by sales.
    --  Operating income, or earnings before interest and taxes
        ("EBIT"), is calculated as net earnings before non-controlling
        interest, finance costs (net of finance income) and income
        taxes.
    --  Adjusted operating income is operating income excluding items
        which are considered not indicative of underlying business
        operating performance.
    --  Operating income margin is operating income divided by sales.
    --  Earnings before interest, taxes, depreciation and amortization
        ("EBITDA") is calculated as operating income plus depreciation
        and amortization of intangibles.
    --  Adjusted EBITDA is EBITDA excluding items which are considered
        not indicative of underlying business operating performance.
    --  EBITDA margin is EBITDA divided by sales.
    --  Interest expense is calculated as interest expense on financial
        liabilities measured at amortized cost plus losses on cash flow
        hedges reclassified from other comprehensive income.
    --  Adjusted net earnings from continuing operations is net
        earnings from continuing operations excluding items which are
        considered not indicative of underlying business operating
        performance.
    --  Funded debt is all interest bearing debt, which includes bank
        loans, bankers' acceptances and long-term debt.
    --  Net funded debt is calculated as funded debt less cash and cash
        equivalents.
    --  Total capital is calculated as funded debt plus shareholders'
        equity, net of non-controlling interest.
    --  Net total capital is total capital less cash and cash
        equivalents.
    --  Funded debt to EBITDA ratio is funded debt divided by trailing
        four-quarter EBITDA.
    --  EBITDA to interest expense ratio is trailing four-quarter
        EBITDA divided by trailing four-quarter interest expense.
    --  Funded debt to total capital ratio is funded debt divided by
        total capital.
    --  Net funded debt to net total capital ratio is net funded debt
        divided by net total capital.
    --  Book value per common share is shareholders' equity, net of
        non-controlling interest, divided by total common shares
        outstanding.
    --  Current assets to current liabilities ratio is current assets
        divided by current liabilities.
    --  Free cash flow is calculated as cash flow from operating
        activities, plus proceeds on disposal of property, equipment
        and investment property, less property, equipment and
        investment property purchases.

CONFERENCE CALL INFORMATION

The Company will hold an analyst call on Thursday, December 12, 2013 beginning 
at 2:30 p.m. (Eastern Standard Time) during which senior management will 
discuss the Company's financial results for the second quarter ended November 
2, 2013.To join this conference call, dial (888) 231-8191 outside the 
Toronto area or (647) 427-7450 from within the Toronto area. To secure a line, 
please call 10 minutes prior to the conference call; you will be placed on 
hold until the conference call begins.The media and investing public may 
access this conference call via a listen mode only. You may also listen to a 
live audiocast of the conference call by visiting the Company's website 
located at www.empireco.ca.

Replay will be available by dialing (855) 859-2056 and entering passcode 
18464086 until midnight December 19, 2013, or on the Company's website for 90 
days following the conference call.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

To view and download the Company's unaudited condensed consolidated financial 
statements for the second quarter of fiscal 2014 ended November 2, 2013, 
please access the following link:

Q2 Fiscal 2014 Unaudited Condensed Consolidated Financial Statements

This information is also available for download at www.sedar.com or by 
accessing the Investor Centre section of the Company's website at 
www.empireco.ca.

ABOUT EMPIRE

Empire Company Limited (TSX: EMP.A) is a Canadian company headquartered in 
Stellarton, Nova Scotia. Empire's key businesses include food retailing and 
related real estate.With over $17 billion in annual sales and approximately 
$10.3 billion in assets, Empire and its subsidiaries, including franchisees 
and affiliates, employ more than 124,000 people.

Additional financial information relating to Empire, including the Company's 
Annual Information Form, can be found on the Company's website at 
www.empireco.ca or at www.sedar.com.











SOURCE  Empire Company Limited 
Paul V. Beesley Executive Vice President and Chief Financial Officer (902) 
755-4440  
PDF available at:  
http://stream1.newswire.ca/media/2013/12/12/20131212_C8884_DOC_EN_34883.pdf 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/December2013/12/c8884.html 
CO: Empire Company Limited
ST: Nova Scotia
NI: FIN FBR FOD REL ERN DIV CONF  
-0- Dec/12/2013 14:35 GMT
 
 
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