Feb. 17, 2011 (Canada NewsWire Group) --
TORONTO, Feb. 17 /CNW/ - Leon's Furniture Limited is pleased to announce its results for the full year 2010 and the fourth quarter 2010. For the year ended December 31, 2010, total Leon's sales were $896,834,000 including $197,062,000 franchise sales ($897,470,000 including $194,290,000 franchise sales in 2009). Net income was $63,284,000, $0.90 per common share ($56,864,000, $0.80 per common share in 2009), an increase of 12.5% per share. Same store corporate sales were down 1.1% from the prior year.
For the three months ended December 31, 2010, total Leon's sales were $254,517,000 including $59,820,000 of franchise sales ($255,665,000 including $57,679,000 of franchise sales in 2009), a decrease of 0.4%. Same store corporate sales were down 2.9% from the prior year fourth quarter. Net income was $21,360,000, $0.30 per common share ($24,030,000, $0.34 per common share in 2009), a decrease of 11.1% per share.
Although sales were flat compared to the prior year, we are very pleased with the profit improvements this year. We thank our Associates for all their efforts this year in improving our productivity and reducing overall expenditures which in turn helped improve profitability in 2010.
During the year 2010, the Corporation opened a new corporate store in Thunder Bay, Ontario, and welcomed new Leon's franchises in Collingwood, Ontario and Fort Frances, Ontario. Construction has begun on a new warehouse and showroom in Regina, Saskatchewan. In addition, leasing documentation was signed for new corporate stores to be located in Guelph, Ontario; Rosèmere, Quebec; and Mississauga, Ontario. We anticipate the opening of these showrooms in the fall of 2011. Given the success of our 100th Anniversary program in 2009, the Corporation continued its donations to hospitals and charities in communities where Leon's corporate stores are located.
The Directors are pleased to declare a quarterly dividend of 9¢ per common share, payable on April 4, 2011 to the shareholders of record at the close of business on March 4, 2011. Dividends paid by Leon's Furniture Limited are "eligible dividends" pursuant to the changes to the Income Tax Act under Bill C-28, Canada.
EARNINGS PER SHARE FOR EACH QUARTER
| MARCH 31 | JUNE 30 | SEPT. 30 | DEC. 31 | YEAR TOTAL | |||
| 2010 | - - | Basic Fully Diluted | 17¢ 17¢ | 17¢ 16¢ | 26¢ 25¢ | 30¢ 29¢ | $0.90 $0.87 |
| 2009 | - - | Basic Fully Diluted | 12¢ 12¢ | 12¢ 12¢ | 22¢ 21¢ | 34¢ 33¢ | $0.80 $0.78 |
| 2008 | - - | Basic Fully Diluted | 16¢ 15¢ | 16¢ 16¢ | 25¢ 24¢ | 33¢ 32¢ | $0.90 $0.87 |
LEON'S FURNITURE LIMITED / MEUBLES LEON LTÉE
Mark J. Leon
Chairman of the Board
| Leon's Furniture Limited / Meubles Leon Ltée | |||
| Incorporated under the laws of Ontario | |||
| CONSOLIDATED BALANCE SHEETS | |||
| (UNAUDITED) | |||
| As at December 31 | As at December 31 | ||
| ($ in thousands) | 2010 | 2009 | |
| ASSETS | |||
| Current | |||
| Cash and cash equivalents | 71,589 | 58,301 | |
| Marketable securities | 120,726 | 94,337 | |
| Restricted marketable securities | 19,498 | 18,088 | |
| Accounts receivable | 28,569 | 31,501 | |
| Inventory | 85,423 | 83,957 | |
| Future tax assets | 1,251 | 1,133 | |
| Total current assets | 327,056 | 287,317 | |
| Prepaid expenses | 1,574 | 1,560 | |
| Goodwill | 11,282 | 11,282 | |
| Intangibles | 4,902 | 5,334 | |
| Future tax assets | 11,951 | 11,465 | |
| Property, plant & equipment net | 209,909 | 212,198 | |
| 566,674 | 529,156 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||
| Current | |||
| Accounts payable and accrued liabilities | 84,065 | 83,880 | |
| Income taxes payable | 524 | 1,958 | |
| Customers' deposits | 17,198 | 15,632 | |
| Dividends payable | 6,310 | 4,938 | |
| Deferred warranty plan revenue | 16,882 | 16,150 | |
| Total current liabilities | 124,979 | 122,558 | |
| Deferred warranty plan revenue | 21,392 | 22,248 | |
| Redeemable share liability | 172 | 383 | |
| Future tax liabilities | 9,845 | 8,829 | |
| Total liabilities | 156,388 | 154,018 | |
| Shareholders' equity | |||
| Common shares | 19,177 | 17,704 | |
| Retained earnings | 390,629 | 357,576 | |
| Accumulated other comprehensive income | 480 | (142) | |
| Total shareholders' equity | 410,286 | 375,138 | |
| 566,674 | 529,156 | ||
| Leon's Furniture Limited / Meubles Leon Ltée | |||||
| CONSOLIDATED STATEMENTS OF INCOME AND | |||||
| RETAINED EARNINGS | |||||
| (UNAUDITED) | |||||
| Period ended December 31st | |||||
| ($ in thousands) | 3 months ended | 12 months ended | |||
| 2010 | 2009 | 2010 | 2009 | ||
| Sales | 194,697 | 197,986 | 699,772 | 703,180 | |
| Cost of sales | 112,130 | 111,735 | 412,379 | 419,819 | |
| Gross profit | 82,567 | 86,251 | 287,393 | 283,361 | |
| Operating expenses (income) | |||||
| Salaries and commissions | 27,174 | 26,166 | 105,368 | 103,977 | |
| Advertising | 9,843 | 9,140 | 31,565 | 34,732 | |
| Rent and property taxes | 3,538 | 3,183 | 14,000 | 12,165 | |
| Amortization | 4,160 | 4,154 | 16,156 | 16,562 | |
| Employee profit-sharing plan | 1,275 | 1,350 | 4,746 | 4,177 | |
| Other operating expenses | 11,008 | 11,553 | 41,495 | 42,359 | |
| Interest income | (991) | (796) | (3,134) | (3,165) | |
| Other income | (3,676) | (2,871) | (11,757) | (9,980) | |
| 52,331 | 51,879 | 198,439 | 200,827 | ||
| Income before gain on sale of capital property and income taxes | 30,236 | 34,372 | 88,954 | 82,534 | |
| Gain on sale of capital property | - | - | 1,231 | - | |
| Income before income taxes | 30,236 | 34,372 | 90,185 | 82,534 | |
| Provision for income taxes | 8,876 | 10,342 | 26,901 | 25,670 | |
| Net income for the period | 21,360 | 24,030 | - | 63,284 | 56,864 |
| Retained earnings, beginning of the period | 377,319 | 355,519 | 357,576 | 338,960 | |
| Dividends declared | (6,310) | (19,094) | (22,492) | (33,951) | |
| Excess of cost of share repurchase over carrying value of related shares | (1,740) | (2,879) | (7,739) | (4,297) | |
| Retained earnings, end of period | 390,629 | 357,576 | 390,629 | 357,576 | |
| Weighted average number of common shares outstanding ('000's) | |||||
| Basic | 70,126 | 70,682 | 70,372 | 70,714 | |
| Diluted | 72,781 | 73,399 | 73,134 | 73,321 | |
| Earnings per share | |||||
| Basic | $0.30 | $0.34 | $0.90 | $0.80 | |
| Diluted | $0.29 | $0.33 | $0.87 | $0.78 | |
| Dividends declared per share | |||||
| Common | $0.09 | $0.27 | $0.32 | $0.48 | |
| Convertible, non-voting | $0.18 | $0.14 | $0.18 | $0.14 | |
| Leon's Furniture Limited / Meubles Leon Ltée | ||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
| (UNAUDITED) | ||||
| Period ended December 31st | ||||
| ($ in thousands) | 3 months ended | 12 months ended | ||
| 2010 | 2009 | 2010 | 2009 | |
| OPERATING ACTIVITIES | ||||
| Net income for the period | 21,360 | 24,030 | 63,284 | 56,864 |
| Add (deduct) items not involving a current cash payment | ||||
| Amortization of property, plant & equipment | 3,935 | 3,935 | 15,354 | 15,810 |
| Amortization of intangible assets | 225 | 219 | 802 | 752 |
| Amortization of deferred warranty revenue | (4,346) | (3,951) | (16,838) | (15,900) |
| Loss (gain) on sale of marketable securities | (181) | (229) | (337) | 275 |
| Future tax expense | (653) | (2,087) | 295 | (1,608) |
| Loss (gain) on sale of property, plant & equipment | 2 | 1 | (1,236) | (32) |
| Cash received on warranty sales | 4,635 | 5,009 | 16,714 | 17,319 |
| 24,977 | 26,927 | 78,038 | 73,480 | |
| Net change in non-cash working capital balances related to operations | 17,656 | 21,517 | 1,391 | 4,035 |
| Cash provided by operating activities | 42,633 | 48,444 | 79,429 | 77,515 |
| INVESTING ACTIVITIES | ||||
| Purchase of property, plant & equipment | (5,502) | (1,480) | (13,568) | (10,545) |
| Purchase of intangibles | (108) | (330) | (370) | (685) |
| Proceeds on sale of property, plant & equipment | 4 | - | 2,117 | 48 |
| Purchase of marketable securities | (153,391) | 80,882 | (524,414) | (285,311) |
| Proceeds on sale of marketable securities | 140,551 | (92,262) | 497,691 | 274,749 |
| Issuance of series 2009 redeemable share liability | - | - | - | 10,683 |
| Decrease(increase) in employee share purchase loans | 461 | 217 | 1,556 | (9,154) |
| Cash used in investing activities | (17,985) | (12,973) | (36,988) | (20,215) |
| FINANCING ACTIVITIES | ||||
| Dividends paid | (6,309) | (19,111) | (21,120) | (33,965) |
| Repurchase of common shares | (1,800) | (3,023) | (8,033) | (4,517) |
| Cash used in financing activities | (8,109) | (22,134) | (29,153) | (38,482) |
| Net increase in cash and cash equivalents during the period | 16,539 | 13,337 | 13,288 | 18,818 |
| Cash and cash equivalents, beginning of period | 55,050 | 44,964 | 58,301 | 39,483 |
| Cash and cash equivalents,end of period | 71,589 | 58,301 | 71,589 | 58,301 |
| Leon's Furniture Limited / Meubles Leon Ltée | |||
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||
| (UNAUDITED) | |||
| Three month period ended December 31st | |||
| ($ in thousands) | |||
| Net of tax | |||
| 2010 | Tax effect | 2010 | |
| Net income for the period | 21,360 | - | 21,360 |
| Other comprehensive income, net of tax | |||
| Unrealized gains on available-for-sale financial assets arising during the period | 160 | 23 | 137 |
| Reclassification adjustment for net gains and (losses) included in net income | (168) | (25) | (143) |
| Change in unrealized (losses) on available-for-sale financial | |||
| assets arising during the period | (8) | (2) | (6) |
| Comprehensive income for the period | 21,352 | (2) | 21,354 |
| Net of tax | |||
| 2009 | Tax effect | 2009 | |
| Net income for the period | 24,030 | - | 24,030 |
| Other comprehensive income, net of tax | |||
| Unrealized gains on available-for-sale financial assets arising during the period | 268 | 45 | 223 |
| Reclassification adjustment for net gains and (losses) included in net income | (247) | (39) | (208) |
| Change in unrealized gains on available-for-sale financial | |||
| assets arising during the period | 21 | 6 | 15 |
| Comprehensive income for the period | 24,051 | 6 | 24,045 |
| Twelve month period ended December 31st | |||
| ($ in thousands) | |||
| Net of tax | |||
| 2010 | Tax effect | 2010 | |
| Net income for the period | 63,284 | 63,284 | |
| Other comprehensive income, net of tax | |||
| Unrealized gains on available-for-sale financial assets arising during the period | 917 | 144 | 773 |
| Reclassification adjustment for net gains and (losses) included in net income | (178) | (27) | (151) |
| Change in unrealized gains on available-for-sale financial | |||
| assets arising during the period | 739 | 117 | 622 |
| Comprehensive income for the period | 64,023 | 117 | 63,906 |
| Net of tax | |||
| 2009 | Tax effect | 2009 | |
| Net income for the period | 56,864 | - | 56,864 |
| Other comprehensive income, net of tax | |||
| Unrealized gains on available-for-sale financial assets arising during the period | 2,578 | 430 | 2,148 |
| Reclassification adjustment for net gains and (losses) included in net income | (232) | (37) | (195) |
| Change in unrealized gains on available-for-sale financial | |||
| assets arising during the period | 2,346 | 393 | 1,953 |
| Comprehensive income for the period | 59,210 | 393 | 58,817 |
Dominic Scarangella, Tel: (416) 243-4073