TORONTO, Feb. 27, 2014 /CNW/ - Leon's Furniture Limited is pleased to announce its results for the full year 2013 and the fourth quarter 2013 including the results of The Brick Limited from March 28, 2013. For the year ended December 31, 2013, total system wide sales were $2,039,428,000 including $344,785,000 franchise sales ($880,240,000 including $198,077,000 franchise sales in 2012). Same store sales were down 1.6% from the prior year. Net income was $67,183,000, $0.95 per common share ($46,782,000, $0.67 per common share in 2012), an increase of 41.8% per share.
For the three months ended December 31, 2013, total system wide sales were $633,871,000, including $110,846,000 of franchise sales ($248,187,000 including $59,725,000 of franchise sales in 2012). Same store corporate sales were down 2.1% from the comparable quarter. Net income was $ 26,034,000, $0.37 per common share ($16,121,000, $0.23 per common share in 2012), an increase of 60.9% per share. The sales and income increase in the fourth quarter and year 2013 when compared to the prior fourth quarter and year 2012, were mainly a result of the inclusion of the operating results of The Brick Limited since March 28, 2013.
While the businesses of Leon's and The Brick continue to operate under their separate banners, the management teams are working closely together to leverage the best practices of each for the benefit of the entire Company. We are pleased with the progress of the integration and our financial results since the acquisition of The Brick Limited. At the same time we continue to identify numerous opportunities that we believe will benefit both our customers and shareholders going forward.
The Directors are pleased to declare a quarterly dividend of 10¢ per common share, payable on April 7, 2014 to the shareholders of record at the close of business on March 7, 2014. 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 | |||
| 2013 | - - | Basic Fully Diluted | 8¢ 7¢ | 20¢ 19¢ | 30¢ 27¢ | 37¢ 33¢ | $0.95 $0.87 |
| 2012 | - - | Basic Fully Diluted | 12¢ 12¢ | 13¢ 12¢ | 19¢ 18¢ | 23¢ 22¢ | $0.67 $0.65 |
| 2011 | - - | Basic Fully Diluted | 15¢ 14¢ | 16¢ 15¢ | 22¢ 21¢ | 28¢ 27¢ | $0.81 $0.78 |
LEON'S FURNITURE LIMITED / MEUBLES LEON LTÉE
Mark J. Leon
Chairman of the Board
| Leon's Furniture Limited CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) | ||
| As at December 31 | As at December 31 | |
| ($ in thousands) | 2013 | 2012 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 5,832 | 74,949 |
| Restricted marketable securities | 20,104 | 20,980 |
| Available-for-sale financial assets | 17,336 | 125,755 |
| Trade receivables | 104,275 | 27,961 |
| Income taxes receivable | - | 3,644 |
| Inventories | 277,656 | 86,057 |
| Deferred acquisition costs | 1,659 | 1,271 |
| Deferred financing costs | 903 | 1,317 |
| Total current assets | 427,766 | 341,934 |
| Other assets | 4,970 | 761 |
| Deferred acquisition costs | 7,250 | 1,525 |
| Property, plant and equipment | 433,586 | 218,146 |
| Investment properties | 22,304 | 8,315 |
| Intangible assets | 337,221 | 3,101 |
| Goodwill | 440,044 | 11,282 |
| Deferred income tax assets | 7,444 | 3,114 |
| Total assets | 1,680,585 | 588,178 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities | ||
| Trade and other payables | 202,618 | 73,542 |
| Provisions | 4,769 | |
| Income taxes payable | 12,135 | - |
| Customers' deposits | 93,609 | 20,386 |
| Finance lease liability | 4,302 | - |
| Dividends payable | 7,063 | 7,055 |
| Deferred warranty plan revenue | 54,028 | 14,743 |
| Debentures | 15,503 | - |
| Loans and borrowings | 50,000 | - |
| Total current liabilities | 444,027 | 115,726 |
| Loans and borrowings | 325,255 | - |
| Convertible debentures | 90,952 | - |
| Finance lease liability | 137,887 | - |
| Deferred warranty plan revenue | 85,494 | 17,251 |
| Redeemable share liability | 859 | 428 |
| Deferred rent liabilities and lease inducements | 2,377 | - |
| Deferred income tax liabilities | 97,178 | 2,586 |
| Total liabilities | 1,184,030 | 135,991 |
| Shareholders' equity attributable to the shareholders of the Company | ||
| Common shares | 27,352 | 26,693 |
| Equity component of convertible debentures | 7,089 | - |
| Retained earnings | 462,035 | 423,099 |
| Accumulated other comprehensive income | 79 | 2,395 |
| Total shareholders' equity | 496,555 | 452,187 |
| Total liabilities and shareholders' equity | 1,680,585 | 588,178 |
| Leon's Furniture Limited CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||
| Three months ended December 31 | Years ended December 31 | |||
| ($ in thousands) | 2013 | 2012 | 2013 | 2012 |
| Revenue | 523,025 | 188,462 | 1,694,643 | 682,163 |
| Cost of sales | 289,244 | 106,625 | 959,307 | 398,704 |
| Gross profit | 233,781 | 81,837 | 735,336 | 283,459 |
| Operating expenses | ||||
| General and administrative expenses | 81,543 | 27,278 | 267,741 | 99,346 |
| Sales and marketing expenses | 66,979 | 22,422 | 213,562 | 83,479 |
| Occupancy expenses | 37,806 | 8,762 | 127,985 | 34,289 |
| Other operating expenses | 4,782 | 2,539 | 14,562 | 6,523 |
| Total operating expenses | 191,110 | 61,001 | 623,850 | 223,637 |
| Operating profit | 42,671 | 20,836 | 111,486 | 59,822 |
| Finance costs | (7,483) | - | (22,424) | - |
| Finance income | 868 | 1,253 | 2,494 | 3,861 |
| Net income before income tax | 36,056 | 22,089 | 91,556 | 63,683 |
| Income tax expense | 10,022 | 5,968 | 24,373 | 16,901 |
| Net income | 26,034 | 16,121 | 67,183 | 46,782 |
| Earnings per share | ||||
| Basic | $ 0.37 | $ 0.23 | $ 0.95 | $ 0.67 |
| Diluted | $ 0.33 | $ 0.22 | $ 0.87 | $ 0.65 |
| Weighted average number of common shares outstanding | ||||
| Basic | 70,626,561 | 70,312,354 | 70,612,407 | 70,032,721 |
| Diluted | 81,664,033 | 72,351,313 | 79,818,914 | 72,317,598 |
| Leon's Furniture Limited CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) | ||||
| Three months ended December 31 | ||||
| Net of tax | ||||
| ($ in thousands) | 2013 | Tax effect | 2013 | |
| Net income for the period | 26,034 | - | 26,034 | |
| Other comprehensive income, net of tax | ||||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods: | ||||
| Unrealized gains on available-for-sale financial assets arising during the period | 509 | 115 | 394 | |
| Reclassification adjustment for net losses included in profit for the period | (245) | (64) | (181) | |
| Change in unrealized gains on available-for-sale financial | ||||
| assets arising during the period | 265 | 52 | 213 | |
| Comprehensive income for the period | 26,299 | 52 | 26,247 | |
| Net of tax | ||||
| 2012 | Tax effect | 2012 | ||
| Net income for the period | 16,121 | - | 16,121 | |
| Other comprehensive income, net of tax | ||||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods: | ||||
| Unrealized gains on available-for-sale financial assets arising during the period | 748 | 97 | 651 | |
| Reclassification adjustment for net losses included in profit for the period | (61) | (8) | (53) | |
| Change in unrealized gains on available-for-sale financial | ||||
| assets arising during the period | 687 | 89 | 598 | |
| Comprehensive income for the period | 16,808 | 89 | 16,719 | |
| Year ended December 31 | ||||
| Net of tax | ||||
| ($ in thousands) | 2013 | Tax effect | 2013 | |
| Net income for the year | 67,183 | - | 67,183 | |
| Other comprehensive income, net of tax | ||||
| Other comprehensive income to be reclassified to profit or loss in subsequent years: | ||||
| Unrealized gains on available-for-sale financial assets arising during the year | 276 | 44 | 232 | |
| Reclassification adjustment for net losses included in profit for the year | (2,998) | (450) | (2,548) | |
| Change in unrealized losses on available-for-sale financial | ||||
| assets arising during the year | (2,722) | (406) | (2,316) | |
| Comprehensive income for the year | 64,461 | (406) | 64,867 | |
| Net of tax | ||||
| 2012 | Tax effect | 2012 | ||
| Net income for the year | 46,782 | - | 46,782 | |
| Other comprehensive income, net of tax | ||||
| Other comprehensive income to be reclassified to profit or loss in subsequent years: | ||||
| Unrealized gains on available-for-sale financial assets arising during the year | 3,183 | 414 | 2,769 | |
| Reclassification adjustment for net losses included in profit for the year | (311) | (41) | (270) | |
| Change in unrealized gains on available-for-sale financial | ||||
| assets arising during the year | 2,872 | 373 | 2,499 | |
| Comprehensive income for the year | 49,654 | 373 | 49,281 | |
| Leon's Furniture Limited CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) | |||||
| ($ in thousands) | Equity component of convertible debenture | Common shares | Accumulated other comprehensive income (loss) | Retained earnings | Total |
| As at December 31, 2011 | - | 20,918 | (104) | 404,647 | 425,461 |
| Comprehensive income | |||||
| Net income for the year | - | - | - | 46,782 | 46,782 |
| Change in unrealized gains on available-for-sale | - | - | 2,499 | - | 2,499 |
| financial assets arising during the year | |||||
| Total comprehensive income | - | - | 2,499 | 46,782 | 49,281 |
| Transactions with shareholders | |||||
| Dividends declared | - | - | - | (28,047) | (28,047) |
| Management share purchase plan | - | 5,778 | - | - | 5,778 |
| Repurchase of common shares | - | (3) | - | (283) | (286) |
| Total transactions with shareholders | - | 5,775 | - | (28,330) | (22,555) |
| As at December 31, 2012 | - | 26,693 | 2,395 | 423,099 | 452,187 |
| As at December 31, 2012 | - | 26,693 | 2,395 | 423,099 | 452,187 |
| Comprehensive income | |||||
| Net income for the year | - | - | - | 67,183 | 67,183 |
| Change in unrealized losses on available-for-sale | - | - | (2,316) | - | (2,316) |
| financial assets arising during the year | |||||
| Total comprehensive income | - | - | (2,316) | 67,183 | 64,867 |
| Transactions with shareholders | |||||
| Dividends declared | - | - | - | (28,247) | (28,247) |
| Issuance of equity component of convertible debt | 7,089 | - | - | - | 7,089 |
| Management share purchase plan | - | 659 | - | - | 659 |
| Repurchase of common shares [note 12] | - | - | - | - | - |
| Total transactions with shareholders | 7,089 | 659 | - | (28,247) | (20,499) |
| As at December 31, 2013 | 7,089 | 27,352 | 79 | 462,035 | 496,555 |
| Leon's Furniture Limited CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||
| Year ended December 31 | |||
| ($ in thousands) | 2013 | 2012 | |
| OPERATING ACTIVITIES | |||
| Net income for the year | 67,183 | 46,782 | |
| Add (deduct) items not involving an outlay of cash | |||
| Depreciation of property, plant and equipment and investment properties | 33,319 | 14,020 | |
| Amortization of intangible assets | 5,630 | 866 | |
| Amortization of deferred warranty plan revenue | (60,664) | (16,543) | |
| Net finance costs | 19,930 | - | |
| Deferred income taxes | (1,273) | 543 | |
| Gain on sale of property, plant and equipment | (32) | (15) | |
| (Gain) loss on sale of available-for-sale financial assets | (5,462) | 121 | |
| Cash paid for deferred financing costs | - | (1,317) | |
| 58,631 | 44,457 | ||
| Net change in non-cash working capital balances related | |||
| to operations | (39,363) | (9,493) | |
| Cash received on warranty plan sales | 63,852 | 12,940 | |
| Cash provided by operating activities | 83,120 | 47,904 | |
| INVESTING ACTIVITIES | |||
| Purchase of property, plant and equipment | (18,984) | (17,897) | |
| Purchase of intangible assets | (6,669) | (9) | |
| Proceeds on sale of property, plant and equipment | 134 | 23 | |
| Purchase of available-for-sale financial assets | (109,674) | (467,939) | |
| Proceeds on sale of available-for-sale financial assets | 235,260 | 473,273 | |
| Interest received | 2,494 | - | |
| Purchase of The Brick, net of cash acquired $31,069 | (654,954) | - | |
| Cash used in investing activities | (552,393) | (12,549) | |
| FINANCING ACTIVITIES | |||
| Repayment of finance leases | (2,613) | - | |
| Dividends paid | (28,239) | (38,449) | |
| Repurchase of common shares | - | (286) | |
| Repayment of employee loans-redeemable shares | 1,090 | 5,824 | |
| Issuance of term loan | 400,000 | - | |
| Issuance of convertible debentures | 100,000 | - | |
| Finance costs paid | (4,693) | - | |
| Repayment of debentures | (19,616) | - | |
| Repayment of term loan | (20,000) | - | |
| Interest paid | (25,773) | - | |
| Cash provided by (used in) financing activities | 400,156 | (32,911) | |
| Net (decrease) increase in cash and cash equivalents | |||
| during the year | (69,117) | 2,444 | |
| Cash and cash equivalents, beginning of year | 74,949 | 72,505 | |
| Cash and cash equivalents, end of year | 5,832 | 74,949 | |
SOURCE Leon's Furniture Limited
Dominic Scarangella, Tel: 416.243.4073
Copyright CNW Group 2014