52 weeks ended
Sales for fiscal 2022 increased by
Gross profit for fiscal 2022 increased
Results from operating activities from continuing operations for fiscal 2022 were earnings of
Net earnings from continuing operations for fiscal 2022 was
Adjusted EBITDA1 from continuing operations for fiscal 2022 was
The Company, as part of its restructuring plan, closed the Thyme Maternity and Addition Elle banners during fiscal 2021 (see section entitled "Discontinued Operations"). Net earnings from discontinued operations for fiscal 2022 was
13 weeks ended
Sales for the fourth quarter of 2022 increased by
Gross profit for the fourth quarter of 2022 increased
Results from operating activities from continuing operations for the fourth quarter of 2022 were earnings of
Net earnings from continuing operations for the fourth quarter of 2022 was
Adjusted EBITDA1 from continuing operations for the fourth quarter of 2022 was
As highlighted in the section entitled "Discontinued Operations", the Company, as part of its restructuring plan, closed the Thyme Maternity and Addition Elle banners in fiscal 2021. The discontinued banners were not in operation during the fourth quarter of 2022 or the fourth quarter of 2021.
COVID-19
The COVID-19 pandemic had significant impacts on the Company's results.
During fiscal 2021, all of the Company's stores were closed for 55 consecutive days from the start of the "first wave" of governmental lockdowns. During the second quarter of 2021, the Company had a phased reopening of its stores and by the end of
At the beginning of fiscal 2022, the Company had 240 out of its 415 stores (58% of its store network) closed as a consequence of governmental lockdown directives. This partial lockdown of the Company's retail store network continued into the first quarter of 2022. Even though restrictions were relaxed and some stores reopened, in
During partial or full lockdowns, the Company continued to fulfill e-commerce orders though sales were not sufficient to offset the lost sales due to the closures. In
During fiscal 2022, the Company's measures to protect its financial situation continued to include furloughing retail sales associates during temporary store closures and obtaining financial assistance from federal programs, such as the CEWS, the CERS and the THRP, under which the subsidies were consolidated starting from
The extent to which COVID-19 and its variants will continue to impact the Company's business, including its supply chain, consumer shopping behavior and consumer demand, including online shopping, will depend on future developments, which are highly uncertain and cannot be predicted at this time. These future developments include emergence of new variants of COVID-19 resulting in a resurgence of positive COVID-19 cases, vaccination rates amongst the Canadian population and other measures taken by various government authorities to contain the virus and its variants spread for potential future waves as well as future customer shopping behavior including online sales. As the Company navigates through the challenges caused by COVID-19 and its variants, its focus is to adapt to customers' changing product preferences, closely monitor its cash position and control its spending, while managing its inventory levels in line with the change in demand behavior since COVID-19 started. Current financial information may not necessarily be indicative of future operating results.
Other Key Company Updates
During fiscal 2021, specifically on
Discontinued Operations
During fiscal 2021, as part of its restructuring plan, the Company closed the Thyme Maternity and Addition Elle banners which resulted in the termination of approximately 1,600 employees in its retail locations and head office and, as a result, these results and cash flows have been classified as discontinued operations. Discontinued operations are excluded from the net earnings (loss) from continuing operations and are presented as earnings (loss) from discontinued operations, net of tax, as a separate line item in the consolidated statements of earnings (loss).
About
The Company is a leading women's specialty apparel retailer with retail outlets throughout Canada. As at
1Non-GAAP Financial Measures
This press announcement makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. They are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for the Company's analysis of its financial information reported under IFRS.
Financial Measures
This press announcement discusses adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") and is considered a non-GAAP financial measure. This press announcement also indicates Adjusted EBITDA as a percentage of sales and is considered a non-GAAP financial ratio. Adjusted EBITDA is defined as net earnings (loss) before income tax expense/recovery, interest income, interest expense, depreciation, amortization, impairment of non-financial assets, restructuring costs and recoveries and gain on settlement of liabilities subject to compromise. With the classification of the Addition Elle and Thyme Maternity businesses as discontinued operations, Adjusted EBITDA is presented excluding discontinued operations. The intent of Adjusted EBITDA is to provide additional useful information to investors and analysts. Management believes that Adjusted EBITDA is an important indicator of the Company's ability to generate liquidity through operating cash flow to fund working capital needs and fund capital expenditures and uses the metric for this purpose. Management believes that Adjusted EBITDA as a percentage of sales indicates how much liquidity is generated for each dollar of sales. The exclusion of interest income and expenses eliminate the impact on earnings derived from non-operational activities. The exclusion of depreciation, amortization and impairment charges eliminates the non-cash impact, and the exclusion of restructuring items, gain on settlement of liabilities subject to compromise and discontinued operations presents the results of the on-going business.
The following table reconciles net earnings (loss) from continuing operations to Adjusted EBITDA from continuing operations:
For the fourth quarter of | For fiscal | |||
2022 | 2021 | 2022 | 2021 | |
Net earnings (loss) from continuing operations | $ 97.2 | $ (10.9) | $ 143.2 | $ (100.0) |
Depreciation and amortization | 11.3 | 14.0 | 47.6 | 64.01 |
Impairment of non-financial assets | 2.2 | 3.4 | 1.6 | 16.5 |
Interest income | (0.1) | (0.1) | (0.4) | (0.4) |
Interest expense on lease liabilities | 1.0 | 1.4 | 4.0 | 5.7 |
Income tax (recovery) expense | - | (0.5) | (0.4) | 0.2 |
Restructuring | 0.5 | (4.5)2 | (12.2) | 20.62 |
Gain on settlement of liabilities subject to compromise | (88.6) | - | (88.6) | - |
Adjusted EBITDA from continuing operations |
$ 23.5 |
$ 2.8 |
$ 94.8 |
$ 6.6 |
Adjusted EBITDA from continuing operations as % of Sales |
12.4% |
1.9% |
14.3% |
1.2% |
1 | Depreciation and amortization has been increased by |
2 | In order to conform to the fiscal 2022 presentation, comparative figures have been decreased by |
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, including statements regarding the impact of COVID-19 on the Company's business, financial position and operations, and are based on several assumptions which give rise to the possibility that actual results could differ materially from the Company's expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. Consequently, the Company cannot guarantee that any forward-looking statement will materialize, or if any of them do, what benefits the Company will derive from them. Forward-looking statements are provided in this press announcement for the purpose of giving information about management's current expectations and plans as of the date of this press announcement, and allowing investors and others to get a better understanding of the Company's operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose. Forward-looking statements are based upon the Company's current estimates, beliefs and assumptions, which are based on management's perception of historical trends, current conditions and currently expected future developments, as well as other factors it believes, are appropriate in the circumstances.
This press announcement contains forward-looking statements about the Company's objectives, plans, goals, expectations, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects, opportunities and legal and regulatory matters. Specific forward-looking statements in this press announcement include, but are not limited to, statements with respect to the Company's belief in its strategies and its brands and their capacity to generate long-term profitable growth, future liquidity, planned capital expenditures, amount of pension plan contributions, status and impact of systems implementation, the ability of the Company to successfully implement its strategic initiatives and cost reduction and productivity improvement initiatives as well as the impact of such initiatives. These specific forward-looking statements are contained throughout the Company's Management Discussion & Analysis ("MD&A") including those listed in the "Operating Risk Management" and "Financial Risk Management" sections of the MD&A. Forward-looking statements are typically identified by words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "strive", "will", "may" and "should" and similar expressions, as they relate to the Company and its management.
Numerous risks and uncertainties could cause the Company's actual results to differ materially from those expressed, implied or projected in the forward-looking statements. Please refer to the "Forward-Looking Statements" section of the Company's MD&A for fiscal 2022.
This is not an exhaustive list of the factors that may affect the Company's forward-looking statements. Other risks and uncertainties not presently known to the Company or that the Company presently believes are not material could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time. The reader should not place undue reliance on any 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 complete financial statements including notes and Management's Discussion and Analysis for fiscal 2022 are available online at www.sedar.com.
President and Chief Executive Officer
Telephone: (514) 384-1140
Corporate Website: www.reitmanscanadalimited.com
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) (Unaudited) (in thousands of Canadian dollars except per share amounts)
| ||||||
For the 13 weeks ended | For the 52 weeks ended | |||||
Sales | ||||||
Cost of goods sold | 94,013 | 79,792 | 308,787 | 287,108 | ||
Gross profit | 96,207 | 64,895 | 353,165 | 246,254 | ||
Selling and distribution expenses | 75,503 | 70,380 | 272,453 | 284,803 | ||
Administrative expenses | 10,455 | 7,451 | 36,817 | 32,342 | ||
Impairment of non-financial assets | 2,239 | 3,421 | 1,611 | 16,524 | ||
Restructuring | 477 | (4,554) | (12,249) | 20,583 | ||
Gain on settlement of liabilities subject to compromise | (88,613) | - | (88,613) | - | ||
Results from operating activities | 96,146 | (11,803) | 143,146 | (107,998) | ||
Finance income | 2,149 | 1,785 | 3,725 | 13,897 | ||
Finance costs | 1,011 | 1,371 | 4,067 | 5,744 | ||
Earnings (loss) before income taxes | 97,284 | (11,389) | 142,804 | (99,845) | ||
Income tax (recovery) expense | (32) | (469) | (420) | 191 | ||
Earnings (loss) from continuing operations | 97,316 | (10,920) | 143,224 | (100,036) | ||
Earnings (loss) from discontinued operations, net of tax | - | - | 15,032 | (72,181) | ||
Net earnings (loss) | $ 97,316 | |||||
Earnings (loss) per share: | ||||||
Basic | $ 1.99 | $ (0.22) | $ 3.24 | $ (3.52) | ||
Diluted | 1.99 | (0.22) | 3.24 | (3.52) | ||
Earnings (loss) per share from continuing operations: | ||||||
Basic | $ 1.99 | $ (0.22) | $ 2.93 | $ (2.05) | ||
Diluted | 1.99 | (0.22) | 2.93 | (2.05) | ||
(1) Comparative figures have been restated to correctly present depreciation and amortization recognized in selling and distribution expenses, impairment of non-financial assets and restructuring. |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (in thousands of Canadian dollars) | ||||||
For the 13 weeks ended | For the 52 weeks ended | |||||
Net earnings (loss) | $ 97,316 | $ (10,920) | $ 158,256 | |||
Other comprehensive income (loss) | ||||||
Items that are or may be reclassified subsequently to net earnings: | ||||||
Cash flow hedges (net of tax of | - | - | - | (754) | ||
Foreign currency translation differences | (151) | 180 | 1 | 127 | ||
(151) | 180 | 1 | (627) | |||
Items that will not be reclassified to net earnings: | ||||||
Actuarial gain on defined benefit plan (net of tax of nil for the 13 weeks and 52 weeks ended | 3,886 | 700 | 3,886 | 700 | ||
Total other comprehensive income | 3,735 | 880 | 3,887 | 73 | ||
Total comprehensive income (loss) | $ 101,051 | $ (10,040) | $ 162,143 | |||
CONSOLIDATED BALANCE SHEETS As at (Unaudited) (in thousands of Canadian dollars) | |||
2022 | 2021(1) | ||
ASSETS | |||
CURRENT ASSETS | |||
Cash and cash equivalents | $ 25,502 | $ 75,162 | |
Trade and other receivables | 7,606 | 10,668 | |
Inventories | 118,972 | 96,122 | |
Prepaid expenses and other assets | 42,590 | 32,100 | |
Total Current Assets | 194,670 | 214,052 | |
NON-CURRENT ASSETS | |||
Restricted cash | 2,757 | 2,753 | |
Property and equipment | 65,970 | 66,112 | |
Intangible assets | 5,613 | 10,331 | |
Right-of-use assets | 44,978 | 103,831 | |
Pension asset | 100 | - | |
Deferred income taxes | 186 | 151 | |
Total Non-Current Assets | 119,604 | 183,178 | |
TOTAL ASSETS | $ 314,274 | $ 397,230 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
CURRENT LIABILITIES | |||
Revolving credit facility | $ 29,634 | $ - | |
Trade and other payables | 34,478 | 31,522 | |
Deferred revenue | 13,490 | 12,462 | |
Income taxes payable | 537 | 1,169 | |
Current portion of lease liabilities | 20,888 | 35,303 | |
Liabilities subject to compromise | - | 204,083 | |
Total Current Liabilities | 99,027 | 284,539 | |
NON-CURRENT LIABILITIES | |||
Lease liabilities | 31,419 | 87,914 | |
Pension liability | - | 3,092 | |
Total Non-Current Liabilities | 31,419 | 91,006 | |
SHAREHOLDERS' EQUITY | |||
Share capital | 27,406 | 27,406 | |
Contributed surplus | 10,295 | 10,295 | |
Retained earnings (deficit) | 146,980 | (15,162) | |
Accumulated other comprehensive loss | (853) | (854) | |
Total Shareholders' Equity
| 183,828 | 21,685 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 314,274 | $ 397,230 | |
(1) Comparative figures have been restated to correctly present restricted cash as non-current assets as at |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY For the 52 weeks ended (Unaudited) (in thousands of Canadian dollars) | ||||||
Share Capital | Contributed | Retained | Accumulated Other | Total | ||
Balance as at | $ 27,406 | $ 10,295 | $ (15,162) | $ (854) | $ 21,685 | |
Net earnings | - | - | 158,256 | - | 158,256 | |
Total other comprehensive income | - | - | 3,886 | 1 | 3,887 | |
Total comprehensive income for the year | - | - | 162,142 | 1 | 162,143 | |
Balance as at | $ 27,406 | $ 10,295 | $ 146,980 | $ (853) | $ 183,828 | |
Balance as at | $ 27,406 | $ 10,283 | $ 156,355 | $ (227) | $ 193,817 | |
Net loss | - | - | (172,217) | - | (172,217) | |
Total other comprehensive income (loss) | - | - | 700 | (627) | 73 | |
Total comprehensive loss for the year | - | - | (171,517) | (627) | (172,144) | |
Share-based compensation costs | - | 12 | - | - | 12 | |
Total contributions by owners of the Company | - | 12 | - | - | 12 | |
Balance as at | $ 27,406 | $ 10,295 | $ (15,162) | $ (854) | $ 21,685 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of Canadian dollars) | |||||
For the 13 weeks ended | For the 52 weeks ended | ||||
CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES | |||||
Net earnings (loss) | $ 97,316 | $ (10,920) | $ 158,256 | ||
Adjustments for: | |||||
Depreciation and amortization | 11,323 | 14,040 | 47,585 | 68,231 | |
Impairment of non-financial assets | 2,239 | 3,421 | 1,611 | 31,342 | |
Share-based compensation costs | - | 5 | - | 12 | |
Net change in transfer of realized gain on cash flow hedges to inventory | - | - | - | (250) | |
Foreign exchange (loss) gain | (1,271) | 846 | 518 | (435) | |
Gain on lease re-measurements due to restructuring | (1,659) | (2,205) | (6,732) | (8,216) | |
Gain on settlement of liabilities subject to compromise | (88,613) | - | (88,613) | - | |
Interest on lease liabilities | 970 | 1,370 | 4,026 | 6,201 | |
Interest on revolving credit | 41 | - | 41 | - | |
Interest income | (123) | (64) | (353) | (436) | |
Income tax (recovery) expense | (32) | (469) | (420) | 271 | |
20,191 | 6,024 | 115,919 | (75,497) | ||
Changes in: | |||||
Trade and other receivables | (1,462) | (4,663) | 3,059 | (4,510) | |
Inventories | 14,561 | 15,731 | (22,850) | 51,306 | |
Prepaid expenses and other assets | (5,881) | (2,026) | (10,490) | (22,659) | |
Pension asset | 144 | 165 | 694 | (20,421) | |
Trade and other payables | (5,786) | (14,300) | 3,272 | (78,644) | |
Liabilities subject to compromise | (96,952) | 971 | (114,419) | 194,615 | |
Deferred revenue | 2,964 | 2,452 | 1,028 | (2,580) | |
Cash (used in) from operating activities | (72,221) | 4,354 | (23,787) | 41,610 | |
Interest received | 117 | 77 | 356 | 591 | |
Income taxes received | - | (750) | - | 133 | |
Income taxes paid | (130) | - | (1,298) | (2,139) | |
Net cash flows (used in) from operating activities | (72,234) | 3,681 | (24,729) | 40,195 | |
CASH FLOWS USED IN INVESTING ACTIVITIES | |||||
Additions to property and equipment and intangible assets, net | (8,340) | (1,370) | (15,222) | (6,164) | |
Cash flows used in investing activities | (8,340) | (1,370) | (15,222) | (6,164) | |
CASH FLOWS FROM (USED) IN FINANCING ACTIVITIES | |||||
Restricted cash | (1) | (3) | (4) | (2,753) | |
Revolving credit facility | 29,634 | - | 29,634 | - | |
Payment of lease liabilities | (9,367) | (6,867) | (38,822) | (46,818) | |
Cash flows from (used in) financing activities | 20,266 | (6,870) | (9,192) | (49,571) | |
FOREIGN EXCHANGE GAIN (LOSS) ON CASH HELD IN FOREIGN CURRENCY | 1,139 | (246) | (517) | 1,292 | |
(59,169) | (4,805) | (49,660) | (14,248) | ||
CASH, BEGINNING OF THE PERIOD | 84,671 | 79,967 | 75,162 | 89,410 | |
CASH, END OF THE PERIOD | $ 25,502 | $ 75,162 | $ 25,502 | $ 75,162 | |
(1) Comparative figures have been restated to correctly present depreciation and amortization and impairment of non-financial assets. |
SOURCE
© Canada Newswire, source