INCREASES DIVIDEND FOR THE
17TH CONSECUTIVE
YEAR
STELLARTON, NS,
June 28, 2012 /CNW/ - Empire Company
Limited (TSX: EMP.A) today announced financial results for its
fourth quarter and fiscal year ended May 5,
2012. For the 13 weeks ended May 5,
2012, the Company recorded net earnings, net of minority
interest, of $92.1 million
($1.35 per share) compared to
$82.5 million ($1.21 per share) for the 14 weeks ended
May 7, 2011.
Adjusted net earnings, net of minority interest,
for the 13 weeks ended May 5, 2012
were $89.5 million ($1.32 per share) compared to $81.3 million ($1.20 per share) recorded for the 14 weeks ended
May 7, 2011. The fourth quarter last
year contained an additional week of operations for wholly-owned
Sobeys Inc. which served to positively impact last year's sales by
$313.6 million and net earnings by
approximately $6.3 million. Excluding
the net earnings impact of the additional week of operations in the
fourth quarter last year, adjusted net earnings, net of minority
interest, increased $14.5 million or
19.3 percent.
Fourth Quarter Highlights (13 weeks versus 14
weeks last year)
- Sales increased $106.6 million
or 2.8 percent after adjusting for the impact of the additional
week of operations last year and the acquisition of 236 retail gas
locations and related convenience store operations in the fourth
quarter of fiscal 2012.
- Sobeys' same-store sales increased 0.7 percent.
- Operating income (1) of
$136.4 million versus $122.4 million last year.
- Net earnings, net of minority interest, of $92.1 million ($1.35 per share) compared to $82.5 million ($1.21 per share) last year.
- Adjusted net earnings (2), net of
minority interest, of $89.5 million
($1.32 per share) versus $81.3 million ($1.20 per share) last year.
- Funded debt to total capital ratio of 25.0 percent compared
to 26.7 percent last year.
|
_________________ |
| (1) |
Certain balances have been reclassified for changes to
comparative figures (see Note 20 to the Company's fourth quarter
unaudited consolidated financial statements). |
| (2) |
Excludes items which are considered not indicative of
underlying business operating performance. |
Net earnings, net of minority interest, for the
52 weeks ended May 5, 2012 were
$339.4 million ($4.99 per share) compared to $400.6 million ($5.87 per share) recorded for the 53 weeks last
year. Included in net earnings last year was a net gain on the sale
of a 27.5 percent ownership interest in Wajax Income Fund ("Wajax")
for $76.2 million.
Adjusted net earnings, net of minority interest,
for the 52 weeks ended May 5, 2012
were $320.6 million ($4.71 per share) compared to $303.2 million ($4.45 per share) for the 53 weeks ended
May 7, 2011. Excluding the impact of
the additional week of operations last year, adjusted net earnings,
net of minority interest, increased $23.7
million or 8.0 percent.
Fiscal 2012 Highlights (52 weeks versus 53
weeks last year)
- Sales increased $474.9 million
or 3.0 percent after adjusting for the impact of the additional
week of operations last year and the acquisition of 236 retail gas
locations and related convenience store operations in the fourth
quarter of fiscal 2012.
- Sobeys' same-store sales increased 1.4 percent.
- Operating income (1) of
$534.3 million versus $525.7 million last year.
- Net earnings, net of minority interest, of $339.4 million ($4.99 per share) compared to $400.6 million ($5.87 per share) last year. Net earnings last
year included a net gain on the sale of a 27.5 percent ownership
interest in Wajax of $76.2
million.
- Adjusted net earnings (2), net of
minority interest, of $320.6 million
($4.71 per share) versus $303.2 million ($4.45 per share) last year.
|
_________________ |
| (1) |
Certain balances have been reclassified for changes to
comparative figures (see Note 20 to the Company's fourth quarter
unaudited consolidated financial statements). |
| (2) |
Excludes items which are considered not indicative of
underlying business operating performance. |
"We are clearly pleased with our fourth quarter
and fiscal 2012 operating performance as we continue to profitably
grow our food retail business and our investments and other
operations in a very competitive environment," stated Paul Sobey, President and CEO, Empire Company
Limited.
Mr. Sobey continued, "On behalf of all our
employees, franchisees and affiliates, along with the Board and the
Sobey family, we extend our heartfelt appreciation and best wishes
to Bill McEwan, who will step down as President and CEO
of Sobeys Inc. on June 29, 2012,
following more than 11 years of truly inspirational
leadership."
"Marc Poulin,
currently President, Sobeys IGA Operations will replace Bill as the
newly appointed President and CEO of Sobeys Inc. It is indeed a
celebration of the depth of talent we have in the organization that
we have such a highly qualified and proven food retailer to lead
Sobeys' food-focused strategy forward. We are confident that Marc's
knowledge of the industry and his proven leadership will serve
Sobeys well in the years ahead," said Paul
Sobey.
"Consistent with our growth and the improvement
in our financial position, we are pleased to announce an increase
in Empire's quarterly dividend per share, from 22.5 cents per share to 24.0 cents per share per quarter, a 6.7 percent
increase. This marks the seventeenth consecutive year of Empire
dividend increases."
Dividend Declaration
The Board of Directors declared a quarterly
dividend of 24.0 cents per share on
both the Non-Voting Class A shares and the Class B common shares
that will be payable on July 31, 2012
to shareholders of record on July 13,
2012. 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.
With the transition to International Financial
Reporting Standards ("IFRS" or "GAAP") effective the first quarter
of fiscal 2012, the comparative figures in the financial results
table below for the 14 and 53 weeks ended May 7, 2011 have been restated to conform with
IFRS.
CONSOLIDATED FINANCIAL RESULTS
| |
|
|
|
|
|
|
|
|
|
|
|
| |
13 Weeks Ended |
|
14
Weeks Ended |
|
|
|
52 Weeks Ended |
|
53
Weeks Ended |
|
|
| ($ in millions, except per share amounts) |
|
May 5,
2012 |
|
|
May 7, 2011 |
|
|
($) Change |
|
|
May 5,
2012 |
|
|
May 7, 2011 |
|
|
($) Change |
| Sales |
$ |
4,073.8 |
|
$ |
4,149.8 |
|
$ |
(76.0) |
|
$ |
16,249.1 |
|
$ |
15,956.8 |
|
$ |
292.3 |
| EBITDA (1) (2) |
|
224.2 |
|
|
209.8 |
|
|
14.4 |
|
|
876.6 |
|
|
863.0 |
|
|
13.6 |
| Operating income (1) (2) |
|
136.4 |
|
|
122.4 |
|
|
14.0 |
|
|
534.3 |
|
|
525.7 |
|
|
8.6 |
| Net earnings, net of minority interest (3) |
|
92.1 |
|
|
82.5 |
|
|
9.6 |
|
|
339.4 |
|
|
400.6 |
|
|
(61.2) |
| Adjusted net earnings, net of minority interest
(4) |
|
89.5 |
|
|
81.3 |
|
|
8.2 |
|
|
320.6 |
|
|
303.2 |
|
|
17.4 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EPS fully diluted |
$ |
1.35 |
|
$ |
1.21 |
|
$ |
0.14 |
|
$ |
4.99 |
|
$ |
5.87 |
|
$ |
(0.88) |
| Adjusted EPS (fully diluted) (4) |
$ |
1.32 |
|
$ |
1.20 |
|
$ |
0.12 |
|
$ |
4.71 |
|
$ |
4.45 |
|
$ |
0.26 |
| (1) |
See Non-GAAP Financial Measures contained in this news
release. |
| (2) |
Certain balances have been reclassified for changes to
comparative figures (see Note 20 to the Company's fourth quarter
unaudited consolidated financial statements). |
| (3) |
Net earnings, net of minority interest, for the 53 weeks
ended May 7, 2011 includes a net gain on the sale of a 27.5 percent
ownership interest in Wajax of $76.2 million. |
| (4) |
Excludes items which are considered not indicative of
underlying business operating performance. |
Sales
Consolidated sales for the 13 weeks ended
May 5, 2012 were $4.07 billion compared to $4.15 billion for the 14 weeks ended May 7, 2011. Adjusting for the additional week of
operations at Sobeys last year, which impacted sales by
$313.6 million, and for the impact of
sales relating to the acquisition of 236 retail gas locations and
related convenience store operations in the fourth quarter this
year, which amounted to $131.0
million, sales increased $106.6
million or 2.8 percent.
For the 52 weeks ended May 5, 2012, consolidated sales were $16.25 billion compared to $15.96 billion reported for the 53 weeks ended
May 7, 2011. Adjusting for the
additional week of operations at Sobeys last year and for the
impact of sales relating to the acquisition of 236 retail gas
locations and related convenience store operations in the fourth
quarter this year, as mentioned, sales increased $474.9 million or 3.0 percent.
EBITDA
Consolidated EBITDA in the fourth quarter was
$224.2 million compared to
$209.8 million in the fourth quarter
last year. For the fiscal year ended May 5,
2012, consolidated EBITDA was $876.6
million compared to $863.0
million last year. Adjusting EBITDA for items which are
considered not indicative of underlying business operating
performance, as outlined in the following table, resulted in fourth
quarter adjusted EBITDA of $221.5
million compared to $208.4
million in the fourth quarter last year and annual adjusted
EBITDA of $853.2 million compared to
$837.7 million last fiscal year.
| |
|
|
|
|
|
|
|
| |
13
Weeks Ended |
|
14
Weeks Ended |
|
52 Weeks Ended |
|
53
Weeks Ended |
| ($ in millions) |
|
May 5, 2012 |
|
|
May 7, 2011 |
|
|
May 5,
2012 |
|
|
May 7, 2011 |
| EBITDA (consolidated) (1) |
$ |
224.2 |
|
$ |
209.8 |
|
$ |
876.6 |
|
$ |
863.0 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
| |
Gain on disposal of assets |
|
(5.1) |
|
|
(0.5) |
|
|
(22.2) |
|
|
(19.6) |
| |
Sobeys' severance and store closure costs |
|
- |
|
|
0.2 |
|
|
- |
|
|
27.7 |
| |
Post-retirement benefit amendment |
|
- |
|
|
- |
|
|
- |
|
|
(28.5) |
| |
Sobeys' organizational realignment costs |
|
2.8 |
|
|
- |
|
|
9.2 |
|
|
- |
| |
Dilution gains |
|
(0.4) |
|
|
(1.1) |
|
|
(10.4) |
|
|
(4.9) |
| |
|
(2.7) |
|
|
(1.4) |
|
|
(23.4) |
|
|
(25.3) |
| Adjusted EBITDA |
$ |
221.5 |
|
$ |
208.4 |
|
$ |
853.2 |
|
$ |
837.7 |
| (1) |
Certain balances have been reclassified for changes to
comparative figures (see Note 20 to the Company's fourth quarter
unaudited consolidated financial statements). |
Operating Income
Consolidated operating income in the fourth
quarter was $136.4 million, an
increase of $14.0 million from the
$122.4 million recorded in the fourth
quarter last year. For the 52 weeks ended May 5, 2012, consolidated operating income was
$534.3 million, an increase of
$8.6 million from the $525.7 million recorded last year. Adjusting
operating income for items which are considered not indicative of
underlying business operating performance, as outlined in the
previous table for EBITDA, resulted in quarterly adjusted
consolidated operating income of $133.7
million compared to $121.0
million in the fourth quarter last year. For the full year,
adjusted consolidated operating income of $510.9 million compared to $500.4 million last fiscal year.
Net Earnings
Consolidated net earnings, net of minority
interest, in the fourth quarter equalled $92.1 million ($1.35 per share) compared to $82.5 million ($1.21 per share) in the fourth quarter last year.
For fiscal 2012, consolidated net earnings, net of minority
interest, equalled $339.4 million
($4.99 per share) compared to
$400.6 million ($5.87 per share) last year.
Fiscal 2011 net earnings were favourably
impacted by an additional week of operating results by Sobeys, as
mentioned. Management calculates the additional week of operations
to have positively impacted fiscal 2011 net earnings, net of
minority interest, by approximately $6.3
million.
The following table presents Empire's segmented
net earnings, net of minority interest, for the 13 and 52 weeks
ended May 5, 2012 compared to the 14
and 53 weeks ended May 7, 2011.
| |
|
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|
|
|
|
|
|
|
|
|
| |
13
Weeks Ended |
|
14
Weeks Ended |
|
|
|
52
Weeks Ended |
|
53
Weeks Ended |
|
|
| ($ in millions, net of tax) |
|
May 5,
2012 |
|
|
May 7, 2011 |
|
|
($) Change |
|
|
May
5, 2012 |
|
|
May 7, 2011 |
|
|
($) Change |
| Food retailing |
$ |
81.2 |
|
$ |
76.0 |
|
$ |
5.2 |
|
$ |
304.1 |
|
$ |
297.3 |
|
$ |
6.8 |
| Investments and other operations |
|
10.9 |
|
|
6.5 |
|
|
4.4 |
|
|
35.3 |
|
|
103.3 |
(1) |
|
(68.0) |
| Consolidated |
$ |
92.1 |
|
$ |
82.5 |
|
$ |
9.6 |
|
$ |
339.4 |
|
$ |
400.6 |
|
$ |
(61.2) |
| (1) |
Includes the net gain of $76.2 million from the sale of a
27.5 percent ownership interest in Wajax. |
Adjusted Net Earnings
The table below adjusts reported net earnings,
net of minority interest, for items which are considered not
indicative of underlying business operating performance. Excluding
the impact of the adjustments noted in the table, Empire recorded
adjusted net earnings, net of minority interest, of $89.5 million ($1.32 per share) for the 13 weeks ended
May 5, 2012 compared to $81.3 million ($1.20 per share) recorded in the fourth quarter
last year. For fiscal 2012, adjusted net earnings, net of minority
interest, were $320.6 million
($4.71 per share) compared to
$303.2 million ($4.45 per share) last year.
After adjusting for the additional week of
operations at Sobeys in fiscal 2011, adjusted net earnings, net of
minority interest, on a comparable 13 and 52 week basis in fiscal
2011 would have been $75.0 million
($1.10 per share) and $296.9 million ($4.35 per share), respectively.
| |
|
|
|
|
|
|
|
| |
13 Weeks Ended |
|
14
Weeks Ended |
|
52 Weeks Ended |
|
53
Weeks Ended |
| ($ in millions, except per share amounts, net of
tax) |
|
May 5, 2012 |
|
|
May 7, 2011 |
|
|
May 5, 2012 |
|
|
May 7, 2011 |
| Net earnings, net of minority interest |
$ |
92.1 |
|
$ |
82.5 |
|
$ |
339.4 |
|
$ |
400.6 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
| |
Gain on sale of Wajax |
|
- |
|
|
- |
|
|
- |
|
|
(76.2) |
| |
Gain on disposal of assets |
|
(4.3) |
|
|
(0.5) |
|
|
(17.9) |
|
|
(16.4) |
| |
Sobeys' severance and store closure costs |
|
- |
|
|
0.1 |
|
|
- |
|
|
20.0 |
| |
Post-retirement benefit amendment |
|
- |
|
|
- |
|
|
- |
|
|
(21.3) |
| |
Sobeys' organizational realignment costs |
|
2.0 |
|
|
- |
|
|
6.4 |
|
|
- |
| |
Dilution gains |
|
(0.3) |
|
|
(0.8) |
|
|
(7.3) |
|
|
(3.5) |
| |
|
(2.6) |
|
|
(1.2) |
|
|
(18.8) |
|
|
(97.4) |
| Adjusted net earnings, net of minority
interest |
$ |
89.5 |
|
$ |
81.3 |
|
$ |
320.6 |
|
$ |
303.2 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Adjusted net earnings, net of minority interest, by
division: |
|
|
|
|
|
|
|
|
|
|
|
| |
Food retailing |
$ |
79.1 |
|
$ |
75.5 |
|
$ |
292.5 |
|
$ |
280.8 |
| |
Investments and other operations |
|
10.4 |
|
|
5.8 |
|
|
28.1 |
|
|
22.4 |
| Adjusted net earnings, net of minority
interest |
$ |
89.5 |
|
$ |
81.3 |
|
$ |
320.6 |
|
$ |
303.2 |
| Adjusted EPS (fully diluted) |
$ |
1.32 |
|
$ |
1.20 |
|
$ |
4.71 |
|
$ |
4.45 |
With the transition to IFRS, the Company now has
two reportable operating segments:
| 1) |
Food Retailing, which consists of wholly-owned Sobeys
Inc. ("Sobeys"), and |
| |
|
| 2) |
Investments and Other Operations, the principal
components of which include investments in Crombie REIT (44.3
percent ownership interest; 40.7 percent fully diluted), an
approximate 40.0 percent ownership interest in Genstar Development
Partnership ("Genstar"), as well as wholly-owned ETL Canada
Holdings Limited ("Empire Theatres"). |
FOOD RETAILING
The following table presents the food retailing
segment's contribution to Empire's consolidated sales, EBITDA,
adjusted EBITDA, operating income, adjusted operating income, net
earnings, net of minority interest, and adjusted net earnings, net
of minority interest.
| |
|
|
|
|
|
|
|
|
|
|
|
| |
13
Weeks Ended |
|
14
Weeks Ended |
|
|
|
52
Weeks Ended |
|
53
Weeks Ended |
|
|
| ($ in millions) |
|
May
5, 2012 |
|
|
May 7, 2011 |
|
|
($) Change |
|
|
May 5, 2012 |
|
|
May 7, 2011 |
|
|
($) Change |
| Sales |
$ |
4,023.2 |
|
$ |
4,102.6 |
|
$ |
(79.4) |
|
$ |
16,044.6 |
|
$ |
15,756.3 |
|
$ |
288.3 |
| EBITDA (1) |
|
203.7 |
|
|
193.5 |
|
|
10.2 |
|
|
801.8 |
|
|
793.6 |
|
|
8.2 |
| Adjusted EBITDA (2) |
|
201.6 |
|
|
193.1 |
|
|
8.5 |
|
|
788.6 |
|
|
775.1 |
|
|
13.5 |
| Operating income (1) |
|
120.0 |
|
|
111.3 |
|
|
8.7 |
|
|
475.8 |
|
|
473.4 |
|
|
2.4 |
| Adjusted operating income (2) |
|
117.9 |
|
|
110.9 |
|
|
7.0 |
|
|
462.6 |
|
|
454.9 |
|
|
7.7 |
| Net earnings, net of minority interest |
|
81.2 |
|
|
76.0 |
|
|
5.2 |
|
|
304.1 |
|
|
297.3 |
|
|
6.8 |
| Adjusted net earnings, net of minority interest
(2) |
|
79.1 |
|
|
75.5 |
|
|
3.6 |
|
|
292.5 |
|
|
280.8 |
|
|
11.7
|
| (1) |
Certain balances have been reclassified for changes to
comparative figures (see Note 20 to the Company's fourth quarter
unaudited consolidated financial statements). |
| (2) |
Excludes items which are considered not indicative of
underlying business operating performance. |
Sales
Empire's food retailing division achieved sales
of $4.02 billion in the fourth
quarter of fiscal 2012. After adjusting for the additional week of
operations last year and the impact of the acquisition of 236
retail gas locations and related convenience store operations in
the fourth quarter of fiscal 2012, sales were up $103.2 million or 2.7 percent. During the fourth
quarter, same-store sales increased 0.7 percent.
For the 52 weeks ended May 5, 2012, Sobeys achieved sales of
$16.04 billion. After adjusting for
the additional week of operations last year and the impact of the
acquisition of 236 retail gas locations and related convenience
store operations in the fourth quarter of fiscal 2012, sales were
up $470.9 million or 3.0 percent.
During the fiscal year, same-store sales increased 1.4 percent.
EBITDA
Sobeys contributed EBITDA to Empire in the
fourth quarter of $203.7 million
compared to $193.5 million last year.
Sobeys recorded gains on the disposal of assets in the current
quarter of $4.9 million (fiscal 2011
- $0.5 million). Adjusting for this
and other items which are considered not indicative of underlying
business operating performance, as outlined in the following table,
resulted in an adjusted EBITDA contribution from Sobeys to Empire
of $201.6 million in the fourth
quarter compared to a $193.1 million
contribution in the fourth quarter last year.
For fiscal 2012, Sobeys contributed EBITDA to
Empire of $801.8 million compared to
$793.6 million last year. Included in
EBITDA for fiscal 2012 were organizational realignment costs of
$9.2 million (fiscal 2011 - $nil) and
gains on the disposal of assets of $22.0
million (fiscal 2011 - $18.0
million). Adjusting for these and other items which are
considered not indicative of underlying business operating
performance, as outlined in the following table, resulted in an
adjusted EBITDA contribution from Sobeys to Empire of $788.6 million for fiscal 2012 compared to a
$775.1 million contribution last
year.
| |
|
|
|
|
|
|
|
| |
13
Weeks Ended |
|
14
Weeks Ended |
|
52
Weeks Ended |
|
53
Weeks Ended |
| ($ in millions) |
|
May 5,
2012 |
|
|
May 7, 2011 |
|
|
May 5, 2012 |
|
|
May 7, 2011 |
| EBITDA (contributed by Sobeys) (1) |
$ |
203.7 |
|
$ |
193.5 |
|
$ |
801.8 |
|
$ |
793.6 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
| |
Gain on disposal of assets |
|
(4.9) |
|
|
(0.5) |
|
|
(22.0) |
|
|
(18.0) |
| |
Sobeys' severance and store closure costs |
|
- |
|
|
0.2 |
|
|
- |
|
|
27.7 |
| |
Post-retirement benefit amendment |
|
- |
|
|
- |
|
|
- |
|
|
(28.0) |
| |
Sobeys' organizational realignment costs |
|
2.8 |
|
|
- |
|
|
9.2 |
|
|
- |
| |
Dilution gains |
|
- |
|
|
(0.1) |
|
|
(0.4) |
|
|
(0.2) |
| |
|
(2.1) |
|
|
(0.4) |
|
|
(13.2) |
|
|
(18.5) |
| Adjusted EBITDA |
$ |
201.6 |
|
$ |
193.1 |
|
$ |
788.6 |
|
$ |
775.1 |
| (1) |
Certain balances have been reclassified for changes to
comparative figures (see Note 20 to the Company's fourth quarter
unaudited consolidated financial statements). |
Operating Income
Sobeys' operating income contribution to Empire
in the fourth quarter was $120.0
million compared to $111.3
million in the same quarter last year, an increase of
$8.7 million or 7.8 percent.
Operating margin for the fourth quarter equalled 2.98 percent
versus 2.71 percent in the same period last year.
For the 52 weeks ended May 5, 2012, Sobeys' operating income
contribution to Empire was $475.8
million compared to $473.4
million last year, an increase of $2.4 million or 0.5 percent. Operating margin for
fiscal 2012 equalled 2.97 percent versus 3.00 percent in the same
period last year.
Adjusting Sobeys' operating income for items
which are considered not indicative of underlying business
operating performance, as outlined in the previous table for
EBITDA, resulted in adjusted operating income contribution of
$117.9 million (2.93 percent of
sales) in the fourth quarter compared to $110.9 million (2.70 percent of sales) in the
fourth quarter last year. On an annual basis, adjusted operating
income contribution was $462.6
million (2.88 percent of sales) for fiscal 2012 compared to
$454.9 million (2.89 percent of
sales) last year.
Net Earnings
During the fourth quarter of fiscal 2012, Sobeys
contributed net earnings, net of minority interest, to Empire of
$81.2 million versus $76.0 million in the fourth quarter last year, an
increase of $5.2 million or 6.8
percent. Sobeys contributed adjusted net earnings, net of minority
interest, to Empire of $79.1 million
versus $75.5 million in the fourth
quarter last year, an increase of $3.6
million or 4.8 percent.
For the 52 weeks ended May 5, 2012, Sobeys contributed net earnings, net
of minority interest, of $304.1
million to Empire, an increase of $6.8 million or 2.3 percent from the $297.3 million recorded in the prior year. Sobeys
contributed adjusted net earnings, net of minority interest, to
Empire of $292.5 million versus
$280.8 million last year, an increase
of $11.7 million or 4.2 percent.
Adjusting for the additional week of operations
at Sobeys in fiscal 2011, adjusted net earnings, net of minority
interest, on a comparable 13 and 52 week basis in fiscal 2011 would
have been $69.2 million and
$274.5 million, respectively.
INVESTMENTS AND OTHER OPERATIONS
The table below presents the investments and
other operations segment's contribution to Empire's consolidated
sales, EBITDA, adjusted EBITDA, operating income, net earnings and
adjusted net earnings.
| |
|
|
|
|
|
|
|
|
|
|
|
| |
13 Weeks Ended |
|
14
Weeks Ended |
|
|
|
52 Weeks Ended |
|
53
Weeks Ended |
|
|
| ($ in millions) |
|
May 5, 2012 |
|
|
May 7, 2011 |
|
|
($) Change |
|
|
May 5, 2012 |
|
|
May 7, 2011 |
|
|
($) Change |
| Sales |
$ |
50.6 |
|
$ |
47.2 |
|
$ |
3.4 |
|
$ |
204.5 |
|
$ |
200.5 |
|
$ |
4.0 |
| EBITDA |
|
20.5 |
|
|
16.3 |
|
|
4.2 |
|
|
74.8 |
|
|
69.4 |
|
|
5.4 |
| Adjusted EBITDA (1) |
|
19.9 |
|
|
15.3 |
|
|
4.6 |
|
|
64.6 |
|
|
62.6 |
|
|
2.0 |
| Operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Crombie REIT (2) |
|
4.9 |
|
|
5.1 |
|
|
(0.2) |
|
|
19.7 |
|
|
18.4 |
|
|
1.3 |
| |
Real estate partnerships (3) |
|
13.2 |
|
|
17.7 |
|
|
(4.5) |
|
|
30.0 |
|
|
32.1 |
|
|
(2.1) |
| |
Wajax |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
8.6 |
|
|
(8.6) |
| |
Other operations, net of corporate expenses
(4) |
|
(1.7) |
|
|
(11.7) |
|
|
10.0 |
|
|
8.8 |
|
|
(6.8) |
|
|
15.6 |
| |
|
16.4 |
|
|
11.1 |
|
|
5.3 |
|
|
58.5 |
|
|
52.3 |
|
|
6.2 |
| Net earnings (5) |
|
10.9 |
|
|
6.5 |
|
|
4.4 |
|
|
35.3 |
|
|
103.3 |
|
|
(68.0) |
| Adjusted net earnings (1) |
|
10.4 |
|
|
5.8 |
|
|
4.6 |
|
|
28.1 |
|
|
22.4 |
|
|
5.7 |
| (1) |
Excludes items which are considered not indicative of
underlying business operating performance. |
| (2) |
44.3 percent (40.7 percent fully diluted) equity accounted
interest in Crombie REIT (May 7, 2011 - 46.4 percent
interest). |
| (3) |
40.7 percent equity accounted interest in Genstar
Development Partnership, 45.9 percent equity accounted interest in
Genstar Development Partnership II, 42.1 percent equity accounted
interest in each of GDC Investments 4, L.P., GDC Investments 5,
L.P. and GDC Investments 6, L.P., and 42.5 percent equity accounted
interest in GDC Investments 7, L.P. (collectively referred to as
"Genstar"). |
| (4) |
Other operations (net of corporate expenses) operating
income for the 13 and 52 weeks ended May 5, 2012 includes an
impairment charge related to an investment of $1.1 million (14 and
53 weeks ended May 7, 2011 - $9.6 million). The fourth quarter of
fiscal 2012 includes dilution gains of $0.4 million (fiscal - $1.0
million) and a gain on the disposal of assets of $0.2 million
(fiscal 2011 - $nil). Fiscal 2012 includes dilution gains of $10.0
million (fiscal 2011 - $4.7 million), a gain on the disposal of
assets of $0.2 million (fiscal 2011 - $1.6 million) and a
post-retirement benefit amendment of $nil (fiscal 2011 - $0.5
million). |
| (5) |
Net earnings for the 53 weeks ended May 7, 2011 includes a
net gain on the sale of a 27.5 percent ownership interest in Wajax
of $76.2 million. |
Sales
Investments and other operations' sales,
primarily generated by Empire Theatres, equalled $50.6 million in the fourth quarter ended
May 5, 2012 versus $47.2 million in the fourth quarter last year, a
$3.4 million or 7.2 percent increase.
For fiscal 2012, investments and other operations reported sales of
$204.5 million, an increase of
$4.0 million or 2.0 percent from the
$200.5 million reported last
year.
EBITDA
Investments and other operations contributed
EBITDA to Empire in the fourth quarter of $20.5 million compared to $16.3 million last year. Adjusting for items
which are considered not indicative of underlying business
operating performance, as outlined in the following table, resulted
in adjusted EBITDA from investments and other operations of
$19.9 million compared to
$15.3 million last year.
For the 52 weeks ended May 5, 2012, investments and other operations
contributed EBITDA to Empire of $74.8
million compared to $69.4
million last year. Fiscal 2012 EBITDA from investments and
other operations included $10.0
million (fiscal 2011 - $4.7
million) in dilution gains resulting from a change in the
ownership level in Crombie REIT. Adjusting for this and other items
which are considered not indicative of underlying business
operating performance resulted in adjusted EBITDA from investments
and other operations of $64.6 million
compared to $62.6 million last
year.
| |
|
|
|
|
|
|
|
| |
13
Weeks Ended |
|
14
Weeks Ended |
|
52 Weeks Ended |
|
53
Weeks Ended |
| ($ in millions) |
|
May 5, 2012 |
|
|
May 7, 2011 |
|
|
May 5,
2012 |
|
|
May 7, 2011 |
| EBITDA (investments and other operations) |
$ |
20.5 |
|
$ |
16.3 |
|
$ |
74.8 |
|
$ |
69.4 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
| |
Gain on disposal of assets |
|
(0.2) |
|
|
- |
|
|
(0.2) |
|
|
(1.6) |
| |
Post-retirement benefit amendment |
|
- |
|
|
- |
|
|
- |
|
|
(0.5) |
| |
Dilution gains |
|
(0.4) |
|
|
(1.0) |
|
|
(10.0) |
|
|
(4.7) |
| |
|
(0.6) |
|
|
(1.0) |
|
|
(10.2) |
|
|
(6.8) |
| Adjusted EBITDA |
$ |
19.9 |
|
$ |
15.3 |
|
$ |
64.6 |
|
$ |
62.6 |
Operating Income
Investments and other operations contributed
operating income of $16.4 million in
the fourth quarter ended May 5, 2012
compared to $11.1 million in the
fourth quarter last year, an increase of $5.3 million. For the 52 weeks ended May 5, 2012, investments and other operations'
operating income contribution to Empire was $58.5 million compared to $52.3 million last year, an increase of
$6.2 million.
Adjusting investments and other operations'
operating income for items which are considered not indicative of
underlying business operating performance, as outlined in the
previous table for EBITDA, resulted in an adjusted operating income
contribution during the fourth quarter of $15.8 million versus $10.1
million last year. For fiscal 2012, adjusted operating
income contribution was $48.3 million
compared to $45.5 million last
year.
Net Earnings
Investments and other operations contributed net
earnings of $10.9 million to Empire's
consolidated fourth quarter fiscal 2012 net earnings compared to a
$6.5 million contribution in the
fourth quarter last year. Adjusted net earnings contribution from
investments and other operations was $10.4
million versus $5.8 million in
the fourth quarter last year.
For fiscal 2012, investments and other
operations contributed net earnings of $35.3
million to Empire's consolidated net earnings compared to a
$103.3 million contribution last
year. Last year's net earnings included the net gain on the sale of
Wajax for $76.2 million. Adjusted net
earnings contribution from investments and other operations was
$28.1 million versus $22.4 million last year.
CONSOLIDATED FINANCIAL CONDITION
The Company's overall financial condition has
improved since the start of the fiscal year as evidenced by the
capital structure and key financial condition measures presented in
the table below.
| |
|
|
|
| ($ in millions, except per share and ratio calculations) |
|
May
5, 2012 |
|
|
May 7, 2011 |
| Shareholders' equity, net of minority interest |
$ |
3,396.3 |
|
$ |
3,162.1 |
| Book value per common share |
$ |
49.98 |
|
$ |
46.48 |
| Bank indebtedness |
$ |
4.4 |
|
$ |
- |
| Long-term debt, including current portion (1) |
$ |
1,126.4 |
|
$ |
1,152.4 |
| Funded debt to total capital |
|
25.0% |
|
|
26.7% |
| Net funded debt to net total capital ratio (2) |
|
15.4% |
|
|
14.5% |
| Funded debt to EBITDA |
|
1.3x |
|
|
1.3x |
| EBITDA to net finance costs |
|
14.6x |
|
|
11.4x |
| Total assets |
$ |
6,913.1 |
|
$ |
6,518.6 |
| (1) |
Includes liabilities relating to assets held for
sale. |
| (2) |
Net funded debt to net total capital reduces funded debt by
cash and cash equivalents. |
Book value per common share was $49.98 at May 5,
2012 compared to $46.48 at
May 7, 2011. The 7.5 percent increase
in book value in the current fiscal year largely reflects the
Company's earnings growth.
The ratio of funded debt to total capital has
improved 1.7 percentage points to 25.0 percent from 26.7 percent at
the end of fiscal 2011 as a result of the $234.2 million increase in shareholders' equity
levels and a $21.6 million decline in
funded debt from last fiscal year.
Consolidated free cash flow generation in the
fourth quarter of fiscal 2012 was $189.4
million compared to $171.4
million in the fourth quarter last year. This $18.0 million increase was due to a $25.5 million increase in cash flow from
operations, partially offset by an increase in property, equipment
and investment property purchases of $7.5
million.
For the 52 weeks ended May 5, 2012, free cash flow generation was
$225.1 million compared to
$210.3 million for the 53 weeks ended
May 7, 2011. The $14.8 million increase in free cash flow from
fiscal 2011 was due to a $51.9
million increase in cash flow from operations, partially
offset by a $37.1 million increase in
property, equipment and investment property purchases.
The following table reconciles free cash flow to
GAAP cash flows used in operating activities for the 13 and 52
weeks ended May 5, 2012 and the 14
and 53 weeks ended May 7, 2011.
| |
|
|
|
|
|
|
|
| |
13 Weeks Ended |
|
14
Weeks Ended |
|
52
Weeks Ended |
|
53
Weeks Ended |
| ($ in millions) |
|
May 5, 2012 |
|
|
May 7, 2011 |
|
|
May
5, 2012 |
|
|
May 7, 2011 |
| Cash flow from operating activities |
$ |
370.9 |
|
$ |
345.4 |
|
$ |
814.6 |
|
$ |
762.7 |
| Less: property, equipment and investment property
purchases |
|
181.5 |
|
|
174.0 |
|
|
589.5 |
|
|
552.4 |
| Free cash flow |
$ |
189.4 |
|
$ |
171.4 |
|
$ |
225.1 |
|
$ |
210.3 |
SUBSEQUENT EVENT
On June 12, 2012,
the Company agreed to purchase $24.0
million of convertible unsecured subordinated debentures
(the "Debentures") from Crombie REIT, pursuant to a bought-deal
prospectus offering for a total of $60.0
million. The Debentures have a maturity date of September 30, 2019. The Debentures have a coupon
of 5.00 percent per annum and each $1,000 principal amount of Debenture is
convertible into approximately 49.7512 units of Crombie REIT, at
any time, at the option of the holder, based on a conversion price
of $20.10 per unit.
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 press
release include those relating to Sobeys' expectations that it will
continue to focus on disciplined cost management initiatives,
supply chain and retail productivity improvements, and migration of
best practices to continue to fund investments to drive sales and
improve margins over time which could be impacted by the final
scope and scale of these initiatives; and the Company's
expectations that cost productivity, growth and innovation
initiatives will continue to enrich the customers' experience and
ensure our competitive position 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.
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 press release reflects the Company's
expectations as of June 28, 2012 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.
NON-GAAP FINANCIAL MEASURES
There are measures included in this press
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 locations in
both reporting periods.
- Gross profit is calculated as sales less cost of sales.
- Operating income, or earnings before interest and taxes
("EBIT"), is calculated as net earnings before minority interest,
finance costs (net of finance income) and income taxes.
- Operating income margin is operating income divided by
sales.
- Adjusted operating income is operating income excluding items
which are considered not indicative of underlying business
operating performance.
- Earnings before interest, taxes, depreciation and amortization
("EBITDA") is calculated as EBIT plus depreciation and amortization
of intangibles.
- Adjusted EBITDA is EBITDA 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, long-term debt and debt related to
assets held for sale.
- 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 minority interest.
- Adjusted net earnings are net earnings excluding items which
are considered not indicative of underlying business operating
performance.
- Net total capital is total capital less cash and cash
equivalents.
- Free cash flow is calculated as cash flows from operating
activities, less property, equipment and investment property
purchases.
- Book value per common share is shareholders' equity, net of
minority interest, less preferred shares, divided by total common
shares outstanding.
CONFERENCE CALL INFORMATION
The Company will hold an analyst call on
Thursday, June 28, 2012 beginning at
1:00 p.m. (Eastern Daylight Time)
during which senior management will discuss the Company's financial
results for the fourth quarter and full year ended May 5, 2012. To join this conference call dial
(888) 231-8191 outside the Toronto
area or (647) 427-7450 from within the Toronto area. 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 91624078 until midnight
July 5, 2012, or on the Company's
website for 90 days following the conference call.
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
To view and download the Company's fourth
quarter and full year fiscal 2012 unaudited consolidated financial
statements, please access the following link:
Q4 and Fiscal 2012 Unaudited Consolidated
Financial Statements
This information can also be downloaded at
www.sedar.com or by accessing the Investor Centre of the Company's
website at www.empireco.ca.
2012 ANNUAL REPORT
The Company's audited consolidated financial
statements and the notes thereto for the fiscal year ended
May 5, 2012 will be available on or
before August 3, 2012. Management's
Discussion and Analysis for the year ended May 5, 2012, which includes discussion and
analysis of results of operations, financial position and cash
flows, will also be available on or before August 3, 2012. Both documents will be contained
in the Company's 2012 Annual Report and can be accessed through the
Investor Centre section of the Company's website at www.empireco.ca
and also at www.sedar.com.
ABOUT EMPIRE
Empire Company Limited (TSX:EMP.A) is a Canadian
company headquartered in Stellarton, Nova
Scotia. Empire's core businesses include food retailing and
related real estate. With over $16
billion in annual sales and approximately $6.9 billion in assets, Empire and its
subsidiaries directly employ approximately 47,000 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