Click here to close now.

Welcome!

.NET Authors: Elizabeth White, Liz McMillan, Pat Romanski, Jaynesh Shah, Carmen Gonzalez

News Feed Item

Liquor Stores N.A. Ltd. Reports Strong Third Quarter Results For 2012 Revenue Up 4.7%, Operating Margin Up 7%

EDMONTON, ALBERTA -- (Marketwire) -- 11/06/12 -- Liquor Stores N.A. Ltd (the "Company") (TSX:LIQ), North America's largest publicly traded liquor retailer today reported its results for the third quarter ended September 30, 2012.

HIGHLIGHTS

Three months ended September 30, 2012


--  Opened two large-format, service-oriented liquor stores in Alberta (each
    in excess of 17,000 square feet), branded as "Wine & Beyond"; 
--  Consolidated sales increased 4.7% to $164.5 million (2011 - $157.1
    million); 
--  Same-store sales increased by 2.5% in Canada and decreased by 0.4% ($0.1
    million) in the US; 
--  Gross margin increased to 25.5% (2011 - 24.8%); 
--  Operating margin before non-recurring items increased by 7.0% to $14.6
    million (2011 - $13.6 million); and 
--  Net earnings were $6.5 million (2011: $11.0 million). The decrease
    relates primarily to last year's $4.9 million one-time recovery from a
    lawsuit.

Nine months ended September 30, 2012


--  Consolidated sales increased 6.5% to $450.7 million (2011 - $423.3
    million); 
--  Same-store sales increased by 4.1% in Canada and 2.1% in the US; 
--  Gross margin increased to 25.3% (2011 - 24.7%); 
--  Operating margin before non-recurring items increased by 11.9% to $34.9
    million (2011 - $31.2 million); and 
--  Net earnings were $13.7 million (2011: $16.9 million). The decrease
    relates primarily to last year's $4.9 million one-time recovery from a
    lawsuit.

"Our results reflect a continuation of the strong performance we've been driving across all regions. We've achieved significant margin improvements in both our Canadian and US segments." said Jim Dinning, Chair of the Board of Directors and Interim Chief Executive Officer. "Along with our continued strong financial results, our team 'raised the bar' when we opened two new large-format stores in Alberta in September. The initial customer response has been overwhelmingly positive."

Our financial performance in the third quarter was highlighted by strong increases in gross margin and operating margin percentages. Consolidated gross margin increased from 24.8% to 25.5%, which represents the fourth consecutive quarter that the gross margin has increased over the comparative quarter. Operating margin before non-recurring items increased by 7.0% to $14.6 million, which represents the seventh consecutive quarter that operating margin percentage before non-recurring items has increased over the comparative quarter. The third quarter same-store sales increase in Canada was the eighth consecutive quarterly increase recorded by the Company. US same-store sales experienced a $0.1 million 'quarter over quarter' decline, however, both gross margin and operating margin in the US increased from the comparative period.

Management attributes these positive results primarily to our focus on improved merchandising, category management and purchasing strategies along with our expanded store hours program (with selected stores open until 2 am), and a strong emphasis on cost control.

During the last week of September 2012, the Company opened two (2) large-format Alberta liquor stores (each in excess of 17,000 square feet), branded as "Wine & Beyond", with a strong focus on wine and customer service. Management believes that these upscale Wine & Beyond stores carry the largest selection of wines, spirits and beers in Western Canada. Fashioned similar to our large-format stores located in the US, these destination stores will complement the Company's convenience-focused Liquor Depot/Liquor Barn stores in Alberta.

Third Quarter 2012 Operating Results Compared to Third Quarter 2011 Operating Results

Sales

Total sales increased by $7.4 million or 4.7% to $164.5 million in the third quarter of 2012 (2011 - $157.1 million). The increase is primarily the result of new store expansion, same-store sales growth in Canada, and a $0.5 million increase in the Canadian currency equivalent for US sales as a result of foreign exchange rate differences.

Same-Store Sales


--  Canadian same-store sales increased by $2.9 million or 2.5%. 
    --  The increase in Canadian same-store sales represents the eighth
        consecutive quarter over quarter increase. 
    --  The positive results in Canada are attributable, in part, to the
        continued success of the Company's expanded store hours program
        (with stores in selected markets open until 2 am) and continued
        management focus on the execution of operational initiatives related
        to merchandising techniques, category management and purchasing
        strategies. 
--  US same store sales decreased by $0.1 million or 0.4%, which was more
    than offset by an increase in operating margin. 
    --  Management believes the decrease in US same store sales is
        attributable primarily to unfavourable weather conditions in
        Kentucky during the month of September 2012 and downward pressure on
        sales due to certain counties in Kentucky (in proximity to certain
        of the Company's stores) going from 'dry' to 'wet' throughout 2012
        (i.e. certain counties that did not previously permit retail package
        liquor sales are now permitting these sales).

Other Sales


--  Other Canadian stores include two large format stores ('Wine & Beyond')
    opened during the last week of September 2012, one store that was
    acquired in the second quarter of 2012, four stores that were opened in
    the fourth quarter of 2011 and one store that closed subsequent to June
    30, 2011; other US stores include one store that was acquired in the
    first quarter of 2012 and one store that was opened in the fourth
    quarter of 2011. Sales for all of the new stores have exceeded
    projections and management is encouraged that this will continue
    throughout the remainder of 2012.

MARGINS

For the three months ended September 30, 2012, gross margin was $41.9 million, up 8.2% from $38.8 million for the same period last year. Gross margin as a percentage of sales increased to 25.5% from 24.7% in 2011. The quarter over quarter increase in gross margin percentage represents the fourth consecutive quarterly increase. Gross margin as a percentage of sales has increased primarily as a result of continued focus on merchandising techniques, category management and purchasing strategies, including expanding our selection and marketing of control brands/private label and exclusive products.

Operating margin before non-recurring items was $14.6 million for the three months ended September 30, 2012, up 7.0% from $13.6 million in 2011. As a percentage of total sales, operating margin before non-recurring items was 8.9%, up from 8.7% a year earlier primarily due to an improvement in gross margin percentage. Operating margin decreased 4.9% from $13.3 million in the prior year, primarily as a result of non-recurring administrative expenses, which were offset by increases in sales and gross margin percentage.

Canadian operating margin before the $2.0 million in non-recurring expenses primarily related to payments made to the Company's former President and Chief Executive Officer upon his departure effective August 31, 2012, was $12.2 million or 9.5% as a percentage of Canadian sales. Operating margin for Canadian stores for the third quarter of 2012 was $10.2 million or 8.0% as a percentage of Canadian sales compared with $11.8 million and 9.6% as a percentage of Canadian sales for 2011.

The US operating margin for the third quarter of 2012 was $2.4 million or 6.6% as a percentage of US sales compared with $1.5 million and 4.3% as a percentage of US sales for 2011.

CASH FLOW AND DIVIDENDS

For the three months ended September 30, 2012, cash provided by operating activities before changes in non-cash working capital and non-recurring items was $13.0 million ($0.57 per share), an increase of $0.9 million compared to $12.1 million ($0.54 per share) for the same quarter in 2011. The increase results primarily from an increase in operating margin before non-recurring items for the three months ended September 30, 2012. Before adjusting for non-recurring items, cash provided by operating activities before changes in non-cash working capital for the three months ended September 30, 2012 is $0.48 per share compared to $0.70 per share in the same period last year.

During the three and nine months ended September 30, 2012, the Company declared dividends of $0.27 and $0.81 per share, respectively. The Company's current annual dividend is $1.08. The Company has declared a monthly dividend consecutively since going public in 2004.

The Company has a dividend reinvestment plan (the "DRIP") to provide eligible shareholders with a convenient means of reinvesting monthly dividends into additional common shares. For further information about the DRIP and DRIP enrolment please visit the Company's website located at www.liquorstoresna.com.

EARNINGS AND EARNINGS PER SHARE

Net earnings for the three months ended September 30, 2012 were $6.5 million compared to $11.0 million for the same period in 2011. The decrease in net earnings is primarily the result of non-recurring recoveries in 2011, which included proceeds from a litigation settlement of $4.9 million, and non-recurring expenses in 2012 of $1.9 million related to the departure of the Company's former President and Chief Executive Officer, which were offset by increases in gross margin and a decrease in income taxes.

Basic and diluted earnings per share for the three and nine months ended September 30, 2012 were $0.28 and $0.59 per share respectively (2011: $0.48 and $0.74).

Liquor Stores Summary Financial Results, three and nine months ended September 30, 2012 with comparisons to 2011


----------------------------------------------------------------------------
                                    Three months ended     Nine months ended
----------------------------------------------------------------------------
(expressed in thousands of                                                  
 Canadian dollars) except per     September  September  September  September
 share amounts)                    30, 2012   30, 2011   30, 2012   30, 2011
----------------------------------------------------------------------------
Sales                             $ 164,490  $ 157,080  $ 450,747  $ 423,258
----------------------------------------------------------------------------
Operating margin before non-                                                
 recurring items                  $  14,588  $  13,648  $  34,852  $  31,230
----------------------------------------------------------------------------
Operating margin                  $  12,635  $  13,298  $  31,656  $  30,201
----------------------------------------------------------------------------
Net earnings (note 1)             $   6,481  $  10,970  $  13,653  $  16,898
----------------------------------------------------------------------------
Diluted earnings per share                                                  
 (note 1)                         $    0.28  $    0.48  $    0.59  $    0.74
----------------------------------------------------------------------------
Cash dividends per share          $    0.27  $    0.27  $    0.81  $    0.81
----------------------------------------------------------------------------
Weighted average number of shares                                           
 outstanding - diluted (000's)       22,949     22,613     22,836     22,602
----------------------------------------------------------------------------
Stores in operation as at                                                   
 September 30                           244        236        244        236
----------------------------------------------------------------------------

Note 1 - Note that the decrease in net earnings and diluted earnings per share from 2011 to 2012 relates primarily to a $4.9 million one-time recovery from a lawsuit recorded in 2011.

The Management's Discussion and Analysis (MD&A) as well as the interim consolidated financial statements and notes for the three and nine months ended September 30, 2012 are available on the Company's website at this link: www.liquorstoresna.com and on the SEDAR website at www.sedar.com.

Conference Call

As previously announced, Liquor Stores N.A Ltd. will conduct an investor conference call on Wednesday November 7, 2012 to discuss results for the three and nine months ended September 30, 2012. The conference call will take place at 9:00 a.m. MST. Participants in the call include Jim Dinning, Chair of the Board of Directors and Interim Chief Executive Officer, Pat de Grace, Senior Vice President and Chief Financial Officer, Scott Morrow, Chief Operating Officer, and Craig Corbett, Vice President Legal, General Counsel & Corporate Secretary.

To take part in the call, please dial toll-free 1-877-240-9772. An archived recording of the conference call will be available approximately one hour after the completion of the call until November 15, 2012, by dialling 1-905-694-9451 or toll-free 1-800-408-3053. The required pass code is 6431970.

About Liquor Stores N.A. Ltd.

The Company currently operates 246 retail liquor stores in Alberta, British Columbia, Alaska and Kentucky. The Company's common shares and convertible subordinated debentures trade on the Toronto Stock Exchange under the symbols "LIQ" and "LIQ.DB.A".

Additional information about Liquor Stores N.A. Ltd. is available at www.sedar.com and the Company's website at www.liquorstoresna.com.

NON-IFRS FINANCIAL MEASURES

Operating margin, operating margin as a percentage of sales, operating margin before non-recurring items, EBITDA, cash provided by operating activities before changes in working capital and non-recurring items, cash provided by operating activities before changes in working capital and non-recurring items on a per share basis, and same store sales are not measures recognized by IFRS and do not have a standardized meaning prescribed by IFRS. Investors are cautioned that operating margin, operating margin as a percentage of sales, EBITDA, cash provided by operating activities before changes in working capital and non-recurring items, cash provided by operating activities before changes in working capital and non-recurring items on a per share basis, and same store sales should not replace net earnings or loss (as determined in accordance with IFRS) as an indicator of the Company's performance, of its cash flows from operating, investing and financing activities or as a measure of its liquidity and cash flows. The Company's method of calculating operating margin, operating margin as a percentage of sales, EBITDA, cash provided by operating activities before changes in working capital and non-recurring items, cash provided by operating activities before changes in working capital and non-recurring items on a per share basis, and same store sales may differ from the methods used by other issuers. Therefore, the Company's operating margin, operating margin as a percentage of sales, EBITDA, cash provided by operating activities before changes in working capital and non-recurring items, cash provided by operating activities before changes in working capital and non-recurring items on a per share basis, and same store sales may not be comparable to similar measures presented by other issuers.

EBITDA, which is used only with reference to the calculation of covenants under the Company's credit facility, is defined under the amended and restated credit facility as the net income of the Company plus the following: interest expense, provision for income taxes, any portion of expense in respect of non-cash items including any long-term incentive plan amounts not to be settled in cash, depreciation, amortization, deferred taxes, and non-recurring losses to a maximum of $3.5 million in any fiscal year, write down of goodwill and other restructuring charges for store closures, and amortization of inventory fair value adjustments. EBITDA is also less any non-recurring extraordinary or one-time gains from any capital asset sales or certain foreign currency transactions.

Cash provided by operating activities before changes in working capital and non-recurring items is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS and therefore is unlikely to be comparable to similar measures presented by other issuers. Investors are cautioned that this should not be construed as an alternative measure of profitability.

Operating margin for purposes of disclosure under "Operating Results" has been derived by subtracting Operating and Administrative expenses from Gross Margin. Operating margin as a percentage of sales is calculated by dividing operating margin by sales. Operating margin before non-recurring items has been derived by adding non-recurring items to operating margin as described above.

Non-recurring items include costs incurred and recoveries received by the Company that are not part of on-going operations and that are not expected to recur. Among others, these non-recurring items include costs associated with a store investment that was not completed, and professional fees paid in respect of lawsuits that originated following and arising from the Company's acquisition of Liquor Barn Income Fund in 2007 and the proceeds received on settlement of these matters.

Contacts:
Liquor Stores N.A. Ltd.
Patrick de Grace, CA
Senior Vice President and Chief Financial Officer
(780) 917-4179

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
Wearable devices have come of age. The primary applications of wearables so far have been "the Quantified Self" or the tracking of one's fitness and health status. We propose the evolution of wearables into social and emotional communication devices. Our BE(tm) sensor uses light to visualize the skin conductance response. Our sensors are very inexpensive and can be massively distributed to audiences or groups of any size, in order to gauge reactions to performances, video, or any kind of presentation. In her session at @ThingsExpo, Jocelyn Scheirer, CEO & Founder of Bionolux, will discuss ho...
The true value of the Internet of Things (IoT) lies not just in the data, but through the services that protect the data, perform the analysis and present findings in a usable way. With many IoT elements rooted in traditional IT components, Big Data and IoT isn’t just a play for enterprise. In fact, the IoT presents SMBs with the prospect of launching entirely new activities and exploring innovative areas. CompTIA research identifies several areas where IoT is expected to have the greatest impact.
Every day we read jaw-dropping stats on the explosion of data. We allocate significant resources to harness and better understand it. We build businesses around it. But we’ve only just begun. For big payoffs in Big Data, CIOs are turning to cognitive computing. Cognitive computing’s ability to securely extract insights, understand natural language, and get smarter each time it’s used is the next, logical step for Big Data.
The 4th International Internet of @ThingsExpo, co-located with the 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
There's no doubt that the Internet of Things is driving the next wave of innovation. Google has spent billions over the past few months vacuuming up companies that specialize in smart appliances and machine learning. Already, Philips light bulbs, Audi automobiles, and Samsung washers and dryers can communicate with and be controlled from mobile devices. To take advantage of the opportunities the Internet of Things brings to your business, you'll want to start preparing now.
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some form of XaaS – software, platform, and infrastructure as a service.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner is Product Manager of the Omega DevCloud with KORE Telematics Inc., will discuss the evolving requirements for developers as IoT matures and conduct a live demonstration of how quickly application development can happen when the need to comply...
Container frameworks, such as Docker, provide a variety of benefits, including density of deployment across infrastructure, convenience for application developers to push updates with low operational hand-holding, and a fairly well-defined deployment workflow that can be orchestrated. Container frameworks also enable a DevOps approach to application development by cleanly separating concerns between operations and development teams. But running multi-container, multi-server apps with containers is very hard. You have to learn five new and different technologies and best practices (libswarm, sy...
SYS-CON Events announced today that DragonGlass, an enterprise search platform, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. After eleven years of designing and building custom applications, OpenCrowd has launched DragonGlass, a cloud-based platform that enables the development of search-based applications. These are a new breed of applications that utilize a search index as their backbone for data retrieval. They can easily adapt to new data sets and provide access to both structured and unstruc...
Converging digital disruptions is creating a major sea change - Cisco calls this the Internet of Everything (IoE). IoE is the network connection of People, Process, Data and Things, fueled by Cloud, Mobile, Social, Analytics and Security, and it represents a $19Trillion value-at-stake over the next 10 years. In her keynote at @ThingsExpo, Manjula Talreja, VP of Cisco Consulting Services, will discuss IoE and the enormous opportunities it provides to public and private firms alike. She will share what businesses must do to thrive in the IoE economy, citing examples from several industry sector...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal an...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
Disruptive macro trends in technology are impacting and dramatically changing the "art of the possible" relative to supply chain management practices through the innovative use of IoT, cloud, machine learning and Big Data to enable connected ecosystems of engagement. Enterprise informatics can now move beyond point solutions that merely monitor the past and implement integrated enterprise fabrics that enable end-to-end supply chain visibility to improve customer service delivery and optimize supplier management. Learn about enterprise architecture strategies for designing connected systems tha...
There's Big Data, then there's really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at Big Data Expo®, Hannah Smalltree, Director at Treasure Data, discussed how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other machines...
SYS-CON Events announced today that the "First Containers & Microservices Conference" will take place June 9-11, 2015, at the Javits Center in New York City. The “Second Containers & Microservices Conference” will take place November 3-5, 2015, at Santa Clara Convention Center, Santa Clara, CA. Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists will peel away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud environment, and we must architect and code accordingly. At the very least, you'll have no problem fil...
IoT is still a vague buzzword for many people. In his session at @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, discussed the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. He also discussed how IoT is perceived by investors and how venture capitalist access this space. Other topics discussed were barriers to success, what is new, what is old, and what the future may hold. Mike Kavis is Vice President & Principal Cloud Architect at Cloud Technology Pa...
SYS-CON Events announced today that MetraTech, now part of Ericsson, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Ericsson is the driving force behind the Networked Society- a world leader in communications infrastructure, software and services. Some 40% of the world’s mobile traffic runs through networks Ericsson has supplied, serving more than 2.5 billion subscribers.