Welcome!

SOA & WOA Authors: Andrew Phillips, Scott Bampton, Carmen Gonzalez, Gilad Parann-Nissany, Liz McMillan

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
SYS-CON Events announced today that Harbinger Systems will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Harbinger Systems is a global company providing software technology services. Since 1990, Harbinger has developed a strong customer base worldwide. Its customers include software product companies ranging from hi-tech start-ups in Silicon Valley to leading product companies in the US and large in-house IT organizations.
The only place to be June 9-11 is Cloud Expo & @ThingsExpo 2015 East at the Javits Center in New York City. Join us there as delegates from all over the world come to listen to and engage with speakers & sponsors from the leading Cloud Computing, IoT & Big Data companies. Cloud Expo & @ThingsExpo are the leading events covering the booming market of Cloud Computing, IoT & Big Data for the enterprise. Speakers from all over the world will be hand-picked for their ability to explore the economic strategies that utility/cloud computing provides. Whether public, private, or in a hybrid form, clo...
SYS-CON Events announces a new pavilion on the Cloud Expo floor where WebRTC converges with the Internet of Things. Pavilion will showcase WebRTC and the Internet of Things. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices--computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades.
SYS-CON Events announced today that Gridstore™, the leader in software-defined storage (SDS) purpose-built for Windows Servers and Hyper-V, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Gridstore™ is the leader in software-defined storage purpose built for virtualization that is designed to accelerate applications in virtualized environments. Using its patented Server-Side Virtual Controller™ Technology (SVCT) to eliminate the I/O blender effect and accelerate applications Gridsto...
SYS-CON Events announced today that Red Hat, the world's leading provider of open source solutions, will exhibit at Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Red Hat is the world's leading provider of open source software solutions, using a community-powered approach to reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies. Red Hat also offers award-winning support, training, and consulting services. As the connective hub in a global network of enterprises, partners, a...
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at Internet of @ThingsExpo, Andrew Bolwell, Director of Innovation for HP’s Printing and Personal Systems Group, will discuss how key attributes of mobile technology – touch input, senso...
The Internet of Things (IoT) is making everything it touches smarter – smart devices, smart cars and smart cities. And lucky us, we’re just beginning to reap the benefits as we work toward a networked society. However, this technology-driven innovation is impacting more than just individuals. The IoT has an environmental impact as well, which brings us to the theme of this month’s #IoTuesday Twitter chat. The ability to remove inefficiencies through connected objects is driving change throughout every sector, including waste management. BigBelly Solar, located just outside of Boston, is trans...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, will examine three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics...
Internet of @ThingsExpo Silicon Valley announced on Thursday its first 12 all-star speakers and sessions for its upcoming event, which will take place November 4-6, 2014, at the Santa Clara Convention Center in California. @ThingsExpo, the first and largest IoT event in the world, debuted at the Javits Center in New York City in June 10-12, 2014 with over 6,000 delegates attending the conference. Among the first 12 announced world class speakers, IBM will present two highly popular IoT sessions, which will take place November 4-6, 2014 at the Santa Clara Convention Center in Santa Clara, Calif...
The Internet of Things (IoT) promises to evolve the way the world does business; however, understanding how to apply it to your company can be a mystery. Most people struggle with understanding the potential business uses or tend to get caught up in the technology, resulting in solutions that fail to meet even minimum business goals. In his session at Internet of @ThingsExpo, Jesse Shiah, CEO / President / Co-Founder of AgilePoint Inc., will show what is needed to leverage the IoT to transform your business. He will discuss opportunities and challenges ahead for the IoT from a market and tec...
SYS-CON Events announced today that TeleStax, the main sponsor of Mobicents, will exhibit at Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. TeleStax provides Open Source Communications software and services that facilitate the shift from legacy SS7 based IN networks to IP based LTE and IMS networks hosted on private (on-premise), hybrid or public clouds. TeleStax products include Restcomm, JSLEE, SMSC Gateway, USSD Gateway, SS7 Resource Adaptors, SIP Servlets, Rich Multimedia Services, Presence Services/RCS, Diame...
From a software development perspective IoT is about programming "things," about connecting them with each other or integrating them with existing applications. In his session at @ThingsExpo, Yakov Fain, co-founder of Farata Systems and SuranceBay, will show you how small IoT-enabled devices from multiple manufacturers can be integrated into the workflow of an enterprise application. This is a practical demo of building a framework and components in HTML/Java/Mobile technologies to serve as a platform that can integrate new devices as they become available on the market.
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurring their adoption by amplifying "faint signals" from the alpha geeks who are creating the future. An...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
SYS-CON Events announced today that Aria Systems, the recurring revenue expert, has been named "Bronze Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue business and deliver exceptional experiences to their customers.
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce the value of the network in helping organizations to maximize their company’s cloud experience.
As a disruptive technology, Web Real-Time Communication (WebRTC), which is an emerging standard of web communications, is redefining how brands and consumers communicate in real time. The on-going narrative around WebRTC has largely been around incorporating video, audio and chat functions to apps. In his session at Internet of @ThingsExpo, Alex Gouaillard, Founder and CTO of Temasys Communications, will look at a fourth element – data channels – and talk about its potential to move WebRTC beyond browsers and into the Internet of Things.
SYS-CON Events announced today that Gigaom Research has been named "Media Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Ashar Baig, Research Director, Cloud, at Gigaom Research, will also lead a Power Panel on the topic "Choosing the Right Cloud Option." Gigaom Research provides timely, in-depth analysis of emerging technologies for individual and corporate subscribers. Gigaom Research's network of 200+ independent analysts provides new content daily that bridges the gap between break...
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
The Industrial Internet revolution is now underway, enabled by connected machines and billions of devices that communicate and collaborate. The massive amounts of Big Data requiring real-time analysis is flooding legacy IT systems and giving way to cloud environments that can handle the unpredictable workloads. Yet many barriers remain until we can fully realize the opportunities and benefits from the convergence of machines and devices with Big Data and the cloud, including interoperability, data security and privacy.