La Senza Corporation Increases Dividend Following Strong Improvement in First Quarter Results.MONTREAL Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. -- La Senza La Senza is a large Canadian lingerie chain which specialises in high street stores and internet shopping. Since its first store opened in 1990 the company has grown to include around 300 stores in Canada and another 300 stores in 30 other countries worldwide. Corporation (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :LSZ LSZ Limited Speed Zone (UK) LSZ Lëtzebuerger Studenten zu Zürech (Society of Luxembourg Students in Zurich) LSZ Least Zone Straight Line (parallel lines enclosing all points on a graph) .SV) today reported net earnings of $1.7 million or $0.13 per share for the quarter ended April 30, 2005 compared to a net loss of $4.2 million or $0.32 per share for the quarter ended May 1, 2004. The quarterly financial results include a loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the planned closure of the Company's U.S. operation.The results of the U.S. operations for the corresponding period of the previous year have been reclassified as discontinued operations.Excluding losses from discontinued operations, earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the amounted to $2.6 million or $0.20 per share for the first quarter of fiscal 2006 compared to a loss of $3.0 million or $0.22 per share for the first quarter of the prior year. Earnings from continuing operations before interest, foreign exchange, income taxes, depreciation and amortization and loss in a significantly influenced company (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) amounted to $9.9 million for the current first quarter versus $3.8 million for the first quarter of the prior year. Sales for the quarter ended April 30, 2005 amounted to $83.4 million compared to $71.0 million for the quarter ended May 1, 2004, an increase of 17.4%.Comparable store sales (stores open more than a year) increased by 10.3% in the current first quarter over the prior year first quarter. Mr. Irving Irving, city (1990 pop. 155,037), Dallas co., N Tex., a suburb of Dallas; inc. as a city 1952. Building supplies, chemicals, electronic equipment, and airplane parts are manufactured in Irving. Teitelbaum Teitelbaum (טײטלבױם teytlboym) is a Jewish surname, which may refer to:
The quarterly dividend of $0.16 per share is payable on June June: see month. 27, 2005 to shareholders of record as of June 13, 2005. La Senza Corporation, headquartered in Montreal, is a specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. retailer with 297 corporate owned stores as at May 30, 2005, offering fashionable lingerie and sleepwear sold in its 217 "La Senza" and "Silk silk, fine, horny, translucent, yellowish fiber produced by the silkworm in making its cocoon and covered with sericin, a protein. Many varieties of silk-spinning worms and insects are known, but the silkworm of commerce is the larva of the Bombyx mori, & Satin" stores, and fashionable apparel for girls sold in its 75 "La Senza Girl" stores.Stores are located in every province in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and five La Senza stores are located in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . In addition, 244 independently owned "La Senza" and "La Senza Girl" stores are operating in 21 other countries under license. Forward-looking statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Except for historical information provided herein, this press release may contain information and statements of a forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. nature concerning the future performance of the Company. These statements are based on suppositions and uncertainties, as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for the Company's products and services, the impact of price pressures exerted by competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. , and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.
La Senza Corporation - Corporation La Senza
Consolidated Balance Sheets
(thousands of dollars)
As at As at As at
April 30, May 1, January 29,
2005 2004 2005
Unaudited Unaudited Audited
(restated)
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ASSETS
Current
Cash $ - $ - $ 18,347
Short-term investments 23,836 5,577 23,216
Marketable securities 25,249 20,098 25,782
Accounts and sundry 9,483 8,554 7,063
receivables
Income taxes recoverable 1,152 4,150 1,428
Inventory 49,353 45,763 39,753
Prepaid expenses 4,434 9,503 2,190
Assets of discontinued
operations 767 - 2,286
Future income taxes 7,750 8,162 8,387
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122,024 101,807 128,452
Fixed Assets 81,445 87,585 82,844
Trademarks 1,236 1,174 1,199
Assets of Discontinued
Operations - - 359
Future Income Taxes 2,872 813 2,872
Investment in Significantly
Influenced Company - 24,361 -
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207,577 215,740 215,726
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LIABILITIES
Current
Bank indebtedness 3,372 20,846 -
Accounts payable and
accrued liabilities 25,375 22,811 35,169
Current maturity of
obligations under
capital leases 11,158 9,529 11,588
Current maturity of
long-term debt 113 1,047 104
Liabilities of discontinued
operations 3,418 - 4,317
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43,436 54,233 51,178
Obligations Under Capital
Leases 23,037 21,958 25,326
Long-Term Debt 2,679 6,396 2,711
Deferred Lease Inducements 8,579 6,874 8,193
Future Income Taxes 70 1,179 70
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77,801 90,640 87,478
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Commitments and Contingencies
SHAREHOLDERS' EQUITY
Capital Stock 31,921 31,616 31,781
Contributed Surplus 9,603 8,618 9,423
Retained Earnings 88,252 84,866 87,044
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129,776 125,100 128,248
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$ 207,577 $ 215,740 $ 215,726
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See accompanying notes
La Senza Corporation - Corporation La Senza
Consolidated Statements of Retained Earnings
Unaudited (thousands of dollars)
Three Months Ended
---------------------------------------------------------------------
April 30, May 1,
2005 2004
(restated)
Balance - Beginning of
Period $87,044 $89,779
Retroactive effect of
adopting fair value-based
method for share options - (667)
Net earnings (loss) 1,747 (4,246)
Dividends on subordinate
voting shares (339) -
Dividends on multiple
voting shares (200) -
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Balance - End of Period $88,252 $84,866
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See accompanying notes
La Senza Corporation - Corporation La Senza
Consolidated Statements of Earnings
Unaudited (thousands of dollars, except earnings per share)
Three Months Ended
---------------------------------------------------------------------
April 30, May 1,
2005 2004
(restated)
Sales $83,400 $71,019
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Cost, Expenses and Other
Cost of sales and store,
warehouse, general,
administrative and sales
support expenses 73,607 67,372
Amortization 5,539 4,262
Interest on obligations under
capital leases 517 509
Interest on long-term debt 57 59
Other interest (8) 91
Foreign exchange gain (134) (166)
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79,578 72,127
---------------------------------------------------------------------
Operating Income (Loss) 3,822 (1,108)
Interest income on short-term
investments 265 100
Other income 67 130
Foreign exchange gain (loss)
on investment activities (117) 245
Equity in net loss of a
significantly influenced company - (2,565)
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Earnings (Loss) from Continuing
Operations Before Income Taxes 4,037 (3,198)
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Income Taxes 1,411 (205)
---------------------------------------------------------------------
Earnings (Loss) from Continuing
Operations 2,626 (2,993)
Discontinued operations,
net of income taxes (879) (1,253)
---------------------------------------------------------------------
Net Earnings (Loss) $1,747 $(4,246)
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Basic and Diluted Earnings (Loss) Per Share
Continuing Operations $0.20 $(0.22)
Net Earnings (Loss) $0.13 $(0.32)
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Weighted Average Number
of Shares Outstanding-Basic 13,459,723 13,416,715
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Weighted Average Number
of Shares Outstanding-Diluted 13,461,769 13,416,715
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See accompanying notes
La Senza Corporation - Corporation La Senza
Consolidated Statements of Cash Flows
Unaudited (in thousands of dollars)
Three Months Ended
---------------------------------------------------------------------
April 30, May 1,
2005 2004
(restated)
Funds Provided (Used)
Operating Activities
Earnings (loss) from
continuing operations $2,626 $(2,993)
Amortization 5,539 4,262
Amortization of deferred
lease inducements (420) (370)
Stock-based compensation expense 180 99
Equity in net loss of a
significantly influenced company - 2,565
Future income taxes 637 503
Deferred lease inducements 806 223
Foreign exchange (gain) loss
on investment activities 117 (245)
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9,485 4,044
Changes in non-cash operating
elements of working capital (23,782) (20,175)
---------------------------------------------------------------------
(14,297) (16,131)
---------------------------------------------------------------------
Financing Activities
Issue of subordinate voting shares 140 10
Repayments of obligations under
capital leases (2,861) (2,328)
Repayment of long-term debt (23) (21)
Dividends (539) -
---------------------------------------------------------------------
(3,283) (2,339)
---------------------------------------------------------------------
Investing Activities
Short-term investments and
marketable securities (204) (119)
Additions to fixed assets (3,953) (6,164)
Additions to trademarks (82) (100)
---------------------------------------------------------------------
(4,239) (6,383)
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Cash used in continuing operations (21,819) (24,853)
Cash provided by (used in)
discontinued operations 100 (5,953)
---------------------------------------------------------------------
Net Decrease in Cash (21,719) (30,806)
Cash (Bank Indebtedness)
Beginning of Period 18,347 9,960
---------------------------------------------------------------------
End of Period $(3,372) $(20,846)
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See accompanying notes
Notes to the Consolidated Financial Statements
(tabular amounts are expressed in thousands of dollars, except per
share amounts)
1 - Financial Statement Presentation
The interim consolidated statements have been prepared in accordance
with Canadian generally accepted accounting principles ("GAAP"),
using the same accounting policies and methods of computation as were
used for the consolidated financial statements for the year ended
January 29, 2005. They do not include all the disclosures required by
GAAP in annual financial statements and, accordingly, should be read
in conjunction with the consolidated financial statements for the
year ended January 29, 2005.
2 - Seasonal Variations
Results of operations are subject to significant seasonal variations
and, accordingly, the operating income for the three months ended
April 30, 2005 is not necessarily indicative of the results of
operations for a full year.
3 - Change in Accounting Policies
Vendor Discounts
In January 2004, the Emerging Issues Committee of the CICA released
Abstract 144 (EIC - 144) "Accounting By a Customer (Including a
Reseller) for Certain Consideration Received From a Vendor". EIC -
144 specifies the accounting method to be applied to considerations
received from a vendor. EIC - 144 requires the Company to record cash
considerations received from a vendor as a reduction in the price of
the vendor's products and reflect them as a reduction of cost of
sales and related inventory when they are recognized in the income
statement and balance sheet.
The Company applied this new recommendation in the fourth quarter of
fiscal 2005. As a result of the retroactive application of this new
standard, the financial statements for the three months ended May 1,
2004 have been restated. The impact on previously reported balances
is as follows:
Three Months
Ended
---------------------------------------------------------------------
May 1,
2004
---------------------------------------------------------------------
$
Cost of sales and store, warehouse,
general, administration and sales support expenses (63)
Earnings from continuing operations before income taxes 63
Income tax expense 23
Earnings from continuing operations 40
Net earnings 40
Retained earnings - end of period 40
Inventory 63
Income taxes recoverable 480
Future income tax asset (503)
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Reporting Segment
The Company assessed the long-term economic characteristics for the
La Senza and La Senza Girl segments and has determined that it meets
the criteria for aggregating the operating segments and, accordingly,
considers that it currently has a single reporting segment.
As a result, segmented results for La Senza and La Senza Girl will no
longer be presented.
4 - Discontinued Operations
In January 2005, the Company approved a plan to discontinue the U.S.
operations of La Senza and, accordingly, the results and cash flows
of the U.S. operations for the current and prior periods have been
presented as discontinued operations. The net assets of these
operations are presented as assets/liabilities of discontinued
operations since the date the plan was approved.
The results of discontinued operations were as follows:
Three Months Ended
---------------------------------------------------------------------
April 30, May 1,
2005 2004
---------------------------------------------------------------------
$ $
Sales 2,468 2,785
---------------------------------------------------------------------
Operating losses (1,323) (1,232)
Income taxes (444) 21
---------------------------------------------------------------------
Loss from Discontinued Operations,
Net of Income Taxes (879) (1,253)
---------------------------------------------------------------------
---------------------------------------------------------------------
Basic and Diluted Loss Per Share from
Discontinued Operations (0.07) (0.10)
---------------------------------------------------------------------
---------------------------------------------------------------------
The net assets of discontinued operations are summarized as follows:
As at As at As at
April 30, May 1, January 29,
2005 2004 2005
---------------------------------------------------------------------
$ $ $
Current assets 767 - 2,286
Fixed assets - - 359
---------------------------------------------------------------------
767 - 2,645
Current liabilities 3,418 - 4,317
---------------------------------------------------------------------
Net assets from discontinued
operations (2,651) - (1,672)
---------------------------------------------------------------------
---------------------------------------------------------------------
The cash flows from discontinued operations are summarized as
follows:
Three Months Ended
---------------------------------------------------------------------
April 30, May 1,
2005 2004
---------------------------------------------------------------------
$ $
Cash flows provided by (used in)
operating activities 100 (7,653)
Cash flows from investing activities - 1,700
---------------------------------------------------------------------
100 (5,953)
---------------------------------------------------------------------
---------------------------------------------------------------------
5 - Earnings (Loss) Per Share
Basic and diluted per share amounts are based on the following
weighted average number of shares outstanding:
---------------------------------------------------------------------
Three Months Ended
---------------------------------------------------------------------
April 30, May 1,
2005 2004
---------------------------------------------------------------------
Weighted Average Number of Shares
Outstanding - Basic 13,459,723 13,416,715
Assumed exercise of share options 2,046 -
---------------------------------------------------------------------
Weighted Average Number of Shares
Outstanding - Diluted 13,461,769 13,416,715
---------------------------------------------------------------------
---------------------------------------------------------------------
Earnings from continuing operations have been used as a control
number in determining if the inclusion of share options in the
diluted per share calculation is dilutive. In addition, in periods
where the inclusion of share options is dilutive, only those having
an exercise price below the average market price of subordinate
voting shares during the period are included in the computation. The
number of excluded share options was 60,000 for the three months
ended April 30, 2005. As a result of the loss from continuing
operations for the three months ended May 1, 2004, diluted loss per
share was calculated using the basic weighted average shares
outstanding because to do so otherwise would have been anti-dilutive.
6 - Contingent Liabilities
Class Action Suit
On August 19, 2004, a class action suit was filed against the Company
and certain of its officers in the United States District Court,
Central District of California, alleging that the Company and two of
its officers violated section 20A of the US Securities Exchange Act
of 1934 relating to contemporaneous insider trading in relation to
the sale by the Company of its investment in The Wet Seal, Inc. ("Wet
Seal"). The Company and its officers deny all allegations of
wrongdoing made in this suit, consider the allegations groundless and
without merit, and intend to vigorously defend against this action.
No provision has been made with respect to this matter.
United States Securities and Exchange Commission Informal Inquiry
On February 4, 2005, the United States Securities and Exchange
Commission ("SEC") announced an informal inquiry relating to Wet Seal
and requesting Wet Seal to voluntarily provide the SEC with a
detailed chronology of events and certain documents pertaining to Wet
Seal's public announcements on August 5, 9 and 19, 2004. The SEC
inquiry also requested all information relating to the sale of Wet
Seal shares by the Corporation during 2004 and by two if its officers
and their holding companies during 2005. On April 22, 2005, the two
officers of the Company each received a subpoena for documents only
from the SEC pursuant to a formal order of investigation dated April
19, 2005. The subpoenas seek documents relating to the sale of Wet
Seal shares by the Corporation in 2004 and by the two officers and
their holding companies during 2005, and related topics. At this
early stage, it is not possible to give any opinion as to the likely
outcome of the SEC investigation. No provision has been made with
respect to this matter.
7 - Contributed Surplus
Three Months Ended
---------------------------------------------------------------------
April 30, May 1,
2005 2004
---------------------------------------------------------------------
$ $
Balance - beginning of period 9,423 7,852
Stock-based compensation
expense - prior periods - 667
Stock-based compensation
expense - current period 180 99
---------------------------------------------------------------------
Balance - end of period 9,603 8,618
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8 - Comparative figures
Certain comparative figures have been reclassified to conform to the
current period's presentation.
LA SENZA CORPORATION (TSX:LSZ.SV) |
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