The North West Company Announces Record Earnings; Ian Sutherland named Chairman; Edward Kennedy named President and Chief Executive Officer.WINNIPEG, MANITOBA--(BUSINESS WIRE)--Dec. 11, 1996--The North West Company (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). , WINNIPEG STOCK EXCHANGE NWC NWC Network Computing (Magazine) NWC Northwest College (Powell, Wyoming) NWC Northwestern College (Orange City, IA, USA) NWC Northwestern College (St. .) (the "Company") has announced its third quarter results for the period ended October 26, 1996. CONSOLIDATED RESULTS Earnings for the third quarter increased 37.6 percent to $4.6 million, or $0.31 per share from $3.4 million, or $0.21 per share last year. Revenue for the third quarter at $146.3 million was $1.3 million or 0.9 percent greater than last year. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the quarter increased 10.1 percent to $10.0 million. Earnings for the first nine months of the fiscal year at $12.1 million increased 55.7 percent or $4.3 million to $0.80 per share compared to $0.48 last year. Inventories have been reduced by 10.2 percent primarily through re-profiling merchandise assortments which contributed to reduced sales in categories that have been down-sized but improved gross margin rates. Third quarter interest expenses were 14.3 percent less than last year because of the decline in short term rates. Income tax rates were reduced to 33.9 percent from 39.8 percent due to tax sheltered tax shelter: see tax exemption. Alaskan earnings and improved equity earnings from transportation investments. CANADIAN OPERATIONS Canadian revenues at $114.9 million increased 1.4 percent in the third quarter compared to last year while operating profit was up 6.7 percent to $9.3 million. Food sales, representing 65 percent of total sales, remained strong with a 3.8 percent increase in comparable stores in the quarter. General merchandise sales declined 4.6 percent on a comparable store basis due to the transfer of selling space to foods and constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. on customers' disposable income disposable income Portion of an individual's income over which the recipient has complete discretion. To assess disposable income, it is necessary to determine total income, including not only wages and salaries, interest and dividend payments, and business profits, but also . Merchandise re-profiling in the stores contributed to a 0.7 point improvement in gross margins and to a reduction in inventory levels. Overall comparable sales increased 0.7 percent in the third quarter. ALASKAN OPERATIONS (stated in U.S. dollars) Alaska Commercial Company The Alaska Commercial Company was a company that operated retail stores in Alaska during the early period of Alaska's ownership by the United States. It began when businessmen from San Francisco, California, using the name Hutchinson, Kohl & Company, bought the commercial interests (AC) sales for the third quarter decreased 2.5 percent to $22.9 million while operating profit increased $258,000 or 116 percent to $481,000. Operating profits of $857,000 in Alaska for the nine months have demonstrated a significant turnaround from the loss of $1.5 million recorded in 1995. Sales were impacted by the closing of three home centre operations, the downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing of the marina business and the temporary disruption of one store because of a fire. Despite these factors, food sales, which represented 70 percent of total sales, increased by 2.9 percent. Overall gross margin rates improved by 1.5 points and operating costs operating costs npl → gastos mpl operacionales were cut by 1.2 percent as AC continued to aggressively pursue profitable local sales opportunities and exit less attractive categories. HIGHLIGHTS - Record earnings per share of $0.80 were reported for the nine months ending October 1996 compared to $0.48 in 1995 and $0.69 in 1994. - Selections Winter '96 catalogue delivered a 31 percent sales increase in the third quarter and continues to benefit from its expanded presentation and improved service levels. - One store was opened during the quarter and one store was closed pending resolution of a land dispute. MANAGEMENT SUCCESSION The Company is pleased to announce the appointment, effective March 20, 1997, of Ian Sutherland Ian Sutherland is the Mayor of the District of Squamish, British Columbia, Canada. Sutherland has been the mayor of the District of Squamish since November 2002. He won the elections by a large margin in Squamish's first local slate, Squamish New Directions (SND). to the position of Chairman, and Edward Kennedy to the position of President and Chief Executive Officer. Ian Sutherland has been President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of NWC since November 1993 and a Director of the Company since 1987. Edward Kennedy has been Executive Vice-President of NWC since November 1993, Chairman and CEO of NWC's wholly-owned subsidiary, Alaska Commercial Company ("AC"), since March 1995, and a Director of the Company since September 1996. "Ian Sutherland has had an active involvement with the Company and the North since he led the buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. of Northern Stores from the Hudson's Bay Company Hudson's Bay Company, corporation chartered (1670) by Charles II of England for the purpose of trade and settlement in the Hudson Bay region of North America and for exploration toward the discovery of the Northwest Passage to Asia. in 1987", stated Iain Ronald, the retiring Chairman, who will remain a Director of the Company. "He will remain in Winnipeg and will focus on the governance, financing and strategic development of the Company." Mr. Kennedy, 37, who was born and raised in The Pas, Manitoba, brings to his new position seven years of experience with NWC and an in-depth knowledge of the North. He has played a key role in the Company's growth, first as Vice-President, Corporate Development and then as Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , prior to relocating to Anchorage Anchorage (ăng`kərĭj), city (1990 pop. 226,338), Anchorage census div., S central Alaska, a port at the head of Cook Inlet; inc. 1920. to assume direct responsibility for the NWC's Alaskan operations in 1995. "Edward's past responsibilities have combined strategic direction-setting with hands-on operating experience in both the Canadian and U.S. retail markets," Mr. Sutherland said. "His experience in developing successful new formats like NorthMart, and repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. the Company's under performing operations in Alaska, uniquely qualify him to take on this new challenge as we continue to build on NWC's strengths." In addition to his new responsibilities, Mr. Kennedy will remain Chairman and CEO of AC. Jerry Bittner will become AC's President and Chief Operating Officer, effective March 20, 1997. Mr. Bittner, who has held senior merchandising positions with U.S. food, discount general merchandise and warehouse club retail formats, has been Vice-President, Marketing of AC since February 1996. DIVIDEND Your directors have declared a regular quarterly cash dividend of $0.10 per share payable January 31, 1997, to shareholders of record on December 31, 1996. -0-
FINANCIAL HIGHLIGHTS (000'S)
Three Months Nine Months
Ended Ended
October 26 October 28 October 26 October 28
1996 1995 1996 1995
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Sales and
other revenue $146,277 $144,956 $431,165 $435,458
Operating profit 9,983 9,067 29,168 22,711
Earnings
for the period $4,631 $3,366 $12,147 $7,802
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Earnings per share:
Basic and
fully diluted $0.31 $0.21 $0.80 $0.48
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Average number
of shares
outstanding 15,000,000 15,922,248 15,126,243 16,131,705
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-0- The North West Company, operating in Canada as Northern and in Alaska as AC Value Centers, is North America's leading retailer of food, family apparel and general merchandise in northern communities. The Company trades on the Toronto and Winnipeg Stock Exchanges under the symbol "NWC". CONTACT: The North West Company Gary Eggertson, 204/934-1503 204/934-1455 (FAX) REPEATS: New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of 212-752-9600 or 800-221-2462; Boston 617-236-4266 or |
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