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Michael Knell

Third-quarter earnings climb 23% for The Brick

EDMONTON, Alberta — Net income showed a marked improvement for The Brick in the third quarter even though consolidated sales fell slightly short of the year-earlier mark.

Just prior to publishing its third quarter results, The Brick announced that it would be acquired by its archrival, Toronto-based Leon's Furniture, in a deal valued at about C$700 million that is expected to close in the first quarter.

For the three months ending Sept. 30, The Brick reported total system sales of C$417.4 million, a slip of 0.4% from the same quarter of 2011.

Corporate store sales were C$368.5 million, down 0.6% as same store sales increased by 0.8%, which the company attributed to a smaller store count - 162 compared with 173 at the end of 2011's third quarter.

Meanwhile, franchise store sales were up 1.6% to C$48.9 million. The Brick ended the quarter with a franchise network of 66 stores, a gain of six over the comparable period.

It said sales in its retail segment - essentially product sold on the floor - decreased by 0.4% to C$348.6 million, mainly because of store closures.

The company's financial services segment - which includes sales of extended warranties, financing and other added value services - were 4.7% lower at C$19.9 million.

Net income for the period was C$18.7 million or 16 cents per share, a gain of 23.3% from the C$15.1 million or 12 cents per share for the third quarter of 2011.

For the nine months ended Sept. 30, The Brick had total system sales of C$1.12 billion up 0.3%. Corporate sales were down 0.3% to C$985.9 million as same store sales gained 1%. Franchise network sales were up 5.0% to C$135.8 million.

Retail segment sales were flat at C$926.4 million while financial services were down 5.5% at C$59.5 million.

Net income was C$20.3 million or 17 cents per share, down 10.3% from C$22.7 million or 29 cents per share for the same period in 2011.

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