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Sales up at 3 Canadian chains

By Michael J. Knell -- Furniture Today, August 20, 2006

Toronto — All three of Canada's publicly held furniture and bedding retailers reported sales gains, but not necessarily improved earnings, for both the three- and six-month periods ended June 30.

Leading the pack was Leon's Furniture, which reported corporate sales of C$134 million in the second quarter, a 9.9% increase over the comparable period last year. Net earnings rose by 9.3% to C$8.3 million, or 47 Canadian cents per share.

Meanwhile, Leon's franchise sales were essentially flat at C$39 million.

The Brick Group Income Fund, based in Edmonton, Alberta —operators of The Brick, The Brick Superstore, The Brick Mattress Store and United Furniture Warehouse — said its sales for the second quarter were up 6.8% to C$313.1 million, while net earnings rose 2.2% to C$9.4 million, or 17 Canadian cents per trust unit.

Meanwhile, BMTC reported a slight sales gain to C$219.7 million in the second quarter. However, net earnings slipped X.X% to C$12.1 million, or 35 Canadian cents per share.

BMTC, the Montreal-based operator of both Brault & Martineau and Ameublements Tanguay, attributed the earnings drop to increased promotional costs and costs related to the opening of a new liquidation center.

"Given the very weak sales increase for the quarter, the company was unable to absorb these additional costs," said Yves Des Groseillers, BMTC's chairman, president and CEO.

For the first half, Leon's said its total revenues were C$328 million, including C$74 million of franchise sales, an increase of 6.2% over the comparable 2005 period.

Net income was C$18 million, or C$1.02 per share, a gain of 18.6%.

Terry Leon, president and CEO of the publicly held, family-managed full-line retailer, said the company will continue its aggressive expansion and renovation plans throughout the rest of the year.

"Our strong capital position will allow us to focus on increasing market share in existing and new markets going forward," said Leon. "Renovation and expansion plans will continue during 2006 and beyond."

Leon's ended the first half with cash and marketable securities of C$88.8 million — 10% more than the year before — which will finance the expansion plan.

The Brick Group had total sales of C$610.9 million in the first half, an increase of 11.6%. Net earnings advanced strongly to C$11.6 million, or 21 Canadian cents per trust unit.

Kim Yost, the Brick's president and CEO, attributed the gains to a variety of initiatives, including the re-bannering program that saw the group phase out both the HomeShow Canada and Sleep Better banners in favor of the Brick nameplate.

"We've accomplished much in these first six months of 2006 and we believe we are well positioned for the balance of 2006 to deliver strong results," Yost told analysts in a conference call.

For the first half, BMTC saw sales advance to C$406 million, up C$15.7 million over the comparable period of 2005.

Net earnings were C$12.4 million, or 36 Canadian cents per share, down from C$16.9 million, or 48 cents per share, last year.

The Brick Group Income Fund(a)
Owns The Brick, The Brick Superstore, The Brick Mattress Store and United Furniture Warehouse
Earnings per share are fully diluted.
Quarter ended 6/30	2006	2005	Change
(a) In Canadian dollars. (b) Includes a C$362,000 net gain on the sale of property in both periods.
Revenues	C$313,123,000	C$293,269,000	6.8%
Operating income	16,044,000	15,626,000	2.7%
Net income	(b)9,380,000	9,175,000	2.2%
Earnings per share	0.17	0.17	0.0%
6 months ended 6/30	2006	2005	Change
Revenues	C$610,854,000	C$547,502,000	11.6%
Operating income	25,291,000	20,512,000	23.3%
Net income	(b)11,594,000	6,838,000	69.6%
Earnings per share	0.21	0.13	61.5%

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Sales up at 3 Canadian chains

Aug 21, 2006

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