Reitmans (Canada) Limited announces its results for the three months ended May 4, 2013

MONTREAL, June 4, 2013 /CNW Telbec/ - Sales for the first quarter ended May 4, 2013 were $216,861,000 as compared with $217,094,000 for the first quarter ended April 28, 2012, a decrease of 0.1%. Same store sales1 decreased 3.5%, compared to the comparable 13 weeks ended May 5, 2012, impacted by our customers' preference to focus their expenditures on non-discretionary purchases, as well as unseasonable weather conditions that were prevalent during the period. Sales through the various banners' e-commerce channels showed significant gains, with a 96% increase in sales for the first quarter ended May 4, 2013 as compared to the first quarter ended April 28, 2012. The Company's gross margin remained unchanged at 64.6% for the first quarter ended May 4, 2013 as compared to the first quarter ended April 28, 2012. The Company recorded a net loss of $2,586,000 ($0.04 diluted loss per share) for the first quarter ended May 4, 2013 as compared with a net loss of $119,000 ($0.00 diluted loss per share) for the first quarter ended April 28, 2012. In the first quarter ended May 4, 2013, adjusted EBITDA1 was $10,683,000 as compared with $12,451,000 for the first quarter ended April 28, 2012, a decrease of 14.2%.

Early in 2013, management began a corporate initiative to analyze and review its processes, expenditures and complement of employees throughout the Company. The purpose of this initiative is to develop and implement a plan targeted at improving efficiencies and costs at the Company. We have made progress during the first quarter ended May 4, 2013 on this initiative and identified areas within our business that will enable us to realize considerable savings without adversely affecting our business. This initiative included a reduction in the number of our employees and resulted in severance costs of approximately $1,000,000 in the first quarter ended May 4, 2013. These terminations are projected to result in annualized savings of approximately $3,000,000.

During the first quarter, the Company opened 13 new stores, comprised of 2 Reitmans, 1 Smart Set, 9 Penningtons and 1 Addition Elle. Fifteen stores were closed, comprised of 4 Reitmans, 2 Smart Set, 5 Penningtons and 4 Addition Elle. At May 4, 2013, there were 909 stores in operation, consisting of 359 Reitmans, 145 Smart Set, 73 RW & CO., 72 Thyme Maternity, 157 Penningtons and 103 Addition Elle, as compared with a total of 925 stores as at April 28, 2012. In addition, there were 20 Thyme Maternity boutiques in select Babies"R"Us locations in Canada and 154 boutiques in Babies"R"Us stores in the United States.

Sales for the month of May (the four weeks ended June 1, 2013) decreased 4.7% with same store sales1 decreasing 5.5%.

At the Board of Directors meeting held on June 4, 2013, a quarterly cash dividend (constituting eligible dividends) of $0.20 per share on all outstanding Class A non-voting and Common shares of the Company was declared, payable July 25, 2013 to shareholders of record on July 11, 2013.

1Non-GAAP Financial Measures

In addition to discussing earnings in accordance with IFRS, this press release provides adjusted EBITDA as a supplementary earnings measure, which is defined as earnings (loss) before income taxes, dividend income, interest income, realized gains or losses on disposal of available-for-sale financial assets, impairment losses on available-for-sale financial assets, interest expense, depreciation, amortization and net impairment losses related to property and equipment. The Company also discloses same store sales, which are defined as sales generated by stores that have been open for at least one year. The Company believes these measures provide meaningful information on the Company's performance and operating results. However, readers should know that these non-GAAP financial measures have no standardized meaning as prescribed by IFRS and may not be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation.

The following table reconciles adjusted EBITDA to loss before income taxes for the three months ended May 4, 2013 and April 28, 2012:

Forward-Looking Statements

All of the statements contained herein, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond the Company's control. Such risks include but are not limited to: the impact of general economic conditions, general conditions in the retail industry, seasonality, weather and other risks included in public filings of the Company. Consequently, actual future results may differ materially from the anticipated results expressed in forward-looking statements. The reader should not place undue reliance on the forward-looking statements included herein. These statements speak only as of the date made and the Company is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, except to the extent required under applicable securities law.

The Company's unaudited condensed consolidated interim financial statements including notes and Management's Discussion and Analysis for the first quarter ended May 4, 2013 are available online at www.sedar.com.

Montreal, June 4, 2013

Jeremy H. Reitman
Chairman and Chief Executive Officer

Telephone: (514) 385-2630
Corporate Website: www.reitmans.ca

REITMANS (CANADA) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands of Canadian dollars except per share amounts)

REITMANS (CANADA) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in thousands of Canadian dollars)

REITMANS (CANADA) LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of Canadian dollars)

REITMANS (CANADA) LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(in thousands of Canadian dollars)

REITMANS (CANADA) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands of Canadian dollars)

SOURCE: Reitmans (Canada) Limited