TORONTO, ONTARIO--(Marketwired - May 8, 2015) - Danier Leather Inc. (TSX:DL) ("Danier" or the "Company") today announced its unaudited interim consolidated financial results for the 13-week and 39-week periods ended March 28, 2015.
FINANCIAL HIGHLIGHTS ($000s, except earnings per share (EPS), square footage and number of stores):
| |
|
|
|
|
|
|
| |
|
For the 13 Weeks Ended |
|
|
For the 39 Weeks Ended |
|
| |
|
Mar. 28, 2015 |
|
|
Mar. 29, 2014 |
|
|
Mar. 28, 2015 |
|
|
Mar. 29, 2014 |
|
| Sales |
|
$ |
26,295 |
|
|
$ |
31,011 |
|
|
$ |
102,577 |
|
|
$ |
117,221 |
|
| EBITDA(1) |
|
|
(4,651 |
) |
|
|
(4,694 |
) |
|
|
(6,186 |
) |
|
|
1,587 |
|
| Adjusted EBITDA(1) |
|
|
(4,406 |
) |
|
|
(4,225 |
) |
|
|
(6,415 |
) |
|
|
2,254 |
|
| Net Loss |
|
|
(4,136 |
) |
|
|
(4,286 |
) |
|
|
(6,578 |
) |
|
|
(983 |
) |
| EPS - Basic |
|
$ |
(1.07 |
) |
|
$ |
(1.12 |
) |
|
$ |
(1.71 |
) |
|
$ |
(0.26 |
) |
| EPS - Diluted |
|
$ |
(1.07 |
) |
|
$ |
(1.12 |
) |
|
$ |
(1.71 |
) |
|
$ |
(0.26 |
) |
| Number of Stores |
|
|
87 |
|
|
|
89 |
|
|
|
87 |
|
|
|
89 |
|
| Retail Square Footage |
|
|
276,985 |
|
|
|
281,024 |
|
|
|
276,985 |
|
|
|
281,024 |
|
Sales during the third quarter of fiscal 2015 decreased by 15% to $26.3 million compared with $31.0 million during the third quarter last year. Over the same period, comparable store sales(2) decreased by 16%. The Company entered the quarter with depleted levels of longer length winter weight jackets. Danier took corrective action by introducing Spring styles earlier than the prior year and including additional colour in the assortment. In addition, during the second half of the third quarter, Danier was able to replenish certain 'key item' styles which are classic styles that sell throughout the year. Spring and key item merchandise sales increased by 15% during the third quarter of fiscal 2015 with February and March sales increasing in excess of 20% compared to the corresponding periods last year.
Year-to-date sales decreased by 12% to $102.6 million compared with $117.2 million during the first nine months of last year, while comparable store sales decreased by 15% compared to the corresponding period last year. The decrease in revenue mainly relates to the Fall and Winter merchandise assortment which lacked sufficient quantities of longer length winter-weight leather and non-leather jackets.
Danier's eCommerce website, while not currently a significant portion of Danier's overall sales achieved revenue growth of 31% during the third quarter of fiscal 2015 compared with the third quarter last year. Year-to-date eCommerce revenue increased by 137% compared to our phone order channel during the first nine months of last year.
Gross profit as a percentage of revenue during the third quarter increased by 180 basis points to 45.7% compared with 43.9% during the third quarter last year. The increase in gross profit margin was mainly due to the earlier introduction of the Spring merchandise assortment as compared to the prior year as well as reduced markdowns. Gross profit margin during the first nine months of fiscal 2015, decreased by 220 basis points to 47.6% compared with 49.8% during the first nine months of last year. The decrease in gross margin was mainly due to management's decision during the first half of the fiscal year to increase promotional activity and implement deeper than planned markdowns in order to reduce excess Fall and Winter inventory to address the imbalance in the product assortment towards a younger demographic as explained above. Gross profit margin was also affected by the weakened Canadian dollar relative to the U.S. dollar as Danier's inventory purchases are mainly purchased from foreign vendors with payment terms in U.S. dollars.
Selling, general and administrative expenses ("SG&A") during the third quarter of fiscal 2015 decreased by approximately $2.5 million to $16.0 million, compared with $18.5 million during the third quarter last year. Year-to-date SG&A decreased by approximately $4.4 million to $54.6 million compared with $59.0 million during the first nine months of last year. Foreign exchange gains during third quarter of fiscal 2015 and year-to-date period increased by $0.9 million and $2.8 million, respectively, compared with the corresponding periods last year.
Danier has implemented a cost reduction initiative to achieve reductions in head office staff and expenses, and in marketing, non-selling expenditures and capital expenditures. The Company's objective is to achieve annualized savings of between $5 million and $7 million during fiscal 2016 as compared to fiscal 2014. During January 2015, head office staff was reduced by approximately 15%. Severance costs of approximately $1 million related to this reduction were recorded during the third quarter of fiscal 2015.
Net loss during the third quarter of fiscal 2015 decreased by approximately $0.2 million to $4.1 million ($1.07 loss per diluted share) compared with a net loss of $4.3 million ($1.12 loss per diluted share) during the third quarter last year. The decrease was mainly due to reduced SG&A. For the year-to-date period, net loss was $6.6 million ($1.71 loss per diluted share), compared with a net loss of $1.0 million ($0.26 loss per diluted share) during the first nine months of last year. The increase in net loss was mainly due to reduced sales and gross profit dollars.
Action currently being taken to improve the Company's performance include, among other things:
- Implementing a company-wide cost reduction initiative to achieve annualized savings of between $5 million and $7 million, as discussed above;
- Enhancing our competitiveness in the broader outerwear category by complementing the core leather business with non-leather alternatives, including down, wool, shearling and cashmere;
- Improving the product offering to achieve a better balance of merchandise for both Danier's traditional core customer and younger demographic, including through better year-round flow of merchandise to enhance newness, the addition of more winter-weight linings in our fall and winter collections and more colour in our spring collection; and
- Enhancing the Company's brand image and awareness through better communication of Danier's leather quality, craftsmanship and heritage, as well as emphasizing the warmth aspects of Danier's jackets for a broad range of temperatures including extreme cold weather.
At the end of the third quarter of fiscal 2015, Danier had working capital(3) of $23.1 million, cash of approximately $1.0 million, total liabilities of $12.2 million, no long-term debt and a book value of $10.91 per outstanding share. The Company is carefully monitoring its liquidity requirements over the next 12 months to ensure it has sufficient cash to meet operational needs and operate within borrowing limits and covenants and, based on its internal projections and cash flow management initiatives, the Company currently expects to fully utilize its existing operating and term credit facility over the next 12 months. There can be no assurance that the Company will be successful in achieving the results set out in its internal projections of liquidity requirements and cash flow management initiatives through the period up to the maturity of its existing operating and term credit facilities.
For further details concerning the Company's financial position, results of operations, liquidity and capital resources, business strategy and plans, investors are encouraged to read the management's discussion & analysis and unaudited interim condensed consolidated financial statements and notes thereto for the 13-week and 39-week periods ended March 28, 2015, copies of which will be available on SEDAR at www.sedar.com.
Update on Review of Strategic Alternatives
On February 6, 2015, Danier announced that it was exploring strategic alternatives potentially available to the Company including, among other things, the sale of, merger or other business combination involving the Company, a private placement or other offering of equity or debt, the sale, lease or financing of certain assets of the Company, or joint ventures or strategic alliances with the Company. The strategic review process is currently ongoing, and in connection therewith, the Company and its financial advisor, Consensus Advisory Services, LLC, have held various discussions with potentially interested parties and the Company has entered into confidentiality agreements with a number of these parties in relation to a variety of possible strategic alternatives. There can be no assurance that this process will result in any definitive agreement or, if a definitive agreement is entered into, that a potential transaction will ultimately be consummated.
The Company is also exploring alternatives that may be available to refinance its existing credit facilities in order to increase liquidity and extend the maturity of available credit under its operating and term credit facilities, which are currently committed until June 2016, subject to compliance with the terms thereof. There can be no assurance as to whether the Company will be successful in refinancing its existing credit facilities or, if it does, that the terms of any alternative financing will be favourable to the Company.
Non-IFRS Financial Measures
The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS"). In order to provide additional insight into the business, the Company has also provided certain non-IFRS data, including EBITDA, Adjusted EBITDA and comparable store sales, each as defined below. Non-IFRS measures such as EBITDA, Adjusted EBITDA and comparable store sales are not recognized measures for financial presentation under IFRS. These non-IFRS measures do not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to other financial measures determined in accordance with IFRS.
| |
|
| (1) |
EBITDA and Adjusted EBITDA - EBITDA is defined as net earnings (loss) before interest expense, interest income, income taxes and amortization. Adjusted EBITDA is defined as EBITDA (as defined above) before impairment loss on property and equipment, foreign exchange loss (gain) and termination benefits. EBITDA is a financial metric used by management and some investors to compare companies on the basis of ongoing operating results before taxes, interest expense, interest income and amortization and its ability to incur and service debt. Adjusted EBITDA is a financial metric used by management to compare EBITDA (as defined above) before impairment loss on property and equipment, foreign exchange loss (gain) and termination benefits. EBITDA and Adjusted EBITDA are also used by management to measure performance against internal targets, prior period results and other retailers. EBITDA and Adjusted EBITDA are calculated as outlined in the following table: |
| |
|
| |
|
|
|
|
|
|
| |
|
For the 13 Weeks Ended |
|
|
For the 39 Weeks Ended |
|
| |
|
Mar 28, 2015 |
|
|
Mar 29, 2014 |
|
|
Mar 28, 2015 |
|
|
Mar 29, 2014 |
|
| |
|
($000) |
|
|
($000) |
|
|
($000) |
|
|
($000) |
|
| Net loss |
|
$ |
(4,136 |
) |
|
$ |
(4,286 |
) |
|
$ |
(6,578 |
) |
|
$ |
(983 |
) |
| Add (deduct) impact of the following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Income tax |
|
|
(1,340 |
) |
|
|
(1,425 |
) |
|
|
(2,123 |
) |
|
|
(414 |
) |
| |
Interest expense |
|
|
13 |
|
|
|
10 |
|
|
|
118 |
|
|
|
49 |
|
| |
Interest income |
|
|
(11 |
) |
|
|
(44 |
) |
|
|
(21 |
) |
|
|
(90 |
) |
| |
Amortization |
|
|
823 |
|
|
|
1,051 |
|
|
|
2,418 |
|
|
|
3,025 |
|
| EBITDA |
|
$ |
(4,651 |
) |
|
$ |
(4,694 |
) |
|
$ |
(6,186 |
) |
|
$ |
1,587 |
|
| |
Impairment loss on property and equipment |
|
|
516 |
|
|
|
153 |
|
|
|
1,533 |
|
|
|
153 |
|
| |
Foreign exchange loss (gain) |
|
|
(1,275 |
) |
|
|
(385 |
) |
|
|
(2,983 |
) |
|
|
(193 |
) |
| |
Termination benefits |
|
|
1,004 |
|
|
|
701 |
|
|
|
1,221 |
|
|
|
707 |
|
| Adjusted EBITDA |
|
$ |
(4,406 |
) |
|
$ |
(4,225 |
) |
|
$ |
(6,415 |
) |
|
$ |
2,254 |
|
| |
|
| (2) |
Comparable store sales are defined as sales generated by stores that have been open during the full current fiscal year as well as the full prior fiscal year. Comparable store sales is a key indicator used by the Company to measure performance against internal targets and prior period results and excludes sales fluctuations due to new stores, store closings and certain permanent store relocations. This measure is also commonly used by financial analysts and investors to compare Danier to other retailers. Comparable store sales is calculated as outlined in the following tables: |
| |
|
| |
|
|
|
| |
|
For the 13 Weeks Ended |
|
| |
|
Mar 28, 2015 |
|
Mar 29, 2014 |
|
% change |
|
| |
|
($000) |
|
($000) |
|
|
|
| Comparable stores |
|
$ |
22,843 |
|
$ |
27,209 |
|
(16% |
) |
| Non-comparable stores & direct-to customer |
|
|
1,794 |
|
|
2,099 |
|
(15% |
) |
| Alterations revenue |
|
|
127 |
|
|
235 |
|
(46% |
) |
| Sales return provision (increase)/decrease |
|
|
1,531 |
|
|
1,468 |
|
4% |
|
| Revenue |
|
$ |
26,295 |
|
$ |
31,011 |
|
(15% |
) |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
For the 39 Weeks Ended |
|
| |
|
Mar 28, 2015 |
|
|
Mar 29, 2014 |
|
|
% change |
|
| |
|
($000) |
|
|
($000) |
|
|
|
|
| Comparable stores |
|
$ |
93,716 |
|
|
$ |
109,850 |
|
|
(15% |
) |
| Non-comparable stores & direct-to customer |
|
|
8,449 |
|
|
|
6,713 |
|
|
26% |
|
| Alterations revenue |
|
|
497 |
|
|
|
704 |
|
|
(29% |
) |
| Sales return provision (increase)/decrease |
|
|
(85 |
) |
|
|
(46 |
) |
|
(85% |
) |
| Revenue |
|
$ |
102,577 |
|
|
$ |
117,221 |
|
|
(12% |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
| (3) |
Working capital is defined as total current assets minus total current liabilities. Working capital is a key indicator and financial metric used by the Company to measure short-term liquidity for those assets that can easily be converted into cash to satisfy both short-term liabilities and upcoming operating expenses. Working capital is calculated as outlined in the following table: |
| |
|
| |
|
|
|
|
| |
|
Mar 28, 2015 |
|
Mar 29, 2014 |
| |
|
($000) |
|
($000) |
| Total current assets |
|
$ |
33,747 |
|
$ |
47,568 |
| Total current liabilities |
|
$ |
10,627 |
|
$ |
11,814 |
| Working capital |
|
$ |
23,120 |
|
$ |
35,754 |
Forward-Looking Statements
This press release contains forward-looking information and forward-looking statements which reflect the current view of Danier with respect to the Company's objectives, plans, goals, strategies, results of operations, financial and operating performance and business prospects and opportunities. This press release also contains forward-looking statements regarding the Company's cost reduction initiative, strategic review process and exploration of credit facility refinancing alternatives. Wherever used, the words "may", "will", "anticipate", "intend", "estimate", "expect", "plan", "believe" and similar expressions identify forward-looking statements and forward-looking information. Forward-looking statements and forward-looking information should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved. All of the statements in this press release containing forward-looking statements or forward-looking information, if any, are qualified by these cautionary statements.
Forward-looking statements and forward-looking information are based on information available at the time they are made, underlying estimates, opinions and assumptions made by management and management's good faith belief with respect to future strategies, prospects, events, performance and results and are subject to inherent risks and uncertainties surrounding future expectations generally. Such risks and uncertainties include, but are not limited to, decreases in sales from existing stores, a decline in general economic conditions, consumer confidence, or consumer spending or increases in consumer debt levels, risks associated with foreign supply, sourcing and manufacturing, including increasing leather prices and increasing constraints on foreign vendors' capacity, branding, merchandising, fashion and apparel and leather industry risks that can adversely affect demand for the Company's products and result in inventory mark-downs and reduced gross margin, the Company's inability to successfully implement its business strategy or financial, capital expenditure, cost reduction or budgetary activities and initiatives, uncertainty regarding the Company's ability to secure alternative sources of financing on favourable terms or at all, uncertainty concerning the outcome of the Company's ongoing strategic review process, including whether such process will result in any transaction or alternatives, the Company being unable to successfully grow revenues, gross profit, gross margin and generate net earnings or to generate the necessary cash flows and earnings to satisfy its obligations and pursue its objectives, or any other material disruption to or decline in the Company's operations. As noted, there can be no assurance that the strategic review process that is discussed in this release will result in any transaction. Except as required by securities law, the Corporation does not currently intend to disclose further developments with respect to this process, unless circumstances warrant. For additional information with respect to Danier's inherent risks and uncertainties, reference should be made to Danier's continuous disclosure materials filed from time to time with the Canadian Securities Regulatory Authorities, including the Company's most recent annual information form, quarterly and annual reports and financial statements and notes thereto, and supplementary information, which are available on SEDAR at www.sedar.com and in the Investor Relations section of the Company's website at www.danier.com. Additional risks and uncertainties not presently known to the Company or that Danier currently believes to be less significant may also adversely affect the Company.
Danier cautions readers that such factors and uncertainties are not exhaustive and that should certain risks or uncertainties materialize, or should underlying estimates or assumptions prove incorrect, actual events, performance and results may vary significantly from those expected. There can be no assurance that the actual results, performance, events or activities anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. Potential investors and other readers are urged to consider these factors carefully in evaluating forward-looking information and forward-looking statements and are cautioned not to place undue reliance on any forward-looking information or forward-looking statements. Danier disclaims any intention or obligation to update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
About Danier
Danier Leather Inc. is a leading integrated designer, manufacturer, and retailer of high-quality fashion-oriented leather apparel and accessories. The Company's merchandise is marketed exclusively under the well-known Danier brand name and is available at its 87 shopping mall, street-front and outlet stores as well as the online store at danier.com. For more information about the Company and our products, visit www.danier.com.
| |
|
| DANIER LEATHER INC. |
|
| CONSOLIDATED STATEMENTS OF LOSS & COMPREHENSIVE LOSS |
|
| (thousands of Canadian dollars, except per share amounts and number of shares) - unaudited |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For the 13 Weeks Ended |
|
|
For the 39 Weeks Ended |
|
| |
|
March 28, 2015 |
|
|
March 29, 2014 |
|
|
March 28, 2015 |
|
|
March 29, 2014 |
|
| Revenue |
|
$ |
26,295 |
|
|
$ |
31,011 |
|
|
$ |
102,577 |
|
|
$ |
117,221 |
|
| Cost of sales |
|
|
14,272 |
|
|
|
17,389 |
|
|
|
53,794 |
|
|
|
58,836 |
|
| Gross profit |
|
|
12,023 |
|
|
|
13,622 |
|
|
|
48,783 |
|
|
|
58,385 |
|
| |
|
Selling, general and administrative expenses |
|
|
15,977 |
|
|
|
18,544 |
|
|
|
54,641 |
|
|
|
59,000 |
|
| |
|
Asset impairment losses |
|
|
516 |
|
|
|
153 |
|
|
|
1,533 |
|
|
|
153 |
|
| |
|
Restructuring costs |
|
|
1,004 |
|
|
|
670 |
|
|
|
1,213 |
|
|
|
670 |
|
| |
|
Interest income |
|
|
(11 |
) |
|
|
(44 |
) |
|
|
(21 |
) |
|
|
(90 |
) |
| |
|
Interest expense |
|
|
13 |
|
|
|
10 |
|
|
|
118 |
|
|
|
49 |
|
| Loss before income taxes |
|
|
(5,476 |
) |
|
|
(5,711 |
) |
|
|
(8,701 |
) |
|
|
(1,397 |
) |
| Recovery of income taxes |
|
|
(1,340 |
) |
|
|
(1,425 |
) |
|
|
(2,123 |
) |
|
|
(414 |
) |
| Net loss and comprehensive loss |
|
$ |
(4,136 |
) |
|
$ |
(4,286 |
) |
|
$ |
(6,578 |
) |
|
$ |
(983 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Basic |
|
$ |
(1.07 |
) |
|
$ |
(1.12 |
) |
|
$ |
(1.71 |
) |
|
$ |
(0.26 |
) |
| |
Diluted |
|
$ |
(1.07 |
) |
|
$ |
(1.12 |
) |
|
$ |
(1.71 |
) |
|
$ |
(0.26 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Basic |
|
|
3,854,168 |
|
|
|
3,839,616 |
|
|
|
3,854,168 |
|
|
|
3,837,828 |
|
| |
Diluted |
|
|
3,879,097 |
|
|
|
3,948,947 |
|
|
|
3,901,193 |
|
|
|
3,952,490 |
|
| Number of shares outstanding at period end |
|
|
3,854,168 |
|
|
|
3,834,168 |
|
|
|
3,854,168 |
|
|
|
3,834,168 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| DANIER LEATHER INC. |
| CONSOLIDATED BALANCE SHEETS |
| (thousands of Canadian dollars) - unaudited |
| |
|
|
|
|
| |
|
March 28,
2015 |
|
March 29,
2014 |
|
June 28, 2014 |
| ASSETS |
|
|
|
|
|
|
|
|
|
| Current Assets |
|
|
|
|
|
|
|
|
|
| |
Cash |
|
$ |
960 |
|
$ |
15,129 |
|
$ |
13,507 |
| |
Accounts receivable |
|
|
601 |
|
|
1,089 |
|
|
638 |
| |
Income taxes recoverable |
|
|
1,224 |
|
|
1,419 |
|
|
3,461 |
| |
Inventories |
|
|
28,823 |
|
|
28,821 |
|
|
21,721 |
| |
Prepaid expenses |
|
|
594 |
|
|
545 |
|
|
643 |
| |
Derivative financial instruments |
|
|
1,545 |
|
|
565 |
|
|
- |
| |
|
|
33,747 |
|
|
47,568 |
|
|
39,970 |
| Non-current Assets |
|
|
|
|
|
|
|
|
|
| |
Property and equipment |
|
|
15,860 |
|
|
17,079 |
|
|
16,826 |
| |
Computer software |
|
|
1,479 |
|
|
1,808 |
|
|
1,459 |
| |
Deferred income tax asset |
|
|
3,193 |
|
|
1,730 |
|
|
2,374 |
| |
|
$ |
54,279 |
|
$ |
68,185 |
|
$ |
60,629 |
| LIABILITIES |
|
|
|
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
|
|
|
|
| |
Bank indebtedness |
|
$ |
378 |
|
$ |
- |
|
$ |
- |
| |
Payables and accruals |
|
|
7,266 |
|
|
9,363 |
|
|
8,349 |
| |
Deferred revenue |
|
|
1,716 |
|
|
1,834 |
|
|
1,511 |
| |
Provisions |
|
|
1,267 |
|
|
617 |
|
|
566 |
| |
Derivative financial instruments |
|
|
- |
|
|
- |
|
|
364 |
| |
|
|
10,627 |
|
|
11,814 |
|
|
10,790 |
| Non-current Liabilities |
|
|
|
|
|
|
|
|
|
| Deferred lease inducements and rent liability |
|
|
1,602 |
|
|
1,410 |
|
|
1,432 |
| |
|
|
12,229 |
|
|
13,224 |
|
|
12,222 |
| SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
| |
Share capital |
|
|
11,772 |
|
|
11,676 |
|
|
11,772 |
| |
Contributed surplus |
|
|
1,261 |
|
|
1,010 |
|
|
1,040 |
| |
Retained earnings |
|
|
29,017 |
|
|
42,275 |
|
|
35,595 |
| |
|
|
42,050 |
|
|
54,961 |
|
|
48,407 |
| |
|
$ |
54,279 |
|
$ |
68,185 |
|
$ |
60,629 |
| |
|
|
|
|
|
|
|
|
|
| Approved by the Board of Directors |
|
|
|
|
|
|
|
|
|
| May 8, 2015 |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
| DANIER LEATHER INC. |
|
| CONSOLIDATED STATEMENTS OF CASH FLOW |
|
| (thousands of Canadian dollars) - unaudited |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
For the 13 Weeks Ended |
|
|
For the 39 Weeks Ended |
|
| |
|
March 28, 2015 |
|
|
March 29, 2014 |
|
|
March 28, 2015 |
|
|
March 29, 2014 |
|
| Cash provided by (used in) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net loss |
|
$ |
(4,136 |
) |
|
$ |
(4,286 |
) |
|
$ |
(6,578 |
) |
|
$ |
(983 |
) |
| |
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Amortization of property and equipment |
|
|
718 |
|
|
|
894 |
|
|
|
2,132 |
|
|
|
2,642 |
|
| |
|
Amortization of computer software |
|
|
105 |
|
|
|
157 |
|
|
|
286 |
|
|
|
383 |
|
| |
|
Impairment loss on property and equipment |
|
|
516 |
|
|
|
153 |
|
|
|
1,533 |
|
|
|
153 |
|
| |
|
Amortization of deferred lease inducements |
|
|
(44 |
) |
|
|
(18 |
) |
|
|
(85 |
) |
|
|
(57 |
) |
| |
|
Proceeds from deferred lease inducements |
|
|
- |
|
|
|
- |
|
|
|
125 |
|
|
|
- |
|
| |
|
Straight line rent expense |
|
|
45 |
|
|
|
41 |
|
|
|
130 |
|
|
|
75 |
|
| |
|
Fair value of derivative financial instruments |
|
|
(599 |
) |
|
|
(127 |
) |
|
|
(1,909 |
) |
|
|
257 |
|
| |
|
Stock-based compensation |
|
|
49 |
|
|
|
58 |
|
|
|
221 |
|
|
|
146 |
|
| |
|
Interest income |
|
|
(11 |
) |
|
|
(44 |
) |
|
|
(21 |
) |
|
|
(90 |
) |
| |
|
Interest expense |
|
|
13 |
|
|
|
10 |
|
|
|
118 |
|
|
|
49 |
|
| |
|
Recovery of income taxes |
|
|
(1,340 |
) |
|
|
(1,425 |
) |
|
|
(2,123 |
) |
|
|
(414 |
) |
| |
Changes in working capital |
|
|
(6,387 |
) |
|
|
(3,402 |
) |
|
|
(7,246 |
) |
|
|
(6,354 |
) |
| |
Interest paid |
|
|
(11 |
) |
|
|
(99 |
) |
|
|
(65 |
) |
|
|
(107 |
) |
| |
Interest received |
|
|
5 |
|
|
|
40 |
|
|
|
21 |
|
|
|
101 |
|
| |
Income taxes recovered (paid) |
|
|
3,541 |
|
|
|
528 |
|
|
|
3,541 |
|
|
|
(214 |
) |
| Net cash used in operating activities |
|
|
(7,536 |
) |
|
|
(7,520 |
) |
|
|
(9,920 |
) |
|
|
(4,413 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Increase in bank indebtedness |
|
|
378 |
|
|
|
- |
|
|
|
3,369 |
|
|
|
- |
|
| |
Repayment of bank indebtedness |
|
|
- |
|
|
|
- |
|
|
|
(2,991 |
) |
|
|
- |
|
| |
Subordinate voting shares issued |
|
|
- |
|
|
|
90 |
|
|
|
- |
|
|
|
164 |
|
| |
Subordinate voting shares repurchased |
|
|
- |
|
|
|
(275 |
) |
|
|
- |
|
|
|
(275 |
) |
| Net cash (used in) generated from financing activities |
|
|
378 |
|
|
|
(185 |
) |
|
|
378 |
|
|
|
(111 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Acquisition of property and equipment |
|
|
(146 |
) |
|
|
(215 |
) |
|
|
(2,699 |
) |
|
|
(3,840 |
) |
| |
Acquisition of computer software |
|
|
(54 |
) |
|
|
(116 |
) |
|
|
(306 |
) |
|
|
(1,048 |
) |
| Net cash used in investing activities |
|
|
(200 |
) |
|
|
(331 |
) |
|
|
(3,005 |
) |
|
|
(4,888 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Decrease in cash |
|
|
(7,358 |
) |
|
|
(8,036 |
) |
|
|
(12,547 |
) |
|
|
(9,412 |
) |
| Cash, beginning of period |
|
|
8,318 |
|
|
|
23,165 |
|
|
|
13,507 |
|
|
|
24,541 |
|
| Cash, end of period |
|
$ |
960 |
|
|
$ |
15,129 |
|
|
$ |
960 |
|
|
$ |
15,129 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| DANIER LEATHER INC. |
| CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY |
| (thousands of Canadian dollars) - unaudited |
| |
| |
|
Share Capital |
|
|
Contributed
Surplus |
|
|
Accumulated
Other
Comprehensive
Income |
|
Retained
Earnings |
|
|
Total |
|
| Balance - June 28, 2014 |
|
$ |
11,772 |
|
|
$ |
1,040 |
|
|
$ |
- |
|
$ |
35,595 |
|
|
$ |
48,407 |
|
| |
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
(6,578 |
) |
|
|
(6,578 |
) |
| |
Stock-based compensation related to stock options |
|
|
- |
|
|
|
221 |
|
|
|
- |
|
|
- |
|
|
|
221 |
|
| Balance - March 28, 2015 |
|
$ |
11,772 |
|
|
$ |
1,261 |
|
|
$ |
- |
|
$ |
29,017 |
|
|
$ |
42,050 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Share Capital |
|
|
Contributed Surplus |
|
|
Accumulated
Other
Comprehensive
Income |
|
Retained
Earnings |
|
|
Total |
|
| Balance - June 29, 2013 |
|
$ |
11,533 |
|
|
$ |
954 |
|
|
$ |
- |
|
$ |
43,422 |
|
|
$ |
55,909 |
|
| |
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
(983 |
) |
|
|
(983 |
) |
| |
Stock-based compensation related to stock options |
|
|
- |
|
|
|
146 |
|
|
|
- |
|
|
- |
|
|
|
146 |
|
| |
Exercise of stock options |
|
|
254 |
|
|
|
(90 |
) |
|
|
- |
|
|
- |
|
|
|
164 |
|
| |
Share repurchases |
|
|
(111 |
) |
|
|
- |
|
|
|
- |
|
|
(164 |
) |
|
|
(275 |
) |
| Balance - March 29, 2014 |
|
$ |
11,676 |
|
|
$ |
1,010 |
|
|
$ |
- |
|
$ |
42,275 |
|
|
$ |
54,961 |
|