TORONTO, ONTARIO -- (Marketwired) -- 09/18/15 -- Danier Leather Inc. (TSX: DL) ("Danier" or the "Company") today announced its consolidated financial results for the fourth quarter and fiscal year ended June 27, 2015.
OPERATIONS HIGHLIGHTS:
-- The increase in the Company's net loss in 2015 was caused by reduced
sales and gross profit margins, a $5.2 million write-down of deferred
income tax asset and $3.2 million of asset impairment losses.
-- Converted its existing operating and revolving credit into a senior
secured asset-based credit facility with its current lender, Canadian
Imperial Bank of Commerce.
-- Signed a purchase and sale agreement to sell its head office building
and property for expected net proceeds of $11.6 million with seven-year
lease back at fixed rental rates.
-- Strengthened management team with addition of Brent Houlden as Interim
Chief Financial Officer and the return of Olga Koel as Vice-President,
Merchandising.
-- Fall/Winter product offering includes a broader range of fabrics and
materials beyond leather and the Company is selectively introducing
branded merchandise which complements Danier exclusive product
offerings.
FINANCIAL HIGHLIGHTS ($000s, except earnings per share (EPS), square footage and number of stores):
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For the 13 Weeks Ended For the 52 Weeks Ended
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Jun 27, Jun 28, Jun 27, Jun 28,
2015 2014 2015 2014
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Revenue $ 23,469 $ 24,709 $ 126,046 $ 141,930
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EBITDA(1) (10,142) (8,132) (16,328) (6,545)
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Adjusted EBITDA(1) (8,212) (6,823) (14,626) (4,569)
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Net Earnings (Loss) (13,291) (6,680) (19,869) (7,663)
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EPS - Basic $ (3.45) $ (1.74) $ (5.16) $ (2.00)
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EPS - Diluted $ (3.45) $ (1.74) $ (5.16) $ (2.00)
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Number of Stores 86 90 86 90
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Retail Square Footage 272,124 283,303 272,124 283,303
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Revenue decreased by 11% or $15.9 million to $126 million in 2015 from $141.9 million in 2014. During the fourth quarter of 2015, revenue decreased by 5% or $1.2 million to $23.5 million from $24.7 million during the fourth quarter of 2014. Comparable store sales(2) in 2015 decreased by 14% as compared to 2014. In the fourth quarter of 2015, comparable store sales decreased by 5%.
There were a number of external and internal factors that contributed to the decrease in 2015 sales. Beyond the ongoing challenging retail environment, the merchandise purchased for fall and winter was not aligned to current fashion trends resulting in significant sales declines. As a result, the Company's sales were negatively affected during what has historically been Danier's busiest selling season and this resulted in a build-up of inventory, which carried into spring. This resulted in the need to implement large discounts to clear built-up inventory. By year-end, Danier had effectively reduced the surplus fall and winter inventory to levels similar to the fiscal 2014 year-end.
Gross profit dollars decreased by 18% or $12.4 million to $55.8 million in 2015, compared with $68.2 million in 2014. The decrease in gross profit dollars was mainly due to an 11% decrease in sales, increased promotional activity needed to sell built-up inventory, a $0.38 million decrease in write-downs of inventory and a weakening of the Canadian dollar relative to the U.S. dollar. For the fourth quarter of 2015, gross profit as a percentage of revenue decreased to 30.0% compared with 39.9% during the fourth quarter of 2014. The decrease in gross profit in the fourth quarter was mainly due to a 5% decrease in sales, increased promotional activity needed to sell built-up inventory, a $0.5 million increase in write-downs of inventory and a weakening of the Canadian dollar relative to the U.S. dollar.
Selling, general and administrative ("SG&A") expense (3) decreased by 5% or approximately $3.7 million to $75.3 million in 2015. In 2015, SG&A was increased by asset impairment losses, severance, and higher store occupancy costs that were offset by foreign exchange gains and cost reduction initiatives. For the fourth quarter of 2015, SG&A of $18.1 million decreased by approximately $0.5 million compared with the fourth quarter of 2014. In the fourth quarter of 2015, SG&A declined even though asset impairment losses and strategic review fees increased over fourth quarter of 2014.
Effective income tax provision rate for 2015 was (1.1%) and (21.4%) for the fourth quarter of 2015. In 2014, the effective tax rate for 2014 and for the fourth quarter of 2014 was 29.0% and 28.9%, respectively. The differences in the effective tax rates are due to the $5.2 million write-down of the deferred income tax asset in the fourth quarter of 2015.
Net loss for 2015 was $19.9 million ($5.16 loss per share) compared with a net loss of $7.7 million ($2.00 loss per share) in 2014. The net loss for the fourth quarter of 2015 was $13.3 million ($3.45 loss per share) compared with $6.7 million ($1.74 loss per share) in the fourth quarter of 2014.
In addition to reduced sales and gross profit margins, a $5.2 million write-down of deferred income tax asset and $3.2 million of asset impairment losses, combined to significantly increase the Company's net loss in 2015.
Balance sheet highlights:
-- The Company's cash balance decreased from $13.5 million at the end of
2014 to net bank indebtedness of $1.4 million as at June 27, 2015. The
decrease in cash was principally due to the net loss of $19.9 million in
2015.
-- Total inventory at the end of 2015 was approximately $0.2 million lower
than inventory at the end of 2014.
-- The deferred income tax asset was written-off in 2015. As at June 27,
2015, the Company has available non-capital losses of approximately $8.6
million which can be used to reduce income taxes in future years. These
income tax losses will expire in 2035.
-- Total liabilities of $12.5 million at the end of 2015 were $0.3 million
higher than total liabilities of $12.2 million at the end of 2014.
UPDATE ON STRATEGIC AND OPERATING ACTIVITIES
During fiscal 2015 and 2014, the Company experienced decreases in comparable store sales and gross profit margin and reported net losses of $19.9 million and $7.7 million, respectively. These net losses are the main cause of the Company's cash balance decreasing from $13.5 million as at June 28, 2014 to net bank indebtedness of $1.4 million as at June 27, 2015.
"Although it's been our toughest year ever, we have addressed the missteps and product issues that were made in recent past," said Jeffrey Wortsman, President and Chief Executive Officer. "We are convinced that we now have a viable turnaround plan which we are implementing to improve Danier's performance in fiscal 2016 and beyond. As we look forward, we have a strong line up of merchandise that is on trend."
Management and the Company's Board of Directors are responding to Danier's deteriorating operating performance by taking the following steps:
1. STRATEGIC REVIEW PROCESS - On February 6, 2015, the Company announced that it was exploring strategic alternatives potentially available to the Company including, without limitation a private placement or other offering of equity or debt, the sale, lease or financing of certain assets of the Company, or a sale of, merger or other business combination, joint venture or strategic alliances with the Company. The Company had formed a special committee comprised of independent members of the Board of Directors to oversee this initiative and engaged Consensus Advisory Services LLC as financial advisors.
Subsequent to June 27, 2015, the strategic review process resulted in the extended and amended credit facilities and the sale of the Company's head office building, each as discussed below. On September 18, 2015, the Board of Directors of the Company formally disbanded the special committee in order to allow the Company to focus its efforts on its operational and strategic plans, including the turnaround plan discussed below.
2. EXTENDED AND AMENDED CREDIT FACILITIES - On August 27, 2015, the Company entered into a third amended and restated credit agreement ("Credit Agreement") with its existing lender Canadian Imperial Bank of Commerce ("CIBC"), which converts the Company's existing operating and revolving credit facilities into a senior secured asset-based credit facility (the "ABL Credit Facility") with CIBC, bearing interest at prime plus 2%. The ABL Credit Facility provides an initial commitment of up to $35 million, which will reduce to $28.5 million if the Company sells its head office location as discussed below. Borrowings under the ABL Credit Facility are subject to a borrowing base calculated by reference to the Company's eligible accounts receivables and inventory and real estate, less an availability block, priority payables and other reserves calculated in accordance with the Credit Agreement. The ABL Credit Facility has an initial term of three years, extending the maturity of Danier's facilities to August 27, 2018. The ABL Credit Facility is subject to various financial and other covenants, reporting requirements and restrictions that, if breached, could cause a default and may result in the requirement for immediate repayment of all amounts outstanding under the ABL Credit Facility, as well as other rights and remedies of CIBC. The Company intends to use the ABL Credit Facility to fund its working capital requirements and for general corporate purposes.
3. SALE OF HEAD OFFICE LOCATION - On August 17, 2015, the Company signed a purchase and sale agreement to sell its head office building and property for estimated net proceeds of $11.6 million. The proceeds from the sale will be used to pay outstanding bank indebtedness (discussed above) and the Company will lease back its building from the purchaser for the next seven years at fixed rental rates.
Together, the amended and extended credit facilities and the proceeds from the proposed sale of the building (discussed above) will provide working capital for Danier to continue to reposition its product offerings and purchase inventory in the normal course of business, rationalize operations and reduce costs and continue to implement its operational turnaround plan as outlined below.
4. STRENGTHENING THE MANAGEMENT TEAM - On July 2, 2015, Brent Houlden was hired as interim CFO to oversee the amendment and extension of the Company's credit facilities and to assist with the development of a turnaround plan, including re-aligning the cost structure of the business. Mr. Houlden has extensive retail strategy and operations expertise with deep financial skills. During his 26 years as a partner of Deloitte LLP, Mr. Houlden held various senior leadership positions, including building Deloitte's Consulting and Financial Advisory practices as well as leading its retail practice in Canada.
In August 2015, Olga Koel was re-hired to Danier as the Vice-President, Merchandising responsible for all aspects of merchandise procurement. Ms. Koel's priorities are to improve the execution of the Company's merchandising group and to drive more excitement and "newness" in the products being offered by Danier. She is a proven merchant who has over 30 years of experience, including a deep understanding of the Danier brand and a reputation for taking action and driving results. Ms. Koel will also assume the merchandising responsibilities of Brian Burgess, the former Executive Vice-President, Merchandising, Sourcing and Planning, who resigned from the Company on August 31, 2015.
In addition, the Company has reduced and streamlined its management reporting layers to improve decision-making and accelerate the pace of execution. Communication among members of Management has also been enhanced by improving the physical proximity of the leadership team. Manager accountability, teamwork and cross-department collaboration will be key to a successful turnaround.
5. TURNAROUND PLAN - Management's primary short-term goal is to reverse the decline in same store sales and gross margin. While cost reductions and rationalization of operations is an important component of this strategy, cost-cutting will not be enough to offset the declines in operating income that have been experienced over the last several years. Accordingly, Management's turnaround plan is focused on the following key priorities:
-- improving Danier's merchandise sourcing and assortment planning,
including the introduction of a broader range of fabrics and materials
beyond just leather which will provide warmth during the winter season;
-- improving the Company's merchandise planning processes in an effort to
have the right assortment of products at the most profitable stores at
the right time;
-- enhancing the in-store visual merchandising experience, with more
emphasis on product, quality, value and differentiation rather than
discounting and store-wide sales, and the introduction of streamlined
reporting for store personnel to focus them on key retail performance
indicators being rolled out;
-- rationalizing operations and reducing Danier's cost structure to better
align the business and operations with the current retail environment,
including modifying processes for sourcing, receiving and distributing
to reduce costs and the non-renewal of leases at certain unprofitable
store locations and other potential store closures;
-- improving branding to emphasize sophistication, luxury, value and
differentiation, together with increased use of digital forms of
marketing to appeal to a broader base of customers without alienating
Danier's core customer;
-- continuing to grow on-line sales, the direct shipment offering and other
omni channel initiatives;
-- improving sales and gross margins through better price management and
reducing the level of mark-downs; and
-- utilizing advanced analytics to give Management access to relevant
statistical data and improve decision-making.
Danier's Management's team is committed to turning around the Company's performance and returning Danier to profitability. The Company is currently projecting another unprofitable year in fiscal 2016 but at a lower level of losses than experienced in 2014 and 2015. If the Company misjudges fashion trends or consumer preferences for the upcoming selling seasons, or its allocation and marketing programs prove less successful than anticipated, this would adversely impact the Company's results and ability to implement its turnaround plan.
ADDITIONAL INFORMATION
For further details concerning the Company's fiscal 2015 fourth quarter and year-end financial position, results of operations, liquidity and capital resources, business strategy and plans, investors are encouraged to read the management's discussion & analysis and audited annual consolidated financial statements and notes thereto for the fiscal year ended June 27, 2015, copies of which will be available on SEDAR at www.sedar.com.
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" and "comparable store sales", each as defined below. These non-IFRS measures 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 is defined as net earnings (loss) before interest expense, interest income, income taxes and amortization. Adjusted EBITDA is defined as EBITDA 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 asset impairment losses, foreign exchange loss (gain) and severances. 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:
Fourth Quarter Ended Fiscal Year Ended
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Jun 27, Jun 28, Jun 27, Jun 28,
2015 2014 2015 2014
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($000) ($000) ($000) ($000)
Net earnings (loss) $ (13,291) $ (6,680) $ (19,869) $ (7,663)
Add (deduct) impact of the
following:
Income tax 2,343 (2,717) 220 (3,131)
Interest expense 34 10 152 59
Interest income - (28) (21) (118)
Amortization 772 1,283 3,190 4,308
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EBITDA $ (10,142) $ (8,132) $ (16,328) $ (6,545)
Asset impairment losses 1,676 510 3,209 663
Foreign exchange loss (gain) 266 723 (2,717) 530
Severances (12) 76 1,210 783
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Adjusted EBITDA $ (8,212) $ (6,823) $ (14,626) $ (4,569)
(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 performance 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 Fourth Quarter Ended
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Jun 27, 2015 Jun 28, 2014 % change
($000) ($000)
Comparable stores $ 21,662 $ 22,706 (5%)
Non-comparable stores & direct-to-
customer 1,711 1,788 (4%)
Alterations revenue 107 164 (35%)
Sales return provision
(increase)/decrease (11) 51 (122%)
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Revenue $ 23,469 $ 24,709 (5%)
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For the Fiscal Year Ended
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Jun 27, 2015 Jun 28, 2014 % change
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($000) ($000)
Comparable stores $ 114,516 $ 132,959 (14%)
Non-comparable stores & direct-to-
customer 11,022 8,098 36%
Alterations revenue 604 868 (30%)
Sales return provision
(increase)/decrease (96) 5 (2,020%)
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Revenue $ 126,046 $ 141,930 (11%)
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(3) Selling, general and administrative expenses is the aggregate of the reported asset impairment losses, severance, strategic review fees; foreign exchange (gains) losses and Selling, general and administrative expenses reported in our statement of financial loss.
Forward-Looking Statements
This press release and, in particular, the section above entitled "Update on Strategic and Operating Activities", 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, outlook, results of operations, financial and operating performance and prospects and opportunities. 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 information in this press release containing forward-looking statements or forward-looking information 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 current 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, uncertainty regarding the Company's ability to continue as a going concern, uncertainty regarding the borrowing availability under the Company's amended and restated credit facilities, decreases in sales or margins, general economic conditions, consumer confidence, consumer debt levels and consumer spending, including reductions in sales and margins of the Company's products or a real or perceived slowdown in the general economy, risks associated with foreign supply, sourcing and manufacturing, including increasing leather prices and increasing constraints on foreign vendors' capacity, branding, merchandising, allocation, fashion and apparel and leather industry risks that have and may continue to adversely affect demand for the Company's products and increase inventory mark-downs, risks associated with 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 from its operations to satisfy its obligations and pursue its objectives, leather availability and prices, changes to, or the ability to successfully implement, the Company's strategies and plans, financial, capital expenditures and operating budgets and activities, increased write-downs or impairment charges on the Company's assets,
unseasonable or unusual weather conditions, seasonality and fluctuations of quarterly results, currency and interest rate fluctuations which can, among other things, result in losses or increased costs, increased competition in the retail industry, changes in consumer shopping patterns and demand, the ability of the Company to effectively differentiate its retail locations or obtain new locations or renew, relocate or close existing locations on favourable terms or at all, events that impact the use of the Company's head office and distribution centre or equipment, the loss of key employees or inability to attract, retain and integrate key employees, vendors' ability to maintain, support and upgrade technology and management information systems, changes or disruptions in the credit or securities markets or the trading price or liquidity of the Company's shares, the ability to realize any anticipated improvements in cost reduction initiatives, risks associated with growth or expansion opportunities (or lack thereof), potential legal proceedings, changes to the legal, regulatory and economic environment in which the Company operates now and in the future, changes in laws, or any material disruption to or decline in the Company's operations, among other things. For additional information with respect to Danier's 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, annual MD&A 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 strategies, events, performance and results may vary significantly from those expected. There can be no assurance that the actual strategies, 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. In addition, Danier does not provide financial outlooks or future-oriented financial information and, accordingly, no forward-looking information or statements should be construed as such. 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, distributor 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 86 shopping mall, street-front and outlet stores as well as the online store at danier.com. Additional information about the Company, including the Company's annual information form, quarterly and annual reports, and supplementary information, is available on SEDAR at www.sedar.com and in the Investor Relations section of the Company's website at 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
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fourth Quarter Ended Year Ended
------------------------------------------------
June 27, June 28, June 27, June 28,
2015 2014 2015 2014
------------------------------------------------
13 weeks 13 weeks 52 weeks 52 weeks
Revenue $ 23,469 $ 24,709 $ 126,046 $ 141,930
Cost of sales 16,432 14,861 70,226 73,697
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Gross profit 7,037 9,848 55,820 68,233
Selling, general and
administrative expenses 15,720 17,721 72,898 77,110
Asset impairment losses 1,676 743 3,209 663
Severances (12) 76 1,210 783
Strategic review fees 301 - 738 -
Foreign exchange (gains)
losses 266 723 (2,717) 530
Interest income - (28) (21) (118)
Interest expense 34 10 152 59
------------------------------------------------
Loss before income taxes (10,948) (9,397) (19,649) (10,794)
Provision for (Recovery of)
income taxes 2,343 (2,717) 220 (3,131)
------------------------------------------------
Net loss and comprehensive
loss $ (13,291) $ (6,680) $ (19,869) $ (7,663)
------------------------------------------------
------------------------------------------------
Net loss per share:
Basic $ (3.45) $ (1.74) $ (5.16) $ (2.00)
Diluted $ (3.45) $ (1.74) $ (5.16) $ (2.00)
Weighted average number of
shares outstanding:
Basic 3,854,168 3,847,794 3,854,168 3,840,319
Diluted 3,861,922 3,935,874 3,891,375 3,948,336
Number of shares outstanding
at period end 3,854,168 3,854,168 3,854,168 3,854,168
DANIER LEATHER INC.
CONSOLIDATED BALANCE SHEETS
(thousands of Canadian dollars) - unaudited
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June 27, June 28,
2015 2014
----------------------
ASSETS
Current Assets
Cash $ 928 $ 13,507
Accounts receivable 519 638
Income taxes recoverable 2,074 3,461
Inventories 21,519 21,721
Prepaid expenses 413 643
Derivative financial instruments 782 -
----------------------
26,235 39,970
Non-current Assets
Property and equipment 13,556 16,826
Computer software 1,504 1,459
Deferred income tax asset - 2,374
----------------------
$ 41,295 $ 60,629
----------------------
----------------------
LIABILITIES
Current Liabilities
Bank indebtedness $ 2,293 $ -
Payables and accruals 6,239 8,349
Deferred revenue 1,336 1,511
Provisions 869 566
Derivative financial instruments 54 364
----------------------
10,791 10,790
Non-current Liabilities
Provisions 106 -
Deferred lease inducements and rent liability 1,624 1,432
----------------------
12,521 12,222
----------------------
SHAREHOLDERS' EQUITY
Share capital 11,772 11,772
Contributed surplus 1,276 1,040
Retained earnings 15,726 35,595
----------------------
28,774 48,407
----------------------
$ 41,295 $ 60,629
----------------------
----------------------
DANIER LEATHER INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(thousands of Canadian dollars) - unaudited
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fourth Quarter Ended Year Ended
--------------------------------------------
June 27, June 28, June 27, June 28,
2015 2014 2015 2014
--------------------------------------------
13 weeks 13 weeks 52 weeks 52 weeks
Cash provided by (used in)
OPERATING ACTIVITIES
Net loss $ (13,291) $ (6,680) $ (19,869) $ (7,663)
Adjustments for:
Amortization of property and
equipment 657 875 2,789 3,517
Amortization of computer
software 115 408 401 791
Asset impairment losses 1,676 510 3,209 663
Amortization of deferred
lease inducements (22) (18) (107) (75)
Proceeds from deferred lease
inducements - - 125 -
Non-current provision
expense 106 - 106 -
Straight line rent expense 44 40 174 115
Fair value of derivative
financial instruments 817 929 (1,092) 1,186
Stock-based compensation 15 63 236 209
Interest income - (28) (21) (118)
Interest expense 34 10 152 59
Provision for (refund of)
income taxes 2,343 (2,717) 220 (3,131)
Changes in working capital 5,744 6,051 (1,502) (303)
Interest paid (16) - (81) (107)
Interest received - 32 21 133
Income taxes recovered (paid) - 31 3,541 (183)
--------------------------------------------
Net cash used in operating
activities (1,778) (494) (11,698) (4,907)
--------------------------------------------
FINANCING ACTIVITIES
Increase in bank indebtedness 1,915 - 5,284 -
Repayment of bank indebtedness - - (2,991) -
Subordinate voting shares
issued - 63 - 227
Subordinate voting shares
repurchased - - - (275)
--------------------------------------------
Net cash (used in) generated
from financing activities 1,915 63 2,293 (48)
--------------------------------------------
INVESTING ACTIVITIES
Acquisition of property and
equipment (29) (1,132) (2,728) (4,972)
Acquisition of computer
software (140) (59) (446) (1,107)
--------------------------------------------
Net cash used in investing
activities (169) (1,191) (3,174) (6,079)
--------------------------------------------
Decrease in cash (32) (1,622) (12,579) (11,034)
Cash, beginning of period 960 15,129 13,507 24,541
--------------------------------------------
Cash, end of period $ 928 $ 13,507 $ 928 $ 13,507
--------------------------------------------
--------------------------------------------
DANIER LEATHER INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(thousands of Canadian dollars) - unaudited
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Accumulated
Other
Share Contributed Comprehensive Retained
Capital Surplus Income Earnings Total
------------------------------------------------------------
Balance - June
28, 2014 $ 11,772 $ 1,040 $ - $ 35,595 $ 48,407
Net loss - - - (19,869) (19,869)
Stock-based
compensation
related to
stock options - 236 - - 236
------------------------------------------------------------
Balance - June
27, 2015 $ 11,772 $ 1,276 $ - $ 15,726 $ 28,774
------------------------------------------------------------
Accumulated
Other
Share Contributed Comprehensive Retained
Capital Surplus Income Earnings Total
----------------------------------------------------------
Balance - June 29,
2013 $ 11,533 $ 954 $ - $ 43,422 $ 55,909
Net loss - - - (7,663) (7,663)
Stock-based
compensation
related to
stock options - 209 - - 209
Exercise of
stock options 350 (123) - - 227
Share
repurchases
(net of tax) (111) - - (164) (275)
----------------------------------------------------------
Balance - June 28,
2014 $ 11,772 $ 1,040 $ - $ 35,595 $ 48,407
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Contacts:
Danier Leather Inc.
Jeffrey Wortsman
President and Chief Executive Officer
(416) 762-8175 ext. 302
jeffreyw@danier.com
Danier Leather Inc.
Brent Houlden
Interim Chief Financial Officer and Secretary
(416) 762-8175 ext. 311
bhoulden@danier.com
www.danier.com
