Winnipeg Free Press - PRINT EDITION

Leon's blames competition, economy for quarterly drop

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TORONTO -- Leon's Furniture Ltd. (TSX:LNF) is reporting lower fourth-quarter revenue and profit, citing weakness in the economy and a competitive retail environment.

The Toronto-based retailer posted net income of $16 million, or 22 cents per diluted share, for the three months ended Dec. 31, compared to $19.9 million, or 27 cents per diluted share, in the year-earlier period.

Sales, including corporate and franchise stores, came in at $248 million for the quarter, down from $255 million in the year-earlier period. Same-store corporate sales were down two per cent year over year.

For the year, Leon's reported net income was $46.8 million, or 65 cents per diluted share, compared to $56.7 million, or 78 cents per diluted share, in 2011.

Sales, including corporate and franchise stores, came in at $880.2 million in 2012 compared to $879.5 million in 2011. Same-store corporate sales were down 2.9 per cent year over year.

Last November, Leon's announced plans to acquire Edmonton-based rival the Brick Ltd. in a friendly deal they say will help the Canadian retailers cope with U.S.-based competitors.

Under the deal, Brick shareholders may receive $5.40 in cash per common share or 0.0054 convertible debentures. For each warrant, the holder may receive $4.40 in cash per warrant or 0.0044 convertible debentures per warrant.

Leon's said it expects its acquisition of the Brick (TSX:BRK) to close before the end of March, noting professional fees incurred from the deal shaved off two cents per common share in earnings for the quarter.

Leon's has 76 stores and is in every province except British Columbia. The Brick has 230 stores.

Shares in Leon's were down 34 cents, or 2.7 per cent, to $12.25 in Thursday-afternoon trading on the Toronto Stock Exchange.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition February 22, 2013 B7

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