Record revenue in fiscal 2018 and Q4
fiscal 2018 Comparable Sales Growth of 3.1%
TORONTO,
April 3, 2019 /CNW/
- Roots ("Roots," "Roots Canada" or
the "Company") (TSX: ROOT), a premium outdoor lifestyle brand,
today announced its financial results for its fourth quarter and
fiscal year ended February 2, 2019
("Q4 2018" and "F2018", respectively). All financial results are
reported in Canadian dollars unless otherwise stated. Certain
metrics, including those expressed on an adjusted or comparable
basis, are non-IFRS measures. See "Non-IFRS Measures and Industry
Metrics".
Fourth Quarter Fiscal 2018 Highlights
- Total sales of $130.8
million, up 0.6% as compared to $130.0 million in the fourth quarter of fiscal
2017 ("Q4 2017") or up 3.1% when excluding the additional week in
Q4 2017 (fiscal 2017 consisted of 53 weeks while F2018 consisted of
52 weeks)
-
- Direct-to-Consumer ("DTC") sales of $120.7 million, up 0.7% from $119.8 million in Q4 2017, or up 3.4% when
excluding the additional week in Q4 2017
- Comparable Sales Growth of 3.1% on top of Comparable
Sales Growth of 15.2% in Q4 2017
- Gross margin expanded to 59.9% from 58.3% in Q4
2017
-
- DTC Gross Margin increased 190 basis points to 61.8% from
59.9% in Q4 2017
- Selling, general and administrative expenses of
$51.8 million, up 12.9% from
$45.9 million in Q4 2017
- Adjusted EBITDA of $34.8
million, down 5.2% from $36.7
million in Q4 2017
- Basic Earnings Per Share of $0.43, down 14.0% from $0.50 per share in Q4 2017, and Adjusted Net
Income Per Share of $0.53, down 10.2%
from $0.59 per share in Q4
2017
- Grew North American corporate store base in F2018, but
elected not to renew leases for four corporate retail stores in
Canada in the quarter, ending the
quarter with 114 stores in Canada
and seven in the United
States
- Opened two partner-operated stores in Taiwan and four partner-operated stores in
China, ending the quarter with 117
stores in Taiwan and 37 in
China
Fiscal 2018 Highlights
- Total sales of $329.0
million, up 0.9% as compared to $326.1 million in fiscal 2017 ("F2017"), or up
1.9% when excluding the additional week in F2017
-
- DTC sales of $283.9
million, down 0.1% from $284.1
million in F2017, or up 1.0% when excluding the additional
week in F2017
- Comparable Sales Decline of (1.3%) on top of Comparable
Sales Growth of 12.2% in F2017
- Gross margin expanded to 57.3% from 55.8% in
F2017
-
- DTC Gross Margin increased 220 basis points to 61.2% from
59.0% in F2017
- Selling, general and administrative expenses of
$166.8 million, up 9.8% from
$151.9 million in F2017
- Adjusted EBITDA of $41.9
million, down 20.4% from $52.6
million in F2017
- Basic Earnings Per Share of $0.27, down 35.7% from $0.42 per share in F2017, and Adjusted Net Income
Per Share of $0.48, down 30.4% from
$0.69 per share in F2017
- Grew North American footprint with a net increase of two
corporate retail stores, opening six new corporate retail stores in
Canada and four new corporate
retail stores in the United
States, while electing not to renew leases for eight
corporate retail stores in Canada
- Expanded Asian footprint with a net increase of seven
partner-operated stores in Taiwan
and five in China
"Roots resonates incredibly well with consumers during the
holiday season, and that continued to be the case in Q4 2018," said
Jim Gabel, President and Chief
Executive Officer of Roots. "In the quarter, we saw growth in key
perennial product favourites and encouraging consumer response to
new product introductions. In addition, we benefitted from store
renovations, our ability to support higher levels of shopping
activity during peak selling periods, and our success in overcoming
challenges caused by the Canada Post strike. As a result, we
delivered Comparable Sales Growth of 3.1% for the quarter and 18.3%
on a two-year stacked basis."
Mr. Gabel continued: "Looking ahead, we remain confident
that we are on track to achieve our fiscal 2019 targets. To build
on our fiscal 2018 record revenue, we will execute our strategy
with an amplified brand voice and the introduction of more
seasonally transitional products, while also benefitting from the
strategic investments we have made in the business. With our
longstanding and strong market position as a premium outdoor
lifestyle brand, as well as our capabilities as a seamless
omni-channel retailer, we continue to be extremely excited about
the long-term growth opportunities in front of us."
Summary of Fiscal 2018 Fourth Quarter and Year-End
Financial Results
Sales
Total Q4 2018 sales
increased 0.6% to $130.8 million from
$130.0 million in Q4 2017, or
increased 3.1% when excluding the additional 53rd week
in Q4 2017 (representing $3.1 million
in sales). Total F2018 sales increased 0.9% to $329.0 million from $326.1
million in F2017, or increased 1.9% when excluding the
additional week in F2017.
Q4 2018 sales in the DTC segment (corporate retail store
and eCommerce sales) increased 0.7% to $120.7 million from $119.8
million in Q4 2017, or increased 3.4% when excluding the
additional week in Q4 2017. F2018 DTC sales of $283.9 million were down 0.1% from $284.1 million in F2017, or up 1.0% when
excluding the additional week in F2017.
Comparable Sales Growth for Q4 2018 was 3.1%, largely
reflecting strong performance of major product franchises,
successful new product introductions, and benefits from store
renovations (the renovation of four stores, as well as the
relocation and expansion of six stores since Q4 2017). For F2018,
Roots recorded a Comparable Sales Decline of (1.3%) predominantly
as a result of a softer third quarter of Fiscal 2018.
The Company's Q4 2018 and F2018 DTC sales also reflected
the opening of two net new corporate retail stores since Q4
2017.
Sales in the Partners and Other segment (wholesale
Roots-branded products, royalties on partner retail sales,
licensing to select manufacturing partners and the sale of certain
custom Roots-branded products) for Q4 2018 were $10.1 million, down 0.7% from $10.2 million in Q4 2017, primarily as a result
of the early Q3 2018 delivery of certain orders to the Company's
operating partner in Asia that
were initially planned for Q4 2018 (as discussed in the Company's
Q3 fiscal 2018 disclosure). The Company also realized a
$0.4 million foreign exchange
benefit, related to Partners and Other sales, in Q4 2018 relative
to Q4 2017.
F2018 sales in the Partners and Other segment were
$45.2 million, representing a 7.7%
increase from $41.9 million in F2017
primarily as a result of sales growth in Asia including the net addition of seven new
partner-operated stores in Taiwan
and five in China. The Company
also realized a $0.7 million foreign
exchange benefit, related to Partners and Other sales, in F2018
relative to F2017.
Gross Profit
Total gross
profit for Q4 2018 increased 3.4% to $78.3
million from $75.8 million in
Q4 2017. Total gross profit for F2018 increased 3.6% to
$188.5 million from $182.0 million in F2017.
Q4 2018 gross profit in the DTC segment increased 4.0% to
$74.6 million from $71.7 million in Q4 2017. Q4 2018 DTC Gross
Margin was 61.8%, up 190 basis points from a Q4 2017 DTC Gross
Margin of 59.9%. Year-over-year gross margin improvements reflect
improved product costing and favourable foreign exchange rates on
goods purchased in U.S. dollars, the benefits of which were
partially offset by higher markdowns in the quarter to sell through
higher levels of seasonal inventory. F2018 gross profit in the DTC
segment increased 3.7% to $173.8
million from $167.6 million in
F2017, and F2018 DTC Gross Margin was 61.2%, up 220 basis points
from a F2017 DTC Gross Margin of 59.0%.
Q4 2018 gross profit in the Partners and Other segment
decreased 7.2% to $3.8 million from
$4.1 million in Q4 2017, primarily as
a result of the Q3 2018 delivery of certain orders to the Company's
operating partner in Asia that
were initially planned for Q4 2018. Reflecting year-over-year sales
growth, F2018 gross profit in the Partners and Other segment
increased 1.7% to $14.7 million from
$14.4 million in F2017.
Selling, general and administrative
expenses
Selling, general and
administrative expenses for Q4 2018 were $51.8 million, up 12.9% from $45.9 million in Q4 2017, and selling, general
and administrative expenses for F2018 were $166.8 million, up 9.8% from $151.9 million in F2017. The year-over-year
increase was primarily driven by incremental costs to support a
larger retail store footprint, costs resulting from higher
omni-channel sales, including an additional $0.6 million in Q4 2018 shipping costs as a
result of the Canada Post strike, as well as strategic investments
in the business. Year-over-year marketing expenses increased
$0.9 million, and $3.1 million for Q4 2018 and F2018as compared to
the same periods in the prior fiscal year. The impact of the
legislated minimum wage increase across the Company's retail stores
in Ontario and Alberta accounted for an additional
$0.5 million and $1.9 million for Q4 2018 and F2018, respectively.
Public company costs were an incremental $0.4 million for Q4 2018 and $1.8 million for F2018.
Adjusted EBITDA, Net Income & Adjusted Net
Income
Adjusted EBITDA for Q4 2018 was
$34.8 million, down 5.2% from
$36.7 million in Q4 2017. Adjusted
EBITDA for F2018 was $41.9 million,
down 20.4% from $52.6 million in
F2017.
Q4 2018 net income was $18.3
million, or $0.43 basic
Earnings Per Share, compared to $20.9
million, or $0.50 basic
Earnings Per Share, in Q4 2017. Q4 2018 Adjusted Net Income was
$22.3 million, or $0.53 per share, compared to $24.6 million, or $0.59 per share, in Q4 2017. In the quarter, the
Company recorded an income tax expense of $6.9 million, compared to $7.8 million in Q4 2017, with an effective tax
rate of 27.3%, consistent with Q4 2017.
F2018 net income was $11.4
million, or $0.27 basic
earnings per share, compared to $17.5
million, or $0.42 basic
earnings per share, in F2017. F2018 adjusted net income was
$20.2 million, or $0.48 per share, compared to $29.1 million, or $0.69 per share, in F2017. For the year, the
Company recorded an income tax expense of $5.1 million, compared to $6.9 million in F2017, with an effective tax rate
of 31.0%, up from 28.3% in F2017.
Outlook
During fiscal 2019
("F2019"), the Company will continue to execute on its growth
strategy, placing a greater focus on implementing larger scale,
digitally-driven brand-building campaigns and introducing new
innovative and transitional seasonal products into its line. Roots
will continue to work to:
- leverage the operational investments made to drive
efficiencies within the business;
- pursue continued growth in Canada;
- expand the brand's presence in the U.S.;
- expand in international markets; and
- deepen the Company's offering in leather and
footwear.
Roots expects to deliver growth in F2019 and remains
confident the Company is on track to achieve its F2019 targets
of:
- Sales between $358 million
and $375 million,
- Adjusted EBITDA between $46
million and $50 million,
and
- Adjusted net income between $20
million and $24
million.
The key assumptions underlying the Company's
F2019 financial targets are:
Renovations and
expansions
|
5-7
|
Canadian store
openings
|
1-2
|
U.S. store
openings
|
1-2
|
International
expansion
|
Continue
to:
- add stores in
Taiwan and China
- explore entry into
new markets
- grow international
eCommerce
|
eCommerce as a
percentage of DTC sales
|
17-19%
|
Adoption of IFRS 16
Starting in the
first quarter of Fiscal 2019, Roots will report lease obligations
according to IFRS 16 with leases reflected on the Company's balance
sheet and rent expense being replaced with interest and
depreciation in the Company's income statement. For F2019, Roots
will provide adjusted results to accurately compare F2018 and F2019
performance.
Based on information as at April 2,
2019, as a result of the initial application of IFRS 16 as
at February 3, 2019, the Company
anticipates recognizing approximately $108.0
million to $128.0 million of
right-of-use assets and $125.0
million to $145.0 million of
lease liabilities on its consolidated statement of financial
position.
Conference Call and Webcast
Information
Roots will hold a conference call
to discuss the Company's F2018 fourth quarter and year-end
financial results on April 3, 2019 at
8:00 a.m. ET. All interested parties
can join the call by dialing 647-427-7450 or
1-888-231-8191 and using conference ID: 4449409. Please
dial-in 15 minutes prior to the call to secure a line. The
conference call will be archived for replay until April 10, 2019 at midnight and can be accessed by
dialing 416-849-0833 or 1-855-859-2056 and entering replay passcode
4449409.
A live audio webcast of the conference call will be
available on the Events and Presentations section of the Company's
investor website at http://investors.roots.com
or by following the link here. Please connect at least 15
minutes prior to the conference call to ensure adequate time for
any software download that may be required to join the webcast. An
archived replay of the webcast will be available on the Company's
website for one-year.
See Roots Annual Consolidated Financial Statements and the
Company's Management's Discussion and Analysis of Financial
Condition and Results of Operations for the Fourth Quarter and Year
Ended February 2, 2019 on the
Company's investor website at
https://investors.roots.com and on SEDAR at
www.SEDAR.com.
About Roots
Established in 1973,
Roots is a premium outdoor lifestyle brand. We unite the best of
cabin and city through unmistakable style built with uncompromising
comfort and quality. We offer a broad range of products that embody
a comfortable cabin-meets-city style including: women's and men's
apparel, leather goods, footwear, accessories, and kids, toddler
and baby apparel. Starting from a little cabin in Algonquin Park, Canada, Roots has grown to
become a global brand. As of February 2,
2019, we had 114 corporate retail stores in Canada, seven corporate retail stores in
the United States, 117
partner-operated stores in Taiwan,
37 partner-operated stores in China and a global eCommerce platform. Roots
Corporation is a Canadian corporation doing business as "Roots" and
"Roots Canada".
Non-IFRS Measures and Industry
Metrics
This press release makes reference to
certain non-IFRS measures including certain metrics specific to the
industry in which we operate. These measures are not recognized
measures under IFRS, do not have a standardized meaning prescribed
by IFRS and, therefore, may not be comparable to similar measures
presented by other companies. Rather, these measures are provided
as additional information to complement those IFRS measures by
providing further understanding of our results of operations from
management's perspective. Accordingly, these measures are not
intended to represent, and should not be considered as alternatives
to net income or other performance measures derived in accordance
with IFRS as measures of operating performance or operating cash
flows or as a measure of liquidity. In addition to our results
determined in accordance with IFRS, we use non-IFRS measures
including EBITDA, Adjusted EBITDA, Adjusted Net Income (Loss), and
Adjusted Net Income (Loss) per Share. This press release also
refers to Comparable Sales Growth (Decline), a commonly used metric
in our industry but that may be calculated differently compared to
other companies. We believe these non-IFRS measures and industry
metrics provide useful information to both management and investors
in measuring our financial performance and condition and highlight
trends in our core business that may not otherwise be apparent when
relying solely on IFRS measures. Definitions and reconciliations of
non-IFRS measures to the relevant reported measures can be found in
our MD&A under "Cautionary Note Regarding Non-IFRS Measures and
Industry Metrics", which is available on SEDAR at
www.sedar.com or the Company's Investor Relations website at
https://investors.roots.com.
Forward-Looking Information
Certain
information in this press release contains forward-looking
information. This information is based on management's reasonable
assumptions and beliefs in light of the information currently
available to us and are made as of the date of this press release.
Actual results and the timing of events may differ materially from
those anticipated in the forward-looking information as a result of
various factors. Information regarding our expectations of future
results, performance, achievements, prospects or opportunities or
the markets in which we operate is forward-looking information.
Statements containing forward-looking information are not facts but
instead represent management's expectations, estimates and
projections regarding future events or circumstances. Many factors
could cause our actual results, level of activity, performance or
achievements or future events or developments to
differ materially from those expressed or implied by the
forward-looking statements.
See "Forward-Looking Information" and "Risk Factors" in
the Company's current Annual Information Form for a discussion of
the uncertainties, risks and assumptions associated with these
statements. Readers are urged to consider the uncertainties, risks
and assumptions carefully in evaluating the forward-looking
information and are cautioned not to place undue reliance on such
information. We have no intention and undertake no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by applicable securities law.
ROOTS
CORPORATION
Consolidated Statement of
Financial Position
(In thousands of Canadian
dollars)
As at February 2, 2019 and
February 3,
2018
|
|
|
|
|
|
|
February
2,
2019
|
|
February
3,
2018
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
|
$
|
1,991
|
$
|
1,809
|
|
Accounts
receivable
|
|
6,627
|
|
6,420
|
|
Inventories
|
|
49,533
|
|
35,407
|
|
Prepaid
expenses
|
|
6,443
|
|
5,580
|
|
Derivative
assets
|
|
366
|
|
–
|
|
Total current
assets
|
|
64,960
|
|
49,216
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Loan
receivable
|
|
562
|
|
541
|
|
Fixed
assets
|
|
64,163
|
|
36,981
|
|
Intangible
assets
|
|
198,724
|
|
203,408
|
|
Goodwill
|
|
52,705
|
|
52,705
|
|
Total non-current
assets
|
|
316,154
|
|
293,635
|
|
|
|
|
|
Total
assets
|
$
|
381,114
|
$
|
342,851
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Bank
indebtedness
|
$
|
12,409
|
$
|
–
|
|
Accounts payable and
accrued liabilities
|
|
22,291
|
|
18,306
|
|
Deferred
revenue
|
|
5,498
|
|
4,647
|
|
Income taxes
payable
|
|
6,445
|
|
6,589
|
|
Current portion of
long-term debt
|
|
4,984
|
|
4,984
|
|
Derivative
obligations
|
|
–
|
|
1,233
|
|
Total current
liabilities
|
|
51,627
|
|
35,759
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
Deferred tax
liabilities
|
|
22,761
|
|
21,166
|
|
Deferred lease
costs
|
|
10,063
|
|
4,815
|
|
Finance lease
obligation
|
|
504
|
|
894
|
|
Long-term
debt
|
|
80,031
|
|
79,481
|
|
Other non-current
liabilities
|
|
1,424
|
|
1,763
|
|
Total non-current
liabilities
|
|
114,783
|
|
108,119
|
Total
liabilities
|
|
166,410
|
|
143,878
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
Share
capital
|
|
196,853
|
|
195,994
|
|
Contributed
surplus
|
|
3,975
|
|
1,675
|
|
Accumulated other
comprehensive income (loss)
|
|
268
|
|
(904)
|
|
Retained
earnings
|
|
13,608
|
|
2,208
|
Total shareholders'
equity
|
|
214,704
|
|
198,973
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
381,114
|
$
|
342,851
|
On behalf of the Board of Directors:
"Erol Uzumeri"
Director
"Richard P. Mavrinac"
Director
ROOTS CORPORATION
Consolidated
Statement of Net Income
(In thousands of Canadian
dollars, except per share amounts)
For the 52 week period ended February 2, 2019 and for the 53 week period ended
February 3, 2018
|
|
|
|
|
|
|
February 2,
2019
|
|
February 3,
2018
|
|
|
|
|
|
Sales
|
$
|
329,028
|
$
|
326,057
|
|
|
|
|
|
Cost of goods
sold
|
|
140,538
|
|
144,059
|
|
|
|
|
|
Gross
profit
|
|
188,490
|
|
181,998
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
166,790
|
|
151,867
|
|
|
|
|
|
Income before
interest expense and income taxes expense
|
|
21,700
|
|
30,131
|
|
|
|
|
|
Interest
expense
|
|
5,171
|
|
5,728
|
|
|
|
|
|
Income before income
taxes
|
|
16,529
|
|
24,403
|
|
|
|
|
|
Income taxes
expense
|
|
5,129
|
|
6,902
|
|
|
|
|
|
Net income
|
$
|
11,400
|
$
|
17,501
|
|
|
|
|
|
Basic earnings per
share
|
$
|
0.27
|
$
|
0.42
|
Diluted earnings per
share
|
$
|
0.27
|
$
|
0.41
|
|
|
|
|
|
ROOTS CORPORATION
Consolidated
Statement of Comprehensive Income (Loss)
(In
thousands of Canadian dollars)
For the 52 week period ended February 2, 2019 and for the 53 week period ended
February 3, 2018
|
|
|
|
|
|
|
February 2,
2019
|
|
February 3,
2018
|
|
|
|
|
|
Net income
|
$
|
11,400
|
$
|
17,501
|
|
|
|
|
|
Other comprehensive
income (loss), net of taxes:
|
|
|
|
|
Items that may be
subsequently reclassified to profit or loss:
|
|
|
|
|
Effective portion of
changes in fair value of cash flow hedges
|
|
3,538
|
|
(2,320)
|
|
|
|
|
|
Cost of hedging
excluded from cash flow hedges
|
|
218
|
|
52
|
|
|
|
|
|
Tax impact of cash
flow hedges
|
|
(1,001)
|
|
604
|
Total other
comprehensive income (loss)
|
|
2,755
|
|
(1,664)
|
|
|
|
|
|
Total comprehensive
income
|
|
$
14,155
|
$
|
15,837
|
ROOTS CORPORATION
Consolidated
Statement of Changes in Shareholders' Equity
(In
thousands of Canadian dollars)
For the 52 week period ended February 2, 2019 and for the 53 week period ended
February 3, 2018
|
|
|
|
|
|
|
|
|
|
|
February 2,
2019
|
|
Share
capital
|
|
Contributed
surplus
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
income
|
|
Total
|
Balance, February 4,
2018
|
$
|
195,994
|
$
|
1,675
|
$
|
2,208
|
$
|
(904)
|
$
|
198,973
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
–
|
$
|
–
|
$
|
11,400
|
$
|
–
|
$
|
11,400
|
|
|
|
|
|
|
|
|
|
|
|
Net gain from change
in fair
|
|
|
|
|
|
|
|
|
|
|
value of cash flow
hedges,
|
|
|
|
|
|
|
|
|
|
|
net of income
taxes
|
|
–
|
|
–
|
|
–
|
|
2,755
|
|
2,755
|
|
|
|
|
|
|
|
|
|
|
|
Transfer of realized
loss on cash
|
|
|
|
|
|
|
|
|
|
|
flow hedges to
inventories, net
of income taxes
|
|
–
|
|
–
|
|
–
|
|
(1,583)
|
|
(1,583)
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
–
|
|
2,507
|
|
–
|
|
–
|
|
2,507
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of
shares
|
|
859
|
|
(207)
|
|
–
|
|
–
|
|
652
|
|
|
|
|
|
|
|
|
|
|
|
Balance, February 2,
2019
|
$
|
196,853
|
$
|
3,975
|
$
|
13,608
|
$
|
268
|
$
|
214,704
|
|
|
|
|
|
|
|
|
|
|
|
February 3,
2018
|
|
Share
capital
|
|
Contributed
surplus
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
loss
|
|
Total
|
Balance, January 29,
2017
|
$
|
195,994
|
$
|
483
|
$
|
4,707
|
$
|
–
|
$
|
201,184
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
–
|
$
|
–
|
$
|
17,501
|
$
|
–
|
$
|
17,501
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from change
in fair
|
|
|
|
|
|
|
|
|
|
|
value of cash flow
hedges,
|
|
|
|
|
|
|
|
|
|
|
net of income
taxes
|
|
–
|
|
–
|
|
–
|
|
(1,664)
|
|
(1,664)
|
|
|
|
|
|
|
|
|
|
|
|
Transfer of realized
loss on cash
|
|
|
|
|
|
|
|
|
|
|
flow hedges to
inventories, net
of income taxes
|
|
–
|
|
–
|
|
–
|
|
760
|
|
760
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
declared
|
|
–
|
|
–
|
|
(20,000)
|
|
–
|
|
(20,000)
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
–
|
|
1,192
|
|
–
|
|
–
|
|
1,192
|
|
|
|
|
|
|
|
|
|
|
|
Balance, February 3,
2018
|
$
|
195,994
|
$
|
1,675
|
$
|
2,208
|
$
|
(904)
|
$
|
198,973
|
ROOTS CORPORATION
Consolidated
Statement of Cash Flows
(In thousands of Canadian
dollars)
For the 52 week period ended February 2, 2019 and for the 53 week period ended
February 3, 2018
|
|
|
|
|
|
|
February 2,
2019
|
|
February 3,
2018
|
Cash provided by
(used in):
|
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
Net income
|
$
|
11,400
|
$
|
17,501
|
|
Items not involving
cash:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
12,935
|
|
10,886
|
|
|
Share-based
compensation expense
|
|
2,507
|
|
1,192
|
|
|
Impairment of fixed
assets
|
|
1,375
|
|
1,281
|
|
Deferred lease costs
(recovery)
|
|
(617)
|
|
847
|
|
Amortization of lease
intangibles
|
|
548
|
|
907
|
|
Interest
expense
|
|
5,171
|
|
5,728
|
|
|
Income taxes
expense
|
|
5,129
|
|
6,902
|
|
|
Interest
paid
|
|
(4,620)
|
|
(5,105)
|
|
|
Taxes paid
|
|
(4,104)
|
|
(5,602)
|
|
Change in non-cash
operating working capital:
|
|
|
|
|
|
Accounts
receivable
|
|
(207)
|
|
(1,474)
|
|
Inventories
|
|
(14,126)
|
|
(2,725)
|
|
Prepaid
expenses
|
|
(863)
|
|
(4,007)
|
|
Accounts payable and
accrued liabilities
|
|
3,985
|
|
2,514
|
|
Deferred
revenue
|
|
851
|
|
807
|
|
|
19,364
|
|
29,652
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
Issuance of long-term
debt
|
|
5,000
|
|
–
|
|
Long-term debt
financing costs
|
|
(66)
|
|
(999)
|
|
Repayment of
long-term debt
|
|
(4,984)
|
|
(19,654)
|
|
Finance lease
payments
|
|
(361)
|
|
(203)
|
|
Distributions
paid
|
|
–
|
|
(20,000)
|
|
Proceeds from
issuance of shares
|
|
652
|
|
–
|
|
|
241
|
|
(40,856)
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
Additions to fixed
assets
|
|
(37,695)
|
|
(14,058)
|
|
Tenant allowance
received
|
|
5,863
|
|
1,814
|
|
|
(31,832)
|
|
(12,244)
|
|
|
|
|
|
Increase (decrease)
in cash
|
|
(12,227)
|
|
(23,448)
|
|
|
|
|
|
Cash, beginning of
period
|
|
1,809
|
|
25,257
|
|
|
|
|
|
Cash and bank
indebtedness, end of period
|
$
|
(10,418)
|
$
|
1,809
|
SOURCE Roots Corporation