------------------------------------------------------------------------- - Revenues for the fourth quarter rose 24.7% to $3.7 billion - Net earnings amount to $15.5 million during the quarter, a decrease compared with $33.4 million in 2007, strongly impacted by: - Weak motor fuel margins in the United States - Expenses related to electronic payment modes - Unfavourable economic conditions in the southern part of the United States - Stepping up of share repurchase program reaching $53.0 million for the quarter - Development-wise, signing of firm agreements: - Expanded partnership with Irving Oil to include 252 stores across Atlantic Canada and New England - Acquisition of 84 company-operated stores in Illinois and Missouri - New credit agreement of US$310 million subsequent to year-end ------------------------------------------------------------------------- TSX: ATD.A, ATD.B
LAVAL, QC, July 15 /PRNewswire-FirstCall/ - Owing to recent acquisitions
and especially to the sharp increase in the retail price at the pump,
Alimentation Couche-Tard Inc. posted solid growth in revenues for the fourth
quarter of fiscal 2008.
Revenues for the 12-week period ended April 27, 2008 show a robust
increase of 24.7%, reaching $3.7 billion, i.e. an increase of $733.2 million.
An amount of $475.5 million stems from soaring motor fuel prices, $120.1
million result from major acquisitions and $89.8 million were generated from
the appreciating value of the Canadian dollar.
Net earnings for the fourth quarter of 2008 were $15.5 million ($0.08 per
share on a diluted basis) compared with $33.4 million ($0.16 per share on a
diluted basis) last year.
"The past quarter was extremely challenging in the United States. We faced
turbulence on several fronts, namely an economic slack in our southern
divisions combined with motor fuel margins far below historical averages,
compounded by electronic payment modes expenses exceeding the four cents per
gallon average this quarter. Given these circumstances, our operational teams
focused on in-store execution and on maintaining our market share. We expect
to be fully prepared when better market conditions arise. I would also add
that we have an excellent balance sheet and a solid cash position which we
fully intend to leverage when growth opportunities will arise," notes Alain
Bouchard, Chairman of the Board, President and Chief Executive Officer.
Highlights of the Fourth Quarter of Fiscal 2008
Growth of the Store Network
12-week period ended 52-week period ended
April 27, 2008 April 27, 2008
------------------------------------------------------------
Company- Affi-Company- Affi-
operatedliatedoperatedliated
stores stores(1)Totalstores stores(1)Total
------------------------------------------------------------
Number of stores,
beginning of
period 4,087 1,034 5,121 4,072 1,023 5,095
Acquisitions - - -44 -44
Openings/
constructions/
additions1225374475 119
Closures/
withdrawals (32) (7) (39) (98) (41) (139)
Conversions
into
company-
operated
stores1(1)- 7(7)-
Conversions
into
affiliated
stores- - -(1)1 -
-------------------------------------------------------------------------
Number of stores,
end of period 4,068 1,051 5,119 4,068 1,051 5,119
-------------------------------------------------------------------------
-------------------------------------------------------------------------
1. Since the fourth quarter of 2008, this number excludes the "purchasing
partners" and independent store operators to which we supply motor
fuel, which were previously included with the affiliated stores.
Opening balances were adjusted to reflect this new methodology.
IMPACT Program
During the fourth quarter, Couche-Tard implemented its IMPACT program in
93 company-operated stores, for a total of 422 stores since the beginning of
fiscal 2008. As a result, 61.3% of the company-operated stores have now been
converted to the IMPACT program, which gives the Company considerable
opportunity for future internal growth.
Dividends
On July 15, 2008, the Board of Directors of Couche-Tard declared a
dividend of Cdn$0.035 per share to shareholders on record as at July 24, 2008,
and approved its payment for August 1, 2008. This is an eligible dividend
within the meaning of the Income Tax Act.
Share repurchase program
Under its share repurchase program, Couche-Tard repurchased 2,062,200
Class A multiple voting shares during the fourth quarter at an average cost of
Cdn$14.98 and 1,393,206 Class B subordinate voting shares at an average cost
of Cdn$15.99. On a cumulative basis, as at April 27, 2008, since the
implementation of this program, repurchases total 2,116,600 Class A multiple
voting shares at an average cost of Cdn$15.05 and 4,045,606 Class B
subordinate voting shares at an average cost of Cdn$17.23.
Subsequent Event
On June 13, 2008, the Company entered into a new credit agreement
consisting of a revolving unsecured facility of an initial maximum amount of
$310.0 million with an initial maturity, terms and conditions similar to those
of the agreement held by the Company as at April 27, 2008, which is described
in note 17a) of the consolidated financial statements included in the 2008
Annual Report.
Exchange Rate Data
The Company reports in US dollars given the predominance of its operations
in the United States and its US dollar denominated debt.
The following table presents relevant exchange rates information based
upon the Bank of Canada closing rates expressed as US dollars per Cdn$1.00:
12-week periods ended 52-week periods ended
-----------------------------------------------------
April 27, April 29, April 27, April 29,
2008 2007 2008 2007
-----------------------------------------------------
Average for period(1) 0.99470.8633 0.9773 0.8789
Period end0.98400.8961 0.9840 0.8961
-------------------------------------------------------------------------
1. Calculated by taking the average of the closing exchange rates of each
day in the applicable period.
Selected Consolidated Financial Information
The following tables highlight certain information regarding
Couche-Tard's operations for the 12-week and the 52-week periods ended
April 27, 2008 and April 29, 2007:
(In millions
of US
dollars,
unless
otherwise ----------------------------------------------------------
stated)12-week periods ended52-week periods ended
----------------------------------------------------------
April April Vari-April April Vari-
27, 29,ation27, 29, ation
2008 2007 % 2008 2007 %
----------------------------------------------------------
Statement
of Operations
Data:
Merchandise and
service
revenues(1):
United States 790.8 768.7 2.9 3,476.3 3,116.6 11.5
Canada 373.5 318.4 17.3 1,724.4 1,500.4 14.9
----------------------------------------------------------
Total
merchandise
and service
revenues1,164.3 1,087.1 7.1 5,200.7 4,617.0 12.6
----------------------------------------------------------
Motor fuel
revenues:
United
States 2,229.3 1,666.7 33.8 8,891.6 6,514.6 36.5
Canada 312.2 218.8 42.7 1,277.7 955.8 33.7
----------------------------------------------------------
Total motor
fuel
revenues2,541.5 1,885.5 34.8 10,169.3 7,470.4 36.1
----------------------------------------------------------
Total
revenues 3 705.8 2,972.6 24.7 15,370.0 12,087.4 27.2
----------------------------------------------------------
----------------------------------------------------------
Merchandise
and
service
gross
profit(1):
United
States262.4 255.5 2.7 1,146.5 1,046.9 9.5
Canada 129.5 113.5 14.1 601.1 526.6 14.2
----------------------------------------------------------
Total
merchandise
and
service
gross
profit391.9 369.0 6.2 1,747.6 1,573.5 11.1
----------------------------------------------------------
Motor fuel
gross profit:
United
States 67.7 82.8 (18.2)393.9 372.1 5.9
Canada 19.3 14.2 35.9 82.0 58.9 39.2
----------------------------------------------------------
Total
motor
fuel
gross profit 87.0 97.0 (10.3)475.9 431.0 10.4
----------------------------------------------------------
Total gross
profit 478.9 466.0 2.8 2,223.5 2,004.5 10.9
Operating,
selling,
administrative
and general
expenses415.2 367.0 13.1 1,738.9 1,512.4 15.0
Depreciation
and
amortization
of property
and equipment
and other
assets 39.9 34.4 16.0 172.5 133.8 28.9
----------------------------------------------------------
Operating
income 23.8 64.6 (63.2)312.1 358.3 (12.9)
----------------------------------------------------------
Net earnings 15.5 33.4 (53.6)189.3 196.4 (3.6)
----------------------------------------------------------
----------------------------------------------------------
Other Operating
Data:
Merchandise and
service gross
margin(1):
Consolidated33.7% 33.9% (0.2) 33.6% 34.1% (0.5)
United
States 33.2% 33.2%- 33.0% 33.6% (0.6)
Canada 34.7% 35.6% (0.9) 34.9% 35.1% (0.2)
Growth of
same-store
merchandise
revenues(2)(3):
United
States 0.1% 3.4%2.5% 3.3%
Canada 2.2% 3.3%4.0% 2.6%
Motor fuel
gross margin:
United
States
(cents per
gallon)(3): 10.02 13.12 (23.6)13.58 14.90 (8.9)
Canada
(Cdn cents
per litre) 5.25 4.67 12.4 5.08 4.31 17.9
Volume of motor
fuel sold(4):
United
States
(millions of
gallons) 697.3 671.0 3.9 3,019.9 2,609.0 15.7
Canada
(millions of
litres) 370.1 351.0 5.4 1,655.0 1,554.5 6.5
Growth of
same-store
motor fuel
volume(3):
United
States 0.9% (2.5%) (0.2%) 2.9%
Canada 5.8% 5.2%6.3% 4.8%
----------------------------------------------------------
Per Share Data:
Basic net
earnings per
share (dollars
per action)0.08 0.17 (52.9) 0.94 0.97 (3.1)
Diluted net
earnings per
share (dollars
per action)0.08 0.16 (50.0) 0.92 0.94 (2.1)
----------------------------------------------------------
April April Vari-
27, 29,ation
2008 2007 $
----------------------------------------------------------
Balance Sheet Data:
Total assets 3,320.6 3,043.2 277.4
Interest-bearing debt842.2 870.0 (27.8)
Shareholders' equity 1,253.7 1,145.4 108.3
Ratios:
Net interest-bearing debt/total
capitalization(5)0.33 : 1 0.39 : 1
Net interest-bearing debt/EBITDA(6) 1.29 : 1 1.48 : 1
-------------------------------------------------------------------------
1. Includes other revenues derived from franchise fees, royalties and
rebates on some purchases by franchisees and licensees.
2. Does not include services and other revenues (as described in footnote
1 above). Growth in Canada is calculated based on Canadian dollars.
3. For company-operated stores only.
4. Includes volume of franchisees and dealers.
5. This ratio is presented for information purposes only and represents a
measure of financial condition used especially in financial circles.
It represents the following calculation: long-term interest-bearing
debt, net of cash and cash equivalents and temporary investments,
divided by the addition of shareholders' equity and long-term debt,
net of cash and cash equivalents and temporary investments. It does
not have a standardized meaning prescribed by Canadian GAAP and
therefore may not be comparable to similar measures presented by other
public companies.
6. This ratio is presented for information purposes only and represents a
measure of financial condition used especially in financial circles.
It represents the following calculation: long-term interest-bearing
debt, net of cash and cash equivalents and temporary investments,
divided by EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortization). It does not have a standardized meaning prescribed by
Canadian GAAP and therefore may not be comparable to similar measures
presented by other public companies.
Operating Results
Revenues amounted to $3.7 billion for the 12-week period ended April 27,
2008, up $733.2 million, for an increase of 24.7%, of which $475.5 million is
attributable to soaring motor fuel prices, $120.1 million results from major
acquisitions(1) and $89.8 million were generated from the appreciating value
of the Canadian dollar. For the fiscal year, Couche-Tard's growth in revenues
was $3.3 billion or 27.2%, which boosted its revenues to $15.4 billion. The
proportion of its business in the United States is 80.5% compared with 79.7%
for the previous year.
For the fourth quarter of fiscal 2008, growth of same-store merchandise
revenues in the United States stood at 0.1% and 2.2% in Canada. Anemic growth
in the United States is explained by difficult economic conditions, especially
in the southern part of U.S. The situation was magnified by a significant rise
in motor fuel retail price at the pump, leaving that much less margin on
consumers' personal disposable income for in-store purchases. Finally, a
tightened application of immigration laws in Arizona noticeably affected sales
within the business unit whose stores had a strong concentration of Hispanic
consumers. In Canada, Couche-Tard believes the performance to be satisfactory
given the competitive landscape in Central and Eastern Canada, the growing
smuggling on tobacco products and changing weather conditions. To achieve this
level of performance, business units in Canada marketed and featured products
in growing demand, including value brand cigarettes and certain beverages.
Additionally, business units in the United States and Canada both pursued the
implementation of one of Couche-Tard's key success factors: the IMPACT
program.
During fiscal 2008, merchandise and service revenues grew by $583.7
million or 12.6%, of which $268.1 million was generated by major acquisitions
and $168.5 million was generated by the 9.1% appreciation of the Canadian
dollar against its U.S. counterpart. Internal growth, as measured by the
growth of same-store merchandise revenues, was 2.5% in the United States and
4.0% in Canada.
Motor fuel revenues increased by $656.0 million or 34.8% for the 12-week
period ended April 27, 2008, of which $475.5 million stems from a higher
average retail price at the pump in the Company's U.S. and Canadian
company-operated stores, as shown in the following table:
Weighted
Quarter 1st 2nd 3rd 4th average
-------------------------------------------------------------------------
52-week period ended
April 27, 2008
United States (US
dollars per gallon) 2.98 2.73 2.96 3.22 2.97
Canada (Cdn cents
per litre) 98.49 92.35 95.92103.69 97.43
52-week period ended
April 29, 2007
United States (US
dollars per gallon) 2.86 2.61 2.26 2.52 2.52
Canada (Cdn cents
per litre) 96.08 89.87 80.27 90.11 88.42
-------------------------------------------------------------------------
The major acquisitions contributed 30.3 million additional gallons during
the 12-week period ended April 27, 2008, or $96.5 million in revenues. The
appreciation of the Canadian dollar against its U.S. counterpart was also
responsible for $40.9 million of the increase. The same-store motor fuel
volume rose 0.9% in the United States and 5.8% in Canada. The poor performance
in the United States can be explained by the unfavorable economic climate in
the southern part of U.S. and by the drop in demand resulting from the sharp
increase in retail prices at the pump. This was partially offset by pricing
strategies focusing on maintaining customer traffic. Growth in Canada is
primarily due to the strong economy in Western Canada combined with the
popularity and improvement of the CAA program in Quebec and a more focused
pricing strategy in Ontario.
For fiscal 2008, motor fuel revenues rose $2.7 billion, up 36.1%, of which
$1.2 billion stem from higher prices at the pump in company-operated stores in
the United States and Canada. Major acquisitions contributed 412.2 million
additional gallons during 2008, or $1.2 billion in revenues. The appreciation
of the Canadian dollar against its U.S. counterpart was also responsible for
$128.8 million of the increase. The same-store motor fuel volume fell 0.2% in
the United States and rose 6.3% in Canada.
-----------------------
(1) "Major acquisitions" referred to herein encompass the acquisition of
seven stores or more that have not been in operation for a full
12-month period during fiscal 2008.
Merchandise and service gross margin was 33.7% in the fourth quarter of
2008, compared with 33.9% in the fourth quarter of 2007. In the United States,
the gross margin was 33.2%, identical to last year. The Company was successful
in maintaining its gross margin in the U.S. because its business units were
able to transfer to the consumer a fair portion of cost price increases driven
by the marked worldwide price increase in certain commodities and raw
materials. In Canada, the margin fell to 34.7%, resulting mainly from
aggressive promotions in the milk and cigarettes product segments, from a
temporary and unfavourable change in the product mix, as well as from
non-recurring supplier rebates received during the fourth quarter of fiscal
2007.
For fiscal 2008, the merchandise and service gross margin was 33.6%, with
33.0% in the United States, a 0.6% decrease, and 34.9% in Canada, down from
35.1% in 2007. In the United States, the drop is primarily due to aggressive
and targeted promotions during the first three quarters. In addition, some
acquisitions with discount-based strategies have also lowered the gross margin
in the U.S.
Motor fuel gross margin for company-operated stores in the United States
fell 3.10 cents per gallon, from 13.12 cents per gallon last year to 10.02
cents per gallon this quarter. The significant drop in margin results from
marked and successive increases in product costs that the Company's business
units were not able to transfer immediately to the consumers because of very
competitive market conditions. In Canada, the margin rose, reaching Cdn5.25
cents per litre compared with Cdn4.67 cents per litre for the corresponding
quarter in 2007. The key distinction between the Canadian and U.S. markets
lies in the virtually immediate adjustment of retail prices in Canada
following cost price increases. For fiscal year 2008, the motor fuel gross
margin for company-operated stores in the United States reached 13.58 cents
per gallon compared to 14.90 cents per gallon last year. In Canada, the margin
rose, reaching Cdn5.08 cents per litre compared with Cdn4.31 cents per litre
in fiscal 2007.
Couche-Tard takes this opportunity to underscore that, in normal economic
conditions, the sometimes high volatility of motor fuel gross margins from one
quarter to another tends to stabilize on an annual basis. This reality is less
apparent than usual in fiscal year 2008 due to exceptionally low margins
generated during the fourth quarter. The drop in the net margin is even
steeper when factoring in expenses related to electronic payment modes. The
motor fuel gross margin of Couche-Tard's company-operated stores in the United
States as well as the impact of expenses related to electronic payment modes
for the last eight quarters were as follows:
(US cents per gallon)
Weighted
Quarter 1st 2nd 3rd 4th average
-------------------------------------------------------------------------
52-week period ended
April 27, 2008
Before deduction of
expenses related to
electronic payment
modes 16.73 13.04 14.38 10.02 13.58
Expenses related to
electronic payment
modes4.15 3.82 3.98 4.02 3.99
-----------------------------------------------------------------------
After deduction of
expenses related to
electronic payment
modes12.58 9.22 10.40 6.00 9.59
-----------------------------------------------------------------------
52-week period ended
April 29, 2007
Before deduction of
expenses related to
electronic payment
modes 13.60 20.73 13.19 13.12 14.90
Expenses related to
electronic payment
modes3.82 3.77 3.12 3.59 3.52
-----------------------------------------------------------------------
After deduction of
expenses related to
electronic payment
modes9.78 16.96 10.07 9.53 11.38
-----------------------------------------------------------------------
-------------------------------------------------------------------------
Operating, selling, administrative and general expenses rose by 1.9% as a
percentage of merchandise and service revenues on a quarterly basis and they
increased 0.7% over the year. Excluding expenses related to electronic payment
modes, operating, selling, administrative and general expenses increased 1.6%
on a quarterly basis and 0.2% over the year. These increases are mostly driven
by the rise in rental charges, the overall increase in labour costs and
conversion expenses for certain of the Company's motor fuel equipment in order
to comply with ethanol distribution standards. Finally, the rising popularity
of electronic payment modes further contributed to the increase of these
expenses which were already boosted by rising retail prices at the pump and
increased motor fuel volume.
Earnings before interests, taxes, depreciation and amortization
(EBITDA)(1) was $63.7 million in the fourth quarter, down 35.7% compared with
last year, primarily due to weak motor fuel margins and the increase in
certain operating expenditures, i.e. electronic payment modes expenditures.
For the year, EBITDA decreased 1.5% to $484.6 million, of which $32.6 million
stems from major acquisitions.
Depreciation and amortization of property and equipment and other assets
increased primarily due to investments made over the past 12 months through
acquisitions and due to the ongoing implementation of the IMPACT program in
the network.
Financial expenses decreased $5.3 million during the fourth quarter of
2008 compared with the quarter ended April 29, 2007, while they increased $6.6
million in fiscal 2008. The decrease over the quarter is due to a drop in
average borrowings and a lower average interest rate, while during the year,
the increase is due to higher average borrowings partially offset by the drop
in the average interest rate.
During the fourth quarter of 2008, the Company recovered $0.8 million in
income taxes, compared to an income tax expense of $16.8 million last year.
The recovered amount for the quarter results from the adjustment of the
effective income tax rate taking into account the actual results of the fourth
quarter.
In fiscal 2008, the income tax rate is 26.5%, down from the 36.7% posted
last year. This significant decrease is partly due to the reversal in 2008 of
the unusual income tax expense of $9.9 million recorded during the during
fiscal 2007 following the adoption by the Government of Quebec of Bill 15 in
the National Assembly of Quebec. Excluding this aspect, the income tax rate
for 2008 is 30.3% compared with 33.5% last year. This increase is explained by
a change in the breakdown of the earnings before income taxes between various
fiscal jurisdictions.
Net earnings for the fourth quarter of fiscal 2008 is $15.5 million, which
equals $0.08 per share (same on a diluted basis), compared with $33.4 million
last year ($0.16 per share on a diluted basis), a decrease of $17.9 million.
This drop is due to the weak motor fuel gross margin in the United States, to
higher expenses related to electronic payment modes and to the economic slack
of our business units in the southern part of U.S. In addition, major
acquisitions negatively impacted net earnings by $1.0 million, chiefly because
of net motor fuel margins lower than historical averages. These items were
partially offset by the excellent performance of certain of the Company's
business units and by the income tax recovery during the fourth quarter of
2008, which takes into account the adjustment to the income tax expenses based
on the annual effective tax rate.
Couche-Tard closed fiscal 2008 with net earnings of $189.3 million, which
equals $0.94 per share or $0.92 per share on a diluted basis, compared with
$196.4 million last year ($0.94 per share on a diluted basis), a decrease of
$7.1 million or 3.6%.
Liquidity and Capital resources
Couche-Tard's capital expenditures and acquisitions carried out during
fiscal 2008 were mainly financed using its available cash. In the future,
Couche-Tard is confident that it will be able to finance its capital
expenditures and acquisitions through a combination of cash flows from
operating activities, additional debt, monetization of its real estate
portfolio and, as a last resort, by share issuances.
As at April 27, 2008, $500.3 million of the Company's term revolving
unsecured operating credit had been used. The weighted average effective
interest rate was 3.51% for the US dollar portion and 4.21% for the Canadian
dollar portion. The Company also has a $334.7 million subordinated unsecured
debt (nominal value amounting to $350.0, net of attributable financing costs
of $11.5, adjusted for the fair value of the interest rate swaps designated as
a fair value hedge of the debt ) carrying an effective interest rate of 8.23%
(6.61% taking into account the effect of the interest rate swap). In addition,
standby letters of credit in the amount of Cdn$0.7 million and Cdn$17.9
million were outstanding as at April 27, 2008.
------------------------
(1) Earnings before interests, taxes, depreciation and amortization is
not a performance measure defined by Canadian GAAP, but management,
investors and analysts use this measure to evaluate the operating and
financial performance of the Company. Note that Couche-Tard's
definition of this measure may differ from the ones used by other
companies.
Selected Consolidated Cash Flow Information
(In millions
of US dollars) 12-week periods ended 52-week periods ended
---------------------------------------------------------
April April Vari-April April Vari-
27, 29,ation27, 29,ation
2008 2007 $ 2008 2007 $
---------------------------------------------------------
Operating
activities
Cash flows(1) 65.4 55.5 9.9 359.2 328.7 30.5
Other 67.9 117.1 (49.2) 0.6 74.3 (73.7)
---------------------------------------------------------
Net cash
provided by
operating
activities 133.3 172.6 (39.3)359.8 403.0 (43.2)
---------------------------------------------------------
Investing
activities
Purchase of
property and
equipment,
net of
proceeds
from the
disposal of
property and
equipment (96.9) (138.5) 41.6(259.3) (355.6) 96.3
Proceeds from
sale and
leaseback
transactions5.7 10.1 (4.4)172.4 35.5 136.9
Business
acquisitions (0.3)(38.9) 38.6 (70.7) (600.6) (529.9)
Other (0.1) 3.5 (3.6) (2.8) 0.5 (3.3)
---------------------------------------------------------
Net cash used in
investing
activities (91,6) (163.8) 72.2(160.4) (920.2)759.8
---------------------------------------------------------
Financing
activities
Increase
(decrease) in
long-term
debt 84.8 (57.4)142.2 (14.3)345.8(360.1)
Share
repurchase(53.0)- (53.0) (101.3)-(101.3)
Dividends (6.9) (5.2) (1.7)(25.6)(19.5) (6.1)
Issuance of
shares- 0.3 (0.3) 4.7 1.1 3.6
---------------------------------------------------------
Net cash provided
by (used in)
financing
activities 24.9 (62.3) 87.2(136.5)327.4(463.9)
---------------------------------------------------------
---------------------------------------------------------
Company credit
rating
Standard and
Poor's BBBB BBBB
Moody's Ba1 Ba1 Ba1 Ba1
-------------------------------------------------------------------------
1. These cash flows are presented for information purposes only and
represent a performance measure used especially in financial circles.
They represent cash flows from net earnings, plus depreciation and
amortization, loss on disposal of assets and future income taxes. They
do not have a standardized meaning prescribed by Canadian GAAP and
therefore may not be comparable to similar measures presented by other
public companies.
Operating activities
Net cash from operating activities reached $359.8 million during fiscal
2008 and $133.3 million during the fourth quarter, down $43.2 million and
$39.3 million respectively compared to 2007. This decrease is mainly due to
increases in motor fuel inventory costs and increased credit and debit cards
receivables driven by higher motor fuel prices and growing usage of these
modes of payment.
Investing activities
Capital expenditures are primarily related to the ongoing implementation
of Couche-tard's IMPACT program throughout its network, to new constructions
as well as the replacement of equipment in some of its stores to enhance the
offering of products and services as well as the addition of new stores.
During fiscal 2008, Couche-Tard also invested $70.7 million to acquire 44
company-operated stores. Finally, sale and leaseback transactions generated
$172.4 million, namely the transaction involving 83 sites sold to Cole Credit
Property Trust II, Inc. for a total sale price of $131.4 million.
Financing activities
During fiscal 2008, Couche-Tard proceeded with the repurchase of 2,116,600
Class A multiple voting shares at an average cost of Cdn$15.05 and 4,045,606
Class B subordinate voting shares at an average cost of Cdn$17.23, for a total
of $101.3 million. During the fourth quarter of 2008, Couche-Tard repurchased
2,062,200 Class A multiple voting shares at an average cost of Cdn$14.98 and
1,393,206 Class B subordinate voting shares at an average cost of Cdn$15.99,
for a total of $53.0 million.
Financial Position
As demonstrated by the indebtedness ratios included in the "Selected
Consolidated Financial Information" section and by the cash flows, Couche-Tard
has an excellent financial position.
Total consolidated assets of $3.3 billion as at April 27, 2008 increased
by $277.4 million compared with the previous year. The growth is primarily a
result of the increase of:
- $76.7 million in property and equipment, largely due to capital
investments during the year, partially offset by disposals related to
sale and leaseback transactions;
- $74.3 million from cash and cash equivalents;
- $62.4 million in inventory, largely due to a jump in cost price of
motor fuel; and
- $52.7 million in accounts receivable chiefly explained by an increase
in credit and debit cards receivable.
Summary of Quarterly Results
-------------------------------------------------------------------------
(In millions of
US dollars
except for per
share data, 52-week period
unaudited)ended April 27, 2008
-------------------------------------------------------------------------
Quarter4th 3rd 2nd 1st
Weeks 12 weeks 16 weeks 12 weeks 12 weeks
----------------------------------------
Revenues 3,705.8 4,590.9 3,499.8 3,573.5
----------------------------------------
Earnings before depreciation
and amortization of property
and equipment and other assets,
financial expenses and
income taxes 63.7 130.6 135.2 155.1
Depreciation and amortization
of property and equipment
and other assets 39.9 53.8 41.1 37.7
----------------------------------------
Operating income 23.8 76.8 94.1 117.4
----------------------------------------
Financial expenses 9.1 16.7 13.8 15.0
----------------------------------------
Net earnings 15.5 50.5 54.2 69.1
----------------------------------------
----------------------------------------
Net earnings per share
Basic $0.08 $0.25 $0.27 $0.34
Diluted$0.08 $0.24 $0.26 $0.33
-------------------------------------------------------------------------
(In millions of
US dollars
except for per
share data, 52-week period
unaudited)ended April 29, 2007
-------------------------------------------------------------------------
Quarter4th 3rd 2nd 1st
Weeks 12 weeks 16 weeks 12 weeks 12 weeks
----------------------------------------
Revenues 2,972.6 3,498.0 2,759.7 2,857.1
----------------------------------------
Earnings before depreciation
and amortization of property
and equipment and other assets,
financial expenses and
income taxes 99.0 125.0 149.2 118.9
Depreciation and amortization
of property and equipment
and other assets 34.4 43.3 28.3 27.8
----------------------------------------
Operating income 64.6 81.7 120.9 91.1
----------------------------------------
Financial expenses14.4 16.6 8.5 8.5
----------------------------------------
Net earnings 33.4 43.7 74.7 44.6
----------------------------------------
----------------------------------------
Net earnings per share
Basic $0.17 $0.22 $0.37 $0.22
Diluted$0.16 $0.21 $0.36 $0.21
-------------------------------------------------------------------------
Outlook
During fiscal 2009, Couche-Tard will pursue its investments in order to
deploy the IMPACT program in approximately 350 stores and acquire
approximately between 200 and 300 stores. The Company's capital budget for the
fiscal year 2009 is approximately $275.0 million, which Couche-Tard plans to
finance with its net cash provided by operating activities.
"Given the challenging conditions affecting our industry, we intend to
leverage our strengths, namely our expertise and our solid financial position,
in order to consolidate and even reinforce our position as leader, in addition
to expanding our network by acquiring stores that will suitably improve our
results," concluded Mr. Bouchard.
Profile
Alimentation Couche-Tard Inc. is the leader in the Canadian convenience
store industry. In North America, Couche-Tard is the second largest
independent convenience store operator (whether integrated with a petroleum
company or not) in terms of number of stores. Couche-Tard currently operates a
network of 5,119 convenience stores, 3,273 of which include motor fuel
dispensing, located in eleven large geographic markets, including eight in the
United States covering 29 states and three in Canada covering six provinces.
More than 45,000 people are employed throughout Couche-Tard's retail
convenience network and service centers.
The statements set forth in this press release, which describes
Couche-Tard's objectives, projections, estimates, expectations or forecasts,
may constitute forward-looking statements within the meaning of securities
legislation. Positive or negative verbs such as "plan", "evaluate",
"estimate", "believe" and other related expressions are used to identify such
statements. Couche-Tard would like to point out that, by their very nature,
forward-looking statements involve risks and uncertainties such that its
results, or the measures it adopts, could differ materially from those
indicated or underlying these statements, or could have an impact on the
degree of realization of a particular projection. Major factors that may lead
to a material difference between Couche-Tard's actual results and the
projections or expectations set forth in the forward-looking statements
include the effects of the integration of acquired businesses and the ability
to achieve projected synergies, fluctuations in margins on motor fuel sales,
competition in the convenience store and retail motor fuel industries,
exchange rate variations, and such other risks as described in detail from
time to time in the reports filed by Couche-Tard with securities authorities
in Canada and the United States. Unless otherwise required by applicable
securities laws, Couche-Tard disclaims any intention or obligation to update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. The forward-looking information in
this release is based on information available as of the date of the release.
Conference Call July 15, 2008 at 2:30 P.M. (Montreal Time)
-------------------------------------------------------------------------
Financial analysts and investors who wish to participate in the conference
call on Couche-Tard's results can dial 1-800-733-7560 a few minutes before the
start of the call. For those unable to participate, a taped re-broadcast will
be available July 15, 2008 from 4:30 p.m. until July 22, 2008 at 11:59 p.m.,
by dialing 1-877-289-8525 - access code 21275842 followed by the # key. Also,
a webcast of the conference call will be available on the website of the
Company for a period of 90 days after the conference call. Members of the
media and other interested parties are invited to listen in.
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions of US dollars, except per share amounts, unaudited)
12 weeks52 weeks
For the periods endedApril April April April
27, 29, 27, 29,
2008 2007 2008 2007
-------------------------------------------------------------------------
$ $ $ $
Revenues 3,705.8 2,972.6 15,370.0 12,087.4
Cost of sales 3,226.9 2,506.6 13,146.5 10,082.9
-------------------------------------------------------------------------
Gross profit 478.9 466.0 2,223.5 2,004.5
- - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - -
Operating, selling,
administrative and
general expenses415.2 367.0 1,738.9 1,512.4
Depreciation and amortization
of property and equipment
and other assets 39.9 34.4 172.5 133.8
-------------------------------------------------------------------------
455.1 401.4 1,911.4 1,646.2
-------------------------------------------------------------------------
Operating income 23.8 64.6 312.1 358.3
Financial expenses 9.1 14.4 54.6 48.0
-------------------------------------------------------------------------
Earnings before income taxes 14.7 50.2 257.5 310.3
Income taxes (Note 10)(0.8) 16.8 68.2 113.9
-------------------------------------------------------------------------
Net earnings 15.5 33.4 189.3 196.4
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings per share (Note 4)
Basic 0.08 0.17 0.94 0.97
Diluted 0.08 0.16 0.92 0.94
Weighted average number of
shares (in thousands) 198,549 202,180 201,486 202,119
Weighted average number of
shares - diluted (in thousands) 202,981 208,230 206,478 208,206
Number of shares outstanding at
end of period (in thousands) 196,727 202,335 196,727 202,335
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (NOTE 2)
(in millions of US dollars, unaudited)
12 weeks52 weeks
For periods endedApril April April April
27, 29, 27, 29,
2008 2007 2008 2007
-------------------------------------------------------------------------
$ $ $ $
Net earnings 15.5 33.4 189.3 196.4
Other comprehensive income
Changes in cumulative translation
adjustments (19.5) 18.9 16.1 (2.8)
-------------------------------------------------------------------------
Other comprehensive income (19.5) 18.9 16.1 (2.8)
-------------------------------------------------------------------------
Comprehensive income (4.0) 52.3 205.4 193.6
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CAPITAL STOCK
(in millions of US dollars, unaudited)
For the 52-week periods endedApril April
27, 29,
2008 2007
-------------------------------------------------------------------------
$ $
Balance, beginning of period 352.3 351.0
Stock options exercised for cash 4.7 1.1
Fair value of stock options exercised 1.8 0.2
Carrying value of Class A multiple voting shares
and Class B subordinate voting shares repurchased
and cancelled (10.0)-
-------------------------------------------------------------------------
Balance, end of period 348.8 352.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CONTRIBUTED SURPLUS
(in millions of US dollars, unaudited)
For the 52-week periods endedApril April
27, 29,
2008 2007
-------------------------------------------------------------------------
$ $
Balance, beginning of period 13.4 9.4
Stock-based compensation expense (Note 6) 4.0 4.2
Fair value of stock options exercised (1.8) (0.2)
-------------------------------------------------------------------------
Balance, end of period15.6 13.4
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(in millions of US dollars, unaudited)
For the 52-week periods endedApril April
27, 29,
2008 2007
-------------------------------------------------------------------------
$ $
Balance, beginning of period 681.9 505.0
Impact of changes in accounting policies (Note 2) 0.9 -
-------------------------------------------------------------------------
Balance, beginning of period, as restated682.8 505.0
Net earnings 189.3 196.4
-------------------------------------------------------------------------
872.1 701.4
Dividends(25.6)(19.5)
Excess of purchase price over carrying value
of Class A multiple voting shares and Class B
subordinate voting shares repurchased and cancelled (71.5)-
-------------------------------------------------------------------------
Balance, end of period 775.0 681.9
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF ACCUMULATED OTHER
COMPREHENSIVE INCOME (NOTE 2)
(in millions of US dollars, unaudited)
For the 52-week periods endedApril April
27, 29,
2008 2007
-------------------------------------------------------------------------
$ $
Balance, beginning of period 97.8 100.6
Impact of changes in accounting policies (Note 2) 0.4 -
-------------------------------------------------------------------------
Balance, beginning of period, as restated 98.2 100.6
Other comprehensive income16.1 (2.8)
-------------------------------------------------------------------------
Balance, end of period 114.3 97.8
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of US dollars, unaudited)
12 weeks52 weeks
For periods endedApril April April April
27, 29, 27, 29,
2008 2007 2008 2007
-------------------------------------------------------------------------
$ $ $ $
Operating activities
Net earnings 15.5 33.4 189.3 196.4
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization
of property and equipment
and other assets, net of
amortization of deferred credits 35.1 27.0 151.8 114.4
Future income taxes 12.7 (2.0) 19.0 21.7
Loss (gain) on disposal of
property and equipment and
other assets 2.1 (2.9) (0.9) (3.8)
Deferred credits 1.6 3.1 13.3 30.5
Other4.4 5.4 24.2 13.1
Changes in non-cash working
capital61.9 108.6 (36.9) 30.7
-------------------------------------------------------------------------
Net cash provided by operating
activities 133.3 172.6 359.8 403.0
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Investing activities
Purchase of property and equipment (103.6) (142.7) (280.3) (373.4)
Proceeds from sale and leaseback
transactions 5.7 10.1 172.4 35.5
Business acquisitions (Note 3)(0.3)(38.9)(70.7) (600.6)
Proceeds from disposal of property
and equipment and other assets6.7 4.2 21.0 17.8
(Increase) decrease in other assets (0.4) 1.1 (3.3)(15.6)
Deposit reimbursement on business
acquisition 0.3 2.4 0.5 -
Temporary investments- - - 21.1
Liabilities related to business
acquisitions- - - (5.0)
-------------------------------------------------------------------------
Net cash used in investing
activities (91.6) (163.8) (160.4) (920.2)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Financing activities
Repurchase of Class A multiple
voting shares and Class B
subordinate voting shares (53.0)-(101.3)-
Dividends paid(6.9) (5.2)(25.6)(19.5)
Increase (decrease) in
long-term debt 84.8 - (14.3)513.0
Issuance of shares - 0.3 4.7 1.1
Repayment of long-term debt - (57.4)-(167.2)
-------------------------------------------------------------------------
Net cash provided (used in) by
financing activities 24.9 (62.3) (136.5)327.4
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Effect of exchange rate fluctuations
on cash and cash equivalents 0.3 4.1 11.4 -
-------------------------------------------------------------------------
Net increase (decrease) in cash
and cash equivalents 66.9 (49.4) 74.3(189.8)
Cash and cash equivalents,
beginning of period 149.1 191.1 141.7 331.5
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period 216.0 141.7 216.0 141.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Supplemental information:
Interest paid4.6 7.9 59.5 50.6
Income taxes paid 38.6 18.7 89.0 57.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED BALANCE SHEETS
(in millions of US dollars)
As at As at
April April
27, 29,
2008 2007
(unaudited) (1)
-------------------------------------------------------------------------
$ $
Assets
Current assets
Cash and cash equivalents 216.0 141.7
Accounts receivable251.7 199.0
Inventories444.5 382.1
Prepaid expenses 8.3 13.5
Future income taxes 24.7 22.7
-------------------------------------------------------------------------
945.2 759.0
Property and equipment 1,748.3 1,671.6
Goodwill 402.6 373.8
Trademarks and licenses 170.3 168.7
Deferred charges 13.8 25.8
Other assets 39.5 43.4
Future income taxes0.9 0.9
-------------------------------------------------------------------------
3,320.6 3,043.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 842.7 740.3
Income taxes payable18.6 46.6
Current portion of long-term debt1.2 0.5
Future income taxes- 0.1
-------------------------------------------------------------------------
862.5 787.5
Long-term debt 841.0 869.5
Deferred credits and other liabilities 253.8 161.9
Future income taxes 109.6 78.9
-------------------------------------------------------------------------
2,066.9 1,897.8
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Shareholders' equity
Capital stock348.8 352.3
Contributed surplus 15.6 13.4
Retained earnings (Note 2) 775.0 681.9
Accumulated other comprehensive income (Note 2) 114.3 97.8
-------------------------------------------------------------------------
1,253.7 1,145.4
-------------------------------------------------------------------------
3,320.6 3,043.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) The balance sheet as of April 29, 2007 has been derived from the
audited consolidated financial statements at that date but does not
include all of the information and footnotes required by Canadian
Generally Accepted Accounting Principles for complete financial
statements.
The accompanying notes are an integral part of the consolidated financial
statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions of US dollars, except per share and stock option data,
unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS PRESENTATION
The unaudited interim consolidated financial statements have been prepared
by the Company in accordance with Canadian generally accepted accounting
principles and have not been subject to a review engagement by the Company's
external auditors. These consolidated financial statements were prepared in
accordance with the same accounting policies and methods as the audited annual
consolidated financial statements for the year ended April 29, 2007, with the
exception of the accounting changes described in Note 2 below. The unaudited
interim consolidated financial statements do not include all the information
for complete financial statements and should be read in conjunction with the
audited annual consolidated financial statements and notes thereto in the
Company's 2007 Annual Report (the 2007 Annual Report). The results of
operations for the interim periods presented do not necessarily reflect
results expected for the full year.
The Company's business follows a seasonal pattern. The busiest period is
the first half-year of each fiscal year, which includes summer's sales.
2. ACCOUNTING CHANGES
Capital disclosures and financial instruments disclosures and
presentation
On February 5, 2008 the Company adopted early Canadian Institute of
Chartered Accountants (CICA) Handbook Section 3862 "Financial Instruments -
Disclosures", Section 3863 "Financial Instruments - Presentation" and Section
1535 "Capital Disclosures".
Section 3862 describes the required disclosures related to the
significance of financial instruments on the entity's financial position and
performance and the nature and extent of risks arising from financial
instruments to which the entity is exposed and how the entity manages those
risks. This Section complements principles of recognition, measurement and
presentation of financial instruments of Section 3855 "Financial Instruments -
Recognition and Measurement", 3863 "Financial Instruments - Presentation" and
3865 "Hedges".
Section 3863 establishes standards for presentation of financial
instruments and non-financial derivatives. It replaces the standards included
in Section 3861 "Financial Instruments - Disclosure and Presentation".
Section 1535 establishes standards for disclosing information about an
entity's capital and how it is managed to enable users of financial statements
to evaluate the entity's objectives, policies and procedures for managing
capital.
The results of the implementation of these new standards are included in
Note 8 and had no impact on the Company's financial results.
Financial Instruments - Recognition and Measurement
On April 30, 2007, the Company adopted CICA Handbook Section 3855
"Financial Instruments - Recognition and Measurement", which establishes
standards for recognition and measurement of financial assets, financial
liabilities and non-financial derivatives. This new standard was implemented
retroactively without restatement of prior periods financial statements. For
embedded derivatives instruments, the Company elected April 29, 2002 as its
transition date.
The Company made the following classifications:
Classification
Financial assetsClassification Subsequent of gains and
and liabilitiesmeasurement(1)losses
Cash and cash Held-for-trading Fair valueNet earnings
equivalents
AccountsLoans and Amortized costNet earnings
receivable receivables
Investments in Available- Fair valueOther
publicly-traded for-sale comprehensive
securities income
Bank indebtedness Other financialAmortized costNet earnings
and long-term liabilities
debt
Accounts payableOther financialAmortized costNet earnings
and accrued liabilities
expenses
(1) Initial measurement of all financial assets and liabilities is at
fair value.
As at April 30, 2007, the impact of the implementation of the
classifications described above is a $0.5 increase in Other assets, a $0.1
increase in the long-term Future income tax liability and a $0.4 increase in
Accumulated Other comprehensive income. These adjustments relate to an
investment in publicly-traded securities held by the Company, included in
Other assets. The value of this investment is not significant.
Section 3855 also requires that transaction costs be i) recognized in
income when incurred or ii) added to or deducted from the amount of the
financial asset or liability to which they are directly attributable when the
asset or liability is not classified as held-for-trading. The Company has
deferred financing costs attributable to its Subordinated unsecured debt which
were previously deferred and amortized over the term of the debt.
Consequently, the Company elected to apply the accounting policy that consists
of deducting financing costs from the amount of the financial liability to
which they are directly attributable. As of April 30, 2007, this change
resulted in a decrease of $11.6 in Deferred charges, of $13.1 in Long-term
debt, in an increase of $0.6 in the long-term Future income tax liability and
of $0.9 in Retained earnings.
Hedges
Effective April 30, 2007, the Company adopted CICA Handbook Section 3865
"Hedges", which establishes circumstances under which hedge accounting may be
applied. The purpose of hedge accounting is to ensure that gains, losses,
revenues and expenses related to a hedging item and to the hedged item are
recognized in net earnings in the same period.
As described in Notes 4 and 23 of the consolidated financial statements
included in the 2007 Annual Report, the Company uses interest rate swaps as
part of its program for managing the interest rate of its Subordinated
unsecured debt. These interest rate swaps have been designated and documented
as an effective fair value hedge of the Subordinated unsecured debt. Under the
new standard, changes in the fair value of the swaps and the debt are
recognized in net earnings, counterbalancing each other, except for any
ineffective portion of the hedging relationship. On the balance sheet, the
fair value of the interest swaps is recorded in Other assets if it is
favourable for the Company or in Deferred credits and other liabilities if it
is unfavourable for the Company.
As at April 30, 2007, these changes resulted in an increase of $14.9 in
Deferred credits and other liabilities and in a decrease of $14.9 in Long-term
debt.
The Company also designates its entire US dollars denominated long-term
debt as a foreign exchange hedge of its net investment in its U.S.
self-sustaining operations. Accordingly, corresponding foreign exchange gains
and losses are recorded in Accumulated other comprehensive income in the
Shareholders' equity to offset the foreign currency translation adjustments on
the investments.
Comprehensive Income
On April 30, 2007, the Company adopted CICA Handbook Section 1530
"Comprehensive Income". This Section introduces a new financial statement
which presents the change in equity of an enterprise from transactions and
other events and circumstances from non-owner sources. These transactions
include net changes in unrealized gains and losses on translating Canadian and
corporate operations into the reporting currency as well as unrealized gains
and losses related to changes in the fair value of certain financial
instruments that are not recorded in net earnings. These two types of
transactions are recorded in Other comprehensive income.
The result of the implementation of this new standard is that, beginning
in the first quarter of fiscal 2008, the Company includes, in its consolidated
financial statements, a consolidated statement of comprehensive income while
the cumulative net changes in other comprehensive income are included in
Accumulated other comprehensive income, which is presented as a new category
of Shareholders' equity and a new statement. Consequently, an amount of $97.8
presented in cumulative translation adjustments as at April 29, 2007 has been
reclassified to Accumulated other comprehensive income.
Equity
Effective April 30, 2007, the Company adopted CICA Handbook Section 3251
"Equity", which replaces Section 3250 "Surplus". This new section establishes
standards for the presentation of equity and changes in equity during the
reporting period and requires the Company to present separately equity
components and changes in equity arising from i) net earnings; ii) other
comprehensive income; iii) other changes in retained earnings; iv) changes in
contributed surplus; v) changes in share capital; and vi) changes in reserves.
3. BUSINESS ACQUISITIONS
Effective June 5, 2007, the Company purchased 28 company-operated stores
and five land parcels from Sterling Stores LLC. The acquired stores operate
under the Sterling banner in northwest Ohio, United States.
In addition, during the 52-week period ended April 27, 2008, the Company
purchased 18 stores through 15 distinct transactions.
These acquisitions were settled for a total cash consideration of $70.7,
including direct acquisition costs. The preliminary allocations of the
purchase price of the acquisitions were established based on available
information and on the basis of preliminary evaluations and assumptions
management believes to be reasonable. Since the Company has not completed its
fair value assessment of the net assets acquired for all transactions, the
preliminary allocations are subject to adjustments to the fair value of the
assets and liabilities until the process is completed. The preliminary
allocations are based on the estimated fair values on the dates of
acquisition:
$
Tangible assets acquired
Inventories 3.8
Property and equipment 59.6
-------------------------------------------------------------------------
Total tangible assets 63.4
-------------------------------------------------------------------------
Liabilities assumed
Accounts payable and accrued liabilities 0.3
Deferred credits and other liabilities 0.6
-------------------------------------------------------------------------
Total liabilities 0.9
-------------------------------------------------------------------------
Net tangible assets acquired 62.5
-------------------------------------------------------------------------
Non-compete agreements 1.1
Goodwill 7.1
-------------------------------------------------------------------------
Total consideration paid, including direct
acquisition costs70.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The Company expects that approximately $5.7 of the goodwill related to
these transactions will be deductible for tax purposes.
4. NET EARNINGS PER SHARE
12-week period12-week period
ended April 27, 2008 ended April 29, 2007
-------------------------------------------------------------
Weighted Weighted
average average
numbernumber
of Net of Net
shares earnings shares earnings
Net (in thou- per Net (in thou- per
earnings sands)share earnings sands)share
$ $ $ $
-------------------------------------------------------------
Basic net
earnings
attributable
to Class A
and B
shareholders 15.5 198,549 0.08 33.4 202,180 0.17
Dilutive effect
of stock
options 4,432 - 6,050 (0.01)
-------------------------------------------------------------
Diluted net
earnings
available for
Class A and B
shareholders 15.5 202,981 0.08 33.4 208,230 0.16
-------------------------------------------------------------
-------------------------------------------------------------
52-week period52-week period
ended April 27, 2008 ended April 29, 2007
-------------------------------------------------------------
Weighted Weighted
average average
numbernumber
of Net of Net
shares earnings shares earnings
Net (in thou- per Net (in thou- per
earnings sands)share earnings sands)share
-------------------------------------------------------------
$ $ $ $
Basic net
earnings
attributable
to Class A
and B
shareholders189.3 201,486 0.94 196.4 202,119 0.97
Dilutive effect
of stock
options 4,992 (0.02) 6,087 (0.03)
-------------------------------------------------------------
Diluted net
earnings
available
for Class A
and B
shareholders189.3 206,478 0.92 196.4 208,206 0.94
-------------------------------------------------------------
-------------------------------------------------------------
A total of 1,512,515 stock optio
