News Releases - 2002


Home > Investors > News Releases > 2002 > Liquidation World Announces Third Quarter Results

Calgary, August 20, 2002

Liquidation World Inc. (LQW – TSX; LIQWF – Nasdaq) announces results for the third quarter, the thirteen weeks ended July 7, 2002. Revenue increased 1% to $42,749,000 from $42,334,000 during the corresponding period in 2001. Net earnings decreased 143% to a loss of $501,000 or ($0.06) per share during the third quarter of fiscal 2002 from $1,174,000 or $0.14 per share during the corresponding period in fiscal 2001.

On a cumulative basis, revenue for the first three quarters of 2002 totaled $134.0 million, a 2% decrease from $136.2 million during the 39 weeks ended July 1, 2001. Net earnings decreased 64% to $1,820,000 ($0.21 per share) during the three quarters of fiscal 2002 from $4,992,000 ($0.59 per share) during the corresponding period of fiscal 2001. Additional details are provided in the financial statements below.

“Start-up expenses at our new subsidiary, Clear Thinking Group, and a $699,000 foreign exchange loss stemming from the surprising strength of the Canadian dollar at quarter end eliminated profitable results from our retailing operations” said Company founder and C.E.O., Dale Gillespie. “We believe the moves we are making today in building a full suite of related services will benefit the Company and its shareholders in the long term. The Company continues to enjoy a very strong financial position with over $3 million in the bank.”

Liquidation World announced on March 18, 2002 that it had acquired Clear Thinking Group, Inc. (a retail, consumer products, and manufacturing turnaround consultancy) and that the start up losses were anticipated to reduce Liquidation World profit by $1.4 million over the balance of the fiscal year.

Liquidation World will open a new outlet in High River, Alberta on September 5, 2002, bringing to 97 the total number of outlets. This outlet extends Liquidation World’s market penetration and takes advantage of existing marketing and logistical infrastructure.

Download Third Quarter Results
lw_q3_2002.pdf (60k)

About Liquidation World

Liquidation World offers a uniquely diversified menu of solutions for organizations with asset recovery issues. Services include auctions, reverse logistics and processing, store closure sales management, turnaround consulting, and retail liquidations of consumer merchandise through 96 outlets across North America. Liquidation World solves asset recovery problems, in a professional manner, for the financial services industry, insurance companies, manufacturers and other organizations. Liquidation World opened its first retail outlet in 1986 and is now the largest liquidator in Canada, with more than 1,600 employees in outlets and offices across Canada and the United States.

For more information, please contact:
Dale Gillespie, C.E.O.
Andrew Searby, CA, Executive V.P. and Chief Financial Officer
E-mail: investorinfo@liquidationworld.com
Website: www.liquidationworld.com
Telephone: (403) 250-1222
Fax: (403) 291-1306

LIQUIDATION WORLD INC.
Consolidated Statements of Earnings and Retained Earnings
(unaudited) (In thousands of Canadian dollars, except per share amounts)
13 Weeks
Ended
39 Weeks
Ended
July 7
2002
July
2001
July 7
2002
July 1
2001
Revenue $ 42,749 $ 42,334 $ 134,016 $ 136,232
Cost of sales 26,602 26,269 82,916 83,538
16,147 16,065 51,100 52,694
Expenses
Selling and store operations 14,113 12,293 41,112 38,553
General and administrative 2,322 1,380 5,598 4,217
Depreciation and amortization 385 344 1,079 1,031
Interest - 28 7 70
16,820 14,045 47,796 43,871
Earnings (loss) before income taxes (673) 2,020 3,304 8,823
Income taxes (172) 846 1,484 3,831
Net earnings (loss) (501) 1,174 1,820 4,992
Retained earnings, beginning of period 39,211 33,727 36,890 29,909
Excess of repurchase amount over stated (47) - (47) -
capital of repurchased shares
Retained earnings, end of period $ 38,663 $ 34,901 $ 38,663 $ 34,901
Earnings (loss) per share
Basic $ (0.06) $ 0.14 $ 0.21 $ 0.59
Diluted $ (0.06) $ 0.12 $ 0.21 $ 0.57
Shares outstanding at period end 8,567,856 8,485,896
Options outstanding at period end 640,830 567,590
Segmented Information
(unaudited) (In thousands of Canadian dollars, except per share amounts)
2002 2001 2002 2001
Revenue
Canada $ 33,978 $ 33,506 $ 105,819 $ 104,086
United States 8,771 8,828 28,197 32,146
Total $ 42,749 $ 42,334 $ 134,016 $ 136,232
Capital assets
Canada $ 4,122 $ 3,934
United States 593 602
Total $ 4,715 $ 4,536

LIQUIDATION WORLD INC.
Consolidated Statements of Cash Flows
(unaudited) (In thousands of Canadian dollars)
13 Weeks
Ended
39 Weeks
Ended
July 7
2002
July 1
2001
July 7
2002
July 1
2001
Cash provided by (used in):
Operations
Net earnings (loss) $ (501) $ 1,174 $ 1,820 $ 4,992
Add (deduct) non-cash items:
Depreciation and amortization 385 344 1,079 1,031
Equity in income of affiliate (60) (28) (108) (76)
(176) 1,490 2,791 5,947
Changes in non-cash operating working capital
Accounts receivable 482 1,173 (940) (473)
Inventory (1,007) (2,704) 2,100 (5,230)
Prepaid expenses (440) (953) (873) 204
Accounts payable and accrued liabilities 62 (2,405) 4,108 (1,124)
Income taxes (1,447) (330) (3,304) 480
(2,526) (3,729) 3,882 (196)
Investments
Purchase of capital assets (318) (643) (1,170) (1,189)
Business Acquisition - - (104) -
(318) (643) (1,274) (1,189)
Financing
Increase in bank indebtedness - 4,337 - 820
Proceeds on issuance of common shares - 35 405 562
Repurchase of common shares (66) - (66) -
(66) 4,372 339 1,382
Increase (decrease) in cash (2,910) - 2,947 (3)
Cash and equivalents, beginning of period 6,359 174 502 177
Cash and equivalents, end of period $ 3,449 $ 174 $ 3,449 $ 174
Supplemental disclosure of cash paid for:
Income taxes $ 1,287 $ 1,152 $ 4,768 $ 3,434
Interest - 13 8 84
$ 1,287 $ 1,165 $ 4,776 $ 3,518

LIQUIDATION WORLD INC.
Consolidated Balance Sheets
(In thousands of Canadian dollars)
July 7
October 7
2002
2001
(unaudited)
Assets
Current assets
Cash and equivalents $ 3,449 $ 502
Accounts receivable 2,165 1,225
Income taxes receivable 2,395 -
Inventory 47,678 49,778
Prepaid expenses 2,247 1,374
57,934 52,879
Capital assets 4,715 4,624
Investment in affiliate 590 482
Goodwill 278 -
$ 63,517 $ 57,985
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 8,829 $ 4,721
Income taxes payable - 909
8,829 5,630
Shareholders' equity
Share capital 16,025 15,465
Retained earnings 38,663 36,890
54,688 52,355
$ 63,517 $ 57,985
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