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Home > Investors > News Releases > 2004 >Liquidation World Announces First Quarter Results
Calgary, February 18, 2004
Liquidation World Inc. (LQW – TSX) today reported its results for the 13 weeks ended January 4, 2004. Revenues increased 4.5% to $51,313,000 compared to $49,102,000 during the 13 weeks ended January 5, 2003. Net earnings increased 113% to $1,887,000 ($0.22 per share) during the first quarter of fiscal 2004 compared to $885,000 ($0.10 per share) during the first quarter of fiscal 2003. During the quarter, cash flow from operations after changes in working capital decreased 68% to $2,331,000 from $7,077,000 during the corresponding period in fiscal 2003. Additional details are provided in the financial statements.
Executive Vice President and CFO, Andrew Searby, said, “Stronger sales resulting from a good inventory selection, coupled with a continued focus on cost controls, helped make the quarter our second most profitable ever. While the weakening U.S. dollar somewhat muted revenues from our U.S. operations, the company has generally benefited from the increased buying power now associated with the stronger Canadian currency, and this has opened greater supply opportunities to us on a global basis.”
“Our decrease in cash flow from operations is largely due to an increase in inventory, including a sizeable purchase that arrived late in the first quarter. In addition, our accounts payable balance at the end of the first quarter is at a five year low.”
Speaking on behalf of the Office of the C.E.O., Senior Executive Vice President and Co-C.E.O., Darren Gillespie, said, “These numbers reaffirm our conviction in the core value of our business. During our first two quarters in office, the organization has focused on revenue growth and operational excellence. In essence, it is a ‘Brilliance in the Basics’ approach. When everyone pays attention to the fundamentals of buying and selling, you set yourself up for success.”
“We see that in our first quarter results. With revenue of $51.3 million, we’ve booked our best quarter of sales ever – not by a long shot, but certainly a step in the right direction. Equally important, these increased sales were largely due to simply moving more inventory through an increasingly efficient system.”
“Now, with the entire team rededicated to the basics, we are poised to make the most of some strong inventory, including premium-grade cookware recently sourced from an insurance claim in Houston, Texas. Deals like this can often have people lining up at the door. Moving forward, the key is to continue sourcing attractive merchandise and aggressively market it.”
“At the same time, the Office of the C.E.O. is placing a greater emphasis on forecasting and monitoring key performance indicators throughout every department, including the better allocation of a growing range of inventory among our Outlets.”
“Also encouraging is the recent and planned openings of five new Outlets. Two, now open, are located in Fort Saskatchewan and Taber, Alberta. A third Alberta Outlet is scheduled to open in Leduc in March. Our Trenton, Ontario Outlet re-opened in a new location in early February, and a new Outlet is slated to open in Hawkesbury, Ontario, adjacent to the Quebec border, in the third quarter.”
“At the same time, we continue to monitor the profitability of all our Outlets, and will improve or close those that are not contributing materially to our bottom line. As previously announced, in December, we closed two Outlets where a reasonable expectation of profit wasn’t likely to be met. The first was our Nampa, Idaho location, and the second was in Stratford, Ontario. A third Outlet, in Brockville, Ontario, was closed during this second quarter. ”
“We continue to believe that liquidators occupy a niche that separates them from traditional retailers, discounters, warehouse and wholesale clubs. Moreover, liquidators play a fundamental role in addressing the ever-present imperfections in the manufacturer-retail relationship. Not losing sight of our purpose will help us solidify our position in this truly distinctive niche.”
About Liquidation World
Liquidation World Inc. offers a uniquely diversified menu of solutions for organizations with asset recovery issues. Services include auctions, reverse logistics and processing, store closure sales management, consulting, and retail liquidations of consumer merchandise through 98 outlets across Canada and the United States.
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.
This release includes forward-looking statements and potential future circumstances and developments. Forward-looking statements regarding future performance are subject to risks and uncertainties and actual results may differ materially.
For more information, please contact:
Mr. Darren Gillespie, Senior Executive Vice President & Co-C.E.O.
E-mail: darreng@liquidationworld.com
Website: www.liquidationworld.com
Telephone (604) 589-7111, ext. 223
Fax: (604) 583-2255
Mr. Andrew Searby, C.A. Executive Vice President and CFO
E-mail: investorinfo@liquidationworld.com
Website: www.liquidationworld.com
Telephone (403) 250-1222
Fax: (403) 291-1306