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News Releases - 2006
Home > Investors > News Releases > 2006 > Liquidation World Announces 107% Increase in Q1 Earnings
Results reflect progress in ongoing strategic initiatives
Calgary, February 1, 2006
Liquidation World Inc. (LQW – TSX) today announces the results of operations for the thirteen weeks ended January 1, 2006. Revenue increased by 10.6% to $57,146,000 from 51,685,000 while earnings increased 107% to $1,946,000 ($0.23 per share) from $939,000 ($0.11 per share).
“These results reflect our efforts to improve our business in general through a deliberate focus on sourcing and managing merchandise and improving our execution at store level”, said Jonathan Hill, President & CEO. “While we continue to fully implement a number of our strategic initiatives, our customers have indicated their approval through a same store sales increase of 9.9% (10.3% before currency fluctuation) during the quarter. We have two new purchasing teams both of which were effective during the quarter. The more predictable supply of surplus merchandise from manufacturers and others was better planned and managed by this purchasing team. As well, our business development team was effective in sourcing a number of opportunistic inventories. Our purchasing was also better coordinated with promotional activities resulting in an increase in customers with less overall marketing spend. Our increased focus on expense control including the implementation of our Win-Win incentive plan began to be reflected during the quarter.
“Our execution and results in the stores continued to improve in general though results were strongest in our more mature markets in Western Canada. Our US business, which plays an important role in supporting our sourcing and logistics in that market also improved significantly on a year over year basis. While the Christmas season was generally described by many retailers as being a positive one, we believe performance outpaced the market.”
“Strong sales and our continued focus on cost control reduced expenses as a percentage of revenue to its lowest level in recent years” said Andrew Searby, CFO. “We are continuing to apply more discipline in dealing with aged and non-performing inventory and, in that context, are encouraged our gross margin is near historic ranges.”
Additional details are provided in the financial statements.
Mr. Hill continued, “While we do and should always believe that we have a number of opportunities to improve our business, the results of these last two quarters are encouraging to us. We will continue our efforts to add discipline, structure, accountability and processes to a business that will always be entrepreneurial and is increasingly relevant in the marketplace.” Liquidation World has scheduled a conference call for:
Wednesday, February 1, 2006 at 11:00 MST (1:00 p.m. EST)
Conference call dial in numbers are
1-877-888-7019 in all parts of Canada, except Toronto, or 416-695-6622 in Toronto.
A replay of the conference call will be accessible on Liquidation World’s website within twenty four hours at www.liquidationworld.com by selecting “Company/Investor Info”, “News Releases”, and “Q1 Conference Call”.
Liquidation World will hold its Annual General and Special Meeting on February 2, 2006 at the International Hotel, 220 – 4 Avenue SW, Calgary, AB at 2:45 pm. The company will also host a lunch and presentation for interested investors in Toronto on February 8, 2006.
About Liquidation World
Liquidation World liquidates consumer merchandise through 105 outlets across North America, and also provides store-closure sales management. The company 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 1,800 employees in outlets and offices across Canada and the United States.
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. Due to fluctuations in gross margins and other expenses, an increase in revenue does not directly correlate to an increase in net earnings.
For more information, please contact:
Jonathan Hill, President and CEO
416-587-0688 phone
866-237-3778 fax
jonathanh@liquidationworld.com
Andrew Searby, CA, Executive VP, and CFO
403-250-1222 phone
403-291-1306 fax
investorinfo@liquidationworld.com