Danier Leather Q4 net loss widens on lower sales

16 Aug '06

2 min read

Leather manufacturer Danier Leather Inc has announced its consolidated financial results for the fourth quarter and 52 weeks ended June 24, 2006.

Sales for the fourth quarter decreased by 13% while comparable store sales decreased 15%. Year-to-date total sales and comparable store sales decreased 11%.

Net loss during the fourth quarter was $4.6 million compared with a net loss of $3.2 million in the fourth quarter last year.

The fourth quarter of this year included $1.4 million of restructuring costs including $0.6 million for severance costs and outplacement counseling related to the head office downsizing that took place during the fourth quarter as well as $0.8 million of additional amortization to write off leasehold improvements and fixtures in connection with the closure of one street-front store, one power centre location and the reduction in size of one shopping mall store.

Danier maintained a strong financial position at year-end with approx. $11.8 million in cash and a working capital balance of $36.4 million. Year-end inventory levels were approx. $3.3 million higher than last year as a result of earlier purchases of fall merchandise.

Two new stores have been opened during the year including one new shopping mall store at the Niagara Fallsview Casino in Ontario and a power centre location at Sunridge Mall in Calgary, Alberta. Two underperforming shopping mall stores whose leases expired were closed during the year.

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