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Le Château Q1 profit drops
12
Jun '09
Le Château Inc reported that sales for the first quarter ended May 2, 2009 increased 1.7% to $71.8 million from $70.6 million for the first quarter ended April 26, 2008. Comparable store sales decreased by 5.9% versus the same period a year ago.

Net earnings for the first quarter ended May 2, 2009 were $5.1 million compared to $5.6 million for the first quarter ended April 26, 2008. Earnings per share (diluted) for the first quarter were $0.21 per share versus $0.22 per share the previous year. Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the first quarter amounted to $12.0 million or 16.7% of sales, compared to $12.4 million or 17.5% of sales last year.

During the first quarter, the Company opened 2 stores, closed 1 and expanded 1 existing location, resulting in the addition of 8,000 square feet to the Le Château network, bringing the total floor space at end of period to 1,056,000 square feet.

Dividend declaration
The Board of Directors has declared a quarterly dividend (constituting eligible dividends for income tax purposes) of $0.175 per Class A subordinate voting share and Class B voting share. This is the 63rd consecutive dividend declared by Le Château, and is payable on August 18, 2009 to the shareholders of record at the close of business on July 30, 2009.

Normal course issuer bid
The Company announced that it intends, subject to the approval of the Toronto Stock Exchange, to proceed with a normal course issuer bid. Under the bid, the Company may purchase up to 987,173 Class A subordinate voting shares of the Company, representing 5% of the issued shares of such class as at June 11, 2009. The bid will commence on June 19, 2009 and may continue to June 18, 2010.

The average daily trading volume for the 6-month period preceding June 1, 2009 is 26,815 shares. In accordance with TSX requirements, a maximum daily repurchase of 25% of this average may be made, representing 6,703 shares. The shares will be purchased on behalf of the Company by a registered broker through the facilities of the Toronto Stock Exchange.

The price paid for the shares will be the market price at the time of acquisition, and the number of shares purchased and the timing of any such purchases will be determined by the Company. All shares purchased by the Company will be cancelled. The Company currently has 19,743,464 Class A subordinate voting shares outstanding. During the past 12 months, the Company purchased 920,700 Class A subordinate voting shares at a weighted average price of $11.41 per share for a total of $10.5 million.

The directors of the Company have concluded that purchases of up to 987,173 of the issued and outstanding Class A subordinate voting shares are an appropriate and desirable use of the Company's available funds and, therefore, would be in the best interests of the Company. As a result of such purchases, the number of issued shares will be decreased and, consequently, the proportionate share interest of all remaining shareholders will be increased on a pro rata basis.

Annual General Meeting The Company's annual general meeting is scheduled for June 17, 2009 at its head office located at 8300 Decarie Boulevard. The record date for this meeting was May 15, 2009.

Le Château Inc


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