West 49 Inc.
TSX : WXX

June 14, 2005 10:21 ET

West 49 Reports First Quarter Results

BURLINGTON, ONTARIO--(CCNMatthews - June 14, 2005) - West 49 Inc. (TSX:WXX) today announced results for its first quarter, the 13-week period ended April 29, 2005.

Net sales increased $4.4 million, or 30%, to $18.9 million in the 13 weeks ended April 29, 2005 from $14.5 million in the 13 weeks ended May 1, 2004 for the West 49 chain. Comparable store sales increased 10.3% in this period compared to the same period last year when West 49 was a private company.

"The first quarter results are in line with management's expectations," said Sam Baio, Chief Executive Officer. "Our strong top line growth is very encouraging and we have strengthened our business infrastructure to better manage this growth. As with many retailers, the first quarter is historically West 49's weakest period. Our plan is to focus on four primary areas; revenue generation, cost savings, margin enhancement and people/training.

The first quarter of fiscal 2006 represents the first full quarter of West 49 Inc. as a public company and resulted in a net loss of $1.384 million, or $0.03 loss per share, compared to a net loss of $.17 million, or $0.02 per share, in the prior year by the predecessor Corporation J.U.M. Capital Inc.

At April 29, 2005 West 49 operated 62 stores nationwide, including 59 West 49 stores and three Billabong stores. That compares with 51 stores; including 50 West 49 stores and 1 Billabong store on May 1, 2004. Total square footage of available selling floor space increased 35% from May 1, 2004 to April 29, 2005. The company opened 4 stores in its first quarter, including West 49 store in Oakville Place and Sherwood Park, and Billabong stores in Polo Park and Yorkdale.

During the quarter $0.3 million of bank debt was repaid reducing long-term debt to $4.7 million, while $2.8 million of the revolving line of credit was utilized at April 30, 2005. Capital assets increased $1.5 million as a result of opening new stores.

The company completed the acquisition of Off the Wall, a 10-store fashion forward young women's clothing retailer, on the close of business May 24, 2005. The acquisition price consists of $6 million in cash and slightly more than 5.2 million West 49 shares. Off The Wall's results will be incorporated into those of West 49 beginning May 25, 2005. One new Off The Wall store will be added in 2005. Off the Wall posted sales of $21.1 million and pre-tax profit of $2.2 million in its most recent fiscal year ended February 26, 2005.

West 49 Inc. is a specialty retailer of apparel, footwear and accessories, with an emphasis on skateboarding, snowboarding and surfing. The Company targets "Generation Y" customers (ages 10 through 18). West 49 operates 62 stores in seven provinces. It also owns Off the Wall, fashion-forward young women's clothing retailer with 10 stores. West 49's shares are listed on the Toronto Stock Exchange under the symbol WXX.

Forward-looking statements

Information in this news release that is not current or historical factual information may constitute forward-looking information. Implicit in this information are assumptions which, although considered reasonable by West 49 at the time of preparation, may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties and could differ materially from what is currently expected, including those referred to in our 2005 Annual Report.




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WEST 49 INC.
CONSOLIDATED BALANCE SHEET APRIL 30, JANUARY 29,
AS AT 2005 2005
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(unaudited)

ASSETS
Current
Cash and short-term investments $ - $ 4,735,304
Accounts and current notes receivable 1,444,632 1,319,381
Inventory 17,754,624 10,665,026
Future income tax - current 2,556,184 1,806,000
Prepaid expenses 582,252 343,743

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22,337,692 18,869,454

Capital assets 10,276,642 8,933,221
Deferred costs 1,149,420 710,239
Goodwill 18,063,853 18,063,853
Future income taxes 1,891,000 1,891,000

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$ 53,718,607 $ 48,467,767
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LIABILITIES

Current
Bank indebtedness $ 2,752,537 $ -
Accounts payable and accrued charges 11,022,382 7,275,333
Current portion of long-term debt 4,698,389 5,011,734

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18,473,308 12,287,067

Long-term debt 508,896 495,963
Preferred shares and special shares 5,411,414 5,411,414
Deferred lease inducements 2,527,546 2,100,381

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26,921,164 20,294,825
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SHAREHOLDERS' EQUITY
Share capital 40,550,443 40,541,693
Contributed surplus 362,000 362,000
Deficit (14,115,000) (12,730,751)

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26,797,443 28,172,942

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$ 53,718,607 $ 48,467,767
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WEST 49 INC.
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ending APRIL 30, MAY 31,
(unaudited) 2005 2004
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Sales $ 18,853,005 $ 224

Cost of sales; includes buying,
distribution and occupancy costs 15,606,371 -
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Gross margin 3,246,634 224

Selling, general and administrative
expenses 4,819,267 78,251
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Loss before other expenses (1,572,633) (78,027)
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Other Expenses
Dividends on special and preferred
shares 56,370 17,625
Interest expense on long term debt 76,192 23,075
Loss on sale of capital assets 43,497
Amortization 385,557 -

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561,616 40,700
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Loss from ongoing operations before
income taxes (2,134,249) (118,727)

Income tax recovery (750,000) -
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Loss from ongoing operations (1,384,249) (118,727)

Net income from discontinued operations - 102,151
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Net loss $ (1,384,249) $ (16,576)
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Basic and diluted loss per share from
ongoing operations $ (0.03) $ (0.02)
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Basic and diluted income per share from
discontinued operations - 0.02
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Basic and diluted loss per share $ (0.03) $ -
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(a)prior year numbers have been adjusted to reflect the 10:1
stock consolidation.


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WEST 49 INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ending APRIL 30, MAY 31,
(unaudited) 2005 2004
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OPERATING ACTIVITIES

Earnings (loss) from ongoing operations $ (1,384,249) $ (118,727)
Add: Items not affecting cash
Amortization of assets 385,557 -
Amortization of deferred costs 70,710 -
Amortization of deferred lease
inducements (74,729) -
Future taxes (750,184) -
Straight line rent expense 121,393 -
Loss from sale of capital assets 43,497 -
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(1,588,005) (118,727)

Changes in non-cash working
capital from ongoing operations (3,913,845) 6,529
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Cash flows from (used) by operating
activities from ongoing operations (5,501,850) (112,198)
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Cash flows (used) provided
by discontinued operating activities - 93,389
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FINANCING ACTIVITIES
Issuance of common stock 8,750 -
Decrease in long term debt (470,940) (57,590)
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Cash flows from (used by) financing
activities (462,190) (57,590)
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INVESTING ACTIVITIES
Additions to capital assets (1,515,804) -
Additions to deferred costs (509,892) -
Deferred lease inducements received 501,895 -
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Cash flows used by investing activities (1,523,801) -
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Decrease in cash and short term
investments (7,487,841) (76,399)

Cash and short term investments
Cash, Beginning of period 4,735,304 342,214
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(Bank Indebtedness) Cash, End of period $ (2,752,537) $ 265,815
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Contact Information

  • West 49 Inc.
    Pete Pigott
    Chief Operating Officer
    905-336-5454 x261
    or
    West 49 Inc.
    Kim Mullenger
    Manager of Financial Reporting and Investor Relations
    905-315-8400 x237
    http://www.west49.com