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Roots Corporation Assignment 2022

Prepare a financial analysis of Roots Corp's annual financial statements and submit a written report to the Board of Directors, analyzing the company's performance in 2019 and 2018, identifying areas of concern and improvement, and posing questions for discussion.

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Added on  2022-09-18

Roots Corporation Assignment 2022

Prepare a financial analysis of Roots Corp's annual financial statements and submit a written report to the Board of Directors, analyzing the company's performance in 2019 and 2018, identifying areas of concern and improvement, and posing questions for discussion.

   Added on 2022-09-18

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ROOTS CORPORATION
Interim Condensed Consolidated Financial Statements
For the 13 and 39 week periods ended November 3, 2018 and October 28, 2017
In Canadian dollars
(Unaudited)
Roots Corporation Assignment 2022_1
1
ROOTS CORPORATION
Interim Condensed Consolidated Statement of Financial Position
(In thousands of Canadian dollars, except per share amounts)
(Unaudited)
As at November 3, As at February 3,
Note 2018 2018
Assets
Current assets:
Cash $ 467 $ 1,809
Accounts receivable 9 9,971 6,420
Inventories 67,386 35,407
Prepaid expenses 6,691 5,580
Derivative assets 4, 9 986 –
Total current assets 85,501 49,216
Non-current assets:
Loan receivable 9, 11 541 541
Fixed assets 59,541 36,981
Intangible assets 199,890 203,408
Goodwill 52,705 52,705
Total non-current assets 312,677 293,635
Total assets $ 398,178 $ 342,851
Liabilities and Shareholders' Equity
Current liabilities:
Bank indebtedness 9 $ 12,521 $ –
Accounts payable and accrued liabilities 9 27,269 18,306
Deferred revenue 4,115 4,647
Income taxes payable 1,629 6,589
Current portion of long-term debt 5, 9 4,984 4,984
Derivative obligations 4, 9 – 1,233
Total current liabilities 50,518 35,759
Non-current liabilities:
Deferred tax liabilities 22,953 21,166
Deferred lease costs 10,131 4,815
Finance lease obligation 9 592 894
Long-term debt 5, 9 116,122 79,481
Other non-current liabilities 1,500 1,763
Total non-current liabilities 151,298 108,119
Total liabilities 201,816 143,878
Shareholders' equity:
Share capital 6 196,853 195,994
Contributed surplus 8 3,454 1,675
Accumulated other comprehensive income (loss) 723 (904)
Retained earnings (deficit) (4,668) 2,208
Total shareholders' equity 196,362 198,973
Total liabilities and shareholders' equity $ 398,178 $ 342,851
See accompanying notes to unaudited interim condensed consolidated financial statements.
On behalf of the Board of Directors:
"Erol Uzumeri" Director
"Richard P. Mavrinac" Director & Audit Committee Chair
Roots Corporation Assignment 2022_2
2
ROOTS CORPORATION
Interim Condensed Consolidated Statement of Net Income (Loss)
(In thousands of Canadian dollars, except per share amounts)
(Unaudited)
For the 13 and 39 week periods ended November 3, 2018 and October 28, 2017
November 3, 2018 October 28, 2017 November 3, 2018 October 28, 2017
Note (13 weeks) (13 weeks) (39 weeks) (39 weeks)
Sales $ 86,979 $ 89,690 $ 198,205 $ 196,036
Cost of goods sold 39,049 40,420 88,060 89,804
Gross profit 47,930 49,270 110,145 106,232
Selling, general and administrative expenses 42,465 40,784 115,014 105,989
Income (loss) before interest expense and income
taxes expense (recovery) 5,465 8,486 (4,869) 243
Interest expense 9 1,393 1,551 3,736 4,531
Income (loss) before income taxes 4,072 6,935 (8,605) (4,288)
Income taxes expense (recovery) 9, 10 1,277 1,956 (1,729) (928)
Net income (loss) $ 2,795 $ 4,979 $ (6,876) $ (3,360)
Basic and diluted earnings (loss) per share 7 $ 0.07 $ 0.12 $ (0.16) $ (0.08)
See accompanying notes to unaudited interim condensed consolidated financial statements.
Roots Corporation Assignment 2022_3
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ROOTS CORPORATION
Interim Condensed Consolidated Statement of Comprehensive Income (Loss)
(In thousands of Canadian dollars, except per share amounts)
(Unaudited)
For the 13 and 39 week periods ended November 3, 2018 and October 28, 2017
November 3, 2018 October 28, 2017 November 3, 2018 October 28, 2017
Note (13 weeks) (13 weeks) (39 weeks) (39 weeks)
Net income (loss) $ 2,795 $ 4,979 $ (6,876) $ (3,360)
Other comprehensive income (loss),
net of taxes:
Items that may be subsequently
reclassified to profit or loss:
Effective portion of changes in fair
value of cash flow hedges 4, 9 419 1,025 3,517 (1,049)
Cost of hedging excluded from
cash flow hedges 4, 9 54 13 178 76
Tax impact of cash flow hedges 4, 9 (126) (277) (984) 259
Total comprehensive income (loss) $ 3,142 $ 5,740 $ (4,165) $ (4,074)
See accompanying notes to unaudited interim condensed consolidated financial statements.
Roots Corporation Assignment 2022_4
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ROOTS CORPORATION
Interim Condensed Consolidated Statement of Changes in Shareholders' Equity
(In thousands of Canadian dollars, except per share amounts)
(Unaudited)
For the 39 week periods ended November 3, 2018 and October 28, 2017
Accumulated
Retained other
Share Contributed earnings comprehensive
November 3, 2018 (39 weeks) Note capital surplus (deficit) income (loss) Total
Balance, February 4, 2018 $ 195,994 $ 1,675 $ 2,208 $ (904) $ 198,973
Net loss – – (6,876) – (6,876)
Net gain from change
in fair value of cash flow hedges,
net of income taxes – – – 2,710 2,710
Transfer of realized gain on cash
flow hedges to inventories, net
of income taxes – – – (1,083) (1,083)
Share-based compensation 8 – 1,985 – – 1,985
Issuance of shares 8 859 (206) – – 653
Balance, November 3, 2018 $ 196,853 $ 3,454 $ (4,668) $ 723 $ 196,362
Accumulated
Retained other
Share Contributed earnings comprehensive
October 28, 2017 (39 weeks) Note capital surplus (deficit) income (loss) Total
Balance, January 29, 2017 $ 195,994 $ 483 $ 4,707 $ – $ 201,184
Net loss – – (3,360) – (3,360)
Net loss from change
in fair value of cash flow hedges,
net of income taxes – – – (714) (714)
Transfer of realized loss on cash
flow hedges to inventories, net
of income taxes – – – 598 598
Distributions declared 6 – – (20,000) – (20,000)
Share-based compensation 8 – 611 – – 611
Balance, October 28, 2017 $ 195,994 $ 1,094 $ (18,653) $ (116) $ 178,319
See accompanying notes to unaudited interim condensed consolidated financial statements.
Roots Corporation Assignment 2022_5
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ROOTS CORPORATION
Interim Condensed Consolidated Statement of Cash Flows
(In thousands of Canadian dollars, except per share amounts)
(Unaudited)
For the 39 week periods ended November 3, 2018 and October 28, 2017
November 3, 2018 October 28, 2017
(39 weeks) (39 weeks)
Cash provided by (used in):
Operating activities:
Net loss $ (6,876) $ (3,360)
Items not involving cash:
Depreciation and amortization 9,130 8,043
Share-based compensation expense 1,985 611
Deferred lease costs (recovery) (565) 592
Amortization of lease intangibles 407 701
Interest expense 3,736 4,531
Income taxes recovery (1,729) (928)
Interest paid (3,310) (4,039)
Taxes paid (2,036) (262)
Change in working capital:
Accounts receivable (3,551) (617)
Inventories (31,979) (24,433)
Prepaid expenses (1,111) (333)
Accounts payable and accrued liabilities 8,963 5,998
Deferred revenue (532) (642)
(27,468) (14,138)
Financing activities:
Issuance of long-term debt 40,000 21,000
Long-term debt financing costs (66) (999)
Repayment of long-term debt (3,737) (7,162)
Finance lease payments (282) (118)
Distributions paid – (20,000)
Proceeds from issuance of shares 653 –
36,568 (7,279)
Investing activities:
Additions to fixed assets (28,997) (9,664)
Tenant allowance received 6,034 1,262
(22,963) (8,402)
Decrease in cash (13,863) (29,819)
Cash, beginning of period 1,809 25,257
Cash and bank indebtedness, end of period $ (12,054) $ (4,562)
See accompanying notes to unaudited interim condensed consolidated financial statements.
Roots Corporation Assignment 2022_6

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