Proactiveinvestors USA & Canada Rona Inc https://www.proactiveinvestors.com Proactiveinvestors USA & Canada Rona Inc RSS feed en Wed, 26 Jun 2019 04:58:36 -0400 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Rona enjoys a fourth consecutive quarter of growth ]]> https://www.proactiveinvestors.com/companies/news/115351/rona-enjoys-a-fourth-consecutive-quarter-of-growth-115351.html

Shares of retailer and distributor Rona (TSE:RON) were trading 3.3% higher today, even after announcing slightly lower than expected earnings.

In the second quarter, Rona posted earnings per share of C$0.46 or 31% higher than the comparable period of 2014, but analysts surveyed by Bloomberg had forecast C$0.47 a share.

Revenue increased 5.8% to $ 1,293 million. Net income $ 50 million advance of 19.1%. Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $ 96.9 million, or 7.7% of revenue, compared with 89.1 million, or 7.5% of revenue, in the second quarter 2014.

Rona did show strong growth a same-store sales, a key indicator of organic growth, rose 5.4%. Moreover, this was the Quebec based retailer’s fourth consecutive quarter of growth even as housing starts have been dropping according to the company’s chief executive Robert Sawyer:

“This performance underscores the success of the various merchandising and banner repositioning strategies we implemented just over a year ago,” said Sawyer in a statement.

The quarterly results were also enhanced by a 14% dividend, which will now be paid quarterly rather than twice per year. The annual dividend is $ 0.16 per share.

National Bank Financial recently reiterated a "sector perform" recommendation with a target of C$17.50 for Rona, which was trading at C$15.50 at noon

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Tue, 11 Aug 2015 13:23:00 -0400 https://www.proactiveinvestors.com/companies/news/115351/rona-enjoys-a-fourth-consecutive-quarter-of-growth-115351.html
<![CDATA[News - RONA to buy back 20 franchise stores in Canada in a move to simplify operations ]]> https://www.proactiveinvestors.com/companies/news/115350/rona-to-buy-back-20-franchise-stores-in-canada-in-a-move-to-simplify-operations-115350.html

Shares of retailer and distributor Rona (TSE:RON) were trading about 0.25% higher today after announcing a plan to buy 20 stores in its network operating under the Rona, Rona L'entrepot and Rona Home & Garden brands. The company will leave 275 stores as independent.

Negotiations with franchisees started over six months ago, said Rona’s vice-president of retail, Luc Rodier, who explained the motivation for the purchase noting that "we saw an opportunity to consolidate the market. We are trying to simplify our business model."

Each franchisee will be performing due diligence of their operations while purchase agreements will be negotiated. Rona’s Board will have to approve any purchases. Negotiations will be conducted on the purchase agreements, the Rona Board must give its approval, and address other regulatory requirements.

The franchise buyout operations should be completed in September, said Rodier, Rona should have full ownership of 79 Rona branded big-box stores in Canada and there are no plans to shut down any locations: "These are all great sites, well operated stores, "said Rodier.

The stores in question employ 2,600 people, generating sales of C$500 million, which will add to Rona's revenues for the year.

National Bank Financial has reiterated a "sector perform" recommendation with a target of C$17.50 for Rona. Analyst Vishal Shreedhar said that the 20 acquired stores could add anywhere from C$ 0.02 to C$0.10 per share to the company's earnings.

Shreedhar was optimistic that a more simplified structure could make the hardware store more attractive to other industry players which may be seeking consolidation.

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Fri, 17 Jul 2015 15:28:00 -0400 https://www.proactiveinvestors.com/companies/news/115350/rona-to-buy-back-20-franchise-stores-in-canada-in-a-move-to-simplify-operations-115350.html
<![CDATA[News - Rona returns to Q2 profit, beats estimates on lower costs ]]> https://www.proactiveinvestors.com/companies/news/102768/rona-returns-to-q2-profit-beats-estimates-on-lower-costs-56095.html Rona Inc. (TSE:RON), a Canadian home improvement retailer and distributor, rose in midday trades after posting a stronger-than-expected quarterly profit.

Shares were up 2.6 percent at C$12.70 at 1:57 p.m. in Toronto, expanding gains over the past year to 13 percent.

Adjusted earnings from continuing operations rose to C$42 million, or C$0.35 per share, in the three-month period ended June 29, from C$33.6 million, or C$0.28 per share, in the year-earlier quarter, the Boucheville, Quebec-based company said in a statement today.

Analysts, on average, had expected earnings per share of C$0.33.

Overall, net income of C$42 million reversed last year's loss of C$38.7 million.

Revenue fell to C$1.19 billion from C$1.25 billion.

Rona said the results demonstrate the success of its turnaround plan and its need to stay focused on efficiency. 

Lower costs helped offset a drop in sales due to tough competition in the home renovation market, it said.

Annual costs were reduced by C$110 million in 2013 by cutting jobs, closing stores and selling assets, the company said.

In July, Rona signed a long-term deal for master licensing of the Ace Hardwarebrand with Ace Hardware International. The deal is expected to help Rona improve its offering to small dealers across the country while leveraging its existing distribution infrastructure.

Rona declared a semi-annual dividend of C$0.07 per share on its common shares.

The company also announced a quarterly dividend of C$0.3281 per share on cumulative 5-year rate reset Class A preferred shares, series 6.

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Tue, 12 Aug 2014 14:34:00 -0400 https://www.proactiveinvestors.com/companies/news/102768/rona-returns-to-q2-profit-beats-estimates-on-lower-costs-56095.html
<![CDATA[News - Rona sinks as Q4 misses on bad weather, weak home-building ]]> https://www.proactiveinvestors.com/companies/news/99930/rona-sinks-as-q4-misses-on-bad-weather-weak-home-building-52121.html Rona Inc. (TSE:RON), a Canadian home improvement retailer and distributor, slumped to the lowest in more than four months after posting lower revenue and profit in the fourth quarter, hurt by extreme winter weather and a decline in home-building.

Rona tumbled 6.1 percent to C$11.62 at 1:48 p.m. in Toronto after reaching C$11.36, the lowest intraday price since Sept. 24. 

Adjusted net income slid 28 percent to C$4.6 million, or 4 Canadian cents a share, in the 13 weeks ended Dec. 29, from C$6.4 million, or 5 Canadian cents a share, in the year-earlier period, the Boucherville, Quebec-based company said in a statement today. There were 14 weeks in the last quarter of 2012.

Total revenue skidded 3.5 percent to C$941.1 billion from C$1.07 billion a year earlier.

Analysts were looking for per-share earnings of 10 cents and revenue of $1.08 billion according to Thomson Reuters.

Same-store sales, a critical measure of retail health which strips out the effects of store openings and closings, fell 3.5 percent due to the ice storm in Ontario and Quebec in December and a decline in housing starts.

Rona has Canada's largest network of home renovation, hardware and gardening stores of various sizes.

"Fiscal 2013 was a year of profound organizational change at Rona, against the backdrop of a difficult market context for our industry," Chief Executive Officer Robert Sawyer in the statement.

Rona said it will focus this year on repositioning some store banners and stabilizing profit margins after lowering price and selling excess inventory.

"Most importantly, we will concentrate on meeting the needs of our target customers so that we can increase our market share in an industry that is experiencing a cyclical slowdown," Sawyer said.

 

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Tue, 18 Feb 2014 14:27:00 -0500 https://www.proactiveinvestors.com/companies/news/99930/rona-sinks-as-q4-misses-on-bad-weather-weak-home-building-52121.html
<![CDATA[News - Rona's Q3 results miss, cost savings program on track ]]> https://www.proactiveinvestors.com/companies/news/98430/ronas-q3-results-miss-cost-savings-program-on-track-49784.html Shares of Rona (TSE:RON)(TSE:RON.PR.A) were up Tuesday following the release of the company's third quarter results, despite missing profit and revenue estimates as the Canadian home renovation retailer continues to struggle amid unfavourable market conditions. 

For the three months that ended September 29, it reported net income of $30.0 million, or 25 cents per share, up from $5.5 million, or 5 cents per share a year earlier, but down from $33.5 million, or 28 cents per share, when excluding one-time items. 

Revenue fell 4.3% to $1.17 billion, due to store closures as well as a 2.4% decrease in same store sales. 

Rona was expected to earn $39.2-million or 30 cents per share in adjusted profit on $1.25-billion of revenues, according to analysts polled by Thomson Reuters.

The company said same-store sales were affected by a sharp drop in single-family housing starts in Canada, particularly in Quebec, where it declined by 31% during the quarter. Rona earns nearly 50% of its total revenues in Quebec.

The home renovation company also said that it achieved annualized cost savings of $63 million, of the $110 million it is planning by year-end.  The cost savings are mainly related to workforce reductions, the renegotiation of major administrative services contracts and the closure of underperforming stores, Rona said. 

"The $63 million in annualized cost-savings achieved year-to-date has allowed us to quickly roll out measures that will have an ongoing impact on Rona's financial performance," said president and CEO Robert Sawyer in a statement.

"I am especially proud of the fact that we have reduced our inventory by a total of $114 million."

Rona, which sold its commercial and professional market division last month for proceeds of $214 million, approved Tuesday  a normal course issuer bid to buy back 8.6 million shares, or 10% of the public float. 

The company generated free cash flows of $151.3 million in the third quarter, up from $144.4 million a year ago, and ended the period with net debt of $347.8 million. 

Shares of Rona rose 0.5% to C$12.07 in Toronto in early afternoon trade. 

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Tue, 12 Nov 2013 12:45:00 -0500 https://www.proactiveinvestors.com/companies/news/98430/ronas-q3-results-miss-cost-savings-program-on-track-49784.html
<![CDATA[News - Update: Rona broadens cost-cutting measures ]]> https://www.proactiveinvestors.com/companies/news/95911/update-rona-broadens-cost-cutting-measures--45508.html Rona (TSE:RON) is using its renovation expertise on its own operations as it maps out a plan to shutter stores, trim payroll and fine-tune its balance sheet. 

The to-do list of improvements includes the closure of 11 non-profitable stores, a tighter budget for administrative, marketing, merchandising and distribution expenses and layoffs of 125 employees in four administrative centres. 

The layoffs are in addition to the headcount cut of 200 workers announced in February. 

Of the stores facing closure, eight are in Ontario and three are in British Columbia. The majority were big box locations. 

"They had been losing money for awhile, so we don't think there was an opportunity to correct the negativity," said chief financial officer Dominique Boies on a conference call this morning.

Rona is also reorganizing its commercial structure into four distinct groups categorized as discount stores, big-box stores, proximity stores and its contractor business. There will be 18 discount stores of about 80,000 square feet outside the province of Quebec.

Rona is hoping to save $110 million annually through its restructuring measures: $70 million through today's initiatives on top of the $40 million announced when the company reported year-end results in February. Nearly a third of the total savings will be reinvested into the business. 

"I am convinced we have everything in place to acheive this target," president and CEO Robert Sawyer said on the call. 

Although the specific breakdown of the cost-savings wasn't disclosed, the biggest portion of the charge come from lease agreements. Only two of the stores facing closure are owned. They will be on the market along with other non-core retail assets. 

The staff reduction makes up less than half of the $70 million cost savings. 

The series of moves is part of Rona's ongoing battle to keep up with competitors such as Lowe's (NYSE: LOW), which is gradually ramping up its presence in Canada by means of small-format stores. 

Since the U.S.-based rival pulled its friendly $1.8 billion bid in September, investors have shaved off nearly a quarter of Rona's value.

Last week, the Boucherville, Quebec-based chain announced it would sell its commercial and professional market division for $215 million. The proceeds will go towards Rona's debt, the long-term portion of which was $462 million as of the end of March.

The steps revealed today will lead to a one-time charge of $95 million, bringing total adjustments appearing in the second quarter results to $220 million after a $125 million charge from the division sale is factored in. 

The second quarter results will be released August 14.

Rona's adjusted quarterly loss widened in the first quarter to $0.19 per share, from $0.11 per share during the same prior-year period. That missed analyst expectations by eight cents, the fourth quarter in a row that it has underperformed. 

Rona rose 13 cents to $9.84 in trading so far Thursday morning. 

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Thu, 27 Jun 2013 11:30:00 -0400 https://www.proactiveinvestors.com/companies/news/95911/update-rona-broadens-cost-cutting-measures--45508.html
<![CDATA[News - RONA to sell commercial and professional market division for $215 mln ]]> https://www.proactiveinvestors.com/companies/news/95742/rona-to-sell-commercial-and-professional-market-division-for-215-mln-45211.html Rona (TSE:RON)(TSE:RON.PR.A) said Thursday that it has agreed to sell its commercial and professional market division to a subsidiary of EMCO Corp for around $215 million, sending shares of the hardware and home renovation retailer lower. 

The home renovation retail chain has been struggling amid increasing competition and the high cost of goods weighing on its bottom line, and said the deal is in line with its priorities that have been focused on unlocking the potential of its retail and distribution business. 

The commerical and professional market unit, which specializes in plumbing, heating, ventilation and air conditioning systems, was created when Rona acquired Noble in 2007, and currently has 1,400 employees in Ontario, Quebec and British Columbia. The division, which operates under the Noble, Don Park, MPH Supplies, Boutique Eaudace and Boutique Plomberie Décoration 25 banners, will be sold to EMCO subisidiary Talisker Plumbing Corp, according to a statement Thursday. 

Shares of Rona were halted immediately prior to the announcement today, and resumed trading shortly after news of the deal. Its stock is now trading at $10.15 as of 11:00am ET, down almost 0.9 per cent. So far this year, Rona has lost more than 5 per cent. 

"Since 2007, we've been working with a group of skilled and dedicated employees who have helped build this business. After all these years, we know we can count on them for their continued support in this transition," said Rona's executive vice president and CFO, Dominique Boies.

Last month, the Boucherville, Quebec-based company said its adjusted quarterly loss widened in the first quarter to $0.19 per share, from $0.11 per share during the same prior-year period. Rona missed analyst expectations by eight cents, the fourth quarter in a row that it has underperformed. The news rattled investors, who sent the stock plunging as much as five per cent on the news. 

Revenue fell half a per cent to $929.4 million as a rise in sales in the distribution segment offset gains in the retail and commercial segment. Same-store sales rose 9.5 per cent in the distribution segment and fell three per cent in the retail and commercial segment.

At the time of the release of the company's first quarter results, Boies said that further changes would be required to allow Rona to return to sustained growth in net income, with 2013 marking a year of transition for the retail chain.

Part of that transition is the repositioning of the Réno-Dépôt banner and the decision to keep its big-box store network outside Quebec. As part of a cost-cutting plan that trimmed $17 million in mostly workforce-related expenses, Rona says it will target a total cost reduction of $45 million by the end of next year. 

U.S.-based competitor Lowe's (NYSE: LOW) is gradually creeping into Canada, with eyes on setting up more small-format stores. Rona shares have slumped around 20 per cent since Lowe's pulled its $1.8 billion bid for the company. 

The transaction announced Thursday still needs regulatory approvals to close. Rona, which operates a network of more than 800 retail stores and 14 distribution centres, said it expects to record a pre-tax loss of $125 million resulting from the deal in the second quarter, mostly related to a write-down of the division's goodwill. The unit will be recorded as a discontinued operation. 

London, Ontario-based EMCO is a wholesale distributor for the construction industry. 

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Thu, 20 Jun 2013 11:28:00 -0400 https://www.proactiveinvestors.com/companies/news/95742/rona-to-sell-commercial-and-professional-market-division-for-215-mln-45211.html
<![CDATA[News - RONA's blames wider Q1 loss on reluctant consumers & high product costs ]]> https://www.proactiveinvestors.com/companies/news/94951/ronas-blames-wider-q1-loss-on-reluctant-consumers-high-product-costs-43855.html  

Home renovation retail chain RONA (TSE: RON) continues to struggle amid increasing competition and the high cost of goods weighing on its bottom line. 

The Boucherville, Quebec-based company says its adjusted quarterly loss widened in the first quarter to $0.19 per share, from $0.11 per share during the same prior-year period. RONA missed analyst expectations by eight cents, the fourth quarter in a row that it has underperformed. 

The news rattled investors, who sent the stock plunging as much as five per cent on the news. 

Revenue fell half a per cent to $929.4 million as a rise in sales in the distribution segment offset gains in the retail and commercial segment. Same-store sales rose 9.5 per cent in the distribution segment and fell three per cent in the retail and commercial segment.

"2013 is clearly a transition year for RONA and further changes will be required to allow us to return to sustained growth in net income," said Dominique Boies, executive vice-president and chief financial officer in a statement.

Part of that transition is the repositioning of the Réno-Dépôt banner and the decision to keep its big-box store network outside Quebec. As part of a cost-cutting plan that trimmed $17 million in mostly workforce-related expenses, RONA says it will target a total cost reduction of $45 million by the end of next year. 

U.S.-based competitor Lowe's (NYSE: LOW) is gradually creeping into Canada, with eyes on setting up more small-format stores. RONA shares have slumped around 20 per cent since Lowe's pulled its $1.8 billion bid for the company. 

RONA was trading $0.39 lower at $10.25 as of 12:15 pm ET. 

 

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Tue, 14 May 2013 12:57:00 -0400 https://www.proactiveinvestors.com/companies/news/94951/ronas-blames-wider-q1-loss-on-reluctant-consumers-high-product-costs-43855.html
<![CDATA[News - Rona snatches Metro's Robert Sawyer as new chief ]]> https://www.proactiveinvestors.com/companies/news/93711/rona-snatches-metros-robert-sawyer-as-new-chief-41781.html Rona (TSE:RON)(TSE:RON.PR.A), the largest Canadian distributor and retailer of hardware, home renovation and gardening products, says it has snagged Metro's (TSE:MRU) Robert Sawyer as its new president and CEO. 

Sawyer, whose new position is effective in April, is taking the job at Rona after spending 33 years at grocery chain Metro, most recently as COO. 

He specializes in retail operations and distribution to dealers operating under different banners. 

Acting CEO for Rona, Dominique Boies, will remain the company's executive VP and CFO, the company said. 

 "It became increasingly clear to us that to ensure a successful transformation, we needed to hire a specialist in retail and distribution operations," said executive chairman of Rona in a statement, Robert Chevrier. 

"So I am very pleased to announce today the appointment of Robert Sawyer. He will play a key role in simplifying and optimizing the Rona business model, particularly with respect to merchandising, pricing strategy, supply chain, service to consumers and service to Rona dealers."

The chairman said that Sawyer has the "operational and turnaround expertise" needed to put Rona back on the path to profitable growth. Shares of Rona rose more than 4.3 percent early Tuesday, to $11.02. 

Last month, the home improvement retailer said its fourth quarter results “fell short of expectations” on a dip in same-store sales and increased competition, and said it is laying off 200 managers across Canada in an effort to restructure the business.

The plan includes the reduction of about 15 per cent of its full-time positions at administrative offices across Canada, which it expects will result in a restructuring charge of $25 million.

Comparable sales across the Rona network in the latest period that ended in December were up 2.9 per cent, or just 0.2 per cent when excluding the extra week in the quarter.

Metro said in its own statement Tuesday that it regrets Sawyer's decision to leave the company, and that a succession plan is being implemented, with the heads of the Quebec and Ontario divisions now to report to the CEO. The position of COO will not be filled, it added. 

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Tue, 19 Mar 2013 10:31:00 -0400 https://www.proactiveinvestors.com/companies/news/93711/rona-snatches-metros-robert-sawyer-as-new-chief-41781.html
<![CDATA[News - Rona narrows Q4 loss but misses views, slashes 200 full-time jobs ]]> https://www.proactiveinvestors.com/companies/news/93182/rona-narrows-q4-loss-but-misses-views-slashes-200-full-time-jobs-40854.html Home improvement retailer Rona (TSE:RON) Thursday said its fourth quarter results “fell short of expectations” on a dip in same-store sales and increased competition, and said it is laying off 200 managers across Canada in an effort to restructure the business.

The company late Wednesday announced its “transformational plan” to be rolled out over the next year, with full benefits expected within two years.

Rona said the plan includes the reduction of about 15 per cent of its full-time positions at administrative offices across Canada, which it expects will result in a restructuring charge of $25 million.

Meanwhile, the Montreal-headquartered company said that for the quarter that ended December 30, it narrowed its net loss to $15.4 million or 15 cents per share, compared with a year-earlier loss of $151.2 million or $1.19 per share when it recorded a hefty goodwill impairment charge.

Excluding one-time items, earnings  were $6.6 million or five cents per share.

Revenue rose 2.2 per cent to $1.19 billion, from $1.16 billion a year earlier, mainly as a result of an extra week of sales in the quarter and the opening of some new stores, the company said.

Analysts polled by Thomson Reuters had called for per share earnings of 12 cents on revenue of $1.19 billion.

“While financial results fell short of our expectations, we maintained a disciplined management of our capital structure and generated free cash flow,” said CFO and acting CEO and executive VP Dominique Boies.

“Building on the assessment undertaken when we launched our plan at the beginning of the year, which was addressing only 20 per cent of our network, we undertook a complete re-assessment of all parts of our business in order to identify additional value creation opportunities to rapidly turnaround our financial performance.”

Gross margin in the latest quarter edged down to 27.37 per cent from 27.75 per cent.

Comparable sales across the Rona network were up 2.9 per cent, or just 0.2 per cent when excluding the extra week in the quarter.

For the retail and commercial segment, same-store sales were up 2.4 per cent, or down 0.7 per cent excluding the extra week, while comparable distribution sales grew 5.9 per cent – or 5.2 per cent excluding the extra week. 

The company noted that sales of lumber and building materials in corporate stores and to Rona dealers were “particularly strong”, but were offset by cost inflation and more intense competition.

On February 20, Rona said its board declared a quarterly dividend of 32.3 cents on preferred shares, to be distributed on April 1, to holders of record on March 15.

The board also declared a semi-annual dividend of seven cents per share on its common shares, to be paid on March 25, to holders of record on March 11.

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Thu, 21 Feb 2013 09:52:00 -0500 https://www.proactiveinvestors.com/companies/news/93182/rona-narrows-q4-loss-but-misses-views-slashes-200-full-time-jobs-40854.html
<![CDATA[News - RONA announces sweeping board changes in deal with two largest shareholders ]]> https://www.proactiveinvestors.com/companies/news/92522/rona-announces-sweeping-board-changes-in-deal-with-two-largest-shareholders-39643.html  

Canadian home improvement retailer Rona (TSE:RON) saw its shares rise over two per cent Monday after announcing sweeping changes to its board as it looks to recover and refocus after a tumultuous year in 2012.

Shares were lately higher by 2.43 per cent, trading at $11.78.

Despite intense competition, a decline in same-store sales and higher inflation costs in 2012, the company notably rejected a $1.76 billion hostile takeover from U.S. rival Lowe’s Companies (NYSE:LOW) in July, saying it wasn’t in the best interest of its shareholders.

Former CEO Robert Dutton then stepped down in November, after 35 years,  just days after the company posted a sharp drop in third-quarter profit. Then in December, the company said it was preparing to sell non-core assets and make other strategic moves to improve its profitability as it is under pressure to improve its bottom line. 

As it prepares to turn things around this year, the company said today that it has entered into an agreement with two of its largest shareholders, Caisse de dépôt et placement du Québec and Invesco Canada Ltd., “providing for several changes” to its board of directors.

Robert Chevrier, chairman and director of UniSelect (TSE:UNS) and, until today, chairman and director of Richelieu Hardware (TSE:RCH), joins Rona's board as executive chairman, effective immediately. 

Chevrier replaces Robert Paré, who steps down as chairman but continues to serve as a board member.

Also joining the board are Bernard Dorval, former group head of insurance & global development at TD Bank Financial Group (TSE:TD) and deputy chair at TD Canada Trust; Wesley Voorheis, partner at Voorheis & Co. LLP and managing director, VC & Co. Inc.; Guy Dufresne, corporate director and former president and CEO of ArcelorMittal Mines Canada (NYSE:MT); and Barry Gilbertson, principal with Barry Gilbertson Consultancy.

"I am delighted to welcome Robert Chevrier to the Rona Board,” said Paré.

“Robert has strong expertise in Rona's main operating segments of retail, distribution and commercial and professional."

Paré said the board is confident that Chevrier has the experience required to assist the company as it executes on its strategic and financial priorities.

"Robert, Bernard, Wesley, Guy and Barry collectively bring a strong track record of operational, retail and distribution success, along with significant leadership experience on public company boards,” he added.

“In addition to their expertise, they will bring a more diverse geographic representation. This is a very important moment for the company as it focuses on achieving its full potential.” 

Alain Michel and Patrick Palerme will also resign from Rona's board, effective immediately, to allow for its reconfiguration, the company said.

In addition, two other board members, Steven Richardson and an additional nominee, will be up for election at Rona's annual general meeting in May, in replacement of two current directors who will not stand for re-election. 

The total number of Rona directors will increase from 12 to 14, eight of whom will be new directors.

In other news Monday, Rona said that it has retained the services of a global management consulting firm to “accelerate progress” on its strategic priorities announced in December, when it said it was preparing to sell non-core assets and make other strategic moves.

The Montreal-based company has been under pressure to improve its bottom line, especially since it rejected the Lowe's bid.

Rona did not provide details about where the cuts will be made and said it will provide a detailed update, including specific action plans and key metrics, in its fourth quarter earnings presentation on February 21.

Further, Rona expects to provide an update on its process to recruit a new CEO before the end February.

 

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Mon, 21 Jan 2013 11:23:00 -0500 https://www.proactiveinvestors.com/companies/news/92522/rona-announces-sweeping-board-changes-in-deal-with-two-largest-shareholders-39643.html
<![CDATA[News - Rona mulls sale of non-core assets ]]> https://www.proactiveinvestors.com/companies/news/91754/rona-mulls-sale-of-non-core-assets--38313.html

Rona (TSE:RON), Canada's largest home improvement retailer, said Thursday it was preparing to sell non-core assets and make other strategic moves to improve its profitability.

The Montreal-based company has been under pressure to improve its bottom line, especially since it rejected a lucrative takeover bid by U.S. rival Lowe's (NYSE:LOW).

Lowe's unofficial bid — which was dropped after Lowe's met stiff resistance from Rona's board, Quebec politicians and the independent dealership owners that operate under Rona's brands — had been worth $1.8 billion.

Rona did not provide details about where the cuts will be made and said specific initiatives will be revealed in future announcements.

"Using the same rigour and disciplined approach introduced a year ago with the three financial priorities, the strategic priorities will further refine Rona's business model and enable the corporation to accelerate value creation for its stakeholders," the company said.

The company said that acting CEO Dominique Boies, the Rona management and board will immediately focus efforts on three priorities: leverage the strength of Rona's core business, grow key customer segments with a "more compelling value proposition" and unlock the profit potential of a simplified business model.

Rona currently has nearly 30,000 employees and 830 locations under its banner, giving Rona a bigger reach in Canada than Home Depot or Lowe's. Home Depot has just 180 stores across Canada and Lowe's has about 31 Canadian locations.

Under the leadership of long-time CEO Robert Dutton, who left the company last month, Rona had amassed a retail network with a wide variety of store formats and sizes — many of them acquired by purchasing local and regional home improvement and building centres.

"Rona, through its dedicated dealer-owners and employees, has built a very strong and valuable corporation over the past 73 years," Boies said.

"Rona's nationwide growth did not come without a certain level of complexity. The focus on our three strategic priorities will enable us to simplify our business model, reconnect to our roots as one of Canada's best distributors, clarify the value proposition for our retail and professional customers and therefore enable us to maximize the value of our core businesses.

"Our strategic priorities are perfectly aligned with our three financial priorities and underscore our efforts to compete in today's marketplace and improve our operational and financial results."

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Thu, 06 Dec 2012 12:58:00 -0500 https://www.proactiveinvestors.com/companies/news/91754/rona-mulls-sale-of-non-core-assets--38313.html
<![CDATA[News - Rona shares rally after CEO departure ]]> https://www.proactiveinvestors.com/companies/news/91099/rona-shares-rally-after-ceo-departure-37141.html  

Canadian home improvement retailer Rona (TSE:RON) Friday announced that CEO Robert Dutton is stepping down after 35 years, just days after the company posted a sharp drop in third-quarter profit as a result of intense competition, a decline in same-store sales, inflation costs and restructuring efforts.

Shares of the company shot up 7.59% after the announcement, trading at $10.06 as at about 1:50 p.m. EDT.

Canada’s largest distributor and retailer of hardware, home renovation and gardening products said that executive VP and CFO Dominique Boies will act as CEO, while the firm Korn/Ferry International has been mandated to find a successor to Dutton.

Under Dutton, who joined Rona in 1977 and became president and CEO in 1992, the company expanded outside of Quebec. Rona said that under his leadership, consolidated sales increased from $450 million to over $4.8 billion and the chain grew from less than 500 affiliated stores to over 800 corporate, franchised and affiliated stores. 

The disappointing third quarter results were a result of a decline in the Canadian hardware-renovation industry as a whole, it added. 

Looking ahead, the company noted that the market is still in a period of "uncertainty and ambivalence”. 

Although conditions were favourable for renovation projects in the spring, the company said it has seen that consumers have returned to a cautious approach since the end of May. Housing starts have also slowed in recent months, particularly in Quebec, where Rona said it generates close to half its sales.

In July, the company rejected a $1.76 billion hostile takeover from U.S. rival Lowe’s Companies Inc. (NYSE:LOW), citing it was not in the best interest of stakeholders.

Rona told Lowe’s on July 26, both the board and a special committee unanimously determined its proposal was not in the best interests of the company and its stakeholders. 

According to industry observers, it would make sense for Lowe’s to acquire Rona to compete with U.S. giant Home Depot (NYSE:HD), which has 180 stores in Canada. 

 

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Fri, 09 Nov 2012 13:52:00 -0500 https://www.proactiveinvestors.com/companies/news/91099/rona-shares-rally-after-ceo-departure-37141.html
<![CDATA[News - Rona Q3 profit tanks on industry decline, heated competition ]]> https://www.proactiveinvestors.com/companies/news/91034/rona-q3-profit-tanks-on-industry-decline-heated-competition-37046.html  

Canadian home improvement retailer Rona (TSE:RON) said Wednesday that third-quarter profit dropped sharply as a result of intense competition, a decline in same-store sales, inflation costs and restructuring efforts.

Shares fell 3.55 per cent as at about 12 p.m. EDT, trading at $9.79.

Montreal-headquartered Rona said net income fell to $5.1 million or four cents per share, from $47.8 million or 36 cents per share a year earlier.

Excluding one-time items, profit was $33.1 million, or 27 cents per share, far lower than the 40 cents per share expected by analysts according to Thomson Reuters.

Revenue fell 0.8 per cent to $1.34 billion, compared with analysts’ estimates of $1.36 billion.

Rona said it saw its “progress interrupted” in a quarter marked by a decline in the Canadian hardware-renovation industry as a whole. 

The drop in sales, coupled with “more intense competition”, put pressure on gross margins, which fell to 26.9 per cent from 28 per cent a year earlier, the company noted.

Rona saw same-store sales across its network decrease one per cent. For the retail and commercial segment, same-store sales were down 1.8 per cent, while same-store distribution sales to all Rona dealers grew 3.8 per cent.

Looking ahead, the company noted that the market is still in a period of "uncertainty and ambivalence”. 

Although conditions were favourable for renovation projects in the spring, the company said it has seen that consumers have returned to a cautious approach since the end of May. Housing starts have also slowed in recent months, particularly in Quebec, where Rona said it generates close to half its sales.

“Given the highly promotional and competitive environment, the expected pressure on same-store sales and the impact of inflation on operating and administrative costs, new operational initiatives and efficiency measures are being implemented to address these elements and limit the decrease in profitability in coming quarters,” said Rona in a release Wednesday.

 

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Wed, 07 Nov 2012 12:04:00 -0500 https://www.proactiveinvestors.com/companies/news/91034/rona-q3-profit-tanks-on-industry-decline-heated-competition-37046.html
<![CDATA[News - Rona Q2 earnings hit by one-time items as it fights off Lowe's ]]> https://www.proactiveinvestors.com/companies/news/88495/rona-q2-earnings-hit-by-one-time-items-as-it-fights-off-lowes-33000.html Canadian home improvement retailer Rona (TSE:RON) said Wednesday that second-quarter profits, including the impact of usual items, was about $3 million lower in the second quarter than the same period last year.

Montreal-headquartered Rona, which is fending off an unwanted takeover proposal from Lowe's (NYSE:LOW), says its net profit for the quarter fell to $34.1 million. After adjustments to exclude $9.5 million in unusual items, Rona's profit rose to $43.6 million or 36 cents per share.

That's up from $37 million or 28 cents per share a year earlier but was a penny shy of analyst estimates compiled by Thomson Reuters.

Revenue was in line with estimates, rising by 3.4 per cent from a year ago to $1.4 billion.

Last week Rona rejected a $1.76 billion hostile takeover from U.S. rival Lowe’s, citing it was not in the best interest of stakeholders.
 
Lowe's is offering to acquire all Rona shares for $14.50 each, a 22 per cent premium on Rona's stock price the day prior to the offer.

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Wed, 08 Aug 2012 10:25:00 -0400 https://www.proactiveinvestors.com/companies/news/88495/rona-q2-earnings-hit-by-one-time-items-as-it-fights-off-lowes-33000.html
<![CDATA[News - Rona rejects Lowe’s $1.76 bln takeover bid ]]> https://www.proactiveinvestors.com/companies/news/88332/rona-rejects-lowes-176-bln-takeover-bid-32684.html Canadian home improvement retailer Rona (TSE:RON) Tuesday rejected a $1.76 billion hostile takeover from U.S. rival Lowe’s Companies Inc. (NYSE:LOW), citing it was not in the best interest of stakeholders.
 
Lowe's is offering to acquire all Rona shares for $14.50 each, a 22 per cent premium on Rona's closing stock price on Monday of $11.87.

The Montreal-based company, which is the largest Canadian distributer and retailer of hardware and gardening products, said that it should remain "focused on executing its business plan with a view to capturing significant opportunities it sees for its business."

"With a view to ensuring market transparency, Rona believes it is important for shareholders and other stakeholders to be made aware of these developments."

Rona received the unsolicited and non-binding acquisition proposal from Lowe’s on July 8. Rona’s board carefully considered Lowe’s $14.50 per share offer. Lowe’s indicated, in its July 8 proposal, it held a number of talks with Rona shareholders and proposed entering into a board-supported transaction.

At this point, Rona requested its American rival to confirm it would not pursue a transaction that was not supported by Rona’s board.

After receiving the proposal, Rona created a special committee made up of independent directors with the help of Scotiabank (TSE:BNS) and BMO Capital Markets (TSE:BMO) as financial advisors.

Rona told Lowe’s on July 26, both the board and special committee unanimously determined its proposal was not in the best interests of Rona and its stakeholders.

Meanwhile, on July 28, Lowe’s said it was "still its desire to proceed with a board-supported transaction” and that it “remained very interested in pursuing" a deal with Rona.

Lowe’s, headquartered in Mooresville, North Carolina, has about 16 stores and 2,800 employees. Its first Canadian stores opened in 2007. Rona has more than 30,000 employees operating a network of nearly 800 stores under several banners as well as 14 hardware and construction distribution centres.

According to industry observers, it would make sense for Lowe’s to acquire Rona to compete with U.S. giant Home Depot (NYSE:HD), which has 180 stores in Canada.

Rona, in early May, reported that it narrowed its fiscal first-quarter loss but sales from established stores declined amid lower margins. Net loss was $13.3 million, or 10 cents per share, compared to a $17.6 million, or 13 cents a share loss, last year.

Sales, however, edged up 1.8 percent to $934.9 million compared to $918.2 million a year earlier.

The company attributes the increase to higher distribution sales and its expansion of the commercial and professional market division.

Same-store sales fell 0.8 per cent. Sales were down in January, but rose in February and March, the company said.

Rona's gross margins eased to 28.58 percent from 28.98 percent a year earlier.

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Tue, 31 Jul 2012 08:48:00 -0400 https://www.proactiveinvestors.com/companies/news/88332/rona-rejects-lowes-176-bln-takeover-bid-32684.html
<![CDATA[News - Rona narrows Q1 loss, same store sales edge down ]]> https://www.proactiveinvestors.com/companies/news/86028/rona-narrows-q1-loss-same-store-sales-edge-down-28871.html Home improvement retailer Rona (TSE:RON) narrowed its fiscal first-quarter loss Wednesday, though the company reported sales from established stores declined amid lower margins.

The retailer narrowed its net loss to $13.3 million, or 10 cents per share, compared with a year-ago loss of $17.6 million, or 13 cents a share.

For the first three months of the year, the company said sales edged up 1.8 percent to $934.9 million compared to $918.2 million a year earlier.

Rona was expected to lose nine cents per share on $917-million revenue, according to analysts polled by Thomson Reuters.

The company attributes the increase to higher distribution sales and its expansion of the commercial and professional market division.

Same-store sales fell 0.8 percent. Sales were down in January, but rose in February and March, the company said.

Comparable sales are considered to be a key measure to gauge a retailer’s financial health as it excludes sales from stores that recently opened or closed during the year.

The company said that same-store sales for stores that specialize in building materials were up 4.2 percent for the first quarter, despite a slow start to the year in this segment.

This demand for building materials bodes well for the coming months, because it usually signals the start of bigger construction and renovation projects, Rona said.

"Despite the trend reversal in same-store sales since the end of fiscal 2011, it is clear that consumers are still cautious," chief executive Robert Dutton said in a statement.

"However, we are encouraged by the early start to the season in our industry and are counting on our effective marketing, merchandising and in-store service programs."

Gross margins eased to 28.58 percent from 28.98 percent a year earlier.

Rona’s board of directors declared a quarterly dividend of 32.9 cents per Class A share, which will be paid to shareholders on July 2.

The Quebec-based company is the largest Canadian distributor and retailer of hardware and home renovation products. Rona supplies nearly 1,500 sales outlets and has about 30,000 employees.

It operates a network of nearly 800 corporate, franchise and affiliate stores under several banners, including a network of 14 hardware and construction distribution centres.

Shares of the company slipped 14 cents, or 1.36 percent, falling to $10.17 each on the Toronto Stock Exchange.

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Wed, 09 May 2012 13:02:00 -0400 https://www.proactiveinvestors.com/companies/news/86028/rona-narrows-q1-loss-same-store-sales-edge-down-28871.html
<![CDATA[News - Rona posts Q4 net loss on special charges ]]> https://www.proactiveinvestors.com/companies/news/83943/rona-posts-q4-net-loss-on-special-charges-25348.html Canadian home improvement retailer Rona (TSE:RON) Thursday posted a loss of more than $151 million in the fourth quarter as the company took restructuring charges to reflect weak markets and a plan to refocus the company.

The Montreal-based company said the loss compared with a profit of about $20 million a year earlier.

Quarterly sales rose 2.6 percent to $1.17 billion, though same store sales dropped at its outlets as the company dealt with poor weather, tough competition from other retailers and a slowing economy.

The increase in total sales was due to acquisitions in the retail, commercial and professional and distribution segments, and to the opening of new stores in the retail segment and new outlets in the commercial and professional segment, Rona said.

In the quarter that ended December 25, Rona saw a 2.3 percent decrease in same-store sales for its corporate and franchise stores.

The drop in same-store sales was due to consumer caution in their discretionary spending and the decline in residential housing starts, the company said.

Ontario, Quebec and the Atlantic provinces were less affected by the decline in sales, and Western Canada was more affected, particularly in British Columbia, where a referendum on the sale-tax harmonization delayed major construction projects, Rona added.

The company took $187 million in restructuring charges in the quarter for amortization, depreciation, asset and goodwill impairments as well as nearly $10 million for bond repurchases.

Rona president and chief executive officer, Robert Dutton, said: "After a tougher start to the year than our industry expected, we took major steps to improve efficiency and optimize our capital structure during the second half of 2011.

"These initiatives have already enabled us to cut our selling and administrative expense for our existing operations by more than $25 million, or close to 5 percent, and will result in recurring annual and substantial interest savings of close to $10 million in coming years.

"In the current market environment, operational efficiency and optimal utilization of capital are more vital than ever. We have already taken steps to address these areas and will continue such efforts.

"However, we will also be concentrating on our different clienteles to ensure we offer them products and services that are even better suited to their respective needs."

Rona's full year results showed a loss of $78.4 million, reversing a $137.4 million profit in 2010.

The company said it is refocusing its marketing strategy, introducing a new website and digital sales initiative and streamlining to improve its financial performance going forward.

Rona is the largest Canadian retailer and distributor of hardware, home renovation and gardening products. Its 700 stores employ nearly 30,000 employees across Canada.

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Thu, 23 Feb 2012 09:49:00 -0500 https://www.proactiveinvestors.com/companies/news/83943/rona-posts-q4-net-loss-on-special-charges-25348.html
<![CDATA[News - Rona posts higher Q3 profit amid 5.5% same store sales drop ]]> https://www.proactiveinvestors.com/companies/news/81285/rona-posts-higher-q3-profit-amid-55-same-store-sales-drop-20800.html Rona (TSE:RON)(TSE:RON.PR.A), the largest Canadian distributor and retailer of hardware, renovation and gardening products, said Wednesday third quarter net income increased over four percent despite economic uncertainty weighing on consumers, but still offered a weak outlook.

For the three months ending September 25, the company reported a profit of $50.1 million, or 36 cents per share, compared to $48.0 million, or 36 cents per share, a year ago.

Revenues amounted to $1.35 billion, up 2.1 percent from a year ago, as acquisitions and new corporate stores added $127 million. However, this was offset by a 5.1 percent drop in same store sales, due to consumers' cautious approach to discretionary spending, and the decline in residential housing starts. Same store sales are a key measure to gauge a retailer's financial health, as they exclude sales of stores recently opened or closed.

Rona was expected to earn, on average, 34 cents per share in the third quarter on $1.35 billion in revenues, according to Thomson Reuters.

Ontario and the Atlantic provinces were least affected by the drop in sales, while Western Canada, and particularly British Columbia, was most affected, the company said.

During the quarter, sales in the seasonal, gardening and treated wood categories were relatively stable, reflecting the start of projects delayed by poor weather in the first half of the year.

However, categories related to bigger renovation projects, such as forest products, construction materials, plumbing, electrical and floor-coverings had stronger declines during the latest period, Rona said.

The commercial and professional market division saw revenues, including acquisitions, increase more than 35 percent.

"Given the fragile nature of Canadian consumer confidence and their cautious approach to major renovation projects, we expect to see continued downward pressure on same-store sales as a whole over the next few quarters, particularly in major urban centres where growth in supply has exceeded demand, leading to sharper competition," said president and CEO, Robert Dutton.

"In this situation, we will continue to implement sales development and efficiency improvement measures, which have already paid off. These initiatives will improve customer loyalty and gross profits, and will reduce our organic selling and administrative expenses by the end of the year, as we indicated when we released our second-quarter results."

The company said it is still aiming for fourth quarter earnings per share to remain relatively similar to a year ago, despite downward pressure on same store sales, which could decline to a level similar to that of the latest quarter.

Rona also said it does not see the economic context changing much in the next year, and said  that a set of initiatives to mitigate the pressure on sales will be announced with the release of fourth quarter results.

Shares of the company were down 2.2 percent Wednesday, trading at $9.35 as of 11:34am ET.

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Wed, 09 Nov 2011 11:57:00 -0500 https://www.proactiveinvestors.com/companies/news/81285/rona-posts-higher-q3-profit-amid-55-same-store-sales-drop-20800.html
<![CDATA[News - Rona misses Street estimates for Q2 ]]> https://www.proactiveinvestors.com/companies/news/79084/rona-misses-street-estimates-for-q2-17111.html Home improvement retailer Rona (TSE:RON) reported second-quarter profit dipped 40%, hurt by poor weather and cash-strapped consumers, it said, sending its stock down.

The Quebec-based company’s shares dropped 4.85% to $10.20 late Wednesday on the Toronto Stock Exchange.

For the three months ending June 26, revenue fell 2.4% to $1.37 billion.

The company said the decrease stems from a 9.6% drop in same-store sales – a key indicator to a company’s financial health – including average deflation of 0.8% in forest-product prices.

Rona said the slowdown in same-store sales was partially offset by acquisitions, which added $98.6 million in sales to its consolidated revenues, for growth of 7.0%.

Net income came in at $37 million, or 28 cents per diluted share, versus $66.3 million, or 51 cents per diluted share, a year ago.

Wall Street forecasted 40 cents a share of earnings, on revenue of $1.42 billion.

Rona said that the Ontario region was less affected by lower sales, whereas in Western Canada, particularly in British Columbia, the decline had a greater impact.

Revenue in the kitchen and install services categories were relatively solid for the quarter and rose sharply in July, it added.

Sales of lumber and construction materials were weak since the start of the year and only began to strengthen in early July.

"Although the pressure on sales, and the promotional activities demanded by the context affected our earnings, we have managed the situation very prudently,” said CEO, Robert Dutton.

The company said it reduced same-store retail and distribution inventories by $15 million, while also lowering its same-store administrative expenses by 10%.

Despite Rona’s streamlining of operations, it expects continued pressure on same-store sales for the rest of the year, it said.

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Wed, 10 Aug 2011 15:26:00 -0400 https://www.proactiveinvestors.com/companies/news/79084/rona-misses-street-estimates-for-q2-17111.html