Thursday, June 28, 2012

EMP.A - <span class="simulate_din_font">Empire Company Reports Fourth Quarter and Full Year Results</span> (CAD 0.24)

Company: Empire Company Ltd. Cl.A Nv
Stock Name: EMP.A
Amount: CAD 0.24
Announcement Date: 28/06/2012
Record Date: 11/07/2012

Dividend Detail:




INCREASES DIVIDEND FOR THE 17TH CONSECUTIVE YEAR



STELLARTON, NS, June 28, 2012 /CNW/ - Empire Company Limited (TSX:
EMP.A) today announced financial results for its fourth quarter and
fiscal year ended May 5, 2012. For the 13 weeks ended May 5, 2012, the
Company recorded net earnings, net of minority interest, of $92.1
million
($1.35 per share) compared to $82.5 million ($1.21 per share)
for the 14 weeks ended May 7, 2011.



Adjusted net earnings, net of minority interest, for the 13 weeks ended
May 5, 2012 were $89.5 million ($1.32 per share) compared to $81.3
million
($1.20 per share) recorded for the 14 weeks ended May 7, 2011.
The fourth quarter last year contained an additional week of operations
for wholly-owned Sobeys Inc. which served to positively impact last
year's sales by $313.6 million and net earnings by approximately $6.3
million
. Excluding the net earnings impact of the additional week of
operations in the fourth quarter last year, adjusted net earnings, net
of minority interest, increased $14.5 million or 19.3 percent.



Fourth Quarter Highlights (13 weeks versus 14 weeks last year)




  • Sales increased $106.6 million or 2.8 percent after adjusting for the
    impact of the additional week of operations last year and the
    acquisition of 236 retail gas locations and related convenience store
    operations in the fourth quarter of fiscal 2012.



  • Sobeys' same-store sales increased 0.7 percent.


  • Operating income (1) of $136.4 million versus $122.4 million last year.


  • Net earnings, net of minority interest, of $92.1 million ($1.35 per
    share) compared to $82.5 million ($1.21 per share) last year.



  • Adjusted net earnings (2), net of minority interest, of $89.5 million ($1.32 per share) versus
    $81.3 million ($1.20 per share) last year.



  • Funded debt to total capital ratio of 25.0 percent compared to 26.7
    percent last year.
















_________________

(1)

Certain balances have been reclassified for changes to comparative
figures (see Note 20 to the Company's fourth quarter unaudited
consolidated financial statements).


(2)

Excludes items which are considered not indicative of underlying
business operating performance.








Net earnings, net of minority interest, for the 52 weeks ended May 5,
2012
were $339.4 million ($4.99 per share) compared to $400.6 million
($5.87 per share) recorded for the 53 weeks last year. Included in net
earnings last year was a net gain on the sale of a 27.5 percent
ownership interest in Wajax Income Fund ("Wajax") for $76.2 million.



Adjusted net earnings, net of minority interest, for the 52 weeks ended
May 5, 2012 were $320.6 million ($4.71 per share) compared to $303.2
million
($4.45 per share) for the 53 weeks ended May 7, 2011. Excluding
the impact of the additional week of operations last year, adjusted net
earnings, net of minority interest, increased $23.7 million or 8.0
percent.



Fiscal 2012 Highlights (52 weeks versus 53 weeks last year)




  • Sales increased $474.9 million or 3.0 percent after adjusting for the
    impact of the additional week of operations last year and the
    acquisition of 236 retail gas locations and related convenience store
    operations in the fourth quarter of fiscal 2012.



  • Sobeys' same-store sales increased 1.4 percent.


  • Operating income (1) of $534.3 million versus $525.7 million last year.


  • Net earnings, net of minority interest, of $339.4 million ($4.99 per
    share) compared to $400.6 million ($5.87 per share) last year. Net
    earnings last year included a net gain on the sale of a 27.5 percent
    ownership interest in Wajax of $76.2 million.



  • Adjusted net earnings (2), net of minority interest, of $320.6 million ($4.71 per share) versus
    $303.2 million ($4.45 per share) last year.
















_________________

(1)

Certain balances have been reclassified for changes to comparative
figures (see Note 20 to the Company's fourth quarter unaudited
consolidated financial statements).


(2)

Excludes items which are considered not indicative of underlying
business operating performance.








"We are clearly pleased with our fourth quarter and fiscal 2012
operating performance as we continue to profitably grow our food retail
business and our investments and other operations in a very competitive
environment," stated Paul Sobey, President and CEO, Empire Company
Limited.



Mr. Sobey continued, "On behalf of all our employees, franchisees and
affiliates, along with the Board and the Sobey family, we extend our
heartfelt appreciation and best wishes to Bill McEwan, who will step down as President and CEO of Sobeys Inc. on June 29,
2012
, following more than 11 years of truly inspirational leadership."



"Marc Poulin, currently President, Sobeys IGA Operations will replace
Bill as the newly appointed President and CEO of Sobeys Inc. It is
indeed a celebration of the depth of talent we have in the organization
that we have such a highly qualified and proven food retailer to lead
Sobeys' food-focused strategy forward. We are confident that Marc's
knowledge of the industry and his proven leadership will serve Sobeys
well in the years ahead," said Paul Sobey.



"Consistent with our growth and the improvement in our financial
position, we are pleased to announce an increase in Empire's quarterly
dividend per share, from 22.5 cents per share to 24.0 cents per share
per quarter, a 6.7 percent increase. This marks the seventeenth
consecutive year of Empire dividend increases."



Dividend Declaration



The Board of Directors declared a quarterly dividend of 24.0 cents per
share on both the Non-Voting Class A shares and the Class B common
shares that will be payable on July 31, 2012 to shareholders of record
on July 13, 2012. These dividends are eligible dividends as defined for
the purposes of the Income Tax Act (Canada) and applicable provincial
legislation and, therefore, qualify for the favourable tax treatment
applicable to such dividends.



With the transition to International Financial Reporting Standards
("IFRS" or "GAAP") effective the first quarter of fiscal 2012, the
comparative figures in the financial results table below for the 14 and
53 weeks ended May 7, 2011 have been restated to conform with IFRS.



CONSOLIDATED FINANCIAL RESULTS























































































































































































































��

��

��

��

��

��

��

��

��

��

��

��

��

13 Weeks Ended

��

14 Weeks Ended

��

��

��

52 Weeks Ended

��

53 Weeks Ended

��

��

($ in millions, except per share amounts)

��

May 5, 2012

��

��

May 7, 2011

��

��

($) Change

��

��

May 5, 2012

��

��

May 7, 2011

��

��

($) Change

Sales

$

4,073.8

��

$

4,149.8

��

$

(76.0)

��

$

16,249.1

��

$

15,956.8

��

$

292.3

EBITDA (1) (2)

��

224.2

��

��

209.8

��

��

14.4

��

��

876.6

��

��

863.0

��

��

13.6

Operating income (1) (2)

��

136.4

��

��

122.4

��

��

14.0

��

��

534.3

��

��

525.7

��

��

8.6

Net earnings, net of minority interest (3)

��

92.1

��

��

82.5

��

��

9.6

��

��

339.4

��

��

400.6

��

��

(61.2)

Adjusted net earnings, net of minority interest (4)

��

89.5

��

��

81.3

��

��

8.2

��

��

320.6

��

��

303.2

��

��

17.4

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

EPS fully diluted

$

1.35

��

$

1.21

��

$

0.14

��

$

4.99

��

$

5.87

��

$

(0.88)

Adjusted EPS (fully diluted) (4)

$

1.32

��

$

1.20

��

$

0.12

��

$

4.71

��

$

4.45

��

$

0.26



















(1)

See Non-GAAP Financial Measures contained in this news release.

(2)

Certain balances have been reclassified for changes to comparative
figures (see Note 20 to the Company's fourth quarter unaudited
consolidated financial statements).


(3)

Net earnings, net of minority interest, for the 53 weeks ended May 7,
2011
includes a net gain on the sale of a 27.5 percent ownership
interest in Wajax of $76.2 million.


(4)

Excludes items which are considered not indicative of underlying
business operating performance.








Sales



Consolidated sales for the 13 weeks ended May 5, 2012 were $4.07 billion
compared to $4.15 billion for the 14 weeks ended May 7, 2011. Adjusting
for the additional week of operations at Sobeys last year, which
impacted sales by $313.6 million, and for the impact of sales relating
to the acquisition of 236 retail gas locations and related convenience
store operations in the fourth quarter this year, which amounted to
$131.0 million, sales increased $106.6 million or 2.8 percent.



For the 52 weeks ended May 5, 2012, consolidated sales were $16.25
billion
compared to $15.96 billion reported for the 53 weeks ended May
7, 2011
. Adjusting for the additional week of operations at Sobeys last
year and for the impact of sales relating to the acquisition of 236
retail gas locations and related convenience store operations in the
fourth quarter this year, as mentioned, sales increased $474.9 million
or 3.0 percent.



EBITDA



Consolidated EBITDA in the fourth quarter was $224.2 million compared to
$209.8 million in the fourth quarter last year. For the fiscal year
ended May 5, 2012, consolidated EBITDA was $876.6 million compared to
$863.0 million last year. Adjusting EBITDA for items which are
considered not indicative of underlying business operating performance,
as outlined in the following table, resulted in fourth quarter adjusted
EBITDA of $221.5 million compared to $208.4 million in the fourth
quarter last year and annual adjusted EBITDA of $853.2 million compared
to $837.7 million last fiscal year.












































































































































































��

��

��

��

��

��

��

��

��

13 Weeks Ended

��

14 Weeks Ended

��

52 Weeks Ended

��

53 Weeks Ended

($ in millions)

��

May 5, 2012

��

��

May 7, 2011

��

��

May 5, 2012

��

��

May 7, 2011

EBITDA (consolidated) (1)

$

224.2

��

$

209.8

��

$

876.6

��

$

863.0

Adjustments:

��

��

��

��

��

��

��

��

��

��

��

��

Gain on disposal of assets

��

(5.1)

��

��

(0.5)

��

��

(22.2)

��

��

(19.6)

��

Sobeys' severance and store closure costs

��

-

��

��

0.2

��

��

-

��

��

27.7

��

Post-retirement benefit amendment

��

-

��

��

-

��

��

-

��

��

(28.5)

��

Sobeys' organizational realignment costs

��

2.8

��

��

-

��

��

9.2

��

��

-

��

Dilution gains

��

(0.4)

��

��

(1.1)

��

��

(10.4)

��

��

(4.9)

��

��

(2.7)

��

��

(1.4)

��

��

(23.4)

��

��

(25.3)

Adjusted EBITDA

$

221.5

��

$

208.4

��

$

853.2

��

$

837.7







(1)

Certain balances have been reclassified for changes to comparative
figures (see Note 20 to the Company's fourth quarter unaudited
consolidated financial statements).








Operating Income



Consolidated operating income in the fourth quarter was $136.4 million,
an increase of $14.0 million from the $122.4 million recorded in the
fourth quarter last year. For the 52 weeks ended May 5, 2012,
consolidated operating income was $534.3 million, an increase of $8.6
million
from the $525.7 million recorded last year. Adjusting operating
income for items which are considered not indicative of underlying
business operating performance, as outlined in the previous table for
EBITDA, resulted in quarterly adjusted consolidated operating income of
$133.7 million compared to $121.0 million in the fourth quarter last
year. For the full year, adjusted consolidated operating income of
$510.9 million compared to $500.4 million last fiscal year.



Net Earnings



Consolidated net earnings, net of minority interest, in the fourth
quarter equalled $92.1 million ($1.35 per share) compared to $82.5
million
($1.21 per share) in the fourth quarter last year. For fiscal
2012, consolidated net earnings, net of minority interest, equalled
$339.4 million ($4.99 per share) compared to $400.6 million ($5.87 per
share) last year.



Fiscal 2011 net earnings were favourably impacted by an additional week
of operating results by Sobeys, as mentioned. Management calculates the
additional week of operations to have positively impacted fiscal 2011
net earnings, net of minority interest, by approximately $6.3 million.



The following table presents Empire's segmented net earnings, net of
minority interest, for the 13 and 52 weeks ended May 5, 2012 compared
to the 14 and 53 weeks ended May 7, 2011.



















































































































��

��

��

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��

��

��

��

��

��

��

��

��

13 Weeks Ended

��

14 Weeks Ended

��

��

��

52 Weeks Ended

��

53 Weeks Ended

��

��

($ in millions, net of tax)

��

May 5, 2012

��

��

May 7, 2011

��

��

($) Change

��

��

May 5, 2012

��

��

May 7, 2011

��

��

($) Change

Food retailing

$

81.2

��

$

76.0

��

$

5.2

��

$

304.1

��

$

297.3

��

$

6.8

Investments and other operations��

��

10.9

��

��

6.5

��

��

4.4

��

��

35.3

��

��

103.3

(1)

��

(68.0)

Consolidated

$

92.1

��

$

82.5

��

$

9.6

��

$

339.4

��

$

400.6

��

$

(61.2)







(1)

Includes the net gain of $76.2 million from the sale of a 27.5 percent
ownership interest in Wajax.








Adjusted Net Earnings



The table below adjusts reported net earnings, net of minority interest,
for items which are considered not indicative of underlying business
operating performance. Excluding the impact of the adjustments noted in
the table, Empire recorded adjusted net earnings, net of minority
interest, of $89.5 million ($1.32 per share) for the 13 weeks ended May
5, 2012
compared to $81.3 million ($1.20 per share) recorded in the
fourth quarter last year. For fiscal 2012, adjusted net earnings, net
of minority interest, were $320.6 million ($4.71 per share) compared to
$303.2 million ($4.45 per share) last year.



After adjusting for the additional week of operations at Sobeys in
fiscal 2011, adjusted net earnings, net of minority interest, on a
comparable 13 and 52 week basis in fiscal 2011 would have been $75.0
million
($1.10 per share) and $296.9 million ($4.35 per share),
respectively.

















































































































































































































































































��

��

��

��

��

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��

��

13 Weeks Ended

��

14 Weeks Ended

��

52 Weeks Ended

��

53 Weeks Ended

($ in millions, except per share amounts, net of tax)

��

May 5, 2012

��

��

May 7, 2011

��

��

May 5, 2012

��

��

May 7, 2011

Net earnings, net of minority interest

$

92.1

��

$

82.5

��

$

339.4

��

$

400.6

Adjustments:

��

��

��

��

��

��

��

��

��

��

��

��

Gain on sale of Wajax

��

-

��

��

-

��

��

-

��

��

(76.2)

��

Gain on disposal of assets

��

(4.3)

��

��

(0.5)

��

��

(17.9)

��

��

(16.4)

��

Sobeys' severance and store closure costs

��

-

��

��

0.1

��

��

-

��

��

20.0

��

Post-retirement benefit amendment

��

-

��

��

-

��

��

-

��

��

(21.3)

��

Sobeys' organizational realignment costs

��

2.0

��

��

-

��

��

6.4

��

��

-

��

Dilution gains

��

(0.3)

��

��

(0.8)

��

��

(7.3)

��

��

(3.5)

��

��

(2.6)

��

��

(1.2)

��

��

(18.8)

��

��

(97.4)

Adjusted net earnings, net of minority interest

$

89.5

��

$

81.3

��

��$

320.6

��

$

303.2

��

��

��

��

��

��

��

��

��

��

��

��

Adjusted net earnings, net of minority interest, by division:

��

��

��

��

��

��

��

��

��

��

��

��

Food retailing

$

79.1

��

$

75.5

��

$

292.5

��

$

280.8

��

Investments and other operations

��

10.4

��

��

5.8

��

��

28.1

��

��

22.4

Adjusted net earnings, net of minority interest

$

89.5

��

$

81.3

��

$

320.6

��

$

303.2

Adjusted EPS (fully diluted)

$

1.32

��

$

1.20

��

$

4.71

��

$

4.45







With the transition to IFRS, the Company now has two reportable
operating segments:



















1)

Food Retailing, which consists of wholly-owned Sobeys Inc. ("Sobeys"), and

��

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2)

Investments and Other Operations, the principal components of which include investments in Crombie REIT
(44.3 percent ownership interest; 40.7 percent fully diluted), an
approximate 40.0 percent ownership interest in Genstar Development
Partnership ("Genstar"), as well as wholly-owned ETL Canada Holdings
Limited ("Empire Theatres").







FOOD RETAILING



The following table presents the food retailing segment's contribution
to Empire's consolidated sales, EBITDA, adjusted EBITDA, operating
income, adjusted operating income, net earnings, net of minority
interest, and adjusted net earnings, net of minority interest.



































































































































































































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��

��

��

��

��

13 Weeks Ended

��

14 Weeks Ended

��

��

��

52 Weeks Ended

��

53 Weeks Ended

��

��

($ in millions)

��

May 5, 2012

��

��

May 7, 2011

��

��

($) Change

��

��

May 5, 2012

��

��

May 7, 2011

��

��

($) Change

Sales

$

4,023.2

��

$

4,102.6

��

$

(79.4)

��

$

16,044.6

��

$

15,756.3

��

$

288.3

EBITDA (1)

��

203.7

��

��

193.5

��

��

10.2

��

��

801.8

��

��

793.6

��

��

8.2

Adjusted EBITDA (2)

��

201.6

��

��

193.1

��

��

8.5

��

��

788.6

��

��

775.1

��

��

13.5

Operating income (1)

��

120.0

��

��

111.3

��

��

8.7

��

��

475.8

��

��

473.4

��

��

2.4

Adjusted operating income (2)

��

117.9

��

��

110.9

��

��

7.0

��

��

462.6

��

��

454.9

��

��

7.7

Net earnings, net of minority interest

��

81.2

��

��

76.0

��

��

5.2

��

��

304.1

��

��

297.3

��

��

6.8

Adjusted net earnings, net of minority interest (2)

��

79.1

��

��

75.5

��

��

3.6

��

��

292.5

��

��

280.8

��

��

11.7













(1)

Certain balances have been reclassified for changes to comparative
figures (see Note 20 to the Company's fourth quarter unaudited
consolidated financial statements).


(2)

Excludes items which are considered not indicative of underlying
business operating performance.








Sales



Empire's food retailing division achieved sales of $4.02 billion in the
fourth quarter of fiscal 2012. After adjusting for the additional week
of operations last year and the impact of the acquisition of 236 retail
gas locations and related convenience store operations in the fourth
quarter of fiscal 2012, sales were up $103.2 million or 2.7 percent.
During the fourth quarter, same-store sales increased 0.7 percent.



For the 52 weeks ended May 5, 2012, Sobeys achieved sales of $16.04
billion
. After adjusting for the additional week of operations last
year and the impact of the acquisition of 236 retail gas locations and
related convenience store operations in the fourth quarter of fiscal
2012, sales were up $470.9 million or 3.0 percent. During the fiscal
year, same-store sales increased 1.4 percent.



EBITDA



Sobeys contributed EBITDA to Empire in the fourth quarter of $203.7
million
compared to $193.5 million last year. Sobeys recorded gains on
the disposal of assets in the current quarter of $4.9 million (fiscal
2011 - $0.5 million). Adjusting for this and other items which are
considered not indicative of underlying business operating performance,
as outlined in the following table, resulted in an adjusted EBITDA
contribution from Sobeys to Empire of $201.6 million in the fourth
quarter compared to a $193.1 million contribution in the fourth quarter
last year.



For fiscal 2012, Sobeys contributed EBITDA to Empire of $801.8 million
compared to $793.6 million last year. Included in EBITDA for fiscal
2012 were organizational realignment costs of $9.2 million (fiscal 2011
- $nil) and gains on the disposal of assets of $22.0 million (fiscal
2011 - $18.0 million). Adjusting for these and other items which are
considered not indicative of underlying business operating performance,
as outlined in the following table, resulted in an adjusted EBITDA
contribution from Sobeys to Empire of $788.6 million for fiscal 2012
compared to a $775.1 million contribution last year.












































































































































































��

��

��

��

��

��

��

��

��

13 Weeks Ended

��

14 Weeks Ended

��

52 Weeks Ended

��

53 Weeks Ended

($ in millions)

��

May 5, 2012

��

��

May 7, 2011

��

��

May 5, 2012

��

��

May 7, 2011

EBITDA (contributed by Sobeys) (1)

$

203.7

��

$

193.5

��

$

801.8

��

$

793.6

Adjustments:

��

��

��

��

��

��

��

��

��

��

��

��

Gain on disposal of assets

��

(4.9)

��

��

(0.5)

��

��

(22.0)

��

��

(18.0)

��

Sobeys' severance and store closure costs

��

-

��

��

0.2

��

��

-

��

��

27.7

��

Post-retirement benefit amendment

��

-

��

��

-

��

��

-

��

��

(28.0)

��

Sobeys' organizational realignment costs

��

2.8

��

��

-

��

��

9.2

��

��

-

��

Dilution gains

��

-

��

��

(0.1)

��

��

(0.4)

��

��

(0.2)

��

��

(2.1)

��

��

(0.4)

��

��

(13.2)

��

��

(18.5)

Adjusted EBITDA

$

201.6

��

$

193.1

��

$

788.6

��

$

775.1







(1)

Certain balances have been reclassified for changes to comparative
figures (see Note 20 to the Company's fourth quarter unaudited
consolidated financial statements).








Operating Income



Sobeys' operating income contribution to Empire in the fourth quarter
was $120.0 million compared to $111.3 million in the same quarter last
year, an increase of $8.7 million or 7.8 percent. Operating margin for
the fourth quarter equalled 2.98 percent versus 2.71 percent in the
same period last year.



For the 52 weeks ended May 5, 2012, Sobeys' operating income
contribution to Empire was $475.8 million compared to $473.4 million
last year, an increase of $2.4 million or 0.5 percent. Operating margin
for fiscal 2012 equalled 2.97 percent versus 3.00 percent in the same
period last year.



Adjusting Sobeys' operating income for items which are considered not
indicative of underlying business operating performance, as outlined in
the previous table for EBITDA, resulted in adjusted operating income
contribution of $117.9 million (2.93 percent of sales) in the fourth
quarter compared to $110.9 million (2.70 percent of sales) in the
fourth quarter last year. On an annual basis, adjusted operating income
contribution was $462.6 million (2.88 percent of sales) for fiscal 2012
compared to $454.9 million (2.89 percent of sales) last year.



Net Earnings



During the fourth quarter of fiscal 2012, Sobeys contributed net
earnings, net of minority interest, to Empire of $81.2 million versus
$76.0 million in the fourth quarter last year, an increase of $5.2
million
or 6.8 percent. Sobeys contributed adjusted net earnings, net
of minority interest, to Empire of $79.1 million versus $75.5 million
in the fourth quarter last year, an increase of $3.6 million or 4.8
percent.



For the 52 weeks ended May 5, 2012, Sobeys contributed net earnings, net
of minority interest, of $304.1 million to Empire, an increase of $6.8
million
or 2.3 percent from the $297.3 million recorded in the prior
year. Sobeys contributed adjusted net earnings, net of minority
interest, to Empire of $292.5 million versus $280.8 million last year,
an increase of $11.7 million or 4.2 percent.



Adjusting for the additional week of operations at Sobeys in fiscal
2011, adjusted net earnings, net of minority interest, on a comparable
13 and 52 week basis in fiscal 2011 would have been $69.2 million and
$274.5 million, respectively.



INVESTMENTS AND OTHER OPERATIONS



The table below presents the investments and other operations segment's
contribution to Empire's consolidated sales, EBITDA, adjusted EBITDA,
operating income, net earnings and adjusted net earnings.























































































































































































































































































��

��

��

��

��

��

��

��

��

��

��

��

��

13 Weeks Ended

��

14 Weeks Ended

��

��

��

52 Weeks Ended

��

53 Weeks Ended

��

��

($ in millions)

��

May 5, 2012

��

��

May 7, 2011

��

��

($) Change

��

��

May 5, 2012

��

��

May 7, 2011

��

��

($) Change

Sales

$

50.6

��

$

47.2

��

$

3.4

��

$

204.5

��

$

200.5

��

$

4.0

EBITDA

��

20.5

��

��

16.3

��

��

4.2

��

��

74.8

��

��

69.4

��

��

5.4

Adjusted EBITDA (1)

��

19.9

��

��

15.3

��

��

4.6

��

��

64.6

��

��

62.6

��

��

2.0

Operating income

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Crombie REIT (2)

��

4.9

��

��

5.1

��

��

(0.2)

��

��

19.7

��

��

18.4

��

��

1.3

��

Real estate partnerships (3)

��

13.2

��

��

17.7

��

��

(4.5)

��

��

30.0

��

��

32.1

��

��

(2.1)

��

Wajax

��

-

��

��

-

��

��

-

��

��

-

��

��

8.6

��

��

(8.6)

��

Other operations, net of corporate expenses (4)

��

(1.7)

��

��

(11.7)

��

��

10.0

��

��

8.8

��

��

(6.8)

��

��

15.6

��

��

16.4

��

��

11.1

��

��

5.3

��

��

58.5

��

��

52.3

��

��

6.2

Net earnings (5)

��

10.9

��

��

6.5

��

��

4.4

��

��

35.3

��

��

103.3

��

��

(68.0)

Adjusted net earnings (1)

��

10.4

��

��

5.8

��

��

4.6

��

��

28.1

��

��

22.4

��

��

5.7























(1)

Excludes items which are considered not indicative of underlying
business operating performance.


(2)

44.3 percent (40.7 percent fully diluted) equity accounted interest in
Crombie REIT (May 7, 2011 - 46.4 percent interest).


(3)

40.7 percent equity accounted interest in Genstar Development
Partnership, 45.9 percent equity accounted interest in Genstar
Development Partnership II, 42.1 percent equity accounted interest in
each of GDC Investments 4, L.P., GDC Investments 5, L.P. and GDC
Investments 6, L.P., and 42.5 percent equity accounted interest in GDC
Investments 7, L.P. (collectively referred to as "Genstar").


(4)

Other operations (net of corporate expenses) operating income for the 13
and 52 weeks ended May 5, 2012 includes an impairment charge related to
an investment of $1.1 million (14 and 53 weeks ended May 7, 2011 - $9.6
million
). The fourth quarter of fiscal 2012 includes dilution gains of
$0.4 million (fiscal - $1.0 million) and a gain on the disposal of
assets of $0.2 million (fiscal 2011 - $nil). Fiscal 2012 includes
dilution gains of $10.0 million (fiscal 2011 - $4.7 million), a gain on
the disposal of assets of $0.2 million (fiscal 2011 - $1.6 million) and
a post-retirement benefit amendment of $nil (fiscal 2011 - $0.5
million
).


(5)

Net earnings for the 53 weeks ended May 7, 2011 includes a net gain on
the sale of a 27.5 percent ownership interest in Wajax of $76.2
million
.








Sales



Investments and other operations' sales, primarily generated by Empire
Theatres, equalled $50.6 million in the fourth quarter ended May 5,
2012
versus $47.2 million in the fourth quarter last year, a $3.4
million
or 7.2 percent increase. For fiscal 2012, investments and other
operations reported sales of $204.5 million, an increase of $4.0
million
or 2.0 percent from the $200.5 million reported last year.



EBITDA



Investments and other operations contributed EBITDA to Empire in the
fourth quarter of $20.5 million compared to $16.3 million last year.
Adjusting for items which are considered not indicative of underlying
business operating performance, as outlined in the following table,
resulted in adjusted EBITDA from investments and other operations of
$19.9 million compared to $15.3 million last year.



For the 52 weeks ended May 5, 2012, investments and other operations
contributed EBITDA to Empire of $74.8 million compared to $69.4 million
last year. Fiscal 2012 EBITDA from investments and other operations
included $10.0 million (fiscal 2011 - $4.7 million) in dilution gains
resulting from a change in the ownership level in Crombie REIT.
Adjusting for this and other items which are considered not indicative
of underlying business operating performance resulted in adjusted
EBITDA from investments and other operations of $64.6 million compared
to $62.6 million last year.














































































































































��

��

��

��

��

��

��

��

��

13 Weeks Ended

��

14 Weeks Ended

��

52 Weeks Ended

��

53 Weeks Ended

($ in millions)

��

May 5, 2012

��

��

May 7, 2011

��

��

May 5, 2012

��

��

May 7, 2011

EBITDA (investments and other operations)

$

20.5

��

$

16.3

��

$

74.8

��

$

69.4

Adjustments:

��

��

��

��

��

��

��

��

��

��

��

��

Gain on disposal of assets

��

(0.2)

��

��

-

��

��

(0.2)

��

��

(1.6)

��

Post-retirement benefit amendment

��

-

��

��

-

��

��

-

��

��

(0.5)

��

Dilution gains

��

(0.4)

��

��

(1.0)

��

��

(10.0)

��

��

(4.7)

��

��

(0.6)

��

��

(1.0)

��

��

(10.2)

��

��

(6.8)

Adjusted EBITDA

$

19.9

��

$

15.3

��

$

64.6

��

$

62.6







Operating Income



Investments and other operations contributed operating income of $16.4
million
in the fourth quarter ended May 5, 2012 compared to $11.1
million
in the fourth quarter last year, an increase of $5.3 million.
For the 52 weeks ended May 5, 2012, investments and other operations'
operating income contribution to Empire was $58.5 million compared to
$52.3 million last year, an increase of $6.2 million.



Adjusting investments and other operations' operating income for items
which are considered not indicative of underlying business operating
performance, as outlined in the previous table for EBITDA, resulted in
an adjusted operating income contribution during the fourth quarter of
$15.8 million versus $10.1 million last year. For fiscal 2012, adjusted
operating income contribution was $48.3 million compared to $45.5
million
last year.



Net Earnings



Investments and other operations contributed net earnings of $10.9
million
to Empire's consolidated fourth quarter fiscal 2012 net
earnings compared to a $6.5 million contribution in the fourth quarter
last year. Adjusted net earnings contribution from investments and
other operations was $10.4 million versus $5.8 million in the fourth
quarter last year.



For fiscal 2012, investments and other operations contributed net
earnings of $35.3 million to Empire's consolidated net earnings
compared to a $103.3 million contribution last year. Last year's net
earnings included the net gain on the sale of Wajax for $76.2 million.
Adjusted net earnings contribution from investments and other
operations was $28.1 million versus $22.4 million last year.



CONSOLIDATED FINANCIAL CONDITION



The Company's overall financial condition has improved since the start
of the fiscal year as evidenced by the capital structure and key
financial condition measures presented in the table below.





























































































��

��

��

��

($ in millions, except per share and ratio calculations)

��

May 5, 2012

��

��

May 7, 2011

Shareholders' equity, net of minority interest

$

3,396.3

��

$

3,162.1

Book value per common share��

$

49.98

��

$

46.48

Bank indebtedness

$

4.4

��

$

-

Long-term debt, including current portion (1)

$

1,126.4

��

$

1,152.4

Funded debt to total capital

��

25.0%

��

��

26.7%

Net funded debt to net total capital ratio (2)

��

15.4%

��

��

14.5%

Funded debt to EBITDA

��

1.3x

��

��

1.3x

EBITDA to net finance costs

��

14.6x

��

��

11.4x

Total assets

$

6,913.1

��

$

6,518.6











(1)

Includes liabilities relating to assets held for sale.

(2)

Net funded debt to net total capital reduces funded debt by cash and
cash equivalents.








Book value per common share was $49.98 at May 5, 2012 compared to $46.48
at May 7, 2011. The 7.5 percent increase in book value in the current
fiscal year largely reflects the Company's earnings growth.



The ratio of funded debt to total capital has improved 1.7 percentage
points to 25.0 percent from 26.7 percent at the end of fiscal 2011 as a
result of the $234.2 million increase in shareholders' equity levels
and a $21.6 million decline in funded debt from last fiscal year.



Consolidated free cash flow generation in the fourth quarter of fiscal
2012 was $189.4 million compared to $171.4 million in the fourth
quarter last year. This $18.0 million increase was due to a $25.5
million
increase in cash flow from operations, partially offset by an
increase in property, equipment and investment property purchases of
$7.5 million.



For the 52 weeks ended May 5, 2012, free cash flow generation was $225.1
million
compared to $210.3 million for the 53 weeks ended May 7, 2011.
The $14.8 million increase in free cash flow from fiscal 2011 was due
to a $51.9 million increase in cash flow from operations, partially
offset by a $37.1 million increase in property, equipment and
investment property purchases.



The following table reconciles free cash flow to GAAP cash flows used in
operating activities for the 13 and 52 weeks ended May 5, 2012 and the
14 and 53 weeks ended May 7, 2011.



















































































��

��

��

��

��

��

��

��

��

13 Weeks Ended

��

14 Weeks Ended

��

52 Weeks Ended

��

53 Weeks Ended

($ in millions)

��

May 5, 2012

��

��

May 7, 2011

��

��

May 5, 2012

��

��

May 7, 2011

Cash flow from operating activities

$

370.9

��

$

345.4

��

$

814.6

��

$

762.7

Less: property, equipment and investment property purchases

��

181.5

��

��

174.0

��

��

589.5

��

��

552.4

Free cash flow

$

189.4

��

$

171.4

��

$

225.1

��

$

210.3







SUBSEQUENT EVENT



On June 12, 2012, the Company agreed to purchase $24.0 million of
convertible unsecured subordinated debentures (the "Debentures") from
Crombie REIT, pursuant to a bought-deal prospectus offering for a total
of $60.0 million. The Debentures have a maturity date of September 30,
2019
. The Debentures have a coupon of 5.00 percent per annum and each
$1,000 principal amount of Debenture is convertible into approximately
49.7512 units of Crombie REIT, at any time, at the option of the
holder, based on a conversion price of $20.10 per unit.



FORWARD-LOOKING INFORMATION



This news release contains forward-looking information that reflects
management's current expectations related to matters such as future
financial performance and operating results of the Company. Expressions
such as "anticipates", "expects", "believes", "estimates", "could",
"intend", "may", "plans", "will", "would" and other similar expressions
or the negative of these terms are generally indicative of
forward-looking statements. Forward-looking statements contained in
this press release include those relating to Sobeys' expectations that
it will continue to focus on disciplined cost management initiatives,
supply chain and retail productivity improvements, and migration of
best practices to continue to fund investments to drive sales and
improve margins over time which could be impacted by the final scope
and scale of these initiatives; and the Company's expectations that
cost productivity, growth and innovation initiatives will continue to
enrich the customers' experience and ensure our competitive position
which may be impacted by economic and competitive conditions.



By its very nature, forward-looking information requires the Company to
make assumptions and is subject to inherent risks and uncertainties
which give rise to the possibility that the Company's expectations or
objectives will not prove to be accurate. These forward-looking
statements are subject to uncertainties and other factors that could
cause actual results to differ materially from such statements. These
uncertainties and risks are discussed in the Company's materials filed
with the Canadian securities regulatory authorities from time to time,
including the Risk Management section of the annual Management's
Discussion and Analysis.



Readers are urged to consider these and other risks, uncertainties and
assumptions carefully in evaluating the forward-looking information and
are cautioned not to place undue reliance on such forward-looking
information. The forward-looking information in this press release
reflects the Company's expectations as of June 28, 2012 and is subject
to change after this date. The Company does not undertake to update any
forward-looking statements that may be made from time to time by or on
behalf of the Company other than as required by applicable securities
laws.



NON-GAAP FINANCIAL MEASURES



There are measures included in this press release that do not have a
standardized meaning under GAAP and therefore may not be comparable to
similarly titled measures presented by other publicly traded companies.
The Company includes these measures because it believes certain
investors use these measures as a means of assessing financial
performance.



Empire's definition of the non-GAAP terms are as follows:




  • Same-store sales are sales from stores in the same locations in both
    reporting periods.


  • Gross profit is calculated as sales less cost of sales.


  • Operating income, or earnings before interest and taxes ("EBIT"), is
    calculated as net earnings before minority interest, finance costs (net
    of finance income) and income taxes.


  • Operating income margin is operating income divided by sales.


  • Adjusted operating income is operating income excluding items which are
    considered not indicative of underlying business operating performance.


  • Earnings before interest, taxes, depreciation and amortization
    ("EBITDA") is calculated as EBIT plus depreciation and amortization of
    intangibles.


  • Adjusted EBITDA is EBITDA excluding items which are considered not
    indicative of underlying business operating performance.


  • Funded debt is all interest bearing debt, which includes bank loans,
    bankers' acceptances, long-term debt and debt related to assets held
    for sale.


  • Net funded debt is calculated as funded debt less cash and cash
    equivalents.


  • Total capital is calculated as funded debt plus shareholders' equity,
    net of minority interest.


  • Adjusted net earnings are net earnings excluding items which are
    considered not indicative of underlying business operating performance.


  • Net total capital is total capital less cash and cash equivalents.


  • Free cash flow is calculated as cash flows from operating activities,
    less property, equipment and investment property purchases.


  • Book value per common share is shareholders' equity, net of minority
    interest, less preferred shares, divided by total common shares
    outstanding.








CONFERENCE CALL INFORMATION



The Company will hold an analyst call on Thursday, June 28, 2012
beginning at 1:00 p.m. (Eastern Daylight Time) during which senior
management will discuss the Company's financial results for the fourth
quarter and full year ended May 5, 2012. To join this conference call
dial (888) 231-8191 outside the Toronto area or (647) 427-7450 from
within the Toronto area. You may also listen to a live audiocast of the
conference call by visiting the Company's website located at www.empireco.ca. Replay will be available by dialing (855) 859-2056 and entering
passcode 91624078 until midnight July 5, 2012, or on the Company's
website for 90 days following the conference call.



UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



To view and download the Company's fourth quarter and full year fiscal
2012 unaudited consolidated financial statements, please access the
following link:



Q4 and Fiscal 2012 Unaudited Consolidated Financial Statements



This information can also be downloaded at www.sedar.com or by accessing the Investor Centre of the Company's website at www.empireco.ca.



2012 ANNUAL REPORT



The Company's audited consolidated financial statements and the notes
thereto for the fiscal year ended May 5, 2012 will be available on or
before August 3, 2012. Management's Discussion and Analysis for the
year ended May 5, 2012, which includes discussion and analysis of
results of operations, financial position and cash flows, will also be
available on or before August 3, 2012. Both documents will be contained
in the Company's 2012 Annual Report and can be accessed through the
Investor Centre section of the Company's website at www.empireco.ca and also at www.sedar.com.



ABOUT EMPIRE



Empire Company Limited (TSX:EMP.A) is a Canadian company headquartered
in Stellarton, Nova Scotia. Empire's core businesses include food
retailing and related real estate. With over $16 billion in annual
sales and approximately $6.9 billion in assets, Empire and its
subsidiaries directly employ approximately 47,000 people.



Additional financial information relating to Empire, including the
Company's Annual Information Form, can be found on the Company's
website at www.empireco.ca or at www.sedar.com.






For further information:

Paul V. Beesley
Executive Vice President and Chief Financial Officer
(902) 755-4440