The North West Company Inc. Announces Fourth Quarter Earnings, an Increase in the Quarterly Dividend and the Appointment of a New Director

Winnipeg, March 12, 2014 (TSX: NWC): The North West Company Inc. (the “Company” or “North West”) today reported its unaudited financial results for the fourth quarter ended January 31, 2014. It also announced that the Board of Directors have declared a dividend of $0.29 per share, an increase of $0.01 or 3.6% per share, to shareholders of record on March 31, 2014, to be paid on April 15, 2014.

Financial Highlights3

Sales increased 4.2% to $402.9 million compared to $386.6 million in the fourth quarter last year as new store sales and same store sales growth in both the Canadian and International Operations more than offset the impact of store closures in the Canadian Operations in the fourth quarter of 2012. Excluding the foreign exchange impact, sales increased 1.7% and were up 1.9%1 on a same store basis. Food sales1 increased 1.8% and were up 1.3% on a same store basis and general merchandise sales1 increased 1.5% and were up 4.1% on a same store basis.

Earnings from Operations2 increased 8.5% to $24.6 million compared to $22.7 million in the fourth quarter last year. Gross profit dollars increased 4.7% due to sales growth and a 15 basis point increase in gross profit rate on a consolidated basis. The gross profit rate improvement was largely due to lower markdowns in general merchandise resulting from better balanced seasonal assortments.

Selling, operating and administrative expenses increased 3.8% compared to last year but were down 9 basis points as a percentage to sales. The increase in expenses is primarily due to expenses related to new stores in the International Operations and the impact of foreign exchange on the translation of U.S. denominated expenses. The impact of new store expenses was partially offset by lower employee medical insurance expenses in the International Operations and a decrease in debt loss expense in the Canadian Operations. Excluding the foreign exchange impact, earnings from operations increased 7.2% compared to last year.

Trading profit2 or earnings before interest, income taxes, depreciation and amortization (EBITDA) increased 7.7% to $34.4 million compared to $31.9 million last year with both the Canadian Operations and International Operations contributing to the increase. Excluding the foreign exchange impact, trading profit increased 6.3% compared to last year and was 8.6% as a percentage to sales compared to 8.3% last year.

Fourth quarter net earnings increased 2.2% to $15.9 million compared to last year and diluted earnings per share were flat to last year at $0.32 per share.

“Our International performance reflects gains we have made in reducing product costs and a general improvement in economic conditions”, commented Edward Kennedy, President & CEO. “In Canada, the retail market continues to be more challenged and we are responding with more innovation in getting sales and in building our store network capability”.

Further information on the financial results is available in the Company’s fourth quarter report to shareholders, Management’s Discussion and Analysis and unaudited interim condensed consolidated financial statements which can be found in the investor section of the Company’s website at www.northwest.ca.

Read more: http://www.northwest.ca/content/news_releases/Q4_2013_-_Press_Release_-_MAR12-14.pdf