During 2002 we experienced the ever-changing landscape of retailing. The first half of the year
was buoyant with sales increases flowing from a strong Canadian economy, as well as our
Company’s continued steady performance. The second half of the year, and in particular the
fourth quarter, was another story. General consumer confidence began to worsen while unsettled
international events created uncertainty in world markets.
Despite these changes, the efforts of our associates lead our Company to new records in 2002 for
both sales revenues and net operating income. For the year ended December 31, 2002 sales were
$449,693,000 ($425,687,000 in 2001) an increase of 5.6%. Net income was $38,520,000, $1.96 per
common share ($36,323,000, $1.82 per common share in 2001) an increase of 7.7% per share. Total Leon’s
sales including $129,192,000 of sales by Franchises were $578,885,000 ($545,406,000 in 2001).
We are pleased to report that new store openings in Les Saules, Quebec and Brampton, Ontario,
have met expectations. Significant renovations have also been completed in Edmonton, Alberta
and Richmond Hill, Ontario. Further extensive renovations are proceeding for stores in Burlington
and Ottawa, Ontario. Potential new building sites have also been selected in the provinces of
Ontario, Alberta and Quebec.
As pleased as we are with our results for 2002, we realize that we have to continue to improve
upon the efficiencies of our operations, if we are to be successful in the difficult retail environment
facing us in the year ahead. In 2003 we will complete the implementation of Radio Frequency Bar
Coding for all our stores. We will be making use of new systems to better communicate with our
Franchises under our operations umbrella. We will be working more diligently with our suppliers
to provide even better value for our customers.
Over the years, our Company has created award winning advertising campaigns that have brought
enjoyment and laughter to millions of Canadians. During the coming year, we will be unveiling the
most exciting new marketing campaign we have undertaken in a long time. It will be based on the
corner blocks, which support the foundation of our business: integrity and trust.
These new initiatives reflect our renewed emphasis on merchandise value, professionalism and customer
care. Our associates are strongly committed to instill a sense of tremendous pride in the hearts and
minds of all our customers, create peace of mind for them, and demonstrate once again, that we
are truly the leaders in our field.