Andrew Peller Limited (TSX: ADW.A / ADW.B) (“APL” or the “Company”)
announced today results for the three months ended June 30, 2024.
All amounts are expressed in Canadian dollars unless otherwise
stated.
FIRST QUARTER 2025
HIGHLIGHTS
- Revenue was $99.5 million, compared
with $100.5 million in the prior year;
- Gross margin of 38.4%, consistent
with the prior year;
- EBITA increased to $12.9 million,
from $12.7 million in Q1 2024; and
- Net loss of $0.4 million ($0.01 per
Class A Share), compared to $0.9 million ($0.02 per Class A Share)
in Q1 2024.
“Our operating results were largely consistent
year over year, as our significant work on cost savings initiatives
and operational efficiencies has enabled us to generate solid EBITA
performance through a period of softer market conditions across the
industry,” said Paul Dubkowski, Chief Executive Officer. “The
breadth of our brand portfolio and sales channels allowed us to
mitigate the impact of these conditions and continue to meet the
evolving tastes and preferences of our consumers. Heading into our
typically busier second and third quarters, including at our
award-winning estates, we remain focused on growing sales in our
key brands while also introducing new products both in our core
wine segment and other growth categories, building on our company’s
history of innovation. These initiatives support our objective to
deliver above-category sales performance, combined with further
margin expansion and EBITA growth.”
Financial Highlights(Financial
Statements and the Company’s Management Discussion and Analysis for
the period can be obtained on the Company’s web site at
ir.andrewpeller.com)
For the three
months ended
June 30, (in $000, except
per share amounts) |
|
2024 |
|
|
2023 |
|
Revenue |
|
$ 99,465 |
|
|
$ 100,481 |
|
Gross margin (1) |
|
38,179 |
|
|
39,028 |
|
Gross margin (% of revenue) |
|
38.4% |
|
|
38.8% |
|
Selling and administrative expenses |
|
25,320 |
|
|
26,328 |
|
EBITA (1) |
|
12,859 |
|
|
12,700 |
|
Interest |
|
4,580 |
|
|
4,284 |
|
Net unrealized loss on derivative financial instruments |
|
218 |
|
|
631 |
|
Loss on debt extinguishment and financing fees |
|
- |
|
|
2,172 |
|
Other expenses |
|
296 |
|
|
1,217 |
|
Net loss |
|
(375) |
|
|
(931) |
|
Loss per share – basic and diluted - Class A |
|
$(0.01) |
|
|
$(0.02) |
|
Loss per share – basic and diluted - Class B |
|
$(0.01) |
|
|
$(0.02) |
|
Dividend per share – Class A |
|
$0.0615 |
|
|
$0.0615 |
|
Dividend per share – Class B |
|
$0.0535 |
|
|
$0.0535 |
|
(1) Please refer to the Company’s
MD&A concerning “Non-IFRS Measures”
Financial Review
Revenue for the three months ended June 30, 2024
decreased 1.0% over the prior year period. Several of the Company’s
well-established trade channels performed well with solid growth of
sales to provincial liquor stores, restaurants and hospitality
locations, as well as sales from the Company’s personal wine making
business. This was offset by softness in sales from the estates and
wine clubs due to lower guest traffic as well as reduced consumer
discretionary spending due to tightening economic conditions. In
the first quarter of fiscal 2025, the Company recognized $3.2
million relating to the revised Ontario VQA Support Program
announced in December 2023.
Gross margin as a percentage of revenue was
38.4% for the three months ended June 30, 2024, compared to 38.8%
in the year prior. This is due to softness in sales from
high-margin channels, such as the estates and wine clubs, as well
as continuing cost pressures impacting the cost of imported wine,
glass, and international freight and shipping charges. In response
to these margin pressures, the Company has executed numerous
production efficiency and cost savings programs aimed at enhancing
operating margins including the renegotiation of inbound and
outbound freight rates and alternate sourcing for glass bottles,
which will improve margin going forward.
As a percentage of revenue, selling and
administrative expenses was 25.5% in the first quarter of fiscal
2025, down from from 26.2% in the prior year due primarily to
compensation optimization at the Company’s retail stores and estate
wineries, and rationalization of marketing spend in line with
current market conditions.
Earnings before interest, amortization, loss on
debt extinguishment and financing fees, net unrealized gains and
losses on derivative financial instruments, other (income)
expenses, and income taxes (“EBITA”) (see “Non-IFRS Measures”
section of this MD&A) increased to $12.9 million for the three
months ended June 30, 2024, compared to $12.7 million in the prior
year.
Interest expense for the three months ended June
30, 2024 increased $0.3 million compared to prior year due to a
higher average debt balance through the first quarter of fiscal
2025.
As a result of these factors, the Company
incurred a net loss of $0.4 million ($0.01 per Class A share) for
the three months ended June 30, 2024 compared to $0.9 million
($0.02 per Class A Share) in the prior year.
Investor Conference CallThe
Company will hold conference call to discuss the results on
Thursday, August 8, 2024 at 10:00 a.m. ET. Paul Dubkowski, CEO and
Patrick O’Brien, President and CCO, will host the call, with a
question and answer period following management’s presentation.
Conference Call Dial In Details: |
Date: |
Thursday, August 8, 2024 |
Time: |
10:00 a.m. (ET) |
Dial-in
numbers: |
Local Toronto / International:
(289) 819-1350North American Toll Free: (800) 836-8184 |
Webcast: |
A live webcast will be available
at ir.andrewpeller.com |
Replay: |
Following the live call, a
recording will be available on the Company’s investor relations
website at ir.andrewpeller.com |
|
|
About Andrew Peller
LimitedAndrew Peller Limited is one of Canada’s leading
producers and marketers of quality wines and craft beverage alcohol
products. The Company’s award-winning premium and ultra-premium
Vintners’ Quality Alliance brands include Peller Estates, Trius,
Thirty Bench, Wayne Gretzky, Sandhill, Red Rooster, Black Hills
Estate Winery, Tinhorn Creek Vineyards, Gray Monk Estate Winery,
Raven Conspiracy, and Conviction. Complementing these premium
brands are a number of popularly priced varietal offerings,
wine-based liqueurs, craft ciders, and craft spirits. The Company
owns and operates 101 well-positioned independent retail locations
in Ontario under The Wine Shop, Wine Country Vintners, and Wine
Country Merchants store names. The Company also operates Andrew
Peller Import Agency and The Small Winemaker’s Collection Inc.,
importers and marketing agents of premium wines from around the
world. With a focus on serving the needs of all wine consumers, the
Company produces and markets premium personal winemaking products
through its wholly owned subsidiary, Global Vintners Inc., the
recognized leader in personal winemaking products. More information
about the Company can be found at ir.andrewpeller.com.
The Company utilizes EBITA (defined as earnings
before interest, amortization, loss on debt extinguishment and
financing fees, net unrealized gains and losses on derivative
financial instruments, other (income) expenses, and income taxes)
to measure its financial performance. EBITA is not a recognized
measure under IFRS. Management believes that EBITA is a useful
supplemental measure to net earnings, as it provides readers with
an indication of earnings available for investment prior to debt
service, capital expenditures, and income taxes, as well as
provides an indication of recurring earnings compared to prior
periods. Readers are cautioned that EBITA should not be construed
as an alternative to net earnings (loss) determined in accordance
with IFRS as indicators of the Company’s performance or to cash
flows from operating, investing, and financing activities as a
measure of liquidity and cash flows. The Company also utilizes
gross margin (defined as revenue less cost of goods sold, excluding
amortization). The Company’s method of calculating EBITA and gross
margin may differ from the methods used by other companies and,
accordingly, may not be comparable to measures used by other
companies.
Andrew Peller Limited common shares trade on the
Toronto Stock Exchange (symbols ADW.A and ADW.B).
FORWARD-LOOKING INFORMATIONCertain
statements in this news release may contain “forward-looking
statements” within the meaning of applicable securities laws
including the “safe harbour provisions” of the Securities Act
(Ontario) with respect to APL and its subsidiaries. Such statements
include, but are not limited to, statements about the growth of the
business; its launch of new premium wines and craft beverage
alcohol products; sales trends in foreign markets; its supply of
domestically grown grapes; and current economic conditions. These
statements are subject to certain risks, assumptions, and
uncertainties that could cause actual results to differ materially
from those included in the forward-looking statements. The words
“believe”, “plan”, “intend”, “estimate”, “expect”, or “anticipate”,
and similar expressions, as well as future or conditional verbs
such as “will”, “should”, “would”, “could”, and similar verbs often
identify forward-looking statements. We have based these
forward-looking statements on our current views with respect to
future events and financial performance. With respect to
forward-looking statements contained in this news release, the
Company has made assumptions and applied certain factors regarding,
among other things: future grape, glass bottle, and wine and spirit
prices; its ability to obtain grapes, imported wine, glass, and
other raw materials; fluctuations in foreign currency exchange
rates; its ability to market products successfully to its
anticipated customers; the trade balance within the domestic
Canadian and international wine markets; market trends; reliance on
key personnel; protection of its intellectual property rights; the
economic environment; the regulatory requirements regarding
producing, marketing, advertising, and labelling of its products;
the regulation of liquor distribution and retailing in Ontario; the
application of federal and provincial environmental laws; and the
impact of increasing competition.
These forward-looking statements are also
subject to the risks and uncertainties discussed in this news
release, in the “Risks and Uncertainties” section and elsewhere in
the Company’s MD&A and other risks detailed from time to time
in the publicly filed disclosure documents of Andrew Peller Limited
which are available at www.sedarplus.ca. Forward-looking statements
are not guarantees of future performance and involve risks,
uncertainties, and assumptions which could cause actual results to
differ materially from the conclusions, forecasts, or projections
anticipated in these forward-looking statements. Because of these
risks, uncertainties and assumptions, you should not place undue
reliance on these forward-looking statements. The Company’s
forward-looking statements are made only as of the date of this
news release, and except as required by applicable law, the Company
undertakes no obligation to update or revise these forward-looking
statements to reflect new information, future events or
circumstances.
For more information, please contact:Craig
Armitage and Jennifer Smithir@andrewpeller.com
Source: Andrew Peller Limited
Andrew Peller (TSX:ADW.A)
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