Colabor Group Inc. (TSX: GCL) (“Colabor” or the “Company”) reports
its results for the first quarter ended March 25, 2023.
First Quarter
2023 Financial Highlights:
-
Sales increased by 37.8% to $133.9 million, compared to $97.2
million for the corresponding period of 2022;
-
Net loss from continuing operations was $0.2 million compared
to $1.7 million for the corresponding period of 2022;
-
Adjusted EBITDA(1) increased by 141.0% to $5.6 million from $2.3
million for the corresponding period of 2022 and increase in
adjusted EBITDA(1) margin to 4.2% of sales compared to 2.4% of
sales during the corresponding period of 2022.
Table of first
quarter 2023 Financial
Highlights:
Financial
highlights |
12 weeks |
(in thousands of dollars, except percentages, per share data and
financial leverage ratio) |
2023 |
|
2022 |
|
$ |
|
$ |
|
Sales from continuing operations |
133,923 |
|
97,169 |
|
Adjusted EBITDA(1) |
5,574 |
|
2,313 |
|
Adjusted EBITDA(1) margin
(%) |
4.2 |
|
2.4 |
|
Net loss from continuing
operations |
(160 |
) |
(1,653 |
) |
Net loss |
(160 |
) |
(1,706 |
) |
Per share - basic and diluted ($) |
0.00 |
|
(0.02 |
) |
Cash
flow from operating activities |
807 |
|
12,426 |
|
Financial position |
As at |
|
As at |
|
|
March 25, |
|
March 19, |
|
|
2023 |
|
2022 |
|
Net debt(2) |
52,415 |
|
47,764 |
|
Financial leverage ratio(3) |
2.3 |
x |
2.3 |
x |
(1) Non-IFRS measure. Refer to the table
Reconciliation of Net Loss to adjusted EBITDA in MD&A section 5
"Non-IFRS Performance Measures". Adjusted EBITDA corresponds to net
operating earnings (loss) before costs not related to current
operations, depreciation and amortization and expenses for
stock-based compensation plan. (2) Non-IFRS measure. Refer to
MD&A section 5 "Non-IFRS Performance Measures". Net debt
corresponds to bank indebtedness, current portion of long-term debt
and long-term debt, net of cash. (3) Financial leverage ratio is an
indicator of the Company's ability to service its long-term debt.
It is defined as net debt / adjusted EBITDA less lease liability
payments for the last four quarters. The corresponding figure for
2022 has been restated to reflect the new calculation method
established for 2023. Refer to MD&A section 5 "Non-IFRS
Performance Measures".(4) Working capital is a non-IFRS performance
measure. Working capital is an indicator of the Company's ability
to hedge its current liabilities with its current assets. Refer to
MD&A section 3.2 "Financial Position" for detailed
calculation.
“I am very proud of the profitable growth we
have achieved over the past two years. First quarter results show
that the new management team is on the way to completing the first
phase of the transformation of Colabor's business. Revenues were up
for a 8th consecutive quarter, showing a growth of 37.8%, while our
adjusted EBITDA(1) increased by141.0%. Growing demand for our
differentiated offerings combined with strategic management of our
product mix, has allowed us to offset the increase in labor costs,
inputs and investments in our growth. So we start the year of 2023
on strong basis,” said Mr. Frenette, President and Chief Executive
Officer of Colabor.
“Our increased footprint in Quebec allows us to
gradually penetrate the independent channel market in a more
competitive manner. To this end, we began supplying a full service
restaurant chain operating 38 establishments across the province as
well as a group operating approximately 200 food counters located
in retail locations,” added Louis Frenette.
Results for the
First Quarter of
2023
Consolidated sales for the first quarter were
$133.9 million, an increase of 37.8% compared to $97.2 million
during the corresponding quarter of 2022. During the first quarter
of 2022, restaurant dining rooms were closed for four weeks due to
Covid-19 measures. Sales for the Distribution segment increased by
43.9%, as a result of volume increases, part of which is related to
the conclusion of two supply contracts with independent chains, the
impact of inflation and the acquisition of assets in the
Laurentians and Outaouais regions. Wholesale segment sales
increased by 23.9%, as a result of volume increases and the impact
of inflation.
Adjusted EBITDA(1) from continuing activities
was $5.6 million or 4.2% of sales from continuing activities
compared to $2.3 million or 2.4% during 2022. These variations are
mainly explained by the increase in sales and an improvement of
gross margin, mitigated by increase in labor costs and other supply
chain costs.
Net loss from continuing operations was $0.2
million, down from $1.7 million for the corresponding quarter of
the previous year, resulting essentially from an increase of the
adjusted EBITDA(1) as explained previously, combined with a
decrease in costs not related to current operations, mitigated by
higher depreciation and amortization and financial expenses, and
lower income taxes recovery.
Net loss for the first quarter was $0.2 million,
compared to $1.7 million for the corresponding period of 2022 and
are primarily explained by the facts described above.
Cash Flow and Financial
Position
Cash flows from operating activities were $0.8
million compared to $12.4 million for the corresponding period of
2022. This decrease is mainly due to higher utilization of working
capital(4) of $4.5 million, mitigated by higher adjusted EBITDA(1).
The higher utilization of working capital(4) is explained by the
receipt of the non-recurring gain in 2022 of $4.0 million, which
was receivable as at December 25, 2021, and the increase in
inventory purchases related with sales growth and in anticipation
of the summer season.
As at March 25, 2023, the Company's working
capital(4) was $53.3 million, up from $48.8 million at the end of
the fiscal 2022. This variation is explained by the increase in
inventories, as explained above.
As at March 25, 2023, the Company's net
debt(2) was up to $52.4 million, compared to $47.8 million at the
end of the fiscal year 2022. This increase is explained by the
additional use of the credit facility for $4.0 million.
Outlook
“We intend to continue this momentum by
prioritizing the acceleration of growth and the continuous
improvement of our activities and processes. The planned relocation
at the end of 2023 of our head office and warehouse located in
Boucherville to a new site better suited to the distribution
operations, in addition to wholesale operations, will allow us to
efficiently reach nearly 90.0% of the Quebec market. This project
is highly strategic for Colabor. It will also allow us to offer a
stimulating work environment for our employees, eco-responsible and
to serve more effectively our growing clientele in the west of the
province,” commented Louis Frenette.
Non-IFRS Performance Measures
The information provided in this release
includes non-IFRS performance measures, notably adjusted earnings
(loss) before financial expenses, depreciation and amortization and
income taxes ("Adjusted EBITDA")(1). As these concepts are not
defined by IFRS, they may not be comparable to those of other
companies. Refer to Section 5 "Non-IFRS Performance Measures" in
the Management's Discussion and Analysis.
Reconciliation of Net Loss to Adjusted
EBITDA(1) |
12 weeks |
(in thousands of dollars) |
2023 |
|
2022 |
|
|
$ |
|
$ |
|
Net loss from continuing operations |
(160 |
) |
(1,653 |
) |
Income taxes recovery |
(107 |
) |
(632 |
) |
Financial expenses |
1,242 |
|
971 |
|
Operating earnings (loss) |
975 |
|
(1,314 |
) |
Expenses for stock-based compensation plan |
89 |
|
79 |
|
Costs not related to current
operations |
49 |
|
314 |
|
Depreciation and
amortization |
4,461 |
|
3,234 |
|
|
|
|
Adjusted EBITDA(1) |
5,574 |
|
2,313 |
|
Additional Information
The Management Discussion and Analysis and the
consolidated financial statements of the Company are available on
SEDAR (www.sedar.com). Additional information, including the annual
information form, about Colabor Group Inc. can also be found on
SEDAR and on the Company’s website at www.colabor.com.
Forward-Looking Statements
This press release contains certain
forward-looking statements as defined under applicable securities
law. Forward-looking information may relate to Colabor's future
outlook and anticipated events,
business, operations, financial
performance, financial condition or results and, in some
cases, can be identified by terminology such as "may"; "will";
"should"; "expect"; "plan"; "anticipate"; "believe"; "intend";
"estimate"; "predict"; "potential"; "continue"; "foresee"; "ensure"
or other similar expressions concerning matters that are not
historical facts. Particularly, statements regarding the
Company’s financial guidelines, future operating results and
economic performance, objectives and strategies are forward-looking
statements. These statements are based on certain factors and
assumptions including expected growth, results of operations,
performance and business prospects and opportunities, which
Colabor believes are reasonable as of the current
date. Refer in particular to section 2.2 "Development
Strategies and Outlook" of the Company's MD&A. While Management
considers these assumptions to be reasonable based on information
currently available to the Company, they may prove to be
incorrect. Forward-looking information is also subject to
certain factors, including risks and uncertainties that could cause
actual results to differ materially from what Colabor currently
expects. For more exhaustive information on these risks and
uncertainties, the reader should refer to section 6 "Risks and
Uncertainties" of the Company's MD&A. These factors, which
include the risks related to the pandemic of Covid-19 and the
different underlying variants ("pandemic") as well as the possible
impacts on consumers and the economy, are not intended to represent
a complete list of the factors that could affect Colabor and future
events and results may vary significantly from what Management
currently foresees. The reader should not place undue importance on
forward-looking information contained in this press release,
information representing Colabor's expectations as of the date of
this press release (or as of the date they are otherwise stated to
be made) and are subject to change after such date. While
Management may elect to do so, the Company is under no obligation
(and expressly disclaims any such obligation) and does not
undertake to update or alter this information at any particular
time, whether as a result of new information, future events or
otherwise, except as required by law.
Conference Call
Colabor will hold a conference call to discuss
these results on Thursday, May 4, 2023, beginning at 9:30 a.m.
Eastern time. Interested parties can join the call by dialing
1-888-390-0549 (from anywhere in North America) or 1-416-764-8682.
If you are unable to participate, you can listen to a recording by
dialing 1-888-390-0541 or 1-416-764-8677 and entering the code
372236# on your telephone keypad. The recording will be available
from 1:30 p.m. on Thursday, May 4, 2023, until 11:59 p.m. on
March 11, 2023. Note that the recording will be available offline
on our website at the following address:
https://colabor.com/en/investisseurs-en/evenements-et-presentations/
You can also use the QuickConnect link:
https://emportal.ink/3ZPSnxT. This new link allows any participant
to access the conference call by clicking on the URL link and enter
their name and phone number.
Those wishing to join the webcast can do so by clicking on the
following link:
https://colabor.com/en/investisseurs-en/evenements-et-presentations/
About Colabor
Colabor is a distributor and wholesaler of food
and related products serving the hotel, restaurant and
institutional markets or "HRI" in Quebec and in the Atlantic
provinces, as well as the retail market. Within its two operating
segments, Colabor offers specialty food products such as meat,
fresh fish and seafood, as well as food and related products
through its Broadline activities.
Further information:
Pierre BlanchetteSenior Vice President and Chief
Financial OfficerColabor Group IncTel.: 450-449-4911 extension
1308investors@colabor.com |
Danielle Ste-MarieSte-Marie Strategy and
Communications Inc.Investor RelationsTel.: 450-449-0026 extension
1180 |
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