Colabor Group Inc. (TSX: GCL) (“Colabor” or the “Company”) reports
its results for the third quarter and the 36-week period ended
September 4, 2021 and announces the appointment of Mr. Jean
Gattuso as Director of the Company effective today.
Third Quarter 2021 Financial Highlights:
-
Sales increased by 8.8% to $131.6 million, compared to $120.9
million for the third quarter of 2020, with a reopening of
restaurant dining rooms at the beginning of the quarter in 2021
while the reopening occurred later in the third quarter of
2020;
-
Net earnings from continuing operations decreased to $2.3 million
compared to $3.4 million for the corresponding period of 2020,
resulting primarily from the decrease of subsidies related to the
pandemic and additional labor costs in the current context of labor
shortage, partly offset by sales increase;
-
Adjusted EBITDA(1) decreased to $7.8 million from $10.1 million for
the corresponding period of 2020 and decrease in adjusted EBITDA(1)
margin to 5.9% of sales compared to 8.4% of sales during the
corresponding period of 2020. Excluding the impact of subsidies
obtained, the adjusted EBITDA margin(1) would have been 6.0% in
2021 and 7.6% in 2020;
-
Cash flow generated by operating activities down to $7.4 million
compared to cash flow from operating activities of
$16.4 million for the third quarter of 2020, due to higher
utilization of working capital(4) in relation with higher sales and
by the timing of inventories purchase and suppliers payments, as
well as higher collection of receivables in 2020.
-
Mr. Gattuso joins the Board of Directors of Colabor as of
today.
Table of third quarter 2021 Financial
Highlights:
Financial
highlights |
12 weeks |
36 weeks |
(in thousands of
dollars except percentages, per share data and financial leverage
ratio) |
2021 |
2020 |
2021 |
2020 |
$ |
$ |
$ |
$ |
Sales from continuing operations |
131,622 |
|
120,931 |
|
325,309 |
|
328,002 |
|
Adjusted EBITDA(1) |
7,821 |
|
10,143 |
|
18,340 |
|
21,454 |
|
Adjusted EBITDA(1) margin
(%) |
5.9 |
|
8.4 |
|
5.6 |
|
6.5 |
|
Net earnings from continuing
operations |
2,288 |
|
3,441 |
|
2,917 |
|
3,178 |
|
Net earnings (loss) |
2,038 |
|
1,789 |
|
2,703 |
|
(9,423 |
) |
Per share - basic and diluted ($) |
0.02 |
|
0.02 |
|
0.03 |
|
(0.09 |
) |
Cash
flow from operating activities |
7,448 |
|
16,359 |
|
9,717 |
|
23,431 |
|
Financial position |
|
|
As at |
As at |
|
|
|
September 4, |
December 26, |
|
|
|
2021 |
2020 |
Net debt(2) |
|
|
53,210 |
|
52,100 |
|
Financial leverage ratio(3) |
|
|
2.1x |
1.8x |
(1) Non-IFRS measure. Refer to the table
Reconciliation of Net Earnings to adjusted EBITDA in MD&A
section 6 "Non-IFRS Performance Measures". Adjusted EBITDA
corresponds to net operating earnings 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 6 "Non-IFRS Performance Measures". Net debt
corresponds to bank indebtedness, current portion of long-term
debt, long-term debt and convertible debentures, 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 for the last four quarters. Refer to MD&A section 6
"Non-IFRS Performance Measures".(4) 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.
“The reopening of restaurant dining rooms since
last spring, the diversification of our channels and the
implementation of the first milestones of our strategic plan have
enabled us to support the growth of our revenues during the third
quarter,” said Louis Frenette, President and Chief Executive
Officer of Colabor.
“The inflationary pressures we are experiencing
and the labor shortage are slowing down our growth plan and has put
pressure on our margins. However, the successful transformation of
our operations over the past two years, the renewal of the
management team and our focused efforts on our value-added
activities will allow us to reduce the impacts.”
“With the refinancing of our balance sheet at
the end of the first quarter, the resumption of the restaurant
business and growth opportunities both organically and through
acquisitions, we are well positioned to continue creating value for
all of our stakeholders,” concluded Louis Frenette.
Results for the Third Quarter of
2021
Consolidated sales for the third quarter
amounted to $131.6 million compared to $120.9 million during the
corresponding quarter of 2020, an increase of 8.8%. Sales for the
Distribution segment increased by 11.7% explained by a volume
increase from restaurants, following the reopening of restaurant
dining rooms at the beginning of the quarter in 2021 while the
reopening occurred later in the third quarter of 2020. Wholesale
segment sales increased by 2.3%, due to the reopening of the
restaurant business as explained above, the growth of certain
customers less affected by the effects of the pandemic and by new
customers, mitigated by the partial loss of volume from a single
customer.
Adjusted EBITDA(1) from continuing activities
reached $7.8 million or 5.9% of sales from continuing activities
compared to $10.1 million or 8.4% during 2020. These
variations are mainly explained by the decrease in subsidies
obtained of $0.9 million, the holding of the spring buying show
during the second quarter of 2021, compared to the third quarter of
2020, negatively impacted the expenses by $0.5 million in 2021, and
additional labor costs in the current context of labor shortage,
combined with a retroactive adjustment for the renewal of a
collective agreement, as well as investments for the repositioning
of our private brand and to expand our territory. Excluding the
impact of subsidies obtained, the adjusted EBITDA margin(1) would
have been 6.0% in 2021 and 7.6% in 2020.
Net earnings from continuing operations were
$2.3 million, a decrease of 33.5% compared to $3.4 million for the
corresponding quarter of the previous year resulting essentially
from the decrease in adjusted EBITDA(1) as explained above,
mitigated by the decrease of depreciation and amortization
expenses, financial expenses and income tax expense.
Net earnings for the third quarter were $2.0
million, compared to net loss of $1.8 million for the corresponding
period of 2020. The variation is explained by the facts described
above and by the variation of $1.4 million in net loss from
discontinued operations.
Results for the 36-week period of
2021
Consolidated sales for the 36-week period were
$325.3 million compared to $328.0 million in the corresponding
period of 2020, a decrease of 0.8% mainly from the Distribution
segment. Adjusted EBITDA(1) from continuing operations reached
$18.3 million or 5.6% of sales from continuing operations
compared to $21.5 million or 6.5% in 2020 and is mainly explained
by the reduction of $2.7 million in subsidies obtained.
Excluding the impact of subsidies obtained, the adjusted EBITDA
margin(1) would have been 4.9% in 2021 and in 2020 Net earnings
from continuing operations was $2.9 million, down from a net loss
of $3.2 million in the 36-week period of last year.
Cash Flow and Financial
Position
Cash flows from operating activities reached
$7.4 million for the third quarter, compared to $16.4 million for
the corresponding period of 2020. This decrease is mainly due to
higher utilization of working capital(4) and by the decrease in
adjusted EBITDA(1).
As at September 4, 2021, the Company's
working capital(4) was $37.0 million, up from $31.2 million at the
end of the fiscal year 2020. This variation is explained by the
increase in sales during the third quarter, by the seasonality
effect and by timing differences in purchases.
As at September 4, 2021, the Company's net
debt(2) was up to $53.2 million, compared to $52.1 million at
the end of the fiscal year 2020. This increase is mainly due to the
increase in working capital(4) due to the effect of
seasonality.
Outlook
“We are entering into the fourth quarter on
solid foundation. We recently reached an agreement in principle for
the renewal of our collective agreement with the employees of our
largest distribution center. With more than 99% of our employees in
favor, this agreement aligns our compensation practices with the
industry and will allow us to improve our competitiveness as an
employer and to retain and attract the best candidates. In this
context, I am even more grateful for our employees' efforts, who
every day contributed to Colabor's success throughout the
pandemic,” commented Louis Frenette.
Non-IFRS Performance
Measures
The information provided in this release
includes non-IFRS performance measures, notably adjusted earnings
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 6 "Non-IFRS Performance Measures" in the Management's
Discussion and Analysis.
Reconciliation of Net Earnings to Adjusted
EBITDA(1) |
12 weeks |
|
36 weeks |
(in thousands of dollars) |
2021 |
2020 |
|
2021 |
2020 |
|
$ |
$ |
|
$ |
$ |
Net earnings from continuing operations |
2,288 |
|
3,441 |
|
|
2,917 |
|
3,178 |
|
Income taxes |
1,130 |
|
1,938 |
|
|
1,454 |
|
1,491 |
|
Financial expenses |
984 |
|
1,443 |
|
|
3,823 |
|
4,737 |
|
Operating earnings |
4,402 |
|
6,822 |
|
|
8,194 |
|
9,406 |
|
Expenses for stock-based compensation plan |
81 |
|
48 |
|
|
148 |
|
225 |
|
Costs not related to current
operations |
75 |
|
(121 |
) |
|
230 |
|
1,467 |
|
Depreciation and
amortization |
3,263 |
|
3,394 |
|
|
9,768 |
|
10,356 |
|
|
|
|
|
|
|
Adjusted EBITDA(1) |
7,821 |
|
10,143 |
|
|
18,340 |
|
21,454 |
|
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.
Appointment of a new Board member
Mr. Gattuso joined Lassonde in 1987. He held
various senior executive positions at the subsidiary A. Lassonde
Inc. between 1995 and 2009. Mr. Gattuso was appointed Chief
Operating Officer of Lassonde Industries Inc. in 2009, and then
President and Chief Operating Officer from 2012 to 2021, in
addition to holding the position of President and Chief Executive
Officer of various subsidiaries and being the Chairman of the Board
of Directors of the US subsidiary of Lassondes Industries Inc.
Under his leadership, the company has grown into the largest
manufacturer of fruit juices and beverages in Canada and became a
market leader in North America. Seasoned Director, Mr. Gattuso is
sitting on various Boards of Directors, including Investissement
Québec, La Tablée des Chefs and Le Cercle des Présidents du Québec,
and the advisory boards of two privately held corporations. Mr.
Gattuso holds a Bachelor of Commerce from McGill University and an
MBA from Université du Québec à Montréal. He has received many
honors during his career including “Person of the Year” in the food
industry in 2003, “Entrepreneur of the Year 2008” from Ernst &
Young in Quebec, "MBA of the Year" award in 2014 and, the Golden
Pencil Award in 2015.
“We are pleased to welcome Mr. Gattuso to our
Board of Directors. His extensive food industry knowledge,
managerial expertise and Board experience will greatly benefit
Colabor and its Board of Directors,” said Mr. Warren White,
Chairman of the Board.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 available on
SEDAR (www.sedar.com). 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 10 "Risks and Uncertainties" of the Company's
MD&A. These factors, which include the risks related to the
pandemic of Covid-19 ("pandemic") and 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 Friday, October 15, 2021, 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
568259# on your telephone keypad. The recording will be available
from 1:30 p.m. on Friday, October 15, 2021, until 11:59 p.m.
on Friday, October 22, 2021.
Those wishing to join the webcast can do so by clicking on the
following link:
http://www.colabor.com/en/investisseurs/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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