Colabor Group Inc. (TSX: GCL) (“Colabor” or the “Company”) reports
its results for the first quarter ended March 19, 2022.
First Quarter 2022 Financial
Highlights:
-
Sales increased by 13.2% to $97.2 million, compared to $85.8
million for the corresponding period of 2021;
-
Net loss from continuing operations increased to $1.7 million
compared to $1.0 million for the corresponding period of
2021;
-
Adjusted EBITDA(1) decreased to $2.3 million from $3.8 million for
the corresponding period of 2021 and decrease in adjusted EBITDA(1)
margin to 2.4% of sales compared to 4.5% of sales during the
corresponding period of 2021. This decrease is mainly explained by
the decrease in subsidies obtained of $1.3 million, increased labor
costs and other supply chain costs;
-
Cash flow generated by operating activities increased to $12.4
million compared to $5.4 million for the first quarter of
2021, due to lower utilization of working capital(4);
-
Repayment of the long-term debt of $7.8 million, of which $7.0
million as optional repayment;
-
Acquisition on April 4, 2022 of Le Groupe Resto-Achats Inc.;
and
-
On April 11, announcement of the acquisition of certain assets in
the Laurentians and Outaouais regions, effective April 22,
2022.
Table of first quarter 2022 Financial
Highlights:
Financial highlights |
12 weeks |
(in thousands of dollars, except percentages, per share data and
financial leverage ratio) |
2022 |
|
2021 |
|
$ |
|
$ |
|
Sales from continuing operations |
97,169 |
|
85,811 |
|
Adjusted EBITDA(1) |
2,313 |
|
3,848 |
|
Adjusted EBITDA(1)margin
(%) |
2.4 |
|
4.5 |
|
Net loss from continuing
operations |
(1,653 |
) |
(1,011 |
) |
Net loss |
(1,706 |
) |
(1,027 |
) |
Per share - basic and diluted ($) |
(0.02 |
) |
(0.01 |
) |
Cash
flow from operating activities |
12,426 |
|
5,376 |
|
Financial position |
As at |
|
As at |
|
|
March 19, |
|
December 25, |
|
|
2022 |
|
2021 |
|
Net debt(2) |
38,962 |
|
48,366 |
|
Financial leverage ratio(3) |
1.6 |
x |
1.9 |
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 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 for the last four
quarters. 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.
“Our first quarter results continue to
demonstrate the resiliency of our business model in the wake of a
pandemic and rising inflationary pressures,” said Mr. Frenette,
President and Chief Executive Officer of Colabor. “Revenues were up
13.2% and our gross margin was up 2,4% from the first quarter of
last year.”
“Our diversified customer base, continuous
improvements to our business and our ability to manage dynamically
our cost structure, allow us to continue to invest in the
implementation of our strategic plan. In April, we completed two
acquisitions that aim to grow our distribution activities in the
province. The closing of these two acquisitions, that represent
approximately $17.0 million in annual revenues, will help us
enhance the depth of our offering and gain market share in existing
and new territories. These two acquisitions will create value and
accelerate our strategic growth plan,” added Louis Frenette.
Results for the First Quarter of
2022
Consolidated sales for the first quarter
amounted to $97.2 million compared to $85.8 million during the
corresponding quarter of 2021, an increase of 13.2%, and this
despite the arrival of the Omicron variant, which resulted in
restaurant dining rooms closure for four weeks during the quarter
due to governmental restrictions. Sales for the Distribution
segment increased by 17.4%, explained by a volume increase from
restaurants, given a longer opening period of dining rooms during
the first quarter of 2022 compared to the first quarter of 2021, as
explained above. Wholesale segment sales increased by 4.3%
explained by an increase in volume as explained above, as well as
by new customers, mitigated by the partial loss of volume from a
single customer.
Adjusted EBITDA(1) from continuing activities
was $2.3 million or 2.4% of sales from continuing activities
compared to $3.8 million or 4.5% during 2021. These variations are
mainly explained by the decrease in subsidies obtained of $1.3
million, an increase in labor costs and other supply chain costs,
as well as investments to expand our territory and the
repositioning of our private brand, mitigated by an increase in
sales and in gross margin. Excluding the impact of subsidies
obtained, the adjusted EBITDA margin(1) would have been 2.4% in
2022 and 3.0% in 2021.
Net loss from continuing operations was
$1.7 million, an increase compared to a net loss of $1.0
million for the corresponding quarter of the previous year,
resulting essentially from the decrease of the adjusted EBITDA(1)
as explained previously, combined with higher costs not related to
current operations, mitigated by lower financial expenses and
higher income taxes recovery.
Net loss for the first quarter was
$1.7 million, compared to a net loss of $1.0 million for the
corresponding period of 2021. The variation is explained by the
facts described above.
Cash Flow and Financial
Position
Cash flows from operating activities reached
$12.4 million compared to $5.4 million for the corresponding period
of 2021. This increase is mainly due to lower utilization of
working capital(4), mitigated by a lower adjusted EBITDA(1). The
lower utilization of working capital(4) is explained by the receipt
of the non-recurring gain which was receivable as at December 25,
2021 and by a higher collection of receivables in 2022 in
connection with the increase in sales volume in the fourth quarter
of 2021.
As at March 19, 2022, the Company's working
capital(4) was $29.5 million, down from $40.8 million at the end of
the fiscal year 2021. This variation is explained by the
seasonality effect and the receipt of the non-recurring gain which
was receivable as at December 25, 2021.
As at March 19, 2022, the Company's net
debt(2) was down to $39.0 million, compared to $48.4 million at the
end of the fiscal year 2021. This decrease is mainly due to credit
facility repayments of $7.8 million.
Outlook
“Looking ahead, with an improved product mix, a
wider distribution network, an improved efficiency and a robust
balance sheet, we are well positioned to benefit from the recovery
of the restaurant and hospitality industry. As always, we remain
cautious and focused on managing our cost structure in the face of
current inflationary pressures, labor shortage and supply chain
disruptions,” 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 5 "Non-IFRS Performance Measures" in the Management's
Discussion and Analysis.
Reconciliation of Net Earnings to Adjusted
EBITDA(1) |
12 weeks |
(in thousands of dollars) |
2022 |
|
2021 |
|
|
$ |
|
$ |
|
Net loss from continuing operations |
(1,653 |
) |
(1,011 |
) |
Income taxes recovery |
(632 |
) |
(251 |
) |
Financial expenses |
971 |
|
1,737 |
|
Operating (loss) earnings |
(1,314 |
) |
475 |
|
Expenses for stock-based compensation plan |
79 |
|
22 |
|
Costs not related to current
operations |
314 |
|
91 |
|
Depreciation and
amortization |
3,234 |
|
3,260 |
|
|
|
|
Adjusted EBITDA(1) |
2,313 |
|
3,848 |
|
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 9 "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, April 28, 2022, 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
496529# on your telephone keypad. The recording will be available
from 1:30 p.m. on Thursday, April 28, 2022, until 11:59 p.m.
on May 5, 2022.
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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