Colabor Group Inc. (TSX: GCL) (“Colabor” or the “Company”) reports
its results for the second quarter ended June 11, 2022.
Second Quarter 2022 Financial Highlights:
-
Sales increased by 27.4% to $138.0 million, compared to $108.3
million for the corresponding period of 2021 resulting mainly from
an increase in volume given the less restrictive confinement
measures in 2022 compared to 2021, the impact of high inflation and
the acquisitions described below;
-
Net earnings from continuing operations reached $1.7 million
compared to $1.6 million for the corresponding period of 2021,
as the increase in adjusted EBITDA(1) was mitigated by the increase
in costs not related to current operations and depreciation and
amortization expenses;
-
Adjusted EBITDA(1) increased to $8.0 million from $6.7 million for
the corresponding period of 2021. Excluding the impact of subsidies
obtained of $1.2 million in 2021, adjusted EBITDA(1) margin would
have been 5.0% of sales in 2021 compared to 5.8% in 2022;
-
Cash flow used in operating activities decreased to $1.2 million
compared to $2.9 million for the second quarter of 2021,
resulting from a lower utilization of working capital(4); and
-
Acquisition on April 4, 2022 of Le Groupe Resto-Achats Inc. and its
subsidiaries and acquisition on April 22, 2022 of certain assets,
including the customers list in the Laurentians and Outaouais
regions, representing total revenues of $2.8 million during the
second quarter.
Table of second quarter 2022 Financial
Highlights:
Financial
highlights |
12 weeks |
24 weeks |
(in thousands of dollars, except percentages, per |
2022 |
|
2021 |
|
2022 |
|
2021 |
|
share data and financial leverage ratio) |
$ |
|
$ |
|
$ |
|
$ |
|
Sales from continuing operations |
137,986 |
|
108,290 |
|
235,155 |
|
194,101 |
|
Adjusted EBITDA(1) |
8,006 |
|
6,671 |
|
10,319 |
|
10,519 |
|
Adjusted EBITDA(1) margin
(%) |
5.8 |
|
6.2 |
|
4.4 |
|
5.4 |
|
Net earnings from continuing
operations |
1,690 |
|
1,640 |
|
37 |
|
629 |
|
Net earnings (loss) |
1,676 |
|
1,692 |
|
(30 |
) |
665 |
|
Per share - basic and diluted
($) |
0.02 |
|
0.02 |
|
0.00 |
|
0.01 |
|
Cash
flow from operating activities |
(1,221 |
) |
(2,911 |
) |
11,205 |
|
2,465 |
|
Financial position |
|
|
As at |
|
As at |
|
|
|
|
June 11, |
|
December 25, |
|
|
|
|
2022 |
|
2021 |
|
Net debt(2) |
|
|
46,122 |
|
48,366 |
|
Financial leverage ratio(3) |
|
|
1.8 |
x |
1.9 |
x |
(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 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 6
"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 proud of our second quarter results, which
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 27.4% and our gross margin was up 8.3% from the
second quarter of last year.”
“Our diversified customer base, continuous
improvements to our business and our ability to dynamically manage
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, which 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 Second Quarter of
2022
Consolidated sales for the second quarter
amounted to $138.0 million compared to $108.3 million during the
corresponding quarter of 2021, an increase of 27.4%. Sales for the
Distribution segment increased by 27.7%, explained by a volume
increase from restaurants, given there are no restrictions for
dining rooms during the second quarter of 2022, the impact of high
inflation and the acquisition of assets in the Laurentians and
Outaouais regions. Wholesale segment sales increased by 23.1%
explained by an increase in volume as explained above, as well as
by new customers and the impact of high inflation.
Adjusted EBITDA(1) from continuing activities
was $8.0 million or 5.8% of sales from continuing activities
compared to $6.7 million or 6.2% during 2021. These variations are
mainly explained by the increase in sales and improvement of gross
margin, mitigated by the decrease in subsidies obtained of $1.2
million, an increase in labor costs and other supply chain costs.
Excluding the impact of subsidies obtained in 2021, the adjusted
EBITDA(1) margin would have been 5.8% in 2022 and 5.0% in 2021.
Net earnings from continuing operations were
$1.7 million, similar to $1.6 million for the corresponding
quarter of the previous year, resulting essentially from the
increase of the adjusted EBITDA(1) as explained previously,
combined with lower financial expenses, mitigated by higher costs
not related to current operations, income taxes and depreciation
and amortization expenses.
Net earnings for the second quarter were
$1.7 million in 2022 and for the corresponding period of 2021
and is explained by the facts described above.
Results for the 24-week period of
2022
Consolidated sales for the 24-week period were
$235.2 million compared to $194.1 million in the corresponding
period of 2021, an increase of 21.2% mainly from the Distribution
segment. Adjusted EBITDA(1) from continuing operations reached
$10.3 million or 4.4% of sales from continuing operations
compared to $10.5 million or 5.4% in 2021. These variations are
mainly due to an increase in gross margin and sales, mitigated by a
decrease in subsidies obtained of $2.5 million. Net earnings from
continuing operations were $nil million, down from a net earnings
of $0.6 million in the 24-week period of last year. Excluding the
impact of subsidies obtained, the adjusted EBITDA(1) margin would
have been 4.4% in 2022 and 4.1% in 2021.
Cash Flow and Financial
Position
Cash flows from operating activities reached
$(1.2) million and $11.2 million for the 12 and 24-week periods of
2022, respectively, compared to $(2.9) million and $2.5 million for
the corresponding periods of 2021. This increase is mainly due to
lower utilization of working capital(4) and a higher 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 in the fourth quarter of
2021.
As at June 11, 2022, the Company's working
capital(4) was $37.4 million, down from $40.8 million at the end of
the fiscal year 2021. This variation is explained by the receipt of
the non-recurring gain which was receivable as at December 25,
2021, mitigated by the seasonality effect.
As at June 11, 2022, the Company's net
debt(2) was down to $46.1 million, compared to $48.4 million at the
end of the fiscal year 2021. This decrease is mainly due to credit
facility repayments.
Outlook
“Looking ahead, with an improved product mix, a
wider distribution network, an improved efficiency and a robust
balance sheet, we anticipate a further 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 6 "Non-IFRS Performance Measures" in the Management's
Discussion and Analysis.
Reconciliation of Net Earnings to Adjusted
EBITDA(1) |
12 weeks |
24 weeks |
(in thousands of dollars) |
2022 |
2021 |
2022 |
2021 |
|
$ |
$ |
$ |
$ |
Net earnings from continuing operations |
1,690 |
1,640 |
37 |
629 |
Income taxes |
675 |
575 |
43 |
324 |
Financial expenses |
979 |
1,102 |
1,950 |
2,839 |
Operating earnings |
3,344 |
3,317 |
2,030 |
3,792 |
Expenses for stock-based compensation plan |
123 |
45 |
202 |
67 |
Costs not related to current
operations |
831 |
64 |
1,145 |
155 |
Depreciation and
amortization |
3,708 |
3,245 |
6,942 |
6,505 |
|
|
|
|
|
Adjusted EBITDA(1) |
8,006 |
6,671 |
10,319 |
10,519 |
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 8 "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 Friday, July 22, 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
370535# on your telephone keypad. The recording will be available
from 1:30 p.m. on Friday, July 22, 2022, until 11:59 p.m. on
July 29, 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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