DAVIDsTEA Inc. (Nasdaq:DTEA) (DAVIDsTEA or “the Company”), a
leading tea merchant in North America, announces its fourth quarter
and full-year results for the period ended February 1, 2020
(“Fiscal 2019”) and provides an update on future plans in the
context of the ongoing COVID-19 pandemic. Unless otherwise
indicated, the Company’s results for the fourth quarter and Fiscal
2019 reflect the adoption of IFRS 16, as described below under
“Adoption of IFRS 16 - Leases”. All dollar amounts are expressed in
Canadian dollars.
“With all our stores closed since mid-March, we
are thankful that many of our loyal tea-loving customers have
shifted to buying our teas online, and in supermarkets and
drugstores. The strong performance of these sales channels in
recent months has provided us with the conviction that we are on
the right path for the future. In these trying times, more than
ever, consumers see and appreciate the benefits of our health and
wellness teas. We are on a journey to creating a much leaner and
more profitable retail store network. Once completed, we will be in
an even better position to focus on our standing as tea experts and
the leading loose-leaf tea purveyor in North America. We recognize
that these have been difficult times for our employees and I thank
them sincerely for their devotion to DAVIDsTEA,” stated Herschel
Segal, Founder, Chairman and Interim CEO of DAVIDsTEA.
“Our performance in Fiscal 2019
and the impact of COVID-19 clearly demonstrate the need for change
on an accelerated timeline. The strong performance of our
e-commerce and wholesale channels during the first 17 weeks of
Fiscal 2020, and especially since the closure of all of our stores
in mid-March, provides us with confidence in our transformation
strategy. Now, we must right-size our North American retail
footprint to better reflect our omnichannel strategy and our
growing emphasis on e-commerce and wholesale channels, and leverage
our exceptional brand to expand our product portfolio. Our success
going forward depends in large part on our ability to strategically
exit unprofitable retail stores,” said Frank Zitella, COO and
CFO.
Mr. Segal continued, “The unpredictability
surrounding the recovery from the COVID-19 pandemic and the impact
of changes in consumer behavior represent significant uncertainties
for all retailers. Our challenge is to execute on our
strategy to restructure our North American retail footprint in
order to decrease the ongoing losses caused by unprofitable stores.
If we are not successful in negotiations with our landlords to
optimize our retail footprint to reflect the new circumstances, we
may need to pursue a formal restructuring in order to do so. With
the full support of the Board of Directors, our management team is
aligned and focused on ensuring we successfully navigate the
challenges ahead, to emerge with a profitable network of stores
complementing our e-commerce wholesale distribution channels.”
All of our retail stores have been closed since
March 17, 2020 due to efforts to curb the spread of COVID-19 and
government-mandated confinement measures. Accordingly, we have not
remitted rental payments for the months of April, May and June at
this time. As retailers across North America begin to resume
operations, we are cautiously balancing the safety of our employees
and customers, with plans to test the re-opening of select stores;
however, we will only proceed with this test once we have a clearer
vision of how the pandemic unfolds, and have assessed the impact of
any government and landlord programs on our business, and the
manner in which we address the operational constraints placed upon
us as part of the government deconfinement measures. At this time,
the Company is unable to predict when, if and how many of its
retail locations it will open. We will continue to monitor
the situation as others in retail re-emerge, determining the
appropriate timing and approach for a safe re-opening of our
stores. Subsequent to year-end, the Company did not renew three
store leases in Canada and exited one store early in the United
States. As of June 15, 2020, the Company is in negotiations
for the exit of eight additional stores.
Preliminary Financial Information for
the Period Ended May 30, 2020
The following preliminary financial information
for the 17-week period ended May 30, 2020 is unaudited and subject
to change:
- Sales during the period amounted to $41.2 million, down 27.4%
compared to the same period last year. This reflects the
closure of all stores starting March 17, 2020 due to the COVID-19
pandemic, offset by exceptional sales growth in our e-commerce and
wholesale channels.
- E-commerce sales increased by 170.5% and wholesale sales
increased by 82.9% compared to the same period last year.
- Sales generated after we shuttered our stores for the period
March 18, 2020 through May 30, 2020, grew significantly.
E-commerce sales increased by 268.2% and wholesale sales increased
by 81.1% compared to the same period last year.
Under the circumstances, the Company is pleased
with these results and we continue to benefit from a solid
financial position with no debt and a cash position of $41 million
as of May 30, 2020.
Operating Results for the Fourth Quarter
of Fiscal 2019 Compared to the Fourth Quarter of Fiscal
2018
Sales. Sales decreased 11.6% to $73.5 million
from $83.1 million in the fourth quarter of Fiscal 2018. Sales
through e-commerce and wholesale channels increased $2.8 million
and 18.5% driven primarily by greater online adoption in both
Canada and the U.S., as well as by increased demand in our grocery
chain distribution channel. Offsetting this was a decline in retail
sales of $12.4 million, and a decline of $11.5 million and 17.3% in
comparable same-store sales.
Gross Profit. Gross profit decreased by 1.2%, or
$0.5 million, to $39.1 million for the three months ended February
1, 2020, from the prior year quarter. IFRS 16 replaces the
straight-line operating lease expense with a depreciation charge
for right-of-use assets and interest expense on lease liabilities.
Accordingly, straight-line operating lease expense is no longer
included in cost of sales in arriving at gross profit. Prior to the
adoption of IFRS 16, straight-line operating lease expense
amounting to $5.9 million would have been included in arriving at
gross profit. Excluding the impact of IFRS 16, gross profit
decreased by $6.3 million to $33.2 million, representing a gross
profit of 45.2% for the three months ended February 1, 2020, a
decrease of 2.4% from the prior year quarter resulting from a shift
in product sales mix and the deleveraging of fixed costs due to
negative comparable store sales.
Selling, General and Administration Expenses
(“SG&A”). SG&A expenses increased by $4.0 million, or 10.2%
to $45.1 million for the three months ended February 1, 2020 from
the prior year quarter. Under IFRS 16, SG&A includes $2.9
million of depreciation in connection with our right-of-use assets.
Excluding the impact of IFRS 16, SG&A would have amounted to
$42.2 million, a decrease of $1.3 million, or 3.2%, from the prior
year quarter and as a percentage of sales would have amounted to
57.3% representing an increase of 8.2% over the prior year quarter.
Excluding the impact of IFRS 16 and impairment of property,
equipment and right-of-use assets for the three months ended
February 1, 2020 and the impact of onerous contracts, impairment of
property, equipment, executive separation cost related to salary,
costs related to the strategic review and proxy contest and ERP
project termination costs for the three months ended February 2,
2019, Adjusted SG&A increased by $0.3 million for the three
months ended February 1, 2020. As a percentage of sales and
excluding the impact of IFRS 16, Adjusted SG&A increased to
42.8% from 37.4% due to the decline in retail sales.
Results from Operating Activities. Loss from
operating activities was $6.0 million as compared to a loss of $1.3
million in the prior year quarter. Excluding the impact of IFRS 16,
loss from operating activities would have amounted to $8.9 million,
an increase of $7.6 million from the prior year quarter. This
increase is mainly explained by the increase in the impairment of
property, equipment and right-of-use assets in 2019. Adjusted
operating income, which excludes any impact of executive separation
cost related to salary, impairment of property, equipment and
right-of-use assets, impact from onerous contracts, costs related
to the strategic review and proxy contest, and ERP project
termination, was $1.8 million compared to $8.4 million in the prior
year quarter.
Finance Costs. Finance costs remained stable at
$1.4 million in the three months ended February 1, 2020 as compared
to the prior year quarter. Finance costs under IFRS 16 includes
interest expense from lease liabilities measured at the present
value of lease payments to be made over the lease term. Excluding
the impact of IFRS 16, and primarily due to the revision of an
estimate for interest on an uncertain tax position, interest
earnings of $0.3 million compares favorably to an expense of $1.4
million in the prior year quarter.
Finance Income. Finance income of $0.2 million
is derived primarily from interest on cash on hand and has
increased slightly from prior year quarter.
Provision (Recovery) for Income Tax. Recovery
for income tax amounted to $1.5 million compared to a provision of
$10.7 million in the prior year quarter. The recovery is due to the
adjustment of the provision for uncertain tax provision taken in
the prior year quarter. The provision taken in the prior year
quarter was due primarily to a write-down of the deferred income
tax assets and a provision for uncertain tax position.
EBITDA and Adjusted EBITDA. EBITDA, which
excludes non-cash and other items in the current and prior periods,
was negative $1.3 million in the quarter ended February 1, 2020
compared to a $0.8 million in the prior year quarter. Excluding the
impact of IFRS 16, EBITDA would have amounted to a negative $7.2
million, representing a decrease of $8.0 million over the prior
year quarter. Adjusted EBITDA for the quarter amounted to $9.7
million compared to $10.9 million in the prior year quarter.
Excluding the impact of IFRS 16, impairment of property, equipment
and right-of-use assets, stock-based compensation and loss on
disposal of property and equipment for the three months ended
February 1, 2020 and the impact of stock-based compensation,
executive separation costs related to salary, impairment of
property, equipment, onerous contracts, deferred rent, loss on
disposal of property and equipment, costs related to the strategic
review and proxy contest, and ERP project termination costs for the
three months ended February 2, 2019, Adjusted EBITDA decreased by
$7.0 million to $3.9 million.
Net Loss. Net loss was $5.7 million in the
quarter ended February 1, 2020 compared to a net loss of $13.3
million in the prior year quarter. Excluding the impact of IFRS 16,
Net loss would have amounted to $7.0 million, representing a
decrease in net loss of $6.3 million over the prior year quarter.
Adjusted net income, which excludes the impact from executive
separation cost related to salary, impairment of property,
equipment and right-of-use assets, impact of onerous contracts, ERP
project termination costs and costs related to strategic review and
proxy contest, write-down of deferred income tax assets and the
setup of deferred income tax assets resulting from the probability
of using operating tax loss carry forwards, was $1.9 million
compared to $6.4 million in the prior year quarter.
Fully Diluted Net Loss per Share. Fully diluted
net loss per common share was $0.21 compared to a net loss of $0.51
in the fourth quarter of Fiscal 2018. Adjusted fully diluted net
income per common share, which is adjusted net income on a
fully-diluted weighted average shares outstanding basis, was $0.12
per share compared to $0.25 per share in the same quarter of prior
year.
Cash on Hand. At the end of the fourth quarter
of Fiscal 2019, the Company had cash amounting to $46.3 million.
Our cash position enables us to execute our strategy and invest
further in funding working capital, transformative technology
improvements and related infrastructure.
Fiscal Year Ended February 1, 2020
Compared to Fiscal Year Ended February 2, 2019
Sales. Sales for Fiscal 2019 decreased by 7.7%,
or $16.3 million, to $196.5 million from $212.8 million in Fiscal
2018. Sales from our e-commerce and wholesale channels increased by
$7.3 million and 20.9%, driven primarily by greater online adoption
as well as by increased demand in our grocery distribution channel.
Offsetting this was a decline in retail sales of $23.6 million and
a decline of $22.1 million, or 12.7%, in comparable same-store
sales.
Gross Profit. Gross profit increased by 10.8%
and $10.6 million, to $108.6 million in Fiscal 2019 in comparison
to Fiscal 2018. IFRS 16 replaces the straight-line operating lease
expense with a depreciation charge for right-of-use assets and
interest expense on lease liabilities. Accordingly, straight-line
operating lease expense is no longer included in cost of sales in
arriving at gross profit. Prior to the adoption of IFRS 16,
straight-line operating lease expense amounting to $23.2 million
would have been included in arriving at gross profit. Excluding the
impact of IFRS 16, gross profit decreased by $12.6 million to $85.4
million, representing a gross profit of 43.5% for Fiscal 2019, a
decrease of 2.6% compared to Fiscal 2018 driven by a shift in
product sales mix and the deleveraging of fixed costs due to
negative comparable store sales.
Selling, General and Administration Expenses. SG&A increased
by 7.6% and $9.6 million, to $135.3 million in Fiscal 2019,
compared to Fiscal 2018. Under IFRS 16, SG&A includes $12.1
million of depreciation in connection with our right-of-use assets.
Excluding the impact of IFRS 16, SG&A would have amounted to
$123.3 million, a decrease of $2.5 million and 2.0%, from Fiscal
2018 and as a percentage of sales would have amounted to 62.7%
representing an increase of 3.6% over Fiscal 2018. Excluding the
impact of IFRS 16 and impairment of property, equipment and
right-of-use assets for Fiscal 2019 and the impact of executive
separation cost related to salary, impairment of property,
equipment and right-of-use assets, onerous contracts, costs related
to the strategic review and proxy contest and the ERP project
termination for Fiscal 2018, Adjusted SG&A decreased by $2.3
million for Fiscal 2019. As a percentage of sales, Adjusted
SG&A increased to 53.7% from 50.7% due to the decline in retail
sales.
Results from Operating Activities. Loss from operating
activities was $26.7 million as compared to a loss of $27.7 million
in the same period in 2018. Excluding the impact of IFRS 16, loss
from operating activities would have amounted to $37.9 million, an
increase of $10.1 million from the same period in 2018. This is
mainly due to the impairment of property, equipment and
right-of-use assets in 2019. Adjusted operating loss, which
excludes any impact from executive separation costs related to
salary, impairment of property, equipment and right-of-use assets,
onerous contracts, costs related to the strategic review and proxy
contest, and ERP project terminations was $20.1 million compared to
a loss of $9.9 million in the same period in the prior year,
explained substantially by the decline in revenue compared to the
prior year .
EBITDA and Adjusted EBITDA. EBITDA, which
excludes non-cash and other items in the current and prior periods,
was negative $7.6 million in Fiscal 2019 compared to negative $19.5
million in Fiscal 2018. Excluding the impact of IFRS 16, EBITDA
would have amounted to a negative $30.8 million, representing an
increase of $11.3 million over Fiscal 2018. Adjusted EBITDA for
Fiscal 2019 amounted to $11.1 million compared to a negative $1.3
million in Fiscal 2018. Excluding the impact of IFRS 16, impairment
of property, equipment and right-of-use assets, stock-based
compensation and loss on disposal of property and equipment for
Fiscal 2019 and the impact of stock-based compensation, executive
separation costs related to salary, impairment of property and
equipment, onerous contracts, loss on disposal of property and
equipment, deferred rent, costs related to the strategic review and
proxy contest, and ERP project termination for Fiscal 2018,
Adjusted EBITDA decreased by $10.8 million, to negative $12.1
million, and explained substantially by the decline in revenue
compared to the prior year.
Net Loss. Net loss was $31.2 million in Fiscal
2019 compared to a net loss of $33.5 million in Fiscal 2018.
Excluding the impact of IFRS 16, Net loss would have amounted to
$35.4 million, representing an increase of $1.9 million in net loss
over Fiscal 2018. Adjusted net loss, which excludes the impact from
executive separation cost related to salary, impairment of
property, equipment and right-of-use assets, impact of onerous
contracts, ERP project termination costs and costs related to
strategic review and proxy contest, write-down of deferred income
tax assets and the setup of deferred income tax assets resulting
from the probability of using operating tax loss carry forwards,
was $19.4 million compared to $6.8 million in the prior year
period, and explained substantially by the decline in revenue
compared to the prior year.
Finance Costs. Finance costs amounted to $6.7
million in Fiscal 2019, an increase of $5.1 million from Fiscal
2018. Finance costs under IFRS 16 includes interest expense from
lease liabilities measured at the present value of lease payments
to be made over the lease term. The Company recognized a lease
liability of $102.2 million on initial application of IFRS 16.
Excluding the impact of IFRS 16, interest expense would have been
positive $0.3 million due to the adjustment on the interest and
penalty on provision for uncertain tax position as compared to $1.6
million in Fiscal 2018.
Finance Income. Finance income of $0.7 million
in Fiscal 2019 is derived primarily from interest on cash on hand
and has increased slightly from Fiscal 2018.
Provision (Recovery) for Income Tax. Recovery
for income tax amounted to $1.5 million compared to a provision of
$4.9 million in Fiscal 2018. The recovery is due to the adjustment
of the provision for uncertain tax provision taken in the prior
year. Our effective tax rates were 4.9% and (17.0%) in Fiscal 2019
and 2018, respectively. The effective tax rate increased primarily
from the write-down of prior year deferred income tax assets and an
adjustment to the provision for uncertain tax position in the
current year.
Net Loss per Share. Fully diluted net loss per
common share was $1.20 in Fiscal 2019 compared to $1.29 in Fiscal
2018. Adjusted fully diluted loss per common share, which is
adjusted net loss on a fully-diluted weighted average shares
outstanding basis, was $0.58 per share in Fiscal 2019 compared to
$0.26 per share in Fiscal 2018.
Liquidity and Capital
Resources
As at February 1, 2020, we had $46.3 million of
cash primarily held by major Canadian financial institutions. Total
current assets less the sum of trade and other payables and
deferred revenue was $52.9 million and $65.8 million, for Fiscal
2019 and Fiscal 2018, respectively.
Our primary source of liquidity is cash on hand.
Our primary cash needs are to finance non-cash working capital,
transformative investments in infrastructure and information
technology and exiting leases on favorable terms
Capital expenditures typically vary depending on
the timing of infrastructure-related and technology
investments. During Fiscal 2019, capital expenditures totaled
$3.6 million. We devoted approximately 72% of our capital
expenditures to make continued investments in our technology
infrastructure. The remainder of the capital expenditures was used
to renovate and enhance existing stores.
Our primary working capital requirements are for
the purchase of store inventory and payment of payroll, rent and
other store operating costs. Our working capital requirements
fluctuate during the year, rising in the second and third fiscal
quarters as we take title to increasing quantities of inventory in
anticipation of our peak selling season in the fourth fiscal
quarter. We funded our capital expenditures and working capital
requirements from cash on hand and net cash provided by our
operating activities.
Although we generally anticipate that, based on
our current forecasts, we have sufficient cash and cash equivalents
meet our current and anticipated near-term needs, we are in the
process of reevaluating our business and implementing new
strategies. If we are unable to implement our strategies related to
optimizing our North American retail footprint in order to decrease
losses caused by unprofitable stores, decreasing our costs
generally and accelerating the growth of our online store, our
Board of Directors may pursue a formal restructuring,
reorganization or other similar actions under applicable Canadian
and/or United States laws.
Extension for Filing First Quarter
Fiscal 2020 Financial Results
The COVID-19 crisis and related events has
required management to devote significant time and attention to
managing the business in this rapidly evolving environment and on
June 5, 2020, the Company announced that it would be releasing its
first quarter financial results for the period ended May 2, 2020,
originally due on June 16, 2020, no later than July 31,
2020.
Adoption of IFRS 16 - Leases
The Company adopted IFRS 16 -
Leases, replacing IAS 17 - Leases and Related interpretations,
using the modified retrospective approach, effective for the annual
reporting period beginning on February 3, 2019. As a result, the
Company’s results for the fourth quarter and the full year of
Fiscal 2019 reflect lease accounting under IFRS 16. Comparative
figures for the fourth quarter and full year of Fiscal 2018 have
not been restated and continue to be reported under IAS 17, Leases.
Refer to Notes 3 and 4 of our consolidated financial statements for
Fiscal 2019 for additional details on the implementation of IFRS
16.
|
Condensed
Consolidated Financial Data |
(Canadian
dollars, in thousands, except per share information) |
|
|
For the three months
ended |
|
For the year ended |
|
|
|
|
|
|
February 1, 2020 |
|
|
|
|
|
|
|
|
|
|
|
February 1, 2020 |
|
|
|
|
|
|
|
February 1, |
|
|
|
Excluding impact |
|
|
|
February 2, |
|
|
|
February 1, |
|
|
|
Excluding impact |
|
|
|
February 2, |
|
|
|
2020 |
|
|
|
of IFRS 16
(1) |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
of IFRS 16
(1) |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
$ |
73,538 |
|
|
$ |
73,538 |
|
|
$ |
83,144 |
|
|
$ |
196,462 |
|
|
$ |
196,462 |
|
|
$ |
212,753 |
|
Cost of sales |
|
34,457 |
|
|
|
40,321 |
|
|
|
43,581 |
|
|
|
87,886 |
|
|
|
111,092 |
|
|
|
114,774 |
|
Gross profit |
|
39,081 |
|
|
|
33,217 |
|
|
|
39,563 |
|
|
|
108,576 |
|
|
|
85,370 |
|
|
|
97,979 |
|
SG&A expenses |
|
45,050 |
|
|
|
42,153 |
|
|
|
40,857 |
|
|
|
135,306 |
|
|
|
123,255 |
|
|
|
125,722 |
|
Operating loss |
|
(5,969 |
) |
|
|
(8,936 |
) |
|
|
(1,294 |
) |
|
|
(26,730 |
) |
|
|
(37,885 |
) |
|
|
(27,743 |
) |
Finance costs |
|
1,445 |
|
|
|
(212 |
) |
|
|
1,377 |
|
|
|
6,751 |
|
|
|
(211 |
) |
|
|
1,614 |
|
Finance income |
|
(213 |
) |
|
|
(213 |
) |
|
|
(126 |
) |
|
|
(784 |
) |
|
|
(784 |
) |
|
|
(700 |
) |
Provision (recovery) of income
tax |
|
(1,500 |
) |
|
|
(1,500 |
) |
|
|
10,733 |
|
|
|
(1,500 |
) |
|
|
(1,500 |
) |
|
|
4,882 |
|
Net loss |
$ |
(5,701 |
) |
|
$ |
(7,011 |
) |
|
$ |
(13,278 |
) |
|
$ |
(31,197 |
) |
|
$ |
(35,390 |
) |
|
$ |
(33,539 |
) |
EBITDA1 |
$ |
(1,347 |
) |
|
$ |
(7,211 |
) |
|
$ |
811 |
|
|
$ |
(7,584 |
) |
|
$ |
(30,790 |
) |
|
$ |
(19,540 |
) |
Adjusted SG&A1 |
|
34,346 |
|
|
|
31,449 |
|
|
|
31,125 |
|
|
|
117,526 |
|
|
|
105,475 |
|
|
|
107,841 |
|
Adjusted operating income
(loss)1 |
|
4,735 |
|
|
|
1,768 |
|
|
|
8,438 |
|
|
|
(8,950 |
) |
|
|
(20,105 |
) |
|
|
(9,862 |
) |
Adjusted EBITDA1 |
|
9,721 |
|
|
|
3,857 |
|
|
|
10,940 |
|
|
|
11,109 |
|
|
|
(12,097 |
) |
|
|
(1,272 |
) |
Adjusted net income
(loss)1 |
$ |
3,253 |
|
|
$ |
1,943 |
|
|
$ |
6,401 |
|
|
$ |
(15,167 |
) |
|
$ |
(19,360 |
) |
|
$ |
(6,773 |
) |
Basic and fully diluted loss
per common share |
$ |
(0.21 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.51 |
) |
|
$ |
(1.20 |
) |
|
$ |
(1.36 |
) |
|
$ |
(1.29 |
) |
Adjusted basic income (loss)
per common share1 |
$ |
0.12 |
|
|
$ |
0.07 |
|
|
$ |
0.25 |
|
|
$ |
(0.58 |
) |
|
$ |
(0.74 |
) |
|
$ |
(0.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted fully diluted income
(loss) per common share1 |
$ |
0.12 |
|
|
$ |
0.07 |
|
|
$ |
0.25 |
|
|
$ |
(0.58 |
) |
|
$ |
(0.74 |
) |
|
$ |
(0.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit as a percentage
of sales |
|
53.1 |
% |
|
|
45.2 |
% |
|
|
47.6 |
% |
|
|
55.3 |
% |
|
|
43.5 |
% |
|
|
46.1 |
% |
SG&A as a percentage of
sales |
|
61.3 |
% |
|
|
57.3 |
% |
|
|
49.1 |
% |
|
|
68.9 |
% |
|
|
62.7 |
% |
|
|
59.1 |
% |
Adjusted SG&A as a
percentage of sales1 |
|
46.7 |
% |
|
|
42.8 |
% |
|
|
37.4 |
% |
|
|
59.8 |
% |
|
|
53.7 |
% |
|
|
50.7 |
% |
Number of stores at end of
period |
|
231 |
|
|
|
231 |
|
|
|
237 |
|
|
|
231 |
|
|
|
231 |
|
|
|
237 |
|
Comparable sales decline for
the period |
|
(17.3 |
%) |
|
|
(17.3 |
%) |
|
|
(1.6 |
%) |
|
|
(12.7 |
%) |
|
|
(12.7 |
%) |
|
|
(6.1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by (used in)
operating activities |
$ |
24,878 |
|
|
$ |
19,014 |
|
|
$ |
24,353 |
|
|
$ |
33,108 |
|
|
$ |
9,902 |
|
|
$ |
(13,228 |
) |
Cash provided by (used in)
financing activities |
|
(5,859 |
) |
|
|
5 |
|
|
|
— |
|
|
|
(23,192 |
) |
|
|
14 |
|
|
|
82 |
|
Cash used in investing
activities |
|
(726 |
) |
|
|
(726 |
) |
|
|
(993 |
) |
|
|
(5,652 |
) |
|
|
(5,652 |
) |
|
|
(8,264 |
) |
Decrease in cash during the
period |
|
18,293 |
|
|
|
18,293 |
|
|
|
23,360 |
|
|
|
4,264 |
|
|
|
4,264 |
|
|
|
(21,410 |
) |
Cash, end of period |
$ |
46,338 |
|
|
$ |
46,338 |
|
|
$ |
42,074 |
|
|
$ |
46,338 |
|
|
$ |
46,338 |
|
|
$ |
42,074 |
|
__________________1 Please refer to “Use of Non-IFRS
financial measures” in this press release.
Use of Non-IFRS Financial
Measures
This press release includes “non-IFRS financial
measures” defined as including: 1) EBITDA and Adjusted EBITDA, 2)
Adjusted operating loss, 3) Adjusted selling, general and
administration expenses, 4) Adjusted net income (loss), 5) Adjusted
fully diluted income (loss) per share and 6) Adjusted selling,
general and administration expenses as a percentage of sales. These
non-IFRS financial measures are not defined by and in accordance
with IFRS and may differ from similar measures reported by other
companies. We believe that these non-IFRS financial measures
provide knowledgeable investors with useful information with
respect to our historical operations. We present these non-IFRS
financial measures as supplemental performance measures because we
believe they facilitate a comparative assessment of our operating
performance relative to our performance based on our results under
IFRS, while isolating the effects of some items that vary from
period-to-period but not in substitution to IFRS financial
measures.
Please refer to the non-IFRS financial measures
section in the Management’s Discussion and Analysis section of our
Form 10-K for a reconciliation to IFRS financial measures.
Note
This release should be read in conjunction with
the Company’s Management’s Discussion and Analysis, which will be
filed by the Company with the Canadian securities regulatory
authorities on www.sedar.com and with the U.S. Securities and
Exchange Commission on www.sec.gov and will also be available
in the Investor Relations section of the Company’s website at
www.davidstea.com.
Caution Regarding Forward-Looking
Statements
This press release includes statements that
express our opinions, expectations, beliefs, plans or assumptions
regarding future events or future results that are, or may be
deemed to be, “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995 (the “Act”).
The following cautionary statements are being made pursuant to the
provisions of the Act and with the intention of obtaining the
benefits of the “safe harbor” provisions of the Act. These
forward-looking statements can generally be identified by the use
of forward-looking terminology, including the terms “believes”,
“expects”, “may”, “will”, “should”, “approximately”, “intends”,
“plans”, “estimates” or “anticipates” or, in each case, their
negatives or other variations or comparable terminology. These
forward-looking statements include all matters that are not
historical facts and include statements regarding our intentions,
beliefs or current expectations concerning, among other things, the
COVID-19 pandemic, our strategy of transforming to e-commerce and
wholesale sales, future sales through our e-commerce and wholesale
channels, the closing of certain of our retail stores, future lease
liabilities, our results of operations, financial condition,
liquidity and prospects, the impact of the COVID-19 pandemic on the
global macroeconomic environment, and our ability to regain and
maintain compliance with Nasdaq listing requirements relating to
the bid price for the Company’s shares, failure to which prior to
December 28, 2020 may result in the Company’s common stock being
delisted from Nasdaq.
While we believe these opinions and expectations
are based on reasonable assumptions, such forward-looking
statements are inherently subject to risks, uncertainties and
assumptions about us, including the risk factors set forth in our
Form 8-K and in our Form 10-K for the fiscal year ended February 1,
2020, both filed with the SEC today.
Conference Call Information
A conference call to discuss the fourth quarter
Fiscal 2019 financial results is scheduled for June 15, 2020, at
5:00 pm Eastern Time. The conference call will be webcast and may
be accessed via the Investor Relations section of the Company’s
website at ir.davidstea.com. An online archive of the webcast will
be available within two hours of the conclusion of the call and
will remain available for one year.
About DAVIDsTEA
DAVIDsTEA is a leading retailer of specialty
tea, offering a differentiated selection of proprietary loose-leaf
teas, pre-packaged teas, tea sachets and tea-related gifts,
accessories and food and beverages through over 220 company-owned
and operated DAVIDsTEA retail stores in Canada and the United
States, as well as through its e-commerce platform at
davidstea.com. A selection of DAVIDsTEA products are also available
in grocery stores across Canada through its growing wholesale
distribution channel. The Company is headquartered in Montréal,
Canada.
Investor Contact |
Media Contact |
MaisonBrison Communications |
PELICAN PR |
Pierre Boucher |
Lyla Radmanovich |
514.731.0000 |
514-845-8763 |
investors@davidstea.com |
media@rppelican.ca |
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