Colabor Group Inc. (TSX: GCL) (“Colabor” or the “Company”) reports
its results for the second quarter ended June 17, 2023.
Second Quarter
2023 Financial Highlights:
-
Sales increased by 19.0% to $164.2 million, compared to $138.0
million for the corresponding period of 2022;
-
Net earnings from continuing operations were $2.3 million
compared to $1.7 million for the corresponding period of
2022;
-
Adjusted EBITDA(1) increased by 16.1% to $9.3 million from $8.0
million for the corresponding period of 2022 with an adjusted
EBITDA(1) margin to 5.7% of sales compared to 5.8% of sales during
the corresponding period of 2022; and
-
Cash flows from operating activities increased to $11.3 million
compared to $(1.2) million during the corresponding period of
2022.
Table of Second
Quarter 2023 Financial
Highlights:
Financial
highlights |
12 weeks |
24 weeks |
(in thousands of dollars, except percentages, per share data and
financial leverage ratio) |
2023 |
2022 |
|
2023 |
2022 |
|
$ |
$ |
|
$ |
$ |
|
Sales from continuing operations |
164,186 |
137,986 |
|
298,109 |
235,155 |
|
Adjusted EBITDA(1) |
9,294 |
8,006 |
|
14,868 |
10,319 |
|
Adjusted EBITDA(1)margin
(%) |
5.7 |
5.8 |
|
5.0 |
4.4 |
|
Net earnings from continuing
operations |
2,314 |
1,690 |
|
2,154 |
37 |
|
Net earnings (loss) |
2,314 |
1,676 |
|
2,154 |
(30 |
) |
Per share - basic and diluted ($) |
0.02 |
0.02 |
|
0.02 |
— |
|
Cash
flow from operating activities |
11,268 |
(1,221 |
) |
12,075 |
11,205 |
|
Financial position |
|
|
As at |
As at |
|
|
|
|
June 17, |
December 31, |
|
|
|
|
2023 |
2022 |
|
Net debt(2) |
|
|
47,315 |
47,764 |
|
Financial leverage ratio(3) |
|
|
2.0x |
2.3x |
|
(1) Non-IFRS measure. Refer to the table
Reconciliation of Net Earnings 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 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 pleased with our second quarter
results. After more than two years of dedicated efforts to improve
our business and profitability, I can once again reaffirm that we
are on the right track. Our second quarter results show revenue
growth of 19.0%, while our adjusted EBITDA(1) increased by 16.1%.
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,”
said Mr. Frenette, President and Chief Executive Officer of
Colabor.
“These results show that our strategic
investments in organic and non-organic growth are paying off,”
added Louis Frenette.
Results for the
Second Quarter of
2023
Consolidated sales for the second quarter were
$164.2 million, an increase of 19.0% compared to $138.0 million
during the corresponding quarter of 2022. Sales for the
Distribution segment increased by 25.6%, as a result of volume
increase, 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 1.7%, mainly as a result of
the impact of inflation.
Adjusted EBITDA(1) from continuing activities
was $9.3 million or 5.7% of sales from continuing activities
compared to $8.0 million or 5.8% during 2022. This change is mainly
as a result of increase in sales.
Net earnings from continuing operations were
$2.3 million, up from $1.7 million for the corresponding quarter of
the previous year, resulting essentially from an increase of the
adjusted EBITDA(1), combined with a decrease in costs not related
to current operations, mitigated by higher depreciation and
amortization, financial and income taxes expenses.
Net earnings for the second quarter were $2.3
million, compared to $1.7 million for the corresponding period of
2022 and are primarily explained by the facts described above.
Results for the
24-week period of
2023
Consolidated sales for the 24-week period
amounted to $298.1 million compared to $235.2 million in the
corresponding period of 2022, an increase of 26.8%, of which 33.2%
from the Distribution segment and 10.7% from the Wholesale segment.
Adjusted EBITDA(1) from continuing operations reached $14.9 million
or 5.0% of sales from continuing operations compared to $10.3
million or 4.4% in 2022. Net earnings from continuing operations
were $2.2 million, up from $nil million in the 24-week period of
last year.
Cash Flow and Financial
Position
Cash flows from operating activities were $11.3
million for the second quarter compared to $(1.2) million for the
corresponding period of 2022. This increase is mainly due to lower
utilization of working capital(4) and higher adjusted EBITDA(1).
The lower utilization of working capital(4) is explained by a
higher collection of receivables in 2023 related to the increase of
sales and the timing of inventories purchases and supplier
payments. Cash flows from operating activities amounted $12.1
million for the 24-week period of 2023 compared to $11.2 million
for the corresponding period of 2022. This increase is mainly due
to higher adjusted EBITDA(1), mitigated by a higher utilization of
working capital(4). 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 to sales growth.
As at June 17, 2023, the Company's working
capital(4) was $49.5 million, up from $48.8 million at the end of
the fiscal 2022. This increase is related to sales growth during
2023.
As at June 17, 2023, the Company's net debt(2)
was down to $47.3 million, compared to $47.8 million at the end of
the fiscal year 2022. This decrease is explained by the increase of
cash, mitigated by the additional use of the credit facility for
$3.3 million.
Outlook
“We intend to continue this momentum by
prioritizing the acceleration of growth and the continuous
improvement of our activities and processes. We are also actively
working on the preparation of our new site located at
Saint-Bruno-de Montarville, to which the relocation is still
scheduled for the end of 2023. This highly strategic project will
allow us to efficiently reach nearly 90.0% of the Quebec market. 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
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 |
24 weeks |
(in thousands of dollars) |
2023 |
2022 |
2023 |
2022 |
|
$ |
$ |
$ |
$ |
Net earnings from continuing operations |
2,314 |
1,690 |
2,154 |
37 |
Income taxes |
854 |
675 |
747 |
43 |
Financial expenses |
1,383 |
979 |
2,625 |
1,950 |
Operating earnings |
4,551 |
3,344 |
5,526 |
2,030 |
Expenses for stock-based compensation plan |
60 |
123 |
149 |
202 |
Costs not related to current
operations |
2 |
831 |
51 |
1,145 |
Depreciation and
amortization |
4,681 |
3,708 |
9,142 |
6,942 |
Adjusted EBITDA(1) |
9,294 |
8,006 |
14,868 |
10,319 |
Additional Information
The Management's 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 Wednesday, July 26, 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
237404# on your telephone keypad. The recording will be available
from 1:30 p.m. on Wednesday, July 26, 2023, until 11:59 p.m.
on August 2, 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/3oZ20Ow. This new link allows any participant
to access the conference call by clicking on the URL link and enter
their name and phone number.
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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