Colabor Group Inc. (TSX: GCL) (“Colabor” or the “Company”) reports
its results for the third quarter ended September 3, 2022.
Third Quarter
2022 Financial Highlights and Subsequent
Event:
-
Sales increased by 10.4% to $145.7 million, compared to $131.9
million for the corresponding period of 2021 resulting mainly from
the impact of inflation and an increase in volume resulting from
business and asset acquisitions in the second quarter and given the
less restrictive confinement measures in 2022 compared to
2021;
-
Net earnings from continuing operations reached $2.8 million
compared to $2.3 million for the corresponding period of 2021
due to the increase in adjusted EBITDA(1), mitigated by the
increase in depreciation and amortization expenses;
-
Adjusted EBITDA(1) increased to $8.9 million from $7.8 million for
the corresponding period of 2021 and increase in adjusted EBITDA(1)
margin to 6.1% of sales compared to 5.9% of sales during the
corresponding period of 2021. Those increases are mainly explained
by an improvement of gross margin, mitigated by increase in labor
costs and other supply chain costs;
-
Cash flow from operating activities increased to $8.8 million
compared to $7.4 million for the third quarter of 2021,
resulting from a lower utilization of working capital(4); and
-
After the end of the quarter, we announced the relocation of our
head office and warehouse located in Boucherville by the end of
2023 and the conclusion of a new lease located in the Saint-Bruno
Industrial Ecopark. The new building's goal is to obtain LEED and
Net Zero Carbon certifications and it will offer a stimulating work
environment, ideal for the well-being of employees.
“I am pleased with our third quarter results,
with revenues up 10.4%, gross margin up 7.5% and net income up
39.0% compared to the third quarter last year. These quarterly
results, with the highest adjusted EBITDA(1) in the last eight
quarters, confirm the resilience of our business model following
the effects of the pandemic and inflationary pressures,” said Mr.
Frenette, President and Chief Executive Officer of Colabor.
“In addition, from a balance sheet perspective,
we have reduced our debt since the beginning of the year, while
completing two acquisitions in the second quarter. Combined with
our diverse 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,”
added Louis Frenette.
Table of third
quarter 2022 Financial
Highlights:
Financial highlights |
12 weeks |
36 weeks |
(in thousands of dollars, except percentages, per share data and
financial leverage ratio) |
2022 |
2021 |
|
2022 |
2021 |
$ |
$ |
|
$ |
$ |
Sales from continuing operations |
145,670 |
131,889 |
|
380,825 |
325,990 |
Adjusted EBITDA(1) |
8,894 |
7,821 |
|
19,213 |
18,340 |
Adjusted EBITDA(1) margin (%) |
6.1 |
5.9 |
|
5.0 |
5.6 |
Net earnings from continuing operations |
2,832 |
2,288 |
|
2,869 |
2,917 |
Net earnings |
2,832 |
2,038 |
|
2,802 |
2,703 |
Per share - basic and diluted ($) |
0.03 |
0.02 |
|
0.03 |
0.03 |
Cash flow from operating activities |
8,757 |
7,448 |
|
19,962 |
9,717 |
Financial position |
|
|
|
As at |
As at |
|
|
|
|
September 3, |
December 25, |
|
|
|
|
2022 |
2021 |
Net debt(2) |
|
|
|
41,360 |
48,366 |
Financial leverage ratio(3) |
|
|
|
1.6x |
1.9x |
(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. |
Results for the
Third Quarter of
2022
Consolidated sales for the third quarter
amounted to $145.7 million compared to $131.9 million during the
corresponding quarter of 2021, an increase of 10.4%. Sales for the
Distribution segment increased by 10.0%, explained by a volume
increase from restaurants, the impact of inflation and the
acquisition of assets in the Laurentians and Outaouais regions.
Wholesale segment sales increased by 10.7% explained by the impact
of inflation, mitigated by a week-long strike at our Boucherville
distribution center.
Adjusted EBITDA(1) from continuing activities
was $8.9 million or 6.1% of sales from continuing activities
compared to $7.8 million or 5.9% during 2021. These variations are
mainly explained by the increase in sales and an improvement of
gross margin, mitigated by increase in labor costs and other supply
chain costs and our investments for the repositioning of our
private brand.
Net earnings from continuing operations were
$2.8 million, up from $2.3 million for the corresponding
quarter of the previous year, resulting essentially from the
increase of the adjusted EBITDA(1) as explained previously,
mitigated by higher depreciation and amortization expenses.
Net earnings for the third quarter were
$2.8 million, compared to $2.0 million for the
corresponding period of 2021 and are explained by the facts
described above.
Results for the
36-week period of
2022
Consolidated sales for the 36-week period were
$380.8 million compared to $326.0 million in the corresponding
period of 2021, an increase of 16.8%, of which 18.0% from the
Distribution segment and 13.2% from the Wholesale segment. Adjusted
EBITDA(1) from continuing operations reached $19.2 million or
5.0% of sales from continuing operations compared to $18.3 million
or 5.6% in 2021. These variations are mainly due to an increase in
sales and gross margin, mitigated by a decrease in subsidies
obtained of $2.6 million. Excluding the impact of subsidies
obtained, the adjusted EBITDA margin(1) would have been 5.0% in
2022 and 4.8% in 2021. Net earnings from continuing operations were
$2.9 million, comparable to the 36-week period of last year.
Cash Flow and Financial
Position
Cash flows from operating activities reached
$8.8 million and $20.0 million for the 12 and 36-week periods of
2022, respectively, compared to $7.4 million and $9.7 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 September 3, 2022, the Company's
working capital(4) was $36.8 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 September 3, 2022, the Company's net
debt(2) was down to $41.4 million, compared to $48.4 million at the
end of the fiscal year 2021. This decrease is mainly due to credit
facility repayment of $7.3 million, of which $5.0 million as
optional repayment.
Outlook
“I am very proud of the recent announcement of
the relocation of our head office and warehouse located in
Boucherville. This marks an important milestone and as we set out
to accelerate the achievement of our strategic plan. This new
modern and perfectly located distribution center will allow us from
2024, to increase our capacity to develop western Quebec. We remain
cautious and focused on managing our cost structure and our
business model allows us to be confident facing various market
pressures,” 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) |
2022 |
2021 |
|
2022 |
2021 |
|
$ |
$ |
|
$ |
$ |
Net earnings from continuing operations |
2,832 |
2,288 |
|
2,869 |
2,917 |
Income taxes |
1,097 |
1,130 |
|
1,140 |
1,454 |
Financial expenses |
1,080 |
984 |
|
3,030 |
3,823 |
Operating earnings |
5,009 |
4,402 |
|
7,039 |
8,194 |
Expenses for stock-based compensation plan |
111 |
81 |
|
313 |
148 |
Costs not related to current operations |
102 |
75 |
|
1,247 |
230 |
Depreciation and amortization |
3,672 |
3,263 |
|
10,614 |
9,768 |
|
|
|
|
|
|
Adjusted EBITDA(1) |
8,894 |
7,821 |
|
19,213 |
18,340 |
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 7 "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, October 14, 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
675595# on your telephone keypad. The recording will be available
from 1:30 p.m. on Friday, October 14, 2022, until 11:59 p.m.
on October 21, 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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