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- Revenues of
$23.2 million , with continued increase in online and wholesale channels of$2.9 million and 17.2% to$19.9 million for the quarter - Adjusted EBITDA of
$2.5 million - Cash of
$31.3 million as atMay 1, 2021 - Plan of Arrangement approved by creditors on
June 11, 2021 and under whichDAVIDsTEA will distribute approximately$18.0 million in settlement of all claims
“We expect to emerge from CCAA a transformed and radically different organization with a digital-first strategy that required changes to every aspect of our business. Over the past year, we have focused our efforts to find new ways to engage with tea lovers and to replicate our in-store tea discovery experience across multiple digital platforms. But while the way we connect with our customers has evolved, our purpose remains the same. As a leading tea merchant with a strong brand, we seek to share our passion and love for tea, and our unique and innovative blends, with new audiences. We have now laid the foundation to scale and expand our business in a borderless environment both in
“Our transformation journey continues as we post another quarter of positive Adjusted EBITDA with continued sales momentum in e-commerce and wholesale channels. Last week, the Plan of Arrangement under CCAA was approved by creditors, which we expect will be approved by the courts imminently. We are thankful for the support that we have received from our employees, landlords and other creditors. We believe that when the CCAA process is behind us, we can expect to fully dedicate our time and efforts to unleash the full value and potential of the DAVIDsTEA brand as a digital-first company. We believe that our financial position allows us to support continued innovation, meet our working capital needs and make the right strategic investments to grow our business as we drive toward sustained profitable growth,” emphasised
Operating Results for the First Quarter of Fiscal 2021
Three-months ended
Sales. Sales for the three-months ended
Gross Profit. Gross profit of
Selling, General and Administration Expenses. Selling, general and administration expenses (“SG&A”) decreased by
Results from Operating Activities. Earnings from operating activities was
Finance Costs. Finance costs amounted to almost nil in the three-months ended
Finance Income. Finance income of
Net income (loss). Net income was
Fully diluted earnings (loss) per common share. Fully diluted earnings per common share was
EBITDA and Adjusted EBITDA. EBITDA, which excludes non-cash and other items in the current and prior periods, was
Liquidity and Capital Resources
As at
Working capital, excluding liabilities subject to compromise of
Our working capital requirements are for the purchase of inventory and payment of payroll and other 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 fund our capital expenditures and working capital requirements from a combination of cash on hand and cash provided by operating activities.
As at
Condensed Consolidated Financial Data
(Canadian dollars, in thousands, except per share information)
For the three-months ended | |||||||
2021 | 2020 | ||||||
Sales | $ | 23,249 | $ | 32,242 | |||
Cost of sales | 12,481 | 17,569 | |||||
Gross profit | 10,768 | 14,673 | |||||
SG&A expenses | 9,194 | 21,634 | |||||
Restructuring plan activities, net | (1,602 | ) | 37,400 | ||||
Operating income (loss) | 3,176 | (44,361 | ) | ||||
Finance costs | 10 | 1,667 | |||||
Finance income | (55 | ) | (240 | ) | |||
Net income (loss) | $ | 3,221 | $ | (45,788 | ) | ||
EBITDA1 | $ | 4,126 | $ | (40,367 | ) | ||
Adjusted EBITDA1 | 2,505 | (937 | ) | ||||
Adjusted SG&A expenses 1 | 9,395 | 19,917 | |||||
Adjusted operating income (loss) 1 | 1,373 | (5,244 | ) | ||||
Adjusted net income (loss) 1 | $ | 1,418 | $ | (6,671 | ) | ||
Basic and fully diluted income (loss) per common share | $ | 0.12 | $ | (1.76) | |||
Adjusted fully diluted income (loss) per common share1 | $ | 0.05 | $ | (0.26) | |||
Gross profit as a percentage of sales | 46.3% | 45.5% | |||||
SG&A as a percentage of sales | 39.5% | 67.1% | |||||
Adjusted SG&A as a percentage of sales | 40.4% | 61.8% | |||||
Cash provided by (used in) operating activities | $ | 1,307 | $ | (4,056 | ) | ||
Cash used in financing activities | (183 | ) | (4,376 | ) | |||
Cash provided by investing activities | — | 1,437 | |||||
Increase (decrease) in cash during the period | 1,124 | (6,995 | ) | ||||
Cash, end of period | $ | 31,321 | $ | 39,343 | |||
As at | 2021 | 2021 | |||||
Cash | $ | 31,321 | $ | 30,197 | |||
Accounts and other receivables | 6,570 | 6,157 | |||||
Prepaid expenses and deposits | 11,578 | 14,470 | |||||
Inventories | 29,258 | 23,468 | |||||
Trade and other payables | $ | 6,154 | $ | 4,152 | |||
________________
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 income (loss), 3) Adjusted SG&A expenses, 4) Adjusted net income (loss), and 5) Adjusted fully diluted income (loss) per common share. These non-IFRS financial measures are not defined by or 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-Q 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
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 and there 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, our Restructuring Plan, the COVID-19 pandemic, our strategy of transitioning to e-commerce and wholesale sales, future sales through our e-commerce and wholesale channels, 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 avoid the delisting of the Company’s common stock by Nasdaq due to the restructuring or our inability to maintain compliance with Nasdaq listing requirements.
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 discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended
Conference Call Information
A conference call to discuss the first quarter Fiscal 2021 financial results is scheduled for
About
Investor Contact | Media Contact |
PELICAN PR | |
514-731-0000 | 514-845-8763 |
investors@davidstea.com | media@rppelican.ca |
Source: DAVIDsTEA