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- Sales reach
$20.4 million - Net loss totals
$2.0 million - Adjusted EBITDA amounts to
$0.1 million - Cash position of
$22.7 million
“DAVIDsTEA continues to execute on a well though-out transition to a digital-first tea merchant, by amplifying the universal and enjoyable pleasures associated with tea. We efficiently managed through industry-wide challenges, including mounting inflation, supply-chain issues and labour shortages, in the first quarter of 2022,” said Sarah Segal, Chief Executive Officer and Chief Brand Officer, DAVIDsTEA. “Despite these headwinds, our vision to be the world’s most innovative tea company, inspiring greater wellness and sustainability, remains unchanged. Ultimately, opening the world of tea to all, through accessible information, knowledge and stories within a warm, friendly environment continues to guide our strategies. We work every day to show how tea can be a fun part of anyone’s routine.”
“Our first quarter sales reflect evolving consumer buying patterns as COVID-19 pandemic-related restrictions receded and customer traffic picked up at retail stores,” said
Operating Results for the First Quarter of Fiscal 2022
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”) increased by
Net (loss) income. Net loss was
Fully diluted earnings (loss) per common share. Fully diluted loss per common share was
EBITDA and Adjusted EBITDA. EBITDA, which excludes non-cash and other items in the current and prior periods, was negative
Liquidity and Capital Resources
As at
Working capital was
Our working capital requirements are for the purchase of inventory, payment of payroll and other operating costs, including software purchases and implementation 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 operating, capital 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 | ||||||||
2022 | 2021 | |||||||
Sales | $ | 20,435 | $ | 23,249 | ||||
Cost of sales | 11,471 | 12,481 | ||||||
Gross profit | 8,964 | 10,768 | ||||||
Selling, general and administration expenses | 10,806 | 9,194 | ||||||
Restructuring plan activities, net | — | (1,602 | ) | |||||
Results from operating activities | (1,842 | ) | 3,176 | |||||
Finance costs | 171 | 10 | ||||||
Finance income | (39 | ) | (55 | ) | ||||
Net (loss) income | $ | (1,974 | ) | $ | 3,221 | |||
EBITDA1 | $ | (976 | ) | $ | 4,126 | |||
Adjusted EBITDA1 | 89 | 2,505 | ||||||
Adjusted SG&A expenses 1 | 10,051 | 9,395 | ||||||
Adjusted operating (loss) income 1 | (1,087 | ) | 1,373 | |||||
Adjusted net (loss) income 1 | $ | (1,219 | ) | $ | 1,418 | |||
Basic (loss) income per common share | $ | (0.07 | ) | $ | 0.12 | |||
Fully diluted (loss) income per common share | (0.07 | ) | 0.12 | |||||
Adjusted fully diluted (loss) income per common share1 | $ | (0.05 | ) | $ | 0.05 | |||
Gross profit as a percentage of sales | 43.9 | % | 46.3 | % | ||||
SG&A expenses as a percentage of sales | 52.9 | % | 39.5 | % | ||||
Adjusted SG&A expenses as a percentage of sales1 | 49.2 | % | 40.4 | % | ||||
Cash flows (used in) provided by operating activities | $ | (1,678 | ) | $ | 1,307 | |||
Cash flows used in financing activities | (749 | ) | (183 | ) | ||||
(Decrease) increase in cash during the period | (2,427 | ) | 1,124 | |||||
Cash, end of period | $ | 22,680 | $ | 31,321 | ||||
As at | 2022 | 2022 | ||||||
Cash | $ | 22,680 | $ | 25,107 | ||||
Accounts and other receivables | 3,197 | 3,209 | ||||||
Prepaid expenses and deposits | 4,479 | 4,142 | ||||||
Inventories | 28,359 | 31,048 | ||||||
Trade and other payables | $ | 8,966 | $ | 12,300 |
________________
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) income, 3) Adjusted SG&A expenses, 4) Adjusted net (loss) income, 5) Adjusted fully diluted (loss) earnings per common share and 6) Adjusted SG&A expenses as a percentage of sales. 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 strategy of transitioning to e-commerce and wholesale sales, future sales through our e-commerce and wholesale channels, our results of operations, financial condition, liquidity and prospects, and the impact of the COVID-19 pandemic on the global macroeconomic environment.
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 2022 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