TORONTO, May 3, 2024 /CNW/ - Today, Aegis Brands Inc. (TSX: AEG) has reported financial results for the first quarter ended March 31st, 2024.
Highlights:
System sales of $31.6 million in the first quarter increased by 17.2% over the prior year
Same store sales increased by 12.9% in the quarter.
EBITDA from continuing operations for the quarter was $1.0 million compared to $0.8 million last year.
Net loss from continuing operations for the quarter was $0.2 million or $0.00 per share compared to a loss of $0.6 million or $0.01 per share last year.
Aegis closed the previously announced sale of the assets of Bridgehead Coffee on March 8th, 2024.
St. Louis Bar & Grill
St. Louis contributed $2.2 million and $2.5 million Net income and EBITDA respectively for the quarter. Same store sales rose by 12.9% in the first quarter which is primarily due to the 11.5% increase in traffic. Revenue in the first quarter rose $1 million over last year partially due to owning three corporate stores versus one in 2023.
"St. Louis continues to grow sales and focus its efforts on increasing franchisee profitability. In the first quarter, we added approximately $2.1 million or an average of $23,000 per store towards the profitability of our franchisees" said Steven Pelton, President and CEO of Aegis Brands Inc. "Our procurement department did a great job managing input costs, allowing our menu prices to stay constant while increasing the profitability of our franchisees year over year.
St. Louis will add new stores later this year and continues to build its pipeline for 2025 and beyond. Many franchisees and locations in Ontario, the East Coast and Winnipeg have been identified for growth. The company is currently focused on filling in the strongest markets we have before starting to build new ones. Additionally, St. Louis's improving store level economics will help accelerate growth with new and existing franchisees.
Wing City by St. Louis
The first Wing City locations opened in December 2023 and April 2024, in Toronto. The Wing City team is developing the menu and operations to meet our guests' preferences and optimize the sales per store. "Although early in the life of this brand, the response to our product in the fast casual wing segment has been impressive," said Pelton. "We are confident the economics of Wing City will allow us to franchise and grow this brand as we serve our guests our proprietary and famous wings in a different food service format."
Bridgehead
On March 8th the company closed the sale of the substantially all of the assets of Bridgehead Coffee to Pilot Coffee, for a purchase price of $3,500,000 in cash.
"This strategic divestiture allows us to focus on the momentum of the St. Louis brand. We know there is significant growth yet to be realized with this brand and we are creating shareholder value with this great asset." said Pelton.
Aegis
Aegis is focused on increasing shareholder value by building and evolving its brands to have second-to-none store level economics. The company's goal is to provide franchisees with brands that are the best investment option for their time and money. "We invested in St. Louis because it has been delivering strong returns for franchisees for two decades. With our help, its economics will continue to improve and the new store growth will accelerate" said Pelton. "Wing City has the same ambitions as St. Louis, as will any other brands we purchase or develop."
About Aegis Brands
Aegis Brands owns and operates St. Louis Bar and Grill and Wing City by St. Louis. The Company is committed to letting each brand operate independently while providing shared expertise to help them thrive. For more information, please visit www.aegisbrands.ca.
NON-IFRS MEASURES
Aegis measures the success of its business in part by employing several key performance indicators referenced herein that are not recognized under IFRS, including same store sales and EBITDA. These indicators should not be considered an alternative to IFRS financial measures, such as net income, and are presented in this presentation because management of Aegis believes that such measures are relevant in interpreting the performance of its business. As non‐IFRS financial measures do not have standardized definitions prescribed by IFRS, they are less likely to be comparable with other issuers or peer companies. A description of the non‐IFRS measures used by Aegis in measuring its performance and a reconciliation of certain non‐IFRS measures to the nearest IFRS measure is included in Aegis' management's discussion and analysis for the year ended December 31, 2023 available on SEDAR at www.sedarplus.ca.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of Canadian securities laws. The forward-looking statements included in this press release, including statements regarding the nature of Aegis' growth strategy going forward and Aegis' execution on any of its potential plans (including with respect to the growth and development of St. Louis Bar and Grill and Wing City), are not guarantees of future results and involve risks and uncertainties that may cause actual results to differ materially from the potential results discussed in the forward-looking statements.
Risks and uncertainties that may cause such differences include but are not limited to: risks related to the company's strategy going forward; risks related to the rising interest rates and inflationary pressures on the cost of doing business; and other risks inherent in the industry in which Aegis operates. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Additional information on these and other factors that could affect Aegis' operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedarplus.ca).
The forward-looking statements in this press release are made as of the date it was issued and Aegis does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
For more information, please visit aegisbrands.ca.
