In This Article:
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Revenue: Decreased by $1 million or 1% year-over-year to $99.5 million.
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Margin: $38.2 million, down $849,000 or 2.2% from the prior year; margin as a percentage of sales was 38.4%, slightly down from 38.8% last year.
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Selling and Administrative Expenses: $25.3 million, down $1 million or 3.8% from the prior year; expenses as a percentage of sales were 25.5%, down from 26.2% last year.
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EBITDA: Increased to $12.9 million from $12.7 million last year.
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Inventory: $176.5 million, down from $192.5 million at the end of fiscal 2024.
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Total Debt: $207.3 million, down from $208.3 million at the end of fiscal 2024.
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Cash from Operations: Generated $15.3 million, up from $13.7 million last year.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Andrew Peller Ltd (ADWPF) reported consistent year-over-year operating results despite challenging economic conditions.
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The company achieved solid EBITDA performance through cost savings initiatives and operational efficiencies.
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Sales to provincial liquor boards, restaurants, and hospitality locations showed solid performance.
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The company's brand portfolio and sales channels helped mitigate the impact of softening market conditions.
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Andrew Peller Ltd (ADWPF) improved its market position nationally in both VQA and ITB wines.
Negative Points
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Sales in the first quarter of fiscal 2025 decreased by $1 million or 1% year-over-year.
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Margins were impacted by reduced sales in high-margin channels such as estates and wine clubs.
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There was softness in sales from estate wine clubs due to lower guest traffic and reduced consumer discretionary spending.
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The Okanagan Valley experienced significant crop damage due to a freeze event, impacting VQA supply.
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The company faced ongoing cost pressures on raw materials, international freight, and shipping charges.
Q & A Highlights
Q: Can you comment on how traffic has been in the second quarter for your estate wineries, given the softness in the first quarter? A: Paul Dubkowski, Chief Executive Officer, noted that there has been stabilization in the Ontario region with traffic and spend largely recovering after declines last year. However, the West remains challenged with high single to low double-digit declines in traffic due to factors like last year's fires, travel restrictions, and economic pressures. Despite this, there is confidence in recovery due to the region's appeal as a travel destination.
Q: Do you have any additional comments on the Ontario government's expanded distribution of alcohol starting in the fall? A: Paul Dubkowski stated that while they are still working through final details, they are pleased with the government's commitment to growing the Ontario wine industry. The company is focused on being ready for the rollout and winning in the expanded distribution environment, though it presents both opportunities and challenges.