In This Article:
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Sales: Down 1.6% to $162 million.
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Distribution Sales: Increased by 1.5%.
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Wholesale Sales: Decreased by 10.1%.
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Adjusted EBITDA: $9.5 million or 5.9% of sales, down from $11 million or 6.7% last year.
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Net Earnings: $1.2 million or $0.01 per share, down from $3.5 million or $0.03 per share last year.
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Cash Flow from Operating Activities: $9.9 million, up from $8 million last year.
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Net Debt: Reduced to $50.7 million from $61.5 million at the end of 2023.
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Available Borrowing Capacity: $28.5 million on the credit facility.
Release Date: October 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Colabor Group Inc (COLFF) achieved a 1.5% growth in distribution sales during the third quarter of 2024, contributing to a market share increase to 11.1% from 10.3% year-over-year.
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The company successfully renewed a significant contract with an institutional customer, representing approximately 11% of expected revenues for fiscal 2024.
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Colabor Group Inc (COLFF) reported higher cash flows from operations, allowing for a reduction in net debt from $61.5 million at the end of 2023 to $50.7 million.
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The company is effectively managing its customer mix and product portfolio, which has allowed it to raise gross margins over the past few years.
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Colabor Group Inc (COLFF) is expanding its distribution platform both organically and through accretive acquisitions, demonstrating a strong competitive position in a challenging market.
Negative Points
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Overall sales for the third quarter of 2024 were down 1.6% to $162 million, with wholesale activities declining by 10.1%.
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Consolidated adjusted EBITDA from continuing operations decreased to $9.5 million or 5.9% of sales, compared to $11 million or 6.7% in the third quarter of the previous year.
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The company faced higher operating expenses due to underutilization of the new distribution center and investments in sales and marketing, impacting profitability.
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The renewed institutional contract was awarded at lower margins, which will impact future earnings, although mitigation measures are being implemented.
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The restaurant industry, a significant part of Colabor Group Inc (COLFF)'s customer base, is experiencing a challenging macroeconomic environment, affecting customer spending and growth potential.
Q & A Highlights
Q: Can you quantify the year-over-year volume impact from new wins and new territories? A: Louis Frenette, President and CEO, stated that they estimate about 4% new volume from existing and new customers, with 2.2% from a small M&A and 1.1% from inflation.