Corby Spirit and Wine Limited reported its fiscal 2025 first quarter results for the period ended September 30, 2024 and announced dividend of $0.22 per share
TORONTO, Nov. 13, 2024 /CNW/ - Corby Spirit and Wine Limited ("Corby" or the "Company") (TSX: CSW.A) (TSX: CSW.B), a leading Canadian manufacturer, marketer and importer of spirits, wines and ready-to-drink cocktails ("RTDs"), today announced its financial results for the fiscal first quarter ("Q1") period ended September 30, 2024.
Corby delivered a solid Q1 with accretive contribution of the newly acquired RTD businesses (ABG and Nude) and ongoing market share gains in spirits, despite a volatile market environment.
Revenue at $65.1 million (+11% year-over-year), organic Revenue +3% (excluding Nude)
Adjusted Earnings from Operations1 at $15.6 million (+9%) in Q1
Reported Earnings from Operations at $15.0 million (+31%) in Q1
Adjusted Net Earnings1 at $10.2 million (+7%) in Q1
Reported Net Earnings at $9.3 million (+24%) in Q1
Quarterly Dividend declared of $0.22 per share
FINANCIAL RESULTS
Q1 FY25 results: Revenue for the first quarter of fiscal 2025 was $65.1 million, reflecting strong growth of +$6.5 million / +11% compared to the same period last year, with the inclusion of the Nude brand contributing revenue of $4.9 million in the period (acquired during the fourth quarter of fiscal 2024). Organic revenue1, which excludes the contribution from this acquisition, was $60.2 million during the quarter, reflecting resilient growth of +3% versus the prior year period with the following drivers:
- Domestic case goods revenue of $48.4 million, +2% benefitting from the pipeline fill supporting the route-to-market modernization in Ontario and despite a negative impact from the LCBO labour strike during which its retail locations were closed for 17 days in July 2024;
- Commissions of $7.7 million, with growth of +17%, reflecting pre-ordering by customers ahead of the holiday seasons, combined with the lapping of destocking patterns at liquor boards during the same period last year;
- Export case goods sales of $3.2 million, a decline of -16%, reflecting the lapping of pipeline fills in new markets during the same period last year, partially offset by recovering shipments in the US from the normalization of inventory levels.
Marketing, sales and administration expenses increased $1.1 million, or +7% in the first quarter of fiscal 2025, primarily reflecting the inclusion of marketing expenses and overhead related to the Nude brands. Corby continued to invest purposefully in its strategic brands (including J.P. Wiser's, Polar Ice and the RTD portfolio), while diligently managing overheads, with overall expenses increasing at a slower rate than revenue.
Corby delivered strong improvements in earnings and profitability in the first quarter of fiscal 2025, reflective of the double-digit revenue growth and expense management noted above. Reported earnings from operations of $15.0 million and adjusted earnings from operations1 of $15.6 million increased +31% and +9% respectively, versus the same period last year. The reported earnings include $0.6 million of costs related to Nude inventory adjusted to its fair value in the first quarter of fiscal 2025 and $2.8 million of costs related to ABG inventory adjusted to its fair value in the first quarter of fiscal 2024. Despite increased interest charges on a year-over-year basis related to the non-controlling interest obligation and the loan contracted to acquire ABG, Corby delivered reported net earnings of $9.3 million and adjusted net earnings1 of $10.2 million in Q1 FY25, increasing by +24% and +7% year-over-year, respectively.
The Company generated solid cash flow during the quarter, with Cash Flow from Operating Activities of $3.7 million, an increase of $8.5 million year-over-year. Corby exited Q1 FY25 with a healthy balance sheet and significant financial flexibility, with its Net Debt / Adjusted EBITDA1 ratio (on a rolling 12-month basis) at 1.8x at quarter-end.
Corby's President and Chief Executive Officer, Nicolas Krantz, stated,
"I am pleased to share our results for the first quarter of fiscal 2025, which highlight a good start to the year for Corby, despite an overall beverage alcohol market that was severely impacted by the LCBO labour strike. We once again outperformed the broader spirits market in value growth during the quarter, supported by the diversity of our product portfolio, the ongoing effectiveness of our portfolio prioritization strategy, and Corby's excellence in sales execution. In addition, the recent RTD acquisitions we have made have positioned Corby to capitalize on the new opportunities presented from consumer demand shifts and the recent route to market modernization in Ontario. Our Q1 revenue also reflected destocking patterns at liquor boards last year and pre-ordering ahead of the holiday season this year, which is expected to normalize throughout the fiscal year. Looking ahead, our ambition remains to deliver sustainable growth and protect profitability levels, while continuing to generate incremental long-term sustainable value for our shareholders."
For further details, please refer to Corby's Management's Discussion and Analysis and interim condensed consolidated financial statements and accompanying notes for the three-month period ended September 30, 2024, prepared in accordance with International Financial Reporting Standards, available on www.sedarplus.ca and www.corby.ca/investors.
MARKET TRENDS
The LCBO labour strike in July 2024 significantly impacted the overall spirits market in value during this quarter, leading to a -1.5% decline in the last rolling 12 months. The RTD category was also impacted by the strike during the quarter but remained one of the fastest growing categories overall in the last twelve months at +4.6%.
Corby has outperformed the Canadian spirits market in value for more than two years, gaining share in most categories over this timeframe. Combining spirits, wines and RTDs, Corby outpaced the total beverage market in value growth by 150 basis points over the last 12 months, reflecting our ability to navigate the strike and the strength of our diversified product portfolio along with successful new product launches.
QUARTERLY DIVIDEND
The Corby Board of Directors is pleased to declare a dividend of $0.22 per Voting Class A Common Share and Non-Voting Class B Common Share of the Company, consistent with the amount of the last dividend payment. This dividend is payable on December 18, 2024 to shareholders of record as at the close of business on November 29, 2024.
QUARTERLY CONFERENCE CALL
Corby management will host a conference call on Thursday, November 14th, 2024, at 9:00 a.m. (EST) to review and discuss the financial and operational results for the Q1 period. Corby welcomes shareholders, investors, and others to access the conference call by dialing 437-900-0527 or toll free 1-888-510-2154 before the start of the call, or by joining via webcast at https://app.webinar.net/8RQ0Bnqg6zj. Following the conclusion of the call, a playback of the conference call will be available for 30 days by calling 289-819-1450 or 1-888-660-6345 and entering passcode 82600 #.
1) NON-IFRS FINANCIAL MEASURES & RATIOS
In addition to using financial measures prescribed under IFRS, references are made in this news release to "Adjusted Earnings from Operations", "Adjusted Net Earnings", "Adjusted Basic Earnings per Share", "Adjusted Diluted Earnings per Share", "Organic Revenue" and "Adjusted EBITDA" which are non-IFRS financial measures. Non-IFRS financial measures and ratios do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.
Management believes the non-IFRS measures included in this news release are important supplemental measures of operating performance and highlight trends in the core business that may not otherwise be apparent when relying solely on IFRS financial measures.
Management believes that these measures allow for assessment of the Company's operating performance and financial condition on a basis that is more consistent and comparable between reporting periods.
Adjusted Earnings from Operations is equal to earnings from operations before interest and taxes for the period adjusted to remove the costs incurred for business combination inventory fair value adjustments.
Adjusted Net Earnings is equal to net earnings for the period adjusted to remove the costs incurred for business combination inventory fair value adjustments and the notional interest charges related to NCI obligation, net of tax calculated using the effective tax rate.
Adjusted Basic Net Earnings Per Share is computed in the same way as basic net earnings per share and diluted net earnings per share, respectively, using the aforementioned Adjusted Net Earnings non-IFRS financial measure in place of reported Net Earnings.
Adjusted Diluted Earnings Per Share is computed in the same way as basic net earnings per share and diluted net earnings per share, respectively, using the aforementioned Adjusted Net Earnings non-IFRS financial measure in place of reported Net Earnings.
The following table presents a reconciliation of Adjusted Earnings from Operations and Adjusted Net Earnings to their most directly comparable financial measures for the three-month period ended September 30, 2024, and 2023:
Three months ended | ||||
Sep. 30, | Sep. 30, | |||
(in millions of Canadian dollars) | 2024 | 2023 | $ Change | % Change |
Earnings from operations | $ 15.0 | 11.4 | $ 3.6 | 31 % |
Adjustments: | ||||
Fair value adjustment to inventory1 | 0.6 | 2.8 | (2.2) | (79 %) |
Adjusted Earnings from operations | $ 15.6 | 14.3 | $ 1.3 | 9 % |
Net earnings | $ 9.3 | 7.5 | $ 1.8 | 24 % |
Adjustments: | ||||
Fair value adjustment to inventory1 | 0.4 | 2.1 | (1.7) | (79 %) |
NCI Obligation2 | 0.5 | - | 0.5 | n/a |
Adjusted Net earnings | $ 10.2 | 9.6 | $ 0.6 | 7 % |
(1) Costs related to fair value adjustments to inventory due to business combination | ||||
(2) Notional interest costs related to non controlling interest obligations for ABG | ||||
Three months ended | ||||
Sep. 30, | Sep. 30, | |||
(in Canadian dollars) | 2024 | 2023 | $ Change | % Change |
Per common share | ||||
- Basic net earnings | $ 0.33 | 0.26 | $ 0.06 | 24 % |
- Diluted net earnings | $ 0.33 | 0.26 | $ 0.06 | 24 % |
Basic Net earnings per share | $ 0.33 | 0.26 | $ 0.06 | 24 % |
Adjustments: | ||||
Fair value adjustment to inventory1 | 0.02 | 0.07 | (0.06) | (79 %) |
NCI Obligation2 | 0.02 | - | 0.02 | n/a |
Adjusted Basic Net earnings per share | $ 0.36 | 0.33 | $ 0.02 | 7 % |
Dilluted Net earnings per share | $ 0.33 | 0.26 | $ 0.06 | 24 % |
Adjustments: | ||||
Fair value adjustment to inventory1 | 0.02 | 0.07 | (0.06) | (79 %) |
NCI Obligation2 | 0.02 | - | 0.02 | n/a |
Adjusted Net Earnings per share | $ 0.36 | 0.33 | $ 0.02 | 7 % |
(1) Costs related to fair value adjustments to inventory due to business combination | ||||
(2) Notional interest costs related to non controlling interest obligations for ABG | ||||
Organic revenue growth is measured as the difference between revenue excluding case goods revenue from acquired or disposed entities compared to revenue in the preceding fiscal period during which the acquisition or disposal had not yet occurred.
The following table presents a reconciliation of total organic revenue and organic case goods revenue to their most directly comparable financial measures for the three-month period ended September 30, 2024, and 2023:
Three Months Ended | ||||
Sep. 30 | Sep. 30 | |||
(in millions of Canadian dollars) | 2024 | 2023 | $ Change | % Change |
Domestic case goods revenue | $ 53.3 | 47.4 | $ 5.9 | 13 % |
Adjusted for revenue from acquired or disposed entities | (4.9) | - | (4.9) | n.a. |
Organic domestic case goods revenue | $ 48.4 | 47.4 | 1.0 | 2 % |
Export case goods revenue | 3.2 | 3.8 | (0.6) | (16 %) |
Total commissions | 7.7 | 6.5 | 1.1 | 17 % |
Other services | 0.9 | 0.9 | 0.0 | 3 % |
Total organic revenue | $ 60.2 | 58.6 | $ 1.5 | 3 % |
Net Debt refers to the cash and deposits in cash management pools of the Company, less bank indebtedness and credit facilities payable and long-term debt.
The following table presents a reconciliation of total debt and net debt to their most directly comparable financial measures for the three-month periods ended September 30, 2024 and 2023:
Sep. 30, | Sep. 30, | |
(in millions of Canadian dollars) | 2024 | 2023 |
Bank indebtedness | $ - | $ (3.9) |
Credit facilities payable | (7.5) | (7.8) |
Lease liabilities | (3.0) | (3.8) |
Long-term debt | (114.0) | (98.5) |
Total debt | $ (124.5) | $ (114.0) |
Cash | $ 1.0 | $ - |
Deposits in cash management pools | 11.4 | 1.8 |
Bank indebtedness | - | (3.9) |
Credit facilities payable | (7.5) | (7.8) |
Long-term debt | (114.0) | (98.5) |
Net debt | $ (109.1) | $ (108.4) |
Adjusted EBITDA refers to Adjusted Earnings from Operations adjusted to remove amortization and depreciation disclosed in Corby's financial statements. The following table presents a reconciliation of adjusted EBITDA to their most directly comparable quarterly financial measures from the three-month period ended September 30, 2024 to the three-month period ended September 30, 2022:
Three Months Ended | |||||||||
Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | |
(in millions of Canadian dollars) | 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | 2023 | 2022 | 2022 |
Adjusted Earnings from operations | $ 15.6 | 9.2 | 9.2 | 12.0 | $ 14.3 | 5.9 | 4.8 | 11.2 | 10.5 |
Adjusted for depreciation & amortization | 3.9 | 4.1 | 3.8 | 3.7 | 3.9 | 3.8 | 3.7 | 3.7 | 3.7 |
Adjusted EBITDA | $ 19.5 | 13.3 | 13.0 | 15.7 | $ 18.1 | 9.7 | 8.5 | 14.9 | 14.2 |
Please refer to the "Non-IFRS Financial Measures" & "Non-IFRS Financial Ratios" section of our MD&A for the three-month period ended September 30, 2024 as filed on SEDAR+ for further information regarding Non-IFRS measures.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements, including statements concerning possible or assumed future results of Corby's operations. Forward-looking statements typically are preceded by, followed by or include the words "believes", "expects", "anticipates", "estimates", "intends", "plans" or similar expressions. These statements are being provided for the purposes of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our anticipated financial position, results of operations and operating environment. Readers are cautioned that such information may not be appropriate for other purposes and are not guarantees of future performance. Although Corby believes that the forward-looking information in this press release is based on information, assumptions and beliefs which are current, reasonable and complete, this information is necessarily subject to a number of factors, risks and uncertainties that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking information. For more information on the risks, uncertainties and assumptions that could cause Corby's actual results to differ from current expectations, refer to the Risks and Risk Management section of our Management's Discussion and Analysis for the three month period ended September 30, 2024 as well as Corby's other public filings, available at www.sedar.com and at https://corby.ca/en/investors/. Corby does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, except as is required by applicable securities laws. Accordingly, readers should not place undue reliance on forward-looking statements. All financial results are reported in Canadian dollars.
About Corby Spirit and Wine Limited
Corby Spirit and Wine Limited is a leading Canadian manufacturer, marketer and distributor of spirits and imported wines, and ready-to-drink beverages. Corby's portfolio of owned-brands includes some of the most renowned brands in Canada, including J.P. Wiser's®, Lot 40®, and Pike Creek® Canadian whiskies, Lamb's® rum, Polar Ice® vodka and McGuinness® liqueurs, as well as the Ungava® gin, Cabot Trail® maple-based liqueurs and Chic Choc® spiced rum, Cottage Springs® and Nude® ready-to-drink beverages and Foreign Affair® wines. Through its affiliation with Pernod Ricard S.A., a global leader in the spirits and wine industry, Corby also represents leading international brands such as Absolut® vodka, Chivas Regal®, The Glenlivet® and Ballantine's® Scotch whiskies, Jameson® Irish whiskey, Beefeater® gin, Malibu® rum, Olmeca Altos® and Código 1530® tequilas, Jefferson's™ and Rabbit Hole® bourbons, Kahlúa ® liqueur, Mumm® champagne, and Jacob's Creek®, Wyndham Estate®, Stoneleigh®, Campo Viejo®, and Kenwood® wines. Corby is a publicly traded company based in Toronto, Ontario, and is listed on the Toronto Stock Exchange under the trading symbols CSW.A and CSW.B. For further information, please visit our website or follow us on LinkedIn.
SOURCE Corby Spirit and Wine Limited
For more information, please contact: CORBY SPIRIT AND WINE LIMITED, Juan Alonso, Vice-President and Chief Financial Officer, [email protected], www.Corby.ca
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