- Total revenue of
$22.1 million versus$26.7 million in Q4 2021 - Adjusted EBITDA(1) of
$2.8 million versus$3.2 million in Q4 2021 - Net loss of
$61.9 million , including non-cash impairment of goodwill and intangible assets of$55.6 million in Q4 2022 - Adjusted Net Loss(1) of
$5.5 million versus Adjusted Net Income of $nil in Q4 2021 - Initiates Strategic Review Process
- Amends and extends its credit facilities
VAUGHAN, ON,
"Our sales results for the fourth quarter and full year reflect the continuing impact of distribution losses and broader macroeconomic challenges," said
Selected Financial Highlights(1)(2)
(in thousands of US dollars except per share amounts) (unaudited) | Q4 2022 | Q4 2021 | FY 2022 | FY 2021 |
Revenue | 22,134 | 26,703 | 90,692 | 107,156 |
Gross profit | 8,680 | 10,393 | 38,491 | 43,977 |
Net (loss) for the period | (61,931) | (142) | (155,839) | (97,636) |
Loss per Share (basic) | (1.68) | 0.00 | (4.24) | (2.66) |
Adjusted EBITDA | 2,766 | 3,160 | 12,433 | 16,506 |
Cash flow from operating activities | 2,215 | 233 | 8,090 | 6,406 |
Free Cash Flow and Adjusted Free Cash Flow | 2,158 | 177 | 7,903 | 5,838 |
Adjusted Net Income (Loss) | (5,467) | 28 | (5,030) | 3,645 |
(1) | EBITDA (used below), Adjusted EBITDA, Free Cash Flow, Adjusted Free Cash Flow, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Share (diluted), and Net Debt (used below) are each non-IFRS measures and are not earning measures recognized by IFRS. Further information about non-IFRS measures and definitions of the non-IFRS measures used in this press release can be found under the heading "Non-IFRS Measures" in this press release. Reconciliations of non-IFRS measures to the relevant reported measures prepared in accordance with IFRS can be found in this press release under the headings "Q4 2022 Compared to Q4 2021". See also the heading "How We Assess the Performance of Our Business" on page 8, and the heading "Non-IFRS Measures" on page 10 of our Management's Discussion and Analysis for the three- and 12-month periods ended |
(2) | Earnings per share (basic) calculation does not include the impact of 2,463,963 common shares of the Company issuable upon the exchange of the units issued as part of The Mane Choice acquisition. |
Q4 2022 Business and Financial Review
Q4 2022 total revenue was
Gross profit was
Adjusted EBITDA(1) decreased to
In Q4 2022, the Company reported a net loss of
Adjusted Net Loss(1) for Q4 2022 was
Cash flow from operating activities was
Strategic Review Process
The Company also announced that its Board of Directors has initiated a strategic review process to identify, review and evaluate potential strategic alternatives that may be available to the Company, including without limitation, the sale of all or substantially all of the Company's securities and/or its assets, or the raising of additional debt or equity capital. The Board has engaged
Amendment and Extension to Credit Facilities
In light of recent performance trends and conditions in capital and credit markets more generally, the Company entered into a sixth amendment to its credit facilities as of
Board of Directors Change
The Company also announced that Tom Ennis has resigned from the Board, effective
"We thank Tom for his many contributions to the Company and wish him continued success going forward," said
Financial Statements and Management's Discussion and Analysis
The Company's audited consolidated financial statements and Management's Discussion and Analysis for the three- and 12-month periods ended
Conference Call & Webcast
About
Non–IFRS Measures
This press release makes reference to certain non–IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non–IFRS measures including "Adjusted Net Income (Loss) Per Share (Diluted)", "Adjusted EBITDA", "Adjusted Free Cash Flow", "Adjusted Net Income (Loss)", "EBITDA", "Free Cash Flow" and "Net Debt". These non–IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors, and other interested parties frequently use non–IFRS measures in the evaluation of issuers. Our management also uses non–IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and to determine components of management compensation. Definitions and reconciliations of non-IFRS measures to the relevant reported measures prepared in accordance with IFRS can be found under the headings "Non-IFRS Measures" and "Q4 2022 Compared to Q4 2021" in this press release. See also our Management's Discussion and Analysis under the headings "How We Assess the Performance of Our Business" on page 8, and "Non-IFRS Measures" on page 10.
"Adjusted Net Income (Loss) Per Share (Diluted)" is computed similarly to basic earnings per share except that the weighted average number of shares outstanding is increased to include additional shares for the assumed conversion of preference shares, proportionate voting shares, and exchangeable shares and exercise of stock options, if dilutive. The average number of shares is calculated by assuming that outstanding conversions were exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting period. We believe Adjusted Net Income (Loss) Per Share (Diluted) is a useful measure to assess the performance of our Company as it provides meaningful operating results per diluted share and facilitates period-to-period operating comparisons.
"Adjusted EBITDA" represents, for the applicable period, EBITDA before certain expenses, costs, charges or benefits incurred in such period which in management's view are not indicative of continuing operations, including: (i) integration, restructuring, and other costs; (ii) purchase accounting adjustments; (iii) share–based compensation; (iv) impairment of goodwill; and (v) unrealized foreign exchange (loss) gain. We believe Adjusted EBITDA is a useful measure to assess the performance of our Company as it provides meaningful operating results and facilitates period-to-period operating comparisons.
"Adjusted Free Cash Flow" is calculated as Free Cash Flow adjusted to add back acquisition related costs which are included in cash provided by operating activities. We believe Adjusted free cash flow is a useful measure to assess the Company's ability to repay debt, finance strategic business acquisitions and investments, pay dividends and repurchase shares. It also facilitates period-to-period comparisons.
"Adjusted Net Income (Loss)" represents, for the applicable period, net income (loss) as adjusted to add back or deduct, as applicable, certain expenses, costs, charges or benefits incurred in such period which in management's view are not indicative of continuing operations, including: (i) integration, restructuring, and other costs; (ii) purchase accounting adjustments; (iii) share–based compensation; (iv) impairment of goodwill; (v) unrealized foreign exchange loss (gain); and (vi) tax impacts of the aforementioned adjustments (based on annual effective tax rate). We believe Adjusted Net Income (Loss) is a useful measure to assess the performance of our Company as it provides meaningful operating results and facilitates period-to-period operating comparisons.
"EBITDA" represents net income (loss) for the period before: (i) income tax expense (recovery); (ii) interest and accretion; and (iii) amortization and depreciation.
''Free Cash Flow'' represents, for the applicable period, cash provided by operating activities less cash used to purchase property and equipment. Free cash flow is a key metric used by the investing community that measures the Company's ability to repay debt, finance strategic business acquisitions and investments, pay dividends and repurchase shares.
"Net Debt" is calculated as long-term debt before unamortized deferred financing costs less cash as reported in the consolidated statements of financial position. We believe Net Debt is a useful measure is an important measure as it reflects the principal amount of debt owing by the Company as at a particular date.
Forward-Looking Information
Certain information in this press release, including the Company's expectation to stabilize performance of its brands, to achieve ongoing costs savings initiatives, to identify and solicit strategic alternatives as part of the strategic review process, relating to the realization of any strategic transaction and the timing and terms thereof, and challenging macroeconomic conditions generally constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events.
The terms of the credit facilities require the Company to satisfy many affirmative and negative covenants and to meet certain financial tests, including minimum Adjusted EBITDA and minimum liquidity covenants, as more particularly described in the credit facilities. In addition, the Company has agreed to launch a strategic review process by
Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by
Q4 2022 Compared to Q4 2021 & FY 2022 Compared to FY 2021
(in thousands of US dollars) (unaudited) | Q4 2022 | Q4 2021 | $ Change | % Change | |||||||||||||
Consolidated statements of operations: | |||||||||||||||||
Revenue | 22,134 | 26,703 | (4,569) | (17.1 %) | |||||||||||||
Cost of sales | 13,454 | 16,310 | (2,856) | (17.5 %) | |||||||||||||
Gross profit | 8,680 | 10,393 | (1,713) | (16.5 %) | |||||||||||||
Expenses | |||||||||||||||||
Selling and administrative | 6,640 | 7,295 | (655) | (9.0 %) | |||||||||||||
Amortization and depreciation | 1,088 | 1,116 | (28) | (2.5 %) | |||||||||||||
Impairment of goodwill and intangible assets | 55,575 | — | 55,575 | nmf | |||||||||||||
Interest and accretion | 2,275 | 1,600 | 675 | 42.2 % | |||||||||||||
Foreign exchange gain | 23 | 45 | (22) | (48.9 %) | |||||||||||||
Integration, restructuring, and other | 444 | 121 | 323 | 266.9 % | |||||||||||||
66,045 | 10,177 | 55,868 | nmf | ||||||||||||||
Loss before income taxes | (57,365) | 216 | (57,581) | nmf | |||||||||||||
Income tax expense (recovery) | |||||||||||||||||
Current | — | (54) | 54 | (100.0 %) | |||||||||||||
Deferred | 4,566 | 412 | 4,154 | nmf | |||||||||||||
4,566 | 358 | 4,208 | nmf | ||||||||||||||
Net loss for the period | (61,931) | (142) | (61,789) | nmf | |||||||||||||
EBITDA (1) | (54,002) | 2,932) | (56,934) | nmf | |||||||||||||
Adjusted EBITDA (1) | 2,766 | 3,160 | (394) | (12.5 %) | |||||||||||||
Adjusted Net Income (Loss) (1) | (5,467) | 28 | (5,495) | nmf |
(in thousands of US dollars) | Fiscal 2022 | Fiscal 2021 | $ Change | % Change | |||||||||||||
Consolidated statements of operations: | |||||||||||||||||
Revenue | 90,692 | 107,156 | (16,464) | (15.4 %) | |||||||||||||
Cost of sales | 52,201 | 63,179 | (10,978) | (17.4 %) | |||||||||||||
Gross profit | 38,491 | 43,977 | (5,486) | (12.5 %) | |||||||||||||
Expenses | |||||||||||||||||
Selling and administrative | 27,758 | 28,112 | (354) | (1.3 %) | |||||||||||||
Amortization and depreciation | 4,381 | 4,385 | (4) | (0.1 %) | |||||||||||||
Impairment of goodwill and intangible assets | 145,479 | 129,033 | 16,446 | 12.7 % | |||||||||||||
Interest and accretion | 7,804 | 6,566 | 1,238 | 18.9 % | |||||||||||||
Foreign exchange (gain) loss | (274) | 167 | (441) | nmf | |||||||||||||
Integration, restructuring, and other | 1,270 | (2,629) | 3,899 | nmf | |||||||||||||
186,418 | 165,634 | 20,784 | 12.5 % | ||||||||||||||
Income (loss) before income taxes | (147,927) | (121,657) | (26,270) | 21.6 % | |||||||||||||
Income tax expense (recovery) | |||||||||||||||||
Current | — | (41) | 41 | (100.0 %) | |||||||||||||
Deferred | 7,912 | (23,980) | 31,892 | (133.0 %) | |||||||||||||
7,912 | (24,021) | 31,933 | (132.9 %) | ||||||||||||||
Net loss for the period | (155,839) | (97,636) | (58,203) | 59.6 % | |||||||||||||
EBITDA (1) | (135,742) | (110,706) | (25,036) | 22.6 % | |||||||||||||
Adjusted EBITDA (1) | 12,433 | 16,506 | (4,073) | (24.7 %) | |||||||||||||
Adjusted Net Income (Loss) (1) | (5,030) | 3,645 | (8,675) | nmf |
(1) | EBITDA, Adjusted EBITDA and Adjusted Net Income (Loss) are each non-IFRS measures and are not earning measures recognized by IFRS. Definitions and reconciliations of non-IFRS measures to the relevant reported measures can be found under the headings "Non-IFRS Measures" and "Q4 2022 Compared to Q4 2021 & FY2022 Compared to FY2021" in this press release. See also our Management's Discussion and Analysis under the headings "How We Assess the Performance of Our Business" on page 8, and "Non-IFRS Measures" on page 10. |
(in thousands of US dollars) (unaudited) | Q4 2022 | Q4 2021 | Fiscal 2022 | Fiscal 2021 | ||||||||||||||
Consolidated net income (loss): | (61,931) | (142) | (155,839) | (97,636) | ||||||||||||||
Income tax expense | 4,566 | 358 | 7,912 | (24,021) | ||||||||||||||
Interest and accretion | 2,275 | 1,600 | 7,804 | 6,566 | ||||||||||||||
Amortization and depreciation | 1,088 | 1,116 | 4,381 | 4,385 | ||||||||||||||
EBITDA | (54,002) | 2,932 | (135,742) | (110,706) | ||||||||||||||
Integration, restructuring, and other | (1) | 444 | 121 | 1,270 | (2,629) | |||||||||||||
Share-based compensation | (2) | 655 | 88 | 1,559 | 810 | |||||||||||||
Impairment of goodwill and intangible assets | (3) | 55,575 | — | 145,479 | 129,033 | |||||||||||||
Unrealized foreign exchange (gain) loss | 94 | 19 | (133) | (2) | ||||||||||||||
Adjusted EBITDA | 2,766 | 3,160 | 12,433 | 16,506 |
(in thousands of US dollars) (unaudited) | Q4 2022 | Q4 2021 | Fiscal 2022 | Fiscal 2021 | |||||||||||||
Consolidated net income (loss): | (61,931) | (142) | (155,839) | (97,636) | |||||||||||||
Integration, restructuring, and other | (1) | 444 | 121 | 1,270 | (2,629) | ||||||||||||
Share-based compensation | (2) | 655 | 88 | 1,559 | 810 | ||||||||||||
Impairment of goodwill and intangible assets | (3) | 55,575 | — | 145,479 | 129,033 | ||||||||||||
Unrealized foreign exchange (gain) loss | 94 | 19 | (133) | (2) | |||||||||||||
Tax impact of the above adjustments | (304) | (58) | 2,634 | (25,931) | |||||||||||||
Adjusted Net Income (Loss) | (5,467) | 28 | (5,030) | 3,645 |
(1) Refer to Note 11 to the consolidated financial statements for further details. |
(2) Represents recognition of share-based compensation, which have been accounted for as selling and administrative expenses. |
(3) Refer to Note 9 to the consolidated financial statements for further details. |
(in thousands of US dollars) (unaudited) | Q4 2022 | Q4 2021 | Fiscal 2022 | Fiscal 2021 | |||||||||||||
Cash provided by operating activities | 2,215 | 233 | 8,090 | 6,406 | |||||||||||||
Less: purchase of property and equipment | (57) | (56) | (187) | (568) | |||||||||||||
Free Cash Flow and Adjusted Free Cash Flow | 2,158 | 177 | 7,903 | 5,838 |
SOURCE
© Canada Newswire, source