/C O R R E C T I O N -- Corby Spirit and Wine Limited/
Amended News Release - The prior news release of Corby Spirit and Wine Limited issued on August 21, 2024 has been amended to clarify that the dividend of $0.22 per share declared by the Board of Directors represents "an increase from the previous quarterly dividend payment at $0.21 per share". All other information in the prior news release remains unchanged. The amended news release is as follows.
Corby Spirit and Wine Limited reports its fiscal 2024 fourth quarter and year-end results and announces dividend of $0.22 per share
TORONTO, Aug. 21, 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 fourth quarter ("Q4") and full-year 2024 ("FY24") periods ended June 30, 2024.
Q4 Revenue at $66.5 million (+50%) and FY24 Revenue at $229.7 million (+41%) underpinned by value market share gains and recent strategic acquisitions of ABG and Nude
Adjusted Earnings from Operations1 at $9.2 million (+56%) in Q4 and at $44.6 million (+37%) in FY24
(Reported Earnings from Operations at $8.7 million (+385%) in Q4 and at $40.7 million (+44%) in FY24)
Adjusted Net Earnings1 at $5.4 million (+10%) in Q4 and at $28.5 million (+13%) in FY24
(Reported Net Earnings at $4.8 million (+194%) in Q4 and at $23.9 million (+9%) in FY24)
Quarterly Dividend increased to $0.22 per share
FINANCIAL RESULTS
Q4 FY24 results: Revenue for the fourth quarter of fiscal 2024 was $66.5 million, reflecting strong growth of +$22.3 million / +50% compared to the same period last year. Year-on-year growth was driven primarily by the inclusion of Ace Beverage Group ("ABG") and Nude brand revenue of $19.8 million and $2.9 million, respectively, with both companies acquired during fiscal 2024. Organic revenue1, which excludes the contribution from these acquisitions, was $43.8 million during the quarter, a modest decline of -1% compared to the prior year period. The primarily factors impacting organic revenue growth were:
- Resilient domestic case goods revenue of $30.8 million, growing by +3% despite a negative $2.4 million impact related to a customer pricing dispute (as further discussed in Corby's Management's Discussion and Analysis for the three-months and year-ended June 30, 2024. Excluding this impact, Q4 domestic case goods revenue increased by +11% and overall Q4 organic revenue increased by +4%);
- Export case goods sales of $4.3 million (-27%), which reflected a normalization of quarterly phasing in an otherwise strong full year result when compared to the FY23, with performance lapping unusually strong shipments from new market pipeline fills and innovation launches in the US in Q4 FY23;
- Commissions of $7.1 million, a decline of -4%, with flat PR brands sales and lower agency sales year-on-year, reflecting the lapping of sales from certain third-party wine brands no longer represented by Corby.
In the fourth quarter of fiscal 2024, marketing, sales and administrative expenses grew +6% as compared to the prior year period. This increase primarily reflected new marketing activities and overheads related to the ABG portfolio and Nude brand, with these expenses increasing at a more modest rate than the corresponding increase in revenue stemming from these acquisitions. This increase in marketing, sales and administrative expenses was partially offset by diligent internal cost management compared to a high expense base last year.
Reflecting the strong revenue growth and more modest expense growth noted above, Corby delivered robust improvements in earnings and profitability in the fourth quarter of fiscal 2024. Reported earnings from operations of $8.7 million and adjusted earnings from operations1 of $9.2 million increased +385% and +56% respectively, versus the same period last year. The difference between reported and adjusted growth is primarily driven by transactional costs incurred last year for ABG acquisition. Despite increased interest charges on a year-over-year basis related to the loan contracted to acquire ABG, Corby delivered reported net earnings of $4.8 million and adjusted net earnings of $5.4 million in the fourth quarter of fiscal 2024, increasing by +194% and +10% year-over-year, respectively.
Full-year FY24 results: Revenue for the full-year of fiscal 2024 was $229.7 million, increasing by +$66.7 million / +41% as compared to fiscal 2023. The significant year-over-year growth was driven primarily by the inclusion of ABG and Nude revenue of $57.9 million and $2.9 million, respectively. Revenue was further bolstered by solid growth in organic revenue1 of +4%, which reached $168.8 million, excluding the impact of the acquisitions of ABG and Nude. Organic growth for the full-year was broad-based, reflecting:
- Solid domestic Case Goods revenue of $121.0 million, growing by +2% year-over-year despite deceleration in the spirits market and the negative $2.4 million impact of the customer pricing dispute, as noted above. This performance was led by good performance of the J.P. Wiser's and Polar Ice key brands. Excluding the impact of the customer pricing dispute, FY24 domestic case goods revenue increased by +4% and overall FY24 organic revenue increased by +5%;
- Strong performance in international markets, with export case goods sales of $17.0 million, up by +16% year-over-year as Corby capitalized on new market opportunities;
- Other non-core business activities revenue of $4.3 million, increased by +37%, supported by a one-time bulk whisky sale;
- Commissions sales reached $26.6 million with dynamic performance from key strategic PR brands despite a year-over-year headwind from stock levels normalization at liquor boards. However, this strength was fully offset by lower agency sales, owing to the inclusion of revenue in the prior year from certain third-party wine brands no longer represented by Corby during fiscal 2024.
In FY24, marketing, sales and administrative expenses grew +15% versus the prior year, primarily reflecting the inclusion of marketing investments and overheads related to the ABG portfolio and Nude brand. While Corby made strategic investments in J.P. Wiser's, Polar Ice and the RTD portfolio during the year, the Company also realized efficiencies across the organization. The combined impact of these factors resulted in marketing, sales and administrative expenses for the full-year increasing at a slower pace than full-year revenue for FY24.
Significant year-over-year revenue growth, including the contribution of ABG portfolio and the Nude brand, in addition to the realization of operating efficiencies, helped to drive strong earnings and profitability growth in FY24. Full-year reported earnings from operations of $40.7 million and adjusted earnings from operations1 of $44.6 million increased by +44% and +37%, respectively, compared to FY23. In addition, while FY24 included interest charges related to the loan contracted to acquire ABG, reported net earnings of $23.9 million and adjusted net earnings1 of $28.5 million increased by +9% and +13%, respectively.
In FY24, Corby generated $31.5 million of Cash Flow from Operating Activities, supported by higher reported net earnings, as noted above. Corby closed FY24 with a strong balance sheet, with a Net debt over adjusted EBITDA1 ratio at 1.8x and significant financial flexibility to execute on its strategic initiatives to drive long-term shareholder value.
Corby's President and Chief Executive Officer, Nicolas Krantz, stated,
"I am incredibly proud of Corby's performance for the fourth quarter and full year of fiscal 2024. For a second year in a row, our total spirits and RTD portfolio outperformed the market in value growth, highlighting the performance of our diverse portfolio of brands across categories and price points, the effectiveness of our portfolio prioritization strategy, and Corby's excellence in sales execution. This translated into robust financial results throughout the year, including significant growth in revenue and profitability as well as strong cash flow generation. We have also started to see our efforts to position Corby for long-term success in the dynamic RTD segment pay off, with our recent ABG and Nude acquisitions further bolstering our full-year performance. As we continue to build upon the great integration work completed with the ABG and Nude teams to date, strengthening our foothold across Western Canada, we anticipate that these acquisitions will continue to bear fruit for Corby.
Looking ahead, I am excited by the foundation we have in place to maintain commercial momentum. As we assess the route-to-market modernization taking place in Ontario and how to best take advantage of the significant increase in points of distribution, we maintain the objective to continue outpacing the broader Spirits and RTD market in fiscal 2025. To do so, we will continue executing on our Corby 2.0 strategy, which is underpinned by three key pillars: (1) the optimization and implementation of strategic priorities across our spirits portfolio to gain additional market share, leveraging our industry-leading capabilities in innovation and marketing; (2) unlocking the full potential of our RTD portfolio, including the realization of ABG and Nude synergies; and (3) leveraging the broad-based digital transformation we undertook in recent years and Corby's experienced team to proactively address key business challenges and opportunities head on."
For further details, please refer to Corby's Management's Discussion and Analysis and consolidated financial statements and accompanying notes for the three-months and year-ended June 30, 2024, prepared in accordance with International Financial Reporting Standards, available on www.sedarplus.ca and www.corby.ca/investors.
MARKET TRENDS
Over the last twelve months as compared to the preceding twelve months, the Spirits market was broadly flat with moderate growth in On-Premise offset by moderate declines in Retail. RTDs remained the fastest growing category overall, while value continued to outpace volume across categories with Corby outperforming the industry.
Corby outperformed the Canadian spirits market in value for the second consecutive year, gaining share in all key categories. Combining spirits, wines and RTDs, Corby outpaced the total beverage market by +1.9 percentage points of value growth in FY24, reflecting our diversified product portfolio and 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, an increase from the previous quarterly dividend at $0.21 per share. This dividend is payable on September 27, 2024 to shareholders of record as at the close of business on September 11, 2024.
QUARTERLY CONFERENCE CALL
Corby management will host a conference call on Thursday, August 22nd, 2024, at 9:00 a.m. (EST) to review and discuss the financial and operational results for the Q4 and FY24 periods. Corby welcomes stakeholders, investors, and other individual followers to access the conference call by dialing 416-764-8659 or toll free 1-888-664-6392 before the start of the call, or by joining via webcast at https://app.webinar.net/lYDKJoy06GE. Following the conclusion of the call, a playback of the conference call will be available for 30 days by calling 416-764-8677 or 1-888-390-0541 and entering passcode 474210 #.
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, restructuring provisions and the transaction costs related to the acquisition of ABG and Nude assets; and in FY23, adjusted to remove the transaction costs related to the acquisition of ABG, one-time termination fees related to distributor transitions and organizational restructuring provisions.
Adjusted Net Earnings is equal to net earnings for the period adjusted to remove the costs incurred for business combination inventory fair value adjustments, restructuring provisions, the transaction costs related to the acquisition of ABG and Nude assets and the notional interest charges related to NCI obligation, net of tax calculated using the effective tax rate; and in FY23, adjusted to remove the transaction costs related to the acquisition of ABG, one-time termination fees related to distributor transitions, organizational restructuring provisions, 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-and-twelve-month periods ended June 30, 2024, and 2023:
Three months ended |
Year ended |
|||||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||||
(in millions of Canadian dollars) |
2024 |
2023 |
$ Change |
% Change |
2024 |
2023 |
$ Change |
% Change |
||
Earnings from operations |
$ 8.7 |
1.8 |
$ 6.9 |
385 % |
$ 40.7 |
28.3 |
$ 12.4 |
44 % |
||
Adjustments: |
||||||||||
Transaction related costs1 |
0.6 |
3.0 |
(2.4) |
(81 %) |
1.2 |
3.0 |
(1.8) |
(60 %) |
||
Restructuring costs2 |
(0.3) |
0.7 |
(1.0) |
(137 %) |
(0.3) |
0.7 |
(1.0) |
(137 %) |
||
Fair value adjustment to inventory3 |
0.2 |
- |
0.2 |
n.a. |
3.2 |
- |
3.2 |
n.a. |
||
Distributor transition4 |
- |
0.4 |
(0.4) |
(100 %) |
(0.3) |
0.4 |
(0.7) |
(171 %) |
||
Adjusted Earnings from operations |
$ 9.2 |
5.9 |
$ 3.3 |
56 % |
$ 44.6 |
32.4 |
$ 12.1 |
37 % |
||
Net earnings |
$ 4.8 |
1.6 |
$ 3.2 |
194 % |
$ 23.9 |
22.0 |
$ 1.9 |
9 % |
||
Adjustments: |
||||||||||
Transaction related costs1 |
0.3 |
2.5 |
(2.1) |
(86 %) |
0.9 |
2.5 |
(1.6) |
(63 %) |
||
Restructuring costs2 |
(0.3) |
0.5 |
(0.8) |
(150 %) |
(0.3) |
0.5 |
(0.8) |
(150 %) |
||
Fair value adjustment to inventory3 |
0.1 |
- |
0.1 |
n.a. |
2.4 |
- |
2.4 |
n.a. |
||
Distributor transition4 |
- |
0.3 |
(0.3) |
(100 %) |
(0.2) |
0.3 |
(0.5) |
(171 %) |
||
NCI Obligation5 |
0.5 |
- |
0.5 |
n.a. |
1.8 |
- |
1.8 |
n.a. |
||
Adjusted Net earnings |
$ 5.4 |
4.9 |
$ 0.5 |
10 % |
$ 28.5 |
25.3 |
$ 3.2 |
13 % |
||
Three months ended |
Year ended |
|||||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||||
(in Canadian dollars) |
2024 |
2023 |
$ Change |
% Change |
2024 |
2023 |
$ Change |
% Change |
||
Per common share |
||||||||||
- Basic net earnings |
$ 0.17 |
0.06 |
$ 0.11 |
194 % |
$ 0.84 |
0.77 |
$ 0.07 |
9 % |
||
- Diluted net earnings |
$ 0.17 |
0.06 |
$ 0.11 |
194 % |
$ 0.84 |
0.77 |
$ 0.07 |
9 % |
||
Basic net earnings per share |
$ 0.17 |
0.06 |
$ 0.11 |
194 % |
$ 0.84 |
0.77 |
$ 0.07 |
9 % |
||
Adjustments: |
||||||||||
Transaction related costs1 |
0.01 |
0.09 |
(0.08) |
(86 %) |
0.03 |
0.09 |
(0.05) |
(63 %) |
||
Restructuring costs2 |
(0.01) |
0.02 |
(0.03) |
(150 %) |
(0.01) |
0.02 |
(0.03) |
(150 %) |
||
Fair value adjustment to inventory3 |
0.00 |
- |
0.00 |
n.a. |
0.08 |
- |
0.08 |
n.a. |
||
Distributor transition4 |
- |
0.01 |
(0.01) |
(100 %) |
(0.01) |
0.01 |
(0.02) |
(171 %) |
||
NCI Obligations5 |
0.02 |
- |
0.02 |
n.a. |
0.06 |
- |
0.06 |
n.a. |
||
Adjusted Basic, net earnings per share |
$ 0.19 |
0.18 |
$ 0.02 |
10 % |
$ 1.00 |
0.89 |
$ 0.12 |
13 % |
||
Dilluted net earnings per share |
$ 0.17 |
0.06 |
$ 0.11 |
194 % |
$ 0.84 |
0.77 |
$ 0.07 |
9 % |
||
Adjustments: |
||||||||||
Transaction related costs1 |
0.01 |
0.09 |
(0.08) |
(86 %) |
0.03 |
0.09 |
(0.05) |
(63 %) |
||
Restructuring costs2 |
(0.01) |
0.02 |
(0.03) |
(150 %) |
(0.01) |
0.02 |
(0.03) |
(150 %) |
||
Fair value adjustment to inventory3 |
0.00 |
- |
0.00 |
n.a. |
0.08 |
- |
0.08 |
n.a. |
||
Distributor transition4 |
- |
0.01 |
(0.01) |
(100 %) |
(0.01) |
0.01 |
(0.02) |
(171 %) |
||
NCI Obligation5 |
0.02 |
- |
0.02 |
n.a. |
0.06 |
- |
0.06 |
n.a. |
||
Adjusted Diluted, net earnings per share |
$ 0.19 |
0.18 |
$ 0.02 |
10 % |
$ 1.00 |
$ 0.89 |
$ 0.12 |
13 % |
||
` |
||||||||||
(1) |
Costs related to the acquisitions of ABG and Nude Beverages brands |
||||||||||
(2) |
(Income) / costs related to organizational restructuring and provisions |
||||||||||
(3) |
Costs related to fair value adjustments to inventory due to business combination |
||||||||||
(4) |
(Income) / costs related to one-time fee for distributor transition |
||||||||||
(5) |
Notional interest costs related to non controlling interest obligations for ABG |
||||||||||
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 financial measures for the twelve-month periods ended June 30, 2024, and 2023:
Year Ended |
|||||
June 30, |
June 30, |
||||
(in millions of Canadian dollars) |
2024 |
2023 |
$ Change |
% Change |
|
Adjusted Earnings from operations |
$ 44.6 |
32.4 |
$ 12.1 |
37 % |
|
Adjusted for depreciation & amortization |
15.4 |
14.8 |
0.6 |
4 % |
|
Adjusted EBITDA |
$ 60.0 |
$ 47.2 |
$ 12.8 |
27 % |
|
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. Organic revenue growth is not a standardized financial measure and might not be comparable to similar measures disclosed by other issuers.
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-and-twelve-month periods ended June 30, 2024, and 2023:
Three Months Ended |
Year Ended |
|||||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||||
(in millions of Canadian dollars) |
2024 |
2023 |
$ Change |
% Change |
2024 |
2023 |
$ Change |
% Change |
||
Case goods revenue |
$ 57.9 |
35.8 |
$ 22.1 |
62 % |
$ 198.8 |
132.9 |
$ 65.9 |
50 % |
||
Adjusted for revenue from acquired or disposed entities |
(22.7) |
- |
(22.7) |
n.a. |
(60.8) |
- |
(60.8) |
n.a. |
||
Organic case goods revenue |
35.1 |
35.8 |
(0.6) |
(2 %) |
137.9 |
132.9 |
5.0 |
4 % |
||
Total commissions |
7.1 |
7.4 |
(0.3) |
(4 %) |
26.6 |
26.9 |
(0.3) |
(1 %) |
||
Other services |
1.6 |
1.1 |
0.5 |
46 % |
4.3 |
3.2 |
1.2 |
37 % |
||
Total organic revenue |
$ 43.8 |
$ 44.2 |
$ (0.4) |
(1 %) |
$ 168.8 |
$ 163.0 |
$ 5.9 |
4 % |
||
Total Debt refers to debt of the Company, which includes bank indebtedness and credit facilities payable, lease liabilities and long-term debt.
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 years ended June 30, 2024 and 2023:
June 30, |
June 30, |
|
(in millions of Canadian dollars) |
2024 |
2023 |
Credit facilities payable |
$ (17.8) |
$ - |
Lease liabilities |
(3.0) |
(3.6) |
Long-term debt |
(120.0) |
(98.0) |
Total debt |
$ (140.8) |
$ (101.6) |
Cash |
$ 4.6 |
$ - |
Deposits in cash management pools |
27.4 |
155.0 |
Credit facilities payable |
(17.8) |
- |
Long-term debt |
(120.0) |
(98.0) |
Net debt |
$ (105.8) |
$ 57.0 |
Please refer to the "Non-IFRS Financial Measures" & "Non-IFRS Financial Ratios" section of our MD&A for the three-months and year ended June 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-and-twelve month period ended June 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]
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