Colabor Group Reports Results for the First Quarter of 2015

BOUCHERVILLE, QUEBEC--(Marketwired - April 29, 2015) - Colabor Group Inc. (TSX:GCL) ("Colabor" or the "Corporation") today reported results for the first quarter of fiscal 2015 ended March 21, 2015. Note that the Corporation's 2015 fiscal year began on the last Sunday of the previous calendar year, rather than on January 1 as in previous years. Consequently, the first quarter of fiscal 2015 had three more days than the corresponding quarter of 2014. Due to seasonal factors, the first quarter has historically produced lower results than other periods in terms of sales and profitability.

"First-quarter results were consistent with our expectations, showing an improvement in comparable sales resulting from our initiatives to stimulate sales volume and from the contribution of new contracts that offset the effect on operating profitability of highly competitive market conditions. In this context, Colabor is assiduously pursuing its efforts to further reduce its costs and to increase its operating efficiency," said Claude Gariépy, President and Chief Executive Officer of Colabor.

FIRST-QUARTER RESULTS

Consolidated sales for the 84-day period ended March 21, 2015 were $304.7 million, versus $279.3 million for the 81-day period ended March 22, 2014. This 9.1% increase reflects the change in the beginning date of the fiscal year and the acquisition of Alimentation Marcotte ("Marcotte") in September 2014. Excluding these factors, and on the basis of an equal number of days, comparable sales were up 2.9%, with sustained gains in the meat category and the contribution of new supply agreements more than offsetting the Corporation's voluntary withdrawal from the distribution of tobacco products in Ontario.

Sales of the Distribution segment were $205.6 million, up 9.6% from $187.6 million a year earlier, as a result of the change in the beginning date of the fiscal year and the acquisition of Marcotte. Comparable sales were up 0.3%, with the contribution from new contacts offsetting the withdrawal from the tobacco products category in Ontario.

Sales of the Wholesale segment increased 8.0% to $99.0 million, versus $91.7 million a year earlier. Comparable sales were up 8.2% as a result of important market share gains and price inflation in the meat category, as well as the elimination of sales to Marcotte by certain Colabor divisions.

EBITDA was $464,000, compared to $148,000 in the first quarter of 2014. The increase reflects the higher sales volume and the change in the beginning date of the fiscal year, offset by lower margins on new contracts and an increase in operating expenses related to Marcotte's operations. The pending cessation of warehousing operations at Trois-Rivières will bring marked improvement in this regard beginning in the fourth quarter of this year.

Results for the first quarter of 2015 included charges not related to current operations of $2.6 million related to a writedown of the investment in Investissements Colabor Inc. (non-cash charge of $1.7 million) and to the internal restructuring of operations ($0.9 million). Excluding these charges, operating earnings, i.e. before financial expenses and income taxes, improved by $1.2 million from the previous year. Finally, the Corporation recorded a net loss of $6.3 million for the first quarter versus a net loss of $5.6 million a year earlier.

CASH FLOW AND FINANCIAL POSITION

Cash flow from operations was $7.9 million in the first quarter of 2015. This source of funds reflects the seasonal nature of working capital, which generated funds of $9.1 million during the quarter.

This source of funds allowed the Corporation to reduce the amount drawn on its bank credit facility. As of March 21, 2015, this amount was $91.3 million, down from $94.1 million at the end of the previous quarter. The average daily indebtedness in the first quarter of 2015 was $97 million, relatively stable versus $96 million in the first quarter of 2014 and $94 million in the fourth quarter of 2014, despite a rise of $15.7 million in inventories versus the same date last year and the acquisition of Marcotte in September 2014.

OUTLOOK

"In recent months, Colabor has maintained and increased its sales volume by winning new contracts, while also renewing and broadening the scope of existing contracts, notably its important multi-year contract with Cara. Under current conditions, we are continuing to reduce our costs and certain measures are already in place, among them the consolidation of warehousing operations in eastern Quebec following the acquisition of Marcotte. Management remains proactive in assessing its cost structure and its asset utilization, and is taking the necessary measures to increase and sustain profitability," concluded Mr. Gariépy.

CONFERENCE CALL

Colabor will hold a conference call to discuss these results on Wednesday, April 29, beginning at 3 p.m. Eastern Time. Interested parties can join the call by dialling 647-788-4922 (from Toronto and overseas) or 1-877-223-4471 (from elsewhere in North America). If you are unable to participate, you can listen to a recording by dialling 1-800-585-8367 and entering the code 17052929 on your telephone keypad. The recording will be available from 6 p.m. Wednesday, April 29 to 11:59 p.m. Wednesday, May 6, 2015.

NON-IFRS MEASURES

The information provided in this release includes non-IFRS performance measures, notably earnings before financial expenses, income taxes, depreciation and amortization ("EBITDA") and cash flow. Since these concepts are not defined by IFRS, they may not be comparable to those of other companies.

ADDITIONAL INFORMATION

The Management Discussion and Analysis and the financial statements of the Corporation will be available at SEDAR (www.sedar.com) following publication of this release. Additional information about Colabor Group Inc. may be found at SEDAR and on the Corporation's website at www.colabor.com.

FORWARD-LOOKING STATEMENTS

This news release contains certain statements that may be deemed forward-looking statements reflecting the opinions or current expectations of Colabor Group Inc. concerning its performance and business operations and future events. These statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance and actual results, realities, or events may differ materially. Except as required by law, the Corporation undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates, or opinions or other factors should change.

ABOUT COLABOR

Colabor is a distributor and wholesaler of food and non-food products serving the foodservice market (cafeterias, restaurants, hotels, restaurant chains) in Québec, Ontario and the Atlantic provinces, as well as the retail market (grocery stores and convenience stores).