Colabor Group Inc.
TSX : GCL

Colabor Group Inc.

July 16, 2015 07:00 ET

Colabor Group Reports Results for the Second Quarter of 2015

- Total sales up 5.6%, comparable sales up 4.2%

- EBITDA of $8.5 million, or 2.3% of sales

- Cash flow from operations of $3.6 million, up from $1.6 million a year earlier

BOUCHERVILLE, QUEBEC--(Marketwired - July 16, 2015) - Colabor Group Inc. (TSX:GCL) ("Colabor" or the "Corporation") today reported results for the second quarter of fiscal 2015 ended June 13, 2015.

"Colabor is very proud of its solid progress in comparable sales in the second quarter achieved on the strength of new contracts and organic growth. Profitability, though in line with our expectations, remains below potential and we continue to put forward initiatives aimed at reducing costs and increasing operating efficiency in order to reach our annual objective," said Claude Gariépy, President and Chief Executive Officer of Colabor.

Financial highlights Quarters ended Six months ended
(thousands of dollars except per-share data) June 13, 2015 June 14, 2014 June 13, 2015 June 14, 2014
Sales 366,635 347,200 671,297 626,518
EBITDA 8,512 9,504 8,976 9,652
Operating earnings before the following items 5,107 5,025 2,155 919
Impairment loss on equity investment - - 1,731 -
Charges not related to current operations 507 - 1,345 -
Net earnings 1,002 1,630 (5,313 ) (3,936 )
Per share - basic ($) 0.04 0.06 (0.19 ) (0.15 )
Cash flow from operations* 3,609 1,600 11,464 13,547
Weighted average number of shares outstanding (basic, in thousands) 27,454 27,062 27,454 27,062

* After net change in working capital

SECOND-QUARTER RESULTS

Consolidated sales for the 84-day period ended June 13, 2015 reached $366.6 million, up 5.6% from $347.2 million for the 84-day period ended June 14, 2014. The increase reflects the acquisition of Alimentation Marcotte ("Marcotte") in September 2014 and a solid 4.2% comparable sales growth, related mainly to sustained gains in the meat category, the contribution of new supply agreements and organic growth, especially in Ontario.

Sales of the Distribution segment rose 9.4% to $247.4 million, versus $226.2 million a year earlier, as a result of the acquisition of Marcotte. Comparable sales were up 4.1%, mainly as a result of new contacts. Sales of the Wholesale segment were $119.2 million, down slightly from $121.0 million a year earlier. The difference reflects the elimination of sales to Marcotte by other Colabor divisions. Comparable sales excluding this factor were up 4.2% as a result of significant market share gains and price inflation in the meat category.

EBITDA was $8.5 million, or 2.3% of sales, compared to $9.5 million or 2.7% of sales in the second quarter of 2014. The variation reflects lower margins on new and renewed contracts, as well as operating expenses related to Marcotte's operations.

Results for the second quarter of 2015 include charges not related to current operations of $507,000 related to the internal restructuring of operations. Excluding these charges, operating earnings, i.e. earnings before financial expenses and income taxes, were $5.1 million, up slightly from $5.0 million a year earlier. Net earnings for the second quarter were $1.0 million, compared to $1.6 million a year earlier.

SIX-MONTH RESULTS

For the 168-day period ended June 13, 2015, consolidated sales were $671.3 million, up 7.1% from $626.5 million for the 165-day period ended June 14, 2014. Comparable sales were up 3.6%.

EBITDA was $9.0 million, or 1.3% of sales, compared to $9.7 million, or 1.5% of sales, a year earlier. Operating earnings before charges of $3.1 million not related to current operations recorded in the first six months of 2015, including a non-cash charge for writedown of the investment in Investissements Colabor Inc. recorded in the first quarter, were $2.2 million, versus $0.9 million in 2014. For the six months ended June 13, 2015, the Corporation recorded a net loss of $5.3 million, compared to a net loss of $3.9 million a year earlier.

CASH FLOW AND FINANCIAL POSITION

Cash flow from operations was $3.6 million in the second quarter of 2015, up from $1.6 million a year earlier. Reflecting improved management of working capital, seasonal requirements were lower in the second quarter of 2015, reaching $4.0 million versus $7.4 million a year earlier. For the first six months of 2015, cash flow from operations was $11.5 million, compared to $13.5 million for the first six months of 2014.

Reflecting seasonal working-capital requirements, Colabor had drawn $97.6 million on its bank credit facility as of June 13, 2015, compared to $91.3 million at the end of the previous quarter. This situation resulted in an increase of average daily indebtedness to $101 million in the second quarter of 2015, compared with $97 million in the first quarter.

OUTLOOK

"The increase in sales volume attests to the validity of our strategy for stimulating sales growth and Colabor remains proactive in its approach to growing its sales in a highly competitive market. In this respect, it is important to remember that third-quarter operating profitability will reflect the renewal of supply agreements with Cara and the full effect of affiliated distributor contracts. Over the long term, the measures taken to reduce our costs and improve our ways of doing things will enable Colabor to realize improved and sustainable profitability," concluded Mr. Gariépy.

CONFERENCE CALL

Colabor will hold a conference call to discuss these results on Thursday, July 16, beginning at 10:30 a.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 72285567 on your telephone keypad. The recording will be available from 2:30 p.m. Thursday, July 16, to 11:59 p.m. Thursday, July 23, 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"), operating earnings before impairment loss on equity investment and charges not related to current expenditures, 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 assumes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions or other factors 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).

Contact Information

  • Investors: Colabor Group Inc.
    Jean-Francois Neault, CPA, CMA, MBA
    Vice-President and Chief Financial Officer
    450-449-0026 ext. 308
    450-449-6180 (FAX)
    jean-francois.neault@colabor.com

    Media: Maison Brison Inc.
    Martin Goulet, CFA
    Senior Vice-President, Investor Relations
    514-731-0000 ext. 229
    514-731-4525 (FAX)
    martin@maisonbrison.com