Andrew Peller Limited Reports Financial Results for First Quarter of Fiscal 2026
FIRST QUARTER 2026 HIGHLIGHTS:
Revenue was $99.2 million, compared with revenue of $99.5 million in Q1 2025;
Gross margin of 42.4%, compared with 38.4% in the prior year;
EBITA of $16.1 million, up from $12.9 million in Q1 2025;
Net income improved to $4.6 million ($0.11 per Class A Share), compared to a loss of $0.4 million (loss of $0.01 per Class A Share) in Q1 2025; and
Dividends of $0.0615 per Class A Share and $0.535 per Class B Share.
'Our first quarter results were highlighted by a 25% year-over-year increase in EBITA as we continue to navigate a dynamic retail environment,' said Paul Dubkowski, Chief Executive Officer. 'Our strong performance in the quarter was due to ongoing improvements in our margins, profitability, and free cash flow, while lowering debt and further strengthening our balance sheet. Margins continue to expand due to the success of our cost savings programs and are further supported by the Ontario Government's recent policy changes, which reflect its ongoing commitment to a strong and competitive industry. The business is on a strong foundation as we look to generate sustained long-term value through above-category sales performance, EBITA growth, and leveraging our asset base.'
Financial Highlights
(Financial Statements and the Company's Management Discussion and Analysis for the period can be obtained on the Company's web site at ir.andrewpeller.com)
For the three months ended June 30,
(in $000, except per share amounts) 2025 2024
Revenue $ 99,184 $ 99,465
Gross margin (1) 42,032 38,179
Gross margin (% of revenue) 42.4 % 38.4 %
Selling and administrative expenses 25,911 25,320
EBITA (1) 16,121 12,859
Interest expense 3,902 4,580
Net unrealized loss on derivative financial instruments 17 218
Other expenses, net 439 296
Net earnings (loss) 4,553 (375)
Earnings (loss) per share – Class A basic $ 0.11 $ (0.01)
Earnings (loss) per share – Class B basic $ 0.09 $ (0.01)
Dividend per share – Class A $ 0.0615 $ 0.0615
Dividend per share – Class B $ 0.0535 $ 0.0535
(1) Please refer to the Company's MD&A concerning 'Non-IFRS Measures'
Financial Review
Revenue for the three months ended June 30, 2025 remained consistent with the prior year's first quarter results. Several of the Company's well-established trade channels performed well, particularly sales in western Canada due to the success of our BC replacement program, as well as sales to big box stores and at the Company estates. This was offset by expected softness in sales at the Company's stand-alone retail stores due to the evolving Ontario market, as well as sales from the Company's personal wine making business.
Gross margin as a percentage of revenue for the three months ended June 30, 2025 increased to 42.4% from 38.4%. The increase was driven by lower costs for glass bottles and inbound freight, resulting from the Company's cost savings program. The improvement also reflects the benefit of the Ontario Government Support Program of $2.1 million, which was recognized in the first quarter of fiscal 2026 but was not in effect during the comparable period in fiscal 2025.
As a percentage of revenue, selling and administrative expenses increased to 26.1% from 25.5% for the three months ended June 30, 2025 primarily due to timing of professional services and advertising and promotional expenditures. The increase is partially offset by a reduction in compensation expense resulting from the realization of cost savings associated with the Company's restructuring efforts.
Earnings before interest, amortization, net unrealized gains and losses on derivative financial instruments, other (income) expenses, and income taxes ('EBITA') (see 'Non-IFRS Measures' section of the Company's MD&A) was $16.1 million in the first quarter of fiscal 2026, compared to $12.9 million in the first quarter of prior year, an increase of 25.4%.
Interest expense for the three months ended June 30, 2025 has decreased by 14.8% compared to the prior year due to lower average debt levels and lower interest rates compared to prior year.
The Company recorded a nominal net unrealized non-cash loss in the first quarter of fiscal 2026 related to mark-to-market adjustments on interest rate swaps and foreign exchange contracts compared to a loss of $0.2 million in the first quarter of fiscal 2025. The Company has elected not to apply hedge accounting and accordingly the change in fair value of these financial instruments is reflected in the Company's consolidated statement of earnings (loss) each reporting period. These instruments are considered to be effective economic hedges and are expected to mitigate the short-term volatility of changing foreign exchange and interest rates.
The Company generated net earnings of $4.6 million ($0.11 per Class A share) for the first quarter of fiscal 2026 compared to a net loss of $0.4 million (loss of $0.01 per Class A share) in the first quarter of the prior year.
As part of its strategy to recognize value from non-core assets, during the first quarter of fiscal 2026, the Company initiated proceedings to sell land, vineyard, and building assets in Kaleden, British Columbia with a net book value of $1.0 million which were classified as assets held for sale on June 30, 2025. The sale was completed on July 15, 2025 for proceeds of $1.3 million.
Investor Conference Call
The Company will hold a conference call to discuss the results on Thursday, August 7, 2025 at 10:00 a.m. ET. Paul Dubkowski, CEO, Renee Cauchi, CFO and Patrick O'Brien, President and CCO, will host the call, with a question and answer period following management's presentation.
About Andrew Peller Limited
Andrew Peller Limited is one of Canada's leading producers and marketers of quality wines and craft beverage alcohol products. The Company's award-winning premium and ultra-premium Vintners' Quality Alliance brands include Peller Estates, Trius, Thirty Bench, Wayne Gretzky, Sandhill, Red Rooster, Black Hills Estate Winery, Tinhorn Creek Vineyards, Gray Monk Estate Winery, Raven Conspiracy, and Conviction. Complementing these premium brands are a number of popularly priced varietal offerings, wine-based liqueurs, craft ciders, and craft spirits. The Company owns and operates 101 well-positioned independent retail locations in Ontario under The Wine Shop, Wine Country Vintners, and Wine Country Merchants store names. The Company also operates Andrew Peller Import Agency and The Small Winemaker's Collection Inc., importers and marketing agents of premium wines from around the world. With a focus on serving the needs of all wine consumers, the Company produces and markets premium personal winemaking products through its wholly owned subsidiary, Global Vintners Inc., the recognized leader in personal winemaking products. More information about the Company can be found at ir.andrewpeller.com.
The Company utilizes EBITA (defined as earnings before interest, amortization, net unrealized gains and losses on derivative financial instruments, other (income) expenses, and income taxes) to measure its financial performance. EBITA is not a recognized measure under IFRS. Management believes that EBITA is a useful supplemental measure to net earnings (loss), as it provides readers with an indication of earnings available for investment prior to debt service, capital expenditures, and income taxes, as well as provides an indication of recurring earnings compared to prior periods. Readers are cautioned that EBITA should not be construed as an alternative to net earnings determined in accordance with IFRS as indicators of the Company's performance or to cash flows from operating, investing, and financing activities as a measure of liquidity and cash flows. The Company also utilizes gross margin (defined as sales less cost of goods sold, excluding amortization). The Company's method of calculating EBITA and gross margin may differ from the methods used by other companies and, accordingly, may not be comparable to measures used by other companies.
Andrew Peller Limited common shares trade on the Toronto Stock Exchange (symbols ADW.A and ADW.B).
FORWARD-LOOKING INFORMATION
Certain statements in this news release may contain 'forward-looking statements' within the meaning of applicable securities laws including the 'safe harbour provisions' of the Securities Act (Ontario) with respect to APL and its subsidiaries. Such statements include, but are not limited to, statements about the growth of the business; its launch of new premium wines and craft beverage alcohol products; sales trends in foreign markets; its supply of domestically grown grapes; and current economic conditions. These statements are subject to certain risks, assumptions, and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. The words 'believe', 'plan', 'intend', 'estimate', 'expect', or 'anticipate', and similar expressions, as well as future or conditional verbs such as 'will', 'should', 'would', 'could', and similar verbs often identify forward-looking statements. We have based these forward-looking statements on our current views with respect to future events and financial performance. With respect to forward-looking statements contained in this news release, the Company has made assumptions and applied certain factors regarding, among other things: future grape, glass bottle, and wine and spirit prices; its ability to obtain grapes, imported wine, glass, and other raw materials; fluctuations in foreign currency exchange rates; its ability to market products successfully to its anticipated customers; the trade balance within the domestic Canadian and international wine markets; market trends; reliance on key personnel; protection of its intellectual property rights; the economic environment; the regulatory requirements regarding producing, marketing, advertising, and labelling of its products; the regulation of liquor distribution and retailing in Ontario; the application of federal and provincial environmental laws; and the impact of increasing competition.
These forward-looking statements are also subject to the risks and uncertainties discussed in this news release, in the 'Risks and Uncertainties' section and elsewhere in the Company's MD&A and other risks detailed from time to time in the publicly filed disclosure documents of Andrew Peller Limited which are available at www.sedarplus.com. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and assumptions which could cause actual results to differ materially from those conclusions, forecasts, or projections anticipated in these forward-looking statements. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. The Company's forward-looking statements are made only as of the date of this news release, and except as required by applicable law, the Company undertakes no obligation to update or revise these forward-looking statements to reflect new information, future events or circumstances or otherwise.
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