SAINT-BRUNO-DE-MONTARVILLE, Quebec, July 24, 2025 (GLOBE NEWSWIRE) -- Colabor Group Inc. (TSX: GCL) ("Colabor" or the "Company") reports its results for the second quarter ended June 14, 2025.
Second Quarter 2025 Financial Highlights:
- Sales increased by 5.1% to $169.5 million, compared to $161.3 million for the corresponding period of 2024;
- Net loss from continuing operations was $2.3 million, compared to net earnings of $1.7 million for the corresponding period of 2024;
- Adjusted EBITDA(1) decreased to $5.4 million from $9.7 million for the corresponding period of 2024, with an adjusted EBITDA(1) margin to 3.2% of sales, compared to 6.0% of sales during the corresponding period of 2024;
- Cash flow from operating activities decreased to $4.5 million compared to $5.0 million for the second quarter of 2024;
- Net debt(2) increased to $97.3 million, compared to $47.8 million as at December 28, 2024; and
- On June 3, 2025, the Company acquired the food distribution assets of Alimplus Inc. and all of the shares of its subsidiary Tout-Prêt Inc. (the "Acquisition"), concurrently concluded the amendment and restatement of the secured credit facility and extension of the subordinated debt and entered into a new $15.0 million highly subordinated debt agreement.
Recent Event:
On July 21, 2025, the Company announced that it identified a cybersecurity incident on July 20, 2025 that has impacted its internal IT systems. Refer to section 2.1 in MD&A for more information.
Table of Second Quarter 2025 Financial Highlights:
| Financial highlights | 12 weeks | 24 weeks | ||||||
| (in thousands of dollars, except percentages, per share data and financial leverage ratio) | 2025 | 2024 | 2025 | 2024 | ||||
| $ | $ | $ | $ | |||||
| Sales from continuing operations | 169,482 | 161,278 | 301,184 | 292,478 | ||||
| Adjusted EBITDA(1) | 5,358 | 9,718 | 7,636 | 14,600 | ||||
| Adjusted EBITDA(1) margin (%) | 3.2 | 6.0 | 2.5 | 5.0 | ||||
| Net (loss) earnings from continuing operations | (2,277 | ) | 1,679 | (6,299 | ) | (97 | ) | |
| Net (loss) earnings | (2,277 | ) | 1,659 | (6,299 | ) | (117 | ) | |
| Per share - basic and diluted ($) | (0.02 | ) | 0.02 | (0.06 | ) | - | ||
| Cash flow from operating activities | 4,538 | 4,978 | 10,699 | 16,723 | ||||
| Financial position | As at | As at | ||||||
| June 14, | December 28, | |||||||
| 2025 | 2024 | |||||||
| Net debt(2) | 97,334 | 47,802 | ||||||
| Financial leverage ratio(3) | 4.3x | 2.4x | ||||||
(1) Non-IFRS measure. Refer to the table Reconciliation of Net (Loss) Earnings to adjusted EBITDA in MD&A section 6 "Non-IFRS Performance Measures". Adjusted EBITDA corresponds to net operating (loss) earnings before costs not related to current operations, depreciation and amortization and expenses for stock-based compensation plan.
(2) Non-IFRS measure. Refer to MD&A section 6 "Non-IFRS Performance Measures". Net debt corresponds to bank indebtedness, current portion of long-term debt and long-term debt, net of cash.
(3) Financial leverage ratio is an indicator of the Company's ability to service its long-term debt. It is defined as net debt / adjusted EBITDA and pro forma adjustments related to the recent Acquisition, less lease liability payments and interests on lease obligations for the last four quarters. Refer to MD&A section 6 "Non-IFRS Performance Measures".
"The closing of the Acquisition of Alimplus' distribution activities was an important milestone during the second quarter. Once integrated, the Acquisition will allow us to significantly accelerate our growth plan and reinforces us as a Quebec leader in food distribution. This Acquisition includes the signing of a six-year distribution agreement to serve the four stores of Groupe Mayrand Alimentation inc. It is highly strategic and allows us to gain a customer base in coveted territories, create significant synergies and offer cross-selling opportunities, particularly with our private brand and Tout-Prêt, Lauzon and Norref's products," said Mr. Frenette.
"Mainly due to the acquisition and the growth of major accounts in the second quarter, we were able to generate revenue growth and partially offset the impact of ongoing macroeconomic headwinds affecting the restaurant industry, as well as the renewal of a major contract in December 2024, at less favorable market conditions. The latter had a significant impact on our profitability during the period, and we aim to gradually improve our margins by focusing on a more favorable product and customer mix in the upcoming quarters," added Mr. Frenette.
Results for the Second Quarter of 2025
Consolidated sales for the second quarter were $169.5 million, an increase of 5.1% compared to $161.3 million during the corresponding quarter of 2024. Sales from the distribution activities increased by 7.5% as a result of the recent Acquisition which contributed $8.8 million, the organic sales volume growth with major account clients and the effect of inflation. This growth was mitigated by the renewal of a supply agreement with an institutional customer at economic conditions significantly lower to the margins in effect in 2024, as well as the current economic uncertainties affecting the restaurant industry. Sales from the wholesale activities have decreased by 1.8% mainly as a result of the restaurant industry slowdown during the second quarter of 2025.
Adjusted EBITDA(1) from continuing operations was $5.4 million or 3.2% of sales from continuing operations compared to $9.7 million or 6.0% during 2024. These variations result from the decrease in gross margin related to the supply agreement renewed in December 2024, as previously explained.
Net loss from continuing operations and net loss were $2.3 million, down from net earnings from continuing operations and net earnings of $1.7 million for the corresponding quarter of the previous year, resulting essentially from a decrease of the adjusted EBITDA(1) and an increase in depreciation and costs not related to current operations, mitigated by higher income taxes recovery.
Results for 24-week period of 2025
Consolidated sales for the 24-week period were $301.2 million, compared to $292.5 million for the corresponding period of 2024. Sales from the distribution activities grew by 4.9% and the wholesale sales declined by 2.8%.
Adjusted EBITDA(1) from continuing operations was $7.6 million or 2.5% of sales from continuing operations compared to $14.6 million or 5.0% in 2024. These variations result from a decrease in gross margin related to the supply agreement renewed in December 2024.
Net loss from continuing operations and net loss were $6.3 million, down from $0.1 million in the previous fiscal year. This variation is explained by the elements previously mentioned.
Cash Flow and Financial Position
Cash flows from operating activities were $4.5 million and $10.7 million for the 12 and 24-week periods of 2025, respectively, compared to $5.0 million and $16.7 million for the corresponding period of 2024. This decrease is mainly due to the decrease in adjusted EBITDA(1) mitigated by a lower utilization of working capital(4). The lower utilization of working capital(4) is explained by the timing of supplier payments.
As at June 14, 2025, the Company's working capital(4) was $48.3 million, down from $50.3 million at the end of the fiscal year 2024. This decrease reflects improved management of accounts payable, mitigated by the recent Acquisition.
As at June 14, 2025, the Company's net debt(2) was increased to $97.3 million, compared to $47.8 million at the end of the fiscal year 2024, resulting from an increase in the amended and restated credit facility of $34.3 million and a new highly subordinated debt of $15.0 million to finance the Acquisition.
(4) Working capital is a non-IFRS performance measure. Working capital is an indicator of the Company's ability to hedge its current liabilities with its current assets. Refer to MD&A section 3.2 "Financial Position" for detailed calculation.
Outlook
"The recent Acquisition positions us well to differentiate ourselves in a competitive market. In the second half of the year, we plan to focus on optimizing our activities in order to generate further efficiencies through an expanded customer base, allowing us to continue our momentum in targeted territories and industries. Improving our profitability and prioritizing debt reduction will remain key areas of focus, as they have been in recent years," concluded Mr. Frenette.
Non-IFRS Performance Measures
The information provided in this release includes non-IFRS performance measures, notably adjusted earnings before financial expenses, depreciation and amortization and income taxes ("Adjusted EBITDA")(1). As these concepts are not defined by IFRS, they may not be comparable to those of other companies. Refer to Section 6 "Non-IFRS Performance Measures" in the Management's Discussion and Analysis.
| Reconciliation of Net Loss to Adjusted EBITDA(1) | 12 weeks | 24 weeks | ||||||
| (in thousands of dollars) | 2025 | 2024 | 2025 | 2024 | ||||
| $ | $ | $ | $ | |||||
| Net (loss) earnings from continuing operations | (2,277 | ) | 1,679 | (6,299 | ) | (97 | ) | |
| Income taxes (recovery) | (872 | ) | 555 | (2,300 | ) | (61 | ) | |
| Financial expenses | 2,968 | 2,784 | 5,617 | 5,373 | ||||
| Operating (loss) earnings | (181 | ) | 5,018 | (2,982 | ) | 5,215 | ||
| Expenses for stock-based compensation plan | 6 | 37 | 28 | 52 | ||||
| Costs not related to current operations | 422 | 23 | 747 | 122 | ||||
| Depreciation and amortization | 5,111 | 4,640 | 9,843 | 9,211 | ||||
| Adjusted EBITDA(1) | 5,358 | 9,718 | 7,636 | 14,600 | ||||
Additional Information
The Management's Discussion and Analysis and the consolidated financial statements of the Company are available on SEDAR+ (www.sedarplus.ca). Additional information, including the annual information form, about Colabor Group Inc. can also be found on SEDAR+ and on the Company's website at www.colabor.com.
Forward-Looking Statements
This press release contains certain forward-looking statements as defined under applicable securities law. Forward-looking information may relate to Colabor's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "may"; "will"; "should"; "expect"; "plan"; "anticipate"; "believe"; "intend"; "estimate"; "predict"; "potential"; "continue"; "foresee"; "ensure" or other similar expressions concerning matters that are not historical facts. Particularly, statements regarding the Company's financial guidelines, future operating results and economic performance, objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities, which Colabor believes are reasonable as of the current date. Assumptions such as synergies objective are based on a preliminary analysis of the organizational structure and the current level of spending across the Company. Our synergies objective assumes that we will be able to establish and maintain an effective process for sharing best practices, and is also based on our ability to integrate the acquired business. An important change in these facts and assumptions could significantly impact our synergies estimate as well as the timing of the implementation of our various initiatives. Refer in particular to section 2.2 "Development Strategies and Outlook" of the Company's MD&A. While Management considers these assumptions to be reasonable based on information currently available to the Company, they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what Colabor currently expects. For more exhaustive information on these risks and uncertainties, the reader should refer to section 7 "Risks and Uncertainties" of the Company's MD&A. These factors, which include risks related to the repercussions of any cyber security incident and any negotiations for financial relief, are not intended to represent a complete list of the factors that could affect Colabor and future events and results may vary significantly from what Management currently foresees. The reader should not place undue importance on forward-looking information contained in this press release, information representing Colabor's expectations as of the date of this press release (or as of the date they are otherwise stated to be made), which are subject to change after such date. While Management may elect to do so, the Company is under no obligation (and expressly disclaims any such obligation) and does not undertake to update or alter this information at any particular time, whether as a result of new information, future events or otherwise, except as required by law.
Conference Call
Colabor will hold a conference call to discuss these results on Friday, July 25, 2025, beginning at 9:30 a.m. Eastern time. Interested parties can join the call by dialing 1-800-990-4777 (from anywhere in North America) or 1-289-819-1299 (Toronto) or 1-514-400-3794 (Montreal). If you are unable to participate, you can listen to a recording by dialing 1-888-660-6345 or 1-289-819-1450 and entering the code 34320# on your telephone keypad. The recording will be available from 1:30 p.m. on Friday, July 25, 2025, until 11:59 p.m. on August 1, 2025. Note that the recording will be available offline on our website at the following address:
https://colabor.com/en/investisseurs-en/evenements-et-presentations/
You can also use the QuickConnect link: https://emportal.ink/4l7iHyQ. This new link allows any participant to access the conference call by clicking on the URL link and enter their name and phone number.
About Colabor
Colabor is a distributor and wholesaler of food and related products serving the hotel, restaurant and institutional markets or "HRI" in Quebec and in the Atlantic provinces, as well as the retail market. Within its two operating activities, Colabor offers specialty food products such as meat, fish and seafood, as well as food and related products through its Broadline activities.
Further information:
| Louis Frenette President and Chief Executive Officer Colabor Group Inc Tel.: 450-449-4911 extension 1265 investors@colabor.com | Danielle Ste-Marie Ste-Marie Strategy and Communications Inc. Investor Relations Tel.: 450-449-0026 extension 1180 |
