Colabor Group (GCL) investor relations material

Executive summary

• Sales rose 31.1% year-over-year to $212.5 million in Q3 2025, driven by acquisitions (LM Plus, Tout-Prêt, Alimplus) and organic growth, but profitability declined due to integration costs, margin pressure, and a cybersecurity incident.

• Adjusted EBITDA margin declined to 2.7% from 5.9% year-over-year, reflecting lower gross margins, less favorable customer mix, and higher integration costs.

• Net loss from continuing operations was $74.4 million (or $0.73 per share), mainly due to a $75 million non-cash goodwill impairment and higher financial and amortization expenses.

• Cash flow from operations was negative $7.7 million, down from positive $9.9 million a year ago, impacted by lower adjusted EBITDA and higher working capital needs.

• Leadership transition with Kelly Shipway appointed as President and CEO, and Denis Mathieu named Interim Chairman after the passing of Warren White.

Financial highlights

• Q3 2025 consolidated sales reached $212.5 million, up 31.1% year-over-year, driven by acquisitions and organic growth, partially offset by an $8 million revenue loss from the cybersecurity incident.

• Adjusted EBITDA from continuing operations was $5.8 million (2.7% of sales), down from $9.5 million (5.9%) in Q3 2024.

• Net loss from continuing operations was $74.4 million, compared to net earnings in Q3 2024, impacted by a $75 million goodwill impairment.

• Net debt increased to $112.1 million from $47.8 million at the end of 2024; leverage ratio rose to 7.8x adjusted EBITDA from 2.4x.

• Cash flows from operations were negative $7.7 million, down from positive $9.9 million a year ago.

Outlook and guidance

• 2025 expected to remain a transition year, not reflective of long-term earnings or cash flow potential.

• Full benefit of $12 million annualized cost synergies from LM Plus/Alimplus integration expected to be realized starting H1 2026, after transition chargebacks end.

• Return to stronger profitability anticipated in 2026, driven by cost synergies and operational efficiencies.

• Forbearance agreements in place and extended with principal lenders and Investissement Québec, in effect until January 30, 2026.

• Additional $15 million equity raise planned to reduce leverage and provide liquidity, with discussions ongoing.