Andrew Peller (ADW) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 revenue rose 1% to CAD 385.9 million, with Q4 revenue up 9.4% year-over-year to CAD 85.0 million, outperforming most peers in the Canadian wine industry.

• Gross margin expanded to 39% for the year and 41.8% in Q4, driven by the Ontario VQA Support Program and cost-saving initiatives.

• EBITDA grew 32.4% to CAD 50.3 million for the year, with Q4 EBITDA at CAD 9.3 million, reversing a prior year loss.

• Net loss narrowed to CAD 2.9 million for the year and CAD 6.9 million in Q4, both improved from the previous year.

• Navigated inflationary and supply chain challenges through cost-savings and operational improvements.

Financial highlights

• Q4 sales rose 9.4% year-over-year to CAD 85.0 million; full-year sales up 1% to CAD 385.9 million.

• Gross margin for the year increased 200 basis points to 39%, with a target of 41%-42% in the next two years.

• EBITDA for the year was CAD 50.3 million, up 32% or CAD 12 million from the prior year.

• Net loss per Class A share improved to CAD 0.07 for the year, from CAD 0.08 last year.

• Cash provided by operations increased to CAD 38.1 million from CAD 13.8 million year-over-year.

Outlook and guidance

• Management expects above-category sales performance and further margin and EBITDA growth.

• Continued focus on cost savings, margin improvement, and operational efficiency.

• Anticipates M&A opportunities to supplement organic growth, maintaining a historical 3%-4% top-line growth split between organic and acquisition.

• Plans to capitalize on Ontario retail modernization and expansion in grocery, LCBO, and e-commerce channels.