Colabor Group (GCL) Q4 2024 earnings summary

Executive summary

• Q4 2024 sales grew 3.2% to $202.6 million, driven by distribution gains and new customers, offsetting weaker wholesale and macroeconomic headwinds in restaurant and retail sectors.

• Diversification in the HRI market, expansion in Western Quebec, and new customer wins helped mitigate channel headwinds.

• Adjusted EBITDA for Q4 was $11.3 million (5.6% margin), down 3.1% year-over-year due to higher operating expenses.

• Net earnings from continuing operations were $0.5 million (1 cent/share), up from $0.4 million last year, aided by lower depreciation and non-operating costs.

• Cash flow from operations increased 18.6% to $10.6 million in Q4, supported by improved inventory turnover and supplier payment timing.

Financial highlights

• Q4 2024 sales reached $202.6 million, up 3.2% year-over-year; full-year sales were $657.1 million, down 0.3%.

• Distribution revenue rose 5.6%, while wholesale revenue declined 3.8% year-over-year in Q4.

• Adjusted EBITDA margin for Q4 was 5.6%, down from 5.9% last year.

• Net debt at year-end was $47.8 million, down from $61.5 million, with leverage ratio improving to 2.4x from 2.7x.

• Cash flow from operations for Q4 2024 was $10.6 million, up from $8.9 million in Q4 2023.

Outlook and guidance

• Acquisition of Alimplus and Tout-Prêt for $51.5 million, expected to close in Q2 2025, with a six-year supply agreement for Mayrand Depot stores representing ~$225 million in annual sales.

• The acquisition is expected to accelerate growth, be accretive to shareholders, and increase Quebec food service market share from 11% to 16%.

• 2025 is the final year of the five-year strategic plan, focusing on integration and maintaining manageable leverage.

• No significant changes expected in maintenance and capital expenses for 2025.

• Management remains confident in executing its business plan despite macroeconomic uncertainty and tariff threats.