Diamond Estates Wines & Spirits Reports Q1 2022 Financial Results and Announces Stock Option Grants
Newsfile Corp - 49 minutes ago
Niagara-on-the-Lake, Ontario--(Newsfile Corp. - August 26, 2021) - Diamond Estates Wines & Spirits Inc. (TSXV: DWS) ("Diamond Estates" or "the Company") today announced its financial results for the three-month period ending June 30, 2021 ("Q1 2022").
Q1 2022 Summary:
- Revenue for Q1 2022 was $7.4 million, an increase of $1.5 million from $5.9 million in Q1 2021. Winery revenue for Q1 2022 was $3.3 million, an increase of 25.4% or $0.7 million from $2.6 million in Q1 2021, specifically related to increased operations of most private retail and on-premise accounts nationally as a result of partial removal of government-imposed restrictions from COVID-19. Agency revenue for Q1 2022 was $4.2 million, a increase of 27.0% or $0.9 million from $3.3 million in Q1 2021, due to continued strength in Western Canada and Ontario of represented brands;
- Gross margin for Q1 2022 was $3.1 million, an increase of $0.4 million from $2.7 million in Q1 2021, while gross margin as a percentage of revenue was 41.9% for Q1 2022 compared to 45.6% in Q1 2021. Overall, there has continued to be a shift in the sales mix to higher volume, lower priced and lower margin brands as consumers curb spending during the pandemic and look to less costly brand alternatives;
- EBITDA was $0.4 million in Q1 2022, consistent with $0.4 million in Q1 2021, as the increase in gross margin was offset by an increase in employee compensation of $0.4 million; and
- Net loss was $0.4 million, compared to a net loss of $0.4 million in Q1 2021.
The Company experienced strong sales in both the Winery and Agency Business. Throughout the first quarter the Company's sales continued to be impacted in the hospitality, contracts, and licensee channels due to government-mandated closures and restricted international and domestic travel. While some of these restrictions were lifted during Q1 2022, the Company expects sales to continue to be impacted by COVID-19 measures.
Gross margin in Q1 2022 declined due to revenue declines in high margin channels, more specifically, retail hospitality, and licensee channels. However, gross margins increased overall, due of the increase in sales experienced from the relief of COVID-19 measures. As the pandemic eases, gross margins should strengthen over the long term as the Company's businesses return to more normal operations.