Jamieson Wellness Inc. Reports Second Quarter 2022 Financial Results

 

  Company Increases Fiscal 2022 Guidance and Raises Second Quarter Dividend  

 

Jamieson Wellness Inc. ("Jamieson Wellness" or the "Company") (TSX: JWEL) today reported financial results for its second quarter ended June 30, 2022. All amounts are expressed in Canadian dollars. Certain metrics, including those expressed on an adjusted basis, are non-IFRS and other financial measures. See "Non-IFRS and Other Financial Measures" below.

 

  Highlights of Second Quarter 2022 versus Second Quarter 2021  

 
  • Successfully completed transaction to purchase Nutrawise Health and Beauty Corporation ("Nutrawise" or "youtheory") and the youtheory brand, accelerating the Company's expansion in the U.S.
  •  
  • Increased revenue to $112.0 million with strong Jamieson Brands revenue growth of 6.5%
  •  
  • Increased Adjusted EBITDA (1) by 9.5% to $24.4 million
  •  
  • Net earnings were $10.1 million and Adjusted net earnings (1) increased 11.4% to $13.4 million; and
  •  
  • Diluted earnings per share were $0.24, and Adjusted diluted earnings per share (2) increased 10.3% to $0.32.
  •  

"This is a remarkable time for the entire team at Jamieson Wellness, as we deliver on our strategic priorities and commitments in the face of a volatile geopolitical and economic environment," said Mike Pilato, President and CEO of Jamieson Wellness. "In the second quarter we realized strong branded revenue, expanded margins and earnings growth, while completing our acquisition of the youtheory brand. We continued our Jamieson brand's 100 th anniversary media campaign and celebrations, grew in China in spite of widespread COVID-19 related lockdowns, and made progress on our ESG activities by joining the UN Global Compact Initiative. The acquisition of Nutrawise adds the United States, the largest VMS market in the world, as a key strategic growth pillar. The transaction is immediately accretive to our fiscal 2022 results providing incremental revenue, Adjusted EBITDA and Adjusted Earnings per share. As we integrate these great businesses, we look forward to the long-term potential to accelerate growth, profitability, and the scale of Jamieson Wellness, globally."

 

  Second Quarter 2022 Results  

 

Revenue increased 1.3% to $112.0 million in the second quarter of 2022 compared with $110.6 million in the second quarter of 2021 driven by 6.5% growth in the Jamieson Brands segment, partially offset by a 13.8% decline in the Strategic Partners segment.

 

Revenue in the Jamieson Brands segment increased by 6.5% or $5.3 million to $87.7 million. The Company's domestic branded sales increased by 8.0% in the second quarter of 2022, reflecting continued strong consumer demand and point of purchase growth reflecting consumers' prioritization of their health and wellness. The Company's international revenue remained flat on a reported basis compared with the second quarter of 2021 reflecting the temporary shift in purchasing patterns in our Eastern European markets due to the geopolitical situation in Ukraine, offsetting continued growth in China, through cross border e-commerce, despite widespread COVID-19 related lockdowns in Shanghai and Beijing.

 

Revenue in the Strategic Partners segment decreased by 13.8%, or $3.9 million to $24.3 million in the second quarter of 2022 reflecting order timing while lapping against prior year's production planning which resulted in significant growth of 48.9%.

 

Gross profit increased by $2.4 million to $40.7 million in the second quarter of 2022 mainly driven by revenue growth and improved gross profit margin in the Jamieson Brands segment. Normalized gross profit margin (2) increased by 160 basis points to 36.4%, reflecting margin improvements in the Jamieson Brands segment and the mix impact of proportionally higher Branded sales, partially offset by lower margin in the Strategic Partners segment. Normalized gross profit margin in the Jamieson Brands segment increased by 120 basis points to 43.2% due to favourable mix and timing of trade investment offsetting elevated global supply chain costs. Gross profit margin (3) in Strategic Partners decreased by 200 basis points to 11.7% mainly due to production volume timing, and higher global supply chain and input costs, offset by favourable customer mix.

 

Selling, general and administrative ("SG&A") expenses increased by $3.8 million to $25.0 million in the second quarter of 2022 and include costs associated with the previously announced Nutrawise acquisition on June 1, 2022. Normalized SG&A expenses (1) increased $0.4 million to $20.1 million in the second quarter of 2022 due to additional resources in support of our strategic initiatives and timing of our marketing investments to promote our 100 year anniversary and international brand presence.

 

Earnings from operations decreased by $1.5 million, or 9.1%, to $14.6 million in the second quarter of 2022 and operating margin (3) decreased by 150 basis points to 13.0% due to factors affecting gross profit margin discussed above and higher SG&A expenses as a percentage of revenue mainly due to costs associated with the acquisition. Normalized earnings from operations (1) increased by $1.7 million, or 9.8% in the second quarter of 2022 and normalized operating margin (2) was 17.4% compared with 16.1% in the second quarter of 2021.

 

Adjusted EBITDA increased by 9.5% to $24.4 million in the second quarter of 2022 and adjusted EBITDA margin (2) was 21.8% compared with 20.2% in the second quarter of 2021.

 

Interest expense and other financing costs decreased by $0.1 million to $1.2 million due to lower average borrowings in the quarter.

 

Net earnings for the second quarter of 2022 was $10.1 million compared with $11.5 million in the second quarter of 2021. Adjusted net earnings, which excludes all non-operating expenses and foreign exchange, increased by $1.4 million, or 11.4%, to $13.4 million in the second quarter of 2022.

 

Adjusted net earnings excludes costs associated with foreign exchange gain/loss, acquisition related costs, IT system improvements, COVID-19 related costs, business integration, and other non-operating earnings or expenses net of related tax effects. A quantitative reconciliation of reported net earnings to EBITDA, Adjusted EBITDA, and non-IFRS normalized gross profit, normalized SG&A, normalized earnings from operations and Adjusted net earnings are included in the table accompanying this release under the heading "Non-IFRS and Other Financial Measures".

 

  Balance Sheet & Cash Flow  

 

The Company generated $13.3 million in cash from operations during the second quarter of 2022 compared with $5.1 million in the second quarter of 2021. Cash from operating activities before working capital considerations (1) of $16.8 million was $0.7 million higher due to increased earnings in the current quarter. Cash investments in working capital decreased by $7.6 million driven by timing of collections and payments offset by higher inventories to maintain continuity of supply. The Company's cash as at June 30, 2022 was $8.4 million compared with $6.8 million on December 31, 2021 and $4.6 million at the end of the second quarter of 2021. The Company ended the quarter with approximately $143.1 million in cash and available operating lines and net debt (1) of $131.9 million.

 
                                                                                                                                                                                                                               
   

  Three months ended  

 
 

 

 
 

 

 
 

 

 
 

 

 
   

  June 30  

 
 

 

 
 

 

 
 

 

 
 

 

 
  ($ in 000's, except as otherwise noted)    

  2022  

 
 

 

 
 

  2021  

 
 

 

 
 

  $ Change  

 
 

 

 
 

  % Change  

 
         
Cash, beginning of period   

  5,432  

 
 

 

 
  

  8,766  

 
 

 

 
  

  (3,334  

 
 

  )  

 
  

  (38.0  

 
 

  %)  

 
Cash flows from (used in):         
Operating activities   

13,315

 
 

 

 
  

5,079

 
 

 

 
  

8,236

 
 

 

 
  

162.2

 
 

%

 
Investing activities   

(4,573

 
 

)

 
  

(6,664

 
 

)

 
  

2,091

 
 

 

 
  

31.4

 
 

%

 
Financing activities   

(5,817

 
 

)

 
  

(2,545

 
 

)

 
  

(3,272

 
 

)

 
  

(128.6

 
 

%)

 
  Cash, end of period    

  8,357  

 
 

 

 
  

  4,636  

 
 

 

 
  

  3,721  

 
 

 

 
  

  80.3  

 
 

  %  

 
         
Cash flows from operating activities   

13,315

 
 

 

 
  

5,079

 
 

 

 
  

8,236

 
 

 

 
  

162.2

 
 

%

 
Net Change in non-cash working capital   

3,493

 
 

 

 
  

11,054

 
 

 

 
  

(7,561

 
 

)

 
  

(68.4

 
 

%)

 
  Cash from operating activities before working capital considerations    

  16,808  

 
 

 

 
  

  16,133  

 
 

 

 
  

  675  

 
 

 

 
  

  4.2  

 
 

  %  

 
         
         
  ($ in 000's, except as otherwise noted)        

  As at June 30,  

 

  2022  

 
  

  As at December 31,  

 

  2021  

 
         
  Long-term debt        

  140,294  

 
 

 

 
  

  149,125  

 
 

 

 
Cash       

(8,357

 
 

)

 
  

(6,775

 
 

)

 
  Net debt        

  131,937  

 
 

 

 
  

  142,350  

 
 

 

 
 

  Fiscal 2022 Outlook  

 

The Company is increasing its outlook for fiscal 2022 reflecting the acquisition of Nutrawise which was completed on July 19, 2022. The Company anticipates revenue in the range of $550.0 to $565.0 million, which represents annual growth of 5.0% to 9.0% in the base business plus revenue growth of approximately 16.0% from the acquisition. The Company estimates Adjusted EBITDA in the range of $120.0 to $125.0 million and Adjusted diluted earnings per share in the range of $1.52 to $1.60.

 

For additional details on the Company's fiscal 2022 outlook, including guidance for the third quarter of 2022, refer to the "Outlook" section in the management's discussion and analysis of financial condition and results of operations ("MD&A") for the three and six months ended June 30, 2022.

 

  Declaration of Second Quarter Dividend  

 

The board of directors of the Company authorized a 2.0 cent or a 13.33% increase in the quarterly dividend and declared a cash dividend for the second quarter of 2022 of $0.17 per common share, or approximately $7.1 million in the aggregate. The dividend will be paid on September 15, 2022 to all common shareholders of record at the close of business on August 31, 2022. The Company has designated this dividend as an "eligible dividend" for the purposes of the Income Tax Act (Canada).

 

  Consolidated Financial Statements and Management's Discussion and Analysis  

 

The Company's unaudited condensed consolidated interim financial statements and accompanying notes as at and for the three and six months ended June 30, 2022 and related MD&A are available under the Company's profile on SEDAR at www.sedar.com and on the Investor Relations section of the Company's website at https://investors.jamiesonwellness.com .

 

  Conference Call  

 

Management will host a conference call to discuss the Company's second quarter 2022 results at 5:00 p.m. ET today, August 4, 2022. The call can be accessed live over the telephone by dialing 1-800-458-4121 from Canada and the U.S. or 1-323-794-2093 from international locations. A replay will be available shortly after the call and can be accessed by dialing 1-844-512-2921 from Canada and the U.S. or 1-412-317-6671 from international locations. The passcode for the replay is 9396819 and it will be available until Thursday August 18, 2022.

 

Interested parties may listen to a simultaneous webcast of the conference call by logging on via the Investor Relations section of the Company's website at https://investors.jamiesonwellness.com or directly at https://viavid.webcasts.com/starthere.jsp?ei=1556477&tp_key=2fd89ed7e7 . A replay of the webcast will be available for approximately 30 days following the call.

 

  About Jamieson Wellness  

 

Jamieson Wellness is dedicated to improving the world's health and wellness with its portfolio of innovative natural health brands. Established in 1922, Jamieson is the Company's heritage brand and Canada's #1 consumer health brand. Jamieson Wellness also offers a variety of VMS products under its youtheory, Progressive, Smart Solutions, Iron Vegan and Precision brands. The Company is a participant of the United Nations Global Compact and adheres to its principles-based approach to responsible business. For more information please visit www.jamiesonwellness.com .

 

Jamieson Wellness' head office is located at 1 Adelaide Street East Suite 2200, Toronto, Ontario, Canada.

 

  Forward-Looking Information  

 

This press release may contain forward-looking information within the meaning of applicable securities legislation. Such information includes, but is not limited to, statements related to the Company's anticipated results and its outlook for its 2022 revenue, Adjusted EBITDA and Adjusted diluted earnings per share. Words such as "expect", "anticipate", "intend", "may", "will", "estimate" and variations of such words and similar expressions are intended to identify such forward-looking information. This information reflects the Company's current expectations regarding future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risk Factors" in the Company's Annual Information Form dated March 29, 2022 and under the "Risk Factors" section in the MD&A filed today, August 4, 2022. This information is based on the Company's reasonable assumptions and beliefs in light of the information currently available to it and the statements are made as of the date of this press release. The Company does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law or regulatory authority.

 

The Company cautions that the list of risk factors and uncertainties is not exhaustive and other factors could also adversely affect the Company's results. Readers are urged to consider the risks, uncertainties and assumptions associated with these statements carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. See "Forward-looking Information" and "Risk Factors" within the MD&A for a discussion of the uncertainties, risks and assumptions associated with these statements.

 

____________________
(1) This is a non-IFRS financial measure. See the " Non-IFRS and Other Financial Measures " section of this press release for more information on each non-IFRS financial measure.
(2) This is a non-IFRS ratio. See the " Non-IFRS and Other Financial Measures " section of this press release for more information on each non-IFRS ratio.
(3) This is a supplementary financial measure. See the " Non-IFRS and Other Financial Measures " section of this press release for more information on each supplementary financial measure.

 
                                                                                                                                                                                                                                                                                                                                                                                                                                     
 

  Jamieson Wellness Inc.  

 

Selected Consolidated Financial Information

 

In thousands of Canadian dollars, except share and per share amounts

 
       
         
   

  Three months ended  

 
 

 

 
 

  Six months ended  

 
   

  June 30  

 
 

 

 
 

  June 30  

 
   

  2022  

 
  

  2021  

 
  

  2022  

 
  

  2021  

 
         
  Revenue    

  111,990  

 
 

 

 
  

  110,556  

 
 

 

 
  

  215,665  

 
 

 

 
  

  208,826  

 
 

 

 
Cost of sales   

71,277

 
 

 

 
  

72,232

 
 

 

 
  

137,005

 
 

 

 
  

136,614

 
 

 

 
Gross profit   

40,713

 
 

 

 
  

38,324

 
 

 

 
  

78,660

 
 

 

 
  

72,212

 
 

 

 
         
  Gross profit margin    

  36.4  

 
 

  %  

 
  

  34.7  

 
 

  %  

 
  

  36.5  

 
 

  %  

 
  

  34.6  

 
 

  %  

 
         
Selling, general and administrative expenses   

24,996

 
 

 

 
  

21,224

 
 

 

 
  

46,616

 
 

 

 
  

41,990

 
 

 

 
Share-based compensation   

1,136

 
 

 

 
  

1,057

 
 

 

 
  

2,278

 
 

 

 
  

3,659

 
 

 

 
  Earnings from operations    

  14,581  

 
 

 

 
  

  16,043  

 
 

 

 
  

  29,766  

 
 

 

 
  

  26,563  

 
 

 

 
         
  Operating margin    

  13.0  

 
 

  %  

 
  

  14.5  

 
 

  %  

 
  

  13.8  

 
 

  %  

 
  

  12.7  

 
 

  %  

 
         
Foreign exchange loss/(gain)   

(413

 
 

)

 
  

117

 
 

 

 
  

50

 
 

 

 
  

133

 
 

 

 
Interest expense and other financing costs   

1,238

 
 

 

 
  

1,371

 
 

 

 
  

2,516

 
 

 

 
  

2,786

 
 

 

 
Earnings before income taxes   

13,756

 
 

 

 
  

14,555

 
 

 

 
  

27,200

 
 

 

 
  

23,644

 
 

 

 
Provision for income taxes   

3,662

 
 

 

 
  

3,083

 
 

 

 
  

7,365

 
 

 

 
  

6,036

 
 

 

 
  Net earnings    

  10,094  

 
 

 

 
  

  11,472  

 
 

 

 
  

  19,835  

 
 

 

 
  

  17,608  

 
 

 

 
  Adjusted net earnings    

  13,415  

 
 

 

 
  

  12,041  

 
 

 

 
  

  24,159  

 
 

 

 
  

  20,677  

 
 

 

 
         
  EBITDA    

  18,785  

 
 

 

 
  

  19,424  

 
 

 

 
  

  37,223  

 
 

 

 
  

  33,377  

 
 

 

 
  Adjusted EBITDA    

  24,439  

 
 

 

 
  

  22,327  

 
 

 

 
  

  45,384  

 
 

 

 
  

  40,869  

 
 

 

 
         
  Adjusted EBITDA margin    

  21.8  

 
 

  %  

 
  

  20.2  

 
 

  %  

 
  

  21.0  

 
 

  %  

 
  

  19.6  

 
 

  %  

 
         
  Weighted average number of shares          
Basic   

40,461,610

 
 

 

 
  

40,078,646

 
 

 

 
  

40,451,991

 
 

 

 
  

39,984,741

 
 

 

 
Diluted   

41,919,787

 
 

 

 
  

41,428,523

 
 

 

 
  

41,877,072

 
 

 

 
  

41,315,745

 
 

 

 
         
  Earnings per share attributable to common shareholders:          
Basic, earnings per share   

  0.25  

 
 

 

 
  

  0.29  

 
 

 

 
  

  0.49  

 
 

 

 
  

  0.44  

 
 

 

 
Diluted, earnings per share   

  0.24  

 
 

 

 
  

  0.28  

 
 

 

 
  

  0.47  

 
 

 

 
  

  0.43  

 
 

 

 
Adjusted diluted, earnings per share   

  0.32  

 
 

 

 
  

  0.29  

 
 

 

 
  

  0.58  

 
 

 

 
  

  0.50  

 
 

 

 
 
                                                                                                                                                                                               
 

  Jamieson Wellness Inc.  

 

Consolidated Statements of Financial Position

 

In thousands of Canadian dollars

 
     
   

  June 30,  

 

  2022  

 
 

 

 
 

  December 31,  

 

  2021  

 
  Assets      
  Current assets      
Cash   

8,357

 
  

6,775

 
Accounts receivable   

92,060

 
  

104,186

 
Inventories   

138,823

 
  

119,006

 
Derivatives   

5,901

 
  

2,149

 
Prepaid expenses and other current assets   

3,895

 
  

5,029

 
   

  249,036  

 
  

  237,145  

 
  Non-current assets      
Property, plant and equipment   

104,077

 
  

96,977

 
Goodwill   

122,975

 
  

122,975

 
Intangible assets   

190,719

 
  

192,676

 
Deferred income tax   

2,458

 
  

2,702

 
  Total assets    

  669,265  

 
  

  652,475  

 
     
  Liabilities      
  Current liabilities      
Accounts payable and accrued liabilities   

80,949

 
  

74,533

 
Income taxes payable   

1,393

 
  

2,896

 
Derivatives   

821

 
  

3,317

 
Current portion of long-term debt   

3,077

 
  

2,876

 
   

  86,240  

 
  

  83,622  

 
  Long-term liabilities      
Long-term debt   

140,294

 
  

149,125

 
Post-retirement benefits   

3,713

 
  

3,544

 
Deferred income tax   

56,958

 
  

53,291

 
Other long-term liabilities   

23,779

 
  

20,872

 
  Total liabilities    

  310,984  

 
  

  310,454  

 
     
  Shareholders' equity      
Share capital   

270,365

 
  

268,214

 
Contributed surplus   

16,599

 
  

14,786

 
Retained earnings   

66,699

 
  

58,998

 
Accumulated other comprehensive income   

4,618

 
  

23

 
  Total shareholders' equity    

  358,281  

 
  

  342,021  

 
  Total liabilities and shareholders' equity    

  669,265  

 
  

  652,475  

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 

  Jamieson Wellness Inc.  

 

Segment Information

 

In thousands of Canadian dollars, except as otherwise noted

 
         
  Jamieson Brands          
         
   

  Three months ended  

 

  June 30  

 
 

 

 
 

 

 
 

 

 
 

 

 
   

  2022  

 
 

 

 
 

  2021  

 
 

 

 
 

  $ Change  

 
 

 

 
 

  % Change  

 
         
Revenue   

87,715

 
 

 

 
  

82,391

 
 

 

 
  

5,324

 
 

 

 
  

6.5

 
 

%

 
    

 

 
      
Gross profit   

37,875

 
 

 

 
  

34,467

 
 

 

 
  

3,408

 
 

 

 
  

9.9

 
 

%

 
Gross profit margin   

43.2

 
 

%

 
  

41.8

 
 

%

 
  

-

 
 

 

 
  

1.4

 
 

%

 
    

 

 
   

 

 
    
Normalized gross profit   

37,875

 
 

 

 
  

34,604

 
 

 

 
  

3,271

 
 

 

 
  

9.5

 
 

%

 
Normalized gross profit margin   

43.2

 
 

%

 
  

42.0

 
 

%

 
  

-

 
 

 

 
  

1.2

 
 

%

 
    

 

 
   

 

 
    
Selling, general and administrative expenses   

23,448

 
 

 

 
  

19,226

 
 

 

 
  

4,222

 
 

 

 
  

22.0

 
 

%

 
Normalized selling, general and administrative expenses   

18,517

 
 

 

 
  

17,956

 
 

 

 
  

561

 
 

 

 
  

3.1

 
 

%

 
    

 

 
   

 

 
    
Share-based compensation   

1,136

 
 

 

 
  

1,057

 
 

 

 
  

79

 
 

 

 
  

7.5

 
 

%

 
    

 

 
   

 

 
    
  Earnings from operations    

  13,291  

 
 

 

 
  

  14,184  

 
 

 

 
  

  (893  

 
 

  )  

 
  

  (6.3  

 
 

  %)  

 
  Operating margin    

  15.2  

 
 

  %  

 
  

  17.2  

 
 

  %  

 
  

  -  

 
 

 

 
  

  (2.0  

 
 

  %)  

 
    

 

 
   

 

 
    
  Normalized earnings from operations    

  18,222  

 
 

 

 
  

  15,591  

 
 

 

 
  

  2,631  

 
 

 

 
  

  16.9  

 
 

  %  

 
  Normalized operating margin    

  20.8  

 
 

  %  

 
  

  18.9  

 
 

  %  

 
  

  -  

 
 

 

 
  

  1.9  

 
 

  %  

 
    

 

 
   

 

 
    
  Adjusted EBITDA    

  22,557  

 
 

 

 
  

  19,645  

 
 

 

 
  

  2,912  

 
 

 

 
  

  14.8  

 
 

  %  

 
  Adjusted EBITDA margin    

  25.7  

 
 

  %  

 
  

  23.8  

 
 

  %  

 
  

  -  

 
 

 

 
  

  1.9  

 
 

  %  

 
         
         
  Strategic Partners          
         
   

  Three months ended  

 

  June 30  

 
 

 

 
 

 

 
 

 

 
 

 

 
   

  2022  

 
 

 

 
 

  2021  

 
 

 

 
 

  $ Change  

 
 

 

 
 

  % Change  

 
         
Revenue   

24,275

 
 

 

 
  

28,165

 
 

 

 
  

(3,890

 
 

)

 
  

(13.8

 
 

%)

 
   

-

 
 

 

 
  

-

 
 

 

 
    
Gross profit   

2,838

 
 

 

 
  

3,857

 
 

 

 
  

(1,019

 
 

)

 
  

(26.4

 
 

%)

 
Gross profit margin   

11.7

 
 

%

 
  

13.7

 
 

%

 
  

-

 
 

 

 
  

(2.0

 
 

%)

 
    

 

 
   

 

 
    
Selling, general and administrative expenses   

1,548

 
 

 

 
  

1,998

 
 

 

 
  

(450

 
 

)

 
  

(22.5

 
 

%)

 
Normalized selling, general and administrative expenses   

1,548

 
 

 

 
  

1,676

 
 

 

 
  

(128

 
 

)

 
  

(7.6

 
 

%)

 
    

 

 
   

 

 
    
  Earnings from operations    

  1,290  

 
 

 

 
  

  1,859  

 
 

 

 
  

  (569  

 
 

  )  

 
  

  (30.6  

 
 

  %)  

 
  Operating margin    

  5.3  

 
 

  %  

 
  

  6.6  

 
 

  %  

 
  

  -  

 
 

 

 
  

  (1.3  

 
 

  %)  

 
    

 

 
   

 

 
    
  Normalized earnings from operations    

  1,290  

 
 

 

 
  

  2,181  

 
 

 

 
  

  (891  

 
 

  )  

 
  

  (40.9  

 
 

  %)  

 
  Normalized operating margin    

  5.3  

 
 

  %  

 
  

  7.7  

 
 

  %  

 
  

  -  

 
 

 

 
  

  (2.4  

 
 

  %)  

 
         
  Adjusted EBITDA    

  1,882  

 
 

 

 
  

  2,682  

 
 

 

 
  

  (800  

 
 

  )  

 
  

  (29.8  

 
 

  %)  

 
  Adjusted EBITDA margin    

  7.8  

 
 

  %  

 
  

  9.5  

 
 

  %  

 
  

  -  

 
 

 

 
  

  (1.7  

 
 

  %)  

 
         
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
  Jamieson Brands          
         
   

  Six months ended  

 

  June 30  

 
    
   

  2022  

 
  

  2021  

 
   $ Change     % Change  
         
Revenue   

170,903

 
 

 

 
  

158,286

 
 

 

 
  

12,617

 
 

 

 
  

8.0

 
 

%

 
Gross profit   

73,492

 
 

 

 
  

65,524

 
 

 

 
  

7,968

 
 

 

 
  

12.2

 
 

%

 
Gross profit margin   

43.0

 
 

%

 
  

41.4

 
 

%

 
  

-

 
 

 

 
  

1.6

 
 

%

 
    

 

 
   

 

 
    
Normalized gross profit   

73,492

 
 

 

 
  

66,151

 
 

 

 
  

7,341

 
 

 

 
  

11.1

 
 

%

 
Normalized gross profit margin   

43.0

 
 

%

 
  

41.8

 
 

%

 
  

-

 
 

 

 
  

1.2

 
 

%

 
    

 

 
   

 

 
    
Selling, general and administrative expenses   

43,499

 
 

 

 
  

38,506

 
 

 

 
  

4,993

 
 

 

 
  

13.0

 
 

%

 
Normalized selling, general and administrative expenses   

37,714

 
 

 

 
  

35,638

 
 

 

 
  

2,076

 
 

 

 
  

5.8

 
 

%

 
    

 

 
   

 

 
    
Share-based compensation   

2,278

 
 

 

 
  

3,659

 
 

 

 
  

(1,381

 
 

)

 
  

(37.7

 
 

%)

 
    

 

 
   

 

 
    
  Earnings from operations    

  27,715  

 
 

 

 
  

  23,359  

 
 

 

 
  

  4,356  

 
 

 

 
  

  18.6  

 
 

  %  

 
  Operating margin    

  16.2  

 
 

  %  

 
  

  14.8  

 
 

  %  

 
  

  -  

 
 

 

 
  

  1.4  

 
 

  %  

 
    

 

 
   

 

 
    
  Normalized earnings from operations    

  33,500  

 
 

 

 
  

  26,854  

 
 

 

 
  

  6,646  

 
 

 

 
  

  24.7  

 
 

  %  

 
  Normalized operating margin    

  19.6  

 
 

  %  

 
  

  17.0  

 
 

  %  

 
  

  -  

 
 

 

 
  

  2.6  

 
 

  %  

 
    

 

 
   

 

 
    
  Adjusted EBITDA    

  42,097  

 
 

 

 
  

  36,470  

 
 

 

 
  

  5,627  

 
 

 

 
  

  15.4  

 
 

  %  

 
  Adjusted EBITDA margin    

  24.6  

 
 

  %  

 
  

  23.0  

 
 

  %  

 
  

  -  

 
 

 

 
  

  1.6  

 
 

  %  

 
         
         
  Strategic Partners          
         
   

  Six months ended  

 

  June 30  

 
    
   

  2022  

 
  

  2021  

 
   $ Change     % Change  
         
Revenue   

44,762

 
 

 

 
  

50,540

 
 

 

 
  

(5,778

 
 

)

 
  

(11.4

 
 

%)

 
    

 

 
   

 

 
    
Gross profit   

5,168

 
 

 

 
  

6,688

 
 

 

 
  

(1,520

 
 

)

 
  

(22.7

 
 

%)

 
Gross profit margin   

11.5

 
 

%

 
  

13.2

 
 

%

 
  

-

 
 

 

 
  

(1.7

 
 

%)

 
    

 

 
   

 

 
    
Selling, general and administrative expenses   

3,117

 
 

 

 
  

3,484

 
 

 

 
  

(367

 
 

)

 
  

(10.5

 
 

%)

 
Normalized selling, general and administrative expenses   

3,069

 
 

 

 
  

3,279

 
 

 

 
  

(210

 
 

)

 
  

(6.4

 
 

%)

 
    

 

 
   

 

 
    
  Earnings from operations    

  2,051  

 
 

 

 
  

  3,204  

 
 

 

 
  

  (1,153  

 
 

  )  

 
  

  (36.0  

 
 

  %)  

 
  Operating margin    

  4.6  

 
 

  %  

 
  

  6.3  

 
 

  %  

 
  

  -  

 
 

 

 
  

  (1.7  

 
 

  %)  

 
    

 

 
   

 

 
    
  Normalized earnings from operations    

  2,099  

 
 

 

 
  

  3,409  

 
 

 

 
  

  (1,310  

 
 

  )  

 
  

  (38.4  

 
 

  %)  

 
  Normalized operating margin    

  4.7  

 
 

  %  

 
  

  6.7  

 
 

  %  

 
  

  -  

 
 

 

 
  

  (2.0  

 
 

  %)  

 
      

 

 
    
  Adjusted EBITDA    

  3,287  

 
 

 

 
  

  4,399  

 
 

 

 
  

  (1,112  

 
 

  )  

 
  

  (25.3  

 
 

  %)  

 
  Adjusted EBITDA margin    

  7.3  

 
 

  %  

 
  

  8.7  

 
 

  %  

 
  

  -  

 
 

 

 
  

  (1.4  

 
 

  %)  

 
         
 

  Non-IFRS and Other Financial Measures  

 

This press release makes reference to certain financial measures, including non-IFRS financial measures that are historical, non-IFRS measures that are forward-looking, non-GAAP ratios and supplementary financial measures. Management uses these financial measures for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of ongoing operations and in analyzing the Company's business performance and trends. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. The Company uses the following non‑IFRS financial measures: "EBITDA", "Adjusted EBITDA" and "Adjusted net earnings", the most directly comparable financial measure for each that is disclosed in its financial statements being net earnings, "normalized gross profit", "normalized SG&A", "normalized earnings from operations", "cash from operating activities before working capital considerations" and "net debt", the most directly comparable financial measures for each that is disclosed in its financial statements being gross profit, SG&A, earnings from operations, cash flows from operating activities, and long-term debt, respectively, the following non-IFRS ratios: "Adjusted EBITDA margin", "Adjusted diluted earnings per share", "normalized gross profit margin", "normalized operating margin", and the following supplementary financial measures: "gross profit margin" and "operating margin" to provide supplemental measures of the Company's operating performance and thus highlight trends in the Company's core business that may not otherwise be apparent when relying solely on IFRS financial measures. Management also uses non‑IFRS and supplementary financial measures in order to prepare annual operating budgets and to determine components of management compensation. For an explanation of the composition of each such measure and the usefulness and additional uses of each by management, see the " How we Assess the Performance of our Business " section of the MD&A, which is incorporated by reference. See below for a quantitative reconciliation of each non-IFRS financial measure to its most directly comparable financial measure disclosed in the Company's financial statements to which the measure relates.

 

The following tables provide a quantitative reconciliation of net earnings to EBITDA, Adjusted EBITDA, and Adjusted net earnings, as well as gross profit to normalized gross profit, SG&A to normalized SG&A, earnings from operations to normalized earnings from operations, each of which are non-IFRS financial measures (see the " Non-IFRS and Other Financial Measures " of this press release for further information on each non-IFRS financial measure) for the three and six months ended June 30, 2022 and June 30, 2021.

 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
 

  Reconciliation of Non-IFRS Financial Measures  

 

In thousands of Canadian dollars

 
     
   

  Three months ended  

 
  

  Six months ended  

 
   

  June 30  

 
  

  June 30  

 
   

  2022  

 
  

  2021  

 
  

  2022  

 
  

  2021  

 
         
  Net earnings    

  10,094  

 
 

 

 
  

  11,472  

 
 

 

 
  

  19,835  

 
 

 

 
  

  17,608  

 
 

 

 
  Add:          
Provision for income taxes   

3,662

 
 

 

 
  

3,083

 
 

 

 
  

7,365

 
 

 

 
  

6,036

 
 

 

 
Interest expense and other financing costs   

1,238

 
 

 

 
  

1,371

 
 

 

 
  

2,516

 
 

 

 
  

2,786

 
 

 

 
Depreciation of property, plant, and equipment   

2,722

 
 

 

 
  

2,438

 
 

 

 
  

5,380

 
 

 

 
  

4,834

 
 

 

 
Amortization of intangible assets   

1,069

 
 

 

 
  

1,060

 
 

 

 
  

2,127

 
 

 

 
  

2,113

 
 

 

 
         
  Earnings before interest, taxes, depreciation, and amortization (EBITDA)    

  18,785  

 
 

 

 
  

  19,424  

 
 

 

 
  

  37,223  

 
 

 

 
  

  33,377  

 
 

 

 
  Add EBITDA adjustments:          
Share-based compensation (1)   

1,136

 
 

 

 
  

1,057

 
 

 

 
  

2,278

 
 

 

 
  

3,659

 
 

 

 
Foreign exchange loss/(gain)   

(413

 
 

)

 
  

117

 
 

 

 
  

50

 
 

 

 
  

133

 
 

 

 
Acquisition related cost (2)   

3,484

 
 

 

 
  

-

 
 

 

 
  

3,484

 
 

 

 
  

-

 
 

 

 
IT system implementation (3)   

1,436

 
 

 

 
  

-

 
 

 

 
  

2,175

 
 

 

 
  

-

 
 

 

 
COVID-19 related costs (4)   

11

 
 

 

 
  

1,480

 
 

 

 
  

174

 
 

 

 
  

2,178

 
 

 

 
Business integration (5)   

-

 
 

 

 
  

184

 
 

 

 
  

-

 
 

 

 
  

1,701

 
 

 

 
Other   

-

 
 

 

 
  

65

 
 

 

 
  

-

 
 

 

 
  

(179

 
 

)

 
  Adjusted EBITDA    

  24,439  

 
 

 

 
  

  22,327  

 
 

 

 
  

  45,384  

 
 

 

 
  

  40,869  

 
 

 

 
Provision for income taxes   

(3,662

 
 

)

 
  

(3,083

 
 

)

 
  

(7,365

 
 

)

 
  

(6,036

 
 

)

 
Interest expense and other financing costs   

(1,238

 
 

)

 
  

(1,371

 
 

)

 
  

(2,516

 
 

)

 
  

(2,786

 
 

)

 
Depreciation of property, plant, and equipment   

(2,722

 
 

)

 
  

(2,438

 
 

)

 
  

(5,380

 
 

)

 
  

(4,834

 
 

)

 
Amortization of intangible assets   

(1,069

 
 

)

 
  

(1,060

 
 

)

 
  

(2,127

 
 

)

 
  

(2,113

 
 

)

 
Share-based compensation (6)   

(1,136

 
 

)

 
  

(1,845

 
 

)

 
  

(2,278

 
 

)

 
  

(3,407

 
 

)

 
Tax effect of normalization adjustments   

(1,197

 
 

)

 
  

(489

 
 

)

 
  

(1,559

 
 

)

 
  

(1,016

 
 

)

 
  Adjusted net earnings    

  13,415  

 
 

 

 
  

  12,041  

 
 

 

 
  

  24,159  

 
 

 

 
  

  20,677  

 
 

 

 
         
         
   

  Three months ended  

 
  

  Six months ended  

 
   

  June 30  

 
  

  June 30  

 
   

  2022  

 
  

  2021  

 
  

  2022  

 
  

  2021  

 
         
  Gross profit    

40,713

 
 

 

 
  

38,324

 
 

 

 
  

  78,660  

 
 

 

 
  

  72,212  

 
 

 

 
Business integration (5)   

-

 
 

 

 
  

137

 
 

 

 
  

-

 
 

 

 
  

627

 
 

 

 
  Normalized gross profit    

  40,713  

 
 

 

 
  

  38,461  

 
 

 

 
  

  78,660  

 
 

 

 
  

  72,839  

 
 

 

 
  Normalized gross profit margin    

  36.4  

 
 

  %  

 
  

  34.8  

 
 

  %  

 
  

  36.5  

 
 

  %  

 
  

  34.9  

 
 

  %  

 
         
  Selling, general and administrative expenses    

24,996

 
 

 

 
  

21,224

 
 

 

 
  

  46,616  

 
 

 

 
  

  41,990  

 
 

 

 
Acquisition related cost (2)   

(3,484

 
 

)

 
  

-

 
 

 

 
  

(3,484

 
 

)

 
  

-

 
 

 

 
IT system implementation (3)   

(1,436

 
 

)

 
  

-

 
 

 

 
  

(2,175

 
 

)

 
  

-

 
 

 

 
COVID-19 related costs (4)   

(11

 
 

)

 
  

(1,480

 
 

)

 
  

(174

 
 

)

 
  

(2,178

 
 

)

 
Business integration (5)   

-

 
 

 

 
  

(47

 
 

)

 
  

-

 
 

 

 
  

(1,074

 
 

)

 
Other   

-

 
 

 

 
  

(65

 
 

)

 
  

-

 
 

 

 
  

179

 
 

 

 
  Normalized selling, general and administrative expenses    

  20,065  

 
 

 

 
  

  19,632  

 
 

 

 
  

  40,783  

 
 

 

 
  

  38,917  

 
 

 

 
         
  Earnings from operations    

  14,581  

 
 

 

 
  

  16,043  

 
 

 

 
  

  29,766  

 
 

 

 
  

  26,563  

 
 

 

 
Acquisition related cost (2)   

3,484

 
 

 

 
  

-

 
 

 

 
  

3,484

 
 

 

 
  

-

 
 

 

 
IT system implementation (3)   

1,436

 
 

 

 
  

-

 
 

 

 
  

2,175

 
 

 

 
  

-

 
 

 

 
COVID-19 related costs (4)   

11

 
 

 

 
  

1,480

 
 

 

 
  

174

 
 

 

 
  

2,178

 
 

 

 
Business integration (5)   

-

 
 

 

 
  

184

 
 

 

 
  

-

 
 

 

 
  

1,701

 
 

 

 
Other   

-

 
 

 

 
  

65

 
 

 

 
  

-

 
 

 

 
  

(179

 
 

)

 
  Normalized earnings from operations    

  19,512  

 
 

 

 
  

  17,772  

 
 

 

 
  

  35,599  

 
 

 

 
  

  30,263  

 
 

 

 
  Normalized operating margin    

  17.4  

 
 

  %  

 
  

  16.1  

 
 

  %  

 
  

  16.5  

 
 

  %  

 
  

  14.5  

 
 

  %  

 
 
                  
 

(1)

 
  

Pertains to the expenses relating to our long-term incentive plan (the "LTIP"), along with associated payroll taxes.

 
 

(2)

 
  

Expenses for legal, due diligence, regulatory, tax, and fairness opinions relating to the Nutrawise acquisition.

 
 

(3)

 
  

Relates to system implementation costs to advance our supply chain planning infrastructure. Unlike other system improvement projects with costs capitalized, due to its cloud-based nature, these system implementation costs are expensed accordingly.

 
 

(4)

 
 

 

 
 

Costs related to COVID-19 which do not reflect the ongoing costs of operation.

 
 

(5)

 
  

Prior year expenses mainly pertained to start-up costs to complete our transition to a third-party logistics provider to make room for capacity expansion at our existing operations.

 
 

(6)

 
  

Costs pertaining to our LTIP, excluding certain one-time grants to certain employees. Prior year expenses included the acceleration of share-based compensation expense in relation to our CEO transition, net of tax benefits realized on the vesting of certain share-based awards.

 
 

 

 

  

  

  Investor and Media Contact Information:
Jamieson Wellness
Ruth Winker
416-705-5437
rwinker@jamiesonlabs.com  

 

News Provided by Business Wire via QuoteMedia

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