View All News Voir toutes les nouvelles

Jamieson Wellness Inc. Reports Fourth Quarter and Full Year 2017 Financial Results and Establishes 2018 Guidance

February 22, 2018

TORONTO--(BUSINESS WIRE)-- Jamieson Wellness Inc. (“Jamieson Wellness” or the “Company”) (TSX: JWEL) today reported financial results for its fourth quarter and twelve months ended December 31, 2017. All amounts are expressed in Canadian dollars. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures. See “Non-IFRS Financial Measures” below.

Highlights of Fourth Quarter 2017 Results versus Fourth Quarter 2016 Results

  • Revenue increased 28.3% to $84.3 million;
  • Adjusted EBITDA increased 28.0% to $18.8 million;
  • Net Income was $3.7 million and Adjusted Net Income increased 91.1% to $9.7 million;
  • Earnings per diluted share were $0.09 and Adjusted earnings per diluted share were $0.25.

Highlights of Full Year 2017 Results versus Full Year 2016 Results

  • Revenue increased 21.1% to $300.6 million;
  • Adjusted EBITDA increased 31.4% to $61.5 million;
  • Net Loss was $23.8 million and Adjusted Net Income increased 152.8% to $27.6 million;
  • Pro forma* net loss per share was $0.63 and pro forma* adjusted earnings per diluted share were $0.70.

* Pro forma fiscal 2017 earnings per share calculations reflect the basic and diluted shares outstanding following completion of the Company’s initial public offering in July 2017.

“Fiscal 2017 was a year of significant accomplishments as we strengthened the Jamieson Wellness platform with two strategic acquisitions, completed a successful initial public offering and generated strong growth achieving our revenue and profit targets,” said Mark Hornick, President and Chief Executive Officer of Jamieson Wellness. “We concluded the year with strong fourth quarter results, including 11.1% organic growth led by Jamieson Canada and growth with strategic partners. As we enter 2018, we see incremental international growth opportunities and will continue to deliver market leading innovation to capitalize upon the growing global nutrition market.”

Fourth Quarter 2017 Results

Revenue increased 28.3% to $84.3 million in the fourth quarter of 2017 from $65.7 million in the fourth quarter of 2016 and was driven by an 18.8% increase in Jamieson Brands revenue and a 78.7% increase in Strategic Partners revenue. The increase in the Jamieson Brands revenue was primarily driven by the acquisition of Body Plus and organic growth of Jamieson Brands’ domestic volumes. The increase in Strategic Partners was primarily driven by 55.2% growth in the legacy business driven by expanding business with existing customers and additional volumes from strong consumer demand, along with the incremental revenue associated with the acquisition of Sonoma.

Gross profit increased 30.3% to $30.9 million in the fourth quarter of 2017 from $23.7 million in the fourth quarter of 2016 and gross profit margin increased 50 basis points to 36.6% from 36.1% in the same respective period. The increase in the gross profit margin was primarily driven by sales mix, manufacturing efficiencies and includes higher relative margins from Body Plus and Sonoma.

Selling, general and administrative expenses (“SG&A”) increased 29.5% to $14.3 million in the fourth quarter of 2017 from $11.0 million in the fourth quarter of 2016. As a percentage of revenue, SG&A increased 10 basis points to 16.9% from 16.8% in the prior year period. The increase as a percentage of revenue reflected the inclusion of $0.5 million of public company costs and the higher SG&A as a percentage of revenue associated with the acquired businesses.

Operating income increased 30.3% to $14.9 million in the fourth quarter of 2017 from $11.5 million in the fourth quarter of 2016 and operating margin increased 20 basis points to 17.7% from 17.5% in the same respective periods.

Interest expense and other financing costs were $2.1 million in the fourth quarter of 2017 compared to $5.7 million in the fourth quarter of 2016. The change was driven by lower borrowings including discharge of the note payable to Jamieson Finco LP in pre-IPO reorganization and lower interest rates on the Company’s new credit facility entered into in January 2017.

Net income for the fourth quarter of 2017 was $3.7 million compared to net loss of $18.7 million in the fourth quarter of 2016. Adjusted Net Income, which excludes all non-operating expenses, increased 91.1% to $9.7 million in the fourth quarter of 2017 from $5.1 million in the fourth quarter of 2016.

Adjusted net income for the fourth quarter of 2017 excludes costs associated with public offerings, acquisitions, restructuring activities, foreign exchange losses and related tax effects. Adjusted net income for the fourth quarter of 2016 excludes costs associated with preferred share accretion, acquisitions, restructuring activities, foreign exchange gains and related tax effects. A detailed reconciliation of reported net income to non-IFRS adjusted net income is included in the tables accompanying this release under the heading Non-IFRS measures.

Adjusted EBITDA increased 28.0% to $18.8 million in the fourth quarter of 2017 from $14.7 million in the fourth quarter of 2016 and Adjusted EBITDA as a percentage of revenue was consistent to the prior year at 22.4%.

Balance Sheet & Cash Flow

The Company generated $17.6 million of cash from operations during the fourth quarter of compared to $12.6 million during the fourth quarter of 2016. The Company’s cash at December 31, 2017 was $4.8 million compared to $15.9 million on December 31, 2016. On November 16, 2017, the Company declared a quarterly dividend of $0.08 per common share to holders of record as of December 1, 2017 and paid such dividend on December 15, 2017. The dividend payment was approximately $3.0 million in the aggregate.

    Three months ended        
December 31
($ in 000's) 2017     2016

$ Change

% Change
 
Cash, beginning of period 1,196 9,822   (8,626 ) (87.8 %)
Cash flows from (used in):
Operating activities 17,552 12,643 4,909 38.8 %
Investing activities (2,414 ) (1,358 ) (1,056 ) (77.8 %)
Financing activities (11,501 ) (5,226 )   (6,275 ) (120.1 %)
Cash, end of period 4,833   15,881     (11,048 ) (69.6 %)
 

Outlook

The Company is establishing its initial outlook for fiscal 2018 and anticipates generating net revenue in a range of $325.0 to $335.0 million, Adjusted EBITDA in a range of $67.0 to $69.0 million and adjusted diluted earnings per share in a range of $0.83 to $0.87. This outlook is based, in part, on a forecasted CAD/USD exchange rate of $1.25, expected Bank of Canada interest rate increases and a fully diluted share count of approximately 39.8 million shares.

Consolidated Financial Statements and Management’s Discussion and Analysis

The Company’s audited consolidated annual financial statements and accompanying notes as at and for the three and twelve months ended December 31, 2017 and related management’s discussion and analysis of financial condition and results of operations (“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 fourth quarter and full year 2017 results at 5:00 p.m. ET on February 22, 2018. The call can be accessed live over the telephone by dialing 1-877-425-9470 from Canada and the U.S. or 1-201-389-0878 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 13675899 and it will be available until Thursday, March 8, 2018.

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 http://public.viavid.com/index.php?id=128147. 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 Vitamins is the Company’s heritage brand and Canada’s #1 consumer health brand. Jamieson Wellness manufactures and markets sports nutrition products and specialty supplements under its Progressive, Precision and Iron Vegan brands. The Company also markets products by Lorna Vanderhaeghe Health Solutions (LVHS), the #1 women’s natural health focused brand in Canada. For more information please visit jamiesonwellness.com.

Jamieson Wellness’ head office is located at 2 St. Clair Avenue West, 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 growth opportunities and its outlook for its 2018 revenue and Adjusted EBITDA. Words such as “expect,” “anticipate,” “intend,” “attempt,” “may,” “plan,” “will”, “can”, “believe,” “seek,” “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 final prospectus (“Prospectus”) dated June 29, 2017 in respect of its initial public offering, as modified by the disclosure under the “Risk Factors” section in the Company’s MD&A filed February 22, 2018. 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.

We caution 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”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Outlook” in the Prospectus and the Company’s MD&A for a discussion of the uncertainties, risks and assumptions associated with these statements.

 

Jamieson Wellness Inc.

Unaudited Condensed Consolidated Interim Statements of Operations

In thousands of Canadian dollars, except per share data

   
Three months ended For the year ended
December 31 December 31
2017   2016 2017   2016
 
Revenue 84,318 65,695 300,619 248,331
Cost of sales 53,421   41,991   195,770   167,519  
Gross profit 30,897 23,704 104,849 80,812
 
Gross profit margin 36.6 % 36.1 % 34.9 % 32.5 %
 
Selling, general and administrative expenses 14,252 11,007 53,589 44,837
Share-based compensation 1,712   1,233   6,325   4,934  
Earnings from operations 14,933 11,464 44,935 31,041
- - - -
Operating margin 17.7 % 17.5 % 14.9 % 12.5 %
 
Foreign exchange loss (gain) 116 (154 ) 331 (192 )
Termination benefits and related costs 1,633 234 4,132 1,420
Public offering costs 1,200 - 10,720 -
Acquisition costs - 789 2,444 789
Other expenses (income) 2,981 (2,906 ) 9,410 (2,876 )
Preferred share accretion - 24,123 28,796 30,434
Interest expense and other financing costs 2,140   5,686   4,733   22,926  
Income (loss) before income taxes 6,863 (16,308 ) (15,631 ) (21,460 )
Provision for income taxes 3,130   2,414   8,156   3,706  
 
Net income (loss) 3,733   (18,722 ) (23,787 ) (25,166 )
Adjusted net income 9,749   5,101   27,582   10,910  
 
EBITDA 11,194   15,409   26,400   39,446  
Adjusted EBITDA 18,848   14,727   61,477   46,794  
 
Adjusted EBITDA margin 22.4 % 22.4 % 20.5 % 18.8 %
 
Net income (loss) 3,733 (18,722 ) (23,787 ) (25,166 )
Preferred share dividend -   -   (9,605 ) -  
Basic, net income (loss) attributable to common shareholders: 3,733 (18,722 ) (33,392 ) (25,166 )
 
Preferred share accretion -   -   -   -  
Diluted, net income (loss) attributable to common shareholders: 3,733   (18,722 ) (33,392 ) (25,166 )
 
Weighted average number of shares
Basic 37,729,359 520,253 18,669,758 520,253
Diluted 39,639,122 520,253 18,669,758 520,253
Adjusted Diluted 39,639,122 39,639,122 39,639,122 39,639,122
 
Earnings per share attributable to common shareholders:
Basic, earnings (loss) per share 0.10 (35.99 ) (1.79 ) (48.37 )
Diluted, earnings (loss) per share 0.09 (35.99 ) (1.79 ) (48.37 )
Adjusted Diluted, earnings (loss) per share 0.25 0.13 0.70 0.28
 
 
Jamieson Wellness Inc.

Unaudited Condensed Consolidated Interim Statement of Financial Position

In thousands of Canadian dollars

   
2017 2016
Assets
Current assets
Cash 4,833 15,881
Accounts receivable 71,996 52,888
Inventories 59,080 36,417
Prepaid expenses and other current assets 1,507   1,787  
137,416 106,973
Non-current assets
Property, plant and equipment 45,173 43,901
Goodwill 122,975 94,653
Intangible assets 204,264 157,888
Deferred income tax 2,727   1,764  
Total Assets 512,555   405,179  
 
Liabilities
Current liabilities
Redeemable preferred shares - 197,901
Accounts payable and accrued liabilities 66,621 51,077
Income taxes payable 4,267 2,688
Derivatives 1,081 92
Current portion of long-term debt 9,750   -  
81,719 251,758
Long-term liabilities
Long-term debt 153,459 152,777
Note to Jamieson Finco LP - 107,255
Post-retirement benefits 4,856 3,797
Deferred income tax 51,697   41,194  
Total Liabilities 291,731 556,781
 
Shareholders' equity (deficiency)
Share capital 234,908 400
Contributed surplus 7,437 2,598
Deficit (19,486 ) (153,724 )
Accumulated other comprehensive loss (2,035 ) (876 )
Total shareholders' equity (deficiency) 220,824   (151,602 )
Total Liabilities and Shareholders' equity 512,555   405,179  
 
 
Jamieson Wellness Inc.

Segment Information

             
Jamieson Brands
 
($ in 000's) Three months ended

December 31,

2017 2016

$ Change

% Change
 
Revenue 65,545 55,188   10,357 18.8 %
 
Gross profit 27,107 22,477 4,630 20.6 %
Gross profit margin 41.4 % 40.7 % - 0.7 %
 
Earnings from operations 12,732 11,330 1,402 12.4 %
Operating margin 19.4 % 20.5 % - (1.1 %)
 
Adjusted EBITDA 16,308 14,215 2,093 14.7 %
Adjusted EBITDA margin 24.9 % 25.8 % - (0.9 %)
 
 
Strategic Partners and Eliminations
 
($ in 000's) Three months ended

December 31,

2017 2016

$ Change

% Change
 
Revenue 18,773 10,507 8,266 78.7 %
 
Gross profit 3,790 1,227 2,563 208.9 %
Gross profit margin 20.2 % 11.7 % - 8.5 %
 
Earnings from operations 2,201 134 2,067 1542.5 %
Operating margin 11.7 % 1.3 % - 10.4 %
 
Adjusted EBITDA 2,540 512 2,028 396.1 %
Adjusted EBITDA margin 13.5 % 4.9 % - 8.6 %
 
 
Jamieson Brands
 
($ in 000's) For the year ended

December 31,

2017 2016

$ Change

% Change

 
Revenue 237,001 192,496 44,505 23.1 %
 
Gross profit 91,559 74,072 17,487 23.6 %
Gross profit margin 38.6 % 38.5 % - 0.1 %
 
Earnings from operations 37,595 28,844 8,751 30.3 %
Operating margin 15.9 % 15.0 % - 0.9 %
 
Adjusted EBITDA 52,834 43,165 9,669 22.4 %
Adjusted EBITDA margin 22.3 % 22.4 % - (0.1 %)
 
 
Strategic Partners and Eliminations
 
($ in 000's) For the year ended

December 31,

2017 2016

$ Change

% Change
 
Revenue 63,618 55,835 7,783 13.9 %
 
Gross profit 13,290 6,740 6,550 97.2 %
Gross profit margin 20.9 % 12.1 % - 8.8 %
 
Earnings from operations 7,340 2,197 5,143 234.1 %
Operating margin 11.5 % 3.9 % - 7.6 %
 
Adjusted EBITDA 8,643 3,629 5,014 138.2 %
Adjusted EBITDA margin 13.6 % 6.5 % - 7.1 %
 

Non-IFRS Financial Measures

This press release makes reference to certain non-IFRS measures. Management uses these non-IFRS 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. We use non-IFRS measures, including “gross profit”, “gross profit margin”, “operating margin” “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA margin”, “Adjusted Net Income” and “Adjusted Diluted Earnings per Share” 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 measures in order to prepare annual operating budgets and to determine components of management compensation. Definitions of non-IFRS measures can be found in our MD&A.

 

Reconciliation of Adjusted Net Income

     
Three months ended

December 31,

For the year ended

December 31,

($ in 000's) 2017   2016 2017   2016
 
Net income (loss) 3,733 (18,722 ) (23,787 ) (25,166 )
Adjustments to net income (loss):
Share-based compensation 978 912 4,171 3,651
Amortization of fair value adjustments - - 1,694 -
Amortization of deferred financing fee - - 3,078 -
Foreign exchange loss (gain) 116 (154 ) 331 (192 )
Termination benefits and related costs 1,633 234 4,132 1,420
Acquisition costs - 789 2,444 789
Purchase consideration accounted for as compensation expense 2,521 - 8,427 -
Public offering costs 1,200 - 10,720 -
Net interest forgiveness - - (11,001 ) -
Preferred share accretion - 24,123 28,796 30,434
Other 472 (2,784 ) 1,004 397
Related tax effects (904 ) 703   (2,427 ) (423 )
Adjusted net income 9,749   5,101   27,582   10,910  
 

Reconciliation of EBITDA and Adjusted EBITDA

     

Three months ended
December 31,

For the year ended
December 31,

($ in 000's) 2017   2016 2017   2016
 
Net income (loss) 3,733 (18,722 ) (23,787 ) (25,166 )
Add:
Provision for income taxes 3,130 2,414 8,156 3,706
Interest expense and other financing costs 2,140 5,686 4,733 22,926
Preferred share accretion - 24,123 28,796 30,434
Depreciation of property, plant, and equipment 1,336 1,100 5,106 4,316
Amortization of intangible assets 855 808   3,396   3,230  
- -
Earnings before interest, taxes, depreciation, and amortization (EBITDA) 11,194 15,409 26,400 39,446
Add EBITDA adjustments:
Share-based compensation 1,712 1,233 6,325 4,934
Amortization of fair value adjustments - - 1,694 -
Foreign exchange loss (gain) 116 (154 ) 331 (192 )
Termination benefits and related costs 1,633 234 4,132 1,420
Acquisition costs - 789 2,444 789
Purchase consideration accounted for as compensation expense 2,521 - 8,427 -
Public offering costs 1,200 - 10,720 -
Other 472 (2,784 ) 1,004   397  
Adjusted EBITDA 18,848 14,727   61,477   46,794  

Source: Jamieson Wellness Inc.

Investor Relations

ICR

Scott Van Winkle

617-956-6736

Scott.VanWinkle@ICRinc.com

or

Media

ICR

Mary Nelson

646-277-1219

Mary.Nelson@ICRinc.com

Categories: Press Releases
View All News Voir toutes les nouvelles