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Guru Organic Energy Announces First Quarter 2021 Financial Results

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GURU Organic Energy Corp.
·9 min read
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  • Record Q1 2021 revenue of $6.6 million, up 24% versus Q1 2020

  • Solid gross margins of 62% in Q1 2021

  • Growing presence of plant-based better-for-you GURU energy drinks across Canada and the U.S. with the addition of 5,300 points of sale to over 21,000

  • Strong financial position with cash and credit facilities of over $30 million to support ongoing North American expansion plans

MONTREAL, March 17, 2021 (GLOBE NEWSWIRE) -- GURU Organic Energy Corp. (TSX: GURU) (“GURU” or the “Company”), Canada’s leading organic energy drink brand, is pleased to announce its results for the first quarter ended January 31, 2021. All amounts are expressed in Canadian dollars unless otherwise indicated.

Financial Highlights
(in thousands of dollars, except per share data)

Three months ended
January 31

2021

2020

Revenue

6,603

5,328

Gross profit

4,097

3,542

Net (loss) income

(631

)

442

Basic and diluted (loss) earnings (loss) per share

(0.02

)

0.02

Adjusted EBITDA1

(431

)

762

1 Refer to reconciliation of net (loss) income to adjusted EBITDA at the end of this release.

“We achieved record sales of $6.6 million, representing 24% year-over-year growth as well as gross margins of 62%, a significant achievement in the current context with stricter COVID-19 measures in place throughout the course of the first quarter. Sales growth in the U.S. also resumed with a 25% year-over-year increase in constant dollars in large part driven by online sales,” said Carl Goyette, President and CEO of GURU. “This reflects the strength of our brand as well as sustained demand for better-for-you energy drinks and plant-based products, despite the impact of pandemic-related restrictions in place during the quarter, including a curfew in Quebec.”

“GURU’s North American expansion plans are progressing well and on plan, having secured gains in both the Canadian convenience and the U.S. pharmacy channels since the beginning of the year. Compared to the same time last year, we have increased our points of sale by 34%, from 15,700 to over 21,000. This increase will be accretive to our revenues over the next quarters as products become available in new points of sale.”

“We expect further growth in sales in the coming quarters as we continue to execute our growth plans, by expanding our presence and the velocity of our sales in key channels across Canada and the U.S., supported by methodical marketing and sales activities. We also expect that our sales will be positively impacted by the eventual lifting of COVID-19 measures currently in place as vaccination programs continue to roll out,” concluded Mr.Goyette.

Results of operations for the first quarter of fiscal 2021

Revenue increased by 24% to $6.6 million, compared to $5.3 million for the same period last year. The increase is due to sales growth in Canada, predominantly in Quebec, and in the U.S.

Gross profit totalled $4.1 million, a 16% increase compared to $3.5 million last year. Gross margin was 62% compared to 66% for the same period a year ago. The decrease in gross margin was due to enhanced promotional programs, and higher product costs driven by increased demand for ready-to-drink beverages since the onset of the COVID-19 pandemic.

Selling, general and administrative expenses (“SG&A”), which include operational, sales, marketing and administration costs, amounted to $4.7 million or 71% of revenue for the three-month period ended January 31, 2021, compared to SG&A of $2.9 million or 54% of revenue for the same period a year ago. The increase in SG&A is the result of expansion plan set-up costs and additional costs associated with operating as a public company.

Adjusted EBITDA2 amounted to $(0.4) million compared to earnings of $0.8 million last year. The decrease in adjusted EBITDA was due to higher SG&A, partially offset by the increase in gross profit.

2 Refer to reconciliation of net (loss) income to adjusted EBITDA at the end of this release.

Net loss for the first quarter of fiscal 2021 totalled $0.6 million or $(0.02) per share (basic and diluted), compared to a net income of $0.4 million or $0.02 per share (basic and diluted) for the same period a year ago. The majority of the net loss reflects the set-up of GURU’s expansion plans, and the additional costs associated with operating as a public company, partially offset by lower financial costs.

As of January 31, 2021, the Company had cash and cash equivalents of $26.4 million and unused $CA and $US denominated credit facilities totalling about $4.0 million. Its strong financial position will allow it to fund its expansion activities.

First quarter 2021 conference call
GURU will hold a conference call to discuss its first quarter 2021 results today, March 17, 2021, at 10:00 a.m. ET. Interested parties can listen in by accessing the live audio webcast at https://investors.guruenergy.com/en/ir-corner or by dialling 833-678-0822 (North America) or 602-563-8278 (International). Participants will need to provide the following Conference ID Number: 9738777. A webcast replay will be available on GURU’s website until March 17, 2022.

Virtual annual general meeting
GURU's annual general meeting of shareholders will also be held today at 2 p.m. ET. The meeting will be held virtually due to restrictions imposed in the context of the ongoing COVID-19 pandemic. Shareholders can access the meeting via webcast at http://web.lumiagm.com/289346921 and password: guru2021(case sensitive). The virtual meeting guide can be consulted by clicking here. Shareholders will be able to log in to the meeting up to 30 minutes prior to the start time.

About GURU
GURU Organic Energy Corp. (TSX:GURU) is a dynamic, fast-growing beverage company launched in 1999, when it pioneered the world’s first natural, plant-based energy drink. The Company markets organic energy drinks in Canada and across the United States through a distribution network of more than 21,000 points of sale, and through guruenergy.com and Amazon. GURU has built an inspiring brand with a clean list of organic plant-based ingredients. Its drinks offer consumers good energy that never comes at the expense of their health. The Company is committed to achieving its mission of cleaning up the energy drink industry in Canada and the United States. For more information about GURU, visit www.investors.guruenergy.com.

Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Such forward-looking statements include, but are not limited to, information with respect to our objectives and the strategies for achieving those objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. Forward-looking statements are typically identified by the use of words such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, or “continue”, although not all forward-looking statements contain these words. Forward-looking statements are provided for the purposes of assisting the reader in understanding the Company and its business, operations, prospects and risks at a point in time in the context of historical and possible future developments, and the reader is therefore cautioned that such information may not be appropriate for other purposes. Forward-looking statements are based on assumptions and are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements. Those risks and uncertainties include the following management of growth; reliance on key personnel; changes in consumer preferences; significant changes in government regulation; criticism of energy drink products and/or the energy drink market; economic downturn and continued uncertainty in the financial markets and other adverse changes in general economic or political conditions, as well as the COVID-19 pandemic or other major macroeconomic phenomena; global or regional catastrophic events; fluctuations in foreign currency exchange rates; revenues derived entirely from energy drinks; increased competition; relationships with co-packers and/or their ability to manufacture GURU’s products; relationships with existing customers; changing retail landscape; increases in costs and/or shortages of raw materials and/or ingredients and/or fuel and/or costs of co-packing; failure to accurately estimate demand for its products; intellectual property rights; maintenance of brand image or product quality; retention of the full-time services of senior management; climate change; litigation; information technology systems; fluctuation of quarterly operating results; no assurance of continued profitability or positive EBITDA; and conflicts of interest. Certain assumptions were made in preparing the forward-looking statements concerning availability of capital resources, business performance, market conditions and consumer demand. Consequently, all of the forward-looking statements contained herein are qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking statements contained herein are provided as of the date hereof, and we do not undertake to update or amend such forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable law.

Non-IFRS Financial Measures

Adjusted EBITDA
Adjusted EBITDA is a non-IFRS financial measure. Adjusted EBITDA is defined as net income or loss before reverse acquisition of Mira X expenses, income taxes, net finance expenses, depreciation and amortization, and stock-based compensation expenses. We believe that adjusted EBITDA is a useful measure of financial performance because it provides an indication of the Company’s ability to seize growth opportunities in a cost-effective manner, finance its ongoing operations and service its long-term debt. This non-lFRS financial measure is not an earnings or cash flow measure recognized by International Financial Reporting Standards (IFRS) and does not have a standardized meaning prescribed by IFRS. Our method of calculating this financial measure may differ from the methods used by other issuers and, accordingly, our definition of this non-lFRS financial measure may not be comparable to similar measures presented by other issuers. Investors are cautioned that non-lFRS financial measures should not be construed as an alternative to net income determined in accordance with IFRS as indicators of our performance or to cash flows from operating activities as measures of liquidity and cash flows.

Reconciliation of Net (Loss) Income to Adjusted EBITDA

Three-month periods ended

January 31, 2021

January 31, 2020

(In thousands of Canadian dollars)

$

$

Net (loss) income

(631

)

442

Reverse acquisition of Mira X expenses

25

-

Net finance expenses

28

111

Depreciation and amortization

80

81

Income taxes

(5

)

107

Stock-based compensation expense

72

21

Adjusted EBITDA

(431

)

762

For further information, please contact:

Investors
Carl Goyette, President and Chief Executive Officer
Ingy Sarraf, Chief Financial Officer
GURU ORGANIC ENERGY CORP.
514-845-4878
investors@guruenergy.com

Media
Lyla Radmanovich
PELICAN PR
514-845-8763
media@rppelican.ca