Organic Garage Ltd. (“Organic Garage” or the “Company”) (OG.V) has released the Company’s financial results for its quarter ended July 31, 2019 and is pleased to announce an increase in year over year sales.
Second Quarter Financial Results Highlights include:
Quarterly sales increased 9.56% to $6,248,778 due to the continued growth of the Company and the addition of its fourth location, opened in October 2018.
Net loss increased quarter over quarter from ($663,277) to ($1,072,010) due to costs related to changes to IFRS accounting regulations, higher operating and depreciation expenses, higher interest costs related to the BDC financing and decreased gross margin.
Increased losses of particular significance can be attributed as follows:
- Depreciation increased from $131,031 to $408,950 with the addition of the Company’s fourth store;
- Interest on lease liability increased and caused a non-cash expense of approximately $136,000 to be booked as a result of the Company’s implementation of new IFRS accounting policies
- Interest of $90,156 on long term debt was attributable to the Business Development Bank of Canada (BDC) loan
- Gross profit dollars decreased from $1,545,739 to $1,491,708 due to a margin investment in promotional sales in stores impacted by external factors
Matt Lurie, CEO of Organic Garage, commented, “Our second quarter results were negatively impacted by non-cash expenses such as changes to IFRS rules regarding how leases are accounted for and significantly larger depreciation. We have made internal changes to help address some of the challenges we saw in the second quarter around gross margin and labour costs. We are focused on continuing to grow the company and are carefully reviewing expenses to improve bottom line profitability. We are also diligently working on a financing solution to address the BDC loan coming due in November.”
About Organic Garage Ltd.
Organic Garage (OG.V) is one of Canada’s leading independent organic grocers committed to offering its customers a wide selection of healthy and natural products at everyday affordable prices. The company’s stores are in prime retail locations designed to give customers an inclusive, unique and value-focused grocery shopping experience. Founded in 2005 by a fourth generation grocer, Organic Garage is headquartered in Toronto and operates a highly efficient supply chain through its centralized distribution centre. The company is focused on continuing to expand its retail footprint within the Greater Toronto Area. For more information please visit the Organic Garage website at www.organicgarage.com.
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Cautionary Note Regarding Forward-looking Statements
This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes.
Forward looking statements are subject to both known and unknown risks, uncertainties and other factors, many of which are beyond the control of Organic Garage, that may cause the actual results, level of activity, performance or achievements of Organic Garage to be materially different from those expressed or implied by such forward looking statements, including but not limited to future growth and profitability. Although Organic Garage has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Organic Garage's actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Any forward-looking statements are made as of the date hereof and, except as required by law, neither Organic Garage assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.