Aegis Brands sees wholesale growth and sales recovery in 2021 as COVID-19 restrictions lift.

TORONTO, March 28, 2022 /CNW/ - Today, Aegis Brands Inc. (Aegis or the Company) has reported financial results for the fourth quarter and 2021 fiscal year, which ended December 26, 2021.

Highlights:

  • Aegis reported a net loss of $7,900,000 compared to a net loss of $19,600,000 in 2020
  • EBITDA for the year was a loss of $3,931,000, compared to a loss of $2,805,000 in the prior year
  • 4th Quarter Net loss of $2,131,000 or $0.09 per share was net income of $179,000 or $0.01 per share when adjusted for impairment charges, other income, and discontinued operations
  • Revenue for the company increased 15.4% over 2020
  • Bridgehead Coffee's Same Store Sales (SSS) increased 17.7% in 2021
  • $28,000,000 Development Line of Credit secured from CWB Franchise Finance

Aegis Brands Inc.

In September 2021, Aegis completed a transaction with Kiaro Holdings Corp., a national cannabis retailer and wholesale distributor, to sell 100% of the common shares of the Company's subsidiary 2734524 Ontario Inc. (dba Hemisphere Cannabis Co.). This transaction allows Aegis to focus its ongoing operations on the food and beverage industry, including the management of the "Bridgehead Coffee" brand through its wholly-owned subsidiary Bridgehead (2000) Inc. (Bridgehead). Furthermore, in December 2021 the Company secured a $28,000,000 Development Line of Credit from CWB Franchise Finance (the Facility). The Facility will provide the capital needed to execute on the Company's strategy of consolidating great brands and great entrepreneurs in the food and beverage/hospitality sector. Subsequent to the end of the year, the Company restructured its credit facilities resulting in a $1 million decrease to the limit of the Facility and a corresponding increase to the Company's general revolving credit facility.

"Heading into 2022, we continue to prioritize acquisitions to build a portfolio of great brands within Aegis," said Steven Pelton, President and CEO of Aegis. "As part of this strategy, we are committed to putting entrepreneurs first. We want them to know the integrity and values of their company will stay intact while it grows with alongside other brands within Aegis. Shared expertise and resources between the brands and their people will be the driving force behind the success of each brand and therefore the success of Aegis."

Bridgehead Coffee

As Ontario saw COVID-19 restrictions ease, Bridgehead's coffeehouse sales and revenue from e-commerce and wholesale for the 4th Quarter were $3,375,000 compared to $2,688,000 in the prior year, representing an increase of $687,000 or 25.6%. During the same quarter, coffeehouse SSS were up 18.9% despite increased restrictions due the onset of the Omicron variant in December.

For the year, system sales of all channels were $10,876,000 compared to $9,428,000 in the prior year, an increase of 15.4%. The largest contributing increase came in the wholesale division with revenue doubling year over year as a result of a targeted effort to increase sales from that channel. In addition, one of Bridgehead's new coffeehouses which opened in November 2020 added to system sales for all the 2021 fiscal year versus just over a month in the 2020 fiscal year.

Relaxed COVID-19 measures contributed to increased foot traffic and in turn, increased coffeehouse sales 18.9% in Q4. However, sales dipped in December 2021 as the Omicron COVID-19 variant spread across Ontario and resulted in further restrictions across Canada. Overall, Bridgehead coffeehouse sales increased 17.7% for the year.  Subsequent to the end of the year, Bridgehead continues to build on the recovery of 2021 with year-to-date SSS increasing 10.9% over the same months last year despite continued challenges, including protesters occupying downtown Ottawa, Bridgehead's core market, for several weeks in early 2022.

Bridgehead continues to make investments in digital, e-commerce and its wholesale/grocery channel. Bridgehead brokered a new distributor partnership, helping expand its grocery channel in Ontario and eventually into other provinces. Recently Bridgehead added 31 Longo's stores to the growing list of grocery retailers that carry its coffee. Bridgehead also distributes through Sobeys, Costco, Farm Boy and Whole Foods.

"A silver lining from this pandemic is that it has forced us to pivot, evolve and diversify our business," said Kate Burnett, President of Bridgehead. "We are no longer just brick and mortar and no longer just selling in Ottawa – we are tackling digital, e-commerce and wholesale and they are delivering exciting results."

About Aegis Brands Inc. 
Aegis Brands Inc. currently owns and operates Bridgehead Coffee. The Company's vision is to build a portfolio of amazing brands that can grow and flourish with access to Aegis's resources and expertise. The Company is committed to letting each brand operate independently while providing shared expertise to help them thrive.

For more information, please visit aegisbrands.ca.

SOURCE Aegis Brands Inc.

Copyright 2022 Canada NewsWire

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