Diamond Estates Wines & Spirits today announced its results for the quarter ending June 30, 2014 ("Q1 2015").
Sales for Q1 2015 were $5,166,577 compared to $5,972,682 for the quarter ended June 30, 2013 (Q1 2014"), representing a decline of 13.5%. Gross margin for Q1 2015 was 50.1% compared to 46.8% for Q1 2014. Total operating expenses for Q1 2015 were $2,222,708 versus $2,182,715 for Q1 2014, a change of $39,993. Net loss and comprehensive loss for Q1 Y2015 was $197,681 versus $338,774 in Q1 2014, resulting in loss per share of $0.003 in Q1 2015 versus $0.023 for Q1 2014.
The sales decline in the quarter was primarily due to fewer export shipments of Niagara wine. Q1 2015 export sales were down 49.5% from the prior year largely due to the disproportionate amount of the 2014 export revenue occurring in Q1 2014. Shipments for 2015 are forecast to be spread more evenly throughout the year. The export decline masked strong growth in retail sales from the winery (up 21.6%), licensee sales (up 8.5%) and bulk wine (up 40%). Sales to the LCBO and extra provincial channels were up 4.7% from the prior year. Year over year sales decline in the imported wines and spirits business was 13.8% due to the impact of lost revenue from brands no longer sold by the agency in 2015. The Company has acquired several new brands that are expected to generate significant revenue in 2015, largely offsetting the losses. These brands include Montes wines from Chile (for Quebec), Vicente Gandia wines from Spain (for Alberta and B.C.) and Blue Hour Tequila from Mexico (national).
"Diamond Estates has demonstrated significant progress against our business strategy in Q1" stated J. Murray Souter, President & CEO of Diamond Estates, "Our focus on profitability and cost management has resulted in improved margins and positive cash flow from operations. The acquisition of several new brands will catalyze growth in the imported wine and spirits business over the remainder of the year. Our winery division continues to grow organically in all sales channels. Expansion into the fast growing International Canadian Blends segment with the launch of Riders Valley and additional product offerings, including our award winning East Dell Black Label series are examples of our commitment to building profitable brands."
On September 24, 2013, the Company's shares commenced on the TSX Venture Exchange, as a result of the reverse take-over ("RTO") of Whiteknight Acquisitions II Inc., a listed Capital Pool Company. Coincident with this transaction, the Company also raised an additional $8,351,000 in equity and renegotiated its credit facilities to significantly reduce its bank indebtedness that created a platform for the future growth of its business.
