GURU Organic Energy Announces Second Quarter 2021 Financial Results

  • Record Q2 2021 revenue of $7.1 million, up 74% versus Q2 2020
  • Gross margins of 63% in Q2 2021, up from 60% in the previous quarter
  • Strong financial position with cash and credit facilities of close to $35 million to support ongoing North American expansion plans
  • Over 800 additional points of sale confirmed with The Fresh Market, Weis Markets and Raleys in the U.S., and Canadian Tire Gas+ in Canada
  • Confirmed launch of top-performing GURU Yerba Mate in the U.S. on June 1, 2021
  • GURU and PepsiCo Beverages Canada announce signing of national distribution agreement for Canada (see separate press release)

MONTREAL, June 14, 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 second quarter and six-month period ended April 30, 2021. All amounts are expressed in Canadian dollars unless otherwise indicated.

Financial Highlights
(in thousands of dollars, except per share data)
Three months ended
April 30
Six months ended
April 30
2021   2020   2021   2020  
Revenue 7,074   4,062   13,676   9,390  
Gross profit 4,435   2,440   8,532   5,982  
Net (loss) income (1,204)   (689)   (1,835)   (248)  
Basic and diluted (loss) earnings per share (0.04)   (0.03)   (0.06)   (0.01)  
Adjusted EBITDA1 (833)   (693)   (1,264)   68  

“We are proud to have delivered another record quarter, with a 74% increase in sales and gross margins of 63%. Online sales also continue to perform very well in both Canada and the U.S., driven by evolving consumer behaviours throughout the pandemic and as a result of our consumer acquisition investments over the last several quarters,” said Carl Goyette, President and CEO of GURU.

“Since the beginning of the fiscal year, we have grown our retail presence by 6,100 points of sale to over 21,000. In addition to the 5,300 doors announced in Q1, we recently confirmed an additional 800 doors in The Fresh Market, Weis Markets and Raleys in the U.S. and in Canadian Tire Gas+ in Canada. With the addition of The Fresh Market, we have now fully penetrated the U.S. natural channel, further strengthening our health and wellness positioning. We were also pleased to launch GURU Yerba Mate in the U.S. on June 1, our latest innovation and the top-performing energy drink in our core market of Quebec. The expansion of our organic product selection will only enhance our brand visibility and positioning in the U.S. market.”

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

“We will continue to leverage the strength of our brand and strong demand for healthy alternatives in the fast-growing energy drink market, as we continue to execute our roll-out plans in Canada and the U.S. throughout the summer. This will be supported by our solid financial position and impactful marketing and sales activations,” added Mr. Goyette.

Results of operations

Revenue increased by 74% to $7.1 million in the second quarter, compared to $4.1 million for the same period a year ago. The increase is due to sales growth in Canada and the U.S. as a result of increased points of sale in both markets. Sales in Canada and the U.S. grew 89% and 22%, respectively, during the second quarter of fiscal 2021 compared to the same period last year. The comparative quarter also coincided with the onset of the COVID-19 pandemic, which negatively affected sales in that period. For the six-month period, revenue increased by 46% to $13.7 million, up from $9.4 million for the same period in 2020.

Gross profit totalled $4.4 million in the second quarter, an increase of 82% compared to $2.4 million last year. Gross margin was 63% compared to 60% for the same period a year ago. The increase in gross margin was due to a stronger product mix and the timing of promotional activities, that compensated for the higher product costs driven by increased demand for ready-to-drink beverages since the onset of the COVID 19 pandemic. For the six-month period, gross profit increased to $8.5 million from $6.0 million a year ago. Gross margin for the period was 62%, compared to 64% last year.

Selling, general and administrative expenses (“SG&A”), which include operational, sales, marketing and administration costs, amounted to $5.5 million or 78% of revenue in the second quarter, compared to SG&A of $3.2 million or 80% of revenue for the same period a year ago. The increase in dollars is the result of expansion plan set-up costs and additional costs associated with the operations of a public company. For the six-month period, SG&A amounted to $10.2 million (75% of revenue), compared to $6.1 million (65% of revenue) for the same period a year ago.

Adjusted EBITDA2 amounted to $(0.8) million compared to $(0.7) million last year. The decrease in adjusted EBITDA was due to higher SG&A, partially offset by the increase in gross profit. Adjusted EBITDA for the first six months of the year was $(1.3) million in 2021 compared to earnings of $0.1 million in 2020.

Net loss for the second quarter totalled $1.2 million or $(0.04) per share (basic and diluted), compared to a net loss of $0.7 million or $(0.03) per share (basic and diluted) for the same period a year ago. The majority of the net loss reflects the additional costs associated with operating as a public company and the set-up of our expansion plans. Net loss for the six-month period totalled $1.8 million in 2021, or $(0.06) per share (basic and diluted), compared to a net loss of $0.2 million or $(0.01) per share (basic and diluted) for the same period a year ago.

As of April 30, 2021, the Company had cash and cash equivalents of $24.1 million and unused $CA and $US denominated credit facilities totalling $10 million.

Second quarter 2021 conference call

GURU will now hold a conference call to discuss its second quarter 2021 results today, June 14, 2021, at 4:45 p.m. ET, instead of 5:30 p.m. ET as previously announced. 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: 5750898. A webcast replay will be available on GURU’s website until June 14, 2022.

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

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 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 the energy drink industry in Canada and the United States. For more information, go to www.guruenergy.com or follow us @guruenergydrink on Instagram and @guruenergy on Facebook.

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 Measure

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 Six-month periods ended
April 30, 2021   April 30, 2020   April 30, 2021   April 30, 2020  
(In thousands of Canadian dollars) $   $   $   $  
Net (loss) income (1,204)   (689)   (1,835)   (248)  
Reverse acquisition of Mira X expenses 85     110    
Net finance expenses 75   69   103   180  
Depreciation and amortization 110   83   190   164  
Income taxes (51)   (178)   (56)   (71)  
Stock-based compensation expense 152   22   224   43  
Adjusted EBITDA (833)   (693)   (1,264)   68  

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