Guru Organic Energy Announces First Quarter 2021 Financial Results

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.

“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.

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

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.

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.

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

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

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