GURU Organic Energy Announces Fourth Quarter and Fiscal Year 2020 Financial Results

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  • Continued strong growth in Q4 2020 with 51% increase in revenue while delivering gross margins above 60%
  • Closing of $34.5 million financing and listing on TSX in fall 2020 to accelerate North American expansion plans via sales and marketing investments
  • Fastest-growing energy drink brand in Québec with over 13% market share1disrupting the two largest brands in a US$15B2category with a better-for-you organic offering

MONTREAL, Jan. 21, 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 fourth quarter and fiscal year ended October 31, 2020. All amounts are expressed in Canadian dollars unless otherwise indicated.

Financial Highlights
(in thousands of dollars, except per share data)
Three months ended
October 31
Twelve months ended
October 31
2020 2019 2020 2019
Revenue 6,115 4,050 22,100 17,499
Gross profit 3,705 2,636 14,039 11,544
Net income (loss) (3,145 ) (653 ) (2,156 ) 705
Basic and diluted earnings (loss) per share (0.11 ) (0.03 ) (0.07 ) 0.03
Adjusted EBITDA3 (419 ) (626 ) 1,428 1,592

“I am very proud of what GURU has accomplished in fiscal 2020, with record revenues and over 50% sales growth in the fourth quarter, reflecting a strong performance in our core markets and growing consumer demand for better-for-you energy drinks,” said Carl Goyette, President and CEO of GURU. “In fiscal 2021, our focus is on aggressively moving forward with our expansion plans across Canada and the U.S. following the completion of our $34.5 million financing and TSX listing this past fall. Several steps have already been initiated including the launch of our new Yerba Mate organic plant-based energy drink, hiring of key personnel, partnering with a leading experiential and field marketing agency, and actively working on distribution and marketing plans outside of Québec.”

“In order to meet the anticipated increase in demand and in the context of COVID-19, we have increased our marketing and promotional activities in support of our expansion plans and taken proactive measures to strengthen our supply chain and build inventory. These measures will allow us to pursue our growth initiatives without interruption.”

1 Nielsen: L52 period ending July 18, 2020 (Grocery Drug Mass +Convenience & Gas) Québec
2 Mintel, May 2020. Does not include energy shots segment
3 Refer to reconciliation of net income (loss) to adjusted EBITDA and adjusted EBITDA margin at the end of this release.

“Our objective for the next two to three years is to significantly increase our presence in key channels, including in convenience, in grocery, drug and online, as well as to increase the velocity of our sales in Canada and the U.S. Our proven track record in Québec and our success-to-date in California are proof of what we can accomplish, and we now have the means to do so on a much larger scale,” concluded Mr.Goyette.

Results of operations for the fourth quarter of fiscal 2020

Revenue increased by 51% to $6.1 million, compared to $4.1 million for the same period last year. The increase is mainly due to market share growth in Canada, predominantly in Québec. Sales in the U.S. were slightly lower versus the same period last year primarily due to the impact of the COVID-19 pandemic on consumer shopping patterns in the natural retail channel, which represents a large proportion of GURU’s U.S. sales.

Gross profit totalled $3.7 million, an increase of 41% compared to $2.6 million last year. Gross margin was 61% compared to 65% for the same period a year ago. The decrease in gross margin was due to enhanced promotional programs since the start of the COVID-19 pandemic in the spring of 2020 and higher product costs, driven by increased demand for ready-to-drink beverages.

Selling, general and administrative expenses (“SG&A”), which include operational, sales, marketing and administration costs, amounted to $4.2 million or 69% of revenue for the three-month period ended October 31, 2020. Last year SG&A was $3.4 million, or 84% of revenue. The improvement in SG&A as a percentage of revenue was achieved through more controlled sales and marketing spend.

Adjusted EBITDA4 amounted to $(0.4) million compared to $(0.6) million last year.

Net loss for the fourth quarter of fiscal 2020 totalled $3.1 million or $(0.11) 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 reverse acquisition of Mira X expenses incurred by GURU ahead of its listing on the Toronto Stock Exchange subsequent to year end.

As of October 31, 2020, the Company had cash and cash equivalent of $30.4 million and unused $CA and $US denominated credit facilities totalling about $6.5 million. Its strong financial position will allow it to fund its expansion activities.

Results of operations for fiscal 2020

Revenue increased by 26% to a record $22.1 million, compared to $17.5 million in fiscal 2019. The Company’s growth trend was impacted by the COVID-19 pandemic in Q2 and Q3 2020, but has recovered since July 2020 with a 51% increase in sales in the last quarter compared to Q4 2019. The increase was mainly due to market share growth in Canada, predominantly in Québec, driven by both convenience and gas outlets and grocery stores, partially offset by lower sales in the U.S. due to the impact of the COVID-19 pandemic at its onset in March 2020.

Gross profit totalled $14.0 million, an increase of 22% compared to $11.5 million in fiscal 2019. Gross margin was 64% in fiscal 2020, compared to 66% a year ago. The decrease in gross margin was due to enhanced promotional programs since the start of the COVID-19 pandemic in the spring of 2020 and higher product costs, driven by increased demand for ready-to-drink beverages.

Adjusted EBITDA2 was $1.4 million compared to $1.6 million last year, resulting in an adjusted EBITDA2 margin of 6% in fiscal 2020 versus 9% in fiscal 2019.

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

Net loss for the year totalled $2.2 million or $(0.07) per share (basic and diluted), compared to a net income of $0.7 million or $0.03 per share (basic and diluted) a year ago. The reverse acquisition of Mira X, which amounted to $2.9 million, was the main reason for the net loss. Excluding this transaction, GURU would have generated income before taxes of $721,347 in fiscal 2020.

Conference call

GURU will hold a conference call to discuss its fourth quarter and 2020 fiscal year results today, January 21, 2021 at 10:00 a.m. (ET). Interested parties can listen-in by accessing the live audio webcast through GURU’s website at https://investors.guruenergy.com/en/ir-corner or by dialing 833-678-0822 (North America) or 602-563-8278 (International). A webcast replay will be available on GURU’s website until January 21, 2022.

About GURU
GURU (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 15,000 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 about GURU, visit www.guruenergy.com.

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: continued uncertainty in the financial markets; an economic downturn; adverse changes in general economic or political conditions; the COVID-19 pandemic; fluctuations in foreign currency exchange rates; increased competition; reliance on energy drinks as our sole source of revenues; changes in consumer preferences; the changing retail landscape; significant changes in government regulation; criticism of energy drink products and/or the energy drink market; reliance on co-packers to manufacture our products; our ability to maintain good relations with our existing customers; increases in costs and/or shortages of raw materials, ingredients, fuel and/or co-packing; failure to accurately estimate demand for our products; loss of intellectual property rights; our ability to retain senior management or to maintain brand image or product quality; climate change; our ability to achieve and manage growth; conflicts of interest; litigation; and catastrophic events. 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 Measures

Adjusted EBITDA and adjusted EBITDA Margin
Adjusted EBITDA and adjusted EBITDA margin are both non-IFRS financial measures. 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, while adjusted EBITDA margin is defined as the percentage of adjusted EBITDA to revenues. We believe that adjusted EBITDA and adjusted EBITDA margin are useful measures of financial performance because they provide 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. Each of these non-lFRS financial measures 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 such financial measures may differ from the methods used by other issuers and, accordingly, our definition of these non-lFRS financial measures 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 Income (Loss) to Adjusted EBITDA

Three-month periods ended Twelve-month periods ended
October 31, 2020 October 31, 2019 October 31, 2020 October 31, 2019
(In thousands of Canadian dollars) $ $ $ $
Net income (loss) (3,145 ) (653 ) (2,156 ) 705
Reverse acquisition of Mira X expenses 2,916 2,916
Net finance expenses 56 101 312 271
Depreciation and amortization 64 76 309 296
Income taxes (331 ) (210 ) (39 ) 260
Stock-based compensation expenses 21 60 86 60
Adjusted EBITDA (419 ) (626 ) 1,428 1,592

For further information, please contact:

Investors
Carl Goyette, President and Chief Executive Officer
Ingy Sarraf, Chief Financial Officer
GURU ORGANIC ENERGY CORP.
514-845-4878
investors@guruenergy.com
Media
Lyla Radmanovich
PELICAN PR
514-845-8763
media@rppelican.ca

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