2022-08-09 | TSX:AEG | Press release

Pandemic recovery fuels growing momentum

MARKHAM, ON, August 9, 2022 /CNW/ – Aegis Brands Inc. (TSX: AEG) (“Aegis”, “the Company”) announced its financial results for the second quarter ending June 26e2022, reflecting improvements in key performance indicators.

“Our strategies for leveraging the pandemic recovery are bearing fruit,” said Steve PeltonPresident and Chief Executive Officer, Aegis Brands Inc. “With the food and beverage recovery well underway and our actions to develop new revenue channels, Aegis is well positioned to build on this momentum in the coming quarters.”

Strong points:

  • Bridgehead’s same coffee sales for the quarter were up 40% from the comparable quarter of 2021, but have yet to reach 2019 levels.
  • Revenue for the quarter increased by 36% to $3,240,000of $2,383,000 in the same quarter last year.
  • The net loss for the quarter was $2,816,000 Where $0.12 per share. However, after adjusting for the non-cash revaluation of warrants and securities, Aegis recorded a net profit of $23,000 Where $0.01 per share for the quarter, compared to a loss of $5,101,000 Where $0.22 per share for the same quarter last year.
  • Post-quarter, Aegis’ development line of credit (DLOC) with CWB Franchise Finance (CWB) was increased by $3,000,000at $30,000,000. No amount has been drawn on this facility to date. This DLOC provides Aegis with financial support to pursue its acquisitions and adds to the $3,000,000 line of credit already in place for general operating purposes.

Head of the bridge

Bridgehead’s revenue grew to $3,240,000 of $2,383,000, or 36%, in the same quarter last year. Turnover since the beginning of the year reached $5,782,000of $4,610,000 in 2021.

Sales at Bridgehead cafes continued to grow throughout the second quarter as more people returned to office work. Coffee sales in the 13 weeks ended June 26e2022 were $2,810,000 compared to $1,877,000 in the second quarter of 2021, an increase of $938,355 or 50 percent. This result combines a 40% increase in sales of the same cafes compared to the comparable quarter last year with the sales of two new locations.

Bridgehead’s net profit was $459,000 compared to a net loss of $23,000 in the same quarter last year. Since the beginning of the year, the company has recorded a net loss of $140,000 compared to a loss of $5,000 in 2021. The Pandemic and “Freedom Convoy” grants received in the second quarter supported the results for the quarter.

“Along with our focus on growing in-store sales, we continue to invest in growing both wholesale and e-commerce in our business,” Pelton said. Bridgehead recently hired experienced senior executives to run these channels. Investments are continuing in the overhaul of the website; e-commerce functionality; and new marketing initiatives to support e-commerce, wholesale and traditional coffee shops.

During the quarter, Bridgehead entered into a national broker/distributor agreement to further accelerate wholesale business growth. The broker-distributor partner was chosen because of their history of successfully selling and distributing high-quality, socially and environmentally responsible coffee to grocery stores across the country and they have the industry know-how and connections to do it again with Bridgehead.

“We are thrilled to begin this partnership and look forward to bringing the Bridgehead coffee experience to people across Canada,” said Kate Burnett, Chairman of Bridgehead. “Our wholesale business has grown over 30% over last year and we have only just begun the marketing and distribution necessary to achieve our goals in this segment of the business,” continued Burnett.

Aegis Brands Inc.

Aegis adjusted EBITDA from continuing operations for the quarter was $320,000 after adjustment for non-monetary revaluations of Kiaro and Meta warrants and Kiaro shares of $2,904,000 (2021 – $nil). The book value of the investment in Kiaro in Q2 is $1,652,000which was written by $4,977,000 since Q3 2021. Steven Pelton resigned from Kiaro’s board of directors on July 25e2022.

As the company continues to recover from the pandemic, Aegis continues to advance its previously disclosed strategy of pursuing acquisitions in the hospitality and beverage sector. “We are committed to becoming a big brand consolidator, and we will only pursue companies that we believe can help grow beyond their current trajectory,” Pelton added.


Aegis measures the success of its business in part by employing several key performance dictators, referenced here, including comparable store sales and EBITDA, which are not recognized under IFRS. These metrics should not be considered an alternative to IFRS financial measures, such as net income, and are presented in this report because Aegis management believes these measures are relevant in interpreting the performance of its businesses. Because non-IFRS financial measures do not have standardized definitions prescribed by IFRS, they are less likely to be comparable to those of other issuers or comparable companies. A description of the non-IFRS measures used by Aegis to measure its performance and a reconciliation of certain non-IFRS measures to the nearest IFRS measure are included in Aegis’ management report for the first quarter ended. March 27e2022, available on SEDAR at www.sedar.com.


This press release contains forward-looking statements within the meaning of Canadian securities laws. These forward-looking statements contain statements of Aegis’ current intentions, beliefs or expectations. Forward-looking information is often, but not always, identified by the use of words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “expect”, ” target, ‘project,’ ‘may’, ‘will’, ‘should’, ‘might’, ‘estimate’, ‘predict’ or similar words suggesting future outcomes, or language suggesting perspective.

Forward-looking statements included in this press release, including statements regarding the nature of Aegis’ future growth strategy and Aegis’ execution of any of its potential plans (including with respect to growth and development of Bridgehead Coffee and the identification of future target acquisitions), are not guarantees of future results and involve risks and uncertainties that may cause actual results to differ materially from the potential results discussed in the forward-looking statements.

The risks and uncertainties that could cause such differences include, but are not limited to: risks relating to future business strategy; risks related to the COVID-19 pandemic; and other risks inherent in the industry in which Aegis operates. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Additional information about these and other factors that could affect Aegis’ operations or financial results is included in reports filed with applicable securities authorities and may be viewed through the SEDAR website (www.sedar.com).

With respect to forward-looking statements and information included in this press release, Aegis has provided them based on certain assumptions which it believes to be reasonable at this time, including the company’s ability to manage risks (economic , operational, financial, and other risks) associated with the COVID-19 pandemic, the Company’s ability to identify new acquisition opportunities and successfully integrate past and future acquisition objectives into the business of the business, and the ability of the business to generally execute its strategy in the future.

The forward-looking statements contained in this press release are made as of the date of its publication, and Aegis undertakes no obligation to publicly update or revise any of the forward-looking statements included, whether as a result of new information, future events or otherwise, except as required by applicable law.

About Aegis Brands Inc.

Aegis Brands Inc. currently owns and operates Bridgehead Coffee. The company’s vision is to build a portfolio of incredible brands that can grow and thrive through access to our 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.

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