The following is a summary of the Andrew Peller Limited (ADWPF) Q1 2025 Earnings Call Transcript:

Financial Performance:

• Andrew Peller Limited reported Q1 2025 revenue of $99.5 million, a slight decrease of 1% year-over-year.

• The margin percentage slightly decreased to 38.4% from 38.8%.

• EBITDA improved to $12.9 million from $12.7 million a year ago, thanks to cost savings and operational efficiencies.

• Cash generated from operations was $15.3 million, compared to $13.7 million in the previous year, with a net cash debt improvement of $6 million.

Business Progress:

• Andrew Peller continues to focus on cost savings and production efficiency programs to support long-term margin growth.

• The company is implementing compensation optimization and reducing marketing spend to align with current market conditions.

• Andrew Peller is actively managing inventory and working capital, with a noteworthy reduction in total debt to $207.3 million from $208.3 million and inventory reduction to $176.5 million from $192.5 million.

Opportunities:

• The company is encouraged by recent regulatory changes in Ontario aiming to expand retail distribution points for beverage alcohol, which promises increased market access and potential growth.

• The new Ontario VQA support program is expected to bolster the domestic wine industry.

Risks:

• Andrew Peller faces challenges relating to the cycling out of high-margin sales channels like estates and wine clubs, and the international freight cost pressure.

• Crop damage in the Okanagan Valley due to extreme winter conditions is affecting VQA supply, although mitigating strategies are in place.

More details: ANDREW PELLER LTD IR

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