Diamond Estates Wines & Spirits Reports Q2 2023 Financial Results

Promising improvements for future results

Diamond Estates Wines & Spirits Inc. (Diamond Estates or the Company) (DWS-TSX Venture) today announced its financial results of position for the three and six months ended September 30, 2023 (Q2 2023 and YTD 2023 respectively).

Q2 2022 Summary:

• Revenue for Q2 2023 of $9.2 million, an increase of $2.1 million from Q2 2022 revenue of $7.1 million. The winery division experienced an increase of $1.8 million; because of the acquisition of Equity Wine Group, the continuing resurgence in On Premise sales, the expansion in distribution within the LCBO and Grocery channels and organic growth at Lakeview winery. Additionally, export sales have rebounded from $0.1 million in Q1 2023 to $0.6 million in Q2 2023. The Agency experienced moderate growth increasing $0.3 million to $3.8 million in Q2 2023.
• Gross margin for Q2 2023 was $3.6 million, an increase of $0.9 million from $2.7 million in Q2 2022, while gross margin as a percentage of revenue was 38.7% for Q2 2023 compared to 38.1% in Q2 2022. However, when factoring the adjustments to cost of goods sold for the fair value of EWG inventories sold, gross margin for Q2 2023 was $3.8 million and 41.1% of revenue. The increase in gross margin was a result of increases in most channels driven by the acquisition of Equity Wine Group and price increases on most products;
• EBITDA was negative $0.4 million in Q2 2023, a decrease of $0.1 million from negative $0.3 million in Q2 2022, the decrease is mostly attributable to an increase in selling, general and administrative expenses from the EWG acquisition, brand redesigns on many of the core brands, increased spending requirements with the easing of covid (promotions, events and travel) and the opening of our new Shiny retail store in July 2022. When adjusting for the incremental fair value of EWG inventories sold, adjusted EBITDA was negative $0.2 million in Q2 2023 compared to negative $0.1 million in Q2 2022; and
• Net loss was $1.4 million, compared to a net loss of $1.0 million in Q2 2022.

Subsequent Events: