Organic Garage Ltd (TSXV:OG (OTCQX:OGGFF) (FRA:9CW1) said it has started seeing significant incremental savings as a result of moving to a decentralized distribution model and phasing out its warehouse as the company posted its fiscal first-quarter results.
The organic grocer said its working capital and cash position continue to strengthen, aligning for continued success and allowing its to continue to focus on delivering value for shareholders. Following the end of its fiscal first quarter, Organic Garage generated an additional $59,400 of cash through the exercise of warrants.
WATCH: Organic Garage reports strong start to online sales with Instacart
For the quarter ended April 30, 2021, Organic Garage reported a 12.1% decline in sales to $7 million, down from $8 million a year earlier. Gross profit decreased by 16.6% to $2 million from $2.4 million and it swung to an adjusted net loss of $165,174 compared to adjusted net income of $197,614 in fiscal Q1 2021.
The company said the loss was primarily related to decreased sales, non-recurring professional fees related to its March 2021 acquisition of Future of Cheese, OTC application and DTC (Depository Trust Company) eligibility, bank charges and merchant fees, stock-based compensation, non-cash and non-recurring acquisition finder’s fees.
The additional expenses were offset by decreases in administrative wages and benefits and decreased operating expenses related to its phase-out of warehouse operations.
“We incurred some non-recurring and non-cash expenses during the quarter which affected our net loss, but we are confident these will have positive long-term impacts on the company’s future," Organic Garage CEO Matt Lurie said in a statement.
“We continue to see strong results from three of our four locations and have focused on incremental renovations to address the lagging performance of one store location,” he added.
Following its partnership with Instacart for online deliveries, Organic Garage said its products will be available to service new markets, adding that operations related to the Future of Cheese are progressing at a rapid pace, with the launch of its products pending.
Organic Garage is Canada’s leading independent organic grocers and is committed to offering its customers a wide selection of healthy and natural products at everyday affordable prices. The company’s stores are in prime retail locations designed to give customers an inclusive, unique and value-focused grocery shopping experience.
Contact the author at stephen.gunnion@proactiveinvestors.com