Colabor Group Reports Results for the Third Quarter 2025 and Provides a Corporate Update

Executive Summary

• Colabor Group reported Q3 2025 sales of $212.5 M (+31.1% YoY) but posted a net loss of $74.4 M, driven by a $75 M goodwill impairment and higher debt ($112.1 M).
• Adjusted EBITDA fell to $5.8 M (2.7% margin) from $9.5 M a year earlier; financial leverage rose to 7.8×.
• The company entered forbearance agreements with lenders, extended to Jan 30 2026, and announced a CEO transition to Kelly Shipway.

Key Details

• Sales: $212.5 M (12‑week period) vs. $162.0 M in Q3 2024; 36‑week sales $513.7 M (+13.0%).
• Adjusted EBITDA: $5.8 M (2.7% margin) vs. $9.5 M (5.9%) YoY; 36‑week adjusted EBITDA $13.4 M (2.6% margin).
• Net Loss: $(74.4) M (continuing operations) vs. $1.2 M profit in Q3 2024; total net loss $(74.4) M.
• Cash Flow from Operations: $(7.7) M (12‑week) vs. $9.9 M YoY; $(3.0) M for 36‑week period.
• Net Debt: $112.1 M at Sept 6 2025, up from $47.8 M Dec 28 2024 (increase due to $45.5 M credit facility amendment and $15.0 M new highly subordinated debt).
• Financial Leverage Ratio: 7.8× (vs. 2.4× prior year).
• Impairment Charge: $75.0 M goodwill impairment recorded in Q3 2025.
• Cybersecurity Incident: Identified July 20 2025; impacted internal IT systems and sales.
• Forbearance Agreements: Initial agreement Sept 5 2025, extended Oct 15 2025; lenders forbear until Jan 30 2026, impose $1.0 M liquidity requirement and monthly EBITDA test; require non‑binding LOI for refinancing and at least $15 M equity raise by Dec 15 2025.
• CEO Transition: Kelly Shipway appointed President & CEO effective immediately, succeeding Louis Frenette. Shipway previously COO; extensive agri‑food experience.
• Alimplus Integration: Site closures planned (Drummondville Nov 2025, Anjou Jan 2026); synergies expected to materialize over several quarters, full benefits by end‑2026.
• Outlook: Management prioritizes capital stabilization, lender negotiations, possible equity raise, and continued Alimplus integration; acknowledges risk that failure to secure long‑term financing could impair operations.

Notable Quotes

• “I am honored… committed to taking the next steps and seizing growth opportunities.” – Kelly Shipway, President & CEO
• “Our immediate priority is to stabilize the Company’s capital… while actively implementing our Alimplus integration plan.” – Yanick Blanchard, Interim SVP & CFO

Materiality Assessment: Material – Negative (significant earnings decline, large impairment, heightened debt and leverage, forbearance extensions, and CEO change).