Andrew Peller Limited Reports Financial Results for Second Quarter of Fiscal 2026

Executive Summary

• Andrew Peller Limited reported financial results for the three and six months ended September 30, 2025, showing significant improvements in profitability and margins despite a slight decline in revenue.
• Net earnings for the second quarter (Q2) nearly doubled year-over-year, rising to $8.9 million ($0.21 per Class A share) from $4.6 million ($0.11 per Class A share) in Q2 2025.
• The company attributed margin expansion to lower input costs (glass and freight) and government support programs, while noting that Q2 revenue was negatively impacted by a prior-year LCBO strike that boosted sales in the comparable period.

Key Details

• Q2 2026 Financials (Three Months Ended Sept 30, 2025):
  • Revenue: $105.5 million (down 3.4% from $109.2 million in Q2 2025).
  • Gross Margin: 45.7% (up from 42.4% in Q2 2025).
  • EBITA: $21.3 million (up 18% from $18.0 million in Q2 2025).
  • Net Earnings: $8.9 million ($0.21 per Class A share), compared to $4.6 million ($0.11 per Class A share) in Q2 2025.
• YTD 2026 Financials (Six Months Ended Sept 30, 2025):
  • Revenue: $204.7 million (down 1.9% from $208.7 million in prior year).
  • Gross Margin: 44.1% (up from 40.5% in prior year).
  • EBITA: $37.4 million (up 21% from $30.8 million in prior year).
  • Net Earnings: $13.5 million ($0.32 per Class A share), compared to $4.2 million ($0.10 per Class A share) in prior year.
• Dividends:
  • Declared dividend of $0.123 per Class A Share and $0.107 per Class B Share.
• Operational Drivers & Cost Savings:
  • Gross margin improvement driven by lower costs for glass bottles and inbound freight due to ongoing cost savings programs.
  • Ontario Grape Support Program (OGSP) contributed $2.4 million to gross margin in Q2 and $4.5 million in the first six months; this program was not active in the prior year.
  • Selling and administrative expenses as a percentage of revenue improved to 25.6% in Q2 (from 26.0% in prior year) due to reduced compensation expenses from restructuring initiatives.
  • Interest expense decreased by 28.4% in Q2 and 21.4% YTD due to lower average debt levels and reduced interest rates.
• Asset Disposition:
  • Sold land, vineyard, and building assets in Kaleden, British Columbia with a net book value of $1.0 million for net proceeds of $1.2 million.
• Derivatives:
  • Recorded a net unrealized non-cash gain of $0.6 million in the first six months of fiscal 2026 related to mark-to-market adjustments on interest rate swaps and foreign exchange contracts (compared to a loss of $1.7 million in the prior year).

Notable Quotes

• “It was a strong second quarter, highlighted by significant year-over-year growth in our margins, earnings and cash flow, and further strengthening of our balance sheet,” said Paul Dubkowski, Chief Executive Officer. “Our year-over-year sales performance reflects the significant positive benefit from the LCBO strike in last year’s second quarter. Excluding the impact of this, our second-quarter sales increased over the prior year, led by solid results from key channels across the country, including liquor boards, grocery, big-box stores and the estate properties.”