Birks(US:BGI)2024-07-16 21:23Financial Performance - Total net sales for fiscal 2024 were $185.3 million, an increase of $22.3 million, or 13.7%, compared to $163.0 million in fiscal 2023[24]. - Net retail sales increased by $20.4 million, primarily driven by strong performance in third-party branded timepieces and jewelry, despite a decrease in Birks product brand sales[24]. - E-commerce sales increased by 26.8% due to online exclusive product offerings and improved site functionalities[24]. - Adjusted EBITDA for fiscal 2024 was $10.015 million, significantly higher than $3.822 million in fiscal 2023[35]. - For the fiscal year ended March 30, 2024, net sales increased to $185.3 million, up from $162.9 million in the previous year, representing a growth of 13.7%[55]. - Comparable store sales grew by 7.5% for the fiscal year 2024, compared to 2.9% in fiscal 2023 and 32.4% in fiscal 2022[54]. - Operating income for fiscal 2024 was $1.2 million, a significant improvement from an operating loss of $3.8 million in fiscal 2023[55]. - The company reported a net loss of $4.6 million for fiscal 2024, an improvement from a net loss of $7.4 million in fiscal 2023[55]. Expenses and Profitability - SG&A expenses in fiscal 2024 were $65.7 million, or 35.5% of net sales, down from $66.1 million, or 40.6% of net sales in fiscal 2023, reflecting a decrease of 510 basis points[25]. - Total gross profit for fiscal 2024 was $67.96 million, with a gross margin of 41.7%, down from 42.0% in fiscal 2023[30]. - Gross profit for fiscal 2024 was $73.6 million, with a gross margin of 39.7%, down from 41.7% in fiscal 2023[56]. - Depreciation and amortization expense increased to $6.6 million in fiscal 2024 from $5.7 million in fiscal 2023, primarily due to accelerated depreciation related to vendor agreements and store closures[57]. - The gross profit margin decreased in fiscal 2024, but is expected to stabilize and increase as the Company promotes its Birks product brand[119]. Capital and Financing - The company has $4.2 million outstanding on a loan from Investissement Québec for digital transformation, with a working capital ratio of 0.96 as of March 30, 2024[47]. - A capital lease facility financing agreement was entered into for up to U.S. $3.6 million, with approximately U.S. $2.4 million borrowed during fiscal 2024[48]. - The company incurred interest charges of $4.7 million on its Amended Credit Facility in fiscal 2024, slightly down from $4.8 million in fiscal 2023[85]. - The amount borrowed at year-end was $63.372 million, up from $57.890 million in the previous year[75]. - The company has a majority of independent directors on its board, which is a requirement under NYSE American rules, ensuring governance and oversight[177]. Corporate Governance - The audit and corporate governance committee held four meetings during fiscal 2024, with 100% attendance from all members[151]. - The executive committee held five meetings during fiscal year 2024, with 100% attendance from all members except one[152]. - The compensation and nominating committee evaluated director candidates based on integrity, business judgment, and industry knowledge, ensuring a diverse and skilled board[179]. - The compensation and nominating committee held four meetings in fiscal year 2024, with all members attending 100% of the meetings except for one member who attended 80%[209]. - The Board of Directors held nine meetings and fourteen committee meetings in fiscal year 2024, with all directors attending 100% of the meetings except for three directors who attended 80%[208]. Strategic Initiatives - The company launched several new collections under the Birks brand in fiscal 2024, enhancing its product offerings[88]. - The company is implementing a new ERP system with Microsoft Dynamics D365 for Retail to enhance retail operations, including POS and supply chain management, although there are risks of operational disruptions during implementation[159]. - The Company plans to continue evaluating store productivity and may close underperforming stores while seeking new prime retail locations[120]. - The Company is actively seeking alternative financing sources, including public or private equity and asset disposals, to support its operations[113]. Market Position and Compliance - The company has a significant historical reputation as a designer and retailer of fine jewelry, which distinguishes it from competitors[203]. - The company expects to maintain its status as a "foreign private issuer," allowing it to file less information with the SEC compared to U.S. companies[193]. - The company may face challenges in the future regarding compliance with NYSE American's continued listing standards, which could impact its stock trading status[192]. - Major shareholders include The Grande Rousse Trust and Meritus Trust Company Limited, each holding 71.11% of Class A voting shares[183]. Employee and Compensation - The aggregate compensation paid to the four executive officers was approximately $1,770,000 in annual salary[141]. - As of March 30, 2024, the company employed approximately 290 persons, with no employees governed by a collective bargaining agreement[153]. - As of March 30, 2024, the total number of employees decreased to 290 from 313 as of March 25, 2023, representing a reduction of approximately 7.3%[180]. - Each non-employee director is entitled to receive deferred stock units valued at US$45,000 starting September 2023[140]. Risks and Challenges - The Company faced challenges in fiscal 2024 due to store renovations and inflationary pressures affecting consumer spending[118]. - The Company is exposed to currency exchange risks that could materially affect its results of operations and financial condition[217]. - The company has established an allowance for slow-moving finished goods inventory, reflecting estimation uncertainty based on future demand and market conditions[157].