Birks(US:BGI)2025-07-25 20:45Financial Performance - The company reported an accumulated deficit of $138.3 million as of March 29, 2025, with a net loss of approximately $12.8 million for the fiscal year ended March 29, 2025[35]. - For fiscal 2025, the Company reported a net loss of $12.8 million, compared to $4.6 million in fiscal 2024 and $7.4 million in fiscal 2023[47]. - The Company reported a stockholders' deficit of U.S. $6.1 million as of September 28, 2024, and has net losses in two of its three most recent fiscal years[89]. - The company recognized a net loss of $12.8 million, or $0.66 per share, in fiscal 2025, compared to a net loss of $4.6 million, or $0.24 per share, in fiscal 2024[188]. - Total net sales for fiscal 2025 were $177.8 million, a decrease of $7.5 million, or 4.0% compared to fiscal 2024[182]. - The reported operating loss for fiscal 2025 was $5.5 million, compared to an operating income of $1.2 million for fiscal 2024[182]. - Total gross profit for fiscal 2025 was $66.3 million, or 37.3% of net sales, down from $73.6 million, or 39.7% of net sales in fiscal 2024[182]. - The Company's EBITDA for fiscal 2025 was $9.2 million, a decrease of $0.8 million compared to fiscal 2024[182]. Debt and Financing - Total indebtedness increased by $9.6 million in fiscal 2025, reaching $99.864 million, compared to $90.311 million in fiscal 2024[36]. - The ratio of total indebtedness to total capitalization rose to 122.0% as of March 29, 2025, up from 106.0% as of March 30, 2024[36]. - The Amended Credit Facility was increased to a maximum amount of $90.0 million, with a maturity date extended to December 2026[42]. - The Amended Term Loan was amended to include an additional term loan of $13.5 million to fund the European Acquisition and ordinary course working capital[43]. - The company is required to maintain minimum excess availability under its Amended Credit Facility and Amended Term Loan to avoid default[41]. - The company had an outstanding balance of $73.6 million under its Amended Credit Facility, which has a maximum limit of $90.0 million[220]. - The Amended Credit Facility was extended to December 2026 and allows for an increase in total commitments by up to $5.0 million[221]. - The company is required to maintain excess availability of at least 40% of the borrowing base to pay dividends[226]. Operational Challenges - The company has negative cash flows from operations, which could adversely impact its financial condition and ability to continue as a going concern[35]. - The company’s operations are sensitive to economic conditions, including inflation and interest rates, which could impact consumer spending and sales[32]. - The company faces operational risks related to leasing retail stores, with only four leases renewable within the next two years, generating about 15.8% of fiscal 2025 net sales[61]. - The company may face significant costs and operational disruptions if it fails to successfully implement changes to its information systems[68]. - The company has identified material weaknesses in its internal control over financial reporting, which could negatively affect confidence in its financial statements[97]. Sales and Market Trends - Merchandise supplied by the largest luxury timepiece supplier accounted for approximately 29% of total net sales in fiscal 2025[62]. - Jewelry and other product category sales decreased to $68,927, representing 38.8% of total sales in fiscal 2025, down from $86,256 (46.6%) in fiscal 2024[114]. - Timepieces sales increased to $108,880, accounting for 61.2% of total sales in fiscal 2025, up from $99,019 (53.4%) in fiscal 2024[114]. - Comparable store sales decreased by 3.4% in fiscal 2025, with a 6.9% increase when excluding the impact of the third-party jewelry brand exit[185]. - The third fiscal quarter, including the holiday shopping season, contributed 34% of net sales in fiscal 2025, compared to 33% in fiscal 2024[127]. Capital Expenditures and Investments - Planned capital expenditures for remodeling retail stores are estimated at approximately $2.1 million during fiscal 2026[61]. - The Company invested approximately $25.4 million in capital expenditures over the last three fiscal years, with $7.5 million invested in fiscal 2025 alone[109]. - The Company completed the acquisition of 1067830 Ontario Limited for a total consideration of $9.0 million on July 8, 2025[108]. Environmental and Social Responsibility - The company recognizes the impact of climate change and is taking steps to reduce its environmental footprint, as adverse effects could disrupt operations and consumer spending[78]. - The company is committed to enhancing its Environmental, Social, and Governance (ESG) practices, focusing on sustainable operations and ethical sourcing[149]. - The company has established a Diversity, Equity, and Inclusion (DE&I) Committee to promote an inclusive culture and has delivered mandatory training on diversity and unconscious bias to all employees[148]. - The company has a zero-tolerance policy for discrimination or harassment and strives to maintain an open dialogue with employees to improve the workplace[164]. Shareholder and Governance - As of May 31, 2025, the company had 11,876,717 Class A voting shares issued and outstanding, with 69.6% of voting shares controlled by The Grande Rousse Trust[75][84]. - The Company submitted a compliance plan on March 27, 2025, which was accepted by NYSE American, granting an extension for continued listing until August 25, 2026[90]. - The company is subject to periodic review by NYSE American during the Plan Period, with potential delisting if compliance is not regained[92].