GRIMSBY, ONTARIO -- (Marketwired) -- 06/05/13 -- Andrew Peller Limited (TSX: ADW.A)(TSX: ADW.B) (the "Company") announced today continued strong operating and financial performance for the three months and year ended March 31, 2013.
FISCAL 2013 HIGHLIGHTS:
-- Sales up 4.4% to record levels on solid growth through majority of trade channels-- Net earnings rise 13.5% to $14.8 million or $1.06 per Class A Share-- Net earnings excluding restructuring charge up 19.9% to $15.6 million or $1.12 per Class A Share-- Launch of new brands contributed to organic growth-- Peller Estates remains top-selling wine brand across Canada-- Brands continue to win top awards at international wine competitions-- 11% increase in common share dividends announced
"We are very pleased with our solid growth and strong operating results in fiscal 2013, and look forward to continued growth in sales and earnings in the future," commented John Peller, President and CEO. "With our record results, we were pleased to announce an 11% increase in common share dividends, our 5th increase in 8 years and a reflection of a highly positive outlook on our future and commitment to enhancing long-term shareholder value."
Sales for the fourth quarter of fiscal 2013 rose 4.4% to $63.6 million from $60.9 million in the prior year. For the year ended March 31, 2013 sales increased 4.4% to $289.1 million from $276.9 million last year. The increases in revenues are due primarily to the positive impact on sales from the licensing agreement with the Wayne Gretzky winery effective November 8, 2011, the acquisition of Cellar Craft that was effective October 28, 2011, as well as solid organic growth arising from new product introductions, increased sales of premium blended and varietal table wine brands sold through provincial liquor boards, growth in sales at the Company's retail store network, and strong export sales.
Gross margin was 35.6% of sales in the fourth quarter and 38.0% for the year ended March 31, 2013 compared to 36.1% and 38.7% respectively in the same periods last year. Gross margin percentage was negatively affected by higher costs for wine purchased on international markets in fiscal 2013 as well as increased price competition in certain markets. The decrease in gross margin percentage was partially offset by the positive impact of sales of higher margin products and successful cost control initiatives to reduce distribution, operating, and packaging expenses. A special levy implemented by the Ontario government on July 1, 2010 served to reduce sales and gross margin by approximately $2.0 million and $1.9 million in fiscal 2013 and fiscal 2012 respectively.
Selling and administrative expenses increased in fiscal 2013 due to an increase in advertising and promotional initiatives across all trade channels and an increase in consulting expenses incurred to implement cost control and information technology initiatives. However, as a percentage of sales, selling and administrative expenses for the year ended March 31, 2013 decreased to 26.4% from 26.9% last year.
In the fourth quarter of fiscal 2013 the Company incurred a one-time charge of $1.1 million in its personal winemaking division. The expenses related to the closing of a Western Canadian distribution centre as the Company implemented a cost savings initiative to outsource all of its distribution to an experienced third-party and reduced certain marketing and administrative positions.