Jamieson Wellness Inc. Reports Fourth Quarter and Full Year 2021 Financial Results

Jamieson Wellness Inc. (“Jamieson Wellness” or the “Company”) (TSX: JWEL) today reported financial results for its fourth quarter and year ended December 31, 2021. All amounts are expressed in Canadian dollars. Certain metrics, including those expressed on an adjusted basis, are non-IFRS and other financial measures. See “Non-IFRS and Other Financial Measures” below.

Highlights of Fourth Quarter 2021 Results versus Fourth Quarter 2020 Results

• Revenue increased 7.9% to $129.8 million;
• Jamieson Brands revenue increased by 11.2%;
• Adjusted EBITDA⁽¹⁾ increased 14.9% to $33.8 million;
• Net earnings increased 31.1% to $20.2 million and Adjusted net earnings⁽¹⁾ increased 16.3% to $20.5 million; and
• Diluted earnings per share were $0.48, and Adjusted diluted earnings per share⁽²⁾ increased 16.7% to $0.49.

Highlights of Full Year 2021 Results versus Full Year 2020 Results

• Revenue increased 11.7% to $451.0 million;
• Jamieson Brands revenue increased by 8.5%;
• Adjusted EBITDA increased 13.8% to $100.1 million;
• Net earnings increased 25.2% to $52.1 million and Adjusted net earnings increased 15.2% to $55.2 million; and
• Diluted earnings per share were $1.25, and Adjusted diluted earnings per share increased 13.8% to $1.32.

“We have reached a century of improving the world’s health and wellness, and the power of our Jamieson brand continues to resonate strongly with consumers,” said Mike Pilato, President and CEO of Jamieson Wellness. “Throughout 2021, we continued to put people first while focusing on operational excellence and leveraging our portfolio of high-quality, innovative products across multiple channels, globally. We closed out the year with another quarter of growth, including an 11% increase in branded revenue and a 15% increase in Adjusted EBITDA. Our market leadership was bolstered by gains in our domestic segment fueling top-line growth, and we saw margin expansion behind increased operating efficiencies. I am thankful to the entire Jamieson Wellness team for delivering another full year of outstanding results as we met many pandemic-related challenges and hit a new milestone of $100 million in Adjusted EBITDA.

“As we look to the future and our leadership beyond this 100-year mark, underlying consumer demand for our products remains strong. This, combined with our strategic focus and track record of operational excellence gives us confidence in our ability to continue driving exceptional revenue and earnings growth. We have clear growth targets and recognize that we have a responsibility to achieve them in a way that is sustainable and equitable for our team members, consumers, stakeholders, and communities around the globe. We are extremely proud of the progress and improvements we made in our environmental, social and governance practices in 2021, and of our plans to build on them in 2022 and beyond. Along with the entire team at Jamieson Wellness, I am excited about our ability to impact positive change while delivering on our aggressive but achievable targets, and look forward to solidifying our brand leadership position for the next 100 years.”

Fourth Quarter 2021 Results

Revenue increased 7.9% to $129.8 million in the fourth quarter of 2021 compared with $120.4 million in the fourth quarter of 2020 driven by 11.2% growth in Jamieson Brands, partially offset by a 1.9% decline in Strategic Partners.

Revenue in the Jamieson Brands segment increased by 11.2% or $10.1 million to $99.8 million. The Company’s domestic branded sales increased by 10.9% in the fourth quarter of 2021, with strong point of purchase sales on an expanded consumer base and inventory replenishments to support seasonal promotional activities. The Company’s international USD denominated revenue⁽³⁾ increased by 14.1%, or 12.6% on a reported basis compared with the fourth quarter of 2020 led by continued growth in China, partially offset by strong replenishments earlier in the year to other regions.

Revenue in the Strategic Partners segment decreased by 1.9%, or $0.6 million to $30.1 million in the fourth quarter of 2021 reflecting earlier shipments and 37.3% growth realized in the first three quarters to smooth out the timing of production.

Gross profit increased by $6.9 million to $49.4 million in the fourth quarter of 2021 mainly driven by revenue growth and improved operating efficiencies. Normalized gross profit margin⁽²⁾ increased by 150 basis points from 36.6% to 38.1%, reflecting margin improvements in both segments and the mix impact of proportionally higher sales in the Jamieson Brands segment. Normalized gross profit margin in the Jamieson Brands segment increased by 50 basis points from 44.8% to 45.3% due to volume driven efficiencies and cost recoveries, partially offset by ongoing operating costs associated with the Company’s new third-party logistics model, elevated costs reflecting ongoing global supply chain challenges, sustained safety measures and increased business continuity costs. Gross profit margin⁽³⁾ in Strategic Partners increased by 130 basis points from 12.9% to 14.2% mainly due to operational efficiencies.

Selling, general and administrative (“SG&A”) expenses increased by $0.9 million to $19.5 million in the fourth quarter of 2021. Normalized SG&A expenses⁽¹⁾ increased $1.3 million to $19.3 million in the fourth quarter of 2021 due to additional resources to support strategic initiatives and marketing investments.

Earnings from operations increased by $6.1 million, or 27.0%, to $28.9 million in the fourth quarter of 2021 and operating margin⁽³⁾ increased by 3.3% to 22.2% as a result of higher revenue and gross profit margins, along with lower fixed costs as a percentage of revenue. Normalized earnings from operations⁽¹⁾ increased by $4.2 million, or 16.7% in the fourth quarter of 2021 and normalized operating margin⁽²⁾ was 22.4% compared with 20.7% in the fourth quarter of 2020.

Adjusted EBITDA increased by 14.9% to $33.8 million in the fourth quarter of 2021 and adjusted EBITDA margin⁽²⁾ was 26.0% compared with 24.4% in the fourth quarter of 2020.

Interest expense and other financing costs remained consistent at $1.4 million in the fourth quarter of 2021.

Net earnings for the fourth quarter of 2021 was $20.2 million compared with $15.4 million in the fourth quarter of 2020. Adjusted net earnings, which excludes all non-operating expenses and foreign exchange, increased by $2.9 million, or 16.3%, to $20.5 million in the fourth quarter of 2021.

Adjusted net earnings excludes costs associated with foreign exchange loss, business integration, COVID-19 related costs, other non-operating earnings or expenses net of related tax effects. A quantitative reconciliation of reported net earnings to EBITDA, Adjusted EBITDA, and non-IFRS Adjusted net earnings is included in the table accompanying this release under the heading “Non-IFRS and Other Financial Measures”.

Balance Sheet & Cash Flow

The Company generated $34.3 million in cash from operations during the fourth quarter of 2021 compared with $18.7 million in the fourth quarter of 2020. Cash from operating activities before working capital considerations⁽¹⁾ of $24.5 million was $2.3 million higher due to increased earnings in the current quarter. Cash invested in working capital decreased by $13.3 million driven by favourable timing on the collection of receivables and accelerated inventory purchases realized in previous quarters. The Company’s cash as at December 31, 2021 was $6.8 million compared with $1.2 million on December 31, 2020. The Company ended the quarter with approximately $132.7 million in cash and available operating lines and net debt of $142.4 million ⁽¹⁾.

Fiscal 2022 Outlook

The Company is introducing its outlook for fiscal 2022 and anticipates revenue in a range of $474.0 to $491.0 million, which represents annual growth of 5.0% to 9.0%. The Company estimates Adjusted EBITDA in a range of $108.0 to $112.0 million and Adjusted diluted earnings per share in a range of $1.42 to $1.48.

This outlook reflects the following assumptions:

• Jamieson Brands segment revenue growth of 6.0% to 10.0%, driven by the following:
  • Domestic branded revenue growth of 4.0% to 7.0%, reflecting strong consumer demand on a higher post-pandemic baseline and the impact of retail replenishment throughout 2021, and
  • International branded revenue growth of approximately 20.0% in U.S. dollars, while reported revenues in Canadian dollars may be impacted by foreign exchange volatility.
• Strategic Partners segment revenue growth up to 5.0%.
• Normalized SG&A expense increases of 5.0% to 8.0% from increased investments in international markets and our long-term growth opportunities in China.

⁽¹⁾ This is a non-IFRS financial measure. See the “Non-IFRS and Other Financial Measures” section of this press release for more information on each non-IFRS financial measure.
⁽²⁾ This is a non-IFRS ratio. See the “Non-IFRS and Other Financial Measures” section of this press release for more information on each non-IFRS ratio.
⁽³⁾ This is a supplementary financial measure. See the “ Non-IFRS and Other Financial Measures” section of this press release for more information on each supplementary financial measure.

For additional details on the Company’s fiscal 2022 outlook, including guidance for the first quarter of 2022, refer to the “Outlook” section in the management’s discussion and analysis of financial condition and results of operations (“2021 MD&A”) for the three and twelve months ended December 31, 2021.

Declaration of Fourth Quarter Dividend

On February 23, 2022, the board of directors of the Company declared a cash dividend for the fourth quarter of 2021 of $0.15 per common share, or approximately $6.1 million in the aggregate. The dividend will be paid on March 15, 2022 to all common shareholders of record at the close of business on March 4, 2022. The Company has designated this dividend as an “eligible dividend” for the purposes of the Income Tax Act (Canada).

Board of Directors Transition

Today, the Company is announcing that David Williams, Chair of the Jamieson Wellness Board of Directors, has advised that he will not seek re-election at the Company’s 2022 Annual General Meeting (“AGM”). Mr. Williams’ retirement from the Board will take effect upon conclusion of the AGM. The Board has appointed Tim Penner to succeed Mr. Williams as Board Chair, following Mr. Penner’s election at the AGM. “As Chair of the Board of Directors since the Company’s IPO, I am proud of our accomplishments and thankful for the opportunity to contribute to the Company’s powerful vision of improving the world’s health and wellness. I am confident in Mr. Penner’s ability to lead the Board and work with management and the entire Jamieson team to continue the Company’s remarkable growth story.”

Consolidated Financial Statements and Management’s Discussion and Analysis

The Company’s audited consolidated annual financial statements and accompanying notes as at and for the three and twelve months ended December 31, 2021 and related 2021 MD&A are available under the Company’s profile on SEDAR at www.sedar.com and on the Investor Relations section of the Company’s website at https://investors.jamiesonwellness.com.

Conference Call

Management will host a conference call to discuss the Company’s fourth quarter and full year 2021 results at 5:00 p.m. ET today, February 24, 2022. The call can be accessed live over the telephone by dialing 1-888-204-4368 from Canada and the U.S. or 1-323-994-2093 from international locations. A replay will be available shortly after the call and can be accessed by dialing 1-844-512-2921 from Canada and the U.S. or 1-412-317-6671 from international locations. The passcode for the replay is 5102700 and it will be available until Thursday, March 10, 2022.

Interested parties may listen to a simultaneous webcast of the conference call by logging on via the Investor Relations section of the Company's website at https://investors.jamiesonwellness.com or directly at https://viavid.webcasts.com/starthere.jsp?ei=1525514&tp_key=3e3ea4e1b3. A replay of the webcast will be available for approximately 30 days following the call.

About Jamieson Wellness

Jamieson Wellness is dedicated to improving the world's health and wellness with its portfolio of innovative natural health brands. Established in 1922, Jamieson is the Company's heritage brand and Canada's #1 consumer health brand. Jamieson Wellness manufactures and markets sports nutrition products and specialty supplements under its Progressive, Precision and Iron Vegan brands. The Company also markets Smart Solutions, the #1 women's natural health focused brand in Canada. For more information, please visit jamiesonwellness.com.

Jamieson Wellness’ head office is located at 1 Adelaide Street East Suite 2200, Toronto, Ontario, Canada.

Forward-Looking Information

This press release may contain forward-looking information within the meaning of applicable securities legislation. Such information includes, but is not limited to, statements related to the Company’s anticipated results and its outlook for its 2022 revenue, Adjusted EBITDA and Adjusted diluted earnings per share. Words such as “expect”, “anticipate”, “intend”, “may”, “will”, “estimate” and variations of such words and similar expressions are intended to identify such forward-looking information. This information reflects the Company’s current expectations regarding future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under “Risk Factors” in the Company’s Annual Information Form dated March 30, 2021 and under the “Risk Factors” section in the 2021 MD&A filed today, February 24, 2022. This information is based on the Company’s reasonable assumptions and beliefs in light of the information currently available to it and the statements are made as of the date of this press release. The Company does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law or regulatory authority.

The Company cautions that the list of risk factors and uncertainties is not exhaustive and other factors could also adversely affect the Company’s results. Readers are urged to consider the risks, uncertainties and assumptions associated with these statements carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. See “Forward-looking Information” and “Risk Factors” within the 2021 MD&A for a discussion of the uncertainties, risks and assumptions associated with these statements.

(1) This is a non-IFRS financial measure. See the “Non-IFRS and Other Financial Measures” section of this press release for more information on each non-IFRS financial measure.

Jamieson Wellness Inc.
Segment Information
In thousands of Canadian dollars, except as otherwise noted

Jamieson Brands

Strategic Partners

(1) This is a non-IFRS financial measure. See the “Non-IFRS and Other Financial Measures” section of this press release for more information on each non-IFRS financial measure.

Jamieson Brands

Strategic Partners

Non-IFRS and Other Financial Measures

This press release makes reference to certain financial measures, including non-IFRS financial measures that are historical, non-IFRS measures that are forward-looking, non-GAAP ratios and supplementary financial measures. Management uses these financial measures for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of ongoing operations and in analyzing the Company’s business performance and trends. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. The Company uses the following non‑IFRS financial measures: “EBITDA”, “Adjusted EBITDA” and “Adjusted net earnings”, the most directly comparable financial measure for each that is disclosed in its financial statements being net earnings, “normalized gross profit”, “normalized SG&A”, “normalized earnings from operations”, “cash from operating activities before working capital considerations” and “net debt”, the most directly comparable financial measures for each that is disclosed in its financial statements being gross profit, SG&A, earnings from operations, cash flows from operating activities, and long-term debt, respectively, the following non-IFRS ratios: “Adjusted EBITDA margin”, “Adjusted diluted earnings per share”, “normalized gross profit margin”, “normalized operating margin”, and the following supplementary financial measures: “gross profit margin”, “operating margin” and “USD denominated revenue”, to provide supplemental measures of the Company’s operating performance and thus highlight trends in the Company’s core business that may not otherwise be apparent when relying solely on IFRS financial measures. Management also uses non‑IFRS and supplementary financial measures in order to prepare annual operating budgets and to determine components of management compensation. For an explanation of the composition of each such measure and the usefulness and additional uses of each by management, see the “How we Assess the Performance of our Business” section of the 2021 MD&A, which is incorporated by reference. See below for a quantitative reconciliation of each non-IFRS financial measure to its most directly comparable financial measure disclosed in the Company’s financial statements to which the measure relates.

The following tables provide a quantitative reconciliation of net earnings to EBITDA, Adjusted EBITDA, and Adjusted net earnings, as well as gross profit to normalized gross profit, SG&A to normalized SG&A, earnings from operations to normalized earnings from operations, each of which are non-IFRS financial measures (see the “Non-IFRS and Other Financial Measures” of this press release for further information on each non-IFRS financial measure) for the year ended December 31, 2021 and December 31, 2020.

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Investor and Media Contact Information:
Jamieson Wellness
Ruth Winker
416-705-5437
[email protected]