RYU Apparel Reports First Quarter 2017 Results

Ad blocking detected

Thank you for visiting CanadianInsider.com. We have detected you cannot see ads being served on our site due to blocking. Unfortunately, due to the high cost of data, we cannot serve the requested page without the accompanied ads.

If you have installed ad-blocking software, please disable it (sometimes a complete uninstall is necessary). Private browsing Firefox users should be able to disable tracking protection while visiting our website. Visit Mozilla support for more information. If you do not believe you have any ad-blocking software on your browser, you may want to try another browser, computer or internet service provider. Alternatively, you may consider the following if you want an ad-free experience.

Canadian Insider Ultra Club
$500/ year*
Daily Morning INK newsletter
+3 months archive
Canadian Market INK weekly newsletter
+3 months archive
30 publication downloads per month from the PDF store
Top 20 Gold, Top 30 Energy, Top 40 Stock downloads from the PDF store
All benefits of basic registration
No 3rd party display ads
JOIN THE CLUB

* Price is subject to applicable taxes.

Paid subscriptions and memberships are auto-renewing unless cancelled (easily done via the Account Settings Membership Status page after logging in). Once cancelled, a subscription or membership will terminate at the end of the current term.

RYU Apparel Reports First Quarter 2017 Results

PR Newswire

VANCOUVER, May 1, 2017 /PRNewswire/ - RYU Apparel Inc. (TSX VENTURE: RYU & Frankfurt Stock Exchange: RYA), creator of tailored innovation for the urban athlete, is pleased to report its financial results for the three months ended March 31, 2017.

Revenue in the first quarter of 2017 was $467,003, 80% higher than revenue of $259,727 during the same period in 2016. Now into its second year of operations the RYU team is encouraged with its sales record to date and a 47% gross profit for the quarter. This is RYU's seventh consecutive quarter of increasing gross profit.




Three months ended


March 31,


(unaudited)

In Canadian dollars

2017

2016

Revenue

$467,003

$259,727

Gross profit

$219,256

$134,994

Gross profit %         

47%

52%

First quarter 2017 results are consistent with fourth quarter 2016 revenue of $474,844 and gross profit of $214,336 (45%). The first quarter in a calendar year tends to be much slower than the previous fourth quarter, skewed by the Holiday Season and markdowns, and this indicates that sales have continued to grow in line with awareness for the brand. RYU products are not placed on sale at retail.

During the three months ended March 31, 2017 the Company achieved the following milestones:

  • RYU continues to show an almost equal ratio of apparel sales between men and women at 46% and 54% respectively. By identifying an underserved gap in the industry for men, and developing the Beautiful Tough brand positioning that's resonating with women, RYU has achieved an enviable gender balance that is unprecedented in the industry.

  • RYU successfully completed its first Kickstarter campaign, doubling anticipated sales and raising 208% of its initial pre-sale goal and securing over $52,000 US dollars for its new men's Ethos pullover and women's Ethos full zip hoodie.

  • As an omni-channel retailer, RYU currently has 16% of revenue from e-commerce with a target of reaching 30% by the end of 2017. Kickstarter sales were excluded from e-commerce revenue.

  • RYU's retail store expansion plan is on target to have five stores open by the end of 2017. The Company currently has three stores in operation and two under construction. In addition to the opening of Park Royal South on March 28, 2017, early third quarter 2017 will see the opening of its first Toronto store on Queen Street West, and its first enclosed mall location at Metrotown in Vancouver.




 

Retail store expansion plan

Square
Footage

Opening

Date




Existing Stores




Vancouver – West 4th Avenue (Flagship)

3,920

November 2015


Vancouver – Thurlow Street

1,100

November 2016


Vancouver – Park Royal South

3,967

March 2017




New Stores Under Construction




Vancouver – Metrotown

2,002

Q3 2017


Toronto – Queen Street West

2,220

Q3 2017

 

First quarter summary:

  • First quarter revenue of $467,003 compared with $259,727 in the same period in fiscal 2016. Revenue increased by 80% as it included sales from essentially two versus one retail stores, revenue from the Kickstarter campaign, and e-commerce sales from its improved website that had higher visitor traffic than in early 2016. The Park Royal location was only open for three days within the quarter.

  • First quarter revenue would have been higher but the Company was short on key stock items and sizes due to higher than anticipated demand and after keeping inventory purchases to a minimum in 2016. In the first quarter of 2017 RYU started placing inventory deposits to fill the gaps, but deliveries are not expected until the second and third quarters of 2017. As a result, closing inventory as at March 31, 2017 decreased 6% to $1,001,667 from $1,067,560 at December 31, 2016, while inventory deposits increased 391% to $564,844 from $115,017.

  • First quarter gross profit of $219,256 compared with $134,994 in the same period in fiscal 2016, an increase of 62%. Gross profit percentage of 47% in the first quarter of 2017 was lower than gross profit of 52% in 2016 due to the difference in the weighted average cost of finished goods inventory and the amount of sales discounts applied in each period.

  • First quarter expenses of $2,326,402 compared with $1,930,690 in the same period in fiscal 2016. The increase of 20% is primarily due to foreign currency fluctuations and share based payments in relation to stock option grants. Without these two items expenses increased $81,691 (4%) during the comparative periods, aligned with the increase in retail operations from one to three stores.

  • First quarter comprehensive loss was $2,099,443 compared with $740,096 in the same period in fiscal 2016. The loss was 184% higher due to the 2016 recovery of the warrant derivative of $1,006,263, a non-cash item, and the $49,337 gain on settlement of debt recognized in the first quarter of 2016. Without these outliers, comprehensive loss in the first quarter of 2017 and 2016 would have been $2,107,146 and $1,795,696 respectively. The $311,450 (17%) increase is due to the share based payments from the stock option grant in February 2017 and foreign currency fluctuations.

  • The Company closed a short form prospectus offering, raising gross proceeds of $3,734,441 on February 2, 2017.

Full details of the Company's financial performance can be obtained by viewing the unaudited condensed consolidated interim financial statements and corresponding MD&A available on SEDAR.

For regular updates on RYU Apparel visit: http://ryu.com

About RYU
RYU Apparel Inc. is tailored innovation for the urban athlete. An award winning athletic apparel and accessories brand engineered for the fitness, training and performance of the multi-discipline athlete. Designed without compromise for comfort, style and durability, RYU exists to facilitate human performance. For more information, visit: http://ryu.com

On Behalf of the Board

RYU APPAREL INC.
"Marcello Leone"
Marcello Leone, CEO, President and Chairman of the Board
Tel: 604-235-2880

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release contains forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of the Company, such as statements that revenues would have been higher, that the expansion plan is to have five stores open by the end of 2017, and the intention to open the Toronto store on Queen Street West and the Company's first enclosed mall location in Metrotown, all within the second half of 2017. There are numerous risks and uncertainties that could cause actual results and the Company's plans and objectives to differ materially from those expressed in the forward-looking information, including the ability of the company to finance operations, the ability of the management team to execute on its business plan, risks in the apparel industry in general, and delays and risks associated with renovating and opening new store locations. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company does not intend to update these forward-looking statements.

RYU APPAREL INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian dollars)
As at





March 31,

 2017

(unaudited)

December 31,

 2016

 




ASSETS






Current




Cash

$

1,361,528

$

767,263


Accounts receivable

69,691

82,297


Inventory

1,001,667

1,067,560


Prepaid expenses and deposits

671,892

263,912


3,104,778

2,181,032




Non-current




Deposits

160,759

172,521


Property and equipment

1,690,787

1,439,500


Intangible assets

4,453

6,549


$

4,960,777

$

3,799,602




LIABILITIES AND EQUITY






Current




Accounts payable

$

597,858

$

745,894


Accrued liabilities

159,421

169,404


Current portion of finance lease

14,706

14,779


Deferred revenue

80,878

64,732


852,863

994,809




Non-current




Finance lease

58,990

63,296


Derivative liability

-

7,703


911,853

1,065,808




Equity




Share capital

45,342,978

42,230,355


Equity reserve

7,229,304

6,927,354


Deficit

(48,590,452)

(46,491,009)


Accumulated other comprehensive income

67,094

67,094


4,048,924

2,733,794


$

4,960,777

$

3,799,602

 

RYU APPAREL INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS - UNAUDITED
(Expressed in Canadian dollars)
For the three months ended March 31









2017



 

2016







Revenue

$

467,003


$

259,727

Cost of sales


247,747



124,733

Gross profit


219,256



134,994



47%



52%

Expenses







Depreciation


66,687



57,826


Foreign exchange loss (gain)                      


25,975



(147,448)


Interest and bank charges


30,166



60,657


Investor relations


53,448



219,209


Office and general


457,168



261,649


Product creation


202,481



15,999


Professional fees


22,400



453,918


Salaries and benefits


754,469



585,633


Selling and marketing


485,044



351,136


Share based payments


203,082



62,484


Travel and entertainment


25,482



9,627



(2,326,402)



(1,930,690)







Other items







Gain on settlement of debt


-



49,337


Recovery of warrant derivative liability


7,703



1,006,263







Comprehensive loss

$

(2,099,443)


$

(740,096)







Loss per share - Basic and diluted

$

(0.01)


$

(0.01)







Weighted average number of common shares outstanding - basic and diluted


176,590,322



83,021,474

 

RYU APPAREL INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS - UNAUDITED
(Expressed in Canadian dollars)
For the three months ended March 31





 

2017

 

2016

CASH FLOWS FROM OPERATING ACTIVITIES




Net loss

$

(2,099,443)

$

(740,096)


Items not affecting cash:





Depreciation

66,687

57,826



Share-based payments

203,082

62,484



Foreign exchange

-

7,369



Accrued interest

-

27,779



Gain on settlement of debt

-

(49,337)



Recovery of warrant derivative liability

(7,703)

(1,006,263)





Changes in non-cash working capital





Accounts receivable

12,606

123,375



Inventory

65,893

(122,812)



Prepaid expenses and deposits

(396,218)

(44,668)



Accounts payable and accrued liabilities

(206,659)

439,098



Deferred revenue

16,146

989





Net cash flows used in operating activities

(2,345,609)

(1,244,256)







CASH FLOWS FROM INVESTING ACTIVITIES





Property and equipment

(267,239)

(27,230)





Net cash flows used in investing activities

(267,239)

(27,230)







CASH FLOWS FROM FINANCING ACTIVITIES





Issuance of common shares

3,734,441

1,132,625



Cash share issuance costs

(531,750)

(51,773)



Short-term loans received

-

379,050



Repayment of short-term loans

-

(210,000)



Exercise of warrants

8,800

-



Finance lease

(4,378)

(3,997)





Net cash flows provided by financing activities

3,207,113

1,245,905




Change in cash

594,265

(25,581)




Cash – beginning

767,263

104,518




Cash – end

$

1,361,528

$

78,937




Supplemental cash flow disclosure – non cash transactions






Additions of property and equipment included in accounts payable

$

48,640

$

26,965



Common shares issued for settlement of accounts payable

$

-

$

197,347

 

SOURCE RYU Apparel Inc.

Copyright CNW Group 2017

Comment On!

140
Upload limit is up to 1mb only
To post messages to your Socail Media account, you must first give authorization from the websites. Select the platform you wish to connect your account to CanadianInsider.com (via Easy Blurb).