Planet Organic Health Corp Announces First Quarter Results
7:54 PM ET, November 30, 2009
EDMONTON, Nov 30, 2009 /PRNewswire-FirstCall via COMTEX/ -- Planet Organic Health Corp (TSX Venture Exchange - POH), Canada's leading natural products retailer announces their financial results for the first quarter ended September 30, 2009. Sales from continuing operations for the quarter ended September 30, 2009 were $28.1 million compared to $27.7 million for the same period in 2008, an increase of $0.4 million, or 1.4%.
The Planet Organic Market division, operating in ten locations in Canada, reported sales for the quarter ended September 30, 2009 of $14.8 million, an increase of 1.5% over the same period last year. However, same store sales fell by 1.7% compared to the first quarter last year, primarily the result of economic conditions in Canada. The quarter results include sales from the Bayview location that is currently in the final stages of closing.
The Mrs. Green's Natural Market division, operating in eleven US locations, reported sales of $11.8 million for the quarter ended September 30, 2009, an increase of 3.8% over the first quarter last year. However, same store sales, excluding the impact of foreign exchange translation differences, fell by 1.4% from the same quarter last year.
As the two largest divisions, Planet Organic Market and Mrs. Green's Natural Market account for approximately 95% of total consolidated sales from continuing operations.
As previously announced, the Corporation has received an offer to purchase the Corporation's natural health outlets which operate under the Sangster's Health Centre banner. Additionally, the Corporation is also seeking to divest of its investment in Healthy's, The Athletes Edge Inc. which operates seven natural health outlets in the Greater Toronto Area. Together, these divisions have been reported as discontinued operations in the Corporation's first quarter report.
"While we are certainly disappointed to see negative same store sales growth in our two largest divisions, we are fortunate that the decreases remain in the very low single digits, despite some of the toughest economic conditions in recent memory" reports Darren Krissie, Executive Vice President, Business Development and co-CEO, adding that "we're starting to see positive sales growth trends in both these divisions in the last two months."
Summary of key first quarter FY2010 financial results from continuing
operations (in thousands of dollars)
Q1 Fiscal 2010 Q1 Fiscal 2009
Sales $28,067 $27,727
Cost of goods sold $17,492 $17,173
Gross profit $10,575 $10,554
Operating expenses $12,943 $11,493
EBITDASX $842 $1,085
Loss before tax ($2,368) ($939)
Income tax recovery ($1,042) ($293)
Net loss ($1,326) ($646)
Cash flow from operations $1,070 $1,952
Included in current quarter operating expenses is a loss of $2.56 million pertaining to the extinguishment of long-term debt and convertible senior notes payable as a result of the Forbearance Agreement entered into on September 25, 2009 between the Corporation and its lenders. Additionally, the Corporation recorded a foreign exchange gain of $975 thousand this quarter as the Canadian dollar strengthened against the US dollar. Last year this quarter, the Corporation recorded a foreign exchange loss of $670 thousand.
EBITDASX from continuing operations for the quarter was $0.8 million, down 22%, or $0.2 million from the first quarter last year. The decrease was driven primarily by losses from the Planet Organic Markets Bayview store which opened in the second quarter last year. This location will be closed next quarter. Cash flow from continuing operations for the quarter decreased by $0.9 million, or 45%, from the first quarter last year, primarily the result of lower same store sales, losses from the Bayview store, and pressure on gross margins this quarter. Pre-tax losses were primarily driven by the loss on extinguishment of long-term debt and convertible senior notes payable, partially offset by a foreign exchange gain of $975 thousand on conversion of U.S. denominated debt and accrued interest. The Corporation also incurred additional interest costs of $0.2 million as a result of increased interest rates, primarily due to the covenant breach last year.
"We have taken steps to reduce our cost structure and optimize efficiencies, particularly in the Planet Organic Market division and with the expected divestiture of two underperforming divisions, we'll be able to focus on our core businesses, that being Planet Organic Markets and Mrs. Green's" stated Krissie.
Shareholders are reminded that the Corporation's forbearance period expires after November 30, 2009 and the lenders have the legal right to demand repayment of all indebtedness and enforce their security over all of the Corporation's assets anytime thereafter if the Corporation fails to renegotiate the terms of the loans or arrange financing from other sources to meet its debt obligations to lenders. The Corporation is continuing to review all financing options, including the sale of additional non-core assets in order to reduce its aggregate debt load. The Corporation also confirms that it remains current on all debt, interest and vendor payables with sufficient current cash flow to maintain all current obligations.
EBITDASX reported above is a non-GAAP measure and is earnings before interest, taxes, depreciation, amortization, stock-based compensation, foreign currency translation and loss on extinguishment of
About Planet Organic Health Corp.
Planet Organic Health Corp. (POH) is a natural products industry company, comprising manufacturing, distribution and retail. Planet Organic is listed on the TSX Venture Exchange as a Tier One company. Planet Organic operates ten natural food supermarkets throughout Canada under the Planet Organic Market banner and eleven natural food supermarkets in the U.S. under the Mrs Green's Natural Markets banner. The Company also operates 43 natural health outlets under the Sangster's Health Centre banner and seven natural health outlets under the Healthy's and Planet Organic Living banners. Another Planet Organic division, Trophic Canada, is the country's leading manufacturer of natural supplements. The Company has a total of 60 stores throughout Canada and eleven in the U.S. and has more than 650 employees.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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