AEG Aegis Brands Inc

St. Louis continues to deliver impressive results

TORONTO, Aug. 2, 2024 /CNW/ - Today, Aegis Brands Inc. (TSX: AEG) reported financial results for the second quarter ended June 30^th, 2024.  

Highlights:

• System sales of $37.2 million in the second quarter increased by 14.6% over the prior year and increased 15.5% to $68.9 million year to date.
• Same store sales rose 11.6% and 12.2% in the quarter and year to date respectively.
• EBITDA from continuing operations in the quarter increased by 87.5% to $2.2 million compared to $1.2 million last year.
• Net income from continuing operations for the quarter was $1.0 million or $0.01 per share compared with net income of $0.1 million or $0.00 per share last year.
• St. Louis opened its first location in the province of PEI.

St. Louis Bar & Grill

St. Louis contributed $3.5 million and $3.8 million Net income and EBITDA respectively for the quarter. Year to date St. Louis produced $5.6 million in Net income and $6.2 million in EBITDA. Same store sales rose by 11.6% and same store traffic increased by 6.5% over the same quarter last year. For the year, same stores sales increased by 12.2% with same store traffic increases of 9.1%.

"Since Aegis' acquisition of St. Louis, the brand has delivered positive same store sales with the last three quarters producing 9.4%, 13.6% and 11.6% respectively. In uncertain economic times, these results are truly impressive" said Steven Pelton, President and CEO of Aegis Brands. "I am proud to work with our management team and the franchisees to increase both the top and bottom line of the stores. Year to date, we have added an approximate average of $36,000 to each store's profitability. Continually improving store economics is making an investment in our brand more compelling. As a result, our growing pipeline of franchisees will be our key to unlocking new store growth".

June marked the opening of the first St. Louis on PEI and the eighth location in the Maritime provinces. A growing pipeline of locations and franchisees in the East Coast, Ontario, and Manitoba have been developed and will expand as store level profitability continues to improve. The company is currently focused on filling in the strongest markets it has before starting to build new ones.

Last summer, St. Louis launched its famous Angus burger in grocery stores. The launch was well received and sales exceeded management's expectations. This year, burgers in grocery have already surpassed last year's sales with much of the barbeque season to come. Additionally, St. Louis will launch its signature chicken wings and boneless bites and will be available in stores starting this fall.

To continue to build on the strong performance, St. Louis is in the middle of a three-step program to attract new guests and encourage existing guests to visit more often. The company's vision is "to create a world where everyone is a regular guest" and the first step was to reinforce the foundation of the business with an expanded focus on hospitality. The second step is a significant change to the menu. Menu launches over the next few quarters will introduce new items with the intent to attract new guests, while staying true to our guests who have been loyal to the brand for years. The final step is a brand refresh. "We are continually improving and becoming more broadly appealing, and the brand refresh will help signal these changes to our guests".

Wing City by St. Louis

The two store Wing City trial has not generated sufficient returns. We are curtailing the expansion until the brand can create meaningful profitability. "Although early in this trial concept, we are actively making the changes necessary for Wing City to improve its performance." said Pelton.

Aegis

Aegis is focused on increasing shareholder value by building and evolving its brands to have second-to-none store level economics. The company's goal is to provide franchisees with brands that are the best investment option for their time and money.  "We invested in St. Louis because it has been delivering strong returns for franchisees for two decades. With our help, its economics will continue to improve and the new store growth will accelerate" said Pelton. "Wing City has the same ambitions as St. Louis, as will any other brands we purchase or develop."

Financial Highlights (in thousands of Canadian dollars):

Revenue:

Net income (loss) to operating income:

Net income (loss) to EBITDA and Adjusted EBITDA:

Net income (loss) to adjusted net income (loss):

Net income (loss) per share to adjusted net income (loss) per share:

About Aegis Brands

Aegis Brands owns and operates St. Louis Bar and Grill and Wing City by St. Louis. The Company is committed to letting each brand operate independently while providing shared expertise to help them thrive. For more information, please visit www.aegisbrands.ca.

NON-IFRS MEASURES 

Aegis measures the success of its business in part by employing several key performance indicators referenced herein that are not recognized under IFRS, including same store sales and EBITDA. These indicators should not be considered an alternative to IFRS financial measures, such as net income, and are presented in this presentation because management of Aegis believes that such measures are relevant in interpreting the performance of its business. As non‐IFRS financial measures do not have standardized definitions prescribed by IFRS, they are less likely to be comparable with other issuers or peer companies. A description of the non‐IFRS measures used by Aegis in measuring its performance and a reconciliation of certain non‐IFRS measures to the nearest IFRS measure is included in Aegis' management's discussion and analysis for the year ended December 31, 2023 available on SEDAR at www.sedarplus.ca. 

FORWARD LOOKING STATEMENTS 

This press release contains forward-looking statements within the meaning of Canadian securities laws. The forward-looking statements included in this press release, including statements regarding the nature of Aegis' growth strategy going forward and Aegis' execution on any of its potential plans (including with respect to the growth and development of St. Louis Bar and Grill and Wing City), are not guarantees of future results and involve risks and uncertainties that may cause actual results to differ materially from the potential results discussed in the forward-looking statements.  

Risks and uncertainties that may cause such differences include but are not limited to: risks related to the company's strategy going forward; risks related to the rising interest rates and inflationary pressures on the cost of doing business; and other risks inherent in the industry in which Aegis operates. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Additional information on these and other factors that could affect Aegis' operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedarplus.ca). 

The forward-looking statements in this press release are made as of the date it was issued and Aegis does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.  

For more information, please visit aegisbrands.ca. 

SOURCE Aegis Brands Inc.