Diamond Estates Wines & Spirits Reports Fiscal 2025 Financial Results

Rhea-AI Summary

Diamond Estates Wines & Spirits (TSXV: DWS) has reported its financial results for FY 2025, showing significant improvements despite revenue challenges. Total revenue decreased to $24.5 million from $28.5 million in FY 2024, while gross margin improved to 52.7% from 40.7%.

The company achieved positive EBITDA of $1.1 million, a substantial improvement from negative $5.7 million in FY 2024. The Winery division saw increased sales of $2.3 million, while the Agency division experienced a $6.3 million decrease. The company also announced a CFO transition, with Basman Alias replacing Ryan Conte effective August 27, 2025.

Notable improvements were driven by restructuring actions, retail expansion benefits, government support through the VQA Wine program, and increased local consumer behavior. The company received $3.1 million from the VQA Wine Support program in June 2025.

Positive

• EBITDA turned positive at $1.1 million, improving by $6.8 million from previous year
• Gross margin percentage increased significantly to 52.7% from 40.7% year-over-year
• Winery division sales increased by $2.3 million with improved margins
• SG&A expenses decreased by $2.0 million compared to prior year
• Net loss decreased substantially from $10.7 million to $2.5 million

Negative

• Total revenue declined by $4.0 million to $24.5 million
• Agency division sales decreased by $6.3 million
• Loss of a key supplier resulted in $2.1 million revenue impact
• Company still operating at a net loss of $2.5 million

Niagara-on-the-Lake, Ontario--(Newsfile Corp. - August 26, 2025) - Diamond Estates Wines & Spirits Inc. (TSXV: DWS) ("Diamond Estates" or "the Company") today announced its financial results of position for the three and twelve months ended March 31, 2025 ("Q4 2024" and "FY 2025" respectively). The completion of the Company's audit required additional procedures which extended the timing of the release of these results.

FY 2025 Summary:

• Results continue to improve in fiscal 2025 with further restructuring actions, expense reductions, the benefits of Retail expansion, government support reducing the tax burden and, more recently, North American Trade tensions fueling buy local consumer behaviour.
• Revenue for FY 2025 was $24.5 million, a decrease of $4.0 million, from $28.5 million in FY 2024. The Winery division experienced an increase in sales of $2.3 million while the Agency division experienced a decrease of $6.3 million. The increase in sales in the Winery division is largely attributable the D'ont Poke the Bear transaction and the Ontario's government announcement to expand the marketplace to convenience, grocery and big-box stores and the changes to the VQA program. The decrease in the Agency division was primarily driven by the loss of a key supplier in the prior year in the amount of $2.1 million and the sale of Western Canada operations to Renaissance which has been offset by the acquisition of Perigon.
• Gross margin¹ as a percentage of revenue was 52.7% for FY 2025 compared to 40.7% in FY 2024 and gross margin increased by $1.3 million from $11.6 million in FY 2024 to $12.9 million for FY 2025. The Winery division experienced an increase of $2.6 million while the Agency declined by $1.3 million. The gross margin in the Winery division increased from 42.9% in FY 2024 to 50.4% in FY 2025 as a result of the VQA Wine support program and general margin increases across various SKUs. The gross margin at the Agency increased from 36.2% in FY 2024 to 69.6% in FY 2025 due to the sale of Western Canada operations and the increase in commissions sales compared to buy and sell wines and spirits.
• EBITDA¹ increased by $6.8 million to positive $1.1 million in FY 2025 from a negative $5.7 million in FY 2024. The improvement in EBITDA is attributed to improving gross margins in the Winery division and an overall decrease in SG&A expenses of $2.0 million compared to the prior year.
• Similarly, Adjusted EBITDA¹ increased by $2.6 million to positive $0.8 million in FY 2025 from a negative $1.8 million in FY 2024 as a result of the improvements in the Winery division and SG&A expenses; and
• Net loss decreased from $10.7 million in FY 2024 to $2.5 million in FY 2025 per above EBITDA comments.

Q4 2025 Summary:

• Total revenue for Q4 2025 was $4.2 million, a decrease of $1.3 million compared to Q4 2024. The Winery division decreased $1.7 million, due to the full year VQA rebate revenue being fully accrued in last quarter in the prior year compared to quarterly recognition this fiscal year. However, excluding the VQA rebate Winery sales increased by approximately $0.7 million compared to Q4 2024. The Agency division increased by $0.4 million in Q4 2025 compared to Q4 2024 due to the sale of the Western Canada operations. When excluding one-time adjustments from the prior year, the Agency revenue to increased by $1.2 million.
• Gross margin¹ for Q4 2025 was $2.3 million, a decrease of $1.4 million from $3.7 million in Q4 2024 while gross margin as a percentage of revenue was 55.0% for Q4 2025 compared to 67.3% in Q4 2024. The decrease in gross margin is attributable to the VQA rebate revenue being fully accrued in Q4 2024.

CFO Transition:

We are also pleased to announce the appointment of Basman Alias as Chief Financial Officer. Basman, who joined the company on July 28, 2025 will officially replace Ryan Conte, the former CFO, on August 27, 2025.

The Company thanks Ryan for his valuable contributions and wishes him well in his future endeavours, including the possibility to consult with Lassonde Industries Inc., the largest shareholder of Diamond. Ryan was an important team member in the completion of key transformational projects for the Company. Diamond also wants to explicitly confirm that the Company's recent delay in releasing Q4 results, and Ryan's departure are not linked events, as his departure and transition had been mutually planned.

Basman was the unanimous choice in a rigorous interview process. Most recently, he was the CFO at Subterra Renewables, and his previous work experience includes Astec Industries, Garland Commercial Ranges, Treehouse Foods and Sleeman Breweries. The Company is thrilled that Basman is joining us in this exciting time for Diamond as the Company continues to positively evolve.

Subsequent Events:

• In April, 2025, the Company issued an aggregate of 221,250 DSUs in settlement of $44,250 of previously accrued deferred directors compensation.
• In April, 2025, the mortgage receivable of $500,000 related to the QMV sale from February, 2024 was received (see note 9) and the proceeds were utilized to decrease the non-revolving term loan by a corresponding amount.
• In June, 2025, the Company received $3.1 million from the VQA Wine Support program.

"The Company has made a remarkable turnaround over the past year, with continued improvements quarter by quarter culminating in much stronger full-year results. Last year, we set a goal of achieving positive EBITDA and reducing interest expense, and this fiscal year we have delivered on that goal. Our positioning in the Grocery channel has enabled us to benefit from the industry retail expansion, and we are now seeing that same success carry into the Convenience channel. We are also encouraged by enhanced government support and the growing consumer preference for Canadian wines, which further strengthens our Winery division results. In addition, we are pleased with the acquisitions of the D'Ont Poke the Bear brand and the Perigon Beverage Group sales agency, both of which align with our strategy of building a stronger, more diversified business," said Andrew Howard, President and CEO.

About Diamond Estates Wines and Spirits Inc.:

Diamond Estates Wines and Spirits Inc. is a producer of high-quality wines and ciders as well as a sales agent for over 120 beverage alcohol brands across Canada. The Company operates four production facilities, three in Ontario and one in British Columbia, that produce predominantly VQA wines under such well-known brand names as 20 Bees, Creekside, D'Ont Poke the Bear, EastDell, Lakeview Cellars, Mindful, Shiny Apple Cider, Fresh Wines, Red Tractor, Seasons, Serenity and Backyard Vineyards.

Through its commercial division, Trajectory Beverage Partners, the Company is the sales agent for many leading international brands. These recognizable brands include Fat Bastard and Gabriel Meffre wines from France, Talamonti and Cielo wines from Italy, Kaiken wines from Argentina, Koyle Family Wines from Chile, Kings of Prohibition and McWilliams Wines from Australia, Yealands Family Wines and Joiy Sparkling wine from New Zealand, Cofradia Tequilas from Mexico, Maverick Distillery spirits (including Tag Vodka, Ginslinger Gin and Barnburner Whisky), Bench Brewing, Niagara Cider, Darling Ready to Drink and Hounds Vodka from Canada, Porta 6, Julia Florista, Catedral and Cabeca de Toiro wines from Portugal, Edinburgh Gin, Tamdhu, Glengoyne and Smokehead single-malt Scotch whiskies, Islay Mist and Waterproof blended Scotch whiskies, Glen Breton Canadian whiskies, C.K Mondavi & Family, Line 39, Harken, FitVine and Rabble wines from California & Charles Krug wines from Napa Valley, Rodenbach beer from Belgium, La Trappe beer from the Netherlands, and Tequila Rose Strawberry Cream, Five Farms Irish Cream Liqueur, Broker's Gin, Hussong's Tequila, 360 Vodka and Holladay Bourbon from McCormick Distilling International.

Forward-Looking Statements:

This press release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Diamond Estates Wines and Spirits Inc. to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the economy generally; consumer interest in the services and products of the Company; financing; competition; and anticipated and unanticipated costs. While the Company acknowledges that subsequent events and developments may cause its views to change, the Company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the views of the Company as of any date subsequent to the date of this press release. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Non IFRS Financial Measure

Management uses net income (loss) and comprehensive income (loss) as presented in the unaudited interim condensed consolidated statements of net income (loss) and comprehensive income (loss) as well as "gross margin", "EBITDA" and "Adjusted EBITDA" as a measure to assess performance of the Company. The Company defines "gross margin" as gross profit excluding depreciation. EBITDA and "Adjusted EBITDA" are other financial measures and are reconciled to net income (loss) and comprehensive income (loss) below under "Results of Operations".

EBITDA and Adjusted EBITDA are supplemental financial measures to further assist readers in assessing the Company's ability to generate income from operations before considering the Company's financing decisions, depreciation of property, plant and equipment and amortization of intangible assets. EBITDA comprises gross margin less operating costs before financial expenses, depreciation and amortization, non-cash expenses such as share-based compensation, one-time and other unusual items, and income tax. Adjusted EBITDA comprises EBITDA before non- recurring expenses including cost of sales adjustments related to inventory acquired in business combinations, EWG transaction costs expensed, cost of sales adjustment to fixed production overheads, and other non-recurring adjustments included in the calculation of EBITDA. Gross margin is defined as gross profit excluding depreciation on property, plant and equipment used in production. Operating expenses exclude interest, depreciation on property, plant and equipment used in selling and administration, and amortization of intangible assets.

EBITDA does not represent the actual cash provided by the operating activities nor is it a recognized measure of financial performance under IFRS. Readers are cautioned that this measure should not be considered as a replacement for those as per the consolidated financial statements prepared under IFRS. The Company's definitions of this non- IFRS financial measure may differ from those used by other companies.

For more information, please contact:

Andrew Howard
President & CEO, Diamond Estates Wines & Spirits Inc.
ahoward@diamondwines.com

Basman Alias, CPA
CFO, Diamond Estates Wines & Spirits Inc.
balias@diamondwines.com

Neither the 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.

---

¹ See definition of selected terms under the heading "Non-IFRS Financial Measures" Page

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/264027

FAQ

What were Diamond Estates Wines & Spirits (DWWEF) key financial results for FY 2025?

Diamond Estates reported revenue of $24.5 million, positive EBITDA of $1.1 million, and a net loss of $2.5 million. Gross margin improved to 52.7% from 40.7% in the previous year.

Who is the new CFO of Diamond Estates Wines & Spirits?

Basman Alias was appointed as the new Chief Financial Officer, replacing Ryan Conte effective August 27, 2025. Alias previously served as CFO at Subterra Renewables and has experience with companies like Astec Industries and Sleeman Breweries.

How did Diamond Estates' Winery division perform in FY 2025?

The Winery division experienced an increase in sales of $2.3 million and improved gross margins from 42.9% to 50.4%, benefiting from the VQA Wine support program and retail expansion.

What was the impact of the VQA Wine Support program on Diamond Estates?

The VQA Wine Support program contributed to improved gross margins in the Winery division and the company received $3.1 million from the program in June 2025.

How much did Diamond Estates reduce its net loss in FY 2025?

Diamond Estates reduced its net loss by $8.2 million, from $10.7 million in FY 2024 to $2.5 million in FY 2025, primarily due to improved gross margins and reduced SG&A expenses.